Aspen Appraisal Consultants

Transcripción

Appraisal of:
The Pearl Building
1401 Newcastle Street,
Brunswick, GA 31523
For
Ms Holly Black and Mr. Abraham Quesada
Quesada-Black LLC
1401 New Castle Street
Brunswick, GA 31523
Effective, August 25, 2010
Appraisal; 1401 New Castle Street
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Page 1
Gary Beaver
1105 Blythe Island Drive
Brunswick, GA 31523
912-264-3606, 912-258-0850
[email protected]
August 28, 2010
Ms. Holly Black and Mr. Abraham Quasada
Quesada-Black LLC
1401 New Castle Street
Brunswick, GA 31523
Dear Ms. Black and Mr. Quesada:
Re:
1401 Newcastle Street, Brunswick, GA 31523
This transmittal describes the noted property; viable alternative properties in the
marketplace; and the market conditions considered applicable to them. The attached
appraisal report details the valuation approaches and techniques utilized and the
concluded value estimates. The appraisal purpose is to estimate the market value of the
noted property; its function is for evaluation purposes.
Market conditions impact the marketability and therefore the market values of real
estate. This type information is typically included in most appraisal reports and is
sometimes more generic than specific. However, this report makes an extensive effort
to identify those geographic, economic, historic, and cultural factors that influence this
market and therefore the value estimates for these properties. Appraisals under all
circumstances need accurate market definition. The influences (economic, geographic,
history and culture) forming a specific market indicate the risks and potential returns of
involvement (whether as a buyer, seller, lender, or investor) over another. Correct
identification and understanding of these factors may dictate the success of any venture.
The detailed economic, geographic, historic and cultural observations noted in the
report support the following opinions for the regional and local market area.
-
Jobs provided by its major employers (the military, federal and state government,
GA Port Authority, and manufacturing) are not tied to market changes.
-
Its economic base should be consistent under most economic conditions due to
its geography, history and culture.
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Ms. Black and Mr. Quesada, page 2
-
The prospects of long-term job growth in the market area exceeds those of the
region overall.
-
The vulnerability of this area to hurricanes has been lower than in other coastal
areas due to its geology and geography.
-
Evacuation from this area in the event on a hurricane threat should be relatively
efficient since the location permits traffic flows to the north, west, or south.
-
Hurricane safety and evacuation are particularly relevant issues for coastal areas
since almost 60% of the current US population resides in coastal counties. As
these counties grow, those with lower hurricane impacts and superior evacuation
capabilities are likely to be the most marketable.
-
The market area history enhances the area appeal; it is extensive with events that
have significantly affected present-day life in the area.
-
Business and social conduct in this area may be more prudent and reflect sound
principles than that found in new and transitional areas.
The local market area is particularly non-transitional with numerous prominent
local families having ancestries longer than 100 years in the area. Most times
these elder generations set successful business and social examples. Many
influences of family and community traditions and decorum established over
time tend continue. People with strong roots in this area are often taught to
consider the effects of their actions (whether in personal or business matters) on
the family reputation and on other family members.
-
The overall ―quality of life‖ (which includes factors like living costs, population
densities, commute times, job availability, weather, climate, availability of
services and conveniences, crime incidence and natural resources) in this area is
particularly desirable (per statistics provided in the report).
Due to these collective influences, involvement in this market area appears to be
preferable to other similar areas; however, readers/users of this report should satisfy
themselves as to the accuracy of the above observations and opinions as well as any
questions concerning the market area, the appraised property, or any comments or
observations made herein.
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Ms. Black and Mr. Quesada, page 3
The "Appraisal Assumptions and Limiting Conditions" and "Certification", are
customary for this type of assignment, and are included in the report. The final value
estimate is subject to these items, which readers/users of this report should read and
understand prior to reliance on its content. This transmittal letter is not, in and of itself,
an appraisal; rather it precedes the "Narrative Appraisal Report-Complete Appraisal‖
that describes the value approaches utilized and the conclusions derived by their
application. The attached report contains the pertinent data, reasoning, and opinions
leading to the value estimates. Use of this report is restricted to the named client and for
the stated purposes only. Any other use renders it void.
This appraisal basis is the captioned building in its present condition as a 2,790 square
foot premium commercial space used as a restaurant on the 1st floor and as a 2,790
square foot residential flat on the 2nd floor (about 5,580 total habitable square feet).
Based on the data presented, the opinion of estimated ―as is‖ market value for the
subject on the appraisal effective date, August 25, 2010, is:
One Million Nine Hundred Fifty Thousand Dollars,
1,950,000.00
The value estimate and all comments made in this report are expressed appraisal
opinions. These opinions result from the analysis of observed market activities; they
consider all pertinent appraisal factors; however, their specifics, including the suggested
results, may not occur in part, or at all, and do not represent a fact of any kind. The
appraisal was developed and prepared according to the Uniform Standards of
Professional Appraisal Practice. This report intends compliance with the applicable
federal regulations as furnished to and published by the major Professional Appraisal
Groups, as of the effective appraisal date.
Respectfully submitted,
Gary Beaver
Georgia Certified General Appraiser CG207013
Certificate Expires 05/31/2011
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TABLE OF CONTENTS
TITLE PAGE
LETTER OF TRANSMITTAL
TABLE OF CONTENTS
1
2
5
PART I - INTRODUCTION
Salient Data Summary
Certificate of Appraisal
Contingent and Limiting Conditions
Definitions
6
7
8
10
PART II –USPAP COMPLIANCE
Appraisal Report
Purpose and Function of the Appraisal
Property Rights Appraised
Scope of the Appraisal
Value Approaches Described
Valuation Approaches; (applicability to the subject)
Intended Use/Intended Report User
Exposure Time/Marketing Time
Competency Disclosure
Personal Property/Non-Realty Transfers
Property Ownership History
Certification Statement
15
15
15
15
16
27
28
28
28
28
28
28
PART III-DESCRIPTIONS
Subject Property
Photographs
Floor Plan Sketches
Market Identification
Regional Profile
Market Area Profile
29
38
57
58
59
70
PART III – VALUATION OF THE SUBJECT:
Highest and Best Use Analysis
The Appraisal Process
The Cost Approach
The Income Approach
The Direct Sales Comparison Approach
Correlation and Final Value Estimate
APPRAISER QUALIFICATIONS
78
81
85
86
87
114
115
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SALIENT DATA SUMMARY
General Information:
Location:
Downtown Brunswick, GA; the established, commercial,
historic town core with the GA port facility; government and
commercial buildings; retail stores, banks, restaurants;
historic homes; and moderate residential properties.
Access:
Newcastle Street to GA Highway 341; to Interstate 95
Map Reference #:
Parcel ID:
Address:
Legal Description:
Site Size:
Current Zoning:
Flood Zone:
Census Tract:
Purpose of Appraisal:
Function of Appraisal:
Property Interest:
Appraisal Effective Date:
B01201032012
01-01540
1401 Newcastle Street, Brunswick, GA
Portion of 104 Old Town
2,700 square feet, .062 acre
General Commercial Core
FEMA Map #13127C0238F dated 09/29/86, Zone AE11
15260131270009.00
Estimate the market value of the subject building ―as is‖
For evaluation purposes
Fee simple estate
August 25, 2010
Building Information:
Age:
Construction:
Condition:
Size:
Parking:
Built circa 1890
Masonry structure, walls and built-up roof
Finished interior and ―as new‖ finishes
Approximately 5,580 square feet; two stories
On Street (typical for downtown Brunswick)
Property Ownership Data:
Owner of Record
Quesada-Black LLC
Pearl Enterprises, Inc.
CXC II
Transaction Date
05/02/2006
01/20/2005
10/08/1999
Previous owner
CXC II
Rainey & Skarpalezos
Deed
1940/0057
1592/0405
0690/0695
Consideration
Gift
$115,000.00
$95,000.00
Market & Valuation Estimates:
Exposure time:
Marketing time:
Reconciled Gross Retail Value:
12-14 months
10-12 months
$1,950,000.00
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CERTIFICATE OF APPRAISAL
I certify that, to the best of my knowledge and belief:
1.
The statements of fact contained in this report are true and correct.
2.
I have personally viewed the subject properties at various times; the most was August 25, 2010.
3.
The reported analyses, opinions, and conclusions are limited only by the reported assumptions and
limiting conditions, and are my personal, unbiased professional analyses, opinions, and conclusions.
4.
I have no present or prospective interest in the property that is the subject of this report, and I have
no personal interest or bias with respect to the parties involved.
5.
Neither my compensation, nor employment, is contingent on an action or event resulting from the
analyses, opinions, or conclusions in, or the use of, this report.
6.
My analyses, opinions, and conclusions were developed, and this report has been prepared in
conformity with the requirements of the Code of Professional Ethics and Standards of Professional
Practice of the Appraisal Foundation and also complies with the requirements of the State of Georgia
for state certified real estate appraisers. This appraisal also conforms with the Uniform Standards of
Professional Appraisal Practice ("USPAP") adopted by the Appraisal Standards Board of the
Appraisal Foundation.
7.
As of the date of this report, I, Gary Beaver, have completed the appraisal education requirements of
the state of Georgia.
8.
I do not authorize the out-of-context quoting from, or partial reprinting of, this appraisal report.
Further, neither all, nor any part, of this appraisal report shall be disseminated to the general public
by the media for public communication without the prior written consent of the author.
9.
The use of this report is subject to the requirements of the State of Georgia, relating to review by the
commission.
10.
The value conclusion, as well as other opinions expressed herein, is not based on a requested
minimum value, a specific value, approval of a loan, or the occurrence of any particular event.
Gary Beaver,
Georgia Certified General Appraiser CG207013
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CONTINGENT AND LIMITING CONDITIONS
1.
The author/appraisers liability extends only to stated client, not subsequent
parties or users, and is limited to the fee amount received by the
author/appraiser. Acceptance of, and/or use of, this appraisal report by the
stated client or any third party, constitutes acceptance of this and the following
conditions of its use.
2.
This analysis and appraisal is being prepared at the direction and for the benefit
of the client: Ms. Holly Black and Mr. Abraham Quesada, Quesada-Black LLC,
and/or parties designated by this beneficiary, with the intended use of estimating
its market value for evaluation purposes. There is no other specified report user;
and none may use the report without written consent.
The information contained in this report is specific to the needs of the client and
for the intended use stated in this report. Any unauthorized use by the named
recipient (for any specified purpose) or its use by any unauthorized parties for
any reason renders the report void.
3.
This is a Complete Self-Contained Appraisal Report that is intended to comply
with the reporting requirements set forth under Standard Rule 2-2(a) of the
Uniform Standards of Professional Appraisal Practice for a Complete Self
Contained Appraisal Report. Therefore it:
(i)
states the identity of the client and any intended users, by name or type;
(ii)
states the intended use of the appraisal;
(iii)
describes information sufficient to identify the real estate involved in the appraisal,
including the physical and economic property characteristics relevant to the assignment;
(iv)
states the real property interest appraised;
(v)
states the type and definition of value and cites the source of the definition;
(vi)
states the effective date of the appraisal and the date of the report;
(vii)
describes the scope of work used to develop the appraisal;
(viii)
describes the information analyzed, the appraisal methods and techniques employed, and
the reasoning that supports the analysis, opinions, and conclusions; and explains the
exclusion of the cost approach, direct sales comparison approach, and/or the income
approach, if applicable;
(ix)
states the use of the real estate existing as of the date of value and the use of the real
estate reflected in the appraisal; and describes and supports the rationale for any opinion
of the highest and best use where applicable;
(x)
clearly and conspicuously states all assumptions and hypothetical conditions; and that
their use might have affected the assignment results; and,
(xi)
includes signed certification(s) as prescribed by Standards Rule 2-3.
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CONTINGENT AND LIMITING CONDITIONS, continued
4.
The property appraisal presumes there to be no liens and/or encumbrances
unless otherwise stated in this report.
5.
The report presumes the property to have good and marketable title unless
otherwise stated. Revised value estimates may result with discovery of title
defects, however. The sales history of the subject property required by USPAP
does not reflect a title search. A title search is beyond the scope of this appraisal.
6.
The report presumes that information furnished by others is reliable; however,
no warranty is given or implied for its accuracy.
7.
This report presumes all engineering, plats, plot plans, drawings, sketches and
illustrative material included to be accurate; they may show approximate
dimensions provided to assist the reader in visualizing the property. Their
expressed or implied accuracy has no guarantee unless otherwise stated in this
report. We have made no survey for the purpose of this report.
8.
This report assumes the subject property to be free from soil or subsoil problems,
utility deficiencies, noxious weeds, insect infestation, methane gas, lead in water,
the presence of toxic waste, the existence of Radon - a gas which comes from the
natural breakdown (radioactive decay) of uranium, or any environmental hazard
of any nature (discovered or undiscovered). Furthermore, we are not qualified to
recognize such conditions, and assume no responsibility for arranging
engineering studies that may be required for their detection. The client and/or
readers/users of this report may retain an expert in these fields, before any
involvement in, or with, the appraised property in this report for their own
security. The involvement of such experts and payment of their fees are the
responsibility of those seeking these services.
9.
The appraisal presumes the full compliance of this property with all applicable
federal, state, and local environmental regulations unless otherwise noted. We
have made no any environmental inspection or report of the subject property, nor
are we qualified to do so. Readers/users of the report should engage a qualified
environmental engineer or specialist to ascertain the existence of any
environmental hazards affecting the subject property if they have concerns
regarding such issues. Environmental impacts may be possible; but adverse or
unusual environmental factors were not apparent during the site evaluation; and
the appraisal presumes no such factors or conditions to be present.
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CONTINGENT AND LIMITING CONDITIONS, continued
10.
The subject property compliance with all applicable zoning and use regulations
and restrictions; licenses; required development, legislative or administrative
permits whether by local, state, or national governments, private entities or
organizations; and/or certificates of occupancy issuance or renewal; for any use
on which the value estimate contained in this report is based, is presumed.
11.
The appraisal presumes responsible ownership and competent property
management unless otherwise stated.
12.
The scope of the appraisal services contemplated in this report is limited to the
report. Other services, including, but not limited to, testimony, deposition, or
any court appearance with reference to this property, by reason of this report, is
not included unless other specific arrangements for these services have been
made. Such services are available, if needed, at an additional fee.
13.
Possession of this report, or a copy thereof, does not carry with it the right of
publication. Neither all nor any part of the contents of this report shall be
conveyed to the public through advertising, public relations, news media, sales,
or other media without the written consent and approval of the author,
particularly as to value conclusions, the identity and credentials of the
author/appraiser, or any reference to licensing held by the author/appraiser.
14.
The value estimate rendered presumes professional marketing of the subject with
promotional means and exposure and marketing time typical for the market area.
15.
This appraisal report renders an opinion of market value based on our
assessment and understanding of the data presented. This opinion may be the
same as, similar to, or different from, the conclusion of other qualified and
licensed appraisers based on the data contained herein and/or other market data
that could also be considered. Any opinion of value estimate suggested or
rendered herein is not an assurance or guarantee of any kind or any
representation of fact.
16.
The property being appraised is considered ―as is‖ with no modifications.
17.
The appraisal presumes compliance with the requirements of the Americans with
Disabilities Act. Any design element that would restrict access by disabled
individuals may adversely affect the property's value, marketability, or utility.
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DEFINITIONS
“As Is” Value:
The term ―as is‖ means the appraised property evaluation basis is the status and
physical condition existing on the appraisal effective date, including entitlements. This
value estimate presumes no changes to the property or contingent conditions exist.
Contract Rent:
The contract rent is the rental income specified in a lease.
Cost Approach:
A set of procedures in which an appraiser derives a value indication by estimating the
current cost to reproduce or replace the existing structure, deducting for all accrued
depreciation in the property and adding the estimated land value.
Direct Sales Comparison Approach:
The approach in appraisal analysis based on the concept that an informed purchaser
would pay no more for a property than the cost of an existing property with the same
utility. The approach is applicable when an active market provides sufficient reliable
verifiable data. This approach is relatively unreliable in an inactive market or in
estimating the value of a property for which no meaningful comparable sales data are
available. It is also questionable absent reasonable sales data verification.
Discounted Cash Flow (DCF) Analysis:
A set of procedures where an appraiser specifies the quantity, variability, timing and
duration of periodic income, as well as the quantity and timing of reversions, and
discounts each to its present value at an estimated yield rate.
Discounting:
The procedure used to convert periodic income and reversions into present value; based
on the assumption that benefits received later are worth less than the same benefits
received now.
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DEFINITIONS, continued
Discount Rate: (Dictionary of Real Estate Appraisal)
The discount rate is the return commensurate with the perceived risk used to convert
future payments of receipts to present value.
Fee Simple Interest: (―The Appraisal of Real Estate‖: The Appraisal Institute)
Absolute ownership unencumbered by any other interest or estate; a fee simple
ownership is subject only to the limitations of eminent domain, escheat, police power
and taxation. A fee simple estate is an inheritable estate.
Final Value Estimate:
The conclusion (reconciliation) resulting from the respective appraisal valuation
methods pursuant to the definition of value sought (i.e. market value, investment value,
insurance value, etc.).
Gross Retail Value Estimate:
The ―Gross Retail Value‖ is ―that price/value likely realized from the individual,
immediate sale of a specific property to a ready, willing, and able purchaser who can
close its sale as of the appraisal effective date (in which case there would be no
protracted marketing, holding, carrying, or closing costs)”.
The ―Gross Retail Value‖ and ―Market Value‖ are synonymous in the appraisal of a
vacant site; single ―as is‖ improved property; or rental property, occupied at, or above,
stabilized market levels. Gross Retail (Market) Value presumes a single retail sale
within the estimated marketing time.
Highest and Best Use: (―The Appraisal of Real Estate‖: The Appraisal Institute)
The Highest and Best Use is the reasonable, probable, and legal use of vacant land or
improved property that is physically possible, appropriately supported, financially
feasible and which results in the highest value.
Income Capitalization Approach:
This approach is a set of procedures in which an appraiser derives a value indication for
an income producing property by converting anticipated benefits into property value.
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This conversion is accomplished either by:
(1)
Capitalizing a single year’s income expectancy or an annual average of several
years’ income expectancies at a market derived capitalization rate or
capitalization rate that reflects a specified income pattern, return on investment
and change in the value of the investment; or
(2)
Discounting the annual cash flows for the holding period and the reversion at a
specified yield rate.
