What is the purpose of a commercial property valuation analysis?

The purpose of a commercial property valuation analysis centers around establishing both the market value and the insurable value of a property, which are critical for various stakeholders, including property owners, investors, and insurers. Market value refers to the estimated price at which the property would sell in a competitive and open market, while insurable value relates to the amount of coverage needed to protect the property from potential losses.

This analysis provides a detailed understanding of the property's worth, allowing decision-makers to make informed choices related to purchasing, selling, or underwriting insurance policies. It plays a crucial role in risk assessment and financial planning within commercial real estate. By having a clear valuation, property owners can ensure they have adequate insurance coverage to avoid any financial pitfalls due to undervaluation in the event of a loss.