User manual | appraisal of real property for proposed multi

APPRAISAL OF REAL PROPERTY
FOR
PROPOSED MULTI-TENANT RETAIL CENTER
LAKEMONT BOULEVARD
MCDONOUGH, HENRY COUNTY, GEORGIA
AS OF:
OCTOBER 19, 2007
PREPARED FOR:
MR. MARK L. PATTERSON
HAVEN TRUST BANK
2175 LAWRENCEVILLE HIGHWAY
DECATUR, GEORGIA 30033
PREPARED BY
FLETCHER & COMPANY
REAL ESTATE APPRAISALS AND CONSULTATION
P.O. BOX 884
GRIFFIN, GA 30224
(770) 227-4008
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October 22, 2007
Mark L. Patterson
Haven Trust Bank
2175 Lawrenceville Highway
Decatur, Georgia 30033
RE:
Summary Appraisal Report
Tract A: Vacant Land- 1.117 acres
Tract B: Multi-Tenant Retail Center
Lakemont Boulevard & SR-81 east
McDonough, Henry County, Georgia
Dear Mr. Patterson:
In accordance with your request I have personally inspected the above captioned property for the purpose of
estimating the Market Value in the Fee Simple Interest. The effective date of this appraisal is October 19, 2007.
Submitted herewith is my report containing pertinent facts and data gathered in my investigation.
The method of appraising is detailed in the attached narrative report. As of October 19, 2007 it is my opinion that
the Market Value with Fee Simple Interest in the subject undeveloped secondary site (Tract A) of 1.117 acres is:
Five Hundred Eighty Five Thousand Dollars
($585,000)
It is my opinion that the Prospective Market Value in the Fee Simple Interest for the primary site (Tract B)
consisting of one proposed multi-tenant retail center situated on 2.530 acres on or about February 1, 2008, upon
completion of construction but un-stabilized and subject to prevailing market conditions and the attached
assumptions and limiting conditions is:
Four Million Sixty Thousand Dollars
($4,060,000)
It is my opinion that the Prospective Market Value in the Fee Simple Interest for the primary site (Tract B)
consisting of one proposed multi-tenant retail center situated on 2.530 acres on or about August 1, 2009, upon
completion of construction and at stabilized operations and subject to prevailing market conditions and the
attached assumptions and limiting conditions is:
Five Million Two Hundred Thirty Thousand Dollars
($5,230,000)
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The value rendered in this appraisal is based on a hypothetical condition. A hypothetical condition is that
which is contrary to what exists but is supposed for the purpose of this analysis. The prospective market
value estimated in this report is based on the completion of the multi-tenant retail center and land
improvements and has been determined on their supposed existence. The value estimate is a reflection of
the property as the property owner exhibited it to us. The value estimate in this report has been concluded
based on this hypothetical condition and would be directly impacted by any variations in these conditions
that have been supposed.
The undersigned appraiser states that his employment was not conditioned upon his producing a specific value or
a value within a given range. Further employment or the payment of the fee is not dependent upon producing
specified values.
It has been a pleasure to serve you in this matter.
Respectfully submitted,
FLETCHER & COMPANY
Jason D. Fletcher
State of Georgia
Certified General Appraiser #211251
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Table of Contents
SUMMARY OF SALIENT FACTS & CONCLUSIONS ……………………………….…... 6
INTRODUCTION ……………………………………………………………………………………….7
ASSUMPTIONS & LIMITING CONDITIONS……………………………………………………. 8
CERTIFICATION……………………………………………………………………………………9
APPRAISER COMPETENCY……………………………………………………………………… 10
DEFINITIONS ……………………………………………………............................……………. 11
ASSIGNMENT DESCRIPTION ...........................................................................…………………. 14
PROPERTY IDENTIFICATION…………………………………………………………………… 15
APPRAISAL OBJECTIVE & PROPERTY RIGHTS......................................………………… 15
INTENDED USE AND INTENDED USERS................................................…………………. 15
EFFECTIVE DATE OF APPRAISAL/REPORT DATE.................................. ……….. ………. 16
STATEMENT OF OWNERSHIP AND SALES HISTORY.............................………………… 16
THE SCOPE OF WORK………………………………………………………………………….. 17
IDENTIFICATION OF PROPERTY …………………………………………………………….. 19
PROPERTY DATA…………………………………………………………………………………. 20
DESCRIPTION OF SITE……………………………………………………………………. 20
DESCRIPTION OF IMPROVEMENTS…………………………………..………………….. 22
PHOTOGRAPHS OF SUBJECT PROPERTY…………………………………………………….. 24
SITE PLAN & BUILDING LAYOUT……………………………………………………………… 27
AREA & NEIGHBORHOOD OVERVIEW…………………………………………………….. 28
INTRODUCTION………………………………………………………………..........……………. 28
POPULATION ………………………………………………………………………….. ………. 28
AREA BUSINESS & RELATED ECONOMIC TRENDS………………………………………….30
MARKET ANALYSIS………………………………………………………………….………….. 31
LOCATION MAPS FOR SUBJECT PROPERTY…………………………………………………. 32
DEMOGRAPHIC & ECONOMIC PROFILE……………………………………………………… 35
HIGHEST AND BEST USE………………………………………………………………………….. 40
LAND AS IF VACANT…………………………………………………………..........…………… 40
LAND AS CURRENTLY IMPROVED……………………………………………………………. 41
VALUATION…………………………………………………………………………………… ………. 42
THE VALUATION PROCESS…………………………………………………………………….. 43
APPROACH TO VALUE……………………………………………………..............……………. 44
SALES COMPARISON APPROACH………………………………………............……………… 45
EXPLANATION OF ADJUSTMENTS……………………………………………........…….. 46
COST APPROACH…………………………………………………………………....……………. 48
LAND ANALYSIS………………………………………………………………………….. 49
EXPLANATION OF ADJUSTMENTS………………………………………………………. 50
REPLACEMENT COST…………………………………………………………………….. 52
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INCOME APPROACH………………………………………………………………………………53
INCOME ANALYSIS……………………………………………………………………….. 53
EXPENSE ANALYSIS……………………………………………………………………….54
CAPITALIZATION RATE ANALYSIS……………………………………………………… 56
DIRECT CAPITALIZATION TECHNIQUE…………………………………..………………58
RECONCILIATION AND FINAL ESTIMATE…………………………………………………. 60
CONCLUSION……………………………………………………………………………………… 61
ADDENDA……………………………………………………………………………............…………… 62
SUPPORTING DOCUMENTS FOR SUBJECT PROPERTY…………………………………….. 63
EXHIBIT “A” ENGAGEMENT LETTER…………………………………………………….. 64
EXHIBIT “B” LEGAL DESCRIPTION & PLAT……………………………………………… 70
EXHIBIT “C” FLOOD MAP………………………………………………………………….76
EXHIBIT “D” COUNTY TAX ASSESSMENT…………………………..........……………… 78
EXHIBIT “E” ZONING MAP & ORDINANCE………………………………………………. 80
SUPPORTING DOCUMENTS FOR COMPARABLE PROPERTIES………....…………………. 86
EXHIBIT “F” PROFILES FOR IMPROVED SALES…………..………………………………. 87
EXHIBIT “G” LOCATION MAP FOR IMPROVED SALES……………………………………93
EXHIBIT “H” PROFILES FOR LAND SALES…………………...................………………. 95
EXHIBIT “I” LOCATION MAP FOR LAND SALES………………………………......…….. 101
EXHIBIT “J” PROFILES FOR RENT COMPARABLES……………….......…………………. 103
EXHIBIT “K” LOCATION MAP FOR RENT COMPARABLES……………………………… 109
APPRAISER QUALIFICATIONS……………………………………………….......…………….. 111
RESUME & LICENSE FOR JASON D. FLETCHER…………………..........………………… 112
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Summary of Salient Facts and Conclusions
Intended User of Appraisal:
Haven Trust Bank
Property Type:
Proposed Multi-Tenant Retail Center
Property Address:
Lakemont Boulevard & Highway 81 east
McDonough, Henry County, Georgia
Parcel ID:
107-01040000 (portion)
Owner:
U.V. Hotels, LLC
Purchaser:
None
Site Size:
Tract B: Primary Site - 2.530 acres or 110,193 SF
Tract A: Secondary Site - 1.117 acres or 48,645 SF
Improvements:
Tract B: Primary Site
Single Story Multi-Tenant Retail Center – 25,500 SF – 19
Units (under construction)
Tract A: Secondary Site
None – Vacant Lot
Year Built:
2007 (presently under construction)
Zoning:
Primary Site: C-3 Heavy Commercial District
Secondary Site: C-3 Heavy Commercial District
Interest Appraised:
Fee Simple
Effective Date of Appraisal:
October 19, 2007
Date of Report
October 22, 2007
Final Estimates of Value:
Tract A:
Tract B:
Tract B:
$585,000
$5,230,000 (as if constructed and stabilized)
$4,060,000 (as if constructed and un-stabilized)
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Introduction
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Assumptions and Limiting Conditions
The appraisal is made subject to the following conditions and assumptions:
1. Any legal description or plats reported herein are assumed to be accurate. Any sketches,
plats or drawings included in this report are included to assist the reader in visualizing the
property. I have made no survey of the property and assume no responsibility in connection
with such matters.
2. No responsibility is assumed for matters legal in nature. Title is assumed to be good and
marketable and in fee simple unless discussed otherwise in this report. The property is
appraised as free and clear of existing liens, assessments and encumbrances, except as noted
in the attached report.
3. The appraiser does not assume responsibility for sub-surface soil conditions. No geological
reports have been furnished to the appraiser.
4. Unless otherwise noted, it is assumed that there are no encroachments, zoning or restriction
violations affecting the subject property.
5. The property is assumed to be under competent and aggressive management.
6. Information, estimates, and opinions used in this appraisal are obtained from sources
considered reliable; however, no liability for them can be assumed by the appraiser.
7. The value estimates reported herein apply to the entire property and any proration or
division of the total into fractional interests will invalidate the value estimate, unless such
proration or division of interests is set forth in the report.
8. This report may not be used for any purpose other than as stated in the report, by any other
than the client without previous consent of the appraiser and his client and then only with
proper qualifications.
9. The appraiser assumes the reader or user of this report has been provided with copies of all
leases and amendments, if any, encumbering this property.
10. Neither all nor any part of the contents of this report shall be conveyed to the public through
advertising, public relations, news sales or other media, without the prior written consent
and approval of the author. This pertains particularly to valuation conclusions, the identity
of the appraiser or firm with which he is associated.
11. The final value estimate has been concluded on the basis that the property is
environmentally compliant. Further the acreage was based on information provided by the
owner and/or public records. If the actual acreage or developable unit is different than the
amounts used in this report, the appraiser reserves the right to modify this report.
12. The final value estimate has been concluded on the basis that the subject is not subject to
flooding. For an official determination a certified survey is recommended.
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Certification
I certify that, to the best of my knowledge and belief:
-
The statements of fact contained in this report are true and correct.
-
Jason Fletcher visited and inspected the subject property and the comparables used in the
report under review.
-
The reported analyses, opinions, and conclusions in this review report are limited only by
the assumptions and limiting conditions stated in this review report, and are my personal,
unbiased professional analyses, opinions, and conclusions.
-
I have no present or prospective interest in the property that is the subject of this report, and
I have no personal interest or bias with respect to the parties involved. I have no bias with
respect to the property that is the subject of this report.
-
My engagement in this assignment or in any future assignment is not contingent upon
developing or reporting predetermined results.
-
My compensation is not contingent upon the 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.
-
My analyses, opinions, and conclusions were developed, and this review report was prepared in
conformity with the Georgia Real Estate Appraiser Classification and Regulation Act and the rules
and regulations of the Georgia Real Estate Appraisers Board.
_____________________________________________
Jason D. Fletcher – Certified General Appraiser #211251
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Appraiser Competency
- Jason D. Fletcher is experienced in the valuation of commercial, retail, office, industrial, land
acquisition and development, multi-family, condemnation, recreational and special purpose
properties. For additional information on the competency of the appraiser, please review the
Qualifications of Appraiser in this report.
The appraiser has extensive experience in appraising various types of commercial development and
multi-tenant retail centers similar to the subject property and is considered to be competent in
performing an appraisal on the subject property. The appraiser is also considered to be competent in
the area of which the subject property is located.
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Definitions
Market Value
Market Value is defined as:
“The most probable price which a property should bring in a competitive and open market under
all conditions requisite to a fair sale, the buyer and seller each acting prudently and
knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in this
definition are the consummation of a sale as of a specified date and the passing of title from
seller to buyer under conditions whereby:
1. buyer and seller are typically motivated;
2. both parties are well informed or well advised, and acting in what they consider their best
interests;
3. a reasonable time is allowed for exposure in the open market;
4. payment is made in terms of cash in United States dollars or in terms of financial
arrangements comparable thereto; and
5. 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.”2
Fee Simple Interest or Estate
“Absolute 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.”3
Real Property
“All interests, benefits, and rights inherent in the ownership of physical real estate; the bundle of
rights with which the ownership of the real estate is endowed.” In some states, real property is
defined by statute and is synonymous with real estate. See also personal property; real estate.4
Improvements
“Buildings or other relatively permanent structures or developments located on, or attached to,
land.”5
2 Uniform Standards of Professional Appraisal Practice, 2006 Edition (The Appraisal Foundation), p. 194 (as
published in Title XI of the Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA) of 1989).
3 The Dictionary of Real Estate Appraisal, 4th Ed., (Chicago Appraisal Institute, 2002), p. 113
4 Ibid, 234.
5 Ibid, 142
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Personal Property
“Identifiable tangible objects that are considered by the general public as being ‘personal’ -for
example, furnishings, artwork, antiques, gems and jewelry, collectibles, machinery and
equipment; all tangible property that is not classified as real estate.”6
Intangible Personal Property
“Property that has no physical existence beyond merely representational, nor any extrinsic value;
includes rights over tangible real and personal property, but not rights of use and possession. Its
value lies chiefly in what it represents. Examples include corporate stock, bonds, money on
deposit, goodwill, restrictions on activities (for example, patents and trademarks), and franchises.
