Religious Property Appraisal
Most religious properties have a great deal of sentimental value to their clergy and to their congregations. This is where their friends and family were married, where their children were baptized, where funeral services of those close to them took place, and where they came to contemplate some of the deepest questions of life.
Sentimental value, however, is not market value. Market value rests on the highest and best use of the property which, in the unsentimental world of business, means the use that produces the greatest present value of net income in monetary terms.
Religious properties include temples, synagogues, and mosques, but the most common type of religious property in the United States is Christian churches. These churches, particularly the older ones, are frequently constructed of stone masonry, with bell towers, steeples, stained-glass windows, pews, and an organ. The labor costs of constructing a building of stone masonry are very high relative to other modern types of construction and this type of construction is rare in new buildings.
If a congregation intends to sell the church to an investor and lease it back, or if a congregation that will make use of these elements can be found, these elements might contribute to market value. This type of transaction is more likely to be feasible in more affluent areas with wealthy congregations. In these instances, the church’s seating capacity, classrooms, and parking, and the balance between these, are important considerations.
More often, however, these elements do not contribute to the highest and best use and those that are severable, the stained-glass windows, pews, and organ, are best sold separately. Fortunately, there are active secondary markets for these elements.
Adaptive re-use of a church is relatively common when it changes ownership. Churches have been converted to multi-family residences, offices, senior living facilities, and recreational centers. When one of these uses represents the highest and best use of the facility, the property is appraised by deducting the cost of conversion from the value after the conversion to the alternative use.
Other types of religious uses are usually less specialized than Christian churches, and some evangelical Christian religious facilities have been designed from the start more as theaters than as traditional churches. These properties can be more readily adopted to alternative uses.
An appraisal of a religious facility often requires a bit more creative thinking than appraisals of other types of property.