Description

What is your commercial property worth?

It sounds like a simple question, but in commercial real estate, the answer is rarely a single number. A property may carry one value for an owner-user, another for a developer, and another for an investor evaluating its income. The buyer's intended use, the property's zoning, its condition, current lease rates, timing, and even the cost to build a replacement can all change the answer.

In this episode of CRE Over Coffee, Brady Brannon and Nick Hammett unpack the primary ways commercial real estate is evaluated. They explain why nearby sales are only a starting point, how highest and best use can reveal a more valuable opportunity, and how investors use net operating income and capitalization rates to work backward into a purchase price.

They also discuss:

• Why there may be no single “true value” for a commercial property
• What makes a sale or lease a useful comparable
• How location, visibility, condition, size, and lease structure affect value
• Why an owner-user may pay more than an investor
• How zoning and zoning overlays can unlock—or restrict—a property's potential
• What cap rates tell investors about income and value
• Why a small change in cap rate can create a significant change in price
• How construction costs and replacement cost influence buying and selling decisions
• Why the first offer may—or may not—be the best offer
• How timing and seller motivation affect the best pricing strategy

The takeaway: determining value is not simply about choosing a price per square foot. It is about identifying the valuation approach and buyer profile most likely to unlock the property's strongest market value.

Have a property you are considering selling, leasing, purchasing, or repositioning? Reach out to Brady or Nick to talk through the options.

Brady Brannon
brady.brannon@svn.com

Nick Hammett
nick.hammett@svn.com

Follow CRE Over Coffee for practical commercial real estate conversations, real-world stories, and insights designed to help owners, investors, and businesses make better decisions.