Hauoli Makahiki Hou and Felis Ano Nuebo!

December 2014 Issue
UPCOMING MEETINGS & EVENTS

General Membership Meeting
Plaza Club
“Ho’opili”
January 13, 2015 / 8:30 am-10:30am
CLICK HERE TO REGISTER NOW
Or email: barbier@hawaiiantel.net
Photo courtesy of Gina Aguirre-Quek (John Child & Company)
Share your photos in upcoming newsletters – email barbier@hawaiiantel.net
Hauoli Makahiki Hou and Felis Ano Nuebo!
As 2014 draws to a close, the Hawaii Chapter would like to take
this final opportunity to thank all who have given time and energy
to help further the appraisal profession.
So many of you have served as past presidents, officers, board
members, and committee chairs; demo report graders; candidate
advisors; and mentors to aspiring appraisers. Others consistently
show their support by attending our general membership
meetings, courses, and socials, or by taking time to comment on a
particular speaker presentation, class, or issue affecting the
industry.
We also want to congratulate all who have earned designations
this year and thank you, too, for your commitment to excellence.
Your accomplishments are the rising tide that lifts all ships.
Finally, we want to wish everyone a very safe and Happy New
Year. You made this past year of service a very rewarding one for
all of us, and we hope 2015 will be equally good to you.
Sincerely,
Shelly, Stephen, and Andy
INSIDE THIS ISSUE
2014 Chapter Leadership........................ 2
LDAC........................................................ 2
Chapter Education .................................. 2
Chapter Website and Programs .............. 3
Holiday Installation Banquet................... 4
2015 Chapter Leaders ............................. 4
New Designees and Members ............... 5
Member Spotlight .................................. 6
Reviewer’s Roundtable .......................... 7
Past Chapter Presidents .......................... 9
National News....................................... 10
January 2015 GMM............................... 11
HAWAII CHAPTER NEWSLETTER | DECEMBER 2014
2014 CHAPTER OFFICERS &
DIRECTORS
PRESIDENT
Shelly H. Tanaka, MAI
st@johnchild.com
VICE PRESIDENT
Stephen E. Stadlbauer, MAI
ses@lcs-consulting.com
SECRETARY / TREASURER
Andrew Conboy
andy@hcbahawaii.com
EXECUTIVE DIRECTOR
Barbie Rosario
barbier@hawaiiantel.net
EX-OFFICIO
Fernando C. Benavente, MAI, SRA
2
Chapter News
2014 Leadership Development and Advisory Council
Chris Ponsar, MAI, SRA (The Hallstrom Group, Inc.)
The Leadership Development & Advisory Council (LDAC) strives to
foster creative thought from talented individuals involved in the
real estate appraisal profession while developing the future
leaders of the Appraisal Institute. LDAC also establishes an
“appraiser-presence” in Congress and demonstrates that the
Appraisal Institute is made up of professionals who recognize the
importance of being actively involved in the political process.
Chris Ponsar, MAI, SRA has served the Appraisal Institute and Hawaii Chapter in various
capacities, as chapter Director and chairperson for the Candidate Guidance and External
Relations committees, Candidate Advisor, and Demonstration Appraisal Report grader. Chris will
also serve as 2015 Secretary and Treasurer for the Hawaii Chapter. For these reasons, the
Hawaii Chapter selected Chris to represent us at the three-day LDAC conference held in
Washington D.C. this past May.
DIRECTORS
2014
Randolph K. Flores, MAI
Liza F. Hamada
2014-2015
Chris Ponsar, MAI, SRA
Brian Walther, SRA, AI-RRS
Chris
2014-2016
Paul D. Cool, MAI
Shane S. Nishimoto
COMMITTEE CHAIRS
Finance
Andrew Conboy
Nominations
Fernando Benavente, MAI, SRA
Government Relations
Ted Yamamura, SRA, R/W-AC
Public Relations
Liza Hamada
External Relations
Chris Ponsar, MAI, SRA
Education
Fernando Benavente, MAI, SRA
Candidate
Brian Walther, SRA, AI-RRS and
Shane Nishimoto
Member Services/Communications
Leslie Roach-Laing
By-Laws
Brian Goto, MAI
Chapter Education
Fernando C. Benavente, MAI, SRA (The Hallstrom Group, Inc.)
As of January 1, 2015, all individuals who become Supervisory
Appraisers and Trainee Appraisers will be required to take a
Supervisory/Trainee Course per the 2015 Real Property Appraiser
Qualification Criteria. This four-hour course will address the national
minimum requirements, responsibilities, and expectations for Trainee
Appraisers and Supervisory Appraisers that are included in the AQB’s
required course outline.
