stabilized value

Dictionary of Real Estate Terms for: stabilized value
stabilized value

the value of a property after it reaches a normal occupancy rate and operating expenses.

Example:A recently built 1,000-unit apartment complex is expected to take 2 years to lease up at market rents. At that time, extra advertising will no longer be needed to attract tenants, so expenses will become stable. The appraiser provided a report offering a stabilized value of $100 million for the building. In order to derive its as is value, the appraiser then subtracted from that value for the reduced occupancy and higher expenses expected for the first 2 years.

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