July 5, 2022
Mr. Michael Sizemore
CPL Slover LLC
2442 Dupont Drive
Irvine, California 92612
Reference: 375 sf portion of Slover Avenue to be acquired via surplus property process, City of Fontana, San Bernardino
County, California.
Dear Mr. Sizemore:
In accordance with your request and authorization, this writing transmits Restricted Use Appraisal Report in accordance with Standards Rule 2-2© of the Uniform Standards of Professional Appraisal Practice (USPAP). The subject property comprises a relatively small - 375 sf - parcel of land, which consists of a former dedicated roadway easement, located contiguous to a proposed industrial project planned for development by CPL Slover LLC.
The purpose of this Restricted Use Appraisal report is to set forth the investigations and analysis leading to our opinion of the as is fee simple market value of the subject property. The date of value is July 1, 2022, which corresponds to the last date of inspection; all references to property use and description relate to the date of value. The report is dated July 5, 2022, which generally corresponds to the completion of the investigations, analysis of relevant data and the completion of this report document.
The reported analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with: the appraisal guidelines of the requirements of the Code of Professional Ethics & Standards of Professional Appraisal Practice of the Appraisal Institute, which include the Uniform Standards of Professional Appraisal Practice (USPAP). 38 61st Place
Long Beach, CA 90803
Phone: 562.881.3998
Fax: 562.434.5315
Email: [email protected]
1 Mr. Michael Sizemore
CPL Slover LLC
July 5, 2022
This report is a Restricted Use Appraisal Report in accordance with Standards Rule 2-2© of the Uniform Standards of Professional Appraisal Practice (USPAP). As such, it presents only summary discussions of the data, reasoning, analyses that were used in the appraisal process to develop the appraiser’s opinion of value. Supporting documentation concerning the data, reasoning, and analyses has been retained in the appraiser’s work files. The depth of discussion contained in this report was limited based upon the clients specific verbal and written instructions.
As a result of the studies and analyses made, we have formed the opinion that the market values, subject to the attached Limiting Conditions and Certification, are:
As Is Fee Simple Market Value
Nine Hundred Forty Dollars
($940.00)
The values represent cash or cash equivalent terms without any special or creative financing or sales concessions granted by anyone associated with a sale. The following Restricted Use Appraisal is for the exclusive use of CPL Slover LLC and its subsidiaries and/or affiliates, and the City of Fontana.
Respectfully submitted,
Steven P. Sullivan Michael Comstock, MAI
Director, Business Valuation & Real Estate Appraisals Certified General Real Estate Appraiser Auto Dealership Appraisal Group
38 61st Place
Long Beach, CA 90803
Phone: 562.881.3998
Fax: 562.434.5315
Email: [email protected]
2 CERTIFICATION
We certify that, to the best of our knowledge and belief, .... - The statements of fact contained in this report are true and correct. - The reported analyses, opinions and conclusions are limited only by the reported assumptions and limiting conditions and are my personal, impartial, and unbiased professional analyses, opinions and conclusions. - We have no present or prospective interest in the property that is the subject of this report and no personal interest with respect to the parties involved.
- We ave no bias with respect to the property that is the subject of this report or to the parties involved with this assignment.
- Our engagement in this assignment was not contingent upon developing or reporting predetermined results. - 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.
- Our analyses, opinions and conclusions were developed, and this report has been prepared, in conformity with the Uniform Standards of Professional Appraisal Practice. - Steven P. Sullivan made a personal inspection of the property that is the subject of this report. No other person provided significant professional assistance to my reported analysis and conclusions. Steven P. Sullivan is in conformity with all requirements stated within this certification. - 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 & Standards of Professional Appraisal Practice of the Appraisal Institute, which include the Uniform Standards of Professional Appraisal Practice (USPAP); Title XI of the Federal Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA) and its regulations, the Standards for the Federal Deposit Insurance Corporation (FDIC), 12 CFR Part 323; and 12 CFR Part 34, Subpart C-Appraisals, 34.42 Definitions (g); and the Office of Thrift Supervision (OTS) Federal Regulation 12 CFR, Parts 506, 563, 564 and 571. - The use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representatives.
- Steven P. Sullivan and Michael Comstock, MAI have adequate education, previously appraised many properties similar to this type of property, and is familiar with the area. Each is competent to appraise the subject property. Please see the qualifications section of this report for additional information. - We performed no appraisal services regarding the property that is the subject of this report within the three- year period immediately preceding acceptance of this assignment.
Steven P. Sullivan Michael Comstock, MAI
Director, Business Valuation & Real Estate Appraisals Certified General Real Estate Appraiser Auto Dealership Appraisal Group
3 COMPETENCY PROVISION
Steven P. Sullivan has adequate education, previously appraised many properties similar to this type of property, and is familiar with the area. As such, Steven P. Sullivan is competent to appraise the subject property. Please see the qualifications section of this report for additional information.
TYPE OF APPRAISAL REPORT
This report is a Restricted Use Appraisal Report in accordance with Standards Rule 2-2© of the Uniform Standards of Professional Appraisal Practice (USPAP). As such, it presents only summary discussions of the data, reasoning, analyses that were used in the appraisal process to develop the appraiser’s opinion of value. Supporting documentation concerning the data, reasoning, and analyses has been retained in the appraiser’s work files. The depth of discussion contained in this report was limited based upon the clients specific verbal and written instructions.
