May 2018 Massachusetts and Rhode Island Chapter Newsletter
PRESIDENT’S MESSAGE UPCOMING EDUCATION In Like A Lion, Out Like a Lion by Bud Clarke, MAI 2018 President 7 Hour National USPAP Update Course (2018 - 2019) The month of March recently came in like a lion and out like a lion, not a lamb! New England's June 7, 2018 third nor'easter in less than two weeks slammed parts of the region and dropped as much as 2 Warwick, RI feet of snow in some places and brought dangerous whiteout conditions on the roads. Solving Land Puzzles June 13, 2018 Hurricane force wind gusts were severe in places as much of coastal Massachusetts, Rhode Waltham, MA Island, Connecticut, New Hampshire and Maine bore the brunt of the storms. Low lying
coastal areas experienced significant flooding and damage, while communities all over the Real Estate Finance Statistics and Valuation Modeling region experienced flooding, falling trees, and power outages. June 14 – 15, 2018 Woburn, MA The aftermath of these storms left damaged homes, breached seawalls, and wreckage
scattered in the streets, with generator-powered pumps sucking saltwater from flooded Basic Appraisal Procedures basements. Shattered fences and broken trees littered yard after yard. June 20 – 23, 2018 Braintree, MA
Disasters tend to occur suddenly, taking the public by surprise, even when the location is 7 Hour National USPAP Update known to be prone to such an occurrence. Depending on the nature of the disaster, Course (2018-2019) destruction of property may be widespread and to varying degrees. Initially, the collective June 28, 2018 Woburn, MA reaction to any disaster is shock; however eventually, there is recovery and damaged property needs to be repaired and destroyed property is often replaced. (cont’d on page 8) General Market Analysis and Highest and Best Use July 18 - 21, 2018 ANNUAL DAY OF SERVICE AT THE Woburn, MA GREATER BOSTON FOOD BANK IN MEMORY OF Register Now JAY ZEIGER, MAI ONLINE EDUCATION This years’ event is being held on June 6th Online Appraisal of Medical Office Building Learn More In 2017, sixteen Chapter AI Professionals, participated in the Jay Zeiger Service Day at the Greater Boston Food Bank (GBFB). This annual day of service is in memory of Jay MEETINGS & EVENTS Zeiger and his legacy of service to the Chapter and to the community. This year’s
event is almost sold out! With critical volunteer, donations and in-kind support, RI Branch Chapter Meeting June 21st GBFB is leading the response to End Hunger Here, but despite these efforts, one in
National Grid Energy Hub nine residents of our community remains food insecure. THE GBFB is committed to Providence, RI providing at least ONE MEAL A DAY for every person in need in eastern
Massachusetts. Click here to register Register Now
IN THIS ISSUE Boston Landing – A
Public/Private Success Story
I’m Concerned with the Shortage . . .
Tech Tools and Tips
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2018 OFFICERS & RHODE ISLAND BRANCH CHAPTER CORNER DIRECTORS Bradford Hevenor, MAI, 2018 Chair, RI Branch Chapter
President The Rhode Island Branch Chapter kicked off an energetic first half of the year with a productive first Bud Clarke, MAI meeting on February 16 at the lovely Kirkbrae Country Club in Lincoln, Rhode Island. Our first Branch Vice President Chapter meeting included the presentation of our final Hope Scholarship awards to Susan Kelly, SRA Gregory T. Curtis, MAI and Karen Ryan, SRA, in support of their candidacy for the residential review designation. During the presentation, Chairman of the Scholarship Committee Bill McGovern, SRA paid tribute to the Hope Treasurer Scholarship, which sunset at the end of 2017, as well as to the many associates who advanced toward George Demopulos, SRA, AI- their designation with support of Hope funds. The Branch Chapter also congratulates Bill McGovern on RRS his retirement and thanks him for his many years of leadership and dedicated service to our profession and the Appraisal Institute. Secretary John R. Drew, MAI In spite of snowy weather, Rhode Island hosted two successful and well-attended educational programs in March, including the 2017-2018 USPAP update and AI’s new seminar, “Solving Land Valuation Immediate Past President Puzzles.” In April, the Branch Chapter welcomed Sandra Adomatis, SRA to present two half-day Karen Friel, MAI seminars on green residential construction and solar PV valuation. The Chapter was able to offer DIRECTORS discounted tuition to participants thanks to financial support from Elevate Energy and the Rhode Island Energy Efficiency and Resource Management Council, as well as donated conference space at Rhode Gregory Accetta, MAI, AI-GRS Island College. The program attracted over fifty participants which included professionals from all Christopher Bowler, MAI, SRA corners of Rhode Island, as well as Massachusetts. These included residential and commercial Deborah Carlson appraisers, municipal assessors, real estate brokers, and AMC and bank review appraisers. Special David L. Cary, MAI guests included University of Rhode Island Students enrolled in the Energy Fellows Program, as well as Joseph P. Comperchio, SRA other stakeholders in energy-related fields. An informal panel discussion was presented during the Randell L. Harwood, MAI luncheon, moderated by Dr. Carrie Gill from the Rhode Island Office of Energy Resources, which Melanie Kosich, MAI included speakers from National Grid, CLEAResult, and Church Community Housing. It is our hope that J. Michael Tarello, MAI the program will provide a springboard for future collaboration and education, as well as promotion of
Chair of the RI Branch Chapter AI’s Valuation of Sustainable Buildings Professional Development Program. Bradford Hevenor, MAI The Branch Chapter is proud to have two members attending AI’s Leadership Development Advisory Council in Washington, DC at the end of May. LDAC participants will be formulating solutions to Newsletter Committee problems and challenges faced by the appraisal profession. In addition, our two participants will be Contact the Chapter Office to meeting with Rhode Island’s congressional delegation to discuss appraisal issues including regulation, learn more waivers, and modernizing appraisal oversight.
