Real Estate Fund Valuation

Objetive

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

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

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

1. 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)

 

2. 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)

 

3. Price per Share

– Entity Control Analysis – Partnerships

– Marketability Analysis