<PAGE>
EXHIBIT (c)(1)(C)
SUMMARY COMPLETE
REAL ESTATE APPRAISAL REPORT
320-Space Town & Country Estates
Manufactured Housing Community
4444 East Benson Highway
Tucson, Pima County, Arizona
PREPARED FOR
Mr. Steve Waite
Windsor Corporation
6160 South Syracuse Way
Greenwood Village, Colorado 80111
AS OF
May 1, 2000
PREPARED BY
WHITCOMB REAL ESTATE
<PAGE>
[LETTERHEAD OF WHITCOMB REAL ESTATE]
June 1, 2000
Steve Waite
Windsor Corporation
6160 South Syracuse Way
Greenwood Village, Colorado 80111
RE: 320-Space Town & Country Estates
Manufactured Housing Community
4444 East Benson Highway
Tucson, Pima County, Arizona
Dear Mr. Waite:
At your request, we have inspected and appraised the above captioned
property. We estimate the "as is" market value of the property rights outlined
herein, as of May 1, 2000, based on an exposure period of six months, to be:
- SIX MILLION ONE HUNDRED THOUSAND DOLLARS -
($6,100,000)
Our value estimate applies to the land as physically constituted, to the
improvements actually in existence and reflects prevailing trends in the local
real estate market. We have made a careful inspection, study, and analysis of
the property, and have considered all factors which, in our opinion, would tend
to influence the market value of the subject.
Town & Country Estates is a fully developed family manufactured housing
community containing a total of 320 spaces, with a clubhouse, two pools,
Jacuzzi, playground, and four shuffleboard courts. The community has an on-site
well and the Pima County Wastewater District furnishes sewer service.
<PAGE>
Mr. Steve Waite
June 1, 2000
Page Two
The rental rate at Town & Country Estates is currently $258.00 and includes
water, sewer and trash. According to the manager, the physical occupancy of the
subject is currently 95.0%. The manager occupies one unit, resulting in an
economic occupancy of 94.7%.
Our conclusion is premised on the Assumptions and Limiting Conditions as
cited in our attached report, as well as the facts and circumstances as of the
valuation date. This appraisal has been prepared in accordance with the "Uniform
Standards of Professional Appraisal Practice" (USPAP) as published by the
Appraisal Standard Board of the Appraisal Foundation.
This appraisal assignment was not based on a requested minimum value,
specific value, or the approval of a loan.
We appreciate this opportunity to be of service to you. If you have any
questions, please do not hesitate to contact us.
This is a Summary Appraisal, which is intended to comply with the reporting
requirements set forth under Standards Rule 2-2(b) of the Uniform Standards of
Professional Appraisal Practice for Summary Appraisal Reports. This report
represents only summary discussions of the data, reasoning, and analyses
employed in the appraisal process toward the development of our opinion of
value. Supporting documentation has been retained in our files.
Very truly yours,
WHITCOMB REAL ESTATE
/s/ John H. Whitcomb JAG
John H. Whitcomb, MAI, CCIM
/s/ L. Drake Moore JAG
L. Drake Moore, MAI, CCIM
St. Cert. Gen. REA #TP40569
<PAGE>
4
TABLE OF CONTENTS
-----------------
<TABLE>
<S> <C>
Table Of Contents............................................... 4
Photographs Of The Subject...................................... 5
Summary Of Facts And Conclusions................................ 6
Extent Of Confirming, Collecting And Reporting Data............. 7
Purpose, Function And Date Of The Appraisal..................... 7
Area/Neighborhood Description................................... 8
Manufactured Home Community Market Overview..................... 10
Land And Site Improvements...................................... 11
Improvement Description......................................... 12
Ownership And Property History.................................. 12
Occupancy....................................................... 12
Zoning And Other Land Use Controls.............................. 13
Real Estate Assessment And Taxes................................ 13
Marketability And Marketing Period.............................. 14
Highest And Best Use............................................ 15
Valuation Process............................................... 15
Income Capitalization Approach.................................. 16
Sales Comparison Approach....................................... 24
Final Estimate Of Value......................................... 28
Certification................................................... 29
Assumptions And Limiting Conditions............................. 30
</TABLE>
Addenda
Legal Description
Maps
Profile Of Appraiser
<PAGE>
PHOTOGRAPHS OF THE SUBJECT (Taken May 3, 2000) 5
[PICTURE APPEARS HERE]
1. Entrance to Subject
[PICTURE APPEARS HERE]
2. Typical Street View
<PAGE>
6
SUMMARY OF FACTS AND CONCLUSIONS
--------------------------------
<TABLE>
<S> <C>
Property Appraised: 320-Space Town & Country Estates
-------------------
Manufactured Home Community
4444 East Benson Highway
Tucson, Pima County, Arizona
Property Rights
---------------
Appraised: Fee Simple Interest, subject to tenant leases
----------
Land Area: 48.418 acres, or 2,109,104 square feet (Estimated by
----------
Appraiser)
Improvements: 320-manufactured home spaces, clubhouse with office
-------------
two pools and recreation area.