Chapter Office The Branch Chapter looks forward to its next meeting to be held on June 21 at the National Grid Energy Lianne Andreucci Innovation Hub in Providence. This morning meeting will include our election for next year’s Branch Executive Director Chapter Advisory Board. In addition to the Branch Chapter meeting and elections, attendees will be 51 Pleasant Street able to participate in a tour of the Hub, which is National Grid’s collaborative, community space PMB 164 designed to elevate the conversation around the future of energy and the environment. After the Malden, MA 02148 Branch Chapter meeting, there will be an optional educational offering developed by CLEAResult on the 781.397.8922 topic of building science and zero energy ready homes. Keep an eye out for the meeting notice with Website further details. The Branch Chapter also has its sights set on our September Chapter meeting to be
hosted in Rhode Island. Currently in its planning stages, we hope to build on this year’s energy theme Stay Connected! with a home-grown educational offering on commercial and utility-scale solar, as well as a social reception and networking opportunity. We look forward to seeing everyone in-person at these great events.
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WELCOME to the Massachusetts and Rhode Island Chapter!
The Chapter is pleased to welcome the following new AI Professionals to our Chapter! The real estate professionals listed below have chosen to become part of the Appraisal Institute and open the door to world-class education and networking opportunities. As rapidly as the profession is changing, appraisers today need to prepare for the future. But it's tough to keep up on your own. Appraisal Institute opens the door for you to share in the collective wisdom and experience of 25,000 individuals who are working together to build a stronger future for the profession.
Andrew Mellen - Practicing Affiliate Craig Segien - Candidate for Designation Boston, MA Boston, MA
Joel Bevis – Candidate for Designation John Charters – Candidate for Designation Newburyport, MA Natick, MA
Lawrence Langley – Candidate for Designation Adam Hevenor, Candidate for Designation Worcester, MA Wakefield, RI
Joseph D. Crescio – Candidate for Designation Revere, MAI
NEWLY DESIGNATED MEMBER PROFILES The Massachusetts and Rhode Island Chapter Congratulates Our Newly Designated Members
Sandra Heath, MAI In 2010, she left the fee appraisal world and became a review appraiser; first for HUD's apartment division in Providence, RI, then with Rockland Trust Company and then with Needham Bank, both in the Boston area. She recently took the position of Head of Appraisal at United Bank, headquartered in Hartford, with offices in West Springfield and Worcester, where she currently works.
Sandy lives in Duxbury, MA with her husband and two college- aged sons.
Stacie Chandler, SRA . Stacie Chandler, SRA of Chandler Real Estate Services, in Spencer, MA received her SRA designation in January 2018. On January 29th, Sandra Heath, MAI was presented with her Achieving the SRA designation shows that Stacie has gone above MAI certificate by Bud Clarke, MAI, 2018 President of the and beyond the education and experience needed for state Massachusetts and Rhode Island Chapter of the Appraisal Institute. certification. As a Designated member of the Appraisal Institute, Ms. Heath has been a commercial appraiser since 1986, when she has made a commitment to advanced education, higher ethical she began her career as a researcher with Arnold Grant Associates requirements and elevated expectations for the appraisal in Hartford, Connecticut where she worked as a senior appraiser, profession as a whole. then head of their multi-family department. In 2005, she moved to Congratulations to Stacie on becoming an SRA Designated the Boston area and continued doing commercial fee appraisal member and achieving a prestigious designation that differentiates work, including appraisals of high-end residential properties for her in a highly competitive marketplace! LandVest, Boston.
