If you invest in real estate, especially if you buy a commercial property on a busy road, you expect that investment to maintain and even improve its value over time. While real estate often trends upward, certain factors can influence the value of your investment.
An expansion intended to add new lanes to the road that your business faces could bring much more traffic your way, but it could also lead to an eminent domain claim against your property. Under Georgia law, eminent domain claims can only arise relating to projects for public use.
While you don’t have to worry about losing your real estate to a developer who wants to put in a hotel, a road expansion could mean losing half of your parcel or most of your parking lot. What will that mean for the value of your investment?
A professional appraisal is crucial
You know what you paid for the property when you bought it, but the longer you have owned your parcel, the more it will have likely changed in value since the purchase. If you have not had an appraisal of your property in the last five years, the results of one might shock you.
To really know what your property is worth, you need a professional skilled at valuation to look at it. By looking at your facilities, your lot and recent sales of comparable properties nearby, an appraiser will give you a realistic fair market value for your commercial property. When you know that an eminent domain claim against your property is likely, you can also have them analyze what that will mean for your property value.
It often isn’t just about the loss of square footage. Inadequate parking or difficulty accessing your buildings because of changes on the road out front could drastically reduce the value of your remaining property. Understanding the financial impact of those potential changes can help you counter the offer made for your property.
Informed owners are more likely to get what they deserve
Eminent domain laws require that property owners receive fair market compensation for their properties fees for public projects. Still, owners could easily fall victim to accepting offers that are below what their property would really command on the open market.
Having accurate information about your property’s worth and the impact that the changes will have on your value can help you negotiate during eminent domain proceedings. Understanding your rights will make it easier for you to respond when the state wants to lay claim to some of your commercial real estate.