It has been a pleasure to assist you in this assignment. If you have any questions concerning the analysis, or if BAAR can be of further service, please do not hesitate to contact us.
Respectfully Submitted,
BAAR REAL TY ADVISORS
Adam J. Hardej, Jr., MAI
President & Chief Appraiser
CA Certified General Appraiser
Lic#AG018716
/
Luis R. Lorca
Regional Manager & Senior Appraiser
CA Certified General Appraiser
Lic#AG030345
CERTIFICATION OF THE APPRAISER
CERTIFICATION OF THE APPRAISER
We certify that to the best of our knowledge and belief:
1. The statements of fact contained in this report are true and correct.
2. The reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions and are our personal, unbiased professional analyses, opinions, and conclusions.
3. We have no present or prospective interest in the property that is the subject of this report and have no personal interest or bias with respect to the parties involved.
4. Our compensation is not contingent upon the reporting of a predetermined value or direction in value that favors the cause of the client, the amount of the value estimate, the attainment of a stipulated result, or the occurrence of a subsequent event, such as the approval of a loan.
5. Our analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the Uniform Standards of Professional Appraisal Practice of The Appraisal Foundation and the requirements of the Code of Professional Ethics and the Standards of Professional Appraisal Practice of the Appraisal Institute. In addition , this report conforms to the requirements of the Financial Institution Reform, Recovery, and Enforcement Act (FIRREA).
6. The use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representatives.
7. Adam J. Hardej Jr., has completed the requirements of the continuing education program of the Appraisal Institute.
8. Luis Lorca made an inspection of the property that is the subject of this report. Adam J. Hardej Jr. has not inspected the subject.
9. No one else has provided professional assistance to the persons signing this report.
10. Adam J. Hardej, Jr. and Luis Lorca have extensive experience in the appraisal/review of similar property types.
11. We have performed professional services, as an appraiser, regarding the property that is the subject of this report within the three-year period immediately preceding acceptance of this assignment.
Adam J. Hardej, Jr., MAI
President & Chief Appraiser
AG018716
iii
/
Luis R. Lorca
Regional Manager & Senior Appraiser
AG030345
Location:
Parcel Number:
Property Description:
Highest and Best Use
TABLE OF CONTENTS
SUMMARY OF SALIENT FACTS
Proposed 9.99 Acre Park, Part of the Planned West Creek Village located at SW corner of Martin Luther King Boulevard @ E Church Avenue Fresno (City and County), CA 93706
Not currently assigned or subdivided
The subject is part of a large proposed development know as West Creek Village. The subject will represent a 9.99 acre park that will be contained in the middle of the development, which will consist of single and multi-family development, commercial development, and the southwestern campus of
Fresno Community College.
As Though Vacant: Mixed development as currently proposed including the subject parkland acreage.
As Improved: N/Ap.
Property Rights Appraised: Fee Simple
Date of Value: August 1, 2018 - As Is
Land Area
Gross:
Exposure/Marketing Time:
Valuation (As Is)
9.99 Acres or 435,164 SF
12 months or less.
Income Approach: Not applicable
Sales Comparison Approach: $2,000,000
Cost Approach: Not applicable
Final Value
Conclusion: $2,000,000 -- As Is Value
iii
TABLE OF CONTENTS
TABLE OF CONTENTS
CERTIFICATION OF THE APPRAISER ................................................... ........ ........ ................. .. . iii SUMMARY OF SALIENT FACTS .......................................................................... ............. ....... ... iii TABLE OF CONTENTS .......................................................... .................................................... . iv INTRODUCTION ................................................ ............. ................. ....................................... ..... 1 AREA ANALYSIS ..... ......... ......... ............. ............................. ......................... ...... .......................... 6 SITE ANALYSIS ........................................................... ................ Error! Bookmark not defined.
ZONING ANALYSIS ............ ...................................................... ................................................. 28 TAX AND ASSESSMENT DATA ........................... ................. .. ........ ............... ........................... 29 HIGHEST AND BEST USE .......................................................... ............ ........ ........................... 30 APPRAISAL METHODOLOGY ................. ................................................. ......... ...... .. .. ..... .... ..... 32 SALES COMPARISON APPROACH ..... ...... ...... ....... ... .... ............. .............................................. 41 RECONCILIATION OF VALUE ......................................... ............ ......................... ..................... 53 LAND VALUE ..... .................................................. ............ ....................................... .................... 54
ADDENDA
Assumptions and Limiting Conditions
Specific Assumptions and Limiting Conditions
Appraiser Qualifications / License
iv
INTRODUCTION
PROPERTY IDENTIFICATION
INTRODUCTION
The subject is located at the SW corner of Martin Luther King Boulevard @ E Church Avenue.
Fresno (City and County), CA 93706. The subject is part of a large proposed development know as West Creek Village. The subject will represent a 9.99 acre park that will be contained in the middle of the development, which will consist of single and multi-family development, commercial development, and the western campus of Fresno Community College. The subject parcel does not yet exist and does not currently have an assessor's parcel number.
The subject will be part of the West Creek Village development that will include the following area.
A. The Town Center. A pedestrian-friendly, transit-oriented, mixed-use center located at the southeast corner of the site near Jensen Avenue and Martin Luther King, Jr. Boulevard. The Town Center provides a lively residential, retail, and restaurant mix, and is proposed in two parts: one centered on a conventional car accessed grocery store, and the other on a walkable "Main Street." B. Neighborhood West. Located west of Central Park, this neighborhood is built around a series of greens. It is composed primarily of single-family houses with multi-family housing facing Central Park. Neighborhood West also hosts an elementary school at the corner of Jensen Avenue and Knight Avenue.
C. Neighborhood East. Located east of Central Park, this neighborhood provides multifamily housing along MLK Jr. Boulevard and the perimeter of Central Park. The middle portion of these blocks accommodate rosewalks (single-family houses built along both sides of a common green).
At the corner of Church Avenue and MLK, Jr. Boulevard is a Commercial Center, which provides neighborhood-serving retail and services for Southwest Fresno residents.
D. The Campus. Located along the northern edge of the site is the State Center Community College District's (SCCCD) proposed Southwest Fresno campus. Campus buildings are built around a series of quadrangles with parking located behind buildings.
E. Central Park (Subject). This is a large community park located at the center of West Creek Village that accommodates a variety of passive and active uses, ranging from multi-purpose sports courts, to splash plazas, to open fields, to picnic tables and shelters.
The following map details the zones indicated above.
1 INTRODUCTION
j
l
i
A significant component to the proposed development is the funding provided to the State Center Community College District, who will develop the expanded Fresno Community College West Extension on the site. On January 29, 2018, the California Strategic Growth Council (CSGC) unanimously approved a $70 million competitive grant to improve the City of Fresno through community-led development and infrastructure projects. Included in this amount is $16.9 million allocated to onsite infrastructure associated with a proposed satellite college campus that will be constructed on the subject property. This would augment a $40 million commitment from the State Center Community College District to construct the campus. The resulting $56.9 million will be used to develop the infrastructure of the overall development along with the campus. These fund have a significant contributory value to the subject's pending parcels as the off-site will be constructed at a cost to the SCCCD and not the subject or any other owner. In addition, the City of Fresno has committed to spending $11.7 million to improve the surrounding street, primarily Church Street, MLK Jr. Blvd. and Jensen Avenue. Improvements include street widening, curbs, gutters, water, sewer, and electrical improvements to support the West Creek Village development.
OWNERSHIP AND PROPERTY HISTORY
The subject parcel is proposed and does not yet exist. The parcel is part of the larger development noted above. The proposed development will be formed from the 13 parcels detailed in the table below. As can be seen, the parcels are vested to varying entities. 2 INTRODUCTION
LARGER LAND AREA DETAIL
# Location Owner APN Acreage Sq. Ft. Sale Date Price
1 2423 5 Walnut Avenue State Ctr Cmnty Clg District 479-050-01 10.23 445,619 Feb-18 $1,351,000 2 E Church Avenue State Ctr Cmnty Clg District 479-050-02 20.00 871,200 Aug-14 $3,515,500 3 2458 5 MLK Jt Blvd State Ctr Cmnty Clg District 479-050-03 39.08 1,702,350 Aug-14 Inc. Parcel 2 6 24615 Walnut Avenue State Ctr Cmnty Clg District 479-050-06 1.64 71,438 Feb-18 Inc. Paree I 1 7 E Church Ave@ MLK State Ctr Cmnty Clg District 479-050-07 1.42 61,659 Feb-18 Inc. Parcel 1 8 Jensen Avenue 2500 MLK LLC 479-06D-02 9.73 423,839 May-17 $2,500,000 9 2540 S MLK Jr Blvd 2500MLK LLC 479-050-03 9.50 413,820 May-17 Incl Parcel 8 10 2588 S MLK Jr Blvd Cam Vong, et al 479-050-08 2.17 94,500 N/Av. *** 11 831 E Jensen Ave Cam Vong, et al 479-050-09 6.97 303,613 N/Av. *** 12 E Jensen Avenue 2500 MLK LLC 479-050-10 9.25 402,930 May-17 Inc Parcel 1 13 571 E Jensen Avenue Cam Vong, et al 479-050-11 19.25 838,530 N/Av. *** Totals 129.24 5,629,498
The subject's proposed parcel will contain 9.99 acres and will be donated by 2500 MLK LLC to the State Center Community College District that is an existing owner and will develop the proposed campus.
There have been no other prior transfers of the subject in the prior three years. The subject has not been otherwise been listed for sale in the prior 36 months per review of Costar, Loopnet, and MLS.
DATES OF INSPECTION AND VALUATION
The site was last inspected on August 1, 2018, the date of the as is value is the date of inspection.
LEGAL DESCRIPTION
The legal description can be found in the Preliminary Report, a copy of which was not provided for review.
PURPOSE OF THE APPRAISAL
The purpose of this appraisal is to estimate the market value of the fee simple interest in the subject property, in "as proposed" condition . Market value is defined as follows:
Market value is one of the central concepts of the appraisal practice. Market value is differentiated from other types of value in that it is created by the collective patterns of the market. 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 are the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby:
1. Buyer and seller are typically motivated;
2. Both parties are well informed or well advised, and acting in what they consider their own best interests;
3. A reasonable time is allowed for exposure in the open market; 3 INTRODUCTION
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
INTENDED USE OF REPORT
This appraisal is to determine land value for purposes of a land sale and gift from 2500 MLK to the City of Fresno.
INTENDED USERS OF REPORT
This appraisal is intended for exclusive use by 2500 MLK LLC and the City of Fresno. Use of this appraisal by others is prohibited.
PROPERTY RIGHTS APPRAISED
The value estimated represents the fee simple interest.