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BOSTON LANDING: A PUBLIC/PRIVATE SUCCESS STORY by Thomas Jensen, MAI Two Hour CE Program being held on May 23rd
The Massachusetts and Rhode Island Chapter of the Appraisal Institute will be holding a two-hour continuing education event at 2:30 PM on May 23rd within the Boston Bruins training facility at 80 Guest Street in Brighton. Panelist will include: Erin Harvey, Senior Leasing Agent of NB Development; Keith Craig, Project Manager, New Balance Development; Ellen DeNooyer, Senior Project Manager, MBTA; and James Parker, Associate Team Counsel, Boston Celtics. Boston Landing is home of the Boston Bruins' and soon to be Boston Celtics' practice facilities. Following CE program, participants are invited for networking, cocktails and light refreshments, at Brighton Bowl, a new candlepin bowling alley, located in Flatbreads at 75 Guest Street. The program will feature an overview of NB Development's mixed-use Boston Landing complex with focus of the MBTA's Public Private Partnership (P3) in constructing the new commuter rail station. It will also focus on the station's impact on marketability and value as a transit-oriented development. Finally, the program will also discuss the new transit station as a catalyst for the overall neighborhood's redevelopment.
Public sector budgets are always under pressure and governmental agencies increasingly seek to fund development projects and infrastructure construction through public-private partnerships (“PPPs”). Public-private partnerships for infrastructure are more common in other regions of the world, but such partnerships are less common in the U.S. because there has often been public money set aside for these projects. In addition, there has been a strong tax-free municipal-bond market providing incentives for states and cities to borrow money and build on their own.
The concept of governments building transit has often been considered inconsistent with American traditions. Government uses taxpayer money to build a rail line or a highway, which then increases the property values of nearby private homes and businesses. Money is put into the pockets of landowners who didn’t have to spend a dime making their real estate more valuable.
The private sector can afford to build transit and is now becoming a more attractive proposition as Americans move back into urban cores and demand walkable, transit-oriented development. Improved access to public transit with new stations increases project marketability and drives up values. Therefore, it becomes financially beneficial for the private sector to make these investments.
In 2015, the Massachusetts Department of Transportation and New Balance entered into an agreement in which New Balance would pay for the permitting, design, and construction of the new commuter rail stop. The new $20-million Boston Landing Commuter Rail Station, privately financed by New Balance, resulted in restoring commuter rail service to the Allston-Brighton neighborhood. The opening of Boston Landing Station highlights a successful collaboration between the state, city, and New Balance to expand development and transit opportunities for the community. Projects such as this one spur local economic development and community growth. Strong public and private partnerships work together to improve reliability and transit options for the communities served by this line and the system as a whole.
Construction of the New Balance-financed station began in October 2015 with the company continuing to pay for all maintenance costs of the station for the first ten years of its service. A successful example of public-private partnerships and transit-oriented development, Boston Landing Station is part of the 15-acre Boston Landing Development site, which will at full build-out include new office, lab, retail, restaurant and open space, a 295-unit apartment complex, and a 175-room hotel. Opened in May 2017, Boston Landing Station has resulted in job creation, encouraging mass transit use, and has served as a catalyst for increased economic activity in the neighborhood.
(Cont’d on page 5)
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Boston Landing: A Public/Private Success Story (from page 4)
Leasing in projects abutting recently completed transit stations have demonstrated a 10% to 15% increase in effective rents for deals negotiated shortly before and after a station opened. Therefore, a hypothetically proposed 1.0 million square foot mixed-use complex with a roughly $600 per square foot stabilized value could have a $60 to $90 million value increase due to the presence of an abutting transit station. The 2.15 million square foot Boston Landing Station cost the NB Development $20 million making the investment financially feasible and creating a substantial return on their capital outlay. A proposed complex would likely have a higher tenant renewal probability and less downtime between eventual tenant turnovers. A transit-oriented building could obtain points toward LEED certification enabling the project to attract superior credit tenants lowering the capitalization rate paid by a prospective investor.
Governing agencies are also likely to approve higher development densities for transit-oriented developments and require lower parking ratios, therefore, reducing construction costs. A new transit station can be a catalyst for attracting jobs and improving the municipal tax base with new development helping to create badly needed housing.
Future MBTA PPPs could include sites along the Green Line Extension (“GLX”) through Somerville and the proposed West Station between Harvard and Boston University near the former Allston toll plaza. Harvard University recently increased its contribution to the potentially $100 million West Station commuter-rail stop over the Beacon Park rail yard in Allston to $58 million. Harvard’s increased contribution offer was made in response the Department of Transportation pushing the station’s opening to as late as 2040. Harvard wants to speed up the development timeline for the 130 acres around the future station. The proposed West Station will be more complex than the Boston Landing stop, which will include a bus terminal as well as rail links to North Station and Cambridge.
