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HomeMy WebLinkAboutSummary Appraisal Report 6-1-13 ' SUMMARY APiRAISAL REPORT ' OF THE SEVEN-UNIT OFFI E CONDOMINIUM PROPERTY ' LOCATED AT 11 POLK AVENUE WITHIN THE ITY OF CAPE CANAVERAL BREVARD COUNTY, FLORIDA f II AS OF JUNE 1, 2013 t FOR IM . TODD MORLEY CITY O CAPE CANAVERAL 7510 NO TH ATLANTIC AVENUE CAPE C NAVERAL, FLORIDA 32920 BY ' CLARK A MAXWELL, MAI, PRES. MAXWELL APPR ISAL 8, CONSULTING GROUP ' 2525 AU ORA ROAD, SUITE 105 MEL OURNE, FLORIDA ' 32935 • e1* e` Maxwell Appraisal `` & Consulting us Group 2525 Aurora Road, Suite 105 Melbourne,Florida 32935 Phone:321-253-0026 June 21, 2013 Mr.Todd Morley City of Cape Canaveral I7510 North Atlantic Avenue Cape Canaveral, Florida 329 I Dear Mr. Morley, Y IIn accordance with your instru Lions, I have made a summary appraisal of the seven-unit office condominiu property located at 110 Polk Avenue within the ICity of Cape Canaveral, Brev rd County, Florida. The purpose of this appraisal is to estimate the market valu of the unencumbered fee simple interest in the Iproperty that is legally describ d in the attached report. have inspected the property, the neighborhood and its environs and have II analyzed the market behavior and the factors present that influence real property value. The market has also been examined for the highest and best Iuse of the land. I Valuation discussions and further descriptions are detailed in the accompanying report, which as been made subject to the assumptions and limiting conditions therein. articular attention should be given to the IExtraordinary Assumptions a d Hypothetical Conditions stated within this report. Market value, as used i this report, is defined in the body of the report. IThis Summary Appraisal Report is intended to comply with the reporting requirements set forth under Standards Rule 2-2(b) of the Uniform Standards of I Professional Appraisal Practic for a Summary Appraisal Report. As such, it presents only summary discus ions of the data, reasoning, and analysis that Iwere used in the appraisal process to develop the appraiser's opinion of value. I I 1 Mr. Todd Morley ' June 21, 2013 Page 2 ' Supporting documentation c ncerning the data, reasoning, and analysis is retained in the appraiser's file. The depth of discussion contained in this report ' is specific to the needs of the Iient and for the intended use stated below. The appraiser is not responsible for unauthorized use of this report. It is my opinion that the "as is" market value of the unencumbered fee simple interest in the subject property, as of June 1, 2013, was: ONE HUNDRED EIGHTY-FIVE THOUSAND DOLLARS ' ($185,000) ' Sincerely, etLA 442ev Clark A. Maxwell, MAI Cert Gen RZ920 TABLE OF CONTENTS SUMMARY OF IMPORTANT DAT AND CONCLUSIONS 1 PURPOSE OF THE APPRAISAL 2 ' INTENDED USE / INTENDED USER OF THE APPRAISAL 2 SCOPE OF THE APPRAISAL 2 ' EXTRAORDINARY ASSUMPTION AND HYPOTHETICAL CONDITIONS 4 DEFINITION OF VALUE 5 PROPERTY RIGHTS APPRAISED 6 t IDENTIFICATION OF THE PROPS . 7 SUBJECT SALES HISTORY 8 ' STATEMENT OF OWNERSHIP 8 ASSESSMENTS AND TAXES 8 CENSUS TRACT 9 ' UTILITIES . 9 HAZARDOUS MATERIALS/ENVIRONMENTAL CONSIDERATIONS . 10 FLOOD ZONE 10 ' ZONING 12 PRESENT USE 13 ' BREVARD COUNTY DATA 14 NEIGHBORHOOD DESCRIPTION AND ANALYSIS 26 SITE DESCRIPTION 30 DESCRIPTION OF THE IMPROVEMENTS 34 HIGHEST AND BEST USE . 41 EXPOSURE TIME/MARKETING TIME 44 i APPROACHES TO VALUE 45 SALES COMPARISON APPROACH . 46 ' INCOME APPROACH 56 RECONCILIATION 68 CERTIFICATION 69 CERTIFICATIONS, GENERAL CONDITIONS, QUALIFICATIONS, ETC. ADDENDA ZONING SUBJECT PHOTOGRAPHS I I EXECUTIVE SUMMARY tHEADING: CONCLUSIONS: IPurpose of the Appraisal -- Estimate Market Value IProperty Rights Appraised -- Fee Simple Interest ISize of Site -- 6,250 Square Feet / .14 Acres IBuilding Size -- 3,204 Square Feet Age of Improvements -- 47 Years I Effective Age of Improveme its -- 30 Years IIRemaining Economic Life -- 20 Years IAssessed Valuation -- $86,530 (Total) ITaxes, City and County -- $2,000.05 (Total) IZoning -- C-1 (City of Cape Canaveral) IHighest and Best Use -- Continued Office Use Estimates of Value ISales Comparison Approach -- $190,000 Income Approach -- $180,000 ICost Approach -- Not Applicable IFinal Estimate of Value -- $185,000 Date of Value Estimate -- June 1, 2013 I - 1 - THE APPRAISAL REPORT PURPOSE OF THE APPRAISAL ' The purpose of this appraisal is to estimate the "as is" market value of the unencumbered fee simple interest in the property described ' herein, as of June 1, 2013. INTENDED USE / INTENDED USER OF THE APPRAISAL The intended use of the appraisal is to provide the client, Todd Morley and the City of Cape Canaveral, with the market value estimate of the subject property to assist in determining a fair acquisition price. SCOPE OF THE APPRAISAL The appraisal assignment involves valuing the two-story office condominium property located at 110 Polk Avenue, Cape Canaveral, Florida. The subject consists of seven individual office condominium units that occ py a total of 3,204 square feet. The structure is of masonry construction and is situated on a 6,250 ' square foot (.14 acre) tract of land. The improvements were built in 1966 and on the date o inspection, were found to be in fair condition. ' The property is located alo g the north right-of-way of Polk Avenue, just east of Atlantic Avenu (Highway Al A). This location lies in the City of Cape Canaveral, within the central beach portion of Brevard ' County. - 2 - The scope of appraisal encompasses the a raisal asses the research necessary to p P prepare a report in accordance with the intended use, the "Standards of Professional Practice of the Appraisal Institute" and the "Uniform Standards of Professional Appraisal Practice" of the Appraisal 1 Foundation. In regard to the subject property this involves the following steps: 1 . The property was last inspected on June 1, 2013. The photographs were taken at that time by Clark A. Maxwell, MAI. ' 2. Regional and neighborhood data was based upon information gathered by the appraiser from newspapers, published reports, county and city statistics as well as various periodicals. I I 3. In estimating the highest and best use of the property, the appraiser analyzed the data collected. 4. In developing the value estimate, the market data utilized was ' collected by the appraiser from public records, realtors, appraisers and office files. 5. After assembling and analyzing the data defined in the scope of the appraisal, a final estimate of market value was made. The appraiser was instructed to estimate the "as is" market value of ithe property under appraisal. The Sales Comparison and Income Approaches to Value were utilized to arrive at the market value estimate. These approaches'are believed to be sufficient to arrive at a credible estimate of market value. The Cost Approach was found to not be applicable due to the age of the improvements and the subjectivity in estimating accrued - 3 - depreciation. At the request of the client, the appraisal is being transmitted in a summary format. EXTRAORDINARY ASSUMPTIONS AND HYPOTHETICAL CONDITIONS In the analysis of real prop rty interests it is often necessary for the appraiser to make certain ssumptions or qualify the analysis with limiting conditions. The typical General Assumptions and General Limiting Conditions which are a part of most appraisal reports cover the standard items which apply to the analysis of most property interests and can be found cat the end of this report. ' Extraordinary Assumptions •nd Hypothetical Conditions, however, generally have direct a•plication to specific interests being ' appraised. It is most import•nt, therefore, that the appraisers list and discuss any such special ass mptions or limiting conditions early in the appraisal report in order to •ssist the reader in fully understanding the valuation analysis. It is equ•IIy as important to inform the reader that no special assumptions or Ii iting conditions are being considered if such is the case. EXTRAORDINARY ASSUMPTION: an assumption, directly related to a specific assignment, as of th- effective date of the assignment results, ' which, if found to be false could alter the appraiser's opinions or conclusions. 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 o the assignment results, but is used for the purpose of analysis. The following assumptions and conditions were relied upon in this 1 appraisal: 1 - 4 - I 1 . The appraiser was not provided with a soil survey of the subject property. The soil, h wever, appears to be suitable as no adverse influences wee noted. 2. The appraiser was not provided with any environmental studies relating to the subject roperty. It is assumed that no hazardous ' materials or endange ed species are located on the subject property. 3. The appraiser has relied upon information provided by City ' and County officials a well as public records and information available from these unicipalities' websites and online data. tThe appraiser has m de reasonable attempts to verify the validity of the inform tion but must assume the information obtained is accurate nd true. ' 4. The appraiser was no provided with a survey of the property under appraisal. In vi w of this, it is necessary to assume that the land size and dim nsions utilized in this report are accurate. ' The appraiser reserves the right to alter this report should a survey become avails le. No other extraordinary assu ptions or hypothetical conditions are ' being applied in the followin analysis. The use of these extraordinary assumptions and hypotheti al conditions may have impacted the results of this appraisal assign ent. DEFINITION OF MARKET VALUE ' The most probable price which a property should bring in a competitive and open mark t under all conditions requisite to a fair sale, the buyer and seller, each acting prudently and f - 5 - p 1 knowledgeably, and assum ng the price is not affected by undue stimulus. ' Implicit in this definition ar the consummation of a sale as of a specified date and the pa sing of title from seller to buyer under conditions whereby: Buyer and seller are typically motivated; I1 . 2. Both arties are well informed or well advised, and acting in P 9 what they consider theIir own best interests; 3. A reasonable time is allowed for exposure in the open market; 4. Payment is made in t rms of cash in U. S. dollars or in terms of financial arrangement comparable thereto; and 5. The price represents t e normal consideration for the property sold unaffected by pecial or creative financing or sales concessions granted by anyone associated with the sale. I The above definition app ars in Chapter 12, Code of Federal Regulation, Part 34.42(f). PROPERTY RIGHTS APPRAISED ' The appraiser has valued the unencumbered fee simple interest in the property under appraisal which is defined as follows: Fee Simple Estate is the `Absolute ownership unencumbered by ' any other interest or state, subject only to the limitations imposed by the governmental powers of taxation, eminent domain, police power and escheat. ' - 6 - This definition was obtained from The Dictionary of Real Estate Appraisal, Fourth Edition (Chiago: Appraisal Institute, 2002) Pg. 113. IDENTIFICATION OF THE PROPERTY Address 110 Polk Avenue Cape Canaveral, Florida 32"20 Parcel ID Number(s) ' 24-37-23-CG-00041 .0-0013.01 24-37-23-CG-00041 .0-0013.0 24-37-23-CG-00041 .0-0013.0 24-37-23-CG-00041 .0-0013.0 24-37-23-CG-00041 .0-0013.0: ' 24-37-23-CG-00041 .0-0013.0 24-37-23-CG-00041 .0-0013.0: Location: ' The subject property is located along the north right-of-way of Polk Avenue. This location lies just east of Atlantic Avenue (Highway Al A) ' within the City of Cape Canaveral. ' Legal Description: The subject property may be legally described as follows; ' Office Units 1, 2, 3, 4, 5, 6 d 7, Cape Canaveral Professional Building, a Condominium as per the D laration of Condominium thereof, recorded in ' Official Record Book 2292, P e 2699, together with any amendments thereto, of the Public Records of Breva#d County, Florida. Whenever the term "subjec " or "subject property" is used within this report, it applies specifically to the property under appraisal. ' - 7 - II SUBJECT SALES HISTORY A search of the Brevard County Public Records revealed the ' following transactions hav.7. taken place concerning the subject property in the last three yea s: ' Unit #5 was purchased by t e current owner, Deborah F. Dean from Canaveral