Leased Fee Interest:
The Leased Fee Interest occurs in a property held in fee has the right of use and
occupancy conveyed by lease to others. The Leased Fee Interest retains the right to
receive ground rentals over a specified time, plus the right of ultimate repossession at
the end of the lease.
Leasehold Interest:
The Leasehold interest is a property held under tenure of lease; the right of use in
occupancy of real property by virtue of a lease agreement. It is the right of the lessee to
use and enjoy real estate for a stated term and upon certain terms such as rent payment.
Legal Description:
The Legal Description identifies real property according to a system established or
approved by law; that enables the property to be located and identified.
Market Rent:
Market rent is the rental income that a property would most probably command on the
open market as indicated by current rentals for similar properties.
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Market Value: (appraised property interest)
"The most probable price which a property should bring in a competitive and open
market under all conditions requisite to a fair sale, the buyer and seller each acting
prudently and knowledgeably, and assuming the price is not affected by undue stimulus.
Implicit in this definition are the consummation of a sale as of a specified date and the
passing of title from seller to buyer under conditions whereby:
1.
2.
Buyer and seller are typically motivated;
Both parties are well informed or well advised, and acting in what they consider
their own best interests;
A reasonable time is allowed for exposure in the open market;
Payment is made in terms of cash in United States dollars or in terms of financial
arrangements comparable thereto; and
The price represents the normal consideration for the property sold unaffected by
special or creative financing or sales concessions granted by anyone associated
with the sale."
3.
4.
5.
Uniform Standards of Professional Appraisal Practice as promulgated by the Appraisal Foundation
Replacement Cost:
The cost of construction, at current prices, of a building having utility equivalent to
the building being appraised but built with modern materials and according to
current standards, design, and layout‖ The Dictionary of Real Estate Appraisal, Second Edition
Reproduction Cost:
The cost of construction, at current prices, of an exact duplicate, or replica, using
the same materials, construction standards, design, layout, and quality of workmanship,
and embodying all of the deficiencies, super adequacies, and obsolescence of the subject
building‖ The Dictionary of Real Estate Appraisal, Second Edition
Zoning:
The public regulation of the character and intensity of real estate use through police
power; accomplished by establishing districts or areas with uniform restrictions relating
to improvements, structure heights, areas, bulk, density of population and other
limitations of the use and development of private property.
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USPAP COMPLIANCE
Appraisal Report:
This document is a complete, self-contained Narrative Appraisal Report intended to
comply with all requirements of the Uniform Standards of Professional Appraisal
Practice for a complete Narrative Appraisal Report. It presents full discussions of the
data, reasoning, and analyses used in the appraisal process to develop the estimated
value opinion. Supporting documentation concerning the data, reasoning and analyses
is contained in this report; its depth is consistent with those required in a self
supporting-free standing narrative report as requested by the client, and for the
intended purpose, function, and use stated below.
Appraisal Purpose and Function:
The appraisal purpose is to estimate the market value of the subject, as of the appraisal
effective date. The intended report user and Clients are Ms. Holly Black and Mr.
Abraham Quesada for Quesada-Black LLC. The intended appraisal function is to
evaluate the appraised property for potential marketing. The stated Scope of Work,
purpose of the appraisal, reporting requirements of this appraisal report format, and
Definition of Market Value, governs the report and resulting opinion of value estimate.
Property Rights Appraised:
The property rights appraised in this report are the fee simple title; the present worth of
anticipated benefits that will accrue to a typical user through long-term property use or
ownership. This is without limitation to the fee to any particular class of heirs or
restrictions, except any existing easements (recorded or unrecorded) and applicable
land use regulations.
Scope of the Appraisal:
The ―Scope of the Appraisal‖ encompasses the collection, confirmation, analysis, and
reporting of the data on which the report is based. This is pursuant to the Uniform
Standards of Professional Appraisal Practice (USPAP) adopted by the Appraisal
Foundation. The Scope of work includes, but is not limited to, the following factors:
- The degree to which the property is inspected or identified
- The extent of research into applicable physical and economic factors
- The extent of data research
- The type and extent of analysis applied to arrive at opinions or conclusions; and
- The use and purpose of the report
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USPAP COMPLIANCE, continued
Public records identified the subject property and ownership history. Public records
(and comments from informed parties when available) provide sales confirmations. The
flood data source is the FEMA official web site. Non-confidential data from past
appraisal files; on-site observations; and data provided by the client and market
participants are additional data sources; all of which the report presumes to be reliable.
Market activity and influences determined the reasonable geographic market area and
reasonable alternative properties. The appraisal purpose and function, and the
appraised property features and status determined the applicable appraisal valuation
methods. The report process included detailed market research and data analysis. The
report makes all efforts to comply with USPAP.
The Highest and Best Use considers the estimated value of the subject property. This
analysis considers the current and/or prospective status; and the physical possibility,
legality, economic feasibility, and maximum productivity of potential uses. This analysis
considers reasonable alternative land uses with the highest and best use of the property
being that use resulting in the highest return to the land.
Value Approaches Described:
Real estate valuation utilizes three distinct methods; the cost of a similar, readily
available property (Cost Approach); the value of alternatives to the subject (Direct Sales
Comparison Approach); and the value based on the capitalized net operating income
(Income Approach). The type property appraised and specific appraisal purpose and
function determine the applicable techniques.
The Cost Approach is effective for special use, recent, or proposed improved properties;
however, this approach is usually invalid for older dated buildings as their reproduction
is unlikely in the current market.
This approach considers the replacement or reproduction costs plus the ―as vacant‖ site
value estimate. The Cost Approach does not apply to a vacant land appraisal where
there are no contemplated building improvements.
The Direct Sales Comparison Approach compares alternative properties (those with
reasonable appeal and utility) as the subject property; its basis is the substitution
principle (the concept that an informed purchaser acting prudently will pay no more for
a property than the cost of a readily available alternative with like utility).
.
Page 16
This comparison process requires reasonable market activity of similar properties of the
specific property type appraised to provide reliable results. Otherwise, absent
reasonably adequate data, this process tends to produce conjecture and speculation and
consequently, this approach may not be valid in those cases.
The relevant market data indicates the reasonable market area geography; the market
area is not arbitrary. Special purpose, larger, and unique properties may require larger
geographic market areas than those of basic properties. The geographic market area
should be sufficiently broad and include adequate data from reasonably similar
properties to provide basis for a meaningful value estimate.
The Income Approach evaluates a property based on its estimated periodic, recurring
net operating income and yield (an equity value change during the estimated ownership
term). This approach is most relevant for investment properties and is not usually
applicable to non-income consumer properties and vacant land. This process omits the
value contribution of any applicable non-income producing property component (such
as excess vacant land) that must also be included to reflect the total property value.
Each valuation approach considers the appraised property from a distinct perspective
and provides a value indication based on a theory independent of the other approaches.
Relevance of these value indications relate to their applicability to the appraisal purpose
and function based on the data quantity and quality considered; and the nature of the
appraisal assignment and objective. The most relevant value indication(s) is (are) given
the most credence and the reconciled result is generally reported as the ―Gross Retail
Value‖ or ―Market Value‖ estimate.
This report addresses the composition, theory, and application of these appraisal
valuation methods relative to the subject. Generic comments appear in blue text with
those specific to the subject shown in black text.
The Cost Approach is described by The Appraisal Institute publication "Appraising
Residential Properties" as follows: ―This approach is based on the reasoning that a
purchaser will not normally pay more for a property than the cost to purchase
comparable land and have improvements of comparable utility constructed on that
land without undue delay. To apply the cost approach an appraiser estimates the
cost of reproducing or replacing the existing structure with a new
building, deducts an appropriate amount for the loss in value caused by accrued
depreciation in the existing structure, and then adds the depreciated value of the
improvements to an estimate of the value of the land".
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The highlighted portion of the preceding definition relates to the insurable interest value
estimate in this report. The replacement or reproduction cost specific to the Insurable
Interest excludes a percentage of the overall cost allocated to site preparation and
building foundations, which, in most case would not be affected by an insurable loss.
The Cost Approach does not apply to land appraisals with no contemplated
improvements. It is impractical in most condominium appraisals, especially in multi
unit structures when two or more units physically share the same ground area. This
approach is possible for improved properties; but is most reliable for properties with
recent, new, and/or proposed improvements that reflect current design and
construction preferences; and special use and unique properties. Depreciation
estimates are increasingly more subjective and less reliable as buildings age. Older dated
improvements do not usually reflect current design and construction preferences, may
not comply with current codes, and are unlikely to be reproduced.
This approach initially evaluates the ―as vacant‖ land via one of several techniques.
-
Direct sales comparison of vacant land parcels; the most similar vacant land sales
(and offerings) available are considered for their relevance to the subject. (The
Direct Sales Comparison Approach comments describe this process).
-
Allocation; with the site value estimated based on the typical ratio of land value to
the total property value for the subject type property;
-
Extraction; with land values estimated from improved property sales deducting
the estimated contribution of improvements from the total value
-
Subdivision Development; where the estimated land value is the amount at which
the land can be purchased, the development built, all costs paid; with an
adequate return to justify the development. All costs (including a return for the
entrepreneurial commitment and investment to fund the development) are
deducted from the total gross estimated retail value of the completed
hypothetical development and the remainder is discounted (since the expected
income from sales occurring later in the marketing term has less worth than more
immediately received sales proceeds) to recognize the estimated marketing time
and costs needed to realize the retail sales of all inventory units.
.
Page 18
-
Residual Analysis; a concept similar to the Subdivision Development analysis
where the Highest and Best Use of land is estimated; the costs to produce the
highest and best use deducted; with the result being the land value indication.
(This valuation method often applies to a property with income producing
improvements as its estimated highest and best use. The value of the improved
property is estimated based on its capitalized net operating income; the
estimated improvement cost is deducted from the market value ―as improved‖
and the residual is considered to be the resulting ―as vacant‖ land value); and,
-
Ground rents (which may be applicable in instances where land parcels are
leased) where the market income from the land lease is capitalized based on an
overall rate derived from the marketplace.
Improvement costs, quantified as Replacement or Reproduction Costs, considered next,
are estimated from historic local data, and/or from cost services like Marshall & Swift (a
widely used cost service). Materials, labor, and installed component costs; derived from
current Marshall & Swift subscribers; Dodge building construction reports; phone, field
and mail surveys; product catalogs and trade publications; building construction trade
associations; government statistics and reports; contractors; architects; lending
institutions; labor organizations; and material suppliers and updated periodically,
provide the cost basis.
This data provides specific incremental base costs, refined for time, location, and design
factors by multipliers derived by the cost service research. Data in most markets is
usually adequate to estimate costs; however, in markets with limited reported data;
shortages for quality material and/or labor; and higher than normal transportation
and/or site preparation costs, the published multipliers may be inadequate. In such
cases, historic local cost estimates may be more reliable, accurate, and preferable to cost
service data.
Entrepreneurial incentives to attract the expertise, involvement, and investment
required for development are recognized and reasonable business costs and are included
in the cost estimate. All construction costs (including entrepreneurial profits) are the
―as complete‖ cost value of new or proposed improvements.
Existing and older improvements with prior use and weather exposure typically exhibit
physical depreciation (the estimated improvement effective age, possibly different from
the actual age, relative to its estimated total economic life).
.
Page 19
For example, a structure built new in 1990 is chronologically 20 years old in 2010;
however, with minimal use and/or renovation, the appearance and condition should
reflect a newer improvement. A structure with a 10-year estimated effective age (even
with a 20-year actual age) and an overall estimated 50-year economic life would have an
estimated remaining 40-year economic life and approximately 20% depreciation. The
estimated depreciation subtracted from the reconstructed value new reflects the ―as is‖
depreciated contributory improvement value.
The Cost Approach includes site improvement costs like paving, utilities, and
landscaping which also experience depreciation; their estimated contributory values
(cost less depreciation) also apply to the Cost Approach. The final site and building
improvements contribution value estimate is added to the ―as vacant‖ land value
estimate to result in the indicated Cost Approach Value.
The Direct Sales Comparison Approach is defined “Approach through which an
appraiser derives a value indication by comparing the property being appraised to
similar properties that have been sold recently, applying appropriate units of
comparison and making adjustments, based on the elements of comparison, to the
sales price of the comparables”. Dictionary of Real Estate Appraisal, page 265
The Direct Sales Comparison Approach basis is the principle of substitution, the concept
that an informed purchaser acting in a prudent manner would pay no more for a given
property than the cost of acquiring an existing alternative with the same utility. This
approach is a process of correlation and analysis of similar sold and available properties.
The reliability of this technique depends on:
(a)
(b)
(c)
(d)
The degree of comparability of each property to the appraised property;
The time of sale;
The verification of the sale; and,
The absence of unusual conditions affecting the sale
The subject property is the standard and never adjusted. The alternative properties are
adjusted for their differences with the subject that affects their values and/or
marketability. Specific "paired sales" (sales of the same property over time or two sales
of substantially similar properties occurring at different time) that show value changes;
and value contribution differences for a specific feature (shown by sales of similar
properties with a distinct difference) that occur during a similar time period; and
subjective observed market trends, provide adjustment estimate basis.
.
Page 20
A ―paired sale" may provide a reliable and objective indication of value changes over
time, the value of specific features, or a distinct value for an identified difference. This
concept appears to be a reasonable way to estimate adjustments and a hypothetical ―text
book‖ example of this ―paired sale‖ scenario meant to illustrate the premise and
application of this technique to readers/users of this report follows in the next pages.
For simplicity and illustration, the example deals with four basic vacant land parcels.
Parcel 1:
Parcel 2:
Parcel 3:
Parcel 4:
A.
Subject; 200’ x 250’ sold at $50,000.00
Sale 1; 200’ x 275’ sold at $60,000.00 the same day as Parcel 1
Sale 2; 200’ x 275’; sold at $65,000.00; heavily wooded, sold the
same day as Parcels 1 and 2. Parcels 1, 2, and 3 are adjacent.
Sale 3; 175’ x 200’; sloping; sold six months prior to the other
parcels; has unpaved access; located west of the other parcels.
There are two adjacent parcels offered at the same time and which sold and
closed on the same data. Both have similar terrain, 200’ road frontage,
moderate tree cover, utilities, and views. The only difference is that Parcel 1
(subject) is 200' x 250' and Parcel 2 is 200' x 275’. Parcel 1 (subject)
sold for $50,000 and Parcel 2 sold for $60,000. Parcel 1 is the appraised
subject; Parcel 2 is a comparable sale. The adjustment for Parcel 2 is
$10,000 and relates directly to its larger size.
Case A is very basic where two properties with only a single physical difference sold at
different prices at the same time. The relationship of the price and physical differences
indicates a distinct $10,000 adjustment for Parcel 2.
B.
Consider the above scenario adding a third property; Parcel 3 which adjoins
parcel 2 and sold at the same time as parcels 1 and 2. Like parcel 2, parcel 3
is 200' x 275 and has the same paved access, views, and terrain as Parcels 1 and
2; however, parcel 3 is wooded; parcels 1 and 2 are not. Parcel 3 sold for
$65,000. The differences between the subject and parcel 3 are the size and tree
cover. The prior Case A indicates a $10,000 value for the size difference. The
tree cover difference then appears to have a value of $5,000. Therefore, the
adjustments to parcel 3 are $10,000.00 for its larger size and $5,000.00 for
its trees.
Parcels 2 and 3 are larger and minus adjusted. Parcel 3 also requires a minus
adjustment for its tree cover.
.
Page 21
The above example is a distinct “paired sale” case that is easily recognized. This
“text book” illustration is helpful when the differences between properties are
distinct as illustrated above. However, in “real life” circumstances, such clear
differences are rare.
Consider the addition of a fourth property (sale three in the hypothetical
appraisal) identified as Parcel 4.
Case B has two differences with apparent value associations and is very basic. Case C has
more differences and illustrates the increasing difficulties in estimating adjustments in
this manner as differences among properties increase.
C.
Parcel 4 sold for $45,000 six months prior to the other parcels and is located .5
miles west on an unpaved intersecting street. It is 175’ x 200’ and slopes from
right to left, has no trees, and a small stream along one side. The view is an
adjacent commercial building in back.
Compared to the subject, parcel 4 differs in the sale date; size, access; road
frontage; stream; terrain; and, views. There is a $5,000 price difference
between the subject and parcel 4.
In scenarios A and B, the value relationships relative to the physical differences are
clear, but are not distinct in scenario C. The different sale dates; the smaller size; or the
other differences might affect the value; all are relevant but none is distinct.
The intent of the above example is to explain comparison analysis theory; to show a
basic and optimum comparison scenario; and to illustrate the intricate considerations of
this process to readers/users of this report. The ―paired data‖ technique may provide
clear adjustment estimates if distinct data is available; however, definite "paired sales"
like those shown in this example are rare in ―real world‖ actual circumstances.
Properties usually lack adequate distinction needed to associate a specific market value
to an individual difference. Therefore, absent adequately clear data, adjustments usually
result from subjective observations interpreted from observed overall market trends.
.
Page 22
Factors considered in the adjustment process that generally affect the sales prices (and
therefore market values) for the alternative properties are:
1.
Property Rights Conveyed:
Most property sales are fee simple estates meaning they include all property rights
associated with real estate ownership or leased fee (when leasehold rights are exchanged
for the lease income). Only, government authority like zoning or a typical (for a similar
property in the market area) deed covenants restrict fee simple properties. Sales
proceeds satisfy existing mortgages, if any, and the fee simple sale is completed. The
purchaser may exchange the ―right to mortgage property‖ for funding unless the sale is
for cash. A mortgage given for a new loan is a transfer from the grantee’s fee simple
―bundle of rights‖ received in the sale. However, if a property has an atypical
encumbrance or excludes a typical fee simple property right, any difference to the sale
price (relative to a similar property with so such impediment) might be the value effect
and constitute a property right adjustment for that sale.
2.
Terms-of-Sale:
Terms-of-sale addresses any abnormal or non-market financing that could affect the
sales price in a transaction. A seller concession (like below market and/or preferential
financing) resulting in a higher sales price for a property than for other properties of its
type with no such concession would usually constitute a terms-of-sale adjustment.
3.
Conditions of the Sale:
Conditions-of-the-sale adjustments address motives of the parties to a transaction.
