Commercial Real Estate Appraisal in Los Angeles and Southern California

Estate and gift reporting. Fair market value of the real estate as of a date of death, an alternate valuation date, or a date of gift, prepared for a Form 706 or 709 and for the income tax basis of the heirs. Retrospective assignments are common and are described on the Date-of-Death, Estate, and Retrospective Appraisal page. When the estate also holds a business or a partnership interest, the real estate and the entity are valued together; see Estate and Gift Valuation.

Trust administration. Funding sub-trusts at a decedent's death, distributing property in kind among beneficiaries, pricing a sale from a trust to a beneficiary, and documenting a trustee's decision to hold or sell.

Partnership, LLC, and shareholder transactions. Buyouts under a buy-sell agreement, capital contributions of property, redemptions, dissolutions, and tenancy-in-common partitions. Where the interest being transferred is a fractional interest in the property or in the entity that owns it, the appraisal of the whole is the starting point for the discount analysis.

Litigation. Partition actions, partnership and LLC dissolutions, breach of contract and lease disputes, damages measured by diminution in value, and the real property component of a marital dissolution, which has its own page: Family Law Valuation.

Property tax. Support for a decline-in-value request or a base-year value appeal before the Assessment Appeals Board. The county assessor's process is separate from a fair market value appraisal, and the guide on California property tax appeals explains where an appraisal helps and where it does not.

Leases. Fair market rent for renewal options, ground lease rent resets and rent arbitrations, and fair rental value opinions for court use.

Financial reporting. Fair value of real estate held by a company or fund under ASC 820, the real property component of a purchase price allocation under ASC 805, and recoverability and fair value testing under ASC 360. These assignments coordinate with the auditor's specialist and are described for audit teams on the For CPAs and Audit Firms page.

Charitable contributions. Qualified appraisals of donated real property for Form 8283, prepared to the IRS requirements summarized in the guide on IRS qualified appraisals.

Owner decisions. Pricing a sale between related entities, a hold-or-sell analysis, or an opinion of value before a listing or an offer.

The scope of work is set with the client at engagement: the property rights appraised (fee simple, leased fee, leasehold, or a fractional interest), the effective date, the intended use, and the intended users, who are named in the engagement letter and fixed there. The property is inspected. Market data is drawn from closed sales, executed leases, listings, and market surveys for the submarket, and verified where possible. The sales comparison approach and the income approach (direct capitalization, and a discounted cash flow where lease-up or a lease roll makes a single-year capitalization unreliable) are developed for income property; the cost approach is developed where it is meaningful, as for newer owner-user buildings or special-purpose improvements. The approaches are reconciled to a single conclusion with the reasoning stated.

The deliverable is a narrative appraisal report prepared under the Uniform Standards of Professional Appraisal Practice: property description, market analysis, highest and best use, each approach with its data, the reconciliation, the assumptions and limiting conditions, the certification, and the appraiser's qualifications. A reader who was not part of the engagement can follow the data to the conclusion, which is what a tax examiner, an opposing expert, or a judge will do.

Reports are written for the intended users named at engagement. LHM does not readdress a report or issue reliance letters for parties added later; a later request for another party to rely on the work is a new assignment.

For the first conversation, the address or APN, the purpose of the appraisal, who the client will be, the effective date if it is not today, the ownership structure, and the deadline. If the property is leased, the rent roll and the leases are the first items on the information request list once an engagement is in place. Prior appraisals, surveys, and environmental reports are useful when they exist. Please hold confidential documents until the engagement letter is signed.