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Mixed Use

IDENTIFICATION of MODEL AREA

The Mixed Use model is an income model that values all mixed use income-producing properties.  Generally described, these properties combine either commercial or industrial space, with residential dwelling units.

The Mixed Use model is a city-wide model in application.  There are a number of distinct 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 Avenue (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 Avenue 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 and Glencairn shopping areas, 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, with the majority of buildings constructed in  the early 1900s and 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

Mixed Use Model – Commercial Rent

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

Effective Date of Valuation – January 1, 2015

Date of Report – June 9, 2016

Rent Model

 

Mixed Use Residential Apartments/Suites 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%

Vacancy (residential component)

Study 2630, 2640, 2650         = 6.9%

Other Areas                             = 5.1%

Shortfall = 1.35%

 

Overall Capitalization Rates

Base Cap Rate

6.921

Adjustments to Cap Rate:

Age, Older than 60 years

1.937

Suite Count, > 1, Per Suite

.336

 

Assessment to Sales Summary Results

 

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)  

Commercial Rent Statistics (mixed use residential 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. 

 

Mixed Use Capitalization Model

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

6.921

Adjustments to Cap Rate:

 

Property constructed pre-1960

1.937

Suite Count, Multiple Residences

.336

 

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: