_________________________________________________________________________________________________________ Associated Right of Way Services, Inc.
1255 Treat Blvd., Suite 815
Walnut Creek, CA 94597
925.691.8500
No. 22152
Appraisal Report
for
City of South San Francisco
Zhang Property
Portion of 701 Spruce Avenue
South San Francisco, CA
APN: 012-131-040
Prepared by:
Erik Woodhouse, MAI, R/W-AC
Senior Appraiser
Date of Report: May 10, 2023
Date of Value: March 27, 2023
Corporate Office
1255 Treat Blvd., Suite 815
Walnut Creek, CA 94597
925.691.8500 phone
925.691.6505 fax
www.arws.com
May 10, 2023
Ms. Nell Sellander
Director, Economic & Community Development Department
City of South San Francisco
PO Box 711
South San Francisco, CA 94083-0711
Re: Potential acquisition of a portion of 701 Spruce Avenue Owner: Zhang
Property Address: Portion of 701 Spruce Avenue, South San Francisco, CA APN: 012-131-040
Dear Ms. Sellander:
In accordance with our contract with the City of South San Francisco, an appraisal has been made of the market value of a portion of 701 Spruce Avenue, which may be acquired by the City of South San Francisco through a negotiated agreement. It is understood that the current owner of the property is seeking to sell the site to the City, and the acquisition would not be under the threat of condemnation. The final valuation conclusion is included in the following report.
This Appraisal Report is prepared in conformance with the Uniform Standards of Professional Appraisal Practice, Standard Rule 2-2(a). This report contains a description of the subject property, the property rights to be acquired, a valuation conclusion for the property to be acquired and an estimate of market value. I have completed an inspection of the subject, gathered pertinent information, sales and other data relevant to the valuation and analyzed the data to reach my conclusions. The property owner, Sky Zhang, accompanied me during an inspection of the property on March 27, 2023. The date of value is the date of the site inspection.
The opinion of the market value of the property interests considered for acquisition for the project is as shown in the following Summary of Salient Facts and Conclusions, which is made a part of this transmittal letter and appraisal report. The accompanying report is submitted for your review and approval for acquisition purposes and is subject to the Assumptions and Limiting Conditions included herein.
Sincerely,
Erik Woodhouse, MAI, R/W-AC
State Certified General Appraiser
CA License No. AG034630
City of South San Francisco
Potential acquisition of a portion of 701 Spruce Avenue APN: 012-131-040 – Zhang
Summary of Salient Facts and Conclusions
Estimate of Market Value
$250,000
Date of Valuation: March 27, 2023 (date of site visit)
Assessor's Parcel Number: 012-131-040
Property Location/Address: Portion of 701 Spruce Avenue, South San Francisco, CA
Owned Since: Over five years
Owner: Zhang
Occupied By: Owner
Principal Improvements: None
Total Site Area: Approximately 0.59 acre or 25,763 square feet Zoning: RL-8 – Low Density Residential
General Plan: Low Density Residential
Highest and Best Use:
As Vacant Hold for speculative residential development
Flood Hazard Information: Flood Zone X, Map No. 06081C0041E, dated October 16, 2012
Earthquake Information: Not located in an Earthquake Fault Zone Environmental Assessment: No known contamination issues The intent of this appraisal assignment is to conduct an investigation approximating the thoroughness that a typical buyer would conduct when considering similar property on the open market in the subject’s neighborhood and competing markets, and in conformance with the necessary policies and techniques used by appraisers in developing an estimate of market value.
An inspection of the subject was conducted to determine size, condition and utility of the property.
Searches of public records, real estate listings and sales services were employed to obtain data.
Relevant property sales were researched and confirmed to the extent possible. Since the City of South San Francisco
Potential acquisition of a portion of 701 Spruce Avenue APN: 012-131-040 – Zhang
property being appraised includes only land, the value of the land has been estimated by applying the Sales Comparison Approach. The conclusion of value for the Sales Comparison Approach is determined following appropriate adjustments to properties that have sold and are similar to the subject, considering the unit prices paid in the market for this type of property. The income and cost approaches are not considered applicable to this assignment since the approaches do not typically apply to the valuation of land.
City of South San Francisco
Potential acquisition of a portion of 701 Spruce Avenue APN: 012-131-040 – Zhang
Subject Location Map
City of South San Francisco
Potential acquisition of a portion of 701 Spruce Avenue APN: 012-131-040 – Zhang
Table of Contents
LETTER OF TRANSMITTAL
SUMMARY OF SALIENT FACTS AND CONCLUSIONS
SUBJECT LOCATION MAP
INTRODUCTION.....................................................................................................................................1 PURPOSE OF THE APPRAISAL ..................................................................................................................1 SCOPE OF ASSIGNMENT .........................................................................................................................1 INTENDED USE OF THE APPRAISAL...........................................................................................................1 CLIENT AND INTENDED USER OF THE APPRAISAL .......................................................................................1 DATE OF VALUATION ..............................................................................................................................1 PROPERTY INTEREST APPRAISED ............................................................................................................2 MARKET VALUE DEFINED........................................................................................................................2 REASONABLE EXPOSURE TIME................................................................................................................2 CERTIFICATION OF APPRAISER ................................................................................................................3 ASSUMPTIONS AND LIMITING CONDITIONS ................................................................................................5 HYPOTHETICAL CONDITIONS ...................................................................................................................7 EXTRAORDINARY ASSUMPTIONS..............................................................................................................7 GENERAL INFORMATION.....................................................................................................................9 REGION, CITY AND NEIGHBORHOOD DATA ................................................................................................9 REAL ESTATE MARKET CONDITIONS ......................................................................................................10 Residential Market........................................................................................................................................ 12 SUBJECT PROPERTY INFORMATION................................................................................................15 SUBJECT PROPERTY DATA SUMMARY ....................................................................................................15 PROPERTY DESCRIPTION......................................................................................................................21 Site Description............................................................................................................................................ 21 TITLE AND PROPERTY HISTORY .............................................................................................................23 Existing Easements...................................................................................................................................... 23 FLOOD HAZARD INFORMATION...............................................................................................................23 EARTHQUAKE INFORMATION..................................................................................................................24 ENVIRONMENTAL ASSESSMENT .............................................................................................................24 ZONING AND GENERAL PLAN OF THE SUBJECT PROPERTY .......................................................................25 HIGHEST AND BEST USE ANALYSIS ........................................................................................................27 VALUATION .........................................................................................................................................29 VALUATION METHODOLOGY ..................................................................................................................29 SALES COMPARISON APPROACH ...........................................................................................................30 Sales Data Summary.................................................................................................................................... 30 Sales Data Analysis...................................................................................................................................... 50 Valuation Conclusion.................................................................................................................................... 52 City of South San Francisco
Potential acquisition of a portion of 701 Spruce Avenue APN: 012-131-040 – Zhang
MAPS AND EXHIBITS
SURVEY MAP.......................................................................................................................................16 ASSESSOR’S PARCEL MAP....................................................................................................................17 SUBJECT AERIAL PHOTOGRAPH.............................................................................................................18 SUBJECT PROPERTY PHOTOGRAPHS .....................................................................................................19 COMPARABLE LAND SALE DATA SHEETS, AERIAL PHOTOGRAPHS, AND PARCEL MAPS ................................ 32
ADDENDA
APPRAISER QUALIFICATIONS
City of South San Francisco
Potential acquisition of a portion of 701 Spruce Avenue APN: 012-131-040 – Zhang
1 Introduction
Purpose of the Appraisal
The purpose of this appraisal is to furnish an opinion of the market value of the entire subject property as defined and described in this report. It is understood that the conclusions of this appraisal may be used to negotiate the acquisition of the property by the City of South San Francisco. It is understood that the acquisition would not be under the threat of condemnation.
Scope of Assignment
The subject property was inspected to determine the size, condition, and utility of the underlying land and existing improvements and/or encumbrances. Searches of public records, real estate listings and sales services were employed to obtain data. Analysis of market conditions was completed, both general and specific to the market. Market participants were interviewed.
Relevant property sales were researched and confirmed to the extent possible. The data is set out in the property valuation section.
The Appraisal Report conforms to Standards Rule 2-2(a) of the Uniform Standards of Professional Appraisal Practice. The information contained in this report is specific to the needs of the Client and for the intended use stated in this report. I am not responsible for unauthorized use of this report. The intent of this report is to provide sufficient data and analysis so as to have no misleading information and a conclusion of value of high reliability.
