Going Concern Appraisals: “Specific Properties Require Specific Skill Sets”
Going Concern (Total Asset) appraisals report an opinion of value for properties- like a hotel- where the business and real estate are linked together with the assumption that these components will continue together into the future. In performing Going Concern appraisals, Lamb Hanson Lamb staff must also consider the business’ reputation and brand while allocating their value.
The Appraisal Institute further defines going concern properties by their limiting physical design, construction materials, and layout. Properties such as adult family homes, assisted living, self-storage, hotel/motel, marina, bowling alley or golf course, for example, cannot be adapted for a different use without an extensive commitment of time and cost.
The U.S. Small Business Administration (SBA) issued appraisal policies for these change-in-ownership transactions in 2015. SBA shifted the categorization of going concern appraisals from business valuation to real property valuation. By doing so, MAIs and Certified General Real Estate Appraisers become rightful experts in going concern valuation, as such analysis has been returned to its appropriate categorization as a real-property endeavor.
Furthermore, the SBA policies state that the appraiser must be able to demonstrate experience having conducted four similar going concern appraisals in the past 36 months. Lamb Hanson Lamb has completed required coursework on intangible assets, enhancing our abilities perform these valuation assignments. Discuss Going Concern appraisals with the team today!