APPRAISAL DEVELOPMENT AND REPORTING PROCESS
The following steps were completed by BAAR for this assignment:
1. Analyzed regional, city, neighborhood, site, and improvement data.
2. Inspected the subject and the neighborhood.
3. Reviewed data regarding taxes, zoning, utilities, easements, and city services.
4. Considered comparable improved sales, comparable improved building rental information, and comparable site sales. Confirmed data with principals, managers, or real estate agents representing principals, unless otherwise noted.
5. Analyzed the data to arrive at conclusions via each approach to value used in this report.
6. Reconciled the results of each approach to value employed into a probable range of market data and finally an estimate of value for the subject, as defined herein.
7. Estimated a reasonable exposure time associated with the value estimate.
The subject site and improvement descriptions are based on a personal inspection of the property, knowledge of construction techniques, and review of the relevant plat maps. The inspection is not a substitute for thorough engineering studies. To develop the opinion of value, BAAR performed a complete and thorough appraisal process considering all approaches to value. This report fully conforms to appraisal guideline as defined by the Uniform Standards of Professional Appraisal Practice as of January 1, 2018.
This is an Appraisal Report which is intended to comply with the reporting requirements set forth under Standards Rule 2-2(a) of the Standards of Professional Appraisal Practice. In this 1 The definition of market value is taken from: The Office of the Comptroller of the Currency under 12 CFR, Part 34, Subpart C-Appraisals, =34.42(f), August 24, 1990. This definition is compatible with the definition of market value contained in The Dictionary of Real Estate Appraisal, Third Edition, and the Uniform Standards of Professional Appraisal Practice adopted by the Appraisal Standards Board ofThe Appraisal Foundation, 1992 edition. This definition is also compatible with the OTS, RTC, FDIC, NCUA, and the Board of Governors of the Federal Reserve System definition of market value.
4 INTRODUCTION
appraisal, BAAR has considered all known applicable approaches to value, but utilized only the sales comparison approach per the scope of work identified by the client. The value conclusion reflects all known information about the subject property, market conditions, and available data.
This Appraisal Report incorporates a practical/detailed explanation of the data, reasoning and analysis that were used to develop the opinion of value. It also includes detailed descriptions of the subject property and the market for the subject property type. All data considered significant that was requested for this assignment was received by BAAR.
PERSONAL PROPERTY
No items of personal property are included in this valuation.
EXTRAORDINARY ASSUMPTIONS AND HYPOTHETICAL CONDITIONS
The subject is a proposed 9.99 acre parkland parcel that is part of a larger development that does not currently exist. As such, the subject is valued under the Hypothetical Condition that it has been subdivided into its proposed 9.99 acre site along with the existing parcels. The subject is further valued under the Hypothetical Condition that the proposed development will occur as planned.
Any changes to these Hypothetical Conditions may lead to alternate values applying.
There are no Extraordinary Assumptions within the report.
EXPOSURE/MARKETING TIME
Based upon a review of recent sales transactions in the subject market area and interviews with market participants, along with inspection and evaluation of the subject property, 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 As Is as of the date of value of this appraisal is estimated to be twelve (12) months. I forecast that this is a reasonable time of exposure under current market conditions to sell the subject at the appraised value. It is also necessary to estimate the appropriate "exposure time" which is defined as the amount of time from when a property is available for sale to the date on which it enters escrow. Based on a review of the above data, the "exposure time" and "marketing time" for the subject property are estimated to be the same.
5 AREA ANALYSIS
AREA ANALYSIS
The dynamic nature of economic relationships within a market area has a direct bearing on real estate values and the long-term quality of a real estate investment. In the market, the value of a property is not based on the price paid for it in the past or the cost of its creation, but on what buyers and sellers perceive it will provide in the future. Consequently, the attitude of the market toward a property within a specific neighborhood or market area reflects the probable future trend of that area.
Since real estate is an immobile asset, economic trends affecting its location quality in relation to other competing properties within its market area will also have a direct effect on its value as an investment. To accurately reflect such influences, it is necessary to examine the past and probable future trends, which may affect the economic structure of the market and evaluate their impact on the market potential of the _subject. This section of the report is designed to isolate and examine the discernible economic trends in the region and neighborhood, which influence and create value for the subject property.
REGIONAL ANALYSIS
THE CENTRAL VALLEY
The Central Valley is 450 miles long, 40 to 60 miles wide, and contains 42,000 square miles.
Geographically, the Central Valley can be divided into the northern Sacramento Valley (made up of ten counties) and the southern San Joaquin Valley (made up of eight counties).
As of 2011 , the estimated population of the Central Valley was in excess of 6.5 million people, or about one-sixth of the state's population. The largest cities include: Fresno, Sacramento, Bakersfield, Stockton and Modesto, all with populations in excess of 200,000. Population growth has resulted from a combination of natural increase and migration. The Central Valley contains an abundance of undeveloped land, which is low in price relative to that in the more developed coastal areas. On the negative side, much of the land is prime agriculture land and there has been increasing resistance to the loss of farmland for development.
Much of the Central Valley is agricultural land and therefore has a seasonal employment base.
State Government is the largest employer in the region. Other large employers include Sutter Health, Kaiser Permanente, Mercy Healthcare, Raley's Supermarkets, Hewlett-Packard, Pacific Bell, Packard Bell, Intel, UPS, Bank of America, NEC Electronics, US Computer Systems, Blue Diamond Growers, Campbell Soup Company, and the Sacramento Bee Newspapers. The economy has become increasingly diverse as technology companies seek lower cost locations as compared to the San Francisco Bay Area. This region also has a fairly well educated population base as compared to other regions within the State, but includes a large, unskilled migrant farm worker segment.
6 REGIONAL MAP
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AREA ANALYSIS
FRESNO COUNTY
The Greater Fresno region is typically defined as all of Fresno County, Madera, Firebaugh and Chowchilla in Madera County; Hanford, Lemoore in Kings County; and Dinuba, Monson and Travers in Tulare County. This region is part of California's Central Valley, the nation's leading agricultural area with more than eleven million acres of irrigated land. The City of Fresno is located approximately 200 miles southeast of San Francisco and 225 miles north of Los Angeles.
Fresno is located in California's fertile central valley where agriculture is the main force of the area's economy; its agriculture output serves both the San Francisco and Los Angeles markets.
Over 500 trucking and warehouse facilities support the areas operations as well as two railways.
According to recent estimates, the Fresno Metropolitan Area has a population of 942,904.
Fresno has strong residential occupancy rates. Current occupancy rates are above 95% based on our discussions with local property managers and investors. Rental rates increased in recent years. Signs of market distress in the residential housing sector have appeared with median home prices in decline, notices of default and foreclosures at, or near, ten-year highs. Multi-family residential rental rates appear to be stable with moderate increases foreseen in the near future.
Two major freeways serve the Fresno region: Interstate 99 connects Sacramento to the north and Bakersfield, and other cities to the south. Interstate 5, located 35 miles west of the subject, is the main north-south route through the interior of California; it travels from Mexico to Canada.
Highway 180 serves as the main east-west freeway in the Fresno area.
Fresno County's unemployment rate was at 8.1 % as of December 2017. The relatively high unemployment rate is typical of the Central Valley where employment is heavily dependent to agriculture related jobs, which tend to be seasonal. The economic profile for Fresno County shows a broad range of employment opportunities in growing industries such as call centers and back office operations, light assembly, packaging, and distribution/warehousing. Other thriving sectors include medical, financial and technological support services.
ECONOMY
Fresno County's agricultural industry contributes around $6 billion annually to the California economy and supports roughly 20% of all local jobs. The metro remains one of the top producing agricultural regions in the nation. However, the region's reliance on agriculture also exposes it to fluctuations in the market and external forces such as the weather. The drought that hit California over the last several years caused farmers to increasingly tap into their well water reserves, which increased not only expenses for drilling deeper wells but also the energy costs of pumping. Low water availability also leads to a reduction in crops, meat production, lower wages for employees, and higher food prices for consumers.
8 AREA ANALYSIS
While employment growth is outperforming the national benchmark, the unemployment rate was still about double the national mark as of 18Q1. The Trade, Transportation, and Utilities sector continues to experience steady job growth, buoyed by the fact that the economy in Fresno is wedded to the agricultural industry. However, white-collar sectors haven't been so fortunate. In fact, office-using employment still hasn't returned to the prerecession peak, and the Financial Activities and Professional and Business Services sectors actually shed jobs in the last 12 months.
FRESNO EMPLOYMENT BY INDUSTRY IN THOUSANDS
Curren! Jobs Curren! Growth 10 Yr Hlstoncal 5 Yr Forecast NAICS Industry Jobs LO Marice! us Mall<et us Morl<et us Manurac1unng 27 09 137% -0 41% -0 12% . , 14% -057% -I 19% Trade, Transporta1ion and Utilities 68 11 207% 0 38% 1 32% 029% 0 35% 041% Retail Trade 40 1.1 1 05% -02 1% 093% 020% 0.36% 044%
Financial Acl1v111es 14 0.7 -0 47% 099% -0 91% 023% 0.73% 0.73% Govern men I 75 1.4 2.80% 0.16% 0.64% -002% 0.69% 0.65% Natural Resources and Mining 0 0.2 17 16% 5.41% t2.24% -0 46% Education and Health Services 68 1 2 2.84% I 79% 3 15% 208% 1.67% 1 27% Professional and Business Services 31 0.6 -3 36% 249% 0 12% 1 55% 1.00% I 48% lnlonna11on 4 0.6 009% - 1 32% - 1 67% -1.05% 0.21% 0 29% Leisure and Hosprtalrty 33 0.9 361% 1 97% I 50% 1 73% 1 10% I 27% Olher Services 13 0.9 3.13% 0.93% 1 45% 044% 0.43% 040% Total lmptoym,nt 347 1.0 1.90% 1.30% 0.97% U4% 0.13% 0.83% Source: Moody's Analyt1<:5
LO = LO<.llion Quolient
POPULATION
Fresno's population is estimated at 512,000, up from 467,600 in 2010. The greater Metropolitan Fresno area has a population estimated at 1.1 million.
Year • Population Growth Growth Rate
2016 522,053 3,550 0.68%
2015 518,503 4,127 080%
2014 514,376 5,405 1.06%
2013 508,971 3,710 0.73%
2012 505,261 4,364 0.87%
2011 500,897 6,232 1.26%
2010 494,665 67,013 15.67%
9 AREA ANALYSIS
INCOME
Fresno's average household income is $63,256, which is slightly higher than Fresno County at $62,865 and the surrounding cities of Chowchilla, Kerman, Kingsburg , and Madera but lower than the nearby city of Clovis, which has the highest average income of $74,391.
