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Industrial Appraisals – Foss Consulting Group Industrial Valuation Services

Foss Consulting has performed industrial valuations on warehouses, distribution buildings, manufacturing buildings, truck terminals, flex buildings, R&D buildings, cold storage/refrigeration/food processing buildings, showroom buildings, storage yards, business parks and more. Performing a commercial real estate appraisal on an industrial property can be very complicated. There are many factors that a commercial real estate appraiser must deal with when performing an industrial appraisal assignment. It is imperative to understand these factors, as it will affect the appraisal.  The following is a sampling of some of the major questions and factors we consider when appraising an industrial property.

  • What is the Highest & Best Use of the property?

  • How does the location of the subject property compares to other industrial properties – truck maneuverability, access, exposure, linkage

  • Clear Heights? (subject property vs. other industrial properties)

  • Office Finish? (subject property vs. other industrial properties)

  • Grade-level and dock high loading doors? (subject property vs. other industrial properties)

  • Floor Area Ratio (FAR) and site coverage? (subject property vs. other industrial properties)

  • What is the parking ratio? Is there adequate parking?

  • If the subject property is leased? Is the contract rent below market or above market?

  • Is the property a single-tenant or multi-tenant property?

  • Condition of the building? (subject property vs. other industrial properties)

  • Is the property leased? Vacant? Owner-Occupied?

  • Is there mezzanine area? Is it legal? Is it part of the rentable square footage?

  • Is there excess/surplus land?

  • What are the neighborhood demographics?

  • Are there any easements/encroachments?

  • Is the property in a flood plain?

  • What is the power? Amps?

  • Is there a secured yard area?

  • HVAC? Is the office and/or warehouse climate controlled?

  • Is there deferred maintenance? If so, how much will it cost to cure?

  • Appeal? (subject property vs. other industrial properties)

  • Railroad access?

  • What do the local brokers say about the current industrial market conditions?

  • What are cap rates for industrial properties in the market?

  • What is the most probable buyer of the subject property? Owner-User? Partial Owner-User? Investor?

  • What concessions or tenant improvements allowances are typical in the market?

  • What is the common lease structure for the market? (NNN, Industrial Gross, Gross)

  • What is the historical occupancy of the subject?

  • What is the building type? There are many different types of industrial property types such as warehouse, distribution, showroom, truck terminal, cold storage, contractor storage yard, and etc.

  • What is the scope of the assignment?

  • Year built and effective age? (subject property vs. other industrial properties)

  • What is the remaining economic life of the property?

  • Construction quality? (Concrete Tilt-up, Masonry, Metal, Brick, Wood-Frame)

  • What are the marketing and exposure times for industrial properties?

  • Building and Site Size? (subject property vs. other industrial properties

  • What is the zoning? Allowed uses? Parking requirements?

  • Do the current improvements conform to zoning?

  • Topography? Shape of the site?

  • Traffic exposure?

  • What is the sales and ownership history of the subject property?

  • What are the property taxes? Is it over assessed? Mello-Roos?

  • Restrooms? Plumbing adequate?

  • What are the supply of demand characteristics of the industrial market and submarket

  • What are asking rents, vacancy, net absorption of the submarket and market?

  • Are they any proposed or projects under construction that will compete with the subject?

  • What are the operating expenses of the subject property? How does it comparable with other industrial properties?

  • What are the most recent sale transactions of comparable properties in the neighborhood?

 

As you can see, appraising industrial properties can be extremely difficult. It is extremely important that you use a qualified and competent commercial property appraiser for all industrial appraisal assignments. Please contact Foss Consulting Group for all industrial appraisal assignments.