Note: Thus, in taxation, the rights evidenced by outstanding corporation stocks and bonds
constitute intangible property of the security holders because they are claims against the assets
owned and income received by the corporation rather than by the stockholders and bondholders;
interests in partnerships, deeds, and the like are not ordinarily considered intangible property for
tax purposes because they are owned by the same persons who own the assets and receive the
income to which they attach.”7
Goodwill
“The intangible asset that arises as a result of a name, reputation, customer patronage, location,
products, and similar factors that have not been separately identified and/or valued but that
generate economic benefits.8
Exposure Time
“The estimated length of time the property interest being appraised would have been offered on
the market prior to a hypothetical consummation of a sale at market value on the effective date of
the appraisal.9
It is our opinion that the estimated exposure time for the subject property prior to the effective
date of this report would have been less than twelve months.
6 Uniform Standards of Professional Appraisal Practice, 2006 Edition (The Appraisal Foundation),
7 The Dictionary of Real Estate Appraisal, 4th Ed., (Chicago Appraisal Institute, 2002), p. 148.
8 The Dictionary of Real Estate Appraisal, 4th Ed., (Chicago Appraisal Institute, 2002), p. 128.
9 Uniform Standards of Professional Appraisal Practice, 2006 Edition (The Appraisal Foundation),
p.4.
p. 90.
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Marketing Time
“an 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 an
appraisal.”10
With regard to marketability, primary consideration has been given to the subject's overall
location, features, the socioeconomic characteristics of the area, and probable near-term and
long-term market demand for the property.
The marketing time for the appraised is based on a review of real estate sales, some of which are
provided later in this report, together with conversations with brokers and other real estate
professionals in the subject market.
The estimated marketing time is estimated less than twelve months based on current market
conditions.
Market conditions are considered favorable with reasonable interest rates and no financing
concessions necessary.
10 Uniform
Standards of Professional Appraisal Practice, 2006 Edition (The Appraisal Foundation), p. 128.
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Assignment Description
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Property Identification
The subject property is vacant land located at Lakemont Boulevard & Georgia Highway 81 east,
McDonough, Georgia and is a portion of a tract consisting of 62.80 acres. The subject site is a
corner lot at Lakemont Boulevard and Georgia Highway 81. The subject property is identified as
Tract A, which is the vacant lot that consists of 1.117 acres and Tract B, which is the multitenant retail center and consists of 2.530 acres on a recent survey provided by the owner.
The total subject property site contains approximately 3.647 acres, or 158,820 square feet. The
subject tract plans are to construct a 25,500 SF multi-tenant retail center and designate 2.646
acres to the center, which leaves 1.00 acre for future development. It is identified by Henry
County Assessor’s Office as Parcel Number 107 01040000. Below is a copy of the tax map.
Appraisal Objective and Property Rights
The objective of this appraisal is to estimate the current fee simple market value of the real
estate.
Intended Use and Intended Users
Per Standard Rule 1-2 of USPAP, the intended use and users of the appraisal must be stated
Haven Trust Bank needs the market value of the Fee Simple Interest in the subject property for
collateral evaluation purposes. The intended user of the report would be Haven Trust Bank. All
information contained within this report is confidential between the client and the undersigned
appraiser(s). Any information contained in this report cannot be released to a third party without
written permission from the client only.
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Effective Date of the Appraisal / Report Date
The final estimate of market value represents our opinion estimates as of October 19, 2007, the
most recent date of the real estate inspection. The report date is October 22, 2007.
Statement of Ownership and Sales History
Standards Rule 1-5 of USPAP requires an analysis of all agreements of sale, options, or listings,
and at least a three-year sales history of the subject property. There have been three sales in the
last three years. According to Henry County Deed Book 9375, Page 202, the subject property
was purchased by Adair Dickerson, Jr. and Charles R. Dickerson from the Estate of Milton R.
Hardeman on June 15, 2006 for $785,700. According to Henry County Deed Book 10074, Pages
203-204, VIP Development, LLC purchased the subject property from Adair Dickerson, Jr. and
Charles R. Dickerson on March 22, 2007 for $1,031,200. According to Deed Book 10098, Pages
226-228, U.V. Hotels, LLC purchased the subject property from VIP Development, LLC on
March 23, 2007 for $1,166,800. There have been no other transfers of any interests, in whole or
part, in the past three years. There are no current executed agreements of sale, options, or
listings known to the appraiser. A title search is recommended for official determination.
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The Scope of Work
According to Advisory Opinion 28 of USPAP, an appraisal must “1) identify the problem to be
solved; 2) determine and perform the scope of work necessary to develop credible assignment
results; and 3) disclose the scope of work in the report.”1
The primary purpose of the appraisal is to meet the requirements of Title XI of the Federal
Financial Institutions Reform, Recovery, and Enforcement Act (“FIRREA”) of 1989 with respect
to real estate-related financial transactions as we understand these requirements. Haven Trust
Bank needs an appraisal to assist it with collateral valuation of the subject property. This
Summary appraisal report covers the necessary collection and analysis of data, property
inspections and the application of accepted approaches to value. This report sets forth the
rationale, assumptions, conditions and significant facts upon which the final value is based. All
of the generally accepted approaches to value have been considered within this report.
Typically, the Cost, Sales Comparison and Income Approaches are applicable and reliable
valuation methods. Our analysis has determined the highest and best use of the property is for the
proposed use as a multi-tenant retail center. Therefore, the Sales Comparison, Cost Approach,
and Income Approaches to value have been performed in this report for the subject primary site.
It has been concluded that the Sales Comparison Approach is the only applicable approach for
the subject secondary site since there are no improvements (real or proposed) in order to utilize
the Cost and Income approaches to value.
The following is a brief discussion of the various inspections and analysis and data collection
and analysis considered and utilized in arriving at a conclusion of value.
1. An inspection and analysis of area and neighborhood factors which would have an impact on
the subject property.
2. An inspection and analysis of the physical features of the subject property and any factors
which would have a positive or negative influence on value.
3. Property consideration of the present zoning and a discussion of highest and best use of the
subject.
4. The collection, analysis, and verification of market data considered pertinent to arriving at the
value estimates made by the Sales Comparison, Cost and Income Approach (when applicable).
5. The value indications for the three approaches are then reconciled into a final estimate of
value.
6. An inspection and analysis of the physical features of the subject property and any factors
which would have a positive or negative influence on value.
1 Ibid.
P. 213.
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7. Property consideration of the present zoning and a discussion of highest and best use of the
subject.
8. The collection, analysis, and verification of market data considered pertinent to arriving at the
value estimates made by the Sales Comparison, Cost and Income Approach (when applicable).
9. The value indications for the three approaches are then reconciled into a final estimate of
value.
The appraisal has been prepared in accordance with Uniform Standards of Professional Appraisal
Practice requirements (USPAP).
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Identification of Property
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Property Data
Description of Site
Location:
Lakemont Boulevard & Highway 81 east
McDonough, Henry County, Georgia
Land Area:
Approximately 3.647 acres or 158,820 square feet. The
subject primary site, which contains the development of the
retail center contains 2.53 acres and the secondary vacant
site contains 1.117 acres.
Shape:
The subject property is considered rectangular in shape.
Frontage:
There is 807.15’ of frontage on Lakemont Boulevard and
279.60’ of frontage on Highway 81. The 1.117 acre site or
secondary site will be a prime corner lot that will have
direct frontage and exposure on Highway 81 and Lakemont
Boulevard. The primary site of 2.530 acres will only have
frontage and access on Lakemont Boulevard but will have
good exposure from Highway 81.
Topography:
The site is located slightly above street level and is
considered basically level. The tract does slope towards the
rear into a low area. This area is configured for the
detention area for the subject development. The tract
appears to have adequate drainage at the present time.
Upon development of the site, a storm water drainage
system will be constructed to ensure adequate drainage.
Utilities:
Water, Sewer, and Electricity are all available to the
property.
Environmental:
There were no visible signs of hazards from the visit to the
site. This report assumes that there are no environmental
hazards present that would impact the value of the property.
Flood Plain:
According to the FLOODSCAPE Flood Map.
13151C0159C, dated May 16, 2006, the subject is located
in Zone X. Zone X is defined as areas determined to be
outside the 100- year floodplain. For official
determination, a certified survey is recommended.
Easements:
The appraiser is not aware of any detrimental easements or
encroachments encumbering the site other than typical
utility and access easements.
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Real Estate
Taxes:
The subject property taxes at the present time reflect the
assessed value of the subject tract as currently vacant and
consisting of 30+ acres. The assessed value is 40% of the
fair market value in Henry County. The city millage rate is
37.509 mills (.037509). Because the subject improvement
is under construction, the taxes will have to be estimated to
reflect the impact on the proposed improvement. An
analysis has been performed to estimate the property taxes
for the subject site after completion of the proposed
improvements. Similar improved multi-tenant retail centers
in Henry County were used to derive a reasonable estimate
of property taxes due for the subject property.
Parcel ID
Location
Size
051-01-051-000
M20-09-001-002
091-01-021-004
054-01-030-041
005401030042
600-624 Eagles Landing Pky
232 Keys Ferry Street
577-593 Jonesboro Rd
1971-2025 Jonesboro Rd
2081 Jonesboro Road
21,600
7,800
11,091
33,600
19,774
2007 Tax
Value
$3,100,800
$617,800
$1,030,400
$2,683,200
2,206,200
2006Taxes
Tax Value/SF
Taxes/SF
$46,523.16
$9,269.22
$15,459.71
$40,257.66
33,100.95
$143.55
$79.21
$92.90
$79.86
$111.57
$2.15
$1.19
$1.39
$1.20
$1.67
Based on the comparable property tax data presented above,
an estimated tax amount of $1.20 per SF of building area is
appropriate for the subject property. The annual real property
taxes for the subject property are estimated at $30,600
(rounded). (25,500 SF x $1.20/SF)
Zoning:
The subject site is zoned C-3, Heavy Commercial District
by the City of McDonough. The use as a proposed multitenant retail center has a compatible use with the
surrounding neighborhood, which consists mostly of
commercial developments such as retail, restaurants, office,
convenience stores and industrial distribution and has
visibility on a main corridor in Henry County, Highway 81.
For official zoning and allowances, a letter of permissible
uses must be obtained from the Henry County Planning and
Zoning Department. The excerpt from the Henry County
Zoning Ordinance is located in the Addenda section of this
report.
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Description of Improvements:
The subject site is currently undergoing construction of a multi-tenant retail center. Upon
completion, the site will be improved with one individual multi-tenant retail building for a total
rentable area of 25,500 square feet and will contain a combined total of 19 units. The building will
have an appealing architectural façade and will be constructed of good quality. The subject building
will be constructed on a steel frame with a mixture of brick and stucco for the exterior finish and
decorative stucco crown parapets. The entire front will be typical storefront glass and doors. The
overall design is rectangular in shape. The end caps of the building will be two story towers
constructed strictly for design and appeal. The second story tower levels will not have any finished
space. The interior finish will be standard retail finish (carpet, vinyl, drywall partitions, acoustical
tile ceilings, fluorescent lighting, etc.) The interior finish will be constructed at the time of tenant
placement.
Construction Features:
Foundation:
Poured reinforced concrete slab on grade
Structural:
Steel framing
Exterior Finish:
Mixture of masonry and stucco
Roof Covering:
Metal corrugated panels on steel framing – Copper accent –
gutters & downspouts
Interior Finish:
Painted gypsum board and walls – suspended acoustical tile
ceiling – six panel hollowcore wood doors - storefront glass
doors for entrance – wood trim around doors – sprinkler
system
HVAC:
Each unit will be equipped with one central heating &
cooling system
Electrical & Plumbing:
150 amp service for each unit – Assumed adequate.
Fluorescent fixtures mounted in ceiling grid. (19) Toilet
rooms, Adequate water heaters – sink & toilet in each unit
– 38 fixtures total
Windows:
Storefront glass will be installed for each unit – each unit
will have a decorative awning
Floors and Floor Coverings:
Reinforced concrete. Carpet throughout – vinyl/tile where
appropriate (restrooms)
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Site Improvements:
Site improvements consist of a combination of asphalt
paving, concrete walkways and curbing, light poles,
signage, and landscaping
Physical Condition:
The improvements will be newly constructed; therefore, it
will not suffer from any types of physical depreciation.
The building for the subject development is considered to
be a class A, retail center, typical of newly constructed
nationally anchored shopping centers.
Functional Utility:
Since the property will be newly constructed, the subject
will represent a modern professional retail center. The
proposed improvements are considered to be of good type
of construction and parking will be typical of good
facilities in the market. The building layout will be
designed for multi-tenant occupancy and is considered
functional when compared to competing professional retail
centers in the market.
Actual Age, Effective Age,
Remaining Economic Life:
The subject development began construction in 2007, and
will have a physical age of 0 years. The total economic life
is estimated at 55 years, of which 55 is remaining.
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Photographs of Subject Property
(Tract B – Multi-Tenant Retail Center)
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Photographs of Subject Property
(Tract A – Vacant Lot and Highway views)
Facing East
Facing West Towards McDonough
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Site Plan & Building Layout
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27
Area & Neighborhood Overview
Introduction
The purpose of this analysis is to review historic and projected economic and
demographic data to determine whether McDonough, Henry County, and the subject
neighborhood will experience future economic stability, or decline.
The subject property is located at the corner of Georgia Highway 81 (a.k.a. Keys Ferry
Street) and Lakemont Boulevard, which is a newly constructed road in McDonough,
Georgia of Henry County. Highway 81 serves as a main corridor through the county and
consists mostly of commercial development within the city limits. The subject property
is located approximately 1 mile east of the downtown square of McDonough. The
immediate neighborhood is comprised mostly of commercial development such as retail,
restaurants, office, convenience stores, and industrial distribution. The land on the
opposite corner of Lakemont Boulevard and Highway 81, which consists of 31 acres just
sold. This purchaser of this land plans to develop a large scale shopping center with
national anchors and tenants. There will be a mixture of multi-tenant centers similar to
the subject and freestanding retail buildings such as Best Buy and other national chains.
