NewTower, on behalf of MEPT, maintains a valuation process that is thorough and objective.Each asset in the Fund’s portfolio is appraised quarterly by an independent MAI-designated member who must be selected and engaged by NewTower. In addition, NewTower has a comprehensive list of content and analytical requirements that must be included in every appraisal submitted and it is the general practice of NewTower to engage an appraiser for no more than three consecutive years on the same MEPT asset.
As an additional safeguard, NewTower retains independent valuation firms, such as The Altus Group, to verify the accuracy of the appraisal process by thoroughly reviewing appraisal reports to determine regulatory and professional standards (USPAP) compliance, completeness of documentation, reasonableness of methodology, accuracy of calculations, and adequacy, relevance, and appropriateness of conclusions. The independent review firm then indicates whether each MAI appraisal is recommended, based on the scope of their review, for acceptance by NewTower on behalf of MEPT. In addition, both Altus and other independent consultants provide ongoing advice that helps ensure the internal and external appraisal and review procedures employed by NewTower reflect professional best practices. The Altus Group real estate valuation practice is comprised of a team of MAI-designated professionals that have provided appraisal review services to MEPT for many years.
As NewTower operates in a heavily regulated environment, independent advisors and auditors are retained to perform a variety of services including annual audits of financial statements and reviews of internal controls. Additionally, NewTower undergoes a review every 12-18 months by its regulator, the Maryland Commissioner of Financial Regulation.
Further, MEPT currently engages The Altus Group to independently value both portfolio and property level debt quarterly. NewTower oversees the Fund’s valuation policies and procedures, including oversight of leverage valuations independently prepared by The Altus Group.