What Does A Commercial Appraisal Look Like?

Your lender has sent you a long appraisal of your SOMA building. Which sections should you read first? Start with the property interest, effective date, intended use, and users. The report format depends on the assignment. This reading guide does not promise a particular layout.

Check what was valued and when

An appraisal for the whole parcel differs from one for a defined ownership interest. Distinguish the effective date of value, inspection date, and report date. Receiving a copy does not automatically make you an intended user for a new purpose.

Follow the leases and expenses

For a Financial District office, the lease roll may show space occupied by a head tenant while that tenant markets a sublease. Check how the report distinguishes occupancy, payment obligations, available space, concessions, and lease expirations. A citywide vacancy headline cannot answer those building-specific questions.

For a Mission District mixed-use parcel, follow storefront and apartment income separately. Shared expenses need an allocation. Rent billed, rent collected, and proposed rent describe different facts. Read how the appraisal connects those records to relevant market evidence at the valuation date.

Read the assumptions with the value

A proposed renovation is different from current condition. An assumption about an unavailable suite or missing lease can affect how you use the value opinion. Read those conditions before treating the conclusion as an unconditional price for the property today.

Understand the analysis and ask about record errors

Income, sales comparison, and cost evidence can have different usefulness. Read the explanation of the approaches used and the reasons for the weight assigned to them. No generic city statistic replaces that analysis.

Identify the record and report page when asking Kevin about a unit count, lease date, expense, or asset boundary. The appraisal answers its defined valuation question. It does not decide legal rights, tax liability, or a lender's credit decision.