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

San Diego Real Estate…in 2050

Eric-Schneider-AppraiserLast week, Eric Schneider, MAI, ASA, attended LEAD San Diego’s HOT TOPICS program on what the San Diego region will look like in 35 years. The program was lead by Clint Daniels of San Diego Association of Governments (SANDAG), who provided an overview of how San Diego is expected to change and where the growth is expected to occur. His PowerPoint presentation can be found here, but here are the big takeaways on what real estate will look like in 2050.

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3 Common Commercial Real Estate Appraisal Questions

San-Diego-Commercial-Appraisal-QuestionsRecently, we discussed the ways to help prepare for a commercial real estate appraisal, which included providing as much income/expense information as is available and helping the appraiser inspect the entire property.

There are many questions that can be asked regarding a commercial appraisal. Here are some of the more common.

What if I don’t have any income or expense information?

As stated previously, appraisers generally ask for three years of income and expenses. If three years are not available, then provide as many years as you can because some information is better than none. If no information is available, then inform the appraiser and he or she will state this in the report. If there is no historical information, the appraiser will generally use market rent and market expenses, which are based on comparable properties and industry benchmarks.

Do I have to meet the appraiser at the property?

Sometimes, the owner or property representative is out of the area or unavailable to physically be at the property during the appraiser’s inspection. As long as the appraiser has full access to the subject property, then an owner or representative does not have to necessarily be present. However, it is important to 1) let the appraiser know of any important issues prior to the inspection (such deferred maintenance) and 2) be available for follow up in case issues or questions arise after the inspection.

What happens if not all of the property is inspected?

There are some assignments where portions of the property are not able to be fully accessed. For example, in a hotel appraisal or apartment appraisal some of the units may be occupied and unable to be accessed. If you know that an appraiser cannot access the entire property in advance, please let them know. The appraiser will state this in the report and will generally add an extraordinary assumption to the report, assuming that the condition of the areas not inspected are similar to those that were.

Do you have any other questions about the appraisal process? If so, or if you have any need for a commercial real estate appraisal in San Diego County, please be sure to contact us directly. Also, please be sure to check out our YouTube page, where we provide education on the appraisal process as well as answer other frequently asked questions.

Preparing for a Commercial Appraisal: Two Ways to Help Appraisers Produce an Accurate Report

Encinitas-Commercial-AppraiserThere are many components involved in a commercial appraisal. From researching zoning and market conditions to confirming sale and lease data, much of the report preparation is done by appraisers in their office away from the subject property. While this is true, the parties involved with the subject property – whether it is an owner, attorney, accountant, or broker – all play a very important part in helping the appraiser provide an accurate valuation. Here are two ways to help appraisers produce an accurate report.

Property Information

One of the ways to help is to provide as much information about the property as possible, especially if it is an income producing property such as a shopping center or a multi-tenant office. Here are some important items that appraisers will need:

  • Rent Roll: A report showing the current rent information of each tenant is important as it may differ from the lease. For example, the landlord may not enforce rental increases even though they are stated in the lease.
  • Leases: Ideally, it is best to provide the entire lease (as opposed to just the first page with the pertinent information) because it gives the appraiser a chance to review how expenses are handled, information regarding options (if any), and other addenda items such as tenant improvement allowances, free rent, etc.
  • Operating History/Profit and Loss Statement: This includes historical information regarding the subject’s income and expenses (e.g. taxes, insurance, repairs and maintenance, etc.). Generally, an appraiser would like three years of history, year-to-date information, and a projected budget (if available) to look for trends or anomalies. This operating history is typically found in financial reporting software, but can also be found on the Schedule E form of a Tax Return.

Property Inspection

The second way to help an appraiser produce an accurate report involves the property inspection. The objective of the inspection is to take pictures and measurements of the building as well as see the property’s physical and location characteristics (such as deferred maintenance, traffic, surrounding neighborhood influences, etc.).

Typically, it is best for an appraiser to inspect the interior and exterior of the entire property. Therefore, the owner should contact every tenant to let them know of the appraiser’s arrival and that they will be taking pictures and measurements. This may not be possible with all commercial real estate appraisals such as hotel appraisals and apartment appraisals (due to units being occupied or unavailable), so the next best scenario would be to see a representative sampling of each type of unit. For example, if a 20-unit complex includes 10, two-bedroom units and 10, one-bedroom units, then the appraiser should inspect two to three of each type.

Summary

The parties involved with a property being appraised play an important role in helping an appraiser produce an accurate and credible report. Providing as much information as possible as well as assisting the appraiser with inspecting the entire property are important pieces to the appraisal process.

If you have any questions about the appraisal process or real estate valuation, or if you are in need of San Diego appraisal services or valuation consulting, please contact us today.

2014 Mid-Year Update

san diego commercial real estate appraiserIntegra Realty Resources – San Diego, along with its 60+ offices nationwide, has just published mid-year updates to our annual Viewpoint publication – with both a National Overview and over 300 Local Market reports.

In these analyses you will see details about how the San Diego commercial real estate market, as well as markets across the country, is continuing to recover.

Decreasing vacancy rates, moderate/high new construction growth, high absorption rates, and medium/high rental rate growth are all trends revealed in this mid-year compendium of reports.  We’ve also detailed trends across five key property types: office, multifamily, retail, industrial, and lodging.

For a complete look at the data presented in IRR Mid-Year Viewpoint 2014, please click on the links below.

2014 Mid-Year Viewpoint San Diego Office

2014 Mid-Year Viewpoint San Diego Industrial

2014 Mid-Year Viewpoint San Diego Retail

2014 Mid-Year Viewpoint San Diego Multifamily

2014 Mid-Year Viewpoint San Diego Hospitality

Information regarding other markets can be found by clicking here. The national mid-year update can be found by clicking here.

We hope that this market update is valuable to your commercial real estate decisions. As always, if you have any questions regarding our research, our forecasts, or commercial real estate valuations, please contact us directly.

 

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