Okaloosa County BOCC — April 15, 2014 — Foy Shaw Road Project SJPA_Sig Resolution_Appraisals_Land Purchase Agreement Letter — reading text

the entire appraisal report. Alternatively, the reviewer Reviewed only portions of the report including: ___ Land Valuation; ___ Cost Approach; ___Income proach; ___Sales Comparison Approach; ___ Market Study; __ Highest & Best Use; Reconciliation [_]\Checked all mathematical functions in the sections reviewed; Inspected ___exterior of the subject property; inspected __units;___% of interior; other L_Reviewed__% of __leases lease abstracts or ___rent roll affecting the subject property; [_]Reviewed historical income and expense data for___ years; [_]Reviewed any sale contract/closing statement for the property within last three years; [_]nspected___some or ___all comparable data (land sales, rent comps, improved sale comps); L_]Verified transactional data reported in the report with___ MLS or Comp Service; ___ Party to transaction; or____ Public Records [_]Researched market for additional comparable data The scope of this review did not include an opinion about the appraiser's value (i.e., concurrence, non- [_]lconcurrence, or development of reviewer's value opinion.) rin L Describe information available to the Reviewer that [None was Not Available to the Appraiser REVIEWER’S CONCLUSIONS $Vale Eiecie Date Value “As-Is” $58,000 Hypothetical Conditions None Extraordinary Assumptions None Prospective Value “Upon Completion” IA Hypothetical Conditions NVA Extraordinary Assumptions N/A Prospective Value “Upon Stabilization” INVA Hypothetical Conditions N/A Extraordinary Assumptions N/A Review Appraiser Checklist Note: S.R. Citations Refer to Specific USPAP Standards Rules, Statements and Advisory Opinions Question Shy ac | Yes | No | N/A| PG | Acceptable? INTRODUCTION Was the appropriate report format utilized SR2-2; X 1 and prominently stated? A011; Yes AO12 5 Did the report state the identity of the client and SR2(a)(i); | * Yes any intended users? SMT 9 -2(a) (ii): Yes 3 Did the report state the intended use of the report? ore (att): a Was the real estate sufficiently described including sR2-2(a) (i X Yes 4 the physical and economic property characteristics porn relevant to the assignment? 14136 www.baileyassociatesinc.com APPRAISAL REVIEW Was an accurate legal description included from Xx Yes 5 appropriate documentation such as a fitie policy, SR2-2(a) (iii) deed, survey plat or loan documentation? age . . Yes Was the legal description verified with a survey to ora\ (ii 6 be sure they coincide? Re 2a) Y 7 Was the appropriate interest defined and appraised? SR2-2(a)(iv) x es Was the type and definition of value defined Sey x ies 8 | and sourced? 2022. Did the report contain an appropriate analysis of sR2-2(ay; | * Yes 9 any prior and current sales, options or listing for the SMT6; AO7, last 3 years? A022 Was the effective date of the appraisal and date of | SR x Ys 10 . 2(a)(vi); report included? SMT3: Was the scope of work used to develop the aul: A Tes 11 | appraisal disclosed? A028: A029 Did the report inciude a description of the information X Yes 42. | analyzed, appraisal methods and techniques Faith * | employed and the reasoning that supports the A031, _ analyses, opinions, and conclusions? AO1 Did the report state the use of the real estate existing Xx Yes as of the date of value and the use reflected in the 13. appraisal; and when an opinion of highest and best use | SR2-2(a)(ix) was developed by the appraiser, describe the support and rationale for that opinion? Did the report include an acceptable list of general X Yes assumptions and limiting conditions (for example, an assumption which effectively removes the SR2-2 aa appraiser's responsibility, or limits the extent of ae liability to the amount of the appraisal fee, is unacceptable)? 