Commercial development has been rapid around the subject property out to Interstate 75,
which is located only 2-3 miles southwest. Further, Henry County is included in the 28
County Atlanta Metropolitan Statistical Area (MSA).
Population:
In 1990, Henry County’s population was 58,741; in 2000 the population had grown to
119,341, indicating a compound annual growth rate of 5.07% between 1990 and 2000.
The year-end 2005 population estimate was 167,848, indicating a compound annual
increase of 5.78% between 2000 and 2005.
The following table illustrates historical population trends for Henry County and the State
of Georgia.
City of
McDonough
Henry
County
State
of Georgia
2005
2000
1990
15,523
8,493
2,929
Annual % Change
from.
…..1990 to 2005
5.40%
167,848
119,341
58,741
4.33%
9,072,576
8,186,453
6,478,216
2.1%
Source: US Census Bureau
Fletcher & Company
Real Estate Appraisals & Consultation
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Between 2000 and 2005, the population in Henry County grew at an estimated annual
compound rate of 5.78%, while the State of Georgia grew at a rate of 1.95% for the same
period. The city of McDonough grew at an astonishing 9.05% for the same period. Given
the recent compound increase in the population base for Henry County, the population
growth trends foreshadow a healthy economic climate through the near future.
The highest concentrated age group of the county’s inhabitants is between the ages of 0
and 19, or 30.5%. In terms of household size, at the end of 2000 the number of
households stood at 57,814 in Henry County with an average household size of 2.89
persons.
A demographic profile for Henry County appears in the chart below.
Demographic
Profile
Category
Age Distribution
0-19
20-34
35-54
55+
Estimated
Average
Household Size:
Median Family Income:
$15,000 - $34,999
$35,000 - $49,999
$50,000 & Over
Henry
County
State of
Georgia
30.5%
25.0%
30.3%
14.2%
29.5%
23.1%
29.7%
17.7%
2.89 persons
2.65
persons
17.0%
16.9%
60.5%
33.7%
17.0%
51.6%
$58,962
$49,280
Median Family Income:
Source:
US Census Bureau – 2000 & 2005 Data
May not add due to rounding.
As the year end 2000 statistics indicates that 60.5% of the households in Henry County
earned over $50,000 per annum. As indicated in the table above, Henry County was
substantially above the state of Georgia in median household income.
Fletcher & Company
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Area Business and Related Economic Trends
According to the US Census Bureau, the number of employed people in Henry County in
2005 was 81,057, resulting in an unemployment rate of 7.7% or 6,735 persons. A
comparison of the major components of the economic base for 2005 is presented in the
table below.
Henry County
Employment Sector
Agriculture
Construction
Manufacturing
Wholesale Trade
Retail Trade
Transportation
Information
Finance, Insurance &
Real Estate
Professional Services
Educational
Arts & Entertainment
Other Services
Public Administration
Total
State of Georgia
139
6,627
6,265
3,910
9,632
10,152
2,322
5,482
.4%
8.2%
7.7%
4.8%
11.8%
12.5%
2.9%
6.7%
53,201
304,710
568,830
148,026
459,548
231,304
135,496
251,240
1.4%
7.9%
14.8%
3.9%
12.0%
6.0%
3.41%
6.5%
6,842
12,932
7,118
3,047
6,589
81,057
8.4%
15.9%
8.8%
3.8%
8.1%
100%
362,414
675,593
274,437
181,829
193,128
3,821,756
9.4%
17.6%
7.1%
4.7%
5.0%
99.8%
Source: US Census Bureau, 2002 Economic Census; May not add due to rounding
In summary, Henry County has experienced exponential growth. However, the
Metropolitan Atlanta economy continues to send mixed messages, which is reflective as
the national economy as a whole. Unemployment rates for both Atlanta the state of
Georgia have recently remained stable; however, as two automotive plants close, the
Bellsouth/AT&T merger, and the fate of Delta Airlines and its attempt to restructure
under bankruptcy protection, long-term economic predictions are not possible. Yet, given
the past performance in the Henry County, the local economy, as well as a healthy
economic improvement is anticipated in the foreseeable future.
Fletcher & Company
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Market Analysis
Henry County has experienced a tremendous growth in population and in return residential
and commercial development has significantly increased over the past five years. The
county has recently been ranked as one of the fastest growing counties in the state as well as
the nation.
The growth of the county started in McDonough and Stockbridge and has spread in all
directions of the county over the past five years. Henry County is partly responsible for the
regions development boom. Other counties in the region that are considered sub markets of
Atlanta has experienced a considerable amount of residential and commercial development
over the past four years. Less populated counties are starting to experience an over supply
of new construction, however, Henry County seems to still be thriving from population
growth.
Henry County is accessible by approximately 8-10 exits off I-75 and I-675 and is located
approximately 20-25 miles south of the central business district of Atlanta, which has been a
major factor for the substantial growth of the county. The development trend in the county
seems to be stable into the foreseeable future. A new regional retail mall has just begun
construction near the intersection of Highway 81 and Highway 20 on the west side of I-75
Commercial activity in this area has been substantial over the past three years.
Supply and demand for commercial property and vacant land tracts appear to be in balance
at the present time. Occupancy levels for most retail and office use are 85% or better, even
with the development of many small strip centers and office parks throughout the county.
The absorption of commercial real estate around the interstate and major thoroughfares has
been impressive over the past three years in Henry County. As vacant land is becoming
scarce around these major thoroughfares and interstate intersections, the price of vacant
commercial land has doubled over the past three years in these areas. The demand for these
tracts has created a price increase in commercial land throughout the county.
In conclusion, the subject’s immediate neighborhood is currently experiencing exponential
growth. Given the close proximity to I-75 and good access to Atlanta and its surrounding
metropolitan area as well as given the quality of developments, positive growth trends are
anticipated in the future.
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Location Maps of Subject Property
Fletcher & Company
Real Estate Appraisals & Consultation
32
Site Map
Lat: 33.441844
Lon: -84.126380
©2007 ESRI
Prepared By: Fletcher & Company
October 21, 2007
Latitude 33.4418
Longitude -84.1264
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33
Aerial of Subject Property & Neighborhood
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Demographic & Economic Profile
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Graphic Profile - Appraisal Version
Prepared by Fletcher & Company
Hwy 81
Latitude:
33.442906
Longitude:
-84.127035
Radius:
3.0 mile
Site Type: Radius
Households
2007 Households by Income
15000
14000
13000
12000
$100K-$150K (13.6%)
11000
$150K+ (7.1%)
$75K-100K (19.2%)
10000
9000
<$15K (8.0%)
8000
14132
7000
$15K-$25K (5.3%)
6000
10460
5000
$25K-35K (8.3%)
$50K-75K (23.1%)
4000
3000
5808
$35K-$50K (15.2%)
2000
1000
0
2000
2007
2012
2007 Population by Age
45-54 (13.4%)
2007 Employed 16+ by Occupation
55-64 (8.4%)
65+ (9.3%)
Construction (7.2%)
Farm/Fish (0.2%)
Maintenance/Repair (5.3%)
Production (4.2%)
Transportation (7.9%)
<5 (8.5%)
Admin Support (17.1%)
35-44 (17.2%)
Mgmt/Business. (15.2%)
Sales (10.9%)
5-19 (23.0%)
25-34 (14.3%)
Services (13.2%)
Professional (18.8%)
20-24 (6.0%)
2007 Owner Occupied HUs by Value
$200-299K (26.5%)
$300-399K (6.4%)
$400-499K (2.9%)
$500K+ (2.3%)
<$100K (16.2%)
$100-199K (45.7%)
Source: U.S. Bureau of the Census, 2000 Census of Population and Housing. ESRI forecasts for 2007 and 2012.
©2007 ESRI
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10/24/2007 36
Page 1 of 1
Retail Goods and Services Expenditures
Prepared by Fletcher & Company
Hwy 81
Site Type: Radius
Top Tapestry Segments:
Aspiring Young Families
Up and Coming Families
Cozy and Comfortable
Sophisticated Squires
Family Foundations
Apparel and Services
Men's
Women's
Children's
Footwear
Watches & Jewelry
Apparel Products and Services1
Computer
Computers and Hardware for Home Use
Software and Accessories for Home Use
Entertainment & Recreation
Fees and Admissions
Membership Fees for Clubs2
Fees for Participant Sports, excl. Trips
Admission to Movie/Theatre/Opera/Ballet
Admission to Sporting Events, excl. Trips
Fees for Recreational Lessons
TV/Video/Sound Equipment
Community Antenna or Cable Television
Color Televisions
VCRs, Video Cameras, and DVD Players
Video Cassettes and DVDs
Video Game Hardware and Software
Satellite Dishes
Rental of Video Cassettes and DVDs
Sound Equipment3
Rental and Repair of TV/Sound Equipment
Pets
Toys and Games
Recreational Vehicles and Fees4
Sports/Recreation/Exercise Equipment5
Photo Equipment and Supplies6
7
Reading
Food
Food at Home
Bakery and Cereal Products
Meat, Poultry, Fish, and Eggs
Dairy Products
Fruit and Vegetables
Snacks and Other Food at Home8
Food Away from Home
Alcoholic Beverages
Nonalcoholic Beverages at Home
©2007 ESRI
33.9%
18.9%
16.3%
12.4%
8.7%
Demographic Summary
Population
Households
Families
Median Age
Median Household Income
Latitude:
33.442906
Longitude:
-84.127035
Radius:
3.0 mile
2007
29,273
10,460
7,757
33.9
$62,557
2012
39,316
14,132
10,261
34.2
$73,639
Spending
Potential
Index
Average
Amount
Spent
Total
92
96
88
98
81
107
113
$2,538.51
$473.80
$844.50
$429.87
$411.78
$211.46
$167.10
$26,552,825
$4,955,941
$8,833,476
$4,496,449
$4,307,237
$2,211,856
$1,747,866
104
108
$228.23
$32.42
$2,387,300
$339,137
102
107
106
$3,494.83
$650.92
$167.90
$36,555,964
$6,808,641
$1,756,263
107
105
111
107
101
99
106
104
104
105
99
106
103
$121.34
$157.81
$63.91
$139.96
$1,179.79
$661.77
$145.67
$40.31
$62.97
$34.63
$1.52
$63.54
$163.68
$1,269,212
$1,650,681
$668,529
$1,463,956
$12,340,572
$6,922,064
$1,523,737
$421,690
$658,705
$362,279
$15,865
$664,648
$1,712,105
98
100
104
101
$5.69
$440.96
$188.68
$460.99
$59,479
$4,612,486
$1,973,566
$4,821,933
93
$214.05
$2,238,978
105
$144.06
$1,506,848
101
$215.39
$2,252,940
100
99
99
98
98
99
100
$8,415.50
$4,973.68
$711.87
$1,287.93
$541.68
$867.36
$1,564.84
$88,026,092
$52,024,693
$7,446,153
$13,471,698
$5,666,023
$9,072,616
$16,368,203
102
$3,441.82
$36,001,399
100
98
$620.94
$427.44
$6,495,024
$4,471,030
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10/24/2007 37
Page 1 of 3
Retail Goods and Services Expenditures
Prepared by Fletcher & Company
Hwy 81
Site Type: Radius
Latitude:
33.442906
Longitude:
-84.127035
Radius:
3.0 mile
Spending
Potential
Index
Average
Amount
Spent
Total
Financial
Investments
Vehicle Loans
109
104
$1,625.73
$6,373.38
$17,005,153
$66,665,597
Health
Nonprescription Drugs
Prescription Drugs
Eyeglasses and Contact Lenses
98
93
101
$119.70
$538.43
$83.56
$1,252,027
$5,631,993
$874,035
109
$9,485.98
$99,223,326
102
102
$2,015.11
$381.13
$21,078,094
$3,986,625
101
$4,410.23
$46,131,026
Home
Mortgage Payment and Basics9
Maintenance and Remodeling Services
Maintenance and Remodeling Materials10
Utilities, Fuel, and Public Services
Household Furnishings and Equipment
104
$144.20
$1,508,342
107
103
100
$687.26
$93.47
$294.21
$7,188,702
$977,665
$3,077,479
96
$101.08
$1,057,297
98
108
86
$36.06
$11.11
$40.90
$377,169
$116,204
$427,781
114
97
$477.18
$433.12
$4,991,294
$4,530,463
Housekeeping Supplies
104
100
$55.56
$768.15
$581,140
$8,034,835
Insurance
Owners and Renters Insurance
Vehicle Insurance
Life/Other Insurance
Health Insurance
104
101
101
96
$496.08
$1,480.40
$645.21
$1,894.23
$5,188,967
$15,485,008
$6,748,896
$19,813,666
Personal Care Products16
101
$479.27
$5,013,193
School Books and Supplies17
Smoking Products
103
$124.72
$1,304,622
94
$456.32
$4,773,120
101
$5,827.13
$60,951,782
100
102
$2,027.70
$1,087.94
$21,209,749
$11,379,850
104
103
108
103
$425.74
$421.62
$47.03
$486.52
$4,453,272
$4,410,102
$491,972
$5,088,961
Household Textiles11
Furniture
Floor Coverings
Major Appliances12
Housewares13
Small Appliances
Luggage
Telephones and Accessories
Household Operations
Child Care
Lawn and Garden14
Moving/Storage/Freight Express
15
Transportation
Vehicle Purchases (Net Outlay)18
Gasoline and Motor Oil
Vehicle Maintenance and Repairs
Travel
Airline Fares
Lodging on Trips
Auto/Truck/Van Rental on Trips
Food and Drink on Trips
Data Note: The Spending Potential Index (SPI) is household-based, and represents the amount spent for a product or service relative to a national average of 100. Detail may not
sum to totals due to rounding.
Source: Expenditure data are derived from the 2002, 2003 and 2004 Consumer Expenditure Surveys, Bureau of Labor Statistics. ESRI forecasts for 2007 and 2012.