Owner: Windsor Park Properties 5 and 6
------
Zoning: TH, Trailer Homesite Zone
-------
Highest and Best Use: As Improved -- Current Use
---------------------
Value Indications: Income Approach $6,150,000
------------------
Sales Comparison Approach $6,050,000
Final Estimate of Value: $6,000,000
------------------------
Date of Appraisal: May 1, 2000
------------------
Date of Inspection: May 3, 2000
-------------------
</TABLE>
<PAGE>
7
EXTENT OF CONFIRMING, COLLECTING AND REPORTING DATA
---------------------------------------------------
This assignment encompasses providing an "as is" market value of the fee
simple title of the property and improvements, as of the specified date. This
investigation included an overview of the area and local manufactured home
market. We have inspected the subject and its environs, collected and analyzed
market data, inspected the comparable and competitive properties, considered and
applied the appropriate valuation methods and reconciled the final value
estimate.
The real estate interest appraised is that of ownership in fee simple
interest, subject to the existing tenant leases. The property is appraised as
if free and clear of mortgages, liens, servitude's and encumbrances, except
those noted in the body of this appraisal.
PURPOSE, FUNCTION AND DATE OF THE APPRAISAL
-------------------------------------------
The purpose of the appraisal is to express our opinion of the "as is"
market value of the fee simple interest, subject to existing tenant leases, of
the real estate, as of May 1, 2000. The information, opinions, and conclusions
contained in this report have been prepared as a basis for portfolio valuation.
The subject was physically inspected on May 3, 2000, and the date of this
appraisal is May 1, 2000.
Market Value is defined as: 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, 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:
. Buyer and Seller are typically motivated;
. Both parties are well informed or well advised, and each acting in
what he considers his own best interest;
. A reasonable time is allowed for exposure in the open market;
. Payment is made in terms of cash in U.S. dollars or in terms of
financial arrangements comparable thereto; and
. 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./1/
_______________________
/1/ The Office of the Thrift Supervision, 12 CFR 564.2(f).
<PAGE>
8
AREA/NEIGHBORHOOD DESCRIPTION
-----------------------------
Location/Access
---------------
The subject is located in Tucson, which is located within southeast
Arizona, approximately 110 miles southeast of Phoenix, within the northeastern
portion of Pima County. The city of Tucson serves as the county seat of Pima
County. This area lies in the southern portion of the state and regional
highway access is good with two interstates, I-10 and I-19, which traverse the
county. Tucson is located approximately 409 miles southeast of Las Vegas,
Nevada, 455 miles southwest of Albuquerque, New Mexico and 424 miles east of San
Diego, California. It is the second largest city in the state and encompasses
156.04 square miles while the metropolitan area spreads over 495 miles. The
subject lies approximately 6 miles southeast of the Central Business District of
Tucson. Access to the neighborhood is excellent, offering all amenities,
shopping, schools, churches, medical facilities and entertainment and
recreation. Ingress and egress of the subject is rated adequate.
Development has taken the form of mixed-use residential, commercial and
light industrial type properties located along the major road frontages, typical
of rural areas. Land use in the immediate vicinity of the subject is
characteristic of the entire neighborhood. Existing uses along East Benson
Highway are typical of older, industrial and retail strip types of development.
The neighborhood is estimated to be 50% developed. There remain large
contiguous tracts of land available for in-fill development.
