Be in control of your return …
by knowing Asset Current “as is” Value …
and by knowing how … and by how much …
one or more Added Value Strategies will increase
Current Value … without the expense, time or effort
of Added Value Strategy implementation or completion.
The Current “as is” Value (Appraisal Value) of an asset is not Actual Value!

Property Valuation​

Performed for Seller Clients and on a retained consultative basis.

A conventional appraisal will provide Current Value by merging the three primary Valuation Methods within the Discipline, i.e., Current Investment Value, Replacement Value and a Comparable Analysis … and does not consider possible Future Values and how they affect/increase Current “as is” Value. (The Valuation process for most Brokerage firms in our region is the same or similar.)
We believe the conventional appraisal is an archaic process that grossly misrepresents and … underestimates Value.
The Current Value of an asset can be increased simply by knowing the Higher Value of an available Higher Use.
Our Valuation Process includes the three primary Valuation Methods of a conventional appraisal but in addition … we reveal, define and support how and by how much … one or more available Added Value Strategies can increase the Current Value of an asset … without having to actually implement or incur the expense of implementation or completion … of a chosen Added Value Strategy(s).

We categorize Added Value Elements into two Tiers.

Tier 1:

  • Partial Development Value (Learn More)
  • Ground Up Development Value (74 William Case Study)
  • Assembled Ground Up Development Value (Learn More)
  • Use Change or Repurpose
  • Tenant Upgrade or Tenant Repositioning
  • Capital Improvement/Asset Presentation

Tier 2:

  • Sale Lease Back
  • Seller/Owner Financing (Learn More)
  • NOI Perfection (Learn More)
  • 1031 Exchange or reverse exchange
  • Income Redistribution or Income Backloading
  • Area Activity Value Drivers/Gentrification
  • Government Forces
  • Enviro Contamination Disvalue Removal or Mitigation (Learn More)
  • Other Value Encumbrance Removal or Mitigation
  • Area In Need of Rehabilitation/Redevelopment
  • PILOT (Payment in Lieu Of Taxes)//Tax Abatement

There are three primary steps in our Valuation Process.

The first step in determining the Actual Value of an asset is identifying which Added Value Elements are available … or apply to that asset.

After identifying which Added Value Elements are available or apply to an asset … the Added Value Strategies that will garner the greatest Value Increase, which may be in Tier 1 or Tier 2 … or both … have to be fully quantified and monetized. This process entails identifying every element of income and every hard and soft cost associated with the Strategy(s) and then applying regional return expectations.

Once this process is completed two Value Sets are revealed:

  1. Future Values: The Value of the Asset(s) once the Added Value Strategy(s) has been implemented and completed.
  2. Actual Values: The Current “as is” Value + the increase in Value resulting from just knowing about and fully supporting one of more Added Value Strategies.
Every property is unique, but all … no matter the size, location, use and or condition … can enjoy Current “as is” Value Increase through our Valuation Process.
Conventionally there are several or more Added Value Elements that are applicable to a particular asset. A Sale Lease Back and or a Seller Note Hold will avail a healthy Value Increase … increasing or showing available Income Increase and or Operating Expense decrease will increase Asset Value.

However, the Highest Value Use available for an asset … the one creating the Highest “as is” Value Increase … is/can be revealed, quantified and monetized through the most specialized element of our Valuation Process … Development Feasibility Valuation.

See Development Feasibility Valuation »

It is the available Development options of an asset that can exponentially increase Current “as is” Value. “Development” might be Partial, Ground Up or Assembled Ground Up.

A Buyer will often seek to buy a property from a Seller directly. The intent is for the Buyer to eliminate buyer competition, keep a Seller unaware of Actual Value and purchase well below Actual Market Value.

The Seller finds not paying a Sale Commission or Valuation Fee so attractive that they end up minimally reducing their sales cost … while losing hundreds of thousands or millions in sale proceeds … by not knowing Actual Value.

