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Commercial

IDENTIFICATION of MODEL AREA

The Commercial model is an income model that values all non-residential income-producing properties not valued in the Auto Dealership, Enclosed Shopping Centre, Hotel/Motel, Office, Parking or Industrial models.  Generally described, these properties include small offices, all retail except the major enclosed shopping centres, restaurants, small general purpose warehouses (with commercial zoning), and other general commercial properties.

The Commercial model is a city-wide model in application.  There are a number of distinct commercial areas located throughout the city.  These are individually described below.

 

Zoning Descriptions

Properties valued by the Commercial model reflect numerous zoning classifications.  The following are the predominant zonings located throughout the various general commercial neighbourhoods in Regina.  These are cursory generalized descriptions only and not meant to reflect complete details concerning these classifications:

  • NC – Neighbourhood Commercial: business establishments that serve the day-to-day commercial and personal needs of households
  • LC1, LC2, LC3 – Local Commercial: commercial and personal service uses at moderate density to serve areas beyond the NC zone
  • MS – Main Street: high density developments to serve housing, business and amenity needs in the Northwest sector of the city
  • HC – Highway Commercial: retail, business and personal services to the travelling public, requiring a high level of accessibility and parking
  • MAC, MAC3 – Major Arterial Commercial: retail, service and office businesses serving the travelling public and residents, requiring locations with good visibility and arterial road access
  • DSC – Designated Shopping Centre: development of planned shopping centres
  • D – Downtown: concentration of retail, office, service and cultural facilities, high density residential developments, and ground floor and pedestrian-oriented streets containing clusters of retail, personal services entertainment and drinking establishments
  • MX – Mixed Residential Business: flexible use of properties in residential areas that are in transition from residential development

 

Neighbourhood 4410

Neighbourhood 4410 comprises the major arterial route locations in the main commercial retail areas, including Albert Street South (25th Avenue to Gordon Road) and North (4th Avenue north to the Ring Road), Victoria Avenue East (Ring Road and eastward) and Quance Street, Rochdale Boulevard (east portion from McCarthy Boulevard east to Vanstone Street), and the Grasslands retail area in southwest Regina.  These commercial districts are predominantly zoned MAC (Major Arterial Commercial) and generally feature a variety of site sizes with good to high visibility, on-site parking, the majority of buildings constructed from the 1970s to the present (average 1988), and a broad variety of commercial activities including office, retail, restaurant, retail service, automotive, and professional services.

 

Neighbourhood 4420

Neighbourhood 4420 is similar to Neighbourhood 4410 but comprises the more established locations on the major arterial routes, including the central portion of Albert Street between the CP tracks and 4th Avenue, Victoria Avenue between Osler Street and the Ring Road, 11th Avenue between Osler Street and Arcola Avenue, Saskatchewan Drive from Osler Street to Arcola Avenue, Arcola Avenue from Winnipeg Street to Victoria Avenue, Dewdney Avenue from Lewvan Drive to Princess Street, Park Street from Victoria Avenue to the CP tracks, Rochdale Boulevard from McIntosh Street west to the CP tracks, Broad Street from the CP tracks to 4th Avenue and the CN tracks to 6th Avenue North, and the Normanview Shopping Centre area at McCarthy Boulevard and 9th Avenue North.  These commercial districts are predominantly zoned MAC (Major Arterial Commercial) and generally feature a variety of site sizes with moderate to good visibility, a mixture of off-site and on-site parking, the majority of buildings constructed from the late 1950s through the 1980s (average 1968), and a broad variety of commercial activities including office, retail, restaurant, retail service, automotive, and professional services.

 

Neighbourhood 4430

Neighbourhood 4430 is a small area situated along Eastgate Drive and Prince of Wales Drive in East Regina.  This area is zoned MAC (Major Arterial Commercial) and HC (Highway Commercial) and generally features small to medium site sizes with good to high visibility, on-site parking, all buildings constructed since 1985 with the vast majority constructed from 2000 onward, and commercial activities catering, for the most part, to the travelling public including motels, restaurants and a truck stop facility.

