Commercial Appraisal - ExactBid · Web viewPlease reference page 11 of this report for important information regarding the scope of research and analysis for this appraisal, including

REPORTTYPEPROPER REPORTREAL ESTATE APPRAISAL

OfPropertyName

Address, CityCounty County

State, Zip

As ofAsIsValueDate

Prepared ForClientSalutation ClientFirstName ClientLastName

ClientCompanyNameClientAddress

ClientCity, ClientState, ClientZip

Client File:ClientFileNum

Prepared byAPPRAISALFIRMNAME

Appraiser1FirstName Appraiser1LastName, Appraiser1Suffix, Appraiser1CertificationState-Appraiser1CertificationNumber

Appraiser2FirstName Appraiser2LastName, Appraiser2Suffix, Appraiser2CertificationState-Appraiser2CertificationNumber

File Name:

AppraisalFile

APPRAISALFIRMNAME

AppraisalFirmAddressAppraisalFirmCity, AppraisalFirmState, AppraisalFirmZip

AppraisalFirmPhoneNumFax: AppraisalFirmFaxNum

AppraisalFirmEmailAppraisalFirmWebSite

ReportDate

ClientSalutation ClientFirstName ClientLastNameClientCompanyNameClientAddressClientCity, ClientState ClientZip

Re: ReportTypeProper Report, Real Estate AppraisalPropertyNameAddress, City, County County, State, Zip

File Name: AppraisalFile

Dear ClientSalutation ClientLastName:

At your request, AuthorWeILowerCase have prepared an appraisal for the above referenced property, which may be briefly described as follows:

CapsuleDescription

Please reference page 13 of this report for important information regarding the scope of research and analysis for this appraisal, including property identification, inspection, highest and best use analysis and valuation methodology.

AuthorWeI certify that AuthorWeILowerCase have no present or contemplated future interest in the property beyond this estimate of value. PriorServices

Your attention is directed to the Limiting Conditions and Assumptions section of this report (page 11). Acceptance of this report constitutes an agreement with these conditions and assumptions. In particular, AuthorWeILowerCase note the following:

Hypothetical Conditions:

HypotheticalConditions HypotheticalConditions2 HypotheticalConditions3

ClientSalutation ClientLastNameClientCompanyName

ReportDatePage 2

Extraordinary Assumptions:

ExtraordinaryAssumptions ExtraordinaryAssumptions2 ExtraordinaryAssumptions3

Based on the appraisal described in the accompanying report, subject to the Limiting Conditions and Assumptions, Extraordinary Assumptions and Hypothetical Conditions (if any), AuthorWeILowerCase have made the following value conclusion(s):

AsIsValuePerspective As Is Market Value:The “As Is” market value of the AsIsInterestAppraised estate of the property, as of AsIsValueDate, is

One Million Fifty Thousand One Dollars (AsIsValue)

The market exposure time preceding AsIsValueDate would have been AsIsExposurePeriod and the estimated marketing period as of AsIsValueDate is AsIsMarketingTime.

AsCompleteValuePerspective As Complete Market Value: The “As Complete” market value of the AsCompleteInterestAppraised estate of the property, as of AsCompleteValueDate, is

One Million Fifty Thousand Dollars (AsCompleteValue)

The market exposure time preceding AsCompleteValueDate would have been AsCompleteExposurePeriod and the estimated marketing period as of AsCompleteValueDate is AsCompleteMarketingTime.

AsStabilizedValuePerspective As Stabilized Market Value: The “As Stabilized” market value of the AsStabilizedInterestAppraised estate of the property, as of AsStabilizedValueDate, is

One Million Fifty Thousand Dollars (AsStabilizedValue)

The market exposure time preceding AsStabilizedValueDate would have been AsStabilizedExposurePeriod and the estimated marketing period as of AsStabilizedValueDate is AsStabilizedMarketingTime.

Respectfully submitted,AppraisalFirmName

Appraiser1FirstName Appraiser2FirstName

Appraiser1LastName, Appraiser1SuffixAppraiser1CertificationState-Appraiser1CertificationNumber

Appraiser2LastName, Appraiser2SuffixAppraiser2CertificationState-Appraiser2CertificationNumber

TABLE OF CONTENTS

Summary of Important Facts and Conclusions................................................................................6Limiting Conditions and Assumptions............................................................................................9Scope of Work...............................................................................................................................11Market Area Analysis....................................................................................................................13

Market Area Location and Boundaries......................................................................................14Market Area and Property Characteristics.................................................................................14Location Map.............................................................................................................................15

Property Description......................................................................................................................16Site Plan/Tax Map/Survey.........................................................................................................18Improvements Plan....................................................................................................................23Subject Photographs..................................................................................................................24

Assessment and Taxes...................................................................................................................26Assessment Analysis.................................................................................................................26

Zoning............................................................................................................................................27Highest and Best Use.....................................................................................................................28Valuation Methodology.................................................................................................................29

Analyses Applied.......................................................................................................................29Cost Approach...............................................................................................................................30

Land Value.................................................................................................................................30Sales Comparison Approach – Land Valuation.............................................................................30

Land Comparables.....................................................................................................................31Comparables Map......................................................................................................................36Analysis Grid.............................................................................................................................36Comparable Land Sale Adjustments.........................................................................................38Sales Comparison Approach Conclusion – Land Valuation.....................................................38Cost Analysis.............................................................................................................................39Depreciation Analysis................................................................................................................39Cost Approach Conclusion........................................................................................................40

Sales Comparison Approach..........................................................................................................42Comparables..............................................................................................................................42Comparables Map......................................................................................................................47Analysis Grid.............................................................................................................................47Comparable Sale Adjustments...................................................................................................49Sales Comparison Approach Conclusion..................................................................................49

Income Approach...........................................................................................................................51Direct Capitalization Analysis...................................................................................................51Potential Gross Income (PGI)....................................................................................................51Space Types & Occupancy........................................................................................................51Rent Roll....................................................................................................................................52Recent Leases............................................................................................................................54Overall Rent Ranges..................................................................................................................54Major Tenants............................................................................................................................54Lease Expiration Schedule........................................................................................................54Market Rent...............................................................................................................................55Comparables Map......................................................................................................................59Analysis Grid.............................................................................................................................59Comparable Rent Adjustments..................................................................................................60Summary of Market Rent..........................................................................................................62

Potential Gross Income Summary.............................................................................................63Other Income.............................................................................................................................64Vacancy and Collection Loss....................................................................................................64Effective Gross Income.............................................................................................................64Expenses....................................................................................................................................64Net Operating Income................................................................................................................76Capitalization Rate.....................................................................................................................76Capitalization to Value..............................................................................................................79Direct Capitalization Analysis Conclusion................................................................................79Effective Gross Income Multiplier Analysis (EGIM)...............................................................80Net Income Multiplier Analysis (NIM).....................................................................................81

Stabilization Calculations..............................................................................................................82Final Reconciliation.......................................................................................................................85

Value Indications.......................................................................................................................85Value Conclusion.......................................................................................................................85

Certification Statement..................................................................................................................87Addenda.........................................................................................................................................88Glossary.........................................................................................................................................90

Summary of Important Facts and Conclusions

GENERALSubject: PropertyName

Address, City, County County, State, Zip

CapsuleDescription

Owner: OwnerName

Legal Description: Parcel1LegalDescription

Date of Report: ReportDate

Intended Use: The intended use is for ScopeIntendedUse.

Intended User(s): The ScopeIntendedUsers.

Assessment:Real Estate Assessment and Taxes

Tax ID Land Improvements Other Total City Rate

County Rate

Other Rate

Tax Rate Taxes

TaxID $350,000 $700,000 $35,000 $1,085,000 $10.00 $15.00 $5.00 $30.00 $32,550

Sale History: The subject has not sold in the last three years, according to public records.Or:The subject sold for MostRecentSalePriceon MostRecentSaleDate.MostRecentSaleComment

Prior to this transaction the subject sold for OlderSalePrice on OlderSaleDate. OlderSaleComment.

PreviousSalesComments

Your Footer Here Software by Narrative1.com 8

Current Listing/Contract(s):

The subject is not currently listed for sale, or under contract. Or:The subject was listed by ListingAgency for ListPrice on ListDate. ListingCommentAnd/OrThe subject is currently under option for OptionPrice. The option date is OptionDate. OptionComment.And/orThe subject is under contract for sale for ContractPrice.Contract Date: ContractDateFinancing Terms: ContractFinancingBuyer: ContractGranteeContractComment

Land:Land Summary

Parcel ID Gross Land Area (Acres)

Gross Land Area (Sq Ft)

Usable Land Area (Acres)

Usable Land Area (Sq Ft)

Topography Shape

Parcel 1 2.00 87,120 2.00 87,120 Level Site shape

Improvements:Building Summary

Building Name/ID

Year Built Condition Number of Stories

Gross Building Area

Rentable Area Number of Units

Building 1 1988 Good 2.0 12,995 12,500 14

Notes:

Zoning: Zoning

Highest and Best Use of the Site:

Parcel1HBUSite

Highest and Best Useas Improved:

Building1HBU

Type of Value: TypeOfValue

VALUE INDICATIONSLand Value: LandValueCost Approach: CostApproachV

alueSales Comparison Approach:

SalesApproachValue


Income Approach:Direct Capitalization

IncomeApproachValue

EGIM Analysis EGIMAnalysisValue

NIM Analysis NIMAnalysisValue

Reconciled Value(s): As Is As Complete As StabilizedValue Conclusion(s) AsIsValue AsCompleteValu

eAsStabilizedValue

Effective Date (s) AsIsValueDate AsCompleteValueDate

AsStabilizedValueDate

Property Rights AsIsInterestAppraised

AsCompleteInterestAppraised

AsStabilizedInterestAppraised


Limiting Conditions and AssumptionsAcceptance of and/or use of this report constitutes acceptance of the following limiting conditions and assumptions; these can only be modified by written documents executed by both parties.

This appraisal is to be used only for the purpose stated herein. While distribution of this appraisal in its entirety is at the discretion of the client, individual sections shall not be distributed; this report is intended to be used in whole and not in part.

No part of this appraisal, its value estimates or the identity of the firm or the appraiser(s) may be communicated to the public through advertising, public relations, media sales, or other media.

All files, work papers and documents developed in connection with this assignment are the property of AppraisalFirmName. Information, estimates and opinions are verified where possible, but cannot be guaranteed. Plans provided are intended to assist the client in visualizing the property; no other use of these plans is intended or permitted.

No hidden or unapparent conditions of the property, subsoil or structure, which would make the property more or less valuable, were discovered by the appraiser(s) or made known to the appraiser(s). No responsibility is assumed for such conditions or engineering necessary to discover them. Unless otherwise stated, this appraisal assumes there is no existence of hazardous materials or conditions, in any form, on or near the subject property.

Unless otherwise stated in this report, the existence of hazardous substances, including without limitation asbestos, polychlorinated biphenyl, petroleum leakage, or agricultural chemicals, which may or may not be present on the property, was not called to the attention of the appraiser nor did the appraiser become aware of such during the appraiser’s inspection. The appraiser has no knowledge of the existence of such materials on or in the property unless otherwise stated. The appraiser, however, is not qualified to test for such substances. The presence of such hazardous substances may affect the value of the property. The value opinion developed herein is predicated on the assumption that no such hazardous substances exist on or in the property or in such proximity thereto, which would cause a loss in value. No responsibility is assumed for any such hazardous substances, nor for any expertise or knowledge required to discover them.

Unless stated herein, the property is assumed to be outside of areas where flood hazard insurance is mandatory. Maps used by public and private agencies to determine these areas are limited with respect to accuracy. Due diligence has been exercised in interpreting these maps, but no responsibility is assumed for misinterpretation.

Good title, free of liens, encumbrances and special assessments is assumed. No responsibility is assumed for matters of a legal nature.


Necessary licenses, permits, consents, legislative or administrative authority from any local, state or Federal government or private entity are assumed to be in place or reasonably obtainable.

It is assumed there are no zoning violations, encroachments, easements or other restrictions which would affect the subject property, unless otherwise stated.

The appraiser(s) are not required to give testimony in Court in connection with this appraisal. If the appraisers are subpoenaed pursuant to a court order, the client agrees to pay the appraiser(s) AppraisalFirmName’s regular per diem rate plus expenses.

Appraisals are based on the data available at the time the assignment is completed. Amendments/modifications to appraisals based on new information made available after the appraisal was completed will be made, as soon as reasonably possible, for an additional fee.

Americans with Disabilities Act (ADA) of 1990A civil rights act passed by Congress guaranteeing individuals with disabilities equal opportunity in public accommodations, employment, transportation, government services, and telecommunications. Statutory deadlines become effective on various dates between 1990 and 1997. AppraisalFirmName has not made a determination regarding the subject’s ADA compliance or non-compliance. Non-compliance could have a negative impact on value, however this has not been considered or analyzed in this appraisal.