Millennium Partners and Cargo Ventures recently proposed constructing $100 million aerial gondola featuring trams over Summer Street between South Station and their 12-acre development site in the Raymond Flynn Marine Park. The system could carry up to 4,000 passengers per hour and would require 13 towers carrying passengers the entire route from South Station to Flynn Park in roughly 7 minutes.
In conclusion, PPPs can be a cost-effective way for developers to obtain higher density entitlements, lower construction costs, and improve the marketability and value of their proposed projects. The Appraisal Institute’s May 23rd program at Boston Landing will feature an overview of the new commuter rail station’s impact on the marketability of the Boston Landing complex as well as on the neighborhood’s revitalization.
Massachusetts and Rhode Island Chapter is Sponsoring Three Participants The Leadership Development & Advisory Council strives to foster creative thought from talented individuals involved in the real estate appraisal profession while developing the future leaders of the Appraisal Institute. LDAC also establishes an “appraiser- presence” in Congress and demonstrates that the Appraisal Institute is made up of professionals who recognize the importance of being actively involved in the political process
For 2018, third year participant, Deborah Carlson, a Candidate for Designation and an Appraisal Manager at Needham Bank, second year participant Brad Hevenor, MAI, an appraiser from Wakefield, RI, and Susan Kelly, SRA, an appraiser from Lincoln, RI, were selected by the Chapter’s Board of Directors to attend LDAC. Thank you to Deb, Brad, and Sue for representing our Chapter at this important AI event.
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NEWLY DESIGNATED MEMBER PROFILES The Massachusetts and Rhode Island Chapter Congratulates Our Newly Designated Members
Anthony Saragosa, MAI Daniel Jalbert, MAI, AI-GRS . Daniel Jalbert, MAI, AI-GRS, a review appraiser for the Department of the Army, U.S. Army Corps of Engineers was awarded the AI-GRS designation by the Appraisal Institute in February 2018. The AI-GRS membership designation is held by professionals who provide reviews of appraisals of a wide range of property types, including commercial, industrial, agricultural, residential, and vacant land. As a Designated member of the Appraisal Institute, he has made a commitment to advanced education, higher ethical requirements and elevated expectations for the appraisal profession as a whole.
Anthony Saragosa, MAI, an appraiser at Shuka Associates in Beverly, MA was presented with his MAI certificate by Bud Clarke, MAI, 2018 President of the Massachusetts and Rhode Island Chapter of the Appraisal Institute on January 29th, 2018.
Mr. Saragosa has appraised real estate since 2003 and is a Certified General licensed appraiser in Massachusetts. He is a graduate of both Wentworth Institute of Technology and the University of Massachusetts with two engineering degrees. He is experienced in the appraisal of religious, funeral home, veterinary clinic, apartment, mixed use, office, retail, restaurant and office properties.
James Moore, MAI James Moore, MAI, Executive Vice President and Patner at CB Richard Ellis/New England in Boston, MA received his MAI desigantion in February 2018. Achieving the MAI designation shows that James has gone above and beyond the education and experience needed for state certification. As a Designated member of the Appraisal Institute, he has made a commitment to advanced education, higher ethical requirements and elevated expectations for the appraisal profession as a whole.
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APPRAISAL INSTITUTE NEWS – REGION IV Two Conference Call meetings held in 2018 by Bud Clarke, MAI, 2018 Chapter President
Chapter representatives to Region IV have attended two conference call meetings through April 2018. These meetings are an important vehicle for chapter leadership to keep up to date on what is happening at the National level, and to share local concerns with representatives on the National Board of Directors.
On the most recent call held on April 17th, President Elect Stephen S. Wagner, MAI, SRA, AI-GRS presented the State of the Appraisal Institute which included an update on the CEO search, recent Board actions, and a financial update for the organization. The search firm of Tryon and Heideman has been hired, and to date 40 applications have been received. Local chapter professional Joseph Comperchio, SRA is a member of the CEO Search Project team.
President Elect Wagner also reported that The National Board of Directors passed two amendments to the existing bylaws which had previously been sent to 45-day notice. The first amendment related to regulations associated with the application for admission to candidacy and the second related to the vice president elect. He also outlined the new SRA Designation path that was launched on January 1st. An update on the active appraiser population in the US was also provided. As of December 2017, there are 82,208 appraisers, of which 54% are certified residential, 36% are certified general, and 8 percent are licensed appraisers.
