Finding the assessed and market values of a commercial property is not always an easy task.
Though with growing access to CRE data, there’s more transparency into full property profiles than ever before.
In most U.S. markets, commercial property values and real estate comps can now be found online with relative ease.
In this article, we’re going to show you how to do so in just a few minutes.
First, a bit about commercial property values…
Commercial Property Values
There are a few different values attached to any piece of commercial property or land. Overall, they can be broken down into two categories:
- Market values.
- Assessed values.
Commercial Property Market Value
Property market values are in place as a rough value of the current holding and selling price of an asset.
To calculate an asset’s total market value, you essentially have to sum up the market value of the parcel’s land and building.
Factors that influence the market value of a commercial property include:
- Lot size and condition
- Building size and condition (interior and exterior)
- Proximity to cities, jobs, transportation, and other attractions
- Building and lot amenities
- Current demand of the market and asset type
- Comparable Sales
Commercial property market value can also be influenced by a number of other aesthetic, perception-driven factors.
From trending designs and architecture, to a property’s potential future value, to local crime rates, and schools, the number of factors can be large.
Market values can fluctuate quite a bit year-over-year, as well, and are a large driving factor in property sale negotiations.
Land Market Value
Land market value is based on what the actual land of a property is worth on the market, not counting any buildings that sit atop the land.
This number is based on the aforementioned factors, but as they apply only to the grounds itself.
In other words, when buying the entire parcel, what would a buyer be gaining from the land itself?
This would include proximity to transportation, the potential use of the land, natural resources, soil, and so on.
Improvement Market Value
Improvement value is simply the value that sits atop the land.
What buildings are on the parcel, what is the use of the building, and what is the income that can be generated from it?
- What has been added to the parcel to-date that provides current and future value to the parcel within the market it exists in?
- What is the cost of potential repairs?
- What stylistic features of the building make it more in-demand?
Improvement value would also depend largely on the demand for the asset type at-hand.
For example, if multifamily properties are scorching hot in the Dallas/Fort Worth area, the market value of the asset could rise regardless of the other influencing factors.
Commercial Property Assessed Value
Secondly, there are property assessed values. These are in place for tax purposes.
Every year, tax professionals, usually representing a county, assess commercial properties to measure applicable dues.
Assessed values are typically more rooted in current, hard property value.
From the size and condition of the parcel and its buildings, to the interior of the building, cost of improvements and repairs, potential income from ownership, and more.
Naturally, some of these determinants are tied to the surrounding market.
Still, while the market does have an impact, a commercial property’s assessed value is based on higher-level market influencers, and therefore is less likely to fluctuate year-over-year compared to a market value.
Assessed property values will also factor much less into property transactions.
They may arise as a point of negotiation justification if a property’s assessed value has dramatically risen or fallen, or if it is far off from the properties market value.
To get to a total assessed property value, you can sum the assessed land and improvements values.
Assessed Land Value
In this case, the land value is merely the tax-assessed value of the actual land parcel, not counting any buildings that sit on the property.
Factors that might influence assessed land value are based on the parcel’s functionalities, amenities, and relationship to nature.
Specific examples include a property’s drainage abilities, accessibility to transportation, and susceptibility to consistent weather damage.
Assessed Improvement Value
Much like that of market value, assessed improvement value determines the tax value of what sits atop a parcel of land.
Which again, would be the value of the buildings and other assets on the property: including property functionality and the potential revenue it could generate for the owner.
How to Find the Value of a Commercial Property
There are a few different routes you can take to find the market and assessed values of a commercial property in the United States.
In certain cases, it may be easiest to hire others to provide you with property values.
In today’s tech-heavy landscape, however, you can simply hop on the computer and run a quick property value search on your own.
Here’s how to do so with Reonomy.
Reonomy Commercial Property Value Search
With Reonomy, you can lookup properties or owners with a bevy of building and lot, sales, debt, tenant, and other characteristics.
The platform then helps in two major ways:
First, is by showing you a property’s tax information.
For any individual property, you can see:
- Historical tax amounts (with year-over-year percentage changes)
- Total assessed value (including the assessed land and improvement values)
- Total market value (including land and improvements market values)
Secondly, Reonomy has readily available real estate comps for commercial assets in every market.
In case you’re searching for an investment property (either as a buyer or broker), you can also access owner contact information on your subject and comparable assets.
Reonomy’s real estate comps can be accessed on their own, or in conjunction with a property discovery search.
When you are in the profile page of any commercial property, there will be a button to view comparables.
By clicking this button, you’ll be given a list of other assets with very similar value.
And note: These properties are not only those actively listed. Your comp list pulls from the entire supply of related properties.
From that list, you can learn about and analyze many other properties in one fell swoop.
You’ll be able to see past sales transactions, including past sales values—which can help with understanding how property values are changing.
Looking at the sales history of multiple similar properties to that of your target, especially those sold recently, can give you a great idea of what the current market value of a property is.
Commercial Property Values by Address
Perhaps the most common way to search for property values is to search by address.
To do so, simply enter the exact address of the property you’re looking to find in the top of the property search page.
When the address appears in the dropdown, you can click it, to which you’ll be brought directly that property’s profile.
Once you’re in the profile page, visit the Tax tab. You’ll be able to see the yearly tax amounts for the three years prior, with year-over-year percent changes.
This is also where you’ll see the total assessed and market values of the asset.
Commercial Property Values by Zip Code
You can also search for property values by zip code.
To do that, enter the Location tab of Reonomy’s search page. Here, you’ll see a search bar specifically for zip code entries.
In this case, upon applying your filter, you’ll see a list of all commercial properties within that zip code.
To narrow down your search, you can add asset type, sales, debt, and owner filters if need be. Once you see a property of interest, you can simply click into its profile page, then take the same steps as mentioned above.
Commercial Property Values by Owner
Another way to look up commercial property values is to search by owner.
In this case, enter the Ownership tab of the search page and enter the necessary owner details.
You can search by owner name, by owner of record (for LLCs), and by owner mailing address.
Once you’ve entered the name of an owner or owning entity, you’ll again see a list of properties that match your applied filters (as you would when searching by zip code).
Scroll through your target owner’s portfolio to an individual property of interest, click into its profile page, and visit the Tax tab.
Public Records Property Value Search
Another way to understand a properties market value is to search through local property sales records to again look at properties that have recently sold.
You can search your local assessor’s online portal to find sales deeds and other records that have been filed in recent months.
While ACRIS Document Search typically serves as the best example of what a public records search can look like, other states and counties around the country also offer very useful search platforms.
- Harris County, Texas (HCAD)
- Maryland’s State Department of Assessments and Taxation (SDAT)
- Broward County, FL
- New Jersey’s “Open Public Records Search System.”
Using any of these sites allows you to see sales documents tied to local commercial properties, working in a similar way to that of Reonomy’s comps.
If you’re a bit more strapped for time, or simply would rather let someone else find a property value, you can turn to a consultant, researcher, or more formally, an appraiser.
CBRE serves as a great example of a company that offers extensive property appraisal services.
Their services include market values, taxation, IPOs, mortgage security, and more.
No matter the case, finding commercial property values does not have to be as difficult as it once was—and getting started only takes a few clicks.