Counseling Ce ter, Inc. on December 19, 2012 for $35,000. Reportedly, this tra saction was not exposed to the open market prior to the sale. The remaining six units within he subject building (Units 1, 2, 3, 4, 6 & 7) ' were sold to Deborah F. De•n from Nancy Patricia Harris on August 9, 2012 for $132,000. The subject property is cu ently listed for sale through MLS for $269,900. The appraiser is not aware of any pending contracts for sale ' involving the subject prope . STATEMENT OF OWNERSHIP The property ownership is listed in the 2012 Brevard County Tax Roll as p p Y P Y ' follows: ' Deborah F. Dean 701 15TH Avenue, Apt. East Moline, Illinois 612 ' - 8 - ASSESSMENT AND TAXES Brevard County and the City of Cape Canaveral assess and tax the Y Y P ' subject property. These jurisdictions assess real property at 100% of 'just" value. The assessed value and taxes for 2012 are tabulated as ' follows: Unit Assessed Millage Ad Non Ad Total ' # Value Rate Valorem Valorem Taxes 1,2,3,4,5,7 $75,840 $1,399.68 $345.48 $1,745.16 ' 6 $10,690 18.4556 $ 197.31 $ 57.58 $ 254.89 Total $86,530 $1,596.99 $403.06 $2,000.05 ' The assessment was check d against comparable properties and found to be fair and reaso able. The amount of taxes shown is the gross amount due in Marc of the year following the assessment year. A discount of 4% is o ered if taxes are paid when the total ' amount is due. No tax delinq encies were found to exist. CENSUS TRACT The subject property is sho n on the 2010 Census Tract Maps as being located in Census Tract 685.02. ' UTILITIES ' As of the date of valuation, t e following utilities were available to the subject property: 1 ' - 9 - UTILITY PROVIDER ' Telephone AT&T Power Fla. Power & Light Water City of Cocoa Sewer City of Cape Canaveral The utility services are adequate to support the existing improvements and the current use. HAZARDOUS MATERIALS/ENVIRONMENTAL CONSIDERATIONS The appraiser was not provi ed with an environmental assessment of the property. An inspec on of the property did not reveal the ' obvious presence of hazar ous materials or endangered plant or animal species. The appra ser is not an expert in these matters, ' however, and recommend that an environmental assessment be prepared to verify that thes conditions do not exist. FLOOD ZONE The subject property appears to lie within HUD Flood Zone X, which ' encompasses lands lying outside of the 500-year flood plain. The subject can be found on Community Panel 12009C0313 E, of the April ' 3, 1989 National Flood Rate Maps. The following page contains the flood map showing the location of the subject property. 1 ' - 10 - I I I 4 4 i!t• .. ric ■-. ,..- ''' : ■ ....; ..c r. . 2E .., 7. 02 - 'c't •-• I - f... I 7- ■ ■•••• I '''' ''.! 1.4t I.... , QC '.- ••• fl• i :.r.. 7 'L r-7 ii- x- .-•:I - I g `c•' " ••7'. N ..._ . 'tt! 1 3c = ..--- ,••• _ . .., r 1..`.- • 4,t E ' i• r-. cc . --- _ .,-r =, - • is F.; : , .,.z 7 — ° z-.. -;• cac g = 7 • 0 I 55 _ lil ilia' -- FrCi•, 4 ,- -'-'----'-•-• ___ '!..•`.'-‘v..?- .. '? . 2 1 {t, I 1----- 1 I 1F1 I "•^14- , ..1 I • 7 1 fi 11 ■r ''''.L."•+.,::, . I 131 tat 1 • t,— -, I I 1 u .-t .-------4----___...... t LI 61 r i < , IL '14 • • • 1 • ie. I 1 I ' 1 II 1 I 1 ' I I 1 1 l''i at t - , , L I , 1 1 I .1 i 1 ■ — i 1 1 I I I 1 1 I 1 1 I __I I ___1 I 1 I i 1 i I I , 1 1 il ■ i 1111 1 I I i _ -__ 1 I _J L._ 1 i 1_ 11 l i _I i I L_____{ L__ _ _,4111411V 1_, — - 1 IF 1 I ..--- - . i 4 x tu 2 1 ILI' x c / X ILO Z N ---- i r,----------__ 7 , I X a, 2 7, `..,7:,•„i,.., „. _ ., ___ .- - -- _ LL. w 0 NJ ......"." t 'Cr '2 I FLOOD MAP I I I - 1 1 - I I I ZONING IThe subject property is zon d C-1 (low density commercial) by the I City of Cape Canaveral. T e requirements for the C-1 district are intended to apply to an ar a adjacent to major arterial streets and convenient to major resident al areas. The types of uses permitte are intended to serve the consumer Ineeds of nearby residen ial neighborhoods, as well as the commercial needs of the m torist. Lot sizes and other restrictions are Iintended to reduce conflic with adjacent residential uses and to minimize the interruption of tr ffic along thoroughfares. IPermitted uses include retail stores, personal service establishments, I professional and general offices, clinics, motels, financial institutions and restaurants to name a few. ILot requirements include a inimum area of 5,000 square feet, with a minimum width of 50 feet 0 nd a minimum depth of 100 feet. The Imaximum coverage is to be o more than 50%. pBuildings shall have a maxi um height of 45 feet and a minimum floor area of 300 square fee . Setback requirements include 25 feet Ifrom the front, 10 feet from t e rear and 25 feet from the sides. I The improvements to the su eject site appear to be in conformance with the C-1 zoning regulations. A complete copy of this regulation has been included within th z addenda. I I I I - 12 - I I LAND USE PLAN/CONCURRENCY IThe City of Cape Canaveral Future Land Use Plan indicates that the I subject property lies within a ommercial district. This district allows for a variety of retail, office nd service uses. The land use plan, therefore, conforms to the c rrent zoning of the property. Further discussions with th City of Cape Canaveral Planning IDepartment revealed that the property does not appear to be adversely affected by c ncurrency and growth management Irestrictions. The property has sufficient availability of utilities, the traffic volume along Polk Avenue i in concurrence, and the property does Inot have any wetland considerations. IRESTRICTIVE COVENANTS IThe appraiser knows of no restrictive covenants or deed restrictions that would affect the use of the property. I PRESENT USE I As of the date of valuation, the subject property was in use as a Ivacant, seven-unit office condominium facility. I I I I I - 13 - 1 1 BREVARD COUNTY DATA The subject property is located in the City of Cape Canaveral within the central beach portion of Brevard County. Geography ' Brevard County is located a proximately midway along the eastern coast of the Florida peninsu a. The county area measures 71 miles ' north to south, and averag s 18 miles east to west, incorporating a total area of 838,400 acres. The county is bordered on t e north by Volusia County, on the west by Osceola, Orange and V lusia Counties, on the south by Indian ' River County and on the e st by the Atlantic Ocean. The county seat, Titusville, is located 40 iles east of Orlando, 200 miles north of Miami, and 135 miles south o Jacksonville. Brevard County has three distinct economic areas as a result of its geography and unusual len th, referred to as the North, Central, and ' South areas of Brevard Cou ty. The county is further divided by the Indian River, or Intracoastal aterway, which separates the mainland from the beachside commu ities. The north county area con ists of the incorporated City of Titusville ' and surrounding unincorporated areas, including the communities of Scottsmoor, Mims, and Port S . John. The beachside area of the North ' County contains the Kenne y Space Center, and Cape Canaveral Air Force Station, and the C naveral National Seashore. These land ' uses result in no commer ial or residential development in the beachside area of north Brevard County. The north region is ' considered to be the least d veloped, and slowest growing of areas in the county. ' - 14 - The central region consists of the Cities of Cocoa and Rockledge and ' the unincorporated Merritt Island area. Beachside cities include Cape Canaveral and Cocos Beach. This beachside area is largely ' tourism-based, due to its Ioc•tion along the ocean, and its proximity to Port Canaveral and Orlan•o's theme park area. ' The south region of the cou ty is the largest of the three areas, and the fastest growing. The south region contains the Cites of ' Melbourne, West Melbou ne, Palm Bay, Malabar and the unincorporated Suntree/Vie a area. The beachside contains the ' Town of Melbourne Beach, and the Cities of Indialantic, Satellite Beach, and Indian Harbor B-ach. ' The beach portion of the south county has more land depth from river to ocean than the cen al county beach. It differs in character from the central beach are. as it has fewer multiple family buildings and a greater number of single family properties. ty Transportation o n C u p ' Ground transportation in t e area is facilitated by an adequate road system. Major north-s•uth traffic arteries in Brevard County include Interstate 95, U.S. Hig way No. 1, and State Highway Al A. Interstate 95 provides rapid access through the western portions of ' the county, as it runs west of the mainland areas of Titusville, Cocoa, Rockledge, Melbourne and 'alm Bay. There are 13 interchanges in ' the county from SR 46 at the orth end, to Malabar Road at the south end. These traffic arteries epresent the county's major east-west ' traffic arteries. U.S. Highway No. 1 general y runs west of and parallels the Indian ' River, and provides acces through the eastern portions of the mainland areas of Titusvill Cocoa, Rockledge, Melbourne and ' Palm Bay. ' - 15 - Highway AlA runs west o and generally parallels the Atlantic ' Ocean. This road provid s access through all the beachside communities in south and ce tral Brevard. There are six causeways that link the beachside communities with the mainland. These include (from north to south) State Road 405 (Nasa ' Causeway) in the north area of the county, State Roads 528 (Bennett Causeway) and 520 (Merritt sland Causeway) in the central portion, and State Roads 404 (Pined• Causeway), 518 (Eau Gallie Causeway) and U.S. Highway 192 (Melb•urne Causeway) in the south area. Brevard County is served oy the Melbourne International Airport, ' which is located in the cen al portion of the City of Melbourne. The airport provides commercial passenger and cargo service, as well as ' general aviation. The airport currently provides only limited service by Delta Airlines. The limited se ice by major carriers is attributable to a greater availability of flights •nd generally lower fares offered by the ' Orlando International Airport a one-hour drive from MIA. ' Public transportation includ-s bus transportation by Space Coast Area Transit, and Greyhoun• Bus Lines, which has three terminals in the county. ' Population and Economic Indicators According to the U.S. Cens s, Brevard County had a population of ' 476,000+ in 2000, representin a growth of 19.4% from 1990, and 57% from 1980. The most recent r port in 2010 estimates the population at 543,376, indicating an approximate 14% increase in residents over the ' past ten years. ' A majority of the population lives in the unincorporated areas of the county, with the incorpora d Cities of Palm Bay and Melbourne ' containing the largest popul tions. ' - 16 - Population growth is largely t e result of a continued influx of northern ' state residents, as well as relocates from the south Florida counties of Palm Beach, Broward and Dade. The population growth has slowed ' over the three years, is expe■ ted to remain low, or perhaps drop with the Space Shuttle program d awing to a close. ' The median age in 2009 as 44 for the county, which is a slight increase over 2005, which .aw a median age of 43.1 . This was a ' drastic increase from the me•ian age during the 1990's of 36.1 years. The most recent data disclosed that approximately 20% of Brevard ' County's population is over t e age of 65. This indicates an increasing trend of an older populatio for the county. The median household ' income is reported to be $49,523, which is about $2,000 higher than the state median figure. Brevard County, Florida Total Population ' July 1, 2010 543,376 July 1, 2009 536,357 July 1, 2008 536,314 July 1, 2007 534,407 July 1, 2006 530,319 July 1, 2005 526,088 1 July 1, 2004 515,890 July 1, 2003 502,985 July 1, 2002 494,239 July 1, 2001 485,810 ' July 1, 2000 477,735 'April 1, 2000 (Census 2000) 476,230 ' - 17 - I I Area Employment IThe major industry within Brevard County is the aerospace industry, which is located on north Merritt Island and in the north beach I portion. This aerospace act vity consists primarily of ballistic missile testing and launching at t e Cape Canaveral military complex, I and the recently shuttered ►pace Shuttle program located at the Kennedy Space Center. IThe Shuttle program has be-n replaced by four private enterprises funded by NASA, with th= most prominent being SpaceX. The IFalcon rocket just complet-d a successful launch and rendezvous with the International Spa, e Station. This mission resulted in a Icontract to send addition•I missions to the space station. Many NASA employees that were laid off have been rehired by private Icontractors such as SpaceX. While the space program has played a vital role in Brevard's Ieconomy, the diversity of i s industrial base allows for economic stability. The electronics and defense-related industries in south IBrevard have formed a se and level of major employment. The largest employer in this sect r is the Harris Corporation, which is an Iinternational communicate ns equipment company based in Melbourne and Palm Bay. H rris Corp., with 6,500± employees, is the I largest private employer in B evard County. Health First also employs over 6,000. Another major employer is ort Canaveral, a shipping and cruise- ship port. The Port's annual economic value added impact within IBrevard County is estimated t over $1 billion. The port accounts for more than 13,500 direct jo s in the County, with a total annual Ipayroll of about $566 million Factoring in induced employment, the job levels exceed 22,000 a d the payroll increases to over $900 Imillion. I - 18 - II Other major employers include Patrick Air Force Base, Rockwell Collins, Nokia, Northrup Grumman, Wuesthoff Health Systems, and Dictaphone. 