- Cap Rate Crazy?
In today&rsquo s market, investors, lenders with REO assets, and property owners are trying to maintain as much value as possible in commercial investment property sales. Appraisals are the first step in that process. Appraisers determine value either by comparing
- Cap Rate Follies
Capitalization rates are often controversial and misunderstood variables in commercial real estate valuation equations. To value properties, most buyers and sellers prefer an income approach, which analyzes cash flows to determine debt service and investor return — typically the internal
- Questions Auditors Ask
Debt valuation is affected not only by fluctuating market rates, but also by the methods used to perform the valuations. While the volatile rate environment of the financial crisis has dissipated, the heightened scrutiny auditors now apply to the methods
- The Pricing Gap Narrows
The chasm between bid and ask prices that emerged after the commercial real estate market plummeted in 2008 has narrowed significantly, and in some cases, disappeared altogether. “In 2008 and 2009, there was a definitive disconnect in pricing. At the
- Evaluating Appraisals
During most commercial real estate sale transactions, an appraiser is required to value the property and issue a report. However, both experienced and new users of appraisal services often are not aware of the type of report they need and
- Off the Fence
After years of owning and operating a unique entertainment destination on the outskirts of Williamsburg, Va., Jack Barnett faced a tough financial decision sell the 79.6 acre property, which had been owned by his family for nearly 50 years, or
- The Auction Alternative
Each year, auctions are used to sell billions of dollars of commercial real estate. Once thought useful only for disposing of problem and hard to sell properties, auctions are gaining popularity as an effective sales strategy for all types of
- The Affordability Question
Highland Park, Ill., a Chicago suburb where the median home price is $430,000, recently passed a zoning ordinance mandating that 20 percent of new multifamily developments with five or more units must be sold as affordable housing. It's an indication
- Is The Price Right?
A broker's client asks him to evaluate a real estate asset. After looking up the property's assessment records, the broker discovers that it's a one of a kind, special purpose property. He suddenly wishes he had more time to prepare,
- Cap Rate Variations
Commercial real estate professionals live and breathe capitalization rates. Every trade publication, market participant, and third party report relating to real estate quotes cap rates for various markets and properties. But ask a group of real estate professionals to calculate
- The Valuation Trap
Appraisals in today’s market are not for the faint of heart. Comparable sales are scarce, markets are changing quickly, and rules and regulations are stricter than ever. One false step could imperil even the most solid transactions. “Today, there can
- Valuing Retail Properties
Assessments can differ, so understand what considerations go into calculating the value of retail properties.
A store owned and operated by Lowe’s in Georgia was valued
by the local tax assessor at $10.4 million. Not satisfied, Lowe’s counsel hired
its own appraiser, who valued the property at $3.9 mill
- Creating Valuations Amid Uncertainty
In today’s climate, estimating an asset’s current and future worth is tricky but far from impossible.
- Small-Market Valuations
The demand for high quality commercial real estate in primary and many secondary markets has been gaining strength during the past 12 to 18 months. As the availability of good product in primary markets has diminished, some potential buyers are
- Cap Rate Calculations Today
Since the market crash five years ago, CCIMs and other commercial real estate professionals have been asked far too often, “What is it worth?” With a paucity of sales from which to extract investment benchmarks, many of us were limited