How We Value Your Building
A direct offer isn’t a number pulled from the air, and it isn’t a lowball you have to argue up from. Here’s exactly what we look at, in plain terms — and we’ll walk you through how it applied to your building when we make the offer.
Start with what the building earns (or could)
For income property, value starts with the income. We look at the in-place income — actual rents from the current leases and rent roll — and the net operating income (NOI) after real operating expenses. We then apply a capitalization (cap) rate drawn from comparable commercial sales in the corridor and asset class. For a stabilized, fully-leased building, that income approach usually does most of the work. For a vacant or half-leased building, we weigh what it can realistically earn once it’s re-tenanted, against the time and cost to get there.
Then the building itself
Income isn’t the whole picture, so we look hard at the asset:
- Condition and deferred maintenance — roof, structure, mechanicals, and any work a buyer would have to fund.
- Asset class specifics — clear height and loading for warehouse/flex; floor plates and parking for office; frontage, signage, and corridor strength for retail; unit mix and metering for multifamily; reuse potential for special-use.
- Location and corridor — whether traffic and demand are coming or going; what the block supports.
- Use and zoning — permitted use, access and parking, and any path to a higher and better use.
Then the situation
The cost of the situation is real, and we account for it honestly — not to lowball, but because it’s part of the math:
- A lender deadline or maturing loan that limits time.
- Liens, back taxes, or title issues that have to be cleared at closing.
- Vacancy and carrying costs stacking up each month — taxes, insurance, utilities, security, debt service.
- Tenant or lease problems that narrow the pool of financeable buyers.
The honest trade
A direct sale trades some top-line price for speed, certainty, and a close with no financing contingency — no listing period, no public marketing, no buyer’s loan to fall through, no repair demands. That trade is worth it for the right situation and the wrong move for a clean, financeable building with time on the calendar. We’ll tell you plainly which one you have. When a brokered listing would net you more, we say so.
What you’ll get from us
When we make an offer, we explain how we got there — the income and cap rate we used, the condition and situation adjustments, and where a comparable or two landed. You’ll understand the number, not just receive it. A property review is free, confidential, and carries no obligation.
Questions owners ask about valuation
How do you decide what to offer on a commercial building?
We start with the income (in-place rents, NOI, and a cap rate from comparable sales), then adjust for the building’s condition and asset class, the location, and the situation — debt, liens, vacancy, or tenant issues. We show you how we got to the number.
Will you explain how you arrived at the offer?
Yes. We walk you through the income, the comparables, and the condition and situation adjustments when we present the offer.
Do you lowball?
No. A direct offer reflects a real trade — some top-line price for speed and certainty. When a listing would net you more, we’ll tell you.
Do I need an appraisal or a rent roll to start?
No. The address and a short description are enough to begin. Leases or a rent roll help us move faster and sharpen the number.
Where owners go from here
Want to know what your building is worth to a direct buyer?
Tell us about the property and the situation. We’ll review it and explain the number — free, confidential, no obligation.