037. How to Determine the Value of Commercial Real Estate Investments

How to Determine the Value of Commercial Real Estate Investments

Today, we’re going to be talking about the 4 main ways that commercial real estate is valued. When determining the value of residential real estate, investors have a pretty easy time. You simply log into the MLS or check Zillow for comparable properties in the area and utilize the price per square foot to determine the value of the asset you’re reviewing. Analyzing commercial real estate, on the other hand, isn’t quite as simple.

There are four common ways to determine the value of commercial real estate:

  • Sales comps

  • Cap rates

  • Replacement costs

  • Gross rent multiplier

So, here’s how to determine the value of commercial real estate.

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Tyler Cauble - Founder and President of The Cauble Group in Nashville, TN

About Your Host:

Tyler Cauble, Founder & President of The Cauble Group, is a commercial real estate broker and investor based in East Nashville. He’s the best selling author of Open for Business: The Insider’s Guide to Leasing Commercial Real Estate and has focused his career on serving commercial real estate investors as a board member for the Real Estate Investors of Nashville.