In one sentence
A property's current value in its present condition, before any planned improvements or lease-up.
The longer version
As-is value reflects the property as it stands today, the conservative anchor for underwriting transitional deals. Lenders often size initial advances against as-is and release more as value is created.
The relationship between as-is value, cost, and stabilized value defines the risk profile of a value-add loan.
Common questions
- What is as-is value?
- A property's current market value in its present condition and occupancy, before planned improvements or lease-up.
- What is the difference between as-is and as-stabilized value?
- As-is reflects today. As-stabilized reflects a future point after the business plan is executed. Appraisals for transitional loans often report both.
- Why do lenders care about as-is value?
- Because it is the value supporting the loan today. If the business plan fails, as-is value is closer to what the lender could recover.
Keep reading