What is the most common appraisal method for commercial property?

The most common appraisal method for commercial property is the Income Approach, especially for income-producing properties like office buildings, retail centers, and apartment complexes.

Here’s a quick breakdown of the three main methods:

Method	Description	When It’s Used
Income Approach	Values property based on its income-generating potential (net operating income ÷ capitalization rate).	Most common for commercial properties like rental buildings, shopping centers, and office spaces.
Sales Comparison Approach	Compares the property to similar recently sold properties in the area.	Used when there are sufficient comparable sales, often for smaller commercial properties.
Cost Approach	Calculates the cost to replace the building minus depreciation, plus land value.	Often used for new buildings, unique properties, or when income data isn’t available.

So, if you’re thinking typical commercial property, Income Approach is usually the go-to.

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