Oval Track - Appraisal Institute

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Motorsports Facility
Valuation Issues
Fitzhugh L. Stout, MAI
Senior Managing Director
Integra Realty Resources - Charlotte
Douglas L. Nickel, MAI
Senior Managing Director
Integra Realty Resources – Wilmington, DE
A Brief History
• November 2, 1895 – First American Automobile Race
–
–
–
–
–
Exhibition race between Chicago & Waukegan and back
92 miles
$500 prize (roughly $14,000 today)
Winner completed the race in 8 hours and 44 minutes
Average speed: 10.5 miles per hour!
• First Indianapolis Race
– May 29, 1910
– 200 miles
– Average speed 72 miles per hour
• 2013 Indy 500
– Average speed 167.734 miles per hour
– Winner purse $2,353,355
Types of Motorsports Facilities
• Oval Track
• Drag Strips
• Road Courses
How Did All This Get Started?
Oval Track
• Typically ½ mile to 2 mile oval or
“oval” shaped
• Dirt (smaller facilities) or
Asphalt/Concrete paving
• Stadium style setting
• Counterclockwise (Left hand turns
only)
• Some include infield road courses
(Daytona, Indy)
• Multi-vehicle competition
• Larger facilities
– Located in mass media markets
– Sanctioned events (NASCAR,
IRL/CART)
– Typically televised events
Drag Strips
• ½ mile to 1 mile
• Two competing lanes
• Grandstands flanking
both sides of the starting
lanes
• Head to head competition
• Located in mass media
and smaller markets
• Upper tier events
sponsored by NHRA
Road Courses
• 1 to 4 miles in length
• High and low speed left and
right turns
• Test amateur and professional
racer’s skills
• Clockwise direction (consistent
with European standards)
• Outskirts of major market
areas or remote market areas
• Few sanctioned events, mostly
club-style events (SCCA, NASA,
AMA, enthusiast/brand
organizations)
• Limited grandstands and
spectator areas
NASCAR & It’s Impact
•
•
•
•
•
•
•
•
•
Background
History of NASCAR
(National Association for Stock Car Auto Racing)
What makes NASCAR Unique
NASCAR Track Types
NASCAR Racing Series
Components of Value
Evidence of Race Date Value
Evidence of Superadequacy
Valuation Process
History of NASCAR
•
•
•
•
1920-1933 Prohibition/Bootlegging
1947-1950 NASCAR Founded
1954-1959 First New Speedway
1960-1970 Richard Petty Wins First Winston
Cup Championship
• 1980-1989 Fortune 500 Sponsorship Begins
• 1990-2000 NASCAR Reaches New Fans
• 2000-2010 The New Millennium
What Makes NASCAR Unique
• NASCAR is privately held
• NASCAR sanctions races on an annual basis
NASCAR Track Types
NASCAR Track Types
Short Length
Short Track
Intermediate Length Intermediate Track
Super Speedway
A racetrack that is greater than 2 miles in
length.
Road Course
A racing circuit comprised of left- and righthand turns, as opposed to an oval which is
comprised exclusively of left-hand turns.
