development land appraisal of

128 Pages·2016·2.35 MB·English

DEVELOPMENT LAND APPRAISAL OF:
26 SINGLE-FAMILY LOTS
AND 8.72 ACRES OF EXCESS LAND LOCATED
WITHIN THE HUB HALL HEIGHTS RESIDENTIAL DEVELOPMENT.
LINCOLN, LANCASTER COUNTY, NEBRASKA

PREPARED FOR:
MR. TYLER BATES
WEST GATE BANK
6003 OLD CHENEY ROAD
LINCOLN, NEBRASKA 68516

PREPARED BY:
CODY GERDES, MAI
GREAT PLAINS APPRAISAL, INC.
115 CHERRY HILL BLVD.
LINCOLN, NEBRASKA 68510

FILE NUMBER: 16-0128A
March 4, 2016

Mr. Tyler Bates
West Gate Bank
6003 Old Cheney Road
Lincoln, Nebraska 68516

RE: Appraisal of Fee Simple Estate in real estate located east of
Northwest 48th Street and south of West Thatcher Lane, Lincoln,
Lancaster County, Nebraska, including 26 proposed single-family
residential lots and 8.72 acres of excess land.

Owner of Record: Nebraska Housing Resource

Dear Mr. Bates:

As requested, we have prepared the attached appraisal report on the above-
referenced property to be used by Mr. Tyler Bates and representatives of West Gate
Bank for mortgage loan purposes. The purpose of the appraisal report is to estimate
the market value of the subject property in its current and proposed condition as of
February 25, 2016. This report sets forth the valuation premise and data utilized in the
value estimate.

The scope of the appraisal process includes research of information that is
adequate to support a credible analysis. This report is presented in appraisal report
format. We have experience appraising similar properties in the Lincoln market and
no additional study or assistance was needed in order to comply with the Competency
Rule of the Uniform Standards of Professional Appraisal Practice.

The subject property to be appraised includes the proposed single-family lots
within Hub Hall Heights 11th Addition generally located east of Northwest 48th Street and
south of West Thatcher Lane in the northwest portion of Lincoln. The subject property is
proposed to include 26 single-family lots on approximately 6.69 acres with approximately
8.72 acres of excess land reserved for future residential development.

The appraisers are not experts on hazardous materials. The inspection of the site
revealed no known hazardous materials. The subject property may be subject to the
limited use of some chemicals in conjunction with the past agricultural use. The
appraisers caution that if present in excessive quantities, such materials could affect the
value of the property. However, proper application procedures would have limited any
long-term impact to the subject property. The inspection of the subject property revealed
no known hazardous material.
Mr. Tyler Bates
West Gate Bank
March 4, 2016
Page 2

The subject property includes the development of 26 single family lots in a single
phase of development. The demand for the planned lots and the estimated sellout time
will be considered in this report.

The first phase of the proposed subject development utilizes 6.69 acres of the
subject site. The remaining 8.72 acres are considered excess land as a separate
economic unit. The value of this excess land will be added as a line item to the total
value of the discounted cash flow of the proposed development.

The report includes the site improvements associated with the proposed
development of the subject development. Descriptions of the development are based
on an analysis of data which has been provided to the appraisers and based on the
inspection of the appraisers. This appraisal is also based on the completion of the
development with good workmanship and materials, and within the timetable as set out
in this report.

In this report, four market values will be estimated. First is the estimated market
value of the property on the effective date of this analysis. The subject property
includes15.41 acres overall including 6.69 acres of development land for the first phase
of the subject development and 8.72 acres of excess land reserved for future residential
development. This value is estimated using both a Sales Comparison Approach and a
developmental technique of the Income Capitalization Approach to valuation.

Within the developmental technique, the current value will be estimated by
projecting the discounted value of the finished residential lots. The value estimated in
this analysis will consider the gross value of the finished lots, and then will deduct for the
projected remaining development costs, holding costs, and selling costs. The value
indicated is the discounted market value of the finished lots before sales commence. In
addition, the value of the excess land will be added to the discounted cash flow
conclusion to yield a total value indication of the subject property.

