HomeMy Public PortalAbout1995 Appraisal Report from J.tifCOPY
LOCATED AT:
95 WEsr MCIN ryiE STREET
KEY BISCAYNE, FLORIDA
PREPARED FOR:
VILLAGE OF KEY BISCAYNE
85 WEsr MCINrYRE STREET
KEY BISCAYNE, FLORIDA
AS OF:
DECEMBER 5, 1995
PREPARED By:
J. MARK QUINLIVAN, MAI
5730 S.W. 74m STREET - SUITE 300
SOUTH MIAMI, FLORIDA 33143
QUINLIVAN APPRAISAL
A PROFESSIONAL ASSOCIATION
REAL ESTATE APPRAISERS 8C CONSULTANTS
5730 S.W. 74TH STREET, SUITE 300
SOUTH MIAMI, FLORIDA 33143
J. MARK QUINLIVAN, MAI
STATE -CERTIFIED GENERAL APPRAISER
RZ 0000112
JAMES E. AGNER, MAI
STATE -CERTIFIED GENERAL APPRAISER
RZ 0000382
December 5, 1995
TELEPHONE (305) 663-6611
FAX (305) 665-4921
C. Samuel Kissinger, Village Manager
Village of Key Biscayne
85 West McIntyre Street
Key Biscayne, Florida 33149
Dear Mr. Kissinger:
GREGORY R. GUNTER, MAI
STATE -CERTIFIED GENERAL APPRAISER
RZ 0000438
THOMAS F. MAGENREIMER, MAI
STATE -CERTIFIED GENERAL APPRAISER
RZ 0000553
In accordance with your request and authorization, I have prepared this Appraisal
Report covering the following described property:
Two-story office building and 1.937 vacant land
site located at 95 West McIntyre Street, Key
Biscayne, Florida
The purpose of this Appraisal is to estimate the Market Value of the described
property as of December 5, 1995, being one of the dates of personal inspection.
The narrative Appraisal Report that follows sets forth the identification of the
property, the assumptions and limiting conditions, pertinent facts about the area and
the subject property, comparable data, the results of the investigations and
analyses, and the reasoning leading to the conclusions set forth.
C. Samuel Kissinger, Village Manager
Village of Key Biscayne
December 5, 1995
Page 2
Based on the inspection of the property and the investigation and analyses
undertaken, I have formed the opinion that, as of December 5, 1995, the subject
property has a Market Value of:
0111E BUILDING
EXCESS LAND SI'IE
Respectfully submitted,
1
/Mark Quiniivan, MAI
,e Certified General Appraiser
Certification Number: RZ0000112
JMQ/nlm
(95-160B)
$2,200,000
$2,100,000
CERTIFICATION OF VALUE
The undersigned hereby certifies that, to the best of my knowledge and belief:
(A) The statements of fact contained in the report are true and
correct.
(B) The reported analyses, opinions and conclusions are limited
only by the assumptions and limiting conditions set forth,
and are my personal, unbiased professional analyses,
opinions and conclusions.
(c) 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.
(D) The appraiser's compensation is not contingent upon the
reporting of a predetermined value or direction in value that
favors the cause of the client, the amount of the value
estimate, the attainment of a stipulated result, or the
occurrence of a subsequent event. Furthermore, the
appraisal assignment was not based on a requested
minimum valuation, a specific valuation or the approval of
a loan.
(E)
The appraiser's analyses, opinions and conclusions were
developed, and this report has been prepared, in conformity
with the Uniform Standards of Professional Appraisal
Practice, and the requirements of the State of Florida for
state -certified appraisers.
(F) Use of this report is subject to the requirements of the State
of Florida relating to review by the Real Estate Appraisal
Subcommittee of the Florida Real Estate Commission.
(G) J. Mark Quinlivan has made a personal inspection of the
property that is the subject of this report.
(H) No one provided significant professional assistance to the
person signing this report.
QUINLIVAN APPRAISAL
1
As of the date of this report, J. Mark Quinlivan has completed the requirements
under the continuing education program for The Appraisal Institute.
Based on the inspection of the property and the investigation and analyses
undertaken, subject to the assumptions and limiting conditions set forth in the
Addendum of this report, I have formed the opinion, as of December 5, 1995, the
subject property has a Market Value of:
OFFICE Buffiu m
EXCESS LAND Sn
7-1
$2,200,000
$2,100,000
, _ ______
1 gARK Q AN, MAI
ATE CERTIFIED GENERAL APPRAISER
CERTIFICATION NUMBER: RZ0000112
QUINLIVAN APPRAISAL
SUMMARY OF SALIENT FACTS AND CONCLUSIONS
Purpose of Appraisal Market Value
Property Rights Appraised Fee Simple, subject to existing leases
Location 95 West McIntyre Street
Key Biscayne, Florida
Legal
Land Size
Improvements
Lengthy legal - A portion of Tracts 7
and 9, MATHESON ESTATES,
according to the Plat thereof, as
recorded in Plat Book 46, Page 86, of
the Public Records of Dade County,
Florida.
Office Site -
Excess Site -
50,506 Sq. Ft.
84,393 Sq. Ft.
Two-story office/bank building,
containing a rentable area of 17,177
sq. ft.
Age 1966
Zoning BU -1, Neighborhood Business District
Highest and Best Use Commercial usage
Estimated Land Value
Office Site $1,265,000
Excess Land $2,100,000
QUINLIVAN APPRAISAL
3
Date of Value Estimate December 5, 1995
Final Estimate of Value
Office Building
Excess Land Site
$2,200,000
$2,100,000
QUINLIVAN APPRAISAL
4
a
;
QUINLIVAN APPRAISAL
LOOKING EAST ALONG W. MCINT YRE STREET - SUBJECT PROPERTY TO LEFT.
LOOKING WEST ALONG W. MCINTYRE STREET - SUBJECT PROPERTY TO RIGHT.
QUINLIVAN APPRAISAL
QUINLIVAN APPRAISAL
LOOKING EAST ACROSS VACANT (EXCESS) LAND SITE FROM FERNWOOD DRIVE.
LOOKING SOUTH ALONG FERNWOOD DRIVE - VACANT LAND S1M TO LEFT.
QUINLIVAN APPRAISAL
QUINLIVAN APPRAISAL
INTRODUCTION
IDENTIFICATION OF THE PROPERTY
Office building containing approximately 17,177 square feet of rentable area and
excess land site containing 1.937 acres, more or less.
LOCATION
95 West McIntyre Street
Key Biscayne, Florida
PURPOSE AND DATE OF APPRAISAL
The purpose of this Appraisal is to estimate the Market Value of the property as
of December 5, 1995, being one of the dates of personal inspection.
FUNCTION OF APPRAISAL
The function of this appraisal is to aid in determining an acquisition price.
LEGAL DESCRIPTION
Lengthy legal. A portion of Tracts 7 and 9, MATHESON ESTATE, according to the
Plat thereof, as recorded in Plat Book 46, Page 86, of the Public Records of Dade
County, Florida.
See full legal description in Addendum of the report.
PROPERTY RIGHTS APPRAISED
The property is appraised in fee simple: a fee without limitations to any particular
class of heirs or restrictions, but subject to the limitations of eminent domain,
escheat, police power and taxation, as well as utility easements of record; and
subject to existing office tenant leases.
QUINLIVAN APPRAISAL
5
DEFINITION OF MARKET VALUE
Market Value means 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 is the consummation of a
sale as of a specified date and the passing of title from seller to buyer under
conditions whereby:
(1) buyer and seller are typically motivated;
(2) both parties are well informed or well advised and
acting in what they consider their own best interest;
(3) a reasonable time is allowed for exposure to the open
market;
(4) payment is made in terms of cash in U.S. dollars or
in terms of financial arrangements comparable
thereto; and
(5)
the price represents a normal consideration for the
property sold unaffected by special or creative
financing or sales concessions granted by anyone
associated with the sale.
QUINLIVAN APPRAISAL
6
ASSESSMENT AND TAXES -1995
The subject property is assessed under the jurisdiction of the Village of Key
Biscayne.
The assessment for the property is established each year as of January 1st by the
Dade County Property Appraiser's Office at 100% of "Just Value." Just Value has
been equated to Market Value less closing costs. While the State of Florida
requires real estate to be assessed at 100% of Just Value, in reality the ratio of the
assessed value to sales price is generally below 100%.
k
FOLIO
LAND
AS1
BUILDING
ASSN
TOTAL
ASSESSMENT
REAL ESTATE.
TAXES
24-2432-001-0070
$856,822
$504,864
$1,361,686
$31,186.67
24-2432-002-0170
$525,040
$0
$525,040
$12,007.40
24-2432-002-0172
$107,100
$0
$107,100
$ 2,469.17
24-2432-002-0173
$664,752
$0
$664,752
$15,170.98
OWNER OF RECORD AND ADDRESS
Key Biscayne Bank and Trust Co.
95 West McIntyre Street
Key Biscayne, Florida 33149-1845
FIVE-YEAR HISTORY OF TITLE
A review of the Public Records of Dade County indicates no sale transfers of the
subject property over the past five years.
QUINLIVAN APPRAISAL
7
....... ........ ..
..... ... .........
QUINLIVAN APPRAISAL
COUNTY DATA
Dade County - Location and Size
Dade County, which comprises the metropolitan area of Miami, is situated on the
southeast tip of the state of Florida. It is bordered on the east by the Atlantic
Ocean, on the west by Monroe and Collier Counties, on the north by Broward
County, and on the south by Monroe County (the Florida Keys).
Dade County, the largest county in area and population in the state of Florida,
covers an area of 2,054 square miles with an altitude ranging from sea level to 25
feet. Water covers 354 square miles of the County.
Although the County is relatively large, approximately half of the total area is
comprised of the Everglades, which is a natural area that will not be developed.
Therefore, only the eastern section of Dade County encompasses the area which
is currently developed or available for future development.
Dade County's location, its southern latitude and proximity to the Gulf Stream
provide for mild winters and pleasant summers.
Population
The state of Florida has increased rapidly in population from 6,791, 400 in 1970 to
9,740,000 in 1980 and 12,937,926 in 1990. The 1993 population of Florida was
estimated at 13,608,627.
Dade County's population increased from 1,626,000 in 1980 to 1,937,094 in 1990,
reflecting an average annual compounded growth rate of 1.77%, compared with
2.88% for the state of Florida. By 1993, Dade County's population increased to
approximately 1,951,116.
Dade County's population growth during the last four decades has been dramatic
especially in relation to national trends. From 1950 to 1990 the United State's
population increased by 60% while the population of Dade County has almost
quadrupled from 495,084 to 1,937,000. During this period, the state of Florida
was elevated from the 20th most populous state to the 4th in 1990.
The population growth rate in Dade County has shown greater fluctuations than the
national rates. The Dade County rate of population change was 84.9% during the
period 1940 to 1950; 88.9% from 1950 to 1960; 35.6% from 1960 to 1970 and
28.2% from 1970 to 1980. In the period from 1980 to 1990, the rate of population
change was 16%. The average annual change from 1988 to 1991 was
approximately 1.3%; there was a .05% drop from 1991 to 1993 due to Hurricane
Andrew of August 1992.
QUINLIVAN APPRAISAL
8
During the 1960's, the major increase in Dade County's population was due to the
large immigration of Cubans. Today, Cuban and other Spanish speaking people
comprise almost 50% of Dade County's population. The increase in Hispanic
population has had favorable effects on the local economy and has helped to create
a multi -national cultural environment in the area.
The recent influx of political and economic refugees from Cuba, Haiti and
Nicaragua has put an abnormal strain on public services and has affected the
population data in a dramatic manner. However, a recent increase in population
growth of people from Latin American, as well as from Europe and Canada,
coupled with the increases in population from those people leaving the northern
sections of the United States, indicate a positive prospect for the Dade County area
in the future.
The overall population of Dade County is well dispersed throughout the entire area,
yet has several key areas of concentration. During the 1960's, several sub -areas
accounted for approximately 70% of the growth. These areas include Hialeah,
northern Dade County, the Beach area, the Miami River area, the area southwest
of Miami International Airport, as well as the Kendall and Cutler Ridge areas. In
the first half of the 1970's, population growth continued in an uneven fashion
especially in the urban fringes.
Since 1970, approximately three -fourths of the total population growth for the
County has occurred in the unincorporated areas. The older centrally located cities
such as Miami, Miami Beach and Coral Gables have grown at modest rates from
1970 to 1990. Unincorporated Dade County has evidenced the most rapid growth
which continues to occur in areas in northeast Dade County, as well as the
currently expanding southwest area, especially in sections of Flagler Street, S.W.
8th Street and North Kendall Drive.
Population trends indicate that most of the population growth in Dade County
during the 1990's will occur in outlying areas such as North Miami Beach, the
Golden Glades area, the Kendall area west of the Florida Turnpike, the S.W. 8th
Street and Palmetto Expressway areas, the Hialeah -Miami Lakes area, as well as
those areas both east and west of U.S. Highway 1 between Sunset and Coral Reef
Drives, and Cutler Ridge and the Goulds area.
Employment Trends
The dominant characteristic of Dade County is that it is primarily trade and service
based. Personal, business and repair services have had a substantial increase in
importance in the economic base over the last decade. The major sectors of the
economy include services, wholesale and retail trade, transportation,
communications, public utilities, government and manufacturing. The most
QUINLIVAN APPRAISAL
9
dominant industries which form the County's economic base are construction and
tourism.
Tourism is Dade County's biggest industry with an estimated 11.6 million visitors
annually contributing to more than 50 percent of the area's economy. Aviation and
related industries are responsible for another large segment of the economy. The
garment industry ranks third in the nation after New York and Los Angeles. Table
1 shows the distribution of the non-agricultural work force in Dade County.
