4878-8235-5091 v1
Direct No.: 213.236.2819
Our File No.: 08718.0001
[email protected]
Los Angeles – Inland Empire – Marin County – Oakland – Orange County – Palm Desert – San Diego – San Francisco – Silicon Valley – Ventura County 444 South Flower Street - Suite 2400
Los Angeles, California 90071 -2953
voice 213.236.0600 - fax 213.236.2700
www.bwslaw.com
December 5, 2023
VIA U.S. MAIL
Dhanuba Hospitality, Inc.
c/o Sumantrai Ahir
13815 S. Normandie Avenue
Gardena, CA 90249
Dhanuba Hospitality, Inc.
c/o Rainbow Inn Ownership
831 S. Beach Boulevard
Anaheim, CA 92804
Re: Government Code Section 7267.2 Offer / 831 S. Beach Boulevard
Dear Dhanuba Hospitality, Inc.:
The Anaheim Housing Authority is proposing to construct 84 affordable rental properties and 14 townhomes for sale on an area generally described as covering 821-837 S. Beach Boulevard, Anaheim, California. The property interests required for this Project are a fee simple interest in the improved parcel located at 831 S. Beach Boulevard, Anaheim, California 92804, that is more particularly identified as Orange County Accessor’s Parcel Number 079-164-13. A legal description of this parcel is attached hereto as Exhibit “A” and is hereinafter referred to as the “Property.” Our preliminary title report shows you to be the owner of the Property. If you do not believe this is so, please contact us immediately.
The Anaheim Housing Authority has obtained an appraisal of the fair-market value of the Property prepared by an independent, professional appraiser. Using a date of valuation of November 16, 2023, the total just compensation for the Property was determined by the appraiser to be $6,930,000. The basis for the computation of this amount is explained in the attached Appraisal Summary, which is presented in compliance with state laws, and has been derived from the Housing Authority’s appraisal.
Based on the foregoing, the Housing Authority hereby offers you $ 6,930,000 for its purchase of the Property, which is the full amount believed by the Housing Authority to be just compensation for the property taken and is not less than the approved appraisal of its fair market value. This amount disregards any decrease or increase in the fair market value of the Property to be acquired prior to the date of valuation caused by the public improvement for which the Property is to be acquired.
In acquiring the Property, th e Housing Authority would pay all usual fees, charges, and costs that arise out of this transaction. If this offer is acceptable to you, please so indicate to the undersigned in writing. Upon your acceptance, the Housing Authority will prepare
Dhanuba Hospitality, Inc.
December 5, 2023
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and forward to you the appropriate documents to complete the transaction. This offer is subject to the ratification of an agreement for purchase and sale by the Governing Board of the Anaheim Housing Authority (“ Board”), the Board’s adoption of a resolution of necessity, or both.
Please be advised that you are entitled to a reasonable amount, not to exceed five thousand dollars ($5,000.00), for an appraisal prepared by an independent appraiser licensed by the Office of Real Estate Appraisers.
This offer is subject to your ability to convey clear title to the Property ( i.e. property free of encumbrances or liens, other than liens for taxes and any utility encumbrances acceptable to the City). If you decide to accept this offer, it is recommended that you promptly contact any persons to whom you may be making payments under trust deeds, or other liens, and reach an agreement with them as to the amount of money, if any, they will demand in escrow to clear the Property of these liens and encumbranc es. In the event that there are liens and encumbrances, you shall either:
• Pay to holders of leases, liens and encumbrances, out of the approved compensation paid by the Anaheim Housing Authority , the amount needed to terminate leases or cancel trust deeds, mortgages, or other liens affecting the Property acquired; or
• Arrange for holders of leases, trust deeds, mortgages, or other liens to quitclaim their interest, if any, in the property to the Anaheim Housing Authority.
Similarly, it is your obligation to pay current and past due property taxes. However, you will not be required to pay recording fees, transfer taxes, or the pro rata portion of real property taxes that are allocable to any period after the passage of titl e or possession to the Anaheim Housing Authority.