On both calls, regional reps were provided an update on the status of the Chapter Financial Management Policy. The program is currently in beta testing with volunteer chapters participating at this point. Future participation by all chapters is still a topic of discussion with no specific (con’t on page 12)
NEWS FROM THE NATIONAL OFFICE
statements, professional practice questions, AI continuing AI Requests Appraisal Standards Board to Rework Q&As education requirements and logging outside CE, professional As the real estate valuation profession's leading advocacy group, the development programs, key contacts, and much more. Appraisal Institute in an April 13 letter to the Appraisal Standards Board expressed concern that two Q&As may be amending Uniform Sign Up for the 2018 Annual Conference Standards of Professional Appraisal Practice definitions and creating Consider attending the Appraisal Institute's 2018 Annual new requirements rather than interpreting USPAP itself. AI provided Conference at the brand new JW Marriott hotel in downtown additional rationale at the ASB's April 20 meeting, and further Nashville, Tennessee. Alison Levine, a best-selling author and explanation and clarification are anticipated from the ASB on these mountain climber focused on leading teams in extreme issues. The letter formally requested changes to or the retraction of environments, and Don Gossman, SRA, an appraiser and author the Q&As. Learn more and read AI's letter. who worked with the FBI and U.S. Attorney's office to help break up a mortgage fraud ring, will be the keynote speakers at the Annual
Conference. Learn more about the AI Annual Conference and New Designated Member Resources register today. Or watch the video. Admissions and Continuing Education recently created a new resource it will send to newly Designated members (earning first and Appraisal Institute Education Trust additional designations). The document covers information important The Appraisal Institute Education Trust offers a variety of to newly Designated members and will also serve as a great refresher scholarships. The next deadline to apply is July 1st. These for individuals adding additional designations. scholarships are funded by the Appraisal Institute Education Trust Designated Member Resources includes information regarding (AIET). To learn more about the AIET, visit the Appraisal Institute enhanced benefits, use/request of designations and logos, member Education Trust. Or visit the Charitable Entities section to make a dues structure, expanded AI member profile, public relations and donation. Please email [email protected] if marketing, AI volunteer opportunities, networking, certification you have any questions.
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President’s Message (from page 1) a With these types of storms comes the need for appraisal expertise that can address this damage, dislocation and material changes in
real estate market conditions. Demand for appraisal and valuation services will increase, and the assignments likely will be complex and require the services of experienced appraisers. Analyzing data in such markets presents an array of challenges. How can an appraiser develop a credible opinion of market value in the aftermath of a disaster?
AI’s Guide Note 10: Development of an Opinion of Market Value in the Aftermath of a Disaster can help appraisers servicing areas
affected by catastrophic events. In recent years, the northeast has experienced several unusually destructive hurricanes, floods, and severe winter storms. During such periods, real property markets in affected areas often exhibit instability, and sometimes chaos. Analyzing market data in such markets can be problematic.
The purpose of Guide Notes to the Appraisal Institute’s Standards of Professional Appraisal Practice is to provide guidance as to how the requirements of the Standards may apply in specific situations.
The four key concepts of AI’s Guide Note 10: Development of an Opinion of Market Value in the Aftermath of a Disaster relate to Market Value, Applicability of Basic Valuation Considerations and Principles, Sustainability of Value, and Competency Issues.
Guide Note 10 is intended to focus on market value assignments. As summarized directly from Guide Note 10, an appraiser must be especially mindful of the key components of the definition of market value when appraising in an unstable market that has been
impacted by a disaster. Quite often, in the aftermath of a disaster, these key components of the definition of Market Value are absent from the transactions that occur – if any occur at all. For example, buyers and sellers might choose to act before they have full information. Because of the disaster, they might be extraordinarily motivated to buy or to sell. Exposure times for properties on the market might become extended, or might suddenly become contracted. Sometimes, market activity will virtually cease altogether in the aftermath of a disaster; open escrows fall out; prospective sellers cancel plans to sell; and prospective buyers cancel plans to buy. The lack of data only further exacerbates the challenge for the appraiser.
Further, Guide Note 10 reminds us that any appraisal problem must be approached using recognized appraisal methodology and in light of basic valuation principles, regardless of whether market conditions are at their most chaotic. Applying established approaches to solving valuation problems will help to simplify even the most complex assignments. Valuation in the aftermath of a disaster requires special attention to the fundamental appraisal principles of supply and demand, anticipation, change, substitution, contribution, externalities, and balance.
Any or all of the forces that influence real property values and the factors that create value might be impacted by a disaster. This is especially true with regard to residential real estate given the immediacy of addressing residential repairs and replacing adequate shelter. As a result, sharp increases in asking and selling prices might be observed. This raises several questions from an appraisal viewpoint: Do such higher prices represent “market value”? Are the parties to the transactions “typically motivated” and acting in their best interest or is their behavior irrational? Are the properties being exposed on the market for a “reasonable” length of time prior to sale?
The principles of substitution, contribution and externalities help provide the answers to these questions. In addition, the principles of
anticipation and change are also especially relevant to valuation assignments in the aftermath of a disaster. While these fundamental principles provide a framework from which to appraise, the durability of the value conclusion in the aftermath of a disaster is also a key issue to address. Changes in market conditions may cause changes in market value to occur more rapidly than usual.
