Can the bulk value of a business park be apportioned on a pro rata basis to derive a value for one or all of its individual buildings?
The “bulk value” is the appropriate market value when appraising a portfolio of properties, for example, all of the buildings in a business park. Apportioning a value on a pro rata basis to a single building within that park based only on the bulk value will almost always understate the lone building’s individual market value (known as its “retail value”), since there is an economies-of-scale discount built into the value of the bulk that would not be contained in the value of the single component building. In this case, the sum is worth less than the piecemeal value of its parts if they are considered individually. Conversely, the sum of the individual retail values in a portfolio of properties, if simply added up, will almost always overstate the true value of the bulk. Here the value of the discrete parts is more than the value of the whole.
