By Russ Reynolds • Valuation Methodology • 4th April 2011
Hotel valuation is a subjective process that involves many variables and assumptions. Consequently, the final value or value range can vary greatly from one appraiser to the next. However, it is important to remember that at the end of the day the valuation results must hold up to the “reasonable appraiser” test. The value estimated is dependent upon the purpose of the report and the Approach taken. For instance, an appraisal for insurance purposes will invariably result in a much different value than an appraisal for mortgage financing purposes. The following is a look at the three Approaches to value…
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By Russ Reynolds and Kevin Foster • Valuation Methodology • 6th January 2011
In 2008, the Accounting Standards Board of Canada (AcSB) announced that effective January 1, 2011, all profit-oriented Publicly Accountable Enterprises (PAEs) will be required to adopt a new framework for financial reporting known as International Financial Reporting Standards (IFRS). IFRS will replace Canadian Generally Accepted Accounting Principles (GAAP), a system of financial reporting that has been used in Canada since the 1960s. Depending on the level of preparation, the adoption of this new “common language” for financial reporting will be either challenging or rewarding for PAEs. While most companies have developed implementation strategies to manage the shift to IFRS, inevitably…
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By Russ Reynolds and My Phung • Hotel Valuation • 28th February 2008
Historically, accommodation properties been considered a risky investment for most commercial lenders. However, the past few years have proven that the hotel industry is a lucrative and active market, and lenders – both traditional and nontraditional – have been increasingly more competitive for this business. Who are the players in hotel financing? Essentially, lenders can be categorized as either portfolio lenders or conduit lenders. The former represents the traditional lender who originates the mortgage loan and holds onto it on the balance sheet through the maturity of the term. On the other hand, conduit lenders or Commercial Mortgage Backed Securities…
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