Please be advised that the offer stated above also presumes the Property is free of hazardous substances (as that term is defined under California Health and Safety Code Section 33459(b)) and all other subsurface soil contamination. In the event that any facts or circumstances arise which indicate the presence of such subsurface contamination, the Anaheim Housing Authority reserves the right to rescind or modify the offer stated above at any time prior to its written acceptance, to reflect the estimated or actual costs to remediate the Property to the satisfaction and approval of all applicable regulatory agencies. Further, in the event the Anaheim Housing Authority purchases the Property and afterwards discovers such soil contamination, the Anaheim Housing Authority reserves all rights and remedies it may have against you and all prior owners to seek damages or other obligations the Anaheim Housing Authority incurs as a result of the
Dhanuba Hospitality, Inc.
December 5, 2023
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contamination, as may be permitted or authorized by any law, including, but not limited to, CERCLA (42 U.S.C. §9601 et seq.), the Hazardous Waste Control Law (California Health and Safety Code §25100 et seq.), the Porter Cologne Act (California Water Code §13000 et seq.), California Health and Safety Code §25280 et seq., §33459 et seq., and provisions of Proposition 65.
If for any reason you are not satisfied with this offer of just compensation and have relevant information regarding the value of the Property that you would like the Anaheim Housing Authority to consider, we will be happy to do so.
If the Property is acquired as anticipated, it is scheduled to be used within two years of acquisition and is therefore not available to be leased back under the provisions of California Code of Civil Procedure 1263.615.
In the event negotiations fail to result in an agreement, and Anaheim Housing Authority staff decides to pursue the Property’s acquisition through eminent domain, a hearing on the Resolution of Necessity will be held at a public meeting at Anaheim City Hall, at a date to be determined. While staff proposes to recommend the acquisition of the Property for this project, no decision to acquire can be made until the Board formally acts to approve this acquisition. Nothing in this letter is meant to pre -commit the Board or otherwise limit the options available to it. Consequently this offer, if accepted, and the acquisition of the Property are conditional upon and require the approval of the Board.
If you have any questions regarding this offer or have information regarding the value of your property, please contact me at (213) 236-2819.
Sincerely,
BURKE, WILLIAMS & SORENSEN, LLP
Alan A. Sozio
AAS
Enclosures:
--Eminent Domain Informational Pamphlet
--Appraisal Summary
cc: Ryan Hodge [email protected] (via Email)
Grace Stepter [email protected] (via Email)
Dhanuba Hospitality, Inc.
December 5, 2023
4878-8235-5091 v1
EXHIBIT A
LEGAL DESCRIPTION
The Land referred to herein below is situated in Anaheim, County of Orange, State of California and is described as follows:
THE SOUTH 96 FEET OF THE NORTH 481 FEET OF THE EAST HALF OF THE
EAST HALF OF THE SOUTHEAST QUARTER OF THE SOUTHEAST QUARTER AND THE SOUTH 96 FEET OF THE NORTH 481 FEET OF THE EAST 8 FEET OF THE
WEST HALF OF THE EAST HALF OF THE SOUTHEAST QUARTER OF THE SOUTHEAST QUARTER OF SECTION 14, IN TOWNSHIP 4 SOUTH, RANGE 11
WEST, IN THE RANCHO LOS COYOTES, AS SHOWN ON A MAP RECORDED IN BOOK 51, PAGE 11 OF MISCELLANEOUS MAPS IN THE OFFICE OF THE COUNTY RECORDER OF ORANGE COUNTY, CALIFORNIA.
EXCEPT THAT PORTION THEREOF CONVEYED TO THE STATE OF CALIFORNIA BY DEED RECORDED MARCH 5, 1951 IN BOOK 2153, PAGE 250 OF OFFICIAL RECORDS.
APN 079-164-13
LA #4896-1770-9104 v1
EMINENT DOMAIN INFORMATIONAL PAMPHLET
Introduction
California Government Code Section 7267.2 requires that a public entity provide property owners with an informational pamphlet describing the eminent domain process and the property owners’ rights under the Eminent Domain Law at the time the public entity offers to purchase the owners’ property or portions of their property. This informational pamphlet provides a general overview of the eminent domain process and answers questions commonly asked by property owners regarding their rights. This is an informational pamphlet only and is not intended to give a complete statement of all state or federal laws and regulations regarding eminent domain or to provide property owners with any form of legal advice.
Overview of the Eminent Domain Process
What is eminent domain?