The second value estimated is the discounted value of the finished residential lots
not including the projected remaining development costs. Included in this analysis will
be an estimation of the gross value of the finished lots. This value considers the lots
completed, and the holding and selling costs will be deducted. The indicated cash flow
will then be discounted to a present value. The value indicated is the discounted market
value of the finished lots after development expenses have been paid, and before sales
commence. In addition, the value of the excess land will be added to the discounted
cash flow conclusion to yield a total value indication of the subject property.

The third value estimated is the gross value of the finished residential lots. This
value is the estimated selling price of the proposed 26 single-family lots. In addition, the
value of the excess land will be added to the gross value conclusion to yield a total gross
value indication of the subject property.

The fourth value estimated is the value of the excess land. The excess land
includes an area of 8.72 acres and is not considered necessary to support the first
phase of the proposed subject development. For the purposes of the analysis this area
is considered to be developable excess land.
Mr. Tyler Bates
West Gate Bank
March 4, 2016
Page 3

Based on the following data and analysis, the estimated current market value of
the subject property prior to additional development, as proposed, including excess land,
subject to Special and General Limiting Conditions, as of February 25, 2016, is:

FOUR HUNDRED SIXTY-SIX THOUSAND DOLLARS
($466,000.00)

Based on the following data and analysis, the estimated current discounted value
of the finished lots after streets and utilities are completed, as proposed, including
excess land, subject to Special and General Limiting Conditions, as of
February 25, 2016, is:

ONE MILLION ONE THOUSAND DOLLARS
($1,001,000.00)

Based on the following data and analysis, the estimated gross market value of
the finished lots, as proposed, including excess land, subject to Special and General
Limiting Conditions, as of February 25, 2016, is:

ONE MILLION TWO HUNDRED SIXTY-THREE THOUSAND DOLLARS
($1,263,000.00)

Based on the following data and analysis, the estimated current market value of
the excess land consisting of a total of 8.72 acres, subject to Special and General
Limiting Conditions, as of February 25, 2016, is:

TWO HUNDRED SIXTY-TWO THOUSAND DOLLARS
($262,000.00)

