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Prospective / Retrospective

Prospective (Future) Valuations

by Administrator on Dec 12, 2018 Prospective / Retrospective 34 Views

Some value opinions can have an effective date of value that is in the future or as of a prospective date. Appraisals of this type are not unusual for buildings under construction because it’s important for lenders to know how much value a building will have when it’s completed. Commercial real property appraisers prefer not to step into the world of stock market financial analysts who regularly forecast stock market prices years into the future, even though most appraisers already employ discounted cash flow (DCF) models that have years of projected income streams in their Income Approaches (Yield Capitalization) portion of their appraisal reports.

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