Explain how private property investments are vetted and valued

Due diligence checks title, the rent roll and each lease (tenant credit, expiries, break options), physical and environmental condition, zoning, operating expenses, local market supply and demand, financing terms and ESG issues such as energy performance. There are three valuation approaches. The income approach uses direct capitalisation (NOI ÷ cap rate) or a DCF of the lease cash flows plus a terminal value. The sales comparison approach adjusts recent transactions for differences. The cost approach takes replacement cost less depreciation plus land value. Appraisal-based valuations lag the market. The trap: capitalising in-place NOI when rents are below market or leases are about to expire misstates value, so adjust NOI to a stabilised level or model the lease-up explicitly.