What is the unit of comparison generally used in valuing office properties?

The unit of comparison generally used in valuing office properties is the price per front foot of net rentable area. This measurement reflects the specific characteristics of office spaces, allowing for a more accurate assessment of value relative to the usable space available for tenants. The concept of net rentable area is critical in the commercial real estate market, as it provides a clear picture of the actual space being leased or sold, which is crucial for determining market rents and evaluating profitability.

Using price per front foot helps to standardize comparisons across different office properties, accounting for variations in layout and design. It enables appraisers and investors to compare properties on a consistent basis, making it easier to ascertain their relative values and assess investment opportunities. This metric is particularly relevant in densely populated urban areas where rent might fluctuate based on location, demand, and building amenities.

Other metrics like price per square foot or price per room may be useful in different property types but do not capture the specific financial dynamics associated with office properties as effectively as price per front foot of net rentable area. Price per acre is more applicable for valuing land rather than improvements like office buildings. Thus, the specific focus of valuing office properties makes the chosen unit of comparison particularly appropriate.