PBN: What’s a day in the life like for a Rhode Island commercial real estate appraiser? What are your job duties as an appraiser for Sweeney Real Estate & Appraisal?
WIDMANN: A typical day includes many things. Responding to emails and phone calls from clients who are looking for appraisal quotes. Clients range from banks, lawyers, accountants and municipalities to the general public for private use, such as an estate or divorce situation. I then spend time researching comparable sales and writing up appraisal reports. Which can either be in narrative style or filling out forms.
We also physically go and see properties. This can vary from simply walking around the exterior of the property to an interior inspection of the building. I do this while taking pictures and notes on the state of condition, location of rooms and any upgrades to the spaces.
PBN: Cities and towns are now going through a revaluation period. How is that going to affect the property owners, whether commercial or residential?
WIDMANN: It will be interesting to see the revaluation impact, as there has been a significant increase in property values over the last few years. If the tax rates stay the same in the cities and towns, there will be significant tax increases to property owners.
However, cities and towns usually compensate for this with lowering the overall real estate tax rates, with the intention to minimize the increase in property taxes. At least, in theory, that’s how that should work. But as we have all seen, there are revenue shortcomings within cities and towns, and this certainly would be a way for them to make up for that.
PBN: How do you determine the highest and best use of a site?
WIDMANN: The Appraisal Institute defines highest and best use as the reasonably probable and legal use of vacant land or an improved property that is physically possible, appropriately supported, financially feasible and that results in the highest value.
In order to determine the highest and best use, the four criteria that highest and best use must meet are:
- Legal permissibility, as permitted by zoning, governmental restrictions and deed restrictions.
- Physical possibility, meaning the possible use or those uses that are physically possible.
- Financial feasibility, the feasible use, or possible and permissible uses, which will produce a net return to the owner of the site.
- Maximum profitability, which is the use that will produce the highest return or highest present worth to an owner.
PBN: How has that process of determining the highest and best use of a site changed since 2020?
WIDMANN: The process of determining the highest and best use never changes. But the highest and best use of some properties have changed since 2020. An example is an office development site that was determined highest and best three years ago is now seeing the highest and best uses going to more commercial/retail, or mixed-uses with affordable housing components.
The “Superman” building is a good example. It was built for and was always utilized as office space. Once it became vacant and demand for that much downtown office space waned, it sat for a long time until plans called for it to be redeveloped into residential uses.
PBN: What are your thoughts on the office market right now in the Providence area in the wake of the COVID-19 pandemic, which led to a lot of office workers becoming remote employees working from home?
WIDMANN: The office market in Providence is changing since the COVID-19 pandemic. We have seen clients go from the entire top story of a Providence office building to moving out of Providence to a space that is half the size as a result of realizing during the pandemic that a good deal of their staff could work from home. Another company is selling their office condominium unit, and once it is sold, they will go 100% remote for everyone.
We are also seeing the advent of the shared office workspace like in the CIC building, which is a co-working community which supports companies of all sizes with flexible, shared office space and high-end amenities. It allows for month-to-month or short-term flexible office spaces, which gives companies and their workforce flexibility.