Yours truly,

Cody Gerdes, MAI
Certified General Appraiser – CG 270077
TABLE OF CONTENTS

SUMMARY OF SALIENT FACTS AND CONCLUSIONS .............................................................................. 1
SPECIAL LIMITING CONDITIONS ................................................................................................................. 2
GENERAL LIMITING CONDITIONS ............................................................................................................... 3
APPRAISER'S CERTIFICATION ...................................................................................................................... 6
PURPOSE OF THE APPRAISAL ........................................................................................................................ 8
FUNCTION OF THE REPORT ........................................................................................................................... 8
MARKETING PERIOD / EXPOSURE PERIOD ............................................................................................... 9
SCOPE OF THE APPRAISAL ............................................................................................................................10
PROPERTY RIGHTS APPRAISED ...................................................................................................................10
EASEMENTS AND RESTRICTIONS ................................................................................................................11
DATE OF APPRAISAL ........................................................................................................................................11
ACKNOWLEDGEMENT OF ASSISTANCE ....................................................................................................11
IDENTIFICATION OF THE PROPERTY ........................................................................................................12
LEGAL DESCRIPTION ......................................................................................................................................12
OWNERSHIP ........................................................................................................................................................12
HISTORY OF TITLE ...........................................................................................................................................12
PLAT MAP - CURRENT .........................................................................................................................................13
PLAT MAP – AS PROPOSED ..................................................................................................................................14
TAXES AND ASSESSED VALUE DATA ..........................................................................................................15
UTILITIES.............................................................................................................................................................15
FLOODPLAIN ......................................................................................................................................................16
FLOODPLAIN MAP ...............................................................................................................................................16
ZONING .................................................................................................................................................................17
ZONING MAP .......................................................................................................................................................19
CITY ANALYSIS ..................................................................................................................................................20
NORTHWEST LINCOLN RESIDENTIAL LOT MARKET ANALYSIS ......................................................38
DEMOGRAPHIC FACTORS .....................................................................................................................................38
DETERMINATION OF TRADE AREA ......................................................................................................................38
EVALUATION OF DEMAND POTENTIAL ................................................................................................................39
EVALUATION OF SUPPLY WITHIN TRADE AREA ...................................................................................................40
SELLOUT PERIOD ANALYSIS .........................................................................................................................42
SELLOUT PERIOD ESTIMATION ............................................................................................................................55
NEIGHBORHOOD DESCRIPTION ..................................................................................................................57
NEIGHBORHOOD MAP..........................................................................................................................................60
NEIGHBORHOOD PHOTOGRAPHS ..........................................................................................................................61
SITE DESCRIPTION ...........................................................................................................................................63
AERIAL MAP .......................................................................................................................................................65
PLAT MAP - CURRENT .........................................................................................................................................66
PLAT MAP – AS PROPOSED ..................................................................................................................................67
SUBJECT PHOTOGRAPHS ......................................................................................................................................68
HIGHEST AND BEST USE .................................................................................................................................73
HIGHEST AND BEST USE: AS IF VACANT .............................................................................................................74
APPROACHES TO VALUE ................................................................................................................................76
SALES COMPARISON APPROACH ................................................................................................................79
LAND SALES MAP ...............................................................................................................................................87
Explanation of Adjustments .......................................................................................................................88
SINGLE-FAMILY LOT SALES ANALYSIS ...............................................................................................................94
SINGLE-FAMILY LOT SALES MAP ........................................................................................................................99
Final Correlation of Value for Subject Development Lots ...................................................................100
INCOME CAPITALIZATION APPROACH...................................................................................................101
PROJECTION PERIOD OR SELLOUT PERIOD ...........................................................................................102
ESTIMATED POTENTIAL INCOME OF PROPOSED DEVELOPMENT: ..................................................102
FORECASTING EXPENSES: .........................................................................................................................103
Development Costs: .....................................................................................................................................103
Impact Fees: ................................................................................................................................................103
Holding Costs: .............................................................................................................................................103
Selling Costs: ...............................................................................................................................................104
Overhead and Profit ....................................................................................................................................104
SELECTING THE DISCOUNT RATE: ...........................................................................................................105
APPLYING THE APPROPRIATE DISCOUNT PROCEDURE .....................................................................106
Summary of Potential Gross Income of Subject Property ............................................................................107
Summary of Discounted Cash Flow – Including Remaining Development Expenses ..................................108
Summary of Discounted Cash Flow - Not Including Development Expenses ..............................................109
Summary of Discounted Cash Flow Value Analysis ....................................................................................110
RECONCILIATION OF VALUE .....................................................................................................................111
QUALIFICATIONS OF APPRAISER..............................................................................................................113
CODY GERDES, MAI .........................................................................................................................................113

ADDENDA
SUMMARY OF SALIENT FACTS AND CONCLUSIONS

Location: A 6.69 acre residential subdivision and 8.72 acres
of excess land located near Northwest 48th Street
and West Thatcher Lane, Lincoln, Nebraska.

Property Type: Residential Development

Current Zoning: R-3 Residential District

Highest and Best Use: Residential Development

Site Size: 6.69 acres in subdivision
8.72 acres in excess land
15.41 acres overall

Unit Mix: 26 Single Family Lots

Total Lot Sales Percentage of
Sales Period Sellout Period: Per Period Development

3/16 – 8/16 1-6 Month Period 0 0%
9/16 – 2/17 7-12 Month Period 7 27%
3/17 – 8/18 13-18 Month Period 6 24%
9/18 – 2/19 19-24 Month Period 5 19%
3/19 – 8/19 25-30 Month Period 4 15%
9/19 – 2/20 31-36 Month Period 4 15%
Lots Remaining 0 0%

Final Value Estimates:

 Estimated value of the subject property as it
existed on the date of the appraisal: $466,000

 Estimated gross selling prices of finished
single-family lots after development expenses $1,001,000
have been paid, including excess land:

 Estimated gross selling prices of finished
single-family lots, including excess land: $1,263,000

 Estimated value of 8.72 acres of excess land: $262,000

Date of Appraisal: February 25, 2016
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Copyright 2016, Great Plains Appraisal, Inc.
SPECIAL LIMITING CONDITIONS

1. The subject property is analyzed in this report based on a copy of a
development plan provided by the developer and in conjunction with
discussions with the subject developer. The analysis of the subject property is
based on the timely completion of the development based on the time
estimations contained within this report.

2. The subject lot pricing and sellout periods estimated in this report are
considered to be related valuation factors. The sellout period estimations are
predicated on the competitive pricing of the developed lots at the sale prices
estimated in this report. Any deviation from the sales price estimations
contained within this report may have a direct effect on the estimated sellout
periods for the subject property.