Scope of WorkAccording to the Uniform Standards of Professional Appraisal Practice, it is the appraiser’s responsibility to develop and report a scope of work that results in credible results that are appropriate for the appraisal problem and intended user(s). Therefore, the appraiser must identify and consider:

● the client and intended users; ● the intended use of the report; ● the type and definition of value; ● the effective date of value; ● assignment conditions; ● typical client expectations; and ● typical appraisal work by peers for similar assignments.

This appraisal is prepared for ClientSalutation ClientFirstName ClientLastName, ClientTitle ClientCompanyName. The problem to be solved is ScopeProblemToBeSolved. The intended use is for ScopeIntendedUse. This appraisal is intended for the use of ScopeIntendedUsers.

SCOPE OF WORKReport Type: ReportTypeDescription

Property Identification: ScopePropertyID

Inspection: ScopeInspection

Market Area and Analysis of Market Conditions:

ScopeMarketAnalysis

Highest and Best Use Analysis: ScopeOfHBU

Type of Value: TypeOfValueValuation Analyses

Cost Approach: A cost approach ScopeCost applied as ScopeCostLogic

Sales Comparison Approach: A sales approach ScopeSales applied as ScopeSalesLogic

Income Approach: An income approach ScopeIncome applied as ScopeIncomeLogic


Hypothetical Conditions: HypotheticalConditions HypotheticalConditions2 HypotheticalConditions3

Extraordinary Assumptions: ExtraordinaryAssumptions ExtraordinaryAssumptions2 ExtraordinaryAssumptions3

Information Not Available: ScopeInfoNotAvailable ScopeInfoNotAvailable2 ScopeInfoNotAvailable3

Comments


Market Area AnalysisArea Description & Boundaries

Area & Property Use CharacteristicsUp Dn

Location Urban Suburban Rural Population TrendBuild Up Over 75% 25% to 75% Under 25% Employment TrendBuilt Up Fully Dev. Rapid Steady Slow Personal Income LevelProperty Values Increasing Stable Declining Retail SalesDemand/Supply Shortage In Balance Over Supply New ConstructionVacancy Trend Increasing Stable Declining Vacancy TrendChange in Economic Base Likely Unlikely Taking Place Rental Demand

Land Use Trends

Present Land Use Under In Bal. O ver Vacancy15% 1 Family 10%45% Retail 10%20% Multifamily 10%

5% Office 10%5% Industrial 10%

10% Vacant100%

Change in Land Use LikelyNot LikelyTaking Place

Age Range for Subject Property Type to 2009Rent Range for Subject Property Type to $12.00 / square foot

Adjacent Property Use

$12.00

Adjacent property uses inlcude ___

The neighborhood boundaries extend from ____ to ___ on a north south axis and from ___ to ____ on an east west axis.

Stbl

Supply/Demand

Land uses in the neighborhood consist of ___

1970

1 Family15%

Retail45%

Multifamily20%

Office5%

Industrial5%

Vacant10%

Land Use


Optional narrative headings – delete if using table above

Market Area Location and BoundariesDescribe

Market Area and Property CharacteristicsDescribe

Population TrendsDescribe/Analyze

Housing TrendsDescribe/Analyze

Income TrendsDescribe/Analyze

Major EmployersDescribe/Analyze

Unemployment TrendsDescribe/Analyze

Land Use TrendsDescribe/Analyze


Location Map


Property DescriptionCapsuleDescription

Multiple parcels table – delete if only one parcelLand Summary

Parcel ID Gross Land Area (Acres)

Gross Land Area (Sq Ft)

Usable Land Area (Acres)

Usable Land Area (Sq Ft)

Topography Shape

Parcel 1 2.00 87,120 2.00 87,120 Level Site shape

SITELocation: Parcel1Location

Current Use of the Property:

Parcel1CurrentUse

Site Size: Total: Parcel1Acres acres; Parcel1SF square feet

Usable: Parcel1UsableAcres acres; Parcel1UsableSF square feetParcel1UsableLandComments

Shape: Parcel1Shape

Frontage/Access: The subject property has Parcel1Access access with frontage as follows: Parcel1PrimaryFrontageStreetName:

Parcel1PrimaryStreetFrontage feet Parcel1SecondaryFrontageStreetName:

Parcel1SecondaryStreetFrontage feetThe site has an average depth of Parcel1AverageDepth feet. It Parcel1CornerLot a corner lot.

Visibility: Parcel1Visibility

Topography: Parcel1Topography

Soil Conditions: Parcel1SoilConditions

Utilities: Electricity: Parcel1ElectricitySewer: Parcel1SewerWater: Parcel1Water Natural Gas: Parcel1GasUnderground Utilities: Parcel1UndergroundUtilitiesAdequacy: Parcel1UtilitesAdequacy

Site Improvements: Parcel1StreetLights


Parcel1Sidewalk Parcel1CurbGutter Parcel1Landscaping

Flood Zone: The subject is located in an area mapped by the Federal Emergency Management Agency (FEMA). The subject is located in FEMA flood zone Parcel1FloodZone, which Parcel1FloodZoneIsIsNot classified as a flood hazard area.

FEMA Map Number: Parcel1FEMAMapNumber FEMA Map Date: Parcel1FEMAMapDate

Parcel1FloodZoneComments

Wetlands/Watershed: Parcel1WetlandsWatershedComments

Environmental Issues: Parcel1EnvironmentalIssues

Encumbrance / Easements:

Parcel1EncumbranceorEasement

Site Comments: Parcel1Comments

Insert Site #2 here (How?)


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Site Plan/Tax Map/Survey


IMPROVEMENTS DESCRIPTIONDevelopment/Property Name:

PropertyName

Property Type: PropertyType

Overview: CapsuleDescription

Multiple buildings table, delete if only one building Building Summary

Building Name/ID

Year Built Condition Number of Stories

Gross Building Area

Rentable Area Number of Units

Building 1 1988 Good 2.0 12,995 12,500 14

Notes:

GENERAL - BUILDING1IDBuilding Identification:

Building1ID

Building Description: Building1Description

Building Class: Building1OfficeBuildingClass

Construction: Building1Construction

Construction Quality: Building1ConstructionQuality

Year Built: Building1YearBuilt

Renovations: Building1Renovations

Effective Age: Building1EffectiveAge years

Remaining Useful Life:

Building1RemainingUsefulLife

Condition: Building1Condition

Appeal/Appearance: Building1AppealAppearance

Areas, Ratios & Numbers:

Number of Stories: Building1No.ofStoriesGross Building Area: Building1GBAGross Leasable Area: Building1GLA Rentable Area: Building1RANumber of Units: Building1No.ofUnits

Building Efficiency Ratio: Building1BuildingEfficiencyRatio


FOUNDATION, FRAME & EXTERIOR - BUILDING1IDFoundation: Building1Foundation

Basement/Sublevels: Building1BasementSize square feet; Building1NumberofBasementSublevels sublevel(s)

Basement Use: --

Structural Frame: Building1Frame

Column Spacing: Building1ColumnSpacing Feet

Bay Dimension: Building1TypicalBayDepth

Exterior: Building1ExteriorWalls

Windows: Building1Windows

Roof/Cover: Building1RoofType / Building1RoofCover

Service Access/ Overhead Doors:

The building is served by Building1No.ofTruckDoors overhead doors; Building1NumberOfTruckDoorLevelers with levelers.

Other:

INTERIOR - BUILDING1IDInterior Layout: Building1FloorPlanLayout

Floor Cover: Building1FloorCovering

Walls: Building1InteriorWalls

Ceilings & Ceiling Height:

Building1CeilingCover / Building1CeilingHeight

Lighting: Building1InteriorLighting

Restrooms: Building1Restrooms

Other:

MECHANICAL SYSTEMS - BUILDING1ID


Heating: Building1Heating

Cooling: Building1Cooling

Electrical: Building1Electrical

Plumbing Condition: Building1PlumbingCondition

Sprinkler: Building1FireSprinkler

Elevators/Escalators: Building1No.ofElevators / Building1No.ofEscalators

Security: Building1Security

Other:

Comments, Building1ID:

Building1Comments

Insert Building #2 Here (How?)

PARKINGParking Type and Number of Spaces:

Type: BuildingsParkingTypeSpaces: BuildingsParkingSpacesCondition: BuildingsParkingLotCondition

Parking Ratio: BuildingsParkingRatio.

Other:

PROPERTY ANALYSISDesign & Functional Utility:

BuildingsOverallDesignAndFunctionalUtility

Deferred Maintenance: BuildingsDeferredMaintenance

Capital Improvements: BuildingsPlannedCapitalImprovements

Other:

Comments: BuildingsOverallPropertyDescriptionComments


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Americans With Disabilities ActPlease reference the Limiting Conditions and Assumptions section of this report on page 12.

Hazardous SubstancesPlease reference the Limiting Conditions and Assumptions section of this report on page 12.


Improvements Plan


Subject Photographs

Picture Here

Description Here

Picture Here

Description Here


Picture Here

Description Here

Picture Here

Description Here


Assessment and Taxes

Taxing Authority AssessmentParcel1TaxingAuthority

Assessment Year AssessmentParcel1TaxYear

Real Estate Assessment and TaxesTax ID Land Improvements Other Total City

RateCounty

RateOther

RateTax Rate Taxes

TaxID $350,000 $700,000 $35,000 $1,085,000 $10.00 $15.00 $5.00 $30.00 $32,550

Real Estate Assessment AnalysisTax ID Per SF Per Acre Total Equalization

RatioImplied Value

TaxID $83.49 $542,500 $1,085,000 100.0% $1,085,000

Notes:

CommentsAssessmentComments

Assessment AnalysisWe have analyzed the assessment and corresponding taxation of competitive properties in the marketplace as a test of reasonableness compared to the subject’s current assessment and taxation.

Real Estate Tax Analysis

Name Property Type Tax IDAssessment

Year TaxesOverall Comparison

5a Bridge Street Garden/Low-Rise TaxID 2011 $119,140 $0.00 $0 Similar1 Bridge Street Mixed Use TaxID 2011 $12,478 Similar4 Bridge Street Mixed Use TaxID 2011 $12,478 Similar12 Bridge Street Mixed Use 0 2011 $25,876 Similar4 Bridge Street Mixed Use TaxID 2011 $12,478 Similar5a Bridge Street Garden/Low-Rise TaxID 2011 $119,140 Similar

Notes:

Analysis


ZoningLAND USE CONTROLS

Zoning Code Zoning

Zoning Description ZoningDescription

Zoning Density/FAR BuildingsFAR

Actual Density of Use Density

Current Use Legally Conforming ZoningLegallyConforming

Zoning Change Likely ZoningChangeLikely

Zoning Change Description ZoningChangeDescription

Set Back Distance ZoningSetBackDistance

Side Yard Distance ZoningSideYardDistance

Zoning Comments ZoningComments


Highest and Best UseHighest and best use may be defined as the reasonably probable and legal use of vacant land or improved property, which is physically possible, appropriately supported, financially feasible, and that results in the highest value.

1. Legally Permissible: What uses are permitted by zoning and other legal restrictions?

2. Physically Possible: To what use is the site physically adaptable?

3. Financially Feasible: Which possible and permissible use will produce any net return to the owner of the site?

4. Maximally Productive. Among the feasible uses which use will produce the highest net return, (i.e., the highest present worth)?

Highest and Best Use of the SiteThe highest and best use of the site, as vacant, is for Parcel1HBUSite.

Parcel1HBUSiteComment

Highest and Best Use as ImprovedThe highest and best use of the subject as improved Building1HBU.

Building1HBUComment


Valuation MethodologyThree basic approaches may be used to arrive at an estimate of market value. They are:

1. The Cost Approach2. The Income Approach3. The Sales Comparison Approach

Cost ApproachThe Cost Approach is summarized as follows:

Cost New- Depreciation+ Land Value= Value

Income ApproachThe Income Approach converts the anticipated flow of future benefits (income) to a present value estimate through a capitalization and or a discounting process.

Sales Comparison ApproachThe Sales Comparison Approach compares sales of similar properties with the subject property. Each comparable sale is adjusted for its inferior or superior characteristics. The values derived from the adjusted comparable sales form a range of value for the subject. By process of correlation and analysis, a final indicated value is derived.

Final ReconciliationThe appraisal process concludes with the Final Reconciliation of the values derived from the approaches applied for a single estimate of market value. Different properties require different means of analysis and lend themselves to one approach over the others.