The course is not currently offered on line. The chapter is hoping to bring the course to Hawaii
in Spring 2015. Please contact our Education Chair at FCB@hallstromgroup.com and let him
know if you would be interested in this or other courses.
HAWAII CHAPTER NEWSLETTER | DECEMBER 2014
3
Member Services and Communications
Leslie Roach-Laing (Ailana Appraisals)
After many years, the chapter website was redesigned and unveiled in July!
Register for chapter events, download past speaker presentations, locate appraiser contact info, and find links
to helpful resources at www.ai-hawaii.org.
A special Thank You to Chair Leslie Roach-Laing and website designer, Casey Graves for this makeover!
Program Chairs
Liza Hamada (First Hawaiian Bank)
Lyon Des Pres (American Savings Bank)
Thanks to the team of L&L (Liza and Lyon), the chapter held six lunch meetings in 2014, providing a range of
interesting and timely topics including the status of rail transit and transit oriented development, industrial
market conditions, flood map changes, Hawaii’s skyrocketing construction costs, and Peter Savio’s “Weird,
Weirder, and Weirdest Deals.”
The Chapter also held a Maui island lunch meeting in December. A special mahalo to Shane Fukuda and
Dominic Suguitan of ACM Consultants, Inc. for their help in organizing the luncheon!
Thank you also, to our guest speakers – all of whom generously carved out time from their busy schedules to
tailor their presentations to our group and spend their lunch with us.
- Paul Brussow - Executive Vice President for Rider Levett Bucknall
- Brennon Morioka, PhD - Deputy Executive Director for HART
- Harrison Rue, Community Building and TOD Administrator for the City & County of Honolulu
- William Froelich, JD, SIOR, CCIM - Vice President and Industrial Division Manager for Colliers International
- Phillip Hasha, COO of The Redmont Group, LLC
- Peter B. Savio, President and Chief Executive Officer, Savio Group
- Carol Tyau-Beam, PE, CFM - State National Flood Insurance Program Coordinator
Maui lunch meeting at Cary’s Hideaway, December 8, 2014
Find speaker presentations on line at www.ai-hawaii.org.
HAWAII CHAPTER NEWSLETTER | DECEMBER 2014
4
HOLIDAY INSTALLATION BANQUET
Thank you to everyone who attended our installation banquet at the
Oahu Country Club on December 5, 2014.
Mahalo especially to Barbie Rosario, Lillian Izumi, SRPA, and Liza
Hamada for organizing the event!
2015 Officers and Directors and Installing Officer, Alan J. Conboy, MAI
WE SALUTE AND THANK YOU, JOE MAGZ!
In November, the Hawaii Chapter was fortunate to
host the 2011 Past President of the Appraisal Institute,
Joseph C. Magdziarz, MAI, SRA. Joe taught two weeks
of courses, including the Real Estate Finance,
Investment and Value seminar, Complex Litigation
Appraisal Case Studies seminar, General Review Theory
course, and Residential Review Theory course. Many
enjoyed pau hana drinks and laughs with Joe after class
at Hawaii Prince, Murphy’s, Chart House, and Hukilau.
Joe celebrated the Marine’s 239th anniversary this year.
We want to take this opportunity to remember and
thank all of our brave soldiers, and their families, for
their sacrifices.
HAWAII CHAPTER NEWSLETTER | DECEMBER 2014
5
Steve Hayamoto, MAI, AI-GRS (Kamehameha Schools)
Awarded AI-GRS Designation in October 2014
Stephen Stadlbauer, MAI (Lesher Chee Stadlbauer)
Awarded MAI Designation in December 2014
Aimee Yamamoto, SRA, AI-RRS (American Savings Bank)
Awarded AI-RRS Designation in December 2014
The Residential Review Specialist (AI-RRS) and General Review Specialist (AI-GRS) designations were established in 2013 in response to the
growing and critically important role that appraisal review plays in risk management and mitigation for many clients/users of appraisal services. The
new designation program is aimed at providing professional reviewers with the knowledge and skills needed to satisfy issues related to due
diligence and risk management often requested by their employers and clients.
The MAI membership designation is held by appraisers who are experienced in the valuation and evaluation of commercial, industrial, residential,
and other types of properties, and advise clients on real estate investment decisions.
The SRA membership designation is held by appraisers who are experienced in the analysis and valuation of residential real property.
