CLIENT:

Major steel company – inland bulk terminal

LOCATION:

USA

CHALLENGE:

Major steel company was looking to determine a market value lease rate, terms and conditions for the renewal of a lease for a bulk terminal located on a major inland waterway for lease negotiations. After several discussions with local, traditional appraisers, they realised the market dynamics for this type of asset were different than what they were being told, as the value ranges being discussed were not correlating with their investment in the facility and the supply/demand factors for this type of asset and other relevant issues.

SOLUTION:

Undertook an income, replacement, developer’s residual method and comparable approaches to valuation. With results, could advise the client on value and lease rate terms and conditions.

THE NET RESULTS:

Client could present to their tenant a substantiated case as to the lease rate terms and conditions for the asset, which was considerably higher than what they had been paying. Tenant accepted results of the study and renewed the lease.