Our Proprietary Asset Valuation is more than a process…it is a discipline.
Be in control of your return… by knowing Current Value and directing Future Value …through Added Value Opportunity.
Performed for Seller Clients and on a retained consultative basis.
Our expertise facilitates the Directives of providing…….
Our Seller Clients with a “Bundle of Sale Proceeds” comprised of Current Market Value, a Percentage of Value Increase driven by Added Value Strategies … and a percentage of the difference between Current Value and potential Future Value.
Our Buyer/Investor Clients with vetted Added Value Opportunities.
Our Advisory Clients with an acute understanding of available Current and Future Value Increase derived from Added Value Strategy and NOI Perfection.
Defining, supporting and garnering these Three Elements of Value comes from a property specific Micro Analysis to determine multiple best course Added Value Strategies.
Bundle of Sales Proceeds
Current Market Value
A percentage of the difference between Current Value and … Increased Value from available Added Value Strategies
A percentage of the difference between Current Value and potential Future Value
Primary Use Values
The Directives are facilitated by defining Current and Future Use Values through four Primary Use Values:
Owner User Value is relative to ownership use but is comprised of four quantifiable elements:
- The Investment Value of the property based on what the owner would be willing to lease a similar property for.
- All capital improvement and maintenance become investments with returns and have favorable tax treatment.
- Depreciation is a good tax advantage
- Value of the rate of appreciation during the hold period
Investment Value is based on the intent, amount and type of return an asset provides. A simplification of Investment Value Return is consideration of Current and Future Capitalization Rate(s), IRR, Net Present Value, Discounted Value and Cash-on-Cash Return.
Partial or Ground Up Development Value (Learn More)
Assembled Development Value (Learn More)
Added Value Elements
These four Primary Use Values are defined and driven by available fundamental Added Value Elements:
Use Change or Repurpose has driven our adage ”Value is contingent on Use”. Every available use category has a different Market Value.
A school may have a Replacement Value to the user of $3,000,000. Converting the same building to apartments, condos and or office space may have a $10,000,000 value with a conversion cost of only $2,000,000.
We recently did a retained Development Feasibility for a light industrial site in Morris County that revealed an astounding Value Increase for the corporate owner. The site was purchased in 1998 for $5,500,000. The conversion to a within zoning residential use yielded an Estimated Market Value for the land of over $30,000,000.
Tenant Upgrade or Repositioning is usually an intended result of capital improvement. (See Case Study: 231-235 Claremont Avenue, Montclair, NJ)
Capital Improvement is one of the most controllable and least risk methods of increasing value. Converting a visually unappealing, poorly functioning or Functionally Obsolete element has extremely high returns.
Secondary Added Value Elements
Secondary Added Value Element consideration is the next and final step in our Proprietary Valuation Discipline:
The Sale/Lease Back can create considerable Value Increase and is an exceptional tool assisting in the financing and returns of an acquisition.
Owner Financing is recommended whenever possible. A seller garners interest income, favorable tax treatment and a higher selling price. The buyer may not have otherwise been financially able to fund the acquisition and funding costs are all but eliminated.
A 1031 Exchange completely changes the complexion of sale proceeds. Both buyer and seller benefit greatly from this piece of tax legislation.
Income Redistribution or Income “Backloading”….through portions or all of the tenant base can substantially increase NOI and Market Value.
Area Activity Value Drivers such as gentrification or planned institutional infrastructure improvement have a critical Value Impact.
Opportunity Zone Legislation was recently signed by Governor Murphy. This law provides exceptional Added Value Opportunity through tax treatment in 169 tracks within 75 municipalities in the State of NJ.