|
MOODY APPRAISAL An excellent source for commercial and industrial valuation, including vacant land acreage, parcels and lots. (Appraisal of Fee Simple, Leased Fee Interests) Insurable Replacement Cost New, for single family dwellings, condominiums, apartments, commercial and industrial properties. Restricted Use "Market Value" Appraisal; one day turnaround in an active MLS residential market, $250.00 Carlemoody@bellsouth.net ; (904) 631-4741(cell) (904) 270-1385 (fax) |
Commercial Listing data is available from the Multiple Listing Service of NE Florida ( Northeast Fl. Association of Realtors). Also lease information is available at Lease rates for commercial and industrial properties If the commercial or industrial property is an income producing property a capitalized annual income or discounted income flow over several years may be applicable depending on whether the cash flow or income is considered stable and whether the occupancy is considered stable. If income or occupancy is not stable then a more involved and detailed discounted cash flow analysis is considered more appropriate to reflect the transition from partial occupancy to full occupancy at market rates over a typical holding period. CAPITALIZATION RATES AND YIELD RATES TO THE EQUITY INVESTOR Ellwood's yield cap formula is passe', but I still like it. Here is the much easier to understand Akerson Format of the Ellwood formula for kicks. Mortgage-Equity analysis Generic.pdf (Revised For level and stable income performance and strong property appreciation). If the expected property appreciation is not this high then the projected overall capitalization rate would be expected to increase to achieve the desired equity yield rate. The equity yield rate would generally be expected to be higher than the mortgage rate due to higher risk of loss and most savvy understand this. If you know your equity yield rate requirement in a current investment, the loan to value ratio, the % of the loan that will be paid off during the holding period, the change in value for the property over the holding period, and the sinking fund payment that can be attributed toward equity buildup though property appreciation and loan pay-down then you can calculate an equivalent overall capitalization rate for your property. In comparison with overall capitalization rates for other similar properties you might be able to gain a good idea about your property's management and performance in the market. If you add to the overall rate the product of the change in property value over the holding period and the investor sinking fund rate you can obtain an overall yield rate for the property (r or basic rate) which might be used to discount cash flows for investments in other similar types of properties. ______________________________________________________________________________________________ Some of the necessary terminology for developing an overall capitalization rate The equity yield rate Loan to value ratio Loan paid off during holding period The change in value of the property over the holding period The sinking fund payment necessary to accumulate a specific future amount Property yield rate (r or basic rate)
|