As Designated members of the Appraisal Institute, these individuals have made a commitment to advanced education, higher ethical
requirements and elevated expectations for the appraisal profession as a whole. We wish to congratulate them on their recent
accomplishments and thank them for their part in furthering our profession.
For more information on the AI designations, visit http://www.appraisalinstitute.org/designatedcandidateaffiliate/designation-requirements/
Welcome New Members!
Jose Diogo - Diogo Appraisal Services, Inc. (Lihue, Kauai)
John Sarmiento – Bank of Guam (Hagatna, Guam)
Maria Jezzica de la Pena (Piti, Guam)
Jaelyn Meli Odani – The Hallstrom Group, Inc. (Honolulu, Oahu)
Jazmin Rodrigues - The Hallstrom Group, Inc. (Honolulu, Oahu)
Thomas Werner Holliday – The Hallstrom Group, Inc. (Honolulu, Oahu)
James S. Odani – The Hallstrom Group, Inc. (Honolulu, Oahu)
Sunni M. Talamantes – Hawaiian Isle Appraisal Services (Waianae, Oahu)
Dwight N. Tokuda – Central Pacific Bank (Honolulu, Oahu)
Jamie McCormick – Cushman & Wakefield Western, Inc. (Honolulu, Oahu)
HAWAII CHAPTER NEWSLETTER | DECEMBER 2014
Member Spotlight
Jose R. Diogo, President and Owner, Diogo Appraisal Services
I am a Certified Residential Appraiser in the State of Hawaii, own and operate Diogo Appraisal Services, Inc. on the
island of Kauai. My appraisal career began in 1988 working as a staff appraiser for the firm of Dennis T. Nakahara,
Real Estate Appraiser. My plans of becoming an architect changed while working as a waiter at a restaurant that
Dennis frequented. One day Dennis asked if I would consider becoming an appraiser. Not even knowing what a tax
map key number was, nonetheless an appraiser’s role, I was impressed by the feedback from coworkers and
friends. I can’t forget the words of one person: “They just go to a property and give you the value...and they make a
LOT of money”. That was music to my ears – what a better way of prepping for University of Hawaii than making
“lots” of money while attending the local community college simultaneously. Although architecture was my initial
endeavor including a 1 year attendance at the University of Hawaii (1991-1992), appraising real estate won me over.
This career is the “best of many worlds” – working indoors as well as outdoors, a mix of architecture, construction, statistics, art and a
great way to meet and network with people and see places most never would in their lifetime. I am very fortunate and thankful for the
11 year experience appraising numerous properties from oceanfront to Kuleanas throughout the entire island. With this experience and
knowledge of the island, its markets, neighborhoods and nuances, I decided to open my own appraisal firm in 2000 as a sole proprietor
and incorporated in 2007. I received my Associates degree in 1990, obtained my SLA license in 1993 and in 2008 upgraded to a CRA.
The financial collapse of 1998 brought about many changes to the industry – a vast amount of information and policies within a short
period of time that made it challenging for the appraisal industry. Staying informed, getting educated and networking is vital in providing
quality appraisal services. As such, I have been a part of the Appraisal Institute as a Practicing Affiliate since 2009 and prefer to attend AI
classroom courses rather than on-line courses despite the higher costs associated with travelling off-island. These courses have provided
me substantially more than just the ability to renew my license. Being part of an organization that works toward improving the industry
through lobbying in congress and providing vital information and education to their members has empowered me. I am privileged to
have taken several courses from highly educated and experienced AI instructors such as Dawn M. Molitor-Gennrich, SRA, as well as
Stephanie C. Coleman, MAI, SRA, AI-GRS, AI-RRS and remember both stressing the importance of networking amongst appraisers. Being
that I have only one employee and limited feedback within my company, I realized the benefits of peer support when encountered with a
challenging assignment. As such, I make it common practice to contact other appraisers for feedback such as my good friend Ron
Rehkemper from Rehkemper Brothers LLC.
The dialogue and discussion is tremendous assistance to both us and is what I believe networking is about – help and guidance from the
very people who encounter similar situations. Professionals such as Dawn, Stephanie and Ron have had a profound impact and influence
on my career and have motivated me to pursue two AI designations.
