Entitlements

Entitlements are generally described as approvals gained from the appropriate governmental jurisdiction to develop a particular use.  In Las Vegas you may have zoning to improve a parcel for a "general commercial" use, but if you want to building something out of the ordinary, you must submit plans and gain additional approvals.  Usually the process entails the submission of architectural plans, renderings, studies and a few professional presentations.  Thus, the process of securing entitlements can be costly and it can take a great deal of time.

Gaining entitlements for the construction of many improvements removes the roadblocks for a developer / builder to proceed with their project.  Appraisers are often approached by owners with the argument that their hard fought entitlements have significantly enhanced land value.  Appraisers, however, understand that few individuals in the market would be interested in the property for the specific use were approved.  Thus, the entitlement "enhancements" would have little or no value to most market participants.

There are entitlements that can enhance value.  Gaining approval for a more intensive zoning, from say C-1 (Office Professional) to C-2 (General Commercial) given there is a demand for the more intensive type, can increase value.  In the same way, gaining approval for a relatively high demand use, like a tavern, can at time increase property value.  As noted, however, even these approvals are not usually in and of themselves enough to increase the value of a property.

When entitlements offer development options that clearly increase the potential return that can be derived from a parcel of land, and the highest and best use of the property is attained due to the entitlements, then they have added value.   

Contact us with your questions or concerns regarding entitlement or regarding your specific appraisal assignment in Nevada at 1-702-568-6699.  We can also be e-mailed at grigdon@cox.net.   

Commercial Real Estate Appraisals in the Las Vegas & Henderson, Nevada Area.