example restricted appraisal report -...

RESTRICTED APPRAISAL REPORT

Prepared for Able Banker, MAI

Example Bank

Property Appraised Example Industrial Condominium

1000 NW 2nd Avenue #10 Incorporated City of

Doral, Florida 33172-2225 Miami-Dade County

Client ID: 00000-0000 (Orange Properties LLC)

Date of Market Value of the Fee Simple Estate January 17, 2014

Prepared by

SOUTH FLORIDA REAL ESTATE APPRAISAL, LLC 1500 WESTON ROAD #200-28 WESTON, FLORIDA 33326 MICHAEL P. JACOBS, MA, MAI State-certified general real estate appraiser RZ#2621 30 YEARS' EXPERIENCE File # 140123a

• Miami-Dade • Broward • Palm Beach • Collier • Lee

www.SFREAppraisal.com [email protected] (954) 649-0666

IMPORTANT NOTICE TO THE READER

This is the combination and redaction of several actual appraisal reports.

Changes have been made to the data, analysis and observations, so any inconsistencies probably result from the redaction process.

Appraisal requirements and SFREAppraisal report formats change frequently. For current samples, contact the appraiser at the e-mail address below.

http://www.sfreappraisal.com/

mailto:[email protected]

Example Industrial Condominium 1000 NW 2nd Avenue #10

Incorporated City of Doral, Florida 33172-2225

Miami-Dade County Client ID: 00000-0000 (Orange Properties LLC)





South Florida Real Estate Appraisal, LLC Real Estate Appraisers and Consultants

1500 Weston Road #200-28 Weston, Florida 33326

Michael P. Jacobs, MA, MAI Phone (954) 649-0666 / Fax (954) 252-4140 30 Years' Experience [email protected] www.SFREAppraisal.com State Certified General Appraiser

August 20, 2014

Able Banker, MAI Senior Vice President Example Bank 50 Avenue of the Americas New York, NY 10000 Re: Example Industrial Condominium

1000 NW 2nd Avenue #10 Incorporated City of Doral, FL 33172-2225 Miami-Dade County Client ID: 00000-0000 (Orange Properties LLC) SFREA File No. 140123a

Dear Mr. Banker: I have prepared a Restricted Appraisal Report of the above referenced property at your request. The appraisal is prepared in accordance with the standards and reporting requirements of the Uniform Standards of Professional Appraisal Practice adopted by the Appraisal Standards Board of the Appraisal Foundation. This is a Restricted-Use Report as defined by Uniform Standards of Professional Appraisal Practice under Standards Rule 2-2(C). This format provides for only basic property identification, appraisal statements and value conclusion(s). It may not be understood by readers who are unfamiliar with the property or our engagement contract, and must not be distributed to others without strong warnings that there are many issues that were considered and analyzed but not conveyed within this report. This report was prepared for the purposes of estimating the As Is market value of the fee simple interest as of January 17, 2014. Terms are defined within the pages of the following report, and the report has been prepared based on the scope of the work which is detailed in the Introduction. The reader of the appraisal is strongly advised to read the Introduction section to understand the limitations and context of this appraisal. Acceptance of this report constitutes an agreement with these conditions and assumptions.

South Florida Real Estate Appraisal, LLC Real Estate Appraisers & Consultants Page 1

Able Banker, MAI Senior Vice President Example Bank August 20, 2014

This report is intended for use by Example Bank, the client. Example Bank affiliates are also intended users of this report. Use of this report by others is not intended by the appraiser. No one else, or any other entities, should rely on this appraisal other than those noted herein. As a result of my investigation my conclusions are as follows:

Value Parameter Date Value $/SqFt

Market Value of the Fee Simple Interest As Is January 17, 2014 $720,000 $114.80 It should be noted that the valuation herein does not include any furniture, fixtures or equipment necessary to operate any business, or businesses occupying the subject property. Appliances and some fixtures are typically included in industrial real estate sales, and are not itemized. The valuation herein also does not include a value for any business entity, or entities occupying the subject property. The value conclusions are subject to the following extraordinary assumptions that may affect the assignment results. An extraordinary assumption is uncertain information accepted as fact. If the assumption is found to be false as of the effective date of the appraisal, the right to modify value conclusions is reserved.

• This appraisal contains no extraordinary assumptions. The value conclusions are based on the following hypothetical conditions that may affect the assignment results. A hypothetical condition is a condition contrary to known fact on the effective date of the appraisal but is supposed for the purpose of analysis.

• This appraisal is not based on any hypothetical conditions.

Respectfully submitted,

Michael P. Jacobs, MA, MAI State-certified general real estate appraiser RZ#2621






Table of Contents Example Industrial Condominium, Doral, FL

TABLE OF CONTENTS

Letter of Transmittal ............................................................................................................................... 1 Table of Contents ................................................................................................................................... 3 Summary of Pertinent Data .................................................................................................................... 5 Certificate of Value ................................................................................................................................ 9 General Assumptions and Limiting Conditions ................................................................................... 11

INTRODUCTION ................................................................................................................................ 14

Maps, Diagrams and Photographs ........................................................................................................ 15 Purpose of the Appraisal Report ........................................................................................................... 25 Client, Intended User and Use of the Appraisal Report ....................................................................... 25 Definitions ............................................................................................................................................ 25 Scope of Work ...................................................................................................................................... 26

DESCRIPTION & ANALYSIS ........................................................................................................... 28

Identification and History of the Subject Property ............................................................................... 29 Site Data ............................................................................................................................................... 31

Zoning .......................................................................................................................................... 32 Flood Zone ................................................................................................................................... 32

Miami-Dade County 2013 Real Estate Assessment and Taxes ............................................................ 33 Description of the Building Improvements .......................................................................................... 35 Neighborhood Description ................................................................................................................... 39 Supply and Demand ............................................................................................................................. 40

Outlook Forecast and Conclusions of Market Analysis .............................................................. 43 Highest and Best Use ........................................................................................................................... 44 Reasonable Exposure Time & Most Likely Buyer ............................................................................... 45

VALUATION ...................................................................................................................................... 46

Appraisal Process ................................................................................................................................. 47 Income Capitalization Approach .......................................................................................................... 48

Leased Status of the Subject Property ......................................................................................... 48 Market Rental Analysis ............................................................................................................... 48 Vacancy and Collection Loss ...................................................................................................... 51 Projected Stabilized Effective Gross Income .............................................................................. 52 Operating Expense Analysis ........................................................................................................ 52 Proforma Operating Statement .................................................................................................... 53 Discussion of the Overall Capitalization Rate ............................................................................. 54 Direct Capitalization .................................................................................................................... 57 Conclusion of Value by the Income Capitalization Approach .................................................... 57

Sales Comparison Approach ................................................................................................................ 58 Selection of Comparables ............................................................................................................ 59 Improved Sales Grid .................................................................................................................... 59 Adjustment Grid .......................................................................................................................... 67 Conclusion of Value by the Sales Comparison Approach ........................................................... 72

Reconciliation of Value ........................................................................................................................ 73 Conclusion of Value .................................................................................................................... 74



ADDENDA .......................................................................................................................................... 75

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



SUMMARY OF PERTINENT DATA

APPRAISAL ASSIGNMENT

Report Type: Restricted Appraisal Report SFREA ID: 140123a Client ID: 00000-0000 (Orange Properties LLC) Client & Intended User(s): Example Bank

Example Bank affiliates are also intended users of this report. Use Mortgage underwriting Purpose of the Appraisal: This report was prepared for the purposes of estimating the As

Is market value of the fee simple interest as of January 17, 2014.

I requested but was not provided with the property survey, site plan, floor plans, operating statements, and current budget. However, because of the property profile most market participants would agree that a credible appraisal could be completed without these items. The value conclusions are subject to the following extraordinary assumptions that may affect the assignment results. An extraordinary assumption is uncertain information accepted as fact. If the assumption is found to be false as of the effective date of the appraisal, the right to modify value conclusions is reserved.





IDENTIFICATION OF THE PROPERTY

Property Name: Example Industrial Condominium Address: 1000 NW 2nd Avenue #10

Incorporated City of Doral, FL 33172-2225 Location: The subject property is located in the incorporated City of

Doral, within Miami-Dade County and the Miami - Fort Lauderdale - Pompano Beach MSA, in the Miami Airport West Industrial District one site north of NW 101st Street on the west side of NW 2nd Avenue.

Parcel Number: 00-0000-000-0000 Census Tract: 90.10 Type of Use: Industrial The property consists of an internal office-warehouse bay in

the Doral Warehouse industrial condominium.

GENERAL PROPERTY OVERVIEW

The subject property consists of an internal office-warehouse bay in the Doral Warehouse industrial condominium located in the incorporated City of Doral, within Miami-Dade County and the Miami - Fort Lauderdale - Pompano Beach MSA in the Miami Airport West Industrial District one site north of NW 101st Street on the west side of NW 2nd Avenue. The improvements consist of an office warehouse condominium of 6,272 square feet, built in 1995 of good quality and currently in good condition. Owner occupancy is 100%, and the owner uses the facility as a rapid-turnover distribution hub. At the time of inspection it was inactive (between shipments) but according to the owner it remains owner occupied. Additional discussion of the property can be found within this appraisal report, and a detailed regional analysis is included in Addendum.