Abnormal or non-arms length conditions that influence the sales price (compared to
typical similar property sales) may warrant adjustments. Non-arms length sales may be
those between family members or related parties; the discounted non-market value
lender sale of a REO property; or those with a party is under some type duress,
including financial pressure.
4.
Sale Date:
Very recent sales and listings tend to indicate current market conditions. Dated sales;
somewhat recent sales in volatile markets; and data from markets with unusual property
inventory changes might warrant sale date adjustments.
.
Page 23
Representative properties having an initial sale and subsequent sale; or, from broader
market activity where value changes over time are indicated by a number of sales may
suggest sale date adjustments to be justified. The market data should support these
adjustments with evident value changes over time; however, well-explained opinions of
observed market activity may also be reasonable to support sale date adjustment
estimates.
5.
Location and Physical Differences:
The comparable properties are also adjusted for physical differences with the subject
(when a value estimate can be associated the difference). The ―paired sales‖ analysis
may suggest reasonable adjustments if indicative data is available. However, market
data is usually indistinct with no specific price/feature relationships indicated.
Consequently, most adjustment estimates result from subjective data analysis.
Adjustments may be in incremental units of measure; or a total amount. An
incremental size/quantity adjustment to a property smaller than the subject is usually a
minus as market data suggests that a smaller, or less dense property, usually sells for
more per increment (but less) than an otherwise similar larger or denser property.
Prices tend to decrease with larger quantities and upward adjustment estimates are
typical for larger properties considered incrementally.
Conversely, comparisons based on total values, usually suggest upward adjustments for
smaller properties (that often sell for less, but more per increment or measured unit,
than an otherwise similar larger property). Likewise, minus adjustments are typical for a
comparable property larger than the subject if value estimates reflect a total amount.
The Direct Sales Comparison Approach considers market activity of reasonable
alternative properties to the appraised subject. The alternative properties are adjusted
to relate them to the subject where each indicates a value that forms a value range. The
individual value indications from this range are weighted for their applicability to the
subject. They ultimately provide the specific gross value estimate from this approach.
Essentially, this process attempts by adjustment (the addition and/or subtraction to the
sales or offered price of an alternative property for quantified price/value difference
with the subject) to equate it and the subject.
.
Page 24
If an appraisal was a controlled scientific experiment, the subject would be the constant
and the alternative property would be a variable. The adjustment process and scientific
market data analysis could replicate the subject and determine the exact value of a
difference. Adjustments could become precise corrections rather than estimated
appraisal opinions.
However, real estate transactions involve human actions and motives (which can range
widely), tend to be fluid, and include myriad and often unclear factors. In real estate
appraisals, market data relationships to the subject are perceived; not systematically
scientifically derived. Therefore, the conclusions resulting from appraisal research and
data analysis tend to be the subjective estimated opinions when presented in the Direct
Sales Comparison Approach.
The Income Approach is the “Approach through which an appraiser derives a value
indication for income-producing property by converting anticipated benefits, i.e. cash
flows and reversions, into property value. This conversion can be accomplished in two
ways: One year income expectancy or an annual average of several years income
expectancies may be capitalized at a market-derived capitalization rate or a
capitalization rate that reflects a specific income pattern, return on investment, and
change in value of the investment; secondly, the annual cash flows may be discounted
for the holding period and the reversion at a specified yield rate”. *
* Dictionary of Real Estate, page 156
This process entails estimating economic income; subtracting the estimated operating
expenses applicable to the type property being appraised; and, capitalizing the net
income into an estimated value from an overall market-extracted rate. The Income
Approach is more simply defined as the "procedure in appraisal analysis which
converts anticipated benefits (dollars included or amenities), to be derived from the
ownership of property into a value estimate.”
The Income Approach includes:
- An analysis considering comparable rental data, and/or the potential earning
capacity of the appraised property to estimate its gross income potential;
- An analysis of available comparable operating expenses to estimate the reasonable
market operating expenses of the appraised property;
- Comparable data analysis to estimate capitalization and/or discount rates; and,
- Anticipated rent and/or income and expenses estimates based on reasonably clear
and appropriate evidence.
.
Page 25
The formula for this process omits any value from non-income producing property
(such as excess vacant land); and which must also be included to reflect the total
property value, if applicable.
This process (indicates value from investor response to income properties and other
investments) in the marketplace; is based on estimated periodic, recurring net operating
income and yield (equity change during the estimated ownership term); is relevant for
income rather than consumer oriented properties; and directly considers the
income/economics of a property.
Value Reconciliation:
The respective valuation approaches culminate in the reconciled ―Gross Retail‖ also the
―Market Value‖. This reconciled value directly represents a vacant site; single ―as is‖
improved property; or rental property, occupied at, or above, stabilized market levels.
The Gross Retail (Market) Value presumes a single retail sale within the estimated
marketing time.
Multiple properties (needing several individual retail sales) or a rental property rented
at below market-stabilized occupancy and income levels (needing rental increases to
reach their market levels) require more cost and time than marketing of a single
property and/or income property rented at its market rate. The additional time and
cost reduces the ―Gross Retail Value‖ (as defined above) and the (value loss) from the
cost and unavailable sales revenue decreases the retail value; this estimated amount is
deducted from the ―Gross Retail Value‖ on a discounted basis (to account for the total
time needed).
Discounting embodies the ―time value of money‖ concept where money possession and
use has value; and that money in hand or received sooner than later has more worth
pursuant to basic banking principles where the use of funds warrant interest payment.
The Discounting definition is "the procedure used to convert periodic income and
reversions into present value; based on the assumption that benefits received in the
future are worth less than the same benefits received now". Dictionary of Real Estate
Appraisal
The dictionary of Real Estate Appraisal published by the Appraisal Institute defines the
discount rate as “a rate of return commensurate with the perceived risk used to convert
future payments of receipts to present value”. Dictionary of Real Estate Appraisal, Second Addition, page 92
.
Page 26
Market data including returns from alternative investments in the local marketplace and
from national published data (like www.RealtyRates.com) provide the basis for discount
(mortgage and investment) rate estimates. The anticipated income factored by the
discount rate over the estimated absorption time reflects the estimated discounted
present value.
Valuation Approaches; (applicability to the subject):
The appraised subject property is a .062-acre site improved with a 5,580 square foot
commercial and residential building, built around 1890. The building is a two-story
structure that was bought in uninhabitable ―tear down‖ condition (and would have likely
been removed and the site improved with a new building but for the building history).
The building was extensively and comprehensively renovated; it resembles a new
structure on its interior while keeping the historic ambiance. Due to the building age
and built up status of the instant neighborhood a traditional cost approach is essentially
unreliable and is not considered in the report
The traditional Income Approach addresses property based on its investment appeal
and the net income return; it is essentially reliable for generic properties with lower
costs and values and can be rented for less to a broader market However, the subject (by
its finish quality) is essentially a special use property. Its 1st floor fully equipped custom
restaurant is among the highest quality state-of-the-art restaurant facilities in the area
and region. Properties with higher status, like the subject property, are more likely to
appeal to a restaurateur purchaser (or a buyer connected with a qualified restaurant
operator). Therefore, in this case the Income Approach is would be inadequate to
recognize the applicable market for this property and is considered to be irrelevant.
The subject building is a historic property located in the original Brunswick town core.
No other building in this area that would normally be a reasonable alternative to the
subject has its overall quality, similar function, and appeal. (There are other restaurant
properties in town but none approaches the subject’s quality). Furthermore, there have
been no sales of similar quality and outfitted buildings and the higher quality
restaurants in town are in owner-occupied buildings. Therefore, the comparison process
must consider the most practical and reasonable alternative data from alternative areas
within the overall market scope.
The Direct Sales Comparison Approach, with proper market definition, reflects
price/value relationships for other properties of this type and is a reasonable means of
estimating the market value.
.
Page 27
The subject building is marketable as a single property within the estimated marketing
and exposure times and discounting principles are not directly applicable to this report.
Intended Use/ Intended Report User:
The intended use is for asset evaluation purposes in conjunction with possible
marketing. The intended user is the addressee.
Exposure time/marketing time:
The estimated exposure time is from 12-14 months and the marketing time estimate is
from 10-12 months and result from an overview of the market data.
Competency Disclosure:
―The appraiser(s) have the prerequisite knowledge, proper licensure and professional
experience to accept, perform, complete, and deliver the appraisal report on the subject
property in accordance with required governmental requirements and applicable
professional standards."
Personal Non-Realty Transfers:
Non-realty items are not included in the value estimate; however, value estimates
include fixtures that are typically included in the sales of properties of this type.
Property Ownership Data:
Owner of Record
Quesada-Black LLC
CXC II
Transaction Date
05/02/2006
01/20/2005
10/08/1999
Previous owner
CXC II
Rainey & Skarpalezos
Deed
1940/0057
1592/0405
0690/0695
Consideration
Gift
$115,000.00
$95,000.00
Certification Comments:
My analyses, opinions, and conclusions were developed, and this report has been
prepared in conformity with the Uniform Standards of Professional Appraisal Practice.
Employment of the appraiser(s) was not conditional upon the appraiser(s) producing a
specified value or a value within a given range. Future employment prospects are not
dependent upon the appraiser producing a specified value. Employment of the
appraiser and payment of the fee is not based on whether a loan application is approved
or disapproved.
.
Page 28
SUBJECT PROPERTY
Identification:
Map Reference #:
Parcel ID:
Address:
Legal Description:
Site Size:
Current Zoning:
Flood Zone:
Census Tract:
Purpose of Appraisal:
Function of Appraisal:
Property Interest:
B01201032012
01-01540
1401 Newcastle Street, Brunswick, GA
Portion of 104 Old Town
2,700 square feet, .062 acre
General Commercial Core
FEMA Map #13127C0238F dated 09/29/86, Zone AE11
15260131270009.00
Estimate the market value of the subject building ―as is‖
For evaluation purposes
Fee simple estate
Neighborhood:
The instant area is part of the original Brunswick downtown, originally designed in 1771
by Mark Carr, a Captain in General Oglethorpe’s army and patterned after Savannah.
President George Washington proclaimed Brunswick as one of the five original colonial
ports of entry in 1789. The Brunswick downtown is overlooks the South Brunswick
River and is easily accessible to US Highway 17 to its east and Interstate 95 to its west.
The downtown Brunswick, GA established and historic commercial core is a mixture of
commercial buildings, unique shops and restaurants, historic and more recent
government buildings, the Port of Brunswick facility, banks, historic homes, and
moderate non-historic homes and commercial buildings.
History:
The town name is for King George II's ancestral home, Braunsweig-Lunenburg,
Germany. After the Revolutionary War, many colonial towns distanced themselves from
their English heritage; however, Brunswick retained the English names of its streets and
squares such as Newcastle, Hanover, Gloucester, and London.
Brunswick was incorporated in 1836, and the Old Town placed on the National Register
of Historic Places on April 3, 1979. The Brunswick Old Town residential and
commercial district is the largest small town, urban National Register of Historic Places
district in Georgia. The downtown is undergoing revitalization through the National
Main Street program, preserving and showcasing its history.
.
Page 29
SUBEJCT PROPERTY, continued
Access:
Newcastle Street to GA Highway 341; to Interstate 95; (the main traffic artery to the
area) and US Highway 17
Site features:
The site is flat; typical for the area. The site along Newcastle Street in front is about 31’
and in back along Grant Street, also 31’. The east site abuts Monck Street, 90’. The west
site line is shared with 1403 Main Street. The site is fully improved with the structure,
typical for the Brunswick downtown area.
Building:
Age:
Built circa 1890
Construction:
Masonry structure, walls and built-up roof
Description:
The building was an uninhabitable shell when it last sold. It was
completely rebuilt in 2006 and 2007. Its 1 st floor is used entirely as
the ―Pearl Restaurant‖ and is highly appointed and fully equipped
as a premium restaurant with 100 seats (86 inside and 14 on the
patio). The restaurant has a dining area, a sushi bar/cocktail bar,
hall, patron restrooms, wine room, and the kitchen and service
areas.
The restaurant fixtures and equipment are extensive and identified
in an addendum schedule. The restaurant finishes include cork
panels (costing about $20.00 each) over brick walls (some brick
areas are exposed for effect but the cork reduces sound as well as
provides an attractive décor); treated concrete floors; and high
(about 12’) acoustical ceilings. There is a granite bar with 14 seats
and six (6) custom, deeply upholstered, built-in semi-private dining
booths. The remaining interior seating is by high quality matching
dining sets. Access to the 2nd floor is by an exterior stair situated
along the west side of the dining area. The area beneath the stairs is
utilized as a custom wine storage room, with a glass wall looking
onto the dining area. The wine room has a separate custom
designed cooling system (with a reported $3o,000.00 cost).
.
Page 30
The 2nd floor is an open span loft used as the restaurant owner residence. The great
room design encompasses the kitchen, dining area, an office alcove, a single sleeping
area and the living room. Partitions separate two baths, two closets, and a laundry area.
The main room floors are restored timbers; walls are wood and plaster; and ceilings are
restored open beams. The 2nd floor was once used by a group of attorneys with each
office heated by its own fireplace; hence, there are eight (8) fireplaces located along the
perimeter walls. The 2nd floor area appears to have sufficient size for it to be divided
into one or two more living units at the property owner’s discretion.
The kitchen features premium appliances and cabinets and the baths are modern and
new as is the laundry. The 3 rd level and roof deck is accessed by a spiral stair located
near the stairs leading down to the main level. The spiral stairs lead to an enclosed area
that opens to the roof deck. The deck has a rubber treated floor that also serves as the
roof covering. Approximately half the roof area is level and can be used as a deck;
however, rails along its perimeter would likely be required by codes. This area is not
included as part of the habitable building area but is a building amenity.
The city of Brunswick has reportedly given approval to other similar buildings in the
downtown area to add up to five living stories. Therefore, an addition to the building by
finishing the roof deck into an open-air lounge or construction of additional living floors
may be possible.
Comment:
The subject building is one of the most desirable historic downtown Brunswick
buildings. It had been in poor and uninhabitable condition but was completely rebuilt
with its structure engineered to handle its weight and mass.
The renovation was completed using the highest quality materials and the finished
building reflects quality levels found in some of the more posh homes in the area. The
restaurant is state-of-the-art, very custom, and complete and is among the highest
quality facilities of its type in the area and region.
.
Page 31
Location Map
.
Page 32
Location Map (Closer Scale)
.
Page 33
FEMA Map
.
Page 34
SUBJECT PROPERTY, continued
County Geographic Information Services Map
.
Page 35
Glynn County Assessor Data
Parcel ID:
01-01540
Map Reference Number:
B01201032012
Owner Name:
QUESADA BLACK LLC
Property Address:
1401 NEWCASTLE ST
BRUNSWICK, GA 31520
Mailing Address:
1401 NEWCASTLE ST
BRUNSWICK, GA 31520
Voting District:
6
Zoning:
GC-CORE
Commissioner
District:
Alan (Jerome)
Clark
5
Fire District:
901
Police District:
104
EMS Zone:
11
Census Block Population:
0
Pct Owners:
0
Legal Description:
PTN 104 Old Town
Exemption:
N/A
Land Class:
C3
Building Class:
C1
Land Value:
$14,000
Improvement Value:
$388,800
Total Market Value:
$402,800
$161,120
Sale Price:
Total Assessed
Value:
Tax District:
Sale Date:
Building Name:
Pearl
Building Use:
Building Model:
Year Built:
1890
Total Heated Area:
Stories:
Exterior Walls:
Brick
Heating/Cooling:
Interior Walls:
Interior Floor Finish:
Roof Type:
Roof Covering:
Rooms:
Full Baths:
Half Baths:
01
2
Sale Record 1
Deed Book-Page:
1940-57
Sale Date:
5/2/2006
Sale Price:
Gift
Sale Record 2
Deed Book-Page:
1592-405
Sale Date:
1/20/2005
Sale Price:
$115,000
Sale Record 3
Deed Book-Page:
Sale Date:
10/1/1999
Sale Price:
$95,000
.
Page 36
Photograph from the Glynn County GIS page to show the building before it was rebuilt
.
Page 37
PHOTOGRAPHS
Front of building (from across Newcastle Street)
Side of building (from across Monck Street)
.
Page 38
PHOTOGRAPHS, continued
Newcastle Street to the south
Newcastle Street to the north
.
Page 39
Rear of the building across Grant Street
Building exterior from Monck Street
.
Page 40
Entrance to the restaurant
Restaurant booth and cocktail bar
.
Page 41
Restaurant Dining area
.
Page 42
Restaurant Dining area
.
Page 43
Cocktail bar
Sushi bar
.
Page 44
Back bar area
Wine room
.
Page 45
Ladies room
Men’s room
.
Page 46
Hall area to lavatories & rear exit
Kitchen
.
Page 47
Kitchen
.
Page 48
Kitchen
Walk in cooler
.
Page 49
Office nook on the 2nd level
Kitchen on the 2nd level
.
Page 50
Fireplaces on the 2nd floor
.
Page 51
Sleeping area on 2nd floor
Bath on the 2nd level
.
Page 52
Walk in closet
Spiral stairs up to the 3rd level roof deck
.
Page 53
Enclosed area on the 3rd level (the port can be seen through the back window)
View from the roof deck
.
Page 54
Views from the roof deck
.
Page 55
Views from the roof deck
.
Page 56
FLOOR PLAN SKETCHES
1st Floor
2nd Floor
.
Page 57
MARKET IDENTIFICATION
The web site www.realestatewords.com defines ―Real Estate Market‖ as “all of the
potential buyers and sellers for various real properties such as the housing market,
office market, condominium market, or land market who are all currently active and
seeking the same type of real property” and ―Market Area‖ as “a geographic region
from which one can expect the primary demand for a specific product or service
provided at a specific location”.
A real estate market is: the collective conditions that apply to the expectations and
actions of its participants and influence their interaction; less related to a perceived
geographic area than by the realm of information exchange; and, the adequacy of
alternative properties to allow a valid selection and comparison process. Real estate
purchases typically conclude after analysis of mutually exclusive (the selection of any
that automatically eliminates all others) alternative properties with similar desirability.
The inherent opportunity cost (forfeiture of any benefit from the unselected alternative
option) is also a primary driver of the characteristics, content and geography of a
particular real estate market.