LAND USE
Fresno County has a large amount of land available for future residential, commercial, industrial, and business park development. Approximately 51 % of Fresno's current land inventory is available for development. About 46% is not available for development and a little over 2% of the land inventory has already been urbanized. As indicated above, there is still a substantial portion of land available, and we do not anticipate a shortage of land for development in the foreseeable future within Fresno County.
EMPLOYMENT
The unemployment rate in the Fresno County was 8.1 percent in December 2017, up from a revised 7.5 percent in November 2017, and below the year-ago estimate of 9.4 percent. This compares with an unadjusted unemployment rate of 4.2 percent for California and 3.9 percent for the nation during the same period.
I
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Unemployment Rate Historical Trend
Fresno serves as the economic hub of Fresno County and California's San Joaquin Valley. The unincorporated area and rural cities surrounding Fresno remain predominantly tied to large-scale agricultural production. Sony Music Distribution/Sony Computer Entertainment is in Fresno, CA.
According to the City's 2011 Comprehensive Annual Financial Report, the top employers in the city are:
10 AREA ANALYSIS
# Employer # of Employees
1 Community Medical Centers 6,000
2 City of Fresno 3,790
3 Saint Agnes Medical Center 2,800
4 Kaiser Permanente 2,160
5 Pelco by Schneider Electric 2,029
6 Children's Hospital 1,996
7 Ruiz Foods, Inc 1,729
8 Chukchansi Gold Resort/Casino 1,385
9 Tachi Palace Hotel & Casino 1,200
10 Foster Farms 1,100
While the near term outlook for the region is guarded , the long-term outlook is more optimistic.
As the economy continues to recover from the recent recession, the region should benefit from the recovery; however, near term growth for the region is projected to be limited. 2010 CENSUS DATA
The 2010 United States Census reported that Fresno had a population of 494,665. The population density was 4,404.5 people per square mile. The Census reported that 485,798 people (98.2% of the population) lived in households, 4,315 (0.9%) lived in non-institutionalized group quarters, and 4,552 (0.9%) were institutionalized.
There were 158,349 households, out of which 68,511 (43.3%) had children under the age of 18 living in them, 69,284 (43.8%) were opposite-sex married couples living together, 30,547 (19.3%) had a female householder with no husband present, 11 ,698 (7.4%) had a male householder with no wife present. There were 12,843 (8.1 %) unmarried opposite-sex partnerships, and 1,388 (0.9%) same-sex married couples or partnerships. 35,064 households (22.1 %) were made up of individuals and 12,344 (7.8%) had someone living alone who was 65 years of age or older. The average household size was 3.07. There were 111 ,529 families (70.4% of all households); the average family size was 3.62.
The population was spread out with 148,823 people (30.1 %) under the age of 18, 62,601 people (12.7%) aged 18 to 24, 135,076 people (27.3%) aged 25 to 44, 102,064 people (20.6%) aged 45 to 64, and 46,101 people (9.3%) who were 65 years of age or older. The median age was 29.3 years. For every 100 females there were 96.7 males. For every 100 females age 18 and over, there were 93.5 males.
There were 171 ,288 housing units at an average density of 1,525.2 per square mile, of which 77,757 (49.1 %) were owner-occupied, and 80,592 (50.9%) were occupied by renters. The homeowner vacancy rate was 2.6%; the rental vacancy rate was 7.6%. 235,430 people (47.6% 11 AREA ANALYSIS
of the population) lived in owner-occupied housing units and 250,368 people (50.6%) lived in rental housing units.
HOUSING
More than half of Fresno's housing stock, or 54.82%, is owner-occupied as compared to 41.28% renter-occupied properties. This is suggestive of a housing market where the relative affordability of the market combines with a favorable economic environment has allowed residents to purchase homes.
The median home value in Fresno is $230,600. Fresno home values have gone up 7.6% over the past year and Zillow predicts they will rise 6.5% within the next year. The median list price per square foot in Fresno is $161, which is lower than the Fresno Metro average of $166. The median price of homes currently listed in Fresno is $284,500 while the median price of homes that sold is $245,300. The median rent price in Fresno is $1,300, which is lower than the Fresno Metro median of $1,368.
$230,600
7.6% 1-year change 6.5% 1-year forecast
CITY OF FRESNO
The subject property is located in Fresno, approximately 175 miles southeast of San Francisco on Highway 99. The city of Fresno encompasses roughly 100 square miles and is the largest community in the southern San Joaquin Valley with a population of approximately 501,362 as of July 2011. Fresno is nestled along Highway 99 in Fresno County and is considered by Forbes Magazine to be the 89th out of 200 cities for the Forbes 2000 "Best Places" list and was awarded an All-American City Award for 2000. Located in the center of the world's richest agricultural region, Fresno is larger than both St. Louis and Atlanta.
Fresno is culturally diverse with over 85 languages spoken in the schools due to the influx of immigrant groups. Fresno is also in the midst of rapid growth, having doubled in size in less than 20 years. The greatest development emphasis is in the northern sector although most properties, including the subject's area, are experiencing modest growth. 12 AREA ANALYSIS
Agriculture is the predominant industry within the Fresno area. The area is also known as a distribution hub for trucking and warehousing firms. Two railways operate intermodal facilities in Fresno County and serve all points north, south and east. The nation's largest parcel carriers, UPS, FedEx and DHL, all operate out of the Fresno-Yosemite International Airport.
POPULATION
Between July 2012 and July 2013, Fresno County's population grew just over 1 %, which is the county's highest growth rate in three years. Fresno is growing faster than the state of California as a whole, and faster than other counties. The growth in the area is attributed to a growing Hispanic population, which makes up a first-time majority in Fresno. Between 2000 and 2010, the city of Fresno grew a whopping 41 % as more Californians move inland to get away from the high cost of living on the coast.
Year• Population Growth Growth Rate
2016 522,053 3,550 0_68%
2015 518,503 4,127 0_80%
2014 514,376 5,405 1_06%
2013 508,971 3,710 0_73%
2012 505,261 4,364 0_87%
2011 500,897 6,232 1_26%
2010 494,665 67,013 15_67%
SUMMARY
In summary, Fresno County and the City of Fresno are in the stable stage of their life cycles, following a period of rapid growth from 1990 through 2005. Because of significantly lower land prices, traditional agricultural areas are in transition to more intensive residential development.
Growth will continue in unincorporated portions of the county, although parcels of agricultural land will continue to be protected by Williamson Act Contracts and land preservation zones. Fresno has a sufficiently diversified economy to support continued growth.
Although the economy of the San Joaquin Valley has been negatively affected by the recent national and local recessions, the long-term economic outlook for this area is good. Cities and outlying areas are still experiencing population growth. Unemployment rates can be higher, but as the economy shifts from primarily agricultural to primarily service sector, these rates should moderate. While the near term outlook for the region is guarded, the long-term outlook is more optimistic. When the economy begins to recover from the current recession, the region should benefit from the recovery; however, near term growth for the region is limited. 13 i Uflli•J;IAHi
~
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Data use subject to license,
® Delorme, Delorme Street Atlas USA® 2011.
www.delOrmc.com
Compiled by: BAAR
J
AREA ANALYSIS
CITY MAP
AO> .-.ve
l ~ mi
0 ½ 1 1½ 2 2½
MN (12 7' E) Data Zoom 11 -2
14 AREA ANALYSIS
NEIGHBORHOOD INFLUENCES
The subject is located in the southwestern portion of the City of Fresno. The area was historically agricultural in nature but has slowly been developed with a mix of residential, limited commercial, and industrial uses. The neighborhood has historically constituted the lowest priced within the city. The city is efforting to revitalize the area. The City of Fresno and the Southwest Fresno Community has incorporated and integrated several plans and affiliations into one concerted effort and specific plan for Southwest Fresno. The number one driving force behind the current effort to transform and revitalize Southwest Fresno is the Southwest Fresno Specific Plan (SWFSP). The SWFSP marks a historic planning and development milestone for the Southwest Fresno Community. With ample land available for development and a prime location next to Fresno's downtown, Southwest Fresno has an enormous potential for positive change.
The subject is located just west of Highways 41 and 99, which provide regional access to larger freeways and surrounding communities. The properties in the area have average market appeal and average market acceptance. We estimate that the vacancy rate in the immediate area is between 4% and 8% for residential uses. The neighborhood as well as its infrastructure is suburban. The streets are largely improved with concrete curbs and gutters, streets are paved with asphalt, and all utilities and city services are available to the neighborhood. The properties in the area generally reflect fair to average levels of maintenance and condition and the market appeal and acceptance of the properties is average. The neighborhood is in the stable stage of its life cycle.
Conclusion
NEIGHBORHOOD RATINGS
MAINTENANCE/ CONDITION
PROPERTY COMPATIBILITY
APPEAL/APPEARANCE
PROTECTION/ ADVERSE INFLUENCE
DEVELOPMENT POTENTIAL
RENTAL DEMAND
TRANSPORTATION / ACCESS
POLICE/ FIRE PROTECTION
Ex Gd
X
Av Fr Pr
X
X
X
X
X
X
X
The neighborhood has features and qualities, which contribute to a positive demand for real estate. All utilities are available throughout the neighborhood and the improvements in the area are generally in average condition. The streets and other public areas are also in average condition, and parking is adequate. The subject property benefits from the features of the neighborhood. The subject is conveniently located and sufficiently supported by nearby uses. 15 NEIGHBORHOOD MAP
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® Delorme. Delorme Street Atlas USA® 2011.
www.delorme.com
Compiled by: BAAR
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MARKET OVERVIEW
MARKET OVERVIEW
Fresno is located in the middle of the Central Valley, and is one of the region's most populous metros, with approximately 1 million residents. Encompassing Fresno County, a significant portion of economic activity in the area, like most Central Valley metros, is tied to agriculture. While job growth has outperformed the national average since 2012, non-agricultural employment is heavily concentrated in government, education and health services, sectors that typically do not offer robust income growth, but do soften market volatility.
Multifamily fundamentals have been strong, as both vacancy and rent growth are outperforming the national averages. In fact, vacancies here have historically been limited, and 2018 has seen the mark trend in line with the metro's all-time low, as demand continued to outpace a limited number of deliveries. The lack of substantial income gains, combined with a median household income well below the statewide median, has traditionally limited rent growth. The past several years, however, have been exceptions. New construction, while more active here than in neighboring secondary metros, has been measured, helping to avoid a supply-driven rise in vacancies. Investors have taken note of the metro's strong fundamentals-annual sales volume has easily surpassed the $116 million historical average the past four consecutive years and has done so again in 2018.
