I am currently looking at purchasing a lot that currently has 5 leases in an apx 16,000sqft facility (all 5 leases could expire by 2020, with the earliest being 11/2018 and the latest being 2020).

The seller has provided me with a 2013 appraisal that is quite thorough and has many comps and valuation approaches, but obviously is 5 years old.

He also told me that they have a recent appraisal that was done and when I asked to see it, all I received was a couple of sentences that used the income valuation approach to come to the same price he originally offered.

My main question is what value does the income valuation approach have to a property that could potentially be vacant in 3 years? I do have the rental income of all the properties but the valuation he provided didnt provide me with any details with how he got the price per square foot that he used.

Is there something i'm missing? Also in a situation like this, what would be the most accurate appraisal to help me determine the value: a fee simple vs leased fee or something else entirely?

Any input/advice that you guys could provide would be helpful.

Thanks