1 ' Brevard County.Fl 1 1 2% 0990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 Oct ' 2012 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 Data from U S Bureau of Labor Statistics Last updated Dec 22.2012 Brevard County's unemplo ment rate in April of 2013 was 7.5%, ' which is considerably lower than the high of 12.5% in November of 2010. The rate peaked due o layoffs at the Space Center and due Ito the national recession and housing crisis. The latter led to considerable job losses in th construction industry. Although in the past, local employment was largely connected to the space program, the can ellation of shuttle flights after the loss of ' Columbia in 2003 did not res It in any significant impact on the local job and housing markets. T is was largely due to the strength and ' diversity of the Brevard ounty market, which has reduced dependence on the space program. This diversity again softened the impact of the cancellati n of the shuttle program. ' - 19 - I I The effects of the cancellati•n of the Shuttle on the Brevard County economy have not been as damaging as expected. While a significant amount of I•yoffs have resulted, the overall Iunemployment rate has rec°ntly been decreasing. I Private space companies have emerged as well as other opportunities for affecte• workers. Bertram Yachts recently relocated their corporate offices and manufacturing operation Ifrom Miami to a vacated Se• Ray Boats facility on the Barge Canal. Bertram plans to hire 221 e ployees and initially produce 15 to 25 vessels per year. The spin o businesses associated with this major company will also result in e ployment needs. Tourism I The rapid growth of the cruise industry at Port Canaveral over the past five years has contributed to stable tourism in Brevard County. The rapid growth is largely due to the Port's central location and Iproximity to the Orlando area of Central Florida. Port Canaveral hosts calls by several cruise lines carrying 1 .5 million passengers in 2011 and 2012, placing it n the top three of the busiest cruise terminals in Florida, along wi h Port of Miami and Port Everglades. I Area Housing Market I Brevard County experienc d significant growth and a robust economy through late 2006 hen the decline of the housing market I began. The median resale rice for an existing home declined 32% through 2008, and continue to decline through 2011 . The median price dropped to levels not seen since 2002/2003. I The median price level for the first quarter of 2011 was $89,500, as I compared to the national average of $157,933. The median price has rebounded to $126,000 in April of 2013. I I - 20 - II The market has historically s en a downward influence on median price levels through high le Is of housing inventory and short sales. The following table; howev r, shows that the housing inventory has ' been trending downward si ce year end 2007, which was the peak inventory at over two years. ' Current inventory for single f mily residential is now estimated to be approximately four months, hich is below the balanced inventory of seven months. The curre t inventory for condos is in the seven month range. ' Months of Inventory, or absorption rate, shows how many months of sales it would take, at the current rate,to deplete the inventory.This is the best indicator of where the future market is headed. Demand has been so high that sales are impeded due to lack of inventory Buyers are waiting to find what they like 1 Months of Brevard Housing Inventory ,8 ' mos is balanced 28 =Condos ' t Single Fair 23 '� 18 ,. 13 R nMdvt ' The construction and housing industry was the driving force that fueled the economy during the boom years driving unemployment historic lows of 3.3%, considered full employment. The surplus in Ito housing inventory that resulted led to a corresponding decrease in housing starts. This, of course, resulted in higher unemployment. The following chart shows that single family housing starts peaked in ' 2004 at 6,508. Condominiu starts peaked at 2,435 in that year. The starts for 2011 were 855 an 27, respectively. Year to date totals for t2012 through July were 575 nd 3. ' - 21 - I I I While not good for the c nstruction industry, the lack of new IIconstruction has resulted i the decrease in housing inventory shown above. The decreas indicates that there is a need for new Iconstruction of both single a d multiple family residential housing. 1 EAR Construction Permits mil a Issflld Multi F.util) Fay II 1979 Annual Construction Md 3150 3341 19x0 3150 3218 1431 2155 2970 ,0000 1982 1629 1718 I 1983 :1010- 3954 3601 1Nri4 BWO� --� 5638 4246 1 9x5 Fen 5260 4444 1986 7000 — •Sing*Fen 3219 3741 1987 0000 1 1 • ------- 1x65 ;145 ' 19x4 1447 4662 t. INK4 � I I ( _ 678 4585 1990 4000 1 922 3831 1991 30Dp r • f j 404 2928 1992 i ! I 41 3549 2000,111111 ill Nib 227 3702 1 1941 ) 552 3559 1995 1 I I I I I !111 Or 248 2461 1 o 19% § 1 0- ! ,; g S y I S g i R_ i I £d 47 1' 1997 1994 164m4 2 3 498 3284 1999 425 3165 2001) Jan Feb Mar Apr 'Nay ,I km Jul \u) Srp (k) No∎ Dec 864 3422 U 2001 325 282 309 329 349 363 373 415 413 383 416 390 692 4319 2002 325 406 524 350 344 325 474 455 362 579 423 452 125 4934 2003 451 423 557 ; 11 535 486 532 5[12 504 544 435 537 562 5607 2004 469 435 547 482 539 588 522 597 ;05 50(1 474 359 2435 650! 2005 445 407 619 507 562 581 563 620 544 606 516 450 1466 6279 I 2006 461 458 459 439 396 340 382 236 304 237 303 2% 1077 4074 2007 2)15 162 173 171 178 258 157 2)4 1411 154 117 I()8 894 2032 2008 99 108 x; 130 I(t9 34 139 76 112 82 67 56 372 1227 2009 58 59 43 62 711 96 88 77 92 82 112 117 893 2010 97 117 131) 79 88 85 80 69 63 52 35 5; 218 926 U 2011 72 61 77 99 63 87 70 81 81 62 49 57 27 855 2012 60 65 82 74 103 99 119 3 575 I I I I I I - 22 - II I I -110-2001 I 630 , { ....r —f 00 —22002 I --a—2004 -4Y5 530 —+— i i6 —a1-2007 3:r: I 430 -- ,. -- 202011 *- 12 1 _ i �� �` 230 4 " / 30- W•11 n .._ - - I 30 i B m ,F t a A 5, 7 43. Si Q o I .mace U.S census Bureau ®2012 Richard Webb-4Brevard.cdm The Brevard County area experienced market conditions similar to I the region with an over-supply of residential building lots, and declines in sales volume an median prices. Based on the exhibited over supply and lack of d mand, it was not feasible to develop Iadditional residential units n a speculative basis until the existing oversupply is absorbed, and local economic conditions improved. IWhile it is unlikely that large acts of acreage will be purchased and I developed with speculative ousing during 2013, the improvement of the market has increased d-mand for end user lot purchases. The effects of the NASA layoffs were not as severe as expected and Imarket activity has recently i creased. I The slow-down in the local housing market mirrored national and state trends. Market conditi•ns appear to be returning to normal levels as the large excess in entory that existed has been absorbed Iby a more typical "owner-•ccupied" buyer. The lack of new units coming onto the market in t e past three years has been beneficial Iin stabilizing the overall resid=ntial market. I Commercial Market Since the height of the real estate market in 2005, the commercial market maintained a relati ely steady pace until the end of 2007. 1 I - 23 - I 1 Following this, 2008 was a year of decline for the commercial ' market and the economy in general. This continued into 2012 as the national economy experienced a slower than expected recovery from the recession. ' As discussed above, there are signs that the single family residential market has improved. Sale' volumes have increased and realtors have witnessed multiple off:rs on some properties. The market had ' a large number of "short sal:-s", or those in which homes were being offered for less than their ortgage balances. The absorption of these and the lack of new construction have increased demand for traditional inventory. Summary In summary, the Brevard County area enjoyed a strong economy during the 2000 to 2005 tim period as the real estate market, the growth of the cruise indust , and low unemployment had positive taffects upon the local eco omy. This trend reversed itself in 2006 when the national recession and housing crisis began. The real estate "meltdown" that occurred appears to have ' bottomed out and all sig s are pointing to recovery. A large number of foreclosure and ' short sale" transactions have occurred, ' clearing up a large invento that grew out of the crisis. At present, the unemploym-nt rate is showing a gradual decline, as well as the existing housing inventory. The median home price in Brevard County is now sho ing gradual increases each month. It ' appears that the real estat- market is recovering and that positive signs are expected in the for-seeable future. On the following page is a map of Brevard County, showing the tlocation of the subject prop:rty. ' - 24 - I I r5r... II1 North Brevard I a 2 The Great Outdoors q r I3 Titusville -a 'mss 4 Port St John . 3 I 5Wes t Brevard 2; -,` 6 Sharpes; Canaveral Groves r 4 Iop 7 Cocoa it 6 a0 8 Rockledge ,I 77 a I9 Vera t Suntree 8 op 10 Lake Washington , al I11 Northeast Melbourne a 9 40 12 Melbourne ,.. r, 5 410 1 1 I imp 14 Palm Bay 15 Malabar ; Barefoot Bay !I —"` Fla 2.0 I4. 16 Merritt Island - 17 Cape Canaveral Cocoa Beach a4 ' 20 South Beaches r 15 tz I BREVARD COUNTY MAP - (SUBJECT IS IN AREA 17) I I I I I — 25 — NEIGHBORHOOD DESCRIPTION AND ANALYSIS The t subject neighborhood can best be described as that g 1 g ' area bounded on the south by State Road No. 520; on the north by Port Canaveral and the Ken edy Space Center; on the east by the Atlantic Ocean; and on the west by the Banana River. This general ' area is known as the North Cocoa Beach/Cape Canaveral community. The neighborhood's major roadways consist of State Road No. 528, State Road No. 520 and North Atlantic Avenue (State Road Al A). State Road No. 528, which i also known as the Bennett Causeway, ' links Port Canaveral and th- north portions of the central Brevard beach area with Merritt Islam. and the mainland City of Cocoa. State Road No. 520 links the central Cocoa Beach area with Merritt Island, Cocoa and the cen ral Florida City of Orlando. State Road No. Al A is the major north to south traffic artery within the central and south Brevard beach areas. This road terminates at State Road No. ' 528 a short distance to the north. The immediate neighborh od consists of four distinctly different markets. These markets are the commercial and industrial related areas located along the major roadways and within Port Canaveral, the waterfront condominium projects, the single family residential areas, and a large area of mixed single-family and multi-family uses. Typically, the properties fronting directly along the ocean or the Banana River are multi-floored condominium projects with an occasional hotel/motel use. _ying a short distance to the north of the ' subject property are several large residential condominium projects; the Colonial House, Puerto Del Rio Condominiums, Bayside ' Townhomes, the Plaza and the Treasure Island Club Condominiums. - 26 - I I I The immediate subject area along Atlantic Avenue