Valuing Non-operating/vacant or Negative Cash-flowing Property

How would you go about doing this? Can't use income approach. If using comp sales approach would you look for properties not only of the same type but in the same state? - which may be a tough bet. Seems replacement approach would be the way to go?

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My firm purchased a vacant building within the last 6 months. Can't value using a Cap rate but still able to look at the deal from a DCF/IRR basis in addition to $PSF compared to both comp sales and replacement costs.

Essentially, if your projections will still allow you to gain an attractive return the deal is worth doing.

 
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