Very few real estate appraisers have adequate training or experience in the areas of business valuation or in the appraisal of machinery or equipment, nor do they have access to the comparable sales data for these non-real estate assets.
Similarly, the vast majority of business appraisers migrated from accounting backgrounds into the business valuation field and few have the requisite license, training and experience to perform real estate appraisals. And more importantly, do not have access to the comparable sale data required.
Restaurants commonly include the intertwined values of real property, personal property and trade fixtures, liquor licenses, as well as intangible business values.
It is rarely appropriate to obtain overall value by adding the separate values for each of the individual components. Therefore, the more reliable valuation methodology is to appraise the whole and then to analyze the impact on value, as required by USPAP, of each of the individual components for purposes of deriving a supportable allocation of each asset value.
According to USPAP, such an allocation or separation of value constitutes an appraisal of these other items and requires competency in personal property appraisal (see STANDARD 7) and/or business appraisal (see STANDARD 9).
In addition to holding the distinguished MAI designation for commercial real estate appraisal, I am also a certified business appraiser and designated as a Qualified Source for business appraisals by the SBA. I also hold the Certified Machinery/Equipment Appraiser (CMEA) designation.