Frequently Asked Questions

Commercial property value in San Diego typically comes down to three things: income (NOI), market comps, and current buyer demand by submarket and property type (office, industrial, retail). If the property is leased, value is usually driven by the quality of the tenant(s), lease terms, rent level vs market, expense structure (NNN vs gross), and remaining lease term. If the property is vacant or owner-user, buyers often focus more on replacement cost, location, functionality, and comparable sales of similar vacant/owner-user properties.

Most valuations rely on a sales comparison and/or income approach (cap rate and income assumptions), and the right approach depends on how the property is (or will be) occupied at sale. If you want a clear, broker-supported range of value and key assumptions, request a broker’s opinion of value (BOV) here: https://timgosselin.com/valuation

This decision usually depends on your timeline, tax position, risk tolerance, and whether the property is better suited as a long-term hold or a monetization event. Owners often consider selling when they want to: (1) reduce management burden, (2) diversify, (3) redeploy equity, or (4) lock in pricing while demand is strong for their asset type. Leasing can be the better move if you believe the market will improve and you want to stabilize income to increase value before selling.

If you sell, a 1031 exchange can help defer capital gains by moving into a replacement property—some owners target NNN investments for simpler operations, while others consider DSTs (Delaware Statutory Trusts) for a more passive option (still with risks and fees to evaluate). The best next step is to run a quick scenario comparison: sell now vs. lease then sell vs. hold, including taxes, costs, and projected proceeds. If you want, I can outline these scenarios based on your property and goals. 

We work throughout San Diego County, including: San Diego, Chula Vista, Oceanside, Escondido, Carlsbad, Coronado, Del Mar, Encinitas, Imperial Beach, La Mesa, Lemon Grove, National City, Poway, San Marcos, Santee, Solana Beach, and Vista—plus key submarkets such as Miramar, Sorrento Valley, Kearny Mesa, Mission Valley, Rancho Bernardo, UTC, Torrey Pines, La Jolla, 4S Ranch, City Heights, and Mid-City. If you’re unsure whether your property fits our coverage area, send the address and property type and we’ll confirm quickly.

BOV/BPO (Broker Opinion of Value / Broker Price Opinion) is a broker-prepared opinion of value based on local market knowledge, property details, and comparable sales/leases. It’s often used for planning and decision-making because it can be faster and more cost-effective when a formal appraisal isn’t required.

An appraisal is a valuation performed by a licensed/certified appraiser under appraisal standards and is more commonly required for certain lending and IRS purposes.

In plain terms, a BOV/BPO is a market-supported broker opinion, while an appraisal is a formal appraiser’s valuation. If you tell me your goal (sale planning, refinance, partnership buyout, etc.), I can recommend which one fits your situation.

Cap rates in San Diego are driven by risk and durability of income, and the “right” cap rate depends on the specific deal—not just the property type. The biggest inputs are tenant credit, remaining lease term, and lease structure (NNN vs. gross), as they directly affect cash flow predictability.

From there, the market adjusts for location/submarket, building quality and functionality, vacancy and absorption for that product type, and re-leasing risk (the likelihood of keeping or replacing the tenant at market rent). Finally, interest rates and lending conditions influence buyer yield requirements—when borrowing costs rise, cap rates often need to adjust to maintain spreads and returns.

A practical way to pick a cap rate is to bracket the deal using recent comparable sales of similar assets, then adjust for differences in tenant/term, location, and lease economics. If you share the property type, submarket, NOI, and tenancy (or vacancy), I can narrow the cap-rate range buyers are most likely to apply and explain why.