83 83

Forecasting Income and

Forecasting Income and
Property Value
Property Value
LDM GROUP
LDM GROUP
Franklin Templeton Asset Group
Franklin Templeton Asset Group
84 84
Forecasting Gross
Forecasting Gross
Income
Income

Desirability of space, attractiveness,

Desirability of space, attractiveness,
price of competing space
price of competing space

Prospects for continued income

Prospects for continued income
-
-
generating ability
generating ability

Physical (natural and man

Physical (natural and man
-
-
made)
made)
and location characteristics
and location characteristics

Forecast changes in physical and

Forecast changes in physical and
location characteristics
location characteristics

Linkages and transfer costs

Linkages and transfer costs

Inharmonious or incompatible land

Inharmonious or incompatible land
usage
usage

Changes in supply of comparable

Changes in supply of comparable
rental space
rental space
85 85
Forecasting Operating
Forecasting Operating
Expenses
Expenses

Extend prior years

Extend prior years

trend into
trend into
future (simple straight
future (simple straight
-
-
line
line
extrapolation)
extrapolation)

Alter trend line based on

Alter trend line based on
predicted changes during
predicted changes during
forecast period
forecast period
86 86
The Net Operating
The Net Operating
Income Forecast
Income Forecast

Difference between forecast of

Difference between forecast of
rental revenue and forecast of
rental revenue and forecast of
operating expenses
operating expenses
87 87
Table 6.1
Table 6.1
88 88
Table 6.2
Table 6.2
89 89
Estimating Future
Estimating Future
Market Value
Market Value

Cash flow from eventual

Cash flow from eventual
disposal
disposal

Capitalization rate
Capitalization rate

ratio
ratio
between operating income and
between operating income and
market value
market value

Note current capitalization rate

Note current capitalization rate
applicable to comparable
applicable to comparable
properties and estimate how
properties and estimate how
rate might change over
rate might change over
forecasting period
forecasting period