What is commercial real estate?

Most people think of commercial real estate as retail buildings.  However, commercial real estate also includes industrial buildings (warehouses), offices, hotels, apartment complexes, land, and special-purpose facilities (such as amusement parks, water parks, seafood processing plants, power plants, sawmills, and the like), among others.  Appraisers traditionally consider commercial properties everything short of single-family homes and other small residential developments or vacant lots, whether they generate income or not.

What is commercial real estate appraising?

Commercial real estate appraising is the analysis or valuation of commercial properties.

When do people need a commercial real estate appraiser?

Most people find themselves in the market for a commercial real estate appraiser when considering the prospect of buying or selling a parcel of commercial real estate, particularly if a lender is involved.  There are many other services available from commercial real estate appraisers including analyses for:

 financing or refinancing;

 construction or demolition;

 insurance (new policies and claims);

 before and after environmental clean-up or contamination;

 litigation (including expert testimony);

 eminent domain (takings from a governmental agency);

 easements or right-of-way purposes;

 marriage (for prenuptial or postnuptial agreements) or divorce;

 gifting or donating a parcel;

 estimating or paying taxes;

 feasibility analyses; and

 market analyses.

What are some important qualifications to consider when selecting a commercial real estate appraiser?

In the State of Alaska, anyone can be a commercial real estate appraiser, provided that they hold a valid business license to operate in the state.  Kincaid & Riely, LLC holds a valid business license to operate in Alaska.

As in many other states, Alaska voluntarily certifies qualified applicants as Residential or General (commercial and residential) appraisers to ensure that consumers receive consistent, expert services.  There are currently no specific legal licensing requirements for individuals preparing commercial real estate appraisals in Alaska.  That's why it is critical that you select an appraiser that has completed the basic requirements for certification as a General Appraiser in Alaska.  These requirements mirror the Appraisal Qualifications Board's (AQB) requirements and include:

3,000+ hours of qualified appraisal experience;

a peer review and three peer recommendations;

successful completion of Appraisal Institute courses:

 

110 (Appraisal Principles);

120 (Appraisal Procedures);

310 (Basic Income Capitalization);

320 (General Applications); and

410 (Standards of Professional Practice, Part A (USPAP) or the equivalent

attendance of such classes for 180 qualifying hours (including mandatory attendance of Appraisal Institute course 410);
a successful examination administered for the state;
payment of all fees and dues; and
approval by the State of Alaska's Department of Community & Economic Development, Division of
Occupational Licensing, Board of Certified Real Estate Appraisers (more information available at http://www.dced.state.ak.us/occ/home.htm).

Click here to verify that your real estate appraiser is licensed to practice in Alaska.

Beyond State Certification, a commercial real estate appraiser may voluntarily join the Appraisal Institute or other similar organization.  The Appraisal Institute has two types of affiliation:

Traditionally, residential appraisers are SRAs and commercial appraisers are MAIs.   In addition to the Appraisal Qualifacations Board (AQB) and Alaska State Certification General Appraiser requirements, the MAI designation requires:

additional 3,000+ hours of qualified appraisal experience;

a peer review and three peer recommendations;

successful completion of Appraisal Institute courses:

420 (Standards of Professional Practice, Part B);
510 (Advanced Income Capitalizaiton);
520 (Highest & Best Use and Market Analysis);
530 (Advanced Sales Comparison and Cost Approaches);
540 (Report Writing and Valuation Analysis); and
550 (Advanced Applications)

a successful examination administered by the Appraisal Institute;
payment of all fees and dues;
successful completion of a demonstration appraisal report or three business reports; and
approval by the Appraisal Institute (more information available at www.appraisalinstitute.com).

This esteemed designation is often considered comparable to a Master's Degree and usually takes between six and ten years to complete while working full-time as an appraiser.

Click here to find a real estate appraiser that is a designated member of the Appraisal Institute or download the interactive directory for a complete listing of all affiliate, associate, SRA, and MAI members.