©2007 ESRI
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10/24/2007 38
Page 2 of 3
Traffic Map
highway 81
Prepared by Fletcher & Company
October 22, 2007
Source: © 2007 MPSI Systems Inc. d.b.a. DataMetrix®
©2007 ESRI, MPSI
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Page 1 of 1
39
Highest and Best Use
Highest and Best Use is a real estate valuation principle that dictates that the market
trends to put property to its most profitable use, and that use which provides the greatest
benefits of ownership. The Appraisal of Real Estate, 12th Edition, defines highest and
best use as:
The reasonably probable and legal use of vacant land or an improved property, which is
physically possible, appropriately supported, financially feasible, and that results in the
highest value.
Because the principle of highest and best use reflects the actions of the market, generally
accepted professional appraisal practice requires that the subject property must be valued
under this premise. If the property being appraised is improved with a structure, two
highest and best use analyses are required; the highest and best use of the land as though
vacant, and the highest and best use of the total property as developed. The highest and
best use analysis is developed using the following four criteria. The highest and best use
must be Legally Permissible, Physically Possible, Financially Feasible, and Maximally
Productive.
Land as if Vacant
Physically Possible – As previously mentioned, the subject property contains 3.647
acres. Many uses would be physically possible including commercial, office, service, or
other compatible use; however, developments requiring large parcels would not be
possible due to the size and configuration of the site.
Legally Permissible - In estimating the highest and best use of a property, the legally
permissible uses are typically determined by the zoning constraints of the jurisdiction in
which the property is located. The subject parcel is located within Henry County and is
under this jurisdiction of Henry County. The property is zoned C-3, Heavy Commercial
District. The subject is located in a neighborhood that is predominately composed of
retail, restaurants, office, convenience stores, and industrial distribution on the primary
streets. According to the Henry County’s Planning and Zoning Department, the subject’s
current use as vacant land is a legal and conforming use and is compatible with the
surrounding land uses. For official zoning and allowances, a letter of permissible uses
must be obtained from the Henry County’s Planning and Zoning Department.
Financially Feasible and Maximally Productive Uses - After determining which uses
are physically possible and legally permissible, it is necessary to determine what potential
uses are economically feasible. A use that produces an overall positive return, be it cash
flow or return on investment, is economically feasible. From the list of economically
feasible uses, the one use that produces the greatest return is chosen. This is the
maximally productive use and, therefore, is the highest and best use of the property. This
thought process could be described as a detailed process of elimination.
Fletcher & Company
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Maximally Productive – Of all the financially feasible uses, each use is analyzed to
determine which use will return the highest profit or which use will be the maximally
productive use.
Highest and Best Use as if Vacant - Of the available alternative uses that are physically
and legally acceptable, the best alternative use for the subject site as if vacant would be to
hold undeveloped until construction of a new retail/service development is determined
financially productive.
Land as Proposed Improved
The subject property has begun construction of the proposed multi-tenant retail center.
Physically Possible and Legally Permissible Uses - The proposed subject facility will
be considered to be functional and in good condition. Therefore, it would be physically
possible to leave the improvements as they are.
Economically Feasible and Maximally Productive Uses – The property is currently
proposed as a multi-tenant retail center. The highest and best use, as improved, is
considered to be its current proposed use. The improvements represent a higher value
than the land alone.
Therefore, based primarily upon the type and quality of the subject improvements, the
subject’s conformance with types and quality of land uses in the area, the lack of any
apparent alternative use that would provide a higher return to the land, and demonstrated
market acceptance of the subject property, as reflected in the valuation section of this
report, it is my opinion that the current Highest and Best Use for the improved property is
the proposed use as a multi-tenant retail center.
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Valuation
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The Valuation Process
The valuation process is the orderly program in which data used to estimate the value of the
subject property are acquired, classified, analyzed, and presented. The first step in the
process is to define the appraisal problem, i.e., identify the real estate, the effective date of
value estimate, the property rights being appraised, and the type of value sought. Once this
has been accomplished, the Appraiser collects and analyzes the factors that affect the market
value of the subject property. These factors are addressed in the area and neighborhood
analysis, the site and improvement analysis, and the highest and best use analysis, and in the
application of the three approaches to value: The sales comparison approach, the cost
approach, and the income capitalization approach.
The sales comparison approach is used to estimate the value of the land as though vacant
and/or the property as improved. The Appraiser gathers data on sales of comparable
properties and analyzes the nature and conditions of each sale, making logical adjustments
for dissimilar characteristics. Typically, a common denominator is found. For land value,
the unit of comparison is usually price per square foot or per acre.
The second approach applied is the cost approach to value. Accrued depreciation is
deducted from the new cost of the improvements and this figure is added to the land value to
indicate the value of the whole property. The third approach applied is the income
capitalization approach and is predicated on the assumption that a definite relationship exists
between the amount of income a property can earn and its value. In other words, value is
created by the expectation of benefits to be derived in the future. In this approach, the
anticipated annual net income of the subject property is processed to produce an indication
of value. Net income is the income generated before payment of any debt service. Income
is converted into value through capitalization, in which net income is divided by a
capitalization rate. Factors such as risk, time, interest on capital invested, and recapture of
the depreciating assets are considered in selecting the capitalization rate.
The final step in the valuation process is the reconciliation or correlation of the value
indications. In the reconciliation, the Appraiser considers the relative applicability of each
approach used, examines the ranger of the value indications, and gives most weight to the
approach that appears to produce the most reliable solution to the appraisal problem. The
purpose of the appraisal, the type property, and the adequacy and reliability of each
approach to value are all taken into consideration. To apply the three approaches to value,
information pertaining to the fair market value of the subject property must be derived from
the market because the Appraiser seeks to anticipate the actions of buyers and sellers in the
market.
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Real Estate Appraisals & Consultation
43
Approach To Value
Typically, the Cost, Sales Comparison and Income Approaches are applicable and
reliable valuation methods. Our analysis has determined the highest and best use of the
property is for the proposed use as a multi-tenant retail center. Therefore, the Sales
Comparison, Cost Approach, and Income Approaches to value have been performed in
this report for the subject primary site (Tract B). It has been concluded that the Sales
Comparison Approach is the only applicable approach for the subject secondary site
(Tract A) since there are no improvements (real or proposed) in order to utilize the Cost
and Income approaches to value.
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Real Estate Appraisals & Consultation
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Sales Comparison Approach
This indication of value for the subject property is based on an analysis of the sales of
similar properties located in similar market areas. A search was conducted for the most
comparable or similar type facilities in the subject property’s market area. The following
sales are considered to be the most comparable and current sales data from which to
compare the subject and have been adjusted for accordingly. A comparable analysis is set
forth as follows:
IMPROVED SALES
SUBJECT
Improved Sale 1
Improved Sale 2
Improved Sale 3
Improved Sale 4
Improved Sale 5
Facility Type
Strip Center Bldg
Multi-Tenant Retail
Lakemont Blvd
McDonough, GA
232 Keys Ferry Street
McDonough, GA
Multi-Tenant Retail
577-593 Jonesboro
Road
McDonough, GA
Multi-Tenant Retail
1971-2025 Jonesboro
Road
McDonough, GA
Multi-Tenant Retail
Facility Location
Multi-Tenant Retail
600-624 Eagles
Landing Pkwy
Stockbridge, GA
2081 Jonesboro Road
McDonough, Ga
2007
2.530
25,500
2002
3.00
21,600
1999
0.85
7,800
2004
1.36
11,091
2003
4.00
33,600
2005
1.75
19,774
May-07
$5,000,000
$231.48
Oct-06
$1,380,000
$176.92
Jul-06
$2,250,000
$202.87
Sep-06
$7,800,000
$232.14
Sep-06
$4,890,000
$247.29
ORDERED ADJUSTMENTS:
Financing Adjustments
Adjusted Value
Conditions of Sale Adjustments
Adjusted Value
Market Conditions/Time Adjustments
Adjusted Value
0%
$231.48
0%
$231.48
0%
$231.48
0%
$176.92
0%
$176.92
0%
$176.92
0%
$202.87
0%
$202.87
0%
$202.87
0%
$232.14
0%
$232.14
0%
$232.14
0%
$247.29
0%
$247.29
0%
$247.29
OTHER ADJUSTMENTS:
Location
Building Size
Age/Condition
Quality of Improvements
Access/Parking
Land Size
Net Adjustments
Net Adjusted Value
-10%
0%
5%
0%
0%
0%
-5%
$219.91
0%
0%
5%
5%
5%
5%
20%
$212.31
-10%
0%
0%
0%
0%
5%
-5%
$192.72
-10%
0%
0%
0%
0%
0%
-10%
$208.93
-10%
0%
0%
0%
0%
5%
-10%
$222.56
25,500
Square Feet @
Facility Data
Year Built
Land Area (Acres)
Building Area
Transaction Data
Date of Sale
Sales Price
Sale Price Per SF
Value Indications
Range Minimum:
Range Maximum:
Range Average:
Standard Deviation
Reconciled Value/SF:
Price Per SF
$192.72
$222.56
$211.29
$11.75
$210.00
$210.00
Rounded
$5,355,000
$5,355,000
Estimated Value Via Sales Comparison Approach
$5,355,000
Fletcher & Company
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Explanation of Adjustments
Cash Equivalency - All of the sales were cash or cash equivalency sales that did not
require cash equivalent adjustments.
Conditions of Sale – No condition of sale adjustments were made to the comparable sales.
Market/Time - The time adjustment represents a dollar/percentage change (plus or minus)
applied to the sale for appreciation and/or depreciation in land values within the area. The
sales range in date from July 2006 to May 2007. No adjustments were made for time of sale
since all sales occurred relatively within the past year.
Location - Location adjustments are made to comparable sales to recognize perceived value
differences in relation to neighborhood influences, access to commercial services, location
aesthetics, commercial density, overall exposure and visibility, and overall market demand.
Sales 1, 3-5 required an adjustment for location. These sales are situated in areas where
commercial development is more abundant, closer to the Interstate, and have good traffic
volume.
Building Size - Smaller buildings tend to sell for higher prices per square foot than larger
buildings due to a higher demand for smaller buildings. This case is typically true, however,
upon making adjustments for size on a retail center, the appraiser must consider the size of
the available units since a unit larger than typical would demand a lower rental rate and
therefore not be comparable to a 1200-2000 SF unit, which is considered typical of the
market. All sales consist of units similar in size to the subject and therefore no adjustments
were required for size.
Condition/Age – Condition and age adjustments are usually required when a property is
older and more deferred maintenance is noted. A building can also be older but have a
similar effective age as a newer building if it has been well maintained. An older property
will obviously sell for less since a potential buyer may have to spend more money on
curable physical deficiencies in the near future. The incurable physical depreciation must be
considered as well. The sales are all in good condition, however, the age of sales 1 and 2 are
inferior to the subject and therefore required an adjustment.
Quality of Improvements – When comparing sales in the market, the quality of
construction must be noted. Quality is typically related to the class of the building. The
appraiser must be aware of the materials and types of construction that may be considered
above standard to appropriately adjust for this factor. Sale 2 is the only sale that required an
adjustment for this factor. This sale does not appear to be constructed of all the high end
materials as the subject and other sales are.
Access/Parking –The subject is located at the corner of Georgia Highway 81 and Lakemont
Boulevard. The subject has an appealing corner lot with good exposure for both tracts. The
parking situation is adequate. All sales have good access and parking, however, sale 2 is
Fletcher & Company
Real Estate Appraisals & Consultation
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located just west of the subject. The city of McDonough just rerouted Highway 81 in front
of sale 2 to where now the traffic is rerouted just east of this sale and directed behind the
center making the location not have as much traffic since now the west bound land is not
routed in front anymore.
Land Size – When estimating an overall value for the subject property the land size must
be considered. If an improvement is situated on a larger or smaller size parcel than the
subject property, an appropriate adjustment must be made to offset these factors. When
considering the land of a comparable sale, the appraiser must recognize the size,
estimated value, and any excess land that could be later divided for more development.
There are scenarios where the comparable in question may be situated on a larger or
smaller tract than the subject property but the value may be similar requiring no
adjustment. However, in most cases the land difference must be adjusted properly to
accurately conclude the appropriate value for the subject. Sales 2, 3, and 5 are situated on
smaller sized tracts than the subject requiring an adjustment.
Sales Comparison Conclusion - The land value for the site is estimated at $210.00 per SF
based on the sales above and giving consideration for location, size, zoning, available utility,
overall topography and site conditions, and frontage. The differing types of zoning have
been taken into consideration for this value. The total value estimated via Sales Comparison
Approach is $5,355,000.
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Cost Approach
In the cost approach, value is established based on the cost of reproducing or replacing the
property, less depreciation from physical deterioration, functional obsolescence, and
economic/external obsolescence. The cost figures are based on local contractor bids for
similar size, quality, and type construction and the Marshall & Swift Cost Systems.
Cost of Reproduction new is defined as the estimated amount required to reproduce a
duplicate or a replica of the entire property at one time in like kind and materials in
accordance with current market prices for materials, labor, and manufactured equipment;
contractors’ overhead and profit; and fees; but without provision for overtime, bonuses for
labor, or premiums for materials.
Cost of Replacement new is defined as the estimated amount required to replace the entire
property at one time with a modern new unit using the most current technology and
construction materials that will duplicate the production capacity and utility of an existing
unit at current market prices for materials, labor, and manufactured equipment; contractors’
overhead and profit; and fees; but without provision for overtime, bonuses for labor, or
premiums or materials.
Physical Deterioration is defined as the loss in value from wear and tear in operation and
exposure to the elements. Total depreciation was estimated based on the observed
condition, with consideration given to the age and economic life of the improvements and
market conditions. The subject improvements are proposed construction and have no
physical depreciation.
Functional Obsolescence is a reduction in the capacity of the improvement to perform the
function for which it is intended in accordance with current standards of acceptability, and
hence a decline in their functional utility. The decrease in utility is termed Functional
Obsolescence because the structural component or element is outmoded or inefficient
according to current market standards of performance for the type space provided.
