2025 IAC RP - DCF Applied to Non-Stabilized Property: Market value or investment value?

Session Description

The distinction between market value and investment value is important in mitigating lending risk in fluctuating real estate markets. In past real estate-focused economic downturns (Savings-and-Loan/RTC experiences of the late-1980s/early-1990s through the “Great Recession” of the late-2000s/early-2010s), commercial properties that defaulted were likely to have loan terms based on assumptions of speculative future leasing or unit sales (i.e., non-stabilized renovation property, new construction in lease-up, and residential subdivisions sell-offs. This presentation will discuss the potential that lenders are basing their lending on non-stabilized income-producing property on value derived from misapplied and mislabeled methodology (i.e., investment value) instead of market value.

Speaker

Martin Skolnik

Continuing Education

Review of this session recording will award 1.2 CE hour.