Intended Use of the Appraisal
The intended use of the appraisal and report is to provide the City of South San Francisco with an estimate of the market value of the subject property. It is understood that the conclusions of this appraisal may be used to negotiate the acquisition of the property by the City of South San Francisco. It is understood that the acquisition would not be under the threat of condemnation.
The appraisal report is subject to administrative review by the Client.
Client and Intended User of the Appraisal
The Client and the intended user of this appraisal report is the City of South San Francisco.
Date of Valuation
The property in this report has been valued as of March 27, 2023. The date of value is the date of the site inspection.
City of South San Francisco
Potential acquisition of a portion of 701 Spruce Avenue APN: 012-131-040 – Zhang
2 Property Interest Appraised
This appraisal addresses the fee simple estate in the subject property. The fee simple estate is defined as follows:
“Absolute ownership unencumbered by any other interest or estate, subject only to the limitations imposed by the governmental powers of taxation, eminent domain, police power, and escheat.” (The Dictionary of Real Estate Appraisal, Seventh Edition, published by the Appraisal Institute) Market Value Defined
12 CFR § 34.42(h); The Appraisal of Real Estate, 15th Edition, published by the Appraisal Institute)
“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, 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 each acting in what he or she considers his or her own best interest;
3. A reasonable time is allowed for exposure in the open market;
4. Payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and
5. The price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale.” Reasonable Exposure Time
Uniform Standards of Professional Appraisal Practice (USPAP 2020/2021 edition: Definitions) defines exposure time as follows:
“EXPOSURE TIME: an opinion, based on supporting market data, of the length of time that the property interest being appraised would have been offered on the market prior to the hypothetical consummation of a sale at market value on the effective date of the appraisal.”
Exposure time is presumed to be a reasonably adequate and sufficient period of time with adequate effort necessary to result in a sale fulfilling the definition of value. It is presumed to be a period immediately preceding the effective date of value. Based on the data researched for this assignment, an exposure time of approximately one year is estimated.
USPAP’s 2020-21 edition is effective through December 31, 2023.
City of South San Francisco
Potential acquisition of a portion of 701 Spruce Avenue APN: 012-131-040 – Zhang
3 Certification of Appraiser
I hereby certify that to the best of my knowledge and belief:
I have personally inspected the property that is the subject of this report.
The statements of fact contained in the appraisal report are true and correct, and the information upon which the opinions expressed therein are based is correct; subject to the Limiting Conditions therein set forth.
Neither my employment nor my compensation for completing this assignment is in any way contingent upon the values reported herein. My compensation is not contingent upon the developing or reporting of predetermined values or direction in value that favors the cause of the Client, the amounts of the value opinions, the attainment of a stipulated result or the occurrence of a subsequent event directly related to the intended use of this appraisal.
I have no present or prospective interest in the property that is the subject of this report and no personal interest with respect to the parties involved.
I have performed no services as an Appraiser or in any other capacity regarding the property that is the subject of this report within a three-year period immediately preceding the acceptance of this assignment.
I have no bias with respect to the property that is the subject of this report or to the parties involved with this assignment.
The reported analyses, opinions, and conclusions are limited only by the reported Assumptions and Limiting Conditions, and are my own personal, impartial, unbiased professional analyses, opinions, and conclusions.
The reported analyses, opinions, and conclusions were developed, and this report, to the best of my knowledge and belief, has been prepared in conformity with the requirements of the Code of Professional Ethics and Standards of Appraisal Practice of the Appraisal Institute, which includes the Uniform Standards of Professional Appraisal Practice (USPAP).
The use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representatives. As of the date of this report, I have completed the continuing education program for Designated Members of the Appraisal Institute.
The opinion of market value for the subject property as of the date of valuation is set forth in the Summary of Salient Facts and Conclusions and is based upon my independent appraisal and the exercise of professional judgment.
No one provided significant real property assistance to the person signing this Certification.
I hereby certify that my opinion of the market value of the property appraised as described in this report is included herein and that my opinions and conclusions were made subject to the City of South San Francisco
Potential acquisition of a portion of 701 Spruce Avenue APN: 012-131-040 – Zhang
4 Assumptions and Limiting Conditions in this report and without collusion, coercion or direction from anyone as to value.
May 10, 2023
Date Erik Woodhouse, MAI, R/W-AC
State Certified General Appraiser
CA License No. AG034630
City of South San Francisco
Potential acquisition of a portion of 701 Spruce Avenue APN: 012-131-040 – Zhang
5 Assumptions and Limiting Conditions
The following Assumptions and Limiting Conditions have been relied upon and used in making this appraisal and estimating the respective values required by the purpose of the appraisal and its intended use.
• No responsibility is assumed for legal or title considerations. Title to the property is assumed to be good and marketable, unless otherwise stated in this report. • The property is appraised free and clear of any or all liens and encumbrances, unless otherwise stated in this report.
• Responsible ownership and competent property management are assumed, unless otherwise stated in this report.
• The information furnished by others is believed to be reliable. However, no warranty is given for its accuracy.
• Sketches, plat maps, or photographs contained in this report are included to assist the reader in visualizing properties and no survey has been made of the property by the Appraiser.
• No responsibility is assumed for discovery of hidden or non-apparent conditions of the property, subsoil, or the structures that render it more or less valuable. Encroachment of real property improvements is assumed to not exist. No responsibility is assumed for arranging for engineering studies or a survey, which may be required to discover these conditions.
• It is assumed that the subject is in full compliance with all applicable Federal, State, and local environmental regulations and laws, unless otherwise stated in this report. • It is assumed that all applicable zoning and use regulations and restrictions have been complied with, unless nonconformity has been stated, defined, and considered in this report.
• It is assumed that all required licenses, certificates of occupancy, or other legislative or administrative authority from any local, state, or national governmental or private entity or organization have been, or can be, obtained or renewed for any use on which the value conclusions contained in this report are based.
• The Appraiser is not a soil expert. The existing soil and substructure has been assumed adequate for existing or proposed uses unless contrary information is provided and contained in this report. It is advisable to have a soil analysis and report completed by a qualified soil engineer, or other qualified expert, so that any interested party will become knowledgeable as to the important soil information including seismic data, soil contaminants, type of fill, if any, or other relevant matters.
City of South San Francisco
Potential acquisition of a portion of 701 Spruce Avenue APN: 012-131-040 – Zhang
6 • Unless otherwise stated in this report, it is assumed that there are no hazardous or toxic substances in the soil comprising the subject land.
• Unless otherwise stated in this report, the subject property is appraised without a specific compliance survey having been conducted to determine if the property is or is not in conformance with the requirements of the Americans with Disabilities Act. The presence of architectural and communications barriers that are structural in nature and would restrict access by disabled individuals may adversely affect the property’s values, marketability, or utility.
• The distribution, if any, of the total valuation in this report between land and improvements applies only under the stated program of utilization. The separate allocations for land and improvements must not be used in conjunction with any other appraisal and are invalid if so used.
• Possession of this report, or a copy thereof, does not carry with it the right of publication.
It may not be used for any purpose by any person other than the party to whom it is addressed without the written prior consent of the Appraiser, and in any event, only with proper written qualification and only in its entirety.
• The delivery and/or possession of this report does not require the Appraiser to attend or give testimony at any meeting, public hearing, pretrial conference, deposition or court trial unless there is a written agreement between the Appraiser and the party possessing or relying on this report or requesting such services.
• Neither all nor any part of the contents of this report (especially any conclusions as to value, the identity of the Appraiser, or the firm with which the Appraiser is connected) shall be disseminated to the public through advertising, public relations, news sales, or other media.
• A preliminary title report for the subject property was not provided. The Appraiser relied on public records, assessor’s parcel maps, and/or exhibits provided by the Client and current property owner to determine the location, size, and shape of the subject property.
Additionally, property boundaries were staked by survey commissioned by the property owner.
City of South San Francisco
Potential acquisition of a portion of 701 Spruce Avenue APN: 012-131-040 – Zhang
7 Hypothetical Conditions
Uniform Standards of Professional Appraisal Practice (USPAP 2020/2021 edition: Definitions) defines hypothetical condition as follows:
“HYPOTHETICAL CONDITION: a condition, directly related to a specific assignment, which is contrary to what is known by the appraiser to exist on the effective date of the assignment results, but is used for the purpose of analysis.