STATEMENT OF OWNERSHIP AND PROPERTY HISTORY
Title to the subject property is vested as follows:
City of Fontana
The subject property’s grant deed was acquired by the city of Fontana September 15, 1993 as instrument number 93-395647. To the best of our knowledge, the subject property has not transferred ownership during the past three years.
IDENTIFICATION OF THE PROPERTY
The subject property comprises a dedicated roadway easement which is scheduled to be abandoned by the city of Fontana. No address has been assigned to the parcel. The property is further identified within the attached Tentative Parcel Map No. 20508.
CLIENT AND INTENDED USERS
The client and intended user of this report is Mr. Michael Sizemore, CPL Slover LLC, its subsidiaries and/or affiliates, and the City of Fontana. The report is based, in part, upon documents, writings, and other information provided by the client. The depth of discussion contained herein is specific to the client’s needs and for the stated use. Use of this report by anyone other than the stated intended user and for any other use than the stated intended use, is prohibited. 4 CLIENT AND INTENDED USERS
The appraiser is unaware of any other users as specified in the engagement of this assignment.
PURPOSE OF THE APPRAISAL
The purpose of this appraisal report is to set forth the investigations and analyses leading to our opinion of the as is fee simple market value of the subject property.
FUNCTION / USE OF REPORT
For use by the Mr. Michael Size more for internal decision making purposes and the city of Fontana.
It may not be used in connection with a federally related transaction per FIRREA.
DEFINITION OF MARKET VALUE
Market value means the most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby:
1. buyer and seller are typically motivated;
2. both parties are well informed or well advised, and acting in what they consider their own best interest;
3. a reasonable time is allowed for exposure in the open market;
4. payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and
5. 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.1 1 Office of the Comptroller of the Currency under 12 CFR, Part 34, Subpart C-Appraisals, 34.42 Definitions (g). 5 DEFINITION OF MARKET VALUE AS IS
Market value as is means the value of specific ownership rights to an identified parcel of real estate as of the effective date of the appraisal; relates to what physically exists and is legally permissible and excludes all assumptions concerning hypothetical market conditions or possible rezoning.2
PROPERTY RIGHTS / INTEREST APPRAISED
The existing vacant parcel is not encumbered by lease. The property rights appraised are those of the fee simple estate.
SCOPE OF WORK
The scope of this assignment required investigation of sufficient data relative to the subject property to derive an opinion of value. The investigation undertaken in the preparation of this appraisal report included, but was not limited to, the following: The subject property was inspected to determine the locational and physical characteristics. An investigation was made of the surrounding properties to determine conformity and influences. An investigation was made at the appropriate City/County offices to determine the subject property zoning, development standards, approvals, permits, etc.
Site development plans, building plans and specifications were reviewed to determine size and quality of the existing improvements. A survey was conducted of surrounding competitive properties to obtain land sell data. The resulting data was then analyzed, conclusions were made and, utilizing applicable appraisal techniques, an opinion of market value was formed.
This report is a Restricted Use Appraisal Report in accordance with Standards Rule 2-2© of the Uniform Standards of Professional Appraisal Practice (USPAP). As such, it presents only summary discussions of the data, reasoning, analyses that were used in the appraisal process to develop the appraiser’s opinion of value. Supporting documentation concerning the data, reasoning, and analyses has been retained in the appraiser’s work files. The depth of discussion contained in this report was limited based upon the clients specific verbal and written instructions.
EFFECTIVE DATE OF VALUE
The date of value is July 1, 2022, which corresponds to the last date of inspection; all references to property use and description relate to the date of value. 2 The Dictionary of Real Estate Appraisal, 6th Edition, page 306 (2015 by the Appraisal Institute). 6 DATE OF REPORT
July 5, 2022 which generally corresponds to the completion of the investigations, analysis of relevant data and the completion of this report document.
Physical Location:
The subject property consists of a 375 sf
triangular shaped portion of Slover Avenue
which is contiguous to a 289,875 sf
industrial building project planned on the
north side of the intersection of Slover
Avenue & Banana Avenue, city of Fontana,
county of San Bernardino, California. A
satellite photo utilizing Google Pro is
located below.
7 Fontana was incorporated in 1952. The city is 36 square miles in size and has a sphere of influence of approximately 56 square miles. As a result of the construction of numerous housing tracts in the southern and northern area of the city, by 2010 Fontana’s population more than doubled from about 20 years prior.
Affordable housing is one of the main sources of Fontana’s overall growth. Because of the high cost of new homes in Los Angeles and Orange County, people began to look elsewhere for their new home purchases. This created a strong demand in the community and Fontana began planning for this boom in 1981. Fontana has eight Specific Planned communities. Each creates a separate environment of parks, recreational facilities, shopping centers, schools, public services and homes.
Ten additional Specific Planned residential communities are under development in the North Fontana area. Altogether, these residential specific plans total over 8,200 acres with over 25,000 residential units.
