<PAGE>
_____________________________________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_____________________________________
AMENDMENT NO. 1 TO
SCHEDULE 13E-3
RULE 13E-3 TRANSACTION STATEMENT
(Pursuant to Section 13(e) of the Securities Exchange Act of 1934)
RIVERCHASE INVESTORS I, LTD.
(Name of Issuer)
COLONIAL REALTY LIMITED PARTNERSHIP
JOHN H. MCCLINTOCK, JR., JAMES H. PUGH, JR., BATTERY PARK CAPITAL CORP.,
THOMAS H. LOWDER, JAMES K. LOWDER AND ROBERT E. LOWDER
(Name of Person(s) Filing Statement)
UNITS OF LIMITED PARTNERSHIP INTEREST
(Title of Class of Securities)
None
(CUSIP Number of Class of Securities)
_________________
Charles A. McGehee J. Warren Gorrell, Jr., Esq.
Colonial Realty Limited Partnership Joseph G. Connolly, Jr., Esq.
2101 6th Avenue North Hogan & Hartson L.L.P.
Suite 750 555 13th Street, N.W.
Birmingham, AL 35203 Washington, D.C. 20004-1109
(202) 637-5600
(Name, Address and Telephone Number of Persons Authorized to Receive Notices and
Communications on Behalf of Persons Filing Statement)
This statement is filed in connection with (check the appropriate box):
a. [X] The filing of solicitation materials or an information statement
subject to Regulation 14A, Regulation 14C, or Rule 13e-3(c) under the Securities
Exchange Act of 1934.
b. [_] The filing of a registration statement under the Securities Act of
1933.
c. [_] A tender offer.
d. [_] None of the above.
Check the following box if the soliciting materials or information statement
referred to in checking box (a) are preliminary copies. [X]
Calculation of Filing Fee
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Transaction Valuation (1) Amount of Filing Fee (1)
$8,480,000 $1,696
- --------------------------------------------------------------------------------
</TABLE>
(1) Determined in accordance with Rule 0-11(c) of the Securities Exchange Act
of 1934. The fee was computed on the basis of the aggregate dollar amount
proposed to be paid by Colonial Realty Limited Partnership, a subsidiary of
Colonial Properties Trust, for substantially all of the assets of the Issuer.
[X] Check box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the Form
or Schedule and the date of Filing.
Amount Previously Paid: $1,696
Form or Registration No.: Schedule 14A
Filing Party: Colonial Realty Limited Partnership
Date Filed: November 10, 1997
_______________________________________________________________
<PAGE>
INTRODUCTION
------------
This Amendment No. 1 to Rule 13e-3 Transaction Statement on Schedule 13E-3
is being filed as an amendment to the Schedule 13E-3 previously filed with the
Securities and Exchange Commission (the "Commission") on November 9, 1997 by
Colonial Realty Limited Partnership (the "Purchaser") and John H. McClintock,
Jr., James H. Pugh, Jr., Battery Park Capital Corp., Thomas H. Lowder, James K.
Lowder and Robert E. Lowder, each a general partner (the "General Partners") of
Riverchase Investors I, Ltd. (the "Partnership"), in connection with the
proposed sale (the "Sale) of Riverchase Apartments -- Phase I (the "Project") by
the Partnership to the Purchaser pursuant to a Real Estate Sales Contract dated
September 2, 1997 (the "Sales Contract") between the Partnership and the
Purchaser. Consummation of the Sale will constitute the sale of substantially
all of the assets of the Partnership. The Amended and Restated Certificate and
Agreement of Limited Partnership (the "Partnership Agreement") of the
Partnership provides that the Partnership shall be dissolved upon a sale of all
interests in the Project and any other assets of the Partnership. Accordingly,
the consummation of the Sale will result in the dissolution of the Partnership
and distribution in liquidation as provided in the Partnership Agreement. This
Amendment No. 1 to Schedule 13E-3 is being filed with the Commission
concurrently with an amendment to the preliminary draft Consent Solicitation
Statement on Preliminary Schedule 14A filed by the Partnership and the General
Partners (the "Amended Consent Solicitation Statement"). A copy of the Amended
Consent Solicitation Statement is attached hereto as Exhibit 17(d).1.
CROSS REFERENCE SHEET
---------------------
The following cross reference sheet is being supplied pursuant to General
Instruction F to Schedule 13E-3 and shows the location in the Amended Consent
Solicitation Statement of the information required to be included in response to
the items of this statement. The information contained in the Amended Consent
Solicitation Statement, including all appendixes thereto, is hereby expressly
incorporated herein by reference and the responses to each item are qualified in
their entirety by reference to the information contained in the Amended Consent
Solicitation Statement and the appendixes thereto.
Item in Where Located in
Schedule 13E-3 Schedule 14A
- -------------- ------------
Item 1(a)...................... "SUMMARY," "SPECIAL FACTORS"
Item 1(b)...................... "SUMMARY," "VOTING RIGHTS AND
INFORMATION--Record Date"
Item 1(c) ..................... "SPECIAL FACTORS--Background of the
Sale"
Item 1(d) ..................... "SELECTED FINANCIAL INFORMATION,"
"MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS"
Item 1(e)--(f)................. Not applicable
Item 2 ........................ "SUMMARY," "SPECIAL FACTORS--
Background of the Sale"
Item 3(a)(1)................... Not applicable
Item 3(a)(2)................... "SUMMARY," "SPECIAL FACTORS--
Background of the Sale," "--Purpose
of the Sale," "--Alternatives
Considered," "--Determination of the
Purchase Price"
Item 3(b)...................... Not applicable
Item 4(a)...................... "SUMMARY," "SPECIAL FACTORS," "SPECIAL
CONSIDERATIONS," "THE AMENDMENT
PROPOSAL," "THE SALE PROPOSAL,"
<PAGE>
"DISTRIBUTION OF SALE PROCEEDS AND
DISSOLUTION OF PARTNERSHIP"
Item 4(b)...................... "SUMMARY," "SPECIAL FACTORS--Interests
of Certain Persons; Conflicts of
Interest"
Item 5(a)(g) .................. "SUMMARY," "SPECIAL FACTORS--Plans for
the Partnership; Certain Effects of
the Sale," "THE SALE PROPOSAL,"
"DISTRIBUTION OF SALE PROCEEDS AND
DISSOLUTION OF PARTNERSHIP"
Item 6(a)...................... "SUMMARY," "SPECIAL FACTORS--
Determination of the Purchase Price"
Item 6(b)...................... "SPECIAL FACTORS--Opinion of Stanger,"
"--Appraisal Report" and "VOTING
RIGHTS AND INFORMATION"
Item 6(c) ..................... "SUMMARY," "SPECIAL FACTORS--
Determination of the Purchase Price"
Item 6(d)...................... Not applicable
Item 7(a)...................... "SPECIAL FACTORS--Purpose of the Sale"
Item 7(b)...................... "SPECIAL FACTORS--Background of the
Sale," "-- Alternatives Considered,"
"SPECIAL CONSIDERATIONS--No Acceptable
Third-Party Bids Received"
Item 7(c)...................... "SPECIAL FACTORS"
Item 7(d)...................... "SPECIAL FACTORS--Plans for the
Partnership; Certain Effects of the
Sale," "SPECIAL CONSIDERATIONS,"
"DISTRIBUTION OF SALE PROCEEDS AND
DISSOLUTION OF THE PARTNERSHIP,"
"FEDERAL INCOME TAX CONSEQUENCES"
Item 8(a)(b)................... "SUMMARY," "SPECIAL FACTORS--
Determination of the Purchase Price,"
"--Position of the General Partners;
Fairness of the Proposed Sale,"
"SPECIAL CONSIDERATIONS--Sale Contract
Not Negotiated at Arms Length,"
"--Conflicts of Interest of the
General Partners"
Item 8(c)...................... "SUMMARY," "VOTING RIGHTS AND
INFORMATION"
Item 8(d)...................... "SPECIAL FACTORS--Purpose of the Sale,"
"--Determination of the Purchase
Price"
Item 8(e)...................... "SUMMARY," "SPECIAL FACTORS--
Determination of the Purchase Price"
Item 8(f)...................... "SPECIAL FACTORS--Background of the
Sale," "-- Alternatives Considered"
Item 9(a)(c)................... "SUMMARY," SPECIAL FACTORS--
Determination of the Purchase Price,"
"--Position of the General Partners;
Fairness of the Proposed Sale,"
"--Opinion of Stanger," "--Appraisal
Report," "-- Position of Colonial and
the Operating Partnership Regarding
Fairness of the Proposed Sale,"
"SPECIAL CONSIDERATIONS--Sales Contract
Not Negotiated at Arm's Length"
Item 10(a)..................... "SUMMARY," "SPECIAL FACTORS--Interests
of Certain Persons; Conflicts of
Interest," "VOTING RIGHTS AND
INFORMATION--Record Date"
<PAGE>
Item 10(b)...................... Not applicable
Item 11......................... Not applicable
Item 12(a)...................... "SUMMARY," "SPECIAL FACTORS--Interests
of Certain Persons; Potential Conflicts
of Interest," "VOTING RIGHTS AND
INFORMATION--Record Date"
Item 12(b)...................... "SUMMARY," "SPECIAL FACTORS--Position
of the General Partners; Fairness of
the Proposed Sale"
Item 13(a)(b)................... "SPECIAL CONSIDERATIONS--No Appraisal
Rights"
Item 13(c)...................... Not applicable
Item 14(a)(1), (a)(2) and (a)(4) "SELECTED FINANCIAL INFORMATION,"
"INDEX TO FINANCIAL STATEMENTS"
Item 14(a)(3) .................. Not applicable
Item 14(b)...................... Not applicable
Item 15(a)...................... "SUMMARY," "VOTING RIGHTS AND
INFORMATION--Cost of Solicitation"
Item 15(b)...................... "SUMMARY," "SPECIAL FACTORS--Opinion of
Stanger,"
Item 16......................... All information in the Consent
Solicitation Statement and Notice to
Unitholders
<PAGE>
ITEM 1. ISSUER AND CLASS OF SECURITY SUBJECT TO THE TRANSACTION
(a) The information set forth in "Summary" and "Special Factors" in
the Amended Consent Solicitation Statement is hereby incorporated herein by
reference.
(b) The information set forth in "Summary" and "Voting Rights and
Information -- Record Date" in the Amended Consent Solicitation Statement is
hereby incorporated herein by reference.
(c) The information set forth in "Special Factors--Background of the
Sale--The Partnership" in the Amended Consent Solicitation Statement is hereby
incorporated herein by reference.
(d) The information set forth in "Selected Financial Information" and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" in the Amended Consent Solicitation Statement is hereby incorporated
herein by reference.
(e)--(f) Not applicable.
ITEM 2. IDENTITY AND BACKGROUND
(a)--(b) This Amendment No. 1 to the Schedule 13E-3 is being filed by
the Purchaser and the General Partners. The General Partners are affiliates of
the Partnership. The information set forth in "Summary--Persons Making the
Solicitation" and "Special Factors--Background of the Sale--The Partnership" in
the Amended Consent Solicitation Statement is hereby incorporated herein by
reference.
(c)--(d)
John H. McClintock, Jr., for more than five years, was a director and
Chairman of the Board of Epoch Properties, Inc., a Florida-based real estate
development organization founded in 1970. Mr. McClintock is currently Chairman
of the Board of Contravest, Inc., a real estate development firm in Orlando,
Florida.
James H. Pugh, Jr., for more than five years has been a director of
Epoch Properties, Inc. and Epoch Management, Inc., and President of Epoch
Properties, Inc. In addition, he is a director of substantially all affiliates
of Epoch Properties, Inc.
Battery Park Capital Corp., was incorporated in New York in 1978.
Thomas H. Lowder, is President and Chief Executive Officer of Colonial
and Colonial Properties Holding Company ("CPHC"), a trustee of Colonial, and a
director of CPHC and Colonial Properties Services, Inc. ("CPSI"). Thomas Lowder
became President of Colonial in 1976.
James K. Lowder, is a trustee of Colonial and director of CPHC and
CPSI. James Lowder is currently Chairman of the Board of The Colonial Company,
Lowder New Homes and Lowder Realty and has been primarily engaged in activities
related to these businesses for more than five years.
Robert E. Lowder, is Chairman of the Board, Chief Executive Officer and
President of the Colonial BancGroup, Inc., a multi-bank holding company based in
Montgomery, Alabama. Robert Lowder is also Chairman of the Board of Colonial
Broadcasting Company which operates four radio stations in Montgomery and one
radio station in Chattanooga, Tennessee.
<PAGE>
(e)--(f) During the past five years, no person listed above has been
convicted in a criminal proceeding or has been party to a civil proceeding of a
judicial or administrative body of competent jurisdiction and as a result of
such proceedings was or is subject to a judgment, decree or final order
enjoining further violations of, or prohibiting activities subject to, federal
or state securities laws or finding any violations of such laws.
(g) Each of the General Partners who is a natural person is a United
States citizen.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS
(a) (1) Not applicable.
(a) (2) The information set forth in "Summary" and "Special Factors--
Background of the Sale," "--Purpose of the Sale," "--Alternatives Considered,"
and "--Determination of the Purchase Price" in the Amended Consent Solicitation
Statement is hereby incorporated herein by reference.
(b) The information set forth in "Summary" "Special Factors--
Background of the Sale," "--Purpose of the Sale," "--Alternatives Considered,"
and "--Determination of the Purchase Price" in the Amended Consent Solicitation
Statement is hereby incorporated herein by reference.
ITEM 4. TERMS OF THE TRANSACTION
(a) The information set forth in "Summary" "Special Factors," "Special
Considerations," "The Amendment Proposal," "The Sale Proposal," and
"Distribution of Sale Proceeds and Dissolution of Partnership" in the Amended
Consent Solicitation Statement is hereby incorporated herein by reference.
(b) The information set forth in "Summary" and "Special
Factors--Interests of Certain Persons; Conflicts of Interest" in the Amended
Consent Solicitation Statement is hereby incorporated herein by reference.
ITEM 5. PLANS OR PROPOSALS OF THE ISSUER OR AFFILIATE
(a)--(g) The information set forth in "Summary" "Special Factors--Plans
for the Partnership; Certain Effects of the Sale," "The Sale Proposal," and
"Distribution of Sale Proceeds and Dissolution of Partnership" in the Amended
Consent Solicitation Statement is hereby incorporated herein by reference.
ITEM 6. SOURCE AND AMOUNTS OF FUNDS OR OTHER CONSIDERATION
(a) The information set forth in "Summary" and "Special Factors--
Determination of the Purchase Price" in the Amended Consent Solicitation
Statement is hereby incorporated herein by reference.
(b) The information set forth in "Special Factors--Opinion of
Stanger," "--Appraisal Report" and "Voting Rights and Information" in the
Amended Consent Solicitation Statement is hereby incorporated herein by
reference.
(c) The information set forth in "Special Factors--Determination of
the Purchase Price" in the Amended Consent Solicitation Statement is hereby
incorporated herein by reference.
(d) Not applicable.
<PAGE>
ITEM 7. PURPOSE(S), ALTERNATIVES, REASONS AND EFFECTS
(a) The information set forth in "Special Factors--Purpose of the Sale"
in the Amended Consent Solicitation Statement is hereby incorporated herein by
reference.
(b) The information set forth in "Special Factors--Background of the
Sale," "--Alternatives Considered" and "Special Considerations--No Acceptable
Third Party Bid Received" in the Amended Consent Solicitation Statement is
hereby incorporated herein by reference.
(c) The information set forth in "Special Factors" in the Amended Consent
Solicitation Statement is hereby incorporated herein by reference.
(d) The information set forth in "Special Factors--Plans for the
Partnership; Certain Effects of the Sale," "Special Considerations",
"Distribution of Sale Proceeds and Dissolution of the Partnership" and "Federal
Income Tax Consequences" in the Amended Consent Solicitation Statement is hereby
incorporated herein by reference.
ITEM 8. FAIRNESS OF THE TRANSACTION
(a)--(b) The information set forth in "Summary," "Special Factors--
Determination of the Purchase Price," "--Position of the General Partners;
Fairness of the Proposed Sale," "Special Considerations--Sale Contract Not
Negotiated at Arms Length," and "Conflicts of Interest of the General Partners"
in the Amended Consent Solicitation Statement is hereby incorporated herein by
reference.
(c) The information set forth in "Summary" and "Voting Rights and
Information" in the Amended Consent Solicitation Statement is hereby
incorporated herein by reference.
(d) The information set forth in "Special Factors--Purpose of the Sale"
and "--Determination of Purchase Price" in the Amended Consent Solicitation
Statement is hereby incorporated herein by reference.
(e) The information set forth in "Summary" and "Special Factors--
Determination of the Purchase Price" in the Amended Consent Solicitation
Statement is hereby incorporated herein by reference.
(f) The information set forth in "Special Factors--Background of the
Sale" and "--Alternatives Considered" in the Amended Consent Solicitation
Statement is hereby incorporated herein by reference.
ITEM 9. REPORTS, OPINIONS, APPRAISALS AND CERTAIN NEGOTIATIONS
(a)--(c) The information set forth in "Summary," ""Special Factors--
Determination of the Purchase Price," "--Position of the General Partners;
Fairness of the Proposed Sale," "--Opinion of Stanger," "--Appraisal Report," "-
- -Position of Colonial and the Operating Partnership Regarding Fairness of the
Proposed Sale," and "Special Considerations--Sales Contract Not Negotiated at
Arms Length" in the Amended Consent Solicitation Statement is hereby
incorporated herein by reference.
A copy of the Stanger Fairness Opinion is attached as Appendix B to the
Amended Consent Solicitation Statement.
<PAGE>
ITEM 10. INTEREST IN THE SECURITIES OF THE ISSUER
(a) The information set forth in "Summary," "Special Factors--
Interests of Certain Persons; Conflicts of Interest" and "Voting Rights and
Information--Record Date" in the Amended Consent Solicitation Statement is
hereby incorporated herein by reference.
(b) Not applicable.
ITEM 11. CONTRACTS, ARRANGEMENTS OR UNDERSTANDING WITH RESPECT TO THE ISSUER'S
SECURITIES
Not applicable.
ITEM 12. PRESENT INTENTION AND RECOMMENDATION OF CERTAIN PERSONS WITH REGARD TO
THE TRANSACTION
(a) The information set forth in "Summary," "Special Factors--
Interests of Certain Persons; Conflicts of Interest" and "Voting Rights and
Information--Record Date" in the Amended Consent Solicitation Statement is
hereby incorporated herein by reference.
(b) The information set forth in "Summary" and "Special Factors--
Position of the General Partners; Fairness of the Proposed Sale" in the Amended
Consent Solicitation Statement is hereby incorporated herein by reference.
ITEM 13. OTHER PROVISIONS OF THE TRANSACTION
(a)--(b) The information set forth in "Special Considerations--No
Appraisal Rights" in the Amended Consent Solicitation Statement is hereby
incorporated herein by reference.
(c) Not applicable.
ITEM 14. FINANCIAL INFORMATION
(a)(1)--(2) and (4) The information set forth in "Selected Financial
Information" and "Index to Financial Statements" in the Amended
Consent Solicitation Statement is hereby incorporated herein by
reference.
(a)(3) Not applicable.
(b) Not applicable.
ITEM 15. PERSONS AND ASSETS EMPLOYED, RETAINED OR UTILIZED
(a) The information set forth in "Summary" and "Voting Rights and
Information--Cost of Solicitation" in the Amended Consent Solicitation
Statement is hereby incorporated herein by reference.
(b) The information set forth in "Summary" and "Special Factors--
Opinion of Stanger" in the Amended Consent Solicitation Statement is
hereby incorporated herein by reference.
<PAGE>
ITEM 16. ADDITIONAL INFORMATION
The information set forth in the Amended Consent Solicitation
Statement and the Appendixes thereto is incorporated herein by
reference.
ITEM 17. MATERIAL TO BE FILED AS EXHIBITS
(a) Credit Agreement between the Operating Partnership and
SouthTrust Bank, National Association, AmSouth Bank, Wells Fargo Bank,
National Association, Wachovia Bank, N.A., First National Bank of
Commerce, N.A., and PNC Bank, Ohio, National Association dated July
10, 1997.*
(b).1 The Stanger Fairness Opinion included as Appendix B to the
Amended Consent Solicitation Statement is hereby incorporated by
reference.
(b).2 The Appraisal Report of Consortium Appraisal and Consulting
Services, Inc., dated as of January 22, 1998.
(c) The Sales Contract dated as of September 2, 1997 included as
Appendix A to the Amended Consent Solicitation Statement is hereby
incorporated by reference.
(d) The Amended Consent Solicitation Statement relating to the
proposed Sale is hereby incorporated by reference.
(e) Not applicable.
(f) Not applicable.
* Incorporated by reference from the Quarterly Report on Form 10-Q for period
ended June 30, 1997 for Colonial Properties Trust (SEC File No. 1-12358),
filed as Exhibit 10.14 therein.
<PAGE>
SIGNATURES
After due inquiry, and to the best of its knowledge and belief, each of
the undersigned certifies that the information set forth in this statement is
true, complete and correct.
John H. McClintock, Jr.
James H. Pugh, Jr.
Battery Park Capital Corp.
Thomas H. Lowder
James K. Lowder
Robert E. Lowder
GENERAL PARTNERS
Date: February 27, 1998 By: /s/ Thomas A. Lowder
--------------------------
Thomas A. Lowder
Attorney-in-Fact
Date: February 27, 1998 Colonial Realty Limited Partnership
By: Colonial Properties Holding Company, Inc.
Its General Partner
By: /s/ Charles A. McGehee
-------------------------
Charles A. McGehee
Executive Vice President
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION PAGE NO.
- ----------- ----------- --------
<S> <C> <C>
(a) Credit Agreement between the Operating Partnership and SouthTrust Bank,
National Association, AmSouth Bank, Wells Fargo Bank, National Association,
Wachovia Bank, N.A., First National Bank of Commerce, N.A., and PNC Bank,
Ohio, National Association dated July 10, 1997./*/
(b).1 The Stanger Fairness Opinion. /**/
(b).2 The Appraisal Report of Consortium Appraisal and Consulting Services, Inc.,
dated as of January 22, 1998.
(c) The Sales Contract dated as of September 2, 1997. /***/
(d) The Amended Consent Solicitation Statement. /*****/
(e) Not applicable.
(f) Not applicable.
</TABLE>
* Incorporated by reference from the Quarterly Report on Form 10-Q for period
ended June 30, 1997 for Colonial Properties Trust (SEC File No. 1-12358)
filed as Exhibit 10.14 therein.
** Incorporated by reference from Appendix B to the Amended Consent
Solicitation Statement.
*** Incorporated by reference from Appendix A to the Amended Consent
Solicitation Statement.
**** Incorporated by reference from the Preliminary Schedule 14A filed with the
Commission on February 27, 1998.
<PAGE>
Exhibit (b)(2)
___________________________________CONSORTIUM___________________________________
--------------------------------------------------------
THE APPRAISAL OF
AN EXISTING 248-UNIT APARTMENT PROJECT
KNOWN AS COLONIAL VILLAGE AT RIVER HILLS
PHASE I APARTMENTS WHICH
ARE LOCATED ON THE SOUTH SIDE OF TEMPLE
TERRACE HIGHWAY, IN THE CITY OF
TEMPLE TERRACE,
HILLSBOROUGH COUNTY, FLORIDA.
--------------------------------------------------------
PREPARED FOR
COLONIAL PROPERTIES, INC.
DATE OF INSPECTION
JANUARY 22, 1998
DATE OF VALUATION
JANUARY 22, 1998
DATE OF REPORT
FEBRUARY 11, 1998
________________________________________________________________________________
<PAGE>
___________________________________CONSORTIUM___________________________________
February 11, 1998
Colonial Properties, Inc.
2101 6th Avenue North, Suite 750
Birmingham, Alabama 35202-1687
Gentlemen:
At your request, our firm has inspected and appraised an existing 248-unit
apartment project known as Phase I of Colonial Village At River Hills
Apartments. The subject project is located on the south side of Temple Terrace
Highway, in the City of Temple Terrace, in Hillsborough County, Florida.
The objective of this appraisal was to estimate the market value of the fee
simple interest in the real estate, including chattels, under market conditions
prevailing on January 22, 1998.
The market value estimate as contained herein is contingent upon the following
conditions:
1. The subject project opened April 1987 and is currently 89.5% occupied.
Therefore, the Appraiser was unable to inspect the interior of the occupied
units within the subject development. This report is subject to verification
of the unit mix as set out herein by survey.
2. A certified survey of the subject project verifying the site dimensions, area
calculations, building locations, building area calculations and the legal
description as set out in this appraisal.
3. The Appraiser has visually inspected the subject project and has found it to
be in generally good overall condition. The Appraiser has not reviewed
subsoil, structural, mechanical or other engineering reports as to the
current condition of the subject project. Such reports should be obtained.
Based upon the Appraiser's visual inspections, and discussions with project
management, several items of deferred maintenance were noted. These items of
deferred maintenance included:
1. The building exteriors need to be repainted.
2. Approximately 92 stairwells need to be replaced.
3. The parking lots and circulation drives need to be repaired and re-
sealed.
______Mailing Address: Post Office Drawer 2129, Winter Park, Florida 32790______
(407) 647-0800 Fax # (407) 645-2301
<PAGE>
Colonial Properties
February 11, 1998
Page 2
The cost to cure these items of deferred maintenance has been estimated at
approximately $315,000 based upon a review of cost estimates provided by
project management.
4. The subject property has been valued as if unaffected by legal limitations
upon its operation.
By virtue of the Appraiser's inspection, investigation and analyses, it is the
opinion of the Appraiser that the estimated market value of the fee simple
interest in Phase I of the subject Colonial Village At River Hills Apartments,
as described herein, as of January 22, 1998, equaled:
EIGHTY MILLION FOUR HUNDRED FIFTY THOUSAND DOLLARS
($8,450,000)
The undersigned certify that, to the best of our knowledge and belief, the
statements of fact contained in this report are true and correct. The reported
analyses, opinions, and conclusions are limited only by the reported assumptions
and limiting conditions, and are our personal, unbiased professional analyses,
opinions, and conclusions. We have no present or prospective interest in the
property that is the subject of this report, and we have no personal interest or
bias with respect to the parties involved. Our compensation is not contingent
on an action or event resulting from the analyses, opinions, or conclusions in,
or the use of, this report. Our compensation is further not contingent upon the
reporting of a predetermined value or directions 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. Our analyses, opinions, and
conclusions were developed, and this report has been prepared, in conformity
with the requirements of the Code of Professional Ethics and the Standards of
Professional Practice of The Appraisal Institute, The Uniform Standards of
Professional Appraisal Practice, and the requirements of the state of Florida
for state-certified Appraisers. The use of this report is subject to the
requirements of The Appraisal Institute relating to review by its duly
authorized representatives.
The research, data accumulation, personal on-site inspections of the subject
property and comparables, verifications/confirmations, valuation analysis, and
composition of the attached appraisal report were conducted and completed by
Charles B. Byrd. The report was reviewed by Philip F. Wood, MAI, and this
review process consisted of: "on-site" physical inspections of the comparable
sales and rentals; an on-site physical inspection of the subject property, the
area, and the subject neighborhood; and the reading and examination of the
completed report.
<PAGE>
Colonial Properties
February 11, 1998
Page 3
As of the date of this report, Philip F. Wood has completed the requirements of
the continuing education program of the Appraisal Institute. No one provided
significant professional assistance to the persons signing this report. We do
not authorize the out-of-context quoting from or partial reprinting of this
appraisal report. Further, neither all nor any part of this appraisal report
shall be disseminated to the general public by the use of media for public
communication without the prior written consent of the Appraiser(s) signing this
appraisal report.
Please refer to the attached, COMPLETE SELF-CONTAINED APPRAISAL REPORT for
documentation of this value estimate. If any additional information is needed,
please advise.
