FOR OWNERS · FREE BROKER OPINION OF VALUE

Find out what my commercial property is worth.

A lot of owners think they know what their property is worth based on what they paid for it and what they have spent improving it. Unfortunately, that is not always the case. Value comes from two things: what similar properties have sold for, and the income your property produces.

Get my free opinion of value

How value is figured

HOW VALUE IS FIGURED

Two approaches decide what your property is worth

Appraisers and commercial brokers look at the same two things buyers and lenders look at.

1 · SALES COMPARISON APPROACH

What similar properties have sold for

We analyze the comparable sales in your area. A true comparable is a property like yours, not just a property near yours.

Property type matters. Retail, office, industrial and flex buildings sell for different prices, even on the same street.
Across the street is not always a match. A building that sold nearby may be a different type, size or condition, so its price may not be what you can get.
Location matters, but it is not the only test. When there are not enough good comparables nearby, appraisers and brokers look outside the area to find properties that truly match.

2 · INCOME APPROACH

What your property earns

If your property produces income, we also value it based on that income.

Start with net operating income (NOI). That is rent and other income, minus operating costs like taxes, insurance and maintenance. Mortgage payments are not included.
Apply the right cap rate. The cap rate reflects your property type and your area. Different types and locations carry different cap rates.
Do the math. NOI ÷ cap rate = value from income.

PUTTING IT TOGETHER

One opinion of value, built from both approaches

Kas looks at what the sales comparison approach and the income approach each say about your property, then forms an opinion of what it could be worth in today’s market.

What you paid and what you have put into the property still matter to you. Buyers, though, pay based on today’s comparable sales and today’s income.

What can move the number

Property type and zoning
Size, age and condition
Location, traffic and visibility
Parking and access
Rents, lease terms and tenant quality, for income properties

A broker opinion of value is not an appraisal. If you need a value for a loan, an estate or a tax matter, you may need a licensed appraiser.

EXAMPLE: INCOME APPROACH

$100,000 net operating income ÷ 8% cap rate

$1,250,000

value based on income

WHY THE CAP RATE MATTERS

Same $100,000 NOI ÷ 9% cap rate

$1,111,111

One point of cap rate moves the value by about $139,000. That is why the cap rate has to fit your property type and area.