Property Valuation
In Massachusetts, an appraiser analyzing an investment property with expiring below-market leases would use what approach to capture their impact?
ACost approach only
BDiscounted cash flow analysis that projects lease-by-lease cash flows through term and at reversion✓ Correct
CSales comparison only using leased fee comparables
DThe income approach ignoring lease terms
Explanation
When leases are at below-market rates and approaching expiration, a DCF analysis that projects individual lease cash flows (including the impact of rolling to market at lease expiration) best captures the value impact.
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