OverviewUse the Building Data screen to enter or select the following for each section of the estimate: Physical and Functional Depreciation |
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The section title prints at the top of each section in the report to identify the section. Segregated Estimator automatically sets the section titles to "Section 1," "Section 2," etc. You can optionally change the Section Title to better identify section by typing a different section title in this field.
Example: If Section 1 is the original portion of the building and Section 2 is an addition built in 1995, you could change the section titles as follows:
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Section 1 |
Original Building |
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Section 2 |
1995 Addition |
The occupancy is the use of the building (office, bank, etc.) as it was originally designed. Since buildings vary in cost depending upon how they are designed and used, the occupancy influences the costs used in the report.
To change the occupancy, click the Change Occupancy button to display the Occupancy Search screen. Use this screen to select a new occupancy, or to display a description of any available occupancy.
If there is more than one occupancy in a building, use a multi-section report, entering each occupancy as a separate section.
Base your occupancy selection on the design of the building, which is not necessarily the current use of the building.
Example: Suppose a large residential dwelling has been converted into a restaurant, and little, if any, interior or exterior renovations have been made to the building itself. The most accurate cost is obtained by doing the following:
Select the single-family residence occupancy:
Change the occupancy name in this Occupancy field to "Restaurant":
Use components or additions to make any cost modifications necessary to adjust the cost of the original design to conform with the current use.
If you encounter a building with an occupancy not available in Segregated Estimator, you can value it as follows:
Select an occupancy for a building with similar design characteristics.
Change the occupancy name in this Occupancy field to fit the type of structure being valued.
Use components or additions to make any cost modifications necessary to adjust the cost of the original design to conform with the current use.
Select the Construction Class for the occupancy. The standard Marshall & Swift Construction Classes are:
D Wood or Steel Stud Framed Exterior Walls
Note: All classes are not available for all occupancies. Once you have selected an occupancy, only the classes available for that occupancy display. Also, if after selecting a class you change the occupancy to an occupancy for which the class is not available, Segregated Estimator automatically changes the class to the first available one for the new occupancy.
The total floor area of a section is the total area on all floors based on the building's exterior dimensions. When calculating total floor area, do not include any of the following: Basements, mezzanines, balconies, unfinished attics, exterior porches, decks, patios or garages.
When entering total floor area, do not include commas. Total area is required—you must enter it in each section of the estimate.
Enter the total number of floors above ground in the building. When calculating the number of stories, do not include any basement or mezzanine floors.
For a multistory building, Segregated Estimator uses the number of stories to adjust the costs for high-rise construction (by taking into consideration the additional framing required in multi-level buildings as well as the cost of raising material and labor to the upper floors).
In a multistory building that you section horizontally (i.e., you put some of the floors in one section and the other floors in another section), you must enter the total number of floors above ground in the building for each section.
Example: If Section 1 of a building has 2 floors and Section 2 has 8 floors, enter 10 stories in both Section 1 and Section 2.
Average Story Height is the vertical distance from the top of one floor to the top of the next floor. In a one-story building, measure story height from the floor surface to the roof eave. Do not include parapets (extensions of the wall above the roof line) in story height.
If the story heights vary in a multistory building, compute the average story height by dividing the total building height by the number of stories.
Example: If the first floor of a three-story building is 18 feet high and each of the other two floors are 10 feet high, compute the average story height by adding up the heights for each floor and dividing by the number of stories:
18 + 10 + 10 divided by 3 = 12.67
Enter 12.67 for the story height.
For a building with a very high pitched roof, (e.g., A-frame):
Compute the cubic area (length x width x height) of the lower building portion, excluding A-frame roof section.
Compute the cubic area of the A-frame roof section by multiplying the length x width x height and divide by 2.
Add both sections of the building together and divide total by square foot area (excluding mezzanines) to determine building height.
For unfinished attics, include half of the increased height of the attic area when computing average story height.
Example: A two-story building with a height of 10 feet on each of the two floors and an unfinished 8-foot-high attic has an effective height of 24 feet, computed as follows:
10 + 10 + 1/2 of 8 = 24
The average story height entered for this building is 12 feet (the 24-foot effective height divided by the 2 floors).
Segregated Estimator requires a story height for the calculations.