Analyses AppliedA cost analysis was considered and ScopeCost developed because ScopeCostLogic

A sales comparison analysis was considered and ScopeSales developed because ScopeSalesLogic

An income analysis was considered and ScopeIncome developed because ScopeIncomeLogic


Cost Approach The Cost Approach is based on the principle of substitution - that a prudent and rational person would pay no more for a property than the cost to construct a similar and competitive property, assuming no undue delay in the process. The Cost Approach tends to set the upper limit of value before depreciation is considered. The applied process is as follows:

Estimate the land value according to its Highest and Best Use. AuthorWeI have used the Sales Comparison Approach; the process is as follows:

o Comparable sales, contracts for sale and current offerings are researched and documented.

o Each comparable is analyzed and adjusted to equate with the subject property.

o The value indication of each comparable is analyzed and the data reconciled for a land value indication.

Estimate the replacement cost of the building and site improvements.

Estimate the physical, functional and/or external depreciation accrued to the improvements.

Sum the depreciated value of the improvements with the value of the land for an indication of value.

Land ValueThe subject’s land value has been developed via the sales comparison approach.

Sales Comparison Approach – Land ValuationThe Sales Comparison Approach is based on the premise that a buyer would pay no more for a specific property than the cost of obtaining a property with the same quality, utility, and perceived benefits of ownership. It is based on the principles of supply and demand, balance, substitution and externalities. The following steps describe the applied process of the Sales Comparison Approach.

The market in which the subject property competes is investigated; comparable sales, contracts for sale and current offerings are reviewed.

The most pertinent data is further analyzed and the quality of the transaction is determined.

The most meaningful unit of value for the subject property is determined.


Each comparable sale is analyzed and where appropriate, adjusted to equate with the subject property.

The value indication of each comparable sale is analyzed and the data reconciled for a final indication of value via the Sales Comparison Approach.

Land ComparablesAuthorWeI have researched NumberOfLandCompsUsed comparables for this analysis; these are documented on the following pages followed by a location map and analysis grid. All sales have been researched through numerous sources, inspected and verified by a party to the transaction.

Comparable Address Date Price Per Land Unit Land UnitsComparable City Price Price per Acre Acres

Subject Subject Address 1/1/11 $0 20.00

Subject Subject City $0 $0 2.00

1 Comp G Address 1/11/07 $27,879 33.00

1 Comp G City $920,000 $334,545 2.75

2 Comp E Address 4/14/07 $20,370 27.00

2 Comp E City $550,000 $333,333 1.65

3 Comp C Address 7/4/07 $0 26.00

3 Comp C City $750,000 $0 2.42

Notes

Land Sale Comp ID #10 notes here. Land Sale Comp ID #10 notes here. Land Sale Comp ID #10 notes here. Land Sale Comp ID #10 notes here.




ID 9 Date 1/11/07Address Comp G Address Price $920,000City Comp G City Price per Acre $334,545State Comp G State Financing CashTax ID Comp G Tax ID Property Rights Fee SimpleGrantor Comp G Grantor Days on Market 102Grantee Comp G Grantee Verification Source Broker, Assessor, DeedLegal Description Comp G Legal Description

Acres 2.8 Topography LevelLand SF 119,790 Zoning City CommercialRoad Frontage 225 Flood Zone NoneShape Rectangular Encumbrance or Easement NoneUtilities Municipal utilit ies Environmental Issues None

GBA 0 Condition 0GLA 0 Ancillary Buildings 0No. of Stories 0 ParkingYear Built 0

Improvements

Transaction

Land Comparable 1

Site

Comp G comments here. Comp G comments here. Comp G comments here. Comp G comments here. Comp G comments here. Comp G comments here. Comp G comments here. Comp G comments here. Comp G comments here. Comp G comments here. Comp G comments here. Comp G comments here. Comp G comments here. Comp G comments here. Comp G comments here. Comp G comments here. Comp G comments here. Comp G comments here. Comp G comments here. Comp G comments here. Comp G comments here.

Notes


ID 10 Date 4/14/07Address Comp E Address Price $550,000City Comp E City Acre Unit Price $333,333State Comp E State Financing CashTax ID Comp C Tax ID Property Rights Fee SimpleGrantor Comp E Grantor Days on Market 102Grantee Comp E Grantee Verification Source Broker, Assessor, DeedLegal Description Comp C Legal Description

Acres 1.7 Topography SlopingLand SF 71,874 Zoning City CommercialRoad Frontage 225 Flood Zone NoneShape Rectangular Encumbrance or Easement NoneUtilities Municipal utilit ies Environmental Issues None


Land Comparable 2

Site

Transaction

Notes

Improvements

Comp E comments here. Comp E comments here. Comp E comments here. Comp E comments here. Comp E comments here. Comp E comments here. Comp E comments here. Comp E comments here. Comp E comments here. Comp E comments here. Comp E comments here. Comp E comments here. Comp E comments here. Comp E comments here. Comp E comments here. Comp E comments here. Comp E comments here. Comp E comments here. Comp E comments here. Comp E comments here. Comp E comments here.


ID 11 Date 7/4/07Address Comp C Address Price $750,000City Comp C City Acre Unit Price $309,917State Comp C State Financing CashTax ID Comp C Tax ID Property Rights Fee SimpleGrantor Comp C Grantor Days on Market 102Grantee Comp C Grantee Verification Source Broker, Assessor, DeedLegal Description Comp C Legal Description

Acres 2.4 Topography Level with pocket of wetland near frontage - see notes.Land SF 105,415 Zoning City Commercial

Road Frontage 225 Flood Zone NoneShape Rectangular Encumbrance or Easement NoneUtilities Municipal utilit ies Environmental Issues None


Land Comparable 3

Comp C comments here. Comp C comments here. Comp C comments here. Comp C comments here. Comp C comments here. Comp C comments here. Comp C comments here. Comp C comments here. Comp C comments here. Comp C comments here. Comp C comments here. Comp C comments here.

Improvements

Site

Notes

Transaction


To insert more comp sheets:

By default, the Narrative1 template displays three comps for Land, Sales and Leases. To add more:

1. Create a new blank page in Word 2. Right-click and select Fields and Tables (or use the Narrative1 menu from Word’s

main menu.)3. Find the comps in the list, select it and click insert


Comparables Map

Analysis GridThe above sales have been analyzed and compared with the subject property. AuthorWeI have considered adjustments in the areas of:

� Property Rights Sold� Financing� Conditions of Sale

� Market Trends� Location� Physical Characteristics

On the following page is a sales comparison grid displaying the subject property, the comparables and the adjustments applied.


AddressCity

StateDatePrice

AcresAcre Unit Price

Property RightsFee Simple 0.0%

Fee Simple 0.0%

Fee Simple 0.0%

Financing Cash 0.0% Cash 0.0% Cash 0.0%

Conditions of Sale Normal 0.0% Normal 0.0% Normal 0.0%Expenditures After Sale

Market Trends Through 1/21/10 0.0%

Location% Adjustment$ Adjustment

Acres% Adjustment$ Adjustment

Topography% Adjustment$ Adjustment

Shape% Adjustment$ Adjustment

Utilities% Adjustment$ Adjustment

Zoning% Adjustment$ Adjustment

Net AdjustmentsGross Adjustments

0.0%

0% 0%

$309,917

0.0%0.0%

0.0%0.0%0.0%0.0%

$333,333$334,545Adjusted Acre Unit Price

0%$0

0%

$00%

Level

$0

$0

Rectangular0%

Level

Electricity,

Site shape

Level with

Municipal Municipal

0%$0

0% 0%Rectangular

$0 $0

0%0%

$0

0%

$0

1.650%2.42

$0

2.00

Good

$0

2.750%

GoodGood0%

Adjusted Acre Unit Price $334,545

$309,917$333,333$0

2.75

Conventional

Fee SimpleTransaction Adjustments

2.00$0 $334,545

0.0%Adjusted Acre Unit Price $334,545

Cash

0.0%

$0

2.42$309,917$333,333

1.65$750,000

Comp C StateComp G State

Comp G Comp E Comp C Comp G City Comp C CityComp E City

Land Analysis Grid Comp 1 Comp 2Subject

Comp E StateSubject StateSubject City

Comp 3

Good$309,917

$0

7/4/2007

$333,333

$0

Sloping

$0

Rectangular

$0

$0

City 0%

City Zoning Code City

Municipal

$0

0%

$0

$0

0%

1/21/2010$0

4/14/20071/11/2007$550,000$920,000


Comparable Land Sale Adjustments

Property Rights Describe/Analyze

Financing Describe/Analyze

Conditions of Sale Describe/Analyze

Economic Trends Describe/Analyze

LandGridAdj1 Describe/Analyze





Sales Comparison Approach Conclusion – Land Valuation

Number of Comparables: 3 % Δ0%0%0%

$333,333 0%$333,333 $750,000 acres

High:$309,917

Average: $325,932

Land Value Ranges & Reconciled Value

Low:$334,545

Unadjusted Adjusted

Six Hundred Thousand Dollars

Subject Size:$300,000

Reconciled Final Value:$600,000

2.00Reconciled Value/Unit Value:

Indicated Value:$600,000

$309,917$334,545$325,932

Meadian: $333,333


All of the value indications have been considered, and in the final analysis, comparables <#>, <#> and <#>, have been given most weight in arriving at AuthorMyOurLowerCase final reconciled per LandGridUnitOfComparison value of LandGridReconciledValue.

Cost AnalysisThe next step in the Cost Approach is to estimate the replacement cost of the buildings and site improvements. The replacement cost of the subject site and building improvements are based on Cost1Source, a nationally recognized cost service.

Soft CostsWhere appropriate, AuthorWeILowerCase have included the following soft costs:

EngineeringEngineering has been applied at Cost1EngineeringPercent of Cost1EngineeringPercentType.

Architectural Architectural has been applied at Cost1ArchitecturalPercent of Cost1ArchitecturalPercentType.

Permits and LegalPermitting and legal costs have been applied at Cost1PermitsAndLegal.

Marketing & Leasing CommissionsIt is often appropriate to add marketing expenses and leasing commissions necessary to bring an income producing property to stabilized occupancy to the cost schedule. In this case, these costs have been estimated at Cost1Leasing.

Developer's ProfitThis factor reflects the profit necessary for the developer to undertake the management, responsibility and risks of construction associated with the subject property. Current valuation theory states that the four components that create value are land, labor, capital and coordination. Developer's profit as used in the Cost Approach reflects the coordination component of value. Typically, developer's profit runs 10% to 20%: AuthorWeILowerCase have computed developer's profit at Cost1DevelopersProfit of construction costs.

Depreciation AnalysisDepreciation may be defined as any loss of value from any cause. There are three general areas of depreciation: physical deterioration, functional obsolescence and external obsolescence. Depreciation may be curable or incurable, the test being that money spent to cure the depreciation be gained in value. If the depreciation costs more to fix than will be gained in value, then the depreciation is considered incurable.


Physical DeteriorationThis results from deterioration from aging and use. This type of depreciation may be curable or incurable.

Functional ObsolescenceThis results from a lack of utility or desirability due to design or market perception of the improvements. This type of depreciation may be curable or incurable.

External Obsolescence This is due to circumstances outside the property itself, such as industry, demographic and economic conditions or an undesirable proximate use. This type of depreciation is rarely curable.

