Commercial Property Appraisal Process - Understanding Leases and Cap Rates (In-Person, Live Stream and Recording)
May 25, 2023
9:30am-3:00pm
Member Fees: $265 (In-Person); $365 (Live Stream); $530 (Recording); $100 Add On Recording Fee with In-Person or Live Stream Registration
Non-Member Fees: $465 (In-Person); $565 (Live Stream); $730 (Recording); $100 Add On Recording Fee with In-Person or Live Stream Registration
Please note: If you participate in-person or by live stream via Zoom, we will email a certificate to you following the program. Certificates will only be emailed to registered attendees. If you register for the recording, we will not be able to provide a certificate because we will not be able to track attendance.
Louisiana Real Estate Appraisers Board has approved this program for 4 credit hours (For In-Person and Live Stream Registration).
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I) PRICE VS. VALUE – Define and Discuss
Objective: Learn the difference between the price concluded by real estate agents and the opinion of value concluded in appraisals.
II) IDENTIFY OWNERSHIP INTEREST
- Fee Simple vs. Leased Fee vs. Leasehold
Objective: Learn the impact ownership interest has on value.
III) LEASING AGREEMENTS – What is subject’s actual income or potential income?
- Discuss specific lease terms
- Relate lease terms to market terms
- Sample Lease Questionnaire
Objective: Learn the meaning of income and expense sharing terminology in leases, along with other pertinent lease terms in order to determine the actual net operating income to the ownership or lessor. This is necessary to determine if the lease is at market and ultimately the impact of a lease on value.
IV) POTENTIAL PURCHASER
Use physical and financial information to determine the most likely purchaser
Objective: Understand the Highest and Best Use of the subject property.
V) ANALYZE COMPARABLE DATA
- Physical Analysis of Comparable Data
- Financial Analysis of Comparable Data
Objective: Learn the method of breaking down a sale into comparative units and applying these meaningful units to the subject in valuation techniques.
VI) OFFICE BUILDING CASE STUDY
Analysis of Most Probable Price based upon Sales Data and Income Stream
- Analyze Sales - Determine Value Based upon Sales Price/Square Foot
- Analyze Lease Comparables and Determine Value Based upon Three Most Common Capitalization Techniques:
- Gross Rent/Income Multiplier
- Effective Gross Rent/Income Multiplier
- Overall Capitalization Rate – extraction and introduction to built-up rate
- Reconciliation of Value Conclusions
- Discounted Cash Flow Analysis introduction
Objective: Use the information presented in a case study scenario to conclude a probable price of an office building property through valuation methods.
Lenders and credit team members
Cheryl Bonnaffons Bella is a General State Certified Appraiser in the State of Louisiana and the State of Texas. She has earned both the MAI and AI-GRS (General Review Specialist) designations through The Appraisal Institute. Cheryl is an active member of the Local and State Chapters of the Appraisal Institute, serving in various State and Regional offices over the years including La. Chapter President in 2013. She is also a member of the Greater Baton Rouge Association of Realtors. In 2015 Cheryl Bella was appointed by the Governor of Louisiana to serve as a member of the Louisiana Real Estate Appraisers Board. In 2018 Cheryl became an AQB Certified USPAP Instructor.
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