Property Analysis and Evaluation

Property Analysis and Evaluation

Commercial Real Estate Specialists

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Our group of professionals at One Chicago Commercial is committed to executing a thorough valuation of all properties we find for our investors before presenting them in order to make certain our clients are getting the highest return on their investment. 
There are many different aspects that property valuation entails, our team at One Chicago breaks down this process and evaluates each step below with accuracy and diligence. 

Step 1:

The very first step our specialists do is analyzing the property income and expenses in order to figure out if it is gaining money or losing money. We do this by obtaining rent rolls and profit and loss statements, and using this data we generate a financial pro forma. 

Step 2:

After creating a pro forma for the property we then tour the property and look at the conditions of it such as- is the structure sound, are the windows new, are the units updated, is there a value add component to the property or is it a turnkey, etc. 

Step 3:

We then do a sales comparison approach and assess recently sold properties that are similar to the subject property we are looking at. In addition, we do a valuation approach, which considers the cap rates of properties that are selling so that we can estimate a reasonable market value for the subject property.  
The second part of our property valuation step analyzes the demographics of the surrounding area, where we consider the income of people living in the area. It also shows us how many people rent versus how many people own. If we are looking at mixed use or commercial property we will assess the specific businesses and retailers in the area in order to determine what retailer would thrive at that location so we take into consideration the demand and supply of the current retailers or businesses. 

Step 4:

Looking into the market trends we look at historical data in order to assess what will happen in the market. Based on our assumptions we will let our client know if we believe the property will increase significantly in the next 5, 10, and 20 years. This helps us determine a proper exit strategy and whether or not the client should even invest in the property. If a neighborhoods trends show it has been decreasing in value within the past few years we advise our client that it would not be a good idea to invest here and assist them in finding the best option. 
At One Chicago Commercial we strive for our clients success and take it one step further to find out if it is worth doing anything else to the property. We will consult our clients if we think the property needs work, if we think the property should be knocked down and rebuilt as a different use. When looking at multifamily and mixed use for example we might determine if it would be best to sell off individual units or rent them out, etc. 
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