15. | Did the report clearly and conspicuously include X Yes any special assumptions or limiting conditions? SRZ-2(a109 16. | Did the report include any hypothetical conditions? SR2-2(a)(x) x Lis 17. | Did the report include a signed certification similar in SR2-2(a)(xi); | Yes content to SR 2-3? SR2-3 REGIONAL, NEIGHBORHOOD AND MARKET DESCRIPTION INFORMATION 4. | Was the Regional/Area data relevant to subject x Yes "_| property? . . X Yes 49. | Was the Neighborhood data relevant to subject property? 20. | Was the Market Analysis / Absorption study relevant Xx Yes * | to the subject property? 21. | Were appropriate exhibits for Regional, Xx Yes Neighborhood etc. maps included? 22. | Remarks: 14136 www. baileyassociatesinc.com APPRAISAL REVIEW SITE DATA 23. | Were the site characteristics adequately described? Xx Yes Was any excess or expansion land identified and x Yes 24. its contributory value to value considered? ; a. 4 Yes - 25. | Was the zoning description adequate? SR 1-3(a) 26. | Was the description of the improvements adequate? x Yes 27. | Do any improvements conform to existing zoning? If SR 1-3(a) X Yes | not, describe in remarks? if the improvements are proposed (or there is a X Yes proposed addition, proposed repairs, renovations, etc. 28. | to be made), did the appraiser have plans appropriate SR 1-2(a) to reflect the kind and character of such improvements? Was a tax and assessment analysis included X Yes 29. and adequate? Yes 30. | Are the taxes reasonable? x Were appropriate exhibits including a copy of survey, X Yes 31. | plat map, assessor's plat, photographs, etc. included? 32. | Remarks HIGHEST AND BEST USE Has a meaningful highest and best use analysis Xx Yes 33. | relevant to subject characteristics been included for SR 1-3(b) both the “as if vacant” and “as improved/proposed”? 34. | Remarks VALUATION SECTION — LAND VALUATION 35. | if the sales comparison method was employed, was X Yes sufficient detail provided on each sale including write- SR 1-4 oe ; : -4(a) up, verification of sale, analysis of sale and adjustments as required by scope of work decision? 36. Was an adjustment grid included? x wes 37. | fanother method of estimating land value, was Xx Yes "| it adequately documented and reasonable? 38. | Was the land value considered well supported SR 1-4(a) X Yes "| and reasonable? 39. | Were appropriate exhibits including land sale maps, X Yes ‘| MLS printouts, included? 40. | Remarks 14136 www. baileyassociatesinc.com APPRAISAL REVIEW VALUATION SECTION — COST APPROACH Were the direct and indirect components, x Yes at entrepreneurial profit and depreciation from all causes SR 1-4(b)(ii) "| appropriately estimated for either reproduction cost or (iii) replacement cost? x Yes 42. | Was Marshall Valuation the source of the cost estimate? 43. | FOr proposed projects, was the developer's cost ert i-bee) X Yes * | estimate compared with another source? 44. | For proposed projects, was the developer's cost X Yes ’ | estimate considered reasonable? Was an analysis of effective age, remaining Xx Yes 45. | economic life and total economic life reasonable? 46. | Was the value estimated by the Cost SR A-A(b) a Yes ’ | Approach reasonable? Was the value estimated by the Cost Approach one of Xx Yes 47. | the approaches relied heavily upon by the appraiser? 4g. | Were appropriate exhibits including a Marshall Xx Yes ’ | Valuation Cost Breakdown, etc. included? 49. | Remarks: VALUATION SECTION — SALES COMPARISON APPROACH 50. | ifthe sales comparison method was employed, was X Yes sufficient detail provided on each sale including write- SR 1-4(a) up, verification of sale, analysis of sale and adjustments as required by scope of work decision? 51. | Was an adjustment grid included? Xx Yes 52. | Was the property value considered well supported SR 1-4(a) X Yes and reasonable? 53. | Was the value estimated by the Sales Comparison Xx Yes Approach one of the approaches relied heavily upon by the appraiser? 54. | Were appropriate exhibits including location X Yes maps, photographs, MLS printouts, etc. included? 