As a means of extending that same network and support, I initiated and coordinated periodic (quarterly) meetings inviting all Kauai
licensed appraisers to provide an avenue of discussion on topics affecting appraisers. Prior meetings have had guest speakers from the
county’s Planning Department (zoning enforcement), Water Department (public water storage facilities, capacities) and a local private
company that provides water and wastewater services in Hawaii. These meetings have been received positively by the local appraisers
with the majority attending. Besides the knowledge and information gained, these informal meetings have created a comradery and
friendship amongst the local appraisers despite being competitors. I also hope that these meetings will inspire Kauai appraisers to join
the Appraisal Institute (Hawaii Chapter), other Hawaii and national AI members/affiliates in becoming a collaborated voice for the
appraisal industry as well as pursuing designations. I encourage the local appraisers to contact each other including me when
encountering challenging assignments as I have realized the benefits of such interaction.
I enjoy giving back to the very community that has provided me with a livelihood and place to call home. I currently serve on three state
and county boards (chair two) and volunteer at a local soup kitchen. I’ve coached youth soccer and basketball. The many interests I have
include the outdoors, arts, fast cars and travelling. I like stand-up paddle boarding, basketball, hiking and the beach. My love of the arts
includes ceramics (pottery), painting, drawing and photography. The adrenaline rush within me has led me to own a classic muscle car
and help pit for a close friend at the local drag strip. I have lived in Mozambique and South Africa and have visited Brazil, France and
Portugal among a few of the many amazing places on earth. A proud father of one son, I am blessed to have a wonderful circle of family,
relatives and friends. I am grateful to all those that have provided me with the many opportunities and support throughout my life and
career.
6
HAWAII CHAPTER NEWSLETTER | DECEMBER 2014
7
REVIEWER’S ROUNDTABLE
Lyon Charles Des Pres
Commercial Appraiser, Commercial Credit Policy & Administration
American Savings Bank
“I am appraising an industrial building; am I using the right square footage?”
Like most of you reading this article upon being engaged to appraise an industrial building I immediately
think; “this is going to be a slam dunk…” Appraising industrial buildings under current market conditions
can be much easier than many other property types: there is ample marketing reports available for the
market analysis; multiple recent sales; numerous recent leases; multiple brokers willing to share data and
opinions; and the most typical unit of comparison is price per gross building area.
The subject’s gross building area can be easily obtained from: City and County Real Property Assessment website and Hawaii
Information Services (HIS). Sometimes the appraisal assignment is a pending sale and marketing brochures and purchase and sale
agreements are available as well which can provide a description of improvements.
You need to be asking yourself – “Does the data from all sources accurately reflect what exists at the subject property?”
The following is an actual trail of events from an appraisal assignment:
•
First, the engagement letter indicated that, “Per PSA, property consists of 8,884 SF ground floor warehouse and 1,284 SF
mezzanine for a total of 10,068 SF of GBA…”
•
Second, the subject property was openly marketed through typical channels and the professional marketing flyer by a local
reputable firm indicated the following: “Building Size: 10,068 SF…”
•
Third, the information from Hawaii Information Services (HIS) indicated the building square footage as 10,068 SF. Further, on
the HIS and the City and County of Honolulu Assessor’s data described the subject as follows:
Incorrectly sums building areas shown below. Area
of office is counted twice
Area of shell; includes 1,284 SF of ground floor
office space. Balance is warehouse.
HAWAII CHAPTER NEWSLETTER | DECEMBER 2014
8
The information indicates an aggregate is 10,068 SF similar to the PSA, marketing flyer and letter of engagement. Therefore, it appears
based upon the data presented, from multiple sources, the subject GBA is 10,068 SF.
However, after inspection of the building the actual building components are as follows:
-Warehouse
-Office
-Mezzanine
Total GBA
6,216 SF
1,284 SF
1,284 SF
8,784 SF
So what happened? Why is there such a discrepancy? The misunderstanding of the subject square footage begins with the assessor’s
office. The assessor’s description of the subject improvements is not incorrect; you just need to understand the assessor’s methodology
for estimating the costs of the improvements.
Many of you utilize Marshall Valuation Service to estimate costs when completing the Cost Approach. Marshall Valuation allows you
two methods of estimating costs for industrial buildings: 1) They provide a cost estimate for warehouse which includes office space that
is 3% to 12% of total area as part of the base price; or 2) The publication provides an alternate method wherein you analyze the shell of
the building and enclosed office space separately. The latter is the same methodology utilized by the assessor’s office. They calculate
the shell cost of the building then apply a separate cost for the enclosed office space area. Utilizing the alternate method requires
analyzing the warehouse portion based upon the foot print of the building which is why the assessor reports the warehouse as 7,500 SF
rather than the actual warehouse area of 6,216 SF.
The moral of the story is to confirm your own measurements and not rely on third party data. At a minimum, take a wheel or measuring
tape with you to the inspection. Measuring GBA is the easiest measurement to perform. Happy appraising.
