Sample Appraisal Report

151 Pages·2016·3.42 MB·English

APPRAISAL REPORT
E
PREPARED FOR
Margaret Christopher, MAI
ABC Bank N.A. L
Client ID: P
Sample Appraisal Report - Industrial
M
REAL PROPERTY APPRAISED
Two-Bay Office Warehouse CoAndominium
1400 and 1410 SW 44th Avenue
Unincorporated Area of
S
Doral, Florida 33166-2607
Miami-Dade County

D
DATE OF THE REPORT & CERTIFICATION
July 15E, 2016
T
DATE OF VALUE
Please be advised that if this
appraisal report was transmitted C As-Is market value of the fee simple interest
by e-mail it may have been as of July 8, 2016
necessary to reduce the file size

and therefore images may not be
A
as clear as the original.

If you are an authorized user
identified in the following
engagement letter andD would
prefer a more readable PDF
please contact us at your
convenience.
E
PREPARED BY
SOUTH FLORIDA REAL ESTATE APPRAISAL, LLC
R
1500 WESTON ROAD #200-28
WESTON, FLORIDA 33326
• Miami-Dade
• Broward
MICHAEL P. JACOBS, MA, MAI
• Palm Beach
• Collier/Lee State-certified general real estate appraiser RZ#2621
• Monroe
SFREAppraisal File No. 160712a
www.SFREAppraisal.com
[email protected]
[phone]
E
L
P
M
A
S

D
E

T

Two-Bay Office Warehouse Condominium
C
1400 and 1410 SW 44th Avenue
A Unincorporated Area of
Doral, Florida 33166-2607
D Miami-Dade County
Client ID: Sample Appraisal Report - Industrial
E
R
• Miami-Dade
• Broward
• Palm Beach
• Collier/Lee
• Monroe

www.SFREAppraisal.com
[email protected]
[phone]
www.SFREAppraisal.com
Michael Patrick Jacobs, MA, MAI
State-certified general real estate appraiser RZ#2621 1500 Weston Road #200-28
E
[email protected] ♦ Cell [phone] / Fax [phone] Weston, Florida 33326

L
July 15, 2016
Margaret Christopher, MAI P
Chief Appraiser
ABC Bank N.A.
M
123 Some Place
Anywhere, US 00000
Re: Two-Bay Office Warehouse Condominium
A
1400 and 1410 SW 44th Avenue
Unincorporated area of Doral, FL 33166-2607
Miami-Dade County S
Client ID: Sample Appraisal Report - Industrial

SFREA File No.: 160712a
D
Dear Ms. Christopher:
E
This Appraisal Report has been prepared at your request according to the engagement terms in
Addendum, and under standards and reporting requirements of the Uniform Standards of
Professional Appraisal Practice (“UTSPAP”) adopted by the Appraisal Standards Board of the
Appraisal Foundation (www.appraisalfoundation.org).
C
This is an Appraisal Report as defined by the Uniform Standard of Professional Appraisal
Practice under Standards Rule 2-2(a). This format provides a detailed and complete description
of the appraisal process, subject data and valuation. The approaches employed in this appraisal
A
report are considered within the industry to be sufficient to develop credible assignment results
in solving the appraisal problem.
This report isD intended for use by ABC Bank N.A., the client, and the intended use of this
appraisal is for mortgage underwriting. ABC Bank N.A. affiliates, successors or assigns and
participating financial institutions are also intended users. Under USPAP the appraiser requires
E
written authorization to discuss assignment results or confidential information with anyone
except the client. This report is also subject to review by duly authorized representatives of the
RAppraisal Institute, and the State of Florida real estate appraisal subcommittee of the Florida
Real Estate Commission. Use of this report by others (“unauthorized user”) is not permitted. No
one else, or any other entities, may rely on this appraisal.
This report has been prepared for the purposes of estimating the “As-Is” market value of the fee
simple interest as of July 8, 2016. USPAP also implies that a bulk-sale scenario must be
considered when analyzing multiple economic units. This term is defined in the Definitions
section of this report. Although the appraised property is composed of two tax parcels, it operates
as a single economic unit and a bulk-sale scenario value estimate is not relevant.
South Florida Real Estate Appraisal, LLC  Real Estate Appraisers & Consultants
File No. 160712a  Page 1 of 131
Appraisal of: Two-Bay Office Warehouse Condominium
Client: ABC Bank N.A.
Report Date: July 15, 2016

