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Important Parts of a Commercial Building to Appraise by Max Shafer
Being an appraiser is equal parts art and science. This can be especially true when appraising a commercial building. While there are some aspects of the building, such as its square footage, age, rentable space, and location that are pretty formulaic to assess, there are some highly elusive features that can be difficult to put a price tag on. For example, how energy efficient is the structure, and how prepared is the building to provide high-quality interior air? To help you sort through some of these more challenging components, keep reading to discover more about 6 important parts of a commercial building to appraise.
Energy Efficient Features
Although energy-efficient features give appraisers fits, there is no denying that they are going to continue to become increasingly important as society looks to become carbon neutral. In fact, as environmental laws continue to evolve, it is possible that buildings with poor energy efficiency may face heavier fines and sanctions in the future.
While features such as solar panels obviously stand out positively when appraising a building’s energy efficiency, there are many other less noticeable features that appraisers must consider, such as:
Durability of the building materials. Will the building be self-sustaining over time, or will it require significant resources for maintenance and repair?
Are there any features, such as a metal screen facade, window treatments, or custom awnings, that can help mitigate temperature without relying on HVAC?
Is the building equipped with water conservation features, such as low-flow sinks and toilets?
When the sum of all of these energy-efficient features are taken into consideration, buildings that are already ahead of the curve should be given a premium over those structures that will require significant renovation in order to get up to date.
When looking at properties such as commercial offices or apartment complexes, it can be easy for appraisers to zero in on the rentable space and forget about the common areas. However, with inflation and rising fuel costs, more people are staying within walking distance of their daily destination, making attractive community amenities critical in the overall value of a commercial property. Carefully assess fitness centers, lunch areas, multi unit mailboxes in the mailing room, parks/lawns, and any other common area to ensure that it matches the quality of the rentable space.
Air Quality Features
Air quality has always been a top priority for allergy sufferers and those with compromised respiratory systems. However, the COVID-19 pandemic made it a full-scale priority for those who own and operate a commercial space.
As a result, it is critical that appraisers check that the building is equipped to ensure the highest quality interior air. Assess the condition of the HVAC ducts and tunnel ventilation dampers. Look and see if there is any mold buildup near the windows or other transitions in the building envelope. Check that the building makes it convenient for occupants to open a window or step outside and get a breath of fresh air, as necessary.
Safety and Emergency Features
Unfortunately, tragedies in schools, churches, malls, movie theaters, and other types of community buildings are occurring all too frequently in our time. Furthermore, the increased incidents of wildfires and other types of severe weather events are occurring with regularity, putting people’s safety at risk.
With these factors in mind, it is crucial that appraisers look at the quality of the building’s safety and emergency features. Is the building equipped with sprinklers and a smoke baffle system? Are the windows, doors, siding, and other exterior features rated to withstand high impact? Are emergency escape routes easily accessible?
It is critical that a building be equipped with the latest ADA features from both a legal and safety standpoint. While the entire list of commercial ADA features appraisers need to look for is quite extensive, some of the most basic includes ramped entryways into the facility, elevators to access all stories of the building, large bathrooms with sufficient railing, and clear signage to where ADA accommodations can be located.
Parking and Other Transportation Areas
Finally, a commercial building, no matter how well designed, is not worth much if the public cannot access it. Therefore, appraisers need to consider the parking lot and other exterior features. Is there ample parking, and is the lot safe and in good condition? For buildings in more urban areas: is the building easily accessible using public transportation? Are the sidewalks in good shape, and is there a place for occupants to park bikes?
Don’t Overlook These Commercial Building Features at Appraisal Time
The role of a commercial appraiser keeps getting more and more difficult as building codes and societal standards continue to evolve. While some commercial building features are relatively easy to assess, others can be quite elusive to pin down. With this in mind, energy efficiency, community amenities, air quality, safety, ADA compliance, and parking are 6 important parts of a commercial building that appraisers cannot overlook.
Max Shafer is a contributor to the Innovative Building Materials blog. He is a content writer for the construction and home improvement industries with an interest in landscaping, outdoor remodeling, and interior design. Max is focused on educating homeowners, contractors, and architects on innovative materials and methods of construction that increase property value, improve sustainability, and create a warm and welcoming ambiance.