Source: http://www.nascar.com/races/tracks/
Bristol Motor Speedway
Atlanta Motor Speedway
Daytona Motor Speedway
Watkins Glen
Bristol Motor Speedway
Atlanta Motor Speedway
Daytona International Motor
Speedway
Indianapolis Speedway
Watkins Glen International
Competitive NASCAR Tracks
Sprint Cup Tracks
Shape
Track Name
Atlanta
Atlanta Motor Speedway
Bristol
Bristol Motor Speedway
Charlotte
Lowe's Motor Speedway
Chicagoland
Chicagoland Speedway
Darlington
Darlington Raceway
Daytona Beach
Daytona Int'l Speedway
Dover
Dover Int'l Speedway
Fontana
Auto Club Speedway
Homestead
Homestead-Miami Speedway
Indianapolis
Indianapolis Motor Speedway
Kansas City
Kansas Speedway
Kentucky
Kentucky Speedway
Las Vegas
Las Vegas Motor Speedway
Mansfield
Mansfield Motorsports Speedway
Length
(Miles)
1.54
Shape
Quad-Oval
Seats
Type
124,000 INT
0.533
Oval
160,000 SH
1.5
Quad-Oval
165,000 INT
1.5
D-shaped Oval 75,000
INT
1.366
Oval
63,000
INT
2.5
Tri-Oval
168,000 SS
1
Oval
140,000 SH
2
D-shaped Oval 92,000
SS
1.5
Oval
65,000
INT
2.5
Oval
250,000 SS
1.5
D-shaped Oval 81,687
INT
1.5
D-shaped Oval 66,089
INT
1.5
D-shaped Oval 137,000 INT
0.5
Oval
25,000
SH
Competitive NASCAR Tracks
Martinsville
Martinsville Speedway
Michigan
Michigan Int'l Speedway
Montreal
Circuit Gilles Villeneuve
New Hampshire
New Hampshire Motor Speedway
Phoenix
Phoenix Int'l Raceway
Pocono
Pocono Raceway
Richmond
Richmond Int'l Raceway
Sonoma
Infineon Raceway
Talladega
Talladega Superspeedway
Texas
Texas Motor Speedway
Watkins Glen
Watkins Glen International
0.526
Oval
2
D-shaped Oval 137,243 SS
2.71
Road Course
1.058
Oval
91,000
INT
1
Tri-Oval
76,800
SH
2.5
Tri-Oval
76,812
SS
0.75
D-shaped Oval 112,029 SH
1.99
Road Course
2.66
Tri-Oval
143,231 SS
1.5
Quad-Oval
159,585 INT
2.45
Road Course
65,000
RC
RC
Note: Seating capacity in this table results from the source and is not accurate with regards to the subject property.
Source: http://www.nascar.com/races/tracks/
SH
RC
Competitive Local Tracks
State Race Tracks
Name
441 Speedway
Albany Motor Speedway
Atlanta Dragway
Atlanta Motor Speedway
Bill Thomas Raceway
Boyd's Speedway
Brainerd Optimist Drag strip
Cochran Motor Speedway
Coweta Raceway
Dawgwood Speedway
Dixie Speedway
Douglas Motorsports Dragway
Echeconnee Motocross Park
Georgia Karting Komplex
Gordon Park Speedway
Gresham Motorsports Park
Hartwell Speedway
Headhunter Motor Club Dragway
Hinesville Raceway Park
Lagrange-Troup County Dragway
Lanier National Speedway
Laurens County Speedway
Lavonia Speedway
Macon National Dragway
Metro Atlanta QMA Speedway
Middle Georgia Kart Track
Needmore Speedway
Location
Dublin, GA
Albany, GA
Commerce, GA
Hampton, GA
Cumming, GA
Ringgold, GA
Ringgold, GA
Cochran, GA
Newnan, GA
Chatsworth, GA
Woodstock. GA
Nicholls, GA
Lizella, GA
Carnesville, GA
Grovetown, GA
Jefferson, GA
Hartwell, GA
Eatonton, GA
Hinesville, GA
LaGrange, GA
Braselton, GA
Dexter, GA
Lavonia, GA
Danville, GA
Powder Springs, GA
Dublin, GA
Norman Park, GA
Type
3/8 mile dirt track
1/4 mile asphalt oval
1/4 mile asphalt drag strip
1.5 mile superspeedway, 1/4 mile thundering
1/20 mile concrete oval
1/3 mile clay oval
1/8 mile asphalt drag strip
1/2 mile dirt track
1/4 mile dirt track
1/5 mile Clay Oval
3/8 mile clay oval
1/4 mile asphalt drag strip
Dirt motocross track on 160 acres
1/4 mile clay oval
4/10 mile clay oval
1/2 mile asphalt oval
3/8 mile clay oval
1/8 mile asphalt drag strip