Real estate markets are generally grouped as neighborhoods; defined in the Dictionary
of Real Estate Appraisal, 3rd Edition, Appraisal Institute, 1993 as: “a group of
complementary land uses; a congruous grouping of inhabitants, buildings, or business
enterprises”. By this definition, the neighborhood (market area) must include these
elements and cover an adequate geographic area to include reasonable alternative
properties (sufficient to allow a valid comparison and analysis process).
The real estate market area geography generally relates to the type and quantity of the
appraised property. The geographic area (with reasonable alternatives) to analyze a
basic property is likely smaller than that of a specific, custom, or specialized property.
The relevant neighborhood could range from a few block area; or, conversely, to a
regional or national scale extending beyond jurisdictional boundaries.
The economy of any area includes its traditional internal trade (normal exchange of
goods and services that occur in any community) and the commerce that originates from
outside its boundaries. This externally stimulated trade is the economic base, defined
in the Dictionary of Real Estate Appraisal, 3rd Edition, Appraisal Institute, 1993 as: “the
economic activity of a community to attract income from outside its borders”.
The attraction to an area largely depends upon the quantity, quality, and durability of its
internal core economy and economic base; its natural attributes; and the overall quality
of life it offers; market and economic factors that influence any property.
.
Page 58
REGIONAL PROFILE
The United States Census Bureau and the Office of Management and Budget categorize
areas of the country measured by economic and demographic data, independent of
political jurisdictions, into micropolitan (μSA) and metropolitan (MSA) statistical areas.
The Census Bureau defines a Metropolitan Statistical Area (MSA) as “one or more
adjacent counties or county equivalents that have at least one urban core area of at
least 50,000 population, plus adjacent territory that has a high degree of social and
economic integration with the core as measured by commuting ties”. United States
Micropolitan Statistical Areas (μSA), as defined by the Census Bureau and the Office of
Management and Budget, are “urban areas in the United States based around a core
city or town with a population of 10,000 to 49,999”.
The regional market area applicable to the subject includes the Brunswick, GA MSA
(Glynn, McIntosh, and Brantley counties); the Hinesville/Fort Stewart MSA (Liberty
and Long counties); and the Savannah, GA MSA (Chatham, Effingham, and Bryan
counties). Collectively, these areas encompass eight counties with significant economic
diversity. Savannah and Brunswick are coastal port cities situated at, or near major
interstate crossroads. Savannah and Hinesville/Ft Stewart have major military
installations. The Federal Law Enforcement Center (FLETC) a major US government
training facility for federal agents is located just northeast of Brunswick and is a major
employer in the area.
Interstate 95, the primary north-south traffic artery located along the eastern United
States coastline runs from Miami, FL (through the market area) to the Canadian border.
Interstate 95 intersects with Interstate 10 (that extends from Jacksonville, FL across the
United States to the Pacific Ocean) about 55 miles south of Brunswick. Interstate 16
intersects with I-95 in Savannah, GA and runs to Macon, GA where it merges with
Interstate 75 (which extends from Fort Lauderdale, FL to Canada and traverses the
middle part of the United States).
This road network not only enhances the local economy and provides excellent vehicular
access to the area from most of the United States east of the Mississippi River, but also
numerous evacuation possibilities, significantly important to coastal areas susceptible to
hurricanes. Coastal areas in Georgia and South Carolina with potential evacuation
routes to the west, north, and south, are becoming more desirable due to this safety
factor than some parts of Florida where the only practical evacuation routes initially run
north.
.
Page 59
REGIONAL PROFILE, continued
Commercial direct flights available in Savannah, Brunswick and Jacksonville are:
Savannah (SAV)
Carrier:
American Eagle:
Continental Express:
Delta:
United Airlines
US Airways
Brunswick (BQK)
Jacksonville (JAX)
Atlantic Southeast Airlines
Carrier:
Airtran Airlines:
American Airlines
American Eagle Airlines
Continental Express:
Delta
Jet Blue
Southwest
United Airlines
US Airways
Destination:
Dallas, TX
Miami, FL
Houston, TX
Newark, NJ
Atlanta
Detroit
NY-LaGuardia
Newark
Chicago-O’Hare
Washington-Dulles
Charlotte
Philadelphia
Washington-Reagan
Atlanta
Destination:
Atlanta
Baltimore
Dallas-Fort Worth
Chicago
Miami
Houston, TX
Newark, NJ
Atlanta
Cincinnati
Detroit
Memphis
Minneapolis-St Paul
NY-LaGuardia
Newark
New York JFK
Boston
Baltimore
Birmingham
Houston Hobby
Fort Lauderdale
Las Vegas
Nashville
Norfolk
Philadelphia
Tampa Bay
Charlotte
Chicago-O’Hare
Washington-Dulles
Charlotte
Philadelphia
Washington-Reagan
Flights:
2
1
2
3
11
3
1
1
4
4
7
1
None
3 (Daily & Sunday)
Flights:
4
2
9
5
5
5
4
12
3
4
3
4
6
1
1
1
3
1
1
5
1
2
2
1
3
7
3
7
5
2
2
Weekend:
2
1
2
3
11
3
1
None on Saturday
4
4
7
1
2
2 (Sunday)
Weekend:
4
3
7 (Saturday) & 6 (Sunday)
4 (Sunday)
5
2
3
12
3
2
3
4
4
None on Saturday
1
1
3
1
1
3
1
2
1
1
3
5 (Saturday) 4 (Sunday)
3
5 (Sunday)
5
2
2
.
Page 60
Savannah and Brunswick are coastal port cities situated at, or near major interstate
crossroads. The Georgia Ports Authority operates the Savannah and Brunswick ports
and employs about 275,968 persons (in Georgia Port Authority and private terminals
combined) that comprise about 7% of the GA labor force.
Savannah has the larger port, situated at the northern part of the market area, but which
could potentially be an employment source for residents living in Darien and McIntosh
County. Brunswick (which is located about 10 statute miles south of the subject
property and has an immediate impact on its economics) has the sixth largest auto
import facility in the nation and predominately serves auto transport, heavy machinery
and agricultural product markets. The auto and heavy machinery facility at Brunswick,
Colonel’s Island Terminal has 346 paved parking acres, with 1,700 acres available for
expansion. Typically, 250,000 vehicles or more are processed through the facility
annually. Colonel’s Island is also a hub for agri-products with flat and vertical storage
combined capacity of 73,800 tons and handles over 460,000 tons of bumper crop
products and over 1.5 million tons of bulk shipments annually. Approximately 240,000
tons are processed annually at the Mayor’s Point Terminal through its 355,000 square
foot warehouse facility.
The Brunswick Harbor Deepening Project increased the channel depth from 32 feet (9.8
m) to 38 feet (11.6 m) and the inner channels from 30 feet (9.1 m) to 36 feet (11 m) deep.
Other improvements were construction of a new turning basin in the Upper East River,
widening of certain channels/reaches. The Sidney Lanier Bridge improvements and the
harbor deepening are enhancements for additional growth and economic development.
Savannah and Hinesville/Ft Stewart have major military bases and the Federal Law
Enforcement Training Center (FLETC) is a major training facility for federal agents
located in Brunswick. The military and government make significant economic impact
and attract retired military personnel to the area (to be near military medical care and
benefits). Fort Stewart is located in Liberty, Long, Tattnall, Evans, and Bryan Counties,
covers almost 280,000 acres, and is the largest armor-training base east of the
Mississippi River. Hunter Army Airfield in Savannah has the Army’s longest runway on
the east coast (11,375 feet). According to the Liberty County Chamber of Commerce web
page, about 20,786 soldiers and their families live on the post and about 42,760 retired
military personnel and dependents live within 50 miles of the base.
.
Page 61
The Federal Law Enforcement Training Center (FLETC), the primary training facility for
all federal officers (other than the FBI) has been located at Glynco in Brunswick for over
30 years. Trainees usually reside in the area from 9 to 11 weeks. FLETC contributes
over $425 Million annually to the area economy per FLETC and Georgia Tech economic
studies. The Glynco base, one of four FLETC instillations nationally, graduates some
24,000 students annually. FLETC is the largest employer in the area and directly
employs about 1,000 workers (including instructors and administrators) and creates
about 700 additional jobs for its partner operations (about 1,700 total jobs).
Local business and government leaders, Mr. Woody Woodside, Brunswick-Golden Isles
president and U.S. Representative Jack Kingston, R-1, among others, maintain contact
and work diligently with base officials to meet the needs of the base and its students on
behalf of the community. Per FLETC, its function is to provide training for students:
Basic
Criminal investigator training for special agents from more than 50 agencies;
Uniformed police training for uniformed officers;
Land Management police training for land management agencies;
Advanced
Cyber terrorism training, like internet investigations, financial and international banking and money laundering;
Infrastructure protection, land transportation anti-terrorism, weapons of mass destruction, seaport security;
Anti-terrorism awareness for state and local agencies; and,
More than 150 other FLETC and agency-specific basic and advanced programs.
Coastal Georgia Community College, formerly a two-year community college and
technical school, began operating as a full 4-year college in 2009 with 3,080 enrolled
students. Previously, the 2-year college contributed about 732 local jobs, 201 of which
are on campus and about $54.4 Million dollars to the local economy, per a 2005 study
by the University Of Georgia Selig Center for Economic Growth. present enrollment,
staff, satellite jobs, and economic influence will increase significantly with the 4-year
college programs.
Long-term impacts for Brunswick are expected to be similar to those experienced in
Macon, GA when Macon Junior College became Macon State College in 1997. Macon
Junior College opened in 1968 with 3,559 students and has grown to its Fall 2009
enrollment (6,615 students). Currently, it offers 18 Bachelor of Science or Bachelor of
Arts programs with 30 different majors. A 4-year college can be an incentive for
companies looking at an area; as a well-trained work force and the ability to provide
specific industry-based training is a major priority of companies that relocate or expand.
The ascension from the former community college and technical school program to a
full college status is expected to enhance the regional and area economy.
.
Page 62
The employment profile of an area reflects its potential to maintain jobs over economic
fluctuations as non-market driven employment is typically more ―recession proof‖.
University of Georgia report shows employment trends in the eight-county region.
2009 Employment Distribution
U.S. Bureau of Labor Statistics' Census of Employment and Wages
Table 1: Employment Changes for 2006-2009.
Sector
Employment, 2005
Employment, 2006
Change
% Change 2005 - 2006
44,827
36,635
29,874
24,363
18,887
12,763
13,075
8,483
7,020
2,542
610
199,079
43,796
38,123
29,628
20,386
17,724
14,885
9,514
7,521
7,159
2,328
482
191,546
-1,031
1,488
-246
-3,977
-1,163
2,122
-3,561
-962
139
-214
-128
-7,533
-0.023
0.041
-0.008
-0.163
-0.062
0.166
-0.272
-0.113
0.020
-0.084
-0.210
Trade, Transportation, and Utilities
Education and Health Services
Leisure and Hospitality
Professional and Business Services
Manufacturing
Public Administration
Construction
Financial Activities
Other Services
Information
Natural Resources and Mining
U.S. Bureau of Labor Statistics' Census of Employment and Wages
.
Page 63
This data shows decreases in the categories total overall, like the county, overall;
however, the Education and Health Services, Public Administration, and Other Service
sectors showed job increases (reflecting the strong presence of education and
government employment in the region). The total 2009 employment was 191,324 in all
industries including some jobs that the Bureau of Labor Statistics could not classify into
the sectors listed a.
In addition, the University of Georgia report identifies some of the potential reasons for
the employment delineation and changes. Shift-share analysis is an economics
technique that dissects an employment change into its three source causes.
Table 2: Shift-Share Analysis for 2006-2009.
Factor
Manufacturing
Construction
Professional and Business Services
Education and Health Services
Other Services
Public Administration
Leisure and Hospitality
Information
Natural Resources and Mining
National
Growth
Component,
Percent
-3.9
-3.9
-3.9
-3.9
-3.9
-3.9
-3.9
-3.9
-3.9
-3.9
National
Industrial Mix
Growth
Component,
Component,
Percent
Jobs
-734
-12.4
-496
7.3
-1,742
-1.2
-273
4.0
-99
-3.3
-24
4.2
-1,161
3.9
-330
-3.1
-1,424
10.0
-508
-17.4
Industrial Mix
Component,
Jobs
-2,337
932
-536
282
-85
26
1,172
-261
3,657
-2,270
Competitive
Share
Component,
Percent
10.1
13.2
2.8
1.9
-1.2
-21.3
-0.9
-4.4
-2.0
-6.0
Competitive
Share
Component,
Jobs
1,908
1,686
1,247
130
-31
-130
-257
-371
-745
-783
Source causes of change:
1.
The National Growth Component:
The national growth component (growth or contraction in the United States economy) is
the first source of change and is most apparent when economic fluctuations are greater.
From 2006 to 2009, the nation's employment changed by -3.9 percent (i.e, America's
employment in 2006 and 2009 was 133.8 million and 128.6 million, respectively. The
growth rate is therefore (128.6 - 133.8) / 133.8) * 100 = -3.9 percent.)
As shown in the table above, Trade, Transportation, and Utilities had the highest
national growth component. The -3.9 percent national growth component led to this
sector's employment growing by -1,742 jobs (i.e., -3.9 percent times the sector's base
employment, 44,827, equals -1,742 jobs). Overall, the national growth component was
responsible for -7,738 jobs in this eight county area.
.
Page 64
Economies with more employment in government, military and education will
experience less fluctuation as those sectors are not directly related to the business cycle
and are more ―Recession Proof‖. In addition, economic sectors that are experiencing
more growth will provide larger employment gains to a local economy.
2.
The Industrial Mix Component
The Industrial Mix Component provides insight into the growing sectors and results
from calculating the percent growth rate for an economic sector at the national level
then subtracting the national growth component. The industrial mix component
measures the change (growth or reduction) in an industry, net of effects from the
business cycle. Table 2 (on the previous page) lists these components for each sector.
The highest industrial mix component was 10% in the Education and Health Services
sector, and it was responsible for 3,657 jobs (10% times this sector's base employment,
36,635, equals 3,657 jobs).
Employment growth in an area corresponds with the industrial mix components of its
most significant sectors. (If employment is concentrated in sectors with higher
industrial mix components, reciprocal employment growth often occurs). The total
industrial mix component of all eleven sectors appears to have increased the area
employment by 174 jobs. Consequently, the area has a concentration of employment in
industries that are increasing nation-wide, in terms of employment. The Education and
Health Services growth created the majority of these jobs.
Shift-share analysis does not explain why an economic sector has slower or faster
growth. Rather, knowledge about the business conditions facing particular industries is
the basis of its understanding. For example, in rural Georgia counties apparel firms once
dominated the manufacturing sector. The availability of low-priced imported clothing
in the 1990's caused some apparel firms to go out of business. Many counties therefore
have a negative industrial mix component for manufacturing.
3.
The Competitive Share
The competitive share is the remaining employment change after accounting for the
national and industrial mix components. If a sector's competitive share is positive, then
the sector has a local advantage in promoting employment growth.
.
Page 65
For example, the Trade, Transportation, and Utilities sector employment grew by -2.3
percent (from Table 1). Of this -2.3 percent, -3.9 percent was due to the national growth
component and -1.2 percent was due to the industrial mix (from Table 2). The
remainder of -2.8 percent is attributable to the local conditions of this sector. The
Trade, Transportation, and Utilities sector competive share translates into 1,247 jobs
(i.e., 2.8% times the base employment level of 44,827 equals 1,247 jobs).
The top three competitive share sectors were Manufacturing, Public Administration,
and Trade, Transportation, and Utilities. The competitive share component totals 30
jobs indicating the area to be competitive in securing additional employment. A positive
competitive share component indicates a productive advantage for an area, which could
be due to local firms having superior technology, management, or market access, or the
local labor force having higher productivity and/or lower wages. A negative competitive
share component could result from local shortcomings in these areas.
Examination of the competitive share components for each industry can identify the
local industries with a positive competitive share component and those with competitive
advantages over other counties and regions.
This data identifies areas where
specialized training programs for workers and management, improved access to input
and product markets through transportation and telecommunications, and/or financial
alternatives for new machinery and equipment acquisitions need improvement.
The data generally illustrates the significant employment for the regional area created
by government, the military, the GA port, and education; components that are not
directly related to the business cycle and are somewhat insulated from its fluctuations.
The following series of grids present some of the pertinent demographic data for this
region. (From the www.georgiastats.uga.edu web page)
Geography
County
Brantley
Bryan
Chatham
Effingham
Glynn
Liberty
Long
McIntosh
Total Square Mile area
447.4
454.5
632.3
482.8
585.2
602.5
403.5
574.5
Square miles of land area
444.4
441.7
438.1
479.4
422.4
519.1
400.9
433.4
Square miles of water area
3
12.8
194.2
3.4
162.8
83.5
2.6
141.1
Area in acres (000)
284.4
282.7
280.4
306.8
270.3
332.2
256.6
277.4
.
Page 66
Population
County
Brantley
Bryan
Chatham
Effingham
Glynn
Liberty
Long
McIntosh
Building Permits
County
Brantley
Bryan
Chatham
Effingham
Glynn
Liberty
Long
McIntosh
Employment
County
Brantley
Bryan
Chatham
Effingham
Glynn
Liberty
Long
McIntosh
Care Facilities
County
Brantley
Bryan
Chatham
Effingham
Glynn
Liberty
Long
McIntosh
Deposits
($000)
County
Brantley
Bryan
Chatham
Effingham
Glynn
Liberty
Long
McIntosh
2008
Median Age
36.8
32.5
34.8
33.3
37.7
28.6
30.1
38.4
Median Age Males
35.8
31.0
32.8
32.5
35.6
24.8
30.4
37.3
Median Age Females
37.6
33.9
36.5
34.0
39.6
30.3
29.9
39.5
Total, % Over Age 18
76.52
71.50
74.50
72.80
74.90
65.20
69.70
74.90
Structures 2008
10
243
1,162
204
395
222
148
97
Structures 2007
1
355
1,992
534
683
222
189
148
Structures 2006
3
568
3,340
951
982
271
0
241
Structures 2005
1
604
1,969
955
986
336
.
