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Anatomy of a Commercial Real Estate Appraisal: A Top 17 Q&A Guide

The Robert Weiler Company

If you’re reading this article, you will likely need a commercial real estate appraisal for property being sold, mortgaged, taxed, insured, or developed. The data is then analyzed and used to develop opinions of value. Market value is the most likely selling price a knowledgeable buyer would pay to a knowledgeable seller.

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Eleven Types of Risk in Commercial Real Estate

Property Metrics

Similarly, leased property includes a risk that tenants will not be able to make timely lease payments as expected. Late payments can create cash flow problems for the property owner, but the situation can be worse if the tenant goes out of business and moves out of the space. Inflation Risk. Interest Rate Risk. Liquidity Risk.

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Three Types of Commercial Real Estate Obsolescence

Property Metrics

As a result of these changes, a commercial property could be cash flow positive one day and undesirable the next due to shifts in tenant desires or some other factor. . The real estate term for this type of risk is “obsolescence” and there are three types that CRE investors should be aware of. Functional Obsolescence.

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How should appraisers approach short-term rentals?

DataMaster

Or, a home may be purchased for its income potential, with the purpose of renting the property to a tenant. The introduction of STRs presents a profitable opportunity for investors of all kinds. Those investors (borrowers) are going to want to seek financing for the purchase transaction or to support a refinance. Uncertainty!

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How should appraisers approach short-term rentals?

DataMaster

Or, a home may be purchased for its income potential, with the purpose of renting the property to a tenant. The introduction of STRs presents a profitable opportunity for investors of all kinds. Those investors (borrowers) are going to want to seek financing for the purchase transaction or to support a refinance. Uncertainty!

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Helping Lenders Navigate the Commercial Real Estate Appraisal Process

Simonson Real Estate

Lenders work with real estate investors and owners of small, medium and large businesses (borrowers) to help them secure financing to purchase and refinance real estate that fit their investment criteria and fulfill their business needs. Examples: A building owner has a single lease or multiple leases with tenants.

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Why Industrial Space for Rent Is the Hottest CRE Sector in 2021

The Robert Weiler Company

Research : Also coined in the industry as “flex,” flex space is utilized for research and development to design new products. The two scenarios surrounding build-to-suit are speculative buildings and scenarios where the tenant has already been secured. Classification is a way to differentiate specific market features for investors.

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