Further, Guide Note 10 reminds us of the requirements of the Appraisal Standard’s Competency Rule. This rule become greatly
enhanced in assignments to develop market value opinions in the aftermath of a disaster.
The Appraisal Institute has significant resources available to its membership to assist in performing complex appraisal assignments for real property. The Guide Notes to the Standards of Professional Appraisal Practice are just one tool available to Appraisal Institute Members, Candidates, Practicing Affiliates and Affiliates.
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2018 REPORT OF THE NOMINATING COMMITTEE
Karen Friel, MAI, 2018 Nominating Committee Chair
Pursuant to the procedures specified in Article X, Nominations and Elections of the Massachusetts and Rhode Island Chapter of the Appraisal Institute's bylaws, the Nominating Committee met via teleconference on March 26, 2018, and submits the following slate for Officers and Directors for the year 2019. The following represent only the vacant positions for this upcoming year, 2019 and a vacant Regional Representative position for the remainder of this year 2018.
President: Gregory T. Curtis, MAI
Vice President: George Demopulos, SRA, AI-RRS
Treasurer: John R. Drew, MAI
Secretary: Bradford Hevenor, MAI
Zach Bowyer, MAI Directors for a 3-year term: Robert Maloney, MAI (1/1/18 – 12/31/20) Karen Ryan, SRA
Regional Representatives - 2 yrs Deborah Carlson and John R. Drew, MAI (1/1/19 – 12.31/20)
Ryan D. Christman, MAI, Sandra Heath, MAI, Thomas J. Jensen, MAI, Regional Representative Alternates Brett N Pelletier, Jacob C. Ross, SRA, Christopher B. Stickney, Matthew (1/1/18 – 12/31/18) H. Wood, MAI
The foregoing slate will be voted on Wednesday, May 23, 2018 at its regular meeting being held at the Boston Landing, 80 Guest Street, Boston, MA
Are you interested in getting more involved in the Chapter? Visit AI Volunteer Opportunities and complete the Leadership Resource Registry.
2018 CHAPTER SPONSORS Thank You to the following companies who are participating in our Chapter Sponsorship program. Platinum Partners
Silver Partners
Their support of the Massachusetts and Rhode Island Chapter of the Appraisal Institute is recognized and appreciated. We are still taking accepting sponsorships for 2018. Learn about the Sponsorship Program here. P a g e | 9
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RHODE ISLAND BRANCH NOMINATING COMMITTEE REPORT
Election of 2019 RI Branch Chapter Advisory Board to take place on June 21st
On April 13th, 2018, the Nominating Committee of the Rhode Island Branch Chapter of the Massachusetts and Rhode Island Chapter of the Appraisal Institute met via conference call. The committee also met via email on April 24th and May 2nd. The Committee presents its report with the following slate for positions on the Rhode Island Branch Advisory Committee for 2019. The 2018 RI Branch Nominating Committee members are Jordan Hevenor, MAI, Chair, Gregory Accetta, MAI, AI-GRS, and S. Peter Scotti, MAI.
Chair: Douglas Gablinske, SRA, AI-RRS Term to expire: 12/31/2019
Vice Chair: Susan Kelly, SRA Term to expire: 12/31/2019
Advisory Board: Adam Andolfo, SRA Term to expire: 12/31/2020
Advisory Board: Michael LaFrancois Term to expire: 12/31/2019
Advisory Board: Karen Ryan, SRA Term to expire: 12/31/2018
This election will take place at the June 21st meeting of the Rhode Island Branch Chapter at the National Grid Energy Innovation Hub in Providence, RI.
AI Introduces New Benefit for Hewitt Scholarship Committee Appraisal Institute Professionals By Bud Clarke, MAI, 2018 Chapter President
The Hewitt Scholarship Committee continues to offer Here's some good news you might be interested in! scholarships to assist candidates in completing the Demonstration of Knowledge Requirement. On April 19th the Appraisal Institute introduced a new benefit that allows AI professionals to receive discounted pricing and In 2018, the Hewitt Scholarship Committee voted to fill one a free 30-day trial of Fuel Valuation, a cloud-based platform open position on the committee. Brad Hevenor, MAI was powering valuation, forecasting and transaction underwriting appointed for a three-year term (1/1/18 - 12/31/22).
for commercial real estate. Congratulations Brad and thank you for your service!
FUEL Enterprises and the Appraisal Institute have introduced In 2018, the Hewitt Scholarship has awarded two a best in class technology, FUEL Valuation to AI professionals scholarships for completion of the Demonstration of as a new AI benefit. FUEL is a state-of-the-art cloud-based Knowledge requirement. platform powering the next generation of valuation, forecasting, and transaction underwriting for CRE. AI Jeremiah Manfra, MAI Vanessa Mann, MAI professionals receive a complimentary 30-day trial and a
monthly rate of $99 (regular price $149). Learn how the Chapter’s Scholarship Committee can help you in your path to designation. Information can be found on the Learn more about Fuel Valuation Chapter website. (AI log-in and password required).
