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

extraction, land residual, ground rent capitalization, and discounted cash flow analysis are all recognized as reasonable methods. However, sales comparison analysis is employed most often by market participants to derive pricing decisions in the local market area. Therefore, we employ this method exclusively. Methodology The cost approach is a reliable methodology for new or nearly mew buildings. We estimate the replacement cost or reproduction cost, in this case reproduction construction cost, of the existing or proposed improvements and site improvements (including direct and indirect costs as well as an appropriate developer profit), deducting accrued depreciation from physical, functional, and external sources from the total replacement or reproduction cost new. The depreciated replacement or reproduction cost of the improvements is added to the value of the site resulting in a value indication of the fee simple interest in the property. The sales comparison approach is based on the "Principle of Substitution” which indicates that an informed purchaser would pay no more for a property than the cost of acquiring an equally desirable substitute property with the same or similar utility. This approach is applicable when an active market provides sufficient quantities of reliable data which can be verified from authoritative sources. The Sales Comparison Approach is reliable in an active market, or if an estimate of value is related to properties for which there are comparable sales available. This approach to value is also pertinent when sales data can be verified with the principals to the transaction. Heavy emphasis is usually placed on this approach to value in an active market. The income approach is recognized as a reliable approach for estimating the value of "income producing” property to an investor. The income approach consists of methods, techniques, and mathematical procedures that an appraiser uses to analyze a property’s capacity to generate income and convert that income into an indication of present value either by capitalizing the current income at a market capitalization rate or discounting the future cash flows into a present value estimate using an appropriate yield (discount) rate. The appraisal process emulates the market, and the most probable buyer would be an investor or prospective owner occupant. Two techniques associated with the income approach are direct capitalization and discounted cash flow analysis. Methodology Employed in this Appraisal and Explanation of Exclusion of any of the three approaches to Value The Land Sales Analysis was employed in this appraisal. The income, sales and cost approaches were not used as there are no improvements associated with the subject property. In addition, the market rarely leases industrial land therefore data is scarce and may not produce a reliable result. 3.07 + Acres, - Industrial Land, Foy Shaw Road Project Page 16 H&A 140023 Crestview, Okaloosa County, FL LAND VALUATION Overview: Unit of Comparison: Elements of Comparison: Comparable Sales: Sales Comparison analysis was employed to estimate the current market value of the land, “As Vacant” as of our most recent date of inspection. The approach consists of steps in which the appraiser searches the market for sales of vacant land similar to the subject property, qualifies the sales prices and terms, compares the sales to the subject property for differences, adjusts the sales for those differences, and formulates an opinion of value of the subject property from the indicated values (as adjusted) of the sales. Ideally, the subject would be compared to sales of similar parcels of land in the market area that are of the same approximate size, location, utility, and quality as the subject property. Land sales were discovered in the market area with similar locations, size, utility, and zoning, but not necessarily the same characteristics as the subject property. Typically, comparable sales are reduced to a unit of comparison. Units of comparison represent the unit which is consistently used in the market to derive pricing decisions. Analysis of sales of vacant commercial land throughout the market area indicates the predominant common pricing and valuation unit is dollars per SF. The unit of comparison utilized in this analysis is price per acre. i) Non-realty components of vaiue: furniture, fixtures, and equipment. 