Categories Narrative

The Commercial Real Estate Appraisal Process

 

We are constantly asked by owners and prospective owners to value buildings. As brokers, we can prepare BOV’S (Broker Opinion of Values).  This is our opinion of a specific property’s market value if put on the market for sale.  Full valuation for Lenders and partners to benefit all parties is called an Appraisal.  Below is a nice summary article on the commercial real estate appraisal process which includes:
 
–Physical inspection, including a complete walk through
–Research on zoning and all applicable city ordinances
–Comparables and analysis
 
All of this is then reviewed and compiled into a report that values the property. 
 
Sometimes it’s good to review the basics.  Today’s narrative is just that.  Hope you find something you didn’t know. 

Call me with any questions.

 

Craig

602.954.3762

ccoppola@leearizona.com


 

The Commercial Real Estate Appraisal Process
By Real Estate Matrix
real estate matrix
Thursday, July 12, 2018

Two of the most important factors to someone obtaining a commercial real estate appraisal is speed and accuracy. If this is important to you during the appraisal process keep communication in mind. Communication, or lack thereof, is one of the factors that can contribute to delays.

Starting the Commercial Real Estate Appraisal Process

How long does a typical commercial real estate appraisal take? It could depend on lots of factors. The typical commercial real estate appraisal should only take 3-4 weeks once the work has been agreed to. However, lack of communication from the borrower can significantly slow down the process. What holds it up? When someone provides information that is incomplete, late or inaccurate.

What can you do to speed up the process?

1.     Provide very accurate information to the appraiser.
2.     Provide all existing and relevant documents that have been requested.
3.     Prompt communication is always helpful. When the appraiser asks a question, respond the same day and provide clarifications on anything that is requested.

What Goes into a Commercial Real Estate Appraisal?

A commercial real estate appraisal usually starts with a physical inspection of the property. Either the borrower or someone that represents them should attend the site inspection.

A walk-through of the property is done to check out both the interior and exterior of the building(s) and property.

The walkthrough does not include any sort of environmental inspection. Nor does the appraisal inspection include an assessment of the working condition of the mechanical or structural elements of the building.

This is an opportunity for the appraiser to ask any questions that arise.  The types of questions that may arise could be about the property itself, development plans, development plan timelines, and operations of the business.

The appraiser will also takes pictures and include them in a written report.

Once the physical inspection is complete next comes the research phase. The information about zoning, regional, city and neighborhood data are all collected and considered.

Also researched at this time is information about comparable properties. These properties could be close, however, they could also be some distance away if it is difficult to find something comparable. For instance, factories that make automobiles aren’t that common, in this case another location may be considered as comparable.

Commercial Real Estate Appraisal | List of Considerations

When analyzing properties that may be comparable the appraiser will consider:

·        The age of the buildings
·        Costs and depreciation
·        The cap rates for comparable investments
·        The other buildings on the premise
·        The condition of the buildings
·        That the size of the site area
·        Comparable sales
·        The size of the buildings

Commercial Real Estate Appraisal | The Final Phase in the Process

During the final step of the appraisal process, all the information is gathered into a written report that includes:

·        An overview of the most significant points about the property
·        Definitions – The description section provides the scope of the report, definition of market value, information about the property and overview of the appraisal process
·        Descriptions – This section goes into the analysis of the community, the neighborhood, the site, any improvements to the property and the highest and best use analysis of the property
·        Valuation Conclusion – This section outlines the methodology used, and the values obtained through a cost approach, a direct sales approach, and an income approach. A final conclusion is also provided.

Once the written appraisal is complete, it is provided to both the lender and later to the borrower for their review.

The lender can then move forward with the completion of the loan process. Either party should direct any questions to the appraiser for clarification. The final written report includes a conclusion on the value of the property based on the appraiser’s analysis.

Categories Narrative

Relationships- Deep and Meaningful

 

This narrative typically talks about office space leases, trends and all things commercial real estate.  Today, I wanted to talk about how we have thrived over 35 years in an incredibly tough business.  It’s pretty simple — we build deep meaningful relationships with our clients. How do we do this? 
 
We have a number of non-negotiables including:
 
–Do what you say you will do {Click to Tweettwitterlogo_1x}
–Finish what you start
–Show up on time
–Say please and thank you.

(I learned these from Dan Sullivan and The Strategic Coach over 25 years ago and they are the cornerstone of who we are).
 
We also do a lot of what Elizabeth Bernstein talks about below about building relationships.  Here are a few key points she makes:
 
–Listen more than you talk
–Assume the best from the beginning
–Make time for the ones you love in life
–Do more for others than they do for you
 
We would like to build a deep meaningful relationship with you and your company.

Call or email me and I would love to set up a meeting.

Craig

602.954.3762

ccoppola@leearizona.com


 

The Best Relationship Advice of the Year
Top suggestions from readers include spoiling your partner, listening, assuming the best and knowing when to chuck it all.

