15 OCT 2018
What is the value of Disney World? This is a question thought leaders set out to answer at the RICS Summit Series in Miami in March 2018. Though much of the details and evidence was elusive to the panel, its conclusions were found to be sound, according to the courts.
As part of its Summit Series in the Americas, RICS included a very popular luncheon panel that attempts to pin a value on one of the host cities’ icons. Barden Prisant, President of Telepraisal in New York City and an expert on valuation of art appraisal, hosts the panel, which includes an expert who can provide an insider’s look at the asset valued during the presentation.
At the RICS Summit Series in Miami, Amanda Levine, an associate with expertise on tax law from the law firm Moffa, Sutton and Donnini, joined Barden Prisant to present on the value of an icon in the Miami region. The question presented was: You’re buying Disney World! Are you getting a beauty, or a beast?
The speakers ran through some of the issues surrounding the valuation of the real property underlying the Magic Kingdom. The major issue with determining the value of Disney World is lack of evidence. Disney is notoriously secretive about providing income numbers so the RICS panel had to proceed without data. It is general practice for Disney to keep records confidential and anything provided to the court is not available to the public record.
Enjoy our highlights from the 2018 Summit Series, or hear from John Busi FRICS, President, Valuation & Advisory at Newmark Knight Frank and Peter Smith FRICS, RICS Americas Board Chair on why these events are not to be missed.
Just a few short months later, a judge in Orlando has issued an opinion showing our RICS Panel had hit the issues spot-on. It identified the same two key points raised by the speakers who stated: the most appropriate way to value a Disney property is by using the income method because Disney properties are too unique to be traded on the open market and it is impossible to value Disney’s land without separating the Disney name, and corresponding IP, from the equation.
In its statement, the court found “the Property Appraiser here … had a duty to deduct the value of nontaxable items, specifically tangible and intangible assets, ‘to ensure’ that the income used is ‘solely attributable to’ Disney’s real property.”
The court furthered the analysis by identifying that “ancillary income” from restaurants and stores is not assignable to real estate, but rather, an intangible right of another business. This case mirrored the issues raised by the panel during the RICS summit.
The value of the Disney property is difficult to speculate. This is, in part, because Disney would never make detailed income figures public. While our panel was working off assumptions rather than verified data and the court was privy to only expert testimony rather than Disney’s financial records. Based on the evidence it had, the court’s analysis cut the property appraiser’s assessment in half to be in line with the value assigned to it by the Prisant and Levine.
RICS Americas resumes its Summit Series in 2019 with events in Los Angeles, Miami and Vancouver. Prisant will once again be the keynote speaker and follow the tradition of assigning values to iconic landmarks (which are yet to be revealed).