1/8 mile asphalt drag strip
1/8 mile concrete drag strip
3/8 mile asphalt oval
1/5 mile dirt track
3/8 mil clay oval
1/8 mile concrete drag strip
1/20 mile asphalt oval
6/10 mile kart track and motocross track
3/8 mile dirt oval
Competitive Local Tracks
New Senoia Raceway
North Georgia Speedway
Oglethorpe Speedway Park
Paradise drag strip
Pineora Kartway
Road Atlanta
Roebling Road Raceway
Rome Speedway
Savannah Dragway
Screven Motor Speedway
Silver Dollar Raceway
South Georgia Motorsports Park
Southern Dragway
Southern Outlaw Speedway
Sugar Creek Raceway
Swainsboro Raceway
Toccoa Speedway
US 19 Dragway
Valdosta Motor Speedway
Watermelon Capital Speedway
Waycross Motor Speedway
West Georgia Motor Speedway
Winder-Barrow Speedway
Senoia, GA
Chatsworth, GA
Pooler, GA
Calhoun, GA
Pineora, GA
Braselton, GA
Bloomingdale, GA
Rome, GA
Sylvania, GA
Sylvania, GA
Reynolds, GA
Cecil GA
Nicholls, GA
Bryon, GA
Blue Ridge, GA
Swainsboro, GA
Toccoa, GA
Albany, GA
Valdosta, GA
Cordele, GA
Waycross, GA
Whitesboro, GA
Winder, GA
Note: Subject in bold
Source: http://www.racingin.com/track/georgia.aspx
3/8 mile dirt oval
1/3 mile clay oval
5/8 mile clay oval
1/8 mile asphalt drag strip
1/4 mile dirt kart track
2.54 mile asphalt road course
2.02 asphalt road course
1/2 mile clay oval
1/8 mile concrete drag strip
3/8 mile clay oval
1/4 mile asphalt drag strip
1/4 mile asphalt drag strip and 1/2 mile D-shaped asphalt oval
1/8 mile asphalt drag strip
Dirt kart, mower, cooler & ATV race track
3/8 mile clay oval
1/2 mile dirt oval
5/16 mile clay oval
1/8 mile asphalt drag strip
3/8 mile clay oval
3/8 mile asphalt oval
1/2 mile clay oval
3/8 mile clay oval
1/4 mile dirt oval
NASCAR Track Issues
DEFUNCT NASCAR TRACKS
Decline in Industry Income
Industry Decline in Income (in thousands)
Years Ending December 31
SMI Historic Income
2012
N/A
Annual Decline
2011
$320,451
2010
$323,521
2009
$376,719
2008
$442,834
2007
$419,116
-0.9%
-14.1%
-14.9%
5.7%
N/A
N/A
Total Change (2007 to 2011)
-23.5%
ISC Historic Income
$387,932
$398,903
$415,708
$474,327
$570,584
Annual Decline
-2.8%
-4.0%
-12.4%
-16.9%
N/A
Total Change (2008 to 2012)
-32.0%
DMI Historic Income
$24,092
$27,972
$36,358
$56,747
$58,780
Annual Decline
-13.9%
-23.1%
-35.9%
-3.5%
N/A
Total Change (2008 to 2012)
-59.0%
Combined Historic Income
N/A
$747,326
$775,587
$907,793
$1,072,198
N/A
-3.6%
-14.6%
-15.3%
N/A
Annual Decline
Total Change (2008 to 2011)
N/A
-30.3%
Note: Preceding does not include broadcast revenue which has been added in below
Combined Income including Broadcast
Revenue
N/A
Annual Decline
Total Change (2008 to 2011)
-19.9%
$1,187,400
$1,202,444
$1,306,954
$1,482,526
-1.3%
-8.0%
-11.8%
N/A
Historic Attendance
Historic Attendance
NASCAR
NASCAR Race Attendance
Annual Change
Change from 2004 to 2010
Change from 2004 to 2012
2012
2011
2010
2009
2008
2007
2006
2005
2004
122,255
-9.78%
135,504
-41.30%
230,822
-2.93%
-35.43%
237,781
1.13%
235,114
-17.65%
285,503
-12.33%
325,655
-8.19%
354,711
-0.77%
357,458
N/A
-65.80%
Source: Atlanta Motor Speedway
Note: One of two Sprint Cup race dates moved in 2011
EVIDENCE OF RACE DATE VALUE
EVIDENCE OF SUPER ADEQUACY
Cost Approach
• Physical Obsolescence
• Functional Obsolescence
• External Obsolescence
Sales Comparison Approach
Summary of Comparable Improved Sales
Sale
Date;
Name/Address
Status
North Carolina Motor Speedway Oct-07
Acres;