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I’M CONCERNED WITH THE SHORTAGE . . . Reprinted with permission from APPRAISAL BUZZ by Matthew Simmons, August 2017
……of young attorneys entering the legal profession. It’s a real problem, particularly in rural areas. Buzz around the internet and you’ll see how serious the issue has become. According to the American Bar Foundation Lawyer Statistical Report, in 1980, 36% of the nation’s licensed lawyers were under the age of 35. By 2005, only 13% were under 35 years of age. Roughly 25% of 2000 law school graduates were no longer working in the legal profession by 2012. The percentage of attorneys age 35-64 continues to increase while the profession is graying. Sound familiar?
The recent barrage of articles on ‘appraiser shortages’ has been infuriating to those actually working within the profession. It’s understandable given that appraisers are held to a standard of supportable and documented conclusions in their valuation work yet have that very profession undermined by a litany of stereotypes, misinformation, and anecdotal incidences.
The exodus of young people from some areas of rural America is real, but is a cross-profession issue. It applies to doctors, attorneys, appraisers, and most other professions in rural markets. There are a number of appraisers in rural areas who would be glad to do appraisals at market rate fees, but let’s even set that aside and just agree that a single lender’s story about having trouble finding an appraiser in a town of 800 people should not serve as the guiding principle for future regulation. Nor do I see the legal community suggesting that we come up with other ways to meet our future legal service needs. It’s generally understood that while there are ebbs and flows, in a free and open market, supply will find demand.
Speaking of supply and demand, our firm recently compiled some data on the supply of appraiser credentials in comparison to mortgage origination volume. Based on the level of hysteria out there, I bet this will show how few appraisers we have to complete all of this mortgage finance work, right?
Wrong. The number of active credentials on the National Registry was 92,434 in 2003. It was 96,856 as of 2016. That’s an increase of 5%. Meanwhile, the number of annual loan originations actually dropped 42% over that same period, according to ATTOM Data Solutions. Most of the articles claiming an appraiser shortage reference the number of credentials on the registry in 2007 (121,407) versus 2016 and then build the narrative around a 20% decline in appraisers. This is completely misleading and measures the supply of appraisers from only the high water mark.
How about looking at just Cert. Res. licenses compared to originations?
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I’m Concerned with the Shortage (from page 11)
Same story here. For every Cert. Res. credential on the national registry, there were 173 annual mortgage originations. That’s 14 originations per month, per residential appraiser. That’s hardly an overwhelming monthly work load. And those figures don’t account for Cert. Gen. appraisers who also do residential work or certain originations (mainly HELOCS) which often don’t require appraisals.
It’s also been suggested that appraiser supply be measure by unique credentials submitted through Fannie Mae’s UDCP portal as this is the true supply of appraisers doing mortgage finance work. That’s a reasonable suggestion. According to Fannie Mae, they have roughly 50,000 annual unique credential submissions. As of 2016, the ASC Registry reported 49,654 Cert. Res. credentials, so this method indicates the same 14 originations per month as the Cert. Res. registry method we list above. Of course, that also doesn’t account for the appraisers who want to be part of the supply but can’t manage to make the economics of mortgage finance appraisals work.
There are plenty of appraisers and we have every incentive to grow and to eventually replace our labor with future appraisers. Just like any other business.
The prospect of manufacturing a complex solution to a problem is awfully seductive. Who wouldn’t want to be the guy or gal that saves the proverbial day? But some problems are simple. Some problems don’t require new grant programs, specialized training incentives, or manipulation of supposedly objective educational and experience requirements. Some problems are simply an issue of supply and demand. I, like most other appraisal business owners, would love nothing more than to continue expanding my business. If that’s not happening, it’s because the economics of the business won’t allow it. It’s as simple as that. Don’t overthink it.
There. Is. No. Shortage. If someone has better data to dispute that, then fine. Let’s see it. But we’ve done the research. And if you want to continue arguing that there is a shortage, you’re going to have to show your work file!
Experienced Real Estate Appraisers Wanted by the Massachusetts Department of Agricultural
The Massachusetts Department of Agricultural Resources (MDAR) invites responses from experienced Massachusetts certified real property appraisers to conduct appraisals and/or prepare technical review appraisals on property proposed for acquisition (either in fee or by deed restriction) by MDAR, the Department of Conservation and Recreation (DCR), the Department of Fish and Game (DFG), the Executive Office of Energy and Environmental Affairs (EOEEA) and the Division of Capital Asset Maintenance and Management (DCAMM). For more information, please click here.