Four major freeways serve the city. The San Bernardino (10) and Foothill (210) freeways bisect the city in an east-west direction, while the Pomona (60) freeway is near the southern border and the Ontario (15) freeway is at the western boundary. In addition, the (215) freeway is approximately seven miles to the east.
Physical Address: Not available
Legal Description:
Assessor Parcel Number: Not available
Parcel Size: 375 sf per due diligence materials.
Topography: The site is essentially level.
Easements: Based upon inspection of the subject there does not appear to be any easements that would negatively impact the subject property. 8 Access/Off-Site
Improvements: The subject property has frontage along Slover and Banana which is proposed to be abandoned. Slover Avenue is a main thoroughfare with two lanes of traffic in each direction, plus turn lanes. The subject has frontage along the northerly line of the frontage road which experiences an average daily traffic county of approximately 15,000 average daily trips, as of 2016 (per the City of Fontana).
Zone Use Designation: The site has a land use designation of Light Industrial (I-L), a zoning of Southwest Industrial Park (SWIP) Specific Plan, and a specific plan designation of Freeway Industrial/Commercial District (FID).
Within the FID, a variety of commercial/industrial uses are permitted.
Utility Availability: All the usual and necessary public utilities are available to the subject property and serviced by the normal agencies.
Flood Zone: Flood Zone X, an area determined to be outside the 100- and 500-year floodplains, per Map No. 06071C8653J, dated 09/02/2016.
Environmental
Observations: The property appears to have no significant archeological, cultural, historical, natural, recreational or scientific value. The property is not affected by the Wetlands Act nor were any endangered species or habitats noted during the inspection. There appear to be no hazardous waste or toxic materials affecting the subject property and to the best of our knowledge, the subject property is not on any Environmental Protection Agency, State, County or Superfund List. It is possible that a tenant has stored some type of hazardous or toxic material on the site or within the building; however, this appraisal is being made under the assumption that no such materials exist. We are not experts in detecting or identifying hazardous substances or material and an expert in this field should be obtained if a more definitive study is desired.
9 Highest & Best Use: It is our opinion that the highest and best use of the subject site “As if Vacant” is to hold the land for a industrial warehouse development in conjunction with adjacent land. The subject parcel is too small and has no value as an independent stand-alone parcel.
VALUATION
Land Valuation
As part of the subject’s market land value estimate, our office researched vacant land sales involving relatively small parcels located within the immediate Fontana market area, which extends into nearby Corona, sold over the past roughly 18 months. Although numerous other transactions were reviewed, many were not included in the report because of their limited assistance in arriving at an opinion of value. The selected comparables, which were considered most pertinent in forming the opinion of value, have been summarized in the following table. 10 Obviously, the comparable sales were not identical to the subject property; therefore, adjustments were consider to adequately reflect the differences between the subject property and each sale comparable. There are ten (10) basic elements of comparison that should be considered in land comparison analysis, summarized as follows:
Elements of Comparison
1) Real property rights conveyed 6) Location
2) Financing terms 7) Physical characteristics
3) Conditions of sale 8) Economic characteristics
4) Expenditures made immediately after purchase 9) Use 5) Market conditions (Time) 10) Non-realty components of value As indicated in The Appraisal of Real Estate, Twelfth Edition, “Comparative analysis includes the consideration of both quantitative and qualitative factors. Various techniques used in quantitative adjustments and qualitative analyses are as follows.”
Quantitative Qualitative
Paired data analysis Relative comparison analysis
Grouped data analysis Ranking analysis
Secondary data analysis Personal interviews
Statistical analysis
Graphic analysis
Trend analysis
Cost analysis
Direct comparisons
Capitalization of income differences
Quantitative adjustments have been developed as either dollar or percentage amounts. Some factors that cannot be quantified are dealt with in a qualitative analysis. Although paired data analysis is a theoretically sound method, it is sometimes impractical because only a narrow sampling of sufficiently similar properties may be available and it is difficult to quantify the adjustments attributable to the other variables present. Some paired analysis has been undertaken within this appraisal. In addition to paired analysis, we have performed other analyses with analytical tools pertinent to the appraisal problem. These adjustments reflect our opinion of simulated market behavior, and are based upon cost analysis in the case of missing off-site improvements, personal interviews, trend analysis, and secondary data analysis of published information. A description of the adjustments used in this approach and the appropriate adjustments for each of the comparables has been retained in appraisal work file.
11 The unadjusted sale price per square foot of the comparables range from $1.35 to $3.30 per square foot, with an average of $2.09 per square foot. Given the preceding, a value of $2.50 per square foot appears reasonable for the subject, as summarized below, as of July 1, 2022, is as following:
Land Valuation
375 sf $2.50 psf $937.50
Indicated Fee Simple Value Rounded $940.00
As Is Fee Simple Market Value
Nine Hundred Forty Dollars
($940.00)
12 ADDENDA
STANDARD DEFINITIONS
The definitions included in this Addenda have been extracted, solely or in combination, from definitions and descriptions printed in:
< The Uniform Standards of Professional Appraisal Practice 2008 Edition (USPAP); < The Dictionary of Real Estate Appraisal, 6th Edition, Appraisal Institute, Chicago, Illinois, 2002 (Dictionary); < The Appraisal of Real Estate, Twelfth Edition, Appraisal Institute, Chicago, Illinois, 2001 (Twelfth Edition); and/or
< Marshall Valuation Service, Marshall & Swift, L. P., Los Angeles, California, 2009 (MVS).
