Trophy property

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A trophy property is a recognized category of real estate in the U.S. and elsewhere. It is generally defined as the top 2% of properties within a given subcategory, although the term is typically used in reference to trophy residences, architecturally or historically preserved properties, high-amenity natural land, and properties with spectacular views or other extraordinary amenities. The term may also be uses in conjunction with capstone properties, such as trophy office buildings or other very special and unique income-producing properties.

1 History
2 Controversies
3 References
4 External links

[edit] History

While real estate appraisers in the U.S. have long recognized trophy properties as having unique valuation characteristics, only recently have the appraisal organizations begun to codify appropriate methods and techniques. Dr. Bill Mundy, one of the appraisal community's leading experts on the topic, authored a series of articles for the Appraisal Journal in 1991^[1], 2002^[2] and 2003^[3]. These articles set forth the definitional groundwork and the appropriate methods for trophy property valuation in the U.S., consistent with best practices and USPAP.

[edit] Controversies

Valuation of trophy property for Federally-financed land acquisitions is unique among appraisal assignments in that the supplimental standards proffered by many (but not all) Federal agencies require that comparable transactions used for valuation be limited to those with an economic use and not those which were acquired solely for preservation purposes^[4]. This led to a debate within the appraisal community over the concept of economic use and the appropriateness of using these supplimental standards for other types of valuation. Kinnard and Mundy (1999) addressed this problem with their widely-cited Appraisal Journal article on the subject^[5]. Currently, only acquisitions by a certain Federal agencies must adhere to this supplimental appraisal standard.