Functional obsolescence is intrinsic to the structure and the property and may be either
curable or incurable or both. It stems from market-perceived inadequacies in layout, space
configuration, equipment, occupancy cost, and the capacity of space in question to support
the intended use both operationally and physically. The subject does not suffer from any
type Functional Obsolescence.
External Obsolescence is defined as a loss in the property value resulting from adverse
causes outside the property. The appraiser concludes that the subject does not suffer from
any type External Obsolescence.
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Land Analysis
The initial step in the Cost Approach is to estimate the value of the land in order to add this
value to the cost of improvements less depreciation. The land will be valued as though
vacant and available for highest and best use. The subject site consists of a total of 3.647
acres or 158,838 SF in two tracts. A value will be rendered for each site. Comparable sales
of similar properties were identified for comparison to the subject. A comparative analysis is
set forth as follows:
`
INPUT DATA:
Property or Comparable
Location
Subject
Land Comp 1
Land Comp 2
Lakemont Blvd
Highway 155 South
McDonough, Ga
1.117
48,645
2.530
110,193
C-3
McDonough, GA
4.88
212,529
Tract A (Acres)
Tract A - (Square Feet)
Tract B (Acres)
Tract B (Square Feet)
Zoning/Use:
Sale Date:
Transaction Price:
Price Per Acre
Price Per Square Foot
ORDERED ADJUSTMENTS:
Financing
Adjusted Indicated Price/SF
Conditions of Sale
Adjusted Indicated Price/SF
Market Conditions
Adjusted Indicated Price/SF
OTHER ADJUSTMENTS:
Location
Size
Shape
Zoning
Available Utility
Access
Topography/Site Conditions
Frontage/Divisibility
Net Adjustments
Adjusted Value
Value Indications
Price Per SF
Range Minimum:
$9.18
Range Maximum:
$14.71
Range Average:
$11.26
Standard Deviation
$2.12
Reconciled Value Estimate:
$12.00
1000 Labonte Pky
Land Comp 3
Hwy 155 & Racetrack
Rd
Land Comp 4
Land Comp 5
2100 Jodeco Rd
Hwy 138
McDonough, GA
2.08
90,439
McDonough, GA
0.779
33,933
Stockbridge, GA
1.0079
43,904
Stockbridge, GA
1.92
83,635
Commercial
Aug-06
$1,952,000
$400,000
$9.18
Commercial
Mar-06
$1,400,000
$673,077
$15.48
C-3
Jun-06
$415,000
$532,734
$12.23
C-2
Aug-06
$450,000
$446,473
$10.25
C-2
Sep-07
$840,000
$437,500
$10.04
0%
$9.18
0%
$9.18
0%
$9.18
0%
$15.48
0%
$15.48
0%
$15.48
0%
$12.23
0%
$12.23
0%
$12.23
0%
$10.25
0%
$10.25
0%
$10.25
0%
$10.04
0%
$10.04
0%
$10.04
0%
0%
0%
0%
0%
0%
0%
0%
0%
$9.18
0%
0%
0%
0%
0%
0%
0%
-5%
-5%
$14.71
0%
0%
0%
0%
0%
-5%
0%
0%
-5%
$11.62
5%
0%
0%
0%
0%
0%
0%
0%
5%
$10.76
0%
0%
0%
0%
0%
0%
0%
0%
0%
$10.04
48,645
Square Feet @
$12.00
Rounded
110,193
Square Feet @
$10.00
$583,740
$585,000
$1,101,930
$1,100,000
$1,685,000
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Explanation of Adjustments
Cash Equivalency - All of the sales were cash or cash equivalency sales that did not
require cash equivalent adjustments.
Conditions of Sale – No condition of sale adjustments were made to the comparable sales.
Market/Time - The time adjustment represents a dollar/percentage change (plus or minus)
applied to the sale for appreciation and/or depreciation in land values within the area. The
land sales range in date from March 2006 to September 2007. No adjustments were
warranted for time of sale since all sales have relatively sold in the past year.
Location - Location adjustments are made to comparable sales to recognize perceived
value differences in relation to neighborhood influences, access to commercial services,
location aesthetics, commercial density, overall exposure and visibility, and overall
market demand. Sale 4 required an adjustment for location. This sale is located in an area
where commercial development is not as abundant and the traffic count is less than the
subject.
Size - Smaller parcels tend to sell for higher prices per square foot than larger parcels due to
a higher demand for smaller parcels. No size adjustments were warranted since all sales are
similar in size.
Shape - Tracts that may be irregular in shape in a way that limits the divisibility and/or
overall utility will create a negative impact on value. Lots that are irregular in shape tend to
be less desirable to the market. All sales are of a typical shape and therefore did not require
an adjustment for this factor.
Zoning – The zoning dictates what type of improvements and uses are allowed within the
site. If a tract has a zoning that significantly limits the use of the site, the tract is obviously
worth less. On the other hand, if the zoning of the tract allows majority of commercial uses,
the value is more. All Sales have comparable zoning requirements and did not receive
adjustments.
Available Utilities –If a tract does not have sewer available, the tract is limited in use since
high water use businesses such as restaurants, carwashes, and large developments would not
be allowed. By not having sewer, the density of the tract is also limited since septic drain
fields will have to be installed causing less developable land. All sales have comparable
access to utilities available to the subject site.
Access – The subject is located at the corner of Georgia Highway 81 and Lakemont
Boulevard. The subject has an appealing corner lot with good exposure for both tracts. All
sales have similar access from major thoroughfares that encompass its location. Access to
the property does not appear to be an inferior issue from either bound lane. Sale 3 is the
only sale that required an adjustment for this factor. Sale 3 is located at the corner of
Racetrack Road and Highway 155. Racetrack Road serves as a cut through for traffic out to
Highway 81.
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Topography/Site Conditions – The topography of a tract can be crucial for a tract. If a tract
has a steep grade or rolling topo, grading costs can multiply and therefore a developer could
not pay the same for the land as other competing tracts to compensate for the additional
grading costs. Site Conditions are also crucial for commercial development. Any low or
flood areas could affect the density, parking, and building size that could be constructed for
a development. A developer typically pays for the developable land of a site that has poor
site conditions. The Sales all have similar topography to the subject requiring no
adjustments.
Frontage/Divisibility - Frontage can make a significant difference in value. If a land
tract has above average frontage and can be further subdivided into smaller tracts from
existing road frontage with very little development costs, the value can be much higher.
Also a tract with frontage on multiple roads is desirable due to access. All sales are
finished lot sales and cannot be further subdivided.
Land Value Conclusion – Based on the sales above and giving consideration for location
size, zoning, available utilities, topography, and frontage, the appraiser has concluded that a
value of $10.00 per SF is appropriate for the subject tract B of 2.53 acres or 110,193 SF and
$12.00 per SF for subject Tract A. The total value rendered for the subject land via Sales
Comparison Approach is $1,100,000 for Tract B and $585,000 for Tract A.
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Replacement Cost
REPLACEMENT COST NEW:
Main Structure
Tenant Build-Out
25,500 SF @
25,500 SF @
$96.85
$25.00
$2,469,675
$637,500
Building Subtotal
$3,107,175
Less Depreciation:
Physical
Functional
External
Total
Building Subtotal
0%
0%
0%
$0
$0
$0
$0
$3,107,175
Hard Costs:
Sitework/Grading
Erosion Control
Storm Water Drainage System
Site Utilities
Water Service
Asphalt paving
Concrete (sidewalks/curb & gutter)
$100,000
$15,000
$80,000
$70,000
$65,000
$75,000
$35,000
$15,000
$15,000
$40,000
Signage
Exterior lighting
Landscaping/Irrigation
Total Hard Costs
$510,000
Soft Costs:
Mobilization & Insurance/Permit
Design Fees/Architect/Engineering
Total Soft Costs:
Building Subtotal
Developers Profit
Subtotal
REPLACEMENT COST NEW (rounded)
Plus: Land Value
INDICATED VALUE VIA COST APPROACH
$20,000
$30,000
$50,000
20%
$3,667,175
$733,435
$4,400,610
$4,400,000
$1,100,000
$5,500,000
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Income Approach
(Direct Capitalization)
Investment properties are valued on their ability to generate an income stream, which is
characterized by its quantity, quality, and desirability. Therefore, analysis of a property in
terms of its ability to provide a sufficient net annual return on investment capital is an
important means of developing a value indication. This estimate is developed in the income
capitalization approach by capitalizing the projected net income at a rate commensurate with
investment risks inherent to the ownership of the property. Such a conversion of income
considers competitive returns offered by alternative investment opportunities. When
properly applied, this approach is generally considered to provide the most reliable
indication of value for income-producing properties.
Income Analysis
The initial step in estimating the value of the subject via the Income Approach is to
determine the property's market or economic rent. Rental income is based on analysis of the
leases of the current tenants and using the data to project future market rents, lease terms,
renewals, and other forms of income to the property. The subject property is under
construction and has no past rental history. A rental survey of similar type
properties was conducted with the following rents and asking rents observed. These rents
are considered to be in similar type market areas.
1.
2.
3.
4.
5.
Addr ess
Ar ea
386 H igh way 155 S
30,000 SF
1
McDon ou gh , Geor gia
Rental
#
896 H igh way 81 E
73,271 SF
McDon ou gh , Geor gia
890 H a m pt on Rd
SF
386 24,000
Highway
McDon
ou
gh
,
Geor
gia
Location
155 S
371-399 H igh way 81 E
1,200 SF
McDon ou gh , Geor gia
1600 McDon ou gh P lace
20,075 SF
McDon ou gh , Geor gia
U se
Ret ail Cen t er
2
3
Ret ail Cen t er
Ret ail Cen t er
896 Highway
890 Hampton
81 East
Rd
Ret ail Cen t er
Ret ail Cen t er
Ter m s
$21.50 P er SF
5
Modified4Gr oss Lease
$17.00 P er SF
Tr iple N et Lease
$18.25-$18.75
371-399 P er SF 1600
Tr Highway
iple N et Lease
81
McDonough
$18.50 P er SF
East
Place
Modified Gr oss Lease
$22.00 P er SF
Modified Gr oss Lease
Revenue
The above rent comparables range from $17.00-$18.75 per SF per year on triple-net basis
and $18.50 to $22.00/SF on a modified gross basis for similar type properties. In addition
to the triple net leases an additional $2.50-$3.50/SF is paid by the tenants through CAM
and recoveries, which is comparable to the modified gross leases at $21.00-$22.00/SF.
Bases on the above lease comparables, the appraiser has concluded that the subject
property should sustain a rental rate of $18.00 per SF on a triple net basis.
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Expense Analysis
Vacancy and Collection Loss
Typically, improvements, such as the subject, are leased on long term basis. For the
purpose of this analysis, the appraiser has modeled a vacancy and collection loss of 5%.
Operating Expenses
Tenant-Paid Expenses
Typically, under the terms of a triple net lease, the following expenses are paid by the
Tenant and have been included in this analysis of operating expenses: Real estate taxes,
insurance, maintenance/repairs, pest control, trash removal, landscaping, and utilities.
Owner-Paid Expenses
The only owner-paid expenses used for the purpose of this operating expense analysis are
foundation and structural maintenance/repairs. These expenses are typically paid by the
owner of the property under the terms of a typical triple net lease. Since these expenses
are variable and not fixed, the appraiser has compensated for this expense in reserves
since the foundation and structural items typically is an expense to reserve since it may
not ever be needed during ownership. Typical fixed and variable expenses are items that
are expended on an annual basis.
Management Fee
Typically, the management of a property is performed by an outside management firm
that would report directly to the lessor. These services would include monthly reports, tax
preparation and overseeing the property and serving between the lessee and the lessor.
Management expenses are typically negotiated as a percentage of collected revenues.
Professional management fees range from 2% to 5%. For the purpose of this analysis, the
appraiser has utilized a 5% management fee.
Reserves
Capital improvements, or reserves for replacements, typically include an allowance for
replacement for roof covers, paving, HVAC, and other short-lived items. Given the age
and condition of the subject property, a reserve allowance of 2% of collected revenues
has been used
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Stabilization Expenses
Stabilization Expenses
The appraiser has estimated that under operating conditions, the property should operate at a
stabilized occupancy of 90%. Therefore, expenses incurred in order to achieve the stabilized
occupancy must be deducted from the estimate of value. Also, the appraiser has estimated
that the subject retail center should be at a stabilized occupancy within 18 months and no
more than 24 months with competent management after completion of construction.
Tenant Improvements
Tenant improvements are those cost associated to finish out the available suites. The owner
estimated the tenant improvement allowance for the first generation space at $15.00 per SF.
This expense is inline with those estimates from Marshall & Swift costing manual;
therefore, the appraiser used this estimate in his analysis.
Leasing Commissions
Leasing commissions in the market are typically charged as a percentage of each year’s rent,
paid up front. In this analysis, leasing commissions were calculated at 5% plus 1 month of
rent based on the agreement between the owner and the leasing agent. The amount of
leasing commissions incurred to stabilize the property must be deducted from the estimate
of value.
Rent Loss:
Rent loss is the amount of rental income loss, due to lack of stabilization. The chart on the
following page details the amount of rental loss incurred with the estimate of time that the
property will take to occupy. The appraiser has concluded that 17 units will have to be
occupied to achieve stabilization. A total cost of $713,151 is expected to incur for the
stabilization of the subject property.
