Newsletter President s Message Dear colleague, It was great seeing our members at the latest luncheon and After Hours event. I also was amazed to see all the different kinds of professionals in attendance. From seasoned veterans to those who are just an experience log away from getting state-certified, it was awesome to see everyone come together and see our friends receive their designations, learn a little bit about the profession, and have a chance to network. If you weren t able to make it this time, I encourage you to check out our next chapter event later this year. We also had the opportunity to recognize the past presidents in attendance for their service to our chapter. San Diego has one of the best chapters around, and it is because of these leaders that make it so. From someone who has benefitted greatly by the volunteer efforts of these men and women, I say thank you. For this month s newsletter, I wanted to make you aware of the Appraisal Institute s Find an Appraiser feature on the main website. Did you know that AI s Find an Appraiser has almost 30,000 hits per month from people looking for an appraiser? The tool uses your online profile ( My AI Profile ) to help users search for an appraiser with expertise in a particular property type or market area. For this reason, it is critical for you to update your AI Profile and fill it out with as much information as possible so that you show up in the search results. If you need any assistance with updating your profile, please reach out to me or Patti. Lastly, we have three courses coming up this month, including the brand new How Tenants Create or Destroy Value: Leasehold Valuation and its Impact on Value. Hope to see you there! March 2019 Find us on: Inside this issue: PRESIDENT S MESSAGE 1 HIGHLIGHTS FROM CHAPTER MEETING THE CHAPTER S NEWEST DESIGNATED MEMBERS REPORT FROM REGIONAL MEETING NATIONAL USPAP 7-HOUR UPDATE THE APPRAISER AS AN EXPERT WITNESS HOW TENANTS CREATE OR DESTROY VALUE ADVANCED INCOME CAPITALIZATION 2 3 4-5 8 9 10 11 CALENDAR AND CONTACT 12 Cheers, Eric Schneider, MAI, SRA, AI-GRS
Highlights from the First Quarter Chapter Meeting At the General Chapter Lunch Meeting held on Thursday, February 7, 2019, lunch speaker Jim Martin, Chief of the Bureau of Real Estate Appraisers, gave an update about what is happening at BREA; what licensing trends are occurring; enforcement news, and information about BREA s investigation process. Past Presidents of the Chapter and its former organizations were honored. Left to right: Dave Eshelman, SRA; Susan Merrick, SRA; Trevor Hubbard, MAI, SRA, AI-GRS; Eva Stresemann, MAI; Bill Anderson, MAI, SRA; Bob Jones, MAI; Carl Votolato, MAI; Dave Davis, MAI; Ted Hendrickson, MAI; Rob Caringella, MAI, SRA, AI-GRS; Jim Brabant, MAI; Howard Fram, MAI; Roger Bush, MAI, SRA; and John Wallace, MAI. (Not pictured: Robert Anaya, MAI; Bob Backer, MAI, SRA; John DeLara, MAI; Darrell Gordon, SRA; Sara Schwarzentraub, SRA; and Margaret Singleton, MAI, SRA) Page 2
The Chapter s Newest Designated Members At the February 7 Chapter Lunch meeting, Kevin O Harra, SRA, was presented with his SRA certificate by Chapter member (and his Advisor) Doranne Godwin, SRA. Also at the February 7 meeting, Brad Bassi, SRA, was presented with his SRA certificate by Chapter President Eric Schneider, MAI, SRA, AI-GRS, and Chapter member Dave Eshelman, SRA. Update from February 8 ASB Meeting The Appraisal Standards Board met on Friday, February 8. At that meeting, the ASB did not adopt changes for 2020 USPAP as expected. There will be a 4th Exposure Draft in late March, and it was not made clear at the meeting what it will include. The ASB took AI s letter very seriously; at the time of the assignment will be changed to respond to AI s concerns. Strong comments came in different directions about reporting. The consensus is that the Restricted format must be maintained. This doesn t necessarily mean that it will become the single minimum standard, or that they will open the number of intended users or remove the warnings if they keep the two report options. Stay tuned! Submitted by Paula Konikoff, JD, MAI, AI-GRS, ASB Member 2003-2008 Page 3
Report from Regional Meeting On Friday, February 1st, there was a regional meeting held at Humphrey s Half Moon Inn. Seven chapters participated including Central California, Hawaii, Nevada, Phoenix, Southern Arizona, Southern California, and San Diego chapters. We were introduced to the new National Vice President, Rodman Schley, MAI, SRA, who lives and works in Colorado and is very enthusiastic about our organization. The Immediate Past President, James L. Murrett, MAI, SRA, gave an overview presentation and state of the Appraisal Institute. A few highlights of Mr. Murrett s presentation are as follows: 1. 