Region IV Update (from page 7) Featured AI Video Benefits of Working as an Appraiser Trainee plans available at this time. The Governance Structure Project team was also discussed. In January, representatives were told that there were several new members appointed to the project team by National President James Murrett, MAI, SRA. The 2018 Governance Structure Project team is expected to release its updated report for exposure in the coming days.
The 3rd Regional IV meeting is scheduled to take place on July 29th in Nashville. The Chapter will be sending four representatives.
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TECH TOOLS AND TIPS
By Jeffry Howry, Chair, 2018 Technology Committee
If you are providing a valuation of a retail store or a local business, you may want to know where the competition is located and, possibly, determine where competitive leases may exist. You can use the online mapping tool described below to obtain a good perspective of the market competition before you leave the office for a property inspection and an area reconnaissance to locate market data.
Online Mapping Tool for Competitive Businesses
Purpose: Find Places of a Selected Business Type within a Radius – https://www.freemaptools.com/find-places-within-radius.htm (Note: Do Not click on any of the Big Buttons or Labels below the map on this page – they are Ads!)
Case Study: Find Electronics Stores within a specified Radius of a location
1 – Select a business type from the Input drop-down menu
2 – Select a Radius (distance in Miles [or Km])
3 – Insert a place name (e.g. Norwood) or the latitude & longitude of the exact location (Hint: find the approximate area in Bing Maps, right click on the exact location for the center of the radius (e.g. Subject Property) and then Copy the lat/long coordinates for the location in the third input box.
4- Click Search
1 2 3
Competency Required USPAP Fannie Mae Freddie Mac FHA VA
Before completing X X assignment A list of business with Electronics will be displayed Before accepting X X X Assignment A large number of solar installations are occurring because of the growth in third party owned systems. How is an appraiser to handle the value of a property with a leased system?
Did you know in 2013 Massachusetts ranked number 5 in the US for installed solar? Solar may not be the norm in your market area but with the government mandates to install more renewable energy in every state, you may see solar coming near you soon. Do you know where to find resources that will give you support for the electricity escalation rates in your market area or the number of installs in your state? Register for the Residential and Commercial Valuation of Solar PV and you will be able to answer every question in this article.
Has it been a long time since you’ve taken a course that actually taught you things you’d never heard before? The Residential and Commercial Valuation of Solar PV course is coming to your chapter. You’ll find it is a hands-on course. You will walk away with a large number of resources and a couple of valuation tools. (Discounted Cash Flow Models) Bring your computer equipped with Excel 2007 or better to work the case studies that mirror real world dilemmas.
Government or company issued laptops often have security firewalls that block access to websites; therefore, you may not be able to access the tool used in the course. Prior to attending the course, make sure you can access and download the pre-class downloads shown on the Appraisal Institute Website.
I look forward to seeing a sold out class!
Click here to learn more about the class or to register now!
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Tech Tools and Tips (from page 13) Steven G. Elliott, SRA Report Mapping: For a good competitive properties map, Click on Appointed to the Download the KML and then use that file to create a handsome map in Google Earth (https://www.google.com/earth/ - this is a browser- Massachusetts Appellate Tax based tool best used in the Chrome.) Board Once the browser has opened Google Earth and you click through the intro page, Click on the Menu Bar on the Left side of the Google Earth browser display, Select the three parallel bars to open the Settings on the menu.
Click on My Places, Select Import KML File – From File
Once you Select the KML file you Downloaded – the map will be immediately created.
Governor Charlie Baker recently appointed Steven G. Elliott, SRA to the Massachusetts Appellate Tax Board. His appointment was confirmed by the Governors’ Council on Wednesday, April 11, 2018. Steve will serve a term ending on Feb. 28, 2023.
A real estate appraiser and consultant for more than 40 years, Steve is an SRA member of the Appraisal Institute. He previously served as chairman of The Appraisal Foundation and as a member of the Board of Directors of the Massachusetts and Rhode Island Chapter of the Appraisal Institute. He formed the partnership of Elliott, Gottschalk and Associates, Inc., in Ashland, Mass., in 1980 and currently serves as president. Steve is also an approved Figure 1 - Electronic Stores in downtown Norwood, Massachusetts instructor for several Appraisal Institute courses and is an Using the Snipping Tool (Windows) or Grab (Mac OS X), you can Appraisal Foundation-certified USPAP instructor. Copy/Paste/Save the section of the map you wish to use in your Congratulations Steve! report.
If you have a Google account or choose to create one, you will be able to Save your work online for later use. If you like this style of map, you may wish to install Google Earth on your desktop OR install Google Earth Pro, which will allow you to customize maps and their Icons (e.g. Numbered Icons)!
For more information, contact Jeff Howry at [email protected].
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