A commercial appraisal is a detailed report prepared by a licensed commercial appraiser that estimates the value of a commercial property. It’s typically a professional, structured document with a combination of narrative, charts, tables, and photos. Here’s what it generally looks like and what it includes:
1. Cover Page
- Property address and legal description
- Appraiser’s name, license number, and contact info
- Date of appraisal
- Client name (who ordered the appraisal)
2. Table of Contents
- Sections of the report for easy navigation
3. Executive Summary / Summary of Value
- The appraiser’s final opinion of value (often as “as-is value”)
- Key points supporting the value conclusion
4. Property Description
- Type of property: Office, retail, industrial, multi-family, etc.
- Size and layout: Square footage, number of units, lot size
- Construction details: Year built, materials, condition
- Amenities and features: Parking, elevators, HVAC, security, etc.
5. Market Analysis
- Overview of local commercial real estate market
- Comparable properties (sales or leases)
- Economic trends that might affect value
6. Zoning and Legal Considerations
- Zoning classification
- Land use restrictions or easements
- Environmental or regulatory concerns
7. Income Approach (if applicable)
- For income-producing properties:
- Gross income from rent or operations
- Expenses (maintenance, taxes, insurance)
- Net operating income (NOI)
- Capitalization rate to estimate value
8. Cost Approach (if applicable)
- Replacement cost of building minus depreciation
- Plus land value
9. Sales Comparison Approach
- Comparison with recently sold similar properties
- Adjustments for differences in size, condition, location
10. Photographs and Maps
- Interior and exterior property photos
- Site maps and floor plans
- Aerial photos or GIS maps
11. Supporting Tables and Charts
- Income & expense statements
- Comparable sales data
- Depreciation schedules
12. Certification and Signature
- Statement that the appraisal was done ethically and in accordance with USPAP (Uniform Standards of Professional Appraisal Practice)
- Appraiser signature and date
Here’s a simple table showing what a commercial appraisal includes:
| Section | What It Shows |
|---|---|
| Cover Page | Property address, appraiser info, client info, date |
| Executive Summary | Final value estimate, key findings |
| Property Description | Type, size, layout, year built, condition, features |
| Market Analysis | Local market trends, comparable sales/leases |
| Zoning & Legal | Zoning, land use, easements, restrictions |
| Income Approach | Gross income, expenses, NOI, cap rate (for income properties) |
| Cost Approach | Replacement cost minus depreciation, land value |
| Sales Comparison | Comparison with similar properties, adjustments |
| Photos & Maps | Interior/exterior photos, site map, floor plans |
| Tables & Charts | Income/expense statements, sales data, depreciation |
| Certification | Appraiser’s statement, signature, USPAP compliance |
Related
How long is a commercial appraisal good for?