Real Estate Technical Interview Questions
If you had two properties side by side that were identical in every way ( interior and exterior) why might one property be valued differently than the other?
Was curious as to what the best answer is to this.
available development / air rights, tenant mix, tenant quality
Access/exposure, zoning, if there are better views (unobstructive view), parcel location, property taxes/backed taxes, insurance, current owner/operator, etc.
Tenant credit quality including lease term, lease type, etc might be the biggest factors since the properties are identical in every way. Air rights might be an option but I am a little skeptical on that due to similarities of interior and exterior. Air rights is almost like a "value add" component.
A snarky answer is that it can't be identical in every way - by definition, you're going to have to be closer/farther from certain spots/highways/hubs, which will impact views, logistics, freeway/road visibility, etc. Not sure the context of this question, but if this is for an interview (which I'm guessing it is given your recent posting history), then this could be a 'think outside the box' answer.
snarky answer won't get you a job.
having a credit worthy tenant impacts valuation if all else is EQUAL! this is actually a very simple question with a straight forward answer. why do landlords want strong credit tenants vs mom/pop when all else is equal?
If the buildings are identical in every way, this is the only valid answer I can think of. You could say easements, environmental, upkeep obligations, or say the "buildings" may be equal but not property (e.g. parking, developable land, mineral rights, etc...) those might be cherries on top but the tenant part of the answer is the real meat of the question.
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