Where to get daily CRE valuations like "Zestimates"

Question

My wife & I love the Zillow Zestimate graphs,

that are FREE and updated DAILY on some properties,

but for CRE on Loopnet or another site,

how can we research valuations?

Joel Owens · Answer

John,

In commercial there are tons of specialties within the sub asset classes.

The commercial brokers who are specialists in that asset class usually know almost daily values because they are in tune with the market. As an example I review over 1,000 properties a week with NNN. After awhile I know variances that go by state, deal size, tenant type ( credit investment grade rated, non-investment grade, private, large franchisee, small franchisee, mom and pop), demographic levels for (income levels, population levels, and traffic counts), tenant brand ( Fresnuis, Davita, Walgreens, CVS, Auto Zone, etc.), cap rates, years remaining on primary term of the leases, which ones have rental increases, which ones are absolute NNN, NN, Ground lease, etc.

The property having a small and large anchors around it close to the corner and positioning with sightlines all affect value.

If you just want an evaluation of a property you already own look into a commercial BPO for hundreds of bucks. Not as detailed as an appraisal but gives and idea of current local market.

If you are wanting to know how to evaluate properties then usually buyers work with a commercial broker. They form a long term investing and even friendly relationship and get help along the way to try and minimize mess ups and increase odds of success.

Taylor L. · Answer

I'm not sure it exists. CRE is valued based on market cap rates and the individual property's NOI. Only property owners have that NOI information. Additionally, at least in my area, the Zestimate is quite inaccurate

Joel Owens · Answer

1,000 properties a week.

No secret just experience doing this for 17 plus years. After awhile it's like putting your shoes on, brushing your teeth, etc. You just analyze properties like breathing air it's almost involuntary. Very few make it past my initial quick glance and then I spend time on ones that catch my eye.

The ones I like for my clients often get multiple offers because the experienced brokers and buyers who know what to look for tend to like the same properties. The mediocre to crap properties often get sold to inexperienced buyers that go it on their own to try and save money but that's hardly ever the case. It's just that in commercial you are not buying a house but putting out much larger amounts of money at a time so a mistake can be amplified big time.

John Acheson · Answer

THANK YOU EVERYONE for your replies :)

I've moved on to Deferred Sales Trust

over 1031ing and getting out of condos

and possibly into land development...

Joel Owens · Answer

Use Google or similar search engine for Ken Mapp Retail Condos

He focuses on those and likely has some ideas for your strategy.

I don't focus on retail condo's because price is too small to be worth my time transacting.

Instead of full appraisal at 3,000 there are companies that do commercial BPO's usually for around like 200 to 300 bucks per property.

Costar has data as well but you pay for it. There is the saying you have to spend money to make money and it's a saying for a reason.

John Acheson · Answer

I'm sorry for miss-communicating my scenario,

we're using LoopNet to search vacant properties,

to owner occupy and build our reselling businesses.

So the reason we like the Zestimates

is that they show up for vacant properties.

I'm mentally ill & physical disabled,

so I'm talking about the lowest priced retail units

that are almost ALWAYS VACANT CONDOs in strip malls.

The bank charges $3,000 for an appraisal,

so how to get a good number without just

ballparking the square footage sold comps

that are hard to find for small retail condos.

I don't have a team or other people that can help,

just a DiY guy that wants to buy a retail condo,

for the lowest possible price, build a retail biz,

then flip the business with condo to one buyer.

Does this make sense?

Luke Grogan · Answer

@John Acheson

Start calling and talking to brokers and find a couple that you click with. Call and talk shop to see what is selling, where the market is, and ask for some data. I have a couple that will send me the CoStar reports and that will help you get a sense for your markets/sub markets.

You can see who is buying and selling, what multiples they’re getting, and who is representing buyers/sellers. This will help you figure out values and who to network with.

Ronald Rohde · Answer

You can come up with your own calculator, but it has to be within a narrow class. Based on market rents, sq ft, class of building, I can give you office or retail estimates, a lot of retail estimates rely on alcohol sales in Texas to calculate gross, then you can estimate the rent they are paying.

Thripura Vemireddy · Answer

@joel Owens

You give lot of valuable information on commercial properties.

What is the secret that you review 1000 properties per month, it comes to 3 mins for each property on average.

Do you have any software? You give the property address and it gives the basic results?

Thanks

Reddy

Where to get daily CRE valuations like "Zestimates"

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