Wernick Omura has extensive experience in the appraisal of Commercial Real Estate.
A commercial real estate appraisal report is an independent, unbiased, third party opinion of an estimate of Market Value of your property by a Professionally Accredited Appraiser.
WHAT CAN YOU USE A COMMERCIAL REAL ESTATE APPRAISAL FOR?
- Financing (lending)
- Sale of Property
- Asset Valuation
- Taxation Purposes (Capital Gains in Sale)
- Legal Disputes
- Expert Witnesses in Court of Law
- 25 years Commercial Real Estate Appraisal Experience
WHO WE WORK FOR
- Commercial Property Owners
- Private and Public Institutions
- RETAIL Real Estate Appraisal
- INDUSTRIAL Real Estate Appraisal
- OFFICE Real Estate Appraisal
- DEVELOPMENT LANDS Real Estate Appraisal
- HOTEL Real Estate Appraisal
TYPES OF COMMERCIAL VALUATION AND ADVISORY WE HAVE COMPLETED
- Improved Properties/Vacant Land Properties
- Hotel, Motels, Resorts, Timeshares
- High Rise & Low Rise Office Buildings
- Commercial Mixed Use Properties
- Owner User Operations
- Mixed Office/Industrial Warehouse Facilities
- Regional Shopping Centers
- Power Centers
- Community Strip Centers
- Value in Use & Going Concern Appraisals
- Leased Fee, Leasehold, and Fee Simple Valuations
- Feasibility Studies
- Highest and Best Use Analysis
While estimating the value of a commercial property, real estate appraisal firms take note of its unique characteristics, including its location, occupancy type, type of tenancies, proximity to commuting channels like highways, railway stations and airports, and similar issues. We also consider the age/condition of the building, and review structural and aesthetic elements from exterior observation only. These inspections include the roof, mechanical equipment, quality of interior development, and whether the building has undergone any renovation.
We complete a full due diligence on your Income properties, including:
- Market Rent Review
- Operating Expense Review
- Lease Review
- Cash Flow Projections
- Sensitivity Analysis (ratios for investment feasibility and rates of return)
- Capitalization Rate/Yield Rate Analysis
- Overall Feasibility Study
Following are the three methods used in commercial real estate appraisal.
The valuation process is the orderly program in which the data used to estimate the value of the subject property are acquired, classified, analyzed, and presented. The first step in the process is to define the appraisal problem, i.e., identify the real estate, the effective date of the value estimate, the property rights being appraised, and the type of value sought. Once this has been accomplished, the appraiser collects and analyses the factors that affect the Market Value of the subject property. These factors are addressed in the area and neighbourhood analysis, the site and improvement analysis, and the highest and best use analysis, and in the application of the three approaches to value, the Cost Approach, the Income Capitalization Approach and the Direct Comparison Approach.
In the Cost Approach, accrued depreciation is deducted from the cost new of the improvements and this figure is added to the land value to indicate the value of the whole property. Generally, land value is obtained through direct Comparison. The replacement cost new of the improvements is estimated based on current prices for component parts of the building less depreciation, which is computed by analyzing the disadvantages or deficiencies of the existing building as compared to a new building. This approach is most reliable when the improvements are new or nearly new and represent the highest and best use of the site.
The Income Capitalization Approach is predicated on the assumption that a definite relationship exists between the amount of income a property can earn and its value. In other words, value is created by the expectation of benefits to be derived in the future. In this approach, the net income of the property generated before payment of any debt service is converted into value; either through direct capitalization in which net income is divided by a capitalization rate or by the process of a discounted cash flow analysis where the future income stream is converted into present value.
The Direct Comparison Approach is used to estimate the value of the land as though vacant and/or the property as improved. The appraiser gathers data on sales of comparable properties and analyses the nature and conditions of each sale, making logical adjustments for dissimilar characteristics. Typically, a common unit of comparison is found. For land value, the unit of comparison is usually price per square foot or price per acre; for improved properties, it may be price per square foot, price per unit, or a gross income multiplier. The Direct Comparison Approach produces a good indication of value when sales of similar properties are available.
The final step in the valuation process is the reconciliation of the value indicators and the final estimate of value.