KLARAS


COMMERCIAL APPRAISALS 

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COMMERCIAL PROPERTY - REAL ESTATE APPRAISERS | FLORIDA STATEWIDE | 561-818-2954

KLARAS Commercial Appraisals
Business Value Appraisals
Commercial Real Estate Appraisals
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               Florida & Southeast US

                       561-818-2954

Offices Throughout Florida.


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APPRAISALS OF COMMERCIAL REAL ESTATE & BUSINESS PROPERTIES


 Attention Buyers:  We provide "pre-offer" due diligence BPOs and "Restricted Use" commercial appraisals; fees starting at $375. 


Attention Sellers:   If you're selling a portfolio or  just a single commercial building, we'll provide a market value estimate and guide you to the right asking price.  

HERE'S HOW IT'S DONE...COMMERCIAL REAL ESTATE APPRAISING 101 


KLARAS Commercial Appraisers and related firm, KLARAS Realty Advisors are leading providers of commercial real estate appraisal services and business valuations. Our highly credentialed professionals possess extensive experience in both disciplines and are licensed “State Certified General Appraisers”, the highest form of licensure within a given state. Additionally, the principals of our firm hold top prestigious industry certifications such as the “CCIM” Designation (Certified Commercial Investment Member). Additionally, several staff appraisers hold the highly respected MAI appraisal designation.


The appraisal process typically involves three approaches to property value. These approaches are based on the following three facets of value:


  • 1. Cost Approach - The current replacement cost of a property less losses in value from deterioration and functional and economic obsolescence (accrued depreciation).


  • 2. Market Value Comparison Approach - The value indicated by recent sales of comparable properties in the marketplace.


  • 3. Income Capitalization Approach - The market value that the property's net earning power will support based upon a capitalization of net income, stabilization, and residual equity buildup.


  • The requisites of the appraisal process call for approaches made independently of each other, specifically a Cost Approach, a Sales Comparison Approach, and an Income Capitalization Approach. The Cost Approach assumes that a property's value is equivalent to its replacement cost, less accrued depreciation and obsolescence. This falls under the theory of substitution where the rationalization of its support is premised upon the assumption that a property's optimum value cannot exceed the cost of duplicating the property on a similar site.


  • The Sales Comparison/Market Approach is determined by direct units of comparison where value can be converted to price per square foot, acres, rooms, units, or income multipliers and overall rates. The theory is that a prudent investor would pay no more for a given facility/property than what the typical market purchaser would pay for a comparable facility, all things being equal.

  • The Income Capitalization Approach is derived from the rationalization of substitution, where the price one would pay for a property equals the attributable value of its earning ability where measured by the yield an investor will obtain.


  • The final step in the commercial property appraisal process is the reconciliation of value indications. This is the consideration of the indicated value resulting from each of the three approaches. The appraiser considers the relative applicability of each of the three approaches to arrive at the final estimate of defined value.


  • The individual nature of the real property leads to a question of determining the most appropriate appraisal procedure for valuation. Although this cannot be easily answered, the subject is real property, and as such, market value can be estimated.


  • After examining the range between the value indications, the appraiser places major emphasis on the one, or on those, which appear to produce the most reliable and applicable solution to the specific appraisal task. One takes into account the purpose of the appraisal, the type of property, and the adequacy and relative reliability of the data processed in each of the three approaches. These considerations influence the weight to be given to each approach. But in order to appraise the property, the appraiser must first determine the highest and best use of the property.


  • Commercial Property Highest and Best Use: A property must be appraised in terms of it’s highest and best use. According to The Appraisal of Real Estate, Tenth Edition, page 275, Copyright 1992, by the Appraisal Institute. The definition of highest and best use is as follows:


  • The reasonable probable and legal use of vacant land or an improved property, which is physically possible, appropriately supported, financially feasible, and that results in the highest value.


  • When a commercial property contains improvements, the highest and best use may be determined to be different from the existing use. Implied in this definition is that the determination of highest and best use takes into account the contribution of a specific use to the community and community development goals, as well as the benefits of that use to individual property owners. An additional implication is that the determination of highest and best use results from the appraiser's judgment and analytical skills; that is, the use determined from analysis represents an opinion, not a fact to be found. In appraisal practice, the concept of highest and best use represents the premise upon which value is based. In the context of most probable selling price, another appropriate term to reflect highest and best use would be the most probable use.


  • Any determination of highest and best use includes identifying the motivations of probable purchasers. The motivations are based on perceptions of benefits that accrue to property ownership. Different motivations influence the highest and best use and are significant to an appraiser's conclusions about the highest and best uses of any parcel of real estate.