Depreciation Accrued to the Subject

Component Eff. Age Life Percent AmountPhysical Depreciation: Building 20 70 29% $395,553

Physical Depreciation: Site 15 20 75% $41,250Functional Obsolescence Building …………………………………………………………………5% $69,222

External Obsolescence Building …………………………………………………………………0% $0$506,025$933,411

Depreciation: Section 1 of 1

Total DepreciationDepreciated Value of Improvements

Analysis<Depreciation analysis>

Cost Approach ConclusionBased on the analysis detailed on the following page, as of AsIsValueDate AuthorWeILowerCase have reconciled to a cost approach value of:

CostApproachValue

One Million Four Hundred Thirty Thousand Dollars


Cost Source:No. of Stories Multiplier: 1.000 Local Multiplier: 1.000Height/Story Multiplier: 1.000 Current Cost Multiplier: 1.000

Perimeter Multiplier: 1.000 Combined Multipliers: 1.000

Item Unit Type Cost Quantity Multiplier TotalBuilding Sq. Ft. $85.00 12,995 1.000 $1,104,575

1.000 $01.000 $01.000 $01.000 $0

Total Building Improvement Costs $1,104,575$85.00

Item Unit Type Cost Quantity TotalSite Preparation & Improvements Lump Sum $50,000 1 $50,000

$0$0$0$0

$50,000$1,154,575

$88.85

Item TotalEngineering …………………………………………………………………6.0% $66,275

Architectural …………………………………………………………………5.0% $57,729Permits & Legal ………………………………………………………………………………………………………..$10,000

Leasing ………………………………………………………………………………………………$20,000Total Soft Costs $154,003

Insurable Value (Excludes Site Improvements, related Soft Costs and Developer's Profit) $1,256,078

$1,308,57810.0% $130,858

$1,439,436$110.77

Component Eff. Age Life Percent AmountPhysical Depreciation: Building 20 70 29% $395,553

Physical Depreciation: Site 15 20 75% $41,250Functional Obsolescence Building …………………………………………………………………5% $69,222

External Obsolescence Building …………………………………………………………………0% $0$506,025$933,411

$71.83

Cost Section 2 ……………………………………………………………………………………..$0 Cost Section 3 ……………………………………………………………………………………..$0

Total Insurable Value (Excludes Site Improvements, related Costs & Developer's Profit) $1,256,078

Land Value ………………………………………………………………………………………$500,000Other …………………………………………………………………………………$0

$1,433,411$1,430,000

$110.04

Additional Cost Sections

Depreciation: Section 1 of 1

Price per SF Gross Building Area

Cost Per Square Foot Gross Building Area

Price per SF Gross Building AreaRounded

Cost Approach Value Indication

Land Value

% of Building Cost

Building Improvements

Subtotal: Building & Site Costs

Total DepreciationDepreciated Value of Improvements

Total Cost

Total Site Improvement Costs

Percent Type

Developer's Profit

% Bld. & Site Cost

Marshall & Swift

Site Improvements

# 13: Stores & CommercialsMarshall & Swift

Soft Costs



Subtotal: Building, Site & Soft CostsTotal Costs


Sales Comparison ApproachThe Sales Comparison Approach is based on the premise that a buyer would pay no more for a specific property than the cost of obtaining a property with the same quality, utility, and perceived benefits of ownership. It is based on the principles of supply and demand, balance, substitution and externalities. The following steps describe the applied process of the Sales Comparison Approach.

The market in which the subject property competes is investigated; comparable sales, contracts for sale and current offerings are reviewed.

The most pertinent data is further analyzed and the quality of the transaction is determined.

The most meaningful unit of value for the subject property is determined.

Each comparable sale is analyzed and where appropriate, adjusted to equate with the subject property.

The value indication of each comparable sale is analyzed and the data reconciled for a final indication of value via the Sales Comparison Approach.

ComparablesAuthorWeI have researched NumberOfCompsUsed comparables for this analysis; these are documented on the following pages followed by a location map and analysis grid. All sales have been researched through numerous sources, inspected and verified by a party to the transaction.

Comparable Address Grantor Price Price Per SF Year Built

Comparable City Grantee Date GBA ConstructionSubject Subject Address MRS Grantor $1,250,000 $37.88 1988

Subject Subject City Owner Name 1/1/11 12,995 Steel and masonry

1 Comp A Address Comp A Grantor $1,675,000 $85.90 1995

1 Comp A City Comp A Grantee 7/11/07 19,500 Class C

2 Comp B Address Comp B Grantor $1,725,000 $86.25 1995

2 Comp B City Comp B Grantee 7/12/06 20,000 Class C

3 Comp C Address Comp C Grantor $1,510,000 $87.79 1995

3 Comp C City Comp C Grantee 7/14/07 17,200 Class C

Comp ID #6 notes here. Comp ID #6 notes here. Comp ID #6 notes here. Comp ID #6 notes here. Comp ID #6 notes here.

Notes

Comp ID #5 notes here. Comp ID #5 notes here. Comp ID #5 notes here. Comp ID #5 notes here. Comp ID #5 notes here. Comp ID #5 notes here.

Comp ID #6 notes here. Comp ID #6 notes here. Comp ID #6 notes here. Comp ID #6 notes here. Comp ID #6 notes here. Comp ID #6 notes here.


ID 5 Date 7/11/07Address Comp A Address Price $1,675,000City Comp A City Price Per SF $85.90State Comp A State Transaction Type ClosedTax ID Comp A Tax ID Financing CashGrantor Comp A Grantor Property Rights Fee SimpleGrantee Comp A Grantee Days on Market 100Legal Description Comp A Legal Description Verification Source Broker, Assessor, Deed



GBA 19,500 PGI $200,000Rentable Area 17,300 EGI $190,000No. of Units 22 Expense Ratio 29.00%Year Built 1995 NO I $135,000Renovations $0 Cap Rate 8.06%Condition Good EGIM 8.38

NotesComp A comments here. Comp A comments here. Comp A comments here. Comp A comments here. Comp A comments here. Comp A comments here. Comp A comments here. Comp A comments here. Comp A comments here. Comp A comments here. Comp A comments here. Comp "A" comment

Transaction

Comparable 1

Improvements & Financial Data

Site


ID 6 Date 7/12/06Address Comp B Address Price $1,725,000City Comp B City Price Per SF $86.25State Comp B State Transaction Type ClosedTax ID Comp B Tax ID Financing CashGrantor Comp B Grantor Property Rights Fee SimpleGrantee Comp B Grantee Days on Market 101Legal Description Comp B Legal Description Verification Source Broker, Assessor, Deed




Comparable 2


Site

Transaction

Comp B comments here. Comp B comments here. Comp B comments here. Comp B comments here. Comp B comments here. Comp B comments here. Comp B comments here. Comp B comments here. Comp B comments here. Comp B comments here. Comp B comments here. Comp B commen

Notes


ID 7 Date 7/14/07Address Comp C Address Price $1,510,000City Comp C City Price Per SF $87.79State Comp C State Transaction Type ClosedTax ID Comp C Tax ID Financing CashGrantor Comp C Grantor Property Rights Fee SimpleGrantee Comp C Grantee Days on Market 102Legal Description Comp C Legal Description Verification Source Broker, Assessor, Deed




Notes

Comparable 3

Transaction

Site

Comp C comments here. Comp C comments here. Comp C comments here. Comp C comments here. Comp C comments here. Comp C comments here. Comp C comments here. Comp C comments here. Comp C comments here. Comp C comments here. Comp C comments here. Comp C comments here.



To insert more comp sheets:

By default, the Narrative1 template displays three comps for Land, Sales and Leases. To add more:

4. Create a new blank page in Word 5. Right-click and select Fields and Tables (or use the Narrative1 menu from Word’s

main menu.)6. Find the comps in the list, select it and click insert


Comparables Map

Analysis GridThe above sales have been analyzed and compared with the subject property. AuthorWeI have considered adjustments in the areas of:

� Property Rights Sold� Financing� Conditions of Sale

� Market Trends� Location� Physical Characteristics

On the following page is a sales comparison grid displaying the subject property, the comparables and the adjustments applied.


AddressCity

StateDatePriceGBA

GBA Unit Price

Property Rights Fee Simple 0.0% Fee Simple 0.0% Fee Simple 0.0%Financing Cash 0.0% Cash 0.0% Cash 0.0%

Conditions of Sale Normal 0.0% Normal 0.0% Normal 0.0%Expenditures After Sale

Market Trends Through 1/21/10 0.0%


GBA% Adjustment$ Adjustment

Year Built% Adjustment$ Adjustment

Acres% Adjustment$ Adjustment

Road Frontage% Adjustment$ Adjustment

% Adjustment$ Adjustment


0.0%

Good

0.0%

0%$0.00

1.9

$0.00

2.0

$0.00

2.0

$0.00

0%$0.00 $0.00

$0.00

2.0

0%

0%252

0%

$0.00

$0.00

0%Good$87.79

$87.79

$1,510,00017,200

Comp C AddressComp 3

Comp B AddressComp 1 Comp 2

Cash

Comp C CityComp B State Comp C StateComp B City

$86.25

$86.25$96.19

$85.90

$85.90

Conventional

$0

Comp A StateSubject State

Comp A AddressSubject City

Transaction Adjustments

$86.25$0

Adjusted GBA Unit Price

Leased Fee

Average

12,995

Subject AddressAnalysis Grid

Comp A City

Adjusted GBA Unit Price0.0%

$85.90

0%0%Good

12,995 19,500 20,000 17,200

$0.00$0.00

0% 0% 0%

1995

$0.00

0%1988

$0.00

19950%

1995

210

$0.000%

0%$0.00

310 200

$0.000%

$0.00

0%$0.00

0%

$87.79$85.90Adjusted GBA Unit Price

0.0%0.0%0.0% 0.0%

0.0%0.0%$86.25

$1,725,0007/11/2007 7/14/20077/12/2006$1,675,000

1/21/2010$1,250,000

19,500 20,000

$0

$87.79


Comparable Sale Adjustments

Property Rights Describe/Analyze

Financing Describe/Analyze

Conditions of Sale Describe/Analyze


SalesGridAdj1 Describe/Analyze





Sales Comparison Approach Conclusion

3 % Δ0%0%0%

$103.50 $103.50 0%$103.50 $1,812,000.00 gba

Reconciled Final Value:Indicated Value:

100,000

Value Ranges & Reconciled Value

$105.35Low:

One Million Twenty Five Thousand Dollars

Average: $101.69

$1,025,000

Subject Size:Reconciled Value/Unit Value: $82.00

$8,200,000

$96.22High:

Number of Comps: Unadjusted Adjusted

Median:

$96.22$105.35$101.69


All of the value indications have been considered, and in the final analysis, comparables <#>, <#> and <#>, have been given most weight in arriving at AuthorMyOurLowerCase final reconciled per SalesGridUnitOfComparison value of SalesGridReconciledValue.


Income ApproachThe Income Approach to value is based on the present worth of the future rights to income. This type of analysis considers the property from an investor's point of view, the basic premise being that the amount and quality of the income stream are the basis for value of the property.

Direct Capitalization AnalysisThe steps involved in capitalizing the subject's net operating income are as follows:

Develop the subject's Potential Gross Income (PGI) through analysis of the subject’s actual historic income and an analysis of competitive current market income rates.

Estimate and deduct vacancy and collection losses to develop the Effective Gross Income (EGI).

Develop and subtract operating expenses to derive the Net Operating Income (NOI).

Develop the appropriate capitalization rate (Ro).

Divide the net operating income by the capitalization rate for an estimate of value through the income approach.

Potential Gross Income (PGI)

Current IncomeThe table below summarizes the subject’s current and historic income.

Unit/Space Type Amount $/SF $/Unit Amount $/SF $/Unit Amount $/SF $/Unit Amount $/SF $/UnitSmall Office $24,000 $12.00 $12,000 $24,000 $12.00 $12,000 $24,000 $12.00 $12,000 $24,000 $12.00 $12,000Medium Office $22,000 $10.00 $22,000 $42,000 $19.09 $42,000 $19,000 $8.64 $19,000 $18,000 $8.18 $18,000Small Retail $57,000 $15.00 $28,500 $27,000 $7.11 $13,500 $26,000 $6.84 $13,000 $25,000 $6.58 $12,500Medium Retail $39,000 $13.00 $39,000 $39,000 $13.00 $39,000 $65,000 $21.67 $65,000 $64,000 $21.33 $64,000

Totals $142,000 $12.91 $23,667 $132,000 $12.00 $22,000 $134,000 $12.18 $22,333 $131,000 $11.91 $21,833

2009Budget 2010Income Summary

Appraisal

<Analysis, Notes, Comments>

Space Types & OccupancyThe following table details the space types we have defined for the subject, and current occupancy.


Units/ SF % of SF SF %Space Type Tenants Total Total Leased Vacant VacantSmall Office 2 2,000 18.2% 1,200 800 7.3%Medium Office 1 2,200 20.0% 2,200 0 0.0%Small Retail 2 3,800 34.5% 3,800 0 0.0%Medium Retail 1 3,000 27.3% 3,000 0 0.0%Totals 6 11,000 100.0% 10,200 800 7.3%

< Comments: market rent estimates are made by space type>

Lease StructureThe predominant lease structure in the subject property is <See N1 Autotext for lease type definitions >

Rent RollThe following rent roll details the current occupancy and rent status on a unit by unit basis.