2018 year-to-date operating surplus of $638,000 2. Revenues of $17.4 million (2.3% less than budget) 3. Expenses of $16.8 million (5% better than budget) The $638,000 operating surplus was due to expense reductions, not revenue growth; the 2.3% lower than budgeted revenues were due to lower than expected candidate program fees. There was a discussion about the number of appraisers in the United States, and AI estimates there are 78,015 active appraisers. The majority of the appraisers (50.7%) hold Certified Residential licenses, followed by Certified General (41.4%) and Licensed Appraisers (7.9%). Over the last four years, the proportion of designated members has been increasing; as of 01/01/2019, 67.87% of AI professionals were designated, up from 61.85% in 2015. Conversely, the proportion of candidates has been declining and currently stands at 10.34%, down from 14.91% in 2015. The proportion of Practicing Affiliates and Affiliates has declined minimally over the last four years and is currently 19.27% and 2.52%, respectively. There is a concern that the average age of our members is increasing and we need to continue to attract new candidates. There are 1,828 candidates on a path towards designation (not including 441 Designated Members seeking additional designations). Candidate timelines expire monthly and personalized outreach efforts occur each month. The Appraisal Institute approved 1,304 extensions in 2018 and denied only four; as a candidate, if you ask for an extension you will probably be granted one, but you have to ask. The chapter presidents gave a brief overview of what s working and what s not working in their chapters. One of the presidents indicated that she struggles with getting members to attend meetings and class offerings; only eight people showed up to their installation ceremony. Others discussed frustration in attracting college students and they have had difficulties in offering scholarships. I decided to share with the group the success that our chapter has had with our scholarship program, and I must admit that they were quite impressed! Hats off to those many members in our chapter that have made that program successful! Submitted by Debbie Yost, SRA, 2019 Alternate Regional Representative Page 4
Report from Regional Meeting (continued) San Diego Chapter members who attended the meeting include Chapter President Eric Schneider, MAI, SRA, AI-GRS, Regional Representatives Jeremy Darner, MAI, SRA, AI- GRS and Howard Fram, MAI, Alternate Regional Representatives Debra Yost, SRA, and Pete Savage, MAI, SRA, and Chapter Executive Director Patti Kreutzer. Appraisal Institute Vice President Rodman Schley, MAI, SRA, discussed his vision and goals for the organization. Roger Bush, MAI, SRA, Immediate Past Chair of Region VII, was honored and thanked by Shelly Tanaka, MAI, AI-GRS, Chair of Region VII. Page 5
Welcome New Members During January and February, Michael Brandlin and Sean Morrow joined the Chapter as Candidates for Designation. During February, James Golde, a Practicing Affiliate, transferred into the Chapter from the Northern California Chapter. During January, Drew Corley joined the Chapter as an Affiliate. At the February 7 Chapter meeting, Chapter President Eric Schneider, MAI, SRA, AI-GRS, presented a membership certificate to Shelly Chen, who joined the Chapter as a Practicing Affiliate in December 2018. Eric also presented a membership certificate to Affiliate Drew Corley at the February meeting. Chapter Meeting Calendar February 28 Board of Directors Meeting Chapter office March 28 Board of Directors Meeting Chapter office April 25 Board of Directors Meeting Chapter office Page 6
Jobs Board Valbridge/Inland Pacific Northwest has an immediate opening for a Certified General Real Estate Appraiser. The position provides an excellent opportunity for experience and potential advancement within the commercial appraisal industry. Accuracy, consistency, and good communication skills are requirements. Applicants must be detail oriented, analytical, and extremely organized. The position requires excellent communication skills, above-average math and writing skills, a professional demeanor, good telephone etiquette, and the ability to work with minimal supervision. Strong computer skills are a must. This position is full time and does require a Certified General Real Estate Appraiser license. The right candidate will be highly motivated to succeed in the commercial real estate appraisal field. We encourage our professionals to reach beyond state certification to earn the MAI designation of the Appraisal Institute. If you are interested in applying, please send your resume and cover letter explaining your interest in the commercial real estate appraisal field and include what you have done to prepare yourself for the position. Please send to the attention of our Executive Administrative Manager Keri Copley at kcopley@valbridge.com. Call for Nominations Nominations are due Friday March 29 for the Y.T. and Louise Lee Lum Award, which recognizes individuals who have made distinguished contributions to the