213
June 2010
Unemployment Rate %
12.3
8.1
9.0
8.2
9.1
9.4
6.7
11.1
2008
Civilian Work Force
7,771
16,679
134,359
25,595
41,363
25,480
6,223
5,501
2008
Unemployed Persons
489
821
7,529
1,370
2,076
1,545
283
321
2008
Employed Persons
7,222
15,858
126,830
27,225
39,287
23,935
5,940
5,180
Licensed Child Day Care
centers, 2009
7
11
92
16
37
14
2
1
Licensed Family Day Care
centers, 2009
0
10
284
16
27
72
7
10
Total in Financial
Institutions
2008
$
91,695
$ 324,819
$ 4,805,589
$ 407,475
$ 1,945,197
$ 484,709
$
32,590
$
95,053
Total in Financial
Institutions
2007
$
95,316
$ 299,327
$ 4,736,217
$ 390,134
$ 1,912,914
$ 469,686
$
16,281
$
99,288
General Hospitals, Hospital Bed capacity,
2007
2007
0
.
0
.
3
1,137
1
25
1
300
1
32
0
.
0
Total in Financial
Institutions
2006
$
75,075
$ 273,048
$ 4,553,174
$ 339,259
$ 1,824,041
$ 411,717
$
15,890
$
94,118
Total in Financial
Institutions,
2005
$
63,033
$ 237,323
$ 4,228,551
$ 293,156
$ 1,517,642
$ 368,138
$
13,278
$
97,607
.
Page 67
Population growth
07/2000 to 07/2010
Brunswick, GA MSA
Change/period
Percentage/period
4/1/2000
7/1/2010
7/1/2009
7/1/2008
7/1/2007
7/1/2006
7/1/2005
104,087
246
0.24%
103,841
991
0.96%
102,850
1,351
1.33%
101,499
1,680
1.68%
99,819
2,266
2.32%
97,553
-916
-0.93%
76,820
936
1.23%
75,884
1,218
1.63%
74,666
1,375
1.88%
73,291
1,923
2.69%
71,368
321
0.45%
15,643
132
0.85%
15,511
94
0.61%
15,417
14
0.09%
15,403
127
0.83%
15,276
-1,051
-6.44%
11,378
-77
-0.67%
11,455
39
0.34%
11,416
291
2.62%
11,125
216
1.98%
10,909
-186
-1.68%
74,420
4,477
6.40%
69,943
-1,783
-2.49%
71,726
264
0.37%
71,462
-2,360
-3.20%
73,822
2,410
3.37%
62,186
3,695
6.32%
58,491
-1,939
-3.21%
60,430
110
0.18%
60,320
-2,616
-4.16%
62,936
2,443
4.04%
12,234
782
6.83%
11,452
156
1.38%
11,296
154
1.38%
11,142
256
2.35%
10,886
-33
-0.30%
343,092
8,739
2.61%
334,353
5,046
1.53%
329,307
8,122
2.53%
321,185
7,007
2.23%
314,178
3,851
1.24%
32,559
1,386
4.45%
31,173
1,182
3.94%
29,991
1,286
4.48%
28,705
903
3.25%
27,802
329
1.20%
256,992
5,872
2.34%
251,120
2,588
1.04%
248,532
4,685
1.92%
243,847
3,986
1.66%
239,861
1,522
0.64%
53,541
1,481
2.84%
52,060
1,276
2.51%
50,784
2,151
4.42%
48,633
2,118
4.55%
46,515
2,000
4.49%
521,353
507,146
502,532
492,466
485,553
93,044
Glynn County, GA
76,876
Change/period
Percentage/period Bottom of Form
56
0.07%
Brantley County, GA
15,568
Change/period
-75
-0.48%
McIntosh County, GA
11,643
Change/period
265
2.33%
Hinesville Ft Stewart, GA MSA
Change/period
71,674
Percentage/period
-2,746
-3.69%
Liberty County, GA
60,142
Change/period
60,142
Percentage/period
-2,044
Bottom of Form
-3.29%
Long County, GA
11,532
Change/period
11,532
Percentage/period
-702
Bottom of Form
-5.74%
Savannah, GA MSA
Change/period
338,310
Percentage/period
-4,782
-1.39%
Bryan County, GA
31, 716
Change/period
31,716
Percentage/period
-843
Bottom of Form
-2.59%
Chatham County, GA
252,938
Change/period
252,938
Percentage/period
-4,054
Bottom of Form
-1.58%
Effingham County, GA
53,656
Change/period
53,656
Percentage/period
115
Bottom of Form
0.21%
Total Population
Estimate base
514,071
67,568
14,629
10,847
72,095
61,987
10,108
293,299
23,417
232,347
37,535
.
Page 68
The population data is consistent with US Census reports on national migration with the
south being the primary migration destination with the South Atlantic (FL, GA, SC, NC)
being most popular. According to the census report, migration has become more
significant in recent years with the decline in birth rates. Therefore, this in-migration
trend suggests population growth for the regional area.
The economic data suggests the overall economics of the subject regional area have
better withstood the recession and are more favorable than in many other areas. With
economics not directly influenced by market changes (like the US military in Savannah
and Hinesville; the Federal Law Enforcement Training Center in Brunswick; the Georgia
Ports; and commerce from Interstate 95 that traverses the area) the subject regional
economy could also rebound sooner than many other areas. Therefore, given these
influences in the subject regional area, its economic prospects going forward appear
more encouraging than for the country as a whole.
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MARKET AREA PROFILE
Glynn County, the City of Brunswick, and St. Simons Island are the more specific and
local market areas for the subject property. The respective demographics for these
respective areas coincide and interact, but are also distinct individually. The Glynn
County demographic reflects the broader influence of its government, services, and
basic infrastructure that benefit not only the county as a whole, but also its different
communities. The next discussion follows the tone of the preceding data and brings
more focus to the influences that might apply to the relevant subject market.
Glynn County, is located on the Georgia coast, and includes the barrier islands, (Sea
Island, St. Simons Island, and Jekyll Island) and the mainland from the Little Satilla
River to the south, the Altamaha River to the north, and the Brantley and Wayne county
line on the west. On February 5, 1777, Glynn County became the state's seventh county.
John Glynn, an English lawyer and Parliament member who was friendly to the colonies
was its namesake.
Before its colonization, the inhabitants of the area that became Glynn County were
native tribes that the English settlers called "Creeks." The term was short for "Indians
living on Ochese Creek" near Macon, but traders began applying it to every native
resident of the Deep South. When General James Oglethorpe led the colonization of
Georgia in 1733, Creek-English relations and trade was established.
General Oglethorpe, regarded as one of Britain's most active humanitarians for his
efforts to correct prison abuses, received the charter to create the Georgia colony by
King George II in 1732. Oglethorpe and several colleagues fought the British policy of
jailing citizens for indebtedness and believed that the "worthy poor" could become
productive farmers, merchants, and artisans. They sought to establish the new world
colony with strict rules preventing slavery and large land ownerships and were intent
upon preventing class divisions like those common in English society, and where all the
settlers would work their own land. In November 1732, a party of 114 men, women, and
children set sail for Georgia from the River Thames. The party included skilled workers
like carpenters, tailors, bakers, farmers and merchants.
Georgia's charter prohibited General Oglethorpe from holding office, owning land, or
receiving a salary in the new colony, but he chose to accompany the first boatload of
Georgia settlers. Oglethorpe and the settlers arrived at the new world and settled on the
Yamacraw Bluff overlooking the south bank of the Savannah River, about seventeen
miles inland. Oglethorpe ultimately planned and built the city that became Savannah,
and for which he is most noted.
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MARKET AREA PROFILE, continued
The motto,— Non sibi sed aliis (Not for self, but for others)—adopted by the Georgia
Trustees, and led by Oglethorpe, was put into practice and Jews, Lutheran Salzburgers,
and other persecuted religious minorities were welcome in colonial Georgia. Oglethorpe
was staunch in his opposition to slavery in Georgia and he had an enlightened policy in
dealings with the natives, always respecting their customs, language, and needs. Land
cessions were always agreed by treaty according to proper custom. Oglethorpe was also
known to actively protect the Indians from unscrupulous white traders.
Oglethorpe came to Georgia with no formal title other than Trustee. Oglethorpe was the
defacto leader of the colony, subject to instructions and rules promulgated by the
Trustees back in London. Although he could not formally hold office, in function he was
the first Georgia's governor.
In 1737, Oglethorpe convinced King George II to appoint him as a colonel in the army
and give him a regiment of British soldiers to take back to Georgia. Oglethorpe was
actually a civilian with only limited military experience (primarily as an aide to Prince
Eugene). However, was given rank in the regular army, a regiment, and the title of
"General and Commander in Chief of all and singular his Majesty's provinces of
Carolina and Georgia." Although he held the rank of Colonel, he was given the field
commission as general in order to command all allied forces (Carolina Rangers, Indian
allies, etc.) in the hostilities with Spain.
The Spanish invaded Georgia in 1742, landing thousands of Spanish troops on the south
end of St. Simons Island. Oglethorpe rallied his forces for battle at Fort Frederica,
located on the north part of St. Simons. Then, in a critical skirmish known as the Battle
of Gully Hole Creek, Oglethorpe’s forces turned back a Spanish advance force. The
English pursued the retreating Spaniards but Oglethorpe halted his troops at the edge of
a marsh to await the counterattack by the main Spanish army. The Spanish attacked but
were turned back after a brief but fierce fight that became known as the Battle of Bloody
Marsh. The Spanish retreated to Florida (which has a strong Spanish heritage) to never
again attach English new world interests. The consensus is that this significant English
victory was the major event that preserved the colonies and their English heritage and is
particularly important to the Glynn County and St. Simons Island history.
Oglethorpe became a national hero in England for this success and received formal
promotion to the rank of brigadier general in the British army by King George II.
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Mark Carr, an English planter who lived in the area that became Brunswick, had arrived
in the colony as a Captain with General James Oglethorpe's regiment in 1738. After
serving in the army, he set up a tobacco plantation that in 1771, but which he traded for
the land that he designed (based on the Savannah plan) as the town that became
Brunswick. After the American Revolution, the new President George Washington
proclaimed Brunswick as one of the five original colonial ports of entry in 1789.
Brunswick was named after the duchy of Brunswick (Germany), the ancestral home of
King George III and the British House of Hanover. Streets and squares were given
names honoring the king, such as George Street and Hanover Square, while others
honored such notable Englishmen as the earl of Egmont, the duke of Gloucester, the
duke of Newcastle, and Lord Mansfield. These names survived the American Revolution,
in spite of their English connections. In 1797, Brunswick replaced Frederica, the first
settlement on St. Simons Island, as the Glynn County seat.
The eighteenth century Georgia's plantation economy was concentrated on rice
production, a crop that was suited for commercial cultivation in the coastal areas (and
was prominent in Glynn County). However, by the 1830s cotton plantations had spread
across most of the state with African and African American slave labor. Although slavery
played a dominant economic and political role in Georgia, most white Georgians did not
own slaves. The end of the War Between the States brought about the end of slavery, the
Reconstruction, and ultimately set the path for the modern area.
The Hofwyl-Broadfield Plantation is located at the Glynn-McIntosh County line. It is a
local landmark and is among the last remaining vestiges of the nineteenth-century rice
plantations. The plantation dates to 1806, and produced rice until its conversion into a
dairy, which closed in the early 1940s. Currently, the Georgia Department of Natural
Resources manages the 1,268 acres of land and 696 acres of freshwater marshes. The
In the 1850’s the Hofwyl House, named for a school in Switzerland was built.
During the late nineteenth and early twentieth century, the Port of Brunswick became a
major export site for cotton, naval stores, lumber, timber, and various other wood
products. Brunswick was a major shipbuilding site during the First World War.
Construction of a mustard gas plant (located just south of present day Interstate 95,
Highway 341 Exit A & B) was underway when the use of such weapons was banned by
treaty. The plant was never finished; however, its ruins are still standing on the site,
which is wooded and overgrown.
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The Great Depression in the 1930s and the decline of cotton and naval stores production
in Georgia severely limited port operations; however, World War II revitalized
shipbuilding at the port. The U.S. Maritime Commission designated Brunswick as one
of sixteen sites to build cargo ships for World War II (1941-45) and ninety-nine Liberty
ships were built in Brunswick by the end of the war. The base for the navy blimps that
patrolled the southern Atlantic coast for U-boats was at Glynco Naval Air Station; their
hangers were the largest wood structures in the world. (Glynco is currently the FLETC
training base). After the war, the port came under the auspices of the newly created
Georgia Ports Authority, and by 2000 became a major port facility.
Currently, forest products such as wood pulp, plywood, and paper constitute a large part
of the cargo shipped from the Port of Brunswick. Other exports include agricultural
products (oats, barley malt, and corn, for example) and other bulk cargoes, like gypsum,
limestone, perlite, salt, sand, and cement. Imported automobiles, including cars made
by Mercedes, Hyundai, Mitsubishi, and Volkswagen, and American automobile exports,
are also major parts of the total cargo.
Several major manufacturing and processing companies also contribute strongly to the
local economy. The Georgia-Pacific plant produces wood pulp, the Hercules plant
manufactures products extracted from pine stumps, and Rich-SeaPak and King and
Prince Seafood process fish and shellfish.
The Federal Law Enforcement Training Center, (FLETC) opened in 1975 and is located
at the former Glynco Naval Air Station, which closed in 1974. FLETC trains officers for
seventy federal, and various state, local, and international law-enforcement agencies.
The barrier islands, Sea Island, St. Simons Island, and Jekyll Island are significant to the
market area. Sea Island is an internationally known resort located north and east of St.
Simons Island. The Cloister, a Spanish-style hotel designed by Addison Mizner, dates
from 1928 and is the resort centerpiece. Sea Island is one of a series of barrier islands
and is about five miles long and 1½ mile wide at its widest point.
Sea Island, known as Fifth Creek Island by coastal natives, was largely uninhabited until
the 1920s. In 1768 James MacKay, a troop commander under General James
Oglethorpe, acquired it by land grant from King George III of England. Since the early
nineteenth century, the island, then known as Long Island, had various owners and was
mainly used for grazing livestock until 1921, when a group of local businessmen formed
a company to subdivide the island for vacation cottages. The completion of a causeway
between the mainland and St. Simons made Sea Island accessible to the public in 1924.
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Howard Coffin, founder of the Hudson Motor Company, bought Long Island that same
year, and briefly renamed it Glynn Isle before adopting the name Sea Island. Coffin
already acquired nearby Sapelo Island as a coastal retreat in 1912, and began buying
large tracts on St. Simons in 1926. As an automotive pioneer, Coffin envisioned the
transformation of once inaccessible Georgia islands into tourist destinations, due to the
advent of the automobile and the construction of new federal highways (like U.S.
Highway 17, the coastal highway located along the mainland coast in Brunswick).
His company, Sea Island Investments, continued development of the island and
commissioned Addison Mizner, noted for his work in Palm Beach and Boca Raton, FL to
design a small hotel that opened as the Cloister in October 1928. A beach club, fishing
dock, tennis courts, and shooting school were built near the hotel. North of the resort,
private homes were built along a three-mile drive down the center of the island. A golf
club, riding stables, and yacht club for the Cloister were built on St. Simons Island.
Over time, building additions increased the Cloister from 46 to 286 rooms, located in
the original hotel and in a variety of surrounding buildings. In 2003, the original
building was razed and construction began on a new structure that resembles the
original architectural style. The Spanish Lounge was dismantled and restored to its
original condition in the new building. The new structure opened in April 2006 with
seventy hotel rooms and thirty suites.
In 2004 Sea Island was the site of the G8 Summit, an annual meeting of the leaders of
the eight largest industrial nations. The leaders meet and discuss major economic and
political issues of global importance. Unemployment, relations with non-G8 nations,
public health concerns, global warming concerns, political discussions, human rights
issues, and nonproliferation of nuclear weapons are often topics on the agenda. These
summits are held at the top facilities in the world and Sea Island was no exception. For
example, there are more than 500 private Sea Island residences with a median value of
$1,111,500.00 with about 93% of the homes valued over $1,000,000.00.
Jekyll Island at 5,700 acres is the smallest Georgia barrier island and is located
southeast of Brunswick, south of St. Simons Island, and north of Cumberland Island.
The island is fronted by Jekyll Creek and salt marsh on its west, and its east edge is
defined by the Atlantic Ocean beach. Jekyll Island has a magnolia–live oak forest
canopy with a forest floor of palmetto and scrub oak. Indigenous animals include
raccoons, white-tailed deer, rabbits, and squirrels. The tidal creeks and streams of the
salt marsh provide seasonal fish and shellfish.
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The first Jekyll Island inhabitation is estimated to have been around 2,500 B.C. by small
groups of Native American hunter-gatherers. Archaeological evidence indicates them to
have produced fiber-tempered pottery vessels and to have lived by hunting and fishing.
The Georgia coastal natives had begun to collect in enclaves with less seasonal migration
and larger population numbers by 1000 B.C., however; the Jekyll settlements are
thought to have been more seasonal rather than long-term or permanent.
The first private land owner on Jekyll Island, William Horton, a major serving under
General Oglethorpe, was granted 500 acres by the Trustees of the colony in April 1736.
By 1737, Horton had established residency on Jekyll and began raising cattle. He died in
1748; the ruins of his tabby house are among the oldest structures in Georgia. Over the
years, there were various landowners until the Jekyll Island Club was developed
between 1879 and 1885 as a hunting preserve for wealthy northerners. Between 1888
and 1928, wealthy northern industrialists built Victorian "cottages" for use as winter
homes on Jekyll. (These homes have been restored and are open to the public).
Jekyll Island has been the scene of some important historical events involving its
wealthy part time residents. The first transcontinental telephone call was placed from
Jekyll Island by AT&T president Theodore Vail on January 25, 1915. Jekyll hosted
secret meetings that lead to the development of the Federal Reserve System in 1910.
The Jekyll Island Club flourished into the 1930s, but the Great Depression and World
War II created financial and labor problems that caused its closing. In 1947 the state of
Georgia under Governor Melvin Thompson, purchased the entire Island for $675,000
through condemnation. Since 1950, the Jekyll Island Authority has operated the island
as a park open to the public. In 1972, the National Register of Historic Places listed the
Jekyll Island Historic District, and in 1978, it was elevated to National Historic
Landmark status. In 2002, archaeologists began to excavate the Horton House site,
seeking evidence of other structures and artifacts. The state owns Jekyll Island but
leases real estate to private citizens on a long-term basis.