SITE SUMMARY

Zoning: IC, Industrial Commercial by Doral, Florida. Flood: Zone AH, Comm. Panel 120041 - 0286L (September 11, 2009) Shape Rectangular Topography: Level

Est.Shape Use Units Built Zoning GLA Sq.Ft. Acres

Example Industrial Condominium

Rectangular Industrial 8 1995 IC 22,000 129,950 2.98

Gross



IMPROVEMENT SUMMARY

APN Address Use Class Built Stories GLA

00-0000-000-0000 1000 NW 2nd Avenue #10 Industrial B 1995 2 6,272

Ground Second Total

Office 1,978 1,633 3,611 58%Warehouse 2,316 2,316Included Mezzanine 345 345

Total Gross Leasable Area 4,294 1,978 6,272

Excluded Mezzanine 0 Construction: CBS Year Built: 1995 Competitive Class: B Actual Age: 19 years Floors: 2 Effective Age: 19 years Quality: Good Remaining Economic Life: 31 years Condition: Good

Parking Ratio: 1.50:1,000 SqFt overall condominium site Land-to-Building Ratio: 5.91:1.0 overall condominium site

HIGHEST AND BEST USE

Highest & Best Use Vacant: To hold for future development of an industrial land use when warranted by demand

Highest & Best Use Improved: An industrial use as improved



VALUATION SUMMARY

Cost Approach N/A Income Capitalization Approach Owner Occupancy: 100% Vacancy: 0.0% (0 spaces)

Market Vacancy & Collection: 5.0% Stabilized Capitalization Rate: 6.00% Sales Comparison Approach 5 sales were used Unadjusted Net Gross Adjusted

Price Range $/SF Bldg Adj. Adj. $/SqFt BldgLow $105.73 -10% 5% $111.02Average $121.70 0% 18% $121.38Median $123.26 0% 20% $117.22High $143.38 5% 30% $143.38

VALUE CONCLUSIONS

As Is Market Value of the Fee Simple Interest

January 17, 2014

Cost Approach N/APrice per Square Foot N/A

Income Capitalization Approach $710,000 No ReliancePrice per Square Foot $113.20

Sales Comparison Approach $720,000Price per Square Foot $114.80

Final Value Estimate $720,000Price per Square Foot $114.80

Date of the report August 20, 2014Market Exposure Time 9 monthsMarketing Period 9 months


Certificate of Value Example Industrial Condominium, Doral, FL

CERTIFICATE OF VALUE

The undersigned does hereby certify that, to the best of my knowledge and belief: 1. The statements of fact contained in this appraisal report are true and correct. 2. The reported analyses, opinions and conclusions are limited only by the reported

assumptions and limiting conditions, and is my personal, impartial, and unbiased professional analyses, opinions and conclusions.

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

4. I have no bias with respect to the property that is the subject of this report or to the parties involved with this assignment.

5. My engagement in this assignment was not contingent upon developing or reporting predetermined results.

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

7. My analyses, opinions and conclusions were developed, and this report has been prepared, in conformity with the following requirements.

• The Code of Professional Ethics and the Standards of Professional Practice of the Appraisal Institute

• Uniform Standards of Professional Appraisal Practice (USPAP)

• The State of Florida requirements for state-certified appraisers

• FIRREA of 1989 – Title XI and its updates

• Office of the Comptroller of the Currency of the United States of America

• Federal Deposit Insurance Corporation (FDIC)

• Example Bank

• Example Bank affiliates are also intended users of this report. 8. I have complied with the USPAP Competency Rule. 9. This appraisal report sets forth all of the limiting conditions imposed by the terms of this

assignment or by the undersigned affecting the analyses, opinions and conclusions contained in this report.

10. No one provided significant real property appraisal professional assistance to the person signing this report, unless specifically noted herein.


Certificate of Value Example Industrial Condominium, Doral, FL

11. The use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representatives. Additionally, it is subject to review by the state of Florida relating to review by the real estate appraisal subcommittee of the Florida Real Estate Commission.

12. As of the date of this report Michael P. Jacobs, MA, MAI has completed the Standards and Ethics Education Requirement of the Appraisal Institute.

13. I, Michael P. Jacobs, MA, MAI made a personal inspection of the property that is the subject of this report.

14. I last appraised the subject property on February 18, 2013. I have not performed any other valuation or professional services involving the subject property in any capacity in the last three years, nor am I presently involved with the management, leasing, disposition, nor any similar service regarding the subject property.

15. It should be noted that the valuation herein does not include any furniture, fixtures or equipment necessary to operate any business, or businesses occupying the subject property. The valuation herein does not include a value for any business entity, or entities occupying the subject property.

16. Value conclusions are as follows:

Value Parameter Date Value $/SqFt

Market Value of the Fee Simple Interest As Is January 17, 2014 $720,000 $114.80

Michael P. Jacobs, MA, MAI State-certified general appraiser RZ#2621

Date of Report: August 20, 2014


General Assumptions & Limiting Conditions Example Industrial Condominium, Doral, FL

GENERAL ASSUMPTIONS AND LIMITING CONDITIONS

General Assumptions This appraisal report has been made with the following general assumptions:

1. No responsibility is assumed for the legal description or for matters pertaining to legal or title considerations. Title to the property is assumed to be good and marketable unless otherwise stated.

2. The property is appraised free and clear of any or all liens or encumbrances unless otherwise stated.

3. Responsible ownership and competent property management are assumed. 4. The information furnished by others is believed to be reliable but, no warranty is given

for its accuracy. 5. All engineering studies are assumed to be correct. Any plot plans or illustrative material

in this report are included only to help the reader visualize the property. 6. It is assumed that there are no hidden or unapparent conditions of the property, subsoil, or

structures that render it more or less valuable. No responsibility is assumed for such conditions or for obtaining the engineering that may be required to discover them. The values estimated herein are subject to typical inspections such as roof, structural, and termite, if applicable.

7. It is assumed that the property is in full compliance with all applicable federal, state and local environmental regulations and laws unless the lack of compliance is stated, described and considered in the appraisal.

8. It is assumed that the property conforms to all applicable zoning and use regulations and restrictions unless non-conformity has been identified, described and considered in the appraisal.

9. It is assumed that all required licenses, certificates of occupancy, consents, and other legislative or administrative authority from any local, state or national government or private entity or organization have been or can be obtained or renewed for any use on which the opinion of value contained in this report is based.

10. It is assumed that the use of the land and improvements is confined within the boundaries or property lines of the property described and considered in the appraisal.

11. Unless otherwise stated in this report, the existence of hazardous materials, which may or may not be present on the property, was not observed by the appraiser. The appraiser has no knowledge of the existence of such materials on or in the property. The appraiser, however, is not qualified to detect such substances. The presences of substances such as asbestos, urea formaldehyde foam insulation or other potentially hazardous materials may affect the value of the property. The value estimated is predicated on the assumption that there is no such material on or in the property that would cause a loss in value. No responsibility is assumed for any such conditions, or for any expertise or engineering knowledge required to discover them. The intended user is urged to retain an expert in this field, if desired.



12. The physical condition of the improvements, if any, described herein was based on visual inspection. No liability is assumed for the soundness of structural members, since no engineering tests were made of same.

13. Neither all nor any part of this appraisal report shall be disseminated to the general public using the appraiser’s name or appraisal designation, without prior written consent of the appraisers signing this appraisal report.

14. Authorization is not allowed for the out-of-context quoting from, or partial reprinting of, this appraisal report.

15. By reason of the report, there is no requirement to testify with reference to the property herein appraised, unless arrangements have been previously made.

16. To the best of my ability, the analysis, opinions, and conclusions were developed in this report was prepared in accordance with the standards and reporting requirements of FIRREA of 1989-XI and its updates, the office of the Comptroller of the Currency of the United States of America (OCC), the Federal Deposit Insurance Corporation (FDIC) and the Uniform Standards of Professional Appraisal Practice (USPAP) adopted by the Appraisal Standards Board of the Appraisal Foundation.

17. The reader should be advised that my employment was not contingent on the appraisal providing a minimum valuation, a specific calculation or the approval of a loan. Additionally, I have complied with the USPAP Competency Rule.

Limiting Conditions 1. The allocation of total value between land and improvements applies only under the

described utilization. The separate valuations for land and improvements must not be used in conjunction with any other appraisal and are invalid if so used.

2. The Americans with Disability Act (ADA) became effective January 26, 1992. The appraiser has not made a specific compliance survey and analysis of this property to determine whether or not it is in conformity with the various detailed requirements of the requirements of the ADA. It is possible that a compliance survey of the property and a detailed analysis of the requirements of the ADA could reveal that the property is not in compliance with one or more of the act. If so, this fact could have a negative impact upon the value of the property. Since the appraiser has no direct evidence relating to this issue, possible noncompliance with the requirements of ADA was not considered in estimating the value of the property.



3. In addition extraordinary assumptions and hypothetical conditions are considered: The value conclusions are subject to the following extraordinary assumptions that may

affect the assignment results. An extraordinary assumption is uncertain information accepted as fact. If the assumption is found to be false as of the effective date of the appraisal, the right to modify value conclusions is reserved.




Introduction Example Industrial Condominium, 1000 NW 2nd Avenue #10, Doral, FL

INTRODUCTION







MAPS, DIAGRAMS AND PHOTOGRAPHS

MIAMI-DADE COUNTY MAP

N



LOCAL AREA MAP

N



PARCEL MAP

N

Condominium Site SUBJECT BAY

SUBJECT BAY Condominium Site



AERIAL PHOTOGRAPH

Condominium Site

SUBJECT BAY



FLOOR PLAN (OWNER’S EMERGENCY DIAGRAM)

N



SUBJECT PHOTOGRAPHS

Subject front Subject frontage curb cut

Subject loading door (office expansion into

low-dock area) Subject loading – recessed dock



Subject front parking area Front parking area with truck in place for loading

Office ADA ramp Office entrance from parking area

Ground floor front lobby Receptionist booth



Typical office corridor Office showroom

Kitchenette ADA restrooms

Ground floor administrative area Ground floor glass-wall office buildout



Front stairwell to second floor (partially

expanded into warehouse) Rear stairwell to second floor (circular staircase to mezzanine with forklift access

Second floor front office (semi-circular area) Typical second floor office area

Typical second floor office area Mezzanine (back of second floor office area)



Second floor position in warehouse and

forklift loading position Mezzanine forklift access door

Warehouse loading area – recessed dock on

left and office area expansion over front-dock and overhead

Truck backing into parking lot for delivery

South on NW 102nd Avenue North on SW 102nd Avenue



PURPOSE OF THE APPRAISAL REPORT

This report was prepared for the purposes of estimating the As Is market value of the fee simple interest as of January 17, 2014. Terms are defined below.

