Appraisal Economics Inc. has provided expert witness testimony at a binding arbitration hearing in New York. One of two general partners in a limited partnership died, and the value of the interest was disputed between the remaining general partner and the estate of the deceased general partner. The partnership owns a long-term leasehold interest in commercial real estate. As the partnership is a holding entity, we used the net asset value approach, in which we marked the partnership’s assets and liabilities to fair market value and computed the value that would be received by a holder of the interest upon the sale of the property and liquidation of the partnership. We also used the income approach, in which we calculated the present value of the projected future cash flows to the subject interest if the partnership was continued. Our analysis also involved selecting appropriate discounts for lack of control and lack of marketability that were supported by our consideration of the rights, restrictions, and other factors specified in the partnership agreement.
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