Eminent domain is the acquisition of private property by a public entity for a public use. Public entities, such as the state and the federal government, counties, cities, redevelopment agencies, and school districts, may acquire real property for a public use if they meet all legal requirements, including the payment of just compensation to the property owners or into the court for the benefit of the owners. (CALIFORNIA CONSTITUTION, art. I, sec. 19). Public uses include, but are not limited to roads, sewer lines, parks, public facilities, police stations, fire stations, libraries, and schools.
A public entity may acquire any interest in real property such as a fee interest, permanent easement, slope easement, or temporary construction easement. A public entity may acquire only the real property interests that are needed for the public use. If a public entity acquires a portion of a parcel and this results in damage to the remainder parcel, the owner is entitled to be compensated for the loss of value, if any, to the remainder parcel. This is called severance damages. If the appraiser determines that the remainder parcel will be left in a size, shape or condition to be of little or no value to the owner, the public entity will offer to purchase the entire parcel. The property owners can decide whether they want the public entity to acquire such uneconomic remnants.
The law requires a public entity to make every reasonable effort to acquire property expeditiously by negotiated purchase. As discussed more fully below, there are several steps that a public entity must take prior to acquiring property by eminent domain. These legal prerequisites are meant to protect property owners and to ensure that they have an opportunity to participate in the acquisition process. These preacquisition steps include the appraisal process, offers and negotiations.
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Appraisal Process
The public entity is required to obtain a fair market value appraisal of the real property before it can acquire it by eminent domain.
Notice Informing Owners of Public Entity’s
Decision to Appraise Their Property
When a public entity identifies a real property or real property interest (“subject property”) that it may need for a proposed project, it sends to the property owners a notice informing the owners that it intends to appraise the subject property. This notice informs the owners that the public entity has decided to appraise the subject property and notifies them that an appraiser will be contacting them. An appraiser licensed by the Office of Real Estate Appraisers will contact the owners and request permission to inspect the subject property. The appraiser will also invite the property owners to accompany the appraiser on the inspection of the subject property and to provide to the appraiser any information that the owners consider relevant to the value of the property.
Permitting the inspection and accompanying the appraiser on the site inspection will allow the appraiser to fully assess the value of the subject property. If the owners do not allow the appraiser to inspect the subject property, the appraiser will inspect it from the public right of way.
Appraisal
After the appraiser inspects the property, the appraiser prepares an appraisal of the fair market value of the property.
What is fair market value?
The Eminent Domain Law defines fair market value as the highest price on the date of value that would be agreed to by a seller, being willing to sell but under no particular or urgent necessity for selling the property, and a buyer, ready, willing and able to buy but under no particular necessity for so doing, each dealing with the other with full knowledge of all the uses and purposes for which the property is reasonably adaptable and available. (Code of Civil Procedure Section 1263.320). The appraisal will take into consideration the highest and best use of the property. It can take several weeks or months for an appraisal to be completed, depending on the appraiser’s workload.
After the appraisal is completed, staff will review the appraisal to see if it complies with the requirements of the Eminent Domain Law. Staff will then recommend that the governing body of the public entity approve the appraisal and set just compensation. Just compensation must be at least the fair market value of the property as set forth in the appraisal.
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Offer
When will the property owners receive an offer to purchase the property?
The public entity will provide the owner with a written offer to purchase the property after it sets just compensation. The public entity generally sends the written offer within thirty (30) days from the date on which the public entity sets just compensation. The public entity cannot offer to purchase the property for less than the fair market value of the property as determined by the appraisal. (Government Code Section 7267.2).
What must the public entity include in the written offer to purchase the property?
Government Code Section 7267.2 requires that the offer include a written statement of, and summary of the basis for, the amount the public entity established as just compensation. The offer must also include the following:
The date of value, highest and best use, and applicable zoning of property; The principal transactions, reproduction or replacement cost analysis, or capitalization analysis, supporting the determination of value; and Where appropriate, a separate statement of the just compensation for the real property acquired and for damages to the remainder, including the calculations and narrative explanation supporting the compensation and any offsetting benefits.
If the property is owner-occupied residential property and contains no more than four residential units, the owners are entitled to review a copy of the appraisal.