2015 RESOLUTION:
STAY ON TOP OF YOUR GAME
Top-notch Appraisal Institute courses and seminars come straight to your desktop with online education.
Learn from any computer anywhere, whenever you have time. It’s easy, convenient and a great way to get the education you want.
Check out the current course listing now!
HAWAII CHAPTER NEWSLETTER | DECEMBER 2014
9
MORE WORDS OF APPRECIATION…
The 2014 Officers and Directors would like to thank the past Chapter Presidents for their leadership and service.
AND WORDS OF WISDOM…
from the gurus at Stellmacher & Sadoyama 
HAWAII CHAPTER NEWSLETTER | DECEMBER 2014
National News (www.appraisalinstitute.org)
Hotel Winds ‘Going Concern’ Tax Assessment Case
st
10
Virginia Tech Releases Results of Study on Appraisal Fees
The California Court of Appeal for the 1 Appellate District issued
its decision May 22 in the tax assessment appeal case of SHC Half
Moon Bay vs. County of San Mateo, reversing the decision of a
lower court and directing the trial court to enter judgment in favor
of the property owner and against the County.
The Virginia Center for Housing Research and the Virginia Tech
Program in Real Estate released on Oct. 7, its 2013 Virginia
Residential Real Estate Remuneration: Survey and Report, which
analyzed the patterns for fees earned by real estate appraisers in
2013.
This appeal arises from a dispute over the property tax assessment
of the Ritz Carlton Half Moon Bay hotel and presents “the
question of how to properly value taxable property, with
associated intangible assets, at fair market value.”
The research was conducted by Virginia Tech researchers and
students during this spring and summer in response to the DoddFrank Act, which requires lenders to pay appraisers a “customary
and reasonable fee” for residential real estate appraisal services
in their geographic market. The Dodd-Frank Act also requires that
customary and reasonable fees be calculated without the
influence of assignments ordered by known appraisal
management companies.
Appellant SHC Half Moon Bay LLC, the hotel’s owner, claims the
assessment conducted by the San Mateo County Assessor and
approved by the San Mateo County Assessment Appeals Board
erroneously inflated the value of the hotel by including $16.8
million in nontaxable intangible assets. SHC’s principal contention
was that the variation of the income approach the assessor used
to assess the hotel violated California law by failing to identify and
remove the value of intangible assets. Respondent County of San
Mateo had urged this court to uphold the assessment.
The final report noted the average AMC fee and non-AMC fee for
a single-family residential appraisals in Virginia, average annual
salaries and some appraiser demographics (such as age).
See the complete survey results.
In reversing the lower court’s decision, the Court of Appeals
stated, “the method used by the Assessor and approved by the
Board to calculate the value of the property violated the standards
prescribed by law because it failed to identify, value and remove
the value of the following intangible assets and rights from the
hotel’s income stream prior to taxation: 1) the hotel’s workforce;
2) the hotel’s leasehold interest in the employee parking lot; and
3) the hotel’s agreement with the golf course operator.”
AI Addresses US Green Building Council on ‘Green’ Valuations
The decision also stated, “Intangible assets like the goodwill of a
business, customer base and favorable franchise terms or
operating contracts all make a direct contribution to the going
concern value of the business as reflected in an income stream
analysis and have a quantifiable fair market value that must be
deducted from an income stream analysis prior to taxation.”
Coyle's presentation provided an overview of AI's professional
development program on the Valuation of Sustainable Buildings,
including case studies found in the four courses that make up the
professional development program.
Read the Court of Appeals decision.
GET INVOLVED
Nominations for the 2016 Board of Directors vacancies will be
requested shortly. If interested, please email Shelly Tanaka at
st@johnchild.com. All interested in serving are encouraged to
apply.
Please also visit the AI’s Leadership Resource Registry and
indicate your areas of interest and expertise in the Appraisal
Institute Leadership Resource Registry and volunteer to serve on
a committee, project team, advisory board or panel—on the
National, Regional or Chapter level. The National, Regional and
Chapter registries are now accepting submissions.
Volunteer Today*
*log in required
Appraisal Institute President-Elect M. Lance Coyle, MAI, SRA,
addressed the U.S. Green Building Council in Washington on Sept
17, where he talked to the organization about valuation methods
and techniques used by appraisers to value high-performance
buildings and about AI’s leadership role in green and energyefficient valuation.
View Coyle's presentation to the USGBC.
HAWAII CHAPTER NEWSLETTER | DECEMBER 2014
11