Your commercial real estate property will vary in value over time and through various market conditions. We understand you require a well-supported value for your property, whether you are looking to refinance, sell or lease your property. With any of these goals, the course of action may be time sensitive.
Decker Associates has decades of experience in providing market value appraisals to our Colorado commercial real estate clients. Our market value appraisals (also referred to as Fair Market Value or simply an appraisal) balance the time sensitivity of the commercial real estate market and your budget. Our commitment is to providing you with the most accurate and objective appraisal to help you reach your goals with your property.
Our dedicated team approach allows us to eliminate inefficient steps of transferring information between departments. Our appraisal team stays completely focused on your project, so we complete your appraisal faster, and touch on all of the details that are essential to providing objectively accurate market value appraisal reports.
We begin the process by defining the scope of the market value appraisal, an outline of what we're trying to accomplish for you. The scope is not only essential for the work, but it is required as part of our own ethics, and by law. The scope explains which user interest in the property we're examining, whether it is from the landlord's perspective, the owner, owner/user or even the lessee's perspective.
Following the scope, we define which interest to be appraised. Either Fee Simple, Leased Fee or Leasehold interest.
The approach to reaching a market value is then determined before we move into the research, and ultimately the work of appraising your commercial property. The approaches we utilize are:
- Cost Approach - which looks at the cost to build a commercial property along with the value of the land
- The Sales Comparison Approach - which looks at comparable sales within your geographic area
- Income Approach - given multiple factors, what your commercial real estate property can generate in terms of income
We may utilize all or one of these approaches, depending on what the project requires. The Highest and Best Use Analysis drive the inclusion or exclusion of a particular approach, where we look at the subject as a vacant site and as it currently exists. During this analysis we examine many factors such as the type and age of the improvements, the type of owner (investor vs. owner-user) and its current use, location and market environs. The Highest and Best Use Analysis also provides the basis for which approach will carry the most weight in the reconciliation of the values each approach will render.
When conducting research, we start from a macro perspective analyzing the city the property resides within, and move into a micro perspective, from the metro area, to the neighborhood, and finally to the property itself. This research allows us to provide the quality and in-depth reports that you will come to rely on.
When we begin the appraisal process, we need to determine how the report is to be used, which will also lead to suggested types of report, and the type of value that you want to have examined. Typically, we appraise the market value as defined by Uniform Standards of Professional Appraisal Practice (USPAP) and Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA); however, we are experienced with appraising under different definitions of value as well. Once we have the groundwork of the appraisal set, we will inspect the property and gather information about the property. The inspection of the property will involve an exterior and interior inspection of the property and its systems as well as a physical measurement of the property. Other information that we will need to gather about the property comes from public sources such as the local assessor and zoning department, and from you, the client and/or property owner. This information may include items such as ALTA surveys, operating expenses, purchase contracts, rent rolls, and recently completed renovation costs to name a few. Sometimes more extensive information is needed depending on the property's type and use.
Ready to take the next step for your market value appraisal? Contact us here.