NOTE: THE INFORMATION CONTAINED IN THIS REPORT IS COPYRIGHTED. THE WILLFUL
UNAUTHORIZED USE OF ANY CONTENTS OF THIS REPORT CONSTITUTES COPYRIGHT
INFRINGEMENT WHICH COULD SUBJECT THE INFRINGER TO CIVIL DAMAGES AND CRIMINAL
PENALTIES PURSUANT TO (S)(S)504 AND 506 OF THE FEDERAL COPYRIGHT REVISION ACT OF
------------------------------
1976. THE FLORIDA REAL ESTATE LICENSE LAW (CHAPTER 475-PART II, FLORIDA
=======
STATUTES DEFINES AN APPRAISAL, AN APPRAISAL SERVICE, AN APPRAISAL ASSIGNMENT AND
========
AN ANALYSIS ASSIGNMENT. BE ADVISED THAT THIS REPORT FALLS WITHIN THESE
DEFINITIONS ONLY IF PROPERLY EXECUTED HEREIN. PROPER EXECUTION INCLUDES AN
ORIGINAL BLUE-INK SIGNATURE BY THE APPRAISER OVERLAID BY A RAISED SEAL. ANY
DEVIATION FROM THIS MEANS THAT THE REPORT IS COPYRIGHT INFRINGED, UNAUTHORIZED
AND DOES NOT REPRESENT SERVICES PROVIDED BY THE APPRAISERS OR THE FIRM.
Respectfully submitted,
CONSORTIUM APPRAISAL, INC. CONSORTIUM APPRAISAL, INC.
/s/ Philip F. Wood /s/ Charles B. Byrd
Reviewed By:
Philip F. Wood, MAI, SRPA Charles B. Byrd
President (Corporate Seal) Staff Appraiser
State-Certified General Real State-Certified General Real
Estate Appraiser Estate Appraiser
Florida License No. 0000777 Florida License No. 0000908
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TABLE OF CONTENTS
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<TABLE>
<S> <C>
PURPOSE, SCOPE AND FUNCTION.............................................. 1
LOCATION................................................................. 2
LEGAL DESCRIPTION........................................................ 3
AREA DESCRIPTION......................................................... 5
NEIGHBORHOOD DESCRIPTION................................................. 17
SITE DESCRIPTION......................................................... 19
IMPROVEMENTS DESCRIPTION................................................. 30
ZONING AND LAND USE...................................................... 41
REAL ESTATE ASSESSMENT AND TAXES......................................... 43
FIVE-YEAR SALES HISTORY.................................................. 44
HIGHEST AND BEST USE..................................................... 46
VALUATION................................................................ 54
CORRELATION.............................................................. 112
DEFINITION OF MARKET VALUE............................................... 114
DEFINITION OF HIGHEST AND BEST USE....................................... 114
LIMITING CONDITIONS AND ASSUMPTIONS...................................... 115
EXHIBITS................................................................. 120
</TABLE>
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PURPOSE, SCOPE AND FUNCTION
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The subject property consists of a 248-unit multifamily rental apartment
development which is known as Colonial Village At River Hills Phase I
apartments. The subject property is located along the south side of Temple
Terrace Highway, just east of the Hillsborough River, in Temple Terrace,
Florida.
The purpose of this appraisal was to estimate the market value of the fee simple
interest in the subject real estate, including chattels, under market conditions
prevailing on January 22, 1998.
The scope of the appraisal assignment included a physical inspection of the
subject site and improvements; a review of site and building plans for the
subject property; discussions with county planning, zoning and tax officials
regarding the current zoning, future land use designation and real estate
assessments applicable to the development; a review of the preceding five-year
sales history of the subject property; an analysis of the Tampa area; an
analysis of the subject neighborhood and market area relative to past and
present development trends and current market conditions; a search for past
sales and current listings involving similar sites and improved properties; an
analysis of rental rates and terms for similar improved properties located in
the subject's general market area; an analysis of operating expenses relative to
similar properties in the subject's general market area; and an analysis of the
subject property's historic operations. In developing value estimates for the
subject property, the Appraiser has employed all three of the traditional
valuation methods, which include the Cost, Income and Market Comparison
Approaches.
The function of this appraisal is to provide a basis for the decision making
process of the client.
1
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LOCATION MAP
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[LOCATION MAP APPEARS HERE]
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LOCATION
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The subject property is located on the south side of Temple Terrace Highway,
just east of the Hillsborough River, in the city of Temple Terrace, Hillsborough
County, Florida.
The subject property reflects a current street address of 6900 Aruba Avenue,
Temple Terrace, Florida, 33637.
[LOCATION MAP APPEARS HERE]
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[DER CONSERVATION AREA MAP APPEARS HERE]
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LEGAL DESCRIPTION
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PHASE I
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Commence at the Northeast corner of the Southwest 1/4 of Section 23, Township 28
South, Range 19 East, Hillsborough County, Florida; thence South 00 degrees
27'23"East 54.78 feet along the East line of said Southwest 1/4 of Section 23 to
a Point on a curve on the southerly right-of-way line of Temple Terrace Highway
for a Point of Beginning; thence continue South 00 degrees 27'23" East 1,261,78
feet along said East line of the Southwest 1/4 of Section 23; thence leaving
said East line run North 82 degrees 06'57" West 87.83 feet to a point on a curve
concaved Southeasterly and having a radius of 900.93 feet; thence from a chord
bearing of North 09 degrees 07'03" East run Northerly 38.78 feet along the arc
of said curb through a central angle of 02 degrees 27'59" to a point of a
reverse curve concave Westerly and having a radius of 388.10 feet; thence
Northerly 37.56 feet along the arc of said curve through a central angle of 05
degrees 32'40" to a point on said curve; thence leaving said curve from a chord
bearing of North 07 degrees 34"42"East run South 89 degrees 32'37" West 77.49
feet; thence North 00 degrees 19'46" East 110.00 feet to a point on a curve
concave Southeasterly and having a radius of 470.03 feet; thence from a chord
bearing of South 74 degrees 8'55" West run Southwesterly 141.31 feet along the
arc of said curve through a central angle of 17 degrees 13'33" to the point of
reverse curve concave Northerly and having a radius of 230.00 feet; thence
Westerly 152.10 feet along the arc of said curve through a central angle of 37
degrees 53'21" to a point on said curve; thence from a tangent bearing of North
76 degrees 34'30" West run North 74 degrees 37'43" West 114.08 feet; thence
South 84 degrees 01'05" West 80.00 feet to a point on the Department of
Environmental Regulation Jurisdictional line; thence along said Department of
Environmental Regulation Jurisdictional line through the following courses and
distances: thence North 05 degrees 36'55" West 114.74 feet; thence North 05
degrees 36'55" East 118.94 feet; thence North 16 degrees 19'25" West 153.29
feet; thence North 27 degrees 10'01" East 175.30 feet; thence South 81 degrees
58'37" East 172.59 feet; thence North 64 degrees 8'28" East 86.26 feet; thence
North 84 degrees 48'14" East 119.00 feet; thence North 02 degrees 55'22" East
60.43 feet; thence North 54 degrees 26'59" East 146.93 feet; thence North 01
degrees 07'26" East 50.05 feet; thence South 77 degrees 43'27" West 101.63 feet;
thence South 21 degrees 32'09" West 69.81 feet; thence South 69 degrees 16'22"
West 64.97 feet; thence North 74 degrees 21'59" West 120.07 feet; thence North
82 degrees 14'02" West 157.46 feet; thence South 58 degrees 41'32" West 80.03
feet; thence South 26 degrees 34'34" West 212.67 feet; thence North 61 degrees
12'45" West 135.40 feet; thence North 60 degrees 38'03" West 83.54 feet; thence
North 01 degrees 40'17" West 58.60 feet; thence North 27 degrees 16'23" West
66.16 feet; thence North 29 degrees 06'59" West 48.87 feet; thence North 02
degrees 16'44" East 17.00 feet; thence South 51 degrees 39'50" West 62.73 feet;
thence South 50 degrees 10'02" West 31.41 feet; thence South 39 degrees 50'57"
West 53.89 feet; thence North 30 degrees 00'43" West 41.06 feet; thence North 11
degrees 19'35" West 27.22 feet; thence North 04 degrees 56'45" West 10.00 feet;
thence North 55 degrees 46'37" East 70.86 feet; thence North 67 degrees 38'07"
East 36.33 feet; thence North 00 degrees 23'39" West 55.06 feet; thence North 07
degrees 40'26" West 25.04 feet; thence North 62 degrees 06'33" East 14.23 feet;
thence North 35 degrees 20'49" West 45.50 feet; thence North 13 degrees 01'34"
West 33.14 feet; thence North 06 degrees 50'37" East 49.46 feet; thence North 10
degrees 01'03" West 43.04 feet; thence North 08 degrees 41'22" West 17.20 feet
to aforesaid southerly right-of-way line of Temple Terrace Highway; thence
leaving the Department of Environmental Regulation Jurisdictional line run North
86 degrees 40'21" East 701.57 feet along said Southerly right-of-way line to a
point of curvature of a curve concave Southerly and having a radius of 11,409.16
feet; thence Easterly 327.80 feet along the arc of said curve through a central
angle of 01 degrees 38'46" to the Point of Beginning.
Subject to easements and restrictions of record.
CONTAINING THEREIN 18.9000 ACRES.
Commence at the Northwest corner of the East 1/2 of the Southwest 1/4 of
Section 23, Township 28 South, Range 19 East, Hillsborough County, Florida;
thence North 87 degrees 26'20" East 152.48 feet along the North line of the
Southwest 1/4 of said Section 23; thence South 02 degrees 33'40" East 65.72 feet
to a point on the Southerly right-of-way line
3
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LEGAL DESCRIPTION: (CONT'D)
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run along said Department of Environmental Jurisdictional line through the
following courses and distances: thence South 08 degrees 41'122" East 17.20 feet
thence South 10 degrees 01'03" East 43.04 feet; thence South 06 degrees 50'37"
West 49.46 feet thence South 13 degrees 1'34" East 33.14 feet; thence South 35
degrees 20'49" East 45.50 feet; thence South 62 degrees 06'33" West 14.23 feet;
thence South 07 degrees 40'26" East 25.04 feet; thence South 00 degrees 23'30"
East 55.06 feet; thence South 67 degrees 38'07" West 36.33 feet; thence South 55
degrees 46'37" West 70.86 feet; thence South 04 degrees 56'45" East 10.00 feet;
thence South 11 degrees 19'35" East 27.22 feet; thence South 30 degrees 00'43"
East 41.06 feet; thence North 39 degrees 50'57" 53.89 feet; thence North 50
degrees 10'02" East 31.41 feet; thence North 51 degrees 39'39" East 62.73 feet;
thence South 02 degrees 16'44" West 17.00 feet; thence South 29 degrees 06'59"
East 48.87 feet; thence South 27 degrees 16'23" seconds East 66.16 feet; thence
South 01 degrees 40'17" East 58.60 feet; thence South 60 degrees 38'03" East
83.54 feet; thence South 61 degrees 12'49" East 135.40 feet; thence North 26
degrees 34'34" East 212.67 feet; thence North 58 degrees 41'32" East 80.03 feet;
thence South 82 degrees 14'02" East 157.46 feet; thence South 74 degrees 21'59"
East 120.07 feet; thence North 69 degrees 16'22" East 64.97 feet; thence North
21 degrees 32'09" East 69.81 feet; thence North 77 degrees 43'27" East 101.63
feet; thence South 01 degrees 07'26" West 50.05 feet; thence South 54 degrees
26'55" West 146.93 feet; thence South 02 degrees 55'22" West 60.43 feet; thence
South 84 degrees 48 minutes 14 seconds West 119.00 feet; thence South 64 degrees
28'28" West 86.26 feet; thence North 81 degrees 58'37" West 172.59 feet; thence
South 27 degrees 10'01" East 175.30 feet; thence South 16 degrees 19'25" East
153.29 feet; thence South 05 degrees 36'55" West 118.94 feet; thence South 05
degrees 58'55" East 114.74 feet; thence South 79 degrees 00'01" West 144.70
feet; thence South 13 degrees 13'51" East 71.08 feet; thence South 49 degrees
28'02" West 44.73 feet; thence South 17 degrees 13'44" West 98.48 feet; thence
South 84 degrees 19'20" West 129.34 feet; thence South 21 degrees 35'31" West
94.42 feet; thence South 00 degrees 51'01" East 181.91 feet; thence South 42
degrees 22'50" East 35.50 feet; thence South 13 degrees 33'22" East 125.15 feet;
thence South 02 degrees 56'09" East 149.34 feet; thence South 21 degrees 54'56"
East 64.42 feet; thence South 14 degrees 00'41 West 104.92' feet; hence South 41
degrees 20'29" East 106.23 feet; thence South 62 degrees 42'16" East 57.20 feet;
thence South 40 degrees 04'20" West 61.59 feet; thence South 86 degrees 26'49"
West 95.27 feet; thence leaving said Department of Environmental Regulation
Jurisdictional line run North 30 degrees 47'28" West 95.28 feet thence North 88
degrees 53'08" West 292.97 feet to a point on the West line of the East 1/2 of
the Southwest 1/4 of said Section 23; thence North 00 degrees 27'10" West 489.20
feet along said West line of the East 1/2 to a point near the waters edge of the
Hillsborough River; thence leaving said West line of the East 1/2 run along the
waters edge of said Hillsborough River through the following courses and
distances: thence North 37 degrees 53'41" East 44.38 feet; thence North 64
degrees 23'41" East 70.00 feet; thence North 22 degrees 23'41" East 25.00 feet;
thence North 03 degrees 16'19" West 57.50 feet; thence North 14 degrees 28'41"
East 97.50 feet; thence North 01 degrees 06'19" East 200.00 feet; thence North
20 degrees 49'06" West 61.91 feet; thence North 04 degrees 03'50" West 46.68
feet; thence North 06 degrees 10'22" West 60.26 feet; thence North 00 degrees
08'59" West 69.00 feet; thence South 04 degrees 51'58" West 76.00 feet; thence
South 38 degrees 19'40" West 48.31 feet; to aforesaid West line of the East 1/2
of Section 23; thence leaving the waters edge of the Hillsborough River, run
North 00 degree 27'10" West 60.73 feet along said West line of the East 1/2 of
Section 23 to a point near the waters edge of the Hillsborough River thence
leaving said West line of the East 1/2 run along the waters edge of said
Hillsborough River through the following courses and distances; thence North 33
degrees 23'05" East 51.73 feet; thence North 71 degrees 39'20" East 54.99 feet;
thence North 56 degrees 24'29" East 73.88 feet; thence North 57 degrees 00'48"
East 47.77 feet; thence North 30 degrees 20'11" East 111.81 feet; thence North
27 degrees 01'32" East 57.42 feet; thence North 01 degrees 17'07" East 74.06
feet; thence North 06 degrees 36'58" West 105.66 feet; thence North 07 degrees
00'14" East 69.06 feet; thence North 35 degrees 28'33" West 57.46 feet; thence
North 11 degrees 37'42" West 42.04 feet; thence North 04 degrees 49'36" East
89.11 feet; thence North 08 degrees 12'58" West 59.58 feet; thence North 02
degrees 08'40" East 84.60 feet; thence North 5 degrees 44'29" West 62.42 feet;
thence North 30 degrees 47'45" West 51.94 feet to the Point of Beginning.
Subject to easements and restrictions of record.
Containing therein 17.64 acres.
4
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[MAP APPEARS HERE]
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AREA DESCRIPTION
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The City of Tampa is located in west central Hillsborough County along the west
central Gulf Coast of the State of Florida. Hillsborough County is situated on
one of the finest protected harbors in the world with the county encompassing
1,072.5 square miles of land area and 24.2 square miles of inland water area.
The land elevation in Hillsborough County ranges from sea level to 179 feet
above sea level. The City of Tampa's corporate limits cover 109.9 square miles
within Hillsborough County. The City of Tampa is bordered on the south and west
by the upper and old Tampa Bays, and is divided by the Hillsborough River, which
originates northeast of the city. Tampa is the largest city within the
Hillsborough area and serves as the county seat for Hillsborough County. Due to
the City of Tampa's excellent location, it enjoys a climate free from many of
the extremes found in other parts of the country. The temperature ranges about
22 degrees, from a January mean of 60 degrees to an August mean of 82 degrees.
Summer afternoons will reach into the 90's with evenings in the 70's, with
winter temperatures in Tampa occasionally dropping to the 30's at night and
climbing back into the 50's and 60's during the afternoon. Tampa's southern and
western contours border on saltwater bays which serves as a source of cooling
breezes in the summer and tempering influence in the winter months.
Tampa serves as a transportation hub within the west central Florida area and is
accessible via numerous major interstate and U.S. Highway facilities. These
roadways include Interstate 275, Interstate 75, Interstate 4 and U.S. 41.
Interstate 275 has its point of origination south of Tampa at U.S. Highway 41
and proceeds northerly and easterly through St. Petersburg and the central
portion of Tampa to its point of termination at Interstate 75, north of the
Tampa Metropolitan Area. Interstate 75 is a major north-south interstate
facility serving the State of Florida. Interstate 75 has its point of
origination in the south Florida area and runs westerly and northerly through
the State of Florida and northerly through the United States to its point of
termination in the State of Michigan, at the U.S./Canada border. Interstate 4
is a north-south interstate facility which runs diagonally through the central
Florida area from its point of origination in the Tampa area to its point of
termination at Daytona Beach. U.S. Highway 41 is a two-way, two to four-laned,
asphalt paved roadway which has its point of origination within the Miami,
Florida area and runs westerly and northerly along the western coast of the
State of Florida, through Tampa, to its point of termination at the
Florida/Georgia border.
During the past 15 year period, Hillsborough County has reflected a steady
upward trend in population growth whereas the City of Tampa has remained
basically stable in population, reflecting an overall minor decrease in
population. During 1976 the population of Hillsborough County equaled 622,391
persons. In 1980 the population of the County equaled 646,960 persons,
reflecting an increase of 3.95% over the period between 1976 and 1980. The 1994
population of Hillsborough County equaled 864,608 persons
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AREA DESCRIPTION: (CONT'D)
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which reflected a total increase from the 1980 year of 33.64% or 2.4% per year.
The 1995 population of Hillsborough County equaled 892,000 persons, which
reflected a total increase of 37.9% or 2.5% per year since 1980. The population
of the City of Tampa equaled 281,015 in 1976. Between 1976 and 1980 the
population of the city decreased 3.35% to a 1980 estimate of 271,598 persons. By
1989 the population of the city had recovered and reflected an estimated
population of 288,565 persons, an increase of 6.25% over the 1980 population
estimate. However, between 1989 and 1991 the population of the City of Tampa
once again declined, to an estimated 1991 population of 279,794. This reflected
a decrease of 3.04% during this two-year period. The net population change
during the period between 1976 and 1991 equaled a negative .44% within the City
of Tampa. In 1992 this trend reversed itself, with the City reflecting a small
.73% population increase between 1991 and 1992. In 1994 the City reflected an
estimated population of 280,587 persons, an increase of .28% over the 1991
population estimate and in 1995 the City reflected an estimated population of
286,000, an increase of 2.22% over the 1991 population estimate.
Please refer to the chart set out below for a summary of population statistics
dealing with the City of Tampa and Hillsborough County during the years of 1981
through 1995.
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YEAR COUNTY TAMPA
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1981 663,485 271,751
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1982 682,628 273,775
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1983 699,810 275,882
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1984 726,390 274,751
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1985 746,611 276,444
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1986 779,278 278,366
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1987 807,449 284,391
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1988 825,871 286,832
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1989 842,031 288,565
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1990 834,054 280,015
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1991 843,203 279,794
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1992 853,990 281,837
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1994 864,608 280,587
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1995 892,000 286,000
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</TABLE>
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AREA DESCRIPTION: (CON'T)
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Population projections for the Tampa MSA and Hillsborough County have been set
out as follows:
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YEAR MSA HILLSBOROUGH
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<S> <C> <C>
2000 2,370,000 967,168
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2005 2,540,000 1,029,999
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2010 2,700,000 1,090,044
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</TABLE>
The Tampa area serves as a diversified business center with the First Florida
Tower, Landmark Center and Barnett Plaza being among the dominant skyline
structures within the city and reflecting the large number of banks, savings and
loans associations, insurance companies and brokerage firms that have located
within the community. Numerous companies have selected the Tampa area for their
home or regional headquarters with these companies ranging from Citicorp to Winn
Dixie, Xerox and Zurn Industries. All together, more than 15,000,000 square
feet of office space is occupied today.
More than 1,400 wholesale distribution firms operate from the Tampa area
utilizing the excellent land, sea and air transportation systems situated within
the area. The intra- and interstate highways serving the area provide for easy
over the road access in all directions while the Port of Tampa, one of the ten
largest in the nation, offers access to the sea lanes of the world. The
Seaboard System Railroad was actually born in Tampa. The Tampa International
Airport is "the nation's finest", according to many, including Esquire and
Fortune Magazine. The Tampa community is undergoing an effort to
internationalize, and as international trade increases in importance within the
area, so will Tampa as an important international trade area. Tampa's
industrial base consists of more than 800 manufacturers with most of the
companies engaged in light manufacturing, and with no firm dominating the labor
scene by employing more than 2% of the work force. A list of some of the more
significant companies with plants in Tampa includes Honeywell, Continental Can,
Reynolds Aluminum, Chloride, Anheiser-Busch and United Technologies.
Additionally, the Jim Walter conglomerate, Florida Steel Corporation and
American Ship are headquartered in Tampa with GTE Data Services and IBM having
their regional headquarters here. The Tampa area continues to aggressively seek
out new industry to enhance this sector of the economy. Major companies which
relocated to, or expanded within, Tampa in 1995/1996 include American Express
Travel Related Services, American Portable Telecom, Beneficial Corporation,
Black and Decker, Brassie Golf, Carter Belcant and Atkinson, Capital One, CCCI
Fingerhut, Charter Network, Chase Manhattan Bank, Citicorp, Intermedia
Communications, LabCare, Lea International, McDill Air Force Base, Market Lynk,
Metropolitan Life Insurance, Netware Plus, Nutmeg Mills, Optimized Control Ltd.,
PrimeCo Communication, Professional Business Interiors, Promus Hotel
Corporation, Riverside Paper, Techmatics, TeleTech, U.S. Filter, U.S. Postal
Service - Remote Encoding Center, and Wilamette Industries, Inc. Hillsborough
County, within which Tampa is located, is the 41st largest agricultural
7
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AREA DESCRIPTION: (CONT'D)
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county in the United States and ranks 4th in Florida in net income produced by
farms. The agribusiness sector includes major investments in citrus, cattle,
fruits and vegetables as well as tropical fish, ornamental plants and flowers.
The climate is a primary factor in attracting visitors to Hillsborough County
all year round with a wide variety of entertainment centers being located within
the area. Area attractions include Busch Gardens, the state's second largest
tourist attraction, and Ybor City, (the Latin quarter). The Tampa area reflects
all of the amenities that Florida visitors are seeking including first class
accommodations, excellent air and highway transportation systems, a wide range
of restaurants, professional and parimutuel sports and numerous recreational
facilities. With its central location, Tampa is within a one to two hour drive
to Orlando (located northeast), and is 15 to 30 minutes to the sandy coastal
beaches to the west.
As indicated previously in this area description, the Tampa Bay Area reflects a
relatively well diversified economic base. The employment distribution within
the Tampa area exhibits a relatively high proportion of retail trade and service
sector employment reflecting the influence of tourism in the area. Other
sectors, particularly manufacturing, have increased in recent years and should
continue to increase significantly. The largest employment sector within the
Tampa area is the services category which provides 35.4% of the area's total
employment. The wholesale/retail trade category reflects 24.5% of Tampa's total
employment, with government providing 14.2% of the area's total employment. The
manufacturing and the finance, insurance and real estate sectors are the next
largest within the Tampa economic base, with each sector reflecting 8.0% and
7.7% of the area's total employment, respectively.
Please refer to the chart set out below for a summary of the Tampa Bay area's
1995 non-agricultural employment distribution.
<TABLE>
<CAPTION>
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DISTRIBUTION OF NON-AGRICULTURAL EMPLOYMENT
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PERCENTAGE OF TOTAL EMPLOYMENT
<S> <C>
Services 35.4%
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Wholesale/Retail Trade 24.5%
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Government 14.2%
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Manufacturing 8.0%
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Finance, Insurance, Real Estate 7.7%
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Construction 4.6%
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Transportation, Public Utilities 5.6%
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TOTAL 100.0%
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</TABLE>
8
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AREA DESCRIPTION: (CONT'D)
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During the period between 1982 and 1993 employment within the Tampa and
Hillsborough areas has reflected generally steady positive upward trends. In
1982, the county had a civilian labor force of 338,000 persons with a total
employment of 311,400 persons, reflecting an unemployment rate of 7.9%. In
1986, the county wide civilian labor force equaled 417,600 persons with the
total employment equaling 393,900 persons, and an unemployment rate of 5.7%. In
1991, the countywide civilian labor force had increased to 467,011, and total
employment equaled 438,908, reflecting an unemployment rate of 6.0%. In 1993,
the countywide civilian labor force equaled 465,142, with total employment
equaling 435,166. The 1993 average unemployment rate equaled 6.4%. In 1994,
the countywide civilian labor force equaled 487,826, total employment equaled
461,483 and the unemployment rate equaled 5.40%, and in 1995 the countywide
civilian labor force equaled 1,090,200, total employment equaled 1,042,600, and
the unemployment rate equaled 4.4%. Due to the Tampa Bay vicinity's vital and
growing economy the area has reflected good income levels. The median household
income level currently approximates $35,000 as compared to the 1982 median
household income estimate of $23,212 per household.
The good income level currently indicated within the area is even more
significant when the relatively low cost of living within the area is
considered. Hillsborough County reflects a relatively low cost of living not
only within the State of Florida but as compared to other major metropolitan
areas throughout the United States. A chart providing a comparison of price
level indexes between major Florida Metropolitan Areas has been set out on the
following page.
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AREA DESCRIPTION: (CONT'D)
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FLORIDA PRICE LEVEL INDEX
<TABLE>
<CAPTION>
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COUNTY- 1992 1991 1990
Principal City
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<S> <C> <C> <C>
DADE 106.66 107.98 105.06
Miami
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BROWARD 104.73 105.99 107.76
Ft. Lauderdale
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PALM BEACH 102.94 103.84 102.35
West Palm Beach
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SARASOTA 101.90 99.93 102.60
Sarasota
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ORANGE 101.35 98.90 98.58
Orlando
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PINELLAS 101.16 98.84 101.84
St. Petersburg/Clearwater
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HILLSBOROUGH 100.19 99.51 100.67
Tampa
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DUVAL 97.43 95.81 97.42
Jacksonville
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LEON 96.55 98.10 98.17
Tallahassee
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PASCO 95.84 93.90 94.79
Dade City
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POLK 93.00 93.30 92.63
Lakeland
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</TABLE>
*List contains major counties only.
