Direct Capitalization in the Appraisal of Office Buildings:
If you are in need of an appraisal of an office building, please feel free to call us to discuss your project. That said, we invite you to work with the following calculator if you are interested in learning more about the Income Approach to Value and how it applies to the appraisal of office buildings, or properties with gross leases.
The following tool mimics the direct capitalization approach to value that an appraiser would utilize in the appraisal of office buildings. After inputting your property’s income and expenses, you will need to select the most appropriate cap rate for your property. Once done, the calculator will divide the office building’s net operating income by the cap rate which will result in a value for the office building.
There is a website out there that advertises an appraisals of your office building, yet produce nothing other than a value based on a simple direct capitalization approach to value for an office building. In their terms of service, they make it very clear that what you get is without value, yet they persist in charging for their “appraisal” of your property when it is nothing of the sort.
They ask you to input the office building’s income and expense details. Once done, they apply a cap rate to the resulting net operating income and pop out a value for the property. For this “service” they charge approximately $25.00.
The following office building valuation tool does exactly what that other site does, only without charge!
Fill in all the boxes number values. Use “0” for nothing and whole numbers for percentages, i.e. 5.5 equals 5.5 percent. Most importantly, if you think you need an appraisal of your office building, we at Stein Valuation stand ready to assist.