By Elizabeth Bernstein

WSJ

January 4, 2018

relationships 1

I receive thousands of letters from readers of my Bonds column each year, and many offer hard-earned relationship advice. Much of it is excellent and inspiring. One reader says she is mindful not to compare her life to characters in movies—or to friends on Facebook. Another says he always tries to say something positive instead of negative. A third recommends giving people “a gift” of attention without expecting anything in return.

This year I’ve decided to share the bounty. Here’s the best advice I’ve heard from readers this year.

 

Listen, Breathe, Listen
Steve Miksis, a 66-year-old accountant in Santa Rosa, Calif., believes there is no greater gift than genuinely listening to a person, without interrupting or judging or inserting your opinion. And so he works hard at being a better listener.

He employs a technique he learned when he was mountain climbing on Mount Whitney in California. While descending a particularly harrowing passage, he felt panic rising. He thought of an article he’d read about how the Marines train their snipers to “plan, breathe and execute,” because deep breathing dissipates cortisol. Then he plotted out his next step, sucked in a deep breath, and took it.

 

Bonds: On Relationships
Now, he reminds himself to “just breathe” when he is listening to someone, especially when he starts to feel defensive, or triggered to react. As he takes deep breaths, he says, his hearing sharpens, he becomes more attuned to non-verbal cues, and he feels more emotionally open to what he is hearing. “That breath stops time—it gives you a space and it gives the other person a space,” he says.

 

Assume the Best
Too often, we jump to conclusions and assume the worst about a situation or a person’s intentions. (Think of how you feel when someone doesn’t return a text or call—Is this person angry? Rude? Dead in a ditch?) Don’t do this.
Geoffrey Greif, 68, a professor at the University of Maryland School of Social Work who lives in Baltimore, says he learned this tip through his work, which is focused on finding the strengths in others. If he is not sure what someone thinks about him or what the person means by what he or she said, he tries to assume it is positive. This helps him to feel calm and steady. And it keeps him from entering into the discussion on the defensive, he says.

The tactic comes in handy with colleagues, students and his wife of 43 years, who is also a professor. Dr. Greif says both he and his wife often get absorbed in their work and can sometimes ignore each other. “If we each assume the lack of responsiveness has nothing to do with our relationship and more to do with a love and commitment to our work, the better off we are,” he says.

 

Prioritize Your A Team
Everyone’s busy. We need to consciously make time for the people we love.

Lo Myrick, 30, a business consultant in Charlotte, N.C., thinks of the people in her life as belonging to teams or squads. Her “A” squad is made up of her closest friends and family, her “B” squad is “friends and professional network” and her “C” squad is made up of acquaintances. This approach helps her prioritize and make sure she sees the people she is closest with in person often enough. She also stays in touch with everyone via phone, text or social media.

“It takes a strategy to build relationships and have a happy life, just like it takes a strategy to build a career or business,” Ms. Myrick says.

 

Mutual Spoliage
Kevin Caron, 57, a sculptor in Phoenix, says he and his wife compete with each other—to see who can be nicer. The couple, who has been married 25 years, calls this “mutual spoilage” and even has a flag with the phrase on it, in Latin.

Here’s how the concept works: One spouse spots something that needs to be done—emptying the dishwasher, taking out the trash, doing the laundry—and does it before the other person does. The tasks may be mundane, Mr. Caron says, “but each is a small act of love and respect.”

The only rule: You can’t point out what you did. (That would be asking for credit.) “The silence is part of the fun,” Mr. Caron says. “And we all benefit, including the dog and the cat.”

 

Be Easy to Love
Relationships can be stressful. You need to consider your role in the situation, says Margit Sylvester, 46, a civilian police supervisor in Cary, N.C.

She gives examples: “Boss snubs his/her nose at you upon first greeting of the day? It’s not all about me!” “Left a message for a friend and they haven’t responded? Don’t jump to conclusions which would suggest there’s something wrong with me or the relationship.” “Hubby not a naturally romantic guy? Learn to recognize the ways in which he expresses his devotion and tell him out loud how much you appreciate it.”

“Everyone is on a journey that only they can fully recognize,” Ms. Sylvester says. “Don’t make the mistake of filling in their gaps with your story.”

 

F— it Bucket
Life can be overwhelming. Not everything is worth worrying—or even thinking—about.

To file away “the trash,” 81-year-old Don Nelson, a retired president of a security-systems company in Falmouth, Mass., has created a mental bucket. Then he sorts his information, addressing issues that are important—his wife’s decline from Alzheimer’s or charity work, for example. Everything else? “F— it and into the bucket.

What’s in there? Everything political that is harsh and nasty. (“It’s a good thing the bucket has no bottom in today’s scene.”) News of tragedies that are upsetting but he can’t change. And sports. (“The Red Sox blew the game? Into the bucket. They play again tonight.”)

“Give it a try,” says Mr. Nelson. “It’s like cleaning your mental closet.”