| Feasibility Studies | | | | seasoned judgment is necessary: 1) judgment |
| | | | regarding market rent, occupancy and |
| Feasibility studies are a combination of a | | | | absorption and 2) judgment regarding the |
| market study and financial analysis used to | | | | amount of entrepreneurial profit and return |
| determine if it is financially feasible to | | | | for the equity investor necessary to make a |
| develop a proposed property. They are also | | | | property financially feasible. |
| performed to evaluate the feasibility of | | | | |
| renovating or upgrading an existing property. | | | | O'Connor & Associates is the largest |
| Feasibility studies determine whether a | | | | independent appraisal firm in the |
| property is financially feasible and whether | | | | southwestern US and has over 40 full-time |
| its complete and stabilized value are | | | | staff members engaged full-time in valuation |
| equal to or exceed (1) the total costs | | | | and market study assignments. Our expertise |
| to build it, (2) entrepreneurial profit and | | | | includes feasibility studies, valuing real |
| (3) an adequate return for the capital | | | | estate, business personal property, business |
| invested to develop the property. | | | | enterprise value, purchase price allocation |
| | | | for businesses, valuation for property tax |
| Following is a summary of the steps in | | | | assignments, partial interest valuation, |
| performing a feasibility study: | | | | estate tax valuation, expert witness |
| | | | testimony and valuation for condemnation. We |
| - Develop scope of work with client; | | | | have performed hundreds of feasibility |
| | | | studies. |
| - Gather data (rent comparables, properties | | | | |
| under construction, proposed properties, | | | | To obtain a quote or further information for |
| market occupancy and absorption, submarket | | | | a feasibility study, contact either George |
| occupancy and absorption and data for | | | | Thomas or Craig Young at 713-686-9955 or fill |
| economic drivers which impact future | | | | out our online form. |
| prosperity for the real estate market); and | | | | |
| | | | The appraisal division of O'Connor & |
| - Analyze data to develop opinions of market | | | | Associates is a national provider of |
| rent, stabilized occupancy and the time | | | | commercial real estate appraisal services |
| likely required for the proposed property to | | | | including cost segregation studies, due |
| reach stabilized occupancy. | | | | diligence, insurance valuations, expert |
| | | | witness testimony, tax reductions, real |
| Most market studies focus upon the revenue | | | | estate consulting, feasibility studies, |
| portion of a profit and loss statement. They | | | | financial modeling, gift tax valuations, |
| do not address operating expenses or the | | | | highest and best use analyses, casualty loss |
| value of the property at stabilized | | | | valuations and HUD map market studies. |
| occupancy. A feasibility study addresses the | | | | |
| factors in a market study and also addresses | | | | All commercial property types benefit from |
| operating expenses and the value as | | | | our appraisal services including department |
| stabilized. Feasibility studies also address | | | | stores, research and developments, lumber |
| whether the indicated market value is | | | | storages, fast food restaurants, convenience |
| sufficient for the property to be financially | | | | stores, retail centers, airplane hangars, |
| feasible. | | | | lodgings, daycare centers, hotels, truck |
| | | | stops, manufacturing/processing facilities, |
| A feasibility study involves two areas where | | | | greenhouses and auto dealers. |