Comment: Hypothetical conditions are contrary to known facts about physical, legal, or economic characteristics of the subject property; or about conditions external to the property, such as market conditions or trends; or about the integrity of data used in an analysis.”
The following hypothetical conditions are used for this appraisal and may affect the assignment results:
• According to the property owner, a fence located within the southwest corner of the subject property is owned by the City of South San Francisco, which owns the adjoining parcel to the southwest, and is encroaching on the subject site. This appraisal has been conducted as if this encroachment were not present.
USPAP’s 2020-21 edition is effective through December 31, 2023.
Extraordinary Assumptions
Uniform Standards of Professional Appraisal Practice (USPAP 2020/2021 edition: Definitions) defines extraordinary assumptions as follows:
“EXTRAORDINARY ASSUMPTION: an assignment-specific assumption as of the effective date regarding uncertain information used in an analysis which, if found to be false, could alter the appraiser’s opinions or conclusions.
Comment: Uncertain information might include physical, legal, or economic characteristics of the subject property; or conditions external to the property, such as market conditions or trends; or about the integrity of data used in an analysis.” The following extraordinary assumptions are used for this appraisal and may affect the assignment results:
• The area of the subject property being appraised was derived from a professional survey commissioned and provided by the property owner. It is assumed that the area as identified and described is reasonably accurate.
• Current zoning and General Plan maps at the City of South San Francisco show that the subject property has land use designations reflecting open spaces uses. However, City of South San Francisco
Potential acquisition of a portion of 701 Spruce Avenue APN: 012-131-040 – Zhang
8 according to Billy Gross, Principal Planner with the City of South San Francisco, the designations for the subject property are displayed erroneously on the City’s maps, and the correct zoning designation is RL, Low Density Residential. The correct General Plan designation for the subject is also Low Density Residential. It is assumed that this information provided by the City of South San Francisco Planning Department, which contradicts what is shown on publicly available mapping resources, is accurate. • The subject property is partially encumbered by a public trail owned and operated by the City of South San Francisco. It is understood that there is no easement for this trail.
However, according to legal counsel for the City, the trail could endure as a prescriptive easement.
USPAP’s 2020-21 edition is effective through December 31, 2023.
City of South San Francisco
Potential acquisition of a portion of 701 Spruce Avenue APN: 012-131-040 – Zhang
9 General Information
Region, City and Neighborhood Data
The subject property is located in the City
of South San Francisco, within San Mateo
County. San Mateo County is one of the
nine counties comprising what is known
as the San Francisco Bay Area. San
Mateo County was formed from parts of
San Francisco County and Santa Cruz
County in 1856. San Mateo County totals
roughly 744 square miles (293 square
miles are covered by water) and makes up
most of the San Francisco Peninsula that
extends from the San Francisco Bay
shoreline to the hillsides of the Santa Cruz
Mountains and neighboring Santa Clara
County. The county is geographically
divided by the Santa Cruz Mountains with
most development occurring along the
eastern, or bay, side. The majority of San
Mateo’s coastline is occupied by state
beaches and has limited development
potential due to state regulation. Industry is situated closest to the bay along the El Camino Real/Highway 101 Corridor, with pockets of commercial and residential areas stretching westward into the foothills. The California Department of Finance estimates San Mateo County’s population at 737,644 people as of January 2023, which represents a 0.4% decrease from the estimated population posted a year prior.
There are 20 incorporated cities in San Mateo County, including the City of South San Francisco, where the subject is located. South San Francisco covers approximately 9.20 square miles of land situated toward the northern part the San Francisco Peninsula, and about 21 square miles of water. It is bounded by San Bruno Mountain State Park to the north, the City of San Bruno to the south, the San Francisco Bay to the east, and Daly City and Milagra Ridge open space to the west. The city combines residential uses and industrial and commercial elements in a largely urban environment. After South San Francisco’s incorporation in 1908, industry remained the city's main economic focus through the 1950s. In the latter half of the 20th Century major manufacturers closed, and new development was focused on office parks, housing, high-rise hotels, and yacht harbors. The biotechnology giant Genentech originated in South San Francisco in 1976, leading to the City's identity as "the birthplace of biotechnology.” South San Francisco population growth has tapered off from previous years to a population of 64,323 according to 2023 estimates provided by the California Department of Finance. South San Francisco is the fourth largest city in the county.
City of South San Francisco
Potential acquisition of a portion of 701 Spruce Avenue APN: 012-131-040 – Zhang
10 South San Francisco and San Mateo County benefit from a number of freeways, arterials, and expressways that provide access to most areas of the region. The primary transportation corridors that pass through South San Francisco include Interstate 280, U.S. Highway 101, and State Route
82. Caltrain rail transportation, Bay Area Rapid Transit (BART), SamTrans bus services, and the San Francisco Bay Ferry provide mass transit for the city and greater Bay Area region, while the San Francisco International Airport is located adjacent the city limits to the south.
The subject property is located in the Sign Hill neighborhood of South San Francisco, a predominantly single-family residential neighborhood overlooking the city to the east and south.
The neighborhood is home to the South San Francisco hillside sign, which rises to the north of the city, with large white letters that proclaim "South San Francisco, The Industrial City". The sign, a tribute to the city's industrial past, is listed on the National Register of Historic Places, and it is located about a quarter-mile from the subject. The Ridge Trail, which passes through portions of the subject site, provides a hiking path to the sign.
Real Estate Market Conditions
Since March 2020, the world has been dealing with the spread of the coronavirus, COVID-19, a global pandemic. In the initial stages of the outbreak the economy experienced a significant downturn, with most major markets declining by as much as 20%. Most COVID-19 related restrictions were lifted in mid-2021 throughout the state, with approximately half of Californians vaccinated at that time. The progression of COVID-19 continued with the emergence of multiple variants but has now shifted from a pandemic to an endemic.
Real gross domestic product (GDP) is a comprehensive measure of economic activity, and the most popular indicator of the nation's overall economic health. According to the Bureau of Economic Analysis (BEA), the GDP increased at an annual rate of 2.6% in the fourth quarter of 2022, according to the “third” estimate. According to the BEA, the increase in the fourth quarter “reflected increases in private inventory investment, consumer spending, nonresidential fixed investment, federal government spending, and state and local government spending that were partly offset by decreases in residential fixed investment and exports. Imports decreased,” The percentage change in real GDP from the preceding quarter over the past few years through the end of the fourth quarter is shown in the graph below.
City of South San Francisco
Potential acquisition of a portion of 701 Spruce Avenue APN: 012-131-040 – Zhang
11 The decline in GDP growth in 2022 came from a broad range of factors, including decreases in inventories, residential and nonresidential investment, and government spending at the federal, state and local levels. Consumer spending, as measured through the personal consumption expenditures price index, has increased as inflation accelerated. Inflation was at the root of much of the economy’s troubles in 2022. According to Freddie Mac, the average 30-year mortgage rate nationally has increased to 6.73% as of March 9, 2023, from a low of 2.65% as of January 7, 2021. The Federal Funds Rate target rate has increased from a range of 0%-0.25% as of March 2020 to its current range of 4.5%-4.75%, with more increases anticipated.
The Conference Board Consumer Confidence Index (CCI) is a barometer of the health of the U.S. economy from the perspective of the consumer. The index is based on consumers’ perceptions of current business and employment conditions, as well as their six-month outlook regarding business conditions, employment conditions, and income. As of April 2023, the Index stood at 101.3, down slightly from 104.0 in March 2023. According to Ataman Ozyildirim, Senior Director of Economics at The Conference Board, “while consumers’ relatively favorable assessment of the current business environment improved somewhat in April, their expectations fell and remain below the level which often signals a recession looming in the short-term. Consumers became more pessimistic about the outlook for both business conditions and labor markets. Compared to last month, fewer households expect business conditions to improve and more expect worsening of conditions in the next six months. They also expect fewer jobs to be available over the short term. April’s decline in consumer confidence reflects particular deterioration in expectations for consumers under 55 years of age and for households earning $50,000 and over. Meanwhile, April’s results show consumer inflation expectations over the next 12 months remain essentially unchanged from March at 6.2 percent—although that level is down substantially from the peak of
7.9 percent reached last year, it is still elevated. Overall purchasing plans for homes, autos, appliances, and vacations all pulled back in April, a signal that consumers may be economizing amid growing pessimism.”