County Price Level Index is county position relative to the state
average = 100
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10
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AREA DESCRIPTION: (CONT'D)
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Thus, the explanation of why the area has enjoyed favorable growth trends within
the past is that its cost of living is relatively low, while both regionally and
nationally it ranks high in many other important indicators of economic
strength. Major employers within Tampa and the Hillsborough County area have
been set out as follows:
<TABLE>
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<S> <C>
HILLSBOROUGH COUNTY SCHOOL SYSTEM 21,800
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GTE Florida 9,100
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HILLSBOROUGH COUNTY GOVERNMENT 8,860
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TAMPA INTERNATIONAL AIRPORT 6,040
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UNIVERSITY OF SOUTH FLORIDA 5,020
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CITY OF TAMPA 4,600
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MACDILL AIR FORCE BASE 4,380
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Publix 4,060
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TAMPA GENERAL HOSPITAL 3,800
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Kash n' Karry Food Stores, Inc. 3,290
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ST. JOSEPH'S HOSPITALS 3,220
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GTE Data Services 3,200
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U.S. POSTAL SERVICES, TAMPA DIVISION 3,100
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Tampa Electric Company 3,000
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VETERAN'S ADMINISTRATION HOSPITAL 2,700
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Chase Manhattan Bank 2,100
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The Tribune Company 2,100
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IBM/Advantis 2,000
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Barnett Bank of Tampa 2,000
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Columbia Brandon Regional Medical Center 1,580
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Group Technologies Corporation 1,500
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Time Customer Service, Inc. 1,500
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USAA Insurance 1,400
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AmSouth Bank of Florida 1,220
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Citicorp 1,200
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</TABLE>
11
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AREA DESCRIPTION: (CONT'D)
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<TABLE>
---------------------------------------------------------
<S> <C>
NationsBank of Florida 1,140
---------------------------------------------------------
Metropolitan Life Insurance 1,100
---------------------------------------------------------
Price Waterhouse 940
---------------------------------------------------------
Beneficial Corporation 875
---------------------------------------------------------
CCCI/Fingerhut Companies, Inc. 850
---------------------------------------------------------
Nutmeg Mills 830
---------------------------------------------------------
SunTrust Bank, Tampa Bay 765
---------------------------------------------------------
Salomon Brothers 700
---------------------------------------------------------
Rooms to Go 700
---------------------------------------------------------
TeleTech 700
---------------------------------------------------------
Humana Health Care Plans 650
---------------------------------------------------------
HealthPlan Services 620
---------------------------------------------------------
United Healthcare Corp. 600
---------------------------------------------------------
Lykes Bros., Inc. 600
---------------------------------------------------------
Singleton Seafood Co. 600
---------------------------------------------------------
HavaTampa, Inc. 600
---------------------------------------------------------
</TABLE>
Note: A representative sampling; bold denotes public sector employers.
Source: Committee of One Hundred, 5/96 phone survey.
During the recent past, the Tampa Metropolitan Area has experienced the
completion of several major projects which could have significant economic
impacts on the area. A chart summarizing the major projects completed in
1995/1996 has been provided on the following page.
12
<PAGE>
AREA DESCRIPTION: (CONT'D.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
PROJECT NAME DESCRIPTION COST (MILLIONS)
- --------------------------------------------------------------------------------------
<S> <C> <C>
Garrison Seaport Center Entertainment Retail/ $300
Cruise Ship Terminal
- --------------------------------------------------------------------------------------
Brandon TownCenter Regional Mall 200
- --------------------------------------------------------------------------------------
Walden Woods Business Center Industrial Commercial Center 160
- --------------------------------------------------------------------------------------
Renaissance Park Office and Warehouse 150
- --------------------------------------------------------------------------------------
The Crescent Tower/March Corp. Mixed-Use 123
- --------------------------------------------------------------------------------------
The Towers Office/Hotel Complex 120
- --------------------------------------------------------------------------------------
Great Mall of Tampa Value-Oriented Mall 114
- --------------------------------------------------------------------------------------
Tampa International Airport Airside 'A' Terminal 110
- --------------------------------------------------------------------------------------
Ice Palace/Tampa Bay Lightning Sports Arena 110
- --------------------------------------------------------------------------------------
Shopping Mall/The Taubman Co. Shopping Mall 100
- --------------------------------------------------------------------------------------
Florida Aquarium Recreation/Education 84
- --------------------------------------------------------------------------------------
Central Florida Pipelines/GATX Office Buildings/Pipeline 80
- --------------------------------------------------------------------------------------
Federal Courthouse Courthouse Complex 58
- --------------------------------------------------------------------------------------
Transportation Center/HARTline Transportation Center 45
- --------------------------------------------------------------------------------------
Vandenberg Airport Airport Facility 40
- --------------------------------------------------------------------------------------
Garrison Seaport Center Amphitheater Theater 40
- --------------------------------------------------------------------------------------
James Hardie Building Manufacturing 40
- --------------------------------------------------------------------------------------
Tampa International Airport Long-Term Parking, Expansion 40
- --------------------------------------------------------------------------------------
Museum of Science and Industry Expansion 36
- --------------------------------------------------------------------------------------
University Mall Shopping Center/Renovation 35
- --------------------------------------------------------------------------------------
</TABLE>
A brief description of several of these major Tampa Bay Area projects has been
provided as follows:
GARRISON SEAPORT CENTER - Garrison Seaport Center is an entertainment complex
- -----------------------
that will center around the Tampa Bay cruise facilities. Two major anchors will
include the Florida Aquarium and the Deuteron Entertainment Complex and
Amphitheater. Additionally, retail/restaurant operations and specialty
attractions will serve as a major economic catalyst for downtown Tampa.
THE FLORIDA AQUARIUM - Workers broke ground on the $94 million aquarium in 1994.
- --------------------
More than one million people have visited the aquarium since opening in March
1995.
A DOWNTOWN PARK - This $4 million project involved tearing down Curtis Hixon
- ---------------
Convention Center and replacing it with a five to six-acre urban park along the
Hillsborough River. The project was completed in March 1995.
13
<PAGE>
AREA DESCRIPTION: (CONT'D.)
- --------------------------------------------------------------------------------
BRANDON TOWNCENTER - JMB and The Edward J. DeBartolo Corp. have completed a 1.1
- ------------------
million square foot regional mall on the southeast corner of Interstate 75 and
State Road 60 in Brandon. Four major department stores anchor the mall, which
opened February 1995.
THE ICE PALACE - The Tampa Bay Lightning arena is located in downtown Tampa near
- --------------
Garrison Channel covering about seven acres for a building with 20,000 seats.
The facility opened in October of 1996 and cost $160 million.
FEDERAL COURTHOUSE - A new, larger federal courthouse is being built in downtown
- ------------------
Tampa. The General Service Administrator (GSA) is using a combination of three
blocks for the new $58 million complex. The GSA anticipates the building to be
ready for occupancy by the 1/st/ quarter of 1998. The new building will be
240,000 square feet, nearly four times the size of the existing courthouse.
GREAT MALL OF TAMPA BAY - The Great Mall of Tampa Bay will be on Highway 301 and
- -----------------------
the Crosstown Expressway. The Washington-based developer, with Canadian
Imperial Bank of Commerce, is developing the one million square foot mall on the
106-acre site.
The Tampa area is served by residential support facilities that meet most
recreational, medical, educational and religious needs. The Tampa area contains
numerous cultural opportunities as well as a diversification of seasonal
recreational activities. The Tampa area's cultural facilities are currently in
an expansion stage with a performing arts center and with several museums having
opened over the last several years. The Tampa Museum features rotating art and
humanity shows in addition to classes, lectures, films and special events. The
Tampa Museum of Science and Industry contains permanent and rotating exhibits of
scientific, agricultural, technological and industrial displays. The Florida
Orchestra performs ten concerts during its annual November to April season with
the orchestra being conducted by Erwin Hoffman and being joined by guest artists
from all over the nation and the world. Additional numerous smaller art
galleries, theaters and dance groups present performance and exhibitions
throughout the year.
Sports and recreational opportunities within the Tampa area offer a varied and
wide range of leisure time activities. The Tampa area offers a wide range of
golf courses with a complete variety of layouts to challenge everyone from Pro
to beginner, with excellent tennis facilities being open day and night. The
Tampa Bay area's location on the Gulf and its numerous bays, rivers and lakes
makes the area an outdoors man's paradise with numerous fishing opportunities,
sailing, skiing, swimming, pleasure boating and wind surfing being among
available activities within the Tampa area. Tampa contains several professional
sports teams which include the Tampa Bay Buccaneers, the Tampa Bay Lightning,
and spring training with the Cincinnati Reds, the Philadelphia Phillies, the St.
Louis Cardinals and the New York Yankees. During respective seasons, parimutuel
betting is available with Jai Alai, thoroughbred and greyhound racing. Special
sporting events are scheduled throughout the year, including internationally
recognized sailing races, professional golfing championships and ice skating
performances.
14
<PAGE>
AREA DESCRIPTION: (CONT'D.)
- --------------------------------------------------------------------------------
Additional recreational activities and facilities within the Tampa area include
Busch Gardens/The Dark Continent which is a three hundred acre theme park
featuring 3,000 animals roaming the African Belt, thrill rides, entertainment
and shows. Adventure Island is a 22-acre water experience which features a 34-
foot high mountain with 5 giant water slides and a pool which produces 5 foot
waves. The Florida Aquarium opened in 1995 and is a three-story, 152,000-square
foot facility located in downtown Tampa's Garrison Channel District. This
aquarium facility holds one million gallons of fresh and salt water exhibits
featuring Florida's wetlands, coral reefs, and over 4,300 Florida animals and
plant specimens. Additional recreational facilities include: Plant Hall which
was originally the Tampa Bay Hotel that is considered the finest example of
moorish architecture in the western hemisphere; and Ybor Square which is a
complex of 3 brick buildings that were constructed in 1886 as the Ybor Cigar
Factory, and today houses dozens of shops offering imports, specialty items,
antiques and collectibles.
The Tampa area offers many fine facilities for conventions, meetings and trade
shows. The Curtis Hixon Convention Center, located in downtown Tampa on the
River, provides a seating capacity of 8,000 with a 64,000 square foot exhibition
hall. This 106,000 square foot facility has six meeting rooms, a press room, TV
studio, dressing rooms and parking for over 500 cars. The Florida State Fair in
Expo Park is located 7 miles east of downtown Tampa on 276 acres and contains
88,000 square feet of space with 45 foot high ceilings, all unobstructed by
columns.
The Tampa area is served by an excellent school system which includes 158 public
schools incorporated within the Hillsborough County School District and 112
private schools. The Hillsborough County School System is the 12th largest in
the United States and the 3rd largest in Florida. The public school system also
has special schools for exceptional children, including classes for the deaf,
blind, crippled, learning disabled and gifted. The Hillsborough County Public
School System as a whole, ranks above the national and Florida average levels of
achievement on scholastic aptitude tests with comprehensive basic skills test
scores being above the national level for all grades. The area has a strong
vocational/technical school system which works closely with the business
community and provides training at the semi- professional and technical levels
for all occupations. In addition to the public schools, semi-private and
parochial schools have been established within Hillsborough County and offer
many types of education from the finest college preparatory programs to strict
religious schooling.
Four major colleges and universities are located in Hillsborough County,
including the University of South Florida, the University of Tampa, Hillsborough
Community College and Tampa College. The schools offer undergraduate degrees in
more than 100 academic areas and advanced degrees in many fields, including
medicine and engineering.
The greater Tampa area has become the medical center for the State of Florida
and a major medical center for the Southeastern United States. Hillsborough
County human medical resources include more than 2,450 physicians, recognizing
50 specialties; 459 licensed dentists, and a well staffed nurses registry.
15
<PAGE>
AREA DESCRIPTION: (CONT'D.)
- --------------------------------------------------------------------------------
There are 21 major general, specialty and military hospitals in Hillsborough
County with a combined total of more than 4,000 beds. Special medical services
available at Tampa's hospitals include a radiation clinic, cobalt treatment,
artificial kidney machines, burn and cardiovascular units. Numerous medical
laboratories in the Tampa area offer a wide variety of capabilities with a
crippled children's hospital, a nuclear magnetic resonance scanner and other
medically oriented research support facilities being available.
In summary, the Tampa and Hillsborough County area continues to reflect a vital
and growing population and economy which have reflected positive upward trends
within the recent past. The area reflects a relatively well diversified
economic base which should provide for a stable economic future for the area
within upcoming years.
16
<PAGE>
[NEIGHBORHOOD MAP APPEARS HERE]
<PAGE>
- --------------------------------------------------------------------------------
NEIGHBORHOOD DESCRIPTION
- --------------------------------------------------------------------------------
The subject property is located in the northeast quadrant of the Tampa
metropolitan area, along the east boundary of the incorporated limits of the
community of Temple Terrace. The subject neighborhood is primarily residential
in character. Access to the neighborhood is via Temple Terrace Highway which is
also known as Busch Boulevard west of 56th Street. The subject property is
situated approximately 4.5 miles east of Interstate 275 and approximately 2
miles west of U.S. 301 and the Interstate 75. U.S. 92 is located approximately
2.5 miles south of the subject and is the closest access route to Interstate 4
via 56th Street.
The Busch Gardens entertainment complex is located 2.5 miles west of the subject
on the north side of Busch Boulevard and the campus of the University of South
Florida is situated 2.5 miles northeast of the subject property along the north
side of Fowler Avenue. Florida College has its athletic facilities immediately
north and northeast of the subject, while the educational buildings and other
facilities which comprise this private school are located immediately west of
the Hillsborough River on the north side of Temple Terrace Highway. The Temple
Terrace Golf and Country Club wanders through the established residential areas
in the east central portion of the community of Temple Terrace along the west
and northwest sides of the Hillsborough River. Temple Terrace is primarily a
residential community which covers several square miles of land area. Most of
the City of Temple Terrace is built up with residential and some commercial
properties, and it appears that future growth will be to the east of Temple
Terrace, since it is not as highly developed and is becoming more accessible
with new highway construction such as Interstate 75.
Shopping for the subject neighborhood is located approximately one mile west of
the subject site along Busch Boulevard. Located at the intersection of Busch
Boulevard and 50th Street is a shopping center which houses a Kash 'N Karry
grocery store, a Byrons department store, a Scotty's, a Pet Mart and several
other small shops and services. Also located on Busch Boulevard just east of
the previously described plaza is a K-Mart shopping center containing a K-Mart
and a Pharmor Drug store. This shopping center is located near the intersection
of 56th Street and Busch Boulevard. Also located near this intersection along
both Busch Boulevard and 56th Street are a wide variety of neighborhood strip
centers and free-standing commercial and retail facilities, including gas
stations and convenience stores, banks, restaurants and other commercial
properties. Located in the northeast quadrant of the intersection of 56th
Street and Busch Boulevard is the Temple Terrace Shoppes shopping center which
is anchored by a Winn-Dixie grocery store and a Walgreen's. Located in the
southeastern quadrant of the intersection of 56th Street and Busch Boulevard is
the Terrace Plaza shopping center which is anchored by a Publix
17
<PAGE>
NEIGHBORHOOD DESCRIPTION: (CONT'D.)
- --------------------------------------------------------------------------------
grocery store and an Eckerd's drug along with various other shops and services.
Additional retail shopping serving the subject neighborhood includes the Point
Plaza Shopping Center, which is anchored by a Kash 'N Karry food store and a
Rite Aid Pharmacy. This shopping center is located to the east of the subject
property at the intersection of Temple Terrace Parkway and Davis Road.
The properties bordering the subject on the east side include modest single
family residential properties in the Temple Park Subdivision, while the area
fronting on the south side of Temple Terrace Highway includes a small commercial
property and the Central Park East apartment complex. Properties located
northeast across the highway include the athletic facilities of Florida College,
as well as a lumber yard and plant nursery. The land lying directly north of the
subject, across the Temple Terrace Highway, is undeveloped, while the property
located west of the Hillsborough River includes the golf course and the more up-
scale residential properties in the Temple Terrace Estates subdivision. The
property to the south of the subject is improved with Phases II and III of the
Riverchase Apartments development. The land south of that consists of wooded
acreage down to the point where the Hillsborough River meets the residential
development.
In summary, the subject property is situated on the easterly boundary of an
established residential area and on the westerly boundary of a mixed residential
and commercial area which is experiencing new growth in both residential and
commercial properties. The subject property is considered to be easily
accessible and close to commercial facilities and primary road networks, as well
as primary employment centers in northeast Tampa. The character of this
neighborhood is considered to be above average and the future projections for
growth of this area appear to be good.
18
<PAGE>
- --------------------------------------------------------------------------------
SITE DESCRIPTION
- --------------------------------------------------------------------------------
The subject property is located on the south side of Temple Terrace Highway in
Temple Terrace, Hillsborough County, Florida. The subject site is the northerly
portion of an original 73-acre tract and has approximately 1,172 feet of
frontage on the south side of Temple Terrace Highway. The site runs south and
west to the Hillsborough River and overflow wetland areas adjoining the river.
The most easterly boundary is approximately 1,265 feet, and the overall width of
the parcel is approximately 1,325 feet. The property has frontage on the river
and most of the westerly portion of the site is classified as conservation area.
The total area of the site is 36.54 acres which does not include any of the area
designated as being in the Hillsborough River. Only 18.9 acres of the subject
site is considered to be usable net acreage for apartment development. This
portion of the site is above the Department of Environmental Regulation (DER)
line, which delineates the boundary of the environmentally sensitive wetland
areas. According to FEMA Flood Insurance Rate Maps, the easterly portion of the
site, where the apartment development is located, is not classified as a flood
hazard area. The remainder of the site is designated as flood hazard. The
highest elevations on the subject site are along the easterly boundary with a
gradual decrease in elevation running westerly toward the wetland areas and the
Hillsborough River.
The site dimensions and area calculations as utilized herein were taken from a
survey prepared by KAS and Associates, Inc. in February of 1986.
Temple Terrace Highway is a two lane, asphalt paved state highway with a
concrete sidewalk along the north side. Public utilities available to the site
include water service along Temple Terrace Highway and sewer service at the
southeasterly corner of the subject site. A sewer lift/pumping station was
required to connect into the county sewer system. The water and sewer systems
are county owned and operated, but capacity was made available through the City
of Temple Terrace for the subject property.
According to the survey, the east boundary of the subject site is bordered by a
25 foot wide drainage easement, but this is not considered to have any adverse
effect on the desirability of the subject property. Since the subject property
is designated as the first phase of the Riverchase development, along with the
Phase II parcel to the south, access to the southerly parcel required creation
of an ingress/egress easement which covers approximately 2.09 acres. Its
location runs from the central portion of the subject site's highway frontage,
thence southeast to the easterly boundary where it runs in a southerly
direction. Most of the land area along the westerly perimeter of the buildable
area was designated for drainage retention ponds. The subject site has been
improved with a 248-unit multifamily apartment project which contains 31 two-
story buildings, a clubhouse and recreation facilities. The project has a
density of 13.12 units per net useable acre.
19
<PAGE>
SITE DESCRIPTION: (CONT'D)
- --------------------------------------------------------------------------------
The subject site has been improved with a 248-unit multifamily apartment project
which contains 31 two-story buildings, a clubhouse and recreation facilities.
The project has a density of 13.12 units per net useable acre.
In summary, the subject site has some very attractive physical characteristics,
because of the natural terrain and the close proximity to the river, which makes
it desirable for a residential apartment development.
Please refer to the following pages for a survey, site plan, county map and
photographs of the subject property and the surrounding neighborhood.
20
<PAGE>
--------
Survey
--------
[DER CONSERVATION AREA MAP APPEARS HERE]
<PAGE>
-------------------------
Proposed Site Plan
-------------------------
[PROPOSED SITE PLAN APPEARS HERE]
<PAGE>
[RIVERCHASE PHASE 2 MAP APPEARS HERE]
<PAGE>
[MAP APPEARS HERE]
<PAGE>
[PHOTO APPEARS HERE]
VIEW SOUTHERLY FROM TEMPLE TERRACE HIGHWAY SHOWING THE
SUBJECT ENTRANCE DRIVE
[PHOTO APPEARS HERE]
VIEW WESTERLY ALONG TEMPLE TERRACE HIGHWAY.
25
<PAGE>
[PHOTO APPEARS HERE]
VIEW EASTERLY ALONG TEMPLE TERRACE HIGHWAY.
[PHOTO APPEARS HERE]
VIEW SOUTHERLY FROM TEMPLE TERRACE HIGHWAY
SHOWING THE HILLSBOROUGH RIVER
<PAGE>
[PHOTO APPEARS HERE]
VIEW NORTHERLY FROM THE SUBJECT PROPERTY
ACROSS TEMPLE TERRACE HIGHWAY.
[PHOTO APPEARS HERE]
VIEW EASTERLY OF THE PROPERTY ADJOINING
THE SUBJECT PROPERTY TO THE EAST
<PAGE>
[PHOTO APPEARS HERE]
VIEW SOUTHWESTERLY OF THE PROPERTY
ADJOINING THE SUBJECT TO THE EAST.
[PHOTO APPEARS HERE]
INTERIOR VIEW OF THE SUBJECT SITE.]
<PAGE>
[PHOTO APPEARS HERE]
VIEW NORTHERLY ALONG A PORTION OF THE SUBJECT SITE
ADJOINING THE HILLSBOROUGH RIVER FLOOD PLAIN.
[PHOTO APPEARS HERE]
VIEW SOUTHWESTERLY OF THE PHASE II DEVELOPMENT
LOCATED IMMEDIATELY SOUTH OF THE SUBJECT.
<PAGE>
- --------------------------------------------------------------------------------
IMPROVEMENTS DESCRIPTION
- --------------------------------------------------------------------------------
The subject property was developed in 1987 with a 248-unit rental apartment
complex. The subject property is known as Phase I of Colonial Village At River
Hills Apartments. The subject property (Phase I) is part of a larger 3-phased
apartment complex that contains a total of 776 units. The subject Phase I
contains 31 two-story buildings, and has been developed in a series of 31
building pads which reflect a 4-unit footprint. The subject has 124 first floor
units and 124 second floor units. Access to the second floor units is provided
by open stairways located at each corner of the subject buildings. The density
for the subject property reflects approximately 13.12 units per acre based on
248-units on 18.9 net acres.
The individual apartment types, the number of each unit type and the unit sizes
have been summarized as follows:
<TABLE>
<CAPTION>
-------------------------------------------------------------------
UNIT TYPE # OF UNITS UNIT SIZE
-------------------------------------------------------------------
<S> <C> <C>
-------------------------------------------------------------------
1BR / 1BA 128 Units 734 SF
-------------------------------------------------------------------
2BR / 2BA 120 Units 977 SF
-------------------------------------------------------------------
</TABLE>
Other improvements to the subject site include asphalt paved driveways and
parking areas with concrete parking bumpers, as well as sidewalks leading from
the parking areas to the building entry ways. The overall parking ratio is
approximately 1.6 to 1.7 spaces per residential unit. This parking ratio appears
adequate recognizing the subject unit mix. The subject property is designed with
a very extensive storm water retention system which runs along the boundary of
the DER land. These soil filtration systems keep the environmentally sensitive
areas from being endangered by storm water run off. These retention ponds or
canals provide a very attractive amenity to the site, and the subject buildings
are situated or oriented to provide the maximum views to the residential units.
The subject property contains a full range of recreational amenities and tenant
service facilities including a clubhouse/rental office which contains a kitchen,
a bar, a game room, an exercise room, restrooms, a club room and a leasing
office. Other recreational facilities include two racquetball courts, a swimming
pool and a tennis court.
It should be noted that while the above described recreational and tenant
service facilities are located within the subject Phase I development, these
facilities also serve Phase II of the Colonial Village At River Hills
development.
The Appraiser has not been provided with full building plans or specifications
for the subject property. Based upon a visual inspection of the subject
improvements, a review of the Hillsborough County Public Records relating to the
subject, and the partial plans provided to the Appraiser, the basic construction
features of the subject improvements have been described as follows.
30
<PAGE>
IMPROVEMENTS DESCRIPTION: (CONT'D.)
- --------------------------------------------------------------------------------
Construction features include typical perimeter foundations which consist of
concrete continuous spread footings. The foundation slab consists of a poured
concrete slab reinforced with woven wire mesh over visqueen and compacted,
termite treated soil.
Typical exterior walls reflect wood stud framing. The exterior finish of the
buildings consist of painted stucco. Party walls are constructed of wood stud
framing with batt insulation. Both sides of the interior walls are sheathed with
wallboard.
The roof system for the subject apartment buildings consists of pre-engineered
wood trusses with wood sheathing and insulation. The roof coverings consist of
concrete roof tiles. The first floor of the subject buildings reflects a
concrete floor system with the second story floor system consisting of wood
decking over a wood truss floor support structure.
Access to the second floor units is provided by open exterior stairs. Each
building is served by four flights of open exterior stairs. The subject
stairwells reflect steel risers with light weight concrete steps and metal
railings.
The windows within the subject buildings are aluminum single hung and unit doors
are of hollow core metal construction. All of the units within the subject
property feature a sliding glass door which opens onto an open patio or balcony.
Each of the subject units feature painted interior walls, carpeted floors within
the living room and bedrooms and vinyl tile floor coverings in the kitchen,
laundry and bathrooms. The subject units reflect a ceramic tile entry. The
individual units have a range/oven with fan hood, a refrigerator, stainless
steel sink, dishwasher, disposal and central heating/air conditioning. Each unit
has a paddle fan in the living room and each unit features a walk-in closet.
Window coverings include mini-blinds in each window and vertical blinds in the
sliding glass doors which access each unit's patio/balcony.
The subject property appears to have been adequately maintained and appears to
be in good overall condition. Based upon the visual inspection of the subject
improvements, as well as discussions with project management, several items of
deferred maintenance were noted. These items of deferred maintenance include:
1. The building exteriors need to be repainted.
2. Approximately 92 stairwells need to be replaced.
3. The parking lots and circulation drives need to be repaired and re-
sealed.
The subject property was constructed in 1987 and reflects an actual age of
approximately 10.5 years. Based upon the condition of the subject improvements,
it was our opinion that the effective age of the improvements would equal
approximately 10.0 years following the immediate correction of deferred
maintenance items.
Reference is made to the following pages of this report for reproductions of the
subject site plan and unit floor plans, as well as photographs of the subject
improvements.
31
<PAGE>
[APARTMENT ELEVATIONS PLAN APPEARS HERE]
<PAGE>
[PLAN APPEARS HERE]
<PAGE>
[CLUBHOUSE ELEVATIONS PLAN APPEARS HERE]
<PAGE>
[CLUBHOUSE FLOOR PLAN APPEARS HERE]
<PAGE>
[PHOTO OF VIEW SOUTHWESTERLY OF THE SUBJECT PROPERTY'S
CLUBHOUSE AND RENTAL OFFICE APPEARS HERE]
[PHOTO OF VIEW NORTHWESTERLY OF THE SUBJECT CLUBHOUSE,
POOL AND TENNIS COURT APPEARS HERE]
<PAGE>
[PHOTO OF VIEW NORTHWESTERLY OF THE SUBJECT'S POOL AREA APPEARS HERE]
[PHOTO OF VIEW SOUTHERLY OF TYPICAL BUILDINGS AND ASPHALT PAVED
PARKING AND CIRCULATION DRIVES WITHIN THE SUBJECT PROPERTY APPEARS HERE]
<PAGE>
[PHOTO OF VIEW OF A TYPICAL BUILDING AT THE SUBJECT PROPERTY APPEARS HERE]
[PHOTO OF VIEW OF A TYPICAL BUILDING AT THE SUBJECT PROPERTY APPEARS HERE]
<PAGE>
[PHOTO OF VIEW OF A TYPICAL BUILDING AT THE SUBJECT PROPERTY APPEARS HERE]
[PHOTO OF INTERIOR VIEW OF A TYPICAL UNIT
WITHIN THE SUBJECT PROPERTY APPEARS HERE]
<PAGE>
[PHOTO OF INTERIOR VIEW OF A TYPICAL UNIT
WITHIN THE SUBJECT PROPERTY APPEARS HERE]
[PHOTO OF INTERIOR VIEW OF A TYPICAL UNIT
WITHIN THE SUBJECT PROPERTY APPEARS HERE]
<PAGE>
- --------------------------------------------------------------------------------
ZONING AND LAND USE
- --------------------------------------------------------------------------------
According to the City of Temple Terrace Community Development Office, the
subject property is currently zoned R-MFA, Alternate Multiply Family Residential
District.
The purpose and principal permitted uses for this zoning classification have
been set out as follows:
PURPOSE:
- -------
The purpose of the R-MFA Alternate Multifamily Residential zoning district shall
be to designate and establish areas within the City of Temple Terrace which are
deemed to be uniquely appropriate for the development and maintenance of
multifamily residential housing properly served by adequate community
facilities, recreational amenities and commercial service areas and to provide
additional flexibility in the development of said areas beyond that which is
currently available in the R-MF, Multifamily Residential zoning district; to
designate those uses and services deemed appropriate and proper for location and
development within said zoning district; and to establish such development
standards and provisions as are appropriate to ensure a proper and desirable
multifamily residential environment.
PRINCIPAL PERMITTED USES:
- ------------------------
1) Multifamily dwellings.
2) Publicly owned or operated buildings.
3) Public utility stations or structures.
4) College or university.
5) Church, synagogue or place of worship, church school.
6) Nursery school or kindergarten.
7) School, private or parochial.
