What Is a Broker Opinion of Value (BOV)?

These answer different questions, and the difference matters most when a lender is involved. An appraiser values to a lender's standard on a specific date, under rules that govern how the work is performed. A BOV is a working broker's read on what the building would trade for right now.

A broker opinion of value is a broker's professional pricing opinion. It is not an appraisal and is not performed by a licensed appraiser.

So if the number is going to a bank, ask the bank first. Most financing needs an appraisal, and a BOV will not substitute for one. Plenty of owners get a BOV first anyway, to decide whether the deal is worth ordering an appraisal for at all.

The request almost always arrives attached to a decision. The most common ones we see:

• Before listing the building for sale or for lease
• Ahead of a refinance conversation, to know the number before the bank does
• Buying out a partner, or settling an estate
• Benchmarking a sitting tenant's rent against the market before a renewal
• Deciding whether this is the year to hold or sell
• Preparing a property tax appeal

If you are heading toward a sale specifically, the BOV is the first step of the conversation we walk through on selling a warehouse.

We start with what has actually sold and leased near you recently. Not just the numbers. We call the brokers, agents, buyers, and sellers on those deals and ask why that buyer chose that specific asset, what they paid up for, and what they walked away from. The number matters less than the reason behind it.

Then we cross-check against the appraisers we work with daily. We trade comps with them constantly, so the read reflects more than one desk's opinion.

Then we apply what the building in front of us actually has. Two warehouses a mile apart can trade at very different numbers because one has a secured yard, more power, higher clear height, or a tenant already in place. Value lives in those details, and a spreadsheet will not find them for you.

You get the range, the comps under it, and the reasoning for where your building lands inside it. That last part is the part you can argue with, which is the point of getting one.

Warehouse valuation in this valley comes down to a short list of physical facts and one question about the lease.

Clear height sets what a tenant can do with the cube, and the gap between an older 12 foot clear bay and a newer 18 foot one shows up in the rent. Power decides which operations can even tour the building. Dock doors versus grade level doors sorts distribution users from shop and service users. A secured, paved yard is frequently the most valuable thing on the parcel, because there is very little of it and almost none of it is being built.

Office finish ratio cuts both ways. Too little and the building shows poorly. Too much and you are asking an industrial tenant to pay for space they will not use.

Then the lease. A leased building trades on its income, so the rent, the remaining term, the escalations, and who pays which expenses drive the number as much as the walls do. Rent under market is a discount a buyer will price in. Our breakdown of what NNN charges cover explains where that expense line comes from.

We track inventory across 16 submarkets, and the same building is worth different money in different ones. The buildings we lease are on our properties page, and what has actually been leasing is on recently leased.

A BOV on an apartment building is a different exercise. Multifamily values off income first: the rent roll, real operating expenses, and what comparable buildings traded for per unit or at what cap rate. The physical questions that decide an industrial number barely come up.

You will also hear it called a broker price opinion, or BPO, on the multifamily and residential side. Same idea, different vocabulary, and neither one is an appraisal.

Our practice is Salt Lake Valley industrial, and that is where our comps are strongest and our opinion is worth the most to you. If you own apartments and want a real broker price opinion on them, tell us anyway. We would rather hand you to a multifamily broker who runs those comps every day than give you a soft number on a property type we do not trade.