 

Neighbourhood 4450

Neighbourhood 4450 comprises all non-arterial route locations in south Regina from the CP tracks southward.  These commercial districts are scattered throughout the residential areas and are predominantly zoned LC1 and LC2 (Local Commercial) and NC (Neighbourhood Commercial).  These commercial districts generally serve the local communities in which they are situated and include the Cathedral shopping area, the Hill Street commercial area, Pasqua Street South (Regina Avenue south to Gordon Road), and commercial developments around University Park Drive and Prince of Wales Drive (Quance Street south to Assiniboine Avenue), among others.  These areas generally feature a variety of site sizes with moderate visibility, a mixture of off-site and on-site parking, buildings constructed from the early 1900s to the present with the majority of buildings constructed from the 1950s through the 1980s (average 1970), and a broad variety of commercial activities including office, retail, restaurant, retail service, automotive, and professional services.

 

Neighbourhood 4460

Neighbourhood 4460 is similar to Neighbourhood 4450 but encompasses all non-arterial route locations in north Regina from the CP tracks northward.  As in Neighbourhood 4450, these commercial districts are scattered throughout the residential areas and are predominantly zoned LC1 and LC2 (Local Commercial) and NC (Neighbourhood Commercial).  These commercial districts generally serve the local communities in which they are situated and include the Regent Park, Rosemont, among others.  These areas generally feature a variety of site sizes with moderate visibility, a mixture of off-site and on-site parking, buildings constructed from the early 1900s to the present with the majority constructed from the 1960s through the 1980s (average 1976), and a broad variety of commercial activities including office, retail, restaurant, retail service, automotive, and professional services.

 

Neighbourhood 4470

Neighbourhood 4470 comprises commercial districts located in the central neighbourhoods of Windsor Place and Washington Park (northwest of the downtown core bordered by Lewvan Drive to the west, CN tracks to the north, Albert Street to the east and the CP tracks to the south), and the General Hospital area and Broder’s Annex (southeast of the downtown core bordered by Osler Street to the west, Saskatchewan Drive to the north, Arcola Drive to the east and College Avenue to the south).  These commercial districts are predominantly zoned LC1 and LC3 (Local Commercial) and NC (Neighbourhood Commercial) and generally feature small site sizes, minimal visibility, a mixture of off-site and on-site parking, buildings constructed from the early 1900s to the present with the majority constructed in the 1920s, 1950s, 1960s and 1980s (average 1958), and a broad variety of commercial activities generally serving the local communities in which they are situated, including office, retail, restaurant, retail service, automotive, and professional services.

 

Neighbourhoods 4510, 4520 and 4540

Neighbourhoods 4510, 4520 and 4540 comprise what is generally recognized as the downtown area of Regina.  Neighbourhood 4520 is the downtown core area, 4510 is the commercial heart of 4520 featuring the Cornwall Centre and the core’s high-rise office buildings, and 4540 is the Centre Square neighbourhood (formerly known as the Transitional Area) that borders the south side of the downtown core.

Neighbourhood 4510 is roughly bordered by Saskatchewan Drive to the north, 12th Avenue to the south, Lorne Street to the west and Rose Street to the east.  This small area is almost entirely zoned D (Downtown) and features the majority of the city’s high-rise office buildings, the Cornwall Centre Shopping Centre, and the Frederick Hill Mall with its mixture of pedestrian-oriented retail, service and restaurant uses in turn-of-the-century buildings.  This area is characterized by small to medium sites with off-site parking and buildings constructed from the early 1900s to the 1990s (average 1951).  Two new high-rise office towers were constructed in 2011 and 2015.

Neighbourhood 4520 surrounds Neighbourhood 4510 and is roughly bordered by Saskatchewan Drive to the north, 13th Avenue to the south, Angus Street to the west and Osler Street to the east.  This area is also predominantly zoned D (Downtown) and features high-rise office buildings, City Hall and the Main Library, and a mixture of single storey to low multi-storey retail, office, restaurant, service and institutional uses.  This area is characterized by small to medium sites mostly with off-site parking and buildings constructed from the early 1900s to the present, with the majority of buildings constructed in the early 1900s, 1920s and the 1950s through the 1980s (average 1957).