CLIENT, INTENDED USER AND USE OF THE APPRAISAL REPORT

The intended user of this appraisal is Example Bank. Example Bank affiliates are also intended users of this report. Their intended use of this appraisal is for mortgage underwriting. No additional intended users are identified or intended by the appraiser.

DEFINITIONS

Definition of Market Value Market Value is a major focus of most real estate assignments. Both economic and legal definitions of market value have been developed and refined. A current economic definition agreed upon by federal financial institutions in the United States of America is: 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 own

best interest 3. A reasonable time is allowed for exposure to the open market 4. Payment is made in terms of cash in U.S. dollars or in terms of financial arrangements

comparable thereto; and 5. Price represents a normal consideration for the property sold unaffected by special or

creative financing or sales concessions granted by anyone associated with the sale. The above definition is suggested by FIRREA of 1989- Title XI and its updates, the Uniform Standards of Professional Appraisal Practice (USPAP), the Appraisal Institute and the Federal Deposit Insurance Corporation, and was the basis of the valuation in this appraisal. Source: Code of Federal Regulations: Title 12; - Bank and Banking Chapter I – Comptroller of the

Currency, Department of the Treasury; Part 34 – Real Estate Lending and Appraisals – Subpart C – Appraisals, Section 34.42 Definitions; Revised as of January 1, 2000

"Market Value as-is" is an estimate of market value of the property in the condition observed upon inspection and as it physically and legally exists as of the date the appraisal is prepared. Most financial institutions will not accept hypothetical conditions, assumptions or qualifications in this value estimate.



Definition of Estate Interests The value estimated is for the fee simple estate. Types of ownership estates are defined as follows.

Fee Simple Interest: an absolute fee without limitations to any particular class of heirs, but subject to the limitations of eminent domain, escheat, police power and taxation. Fee Simple is an inheritable estate. Leased Fee Interest is a freehold (ownership interest) where the possessory interest has been granted to another party by the creation of a contractual landlord-tenant relationship (i.e., a lease).

SCOPE OF WORK

This is a Restricted-Use Report as defined by Uniform Standards of Professional Appraisal Practice under Standards Rule 2-2(C). This format provides for only basic property identification, appraisal statements and value conclusion(s). It may not be understood by readers who are unfamiliar with the property or our engagement contract, and must not be distributed to others without strong warnings that there are many issues that were considered and analyzed but not conveyed within this report. The differences between Restricted-Use, Summary and Self-Contained appraisals are only in reporting detail; each relies upon the same scope of work and results in the same conclusion of value. This report was prepared for the purposes of estimating the As Is market value of the fee simple interest as of January 17, 2014. The approaches used herein are considered sufficient to develop credible assignment results in solving the appraisal problem. For each assignment, all typical approaches to value are considered. These approaches to value are the cost approach, the sales comparison approach and the income capitalization approach. Also considered is the discounted sellout analysis which is a combination of the income capitalization approach and sales comparison approach. Depending on the property being appraised not all approaches may be applicable. For all appraisals, the following approaches are considered: cost approach, income capitalization approach, sales comparison approach and discounted sellout analysis. All appraisals begin by identifying the appraisal problem. Data on the subject property is derived from various sources including but not limited to the property owner, the county property appraiser’s office, surveys and building plans. When possible, more than one source is utilized to confirm data. Within the appraisal the data source is acknowledged. Should plans or a building sketch be available, the measurements are confirmed for accuracy. Land size is based on surveys (when available), public records and recorded plats. Land measurements are not performed. Description of the improvements is based on visual inspection and/or plans. The age of the building is based on public records. Appraisers are not structural engineers and therefore cannot attest to the soundness of a structure. Noticeable potential problems such as stress cracks and water damages are noted, if evident. Additionally, land and improvement measurements are confirmed to a reasonable degree, but square footage is an estimate and ideally is based on surveys and building diagrams when provided. The rent roll is often considered the best measurement for leased assets, but is by no means always accurate.



Comparable improved sales and rentals were inspected from the exterior with interior inspections when possible. All vacant land sales are inspected. Sale prices are from public records or verified with parties to the transaction, i.e. buyer, seller, real estate agent, or closing attorney. Public records are investigated for mortgage information and terms. Research of comparables included, but was not limited to, using the following data sources:

CoStar LoopNet Regional MLS (MLXchange) National Multiple Listing Service Marshall and Swift Commercial Cost Estimator CoreLogic RealQuest Moody’s Analytics Précis Metro (Miami, Fort Lauderdale & West Palm MSAs) RealtyRates.com PwC Real Estate Investor Survey Newspaper clippings

Real estate agents in the subject area are interviewed to supply up-to-date information and observations. All information is analyzed in processing the appraisal reports and as support for the estimated value. The scope of work for this assignment has been described above and is to be typical for an assignment of the nature of the subject appraisal problem.


Description & Analysis Example Industrial Condominium, 1000 NW 2nd Avenue #10, Doral, FL

DESCRIPTION & ANALYSIS







IDENTIFICATION AND HISTORY OF THE SUBJECT PROPERTY

Location and Address Property Name: Example Industrial Condominium Location: 1000 NW 2nd Avenue #10

Incorporated City of Doral, FL Miami-Dade County

Parcel Number(s): 00-0000-000-0000 Orientation: The subject property is located in the Miami Airport West Industrial District

one site north of NW 101st Street on the west side of NW 2nd Avenue. MSA: Miami - Fort Lauderdale - Pompano Beach

Legal Description According to the Miami-Dade County Property Appraiser the exact legal description of the property per CoreLogic RealQuest is in addenda.

Owner of Record The Miami-Dade County Property Appraiser shows the following as the current property owner per CoreLogic RealQuest:

ABC Properties, LLC 123 Some Place

Orlando, FL 00000



History of the Subject Property

Occupancy Profile

The property is owner occupied for distribution of miscellaneous merchandise. According to the owner, “The property is being utilized mostly as a hub currently. Rather than storing inventory for later distribution, the product pretty much arrives and is sent out again very quickly. In many cases, the product has been sold while still in transit to the property. The owner continues to occupy that property and will continue to do so.”

Last Market Sale and Listing History

The following table compares the historical market activity to the appraisal conclusion. According to the owner the property was purchased in distress after a lengthy listing period and eventually sold at a discount. They have done no significant work following the purchase. The price appears to have been below market value.

Condition ORB Buyer/Broker Date Price $/Sqft

Last Market Sale ORB 00000-0000 ABC Properties, LLC 8/1/2012 $600,000 $95.66

1/17/2014 $720,000 $114.80

Appraisal Conclusions

As Is Market Value To the best of my knowledge there have been no other sales in the last five years and the property is not for sale or under contract.



SITE DATA

The following analysis is based on the condominium site, which is owned in common with other property owners. It is provided for informational purposes.

Est.Shape Use Units Built Zoning GLA Sq.Ft. Acres

Example Industrial Condominium

Rectangular Industrial 8 1995 IC 22,000 129,950 2.98

Gross

Location: 2200 NW 102nd Avenue

Incorporated City of Doral, FL 33172-2225 Miami-Dade County The property is located one site north of NW 101st Street on the west side of NW 2nd Avenue in the Miami Airport West Industrial District.

Frontage & Access: The site is not a corner lot and is not signaled. It has direct access with adequate frontage. Truck-loading access is sufficient for trailer-access. The property does not have active rail access.

Commercial Exposure: Traffic levels and the value of commercial exposure are nominal. Topography: Level at street grade.

Adjacent Uses Compatible single or multi-tenant office warehouses with a local or corporate profile.

Functional Adequacy: The subject site conforms well to others throughout the district with average overall functionality and conforming relationship to adjoining properties.



ZONING

Zoning Code IC, Industrial Commercial by Doral, Florida. Permitted Uses Light industrial and some commercial including wholesale,

office, civic and government uses Conformity to Code The current use is a legal, conforming use. Zoning Change Likely Unlikely.

FLOOD ZONE

According to FEMA Map Number 120041 - 0286L (FEMA Map dated September 11, 2009) the subject is located in an area mapped by the Federal Emergency Management Agency (FEMA). The subject is located in FEMA flood zone AH, which represents high risk, and mandatory flood insurance purchase requirements apply. According to FEMA, these are areas with a 1% annual chance of shallow flooding, usually in the form of a pond, with an average depth ranging from 1 to 3 feet. These areas have a 26% chance of flooding over the life of a 30-year mortgage. Base flood elevations derived from detailed analyses are shown at selected intervals within these zones. For insurance purposes, a surveyor should be contacted to verify the exact zone by a flood elevation certificate, as well as its impact on insurance. A copy of the flood zone map provided by CoreLogic RealQuest is in addenda. Source: CoreLogic RealQuest Professional, FEMA Map Service Center (”FEMA Flood Zone Designations”). The following map/report was produced using multiple sources. It is provided for informational purposes only. This map/report should not be relied upon by any third parties. It is not intended to satisfy any regulatory guidelines and should not be used for this or any other purpose.



MIAMI-DADE COUNTY 2013 REAL ESTATE ASSESSMENT AND TAXES

Adjusted Total RoundedAd

ValoremParcel Number Address Sqft Assessment Tax Rate Tax Total00-0000-000-0000 1000 NW 2nd

Avenue #105,555 $530,850 1.865% $9,900 $9,900

4% ($396)$9,504$9,500

Early Payment DiscountEarly Payment Tax Expense

Rounded

Note: The “Adjusted SqFt” is the size per the Miami-Dade Property Appraiser’s records.

