What does the term "leasehold value" refer to?

Leasehold value specifically pertains to the value associated with the rights to use and occupy a property as dictated by a lease agreement. This value arises when a lessee, or tenant, obtains permission from a lessor, or property owner, to use the property for a specified period of time under the terms outlined in the lease.

Understanding leasehold value is crucial because it reflects the worth of the space and the benefits the lessee receives during the lease term, as opposed to the broader market value of the property if it were sold outright.

The other options point to different concepts in property valuation. The total market value of a property when sold refers to its fair market value rather than the specific rights under a lease. The price agreed upon for the sale of a property denotes a transaction price rather than ongoing rights to use a property, while the estimated cost of developing a property relates to the expenses incurred in creating or improving a space, which does not capture the essence of leasehold value.