A regional banking institution recently engaged The McEnery Company to appraise a large multi-property portfolio of raw land tracts spanning Louisiana and Texas. The subject properties included parcels encumbered by perpetual conservation easements and, in several cases, active wetlands mitigation banks. The intended use of the appraisal was for mortgage lending purposes, with the objective of providing the lender an informed opinion of underlying land value subject to these encumbrances. The assignment required detailed analysis of the legal and physical restrictions imposed by the conservation easements, including limitations on development rights, allowable uses, and long-term management obligations. For tracts operating as wetlands mitigation banks, the valuation also considered the operational status, credit inventory, and potential future mitigation credit sales, balanced against the non-development nature of the property. Market research focused on comparable sales of similarly encumbered acreage, adjusted for location, size, access, ecological value, and mitigation bank activity where applicable. The valuation process addressed the diminished marketability and liquidity of such encumbered assets, and reconciled sales comparison and income-based indicators (where credit sales data was available) to provide a credible, well-supported value conclusion for the lender’s underwriting.
