restricted appraisal report · wa state general certified appraiser certification no. 1101646 bryan...

RESTRICTED APPRAISAL REPORT

Property Type: A flex office building with warehouse component. Located at:

2612 Pacific Hwy E Fife, WA 98424

Prepared For: Richard Hart 2612 Pacific Highway E Fife, WA 98424 Contact: Richard Hart Client Effective Date: January 1, 2016 Job No.: S016-001 Prepared By: Patrick M. Lamb, MAI WA State General Certified Appraiser Certification No. 1101646 Bryan H. Boyce WA State General Certified Appraiser Certification No. 1101882

4025 DELRIDGE WAY SW, SUITE 140, SEATTLE, WA 98106 WWW.LAMBHANSONLAMB.COM, TELE: (206) 903-1500 FAX: (206) 903-0648

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Letter of Transmittal

January 25, 2016

Richard Hart 2612 Pacific Highway E Fife, WA 98424

RE: A flex office building with warehouse component located at 2612 Pacific Hwy E, Fife, WA 98424.

Dear Mr. Hart,

As requested, we have personally inspected and appraised the above-mentioned property, more particularly described in detail within the following appraisal report. The purpose of this report is to provide an opinion of the "As Is" market value. The value indication “As Is” reflects conditions existing as of the effective date, and how the site physically and legally exists without hypothetical conditions, assumptions, or qualifications as of the effective date the appraisal is prepared.

This report was performed in a restricted format to be used by the client only. All data,

information, and analysis derived in support of the appraiser’s opinions and conclusions are retained in the designated company work files. The intended use of this report is for determination of list price.

In the "As Is" state, the subject property is improved with a multi-tenant flex office

building with warehouse component, containing 10,595 Square Feet (SF) of Gross Building Area (GBA). The subject contains 9,101 SF of office and 1,493 SF of warehouse and was originally built in 1978. The underlying site has 35,641 SF of land on a single parcel.

The final opinion of the "As Is" market value of the subject property as of the effective date, January 1, 2016, is displayed below:

Method of Value Adj $ Indication % Weight $ Indication

Sales Comparison Approach $1,119,314 25% $279,829Income Capitalization Approach $1,181,527 75% $886,146

Sum of Weighted Averages 100% $1,165,974Final Opinion of "As Is" Value, Rounded $1,165,000

Final Value Indications

In valuing the subject, greater weight is placed on the Income Approach. This approach

is predicated on the principle of anticipated economic benefits and, therefore reflects the investment characteristics of the subject. This approach most closely parallels the anticipated analysis that would be employed by the most probable purchaser.

The Sales Comparison Approach has also been performed and given secondary weight

in the final value conclusion as there was a limited pool of comparables available in the market with characteristics that closely matched the subject. With the smaller pool of comparables, the adjustments made for quality/condition, size, location and amenities are less certain. While this


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approach yields reliable results, the increased uncertainty warrants less weight being placed on this approach. It is employed as a secondary indicator of an investment property’s value. The Cost Approach was not developed due to uncertainty in determining all factors of depreciation.

The appraisal analyzes real property components and fixtures that are typically included

in the transfer of like kind property. The report does not include items of equipment, stock, inventory, tools, furniture, or any other items, movable or immovable, of a personal nature. To the best of our ability and knowledge, this appraisal was done according to the appropriate guidelines set forth in Standards 1 and 2 of the Uniform Standards of Professional Appraisal Practices (USPAP), as well as the Code of Professional Ethics of the Appraisal Institute.

If you have any questions or require additional information at this time, please do not

hesitate to contact us. Your attention is directed to the following pages of data and analysis from which, in part, the above value conclusion was derived. Thank you for the opportunity to be of service. Very Truly Yours;

0.57 X 1.830.57 X 1.83

0.57 X 1.83

Patrick M. Lamb, MAI Bryan H. Boyce WA State General Certified Appraiser WA State General Certified Appraiser Certification No. 1101646 Certification No. 1101882 Phone: (206) 838-1216 Phone: (206) 838-1223 E-Mail: [email protected] E-Mail: [email protected]


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Table of Contents

Letter of Transmittal ................................................................................................................................... 2

Table of Contents ..................................................................................................................................... 4

Certification ................................................................................................................................................ 6

Summary of Salient Facts .......................................................................................................................... 8

Summary of Value Conclusions ............................................................................................................... 9 Sales Comparison Approach 9 Income Approach 9 Final Reconciliation of Value 9

Subject Photographs Section ................................................................................................................ 10 Ostensible Owner 15 Property Address 15 Tax Parcel Number(s) 15 Legal Description 15 Effective Date 15 Completion / Reporting Date 15 Purpose & Use 15 Definition of Market Value 16 Cash Equivalent 16 Property Rights Appraised 16 Fee Simple Interest 17 Extraordinary Assumptions 17 Hypothetical Conditions 17 Competency Provision 18 Geographic Competency 18 Appraisal Development & Reporting Process 18 Investigation Methodology 18 Sources of Information 19

Subject Location Maps........................................................................................................................... 20

Market Description .................................................................................................................................. 21 County Overview: Pierce County 21 Local Market Overview: City of Tacoma 22 Employment Trends 22 Immediate Market Overview: Fife 23 Market Demographic Overview 24 Market Area Conclusion 25

Subject Site Maps ................................................................................................................................... 26

Valuation of Property Section – Appraisal Methodology ................................................................... 27 Cost Approach 27 Sales Comparison Approach 27 Income Capitalization Approach 27 Methodology Applicable to the Subject 27


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Improved Sales Comparables Summary, Map, & Profiles Summary Sales Chart 28 Market Rent Conclusion 42 Operating Expense Summary 42 Other Income 42 Vacancy & Collection Loss 43 Capitalization of Net Income 45 OAR Method of Comparison 46

General Assumptions & Limiting Conditions ........................................................................................ 47

Appraiser Qualifications & Supporting Data Addendum ................................................................... 51


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Certification We certify that, to the best of our knowledge and belief: i. The statements of fact contained in this report are true and correct.

ii. The reported analyses, opinions, and conclusions are limited only by the reported

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

iii. We have no present or prospective interest in the property that is the subject of this

report, and I have no personal interest or bias with respect to the parties involved. iv. We have no bias with respect to the property that is the subject of this report or to the

parties involved with this assignment. v. Our engagement in this assignment was not contingent upon developing or reporting

predetermined results. vi. Our 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.

vii. Our analyses, or opinions, and conclusions were developed, and this report has been

prepared, in conformity with the Uniform Standards of Professional Appraisal Practice.

viii. Bryan H. Boyce (WA State Certification No. 1101882) made a personal inspection of the subject property, performed research, analysis and report writing. Patrick M. Lamb, MAI (WA State Certification No. 1101646) did not inspect the site, but did co-appraise the property and contributed report supervision and review.

ix. No one else provided significant real property appraisal assistance to the person(s) signing

this certification. x. The as of the reporting date, January 25, 2016, the certification of the signing licensed

appraisers are up to date with the State of Washington Appraisal Licensing Division. xi. We certify that, to the best of our knowledge and belief, the reported analyses, opinions

and conclusions were developed, and this report has been prepared, in conformity with the requirements of the Code of Professional Ethics and the Standards of Professional Appraisal Practice of the Appraisal Institute.

xii. Possession of this report, a copy, or any part thereof does not carry with it the right of

publication.

xiii. Neither all, nor any part of the contents of this report (especially any conclusions as to value, the identity of the appraiser or the firm with which he is connected) shall be used


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for any purposes by anyone but the client specified in the report, without the previous written consent of the Appraiser. Nor shall it be conveyed by anyone to the public through advertising, public relations, news, sales, or other media, without the express written consent and approval of the undersigned.

xiv. As of the reporting date, Patrick M. Lamb, MAI, has completed the continuing education

program for designated members of the Appraisal Institute. The use of this report is subject to the requirements to the Appraisal Institute relating to review by its duly authorized representatives.

xv. We have not performed any services, as an appraiser or in any other capacity, of the

subject of this report within the three-year period immediately preceding acceptance of this assignment.

Certification as of the reporting date, January 25, 2016;

0.57 X 1.830.57 X 1.83

0.57 X 1.83

Patrick M. Lamb, MAI Bryan H. Boyce WA State General Certified Appraiser WA State General Certified Appraiser Certification No. 1101646 Certification No. 1101882 Phone: (206) 838-1216 Phone: (206) 838-1223 E-Mail: [email protected] E-Mail: [email protected]


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Summary of Salient Facts

Client: Richard Hart. Intended Use: This report is to assist the client with determination of list

price. This report is not intended for any other use. Intended Users: Richard Hart is the only intended user of this report. No

other party is intended to use this report. Purpose of Appraisal: The purpose of this appraisal is to provide an opinion of

the "As Is" market value of the subject property. Property Appraised: A flex office building with warehouse component located

at 2612 Pacific Hwy E, Fife, WA 98424. Effective Date of Value: January 1, 2016. Completion / Reporting Date: January 25, 2016. Zoning: REGIONAL C (Regional Commercial) City of Fife Improvements: Class D (Wood), flex office building, constructed in 1978.

The improvements have 10,595 SF of GBA (9,101 Sf Office/1,493 SF Warehouse). The subject as improved has a land/building ratio of 3.36:1 and a parking ratio of 2.17/1,000.

Tax Parcel Number(s): 032011-6-002, Pierce County. Land Area: 35,641 SF (0.82 Acres). Highest & Best Use, As Vacant: Develop a commercial or industrial-use building. Highest & Best Use, As Improved: Maintain the existing use as a flex office building.


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Summary of Value Conclusions Sales Comparison Approach

Comparable Sales Adj $ Indications % Weight $/SF IndicationImproved Property 1 $101.98 25% $25.49

Improved Property 2 $117.21 15% $17.58Improved Property 3 $127.78 20% $25.56Improved Property 4 $82.57 25% $20.64Improved Property 5 (Active Listing) $103.24 5% $5.16Improved Property 6 (Active Listing) $112.08 10% $11.21

Sum of Value Weighted Average 100% $105.65Subject SF (GBA) 10,595 X $/SF $1,119,314

Sales Approach, $/SF Method

Income Approach

Method of Value O.A.R NOI $ IndicationDirect Capitalization 8.00% $94,522 $1,181,527

Income Approach, Direct Capitalization Method

Final Reconciliation of Value

Method of Value Adj $ Indication % Weight $ Indication

Sales Comparison Approach $1,119,314 25% $279,829Income Capitalization Approach $1,181,527 75% $886,146

Sum of Weighted Averages 100% $1,165,974Final Opinion of "As Is" Value, Rounded $1,165,000

Final Value Indications


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Subject Photographs Section

2.05 X 2.75 2.05 X 2.75

1. Aerial Image of Subject 2. Subject Front (North Side)

2.05 X 2.75 2.05 X 2.75

3. Pacific Hwy E, View East 4. Pacific Hwy E, View West

2.05 X 2.75 2.05 X 2.75

5. Subject West Side 6. Parking Lot, looking South East


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2.05 X 2.75 2.05 X 2.75

7. Subject Rear (South Side) 8. Subject East Side

2.05 X 2.75 2.05 X 2.75

9. Warehouse Component Exterior 10. Office Bathroom

2.05 X 2.75 2.05 X 2.75

11. Office Interior (Vacant) 12. Office Interior (Vacant)


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2.05 X 2.75 2.05 X 2.75

13. Warehouse Interior 14. Warehouse Interior

2.05 X 2.75 2.05 X 2.75

15. Warehouse Storage 16. Warehouse Storage

2.05 X 2.75 2.05 X 2.75

17. Suite A Interior 18. Suite A Interior


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2.05 X 2.75 2.05 X 2.75


2.05 X 2.75 2.05 X 2.75

21. Suite A Bathroom 22. Suite A Kitchen

2.05 X 2.75 2.05 X 2.75



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2.05 X 2.75 2.05 X 2.75

25. Suite A Interior 26. Mechanical Room

2.05 X 2.75 2.05 X 2.75

27. Suite A3 Interior 28. Bathroom

2.05 X 2.75 2.05 X 2.75

29. Office Interior (Vacant) 30. Office Interior (Vacant)


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Property Identification Ostensible Owner

HART & HART LLC 2612 PACIFIC HWY E #A Fife, WA 98424-1045

Property Address

2612 Pacific Hwy E Fife, WA 98424

Tax Parcel Number(s)

The Pierce County Assessor’s Office identifies the subject by tax parcel number 032011-6-002. Legal Description

The subject site is legally described as follows: SECTION 11 TOWNSHIP 20 RANGE 03 QUARTER 21 : L 2 OF SP 82-06-22-0306 TOG/W EASE OF REC LY IN NW 11-20-03E & SW 02- 20-03E OUT OF 03-20-02-3-047 & 03-20-11-2-036 SEG S-0609 SH ES DC 7/12/99 MA. Effective Date

This appraisal report, its analysis, research, and the final opinion of market value, are specifically applicable to the effective date of value as of January 1, 2016.

