Usage of Location Analysis Software in the Evaluation of Commercial Real Estate Properties

As mentioned by the specialized media, in Romania, in the recent years the banking system and the companies are facing a massive reduction of the values for the commercial properties developed or acquired before the crisis. It is widely known that the value of the commercial properties is directly linked by their location. Considering these elements the current paper focuses on combining specific financial and accounting valuation techniques with location analysis techniques for a better assessment of the values for the commercial real estate properties. While the financial and accounting techniques use methods of calculation established according to the International Valuation Standards, on the other hand this task can be highly simplified if it uses land property management systems or information systems such as the GIS (Geographical Information System). The main function of the land property assessment system, is to define the quantitative and qualitative assessment of the property in order to assess the market price while the main function of GIS based systems is to use economic and cadastral information in coordination with other elements such as: physical factors, social factors, taxation, infrastructure, pollution and noise, economic factors and legal factors in order to facilitate a good assessment of the value of an industrial property. The paper analyzed both the economic factors: based on the International Valuation Standards and also the locational factors of a property valuation and identified the common factors which are used in both methods and which can provide excellent solutions in property valuation.