Estimating the Value of Commercial Real Estate

There are 3 principal ways to estimate the value of Commercial Real Estate:

1. Comparable Sales - Looking at similar properties that have recently sold in the vicinity of the subject property can provide valuable insight on the price per square foot value. This method should not be used without consideration to the income method since 2 identical buildings on the same street, one fully rented and the other vacant will have completely different values.
2. Income Method - The Net Operating Income (gross income - expenses) divided by the expect CAP rate will provide a value that is critical for investors and lenders.
3. Replacement Method - An estimate of the cost of rebuilding the same property on the parcel.

Prior to making an offer, a buyer may want to hire an agent to do a BPO or BOV (Broker Price Opinion or Broker Opinion of Value) to get a sense of what the property is worth. This is  a less expensive alternative to a Commerical Appraisal. 

Call/Text me with questions. 

John Akhavan
703 522 6444 (call/text/whasapp)
john@johnakhavan.com