KEY INDICATORS
Cment 0Uar1• UnllS vacancy Rate Asking Rent Effec:ttve Rent Absorpllon DeHvered UnllS UnderConau Units Unita
4 & 5 Star 3.209 2.7% 51,377 $1,363 5 o 356
3 Star 18.057 3.5% S1,037 $1,027 34 0 168
1 & 2 Star 30.638 36% $829 $824 34 0 0
Mlll'kel 51,904 3.5% S948 $940 73 0 524
Amual Trends 12 Month Historical Forecn1 Peak When Trough When Av•aoe Ave,age Vacancy Change (YOY) -03% 5 5% 4.3% 75% 2004 Q2 3.5% 2018 03 Absorption Units 171 261 66 1,285 2005 03 {632) 2001 04 Delivered Units 16 288 194 758 2006 01 16 2018 02
Demolished Units o 18 4 277 2014 QI 0 2018 02
Asking Rent Growth (YOY) 41% 22% 1.4% 83% 2001 01 .5 )'II, 2009 Q4 Effective Rent Groy,1h (YOY) 42% 2.1% 15% 83% 2001 Q1 ·S S'l. 2009 04 Sales Volume $374 M $115.9 M NIA $375 0 M 2018 02 S11.7M 2010 01
VACANCY
Fresno offers the largest concentration of multifamily inventory among Central Valley metros but little high-end product. Renters make up nearly half of Fresno's population, despite home prices that are much more affordable compared to most other metros in California.
Even still, home ownership is out of reach for many residents. While the median single family home is about $260,000, Fresno's median household income is only around $51,000, roughly 17 MARKET OVERVIEW
20% below the state average. Furthermore, high-earning households are relatively scarce: Less than 20% of metro households earn $100,000 or more annually.
Major metro employers include Cargill, Foster Farms and Zacky Farms, as the metro consistently ranks among the nation's leaders for job growth in food manufacturing and processing. Another employer that has historically had a large presence in Fresno is the Internal Revenue Service (IRS). However, the IRS plans to shutter its 532,000 SF tax-processing center in 2021, which will result in the elimination of 3,000 jobs. One factor that does not help Fresno's employment rate or income levels is location. On the one hand, the metro is near the geographical center of California and roughly 200 miles from each Los Angeles, San Francisco and Sacramento. Conversely, Fresno's distance does not allow for "super-commuters" (a commute that is 90 minutes or more one way) to take advantage of the abundance of higher-paying jobs in other major metros.
Residents of Central Valley locales like Stockton and Modesto have the opportunity to commute to Bay Area metros for example, but Fresno is too far removed from California's major cities.
As a result of steady demand and limited new construction this cycle, vacancies in Fresno have been tight in recent years. From 2014-17, vacancies averaged less than 5%. And occupancy levels have further increased in 2018. Indeed, in 18Q3, vacancy reached an all-time metro low of only 3.5%, or more than 200 basis points below the national average. The vacancy rate is currently 3.5%.
ABSORPTION, NET DELIVERIES & VACANCY
1,000
800
Yi 600 -\
~ ~ 400
,_:
c-.:-
z 200
"
(, 0
r~
:ti -200 <
-400
-600 I
I Forecast
I
~ !_,.----
I
I
I
7 0 %
6.5%
6.0%
5.5 %
5.0%
4.5%
4.0%
3.5 %
I 1 , 1 I 1 1 • I , , , I t 1 1 I 1 , 1 I , ' I I I 1 , 1 I • 1 1 I 1 1 1 I , , , 13.0 % 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Absorp11on ■ Net Deliveries ■ Vacancy United Slates Vacancy 18 r~,
~-
VACANCY RATE
8%
7%
6%
5%
4%
3%
2%
: Forecast
I
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I
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MARKET OVERVIEW
1 %--'-l-'---'-~l-'---'-t'--'--'---'---l'--'--'---'---I-L..-'---'---l-'-...U.J...l.-'-..l-'---1--l--'-'---l---'-..L.---4---'--~ I I I I I t I I I I I ' 1 1 1 I I I I t I t I I t I 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Fresno 3 Star ■ Fresno 4-5 Siar ■ Fresno Untied States
RENT
Healthy rent growth was slow to reach Fresno this cycle. While the metro only suffered one year of rent losses in the wake of the Great Recession, sluggish wage growth and the prevalence of low-paying jobs tied to the agriculture industry limited gains to less than 2% annually from 2010-
14. On the other hand, the average Fresno rent only consumes a little more than 20% of the median income, which has given landlords room to push rents in recent years without burdening renters. Rent growth has consistently averaged around 5% since 2015, and gains were about in line with that mark as of 18Q3. Rent growth is currently 4.1 %.
The average asking rent in Fresno is $950/month. Rates receive little boost from high-end product, as only about 5% of metro inventory is 4 & 5 Star-rated. Asking rents are about 20% lower than Stockton's but roughly in line with Visalia's and Bakersfield's. While Stockton benefits from its proximity to the Bay Area and the exorbitant housing costs there, which have led to a steady exodus of Bay Area residents to nearby metros, the remoteness of Fresno, Visalia, and Bakersfield, however, precludes them from siphoning demand from major metros.
North Fresno and East Fresno command some of the highest rents among the metro's submarkets. North Fresno's highly rated school system is a major draw for families, as is the easy access to employment nodes along two major highways, and East Fresno also benefits from being located near a variety of healthcare employers. South Fresno, home to the metro's burgeoning downtown area, has one of the lowest asking rents in the metro. The submarket 19 MARKET OVERVIEW
experienced limited demand over the past year and has a vacancy rate that is among the highest in the metro.
DAIL V ASKING RENT PER SF
$1.10
$1.08
$1.06
$1.04
$1.02
$1 00
$0.98
$0.96
$0.94
$0.92
$0.90 ..._.~~ ~~~~.__,_~~~~~~~-~~~~~~~,-~~~~
2015 2016 2017 2018
MARKET RENT PER UNIT & RENT GROWTH
$1.400 : Forecast 7%
I
I
S1 ,300 I 6% I
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I
$1,200 J 5% 1
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::, $1.100 I
I 4% G__,
CL
cc $1,000 ""
3% o-:
$900 2%
1 %
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Markel Rent Growth YIY ■ Markel Rent Per Unit ■ Elfeclive Rent Per Unit
CONSTRUCTION
United Slates Markel Rent
Per Urn!
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Developers have been confident enough in fundamentals to bring a steady, albeit modest, number of projects to Fresno. New supply has been added every year since 2005, and the largest amount of new construction this cycle occurred in 2017, when nearly 500 units delivered. Since 2010, metro inventory has increased by about 3% cumulatively. 20 MARKET OVERVIEW
As of August 2018, around 500 units were under construction. One of the most significant projects is Vintage Park, a 160-unit community in the North Fresno Submarket, which broke ground in 2017 and may deliver as soon as 18Q4. The project will include amenities such as granite countertops, walk-in closets, and in-unit washer/dryers.
Much of 2017's new inventory was the result of one project. The 4 Star 350-unit Dominion Courtyard Villas delivered in the North Fresno Submarket, with the first phase of units coming on line in May and the remainder in November. The Ellis Enterprises' developed community boasts large units targeted at family households searching for access to North Fresno's school districts, and high-end amenities that are uncommon in the metro. Asking rents are nearly double the metro average but lease up has been outstanding-the project was more than 95% occupied as of August 2018. Dominion Courtyard Villas' biggest draw is its proximity to the top schools in the highly rated Clovis Unified School District. Furthermore, the property is only about a 10-minute drive from California State University, Fresno, and is directly between Highway 41 and Highway 168, which both lead to nearby employment nodes.
Nearly half of new construction this cycle has been concentrated in the downtown area. For example, The Lede, a 3 Star 85-unit garden-style community developed by Granville Homes, delivered in the fall of 2016. The asset stabilized within two quarters of completion as demand from young professionals in the urban core continues to grow. Granville Homes has been one of the most active developer's downtown, bringing six multifamily properties totaling roughly 250 units to the revitalized area since 2011. Granville Homes sold its portfolio of downtown assets in April 2017, including two projects that were under construction on L Street.
DELIVERIES & DEMOLITIONS
600
500
400
.'.!.: 300
§
o_ 200 ,,,
C,
f. 100 ,:;
Ll " 0
-100
-200
-300
I Forecast
I
I
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Oelrvenes ■ Demolished ■ Nel Deliver,es
21 MARKET OVERVIEW
SALES
Fresno has received its share of investment activity this cycle, with sales volume topping $200 million on two occasions, or about double the metro's long-term average. Little out-of-state capital finds its way here, and many buyers are metro-based. Inventory turnover has been robust in recent years, averaging almost 7% from 2014-17. By comparison, inventory turnover averaged about 3% from 2010-13.
Pricing has jumped considerably in recent years. From 2013-16, the average price was about $60,000/unit. However, in 2017, the average price/unit increased to approximately $84,000, or a roughly 40% increase from the pace of the prior few years. The strength has continued in 2018- pricing has been about in line with last year's mark.
One of the most noteworthy trades of late was the March 2018 trade of Jackson Park Place. The 3 Star 376-unit community was acquired by Fresno-based Golden State Financial Corporation for $51 .5 million ($137,000/unit) at a reported cap rate of 5. 7%. The North Fresno Submarket-located property was 96% leased, with asking rents about 25% higher than the submarket average at the time of sale.
After sales got off to a slow start in 2017, volume leaped considerably in Q4 as a result of a large portfolio sale. In November, Los Angeles-based JRK Property Holdings acquired the 3 Star Dominion Heights Apartments and the 4 Star Crown Point & Cascades Apartments from Redwood City-based Demmon Partners for $98.8 million ($161 ,000/unit) at a reported cap rate of 5.5%.
Located in the North Fresno Submarket, the properties combine for 614 units and were 100% occupied at the time of sale.
Sales transactions here typically average around the $2.5 million mark, and one recent example is Manchester Arms, located in the North Fresno Submarket. In April 2018, the 2 Star 42-unit property was acquired by an individual investor for $2.45 million ($58,000/unit) at a reported cap rate of 8.5%.
SALE$ VOLUME & MARKET SALE PRICE PER UNIT
S220.000
S200.000
$180,000
S160,000
$140,000
Sl20.000
SI00,000
$80,000
S60.000
$110.000
l Forecast
I
I
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201 3 20 14 201 5 2016 2017 2018 2019 2020 2021
■ Sale& Volu1r1e ■ Frt-sno P1tea!Unil ■ Uniled Stoles PriceJUn11 22 S180
$160
$1 40
S120
$100
SBO
S60
$40
$20
so 2022
SITE ANALYSIS
SITE ANALYSIS
The Description of the site can be detailed as follows:
Location:
Parcel Number:
Land Area1
Shape and Frontage:
Topography and
Drainage:
Soils:
Easements and
Encroachments:
The subject is located at the SW corner of Martin Luther King Boulevard @ E Church Avenue. Fresno (City and County), CA 93706. The subject is part of a large proposed development know as West Creek Village. The development will consist of single and multi-family development, commercial development, parkland, and the western campus of Fresno Community
College.
