Case Study 3

We recently appraised an office building in Santa Ana. It was a pending sale to an owner-user for $1,800,000.  The buyer was going to use SBA financing. The buyer also wanted to get additional money ($300,000) for upgrading and building out some of the interior of the building. For every commercial appraisal assignment, we thoroughly review all construction costs. It turns out that the upgrading/tenant improvement costs mainly consisted of business equipment.

This could easily been not caught by another commercial appraisal firm.  We only credited the upgrading/tenant improvement costs that would add any value to the real estate and not the business equipment. The bank was able to avert risk in this instance.