Intrinsic Value a factor in Commercial Sites

By
Commercial Real Estate Agent with Northland Real Estate

With the current destabilizing trends in value throughout the commercial market it is important to acknowledge the intrinsic components that may add to or supplement value within the marketplace. 

Many factors effect value other than the obvious relative to location location location.  While location is ultimately a primary factor, the smaller issues my overplay or underplay the location card, often in dramatic ways or sometimes in a more subtle manner.  Examples can range from the aspect of near corner verses far corner at an intersection which is signalized or non signalized, depending upon the arterial speed, turn lanes, the location or absence of curb cuts can undermine a perfectly good business location.  Research has determined in different situations, the consumer will make a decision regarding a commercial product selection based on a 1-3-5 second sign interaction or logo identification.  Depending upon on the street speed, traffic flows, turn lane access and signalization, a buy no buy decision is often made on such short order that is becomes to late to access a site and takes advantage of a commercial product before the site becomes inaccessible or traffic dictates a passby.  The suggestion and passby may actually enhance a secondary competitive location further along the same arterial, thus competition located adjacent or nearby may be enhancing to both or all parties in some cases.  Thus, once in place, the sign placement, orientation to driveway or alternative access points, facade signage, drive-thru accessibility, all have value in place whereas new constriction may not be able to afford or have the opportunity to access these intrinsic opportunities in place with existing or grandfathered construction.      

Comments (4)

Craig Cooper
Chase International Real Estate - Tahoe City, CA
Creating-Preserving-Growing Wealth in Real Estate

Well said and a good reminder that many features can have value that are not always considered. I have a commercial listing offered at just under $500K where there is a grandfathered sign which can't be repeated, and the replacement value of a new building on that site would be $900K. Nice reminder to keep in mind.

Oct 31, 2011 08:13 PM
Greg Herbert
Northland Real Estate - Eugene, OR
CCIM SIOR

Hi Craig,  just had a meeting this morning with a prospective client who turned out to have intrinsic net value in an idea present, equates to intellectual as well as bricks and stones.  Thanks for the comment.  GH

Nov 04, 2011 11:03 AM
Lynn B. Friedman CRS Atlanta, GA 404-939-2727
Atlanta Homes ODAT Realty - Love our Great City - Love our Clients! Buckhead - Midtown - Westside - Atlanta, GA
Concierge Service for Our Atlanta Sellers & Buyers

Dear Greg -

Access is a very important factor in the success of a sale - whether commercial or residential.
Lots of factors to be considered as Craig Cooper (#1) says above.

Have a happy day -
Lynn

Nov 21, 2011 07:02 PM
Greg Herbert
Northland Real Estate - Eugene, OR
CCIM SIOR

Thanks Lynn,  Just did a site visit yesterday with a national for a potential assemblage, access helped seal the deal.  Greg

Nov 22, 2011 11:04 PM