Rent RollRent Roll Suit No. % of Lease Lease Lease Lease Contract Cntr. Rent Asking $ Market Cntr./AsTenant/Unit Name No. Space Type Unit SF Total Start End Term Type Rent* SF or Unit SF or Unit Rent VarianceVision Center 1 Small Office 1 2,000 17.9% 10/1/2010 12/1/2012 26.04 Mos. Modified Gross $31,000 $15.50 $12.00 29%Outdoor Sports 2 Medium Office 1 1,800 16.1% 3/1/2010 3/1/2015 60.03 Mos. Net $25,200 $14.00 $10.00 40%Sub Shop & More 3 Small Retail 1 3,000 26.8% 3/2/2011 9/1/2015 54.04 Mos. Gross $36,000 $12.00 $15.00 -20%Acme Hardware 4 Medium Retail 1 1,200 10.7% 1/1/2007 1/1/2017 120.09 Net $15,900 $13.25 $13.00 2%Vacant 5 Small Office 1 800 7.1% 0 Mos. Net $12.00 $12.00 0%Stephens 6 1 Bedroom 1 700 6.3% 6/1/2011 6/30/2012 12.98 Mos. Gross $9,000 $750.00 $700.00 7%Vacant a 2 Bedroom 1 800 7.1% 1/21/2012 12/31/2012 11.34 Mos. $820.00 $800.00 2%Smith b 3 Bedroom 1 900 8.0% 2/21/2012 12/31/2012 10.32 Mos. $10,800 $900.00 $950.00 -5%

Totals 8 11,200 100.0% Total $127,900 $13.32Leased 6 9,600 85.7% Total Commercial $108,100 $13.51 Rent/SF/YearVacant 2 1,600 14.3% Total Multifamily $19,800 $12.38

*Contract Rent = Annualized rent as of appraisal date Rent per SF for occupied space

<Analysis, Notes, Comments>


Recent LeasesThe following table details leases signed at the subject after RentRollRecentLeaseCutOffDate.

Recent LeasesLease Date Lease Date Contract Contract

Tenant Space Type Start End Rent* Rent/SF*Retail Tenant 1 Small Retail 1/1/2009 1/1/2010 $31,000 $15.50Retail Tenant 3 Medium Retail 3/2/2008 9/1/2009 $36,000 $12.00Retail Tenant 2 Small Retail 3/1/2008 3/1/2009 $25,200 $14.00Office Tenant 3 Medium Office 6/1/2007 6/30/2010 $26,400 $12.00

*Contract Rent = Annualized rent as of appraisal date

< Analysis, Notes, Comments here. Analyze/discuss how recent leases compare with longer term history displayed in the rent roll, renewals, recent turn-over, etc. >

Overall Rent RangesThe following table detail overall rent ranges at the subject, organized by space type.

Rent Ranges by Space TypeSpace Type Avg. Size Units Low High AverageSmall Office 1,000 1 $13.25 $13.25 $13.25Medium Office 2,200 1 $12.00 $12.00 $12.00Small Retail 1,900 2 $14.00 $15.50 $14.75Medium Retail 3,000 1 $12.00 $12.00 $12.00

< Analysis, Notes, Comments here. >

Major Tenants

Major TenantsLease Date Contract Contract

Tenant Space Type SF End Rent* Rent/SF*Retail Tenant 3 Medium Retail 3,000 9/1/2009 $36,000 $12.00Office Tenant 3 Medium Office 2,200 6/30/2010 $26,400 $12.00Retail Tenant 1 Small Retail 2,000 1/1/2010 $31,000 $15.50



Lease Expiration ScheduleThe lease expiration schedule provides insight to vacancy exposure and lease-up expenses.


Lease ExpirationsYear Ending SF Expiring* % of Total Cumulative % of Total

1/21/2011 2,200 20.0% 2,200 20.0%1/21/2012 0 0.0% 2,200 20.0%1/21/2013 0 0.0% 2,200 20.0%1/21/2014 0 0.0% 2,200 20.0%1/21/2015 0 0.0% 2,200 20.0%1/21/2016 0 0.0% 2,200 20.0%1/21/2017 0 0.0% 2,200 20.0%1/21/2018 0 0.0% 2,200 20.0%1/21/2019 0 0.0% 2,200 20.0%1/21/2020 0 0.0% 2,200 20.0%

*Existing commercial leases only. Projected leases, if any, excluded


Market Rent

Market Rent ComparablesAuthorWeI have researched NumberOfLeaseCompsUsed comparables for this analysis; these are documented on the following pages followed by a location map and analysis grid. All sales have been researched through numerous sources, inspected and verified by a party to the transaction.

Comparable Name City Date Rent Rent Measure Terms SF Leased1 Alton Place City 3 4/22/07 12.00 Per Square Foot Triple Net 10,000

2 Smith Center City 1 4/20/07 10.00 Per Square Foot Triple Net 10,000

3 City Center City 2 4/25/07 15.00 Per Square Foot Triple Net 10,000

Lease Comp ID #1 notes here. Lease Comp ID #1 notes here. Lease Comp ID #1 notes here. Lease Comp ID #1 notes here.



Notes


ID NameAddress Year BuiltCity ConditionState No. of BuildingsMarket GBAProperty Major Type No. of Units

Vacancy

Description No. Units Unit Size Rms/BR/Bth Rent/Month Rent/SF1 Bedroom 2 700 $750 $12.862 Bedroom 12 800 $820 $12.303 Bedroom 8 900 $900 $12.003 Br W Loft 1 1,100 $1,100 $1.00

Multifamily Rent Comparable 1

1

Comments

2400

NH

40 Lovejoy LnConcord

Units & Rent

1 Bridge Street1988Fair

OfficeLakes Region

Location Building

--

27,60016



Vacancy

Tenant Size $/SF Type Date Term

Lease Comparable 2

Comments

Leases

Location Building



Vacancy

Tenant Size $/SF Type Date Term

Lease Comparable 3

Comments

Location Building

Leases


Comparables Map

Analysis GridThe above rentals have been analyzed and compared with the subject property. AuthorWeI have considered adjustments in the areas of:

� Lease Terms� Conditions of Lease� Other

� Economic Trends (time) � Location� Physical Characteristics

On the following page is a rental comparison grid displaying the subject property, the comparables and the adjustments applied.


AddressCity

StateLessee

DateEffective RentRent Measure

TermsTerm

SF Leased

Conditions of Lease Normal 0% Normal 0% Normal 0%Other Similar 0% Similar 0% Similar 0%

Market Trends/Year


Condition% Adjustment$ Adjustment

SF Leased% Adjustment$ Adjustment





0%$0.00

0.0%Adjusted Rent

0.0%0.0%

$10.000.0%

$15.00$12.00

0.0%0.0%

0%$0.00

0%$0.00

$0.000%

0

$0.00

100000%

$0.00

$0.00$0.00

$0.000%

Average0%

Good Good

Good

ExpensesAdjusted Rent

$0.00$12.00

0%

$12.00

Transaction Adjustments

Adjusted Rent0.0%0.0%

Adjusted Rent $12.00

Subject City City 3Address 3

Per Square $12.00

4/22/2007

Subject State

1/21/2010

5 Years10,000

State 3 State 1

Per Square

4/20/2007Lessee 2

Triple Net

Lease Analysis GridSubject

Lessee 4

Comp 2

City 1

Comp 1Address 1

Comp 3Address 2

4/25/2007Lessee 7State 2City 2

$15.00

Per Square

10,000

Triple Net

$15.00$10.00

0.0%$15.00

0.0%

0%Good

$0.00

10,000

$10.00

$15.00

8 YearsTriple Net

3 Years

$10.00

$0.00

$10.00

Good

$0.000%

$0.00

Excellent0%

1000010000

$0.000%0%

$0.00

$0.00

0%

0%

0%$0.00$0.00

$0.000%

$0.00

0%

Comparable Rent Adjustments

Conditions of Lease Describe/Analyze



Type of Lease/Expense Structure Describe/Analyze

LeaseGridAdj1 Describe/Analyze




Market Rent Reconciliation

3 % Δ0%0%0%

$15.50 0%$12.50

Twelve Dollars and Fifty Cents

$14.00Low:High:

Unadjusted

Average:

Reconciled Market Rent:

Ranges & Reconciled Rent

$15.50

Number of Comps: Adjusted

$15.00$15.50

$14.00$15.50$15.00

Median:

Based on the above analysis, AuthorWeILowerCase have reconciled to a market rent of LeaseGridReconciledMarketRent, as of AsIsValueDate, for the subject <Unit Type/Tenant Space>.


Summary of Market RentThe table below summarizes the market rent estimates for the subject, organized by space type.

Market Rent by Space TypeSpace Type Rent Increases Type Term Notes / ConcessionsSmall Office $12.00 3% per annum Net 2 years Note 1Medium Office $10.00 3% per annum Net 3 years Note 2Small Retail $15.00 3% per annum Net 4 years Note 3Medium Retail $13.00 3% per annum Net 5 years Note 4


Potential Gross Income SummaryPotential Gross Income - Occupied Space

Contract Contract Market Market Contract V. Occupied Space SF Units Rent Rent/SF Rent Rent/SF Mkt. RentSmall Office 1,200 1 $15,900 $13.25 $14,400 $12.00 110.4%Medium Office 2,200 1 $26,400 $12.00 $22,000 $10.00 120.0%Small Retail 3,800 2 $56,200 $14.79 $57,000 $15.00 98.6%Medium Retail 3,000 1 $36,000 $12.00 $39,000 $13.00 92.3%Occupied Space Totals 10,200 5 $134,500 $13.19 $132,400 $12.98 101.6%


Potential Gross Income - Vacant SpacePotential Gross Rent Market MarketVacant Space SF Units Rent Rent/SFSmall Office 800 1 $9,600 $12.00Vacant Space Totals 800 1 $9,600 $12.00

Potential Gross Income SummaryMarket Rent Contract & Market Rent

Market PGI For Occupied Space $132,400 Contract Rent For Occupied Space $134,500Market PGI For Vacant Space $9,600 Market PGI For Vacant Space $9,600

Market Potential Gross Income $142,000 Contract & Market PGI $144,100Market PGI per SF $12.91 Contract & Market PGI per SF $13.10

Contract to Market Ratio 101.5%


Small Office$40,600

Medium Office$25,200

Small Retail$36,000

Medium Retail$15,900

1 Bedroom$9,000

2 Bedroom$9,600

3 Bedroom$10,800

Gross Income

Other Income Describe/AnalyzeOther Income is projected at OtherIncome.

Vacancy and Collection LossBased on a review of market conditions and the subject’s operating history AuthorWeILowerCase have projected vacancy and collection loss at VacancyRate.

Effective Gross IncomePotential Gross Income PGIOther Income OtherIncomeLess: Vacancy & Collection Loss VacancyRateEffective Gross Income EGI

ExpensesThe table below details the subject’s current expenses and recent history.


Expense SummaryAppraisal Budget 2014 2013

Expense Amount $/SF $/Unit % EGI Amount $/SF $/Unit % EGI Amount $/SF $/Unit % EGI Amount $/SF $/Unit % EGITaxes $12,478 $0.42 $1,248 7.8% $12,200 $0.41 $1,220 7.6% $12,500 $0.42 $1,250 7.8% $12,000 $0.40 $1,200 7.5%Insurance $4,500 $0.15 $450 2.8% $4,500 $0.15 $450 2.8% $4,500 $0.15 $450 2.8% $4,500 $0.15 $450 2.8%Management $13,571 $0.45 $1,357 8.5% $5,500 $0.18 $550 3.4% $5,500 $0.18 $550 3.4% $5,500 $0.18 $550 3.4%Advertising and Marketing $7,500 $0.25 $750 4.7% $7,500 $0.25 $750 4.7% $7,500 $0.25 $750 4.7% $7,500 $0.25 $750 4.7%Total Utilities $2,500 $0.08 $250 1.6% $2,500 $0.08 $250 1.6% $2,500 $0.08 $250 1.6% $2,500 $0.08 $250 1.6%Repairs and Maintenance $2,000 $0.07 $200 1.3% $6,015 $0.20 $602 3.8% $6,015 $0.20 $602 3.8% $6,015 $0.20 $602 3.8%CAM $1,000 $0.03 $100 0.6% $2,406 $0.08 $241 1.5% $2,406 $0.08 $241 1.5% $2,406 $0.08 $241 1.5%Painting and Decorating $900 $0.03 $90 0.6% $899 $0.03 $90 0.6% $899 $0.03 $90 0.6% $899 $0.03 $90 0.6%Cleaning and Janitorial $900 $0.03 $90 0.6% $876 $0.03 $88 0.5% $988 $0.03 $99 0.6% $876 $0.03 $88 0.5%Payroll $800 $0.03 $80 0.5% $853 $0.03 $85 0.5% $799 $0.03 $80 0.5% $853 $0.03 $85 0.5%Security $700 $0.02 $70 0.4% $830 $0.03 $83 0.5% $699 $0.02 $70 0.4% $830 $0.03 $83 0.5%Roads and Grounds $600 $0.02 $60 0.4% $807 $0.03 $81 0.5% $599 $0.02 $60 0.4% $807 $0.03 $81 0.5%Other Expenses $500 $0.02 $50 0.3% $784 $0.03 $78 0.5% $499 $0.02 $50 0.3% $784 $0.03 $78 0.5%

Totals $47,949 $3.75 $4,795 30.0% $46,431 $3.63 $4,643 29.1% $45,603 $3.56 $4,560 28.6% $46,231 $3.61 $4,623 29.0%Notes: $/SF and/or $/Unit are based on totals for the property.