Negotiations
The public entity will negotiate with the property owners for the sale of the property after it sends the offer letter
Do the property owners have the right to obtain their own appraisal of the property?
Yes. Property owners have always had the right to obtain their own appraisal of their real property. As of January 1, 2007, however, the public entity must offer to pay the property owners’ reasonable costs, up to $5,000.00, for an independent appraisal of their property. The law requires that an appraiser licensed by the Office of Real Estate Appraisers prepare the independent appraisal. The public entity will inform the owners Eminent Domain Informational Pamphlet
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of their rights to be reimbursed for these appraisal costs at the time it sends the offer letter.
Are the property owners required to accept the public entity’s offer to purchase the property?
No. The property owners are encouraged to contact the public entity to negotiate the sale of the property. The owners can negotiate the amount they believe to be the fair market value of the property and the terms and conditions of the offer.
Are there any advantages to selling the property to a public entity?
Yes. The property owner will receive at least the fair market value of the property and will not be responsible for real estate commissions, title fees, title insurance, escrow fees, closing costs, and other fees and costs. Some acquisitions by public entities in lieu of condemnation may result in tax benefits to the property owners. The Internal Revenue Service will look at specific criteria to determine whether the acquisition by the public entity qualifies for tax benefits. Accordingly, property owners are encouraged to discuss any such tax benefits with their tax advisors.
Negotiated Acquisition
If a negotiated agreement for the sale of the property is reached, the public entity will prepare a purchase and sale agreement. In such cases, the conveyance of the property is handled through an escrow.
Resolution of Necessity
If the public entity and the property owners do not reach an agreement for the sale of the property, the public entity can hold a hearing to determine whether it will acquire the real property by eminent domain.
Notice of Hearing on Resolution of Necessity
If the public entity has determined that it is necessary to consider the acquisition of the real property by eminent domain, it will send a written notice to the property owners informing them of the date, time and location of the public entity’s hearing at which it will consider the adoption of a resolution of necessity. (Code of Civil Procedure Section 1245.235). The notice informs the property owners of their right to be heard at this hearing and of their right to present evidence and to preserve their objections to the public entity’s right to take the property.
The Eminent Domain Law requires that a public entity make all of the following findings pursuant to Code of Civil Procedure Section 1245.230 to adopt a resolution of necessity authorizing the public entity to acquire the property by eminent domain:
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That the public interest and necessity require the project; That the project is planned and located in the manner that will be most compatible with the greatest public good and the least private injury; That the subject property is necessary for the project; and That either the offer required by Section 7267.2 of the Government Code has been made to the owner or owners of record, or the offer has not been made because the owner cannot be located with reasonable diligence.
A public entity may adopt a resolution of necessity only after the governing body has given each person whose property is to be acquired by eminent domain and whose name and address appears on the last equalized assessment roll notice and a reasonable opportunity to appear and be heard on the above matters.
The governing body of the public entity will consider all written and oral evidence before it at the hearing, including any objections to the adoption of the resolution of necessity. The public entity can adopt a resolution of necessity authorizing the acquisition of property by eminent domain if at least two-thirds of the all of the members of the governing body vote to adopt the resolution. If the governing body consists of five members, the adoption of a resolution of necessity requires at least four out of five affirmative votes.
Eminent Domain Proceeding
The resolution of necessity is the document that authorizes the public entity’s attorneys to commence an eminent domain proceeding. Accordingly, if the governing body of the public entity adopts a resolution of necessity, its attorneys will prepare a complaint in eminent domain and related pleadings to acquire the property by eminent domain. Generally, the complaint in eminent domain will name as defendants any parties that have a recorded interest in the parcel, including the record owners, tenants, easement holders whose interests may be impacted by the acquisition of the property or beneficiaries under deeds of trust. The public entity will serve the property owners and other named defendants with a copy of the summons, complaint and related documents filed with the court. The defendants served with the summons and complaint have thirty (30) days from the date that they are served with the summons and complaint to file an answer or responsive pleading with the court. (Code of Civil Procedure Section 412.20).
Property owners should consider retaining an attorney with experience in eminent domain proceedings to represent them in such proceedings. The parties can continue to negotiate after the eminent domain proceeding is filed.