Current 2013 Taxes: None

Past Due Taxes2012 Paid2011 Paid2010 Paid

Total Past Due None

Total Taxes Due None



Based on the indicated value as a result of the sales comparison approach the subject property’s real estate assessment is regarded as reasonable, and should not be appealed. However, investors realize that real estate may be reassessed upon completion of construction, substantial remodeling or sale. Based on a weighting of the actual assessment and the average of the recent purchase price and market value indicated by sales comparison, the following property taxes would be considered reasonable within the income capitalization approach.

AdjustedAmount $/Sqft

Current AssessmentTotal Assessed Value $530,850 $95.56

Property taxes including non ad valorem taxs $9,900 $1.78Overall tax rate including non advalorem taxes 1.86%

Current Tax Net the 4% Early Pay Discount $9,504 $1.71Rounded $9,500 $1.71

Estimated Reassessment Value

Market Sources of Value EstimatesSales Comparison Approach $720,000 $129.61Prior Sale 8/12 $600,000 $108.01

Reconciled Basis for Reassessment Value $660,000 $118.81Assessment Ratio x 85%Indicated Re-Assessment Value $561,000 $100.99

Estimated Reassessed Property Taxes

50% Weighting to the Actual Assessed Value $265,42550% Weighting to the Ressessed Value 280,500Total (Adjusted Reassessment Value) $545,925 $98.28

Current Tax Rate x 1.8649%Gross Adjusted Taxes $10,181 $1.83

Less: 4% Early-Payment Discount (407)Tax Projection Assuming Reassessment $9,774 $1.76

Rounded $9,800 $1.76

Reconciled Forecast Year-1 Property Tax $9,800 $1.76Reconciled Forecast Per Square Foot of GLA $1.56



DESCRIPTION OF THE BUILDING IMPROVEMENTS

The improvements were inspected on January 17, 2014. The public records, listing services and other sources of building information were also examined. Building diagrams plans showing measurements and interior area dimensions were requested but not provided. The appraiser measured the facility. The improvements consist of an office warehouse condominium of 6,272 square feet, built in 1995 of good quality and currently in good condition. Owner occupancy is 100%, and the owner uses the facility as a rapid-turnover distribution hub. At the time of inspection it was inactive (between shipments) but according to the owner it remains owner occupied. Property Name: Example Industrial Condominium Property Use: Industrial Competitive Class: B Year Built: 1995 Last Renovations: 2012 Proposed Changes: None Personalty: None Adjusted Area 5,555 square feet (per the Miami-Dade County Property Appraiser) Gross Leasable Area 6,272 square feet

BUILDING IMPROVEMENTS

Ground Second Total

Office 1,978 1,633 3,611 58%Warehouse 2,316 2,316Included Mezzanine 345 345

Total Gross Leasable Area 4,294 1,978 6,272

Excluded Mezzanine 0 Land-to-Building Ratio: 5.91:1.0



Floors 2 floors of office Foundation: Reinforced concrete footings Subfloors: Assumed to be concrete Exterior Walls: CBS Roof Construction: Concrete Twin-T assemblies Roof Cover: Tar and gravel Power: Standard commercial power. Plumbing: Adequate commercial plumbing. Utility Metering: Each unit is separately metered for utilities. Pedestrian Access: Plate glass Elevator: None Windows: Plate glass Lounge/Kitchenette: Yes Security: Proprietary



Interior Finishing Office Warehouse Included Mezzanine

Size: 3,611 SqFt (58% of GLA)

2,316 SqFt 345 SqFt

Demising: Good demising for a variety of corporate uses.

None Non-load bearing with metal circular stairway and fork lift gate open to the warehouse.

Restrooms: Good quality ADA None None

Sprinklers: None None None

Air Conditioning: Package HVAC None None

Flooring: Mixed carpet, resilient tile and ceramic tile.

Concrete Wood

Walls: Drywall CBS Open to the warehouse.

Ceilings: Acoustic panels Exposed Exposed

Dominant Lighting: Fluorescent and incandescent

HID None

Overall Condition: Good Good Good

Other Equipment: None None None

Functional Utility: Suitable for Class A/B corporate or regional headquarters.

L-shaped around the office area.

Good rectangular

Other Mezzanine Area: None Grade Level Doors: 0 Warehouse Clear Height: 24' Dock Height Positions: 2 Column Spacing: Adequate/average Rail Loading: 0 Average Depth: Adequate/average Loading Configuration: Front loading shared with the employee parking lot. The subject bay

has a single overhead door with a tailgate dock and a recessed dock height door for trailer loading.

Other Equipment: None



Overall Ratings Quality: Good Condition: Good General Compatibility: Good compared to surrounding land uses. Capital Improvements: According to management there are no significant capital

improvements necessary. Deferred Maintenance: Based on discussions with management and a visual inspection

there are no significant deferred maintenance issues. Design/Functional Utility: Average Appeal/Appearance: Average Effective Age: 19 years Remaining Useful Life: 31 years

Americans with Disabilities Act Please reference the General Assumptions and Limiting Conditions section of this report.

Hazardous Substances Please reference the General Assumptions and Limiting Conditions section of this report.

Description of the Site Improvements Site Improvements: Condominium site improvements consist of one curb cut for every

two units, concrete walks, lighting, conforming hardscape and landscaping, and open asphalt paved parking.

Parking Spaces: 64 Parking Ratio: 1.50:1,000 SqFt approximately considering expanded office

square footage on several bays.



NEIGHBORHOOD DESCRIPTION

The subject is located in the incorporated City of Doral in Miami-Dade County, Florida. Specifically, it is located one site north of NW 101st Street on the west side of NW 2nd Avenue. According to CoStar, this area is part of the Miami Airport West Industrial District. The subject’s competitive boundaries extend throughout the County, but the neighborhood is generally delineated south Doral.

Access and Linkages Most of the southern portion of Doral is considered a favorable corporate environment with good Dolphin Expressway access to west Miami-Dade’s dense controlled access highway network, Miami International Airport, local rail hubs, and Downtown Miami 10 miles east.

Demand Generators The dominant industrial demand catalysts for the local area are central location with easy controlled access highway proximity to Miami-Dade employment, cargo, industrial and consumer markets, environment appropriate for corporate occupants, good industrial land use infrastructure and a good array of owner/executive, management and workforce housing.



SUPPLY AND DEMAND

The following analysis was obtained from CoStar, which closely monitors leasing conditions in the Southeast Florida market by surveying property managers and acting as a listing service for owners and brokers. As a result of their coverage, they are regarded as the most credible source of commercial real estate market and submarket information. The subject is located in the Miami Airport West Industrial District and for purposes of comparison is classified by CoStar as a Warehouse. The following statistics illustrate Doral’s above average and improving occupancy rates, and increasing asking rates.



LoopNet suggests that the asking rent and price trends have been increasing over the last year but also suggest a correction occurring, most likely because of a greater number of listings resulting from an increase in market activity and pent-up demand. It is still too early to determine whether this is a trend.



OUTLOOK FORECAST AND CONCLUSIONS OF MARKET ANALYSIS

Overall market conditions are stabilizing after several years of decline, yet there is no consensus among market participants over when leasing fundamentals will begin to improve with reliability. The subject property profile compares favorably to competing properties in the same general area, and will lease relatively similar to comparable availabilities because of its unique attributes. Based on the market summary above, investors would regard a general vacancy factor in the 4.0% range reasonable under current market conditions. For purposes of the income capitalization approach 4.0% is used. Adding 1.0% credit loss results in a total vacancy and credit loss factor of 5.0%. Sales trends suggest upward pressure on prices from an absence of supply with increasing demand. This is clear from discussions with brokers throughout the region and from commercial research services discussed above. The future is clouded by the REO pipeline and latent supply of owners that wish to sell but are reluctant at current prices. At the same time low prices are the only compelling purchase-justification for many buyers.



HIGHEST AND BEST USE

The site is valued for its highest and best use which may be defined as, “The reasonable and probable use that supports the highest present value of vacant land or improved property, as of the effective date of the appraisal.” The highest and best use as though vacant is largely academic since the subject is a condominium with shared land and common elements with multiple owners. Therefore, the as-vacant analysis is largely informational.

As Vacant

The most likely use of the site as though vacant would be to hold for future development of an industrial land use when warranted by demand. Therefore, it is concluded to be the highest and best use of the property as though vacant.

As Improved

An industrial use as improved represents a reasonable land use for the subject property. The subject improvements consist of an internal office-warehouse bay in the Doral Warehouse industrial condominium, which is consistent with the highest and best use of the site as though it were vacant.



REASONABLE EXPOSURE TIME & MOST LIKELY BUYER

Exposure Time It is estimated that a reasonable exposure time, based upon the subject’s location, size and design, would be less than 9 months. This considers that the property would have been properly marketed and priced. If the property were not to have been priced correctly or marketed through proper channels, then it is not likely that the estimated market value and the estimated reasonable exposure time would have been achieved. LoopNet suggests the following trend supporting the estimate.

Typical Purchaser of the Subject The subject is an internal office-warehouse bay in the Doral Warehouse industrial condominium. It is believed that the typical purchaser of the subject would be an owner-user. The property does not reflect investment-grade attributes and therefore would not be of interest to institutional investors.


Valuation Example Industrial Condominium, 1000 NW 2nd Avenue #10, Doral, FL

VALUATION






Appraisal Process Example Industrial Condominium, Doral, FL

APPRAISAL PROCESS

An analysis of three separate approaches to value, sales comparison approach, cost approach, and income capitalization approach will be considered to estimate the value of the subject property. Although these three approaches to value are considered within every appraisal report, they may not be applicable to each and every property being appraised. The cost approach is based on the principle of substitution which states that an informed purchaser would not pay more for a property than the cost of reproducing a property with the same utility. The cost approach can often yield reliable estimates of value for new construction. This approach entails estimating the cost of producing the improvements, deducting an estimate of depreciation, and then adding the value of the site as though vacant. To this value an entrepreneurial incentive is added to arrive at the estimated value by the cost approach.

