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Negotiations Fail, Expert Testimony Can Succeed
man’s ceiling is another man’s floor,” goes the
song. That truism is often applicable to disputes around real estate
valuations: one party wants a high value, the other wants a low
one. Everyone hopes a negotiated settlement can be reached…and
in their favor.
Fortunately, even when litigation or arbitration
is a prospect, almost all disputes end in negotiated settlements.
Unfortunately, it doesn’t always happen that way.
When a trial or arbitration is called for, the testimony of experts
will often have an important impact on the outcome.
We’re proud to say that over the last three years Lea Associates,
Inc. (LAI) has enjoyed an unbroken series of successes in supporting
its analysis and value opinions. To give you an idea of how diverse
these cases were, we’ve provided quick summaries below.
Long Beach vs Coal Oil, Inc. -- This case involved
the entire acquisition of multi-parcel residential property in Long
client was the property owner, who was awarded 170% over the agency
appraisal after LAI’s testimony at the trial. In a rare move,
the court also awarded costs to LAI’s client.
United States vs 1.337 Acres of Land (Hotel San Diego) and United States
Acres of Land (Parking Lot) -- Our client was the
U.S. Department of Justice in a dispute involving the entire acquisition
of a historic 250 room, 200,000 square foot hotel building in downtown
San Diego for federal courthouse expansion. A negotiated settlement
within 3% of LAI’s opinion was reached after depositions.
County of San Diego / American Tower -- Our client
was the lessee in a rent resetting dispute involving a 10 year period
telecommunications site in north San Diego County. There was a recommended
percentage rent differential of 160% between appraisers. A neutral
arbitrator’s decision was only 19% of total difference sought
Lancaster Redevelopment vs Brent Eidelman -- This
case involved the entire acquisition of a 44-unit SRO hotel by our
client, a redevelopment
agency. While there was a 117% value opinion difference between appraisers,
the jury verdict was within 5% of LAI’s testimony at trial.
5. San Diego Metropolitan Transit Development Board vs R.V. Communities --
LAI was retained by the property owner in a case involving an acquisition
by the Metropolitan Transit Development Board of San Diego. The jury
award for Parts Taken in this case was approximately 200% higher than
the testimony of the agency appraiser and just 30% lower than LAI’s
State of California vs San Antonio Lakes -- Our
fair market value appraisal was for the owner of a400+ acre mixed use
site in Upland, California from which approximately 40 acres was being
acquired through eminent domain for the Route 210 freeway. The approximately
$18 million settlement during trial was 75% of the difference between
the agency appraiser’s opinion and that of LAI. This represented
an approximately 1,300% increase.
Lessees / Seacliff Land, LLC -- LAI
was retained by the lessees/homeowners of approximately 50 sites
on the beachfront
in Ventura County. In a rent resetting arbitration, the judge/arbitrator
completely rejected the landowner position.
County of Los Angeles Department of Beaches & Harbors / Del
Rey Professional Association -- The land leases
to the various developer/improvement owners at Marina del Rey are reset
each ten years.
In a June 2003 arbitration, the judge/arbitrator found for the lessees
in exactly the amount of LAI’s opinion of market rent.
9. Deutsch Realty & Management / Coldwell Banker Residential Brokerage --
LAI was retained by the tenant in an office lease rent resetting arbitration.
The third appraiser/arbitrator concurred with LAI’s opinion.
Smith vs Riverside County Economic Development Agency --
The Economic Development Agency of Riverside County was our client
dispute involving the entire acquisition of an auto repair facility
in Riverside County. Testimony verdict concurred with our appraised
value estimate which was 13% lower than the last offer made to the
property owner and 24% lower than the property owner’s appraisal.
State of California vs Hall -- We were retained
by the property owner in a case in the East County area of San Diego
involving an entire
taking of several acres of industrial land by Caltrans for a freeway
extension. The $4,500,000 jury verdict was 11% below LAI’s opinion
and over 200% above the opinion of the state’s appraiser/witness.
Application to the court by LAI’s client to recover costs was
Not Just Expert Testimony
Success in arbitrations or trials where the valuation of real property
is at issue usually involves more than solid expert testimony. We
have assisted clients in a variety of ways, including:
Statement of Valuation Data
Valuation summaries (Government Code 7267.2)
Exhibit design and preparation
Analysis of opposition information and analysis
Analysis of peripheral points which may become issues in the case
Serving as arbitrator
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Volume 2, Number 1