TABLE 1
ANNUAL AVERAGE NON-AGRICULTURAL EMPLOYMENT
1991, 1992 AND 1993
Assivi! : 'ION 0 Tno ANIQs
1991
1992
199
TOTAL ALL INDUSTRIES
855.5
857.4
894.5
MANUFACTURING
84.3
83.5
81.9
CONTRACT CONSTRUCTION
31.8
31.5
38.3
TRANSPORTATION, COMMUNICATION AND UTILITIES
70.4
66.6
72.1
TRADE
226.5
227.2
234.9
FINANCING, INSURANCE AND REAL ESTATE
64.7
63.3
63.1
SERVICE, MISCELLANEOUS AND MINING
254.2
258.3
275.3
GOVERNMENT
123.6
126.8
128.5
Source: Florida Department of Labor & Employment Security, Bureau of Labor Market Information
The largest employer in Dade County is the Dade County School Board, followed
by Metro -Dade County, Florida Power and Light Company, Southern Bell, Publix
Supermarkets, University of Miami, Burger King, Jackson Memorial Hospital,
Burdines Department Stores, and American Airlines.
Assuming additional importance is the growing prominence of Dade County as a
center for international trade, finance and tourism. The establishment of Miami
as the "Gateway of the Americas" should provide the area with a much needed
degree of economic diversification. This should enable Dade County to weather
slowdowns in the national economy by an increase of trade through the Port of
Miami, growth of international arrivals at the airport, opening of the Free Trade
Zone, and the substantial foreign investment in the local economy, particularly in
real estate.
QUINLIVAN APPRAISAL
10
Unemployment shows a major drop from the 10% average in 1992, to 8.4% in
June 1993, to 7.4% in December 1993 and 8.4% in April 1994, even though the
number of jobs in the County also fell. The volatility of the unemployment rate
is tied to a large degree to the construction industry. While construction has never
been among the county's employment leaders, lay-offs have had substantial effects
on employment in other construction -related industries, particularly within the
manufacturing category, which was the second hardest hit. The increases in the
unemployment rate from 1991 to 1992 were due to the loss of Eastern and Pan Am
Airlines, as well as major banks such as Southeast and Amerifirst.
Income
Over the past few years, the average per capita personal income in Dade County
has been slightly lower than the per capita income for Florida, as well as the
nation.
TABLE 2
PER CAPITA PERSONAL INCOME
SELECTED YEARS (CURRENT $)
Year . .
1989
1990 •
1991
1992 (PRELIMINARY)
UNITED STATES
17,738
18,635
19,091
19,841
FLORIDA
18,043
18,785
19,180
19,711
MIAMI PMSA
17,090
17,629
17,807
17,124
Source: U.S. Dept. of Commerce, Bureau of Economic Analysis - Statistical Abstract of the U.S.1993 and
Florida Department of Labor, Bureau of Labor Market Information
Table 3 reveals a steady increase in the number of tourists visiting Dade County
since 1984. From 1984 to 1985, the number of international visitors had decreased
while the number of domestic visitors increased. The decline of international
visitors to Dade County in the mid 1980's is attributable to negative exchange rates
for Latin American currencies. However, the number of international visitors
increased 220% from 1985 to 1993. Due to the soft domestic economy, the
number of domestic visitors has declined since 1989.
QUINLIVAN APPRAISAL
11
TABLE 3
ESTIMATES OF DADE COUNTY TOURIST TRENDS
.I1 N€ATIONA
DOMEIMC
TOTAL :.
1984
1,703,354
3,556,067
5,259,421
1985
1,671,972
3,740,000
5,411,972
1986
2,069,545
4,086,282
6,155,827
1987
2,173,125
4,546,670
6,719,795
1988
2,478,792
4,680,427
7,159,219
1989
2,894,000
4,823,400
7,717,400
1990
3,455,000
4,617,500
8,072,500
1991
4,024,558
4,377,442
7,717,500
1992
4,673,600
3,823,800
8,497,400
1993
5,400,000
3,400,000
8,800,000
Source: Greater Miami Convention and Visitors Bureau, Tourism Facts and Figures
Table 4 shows that the bulk of international visitors to Dade County originate from
Central and South American Countries (48% in 1993), followed by European
Countries (23.2% in 1993) and Caribbean Countries (15.2% in 1993). England
and Germany accounted for the largest proportion of European visitors.
In 1993 there were a total of 3,049,568 passengers passing through the Port of
Miami and 28,655,382 through Miami International Airport. During 1993, the
number of Port of Miami passengers decreased 1.5% from 1992, and Miami
International Airport increased 8.2% from 1992. The lower 1992 figure reflects
the lag in air travel during the period immediately after Hurricane Andrew of
August 1992.
QUINLIVAN APPRAISAL
12
TABLE 4
ESTIMATES OF INTERNATIONAL VISITORS BY REGION
.0010N . ..
. 1992
1993
EUROPEAN COUNTRIES
26.8%
23.2%
CARIBBEAN COUNTRIES
11.5%
15.2%
CENTRAL AMERICAN COUNTRIES
11.7%
13.0%
SOUTH AMERICAN COUNTRIES
37.3%
34.8%
CANADA
10.1%
11.1%
OTHER COUNTRIES
2.6%
2.7%
TOTAL
100%
100%
Source: Greater Miami Convention and Visitors Bureau, Tourism Facts and Figures
There are an estimated 50,502 motel and hotel rooms in Dade County. The hotel -
motel occupancy rate for 1993 of 71.1% was above the rates for 1991, 69.9% and
1990, 70.9%. 1992 enjoyed an average occupancy rate of 75.3% mainly due to
Hurricane Andrew. The 1992 occupancy rate excluding hurricane -related relief
workers was 67.1%.
Dade 1HSnancial Resources
Dade County's financial resources are strong, with Miami claiming more Edge Act
Banks than any other city in the United States, except New York. Foreign banks
are permitted to conduct business in Florida, and currently approximately 60
international banks have offices in Miami.
Banking and Finance Operations in Dade County include approximately 525 bank
and savings and loan association facilities with approximately 25,000 employees.
While the savings and loan associations and banks have suffered financial losses
due to the softening real estate market, there have been intrastate and interstate
mergers of distressed financial institutions which benefit the industry over the long
term.
QUINLIVAN APPRAISAL
13
Transportation
Dade County has an extensive expressway system with access to all points in the
County. However, due to the rapidly increasing population, some of the
expressways, especially I-95, are becoming overburdened. In 1984 Dade County
completed a 20.5 mile elevated rapid transit system. This system extends southward
from downtown Miami to Dadeland, paralleling U.S. Highway 1 and northwesterly
from downtown Miami to Hialeah. In conjunction with this system, there is a
downtown people mover system which encircles the central business district of
Miami and extends south to the Brickell area and north to the Omni area.
Dade County is served by the CSX and Florida East Coast Railroads for freight
and Amtrak Rail, Greyhound and Trailways Interstate bus lines for passenger
service.
Miami International Airport, one of the nation's largest and busiest, has
approximately 28.6 million arrivals and departures annually. Moody's Investor
Service, a major bond -rating company, recently ranked the airport Aa (the second
highest rating an airport can enjoy). Only Los Angeles International Airport shares
this ranking; no U.S. airport has ever attained the highest ranking of Aal.
According to Moody's, a key factor in the ranking is the airport's "market value
as an international gateway with its own strong organization -and -destination base".
The airport is currently undergoing a $2.5 billion expansion.
Miami has become a port of embarkation for airlines and ships bound for Central
and South American Countries. The Port of Miami, besides being the largest
passenger port in the nation, is also important as a cargo center with annual
tonnage of approximately 1,221,712.
Miami's comprehensive transportation system and its strategic location have
enabled it to become an important international transportation center, providing
commercial access to Latin America and the Caribbean.
Government
Dade County is comprised of unincorporated areas, as well as twenty-seven
municipalities, the largest of which is the city of Miami.
Dade County is governed under a modified two-tier metropolitan government. The
purpose of this type government was to establish one governing body for the
county, and to establish one supply of services such as fire, police, etc. for the
county. The upper tier is the County, which provides broad "regional" or county
functions, such as metropolitan planning, welfare, health and transit services. The
QUINLIVAN APPRAISAL
14
twenty-seven municipalities represent the lower tier of government, providing a
varying array of services within their jurisdictional boundaries. The County also
maintains lower tier functions, such as the provision of municipal -type services,
including police and fire, to the unincorporated areas and certain municipalities on
a negotiated basis.
The County operates under the Commission -Manager form of government.
Legislative and policy -making authority is vested in the elected thirteen -member
Board of County Commissioners; the Commission appointed County Manager is
the chief administrator. Dade County has operated under the metropolitan form of
government since 1957, when the Home Rule Charter was passed by the local
electorate. Prior to Home Rule, the County had to rely on the State Legislature for
the enactment of its laws.
County government had not been able to respond to the tremendous demand for
municipal services in this rapidly urbanizing area, which is larger than the State of
Rhode Island or Delaware. The need to combine services duplicated by the County
and numerous cities was also clearly evident. The Charter permitted the limited
County government to reorganize into a general purpose "municipal -type"
government capable of performing the full range of public functions into an area
wide operation.
Real Estate
As of March 1994, the Dade County Office Market contained approximately 32.7
million square feet of office space. Approximately 34% of this space is located in
the Miami central business district and adjacent Brickell Avenue.
There was a decrease in the occupancy rate of office buildings in Dade County
from 92% in 1981 to 77.6% in 1991. In 1992, there was an increase in
occupancy to 81.4% and to 82.6% in 1993. There is an estimated three to four
years supply of office space. Due to the oversupply of space, many rental
concessions have been given to tenants. Since there has been little new
construction, the office market should improve in the next few years.
Office rental rates in new buildings typically range from $14.00 to $24.00 per
square foot. The low end of the range is for office space in the suburban markets.
The upper end of the range is for first class office space in Downtown Miami,
Brickell Avenue, Coconut Grove and Coral Gables.
QUINLIVAN APPRAISAL
15
The Greater Miami Industrial Market, as of December 1993, consisted of
approximately 137,000,000 square feet of industrial space. The approximate
percentage location of this space is as follows:
MARKET AREA .. . . .. • ••
% OF TOTAL MARKET
• SPACE
AIRPORT WEST
27%
HIALEAH /M EDLEY
18%
AIRPORT EAST
15%
OPA LOCKA
14%
MIAMI LAKES/NORTH DADE
12%
SOUTH DADE
4%
OTHER
10%
TOTAL
100%
The major use of industrial space is warehousing/distribution which accounts for
approximately 65% of the occupied space. Manufacturing and high technology
occupy the remainder of the space accounting for approximately 25% and 15% of
the industrial space, respectively.
The Miami Industrial Market experienced a gradual increase in the vacancy factor
in the first three years of the 1980's. In 1983, Miami experienced a sharp increase
in the vacancy factor with the county's occupancy falling from a high of 98% in
1980 to 85% in 1983. This sharp decrease was due to an oversupply of industrial
space and a ten-year low absorption rate of 500,000 square feet. The heightened
economic crisis in Latin America, causing a contraction of the import/export
business, was also a major factor to the increase in vacancy rate. During 1986 and
1987, the county's occupancy rate rebounded to approximately 90%. The vacancy
rate for the overall Dade County industrial market for June 1993 was 7.4%.
Industrial rental rates generally range from $3.00 to $6.75 per square foot. The
median sale price per square foot in 1989 for industrial space in Dade County was
$31, and by 1993 it had decreased to $26.29 per square foot, the latter is an
increase of $2.29 per square foot over 1992's median sale price.
It is forecasted that the Dade County industrial market will be an area of slow
growth and moderate absorption. The Airport West area is expected to experience
the most growth due to its central location and availability of land.
QUINLIVAN APPRAISAL
16
Vacancy rates will remain fairly constant. "Flex -Space" projects will continue to
show growth and moderate absorption. The Airport West, North Dade and
Hialeah/Medley markets will remain the most active.
The number of single family residential permits increased from 7,000 in 1987 to
8,200 in 1988, a 17% increase. However, the number of permits dropped from
8,500 in 1989 to 4,200 in 1991. In 1993, 5,540 permits were issued, up 10.4%
over 5,020 in 1992. Multi -family permits declined from a high of 12,375 units in
1989 to 2,581 units in 1992, a significant drop. Permits for 3,213 multi -family
units were issued in 1993, up 24.5% over 1992, the first annual increase after
several consecutive years of decline. The average sale price of a new residence in
Dade County in 1993 was $131,061 up from $120,699 in 1990.
According to data from the Department of Business and Professional Regulation,
Dade County has approximately 220,475 licensed rental apartment units, as of
April 1994. Reinhold P. Wolff Quarterly Housing Report shows a vacancy rate
of 3.3% in February of 1994, an increase of 1.9% over the same period in 1993.
The vacancy rate has been declining steadily since 1991, but the decline accelerated
after August 1992; this is attributable to Hurricane Andrew. Many of the
hurricane's victims have since returned to their now habitable houses, hence the
increase in 1994. The vacancy rate is expected to increase to at least 5% over the
next year. New suburban rental apartments have average rental rates of $611 per
month for a one bedroom apartment and $768 per month for a two bedroom
apartment.
The condominium apartment market experienced an all-time high inventory of
15,722 units in October of 1986. The inventory has decreased to 5,342 units as
of February of 1994. The high inventory caused the average sale price of a new
condominium unit to decline from $112,604 in 1982 to $87,990 in 1987.
However, the average sale price increased dramatically to $162,752 in 1991, but
declined slightly to $141,069 in 1993.
The Dade County retail market contains approximately 49.5 million square feet in
buildings over 20,000 square feet. The major retail markets in Dade County
include Hialeah, Coral Gables/South Dade and Kendall. Rental rates typically
range from $8.00 to $20.00 per square foot. Rental rates are down from
1989/1990. The overall Dade County vacancy rate for 1993 was approximately
12%. The vacancy level is lowest in super regional malls and highest in
unanchored strip centers. The vacancy rate increased slightly from 1989/1990 due
to over building.
QUINLIVAN APPRAISAL
17
Conclusions
In the future, one of the principal growth areas for Dade County is expected to be
the international sector. Dade County, because of its geographic location and
excellent transportation facilities, is well -suited to attract both businessmen and
tourists from Latin America. It is already one of the principal shopping markets for
Central and South Americans visiting the United States and one of the principal
export points for goods and services destined for Latin America.
A major consideration to future real estate development in Florida will be
compliance with the new State's concurrency law mandated by the Growth
Management Act. This law requires developers to build sufficient infrastructure.
