Author: David M. Geltner, Richard A. Graff, and Michael S. Young

Start Page: 403
End Page: 420
Volume: 9
Issue Number: 4
Year: 1994
Publication: Journal of Real Estate Research

Abstract: This paper examines the magnitude of random disaggregate appraisal valuation error in institutional-grade commercial property. Unlike previous transactions-based studies of appraisal error, we use a much larger database that is not restricted to sold properties, and we employ a methodology that focuses on appraisal error rather than the difference between transaction price and previous appraised value. Our model gives a point estimate of 11.07% for the standard error of appraisals in the Russell-NCREIF database, with a robust range of 6% to 13%.