is developed Iwith a variety of uses. The area around the subject includes uses such as Cape Canaveral City Hall Complex, convenience stores with gas pumps, professional offices, retail shops and restaurants. I The area to the east of Atlantic Avenue consists of the Avon-by-the- Sea Subdivision. This subdivision consists of a variety of uses including single and multi-family residences, apartment complexes and Icondominium projects. This area also contains city and county owned properties such as the Brevard County Sheriff's Office, Cape ICanaveral Library, a city park, the Veteran's Memorial Park and the Nancy Hanson Recreation Complex. I The major influence on the subject neighborhood is its' excellent major 9 I access to the Banana River, Atlantic Ocean, Port Canaveral and the transportation routes to other portions of the county and the state. The Port encompasses 3,300 acres with approximately 800 of these in Ithe port proper with the rest being acreage along the Canaveral barge canal further west on Merritt Island. I The Cape Canaveral/Cocoa Beach area has several forces that Iincrease the amount of tourists to the area. One of these is the Kennedy Space Center, which is located to the north. Tourists from I the central Florida theme parks also come to the area as Cocoa Beach is the closest beach community to the Orlando area. Another major draw to the area is the Ron-Jon Surf Shop in Cocoa Beach. This property lies approximately one block to the south of IState Road 520 along State Road Al A. The store encompasses 52,000 square feet of area and has an estimated annual customer count of Iapproximately 1 .5 million. I I - 27 - I I In addition, the cruise line industry at Port Canaveral has been Iexpanding over the past few years. The growth of the cruise line business has brought many additional tourists to the area. The I addition of Walt Disney World Cruise Lines has brought national and international attention to the general area. IThere is currently a good mix of commercial uses within the neighborhood. The general lack of availability of additional vacant Iland tends to control any new growth in this area. The lack of usable land within the neighborhood should cause a continued increase in Iproperty values. IThe retail and office uses located within the subject area have reasonably strong occupancy rates even throughout the recent local I and national economic slowdown. The subject area is currently experiencing occupancy rates in the range of 85% to 90%. IIn conclusion, the subject neighborhood is a mature mixed commercial, multi-family and single family district that is in a stable Iposition at this time. The subject area in enjoying strong occupancy rates which is expected to continue into the foreseeable future. II area map following page contains a gene ea ap that shows the a a Ilocation of the subject property in relation to the surrounding area. I I I I I - 28 - I I Challenger Rd a Dr Atlantis Rd v MA Q' %Shorew or Lrl Seaport Blvd ' L e Beach Park Ln ZHarbor Dr Coral Dr �O� Oc 03(‘W°°ds BNd Ce I Central CO - ntel Blvd W 2 Central Blvd E co Surf or Z d I NQdQo�� Caere Chard St ,r tWashington Ave 1 Adams Ave Q' I Jefferson Ave c Madison Ave ii Mo e,e 6Ty HffiTWjAve Arno Ave Cape Tyler Ave anaveral poW Ave Taylor Ave Fillmore Ave 1 I Am > e Center St Q C g' O I Hayes Ave Atlantic Garfield Ave Ocean Arthur Ave c Taft Ave i' I 0�,a 4 cock Dr > x i Kent Dr m 6 I c Z m 01 Cocoa Beach Qyghtwaters Dr ILeon Ln E IGENERAL AREA MAP I I I - 29 - I I SITE DESCRIPTION ISize and Shape The subject site consists of a rectangular-shaped tract of land having Ian approximate area of 6,250 square feet, or .14 acres. The site fronts approximately 50 feet along the north right-of-way of Polk Avenue Iand has a depth of approximately 125 feet. IThese measurements and size calculations were obtained from the Brevard County Tax Roll and Plat Maps. The appraiser assumes that Ithe measurements and size calculations are correct. As was noted, the appraiser reserves the right to modify this report upon receipt of a tcurrent survey. Elevation and Drainage IThe site is basically flat and level and is to grade with the surrounding streets and adjacent lands. An inspection of the site did not disclose Iany obvious drainage problems. As was discussed previously, the site does not lie within a flood hazard area. The elevation and drainage, Itherefore, are considered to be good. I Soils The appraiser was not provided with soil boring studies; however, the soil appears to be of the light, sandy type which generally provides Igood capacity for building improvements. An inspection of the improvements did not disclose any unusual settling cracks. I Vegetation IThe subject site is nearly 100% improved with structures, paving and landscaping consisting of St. Augustine grasses, palm trees and Iflowers. I I - 30 - I I Access IAccess to the site is available from its frontage along Polk Avenue. This is a two-lane asphalt paved street improved with sidewalks, curbs and streetlights. Anticipated Public or Private Improvements ' The appraiser is not aware of any anticipated public or private improvements planned on or off the site. I Easements and Encroachments INo adverse easements or encroachments that would hinder the site from being developed to its highest and best use were found. The I appraiser reserves the right to modify this report should a survey be provided that indicates otherwise. ISummary In summary, the subject site consists of a 6,250 square foot (.14 acre) Itract of land located along the north right-of-way of Polk Avenue. The site is rectangular in shape and has adequate frontage and depth. The appraiser knows of no physical conditions present that would adversely affect the development of the site to its highest and Ibest use. I The following pages contain a subject property map and an aerial map showing the size and shape of the site under appraisal. I I I I I - 31 - II I I 3 4 5 ' 6 7 8 7 2 J 4 I 'n 1 ' m _ -I -i I > 11 .0 12 13 14 1516 > 9 10 11 269 Z 1 � I _ TILE ' 13 � A > I C 1 4 5 7 1.0�� ',�� : z I I 4 9 1 El 114 artira 9 10 11 I _ _1 l POLK AV I 1 I - - 6 1 1 9 12 13 TAIL' ISUBJECT PROPERTY MAP 1 I I I I - 32 - 1 I i .' rtPASM1•�YG�w�- TYLE�R. mot' -0;-.. lit pS,:. Z- -1,11,11W.,..ji.- 2!*4 '1.1' t€ irto Iwo . ,.: , 4 440. , # �., I c3 , Z 1' 1 L X ms:µ ; `:+*' '.C.) nt' Aillli ,. - 4 . 1 AERIAL MAP I I I I I I I I - 33 — 1 I I DESCRIPTION OF THE IMPROVEMENTS I The subject major maj improvement to the ect site consists of a two-story, P 1 I office condominium building. The structure occupies a total of 3,204 square feet and contains seven office units. The building is of masonry construction with a stucco finish and a flat roof. The layout consists of four units on the second floor and three units on Ithe ground floor. Units 1 and 2, as well as Units 6 and 7, contain connecting doorways that allow mutual access. On the ground floor Iis a entrance drive between Units 2 and 3 that allow vehicle access to the rear parking lot. The second floor is accessed via an exterior Istairway along the front. I The building was constructed in 1966 and, therefore, has an actual age of 47 years. The appraiser estimates the improvements to have an effective age of 30 years, with a remaining economic life estimate Iof 20 years. An inspection of the improvements revealed that they are in fair condition with some maintenance and repairs needed Iprior to occupancy. The majority of the units require new floor coverings, paint, new restroom fixtures and general cleaning to Icompete in the market for potential tenants/buyers. I The construction components of the building improvements will now be discussed. The description of the improvements is based upon a I physical inspection of the building improvements, and is subject to change should the original construction plans be made available. IFoundation The building is set to grade on a steel reinforced concrete perimeter Ifooting system. I I - 3 4 - Floor Structure/Covers ' The floor structure consists of a four-inch concrete slab poured over a vapor barrier and wire mesh reinforcing. The second floor is also of ' concrete construction. Five of the units contain terrazzo or vinyl tile floor coverings. The remaining two units contain concrete flooring with no covering. Interior Construction Each unit contains painted masonry walls. The units also contain minimal interior partitions which consist of wood paneling. The ' ceilings are of painted plaster. Units 1 and 2, as well as Units 6 and 7, contain interior doorways which allows for the units to be utilized as ' one. Heating and Cooling ' Each unit within the building is serviced by a central heating and cooling system. The systems were reported to have no defects at the time of inspection. t Electrical and Lighting The units are adequately lighted with strip fluorescent lighting fixtures. Each unit contains a separate electrical meter. The telectrical capacity of the building appears to be adequate for the use. Plumbing ' Each unit contains one restroom with a toilet and a sink. The plumbing service was found to be adequate for the use. ' Exterior Walls The exterior walls are of eight-inch concrete block construction. The ' front wall of the building has metal and glass storefront windows and seven metal and glass doors. The rear wall has three doors which provide access to Units 1, 2 and 3 along the ground floor. ' - 35 - II I I Roof Structure IThe roof structure is comprised of bar joist construction that is covered with a built-up composition surface. The owner stated that Ithe roof was repaired recently and was in good condition. Site Improvements IThe subject contains asphalt paving that includes 4 striped parking spaces in the front and 12 spaces in the rear. This parking capacity Iis legally adequate, however; discussions with the owner and an on site inspection, revealed that the parking capacity is limited and Imay adversely affect some potential users. Other site improvements include a covered concrete walkway across the front of the first Iand second floors, landscaping and fencing. I Functional Utility The facility appears to be functional in design and layout for its use as an office condominium property. The building improvements occupy approximately 22% of the total site area, which is within the normal range of 15% to 25%. This coverage provides sufficient areas for parking and landscaping. I Summary In summary, the subject site is improved with a seven unit condominium office building that occupies a total of 3,204 square Ifeet. On the date of inspection, the improvements were found to be in fair condition and in need of refurbishment. The improvements Iappear to be functional in design and layout and appear to maximally utilize the site. IThe following pages contain sketches from the condominium Idocuments showing the site plan and the building/unit layout. I I - 36 - I I �. .. I CAPE CANAVERAL PROFESSIONAL 'B'LDG4,;.•� A CONDOMINIUM . • I a. i er, . . I . • ti � 2 sly. C.8.5 I O 1 \ n OFF/CE BLDG. 4 ti •4 F.FC.CEO/ - //.G' 49.D5' I = -a 1 LeArav'con, U \I - -T�•- •.lap' —_ s.aafe�wdC �,7 -- I z'cu^b/RS*, J88'O lw 'o►' IN rn . . GRAPHIC PLOT PLAN SURVEYOR'S NOTES: Ii. THE BUILDING SHOWN IS A 7 UNIT, TWO STORY C.B.S. OFFICE BUILDING APPROXIMATELY 30 FEET IN HEIGHT. 2. ALL AREAS AND IMPROVEMENTS EXCLUSIVE OF THE UNITS ARE COMMON ELEMENTS OF THE CONDOMINIUM. N 3. THIS GRAPHIC PLOT PLAN WAS PREPARED FROM AS AS BUILT I V -0 SURVEY, UNDER THE DIRECTION OF JOHN R. CAMPBELL, P.L.S. _ a cC")m rn I ALLEN ENGINEERING, INC. COCOA BEACH, FLORIDA - • I FEBRUARY 25. 1981) .EXHIBIT-A SHEET 3 - 1 ' Ill • 1 SITE PLAN I I — 37 - 1 I I I , IIIIIMMIIIIIIIIIIIIIMIIINII CAP.E CANAVERAL PROFESSIONAL BLDG. I • A CONDOMINIUM r• I .. 11 -,"*.. ........,..... ..- -4—,.. — -..... "'Ll /2.,2' ,V.Ars.' /./. . . I I !.. _Ni N. . i..... I - -1 1 2 open 3 /Z.. ' . . /s.?.-..;' ./.e.b• ME■11......1■•■■■•/ .1■••■•■••■••■■ •.eirMe■•••■ . .7. 7,. . . . . . I ____ .•I 1 -.r— . . . o . . I 1 FIRST FLOOR PLAN Po "ri iso in . Fl . SuRVEVOR'S NOTES: - I I. THE FIRST YLS014 PiNISPEC FLOOR ELEVAT1LIN :S 11.68 FEET. 2. TH:S U:RS'7 monix FINISHED CEILING ELEVATION IR !A.C5 ..., PEET. J. A'.1. ARr.AS AND IMPROVEMENTS EXCLUSIVE CF TEE UNITS THINSELVEV Aue onmptoN ELEMENTS Cr THE CUrOOMINIM. I NJ , 4, 0 I:9:CATES-TVE :NIT NUM8C1 %ESIDNATION- -- I. ap. AI ;. ■■■■■INOICATES TM L:M!':1) OP THE UNIT. 5. TEE xmwArloNs SHOWN ARE BASED ON N.S.V.