• The cost approach is not relevant to this appraisal assignment because the property is a condominium unit and the market does not recognize replacement cost as a meaningful indicator of value. Allocation of common elements, depreciation and land cannot be accomplished with credibility.

The income capitalization approach is based on the concept that value is created by the expectations of future benefits and higher earnings should result in higher values. Income producing real estate is purchased for the right to receive future income. The income capitalization approach consists of methods to analyze a property's capacity to generate income, and a reversion, and convert these monetary benefits into an estimate of value.

• The subject is 100% owner occupied and is considered primarily an owner-user profile property. Owner-user properties tend to trade above values that can be justified by leased asset investors because leased asset investors underwrite vacancy and collection loss and management while owner-users do not. Additionally, owner-users tend to perceive other operating expenses and equity-investment rates of return on real estate as costs of their primary business.

• Although market participants would rarely consider the income capitalization approach relevant, some lenders and investors require the information for risk analysis purposes.

The sales comparison approach is based on the principle of substitution which suggests that, within competitive markets, similar products will realize similar prices. Inherent in this concept is the premise that a purchaser would not pay more for a property than the cost to acquire another property with the same amenities and utility.

• Market participants consider sales comparison a primary approach for the subject property profile.

The final steps in the appraisal process are review and reconciliation of the data and conclusions. In reaching a final conclusion of value, the entire process involving the approaches that were estimated must be reviewed for accuracy, completeness and consistency. After analysis, evaluation and reconciliation of the indications a value is estimated. The essence of this final reconciliation should be a defensible and rational conclusion of value.


Income Capitalization Approach Example Industrial Condominium, Doral, FL

INCOME CAPITALIZATION APPROACH

As noted in the Valuation Methodology discussion, market participants rarely consider the income capitalization approach credible for the subject property profile but it is used by some lenders and investors for risk analysis. As a result of the subject property’s occupancy and leasing profile the income capitalization method is appropriate in the scope of this assignment. The analysis is academic for the subject property because the market would not recognize the income capitalization approach as credible. As a result, unless encumbered by a long term lease that is above or below market, the method would require only direct capitalization without regard for lease-up costs (expenses including concessions and commissions) or absorption. Market participants would simply capitalize net operating income.

LEASED STATUS OF THE SUBJECT PROPERTY

The subject property is not leased and there has been no recent leasing activity.

MARKET RENTAL ANALYSIS

Selection of Rent Comparables The process of selecting the most applicable rent comparables and applying a market-based analysis is a complicated process. The market for the subject property profile is complicated by high office buildout of good quality and owner-user profile. Ideal comparables are unavailable because of the unique attributes of the subject property and overall market conditions resulting in low turnover of the most comparable properties, very proprietary information that is not shared within the market, and complex terms that market participants do not often share. Market rents are analyzed on an equivalent total occupancy cost to compare to the subject property profile. That is to say, expense reimbursements are added to the base market rent, unless they are not paid at the subject property as well. For example, utilities paid directly by the tenant and janitorial are often excluded.



Industrial Market Rental Analysis A survey was made of rental rates from comparable properties. The rentals recited below are considered most comparable to the subject.

% Face TotalNo. Property Location Bldg Parking Built Office Clear Loading Rate + Exp. = RentA Doral Warehouse

Condominium1000 NW 2nd Avenue #5

6,200 1.50 1995 10% 24' Both $9.75 $0.00 $9.75

B Doral Warehouse Condominium

1000 NW 2nd Avenue #7

6,900 1.50 1995 43% 24' Both $11.30 $0.00 $11.30

C Doral West Industrial Park

10000 NW 40th Dr., Doral

6,553 1.37 2000 18% 24' 1 DH $11.50 $0.00 $11.50

D Freestanding Office Warehouse

1000-1100 NW 55th Circle, Doral

7,693 1.31 1994 47% 24' Both $11.50 $0.00 $11.50

Subject 1000 NW 2nd Avenue #10, Doral

6,272 1.50 1995 58% 24' Dock

INDUSTRIAL COMPARABLES MAP



INDUSTRIAL RENT COMPARABLE PHOTOS

Rental A: Doral Warehouse Condominium 1000 NW 2nd Avenue #5

Rental B: Doral Warehouse Condominium 1000 NW 2nd Avenue #7

Rental C: Doral West Industrial Park

10000 NW 40th Dr., Doral Rental D: Freestanding Office Warehouse

1000-1100 NW 55th Circle, Doral



Conclusion of Industrial Market Rent

The following summarizes asking and market terms for industrial space at comparables as well as at the subject property. Rates are analyzed in context of the best available estimate of expense reimbursements to arrive at an equivalent base rent.

Base Tenant TotalNo. Comparison Rent Exp. Rent

A Same complex, smaller office $9.75 + $0.00 = $9.75B Same complex, larger office $11.30 + $0.00 = $11.30C Slightly newer & better facility $11.50 + $0.00 = $11.50D Freestanding building, superior $11.50 + $0.00 = $11.50

Mimimum $9.75Average $11.01Median $11.40Maximum $11.50

$11.2510% (1.13)

0.00$10.25

CPI

Less: Negotiating Margin/ConcessionsLess: Forecast Expense Reimbursements

Indicated Rounded Market Rental Rate

Expense reimbursement termsLease term (months)Annual increases

Industrial Gross (IG)24 Mo.

Indicated Total Asking Market Rental Rate

VACANCY AND COLLECTION LOSS

Based on the subject property tenant amenities, current vacancy in the market, and perceptions of future market vacancy, typical investors would consider a vacancy and credit loss of 5.0% percent reasonable. The estimated stabilized vacancy rate is 4.0% percent and, based on the general tenant profile creditworthiness, a credit loss of 1.0% percent is added. The total vacancy and credit loss for analytical purposes is therefore 5.0% percent.



PROJECTED STABILIZED EFFECTIVE GROSS INCOME

Potential Gross Revenue Annual $/Sqft

Base Rent 6,272 SF x = $64,288 $10.25Expense Reimbursement Revenue 0 0.00

$64,288 $10.25

Vacancy & Collection Loss 5.0% (3,214) (0.51)Effective Gross Income $61,074 $9.74

Total Potential Gross Revenue

$10.25/SF

OPERATING EXPENSE ANALYSIS

Conclusion of Expense Estimates Operating expenses are generally based on property performance. Real Estate Tax Real estate taxes are based on the tax section of this report. Association Fee The association fee was provided by the owner. Management Third party management is nominal for properties of the subject’s profile, and

often not budgeted because they are usually self-managed. However, if management is not included in the proforma an investor would increase the capitalization rate.

Administrative Administrative costs are limited to professional services such as tax preparation.

Maintenance Tenants typically maintain interiors, including janitorial. Landlords typically maintain exteriors and interior equipment.

Utilities Tenants pay all utilities. Vacancy-term utilities are reflected in capitalization rate assumptions.

Reserves Reserves are budgeted for long-lived interior items. Common building element capital expenses are part of the association fee.



PROFORMA OPERATING STATEMENT

Potential Gross Revenue Annual $/Sqft

Base Rent 6,272 SF x = $64,288 $10.25Expense Reimbursement Revenue 0 0.00

$64,288 $10.25

Vacancy & Collection Loss 5.0% (3,214) (0.51)Effective Gross Income $61,074 $9.74

Operating ExpensesReal Estate Tax $9,800 $1.56Association Fee 1,500 0.24Management 5.0% 3,054 0.49Administrative 1,500 0.24Maintenance 1,568 0.25Utilities 0 0.00Reserves 941 0.15

Total Operating Expenses 30.1% ($18,362) ($2.93)

$42,711 $6.81

Total Potential Gross Revenue

$10.25/SF

Net Operating Income



DISCUSSION OF THE OVERALL CAPITALIZATION RATE

Three methods will be used to estimate the overall capitalization rate; debt coverage ratio (DCR), band-of-investment and market transactions. Overall capitalization rates may be derived from comparable sales, effective gross income multipliers and net income ratios, band-of-investment or weighted average techniques (based on mortgage and equity components with RM and RE or land and building components with RL and RE), debt coverage ratios (DCRs) and yield capitalization techniques.

Lending Parameter Survey The following national survey above provides low, high and average range for lending parameters that most closely resemble the subject property profile. The national survey provides an overview of general conditions and capitalization rate ranges. The subject property capitalization rate would most likely be in the lower limits of the range because of its owner-user profile, age and prominent location.



Conclusion of Current Lending Parameters

The property is 100% owner occupied and is considered an owner-user product. As a result, the equity capitalization rate would be at the low end of the range or even something less because owner users typically regard real estate as a cost of doing business rather than an investment hurtle rate. Owner-users are more concerned with a long term place to do business, control of expenses, paydown of debt, pride of ownership and possible future appreciation. An equity capitalization rate of 3.00% was utilized. Based on the surveys and analysis above, the following parameters are used to estimate an overall rate by DCR and Band of Investment methods.

4.90%30 Years75%1.400.063693.00%

Mortgage Interest Rate (I)Mortgage Term (monthly)Loan-to-Value Ratio (LTV)Debt Coverage Ratio (DCR)

Equity Capitalization Rate (RE)Mortgage Constant (RM)

Estimates of an Overall Capitalization Rate Three methods will be used to estimate the overall capitalization rate; debt coverage ratio (DCR), band-of-investment and market transactions. These methods are discussed below.