Select the overall quality of the building, which determines the cost level in the report, from the following choices:
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.5 |
Lowest |
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1 |
Low |
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1.5 |
Fair |
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2 |
Average |
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2.5 |
Above Average |
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3 |
Good |
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3.5 |
Very Good |
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4 |
Excellent |
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4.5 |
High |
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5 |
Highest |
Segregated Estimator automatically uses this overall quality for all components in building Construction Systems. You can specify an individual quality for any component you enter.
You should examine both materials and workmanship when determining the overall quality. The quality of materials and workmanship of individual building components may vary. However, the overall quality tends to be consistent for the entire building. Furthermore, the quality of materials and workmanship tend to influence each other.
Workmanship is often superficial, allowing you to easily observe its quality. The following are all indicators of better quality workmanship:
Solid and level floor structures
Plumb walls
Smooth finish on concrete and plastered surfaces
Mitered joints in both exterior and interior woodwork
Proper fitting doors and windows
As with workmanship, the quality of materials is usually apparent during the inspection of the building. Grade of wood, floor cover and fixtures (either standard or custom) are primary indications of material quality.
Since quality determines the cost level used in the report, you should exercise extreme care in choosing it. Refer to Sections 11-18 of the Marshall Valuation Service or Commercial Cost Explorer for pictures to aid in the quality selection. Also refer to the help for individual occupancies for a quality selection guide for each construction class available in the occupancy. This guide lists the type of exterior walls, interior finish, mechanicals and heating/cooling typically found for each common quality level for the construction class.
Example: The following is the quality selection guide for a Class A (Fireproof Steel Frame) Office Building:
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Quality |
Exterior Walls |
Interior Finish |
Mechanicals |
HVAC |
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Low |
Minimum-cost walls and fenestration, little trim |
Drywall, acoustic ceilings, asphalt tile, few partitions |
Minimum office lighting & plumbing |
Warm and cool air (zoned) |
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Average |
Brick, concrete or metal and glass panels, little trim |
Average partitions, acoustic tile, vinyl composition, some extras |
Average intensity fluorescent lighting, average restrooms |
Warm and cool air (zoned) |
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Good |
Good metal and solar glass, face brick, precast concrete panels |
Drywall or plaster, some wall cover, acoustic tile, vinyl tile, carpet |
Good fluorescent, high intensity lighting, good restrooms |
Hot and chilled water (zoned) |
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Excellent |
Best metal or stone, brick or block backup, solar glass |
Plaster, best veneers, vinyl wall coverings, vinyl, terrazzo, carpet |
Luminous ceilings, many outlets, many private restrooms |
Hot and chilled water (zoned) |
Select one of the following conditions:
Worn Out
Badly Worn
Average
Good
Very Good
Excellent
Condition does not affect the cost calculations, but does print at the top of the report.
The effective age of a building is its age in years as compared with other buildings performing like functions. It is the actual age less any years that have been taken off by face-lifting, structural reconstruction, removal of functional inadequacies, etc.
Use the following steps to determine the effective age of a building:
Typical Life: Determine the building's typical life, based on its occupancy and quality, using the "Typical Lives" table contained in the occupancy's help.
Remaining Useful Life: Estimate the building's remaining useful life, based on an evaluation its condition, construction quality, actual age and any renovations or repairs that have been made.
Effective Age: Subtract the remaining useful life from the typical building life to obtain the effective age.
Example: For a good quality, Class C office building built 30 years ago, the following renovations and repairs have been completed:
The electrical system was replaced 10 years ago.
The heating plant was replaced 4 years ago.
The roof was repaired 8 years ago.
The interior was completely renovated 10 years ago, with new floor covering, wall finish and plumbing fixtures.
Based on the office building's current condition and a subjective evaluation of the effect of these changes, you estimate that the remaining useful life is now 45 years. The Typical Lives table in the help for occupancy 344 (Office Building) is:
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Class |
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Quality |
A |
B |
C |
D |
S |
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Low |
50 |
50 |
45 |
40 |
40 |
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Average |
55 |
55 |
50 |
45 |
45 |
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Good |
60 |
60 |
55 |
50 |
50 |
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Excellent |
60 |
60 |
55 |
50 |
50 |
From this table, the typical life is 55 years. Therefore, the effective age is:
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Typical Building Life |
55 years |
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Minus: Remaining Useful Life |
-45 years |
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Effective Age |
10 years |
The entry of Effective Age is optional, except if you select either of the following options for calculating Physical and Functional Depreciation:
Using Marshall & Swift Tables: With this option, Segregated Estimator calculates the amount of normal physical and functional depreciation using the depreciation schedule in the Marshall Valuation Service, based on the occupancy, construction class and quality in addition to effective age.