Concurrency requires that basic facilities and services be in place or the money to
build the same be available before the construction of new development is granted
approval.
The existence of major financial institutions, retail outlets, corporations and other
business entities, coupled with its geographic location, transportation systems and
planned international trade centers give Dade County an excellent opportunity for
continued growth as an international center.
QUINLIVAN APPRAISAL
18
NEIGHBORHOOD DATA
The subject property is located within the Village of Key Biscayne in Metropolitan
Dade County, Florida.
Key Biscayne is an island located south and east of the City of Miami. The east
side of Key Biscayne fronts along the Atlantic Ocean. The west side of Key
Biscayne fronts on Biscayne Bay. Access to Key Biscayne is via the Rickenbacker
Causeway. The Rickenbacker Causeway is a four lane divided road that crosses
three fixed bridges. Key Biscayne was a part of tho unincorporated area of Dade
County until June of 1991 when it became incorporated.
Key Biscayne is approximately four miles in length and approximately one mile in
width. The north end of Key Biscayne contains Crandon Park, a Dade County
public park.
Cape Florida State Park occupies the southern end of the key. This park has been
left primarily in its natural state with beaches along the Atlantic Ocean.
The center part of the island is comprised of single family residences, multi -family
apartments, hotels and commercial facilities.
Large ocean fronting condominiums located east of Crandon Boulevard include
Commodore Club (570 units), Towers of Key Biscayne (538 units), Mar Azul (127
units), Casa del Mar (237 units), The Sands (120 units), and Key Colony (1,050
units).
The area west of Crandon Boulevard is comprised of single family residences. The
majority of these homes were constructed in the early 1950's. Sale prices of these
homes range from $200,000 to $350,NI. Cape Florida, a water fronting
subdivision of newer single family residences, located at the south end of the center
section, has sale prices ranging from $500,000 to $2,000,000.
The west side of Crandon Boulevard between Harbor Drive and West Mashta
Drive, contains commercial properties. These properties include shopping centers
(Harbor Plaza, Key Biscayne Shopping Center, The Square at Key Biscayne and
L'Esplanade), service stations, restaurants, bank/savings and loan, and office
buildings.
Key Biscayne experienced a high growth rate during the early and mid -1970's.
During these years, Key Biscayne grew in population at an annualized rate of
9.2%. The current full-time population on Key Biscayne is estimated to be 9,000.
QUINLIVAN APPRAISAL
19
-111111111.—
WEST 1 �� `"
POINT s�.
HEATHER LA
PALM
BAY LAWOOIZA
MATHESON DR
MAS HTA
ISLAND.
QUINLIVAN APPRAISAL
During 1980-1985, the growth rate of Key Biscayne had declined sharply.
Accordingly, there was a decrease in demand for residential and commercial
properties with a decline in values over these years. However, during the later
part of the 1980's and early 1990's, the values of residential properties have risen
rapidly.
At this time, the island is almost entirely developed except for two multi -family
residential sites (the former Key Biscayne Hotel site and the Sheraton Royal
Biscayne Hotel site) which are currently undergoing development.
QUINLIVAN APPRAISAL
20
QUINLIVAN APPRAISAL
SITE DATA
Dimensions and Shape:
The total site is generally rectangular in shape.
The site fronts 268.9 feet, more or less, along the west side of Crandon Boulevard
with a depth westerly of 260 feet, more or less, along the north side of the West
McIntyre Street and a depth of 440.43 feet, more or less, along the north property
line.
:
Office Site 50,506 sq. ft., or 1.160 acres
Excess Land Site 84,393 sq. ft., or 1.937 acres
Source: Boundary survey prepared by James Aylward & Assoc., Inc., dated 5/5/94.
Topography and Drainage:
The site is level and approximately at street grade.
Flood Zone:
Map N° 125098 0281 F
"AE" Base flood elevations determined (9 - 10 feet)
Soil and Subsoil:
The immediate area of the subject site appears to have no unusual soil or subsoil
conditions. Unusual conditions would be brought out by test borings.
Utilities:
Water: Miami -Dade Water and Sewer Authority
Sewer: Miami -Dade Water and Sewer Authority
Electricity: Florida Power & Light Company
Telephone: Southern Bell Telephone Company
QUI.NLIVAN APPRAISAL
21
wf
PORTION OF TRACT 4 (34-34)
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CHECKED v4
APPRONED�.
PROJECT NAME:
KEY BISCAYNE BANK
S HEET TITLE
BOUNDARY SURVEY
J ARMO AYLWARD C AMOQ. INC.
C ONIUL TIN 0 117511452 051. LA ND 1UMTtY OR1. ►I JU5NLR 1
153 27 N .W. 50114 *SU4Ut . 11001[ 3441
MIAMI t.A KCS.. FLO0DA 3 301 4
(305) 117-391•
COM.M C11 5511 7 0t�
.031 25011 ,
WOK 031 25T0 fn O.1
DATE:
SCALE :
PROD. NO. : M -„o
SHEET
1
1
Street Improvements:
Crandon Boulevard is asphalt paved with a dedicated width of 120 feet. Crandon
Boulevard contains two northbound and two southbound lanes with a landscaped
median. There are sidewalks, curbs, and street lighting along this roadway.
W. McIntyre Street is asphalt paved with a dedicated width of 50 feet. W.
McIntyre Street contains one east bound and one west bound lane.
Fernwood Road is asphalt paved with a dedicated width of 50 feet. Fernwood
Road contains one north bound and one south bound lane.
QUINLIVAN APPRAISAL
22
QUINLIVAN APPRAISAL
ZONING
Under Ordinance of Village of Key Biscayne.
Classification: BU -1 Neighborhood Business District
The purpose of the district is to provide for retail and service convenience facilities
which satisfy the essential and frequent needs of the adjacent residential
neighborhood.
Permitted Uses include antique shops, apparel stores, art stores, banks, beauty
parlors, bakery shops, barber shops, bicycle shops, ice cream shops, drugstores,
grocery stores, hardware stores, jewelry stores, leather shops, newsstands, office
buildings, paint stores, restaurants, schools, shoe stores, sporting goods stores,
tailor shops, tobacco shops, and variety stores.
Building Regulations
Maximum Floor Area Ratio: .40 at one story increased .11 for
each additional story
Maximum Building Height: Two stories and 35 feet
Minimum Open Space:
Up to one acre - 18% of lot area
One to five acres - 16% of lot area
Five to 20 acres - 14% of lot area
More than 20 acres - 12% of lot area
QUINLIVAN APPRAISAL
23
Offstreet Parking:
Commercial -
Restaurants -
one space per 300 square feet
one space per 50 square feet of
dining area and one space per four
employees
Office - one space per 400 square feet
Building Setbacks:
Front -
Side and rear -
Minimum Lot Frontage:
Old subdivision -
New subdivision -
Minimum Lot Area:
Old subdivision -
New subdivision -
20 feet
10% of lot width greater than five
feet, but not to exceed 7.5 feet
50 feet
50 feet and 75 feet for corner site
5,000 square feet
5,000 square feet and 7,500 square
feet for corner site
Maximum Lot Coverage: 40%
QUINLIVAN APPRAISAL
24
QUINLIVAN APPRAISAL
HIGHEST AND BFST USE
Fundamental to the concept of value is the theory of highest and best use. Land is
valued as if vacant and available for its highest and best use.
The Appraisal Institute in The Appraisal of Real Estate, Ninth Edition, defines
highest and best use as follows:
The reasonably probable and legal use of vacant land or an improved property,
which is physically possible, appropriately supported, financially feasible, and
results in the highest value.
Land has limited value unless there is a present or anticipated use for it; the
amount of value depends on the nature of the land's anticipated use, according to
the concept of surplus productivity. Among all reasonable, alternative uses, the
use that yields the highest present land value, after payments are made for labor,
capital, and coordination, is generally regarded as the highest and best use of the
land as though vacant.
The highest and best use of a property as improved refers to the optimal use that
could be made of the property including all existing structures. The implication
is that the existing improvement should be renovated or retained as so long as it
continues to contribute to the total market value of the property, or until the return
from a new improvement would more than offset the cost of demolishing the
existing building and constructing a new one.
In estimating the highest and best use there are essentially four stages of analysis:
1. Possible Use. What uses of the site being appraised are physically
possible?
2. Permissible Use (Legal) What uses are permitted by Zoning and
Deed Restriction, if any?
3. Feasible Use. Which possible and permissible uses will produce a
net return to the owner of the site?
4. Maximally Productive. Among feasible uses, which use will
produce the highest net return to the owner of the site?
QUINLIVAN APPRAISAL
25
The highest and best use of the land (or site), if vacant and available for use, may
be different from the highest and best use of the improved property. This is true
when the improvements are not an appropriate use, but make a contribution to the
total property value in excess of the value of the site.
The following four point test must be met in estimating the Highest and Best Use.
The use must be legal. The use must be probable, not speculative or conjectural.
There must be a profitable demand for such use and it must return to the land the
highest net return for the longest period of time.
These tests have been applied to the subject property. In arriving at the estimate
of Highest and Best Use, the subject site was analyzed as vacant and available for
development, and as improved.
Possible Use
The total site has approximately 268 feet of frontage on Crandon Boulevard and
frontage W. McIntyre Street and Fernwood Road. Therefore, the subject site has
adequate access and good exposure on a major traffic artery.
The subject site is generally rectangular in shape, having good functional utility.
All necessary utility services are available along existing street right-of-ways. The
site is filled to street grade and does not appear to have any drainage or subsoil
deficiencies.
The total site is approximately 134,899 square feet in size, which equates to 3.097
acres. The size of the subject site would allow many uses.
The physical characteristics of the subject site would not restrict any residential or
commercial use of the site.
Permissible Use
Permissible or legal uses are those uses which are permitted by zoning or deed
restrictions. There are presently no known private deed restrictions of record.
The subject site is zoned for business use. The zoning of the site permits retail and
service establishments, offices and restaurants.
QUINLIVAN APPRAISAL
26
Feasible Use/Maximally Productive Use
The physical characteristics and zoning of the subject property permit a wide range
of potential uses. The possible and permissible uses of the subject site include
retail and service establishments, offices and restaurants.
Properties similar fronting along the west side of Crandon Boulevard include
shopping centers, service stations, restaurants, bank/savings and loan associations
and office buildings. These commercial facilities are retail and service
establishments serving the needs of the residents of Key Biscayne.
In 1980 and 1981, two shopping centers were constructed on Key Biscayne. The
Square at Key Biscayne, located northerly of the subject property, contains
approximately 50,400 square feet.
L'Esplanade, located at the south end of Key Biscayne, contains approximately
32,400 square feet. Both shopping centers were marketed as condominiums.
Many of the stores in L'Esplanade have been foreclosed and few units are occupied
in this center. The Square at Key Biscayne originally experienced a high number
of vacancies, but is currently 100% occupied, A large part of L'Esplanade's
problems were caused by its interior mall design and non-commercial location as
well as the downturn of the real estate market on Key Biscayne.
In 1990, the English Pub property was removed and replaced with a two-story
shopping center known as Key Biscayne Galleria. This building contains
approximately 52,000 square feet.
There are three office buildings on Key Biscayne which contain a total of
approximately 80,000 square feet. The demand for office space is somewhat
limited. Due to Key Biscayne's isolated location, office users are primarily Key
Biscayne residents. The occupancy rate for the Dade County office market is
estimated to be 78%.
Conclusion (As If Vacant)
Based on the above factors, it is the appraiser's opinion that the Highest and Best
Use of the site, as if vacant, is for commercial usage.
QUINLIVAN APPRAISAL
27
Highest and Best Use, As Improved
The south 1.16 acres of the site is improved with a two-story office/bank building.
The building was constructed in 1966 and is in average to good condition.
The building is 100% occupied. A large percentage of the building has been
occupied by Key Biscayne Bank since the completion of the building in 1966.
The design, layout and construction of the building is in conformity with other
office buildings of similar age.
Based on the above factors, it is the appraiser's opinion that the existing office
building represents the Highest and Best Use of the south 1.16 acres of the site.
QUINLIVAN APPRAISAL
28
QUINLIVAN APPRAISAL
DESCRIPTION OF IMPROVEMENTS
Age and Condition
According to the Public Records of Dade County, the building improvements were
constructed in 1966. From personal inspection of the property, it appears to be in
average to good condition.
Description
The subject site is improved with a two-story office/bank building. The building
is rectangular in shape running parallel to West McIntyre Street.
The first floor of the building contains Key Biscayne Bank, the Village of Key
Biscayne and a real estate office. There is an elevator in the front center of the
building providing access to the second floor. On the west end of the building is
a drive-thru teller for Key Biscayne Bank. The bank space is of good quality
construction.
The second floor of the building contains the former Trust office and
computer/operations department for Key Biscayne Bank, a law office, an
investment company and the administrative offices for the Village of Key Biscayne.
There are four restrooms on the second floor.
There is asphalt paved parking along the front and east side of the building, with
the majority of the parking spaces in the rear (north side) of the building. There
are a total of 65 parking spaces. There is an additional parking area with 28
parking spaces located northeast of the office building, which is considered as part
of the excess land site.
Size
Gross Building Area 18,039 Square Feet
Rentable Area 17,177 Square Feet
Details of Construction
Foundation: Steel reinforced poured concrete spread
footings in excavation trench
QUINLIVAN APPRAISAL
29
Exterior Walls: 8" concrete block stucco -painted and
brick
Windows: '/ " fixed plate glass in aluminum frame
Roof: Flat, built-up composition (re -roofed
approximately three years ago)
Interior Walls: Plaster and Drywall, painted or
wallcovering; wood paneling
Ceiling: 2' x 2' and 2' x 4' acoustical tiles in
suspended metal grid
Floors: Carpet, tile and vinyl tile in offices and
hallways, ceramic tiles in restrooms; all
over poured concrete slab
Lighting: Recessed fluorescent fixtures
Equipment and )Mures
Central Air conditioning and heat
One elevator (2,500 lb. capacity)
The bank equipment is considered personal property and is not included in this
report.
