Sunday, December 9, 2018

Why Some Bosses Bully the Superstars

General Attributes of Bully Bosses

a) Exhibit extremely mean and vile behavior towards the targets – generally a handful of employees within the department/hierarchy.

b) Malice is rarely performance, work or ethics related.  

c) Enjoy (sadistic) pleasure in maligning targets in meetings in front of colleagues and others.

d) Insignificant stimulus triggers their bi-polar behavior towards the targets, often followed by an indecent and tangential rant.

e) Evaluate targets poorly with very derogatory narratives, atrociously ignoring their actual and on-record performances.

f) Enjoy humiliating targets with deliberately antagonistic stance and actions, systematically removing them from all major tasks, projects, groups and committees.

g) Relocate (or constantly threaten to relocate) targets to unfitting setting.


Why Some Bosses Bully Existing Superstars
Answer – Inferiority Complex

1) Incompetent bosses (hired or promoted due to high-level connections, nepotism, political appointments, etc.) often suffer from serious inferiority complex in managing the highly competent staff members (“superstars”).

2) Unfortunately, some of those incompetent bosses (who are also inherently angry and arrogant) grow into bullies fearing significant resistance from within.  

3) As a result, those bullies aggressively target the superstars (to start with), routinely walking down on the curve until the mission has been accomplished.

4) They even entice the “safe” enthusiasts (none is ever safe with these bullies!) to collaborate alongside, jointly reining in on the top targets, promptly and decisively.

5) Peers remain mum, to avoid having to cut a sorry figure with the power backing the bully.

6) The higher-ups usually look the other way, paving the way for least resistance – for a collective and glorious victory. 
   
7) The hand-picked investigators of the top bullies are sometimes accomplices too, protecting the evil and sacrificing the coveted.


Why Some Bosses Hire Superstars and then Bully Them
Answer – To Steal Domain Knowledge

8) The bullies that are obsessed with visibility and cheap credit often resort to this strategy: They hire industry experts and when the department shows potential, they start to exhibit their true color.

9) Of course, until then, they tend to be very quiescent, generally polite and encouraging – just to accentuate the pace of delivery, i.e. transfer of knowledge/know-how and implementation. 

10) These bullies realize that the presence of the superstars lowers their image and power so they strike at the first opportune moment.

11) Additionally, they trade on the fact that the superstars, unlike the other employees, would not stick around too long should the situation deteriorate, so they intensify the assault, often exponentially, to accentuate the pace.


What Happens When the Superstars are Bullied

a) The non-confrontational folks easily give up, accepting the writing on the wall. They start searching for new jobs, including within the same organization.

b) Depending on the atrocity being inflicted, some even quit without landing new jobs, knowing very well it’s easier to switch than having to start afresh.

c) The confrontational counterpart (without the union backing, etc.) wishfully lingers on, evaluates legal rights, and explores other avenues including therapy – until, of course, the inevitable hits the fan!

d) The other confrontational kind (with backing) tries to survive with the needed help from the backers – outcome is usually a toss-up depending on the power of the local leadership.

e) These superstars are the ultimate producers, taking utmost care of the concerned consumers around – mostly selflessly. Their departure often leaves a long-term vacuum.

f) The cycle (of violence) continues until a seismic shake-up in management or an unprecedented external pressure/ movement pushes them off the cliff!


Workplace Bullying Institute – 2017 Stats

(Click on the image to enlarge)

Don't let these bullies destroy your career. Report them to appropriate authorities, including unions. Good Luck!

Disclaimer - The “bully bosses" portrayed here are hypothetical in nature and any likeness to  any individual or entity is strictly coincidental. The author is not offering this presentation as professional services advice in any shape, form or manner whatsoever. Every institution is different, so seek the advice of a competent professional before making any changes to your existing program(s).

Sid Som, MBA, MIM
President, Homequant, Inc.
homequant@gmail.com

Wednesday, December 5, 2018

SkylineValue Allows Comparison of Values ccross All Office Classes

(Click on the image to enlarge)

Based on the quality of construction, architecture, size, amenities, location, stories, tenancy, view, upkeep, etc. office properties are classified into three major categories: Class-A, Class-B and Class-C. Accordingly, their rental rates are significantly different, with A class properties (save Trophies) commanding much higher rental rates than their lower counterparts. Similarly, B and C classes rarely attract upscale ground floor retail and triple-A office tenants.

