Appraisal Matters

So now we know reviewer rules.  Let’s turn the cover page, take a quick look at the value conclusion, page past the table of contents and get right into it.
An Introduction Is In Order
The Introduction section of a marina appraisal seems like a no-brainer.  Just slap some boilerplate in there, right?  That works for some [...]

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Well, I never thought that mass picture taking was a profitable model.  I went to their presentations and did not “buy” any territories.  There is no profit model especially since real estate gets changed, knocked down, etc.  Here is the press release.  Although they don’t say they are closing their doors exactly, it certainly appears [...]

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I’ve gotten numerous calls that people cannot find John’s book on marinas.  It is available through the Appraisal Institute and they have 500 in stock.
Some online systems state they cannot get the book.  This is mainly because Amazon does not have it in stock.  We’ve seen used ones online selling for hundreds.  Don’t do that!  [...]

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As you might guess, I am called on to review appraisals of marinas.  Most of the time it’s to find ways for an attorney to attack another appraisal.  Often it’s for a bank or an investor who now has a troubled property.
So we don’t get off on the wrong track, how about some ground rules?

I won’t [...]

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Over the years, I have found one property type that seems plagued by a riddle.  Not the riddle of the sphinx, but one almost as difficult to solve.  The riddle applies to industrial properties and it goes like this:  When does real estate become business?  The answer is when many of its components are so [...]

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At this point, the mall has lost one, and more likely, more than one anchor.  The higher-end national tenants have left or renegotiated their leases to the detriment of profitability for the owner.  The landlord has or is considering taking on obvious temporary tenants and the future of the mall is uncertain.  Along comes the [...]

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At this point, the mall’s competitiveness has declined enough for all to see.  That’s not say that it isn’t viable… it’s just not the investment vehicle it used to be.  The cash cow has been put out to pasture.  The regional mall is at the critical stage where it either lives or dies.  It makes [...]

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Now we’ve lost one or more anchors from our regional mall.  Pedestrian traffic is down.  The dollar amount of sales drop for certain stores such as those that were synergistic with the lost anchors (the best example being fashion or clothing stores that are synergistic with a major department store).  Tenants are talking.  Who’s going [...]

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So the grand opening of the new mall is complete.  Some tenants at our subject mall may have left.  Some may be in the process of leaving.  Typically, the vacancy with inline bays is not sufficiently material to be noticeable to the public.  What is noticeable, however, is the loss of one or more anchors.
Stage [...]

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Continuing from Part 1, we have five more secrets to regional mall tax appeals.
Rule # 6 - Welcome to the World of Investment Grade Real Estate

Sure, the first tier regional and super-regional malls are the prize of REITs.  However, when you look at the ownership of second and third tier regional malls, something stands outs.  [...]

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Over time, regional malls and other types of shopping centers go through a life cycle.  This has been discussed in professional journals, so it is no secret.  I’d like to put my spin on the topic to address what life cycle means to profitability and market value.
Pre-Stage 1 - The Catalyst…
Before I address the “decline [...]

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I was reminded today by Tom DeLotto, CMM, of IGY how important management is to a marina.  Appraisal theory clearly states that market value is to be based upon competent management.  That being said, many investors entered the market without the specialized knowledge needed for a marina to succeed.  We see it all the time [...]

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We’ve all gone to many regional malls in our lifetimes.  They don’t appear to be mysterious or difficult to comprehend.  There are lots of articles about them and malls are always in the news somewhere.  The income and expense statements are made available to Assessors and market value is all based on the income approach.  [...]

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Theatres are an integral part of a regional mall.  They draw huge numbers of people.  We have a great example of that in Arundel Mills, a racetrack-designed super-regional mall.  During weekends (typically the peak shopping days of the week), almost all parking spots will be filled around the theatre and extending for some distance away [...]

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Older regional malls face a quandary.  They need to be renovated to keep competitive with newer regional malls, yet this is a very expensive proposition that rarely is financially feasible.  That’s the Catch 22.  Even with good demographics, there are certain typical realities that prevent older regional malls from going forward that are recognized by [...]

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Earlier, I posted an article on Marina Value in Use.  The amendment that is on the ballot in Florida is exactly what I meant to convey in that article.  We need to save the marina industry by taxing it much more like agricultural land rather than for its speculative, nebulous residential potential development.  The entire [...]

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We have investors who are looking to buy.  It might not be at the top dollar that you want, but they have cash in hand and are ready to go.   We can help put you together with these investors and help you avoid foreclosure or further loss.  We are working with many marina owners right [...]

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As the current recession gets deeper, its effects become more obvious and well known.  We’re used to seeing lots of discount signs in store windows that disappear when things get a little better, only to appear again when retail sales soften. Back and forth, back and forth. Vacancies can increase too.  These are just the [...]

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It’s easy to see what’s going on with retail and regional mall vacancy rates - just Google and read articles posted on line.  What if I said that everything all the media outlets are telling you about retail vacancy rates is dead wrong?
I know what you’re thinking.  A regional mall’s vacancy rate is easy to [...]

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A regional mall’s temporary tenant is a sure sign of either a weak retail economy or that the mall is in a declining competitive position.  You’ve seen lots of these and probably haven’t really noticed that they are temporary tenants.
How do you spot a temporary tenant?

The level of finish inside is of a materially lower [...]

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Blogs, not years.  We wouldn’t want to predate Al Gore’s “discovery” of the Internet:)
We’ve been blogging since February 2nd of this year, about eight-and-a-half months.  Considering Eileen has her own personal blog, I’m working on a new book and we already write for a living as part of our appraisal practice, 100 blogs is not [...]

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Having helped John research marinas for the past decade, I’ve spoken with an untold number of marina owners and managers.  I’d like to add my own perspective on the industry.
This is what the marina industry needs (in no particular order):

Lenders that are willing to work with troubled loans;
Owners willing to work with lenders on troubled [...]

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So we’ve explored unique aspects of appraising automobile dealerships and delved into the three approaches to value.  It’s time we went “outside the box” and discussed a topic that real estate appraisers are generally uncomfortable with:  alternative valuation techniques and business value.
Why Nontraditional Valuation Techniques?
A typical purchaser of an automobile dealership typically buys the real estate, [...]

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Reserves Based on What?
One question that is seldom addresses with reserves is what they are based on. If a marina has a large income from fuel sales, do we apply a percentage that includes them? Do we apply that percentage based on total fuel sales or just the gross margin? Since many marinas do not [...]

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Reserves for replacement, also referred to as a capital reserve, are monies set aside periodically to pay for replacement of short-lived items.  For a marina, I’ve found that this is a particularly “sticky wicket” because the “one size fits all” model just doesn’t work.
Reserves as a Line Item
Having reviewed a number of marina income and [...]

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