- 143 -
value of the subject properties must be based upon the bulk
purchase price, the wholesale price, rather than the value of
each single unit because:
The potential market risk [to each partnership] is
actually related to multiple units and not a
single unit as would be unrealistically reflected
by the EPIC/CAG approach of solely obtaining
individual unit appraisals.
In his testimony, Dr. Hewitt elaborated on that concept as
follows:
What I was illustrating in the report is that
if you look at the way Epic appraised the
properties, they specifically, by the directive of
their captive appraisal group, dictated that the
appraisals be done on an individual basis, despite
the reality that their purchases were done in
bulk.
And what I am saying is is [sic] that
discount was represented because of the fact that
they, in fact, had a risk exposure relating to a
bulk purchase, so they paid a fair price for
buying 50, 60, 150 or 200.
They may have–and I am trying to illustrate,
which is really the difficult concept in this
whole Epic matter-–is there is a significant
difference between the one-house-at-a-time
appraisal versus the risk, the portfolio risk
of having 50, having 100, having 250.
On the basis of that statement, respondent asks the Court to
make the following finding of fact:
Page: Previous 133 134 135 136 137 138 139 140 141 142 143 144 145 146 147 148 149 150 151 152 NextLast modified: May 25, 2011