Oval Track Length
244.24
Prop Rights
–
Closed
–
–
1.017
Fee Simple
Oct-05
Closed
1147.69
–
1.0
Jul-04
Closed
250.00
–
4
US Highway 1 North and North
NC Hwy 177
Rockingham
Richmond County
NC
Pikes Peak Int. Raceway
16650 Midway Ranch Rd.
Fountain
El Paso County
CO
Martinsville Speedway
340 Speedway Rd.
Ridgeway
Henry County
VA
USA International Speedway
May-07
5
3401 Old Polk City Rd.
Lakeland
Polk County
FL
New Hampshire Int'l Speedway
No.
1
2
3
6
7
8
Effective Real Estate
Sale Price
# of Seats
$4,400,000
60,113
$/Seat
$73.20
–
–
Fee Simple
$10,330,000
43,400
$238.02
–
–
Fee Simple
$4,300,000
65,000
$66.15
104.55
–
$6,200,000
11,000
$563.64
Closed
–
0.75
–
Fee Simple
Jan-08
1174.84
–
$38,700,000
95,561
$404.98
N.H. Route 106
Loudon
Merrimack County
NH
Moroso Motorsports Park
17047 Bee Line Hwy.
Jupiter
Palm Beach County
FL
Memphis Motorsports Park
Closed
–
1.058
–
Fee Simple
Apr-08
Closed
187.00
–
2.25
–
–
Fee Simple
$7,500,000
11,000
$681.82
Jan-11
342.00
–
$2,062,500
25,000
$82.50
5500 Victory Ln.
Millington
Shelby County
TN
Kentucky Speedway
1 Speedway Dr.
Sparta
Gallatin County
KY
Closed
–
0.75
–
Fee Simple
May-08
Closed
848.00
–
1.5
–
–
Fee Simple
$62,550,000
68,089
$918.65
0.526
Income Capitalization Approach
Three direct capitalization methods:
• Traxprofile Survey Method
• Standard Going Concern Method
• Non-NASCAR Analysis.
Subject Data Available
• Detailed Income and Expense Information
• Utilization Rates
• Separate NASCAR Event vs. non-NASCAR Event
revenue and income
Capitalization Rate Selection
Ibbotson Build-Up Method
Real
Estate
Operators
2.6700%
6.6200%
0.2100%
6.1000%
2.0000%
17.6000%
20-Yr Tr. Yield
S&P Equity Risk Premium
Industry Risk Premium
Small Cap Size
Company Specific Premium
Indicated Equity Yield
Equity Investment
Debt Investment
Weighted Average Cost of Capital
40.000%
60.00%
Less Growth
Indicated Capitalization Rate
Weighting
X 17.60% =
X 9.31%
7.0400% 40.00% X 16.35% =
5.5865% 60.00% X 9.31%
12.6265%
6.5400%
5.5865%
12.1265%
-2.0000%
10.6265%
-2.0000%
10.1265%
Cap
Rate
Real Estate Operators
30.00%
X 10.63% = 3.1879%
Racing, including Track Operations 70.00%
X 10.13% = 7.0885%
Capitalization Rate: 10.2765%
Real Estate Tax Rate Applicable: 1.6131%
Tax Loaded Capitalizatin Rate: 11.8896%
Source: Ibbotson SBBS Valuation Yearbook 2012
Racing,
including
Track
Operations
2.6700%
6.6200%
-1.0400%
6.1000%
2.0000%
16.3500%
TraxProfile Survey Method
Traxprofile General Admissions Example
Planned Events
Complete Rainouts (Region 3)
Revenue Events
Rounded
Average Attendance per Event
Average Price Per Ticket
General Admissions Revenue
Total Revenue
Back Gate (Pit Admissions)
Food and Beverage
Other Income
Overall General Expenses
Net Revenue from Events
Expenses
Advertising
Food
Insurance
Payroll
Purse
Rent
Other cost of sales
25%
21%
12%
79%
2.5%
6.0%
4.0%
7.0%
49.5%
7.0%
3.0%
79.0%
Gross Profit
Track Rentals
Days
Average Rental Rate per Day
Total Track Rental Income
Total Income
Business Profit
Miscellaneous
Total Other Deductions
Estimated Net Income to the RE
35
18.1%
28.665
29
5,000
$8.00
$1,160,000
$2,761,905
$690,476
$580,000
$331,429
$2,181,905
$580,000
$69,048
$165,714
$110,476
$193,333
$1,367,143
$193,333
$82,857
$2,181,905
$580,000
100.00
$2,500
20%
$10,000
$250,000
$830,000
$166,000
$176,000
$654,000
6.335
Cap Rate:
10.2765%
Tax Rate:
1.6131%
Combined Rate 11.8896%
42%
Value:
$5,500,000
GOING CONCERN METHOD
VS.
