What does the "4-3-2-1 Rule" describe in commercial property appraisal?

The "4-3-2-1 Rule" in commercial property appraisal is used to establish the value of a lot based on its depth relative to its front footage. This rule is particularly helpful in determining how much value is assigned to different sections of the lot as the distance from the street increases.

According to this rule, the front footage (the first 40 feet of the lot depth) is assigned the highest value, often considered as the '4' in the rule. The next section, which is typically the next 40 feet in depth, is valued less, represented by '3'. The subsequent section continues to decrease in value; thus, the next lot depth section is valued at '2', and the furthest section is assigned the lowest value, represented by '1'. This descending scale helps appraisers account for factors such as visibility and accessibility, which tend to diminish in importance the further back a property is from the main thoroughfare.

Utilizing the "4-3-2-1 Rule" allows commercial appraisers to derive a more nuanced and equitable valuation for lots, reflecting their practical use and desirability in the market. This method emphasizes how location and depth can significantly impact property value, particularly in commercial settings where visibility can