Expenses Analysis and ProjectionThe subject expense profile has been compared with NumberOfExpenseCompsUsed comparables, detailed in the following table.


Expense ComparablesComp 1 Comp 2 Comp 3 Comp 4 Comp 5 Comp 6 Comp 7 Comp 8 Comp 9 Comp 10 Ranges

Address 40 Lovejoy Lane 8 Bridge Street 12 Bridge Street 4 Bridge Street 5 Bridge Street 40 Lovejoy Lane 4 Bridge Street 8 Bridge Street 5 Bridge Street 12 Bridge Street 10 ComparablesCity Concord Concord Concord, Concord Concord Concord Concord Concord Concord Concord,Date 1/1/2011 1/1/2011 6/25/2012 1/1/2011 1/1/2011 1/1/2011 1/1/2011 1/1/2011 1/1/2011 6/25/2012

GBA 15,600 11,400 7,500 27,600 30,000 15,600 27,600 11,400 30,000 7,500No. of Units 19 12 10 16 57 19 16 12 57 10

PGI $158,800 $215,000 $165,460 $157,360 $177,400 $158,800 $157,360 $215,000 $177,400 $165,460Vacancy 10% 5% 10% 10% 10% 10% 10% 5% 10% 10%

EGI $142,920 $204,250 $148,914 $141,624 $159,660 $142,920 $141,624 $204,250 $159,660 $148,914 Low Avg. Med. HighTaxes $/SF $0.80 $2.19 $3.45 $0.45 $3.97 $0.80 $0.45 $2.19 $3.97 $3.45 $0.45 $2.17 $2.19 $3.97

Insurance $/SF $0.29 $1.58 $0.60 $0.16 $0.15 $0.29 $0.16 $1.58 $0.15 $0.60 $0.15 $0.56 $0.29 $1.58Management % EGI 8.5% 9.8% 9.4% 8.5% 8.5% 8.5% 8.5% 9.8% 8.5% 9.4% 8.5% 8.9% 8.5% 9.8%

Advertising and Marketing $/SF $0.48 $0.00 $1.00 $0.27 $0.25 $0.48 $0.27 $0.00 $0.25 $1.00 $0.25 $0.50 $0.38 $1.00Total Utilities $/SF $0.16 $1.71 $0.33 $0.09 $0.08 $0.16 $0.09 $1.71 $0.08 $0.33 $0.08 $0.48 $0.16 $1.71

Repairs and Maintenance $/SF $0.13 $1.10 $0.27 $0.07 $0.07 $0.13 $0.07 $1.10 $0.07 $0.27 $0.07 $0.33 $0.13 $1.10CAM $/SF $0.06 $0.00 $0.13 $0.04 $0.03 $0.06 $0.04 $0.00 $0.03 $0.13 $0.03 $0.07 $0.05 $0.13

Painting And Decorating $/SF $0.06 $0.00 $0.12 $0.03 $0.03 $0.06 $0.03 $0.00 $0.03 $0.12 $0.03 $0.06 $0.05 $0.12Cleaning and Janitorial $/SF $0.42 $0.39 $0.00 $0.00 $0.02 $0.42 $0.00 $0.39 $0.02 $0.00 $0.02 $0.28 $0.39 $0.42

Payroll $/SF $0.05 $0.88 $0.11 $0.03 $0.03 $0.05 $0.03 $0.88 $0.03 $0.11 $0.03 $0.22 $0.05 $0.88Security $/SF $0.04 $0.32 $0.09 $0.03 $0.02 $0.04 $0.03 $0.32 $0.02 $0.09 $0.02 $0.10 $0.04 $0.32

Roads and Grounds $/SF $0.04 $0.48 $0.08 $0.02 $0.02 $0.04 $0.02 $0.48 $0.02 $0.08 $0.02 $0.13 $0.04 $0.48Other Expenses $/SF $0.03 $0.00 $0.07 $0.02 $0.02 $0.03 $0.02 $0.00 $0.02 $0.07 $0.02 $0.03 $0.03 $0.07

Reserves $/SF $0.03 $0.88 $0.05 $0.01 $0.00 $0.03 $0.01 $0.88 $0.00 $0.05 $0.01 $0.24 $0.04 $0.88Total Expenses $/SF $3.01 $11.28 $6.51 $1.70 $1.60 $3.01 $1.70 $11.28 $1.60 $6.51 $1.60 $4.82 $3.01 $11.28Total Expenses % EGI 32.8% 63.0% 32.8% 33.1% 30.0% 32.8% 33.1% 63.0% 30.0% 32.8% 30.0% 38.3% 32.8% 63.0%

Notes:


Taxes_Expense_LabelThis expense category includes all local, county, and state property tax levies,including special assessments.

Taxes2

Subject $/SF Comparables (10) Appraisal2014 $0.42 Low $0.45 $119,140

Annualized $0.50 Avgerage $2.17 $3.97Budget $0.41 Median $2.19

2013 $0.40 High $3.97Comp 1 $0.80Comp 2 $2.19Comp 3 $3.45Comp 4 $0.45Comp 5 $3.97Comp 6 $0.80Comp 7 $0.45Comp 8 $2.19Comp 9 $3.97

Comp 10 $3.45Notes:

Describe/Analyze

Insurance_Expense_LabelCoverage for loss or damage to the property caused by the perils of fire, lightning, extended coverage perils, vandalism and malicious mischief, and additional perils.


Insurance2




Comp 10 $0.60Notes:

Describe/Analyze

Management_Expense_LabelAn expense item representing the sum paid for management services; a variable operating expense. Management services may be contracted for or provided by the property owner. Management expenses may include supervision, on-site offices or apartments for resident managers, telephone service, clerical help, legal or accounting services, printing and postage, and advertising. Management fees may occasionally be included among recoverable operating expenses.

Management4

Subject % EGI Comparables (10) Appraisal2014 3.4% Low 8.5% $13,571

Annualized 6.9% Avgerage 8.9% 8.5%Budget $0.03 Median 8.5%

2013 $0.03 High 9.8%Comp 1 8.5%Comp 2 9.8%Comp 3 9.4%Comp 4 8.5%Comp 5 8.5%Comp 6 8.5%Comp 7 8.5%Comp 8 9.8%Comp 9 8.5%

Comp 10 9.4%Notes:


Describe/Analyze

Advertising_And_Marketing_Expense_LabelThe items in this category include professional fees and other general administrative expenses, such as rent of offices and general expenses and the services needed to operate the property.

Advertising and Marketing2



2013 $0.25 High $1.00Comp 1 $0.48Comp 3 $1.00Comp 4 $0.27Comp 5 $0.25Comp 6 $0.48Comp 7 $0.27Comp 9 $0.25

Comp 10 $1.00Notes:

Describe/Analyze

Total_Utilities_Expense_LabelUtilities expenses typically include electric, gas, water, sewer, and trash removal.

Total Utilities2




Comp 10 $0.33Notes:


Describe/Analyze

Repairs_And_Maintenance_Expense_LabelAll expenses incurred for the general repairs and maintenance of the building including common areas and general upkeep. Repairs and maintenance expense includes elevator, HVAC, electrical and plumbing, structural/roof, and other repairs and maintenance expense items.

Repairs and Maintenance2




Comp 10 $0.27Notes:

Describe/Analyze

CAM_Expense_LabelCommon area maintenance (CAM) is the expense of operating and maintaining common areas of the property. The common area is the total area within a property that is not designed for rental, but is available for common use by all owners, tenants, or their invitees, e.g., parking and its appurtenances, malls, sidewalks, landscaped areas, recreation areas, public toilets, truck and service facilities.


CAM2




Comp 10 $0.13Notes:

Describe/Analyze

Painting_And_Decorating_Expense_Label

Painting And Decorating2

Subject $/SF Comparables (8) Appraisal2014 $0.03 Low $0.03 $900



Comp 10 $0.12Notes:

Describe/Analyze

Cleaning_And_Janitorial_Expense_LabelThe expense for building cleaning and janitorial services including all of the required items for both daytime and night-time cleaning and janitorial service for tenant spaces, public areas, atriums, elevators, restrooms, windows, etc.


Cleaning and Janitorial2



2013 $0.03 High $0.42Comp 1 $0.42Comp 2 $0.39Comp 5 $0.02Comp 6 $0.42Comp 8 $0.39Notes:

Describe/Analyze

Payroll_Expense_LabelThe payroll expenses for all employees involved in the on-going operation of the property, but whose salaries and wages are not included in other expense categories.

Payroll2




Comp 10 $0.11Notes:

Describe/Analyze

Security_Expense_Label Expenses related to the security of the Lessees and the Property. This expense item includes payroll, contract services and other security expenses not covered elsewhere. This item also includes the expense of maintenance of security systems such as alarms and closed circuit television (CCTV), and ordinary supplies necessary to operate a security program such as batteries, control forms, access cards, security uniforms, etc.


Security2




Comp 10 $0.09Notes:

Describe/Analyze

Roads_and_Grounds_Expense_Label The cost of maintaining the grounds, roads and parking areas of the property.

Roads and Grounds2




Comp 10 $0.08Notes:

Describe/Analyze


Other_Expenses_Expense_LabelAny other expenses incurred in the operation of the property not specifically covered elsewhere.

Other Expenses2




Comp 10 $0.07Notes:

Describe/Analyze

Reserves_LabelAn allowance that provides for the periodic replacement of building components that wear out more rapidly than the building itself and must be replaced periodically during the building’s useful or economic life. Reserves are also called reserve(s) for replacement or replacement allowance. These components may include one or more of the following: roof covering; carpeting; kitchen, bath, and laundry equipment; compressors, elevators, and boilers; specific structural items and equipment that have limited economic life expectancies; interior improvements to tenant space that are made periodically by the landlord, usually at lease renewal; sidewalks, driveways; parking areas; and exterior painting.


Reserves2




Comp 10 $0.05Notes:

Describe/Analyze

Expense Reimbursed Amount* NotesTaxes NoInsurance NoUtilities NoRepairs/Maintenance NoMisc./Other NoManagement NoReserves No

Total $0 * Adjusted for vacancy

Expense Reimbursements

Taxes26%

Insurance10%

Utilities12%

Repairs/Maintenance17%

Misc./Other5%

Management24%

Reserves6%

Expenses


Net Operating IncomeEffective Gross Income EGILess: Less Expenses ExpensesAdd: Expense Reimbursements ExpenseReimburse

mentTotalNet Operating Income NOI

Potential Gross IncomeEffective Gross IncomeExpenses Exp. ReimbursementsNet Operating Income

Cash Flow

Amount $148,600 $133,890 $45,389 $0 $88,501

Potential Gross Income

Effective Gross Income Expenses

Exp. Reim-bursements NOI

$148,600

$133,890

$45,389

$0

$88,501

Cash Flow Profile

Capitalization RateThe capitalization rate is the factor that converts the stabilized net operating income (NOI) to a present value. It is the ratio of net income to value or sale price.

NOI ÷ Sale Price = Capitalization Rate

For example, if a property sells for $500,000, and has a stabilized NOI of $50,000, the indicated capitalization rate is 10%.

Market Extracted RatesThe table below details capitalization rates extracted from the market.


Comparable City Price Date NOI Cap Rate1 Comp A City $1,675,000 7/11/2007 $135,000 8.06%2 Comp B City $1,725,000 7/12/2006 $138,500 8.03%3 Comp C City $1,510,000 7/14/2007 $121,500 8.05%

Comparable Sale Cap Rates

Band of Investment This technique utilizes lender and real estate investor investment criteria to develop, or synthesize a capitalization rate. There are four key inputs necessary for this method:

1. The loan-to-value ratio (M)2. The mortgage interest rate (i)3. The loan term (n)4. The equity cap rate or equity dividend rate (RE)

The mortgage variables are used to build the mortgage constant (RM), which is the total amount of the payments made in one year, expressed as a percentage of the original loan amount.

Payments x 12 / Original Loan Amount = Mortgage Constant (RM)

The equity cap rate is the annual return to the investor, expressed as a percent of the original amount invested. The annual return to the investor is also known as the equity dividend rate; it is the profit remaining after debt service and all other expenses.

After Debt Service Profit / Equity Investment = Equity Cap Rate (RE)

Note that the equity cap rate is not the same (usually, that is) as the equity yield rate. The equity yield rate reflects the total return to the investor over the life of the investment. Factors such as appreciation and mortgage pay down affect and usually increase this return to a point higher than the equity dividend rate. In markets where substantial appreciation is expected, investors will often accept a low or even negative equity dividend rate, anticipating a compensating payoff when the property is eventually sold. In markets where little appreciation is expected, much more weight is given to the annual equity dividend.

