No, we’re not referring to an asset with negative equity, but one that’s actually under the deep blue sea. In an article, maritime valuation specialist Ed Geary talks about appraising assets not found on terra firma—from ships to underwater hotels.

Unusual site visit: He was the expert for the IRS in a Tax Court case involving a donation of stock in a company that owned the Jules’ Undersea Lodge in the Florida Keys. “Using scuba gear, I conducted an underwater inspection of the hotel,” says Geary, who has the FRICS designation from the Royal Institution of Chartered Surveyors. He used a replacement cost approach adjusted for inflation and depreciation to determine the hotel’s fair market value, which was also adjusted for a DLOM because the donated stock represented a minority interest. The court ruled in favor of the IRS.

The article points out that an accredited and certified maritime appraiser must have complete knowledge of engineering principles and practices of design and construction. He or she also must also have expertise with flag administration requirements and statutory and regulatory compliance in a maritime context.

One question to ponder: Can an asset covered with water be subject to a discount for lack of liquidity?