Industrial Appraisal

Industrial property appraised include warehouse, flex space, distribution, cold storage, business park, and manufacturing facilities.

The appraisal of an industrial property is a qualified, professional evaluation of the fair market value of a real estate asset related to industrial use, including factory, storage warehouse, or manufacturing facility. The appraiser typically uses three methods, including the Cost Approach, the Sales Comparison Approach, and the Income Approach to evaluate aspects such as the industrial property’s physical condition, market area, market conditions, and income production. Appraisals are typically required for mortgages, acquisition/disposition, tax modification, and other monetary or legal decisions.

What is an Industrial Appraisal

An industrial appraisal is an unbiased, third-party evaluation of a property’s value in the open market, estimated by a professional who holds a state certification from the state in which the property being appraised is located. This can include a thorough and complete analysis involving a personal inspection of the real estate, the equipment, and the income potential it produces.

 

How an Industrial Appraisal is done (the three approaches)

In the Sales Comparison Approach, a comparison of the subject property is made to comparable industrial properties that have sold recently. In the Income Approach, the appraiser estimates the potential income the property is able to generate or is projected to generate. In the Cost Approach, the appraiser estimates the depreciated replacement cost of the property and its improvements to the underlying land value.

 

Why is an Industrial Appraisal needed

Industrial appraisals are used to estimate the property’s value, so the property can be used as collateral for a mortgage. They are used to establish a fair market value for negotiation between buyers and sellers. They help investors determine possible investment opportunities. Industrial appraisals are used for property tax adjustment, and they are also used to estimate values in estate settlement/planning, legal disagreements, and insurance claims.