I wouldn't look for a quick answer to this question. It will take lots of research in the submarket so that you have a solid understanding of rent levels, vacancy rates, absorption rates, etc. You will need to forecast cash flows (reflecting the absorption) out into the future and then discount them back to a present value. Most properties are trading at prices well below replacement costs, so that's not really helpful. Cost does not necessarily = value.
Apr 17, 2011