8) Townhouses.
41
<PAGE>
ZONING AND LAND USE: (CONT'D)
- --------------------------------------------------------------------------------
9) Recreational use facilities for youth or adults, operated by a non-profit
organization and open to the public.
10) Hotel or motel.
11) Hotel/restaurant complex or motel/restaurant complex, subject to the
following limitations and restrictions:
Such complexes, whether under single ownership or with separate ownership of
the hotel or motel and the restaurant components, may be developed only
pursuant to a single, unified general site development plan; provided,
however, no restaurant may be approved as part of a hotel/restaurant complex
or as part of a motel/restaurant complex unless said restaurant has a
minimum of 2,500 square feet of service area, and is equipped to provide
full table service of meals to a minimum of one hundred fifty (150) persons
at tables at one time.
In addition to these zoning restrictions, the subject site is currently reported
to reflect an MDR, Medium Density Residential land use classification under the
Temple Terrace Comprehensive Land use Plan. This land use classification
provides for maximum development densities of 18 dwelling units per acre.
42
<PAGE>
- --------------------------------------------------------------------------------
REAL ESTATE ASSESSMENT
AND TAXES
- --------------------------------------------------------------------------------
The subject property is currently assessed and taxed by Hillsborough County,
Florida. According to the Hillsborough County Tax Assessor's Office, the
subject property is assessed as a single parcel. The subject property is
assessed under the Income Approach only. Thus, no breakdown between the land and
the improvement assessment is available. The assessment and tax data for the
subject property has been summarized as follows:
<TABLE>
<S> <C>
- --------------------------------------------------------------------------------
FOLIO NUMBER: 202329.5002
- --------------------------------------------------------------------------------
OWNER OF RECORD: Riverchase Investors I, Ltd.
- --------------------------------------------------------------------------------
TOTAL ASSESSMENT (1997): $ 6,608,064
- --------------------------------------------------------------------------------
TAX RATE (1997): 23.9265 Mills
- --------------------------------------------------------------------------------
GROSS REAL ESTATE TAXES: $ 158,107.84
- --------------------------------------------------------------------------------
NET REAL ESTATE TAXES: (RECOGNIZING THE STATE $ 151,783.53
OF FLORIDA'S 4% DISCOUNT FOR EARLY PAYMENT IN
NOVEMBER)
- --------------------------------------------------------------------------------
</TABLE>
The subject property also reflects an assessment for personal property.
According to Hillsborough County the subject's current personal property tax
assessment equals $5,000. Applying the current tax rate of 23.9265 mills to this
assessment produces a gross personal property tax expense of $119.63. The
subject's net personal property tax expense, recognizing the State of Florida's
4% discount for early payment, would equal $114.85.
Based upon the data set out above, the gross taxes applicable to the subject
property, including real estate and personal property, equals $158,227.47. The
subject's net tax liability, recognizing the State of Florida's 4% discount for
early payment of taxes, equals $151,898.38.
43
<PAGE>
- --------------------------------------------------------------------------------
FIVE-YEAR SALES HISTORY
- --------------------------------------------------------------------------------
Based upon our review of the public records of Hillsborough County, Florida, no
transfers involving the subject property have occurred during the last five-year
period. The most recent transactions involving the subject property have been
described below.
In July, 1985 the subject property, as well as additional land area, was
purchased by Colonial Properties, Inc. and Epoch Properties, Inc. from Haskel W.
Prock at an indicated purchase price of $3,000,000. It was indicated to the
Appraisers by the parties involved in this transaction that the actual purchase
price was several hundred thousand dollars higher than indicated in the public
records due to delays in closing.
The subject site was acquired in two separate transactions between December,
1985, and February, 1986, at a total consideration of $1,690,000. These
transactions were between Colonial Properties, Inc. and Epoch Properties, Inc.
to Riverchase Investors I, Ltd.
The subject property (Phase I) plus Phases II and III of the overall development
were renamed during the past 12 months to Colonial Village At River Hills. The
previous name of this apartment complex was Riverchase Apartments.
At the present time, the subject Phase I of Colonial Village At River Hills
Apartments, as well as the existing Phases II and III of Colonial Village At
River Hills Apartments, are listed for sale. This property was reportedly
initially listed for sale in Spring 1996, however, the sales package was not
completed and distributed until early 1997. This three-phased apartment
development is listed for bulk sale and the individual phases are not being
separately offered for sale. The list price for the bulk property equals
$33,512,000 and was allocated among the phases as follows:
<TABLE>
<S> <C>
------------------------------------------------------------------------
Colonial Village At River Hills Apartments - Phases 1 & II $18,300,000
(500 Units)
------------------------------------------------------------------------
Colonial Village At River Hills Apartments - Phase III $15,212,000
(276 Units)
------------------------------------------------------------------------
TOTAL LIST PRICE $33,512,000
------------------------------------------------------------------------
</TABLE>
44
<PAGE>
FIVE-YEAR SALES HISTORY: (CONT'D.)
- --------------------------------------------------------------------------------
No separate allocation between Phase I (subject) and Phase II has reportedly
been made. The allocated list prices reflected the following unit value
indications:
<TABLE>
<CAPTION>
-------------------------------------------------------------------
PHASE PRICE PER UNIT PRICE PER ROOM PRICE PER SF
<S> <C> <C> <C>
-------------------------------------------------------------------
I & II (comb.) $36,600 $10,566 $44.36
-------------------------------------------------------------------
III $55,116 $14,972 $57.62
-------------------------------------------------------------------
</TABLE>
An offer to purchase the subject Colonial Village At River Hills Phase I
development has reportedly been submitted based upon a purchase price of
$8,400,000. This offer is reportedly net of brokers fees and commissions and is
based upon the "as-is" condition of the subject property.
45
<PAGE>
- --------------------------------------------------------------------------------
HIGHEST AND BEST USE
- --------------------------------------------------------------------------------
The term "highest and best use" is defined in the 9th Edition of The Appraisal
-------------
of Real Estate, published by the American Institute of Real Estate Appraisers
- --------------
(1987), as follows:
"The reasonably probable and legal use of vacant land or an improved
property, which is physically possible, appropriately supported,
financially feasible and that results in the highest value."
In this highest and best use analysis, consideration has been given to the four
criteria which must be met in order for a use to reflect the highest and best
use of a property, both as if vacant and as improved. The criteria are that the
highest and best use must be: 1) physically possible; 2) legally permissible; 3)
financially feasible; and, 4) maximally productive.
In preparing this highest and best use estimate, consideration has been given to
existing land use regulations, reasonably probable modifications of such land
use regulations, economic demand, the physical adaptability of the property,
neighborhood trends and the optimal usage of the property. In addition,
consideration was given to anticipated public and private improvements located
both on and off the site to the extent that they impact the market actions at
the date of appraisal.
HIGHEST AND BEST USE, AS IF VACANT
----------------------------------
In analyzing the highest and best use of the subject site, as if vacant, the
Appraiser has made the assumption that the subject site is currently vacant and
ready for immediate new construction. This is necessary since the subject site
is currently improved with the existing Colonial Village At River Hills Phase I
apartment development.
In this analysis, each of the criteria necessary for a highest and best use as
it relates to the subject site's physical, legal and market characteristics have
been considered. A discussion of each of these criteria and the subject
property's corresponding characteristics has been set out as follows.
PHYSICALLY POSSIBLE:
- -------------------
The subject site is located along the south side of Temple Terrace Highway,
within the incorporated limits of the City of Temple Terrace, in Hillsborough
County, Florida. The subject site is highly irregular in configuration and
contains approximately 1,172 feet of frontage along the south side of Temple
Terrace Highway. Access to the subject site is directly available from Temple
Terrace Highway which is a two-laned, asphalt paved state highway.
46
<PAGE>
HIGHEST AND BEST USE: (CONT'D)
- --------------------------------------------------------------------------------
The subject site contains a total area of 36.54 acres which does not include any
of the area designated as being within the Hillsborough River. Approximately
18.9 acres of the subject site are located above the DER boundary line for
environmentally sensitive wetland areas and is considered to reflect the site's
net buildable area. According to FEMA Flood Insurance Rate Maps, the easterly
portions of the subject site, located above the previously referenced DER
boundary line, are not classified as a flood hazard area. The remainder of the
site is located in a flood hazard area. The subject site is moderately sloping
in topography, sloping downward from the eastern portions of the site to the
previously referenced wetland areas and Hillsborough River to the west.
The subject site contains two easements which include a 25-foot drainage
easement along the east boundary of the property and a 2.09 acre ingress/egress
easement which runs from the east-central portion of the site's highway frontage
southeasterly to the property's eastern boundary, then southerly to the
Riverchase Phase II property located immediately south of the subject property.
Due to the subject site's design and lay-out, neither of these easements is
considered to have a significant, negative impact on the subject property.
The subject site is fully served by all desired public utilities and services
including sewer, water, telephone, electricity and police and fire protection.
Based upon this data, it appears that the subject site is physically well suited
for a moderately sized development. The site enjoys good access
characteristics, is served by all required public utilities and services and is
benefitted by its proximity to, and view amenities associated with, the
Hillsborough River.
LEGALLY PERMISSIBLE:
- -------------------
The most significant factor limiting the legal utilization of the subject site
relates to the property's current zoning. No significant private restrictions,
building code restrictions, historic district controls or environmental
regulations are known to affect the net buildable area of the subject site.
The subject site is currently zoned RMFA, Multiple Family Residential Alternate
District and reflects a MDR, Medium Density Residential land use classification.
FINANCIALLY FEASIBLE:
- --------------------
During the past, the primary development activity within the subject
neighborhood has centered around multifamily residential rental apartment
projects, and to a lesser extent, included some commercial and retail
development activity. The subject neighborhood and immediate market area
continues to serve as an established residential, and to a lesser extent,
commercial and retail area within the eastern Temple Terrace vicinity.
47
<PAGE>
HIGHEST AND BEST USE: (CONT'D)
- --------------------------------------------------------------------------------
The general subject neighborhood and market area serves as a major rental
apartment center within the northeast Tampa Metropolitan Area, with heavy
concentrations of multifamily rental apartment developments being located along
the Bruce B. Downs (30th Street), Skipper Road and 22nd Street corridors,
approximately three miles northwesterly of the subject property. The subject
neighborhood is well located in regards to major local employers, including the
University of South Florida, the University Community Hospital, the Tampa
Industrial Park and the Busch Gardens Theme Park. The neighborhood is well
served by retail shopping and commercial support services, including free
standing shops and businesses, such as restaurants, convenience stores, gasoline
service stations and other service facilities. Retail shopping opportunities
serving the area include a major regional mall and several neighborhood shopping
centers which are located along the Busch Boulevard, Fowler Avenue, Fletcher
Avenue, Skipper Road and Bruce B. Downs (30th Street) corridors.
Based upon the overall character of the immediate subject neighborhood, the
current zoning restrictions impacting the subject property, the relatively large
size of the subject site and past development trends within the area, an opinion
that the most likely development option for the subject site, as if vacant,
would be for development with a multifamily rental apartment development would
appear most logical. In order to test the financial feasibility of a
multifamily rental apartment development on the subject site, a survey of
comparable apartment developments within the subject market area has been
conducted. The results of this occupancy survey have been summarized as
follows:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
TOTAL UNITS UNITS OCCUPANCY
PROJECT UNITS OCCUPIED VACANT RATE
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Colonial Village At River Hills I (Subject) 248 222 26 89.5%
- --------------------------------------------------------------------------------
Colonial Village At River Hills II 252 234 18 92.9%
- --------------------------------------------------------------------------------
Fisherman's Landing 256 245 11 95.7%
- --------------------------------------------------------------------------------
Meridian 280 274 6 97.9%
- --------------------------------------------------------------------------------
Windridge 264 261 3 98.9%
- --------------------------------------------------------------------------------
Ashton Park 192 187 5 97.4%
- --------------------------------------------------------------------------------
Oak Ramble 256 248 8 96.9%
- --------------------------------------------------------------------------------
Turtle Creek 232 227 5 97.8%
- --------------------------------------------------------------------------------
Excellence 78 78 0 100.0%
- --------------------------------------------------------------------------------
Cypress Run 408 391 17 95.8%
- --------------------------------------------------------------------------------
Cypress Point 148 144 4 97.3%
- --------------------------------------------------------------------------------
Hidden Palms 256 250 6 97.7%
- --------------------------------------------------------------------------------
St. Croix 540 486 54 95.0%
- --------------------------------------------------------------------------------
Broadmoor 384 345 39 89.8%
- --------------------------------------------------------------------------------
Total No. of Units 3,794
- -------------------------------------------------------------
Total No. of Units Occupied 3,592
- ----------------------------------------------------------------------
Total No. of Units Vacant 202
- --------------------------------------------------------------------------------
Overall Occupancy Rate 94.7%
- --------------------------------------------------------------------------------
</TABLE>
48
<PAGE>
HIGHEST AND BEST USE: (CONT'D)
- --------------------------------------------------------------------------------
The subject Riverchase Phase I project was opened in the Spring of 1987 and has
been successfully operating as a rental apartment project since that time. As
previously indicated, the subject property opened in the Spring of 1987, and as
of April, 1988, reflected an occupancy rate of 80%.
The 1988 overall average occupancy level for the subject property equaled 84%;
the 1989 overall average occupancy level for the subject property equaled 91%;
and the 1990 overall average occupancy level for the subject property equaled
91.5%. The 1991 overall occupancy level for the subject equaled 86.6%; and the
1992 overall occupancy for the subject equaled 88.3%. The 1991 and 1992
occupancy levels for the subject were impacted by the construction of Phase II
in 1991. The subject property's 1993 overall occupancy equaled 92.5%, the 1994
overall occupancy for the subject property equaled 95.5% and the 1995 overall
occupancy for the subject property equaled 95.0%. The 1996 overall occupancy
for the subject property equaled 91.8% and the 1997 overall occupancy for the
subject property equaled approximately 86.0%.
The subject property reflects a current reported occupancy level of 89.5%, which
appears to be substantially below current market norms. The subject property's
occupancy levels appear to have been negatively impacted by the opening of
Colonial Village At River Hills Phase III in August 1996. A total of 172 units
have been leased in Phase III, with 104 units remaining vacant. Given this
project's previous absorption levels, it appears that it should take less than
one more year before the new units in Phase III will be absorbed.
During the past several years, a number of new rental apartment complexes have
been constructed and existing apartment developments within the subject market
area have undergone phased expansions, resulting in a continued growth of
available rental apartment units within the subject market area. St. Croix,
Phase II opened in October, 1990 with an additional 280 units; Live Oaks
Plantation III opened in December, 1990, with an additional 98 units and
Colonial Village At River Hills Phase II opened in January, 1991 with 252 units.
St. Croix, Phase II, Live Oaks Plantation, Phase III and Colonial Village At
River Hills, Phase II are all reported to have achieved stabilized operations.
Additional newer multifamily rental apartment communities were developed within
the subject market area after 1992, including Bristol Place, Excellence, the
Vinings at Hunters Green Apartments and The Arbors at Fletcher Park. Bristol
Place Apartments is a 340-unit rental apartment community which is located in
the northeast corner of the intersection of Bruce B. Downs and Amberly Drive
within the Tampa Palms P.U.D. The Excellence Apartments are located along the
east side of 50th Street, just south of Fletcher Avenue. This project contains
78 one, two and three bedroom apartment units which opened for occupancy in
August 1994. The Vinings at Hunters Green have recently been constructed in the
Hunters Green development. This 240-unit apartment development contains 1, 2,
and 3 bedroom apartments. The Arbors at Fletcher Park is a new, upscale ZOM
apartment community which has recently opened along the south side of Fletcher
Avenue, approximately 1/4 mile west of I-75. This development contains 352
apartment units which reflect top of the market rents. In addition to these
newly opened apartment communities, Phase III of the subject Colonial Village At
River Hills development, containing 276 new apartments units, opened in August
1996.
49
<PAGE>
HIGHEST AND BEST USE: (CONT'D.)
- --------------------------------------------------------------------------------
The Appraiser's survey of comparable rental properties within the subject
project's immediate market area has produced an indicated overall occupancy
level of 94.7%, which is similar to the Appraiser's 1997 occupancy survey which
reflected an overall occupancy within the market of 94.0%. Recognizing the
current occupancy levels reflected within the market, it appears that a
reasonably good level of demand exists within the subject market area for rental
apartment units.
However, economic rent levels have been, and continue to be, relatively low.
This is attributed to past and current over-building which has occurred in the
subject market, resulting in an over-supply situation within the subject rental
apartment market. Although it appears that economic rents are beginning to edge
upward, very moderate rent increases have been realized over the last several
years. In order to substantiate this trend, a comparison has been made of rent
levels reported in February 1993, February 1994, February 1995, March 1996, and
January 1997 to current rent levels at a number of those projects which have
been given primary consideration in estimating the economic rent for the
subject. In addition, the subject project's rent levels for this time frame have
also been set out as follows:
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
QUOTED RENT RATE
- ---------------------------------------------------------------------------------------------
Unit
Project Type 02/93 02/94 02/95 03/96 01/97 01/98
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Colonial Village 1/1 $439-$469 $449-$479 $459-$489 $489-$519 $479-$509 $474-$529
@ River Hills I 2/2 $565-$595 $565-$595 $585-$615 $615-$645 $599-$629 $594-$649
- ---------------------------------------------------------------------------------------------
Colonial Village 1/1 $429-$499 $429-$489 $429-$499 $459-$549 $429-$519 $459-$549
@ River Hills II 2/2 $589-$599 $599-$609 $619-$639 $659-$679 $619-$639 $649-$679
- ---------------------------------------------------------------------------------------------
Oak Ramble 1/1 $475-$565 $475-$565 $505-$575 $515-$615 $525-$625 $525-$625
2/2 $ 600-725 $600-$725 $630-$750 $640-$740 $650-$675 $650-$670
- ---------------------------------------------------------------------------------------------
Cypress Run I 1/1 $395-$480 $395-$480 $420-$510 $395-$515 $435-$580 $450-$580
2/1 $500-$520 $500-$520 $530-$570 $520-$545 $580-$630 $580-$630
2/2 $565-$600 $565-$600 $575-$675 $550-$585 $630-$680 $630-$680
3/2 $700-$725 $700-$725 $720-$805 $720-$745 $720-$770 $745-$800
- ---------------------------------------------------------------------------------------------
Ashton Park 1/1 $425-$505 $445-$515 $445-$535 $450-$535 $450-$560 $490-$580
2/1 $595-$605 $600-$610 $635-$645 $610-$630 $646-$656 $640-$655
2/2 $575-$630 $620-$640 $605-$655 $640-$665 $616-$692 $670-$715
- ---------------------------------------------------------------------------------------------
Windridge 1/1 $380-$430 $415-$465 $415-$455 $399-$425 $435-$475 $450-$495
2/2 $530-$540 $550-$560 $ 550 $ 525 $ 565 $ 575
- ---------------------------------------------------------------------------------------------
Hidden Palms 1/1 $420-$475 $440-$485 $440-$495 $440-$495 $465-$530 $485-$550
2/1 $550-$565 $565-$580 $565-$585 $565-$585 $585-$615 $605-$635
2/2 $610-$655 $615-$675 $615-$675 $655-$715 $655-$725 $675-$745
- ---------------------------------------------------------------------------------------------
Turtle Creek 1/1 $369-$460 $389-$479 $389-$479 $395-$499 $405-$499 $425-$550
2/2 $525-$630 $555-$640 $555-$640 $595-$670 $605-$690 $625-$715
- ---------------------------------------------------------------------------------------------
Broadmoor 1/1 $365-$420 $370-$420 $390-$445 $405-$450 $415-$470 $400-$495
2/1 $485-$495 $490-$500 $515-$525 $540-$550 $550-$560 $555-$565
2/2 $505-$515 $510-$520 $540-$550 $575-$585 $585-$595 $595-$605
- ---------------------------------------------------------------------------------------------
</TABLE>
50
<PAGE>
HIGHEST AND BEST USE: (CONT'D.)
- --------------------------------------------------------------------------------
From this data, it is evident that most of these projects have achieved moderate
rent increases over the last 36-month period, with some of the properties having
remained basically stable or even reflecting decreasing rent levels. Therefore,
current demand appears to be insufficient to warrant new construction on the
subject site and rent levels remain moderate, further impacting project
feasibility.
MAXIMALLY PRODUCTIVE:
- --------------------
The subject site is well located in an immediate market area which serves as a
rental apartment center for the northeast Tampa area. Access to and visibility
of the site is good and the property is well located in regard to area
employment, educational, recreational, retail shopping and commercial support
facilities. It appears that a moderate level of demand for multifamily rental
apartments exists within the market and rental rates appear below norms required
to support typical new cost.
Based upon a review of the market data presented herein, it was the Appraiser's
opinion that the highest and best use of the subject site, as if vacant, would
be for speculative investment in anticipation of future development with
multifamily rental apartment improvements. Timing for development of the subject
site would be dependent upon an increase in demand and economic rental rate
conditions relative to comparable properties within the marketplace.
HIGHEST AND BEST USE, AS IMPROVED
---------------------------------
In analyzing the highest and best use of the subject site, as improved, the
existing improvements to the subject site and the characteristics of the subject
property in relation to the four criteria to highest and best use, as previously
discussed in this Highest and Best Use analysis have also been recognized. A
discussion of each of these four criteria and the subject property's
corresponding characteristics has been set out below.
PHYSICALLY POSSIBLE:
- -------------------
The subject site is currently improved with Phase I of the Colonial Village At
River Hills. This complex consists of 31 two-story apartment buildings which
contain a total of 248 rental apartment units. The subject property consists of
128 one-bedroom/one-bath units containing 734 square feet of living area, and
120 two-bedroom/two-bath units containing 977 square feet of living area.
Additional property improvements include a clubhouse/office facility, two
racquetball courts, a swimming pool, a tennis court, a laundry facility, asphalt
paved parking lots and circulation drives with sidewalks and concrete curbing
and an irrigation system.
The subject property contains a very extensive storm water retention and soil
filtration system due to its proximity to environmentally sensitive wetlands.
The project is provided an attractive view amenity of the retention ponds and
canals utilized for the subject drainage system as well as of the lowland areas
of the Hillsborough River flood plain.
51
<PAGE>
HIGHEST AND BEST USE: (CONT'D.)
- --------------------------------------------------------------------------------
The subject property currently suffers from deferred maintenance relating to
several items, however, the improvements appeared to be in generally good
condition during inspections. The improvements are of good quality construction,
are attractive in appearance and have been functionally designed for utilization
as a multifamily rental apartment development.
LEGALLY PERMISSIBLE:
- -------------------
The subject site is currently zoned RMFA, Multiple Family Residential Alternate
by the City of Temple Terrace. The subject property, as improved, appears to
represent a legal use of the subject site based upon zoning regulations.
In addition, the subject property reflects an MDR, Medium Density Residential
classification under the Temple Terrace Comprehensive Land Use Plan. This land
use classification provides for a maximum density of 18 dwelling units per acre.
FINANCIALLY FEASIBLE:
- --------------------
The subject project was opened in the Spring of 1987 and has been successfully
operating as a rental apartment project since that time. The 1990 overall
average occupancy level for the subject property equaled 91.5%; the 1991 overall
occupancy level for the subject equaled 86.6% and the subject's 1992 overall
average occupancy level equaled 88.3%. During 1993 the subject property achieved
an average occupancy level of 92.5%, the 1994 overall occupancy level for the
subject property equaled 95.5%, the 1995 overall occupancy level for the subject
property equaled 95.0%, the 1996 overall occupancy for the subject property
equaled 91.8% and the 1997 overall occupancy for the subject property equaled
86.0%.
The subject property reflects a current reported occupancy level of 89.5%, which
appears to be substantially below current market norms. The subject property's
occupancy levels appear to have been negatively impacted by the opening of
Colonial Village At River Hills Phase III in August 1996. A total of 172 units
have been leased in Phase III, with 210 units remaining vacant. Given this
project's previous absorption levels, it appears that it should take less than
one year before the new units in Phase III will be absorbed.
During the last several years, the subject market area has reflected moderate
rent levels with very moderate upward movement in rental rates. Between February
1993 and February 1994, the base rents for the subject one-bedroom/one-bath
units increased 2.28% and the subject two-bedroom/two-bath units reflected no
change in rental rates. During the period between February 1994 and February
1995, the base rent for the subject's one-bedroom units increased by 2.23% and
the base rents for the two-bedroom units increased by 3.54% and between February
1995 and February 1996 the base rent for the subject's one bedroom units
increased by 6.53% and the base rents for the two bedroom units increased by
5.13%. Between March 1996 and January 1997, the base rent for the subject's one-
bedroom units decreased by 2.04% and the base rent for the two-bedroom units
decreased by 2.60% and between January 1997 and January 1998, the base rent for
the subjects one bedroom units decreased by 1.05% and the base rent for the two-
bedroom units decreased by 84%.
52
<PAGE>
HIGHEST AND BEST USE: (CONT'D.)
- --------------------------------------------------------------------------------
MAXIMALLY PRODUCTIVE:
- --------------------
The existing improvements to the subject site represent a substantial use to the
property. They are of good quality construction, functional in design,
attractive in appearance, and were in generally good condition when inspected.
Based upon this data, it appears that there is no alternative legal use that
could justify removal of the existing improvements. No probable modifications to
the subject's current use appear to exist. Therefore, the estimated highest and
best use of the subject site, as currently improved, would be for the continued
operation of the property as a rental apartment development with long-term (10+
years) condominium conversion potential.
53
<PAGE>
- --------------------------------------------------------------------------------
VALUATION
- --------------------------------------------------------------------------------
The appraisal process is an orderly process in which the data used to estimate
the value of the subject property are acquired, classified, analyzed and
presented. The first step is defining the appraisal problem (i.e.,
identification of the real estate, the effective date of the value estimate, the
property rights being appraised, and the type of value sought). Once this has
been accomplished, the Appraiser collects and analyzes the factors that affect
the market value of the subject property. These include area and neighborhood
analysis, site and improvement analysis, highest and best use analysis, and the
application of the three approaches to estimating the property's value.
Appraisers generally use three approaches to value: the Cost Approach; Direct
Sales Comparison Approach (also known as the Market Data Approach); and the
Income Approach.
The first approach available to the Appraiser is the Cost Approach to value.
Accrued depreciation is calculated and deducted from the estimated cost new of
the improvements. The estimated depreciated cost new is then added to the land
value. The resultant figure indicates the value of the whole property.
Generally, the land value is obtained through the Direct Sales Comparison
Approach. Reproduction or replacement cost new of the improvements is estimated
on the basis of current prices for the component parts of the building less
depreciation, computed after analyzing the disadvantages or deficiencies of the
existing building as compared to a new building.
The Income Approach is predicated on the assumption that there is a relationship
between the amount of income a property will earn and its value. This approach
is based on the principle that value is created by the expectation of benefits
derived in the future. The anticipated annual net income of the subject property
is processed to produce an indication of value. Net income is the income
generated before payment of any debt service. The process of converting it into
value is called capitalization, which involves dividing the net income by a
capitalization rate. Factors such as risk, time, interest on the capital
investment, and recapture of the depreciating asset are considered in the rate.
The appropriateness of this rate is critical, and there are a number of
techniques by which it may be developed.
The Direct Sales Comparison Approach is used to estimate the value of the land
as if vacant and/or the whole property as improved. The Appraiser gathers data
on sales of comparable properties and analyzes the nature and condition of each
sale, making logical adjustments for dissimilar characteristics. Typically, a
common denominator is found. For land value, this is usually either a price per
acre, a price per square foot, or a price per unit; for improved properties, the
common denominator may be price per square foot, price per unit or room, or a
gross rent multiplier. The Direct Sales Comparison Approach gives a good
indication of value when sales of similar properties are available.
54
<PAGE>
VALUATION: (CONT'D.)
