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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) PORTION OF TRACT 7 (46-86) 0.n . 1. •O--- 107 ,31 or w oo. TRACT 7 (46-86) • • • ■ • MP•S ea .we: cnnT n...T..0m' � Y d" v e rKl. X3.1 McINTYRE STREET • 00T w • .r broarled SITE LOCATION SURVEYORS NOTES • • a • aa••M r.tr Imes MuP▪ M**. Wt Co urn ...m um •e 0.110 w. AM A 4.-.•a Ttlavne - •3 . 3'50 O 4▪ .1 3 MOT 10. rn Moe KM. Moat 01. fY143 CAMK MOM ffe..M n eo,6 r. .tt reM1. an If1O1 Mtge. 4 tIu0t0 LOOM. •g•01f TIOh Ms So uth 0 a7 .3i f eat of TYNt 7. 14tM•w Amts1* , .00. 0430 to t0. 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M N� le the ee S lb. M al f • *0. 01.400 4.4 • 4 tt•1 10301• 0014 l aee t1.4 4 a4. ,4.a 4.0 . 055 00 TA. ▪ v•il e. oft1 i4. •1 .11 .0 bu4.W lb• Fl orid. g •.4. .1 load S orer.,.. II •g.1 .04 70 471 ,500 7 301 0.04. P 1 P PO INN Wa/ S 1 .1..0. 0/3.11, 0011 DRAWN f•4 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 o-/ ;' Z`. ;` / /(//_//_////_////7//////////////////e!') EXIST. 8' BRICK WALKWAY ,,; 0 t PL ANTER9 MH. C8. 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: $2,200,000 QUINLIVAN APPRAISAL 81 QUINLIVAN APPRAISAL ASSUMPTIONS AND LIMITING CONDITIONS -vY.t?T ^�.v •.Av:vvvv:nwi.•.•.,v:.•:: •: S '.i'h'•i:•i:t:•i'?Y:+: vii':ibi':{•X tr':i :•�^'r•r i'J: ry till :..5 .. :,u.:?{::::{:isvi:%ti. t;{.is;is:;;i{::t::}v:::i'}}•:t•:.:: � ' .. t....,. ...9 .. .: t , ..2,•.:•: :iw• • • •:tA:i:•33:+ •. : ,S •: :.3.:...3:• •:::•.a::�::�:ta::a:�: t: :•ita:•:t•3 ::.,•.. •.::::•::•r,: !C::+ 'r :t-.,•::.,•.t,,,..•�t•.: �:t:t•::::: r t5 :.:... {r :xc •a.•ti: �o-33•.,:.:., ,.. ati:.t•: .c: t..:..:.,:iirt•>3>:•53x?•i:,:t• '+.•5:!t%:3.::.•::......... ..:..;:; ':.:.......c. ; .. t;::��:::!•: •::....v:.•Aei4wi:N:,vi;•.....:$£'t;$4?St�..'�n'f^..'].{$:^.}: •.fit•::: �::::: v: .; .v.... ...................... •v: .. 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