Whether you are looking to buy or sell, knowing the economic value of a commercial real estate property is essential. That’s why in our first blog post, we talk about what a commercial real estate evaluation is and show you how to get one for free.
What Is a Commercial Real Estate Valuation?
A commercial real estate valuation is a process that helps you determine the economic value of a property.
When it comes to business, your decisions are only as good as the information you have at your disposal, and commercial real estate is no exception to this rule. Accurate valuations lead to better decisions when buying or selling properties.
There are different approaches when it comes to commercial real estate valuations. Here are some of the most common:
- Cost. With this approach, properties are valued by adding the price of the land the property is located on and the cost of building a similar property from scratch.
- Income capitalization. Here, the value of a property is calculated by dividing the Net Operating Income (NOI) of a property by its capitalization rate. This method is particularly useful to determine the income an investor can expect to generate from a property.
- Market value. This approach is based on data from comparable properties sold recently in the same market area.
- Gross rent multiplier. Also known as GRM, here the value of a property is obtained by multiplying annual gross rents by the Gross Rent Multiplier (GRM) of a similar property. The GRM is equal to the price of a property divided by its annual gross potential rent.
How to Get a Free Commercial Real Estate Valuation
Today more than ever, owners of commercial real estate properties preparing to sell should consider getting their properties valuated as soon as possible.
Valuations are high these days and interest rates are low. However, this is bound to end soon, as interest rates will rise probably in response to high inflation levels.
If you are looking to get a free commercial real estate evaluation in Southern California, the process couldn’t be simpler.
Just get in touch with SoCal CRE Team by using the contact information you’ll find below.
With extensive experience and deep familiarity with the intricacies of the Southern California Real Estate market, we are uniquely positioned to offer accurate, reliable commercial real estate valuations.
Disclaimer: This material is for general information and educational purposes only. It is not guaranteed as to accuracy, does not purport to be complete and is not intended to be used as a primary basis for investment decisions.
About SoCal CRE Team
Our name summarizes our mission. At SoCal CRE Team, we specialize in finding commercial real estate solutions in Southern California for developers, investors, landlords, and tenants.
If you are interested in a free commercial real estate evaluation, or have a commercial real estate inquiry, contact us today by telephone (714) 456-0500 or email gary@ashwillassociates.com. We’ll be happy to offer guidance and answer all your questions.