Completion / Reporting Date

The completion date of this report is January 25, 2016.

Purpose & Use

The purpose of this appraisal is to provide an opinion of the "As Is" market value indication of the subject property for determination of list price.


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Definition of Market Value

Market Value is the most probable price which a property should bring in a competitive and open market under all conditions requisite to a market sale, the buyer and seller, each acting prudently, 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:

• Buyer and seller are typically motivated; • Both parties are well informed or well advised, and acting in what they consider their best interest. • A reasonable time is allowed for exposure in the open market. • Payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto: and • The price represents the normal consideration for the property sold, unaffected by special or creative financing or sales concessions granted by anyone associated with the sale.

Adjustments to the Comparables must be made for special or creative financing or sales

concessions. No adjustments are necessary for those costs that are normally paid by sellers as a result of tradition or law in a market area: these costs are readily identifiable since the seller pays these costs in virtually all sales transactions. Special or creative financing adjustments can be made to the comparable property by comparisons to financing terms offered by a third party institution lender that is not already involved in the property or transaction. Any adjustment should not be calculated on a mechanical dollar for dollar cost of the financing or concession, but the dollar amount of any adjustment should approximate the market's reaction to the financing or concessions based on the appraiser's judgment.

This definition complies with the mandate of the Federal Financial Institutions Reform,

Recovery, and Enforcement Act (FIRREA) of 1989. Source: Office of the Comptroller of the Currency under 12 CFR, Part 34, Subpart C-Appraisals, 34.42 Definitions {f} by special or creative financing or sales concessions granted by anyone associated with the sale.

Special Note: Unforeseen factors, or market fluctuations may limit the reliability of the

value conclusion in the future.

Cash Equivalent

The price of a property with nonmarket financing expressed as the price that would have been paid in an all-cash sale. (The Dictionary of Real Estate Appraisal, 6th edition, Appraisal Institute, Chicago, 2015, P. 92).

Property Rights Appraised

The property rights being appraised in the “As Is” state are those of a fee simple interest. The subject is currently leased to three tenants, one of which is the owner. All of the leases are on either month to month (MTM) or year to year (YTY) terms, or have less than one year


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remaining. Of the occupied spaces Videoture, LLC (Owner), in suite A occupies 56.77% of the subject, TCB, occupying suite A-3 is in 9.06% of the subject and NW Best II, occupying suites D&E takes up 19.25% of the subject. Vacant suite B makes up for 14.91% of the subject.

The existing subject lease rates appear to be within market parameters, and no

stabilization is required to reflect fee simple equivalent for the occupied spaces. In deriving the Income for the vacant space, the subject’s income is stabilized to reflect the fee simple equivalent market rent.

Fee Simple Interest Fee Simple Interest is defined as “An absolute ownership, unencumbered by any other

interest or estate, subject only to the limitations imposed by the governmental powers of taxation, eminent domain, police power and escheat.” (The Appraisal of Real Estate, 13th edition, Appraisal Institute, Chicago, 2008).

Extraordinary Assumptions

An assumption, directly related to a specific assignment, as of the effective date of the assignment results, which, if found to be false, could alter the appraiser’s opinions or conclusions.

Comment: Extraordinary assumptions presume as fact otherwise uncertain information

about physical, legal, or economic characteristics of the subject property; or about conditions external to the property, such as market conditions or trends; or about the integrity of data used in an analysis. (USPAP, 2016- 2017 ed.)

(The Dictionary of Real Estate Appraisal, 6th ed. 2015 Page 84). Special Note: when

incorporated, the use of extraordinary assumptions may affect the assignment results, (USPAP Standard 2 (xi)).

Hypothetical Conditions

A condition that is presumed to be true when it is known to be false. (SVP) 2. A condition, directly related to a specific assignment, which is contrary to what is known by the appraiser to exist on the effective date of the assignment results, but is used for the purpose of analysis.

Comment: Hypothetical conditions are contrary to known facts about physical, legal, or

economic characteristics of the subject property; or about conditions external to the property, such as market conditions or trends; or about the integrity of data used in an analysis. (USPAP, 2016-2017 ed.)

A hypothetical condition may be used in an assignment only if: use of hypothetical

condition is clearly required for legal purposes, for purposes of reasonable analysis, or for purposes of comparison; use of the hypothetical condition results in a credible analysis; and the


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appraiser complies with the disclosure requirements set forth in USPAP for hypothetical conditions.

(The Dictionary of Real Estate Appraisal, 6th ed. 2015, Page 113). Special Note: when

incorporated, the use of hypothetical conditions may affect the assignment results, (USPAP Standard 2 (xi)).

Competency Provision

USPAP cites the Competency Rule which states that before agreeing to perform an assignment, an appraiser must have the experience to complete the engagement competently or the appraiser must take steps necessary to complete the assignment by personal study, association with experienced appraiser, or other measures. In this case the appraiser must disclose to the client the lack of knowledge or experience prior to taking the assignment. The appraisers participating in the assignment do have the experience to comply with the competency provision.

Geographic Competency

By accepting this appraisal order, the assigned appraiser does declare he/she has geographic competency in the subject property's market area and knowledge of and full access to all data sources including local sources unique to the subject's market.

Appraisal Development & Reporting Process

This appraisal is reported in a narrative format, as such, it presents detailed discussions of the data, reasoning, and analyses that were used in the appraisal process to develop the appraiser's opinion of value. Supporting documentation concerning the data, reasoning, and analyses is retained in the appraiser's file. The depth of discussion contained in this report is specific to the defined scope of work, needs of the client, and for the intended use.

Investigation Methodology

The scope of appraisal is designed to give the reader an understanding of the assumptions relied upon during the appraisal process. The scope of this assignment included (1) defining the appraisal engagement, (2) inspecting the subject property and comparable properties where appropriate, (3) generating detailed notes regarding the subject real property, (4) collection and analysis of all relevant data, (5) research of current costs for and sales of similar properties, (6) investigating current market conditions and trends for comparable properties, and (7) developing indicated market value conclusions.


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Sources of Information

Information about the subject property was gathered from a variety of sources, including Pierce County public records (assessor and recorder’s office records), the Site-To-Do-Business (STDB) and City of Fife Planning & Development Services. Additionally, we interviewed a variety of persons with direct knowledge of the subject development, including listing agents, city planners and builders/developers.

Comparable sales were located from a variety of sources, including the Northwest Multiple Listing Service, the Commercial Broker’s Association, Costar, and through leads provided by local market participants (verified through deeds on file with Pierce County). Where possible, comparable sales were further verified with parties directly or secondarily related to the transactions.


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Subject Location Maps

3.4 X 5.5

Regional Map

3.4 X 5.5

Neighborhood Map


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Market Description

County Overview: Pierce County

The subject is located in Pierce County, the second most populous county in the state of

Washington. Formed out of Thurston County on December 22, 1852, by the legislature of Oregon Territory, it was named for U.S. President Franklin Pierce. According to the Office of Financial Management, the April 1, 2015 population of Pierce County was 830,120. The county seat is Tacoma, also the county's largest city.

Pierce County is notable for being home to the Mount Rainier volcano, the tallest

mountain in the Cascade Range. Its most recent recorded eruption was between 1820 and 1854. There is no imminent risk of eruption, but geologists expect that the volcano will erupt again. If this should happen, parts of Pierce County and the Puyallup Valley would be at risk from lahars, lava, or pyroclastic flows. The Mount Rainier Volcano Lahar Warning System was established in 1998 to assist in the evacuation of the Puyallup River valley in case of eruption.

According to the U.S. Census Bureau, Pierce County has a total area of 1,806 square miles, of which, 1,679 square miles of it is land and 128 square miles of it is water. The Port of Tacoma, located in Pierce County, is the sixth busiest container port in North America, and one of the 25 busiest in the world and it plays an important part in the local economy. This deep-water port covers 2,400 acres and offers a combination of facilities and services including 34 deepwater berths, two million square feet of warehouse and office space, and 131 acres of industrial yard. One economic impact study showed that most of the 28,000 jobs in Pierce County are related to the Port activities.

Pierce County is home to the third largest army post in the United States, Joint Base

Lewis-McChord (JBLM). JBLM has more than 25,000 soldiers and civilian workers. The post supports over 120,000 military retirees and more than 29,000 family members living both on and off post. Fort Lewis proper contains 86,000 acres. Other military facilities within Pierce County include Madigan Army Medical Center and Camp Murray National Guard post. Altogether, these military installations contribute over 42,000 military and civilian jobs to the local economy.

Pierce County's official transportation provider is Pierce Transit. It provides buses, para-

transit, and rideshare vehicles. The regional Sound Transit runs a light rail line through downtown Tacoma, and provides several regional express buses. Also, Intercity Transit provides transportation between Tacoma, Lakewood, and Thurston County.

Pierce County agriculture has been an instrumental part of the local economy for almost

150 years. However, in the last half century much of the county's farmland has been transformed into residential areas. Pierce County has taken aggressive steps to reverse this trend; the county recently created the Pierce County Farm Advisory Commission which will assist in protecting the remaining 48,000 acres of Pierce County farmland.


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Local Market Overview: City of Tacoma The subject property is located in the north eastern portion of the city of Tacoma. The

city is located off of I-5, about 20 minutes (or roughly 18 miles) from Seattle-Tacoma International Airport, minutes from Joint Base Lewis-McChord and Tacoma Mall to the south, and roughly a 10 minute drive (or 5 miles south) of the Tacoma Dome and Downtown Tacoma, known for the Tacoma Convention Center, premier museums, galleries, theaters, fine dining, and numerous shopping amenities. Tacoma is a mid-sized urban port city in Pierce County, its located on Puget Sound, 32 miles southwest of Seattle and 31 miles northeast of the state capital, Olympia.