Site or Yard Improvements
Asphalt paved parking
Landscaping
QUINLIVAN APPRAISAL
30
WEST 148.03'
131.00'
EXIST BUILDING
FINISH fLOOR EL. 6.44
h
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EXIST. 8' BRICK WALKWAY ,,;
0 t
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r EXIST ASPHALT PAYEMENT)
C8.
MN.
CE
QUINLIVAN APPRAISAL
QUINLIVAN APPRAISAL
SCOPE OF THE APPRAISAL
The appraisal of real estate is generally valuated by means of one or more of the
following approaches:
(1) The Cost Approach
(2) The Income Approach
(3) The Sales Comparison Approach
The Cost Approach
In the Cost Approach, land and building are valued as though they were separate
entities. The land value is first estimated as if vacant. Then, by consulting various
cost services, local building contractors and by knowledge of construction costs,
an estimate of the replacement cost new of the building is determined. Accrued
depreciation from all sources including physical deterioration, functional and
economic obsolescence must be deducted from this cost. The estimated land value
is then added to the depreciated cost of the building to give the "depreciated
replacement cost" of the property.
The Cost Approach is based on the premise that the value of a thing tends to be set
by the cost of acquiring an equally desirable substitute. Applied to real estate, the
assumption is that a person would not likely pay more for a property than it would
cost him to acquire a suitable site and place an equally desirable building upon it.
Costs would include direct cost of construction, indirect costs such as financing
costs, land and developer's profit.
In this report, sales of vacant land within the Village of Key Biscayne were
gathered and analyzed. The sales information was gathered from various sale
services and verified through Public Records and/or with a party to the transaction,
when possible. The subject property is divided into two parcels; the site on which
the building is located and the adjacent excess land site. The land value of each
parcel is estimated separately.
The cost new estimate was based on information from Marshall Valuation and cost
comparables. In this situation, depreciation was based on an age/life method and
an abstraction from comparable sales.
QUINLIVAN APPRAISAL
31
Income Approach
The Income Approach is based on the premise that the value of a property may be
determined by the amount of net income it can reasonably produce over its
remaining economic life. The rationale of the approach is that the present worth
of a future income stream is equivalent to the value of the property which produces
that income.
Four basic steps comprise the Income Approach:
(1) Estimate the reasonable expectable annual gross income the
property will likely produce.
(2) Deduct an allowance for vacancy and collection loss to arrive at
the effective gross income.
(3) Deduct the annual expense of operation from the effective gross
income to arrive at the annual net income.
(4) Capitalize the annual net income into an indication of value.
The subject property is currently 100% occupied. Therefore, only a Stabilized
Market Value was estimated based on a direct capitalization method.
In this section of the report, a comprehensive market rent survey was conducted
in order to estimate the Market Rent for the subject property and to estimate a
stabilized occupancy rate.
A partial rent roll of the subject property was reviewed and analyzed. However,
no actual leases or expense information was provided to the appraiser. If these
items are provided to the appraiser at a later date and differ from the estimates in
this report, the appraiser reserves the right to modify the final value estimate.
After deducting the operating expenses from the effective gross income, the net
operating income is capitalized by an overall rate abstracted from comparable sales
and a Band of Investment method.
QUINLIVAN APPRAISAL
32
The Sales Comparison Approach
The Sales Comparison Approach is an attempt to measure the reactions of typical
buyers and sellers. In this approach, a direct comparison is made between the
property being appraised and comparable properties which have sold recently.
These sales are compared for degrees of comparability such as location, size, age,
zoning, time, the conditions of sale, financing and other pertinent data which would
affect value. Adjustments are made for these factors in order to arrive at a reliable
estimate of value.
In this report, sales of office buildings in the subject and competitive locations
were gathered and analyzed. Comparable locations were considered to be near
downtown Miami, the Coral Way and the Coral Gables market areas.
Reconciliation
After applying the three approaches, three separate indications of value will be
obtained. The indicated values obtained from each approach must be correlated
into one final conclusion of value. Usually one approach will be considered more
significant than the rest, either because of the reliability of the data, or because of
the type of property involved. Reconciliation is the process by which each
approach is objectively weighted according to its importance.
QUINLIVAN APPRAISAL
33
QUINLIVAN APPRAISAL
LAND VALUE
A land value estimate is concluded by comparing the subject site to comparable
land sales. Generally, the comparable land sales are adjusted by time, property,
and location to indicate the Market Value of the subject site as though unimproved.
This process is known as the Direct Sales Comparison Method.
The Direct Sales Comparison Method is a process of analyzing sales of similar
recently sold land parcels in order to derive an indication of the most probable
sales price of the site being appraised. The reliability of this approach is dependent
upon the availability of comparable sales data, the verification of the sales data, the
degree of comparability and the absence of non -typical conditions affecting the
sale.
The following pages contain sales of similar land sites which have recently sold.
Several other sales were considered by the appraisers, but were not included
because there was too wide a difference in physical factors, location and time.
In comparing the sales to the subject, consideration was given to factors of time,
location, property characteristics, and terms and conditions of the sale.
As indicated previously, the commercial area of Key Biscayne is located primarily
on the west side of Crandon Boulevard between Harbor Drive on the north and
West Mashta Drive on the south, a distance of approximately one mile. This is a
relatively small commercial area with few recent land sales. Because there have
been few recent commercial land sales on Key Biscayne, the appraiser has included
older commercial land sales on Key Biscayne and two current land listings.
Sale 1 is located on Crandon Boulevard at West Mashta Drive, approximately three
blocks south of the subject property. This 20,150 square foot site sold in
December of 1986 for $641,000, or $31.81 per square foot. There is a former
service station on this site which has been closed for approximately 10 years. The
building is currently being utilized by a florist/plant shop. The property was
purchased based on land value only. This site is smaller than the subject site.
Generally, a smaller site will sell at a higher per unit price.
Sale 2 is located on Crandon Boulevard, approximately two blocks north of the
subject property. This 129,486 square foot site sold in June of 1989 for
$2,900,000 (after reduction for trade name, goodwill, liquor license and
memorabilia of the former English Pub restaurant), or $22.40 per square foot.
This site contained the Jamaican Inn/English Pub restaurant at the time of sale.
This building was removed and replaced with a two-story shopping center. This
site is similar in size and zoning. The subject site's corner location is considered
slightly better in location.
QUINLIVAN APPRAISAL
34
Sale 3 is located on Crandon Boulevard, approximately five blocks north of the
subject property. This 14,260 square foot site sold in November of 1993 for
$430,000 or $30.15 per square foot. This site is currently vacant. It is the former
site of a Texaco Service Station. Similar to Sale 1, this site is smaller in size and
would tend to sell at a higher unit price.
Sale 4 is located on Crandon Boulevard, approximately adjacent to the north of the
subject property. This 9.495 acre site sold in February of 1994 for $9,099,700 or
$22.00 per square foot. This vacant site was purchased by the Village of Key
Biscayne for a park.
Sale (Listing) 5 is a current listing of a 1.41 acre site located on Crandon
Boulevard, approximately four blocks north of the subject property. This site is
listed for sale at $2,150,000 or $35.00 per square foot. This site is similar in size
and zoning. The subject site's corner location is considered slightly better than the
location of this site.
Sale (Listing) 6 is a current listing of the Sale 1 property. This 20,150 square foot
site is listed for sale at $1,150,000 or $57.07 per square foot.
A detailed breakdown of each sale, a plat and photograph of each sale, a summary
of the sales, a sales map and a value conclusion follows herein.
QUINLIVAN APPRAISAL
35
LAND SALE 1
DATE:
PRICE:
TYPE INSTRUMENT:
RECORDATION:
FOLIO NUMBER:
GRANTOR:
GRANTEE:
LEGAL:
LOCATION:
SITE DESCRIPTION:
Dimensions:
Size:
Zoning:
Current Use:
UNIT PRICE:
FINANCING:
VERIFICATION:
December 15, 1986
$641,000
Special Warranty Deed
O. R. Book 13118, Page 1192
30-5205-001-0100
Exxon Education Foundation
Nomar Investments, N.V.
Lengthy legal - A portion of Tract D,
BISCAYNE KEY ESTATES, as recorded
in Plat Book 50, Page 61, of the Public
Records of Dade County, Florida.
800 Crandon Boulevard
Key Biscayne, Florida
Irregular
20,150 Square Feet
0.463 Acres
BU -1, Neighborhood Business
Florist shop (former service station)
$31.81 per Square Foot
Acquisition loan of $650,000 with
Creditbank. No effect on sale price.
Verified with Mr. Edward London,
Real Estate Broker by J. Mark
Quinlivan, MAI
QUINLIVAN APPRAISAL
36
REMARKS:
An older service station which is
presently used as a flower shop is
located on this site. Said improvements
are considered to contribute no value to
the purchase price.
QUINLIVAN APPRAISAL
37
LAND SALE 2
DATE:
PRICE:
TYPE INSTRUMENT:
RECORDATION:
FOLIO NUMBER:
GRANTOR:
GRANTEE:
LEGAL:
LOCATION:
SITE DESCRIPTION:
Dimensions:
Size:
Zoning:
Current Use:
UNIT PRICE:
FINANCING:
VERIFICATION:
June 15, 1989
$2,900,000
Warranty Deed
O. R. Book 14174, Page 2742
30-4232-002-0132
Key Biscayne Enterprises, Inc.
Fernway Builders, Inc.
Lengthy legal - A portion of Tracts 3
and 5, MATHESON ESTATES, as
recorded in Plat Book 46, Page 86, of
the Public Records of Dade County,
Florida.
320 Crandon Boulevard
Key Biscayne, Florida
Irregular
129,486 Square Feet
2.973 Acres
BU -1, Neighborhood Business
Shopping center
$22.40 per Square Foot
Cash to seller. No effect on sale price.
Verified with Mr. Don Berg, Grantor
by J. Mark Quinlivan, MAI
QUINLIVAN APPRAISAL
38
REMARKS:
The indicated purchase price was
$3,000,000 for the real estate and
English Pub business to include trade
name, goodwill, liquor license and
memorabilia with an allocated value of
$100,000.
At the time of sale, there was an older
commercial building containing 11,725
square feet used as a restaurant and
liquor store located on the site.
Subsequent to the sale, said
improvements have been removed and
a 52,000 square foot two-story shopping
center has recently been constructed on
the site. The shopping center is known
as Key Biscayne Galleria.
QUINLIVAN APPRAISAL
39
LAND SALE 3
DATE: November 29, 1993
PRICE: $430,000
TYPE INSTRUMENT: Special Warranty Deed
RECORDATION: O. R. Book 16012, Page 2541
FOLIO NUMBER: 24-4232-002-0010
GRANTOR: Service Station Holdings, Inc.
GRANTEE: Key Associates, Inc.
LEGAL: Portion of Tract 1, MATHESON
ESTATES, according to the plat thereof,
as recorded in Plat Book 46, Page 86,
of the Public Records of Dade County,
Florida.
LOCATION: 38 Crandon Boulevard
Key Biscayne, Florida
SITE DESCRIPTION:
Dimensions: Irregular
Size: 14,260 Square Feet
.33 Acre
Zoning: BU -1, Neighborhood Business
Current Use: Vacant
UNIT PRICE: $30.15 per Square Foot
FINANCING: New First Mortgage of $360,000 with
First Western Bank.
VERIFICATION: Public Records
REMARKS: This is a site of a former Texaco
Service Station.
QUINLIVAN APPRAISAL
40
LAND SALE 4
DATE:
PRICE:
TYPE INSTRUMENT:
RECORDATION:
FOLIO NUMBER:
GRANTOR:
GRANTEE:
LEGAL:
LOCATION:
SITE DESCRIPTION:
Dimensions:
Size:
Zoning:
Current Use:
UNIT PRICE:
FINANCING:
VERIFICATION:
REMARKS:
February 18, 1994
$9,099,700
Warranty Deed
O. R. Book 16254, Page 943
24-4232-002-0131/24-4232-002-0171
Precision Value Corp.
Village of Key Biscayne
Lengthy legal. A portion of Tracts 5
and 7, MASON ESTATES, according
to the plat thereof, as recorded in Plat
Book 46, Page 86, of the Public
Records of Dade County, Florida.
440 Crandon Boulevard
Key Biscayne, Florida
Irregular
416,619.52 Square Feet
9.495 Acres
BU -1, Neighborhood Business
Park
$22.83 per Square Foot
Cash to seller.
Sam Kissinger, Village Manager
by J. Mark Quinlivan
This site is utilized as a village park.
QUINLIVAN APPRAISAL
41
LAND SALE 5
DATE: Current Listing
PRICE: $2,640,000
TYPE INSTRUMENT: Would be Warranty Deed
RECORDATION: O. R. Book N/A, Page N/A
FOLIO NUMBER: 24-4232-002-0090
OWNER: 200 Palms Corporation
BROKER: Codina•Bush•Klein
LEGAL: South 150 feet of the North 350 feet of
Tract 3, MATHESON ESTATES,
according to the plat thereof, as
recorded in Plat Book 46, Page 86, of
the Public Records of Dade County,
Florida.
LOCATION: 200 Crandon Boulevard
Key Biscayne, Florida
SITE DESCRIPTION:
Dimensions: 150 Feet x 409.5 Feet
Size: 61,420 Square Feet
1.41 Acres
Zoning: BU -1, Neighborhood Business
Current Use: Vacant
UNIT PRICE: $43.00 per Square Foot
FINANCING: Cash to seller.
VERIFICATION: Roberto Smith of Codina•Bush•Klein
by J. Mark Quinlivan
REMARKS:
This site is currently vacant. The
property has been listed for sale for
approximately six months.
QUINLIVAN APPRAISAL
42
LAND SALE 6
DATE: Current Listing
PRICE: $1,150,000
TYPE INSTRUMENT: Would be Warranty Deed
RECORDATION: O. R. Book N/A, Page N/A
FOLIO NUMBER: 24-5205-001-0100
OWNER: Nomar Investments, NV
BROKER: Coldwell Banker
LEGAL: Portion of Tract D, BISCAYNE KEY
ESTATES, according to the plat thereof,
as recorded in Plat Book 50, Page 61,
of the Public Records of Dade County,
Florida.
