Discounted Cash Flow (DCF) Analysis / Model


Appraisers use discounted cash flow analysis models to consider future income in today's dollars or in present value terms.  Discounted Cash Flow (DCF) models are usually used in the Income Approach analysis to consider existing and anticipated future lease terms.  


The establishment of a discount rate, a residual capitalization rate, an income growth rate, an expense growth rate and vacancy over time are just a few of the of the factors / assumptions that must be developed to create a Discounted Cash Flow (DCF) model.


When the terms of existing leases differ significantly from market lease rates, the value of a property can be affected either negatively or positively because of the lease terms.  Properties with multiple tenants increase the complexity of a model, more assumptions must be made regarding turnover, changes in the consumer price index (CPI) and whether or not options are exercised. 


With considerable statistical / econometric modeling experience, we create most of our DCF models from scratch using Excel and the appropriate equations.  


Contact us with your questions or concerns regarding vacancy rates / occupancy rates or regarding your specific appraisal assignment in Nevada at 1-702-568-6699.  We can also be e-mailed at  



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Commercial Real Estate Appraisals in the Las Vegas & Henderson, Nevada Area.