Recently, we introduced our audience to a new hire as JLL Valuation Advisory welcomed structured finance specialist John Oates to its Renewable Energy Valuation team as a managing director.
Oates hopes to help build out a best-in-class infrastructure platform. Oates said he would not call himself a structured finance specialist, but rather a valuation expert in valuing assets for structured finance purposes.
“Our knowledge comes from knowing how assets operated and how those assets might fit in for with tax/partnership/accounting guidelines for a financial transaction that is being arranged,” Oates told Valuation Review. “As a young appraiser, I valued machinery and equipment assets for primarily insurance purposes before I achieved an MBA. That moved me into business valuation appraisals. In 1983, we started to do lease transactions that combine both asset and financial knowledge. Things took off from there.”
As to the specifics of what the company’s renewable energy valuation team does and comparing/contrasting this with traditional forms of valuation, Oates said it’s all about valuating assets, which is defined for this purpose as facilities rather that individual assets in a facility.
He said his department is valuing just the equipment assets such as shorter life assets versus the land/building assets.
“While we value each asset, we also value the income capabilities of the total facility and project that into the total economic useful life of the facility,” Oates said. “That allows us to determine fair market value the facility on day one of the transaction and also at future points (residual value). We also segregate the assets into the real (1250) versus the equipment (1245) by a cost segregation analysis.
“I am contacting former clients to let them know that a trusted source is back in the business. Additionally, we are building up a support team of experienced appraisers to give our clients the comfort that we have the expertise to analyze and value their transaction. We must support our work to tax lawyers/arrangers/developers and ultimately the equity investor,” the newly appointed executive added.
Oates also noted the focus will be in the renewable energy industry, though there is expertise in virtually all infrastructure assets.
As for Oates’ expertise, that is a “long list,” as he put it. He has been an appraiser for almost 50 years having done structured finance valuation since 1983. Automobile facilities include the US-located Mazda, Saturn, Suburu/Isuzu, Mitsubishi plants and virtually all the primary/secondary/tertiary parts suppliers appear on his resume, just to name a few.
“I have also done international automobile plants in the Netherlands, Japan and Australia,” he said. “Steel mill clients have been the likes of US Steel, LTV, Bethlehem Steel and Inland Steel. Oil/gas/chemical are Chevron/Texaco/Dupont. Paper mills are a favorite of mine. I have appraised virtually all types of power plants.”
As to the future regarding additions to renewable energy valuation platforms, Oates indicated there will be growth pertaining to commercial companies.
“JLL is looking to become a greener company,” he said. “We can help from the valuation standpoint by valuing solar/wind/fuel cell for efficient financial transactions. This will compliment JLL and the Blake Lacher in their efforts to advise clients on how they can achieve a greener and hopefully more fuel-efficient standard.”