City of South San Francisco
Potential acquisition of a portion of 701 Spruce Avenue APN: 012-131-040 – Zhang
12 Comparatively, the index stood at 108.3 in December 2022. An index reading of 100 generally indicates a stable economy in neither a peak nor trough.
The unemployment rate is the most frequently cited indicator of labor market health and data from the job market gives a picture of a sudden, weakened economy at the onset of the COVID pandemic in early 2020. Since spiking in the 2nd quarter of 2020, the unemployment rate has been on a downward trend to the historically low rates seen prior to the pandemic. However, rates have over the last few months unemployment rates have once again been on the rise. The California Employment Development Department reports that the State unemployment rate increased to
4.8% in March 2023, unchanged from February 2023 and slightly above 4.6% in January 2023.
San Mateo County had an unemployment rate of 2.8%, as reported for March 2023, unchanged from February and a slight increase from the January 2023 estimate of 2.6%. in January and 5% in December 2022. The city of South San Francisco had an unemployment rate of 2.7%, as reported for March 2023.
Residential Market
Generally, housing is seen as one of the sectors to rise or fall as economic conditions improve or degrade. The California housing market ended 2020 on a high note, with the statewide median home price reaching record highs. That same momentum was carried forward in 2021, and in April, the median home price throughout the state reached above the $800,000 mark for the first time, according to the data released by the California Association of Realtors. The state-wide median home price has declined since that time, largely due to increases in interest rates and economic uncertainty.
While median home prices are an imperfect measure of the current value of any individual home, they do provide important information regarding the overall health of residential real estate markets. For January 2023, the median sales price of existing homes statewide was $751,330, down from $766,250 a year earlier. Meanwhile the number of sales of existing homes decreased
45.7% for all of California over the same time period.
In San Mateo County, sales of single-family re-sale homes declined by 31.3% year-over-year in February 2023, according to MLSListings source data. The following chart shows the monthly sales volumes since January 2019, as compiled by Compass.
City of South San Francisco
Potential acquisition of a portion of 701 Spruce Avenue APN: 012-131-040 – Zhang
13 According to Compass, at $1,766,500, the median sales price for single-family, re-sale homes in San Mateo County in February 2023 declined about 11% compared to last year. The chart displayed as follows shows the trend for median home sales prices in San Mateo County over the last four years (by month) through February 2023.
City of South San Francisco
Potential acquisition of a portion of 701 Spruce Avenue APN: 012-131-040 – Zhang
14 In South San Francisco, there were a total of 51 sales between November 2022 and February 2023, with a median house price of $1,175,000.
City of South San Francisco
Potential acquisition of a portion of 701 Spruce Avenue APN: 012-131-040 – Zhang
15 Subject Property Information
Subject Property Data Summary
Date of Valuation: March 27, 2023 (date of site visit)
Assessor's Parcel Number: 012-131-040
Property Location/Address: Portion of 701 Spruce Avenue, South San Francisco, CA
Owned Since: Over five years
Owner: Zhang
Occupied By: Owner
Principal Improvements: None
Total Site Area: Approximately 0.59 acre or 25,763 square feet (scaled) Zoning: RL-8 – Low Density Residential
General Plan: Low Density Residential
Highest and Best Use:
As Vacant Hold for speculative residential development
Flood Hazard Information: Flood Zone X, Map No. 06081C0041E, dated October 16, 2012
Earthquake Information: Not located in an Earthquake Fault Zone Environmental Assessment: No known contamination issues City of South San Francisco
Potential acquisition of a portion of 701 Spruce Avenue APN: 012-131-040 – Zhang
16 Survey Map
City of South San Francisco
Potential acquisition of a portion of 701 Spruce Avenue APN: 012-131-040 – Zhang
17 Assessor’s Parcel Map
SUBJECT
PORTION OF PARCEL
TO BE RETAINED
City of South San Francisco
Potential acquisition of a portion of 701 Spruce Avenue APN: 012-131-040 – Zhang
18 Subject Aerial Photograph
City of South San Francisco
Potential acquisition of a portion of 701 Spruce Avenue APN: 012-131-040 – Zhang
19 Subject Property Photographs
Northeasterly view across subject property.
Northerly view across subject property.
City of South San Francisco
Potential acquisition of a portion of 701 Spruce Avenue APN: 012-131-040 – Zhang
20 Subject Property Photographs
Easterly view across subject property, including Ridge Trail (foreground).
View of entrance stairway to Ridge Trail from Spruce Avenue (foreground).
City of South San Francisco
Potential acquisition of a portion of 701 Spruce Avenue APN: 012-131-040 – Zhang
21 Property Description
Site Description
The subject property is a portion of 701 Spruce Avenue, in South San Francisco, CA. The San Mateo County Assessor further identifies the property as a portion of APN 012-131-040. It is located approximately 180 feet west of Spruce Avenue, north of Diamond Avenue and south of Beech Avenue. Spruce Avenue is a residential arterial street leading to downtown South San Francisco to the south. Diamond and Beach Avenues are smaller, interior residential streets.
As previously described, the subject property is located in the Sign Hill neighborhood of South San Francisco, a predominantly single-family residential neighborhood overlooking the city to the east and south. The neighborhood is home to the South San Francisco hillside sign, which rises to the north of the city, with large white letters that proclaim "South San Francisco, The Industrial City". The sign, a tribute to the city's industrial past, is listed on the National Register of Historic Places, and it is located about a quarter-mile from the subject to the west. The Ridge Trail, which passes through portions of the subject site, provides a hiking path to the sign.
The subject property is currently a portion of a larger site that covers a flag-shaped area of 40,794 square feet, based on surveyed information provided by the property owner. The owner has sought to subdivide the site into multiple smaller lots, in accordance with the site’s zoning.
However, the City of South San Francisco has indicated that the proposal prepared by the owner would not be approved. Furthermore, as previously described, a portion of the Ridge trail crosses over both the portion of the parcel that the owner wishes to retain and the portion that the owner would like to sell to the City. The owner has sought to relocate the trail, but the City has indicated this would not be approved. It is understood that there is no easement for this trail. However, according to legal counsel for the City, the trail could endure as a prescriptive easement.
The site being appraised has irregular, rolling topography and an irregular shape. It has no roadway access or immediate access to utilities. Utilities are available to the single-family residence on the portion of the site the owner seeks to retain, but they would need to be extended to the subject site if development could be accommodated. Access to the site may be possible by circumventing the trail to the north. However, such feasibility would need to be further studied.
Access along the south boundary has been explored, but this could not be accommodated due to the trail and accompanying prescriptive easement. An access driveway traveling along the north side of the trail to the new proposed lot boundary would travel a distance of around 205 feet (scaled), and the distance between the existing fence surrounding the house on the portion of the property to be retained and the south lot boundary was scaled to be around 14 feet.
The subject property, as later described, has a zoning designation of RL-8, Low Density Residential, and the minimum lot size requirement for this zoning designation is 5,000 square feet. Based on the size of the subject, the site could potentially support up to five dwelling units.
However, due to physical constraints and the inability to comply with certain minimum site requirements, the City has indicated that subdividing the lot may not be possible.
Overall, the subject site has several conditions that would impair its marketability, including topography, lack of roadway access, lack of immediate access to utilities, the existence of a City of South San Francisco
Potential acquisition of a portion of 701 Spruce Avenue APN: 012-131-040 – Zhang
22 prescriptive easement for the portion of the Ridge Trail on the site, and no current approved subdivision creating a legally salable, subdivided lot.
City of South San Francisco
Potential acquisition of a portion of 701 Spruce Avenue APN: 012-131-040 – Zhang
23 Title and Property History
A preliminary title report for the subject property was not provided for this assignment. According to public records, the subject's fee ownership is vested in Tianyi Zhang.
The entire property, including the portions to be retained and the portion to be sold, was acquired in an arms-length transaction on February 5, 2018, for $1,420,000. The property included the existing five-bedroom, 1,995-square foot (per public records) home on the portion of the site being retained. Since this appraisal addresses only the value of the land proposed for sale, this prior sale is not considered relevant as an indicator of the subject property being appraised.
I am not aware of any leases or current offers to purchase the subject.
Existing Easements
As previously described, the subject property is partially encumbered by a public trail owned and operated by the City of South San Francisco. It is understood that there is no easement for this trail. However, according to legal counsel for the City, the trail could endure as a prescriptive easement.
