- 23 -
partnership’s real property. On brief, respondent challenges
certain aspects of Dvorak’s appraisal and argues for adjustments
that would increase the value of the real estate. Keith’s real
estate valuations are not challenged. Finally, respondent
challenges, and proposes adjustments to, various aspects of
Beck’s appraisal of the partnership entities.
Value of the Housing Partnerships’ Real Estate
Keith’s valuation estimates for the real estate held by
Clinton ($665,000) and Rocky Mount ($1,400,000) are not disputed,
and we accept them for purposes of this case. Respondent does
challenge various aspects of the approach used by Dvorak to value
the real property held by Monroe and Charlotte. We consider
each.
Dvorak’s Report
Dvorak applied three general approaches in valuing the
improved real estate: (i) The cost approach, (ii) the direct
sales comparison (market) approach, and (iii) the income
approach. The cost approach consisted of valuing the land of the
subject property by examining comparable sales and valuing the
improvements on the land by considering cost of construction,
taking into account depreciation and obsolescence. The market
approach consisted of examining sales of comparable properties to
estimate the cost of the subject property. The income approach
consisted of discounting to present value the future income
stream of the subject property for a number of years into the
Page: Previous 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 NextLast modified: May 25, 2011