Formula:RM x M = rateRE x (1-M) = rate

= Cap Rate (Ro)

Debt Coverage Ratio AnalysisThis technique develops a capitalization rate based on typical mortgage terms. There are four variables necessary for this method:

1. The loan-to-value ratio (M)


2. The mortgage interest rate (i)3. The loan term (n)4. The debt coverage ratio (DCR)

Items 1 through 3 are discussed above under the Band of Investment section. In this method it is also used to develop the mortgage constant (RM). The debt coverage ratio is the factor by which income exceeds debt on an annual basis.

Formula:Debt Coverage Ratio x Loan to Value Ratio x Mortgage Constant = Ro

or: DCR x M x RM = Ro

AuthorWeI have researched mortgage rates and terms typical for the subject within the market area. The table below details the Band of Investment and Debt Coverage Ratio Analyses calculations.

Mortgage Interest Rate 6.25%Loan Term (Years) 20Loan To Value Ratio 70.%Debt Coverage Ratio 1.25Equity Dividend Rate 8.00%

Loan Ratiox 70.% = 6.14%

Equity Ratiox 30.% = 2.40%

8.54%

= 7.67%7.67%

Capitalization Rate Calculations

Capitalization Rate Variables

Debt Coverage Ratio Analysis

Mortgage Constant

Band of Investment Capitalization Rate8.00%

Debt Coverage Ratio Capitalization Rate

Band of Investment AnalysisContributions

Equity Dividend Rate0.087711384

Debt Coverage Ratio x Loan to Value Ratio x Mortgage Constant1.25 x 0.7 x 0.0877113842853083

Survey DataDiscuss investor or published survey data

Capitalization Rate Conclusion<Analysis and rate selection> CapRate


Capitalization to Value

Unit/Space Type Income Method Units/SF Annual % of PGISmall Office $14.50 $/SF/Year 2,800 $40,600 27.6%Medium Office $14.00 $/SF/Year 1,800 $25,200 17.1%Small Retail $12.00 $/SF/Year 3,000 $36,000 24.5%Medium Retail $13.25 $/SF/Year 1,200 $15,900 10.8%1 Bedroom $750.00 $/Month 1 $9,000 6.1%2 Bedroom $800.00 $/Month 1 $9,600 6.5%3 Bedroom $900.00 $/Month 1 $10,800 7.3%

$147,100 100.0%10.00% $14,710

$1,500$133,890 91.0%

Expense Amount (% or Annual $/SFTaxes $12,000 $12,000 $0.92Insurance $4,500 $4,500 $0.35Utilities $5,500 $5,500 $0.42Repairs/Maintenance $7,500 $7,500 $0.58Misc./Other $2,500 $2,500 $0.19Management 8% $10,711 $0.82Reserves 2.0% $2,678 $0.21

$45,389 $3.4933.90%

$033.90%$88,501 $6.817.75%

$1,141,948 $87.88$1,090,000 $83.88

Effective Gross Income (EGI):

$/Year

% of EGI

Rounded:

Capitalization Rate:

Net Expense Ratio

Potential Gross Income:Vacancy & Collection Loss

Other Income:

Income Capitalization Analysis

$/Year

$/Year

Method

Net Operating Income (NOI):

Value (NOI/Cap Rate):

Expense Reimbursements:

Total Expenses:

% of EGI

Expense Ratio (Expenses/EGI):

$/Year

$/Year

Direct Capitalization Analysis ConclusionBased on the above analysis detailed above, as of AsIsValueDate AuthorWeILowerCase have reconciled to a direct capitalization approach value of:

DirCapValue

DirCapValueText


Effective Gross Income Multiplier Analysis (EGIM)The EGIM is the ratio of effective gross income to sale price (Price EGI = EGIM).

Develop the subject's Potential Gross Income (PGI) through analysis of the subject’s actual historic income and an analysis of competitive current market income rates.

Estimate and deduct vacancy and collection losses to develop the Effective Gross Income (EGI).

Develop the appropriate EGIM through analysis of comparable sales.

Multiply the Effective Gross Income by the EGIM for an estimate of value.

Effective Gross IncomeEffective Gross Income has been developed previously in this appraisal at EGI.

The following table summarizes the comparable sales, multipliers and expense ratios.

Comparable City Price Date Expense Ratio EGIM1 Comp A City $1,675,000 7/11/2007 29.0% 8.382 Comp B City $1,725,000 7/12/2006 32.0% 7.843 Comp C City $1,510,000 7/14/2007 27.0% 8.16

Effective Gross Income Multipliers

The range of multipliers is EGIMLow to EGIMHigh with an average of EGIMAverage.

Describe/Analyze

Therefore, AuthorWeILowerCase have reconciled to a multiplier of EGIM.

EGIM Analysis ConclusionEGI EGIEGIM x EGIMIndicated Value EGIMIndicatedValueRounded EGIMAnalysisValueOne Million Fifty Five Thousand Dollars


Net Income Multiplier Analysis (NIM)The NIM is the ratio of effective net operating income to sale price (Price NOI = NIM).

Net Operating IncomeThe Net Operating Income has been developed previously in this appraisal at NOI.

The following table summarizes the comparable sales, NOI per square foot and multipliers.

Comparable City Price Date NOI/SF NIM1 Comp A City $1,675,000 7/11/2007 $6.92 12.412 Comp B City $1,725,000 7/12/2006 $6.93 12.453 Comp C City $1,510,000 7/14/2007 $7.06 12.43

Net Income Multipliers

The range of multipliers is NIMLow to NIMHigh with an average of NIMAverage.

Describe/Analyze

Therefore, AuthorWeILowerCase have reconciled to a multiplier of NIM.

NIM Analysis ConclusionNOI NOINIM x NIMIndicated Value NIMIndicatedValueRounded NIMAnalysisValueOne Million Fifty Thousand Dollars


Stabilization CalculationsWhen a property has a below market income stream due to high vacancy and/or below market rents, an adjustment to value is often necessary for lost income over the lease-up period, leasing commissions associated with lease-up and perhaps tenant fit-up and additional operating expenses associated with the vacant space over the lease-up period.

The table below details the stabilization calculations for the subject.

Stabilization Calculations

Item Year 1 Year 2 Year 3 Year 4 Year 5Actual PGI for Vacant Space $9,600

Stabilized PGI for Vacant Space @ 10.0% $14,200Effective Gross Income for Vacant Space $0 $0 $0 $0 $0

Change 0% 0% 0% 0%Adjusted EGI Rent Loss $0 $0 $0 $0 $0

% Leased 0% 0% 0% 0% 0%$ Leased $0 $0 $0 $0 $0

Annualized Rent Loss for $ Leased at 50% $0 $0 $0 $0 $0$ Vacant $0 $0 $0 $0 $0

Leasing Commissions* $0 $0 $0 $0 $0Tenant Improvements $0 $0 $0 $0 $0

Other $0 $0 $0 $0 $0Other $0 $0 $0 $0 $0

Totals $0 $0 $0 $0 $0Discount Rate 12.0%Present Value $0

Rounded $0*Leasing Commission Rate 8.0% For example, a $10,000 annual lease would have a

Number Years Commission Applies 2 commission of $1,600 ($10,000 x 8.0% x 2 Years = $1,600)

Actual PGI for Vacant Space: This figure is from the Rent Roll table and is the dollar amount of the subject’s current vacancy.

Stabilized PGI for Vacant Space: This figure is calculated from the Rent Roll table. It is the dollar amount of vacancy at stabilized occupancy, calculated by multiplying the PGI at market rent by the stabilized vacancy and collection loss rate. In this case, PGI x Vacancy = StabilizedVacancy.

Adjusted EGI Rent Loss: These lines reflect the anticipated change percentage and dollar for income trends over the stabilization period

% Leased: The projected percentage of space absorbed by the market for the given year. The percentage is measured against the original vacancy, not remaining vacancy.

$ Leased: The dollar amount for the space absorbed.

Annualized Rent Ross for $ Leased at 50%: This line assumes that absorption will take place over the course of the year and that on average, only 50% of the rent will be captured. In effect, the calculation assumes space is occupied at the mid-point of the year.


$ Vacant: This is the dollar amount of remaining rent loss and is carried forward to the next year.

Leasing Commissions: The leasing commissions are calculated based on the inputs at the bottom of the table. There are two inputs: the rate and the number of years to apply the commission. These factors are applied to the dollar value of the leased space for the year (the "$ Leased" row). Note the total amount is applied in year the space is leased.

Tenant Improvements: Expenses related to tenant fit-up that are typically paid by the owner.

Other: <Describe here if applicable>

Discount Rate: The discount rate is used to convert the anticipated future cash flows to a present value. It reflects the risks and timing of the cash flows and typically consists of a blend of equity and debt position requirements.

The discount rate is used to convert the anticipated future cash flows to a present value. It reflects the risks and timing of the cash flows and can consist of equity or a blend of equity and debt position requirements.

In this case, based on the risk characteristics of the subject’s projected stabilization we have applied a discount rate of RentRollStabilizationDiscountRate.

Or, for a more detailed development of the discount rate, delete the paragraph above and modify this text: The following formula is a method for developing the discount rate using a blend of debt and equity requirements.

Debt X LTVEquity x 1-LTVEquals = Blended Rate

We have researched the local market for debt and equity terms and have applied the following inputs in the discount rate model:

Debt @ 8.0% x 30% = 2.4%Equity @ 18.0% x 70% = 12.6%Equals Blended Rate = 15.0%

Additionally, we have also reviewed published surveys from RealtyRates.com and << source >>. These surveys report the following:

<< survey ranges >>


Therefore, based on these indicators, we have applied the discount rate at 12.0%% to convert future cash flows to a present value.

Present Value, Rounded: Based on the above inputs, the indicated stabilization adjustment, after rounding, is RentRollStabilizationAdjustment.


Final ReconciliationThe process of reconciliation involves the analysis of each approach to value. The quality of data applied, the significance of each approach as it relates to market behavior and defensibility of each approach are considered and weighed. Finally, each is considered separately and comparatively with each other.

Value IndicationsLand Value: LandValueCost Approach: CostApproachValueSales Comparison Approach: SalesApproachValueIncome Approach:

Direct Capitalization IncomeApproachValueEGIM Analysis EGIMAnalysisValueNIM Analysis NIMAnalysisValue

Cost ApproachDiscuss data quality, quantity and relevance of approach

Sales Comparison ApproachDiscuss data quality, quantity and relevance of approach

Income Approach – Direct CapitalizationDiscuss data quality, quantity and relevance of approach

Income Approach – EGIM AnalysisDiscuss data quality, quantity and relevance of approach

Income Approach – NIM AnalysisDiscuss data quality, quantity and relevance of approach

Value ConclusionBased on the data and analyses developed in this appraisal, AuthorWeILowerCase have reconciled to the following value conclusion(s), as of AsIsValueDate, subject to the Limiting Conditions and Assumptions of this appraisal.

Reconciled Value(s): Premise: As IsInterest: AsIsInterestAppraisedValue Conclusion: AsIsValueOne Million Fifty Thousand Dollars


Premise: As CompleteInterest: AsCompleteInterestAppraisedValue Conclusion: AsCompleteValueOne Million Fifty Thousand Dollars

Premise: As StabilizedInterest: AsStabilizedInterestAppraisedValue Conclusion: AsStabilizedValueOne Million Fifty Thousand Dollars


Certification StatementAuthorWeI certify that, to the best of AuthorMyOurLowerCase knowledge and belief:

� The statements of fact contained in this report are true and correct.

� The reported analyses, opinions and conclusions are limited only by the reported assumptions and limiting conditions, and are AuthorMyOurLowerCase personal, impartial, and unbiased professional analyses, opinions and conclusions.

� AuthorWeI have no present or prospective future interest in the property that is the subject of this report, and have no personal interest with respect to the parties involved.

� AuthorWeI have no bias with respect to the property that is the subject of this report, or to the parties involved with this assignment.

� AuthorMyOur engagement in this assignment was not contingent upon developing or reporting predetermined results.

� AuthorMyOur compensation for completing this assignment is not contingent upon the development or reporting of a predetermined value or direction in value that favors the cause of the client, the amount of the value estimate, the attainment of a stipulated result, or the occurrence of a subsequent event directly related to the intended use of this appraisal.

� AuthorMyOur analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the Uniform Standards of Professional Appraisal Practice (USPAP).

� No one provided significant real property appraisal assistance to the person(s) signing this certification.

� AuthorWeI certify sufficient competence to appraise this property through education and experience, in addition to the internal resources of the appraisal firm.