Neighbourhood 4540 abuts Neighbourhood 4520 along its south border and is roughly bordered by 13th Avenue to the north, College Avenue to the south, Albert Street to the west and Broad Street to the east.  This area is predominantly zoned TAR (Transitional Area Residential) and features an older residential area in transition to house-form uses including offices, retail and restaurants.  This area is characterized by small to medium sites mostly with off-site parking and buildings constructed from the early 1900s to the present, with the majority of buildings constructed in the early 1900s and the 1950s through the 1980s (average 1954).

 

MAP

 

EXECUTIVE SUMMARY

Commercial Model

Appraisal Cycle Date – January 1, 2017 to December 31, 2020

Effective Date of Valuation – January 1, 2015

Date of Report – October 11, 2016

Rent Model

 

Vacancy and Shortfall:

Vacancy (commercial component)

            Main Floor – 1960 and Newer    = 4%

            Main Floor – 1959 and Older      = 7.2%

            Upper Floor – 1960 and Newer   = 9.2%

            Upper Floor – 1959 and Older    = 15.3%

Shortfall = 1.35%

 

Overall Capitalization Rates

Base Cap Rate

   6.455

Adjustments to Cap Rate:

Site Coverage < 30%, Per Percentage, to 8%

   -.084

 

Assessment to Sales Summary Results

Number of Sales

91

Median Assessment to Sale Price Ratio (ASR)

0.982

Coefficient of Dispersion (COD)

18.90%



SCOPE of DATA and ANALYSIS

Commercial Rent Model

Each year, the City Assessor requests copies of rent rolls for all non-residential properties in the City of Regina.  The data for the development of the mass appraisal net rent model came from these returned rent rolls.  

A total of 1,416 retail net rents were analyzed using Multiple Regression Analysis.  The rent model is an additive model that predicts rents based on the type of lease space, location of the lease space both within the city and location within a building, lease area size, and effective age of building.  The following table provides a breakdown of these rents along with statistical measurements.

 

Commercial Rent Statistics (commercial component)

 

Overall Capitalization Rates and Adjustments

Economic capitalization rates were estimated by dividing the predicted base date net operating income (generated from the net rent model) by adjusted sale prices.  Sales used in this analysis occurred between January 1, 2011 and December 31, 2015.  These sales were verified by mailing questionnaires to both vendors and purchasers.

Sales were adjusted for non-realty items and other factors when warranted.  Sales were also adjusted to the base date of January 1, 2015.  The indicated time adjustment was approximately 1.1% per month for the first 33 months (January 2011 to September 2013) and no further adjustment for sales occurring after September 2013. 

 

Commercial Capitalization Model

The economic capitalization rate analysis involved 91 sales, detailed in the following table.