- --------------------------------------------------------------------------------
A final step in the appraisal process is the reconciliation or correlation of
the value indications. In the reconciliation, or correlation, the Appraiser
considers the relative applicability of each of the three approaches used,
examines the range between the value indications, and places major emphasis on
the approach that appears to produce the most reliable solution to the specific
appraisal problem. The purpose of the appraisal, the type of property, and the
adequacy and reliability of the data are analyzed; these considerations
influence the weight given to each of the approaches to value. In analyzing the
three approaches to value, it can be readily observed that most of the
information pertaining to the fair market value of the subject property must be
derived from the marketplace because the Appraiser anticipates the actions of
buyers and sellers in the market.
In the following portions of this appraisal report, the Cost, Income and Market
Approaches to value have been developed into an indicated market value estimate.
The indicated market values reflected by the applicable approaches have been
correlated into a final value estimate. These approaches to value and the final
correlation of value have been set out within this report as follows.
COST APPROACH:
- -------------
The Cost Approach to value is defined as follows:
"That approach in appraisal analysis which is based on the proposition that
the informed purchaser would pay no more than the cost of producing a
substitute property with the same utility as the subject property. It is
particularly applicable when the property being appraised involves
relatively new improvements which represent the highest and best use of the
land or when relatively unique or specialized improvements are located on
the site and for which there exist no comparable properties on the market."
In estimating the market value of the subject property via the Cost Approach,
cost breakdowns for similar projects were reviewed. These detailed cost
breakdowns were then compared with cost estimates available from the Marshall
Valuation Service.
In estimating the replacement cost new for the subject's improvements, a cost
per square foot of building area indication as reflected from the previously
described Marshall Valuation Service has been utilized. This cost estimate
includes the following costs:
1) Plans, specifications, survey and building permits.
2) Cost on interim money during normal period of construction.
3) Cost of labor and materials.
4) Sales taxes on materials.
5) Utilities from building to lot line figured on normal setback.
55
<PAGE>
VALUATION: (CONT'D.)
- --------------------------------------------------------------------------------
6) Normal site preparation including trenching, excavating for concrete,
backfill and finish grading.
7) Prorated amount of real estate commission in tract construction.
8) Contractors overhead and profit including workmen's compensation, fire and
liability insurance, unemployment insurance, etc.
Based upon the Marshall Valuation Service cost data, the estimated cost per
square foot of building area has been estimated as follows:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
COST PER SQUARE FOOT OF
BUILDING AREA CALCULATIONS
- --------------------------------------------------------------------------------
CLASSIFICATION Multiple Residences / Good Quality
- --------------------------------------------------------------------------------
<S> <C> <C>
Base Unit Cost Per Square Foot $48.25
- --------------------------------------------------------------------------------
ADJUSTMENTS
- -----------
Roofing + $ 1.40
First Floor - $ 1.11
Floor Covering + $ 2.92
HVAC + $ 1.64
-------
- --------------------------------------------------------------------------------
Sum of Adjustments + $ 4.85
- --------------------------------------------------------------------------------
Summarized Cost Per SF $53.10
- --------------------------------------------------------------------------------
MULTIPLIER ADJUSTMENTS
- ----------------------
Current Cost Multiplier 1.03
Local Cost Multiplier .95
----
- --------------------------------------------------------------------------------
Total Multiplier x .98
----
- --------------------------------------------------------------------------------
Adjusted Unit Cost Per SF $52.04
- --------------------------------------------------------------------------------
</TABLE>
The indicated cost per square foot of building area as reflected herein equals
$52.04 per square foot. This cost estimate does not include the following items:
1) Costs of buying or assembling land such as escrow fees, legal fees,
property taxes, demolition or rough grading.
2) Pilings, which may be priced separately from the manual.
56
<PAGE>
VALUATION: (CONT'D.)
- --------------------------------------------------------------------------------
3) Land planning or preliminary concept and layout for large developments
including developer's overhead and profit.
4) Discounts or bonuses paid for financing.
5) Off site costs including paving, curbs and gutters, sidewalks, fencing or
landscaping.
6) Yard improvements including walks, landscaping, yard lighting, swimming
pools, etc.
7) Marketing costs to create the first occupancy, including model and
advertising expenses.
8) Contingency reserve where a percentage of the total cost is set aside for
future events, such as labor strikes, anticipated labor and material cost
increases, inc.
9) Appliances.
The cost items which have been added to the indicated price per square foot in
arriving at a value estimate for the subject property include appliances,
development fees, asphalt paving, patios, walks, fences, landscaping,
recreational facilities and out buildings. The sum of these items together with
the indicated price per square foot reflects the total replacement cost new
excluding indirect costs. The added indirect costs have been estimated at 15%
and include entrepreneurial profits and overhead. The sum of the total direct
costs and the total indirect costs equal the estimated replacement cost new.
The next step involved in developing the Cost Approach to value pertains to the
amount of accrued depreciation that adversely affects the subject improvements.
The total estimated amount of accrued depreciation of the improvements is to be
deducted from the total replacement cost new. This results in producing the
depreciated value of the improvements.
There are five basic elements of accrued depreciation which include:
1. Curable Physical Deterioration
2. Incurable Physical Deterioration
3. Curable Functional Obsolescence
4. Incurable Functional Obsolescence
5. External Obsolescence
57
<PAGE>
VALUATION: (CONT'D.)
- --------------------------------------------------------------------------------
CURABLE PHYSICAL DETERIORATION:
- ------------------------------
The subject property is approximately ten and one-half years old, is of good
quality construction and is in generally good condition. The subject property
appears to have been adequately maintained. However, a number of deferred
maintenance items were noted based upon a visual inspection of the subject
improvements and discussions with project management. These items of deferred
maintenance included:
1. The building exteriors need to be repainted.
2. Approximately 92 stairwells need to be replaced.
3. The parking lots and circulation drives need to be repaired and re-
sealed.
The cost to cure these items of deferred maintenance has been estimated at
approximately $315,000 based upon a review of cost estimates provided by
project management.
INCURABLE PHYSICAL DETERIORATION:
- ---------------------------------
Based upon the straight line method of calculating incurable physical
deterioration, an estimated effective age of 10.0 years and an estimated
economic life of 50 years, a deduction of 20% of the estimated replacement cost
new, less curable physical deterioration (if any), has been taken for incurable
physical deterioration.
FUNCTIONAL OBSOLESCENCE:
- -----------------------
The building design, including lay-out, building sizes, interior finishes and
construction materials as well as site improvements, appear to be appropriate
and well suited for utilization as a multifamily rental apartment development.
The quality and construction components of the subject improvements are
considered to be good and appropriate for the subject market area. Thus, no
functional obsolescence appears to impact the subject property.
EXTERNAL OBSOLESCENCE:
- ---------------------
The subject property is impacted by external obsolescence, which is partially
due to current economic conditions.
Construction costs have been creeping upward while real estate values in
relation to replacement costs have been lagging since 1988. The cost of
constructing new apartment complexes has continued to increase since the 1988
year, as numerous government agencies have continued to increase impact fees and
growth management regulations on development projects. Therefore, a gap has
occurred between replacement costs new and economic values in many income
producing properties. The amount of gross rent needed to support the completion
of a new apartment complex is typically higher than the economic rental rate for
a similar but older apartment complex due to the gap between cost and value.
This can be witnessed by comparing the rental rates for the subject apartment
complex (Colonial Village At River Hills I) to the rental rates for the similar,
but recently completed, Colonial Village At River Hills III complex, which is
located in proximity to the subject.
58
<PAGE>
VALUATION: (CONT'D.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
RENTAL RATES
APARTMENT COMPLEX # UNITS 1BR/1BA 2BR/2BA
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Colonial Village At River Hills I 128 $474-$529
(subject) 120 $594-$649
- --------------------------------------------------------------------------------
Colonial Village At River Hills 112 $549-$599
III (new) 140 $669-$734
- --------------------------------------------------------------------------------
</TABLE>
Colonial Village's Phase III project, which contains 276 total units, has 112
one-bedroom units that are offered at rents equating to $70.00-$75.00 per month
more than for the subject's one bedroom units. The 140 two-bedroom units in
Colonial Village's Phase III reflect rents between $120.00 to $135.00 per month
more than for the subject's two bedroom units. Colonial Village's Phase III also
has 24 three-bedroom units which are not similar to the subject's one and two-
bedroom units. This gap is not the only reason that external obsolescence
adversely affects the subject property. The subject property is adversely
impacted by the steady pressure from new apartment complexes that enter the
market. A portion of the apartment market desires new apartment units, as
opposed to older units, and will migrate into the new apartment complex even
though the rent may be higher. This creates downward pressure on occupancy
rates, which has been a factor at the subject property. The overall occupancy
rate for apartments in the subject's market area reflected by the Appraiser's
survey equaled 94.4%. Overall average occupancy rates that approach 95% tend to
tempt apartment developers to build new apartment complexes, particularly if
financing is readily available. This has been a factor in the Tampa apartment
market that has had an impact on the occupancy rate in the subject property.
In summary, rental rates for many older apartment complexes have not experienced
major escalations over the past few years, but overall occupancy rates in the
market have been increasing. The upward pressure on occupancy rates has tempted
developers to risk building new apartment units that need to be absorbed at
upper-end rental rates. There is a demand for new apartment units from a defined
segment of the market. This activity causes downward pressure on the occupancies
of some older apartment complexes, which can dissipate over time, as the market
area becomes fully built-out, or when new sources of supply are reduced.
The estimated economic or external obsolescence pertaining to the subject
property can be analyzed by first examining a partial summary of the Cost
Approach to value which will be presented in the following portion of this
report. That portion of the Cost Approach which is applicable to this type of
depreciation analysis has been summarized on the following page.
59
<PAGE>
VALUATION: (CONT'D.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------
COST APPROACH
- -------------------------------------------------------------------------------------------
<S> <C>
Building Construction - 211,192 SF @ $52.04/SF $10,990,432
Appliances - 248 units @ $2,150/unit $ 533,200
Unit Access Stairs - 124 flights @ $605/flight $ 75,020
Asphalt Paving, Line Striping, Curbing, etc. $ 152,500
Walks, Fences and Porches/Patios $ 396,800
Landscaping & Irrigation System $ 255,000
Development Fees $ 1,376,515
Recreational Facilities and Office Area $ 230,000
-----------
Total Direct Costs $14,009,467
PLUS Indirect Costs Estimated @ 15% $ 2,101,420
-----------
Estimated Replacement Cost New $16,110,887
LESS physical and functional types of depreciation:
Curable Physical Deterioration $ 315,000
Incurable Physical Deterioration ( R.C.N.
Less $315,000 in Deferred Maintenance x 20%) $ 3,159,177
Functional Obsolescence $ -0-
-----------
LESS total estimated depreciation from physical $(3,474,177)
deterioration and functional obsolescence ------------
INDICATED VALUE OF IMPROVEMENTS BEFORE GIVING $12,636,710
CONSIDERATION TO EXTERNAL OBSOLESCENCE
- -------------------------------------------------------------------------------------------
</TABLE>
The estimated value of the subject improvements, before considering external
obsolescence, equals $12,636,710. The Appraiser's next step involves a
comparison of this value indication to the values produced for the subject
property by the Income and Market Approaches. These two approaches to value have
been prepared in latter sections of this report. The indicated values produced
for the subject property from the application of the Income and Market
Approaches are summarized as follows:
INCOME APPROACH $ 8,250,000
MARKET APPROACH $ 8,630,000
60
<PAGE>
VALUATION: (CONT'D)
- --------------------------------------------------------------------------------
The indicated values produced from the Income and Market Approaches include the
-------
value of the subject's land. The partial summary of the Cost Approach did not
include the value of the subject land. Therefore, the value of the land in the
subject property should be deducted from the total value indications produced by
the Income and Market Approaches, so that these two approaches can be analyzed
based upon their respective values pertaining specifically to the subject
improvements.
The estimated value of the subject site, as if vacant, has been stated in this
report at $1,612,000. The subtraction of this land value from the total value
indications produced by the Income and Market Approaches reflects the total
-----
depreciated values attributed to the subject improvements from these two
- -----------
approaches to value. The calculations pertaining to this allocation process
have been summarized as follows:
<TABLE>
<CAPTION>
-----------------------------------------------------------------
INCOME MARKET
APPROACH APPROACH
-----------------------------------------------------------------
<S> <C> <C>
Total Indicated Value $8,250,000 $8,630,000
-----------------------------------------------------------------
LESS: Estimated Land Value - $1,612,000 - $1,612,000
-----------------------------------------------------------------
Indicated Total Depreciated Value $6,638,000 $7,018,000
of Subject Improvements
-----------------------------------------------------------------
</TABLE>
The partial summary of the Cost Approach previously indicated that the value of
the improvements, before giving consideration to external obsolescence, was
$12,636,710. A comparison of this value indication to the two values indicated
for the subject improvements, as produced from the Income and Market Approaches,
reflects the existence of a gap in values. This can be attributed to the
existence of external obsolescence in the subject property. The amount of this
gap in value has been summarized as follows:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------
INCOME MARKET
APPROACH APPROACH
- ------------------------------------------------------------------------------------------
<S> <C> <C>
Indicated value of subject improvements reflected from the $12,636,710 $12,636,710
Cost Approach before considering external obsolescence.
- ------------------------------------------------------------------------------------------
LESS: Indicated Value of Improvements Produced From:
The Income Approach - $ 6,638,000
-------------
The Market Approach -$ 7,018,000
------------
- ------------------------------------------------------------------------------------------
Indicated Amount of External Obsolescence $ 5,998,710 $ 5,618,710
- ------------------------------------------------------------------------------------------
</TABLE>
61
<PAGE>
VALUATION: (CONT'D)
- --------------------------------------------------------------------------------
The Appraiser has correlated the estimate of external obsolescence impacting the
subject property at $5,800,000, which is basically near the middle of the range.
The estimated amount of external obsolescence affecting the subject property has
been based on partially depreciated replacement costs new for the subject
improvements as reflected from the Cost Approach, compared to the total value
indications reflected for the improvements that were produced from the Income
and Market Approaches to value. The estimated amount of external obsolescence
indicates that economic values, based on rental rates and income levels for the
subject property, do not support and are below the current replacement cost new
of the subject improvements.
The subject improvements have been analyzed in an effort to estimate the various
types of accrued depreciation that reduce the replacement cost new of the
subject improvements, as if they were to be constructed in the current market.
The various types of depreciation found to exist in the subject property have
been summarized as follows:
<TABLE>
<S> <C>
Physical curable deterioration (deferred maintenance) $ 315,000
----------------------------------------------------------------------
Physical incurable deterioration $3,159,177
----------------------------------------------------------------------
Functional curable obsolescence $ -0-
----------------------------------------------------------------------
Functional incurable obsolescence $ -0-
----------------------------------------------------------------------
External (economic) obsolescence $5,800,000
----------
----------------------------------------------------------------------
TOTAL ESTIMATED ACCRUED DEPRECIATION $9,274,177
----------------------------------------------------------------------
</TABLE>
Based upon the depreciation analysis, the estimated, total accrued depreciation
impacting the subject improvements would equal approximately $9,274,177.
The total estimated depreciation applicable to the subject property equals
$9,274,177. This amount has been subtracted from the estimated replacement cost
new in order to arrive at the estimated depreciated replacement cost new for the
subject project. In arriving at a value estimate for the subject property, via
the Cost Approach to value, it was then necessary to add the estimated market
value of the land.
The final step in estimating the market value of the subject project via the
Cost Approach is to estimate the market value of the land. For purposes of
utilization in the Cost Approach to value, the market value of the subject site
has been estimated based upon it being vacant but ready for development with the
subject apartment project.
[LAND COMPARABLES MAP APPEARS HERE]
62
<PAGE>
VALUATION: (CONT'D)
- --------------------------------------------------------------------------------
In estimating the market value of the subject site, the Tampa market area has
been researched for recent sales of multifamily residential development sites
which could be directly compared to the subject property. Those sales which are
considered to provide the best available indications of market value for the
subject site, as if vacant, have been summarized as follows:
COMPARABLE NO. 1 is located at the southeast corner of Tampa Palms Boulevard
- ----------------
and Palm Springs Boulevard, north of Bruce B. Downs Boulevard, in the Tampa
Palms Planned Development. This site is currently under contract between Lennar
Homes (Grantor) and Del American Properties (Grantee) at a reported contract
price of $2,886,000. This site contains 22.84 acres of net useable site area,
is proposed for development with a 390-unit luxury apartment complex to be known
as the Grand Reserve at Tampa Palms and reflects a per unit contract price of
$7,400 per rental apartment unit.
This site reflected general physical characteristics comparable to that of the
subject, was zoned for multifamily residential development at the time of sale
and was fully served by all desired public utilities, including sewer and water.
The sale property features wetland areas (17.43 acres) which provide aesthetic
views and buffer this site from adjacent properties. This site is located in
Area Four of Tampa Palms which is not responsible for the Tampa Palms Central
Drainage District (C.D.D.) fees. No additional on-site drainage/retention was
necessary since this site is served by the Tampa Palms master retention system.
This property was considered very comparable to the subject in most respects.
The only significant dissimilarities between this comparable sale and the
subject relate to location, access/exposure and drainage/retention. The sale
property is located within the Tampa Palms area of the northeastern Tampa Metro
Area. This property is considered superior to the subject site in regards to
location and has been adjusted downward by 10% for this factor. The sale
property is located along interior roads within the Tampa Palms development and
is considered inferior to the subject in regards to access/exposure. A positive
5% adjustment has been made for this factor. The final adjustment to this sale
relates to drainage/retention. The sale property is superior to the subject in
that it is served by the off-site drainage retention facilities for the overall
Tampa Palms development. Therefore, a negative adjustment of 10% has been made
for this superior site characteristic. In all other respects the sale property
is considered comparable to the subject and no further adjustments are required.
Applying this net downward adjustment of 15% to the comparables unadjusted
contract price produces an adjusted unit value indication for the subject site
of $6,290 per rental apartment unit.
--------------------------------
COMPARABLE NO. 2 is located at the termination of Raulerson Ranch Road, north of
- ----------------
U.S. Highway 301, and is situated in the southeast quadrant of the Interstate
75/Fowler Road interchange. This site was purchased in March 1996 and contains
19.54 acres of gross site area. The property was purchased by Gatehouse
Development, Inc (Grantee) from Susan H. and Thomas Paulus (Grantor) at a
confirmed purchase price of $1,260,000. This site was purchased for development
with a 313-unit affordable housing complex and reflects a per unit acquisition
cost of $4,026 per rental apartment unit.
63
<PAGE>
VALUATION: (CONT'D)
- --------------------------------------------------------------------------------
This site reflected physical characteristics comparable to that of the subject,
was zoned for multifamily residential development at the time of sale, and was
fully served by all desired public utilities, including sewer and water. This
site has visibility from, but no direct access to, Fowler Road and Interstate
75. This purchase was contingent upon the property's zoning (C-G and RDC-12)
being changed to PD-H with a future land use of UMU-20, Urban Mixed Use. The
sale property is located in a more out-lying area of northeastern Hillsborough
County and is considered somewhat inferior to the subject in regards to
location.
The sale property is considered generally very comparable to the subject in most
respects and the only significant dissimilarities between the sale property and
the subject relate to location, access/exposure and the subject's inclusion of
approximately 17.64 acres of jurisdictional wetlands. The sale property is
considered locationally inferior to the subject due to its more out-lying
location and has been adjusted upward by 15% for this factor. The sale property
is also considered inferior to the subject in regards to access/exposure due to
its location at the termination of a dead-end road. This comparable has
therefore been adjusted upward by 15% for access/exposure. The subject site has
approximately 17.64 access of jurisdictional wetlands which front along the
Hillsborough River. Recognizing the view amenities and buffering
characteristics of this wetland area, the comparable sale is considered inferior
to the subject and has been adjusted upward by 10% to reflect this inferior site
characteristic. In all other respects the sale property is considered comparable
to the subject and no further adjustments are required.
Applying this net upward adjustment of 40% to the sale's unadjusted purchase
price produces an adjusted unit value indication for the subject site of $5,636
-------
per rental apartment unit.
- -------------------------
COMPARABLE NO. 3 is located in the southwest quadrant of the intersection of
- ----------------
Bruce B. Downs Boulevard (C.R. 581) and Tampa Palms Boulevard, within the Tampa
Palms Planned Development. This site was purchased in February 1996 and
contains 18.23 acres of gross site area. The property was purchased by Tampa
Palms Apartments, Ltd. at a confirmed purchase price of $1,874,000. This site
was purchased for development with a 248-unit apartment development known as
Carrington Park. This purchase price reflects a unit value indication of $7,556
per unit.
This site reflects general physical characteristics comparable to that of the
subject, however, it is located along the more heavily traveled and developed
Bruce B. Downs Boulevard corridor. This property was zoned for multifamily
residential development at the time of sale and was fully served by all desired
public utilities, including sewer and water. Although this property is located
in the Tampa Palms development, it is not a part of the C.D.D. and is not
responsible for C.D.D. fees. The site needed substantial fill but it was the
sellers' responsibility to bring the site to grade prior to closing. No
additional on-site retention was necessary since this site is served by the
Tampa Palms master retention system.
This property was considered very comparable to the subject in most respects.
The only significant dissimilarities between this comparable sale and the
subject relate to location, access/exposure, the subject's inclusion of
approximately 17.64 acres of jurisdictional wetlands and the sale property's
superior drainage/retention. The sale property is located within the Tampa Palms
area of the northwestern Tampa Metro Area. This property is considered superior
to the subject in regards to location and a downward adjustment of 10% has been
applied to this sale for this factor. The sale property is also considered
superior to the subject site in regards to access/exposure due to its location
along the more heavily traveled four-lane Brice B. Downs corridor. A negative
adjustment of 10% has been made to address this superior site
64
<PAGE>
VALUATION: (CONT'D)
- --------------------------------------------------------------------------------
characteristic. The next significant dissimilarity between this comparable sale
and the subject relates to the subject's inclusion of approximately 17.64 acres
of jurisdictional wetland. This jurisdictional wetland area which fronts along
the Hillsborough River is considered to have a positive benefit to the subject
site. The benefit is due to its buffering characteristics, view amenity, etc.
The sale property contains no wetland buffer areas, and, is considered inferior
to the subject in this respect. The Appraiser has therefore adjusted this
comparable sale upward by 10% to reflect this inferior site characteristic. The
final adjustment to this sale relates to drainage/retention. The sale property
is superior to the subject in that it is served by an off-site drainage
retention facility for the overall Tampa Palms development. Therefore, a
negative adjustment of 10% has been made for this superior site characteristic.
In all other respects this sale property is considered comparable to the subject
and no further adjustments are required.
Applying this net downward adjustment of 20% to the sale's unadjusted purchase
price produces an adjusted unit value indication for the subject site of $6,045
-------
per rental apartment unit.
- -------------------------
COMPARABLE NO. 4 is located in the northwest corner of Lumsden Road and Paul's
- ----------------
Road in the Brandon area of Tampa. This site was purchased in December 1995 and
contains 41.52 acres of gross site area. This property was purchased by Paddock
Club Brandon Limited Partnership and Flournoy Development Company from U.S.
Highway Corporation at a confirmed purchase price of $2,524,000. This site has
been approved for a 440-unit two phased rental apartment community known as
Heather Lakes and reflects a per unit acquisition price of $5,736 per rental
apartment unit.
This site reflects physical characteristics comparable to that of the subject,
was zoned for multifamily residential development at the time of sale, and was
fully served by all desired public utilities, including sewer and water. This
site is located in the more outlying Brandon vicinity of the Tampa Metropolitan
Area and is considered somewhat locationally inferior to the subject site.
This property was considered very comparable to the subject in most respects.
The only significant dissimilarities between the comparable sale and the subject
relates to location and the subjects inclusion of approximately 17.64 acres of
jurisdictional wetlands. The sale property is located in the more outlying
Brandon area and is considered somewhat inferior to the subject in regards to
location. Therefore, a positive adjustment of 10% has been made recognizing
this sites inferior location. The only other significant dissimilarity between
this comparable sale and the subject relates to the subject's inclusion of
approximately 17.64 acres of jurisdictional wetland. This jurisdictional
wetland area fronts along the Hillsborough River and is considered to have a
positive benefit to the subject site. The benefit is due to its buffering
characteristics, view amenity, etc. The sale property has no buffer area and is
considered inferior to the subject in this respect. The Appraiser has therefore
adjusted this comparable sale upward by 10% to reflect this inferior site
characteristic. In all other respects this sale property is considered
comparable to the subject and no further adjustments are required.
Applying this net upward adjustment of 20% to the sale's unadjusted purchase
price produces an adjusted unit value indication for the subject site of $6,883
------
per rental apartment unit.
- -------------------------
LAND SALE ADJUSTMENT GRID
<TABLE>
<CAPTION>
SUBJECT COMPARABLE 1 COMPARABLE 2 COMPARABLE 3 COMPARABLE 4 COMPARABLE 5
<S> <C> <C> <C> <C> <C> <C>
LOCAION South side of Southeast corner Northerly Southwest corner Northwest South side of
Temple Terrace of Tampa Palms terminus of Bruce B. Downs corner of Fletcher Ave.
Highway Blvd. and Palm Raulerson Blvd. and Tampa Lumsden Rd. and
Springs Blvd. Ranch Rd. Palms Blvd. Pauls Rd.
SIZE 18.90 Net AC 22.84 Net AC 19.54 Net AC 18.23 Net AC 41.52 Net AC 22.458 Net AC
ACCESS Temple Terrace Tampa Palms Raulerson Bruce B. Downs Lumsden Rd./ Fletcher Ave.
Highway Blvd./Palms Ranch Rd. Blvd./Tampa Palms Pauls Rd.
Blvd. Blvd.
SHAPE Irregular Irregular Irregular Irregular Irregular Irregular
UTILITIES S, W, E, T S, W, E, T S, W, E, T S, W, E, T S, W, E, T S, W, E, T
SALE DATE N/A Current Contract March 1996 February 1996 December 1995 March 1995
SALE PRICE N/A $2,886,000 $1,260,000 $1,874,000 $2,524,000 $2,200,000
SALE PRICE/UNIT N/A $7,400/Unit $4,026/Unit $7,556/Unit $5,736/Unit $6,250/Unit
MARKET CONDITIONS N/A 0% 0% 0% 0% 0%
TIME ADJUSTED SALE
PRICE/UNIT N/A $7,400/Unit $4,026/Unit $7,556/Unit $5,736/Unit $6,250/Unit
</TABLE>
ADJUSTMENTS
<TABLE>
<S> <C> <C> <C> <C> <C>
LOCATION -10% +15% -10% +10% +5%
SIZE 0% 0% 0% 0% 0%
ACCESS/EXPOSURE +5% +15% -10% 0% 0%
WETLAND AREAS 0% +10% +10% +10% +5%
DRAINAGE/RETENTION -10% 0% -10% 0% 0%
NET ADJUSTMENT -15% +40% -20% +20% +10%
PER UNIT VALUE INDICATION $6,290/Unit $5,636/Unit $6,045/Unit $6,883/Unit $6,875/Unit
</TABLE>
- --------------
** S = Sewer
W = Water
E = Electric
T = Telephone
65
<PAGE>
VALUATION: (CONT'D)
- --------------------------------------------------------------------------------
COMPARABLE NO. 5 is located along the south side of Fletcher Avenue,
- -----------------
approximately 1/4 mile west of Interstate 75, in the Temple Terrace area. This
site was purchased in March 1995 and contains 22.458 acres of net useable site
area. This property was purchased by ZOM Communities Incorporated from Mary K.
Wetherington at a confirmed purchase price of $2,200,000. This site has been
developed with the 352-unit rental apartment community known as The Arbors at
Fletcher Park, and reflects a per unit acquisition price of $6,250 per rental
apartment unit.
This site reflects physical characteristics comparable to that of the subject,
was zoned for multifamily residential development at the time of sale, and was
fully served by all desired public utilities, including sewer and water. This
site is located in a more outlying area of Temple Terrace and is considered
somewhat inferior to the subject site in regard to location.
This property was considered very comparable to the subject in most respects.
The only significant dissimilarities between this comparable sale and the
subject relates to location and the subject's inclusion of approximately 17.64
acres of jurisdictional wetlands. The sale property is located in a more out-
lying area of temple Terrace and is considered somewhat locationally inferior to
the subject. Therefore, an upward adjustment of 5% has been applied to this
sale in recognition of its inferior location. The only other significant
dissimilarity between this comparable sale and the subject relates to the
subject's inclusion of approximately 17.64 acres of jurisdictional wetland.
