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Valuation Committee Meeting Notes.

The NCREIF annual conferences are typically some of the better attended, and the October 18--20, 2000, conference in Palm Beach, Florida, was no exception. The Valuation Committee started the morning with an update from Bruce Kellogg, MM, of Cushman & Wakefield, chair of the Standards Subcommittee, on the June 23, 2000, TAFAC meeting and proposed changes to USPAP.

Bruce then introduced Ben Henson, executive director of the Appraisal Subcommittee, who presented an update on temporary practice licenses. The NCREIF Board of Directors has approved signing a letter of support with the Valuation Committee requesting that the Internet become a more effective tool for appraisers requesting temporary practice permits.

Peter Goodell, MAI, with Marshall & Stevens, moderated a panel discussion entitled "Prophesying, Prevaricating, or Posturing: Appraisers Look into Their Crystal Balls to Answer the Ultimate Real Estate Question." The panelists shared their insights into methods and systems used to gather the facts and data necessary to make informed real estate valuations. Panel members included Dennis Duffy, MAI, of Radcliffe, Cali, Duffy, Hughes & Co.; Bill Miller of Appraisal Research Counselors, Inc.; Mike Sorich, MAI, of Integra Matonis, Mac Dermott, Sorich & Co.; and Gary Hill, MAI, with Realty Services International, Inc. Along similar lines, Peter Korpacz, MAI, with PricewaterhouseCoopers LLP, discussed the findings and conclusions of the publication theme, "More Tortoise...Less Hare," from Emerging Trends in Real Estate 2001, presenting an in-depth analysis of the 2001 commercial real estate markets. PricewaterhouseCoopers LLP and Lend Lease Real Estate Investments, Inc., jointly produce Emerging Trends in Real Esta te 2001.

The afternoon session started out with Richard Entin, an investment analyst with Houlihan, Lokey, Howard, and Zukin, presenting a discussion on "Valuation Issues Related to Public and Private Real Estate Companies and Their Underlying Securities." Following Richard's presentation was a panel discussion moderated by Joe Senko, of the RREEF Fund, on current NCREIF Standards for Valuation, Market Value Accounting, and Performance Measurement of Mortgage Liabilities. Panelists included Ross Prindle MAI, Arthur Andersen LLP; Jeff Kiley, PricewaterhouseCoopers LLP; and Joe D'Alessandro, Lend Lease Real Estate Investments, Inc. Members of the Performance Measurement, Accounting, Portfolio Strategy, and Research committees also attended these two afternoon sessions.

Jeffrey Fisher, PhD, of NCREIF, updated the committee on property value trends, open-end funds, and benchmark databases. Don Morse, of CB Richard Ellis Investors and past president of NCREIF, discussed the need to develop a Real Estate Appraisal Executive Summary Report to facilitate the gathering, reporting, and inputting of appraisal data into a database. Rick Wincott, MAI, CRE, with PricewaterhouseCoopers LLP, will chair this task force and update the committee at the February conference.

For the February 2001 conference in St. Petersburg Beach, Florida, the Valuation Committee will include a presentation by Tom Sanchez, with, on the Appraisal Institute and's commercial database initiative. Dennis Duffy, MAT, will moderate a panel discussion on appraising in hypermarkets. John A. Edge, head of valuations with Knight Frank, London, and vice-chairman of the International Valuation Standards Committee will present a discussion on international valuation standards. Other joint session presentations will include a panel discussion on open end fund and benchmark databases, and a discussion on the health of the hospitality industry and its impact on hotel/motels.

Real Estate Capital Market Symposium 2001: Up Close and Personal

On May 30, 2001, NCREIF, the Center for Advanced Property Economics, and the Commercial Real Estate Secondary Market and Securitization Association (CSSA) will sponsor "Real Estate Capital Markets Symposium 2001: Up Close and Personal." The event will be held as the opening symposium for the Spring NCREIF Conference from May 30--June 2, 2001, at the Copley Fairmont Hotel in Boston, Massachusetts. Charles G. Dannis, MAI, SRA, will be the master of ceremony, with the first panel discussion on "Commercial Real Estate Debt Markets" moderated by Marilyn Weitzman, MM, the Weitzman Group. Dr. Kenneth Patton, director of the REIT Center, New York University, will moderate a panel discussion on "The Pricing of Equity and Debt in the Era of Real Estate Public Markets." The third panel will be "Real Estate Cycles: The Cutting Edge in Valuation and Counseling," moderated by Peter F. Korpacz, MAT, director of the Global Strategic Real Estate Research Group of PricewaterhouseCoopers LLP. A keynote speaker will be added to the agenda. These same organizations sponsored a symposium in October 1999 entitled "Valuation and the Evolution of the Real Estate Capital Markets," and over 200 appraisers, fund advisors, academicians, and Wall Street representatives attended. Given the all-star line up for the May 2001 symposium, this will be an event you won't want to miss!

Real Estate Information Standards (REIS)

The Real Estate Information Standards are the result of the efforts of NCREIF, the Pension Real Estate Association (PREA), and the National Association of Real Estate Investment Managers (NAREIM). Real estate has become acceptable as an institutional investment vehicle, both in the private and public markets, and the Real Estate Information Standards is meant to be an information and reporting guide. A REIS Task Force meeting took place in Chicago on January 23-24 to perform a complete overhaul of the existing standards by tightening up some of the language, clarifying definitions, and reviewing the formulae. The Valuation Committee has been assigned the task of reviewing and rewriting, if necessary, the Standards for Internal Valuations. In this case, an internal valuation is an estimate of value prepared to fulfill a reporting requirement of a fund or client, and the Standards are meant to govern internal valuations prepared for reporting purposes. The Valuation Committee will discuss these issues at the February meeting, and in-depth working task forces will meet at the spring conference.

For more information on NCREIF and upcoming events, visit their web site at:

Ted E. McWilliams, MAI, SRA, is the 2000-2001 chair of the NCREIF Valuation Committee and director of Appraisal Services for Principal Capital Management in Des Moines, Iowa. He specializes in debt, equity, and pension fund commercial real estate valuations, as well as consultations, and portfolio analysis.
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Author:McWilliams, Ted E.
Publication:Appraisal Journal
Geographic Code:1USA
Date:Apr 1, 2001
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