The Commercial Appraisal Process: How We Determine Your Property's Value
For those who have questioned how the value of a commercial property is determined, you're not alone. At Daly Appraisal Service in Massachusetts, our expertise lies in commercial appraisals. In this article we’ll outline the process, and walk you through the most important factors and considerations that shape the valuation of your commercial property.
Comparable Sales Analysis
A primary method we utilize in appraising commercial property is the Comparable Sales Analysis, commonly termed "comps." In this technique, we inspect properties that have recently sold within a proximate or analogous commercial district. These "comparable properties" offer a foundation for evaluating your property's value.
To ensure precise comparisons, we regard factors such as:
Location: Proximity to transportation hubs, business districts, and local amenities.
Size: The total area of the property, including the number of units or offices and utility spaces.
Age and condition: How old the property is and its prevailing state, inclusive of any modern renovations or enhancements.
Lot size: The magnitude of the land upon which the property stands, as this can deeply influence its value.
Timeframe: We spotlight sales within the prior six months to one year for topicality.
Market Trends
Commercial real estate markets are perpetually evolving. Present market trends and conditions are paramount in our assessment. Variables like demand and supply, interest rates, and prevailing economic conditions can sway property valuations.
Property Features and Upgrades
Every commercial property boasts unique attributes. Features such as:
Advanced security systems
Upgraded office facilities
Modern conference rooms
Energy-efficient structures
Parking facilities
Landscaping
All these elements can amplify your property's worth.
Neighborhood and Location
The dictum "location, location, location" is incredibly pertinent in commercial real estate. The property's placement and its surrounding neighborhood substantially influence its value. Aspects like business growth prospects, safety levels, access to major highways, and proximity to commercial hubs can dramatically shape your property's valuation.
External Factors
Occasionally, external dynamics beyond one's influence can modify a property's value. Elements like shifts in local business regulations, proximate commercial developments, or infrastructure upgrades like new roads or public transit expansions are integrated into our appraisal.
Internal Condition and Maintenance
The inner state of your commercial property is vital in our appraisal approach. We evaluate aspects like:
Structural soundness: The state of the foundational structure and exteriors.
Mechanical systems: The status of the HVAC, plumbing, and electrical configurations.
Cosmetic refinements: The condition of interiors, fixtures, and overall decor.
Recent Sales and Listings
We also ponder over other properties that are either currently listed or have been recently transacted. This perspective helps us comprehend your property's standing in the existing market landscape.
Appraisal Standards
At Daly Appraisal Service, we adhere to strict industry norms and guidelines such as those set forth by the Appraisal Institute and the Uniform Standards of Professional Appraisal Practice (USPAP). This adherence guarantees that our evaluations are impartial, precise, and executed with utmost professionalism.
Final Appraisal Report
Upon examining all these components, our results are consolidated into a comprehensive appraisal report, which will consist of:
A detailed description of the property.
A catalog of comparable properties utilized in the analysis.
A justification of how variances between your property and the comps were addressed.
An overview of the property's condition and potential enhancements or repairs.
A conclusive estimated value for your property.
Conclusion
Deciphering the valuation process of your commercial property can equip you with a clear perspective of its worth. At Daly Appraisal Service, our aim is to offer a meticulous and unbiased estimate of your property's value. By factoring in elements like comparable sales, market tendencies, property features, location, and external influences, we ensure a rigorous and just appraisal. Should you harbor any queries or concerns about the appraisal methodology, kindly get in touch with us. Your clarity and trust in the procedure are crucial to achieving a satisfactory result.