MODIFIED GOING CONCERN
METHOD
Revenues
•
Oval Tracks
–
–
–
–
–
–
•
Dragstrips
–
–
–
–
–
•
Ticket sales/gate receipts
Sanctioning fees
Daily usage fees (track rental for practice/testing)
Advertising/sponsorships
Television fees
Concessions
Ticket sales/gate receipts
Sanctioning fees
Advertising/sponsorship
Television fees
Concessions
Road Courses
–
–
–
–
–
Daily usage fees (track rental)
Program fees
Advertising/sponsorship
Concessions/gasoline sales
Gate receipts
Road Course Revenues
• Track Rental
– Weather/Climate Based
– Utilization
• Generally all weekend
days (Saturday & Sunday)
– 80% - 100% used
• Most Fridays
– 65% - 80%
• Some weekdays (M-Th)
– 10% - 35%
COMPETITIVE PEER GROUP
Road Racing Facilities
Road Course
Distance (Miles)
2.00
No. of
Courses
1
SCCA
Racing
Regional
Annual
Operating
Weeks
30
Overall
Utilization
Rate
60.48%
BeaveRun Motorsports Complex
Wampum, PA
1.60
1
National
32
50.00%
$5,950
GingerMan Raceway
South Haven, MI
1.88
1
National
29
50.74%
$5,000
Watkins Glen International
Watkins Glen, NY
3.45
1
National
26
100.00%
$11,500
Putnam Park
Greencastle, IA
1.77
1
None
33
34.63%
$3,850 - $6,500
Virginia International Raceway
Alton, VA
3.27
2
National
45
93.33%
$11,500
2.25, 2.20 & 1.90
3
National
49
70.85%
$3,850 - $6,500
New Jersey Motorsports Park
Millville, NJ
2.25 & 1.90
2
Regional
36
63.89%
$13,500
Mid-Ohio Sports Car Course
Lexington, OH
2.40
1
National
32
77.23%
$12,000 - $15,000
Name/Location
Nelson Ledges
Southington, OH
Summit Point Raceway
Summit Point, WV
Track Rental Per Day
Weekend
Weekday
$4,000 - $5,250
$2,800
Comments
Utilization impacted by pending sale rumors at the close of
the prior season.
$3,500 - $4,500 Opened Spring 2002. Includes 0.82 mile Wilson Circuit
karting track. Planned 2.2 mile "South Course" yet to be
constructed.
$3,000 - $4,000 Opened in 1996. Utilization rate does not include evening
test sessions which start at 5:30pm for 61 days of the
season.
$8,000
Current course opened in 1957.
$3,800 - $6,300 Opened late-1991. Utilization rate does not include
personal test days used by the owner.
$8,600
Originally operated from 1957-1974; Re-opened during
Spring 2002.
$3,800 - $6,300 Originally opened during the mid-1960's. Jefferson Circuit
added during the mid 1990's. Shenandoah Circuit added
2003.
$8,000
Opened Summer 2008.
$9,500
Opened 1962; substantially upgraded mid-1980's. Track
surface repaved 2006.
Expenses
• Fixed
– Real Estate Taxes
– Insurance
• Variable
–
–
–
–
–
–
–
Payroll
Racetrack Operations
Repairs & Maintenance
Utilities
Food service/concessions
Fuel
Administrative
• Reserves!