Of course, in major cities, a limited number of Trophy properties (for example, One World Trade Center in NYC Downtown and Empire State Building in Midtown) exist as well. Trophies generally fetch higher rental rates - both retail (ground floor) and offices than Class-A's in the area. They tend to be architectural masterpieces as well. Empire State Building in Midtown Manhattan needed half a billion (perhaps millions more) in rehab capital to restore it to its old glory.

I used SkylineValue.com to produce these sample valuations as I own and operate the site, to avoid having to deal with any copyright issues. The site is mobile-friendly so no additional Apps are needed (just access the site from Safari on iPhone and it will become a perfect App). It's also totally FREE and NO login/registration of any sort is required. 

In order to value an office property on this site, all one needs to know is the general location, rentable square feet and a few general property characteristics, all of which are easily obtainable online. Once these data elements are available, users can have the system process the valuation in 60 seconds or less. 

This system is designed for the Pros and Non-Pros, offering a "Quick Look" valuation and is intended to complement the traditional valuation, and not replace it. 80 Major Office Markets in the US and Canada are currently covered. 

Just click on the market of your choice on our homepage and follow the prompt. If you need help, use 'TRY IT' from the homepage. Here is the link to SkylineValue.com:


What the Experts are Saying:
“I checked out SkylineValue.com and I have to say that its awesome.  This is a classic case of good things come in small packages.  I was excited to see that the [XXXX] market is included.  I could see this being a very handy tool for investors, appraisers, portfolio managers or just average Joe’s who like to dabble in Commercial real estate.   For my own purposes, I selected different parts of Long Island and different sub groups of properties and I was astonished at how much flexibility and how quickly I was able to retrieve accurate values without the need for full blown work ups.  The fact that I can get a valuation right on my device in about 60 seconds is a breath of fresh air.  I will be using SkylineValue regularly!”     

Should the Taxable Status Date be Forward or Backward?

While most property assessment experts are wrestling with the frequency of the assessment cycle, meaning whether properties should be assessed annually or every three years, etc., I have a completely different perspective on this issue.

Proper market information and data hold the key to produce a fair and equitable roll. The real estate market, like the stock market, has become extremely volatile (rises fast or declines fast), making it increasingly difficult to produce a futuristic roll with the backward-bending market data. Since the Taxable Status Date (or the Valuation date) is generally a futuristic date, the available market information and data tend to be quite inadequate to develop proper predictive (mass appraisal) models that, in turn, generate the assessment roll. Case in point: many taxing jurisdictions utilizing mass appraisal modeling generally build their models in August and September with the available data, targeting the next January as the status date (assuming the valuation and status dates are the same). At that point, because of the usual 3-month lag in recording and validation of sales, the most recent sales in the modeling data-set would cover, at best, June-July, leaving an enormous predictive gap of at least six months. Worse yet, a vast majority of those arm’s length sales would have been contracted in the first and early second quarter of the year, leaving a small percentage of the questionable investor/distressed cash sales to represent the recent state of the market.

With a market as volatile as this, and considering the structural shift to higher risk-taking resulting in continued higher volatility going forward, those futuristic rolls are tantamount to crapshoots in the name of mass appraisal modeling. Granted, today we have more mass appraisal experts all around the world, thanks to organizations like IAAO, as well as more advanced econometric and operations research techniques, but the higher modeling expertise and advanced techniques could not be the proxy for the lack of market data around the status date. Simply put, nobody has the crystal ball in simulating a volatile market six months in advance. That experimentation would be okay to write a thought-provoking paper or article, but is totally unacceptable to experiment with an assessment roll involving most taxpayers’ biggest financial investment.

Again, the only way we can achieve the goal of a fair and equitable roll under the changing market conditions (let's face it, market volatility is here to stay) is if we move away from the predictive mode and settle for a known event. The guesswork in the name of predictive modeling (most modelers understand the MRA process, but do not understand the advanced Time Series modeling) forces modelers as well as the management to undertake a gigantic gamble to predict out values 2 to 3 quarters later.

