Commercial Value in Use
Value in use is a distinct value concept tied to a specific property's contribution to a particular operation—not the property's value in the open market. We provide value in use determinations under the applicable definition, clearly distinguished from market value.
Value in use is a value concept reflecting a property's contribution to the enterprise or operation of which it is a part, under a specific definition—distinct from market value, which assumes the property's most probable price in the open market. A value in use determination is an appraisal assignment that applies the applicable definition of value in use, and the deliverable is a report documenting the definition applied and the supported conclusion.
Because value in use depends on the specific operation and the applicable definition, we confirm both at the outset—often with the client's counsel or advisor, since the definition that applies can vary by context. We distinguish value in use from market value explicitly in the report, because the two can differ materially and conflating them is a common error.
When Clients Need This Service
Owners, investors, and their advisors request value in use determinations when the relevant question is a property's value to a specific operation rather than its value on the open market—often in the context of a business enterprise, a specialized-use property, or an assignment where the applicable standard is value in use.
For example, a special-purpose property integral to an operating business may be valued on a value-in-use basis for a specific purpose, where its value to the enterprise differs from what it would fetch in an open sale. In each case, the applicable definition of value in use is identified and applied, and the conclusion is distinguished from market value.
What the Analysis Considers
The factors relevant to this assignment vary with the property and the question being asked. Depending on the agreed scope, the analysis may consider:
- The applicable definition of value in use for the assignment, confirmed with counsel or advisor
- The specific operation or enterprise of which the property is a part
- The property's contribution to that operation—income, cost savings, or utility
- How value in use differs from market value for this property, and why it matters
- Comparable and income evidence relevant to the value in use conclusion
- Any assumptions about the continuing operation or use of the property
- The intended use and intended users of the value in use conclusion
Not every assignment applies all three valuation approaches. The approaches used depend on the property type, available data, and the assignment's intended use.
Documents & Information That May Help
Providing the following can streamline an assignment, but not every item is required to begin. We can discuss what is available during the initial call.
The applicable definition of value in use
From counsel or advisor
The operation or enterprise of which the property is part
Property address and characteristics
Income, cost, or operational data tying the property to the enterprise
The intended use of the value in use conclusion
How the Engagement Works
Every engagement begins with a conversation so the scope, fee, and timing fit the property and the question you need answered. A typical engagement moves through these stages:
Initial discussion
We learn the property, the operation, and the applicable definition of value in use.
Scope confirmation
We confirm the definition, the intended use and users, report format, fee, and timing.
Information collection
We gather the operational and financial data tying the property to the enterprise.
Analysis
We apply the applicable definition of value in use and distinguish it from market value.
Delivery
We deliver the report with the definition applied and the value in use conclusion.
Scope, fees, and timing depend on the property type, assignment complexity, and the report format the client or intended user requires. We confirm these in writing before work begins.
Frequently Asked Questions
Common questions about this service.
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Gold Rush Appraisal provides commercial real estate valuations across the Atlanta metro area. Call us directly or send the details through the form and we'll get back to you promptly.
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