55. | Remarks 14136 www. baileyassociatesinc.com APPRAISAL REVIEW VALUATION SECTION — INCOME APPROACH Income Projection 56. Was the analysis of any leases encumbering the property (i.e., contract rent) adequate? SR 1-4(c)(d) xX Yes 57. Was the conclusion of contract rent appropriate and was the impact of any above or below market rate leases considered? SR 1-4(c)(d) x Yes 58. Was the analysis of market rent for any vacant space including , sufficient detail provided on each rent comparable including write-up, verification of lease, x Yes 59. Were all of the rent comparables completed transactions and not “asking rents”? x Yes 60. Was the rental estimate considered well supported and reasonable? SR 1-4(c)(d) x Yes 61. Was a rent comparable adjustment grid included? xX Yes 62. Was consideration given to the projection of any “other” sources of income BEFORE vacancy allowance, i.e., expense reimbursements, CAM charges, parking, laundry or other fee income? SR 1-4(c)(i) x Yes 63. If this is a proposed project, were the developer's projected rental projections considered reasonable? SR 1-2(e) x Yes 64. In the event of all “net” or “triple net” leases, were expense reimbursements shown as “other income” and a full burden of expenses projected? x Yes 65. Was the Potential Gross Income estimate adequate? Xx Yes 66. Were appropriate exhibits including rental location maps, photographs, MLS printouts, etc. included? Xx Yes 67. Was an appropriate deduction for vacancy and collection loss made, and is it in line with current market conditions? xX Yes 68. Was the effective gross income estimate well supported? SR 1-4(c)(i) Xx Yes 69. Remarks VALUATION SECTION - INCOME APPROACH Expense Projection 70. If this is an existing property, were a minimum of two years of historical data along with year to date data analyzed? x Yes 71. If this is a proposed property, was the developer’s proforma expenses analyzed? X Yes 72. Were existing or proposed expenses compared with an appropriate source of published comparable expense data? X Yes 73. Were existing or proposed expenses compared with an appropriate source of private comparable expense data? x Yes 14136 www. baileyassociatesinc.com APPRAISAL REVIEW VALUATION SECTION — INCOME APPROACH Income Projection 74. | Were expenses analyzed on the basis of at least two Xx Yes units of comparison, i.e., per square foot, % of EGI, per 75. | if this is a proposed project, were the developer's X Yes proforma expenses considered reasonable? 76. ; x Yes Were total expenses considered reasonable? SR 1-4(c)(ii) 77. Remarks VALUATION SECTION — INCOME APPROACH Direct Capitalization (Rate or Factor) 78. | If utilized, were at least three methods of developing a x Yes capitalization RATE analyzed and included (for example, 79. | if utilized, was at least one method of developing a X Yes capitalization FACTOR analyzed and included (for 80. | Was the capitalization rate or income factor reasonable? | SR 1-4(c)(ii) Xx Yes 81. | Was the value conclusion by the Income Approach x Yes using Direct Capitalization well supported? 82. | Was the value estimated by the Income Approach Xx Yes 83. | Remarks VALUATION SECTION — INCOME APPROACH Yield Capitalization Methodology 84. | if utilized, was an appropriate software program utilized x Yes based on the complexity of the project (i.e., Excel, Argus, 85. | Was a software electronic file included? x Yes 86. x Yes Was lease data correctly input? 87. | Were assumptions made concerning number of X Yes projection periods, income and expense growth, market rental rates on renewal, replacement reserve 88 7 Xx Yes "| Was the discount rate considered reasonable? SR 1-4(c)(iii) 39. | Was the value conclusion by the Income Approach xX Yes * | using Direct Capitalization well supported? Was the value estimated by the Income Approach Xx Yes 90. | utilizing Direct Capitalization one of the approaches relied heavily upon by the appraiser? 91. | Remarks 14136 www. baileyassociatesinc.com APPRAISAL REVIEW VALUATION SECTION — INCOME APPROACH income Projection 92. Did the reconciliation take