Special- purpose property is generally “property with a unique physical design, special construction materials, or a layout that particularly adapts its utility to the use for which it was built. A special-purpose property generally has limited utility and marketability other than for its original use. These properties may include a bowling alley, a marina, or a specialized religious facility. Often these properties are “build to suit,” which generate a very limited set of alternative users. In fact, most of the time a special-purpose property needs significant investment to be converted to an alternative use, making most conversions financially infeasible. To be special purpose, the property itself, not the use, needs to be unique.
Complexity of Special Purpose –
It is customary for an appraiser to perform a sales comparison search to determine if any potential sales comparables are available. A limited or nonexistent set of potential sales comparables gives evidence that the appraiser is dealing with a limited market, and maybe a special-purpose property. A lack of available comparable data adds to the complexity of any assignment
So what’s so special about special-purpose property? A special purpose is property-specific, not zoning specific. Special-purpose property, by definition, implies that the physical design and the potential future users determine it is special. What is so special about a special-purpose property is that any conversion of that property would be financially infeasible or less productive to a market value buyer within the foreseeable future.