Retail property assessments

Retail property assessments

See the market trend report

Retail properties offer a variety of goods and services for sale and range in size, type of merchandise, age, and construction materials. They also vary from freestanding single tenant buildings to enclosed shopping centres. They are typically purchased as an investment so their ability to generate income is the most important feature when estimating their market value.

Influencing the value of the property

Typical net operating income

The property’s typical net operating income is estimated using market rental rates, vacancy rates, operating costs and non-recoverable rates. The determination of these market rates directly affects the assessed values of properties within its grouping. In order to determine a fair estimate of market value, rental rates and property types are separated in various categories.

Rental rate categories:

Spaces within retail properties are divided into categories that are each assigned a rental rate. The rental rate reflects the typical market rent as of the valuation date, not the actual rent in place on a given property. For the market value assessment to be fair and equitable, the collective market leasing activity for comparable spaces within each category is analyzed.

The rental rate categories vary depending on factors like space type, improvement type, location, size, and quality. Typically, the smaller the space the higher the rent achieved per square foot.

Quality is based on the following factors:

  • year and type of construction
  • building finish
  • location/exposure
  • physical condition
  • building functionality
  • building amenities
  • parking availability and capacity

Net market leases with defined terms are typically the basis of the assessed rate. The assessed rate is representative of expected rental rate per square foot as of the valuation date.

Types of retail properties:

Retail properties are grouped into the following types in order to determine their assessment.

​Type of Retail ​Description
Type of Retail: ​Freestanding Retail Description: ​Contains three or fewer units and that can vary greatly in size, construction, and layout. They can be located near other retail properties but are not located within a larger planned shopping centre.​
Type of Retail: ​Strip Centre Description: ​Attached row of at least four retail tenants, managed as a coherent retail entity, often with on-site parking. Open canopies may connect the storefronts, but not have enclosed walkways or halls linking the stores.  They lack space to house large scale tenants.
Type of Retail: ​Retail Condominium Description: ​Separately titled units held under a single condominium plan. These units resemble strip centres but can be sold independently.
Type of Retail: ​Neighbourhood Shopping Centre Description: ​Spaces designed to provide convenience shopping for day-to-day needs for consumers in the immediate area. Unlike strip centres, they typically benefit from higher traffic due to their ability to accommodate larger tenants. They do not have enclosed walkways or halls linking the stores.
Type of Retail: ​Power Centre Description: ​A group of commercial, primarily retail, properties situated in large planned districts. Buildings may contain single, or multiple tenants and are connected by large parking lots and common roadways. They also contain multiple anchor spaces.
Type of Retail: ​Enclosed Shopping Centre Description: ​A premiere shopping destination that has interior common areas and hallways connecting many stores through a pedestrian promenade. They can house large anchor tenants, pad sites and potential future development. They are typically on major thoroughfares, readily accessible to vehicle, public transit and/or pedestrian traffic.​
Type of Retail: ​Beltline Retail Description: Properties in the Beltline region that are predominantly designed for retail use. The Beltline region is located directly south of the Downtown Region and bordered by 10th Avenue S to the north, the Elbow River on the East, the community of Mission to the south, and the community of Sunalta to the west.​
Type of Retail: ​Downtown Retail Description: ​Properties in the Downtown region that are predominantly designed for retail use. The Downtown region includes the communities of Chinatown, Downtown Commercial Core, Downtown East Village, Downtown West End, and Eau Claire.

Land Value

Retail properties may be assessed on the basis of its underlying land value if the value of the vacant land exceeds the value of the improved property.

Assessment Search is our online resource for property and business owners to access more detailed information about their assessment and property details.

We do regular research with businesses to better understand the outlook and viewpoint of the business community. If you are a business owner, leader or manager, join our online business research panel, Business Perspectives.