Need some broker advice with my office/retail appraisals near Downtown Denver
I'm appraising a single-tenant 1,200 sf office &amp; a 1,400 SF tavern 1/2 mile east of Denver's CBD. I'm struggling with how to analyze how the coronavirus is affecting the sales &amp; lease market. 

If you had a gun to your head...
how much of a percentage amount - that a real property price must be reduced from prior market conditions to close a sale or lease and reflect the market conditions that we are experiencing as of today?

ANY insight and advice is appreciated.
[{"id": "fnfbjzt", "text": "I am in the Phoenix market and work primarily with office product. The sales market and leasing market is slow to say the least. Most of my tenant groups have switch to short term renewals either to see how soft the market gets or to see where their business goes. Starting to see some cautious optimism in the market. That being said I do not expect pricing to recover until 2021. I would think that there would be a 5% drop or more depending on the total vacancy rates after reopening which may be messy due to the non-eviction status.\n\nJLL put out a researched article on the current state of the market for China. It does not have a ton of specifics but to say the least prices have softened in both the office market and retail market. I would expect that the same would occur in the US when it finally opens for business again.\n\nGood luck.", "replies": [{"id": "fnfdnl5", "text": "I'll go to JLL now. Thanks for your thoughtful response. There's not a lot of data out there and your insight is very helpful.", "replies": [], "depth": 2}], "depth": 1}, {"id": "fnhei5z", "text": "I'd be interested to see how any single-tenant deal looks in a go-dark scenario although that is likely not your scope. If I were to look at an as-dark value, I'd pump the sales &amp; leasing period to 12 months on market as a conservative estimate.\n\nThis doesn't answer your question but I think using an as-dark value as a bottom value reference point would be helpful in determining a haircut - whether from reduced T-12 revenue or increasing the cap. I work on the financing side but review a lot of appraisals. This is more of a mitigant to a credit risk ensuring the asset is well-protected from a loan to value standpoint but still think it would be helpful to come up with a reasonable value. Good luck!", "replies": [], "depth": 1}, {"id": "fo6t5qa", "text": "To support that market conditions adjustment to sales or rent comps you would need some empirical evidence and there are very few lease or sales transactions available that fully include the post-COVID impact.  \n\nThe only way to support an adjustment for changes in market conditions would be feedback from 3rd party sources like investor surveys or local market participants with their impressions of the current market conditions due to COVID and the consensus of the group moving forward (Attitudinal Survey). In addition to just making a market conditions adjustment, your valuation should also consider the impact on marketing and exposure times (undoubtedly increasing based on the number of deals that have been pulled or put on hold).  \n\nUltimately, the quality of cash flows and tenancy will have the greatest impact on value for your property.  Tenant interviews are essential to gauge the future probability of vacancy and credit risk.  Be careful of making large market conditions adjustments then adjusting the cap rate higher for \u201cincreased market risk\u201d.  This can multiply the impact.   Market conditions changes are also impacted by things that can differ based on property or tenant type like tighter credit standards, lower renewal probability, increased collection loss and limits to near term rent growth.  So the impact of all as a whole should be considered.  Be careful not to capitalize short term concessions and rent loss into perpetuity.  Use a DCF if you want to model near term rent loss or concessions (or deduct the PV of loss from the value).\n\nRecognizing the higher degree of market uncertainty due to the recentness of the event, once you\u2019ve fully collected, analyzed and considered all the available data, please opine with your opinion of value that includes what impact you believe the pandemic will most likely have on the value of the property.  \n\nAfter all, the appraisal is intended to be your opinion of the property value (subject to being adequately developed, supported and reported).\n\nNo gun needed, Appraisers take enough shots daily!", "replies": [], "depth": 1}]