Establishing cap rates for Class B office space is pretty simple. But the vacancy rate of subject vs. comparables was a challenge.
It’s difficult to assess rental rates unless you know for sure where the common-area maintenance begins and ends.
Given the huge variety in condition and configuration in surrounding buildings—let alone parking issues—this appraisal needed extra comparables for adjustment analysis.
The retiring sub-contractor had used this metal building with drafting offices and lots of extra storage for over 20 years of construction jobs. He wanted an appraisal to show the interested party with the business adjacent. All that road construction was bad for business in the moment, but what about afterward? How soon?
The appraisal of this HEB Midcities commercial flex space included a building refurbished with state of the art training and media areas—but only partially. The owner got rid of the inefficient atrium and remediated the asbestos and lead. Cleaned up two floors “to the studs.” But two floors remained, and elevator replacement. Moser Appraisals provided an “as-is, retrospective” value opinion, for further financing. We accessed both commercial cost and sales data sources.