Tacoma is the second-largest city in the Puget Sound area and the third largest in the

state. According to the Washington State Office of Financial Management, Tacoma had an estimated population of 202,300 as of April 1, 2015. Tacoma’s population at the 2010 Census was 198,397 people, which was an increase of 2.5% (or 0.25% per year) from the 2000 Census total of 193,556.

Tacoma straddles the neighboring Commencement Bay, which is one of the largest

seaports in the Pacific Northwest. The city boundaries are: Commencement Bay to the north; Puget Sound on the west; the cities of University Place, Steilacoom, and Lakewood lie to the southwest; Joint Base Lewis-McChord and the cities of Parkland and Midland on the south; the city of Puyallup to the southeast; the cities of Fife, Milton, and Edgewood on the east; the King-Pierce County border lies to the northwest, beyond which is the city of Federal Way. Large areas of Tacoma have excellent views of Mount Rainier, which is located roughly 30 miles southeast.

The dominant intercity transportation link between Tacoma and other parts of the Puget

Sound is Interstate 5, which links Tacoma with Seattle to the north and Portland, Oregon, to the south. State Route 16 runs along a concrete viaduct through Tacoma's Nalley Valley, connecting Interstate 5 with Central and West Tacoma, the Tacoma Narrows Bridge, and the Kitsap Peninsula.

Employment Trends As of April 2015, the unemployment rate (not seasonally adjusted) for the City of

Tacoma was 6.7%. This is higher than Pierce County’s rate 6.2%. The city’s rate has dropped by 0.2% since April 2014 and dropped 1.8% since April 2013. Over the past 10 years, Tacoma has followed the same general trends as Washington State and Pierce County. However, the rate has typically been above Pierce County and the state. Furthermore, the April 2015 total employment in Tacoma is 90,812. This is up from 88,232 in April 2014. This equals a 2.9% increase in total employment in the city in that time span. The unemployment survey is displayed on the following page:


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3.4 X 5.8

Immediate Market Overview: Fife

The subject property is located in the City of Fife. In 1957, the city was officially

incorporated. Fife is a small city located east of Tacoma and consists primarily of businesses such as car dealerships, warehousing and industrial facilities, motels, an Indian casino, drive through smoke shops, quick-dining restaurants, and other highway-side businesses. Its proximity to the Port of Tacoma, Interstate 5, and Highway 167 has contributed to the large number of freight forwarding companies. Fife's tax base is made up of sales tax, utility tax, and property tax. Fife Heights, located on a hill beyond the incorporated bounds of the city, is a primarily residential area. Milton is immediately to the east and Edgewood is to the southeast.

According to the United States Census Bureau, the city has a total area of 5.83 square

miles, of which, 5.69 square miles is land and 0.14 square miles is water. Fife is also a tide flat community, residing in the low, flat area extending from the Port of Tacoma. This means the water table occurs only 10–15 feet below ground in some parts. Consequently, during the day as the tide rises and falls in the Puget Sound, so do parts of land slightly rise and fall. The southern portions of the city are in the floodplain of the Puyallup River.

As of the census of 2010, there were 9,173 people, 3,642 households, and 2,192

families residing in the city. According to the Washington State Office of Financial Management, Fife had an estimated population of 9,545 as of April 1, 2015. The population density was 1,612.1 inhabitants per square mile. There were 3,895 housing units at an average density of 684.5 per square mile. The average household size was 2.50 and the average family size was 3.12.

The median age in the city was 30.9 years. 25.7% of residents were under the age of 18;

10.5% were between the ages of 18 and 24; 36.9% were from 25 to 44; 20.4% were from 45 to 64; and 6.5% were 65 years of age or older. The gender makeup of the city was 50.4% male


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and 49.6% female. The below outlines the neighborhood boundaries of the subject’s immediate neighborhood, and the subject’s location:

Market Demographic Overview

The subject would likely draw demand from an area within a 12-minute drive time from the property. The map, located on the following page, courtesy of Site-To-Do-Business (STDB) shows the subject’s competitive market, illustrated by 4, 8 and 12-minute drive times from the property, (Note: information used is derived from the U.S. Bureau of the Census, 2010 Census of Population and Housing and ESRI forecasts for 2015 and 2020):


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Population: In the identified market area, the 2010 census population was 157,531. ESRI forecasts the 2015 population at 162,047. The five-year projection (2020) for the population is 168,203, representing a change of 0.75% annually from 2015 to 2020. The national growth rate is forecast at 0.75% in the same period. The median age of the market is 34.4 years in 2010 and anticipated to be 35.8 years in 2020.

Household: The household count in this market area, as of the 2010 census, was 62,174.

ESRI forecasts the 2015 household count at 64,408. The five-year projection (2020) of households is 67,078, representing a change of 0.82% annually from 2015 to 2020. Average household size in 2010 was 2.44 and anticipated to be 2.43 in 2020. The number of families in 2010 was 35,393.

Housing: In 2015, ESRI forecasts that 31,836 of the 64,408 housing units in the market

area were owner occupied, versus 32,572 that were renter occupied. The number of owner occupied households is expected to grow 0.54% per year from 2015 to 2020.

Household Income: The 2015 median household income in the market area is $45,110.

ESRI forecasts the 2020 median household income to be $51,423, which equals a 2.65% annual increase. The national median income is anticipated to change 2.66% annually in the same period. The per capita income in 2015 is $23,782 and forecasted to be $26,870 in 2020.

Market Area Conclusion

Overall, the area has a stable economic base with attractive amenities, such as proximity to major transportation linkages and Port of Tacoma. Several nearby highways and interstates provides access to the greater Puget Sound Region. Further, the subject is located adjacent to the Port of Tacoma, which is a major driver of economic development for the City and County, and less than two miles from Downtown Tacoma. The Port of Tacoma is considered to be a strengthening market area which generates approximately $13.9 million in tax revenue and 40,000 jobs within the County. However, the local area has widespread environmental contamination for a former smelter.

Lastly, the credit crisis and downturn of the financial markets of 2008 created

widespread uncertainty and turbulence in nearly all real estate market segments. During the height of the crisis, demand for real estate declined substantially from a fundamental standpoint as well as in capital investment markets. However, over the last few years, most real estate markets have stabilized and show consistent signs of recovery, (some areas have even returned to a pre-recession benchmark). Overall, the demand for real estate from a fundamental basis and within capital markets will likely continue to improve into 2016 and the foreseeable future.


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Subject Site Maps

Plat Map

Aerial View


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Valuation of Property Section – Appraisal Methodology

In appraisal practice, an approach to value is included or omitted based on its applicability to the property type being valued and the quality and quantity of information available. Cost Approach

The cost approach is based upon the proposition that the informed purchaser would pay no more for the subject than the cost to produce a substitute property with equivalent utility. This approach is particularly applicable when the property being appraised involves relatively new improvements that represent the highest and best use of the land, or when relatively unique or specialized improvements are located on the site and for which there exist few sales or leases of comparable properties.

Sales Comparison Approach

The sales comparison approach utilizes sales of comparable properties, adjusted for differences, to indicate a value for the subject. Valuation is typically accomplished using physical units of comparison such as price per square-foot, price per unit, price per floor, etc., or economic units of comparison such as gross rent multiplier. Adjustments are applied to the physical units of comparison derived from the comparable sale. The unit of comparison chosen for the subject is then used to yield a total value. Economic units of comparison are not adjusted, but rather analyzed as to relevant differences, with the final estimate derived based on the general comparisons. Income Capitalization Approach

The income capitalization approach reflects the subject's income-producing capabilities. This approach is based on the assumption that value is created by the expectation of benefits to be derived in the future. Specifically estimated is the amount an investor would be willing to pay to receive an income stream plus reversion value from a property over a period of time. The two common valuation techniques associated with the income capitalization approach are direct capitalization and yield capitalization using a discounted cash flow (DCF) analysis. Methodology Applicable to the Subject

In valuing the subject, the Sales and Income Approaches to value were used in this report. The Cost Approach was not developed due to uncertainty in determining all factors of depreciation.


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Improved Sales Comparables Summary, Map, & Profiles Summary Sales Chart

No. Address Property Type Sales Date SF (GBA) Lot Size (SF) Office % Year Built Land/Bld Ratio Parking Ratio Sale/ List PricePrice/SF (GBA)

1930 S 336th StFederal Way, WA 98003 Office 05/29/15 11,473 53,500 100% 1980 / 15 Eff 4.66 :1 4.97/1,000 $1,300,000 $113.31

22201 W Valley Hwy NAuburn, WA 98001 Business Park 12/18/14 11,136 40,974 25.65% 1985 / 15 Eff 3.68 :1 2.16/1,000 $1,135,000 $101.92

33502 S Pine St Tacoma, WA 98409

Misc Commercial Services 08/19/14 14,400 56,000 50% 1978 / 15 Eff 3.89 :1 1.74/1,000 $1,600,000 $111.11

43009 S 40th St Tacoma, WA 98409 Office Building 07/30/14 9,991 32,874 100.% 1988 / 15 Eff 3.29 :1 5.10/1,000 $825,000 $82.57

52915 S M St Tacoma, WA 98409 Office/ Warehouse

Active Listing

8,730 11,375 37.8% 1972 / 15 Eff 1.30 :1 1.15/1,000 $825,000 $94.50

6*2612 Pacific Hwy EFife, WA 98424 Office/Warehouse

Active Listing

10,595 35,641 85.09% 1978 / 15 Eff 3.36 :1 2.17/1,000 $1,250,000 $117.98

Sub2612 Pacific Hwy EFife, WA 98424

Office/Warehouse N/A 10,595 35,641 85.09% 1978 / 15 Eff 3.36:1 2.17/1,000 N/A N/A

* Listing of the Subject.


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Property Statistics: Improved Property 1 Closed SaleStreet Address City State Zip Code930 S 336th St Federal Way WA 98003

Submarket Federal WayProperty Type OfficeParcel No. 926501-0080Assessed Value $1,276,600Land Area - SF 53,500Building Class Class C, Msny, GdYear Built 1980 / 15 EffGBA 11,473Land/Bld Ratio 4.66 :1Parking Ratio 4.97/1,000Office % 100%Clear Hight 12'Traffic Counts 15,800

Date of Sale 05/29/15 Sale Price $1,300,000Days on Market 111 Price/SF (GBA) $113.31Buyer Winton Properties LLCSeller Washington Trucking AssnDoc. Number 201506010613Instrument Warranty DeedCondition of Sale Arms Length

Legal Description:

Time Adjustment Building Size Condition Quality7 Months Prior Similar Similar Superior

0.0% 0.0% 0.0% -5.0%Office % Exposure Parking Ratio Other

Similar Similar Superior Similar0.0% 0.0% -5.0% 0.0%

Gross Adjust. Factor 10.0% Net Phys. Adjust. -10.0%Time Adj. $/SF $113.31 Phys. Adj. $/SF $101.98Contact Name NumberCounty Assessor

Office

Transaction Info Financial Info

Property Info Property Photo

2.6 X 2.7

Comments

WEST CAMPUS OFFICE PARK DIV 2 PLAT BLOCK: PLAT LOT: 8

This comparable is the closed sale of a office building located 5.26 miles northeast of the subject in the Federal Way submarket. At the time of sale, this property was improved with a class C, masonry structure, built in 1980. We were unable to contact any of the parties involved in the transaction and have relied on data from County Assessor to verify details regarding the transaction. No market condition adjustments were warranted or applied. All quantitative adjustments are displayed below:


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Property Statistics: Improved Property 2 Closed SaleStreet Address City State Zip Code2201 W Valley Hwy N Auburn WA 98001

Submarket AuburnProperty Type Business ParkParcel No. 129160001001Assessed Value $1,013,100Land Area - SF 40,974Building Class Class C, Msny, AverageYear Built 1985 / 15 EffGBA 11,136Land/Bld Ratio 3.68 :1Parking Ratio 2.16/1,000Office % 25.65%Clear Hight 16'Traffic Counts 8,423

Date of Sale 12/18/14 Sale Price $1,135,000Days on Market N/A Price/SF (GBA) $101.92Buyer WEI SAN LLCSeller Deborah KaufmanDoc. Number 201412181361Instrument Warranty DeedCondition of Sale Arms Length

Legal Description:

Time Adjustment Building Size Condition Quality12 Months Prior Similar Similar Similar

0.0% 0.0% 0.0% 0.0%Office % Exposure Parking Ratio OtherInferior Similar Similar Similar15.0% 0.0% 0.0% 0.0%

Gross Adjust. Factor 15.0% Net Phys. Adjust. 15.0%Time Adj. $/SF $101.92 Phys. Adj. $/SF $117.21Contact Name NumberDebbie Kaufman 253-350-4479Seller

Office



2.6 X 2.7

Comments

CALHOUN INDUSTRIAL PARK PLAT BLOCK: PLAT LOT: 1

This comparable is the closed sale of a business park building located 8.8 Miles Northeast of the subject in the Auburn submarket. At the time of sale, this property was improved with a class C, masonry structure, built in 1985. The contact, Debbie Kaufman, indicated that this sale was an Arms Length transaction. Building was fully occupied at time of sale. New ownership took over two spaces upon lease expirations. No market condition adjustments were warranted or applied. All quantitative adjustments are displayed below:


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Property Statistics: Improved Property 3 Closed SaleStreet Address City State Zip Code3502 S Pine St Tacoma WA 98409

Submarket TacomaProperty Type Misc Commercial ServicesParcel No. 9710000031, 9710000018Assessed Value $1,058,800Land Area - SF 56,000Building Class Class D, Wd, AvgYear Built 1978 / 15 EffGBA 14,400Land/Bld Ratio 3.89 :1Parking Ratio 1.74/1,000Office % 50%Clear Hight 12'-20'Traffic Counts 14,054

Date of Sale 08/19/14 Sale Price $1,600,000Days on Market N/A Price/SF (GBA) $111.11Buyer D & S KEL LLCSeller AAD LLCDoc. Number 201408190376Instrument Warranty DeedCondition of Sale Arms Length

Legal Description:

Time Adjustment Building Size Condition Quality16 Months Prior Similar Similar Inferior

0.0% 0.0% 0.0% 5.0%Office % Exposure Parking Ratio OtherInferior Similar Similar Similar10.0% 0.0% 0.0% 0.0%

Gross Adjust. Factor 15.0% Net Phys. Adjust. 15.0%Time Adj. $/SF $111.11 Phys. Adj. $/SF $127.78Contact Name NumberTom Brown 253-779-8400Neil Walter Company

Office



2.6 X 2.7

Comments

Lots 9 thru 16, lots 35 thru 42 blk 1 wings addition vol 1 pg 83

This comparable is the closed sale of a misc commercial services building located 3.8 miles West of the subject in the Tacoma submarket. At the time of sale, this property was improved with a class D, wood structure, built in 1978. The contact, Tom Brown, indicated that this sale was an Arms Length transaction. Sold to a neighboring owner who intends to expand their own business into the building. The buildable adjacent parcel included was a main buyer motivator. Building contains 50% office and 50% manufacturing space, heated, insulated, powered. No market condition adjustments were warranted or applied. All quantitative adjustments are displayed below:


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Property Statistics: Improved Property 4 Closed SaleStreet Address City State Zip Code3009 S 40th St Tacoma WA 98409

Submarket TacomaProperty Type Office BuildingParcel No. 9120000081Assessed Value $829,200Land Area - SF 32,874Building Class Class D, Wd, AverageYear Built 1988 / 15 EffGBA 9,991Land/Bld Ratio 3.29 :1Parking Ratio 5.10/1,000Office % 100.%Clear Hight 10'Traffic Counts None Noted

Date of Sale 07/30/14 Sale Price $825,000Days on Market 792 Price/SF (GBA) $82.57Buyer PIERCE COUNTY AIDS FOUNSeller Contac 40 LLCDoc. Number 201407300515Instrument Warranty DeedCondition of Sale Arms Length

Legal Description:

Time Adjustment Building Size Condition Quality17 Months Prior Similar Similar Similar

0.0% 0.0% 0.0% 0.0%Office % Exposure Parking Ratio Other

Similar Inferior Superior Similar0.0% 5.0% -5.0% 0.0%

Gross Adjust. Factor 10.0% Net Phys. Adjust. 0.0%Time Adj. $/SF $82.57 Phys. Adj. $/SF $82.57Contact Name NumberKim Marvik 253-203-1325NAI Puget Sound

Office

Property PhotoProperty Info


2.6 X 2.7

Comments

SECTION 18 TOWNSHIP 20 RANGE 03 QUARTER 31 TRAVERS PARCEL A OF DBLR 88-03-04-0284 DESC AS L 19 THRU 22 B 31 OF WINGS ADD & L 21 THRU

This comparable is the closed sale of a office building building located 4.0 miles Southwest of the subject in the Tacoma submarket. At the time of sale, this property was improved with a class D, wood structure, built in 1988. The contact, Kim Marvik, indicated that this sale was an Arms Length transaction. Built in 1988, the property sits on 3/4 of an acre in the Tacoma Suburban SubMarket and was vacant at time of sale. Escrow took about 5-6 months because the buyer is a non-profit organization using government financing. A $15K price reduction was applied because of needed updates and repairs to the HVAC system. No market condition adjustments were warranted or applied. All quantitative adjustments are displayed below:


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Property Statistics: Improved Property 5 Active ListingStreet Address City State Zip Code2915 S M St Tacoma WA 98409

Submarket TacomaProperty Type Office/ WarehouseParcel No. 6550000350Assessed Value $658,600Land Area - SF 11,375Building Class Class C, Prd Cnc, AverageYear Built 1972 / 15 EffGBA 8,730Land/Bld Ratio 1.30 :1Parking Ratio 1.15/1,000Office % 37.8%Clear Hight 14'Traffic Counts 9,063

Date of Sale Active Listing List Price $825,000Days on Market 426 Price/SF (GBA) $94.50Buyer N/ASeller ANDREW W SCHELLDoc. Number N/AInstrument N/ACondition of Sale N/A

Legal Description:

Time Adjustment Building Size Condition QualityExtended List Time Similar Similar Similar

-5.0% 0.0% 0.0% 0.0%Office % Exposure Parking Ratio OtherInferior Similar Inferior Similar10.0% 0.0% 5.0% 0.0%

Gross Adjust. Factor 20.0% Net Phys. Adjust. 15.0%Time Adj. $/SF $89.78 Phys. Adj. $/SF $103.24Contact Name NumberBrandon Gates 253-722-1429Kidder Mathews

Office

Comments

SECTION 08 TOWNSHIP 20 RANGE 03 QUARTER 42 ORCHARDS ADD: ORCHARDS ADD L 9 THRU 11, N PART OF L 12 LY N OF S 30TH TOG/W VAC

Property Photo


Property Info

2.6 X 2.7

This comparable is the active listing of a office/ warehouse building located 2.6 miles West of the subject in the Tacoma submarket. At the time of sale, this property was improved with a class C, poured concrete structure, built in 1972. Top quality office, newly remodeled, additional mezzanine in warehouse and storage areas, two dock-high doors, radiant heated warehouse, secured yard, seller financing available No market condition adjustments were warranted or applied. All quantitative adjustments are displayed below:


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Property Statistics: Improved Property 6 Active ListingStreet Address City State Zip Code2612 Pacific Hwy E Fife WA 98424

Submarket FifeProperty Type Office/WarehouseParcel No. 320116002Assessed Value $906,600Land Area - SF 35,641Building Class Class D, Wd, FairYear Built 1978 / 15 EffGBA 10,595Land/Bld Ratio 3.36 :1Parking Ratio 2.17/1,000Office % 85.09%Clear Hight 10'Traffic Counts 11,470

Date of Sale Active Listing List Price $1,250,000Days on Market 461 Price/SF (GBA) $117.98Buyer N/ASeller HART & HART LLCDoc. Number N/AInstrument N/ACondition of Sale N/A

Legal Description:

Time Adjustment Building Size Condition QualityExtended List Time Similar Similar Similar

-5.0% 0.0% 0.0% 0.0%Office % Exposure Parking Ratio Other

Similar Similar Similar Similar0.0% 0.0% 0.0% 0.0%

Gross Adjust. Factor 5.0% Net Phys. Adjust. 0.0%Time Adj. $/SF $112.08 Phys. Adj. $/SF $112.08Contact Name NumberRichard Hart 253-344-1349Seller

Office

Comments


SECTION 11 TOWNSHIP 20 RANGE 03 QUARTER 21 : L 2 OF SP 82-06-22-0306 TOG/W EASE OF REC LY IN NW 11-20-03E & SW 02- 20-03E OUT OF 03-20-02-


2.6 X 2.7

This comparable is the active listing of the subject. This property was improved with a class D, wood structure, built in 1978. Per conversations with the owner, there has been some interest, but no offers. No market condition adjustments were warranted or applied. All quantitative adjustments are displayed below:


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Rental Comparables Summary & Map

Address Suite Size Office % Year Built Parking Ratio Lease Type Start Date Duration $/SF/Yr $/SF/Mo

15013 Pacific Hwy EFife, WA 98424

2,082 21.13% 1985 / 15 Eff 3.73/1,000 NNN 12/2/2015 N/A $9.00 $0.75

22105 Frank Albert Rd EFife, WA 98424

1,740 100.00% 1981 / 15 Eff 1.36/1,000 NNN 2/11/2015 N/A $15.00 $1.25

36010 20th St EFife, WA 98424

1,570 100.00% 1949 / 15 Eff 5.02/1,000 NNN 5/7/2015 N/A $8.16 $0.68


1,252 21.13% 1985 / 15 Eff 3.73/1,000 NNN 7/10/2015 N/A $13.80 $1.15

52101 Mildred St WFircrest, WA 98466

3,000 33.63% 1987 / 10 Eff 2.15/1,000Modified

Gross11/17/2014 5 Years $11.76 $0.98


3,124 47.82% 1985 / 15 Eff 3.73/1,000 NNN 12/2/2015 3-5 Years $9.00 $0.75

Sub2612 Pacific Hwy EFife, WA 98424

960-6,015 85.09% 1978 / 15 Eff 2.17/1,000 Mod Gross N/A N/A$11.97-$14.38

$1.00-$1.20


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Property Statistics: Rental Comp 1 Closed Lease

Street Address City State Zip Code5013 Pacific Hwy E Fife WA 98424

Submarket Fife

Property Type Business ParkParcel No. 0320014075

Land Area - SF 388,120Building Class Class D, Wd,Gd

Year Built 1985 / 15 EffGBA 292,180

Land/Bld Ratio 1.33 :1Parking Ratio 3.73/1,000

Office % 21.13%Clear Hight 14'