3. The appraisers are not experts on hazardous materials. The inspection of the
site revealed no known hazardous materials. The subject property may be
subject to the limited use of some chemicals in conjunction with the past
agricultural use. The appraisers caution that if present in excessive quantities,
such materials could affect the value of the property. However, proper
application procedures would have limited any long-term impact to the subject
property. The inspection of the subject property revealed no known hazardous
material.

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Copyright 2016, Great Plains Appraisal, Inc.
GENERAL LIMITING CONDITIONS

This appraisal is made under the following contingencies along with those
that appear in the body of the appraisal:

1. Title to the property is good and there are no liens or encumbrances except
as noted;

2. No survey was made of the property for the purpose of this report; therefore,
no guarantee is warranted that the improvements are located on the land
herein described;

3. Distribution of the total valuation between land and improvements applies
only under the program of utilization and conditions as set out in this report
and is invalidated under any other program of utilization;

4. Testimony or attendance in court by reason of having prepared this appraisal
shall not be required unless arrangements previously have been made;

5. All sketches, diagrams and photographs included in this report are for the
reader's visual aid only and not based on survey;

6. Certain information, upon which opinions and conclusions are based, has
been obtained from sources considered reliable; however, no liability from
them can be assumed by the appraisers.

7. The appraisers do not warrant the mechanical, electrical, plumbing or
constructional conditions of the improvements. If any of these are reported to
be deficient, the appraisers will make note of them in the body of the
appraisal report;

8. The appraisers are aware of no hidden or apparent conditions in the property,
which would render it more or less valuable than otherwise comparable
property;

9. Disclosure of the contents of this report is governed by the Bylaws and
Regulations of the Appraisal Institute including those sections regarding peer
review. Neither all nor any part of the contents of this report (especially any
conclusions to value, the identity of the appraisers or any reference to the
Appraisal Institute or to the MAI designation, or any other designations) shall
be disseminated to the public through advertising media, public relations
media, news media, sales media or any other public means of
communication, without the prior written consent and approval of the authors;

10. It is assumed that all applicable zoning and use regulations and restrictions
have been complied with, unless a non-conformity has been stated, defined
and considered in the body of the report.

11. It is assumed that there was full compliance with all applicable federal, state
and local environmental regulations and laws unless noncompliance is stated,
defined and considered in the report.

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Copyright 2016, Great Plains Appraisal, Inc.
12. It is assumed that all required licenses, consents or other legislative or
administrative authority from any local, state or national governmental or
private entity or organization had been or could have been obtained or
renewed for any use on which the value opinion contained in this report is
based.

13. Possession of this report, or a copy thereof, does not carry with it the right of
publication. It may not be used for any purpose by any person other than the
party to whom it is addressed without the prior written consent of the
appraisers, and in any event only with properly written qualification and only
in its entirety.

14. The consideration for the preparation of this report is the payment by the
client of all charges due the appraisers in connection therewith. Any
responsibility of the appraisers for any part of the report is conditioned upon
full payment.

15. In this appraisal assignment, potentially hazardous material such as urea-
formaldehyde foam insulation, and/or radon gas, and/or asbestos, and/or
toxic waste, and/or lead paint may or may not have been present on the
property. The appraisers, however, are not qualified to detect such
substances. The existence of potentially hazardous material may have an
effect on the value of the property.

16. The mechanical systems had not been evaluated by our company nor are we
qualified to comment as to the compliance with ASHRAE Standard 62-1989.
Accordingly, no representations are made with respect to indoor air quality
within the building.

17. A survey has not been conducted by our company, nor are we qualified to
comment on existing reciprocating or centrifugal equipment to determine the
amount of Chlorofluorocarbons (CFC’s) that may have been present in the
building. CFC’s are regulated by the Clean Air Act of 1990, and the
production of CFC’s is banned after 1999 by the Montreal Protocol of 1987.

18. Acceptance and/or use of this appraisal report constitutes acceptance of the
foregoing general assumptions and general limiting conditions.

19. Unless otherwise stated in the report the opinion of value does not include
any personal property, fixtures, tangible or intangible items that are not real
property.

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Copyright 2016, Great Plains Appraisal, Inc.