Regents La Jolla Multi-Family Property Appraised by Integra – San Diego

The subject property consists of 333 individual condominium units within a 574‐unit development known as Regents La Jolla. The 333 subject units are currently operated (rented) as luxury apartments. The improvements were constructed in 1999/2000 and a condominium map was recorded in 2005. 241 of the units in the project were sold as individual condominium units and were not included in this appraisal. The site area (for the
entire 574‐unit development) is 8.49 acres or 369,824 square feet. We valued the subject on an as is leased fee (rental) basis, as well as on a bulk basis assuming condominium sell‐out. 235 of the 333 units have been upgraded with superior quality interiors since the date of original construction. Appraisal done for a financial institution.Photo

Apartment Appraisal in Pacific Beach, San Diego

Pacific-Beach-Apartment-Appraisal-Crown-Point-San-DiegoIRR San Diego has completed a commercial appraisal of an apartment property located in the community of Pacific Beach in San Diego. This multifamily property consists of five dwelling units built in 1970. The building, which is three stories and has approximately 4,020 square feet of rentable area, is located on a 0.08 acre site. The property also has five covered parking spaces, five storage units, and a laundry facility. As of the effective appraisal date, the property is 100% leased. The purpose of this commercial valuation was for loan underwriting purposes for a lender.

If you are in need of a multifamily appraisal, please contact us today at 858.259.4900 or via email at sandiego@irr.com. Also, for market trends on San Diego apartment properties, we invite you to download the latest publication of Viewpoint, the most comprehensive analysis for 2015.

2015 Viewpoint – San Diego Market Update

Hotel-Appraisal-858-259-4900We are pleased to present copies of our recently released IRR Viewpoint 2015, Integra Realty Resources’ signature publication.  In this annual edition, we provide market value trends for investment-grade real estate across the San Diego market. Read More

Multifamily Appraisal in North Park, San Diego

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IRR San Diego has completed a commercial appraisal of an apartment property located in the North Park community of San Diego. The multifamily property contains 8 dwelling units that total approximately 6,100 square feet. Each unit has two bedrooms and one bathroom. The improvements were constructed in 1950 and were 100% leased as of the effective appraisal date. The building is located on a 0.16 acre site. The purpose of this commercial valuation was for loan underwriting purposes for a lender.

Integra is one of the leading apartment appraisal firms in the San Diego. We provide our multifamily valuation expertise for a variety of purposes, including estate planning. If you have any questions regarding apartment appraisals, cap rates, or market conditions, please contact us today.

The Difference Between Gross Income and Effective Gross Income

Potential-Gross-Income-Effective-Gross-Income-San-Diego-Real-Estate-AppraiserIn appraising income-producing residential properties (such as apartments), gross income multipliers are used as a method of determining an opinion of value. Depending on your area, however, the multiplier can be based on potential gross income or effective gross income. Here is the difference between the two.

Potential Gross Income

Potential gross income (also known as PGI or gross potential rent) is the total revenue a property could generate if 100% leased at market rent. This may or may not be what is actually happening with the subject property, but many times this is not the case. For example, some rents may be over or under market, or the property may not be 100% occupied. Nevertheless, PGI reflects the the most annual rent a property would collect.

Effective Gross Income

Effective Gross Income (of EGI) is the amount of income a property generates after other factors are considered. Depending on the property type, the first factor are expense reimbursements, which are operating expenses that are paid for by the tenant. This could include a portion of the expenses (such as real estate taxes and insurance), or, in the case of an absolute net lease, all of the expenses. Expense reimbursements depend on the terms of the lease, but in the case of multifamily properties the tenant is generally only responsible for paying their pro-rata share of the utilities.

Another item to consider is vacancy and collection loss. Vacancy occurs when all or a portion of the property is not occupied, while collection loss is an estimate of how much rent is expected to not be collected during the projection period. This is typically estimated based on the subject’s historical performance, comparable properties, and/or industry benchmarks.

The last item to consider would be other income, which can include parking, laundry income, vending machines, and other types of income not included in the rent. Similar to vacancy and collection loss, other income is typically based on historical figures and comparable properties.

Summary

In short, potential gross income is the total rent a property could generate is 100% leased at market rent, while effective gross income is a net figure that considers expense reimbursements, vacancy and collection loss, and other income. In estimating these two figures, especially EGI, it is best to determine what income is affected by vacancy. For example, some other income (like rent from a billboard), is not necessarily affected by occupancy. However, items such as expense reimbursements could be affected if there is a higher than typical vacancy rate. When performing due diligence on a property, an appraiser would look at both historical numbers and the property’s competitors in estimating market value for the subject.

If you have any questions about income, multifamily properties, or are in need of a commercial real estate appraisal, please contact us today.

Recent Mixed-Use Land Appraisal in La Jolla, San Diego County

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Integra Realty Resources – San Diego has completed an appraisal of commercial land located in La Jolla, San Diego County. The property consists of three contiguous parcels that total 32,139 square feet, or 0.74 acres.  The property is zoned LIPD-3, La Jolla Planned District Zone 3, which permits retail, mixed-use, and multifamily uses with a density up to 29 dwelling units per acre. Based on the subject’s size (and excluding other development regulations), this equates to about 21 units. The purpose of this commercial land valuation was for loan underwriting purposes for a lender.

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