This year’s 2014 NAPTA annual conference took place at Caesars Palace in Las Vegas from September 28-29, 2014. Paul Alfano attended as New Hampshire’s representative. Some key takeaways:
Repositioned properties
Following the market downturn, properties formerly occupied by malls, drugstores, and manufacturing plants, among other property types, were re-positioned to other uses, resulting in a different highest and best use. Costs that should be factored into the appraised value of these properties includes things like governmental approvals, demolition, environmental issues, new infrastructure and roads, and buying out existing contracts.
Korpacz prefers sales and local surveys for cap rates
Peter Korpacz, creator of the Korpacz Real Investors Survey (n/k/a the PwC Real Estate Investor Survey), gave a talk on cap rates. He believes the best source for cap rates is sales of comparable properties, with prices and other terms verified by the person doing the valuation. Local investor surveys are the second best source. (Ironically, he ranks published surveys, such as his former Korpacz reports, as the third best source.)
Intangibles
Mr. Korpacz also believes intangibles should be included in the valuation of real estate if the market takes them into consideration. The credit-worthiness of the tenants, for example, may materially impact the price a buyer may be willing to pay. Intangibles continue to be a hot topic as the Appraisal Institute tries to find consensus on how they should be valued.
Other speakers included Heather Reichardt from Marriott International, Elaine Guidruz from Full House Resorts, Susan Elman from Rousse Properties, Peter Arbour from the Ford Motor Company, Richard Marchitelli from Cushman Wakefield, and NAPTA’s own David Wilkes.
Alfano Law Office, PLLC is New Hampshire’s sole member of NAPTA.
