Commercial real estate valuation is primarily conducted using three methods: the income approach, which calculates value based on the income the property generates; the sales comparison approach, which assesses value by comparing the property to similar ones recently sold; and the cost approach, which estimates the cost to replace or rebuild the property. Each method offers a different perspective on value, considering factors like rental income, market trends, and construction costs, ensuring a comprehensive assessment of the property’s worth.
Valuing commercial real estate involves analyzing income potential, comparing similar property sales, and estimating replacement costs. The income approach focuses on revenue streams, the sales comparison looks at market trends through similar sales, and the cost approach considers the expense of recreating the property. Each method provides insights into the property’s worth, considering its unique features and market position.