valuation profession during the immediate preceding year. The Award is given in recognition of and in great appreciation for the distinguished contribution to the furtherance of the high ideals of the profession of real estate appraising and practices, mindful of the fact that this contribution was possible only through the zeal, uprightness, sacrifice, devotion, acumen, and ability of the contributor. Both Appraisal Institute professionals and those who do not belong to AI are eligible. Selection of the recipient is made by the Directors of the Appraisal Institute Education and Relief Foundation, and will be announced during the 2019 Appraisal Institute Annual Conference, July 22-24, in Denver, Colorado. Nominators should provide a letter of recommendation, the resume of the nominee, and a brief biography of the nominee. Please email these items to aierf@appraisalinstitute.org with the subject Lum Award Nomination. Online Education Learn at your own pace anytime, anywhere. Top-notch Appraisal Institute courses and seminars come straight to your desktop with online education! Learn from any computer anywhere, whenever you have time. It s easy, convenient and a great way to get the education you want. Check out the current course listing now! Page 7
National USPAP 7-Hour Update This one-day update course, copyrighted by The Appraisal Foundation, focuses on recent changes to USPAP requirements for ethical behavior and competent performance by appraisers. The course, which clarifies several commonly misunderstood aspects of USPAP, will aid appraisers in all areas of appraisal practice seeking updated competency in USPAP, including those subject to state licensing or certification and continuing education requirements imposed by professional organizations, client groups, or employers. COURSE PRICE DOES NOT INCLUDE A COPY OF THE 2018-2019 USPAP DOCUMENT, WHICH IS REQUIRED FOR COURSE CREDIT. Attendees must bring their own copy of the 2018-2019 USPAP document to class, which can be purchased from The Appraisal Foundation at 2018-2019 USPAP. When and Where March 1, 2019 Check in 8:00 am Course: 8:30 am - 4:30 pm National University 705 Palomar Airport Road Room 207 Carlsbad, CA 92011 EDUCATION CREDIT: This course is approved for 35 points of Appraisal Institute education credit, and for 7 hours of BREA continuing education credit (BREA Approval No. 17CP754601293). This course is also approved in most other states for basic and/or continuing education credit. For more information about approval in other states, see State Approvals. Instructor: Mike Mason, MAI, SRA COURSE FEE: (on or before February 14, 2019): Appraisal Institute Designated Members, Candidates for Designation, Practicing Affiliates, and Affiliates: $189 / All Others $239 Course fees will increase $50 on February 15, 2019. Page 8
The Appraiser as an Expert Witness This two-day course introduces the basic concepts and strategies needed to engage in litigation valuation. It explores the scope of activities appraisers can expect in a legal action, including assessing the status of a case, developing a USPAP-compliant appraisal without preparing a written report, and understanding legal terminology and jargon. The course addresses how litigation assignments differ from lender assignments, and how to market appraisal services to litigation clients. Participants work in small groups to practice effective deposition and direct testimony techniques, and a mock trial with a residential case study gives them the opportunity to experience a realistic courtroom environment in which to polish their skills. EDUCATION CREDIT: This course is approved for 200 points of Appraisal Institute continuing education credit (attend and pass the exam), or for 150 points of Appraisal Institute continuing education credit (attend only). This course is also approved in most states for basic and/or continuing education credit hours (in California, 15 hours of BREA continuing education credit; Approval No. 17CP754601284). For information about basic/continuing education credit in other states, see State Approvals. When and Where March 7-8, 2019 Check in 7:45 am Course: 8:00 am - 5:00 pm National University 9388 Lightwave Avenue San Diego, CA 92123 Instructor: Stephen D. Roach, MAI, SRA, AI-GRS COURSE FEE: (on or before February 20, 2019): Appraisal Institute Designated Members, Candidates for Designation, Practicing Affiliates, and Affiliates: $405 / All Others $455 Course fees will increase $50 on February 21, 2019. Page 9