Current modern
redevelopment of the Island commercial and beach areas is underway.
St. Simons Island the largest (including wetlands) and most developed Georgia Barrier
Island is about twelve miles long and three miles wide at its widest stretch (about the
size of Manhattan Island in New York).
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Its earliest recorded human habitation dates to the Late Archaic Period, about 5,000 to
3,000 years ago. Shell ring remnants left by natives from this era survive on many of the
barrier islands, including St. Simons. The Guale Indians established a chiefdom
(typically a multiple town organization with a population in the low thousands, ruled by
a hereditary and often semi-divine chief) on St. Catherines Island and used St. Simons
as hunting and fishing grounds. By 1500, the Guale had established a permanent village
of about 200 people on St. Simons, which they called Guadalquini.
Beginning in 1568, the Spanish attempted to create missions along the Georgia coast
and in the 1600’s established San Buenaventura de Guadalquini, on the south part of the
island, and Santo Domingo de Asao (or Asajo), on its northern tip. San Simón, a Pagan
refugee village and the island's namesake, was located on the inland side of the island.
In 1684, these missions and villages were abandoned due to numerous pirate raids.
The Georgia coast was considered "debatable land" by England and Spain, in the early
1700’s. In 1736 James Edward Oglethorpe, founder of Savannah, and a Georgia Trustee
established Fort Frederica, named for the heir to the British throne, Frederick Louis,
prince of Wales, on the west side of St. Simons Island to protect Savannah and the
Carolinas from the Spanish. Then, in 1742, the British decisive victory over Spain in the
Battle of Bloody Marsh on St. Simons Island ended the Spanish threat to the Georgia
coast and all the English colonies.
By the start of the American Revolution (1775-83), Fort Frederica was obsolete, and St.
Simons was left largely uninhabited as most of its residents joined the patriot army.
Following the Revolution the island was transformed into fourteen cotton plantations
after acres of live oak trees were cleared for farmland and used for building American
warships, including the famous USS Constitution, or "Old Ironsides." Rice was the
predominant crop along the neighboring Altamaha River, St. Simons was known for its
production of long-staple cotton, which soon came to be known as Sea Island cotton.
Between the 1780’s and the War Between the States the St. Simons plantation culture
flourished. The Christ Church, Frederica was organized in 1807 by a group of island
planters and the second oldest Episcopal Church in the Diocese of Georgia was a
community center in the plantation era. The first Christ Church building, finished on
the present site in 1820, was ruined by Union troops during the War Between the States
but was rebuilt in 1884 by the Reverend Anson Dodge Jr. The cruciform building with a
trussed gothic roof and stained-glass windows remains active today as Christ Church.
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The war ruined the island economy, which did not rebound until around 1870 with the
reestablishment of the timber industry. Lumber mill operations at Gascoigne Bluff,
provided employment, as well as mail and passenger boats to the mainland. The water
traffic, along with a new lighthouse built in 1872, marked the beginning of the St.
Simons tourism industry. The lighthouse keeper created a small amusement park that
with the lighthouse light that traveled from the top of the lighthouse tower to the bottom
drew many visitors. The island became a summer retreat for families from the
mainland, particularly from Baxley, Brunswick, and Waycross.
The resort industry was thriving by the 1880s. Beachfront structures, including a new
pier and grand hotel, were built on the southeastern end of the island and were accessed
by ferry. Wealthy northerners began vacationing on the island and the Brunswick–St.
Simons Highway (now the Torras Causeway) opened in 1924 and marked the beginning
of the modern development era. More than 5,000 automobiles drove from Brunswick to
St. Simons via the causeway on its opening day, making the Island convenient for
residential and resort development. In 1926 Howard Coffin, the Sea Island founder,
also bought land on St. Simons, including the former Retreat Plantation, and
constructed a golf course, yacht club, paved roads, and a residential subdivision.
World War II brought more visitors and residents to St. Simons. Troops stationed at
Jacksonville, Savannah; and Camp Stewart took weekend leave on the island, and a new
naval air base and radar school were built, and also brought residents and staff. With a
major shipyard for the production of Liberty ships in Brunswick, the waters off St.
Simons became active with German U-boats and in April 1942, the Germans torpedoed
the Texas Company oil tanker S.S. Oklahoma and the S.S. Esso Baton Rouge off coast.
The military improved island infrastructure during the war and island development
boomed in the 1950s and 1960s. More permanent homes and subdivisions were built,
and the island evolved from a summer resort into a thriving permanent community.
The market area has rich history; is strategically located along the GA coast between two
larger economic areas. The area also has greater evacuation routes (important in coastal
areas due to hurricane threats) as the roads give excellent linkages to the west, north,
and south (compared to south and central Florida where evacuation routes initially
travel north). Recent hikes in property taxes and insurance in Florida have caused
many retirees and others migrating south to consider other areas in the southeast US.
These reasons, among others make the market area suited for growth; to have economic
conditions more favorable than many areas; and to have rational appeal to prospective
new residents from elsewhere in the region and other parts of the country.
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HIGHEST AND BEST USE
The definition of Highest and Best Use is "the reasonably probable and legal use of
vacant land or an improved property, which is physically possible, appropriately
supported, financially feasible, and that results in the highest value."
The Highest and Best Use of a property analyzes its use ―as vacant‖ regardless of
whether it is actually or hypothetically vacant. The Highest and Best Use is the potential
eligible use that meets the above criteria, rather than an actual use. An existing use
providing greater land value than a reasonable alternative would be the Highest and
Best Use. Conversely, any use modification or change (including gentrification; the
demolition of old structures, removal of the debris, and new improvement construction)
giving a higher land value than the cost would be the Highest and Best Use.
Often, when land values increase in an area; older structures (that might be obsolete or
are an underutilization of the site in the current marketplace) return less value to the
underlying than its value as a vacant parcel. Then; the Highest and Best Use of the land
would be for demolition and removal of the old existing improvements. Existing
improvements with economic value that contribute positively to the land could be its
outright Highest and Best Use; or, an interim Highest and Best Use if land-use changes
are reasonable based on development trends. The Highest and Best Use analysis
considers an appraised property ―as vacant‖ (the actual use of a vacant property and the
prospective use of an improved property). The Highest and Best Use ―as improved‖
analysis is also included in appraisals of improved properties and for vacant land with
specific proposed or prospective uses.
Highest and Best Use estimates consider:
- The use must be physically possible, considering the location, access, size, shape,
topography, and the characteristics of surrounding development;
- The use must be legal and not prohibited by law, deed restrictions, or zoning;
- The use must be financially feasible and provide an adequate return to justify
investment in the land; and
- The use must be maximally productive and return the greatest value to the land of all
eligible uses during the expected holding/ownership period.
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HIGHEST AND BEST USE, continued
Physically Possible:
The physical possibility of any potential land use is determined by basic site features like
the parcel size; shape, terrain, utility availability, access and location. The site size
eliminates or supports use alternatives; as smaller tracts may be inadequate for large
development concepts, whereas larger tracts often have greater use flexibility. Land
configurations like the site width and/or shape may also dictate possible uses.
Terrain and soil conditions can impact potential uses; poor soils, wetlands, or adverse
drainage might preclude some development uses due to higher site preparation costs
than justified by the likely development income. Large-scale development and some
land use concepts require greater utility services that overextend roads, infrastructure,
and services availabilities.
The subject is located in an established historic commercial district. The site has typical
access, terrain, and utilities needed for the current and reasonable alternative uses.
Therefore, the present and reasonable alternative uses are physically possible.
Legally Permissible:
Prospective land uses must comply with current (or reasonably alternative) zoning
and/or land use codes. The site is zoned General Commercial Core, a city of Brunswick
zoning code applicable to the high density commercial development in its downtown.
Many of the existing buildings like the subject cover their entire site and have no
dedicated on-site parking. Therefore, the only known practical land use is for
commercial and/or residential purposes, consistent with the current use (which is
apparently legal).
Economically Feasible and Maximally Productive:
Financial feasibility of any land use (whether existing or contemplated) examines the
economic impact on the appraised property. Financially feasible land uses must produce
sufficient returns to induce capital investment, either as an initial purchase or as an
improvement (construction, rezoning, subdivision, or some other development).
The value increase to the land for a feasible use must justify the cost including adequate
entrepreneurial returns to attract the investment capital and involvement of qualified
parties. Considering the prerequisite factors; the physical characteristics of the subject
site and its zoning; the commercial and/or residential use of this site appears to be
financially feasible.
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HIGHEST AND BEST USE, continued
The Maximally Productive Land Use would be that specified economically feasible use
that would reasonably generate the highest net return or value increase to the land.
Therefore a physically possible; legal; economically feasible; and the maximally
productive use, would be the Highest and Best Use of the land. Due to the zoning and
physical aspects the site and only be used as a commercial.
Highest and Best Use as Improved:
The Highest and Best Use of the improved property also considers these four factors.
The improved property is recently rebuilt and has greater value than the ―as vacant‖ site.
Furthermore, the subject building is one of the highest quality structures in the region
and area. Therefore, its estimated Highest and Best Use as improved is the current use.
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THE APPRAISAL PROCESS
In appraising real estate, an appraiser follows an orderly methodology to arrive at a final
value estimate; outlined as follows:
A.
B.
C.
D.
To define the appraisal problems
To analyze the appraisal scope and form an appraisal plan
To collect and analyze general and specific data
Consider the three recognized valuation approaches (cost, market, and income)
and their applicability to the appraisal purpose, function, and use
Determine the applicable valuation approaches and make the pertinent analyses
Reconcile value indications from the applicable valuation approaches
Report the estimated value (including the discounted present value if applicable)
E.
F.
G.
Data analysis pertinent to the three major appraisal valuation approaches; Cost; Direct
Sales Comparison; and Income Approaches are implied. These approaches and their
relationship to the subject property discussions follow:
The cost approach basis is the substitution principal where an informed and typically
motivated person will pay no more for a property than the cost to purchase a
comparable site and construct improvements of equal desirability and utility with undue
delay. The cost approach has five basic steps:
1.
2.
3.
Estimate land value as vacant by a market approach to value
Estimate reproduction or replacement improvement costs
Estimate the dollar amounts of accrued depreciation caused by
Physical deterioration
Functional deficiencies or super adequate improvements or features
Adverse external influences
Deduct estimated accrued depreciation from the estimated cost new to indicate
the depreciated improvement contribution value; and
Add the estimated ―as vacant‖ land value to the depreciated improvements value
to provide the cost approach value estimate
4.
5.
The cost approach is most valid if improvements are proposed or relatively new;
represent the highest and best land use; and when available adequate land sales provide
basis for reliable land value estimates. The need to estimate the various forms of
depreciation that affect improvements to land tend to weaken this approach; however,
with reasonable estimates from careful analysis; Cost Approach value estimates are
usually reliable for appraisal purposes.
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THE APPRAISAL PROCESS, continued
The direct sales comparison approach also utilizes the substitution principal
where a prudent person will pay no more to buy or rent a property than the cost to buy
or rent an equally desirable substitute.
The process considers these steps to derive a valid market value estimate from direct
sales comparison:
1.
Discover and verify pertinent data including the sales prices, current offerings,
rents, and expenses of comparable properties.
Investigate this data as to motivation and terms of sale.
Compare the attributes of each comparable property to those of the subject in
terms of time, location, physical factors, and terms of sale.
Weigh and consider all differences in light of their probable impact upon the
sales price relative to the definition of market value.
Develop an opinion of value of the appraised property as compared with the sales
prices of similar properties analyzed.
2.
3.
4.
5.
The direct sales comparison approach tends to yield a range of indicated values rather
than a more specific point indication. The imprecision of this range incorporates the
data imperfection and the varied and often unknown motivations of parties to the
transactions analyzed. The availability of ample and relevant data susceptible to
adjustments that are reasonable in magnitude and direction enhance the reliability of
value estimates derived in this manner. When data is scarce, or the adjustments to the
data are numerous and large, the resulting value indications are less reliable and may be
the product of conjecture than of well-defined observation and analysis.
The direct sales comparison approach underlies all the approaches to value that employ
market-derived data. Rents, expenses, and costs derived from comparable properties
result in a market-based derivation in all the value approaches. Various methods
provide market-indicated values. This approach produces a value indication by
comparing property alternatives for the subject property and estimating adjustments for
differences in their characteristics (relative to the appraised subject). The formula for
the sales comparison approach to value:
Sales Price of the comparable
+ Or – Adjustments =
Indicated Value by the Direct Sales Comparison Approach
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The direct sales comparison approach can also include an analysis based on the
relationship of gross annual income to the sales price for an income property. This
economic comparison considers the gross income and the gross sales price but does not
usually consider expenses; therefore, it is most reliable if applied only to very similar
properties with similar net income ratios and only for property types that directly reflect
rental income as to the market value. The relationship expression is as a gross income
multiplier derived as shown below:
Sales Price = Gross Income Multiplier x Effective Gross Annual Income
Properties should be similar and adequate data should be available for this multiplier
analysis utilization to derive a value indication in this manner.
The income approach basis is that a definable relationship between expected income of
a property and its market value exists. Market value as used in this report means the
present worth of anticipated property benefits. The expression of income to market
value is the capitalization rate in this approach. The steps followed in its application are
as follows:
1.
Estimate the potential gross income of a property (after repairing physical and
functional depreciation) based on full occupancy
Estimate and subtract vacancies, rent loss, and turnover allowances to arrive at
an estimate of effective gross income
Subtract fixed expenses and operating expenses (exclusive of income or special
taxes, depreciation and debt service) to arrive at net operating income
Subtract replacement reserve estimates for short-lived items
Capitalize the resulting net income at the indicated capitalization rate
2.
3.
4.
5.
Historical experience of the appraised property and historical experiences of alternative
properties in the marketplace may provide estimates of these variables. With reliable net
operating income estimates made, the market trends and the nature of the appraised
property appraised typically suggest a reasonable capitalization technique and an
appropriate estimated capitalization rate. This rate should reflect the expendable
experience of the subject property and the attitudes of buyers and sellers of the
appraised property type.
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Overall capitalization rates obtained directly from the market provide somewhat clear
relationships of net income to value. When these rates are properly developed and
applied, they are a direct method of applying market relationships to income. The
applicability of this method is limited to properties that exhibit:
1.
2.
3.
4.
Similar expense operating ratios;
Similar ratios of land and buildings to overall value;
Similar remaining economic lives; and
Similar uses.
This technique may offer a reliable market value estimate with these requirements met.
Real estate appraisals typically consider all three valuation approaches. However, as the
subject, property in this report is an historic single commercial building and a special
use type property, only the Direct Sales Comparison Approach is relevant.
.
Page 84
THE COST APPROACH
The Cost Approach description by The Appraisal Institute publication "Appraising
Residential Properties" is as follows:
"This approach is based on the reasoning that a purchaser will not normally pay more
for a property than it would cost to purchase comparable land and have
improvements of comparable utility constructed on that land without undue delay. To
apply the cost approach an appraiser estimates the cost of reproducing or replacing
the existing structure with a new building, deducts an appropriate amount for the loss
in value caused by accrued depreciation in the existing structure, and then adds the
depreciated value of the improvements to an estimate of the value of the land".
The Cost Approach is not relevant in vacant land appraisals that contemplate no
improvements, usually unreliable for older structures, and impractical for a single
condominium unit that represents a fraction of its total complex.
The subject is a historic building, constructed in 1890; therefore, the Cost Approach is
not applicable to this report.
.
Page 85
THE INCOME APPROACH
The Income Approach is the appraisal analysis procedure that converts anticipated
benefits (revenue or amenities), to be derived from the property ownership into a value
estimate. The Income Approach is widely applied in appraising income-producing
properties.
The Income Approach is particularly relevant to rental and investment properties that
are marketable to investment-oriented and passive investment purchasers. The subject
is a special use property due to its high quality restaurant and would more likely appeal
to a restaurant-oriented buyer than to a traditional generic property investor.
Therefore, the income approach has little relevance and is not warranted.
.
Page 86
THE DIRECT SALES COMPARISON APPROACH
The Direct Sales Comparison Approach definition in the Dictionary of Real Estate
Appraisal is the:
“Approach through which an appraiser derives a value indication by comparing the
property being appraised to similar properties that have been sold recently, applying
appropriate units of comparison and making adjustments, based on the elements of
comparison, to the sales price of the comparables”. Dictionary of Real Estate Appraisal, page 265
The Direct Sales Comparison Approach is a process of correlation and analysis of similar
recently sold properties. Its reliability depends upon:
(a)
(b)
(c)
(d)
The comparability of each alternative property to the appraised property
The time of sale
The verification of the sale; and,
The absence of unusual conditions affecting the sale
The direct sales comparison approach utilizes the substitution principal, where a
prudent purchaser will pay no more for any property than the cost of a substitute, if
available with equal quality. Since no two properties are identical, estimated variation
adjustments are typical for differences in the time of sale, conditions of the sale, and any
distinct physical differences between the subject and compared properties. The subject
property is the standard; it is never adjusted.
The intent of the adjustment process is to make the alternative properties and the
subject equitable; therefore, this approach utilizes an adjustment process that is applied
to the alternative properties. This process often presents an adjustment grid noting
differences between these alternative properties and the subject. The grid includes
minus numeric entries to an alternative property for its actual or perceived superior
features, amenities, or attributes, relative to the appraised subject. Conversely, grid
entries are a plus number for the compared properties for their perceived or actual
inferior characteristics, compared to the subject. Adjustments result either from
somewhat clear market extractions according to the market data quality and quantity; or
subjective observations made from the available market data.
The direct sales comparison approach usually provides the most direct and clear value
indications; however, its indications are more reliable when adequate similar sales data
are available, and likely to be suspect absent sufficient and relevant data.
.
Page 87
THE DIRECT SALES COMPARISON APPROACH, continued
The Direct Sales Comparison Approach deals with market activity (recent sales and
current listings) of similar properties. The subject of this report is a unique historic
commercial building with specific high quality and is in a specifically zoned historic
area. Collectively, the location and zoning and its specific high improvement quality,
elevates the subject and sets it apart from most other Brunswick commercial properties.
Most Brunswick historic area commercial buildings that could be potential alternatives
for other in-town properties are significantly inferior to the subject and have much less
market appeal, recognition, and historic significance. Furthermore, historic buildings
are a small part of the market inventory; and generally infrequently for sale; unlike
generic outlying commercial buildings (that arguably are less desirable and inapplicable
to the subject).