Capitalization Rate Based on Lending Parameters

Calculations:

Debt Coverage x Mortgage x Mortgage = OverallRatio (I) Constant Capitalization Rate1.4 75% 0.06369 6.69%

6.50%

Calculations:

Capital x Ratio x Rate = Weighted RateMortgage (VM) 75% 0.06369 0.04777Equity (VE) 25% 0.03000 0.00750

0.05527

5.50%Rounded to

Overall Capitalization Rate by Debt Coverage Ratio

Rounded to

Overall Capitalization Rate by Band of Investment

Overall Capitalization Rate (RO)



Overall Capitalization Rate by Market Participant Surveys and Transactions

Market Participant Survey

Under current market conditions, local market participants are not good sources for capitalization rate estimates.

• As discussed, the subject property is an end-user profile property, and capitalization rates are not often used to underwrite prices. Institutional investors typically buy a combination of property and tenant, so that their rates will not be directly comparable.

• Market capitalization rates are not well defined because low sales volume, distress or low-occupancy conditions and unreported capitalization rates have resulted in inefficient market information.

• Broker calculations often vary, some dropping management for single-user properties assuming landlords will self-manage. They also rarely budget reserves or administrative costs.

National Investor Surveys

Investor surveys such as Moody’s PwC National Investor Survey or The RealtyRates Investor Survey are not relevant because they do not reflect credible survey-data for the subject property profile. Market Derived Rates

It is not surprising that comparables in the sales comparison approach are not based on capitalization rates. End-user purchases are not underwritten on the income capitalization approach.

Conclusion of Overall Capitalization Rate The surveys referenced on the prior page are for all types and qualities of properties. Based upon these surveys, an overall capitalization rate of 4.80% to 11.75% from the market has been correlated. The methods used to estimate the overall capitalization rate indicated the following.

6.50%5.50%4.80% to 11.75%8.50%

Reconciliation 6.00%

Comparable Range

Band of InvestmentMarket Transaction

Debt Coverage Ratio



DIRECT CAPITALIZATION

On the previous pages an overall capitalization rate was estimated. This rate is divided into the stabilized net operating income to indicate a value by the income capitalization approach.

Projected Net Operating Income $42,711

Divided by ÷ 6.00%

Indicated Value As Is $711,852Rounded as of January 17, 2014 $710,000Per Square Foot $113.20

Special Note: The subject property is 100% owner occupied and considered an owner-user product. Although this approach was performed in the subject property valuation, it is considered to be of little to no reliance to owner-user properties. These types of properties are typically purchased for the owner’s use for their business or practice, in all or part of a building while leasing out the remainder if designed as such to offset some costs. Considering the $42,711 projected net operating income and the value estimate herein, the overall capitalization rate implied by the appraised value conclusion of $720,000 is 5.93%. This is well below what would be typical, but an owner-user as stated does not have as their primary concern as a return on the real estate.

CONCLUSION OF VALUE BY THE INCOME CAPITALIZATION APPROACH

As a result of the subject property’s occupancy and leasing profile the income capitalization method is appropriate in the scope of this assignment.


Method 1/17/14

Direct Capitalization $710,000Per Square Foot $113.20

Discounted Cash Flow N/APer Square Foot N/A

Final Estimate $710,000Per Square Foot $113.20


Sales Comparison Approach Example Industrial Condominium, Doral, FL

SALES COMPARISON APPROACH

A sales comparison analysis was considered and was developed because it would be considered relevant by market participants.

The sales comparison approach is based on the principle of substitution. The principle of substitution holds that the value of a property tends to be set by the price that would be paid to acquire a substitute property of similar utility and desirability within a reasonable amount of time.1

In the sales comparison approach, an opinion of market value is developed by comparing properties similar to the subject property that have recently sold, are listed for sale, or are under contract (i.e., for which purchase offers and a deposit have been recently submitted). A major premise of the sales comparison approach is that an opinion of the market value of a property can be supported by studying the market’s reaction to comparable and competitive properties.

Qualitative analysis is a relative comparison process without mathematics. Sales are ranked based upon their desirability as compared to the subject. Comparisons can be expressed as plus or minus as opposed to dollar or percentage adjustments.

Quantitative analysis is the process of applying mathematical techniques. Sales are adjusted to the subject property on a dollar or a percentage basis. One method of supporting adjustments is through paired data analysis. This method analyzes two sales and attributes the difference in their sales prices to the characteristic which is different. This analysis requires an abundance of sales data which is frequently not available. However, assigning reasonable adjustments yields a credible value by bracketing the market value of the subject property.

In order to estimate a value for the subject property, quantitative analysis is used. This has been accomplished by ranking the sales with a plus or minus percentage adjustment. Characteristics of the sales considered superior to the subject are given a minus (-) percentage adjustments. Those characteristics of the sales considered inferior to the subject are given a plus (+) percentage adjustment. Each sale is given an overall percentage adjustment indicating how it compares to the subject, bracketing the market value range.

In the following table comparables marked “(*)” are given most weight in the final analysis.

1 The Appraisal of Real Estate 13th Addition, 2008, page 298-299



SELECTION OF COMPARABLES

The most compelling market demand characteristics for the subject property are its Doral corporate environment and high office buildout. These represent somewhat unique property attributes and as a result comparable sales are less frequent. The selection of comparables is therefore an attempt to bracket a reasonable value range considering the most likely buyer and each property characteristic – while all cannot be ideal alternatives each comparable has some relationship to the demand profile of the subject property.

IMPROVED SALES GRID

Comparables are selected for their location, occupancy profile, buyer motives and physical attributes including design, appeal and parking ratio. Following is an improved sales grid of the comparable properties used for comparison to the subject property.


Sales Comparison Approach Example Industrial Condominium, 1000 NW 2nd Avenue #10, Doral, FL 33172-2225

No. Conditions Net Pkg Ratio DOORS: $/SqFtMost Property Price of Sale Site SqFt Quality /1,000 SF Dock/Well Office HVAC Bldg.

Weight Location Date Financing Bay SqFt Condition Built Grade/Ramp Clear Court Occ%1 ABC Technology Warehouse $786,000 None Condo. Good 1.4 2 11% 11% $124.49* 10000 NW 1000th St. #10,

Doral12/13 Cash 6,314 Good 2004 1 24' Good 100%

2 JJ Freight Forwarding $975,000 REO Condo. Good 1.2 2 18% 18% $143.3810000 NW 202nd Ave #10, Doral

11/13 Cash 6,800 Good 1997 1 24' Good 100%

3 Black n Blue Images Studio $885,000 None Condo. Good 2.2 0 70% 70% $123.2622222 & 22224 NW 101st Avenue, Doral

8/13 Seller 7,180 Good 1989 2 20' Tight 100%

4 Freight Logistics Solutions $825,000 None Condo. Good 1.1 2 35% 35% $111.64* 10000-10002 NW 102nd Street,

Doral6/13 Cash 7,390 Good 1992 0 23' Parking 100%

5 Retread Systems $1,015,000 None Condo. Good 1.0 2 8% 8% $105.7322222 NW 107th Circle #23, Doral

6/13 Conv. 9,600 Good 2003 0 24' Good 100%

SUBJECT Condo. Good 1.5 2 58% 58%6,272 Good 1995 0 24' Tight

ABC Commercial broker Able Broker 305-000-0000 There has been no market activity since 2005.

DEF Commercial broker Baker Broker 305-000-0000 There has been no market sale activity in the last five years. The property was foreclosed in June 2009 and has been tenant-occupied.

GHI Commercial broker Charles Broker 305-000-0000 There has been no market activity in the last five years.

Newer construction with better parking and truck court but inferior interior buildout. Compensating locational factors.

Close to the subject but with superior front parking and rear loading court. Office buildout is smaller but without mezzanine.

Better office buildout and separate front parking, but very tight rear grade level only loading.

Very close with similar design and front parking/loading conditions, finished office mezzanine and good quality office buildout.

Newer construction with very tight front parking but good rear loading. Less central but good Turnpike ingress/egress.

JKL Commercial broker Delta Broker 305-000-0000 There has been no market activity in the last five years.

MNO Commercial broker Amy Broker 305-000-0000 There has been no market activity since 2005.



On a price per building area square foot basis, the unadjusted values of the comparable properties range from $105.73 to $143.38 with an average of $121.70 and median of $123.26 per building area square foot.

Bay $/SqFtPrice SqFt Built Office Clear Bldg

Minimum $786,000 6,314 1989 8% 20' $105.73Average $897,200 7,457 1997 28% 23' $121.70Median $885,000 7,180 1997 18% 24' $123.26Maximum $1,015,000 9,600 2004 70% 24' $143.38Subject 6,272 1995 58% 24'

COMPARABLES MAP



GrantorGranteeDocument No.Parcel Number(s)Verification:5-Year History

Price $786,000 Date 12/13 $/SqFt Bldg $124.49Conditions of Sale None Financing Cash $/SqFt Land N/AProperty Rights Fee Simple Buyer End-User Occ% 100%Expense Ratio N/A GIM N/A Cap Rate N/A

SITENet Land SqFt Condo. Acres N/A Zoning ITraffic Count N/A Profile

IMPROVEMENTSUnits N/A Avg SqFt N/ABldg Sq.Ft. 6,314 Quality Good Built 2004Land:Bldg N/A Condition Good Parking Ratio 1.40

Docks/Wells 2 Office 11%Ramps/Grade Lvl. 1 HVAC 11%Rail N/A Height 24'

ABC Technology Warehouse10000 NW 1000th St. #10, Doral

ABC Commercial broker Able Broker 305-000-0000

The property consists of a newer Class-A dock-height condominium in a corporate environment with a small but well appointed office and a 700 SqFt mezzanine (included in GLA). The front office entrances and parking are adequately separated from the deep rear court sufficient for intensive trailer traffic. Bays have three dock height doors, and one at this bay has a concrete ramp. The seller was the original buyer from the developer and had finished the office space with good quality materials and design. They placed it on the market in August 2013 with a contract within three months and closing a month later. The buyer is an end-user and paid cash.

