PROPERTY APPRAISAL

The value of your property, or that to be acquired, will be determined based on a number of factors.

All realty is unique, given location, size, zoning, and of course the type, age, condition and usage of the structural improvements. These elements along with conformity, stage of equilibrium, income, and legal controls are considered in establishing commercial realty value. The back of our business card indicates performance of appraisal valuations since 1980 and commercial only appraisal since 1991 – with a specialty in odd-ball realty –count on experience.

Initially we will discuss with you the property type, purpose, and scope of the assignment you have in mind to ascertain the extent of research required to avail ourselves of the pertinent documentation for analysis to support an understanding of, and to determine the appropriate valuation of you realty.

Market Approach to Value

Most properties are unique but have a functionality that is not significantly different from some others. In those situations comparisons of the significant variables are identified and adjustments made to comparables’ known transfer price and the costs of acquiring an equally desirable substitute property are quantified and value determined (the Principle of Substitution). Prudency requires pricing of a reasonably close alternative (use,income, or design) and paying no more.

Income Approach to Value

Investors are concerned with the return of and on their investment. Anticipated future benefits to be derived from the property in terms of cash flow are ascertained (rents, expenses, costs). Market levels of supply and demand are studied and expected rates of return are developed into a capitalization rate. The cash flows are then factored into value by the capitalization rate.

Cost Approach

Buyers normally have at least two primary methodologies to acquire the functionality of realty. Purchase of land and then development of structure(s) to provide amenities for their purpose or purchase of existing land and structure at some level of obsolescence. Most buyers do not have the requisite construction skills or time and therefore acquire existing improved realty. But if the costs are significantly less to build and improved function can be developed they will build. In some cases such as fire or other calamity, rebuilding becomes a necessity. In those situations one must know the elements and costs required to replace or construct the utility desired. Market value considers the condition of the element of value, thus obsolescence and depreciation are factors to be taken into consideration. Most valuation situations find the subjectivity of obsolescence and depreciation highly subject to challenge. Therefore, we utilize Marshall & Swift as a source of construction costs and their average depreciation factors as a base for the development of our final cost method quantifications.

Our Services

Although we specialize in commercial and estate appraisals, we offer a number of services including apartment building appraisals, business valuation and litigation support.