An appraised value in commercial real estate is an estimate of the market value of a property, determined by a licensed commercial property appraiser. The appraiser will visit the property and take into consideration several factors, including the location, condition of the property, recent sales of similar assets in the area, and more. Once the appraisal is complete, the appraiser will provide a report that includes their opinion of the property’s value. (Source)

The appraised value of commercial real estate is determined by a licensed commercial property appraiser using one of three methods: the cost approach, the sales comparison approach, or the income capitalization approach.

The cost approach is based on the principle that the value of a property is equal to the cost of reproducing the improvements on the land, less depreciation. Appraisers use information such as construction costs, land value, and depreciation to determine the value of a property using this method.

The sales comparison approach is based on the principle that the value of a property is equal to the sale price of similar properties in the area. Appraisers use data on recent sales of comparable properties to determine the value of a property. They generally utilize public records to find sales comps, though some national databases, like CompStak or Yardi Matrix, can also be useful if evaluating a property in a larger, regional context.

The income capitalization approach is based on the principle that the value of a property is equal to the present value of the expected future income from the property. Appraisers use information such as rental income, operating expenses, and capitalization rate to determine the value of a property using this method.

When appraising commercial real estate, appraisers consider three main factors: the sales comparison approach, the income capitalization approach, and the cost approach. The sales comparison approach is based on the principle of substitution, which states that a buyer will pay no more for a property than the cost of acquiring a comparable property. The income capitalization approach is based on the principle of expectation, which states that the value of a property is equal to the present value of its expected future income. The cost approach is based on the principle that the value of a property is equal to the cost of reproducing the improvements on the land, less depreciation. Appraisers use information such as construction costs, land value, and depreciation to determine the value of a property using this method.

Appraisals are also essential for commercial real estate investors. Investors use appraisals to determine the potential return on investment and the risk involved. Additionally, investors also use appraisals to evaluate potential properties and compare them with similar properties in the area. After all, you can't calculate an investment's cap rate if you don't know its market value.

The appraised value of a commercial property is an estimate of the property's market value, as determined by a licensed commercial property appraiser. The appraised value is based on a variety of factors, such as the current market conditions, the size of the property, and the potential uses of the property. The appraised value is typically used for buying, selling, or financing a property. The market value of a commercial property is the price that a buyer is willing to pay for the property in the current market. The market value is determined by the forces of supply and demand, and can be higher or lower than the appraised value.

Accurate appraisals play a significant role in the lending process. Commercial property lenders need to determine the value of the real estate to provide a loan based on a loan-to-value ratio, after all, not to mention it's used to calculate several other key metrics.

Inaccurate appraisals can lead to problems for the lender, as an inaccurate market value can hide the risk involved in a loan. This could present itself with higher rates of loan default, foreclosure, and other financial difficulties. Beyond this, appraisals can also impact the interest rate and terms of a loan. Thus, lenders pay very close attention to the results of any commercial real estate appraisal.

Appraisals are also essential for commercial real estate investors. Investors use appraisals to determine the potential return on investment and the risk involved. Additionally, investors also use appraisals to evaluate potential properties and compare them with similar properties in the area. After all, you can't calculate an investment's cap rate if you don't know its market value.

In short: If you don't know what your property (or potential investment) is worth, you can't accurately decide whether to invest in a building or determine how much you should sell an asset for.

Appraised value affects commercial real estate financing by impacting the loan-to-value ratio, interest rate, and terms of the loan. Accurate appraisals are essential for lenders to determine the risk involved in a loan and for investors to determine the potential return on investment.