Not assigned yet (see comments above)
9.99 Acres - 435,164 SF
The subject parcel will represent a nearly oval site in the middle of the West Creek Village development. The parcel will have no direct street frontage. The subject of this appraisal will be portion of the site that will be dedicated as parkland. Refer to the aerial and plat maps provided below.
The site has a flat topography. Our investigation did not reveal any significant drainage problems.
No soils report was provided. The soils are adequate for the existing grazing land and vineyard use.
The Preliminary Report would contain reference to easements of record but was not provided for review. There does not appear to be any adverse easements or encroachments that would diminish the utility or marketability of the subject property. This valuation assumes that the fair market value of the subject property is not adversely affected by any easements,
encroachments or other special conditions.
Covenants, Conditions, No private deeds or restricting covenants affecting development, and Restrictions: other than zoning , were found to affect the site. 1 Source: Plat Map
23 Utilities:
Flood Zone:
Environmental Issues:
Adjacent Properties
North:
South:
East:
West:
Conclusion:
SITE ANALYSIS
Combination of Public and Private. All utilities are or will be brought to the site.
According to maps published by the Federal Emergency
Management Agency (FEMA), the subject lies in an unshaded flood Zone X, panel 06019C211 OH , dated February 18, 2009 Zone X is defined as "areas determined to be outside 500-year floodplain determined to be outside the 1 % and 0.2% annual chance floodplains." Mandatory flood insurance purchase requirements do not apply, but coverage is available
No evidence of hazardous waste or toxic materials was visible.
The value estimate rendered in this report is predicated on the assumption that there is no hazardous material on or in the property that would cause a loss in value. No evidence of hazardous waste or toxic materials was visible. BAAR has no knowledge of the existence of these substances on or in the subject property. However, BAAR is not qualified to detect hazardous waste or toxic materials.
Apartments / Community Center I SFR development
Farm Land/ Low Density Residential
Gaston Middle School / SFR Subdivision
Farm Land / Low Density SFR
The subject is a comprised of a proposed 9.99-acre site that will be donated to the Community College district and will represent a central park area of the proposed West Creek Village. 24 SITE ANALYSIS
AERIAL VIEW
25 SITE ANALYSIS
PARCEL MAP
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PARCEL MAP
R•tail
N(l-ighborhood (,:,ntN 33,000 sf
Town C1mter _____ 1,!LOOO sf
Totll: 314.ooo ,r
-
Parks
Central Park
Total:
The subject is denoted as the green parcel
27 SITE ANALYSIS
9 99 acres
ll .02 acres
TAX ANALYSIS
ZONING ANALYSIS
The subject's zoning requirements are detailed below.
ZONING SUMMARY
Current zoning: RS-5 / Residential Single Family (4,000 SF minimum site area per dwelling)
Legally conforming
Uses permitted:
Zoning change
Zoning Analysis and Conclusions
Yes
SFR, grazing land, multi-family residential, parkland,
schools, and other low density uses.
Possibly
The purposes of the Residential Single-Family (RS) Districts are to:
A. Provide for a variety of single-family residences built to urban or suburban standards to suit a spectrum of individual lifestyles and needs, and to ensure availability throughout the city of the range of housing types necessary for all segments of the community, consistent with the General Plan.
B. Enhance the character of the city's residential neighborhoods, while providing new opportunities for the development of a range of housing types throughout the city.
C. Ensure that the scale and design of new development and alterations and additions to existing residences are compatible with the scale, mass, and character of their neighborhoods.
D. Provide for appropriate densities within the ranges established in the General Plan.
E. Protect the quality of the residential environment and secure the health, safety, and general welfare of the residents.
F. Provide sites for neighborhood-serving uses such as parks, family day cares, libraries, and community facilities.
G. Implement and provide appropriate regulations for General Plan classifications of "Low Density Residential," "Medium Low Density Residential," and "Medium Density Residential." The subject may be rezoned to parkland upon completion of the subdivision. 28 TAX ANALYSIS
TAX AND ASSESSMENT DATA
The assessment and real property taxes shown on the table below for the current fiscal tax 2017/18-year.
Parcel Number Not Issued
Land $0
Improvements $0
Personal Prooertv $0
Total Assessed Value $0
Tax Rate 0%
Annual Taxes $0
Bond Assessments $0
Direct Levies $19
Total Taxes $19
Delinquent Taxes $0
Total Taxes $19
In the State of California, real estate is assessed at 100 percent of market value as determined by the County Assessor's Office. The maximum tax rate cannot exceed 1 percent of the property's appraised value, plus any special assess. The subject parcel does not yet exist and there is no corresponding APN or assessed value. Since the subject will be dedicated as parkland, it will not be assessed and will not be subject to property taxes. However, there will be direct levies that have been estimated on the table above.
Proposition 13 was passed by voters in June 1978 and substantially changed the taxation of real estate in California. This constitutional amendment rolled back the base year for assessment purposes to the tax year 1975-1976. Annual increases in assessed value are limited to 2 percent per year, regardless of the rate of inflation. Real estate is subject to re-appraisal to current market value upon a change in ownership or new construction. The subject will likely be reassessed after the transfer and subsequent construction.
Within the definition of "market value," the assumption is made that the subject property will be sold on the open market and, thus, the property is reassessed for tax purposes for this appraisal. 29 HIGHEST AND BEST USE
HIGHEST AND BEST USE
In appraisal practice, the concept of highest and best use represents the premise upon which value is based. The four criteria that the highest and best use must meet are:
• legal permissibility;
• physical possibility;
• financial feasibility; and
• maximum profitability.
Highest and best use is applied specifically to the use of a site as vacant. It is recognized that In cases where a site has existing improvements, the concluded highest and best use as if vacant may be different from the highest and best use given the existing improvements (as improved).
The existing use will continue, however, until the land value, in its highest and best use, exceeds that total value of the property under its existing use plus the cost of removing or altering the existing structure.
Implied in the highest and best use is recognition of the contribution of a specific use to the community environment or to the community's development goals, in addition to wealth maximization of individual property owners. Also implied is that the conclusion of highest and best use results from the appraiser's judgment and analytical skill, i.e., that the use determined from the analysis represents an opinion, not a fact to be found.
Highest and best use analysis involves assessing the subject both as if vacant and as improved.
HIGHEST AND BEST USE AS THOUGH VACANT
Legal Permissibility
The legally permissible uses were discussed in detail in the site analysis and zoning sections of this report. Overall, based on our review of the zoning restrictions, the site has several residential, civic, and related potential uses. The parcel is part of a larger development and may be rezoned to reflect the pending parkland use. Residential subdivision would be the highest and best use as vacant until the subject is converted for parkland use at what time this will be the highest and best use. The value of the subject herein reflects the single-family residential subdivision value as it is currently zoned.
Physical Possibility
The physical characteristics of the subject site were discussed in detail in the site analysis section of this report. Overall, the layout and positioning of the site in southwestern Fresno and warrants residential related uses.
Financial Feasibility
The test of financial feasibility is put only to those uses, which are legally permissible and physically possible. If the property is capable of generating a sufficient net income to cover the 30 HIGHEST AND BEST USE
required rate of return on investment and provide a return to the land, then the usage is financially feasible within a defined price limit.
BAAAR analyzed the financial feasibility of developing the subject site based on current market rental rates. This analysis compares the net operating income produced by appropriate improvements to the economic return on the property's value. In essence, the net income produced by the proposed or new improvements must provide a return to the cost of the improvements.
Maximum Profitability
The final test of highest and best use of the site as though vacant is that the use is maximally productive, yielding the highest land value. In the case of the subject as though vacant, the analysis thus far has indicated that agricultural and residential related uses would be most likely.
Conclusion: Highest and Best Use As Though Vacant
Based on this discussion, it concluded that the Highest and Best Use of the subject site as vacant would be for residential related development. Overall, based on our review of the zoning restrictions, the site has several residential, civic, and related potential uses. The parcel is part of a larger development and may be rezoned to reflect the pending parkland use. Residential subdivision would be the highest and best use as vacant until the subject is converted for parkland use at what time this will be the highest and best use. The value of the subject herein reflects the single-family residential subdivision value as it is currently zoned. 31 APPRAISAL METHODOLOGY
APPRAISAL METHODOLOGY
The appraisal process is defined as an orderly program by which the problem is planned and the data involved is acquired, classified, analyzed and interpreted into an estimate of value. In this process three basic approaches to value are considered : Income Capitalization Approach, Sales Comparison Approach, and Cost Approach. 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.
The final step in the appraisal process is reconciliation -- a process by which BAAR analyzes alternative conclusions and selects a final value estimate from among two or more indications of value. BAAR weighs the relative significance, applicability and defensibility of each approach as it relates to the type of property being appraised.
INCOME CAPITALIZATION APPROACH
The methodology of the Income Capitalization Approach is to determine the income-producing capacity of the property on a stabilized basis by estimating market rent from comparable rentals, making deductions for vacancy and collection losses and building expenses, then capitalizing the net income at a market-derived rate to yield an indication of value. The capitalization rate represents the relationship between net income and value.
The subject will be parkland associated with the larger development known as West Creek Village. As such it will not have income generating potential. The exclusion of this approach is not considered to affect the reliability of the value concluded herein.
SALES COMPARISON APPROACH
The Sales Comparison Approach utilizes sales of comparable properties, adjusted for differences, to indicate a value for the subject property. Valuation is typically accompl ished 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.
The reliability of this approach is dependent upon (a) the availability of comparable sales data; (b) the verification of the sales data; (c) the degree of comparability; (d) the absence of atypical conditions affecting the sales price. The subject is a special use property that has various components. There are adequate sales from various transactions to render a value for the subject. Accordingly, this approach has been included in the analysis. 32 APPRAISAL METHODOLOGY
THE 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 which 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.
The subject is currently vacant land and will be converted to parkland upon the completion of the subdivision. There will be park improvements completed by the ownership who will be donated the land. Given the particulars of the subject, the Cost Approach is not applicable. The exclusion of this approach is not considered to affect the reliability of the value concluded herein.
