The most basic answer would be based upon the NOI. If you have two completely identical buildings with expenses of $1M each and for any reason building 1 is netting $2M and building 2 is netting $1.5M you will have a difference in sales price. If tenants, leases and structures are similar, but cashflow differs as mentioned previously - assume a 6% cap on each building. Building 1 would sell for $33.3M & Building 2 would sell for $25M.

That's the beauty of commercial, you can create value almost instantly vs. residential where things are typically done based off of comps etc.

"Never let success get to your head and never let failure get to your heart"
 

By structure I assume you mean consistent floor plans, building material, use, zoning and attached adjacencies

-lease maturation -contract services -creditworthiness of tenants -property manager/leasing agent -current occupancy -age -utilities and taxes (just because they are located on the same block doesn't mean they are in the same county) -tenant recovery structures

 
vik2000:

A dead body was found once in the other property.

Sounds like an additional income opportunity to me. Tack on a "culture & history" premium to the property where the death occurred and charge even more for ghost tours after business hours.

Commercial Real Estate Developer
 
Best Response
investREanalyst:

... Different access points turning lanes, street lights, traffic counts... One building can have much more attractive transferable debt Tenant Roster Space allocation Valuable/Less-Valuable lease structures Reimbursements, tenant roll, termination rights Leaner operations Walkable amenities - or even on-site amenities for an office building (cafe, gym, cleaners, day-care, etc...). The 'street' can be a freeway that you cannot really walk across Different Zoning Environmental - Cleaners and Gas Stations can play a role into this Parking can certainly come into play Many more too...but I think the major ones have been listed

And:

Might sound silly, but one side of the street could get better sunlight. This can be huge. Also, even more obvious than the first point, the views the building has. You could have 2 exact buildings, exact tax structure, exact everything. But if one building's views are obstructed, you better believe the one with unobstructed views will command higher rents & be more valuable.

 

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