Traffic Counts

Base Rent/SF/Yr $9.00 Tenant Size/SF 2,082

Base Rent/SF/Mo $0.75 Lease Type NNNGross Monthly Rent $1,562 Commencement 12/02/15TI's None Duration N/AEscalations Annual CPI Options N.AOwner Expenses Mgmnt, Rsrvs Days on Market 117Tenant Expenses Tax, Ins, Util Lease Type DirectNNN Estimate $0.25

Expense Terms Rentable Area Condition QualityMod Gross Equiv Similar Similar Similar



Gross Adj. Factor 10.0% Net Phys. Adjust. 0.0%

Adj. Rent/SF/Yr (Blnd) $9.00 Adj. Rent/SF/Mo. (Blnd) $0.75Contact Name NumberGriffin Day 206-261-4012

OfficeNeil Walter Company

Comments

Current Annual Base Rent Lease Information


2.6 X 2.7

This comparable is the closed lease of a business park suite located 1.5 miles West of the subject in the Fife submarket. Per the listing, this comparable was a 2,082 SF space located in a Class D, Wd building, built in 1985. We were unable to contact any of the parties involved in the transaction and have relied on data from the listing to verify details regarding the transaction. Lease terms are on a NNN basis. Space contains a conference room, private offices and roll up door (12'x14') All quantitative adjustments are below:


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Street Address City State Zip Code2105 Frank Albert Rd E Fife WA 98424

Submarket Fife

Property Type Business ParkParcel No. 032011-1-043

Land Area - SF 1,422,887Building Class Class C, Cnc TU,Avg




Traffic Counts None Noted


Base Rent/SF/Mo $1.25 Lease Type NNNGross Monthly Rent $2,175 Commencement 02/11/15TI's None Duration N/AEscalations Annual CPI Options N/AOwner Expenses All other expenses Days on Market 1022Tenant Expenses Power Lease Type DirectNNN Estimate $1.92



Similar Similar Inferior Similar0.0% 0.0% 5.0% 0.0%


Adj. Rent/SF/Yr (Blnd) $16.50 Adj. Rent/SF/Mo. (Blnd) $1.38Contact Name NumberMonte Decker 253-572-6355

OfficeCBRE

Comments



2.6 X 2.7

This comparable is the closed lease of a business park suite located of the subject in the Fife submarket. Per the listing, this comparable was a 1,740 SF space located in a Class C, Cnc TU building, built in 1981. We were unable to contact any of the parties involved in the transaction and have relied on data from the listing to verify details regarding the transaction. Lease terms are on a NNN basis. All quantitative adjustments are below:


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Street Address City State Zip Code6010 20th St E Fife WA 98424

Submarket Fife

Property Type OfficeParcel No. 042007-2-093

Land Area - SF 18,731Building Class Class D, Wd,Avg






Base Rent/SF/Mo $0.68 Lease Type NNNGross Monthly Rent $1,068 Commencement 05/07/15TI's None Duration N/AEscalations Annual CPI Options N/AOwner Expenses All other expenses Days on Market 1457Tenant Expenses Power Lease Type DirectNNN Estimate $4.00





Adj. Rent/SF/Yr (Blnd) $8.16 Adj. Rent/SF/Mo. (Blnd) $0.68Contact Name NumberDebbie Anderson 253-380-3444

OfficeReal Estate Investment Service


CommentsThis comparable is the closed lease of a office suite located 1.28 miles southeast of the subject in the Fife submarket. Per the listing, this comparable was a 1,570 SF space located in a Class D, Wd building, built in 1949. We were unable to contact any of the parties involved in the transaction and have relied on data from the listing to verify details regarding the transaction. Lease terms are on a NNN basis. All quantitative adjustments are below:


2.6 X 2.7


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Submarket Fife

Property Type Business ParkParcel No. 0320014075

Land Area - SF 388,120Building Class Class D, Wd,Gd




Traffic Counts


Base Rent/SF/Mo $1.15 Lease Type NNNGross Monthly Rent $1,440 Commencement 07/10/15TI's None Duration N/AEscalations Annual CPI Options N/AOwner Expenses Mgmnt, Rsrvs Days on Market 51Tenant Expenses Tax, Ins, Util Lease Type DirectNNN Estimate N/Av







This comparable is the closed lease of a business park suite located 2.14 miles southeast of the subject in the Fife submarket. Per the listing, this comparable was a 1,252 SF space located in a Class C, Msny building, built in 1990. We were unable to contact any of the parties involved in the transaction and have relied on data from the listing to verify details regarding the transaction. Lease terms are on a NNN basis. Combined office & warehouse space available at West Valley Plaza. All quantitative adjustments are below:



2.6 X 2.7

Comments


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Street Address City State Zip Code2101 Mildred St W Fircrest WA 98466

Submarket Fircrest

Property Type Office/IndustrialParcel No. 0220112104

Land Area - SF 113,256Building Class Class C, Msny,Gd






Base Rent/SF/Mo $0.98 Lease Type Modified GrossGross Monthly Rent $2,940 Commencement 11/17/14TI's None Duration 5 YearsEscalations Annual CPI Options AvailableOwner Expenses Mgmnt, Rsrvs, Maintenance Days on Market 47Tenant Expenses Utilities Lease Type DirectNNN Estimate N/A

Expense Terms Rentable Area Condition QualitySimilar Similar Similar Similar0.0% 0.0% 0.0% 0.0%

Office % Exposure Parking Ratio OtherSimilar Similar Similar Similar0.0% 0.0% 0.0% 0.0%


Adj. Rent/SF/Yr (Blnd) $11.76 Adj. Rent/SF/Mo. (Blnd) $0.98Contact Name NumberCraig Gunn 253-353-7055

OfficeAPEX Management, LLC



2.6 X 2.7

This comparable is the closed lease of a office/industrial suite located 6.0 miles West of the subject in the Fircrest submarket. Per the listing, this comparable was a 3,000 SF space located in a Class C, Msny building, built in 1987. Notes from the contact, Craig Gunn, revealed that this lease was based on Modified Gross terms. Automotive, Industrial, Office & Warehouse. Could be used for many other purposes. Space includes approximately 2000 sqft warehouse & 1000 sqft office / showroom / lobby area. Can convert 300 sqft of the office into warehouse if necessary. All quantitative adjustments are below:

Comments


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Submarket Fife

Property Type Parcel No. 0320014075

Land Area - SF 388,120Building Class Class C, Msny,Gd






Base Rent/SF/Mo $0.75 Lease Type NNNGross Monthly Rent $2,343 Commencement 12/02/15TI's None Duration 3-5 YearsEscalations Annual CPI Options AvailableOwner Expenses Mgmnt, Rsrvs Days on Market 154Tenant Expenses Tax, Ins, Util Lease Type DirectNNN Estimate $0.25







Comments



This comparable is the closed lease of a suite located 1.5 miles West of the subject in the Fife submarket. Per the listing, this comparable was a 3,124 SF space located in a Class C, Msny building, built in 1985. We were unable to contact any of the parties involved in the transaction and have relied on data from the listing to verify details regarding the transaction. Lease terms are on a NNN basis. Building contains a large open area; 1 private office in warehouse; 1 roll-up door (12'x14') All quantitative adjustments are below:

2.6 X 2.7


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Adjusted Survey Results The rental comparisons presented within this analysis represent office and warehouse

spaces within the subject’s market area and are a reasonable basis for analyzing market rents. Following adjustments, the adjusted survey indicates a net rentable range from

$8.16/SF/YR ($0.68/SF/Mo) to $16.50/SF/YR ($1.38/SF/Mo) with an average of $11.37/SF/YR ($0.95/SF/Mo), based on Modified Gross expense terms or its equivalent.

Market Rent Conclusion

Following adjustments, the comparables are reasonably similar to the subject regarding property productivity in terms of office and warehouse space. Based on the rental comparables, we have stabilized the vacant subject space to a market rate of $14.50/SF/YR ($1.21/SF/Mo). The leased spaces appear to be within market parameters and no stabilization is required. A table outlining the stabilized subject rent roll is below:

Unit RBA $/SF/Mo $/SF/Yr Monthly Annual Terms Escl. Start End

A: Videoture, LLC (Owner) 6,015 $1.00 $11.97 $6,000 $72,000 Modified Gross N/A 3/1/13 MTMA-3: TCB 960 $1.20 $14.38 $1,150 $13,800 Modified Gross N/A 1/1/06 YTY

D&E: NW Best II 2,040 $1.10 $13.24 $2,250 $27,000 Modified Gross N/A 6/1/14 5/30/16

B: Vacant 1,580 $1.21 $14.50 $1,909 $22,910Total PGI 10,595 $1.07 $12.81 $11,309 $135,710

Vacant Spaces (Stabilized to Market Rates)

Subject Rental Analysis

Operating Expense Summary Operating expenses are the periodic expenditures necessary to maintain a property and

continue the production of revenue. These expenses are divided into three categories: fixed, which generally do not vary with occupancy and have to be paid whether the property is occupied or vacant; variable, which vary with the level of occupancy; and replacement reserve expenses. The estimates of expenses inherent in the operation of the subject property include those items reasonably required to operate and maintain the improvements over a normal period of ownership.

Lease terms for the subject property are Modified Gross terms, whereas the tenants pay

for electricity, and the owner pays all other expenses. We were not provided with any historic operating expense data. Therefore we have reconciled expenses to typical market expectations.

Other Income

This category includes income generated from a variety of sources, including parking fees, late fees, forfeited deposits, non-refundable deposits and other miscellaneous income. The subject does not and is not expected to generate any additional income.


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Vacancy & Collection Loss

This expense accounts for the time between tenants, as well as extended vacancy during depressed market conditions. It reflects the stabilized vacancy over the life of the income stream. During the life of the property, vacancy will occur from time to time and some income may not be collectable due to bad checks, etc.

Within the delineated marketplace, office and flex properties in this segment are currently

experiencing an overall vacancy rate of 8.29%. Over the survey period, vacancy rates have averaged 10.77% overall. Since 2011 2Q, vacancy rates have hovered between 8.29% and 14.46%. Vacancy rates in 2011 2Q were 14.46% and decreased to 10.73% in 2015 2Q. The prior fiscal quarter indicated an average vacancy rate of 8.62% while vacancy rates decreased to 8.29% in the current quarter. Considering the above, a reasonable market vacancy rate is anticipated at 8%, in addition to a 0.5% collection loss factor. Total vacancy and collection loss is estimated at 8.5% for the subject property.