Waterproofing once-dry basements is an offshoot of all this rain
Many homes in New England have unfinished basements. Heating systems and water heaters are often down there. Some house washers and dryers and the odd artificial Christmas tree.With the steady rain of 2023, many of these seldom-used spaces are getting wet, sometimes with serious consequences. High water can knock out heating systems and water heaters that sit on the ground. People who keep plastic bins of old papers and photos have seen them get damp and moldy or wet and destroyed.Companies that perform basement waterproofing have seen a surge in inquiries and bookings this year. Even if your mechanicals are safe, it's a good idea to waterproof your basement as trapped moist air can cause rot in wooden structural elements and mold in the living spaces above the basement.A recent Boston Globe article highlights some of the approaches homeowners are taking: sump pumps, interior and exterior drains, dehumidifiers, vapor barriers.Read the whole article here: A side effect of intense rainfall
Globe Editorial - Boston zoning code should be revamped
A recent Boston Globe editorial agrees with Mayor Wu's assessment that the city's zoning code is “long, dense, and internally inconsistent in ways that make planning confusing, unpredictable, and costly.’’The consultant from Cornell who analyzed Boston's arcane code (and who is being hired to spearhead the revamping) gives the following example:“A homeowner who wishes to put a gabled dormer on a roof or a small business owner who wants to add a takeout component to their restaurant may pay $10,000 and undergo a six-month review process to achieve what in other places might have a one-day approval turnaround time and cost less than $100. The costs of zoning compliance make Boston less affordable, because those costs get internalized or passed on, including to tenants and customers.’’The Globe editorial writers agree that the code is a problem but also wonder if there is the political will in the legislature to change it. The editorial notes that "every line in that 3,791-page code is there because someone had the political muscle to put it there or today benefits from it."
Multiple photographic exhibits show Boston through the years
The Boston Globe reports that there are three photographic exhibits at the Boston Athenaeum that show Boston through the eyes of various photographers from the 1950s to the present. The shows run through December 30, 2023 and feature the work of Berenice Abbott, Irene Shwachman, Paul Caponigro, Nancy Gonzales, Victoria Kutta, Rose Narcisee and Axander Vazquez. Boston Athenaeum website has all the details.
Fed keeps interest rate unchanged
The US economy appears "stronger than previously predicted" according to the Washington Post and as a result, the Fed has not changed the base rate after several increases in previous quarters.The base reserve rate will remain at 5.25-5.5%, the highest in 22 years. Is a recession now looming? Some economists think so. Are Americans feeling great about the economy? No.“Concerns about inflation are still something that I hear when I talk to people,’’ Boston Fed President Susan Collins told The Washington Post last month. “From my perspective, what price stability means is a level of low, stable prices where people aren’t really focused on it. … And people are still quite focused on it.’’
Affordable homeownership is a lottery system in Boston
In a Boston Globe blog piece, Megan Johnson writes about the experience of the affordable homeownership lottery process in Greater Boston. She writes of her own experience trying to purchase a condo as a single self-employed person as well as that of Youssef Haijjia, a married father trying to find a place large enough for his family.There is a finite number of affordable ownership units in the Boston area - some are mixed in with market rate condos and some are all-affordable developments. The demand for these units is so high that there is a lottery system in place. Applicants have to repeatedly apply and submit documentation to show that they still qualify. A raise can put the applicant over the income limit and a cut in hours can put them under the income range. Unlike income-restricted apartments, however, the owners are not then evaluated for income-eligibility, meaning that as long as the applicants qualify at the time of the loan funding, they can go on to earn market-rate incomes.Not addressed in Johnson's piece is that although the owners get all the burdens of homeownership - like the broken washing machine that flooded her and a neighbor's unit in the first few weeks of her condo owning journey - they don't enjoy one of the great benefits - normal accrual of equity as the home increases in value.Affordable ownership units come with an agreement that maintains permanent affordability and any equity that the same unit would accrue on the open market is shared between the non-profit developer/manager of the unit and the owner. Owners in affordable programs can see a profit when they sell their home, but it is far less than a non-restricted unit. The wealth-building aspect of shared equity programs tends to come more from paying down the mortgage rather than from gaining from the house's increase in market value. Of course, the owners don't have to sell it; they can live in the home for their lives and may will it to their heirs upon death.
Wu to overhaul Boston's arcane zoning code
Boston's Mayor Wu has proposed a wholesale overhaul of the city's complex zoning bylaws. She announced it a Chamber of Commerce speech, signaling that she believes the changes will be helpful to business. The news was reported in the Boston Globe.Rather that the current neighborhood-based model, the new zoning will focus on "squares and streets," making mixed-use hubs along main corridors near transit - sometimes straddling two neighborhood.The BPDA will look at reforming zoning by-laws so that fewer projects would require a variance and would instead be granted by right.A Cornell professor who consulted on the review and will work on the revision called Boston's current zoning "bloated, outdated, inconsistent and inequitable" and says Boston's code - at 4,000+ pages long - is too much. Nashville's zoning bylaw is 349 pages long and Portland, Oregon's is 1,830 pages.Neighborhood groups and individual owners are concerned. Right now they can kill a project they don't like or at least stall it with complaints to the Development Review Board. With more uses provided by-right, they will lose that veto power and with it, the power to have a say in how their neighborhood develops.
