Webmaster’s Note: This is the first in a series of weekly posts by John Cicero, MAI who will provide commentary on issues affecting real estate appraisers, with specific focus on commercial valuation.
Disclosure: John is a partner of mine in our commercial real estate valuation concern Miller Cicero, LLC and he is one of the smartest guys I know.
We commercial guys like to think that we are sophisticated financial analystswe analyze real estate as an investment vehicle, similar to an equities or bond analyst would. We spend our days cash flow modeling wirh Argus and Dyna. Our training includes advanced capitalization theory, in order to understand the relationship between cap rates and yield rates, and we need to understand theories that, frankly, we’ll never use again (remember the J-factor and the Hoskold premise?). We analyze assets worth hundreds of millions of dollars, and advise clients on managing their real estate risk.
That’s why it’s particularly disheartening that, in these days of appraiser licensing, the state doesn’t quite know what to do with us. I recently went onto the New York State Department of Licensing web site and found the other “professions” that are similarly licensed:
Don’t get me wrong. I have the utmost respect for notary publics, cosmetologists and telemarketers, all of whom work hard to make an honest living. But if this is the public perception of the commercial real estate appraiser, I suspect that attracting bright and talented people to this field will continue to be a struggle.