Commercial real estate (Preferred methods of analysis)

[capeters]

Heya,

Being that residential property likely has less variables than commercial, I find that there is no shortage of online resources for indicative values in the residential sector that provide the ability to quickly receive insight on potential values at a glance via a desktop study. (Homes.co.nz, myvalocity.co.nz, QV)

Would anyone recommend any online resources (if any) to look at when it comes to valuing commercial properties via a desktop study from home? It normally takes 3 mins to analyse a residential deal and I'm spending 15 to 20 currently on commercial, insights would help as I'm spending at least 6 hours a day on analysis.

All insight welcome.

Would help speed up a lot of my analysis and study.

Cheers all,
-Chris

[Rosco]

Hi Chris,

Generally value = rental \ yield

If you are dealing with a certain kind of property in a certain area, it generally just takes a 2 min call to a couple of agents to find the rent per square metre and the going rate for yield.

Like with residential, you need to look at what you can do to change rent, and therefore what the potential rent and value is.


When I'm looking at commercial deals (all the time) as soon as I hear the size, parking, and the likely purchase price, I have a real good feel if something is possible!

ie
if deal was, rent 50,000, and purchase price 1.5 million. It can look terrible. But if only half rented, lots of carparks and maybe opportunity to turn from warehouse to office to get more rent, then suddenly it might be worth looking further.

Does this help?

Ross

[capeters]

Hi Chris,

Generally value = rental \ yield

If you are dealing with a certain kind of property in a certain area, it generally just takes a 2 min call to a couple of agents to find the rent per square metre and the going rate for yield.

Like with residential, you need to look at what you can do to change rent, and therefore what the potential rent and value is.


When I'm looking at commercial deals (all the time) as soon as I hear the size, parking, and the likely purchase price, I have a real good feel if something is possible!

ie
if deal was, rent 50,000, and purchase price 1.5 million. It can look terrible. But if only half rented, lots of carparks and maybe opportunity to turn from warehouse to office to get more rent, then suddenly it might be worth looking further.

Does this help?

Ross

Certainly does, thanks for taking the time to post it up mate.

I'm arranging a valuation just as I'm putting in a tenant, having a bit of an issue determining value (valuation value) due to yield being above our Auckland's 5-6% range, looking to educate myself and have as many tools to help move the deals through.

Cheers,
-Chris