LOCATION: 800 Crandon Boulevard
Key Biscayne, Florida
SITE DESCRIPTION:
Dimensions: Irregular
Size: 20,150 Square Feet
.463 Acre
Zoning: BU -1, Neighborhood Business
Current Use: Florist shop
UNIT PRICE: $57.07 per Square Foot
FINANCING: Cash to seller.
VERIFICATION: Mutliple Listing Service
REMARKS: This site contains an older service
station used as a florist shop. The
building contributes no value to the
property.
QUINLIVAN APPRAISAL
43
HARACTERISTIC
SUBJECT
SALE 1
SALE 2
SALE 3
SALE 4
SALE $
SALE 6
ATE OF SALE
12/15/86
6/15/89
11/29/93
02/18/94
Listi ng
Listi ng
ALE PRICE
$641,000
$2,900,000
$430,000
$9,099,700
$2,640,000
$1,150,000
ECORDATION
13118/1192
14174/2742
16012/2541
16254/943
N/A
N/A
DDRESS
95 W. McIntire
St.
800 Crandon
Blv d.
320 Crando n
Blvd.
38 Crandon Blvd .
440 Crand on
Blvd.
200 Crandon
Blvd.
800 Cra ndo n
Blvd.
OCATION
3 Blocks S
2 Blocks N
5 Blocks N
1 Adjacent to N
4 Bl ocks N
3 Bl ocks S
EZE (ACRES)
3.14
. 463
2. 973
.33
9 .495
1.41
.463
ONIN G
BU -1
BU -1
BU -1
BU -1
BU -1
BU -1
BU -1
RESENT USE
Vacant an d Office
Bldg.
Former Flo wer
Shop
Shoppin g Center
Vacant
P ark
Vacant
Flower Shop
RICE PER S.F.
$31.81
$22. 40
$30. 15
$22 .00
$43 .00
$57.07
ASH EQUIVALENT PR ICE
$641,000
$2,900,000
$430,000
$9,099,700
$2,640,000
$1,150,000
$31. 81
$22.40
$30.15
$22.00
$43.00
$57 .07
RICE PAID/ACRE AFTER
INANCING ADJUSTMENTS
LAND VALUE
Conclusion
Land Sales 1 thru 4 range in unit price from $22.00 to $31.81 per square foot and
in time from December of 1986 to February of 1994. Listings 5 and 6 range in
asking price from $43.00 to $57.07 per square foot.
The sales were financed with conventional loans from lending institutions at market
interest rates or purchase money mortgages at market interest rates. Adjustments
for financing were therefore not required.
All of the sales are located on Crandon Boulevard within a five block radius of the
subject property. The sales and the subject property are similarly zoned BU -1.
The primary differences between the sale properties and the subject property are
time of sale and land size. Generally, a larger site will sell at a lower unit price.
The unit price of Sale 1, at $31.81 per square foot, would indicate an upper limit
of the value of the subject property. While this site is inferior in location, it is
smaller than the subject site.
The unit price of Sale 2, at $22.40 per square foot, should indicate a lower limit
of the value of the subject site. This site is similar in size and zoning but older in
time and slightly inferior in location.
The unit price of Sale 3 at $31.15 per square foot should indicate an upper limit
of the value of the subject site. This site is smaller in size.
The unit price of Sale 4 at $22.00 per square foot should indicate a lower limit of
the value of the subject site. This site is similar in general location and zoning but
it is much larger in size. The subject site's corner location is considered slightly
better than this site's interior location.
The unit prices of Sales (Listings) 5 and 6 at $43.00 and $57.07 per square foot
should indicate extreme upper limits of the value of the subject site. These are
asking prices and not "closed" sales.
QUINLIVAN APPRAISAL
44
Based on the above analysis of the land sales, it is estimated that the subject
property has a value as follows:
Office Site
50,506 sq. ft. x $25.00 per Sq. Ft. = $ 1,262,650
Rounded $ 1,265,000
Excess Land Site
84,393 Sq. Ft. x $25.00 per Sq. Ft. = $ 2,109,825
Rounded $ 2,100,000
QUINLIVAN APPRAISAL
45
QUINLIVAN APPRAISAL
COST APPROACH TO VALUE
The indication of value derived from the Cost Approach is reached by estimating
the replacement cost of the improvements, less accrued depreciation, if any, and
adding to this the estimated land value.
Direct Cost
18,039 S.F. x $70.00 per S.F. _
Site Improvements:
Landscaping, asphalt paving, drainage, etc.
Total Direct Cost
Indirect Costs
$1,262,730
$ 100.000
$1,362,730
R. E. Taxes during Construction $18,250
Architecture & Engineering Fees 40,900
Lender's Fees (Loan Points) 31,500
Financing Costs (Interest) 150,000
Legal & Accounting 9,500
Miscellaneous Fees 10,000
Contingency 27,250
Total Indirect Costs $287,400 $ 287.400
Total Costs - All Sources $1,650,130
Less Accrued Depreciation (45%) - 742,560
Plus: Land Value $1,265,000
Value Indication by Cost Approach $2,172,570
(Rounded) $2,175,000
QUINLIVAN APPRAISAL
46
Direct Costs
The direct costs are those costs attributable to the labor and material devoted
specifically to the construction of an improvement.
The direct cost of the office/bank building were estimated from the Marshall
Valuation Manual. The base cost in the Marshall Valuation Manual includes some
indirect costs such as architect's fees, construction loan interest, and miscellaneous
permits and fees. The indirect costs included in the base cost were deducted to
adjust the base cost only to include direct costs. The base cost is further adjusted
for size, building height, location, and time.
Cost New Estimate
MARSHALL VALUATION MANUAL
OFFICE/BANK
CLASS C, GOOD QUALITY
SECTION 15 PAGES 17 & 18
Base Cost $79.41
Height Multiplier x 1.00
Total $79.41
Floor Area/
Perimeter Multiplier x 1.05
Total $83.38
Current Multiplier x 1.02
Total $85.05
Local Multiplier x .90
Total $76.55
Less: Soft Costs -10.58
Included in Marshall
Valuation
Total $65.97
Rounded $70.00
QUINLIVAN APPRAISAL
47
In addition, cost comparables of office buildings were analyzed. A summary of
the cost comparables is as follows:
A • •
B ..
C
[
E
TYPE OF
BUILDING
Office
Office
Office
Office
Office
YEAR BUILT
1987
1988
1991
1992
1986
ADDRESS
2541 S.W. 27
Ave.
11440 N.
Kendall Dr.
N.W. 25 St. &
N.W. 82 Ave.
180 N.E.
168 St.
550 Biltmore
Way
BUILDING SIZE
(S.F.)
12,500
48,750
20,832
14,000
240,703
TOTAL DIRECT
COST
$686,750
$2,108,400
$836,000
$534,000
$23,080,000
UNIT COST/S.F.
$54.94
$43.25
$40.13*
$38.14
$95.89
QUALITY
Good
Average
Average
Average
Excellent
* Does not include tenant improvements for 9,365 square feet.
In the final analysis, the Marshall Valuation estimate and the cost comparables
were fairly consistent. The construction quality of the subject improvements is
considered good. Therefore, a direct cost of $70.00 per square foot was estimated
for the subject office/bank building.
Indirect Costs (Soft Costs)
The Indirect Costs are those costs in the development of a property which would
not be included in a general contract for construction. These costs include
architectural and engineering fees, financing costs, loan points, real estate taxes
during construction, legal and accounting fees, builder's insurance, contingencies
and miscellaneous fees of survey, appraisal and inspection fees.
Real Estate Taxes during Construction - This cost was based on the actual 1995
real estate taxes for the land over an estimated nine month construction period.
Architect and Engineering Fee - These fees were estimated based on 3% of the
direct costs.
QUINLIVAN APPRAISAL
48
Lender's Fees - The Lender's Fees were based on one and one-half points of a
construction loan at a 75 % loan to value ratio.
Financing Cost during Construction (Interest) - The financing cost is the interest
over a nine month construction period based on a construction loan with a 70%
loan to value ratio, at 10% interest for a 19 month term with a 70% average
outstanding balance. The loan interest was calculated as follows:
$2,100,000 x .10 x .70 = $147,000
Rounded $150,000
Legal and Accounting - This cost includes legal fees for loan closing and title
services and accounting fees for cost analysis.
Miscellaneous Fees - This item provides for survey, appraisal and inspection fees.
Title insurance and recording fees are also included in these fees.
Contingency - This item was based on 2.0% of the direct cost. Contingencies are
unforeseen expenses and change orders during the construction period.
The total indirect costs were estimated at $287,400 or 21.1% of the total costs
exclusive of land costs.
Depreciation
In estimating the accrued depreciation of the subject improvements, two methods
were considered: an Age -Life Method and an abstraction from market sales of
similar buildings. The Age -Life Method is a percentage reflecting the ratio of
estimated effective age to the anticipated economic life of the improvements. In
abstracting depreciation from a market sale, the estimated land value is subtracted
from the sale price to indicate the building value. The indicated building value is
subtracted from the estimated replacement cost of the building to derive a
depreciation percentage. The depreciation percentage can be converted into an
annual percentage by dividing by the effective age of the improvements.
The subject improvements was constructed in 1966, indicating an actual age of 29
years. The improvements appear to have had normal maintenance over their
economic life. Based on a personal inspection of the subject property, the effective
age of the building is estimated to be 25 years. Buildings of the subject's
construction type usually have an economic life of approximately 50 years.
QUINLIVAN APPRAISAL
49
Economic Age -Life Method
Actual Age 29 Years
Effective Age 25 Years
Economic Life 50 Years
Remaining Life 25 Years
Depreciation = Effective Age
Economic Life
Depreciation = 50 = 50%
Indicated Annual Depreciation Rate
50% _ 25 Years = 2.0% per Year
Abstraction Method
Abstracting depreciation is measured by actual sales of comparable properties in
the market. The procedure involves subtracting the estimated site value from the
sales price to derive the value contribution of the improvements. The contributory
value of the improvements is compared to a replacement cost new of the
improvements, in order to abstract accrued depreciation. The age of the
improvements is then divided into the amount of depreciation to provide an annual
rate of depreciation.
QUINLIVAN APPRAISAL
50
The following is a summary of depreciation rates abstracted from comparable sales
of office buildings.
Sale 2 Sale
Location 3399 Ponce 4601 Ponce
Sale Price $ 1,000,000 $ 1,375,000
Less: Land Value - 425.000 685.000
Building Value $ 575,000 $ 690,000
Replacement Cost New $ 945,000 $ 1,600,000
LESS: Building Value - 575.000 - 690.000
Depreciation $ 370,000 $ 910,000
Replacement Cost New — 945.000 - 1.600.000
Depreciation Percentage 39% 57%
Effective Age - 30 Years T 25 Years
Depreciation per Year 1.3% 2.28%
Summary of Depreciation
The Abstraction Depreciation Analysis of comparable sales and the Economic Age -
Life Method indicated a range of annual depreciation rates from 1.3% to 2.28%.
Based on these methods of estimating depreciation, an annual depreciation rate of
1.8% is estimated for the subject improvements.
25 Years x 1.8% per Year = 45%
QUINLIVAN APPRAISAL
51
QUINLIVAN APPRAISAL
INCOME APPROACH TO VALUE
This approach to value is a technique in which the anticipated net income is
processed to indicate the capital amount of the investment which produces the net
income. The capital amount, called the capitalized value, in effect, is the sum of
the anticipated annual rents less the loss of interest until the time of collection.
Income
First Floor
Rentable
Area
Bank Space
Office Space
Second Floor
Size
4,910 sq. ft.
3,004 sq. ft.
Office Space 9,263 sq. ft.
Potential Gross Annual Income
Less Vacancy and Collection Loss 7%
Effective Gross Annual Income
Expenses
Management 5%
Real Estate Taxes
Insurance
Common Area Utilities
Common Area Janitorial
Waste Removal
Repairs and Maintenance
Supplies
Reserve for Replacement
Miscellaneous
Total
Est. Market
Rent/Sq. Ft.
$ 16,000
$ 36,200
$ 10,725
$ 8,600
$ 3,435
$ 2,350
$ 12,885
$ 860
$ 8,600
$ 1,500
$ 101,155
Net Operating Income
$219,290 Capitalized @ 10%
Value Indication by Income Approach (Rd)
$27.50
$23.50
$15.00
Annual
Rent
$ 135,025
$ 70,594
$ 138,945
$ 344,564
- 24,119
$ 320,445
- 101.155
$ 219,290
$ 2,192,900
$ 2,200,000
QUINLIVAN APPRAISAL
52
Rental Rate Analy •
The appraiser has been provided with limited information related to the leases
within the subject building. A reconstructed rent roll is as follows:
Rent Roll
(November, 1995)
.}::,,}. ...?yy ,•. .; ,. :JE-.,•'S
.: rY,,.r,: • i;{:J,: :!.: J {x,:';�s.Sn•7}r• {mi
}{f';;. �j ::ij:?x .:j} .r}'{ r. f:'N,.,.. ''?•yr:.tijti•{.+ :::,......0::,..:::.,
y�}}��[��[yy}}����. •v.:
4•f x :r�:'•Y'
i•.: : Orr ';: :}YX• ..:$::r: :'•;'•.
. v. ��`„�,: {,u.:2d.+;d.{'•�$•}�•'•'��:.1':.:•:,a,.}:{.c:�:;:'c:::::.::•:,
dx.}
�i .?. r.•.•,'}`�„LfF.:•.
...r. • •.:.::. r... •::::::
: :. ,•:{}:;v:{{.}•. i:,y
.3 i•':.{;'{.??'}i'�::�'•::::J::yj::::ir:?::?5::�
q Yl ' .� . '
� 'rr•.' ..,•,..r }}1yy �`..,},rC,f/? f••,,.j`,.};,:*�'y
:r.•..... �::y?•{:4•:?:'w::} }:>'w.; .,:.
: {. r{.}Y. r.
...}..:v:<?:}::?jv}::}�:$y:^:::,i}:Yit::
': if w• 'r
n71.1�Y}•'J..R t'6�;
:rAri#i�lf ::i�lpl71:•n•
•.i::;. {•}4:• :• fiY•:Y•}:{{4Y{•? :>•}iiti
.. .. ...
