Cap Rates Fluctuate with the Market – By John G. Flaherty

Appraisers are frequently asked where “cap rates” are heading – another way of asking whether values are going up or down. The capitalization rate (cap rate) is the ratio of net operating income to property price. It determines the return on investments. Fluctuating cap rates have a significant impact on property values. The capitalization rate […]

How is Value Created? – By Clayton J. Shultz

The time-honored understanding of the purpose of a business is that it exists to maximize the wealth of its shareholders. Despite much agreement on this definition, there is relatively little agreement on how firms should go about maximizing this wealth. In fact, this is perhaps what makes business such a dynamic endeavor. This article focuses […]

Real Estate ‘Use Value’ in Business Enterprises – By Charles A. Miller

The concept of “value” is paramount for the business and real estate communities. Vast sums of capital are committed based on opinions of value. Value is also a key component in litigation and taxation matters. When valuing real estate and businesses, the most commonly used standard of value is that of “market value”. There are […]

Appropriate Use of the Development Cost Approach in Condemnation

By: Christopher J. Stockness In the majority of condemnation cases, damages relate to the loss of value under a property’s highest and best use (HBU) – often the property’s current use. A knowledgeable appraiser can quantify this loss by performing a before and after valuation using the three standard approaches to value. However, what happens […]

Testing Minnesota Statute 117.186 as It Relates to Business Damages (Loss of Going Concern) in Condemnation – By Scot A. Torkelson

Introduction On September 9, 2008, a Court-appointed Commission recognized an important threshold of damages in the area of condemnation law. The decision (State of Minnesota v. Parcel 212 Kindercare) came thirteen months after the Interstate 35W bridge collapse which precipitated the condemnation and taking of the subject real estate. The taking closed and, ultimately, destroyed […]

Is Assessed Value Based on Market Rent or Contract Rent? – By Andrew T. Donahue

Walgreen Co. v. City of Madison On July 8, 2008, the Wisconsin Supreme Court reversed a 2007 Wisconsin Court of Appeals decision and remanded it for further proceedings. In the case of Walgreen Co. v. City of Madison, at issue are the 2003 and 2004 assessed values for two Walgreens properties in Madison, Wisconsin. Walgreens […]