You will find a table of contents, a USPAP requirements checklist, a brief summary of salient
facts and conclusions, exhibits, certification and general assumptions and limiting conditions in
the next few pages. Acceptance of this report constitutes an agreement with these conditions and
E
assumptions. A discussion of the parameters and scope of the appraisal follows.
This is a real estate appraisal only. The appraisal does not include any furniture, fixtures or
L
equipment (“FF&E”) necessary to operate any business, or any business entities occupying the
property.
P
The terms Extraordinary Assumptions and Hypothetical Conditions are defined within the
Definitions Section of this report, and when used may have significant impact on appraisal
observations and conclusions when present. M
• This appraisal contains no extraordinary assumptions.
• This appraisal is not based on any hypothetical conditions.
A
As a result of my investigation my conclusions are as follows:
Conclusion Improved
S
Value Parameter Effective Date of Value $/SqFt
Personal property, fixtures & intangibles: None

Current Market Value of the Fee Simple Interest AsD-Is: July 8, 2016 $1,895,000 $172.27
Market Exposure Time: 6 months

E
Please tell your peers about our appraisal report. If your experience with South Florida Real
Estate Appraisal, LLC has been anything less than exceptional, or this is not one of the best
certified commercial real estate Appraisal Reports you have read, I hope you will contact me
T
with suggestions to improve our service.
CRespectfully submitted,

A

Michael P. Jacobs, MA, MAI
D
State-certified general real estate appraiser RZ#2621
[email protected] [phone]
E
R
• Miami-Dade
• Broward
• Palm Beach
• Collier/Lee
• Monroe