Population
----------
As of 1998, Pima County contained a total population of 790,755, and
represents a 18.20 percent increase from 1990. The city of Tucson is the second
largest city within the state with an estimated 1998 population of 458,675. This
represents a 13.14 percent increase in total population since 1990. The
surrounding area has exhibited a significant amount of population growth during
the past two decades. This growth is attributed to job growth and attractive
cost of living for the surrounding area. Population trends for the area are
outlined on the following page.
<PAGE>
Area/Neighborhood Analysis 9
================================================================================
REGIONAL POPULATION TRENDS
1980 to 1990
Compound Annual
1980 1990 1998 Growth Rate
--------------------------------------------------------------------------------
Tucson 330,537 405,390 458,675 2.29%
Pima County 531,896 668,750 790,755 2.58%
State of Arizona 2,718,215 3,763,350 4,668,631 3.68%
================================================================================
It is estimated that the population levels of Pima County and other
locations in the surrounding area will continue to increase in coming years. As
of 1998, the per capita personal income for Pima County stood at $21,065 and
represents a 29.2% increase from 1993.
Economic Base and Employment
----------------------------
Pima County has a relatively diversified economic base and primary
employment sectors include services (31.1%), government (23.1%), wholesale and
retail trade (21.7%) and manufacturing (9.0%). Manufacturing employment within
the Tucson area has more than doubled during the past 10 years and is attributed
to the increase of high technology manufacturers which include AlliedSignal, 3M,
Raytheon Missile Systems and Burr-Brown. Tourism also serves as an important
source of income with over $2.8 billion in revenues during 1998. Mining also
plays as an important role in the local economy. Employment growth trends for
the surrounding area reflect the recession of the early 1990's and a full
recovery. The unemployment rate has continued to decline as the total labor
force has increased. This factor indicates job growth has outpaced the growth
in the labor force. From 1994 to 1998, the total labor force within the MSA
increased by 3.5 percent. Much of this growth has been in the service,
manufacturing and government sectors. Major employers include University of
Arizona (10,100 employed), Davis-Monthan Air Force Base (8,340), Hughes Missile
Systems Co. (7,100), HealthPartners of South Arizona (4,300) and BHP Copper Co.
(3,340).
The labor force for the MSA numbered approximately 356,400 in April 1999
and represents a 3.2 percent increase from April 1998. As of April 1999, the
estimated unemployment rate stood at 2.6%, and represents a decrease from April
1998. In addition, these figures are below both state and national unemployment
levels.
<PAGE>
Area/Neighbourhood Analysis 10
Transportation
--------------
Pima County has an abundant transportation network that allows convenient
access to surrounding cities. Two interstate highways converge on the city and
provide primary access to the surrounding areas. Interstate 10 extends northwest
to Phoenix and southeast to El Paso, Texas. Interstate 19 extends south from
Tucson to Nogales. Other primary routes include State Routes 86, 77 and 83.
Commercial air service is available from the Tucson International Airport. Over
39+ trucking companies with several maintaining terminals within the surrounding
area provide common carrier freight service. Southern Pacific and Amtrak provide
railroad service, which serve the area. Overall, transportation facilities
within the Pima County area are sufficient to serve the needs of both businesses
and residents.
Summary
-------
In summary, the Tucson and Pima County area looks favorable with most
economic sectors experiencing strong growth from both relocations and
expansions. With a diversified economy, a large measure of stability is ensured
relative to many other areas. Although future rates of growth are not likely to
match those of the early and mid 1990's, the overall prognosis of factors
pertinent to the long-term real estate investment decision appears positive.
MANUFACTURED HOME COMMUNITY MARKET OVERVIEW
-------------------------------------------
According to the 1998 U.S. Housing Market Map, Arizona ranked 13/th/ among
states in the number of homes shipped in 1998. As shown on the following table,
manufactured home shipments in Arizona have varied annually since 1996.
Manufactured
Home Shipments
===============================
Year Shipments
-------------------------------
1996 8,095
-------------------------------
1997 9,315
-------------------------------
1998 8,611
===============================
Source: Arizona Manufactured Housing Association
New communities are not being developed in the urban areas due to
restrictive zoning ordinances. There is a wide range of rental rates in the
marketplace. Generally speaking, lot rent ranges between $159.00 per month to
$260.00 per month. Rates varied within some of the communities as lots on a
corner, lots for multi-section homes and larger lots leased for higher than
standard amounts. Typically, services included in the rental rate vary.
