Definition / Objective
Value a real estate fund from an impartial viewpoint with a qualified team of professionals:
- Robert L. Dragoo MBA, MAI, MRICS
- Bryan L. Dragoo MAI, MRICS
Property Types / Opportunity
- Increase the level of transparency
- Implement systems to improve the efficiency of portfolio analysis and fund raising
- Internal decision making, financial reporting, third party negotiations
Approaches, Relevance & Methods / Solution
Deliver a valuation report that follows the guidelines laid out by the IPA* and that adheres to international valuation standards:
- Value the real estate fund every 2 years after the initial offering
- Follow the ethical code of the Appraisal Institute, USPAP and International Valuation Standards
- Report written by a member of the appraisal institute with the MAI designation or equivalent
- Concluded value based on the individual asset values – utilizing discounted cash flow methods and Argus software
- Valuation of Publicly Registered, Non-Listed REITs.” Investment Program Association, 2013, ser. 01, 29 Apr. 2013. 01.
Deliverable Structure & Scope
- Valuation of the Assets that Comprise the Portfolio (Asset Approach)
Summary of the asset including the verification and modeling of the following variables:
Wholly Owned Assets
- Discount Rates
- Capitalization Rates
- Growth Rates – Inflation
- Market Rents
Partial Interests
- Discount Rates
- Income Participation Rates
- Capitalization Rates
- Growth Rates – Inflation
- Market Rents
- Equity Balances
Land
- Comparable Sales, Comparable Rents (Comparable Method)
- Residual or Discounted Cashflow (Income Method)
Discount Rates
Sensitivity Analysis
Discount Rates
Capitalization Rates (Entry)
- Net Asset Value of the Assets (NAV, Net Asset Value)
Financial Analysis of the Entity
- Short-term Debt
- Medium and Long-term Debt
- Minority Interests
Preferred Return, Special Interests, Return Incentives
- Performance-based return adjustments (Waterfall)
- Price per Share
- Entity Control Analysis – Partnerships
- Marketability Analysis
