What is an Industrial Real Estate Appraisal?

Even though industrial real estate includes a wide variety of categories; the asset class is commonly regarded as one of the easiest real estate property types to appraise. It is not. Factors such as the industrial property type and size, construction characteristics, market and region analysis, assessing territory, and the appraiser’s process and approach to value makes every industrial property appraisal unique with its own set of valuable assets and potential challenges.

A typical appraisal provides a summary of current economic circumstances and market area, a description of the asset including the location and structures, a breakdown of the highest and best use of the property, and a thorough discussion of the assessment methods used in the appraisal. The point of the appraisal report is to communicate an opinion of value of the appraised property and to support that value with validating data.

At the conclusion of the appraisal process, the client typically receives a descriptive report that contains detailed information and supporting analysis and documentation.

An annual review or update of the appraisal should be performed for insurance purposes to avoid inaccurate coverage. A yearly review eliminates the assumption of how much insurance is needed for the property. This is important for investors and owners participating in an insurance program.