ACCRUED DEPRECIATION
The difference between the reproduction or replacement cost of the improvements on the effective date of the appraisal and the market value of the improvements on the same date. (Dictionary)
APPRAISAL
(noun) The act or process of developing an opinion of value; an opinion of value. (adjective) Of or pertaining to appraising and related functions such as appraisal practice or appraisal services. Comment: An appraisal must be numerically expressed as a specific amount, as a range of numbers, or as a relationship (e.g., not more than, not less than) to a previous value opinion or numerical benchmark (e.g., assessed value, collateral value). (USPAP)
DEFERRED MAINTENANCE
Curable, physical deterioration that should be corrected immediately, although work has not commenced; denotes the need for immediate expenditures, but does not necessarily suggest inadequate maintenance in the past. (Dictionary)
EFFECTIVE DATE OF THE APPRAISAL
The date at which the analyses, opinions, and advice in an appraisal, review, or consulting service apply, which may or may not be the date of inspection; the date of the market conditions that provide the context for the value opinion.
Current appraisals occur when the effective date of the appraisal is contemporaneous with the date of the report.
Prospective value opinions (effective date of the appraisal subsequent to the date of the report) are intended to reflect the current expectations and perceptions along with available factual data. Retrospective value opinions are likely to apply as of a specific historic date; the opinions are intended to reflect the expectations and perceptions of market participants at the specified date, along with available factual data. Data subsequent to the effective date may be considered in estimating a retrospective value as a confirmation of trends. (Dictionary and USPAP)
ENTREPRENEURIAL PROFIT
A market-derived figure that represents the amount an entrepreneur receives for his or her contribution to a project and risk; the difference between the total cost of a property (cost of development) and its market value (property value after completion), which represents the entrepreneur’s compensation for the risk and expertise associated with development. (Dictionary)
ENTREPRENEURIAL INCENTIVE
The term “entrepreneurial incentive” has the same definition as profit, but the perspective of the use of the word “incentive” is forward-looking (expected reward), whereas the use of the word “profit” indicates a retrospective perspective of a quantifiable amount earned. Unless otherwise noted, as used in this report, the terms are synonymous.
The definition is a market-derived figure that represents the amount an entrepreneur expects to receive for his or her contribution to a project and risk. (Dictionary)
EXPOSURE TIME
The estimated length of time the property interest being appraised would have been offered on the market prior to the hypothetical consummation of a sale at market value on the effective date of the appraisal; a retrospective estimate based on an analysis of past events assuming a competitive and open market. Exposure time is always presumed to occur prior to the effective date of the appraisal. The overall concept of reasonable exposure encompasses not only adequate, sufficient and reasonable time but also adequate, sufficient and reasonable effort. Exposure time differs from the marketing period in that exposure time is assumed to precede the effective date of the appraisal. (USPAP and Dictionary)
FEE SIMPLE ESTATE
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. (Dictionary)
GROSS BUILDING AREA (GBA)
The total floor area of a building, including below-grade space but excluding unenclosed areas; measured from the exterior of the walls. (Dictionary)
GROSS LEASABLE AREA (GLA)
The total floor area designed for the occupancy and exclusive use of tenants, including basements and mezzanines, and measured from the center of partitioning to outside wall surfaces; the standard measure for shopping centers. (Dictionary)
HIGHEST AND BEST USE
The reasonably probable and legal use of vacant land or an improved property, which is physically possible, appropriately supported, financially feasible, and that results in the highest value. The four criteria the highest and best use must meet are legal permissibility, physical possibility, financial feasibility, and maximum profitability. (Dictionary)
LEASED FEE ESTATE
An ownership interest held by a landlord with the rights of use and occupancy conveyed by lease to others. The rights of the lessor (the leased fee owner) and the leased fee are specified by contract terms contained within the lease. (Dictionary)
LEASEHOLD ESTATE
The interest held by the lessee (the tenant or renter) through a lease conveying the rights of use and occupancy for a stated term under certain conditions. (Dictionary)
MARKET VALUE
The most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in this definition is 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 interests; • a reasonable time is allowed for exposure in the open market; • payment is made in terms of cash in United States 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. (USPAP, according to the Federal Register, CFR 34.42 (g))
MARKETING PERIOD
A reasonable marketing period is the period of time it might take to sell a property interest in real estate at or near the concluded market value during the period immediately following the effective date of the appraisal. A marketing period is a function of price, time, use, and anticipated market conditions. (Dictionary)
RENTABLE AREA (NRA)
The (net) rentable area is the amount of space on which rent is based; it is calculated according to local practice. (Dictionary)
REPLACEMENT COST
The estimated cost to construct, at current prices as of the effective date of the appraisal, a building with utility equivalent to the building being appraised, using modern materials and current standards, design and layout. (Dictionary and USPAP)
REPRODUCTION COST
The estimated cost to construct, at current prices as of the effective date of the appraisal, an exact duplicate or replica of the building being appraised, using the same materials, construction standards, design, layout, and quality of workmanship and embodying all the deficiencies, superadequacies, and obsolescence of the subject building. (Dictionary)
ASSUMPTIONS AND CONDITIONS
Standards Rule 2-1 of the Uniform Standards of Professional Appraisal Practice (USPAP) requires the appraiser to clearly and accurately set forth the appraisal in a manner that will not be misleading; contain sufficient information to enable the intended users of the appraisal to understand the report properly; and clearly and accurately disclose all assumptions, extraordinary assumptions, hypothetical conditions, and limiting conditions used in the assignment.