After having spent, off and on, twenty-five+ years in automated valuation modeling and mass appraisal, I have come to the conclusion that the dialogue should be about the taxable status “date” – should it be a forward date or a backward date? I am of the opinion that it should be a backward date so we do not succumb to the void created by the lack of market data. The CAMA/AVM modelers must have the necessary data, adequately covering the status/valuation date, under their belts before they even get started with the modeling process. This lag would also allow the field staff ample time to inspect all sales (and related permits) ahead of the modeling season. Thus, the modelers would have access to all of the valid sales (preferably inspected) for the allowable period. Modeling, therefore, would not be a predictive game anymore, eliminating the need for any futuristic gamble whatsoever. 

In other words, I am trying to reinvent here the combined benefits of David Ricardo’s 200-year old theory of comparative advantage and Laureate Joseph Stiglitz’s theory of markets with asymmetric information. In terms of market information, jurisdictions with futuristic status/valuation dates have an inherent comparative disadvantage vis-à-vis their counterparties.

Needless to say, this concept will also help dismantle the oligopolistic stronghold of the few law firms, paving the way for a significantly reduced volume of assessment appeals. Furthermore, we will not lose sleep worrying over how we could ever justify the drastically lower COD’s for the modeled sale periods in relation to the subsequent periods within the same assessment cycle. This would also minimize the need for any annual sales ratio/equalization study. I do, however, understand the short-term statutory and logistical issues, but then again, we owe our taxpayers a fair and equitable tax roll.

At the end of the day, do taxpayers really care if the status date is 01-2018 or 01-2019? Honestly, most taxpayers have no clue what that even means. All they are interested in is a value truly reflective of the market (which is where Assessment comes in). If we are capable of delivering that, we will have achieved our goal. Eventually the protests would be reduced to err in data only, removing the need for the mass (appeal) filers from the system, altogether. The concept of refund liability would be a thing of the past.


--Sid Som, MBA, MIM
President, Homequant, Inc.
homequant@gmail.com

http://www.homequant.com/ 

homequant@gmail.com

Tuesday, December 4, 2018

SkylineValue helps Break-down the Monolithic Office Classes

Class-A Max

Class-A Mid

Class-A Min
(Click on the image to enlarge)

The traditional commercial appraisal requires that office properties be classified into one of the following three broad categories: A, B or C. In reality, the classes are not that monolithic. On the contrary, there is significant diversity within each class, requiring sub-classifications.

That is why, we developed the SkylineValue office valuation system with three additional sub-classes (Max, Mid and Min) within each class, offering our users the flexibility to identify the class more precisely with a sub-class, leading to more meaningful and statistically significant valuations.

The above graphics show how the differentiation takes place. Though these are all Class-A properties with similar basic attributes (size, type, age and office tenancy), there are significant qualitative differences (sub-location, land, parking, view and type of retail) that vastly differentiate them even within this monolithic office class, resulting in large price variations. In addition to the World Class Retail (on the ground floor) and View (generally waterfront), Trophy and Class-A Max properties tend to be on Over-sized lots with better Parking facilities. Therefore, lumping all of them together simply defies meaningful market valuations.

I picked the above graphics from SkylineValue.com, a "quick look" office valuation site I own and operate, to avoid having to deal with any copyright issues. It produces such valuations in less than 60 seconds each. The site is mobile-friendly so no additional Apps are needed (just access the site from Safari on your iPhone and it will work as an App). It's totally FREE and NO login/registration of any sort is required. 80 Major Office Markets in the US and Canada are currently covered.

Just click on the market of your choice on our homepage and follow the prompt. If you need help, use 'TRY IT' from the homepage. Here is the link to SkylineValue.com:

homequant@gmail.com

What the Experts are Saying:
“I checked out SkylineValue.com and I have to say that its awesome.  This is a classic case of good things come in small packages.  I was excited to see that the [..........] market is included.  I could see this being a very handy tool for investors, appraisers, portfolio managers or just average Joe’s who like to dabble in Commercial real estate.   For my own purposes, I selected different parts of Long Island and different sub groups of properties and I was astonished at how much flexibility and how quickly I was able to retrieve accurate values without the need for full blown work ups.  The fact that I can get a valuation right on my device in about 60 seconds is a breath of fresh air.  I will be using SkylineValue regularly!” 