There are no other known easements that encumber the subject property. It is recommended that a title report be ordered and reviewed prior to any financial decisions being made pertaining to the subject property.
Flood Hazard Information
The subject property is in a mapped area designated to be in Flood Zone X by the Federal Emergency Management Agency (FEMA). Flood zone “X” is defined as areas of minimal flood hazard, usually depicted on FEMA Flood Insurance Rate Maps as above the 500-year flood level.
The FEMA Flood Zone Map Panel is 06081C0041E and the effective date is October 16, 2012.
A copy of the Flood Insurance Rate Map is included as follows.
City of South San Francisco
Potential acquisition of a portion of 701 Spruce Avenue APN: 012-131-040 – Zhang
24 Earthquake Information
All properties in California are subject to some degree of seismic risk. The Alquist-Priolo special Studies Zone Act of 1972 was enacted by the State of California to regulate development near active earthquake faults. The Act required the State Geologist to delineate “special studies zones” along known active faults in California. Cities and counties affected by the identified zones must limit certain development projects within the zones unless geologic investigation demonstrates that the sites are not threatened by surface displacement from future faulting.
According to the California Department of Conservation, California Geological Survey, the subject property is not located in an Earthquake Fault Zone as designated under the Alquist-Priolo Earthquake Fault Zoning Act. Related development limitations, therefore, do not apply.
Environmental Assessment
An environmental assessment regarding the subject property was not provided for this assignment. The Department of Toxic Substances Control does not indicate any known City of South San Francisco
Potential acquisition of a portion of 701 Spruce Avenue APN: 012-131-040 – Zhang
25 contaminants present on the site. This appraisal assumes that no environmental remediation would be required.
Zoning and General Plan of the Subject Property
Zoning General Plan Current Use
RL-8 – Low Density
Residential
Low Density Residential Vacant
The zoning category for the subject is RL-8 – Low Density Residential.
According to the City of South San Francisco’s zoning code, The purpose of the residential zoning districts is to:
A. Accommodate a range of housing types consistent with the City’s General Plan.
B. Preserve, protect, and enhance the character of the City’s different residential neighborhoods and enhance the quality of life for the City’s residents.
C. Ensure adequate light, air, privacy, and open space for each dwelling.
D. Ensure that all future development and alterations to existing structures are compatible with surrounding homes and appropriate to the physical characteristics of the site and the area where the project is proposed.
E. Provide sites for public and semi-public land uses such as parks, libraries, and religious assembly uses to serve residents and complement surrounding residential development.
The RL-8 district specifically allows for residential development at a density of up to eight dwelling units per acre, which include detached, semi-attached, and attached units, as well as community gardens, day care centers, public park and recreation facilities, and short-term vacation rentals.
The following development standards apply in the RL-8 district:
City of South San Francisco
Potential acquisition of a portion of 701 Spruce Avenue APN: 012-131-040 – Zhang
26 Additional design criteria would also apply to the subject property due to its hillside location.
The General Plan land use designation for the subject is Low Density Residential.
According to the City of South San Francisco’s General Plan, the Low Density Residential designation is intended for detached, single-family residential development with maximum residential densities of up to eight dwelling units per acre.
Compliance
Although the subject property has not yet been subdivided to create its own legal lot, it appears that it would conform to the applicable zoning code and General Plan designation once access was granted to the site.
Min. Lot Area 5,000 sf (B)
Min. Lot Area, Corner 6,000 sf (B)
Min. Lot Width 50 ft
Min. Lot Width, Corner 60 ft
Min. Lot Depth 80 ft
Floor Area Ratio (FAR) 0.5 or 2,000 sf, whichever is greater Max. Lot Coverage 50%
Max. Primary Building (ft/stories) 28 ft/2 stories (D)
Max. Accessory Building
Min. Front Setback 15 ft (B) (C)
Min. Interior Side Setback 5 ft or 10% of lot width, whichever is greater, in no case less than 3 ft; 4 ft for SB9 units
Min. Street Side Setback 10 ft; 4 ft for SB9 units (C)
Min. Rear Setback 20 ft (H)
Min. Private Open Space 150 sf/unit
Min. Private Open Space Dimension
Min. Common Open Space ―
Min. Common Open Space Dimension 20 ft.
Min. Landscaping ―
8 ft. when located on the ground level; 6 ft. when located above the ground level
Lot Size
Building Height
12 ft if a floor slab is used; 15 ft if floor joist construction is used
Setbacks (B)
Landscaping and Open Space
City of South San Francisco
Potential acquisition of a portion of 701 Spruce Avenue APN: 012-131-040 – Zhang
27 Highest and Best Use Analysis
The following definition of the term “Highest and Best Use” provides a reasonable basis for analyzing the subject property:
The reasonable, probable and legal use of vacant land or improved properties which is physically possible, appropriately supported, financially feasible, and results in the highest value.
Inherent in this definition are the following four criteria:
Legally Permissible: What uses are permitted, given existing deed and lease restrictions, zoning, building codes, historic controls, and environmental regulations?
Physically Possible: What uses of the site are possible, given the physical characteristics as revealed in the site analysis?
Financially Feasible: Which possible and permissible uses will produce positive net income from the development of the site after paying operating expenses and other financial obligations?
Maximally Productive: Which financially feasible use will provide the highest value or rate of return on investment?
The primary purpose of the highest and best use analysis is to identify the most productive, competitive use to which the property can be put. This analysis is done in two parts. The first part considers the possible uses of the site as if vacant. The second part evaluates the improvements to determine if they represent the highest and best use or if they should be modified.
Another purpose of the highest and best use analysis is to assist in defining the scope of the appraisal. In investigating the highest and best use, items that affect value such as accrued depreciation and functional and external obsolescence are identified. Also, by defining the highest and best use the selection of the comparable sales is narrowed, as they typically have the same or similar highest and best use.
Based on the four tests of legally permissible, physically possible, financially feasible, and maximally productive, the highest and best use of the land has been analyzed.
In the case of the subject property, the legally permissible uses are determined by the City of South San Francisco Planning Department, which has zoning jurisdiction over the subject. The subject property, once subdivided, could legally potentially allow for development of up to five dwelling units, given the 5,000-square foot minimum lot size in the zoning district. However, as previously described, subject site has several physical conditions that would impair its marketability, including topography, lack of roadway access, lack of immediate access to utilities, the existence of a prescriptive easement for the portion of the Ridge Trail on the site, and no current approved subdivision creating a legally salable, subdivided lot. Due to physical City of South San Francisco
Potential acquisition of a portion of 701 Spruce Avenue APN: 012-131-040 – Zhang
28 constraints and the inability to comply with certain minimum site requirements, the City has indicated that subdividing the lot may not be possible.
Research of the market for lots similar to the subject indicates that a limited market exists for properties without existing roadway access. These lots are typically acquired as investments, with future planned development anticipated when infrastructure development serving them would be feasible. When these lots are located a great distance from roadway and utility infrastructure, the hold time and level of speculation is greater. The highest and best use of the subject property, upon approval of its subdivision from the remainder of the current legal lot, is for to hold for speculative development until access and utility infrastructure can be accommodated to make development of the parcel feasible.
City of South San Francisco
Potential acquisition of a portion of 701 Spruce Avenue APN: 012-131-040 – Zhang
29 Valuation
Valuation Methodology
There are three generally recognized approaches considered in the valuation of real property.
These are the cost approach, sales comparison approach, and income approach. The type and age of the property and the quantity and quality of the available data affect the applicability of each approach in a specific appraisal situation.
The Cost Approach estimates, through support sources, the cost of constructing the subject improvements. Accrued depreciation from all causes is estimated and deducted from the estimates of cost new of the improvements. The market value of the land is added to this depreciated cost estimate to indicate the value of the subject property by the cost approach. The Land Value Estimate in the valuation process is usually a separate step, which is generally accomplished through the application of the sales comparison approach. The land value conclusion is then incorporated into the cost approach.
The Sales Comparison Approach involves a search for recent sales of properties similar to the subject. The prices paid for these properties provide the basis for estimating the value of the subject by comparison. Adjustments are made for the differences in the properties as they compare to the subject. A correlation of the data provides a value estimate for the subject. This is the most used, and considered the most reliable, approach to estimating the value of land.