(ATJM OF I'i'. I 7, FOR THE UNIT FLOOR ?LAN* GWJETNNINCI ,NITS RECR TO SHEETS 6 - P :E. THIS EXHIBIT. . - 111 ',.. ALLEN ENCINEERINC., 11W. . COCOA REACH, FLORIDA • ... ?TUX:ARV 25, 1981 UMUFT "A" SHEET 4 # . I i . • . --' I I I I I AL CAPE CANAVERAL PROFESSIONAL BLDG.' - ' .A CONDOMINIUM • 4 r+ I ,_____ _ _ A /t a' /8•o ro 6 i%V.' ' ? is I. 1� /` A T. F. Is A 4 Is I 4 5 6 . 7 .5.• /5onq 1111 ! SECOND FLOOR PLAN 0 T I V O Al £L1 R'JF.YUR'S NOM;: . Jr 1 1. 71E SCCONO ricoa r1NIS}fro FLUOR CLMA'1'/ON : 20.1E FEET. ` 2. Trc SLCGSD EI.C.OR CIETsB:U Cr:11.,1r ; s.t-VA'FION IS 211.111 FEET. I J. ALL AREAS AND IMPR(7VE>IINT.I 1:IIC1.0 i1VP OC TAY, UNITS THEMSELVES ARE COA L1N ELEMENTS OF TUC c-(NUOM.INIUM_ 4. () INDICATES THE UNIT I<LMRER 7ES I(NATIoN, S. INDICATES THE LIMITS or 711E ;NIT. • N I ~ v O I, '6- THE us:item:y1 RHOUN AI<C RASED ON N.C.V. DATUM OF 1:'29. Cl '' R FO �:HE Ux IT ['Look ?CAN'S ETALTERNINi; UNITS REF£A TO r11EBYS 1C-17 TN TIITS EXHIBIT. r ALLEN ENGINI:rR1.MYi. INC. I .COCOA BEACH, I LONTDA FEBRUARY 25, 1411 ExHIRIT "4" SHEET t, ` t, I 1 I I — 39 - i I I - ..- CAPE CANAVERAL PROFESSIONAL BLDG ----, A CONDOMINIUM II . .. . . _I ; 4 • . • It 4,6:114 I , -.... Otoex 0,4r i "my.04Ir . .3 C..= = 4:4-0%r 1"•-dil: . . . ••. = . . I :'' .- • .. , . I Orrice .1714e)r/Z=Pr" \ • • . I - • . = : !.• • . I N. • . ..cocet otary . "et o'x Alede. / CD P4 -n it 1— . N CD 73 • \ IV M I .1 c, mu 1 • I 0.11 SURVEYOR'S NOTES: I. •THE DIMENSIONS SHOWN ARF REPRESENTATIONAL AND . AS SUCH MAY VARY SLIGHTLY. 01:1 V' 2. •••••■•INDICATES THE LIMITS OF THE UNIT. --■■ '- rn I , , \ . c--- . IALLEN ENGINEERING, INC. • COCOA BEACH, FLORIDA FEBRUARY 25, 1901 minx: 'A' SKEET 6 I ,e ITYPICAL UNIT SKETCH I I I 1 I HIGHEST AND BEST USE IThe 12th Edition of the Appraisal of Real Estate defines highest and best use as follows: I "the reasonably probable and legal use of vacant land Ior an improved property, which is physically possible, appropriately supported, financially feasible, and that results in the highest value." In estimating highest and best use, there are essentially four stages of Ianalysis: I 1 . Legally permissible use (legal). What uses are permitted by zoning and deed restrictions on the site in question? I2. Physically possible use. What uses of the site in question are physically possible? I3. Financially feasible use. Which possible and permissible use will Iproduce a net return? 4. Maximally productive use. Among the feasible use, which use Iwill produce the highest return or the highest present worth? I The highest and best use of the land (or site) if vacant and available for use may be different from the highest and best use of the improved property. This is true when the improvement is not an Iappropriate use, but it makes a contribution to the total property value in excess of the value of the site. IThe following tests may be met in estimating the highest and best use: The use must be legal. The use must be probable, not speculative or 1 conjectural. There must be a profitable demand for such use and it must return to the land the highest net return for the longest period of I time. I - 41 - II HIGHEST AND BEST USE AS IF VACANT Permissible Use ' The appraiser is not aware of any deed restrictions that would dictate the use that could be constructed on the property. There are, however, public restrictions that do affect the use. As was previously discussed in the zoning section, the subject property is zoned for commercial use by the City of Cape Canaveral. This zoning classification allows for development of retail stores, 1 professional offices, banks, personal service facilities to name just a few. Possible Use The first constraint imposed on the possible use of the property is dictated by the physical aspects of the site itself. The size and location within a given block are the most important determinants of ' value. In general, the larger the site, the greater its potential to achieve economies of scale and flexibility in development. The subject site consists of a .14 acre, or 6,250 square foot tract of ' land that is rectangular in shape. The size and shape is conducive for development of many small scale uses. The site benefits from all utility services as well as frontage and access along Polk Avenue. The site is flat and level and has good drainage characteristics. The soil conditions were found to be favorable for development. The subject site is well-suited for development with those legally ' permitted uses which can conform to the size and shape of the site. The appraiser is not aware of any physical conditions that could ' adversely affect development of the site to its highest and best use. ' - 42 - I I Feasible Use IAs was discussed, the subject site is zoned for commercial uses. By location, the site is feasible for development with a low intensity use I such as a retail store or office facility that would not require exposure to high traffic volume. These uses would conform to the neighborhood as the area is developed with similar uses. Conclusion IAfter consideration, the appraiser has concluded that the highest and best use of the subject site is for development with a low intensity Iretail or office facility. These uses are legally permissible, physically possible and are believed to provide the highest return to the land Iamong all competing uses. HIGHEST AND BEST USE AS IMPROVED The subject site is developed with a seven-unit office facility. This use is legally permissible, as it is allowable under the C-1 zoning regulation. I The subject building encompasses a footprint of approximately 22% Iof the total site area, which falls within the typical range of 15% to 25% for like properties. The present use is legally permissible, physically possible, and is believed to provide the highest return to the underlying land. The Ipresent use is in conformance with the other uses in the neighborhood, and is fully functional. I I I - 43 - I I EXPOSURE TIME Exposure Time is defined as: The estimated length of time that the p g I 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. The appraiser consulted several local real estate brokers and was Iinformed that the value concluded herein could have been achieved after an exposure period of nine to twelve months. I IMARKETING TIME I Marketing time differs from exposure time as it estimates the time required to sell the property from the date of valuation forward. If market conditions prior to the date of valuation are expected to Iremain unchanged after the date, then the two would be the same. In this case, the appraiser estimates that the marketing time would Ialso be in the nine to twelve month range. I I I I I I I - 44 - I I APPROACHES TO VALUE 1 The sales comparison and income approaches to value will be I utilized in estimating the market value of the subject property in fee simple. These approaches are believed to be sufficient to arrive at a credible estimate of market value. The sales comparison approach to value estimates the value of the Iproperty based upon an analysis of comparable sales. The market will be researched in order to find sales of properties similar to the Isubject. The sales are directly compared to the property under appraisal and adjusted for any differences. The resulting value I conclusions developed from the sales are then correlated into a single estimate of value for the property under appraisal. IThe income approach, the market rent is estimated by analyzing recent leases and current rental rates for competitive facilities in the Iarea. After deducting a reasonable allowance for vacancy and income loss, expenses and replacement reserves, the net operating Iincome is capitalized into an indication of value for the subject using an overall capitalization rate. IThe cost approach was determined to not be credible in I determining the market value due to the age of the improvements and the subjectivity in estimating accrued depreciation. IIn this appraisal, the value indications produced by the Sales Comparison and Income Approaches will be reconciled into a final Ivalue estimate. I I I - 45 - I I I SALES COMPARISON APPROACH TO VALUE I The sales comparison approach to value is a process of comparing g I sales of similar properties that have sold in the marketplace to the property being appraised. The strength of the sales comparison I approach is that the data used to compare with the subject property are actual sales in the market. The approach applies the actions of buyers and sellers to a subject property in order to estimate a value. IThe principle of substitution implies that a prudent purchaser will not pay more for a property than a comparable property would cost t him. IThe application of the sales comparison approach in a given situation consists of comparing the property being appraised with I other similar properties that have moved in the marketplace. When sufficient sales of comparable properties are available for analysis, the sales comparison approach is a most reliable guide to value. Each comparable sale is compared to the subject property, with Iappropriate adjustments, in order to provide a value indication to the subject by the comparable sale. These separate value indications Iare then correlated into the estimate of value by the sales comparison approach. IThe first step in this approach is to search the market for sales with I similar uses. The investigation disclosed four sales of similar properties that were selected for analysis and comparison to the subject. IThe following pages contain a tabulation of the pertinent data obtained from each sale, as well as a sales location map, Iphotographs and detailed sale sheets describing each transaction. I I - 46 - 1 TABULATION OF IMPROVED SALES ' SALE DATE PRICE SQ.FT. S/SQ.FT. LOCATION 1 4/13 $100,000 949 $105.37 2955 Pineda Plaza Way Melbourne 2 3/13 $119,000 1,092 $108.97 1680 Highway A l A Satellite Bch. 3 3/13 $45,000 998 $45.09 120 Venetian Way ' Merritt Island 4 12/11 $26,000 470 $55.32 102 Columbia Dr. Cape Canaveral ' 110 Polk Av. Subject 6/13 --- 468* Cape Canaveral ' * = Typical Unit Size 1 ' - 47 - t I I od Allen HIS Ave a T 5 fr0f Ln p` 5 p E A O And%O or Z Jen Dr I of d Ca a Dr 509 l n c a O O Z f Arlington I -o 4 E A I tam � SsLE Ml Pineda Causeway g' o • 404 n Windsor E��e9 Dr I B t S 3 a pineda Causeway z Lcgetr Hoofprkrt Or 309 0' O S Madrid P m Shares a O Outlook Dr z ` ,E i ar Cove Rd Buakress Center Blvd I x it I N 9 Ocean Spray Ave z Greenway Ave Skyline Bit" i c Maple Dr Y Coach Rd = T Cherry Dr * I Carriage Rd Dr 5 ' n 0 Winchester Rd Elm Ave n U n 'c v E c I Sateillte Desoto Pkwy p , ' Bueh rvgg m K j54LEN2 _ ��O 0t Lynn Ave n C Trinidad0 u ggg 0 I S 13 a m m ne Tomahawk Dr .�a'1 N A 3 AtA ° A Q n & Q o m, `Dr 3 >Palmetto Ave g k 5 I Q Satetltle Ave ¢ Eau Gone Ave 013 Indian Harbour Mach i z 3 NO CP U Martesia Way m py c. Q Park Dr o River Or Pinetree Of I 9 0 COMPARABLE SALE MAPS I I - 48 - I I 5 ' 4016100010"' I Marine Hecba Or Ada Ray or .. Sea Rey a I ..as f 32D Furman Rd Oak Park Cede "i c»3 ralenndge Circle 63 0 Ave 1 O ' 2` Q V smitten Way • • ;13- Via Mayotte o 2 �. Crown to N n V oe !as Palmas -- Rani - -- I ,.SM �t Nigh Field Manor Dr `----,;) 7 i) ' Rantree Lake Circle Cam a, Pioneer Rd <' 25 'LLD hennas Tropical Trail N m —. Butler Ave *°°.