Valuing Undeveloped Property Containing SFH

[Charles Molluzzo]

Hi everyone,

After a death, my family will have to sell a property containing a single family home, but the property may be worth more as a commercial property.  The road on which it is located is a major street (3 lanes each way) that has become more and more commercial with each year.  In fact, the properties on either side of the house are commercial - one a house that was converted to a nursery school some years ago, and on the other side, a former gas station that is now major wireless carrier's cell phone store.  The property is zoned both for residential (semi-detached and detached), and for light commercial use (e.g., neighborhood grocery store, medical office, etc.).

While I have not yet conducted the analysis, I know how to value the property if it were sold as a single-family home (comps, though direct comps will be difficult), but I am inexperienced with commercial properties.  How would you begin to analyze the value of the property for a future commercial use?  The future commercial use could be the modification of the house (e.g., use as a doctor's office), or an entirely new structure (a medical building, for example). 

I appreciate any feedback. Thanks.

Best,

Charles