General Assumptions and Limiting Conditions
Unless specified otherwise in the text of this report, the following 18 general assumptions and limiting conditions apply.
NO. 1
The appraiser was not provided a current Policy of Title (CLTA or ALTA), which is the best method for the appraiser to determine if any easements or encumbrances exist that could negatively impact the marketability or market value of the subject property. It is recommended that the client obtain a current Policy of Title. The reported value conclusion(s) contained within this report are contingent upon a review of said title policy and the absence of any negative easements and/or encumbrances.
NO. 2
The existence of hazardous substances, including without limitation asbestos, polychlorinated biphenyl, petroleum leakage, or agricultural chemicals, which may or may not be present on the property, was 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 otherwise stated. The appraiser, however, is not qualified to test for such substances. The presence of such hazardous substances may affect the value of the property. The value opinion developed herein is predicated on the assumption that no such hazardous substances exist on or in the property or in such proximity thereto, which would cause a loss in value. No responsibility is assumed for any such hazardous substances, nor for any expertise or knowledge required to discover them.
NO. 3
The Americans with Disabilities Act (ADA) became effective January 26, 1992. The appraiser has not made a specific compliance survey and analysis of this property to determine whether or not it is in conformity with the various detailed requirements of the 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 the appraiser has no direct evidence relating to this issue, possible noncompliance with the requirements of ADA was not considered in developing an opinion of the value of the property.
NO. 4
This report does not address unforeseeable events that could alter the property and/or the market conditions reflected in the analyses, opinions and conclusions.
NO. 5
The value estimate in this appraisal report is gross, without consideration given to any encumbrance, restriction or question of title, unless otherwise specified. We assume no responsibility for matters legal in character, nor do we render any opinions as to title, which is assumed to be good and marketable. All existing liens and encumbrances have been disregarded, and the property is appraised as though free and clear, under responsible ownership and competent management. The legal description is assumed to be correct.
NO. 6
This appraisal report covers only the property described and any values or rates utilized are not to be construed as applicable to any other property, however similar the property might be. The distribution of the total value in this report between land and improvements applies only under the existing or proposed program of utilization. The separate values for land and building must not be used in connection with any other appraisal, and are invalid if so used.
NO. 7
We assume that the utilization of the land is within the boundaries or property lines and that no encroachments or trespasses exist unless specifically noted in the records and data sources utilized. We have made no survey of the property, nor has a survey been provided. All references to dimensions are based on data obtained from the public records or other sources thought reliable, but accuracy cannot be guaranteed.
NO. 8
We were not provided with a certified soil or subsoil analysis of the property. Though no adverse soil conditions were noted upon visual inspection of the property, the discovery of adverse soil conditions is beyond our area of expertise.
We, therefore, assume that there exist no soil or subsoil conditions, which would preclude or adversely affect the development of the site or render it more or less valuable. We assume no responsibility for any such conditions or for the engineering that might be required to discover these factors.
NO. 9
Any maps, sketches, reproductions or photographs included in this report are only for illustration and as an aid in visualizing the property.
NO. 10
This report contains a section including the “Sales History,” which describes the recent title history of the subject property. This should not be construed as a title search or report of title. We render no opinion as to title, which is assumed to be good and marketable.
NO. 11
It is assumed that all applicable zoning and use regulations and restrictions have been complied with, unless a nonconformity has been stated, defined and considered in the appraisal report. Required licenses, certificates of occupancy, consents or other legislative or administrative authority from any local, state or national government, private entity or organization have been or can be obtained or renewed for any use on which the value estimate contained in this report is based.
NO. 12
Market data regarding land sales, rents, and improved sales have been abstracted from public records or obtained from other sources. To the extent possible within time and resource constraints, we confirmed or verified recorded data with private sources judged to be informed and reliable. These sources are considered reliable and believed to be accurate.
However, we cannot assume responsibility for accuracy of such data. Following standard professional real estate market analysis procedures, verification with a knowledgeable individual was accepted as confirmation of public record data.
When verification was not possible, the formal, official public record data was accepted as correct. We assume that all buyers, sellers, and other participants in the transactions reported in this report communicated accurate data, were well informed and behaved prudently on the basis of the information available to them at the time of such transactions.
NO. 13
We shall not be required to give further consultation or testimony or attend court or be at any governmental hearing with reference to the subject property unless prior arrangements have been made for such employment.
NO. 14
We have not reviewed any environmental impact studies in conjunction with this appraisal assignment; therefore, no responsibility is assumed for any factors that might be disclosed as the result of such studies that could influence the opinions or values set forth in the appraisal report. In the absence of such studies, we hereby reserve the right to review, alter, revise and/or rescind this appraisal or any part thereof, based on the subsequent environmental impact studies.
