Graaskamp and Business Enterprise Value: It’s in the Profit Centers

A Case Study of an Operating Downtown “Luxury” Hotel
  • William N. KinnardJr.
  • Elaine M. Worzala
Part of the Research Issues in Real Estate book series (RIRE, volume 9)


This chapter explores a major premise of the teachings and practices of James A. Graaskamp. It explores the concept of entrepreneurial profits and their impact on the value of an individual piece of real estate. He believed that the profit centers within a real estate enterprise often created a substantial part of the value of an asset and that the income must be attributed correctly to its different sources within a real estate venture. In this chapter, we use a case study approach and analyze the financial statements of an operating “luxury” hotel over the period 1991-96 to examine this fundamental concept of real estate value and explore the impact of separating the various income streams. Results indicate that, on average, non-realty assets (Furniture, Fixtures and Equipment; Intangible Assets; Profit Centers) account for 32% of the Going Concern Value of this operating downtown “luxury” hotel.


Real Estate Intangible Asset Business Enterprise Real Estate Investment Capitalization Rate 
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Copyright information

© Springer Science+Business Media New York 2003

Authors and Affiliations

  • William N. KinnardJr.
  • Elaine M. Worzala

There are no affiliations available

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