Orders for Prejudgment Possession and Deposit of Probable Compensation
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Can the public entity take possession of the property before trial? A public entity may request an order from the court for early possession of the property. This is called an order for prejudgment possession.
Deposit of Probable Compensation
To obtain an order for prejudgment possession, the public entity must show that it is entitled to acquire the property by eminent domain and that it has deposited with the court for deposit into the county treasury or directly with the State Treasury the amount of probable compensation for the real property. The public entity must submit a summary of the basis for the appraisal when it applies to deposit the amount of probable compensation with the court. The date on which the public entity deposits the probable amount of compensation is generally the date of value in the proceeding. This means that the appraisers for the public entity and property owners will determine the fair market value of the real property in the eminent domain proceeding as of the date of value.
Objection to Motion for an Order for Possession
Property owners have the right to oppose a public entity’s motion for an order for prejudgment possession. The public entity’s motion for an order for prejudgment possession notifies property owners that they have the right to oppose the motion and that they must serve the public entity and file with the court the opposition to the motion within thirty (30) days from the date on which the property owner was served with the motion. If the property owners’ opposition asserts a hardship, it has to be supported by a declaration signed under penalty of perjury stating facts supporting the hardship. The public entity can file a reply to the opposition not less than fifteen (15) days before the hearing. At the hearing, if the motion is opposed, the court may enter an order for possession of the property after considering the relevant facts and any opposition if it finds each of the following:
The public entity is entitled to take the property by eminent domain; The public entity has deposited the amount of probable compensation pursuant to Code of Civil Procedure Section 1255.010 et seq.; There is an overriding need for the public entity to possess the property prior to the issuance of final judgment in the case and the public entity will suffer a substantial hardship if the application for possession is denied or limited; and
The hardship that the public entity will suffer if possession is denied or limited outweighs any hardship on the defendant or occupant that would be caused by the granting of the order for possession. (Code of Civil Procedure Section 1255.410).
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Withdrawal of Deposit of Probable Compensation
Property owners can apply to withdraw the funds on deposit with the court.
Property owners must serve a copy of their application to withdraw the funds on the public entity. The court cannot order the disbursement of the funds on deposit until twenty (20) days after the date on which the application for withdrawal was served on the public entity. The public entity may file an objection to the withdrawal if, for example, other parties to the proceeding are known or believed to have an interest in the just compensation. Property owners waive any challenges to the public entity’s right to take if they withdraw the funds on deposit with the court. Property owners do not, however, waive their claims for greater compensation for the property if they withdraw the funds on deposit.
Exchange of Valuation Data
The parties can agree to exchange statements of valuation data containing the information required by Code of Civil Procedure Section 1258.260 or appraisal reports containing that information on a mutually-agreed to date. If the parties do not mutually agree to exchange valuation data on a specific date, the date of exchange is ninety (90) days before the commencement of trial on the issue of just compensation. This gives the parties the opportunity to analyze the fair market value opinions of the other party’s expert and sales data or appraisal methodology relied on by the other party’s expert. The parties will generally take the depositions of the other party’s appraiser. After the parties exchange valuation data, the parties often negotiate a settlement at a mediation, during informal settlement negotiations, or during a mandatory settlement conference.
Trial
In eminent domain proceedings, the judge decides legal issues, such as the right to take, the issue of what constitutes a larger parcel, and the issue of entitlement to certain damages. Property owners are entitled to have the jury determine the amount of just compensation. The parties resolve the majority of eminent domain proceedings prior to trial.
Vacating the Property
When will property owners and tenants be required to move from the property?
If the public entity and property owners reach a negotiated settlement, the public entity will attempt to determine a mutually agreeable date for owners to move. If the property is condemned, the public entity cannot require the owners to move without a court order. If the subject property is lawfully occupied, the public entity must serve the property owners with a motion for an order for prejudgment possession ninety (90) days before the court hearing. Orders for prejudgment possession are discussed more fully Eminent Domain Informational Pamphlet
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above. If the order for prejudgment possession is granted, the public entity must serve the property owners with the order thirty (30) days before it intends to take possession of the subject property. If the subject property is unoccupied, the public entity must serve the property owners with a motion for an order for possession sixty (60) days before the court hearing. If the order for prejudgment possession is granted, the public entity must serve the property owners with the order for prejudgment possession ten days before it intends to take possession of the subject property.