This jurisdictional wetland area which fronts along the Hillsborough River is
considered to have a positive benefit to the subject site. The benefit is due
to its buffering characteristics, view amenity, etc. The sale property contains
approximately 12.22 acres of wetland buffer area, however, is still considered
inferior to the subject in this respect. The Appraiser has therefore adjusted
this comparable sale upward by 5% to reflect this inferior site characteristic.
In all other respects this sale property is considered comparable to the subject
and no further adjustments are required.
Applying this net downward adjustment of 10% to the sale's unadjusted purchase
price produces an adjusted unit value indication for the subject site of $6,875
------
per rental apartment unit.
- -------------------------
The five land comparables reviewed herein have reflected adjusted unit value
indications for the subject site of $6,290, $5,636, $6,045, $6,883, and $6,875
per rental apartment unit, respectively.
Based upon a review of the comparable land sales data as set out herein, and
recognizing the propensity within the market to deal in round figures, the
market value of the subject site would approximate $6,500 per rental apartment
unit. This market value estimate contemplates the subject site as being a fully
developed parcel ready for immediate new construction. This includes the
availability of utilities to support multifamily development and there being no
adverse subsoil conditions.
Therefore, the market value estimate for the subject site for purposes of
utilization in the Cost Approach has been calculated as follows:
248 Units @ $6,500/Unit = $1,612,000
The land value estimate for the subject site, as arrived at herein, reflects the
final step required in order to arrive at a value estimate for the subject
project via the Cost Approach. Please refer to the following chart for the
summary of the Cost Approach to value as stated herein.
66
<PAGE>
VALUATION: (CONT'D)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COST APPROACH
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Building Construction - 211,192 SF @ $52.04/SF $10,990,432
Appliances - 248 units @ $2,150/unit $ 533,200
Unit Access Stairs - 124 flights @ $605/flight $ 75,020
Asphalt Paving, Line Striping, Curbing, etc. $ 152,500
Walks, Fences and Porches/Patios $ 396,800
Landscaping & Irrigation System $ 255,000
Development Fees $ 1,376,515
Recreational Facilities and Office Area $ 230,000
-----------
Total Direct Costs $14,009,467
PLUS Indirect Costs Estimated @ 15% $ 2,101,420
-----------
Estimated Replacement Cost New $16,110,887
Accrued Depreciation:
Curable Physical Deterioration $ 315,000
Incurable Physical Deterioration $ 3,159,177
Functional Obsolescence $ -0-
Economic Obsolescence $ 5,800,000
LESS Total Estimated Depreciation From All Causes $(9,274,177)
-----------
Estimated Depreciated Value of Improvements $ 6,836,710
PLUS Estimated Market Value of the Land $ 1,612,000
-----------
Total Indicated Value Via The Cost Approach to Value $ 8,448,710
Rounded To $ 8,449,000
- -------------------------------------------------------------------------------------------------
</TABLE>
67
<PAGE>
VALUATION: (CONT'D)
- --------------------------------------------------------------------------------
INCOME APPROACH
- ---------------
The Income Approach to value is defined as being:
"That procedure in appraisal analysis which converts anticipated benefits
(dollar income or amenities) to be derived from the ownership of property
into a value estimate. The Income Approach is widely applied in appraising
income-producing properties. Anticipated future income and/or reversions
are discounted to a present worth figure through the capitalization
process."
The subject property is defined as being an income property. The primary
purpose of an income property is to produce monetary income.
In estimating the market value of the subject property via the Income Approach,
a one-year income and expense projection period has been utilized. This form of
analysis appears the most appropriate, recognizing that the subject property has
achieved stabilized operations.
The income and expense data as compiled for the subject project has been
discussed in detail herein.
TOTAL GROSS POTENTIAL INCOME ESTIMATES
- --------------------------------------
The rental apartment market within the subject market area was researched and
analyzed prior to estimating the gross potential rental income applicable to the
subject project.
The rent comparables that were reviewed relate primarily to newer projects
within the subject's general market area. The primary rent comparables given
consideration herein have been summarized on the following pages to this report.
However, Comparable Rentals 1 through 8 have been given the most consideration
when estimating the economic rental rates for the subject units.
[LOCATION MAP OF COMPARABLES APPEARS HERE]
68
<PAGE>
- --------------------------------------------------------------------------------
OAK RAMBLE
[PHOTO APPEARS HERE]
<TABLE>
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
LOCATION 14627 Grenadine Drive, Tampa, Florida
- ------------------------------------------------------------------------------------------------------------------------------------
AGE 12 years
- ------------------------------------------------------------------------------------------------------------------------------------
NO. OF UNITS 256
- ------------------------------------------------------------------------------------------------------------------------------------
OCCUPANCY 96.9%
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
UNIT TYPE UNIT SIZE RENT/MO. RENT/SF
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1BR/1BA 820 SF $525 $.64
1BR/1BA 820 SF $625 $.76
2BR/2BA 1,054 SF $650 $.62
2BR/2BA 1,054 SF $675 $.64
- ------------------------------------------------------------------------------------------------------------------------------------
SPECIALS This project is reporting no rent specials.
- ------------------------------------------------------------------------------------------------------------------------------------
RENT PREMIUMS $5/Mo. - Upstairs
$20/Mo. - Screened Porch
$20/Mo. - Mirrored Wall
- ------------------------------------------------------------------------------------------------------------------------------------
COMMENTS This property is very comparable to the subject in regard to quality and amenities.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
69
<PAGE>
- --------------------------------------------------------------------------------
CYPRESS RUN - PHASE I
[PHOTO APPEARS HERE]
<TABLE>
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
LOCATION 15501 Bruce B. Downs Boulevard, Tampa, Florida
- ------------------------------------------------------------------------------------------------------------------------------------
YEAR AGE 10.5 years
- ------------------------------------------------------------------------------------------------------------------------------------
NO. OF UNITS 408
- ------------------------------------------------------------------------------------------------------------------------------------
OCCUPANCY 95.8%
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
UNIT TYPE UNIT SIZE RENT/MO. RENT/SF
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1BR/1BA 579 SF $450 - $500 $.78 - $.86
1BR/1BA 650 SF $480 - $530 $.74 - $.82
1BR/1BA 781 SF $530 - $580 $.68 - $.74
2BR/1BA 822 SF $580 - $630 $.71 - $.77
2BR/2BA 988 SF $630 - $680 $.64 - $.69
3BR/2BA 1,070 SF $745 - $800 $.70 - $.75
- ------------------------------------------------------------------------------------------------------------------------------------
SPECIALS This project is reporting no rent specials.
- ------------------------------------------------------------------------------------------------------------------------------------
RENT PREMIUMS Rent premiums are included in the above set-out range. No breakdown of
individual premiums were provided to the Appraisers.
- ------------------------------------------------------------------------------------------------------------------------------------
COMMENTS This property is generally comparable to the subject in regard to quality
and amenities.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
70
<PAGE>
WINDRIDGE
[PHOTO APPEARS HERE]
<TABLE>
<S> <C> <C> <C> <C>
- -----------------------------------------------------------------------------
LOCATION 4301 Bruce B. Downs Boulevard, Tampa, Florida
- -----------------------------------------------------------------------------
AGE 15 years
- -----------------------------------------------------------------------------
NO. OF UNITS 264
- -----------------------------------------------------------------------------
OCCUPANCY 98.9%
- -----------------------------------------------------------------------------
UNIT TYPE UNIT SIZE RENT/MO. RENT/SF
- -----------------------------------------------------------------------------
1BR/1BA 540 SF $450 $.83
1BR/1BA 617 SF $465 $.75
1BR/1BA 671 SF $495 $.74
2BR/2BA 920 SF $575 $.63
- -----------------------------------------------------------------------------
SPECIALS This property reports no rent specials.
- -----------------------------------------------------------------------------
RENT PREMIUMS None
- -----------------------------------------------------------------------------
COMMENTS This property is generally very comparable to the subject.
However, units within this development do contain screened
porches or patios.
- -----------------------------------------------------------------------------
</TABLE>
71
<PAGE>
HIDDEN PALMS
[PHOTO APPEARS HERE]
<TABLE>
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------
LOCATION 1455 Bruce B. Downs Boulevard, Tampa, Florida
- ------------------------------------------------------------------------------
AGE 11.5 years
- ------------------------------------------------------------------------------
NO. OF UNITS 256
- ------------------------------------------------------------------------------
OCCUPANCY 97.7%
- ------------------------------------------------------------------------------
UNIT TYPE UNIT SIZE RENT/MO. RENT/SF
- ------------------------------------------------------------------------------
1BR/1BA 650 SF $485 $.75
1BR/1BA 735 SF $520 $.71
2BR/1BA 862 SF $605 $.70
2BR/2BA 1,030 SF $675 $.66
2BR/2BA 1,142 SF $715 $.63
- ------------------------------------------------------------------------------
SPECIALS This project reports no rent specials.
- ------------------------------------------------------------------------------
RENT PREMIUMS $10/Mo. - Second Floor
$20/Mo. - Third Floor
- ------------------------------------------------------------------------------
COMMENTS This property is generally very comparable to the subject.
However, units within this development do contain screened
porches or patios. These units are separately metered for
sewer and water consumption and tenants are responsible for
these expenses.
- ------------------------------------------------------------------------------
</TABLE>
72
<PAGE>
TURTLE CREEK
[PHOTO APPEARS HERE]
<TABLE>
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------
LOCATION 1910 Skipper Road, Tampa, Florida
- ------------------------------------------------------------------------------
AGE 12.5 years
- ------------------------------------------------------------------------------
NO. OF UNITS 232
- ------------------------------------------------------------------------------
OCCUPANCY 97.8%
- ------------------------------------------------------------------------------
UNIT TYPE UNIT SIZE RENT/MO. RENT/SF
- ------------------------------------------------------------------------------
1BR/1BA 450 SF $425 $.94
1BR/1BA 677 SF $490 $.72
1BR/1BA 770 SF $535 $.69
2BR/2BA 900 SF $625 $.69
2BR/2BA 1,010 SF $700 $.69
- ------------------------------------------------------------------------------
SPECIALS This property is reporting a rent special consisting of $100
off the second months rent for those units rented in January
only.
- ------------------------------------------------------------------------------
RENT PREMIUMS $15/Mo. - Second Floor
- ------------------------------------------------------------------------------
COMMENTS This property is generally very comparable to the subject in
regard to quality and appearance. Units within this project
contain screened porches or patios and either a fireplace or
microwave.
- ------------------------------------------------------------------------------
</TABLE>
73
<PAGE>
BROADMOOR
[PHOTO APPEARS HERE]
<TABLE>
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------
LOCATION 8700 North 50th Street, Temple Terrace, Florida
- ------------------------------------------------------------------------------
AGE 11.5 years
- ------------------------------------------------------------------------------
NO. OF UNITS 384
- ------------------------------------------------------------------------------
OCCUPANCY 89.8%
- ------------------------------------------------------------------------------
UNIT TYPE UNIT SIZE RENT/MO. RENT/SF
- ------------------------------------------------------------------------------
1BR/1BA 490 SF $400 $.82
1BR/1BA 598 SF $445 $.74
1BR/1BA 675 SF $485 $.72
2BR/1BA 823 SF $555 $.67
2BR/2BA 860 SF $595 $.69
- ------------------------------------------------------------------------------
SPECIALS This property currently reports a rent special consisting of
$200 off the first months rent.
- ------------------------------------------------------------------------------
RENT PREMIUMS $10/Mo. - View
- ------------------------------------------------------------------------------
COMMENTS This property is highly comparable to the subject in regard
to quality, appearance and project and unit amenities. These
units are separately metered for sewer and water consumption
and tenants are responsible for these expenses.
- ------------------------------------------------------------------------------
</TABLE>
74
<PAGE>
FISHERMAN'S LANDING
[PHOTO APPEARS HERE]
<TABLE>
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------
LOCATION 8900 Fisherman's Point Drive, Temple Terrace, Florida
- ------------------------------------------------------------------------------
AGE 11 years
- ------------------------------------------------------------------------------
NO. OF UNITS 256
- ------------------------------------------------------------------------------
OCCUPANCY 95.7%
- ------------------------------------------------------------------------------
UNIT TYPE UNIT SIZE RENT/MO. RENT/SF
- ------------------------------------------------------------------------------
1BR/1BA 600 SF $525 $.88
1BR/1BA 700 SF $560 $.80
2BR/2BA 900 SF $635 $.71
2BR/2BA 1,000 SF $690 $.69
3BR/2BA 1,200 SF $880 $.73
- ------------------------------------------------------------------------------
SPECIALS This project is reporting no rent specials.
- ------------------------------------------------------------------------------
RENT PREMIUMS None
- ------------------------------------------------------------------------------
COMMENTS This project is generally highly comparable to the subject.
Units within this project contain screen porches and patios
and some units have fireplaces.
- ------------------------------------------------------------------------------
</TABLE>
75
<PAGE>
CYPRESS POINT
[PHOTO APPEARS HERE]
<TABLE>
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------
LOCATION 5119 E. Fletcher Avenue, Tampa, Florida
- ------------------------------------------------------------------------------
AGE 11 years
- ------------------------------------------------------------------------------
NO. OF UNITS 148
- ------------------------------------------------------------------------------
OCCUPANCY 97.3%
- ------------------------------------------------------------------------------
UNIT TYPE UNIT SIZE RENT/MO. RENT/SF
- ------------------------------------------------------------------------------
1BR/1BA 850 SF $535 $.63
2BR/2BA 1,100 SF $690 $.63
- ------------------------------------------------------------------------------
SPECIALS This project is reporting no rent specials.
- ------------------------------------------------------------------------------
RENT PREMIUMS $10/Mo. - View
$10/Mo. - Floor
$10/Mo. - Corner
$15/Mo. - 3rd floor/fan/microwave
- ------------------------------------------------------------------------------
COMMENTS This project is generally very comparable to the subject in
regard to quality, appearance and project and unit amenities.
- ------------------------------------------------------------------------------
</TABLE>
76
<PAGE>
ST. CROIX
[PHOTO APPEARS HERE]
<TABLE>
<S> <C> <C> <C> <C>
- -------------------------------------------------------------------------------
LOCATION 14535 Bruce B. Downs Boulevard, Tampa, Florida
- -------------------------------------------------------------------------------
AGE Phase I - 9 to 12 years
Phase II - 7 years
- -------------------------------------------------------------------------------
NO. OF UNITS Phase I - 260
Phase II - 280
Total - 540
- -------------------------------------------------------------------------------
OCCUPANCY 95.0%
- -------------------------------------------------------------------------------
UNIT TYPE UNIT SIZE RENT/MO. RENT/SF
- -------------------------------------------------------------------------------
1BR/1BA 564 SF $505 $.90
1BR/1BA 677 SF $560 $.83
1BR/1BA 754 SF $585 $.78
1BR/1BA w/den 856 SF $685 $.80
2BR/2BA 981 SF $730 $.74
2BR/2BA 1,111 SF $775 $.70
- -------------------------------------------------------------------------------
SPECIALS This project is reporting a rent special on the 677 SF 1BR/1BA
unit only of the first months rent free.
- -------------------------------------------------------------------------------
RENT PREMIUMS $20-$25/Mo. - 2nd Floor
$30-$35/Mo. - 3rd Floor
- -------------------------------------------------------------------------------
COMMENTS This is a higher quality, more up-scale development. Unit
amenities include screened porches or patios and either a
fireplace or microwave in each unit.
- ------------------------------------------------------------------------------
</TABLE>
77
<PAGE>
ASHTON PARK
[PHOTO APPEARS HERE]
<TABLE>
<S> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------
LOCATION 2020 Skipper Road, Tampa, Florida
- --------------------------------------------------------------------------------------------------------
AGE 10.5 years
- --------------------------------------------------------------------------------------------------------
NO. OF UNITS 192
- --------------------------------------------------------------------------------------------------------
OCCUPANCY 97.4%
- --------------------------------------------------------------------------------------------------------
UNIT TYPE UNIT SIZE RENT/MO. RENT/SF
- --------------------------------------------------------------------------------------------------------
1BR/1BA 528 SF $490 $.93
1BR/1BA 714 SF $555 $.78
1BR/1BA 751 SF $565 $.75
2BR/1BA 791 SF $640 $.81
2BR/2BA 909 SF $670 $.74
2BR/2BA 1,013 SF $700 $.69
- --------------------------------------------------------------------------------------------------------
SPECIALS This project is reporting no rent specials.
- --------------------------------------------------------------------------------------------------------
RENT PREMIUMS $15/Mo. - Second Floor
- --------------------------------------------------------------------------------------------------------
COMMENTS This is a higher quality, more up-scale development. However, the overall unit and
project amenities are generally comparable to the subject property.
- --------------------------------------------------------------------------------------------------------
</TABLE>
78
<PAGE>
MERIDIAN APARTMENTS
[PHOTO APPEARS HERE]
<TABLE>
<S> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------
LOCATION 8501 North 50th Street, Temple Terrace, Florida
- --------------------------------------------------------------------------------------------------------
AGE 11.5 years
- --------------------------------------------------------------------------------------------------------
NO. OF UNITS 280
- --------------------------------------------------------------------------------------------------------
OCCUPANCY 97.9%
- --------------------------------------------------------------------------------------------------------
UNIT TYPE UNIT SIZE RENT/MO. RENT/SF
1BR/1BA 460 SF $390 $.85
1BR/1BA 660 SF $445 $.67
1BR/1BA 720 SF $485 $.67
2BR/2BA 910 SF $560 $.62
2BR/2BA 1,010 SF $640 $.63
- --------------------------------------------------------------------------------------------------------
SPECIALS This project is reporting a rent special consisting of 1/2 off
of February rent on the two smallest 1BR/1BA units only.
- --------------------------------------------------------------------------------------------------------
RENT PREMIUMS $10/Mo. - Upstairs
- --------------------------------------------------------------------------------------------------------
COMMENTS This is a somewhat more up-scale development. Individual units
have screened porches or patios and each unit contains a
fireplace or a microwave.
- --------------------------------------------------------------------------------------------------------
</TABLE>
79
<PAGE>
EXCELLENCE
[PHOTO APPEARS HERE]
- --------------------------------------------------------------------------------
LOCATION 13221 N. 50th Street
- --------------------------------------------------------------------------------
AGE 3.5 years
- --------------------------------------------------------------------------------
NO. OF UNITS 78
- --------------------------------------------------------------------------------
OCCUPANCY 100.0%
- --------------------------------------------------------------------------------
UNIT TYPE UNIT SIZE RENT/MO. RENT/SF
- --------------------------------------------------------------------------------
1BR/1BA 600 SF $475 $.79
2BR/2BA 920 SF $660 $.72
3BR/2BA TH 1,200 SF $840 $.70
- --------------------------------------------------------------------------------
SPECIALS This project is reporting no rent specials.
- --------------------------------------------------------------------------------
RENT PREMIUMS None
- --------------------------------------------------------------------------------
COMMENTS This project is generally very comparable to the subject in
regard to quality, appearance and project and unit
amenities.
- --------------------------------------------------------------------------------
80
<PAGE>
COLONIAL VILLAGE AT RIVER HILLS, PHASE II
[PHOTO APPEARS HERE]
- --------------------------------------------------------------------------------
LOCATION Temple Terrace Highway, Temple Terrace, Hillsborough
County, Florida
- --------------------------------------------------------------------------------
AGE 6.5 years
- --------------------------------------------------------------------------------
NO. OF UNITS 252
- --------------------------------------------------------------------------------
OCCUPANCY 92.9%
- --------------------------------------------------------------------------------
UNIT TYPE UNIT SIZE RENT/MO. RENT/SF
- --------------------------------------------------------------------------------
1BR/1BA 630 SF $459 $.73
1BR/1BA 705 SF $529 $.75
2BR/2BA 950 SF $659 $.69
2BR/2BA 960 SF $649 $.68
- --------------------------------------------------------------------------------
SPECIALS This project is reporting rent specials consisting of one
month free rent on 2BR/2BA units only.
- --------------------------------------------------------------------------------
RENT PREMIUMS $10/month - View
$10/month - Floor
- --------------------------------------------------------------------------------
COMMENTS This is a newer project which is generally very comparable
to the subject. Units within this development contain
screened porches or patios.
- --------------------------------------------------------------------------------
RENTAL SUMMARY
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Comparable Comparable Comparable Comparable Comparable Comparable Comparable Comparable Colonial
Rental #1 Rental #2 Rental #3 Rental #4 Rental #5 Rental #6 Rental #7 Rental #8 Village at
Unit Type River Hills -
Fisherman's Phase I
Oak Ramble Cypress Run I Windridge Hidden Palms Turtle Creek Broadmoor Landing Cypress Point (Subject)
1BR/1BA 820 SF 579 SF 540 SF 650 SF 677 SF 490 SF 600 SF 850 SF 734 SF
$525/Mo. $450- $450/Mo. $485/Mo. $490/Mo. $400/Mo. $525/Mo. $535/Mo. $474/Mo.
$.64/SF $500/Mo. $.83/SF $.75.SF $.72/SF $.82/SF $.88/SF $.63/SF $.65/SF
$.78-$.86/SF
820 SF 617 SF 735 SF 770 SF 598 SF 700 SF
$625/Mo. 650 SF $465/Mo. $520/Mo. $535/Mo. $445/Mo. $560/Mo.
$.76/SF $480- $.75/SF $.71/SF $.69/SF $.74/SF $.80/SF
$530/Mo.
$.74-$.82/SF 671 SF 675 SF
$495/Mo. $485/Mo.
781 Sf $.74/SF $.72/SF
$530-
$580/Mo.
$.68-$.74/SF
2BR/1BA N/A 822 SF N/A 862 SF N/A 823 SF N/A N/A N/A
$580- $605/Mo. $555/Mo.
$630/Mo. $.70/SF $.67/SF
$.71-$.77/SF
2BR/2BA 1,054 SF 988 SF 920 SF 1,030 SF 900 SF 860 SF 900 SF 1,100 SF 977 SF
$650/Mo. $630- $575/Mo. $675/Mo. $625/Mo. $595/Mo. $635/Mo. $690/Mo. $594/Mo.
$.62/SF $680/Mo. $.63/SF $.66/SF $.69/SF $.69/SF $.71/SF $.63/SF $.61/SF
$.64-$.69/SF
1,054 SF 1,142 SF 1,010 SF 1,000 SF
$675/Mo. $715/Mo. $700/Mo. $690/Mo.
$.64/SF $.63/SF $.69/SF $.69/SF
3BR/2BA N/A 1,070 SF N/A N/A N/A N/A 1,200 SF N/A N/A
$745- $880/Mo.
$800/Mo. $.73/SF
$.70-$.75/SF
</TABLE>
81
<PAGE>
VALUATION: (CONT'D.)
- --------------------------------------------------------------------------------
Current rental rates at the subject project reflect base rental rates of $474
per month for a one-bedroom/one-bath unit and $594 per month for a two-
bedroom/two bath unit. These rates reflect $.65/SF for the one-bedroom units and
$.61/SF for the two-bedroom units.
A chart summarizing the current quoted rents on a per month and a per square
foot basis for those projects and units considered most directly comparable to
the subject has been presented on the facing page of this report. Those rental
apartment communities considered to provide the best indications of the subject
property's economic rents include Oak Ramble, Cypress Run Phase I, Windridge,
Hidden Palms, Turtle Creek, Broadmoor, Fisherman's Landing and Cypress Point.
The eight comparable rental apartment communities considered to provide the best
available indications of economic rent provide a relatively tight range of
economic rent indicators for the subject, on both a rent per month and rent per
square foot basis.
Within these comparable properties, quoted rents for those units most closely
approximating the size of the subject units have ranged from $480 to $560 per
month and $.68/SF to $.80/SF for one-bedroom units and have ranged from $575 to
$690 per month and from $.63/SF to $.69/SF for two-bedroom units. The average
rent for the one-bedroom units given primary consideration herein equaled $515
per month and $.73/SF. The average rent for the two-bedroom units given primary
consideration herein equaled $660 per month and $.66/SF.
Based upon the preceding data, it appears that the subject property's current
base rents are adequately supported by the market. In addition, it should be
noted that the subject rents are $5 per month below the subject's reported rents
of approximately one year ago. The subject's current base rents are at the
lower end of the range of rents for those units given primary consideration in
this economic rent analysis, both on a per month and per square rents basis.
However, given the location, quality, appearance, condition and overall amenity
levels associated with the subject, the subject's current base rents are
considered reflective of economic rent for the property.
Therefore, the estimated base economic rent for the subject property has been
estimated as follows:
<TABLE>
<CAPTION>
------------------------------------------------------------------------
# OF UNITS UNIT TYPE UNIT SIZE ESTIMATED RENT RENT/SF
------------------------------------------------------------------------
<S> <C> <C> <C> <C>
128 1BR/1BA 734 SF $474 $.65
------------------------------------------------------------------------
120 2BR/2BA 977 SF $594 $.61
------------------------------------------------------------------------
</TABLE>
The above economic rent estimates produce a potential gross base rental income
for the subject property of $1,583,424.
83
<PAGE>
VALUATION: (CONT'D.)
- --------------------------------------------------------------------------------
The above economic rent estimates for the subject property relate to the base
units within the subject property. At the present time rent premiums are being
charged at the subject property for units with superior features over the base
units. The current rent premiums and the number of units achieving these rent
premiums have been summarized below.
<TABLE>
<CAPTION>
----------------------------------------------------------
FEATURE RENT PREMIUMS NO. OF UNITS
$/MONTH WITH FEATURE
----------------------------------------------------------
<S> <C> <C>
View Amenity $20/Mo. 96
----------------------------------------------------------
Second Floor Unit $10/Mo. 124
----------------------------------------------------------
Deluxe Unit $25/Mo. 26
----------------------------------------------------------
Washer/Dryer $20/Mo. 15
----------------------------------------------------------
</TABLE>
Based upon a review and analysis of the rent premiums currently being charged at
the subjects most direct competitors, it appears that the subjects current rent
premiums are adequately supported in the market. Therefore, the potential gross
income from rent premium income has been estimated at $49,320.
After estimating the economic rent applicable to the subject property,
consideration has not yet been given to the ancillary income earning potential
associated with the development. Ancillary income at similar projects tend to
range from approximately $10 to $15 per unit per month. In 1993 the subject
property reflected ancillary income of $56,249 or $18.90 per unit per month, in
1994 the subject property reflected ancillary income of $53,642 or $18.02 per
unit per month, in 1995 the subject property reflected ancillary income of
$57,019 or $19.16 per unit per month, and in 1996 the subject property reflected
ancillary income of $55,299 or $18.58 per unit per month. In 1997 the subject
property reflected ancillary income of $88,268 or $29.66 per unit per month.
This project's total other income has included a number of revenue sources which
relate to such items as court-reimbursed income from evictions, interest income
and termination fees. Recognizing this, an ancillary income based on $20.00 per
unit per month has been estimated in order to recognize the stabilized
operations associated with the subject property. Based upon this estimate the
total ancillary income from the subject operations would equal approximately
$59,520.
Thus, the potential gross income for the subject property including both base
rent, rent premiums and ancillary income would equal $1,692,264.
84
<PAGE>
VALUATION: (CONT'D.)
- --------------------------------------------------------------------------------
In previous years, rent incentives and move-in specials were the norm within the
market and were required marketing tools due to the low occupancy levels being
achieved within the market during this time frame. During the period between
1992 and 1994, overall occupancy levels within the market generally strengthened
as the excess apartment inventory associated with previous over-building was
absorbed. This overall strengthening within the market resulted in many
properties quoting base rent levels with no move-in specials. However,
substantial levels of new multifamily apartment development have occurred within
the market over the last 36 months and overall occupancy levels within the
market have fluctuated in response to the increased availability of rental
apartment units.
