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I. PROBLEM ASSIGNMENT 
         The content of an appraisal report is determined by the nature of
the decision for which it will serve as a point of reference and by the 
limiting assumptions inherent in the property, data base, or other factors
in the decision context. This appraisal is made to assist the owner in 
the sale of tHe subject property in terms of both listing price and the 
transaction zone in which he can expect to negotiate the sales price. 
A. TheAppraisal Issue 
        The real estate market property on the Capitol Square has been 
soft in recent years, but the market is becoming firmer as the State 
Street/Capitol Concourse project is nearing completion. Poor sales for 
retail goods and a lack of profit are the reasons given by the last ten-
ants for leaving the subject property. The King Shoe Store, which had oc-
cupied 21 East Main Street since January, 1972, went on a month-to-month
lease in January, 1977 and moved in May, 1977. Dartmouth Direct, a men's
clothing store at 17 East Main Street, had a ten-year lease until 1983 
with a cancellation option available at the end of 1977, but the owners 
of the business chose to pay $16,992 for a lease buy-out in July, 1977. 
The owner of the subject property, a large insurance company, has a 
strong bargaining posture; the cash holding costs are minimal for this 
company (Exhibit 1), because it has a 100% equity investment in the pro-
perty. The lease buy-out of $16,992, compounded at 5¼% will pay holding
costs for at least 1 3/4 years. The preferred disposition would be a 
sale because the subject property is too small for the company's manage-
ment portfolio and because of the uncertain future of the Square. The 
owner has listed the property as a rental; the asking rental is $34,155 
for the first floor of 17 East Main Street and $15,300 for the first floor
of 21 East Main Street or approximately $6/sq. ft. The tenant pays utili-
ties and maintenance plus any escalation of taxes. Thus, with a changing
real estate market, the owner can seek alternative solutions and maintain
a strong bargaining position. 
                                  EXHIBIT 1 
           ESTIMATED ONE-YEAR HOLDING COSTS FOR SUBJECT PROPERTY 
        Cost                                          Amount 
Insurance                                            $ 600a 
Ilea ting                                            1,200 
Real estate tax                                      8,206c 
Right-of-way for alley access                          250 
                                                  $ I0,250d~ 
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