Case Study 1
HISTORIC REVENUE AND EXPENSES
Road Course #1
Amount
Revenue
Track Rental
Other Rental
Program
Food Service
Gate Receipts
Other Services
Fuel Sales
Other Sales
Advertising Revenues
Miscellaneous
Total Revenue
Expenses
Real Estate Taxes
Insurance
Payroll
Racetrack
Administrative
Food Service Expense
Fuel Expense
Repairs & Maintenance
Miscellaneous
Utilities
Replacement Reserves
Total Expenses
Net Operating Income
2007
$/DU
$1,573,312
$398,901
$947,948
$893,450
$1,672,264
$140,000
$194,640
$2,199,160
$460,120
$173,621
$8,653,417
$9,094
$2,306
$5,479
$5,164
$9,666
$809
$1,125
$12,712
$2,660
$1,004
$50,020
$104,027
$167,353
$1,940,714
$3,737,079
$775,072
$369,801
$138,011
$312,218
$195,282
$73,152
$0
$7,812,709
$840,707
$601
$967
$11,218
$21,602
$4,480
$2,138
$798
$1,805
$1,129
$423
$0
$45,160
$4,860
% of Rev.
18.18%
4.61%
10.95%
10.32%
19.32%
1.62%
2.25%
25.41%
5.32%
2.01%
100.00%
Amount
2008
$/DU
% of Rev.
Amount
2009
$/DU
$1,044,465
$322,085
$995,511
$897,286
$1,709,594
$128,333
$202,405
$2,066,544
$460,134
$100,406
$7,926,762
$6,037
$1,862
$5,754
$5,187
$9,882
$742
$1,170
$11,945
$2,660
$580
$45,819
13.18%
4.06%
12.56%
11.32%
21.57%
1.62%
2.55%
26.07%
5.80%
1.27%
100.00%
$1,121,344
$240,016
$1,083,478
$683,741
$1,561,391
$96,884
$170,123
$1,977,705
$436,518
$65,371
$7,436,570
$6,482
$1,387
$6,263
$3,952
$9,025
$560
$983
$11,432
$2,523
$378
$42,986
1.20%
$32,084
1.93% $153,214
22.43% $1,679,229
43.19% $3,745,035
8.96% $645,215
4.27% $372,039
1.59% $168,058
3.61% $328,334
2.26%
$44,825
0.85%
$69,572
0.00%
$0
90.28% $7,237,604
9.72% $689,159
$185
$886
$9,707
$21,648
$3,730
$2,151
$971
$1,898
$259
$402
$0
$41,836
$3,984
0.40%
1.93%
21.18%
47.25%
8.14%
4.69%
2.12%
4.14%
0.57%
0.88%
0.00%
91.31%
8.69%
$64,080
$145,053
$1,471,904
$3,422,945
$493,373
$245,065
$148,828
$220,192
$21,894
$86,262
$0
$6,319,597
$1,116,973
$370
$838
$8,508
$19,786
$2,852
$1,417
$860
$1,273
$127
$499
$0
$36,529
$6,456
% of Rev.
15.08%
3.23%
14.57%
9.19%
21.00%
1.30%
2.29%
26.59%
5.87%
0.88%
100.00%
Amount
2010 Budget
$/DU
% of Rev.
$1,121,300
$252,950
$1,248,395
$683,000
$1,510,548
$150
$169,900
$1,855,448
$427,250
$60,550
$7,329,491
$6,482
$1,462
$7,216
$3,948
$8,731
$1
$982
$10,725
$2,470
$350
$42,367
15.30%
3.45%
17.03%
9.32%
20.61%
0.00%
2.32%
25.31%
5.83%
0.83%
100.00%
0.86%
$64,500
1.95% $141,500
19.79% $1,535,069
46.03% $3,414,250
6.63% $520,336
3.30% $232,468
2.00% $149,486
2.96% $264,360
0.29%
$9,700
1.16%
$90,000
0.00%
$0
84.98% $6,421,669
15.02% $907,822
$373
$818
$8,873
$19,736
$3,008
$1,344
$864
$1,528
$56
$520
$0
$37,119
$5,248
0.88%
1.93%
20.94%
46.58%
7.10%
3.17%
2.04%
3.61%
0.13%
1.23%
0.00%
87.61%
12.39%
Case Study 2
HISTORIC REVENUE AND EXPENSES
Road Course #2
Amount
Revenue
Track Rental
Other Rental
Program
Food Service
Gate Receipts
Other Services
Fuel Sales
Other Sales
Advertising Revenues
Miscellaneous
Total Revenue
Expenses
Real Estate Taxes
Insurance
Payroll
Racetrack
Administrative
Food Service Expense
Fuel Expense
Repairs & Maintenance
Miscellaneous
Utilities
Replacement Reserves
Total Expenses
Net Operating Income
2006
$/DU
% of Rev.