Public housing has surprisingly high eviction rates
MassLive analyzed a recent report by Eviction Lab, a group that analyzes eviction and housing issues nationwide.Many think that once a household gets into public housing, they can stay there for life. That's not true, as if the household income increases, it may become ineligible for the apartment.Many also think that there's no way to evict a family from public housing. Equally untrue, and while public and private landlords have roughly the same eviction rates overall, public housing has a higher rate of repeated eviction filings (not necessarily resulting in actual eviction) against the same household at the same address.Most of the eviction filings result from non-payment of rent, rather than lease infractions. Public housing rent (which includes heat and water) is capped at 30% of the household's income and the Eviction Lab article states that the average household income nationally for a family (it doesn't say the size of the family) in public housing is $16,398. Thirty percent of that is $4,914 a year or $410 per month.The report states that housing agencies that operate public housing are evaluated on their rent collection, which leads to higher eviction rates.In Massachusetts, according to the report, 35% of public housing residents who received eviction notices received them repeatedly as opposed to 25% of private landlords. Malden and Lowell had the highest repeat eviction rates in the state with Springfield, Lawrence, Worcester and Boston filing repeat eviction notices at rates below the state's average.
Downtown Springfield Landmarks to be Redeveloped
The City of Springfield recently announced that a Chicago-based company will be taking over several well-known buildings in the downtown area. They are the Masonic Block (sometimes called the "Clock Tower Building" at the corner of State and Main), the Colonial Block (at 1139-1155 Main St) and a small office building at 11-21 Stockbridge St.The company, McCafferty Interests, Inc. will invest about $68 million in the project and the outcome will be to change vacant office space into 90 new residential apartments and ground floor retail.The company has experience renovating historic buildings, which is what attracted the city's leaders.The new spaces are expected to be ready for tenants in 2025. You can read the whole article from MassLive here: New Development Coming to State and Main in Springfield
100k+ Mass homes uninsured and at-risk of flooding
114,552 properties in Massachusetts are at risk for flooding but aren't in a FEMA designated flood zone, according to a Boston Globe article, quoting a report by First Street Foundation, a non-profit that studies building risks across the country.Flood insurance is required for properties located within FEMA's flood zones, but most homeowners aren't aware that their policies likely won't cover flooding, even as flooding becomes more of an issue.While storms in Florida make national headlines, the northeastern US has the highest risk of loss potential, due to the density of housing and lack of adequate flood prevention measures. Just one inch of rain can cause about $25,000 in damage, according to the article.And when homeowners do purchase flood insurance, they may be surprised to learn that coverage maxes out at $250,000 for a 1-4 unit home.
Despite the rain, it's been a pretty good summer on Cape Cod
The many rainy days of summer 2023 kept some businesses on Cape Cod from meeting sales goals, but the Boston Globe reports that overall, most businesses had a pretty good year.Paul Niedzwiecki, chief executive of the Cape Cod Chamber of Commerce, says 2021 and 2022 were record breaking years, and predicts 6 million people visited Cape Cod this summer.
Americans living in areas prone to natural disasters may not be able to get insurance coverage
The Boston Globe shared a story from the Washington Post informing readers that major home and auto insurers are pulling coverage in those areas most prone to loss from hurricanes, tornados, wildfires and flooding. All the things that most people rely on insurance for.The increased risk of loss from natural disasters means insurance companies lose money on their policies. In the first six months of 2023, there were $40 billion in insured losses from natural catastrophes. This is the 3rd most expensive January-June on record.Where does that leave people who must insure their homes and autos when there are no policies to be had?
"60% crime, 40% history" - Two Boston crime tours
If you've seen all there is to see on a Boston Duck Tour, you might like to try a crime tour. You can choose between a trolley tour led by former Boston police lieutenant Joe Leeman and a Mafia-tour led by South End native Tom Collins, who toyed with becoming a gangster before choosing a life making special effects in Hollywood.Leeman describes his tours as "60% crime and 40% history" and combines Samuel Adams with Whitey Bulger to show how they impacted Boston's landscape.Collins' tours are called "Mobsters and Lobsters," and leans towards Boston Italian mafia, but also includes the Boston Strangler and the ubiquitous Whitey Bulger. It ends with a lobster dinner at Venezia restaurant in Dorchester.This recent article in the Boston Globe shares some snippets and photos from Leeman's tour.