Account Address Sale Month Sale Year Adjusted Sale Price Proposed Income Indicated Cap
10022149 655 BROAD STREET 8 2014 9,000,067 468,200 5.2
10070077 3710 E QUANCE STREET 5 2013 18,296,516 1,031,900 5.64
10054871 4520 ALBERT STREET 7 2014 9,974,074 587,800 5.89
10027144 1275 ALBERT STREET 3 2012 6,818,865 271,700 3.98
10001929 1011 N DEVONSHIRE DRIVE 2 2012 4,801,089 298,800 6.22
10053309 3801 ALBERT STREET 3 2014 4,330,032 288,400 6.66
10026923 2514 DEWDNEY AVENUE 8 2012 403,493 17,000 4.21
10070075 3110 E QUANCE STREET 5 2013 10,969,761 704,100 6.42
10070126 2660 E STAR LITE STREET 10 2012 9,559,978 495,400 5.18
10021964 640 ALBERT STREET 8 2014 563,338 32,800 5.82
10163283 1800 WINNIPEG STREET 11 2011 165,376 11,900 7.2
10033091 1763 HALIFAX STREET 6 2014 315,002 13,100 4.16
10033089 1757 HALIFAX STREET 4 2011 233,471 13,300 5.7
10026921 2520 DEWDNEY AVENUE 1 2013 321,984 28,500 8.85
10033665 340 VICTORIA AVENUE 2 2012 313,917 15,200 4.84
10025854 1042 ALBERT STREET 3 2011 534,146 46,300 8.67
10026947 2424 DEWDNEY AVENUE 7 2014 1,450,011 62,800 4.33
10033657 438 VICTORIA AVENUE 2 2012 742,322 47,100 6.34
10033115 1440 11TH AVENUE 1 2014 810,006 63,200 7.8
10033004 1429 11TH AVENUE 6 2012 477,228 32,200 6.75
10032484 2704 10TH AVENUE 6 2013 770,896 32,100 4.16
10032947 1801 TORONTO STREET 4 2012 554,027 35,600 6.43
10026486 1246 ALBERT STREET 6 2012 1,649,676 150,500 9.12
10026915 1405 ALBERT STREET 9 2011 487,598 39,100 8.02
10026638 1459 RETALLACK STREET 2 2014 280,002 20,000 7.14
10055110 4545 ALBERT STREET 6 2012 665,762 75,800 11.39
10065655 9 COVENTRY ROAD 12 2013 490,004 21,600 4.41
10054867 2615 31ST AVENUE 10 2012 812,079 46,400 5.71
10012935 135 N ALBERT STREET 7 2013 792,150 48,600 6.14
10012309 104 N ALBERT STREET 11 2011 1,579,759 76,100 4.82
10091135 1580 ALBERT STREET 5 2011 1,926,926 125,900 6.53
10032872 1002 VICTORIA AVENUE 3 2011 624,814 30,900 4.95
10026948 2410 DEWDNEY AVENUE 10 2014 5,700,042 340,500 5.97
10054868 4410 ALBERT STREET 3 2011 1,227,411 70,500 5.74
10033199 1100 11TH AVENUE 5 2012 565,868 36,100 6.38
10034187 1701 PARK STREET 2 2013 539,798 40,000 7.41
10032585 1965 HAMILTON STREET 1 2014 810,006 35,000 4.32
10065704 2425 11TH AVENUE 9 2014 600,004 45,900 7.65
10033735 855 ARCOLA AVENUE 8 2011 596,813 50,200 8.41
10087726 1055 N STOCKTON STREET 9 2012 3,449,391 210,900 6.11
10034752 1832 E VICTORIA AVENUE 11 2011 11,124,704 672,100 6.04
10032610 1843 HAMILTON STREET 6 2014 1,100,008 62,700 5.7
10032657 1806 SMITH STREET 6 2014 950,007 140,100 14.75
10087724 1060 N PASQUA STREET 5 2014 3,000,022 147,300 4.91
10040680 3115 E QUANCE STREET 5 2013 5,204,890 249,400 4.79
10070076 3010 E QUANCE STREET 5 2013 4,066,125 257,500 6.33
10040664 2550 E QUANCE STREET 10 2012 6,618,446 433,800 6.55
10040665 635 UNIVERSITY PARK DRIVE 10 2012 5,844,304 303,300 5.19
10038333 1614 14TH AVENUE 5 2011 162,875 12,100 7.43
10013760 260 N WINNIPEG STREET 10 2011 643,058 27,500 4.28
10034466 1501 PARK STREET 2 2012 615,524 51,400 8.35
10032551 1835 ALBERT STREET 8 2012 634,061 24,900 3.93
10025988 3040 5TH AVENUE 10 2013 390,001 27,100 6.95
10065798 631 COLLEGE AVENUE 10 2012 363,744 22,200 6.1
10033736 1761 WALLACE STREET 1 2011 584,706 30,200 5.16
10087841 1834 SCARTH STREET 4 2014 650,005 42,400 6.52
10033664 348 VICTORIA AVENUE 9 2014 415,003 24,700 5.95
10101037 1711 E DEWDNEY AVENUE 4 2013 6,073,330 529,100 8.71
10001938 6380 ROCHDALE BOULEVARD 3 2012 1,522,068 97,700 6.42
10001788 1051 N ARNASON STREET 2 2013 1,457,455 72,700 4.99
10059843 4006 DEWDNEY AVENUE 8 2011 1,077,943 48,300 4.48
10121930 6135 ROCHDALE BOULEVARD 8 2012 853,100 43,400 5.09
10223794 3501 PASQUA STREET 10 2012 738,767 42,000 5.69
10223793 3515 PASQUA STREET 9 2012 740,051 41,400 5.59
10027147 1207 ALBERT STREET 7 2011 418,643 36,900 8.81
10032978 1355 11TH AVENUE 6 2012 765,921 37,900 4.95
10034196 1651 PARK STREET 3 2013 1,026,734 73,100 7.12
10001936 6320 ROCHDALE BOULEVARD 9 2013 1,050,008 103,900 9.9
10032014 1954 ANGUS STREET 11 2013 655,005 51,900 7.92
10037922 2201 BROAD STREET 6 2013 1,860,069 74,200 3.99
10121926 6155 ROCHDALE BOULEVARD 11 2011 2,607,849 127,200 4.88
10040670 2810 E QUANCE STREET 5 2013 8,966,996 529,500 5.9
10002028 5934 ROCHDALE BOULEVARD 6 2011 4,366,845 267,100 6.12
10022099 681 ALBERT STREET 12 2014 1,700,013 84,500 4.97
10108280 1851 SCARTH STREET 5 2012 416,956 24,400 5.85
10275747 108 2300 BROAD STREET 8 2014 727,625 47,300 6.5
10275745 106 2300 BROAD STREET 9 2014 333,327 21,700 6.51
10037887 2330 15TH AVENUE 1 2012 1,431,279 74,000 5.17
10037556 2151 ALBERT STREET 8 2012 830,043 34,400 4.14
10275744 105 2300 BROAD STREET 9 2014 236,512 16,300 6.89
10037874 2230 LORNE STREET 9 2014 1,100,008 72,600 6.6
10275743 104 2300 BROAD STREET 8 2014 106,196 8,000 7.53
10037571 2072 MCINTYRE STREET 3 2011 788,654 61,400 7.79
10120678 2505 11TH AVENUE 6 2011 4,769,939 274,400 5.75
10037732 2241 ALBERT STREET 8 2013 773,421 54,100 6.99
10037676 2075 HAMILTON STREET 10 2013 1,500,011 65,800 4.39
10064992 1825 SCARTH STREET 4 2012 933,415 80,000 8.57
10233275 4561 PARLIAMENT AVENUE 5 2013 15,984,508 874,600 5.47
10154683 2223 E VICTORIA AVENUE 3 2011 68,035,249 3,780,100 5.56
10012831 353 N ALBERT STREET 7 2013 62,349,845 4,697,300 7.53
10108298 2102 11TH AVENUE 2 2013 235,656,404 10,359,900 4.4

