Below is a posting from last year regarding the Kastel building in Adriatica. I found it interesting that the Collin CAD 2007 assessed value is $6,200,000 and my analysis came in at a value of $6,500,000. I have created a spreadsheet that lists the values of major buildings and tracts of land in Adriatica based on the Collin CAD 2007 assessed values. I don’t think the value of the Kastel building is out of line based on a cost approach, but don’t think the income will support a $6,200,000 value. You will notice that the land values assigned are off of the charts. In my opinion and experience, the CAD is putting the values at the high end of the market and fishing for costs and sales prices from Blackard and the owners within Adriatica. When we get the certified values in a few months, I predict these values will be lower.
Spreadsheet

Loopnet, a service that lists commercial property for sale and lease shows that current rental rates for Mr. Blackard’s Kastel (Keller Williams) Building to be $36.00 per square foot full service. Based on my experience and knowledge of commercial buildings, it is not too far fetched to estimate the cost of this building exceeds $6,500,000. If the 30,000 square foot building were 100% leased at the $36.00 per square foot rental rate, the typical investor would estimate the value of the building to be in the $5,000,000-$5,500,000 range. Realistically using a 10 % vacancy rate the value would be in the $4,800,000 to $5,000,000 range. My observation? This building is a project that Mr. Blackard wants and is willing to build to his requirements regardless of profit. My prediction is that this building will need to lower its rental rates to attract tenants or it will sit with a high vacancy rate. I believe realistically the rates for this building should be in the $20-$25 range based on the surrounding office rents. If this building can only command $25 per square foot, it would probably support a sale price of $3,500,000-$4,000,000 to a savvy investor.