Appraiser Overstates Lease Stability
Nile Shipping retained Northstar Logistics to appraise a warehouse before purchasing it. Northstar's report stated that all tenant leases ran for ten years, but the appraiser had only reviewed documents supplied by the seller and never verified tenant intentions. Nile closed the purchase at a price reflecting the stated lease terms. After closing, several tenants terminated early, and an independent valuation showed the property was worth three million dollars less than paid. Nile recovers the difference in value as the pecuniary loss caused by reliance on the report.