Example 1 - Heritage commercial building:
Investors and tenants usually see heritage buildings as different from modern commercial properties.
Probably, a heritage commercial building should be compared to other heritage commercial properties as they would likely compete for similar tenants.
Example 2 - Number of stories:
You have a 3-storey office building. Small office buildings in your municipality typically have between 2 and 5 stories.
It may be hard to show that investors see different height buildings as being in different “competitive sets”. Rather, factors, such as age, tenant improvements, amenities, and leasable area are more important. These factors affect how easy it is to find tenants and how much rent you can charge.
In this case, it is more appropriate to compare your assessment with all other small office buildings in your municipality. The Board would likely not agree to restrict equity comparisons to just 3-storey buildings.
As a general rule:
The Board prefers a larger group of comparables unless there is a clear reason to look at a smaller group.