In the riverfront scenario, approximately what percentage of the property's value is attributed to location?

• A. 60%
• B. 40%
• C. 20%
• D. 80%

Answer: (B)

In this type of problem, value is often thought of as a split between what the land/location contributes and what the buildings and improvements contribute. A riverfront location adds a strong premium, but the structure and site improvements still carry a substantial portion of value. The typical teaching point is that location accounts for about 40% of the total value, with the remaining 60% coming from the improvements and other factors. So, while the riverfront location greatly boosts value, it doesn’t dominate it, which is why roughly 40% is attributed to location. The other percentages would overstate or understate the location’s share given that balance between land prestige and improvements.