Book value

Book value represents the accounting value at which a property is carried in a company's financial statements. It is calculated by taking the initial acquisition or construction cost and subtracting the cumulative depreciation charged against the asset over its holding period.

In commercial real estate transactions and valuations, book value differs from market value. While book value declines systematically through annual depreciation, actual market value depends on supply, demand, location, and economic conditions. For financing decisions, refinancing, or sales purposes, the current market valuation is typically the decisive factor, not the historical book figure.