What is a pricing opinion?
A pricing opinion is commonly known as a Broker's Opinion of Value ("BOV"), and not only provides you with an estimated price you could potentially receive for your commercial investment property within current market conditions, but also includes sale prices and rental rates for comparable investment properties in your area. The pricing opinion is computed using your current Net Operating Income, or "NOI", and based on market CAP rates for your particular property type, property class and location. It is the first step in determining your property's value and is not an official appraisal.
Other considerations when trying to value your investment property
A Broker's Opinion of Value is intended as a useful starting point to help you determine an independent and unbiased assessment of what your commercial investment property might actually sell for in today's market. Merely comparing your property to other recently sold properties can be very misleading, as there are many "behind the scenes" factors that play into the real value of a retail strip center, such as actual rental rates and occupancy at the time of sale, the creditworthiness of the current tenants, as well as any concessions that may have been in place. This is why it's important to work with an experienced commercial broker who knows all of these factors and can take them into account, along with current market conditions, to come up with a realistic picture of what you could expect when pricing your property for sale. The last thing you want to do is set your price too low and leave money on the table, or on the flip side, price it too high and never get taken seriously by buyers who know the market.