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Appraisal firm cultivates specialty in “oddball” properties

When Aaron Wright first entered the commercial real estate appraisal business 18 years ago, he found himself often assigned “oddball” parcels where the properties served as the place of business but did not directly generate the core income.

That presents a challenge to those trying to assess the value of the property in support of a real estate loan, the sale of a business or a challenge to a property tax bill. “We appraise all commercial real estate types: offices, retail, apartments, and industrial,” says Wright, owner and president of Specialty Valuation Group based in Dublin. “But 65 percent of what we do is ‘other,’ the ones that don’t fit into any of those groups.”

Typically, appraisers can look at rental income for a multitenant office, retail or apartment property to establish the value of a property as well as the overall condition of the real property and depreciation. “We’re (also) looking at comp (comparable) sales, other real estate that’s similar” to help set value, says Wright. “Owner-occupied properties—like gas stations, bowling alleys and body shops—are more of a tool for the business than income-producing.”

Such specialty properties, he says, demand care to separate the value of the business as a going concern and the furniture, fixtures and equipment from the real property. “We have to dig into it to see if the (appraised real estate value) is reasonable.”

Wright’s experience has included putting values on marinas, car dealerships, two Ohio auto racetracks, a landfill in northeast Ohio and quite a few funeral homes. Appraising funeral homes “is where I cut my teeth (as an appraiser),” he recalls. “We looked at death rates in the county and applied it to the subject property’s trade area and projected future demand based on the demographics.”

That industry continues to change as fewer people have traditional funerals and increasingly choose lower-cost but higher-margin cremation over cemetery burials. “The whole industry is adjusting to the trends,” Wright says. “I don’t see that business going away. It’s recession proof.”

Wright and the firm also have performed 40 appraisals of auto dealerships this year, a category especially appealing to the SVG executive. “I’ve always been a car guy, so that was a fun way for me to get into putting a value on dealerships,” he says. “It’s interesting to see what makes these properties tick, what drives the value.”

SVG stands out as one of a handful of commercial real estate appraisal firms not part of a commercial real estate brokerage firm. In his career, Wright has worked for the Columbus-based Integra Realty Resources appraisal and consulting firm as well as the Columbus office of the full-service Colliers International brokerage, where he worked before forming SVG in September 2016.

Columbus developer and senior veteran appraiser Bob Weiler agrees that special properties need extensive research and expertise to determine an accurate value. “Most of your appraisal firms do not specialize in unique properties, those that are one of a kind,” he says. That segment of the business does not make up the bulk of his practice or his firm overall. “But it can be important when it comes to the time involved,” he says, “and the compensation.”

Such focused firms, Weiler says, “know all of the ins and outs” of those distinct properties.

Wright says some properties can get valued just from considering recent costs associated with acquiring and developing the property even if it is unusual. His recent assignments, for example, include an unspecified banquet operation within a 15,000-square-foot “castle” built on 80 acres in southeast Ohio. The property also serves as the grounds for medieval reenactment gatherings. “It’s a new business,” Wright says. “Cost was the most applicable appraisal method because so much of the value is wrapped up in the land. It’s also new construction, so you don’t have the subjective estimates of depreciation.”

SVG has concentrated its work primarily in Ohio and surrounding states in the last 15 months. But it expects to establish satellite offices in Chicago and Charlotte, North Carolina, in 2018 even as it prepares to work with more law firms specializing in tax appeals as county auditors release updated property values and the tax adjustments that go with that. “We’ve been fully focused on our lender work since we started,” he says. “We’re anticipating an uptick in (property) tax appeals (as expert witnesses) this coming year.”


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