When estimating market rent for commercial properties, appraisers compare rents across the subject and comparable properties by doing what?

When appraisers estimate market rent for commercial properties, they often convert rental income to annual dollars per square foot. This methodology allows appraisers to standardize the rental income data across various properties, making it easier to compare them directly. By using a common metric—dollars per square foot—appraisers can assess the rental values of different properties, irrespective of their size and layout. This standardization helps in identifying trends and determining what constitutes a competitive market rent in a given area.

While other strategies, such as evaluating historical rent trends or adjusting for neighborhood differences, can provide valuable context and insights, the conversion to annual dollars per square foot is pivotal for direct comparison and clearer analysis. This approach enables appraisers to more accurately assess the rental potential of the subject property in relation to comparable properties, facilitating a well-informed estimation of market rent.