Relocation Assistance
Property owners and occupants of property (tenants) that are displaced as the result of a public project, may be entitled to relocation assistance and benefits under the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 (42 U.S.C. 4601 et seq.), if applicable, or under Title 1, Division 7, Chapter 1 of the Government Code of the State of California (Section 7260 et seq.) and the Relocation Assistance and Real Property Acquisition Guidelines (Chapter 6 of Title 25 of the California Code of Regulations). Benefits may include moving expenses, re- establishment costs, rent differential payments, or interest differential payments. A relocation consultant, hired by the public entity, will meet with the property owners and or tenants to determine their eligibility and potential benefits.
Loss of Business Goodwill
Goodwill is the benefit that accrues to a business as a result of its location, reputation, skill and other factors that contribute to a business maintaining and acquiring patrons. Public entities are required to compensate owners of a business conducted on the property, or on the remainder parcel, if the business owners prove all of the following:
The loss is caused by the taking of the property or the injury to the remainder;
The loss cannot reasonably be prevented by taking steps and adopting procedures that a reasonably prudent person would take and adopt in preserving the goodwill;
Compensation for the loss will not be included in payments under Section 7262 of the Government Code.
Compensation for the loss will not duplicated in the compensation otherwise awarded to the owner.
Business owners must raise their claim for loss of business goodwill in their answer to the public entity’s complaint. The public entity will engage a business valuation expert to determine the value of the goodwill of the business in the eminent Eminent Domain Informational Pamphlet
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domain proceeding. Business owners also generally engage a business valuation expert in the eminent domain proceeding.
Statement of and Summary of Basis for Appraisal and Amount Established as Just Compensation
Statement of and Summary of the Basis for Appraisal
Code of Civil Procedure § 1255.010(b)
The Amount Established as Just Compensation
Government Code § 7267.2(a)
The following is a Statement of and Summary of the Basis for the Appraisal and the Amount That The Anaheim Housing Authority (agency) Established as Just Compensation required by the California Eminent Domain Law. The appraisal on which this summ ary is based was made in connection with establishing the amount of compensation as required by Code of Civil Procedure section 1255.010. The appraisal on which this summary is based was made in accordance with accepted appraisal principles, consistent with California valuation law. A statement and summary describes the basis for the appraisal from which the A gency established compensation. There follows the Statement of and Summary of the Basis for the Appraisal and the Amount Established as Just Compensation:
Appraisal Summary
Fair market value of the parcel (s) proposed for acquisition $___6,930,000__ (where applicable, set out separate valuations for each parcel) Summary of Basis
(A) Property Identification
Owner of Record Dhanuba Hospitality, Inc.
Assessor's Parcel Number (APN) 079-164-13
Property Address 831 S. Beach Blvd., Anaheim, CA 92804
Recorded Date of Acquisition January 10, 2014
Purchase price, if known: $ 2,750,000
Date of Valuation: November 16, 2023
General Character of Interest Being Appraised (e.g., fee, easement, etc.):
The Proposed Acquisition. The agency seeks to acquire the entire property in fee simple estate ownership.
Size of Proposed Acquisition 42 room existing hotel, consisting of 15,959 SF of building improvements and .66-acre parcel
Improvements Pertaining to Realty
Topography Level parcel at street grade
Shape Rectangular parcel
Access Curb cut on S. Beach Blvd.
Utilities All public utilities are to the site
Environmental Conditions (whether or not valuation is premised on the assumption that property is free and clear of contamination):
Value made under assumption the subject is free of environmental contamination.
Date of Valuation November 16, 2023
Highest and Best Use . Highest and best use is defined as the reasonably probable and legal use of land that is legally permissible, physically possible, and financially feasible that results in the highest value. Highest and best use analysis is used in the appraisal process to identify comparable properties and, where applicable, to determine whether the existing improvements should be retained, renovated, or demolished.
