The Partial Interest Valuation Services is available to clients requiring partial or fractional

ownership interest valuations based on objective analyses of empirical data. Valuations are typically
needed to support estate tax filings for minority interests in family trusts or family limited
partnerships. However, we also provide valuation services to assist in a variety of estate planning
issues as well as for support in partner buy-outs and disputes, mergers and acquisitions and litigation.
Our professionals offer significant industry experience and are trained to effectively communicate our
findings to our clients, their auditors, legal team and regulatory authorities.
Our methodology considers in great detail the income-producing capability of the entity with
respect to the returns and multiples of alternative investments, including publicly-traded limited
partnerships. Value is based on the perception of future benefits, and this must consider the nature of
the assets, their risk profile, existing cash flow and historical distributions, leverage and the prospects
for appreciation. It is also impacted by the liquidation horizon of the ownership entity, as well as the
size of the ownership interest being appraised. Reliable conclusions can be reached via both the market
and Income approaches to value by carefully analyzing each of these issues.
Sample Assignments
Valued a 25% non-controlling interest in a limited liability company owning interests in four
properties held by four separate entities; one property as a tenant-in-common and one property as the
sole owner. The interest appraised was subordinate to a preferred return in favor of the managing
member that resulted in a very high discount to net asset value.
Retrospective valuation of a 36% Tenant-in-Common interest. Ownership was complicated by
the lack of any management agreement between the owners and the fact that the only other investor
(the manager) was represented by a limited partnership that owns other properties.
Valued a 1.0% interest in an LLC that owns five real property assets, including an office
building, two self-storage properties and two commercial properties. The properties are each held by
a single-asset LLC. The company has an average leverage ratio of 49%. The lower risk profile of the
properties was generally offset by the higher debt ratio in determining the final discounts to net asset
value.
Provided a valuation of a 33% interest held as Tenants-in-Common in a vacant commercial
buildings located in a large city. The fact that the property had been vacant for many years, was in
disrepair and that there was no management agreement for the entity resulted in higher discounts to
net asset value.
CBRE valued an 11% interest held by a family trust in an LLC managed by a regional
investment company. The primary assets of the LLC were two average-quality industrial R&D
buildings located in Silicon Valley. The valuation was complicated by the fact that the LLC was
leveraged to 82% and that one of the buildings was vacant. CBREs research revealed that the tenant
in the occupied building, whose lease was set to expire about one year from the date of value, would
not be renewing. With dismal market conditions at the time, an extraordinarily high discount to net
asset value was reasonably supported.
Provided a valuation of an economic interest in the General Partner of an LP that was to be
secured by a Warrant. As the Warrant was to convey the economic interest only, this was a non-
controlling interest. Additionally, it was subordinate to a number of partner preferred returns and
participations. The sole asset of the LP was a senior housing community that was primarily funded by
HUD and Medi-Cal subsidies. The project was subject to a near-term loan expiration and with income
increasing only at the rate of expenses, the refinance risk resulted in a significant discount to net asset
value.