STABILIZATION SCHEDULE
REVENUES:
Rentable
Area
# of units to
achieve stabilization
Unit 1
1,342
Unit 2
1,342
Unit 3
1,342
Unit 4
1,342
Unit 5
1,342
Unit 6
1,342
Unit 7
1,342
Unit 8
1,342
Unit 9
1,342
Unit 10
1,342
Unit 11
1,342
Unit 12
1,342
Unit 13
1,342
Unit 14
1,342
Unit 15
1,342
Unit 16
1,342
Unit 17
1,342
Speculative Lease Space Total
22,814
To Achieve Stabilization
Total Rent Loss, Leasing Commision & Tenant Improvements:
Total Annual
Rent SF
Total Annual
Rent
Leasing
Com m issions
5% + 1 m onth rent
Tenant
Im provem ents
M onthly
Rent
Estim ated Num ber
of M onths to
Lease-Up
Rent Loss
$15
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
18.00
18.00
18.00
18.00
18.00
18.00
18.00
18.00
18.00
18.00
18.00
18.00
18.00
18.00
18.00
18.00
18.00
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
24,156
24,156
24,156
24,156
24,156
24,156
24,156
24,156
24,156
24,156
24,156
24,156
24,156
24,156
24,156
24,156
24,156
410,652
$3,221
$3,221
$3,221
$3,221
$3,221
$3,221
$3,221
$3,221
$3,221
$3,221
$3,221
$3,221
$3,221
$3,221
$3,221
$3,221
$3,221
$54,757
$20,130
$20,130
$20,130
$20,130
$20,130
$20,130
$20,130
$20,130
$20,130
$20,130
$20,130
$20,130
$20,130
$20,130
$20,130
$20,130
$20,130
$342,210
$2,013
$2,013
$2,013
$2,013
$2,013
$2,013
$2,013
$2,013
$2,013
$2,013
$2,013
$2,013
$2,013
$2,013
$2,013
$2,013
$2,013
$43,880
1
1
3
5
6
6
8
9
11
12
13
13
14
15
16
17
18
$2,013
$2,013
$6,039
$10,065
$12,078
$12,078
$16,104
$18,117
$22,143
$24,156
$26,169
$26,169
$28,182
$30,195
$32,208
$34,221
$36,234
$338,184
$735,151
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Capitalization Rate Analysis
The Net Operating Income must be capitalized at an appropriate rate to arrive at a value
estimate for the subject property. The capitalization rate is associated with location, risk,
past rental history, and current market conditions. An investor may purchase a property at a
lower cap rate if that property is at least 90% occupied, is in a good location, and has
satisfactory rental history. The appraiser has chosen to utilize three methods in order to
arrive at an appropriate capitalization rate for the subject property.
Real Estate Investor Surveys (method 1)
One technique used to determine the proper capitalization rate involves analyzing surveys
of real estate investors. These surveys include data on investors operating regionally,
nationally, such as representative of insurance companies, commercial banks, pension
funds, investment banking firms, syndication firms and investment advisory firms. Such
companies invest in all types of real estate properties, including office buildings, retail
shopping centers, restaurants, hotels, apartment complexes, and industrial and healthcare
facilities. Anticipated yields varied according to perceived risks associated with different
types of investment real estate. In addition, OARs are dependent on these types of
investors, their cost of capital, expectations about future inflation, and anticipated holding
period.
According to Realty Rates Investor Survey, Second Quarter 2007, indicated OAR’s for
all retail buildings range from 6.57% to 13.75%, with an average of 9.42%
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Capitalization Rates Extracted From The Market (method 2)
This method is considered to be the most reliable when estimating a capitalization rate since
it is derived from the local market and proves what investors are willing to receive as a rate
of return within the local market on similar properties.
Comparable #
Location
County
City
State
Sale Price
Property Type
Size
NOI
CapRate
1
2
3
4
5
890 Hampton Rd
Henry
McDonough
Georgia
$4,431,214
Retail Center
24,000 SF
$347, 576
7.84%
1971 Jonesboro Rd
Henry
McDonough
Georgia
$7,800,000
Retail Center
33,600 SF
$569,239
7.29%
875 Hwy 138
Henry
Stockbridge
Georgia
$3,291,473
Retail Center
20,075 SF
$275,076
8.35%
600-624 Eagles Landing Pky
Henry
Stockbridge
Georgia
$5,000,000
Retail Center
21,600 SF
$370,000
7.40%
Gardner Pkwy
Henry
Locust Grove
Georgia
$1,910,000
Retail Center
8,500 SF
$150,890
7.90%
Capitalization Rate Formula (method 3)
Another accepted method to develop an overall rate is a formula based on expected financial
and funds cost. This is as follows:
Assumptions:
Mortgage at 8.00%; 20 year – Monthly Amortization; 80% LTV
Equity at 12%
Holding Period 10 years
No appreciation or depreciation
Method 3: Band of Investment
Weighted Debt Component:
Weighted Equity Component:
80%
20%
x
x
8.00%
11.00%
=
=
Rounded To:
6.40%
2.20%
8.60%
8.60%
Capitalization Rate Conclusion
Due to the age, quality of construction, location investor expectations, and associated risks,
the appraiser concludes that an overall rate of 7.75% is appropriate for this type of property
under current market conditions. The appraiser has concluded that a rate of 8.50% is
appropriate for the subject property as constructed yet unstabilized. Consideration was given
to the previously mentioned rate from the capitalization rate formula above, investor
surveys, and other rates that were extracted from market, which prove to be the most
reliable.
Capitalization
NOI = Value
CR
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Direct Capitalization Technique
(Stabilized Operations)
REVENUES:
Potential Gross Revenues
Rentable Area:
25,500
Recoveries/CAM
Potental Gross Revenue:
Vacancy and Credit Loss:
Effective Gross Income
OPERATING EXPENSES:
Pest Control
Trash Removal
Landscaping
Utilities
Insurance
Maintenance/Repairs
Real Estate Taxes
Management
Total Operating Expenses
$18.00
$459,000
$0
$459,000
$22,950
$436,050
5%
paid by tenant
paid by tenant
paid by tenant
paid by tenant
paid by tenant
paid by tenant
paid by tenant
$21,803
$21,803
5.0%
Reserves
2.0%
Total Expenses & Reserves
NET OPERATING INCOME
Capitalization Rate
Estimated Direct Capitalization Value
Rounded
INDICATED VALUE VIA INCOME APPROACH
$8,721
$30,524
$405,527
7.75%
$5,232,600
$5,230,000
$5,230,000
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Direct Capitalization Technique
(Un-Stabilized Operations)
REVENUES:
Potential Gross Revenues
Rentable Area:
25,500
Recoveries/CAM
Potental Gross Revenue:
Vacancy and Credit Loss:
Effective Gross Income
$18.00
$459,000
$0
$459,000
$22,950
$436,050
5%
OPERATING EXPENSES:
Pest Control
Trash Removal
Landscaping
Utilities
Insurance
Maintenance/Repairs
Real Estate Taxes
Management
5.0%
Total Operating Expenses
paid by tenant
paid by tenant
paid by tenant
paid by tenant
paid by tenant
paid by tenant
paid by tenant
$21,803
$21,803
Reserves
2.0%
Total Expenses & Reserves
NET OPERATING INCOME
Capitalization Rate
Estimated Direct Capitalization Value
Less Stabilization Costs
INDICATED VALUE VIA INCOME APPROACH
Rounded
$8,721
$30,524
$405,527
8.50%
$4,770,900
$713,151
$4,057,749
$4,060,000
Fletcher & Company
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RECONCILIATION AND FINAL ESTIMATE
Summary of Value Conclusions
Building Size (Square Feet)
25,500
Sales Comparison Approach
$585,000
Tract A - Vacant Lot: 1.117 acres
$5,355,000
Tract B - Multi-Tenant Retail Center
Cost Approach
Tract A - Vacant Lot: 1.117 acres
N/A
Tract B - Multi-Tenant Retail Center
$5,500,000
Income Approach
Tract A - Vacant Lot: 1.117 acres
N/A
Tract B - Multi-Tenant Retail Center (Stabilized)
$5,230,000
Tract B - Multi-Tenant Retail Center (Un-Stabilized)
$4,060,000
Reconciled Market Value of Real Estate (Tract A)
$585,000
Reconciled Market Value of Real Estate (Tract B)
$5,230,000
Per Building Square Foot
$205.10
The Sales Comparison Approach is generally the most reliable indicator of value since it
typically reflects actions of buyers and sellers in the market place, especially in an active
market.
The Cost Approach is more reliable when appraising new construction or special purpose
properties as to the highest and best use and for feasibility.
The Income Approach is the most basic of the three approaches and is normally the starting
point for the developer or lender. The Income Approach is considered a reliable indication
of value since the typical investor in this type property is concerned with the income
producing aspect.
Fletcher & Company
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Conclusion:
The Sales Comparison Approach, Cost Approach, and Income Approach were considered in
order to obtain the final value estimate; however, primary reliance was placed on the Income
Approach since the subject development is designed for income production, which is
supported by both the Sales Comparison and Cost Approaches. The final value estimates
are as follows:
As of October 19, 2007 it is my opinion that the Market Value with Fee Simple Interest
in the subject undeveloped secondary site (Tract A) of 1.117 acres is:
Five Hundred Eighty Five Thousand Dollars
($585,000)
It is my opinion that the Prospective Market Value in the Fee Simple Interest for the
primary site (Tract B) consisting of one proposed multi-tenant retail center situated on
2.530 acres on or about February 1, 2008, upon completion of construction but unstabilized and subject to prevailing market conditions and the attached assumptions and
limiting conditions is:
Four Million Sixty Thousand Dollars
($4,060,000)
It is my opinion that the Prospective Market Value in the Fee Simple Interest for the
proposed multi-tenant retail center on or about August 1, 2009, upon completion of
construction and at stabilized operations and subject to prevailing market conditions and
the attached assumptions and limiting conditions is:
Five Million Two Hundred Thirty Thousand Dollars
($5,230,000)
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Addenda
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Supporting Documents
For
Subject Property
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Exhibit “A”
Engagement Letter
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BLANK
BLANK
EXHIBIT A
VALUE TO BE ESTABLISHED
MARKET VALUE: means the most probable price which a property should bring in a competitive
and open market under all conditions requisite to a fair sale, the buyer and seller each acting
prudently and knowledgeable, 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:
(a)
buyer and seller are typically motivated;
(b)
both parties are well-informed or well advised, and acting in what they consider their
own best interests;
(c)
a reasonable time is allowed for exposure in the open market;
(d)
payment is made in terms of cash in U.S. dollars or in terms of financial
arrangements comparable thereto; and
(e)
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.
FAIR VALUE: is the cash price that might reasonably be anticipated in a current sale under all
conditions requisite to a fair sale. A fair sale means that buyer and seller are each acting prudently,
and knowledgeably, and under no necessity to buy or sell - i.e., other than in a forced or liquidation
sale. The appraiser should estimate the cash price that might be received upon exposure to the open
market for a reasonable time, considering the property type and local market conditions. When a
current sale is unlikely - i.e., when it is unlikely that the sale can be completed within 12 months appraiser must discount all cash flows generated by the property to obtain the estimate of fair value.
These cash flows include, but are not limited to, those arising from ownership, development,
operation, and the sale of the property. The discount applied shall reflect the appraiser's judgment of
what a prudent, knowledgeable purchaser under no necessity to buy would be willing to pay to
purchase the property in a current sale. Whenever the appraiser believes that more than one year is
necessary for a fair sale of the property, the appraisal shall state and justify the estimated time and
state the annual discount rate applied. Accordingly, the discount period should include the entire
expected holding period and should not exclude the first 12 months.
67
EXHIBIT III
HAVEN TRUST BANK
WRITTEN APPRAISAL STANDARDS
The appraisal for the Bank must be written and presented in a narrative format or on a form that
shall, at a minimum:
(1) conform to the Uniform Standards of Professional Appraisal Practice ("USPAP")
adopted by the Appraisal Standards Board of the Appraisal Foundation, except that the
Departure Provision of the USPAP shall not apply to federally related transactions;
(2) be sufficiently descriptive to enable the reader to ascertain the estimated market/fair
value and the rationale for the estimate as well as provide detail and depth of analysis that
reflect the complexity of the real estate appraised;
(3) disclose any steps taken that were necessary or appropriate to comply with the
Competency Provision of the USPAP;
(4) clearly identify the property rights being appraised;
(5) be based upon the definition of market value and/or fair value as set forth in the
engagement letter;
(6) analyze and report in reasonable detail any prior sales of the property being appraised
that occurred within the following time periods:
(a) for 1-to-4 family residential property, one year preceding the date when the
appraisal was prepared; and
(b) for all other property, three years preceding the date when the appraisal was
prepared;
(7) analyze and report data on current revenues, expenses, and vacancies for the property if it
is and will continue to be income-producing;
(8) analyze and report a reasonable marketing period for the subject property;
(9) analyze and report on current market conditions and trends that will affect projected
income or the absorption period, to the extent they affect the value of the subject property;
(10) analyze and report appropriate deductions and discounts for any proposed construction,
or any completed properties that are partially leased or leased at other than market rents as of
the date of the appraisal, or any tract developments with unsold units;
68
(11) include in the certification required by the USPAP an additional statement that the
appraisal assignment was not based on a requested minimum valuation, a specific valuation,
or the approval of a loan;
(12) contain sufficient supporting documentation with all pertinent information reported so
that the appraiser's logic, reasoning, judgment, and analysis in arriving at a conclusion
indicate to the reader the reasonableness of the value reported;
(13) include a legal description of the real estate being appraised;
(14) when valuing distressed property solely on a land value basis that implies demolition or
removal of improvements, the cost of demolition and/or removal should be netted against the
land value with the estimated cost of removal so reflected;
(15) note any potential environmental hazards, i.e., underground storage tanks, storage
containers of known or unknown contents, evidence of waste disposal such as sludge, paints,
chemical residues oil spillage, asbestos content in building material, etc. All environmental
problems that may affect the value of the subject property, must be dealt with in the
appraisal;
(16) identify and comment on any special flood hazard areas;
(17) include comparables on land, improved sales and leases/rents and photographs of the
subject property;
(18) identify and separately value any personal property, fixtures, or intangible items that are
not real property but are included in the appraisal, and discuss the impact of their inclusion
or exclusion on the estimate of value;
(19) follow a reasonable valuation method that addresses the direct sales comparison,
income, and cost approaches to market value, reconciles those approaches, and explains the
elimination of each approach not used; and
(20) if information required or deemed pertinent to the completion of an appraisal is
unavailable, that fact shall be disclosed and explained in the appraisal.