CONCLUSION
As noted above, the Sales Approach is the only approach developed in this valuation. This is the most appropriate approach and mirrors how the subject and similar properties are sold in the market. Accordingly, it is the basis for the reconciled value. 33 SALES APPROACH
SALES COMPARISON APPROACH
The Sales Comparison Approach provides an estimate of market value based on analyzing transactions of similar properties in the market area. The method is based on the proposition that an informed purchaser would pay no more for a property than the cost of acquiring an existing one with the same utility. When there are an adequate number of sales of truly similar properties with sufficient information for comparison, a range of values for the subject property can be developed.
An investigation was made of sales and offerings of comparable properties in the relative market area of the subject property. The approach is based on the proposition that an informed purchaser would pay no more for a property than the cost of acquiring an existing property with the same utility. This approach is applicable when an active market provides sufficient quantity of reliable data that can be verified from authoritative sources. The sales summarized in the following page were selected as the most meaningful and relevant to the valuation of the subject. A map indicating the location of each comparable sale relative to the subject property is also presented below. The comparables are described in further detail in the following paragraphs.
Adjustments to the per unit sale prices of the comparable properties are made in recognition of their relative differences in terms of dates of sale, locational, and physical characteristic differences.
Various adjustments are applied to the comparable data in correlating it to the subject property.
An adjustment grid is presented below. It should be noted that the adjustment process is not intended to be a scientific approach in valuing the property but, rather, a clarification of the adjustment process. The mathematics do not control the final value conclusion, but they do provide guidance as to a range of value within which the value of the subject property would most likely fall.
A significant component to the proposed development is the funding provided to the State Center Community College District, who will develop the expanded Fresno Community College West Extension on the site. On January 29, 2018, the California Strategic Growth Council (CSGC) unanimously approved a $70 million competitive grant to improve the City of Fresno through community-led development and infrastructure projects. Included in this amount is $16.9 million allocated to onsite infrastructure associated with a proposed satellite college campus that will be constructed on the subject property. This would augment a $40 million commitment from the State Center Community College District to construct the campus. The resulting $56.9 million will be used to develop the infrastructure of the overall development along with the campus. These fund have a significant contributory value to the subject's pending parcels as the off-site will be constructed at a cost to the SCCCD and not the subject or any other owner.
There are various methods for valuing estate land acreage like the subject. The selected indicator is the price per acre. While the subject will be slated for use as parkland, it is currently zoned for multi-family residential and this represents its highest and best use. Accordingly, similarly zoned parcel have been included in the analysis.
34 SALES APPROACH
SALE 1 is the transfer of land that is contained within 10 parcels. The property was acquired by a hotel operator but the eventual development will include other product types. The buyer paid all cash for the property at just below the list price of $1,762,500. Like the subject's pending offsite, this comparable had similar development adding to the value. The comparable required an adjustment for the superior location in Clovis. The area has higher predominant values and rents.
An adjustment was also applied for the smaller land area consistent with the principle of economies of scale. The final adjusted price per acre is $209,370.
SALE 2 is the transfer of industrially zoned land that is located east of the subject. The parcel is part of a larger industrial related park. The comparable was acquired by a construction company to use as a yard. An adjustment was necessary for the inferior industrial zoning relative to the subject. Additionally, an adjustment for the inferior off-sites relative to the subject was necessary.
The final adjusted price per acre is $207,447.
SALE 3 is the transfer of land that is located in Clovis northeast of the subject. The buyer paid all cash for the property at just below the list price of $1,762,500. Like the subject's pending off-site, this comparable had similar development adding to the value. The comparable required an adjustment for the superior location in Clovis. The area has higher predominant values and rents.
An adjustment was also applied for the smaller land area consistent with the principle of economies of scale. The final adjusted price per acre is $193,910.
SALE 4 is the transfer of two contiguous parcels that sold as one economic unit. The property was acquired by an investor/developer. The property is located near Herndon, which is an inferior location relative to the subject. An adjustment for the inferior zoning, which allows for less dense development was necessary. An adjustment for the lack of off-sites and the lack of connected utilities. The final adjusted price per acre is $182,713. 35 SALES APPROACH
SUBJECT SALE 1 SALE 2 SALEJ SALE 4
ADDRESS
I
MLK@Jensen 2509-2559 Clovis Avenue 2892 E Dorothy Avenue 2362 Herndon Avenue SEC Veterans Blvd@ Bullard CITY Fresno Clovis Fresno Clovis Fresno
APN Pending 499-540-01. e al 328-200-85S/84S/-30 550-020-41 504-0B 1-39S/504-0B 1-40S
SALE PRICE
I
.... $1,725,000 $1,800,000 $1,738,500 $1,145,000
PRICE/SF .... $299,100 $159,574 $267,462 $101,507
SELLER *** Clovis Centerpoint LP Matthew Prickett Walmsley Trust Dalena Family BUYER *** CA Clovis St LLC Donald Pickett Marc Opolo Enis Inc Butter Inv. Group LLC DOC# - 26108 48949 34282 169852
PROPERTY CONTACT *** Robert Fena Bill Daly Patrick Monreal Dick Ellsworth 559-256-2436 559-490-2500 559-284-9028 559-447-6247
RIGHTS CONV'D
I
Fee Simple I Fee Simple Fee Simple Fee Simple Fee Simple ADJ. SALE PRICE ... $1,725,000 $1,800,000 $1,738,500 $1,145,000
FINANCING
I
*** I All Cash All Cash All Cash Conv./Cash
ADJ. SALE PRICE *** $1,725,000 $1,800,000 $1,738,500 $1,145,000 COND. OF SALE
I
***
I
Market Market Market Market
CONCESSIONS *** None None None None
ADJ. SALE PRICE *** $1,725,000 $1,800,000 $1,738,500 $1,145,000 DATE OF SALE ... December-17 April-17 March-18 December-17 ADJ. SALE PRICE - $1 ,725,000 $1,800,000 $1,738,500 $1,145,000 SITE
LOCATION Average Good -25% Average Good -25% Average- I 40% SIZE 435,164 251,224 491,357 283,140 491,357
ZONING RS-4 PCC M-3 15% R2 R-1 I 10%
VISIBILITY Good Good Average Average Average
ACREAGE 9.99 5.77 -5% 11 .28 6.50 -2.5% 11.28
IMPROVEMENTS None None None None None
ORIENTATION Interior Corner Interior Interior Interior
STREET FRONTAGE None Average Average Average Average
SHAPE Oval Rectangular Rectangular Rectangular Irregular OFF SITES Good Good Average 15% Good Average I 15%
UTILmES Available Available Available Available None 15% ADUSTED PRICE *** $1,207,500 -30% $2,340,000 30% $1,260,413 -27.5% $2,061,000 r 80% ADJUST. PRICE/SF *** $209,370 $207,447 $193,910 $182,713 36 kHdi•l&311
Data use subject to license.
® Delorme. Delorme Slreel Alias USA® 2011.
1w,w,delorme.com
COMPARABLE SALES MAP
.. ,Amolll@a)lcli •
a .'
-.r
l
MN (12.7" E)
37 SALES APPROACH
~ml
0 1 2 3
Data Zoom 10-6
SALES APPROACH
COMPARABLE PHOTOS
SALE 1 SALE 2
SALE 3 SALE4
38 SALES APPROACH
Value Conclusion
The comparables are considered to be the best available at the time of this appraisal. With the most similar physical characteristics and features as the subject, they do provide for a reasonable value conclusion. All the comparables represented transfer of fee simple ownership. All of the comparables were financed with conventional or seller financing at market rates. As such, no adjustment for favorable financing is considered warranted. All the sales were deemed as market transactions and no adjustment is warranted. No concessions were noted for the sales.
After adjustment, the sales selected for direct comparison to the subject, range in price from approximately $182,713 to $209,370 per usable acre, with an adjusted average of $198,360.
Sales Equal weight is given to all the comparables as they bracket the subject's features. After review and analysis of the comparable sales, we conclude that a unit price for the subject just near the average or $200,000 per usable acre is supportable. Accordingly, the fee simple value of the subject is calculated as follows:
$200,000/Acre x 9.99 Acres = $1,998,000
Rounded = $2,000,000
Hypothetical Value Conclusion by the Sales Approach
The opinion of hypothetical value for the subject property, by the Sales Approach, as of August 1, 2018, was:
TWO MILLION DOLLARS
($2,000,000)
39 RECONCILIATION OF VALUE
RECONCILIATION OF VALUE
BAAR was instructed to estimate the market value of the leased fee estate in the subject property.
The value conclusion for each applicable approach is summarized below.
Cost Approach
SUMM~RY OF VAUJE CONCLUSIONS
PtS IS LEASED FEE INJEREST
Sales Comparison Approach
Income Capitalization Approach
Not Applied
$2,000,000
Not Applied
Source: BAAR
The subject was appraised using the Sales Approach only. The Cost Approach is not applicable given the dilapidated improvements and the primary value associated with the land area. The Income Approach is not applicable for the valuation of the subject as it is not a viable income producing property and there is no comparable/similar rental data available. The Sales Approach is given primary weight as it is the only approach that was developed.
HYPOTHETICAL MARKET VALUE
Based on the appraisal techniques applied and the results thereof, it is the opinion that the "Hypothetical Value" of the fee simple interest in the subject property in its proposed condition, as of August 1, 2018, subject to the certifications, assumptions, limiting conditions, and estimated exposure period of 12 months, was:
TWO MILLION DOLLARS
($2,000,000)
40 ADDENDUM
ADDENDUM
QUALi FiCA TIONS OF APPRAISERS / LICENSES
ASSUMPTIONS AND LIMITING CONDITIONS
ADDENDUM
ADDENDUM
APPRAISER RESUME
APPRAISER'S NAME: Adam J. Hardej, Jr.
FIRM NAME: BAAR Realty Advisors FAXNM: 800-851-1855
Employment for the Last Ten Years
BAAR Realty Advisors - California, Florida, & New England
PRINCIPAUOWNER - FULL-SERVICE NATIONAL REAL ESTA TE APPRAISAL & CONSUL TING FIRM • Appraisal & Consulting
• Expert Witness Services
Key Global Finance (WHOLLY-OWNED SUBSIDIARY OF KEYCORP)
MANAGING DIRECTOR, VP OF UNDERWRITING AND ACQUISITIONS
• Direct national acquisitions, due diligence and underwriting in 20+ states.
