When it comes to valuing commercial real estate, several factors come into play. Whether you're looking to sell, lease out, or refinance your property, you need to understand how these elements can affect the overall value.
Here are a few key factors that will determine your property's worth.
The closer your property is to key amenities and transportation hubs, the more valuable it will be. If your property is located in a desirable neighborhood with high foot traffic, that's also a big plus.
Also, if your property is in an up-and-coming neighborhood, it will likely be worth more than a property in a declining area. Plans for new construction or infrastructure changes that could improve accessibility could positively impact your property value.
Pay attention to trends in the local real estate market to get a sense of where values are headed.
The Property's Condition
If your property is well-maintained and up-to-date, that will be reflected in the value. But if significant repairs are needed, they will also need to be taken into account.
Similarly, the age of your property can also affect value. Older properties may need more updates to be competitive, but they can also offer features that newer buildings don't have. For example, a historic property with original architectural details will be worth more than a generic new construction.
Consider the condition of the overall property, including the common areas and any amenities. If your property has a well-landscaped courtyard or a roof deck with great views, that will add to its value. But if the common areas are in disrepair, they will have a negative impact. It's all about finding the right balance of conditions and upgrades to maximize your property value.
The Size of the Property
The size of your commercial property will also play a role in determining its value. Obviously, a larger property will be worth more than a smaller one. But there are other factors to consider as well.
For example, the layout of your property can impact its value. If it's an open concept space that can be easily divided into smaller units, it will make it more valuable than a property with a traditional layout. The number of floors and the ceiling height can also be determining factors because they can affect the potential uses for your property.
The size of the property will also affect the potential income it can generate. Larger properties can be leased out to multiple tenants, which will increase the overall value. So if you're looking to sell your property, a larger space will likely fetch a higher price.
These are just a few of the main factors that will determine the value of your commercial real estate property. By understanding how all these elements work together, you'll be better positioned to make decisions about your property that will maximize its value. Speak to a commercial real estate appraiser to get a more accurate picture of your property's worth.