NO. 15
The descriptions and estimates of the condition of the physical improvements found herein are based on approved building plans. As no engineering tests were conducted, no liability can be assumed for soundness of structural members or any other conditions not readily apparent to the untrained observer.
NO. 16
Disclosure of the contents of this report is governed by the bylaws and regulations of the Appraisal Institute. Neither all nor any part of the contents of the report or copies thereof (including conclusions as to the property value, the identity of the appraiser, professional designations, reference to any professional organizations, or the firm with which the appraiser is connected), shall be used for any purposes by anyone but the client specified in the report, professional appraisal organizations, or any authorized department, agency or instrumentality of the United States, 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 written consent and approval of the appraiser.
NO. 17
No determination has been made about the existence of any latent or claimed defection on the property. Such defects include UFFI (Urea Formaldehyde Foam Insulation), asbestos, ground water contamination, radon gas, lead-based paint, soil contamination, toxic or radioactive waste effects, geological or topographic defects, flood hazards or any other unnamed hazards. We assume no responsibility for the presence of such defects on the property.
NO. 18
We assume that acceptance of and/or use of this report constitutes acceptance of the foregoing general assumptions and limiting conditions.
Compliance With Uniform Standards of Professional Appraisal Practice (USPAP).
USPAP includes an Ethics Rule concerning conduct, management, confidentiality and record keeping; a Competency Rule; a Scope of Work Rule; a Jurisdictional Exception Rule; and ten (10) Standards. These Rules and Standards were most recently updated by the Appraisal Standards Board (ASB) of the Appraisal Foundation effective as of January 1, 2008 effective through December 31, 2009.
Standard 1 and Standard 2 governs analysis, production and certification of appraisal reports. Standards Rule 2-2 distinguishes between three different types of appraisals with separate rules for each. (a) Self-Contained Appraisal Report
(b) Summary Appraisal Report
© Restricted Use Appraisal Report
The essence of these rules is reproduced in the following pages as a reference, useful in reading this report. Please refer to ASB of the Appraisal Foundation publications for the full text of the new Rules and Standards. Also refer to the table of contents in this report to identify the sections in response to Standard 1 and Standard 2.
Standard 1: Real Property Appraisal, Development
In developing a real property appraisal, an appraiser must identify the problem to be solved, determine the scope of work necessary to solve the problem, and correctly complete research and analyses necessary to produce a credible appraisal.
Standards Rule 1-1
In developing a real property appraisal, an appraiser must: (a) be aware of, understand, and correctly employ those recognized methods and techniques that are necessary to produce a credible appraisal; (b) not commit a substantial error of omission or commission that significantly affects an appraisal; and © not render appraisal services in a careless or negligent manner, such as by making a series of errors that, although individually might not significantly affect the results of an appraisal, in the aggregate affects the credibility of those results.
Standards Rule 1-2
In developing a real property appraisal, an appraiser must: (a) identify the client and other intended users; (b) identify the intended use of the appraiser’s opinions and conclusions; © identify the type and definition of value, and, if the value opinion to be developed is market value, ascertain whether the value is to be the most probable price: (I) in terms of cash; or (ii) in terms of financial arrangements equivalent to cash; or (iii) in other precisely defined terms; and (iv) if the opinion of value is to be based on non-market financing or financing with unusual conditions or incentives, the terms of such financing must be clearly identified and the appraiser’s opinion of their contributions to or negative influence on value must be developed by analysis of relevant market data; (d) identify the effective date of the appraiser’s opinions and conclusions; (e) identify the characteristics of the property that are relevant to the type and definition of value and intended use of the appraisal, including: (I) its location and physical, legal, and economic attributes; (ii) the real property interest to be valued; (iii) any personal property, trade fixtures, or intangible items that are not real property but are included in the appraisal; (iv) any known easements, restrictions, encumbrances, leases, reservations, covenants, contracts, declarations, special assessments, ordinances, or other items of a similar nature; and (v) whether the subject property is a fractional interest, physical segment, or partial holding; (f) identify any extraordinary assumptions necessary in the assignment; (g) identify any hypothetical conditions necessary in the assignment; (h) determine the scope of work necessary to produce credible assignment results in accordance with the Scope of Work Rule.
Standards Rule 1-3
When necessary for credible assignment results in developing a market value opinion, an appraiser must: (a) identify and analyze the effect on use and value of existing land use regulations, reasonably probably modifications of such land use regulations, economic supply and demand, the physical adaptability of the real estate, and market area trends; and (b) develop an opinion of the highest and best use of the real estate.