Amount
2007
$/DU
$766,274
$142,594
$212,590
$7,318
$24,010
$145,797
$60,287
$95,945
$19,084
$7,301
$1,481,199
$4,881
$908
$1,354
$47
$153
$929
$384
$611
$122
$47
$9,434
51.73% $645,842
9.63% $215,531
14.35% $303,013
0.49%
$81,931
1.62%
$28,637
9.84% $156,656
4.07%
$68,830
6.48% $139,465
1.29%
$15,125
0.49% $120,958
100.00% $1,775,988
$4,485
$1,497
$2,104
$569
$199
$1,088
$478
$969
$105
$840
$12,333
$128,295
$104,088
$370,263
$322,518
$148,133
$6,135
$55,017
$10,343
$12,525
$57,180
$0
$1,214,498
$266,701
$817
$663
$2,358
$2,054
$944
$39
$350
$66
$80
$364
$0
$7,736
$1,699
8.66%
$83,994
7.03%
$64,424
25.00% $468,355
21.77% $377,281
10.00%
$89,928
0.41%
$72,157
3.71%
$70,181
0.70%
$3,536
0.85%
$11,200
3.86%
$63,908
0.00%
$0
81.99% $1,304,964
18.01% $471,024
$583
$447
$3,252
$2,620
$625
$501
$487
$25
$78
$444
$0
$9,062
$3,271
% of Rev.
Amount
2008
$/DU
36.37% $426,188
$3,772
12.14%
$58,357
$516
17.06% $403,817
$3,574
4.61%
$33,969
$301
1.61%
$0
$0
8.82% $139,717
$1,236
3.88%
$61,304
$543
7.85% $142,375
$1,260
0.85%
($2,125)
($19)
6.81%
$11,131
$99
100.00% $1,274,731 $11,281
4.73% $131,915
3.63%
$76,466
26.37% $503,117
21.24% $210,956
5.06%
$80,449
4.06%
$33,368
3.95%
$66,784
0.20%
$13,074
0.63%
$11,400
3.60%
$48,325
0.00%
$0
73.48% $1,175,856
26.52%
$98,876
$1,167
$677
$4,452
$1,867
$712
$295
$591
$116
$101
$428
$0
$10,406
$875
% of Rev.
2009 Annualized
Amount
$/DU
% of Rev.
33.43% $500,641
4.58% $100,193
31.68% $442,656
2.66%
$83,327
0.00%
$38,384
10.96% $112,392
4.81%
$54,324
11.17%
$23,515
-0.17%
$7,242
0.87%
$72,890
100.00% $1,435,566
$4,470
$895
$3,952
$744
$343
$1,004
$485
$210
$65
$651
$12,818
10.35% $159,133
$1,421
6.00%
$77,528
$692
39.47% $620,563
$5,541
16.55% $245,644
$2,193
6.31%
$34,979
$312
2.62%
$52,109
$465
5.24%
$64,219
$573
1.03%
$62,337
$557
0.89% $115,968
$1,035
3.79%
$57,045
$509
0.00%
$0
$0
92.24% $1,489,525 $13,299
7.76%
($53,960)
($482)
34.87%
6.98%
30.83%
5.80%
2.67%
7.83%
3.78%
1.64%
0.50%
5.08%
100.00%
11.09%
5.40%
43.23%
17.11%
2.44%
3.63%
4.47%
4.34%
8.08%
3.97%
0.00%
103.76%
-3.76%
Case Study 3
HISTORIC REVENUE AND EXPENSES
Road Course #3
Amount
2005
$/DU
% of Rev.
