Commercial real estate appraisal is the process of determining the value of a commercial property. There are several types of commercial real estate appraisals, each with its own purpose.

Market value appraisal: This type of appraisal is used to determine the fair market value of a property. The fair market value is the price that a willing buyer would pay to a willing seller in an arms-length transaction. This is the most common type of commercial real estate appraisal.

Investment value appraisal: This type of appraisal is used to determine the value of a property to a specific investor. The investment value is based on the investor’s individual goals and objectives. For example, an investor who is looking for a property with high-income potential would likely value the property differently than an investor who is looking for a property with good long-term appreciation potential.

Lien value appraisal: This type of appraisal is used to determine the value of a property for the purpose of securing a loan. The lien value is the amount that a lender is willing to lend against the property. The lien value is typically lower than the fair market value of the property, as the lender needs to protect itself against the possibility of default.

Valuation for tax purposes: This type of appraisal is used to determine the value of a property for tax purposes. The tax value of a property is used to calculate property taxes. The tax value is typically lower than the fair market value of the property, as the government does not want to overtax property owners.

Valuation for insurance purposes: This type of appraisal is used to determine the value of a property for insurance purposes. The insurance value of a property is used to calculate the amount of insurance coverage that is needed. The insurance value is typically higher than the fair market value of the property, as the insurance company needs to be able to pay for the cost of rebuilding the property in the event of a loss.

Valuation for eminent domain: This type of appraisal is used to determine the value of a property that is being taken by the government through eminent domain. Eminent domain is the power of the government to take private property for public use. The government is required to pay the fair market value of the property that it takes through eminent domain.

The type of commercial real estate appraisal that is required will vary depending on the specific purpose of the appraisal. For example, a market value appraisal would be required for a property that is being sold, while an investment value appraisal would be required for a property that is being purchased as an investment.