Chair: Jay MarlingVice Chair: John Kjelstrom

Phoenix MeetingMarch 4 – 5, 2015

NCREIF VALUATION COMMITTEE

Agenda

This document was presented during the 2015 NCREIF Winter Conference. The author(s) take full responsibility for all content. This posting is for informational purposes only; neither NCREIF nor its Board express any opinion of the content presented herein.

Today’s Committee Session Agenda

NCREIF Valuation Committee March 4 – 5, 2015

• Announcements/Introductions• Summary of Revisions to the Valuation Manual • Document Review Subcomittee• Update from Industry Groups Ken Wilson ‐ Appraisal Institute Chuck Hagedorn – NCREIF TAFAC Representative

• ‘round the Horn – Transaction HighlightsBrady Barbier – Integra Realty ResourcesJason Krentler – Stout Risius RossDavid Walden – NPV Advisors

• Market Profile “LA Story – Current Trends in the City of Angels” by Arthur Neudek & Casey Hopkins of Property Sciences.

This document was presented during the 2015 NCREIF Winter Conference. The author(s) take full responsibility for all content. This posting is for informational purposes only; neither NCREIF nor its Board express any opinion of the content presented herein.

Tomorrow’s Committee Session Agenda

NCREIF Valuation Committee

8:45 am ‐ 10:15 am Joint Session with Research Human Capital: The War for Talent and its Effect on Office Space

10:30 am ‐ 12:00 pm Joint Session with Research, Non‐Regional Mall Retail.

1:15 pm ‐ 2:15 pm Joint Session with Accounting Committee Text Revisions to the Valuation Manual 

2:30 pm ‐ 4:00 pm  Capital Markets Overview – Bruce Francis, Vice Chair of CBRE Capital Markets

4:15 pm  ‐ 5:30 pm Closing Session: Phoenix Market Trends

March 4 – 5, 2015

This document was presented during the 2015 NCREIF Winter Conference. The author(s) take full responsibility for all content. This posting is for informational purposes only; neither NCREIF nor its Board express any opinion of the content presented herein.

Summary of Changes to the Draft  Version Valuation Manual

NCREIF Valuation Committee

• Accounting and Research were the only Committees with substantive comments.  

• Text was re‐worked by Editors from Valuation Committee into a Final Draft.  All Committees have signed off and the document will now go to the NCREIF Board for approval then to REIS.    

• Accounting suggested significant changes to the Property Level Debt Valuation.  More specifically, they suggested getting rid of “Net” and “Gross” terminology in favor of “Leveraged Equity” and “Cash Equivalency” in order to avoid confusion with accounting terms.

March 4 – 5, 2015

This document was presented during the 2015 NCREIF Winter Conference. The author(s) take full responsibility for all content. This posting is for informational purposes only; neither NCREIF nor its Board express any opinion of the content presented herein.

Summary of Changes to the Draft  Version Valuation Manual

NCREIF Valuation Committee

Suggestions from the Research Committee:

• Independence and Internal Valuations – Settled on the following rewording:  “Internal valuation analysis and documentation can be prepared by the relevant business unit; however, reporting, approval, and oversight responsibilities should be managed by individuals or committees with seniority that shall not be subject to influence for the purpose of affecting compensation that is directly dependent on asset values.” 

March 4 – 5, 2015

This document was presented during the 2015 NCREIF Winter Conference. The author(s) take full responsibility for all content. This posting is for informational purposes only; neither NCREIF nor its Board express any opinion of the content presented herein.

Summary of Changes to the Draft  Version Valuation Manual

NCREIF Valuation Committee

Suggestions from the Research Committee:

• Data Transmission & Storage – Want to make it clear that a valuation management system can just be an organized set of procedures.

• Portfolio Valuation – A portfolio premium/discount is not a question of Highest & Best Use but rather the Most Likely Buyer of the asset.  

March 4 – 5, 2015

This document was presented during the 2015 NCREIF Winter Conference. The author(s) take full responsibility for all content. This posting is for informational purposes only; neither NCREIF nor its Board express any opinion of the content presented herein.

Review Subcommittee

NCREIF Valuation Committee

John Kjelstrom, National Valuation ConsultantsDoug Struckman, PwCCate Agnew, PwCRick Wincott, AltusBrent Palmer, New TowerBrian Johnson, KPMG

Michelle Koeller, IntegraMarc Nassif, Butler Burgher GroupBrian Velky, RERCJohn Mackel, Moss Adams

Bill Drewes, Colliers

March 4 – 5, 2015

This document was presented during the 2015 NCREIF Winter Conference. The author(s) take full responsibility for all content. This posting is for informational purposes only; neither NCREIF nor its Board express any opinion of the content presented herein.