1.  Getting the word out…
 “Appraisal techniques for going concern
valuations”

2. Introduction:
Lamb Hanson Lamb Appraisal Associates, Inc.
 Four Generations-
 1916 (Ross J. Loranger),
 1957 (Berkley A. Lamb),
 1970 (Michael B. Lamb),
 2010 (Patrick M. Lamb)
 Employee Base
 MAI Designated
 SRA Designated
 General Certified
 Residential Certified
 Green Designated
 Employees are Specialized by Property Type & Location:
 Development Land, Industrial, Office/retail, Multi-family, Special Use, Residential Form, FHA, USDA, Reviews, Development
Projects, Government…Locations are picked by familiarity and background.
 Services & Product Types:
 Commercial, Residential, and Specialty Use
 Self-Contained, Summary, Restrictive
 Replacement Reserve Studies, Insurable Replacement Studies for HOA/Condo Associations.

3. Going Concern Premise & Liquidation
Premise
 Going Concern Premise:
 “The assumption that a company is expected to continue operating well into the
future (usually indefinitely). The Dictionary of Real Estate Appraisal 5th ed.
Chicago: Appraisal Institute, 2010.
 Liquidation Premise:
 “The assumption that a company will cease operations.”

4. Regulatory Concerns
 SBA Lending Requirements
 Lenders may use a going concern appraisal for an SBA loan if:
 The loan proceeds will be sued to purchase a special use property
 The appraisal is performed by an appraiser experienced in the particular
industry, and;
 The appraisal allocates separate values to the individual components of the
transaction including land, building, equipment, and intangible assets.
 USPAP Appraising Requirements
 USPAP requires that the appraiser must analyze the effect of personal
property, trade fixtures, and intangibles when they are included in the
appraisal.
 It should be made clear in the report that the allocated value of the
various assets applies only in the context of the going-concern premise
and cannot be considered regardless of the discount value of the
individual assets.

5. Useful Definitions
 Going Concern Valuation or Total Assets of Business Valuation
 V-TAB (Total Assets of a Business)
 V-RP (Real Property)
 V-PP (Personal Property)
 V-IA (Intangible Assets)

6. Total assets
of the
Business
Tangible property Intangible personal Monetary assets
property
Real Assembled Cash &
property workforce equivalents
Personal Contracts, Accounts
property Licenses, receivable
(FF&E) Permits
Brand Supplies &
Name Inventory
Patents &
copyrights
Capitalized
Economic
Profit

7. Going Concern Property Types
Lodging Healthcare & Senior Housing
• Hotel • Hospitals
• Motel • Surgical and Imaging Centers
• Interval Ownership (timeshares) • Rehabilitation Centers and Skilled
Nursing Centers
• Assisted Living Facilities
Sports & Recreation • Independent Living Facilities
• Athletic Clubs • Continuing Care Retirement Communities
• Golf Courses (CCRC’s)
• Bowling Alleys
• Marinas
• Arenas Other Specialized Assets
• Day Care Centers
• Educational Facilities
Consumer Services • Specialized Manufacturing
• Convenience Stores • Student Housing
• Lube Centers • Group Homes
• Restaurants (full and quick serve) • Multi-Family (Affordable Housing)
• Shopping Malls and Lifestyle Centers
• Bank Branches  Apartments???
• Liquor Stores

8. Business Valuation Premise
 3 techniques performed by Biz Val guys
 Asset Approach
 Market Approach
 Income Approach

9. Appraisal Valuation Techniques
 3 techniques performed by appraisers;
 Cost Approach
 Sale Approach
 Income Approach

10. Closing Remarks & Questions