���.,°r , J Manah Ct Skyline Blvd soeaiocd Bar crni HrMrr Stone Dr Joe PI 2 ` m Charter St KYtgs Ln e-,, Chen Down Ln . DI > 'C •om.Beech Gac Q cof mr Com !It lM I 8 Caroine St gg Manatee Bay Dr ��V re Z Washington Ave U Columbia Or • Church Ln 4- Adams Ave Q I Long Porn Rd > i Jefferson Ave < Madison Ave MA IX ' o Monroe Ave International Dr f < Cana., o Jackson Ave Jackson Ave Gay Par, i Majestic Bay Ave ¢ Hann Ave I Carver St N N Carver St S I�-F Ia@M1 Riverside Dr rs Ave Amo Ave < a ya Hitching Post Rd -�.efy Polk Ave 'Alf Riche Ave Cape w�oc. I a Resort Z Taylor Ave a' Fillmore Ave I COMPARABLE SALE MAPS I - 49 - 1 Y I. 4 ill * ' COMPARABLE SALE NUMBER 1 ADDRESS: 2955 Pineda Plaza Way, Melbourne ' TAX I.D. NUMBER: 26-37-19-00-00510.W-0000.00 ' O.R. BOOK/PAGE: 6861 / 2334 GRANTOR: Annapolis Melbourne Management Group, LLC GRANTEE: TNK Management, LLC ' LAND SIZE: .1 Acres ZONING: Commercial PRICE: $100,000 DATE OF SALE: April 2013 ' UNIT PRICE: $105.37 per sq. ft. TERMS: Conventional HIGHEST AND BEST USE: Continued Office Use PROPERTY DATA: The comparable sale property is located at the corner of ' Pineda Plaza Way and Wickham Road in Melbourne. The sale unit (#210) is in use as an office condominium containing a total of 949 square feet. The improvements were built in 1986 of masonry construction and were ' considered to be in good condition at the time of the sale. COMMENTS/ VERIFICATION: Verified to be arms length by the grantee. ' - 50 - II ®12 1 13, COMPARABLE SALE NUMBER 2 ' ADDRESS: 1680 Highway AlA, Satellite Beach TAX I.D. NUMBER: 27-37-01-50-00006.0-0007.05 ' O.R. BOOK/PAGE: 6836 / 1316 ' GRANTOR: John L. and Christy H. Bocinsky GRANTEE: Business Advisors, LLC ' LAND SIZE: .1 1 Acres ZONING: Commercial PRICE: $119,000 DATE OF SALE: March 2013 ' UNIT PRICE: q per 108.97 s . ft. TERMS: Conventional $ P HIGHEST AND BEST USE: Continued Office Use ' PROPERTY DATA: The comparable sale property is located along the west right of way of Highway AlA in Satellite Beach. The sale unit (#E) is in use as an office condominium containing a total of 1,092 square feet. The improvements were built in 1984 of masonry construction and were ' considered to be in good condition at the time of the sale. COMMENTS/ VERIFICATION: Verified to be arms length by the grantee. ' - 51 - 1 • FP" ftt 1 COMPARABLE SALE NUMBER 3 ADDRESS: 120 Venetian Way, Merritt Island ' TAX I.D. NUMBER: 24-36-14-00-00287.6-0000.00 ' O.R. BOOK/PAGE: 6828 / 2842 GRANTOR: David M. and Barbara A. Strock ' GRANTEE: Patrick J. O'Rourke and Laurie A. Lashomb ' LAND SIZE: .09 Acres ZONING: Commercial PRICE: $45,000 DATE OF SALE: March 2013 ' UNIT PRICE: $45.09 per sq. ft. TERMS: Conventional ' HIGHEST AND BEST USE: Continued Office Use PROPERTY DATA: The comparable sale property is located along Venetian Way, just west of Courtenay Parkway in Merritt Island. The sale unit (#21) is in use as an office condominium containing a total of 998 square feet. The improvements were built in 1980 of masonry construction and were ' considered to be in average condition at the time of the sale. COMMENTS/ VERIFICATION: Verified to be arms length by the grantee. ' - 52 - II I I if I _ ___�,� V; . I w I la 1 ICOMPARABLE SALE NUMBER 4 ADDRESS: 102 Columbia Drive, Cape Canaveral ITAX I.D. NUMBER: 24-37-22-02-00000.0-0001.11 IO.R. BOOK/PAGE: 6513 / 2050 GRANTOR: Hope Management, LLC IGRANTEE: Jeffery S. and Nicole T. Luethje ILAND SIZE: .03 Acres ZONING: Commercial PRICE: $26,000 DATE OF SALE: December 2011 IUNIT PRICE: $55.32 per sq. ft. TERMS: Conventional IHIGHEST AND BEST USE: Continued Office Use PROPERTY DATA: The comparable sale property is located at the I northwest corner of Columbia Drive and Astronaut Boulevard in Cape Canaveral. The sale unit (#201) is in use as an office condominium containing a total of 470 square feet. The improvements were built in 1985 I of masonry construction and were considered to be in good condition at the time of the sale. ICOMMENTS/ VERIFICATION: Verified to be arms length by the grantee. I - 53 - I I The four sales developed indicated unit prices to the subject Iproperty ranging from a low of $45.09 per square foot to a high of $108.97 per square foot of building area. The following discussion I compares the four sales with the subject to develop a unit value for the subject property. IThe four sales were confirmed to have been arms length transactions and were cash to seller transactions that did not include favorable Iseller held financing. Sale Nos. 1, 2 and 3, which took place in 2013, reflect current market conditions and no adjustments for time were I necessary. Sale No. 4 took place in December 2011 and warranted an upward adjustment due to appreciable market conditions since its sale date. Sale No. 1 is a condominium unit within the Pineda Plaza complex Ialong Pineda Plaza Way and Wickham Road in Melbourne. This sale location is superior to the subject due to its higher traffic volume. The Isale office unit is also superior in condition when compared to the subject. All other factors were considered similar to the subject. I Overall, Sale No. 1 is superior to the subject and provides a higher indication of value to the subject. ISale No. 2 is an office condominium located along Highway AlA in Satellite Beach. This location is superior to the subject due to its higher Itraffic volume and proximity to the Atlantic Ocean. Sale No. 2 was also in superior condition on the date of sale. All other factors were Iconsidered similar to the subject. Overall, Sale No. 2 is superior to the subject and provides a higher indication of value. Sale No. 3 is located along Venetian Way, just west of Courtenay Parkway (State Road 3) in Merritt Island. This location is considered Islightly inferior to the subject. All other factors were considered similar to the subject. Sale No. 3 indicates a somewhat lower value to the Isubject. I - 54 - I I Sale No. 4 is situated at the corner of Columbia Drive and Astronaut IBoulevard (Highway Al A) in Cape Canaveral. This sale is superior in terms of location when compared to the subject. After the offsetting I adjustments for time and location, Sale No. 4 developed an indication similar to the subject. After careful consideration of the preceding discussion, the appraiser has concluded that a unit value of $60.00 per square foot for the Isubject property is reasonable and will be utilized in developing the value estimate through the sales comparison approach. I Applying the value indication to the subject's building area develops Ithe following indicated market value, as of June 1, 2013: INDICATED PROPERTY VALUE $60.00 per square foot x 3,204 square feet = $192,240 ISay = $190,000 I I I I I I I I - 55 - I I I INCOME APPROACH I The income capitalization approach is a method of valuation b P pP by I establishing a relationship between the income that can be generated from a property and the perceived value of a property by investors based upon the income-generating capabilities. The Iapproach involves estimating the property's probable market rent, the expenses of ownership attributable to the property, and an Iappropriate capitalization rate that will convert the property's net operating income into value. The appraiser does this by researching Iand analyzing: I (1 ) the property's income and expense history, (2) histories of competing properties, I (3) existing and asking rents for the subject and competing properties, I (4) estimating vacancy levels from the subject and similar ( ) g Y 1 Iproperties, (5) analyzing and estimating management's expense budget Iand (6) projecting tax assessments and utility costs. I ICONTRACT RENT The subject property is currently unoccupied and, therefore, not Isubject to any leases. The economic rent level for the subject property will now be estimated. I I I - 56 - I I ECONOMIC RENT ESTIMATE IEconomic rent can be defined as the rental income that a property I would most probably command in the open market. It is indicated by the current rents paid and asked for comparable space as of the date of the appraisal. 1 In order to arrive at an estimate of economic rent for the subject Iproperty, an investigation was made throughout the subject area for similar properties that are currently rented or offered for rent. The Iappraiser contacted several brokers and property managers for information on comparable properties. The properties surveyed were I restricted to properties that are believed to be comparable to the subject. The search of the market disclosed four office comparables that were selected for analysis and comparison to the subject. The Ifollowing pages contain a tabulation of rental data obtained from each of the properties, rent location maps, photographs and Icomparative adjustments made to each property. I I I I I I I - 57 - 1 TABULATION OF RENTAL DATA ' RENT RENT/ NO. SQ. FT. SQ TYPE LOCATION ' 1485 Atlantic Av. 1 820 $10.24 Gross Cocoa Beach 2 589 $12.22 Gross 1980 Atlantic Av. Cocoa Beach • 3 3,200 $10.50 Gross 99 George J. King Blvd. Cape Canaveral 4 600 $1 1.50 Gross* 7001 Atlantic Av. ' Cape Canaveral * = Includes Electric ' - 58 - II I I John F Kennedy Space Center I 401 Highway 401 4. 1 Cape Canaveral Air Cargo Rd Force Station Idolphin Rd O° Freddie t T N3 I 528 Astronaut Patrick Park �d George. 0 or Jetty Maritgn"Park Atlantis Rd I Al Ao/ Beach Park Ln-_. IT( ' o antra/ Blvd W Central Blvd E G ��9 Chan her St Blvd Gf 1 L o Adams Ave Mao SUBJECT PtiWWBtTY Cape anaveral Taylor Ave A t l a n t i c Pierce Ave O c e a n I Lincoln Me AlA Arthur Ave I I RENT M4 ? m II m c c P ic I ca C7: Cocoa Beach I 1144 m m c re I 320 ;. O IRENT COMPARABLES MAP I I I - 59 - I I Carmine Or I Barrel/0 Ln Angelo Ln a Cocoa Beach Causeway W 520 Cocoa beach Giiiiseiiray k{d m I 0 . N St Lucie Ln O I1ager Ln co I I 0.GOY.Ave R POW i2 1 AMA ID e i A t l a n t i c 1 �4�r Rd Roben B Murkshe 04,_• Dr RINT in c e an te I larjua Dr` Lori June Dt Q Wilson Park U yotiday Ln i 1 f 0a��Qo, a Rd z �a�rGand Ra i, ict- a I -oc to I I AtA' 4th St N — 1 IR Q � d Q' o `� o a:_ ll • 1st St N Minutemen Causeway i 111111 1 IRENT COMPARABLES MAP I I I - 60 - I I I RENT NO. 1 I ---�.,,. ca.It OA w....-I, 1 IRENT NO. 2 I 1 nh W,. s OM +tee Si UM an ,"10 yt ouNIIIIIIIIIPM �' h.. ' Ter- �. ..+, I I - 61 - I RENT NO. 3 I 1 p 0 i is X 0 :t N f A `T l ."` �3 tiff ql I } f f �v41 A .,.. , _.... . ,... .....,, ;,- t. . , ,.. . ,4,,,..„ t,..,..... ..., I 1 f 1 IRENT NO. 4 I I I 1,�I 1 of * . "of# . few f I li I I — 62 - I I The four rent comparables developed rental rates ranging from a low Iof $10.24 per square foot per year to a high of $12.22 per square foot per year on a gross expense lease basis. These rentals were directly I compared to the subject and adjusted for location and age/condition. IAs was discussed, the subject office units are in need of some maintenance and repairs prior to occupancy. Each of the four rent Icomparables were adjusted downward for their superior condition. The four comparables were also adjusted downward for location as 1 they are situated along more intensive traffic arteries when compared to the subject. A slight downward adjustment was 1 applied to Rent No. 4 as its rental rate includes electric. I After adjustments, the four comparables developed a rental rate range from $7.68 per square foot per year to $8.05 per square foot iper year. After consideration, the appraiser has concluded a rental rate of I $8.00 per square foot per year for the subject. Applying this rate to the area of the building develops the following gross potential income Iestimate: ESTIMATED GROSS POTENTIAL INCOME $8.00/square foot/year x 3,204 square feet = $25,635 The above rental rates are based on a gross lease arrangement in Iwhich the owner is responsible for management fees, legal and accounting fees, exterior maintenance, real estate taxes, reserves for Ireplacement and insurance; and the tenants being responsible for interior maintenance and all utilities. I I - 63 - OPERATING EXPENSE ANALYSIS In order to arrive at the indicated net operating income that the P 9 ' property is capable of producing, it is necessary to estimate the expenses of ownership and operation of the property. The appraiser has relied upon expense data obtained from other properties similar to the subject. Following is a discussion of these expenses: ' Vacancy and Collection Losses Vacancy and collection losses must also be considered. The subject ' neighborhood is experiencing occupancy rate of 85% to 90% for properties similar to the subject. Due to the subject's location, design ' and size, the appraiser believes a stabilized occupancy rate of 85% is appropriate. Management Fees The appraiser consulted with several property managers and was informed that management fees typically range from a low of 3% for a one or two tenant facility to a high of 10% for multi-tenant properties with a high rate of turnover. The research indicated that a 5% fee for the subject property would be appropriate. Legal and Accounting The next expense item to be calculated is that of legal and accounting fees. The legal fees would be the cost to have an attorney draft or interpret a lease while the accounting fees would consist of the annual cost required for an accountant to figure the taxes attributable to the property. This expense was found in the market to vary, however, an annual expense of $1 ,000 appears to be reasonable. ' - 64 - Real Estate Taxes ' Real estate taxes for the subject property were estimated previously in this report to total approximately $1,920 per year. This amount ' includes the ad-valorem taxes, the services tax as well as a 4% discount for timely payment. Insurance The insurance premium