The Income Approach looks at the relationship between a property's income producing ability and the value buyers and sellers assign to the income. An estimate is made of the market rent to indicate an annual gross income. Estimated fixed and variable operating expenses are deducted from the annual gross income to provide an annual net operating income. An indicated value of the subject is derived through direct capitalization of the indicated net income by a market derived overall rate or through the use of the discounted cash flow technique.
Reconciliation involves consideration of the relevance and influence of each approach in relation to the actions of typical users and investors of properties and particularly the subject property.
The three indications of value are discussed and reconciled into a final conclusion of market value.
The City of South San Francisco has requested an appraisal of the current market value of the subject property. Since the subject property includes only land, only the value of the land has been estimated, by applying the Sales Comparison Approach. The prices paid for land with similar development potential as the subject provide a basis for estimating the value of the subject by comparison. The income and cost approaches are not considered applicable to this assignment since the approaches do not typically apply to the valuation of land.
City of South San Francisco
Potential acquisition of a portion of 701 Spruce Avenue APN: 012-131-040 – Zhang
30 Sales Comparison Approach
Research was conducted to find comparable land sales in the subject’s market area.
Due to the scarcity of data pertaining to the sale of similar land in the size range of the subject property, the search timeline was expanded accordingly. The search was also expanded in terms of location. The following table displays a summary of the selected sales, which are judged to be most representative of current market conditions for the subject property. The most comparable land sales reflecting the actions of buyers and sellers in the marketplace are summarized below.
Comparable data sheets, Assessor’s Parcel Maps and aerial photographs, photographs (when available) for each comparable sale are included on the following pages.
Sales Data Summary
Residential Land Sales Data
Address
No. City, State
APN
RL-01
San Carlos, CA
049-063-100
RL-02
Pacifica, CA
018-140-590, -060
RL-03
Pacifica, CA
016-364-040
RL-04 North of Hillcrest Dr.
Belmont, CA
043-042-740
RL-05 South Terminus Alhambra Dr
Belmont, CA
043-232-120
RL-06
Belmont, CA
043-165-170
Subject Portion of 701 Spruce Ave. DOV
South San Francisco, CA 03/27/23 N/A
Cresta Dr, North of
Alhambra Dr.
East of Scenic Way, South of
Brighton Rd.
Approx. 450 Feet North of
Rockaway Beach Ave.
North of Camborne Ave.,
West of Club Dr.
25,763
12/31/19 17,600
Dec-22 0.21
012-131-040 (portion)
0.59 Roughly
Rectangular/Sloping
RL Available Nearby
Low Density
Residential
12/24/19 16,475
Dec-19 0.38 HR-02 Available nearby $220,000
Hillside
Residential/Open
Irregular/Sloping
Sep-19 0.40 $100,000
$110,000
05/14/20 66,299
Feb-20 1.52 HR-02 None
Hillside
Residential/Open
Irregular/Sloping
HR-02 Available nearby
Hillside
Residential/Open
Irregular/Sloping
$275,000
01/08/23 9,000
$90,000
03/07/23 158,228
R-1 None
Open
Space/Agricultural/
Elongated/Sloping
R-1/B-3 None
Low Density
Residential
Rectangular/GentlySloping
Mar-23 3.63
Mar-23 $120,000
03/29/23
0.18 7,900
R-1/S-71/DR
Medium Density
Residential
None
Irregular/Sloping
Utilities Sales Price
Approx. Dimensions
Sales
Contract Date
Parcel Size
(Acres)
Parcel Size
(Sq. Ft.)
Zoning
COE General Plan
City of South San Francisco
Potential acquisition of a portion of 701 Spruce Avenue APN: 012-131-040 – Zhang
31 Comparable Land Sale Location Map
City of South San Francisco
Potential acquisition of a portion of 701 Spruce Avenue APN: 012-131-040 – Zhang
32 Comparable Land Sale Data Sheet – RL-01Compara ble La nd Sale Data Sheet s an d P Compa rabl e La nd Sal e Dat a Shee ts
Compara ble La nd Sa le Da ta S hee ts, A erial Phot ogra phs, a nd Parcel Ma ps Property Type Single Family Res. - Land
Sales Contract Date Mar-23
COE 03/29/23
Sales Price $120,000
Address North of Camborne Ave., West of
Club Dr.
City, State San Carlos, CA
Zip 94070
APN 049-063-100
Buyer
Seller
Document #
Terms
Parcel Size (Acres)
Parcel Size (Sq. Ft.)
Zoning
General Plan
Utilities
Approx. Dimensions
Entitlements
Verified By
Comments This is the sale of a 7,900-square foot landlocked parcel in San Carlos. The property is located on a down sloping hillside behind two existing single-family residences. A planned, or "paper", road adjoins the parcel to the north but would need to be extended approximately 850 feet from the north to accommodate development, along with public sewer and water infrastructure. The listing agent also reported that obtaining a sewer connection from the City of San Carlos would be cumbersome to obtain. The zoning for the site would allow one single-family dwelling. The buyer's agent reported that the buyer plans to hold the site as a long-term investment, and that the buyer and neighbors would have to coordinate to extend the roadway and utilities.
Yun Family Trust
Amanda Tucker
14058
All Cash to Seller
0.18 7,900
R-1/S-71/DR
Medium Density Residential
None
Max Reinhardt, Listing Agent
Samson Cheng, Buyer's Agent
Irregular/Sloping
None
City of South San Francisco
Potential acquisition of a portion of 701 Spruce Avenue APN: 012-131-040 – Zhang
33 Comparable Land Sale Parcel Map – RL-01
City of South San Francisco
Potential acquisition of a portion of 701 Spruce Avenue APN: 012-131-040 – Zhang
34 Comparable Land Sale Aerial Photograph – RL-01
City of South San Francisco
Potential acquisition of a portion of 701 Spruce Avenue APN: 012-131-040 – Zhang
35 Comparable Land Sale Data Sheet – RL-02
Property Type Single Family Res. - Land
Sales Contract Date Mar-23
COE 03/07/23
Sales Price $90,000
Address Approx. 450 Feet North of
Rockaway Beach Ave.
City, State Pacifica, CA
Zip 94044
APN 018-140-590, -060
Buyer
Seller
Document #
Terms
Parcel Size (Acres)
Parcel Size (Sq. Ft.)
Zoning R-1
General Plan
Utilities
Approx. Dimensions
Entitlements
Verified By
Open Space/Agricultural/Residential
Martinez et ux
Karen Sanford
10055
All Cash to Seller
3.63 158,228
Area on right was acquired in this transaction and
assembled with area on left.
Comments This is the sale of two parcels with a combined site area of 3.63 acres, located north of Rockaway Beach Avenue in Pacifica. The zoning for these parcels and the adjacent parcels to the west allows for the development of one dwelling unit per five acres of land.
The buyers owned the adjoining lots to the west, and acquisition of these two lots will allow for the development of one additional dwelling unit under the zoning, according to the agent interviewed. Accordingly, the buyers were motivated to acquire the site. The property has no street access; a street extension would have to be constructed over City of Pacifica land across an approximately 200 foot distance between the easterly parcel and the east terminus of Calera Terrace. There are no utilities to the site.
Max Reinhardt, Listing and Buyer's Agent
None
Elongated/Sloping
None
City of South San Francisco
Potential acquisition of a portion of 701 Spruce Avenue APN: 012-131-040 – Zhang
36 Comparable Land Sale Parcel Map – RL-02
City of South San Francisco
Potential acquisition of a portion of 701 Spruce Avenue APN: 012-131-040 – Zhang
37 Comparable Land Sale Aerial Photograph – RL-02
City of South San Francisco
Potential acquisition of a portion of 701 Spruce Avenue APN: 012-131-040 – Zhang
38 Comparable Land Sale Data Sheet – RL-03
Property Type Single Family Res. - Land
Sales Contract Date Dec-22
COE 01/08/23
Sales Price $275,000
Address East of Scenic Way, South of
Brighton Rd.
City, State Pacifica, CA
Zip 94044
APN 016-364-040
Buyer
Seller
Document #
Terms
Parcel Size (Acres)
Parcel Size (Sq. Ft.)
