Church to Retail Use Appraisals

Churches are special-purpose or special-use properties and generally not easily converted to alternate uses like retail.  Usually you can’t modify a Sanctuary or most other religious buildings for another use, they are just not designed for that purpose. 

In Las Vegas there are church groups that have purchased what were originally office buildings or retail buildings and then they modified them for church use.  Some of those buildings can be reclaimed and used for their original purpose, usually with significant renovation.  These buildings are usually rectangular-shaped, one story buildings but they are relatively rare.

The market for a developed church is almost non-existent in Las Vegas.  During some years there are one or two church sales and in others there are absolutely none.  A church that occupies a high-traffic corner in an excellent commercial location can become quite valuable since it occupies a development site, and an appraiser can value the underlying land, but the value of the existing church improvements often has value only to the church.  The cost approach is one of the only ways to get to a value of the existing improvements.

The question for a church is, does the cost approach valuation really reflect the value of the improvements to the church’s congregation.  It’s not always an entirely economic decision that a church must make.  The depreciated value of a religious building may be $ 1 million dollars plus the site may double that value, but if a huge congregation would have to spend five times more than that to replace the church building it’s really worth a lot more to them than the appraisal will reflect.

The value of a church building to its congregation is generally beyond the scope of most real property appraisals.  Thus, a church appraisal can usually answer only some of the questions that a congregation may have.

When religious buildings become well-depreciated, and they have no historical significance, it’s usually an easier decision for the building owners / the congregation to let them go.  But they still have to consider whether or not they are necessary.  Church congregations are locational, if the church destroys its place of worship without providing an alternative close-by they can lose their entire following.

For more appraisal information contact Glenn J. Rigdon MA, MRICS, ASA is a Las Vegas / Henderson Nevada based appraiser who can be contacted via email or via his business website known as Appraiser Las Vegas  (http://www.appraiserlasvegas.com), or http://www.horizonvillageappraisal.com, or you can also click on “Contact Us” on the home page of this website or visit my public profile at LinkedIn at http://www.linkedin.com/pub/glenn-rigdon-ma-mrics-asa/1a/30b/879/

Article source: http://www.appraisalarticles.com/Real-Property-Appraisal/Church-Religious/4693-Church-to-Retail-Use-Appraisals.html