Opinion ID: 882068
Heading Depth: 1
Heading Rank: 2

Heading: Hall's 1990 Appraisal

Text: Steven Hall, MAI real estate appraiser from Missoula hired by Galleria Partnership, testified that the intrinsic value of the Galleria property as of December 1987 was $1,595,000. Hall said that his appraisal was not a valuation, requiring an analysis of the property's market value, but an evaluation, defining the market under special guidelines. The special guidelines used by Hall to find the intrinsic value involved a consideration of the replacement cost new of a property and then allowing for the property's depreciation in the form of physical deterioration, its functional obsolescence, if any, its anticipated serviceable life and the general usefulness of the item involved. The Trustees again called Ferro as a witness to critique Hall's appraisal. Ferro questioned Hall's attributing all of the above-average short-term depreciation of the Galleria property to the foreclosure situation without taking into account poor maintenance and the deteriorating Great Falls economy. Ferro said that Hall's definition of intrinsic value was very narrow and could not be related to fair market value in any way. Ferro testified that intrinsic value, as defined by the American Institute of Real Estate Appraisers, is the amount of money equivalent to the worth inherent in the thing itself; for example, the intrinsic value of a bronze medal is the worth of the tangible assets separated from the intangible assets. According to the MAI manual, intrinsic value is [s]trictly a misuse of the word value, since value depends upon extrinsic things; that is, the attitude of persons toward the thing valuable.