69
Exhibit “B”
Subject Legal Description & Plats
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BLANK
BLANK
73
74
75
Exhibit “C”
Flood Map
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PROPERTY ADDRESS:
Lat%3A+33.444060%2C+Lon%3A+-84.129452%0D%0A
FLOODSCAPE
Map Number
13151C0159C
Effective Date
May 16, 2006
Flood Legend
High flood risk
Moderate flood risk
Low flood risk
This report makes no
representations or warranties
concerning its content, accuracy
or completeness.
STDBonline.com
469.574.1234
Powered by FloodSource
877.77.FLOOD
www.floodsource.com
© 1999-2007 SourceProse Corporation. All rights reserved. Protected by U.S. Patent Numbers 6631326, 6678615, 6842698, and 7038681.
77
Exhibit “D”
County Tax Assessment
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Henry County Record Search
Page 1 of 1
Previous Parcel
Next Parcel
Recent Sales in Area
Return To Main Search Page
Henry Home
Owner Name
DICKERSON ADAIR JR & CHARLES R
Today's
October 20, 2007
Mailing Address
194 PEACHTREE BATTLE AVE
Parcel Number
107-01040000
ATLANTA, GA 30305
Millage Group
CITY-MCD (City/McDonough)
Total Millage
Location Address
471 E HIGHWAY 81
Property Usage
TRANSITIONAL (0190)
Class Code (Not Zoning)
R4-R
Total Acres
17.32
Landlot and District
135 7
Parcel Map
January 1, 2007 Value Information
Land
Value
Building
Value
Misc
Value
Total
Value
207,800
0
0
207,800
Exemptions
Land Information
Land
Use
Number of Units
Unit
Type
Zoning
TRANSITION (000190)
17.32
AC
RA
Short Legal
Building Data
Building #
Type
Total
Area
Heated
Area
Bed
Rooms
Wall
Height
Baths
Effective
Year
Built
Actual
Year
Built
No buildings associated with this parcel.
Miscellaneous Data
Description
Length
Width
Units
Year Built
No records associated with this parcel.
Sale Information
Sale Date
Deed
Book
06-15-2006
9375202
12-01-1984 608-19
Price
Instrument
Reason
Grantor
Grantee
$785,700
WARRANTY
DEED
CONTIGUOUS
PROPERTY
HARDEMAN M L
(ESTATE)
DICKERSON ADAIR JR &
CHARLES R
$16,000
WARRANTY
DEED
HARDEMAN M L ESTATE
The Henry County Board Assessor's Office makes every effort to produce the most accurate information possible. No warranties, expressed or
implied, are provided for the data herein, its use or interpretation. The assessment information is from the last certified taxroll. All data is subject
to change before the next certified taxroll. Website Updated: July 25, 2007
Recent Sales in Area
Previous Parcel
Next Parcel
Return To Main Search Page
Henry Home
© 2005 by the County of Henry, GA | Website design by qpublic.net
79
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10/20/2007
Exhibit “E”
Zoning Ordinance
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CHAPTER 17.68 C-3 HIGHWAY COMMERCIAL DISTRICT
Page 1 of 2
CHAPTER 17.68 C-3 HIGHWAY COMMERCIAL DISTRICT
Sections:
17.68.010 Purpose and permitted uses.
17.68.020 Special uses.
17.68.010 Purpose and permitted uses.
A. The C-3 Highway Commercial District is intended to promote suitable areas for those
business and commercial uses which primarily serve the traveling public and benefit from direct
access to major streets.
B. Within any C-3 Highway Commercial District, the following uses shall be permitted unless
one or more of these uses are otherwise prohibited, not authorized, limited, or restricted by the
city council when acting upon a zoning application and/or rezoning of a parcel(s) of property:
1. Ambulance service, provided there is no outside storage of vehicles, supplies, or
equipment.
2. Animal hospitals or veterinary clinics, provided that all structures and activities shall
be at least 100 feet from any property zoned or used for residential purposes.
3. Automobile repair garages, but excluding open storage of wrecked or nonoperative
automobiles and trucks.
4. Auction gallery.
5. Automobile sales, new and used.
6. Banks, and related financial institutions.
7. Billiards or pool halls.
8. Boat sales, new and used.
9. Commercial indoor and outdoor recreation and amusement facilities.
10. Funeral homes and mortuaries.
11. Pawn shops.
12. Public works and public utility facilities such as distribution lines, transformer
stations, transmission lines and towers, water tanks and towers, pumping stations,
telephone exchanges, but not service or storage yards.
13. Radio and TV stations and transmission towers.
14. Restaurants, bars, grills and similar eating institutions including drive-ins provided
that a pass lane of at least 12 feet has been provided for the drive through.
15. Retail businesses selling convenience goods and services to the traveling public
and residents of adjacent neighborhoods, provided that any manufacturing of products
sold on the premises is incidental to the retail business and occupies less than 30
percent of the total floor area.
16. Service stations, provided that:
a. All pumps and canopies shall be located at least 20 feet from any public right81
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10/20/2007
CHAPTER 17.68 C-3 HIGHWAY COMMERCIAL DISTRICT
Page 2 of 2
of-way;
b. All buildings and appurtenances shall be located at least 100 feet from any
residential district line; and
c. All fuel is stored underground outside any public right-of-way.
17. Theaters, drive-ins, provided that:
a. No part of the theater screen, projection booth, or other building shall be
located closer than 500 feet to any residential district nor closer than 50 feet to
any property line or public right-of-way; and
b. The theater screen shall not face a major street, highway, or interstate; and
c. Reserve parking space off the street shall be provided for patron awaiting
admission in an amount of not less than 30 percent of the theater.
18. Florist shop.
19. Sign companies, with no outside construction or heavy manufacturing.
20. Automobile repair garages limited to minor routine maintenance with no overnight
storage of any vehicles.
21. Business and profession offices; including medical, dental, legal, financial,
architectural, engineering, real estate, insurance and manufacturing representatives,
provided no goods are offered for sale at retail.
22. Pharmacies.
23. Fitness centers.
(Zoning Ord. § 835, 1979; Ord. No. 01-08-20R, § 5, 8-20-2001; Ord. No. 04-12-06-B, § XXX, 12-62004; Ord. No. 05-02-07(D), § 6, 2-7-2005)
17.68.020 Special uses.
Within any C-3 Highway Commercial District, the following uses may be allowed upon obtaining
a special use permit from the city council:
A. Personal service establishments including tattoo studio, body piercing, spas, and
massage parlors.
(Ord. No. 04-12-06-B, § XXX, 12-6-2004)
82
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10/20/2007
83
District
Two
Family
Structure
(b)
MultiFamily
Structure
12,000
12,000
15,000
22,000
62,000
Other
Uses
75
75
85
100
200
Minimum
Lot
Width
(Feet)
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11,000
12,000
R-75
RM-75
14,000
R-85
21,780
62,000
One
Family
Structure
Minimum Lot Size in Square Feet (a)
Table 17.84.010 Dimensional Requirements
RA200
R-100
Page 1 of 3
(d), (i)
1,600(i)
1,800(h)
2,000(h)
2,000(h)
Minimum
Heated
Floor
Area in
Square
Feet/Unit
(c)
20
20
20
20
Minimum
Distance
to bidgs.
on same
lot
40
50
50
50
60
Major
Streets
35
35
40
40
50
All
Other
Streets
Minimum Front
Yard Setback
from Street Rightof-Way
10(e)
10
10
15
20
Minimum
Side
Yard
(Feet)
35
30
40
40
40
35
35
35
35
35
Maxim
Heigh
(Feet
10/20/2007
Minimum
Rear
Yard
(Feet)
Yard Setbacks
The following table designates the dimensional requirements of each zoning district except for the RTD, which are found in chapter
TABLE INSET:
17.44:
17.84.010 Dimensional requirements.
17.84.010 Dimensional requirements.
Sections:
CHAPTER 17.84 DIMENSIONAL REQUIREMENTS
CHAPTER 17.84 DIMENSIONAL REQUIREMENTS
84
8,000
N/A
N/A
N/A
N/A
N/A
N/A
N/A
RCD
R-50
O-I
C-1
C-2
C-3
C-4
M-1
M-2
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
43,560
100
75
N/M
N/M
N/M
N/M
N/M
60
20
N/M
N/M
N/M
N/M
N/M
N/M
N/M
1,200(j)
1,600(h)
N/M
N/M
N/M
N/M
N/M
N/M
N/M
N/M
30
40
40
40
40
40
40
40
10
35
30
30
30
30
30
30
30
10
35
N/M(g)
10(e)
N/M(f)
N/M(f)
N/M(f)
N/M(f)
N/M(f)
7.5
30
N/M(g)
30(e)
N/M(f)
N/M(f)
N/M(f)
N/M(f)
N/M(f)
30
30
50
35
35
45
40
50
50
35
35
Page 2 of 3
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Front to front
Front to rear
Rear to rear
Front to rear to side
Side to side
All other arrangements
TABLE INSET:
50 feet
50 feet
40 feet
30 feet
20 feet
30 feet
(c) The minimum distance between buildings located on the same lot, when so arranged shall be as follows:
10/20/2007
(b) Residential density cannot exceed eight units per acre of developed land. For purposes of calculating this density and
acreage, developable land shall not include any portion of the lot containing rivers, streams, and/or floodplains.
(a) If public sewer system is not accessible, an alternative method of sewage disposal for each lot, or a community
sewerage system, may be used in compliance with the standards of the Henry County Health Department. Such standards
may require a greater minimum lot area and/or width than specified in this title.
M/M No minimum requirement
N/A Not applicable
Notes:
MUCR
(k)
12,000
CHAPTER 17.84 DIMENSIONAL REQUIREMENTS
85
Page 3 of 3
600 square feet
900 square feet
1,200 square feet
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10/20/2007
(Ord. No. 97-8-28R-100; Ord. of 9-16-1985 (part); Ord. of 6-19-1995; Zoning Ord. Art. IX, 1979; Ord. No. 04-12-06-B, § XXXVII, 12-6-2004;
Ord. No. 05-02-07(D), § 7, 2-7-2005)
(k) Unless the development is approved as a conditional use.
(j) One thousand two hundred square feet of floor area shall be the minimum required for a one-bedroom unit; 1,300 square
feet of floor area shall be the minimum required for a two-bedroom unit; 1,400 square feet of floor area shall be the minimum
required for a three-bedroom unit.
(i) In addition to the minimum heated floor area required, each single-family unit shall be provided with, at a minimum, an
enclosed two-car garage.
(h) In addition to the minimum heated floor area required, each single-family dwelling unit shall be provided with, at a
minimum, an enclosed two-car garage.
(g) When an M-2 district abuts a residential district, a setback of 100 feet shall be provided including a buffer strip.
(f) When a C or M-1 district abuts a residential district, a setback of 50 feet shall be provided including a buffer strip.
(e) When an O-I or RM district abuts a single-family district, a setback of 50 feet shall be provided including a buffer strip.
Efficiency or one-bedroom units
Two-bedroom unit
Three-bedroom unit
TABLE INSET:
(d) One-family dwelling units shall have a minimum floor area of 1,200 square feet per unit. Multi-family units shall have the
following minimum floor area based on the number of bedrooms:
CHAPTER 17.84 DIMENSIONAL REQUIREMENTS
Supporting Documents
For
Comparable Sales
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Exhibit “F”
Profiles for Improved Sales
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Improved Sale 1 Property Identification
1.
2.
Property Type:
Address:
3.
Tax ID:
Strip Center Building
600-624 Eagles Landing Pkwy
Stockbridge, GA
005101051000
Sale Data
4.
5.
6.
7.
8.
9.
10.
11.
Grantor:
Grantee:
Sale Price:
Price Per SF:
Sale Date:
Deed Book/Page:
Verification:
Condition of Sale:
Financing:
RS Eagle Village, LLC
Eagle Atlanta, LLC
$5,000,000
$231.48
05/01/2007
10198/265
Public Records
Arm's Length
All Cash to Seller
Property Data
12.
13.
14.
15.
16.
17.
Building Size:
Land Area:
Year Built:
Zoning:
Utilities:
Comments:
21,600
3.00
2002
C-2
All Utilities
Square Feet
Acres
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Improved Sale 2 Property Identification
1.
2.
Property Type:
Address:
3.
Tax ID:
Strip Center Building
232 Keys Ferry St
McDonough, GA
0M2009001002
Sale Data
4.
5.
6.
7.
8.
9.
10.
11.
Grantor:
Grantee:
Sale Price:
Price Per SF:
Sale Date:
Deed Book/Page:
Verification:
Condition of Sale:
Financing:
Keys Ferry Shopping Ctr, Inc.
Zak Investments, LLC
$1,380,000
$176.92
10/06/2006
9647/132
Public Records
Arm's Length
All Cash to Seller
Property Data
12.
13.
14.
15.
16.
17.
Building Size:
Land Area:
Year Built:
Zoning:
Utilities:
Comments:
7,800
.85
1999
C-3
All Available
Square Feet
Acres
Fletcher & Company
Real Estate Appraisals & Consultation
89
Improved Sale 3 Property Identification
1.
2.
Property Type:
Address:
3.
Tax ID:
Strip Center Building
577-593 Jonesboro Rd
McDonough, GA
009101021004
Sale Data
4.
5.
6.
7.
8.
9.
10.
11.
Grantor:
Grantee:
Sale Price:
Price Per SF:
Sale Date:
Deed Book/Page:
Verification:
Condition of Sale:
Financing:
City Square of Stockbridge, LLC
DJS Properties, LLC
$2,250,000
$202.87
07/12/2006
9367/187
Public Records
Arm's Length
All Cash to Seller
Property Data
12.
13.
14.
15.
16.
17.
Building Size:
Land Area:
Year Built:
Zoning:
Utilities:
Comments:
11,091
1.36
2004
C-3
All Available
Square Feet
Acres
Fletcher & Company
Real Estate Appraisals & Consultation
90
Improved Sale 4 Property Identification
1.
2.