•• :,}::i:%>r�}:titi •:6titi:•:r.:
'd$: N
s7 .,.•.$
i ....... ... ......... .. .....
Key Biscayne Bank
1
4,910 sq. ft.
---
---
Tarafa & Hondo
1
846 sq. ft.
$20,216
$23.90
Village of Key Biscayne
1
2,158 sq. ft.
$50,515
$23.41
Key Biscayne Bank
2
5,276 sq. ft.
---
---
Centurion Investment
2
1,344 sq. ft.
$15,980
$11.89
Thomas Wakefield, Att.
2
665 sq. ft.
$11,906
$17.90
Village of Key Biscayne
2
1,978 sq. ft.
$20,864
$10.56
2.•~titi�:•i:•�:i?i?�::?'}i?:•`.�?�i:?� '�:t�J�:? �:ti::{:iiiti%ii?ii:'
.. }...... ..
:v:•.•�.•}.-r'.�5�?{".•r{•�eC.•: r.4 .{il?�r?;+�:vr 8:n x`? L'ri:�h
'}:': •........ �...:...1: n�i...�A ?CA
;:�:::"}•: ii'r:•ii:•:•::vi'{::::}•:
:v {:rvrr: ti'•}::r ..•{..t;},+•..rii:J{}r
`- O ?{S:.?{{`�{?Iv.....i?{ :.n.}.rOrMi.
:'
; .f ., .•.i•..
n.is :•i}•}:•r•: .{:v.
{•.?v.:v:ir::•{:i :??{-0:?��iti>Y}}}:.;.,.
n{•}}.v{•}'•:iY:?
The owner, Key Biscayne Bank and Trust Company, occupies over half of the
building on the first and second floors. Since they are the owner, there is no lease
or rental payments.
The other major tenant, the Village of Key Biscayne, also occupies space on the
first and second floor. It appears the space is leased on a three year term, which
began on April 1, 1992. The lease had an option for an additional two years.
Accordingly, their lease would expire on March 31, 1997 or in approximately 16
months.
The other three tenants are reported to be leased on a month to month basis.
At these rental rates, the tenants are reportedly paying their own electricity and
janitorial. The landlord is paying for real estate taxes, insurance, common area
utilities and common area janitorial.
In order to estimate the market rent for the subject building, the appraiser gathered
and analyzed rentals in three office/retail buildings on Key Biscayne.
QUINLIVAN APPRAISAL
53
A summary of the comparable rentals are as follows:
"Reri :
Full service
1
Key Executive
Building
104 Crandon
Blvd.
$20.00-$23.00 per
sq. ft.
2
Finivest Office
Building
240 Crandon
Blvd.
$22.00 per sq. ft.
Tenant pays utilities
and janitorial
3
Key Biscayne
Galleria
328 Crandon
Blvd.
$17.00 (2nd Fl.)
$33.00 (1st Fl.)
Tenant pays all
expenses
The rental rate of Comparable Rental One needs to be adjusted downward
approximately $2.25 per square foot because the landlord is paying utilities and
janitorial.
Comparable Rentals 2 and 3 are newer buildings than the subject and, accordingly,
would have higher rental rates.
Based on a careful analysis of the actual rental rates in the subject building and the
comparable rentals, considering size of space, age of building, availability of
parking, etc., the market rent of the subject building is estimated as follows:
Fast Floor
Bank space to include $27.50 per sq. ft.
Drive-in tellers
Office space $23.50 per sq. ft.
Second Floor
Office space $15.00 per sq. ft.
At these rental rates, the tenant would be responsible for payment of their
electricity and janitorial. Since there is only one lease in the building and the lease
has a relatively short remaining term, the estimated market rent was utilized in the
Income Analysis. While there would be some income/rent loss to the expiration
of the lease, this loss of income/rent is reflected in the provision for vacancy and
collection loss.
A detailed profile of each rental, a photograph of each rental, and a location map
follows herein.
QUINLIVAN APPRAISAL
54
COMPARABLE OFFICE RENTAL 1
DESCRIPTION: Key Executive Building
ADDRESS:
LOCATION:
OWNER:
PHYSICAL DESCRIPTION:
104 Crandon Boulevard
Key Biscayne, Florida
Four blocks north of the subject
property
Paul R. Auchter
Rentable Area: 25,000 Square Feet
Common Area Factor: 12%
Number of Stories: 4
Age: 1971
Condition: Average
Parking: Adequate
QUINLIVAN APPRAISAL
55
RENTAL DATA:
Rental Rate:
Terms:
Expenses:
Escalations:
Finishing Allowance:
Rental Concessions:
TENANT PROFILE:
OCCUPANCY:
REMARKS:
$20.00 - $23.00 per Square Foot
1-5 Years
Increase in operating expenses over
base year paid by tenant
Generally CPI
Negotiable
None
Biscayne Realty, Attorneys, The
Islander News
97%
The first two floors contain a parking
garage. Typical suites range in size
from 150 to 1,500 square foot.
QUINLIVAN APPRAISAL
56
COMPARABLE OFFICE RENTAL 2
DESCRIPTION:
ADDRESS:
LOCATION:
OWNER:
PHYSICAL DESCRIPTION:
Two-story office building
240 Crandon Boulevard
Key Biscayne, Florida
Three blocks north of the subject
property.
Finivest Investments
Rentable Area: 44,556 Square Feet
Common Area Factor: 12%
Number of Stories: 2
Age: 1980
Condition: Good
Parking: Adequate
QUINLIVAN APPRAISAL
57
RENTAL DATA:
Rental Rate:
Terms:
Expenses:
Escalations:
Finishing Allowance:
Rental Concessions:
TENANT PROFILE:
OCCUPANCY:
REMARKS:
Asking $22.00 per Square Foot
3-5 Years
Tenant pays utilities and janitorial.
Landlord pays taxes, insurance and
maintenance
C.P.I.
Negotiable
Negotiable - One month free rent per
each year of the lease.
Medical Center, Intercontinental Bank
78%
There is approximately 10,000 square
feet of space available in the building.
Intercontinental Bank has a 3,000
square foot space in the front of the
building leased at $22.00 per square
foot.
QUINLIVAN APPRAISAL
58
COMPARABLE OFFICE/STORE RENTAL 3
DESCRIPTION: Key Biscayne Galleria
ADDRESS:
LOCATION:
OWNER:
PHYSICAL DESCRIPTION:
328 Crandon Boulevard
Key Biscayne, Florida
Two blocks north of the subject
property
Fernwood Builders, Inc.
Rentable Area: 52,000 Square Feet
Common Area Factor: 0%
Number of Stories: 2
Age: 1990
Condition: Good
Parking: Adequate
QUINLIVAN APPRAISAL
59
RENTAL DATA:
Rental Rate:
Terms:
Expenses:
Escalations:
Finishing Allowance:
Rental Concessions:
TENANT PROFILE:
OCCUPANCY:
REMARKS:
$17.00 per Square Foot (2nd floor
office)
3-5 Years
All expenses paid by tenant
Generally C.P.I.
Generally by tenant
None
Second floor - Art Gallery, Real Estate
Offices, Fitness Center, Architect
97%
This building contains retail stores on
the ground floor and offices on the
second floor.
Retail rents on the first floor are $33.00
per square foot.
QUINLIVAN APPRAISAL
60
Vacancy and Collection Loss
A vacancy and collection loss allowance is a reduction in potential rental income
due to space not leased or rents not collected. This allowance is generally
expressed as a percentage of Potential Gross Income.
The vacancy rates of the comparable rentals range from 3% to 22%. The vacancy
rates are reflective of the vacancy at the time of the rental survey and are not
stabilized annual rates.
The subject property currently is 100% occupied. However, the second floor bank
space is not being fully utilized and the Village of Key Biscayne second floor space
is leased at a below market rate.
Based on the above, a vacancy and collection loss allowance of 7% is considered
applicable for the subject.
Operating Expense Analysis
The expenses were based on expense information obtained from similar buildings,
discussions with management agents. Information on the actual operation of the
subject building was not provided to the appraiser.
Management was based on 5% of Effective Gross Annual Income. This item
would cover salary and administrative cost for rent collection and record keeping
of the subject property. This expense equates to $.93 per square foot.
Real Estate Taxes - The 1995 real estate taxes equate to $2.11 per square foot of
rentable area. A comparison of the assessment with the final value estimate in this
report as well as a comparison of the subject real estate taxes on a square foot basis
with real estate taxes per square foot of comparable office buildings indicates the
subject building is fairly assessed.
Insurance - This expense is estimated based on $.60 per square foot of rentable
area. The insurance expense is based on actual premiums for similar buildings.
Utilities - Utility expenses are estimated at $.50 per square foot of rentable area.
Utility expenses include common electrical service and water/sewer service.
Garbage Removal is estimated at $.15 per square foot.
Janitorial Service is estimated based on a cost of $.20 per square foot of rentable
area for the common area only.
QUINLIVAN APPRAISAL 61
Repairs and Maintenance are estimated at $0.75 per square foot of rentable area.
This expense includes monthly contract maintenance for elevator maintenance and
air conditioning service, structural maintenance, interior building maintenance,
lawn service, and tenant space repairs.
Pest Corol is estimated based at $.03 per square foot of rentable area.
Reserve for Replacement would account for periodic replacement of long lived
items such as roof cover, air conditioning compressors and exterior painting.
Supplies are estimated at $.05 per square foot of rentable area. This expense is
for office supplies, postage, and courier services.
Leasing Commissions are typically included in management expenses. Since the
Key Biscayne office market and the subject building have high occupancy rates, the
need to pay outside real estate agents commissions should be sharply reduced.
Miscellaneous Expenses are estimated at $1,500 or approximately $.09 per square
foot of rentable area. This expense includes license fees, alarm fees, pest control,
and other undistributed expenses.
QUINLIVAN APPRAISAL
62
Selection of Capitalization Rate
Capitalization is a process which translates an income projection into an indication
of value. The connecting link is a rate which reflects the return necessary to
attract investment capital. Hence, the selection of an appropriate rate represents
a critical factor in the capitalization process.
Overall Rates From Market Sales
Location Date Sale Price Overall Rate
540 Biltmore Way 09/91 $ 850,000 9.3%
2828 Coral Way 06/93 $ 3,875,000 11.4%
3399 Ponce de Leon Blvd. 11/93 $1,000,000 9.9%
1570 Madruga Ave. 12/93 $ 2,275,000 9.9%
4601 Ponce de Leon Blvd. 01/94 $ 1,375,000 10.8%
2334 Ponce de Leon Blvd. 01/95 $2,100,000 9.9%
The office building at 4601 Ponce De Leon Boulevard was reported to have an
occupancy rate of 50% at the time of sale. The Overall Rate of this sale indicates
the risk of having to market and rent a large portion of the building. The Overall
Rate of this sale should be an upper limit for the Overall Rate applicable for the
subject.
Overall Rate by Band of Investment Theory
The overall rate developed by application of the Band of Investment Theory is a
synthesis of mortgage debt service and anticipated cash flow to equity which
market data discloses as applicable to comparable properties.
The rate developed is a weighted average, the weighing being for the respective
portions of the value represented by the mortgage and equity positions, or Band of
Investment.
QUINLIVAN APPRAISAL
63
Cash
Flow Weighted
Source of Capital Portion Rate Average
Mortgage Loan .70 x .1048436 = .0734
Equity Funds .30 x .09 = .0270
.1004
OR
Overall Rate 10.0%
From discussions with lending institutions and from an analysis of comparable
sales, it was determined the most favorable rate and likely terms available to the
subject property would be a 70% mortgage at an interest rate of 9.25% with an
amortization period of 25 years and a term of five to ten years.
A cash flow rate of 9% was estimated to be sufficient to attract equity funds to this
type of investment. While the equity dividend rate appears low, the eventual
equity yield rate through operational leverage and appreciation should be
commensurate with alternate investments.
Based on the above, considering the overall rates from market sales, as well as the
Band of Investment Technique as most indicative, it is estimated that an overall
rate of 10.0% would be applicable to the subject property.
QUINLIVAN APPRAISAL
64
QUINLIVAN APPRAISAL
SALES COMPARISON APPROACH TO VALUE
This approach to value is a technique in which the Market Value estimate is
predicated upon prices paid in actual market transactions of similar properties.
These similar, or comparable, transactions (sales) are adjusted to indicate a value
to the subject.
The Sales Comparison Approach is a process of analyzing sales of similar recently
sold properties in order to derive an indication of the most probable sales price of
the property being appraised. The reliability of this approach is dependent upon
the availability of comparable sales data, the verification of the sales data, the
degree of comparability and the absence of non -typical conditions affecting the
sale.
The following pages contain sales of similar properties which have recently sold.
Several other sales were considered, but were not included because there was too
wide a difference in physical factors, location and time.
In comparing the sales to the subject, consideration was given to factors of time,
location, physical characteristics and terms and conditions of the sale.
Since there are few office buildings on Key Biscayne and no recent sales, the
appraiser searched and analyzed office building sales in the off-Brickell office
market area, the Coral Way area, Coral Gables area and other quality areas of
southwest Dade County. The majority of the sales contained in this report are in
the Coral Gables area; a similar high quality/high income residential area as Key
Biscayne.
In this approach to value, two units of comparison were considered: the price paid
per square foot and the gross income multiplier.
A Gross Income Multiplier (GIM) is a factor reflecting the relationship between
gross annual income of real estate and its sale price or value.
The rationale of the GIM Analysis is that both the sale price or value and the gross
income of an income property are subject to the same market influences. They
presumably move in the same direction and essentially the same proportion in
response to market conditions, locational/environmental influences and amenities
and functions offered by the property itself.
The principal advantage of this technique is that the reflection of rental income is
direct. Therefore, differences between properties, which could involve adjustments
based on judgment estimates, have been resolved by the free action of the rental
market.
