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interests held as tenants in common and real property partnership
interests. The information he received from one company
marketing public and private partial interests was that those
interests are typically discounted between 35 and 70 percent,
depending on certain factors. Another company marketing only
privately held interests reported a tighter range of 42-percent
to 49-percent discounts for privately held, family-oriented
general partnership interests. A third source of data for real
estate partnerships reported that during 1993, the average
discount for such an interest in the triple-net lease category
was 20 percent.
Hulberg found the indicated discount range for a triple-net
lease property with a 47-percent loan-to-value ratio, such as the
Kmart property, using these comparison figures, was between 20 to
51 percent. He estimated the proper discount to be 35 percent
due to the flat rate of income on the Kmart property. He found
that partnership interests with similar characteristics to the
Walgreen property had an average discount of 20 percent, which he
adjusted for control and marketability, arriving at a discount of
30 percent. The 35-percent Wells Fargo property discount was
based on the same 20-percent figure, adjusted for the lack of
investment appeal for an older building and for marketability and
control.
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