� PriorServices

� Appraiser1FirstName Appraiser1LastName Appraiser1Inspection made an inspection of the subject property.

� Appraiser2FirstName Appraiser2LastName Appraiser2Inspection made an inspection of the subject property.

See N1 Autotext Misc category for Appraisal Institute certification statements


Appraiser1FirstName Appraiser1LastName, Appraiser1SuffixAppraiser1CertificationState-Appraiser1CertificationNumber

Appraiser2FirstName Appraiser2LastName, Appraiser2SuffixAppraiser2CertificationState-Appraiser2CertificationNumber


Addenda


Qualifications Placeholder Page


GlossaryThis glossary contains the definitions of common words and phrases, used throughout the appraisal industry, as applied within this document. Please refer to the publications listed in the Works Cited section below for more information.

Works Cited: Appraisal Institute. The Appraisal of Real Estate. 13th ed. Chicago: Appraisal

Institute, 2008. Print. Appraisal Institute. The Dictionary of Real Estate Appraisal. 5th ed. 2010. Print.

Band of InvestmentA technique in which the capitalization rates attributable to components of a capital investment are weighted and combined to derive a weighted-average rate attributable to the total investment. (Dictionary, 5th Edition)

Common Area1. The total area within a property that

is not designed for sale or rental but is available for common use by all owners, tenants, or their invitees, e.g., parking and its appurtenances, malls, sidewalks, landscaped areas, recreation areas, public toilets, truck and service facilities.

2. In a shopping center, the walkways and areas onto which the stores face and which conduct the flow of customer traffic. (ICSC) (Dictionary, 5th Edition)

Common Area Maintenance (CAM)1. The expense of operating and

maintaining common areas; may or may not include management charges and usually does not include capital expenditures on tenant improvements or other improvements to the property. CAM can be a line-item expense

for a group of items that can include maintenance of the parking lot and landscaped areas

and sometimes the exterior walls of the buildings.

CAM can refer to all operating expenses.

CAM can refer to the reimbursement by the tenant to the landlord for all expenses reimbursable under the lease. Sometimes reimbursements have what is called an administrative

load. An example would be a 15% addition to total operating expenses, which are then prorated among tenants. The administrative load, also called an administrative and marketing fee, can be a substitute for or an addition to a management fee.

2. The amount of money charged to tenants for their shares of maintaining a center’s common area. The charge that a tenant pays for shared services and facilities such as electricity, security, and maintenance of parking lots. The area maintained in common by all tenants, such as parking lots and common passages. The area is often defined in the lease and may or may not include all physical area to be paid for by all tenants. Items charged to common area maintenance may include cleaning services, parking lot sweeping and maintenances, snow


removal, security, and upkeep. (ICSC) (Dictionary, 5th Edition)

Debt Coverage Ratio (DCR)The ratio of net operating income to annual debt service (DCR = NOI/Im), which measures the relative ability of a property to meet its debt service out of net operating income; also called debt service coverage ratio (DSCR). A larger DCR indicates a greater ability for a property to withstand a downturn in revenue, providing an improved safety margin for a lender. (Dictionary, 5th Edition)

Discount RateA yield rate used to convert future payments or receipts into present value; usually considered to be a synonym for yield rate. (Dictionary, 5th Edition)

Effective AgeThe age of property that is based on the amount of observed deterioration and obsolescence it has sustained, which may be different from its chronological age. (Dictionary, 5th Edition)

Effective Date1. The date on which the analyses,

opinion, and advice in an appraisal, review, or consulting service apply.

2. In a lease document, the date upon which the lease goes into effect. (Dictionary, 5th Edition)

Exposure Time1. The time a property remains on the

market.2. The estimated length of time the

property interest being appraised would have been offered on the market prior to the hypothetical consummation of a sale at market

value on the effective date of the appraisal; a retrospective estimate based on an analysis of past events assuming a competitive and open market. (Dictionary, 5th Edition)

External ObsolescenceAn element of depreciation; a diminution in value caused by negative externalities and generally incurable on the part of the owner, landlord, tenant. (Dictionary, 5th Edition)

Extraordinary AssumptionAn assumption, directly related to a specific assignment, which, if found to be false, could alter the appraiser’s opinions or conclusions. Extraordinary assumptions presume as fact otherwise uncertain information about physical, legal, or economic characteristics of the subject property; or about conditions external to the property such as market conditions or trends; or about the integrity of data used in an analysis. (USPAP, 2010-2011 ed.) (Dictionary, 5th Edition)

Fee Simple EstateAbsolute ownership unencumbered by any other interest or estate, subject only to the limitations imposed by the governmental powers of taxation, eminent domain, police power, and escheat. (Dictionary, 5th Edition)

Functional ObsolescenceThe impairment of functional capacity of a property according to market tastes and standards. (Dictionary, 5th Edition)

Functional UtilityThe ability of a property or building to be useful and o perform the function for which it is intended according to current market tastes and standards; the


efficiency of a building’s use in terms of architectural style, design and layout, traffic patterns, and the size and type of rooms. (The Appraisal of Real Estate, 13th Edition)

Gross Building Area (GBA)Total floor area of a building, excluding unenclosed areas, measured from the exterior of the walls of the above-grade area. This includes mezzanines and basements if and when typically included in the region. (Dictionary, 5th Edition)

Gross Leasable Area (GLA)Total floor area designed for the occupancy and exclusive use of tenants, including basements and mezzanines; measured from the center of joint partitioning to the outside wall surfaces. (Dictionary, 5th Edition)

Highest & Best UseThe reasonably probable and legal use of vacant land or an improved property that is physically possible, appropriately supported, financially feasible, and that results in the highest value. The four criteria the highest and best use must meet are legal permissibility, physical possibility, financial feasibility, and maximum productivity. Alternatively, the probable use of land or improved property—specific with respect to the user and timing of the use—that is adequately supported and results in the highest present value. (Dictionary, 5th Edition)

Highest and Best Use of Land or a Site as Though VacantAmong all reasonable, alternative uses, the use that yields the highest present land value, after payments are made for labor, capital, and coordination. The use

of a property based on the assumption that the parcel of land is vacant or can be made vacant by demolishing any improvements. (Dictionary, 5th Edition)

Highest and Best Use of Property as ImprovedThe use that should be made of a property as it exists. An existing improvement should be renovated or retained as is so long as it continues to contribute to the total market value of the property, or until the return from a new improvement would more than offset the cost of demolishing the existing building and constructing a new one. (Dictionary, 5th Edition)

Hypothetical ConditionThat which is contrary to what exists but is supposed for the purpose of analysis. Hypothetical conditions assume conditions contrary to known facts about physical, legal, or economic characteristics of the subject property; or about conditions external to the property, such as market conditions or trends; or about the integrity of data used in an analysis. (Dictionary, 5th Edition)

Leased Fee InterestA freehold (ownership interest) where the possessory interest has been granted to another party by creation of a contractual landlord-tenant relationship (i.e., a lease). (Dictionary, 5th Edition)

Market AreaThe area associated with a subject property that contains its direct competition. (Dictionary, 5th Edition)

Market RentThe most probably rent that a property should bring is a competitive and open market reflecting all conditions and


restrictions of the lease agreement, including permitted uses, use restrictions, expense obligations, term, concessions, renewal and purchase options, and tenant improvements (TIs). (Dictionary, 5th Edition)

Market ValueThe major focus of most real property appraisal assignments. Both economic and legal definitions of market value have been developed and refined. 1. The most widely accepted

components of market value are incorporated in the following definition: The most probable price that the specified property interest should sell for in a competitive market after a reasonable exposure time, as of a specified date, in cash, or in terms equivalent to cash, under all conditions requisite to a fair sale, with the buyer and seller each acting prudently, knowledgeably, for self-interest, and assuming that neither is under duress.

2. Market value is described in the Uniform Standards of Professional Appraisal Practice (USPAP) as follows: A type of value, stated as an opinion, that presumes the transfer of a property (i.e., a right of ownership or a bundle of such rights), as of a certain date, under specific conditions set forth in the definition of the term identified by the appraiser as applicable in an appraisal. (USPAP, 2010-2011 ed.) USPAP also requires that certain items be included in every appraisal report. Among these items, the following are directly related to the definition of market value: Identification of the specific

property rights to be appraised.

Statement of the effective date of the value opinion.

Specification as to whether cash, terms equivalent to cash, or other precisely described financing terms are assumed as the basis of the appraisal.

If the appraisal is conditioned upon financing or other terms, specification as to whether the financing or terms are at, below, or above market interest rates and/or contain unusual conditions or incentives. The terms of above—or below—market interest rates and/or other special incentives must be clearly set forth; their contribution to, or negative influence on, value must be described and estimated; and the market data supporting the opinion of value must be described and explained.

3. The following definition of market value is used by agencies that regulate federally insured financial institutions in the United States: The most probable price that a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and the seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: Buyer and seller are typically

motivated; Both parties are well informed or

well advised, and acting in what they consider their best interests;

A reasonable time is allowed for exposure in the open market;


Payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and

The price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale. (12 C.F.R. Part 34.42(g); 55 Federal Register 34696, August 24, 1990, as amended at 57 Federal Register 12202, April 9, 1992; 59 Federal Register 29499, June 7, 1994)

4. The International Valuation Standards Council defines market value for the purpose of international standards as follows: The estimated amount for which a property should exchange on the date of valuation between a willing buyer and a willing seller in an arm’s-length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently, and without compulsion. (International Valuation Standards, 8th ed., 2007)

5. Market value is the amount in cash, or on terms reasonably equivalent to cash, for which in all probability the property would have sold on the effective date of the appraisal, after a reasonable exposure of time on the open competitive market, from a willing and reasonably knowledgeable seller to a willing and reasonably knowledgeable buyer, with neither acting under any compulsion to buy or sell, giving due consideration to all available economic uses of the property at the time of the appraisal. (Uniform Standards for Federal Land

Acquisitions) (Dictionary, 5th Edition)

Marketing TimeAn opinion of the amount of time it might take to sell a real or personal property interest at the concluded market value level during the period immediately after the effective date of the appraisal. Marketing time differs from exposure time, which is always presumed to precede the effective date of an appraisal. (Advisory Opinion 7 of the Standards Board of The Appraisal Foundation and Statement on Appraisal Standards No. 6, “Reasonable Exposure Time in Real Property and Personal Property Market Value Opinions” address the determination of reasonable exposure and marketing time). (Dictionary, 5th Edition)

Net Operating Income (NOI)The actual or anticipated net income that remains after all operating expenses are deducted from effective gross income but before mortgage debt service and book depreciation are deducted. (Dictionary, 5th Edition)ObsolescenceOne cause of depreciation; an impairment of desirability and usefulness caused by new inventions, changes in design, improved processes for production, or external factors that make a property less desirable and valuable for a continued use; may be either functional or external. (Dictionary, 5th Edition)

Parking RatioA ratio of parking area or parking spaces to an economic or physical unit of comparison. Minimum required parking ratios of various land uses are often


stated in zoning ordinances. (Dictionary, 5th Edition)

Rentable AreaFor office buildings, the tenant’s pro rata portion of the entire office floor, excluding elements of the building that penetrate through the floor to the areas below. The rentable area of a floor is computed by measuring to the inside finished surface of the dominant portion of the permanent building walls, excluding any major vertical penetrations of the floor. Alternatively, the amount of space on which the rent is

based; calculated according to local practice. (Dictionary, 5th Edition)

Replacement CostThe estimated cost to construct, at current prices as of the effective appraisal date, a substitute for the building being appraised, using modern materials and current standards, design, and layout. (Dictionary, 5th Edition)

Scope of WorkThe type and extent of research and analyses in an assignment. (Dictionary, 5th Edition)

Stabilized OccupancyAn expression of the expected occupancy of a property in its particular market considering current and forecasted supply and demand, assuming it is priced at market rent. (Dictionary, 5th Edition)

Tenant Improvements (TIs)1. Fixed improvements to the land or

structures installed and paid for use by a lessee.

1. The original installation of finished tenant space in a construction project; subject to periodic change for succeeding tenants. (Dictionary, 5th Edition)

Vacancy and Collection LossA deduction from potential gross income (PGI) made to reflect income reductions due to vacancies, tenant turnover, and non-payment of rent; also called vacancy and credit loss or vacancy and contingency loss. Often vacancy and collection loss is expressed as a

percentage of potential gross income and should reflect the competitive market. Its treatment can differ according to the interest being appraised, property type, capitalization method, and whether the property is at stabilized occupancy. (Dictionary, 5th Edition)


Documents

Commercial Appraisal - ExactBid · Web viewPlease reference page 11 of this report for important information regarding the scope of research and analysis for this appraisal, including