CB Richard Ellis
2001 - Present
1996 - 2001
1994 -1996
VICE PRESIDENT, REGIONAL MANAGER (CA, CENTRAL VALLEY) - APPRAISAL & CONSUL TING SERVICES- • Member Golf & Lodging specialty Valuation Group
Education
MBA, THE HAAS SCHOOL OF BUSINESS, THE UNIVERSITY OF CALIFORNIA, Berkeley, CA BA, Classics I Economics, BOWDOIN COLLEGE, Brunswick, ME Appraisal Courses and Seminars for the last ten years:
Advanced Land Valuation
USPAP Update
USPAP Update
USPAP Update
USPAP Update
USPAP Update
USPAP Update
USPAP Update
HP12C Course
Resid. Subdivision Analysis
URAR Review
FL Law
CT Law
USPAP
USPAP
Economic Outlook
Seaport Planning
General Comp Exam
Demo Writing Seminar
Valuation Analysis
Advanced Applications
Adv. Income Capitalization
USPAP, Part B
Appraisal Procedures
Basic Income Cap
USPAP, Part A
7 hrs
7 hrs
7 hrs
7 hrs
7 hrs
7 hrs
7 hrs
7 hrs
7 hrs
5 hrs
14 hrs
3 hrs
3 hrs
16 hrs
16 hrs
2 hrs
2 hrs
MAI
15 hrs
40 hrs
40 hrs
40 hrs
11 hrs
39 hrs
39 hrs
16 hrs
3/18
12/17
12/15
4/14
3/12
2/10
5/08
2/06
11/04
11/04
10/04
10/04
9/04
4/04
3/02
1 /01
5/00
2/99
9/97
6/96
9/95
6/94
9/93
7/93
7/93
11/92
Appraisal Institute
MBREA
MBREA
Appraisal Institute
Appraisal Institute
Appraisal Institute
Appraisal Institute
Appraisal Institute
Appraisal Institute
Bert Rodgers Schools
Bert Rodgers Schools
Appraisal Institute
Prof. Valuation & Real Estate School
Appraisal Institute
Appraisal Institute
Appraisal Institute
Appraisal Institute
Appraisal Institute
Appraisal Institute
Appraisal Institute
Appraisal Institute
Appraisal Institute
Appraisal Institute
Appraisal Institute
Appraisal Institute
Appraisal Institute
For the SO-month period, May 1991 - June 1996, I personally completed over 3,386 hours of commercial appraisals.
Professional Licenses & Designations
• State of California, Certified General Appraiser AG018716 • Designated Appraiser - ASA & MAI
• Qualified Expert Witness: Real Estate and Municipal-based Receivables (i.e. tax liens) related cases 1974 -1991
1979 -1983
Business, Consumer Services & Housing Agency
BUREAU OF REAL ESTATE APPRAISERS
REAL ESTATE APPRAISER LICENSE
Adam J. Hardej
has successfully met the requirements for a license as a residential and commercial real estate appraiser in the State of California and is, therefore, entitled to use the title:
"Certified General Real Estate Appraiser"
This license has been issued in accordance with the provisions of the Real Estate Appraisers' Licensing and Certification Law.
BREA APPRAISER IDENTIFICATION NUMBER: AG O 18716
Effective Date:
Date Expires:
May 7, 2017
May 6, 2019
~ .AJrtaJt:i;:-
3034627
APPRAISER'S NAME:
FIRM NAME:
FIELD OFFICES:
EMAIL:
APPRAISER RESUME
Luis Lorca
BAAR Realty Advisors
San Francisco / Salinas
lu is@baarrealtyadvi. rs.com
DIRECT:
MOBILE
FAX:
831-887-0118
415-412-9232
415.358-5956
Mr. Lorca is an experienced real estate professional with over 10 years of experience in all property types.
PROFESSIONAL EXPERIENCE
BAAR REAL TY ADVISORS - San Francisco & Salinas
2010-Present
Managing Director
• Appraisal & Consulting
• Expert Witness Services
• Business Valuations
• Private Money Investment Advisory
• Manage Field Appraisal Team
• Investment Advisory
• Tax Assessment Appeals
PROPERTY SCIENCES GROUP- Pleasant
2001-2010
Senior Analyst
• Commercial & Residential property appraisal expertise • Expertise Across a Broad Range of Property Types
• Managed Litigation Support Team
• DCF Modeling
• Portfolio Valuation
• Assisted Proprietary Software Development Team
EDUCATION EXPERIENCE
• MBA, Saint Mary's College, Moraga, CA
• BS, International Business, University of San Francisco
PROFESSIONAL LICENSES & ACTIVITIES
• California Real Estate Broker's License (California)
• State Certified General Licensed Appraiser (California, Oregon, Washington) • Appraisal Institute (Candidate for MAI Designation)
REFERENCES AVAILABLE
Business, Consumer Services & Housing Agency
BUREAU OF REAL ESTATE APPRAISERS
REAL EST ATE APPRAISER LICENSE
:> Luis R. Lorca
has successfully met the requirements for a license as a residential and commercial real estate appraiser in the j State of California and is, therefore, entitled to use the title: I I I
"Certified General Real Estate Appraiser"
This license has been issued in accordance with the provisions of the Real Estate Appraisers' Licensing and Certification Law.
BREA APPRAISER IDENTIFICATION NUMBER: AG 030345
Effective Date: March 19, 2017
Date Expires: March 18, 2019
.AJ11/ad;;;-
3031~07
ADDENDUM
ASSUMPTIONS AND LIMITING CONDITIONS
1. Unless otherwise specifically noted in the body of the report, it is assumed that title to the property or properties appraised is clear and marketable and that there are no recorded or unrecorded matters or exceptions to total that would adversely affect marketability or value. BAAR is not aware of any title defects nor has it been advised of any unless such is specifically noted in the report. BAAR, however, has not examined title and makes no representations relative to the condition thereof. Documents dealing with liens, encumbrances, easements, deed restrictions, clouds and other conditions that may affect the quality of title have not been reviewed. Insurance against financial loss resulting in claims that may arise out of defects in the subject property's title should be sought from a qualified title company that issues or insures title to real property.
2. It is assumed that improvements have been constructed or will be constructed according to approved architectural plans and specifications and in conformance with recommendations contained in or based upon any soils report(s).
Unless otherwise specifically noted in the body of this report, it is assumed: that any existing improvements on the property or properties being appraised are structurally sound, seismically safe and code conforming; that all building systems (mechanical/electrical, HVAC, elevator, plumbing, etc.) are, or will be upon completion, in good working order with no major deferred maintenance or repair required; that the roof and exterior are in good condition and free from intrusion by the elements; that the property or properties have been engineered in such a manner that it or they will withstand any known elements such as windstorm, hurricane, tornado, flooding, earthquake, or similar natural occurrences; and, that the improvements, as currently constituted, conform to all applicable local, state, and federal building codes and ordinances. BAAR professionals are not engineers and are not competent to judge matters of an engineering nature. BAAR has not retained independent structural, mechanical, electrical, or civil engineers in connection with this appraisal and, therefore, makes no representations relative to the condition of improvements. Unless otherwise specifically noted in the body of the report: no problems were brought to the attention of BAAR by ownership or management; BAAR inspected less than 100% of the entire interior and exterior portions of the improvements; and BAAR was not furnished any engineering studies by the owners or by the party requesting this appraisal. If questions in these areas are critical to the decision process of the reader, the advice of competent engineering consultants should be obtained and relied upon. It is specifically assumed that any knowledgeable and prudent purchaser would, as a precondition to closing a sale, obtain a satisfactory engineering report relative to the structural integrity of the property and the integrity of building systems.
Structural problems and/or building system problems may not be visually detectable. If engineering consultants retained should report negative factors of a material nature, or if such are later discovered, relative to the condition of improvements, such information could have a substantial negative impact on the conclusions reported in this appraisal. Accordingly, if negative findings are reported by engineering consultants, BAAR reserves the right to amend the appraisal conclusions reported herein.
3. Unless otherwise stated in this report, the existence of hazardous material, which may or may not be present on the property was not observed by the appraisers. BAAR has no knowledge of the existence of such materials on or in the property. BAAR, however, is not qualified to detect such substances. The presence of substances such as asbestos, urea formaldehyde foam insulation, contaminated groundwater or other potentially hazardous materials may affect the value of the property. The value estimate is predicated on the assumption that there is no such material on or in the property that would cause a loss in value. No responsibility is assumed for any such conditions, or for any expertise or engineering knowledge required to discover them. The client is urged to retain an expert in this field, if desired.
We have inspected, as thoroughly as possible by observation, the land; however, it was impossible to personally inspect conditions beneath the soil. Therefore, no representation is made as to these matters unless specifically considered in the appraisal.
4. All furnishings, equipment and business operations, except as specifically stated and typically considered as part of real property, have been disregarded with only real property being considered in the report unless otherwise stated. Any existing or proposed improvements, on or off-site, as well as any alterations or repairs considered, are assumed to be completed in a workmanlike manner according to standard practices based upon the information submitted to BAAR. This report may be subject to amendment upon re-inspection of the subject property subsequent to repairs, modifications, alterations and completed new construction. Any estimate of Market Value is as of the date indicated; based upon the information, conditions and projected levels of operation.
5. It is assumed that all factual data furnished by the client, property owner, owner's representative, or persons designated by the client or owner to supply said data are accurate and correct unless otherwise specifically noted in the appraisal report. Unless otherwise specifically noted in the appraisal report, BAAR has no reason to believe that any of the data furnished contain any material error. Information and data referred to in this paragraph include, without being limited to, numerical street addresses, lot and block numbers, Assessor's Parcel Numbers, land dimensions, square footage area of the land, dimensions of the improvements, gross building areas, net rentable
ADDENDUM
areas, usable areas, unit count, room count, rent schedules, income data, historical operating expenses, budgets, and related data. Any material error in any of the above data could have a substantial impact on the conclusions reported. Thus, BAAR reserves the right to amend conclusions reported if made aware of any such error.
Accordingly, the client-addressee should carefully review all assumptions, data, relevant calculations, and conclusions within 30 days after the date of delivery of this report and should immediately notify BAAR of any questions or errors.
6. The date of value to which any of the conclusions and opinions expressed in this report apply, is set forth in the Letter of Transmittal. Further, that the dollar amount of any value opinion herein rendered is based upon the purchasing power of the American Dollar on that date. This appraisal is based on market conditions existing as of the date of this appraisal. Under the terms of the engagement, we will have no obligation to revise this report to reflect events or conditions, which occur subsequent to the date of the appraisal. However, BAAR will be available to discuss the necessity for revision resulting from changes in economic or market factors affecting the subject.
7. BAAR assumes no private deed restrictions, limiting the use of the subject property in any way.
8. Unless otherwise noted in the body of the report, it is assumed that there are no mineral deposit or subsurface rights of value involved in this appraisal, whether they be gas, liquid, or solid. Nor are the rights associated with extraction or exploration of such elements considered unless otherwise stated in this appraisal report. Unless otherwise stated it is also assumed that there are no air or development rights of value that may be transferred.
9. BAAR is not aware of any contemplated public initiatives, governmental development controls, or rent controls that would significantly affect the value of the subject.