for the property covers the annual cost to insure the improvements against fire or other disasters. An estimated annual premium of $1,200 appears reasonable for the subject. Repairs and Maintenance ' This category covers the cost of maintaining the grounds and the structural components of the building. The subject basically has very little grounds maintenance as it is practically 100% improved with building and paving. Maintenance of the building improvements is estimated to cost $.20 per square foot per year, or $640. Reserve for Replacement ' The next expense to be considered is that of a reserve for replacement fund. This expense item would consist of a reserve fund set up to cover the costs of replacing long-lived items. These would include the roof cover, the HVAC compressor units and other items that will wear out prior to the economic life of the building. These costs are normally found to total $.15 per square foot of building area, or $480 per year. Following is a summary of the operating expense analysis and the estimate of the net operating income that the property is capable of producing. ' - 65 - II I Gross Potential Income $25,635 ILess: 15% Vacancy and Collection Loss - $ 3,845 Effective Gross Income $21,790 I Less: Operating Expenses Management (5%) $1,090 Legal/Accounting $1,000 ITaxes $1,920 Insurance $1,200 IRepairs & Maintenance $ 640 Reserves $ 480 ITotal Expenses $ 6,330 Net Operating Income $15,460 IThe operating expense ratio was approximately 29%, which appears I to be typical for properties of the subject type on a gross expense basis. The net operating income will now be capitalized into value. I I I I I I I I I - 66 - CAPITALIZATION OF NET INCOME The next step in this method is the selection of an appropriate overall p ' capitalization rate and converting the subject's net operating income into an indication of value. Factors such as risk, time, interest on the ' capital investment and recapture of the depreciating asset are considered in the rate. ' The appraiser can estimate an overall capitalization rate by any of several widely accepted techniques. These techniques include: 1 (1) derivation from comparable sales, ' (2) derivation from effective gross income multipliers, (3) band of investment-land and building components and ' (4) mortgage-equity technique (5) the debt coverage ratio method. ' The appraiser utilized the debt coverage ratio method, the mortgage-equity technique and market extraction technique to ' arrive at a reasonable capitalization rate for the subject property. These methods yielded a reconciled capitalization rate of 8.5% for ' the subject property. Dividing the estimated net operating income of $15,460 by this rate results in the following property value: INDICATED PROPERTY VALUE Net Operating Income $ 15,460 Divided by Capitalization Rate .085 ' Indicated Value $181,882 Say $180,000 ' - 67 - I I FINAL RECONCILIATION IThe two approaches to value developed the following indications of Ivalue to the subject property: Sales Comparison Approach $190,000 IIncome Approach $180,000 IThe sales comparison and income approaches developed similar value conclusions as they fell within $10,000 of each other. Both Iapproaches are believed to be reliable as they were developed with current sales and income data from the local market. IThe appraiser has placed equal weight upon the sales and income Iapproaches in arriving at a final estimate of value. After careful consideration and analysis, I have concluded that the Isubject property had an "as is" market value, as of June 1, 2013, of: IONE HUNDRED EIGHTY-FIVE THOUSAND DOLLARS ($185,000) I I I I I I I - 68 - CERTIFICATION I, the undersigned, do hereby certify that I have personally inspected the property identified as: ' 110 Polk Avenue Cape Canaveral, Brevard County, Florida To the best of my knowledge and belief: The statements of fact contained in this report are true and correct. ' The reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions and are my personal, ' impartial, and unbiased professional analyses, opinions and conclusions. ' 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 no bias with respect to the property that is the subject of this report or to the parties involved with this assignment. ' My engagement in this assignment was not contingent upon developing or reporting predetermined results. ' My compensation for completing this assignment is not contingent upon ' the development or reporting of a predetermined value or direction in value that favors the cause of the client, the amount of the value opinion, the attainment of a stipulated result, or the occurrence of a subsequent ' event directly related to the intended use of this appraisal. ' My analyses, opinions and conclusions were developed, and this report has been prepared in conformity with the Uniform Standards of Professional Appraisal Practice (USPAP), the regulating agencies governed under ' FIRREA, and the requirements of the Code of Professional Ethics and Standards of Professional Appraisal Practice of the Appraisal Institute. I ' - 69 - II 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, Clark A. Maxwell, MAI, have completed the continuing education program of the Appraisal Institute. I have made a personal inspection of the property that is the subject of this report. ' We have performed no services, as appraisers or in any other capacity, regarding the property that is the subject of this report within the three- , year period immediately preceding acceptance of this assignment. ' No one provided significant real property appraisal assistance to the person signing this certification. After careful consideration and analysis, I have concluded that the "as is" market value of the subject property, as of June 1, 2013, was: ' ONE HUNDRED EIGHTY-FIVE THOUSAND DOLLARS ($185,000) &LA /* --/e ' Clark A. Maxwell, MAI Cert Gen RZ920 ' - 70 - L GENERAL ASSUMPTIONS 1. The legal description used thi s report i s assu m ed to be co rr ec t. 2. No survey of the property has been made by the appraiser and no responsibility is assumed in connection with such matters. Sketches in this report are included only to assist the reader in visualizing the property. 3. No responsibility is assumed for matters of a legal nature affecting title to the property nor is an opinion of title rendered. The title is assumed to be good and merchantable. ' 4. Information furnished by others is assumed to be true, correct and reliable. A reasonable effort has been made to verify such information, ' however, no responsibility for its accuracy is assumed by the appraiser. 5. All mortgages, liens, encumbrances, leases, and servitudes have been ' disregarded unless so specified within the report. The property is appraised as though under responsible ownership and competent management. ' 6. It is assumed that there are no hidden or unapparent conditions of property, subsoil or structures, which would render it more or less ' valuable. No responsibility is assumed for such conditions or for engineering, which may be required to discover them. 7. It is assumed that there is full compliance with all applicable federal, state and local environmental regulations and law unless non- compliance is stated, defined and considered in the appraisal report. ' 8. It is assumed that all required licenses, consents 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 estimate contained in this report is based. ' 9. It is assumed that all applicable zoning and use regulations and restrictions have been complied with, unless a non-conformity gas been stated, defined and considered in the appraisal report. 10. It is assumed that the utilization of the land and improvements is within ' the boundaries or property lines of the property described and that there is no encroachment or trespass unless noted within the report. - 71 - I GENERAL LIMITING CONDITIONS 1. The appraiser will not be required to give testimony or appear in court because of having made this appraisal, with reference to the property in question, unless arrangements have been previously made. ' 2. Possession of this report, or a copy thereof, does not carry with it the rights of publication. It may not be used for any purpose by any person other than the party to whom it is addressed without written consent of the appraiser, and in any event, only with proper qualification and only in its entirety. 3. The distribution of the total valuation in this report between land and improvements applies only under the reported highest and best use of the property. The allocations of value for land and improvements must ' not be used in conjunction with any other appraisal and are invalid if so used. ' 4. No environmental impact studies were either requested or made in conjunction with this appraisal, and the appraiser hereby reserves the right to alter, amend, revise or rescind any of the value opinions based ' upon any subsequent environmental impact studies, research or investigations. ' 5. Acceptance of and/or use of this appraisal report constitutes acceptance of the foregoing general assumptions and general limiting conditions. RESTRICTIONS UPON DI SC L OSU RE AND US E Disclosure of the contents of this appraisal report is governed by the By-Laws ' and Regulations of the Appraisal Institute. Neither all nor part of the contents of this report (especially any conclusions ' as to value, the identity of the appraiser or the firm with which he is connected, or any reference to the Appraisal Institute) shall be disseminated to the public through advertising media, public relations media, news media, ' sales media or any other public means of communication without prior written consent and approval of the undersigned. diY 14,l--/P Clark A. Maxwell, MAI - 72 - I QUALIFICATIONS OF CLARK A. MAXWELL, MAI IPresently, and since 1979, Clark A. Maxwell has been engaged in real estate appraisal practice in Brevard County, Florida. He specializes in the appraisal of Ia wide range of commercial properties including vacant lots and acreage, office buildings, service stations, condominium and subdivision projects, I warehouses, citrus groves and mobile home parks to name just a few. He has also been actively engaged in appraisals for estate tax purposes and condemnation proceedings. IAPPRAISAL EMPLOYMENT IApril 1996 to Present-President, Maxwell Appraisal & Consulting Group, Inc. August 1980 to March 1996-Staff Appraiser for Robert W. Houha, MAI June 1979 to August 1980-Appraisal Assistant to Robert W. Houha, MAI EDUCATION IFormal Education: I University of Florida - Graduate, B.S.B.A. Degree, 1979 Major Field of Study: Real Estate Minor Field of Study: Environmental Sciences I Courses Completed: Real Estate Law Urban Geography Real Estate Finance Real Estate Analysis Real Estate Investment Real Estate Appraisal Urban Land Use Analysis IAppraisal Education: Recent courses and seminars through the Appraisal Institute: ICore Law Update - 2012 G Uniform Standards of Professional Appraisal Practice - 2012 I Business Practices and Ethics - 2012 G Appraising Convenience Stores-2012 Apartment Appraisal, Concepts and Applications - 2012 Small Hotel/Motel Valuation - 2005 I = Course 700: The Appraiser as an Expert Witness -2005 Course 710: Condemnation Appraising: Basic Principles - 2005 I Appraising a Proposed Property - 2004 G Subdivision Analysis - 2003 G Internet Search Strategies for Appraisers- 2001 Partial Interest Valuation - Divided - 2000 I = Rates and Ratios Used In The Income Approach - 1998 Highest and Best Use Applications- 1998 I - 73- II I QUALIFICATIONS OF CLARK A. MAXWELL, MAI -Continued IOther Related Courses/Seminars: I = Performing Commercial Evaluations - 2012 Webinar G Appraising and Analyzing Industrial and Flex Buildings - 2012 G Appraising and Analyzing Retail Shopping Centers -2012 I G How to Analyze and Value Income Properties - 2012 G Income Capitalization -2010 G Florida Supervisor/Trainee Roles & Relationships -2010 I G Ad Valorem Tax Consultation - 2010 G Expert Witness Testimony- 2010 Sales Comparison Approach - 2004 I COURT EXPERIENCE IQualified as an expert witness in the Eighteenth Judicial Circuit Court of the State of Florida, the Bankruptcy Court of the Middle District of the State of IFlorida, and the United States Tax Court. IPROFESSIONAL AFFILIATIONS I MAI-Member of the Appraisal Institute - No. 8609 State-Certified General Appraiser Florida License No. RZ920 IPARTIAL LIST OF CLIENTS IFinancial