Types

Buildings

• Low-rise
• Mid-rise
• High-rise

Office Spaces – Uses

• Traditional
• Flex Space
• Co-working
• Business Center – Executive Suites

Approaches, Relevance

Cost approach – relevant when the project is relatively new.

Sales comparison or market approach – applicable if there is sufficient comparable sales or leases available.

Income capitalization approach – considers the profitability of a property but does not easily change in income or costs over time.

DCF – discounted cashflow – most advanced method for valuation of offices, because the method measures the profitability of a project over time, and the method is typically the way investors analyze potential purchases in Latin America (investment funds or FIBRAs).

Value Impacting Factors

Location – the location of an office project is the most important factor of value usually. It is very important for projects to be located within office corridors or hubs because companies like to be near their clients, and near access to mass transit systems.

Floor plate size – this is a key differentiator in office projects. Typically, a larger floor plate allows for more efficiency in a project for tenants. Class A tenants often require this specification – and locate in projects that provide it.

Tenant quality – closely related to the location and building specifications is the quality of tenant a project attracts. Usually high spec, well-located projects attract multinational tenants, who have high credit ratings, and provide long-term cash flow stability for projects