A real estate expert witness advises on a case involving bankruptcy protection. Plaintiff is the trustee of the bankruptcy of the owner-debtor of a two-story residential building and the land it occupies and its real estate management company.
A creditor has asserted a first mortgage interest against the property securing an indebtedness purportedly owed to it by the debtors totaling more than $40 million, plus accruing fees, expenses and interest. The creditor commenced a foreclosure proceeding.
Both debtors sought Chapter 11 bankruptcy protection. The bankruptcy trustee is restructuring debts and liquidating assets.
Question(s) For Expert Witness
- 1. What is the condition of the real estate market in the area of the subject property?
- 2. What is the value of the units if offered as condominiums?
Expert Witness Response
The real estate market in this area continues to be strong despite recent downturns in the economy. Over the last year, any aged inventory has been purchased at prices supporting a stable in improving market. It is our opinion that this trend will continue as there is a strong demand for homes in this very popular area.
The luxury rentals at issue in this case are units that offer all of the features that buyers are looking for. From the new kitchens outfitted with granite counters, stainless steel appliances, Italian ceramic and hardwood floors, Anderson Windows and solid wood new doors and moldings, these units will command a relatively higher sales price due to their total renovated look.
The location is right across the street from a park that affords a great expanse of ball fields, bicycle and pedestrian tracks, basketball courts, playground, tennis courts, paddleball courts, bocce ball courts and most importantly a new state of the art senior center.
After careful consideration of the units to be offered as condominiums, it is our opinion that the one bedroom/one bath units would be valued at $399,000 and two bedroom/one bath units would be valued at $499,000.
The expert has been a real estate broker for more than 20 years and has managed similar projects. The expert’s firm has been selling cooperative and condominium units since its inception.