In 2006 and 2007, the previously active market began its decline, limiting all type
property sales. Consequently, thorough research of local listings and public records
yielded no sales of similar buildings that reasonably provide a reliable value estimate.
Savannah, GA and Charleston, SC have larger historic areas than historic downtown
Brunswick but are the most reasonable alternative market areas to provide market data
foe historic buildings. Like Brunswick, both Charleston and Savannah have a strong
English Colonial history; all are also seaport cities. Savannah and Charleston are near
premier resort areas and offer numerous recreation opportunities, like Brunswick. All
three cities have immediate Interstate access and desirable road linkages and all share
the same basic weather and climate.
The subject is a premier restaurant property, arguably among the highest in its
improvement quality and efficiency in the specific restaurant design and configuration
in the general area. This building reasonably has no peers among the other historic
downtown properties that with few exceptions are generally in fair to poor condition and
have significantly less quality.
The restaurant infrastructure and specific design reasonably identify the most likely
market for the subject building to be an operator of premium quality restaurants,
and/or restaurant-oriented purchaser. The readily available alternatives are inferior
Brunswick buildings currently ranging from shell structures to finished buildings that
require significant renovations; or, similar high quality readily available buildings it the
other historic commercial areas.
.
Page 88
Prospective buyers for this type building might consider whether justification of the
costs, significant known risk and exposure, and construction hassles and uncertainties
to renovate inferior Brunswick buildings to approximate the subject is prudent.
Construction of these buildings occurred over time, and in some cases, possibly with
inadequate engineering or foundations. (The former historic improvements at 1317-1331
Newcastle Street, on the corner of Newcastle and Monck Streets across the street from
the subject, collapsed into a mound of debris during an attempted building renovation).
Prospective buyers might also consider high quality readily available properties in the
other market areas, Savannah and Charleston. Both cities are larger and better known
than Brunswick and have significantly more properties of this type. However, their
larger market also includes stringent competition for both restaurant property as well as
the business of its occupant/tenant.
The subject property could be a reasonable compromise; it has the superior quality and
historic significance like the Charleston and Savannah alternatives but not their
significant competition. The Brunswick market is less intense, both in terms of
alternative properties as well as from a competitive business prospective (important to a
tenant or business operator). Such factors arguably join these respective markets, which
collectively represent the southern seaport historic commercial property market.
Therefore, this analysis considers its comparable alternative properties from closed
sales and current listings in these areas. After adjustment, the sales indicate market
acceptance, by the physical characteristics of the property sales and the prices paid. The
listings indicate present market expectations and essentially determine a price level
ceiling; and the listings, adjusted for their likely eventual below list price sales, also
support value indications from the sales. The properties profiled are:
County Number
2-0004 -42-003
2-0015 -33-005
460-08-03-251
457-04-02-009
458-09-01-084
457-04-02-025
458-09-01-122
458-09-03-129
457-04-04-157
457-04-02-033
460-11-01-003
457-08-04-007
Address
410 East Broughton St
313 Abercorn Street
85 1/2 Spring Street
336 King Street
122 Meeting Street
375 King Street
153 East Bay Street
21 Broad Street
39 George Street
349 King Street
139 President Street
129 Meeting Street
City
Price
Size
Price/sq foot Sale date Built circa
Savannah
$1,400,000 3,641
$384.51
Listing
1809
Savannah
$1,399,000 2,892
$483.75
Listing
1900
Charleston
$218,000 1,205
$180.91 12/30/09
1910
Charleston
$860,000 3,076
$279.58 03/31/10
1850
Charleston
$472,500
957
$493.73 03/06/08
1890
Charleston $1,250,000 3,320
$376.51 10/19/09
1860
Charleston $1,334,000 5,085
$262.34 03/25/08
1870
Charleston $1,335,000 4,284
$311.62 02/23/10
1802
Charleston $1,350,000 2,793
$483.35
Listing
1870
Charleston $1,400,000 3,186
$439.42
Listing
1920
Charleston $1,595,000 4,265
$373.97
Listing
1920
Charleston $1,200,000 1,900
$631.58
Listing
1940
.
Page 89
Specific "paired sales" (sales of the same property over time or two sales of very similar
properties at different times) can show time/value changes. Data pairings can also show
values of specific features when very similar properties, but have a significant difference
sell within a specific time. However, most often clearly defined data is not available and
adjustment estimates must result from subjective market observations.
The factors considered in the adjustment process that generally affect the sales prices
(and therefore market values) for the alternative properties are:
1.
Property Rights Conveyed:
The data indicates the sales to include the fee simple ownership property rights and no
property rights conveyance adjustments are necessary.
2.
Terms of Sale:
The data research indicates that the sales transacted by cash or cash equivalency to the
seller. Therefore, the sales needed no terms of sale adjustments.
3.
Conditions of the Sale:
The parties to these sales were unrelated and they included no apparent abnormal or
duress conditions. Consequently, the sales need no sales conditions adjustments.
4.
Sale Date:
Very recent sales and listings tend to reflect the applicable market and may require no
time adjustment; however, dated sales and sales in volatile markets may reflect outdated
or atypical market conditions and warrant sale date adjustments. The RealtyRates.com
Investor Survey indicates investor return requirements since 2007 of about 10%
annually giving basis for sale date adjustment estimates (as a discount rate to address
market changes since respective sale dates) at 9%; shown on the table below.
Improved
Sale Date Sales Price/square foot Months Passed Discount @ .10 8/25/2010 % total annual %
Property 3
Property 4
Property 5
Property 6
Property 7
Property 8
12/30/09
03/31/10
03/06/08
10/19/09
03/25/08
02/23/10
$180.91
$279.58
$493.73
$376.51
$262.34
$311.62
9
6
18
10
18
7
0.9280
0.9514
0.8612
0.9204
0.8612
0.9436
$167.89
$266.00
$425.22
$346.53
$225.94
$294.03
6.75%
4.50%
13.50%
7.50%
13.50%
5.25%
9.00%
9.00%
9.00%
9.00%
9.00%
9.00%
.
Page 90
5.
Location and Physical Differences:
Location and physical differences are the more tangible of the adjustment criteria. Such
factors include location, size, features, etc. The sales are similar and relevant to the
subject, but due to the inherent differences between these properties and subject, the
estimated adjustments are largely subjective.
These sales are considered on a per square foot basis. Previously noted; a property
larger than the subject will typically sell for less per square foot than one that is smaller.
The converse applies to a smaller property compared to a larger subject. The smaller
comparable sale will usually sell for more per square foot but at a lower amount.
Therefore, since the comparable properties are considered for their per square foot
indications in this appraisal, size adjustments for smaller sales are a minus and a plus
for a larger sale.
Essentially, the adjustment process attempts by (the addition and/or subtraction to the
sales or offered price of an alternative property for a quantified price/value difference
with the subject) to equate it with the subject. If an appraisal was a controlled scientific
experiment, the subject would be the constant and the alternative property would be a
variable. The adjustment process and scientific market data analysis could replicate the
subject and determine the exact value of a difference. Adjustments could become
precise corrections rather than estimated appraisal opinions.
However, real estate transactions involve human actions and motives (which can range
widely), tend to be fluid, and include myriad and often unclear factors. In real estate
appraisals, market data relationships to the subject are perceived; not systematically
scientifically derived. Therefore, the conclusions resulting from appraisal research and
data analysis tend to be the subjective estimated opinions when presented in the Direct
Sales Comparison Approach.
The process culminates with an indicated value range derived from the adjusted
comparable properties from which the specific market value estimated from this
approach results.
The following pages include profiles of the noted compared properties, maps,
photographs, and data adjustment grids.
.
Page 91
Comparable 1; 410 East Broughton Street, Savannah, GA
County Number:
Price:
Sale date:
Building size:
Price/square foot:
Location:
Land Area:
Zoning:
Year built:
Stories:
Present Use:
Condition:
Comment:
2-0004-42-003
$1,400,000.00
N/A Listing
3,641 Square feet
$384.51
Northeast quadrant of East Broughton Street and Habersham
Street in Historic Downtown Savannah
Approximately 5,400 square feet or 0.12 acre
RIP-A (residential-institutional-professional, medium density, historic)
1809
Three
Vacant; designed for retail uses on 1st floor; floors 2 and 3 are suited
for residential uses
Extensively renovated with new interior finishes
ADA compliant 1st floor; commercial wiring and sprinkler system;
six off-street parking spaces; fenced 2,500 square foot rear open
space; and approved architectural plans for a 3,300 square foot
building addition.
.
Page 92
Comparable 2; 313 Abercorn Street, Savannah, GA
County Number:
Price:
Sale date:
Building size:
Price/square foot:
Location:
Land Area:
Zoning:
Year built:
Stories:
Present Use:
Condition:
Comment:
2-0015-33-005
$1,399,000.00
N/A Listing
2,892 Square feet
$483.75
Abercorn Street across from St John the Baptist Church within
walking distance of River Street and Lafayette Square
About 1,100 square feet; .03 acre
RIP-A (residential-institutional-professional, medium density, historic)
1880
Three
Coffee shop and lounge on the 1st floor; 2nd and 3rd floors are
residential units
Extensively renovated with new interior finishes
Restored Victorian Home used for commercial purposes; the
location is near the downtown core.
.
Page 93
Comparable 3; 85 ½ Spring Street, Charleston, SC
County Number:
Price:
Sale date:
Building size:
Price/square foot:
Location:
Land Area:
Zoning:
Year built:
Stories:
Present Use:
Condition:
Comment:
460-08-03-251
$218,000.00
12/30/2009; deed reference 0100-044
1,205 Square feet
$180.91
Crosstown area; near the Medical University of South Carolina, the
Veterans Administration Hospital, Roper Hospital and the College
of Charleston
Zero lot line site; 1,742 square feet; 0.04 acre
LB-Limited Business
1910
One
Vacant; the building sold in shell condition; the buyer was a
religious group suggesting the intended use as a place of worship
Shell condition, no finishes
The listing representation was that the site had adequate area for
addition of a grease trap that would allow a restaurant use.
.
Page 94
Comparable 4; 336 King Street, Charleston, SC
County Number:
Price:
Sale date:
Building size:
Price/square foot:
Location:
Land Area:
Zoning:
Year built:
Stories:
Present Use:
Condition:
Comment:
457-04-02-009
$860,000.00
03/31/2010; deed reference 0114-771
3,076 Square feet
$279.58
King Street about 90’ northwest of George Street
Zero lot site; about 2,178 square feet, 0.05 acre
GB-General Business
1850
Three
The 1st floor is the Extra Mile shoe store, the upper levels are
residential units
Renovated
1,442 square feet retail; 3 BR unit 2nd floor
The location is along a highly traffic street near the College of
Charleston and downtown attractions
.
Page 95
Comparable 5; 122 Meeting Street, Charleston, SC
County Number:
Price:
Sale date:
Building size:
Price/square foot:
Location:
Land Area:
Zoning:
Year built:
Stories:
Present Use:
Condition:
Comment:
458-09-01-084
$472,500.00
03/06/2008; Deed reference, F653-623
957 Square feet
$493.73
Corner of Meeting and Queen Streets
Zero lot line site; about 1,310 square feet, 0.03 acre
GB-General Business
1890
Two
Attorney offices on both levels
Good
This sale is included due to its size, which is smaller and tends to
bracket the data relative to building sizes.
.
Page 96
County Number:
Price:
Sale date:
Building size:
Price/square foot:
Location:
Land Area:
Zoning:
Year built:
Stories:
Present Use:
Condition:
Comment:
2-0004-42-003
$1,250,000.00
10/19/2009; Deed reference, 0087-629
3,320 Square feet
$376.51
King Street, about 175’ from its corner with Calhoun Street
Zero lot line; about 3,920 square feet, 0.09 acre
GB-General Business
1860
Two
Retail uses on 1st floor; residential uses above
Good
Basic downtown storefront building
.
Page 97
Comparable 7; 153 East Bay Street, Charleston, SC
County Number:
Price:
Sale date:
Building size:
Price/square foot:
Location:
Land Area:
Zoning:
Year built:
Stories:
Present Use:
Condition:
Comment:
458-09-01-122
$1,334,000.00
03/25/2008; Deed reference, A655-804
5,085 Square feet
$262.34.51
East Bay Street about 130’ south of Queen Street
Zero lot line; about 2,400 square feet, 0.055 acre
LB-Limited Business
Circa 1870
Three
Restaurant on 1st floor; gallery on 2nd floor; 3rd floor vacant
Good
Historic three story building with Pearlz restaurant on the first
floor (1,990 square feet). Upstairs is the Lange Gallery (1,990
square feet). Partially finished third floor with 1,105 square feet
.
Page 98
Comparable 8; 21 Broad Street, Charleston, SC
County Number:
Price:
Sale date:
Building size:
Price/square foot:
Location:
Land Area:
Zoning:
Year built:
Stories:
Present Use:
Condition:
Comment:
458-09-03-129
$1,335,000.00
02/23/2010
4,284 Square Feet
$311.62
Broad Street about 275’ west of East Bay Street, downtown
LB-Limited Business
1802
Three
Offices and residential
Renovated in 2004
1st & 2nd floor, offices, residential on 2nd and 3rd level; recent
additions include an elevator and a 3rd floor patio and roof garden
on the rear of building; 6-space parking area at rear of building
.
Page 99
Comparable 9; 39 George Street, Charleston, SC
County Number:
Price:
Sale date:
Building size:
Price/square foot:
Location:
Land Area:
Zoning:
Year built:
Stories:
Present Use:
Condition:
Comment:
457-04-04-157
$1,350,000.00
N/A; Listing
2,793 square feet
$483.35
George Street, about 100’ west of King Street, downtown
Estimated at 0.025 acre
GB-General Business
Circa 1870
Three
Yogurt shop, nail salon
Renovated in 2009 new, electrical, plumbing and HVAC; and roof
Retail building located on the main block between the College of
Charleston and King Street with 25 feet of store frontage; The
Freshberry Yogurt Shop occupies the ground floor and Tips-2-Toes
Nail Salon occupies the 2nd and 3rd floors of the building.
.
Page 100
County Number:
Price:
Sale date:
Building size:
Price/square foot:
Location:
Land Area:
Zoning:
Year built:
Stories:
Present Use:
Condition:
Comment:
457-04-02-033
$1,400,000.00
N/A; Listing
3,186 square feet
$439.42
King Street about 260’ northwest of George Street
GB-General Business
1920
Two
Restaurant on 1st floor, 2nd floor apartment
Good
Property is between Calhoun and George Streets with the "WOK,"
World Oriental Kitchen restaurant on the 1st floor and a renovated ,
upscale apartment on the 2nd level
.
Page 101
Comparable 11; 139 President Street, Charleston, SC
County Number:
Price:
Sale date:
Building size:
Price/square foot:
Location:
Land Area:
Zoning:
Year built:
Stories:
Present Use:
Condition:
Comment:
460-11-01-003
$1,595,000.00
N/A; Listing
4,265 square feet
$373.97
Corner of Spring and President Streets about ½ mile northwest of
the Ashley River
About 7,405 square feet, 0.17 acre
GB-General Business
1920
Two
Vacant; but designed for a restaurant and bar
Renovated
Exposed brick walls, wood beams, arched doorways and multiple
large French doors and plans for 100+ seat restaurant and bar on
the 1st floor; The 2nd floor is a renovated 1,141 square foot
apartment. Parking is 15 paved spaces behind the building.
.
Page 102
Comparable 12; 129 Meeting Street, Charleston, SC
County Number:
Price:
Sale date:
Building size:
Price/square foot:
Location:
Land Area:
Zoning:
Year built:
Stories:
Present Use:
Condition:
Comment:
457-08-04-007
$1,200,000.00
N/A; Listing
1,900 square feet
$631.58
Meeting Street, north of Queen Street
About 3,730 square feet; 0.085 acre
GB-General Business
1940
One
Joseph’s Restaurant
Very Good
The restaurant is about 1,900 square feet; there is a garden dining
area with about 1,030 square feet and an additional 400 square
foot storage area.
.
Page 103
Savannah Comparable Properties
.
Page 104
Charleston Comparable Properties, map 1
.
Page 105
.
Page 106
.
Page 107
.
Page 108
Each of the sales transferred a fee simple property estate with typical terms and
conditions and need no adjustments for these considerations. Typically, these factors
are noted on the appraisal grid; however, this statement notes their similarity and
consistency, and to avoid redundancy they are not included in the following grids.
Location adjustment estimates result from the perceived quality differences between the
subject and the comparable properties. No directly paired sales indication these
differences were available; however, Savannah and Charleston are larger towns and
offer more significant history, receive more tourism revenue, and have wider
recognition than Brunswick.
Consequently, the location quality of Savannah and
Charleston is somewhat superior to the subject, which results in the respective
estimated adjustments. (However, Brunswick location has very few buildings that could
be directly competitive to the subject than the competition in either Savannah or
Charleston, which tends to mitigate and lower the adjustment percentage for location
differences). Generally, the Savannah warrants minus 15% adjustments for both
compared properties for location superiority. The historic significance for Charleston is
extensive (for its both Revolutionary War and War Between the States roles) which
warrants minus adjustments of 20% for its compared properties.
Consistent adjustment estimates applied to the alternative properties result in the
respective value indications that form the adjusted value range. The data that is most
similar, relevant and applicable to the appraised subject receives the most credence.
However, if none is particularly pertinent, the collective data may receive similar
emphasis in the value reconciliation.
The adjusted market data from each comparable property provides a valid indication of
value; however, none is particularly relevant. Then, the mean (average), the median
(mid-point), the mode (most frequent) of the indicated values; or some refined
combination may suggest the most reasonable value. The reconciliation in this analysis
expands this concept, further weights the data, and results in five value points:
-
Indication from the twelve properties
Indication six sales (omitting the six listings)
Indication six listings (omitting the six sales)
Indication excepting the highest and lowest values (ten remaining comparables)
Indication excepting the two highest and next lowest values (eight remaining
comparables)
The result suggests the specific value estimate as illustrated on the next pages.
.