www.SFREAppraisal.com
[email protected]
[phone]
South Florida Real Estate Appraisal, LLC  Real Estate Appraisers & Consultants
File No. 160712a  Report Date: July 15, 2016  Page 2 of 131
Appraisal of: Two-Bay Office Warehouse Condominium  Table of Contents Section
Client: ABC Bank N.A.
Client ID: Sample Appraisal Report - Industrial
TABLE OF CONTENTS
Letter of Transmittal ..................................................................................................................................... 1
Table of Contents .......................................................................................................................................... 3
E
Minimum USPAP Requirements Checklist .................................................................................................. 5
Summary of Important Facts and Conclusions ............................................................................................. 6
Maps, Diagrams and Photographs .............................................................................................................. 13
L
Certificate of Value ..................................................................................................................................... 25
General Assumptions and Limiting Conditions .......................................................................................... 27
P
INTRODUCTION 30
Purpose of the Appraisal Report ................................................................................................................. 31
Client, Intended User and Use of the Appraisal Report ....................................................M.......................... 31
Definitions................................................................................................................................................... 32
Definition of Market Value ................................................................................................................ 32
Definitions from the Dictionary of Real Estate Appraisal ................................................................. 33
A
Terms “Extraordinary Assumption” and “Hypothetical Condition” .................................................. 34
Scope of Work ............................................................................................................................................ 35
DESCRIPTION & ANALYSIS 39
S
Identification and History of the Subject Property ..................................................................................... 40
Location and Address ......................................................................................................................... 40
Current Use and Occupancy Profile .............................. ..................................................................... 41
Sale and Listing History of the Subject Property .....D.......................................................................... 41
Site Description ........................................................................................................................................... 45
Description of the Improvements ................................................................................................................ 48
Zoning .................................................................E........................................................................................ 55
Miami-Dade County 2015 Real Estate Assessment and Taxes .................................................................. 56
Neighborhood Description .......................................................................................................................... 58
Access and Linkages .....................T..................................................................................................... 58
Demand Generators ............................................................................................................................ 58
General Area Description ................................................................................................................... 59
C
Linkage ............................................................................................................................................... 60
Demographics ..................................................................................................................................... 62
Summary Ratings & Conclusions ...................................................................................................... 64
A
Supply and Demand .................................................................................................................................... 65
CoStar Submarket Leasing and Sales Trends ..................................................................................... 65
LoopNet Leasing and Sales Trends .................................................................................................... 68
D
Competitive Peers .............................................................................................................................. 71
Absorption Analysis ........................................................................................................................... 72
Supply & Demand Analysis Observations and Conclusions ............................................................. 72
E
Highest and Best Use .................................................................................................................................. 73
Methodology ...................................................................................................................................... 73
Highest and Best Use Analysis .......................................................................................................... 75
R
Marketing Time and Exposure Time .................................................................................................. 78
Most Likely Buyer and Typical User of the Subject .......................................................................... 80
VALUATION 81
Valuation Methodology .............................................................................................................................. 82
The Three Approaches to Value ......................................................................................................... 82
Qualitative vs. Quantitative Adjustment Methods ............................................................................. 84
Reconciliation ..................................................................................................................................... 84
South Florida Real Estate Appraisal, LLC  Real Estate Appraisers & Consultants
File No. 160712a  Report Date: July 15, 2016  Page 3 of 131
Appraisal of: Two-Bay Office Warehouse Condominium  Table of Contents Section
Client: ABC Bank N.A.
Client ID: Sample Appraisal Report - Industrial
Cost Approach – Excluded ......................................................................................................................... 85
Income Capitalization Approach ................................................................................................................ 86
Leased Status of the Subject Property ................................................................................................ 87
E
Market Rental Analysis ...................................................................................................................... 88
Vacancy and Collection Loss ............................................................................................................. 93
Projected Stabilized Effective Gross Income ..................................................................................... 93
L
Operating Expense Analysis .............................................................................................................. 94
Underwritten Net Operating Income .................................................................................................. 96
Overall Capitalization Rate Estimation ................................................................................P.............. 97
Direct Capitalization......................................................................................................................... 106
Conclusion of Value by the Income Capitalization Approach ......................................................... 107
Sales Comparison Approach .............................................................................................M........................ 108
Selection of Comparables ................................................................................................................. 108
Improved Sales Grid ......................................................................................................................... 109
Adjustment Grid ............................................................................................................................... 119
A
Listings ............................................................................................................................................. 125
Conclusion of Value by the Sales Comparison Approach ............................................................... 126
Review and Reconciliation of Value ........................................................................................................ 128
S
Review of Extraordinary Assumptions & Hypothetical Conditions ................................................ 128
Reconciliation ................................................................................................................................... 128
Conclusion of Value ...................................................... ................................................................... 130
ADDENDA D 131

A Qualifications & License
B Miami-Dade County RegionaEl Analysis
C RealQuest Flood Map
D RealQuest Situs Report
T
E Miami-Dade County Assessor
F Engagement Letter
C

A
D
E
R
South Florida Real Estate Appraisal, LLC  Real Estate Appraisers & Consultants
File No. 160712a  Report Date: July 15, 2016  Page 4 of 131
Appraisal of: Two-Bay Office Warehouse Condominium  Minimum USPAP Requirements Checklist Section
Client: ABC Bank N.A.
Client ID: Sample Appraisal Report - Industrial
MINIMUM USPAP REQUIREMENTS CHECKLIST
Note: some items may be simply stated rather than summarized for Restricted Appraisal Reports
Please let us know if we can customize this for your company: [phone] or [email protected]
E
Prominently state the USPAP report option used Transmittal Letter, page 1
State the identity of the client Transmittal Letter, page 1
L
State the identity of the intended users (by name or type) Transmittal Letter, page 1
State the intended use of the appraisal Transmittal LettePr, page 1
Summarize information sufficient to identify the real estate, including relevant Pg. 40 and Addendum
physical, legal, and economic characteristics M
State the real property interest appraised Transmittal, page 1
State the type of value Transmittal, page 1
A
State the definition of value Definitions Pg. 32
Cite the source of the value definition Definitions Pg. 32
S
State the effective date of the appraisal Transmittal Letter, page 1
State the date of the report Transmittal Letter, page 1

