Appraising the Eiffel Tower

Bonjour and bienvenue to our newest famous real property appraisal ...La tour Eiffel! In 1889, this grand tower was revealed to the world at the Exposition Universelle (The World’s Fair) on the date that marked the 100th anniversary of the French Revolution. At the time of its grand reveal, it was the tallest building in the world — a title it held for 41 years. Since then, it has become the symbol of the City of Love, and one of the most popular tourist attractions in the world. So, how much is it worth?

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What Do You Call a French Appraisal?

First, a bit of terminologie. Is it called an “appraisal” in France? Or a “valuation”? French appraisers are known as évaluateurs immobilières. So “appraisal” would be une évaluation. There’s also another set of standards for French appraisals to follow. Appraisal standards like the U.S.-based Uniform Standards of Professional Appraisal Practice (USPAP) often apply globally for licensed and certified appraisers — up to a point — but France also relies on international standards known as International Valuation Standards (IVS), developed by the International Valuation Standards Council (IVSC). These two sets of guidelines ensure consistency across borders, no matter how unique the subject property may be.

Quick Stats About the Eiffel Tower

Valuing the Eiffel Tower: What USPAP Approaches to Value Would We Use?

As we take on this assignment, it’s important to remember that the scope of work determines exactly what is expected in an assignment, and how deeply that assignment is investigated. Learn more about scope of work before we get started.

1. Cost Approach

Getty Images If we had to rebuild the Eiffel Tower today, what would it take? The cost approach takes this into consideration, factoring in depreciation and variables. This method involves several steps:

• Develop an opinion of the site value as if the site were vacant. The highest and best use analysis was already completed before arriving at the approaches of values as required by STANDARDS RULE 1-3 of USPAP.

• Calculate the cost of materials (iron, labor, etc.). This is a key step based on the agreed-upon scope of work from our client, using either the replacement or the reproduction cost required to replicate it.

• Account for depreciation due to its age (built in 1889) and wear and tear. The straight-line depreciation method can produce credible assignment results for this step.

While insightful, the cost approach doesn’t capture the Eiffel Tower’s immense cultural and historical significance. After all, it’s not just a structure — it’s a French national treasure.

Dig Deeper: For a deeper look into this approach and discounted cash flow (which we’ll also touch on in the next section), check out this blog by Matthias Meitner at VALUESQUE.

2. Income Approach

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We can also develop our opinion of value based on the income the asset generates. For the Eiffel Tower, this could include:

• Revenue from ticket sales for visitors

• Income from restaurants, gift shops, and events hosted at the tower

• Licensing fees for its image and branding

For the income approach, we would analyze the flow of income and operational expenses to calculate the net operating income, and apply a capitalization rate (Cap Rate) or Discounted Cash Flow (DCF) depending on the scope of work, to produce a credible opinion of its estimated value.

Dig Deeper: For curious minds, take a look at some recent revenue and operating cost figures by the SETE (Societe d'Exploitation Tour Eiffel).

3. Sales Comparison Approach

Getty Images This method compares the Eiffel Tower to similar properties sold recently. However, a comparison is nearly impossible:

• The Eiffel Tower’s UNESCO World Heritage designation prevents its sale.

• There are no direct comparables because of its uniqueness. The Eiffel Tower is one-of-a-kind, even with structures like the Tokyo Tower offering partial resemblance.

Ultimately, this approach provides limited value, but the appraiser might still explore parallels in iconic structures for context.

Dig Deeper: There's nothing like the real thing! The World Atlas compiled a list of structures similar to the Eiffel Tower. While beautiful and sometimes funny homages, nothing beats the iconic French tower.

4. Historical and Cultural Affect

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USPAP requires all three approaches to value to be analyzed and only used when necessary for credible assignment results. This approach to value might not be credible based on the scope of work, but due to the sheer significance of this structure, we’ll show you what using this approach might look like. The Eiffel Tower’s value extends beyond its physical structure. Appraisers would consider its:

• Historical significance as a symbol of Paris and France

• Cultural impact as one of the most recognized landmarks in the world

• Tourism and branding value as a global icon

These intangible factors are difficult to quantify, but would significantly influence its valuation.

Challenges in Valuation:

• Intangibility: The Eiffel Tower’s value is deeply tied to its cultural and historical significance, which is hard to quantify.

• Uniqueness: As a one-of-a-kind structure, it defies traditional comparison.

• Ownership and Restrictions: The Eiffel Tower is owned by the City of Paris. This is part of the Highest and Best Use

Analysis as mentioned in the cost approach, when determining the site value. The appraisers must consider legal and public interest factors.

Reconciliation or Final Opinion of Value (for Fun)

At the end of each approach, you should come up with an opinion of value based on the factors you investigated. USPAP requires the appraiser to reconcile the quality and quantity of data within all the approaches used. Once you reconcile the applicability and relevance of the approaches, you’ll come to your final opinion of value... In this case, our value is €16 billion! Reviewing the approaches above and depending on the intended use, the income approach appears to be the most credible. It is not cost-effective for the Eiffel Tower to be rebuilt, and where would it be built? Despite its iconic shape and tremendous influence on French tourism, coming up with a final figure based on its intangible influence is not the most reliable way to indicate its value, but the income it generates from its gift shops, restaurants, and ticket sales can help inform us enough to give it this value.

What We Can Learn From Appraising a Landmark

There are lots of real-world lessons we can take from this theoretical appraisal, namely:

• The value of location, intangible assets, and functional obsolescence

• Connecting appraisal logic to nontraditional properties

Bon Voyage on Your Appraisal Journey

Well, évaluateurs immobiliers, c'était amusant! This was fun! The Eiffel Tower is more than an architectural masterpiece. It represents a universal connection to history, culture, and human ingenuity. While its estimated monetary value might stand at €16 billion based on our opinion and surface level appraisal, its true significance is incalculable — a priceless landmark that captures the world’s imagination. Love this appraisal? Check out our other fascinating destination valuations and learn how to evaluate iconic properties like a pro. Ready to dive deeper? USPAP is calling!