Homequant Offers Custom Sales Ratio Study for SFR Rental Portfolios

Sunday, December 2, 2018

AVM is a Market Solution, Comparable Sales Analysis isn't (2 of 2)

- Intended for Start-up Analysts and Researchers -

If you provide a subject and a sales population to a group of concerned parties - an Assessor to a Bank Appraiser to a Listing Agent offering buyback guarantee to a traditional Listing Agent to a Buyer's Agent to an Appeals Consultant - you will be unpleasantly surprised by the outcome. They will pick different sets of comps based on their professional requirements and objectives, leading to different, often very conflicting, valuations. For instance, your Assessor may not have your best interest at heart as s/he has to meet a budgetary requirement, paving the way for counterparties like Appeals Consultants. A Listing Agent looking to get an "exclusive" may not do well with a set of middle-of-the-road comps which a Buyer's Agent might be interested in.  

In other words, the selection of comps is a function of the hat the party wears, making the entire process highly subjective. AVM, on the other hand (as I explained before - post 1 of 2) is a fairly scientific exercise. All variables interact with one another in an econometric equation and produce the resulting values. Therefore, all other factors remaining constant, two identical homes will have identical values - but not so in the world of the comparable sales analysis ("comp sales") as it is very party-specific.
  
Once the pool of sales, that closely represents the subject are properly scored and quantitatively adjusted, becomes comps. Generally, five best comps are then selected to value a subject. Valuers tend to use one of the three common methods - distance, least adjustments and sales recency - to narrow their choices down to the five contributing comps. Please read my prior postings (links below) for more details.   

In this analysis, the attributes of the subject home are: Bldg SF=3,250, Lot SF=17,400 and Bldg Age=26. 

From a large sales population, an optimal pool of 10 comps was algorithmically produced to demonstrate how subjectivity plays a key role in this valuation process. In each approach, the lowest ($308,770) and the highest value ($422,175) comps were removed. 




The above table represents the distance method, meaning the five closest (to the subject) comps were considered to be the best comps, producing a value range of $344,820 to $414,940, with a probable subject value of $388,775. Since least adjustments and recency of sales were ignored here, obviously several comps needing large adjustments or of older originations managed to creep in, thus making the process sub-optimal.  




The above table (middle one) represents the least adjustment method, meaning the comps that required the least adjustments were the best comps. The least adjustment is nothing but a balancing act. In other words, larger lots are compensated in value by smaller building sizes, lesser time adjustments are proxying for older homes, etc. For example, the second least adjusted comp (# 6) with much smaller lot was corrected by the larger and older building. It also sacrificed one of the closest (# 8) comps. This method produced a lower subject value of $371,150.




The above table (bottom one) represents the sales recency method, meaning the most recent five comps (in terms of sale dates) are the best ones. This is where the lowest and the highest value comps showed up on the initial line-up, hence substituted with the ones waiting in line. Though this method produced the most compact value range (upper bound was compacted down), it produced the lowest subject value of $360,340.

When analytics are robotized, this is how the game would be played out (no negotiations with robots until AI 5.0):


1. Assessor and Listing Agent (traditional) will be given the "distance" value.

2. Bank Appraiser and Listing Agent (buyback) will be given the "least adjustment" value.
3. Appeals Consultant and Buyer's Agent will be given the "sales recency" value.

Way to go, Mr. Robot.     


How to Reduce Subjectivity in Comp Sales


1. Apply meaningful selection, scoring/ranking and adjustments to the sales population

2. Build an AVM and insist on two AVM values (4th and 5th) on each line-up
3. Verify all comps spatially, ensuring they all come from same/compatible neighborhoods
4. Apply time adjustments in line with the local market (do not use national figures)
5. Pay attention to valuation dates (01-01-18 vs 08-16-18 require different adjustments)
6. While using sales recency, contract dates are preferred to closing dates (despite norm)
7. If you are not allowed to use AVM values, show them below the grid with value analysis
8. If the sales population is large, extract sample from the most recent arms-length sales
9. If the subject population is large, automate the process with batching technology.

Good Luck!

Sid Som, MBA, MIM

President, Homequant, Inc.
homequant@gmail.com

Additional LINKS...
AVM is a Market Solution, Comparable Sales Analysis isn't (1 of 2)
Differentiate between Sales and Comparable Sales
Time Adjustment and Flexible Valuation Dates
Least Adjustment Method alongside Distance and Sales Recency
Demand to See the Contributing Comps Spatially