QUINLIVAN APPRAISAL
65
Sale 1 is located at the northwest corner of South Miami Avenue and S.W. 15th
Road, south of the Central Business District of Miami and west of the Brickell
Avenue office area. This two-story office building sold in March, 1993 for
$650,000, or $95.03 per square foot. This site is zoned Special District 7, Central
Brickell Rapid Transit Commercial Residential District. The building was
constructed in 1963 and was later renovated. It is in good condition. The location
of this property is considered inferior to the location of the subject property.
Sale 2 is located on Ponce de Leon Boulevard in Coral Gables, just south of the
Central Business District of Miami. This 11,800 square foot building sold in
November of 1993, for $1,000,000, or $84.75 per square foot of building area.
This is a two-story office building constructed in 1963. The building was in
average condition at the date of sale. It is a multiple tenant building with small
office suites. At the time of sale, the building was 100% occupied at an average
rental rate of $14.00 per square foot and a net income per square foot of $8.43 per
square foot. The net income per square foot of this building is lower than the
projected net income per square foot of the subject. The sales indicate that a sale
of a property with a higher net income per square foot will reflect a higher price
per square foot. The building is situated on a corner lot with frontage on a traffic
artery and a secondary street. It is located outside of the Central Business District
of Coral Gables.
Sale 3 is located on Ponce de Leon Boulevard near U.S. Highway 1 in Coral
Gables. This 20,246 square foot building sold in January of 1994 for $1,375,000,
or $67.91 per square foot of building area. This is a two-story office building
constructed in 1969. The building was in average condition at the date of sale. The
building is a multiple tenant building. At the time of sale, the building had an
occupancy rate of 50% at an average rental rate of $13.50 per square foot and an
average net income per square foot of $7.32. The building is situated on a corner
lot with frontage on a primary traffic artery and a secondary street. The property
is located outside of the Central Business District of Coral Gables. The condition
and construction quality of this building is similar to the subject building. The
buyers are renovating the common areas of the building to increase the quality of
the improvements. The parking ratio of this building, one space per 547 square
feet, is inferior to the subject.
Sale 4 is located on Alca7ar Avenue, a secondary street within the Central Business
District of Coral Gables. This 5,207 square foot office building sold in May of
1994, for $540,000, or $103.71 per square foot of building area. This is a two-
story office facility with two office suites. The buyer occupies one of the suites.
The improvements include six offstreet parking spaces. The building was
QUINLIVAN APPRAISAL
66
constructed in 1972 and was in average to good condition at the time of sale. This
building also has inferior parking compared to the subject property.
Sale 5 is located on Ponce de Leon Boulevard in the heart of the Central Business
District of Coral Gables. This two-story office retail store building sold in January
of 1995 for $2,100,000, or $172.73 per square foot. The building was originally
constructed in 1935 and completely renovated in 1984. This building is considered
better in location and condition. Additionally, this building has first floor retail
use, which commands higher rental rates.
A detailed analysis of each sale, a photograph of each sale, a summary of the sales,
a sales map and a value conclusion follow herein.
QUINLIVAN APPRAISAL
67
OFFICE BUILDING SALE 1
DESCRIPTION: Two-story office building, known as the
Columbia Building
DATE: March 29, 1993
PRICE: $650,000
TYPE INSTRUMENT: Warranty Deed
RECORDATION: O. R. Book 15857 Page 2620
FOLIO NUMBER: 01-0209-080-1050
GRANTOR: Poinciana Realty, Inc.
GRANTEE: Nickel and Veronica Cervera Goeseke,
et al.
LEGAL:
Lot 5, Less that portion deeded to the
City of Miami in Deed Book 1603,
Page 136, Block 98 South, south of
A.L. Knowlton's Plat of the CITY OF
MIAMI, according to the plat thereof, as
recorded in Plat Book B, Page 41, of
the Public Records of Dade County,
Florida.
LOCATION: 1492 South Miami Avenue
Miami, Florida
ZONING: Special District 7
LAND SIZE: 10,036 Square Feet
LAND/BLDG RATIO: 1.47 to 1
QUINLIVAN APPRAISAL
PHYSICAL DESCRIPTION:
Building Size:
Age:
Condition:
Stories:
Occupancy at time of Sale:
Parking:
Parking Ratio:
FINANCING:
ECONOMIC DATA:
Gross Annual Income:
UNIT PRICE:
REMARKS:
6.840 Square Feet
1963, subsequently updated
Average
Two
100%
15 Spaces
1 Space per 456 Square Feet
First mortgage of $650,000 to Barnett
Bank. Three year Purchase Money
second mortgage of $100,000 at 6%
interest per year for the 1st two years
and 7% for the third year. The
mortgages are secured by this property
and an adjacent property.
Not applicable - primarily owner
occupied.
$95.03 Per Square Foot
At the time of the sale, the property
was 100% occupied, however, a large
portion of the building was occupied by
the owner, and the buyer intends on
occupying the building therefore a
Gross Income Multiplier and Overall
Rate analysis would not be applicable.
The portion of the building not occupied
by the owner, was reportedly leased at
rental rates ranging from $12.00 to
$17.00 per square foot on a full service
basis. While the second mortgage has
an interest rate below a market interest
rate, the term is short term with little
effect on the sale price.
The building has been substantially
renovated after the sale.
QUINLIVAN APPRAISAL
69
QUINLIVAN APPRAISAL
OFFICE BUILDING SALE 2
DESCRIPTION: Two-story office building, known as
3399 Ponce Building
DATE: November 1, 1993
PRICE: $1,000,000
TYPE INSTRUMENT: Warranty Deed
RECORDATION: O. R. Book 16110 Page 606
FOLIO NUMBER: 03-4117-007-1370
GRANTOR: 3399 Ponce Associates, GTS
Corporation and Dover Enterprises, Inc.
GRANTEE: Seanna Holding Corp.
LEGAL:
Lots 33 through 36, Block 11, CORAL
GABLES COCONUT GROVE SECTION 1,
according to the plat thereof, as
recorded in Plat Book 14, Page 25, of
the Public Records of Dade County,
Florida.
LOCATION: 3399 Ponce de Leon Boulevard
Coral Gables, Florida
ZONING: CB, Commercial
LAND SIZE: 10,588 Square Feet
LAND/BUILDING RATIO: .90 to 1
QUINLIVAN APPRAISAL
70
PHYSICAL DESCRIPTION:
Building Size:
Age:
Condition:
Stories:
Occupancy at Sale:
Parking:
Parking Ratio:
FINANCING:
ECONOMIC DATA:
Gross Annual Income:
Vacancy:
Effective Gross Income
Expenses:
Net Operating Income:
Debt Service:
Cash Flow:
ECONOMIC INDICATORS:
Gross Rent Multiplier:
Overall Rate:
Equity Dividend Rate:
UNIT PRICE:
REMARKS:
11,800 Square Feet
1963
Average
Two
100%
19 Spaces
1 Space per 621 Square Feet
Cash.
$165,960 ($14.06 per S.F.)
- 8,300
$157,660
- 58,213
$ 99,447 ($8.43 per S.F.)
0
$ 99,447
6.0
9.9%
9.9%
$84.75 Per Square Foot
This building had been listed for six
months prior to sale.
QUINLIVAN APPRAISAL
71
OFFICE BUILDING SALE 3
DESCRIPTION:
DATE:
PRICE:
TYPE INSTRUMENT:
RECORDATION:
FOLIO NUMBER:
GRANTOR:
GRANTEE:
LEGAL:
LOCATION:
ZONING:
LAND SIZE:
LAND/BUILDING RATIO:
Three-story office building, known as
Ponce Plaza
January 12, 1994
$1,375,000
Warranty Deed
O. R. Book 162409 Page 5586
03-4120-023-0130
Samuel M. Spatzer, Trustee
Ponce Plaza Associates
Lots 16 through 22, Block 36, CORAL
GABLES RIVIERA SECTION 2, according
to the plat thereof, as recorded in Plat
Book 28, Page 18, of the Public
Records of Dade County, Florida.
4601 Ponce de Leon Boulevard
Coral Gables, Florida
CB, Commercial
17,166 Square Feet
.85 to 1
QUINLIVAN APPRAISAL
72
PHYSICAL DESCRIPTION:
Building Size:
Age:
Condition:
Stories:
Occupancy at Sale:
Parking:
Parking Ratio:
FINANCING:
ECONOMIC DATA:
Gross Annual Income:
Vacancy:
Effective Gross Income
Expenses:
Net Operating Income:
Debt Service:
Cash Flow:
ECONOMIC INDICATORS:
Gross Rent Multiplier:
Overall Rate:
Equity Dividend Rate:
UNIT PRICE:
REMARKS:
20,246 Square Feet
1969
Average
Three
50%
37 Spaces
1 Space per 547 Square Feet
Assumption of a first mortgage to First
National Bank of South Florida with a
balance of $2,248,000 at a variable
interest rate with monthly payments of
$9,650.
$273,321 ($13.50 per S.F.)
- 13.666
$259,655
- 111.353
$148,302 ($7.32 per S.F.)
-115.800
$ 32,502
5.0
10.8%
26%
$67.91 Per Square Foot
The document stamps recorded on the
deed indicate a price of $1,333,800. A
representative of the owner verified the
tale price as $1,375,000.
QUINLIVAN APPRAISAL
73
QUINLIVAN APPRAISAL
OFFICE BUILDING SALE 4
DESCRIPTION:
DATE:
PRICE:
TYPE INSTRUMENT:
RECORDATION:
FOLIO NUMBER:
GRANTOR:
GRANTEE:
LEGAL:
LOCATION:
ZONING:
LAND SIZE:
LAND/BUILDING RATIO:
PHYSICAL DESCRIPTION:
Building Size:
Age:
Condition:
Stories:
Occupancy at Sale:
Parking:
Parking Ratio:
Two-story office building
May 6, 1994
$540,000
Warranty Deed
O. R. Book 16360 Page 2656
03-4108-006-1650
Jacqueline B. and Gilbert A. Haddad
Mario Echevarria, et ux
Lots 36 and 37, Block 19, CORAL
GABLES SEcTIoN K, as recorded in Plat
Book 8, Page 33, of the Public Records
of Dade County, Florida.
353 Alcazar Avenue
Coral Gables, Florida
CB, Commercial
5,000 Square Feet
0.96 to I
5,207 Square Feet
1972
Average
Two
100%
6 Spaces
1 Space per 868 Square Feet
QUINLIVAN APPRAISAL
74
FINANCING:
ECONOMIC DATA:
ECONOMIC INDICATORS:
UNIT PRICE:
REMARKS:
Purchase money mortgage of $365,000
at 8% interest.
Not applicable - Owner Occupied
Not applicable - Owner Occupied
$103.71 Per Square Foot
This building has two office suites.
QUINLIVAN APPRAISAL
75
QUINLIVAN APPRAISAL
OFFICE/RETAIL BUILDING SALE 5
DESCRIPTION:
DATE:
PRICE:
TYPE INSTRUMENT:
RECORDATION:
FOLIO NUMBER:
GRANTOR:
GRANTEE:
LEGAL:
LOCATION:
ZONING:
LAND SIZE:
LAND/BUILDING RATIO:
Two-story office/retail building
January 12, 1995
$2,100,000
Warranty Deed
O. R. Book 16669 Page 94
03-4108-006-3700
Lewis H. Peters, Trustee
2334 Ponce Corp.
Lots 21 - 24, Block 37, CORAL
GABLES SECTION K, according to the
plat thereof, as recorded in Plat Book
8, Page 33, of the Public Records of
Dade County, Florida.
2334 Ponce de Leon Boulevard
Coral Gables, Florida
CB, Commercial
9,700 Square Feet
.80 to 1
QUINLIVAN APPRAISAL
76
PHYSICAL DESCRIPTION:
Building Size:
Age:
Condition:
Stories:
Occupancy at Sale:
Parking:
Parking Ratio:
FINANCING:
ECONOMIC DATA:
Gross Annual Income:
Vacancy:
Effective Gross Income
Expenses:
Net Operating Income:
ECONOMIC INDICATORS:
Gross Rent Multiplier:
Overall Rate:
UNIT PRICE:
REMARKS:
12,158 Square Feet
1935, renovated in 1984
Good
Two
100%
12 Spaces
1 Space per 1,000 Square Feet
Assumption of First Mortgage with
Chase Federal of $1,660,000.
$282,000 ($23.19 per S.F.)
- 14.100
$267,900
- 60.000
$207,900 ($17.10 per S.F.)
7.45
9.9%
$172.73 Per Square Foot
The property was listed for sale with
Elliott Associates Realty at $2,400,000.
QUINLIVAN APPRAISAL
77
QUINLIVAN APPRAISAL
SUBJECT
SALE 1
SALE 2
SALE 3
'H ARACrERISTIC
ATE OF SALE
ALE PRICE
DDRESS
95 W. McIntyre
OCATION
AND SIZE (S. F.)
UILDING SIZE (S.F. )
UILDING AGE
ONDITION
ON ING
AND/BUIL DING RATIO
IM
VERALL RATE
ET INCOME/S.F.
RICE PAID/S.F.
K ey Biscayn e
50,506
17,177
1966
Avg. /Good
3/29/93
11/01/93
$650,000
$1,000,000
SALE 4 •
SALE 5
1/12/94
5/6/94
1/12/95
$1,375,000
1492 S. Miami Ave .
3399 Ponce de Leon
Blvd .
4601 Ponce de
Leon Blvd.
Off Brickell
Coral Gables
Coral Gables
10,036
10,588
6,840
11,800
1963
1963
17,166
$540,000
$2,100,000
353 Alc azar Ave.
2334 Po nce de
Leon Blvd .
Coral Gables
Coral Gables
5,000
9,700
20,246
5,207
12,158
1969
Average
Average
Average
BU -1
SD -7
CB
CB
1972
1935/84
Average
Good
CB
CB
2. 9 to 1
1.5 to 1
.9 to 1
.85 to 1
N /A
6.0
5.0
$12.77
N /A
9. 9%
10.8%
.96 to 1
.80 to 1
N/A
7.45
N/A
N /A
$8.43
$7.32
N/A
9 .9 %
$17.10
$95. 03
$84.75
$67.91
$103.71
$172.73
Gross Income Multiplier Analysis
Two of the sales analyzed herein are owner occupied. Gross Income Multipliers
cannot be derived from sales of owner occupied properties. Gross Income
Multipliers from recent sales of office facilities located in Dade County were also
utilized in this analysis.