 

The reconciliation process for developing the economic capitalization rate and adjustments to the rate primarily involved Multiple Regression Analysis, which was supported by a consultation process with individuals active in the Regina real estate market.  Recognized published capitalization rate data were also reviewed.  The economic capitalization rate and adjustments are as follows:

Base Cap Rate

6.455

Adjustments to Cap Rate:

Site Coverage < 30%, per Percentage, to 8%

-.084 

 

Other Adjustments

Extra Land

Extra Land is the difference between a property’s actual parcel size, and the maximum parcel size that would be required to accommodate the existing improvement.

Site coverage in the Commercial model ranges from 8% to 95%.  The median site coverage is 43%.  When site coverage is less than the 30%, the Capitalization Rate for the building is adjusted according to the results of the regressed Capitalization Rate model, to a minimum of 8% site coverage.

When the site coverage ratio is less than 8%, then:

Extra Land Value = (Lot Size-(building foot print / .08))/Lot Size*Land Assessment

 

MODEL TESTING

In mass appraisal, the most effective means of evaluating the accuracy of appraisals is a ratio study.  A ratio study compares the appraised values produced by the valuation models to arm’s length sale transactions in the marketplace.

The legislated statistical requirement affecting the assessment of commercial properties in Saskatchewan is for the median ratio of a city-wide assessment-to-sale ratio study to be within the range of 0.95 to 1.05.

The median assessment-to-sale ratio and Coefficient of Dispersion for this Commercial model is provided below:

Number of Sales

91

Median Assessment to Sale Price Ratio (ASR)

0.982

Coefficient of Dispersion (COD)

18.9%