INDUSTRIAL ATTRIBUTES:

N/A

000000-0000

There has been no market activity since 2005.

Example Buyer

00-0000-000-0000

Example Seller

Improved Sale Comparable 1




Price $975,000 Date 11/13 $/SqFt Bldg $143.38Conditions of Sale REO Financing Cash $/SqFt Land N/AProperty Rights Fee Simple Buyer End-User Occ% 100%Expense Ratio N/A GIM N/A Cap Rate N/A




JJ Freight Forwarding10000 NW 202nd Ave #10, Doral

DEF Commercial broker Baker Broker 305-000-0000

The property consists of a Class-A office-warehouse condominium bay in the Doral Warehouse Condominium development, which reflects good overall quality and curb appeal with adequately separated front office and parking, with a deep rear truck court. The bay has two dock height doors with a ramp installed at the third. Office buildout is described as average overall, but was expanded by a prior owner. The bay was foreclosed in June 2009 and leased (undisclosed terms). The original list price was $1.2M with slight fluctuations until it went pending in October 2013 (about 4.5 years later) with fast closing in November. The bank never took title, and according to the broker the property was never marketed as an REO. The buyer is an end-user and paid cash.


N/A

000000-0000

There has been no market sale activity in the last five years. The property was foreclosed in June 2009 and has been tenant-occupied.

Example Buyer

00-0000-000-0000

Example Seller





Price $885,000 Date 8/13 $/SqFt Bldg $123.26Conditions of Sale None Financing Seller $/SqFt Land N/AProperty Rights Fee Simple Buyer End-User Occ% 100%Expense Ratio N/A GIM N/A Cap Rate N/A




Black n Blue Images Studio22222 & 22224 NW 101st Avenue, Doral

GHI Commercial broker Charles Broker 305-000-0000

The property consists of two contiguous flex office-warehouse condominiums located in a central Doral district of mixed higher-end and corporate industrial properties. The development has large windowed two-story offices and parking in front with a relatively tight rear loading court sufficient only for commuter vehicles (no trailers). The bay was built out by the current long-term owner as a dot-com corporate headquarters and sound studio. The buyer is an end-user as well. The seller financed the purchase with a $398,250 mortgage at 5.25% interest, which is not inconsistent with market financing. The property was listed and sold within fifteen months beginning in October 2011 at $1.0M without price reductions.


000000-0000

There has been no market activity in the last five years.

Example Buyer

00-0000-000-0000

Example Seller


N/A




Price $825,000 Date 6/13 $/SqFt Bldg $111.64Conditions of Sale None Financing Cash $/SqFt Land N/AProperty Rights Fee Simple Buyer End-User Occ% 100%Expense Ratio N/A GIM N/A Cap Rate N/A

SITENet Land SqFt Condo. Acres N/A Zoning ICTraffic Count N/A Profile



JKL Commercial broker Delta Broker 305-000-0000

Freight Logistics Solutions10000-10002 NW 102nd Street, Doral

The property consists of a center-bay in a six-unit condominium designed with individual front parking and loading courts, two story offices including 2,000 SqFt on the mezzanine and recessed loading (both included in SqFt). Parking is comingled with loading, and may "squeeze" up to ten cars (eight spaces). According to the broker the office buildout was of good quality and the facility was well maintained. It was originally listed in July 2010 for $924,000 with steady reductions to $845,000 before it sold, a marketing term of 2.5 years. The buyer is an end-user and paid cash.


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There has been no market activity in the last five years.

Example Buyer

00-0000-000-0000

Example Seller


N/A




Price $1,015,000 Date 6/13 $/SqFt Bldg $105.73Conditions of Sale None Financing Conv. $/SqFt Land N/AProperty Rights Fee Simple Buyer End-User Occ% 100%Expense Ratio N/A GIM N/A Cap Rate N/A

SITENet Land SqFt Condo. Acres N/A Zoning ICTraffic Count N/A Profile



Retread Systems22222 NW 107th Circle #23, Doral

MNO Commercial broker Amy Broker 305-000-0000

The property consists of a center-bay in the Doral Industrial Park, a condominium development that includes two "commercial" flex buildings and two larger dock-height distribution buildings in the back. The bay has no commercial exposure, but is conveniently located just off of Florida's Turnpike without typical Doral congested access. However, the front parking court is very tight and bays have little identity so that "curb appeal" is lacking. The rear loading court is sufficient for intensive trailer activity. Interior buildout includes a small office and large 2,000 SqFt storage mezzanine (included in GLA). The property was listed originally for $1.2M or $6,900/month industrial gross beginning in December 2010. There were no price reductions and the marketing term was 2.5 years.


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There has been no market activity since 2005.

Example Buyer

00-0000-000-0000

Example Seller


N/A



ADJUSTMENT GRID

On the previous pages, characteristics of the sales were compared to the subject. Percentage adjustments were utilized. In order to utilize percentage adjustments it is necessary to pair (compare) sales to extract value differences. This is difficult as there is normally insufficient data to provide pairings for all value differences. However, at the client’s request, percentage adjustments were used. Below is a grid which illustrates necessary adjustments based upon the comments on preceding pages. A plus (+) sign indicates the price per square foot of the sale must be adjusted upward as that characteristic is inferior to the subject. A minus (-) sign indicates the price per square foot of the sale must be adjusted downward since the characteristic is superior to the subject. The sales data was not sufficient enough to pair for determining percentage adjustments. Percentage adjustments are very subjective without the availability of paired sales. However, applying judgment it is possible to apply reasonable adjustments to bracket a reasonable value range and arrive at a credible conclusion of value. In the following table comparables marked “(*)” are given most weight in the final analysis.


Sales Comparison Approach Example Industrial Condominium, 1000 NW 2nd Avenue #10, Doral, FL

No. Land:Bldg, Adj.Most $/SqFt Age & Loading & HVAC & Clear $/SqFt Overall

Weight Date Subtotal Location Size Quality Condition Parking Office HeightOther

Net Adj. Gross Adj.

6,272 Good 1995/Good Average 58%/58% 24'

6,314 Good 2004/Good Separated/Good 11%/11% 24' -$12.45 Superior1 $124.49 Fee Simple None $124.49 Similar Similar Similar Superior Superior Inferior Similar Similar $112.04* 12/13 Cash Similar 0.0% -10.0% -10.0% 10.0% -10% 30%

6,800 Good 1997/Good Separated/Good 18%/18% 24' $0.00 Similar2 $143.38 Fee Simple REO $143.38 Similar Similar Similar Similar Superior Inferior Similar Similar $143.38

11/13 Cash Similar 0.0% -10.0% 10.0% 0% 20%

7,180 Good 1989/Good Tight GL Rear 70%/70% 20' $0.00 Similar3 $123.26 Fee Simple None $123.26 Similar Similar Similar Similar Similar Superior Inferior Similar $123.26

8/13 Seller Similar 0.0% -5.0% 5.0% 0% 10%

7,390 Good 1992/Good Identical 35%/35% 23' $5.58 Inferior4 $111.64 Fee Simple None $111.64 Similar Similar Similar Similar Similar Inferior Similar Similar $117.22* 6/13 Cash Similar 0.0% 5.0% 5% 5%

9,600 Good 2003/Good Tight Front Pkg 8%/8% 24' $5.29 Inferior5 $105.73 Fee Simple None $105.73 Inferior Similar Similar Superior Similar Inferior Similar Similar $111.02

6/13 Conv. Similar 0.0% 5.0% -10.0% 10.0% 5% 25%

ABC Technology Warehouse

JJ Freight Forwarding

SUBJECT PROPERTY

Black n Blue Images Studio

Freight Logistics Solutions

Retread Systems

Property Conditions of Sale Rights

Financing Mkt. Conditions

Economic Adjustments (Cumulative) Property Characteristic Adjustments (Additive)

(*)Most Weight is given to these comparables.



Comparable Sale Adjustments Following is the discussion and comparison of various characteristics of the sales as compared to the subject property. Property Rights Sales involved fee simple interests. Adjustments are not warranted. Financing Comparable three was seller-financed but the known interest rate

was within market parameters and no unusual conditions of sale affecting the price were reported, so it is assumed that they were cash equivalent.

Conditions of Sale Comparable two was an REO, although the property had been listed for some time and since the property was occupied the bank waited for market conditions to improve before accepting an offer. An adjustment in this case is unwarranted.

Market Conditions (Time) This adjustment considers current market conditions as compared to market conditions in place at the time of the respective sale. The market has remained static during the comparable sale-era and adjustments are not justified.

Location All comparables are generally similar in location. However, comparable five is more distant from central Doral and, although it has convenient Turnpike access, is located on an inferior corridor justifying an adjustment of 5.0%.

Size The subject consists of 6,272 square feet of gross leasable area. The inverse size adjustment is based on the principle of economies of scale whereby larger properties tend to sell for less per square foot. All comparables are generally of similar marketable size.

Quality Comparables are of similar overall quality. Age & Condition The subject property was built in 1995 with an overall effective

age of 19 years. Comparables one and five are newer construction in superior condition warranting adjustments of -10.0% to each.



Land-to-Building Ratio, Loading & Parking

Land-to-Building ratios, loading capacity and configuration, and parking ratios therefore all correlated. Sales with higher site efficiency than the subject property were adjusted downward as they are superior and sales with lower efficiency were adjusted upward as they are inferior. In the subject market area, dock height loading is not considered a significant amenity over grade level loading. Comparables one and two have superior site attributes with regard to parking and loading. Front parking is adequately isolated from rear loading and access, and the truck court is deep enough to accommodate high trailer-loading activity. These comparables are adjusted -10.0% each. Comparable three also has favorable separation between parking and loading, but the parking lot is very tight because of the high office buildout predominant in the park, and the rear loading is very tight with grade level accommodations for smaller commuter trucks and passenger vehicles only. Comparable four is identical to the subject and an adjustment is unwarranted. Comparable five has good rear dock-height loading but the office and parking in front are below average in overall marketability and capacity. No adjustment is made.

