Photo by Gary Hubbell, Aspen Ranch Real Estate

WWR provided a private equity client with due diligence analysis and support related to a proposed ranch acquisition and water development project located in northeastern Nevada. The development project included the use of the ranch’s water for both on- and off-site development. WWR conducted a phase 1 preliminary review of the water rights to identify any immediate fatal flaws that would prevent the project from being commercially and financially viable, followed by a phase 2 in-depth, due diligence analysis of the property, water rights, market demand and risk, financial performance, management team, legal, regulatory, and political risks.

On- and off-site feasibility and valuation analysis for potential uses of the property’s water rights was conducted. The off-site analysis included a regional demand and absorption analysis in which WWR identified and described local water demands that could be served by the water rights. An extensive review and analysis of possible infrastructure conveyance options was performed to determine costs and feasibility of moving the water to the identified demand centers. WWR also researched and collected market comparable transactions to help shape price expectations for off-site development opportunities. WWR identified and assessed alternative water supply options and costs for entities identified in the regional demand assessment. To obtain the off-site analysis information, the WWR team contacted and met with select demand entities to obtain direct-demand and alternative supply information.

The on-site analysis included an economic analysis of the value of the water to the ranch’s current agricultural operations. Using WWR’s proprietary farm income model, WWR was able to determine the value of water to the current operation. WWR performed price sensitivity analysis on variable revenue and operational factors. The on-site analysis also included the development and feasibility analysis of alternative on-site uses for the water, including a proposed power generation facility and hydroelectric facility.

WWR was retained by a private equity fund to identify, develop, and source water right investment opportunities throughout the western United States. WestWater has identified more than $100 million in water investment opportunities including distressed loans collateralized by water rights, undervalued water utilities with large water right holdings, and agricultural water rights.