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Mark to Market Evidence of Value

There is an effort afoot to change the way corporations in the United States book the value of their property. Typically properties are booked at a value picked at the time of acquisition. In other countries around the world, companies are compelled to book their property value based upon the current market value. Apparently we in the United States will soon be following in their footsteps.
According to an article published in the Appraisal Institute’s “Appraisal News On-line” publication March 16, 2006, (see below) it looks like this could be a boon to the corporations. Of course savvy investors have long known that there is a significant amount of wealth buried in corporations. Recent investors in McDonald’s have been asking the corporation to sell off some of its underlying assets.
The Gorman Group is prepared to perform appraisals on corporate portfolios. We have experience on a national basis of doing just that. Although there is not a great demand for this service, it is one we offer.

Real Estate Appraisal of Supermarket's Land Causes Stock to Soar

After an appraisal of its real estate holdings revealed an increase of $100 million to $150 million more than the book value reflected in its financial statements, the stock of Marsh Supermarkets in Indianapolis shot up in early March, according to Supermarket News.
Marsh owns the real estate and buildings for 34 supermarkets and 44 convenience stores, as well as a distribution center, company headquarters and other properties, and is currently searching for a buyer for the company as part of a strategic review. The real estate appraisals were performed in connection with the ongoing review, as well as for recent loans secured by various properties, the company said. The book value, determined by subtracting liabilities and depreciation from assets on the balance sheet, and reported most recently in Marsh’s annual report last June, was $15.72 per share: Marsh Class A shares were trading as low as $6.25 in recent weeks.

Doug Dougherty, executive vice president and chief financial officer for Marsh, speculated that the real estate news might have been a factor in Marsh stock skyrocketing last week, with Class A shares gaining more than 23 percent to close at $8.89 and Class B shares climbing nearly 34 percent to $7.90, in a single day. The lightly traded stocks did 10 times their average daily volume. “The asset value of the company may be higher than some people may have believed, or they hadn’t focused on it,” Dougherty said.

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