Appraisal Journal articles from January 1998

Appraisal Journal archives from January 1998

The evolution of land valuation in China.
January 1, 1998... The first research studies on urban land value and prices in the People's Republic of China came about very recently. It was not until the early 1980s, following the government's decision to make major reforms in its urban land policies that the...

Impact of commercial development on adjacent residential properties.
January 1, 1998... In New England, communities are assessing the economic impact that commercial developments have on the community at large. Will a commercial development have a negative influence on adjacent residential properties, for instance. When the...

Valuing small businesses: the cost of capital.
January 1, 1998... When valuing a small business, appraisers are often restricted to discounted cash flow approaches. The cost approach to valuation fails to capture many of the intangible assets for small businesses in which reputation, relationships, managerial...

A modified equity valuation model that yields the true maximum value.
January 1, 1998... Investment value is a maximum price to be paid by a particular buyer or a minimum price to a particular seller. According to The Appraisal of Real Estate: Each voluntary purchase or sale of real estate is based on an investment value decision...

Principle of production: a logical premise for the cost approach.
January 1, 1998... Debate persists over many aspects of the cost approach, but one aspect has not received sufficient attention. The five principles of appraisal that are supposed to premise the cost approach do so inadequately. The fundamental logic driving the...

Project feasibility using breakeven point analysis.
January 1, 1998... When a client asks the question, what is my breakeven cost on this project, he is really asking, "When will my project have a breakeven cash flow if I obtain typical financing?" Important questions like this can be answered using the breakeven...

Mortgage-equity analysis in contaminated property valuation.
January 1, 1998... Mortgage-equity analysis provides a framework that allows for adjustments to the key parameters necessary for estimating the effects of contamination on real property value. This framework offers a mechanism to address one of the most difficult...

The elusive definitions of NOI and OAR. (net operating income; overall capitalization rate)
January 1, 1998... An article that appeared in a popular industry publication indicated that real estate investment professionals commonly use three distinct methods of calculating net operating income (NOI).(1) It revealed inconsistencies in deducting reserves for...

Testing the reasonableness of discounted cash flow analysis.
January 1, 1998... Appraisers, supervisory appraisers, and review appraisers have the responsibility of reviewing discounted cash flow (DCF) analyses. The first level of review requires that the assumptions be justified by market data and expectations. The Uniform...

Applying the DCF model in China's transitional market. (discount cash flow)
January 1, 1998... With a transaction volume of over 400 pieces of land (or more precisely land use rights) between 1988-1993 and an additional 400 pieces between 1994-1995, Shanghai is, beyond doubt, a very active land market even though it may not be operating on...

Real estate industry will benefit from utility deregulation.
January 1, 1998... Recent legislation passed in several states will make it possible to deregulate the utilities industry between 1997 and 2001.(1) Congress is also expected to set minimal rules on interstate power distribution. As with the telecommunications...

is the notion of preservation value extinct?
January 1, 1998... For some time, a controversy has been raging in and outside the appraisal industry over how to value land suitable for environmental preservation. Despite their internal differences of opinion, this controversy has pitted government agencies and...

Better measurement of apartment vacancy and collection losses.
January 1, 1998... Historically appraisers have relied on surveys, either in person or by phone, to ascertain the vacancy levels of competing multifamily apartment communities for use in their income approach analyses. The primary technique for researching vacancy...