TRUMP, APPRAISAL INSTITUTE, MAI, AI, RICO

Commercial Property Appraisals | Real Estate Valuation.

TRUMP, APPRAISAL INSTITUTE, MAI, AI, RICO

And the Trump Organization’s office building at 40 Wall Street was appraised by Cushman & Wakefield at a value of $540 million in 2015, but was later pegged at just $260 million by S&P.

The issue of questionable commercial appraisal practices surfaced in a recent New York Times investigation of the Trumps’ real estate empire, looking at the use of several schemes to reduce tax liability across the family’s New York portfolio.

TRUMP, APPRAISAL INSTITUTE, MAI, AI, RICO

Among the most successful were the lowball appraisals they received from Robert Von Ancken, who valued more than two dozen large multifamily buildings at just $94 million — including some buildings he said were worth less than zero. A decade later, the Trumps sold off the properties for more than $700 million.

The manipulation of building values is widespread and ongoing, sources said. In some cases, the victims of unbalanced appraisals are investors who buy bonds based on inflated valuations. In other cases, the general public takes a hit, losing out on tax revenue when property owners contort tax assessments with the help of appraisers.

TRUMP, APPRAISAL INSTITUTE, MAI, AI, RICO

The root of the problem, according to several insiders, is a conflict of interest. Appraisers are supposed to be impartial. But they are hired and compensated by people who aren’t, which makes them vulnerable to pressure.

But many acknowledge that resisting clients’ demands to come up with the right numbers is a daily struggle.

“That’s just a fact of our life,” said James Murrett, head of appraisal standards and audit services at Colliers International Valuation & Advisory Services and current president of the Appraisal Institute. “An appraiser has to have a thick skin.”

Appraisers can win the job by offering lower fees, or by demonstrating a track record of coming up with numbers that satisfy their clients.

Levine said the Trumps and other New York landlords own properties that can be difficult to appraise because many use outside management companies, which means a lot of a building’s revenue ends up in other accounts. “You take the money out of the property, you have less real estate income and more business income,” he noted.

TRUMP, APPRAISAL INSTITUTE, MAI, AI, RICO

Comments

[Commercial Appraiser CRE BLOG, 310.337.1973]

1.

Robert E. Von Ancken, MAI, CCIM
NYU Stern School of Business, BS Finance, 1984

Member Appraisal Institute, MAI designation