Bridging the gap: Marketability discounts for real estate interests

This paper is about business valuation for real estate appraisers and about real estate interest valuation for business appraisers. It describes a practical approach for valuing marketability discounts for corporate, partnership, and common ownership of real estate. A simplified income model is described, with a detailed example for common tenancy. Sales comparison is reviewed, with some sobering thoughts on its usefulness. This paper provides an introduction for appraisers contemplating the addition of this niche to their practice, addresses real estate-related issues for experienced valuers, and offers help in bridging a gap that is not often crossed.