How is Industrial Property Appraisal conducted

How is Industrial Property Appraisal conducted

Besides buying-selling deals the reasons for determining the value of any Industrial Property can be many.

Property Valuers have a choice of five basic methods for conducting an industrial property evaluation, and the choice is governed by the category of the property in question. In an analysis situation, more than one method may be resorted to.

The Comparison Approach: Usually the most popular one, because it is directly linked to current market transactions. It works well when the market is stable (or the trend is stable) and there is ample data – many recent sales of comparable properties. With less such instances, adjustments are made based on similar sales in other comparable areas or regions. 

UCAS who conduct Industrial Appraisal Toronto (Montreal & Ottawa as well)  have a most extensive data base and so are best positioned for such evaluation.

The Comparison method is generally suitable for offices, warehouses, depots and storage/distribution facilities such as refrigerated/cold storage.

The Profits Approach: It is used when comparable rental/sale data is simply not there, typically in monopolistic business property, such as canteens and eating places, hospitals. It is based on estimates of a business’s gross profits.

The Residual Approach:  Used to value property with development potential or vacant land that could be developed for use. Mostly based on projections it can come up with wide-ranging valuations depending on who is doing the guesstimating.

The (Contractor’s) or Cost Valuation Approach: Often used for a property that is unique and without comparable market transactions. The cost for each element of the property (such as land, building, roads and infrastructure) is calculated based on what it would be for a fresh equivalent and then totaled for arriving at a valuation. Land costing can be difficult with wide variances and so it is usually a last resort. Realistic market value is driven by forces of supply and demand, not by the cost of construction.

The Investment Approach: Based on the potential of the property to generate future income. As an example: A company in dire need of a manufacturing facility could use the transfer prices of the products it intends to make here to make projections for the future and thus arrive at a price ceiling for the what may be its bid for the property. There are many versions of this that are based on Discounted Cash Flow and Net Present Value (NPV) modeling.

You can be anywhere in the world, but if you need an Industrial Appraisal in Montreal, UCAS’s team of fully accredited appraisers will do it for you; while offering you a range of suitable consultancy options.  

Entrust our team with your appraisal directives for your property. Approved appraisal of residential, commercial, institutional, agricultural property, etc. Inquire now for a free consultation & quotation.
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