The chart below illustrates historic vacancy rates for office and flex properties within the

delineated marketplace:

3.4 X 5.8

The chart on the following page displays the subject’s stabilized operating statement

reflecting current market conditions with typical expenses to the ownership under typical expense structuring:


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Potential Gross Rental Income NRA $/SF/Mo $/SF/Yr Monthly Annual % EGIContracted Rent/Stabilized 10,595 $1.07 $12.81 $11,309 $135,710

Other Income $/SF/Mo $/SF/Yr Monthly AnnualReimbursements $0.00 $0.00 $0 $0Other Income $0.00 $0.00 $0 $0

Total Potential Gross Income $1.07 $12.81 $11,309 $135,710

Vacancy Rate & Collection Loss 8.5% $0.09 $1.09 $961 $11,535

Effective Gross Income $0.98 $11.72 $10,348 $124,175 100.0%

Operating Expenses $/SF/Mo $/SF/Yr $/Month $/YearReal Estate Taxes $0.09 $1.11 $979 $11,744 9.5%Insurance $0.03 $0.34 $300 $3,600 2.9%Utilities (WSG) $0.02 $0.25 $217 $2,600 2.1%Maintenance & Repair $0.04 $0.47 $417 $5,000 4.0%Administration & Legal $0.00 $0.05 $42 $500 0.4%Reserves for Replacement $0.02 $0.23 $207 $2,483 2.0%Management $0.03 $0.35 $310 $3,725 3.0%

Total Expenses $0.23 $2.80 $2,471 $29,652 23.9%

$/NRA/Yr $/NRA/Yr $/Month $/Year % EGI

Net Operating Income $0.74 $8.92 $7,877 $94,522 76.1%

Stabilized Operating Income Statement


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Capitalization of Net Income Direct market comparisons for overall rates of return for similar properties in the market

were researched for this analysis. The Band of Investment and Debt Coverage Ratio methods were also developed based on data provided by Realtyrates.com. A summary of the findings is located below:

Market DataNo. Property Address Property Type Year Built SF Sale Date Adj. NOI Sales Price Adj. OAR1 2502 S 12th St, Tacoma Office 1944 4,968 11/4/2015 $33,237 $399,950 8.31%2 2714 N 21st St, Tacoma Mixed/Use 1908 4,850 10/30/2015 $40,648 $569,500 7.14%3 1301 E 72nd St, Tacoma Office 1994 30,000 10/9/2014 $393,813 $4,500,000 8.75%4 6003 S Tacoma Mall Blvd, Tac Office 1990 3,120 2/27/2014 $25,909 $417,000 6.21%5 711 S 38th St, Tacoma Office 1947 18,850 1/14/2014 $93,571 $700,000 13.37%6 6010 20th St E,Fife Office 1976 5,178 Pending Sale $70,624 $799,950 8.83%

Concluded Overall Capitalization Rate * 8.00%Published Data Average

6.59%4.53% 13.31% 9.77%4.53% 11.97% 9.07%

Concluded Overall Capitalization Rate 8.00%Band Of Investment Method {1}: Realtyrates.com-Investor Survey-Office (All Types, Average)-Q4 2015Loan Characteristics: Loan To Value Ratio 72.5% Mortgage Constant 6.69% Equity Capitalization Rate 12.39%Mortgage Component 0.725 x 0.0669 = 4.85%Equity Component 0.275 x 0.1239 = 3.41%Concluded Overall Capitalization Rate 8.25%Debt Coverage Ratio (DCR) {1}: Realtyrates.com-Investor Survey-Office (All Types, Average)-Q4 2015Loan Characteristics: Debt Coverage Ratio 1.70 Mortgage Constant 6.69% Loan To Value Ratio 72.5%Debt Coverage Ratio 1.700 Mortgage Constant x 0.066860 Loan to Value Ratio x 0.725 Concluded Overall Capitalization Rate 8.24%Summary of Conclusions

WeightMarket Data 8.00% x 90.0% = 7.20%Published Data 8.00% x 5.0% = 0.40%Band of Investment Method 8.25% x 2.5% = 0.21%Debt Coverage Ratio Method 8.24% x 2.5% = 0.21%

100.0%Concluded Capitalization Rate 8.01%Rounded 8.00%

Realty Rates - Q4 2015 - Office (Suburban)

Range

Direct Capitalization: OAR Analysis

CoStar Market Reports - Year End 2015 - Puget Sound Office <50,000SFRealty Rates - Q4 2015 - Office (All Types)

*Special note: When concluding an O.A.R for the subject, it is reasonable to consider the likelihood that the extracted market comparables did not include a line item for reserves. This could easily account for a 10 to 25 basis point downward adjustment to each OAR comparable. As such, we have adjusted each comparable NOI by 2.0% to reflect the impact from a hypothetical reserve expense.


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OAR Method of Comparison

Direct Sales comparisons provide primary market data for cap rates and are considered the most reliable indicator of the overall rate as it shows actual rates market participants are operating at. In reconciliation of the OAR comparables, the sales analyzed indicate a range of cap rates between 6.15% and 13.23%, with an average of 8.68%.

Primary consideration is given to OAR Comp 1, as it was the most recent sale. Weight was also given to OAR comparables 2 and 6, as they were recent and pending sales, and were the most similar to the subject in size and age. These comparables reported cap rates ranging from 7.06% to 8.74% with an average of 8.01%.

As such, a reasonable capitalization rate for the subject property is concluded near the middle of the market at 8.00%

Utilizing this O.A.R. and the subject's stabilized net operating income, the market value indication based on direct capitalization is displayed as follows:

Method of Value O.A.R NOI $ IndicationDirect Capitalization 8.00% $94,522 $1,181,527

Income Approach, Direct Capitalization Method


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General Assumptions & Limiting Conditions

In the appraisal process, a variety of general assumptions and limiting conditions are relied upon. The following is a description of those used in this analysis: 1. By this notice, all persons and firms reviewing, utilizing or relying on this report in any manner bind

themselves to accept these assumptions and limiting conditions. Do not use this report if you do not so accept. These conditions are a part of the appraisal report, they are a preface to any certification, definition, fact or analysis, and are intended to establish as a matter of record that the appraiser's function is to provide a present market value indication for the subject property based upon the appraiser's observations as to the subject property and real estate market. This appraisal is not an engineering, construction, legal or architectural study nor a survey. Expertise in these areas, among others, is not implied.

2. The appraisal is based on the premise that there is full compliance with all applicable federal, state

and local environmental regulations and laws unless otherwise stated in the report; further, that all applicable zoning, building, use regulations and restrictions of all types have been complied with unless otherwise stated in the report; further, it is assumed that all required licenses, consents, permits, or other legislative or administrative authority, local, state, federal and/or private entity or organization have been or can be obtained or renewed for any use considered in the value estimate.

3. The appraiser(s) have inspected as far as possible, by observation, the land and the

improvements; however, it was not possible to personally observe conditions beneath the soil or hidden structural, or other components. We have not critically inspected mechanical components within the improvements and no representations are made herein as to these matters unless specifically stated and considered in the report. The value estimate assumes that there are no such conditions that would cause a loss of value, other than those specifically cited herein.

4. The appraisal is based on the assumption that there are no hidden, unapparent, or apparent

conditions of the property site, subsoil, or structures, which would render it more or less valuable. The appraiser and firm have no responsibility for any such conditions or for any expertise and engineering to discover them.

5. No specific soil bearing tests were furnished or made as a part of this report; however, soil

stability and bearing capacity are assumed to be sufficient to permit development. 6. All dimensions and legal descriptions are assumed to be correct as supplied and/or found

through available records. Any maps, sketches, reproductions or photographs included in this report are for illustration and as an aid for visualizing the property only.

7. All information as found in data furnished or in public records is deemed reliable. If any errors are

found, the right is reserved to modify the conclusions reached. 8. This report is based on the premise that the title to the property is good and merchantable, and

that there are no liens, clouds or encumbrances against the title. No responsibility is assumed for matters that are legal in nature.

9. Any liens or encumbrances that may now exist have been disregarded, and the property has

been appraised as though free of indebtedness and as though no delinquency in payment of general taxes and special assessments exist.


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10. It is assumed that the property that is the subject of this report will be under prudent and competent ownership and management, neither inefficient nor super-efficient.

11. The distribution of the total valuation in this report between land and improvements applies only

under the existing program of utilization. The separate valuations for land and building must not be used in conjunction with any other appraisal and are invalid if so used. The values assigned to improvement shown in this report are in proportion to the contribution said improvements make to the value of the property as a whole.

12. The value premises cited in this report are considered foundational and basic to the value

opinions reported herein, and the right is hereby reserved by the appraiser to alter, revise and/or rescind any of these said value opinions should subsequent or additional data be found, or in the event the conditions are modified to any extent.

13. Possession of this report, or any portion or copy thereof, does not carry with it the right to

publication, nor may the same be used for any purpose by anyone but the client without the prior written consent and approval of the appraiser, and in any event only in its entirety.

14. Employment to make this appraisal does not require testimony in court unless mutually satisfactory

arrangements are made in advance. 15. The estimated fair market value, which is defined in the report, is subject to change with market

changes over time; value is highly related to exposure, time, promotional effort, terms, motivation, and conditions surrounding the offering. The value estimate considers the productivity and relative attractiveness of the property physically and economically in the marketplace.

16. In cases of appraisals involving the capitalization of income benefits, the estimate of fair market

value is a reflection of such benefits and the appraiser's interpretation of income yields and other factors derived from market information. Such estimates are as of the date of the estimate of value only; they are thus subject to change as the market and value is naturally dynamic.

17. Appraisal reports that contain a valuation relating to an estimate in land that is less than the whole

fee simple estate are subject to the following: "the value reported for such estates relates to a fractional interest only in the real estate involved and the value of the fractional interest plus the value of all other fractional interests may or may not equal the value of the entire fee simple estate considered as a whole".

18. Appraised values that relate to geographical portions of a large parcel or tract of real estate are

subject to the following: "the value reported for such geographical portion relates to such portion only and should not be construed as applying with equal validity to other portions of the larger parcel or tract. The value reported for such geographical portion plus the value of all other geographical portions may or may not equal the value of the entire parcel or tract considered as an entity".

19. The appraiser assumes that a purchaser is aware that (1) this appraisal on the subject property

does not serve as a warranty on the condition of the property, (2) it is the responsibility of the purchaser to examine the property carefully and to take all necessary precautions before signing a purchase contract, and (3) any estimate for repairs is a non warranted opinion of the appraiser unless otherwise stated.

20. If this appraisal is prepared in conformance with the plans and specifications provided to your

appraiser it assumes completion in a workmanlike manner. The appraiser cannot be held responsible for unforeseeable events that alter market conditions prior to completion or effective date of the opinion.


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21. Where a Discounted Cash Flow Analysis has been used it has been prepared on the basis of information and assumptions stipulated in this report. The achievement of any financial projections will be affected by fluctuating economic conditions and is dependent upon the occurrence of other future events that cannot be assured. Therefore, the actual results achieved may vary from the projections made and such variation may be material.

22. Prior to entering into an agreement to perform any assignment, an appraiser must carefully

consider the knowledge and experience that will be required to complete the assignment competently; or disclose any lack of specific knowledge or experience to the client, and take all steps necessary or appropriate to complete the assignment competently. Your appraisers have both the knowledge and experience required to complete this assignment competently.

23. Unless otherwise stated in this report, the existence of hazardous substances, including without

limitation asbestos, polychlorinated biphenyls, petroleum leakage, or agricultural chemicals, which may or may not be present on the property, or other environmental conditions, were not called to the attention of nor did the appraiser become aware of such during the appraiser's inspection. The appraiser has no knowledge of the existence of such materials on or in the property unless other wise stated. The appraiser, however, is not qualified to test such substances or conditions. The presence of such substances, such as asbestos, urea formaldehyde foam insulation, or other hazardous substances or environmental conditions, may affect the value of the property. The value estimated is predicated on the assumption that there is no such condition on or in the property or in such proximity thereto that it 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 client is urged to retain an expert in this field, if so desired.

24. Neither all nor any part of the contents of this report (especially any conclusions as to value, the

identity of the appraisers, or the firm with which they are connected, or any reference to the Appraisal Institute or the MAI designation) shall be disseminated to the public through advertising media, public relations media, news media or any other public means of communications without prior written consent and approval of the appraiser.

