- 45 -
turned to ascertaining the amount of this discount. He analyzed nine
RTC transactions that occurred in Michigan from December 28, 1990,
through July 20, 1992, and ascertained that these properties sold at
discounts from appraised values ranging from 11 to 94 percent, with a
mean of 31 percent and a median of 20 percent. Mr. Shanker settled
on a discount rate of 20 percent. Mr. Shanker reviewed some court
cases and some academic studies on blockage discount to assure
himself that 20 percent was the correct discount rate.
The third witness whom the Court recognized as an expert was
Douglas K. Hodge, MAI, ARA (Mr. Hodge).13 Mr. Hodge was retained by
respondent to complete a market absorption study on the apartment
complexes, and we recognized Mr. Hodge as an expert on real estate
appraisals, including the applicability of a market absorption
discount. Mr. Hodge has been the president of Hodge Appraisal Group,
Ltd., from 1991 to date, he received a bachelor of science in finance
in 1983, and he has lived in Michigan all his life. He began
appraising real estate in 1983, and he is a certified real estate
appraiser in the States of Michigan, Ohio, and Colorado and an ASA
candidate with the American Society of Appraisers. He has valued a
number of multifamily, retail, and industrial properties in the Flint
area, and he has valued many large apartment complexes in Genesee
13 The designation of ARA is awarded to qualifying members
of the American Society of Farm Managers and Rural Appraisers,
and it is the highest professional designation offered by that
society.
Page: Previous 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 NextLast modified: May 25, 2011