Appraisal Matters

I’ve worked with John for 13 years and although I am an appraiser, for marinas I am a data gatherer and general muse for him.  I’m also the one that begs and pleads for data in a market that is very closed to providing income information.
Over the years we’ve come across tons of marinas that [...]

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Like my prior post on ceiling height, sprinkler adjustments should not be done by rote.  Here’s why:

Most brokers I’ve met say that sprinklers do not matter.  Developers only put them in when they have to because they do not get extra rent for them; why incur the cost?
Sprinklers are now generally required by code and [...]

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Too many times, appraisers adjust by rote, which in the case of ceiling height, can be incorrect.  The following needs to be considered before applying a ceiling height adjustment to a comparable sale:

Differences in ceiling height may not be functional obsolescence.  If the subject is in a small industrial building manufacturing market, lower ceiling heights [...]

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A property where supply is so low yet demand always seems to remain high has no downside, right? Guess again.
Ironically, unless they are trophy properties, they are frequently more difficult to sell.  Conventional financing vehicles, which often represent the vast majority of potential financing available, do not work because the properties usually don’t "appraise" for [...]

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As appraisers, we apply a market condition in our appraisals when property values go up and down. But does that mean the adjustments apply to an entire class of properties and that there are no exceptions?
T    Thinking back to Economics 101, price is set at the intersection of the supply and demand curves. [...]

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We’ve had some interesting round table discussions about reserves in the office. The big question is why don’t we see reserve line items on income statements or as a separate deposit/bank account on the balance sheet? For marinas, this is an even more important question because it seems that lenders don’t understand how [...]

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Bar and restaurant appraisals are interesting assignments. Unless you are going for an SBA loan, the lender only wants to lend on the "bricks and sticks." They are not interested in the bar equipment (AKA FF&E), business value or good will. The hardest part of this type of assignment is how to [...]

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So many people in real estate think there is only one cap rate. Did you know there are at least 3 real cap rates and a bunch of "estimated" cap rates? Let’s count the real ones.

Using the seller’s last year income (like what assessors use) and current year sale price
Using the seller’s proforma [...]

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So often when we appraise properties where the business is tightly held with the real estate, it is very difficult to separate the business from the real estate. This is most common in restaurants, bars, marinas and hospitality properties. When a business is dependent on its real estate to function (an office could [...]

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