Highest and Best Use: As Vacant: Multifamily; As Improved: Continued hotel use Present Use
If different from Highest and Best Use
Applicable Zoning SP 2017-1
The Principal Transaction Used in the Sales Comparison Approach The sales comparison approach is used to derive a value indication by comparing the property being apprised to similar properties that have sold recently, applying appropriate units of comparison, and making adjustments to the comparables based on the elements of comparison. This is the preferred method of valuation when comparables sales data are available. A number of sales were examined. However, the principal transactions relied upon were:
Summary of Comparable Improved Sales
No. Name/Address
Sale
Date;
S
tatus
Yr. Blt.;
# Stories;
% Occ.
# Rooms;
SF
Effective Sale
Price
$/Room;
$/SF
NOI/Room;
NOI/SF;
Exp. Ratio
Cap Rate;
RRM
1 Starlight Inn Motel Nov-23 1991 25 $2, 990,000 $119,600 – – 4949 Valley Blvd. Closed 3 9,558 $312. 83 – –
Los Angeles – –
Los Angeles County
CA
2 Hospitality Inn Sep-23 1973 53 $7, 900,000 $149,057 – – 7900 Garden Grove Blvd. Closed 2 13,630 $579. 60 – –
Garden Grove – –
Orange County
CA
3 Anaheim Express Inn Mar-23 1975 63 $10,450,000 $165, 873 $15,259 9.19% 620 W. Orangewood Ave Closed 2 25,072 $416. 80 $38.34 – Anaheim – –
Orange County
CA
4 Tampico Motel Apr-23 1969 36 $5, 300,000 $147,222 – – 120 S. State College Blvd. Closed 2 12,295 $431. 07 – – Anaheim – –
Orange County
CA
5 Royalty Inn Jul-22 1984 61 $11, 300,000 $185,246 – –
8730 Artesia Blvd. Closed 2 23,781 $475. 17 – –
Bellflower – –
Los Angeles County
CA
Subject 1984 42 $10,558
Rainbow Inn 2 15,959 $27.78
Anaheim, CA – 51%
Comments: Sale of a 25-room independent motel for $2,990,000, or $119,600 per room. Information was obtained via CoStar as parties to the transaction were unavailable for comment. The sale appears to be an off-market transaction as no list price was disclosed. It is assumed the property was in average condition at the time of sale.
Comments: Sale of a 63-room, independent motel for $10,450,000, or $165,873 per room. The two-story, exterior corridor motel was in average condition at the time of sale. According to CoStar, the TTM February 2023 NOI was reported at $961,342 which equates to a 9.19% cap rate.
Comments: Sale of an independent 2-story, exterior corridor motel for $7,900,000, or $149,057 per room. According to CoStar, the property was vacant at the time of sale and the property was purchased for conversion to transitional housing for the homeless. CoStar also noted that the closing price of this transaction was impacted by both a 1031 Exchange (downleg seller) and deferred maintenance sale conditions.
Comments: Sale of a 36-room independent motel. Property was acquired for adaptive re-use as homeless housing. Property was in average condition and has below average access/exposure. As of the date of sale, the rooms did not feature kitchenettes.
Information was obtained via a TheRealDeal.com article as parties to the transaction were unavailable to comment due to confidentiality agreements.
Comments: Sale of a 61-room independent motel known as "Royalty Inn" for $11,175,000, or $183,197 per key. The property was in average condition condition at the time sale. The purchase price was not based on a cap rate or GRM as the buyer planned to flag the hotel. According to the buyer, the property was converted to a Red Roof Inn following the acquisition at an estimated costs of $125,000 for an effective purchase price of $11,300,000, or $185,246 per room.
In addition to the sales comparison approach, the income approach (capitalization analysis) was used.
Value Indication by Sales Comparison
Indicated Value per Room $165,000
Subject Rooms 42
Indicated Value $6,930,000
Rounded $6,930,000
The income approach (capitalization analysis). The income approach is a set of procedures through which a value indication for income -producing property is derived.
The income approach converts the anticipated net income (rent) into an indication of property value. The income approach is based on a consideration of comparable rents and of capitalization rates. The income approach analysis is summarized as follows:
Dated ___November 28 , 2023______________________________ The above is a summary of my appraisal prepared at the request of to be used by Agency to comply with Code of Civil Procedure section 1255.010. My appraisal that is the basis for this summary was made in accordance with accepted appraisal principles, consi stent with California Valuation Law.
By__________________________
(signature of appraiser)