How Tenants Create or Destroy Value LEASEHOLD VALUATION AND ITS IMPACT ON VALUE If you re involved in the valuation of commercial real estate, it s crucial to know how the terms of a lease affect value. This new seminar goes beyond methodology to explore how to measure a property rights adjustment, the theory underlying the use of a leasehold yield rate to value the leasehold, as well as the application of a property rights adjustment in all three approaches to value. Topics include: How the terms of a tenant s lease impact value either positively or negatively Situations that require a valuation of a leasehold Methodologies in valuing a leasehold, including examples and exercises The impact of a leasehold in the valuation of property using all applicable approaches Challenges facing appraisers performing leasehold valuation assignments. When and Where March 22, 2019 Check in 8:00 am Course: 8:30 am - 4:30 pm National University 9388 Lightwave Avenue San Diego, CA 92123 Instructor: Stephen D. Roach, MAI, SRA, AI-GRS EDUCATION CREDIT: This seminar is approved for 35 points of Appraisal Institute continuing education credit. This course is also approved in most states for basic and/or continuing education credit hours (in California, 7 hours of BREA continuing education credit; Approval No. 18CP754601351). For information about basic/continuing education credit in other states, see State Approvals. SEMINAR FEE: (on or before March 7, 2019): Appraisal Institute Designated Members, Candidates for Designation, Practicing Affiliates, and Affiliates: $189 / All Others $239 Seminar fees will increase $50 on March 8, 2019. Page 10
Advanced Income Capitalization This course builds on topics covered in the General Appraiser Income Approach/Parts 1 and 2 courses. It introduces additional topics that a seasoned general appraiser can expect to meet in everyday practice. The course features a limited review of material covered in the previous income courses to maximize the time available for advanced topics. Advanced topics are divided into six general areas: 1. Operating income issues, including complex lease structures, reimbursements, and tenant improvement allowances; 2. Property valuation techniques, property taxes that are a function of market value, reversions, property model applications, and supporting the discount rate; 3. Complex mortgage instruments and the effects of leverage; 4. Equity valuation; 5. Investor motivations, including measures and types of risk, measures of return, and income tax consequences; and 6. Case study applications of an office building, a subdivision, and a proposed development with prospective and subject to hypothetical values. When and Where April 8-12, 2019 Check in 8:00 am Course: 8:30 am - 5:00 pm National University 9388 Lightwave Avenue San Diego, CA 92123 Instructor: Stephen D. Roach, MAI, SRA, AI-GRS Registration for this course to receive printed materials ends on March 25, 2019. Registration for this course with download-only electronic course materials ends on April 3, 2019. EDUCATION CREDIT: This course is approved for 275 points of Appraisal Institute education credit (attendance only) or for 375 points of Appraisal Institute education credit (attend and pass exam). It is also approved in most states for education credit (in California, 33 hours of qualifying education credit, including the exam, or for 30 hours of continuing education credit; Approval No. 10754211). For other states approval information, see State Approvals. COURSE FEE:: Appraisal Institute Designated Members, Candidates for Designation, and Practicing Affiliates $800 / All Others $1,100 Page 11
S a n D i e g o C h a p t e r o f t h e A p p r a i s a l I n s t i t u t e San Diego Chapter Office 4849 Ronson Court, Suite 102 [map] San Diego, California 92111-1805 Executive Director: Patti Kreutzer Phone: (858) 292-7324 Fax: (858) 292-7333 E-mail: patti@sdcai.org We are on the Web! www.aisandiego.org March 2019 Sun Mon Tue Wed Thu Fri Sat 3 4 5 6 7 Appraiser as an Expert Witness Day 1 1 7-Hour USPAP Update 8 Appraiser as an Expert Witness Day 2 2 9 10 11 12 13 14 15 16 17 18 19 20 21 22 How Tenants Create or Destroy Value 23 24 / 31 25 26 27 28 Board of Directors Meeting Chapter Leadership Did you know 2019 OFFICERS DIRECTORS DIRECTORS President Eric Schneider, MAI, SRA, AI-GRS eric@jrcvaluation.com Director (2017-2019) Mike Hadrys mhadrys@westvaluation.com Director (2018-2020) Lee Stephens, SRA leensharon@cox.net Chapter individuals who volunteer to serve on a committee, panel, or work group Vice President Jeremy Darner, MAI, SRA, AI-GRS jeremy.darner@cushwake.com Director (2019) Brent Johnson, SRA, AI-RRS (858) 883-3124 Director (2019-2021) Ben Kunkel, MAI ben@jrcvaluation.com can earn up to 125 points of continuing education credit in each 5-year cycle. Treasurer Mark Hendrickson, MAI mark@hendricksonappraisal.com Director (2018-2020) Chris Alfaro, MAI, AI-GRS Chris.alfaro@homestreet.com Director (2019-2021) Kent West kjwest@kpmg.com If you would like to become more involved with the Chapter, contact Chapter President Eric Secretary Colleen Matthies, MAI tcmatthies@cox.net Director (2018-2020) Alison Roach alison@jrcvaluation.com IMMEDIATE PAST PRESIDENT Eva Stresemann, MAI eva.stresemann@sdcounty.ca.gov Schneider, MAI, SRA, AI-GRS, at (858) 565-2400, or email eric@jrcvaluation.com. Page 12