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Evaluation Of Partial Interest In Commercial Properties?

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rmbirch

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Apr 5, 2016
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Certified General Appraiser
State
North Carolina
Any good references? Court cases? What types of things can you discount for? Things to stay away from? Thanks! RMB
 

Gobears81

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Joined
Nov 7, 2013
Professional Status
Certified General Appraiser
State
Illinois
Can you provide a little more information? Partial interests related to ownership? Or are you referring to partial interests in the context of leased fee/ leasehold?
 

Terrel L. Shields

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May 2, 2002
Professional Status
Certified General Appraiser
State
Arkansas
The IRS frowns on large discounting & divorce generally gets no discount. The more partners the higher the discount. I would back it up with a similar transaction.
 

Peter LeQuire

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Joined
Jan 3, 2005
Professional Status
Retired Appraiser
State
Tennessee
Lum Library ought to have helpful information on partial interest valuation.
 

Gobears81

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Nov 7, 2013
Professional Status
Certified General Appraiser
State
Illinois
I've always taken care of the value of the whole, and passed on the partial interest valuation to a CPA, but maybe that's just me.
 

Peter LeQuire

Elite Member
Joined
Jan 3, 2005
Professional Status
Retired Appraiser
State
Tennessee
This is an older article published in The Appraisal Journal: “Valuation of Fractional Interests in Real Estate Limited Partnerships - Another Approach” published in the Appraisal Journal, a quarterly publication of the Appraisal Institute, April, 1992.)
 

DWiley

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Apr 4, 2007
Professional Status
Certified Residential Appraiser
State
Tennessee
The AI has a book on the subject as well.
 

Michigan CG

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Joined
Nov 1, 2006
Professional Status
Certified General Appraiser
State
Michigan
The data is very hard to come by. I give folks an appraisal of the property and they can figure the rest out for themselves. I have never had a complaint.
 

Terrel L. Shields

Elite Member
Gold Supporting Member
Joined
May 2, 2002
Professional Status
Certified General Appraiser
State
Arkansas
This is what business appraisers do. So outside of mineral interests where there is no discount to deal with, I don't value LLC discounts, feuding partners, etc.
 
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