Mortgage rates highest in 21 years
The average 30-year fixed mortgage is now at 7.09%, the highest since 2002. The NY Times reports that analysts predict that the rate will start to fall towards the end of 2023.The housing market in the US is now stagnant. Owners with low mortgage rates don't want to sell and many buyers don't want to lock in a rate that's double what it would have been a few years ago.Home sale volume is low across the country and that shortage of supply is keeping prices of existing homes high and rising.While existing home sales are falling, the sale of new construction is rising. However, most of those newly built homes are in the luxury range, which is most profitable for homebuilders.Read the full NYTimes report here:Interest Rates at 21 year high
Poor water quality on Cape Cod could affect residents and tourists
A recent Boston Globe article reports that 90% of the estuaries on Cape Cod had unacceptable water quality in 2022. Old septic systems that are leaking nitrogen into the water.Although many towns on the Cape are currently planning to replace old septic systems, it will take decades for the changes to impact the water quality.Read the full article here: Pollution is threatening Cape Cod
ADUs can help the housing crunch, says builder
Scott Bailey, a co-founder of Bequall, a California based building firm that specializes in constructing accessory dwelling units (ADUs), published an editorial in the Boston Globe recently. In the piece, he lists changes he wants made to an ADU bill put forward in the MA Legislature in 2023.He takes issue with five components of the bill as it stands. The minimum lot size is too large and he suggests using setbacks as the main zoning requirement to keep the character of the neighborhood. The bill only allows for ADUs for family members with disabilities and seniors, rather than having anyone be able to use them. He says the minimum build size of 450 SF is "arbitrary" and should be increased. The bill requires owner-occupancy in ADUs, and he disagrees with that requirement. Lastly, he'd like the parking space requirement lifted, as many ADUs could be built close to public transit.Wonks and officials have been saying "Massachusetts needs 200,000 new housing units in the next eight years" and this is, says Bailey, a good way to get there.
Is Massachusetts finally ready to make changes to Boston Harbor and coastal communities?
Bill Golden, former MA Senator, former city solicitor for Quincy, and one of the founders of the EPA, wonders if the time has come for the various political bodies to work together and protect Boston Harbor and 15 coastal communities in MA from more flooding.In an op-ed in the Boston Globe, Golden details how he used his position as Quincy's solicitor to get the Harbor cleaned up. He believes a Boston Harbor Coastal Resiliency Authority is the answer and urges city and state officials to act now.
Water changing the Earth's rotation
A New York Times article details the strong link between groundwater extraction and the Earth's drifting axis.The extraction of ground water (used for residential drinking water and to support crops in the West during droughts) causes land to sink, which can lead to buildings on that land to shrink too.You can read the whole article from the NYT here: Water depletion and the Earth axis.
MA home sales volume lowest since reporting began in 2004
The Massachusetts Association of Realtors (MAR) has released the year-over-year data on home sales in the state.While median sale price of single families inched up by $25,000 statewide, condos stayed the same. The huge drop was in the number of homes listed and sold.June 2023 had the lowest number of homes for sale - both single-families and condos -- since MAR started collecting this data in 2004.See the chart below for all the details:7.28.3
Can someone just build a house on your vacant land? It happened in CT
A Connecticut property owner recently learned that a vacant parcel of land he owned was vacant no more and a 4,000 SF, $1.4 million dollar house was being built upon it.Daniel Kenigsberg, MD had grown up in the house next door to the parcel in question, which had also been owned by his family. Dr. Kenigsberg inherited the vacant parcel and hoped that one day his children might like to build a house there.However, he learned in May of this year that someone else was building a house there. The land transactions that allowed this to happen appear to be part of an international scam. A "Daniel Kenigsberg" of South Africa gave power of attorney to a CT lawyer who then sold the lot from the South African Kenigsberg who may or may not exist, but who is nonetheless not the Kenigsberg who really owned the land, to an LLC for $350,000. One of the principals in the LLC is the attorney who represented the "South African Kenigsberg". The LLC quickly got building permits and got to work.The real Daniel Kengisberg is suing the developers and the attorney and part of the lawsuit demands removal of the structures and materials, returning the property to the condition it was in prior to the defendants' trespass.You can read the whole article on CT Insider.