Page 109
I. Data
Property:
City:
Location , specific:
Parcel Identification:
Sale date:
Sale price:
Square footage:
Price/square foot:
Site:
Building levels
Condition:
Year Built:
Parking
Subject
Property 1
1401 Newcastle
410 East
Broughton St
Brunswick, GA
Downtown
Savannah, GA
Downtown
B01201032012
N/A
N/A
5,580
N/A
Zero lot line
Two
Renovated/As new
1890
Street
Grantor:
N/A
Grantee:
Recording data:
N/A
N/A
II. Adjustments:
a. Property Rights:
Adjustment:
b. Terms:
Adjustment:
c. Conditions of sale:
Adjustment:
d. Sale Date (months):
Adjustment:
Adjustment amount:
Sub-total/sq feet:
Physical features:
e. Location:
Adjustment:
f. Size:
Adjustment:
g Condition:
Adjustment:
h. Appeal:
Adjustment:
Subtotal:
III. Summary
Net Adjustment
Adjustment amount:
Per sq foot indication:
Rounded:
Mean Indication:
Rounded mean:
Indicated Value:
Rounded:
Property 2
Property 3
Property 4
313 Abercorn St
Savannah, GA
Downtown
85 1/2 Spring St
Charleston, SC
Downtown
336 King St
Charleston, SC
Downtown
2-0004-42-003
2-0015-33-005
460-08-03-251
457-04-02-009
Listing
Listing
12/30/09
03/31/10
$1,400,000
$1,399,000
$218,000
$860,000
3,641
2,892
1,205
3,076
$384.51
$483.75
$180.91
$279.58
5,400
1,100
1,742
2,178
Three
Three
One
Three
Renovated/V Good Renovated/V Good
Shell/fair Renovated/V Good
1809
1900
1910
1850
Street
Street
Street
Street
Raymond & Linda
Casper R Callen
Tony R Phillips
Ian Tomlinson
Morrison
Trust
N/A
N/A The Jesus Saves LLC Logman Racing LLC
N/A
N/A
0100-044
0114-771
Fee Simple
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Fee Simple
0.00%
N/A, Listing
0.00%
N/A, Listing
0.00%
0
-20.00%
($76.90)
$307.61
Fee Simple
0.00%
N/A, Listing
0.00%
N/A, Listing
0.00%
0
-20.00%
($76.90)
$406.85
Fee Simple
0.00%
Conventional
0.00%
Typical
0.00%
8
-4.00%
($19.35)
$161.56
Fee Simple
0.00%
Conventional
0.00%
Typical
0.00%
6
-3.00%
($5.43)
$274.16
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
-15.00%
($46.14)
-5.00%
($15.38)
10.00%
$30.76
0.00%
$0.00
$276.85
-15.00%
($61.03)
-5.00%
($20.34)
10.00%
$40.68
0.00%
$0.00
$366.16
-15.00%
($24.23)
-10.00%
($16.16)
70.00%
$113.09
20.00%
$32.31
$266.58
-15.00%
($41.12)
-5.00%
($13.71)
10.00%
$27.42
10.00%
$27.42
$274.16
N/A
N/A
N/A
-30.00%
-$107.66
$276.85
$280.00
-30.00%
-$117.59
$366.16
$375.00
61.00%
$85.67
$266.58
$275.00
-3.00%
-$5.43
$274.16
$275.00
$348.70
$349.00
$1,947,420
$1,950,000
.
Page 110
I. Data
Property:
City:
Sale date:
Sale price:
Square footage:
Price/square foot:
Site:
Building levels
Condition:
Year Built:
Parking
Grantor:
Grantee:
Recording data:
II. Adjustments:
a. Property Rights:
Adjustment:
b. Terms:
Adjustment:
Adjustment:
Adjustment:
Adjustment amount:
Sub-total/sq feet:
Physical features:
e. Location:
Adjustment:
f. Size:
Adjustment:
g Condition:
Adjustment:
h. Appeal:
Adjustment:
Subtotal:
III. Summary
Net Adjustment
Adjustment amount:
Rounded:
Mean Indication:
Rounded mean:
Indicated Value:
Rounded:
Subject
Property 5
122 Meeting St
Charleston, SC
Downtown
Property 6
375 King St
Charleston, SC
Downtown
458-09-01-084
03/06/08
$472,500
957
$493.73
1,310
Two
Good
1890
Street
457-04-02-025
10/19/09
$1,250,000
3,320
$376.51
3,920
Two
Good
1860
Street
458-09-01-122
458-09-03-129
03/25/08
02/23/10
$1,334,000
$1,335,000
5,085
4,284
$262.34
$311.62
2,400
3,258
Three
Three
Good Renovated/V Good
1870
1802
Street
6 Spaces, street
N/A D and LA Partnership
N/A
122 Meeting St LLC
N/A
F653-623
Three Hundred Seventy
Five King LLC
PEK Holdings LLC
0087-629
July Group, a SC LLC Twenty One Broad LLC
Unity Alley LLC PARC Properties LLC
A655-804
0108-886
1401 Newcastle
Brunswick, GA
Downtown
B01201032012
N/A
N/A
5,580
N/A
Zero lot line
Two
Renovated/As new
1890
Street
Property 7
153 East Bay St
Charleston, SC
Downtown
Property 8
21 Broad St
Charleston, SC
Downtown
Fee Simple
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Fee Simple
0.00%
Conventional
0.00%
Typical
0.00%
29
-14.50%
($40.54)
$453.19
Fee Simple
0.00%
Conventional
0.00%
Typical
0.00%
10
-5.00%
($24.69)
$351.82
Fee Simple
0.00%
Conventional
0.00%
Typical
0.00%
29
-14.50%
($54.59)
$207.75
Fee Simple
0.00%
Conventional
0.00%
Typical
0.00%
6
-3.00%
($7.87)
$303.75
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
-15.00%
($67.98)
0.00%
$0.00
20.00%
$90.64
10.00%
$45.32
$521.17
-15.00%
($52.77)
-5.00%
($17.59)
10.00%
$35.18
0.00%
$0.00
$316.64
-15.00%
($31.16)
0.00%
$0.00
20.00%
$41.55
10.00%
$20.77
$238.91
-15.00%
($45.56)
0.00%
$0.00
10.00%
$30.38
10.00%
$30.38
$318.94
N/A
N/A
N/A
0.50%
$27.44
$521.17
$525.00
-15.00%
$27.44
$316.64
$325.00
-15.00%
($59.87)
$238.91
$250.00
0.50%
-$23.43
$318.94
$325.00
$348.70
$349.00
$1,947,420
$1,950,000
.
Page 111
I. Data
Property:
City:
Sale date:
Sale price:
Square footage:
Price/square foot:
Site:
Building levels
Condition:
Year Built:
Parking
Subject
1401 Newcastle
Brunswick, GA
Downtown
B01201032012
N/A
N/A
5,580
N/A
Zero lot line
Two
Renovated/As new
1890
Street
Property 9
39 George St
Charleston, SC
Downtown
Property 10
349 King St
Charleston, SC
Downtown
457-04-04-157
Listing
$1,350,000
2,793
$483.35
1,100
Three
Renovated/V Good
1870
Street
Property 11
139 President St
Charleston, SC
US Highway 17
Property 12
129 Meeting St
Charleston, SC
Downtown
457-04-02-033
460-11-01-003
Listing
Listing
$1,400,000
$1,595,000
3,186
4,265
$439.42
$373.97
2,320
7,405
Two
Two
Good Renovated/V Good
1920
1920
Street
15 Spaces, street
457-08-04-007
Listing
$1,200,000
1,900
$631.58
3,730
One
Good
1940
Street
Grantor:
N/A
Phelps, Glen &
Pamela
60 Calhoun St
Associates LLC
Grantee:
Recording data:
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Fee Simple
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Fee Simple
0.00%
N/A, Listing
0.00%
N/A, Listing
0.00%
0
-20.00%
($62.32)
$421.03
Fee Simple
0.00%
N/A, Listing
0.00%
N/A, Listing
0.00%
0
-20.00%
($96.67)
$342.75
Fee Simple
0.00%
N/A, Listing
0.00%
N/A, Listing
0.00%
0
-20.00%
($87.88)
$286.09
Fee Simple
0.00%
N/A, Listing
0.00%
N/A, Listing
0.00%
0
-20.00%
($74.79)
$556.78
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
-15.00%
($63.15)
-5.00%
($21.05)
10.00%
$42.10
10.00%
$42.10
$421.03
-15.00%
($51.41)
-5.00%
($17.14)
20.00%
$68.55
10.00%
$34.28
$377.03
-15.00%
($42.91)
0.00%
$0.00
10.00%
$28.61
0.00%
$0.00
$271.79
-15.00%
($83.52)
-5.00%
($27.84)
15.00%
$83.52
0.00%
$0.00
$528.94
N/A
N/A
N/A
2.00%
$7.32
$421.03
$425.00
-20.00%
-$62.32
$377.03
$380.00
-10.00%
-$62.40
$271.79
$275.00
-25.00%
-$102.19
$528.94
$550.00
II. Adjustments:
a. Property Rights:
Adjustment:
b. Terms:
Adjustment:
Adjustment:
Adjustment:
Adjustment amount:
Sub-total/sq feet:
Physical features:
e. Location:
Adjustment:
f. Size:
Adjustment:
g Condition:
Adjustment:
h. Appeal:
Adjustment:
Subtotal:
III. Summary
Net Adjustment
Adjustment amount:
Rounded:
Mean Indication:
Rounded mean:
Indicated Value:
Rounded:
Meeting Street
Joe Wez LLC Opportunity LLC
$348.70
$349.00
$1,947,420
$1,950,000
.
Page 112
Data Refinement and Reconciliation
Property
410 East
Broughton
313 Abercorn
85.5 Spring
336 King
122 Meeting
375 King
153 East Bay
21 Broad
39 George
349 King St
139 President
129 Meeting
Mean; all
properties
Mean; sales
Mean; listings
Mean; minus 2
extremes
Mean; minus 4
extremes
Mean; all
categories:
Rounded mean:
Indicated Value:
Rounded
Value
Estimate:
Sale
Date
$/
$/
$/square $/square
Adjusted Rounded square square foot less foot less
$/square $/square $/square foot
foot
two
four
Size
foot
foot
foot
sales listings extremes extremes
Price
Listing $1,400,000 3,641
Listing $1,399,000 2,892
12/30/09 $218,000 1,205
03/31/10 $860,000 3,076
957
03/06/08 $472,500
10/19/09 $1,250,000 3,320
03/25/08 $1,334,000 5,085
02/23/10 $1,335,000 4,284
Listing $1,350,000 2,793
Listing $1,400,000 3,186
Listing $1,595,000 4,265
Listing $1,200,000 1,900
$384.51
$483.75
$180.91
$279.58
$493.73
$376.51
$262.34
$311.62
$483.35
$439.42
$373.97
$631.58
$276.85
$366.16
$266.58
$274.16
$521.17
$316.64
$238.91
$318.94
$421.03
$377.03
$271.79
$528.94
$280.00
$375.00
$275.00
$275.00
$525.00
$325.00
$250.00
$325.00
$425.00
$380.00
$275.00
$550.00
- $280.00
- $375.00
$275.00
$275.00
$525.00
$325.00
$250.00
$325.00
- $425.00
- $380.00
- $275.00
- $550.00
$280.00
$375.00
$280.00
-
$275.00
$525.00
$325.00
$250.00
$325.00
$425.00
$380.00
$275.00
$275.00
$525.00
$325.00
-
-
-
-
$325.00
$425.00
$380.00
$275.00
-
-
-
-
- $355.00
- $329.17
- $380.83
-
-
-
-
-
-
-
- $343.50
-
-
-
-
-
-
-
-
$348.70
$349.00
- $1,947,420
-
-
-
-
-
-
-
-
- $1,950,000
-
-
-
-
-
-
-
-
$351.25
The data analyzed reflects the market for historic commercial properties, principally
suited for a restaurant use.
After adjustment and the further data refinement, the indicated value per square foot is
$339.00. With the subject’s size 5,580 square feet, its indicated value is $1,947,420.00;
rounded to $1,950,000.00.
One Million Nine Hundred Fifty Thousand Dollars
($1,950,000.00)
.
Page 113
CORRELATION AND FINAL VALUE ESTIMATE
This appraisal considers the three traditional valuation approaches; however, only the
Direct Sales Comparison is relevant.
The Direct Sales Comparison Approach considers market activity including recent sales
of the most reasonable available property alternatives to the subject. It relies directly on
the actions of marketplace participants and requires relevant and applicable market
data to be reliable. There are no sales of directly similar properties from the immediate
area and the most viable available market data is from Savannah, GA and Charleston,
SC; however, these properties are reasonably consistent with the subject type and
quality property. Therefore, the Direct Sales Comparison Approach is valid.
Given these considerations based on the collected market data, the Market Value
estimate for the subject is:
One Million Nine Hundred Fifty Thousand Dollars
($1,950,000.00)
The intent of this report is to comply with the regulations of the Federal Government, as
supplied to and published by the major Professional Appraisal Groups. The value
estimate is an opinion based on the actions of the participants in the relevant
marketplace, BUT MAY NOT OCCUR IN PART, OR-AT ALL and does not represent a
fact of any kind.
.
Page 114
APPRAISER QUALIFICATIONS
Gary Beaver Appraisal, Brokerage, and Development Experience
04/1997-Present:
Real Estate Appraisal; General residential and commercial real estate appraisal.
Aspen, Colorado area
Hilton Head Island-Bluffton, South Carolina area
St. Simons Island, Georgia area
New Mexico (1997-1999)
07/1993-1997:
Real Estate Appraisal, Durango, Colorado. Durango Appraisal Inc which began as an individual
practice grew to six appraisers and three support staff persons and became the one of the largest
volume appraisal companies in the area which served a twelve (12) county area in CO and NM.
1987-1997:
Real Estate Appraisal, Hilton Head Island, SC: Commercial staff appraiser. The appraisal activities
included cases for government agencies, FDIC, the former RTC, commercial, national, regional, and
local lenders.
1982-1987:
Real Estate Development and Consulting; Hilton Head Island, SC, Atlanta, GA; Winston Salem, NC.
Hilton Head, SC: Developed a single family complex in Sea Pines Plantation, a residential
townhouse complex in Shipyard Plantation; permitting a multi use property; development of
commercial office buildings and single family custom homes.
Atlanta, GA: Re-zoned and obtained entitlements for residential properties (two cases) for commercial
office development
Winston Salem, NC: Developed a twenty (20) lot residential subdivision.
1980-1982:
Real Estate Broker with Sea Pines Plantation Resort, Hilton Head Island, SC; General brokerage
acting as a broker-in-charge for a satellite Sea Pines sales office.
1972-1982:
Real estate brokerage, residential home construction; owned and managed rental homes in
Statesville, NC
2.
Education and Appraisal Courses
Catawba Valley Technical Institute, Hickory, North Carolina 1972-1973. Real Estate, Economics, English, Business
Administration.
Technical College of the Low Country, Economics, Accounting, 1990.
Technical College of the Low Country, South Carolina Residential Home Builders License, 1990.
Appraisal courses:
Realtors Education Foundation, South Carolina Board of Realtors:
Real Estate Analysis, 11/09/91
Sales Comparison Application, 11/23/91
Cost and Income Approach, 12/14/91
Appraisal Institute:
101
210
310
410
420
510
500
Seminar
Seminar
Seminar:
Seminar:
Seminar:
410
Seminar:
Introduction to Appraising Real Property, 09/27/92
Residential Case Study, 05/06/93
Capitalization Theory & Technology, Part A, 05/18/92
Standards of Professional Practice, Part A, 09/05/91
Standards of Professional Practice, Part B, 09/05/91
Advanced Income Capitalization, 06/13/93
Advanced Residential Form, Narrative Report Writing, 02/11/95
Small Residential Income Property Appraisal Report, 04/11/94
Understanding Limited Appraisals and Reporting Options- Residential, 01/20/95
How to Appraise FHA Property; 02/22/95
Online Appraising Manufactured Housing; 05/30/2004
Online Residential Design & Functional Utility; 05/31/2004
National USPAP 15 Hour Class; 07/21/2004
The Professional’s Guide to the Uniform Residential Appraisal Report; 05/09/2005
.
Page 115
APPRAISER QUALIFICATIONS, continued
The Citadel:
Basic Income Property Appraisal, 05/09/92
Advanced Income Property Capitalization, 11/09/92
Appraising Income Properties; Practical Applications, 11/22/92
The University of Colorado at Boulder:
Standards of Professional Practice, 06/13/98
Property Inspection, 12/0798
Appraisal Reporting, 09/29/98
South Carolina School of Real Estate: USPAP, 02/12/01
3.
Licenses & Certifications:
Georgia Certified General Real Property Appraiser, 02/99
Colorado General Appraiser Certificate, 07/93
South Carolina General Appraiser Certificate, 05/93
North Carolina Real Estate Sales License, Issued 1974
North Carolina Real Estate Brokers License, Issued 1975
South Carolina Real Estate Brokers License, Issued 1979
South Carolina Residential Contractors License (passed examination on 12/27/90)
4.
Types of commercial appraisals completed:
Feasibility Studies, Bluffton, SC and Fort Myers, FL area
Conservation Easements, Durango, CO
Dance Club, Durango, CO
18,000 acre ranch, New Castle, CO
Mini Warehouses, Hilton Head, S.C. and Farmington, NM
Mobile Home Park, Bluffton, SC
Marinas, Jacksonville, FL. & Savannah, GA
Alcohol Drug & Rehabilitation facility, Hilton Head Island, SC
Ski resort property, Taos, NM; Granby, CO; and Winter Park CO
Golf Course, Beaufort, SC
Planned Unit Development, Spokane, WA
Planned Unit Development, Gulf Shores, AL
Restaurant properties, Hilton Head SC and Durango CO
Shopping Centers, Richmond Hill GA Hilton Head SC
Office Buildings, Hilton Head Island, SC and Ft Myers, FL
Ranches, Durango, CO
Veterinarian Clinic, Hilton Head Island, SC
Miniature Golf Course, Hilton Head Island, SC
Apartments, Raleigh, NC and Charlotte, NC and Carolina, SC
Residential Subdivisions, New Castle, CO; Bluffton, SC and Beaufort, SC
Resort Hotel, Hilton Head, SC
Assisted Living Facility, Durango, CO; Savannah, GA
Drag Strip, Greer, SC
.
Page 116

Aspen Appraisal Consultants

Transcripción

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