Age/Life (Straight Line): With this option, Segregated Estimator calculates the amount of physical and functional depreciation by dividing the Effective Age by the Typical Life.
The typical life of a building is its expected life, based on its occupancy, class and rank (quality). You can set typical life by entering a value in this field. if you do not enter a value, Segregated Estimator automatically sets the Typical Life using the tables in Section 97 of the Marshall Valuation Service, based on the occupancy, class and rank.
Segregated Estimator uses typical life to calculate the section’s combined physical and functional depreciation percentage if you use either of the following methods:
Marshall & Swift Tables: With this method, Segregated Estimator uses the Typical life, together with the Effective Age, to calculate the amount of normal physical and functional depreciation using the depreciation table in Section 97 of the Marshall Valuation Service.
Age/Life (Straight Line): With this method, Segregated Estimator calculates the depreciation percentage as the Effective Age divided by the Typical Life.
Segregated Estimator has the following methods for computing the section's physical and functional depreciation:
Combined Physical & Functional Depreciation
Separate Physical & Functional Depreciation
Each of these methods is described below. The section's physical and functional depreciation is applied to all components in Construction Systems that are included in Replacement Cost New, except those components that you depreciate individually.
With this option, Segregated Estimator calculates the combined physical and functional depreciation percentage using the tables in the Marshall Valuation Service and Commercial Cost Explorer. This calculation is based on the Occupancy, Construction Class, Quality, Effective Age and Typical Life. This calculation does not include either of the following:
Abnormal or Excessive Functional Depreciation, which you can add using the Additional Functional Depreciation field.
External Obsolescence, which you can add using the External Depreciation field.
This is the combined percentage for normal physical and functional depreciation to be subtracted from the replacement cost new when computing the depreciated cost. This prints in the report as a single line, “Physical and Functional Depreciation.”
Example: If you enter 12.5% for combined physical and functional depreciation, the report includes the following:
Units Cost Total
Replacement Cost New 20,000 68.53 1,370,600
Less Depreciation
Physical & Functional 12.5% 171,325
Depreciated Cost 20,000 59.96 1,199,275
These fields set separate values for physical and functional depreciation, which are printed as separate lines in the report.
Example: If you enter 12% for physical depreciation and 7.5% for functional depreciation, the report includes the following:
Units Cost Total
Replacement Cost New 20,000 68.53 1,370,600
Less Depreciation
Physical 12.0% 164,472
Functional 7.5% 102,795
Depreciated Cost 20,000 55.17 1,103,333
Note: If you set separate Physical and Functional Depreciation percentages, the physical percentage is applied These fields set separate values for physical and functional depreciation, which are printed as separate lines in the report.
Select this method to set the combined Physical and Functional Depreciation Percentage using Age/Life of Straight Line depreciation. With this method, the percentage is calculated as the Effective Age divided by the Typical Life.
Example: If the Effective Age is 15 years and the Typical Life 60 years, the calculated depreciation percentage is 25%.
Functional depreciation (or technical obsolescence) is the loss in value due to lack of utility or desirability of part or all of the property, inherent to the improvement or equipment. Thus, a new structure may suffer obsolescence when built.
Enter the percentage for additional functional depreciation. Use this field if you set a combined Physical and Functional Depreciation Percentage (by entering a percentage directly, or using the Marshall & Swift or Age/Life methods) and need to add some additional functional depreciation).
Enter the percentage the external depreciation only to be subtracted from the replacement cost new when computing depreciated costs.
Example: If you enter 12.5% for external depreciation, the report contains the following:
Units Cost Total
Replacement Cost New 20,000 68.53 1,370,600
Less Depreciation
External 12.5% 171,325
Depreciated Cost 20,000 59.96 1,199,275
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