25. The Americans with Disabilities Act ("ADA") became effective January 26, 1992. We have 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 ADA. It is possible that a compliance survey of the property, together with a detailed analysis of the requirements of the ADA, could reveal that the property is not in compliance with one or more of the requirements of the Act. If so, this fact could have a negative effect upon the value of the property. Since we have no direct evidence relating to this issue, we did not consider possible non-compliance with the requirements of ADA in estimating the value of the property.

26. The federal government has enacted legislation, referred to as Megan’s Law, which encourages

states to disclose to the public the whereabouts of convicted child molesters within the community. These individuals may be transient and therefore the situation may change periodically. While the appraiser has no knowledge of any offenders residing nearby the subject property, the scope of this assignment did not include any investigation into this matter. The client is advised to consult with local law enforcement officials about this issue. The appraiser assumes no responsibility for any issues related to Megan’s Law.

27. There are a wide variety of detrimental conditions that can impact property values. These include,

but are not limited to: non-market motivations, future temporary disruptions, stigmas, convicted criminals who reside in the neighborhood, neighborhood nuisances, future unannounced surrounding developments, structural and engineering conditions, construction conditions, soils and geo-technical issues, environmental conditions, endangered species and natural conditions. The appraiser has inspected the subject property on a level that is consistent with the typical responsibilities of the appraisal profession; however, the appraiser does not have the expertise of


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market analysts, soils, structural or environmental engineers, scientists, specialists, urban planners and specialists in these various fields. Unless otherwise stated within the report, the appraiser assumes no responsibilities for the impact that the variety of detrimental conditions may cause.

28. The liability of Lamb Hanson Lamb Appraisal Associates, Inc., its Associate Appraisers and

employees is limited to the client only. There is no accountability, obligation, or liability to any third party. If this report is placed in the hands of anyone other than the client, the client shall makes such party aware of al limiting conditions and assumptions of the assignment and related discussions. The appraisers are in no way responsible for any costs incurred to discover or correct any deficiency in the property. In the case of limited partnerships or syndication offerings or stock offerings in real estate, the client agrees that in case of lawsuit (brought by lender, partner, or part owner in any form of ownership, tenant or any other party), any and all awards, settlements, or cost, regardless of outcome; the client will hold Lamb Hanson Lamb Appraisal Associates, Inc. and its Associate Appraisers harmless and indemnify Lamb Hanson Lamb, Appraisal Associates, Inc. in connection therewith. Acceptance of and/or use of this appraisal report by client or any third party is prima facie evidence that the user understands and agrees to these conditions.

29. Lamb Hanson Lamb Appraisal Associates, Inc. shall use ordinary care in performing all work, but

under no circumstances shall Lamb Hanson Lamb Appraisal Associates, Inc., its directors, officers, employees or agents be liable to the client for any special, incidental or consequential damages arising out of or in connection with this appraisal or the performance or nonperformance thereof, whether in contract, tort (including strict liability and negligence), or otherwise, including without limitation, loss of profits or loss of revenues, even if Lamb Hanson Lamb Appraisal Associates, Inc. has been advised of the possibility of such damages.

30. Privacy Notice: Pursuant to the Gramm-leach-Bliley Act of 1999, effective July 1, 2001, Appraisers,

along with all providers of personal financial services are now required by federal law to inform their clients of the policies of the firm with regard to the privacy of client nonpublic personal information. As professionals, we understand that your privacy is very important to you and are pleased to provide you with this information.

31. Types of Nonpublic Personal Information We Collect: In the course of performing appraisals, we

may collect what is known as "nonpublic personal information" about you. This information is used to facilitate the services that we provide to you and may include the information provided to us by you directly or received by us from others with your authorization.

32. Parties to Whom We Disclose Information: We do not disclose any nonpublic personal information

obtained in the course of our engagement with our clients to nonaffiliated third parties, except as necessary or as required by law. By way of example, a necessary disclosure would be to our employees, and in certain situations, to unrelated third party consultants who need to know that information to assist us in providing appraisal services to you. All of our employees and any third party consultants we employ are informed that any information they see as part of an appraisal assignment is to be maintained in strict confidence within the firm.

33. A disclosure required by law would be a disclosure by us that is ordered by a court of

competent jurisdiction with regard to a legal action to which you are a party. 34. Confidentiality and Security: We will retain records relating to professional services that we have

provided to you for a reasonable time so that we are better able to assist you with your needs. In order to protect your non public personal information from unauthorized access by third parties, we maintain physical, electronic and procedural safeguards that comply with our professional standards to insure the security and integrity of your information. Please feel free to call us at any time if you have any questions about the confidentiality of the information that you provide to us.


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Appraiser Qualifications & Supporting Data Addendum


120

Bryan H. Boyce

PROFESSIONAL PROFILE

Bryan Boyce has been active in Commercial Real Estate Sales and Appraisal since 2002. As an Associate A for Lamb Hanson Lamb Appraisal Associates, he specialized in Commercial Real Property, Highest and Best Use Analysis, and Special Use Properties 2002-2005. He continued appraising Commercial Real Property as an Associate Appraiser for UBI Business Services, 2005-2007. From 2004-2007 Mr. Boyce acted as an Agent at Peralez Real Estate and specialized in commercial and industrial leasing. From 2007 to 2009, he acted as an Associate Appraiser for Evergreen Appraisal Group where he focused on Residential Appraisal for Mortgage Financing, Divorce and Estate Settlement purposes.

In 2009, Bryan Boyce returned to Lamb Hanson Lamb Appraisal Associates and regularly performs appraisals on a variety of commercial properties for clients located throughout Western Washington. His experience covers all types of assignments including mixed-use, office, retail, industrial, special-use, large and small scale subdivisions, raw land, condo replacement reserve studies, insurable replacement studies, and prospective construction projects. He manages and performs complex assignments involving multiple locations and/or financial interests. His educational background and experience in valuation encompasses all major appraisal disciplines.

PROFESSIONAL DESIGNATIONS

Certified General Real Estate Appraiser, Washington License No. 1101882

WORK EXPERIENCE

2002-2005- Lamb Hanson Lamb Appraisal Associates, Inc. 2005-2007 - UBI Business Services, Associate Appraiser 2007 - Macaulay & Associates 2007-2008 - Evergreen Appraisal Group 2009-Present: Lamb Hanson Lamb Appraisal Associates, Inc.

EDUCATION

2011 University of Washington - Bachelor of Arts. Global Studies

COURSE WORK/ SEMINARS

• RES 100: Real Estate Fundamentals 04/02 • RES 180: Principals of Real Estate Appraisal 04/02 • RES 170: Real Estate Law 06/02


121

• RES 181:USPAP 06/02 • RES 183 Real Estate Appraisal Procedures 6/04 • Market Analysis & Highest and Best Use 11/06 • Current Issues in Washington Commercial Real Estate 5/06 • Legal Issues in Commercial Real Estate 11/05 • Washington Real Estate Practices 07/06 • Washington Real Estate Law 07/06 • Washington Real Estate Business Management 08/06 • Washington Real Estate Brokerage Management 08/06 • Washington Real Estate Finance 08/06 • Advanced Real Estate Marketing 08/06

PROPERTY TYPES APPRAISED

Commercial/Retail Industrial Waterfront Commercial High, Low & Flex-Tech, Including R&D Grocery Stores Mixed Use Mixed Use Gas Stations Light & Heavy Manufacturing Convenience Stores Distribution Centers Community & Neighborhood Shopping Ctrs. Warehouses Strip Retail Centers Small/Big Box Retail Residential Mixed Use-Office/Retail & Residential Apartment Complexes (71A/B & Narrative) Restaurants All types of SFR Office – Low, Mid and High Rise (trophy) High-end waterfront residential Casino /Enhanced Card Rooms Proposed Construction Special Purpose Land Cold Storage Plants Commercial/ Retail Industrial Automobile Dealerships Industrial Ice cream Factory Large Land Tracts Hotel/Motel Wetlands and Tidelands Nursing Home Residential Post Office Insurable Replacement Studies Miscellaneous Highest & Best Use Studies Feasibility & Strategic Planning Studies Condominium Reserve Studies

4025 DELRIDGE WAY SW, SUITE 140, SEATTLE, WA 98106

WWW.LAMBHANSONLAMB.COM, TELE: (206) 903-1500 FAX: (206) 903-0648

1


Patrick M. Lamb, MAI

WA State General Certified Appraiser PROFESSIONAL PROFILE

Patrick M. Lamb currently stands as President/CEO of Lamb Hanson Lamb Appraisal Associates, Inc. (LHL). This makes him the fourth consecutive generation of his family to operate a local appraisal firm, and the third consecutive generation of Appraisal Institute designated members. His father Michael B. Lamb, MAI/SRA and grandfather Berkley A. Lamb, SRA both served as past presidents of the local chapter. Mr. Lamb is a Washington State General Certified appraiser and has been providing valuation services since 2001. He holds a bachelor’s degree from the University of Washington in Business Administration. He is involved in performing a full spectrum of commercial and residential appraisal services to clients located throughout Western Washington and the Greater Pacific Northwest. In addition to providing strategic direction and service to clients, Patrick also performs technical components of the firm's valuation projects, conducts interviews, reviews appraiser’s work, composes appraisal reports and ensures compliance with latest guidelines. He manages and performs complex assignments involving multiple locations and/or financial interests. His education background and experience in valuation encompasses all major appraisal disciplines.

PROFESSIONAL DESIGNATIONS/ CERTIFICATIONS

2011: Designated Member of the Appraisal Institute (MAI) 2004: Certified General Real Estate Appraiser, Washington License No. 27011-1101646,

AWARDS

2013: Presidents Award- Seattle Chapter of the Appraisal Institute

ORGANIZATIONAL ROLES AND AFFILIATIONS

Appointed as Region 1 Candidate Guidance Liaison, AI National, 2014 Appointed as Program Chair, AI Seattle Chapter, 2014 Candidate Guidance Chair, AI Seattle Chapter, 2012-2013 LDAC Representative (Leadership Development and Advisory Council), 2013 & 2014 RMA (Risk Management Association) Young Professional Group (YP). Served as communications chair, programs chair, golf tournament chair, vice chairman, and chairman. As chairman, he acted as the liaison with the main Puget Sound RMA Chapter board.


Mr. Lamb has also served on the Rainier Rotary Board as membership chair, the Florentine HOA board, Tower 39 Board, and on LHL’s corporate board. Other affiliations include Washington State CPA’s, WSBA Young Lawyer Division, Bellevue Breakfast Roundtable, Belden Group, Community Association Institute (CAI), Financial Planning Service Group, West Seattle Chamber, the International Right of Way Association, Member RMA (Risk Management Association), Member of Association of Washington Businesses (AWB).

SPEAKING ENGAGEMENTS

2013: Small Business Administration (SBA) Seminar: Improvements appraisal engagements, and establishing better expectations of scope of work.

2012: Key Bank, Commercial Banking Argosy Cruise, General Appraisal Topics 2010: Risk Management Association (RMA), Presentation on Fundamental Market

Analysis, Recovery Prediction Techniques for Residential Housing Market, CE luncheon.

2009: Risk Management Association (RMA), Young Professionals Event: Appraisal Industry Update and Overview.

2009: Risk Management Association (RMA), Participated as Expert Guest on National Conference Call discussing current appraisal Issues, CE.

