Valuation of Properties Under Construction
Hello everyone,

I am currently doing a broker's opinion of value for a newly built hotel so obviously there's no historical financials for the property. My team has a few different models we use to do valuations, but the problem is they were originally built for existing hotels. We've modified them to make them work 'ok' but it seems really inefficient.

Anyone have any experience in this area and would you mind sharing how you do valuations? (Doesn't have to be hotel specific)
[{"id": "f8c8swk", "text": "Hire an appraiser", "replies": [], "depth": 1}, {"id": "f8cfe7t", "text": "Determine the value of the property as if it were complete and stabilized then back out the the cost to complete plus some discount/entrepreneurial profit to reflect the risk/uncertainty.", "replies": [{"id": "f8diluy", "text": "This sounds like a land residual calculation rather than an approach to business valuation.", "replies": [], "depth": 2}, {"id": "f8eyriw", "text": "You  would also account for the lost rent during the lease up period and the variable expenses that you won't have.", "replies": [], "depth": 2}], "depth": 1}, {"id": "f8cwbcn", "text": "Pick a discount rate and work a stabilized pro-forma backwards to present to account for time to stabilization. Compare against the brick-and-mortar cost. Take the higher one.", "replies": [], "depth": 1}, {"id": "f8dikfu", "text": "You\u2019ll need to use STR data derived from the comp set to create a pro-forma and stabilize the property with market assumptions such as ramp up to stabilized ADR and occupancy. That\u2019ll give you cash flows for valuations based on income. Use stabilized year for income valuation.", "replies": [], "depth": 1}, {"id": "f8u4fpp", "text": "You\u2019ll need to assign a value to the building and the land..assuming there is a mezz piece? You\u2019ll need to account for the carrying cost of the interest and then once stabilized go out with the cash flows and value in the traditional ways", "replies": [], "depth": 1}]