Standards Rule 1-4
In developing a real property appraisal, an appraiser must collect, verify, and analyze all information necessary for credible assignment results. (a) When a sales comparison approach is necessary for credible assignment results, an appraiser must analyze such comparable sales data as are available to indicate a value conclusion. (b) When a cost approach is necessary for credible assignment results, an appraiser must: (I) develop an opinion of site value by an appropriate appraisal method or technique; (ii) analyze such comparable cost data as are available to estimate the cost new of the improvements (if any); and (iii) analyze such comparable data as are available to estimate the difference between the cost new and the present worth of the improvements (accrued depreciation). © When an income capitalization approach is necessary for credible assignment results, an appraiser must: (I) analyze such comparable rental data as are available and/or the potential earnings capacity of the property to estimate the gross income potential of the property; (ii) analyze such comparable operating expense data as are available to estimate the operating expenses of the property; (iii) analyze such comparable data as are available to estimate rates of capitalization and/or rates of discount; and (iv) base projections of future rent and/or income potential and expenses on reasonably clear and appropriate evidence. (d) When developing an opinion of the value of a leased fee estate or a leasehold estate, an appraiser must analyze the effect on value, if any, of the terms and conditions of the lease(s). (e) When analyzing the assemblage of the various estates or component parts of a property, an appraiser must analyze the effect on value, if any, of the assemblage. An appraiser must refrain from valuing the whole solely by adding together the individual values of the various estates or component parts. (f) When analyzing anticipated public or private improvements, located on or off the site, an appraiser must analyze the effect on value, if any, of such anticipated improvements to the extent they are reflected in market actions. (g) When personal property, trade fixtures, or intangible items are included in the appraisal, the appraiser must analyze the effect on value of such non-real property items.
Standards Rule 1-5
When the value opinion to be developed is market value, an appraiser must, if such information is available to the appraiser in the normal course of business: (a) analyze all agreements of sale, options, and listings of the subject property current as of the effective date of the appraisal; and (b) analyze all sales of the subject property that occurred within the three (3) years prior to the effective date of the appraisal.
Standards Rule 1-6
In developing a real property appraisal, an appraiser must: (a) reconcile the quality and quantity of data available and analyzed within the approaches used; and (b) reconcile the applicability or suitability of the approaches used to arrive at the value conclusion(s).
Standard 2: Real Property Appraisal, Reporting
In reporting the results of a real property appraisal, an appraiser must communicate each analysis, opinion and conclusion in a manner that is not misleading.
Standards Rule 2-1
Each written or oral real property appraisal report must: (a) clearly and accurately set forth the appraisal in a manner that will not be misleading; (b) contain sufficient information to enable the intended users of the appraisal to understand the report properly; and © clearly and accurately disclose all assumptions, extraordinary assumptions, hypothetical conditions, and limiting conditions used in the assignment.
Standards Rule 2-2
Each written real property appraisal report must be prepared under one of the following three options and prominently state which option is used: Self-Contained Appraisal Report, Summary Appraisal Report, or Restricted Use Appraisal Report.
(a) The content of a Self-Contained Appraisal Report must be consistent with the intended use of the appraisal and, at a minimum: (I) state the identity of the client and any intended users, by name or type; (ii) state the intended use of the appraisal; (iii) describe information sufficient to identify the real estate involved in the appraisal, including the physical and economic property characteristics relevant to the assignment; (iv) state the real property interest appraised; (v) state the type and definition of value and cite the source of the definition; (vi) state the effective date of the appraisal and the date of the report; (vii) describe the scope of work used to develop the appraisal; (viii) describe the information analyzed, the appraisal methods and techniques employed, and the reasoning that supports the analyses, opinions, and conclusions; exclusion of the sales comparison approach, cost approach, or income capitalization approach must be explained; (ix) state the use of the real estate existing as of the date of value and the use of the real estate reflected in the appraisal; and, when an opinion of highest and best use was developed by the appraiser, describe the support and rationale for that opinion; (x) clearly and conspicuously state all extraordinary assumptions and hypothetical conditions; and state that their use might have affected the assignment results; and (xi) include a signed certification in accordance with Standards Rule 2-3.
(b) The content of a Summary Appraisal Report must be consistent with the intended use of the appraisal and, at a minimum: (I) state the identity of the client and any intended users, by name or type; (ii) state the intended use of the appraisal; (iii) summarize information sufficient to identify the real estate involved in the appraisal, including the physical and economic property characteristics relevant to the assignment; (iv) state the real property interest appraised; (v) state the type and definition of value and cite the source of the definition; (vi) state the effective date of the appraisal and the date of the report; (vii) summarize the scope of work used to develop the appraisal; (viii) summarize the information analyzed, the appraisal methods and techniques employed, and the reasoning that supports the analyses, opinions, and conclusions; exclusion of the sales comparison approach, cost approach, or income capitalization approach must be explained; (ix) state the use of the real estate existing as of the date of value and the use of the real estate reflected in the appraisal; and, when an opinion of highest and best use was developed by the appraiser, summarize the support and rationale for that opinion; (x) clearly and conspicuously state all extraordinary assumptions and hypothetical conditions; and state that their use might have affected the assignment results; and (xi) include a signed certification in accordance with Standards Rule 2-3.