A summary of the Gross Rent Multipliers from the market sales is as follows:
No. Location
1 9040 Sunset Dr.
2 3399 Ponce de Leon Blvd.
3 1570 Madruga Ave.
4 4601 Ponce de Leon Blvd.
5 2334 Ponce de Leon Blvd.
Date Sale Price G.I.M.
10/93
11/93
12/93
01/94
01/95
$1,300,000
$1,000,000
$2,275,000
$1,375,000
$2,100,000
4.9
6.0
4.6
5.0
7.45
The subject property has an estimated Potential Gross Annual Income of $320,445.
(SEE PAGE 52).
Based on an analysis of the sales, it is estimated a Gross Income Multiplier of 6.5,
would be applicable to the subject property.
$320,445 x 6.5 = $2,082,892
Rounded $2,100,000
Reconciliation of Sales Comparison Approach
The value indication by the Price Paid Per Square Foot Analysis was $2,150,000
to $2,235,000. The value indication by the Gross Income Multiplier Analysis was
$2,100,000. Both analyses were considered well supported by a preponderance of
market data. The value indications from both analyses were given emphasis in the
final analysis.
Based on these analyses, the subject property is estimated to have a value by the
Sales Comparison Approach of $2,200,000.
VALUE INDICATION BY SALES COMPARISON APPROACH $2,200,000
QUINLIVAN APPRAISAL
79
QUINLIVAN APPRAISAL
RECONCILIATION AND VALUE CONCLUSION (Office Building)
The reconciliation of the data and indicated value estimates is the final step in the
appraisal process. Sufficient data has been assembled and analyzed for the purpose
of judging the reactions of typical purchasers in the market place.
In this report, the three accepted appraisal techniques were utilized. The value
estimates indicated by these approaches resulted in the following:
Cost Approach to Value $2,175,000
Income Approach to Value $2,190,000
Sales Comparison Approach to Value $2,200,000
Cost Approach to Value
The Cost Approach has the most applicability and will generally result in a truer
estimate of value when the building improvements are new and accrued
depreciation need not be estimated. Since the subject improvements have an actual
age of 29 years, a degree of judgement is required to estimate an effective age of
the improvements.
The subject property is a quality office facility in a good location. An
investor/owner of such a facility is more concerned with the net income potential
of the property rather than the replacement cost.
Considering the above factors, the value indication from the Cost Approach was
given secondary emphasis in the final analysis.
Income Approach to Value
The data in this approach as to the quality, quantity and durability of the income
was considered good. The income and expenses were based on comparable
buildings and the actual operation of the subject.
Net Income was capitalized by means of a direct capitalization method with an
overall rate derived from market sales and a Band of Investment Technique.
QUINLIVAN APPRAISAL
80
Because this is an income investment property, this approach to value is given
primary emphasis in the final analysis.
Sales Comparison Approach to Value
In reference to the Sales Comparison Approach, consideration has been given to
sales that have taken place in the real estate market. These sales were analyzed
and adjusted to the subject to reflect a market value estimate of the subject.
The quality of the market sales in this approach to value was considered good.
Most of the sales are in similar locations as the subject.
Considering the quality of these sales, this approach to value was also given
primary emphasis in the final analysis.
final Conclusion
In the reconciliation process, the greatest weight should be given to the approach
or approaches which produce the highest degree of confidence and which has been
processed with a minimum of assumptions. Of equal importance is the
reasonableness of the data and the reliability of the data.
In consideration of the above, and for the reasons and conclusions contained
herein, it is estimated that the Market Value of the subject property as of December
5, 1995 was:
$2,200,000
QUINLIVAN APPRAISAL
81
QUINLIVAN APPRAISAL
ASSUMPTIONS AND LIMITING CONDITIONS
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This Appraisal Report has been made with the following general assumptions:
1. No responsibility is assumed for the legal description or for matters
including legal or title considerations. Title to the property is assumed
to be good and marketable unless otherwise stated.
2. The property is appraised free and clear of any or all liens or
encumbrances unless otherwise stated.
3. Responsible ownership and competent property management are
assumed.
4. The information furnished by others is believed to be reliable.
However, no warranty is given for its accuracy.
5. All engineering is assumed to be correct. The plot plans and
illustrative material in this report are included only to assist the reader
in visualizing the property.
6. If no survey has been furnished to the appraiser, all measurements have
been confirmed either in the field, in the plat book or by other reliable
sources and are presumed to be accurate.
7. It is assumed that there are no hidden or unapparent conditions of the
property, subsoil, or structures that render it more or less valuable.
No responsibility is assumed for such conditions or for arranging for
engineering studies that may be required to discover them.
8. It is assumed that there is full compliance with all applicable federal,
state and local environmental regulations and laws unless
noncompliance is stated, defined and considered in the Appraisal
Report.
9. It is assumed, unless a study has been provided otherwise, that no
hazardous material such as asbestos, urea formaldehyde or other toxic
waste exists in the property. The existence of a potentially hazardous
material could have a significant effect on the value of the property.
QUINLIVAN APPRAISAL
82
10. In reference to proposed construction, the real estate taxes and other
expenses are estimated. These amounts are not guaranteed.
11. It is assumed in the valuation of the subject land site, unless a
compliance letter has been furnished to us, that the State of Florida
Growth Management Act does not prevent the issuance of a building
permit.
12. It is assumed that all required licenses, certificates of occupancy,
consents, or other legislative or administrative authority from any local,
state or national government or private entity or organization have been
or can be obtained or renewed for any use on which the value estimate
contained in this report is based.
13. It is assumed that the utilization of the land and improvements is within
the boundaries of property lines of the property described and that there
is no encroachment or trespass unless noted in the report.
This Appraisal Report has been made with the following general limiting
conditions:
1. The distribution, if any, of the total valuation of this report between
land and improvements applies only under the stated program of
utilization. The separate allocations for land and buildings must not be
used in conjunction with any other appraisal and are invalid if so used.
2. Possession of this report, or a copy thereof, does not carry with it the
right of publication. It may not be used for any purpose by any person
other than the party to whom it is addressed without the written consent
of the appraiser, and in any event, only with proper written
qualification and only in its entirety.
3. The appraiser herein by reason of this appraisal is not required to give
further consultation, testimony, or be in attendance in court with
reference to the property in question unless arrangements have been
previously made.
4. Neither all nor any part of the contents of this report (especially any
conclusions as to value, the identity of the appraiser, or the firm with
which the appraiser is connected) shall be disseminated to the public
through advertising, public relations, news, sales, or other media
without the prior written consent and approval of the appraiser.
QUINLIVAN APPRAISAL
83
QUALIFICATIONS OF THE APPRAISER
J. MARK QUINLIVAN
Experience:
Engaged in the field of real estate appraising since 1972. Associated with F.
Robert Quinlivan, MAI, from 1972 to 1985. Currently President of Quinlivan
Appraisal, P.A., a Real Estate Appraising and Consulting Firm, established in
1964.
Graduate:
University of Notre Dame
BBA - Bachelor of Business Administration (Major in Finance and
Business Economics)
University of Maryland
MBA - Master of Business Administration (Concentration in Finance)
University of Miami Law School
JD - Juris Doctor (Concentration in Real Estate and Taxation)
Florida International University
MSM - Master of Science in Management (Major in Real Estate)
University of Miami
MALS - Currently enrolled in the Master of Arts in Liberal Studies Program
Professional Affiliations:
Member of the Appraisal Institute (MAI N2 5791)
Member of the Florida Bar (N2 239992)
Real Estate Broker, State of Florida (N2 0125264)
Certified General Appraiser, State of Florida, License N2 RZ0000112
QUINLIVAN APPRAISAL
84
Qualified as an Expert Witness in the Following Courts:
Dade, Broward and Palm Beach County Circuit Courts
United States Bankruptcy Court
United States District Court
Other Activities:
Appraiser Special Master (1978 - 1980),
Dade County Property Appraisal Adjustment Board
Past President - Miami Chapter N2 71,
Society of Real Estate Appraisers (1983 - 1984)
Past President - South Florida Chapter N2 24, Appraisal Institute (1988)
Past Governing Councilor of the American Institute of Real Estate Appraisers
(1990)
Young Advisory Council of Society of Real Estate Appraisers (1979 and 1980)
Editorial Review Board (1981 - 1991)
THE REAL ESTATE APPRAISER AND ANALYST published quarterly by the
Society of Real Estate Appraisers
Recent Publications:
"Non -Conforming Use Properties: The Concept of Positive Economic
Obsolescence", The Appraisal Journal, January 1981, Pages 45-51. (Arthur A.
May Memorial Award 1982).
QUINLIVAN APPRAISAL
85
Have prepared Appraisal Reports for the following:
Institutions and Corporations:
American Savings of Florida
AmeriFirst Bank
Archdiocese of Miami
Atico Savings Bank
Atlantic Security Bank
The Bank of Coral Gables
Banco Atlantico
Banco Industrial de Venezuela
Bank Espirito Santo
Barnett Bank
Barry University
Ben Franklin Savings
Capital Bank
Central Bank and Trust Company
Centrust Bank
Chase Manhattan Bank
Citibank
Citicorp Savings
City National Bank
Commonwealth Savings and Loan
Consolidated Bank, N.A.
Continental Bank of Illinois
Coral Gables Federal Savings and Loan Association
Crown Life Insurance Company
East Little Havana Development Corporation
Eastern National Bank
Ensign Bank
Equibank of Pittsburgh
First Nationwide Bank
Florida National Bank
Florida Power and Light Company
General Bank
Gold Coast Savings Bank
Guardian Savings and Loan
Hollywood Federal
Intercontinental Bank
International Bank of Miami, N.A.
International Savings and Loan Association
Jewish Home for the Aged, Inc.
QUINLIVAN APPRAISAL
86
Lincoln Savings and Loan
Marine Midland Bank
McCaughan Mortgage Company, Inc.
McDonald Corp.
Miami -Dade Community College
Miami -Dade Water and Sewer Authority
Miami National Bank
Miami Savings
NCNB
Northern Trust Bank of Florida
Ocean Bank
Olympia & York
Pan Am
Popular Bank of Florida
Professional Savings Bank
Royal Palm Savings
Savings of America
Shell Oil Company
Skylake State Bank
Southeast Bank
Southeast Mortgage Company
Sun Bank
Swire Properties
Texaco
Terremark
Totalbank
Trade National Bank
Tropical Savings and Loan
United Savings
University of Miami
Governmental Agencies:
City of Coral Gables
City of Hialeah
City of Miami
City of Miami Beach
City of North Miami Beach
Dade County HUD
Dade County Property Appraisal Adjustment Board
Dade County Public Schools
Dade County Public Works Department
QUINLIVAN APPRAISAL
87
Federal Deposit Insurance Corporation (FDIC)
General Services Administration
Metropolitan Dade County, Florida
South Florida Water Management District
State of Florida, Department of Community Affairs
State of Florida, Department of Natural Resources
State of Florida, Department of Rehabilitation and Liquidation
State of Florida, Department of Transportation
Town of Golden Beach
United States Department of Commerce
Law Firms:
Becker, Poliakoff & Streitfeld, P.A.
Greenberg, Traurig, Hoffman, Lipoff, Rosen & Quentel, P.A.
Kimbrell & Hamann
Martinez & Mattox
Shutts & Bowen
Kelley, Drye & Warren
Fitzgerald, Portela Sr. Portuondo
Blackwell, Walker, Fascell & Hoehl
Steel, Hector & Davis
Mershon, Sawyer, Johnston, Dunwody & Cole
Gaebe & Murphy
Hornsby & Whisenand
Murai, Wald, Biondo & Moreno, P.A.
Sullivan, Admire & Sullivan, P.A.
Valdes-Fauli, Cobb & Petney, P.A.
Types of Properties Appraised:
Single Family Residences
Apartment Buildings
Office Buildings
Retail Stores
Shopping Centers
Condominium Apartment Buildings
Golf Courses
Residential Subdivisions
Automobile Dealerships
Vacant Land
Hotel/Motels
Warehouses
Nursing Homes
Mobile Home Parks
Schools
Service Stations
Marinas
Wetlands
QUINLIVAN APPRAISAL
88
LEGAL DESCRIPTION
The South 247.33 feet of Tract 7, "Matheson Estate", according to
the Flat thereof, as recorded in Flat Book 46 at Page 86, of the
Public Records of Dade County, Florida, as measured at right
angles to the Southerly Boundary of Tract 7.
AND
Begin at the SE corner of Tract 9 of a Subdivision of a Portion
of Matheson Estate according to the plat thereof recorded in Plat
Book 46 at Page 86 of the Public Records of Dade County,
Florida; thence run due East along the South boundary line of
Tract 7 of the aforesaid plat of Matheson Estate according to the
plat thereof as recorded in Plat Book 46 at Page 86 of the Public
Records of Dade County, Florida for a distance of 269.45 feet to
a point; thence run due South along a line for a distance of 105
feet to a point on the North right of way line of West McIntyre
Street as shown on the Plat of Tropical Isle Home Subdivision
according to the Plat thereof recorded in Flat Book 5b at Page 64
of the Public Records of Dade County, Florida and also being
described in Deed Book 3358 at Page 279 of the public records of
Dade County, Florida; thence run due West along the North right
of way line of the aforesaid West McIntyre Street for a distance
of 260.71 feet to the beginning of a tangential circular curve;
thence run in a Northwesterly and Northerly direction along said
circular curve having a radius of 25 feet thru a central angle of
100° 31'53" for an arc distance of 43.86 feet to a point of
compound curvature and a point on the Easterly right of way line
of Fernwood Road as shown on the aforesaid plat of Tropical Isle
Homes Subdivision; thence run in a Northeasterly direction along
the Easterly right of way line of said Fernwood Road and being a
circular curve having a radius of 1666.37 feet thru a central
angle of 20 .39'01" for an arc distance of 77.08 feet to the
POINT OF BEGINNING.
Containing 3.097 Arces more or less