Comm'l. Real Estate appraisals: team effort garners best results

A comprehensive, accurate appraisal is a cornerstone of the due diligence process when it comes to commercial real estate deals. It is important to remember, however, that the appraiser has no vested interest in whether the purchase is made. Rather, it is the broker, buyer, or seller who want the deal to go through, and each can add significant value to the appraisal process when they work together as a team. Much of the documentation required by the appraiser is similar to that of the lender. However, where the documentation that is accessible to the appraiser is not public record, it needs to be supplied by the relevant team member. Items requested by the appraiser might include the following: blueprints, site plans, surveys, aerial photographs and drawings. Information about surface, subsurface, aerial easements. Data about wetlands. Analysis of environmental issues. A market analysis, including rent and occupancy trends and the area's capacity to absorb new developments. Comparable sale or lease data. Lease summaries of existing tenants. A minimum of three-years' income and expense records, preferably prepared by a certified public accountant. A list of "proposed" improvements if the property is to be appraised "as complete." For new construction: approval documents, cost information, building and site plans, and timing. For renovations: description and cost of proposed reconstruction. When buyers, sellers, and brokers cooperate, the depth and accuracy of the appraisal itself is enhanced. This cooperation benefits everyone involved in myriad ways - including a more accurate and timely appraisal. Rob Gilman, CPA, partner Anchin, Block & Anchin LLP, New York, N.Y.