© The content of a Restricted Use Appraisal Report must be consistent with the intended use of the appraisal and, at a minimum: (I) state the identity of the client, by name or type; and state a prominent use restriction that limits use of the report to the client and warns that the appraiser’s opinions and conclusions set forth in the report may not be understood properly without additional information in the appraiser’s workfile; (ii) state the intended use of the appraisal; (iii) state information sufficient to identify the real estate involved in the appraisal, (iv) state the real property interest appraised; (v) state the type of value and cite the source of the definition; (vi) state the effective date of the appraisal and the date of the report; (vii) state the scope of work used to develop the appraisal; (viii) state the appraisal methods and techniques employed, state the value opinion(s) and conclusion(s) reached, and reference the workfile; exclusion of the sales comparison approach, cost approach, or income capitalization approach must be explained; (ix) state the use of the real estate existing as of the date of value and the use of the real estate reflected in the appraisal; and, when an opinion of highest and best use was developed by the appraiser, state that opinion; (x) clearly and conspicuously state all extraordinary assumptions and hypothetical conditions; and state that their use might have affected the assignment results; and (xi) include a signed certification in accordance with Standards Rule 2-3.
Standards Rule 2-3
Each written real property appraisal report must contain a signed certification that is similar in content to that which is summarized in this Standards Rule. A similar certification is included on page 3 of this report.
Standards Rule 2-4
To the extent that it is both possible and appropriate, an oral real property appraisal report must address the substantive matters set forth in Standards Rule 2-2(b).
PROFESSIONAL QUALIFICATIONS
PROFESSIONAL QUALIFICATIONS
PROFESSIONAL QUALIFICATIONS
EXPERIENCE:
1991-Present SULLIVAN & ASSOCIATES
Sullivan and Associates, founded in 1991 by Mr. Steven P. Sullivan, is an independent appraisal company specializing in the appraisal of all types of low- to high-rise office buildings, single-tenant industrial buildings and multi-tenant industrial parks, cold storage/food processing facilities, retail shopping centers and automotive dealerships. All work is completed by Mr. Sullivan, who has appraised approximately one thousand appraisal assignments on properties totaling billions of dollars.
All appraisals meet current requirements of the Uniform Standards of Professional Appraisal Practice (USPAP), the standards for the Federal Deposit Insurance Corporation (FDIC) and are FIRREA compliant. Mr. Sullivan is licensed/authorized to work on federally related transactions in the states of California, Nevada and Arizona. Fully proficient in most types of real estate cash flow analyses software, including ARGUS, PROJECT, OFFICE 2 and CENTER.
Auto Dealership Appraisal Group - Auto Dealership Appraisal Group was formed by Mr. Sullivan in response to his specialty in the valuation of automotive dealership facilities. Mr. Sullivan, has over twenty years of appraisal experience and in addition to his regular commercial appraisal portfolio he has appraised roughly one hundred dealership facilities in the past two years alone.
Mr. Sullivan is an approved appraiser for all known financial institutions specializing in dealership lending (Comerica, Bank of America, Citibank, US Bank, etc.) as well as all factory credit corporations, including Chrysler, GM, Nissan, Toyota, Mercedes-Benz, BMW, Porsche and VW Credit - to name a few. Mr. Sullivan’s major clients include AutoNation, Sonic Automotive, Van Tuyl, Inc., Group 1 Automotive, Wilson Automotive, Hitchcock Automotive and Keyes Automotive. 1986-1991 GRUBB & ELLIS APPRAISAL / CONSULTATION
Assistant Vice President - completed full narrative appraisals on virtually all types of commercial properties, including hotels, golf courses, office and retail properties. During this time, Mr. Sullivan completed valuation services on some of the largest hotel, resort and office properties in North America. Also responsible for client relations as well as the review and training of junior staff. 1983-1986 LANDAUER ASSOCIATES
Staff Appraiser - primary duties included full narrative appraisals on all types of commercial office, retail and industrial properties located throughout the Western United States. 1983 TARRANTELLO and ASSOCIATES
Staff Appraiser - Employed in Phoenix Arizona office, primary duties included full narrative appraisals on all types of commercial and industrial properties.
EDUCATION:
CALIFORNIA STATE COLLEGE, BAKERSFIELD
Business Administration Major
UNIVERSITY OF CALIFORNIA AT LOS ANGELES (UCLA)
Hotel & Motel Financial Analysis
Hotel/Restaurant Feasibility Studies
Real Estate Law
Restaurant Management & Financial Analysis
Appraisal Courses
USPAP
Mortgage Fraud
Construction Details & Trends
The Cost Approach
Private Appraisal Assignments
California Law & Regulations
Risky Business Practices: Minimize Liability
Sales Verification: Principles, Procedures & Case Studies Introduction to Expert Witness Testimony
Real Estate Appraisal Principles
Real Estate Appraisal Standards
Advanced Real Estate Appraisal
Income Property Appraisal (AIREA)
Urban Properties (AIREA)
Investment Analysis (AIREA)
Capitalization Theory & Technique Part 1B-A, 1B-B
Real Estate Economics
Real Estate Law
Appraisal Conferences, Seminars and Clinics Attended:
Appraisal of Special Purpose Properties
Appraisal of Vacant Land
Hotel/Motel Valuation Seminar
Apartment Valuation Seminar
Industrial Properties Seminar
Subdivision Seminar
Licensed Real Estate Broker (#01237595): Relate Classes Real Estate Economics
Property Management
Real Estate Finance
Legal Aspects of Real Estate
Office Administration