In this case, the appraiser compared the price of the most similar publicly traded stock, a REIT, with their actual appraised net real estate value. This is based on the premise that public markets reflect the minority discount portion of the fractional interest. The discount which was experienced by the REIT is then adjusted to compare with the facts of the case. Without such an agreement, all of the owners must come to a consensus on operational matters. In the absence of such a consensus, any one owner may assert legal right which would result in discount and possibly litigation.
Brokers are typically reluctant to list partial interests of properties.
Typically, brokers will require that all owners of partial interests agree on the sale and the potential price. Thus, the listing is actually for all of the partial interests simultaneously and no discount would result. A holder of a fractional interest has the right to become whole in ownership. Two methods of partition are generally available. The second method creates a circumstance of forced sale at auction whereby the cash proceeds are divided pro-rata.