The subject Colonial Village At River Hills Phase I development was impacted by
the opening and rent-up of the adjoining Phase II development in 1991-1992,
however, both of these developments achieved stabilization by 1994. The
Colonial Village At River Hills Phase III development began rental operations
in August 1996 and it appears that the availability of these new units and the
rent-up of the Phase III project has negatively impacted the operations of
Phases I and II. The subject property reports a current occupancy level of
89.5%, which is substantially below the average occupancy level of 94.7%
reflected by the Appraiser's survey of competing apartment communities within
the subject market area.
The subject property is currently offering a rent special of one month free rent
on 2BR/2BA units only. Our survey of thirteen of the subject's most direct
competitors revealed that eight of these properties reported no rent specials
and five of the properties reported rent specials ranging from $100 off the
second months rent to one month of free rent on selected units. During 1993 the
subject property reflected rent losses due to concessions of $56,591, during
1994 reflected rent losses due to concessions of $19,405, during 1995 reflected
rent losses due to concessions of $23,487, and during 1996 reflected rent losses
due to concessions of $24,695. During 1997 the subject property reflected rent
losses due to concessions of $96,672. As previously discussed, the continuing
rent up of Colonial Village At River Hills Phase III has negatively impacted the
operations of the subject property and the high 1997 income losses due to rent
incentives are attributed primarily to this factor. Phase III is approaching
rent-up and the subject property should be able to maintain stabilized
operations with more moderate rent incentives upon the completion of the Phase
III rent-up.
It appears logical and reasonable to expect that rent incentives will be
necessary to achieve and maintain stabilized operations at the subject property.
Therefore, a $25,000 deduction for rent losses due to incentives has been
utilized within this analysis.
The summation of the estimated incomes and the deduction for rent incentives
results in producing total estimated gross potential income applicable to the
subject property of $1,667,264. The 1996 and 1997 income and expense statements
applicable to the subject property were also reviewed. According to the income
statements, the base scheduled rent associated with the subject property,
including ancillary income and discounts for rent concessions, and prior to
deductions for vacancy and credit losses, equaled $1,664,336 in 1996 and
$1,656,636 in 1997. The 1996 and 1997 rent appears to compare favorably with
the economic rent estimates as set out herein.
85
<PAGE>
VALUATION: (CONT'D.)
- --------------------------------------------------------------------------------
VACANCY AND COLLECTION LOSSES
- -----------------------------
The next step in the Income Approach, after estimating the rental and ancillary
income applicable to the subject project, pertains to estimating the vacancy and
collection losses applicable to the subject property. Within the Highest and
Best Use section to this appraisal a total of 3,794 units were surveyed within
the subject's competitive market area. These units represented relatively new
apartments which directly compete with the subject. The survey reflected an
overall occupancy rate of 94.7%. Projects surveyed had occupancies ranging from
a low of 89.5% (subject) to a high of 100.0%. During 1992, the subject property
achieved an overall annual average occupancy of 88.3%, during 1993 the subject
property achieved an average annual occupancy level of 92.5%, during 1994 the
subject property achieved an average annual occupancy level of 95.5%, during
1995 the subject property achieved an average annual occupancy level of 95.0%.
The subject's 1996 average occupancy level equaled 91.8% and the 1997 average
occupancy level equaled approximately 86.0%. At the date of inspection the
subject property was reporting an 89.5% occupancy level. The subject's
relatively low average occupancy level in 1992 can be directly correlated to the
opening and subsequent rent-up of Colonial Village At River Hills, Phase II. It
also appears that the opening of Phase III of the Colonial Village At River
Hills development in August 1996 has also negatively effected the current
occupancy levels of the subject. The negative effects of the Phase III opening
will most probably continue to effect the subject property until the new Phase
III units are absorbed.
Therefore, based upon this data, the estimated vacancy losses for the subject's
operations have been estimated at 7% of potential gross income. An additional
.5% deduction for collection losses has also been taken. The total vacancy and
collection loss estimate based on 7.5% results in an estimated vacancy and
collection losses for the subject property at $125,045.
Based upon these income and vacancy and collection loss estimates, the effective
gross income has been estimated at $1,542,219. This estimate has been compared
with the actual operations at the subject project during 1996 and 1997. The
income statements for the subject project indicate that the total revenue
achieved by the subject during 1996 equaled $1,488,342 and in 1997 equaled
$1,391,153.
ANALYSIS OF OPERATING EXPENSES:
- ------------------------------
Three potential methods of calculating operating costs have been considered when
estimating the operating expenses for the subject rental apartment project.
These methods include a review of actual historical operating data or budgets,
the preparation of departmental operating cost estimates based upon interviews
with suppliers of services, and a review of operating costs at similar rental
apartment communities.
During past years, it has become apparent in the multifamily industry that it is
not necessarily in the best interests of some apartment developers and operators
to minimize operating expenses. Some operators have viewed operating expenses
as a profit center. Examples of excessive operating costs are noted in attempts
by some to maximize the blue sky limits, charge market supported management fees
plus non-market supported add-ons, participate in advertisement pooling,
maintenance pooling and the lack of utilization related to discounts for on-time
or early payments.
86
<PAGE>
VALUATION: (CONT'D)
- --------------------------------------------------------------------------------
In preparing this appraisal, financial data relating to the past operations of
the subject property was provided for review.
Recognizing the preceding factors, each of the available methods in estimating
the operating expenses for the subject property have been considered.
ACTUAL OR BUDGETARY EXPENSES:
- ----------------------------
The subject's 1992 income and expense statement reported expenses of $696,576 or
$2,809 per unit and $3.30 per square foot, the subject's 1993 income and expense
statement reported expenses of $680,824 or $2,745 per unit and $3.22 per square
foot, and the subject's 1994 income and expense statement reported expenses of
$804,348 or $3,243 per unit and $3.81 per square foot and the subject's 1995
income and expense statement reported expenses of $773,082 or $3,117 per unit
and $3.66 per square foot. The subject's 1996 and 1997 actual operating
expenses have been summarized by expense category as follows:
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------
EXPENSE ITEM 1996 EXPENSES (ACTUAL) 1997 EXPENSES (ACTUAL)
---------------------------------------------------------------------------------------------
<S> <C> <C>
Administrative $ 21,360 $ 29,016
---------------------------------------------------------------------------------------------
Salaries and Payroll $119,576 $ 96,737
---------------------------------------------------------------------------------------------
Management $ 73,001 $ 68,427
---------------------------------------------------------------------------------------------
Utilities $116,287 $120,869
---------------------------------------------------------------------------------------------
Advertising and Promotion $ 18,857 $ 5,651
---------------------------------------------------------------------------------------------
Maintenance $263,503 $214,562
---------------------------------------------------------------------------------------------
Property Tax $154,076 $152,010
---------------------------------------------------------------------------------------------
Insurance $ 19,819 $ 29,489
---------------------------------------------------------------------------------------------
TOTAL OPERATING EXPENSES $786,479 $716,761
---------------------------------------------------------------------------------------------
Expenses Per Unit $3,171/Unit $2,890/Unit
---------------------------------------------------------------------------------------------
Expenses Per SF of Living Area $3.72/SF $3.39/SF
---------------------------------------------------------------------------------------------
</TABLE>
DEPARTMENTAL ESTIMATES:
- ----------------------
A second method of estimating operating expenses involves breaking down the
operating costs into various departments, such as management, taxes, insurance,
maintenance, utilities, etc. This method involves calling suppliers related to
the major services for the subject property in order to present an estimate as
to potential operating expenses. In the case of the subject property, a current
tax estimate (as described within the Assessment and Taxes section to this
report) was obtained. The suppliers of sewer, water and garbage have been
contacted and the subject building features were reviewed in order to determine
the levels of anticipated future maintenance. Based upon these activities,
operating expenses under current market conditions for the subject property
should approximate $746,087 annually or $3,008 per unit and $3.53 per square
foot.
87
<PAGE>
VALUATION: (CONT'D)
- --------------------------------------------------------------------------------
The estimated departmental expenses for the subject property have been
summarized as follows:
<TABLE>
<CAPTION>
-----------------------------------------------------------------------
EXPENSE ITEM ESTIMATED ANNUAL EXPENSE
-----------------------------------------------------------------------
<S> <C>
Payroll $100,000
-----------------------------------------------------------------------
Payroll Taxes $ 15,000
-----------------------------------------------------------------------
Office Operation $ 25,000
-----------------------------------------------------------------------
Management @ 4% of EGI $ 61,689
-----------------------------------------------------------------------
Utilities $125,000
-----------------------------------------------------------------------
Real Estate and Personal Property Taxes $151,898
-----------------------------------------------------------------------
Insurance $ 30,000
-----------------------------------------------------------------------
Building Maintenance $150,000
-----------------------------------------------------------------------
Yard Maintenance $ 55,000
-----------------------------------------------------------------------
Advertising $ 20,000
-----------------------------------------------------------------------
Pest Control $ 7,500
-----------------------------------------------------------------------
Miscellaneous $ 5,000
-----------------------------------------------------------------------
TOTAL ESTIMATED OPERATING EXPENSES $746,087
-----------------------------------------------------------------------
Expenses Per Unit $3,008/Unit
-----------------------------------------------------------------------
Expenses Per SF of Living Area $3.53/SF
-----------------------------------------------------------------------
</TABLE>
EXPENSE COMPARABLE ANALYSIS:
- ----------------------------
The third method of estimating operating expenses for the subject property is
the review of comparable properties in order to obtain operating expense data.
Operating expense data relating to 7 comparable sales of similar apartment
complexes that occurred between 1994 and 1996 have been obtained for review. A
summary of expenses for those sales that could be analyzed has been set out as
follows:
88
<PAGE>
VALUATION: (CONT'D)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
------------------------------------------------------------
SALE # APARTMENT COMPLEX EXPENSES UNIT PER YEAR
------------------------------------------------------------
<C> <S> <C>
1 Bay Oaks $4.94/SF or $3,000/Unit
------------------------------------------------------------
2 Palencia $4.17/SF or $3,230/Unit
------------------------------------------------------------
3 St. Croix $4.14/SF or $3,100/Unit
------------------------------------------------------------
4 Chesapeake $4.38/SF or $2,957/Unit
------------------------------------------------------------
5 Essex Place $4.39/SF or $3,665/Unit
------------------------------------------------------------
6 Hidden Palms $3.62/SF or $2,775/Unit
------------------------------------------------------------
7 Lakewood Place $3.24/SF or $2,548/Unit
------------------------------------------------------------
</TABLE>
A published source of expense data for rental apartment communities was also
reviewed. This source pertains to the 1996 edition of Conventional Apartments'
Income/Expense analysis published annually by the Institute of Real Estate
Management. Within the Tampa/St. Petersburg Metropolitan Area, 53 projects
encompassing 10,228 apartments and 8,272,960 square feet responded to the
management survey. The survey indicates that the median operating expenses for
these projects reflected $3.80 per square foot and $2,929 per unit.
Several methods have been utilized to estimate operating expenses for the
subject property. The three methods that were utilized have produced the
expense data below.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
EXPENSES PER EXPENSES PER
APARTMENT UNIT SF OF LIVING AREA
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
EXPENSES BASED ON A REVIEW OF THE SUBJECT'S 1996 $2,890/UNIT - $3,171/UNIT $3.39/SF - $3.72/SF
AND 1997 OPERATING STATEMENTS.
- -----------------------------------------------------------------------------------------------------------------
ESTIMATED EXPENSES BASED UPON APPRAISER'S REVIEW $3,008/UNIT $3.53/SF
AND RECONSTRUCTION OF EXPENSE DATA.
- -----------------------------------------------------------------------------------------------------------------
RANGE OF EXPENSES INDICATED FOR THE SUBJECT $2,548/UNIT - $3,665/UNIT $3.24/SF - $4.94/SF
PROPERTY BASED UPON A REVIEW OF EXPENSES
EXPERIENCED WITHIN SIMILAR APARTMENT COMPLEXES.
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
When estimating the operating expenses necessary to operate and manage the
subject property, the primary weight and consideration has been given to the
first two methods of expense analysis set out herein. Since these methods of
expense analysis reflect the subject's actual operations, as well as the
Appraiser's review and analysis of those expenses directly applicable to the
operations of the subject property, these sources of estimating expenses are
considered most applicable to this analysis. The third method of expense
analysis set out herein reflects expenses at generally similar properties which
may or may not be directly comparable to the subject.
89
<PAGE>
VALUATION: (CONT'D.)
- --------------------------------------------------------------------------------
The subject's 1996 and 1997 operating statements have reflected expense levels
of $2,890 to $3,171 per apartment unit and $3.39 to $3.72 per square foot of
heated living area. The reconstruction of operating expenses for the subject has
reflected estimated operating expenses of $3,008 per apartment unit and $3.53
per square foot of heated living area.
Based upon this data, the operating expenses for the subject property have been
estimated at $3.55/SF of heated living area. The total estimated operating
expenses for the subject property have been calculated as follows:
211,192 SF @ $3.55/SF = $749,732
Rounded To: $750,000
These total estimated expenses for the subject property equate to $3,024 per
apartment unit, and appears adequately supported by the expense data described
and presented herein.
The total operating expenses estimated for the subject property are to be
subtracted from the subject's estimated effective gross income. The subtraction
of total expenses from the estimated effective gross income will produce the
estimated net income for the subject property. The estimated net income is then
capitalized into a value estimate by dividing an appropriate overall
capitalization rate into the estimated net income for the property.
Overall Capitalization Rate
- ---------------------------
The selection of an appropriate overall capitalization rate for the subject
property is one of the most important elements to be analyzed within the Income
Approach to value. When estimating the appropriate overall capitalization rate
for the subject property's income stream, one of the best sources of market data
relating to overall capitalization rates would involve the direct extraction of
the appropriate capitalization rate from recent sales of comparable rental
apartment properties.
The Market Approach to value, as set out herein, includes multifamily rental
apartment projects located within the subject market area. All seven
comparables represent the acquisition of large, well designed apartment
communities, most of which are prime investment grade in quality. Capitalization
rates reflected by the seven comparables ranged from 8.9% to 10.7%. This is
considered to be a reasonably tight range in overall capitalization rates. The
overall capitalization rates reflected by the comparable sales data extracted
from the Tampa market has been summarized on the following page:
90
<PAGE>
VALUATION: (CONT'D)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
---------------------------------------------------------------------------
SALE DATE OF SALE OVERALL CAPITALIZATION RATE
---------------------------------------------------------------------------
<S> <C> <C>
1) Bay Oaks April 1997 10.7%
---------------------------------------------------------------------------
2) Palencia March 1997 9.1%
---------------------------------------------------------------------------
3) St. Croix December 1996 9.5%
---------------------------------------------------------------------------
4) Chesapeake December 1996 9.1%
---------------------------------------------------------------------------
5) Essex Place May 1996 9.6%
---------------------------------------------------------------------------
6) Hidden Palms May 1995 8.9%
---------------------------------------------------------------------------
7) Lakewood Place March 1994 9.2%
---------------------------------------------------------------------------
</TABLE>
In addition to this market-derived data, we have also given consideration to
published capitalization rate data available from the July 1997 Korpacz Real
Estate Investor Survey and the American Council of Life Insurance Investment
Bulletin. The American Council of Life Insurance Investment Bulletin is a
quarterly publication which provides detailed data on mortgage commitments on
commercial properties throughout the United States. The September 3, 1996
Investment Bulletin reported an overall average capitalization rate of 8.9% from
95 transactions involving apartment developments throughout the United States.
The July 1997 Korpacz Real Estate Investor Survey reported average overall
capitalization rates for apartment transactions at 8.93% in the second quarter
of 1997 and 8.9% in the third quarter of 1997.
The final method of estimating an overall capitalization rate for utilization
within the Income Approach to value is the Band of Investment method. The loan
terms utilized in building the capitalization rate are based upon stabilized
market conditions. The mortgage rate has been estimated to reflect conditions
which include a 25-year amortization, a 75% loan to value ratio, a 10 to 15 year
balloon and an interest rate of 7.6%. Due to the current financial market
conditions, numerous mortgage variations and alternatives are available. The
terms, as set out herein, appear to be the most appropriate and reflect
basically a stabilized interest rate level.
The equity dividend rate (cash on cash or cash throw-off to the equity position)
has been estimated at 10% for the subject property due to the small size of this
complex. This equity dividend rate applies to the stabilized income stream. The
equity dividend rate recognizes not only the benefits of cash flow, but in the
case of the subject, gives weight to the appreciation aspects of the property,
tax advantages, potential for increasing cash flows over time, the asset
leverage potential and the strong demand for quality multifamily projects in the
investment markets.
The overall capitalization rate for the subject property contemplates a loan to
value ratio of 75% at a 7.6% annual interest rate amortized over 25 years and
has been calculated as follows:
91
<PAGE>
VALUATION: (CONT.D)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
- --------------------------------------------------------------------------------
Mortgage Requirement .75 x .08946 .0671
- --------------------------------------------------------------------------------
Equity Requirement .25 x .1000 .0250
- --------------------------------------------------------------------------------
Overall Capitalization Rate .0921
- --------------------------------------------------------------------------------
</TABLE>
Based upon this data, and with primary weight being placed upon the
capitalization data directly extracted from the sales data, the appropriate
overall capitalization rate for the subject property has been estimated at
9.25%. This rate is bracketed by the indicated capitalization rates reflected
by the data reviewed herein; and, recognizing the location and quality of the
subject, as well as its operating performance, this overall capitalization rate
appears adequately supported within the market.
The estimated net operating income for the subject property is to be divided by
the overall capitalization rate of 9.25% which will then produce a market value
indication for the subject property via the Income Approach to value.
The subject property is affected by curable physical deterioration (deferred
maintenance). The estimated cost to cure these items was previously stated at
$315,000. In order to produce a final "as-is" value indication for the subject
property via the Income Approach, it was necessary to subtract the cost to cure
from the value indication produced from the Income Approach.
The indicated final value of the subject property, as produced by the
application of the Income Approach to value, has been summarized as follows:
<TABLE>
<S> <C>
---------------------------------------------------------------------------
Total indicated value of the subject property, as if curable
deficiencies were corrected $8,565,000
---------------------------------------------------------------------------
Less: estimated amount to correct curable physical deficiencies $ (315,000)
---------------------------------------------------------------------------
Indicated final value $8,250,000
---------------------------------------------------------------------------
</TABLE>
92
<PAGE>
VALUATION: (CONT'D.)
- --------------------------------------------------------------------------------
---------------------------------------------------------------------------
INCOME APPROACH SUMMARY
---------------------------------------------------------------------------
Potential Gross Rental Income:
128 1BR/1BA x $474/mo. x 12 = $728,064
120 2BR/2BA x $594/mo. x 12 = $855,360
<TABLE>
<S> <C>
$1,583,424
Plus: Total Potential Rent Premium Income $ 49,320
LESS: Rent Concessions $ (25,000)
PLUS: Ancillary Income (248 units @ $20.00/mo.) $ 59,520
----------
Potential Gross Income $1,667,264
LESS: Vacancy and Collection Losses @ 7.5% $ (125,045)
----------
Effective Gross Income $1,542,219
LESS: Operating Expenses $ (750,000)
----------
Net Operating Income $ 792,219
Divided by: Overall Rate .0925
----------
Indicated Market Value Via The Income Approach $8,564,530
Rounded To $8,565,000
Less: Cost To Cure Deferred Maintenance $ 315,000
----------
Indicated Final Market Value Via The Income Approach $8,250,000
------------------------------------------------------------------------
</TABLE>
93
<PAGE>
VALUATION: (CONT'D.)
- --------------------------------------------------------------------------------
MARKET APPROACH
- ---------------
Comparable sales of similar improved multifamily rental apartment projects have
been researched as the basis for estimating the market value of the subject
project via the Market Approach. The Market Approach or Direct Sales Comparison
Approach is defined as:
"That approach in appraisal analysis which is based on the proposition that
an informed purchaser would pay no more for a property than the cost of
acquiring an existing property with the same utility. This approach is
applicable when an active market provides sufficient quantities of reliable
data which can be verified from authoritative sources. The direct sales
comparison approach is relatively unreliable in an inactive market or in
estimating the value of the properties for which no real comparable sales
data are available. It is also questionable when sales data cannot be
verified with principals to the transaction. This approach to value is
referred to as the Direct Sales Comparison Approach, the Market Comparison
or Market Data Approach."
In developing a market value estimate for the subject project via the Market
Approach, the Tampa/St. Petersburg Metropolitan Area has been researched for
comparable sales relating to similar multifamily rental apartment projects.
Several comparable sales were located which appear to provide a reasonable
indication of value for the subject facility. All of the sales are newer
multifamily rental apartment developments which were constructed during the
1980's and 1990's.
In estimating the market value of the subject property, primary weight and
emphasis has been placed upon the following comparable sales data.
94
<PAGE>
VALUATION: (CONT'D.)
- --------------------------------------------------------------------------------
[PHOTO APPEARS HERE]
COMPARABLE SALE NO. 1
BAY OAKS
Address: 3105 Bay Oaks Court, Tampa, Florida
Section/
Township/Range: 27-29-15 (Hillsborough County)
Date of Sale: April 1997
Recorded: Official Records Book 8540, Page 1590
Sales Price: $5,960,000
Financing: Cash to seller.
Grantor: FRM Properties
Grantee: Bay Oaks, L.P.
95
<PAGE>
VALUATION: (CONT'D.)
- --------------------------------------------------------------------------------
IMPROVED COMPARABLE SALE NO. 1 (CONTD.)
---------------------------------------
Improvement Data: The complex consists of two-story buildings of frame
construction with wood siding/stucco exterior finishes
and gable/hip composition shingle roofs. There are 176
units with an average unit size of 607 square feet
comprising a total rentable area of 106,896 square
feet. Features and amenities include: One swimming
pool, fitness center and laundry facilities.
Year Built: 1974
No. of Units: 176
Average Unit Size: 607 SF
<TABLE>
<CAPTION>
Unit Mix: No. BR/BA S.F.
--- ----- ----
<S> <C> <C> <C>
36 1/1 400
104 1/1 600
36 2/2 836
Financial Information: Gross Income $1,256,322
Vacancy $ 87,943
EGI $1,168,379
Expenses $ 528,000
NOI $ 640,379
Units of Comparison: Price/SF $55.76
Price/Room $ 10,567
Price/Unit $ 33,864
GRM 4.7
EGIM 5.10
OAR 10.7%
</TABLE>
Comments: Bay Oaks is located along Bayshore Boulevard just south of Bay to Bay
Boulevard in south Tampa. The financial data is based on actual gross
income with a 7% vacancy/collections loss allowance, and expenses
estimated at $3,000 per unit.
96
<PAGE>
VALUATION: (CONT'D.)
- --------------------------------------------------------------------------------
[PHOTO APPEARS HERE]
COMPARABLE SALE NO. 2
PALENCIA
Address: 8450 Palencia Drive, Tampa, Florida
Section/
Township/Range: 34-27-18(Hillsborough County)
Date of Sale: March 1997
Recorded: Official Records Book 8491, Page 274
Sales Price: $14,925,000
Financing: Cash to seller.
Grantor: FPI Palencia, Ltd.
Grantee: Ambassador X, L.P.
97
<PAGE>
VALUATION: (CONT'D.)
- --------------------------------------------------------------------------------
IMPROVED COMPARABLE SALE NO. 2 (CONTD.)
---------------------------------------
Improvement Data: The complex consists of two and three story buildings
of frame construction with wood siding/stucco exterior
finishes and gable/hip composition shingle roofs. There
are 420 units with an average unit size of 774 square
feet comprising a total rentable area of 325,156 square
feet. Features and amenities include: Two swimming
pools, a Jacuzzi, two clubhouses, two lighted tennis
courts, two air conditioned racquetball courts, fitness
center, car wash, and on-site laundries.
Year Built: 1985
No. of Units: 420
Average Unit Size: 774 SF
<TABLE>
<CAPTION>
Unit Mix: No. BR/BA S..F
--- ----- ----
<S> <C> <C> <C>
120 1/1 590
108 1/1 735
32 2/1 850
32 2/2 850
128 2/2 942
</TABLE>
<TABLE>
<S> <C> <C>
Financial Information: Gross Income N/A
Vacancy N/A
EGI $2,715,127
Expenses $1,356,327
NOI $1,358,800
Units of Comparison: Price/SF $ 45.90
Price/Room $ 10,279
Price/Unit $ 35,536
GRM N/A
EGIM 5.50
OAR 9.1%
</TABLE>
Comments: Palencia is located at the northeast quadrant of North Dale Mary
Highway and Bearss Avenue, in the Carrollwood area of Northwest
Tampa. The property features an attractively landscaped low density
site with 12 large retention lakes. The financial information
represents current income and expenses.
98
<PAGE>
VALUATION: (CONT'D.)
- --------------------------------------------------------------------------------
[PHOTO APPEARS HERE]
COMPARABLE SALE NO. 3
ST. CROIX
Address: 14535 Bruce B. Downs Boulevard, Tampa, Florida
Section/
Township/Range: 4/28/19 (Hillsborough County)
Date of Sale: December 1996
Recorded: Official Records Book 8399, Page 1366
Sales Price: $22,600,000
Financing: Cash to seller.
Grantor: High VIII Ltd. Partnership
Grantee: John H. Streicher, Trustee
99
<PAGE>
VALUATION: (CONT'D.)
- --------------------------------------------------------------------------------
IMPROVED COMPARABLE SALE NO. 3 (CONTD.)
---------------------------------------
Improvement Data: The complex consists of two and three story buildings
of frame construction with wood siding and gable/hip
concrete tile roofs. There are 540 units with an
average unit size of 748 square feet comprising a total
rentable area of 403,877 square feet. Features and
amenities include: Two swimming pools, two spas,
cabana/exercise room, clubhouse, three lighted tennis
courts, volleyball court, laundry facilities and
security entrance.
Year Built: 1988/1990
No. of Units: 540
Average Unit Size: 748 SF
<TABLE>
<CAPTION>
Unit Mix: No. BR/BA S..F
--- ----- ----
<S> <C> <C> <C>
120 1/1 564
108 1/1 658
60 1/1 677
30 1/1 754
66 1/1 747
25 2/1 851
15 2/1 856
80 2/2 981
36 2/2 1111
</TABLE>
<TABLE>
<S> <C> <C>
Financial Information: Gross Income N/A
Vacancy N/A
EGI $3,822,120
Expenses $1,674,000
NOI $2,148,120
Units of Comparison: Price/SF $ 55.96
Price/Room $ 12,725
Price/Unit $ 41,852
GRM N/A
EGIM 5.91
OAR 9.5%
</TABLE>
Comments: St. Croix is located on the south side of Bruce B. Downs Boulevard,
west of Skipper Road. The improvements were developed in two phases;
Phase I contains 260 units in 12 buildings and was completed in 1988
and Phase II contains 280 units in 13 buildings completed in 1990.The
improvements are of good quality, have been well maintained with
periodic upgrades and were considered to be in good condition at the
time of sale. The financial information represents current income and
expenses.
100
<PAGE>
VALUATION: (CONT'D.)
- --------------------------------------------------------------------------------
[PHOTO APPEARS HERE]
COMPARABLE SALE NO. 4
CHESAPEAKE
Address: 4711 South Himes Avenue, Tampa, Florida
Section/
Township/Range: 4/30/18(Hillsborough County)
Date of Sale: December 1996
Recorded: Official Records Book 8402, Page 500
Sales Price: $10,700,000
Financing: Cash to seller.
Grantor: Chesapeake Associates Limited Partnership
Grantee: Security Capital Atlantic Incorporated
101
<PAGE>
VALUATION: (CONT'D.)
- --------------------------------------------------------------------------------
IMPROVED COMPARABLE SALE NO. 4 (CONTD.)
---------------------------------------
Improvement Data: The complex consists of two-story buildings of frame
construction with wood siding and gable/hip composition
shingle roofs. There are 328 units with an average unit
size of 675 square feet comprising a total rentable
area of 221,304 square feet. Features and amenities
include: One swimming pool, fitness center, Jacuzzi and
laundry facilities.
Year Built: 1985
No. of Units: 328
Average Unit Size: 675 SF
Unit Mix: No. BR/BA S.F.
