Your partnership with Loeb has made our contribution to the Red Cross possible!

Happy Holidays and Happy New Year!

Your partnership with Loeb has made our contribution to the Red Cross possible!

During this Holiday season we wanted to take a moment and express our appreciation.

In today's world you can't be successful without others and we wanted to take this time to thank you for your support of us and we hope that you feel we have been equally as supportive to you.

For the last 5 years instead of giving out small trinkets as a sign of our appreciation, we have been making donations to worthy causes to help make our world a better place.

This November, a massive storm system swept through the Midwest, leaving widespread destruction in its wake. Hundreds of thousands were affected by these storms including friends and family of Loeb employees.

We wanted to help with the ongoing support of Southern Illinois this holiday season as they continue to recover and rebuild. By donating to the Red Cross, we are mobilizing relief workers and helping to stock shelters with greatly needed food and supplies.

We are grateful to you, our customers and partners, for your continued business and we hope you appreciate being a part of our support of the Red Cross and their efforts to bring assistance to those deeply affected by the storm.

We Wish You a Wonderful Holiday Season

& a Happy New Year!

Net Values & What This Really Means to Lenders

I your net recovery by understanding the true costs involved in liquidating or auctioning a credit.

Many focus on gross appraisal values but now need to pay more attention to the rising unrecoverable costs of liquidating a facility. Net values have become more main stream as more lenders focus on the final results.

Loeb now asks every facility appraised for a variety of facility costs on a 1-month basis. We ask for such things as:

• Rent/mortgage payment and Real Estate Taxes
• Security
• Utilities & Maintenance
• Insurance
• Any other recurring miscellaneous expenses, such as waste water permits or costs associated with purging the product from the system

*Assumed three (3) months FLV and six (6) months OLV

Looking at our database we have normalized the average utilities at 10% of costs under production for an idle facility. In calculating Net FLV we assume 3 months of expenses and 6 months of expenses for Net OLV. Furthermore, given our auction expertise, we additionally estimate marketing, setup and selling expenses.

Below is an example from an actual appraisal recently performed where the Net OLV is less than the Net FLV. This is not uncommon though surprising to lenders that are not underwriting or credit focused.


In the real world, a major facility (such as the example above), would generally liquidate in one of two manners:

• Sold as turnkey, and thus most likely achieving a value over OLV
• The facility would be shuttered and prepared to sell at auction. (It is less common in the real world for a net OLV scenario to play itself out)

Quantifying your exit strategy and understanding the financial impact of your lending practices is crucial when lending on hard assets. Loeb Appraisal is focused on providing clear concise data so that more informed credit decisions are made.

Learn More About Loeb Appraisal ›

Avoid Inherent Conflicts at End of Lease

As appraisers we are often brought in to help mitigate arguments that arise at the end of leases because a lot of leases don’t have their purchase options defined clearly.  The most common issue is not defining “Fair Market Value.”  When you don’t define specifically what “Fair Market Value” is, misunderstandings will always prevail.  The Leasing Company argues that the purchase option is “Fair Market Value In-Place” while the lessor argues that it is “Fair Market Value for Removal” and, as we all know, the cost of a machine installed is always significantly higher.

For an example, Loeb Appraisal recently was hired by a lessee to appraise a machine coming off lease that they wanted to purchase.  They hired us because our client felt the “Fair Market Value” as presented by the lessor was onerous due to the fact that a) The technology had changed significantly in the industry and b) Newer comparable equipment costs on average 25% less than when the original lease was put in place. 

During our research stage, we were able to show the trending in the used market and auction market for this type of asset, along with quotes on similar units if purchased “New.”  Even with this research showing the leasing company that the value assigned for the purchase option was not based on current market, the argument continued because of the value of the installation.  After many rounds of conference calls we were able to act as an expert, and unrelated party,  to eventually reach a happy medium for both parties.

It is our recommendation to avoid this situation by either clearly defining if Fair market Value is “in-place” or “for removal.”  Better yet, consider the rising trend of including a fixed dollar purchase amount in your lease terms.  From a lessor’s standpoint, it will better position your organization to avoid possible asset disposition issues if the purchase option is not exercised because your lessees will have a set purchase goal, and will be able to manage their cash flow accordingly.

