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real estate in the Flint area totaled $1.5 billion, excluding real
estate owned by GM, and approximately $2.2 billion if GM was
included. He stated that reported real estate sales in Genesee
County totaled $255 million in 1992.
Mr. Shanker next analyzed the amount of time that was needed to
dispose of the subject property and concluded that this factor
supported applying a market absorption discount.12 He looked to each
parcel of the subject property separately and concluded that it would
take 18 months to sell each parcel. He stated that the appraisers
assumed that each parcel of the subject property had to be marketed
for 18 months in order to sell it.
Mr. Shanker then analyzed the trend of the market as it applied
to a blockage discount. According to Mr. Shanker, an upward trend in
the market indicates that a block of shares can be sold at the quoted
price within a reasonable amount of time, which negates the
applicability of a blockage discount, while a downward trend leads to
the contrary proposition. He concluded that this factor supported
applying a market absorption discount to the subject property. He
stated that the value of real estate in Flint peaked in 1990 at $2.35
billion and declined to $2.25 billion at the end of 1992.
After analyzing his factors and concluding that a market
absorption discount applied to the subject property, Mr. Shanker
12 Mr. Shanker believes that a market absorption discount
applies to any asset if it takes more than 6 months to sell it.
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