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Hotels / Motels Valuation Guide > Download Complete Valuation Guide (3.20 MB PDF)
PREFACE
THE AUTHORS
ACKNOWLEDGEMENTS
DISCLAIMER
1.0

INTRODUCTION
1.1 Scope of the Guide
2.0 LEGISLATIVE FRAMEWORK
2.1 Assessment as a Creation of Statute
2.2 MGA Provisions Relevant to Hotel/Motel Valuation
2.3 MRAT Provisions Relevant to Hotel/Motel Valuation
2.4 Mass Appraisal Requirement
3.0

HOTEL / MOTEL PROPERTY TAXES
4.0 HOTEL / MOTEL MARKET SEGMENTATION
4.1 Location
4.2 Quality Classes
5.0 COMPONENTS OF HOTEL / MOTEL GOING CONCERNS
5.1 Real Property
5.2 Tangible Non-Realty Assets (Personal Property):  Furniture, Fixtures and Equipment (FF&E)
5.3 Intangible Non-Realty Assets (Personal Property)
6.0 HIGHEST AND BEST USE ANALYSIS
6.1 Conclusions of Highest and Best Use
6.2 Excess/Surplus Land
6.3 Highest and Best Use and Market Analysis
7.0 SALES REVIEW AND EDITING
7.1 The Importance of Sales Review and Editing
7.2 The Need for Consistent Methodology
7.2.1 Step 1. Confirm the sale with the participants and request documents.
7.2.2 Step 2. Inspect and confirm the inventory of the sold property.
7.2.3 Step 3. Complete the sales analysis and edit.
8.0 APPROACHES TO VALUE
8.1 Preamble to the Three Approaches to Value
8.1.1 The Cost Approach
8.1.2 The Direct Comparison Approach
8.1.3 The Income Approach
8.2 Application of the Cost Approach
8.2.1 Estimate of Land Values
8.2.2 Estimate of Building Costs
8.2.3 Depreciation
8.2.4 Final Estimate of Value
8.2.5 Conclusion
8.3 Application of the Income Approach
8.3.1 Overview
8.3.2 Data Collection
8.3.3 Organizing the Income and Expense Data
8.3.4 Mass Appraisal, Actual Performance and Industry Norms
8.3.5 Income and Expense Stabilization
8.3.6 Derivation of Capitalization Rates
8.3.7 Tax Loading the Capitalization Rate
8.3.8 Summary of the Income Approach
8.4 The Direct Comparison Approach
8.4.1 Developing Units of Comparison
8.4.2 Reconcile into One Single Value or Range of Values
9.0 ISOLATING AND VALUING TANGIBLE NON-REALTY ASSETS
9.1 The “Return On” and “Return Of” FF&E
9.2 Deduction of a Reserve for Replacement Expense in the Financial Pro-Forma
9.3 The “Return On” and “Return Of” FF&E and a Reserve for Replacement
9.4 The Current AAA Model used to isolate the Value of the FF&E
9.5 The Hotel Macdonald Two Part Deduction Model
9.6 The Model Proposed by the Authors
10.0 ISOLATING AND VALUING INTANGIBLE NON-REALTY ASSETS
10.1 The Rushmore Method
11.0 CASE STUDIES
11.1 Gallonage or Tavern Hotel Case Study
11.1.1 Preamble
11.1.2 Case Study
11.1.2.1 Facts
11.1.2.2 The Cost Approach - Market Data
11.1.2.3 Valuation by the Cost Approach
11.1.2.4 The Income Approach - Market Data
11.1.2.5 Valuation by the Income Approach
11.1.2.6 The Modified Lease Approach - Market Data
11.1.2.7 Market Data
11.1.2.8 Valuation by the Modified Lease Approach  (a.k.a ‘proxy’ rent)
11.1.2.9 Correlation and Reconciliation of Values
11.2 Mid-Size Motel Case Study Utilizing the Direct Comparison Approach
11.2.1 Preamble
11.2.2 Case Study
11.2.2.1 Subject Property Market Facts
11.2.2.2 Comparable Sales
11.2.2.3 Comparable Sales Grid
11.2.2.4 Valuation by the Direct Comparison Approach
11.2.2.5 Correlation and Reconciliation of Values
12.0 ALBERTA CASE LAW REVIEW
12.1 Introduction
12.2 Edmonton Plaza Hotel Inc. Appeals
12.3 Edmonton House Realty Appeals
12.4 Cost Approach
12.5 Using Actual Expense Data
12.6 Non-Realty Value
12.7 FF&E
12.8 Capitalization Rates and Risk
12.9 Proxy Rents/Modified Income Approach
12.10 Uniqueness
12.11 Cases from Other Jurisdiction
APPENDICES (All Appendix files are in PDF format)
Appendix A :  Market Analysis
Appendix B : Inspection Template
Appendix C : Sales Edit
Appendix D : Income and Expense Stabilization
Appendix E : Dan Craig
Appendix F : Carrie Russell
Appendix G : HVS Development Costs
Appendix H : BC Assessment Decision Tree
Appendix I
Appendix J : Appraisal Sources
Appendix K : Links and References to Data Sources