Commercial Real Estate Appraisal

  Why Your Condo Association’s Master Policy May Be Inadequate — And How a Professional Insurance Appraisal Protects Everyone Condo boards across Florida are facing a perfect storm: rising construction costs, stricter underwriting, lender scrutiny, and growing exposure to underinsurance . If your association hasn’t updated its master policy insurance appraisal recently, you may be relying on numbers that no longer reflect reality—and that can put the entire community at risk. The Hidden Risk Most Boards Don’t See Many associations depend on insurer-generated estimates or outdated appraisals. These shortcuts often miss critical components—labor escalation, ordinance & law costs, regional material pricing, and current code requirements. The result? Coverage limits that look adequate on paper but fall short when a loss occurs. Underinsurance can mean: Co-insurance penalties after a claim Special assessments to unit owners Loan approval issues (Fannie Mae/Freddie Mac compliance) D...

Why Two Commercial Appraisals Can Have Different Values A common question commercial property owners ask is: “Why did two appraisers give different values for the same property?” This is not an error. Commercial real estate valuation is a professional opinion of value based on market data, risk, and property-specific factors—not a fixed formula or automated estimate. Commercial appraisal involves judgment. Two qualified appraisers may analyze the same property and apply different, reasonable assumptions. What matters is whether the conclusions are credible, well-supported, and defensible. Differences often result from assumptions about income and expenses, such as market rent versus in-place rent, vacancy, operating costs, reserves, and lease rollover risk. Risk perception also varies, including tenant credit, lease stability, market volatility, and property condition. Higher perceived risk typically results in higher capitalization or discount rates, reducing value. Appraisers may al...

Retrospective - Prospective -"As Is" Real estate appraisals that deal with different time frames go by different names. Retrospective value appraisals deal with appraisals as of a previous time such as when someone passes away.  Appraisers must report value as of the " date-of-death " of the decedent.  The comparable sales and rents in the appraisal must be on or before the date-of-death. Prospective value appraisals deal with proposed properties  such as an office building not yet built.  A lender needs to know the " value-upon-completion " which is a future date.  For multi-tenant properties, the value via the Income Approach " as stabilzed " requires an additional future date due to the time needed for lease-up. "As Is" Value   All appraisals must report an "As Is" value.  When a property suffers from deferred maintenance , the estimated " cost-to-cure " must be subracted from the value via the sales compariso...