Summarize the scope of the work used to develop the apDpraisal Scope Pg. 35 to 38
Properly disclose significant real property appraisal assistance (if any) Certificate of Value pg. 25
Summarize the information analyzed, the appraisEal methods and techniques Valuation Section pg. 82
employed, and the reasoning that supports the analyses, opinions and and throughout approaches
conclusions used.
T
Explain the exclusion of the sales comparison, cost, and/or income Pg. 82 - 83
approaches
C
Summarize the reconciliation process Pg. 128
Summarize the results of analyzing the subject agreement, options, or Pg. 41
A
listings, or prior sales history
State the use of the real estate existing as of the date of value, and the use Pg. 41
of the real estatDe reflected in the appraisal
Summarize the support and rationale for the opinion of highest and best use Pg. 75
(if developed)
E
Clearly and conspicuously state all extraordinary assumptions and Letter of Transmittal pg. 2
hypothetical conditions (if applicable)
R
State that the use of extraordinary assumptions and/or hypothetical Letter of Transmittal pg. 2
conditions might have affected the assignment results (if applicable)
Include a signed certification in accordance with Standards Rule 2-3 Pg. 13
Does certification include statement regarding whether or not prior services Certification pg. 13
were provided by the appraiser within the prior three years?
South Florida Real Estate Appraisal, LLC  Real Estate Appraisers & Consultants
File No. 160712a  Report Date: July 15, 2016  Page 5 of 131
Appraisal of: Two-Bay Office Warehouse Condominium  Summary of Important Facts and Conclusions Section
Client: ABC Bank N.A.
Client ID: Sample Appraisal Report - Industrial
SUMMARY OF IMPORTANT FACTS AND CONCLUSIONS
APPRAISAL ASSIGNMENT E
Report Type: Appraisal Report
L
Client & Intended ABC Bank N.A.
User(s):
ABC Bank N.A. affiliates, successors or assigns and participating
P
financial institutions are also intended users. Under USPAP the appraiser
requires written authorization to discuss assignment results or confidential
information with anyone except the client. M
Client ID: Sample Appraisal Report - Industrial
SFREA ID: 160712a A
Prior Services: I have performed no services, as an appraiser or in any other capacity,
regarding the property that is the subject of this report within the three-
S
year period immediately preceding acceptance of this assignment.
Use: Mortgage underwriting.

Purpose & Interests This report has been prepared for the purposes of estimating the “As-Is”
D
Appraised: market value of the fee simple interest as of July 8, 2016. USPAP also
implies that a bulk-sale scenario must be considered when analyzing
multiple economic unEits. This term is defined in the Definitions section of
this report. Although the appraised property is composed of two tax
parcels, it operates as a single economic unit and a bulk-sale scenario
T
value estimate is not relevant.
Sale Status of the I have been informed by my client and principals to the transaction that
C
Property: the property is under contract for $1,895,000 or $172.27 per square foot. It
is currently listed for $2,500,000 or $227.27 per square foot.
Most Likely Buyer: AThe most likely buyer is an owner-user. The property is vacant. Because
the dominant occupancy-profile for the facility is an owner-user, market
participants give little or no weight to economic stabilization issues or the
D
income capitalization approach. A leasehold estate does not exist, and
therefore analysis of a leased fee estate is irrelevant. Only the fee simple
estate is relevant.
E
R
South Florida Real Estate Appraisal, LLC  Real Estate Appraisers & Consultants
File No. 160712a  Report Date: July 15, 2016  Page 6 of 131
Appraisal of: Two-Bay Office Warehouse Condominium  Summary of Important Facts and Conclusions Section
Client: ABC Bank N.A.
Client ID: Sample Appraisal Report - Industrial
INFORMATION REQUEST
The following items were requested from the borrower. Any deviation from the information
supplied and assumptions used may result in a change of value. Income tax returns were not E
requested because income and expense allocations in tax returns can legally be reported or
allocated for tax purposes differently than an investor would underwrite. It is assumed that
L
information provided is representative of the property performance under the Limiting
Conditions section of this report.
P
Provided by Not
Information Request borrower Provided Remarks
M
Purchase contract x Retained in files.
Title report x Unavailable.
Site plan x Unavailable.
A
Survey x Unavailable.
Building diagram with measurements x Provided.
Building interior floor plan x S Provided.
Recent capital improvements x None per borrower.
Prospective capital improvements x None per borrower.
Current or pending tax changes x D None per borrower.
Recent or pending land use issues x None per borrower.