Amount
2006
$/DU
% of Rev.
Amount
2007
$/DU
% of Rev.
Revenue
Track Rental
Buildng Rental - Gasoline Alley
Rentals - Merchandise Store
Rentals - Other
Concessions Income
Gasoline Sales
Gate Receipts
Entry Fees
Miscellaneous
Total Revenue
$2,500,236
$87,437
$36,000
$361,201
$222,880
$185,655
$210,670
$240,926
$272,981
$4,117,986
$3,677
$129
$53
$531
$328
$273
$310
$354
$401
$6,056
60.72% $3,236,822
2.12% $186,640
0.87%
$38,000
8.77% $443,451
5.41% $245,414
4.51% $215,032
5.12% $270,693
5.85% $252,562
6.63% $415,653
100.00% $5,304,267
$4,410
$254
$52
$604
$334
$293
$369
$344
$566
$7,227
61.02% $2,943,350
3.52% $213,950
0.72%
$36,000
8.36% $644,477
4.63% $313,061
4.05% $277,973
5.10% $203,421
4.76% $270,579
7.84% $505,925
100.00% $5,408,736
$3,823
$278
$47
$837
$407
$361
$264
$351
$657
$7,024
54.42%
3.96%
0.67%
11.92%
5.79%
5.14%
3.76%
5.00%
9.35%
100.00%
Expenses
Real Estate Taxes
Insurance
Payroll
Racetrack
Administrative
Concession Expense
Other Taxes
Repairs and Maintenance
Miscellaneous
Utilities
Replacement Reserves
Total Expenses
Net Operating Income
$22,217
$61,938
$608,960
$167,109
$224,092
$10,000
$92,390
$428,712
$33,142
$69,002
$0
$1,717,562
$2,400,424
$33
$91
$896
$246
$330
$15
$136
$630
$49
$101
$0
$2,526
$3,530
0.54%
$22,770
1.50%
$83,297
14.79% $504,675
4.06% $178,632
5.44% $248,121
0.24%
$4,789
2.24% $115,168
10.41% $396,403
0.80%
$66,500
1.68%
$85,109
0.00%
$0
41.71% $1,705,464
58.29% $3,598,803
$31
$113
$688
$243
$338
$7
$157
$540
$91
$116
$0
$2,324
$4,903
0.43%
$35,093
1.57%
$67,569
9.51% $939,061
3.37% $226,245
4.68% $180,553
0.09%
$2,693
2.17% $149,338
7.47% $704,105
1.25% $103,293
1.60% $100,169
0.00%
$0
32.15% $2,508,119
67.85% $2,900,617
$46
$88
$1,220
$294
$234
$3
$194
$914
$134
$130
$0
$3,257
$3,767
0.65%
1.25%
17.36%
4.18%
3.34%
0.05%
2.76%
13.02%
1.91%
1.85%
0.00%
46.37%
53.63%
Capitalization Rate
• Good question!
• Property desirability?
Investor Surveys
Band of Investment
BAND OF INVESTMENT METHOD
MORTGAGE / EQUITY ASSUMPTIONS
Loan To Value Ratio
65%
Interest Rate
8.50%
Amortization (Years)
20
Mortgage Constant
0.1041
Equity Ratio
35%
Equity Dividend Rate
15.00%
WEIGHTED AVERAGE OF MORTGAGE AND EQUITY REQUIREMENTS
Mortgage Requirement
Equity Requirement
Indicated Capitalization Rate
Rounded
65%
35%
x
x
10.41% =
15.00% =
6.77%
5.25%
12.02%
12.00%
Sources
Financials for corporations – www.morningstar.com
Latest NASCAR information – www.NASCAR.COM ,
http://www.new2nascar.com/history.htm, and
http://nascarnation.us/page/a-brief-history-of-nascar.
Individual track information – www.trackname.com or Google
track name
Articles on track valuation – www.ai.com (Lum Library)
Information on development of capitalization rates for race
industry - Ibbotson SBBS Valuation Yearbook 2012 or
www.morningstar.com
Rates of Return – www.realtyrates.com
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