2) Real property rights conveyed: fee simple, leased fee, leasehold, fractional interest, etc. 3) Financing terms: Cash, cash equivalent, seiler financing, financing concessions by seller, etc. 4) Conditions of Sale: Seller concessions, personal property included in sale, parties related, etc. 5) Expenditures made immediately upon purchase: deferred maintenance repairs, rehabilitation, renovation, upgrades 6) Market Conditions: Appreciation, depreciation, stagnation in real estate prices since the time of sale. 7) Location: comer, major traffic artery, city/county, interior lot, etc. 8) Physical characteristics: Size, topography, access to utilities, construction quality, condition, etc. 9) Economic characteristics: rents, operating expenses, vacancy rates, lease provisions, management competence, etc. 10) Use: zoning, future land use, building codes, government control, etc. The descriptions and analysis of the land sales are presented on the following pages. We have selected land sales from the market which we conclude are comparable to the subject property parent tract, 10 acres of industrial zoned land, All of the sales are representative of commercial/industrial land in the market area and would have competed with the subject properties “as vacant.” 3.07 + Acres, - Industrial Land, Foy Shaw Road Project Crestview, Oka loosa County, FL COMPARABLE LAND SALES SUMMARY TABLE Page 17 H&A 140023 No. Location SaleDate Price Size in Price/ Acres Acre 1 Adora Teal Way 12/20/2013 $310,000 12.000 $25,833 } 2 5460 Fairchild Road 06/29/2012 $64,400 1,360 $47,353 3 5460 Fairchild Road 06/29/2012 544 500 1.360 532.721 j Vacant Land Sale Location Map ee | FFHER SH Property Identification Record ID Property Type Property Name Address Location Tax ID Legal Description Sale Data Grantor Grantee Sale Date Deed Book/Page Property Rights Conditions of Sale Financing Sale History Verification Sale Price Land Data Zoning Topography Utilities Shape Flood Info Land Size Information Gross Land Size Page 18 3.07 + Acres, - Industrial Land, Foy Shaw Road Project Crestview, Okaloosa County, FL H&A 140023 Land Sale No. ! 2756 Vacant Industrial, Airpark Oklaloosa County Airpark Adora Teal Way, Crestview, Okaloosa County, Florida 32536 West side of the CEW airport 03-3N-23-0000-0001-0170 Metes & bounds Aviation Industrial Group, Inc. Training & Research Center Florida, LLC December 20, 2013 Contract 10/04/2013 3131/302 Fee simple Arm's length Cash None in prior 5 years Other sources: MLS; Public records, Confirmed by Walter Humphrey $310,000 Listed $450,000 Industrial Level, cleared All Irregular x 12.000 Acres or 522,720 SF Page 19 3.07 + Acres, - Industrial Land, Foy Shaw Road Project H&A 140023 Crestview, Ckaloosa County, FL Land Sale No. 1 (Cont.) Indicators Sale Price/Gross Acre $25,833 Sale Price/Gross SF $0.59 Remarks This property does not have direct runway access. 