Because of the property profile, most mEarket participants would conclude that a credible
appraisal could be completed without the information not provided within the context of the
Scope and Limiting Conditions of this report.
T
IDENTIFICATION OF THE PROPERTY
C
Property Name: Two-Bay Office Warehouse Condominium
Address: 1400 and 1410 SW 44th Avenue
A
Unincorporated area of Doral, FL 33166-2607
Location: The subject property is located in an unincorporated area of Doral, within
D
Miami-Dade County and the Miami - Fort Lauderdale - Pompano Beach
MSA, in the Miami Airport North Industrial Submarket on the southeast
corner of SW 14th Street at SW 44th Avenue between Jefferson and
E
Whitewood street corridors.
Parcel Numbers: 00-0000-000-0000 and 00-0000-000-0000
R
Census Tract: 90.35
South Florida Real Estate Appraisal, LLC  Real Estate Appraisers & Consultants
File No. 160712a  Report Date: July 15, 2016  Page 7 of 131
Appraisal of: Two-Bay Office Warehouse Condominium  Summary of Important Facts and Conclusions Section
Client: ABC Bank N.A.
Client ID: Sample Appraisal Report - Industrial
OVERALL PROPERTY SUMMARY
Property Type: Industrial (office warehouse).
E
Highest & Best Use Vacant: An office warehouse when warranted by demand.
Highest & Best Use Improved: An industrial use as improved.
L
The subject property consists of two bays of a four-bay dock-height industrial condominium that
has been renovated and demised as a single-user facility. The appraised land area contains two
P
tax-parcels with a total of 39,200 square feet (0.947 acres). The site is effectively 100% usable.
Size estimates are not always conclusive. Principals, brokers, rent rolls, official public records
M
and other sources can all legitimately differ. A building diagram with measurements was
provided. I took sample on-site and/or aerial photograph measurements, and my observations are
discussed in relevant sections describing the property. The improvements consist of two
buildings of 11,000 square feet, built in 1992 of average qualityA, and in good condition
considering the market standard for the construction era and design-profile.
The property is vacant. Because the dominant occupancy-profile for the facility is an owner-user,
S
market participants give little or no weight to economic stabilization issues or the income
capitalization approach. Additional discussion of the property can be found within this appraisal
report, and a detailed regional analysis is included in A ddendum.
D
The most probable buyer of the property, considering its occupancy and financing-profile, is an
owner-user. The property does not reflect investment-grade attributes and therefore would not be
of interest to institutional investors.
E
The most compelling property attributes are:
• Positive attributes include favoraTble industrial location north of Doral, and the good interior
renovations including roof, 100% HVAC and two-story office.
• Negative attributes incluCde comingled front loading and parking, where trucks will
occasionally block office parking spaces, although the facility has above-market loading
capacity for its size and design.
A
• Special features with limited market appeal include the studio-buildout including a ceiling
cage for prop-suspension, green-screen area, boxing of two loading doors and a sound booth.
These havDe nominal impact on value because they are easily removed and have few potential
users.
During the appraisal process I found:
E
• No material deferred maintenance or repairs threatening structural integrity that should be
cured immediately, or evidence of environmental or health hazards for further investigation.
R
• No delinquent property taxes. Property taxes are low, and market participants would assume
that they should not be appealed.
• No historical significance or special resource issues that should be investigated further.

South Florida Real Estate Appraisal, LLC  Real Estate Appraisers & Consultants
File No. 160712a  Report Date: July 15, 2016  Page 8 of 131