How do you go about doing a CMA on commercial property?

I know how to do a CMA on residential but this is very different.
In Buying Property - Asked by TL F. - Dec 19, 2016
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John B.
Fayetteville, NC

You really don't do CMAs on Commercial Properties! Buyers are interested in Commercial Properties for investment purposes unless they are going to be a Buyer-User of the Property, then it's a mix of both! Be prepared to furnish Prospective Buyers with the Property's Annual Financial Statements to calculate the Net Operating Income (NOI) that takes Income and Expenses into account! This will help support the Capitalization Rate (Cap Rate) that most Buyer/ Investors want to see in determining if the Property will be a good investment for them. I normally refer any Residential Prospects/ Clients to a Residential Broker and I normally handle Commercial referrals from those same Residential Brokers! Check out the Web Reference....

Dec 20, 2016
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Christopher P.
Chicago, IL

The most effective way to run a CMA on commercial property is to find properties in the area with comparable tenants, and thus comparable income. Say the building that you are running the CMA for is a 5,000 SF two story mxed-use building. The first floor generates $48,000/year and the second floor $20,000/year for a total of $68,000/year. Subtract the building's expenses to determine NOI. Now you can set a price based on an appropriate CAP rate and start breaking that price down into a cost per square foot. Search buildings in the area with comparable CAP, NOI, and price per SF.

Dec 20, 2016
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Fan X.


Dec 23, 2016
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