10. The estimate of Market Value, which may be defined within the body of this report, is subject to change with market fluctuations over time. Market value is highly related to exposure, time promotion effort, terms, motivation, and conclusions surrounding the offering. The value estimate(s) consider the productivity and relative attractiveness of the property, both physically and economically, on the open market.
11. Any cash flows included in the analysis are forecasts of estimated future operating characteristics are predicated on the information and assumptions contained within the report. Any projections of income, expenses and economic conditions utilized in this report are not predictions of the future. Rather, they are estimates of current market expectations of future income and expenses. The achievement of the financial projections will be affected by fluctuating economic conditions and is dependent upon other future occurrences that cannot be assured. Actual results may vary from the projections considered herein. BAAR does not warrant these forecasts will occur.
Projections may be affected by circumstances beyond the current realm of knowledge or control of BAAR.
12. Unless specifically set forth in the body of the report, nothing contained herein shall be construed to represent any direct or indirect recommendation of BAAR to buy, sell, or hold the properties at the value stated. Such decisions involve substantial investment strategy questions and must be specifically addressed in consultation form.
13. Also, unless otherwise noted in the body of this report, it is assumed that no changes in the present zoning ordinances or regulations governing use, density, or shape are being considered. The property is appraised assuming that all required licenses, certificates of occupancy, consents, or other legislative or administrative authority from any local, state, nor national government or private entity or organization have been or can be obtained or renewed for any use on which the value estimates contained in this report is based, unless otherwise stated.
14. This study may not be duplicated in whole or in part without the specific written consent of BAAR nor may this report or copies hereof be transmitted to third parties without said consent, which consent BAAR reserves the right to deny. Exempt from this restriction is duplication for the internal use of the client-addressee and/or transmission to attorneys, accountants, or advisors of the client-addressee. Also exempt from this restriction is transmission of the report to any court, governmental authority, or regulatory agency having jurisdiction over the party/parties for whom this appraisal was prepared, provided that this report and/or its contents shall not be published, in whole or in part, in any public document without the express written consent of BAAR which consent BAAR reserves the right to deny. Finally, this report shall not be advertised to the public or otherwise used to induce a third party to purchase the property or to make a "sale" or "offer for sale" of any "security", as such terms are defined and used in the Securities Act of 1933, as amended. Any third party, not covered by the exemptions herein, who may possess this report, is advised that they should rely on their own independently secured advice for any decision in connection with this property. BAAR shall have no accountability or responsibility to any such third party.
15. Any value estimate provided in the report applies to the entire property, and any pro ration or division of the title into fractional interests will invalidate the value estimate, unless such pro ration or division of interests has been set forth in the report.
16. The distribution of the total valuation in this report between land and improvements applies only under the existing program of utilization. Component values for land and/or buildings are not intended to be used in conjunction with any other property or appraisal and are invalid if so used.
ADDENDUM
17. The maps, plats, sketches, graphs, photographs and exhibits included in this report are for illustration purposes only and are to be utilized only to assist in visualizing matters discussed within this report. Except as specifically stated, data relative to size or area of the subject and comparable properties has been obtained from sources deemed accurate and reliable. None of the exhibits are to be removed, reproduced, or used apart from this report.
18. No opinion is intended to be expressed on matters, which may require legal expertise or specialized investigation, or knowledge beyond that customarily employed by real estate appraisers. Values and opinions expressed presume that environmental and other governmental restrictions/conditions by applicable agencies have been met, including but not limited to seismic hazards, flight patterns, decibel levels/noise envelopes, fire hazards, hillside ordinances, density, allowable uses, building codes, permits, licenses, etc. No survey, engineering study or architectural analysis has been made known to BAAR unless otherwise stated within the body of this report. If the Consultant has not been supplied with a termite inspection, survey or occupancy permit, no responsibility or representation is assumed or made for any costs associated with obtaining same or for any deficiencies discovered before or after they are obtained. No representation or warranty is made concerning obtaining these items. BAAR assumes no responsibility for any costs or consequences arising due to the need, or the lack of need, for flood hazard insurance. An agent for the Federal flood Insurance Program should be contacted to determine the actual need for flood Hazard Insurance.
19. Acceptance and/or use of this report constitutes full acceptance of the Contingent and Limiting Conditions and special assumptions set forth in this report. It is the responsibility of the Client, or client's designees, to read in full, comprehend and thus become aware of the aforementioned contingencies and limiting conditions. Neither the Appraiser nor BAAR assumes responsibility for any situation arising out of the Client's failure to become familiar with and understand the same. The Client is advised to retain experts in areas that fall outside the scope of the real estate appraisal/consulting profession if so desired.
20. BAAR assumes that the subject property analyzed herein will be under prudent and competent management and ownership; neither inefficient or super-efficient.
21. It is assumed that there is full compliance with all applicable federal, state, and local environmental regulations and laws unless noncompliance is stated, defined and considered in the appraisal report.
22. No survey of the boundaries of the property was undertaken. All areas and dimensions furnished are presumed to be correct. It is further assumed that no encroachments to the realty exist.
23. The Americans with Disabilities Act (ADA) became effective January 26, 1992. Notwithstanding any discussion of possible readily achievable barrier removal construction items in this report, BAAR has not made a specific compliance survey and analysis of this property to determine whether it is in conformance 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 ADA. If so, this fact could have a negative effect on the value estimated herein. Since BAAR has no specific information relating to this issue, nor is BAAR qualified to make such an assessment, the effect of any possible non-compliance with the requirements of the ADA was not considered in estimating the value of the subject property.
24. No consideration has been given in this appraisal as to the value of the property located on the premises considered by the appraiser to be personal property, nor has the appraiser given consideration to the costs of moving or relocating such personal property; only the real property has been considered in this appraisal.
Additionally, the comparable data was of real property only, and no personal property was considered with any market data.
25. The liability of the authors of this appraisal report, BAAR Realty Advisors, and any other employees / contractors of BAAR Realty Advisors is limited to the fee collected for preparation of this appraisal report.
26. Acceptance of, and/or use of, this appraisal report constitutes acceptance of the above conditions.
ADDENDUM
SPECIFIC ASSUMPTIONS AND LIMITING CONDITIONS
1. The estimate of marketing time is less than 12 months based upon such items as statistical information about days on market; information gathered through sales verification; interviews of marketing participants; and anticipated changes in market conditions. The reasonable marketing time is a function of price, time, use, and anticipated market conditions such as changes in the cost and availability of funds; not an isolated estimate of time alone.
2. This appraisal has been prepared from very limited property data provided by the client. Due to the lack of property specific descriptions and economic data from primary sources, BAAR was required to obtain information from best available sources, which included public records, owners, tenants and others. Every effort has been made to verify all information used within this report; however, it was in some instances necessary for BAAR to make critical assumptions to complete this assignment. BAAR reserves the right to amend its opinion of value at a later date should information become available which would significantly change the stated opinion of values.
All value opinions expressed herein are as of the date of value. In some cases, facts or opinions are expressed in the present time. All opinions are expressed as of the date of value, unless specifically noted. The research and preparation of this appraisal took place in August and September 2018. The effective date of valuation is August 1, 2018 for the as is value. There are no events that must occur between the date of last inspection of the subject property and the date of valuation in order to conclude the value reported herein. Thus the reported value is predicated on the specific assumption that the status of the property as of the date of valuation is not materially different that it was on the date of BAAR last inspection of the subject property. The appraisal is based on real estate and economic conditions as best perceived as of the date of the report.
3. The report and parts thereof and any additional material submitted, may not be used in any prospectus or printed material used in conjunction with the sale of securities or participation interests in Public Offering as defined under U.S. Security laws. Further, neither all nor any part of this appraisal report shall be disseminated to the general public by the use of advertising media, public relations media, news media, sales media, or other media for public communication without the prior consent of BAAR. The use of all or any part of this report in connection with real estate tax shelters, syndication of interests in real estate, the offering of securities, shares or partnership interests in real estate or any other public or private offering without the specific written consent of BAAR is not authorized.
Neither the whole, nor any part of this report, nor any reference thereto may be included in any document, statement, appraisal or circular without the signatories' prior written approval of the form and context in which it is to appear.
4. Any "after tax" income or investment analysis and resultant measures of return on investment are intended to reflect only the possible and general market considerations, whether as part of estimating value or estimating possible returns on investment at an assumed value or Price paid. Any stated conclusion referred to as "Investment Value" should not be construed as being representative of "Market Value" since the prospectus of the Client may be based upon individual investment requirements, as distinguished from the concept of market value, which is impersonal and detached. Market value and investment value may coincide when a client's investment criteria are consistent with prevailing market tends and conditions. In this instance, the two value estimates may be numerically identical, but the two types of value are not interchangeable. BAAR does not claim expertise in tax matters and advises the client to seek competent tax advice from a qualified income tax advisor.
5. The reasonable exposure time is 12 months based on current market conditions. The reasonable exposure time inherent in the market value concept is always presumed to precede the effective date of the appraisal. We also recognize the exposure time is different for various types of real estate and under various market conditions and that the reasonable exposure time should always incorporate the answer to the question, "For what kind of real estate at what value range?" rather than appear as a statement of an isolated time period.
6. This study is not being prepared for use in connection with litigation. Accordingly, no rights to expert testimony, pretrial or other conferences, deposition, or related services are included with this appraisal. If, as a result of this undertaking, BAAR or any of its principals, its appraisers or consultants are requested or required to provide any litigation services, such shall be subject to the provisions of BAAR engagement letter or, if not specified therein, subject to the reasonable availability of BAAR and/or said principals or appraisers at the time and shall further be subject to the party or parties requesting or requiring such services paying the then-applicable professional fees and expenses of BAAR either in accordance with the provisions of the engagement letter or arrangements at the time, as the case may be.
7. All data considered significant that was requested for this assignment was received by BAAR.
Exhibit H
FMFCD Storm Drainage and Flood Control Master Plan
For Drainage Area "SS"
"TT"
"AU"
LEGEND
o-- Existing Master Plan Facilities
Future Master Plan Facilities
- - - - - Drainage Area Boundary
EXHIBIT NO. 1
NOTE: THIS MAP IS SCHEMATIC,
DISTANCES, AMOUNT OF CREDITABLE
FACILMES, AND LOCATION OF INLET
BOUNDARIES ARE APPROXIMATE.
1 "= 1000'
SS MASTER PLAN
DRAINAGE AREA 11SS11
I! FRESNO METROPOLITAN FLOOD CONTROL DISTRICT
Prepared by: danielg
Date: 1/31/2020
Path; K:\Autocad\DWGSI0EXHIBITIMISCISS - TT Area Shift.mxd