Properties

Mainstream Income Properties

 

The mainstay of commercial real estate, properties that generate traditional net operating income include these four major classifications. Of interest to institutions, investors and lenders, the appropriate analysis typically includes developing a detailed understanding of income and economic forces, and providing a forecast of future probable cash flow, including multi-scenario analysis.

These properties provide the infrastructure of modern society, fulfilling special purposes for housing, health care, education and recreation. Often lacking an income approach to valuation, land value and cost become driving economic influences.

Land is the fundamental commodity of real estate – the residual value recipient for resolution of supply and demand forces. A fixed commodity, there is no replacement and no new creation. Valuation requires study of supply, demand and transaction prices.

Special purpose properties fulfill specific requirements for users and market demand. Often not well understood or frequently transacted, their analyses may involve economics, cost, or alternative substitution options.