Expert Opinion - Real Estate valuation

A publicly traded real estate investment trust (REIT) and a private equity firm were co-defendants in a lawsuit brought by a class of shareholders in the REIT. At issue was the sale of an iconic 1.8 million-square-foot office tower in downtown Chicago from the REIT to the private equity firm – which planned a significant repositioning and capital investment in the property of more than $150 million. The plaintiff class alleged that the REIT sold the property for millions of dollars less than the property was actually worth, thereby depriving the class from receiving its fair share of the property value.

Attorneys for the defendants hired Stout to prepare an expert valuation of the office tower and provide expert testimony in the case. Our valuation focused on a thorough analysis of the cash flows associated with the property as well as the downtown Chicago office market at the time of the transaction. In addition to our affirmative opinion of value, Stout was asked to provide a rebuttal (expert report and testimony) to the opposing expert’s valuation report. Stout’s rebuttal showed there were fatal flaws in the opposing expert’s valuation, which overstated the property value by well over $150 million.

Both Stout’s expert and the opposing expert testified at deposition in the case, after which the parties agreed to a settlement that aligned with Stout’s opinion of value, which was very favorable to our clients.