Institutions: Bank of America Coastal Bank Regions Bank TD Bank IBankFirst SunTrust Bank Prime Bank PNC Bank Paradise Bank Community Bank of the South I RBC Bank Wells Fargo Bank CCU BB&T Sunrise Bank Florida Community Bank I Others: Brandon Properties Harry A. Jones, Atty. IBrevard Community College Philip F. Nohrr, Atty. Brevard County Public Works Fla. Dept. of Transportation Brevard County EELS Program The Coy Clark Company ICDMA, Incorporated Town of Indialantic Fla. Dept. of Environmental Protection Canaveral Port Authority I - 74 - I __... m s DOCUMENT HAS A CQL,•,,,.,"; ,.' _c.:..;s _'I MARK--"PA .:,y.: G ':6437694 STATE OF FLORIDA DEPARTMENT OF BUSINESS AND PROFESSIONAL REGULATION ' FLORIDA REAL ESTATE APPRAISAL BD SEQ#L12100303352 DATE BATCH NUMBER LICENSE NBR 10/03/2012 128112206 ;RZ920 The CERTIFIED GENERAL APPRAISER ' Named below IS CERTIFIED Under the provisions of Chapter 475 FS. Expiration date: NOV 30, 2014 ' MAXWELL, CLARK A 2351 W EAU GALLIE BLVD STE 4 MELBOURNE FL 32935 ' RICK SCOTT KEN LAWSON GOVERNOR DISPLAY AS REQUIRED BY LAW SECRETARY I! 1 1 - 75 - 1 1 1 1 1 1 1 ADDENDA 1 1 1 1 1 1 1 1 I ZONING DIVISION 5. C-1 LOW DENSITY COMMERCIAL DISTRICT* Sec. 110-331. Intent. ' The requirements for the C-1 low density commercial district are intended to apply to an area adjacent to major arterial streets and convenient to major residential areas. The types of uses permitted are intended to serve the consumer needs of nearby residential neighborhoods, as well as the commercial needs of the motorist. Lot sizes and other restrictions are intended to reduce conflict with adjacent residential uses and to minimize the interruption of traffic along thoroughfares. All buildings in this district shall be considered in the fire district, as per the definition in section 110-1, and shall be built in conformance with the rules and regulations of fire districts. ' (Code 1981, § 637.45) Sec. 110-332. Principal uses and structures. ' In the C-1 low density commercial district, the following uses and structures are permitted: (1) Retail stores, sales and display rooms. (2) Personal service establishments, such as beauty shops and ' barbershops, laundry and dry cleaning pickup stations, tailor shops and similar uses. t (3) Professional offices, studios, clinics, laboratories, general offices, business schools and similar uses. (4) Hotels, motels. In no case shall there be more than 30 rental units per net acre nor shall a rental unit have a floor area less than 300 square feet. Hotel and motel units containing provisions for cooking or light housekeeping shall have a minimum floor area not less than 400 square feet. Motels and hotels may not be converted to other types of ' dwellings at more than the density required in this chapter for such dwellings. ' (5) Eating establishments. (6) Public and semipublic parks, playgrounds, clubs and lodges, cultural facilities, hospitals, clinics, mortuaries, funeral homes, ' government offices, schools, churches and similar uses. (7) Banks and financial institutions. ' (8) Commercial recreation, such as driving ranges, bowling alleys and similar uses. ' (9) Plant nurseries and greenhouses, provided that all outside display merchandise shall be contained in the required setbacks. (10) Repair service establishments, such as household appliances, radio and TV and similar uses, but not including automobile repairs. (11) Kindergartens and child care facilities. (12) Shopping centers and malls. (13) Retail sale of beer and wine for off-premises consumption. ' (14) Public schools. ' (Code 1981, § 637.47; Ord. No. 17-96, § 3, 10-1-96) Sec. 110-333. Accessory uses and structures. In the C-1 low density commercial district, customary accessory uses of one or ' more of the principal uses clearly incidental and subordinate to the principal use, in keeping with the low density commercial character of the district, are permitted. (Code 1981, § 637.49) ' Sec. 110-334. Special exceptions permissible by board of adjustment. (a) In the C-1 low density commercial district, after public notice and ' hearing, the board of adjustment may permit special exceptions which are compatible to permitted uses and which are able to meet the minimum requirements and performance standards as set forth in this zoning district. ' (b) The board of adjustment may adjust setbacks and provisions noted in article IX of this chapter as necessary and appropriate in granting special iexceptions. (c) Special exceptions may be permitted for the following: ' (1) Veterinary hospitals and clinics. (2) Radio and television studios, broadcasting towers and antennas. ' (3) Automotive service stations, subject to the following: ' a. All setbacks shall be no less than 25 feet from any portion of the building, including pump island. t b. Underground storage is required for all receptacles for combustible materials in excess of 55 gallons. Such storage shall comply with all Environmental Protection Agency ' standards. c. The accumulation and storage of waste petroleum ' products is forbidden, unless in compliance with Environmental Protection Agency standards. ' d. Curb cuts shall be made in accordance with section 110- 493. ' e. No service stations shall be erected or located within 150 feet of the property line of any church, hospital, school or park. f. A visual screen, meeting the specifications of section 110- 566, shall be provided along any property line abutting a ' residential district or residential use. g. Services and sales permissible include only the following: ' 1. Spark plugs, batteries, distributor parts, ignition system parts, vehicle wiring and the like. 1 2. Exhaust system components, engine cooling components, automotive air conditioning system ' components, braking system components, vehicle lighting system components, radios, steering assembly parts, fuel system components and the like. ' 3. Tire servicing and repair, but not recapping. ' 4. Washing and polishing, including the sale of related materials. ' 5. Greasing, oil changes and other lubrication. 6. Sale of cold drinks, package foods, tobacco and ' similar convenience goods for service station customers. ' 7. Road maps, informational materials, restroom facilities. 8. Truck and trailer rentals. h. Vehicles shall not be parked outside the building for more than four days, such four days to be considered as an accumulated parking time, whether consecutive or accumulated. i. Uses permissible at a service station do not include body work, straightening of body parts, painting, welding(other than ' minor repairs), storage of automobiles not in operating condition or other work involving noise, glare, fumes, smoke ' or other characteristics to an extent greater than normally found in service stations. A service station is not a body shop. j. Automotive parts, new or used, shall not be stored outside. k. Vehicles are not to be dismantled or scrapped for parts. ' 1. Engine and transmission overhaul may be performed only inside the service bays. m. A minimum of two enclosed service bays and a customer waiting area must be provided if maintenance and repairs are a ' part of the business. n. A minimum building size of 2,000 square feet shall be ' provided. o. No plants (grass, weeds, etc.) shall be allowed to grow ' through cracks or joints in the pavement. p. Landscaping shall conform to section 110-566. q. Service stations shall not be erected or located within 2,000 feet of the property line of another service station. ' (4) Places in which goods are produced and sold at retail upon the premises. ' (5) Vocational and trade schools not involving operations of an industrial nature. ' (6) Commercial establishments which sell, dispense, serve or store alcoholic beverages or which permit the consumption of alcoholic beverages on their premises. Also see section 110-332. ' (7) Dry cleaning establishments using noninflammable solvents and cleaning fluids, as determined by the fire chief. ' (8) Retail stores using outside display areas, provided the following are met: ' a. The area of outside display shall not exceed in size one- third of the enclosed area of the principal structure. ' b. The outside display area shall be considered the same as P Y ' the floor area for the purpose of calculating offstreet parking, setbacks and lot coverage. ' (9) New and used automobiles, major recreational equipment and mobile home sales or rentals with accessory services, subject to the following: ' a. All outside areas where merchandise is displayed shall be paved. b. All ingress and egress points to abutting streets shall be marked clearly and placed not closer than 150 feet apart on the 1 same street. c. All servicing and repair activities, except gasoline pumps ' shall be located in an enclosed structure. d. There shall be no storage of junked or wrecked ' automobiles, other than temporary storage not to exceed 30 days, and these vehicles shall be in an enclosed area and not be visible from outside the property. e. Ingress and egress points shall not be placed so as to P�' �' P P endanger pedestrian traffic. ' (10) Single-family dwellings, two-family dwellings, townhouses and multiple-family dwellings; provided, however, there shall not be more than 15 dwelling units per net residential acre. See requirements in the ' R-2 district in division 3 of this article. These requirements apply to residential construction in the C-1 district. ' (11) Commercial establishments for the storage or parking of recreational vehicles, trailers and trailerable items, provided it meets the following, as a minimum: a. Minimum lot size of 10,000 square feet. b. Vehicle storage area must be obscured from view by either walls, fences or hedges. ' c. Walls, fences and hedges must comply with all city rules and regulations and must be kept in good condition so as to ensure obstruction from view. (12) Public utility hequipment; uses and rights-of-way essential to ' serve the neighborhood in which it is located. (13) Theatres, drive-in theatres, photographic studios, bookstores ' and dance studios, unless such uses fall within the scope and restrictions of section 10-86 et seq. ' (14) Carwashes, including polishing, and sale of related materials. (Code 1981, § 637.51) Sec. 110-335. Prohibited uses and structures. ' In the C-1 low density commercial district, the following uses and structures are prohibited: ' (1) All uses not specifically or provisionally permitted in this division. (2) Any use which fails to meet performance standards specifications as provided in section 110-466. ' (3) Bottle clubs. (Code 1981, § 637.53) 1 Sec. 110-336. Area and dimensions. In the C-1 low density commercial district,the following areas and dimensions shall be required: (1) Minimum lot area shall be as follows: a. Service stations, hotels and motels, 12,000 square feet. b. All other principal uses and structures, 5,000 square feet, and, in addition,the ratio of gross floor area to lot area shall not exceed 1.5:1.0. ' (2) Minimum lot width shall be as follows: ' a. Service stations,hotels and motels, 100 feet. ' b. All other principal uses and structures, 50 feet. (3) Minimum lot depth shall be 100 feet. ' (4) Maximum lot coverage shall be 50 percent. (5) Minimum living or floor area shall be as follows: a. Hotels and motels, 300 square feet per rental unit. ' b. Hotel and motel units containing provisions for cooking or light housekeeping, not less than 400 square feet. c. All other principal uses and structures, 300 square feet. ' (6) The maximum height of all buildings constructed within the C-1 district shall be 45 feet. (Code 1981, § 637.55; Ord.No. 18-96, § 1, 9-3-96) Sec. 110-337. Minimum setbacks. ' (a) In the C-1 low density commercial district,the minimum setbacks ( ) tY >y required shall be as follows: 1) Front, 25 feet. (See subsection(b) of this section.) (2) Side (interior lot line), zero feet; 25 feet when abutting a residential district. ' (3) Side (corner lot line), 25 feet. (4) Rear, 10 feet; 25 feet when abutting a residential district. (5) Public or private street, 25 feet. (b) See section 110-536 for special setbacks. (Code 1981, § 637.55) ' Sec. 110-338. Landscaping, screening and parking. ' In the C-1 low density commercial district, landscaping, screening and parking shall be provided pursuant to article IX of this chapter pertaining to supplementary district regulations. (Code 1981, § 637.57) ' Sec. 110-339. Offstreet parking and access. 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