As with existing commercial real estate assets, assets in a pre-construction or construction phase require valuation for capital raising purposes, whether funds are to be borrowed or raised via equity investors. Unlike existing assets, however, construction projects lack financial history to demonstrate value—there’s no rent roll, leases, or income statements for an appraiser to review. How, then, do commercial valuation consultants place a value on a construction project?
In this article, Eric Enloe, Partner Valuation Advisors, discusses how to evaluate and protect a construction project’s value.