1. North Carolina Department of Revenue ADVANCED PERSONAL PROPERTY SEMINAR Joseph S. Koury Convention Center Sheraton Greensboro Hotel at Four Seasons Mall Greensboro, North Carolina September 26, 2013

2. 9:00 pm – 9:50 pm Andy Hinds, MAI, SGA ® * David Pope, MAI, SRA, SGA ® Hotel and Club Associates, Inc. ahinds@hotelandclub.com dpope@hotelandclub.com 336-379-1400 * Member of the Appraisal Institute, Society of Golf Appraisers Valuation of Golf Properties

3. I. Cost Approach Seldom Used by Buyers/Sellers/Brokers Courses typically built to add value to surrounding real estate – amenity Limitations Land Valuation Subjective Clubs sell at a fraction of replacement costs Hard to measure external obsolescence

4. Land Value According to the Dictionary of Real Estate Appraisal, Consistent Use is defined as “The concept that land cannot be valued on the basis of one use while the improvements are valued on the basis of another.”

5. Land Value Continued Challenges Value based on consistent use – lack of golf land comparables Golf not same as residential use Golf land more akin to open space Residential developers sometimes give land to golf course developers

6. Depreciation Physical Depreciation Greens;15 – 30 year life Tees; 15-20 year life Irrigation10-15 year life Cart Paths 5-30 year life External Obsolescence Significant levels obsolescence in current market How to measure

7. II. Income Approach 1.Uniform System of Financial Reporting for Clubs 1 An example of the Uniform System of Financial Reporting for Clubs for a hypothetical public golf facility is shown next. 1. Uniform System of Financial Reporting for Clubs, Sixth Revised edition Club Managers Association of America, Inc. www.cmaa.org www.cmaa.org

8. Uniform System Example

9. 2.Capitalization Sources of overall golf capitalization rates:  Actual Golf Sales from: buyers & sellers, brokers, appraisers  Society of Golf Appraisers www.golfappraisers.orgwww.golfappraisers.org  Realty Rates www.realtyrates.comwww.realtyrates.com

10. III.Sales Comparison Approach 1. Sources of Data a)Public Records b)Articles c)Appraisers and Brokers  CB Richard Ellis www.cbre.comwww.cbre.com  Hilda Allen www.hilda-allen.comwww.hilda-allen.com  Marcus & Millichap www.marcusmillichap.comwww.marcusmillichap.com  Hodges Ward Elliott www.hwehotels.comwww.hwehotels.com  Coldwell Banker Commercial www.kbgolfcoursesales.comwww.kbgolfcoursesales.com d)Golf Pros, Managers and Owners e)Publications  Golf Inc. www.golfincmagazine.comwww.golfincmagazine.com  Golf Business Magazine www.golfbusiness.comwww.golfbusiness.com

11. 2.Units of Comparison a)GRM – Gross Revenue Multiplier or NIM – Net Income Multiplier b)Price per Hole c)Price Per Round, Price Per Acre or Price Per Member

13. Allocation Total Going Concern Value/Price Must Allocate Business Personal Property Intangible Business Enterprise Real Property