For more information on how Loeb Appraisal can assist in your asset valuation projects, please visit www.loebappraisal.com.

Overall equipment values remain up across most industries!
Take a moment to review our 3rd Quarter Appraisal Trends Sheet.

 Appraisal Market in Review 3Q2012

The Market in Review: 2nd Quarter 2012

John K. Hagist
VP Appraisal Svcs.
& Controller

Spring has sprung at Loeb and all our divisions have been busy in the field!

At Loeb Appraisal, we have been working on appraisal requests for a variety of new underwriting opportunities from financial institutions in addition to end-users that are acquisition minded. The uptick in activity is encouraging to see in the marketplace and has put our field appraisers in facilities all across the US, from Miami all the way to Kodiak Island, Alaska. The past few months have seen us in such diverse facilities as a NASCAR fabrication shop, a high capacity Mail Facility, a high-yield fish processing plant and a coffee roasting plant.

We continue to partner with Loeb Winternitz, our industrial auction company, and Loeb, our stocking inventory division, to stay up-to-date on the latest opinions of value with pertinent and relevant data from recent auction, liquidation and inventory sales.

If you have any upcoming needs, whether it be on the appraisal, auction, finance or equipment front, please do not hesitate to contact us. At Loeb, we view ourselves as a multi-faceted industrial resource and stand ready to be a partner in making the best decisions for your business.

Appraisal Market in Review as of April 2012

The Market in Review

John K. Hagist
VP Appraisal Svcs.
& Controller

Happy New Year, Everyone! Q1 has certainly started out being extremely active. Whether looking at our appraisal calendar, auction schedule or ongoing activity in the warehouse, I see nothing but a flurry of activity.

As we make the move into 2012, we thought it would be helpful to take a moment and share our perspective as relates to values and demands in a variety of industry sectors. Loeb Appraisal will publish our Market in Review on a quarterly basis.

If you have any upcoming needs, whether it be on the appraisal, auction, finance or equipment front, please do not hesitate to contact us. At Loeb, we view ourselves as a resource to you and your business.

 Appraisal Market in Review as of January 2012

Definition of Values from Loeb Appraisal

2011 has started with a flurry! In Q1 2011, Loeb has performed more appraisals for clients looking to underwrite new business than in the past 24 months. This demonstrates the pent up demand within the economy from the last couple of years. Creating lots of business in the appraisal world.

One particular banker recently asked Loeb to send him definitions of values so that he could continue to educate his team. We were more than happy to help as we have found the better educated our client is the better the entire process works.


There are four types of valuation that Loeb uses as the basis for their appraisals:

• Forced Liquidation Value (FLV): (previously known as "public auction value") The estimated gross income of a well-prepared and properly advertised sale conducted on the premises at the present time.
  Timeframe: 2-3 Months
  
  
• Orderly Liquidation Value (OLV): The estimated gross proceeds that could be expected from the forced piecemeal Sale (and removal) of subject property, privately negotiated.
  Timeframe: 6-9 Months
  
  
• Fair Market Value (FMV For Removal): The estimated highest gross value which a willing buyer would be justified in paying where the buyer would not continue to use the subject property in place for continued (same or similar) operations on a turnkey basis.
  
  
• Fair Market Value (FMV In Place): The estimated highest gross value which a willing buyer would be justified in paying where the buyer would continue to use the subject property in place for continued (same or similar) operations on a turnkey basis.

View the Complete Definitions & Glossary of Terms >

For more information or to schedule an appraisal with Loeb, please contact John K. Hagist at johnh@loebappraisal.com or (773) 496-5744.

Thank You for Helping Us Save 130 Acres of Rainforest!

A special thank you to all our customers and partners who helped us achieve our goal of 130 acres of reforestation & avoided deforestation!!

With 2010 having come to a close, we’re happy to announce 100% success in reaching our carbon offset goal of 130 acres of Rainforest conservation through the World Land Trust!

As you know, we couldn't have done it without your support. Your equipment purchase, appraisal, financing opportunities, or auction participation helped us reach our goal.

Thank you for helping us commemorate Loeb's 130th Anniversary by supporting us with this important cause. We look forward to being your Trusted Resource for Equipment Solutions in 2011 and for years to come.

To learn more about World Land Trust-US or to make your own contribution, please visit: www.worldlandtrust-us.org