HVAC & Office Comparables one, two and five have inferior office buildout and are adjusted 10.0% each. Comparable three has higher and better quality buildout with an adjustment of -5.0% justified. Comparable four has a somewhat comparable office ratio to the subject, but nearly twice the space is finished upstairs mezzanine space vs. downstairs and finishing is reportedly inferior. An adjustment of 5.0% is made.

Height Comparable three has inferior clear height and adjusted 5.0%. The adjustment process was effective in reducing the indicated range of value from sales data. On a price per building area square foot basis, the adjusted values of the comparable properties range from $111.02 to $143.38 with an average of $121.38 and median of $117.22 per building area square foot. This is in favorable contrast with the wider unadjusted values from $105.73 to $143.38 with an average of $121.70 and median of $123.26 per building area square foot. The adjusted range and magnitude of adjustments are within reasonable parameters considering current market conditions for the subject property profile. While the net adjustments ranged from -10% to 5% with an average of 0% and median of 0%, gross adjustments were from 5% to 30% with an average of 18% and median of 20%.



Most weight is given to comparables one and four.

• Comparable one is the most recent and although is generally superior would be considered an acceptable alternative for many prospective buyers of the subject property. It sold for $124.49 per square foot, and after a net adjustment of -10% (gross adjustment of 30%) indicates a value of $112.04 per square foot.

• Comparable four is in the same general industrial environment with a nearly identical design, and sold for $111.64 per square foot and after a net adjustment of 5% (gross adjustment of 5%) indicates a value of $117.22 per square foot.

Other comparables would not be regarded as reliable by market participants but still support the general value range indicated.

• Comparable two is located very close to the subject property but is an isolated high cash sale under unusual (long-term REO) sale conditions.

• Comparable three is more flex than office-warehouse because of the park’s location, building design, office ratio and loading profile. As a result, the buyer profile is different than for the subject property.

• Comparable five is the most dated and farthest from the subject property.



CONCLUSION OF VALUE BY THE SALES COMPARISON APPROACH

All comparables are given some consideration as all are located in the same market area and share similar economic amenities with the subject property. While the sample size in commercial real estate analysis is too small to make statistical analysis reliable, statistics can provide some valuable insights to the level of variance between comparables and their reliability. Considering the objectives of the most likely buyer-profile, most weight is given to comparables 1 and 4 (marked with “*” in the grids). The overall standard deviation of indicated values before adjustment is $14.46, while the adjusted overall standard deviation is $13.22. However, the comparables given most weight reduce the standard deviation to $3.66, which suggests that they are more reliable. The Coefficient of Variation, which helps to put the standard deviation in context, is 12% before adjustment and is reduced to 11% after adjustments. Since most weight is given to comparables 1 and 4, the CofV to is reduced to 3% which suggests a better level of reliability. The summary of observations and conclusion by the sales comparison approach are as follows.

5 sales were used Unadjusted Net Gross AdjustedPrice Range $/SF Bldg Adj. Adj. $/SqFt Bldg

Low $105.73 -10% 5% $111.02Average $121.70 0% 18% $121.38Median $123.26 0% 20% $117.22High $143.38 5% 30% $143.38

Standard Deviation $14.46 $13.22Coefficient of Variation 12% 11%

Most Weight(*)

Low $111.64 $112.04Average $118.06 $114.63Median $118.06 $114.63High $124.49 $117.22

Standard Deviation $9.08 $3.66Coefficient of Variation 8% 3%

$/SqFt Bldg$115.00x 6,272

$721,280$720,000$114.80Per Square Foot

Indicated Value As IsRounded as of January 17, 2014

Indicated ValueSquare Feet

VALUE CONCLUSION


Reconciliation of Value Example Industrial Condominium, Doral, FL

RECONCILIATION OF VALUE

The value conclusions are subject to the following extraordinary assumptions that may affect the assignment results. An extraordinary assumption is uncertain information accepted as fact. If the assumption is found to be false as of the effective date of the appraisal, the right to modify value conclusions is reserved.


• This appraisal is not based on any hypothetical conditions. The reconciliation process considers the approaches which were utilized in this report. Each approach to value is analyzed as to its reliability and applicability.

Cost Approach The cost approach estimates the land value and adds the depreciated value of the improvements. An estimate of entrepreneurial incentive is typically added to this amount. The cost approach is normally considered most relevant for newer construction where depreciation is not a significant issue, and for unique special-use properties that are often valued by potential users on a replacement cost basis.

• The cost approach is not relevant to this appraisal assignment because the property is a condominium unit and the market does not recognize replacement cost as a meaningful indicator of value. Allocation of common elements, depreciation and land cannot be accomplished with credibility.

Income Capitalization Approach The income capitalization approach analyzes the actual and projected income and expenses of a property and capitalizes the net income into a value estimate. Two methods are considered, direct capitalization and discounted cash flow analysis. Direct capitalization assumes stabilized net operating income into perpetuity. It is the process of dividing the overall capitalization rate into the net operating income to indicate value. A discounted cash flow analysis projects increases and decreases in income over a holding period. Assumptions for these projections are based on those of typical investors. When appropriate, costs to reach economic stabilization are deducted from the stabilized value estimate to yield an as-is value estimate. Income-producing properties are purchased based on their projected future income.

• The subject is 100% owner occupied and is considered primarily an owner-user profile property. Owner-user properties tend to trade above values that can be justified by leased asset investors because leased asset investors underwrite vacancy and collection loss and management while owner-users do not. Additionally, owner-users tend to perceive other operating expenses and equity-investment rates of return on real estate as costs of their primary business.


Reconciliation of Value Example Industrial Condominium, Doral, FL

• Although market participants would rarely consider the income capitalization approach relevant, some lenders and investors require the information for risk analysis purposes.

Sales Comparison Approach The sales comparison approach compares sales of similar properties to the subject property. Sales are analyzed for differences such as conditions of sale, market conditions, location, design, size, age and condition, and land-to-building ratio/parking. Based on these comparisons, a value is then estimated for the subject property. The strength of this approach relies on the quality of the comparable sales. Sales which closely resemble and can be compared easily with the subject are most desirable. The more comparable the sales, the more reliable the sales comparison approach.

• Market participants consider sales comparison a primary approach for the subject property profile.

CONCLUSION OF VALUE

Based on the data, analysis and applicable approaches to value within this appraisal the conclusions are as follows.


January 17, 2014

Cost Approach N/APrice per Square Foot N/A

Income Capitalization Approach $710,000 No ReliancePrice per Square Foot $113.20

Sales Comparison Approach $720,000Price per Square Foot $114.80

Final Value Estimate $720,000Price per Square Foot $114.80

Date of the report August 20, 2014Market Exposure Time 9 monthsMarketing Period 9 months


ADDENDA Qualifications & License .................................. A Miami-Dade County Regional Analysis ........... B RealQuest Flood Map ....................................... C RealQuest Situs ................................................. D Miami-Dade County Assessor .......................... E Engagement Letter ............................................. F



South Florida Real Estate Appraisal, LLC Real Estate Appraisers & Consultants



Addenda

ADDENDUM A

QUALIFICATIONS & LICENSE


Addenda

Michael P. Jacobs, MA Please request an approval package from [email protected]

Visit my website for more information: www.SFREAppraisal.com

Education: Appraisal Institute Accredited Master of Arts in Real Estate and Urban Analysis at The University of Florida, Gainesville, Florida (1994).

Bachelor of Science in Business Administration, California State University at Long Beach (1982).

Affiliations: Designed Appraisal Institute MAI State-certified general real estate appraiser, State of Florida, RZ#2621

Experience: Appraised various types of properties, including: Office Apartments Subdivisions Industrial Vacant Land Service Stations Retail Gold Courses Aviation/Airport Related Shopping Centers Hotels and Motels Special Purpose Facilities Schools/Daycare Civic/Worship Residential Office, Industrial, Retail and Residential Condominium Projects Present: Principal, South Florida Real Estate Appraisal, LLC

2009-2011: Senior Commercial Appraiser, Integra Realty Resources 2004-2009: Senior Commercial Appraiser, Roe Minor Realty Consultants 1998-2004: Director/Manager, Cushman & Wakefield Valuation Advisory 1994-1996: Commercial Real Estate Appraiser, CB Richard Ellis 1982-1994: Principal, Appraisal & Research Services

Course Work:

Completed all education for Appraisal Institute Membership. Specialized continuing education courses to maintain current competency including Standards and Ethics Education Requirement of the Appraisal Institute. Past instructor for valuation systems and software including MS Office products, Argus (through the AI/MA student organization of which he was a founding member at the University of Florida), Business English, and others.

Resources: Subscriber to CoStar, LoopNet, Regional MLS (MLXchange), National Multiple Listing Service, Marshall & Swift Commercial Cost Estimator, CoreLogic RealQuest, Moody’s Analytics Précis Metro (Miami, Fort Lauderdale & West Palm MSAs), RealtyRates.com, PwC Real Estate Investor Survey, Narrative1, Argus Financial Software.

Other: United States Marine Corps (Reserve) Honorable Discharge as a Sergeant of Marines, 1976-1984.




Addenda


Addenda

ADDENDUM B

MIAMI-DADE COUNTY REGIONAL ANALYSIS


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ADDENDUM C

REALQUEST FLOOD MAP


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ADDENDUM D

REALQUEST SITUS


Addenda


Addenda

ADDENDUM E

MIAMI-DADE COUNTY ASSESSOR


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ADDENDUM F

ENGAGEMENT LETTER


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REDACTED


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