Common Definitions Used in Appraising Bowling Centers
Value-in-use - Asset market value generated for a specific operation.
Real Estate - Tangible land and improvements of an attached permanent or quasi-permanent nature
Furnishings, Fixtures, and Equipment - In place furnishings, fixtures, and equipment (FF&E) needed for stabilized operation. FF&E is real estate or personal property depending on its level of attachment/permanence.
Personal Property: (Moveable Furnishings, Fixtures, and Equipment) - Tangible moveable furnishings, fixtures, and equipment (FF&E) for stabilized operation.
Realty Stabilized Operation (Going-concern attributable to realty) - Occupancy, census, staffing/management, and marketing assets expected for the tangible assets in use, i.e.: going-concern, called “business” or “business enterprise” by some.
Going Concern - Going concern is the value allocated to realty stabilized operation or prorated operation achieved as of valuation date plus or minus goodwill/ill will.
Business Value - Value of net income to ownership/management earned by off-site management. Business value as called by some is actually the on-site property going-concern.
Goodwill - Value increase created from higher net income than expected for the tangible assets in use due to an existing superior operation or good reputation. It is extra going-concern value.
Ill-will - Value decrease created from lower net income (or loss) than expected for the tangible assets in use due to an existing sub standard operation or poor reputation. Its value loss can negatively influence all “property” component assets.
Proprietary Income - Entrepreneurial income
Competent Management - Owner, operator, proprietor and/or management that utilizes tangible assets according to their highest and best use in a manner that generates net income in the expected range for those assets.
Designed Market Niche - The operator, operation, care, service package, amenities and/or income niche the “property” is designed for.
Alternate Market Niche - An alternate operator, operation, care, service package, amenities and/or income niche from designed niche.
Economic Life - Beginning when an improvement is built, economic life is the period of time over which improvements contribute to property value.
Useful Life - The time period over which components of an improvement may be reasonably expected to perform the function(s) for which they were designed.