Zoning
General Plan
Utilities
Approx. Dimensions
Entitlements
Verified By
All Cash to Seller
Alexander Williams
Cressa Family Trust
628
0.21 9,000
R-1/B-3
Low Density Residential
None
Rectangular/Gently-Sloping
None
Comments This is the sale of a 9,000-square foot lot just east of Highway 1 in Pacifica. The property is located along the planned easterly extension of Clarendon Road, which has not been constructed. The zoning for the site would allow one single-family dwelling. The buyer reportedly intends to extend the street, water, and sewer connections approximately 140 and develop a single-family residence on the site. Electricity would also have to be undergrounded to accommodate development. The site is otherwise level and roughly rectangular.
Patrick Ryan, Listing Agent
City of South San Francisco
Potential acquisition of a portion of 701 Spruce Avenue APN: 012-131-040 – Zhang
39 Comparable Land Sale Parcel Map – RL-03
City of South San Francisco
Potential acquisition of a portion of 701 Spruce Avenue APN: 012-131-040 – Zhang
40 Comparable Land Sale Aerial Photograph – RL-03
City of South San Francisco
Potential acquisition of a portion of 701 Spruce Avenue APN: 012-131-040 – Zhang
41 Comparable Land Sale Data Sheet – RL-04
Property Type Single Family Res. - Land
Sales Contract Date Feb-20
COE 05/14/20
Sales Price $110,000
Address North of Hillcrest Dr.
City, State Belmont, CA
Zip 94002
APN 043-042-740
Buyer
Seller
Document #
Terms
Parcel Size (Acres)
Parcel Size (Sq. Ft.)
Zoning
General Plan
Utilities
Approx. Dimensions
Entitlements
Verified By
All Cash to Seller
Shrestha et ux
Piazza Family Trust
44055
1.52 66,299
HR-02
Hillside Residential/Open Space
None
Irregular/Sloping
None
Comments This is the sale of a vacant, landlocked, 1.52-acre hillside site in Belmont, behind several single-family residences on a downslope. The property is located along a planned, or "paper", extension of Bartlett Way, which currently terminates approximately 800 feet east of the site. The road and accompanying utility infrastructure would have to be extended to accommodate development. The zoning for the site would allow one single-family dwelling.
This site was reportedly acquired as a long-term investment.
Max Reinhardt, Listing and Buyer's Agent
City of South San Francisco
Potential acquisition of a portion of 701 Spruce Avenue APN: 012-131-040 – Zhang
42 Comparable Land Sale Parcel Map – RL-04
City of South San Francisco
Potential acquisition of a portion of 701 Spruce Avenue APN: 012-131-040 – Zhang
43 Comparable Land Sale Aerial Photograph – RL-04
City of South San Francisco
Potential acquisition of a portion of 701 Spruce Avenue APN: 012-131-040 – Zhang
44 Comparable Land Sale Data Sheet – RL-05
Property Type Single Family Res. - Land
Sales Contract Date Sep-19
COE 12/31/19
Sales Price $100,000
Address South Terminus Alhambra Dr
City, State Belmont, CA
Zip 94002
APN 043-232-120
Buyer
Seller
Document #
Terms
Parcel Size (Acres)
Parcel Size (Sq. Ft.)
Zoning
General Plan
Utilities
Approx. Dimensions
Entitlements
Verified By
All Cash to Seller
Victor Garza
Ramin Yeganeh
111868
0.40 17,600
HR-02
Hillside Residential/Open Space
Available nearby
Irregular/Sloping
None
Comments This is the sale of a 17,600-square foot hillside lot in Belmont. The property is located at the current south terminus of Alhambra Avenue, which would have to be extended slightly to accommodate development of the site. The buyer reportedly owned the adjoining three lots to the west, and acquisition of this parcel created an ownership of over 40,000 square feet, which made development on the combined parcels more feasible. The combined parcels are now listed for a total price of $585,000, but little interest has been shown. The listing agent indicates that the price may be reduced to $485,000 for all four lots in the near future.
Max Reinhardt, Listing Agent
City of South San Francisco
Potential acquisition of a portion of 701 Spruce Avenue APN: 012-131-040 – Zhang
45 Comparable Land Sale Parcel Map – RL-05
City of South San Francisco
Potential acquisition of a portion of 701 Spruce Avenue APN: 012-131-040 – Zhang
46 Comparable Land Sale Aerial Photograph – RL-05
City of South San Francisco
Potential acquisition of a portion of 701 Spruce Avenue APN: 012-131-040 – Zhang
47 Comparable Land Sale Data Sheet – RL-06
Property Type Single Family Res. - Land
Sales Contract Date Dec-19
COE 12/24/19
Sales Price $220,000
Address West of Terminus of Monte Cresta
Dr, North of Alhambra Dr.
City, State Belmont, CA
Zip 94002
APN 043-165-170
Buyer
Seller
Document #
Terms
Parcel Size (Acres)
Parcel Size (Sq. Ft.)
Zoning
General Plan
Utilities
Approx. Dimensions
Entitlements
Verified By
All Cash to Seller
Yao Hui Song
Alvin Hilario
109847
0.38 16,475
HR-02
Hillside Residential/Open Space
Available nearby
Irregular/Sloping
None
Comments This is the sale of a 16,475-square foot residential property on a hillside in Belmont. The property is located approximately 50 feet west of the western terminus of Monte Cresta Drive. The zoning for the site would allow one single-family dwelling. The owner of the adjoining parcel to the east is in the process of obtaining approvals to extend Monte Cresta Drive and utilities in order to develop that site. The comparable was acquired by a contractor who reportedly intends to develop the parcel upon extension of the roadway and utilities by the adjoining owner.
Max Reinhardt, Listing Agent
Lily Wu, Buyer's Agent
City of South San Francisco
Potential acquisition of a portion of 701 Spruce Avenue APN: 012-131-040 – Zhang
48 Comparable Land Sale Parcel Map – RL-06
City of South San Francisco
Potential acquisition of a portion of 701 Spruce Avenue APN: 012-131-040 – Zhang
49 Comparable Land Sale Aerial Photograph – RL-06
City of South San Francisco
Potential acquisition of a portion of 701 Spruce Avenue APN: 012-131-040 – Zhang
50 Sales Data Analysis
Adjustments are made to the comparable sale prices for the differences in the properties as they compare to the subject. A number of adjustments for the analysis of the comparable data have been considered in relation to the subject property. The comparable data has been adjusted for inferior and superior characteristics. For Example: where a comparable had an inferior characteristic, a positive (+) adjustment to the comparable was made. Where the comparable had a superior characteristic, a negative (-) adjustment was made to the comparable.
Adjustments were made sequentially for property rights conveyed, financing terms, conditions of sale, expenditures incurred by the buyer immediately after the sale, and market conditions at the time of sale. Adjustments for location characteristics, physical characteristics, use and non-realty components of value are subsequently added and applied.
Property Rights Conveyed: Each comparable sale involved the conveyance of the fee simple interest. Since the subject’s fee simple interest is being appraised, no adjustments are made for this factor.
Financing terms: Each comparable sale involved cash to the seller or conventional financing.
Therefore, no adjustments are made for this factor.
Conditions of Sale: Comparable RL-02 was acquired by the adjoining property owner, who had atypical motivation to acquire the site for assembly with adjacent lands to create the potential of an additional dwelling unit. Comparable RL-05 was acquired by the owner of adjacent parcels as well, and this parcel was needed for access to the assembled sites. Downward adjustments are applied to each of these two sales for this factor. Each of the remaining comparable sales appears to have been an arm’s length transaction. No other adjustments are necessary for this factor.
Expenditures Incurred Immediately After Purchase: None of the comparables required additional expenses to be paid by the buyer after the purchase.
Change in Market Conditions: The comparable sales used occurred between December 2019 and March 2023. Comparables RL-04 through RL-06, which sold in 2019 and 2020, warrant upward consideration for having sold during inferior market conditions. Comparables RL-01 through RL-03 sold within recent months and do not need adjustments for this factor.
Location: The subject property is located in South San Francisco, in the Sign Hill neighborhood.
Comparable RL-01 occupies a superior location in San Carlos, and Comparables RL-04 through RL-06 sold in superior locations in Belmont, all of which have higher median home sale prices.
Downward adjustments are applied for this factor. Comparables RL-02 and RL-03 have effectively similar locations in Pacifica, and no further adjustments are warranted.
Size: The subject property consists of 0.59 acre, or 25,763 square feet. Comparables RL-01, RL-03, RL-05, and RL-06 are smaller and necessitate upward consideration, while Comparables RL-02 and RL-04 and larger and warrant downward adjustments.