3.07 + Acres, - Industrial Land, Foy Shaw Road Project Page 20 Crestview, Okaloosa County, FL H&A 140023 Land Sale Ne. 2 Copyright © 2011. q Public. net SPP fo Property Identification ¢ ORES 7 SOY EENE ROR Record ID 2765 Property Type Vacant Land, Industrial Address 5460 Fairchild Road, Crestview, Okaloosa County, Florida Location Crestview Industrial Airpark Tax ID 11-3N-23-0000-0007-0010 Legal Description Land Size Information Gross Land Size Front Footage S1/2 OF $140 YDS OF NE1/4 OF SE1/4 LYING W OF FAIRCHILD RD Sale Data Grantor HEATON, SAMUEL B JR & RMAR Grantee L-3 COMMUNICATIONS INTEGRATED SYSTEMS Sale Date June 29, 2012 Deed Book/Page 3043 678 Property Rights Fee simple Conditions of Sale Arms length Financing None Sale History None in previous three years Verification Other sources: Public Records, Confirmed by Hillary Olds Sale Price $64,400 Land Data Zoning IND-Airpark, Industrial Topography Nearly level at road grade Utilities All at or near site Dimensions 206' x 287' Shape Rectangular Flood Info 'X' 1.360 Acres or 59,242 SF 206 ft Fairchild Road Page 21 3.07 + Acres, - Industrial Land, Foy Shaw Road Project H&A 140023 Crestview, Okaloosa County, FL Land Sale No. 2 (Cont.) Indicators Sale Price/Gross Acre $47,353 Sale Price/Gross SF $1.09 Remarks None. 3.07 + Acres, - Industrial Land, Foy Shaw Road Project Page 22 Crestview, Okaloosa County, FL H&A 140023 Land Sale No.3 Sopy ght © 2011. 9Public.net BMS 4 Property Identification Land Size Information Gross Land Size Front Footage % ee SKY We Rr ery Record ID 2766 Property Type Vacant Land, Industrial Address 5460 Fairchild Road, Crestview, Okaloosa County, Florida Location Crestview Industrial Airpark Tax ID 11-3N-23-0000-0007-0000 Legal Description N1/2 OF $140 YD OF NE1/4 OF SE1/4 LYING W OF FAIRCHILD RD Sale Data Grantor FORBORD, MARGARET L (WIDOW) Grantee L-3 COMMUNICATIONS INTEGRATED SYSTEMS Sale Date June 29, 2012 Deed Book/Page 3042 3659 Property Rights Fee simple Conditions of Sale Armis length Financing None. Sale History None in previous three years Verification Other sources: Public Records, Confirmed by Hillary Olds Sale Price $44,500 Land Data Zoning IND-Airpark, Industrial Topography Nearly level at road grade Utilities All at or near site Dimensions 206' x 286' Shape Rectangular Flood Info 'X' 1.360 Acres or 59,242 SF 206 ft Fairchild Road 3.07 + Acres, - Industrial Land, Foy Shaw Road Project Page 23 H&A 140023 Crestview, Okaloosa County, FL Land Sale No, 3 (Cont.) Indicators Sale Price/Gross Acre Sale Price/Gross SF $32,721 $0.75 Remarks None. 3.07 + Acres, - Industrial Land, Foy Shaw Road Project Crestview, Okaloosa County, FL LAND SALES ADJUSTMENT GRID EERE " Page 24 H&A 140023 LAND SALE #3 STANDARD DEVIATION ELEMENTS OF SUBJECT | LAND SALE #2 Sale Price N/A $310,000 $64,400 $44,500 Property Rights Conveyed Fee Simple Fee Simple Fee Simple Fee Simple Property Rights Adjustment = -- 8s -- Adjusted Sales Price $310,000 $64,400 $44,500 Financing Market Cash to Seller Cash to Seller Cash to Seller Financing Adjustment se _ a -- Adjusted Sales Price $310,000 $64,400 $44,500 Conditions of Sale Amn’s Length Amm’s Length Arm’s Length Amn’s Length Conditions Adjustment a o-- o-- -- Adjusted Sales Price $310,000 $64,400 $44,500 Market Conditions (Time) 02/12/2014 12/20/13 6/29/12 6/29/12 Market Conditions Adjtmt -10% -1.48% -16.25% -16.25% Adjusted Sale Price (Total) N/A $305,414 $53,937 $37,270 Adjusted Sale Price per AC N/A $25,451 $39,660 $27,405 Location 10 AC, Crestview, Okaloosa County Okaloosa County Okaloosa County Okaloosa County, FL Airpark, Adora Teal Airpark, 5460 Airpark, 5460 Avg Way, Crestview, FL Fairchild Rd, Fairchild Rd, Good Crestview, FL/ Crestview, FL/ Good Good Adjustment _ -15.00% -15.00% -15.00% Size: Acres 10.0 12.0 1.4 1.4 Adjustment = 0.00% -12.00% -12.00% Dimensions Square Rectangular (+} Rectangular Rectangular Adjustment _ — _ = Zoning IN IN IN IN Adjustment — con _- a Highest and Best Use Industrial Industrial Industrial Industrial Adjustment = oes ae _ Utilities All near site All at or near site All at or near site All at or near site Adjustment eee _ _ = Topography Sloping/Weoded/Wet Level/Cleared/Dry Level/Wooded/Dry Level/Wooded/Dry Adjustment _ -8.00% -5.00% -5.00% Functional Utility Good Good Good Good Adjustment --- = — _ Access Dit Paved Paved Paved Adjustment _ -5.00% -5.00% -5.00% Net Adjustment/% N/A -28.0% -37.0% -37.0% $ per Acre: | ($7,126) ($14,674) ($10,140) INDICATED VALUE @ AC $18,325 __$24.986 17,265 MEAN