--- ----- ----
<TABLE>
<CAPTION>
<S> <C> <C> <C>
80 1/1 474
80 1/1 564
64 1/1 696
64 2/2 860
30 2/2 928
10 2/2 1,084
</TABLE>
<TABLE>
Financial Information: Gross Income $2,045,236
<S> <C> <C>
Vacancy $ 102,262
EGI $1,942,974
Expenses $ 970,000
NOI $ 972,974
Units of
Comparison: Price/SF $48.35
Price/Room $ 14,903
Price/Unit $ 32,622
GRM 5.2
EGIM 5.51
OAR 9.1%
</TABLE>
Comments: The complex is located on the west side of South Himes Avenue, north
of Gandy Boulevard in south Tampa. According to Mr. Baad,
approximately $750,000 will be expended in capital improvements over
the coming year. Capital improvements will include new office and
clubhouse finish, exterior painting of the buildings, upgraded
landscaping, and installation of submeters for sewer and water usage.
Approximately 30% of the units have washer and dryer connections
which obtain a $15 premium per month. Based upon the capital
improvement program planned, most of the improvements will be
cosmetic and not necessarily required at this time. The recorded sale
price is $10,700,000.
102
<PAGE>
VALUATION: (CONT'D.)
- --------------------------------------------------------------------------------
[PHOTO APPEARS HERE]
COMPARABLE SALE NO. 5
ESSEX PLACE
Address: 3415 West Hillsborough Avenue, Tampa, Florida
Section/
Township/Range: 34/28/18(Hillsborough County)
Date of Sale: May 1996
Recorded: Official Records Book 8152, Page 1907
Sales Price: $5,250,000(Adjusted)
Financing: Assumption of existing loan having a balance of $165,741. The
balance was paid in cash.
Grantor: Tampa Essex Place Associates
Grantee: Merry Land and Investment Company, Inc.
103
<PAGE>
VALUATION: (CONT'D.)
- --------------------------------------------------------------------------------
[PHOTO APPEARS HERE]
IMPROVED COMPARABLE SALE NO. 5 (CONTD.)
---------------------------------------
Improvement Data: The complex consists of three-story buildings of frame
construction with stucco exteriors and gable/hip
concrete tile roofs. There are 148 units with an
average unit size of 834 square feet comprising a total
rentable area of 123,456 square feet. Features and
amenities include: One swimming pool, spa, fitness
center, clubhouse and laundry facilities.
Year Built: 1989
No. of Units: 148
Average Unit Size: 834 SF
<TABLE>
<CAPTION>
Unit Mix: No. BR/BA S.F
--- ----- ---
<S> <C> <C> <C>
22 1/1 643
12 1/1 715
10 1/1 729
24 1/1 750
24 1/1 838
28 2/2 955
28 12/2 1021
</TABLE>
<TABLE>
<S> <C> <C>
Financial Information: Gross Income $1,134,864
Vacancy $ 90,789
EGI $1,044,075
Expenses $ 542,423
NOI $ 501,652
Units of
Comparison: Price/SF $42.53
Price/Room $ 8,387
Price/Unit $ 35,473
GRM 4.6
EGIM 5.03
OAR 9.6%
</TABLE>
Comments: Essex Place is located in the northeast quadrant of Hillsborough
Avenue and Himes Avenue in Tampa. This is a three-story garden style
apartment complex. The recorded sale price was $5,375,000; however,
this included adjacent excess land consisting of 2.7 acres. The
excess land was valued by the buyer at $125,000. Deducting the excess
land results in an adjusted sale price of $5,250,000. This complex
was in average condition at the time of sale. Water, sewer and
electric are paid by the tenant.
104
<PAGE>
VALUATION: (CONT'D)
- --------------------------------------------------------------------------------
[PHOTO APPEARS HERE]
COMPARABLE SALE NO. 6
HIDDEN PALMS
Address: 14555 Bruce B. Downs Boulevard, Tampa, Florida
Section/
Township/Range: 04/28/19 (Hillsborough County)
Date of Sale: May 1995
Recorded: Official Records Book 7758, Page 0229
Sales Price: $8,400,100
Financing: Cash to seller.
Grantor: Hidden Palms Association
Grantee: Hidden Palms Realty Corporation, Inc.
105
<PAGE>
VALUATION: (CONT'D)
- --------------------------------------------------------------------------------
IMPROVED COMPARABLE SALE NO. 6 (CONTD.)
---------------------------------------
<TABLE>
<S> <C> <C> <C>
Improvement Data: Garden apartment complex featuring 15 two story
apartment buildings comprising a total of 196,164
square feet of rentable area. The buildings are of wood
frame construction with a painted stucco exterior.
Interior amenities include fully equipped kitchens,
washer/dryer connections, wall to wall carpeting,
screened-in patio, ceiling fans, and vaulted ceilings
on top floor units. Exterior amenities include
clubhouse with fitness center, swimming pool, two
jacuzzis, two laundry rooms and picnic areas. Roadways
and parking areas are concrete and generally in average
condition.
Year Built: 1987
No. of Units: 256
Average Unit Size: 766 SF
Unit Mix: No. BR/BA S..F
-- ----- ----
132 1/1 650
52 1/1 735
24 2/1 862
30 2/2 1,030
18 2/2 1,142
Financial Information: Gross Income $1,569,700
Vacancy $ 109,900
EGI $1,459,800
Expenses $ 710,400
NOI $ 749,400
Units of Comparison: Price/SF $42.82
Price/Room $ 10,000
Price/Unit $ 32,813
GRM 5.4
EGIM 5.75
OAR 8.9%
</TABLE>
106
<PAGE>
VALUATION: (CONT'D)
- --------------------------------------------------------------------------------
IMPROVED COMPARABLE SALE NO. 6 (CONT'D)
---------------------------------------
Comments: Hidden Palms is a 256 unit apartment complex located in the
vicinity of the University of South Florida, with exposure to
Bruce B. Downs Boulevard and points of access along both Skipper
Road (main entrance) and 37/th/ Avenue (2/nd/ entrance). The
tenant population includes 40%-50% students. Each apartment is
separately metered for water/sewer and tenants pay for these
services directly. Maintenance and general appearance of the
property is considered average. There were no known items of
deferred maintenance at the time of sale. Financial data is based
on actual income/expenses. The property was originally listed for
sale at $9,200,000.
107
<PAGE>
VALUATION: (CONT'D)
- --------------------------------------------------------------------------------
[PHOTO APPEARS HERE]
COMPARABLE SALE NO. 7
LAKEWOOD PLACE
<TABLE>
<S> <C>
Address: 350 Lakewood Drive, Brandon, Florida
Section/
Township/Range: 21/29/20 (Hillsborough County)
Date of Sale: March 1994
Recorded: Official Records Book 7319, Page 0482
Sales Price: $12,000,000
Financing: Cash sale
Grantor: Lakewood Partners Limited
Grantee: Union Dominion Realty Trust
</TABLE>
108
<PAGE>
VALUATION: (CONT'D)
- --------------------------------------------------------------------------------
IMPROVED COMPARABLE SALE NO. 7 (CONTD.)
---------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Improvement Data: This project consists of 346 units, housed in 23 two-
story frame structures with vinyl lap siding and
painted stucco exteriors. This property contains
271,756 square feet of rentable area. Interior
amenities include washer/dryer hook-ups, screened
balcony/patio, cable television, and designer kitchens
with frost-free refrigerator with ice maker, microwave,
and European cabinetry. Exterior amenities include two
swimming pools, Jacuzzi, two lighted racquetball
courts, two lighted tennis courts, and fitness room.
Year Built: 1987
No. of Units: 346
Average Unit Size: 785 SF
Unit Mix: No. BR/BA S..F
--- ----- ----
40 1/1 544
90 1/1 618
48 2/1 833
168 2/2 919
Financial Information: Gross Income $2,090,304
Vacancy $ 104,515
EGI $1,985,789
Expenses $ 881,527
NOI $1,104,262
Units of Comparison: Price/SF $ 44.16
Price/Room $ 9,569
Price/Unit $ 34,682
GRM N/A
EGIM 6.04
OAR 9.2%
</TABLE>
109
<PAGE>
VALUATION: (CONT'D)
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IMPROVED COMPARABLE SALE NO. 7 (CONT'D)
---------------------------------------
Comments: Lakewood Place is located on the west side of Lakewood Drive
approximately one quarter mile north of S.R. 60 in Brandon. The
property was in average condition at the time of sale. The rents
were structured such that the tenants pay water and sewer. This
sale reflected operating expenses of $3.24 per square foot of
rentable building area and $2,548 per rental apartment unit. The
financial data does not include reserves.
110
<PAGE>
VALUATION: (CONT'D)
- --------------------------------------------------------------------------------
In comparing the comparable sales data as set out herein to the subject, primary
weight and emphasis has been placed upon the effective gross income multiplier
indication of value. The application of the effective gross income multiplier
enables Appraisers to make no subjective adjustments for items such as location,
unit mix, etc., since their impacts upon the comparable sale are reflected
within the multipliers. In addition, this unit of comparison is most applicable
when comparing the subject property to the comparable sales, since it inherently
adjusts for differences in vacancy and collection loss levels. Therefore, the
effective gross income multiplier is considered to be the most applicable unit
of comparison when estimating the market value of the subject property via the
Market Approach to value.
The effective gross income multipliers reflected by the seven sales analyzed
herein have been summarized as follows:
<TABLE>
<S> <C>
Sale 1 5.10
Sale 2 5.50
Sale 3 5.91
Sale 4 5.51
Sale 5 5.03
Sale 6 5.75
Sale 7 6.04
</TABLE>
All of the sales involve large modern, attractive, rental apartment communities
which represent a good sampling of the apartment market. Each of these seven
sales has been considered when estimating the effective gross income multiplier
to be utilized in this Market Approach to value. The Appraiser has given more
consideration to the multipliers that remain after eliminating the two extreme
low multipliers and the extreme high multiplier. The four remaining multipliers
range from 5.5 to 5.91.
An effective gross income multiplier of 5.80 has been selected when estimating
the current market value of the subject property via the Market Approach. This
rate selection recognizes the project's location, quality, unit mix and amenity
levels. In addition, at the subject property sewer and water expenses are paid
by the tenant, resulting in lower operating expenses than those reflected from
most of the comparable sales. The potential gross income for the subject
property has previously been estimated within the Income Approach to value at
$1,667,264. From this figure the stabilized vacancy and collection loss
estimate of 7.5% of potential gross income or $125,045 has been subtracted
resulting in an effective gross income estimate for the subject property of
$1,542,219. Multiplying this effective gross income estimate times a multiplier
of 5.80 produces a value indication via the Market Approach of $8,944,870. This
figure has been rounded slightly to $8,945,000. From this value indication of
$8,945,000 it is necessary to subtract $315,000 of estimated deferred
maintenance, which results in an "as is" value indication for the subject
property of $8,630,000.
111
<PAGE>
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CORRELATION
- --------------------------------------------------------------------------------
The market value of the subject property has been analyzed through the
application of the Cost, Income and Market Approaches to value. These three
approaches to value have produced the following value indications for the
subject property:
<TABLE>
<S> <C>
COST APPROACH $8,449,000
INCOME APPROACH $8,250,000
MARKET APPROACH $8,630,000
</TABLE>
The three approaches to value, as utilized herein, reflect a relatively narrow
range of values for the subject property. Summary comments pertaining to each
value indication are provided as follows:
Cost Approach:
- -------------
The Cost Approach to value, as developed herein, was based upon cost data
available from published national sources relating to multifamily construction
projects in the Florida market place, coupled with comparable land sales data.
The subject property is significantly impacted by external obsolescence and
limited recent land sales data is available within the subject market area. In
correlating the value estimate for the subject property, little consideration
has been given to the Cost Approach. This is due to the significant amounts of
external obsolescence impacting the property, as well as the lack of recent
comparable land sales within the subject's immediate market. As a result, the
value indication reflected by the Cost Approach is subject to weakness.
Income Approach:
- ---------------
The Income Approach to value has produced a value indication for the subject
property of $8,250,000. The Income Approach to value appears to be well
supported with each of its primary components being documented by market
activity. Rent comparables were obtained on other very similar rental apartment
properties within the subject market area. Market data pertaining to occupancy
rates and rent concessions were also derived from the comparable properties.
Operating expenses were estimated by giving consideration to a number of sources
including the subject's actual expenses, published expense data, independent
estimates prepared by the Appraiser and comparables from the market place. The
resulting net operating income was capitalized into an indication of value based
upon a review of overall capitalization rates obtained from the market.
112
<PAGE>
CORRELATION: (CONT'D.)
- --------------------------------------------------------------------------------
The Income Approach to value is considered to be a well documented analysis of
the subject property which has provided a strong indication of value that was
based on the subject property's income producing characteristics. The Income
Approach to value is very important as a tool to estimate the value of the
subject property, since buyers and sellers in the market employ a similar
analytical technique in establishing purchase prices and values.
Market Approach:
- ---------------
Good sales data was obtained involving comparable properties within the market.
Seven sales of similar apartment developments within the Tampa/St. Petersburg
Metropolitan Area were reviewed which were considered to provide a good
indication of market value for the subject property. Therefore, recognizing the
good market data which was available for utilization within the Market Approach,
this approach to value has been heavily weighted when estimating a correlated
value for the subject property.
Summary Comments and Conclusions:
- --------------------------------
The Cost Approach to value is generally well supported with adequate data being
available to develop replacement cost and depreciation estimates. However, the
subject is significantly effected by external obsolescence and limited land
sales data was available upon which to estimate the land value of the subject
site. The Cost Approach to value has produced a value indication at the middle
of the range reflected by the three approaches reviewed herein, but has
ultimately been given little consideration when correlating a value estimate for
the subject property.
Both the Income and Market Approaches to value appear well supported and good
market data was available for utilization when developing these approaches to
value. In addition, both of these approaches are currently considered by most
buyers and sellers to be most relevant when analyzing or valuing income
producing properties like the subject. Therefore, these approaches to value
have been given equal weight and consideration when estimating a correlated
market value for the subject property.
Based upon this data, it was the Appraiser's opinion that the market value of
the subject property, based upon market conditions existing on January 22, 1998,
and subject to the limiting conditions and contingencies set out herein, was:
EIGHT MILLION FOUR HUNDRED FIFTY THOUSAND DOLLARS
($8,450,000)
113
<PAGE>
- -----------------------------------------------------------------------------
DEFINITION OF MARKET VALUE
- -----------------------------------------------------------------------------
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 in 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 the normal consideration for the property sold
unaffected by special or creative financing or sales concessions granted by
anyone associated with the sale.
SOURCE: Uniform Standards of Professional Appraisal Practice of The Appraisal
Foundation.
- -------------------------------------------------------------------------------
DEFINITION OF HIGHEST AND BEST USE
- -------------------------------------------------------------------------------
The reasonably probable and legal use of vacant land or an improved property
which is physically possible, appropriately supported, financially feasible and
that results in the highest value.
SOURCE: The Appraisal of Real Estate, Ninth Edition, published by The American
Institute of Real Estate Appraisers (1987).
114
<PAGE>
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LIMITING CONDITIONS AND ASSUMPTIONS
- -------------------------------------------------------------------------------
In rendering our opinions, we have made certain assumptions and our opinions are
conditioned upon and are subject to certain qualifications including, without
limitation, the following:
INFORMATION USED:
No responsibility is assumed for accuracy of information furnished by or from
others, including the client, its officers and employees, or public records. We
are not liable for such information or the work of contractors, subcontractors
and engineers. The comparable data relied upon in this report has been
confirmed with one or more parties familiar with the transaction; all are
considered appropriate for inclusion to the best of our factual judgment and
knowledge.
LEGAL, ENGINEERING, FINANCIAL, STRUCTURAL OR MECHANICAL NATURE, HIDDEN
COMPONENTS, SOIL:
No responsibility is assumed for matters legal in character or nature, nor
matters of survey, nor of any architectural, structural, mechanical or
engineering nature. No opinion is rendered as to the legal nature or condition
of the title to the property, which is presumed to be good and marketable. The
property is appraised assuming it is free and clear of all mortgages, liens or
encumbrances, unless otherwise stated in particular parts of the report.
The legal description is presumed to be correct, but we have not confirmed same
by survey or otherwise. We assume no responsibility for the survey, or for
encroachments or overlapping or other discrepancies that might be revealed
thereby.
We have inspected as far as possible, by observation, the land and the
improvements thereon; however, it was not possible to personally observe
conditions beneath the soil or hidden structural, or other components, or any
mechanical components within the improvements; as a result, no representation is
made herein as to such matters unless otherwise specifically stated. The
estimated market value considers there being no such conditions that would cause
a loss of value. We do not warrant against the occurrence of problems arising
from soil conditions.
This appraisal is based on there being no hidden, unapparent, or apparent
conditions of the property site, subsoil or structures which would render it
more or less valuable. No responsibility is assumed for any such conditions or
for any expertise or engineering to discover them. All mechanical components are
assumed to be in operable condition and the status of same to be standard for
properties of the subject type. The condition of the heating, cooling,
ventilating, electrical and plumbing equipment is considered to be commensurate
with the condition of the balance of the improvements unless otherwise stated.
No judgment is made as to adequacy of insulation or energy efficiency of the
improvements or equipment.
115
<PAGE>
LIMITING CONDITIONS AND ASSUMPTIONS: (CONT'D.)
- --------------------------------------------------------------------------------
Unless otherwise stated in this report, the existence of hazardous material,
which may or may not be present on the property, was not observed by the
Appraiser. The Appraiser has no knowledge of the existence of such materials on
or in the property. The Appraiser, however, is not qualified to detect such
substances. The presence of substances such as asbestos, urea-formaldehyde foam
insulation, or other potentially hazardous materials may affect the value of the
property. The value estimate is predicated on the assumption that there is no
such material on or in the property that would cause a loss in value. No
responsibility is assumed for any such conditions, or for any expertise or
engineering knowledge required to discover them. The client is urged to retain
an expert in this field, if desired.
LEGALITY OF USE:
The appraisal is based on the premise that: (i) there is or will be full
compliance with all applicable federal, state and local environmental
regulations and laws unless otherwise stated in the report; (ii) that all
applicable zoning, building and use regulations and restrictions of all types
have been or will be complied with unless otherwise stated in the report; and
(iii) it is assumed that all required licenses, consents, permits or other
legislative or administrative authority, whether local, state, federal and/or
private, have been or can be obtained or renewed for the use intended and
considered in the value estimate.
COMPONENT VALUES:
The distribution of the total valuation in this report between land and
improvements applies only under the proposed program of utilization. The
separate valuations for land and building must not be used in conjunction with
any other appraisal and are invalid if so used.
A report related to an estate that is less than the whole fee simple estate
applies only to the fractional interest involved. The value of this fractional
interest plus the value of all other fractional interests may or may not equal
the value of the entire fee simple estate considered as a whole.
A report related to a geographical portion of a larger property applies only to
such geographical portion and should not be considered as applying with equal
validity to other portions of the larger property or tract. The value for such
geographical portions plus the value of all other geographical portions may or
may not equal the value of the entire property or tract considered as an entity.
AUXILIARY AND RELATED STUDIES:
No environmental or impact studies, special market study or analysis, highest
and best use analysis study or feasibility study has been requested or made by
us unless otherwise specified in our agreement for services or in this report.
We reserve the unlimited right to alter, amend, revise or rescind any of the
statements, findings, opinions, values, estimates or conclusions upon any
subsequent such study or analysis or previous study or analysis subsequently
becoming known to us.
116
<PAGE>
LIMITING CONDITIONS AND ASSUMPTIONS: (CONT'D.)
- --------------------------------------------------------------------------------
DOLLAR VALUES, PURCHASING POWER:
The value estimated, and the costs used, are as of the date of the estimate of
value. All dollar amounts are based on the purchasing power and price of the
United States dollar as of the date of the value estimate.
INCLUSIONS:
Furnishings and equipment or business operations except as otherwise
specifically indicated have been disregarded with only the real estate being
considered.
PROPOSED IMPROVEMENTS, CONDITIONED VALUE:
Improvements proposed, if any, on or off-site, as well as any repairs required
are considered, for purposes of this appraisal to be completed in good and
workmanlike manner according to information submitted and/or considered by us.
In cases of proposed construction, the report is subject to change upon
inspection of property after construction is completed. This estimate of value
is as of the date shown, as proposed, as if completed and operating at levels
shown and projected.
VALUE CHANGE, DYNAMIC MARKET, INFLUENCES:
The estimated value is subject to change with market changes over time; value is
highly related to interest rates, exposure, time, promotional effort, supply and
demand, terms for sale, motivation and conditions surrounding the offering. The
value estimate considers the productivity and relative attractiveness of the
property physically and economically in the marketplace. The estimate of value
in this report is not based in whole or in part upon the race, color or national
origin of the present owners or occupants of the properties in the vicinity of
the property appraised.
In the event this appraisal includes the capitalization of income, the estimate
of value is a reflection of such benefits and our interpretation of income and
yields and other factors which were derived from general and specific market
information. Such estimates are as of the date of the estimate of value. As a
result, they are thus subject to change as the market is dynamic and may
naturally change over time.
SALES HISTORY:
The Appraisers have not reviewed an abstract of title relating to the subject
property. The sales history data, as set out within the report relating to the
subject property, is therefore subject to review by legal counsel and to the
review of a current abstract by the Appraisers.
117
<PAGE>
LIMITING CONDITIONS AND ASSUMPTIONS: (CONT'D.)
- --------------------------------------------------------------------------------
MANAGEMENT OF THE PROPERTY:
It is assumed that the property which is the subject of this report will be
under prudent and competent ownership and management.
CONFIDENTIALITY:
We are not entitled to divulge the material (evaluation) contents of this
report, analytical findings or conclusions, or give a copy of this report to
anyone other than the client or his designee as specified in writing except as
may be required by the Appraisal Institute as they may request in confidence for
ethics enforcement, or by a court of law or body with the power of subpoena.
All conclusions and opinions concerning the analysis as set forth herein were
prepared by the Appraiser(s) whose signature appears. No change of any item in
the report shall be made by anyone other than the Appraiser, and the Appraiser
and firm shall have no responsibility if any such unauthorized change is made.
Wherever our opinion herein with respect to the existence or absence of facts is
qualified by the phrase or phrases "to the best of our knowledge", "it appears"
or "indicated", it is intended to indicate that during the course of our review
and investigation of the property, no information has come to our attention
which would give us actual knowledge of the existence or absence of such facts.
COPIES, PUBLICATION, DISTRIBUTION, USE OF REPORT:
Possession of this report or any copy thereof does not carry with it the right
of publication, nor may it be used for other than its intended use; the physical
report(s) remain the property of the firm for the use of the client, the fee
being for the analytical services only. This report may not be used for any
purpose by any person or corporation other than the client or the party to whom
it is addressed or copied without the written consent of an officer of the firm
and then only in its entirety.
Neither all nor any part of the contents of this report shall be conveyed to the
public through advertising, public relations efforts, news, sales, or other
media, without our prior written consent and approval, nor may any reference be
made in such a public communication to the Appraisal Institute or the S.R.A.,
S.R.P.A., S.R.E.A., R.M., or M.A.I., designations.
TRADE SECRETS:
This appraisal was obtained from Consortium Appraisal, Inc. and consists of
"trade secrets and commercial or financial information" which is privileged and
confidential. Notify the Appraiser(s) signing the report or an officer of
Consortium Appraisal, Inc., of any request to reproduce this appraisal in whole
or part.
AUTHENTIC COPIES:
The authentic copies of this report are bound with a clear cover and a blue
back. The signature page of the report should bear a raised seal on or near the
signature block. Any copy that does not have this binding and seal is
unauthorized and may have been altered.
118
<PAGE>
LIMITING CONDITIONS AND ASSUMPTIONS: (CONT'D.)
- --------------------------------------------------------------------------------
EXHIBITS:
The sketches and maps in this report are included to assist the reader in
visualizing the property and are not necessarily to scale. Various photos, if
any, are included for the same purpose and are not intended to represent the
property in other than actual status, as of the date of the photos.
TESTIMONY, CONSULTATION, COMPLETION OF CONTRACT FOR APPRAISAL SERVICES:
The contract for appraisal, consultation or analytical service, are fulfilled
and the total fee payable upon completion of the report. The Appraiser(s) or
those assisting in preparation of the report will not be asked or required to
give testimony in court or hearing because of having made the appraisal, in full
or in part, nor engage in post appraisal consultation with client or third
parties except under separate and special arrangement and at additional fee.
LIMIT OF LIABILITY:
Liability of the firm and employees is limited to the fee collected for
preparation of the appraisal. There is no accountability or liability to any
third party.
FEE:
The fee for this appraisal or study is for the service rendered and not for the
time spent on the physical report.
Acceptance of, and/or Use of, This Appraisal Report Constitutes Acceptance of
The Above Conditions.
119
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-----------------------------------------------------------------------
EXHIBITS
------------------------------------------------------------------------
120
<PAGE>
- --------------------------------------------------------------------------------
QUALIFICATIONS OF THE APPRAISER
- --------------------------------------------------------------------------------
NAME:
Philip F. Wood
BUSINESS ADDRESS:
Consortium Appraisal, Inc.
Post Office Drawer 2129
Winter Park, Florida 32790
GENERAL EDUCATION:
Bachelor of Science Degree in Business Administration
Florida State University, Tallahassee, Florida, 1970
APPRAISAL EDUCATION:
Completed the following courses under the direction of
the American Institute of Real Estate Appraisers:
Course 1-A - R/E Appraisal Principles & Practices
Course 1-B - Capitalization Techniques in Real Estate Appraising
Course 2 - Urban Properties
Course 4 - Condemnation
Completed the following course under the direction of the Society of Real Estate
Appraisers:
Course 201 - Income Property Analysis
APPRAISAL EXPERIENCE:
Staff Appraiser with the Florida Department of Transportation from August 1970
to August 1973
Real Estate Appraiser and Consultant from 1973 to present. A corporate partner
in Consortium Appraisal, Inc. Vice President of The Real Estate Consortium, Inc.
<PAGE>
QUALIFICATIONS OF THE APPRAISER / PHILIP F. WOOD: (CONT'D.)
- --------------------------------------------------------------------------------
Qualified Expert Witness in condemnation testimony in Orange, Seminole, Osceola
and Broward Counties.
Engaged exclusively in the appraisal of real estate. Completed appraisals on
residential, commercial, industrial, agricultural, acreage, air rights and
special purpose properties with additional experience in lease analysis,
condemnation appraising and testimony and income evaluation.
Presently holds a Real Estate Broker license in the State of Florida.
PROFESSIONAL DESIGNATIONS:
Member of the Appraisal Institute holding the designation of MAI, Certificate
#5942; also holding the designation SRPA, Senior Real Property Appraiser.
State-Certified General Real Estate Appraiser
Florida License Number 0000777
RECERTIFICATION:
The Appraisal Institute conducts a voluntary program of continuing education for
its designated members. MAI's and RM's who meet the minimum standards of this
program are awarded periodic educational certification. Philip F. Wood is
certified under this program through December, 1997.
<PAGE>
- --------------------------------------------------------------------------------
QUALIFICATIONS OF THE APPRAISER
- --------------------------------------------------------------------------------
NAME:
Charles B. Byrd
BUSINESS ADDRESS:
Consortium Appraisal, Inc.
Post Office Drawer 2129
Winter Park, Florida 32790
CERTIFICATION & LICENSURE:
State-Certified General Real Estate Appraiser
Florida License Number 0000908
EDUCATION:
Bachelor of Science Degree, Agricultural Economics with Real Estate Option,
Brigham Young University, Provo, Utah
APPRAISAL EDUCATION:
Sponsor: American Institute of Real Estate Appraisers
Completed:
Course 1A1 - Real Estate Appraisal Principles
Course 1A2 - Basic Valuation Procedures
Course 8-2 - Residential Valuation
Course 1BA - Capitalization Theory and Techniques, Part A
Course 1BB - Capitalization Theory and Techniques, Part B
Course 2-3 - Standards of Professional Practice
Course 2-1 - Case Studies in Real Estate Valuation
Course 2-2 - Valuation Analysis and Report Writing
APPRAISAL EXPERIENCE:
Real Estate Appraiser 1983 to present
Engaged in the appraisal of residential, commercial and industrial properties
