Extreme Appraising Valuing CRE in a Down Market

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AI 7.0 Hrs.                                           

AIPOINTS - 35.0 Points

BREA APPROVED – 7 Hrs.  

ZOOM LOG IN: 8:00 AM PST

CLASS STARTS 8:30 AM PST

CLASS ENDS 4:30 PM PST

ONE HOUR LUNCH 12:00 PM - 1:00 PM PST

ZOOM LOG IN INFORMATION WILL BE EMAILED ON 03/09/2020

Given the possibility of declines in the value of CRE as a result of COVID-19, this seminar will address critical issues, often misunderstood even by experienced commercial appraisers, in valuing property in a declining market.

The seminar will be based on a hypothetical case study property, a multi-tenant office building. The primary focus of the case study is to value the property “as is” and “when stabilized”, using all three valuation approaches, based on the following circumstances:

1. The property is 50% vacant in a market experiencing 20% vacancy, thus necessitating the proper measurement of a rent-up adjustment to be incorporated in all three approaches to value the property “as is”.

2. The market is forecast to experience on-going, but temporary, external obsolescence based on a detailed fundamental market analysis, which will be demonstrated using current methodologies and also incorporated in valuations.

In addition, the case study property also incorporates two other issues that will need to be addressed in the valuations.

1.       One lease at the property was first negotiated when the market was much stronger. The rent for this lease was recently reduced and the term extended, in a so-called “blend and extend” renegotiation, but is still above market, therefore necessitating a “property rights adjustment”.

2.       Another lease includes an apparent higher than market rent due to substantial landlord provided concessions, therefore necessitating a measure of “effective rent” for purposes of forecasting the rent at the time of lease renewal.  

All of these issues will be discussed and then analyzed entirely in Excel, although attendees do not need to be an Excel expert to benefit from the seminar.

Cancellation Policy

Cancellation Policy:

    Up To 15 days prior to program start date, $50.00 cancellation fee.

    2 - 14 days prior to program start date, $100.00 cancellation fee.

    Less than 2 days prior to program start date, forfeit of payment.

Additional Information

SCHEDULE:

8:30 am - 9 am Part 1: Overview of Case Study Property

9 am – 9:30 am Part 2: Purpose and Summary of the Market Analysis

9:30 - 10:30 am Part 3: Addressing an Above-Market Lease with a Property Rights Adjustment

10:30 – 10:45 am Break

10:45 am – 11:15 am Part 4: Measuring Effective Rent for a Lease with concessions

11:00 am – 12:00 pm Part 5: Calculating the Rent-Up Adjustment for the “As Is” Valuation                                                 

12:00 pm – 1:00 pm Lunch Break                                                                            

1 pm – 2:30 pm Part 6:  Market Analysis: evidence of External Obsolescence/Methods of calculating              

2:30 – 2:45 pm Break                                                                                         

2:45 – 4:15 pm Part 7:  Determining the “When Stabilized” Value via the Income, Sales Comparison and Cost Approaches

4:15 – 4:30 pm Part 8:  Reconciliation and Wrap-up  

Disclaimer Information

Photo Verification: REQUIRED
As part of the required attendance monitoring, all students need to provide the Chapter Office with a copy of your Driver's License in advance of the offering. 

• Simply take a picture of your DL with your phone or send a scanned copy to lianna@sccai.org
• Registrants who have not yet forwarded their photo IDs will be ineligible for credit and will be prohibited from attending the seminar

Seminar Hours 

Onsite check-in begins at 8:00am on Thursday, March 11, 2021.  This will provide registrants an opportunity to work out any last-minute technological kinks before instruction begins.  The seminar will begin at 8:00 am and will conclude by 4:30pm.   

National Disclaimer

This Educational Program was developed by an outside party. The Appraisal Institute Chapter made arrangements for the Third-Party to offer the Program with the intent of addressing topic(s) based on a certain chapter or local need for such topic, solely educational and informational purposes. The Appraisal Institute national organization was not involved in developing or organizing the Program and does not endorse the Program or its content.

The content of this Program, including but not limited to any written materials and presenter comments, does not represent the viewpoint of the Appraisal Institute (defined as including but not limited to, the national organization, its Regions, Chapters, members, candidates, affiliates and staff) unless formally adopted by the national Board of Directors. Further, the Appraisal Institute has not peer-reviewed or approved the content of the Program and does not warrant the accuracy or timeliness of the content of the Program. The Appraisal Institute does not publish examination review materials. The content of the Program is subject to court decisions and local, state and federal laws and regulations and any such revisions of such laws and regulations.

This Program is presented with the understanding that the Appraisal Institute is not engaged in rendering legal, accounting or other professional advice or services. Nothing in the Program is to be construed as the offering of such advice or services. If expert advice or services are required, attendees and readers are responsible for obtaining such advice or services from appropriate professionals.