3 Tips for Valuing a Commercial Property

3 Tips for Valuing a Commercial Property

Published On: May 26th, 2016Last Updated: May 26th, 2016Categories: Business, Commercial, Developers, Hard Money


Many real estate investors understand the value of walking around a residential neighborhood to gauge the potential investment value of a property. However, fewer REIs place the same importance on walking a commercial property. However, if you know what to look for, you can glean some valuable insight into value of commercial real estate.

Valuing Commercial Property: Typical Vehicles and People in the Area

As you walk through the area, make note of what you see.

  • Do you feel safe as you walk?
  • What kinds of cars and trucks do you see?
  • Is the neighborhood demographic appropriate for the type of business you’re considering buying?

Check the alleys for signs of rodents, homeless camps and other factors that may make a property less than desirable. You can renovate a building but you can’t change its surroundings.

Ease of Ingress and Egress Has an Impact on a Commercial Property’s Value

Speaking of things you can’t change, how easy is it to access the commercial property you’re considering? Look at the traffic flow in and out of the parking lot, entryway and loading area. Would it be easy to access in a car? What about a local delivery truck or a semi with a trailer? Depending on the type of business, tight spaces and a lack of pull-through options might be a deal breaker.

Use of Neighboring Properties in Valuing a Commercial Property

Do the local businesses compliment the intended usage of the property you’re considering? For retail, it’s ideal to have complimentary, but not competing, stores nearby. For any business, you should consider whether neighboring sounds, smells or activities will impact the potential value of your property.

Do You Need a Hard Money Loan in Atlanta?

If you’re looking for a hard money loan in Atlanta, we may be able to help you.

Call us at 404-814-1644 or contact us online to find out whether you might qualify for this type of funding. In the meantime, check to ensure that you meet our loan criteria. Our loan amounts can be up to 65 percent of the after-repaired value of the collateral—and if you use the loan for renovation or construction, the loan amount can be based on the collateral’s improved value.

Read our frequently asked questions and take a few minutes to learn about the hard money loan process.