Property Type:
Address:
3.
Tax ID:
Strip Center Building
1971-2025 Jonesboro Rd
McDonough, GA
005401030041
Sale Data
4.
5.
6.
7.
8.
11.
12.
13.
Grantor:
Grantee:
Sale Price:
Price Per SF:
Sale Date:
Deed Book/Page:
Verification:
Condition of Sale:
Financing:
Towne Centre Village, LLC
Sundaram Properties, LLC
$7,800,000
$232.14
09/07/2006
9580/46
Public Records
Arm's Length
All Cash to Seller
Property Data
14.
15.
16.
17.
18.
19.
Building Size:
Land Area:
Year Built:
Zoning:
Utilities:
Comments:
33,600
4.00
2003
C-3
All Available
Square Feet
Acres
Fletcher & Company
Real Estate Appraisals & Consultation
91
Improved Sale 5 Property Identification
1.
2.
Property Type:
Address:
3.
Tax ID:
Strip Center Building
2081 Jonesboro Rd
McDonough, GA
005401030042
Sale Data
4.
5.
6.
7.
8.
9.
10.
11.
Grantor:
Grantee:
Sale Price:
Price Per SF:
Sale Date:
Deed Book/Page:
Verification:
Condition of Sale:
Financing:
Towne Crest Village, LLC
EJP Properties, Inc.
$4,890,000
$247.29
09/26/2006
9601/186
Public Records
Arm's Length
All Cash to Seller
Property Data
12.
13.
14.
15.
16.
17.
Building Size:
Land Area:
Year Built:
Zoning:
Utilities:
Comments:
19,774
1.75
2005
Square Feet
Acres
All Available
Fletcher & Company
Real Estate Appraisals & Consultation
92
Exhibit “G”
Location Map for Improved Sales
Fletcher & Company
Real Estate Appraisals & Consultation
93
Improved Sales Map
0 mi
5
10
15
Copyright © and (P) 1988–2007 Microsoft Corporation and/or its suppliers. All rights reserved. http://www.microsoft.com/streets/
Certain mapping and direction data © 2007 NAVTEQ. All rights reserved. The Data for areas of Canada includes information taken with permission from Canadian authorities, including: © Her
Majesty the Queen in Right of Canada, © Queen's Printer for Ontario. NAVTEQ and NAVTEQ ON BOARD are trademarks of NAVTEQ. © 2007 Tele Atlas North America, Inc. All rights
reserved. Tele Atlas and Tele Atlas North America are trademarks of Tele Atlas, Inc.
94
Exhibit “H”
Profiles for Land Sales
Fletcher & Company
Real Estate Appraisals & Consultation
95
Land Sale 1 Property Identification
1.
2.
3.
Property Type:
Property Description:
Address:
4.
Tax ID:
Vacant Land
Commercial Out Parcel
Highway 155 South
McDonough, GA
009401022064
Sale Data
5.
6.
7.
8.
9.
10.
11.
12.
Grantor:
Grantee:
Sale Price:
Price Per SF:
Sale Date:
Deed Book/Page:
Verification:
Condition of Sale:
Financing:
Henry 155 Ventures, LLC
Don Henry Development, LLC
$1,952,000
$9.18
08/18/2006
9495/62
Public Records
Arm's Length
All Cash to Seller
Property Data
13.
14.
15.
16.
Land Area:
Zoning:
Utilities:
Comments:
4.88 Acres
M1
All Available
or 212,529 SF
Fletcher & Company
Real Estate Appraisals & Consultation
96
Land Sale 2 Property Identification
1.
2.
3.
Property Type:
Property Description:
Address:
4.
Tax ID:
Vacant Land
Commercial Out Parcel
1000 Labonte Pky
McDonough, GA
093B01137000
Sale Data
5.
6.
7.
8.
9.
10.
11.
12.
Grantor:
Grantee:
Sale Price:
Price Per SF:
Sale Date:
Deed Book/Page:
Verification:
Condition of Sale:
Financing:
BBG Holdings, Inc.
Mitcham & Brugonne, Inc.
$1,400,000
$15.48
03/27/2006
9122/31
Public Records
Arm's Length
All Cash to Seller
Property Data
13.
14.
15.
16.
Land Area:
Zoning:
Utilities:
Comments:
2.08 Acres
County
All Available
or 90,439 SF
Fletcher & Company
Real Estate Appraisals & Consultation
97
Land Sale 3 Property Identification
1.
2.
3.
Property Type:
Property Description:
Address:
4.
Tax ID:
Vacant Land
Commercial Parcel
Hwy 155 & Racetrack Rd
McDonough, GA
Sale Data
5.
6.
7.
8.
9.
10.
11.
12.
Grantor:
Grantee:
Sale Price:
Price Per SF:
Sale Date:
Deed Book/Page:
Verification:
Condition of Sale:
Financing:
Waters Edge at Eagles Landing, LLC
GH & G McDonough, LLC
$415,000
$12.23
06/09/2006
9284/19
Public Records
Arm's Length
All Cash to Seller
Property Data
13.
14.
15.
Land Area:
Zoning:
Utilities:
16.
Comments:
.779 Acres
C-3
All Available
or
33,933 SF
Sale is a portion of a larger tract
Fletcher & Company
Real Estate Appraisals & Consultation
98
Land Sale 4 Property Identification
1.
2.
3.
Property Type:
Property Description:
Address:
4.
Tax ID:
Vacant Land
Commercial Out Parcel
2100 Jodeco Road
Stockbridge, GA
053-01019000
Sale Data
5.
6.
7.
8.
9.
10.
11.
12.
Grantor:
Grantee:
Sale Price:
Price Per SF:
Sale Date:
Deed Book/Page:
Verification:
Condition of Sale:
Financing:
Charrette Investments, LLC
Real Estate Investments of Henry Co, LLC
$450,000
$10.25
08/28/2006
9560/347
Public Records
Arm's Length
All Cash to Seller
Property Data
13.
14.
15.
16.
Land Area:
Zoning:
Utilities:
Comments:
1.0079 Acres
C-2
All Available
or 43,904 SF
Fletcher & Company
Real Estate Appraisals & Consultation
99
Land Sale 5 Property Identification
1.
2.
3.
Property Type:
Property Description:
Address:
4.
Tax ID:
Vacant Land
Commercial Out Parcel
Hwy 138 @ Hwy 42- Lot 2
Stockbridge, GA
Sale Data
5.
6.
7.
8.
9.
10.
11.
12.
Grantor:
Grantee:
Sale Price:
Price Per SF:
Sale Date:
Deed Book/Page:
Verification:
Condition of Sale:
Financing:
Pinnacle Commercial Development, Inc.
Spivey Commons, LLC
$840,000
$10.04
09/05/2007
Public Records
Arm's Length
All Cash to Seller
Property Data
13.
14.
15.
16.
Land Area:
Zoning:
Utilities:
Comments:
1.92 Acres
C-2
All Available
or
83,635 SF
Fletcher & Company
Real Estate Appraisals & Consultation
100
Exhibit “I”
Location Map for Land Sales
Fletcher & Company
Real Estate Appraisals & Consultation
101
Land Sales Map
0 mi
5
10
15
Copyright © and (P) 1988–2007 Microsoft Corporation and/or its suppliers. All rights reserved. http://www.microsoft.com/streets/
Certain mapping and direction data © 2007 NAVTEQ. All rights reserved. The Data for areas of Canada includes information taken with permission from Canadian authorities, including: © Her
Majesty the Queen in Right of Canada, © Queen's Printer for Ontario. NAVTEQ and NAVTEQ ON BOARD are trademarks of NAVTEQ. © 2007 Tele Atlas North America, Inc. All rights
reserved. Tele Atlas and Tele Atlas North America are trademarks of Tele Atlas, Inc.
102
Exhibit “J”
Profiles for Rent Comparables
Fletcher & Company
Real Estate Appraisals & Consultation
103
Rental Comparable 1 Property Identification
1.
2.
Property Type:
Address:
3.
Tax ID:
Retail Center
386 Highway 155 S
McDonough, GA
093-01002001
Lease Data
4.
5.
Lease Type:
Rent Per SF:
Modified Gross
$21.50
Property Data
6.
7.
8.
9.
10.
11.
12.
Building Size:
Land Area:
Year Built:
Land Use:
Utilities:
NOI
Cap Rate
30,000 Square Feet
Acres
.689
2004
Commercial
All Available
Fletcher & Company
Real Estate Appraisals & Consultation
104
Rental Comparable 2 Property Identification
1.
2.
Property Type:
Address:
3.
Tax ID:
Retail Center
896 Highway 81 E
McDonough, GA
Lease Data
4.
5.
Lease Type:
Rent Per SF:
Triple Net
$17.00
Property Data
6.
7.
8.
9.
10.
11.
12.
Building Size:
Land Area:
Year Built:
Land Use:
Utilities:
NOI:
Cap Rate:
73,271
1.68
Square Feet
Acres
Commercial
All Available
$
%
Fletcher & Company
Real Estate Appraisals & Consultation
105
Rental Comparable 3 Property Identification
1.
2.
Property Type:
Address:
3.
Tax ID:
Retail Center
890 Hampton Rd
McDonough, GA
Lease Data
4.
5.
Lease Type:
Rent Per SF:
Modified Gross
$23.00
Property Data
6.
7.
8.
9.
10.
11.
12.
Building Size:
Land Area:
Year Built:
Land Use:
Utilities:
NOI:
Cap Rate:
24,000
.55
Square Feet
Acres
Commercial
All Available
$347,576
7.84%
Fletcher & Company
Real Estate Appraisals & Consultation
106
Rental Comparable 4 Property Identification
1.
2.
Property Type:
Address:
3.
Tax ID:
Retail Center
371-399 Highway 81 E
McDonough, GA
107-01023001
Lease Data
4.
5.
Lease Type:
Rent Per SF:
$18.50
Property Data
6.
7.
8.
9.
10.
11.
12.
Building Size:
Land Area:
Year Built:
Land Use:
Utilities:
NOI:
Cap Rate:
1,200
Square Feet
Acres
.03
2001
Commercial
All Available
$
%
Fletcher & Company
Real Estate Appraisals & Consultation
107
Rental Comparable 5 Property Identification
1.
2.
Property Type:
Address:
3.
Tax ID:
Retail Center
1600 McDonough Place
McDonough, GA
Lease Data
4.
5.
Lease Type:
Rent Per SF:
Modified Gross
$22.00
Property Data
6.
7.
8.
9.
10.
11.
12.
Building Size:
Land Area:
Year Built:
Land Use:
Utilities:
NOI:
Cap Rate:
20,075
.46
Square Feet
Acres
Commercial
All Available
$
%
Fletcher & Company
Real Estate Appraisals & Consultation
108
Exhibit “K”
Location Map for Rent Comparables
Fletcher & Company
Real Estate Appraisals & Consultation
109
Rent Comparables Map
0 mi
1
2
3
4
Copyright © and (P) 1988–2007 Microsoft Corporation and/or its suppliers. All rights reserved. http://www.microsoft.com/streets/
Certain mapping and direction data © 2007 NAVTEQ. All rights reserved. The Data for areas of Canada includes information taken with permission from Canadian authorities, including: © Her
Majesty the Queen in Right of Canada, © Queen's Printer for Ontario. NAVTEQ and NAVTEQ ON BOARD are trademarks of NAVTEQ. © 2007 Tele Atlas North America, Inc. All rights
reserved. Tele Atlas and Tele Atlas North America are trademarks of Tele Atlas, Inc.
110
5
Appraiser Qualifications
License & Resume
Fletcher & Company
Real Estate Appraisals & Consultation
111
Corporate Office
122 W. Solomon Street
Griffin, Georgia 30224
PHONE
Local: (770) 227-4008
Toll Free: (866) 408-2812
Mailing Address:
P.O. Box 884
Griffin, Georgia 30224
Fax
Local: (770) 227-7329
Real Estate Appraisal Service Since 1971
J A S O N D. F l e t c h e r
C o - Ow n e r / C h i e f A p p r a i s e r
Partial Client List
Lending Institutions:
United BankPeachtree Bank of Gwinnett
First National Bank of GriffinSouthern Community Bank
First National Bank of Barnesville
Georgia Power Company
First Choice Community BankFirst Liberty Building & Loan
BB&TSecurity Bank
Regions BankSpalding County
West Central Georgia Bank of ThomastonSouthern Horizon Bank
Georgia Banking Company
City of Griffin
Colony Bank and Trust
United Community Bank
McIntosh State BankNeighborhood Community Bank
First Georgia Bank
Bank of Coweta
Heritage BankFirst City Bank
Park Avenue Bank
Bank of Atlanta
Attorneys:
Drew Whalen – Griffin, Ga
Tim Cramer – Griffin, Ga
Hal Sturdivant – Griffin, Ga
Sam Sullivan – Griffin, Ga Smith, Welch, & Brittain – McDonough, Ga
Allan Connell – Thomaston, Ga
Dianne Wheeler – Thomaston, Ga
Lance Owen – Griffin, Ga
Dillard & Galloway – Atlanta, Ga
David Dunaway – Thomaston, Ga
Accountants:
Robinson, Whaley, Hammonds, & Allison – McDonough, Ga
Alton Knight – Griffin, Ga
Qualified as Valuation Expert Witness: Superior Court of Spalding, Pike, Fayette, Lamar, Henry, Fulton, and Upson
Counties. U.S. Bankruptcy Court, Savannah, Newnan and Atlanta, Georgia.
Education:
Graduate of Griffin High School – 1994
Graduate of Real Estate 2000 Appraisal School – 90 hrs – First licensed in 1999
Income Capitalization courses – 150 hrs
Legal & Economic Aspects of Appraisal – 15 hrs
Additional 220 hrs. of various Appraisal, USPAP, Math, & Georgia Appraisal law classes
State of Georgia - Certified General Real Property Appraiser – No. 211251
State of South Carolina - Certified General Real Property Appraiser – No. 5906
112
JA S O N D. F LETCHER | A pp r a i s e r L i c e ns e s
113

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