Thursday, June 16, 2016

Why the Accuracy of the Asset List is Paramount to the Overall Valuation

By John Hagist
Controller, VP Appraisal Services
(773) 496-5744

Loeb takes a proactive approach to ensuring the assets reported in our valuations are correct and that the list is complete. An integral step in this approach is our Asset Verification Process. Upon completion of the field inspection, Loeb issues an asset verification list back to the facility with two primary questions in mind.

First of all, is the list complete? It’s not necessarily a concern that the appraisers may have “missed” something, but more that the facility didn’t show everything. There could be additional assets at an offsite location, currently being rebuilt or at a co-packers facility, but that should also be included with the report.

Secondly, are all the assets owned outright or are there any leased assets? It’s most common that equipment within a facility belongs solely to a customer, but often times major assets or newly installed lines are leased. Regardless of ownership, we leave the assets within our report, and make sure they are clearly identified as “Property of Others” or “Leased.” While it doesn’t factor into the overall value of the facility, leaving all the assets in the report regardless of ownership, removes any question of whether the assets were inspected and what is the status of each asset is.

As an example, Loeb recently appraised a contract packaging facility in which a complete production line was owned by one of their clients. If that had not been disclosed during this asset verification process, there would be have been an additional $750,000 in value left in the appraisal which would have distorted the overall opinion of value.

With every engagement comes the distinction of whether the appraisal client is in search of a complete report or just a report delivered quickly. Obviously it’s the nature of business today to want to turn around information an expedient manner, but as accredited valuation experts, first and foremost we stake our reputation on providing a complete and accurate report. While it may seem like just an extra step the final hurdle to issuing the final report, the asset verification process is integral to issuing the most accurate and complete appraisal as possible.

Equipment valuations for industrial facilities of all sizes!
Contact Loeb for all your Appraisal needs!

Learn More About Loeb Appraisal

Wednesday, March 16, 2016

Valuation Expertise: Going Beyond Just the Written Report

A typical appraisal is a snapshot of a specific group of assets with an opinion of value rendered as of a specific date. However, the standard appraisal report does not capture all of the additional valuation work that is performed by the appraisal firm. Behind the scenes, there are often a number of additional scenarios discussed with the client.

Our relationship with our clients is paramount for us and they often call with a large list of questions and scenarios dealing with not only the specific industry but also the specific assets, typically long before an engagement letter is signed. Often, these hypothetical conversations provided are sufficient to give the client the quick input needed to keep them going with their deal. If the client is a bank, they may ask why they should continue to chase a deal if all the expectations of the client are unrealistic compared to the value of the assets. If the client is an end user wanting to purchase assets coming off lease they want to investigate the realistic pricing.

"Being able to use Loeb and their expertise as a sounding board early in our credit decisions is invaluable to our business. Because Loeb not only appraises but also actually sells assets, we see their expertise as grounded in real world application."

Because of our day to day transactions buying, selling, auctioning, financing and appraising industrial assets, our relationships don't start nor stop at a signed report. The industrial marketplace is fluid and fast moving. By being able to give a client insight into an asset or asset class early in the process, it helps them to achieve or retain the competitive edge in the transaction being reviewed. The earlier the knowledge is gained, the better.

Equipment valuations for industrial facilities of all sizes!
Contact Loeb for all your Appraisal needs!

Learn More About Loeb Appraisal