Commercial, Office, Industrial, and Specialty Appraisals

Sep 13, 2012 Comments Off on Commercial, Office, Industrial, and Specialty Appraisals by

Commercial Appraisal is the term usually given to describe retail, office, industrial and other miscellaneous property value estimation.  Using a variety of tools of analysis, a commercial appraiser can estimate the value of almost any type of real estate.

Retail real estate is the general term for a wide variety of properties including shopping centers, stand-alone stores, restaurants, gas stations, storefronts and mixed-use retail-residential.  Office real estate generally includes single and multi-tenant office buildings, medical offices, public and institutional buildings.  Industrial real estate includes warehouses, manufacturing buildings and contractor’s yards.  Miscellaneous property types include churches, mobile home parks, motels, auto repair shops and vacant land.

Most of these property types are analyzed and compared to other properties on the basis of the price per square foot of net rentable building area with the Sales Comparison Approach.  The Sales Comparison Approach incorporates the actions of buyers and sellers in the marketplace.  The Income Capitalization Approach uses market supported actual rental rates, vacancy allowance, operating expenses, and overall rates in order to estimate a value for the subject property.  The value indication by the Income Capitalization Approach is usually given weight in a reconciled market value as it reflects the thinking process of an investor.  The Cost Approach considers the current cost of reproducing a property, less accrued depreciation in the property.  A summation of the market value of the land assumed vacant and the depreciated reproduction cost new of the improvements provides an indication of the total value of the property.  This approach is typically used for specialty properties such as churches or other unique properties that are difficult to otherwise compare or estimate income.

We have appraised all of the noted properties in most areas of Southern California.  Familiarity with the location of the property is important because of differences in variables such a neighborhood popularity, traffic patterns and household income levels.  Additionally, it is important to study market data for the subject, such as vacancy rates, average rental rates, construction trends and sales trends to provide further background on the area.



About the author

Charles (Chuck) Segelhorst, chief appraiser, has 20 years of real estate appraisal experience. He is a certified general real estate appraiser, the highest level of California State appraisal licensing. Mr. Segelhorst received a master’s degree in business administration from American Graduate School of International Management (Thunderbird), Glendale Arizona and a bachelor’s degree in economics, cum laude, from California State University, Long Beach. In addition, he has completed appraisal course-work through the Appraisal Institute. Specialized classes that he has completed include: Income Capitalization, High Value Residence Appraisal, Valuation of Detrimental Conditions, Appraisal Procedures, Appraisal Applications, Econometrics and Financial Statement Analysis. He has testified in Municipal and Superior Courts as an expert witness.
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