A conventional CRE Brokerage, no matter the size or level of prestige, will sell and market an asset for the Current Value, without consideration to Value Increase available from Added Value Elements. They either don’t know how to perform a Future Value Valuation … or the time required to do so does not fit the high sales volume business model … or both.

The Genesis of our Valuation Process

came from witnessing an almost astonishing frequency of property owners grossly underselling their assets. They simply did not know the Value of the property.

The Outcome of our Valuation Process

is that the Seller Client does not leave any Value or Sales Proceeds on the closing table. Typically our Valuation findings are within 5% (+,-) of the ultimate selling price.

And the Buyer Client fully understands Acquisition Value … and the Value of the project once Added Value Strategy(s) has been implemented and completed… AKA … Current Values and fully supported Future Values.

It’s said that information / knowledge is the most Valuable Asset.

Securing Highest ROI is not possible without knowing Actual Value.

You may have interest in more on Valuation and Added Value…

The two Tiers of Added Value Elements are affected by nuanced considerations.
The Current “as is” Value Increase from an Added Value Strategy will occur at different levels based on whether the Strategy is known, partially implemented or completed . For example, it might be revealed that the Net Value Increase of a Completed Tenant Repositioning Added Value Strategy is $1,000,000. Just knowing of this availability may result in an approximate Current “as is” Value Increase of $300,000 without having to perform any implementation. The Strategy might be taken to the next level where all or most capital improvement in support of the repositioning is completed … but no tenant has been identified. This might represent 60% of the available Value Increase from the strategy or $600,000. Or the capital improvement might be completed and the tenant secured … resulting in garnering the entire Value Increase …. or $1,000,000.
Contrary to an Appraisal … we do not give much weight to a Comparable Sales Analysis. The Value of an asset is in part predicated on acquisition terms. For example … the advantages of a Seller Note Hold or a Sale Lease Back can increase the sale price to a point where the dollar per square foot sale price of an asset is much higher than other sold “comparables” acquired using more conventional financing or terms. Additionally, the Selling Price of an asset can be greatly affected by whether or not an Owner is using it or a Buyer intends to use it … or the Buyer is an Investor with no plans of using the property. These, and other nuanced differentials, often remain unknown in a comparable analysis and render it inconsistent and inaccurate.
An asset may receive exceptional Value Increase through available and implemented Added Value Strategy. Whether the intent is to hold an acquisition short or long term keeping as much of the increase/proceeds as possible requires planning. This “planning” starts with how the acquisition of an asset is structured … then moves to how it is held … and possibly most importantly … how it is sold.
Keeping as much of the “gain” and or return as possible at dissolution can be a challenge.
Removing and or Mitigating Value Encumbrance … such as Environmental Contamination, easements, riparian buffers or systemic Deferred Maintenance, can be as … or more important to Value than … for example … increasing NOI or implementing a Capital Improvement Strategy. (See more on Environmental)
A minute change in NOI can greatly affect the Value of an existing asset or the estimated Value of an asset to be built, repurposed, completely renovated, etc.. Being right on Projected Income and Operating Expenses is crucial to defining and justifying all costs … including or especially land acquisition cost. (See more on NOI)
As aforementioned … every asset is unique. With this … degree of Value Increase resulting from a particular Added Value Element … implemented or able to implemented … will be different for every property.
An implemented and completed Capital Improvement Strategy will remove Actual and Perceived Disvalue associated with probable or unknown cost of removal of Deferred Maintenance and or Functional Obsolescence … and makes available considerable Value Increase from Projected or Actual Income Increase from Tenant Repositioning within the existing use … or Use Change. Improving “presentation” has very high returns whether the purpose is for Income Increase or Dissolution. (See more on Property Presentation)
The granting of an Area in Need of Rehabilitation or Redevelopment Status will greatly increase Actual Current Value. Often this “granting” is accompanied by a PILOT (Payment in Lieu of Taxes) or Tax Abatement … both of which provide exceptional Value Increase. Knowing the needs, goals and land use obligations of a municipality are integral to garnering Area In Need Of … with favorable Tax Treatment.
INCREASE … and then KNOW Asset Value!