WORK EXPERIENCE

2001- Present- Lamb Hanson Lamb Appraisal Associates, Inc.

EDUCATION

2001 University of Washington - Bachelor of Arts. Business Management. 2001 University of Washington – Minor Political Science

COURSE WORK/ SEMINARS

2014 USPAP 2014 Update, McKissock, Online 2014 Appraisal Institute LDAC Conference, Washington DC 2014 Defining Micro Apartments - Development, Planning, and Financing 2014 Evaluating Post Occupancy Energy Performance on Green-Built Structures 2013 Appraisal Institute Seattle Chapter Fall Conference, Seattle, WA 2013 Appraisal Institute Seattle Chapter Candidate Advisor Course 2012 Appraisal Institute National Conference, Coronado, CA

2012 Marketability Studies: Advanced Considerations and Applications, Coronado, CA 2012 Common Errors/Misconceptions in Yellow Book Assignments, Coronado, CA 2012 Going Concern Issues in Hospitality Valuation, Coronado, CA 2012 Risk Management Association, Analyzing Business Tax Returns, Seattle, WA

2012 Appraisal Institute, Fundamentals of Separating Real, Personal Property, and Intangible Business Assets, San Francisco, CA

2011 American Bankers Association, Going Concern Appraisals: Understanding Allocation of Tangible and Intangible Assets, National Teleconference, Chicago IL.

2011 Appraisal Institute Seattle Chapter Fall Conference, Seattle, WA 2011 Appraisal Institute National Conference, Las Vegas, NV 2011 Appraising the Appraisal, Las Vegas, NV


2010 Valuation of Easement and other Divided Partial Interest, Kent WA 2010 Common Errors/Misconceptions in Yellow Book Assignments, Kent WA 2010 USPAP Update, Appraisal Institute, Seattle, WA 2010 Fall Conference, Appraisal Institute, Seattle, WA 2010 REO and Foreclosures, McKissock, On-line 2009 Business Practices & Ethics, Appraisal Institute, On-line 2009 Fall Conference, Appraisal Institute, Seattle, WA 2008 Advanced Applications, Appraisal Institute, San Diego, CA 2008 Advanced Sales and Cost, Appraisal Institute, Chicago, IL 2008 Business Practices & Ethics, Appraisal Institute, On-line 2008 Fall Conference, Appraisal Institute, Seattle, WA 2007 USPAP Update, Appraisal Institute, Seattle, WA 2007 Mixed-use Properties, Appraisal Institute, Kent, WA 2005 Advanced Income Capitalization, Appraisal Institute, Seattle, WA 2005 Technology Applications, Appraisal Institute, Seattle, WA 2004 Attacking & Defending the App/Litigation, Appraisal Institute, Tukwila, WA 2004 Highest and Best Use, Appraisal Institute, Tukwila, WA 2003 Report Writing and Valuations, Appraisal Institute, San Jose, CA 2002 Basic Income Capitalization, Appraisal Institute, Shoreline, WA 2002 Small Income properties, Seattle Central Community College, Seattle, WA 2001 Real Estate Market Analysis, Seattle Central Community College, Seattle 2001 100: Basic Appraisal Principles, Mycutt Program, Seattle, WA 2001 USPAP Parts A & B, William King & Associates, Fife, WA 2001 Essential & Listing Input NWMLS Database Research, WA Ass. of Realtors

REFERNCES Lisa Richardson Steven Kessler, CPA, ABV, CVA, MS Tax AVP/Loan Operations Supervisor Morrow, Kessler & Dowsing, PLLC Fortune Bank/HomeStreet 206- 622-8394 206-254-7285 Carol Ann Williams Patrick Irwin VP/Loan Officer Attorney at Law Commerce Bank of WA Platt Irwin Law Firm 206-292-4594 360-452-5010 Reid Wiggins Kurt Engstrom Relationship Officer, AVP Senior Review Appraiser Washington Federal Savings King County Open Space 425-453-5301 x778 206-296-7813 Aaron M. Laing, Attorney Todd W. Boysen Schwabe, Williamson & Wyatt Chief Financial Officer 206.450.0950 Columbia West Properties 425.455.5825 x250


STATE CERTIFICATE

PROPERTY TYPES APPRAISED

Lodging

• Hotel

• Motel

• Interval Ownership (timeshares)

Sports & Recreation

• Athletic Clubs

• Golf Courses

• Bowling Alleys

• Marinas

• Arenas

Consumer Services

• Convenience Stores

• Lube Centers

• Restaurants (full and quick serve)

• Shopping Malls and Lifestyle Centers

• Bank Branches

Healthcare & Senior Housing

• Hospitals

• Surgical and Imaging Centers

• Rehabilitation Centers and Skilled Nursing

Centers

• Assisted Living Facilities

• Independent Living Facilities

• Continuing Care Retirement Communities

(CCRC’s)

Other Specialized Assets

• Day Care Centers

• Educational Facilities

• Specialized Manufacturing

• Student Housing

• Group Homes

• Multi-Family (Affordable Housing)


Commercial Property Types Reporting Uses Other Uses

Office Buildings

Corporate & Industrial Parks

Public & Private Projects

Shopping Malls

Hospitals & Medical Centers

Hotels/Motels

Destination Resorts

Auto Service Stations

Auto Dealerships

Restaurants

Golf Courses

Marinas

Developable Land

Partial Entitlements

Multi-Family Projects

Retirement & Nursing Homes

Agricultural Lands

Government Buildings

Loan Underwriting

Marital Dissolution

Litigation Support

Insurance Dispute

Eminent Domain Takings

Municipal Assessment

Relocations

Foreclosures

Bankruptcy

Estates & Probate

Retrospective Appraisals

Feasibility & Land Use

Studies

Market Analysis

Portfolio Analysis

Highest & Best Use

Analysis

Cost Analysis

Ad Valorem / Tax

Appeal

Environmental Impact

Historical Landmark

Impact

Class Actions

Replacement Reserve

Studies

Studies

Residential Property Types Reporting Uses Other Uses

Single Family Homes

Green Built Homes

Two to Four Multi-Family

Dwellings

Multi-Million Dollar Homes

Waterfront & View

Condominiums

Vacant land

Complex Residential

Loan Underwriting

Marital Dissolution

Litigation Support

Insurance Dispute

Eminent Domain Takes

Municipal Assessment

Relocations

Foreclosures

Bankruptcy

Estates & Probate

Retrospective Dates

Feasibility & Land Use

Studies

Portfolio Analysis

Highest & Best Use

Cost Analysis

Ad Valorem / Tax

Appeal

Environmental Impact

Historic Landmarks

Property DetailPage 1 of 3

The data within this report is compiled by CoreLogic from public and private sources. If desired, the accuracy of the data contained herein can be independently verified by the recipient of this report with the applicable county or municipality.

Courtesy of Patrick Lamb

Generated on 11/30/2015

2612 Pacific Hwy E #A, Fife, WA 98424-1045, Pierce County

Beds

N/A

Bldg Sq Ft

7,866

Lot Sq Ft

35,641

Sale Price

$545,000

Baths

N/A

Yr Built

1978

Type

TECH IND

Sale Date

12/03/2007

Owner InformationOwner Name (LN FN): Hart & Hart LLC Tax Billing Zip: 98424Tax Billing Address: 2612 Pacific Hwy E #a Tax Billing Zip+4: 1045Tax Billing City & State: Fife, WA Owner Occupied: Yes

Location InformationZip Code: 98424 Carrier Route: C042School District Name: 417 Zoning: REGIONAL CSchool District Code: 417 Range/Township/Section/Quarter: 03E-20N-11-NW-NCensus Tract: 9400.02 Street Type: Access StdNeighborhood Code: 0000801-0000801

Tax InformationTax-ID: 032011-6-002 % Improved: 39%Parcel ID: 0320116002 Tax Area: 066Legal Description: SECTION 11 TOWNSHIP 20 RANGE 03 QUARTER 21 : L 2 OF SP 82-06-22-0306 TOG/W EASE

OF REC LY IN NW 11-20-03E & SW 02- 20-03E OUT OF 03-20-02-3-047 & 03-20-11-2-036 SEG S-0609 SH ES DC 7/12/99 MA

Assessment & Tax

Assessment Year 2014 2013 2012Assessed Value - Total $906,600 $908,000 $1,165,400Assessed Value - Land $553,400 $554,000 $711,400Assessed Value - Improved $353,200 $354,000 $454,000Market Value - Total $906,600 $908,000 $1,165,400Market Value - Land $553,400 $554,000 $711,400Market Value - Improved $353,200 $354,000 $454,000YOY Assessed Change ($) -$1,400 -$257,400YOY Assessed Change (%) -0.15% -22.09%

Total Tax Tax Year Change ($) Change (%)$15,558 2013$11,933 2014 -$3,625 -23.3%$11,744 2015 -$189 -1.59%

CharacteristicsLot Frontage: 124 Stories: 1Lot Acres: 0.8182 Total Units: 5Lot Area: 35,641 Condition: AverageLand Use: Technological Industry Quality: FairCounty Land Use: Sci Instr/Photo Opt/Watch

MfgWater Source: Type Unknown

State Land Use: Commercial Sewer: Type UnknownYear Built: 1978 Heat Type: Heat PumpEffective Year Built: 1983 Patio Type: BalconyTotal Living Sq Ft: 7,866 Patio/Deck 1 Area: 480





Gross Area: 7,866 Construction: Wood

Listing InformationMLS Listing Number: 698435 MLS List Price: $1,250,000MLS Status: Cancelled MLS Orig. List Price: $1,250,000MLS Status Change Date: 01/20/2015 MLS Listing Agent: 100998-Hikmet ManashirovMLS Listing Date: 09/22/2014 MLS Listing Broker: JOHN L. SCOTT, INC.

MLS Listing # 25098548MLS Status ExpiredMLS Listing Date 07/08/2005MLS Listing Price $1,289,000MLS Orig Price $1,395,000MLS Sold Price $0

Last Market Sale & Sales HistoryRecording Date: 12/24/2007 Auditor No: 200712240580Settle Date: 12/03/2007 Deed Type: Warranty DeedSale Price: $545,000 Owner Name (LN FN): Hart & Hart LLCPrice Per Square Feet: $69.29 Seller Name (LN FN): Hart-Guss Cheryl A

Recording Date 12/24/2007 12/24/2007 12/13/2007 06/14/2005Sale/Settlement Date 12/10/2007 12/03/2007 11/02/2007 06/08/2005 04/01/1979Sale Price $545,000 $165,200Nominal Y Y YBuyer Name Hart & Hart LLC Hart Richard Hart Richard A Hart Richard A Hart Raymond ABuyer Name 2 Hart-Guss Cherl A Hart-Guss Cheryl A

Seller Name Hart Richard Hart-Guss Cheryl A Hart Raymond A Hart Norma A Zigmond B Cole & Phillip Cole

Auditor No 200712240581 200712240580 200712130341 200506140004Hist. Document No. 4180344 4180337 4179462 4086736 490440Document Type Quit Claim Deed Warranty Deed Executor's Deed Executor's Deed Warranty Deed

Mortgage History

Mortgage Date 12/24/2007 10/18/2002Mortgage Amount $403,832 $250,000Mortgage Lender Columbia St Bk Wells Fargo BkMortgage Type Conventional Conventional





Property Map

*Lot Dimensions are Estimated

restricted appraisal report · wa state general certified appraiser certification no. 1101646 bryan...

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