- 34 -
percent with a range from 30 percent to 40 percent. Here, again,
Hulberg’s explanation reflected that REIT’s are operating real
estate partnerships that are dissimilar from the simple
coownership of realty that we consider. The REIT is an entity in
which investors purchase a percentage as an investor in the
activity or business operation in which the REIT is involved.
Accordingly, the REIT-based approach to calculate a discount is
not appropriate.
Finally, Hulberg referred to his four proposed comparable
sales that he admits “are not highly similar to the subject
property but they do indicate discounts are being taken by the
[purchasers] of * * * fractional interests, and that there is a
market for partial interests in a property.” The range of
discounts was 29 percent to 41 percent. The sales selected by
Hulberg included a produce terminal, undeveloped unapproved land,
an office building, and ranchland. The undeveloped unapproved
land was described as “Standard Oil Pond Grizzly Island (Solano
Co.)”, and Hulberg explained that the property was valued at
$800,000 for a fee and a 25-percent interest was sold for
$130,000. No further information is provided, and it is not
apparent that this property is comparable or how the $800,000 and
$130,000 values relate to each other. Accordingly, we do not
find these examples to be helpful.
Hulberg then proceeded to conclude that the various
referenced approaches resulted in discounts approximating 40
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