City of South San Francisco
Potential acquisition of a portion of 701 Spruce Avenue APN: 012-131-040 – Zhang
51 Land Use (Zoning/General Plan): Based on the subject’s minimum lot size, the site could accommodate up to five dwelling units. All of the comparable sales would allow development at lower intensity and warrant upward adjustments, to varying degrees.
Site Utility/Constraints: The subject property has an irregular shape and sloping, irregular topography. Comparables RL-01, RL-02 and RL-04 through RL-06 have inferior site utility and receive positive adjustments. Comparable RL-03 is rectangular and only gently-sloping in topography, resulting in a downward adjustment.
Contributory Value of Existing Improvements & Utilities: The subject property is vacant, and utilities would need to be extended from Spruce Avenue to accommodate development.
Comparables RL-01, RL-02, and RL-04 would need utilities to be extended a further distance to accommodate development, necessitating positive adjustments to each. No further adjustments are needed for this factor.
Access: The subject property does not have roadway access, and its development would be predicated on extension of a driveway approximately 205 linear feet (scaled) from Spruce Avenue.
Like with the utilities, Comparables RL-01, RL-02, and RL-04 would need roadway infrastructure to be extended a further distance to accommodate development, necessitating positive adjustments to each. Comparable RL-05 is located at the end of a developed roadway.
Accordingly, a downward adjustment is applied. No further adjustments are needed for this factor.
Entitlements: All of the comparable sales were of existing, subdivided, legal lots. The subject property would need to be subdivided into its own separate legal lot to accommodate its sale and potential development, and all of the sales are adjusted downward for this factor.
The following table summarizes the adjustments made to each comparable. Bold text connotates a more substantial adjustment.
RL-01 RL-02 RL-03 RL-04 RL-05 RL-06
North of Camborne
Ave., West of Club
Dr.
Approx. 450 Feet
North of Rockaway
Beach Ave.
East of Scenic
Way, South of
Brighton Rd.
North of Hillcrest
Dr.
South Terminus
Alhambra Dr
West of Terminus
of Monte Cresta Dr,
North of Alhambra
D San Carlos, CA Pacifica, CA Pacifica, CA Belmont, CA Belmont, CA Belmont, CA Sale Date Mar-23 Mar-23 Jan-23 May-20 Dec-19 Dec-19
Sales Price $120,000 $90,000 $275,000 $110,000 $100,000 $220,000 Parcel Size (Acres) 0.18 3.63 0.21 1.52 0.40 0.38
Property Rights Conveyed Ø Ø Ø Ø Ø Ø
Financing Terms Ø Ø Ø Ø Ø Ø
Conditions of Sale Ø Negative Ø Ø Negative Ø
Expenditures After Purchase Ø Ø Ø Ø Ø Ø
Market Conditions (Time) Ø Ø Ø Positive Positive Positive Location Negative Ø Ø Negative Negative Negative
Size Positive Negative Positive Negative Positive Positive Land Use (Zoning / General Plan) Positive Positive Positive Positive Positive Positive Site Utility / Constraints Positive Positive Negative Positive Positive Positive Contributory Improvements & Utilities Positive Positive Ø Positive Ø Ø Access Positive Positive Ø Positive Negative Ø
Entitlements Negative Negative Negative Negative Negative Negative Net Adjustment Substantially
Positive
Substantially
Positive Negative Substantially Positive
Substantially
Positive Positive
Comparable
City of South San Francisco
Potential acquisition of a portion of 701 Spruce Avenue APN: 012-131-040 – Zhang
52 Valuation Conclusion
Before adjustments, the comparable sales range widely from $90,000 to $275,000, which reflects a wide range of the willingness of the respective buyers to assume risk. However, after adjustments, the comparable sales indicate a bracketed value range between $220,000, as indicated by Comparable RL-06, and $275,000, as indicated by Comparable RL-03. Comparable RL-03 is the most heavily emphasized sale. It occupies a similar location and represents a recent sale of a landlocked lot with effectively similar access to roadway infrastructure and utilities.
Although it is smaller in size and had inferior zoning, its superior site utility and existence as a legal, subdivided lot result in an overall net negative adjustment. Comparable RL-06 sold during inferior market conditions and had inferior zoning and site utility. Although it occupies a superior location and exists as a legal, subdivided lot, overall, it is judged to indicate a value for the subject higher than its sale price of $220,000. The other sales were deemed to be significantly inferior to the subject and warranted substantial upward consideration relative to their sale prices.
In view of the preceding analysis, the subject property is concluded to have a value slightly above the mid-point of the bracketed range, or $250,000.
ADDENDA
APPRAISER QUALIFICATIONS
ERIK WOODHOUSE, MAI, R/W-AC
Industry experience since 2003
Current Responsibilities
Erik A.T. Woodhouse joined Associated Right of Way Services, Inc., in 2012, and currently serves as a Real Estate Appraiser, performing appraisals for full and partial acquisitions assignments on improved and unimproved properties for public improvement projects. The scope of his work includes commercial, industrial, and multi-family residential properties for transportation and utility improvement projects. All work is performed in conformance with the Uniform Relocation Assistance and Real Property Acquisition Policies Act, Uniform Standards of Professional Appraisal Practice, Caltrans standards, and state and federal guidelines.
Mr. Woodhouse is experienced in appraising an extensive assortment of real estate types, and earned his distinguished MAI designation conferred by the Appraisal Institute by completing a rigorous program of course work, written exams, appraisal projects, and narrative report presentations.
Prior Experience
Prior to joining the AR/WS team, Mr. Woodhouse was employed by Petersen LaChance Regan Pino (Boston, MA) as a Contract Associate Appraiser. He was responsible for research and preparation of appraisal reports for a variety of commercial, residential, industrial, and special purpose property types.
He also conducted appraisals for underwriting, portfolio analysis, and litigation purposes.
Prior to his work with Petersen, Mr. Woodhouse was a Senior Real Estate Appraiser with Burchard & Rinehart (Walnut Creek, CA) where his appraisal experience covered commercial, residential, and agricultural land, as well as improved retail, office, industrial, multi-family residential, marina, hotel, and agricultural properties. He conducted complex real estate appraisals of land and income producing properties (primarily eminent domain acquisition); performed client consultation, market research, highest and best use analysis, comparable data research and verification, valuation conclusions, and analysis of severance damages and benefits; and assisted in preparation of appraisal reports and exhibits for expert witness testimony in deposition and court trial.
Education
Connecticut College (New London, CT), B.A., Economics and German, cum laude Connecticut College, International Studies Certificate, International Studies / Liberal Arts Institute of European Studies (Humboldt University), Berlin, Germany Mr. Woodhouse continues his education to maintain the MAI designation through the Appraisal Institute; and continuing education in matters of real property appraisal, acquisition, relocation, engineering, and law through the International Right of Way Association and other professional organizations to broaden scope of knowledge and provide higher levels of service.
Appraisal Institute MAI Designation, No. 446913
Member, R/W-AC, Appraisal Certified, International Right of Way Association State of California Certified General Real Estate Appraiser, No. AG034630 Appraisal Institute, Northern California Chapter, 2013-2015 and 2017-present Member, Board of Directors, 2015-2018 Courses Chair, 2018 Spring Litigation Conference Chair Conversant in Danish and German
ERIK WOODHOUSE, MAI, R/W-AC
Related Coursework:
The Appraisal Institute
Real Estate Appraisal Principles, Real Estate Appraisal Procedures, Uniform Standards of Professional Appraisal Practice (USPAP), Business Practices and Ethics, Basic Income Capitalization, Advanced Income Capitalization, Advanced Market Analysis & Highest and Best Use, Advanced Sales Comparison and Cost Approaches, Report Writing and Valuation Analysis, Advanced Applications, Introduction to Valuing Green Buildings, Spring Litigation Conference, Condemnation Appraising, The Appraiser as an Expert Witness, Litigation Appraising Successfully completed the Appraisal Institute’s Litigation Professional Development Program IRWA
Principles of Real Estate Engineering, Appraisal of Partial Acquisitions, Ethics and the Right of Way Profession
National Highway Institute
Real Estate Acquisition Under the Uniform Act: An Overview College
Real Estate Principles, Microeconomics, Macroeconomics, Sociology, Statistics Other
USPAP Continuing Education, Toastmasters International