Pinnacle Advisory Group's combination of hospitality operations experience and real estate expertise ensures that our appraisals take into account every factor that affects value. Appraisal reports are each specifically tailored to client needs. They can range in scope from a limited appraisal presented in a restricted use report format to a complete appraisal presented in a self-contained report format for both the real estate and business components of an existing or proposed hospitality facility.

Market conditions are an essential component of a hospitality facility's value. Therefore, a comprehensive analysis of past, present, and anticipated market conditions is included in the development of each appraisal. Appraisal research includes each of the same elements required in a feasibility study with the findings translated into an expression of value through the use of all applicable valuation approaches.

Area market and general economic conditions are assessed to gauge operating viability. Primary market research is conducted to measure both the competitive supply of hotel rooms and the current and projected levels of lodging demand. Performance projections are then completed based on an assessment of the subject property's competitive advantages and disadvantages within its market area. Following the projection of the property’s performance, the property is then valued, as applicable, using the income approach, sales comparison approach and cost approach.

Income Approach:

The income approach requires financial projections that are made based on a detailed line-item analysis of all sources of revenue and expense. The conversion of income to value is accomplished by either direct or yield capitalization through the use of market-based debt and equity rates of return. These rates of return are gathered from Pinnacle’s internal database, industry publications and interviews with market investors, lenders and operators.

Sales Comparison Approach:

The sales comparison approach determines value by examining the sale price of similar properties that have transferred within the relevant past. Also reviewed are contracts for sale and listings of properties for sale. The examination begins in the subject property's market area then expands to include comparisons of similar properties in the state, region and country. Our proprietary database of national lodging property sales is supplemented regularly by information provided by brokers, operators, hotel companies, owners, and investors.

Cost Approach:

The cost approach establishes the replacement cost of the subject property at current costs. Included in these calculations are land valuations, the costs of replacing or reproducing property improvements, and the amount of lost value related to deterioration and obsolescence. Industry accepted cost services are used as references to determine hotel construction costs. These are supplemented by interviews with developers in the subject property's market area, as well as an examination of actual development costs for similar projects.

Representative Client List

• Cornerstone Real Estate Advisors, Inc.
• David L. Babson & Company, Inc.
• Fleet Financial
• GMAC Commercial Mortgage Corporation
• TIAA-CREF
• Times Square Real Estate Investors