<PAGE>
11
LAND AND SITE IMPROVEMENTS
--------------------------
The subject site is irregularly shaped and contains approximately 48.418
+/- acres, or approximately 2,109,104 square feet of gross area. A survey was
not available; therefore, the size of the subject site is an estimate. The
subject tract is generally level and at grade with East Benson Highway.
Drainage of the tract appears adequate and no adverse soil or subsoil conditions
were observed during the physical inspection of the site. Utility services
connected and in service on the date of valuation include sanitary and storm
sewer, electricity and telephone. An on-site well provides water to the
community.
Roadways arranged to maximize the use of the land access the individual
lots in the community. Roadway improvements include:
Street-bed: East Benson Highway is an asphalt paved, two-lane roadway.
----------
The subject streets are asphalt paved 25-foot wide
roadways.
Sidewalks/Curb: There are no sidewalks or curbs along the public streets
--------------
or in the subject.
Street Lights: East Benson Highway does not have streetlights. The
-------------
subject park has pole mounted overhead streetlights along
the right of way.
Landscaping: Sodded and planted areas extend along the entire
-----------
perimeter and throughout the site.
Encumbrances: None Noted
-------------
Easements: Standard utility easements are assumed to exist.
----------
Encroachments: None Noted
--------------
Our review of the deed and county property records did not reveal any
adverse or potentially adverse interests that would affect the utility of the
subject property. Specifically, there are no recorded, or otherwise known
liens, defects in title or adverse easements. There are no rent controls in
effect in Pima County.
Functional Utility
------------------
The sites, which are irregular in shape and contains approximately 48.418
+/- acres, which is large enough to accommodate building improvements and
roadways as well recreational amenities and green areas. The sites are
considered functional for various residential development scenarios. The
current development equates to an overall density of approximately 6.61 units
per acre, which is above current development standards that tend toward larger
lot sizes, wider streets and more green areas.
<PAGE>
12
IMPROVEMENT DESCRIPTION
-----------------------
The subject is improved with 320 manufactured housing community pads,
arranged along streets configured to maximize the available lot spaces. All of
the lots vary slightly in size and the density of the park is equal to 6.61
spaces per acre.
The common area amenities include the clubhouse, two pools, and children's
playground area. We have not estimated a separate value for these amenities, or
equipment, as they are standard items found at most manufactured home
communities. These amenities are typical, adequate and functional in use.
The community and site improvements were built in 1971. The common areas,
streets, amenities and individual mobile homes were observed to be in excellent
overall condition, having been originally constructed of quality materials and
having been maintained over the years. No significant item of deferred
maintenance was noted and the current maintenance level is rated good.
OWNERSHIP AND PROPERTY HISTORY
------------------------------
The ownership of the subject property is in the name of Windsor Park
Properties 5 and 6. The Windsor Corporation purchased the subject property in
November 1989. There have been no other sales or other transfers of the
property of which the appraisers are aware. The subject is currently not listed
for sale nor is there pending offers or current contracts for the sale of the
property.
OCCUPANCY
---------
Two fully developed manufactured home communities with 320 total spaces
occupy the property. According to the manager, there are currently 16 vacant
lots and the physical occupancy is 95.0%. In addition, the manager occupies one
lot.
<PAGE>
13
ZONING AND OTHER LAND USE CONTROLS
----------------------------------
The property is zoned TH, Trailer Homesite. It is our opinion that the
subject property is in conformance with the zoning code.
Flood Hazard
------------
According to Flood Map Community Number 04019C2245K, dated February 8,
1999, the subject is located in Zone "X", which indicates areas of minimal
flooding.
Environmental
-------------
We observed no obvious areas of contamination on or about the site. We
noted that there is an on-site waster water treatment plant and we have
previously mentioned the spaces that have individual septic systems. We have no
qualifications in environmental hazards and recommend an environmental audit be
performed.
REAL ESTATE ASSESSMENT AND TAXES
--------------------------------
The subject property is identified in the Pima County records under tax
parcel number ###-##-####. The Full Cash Value (FCV) of the subject totals
$2,198,584 and the Limited Primary Value (LPV) is $2,165,831. It is our opinion
that the subject is under assessed. This not uncommon for manufactured housing
communities since large parts of the value can be attributed to the
entrepreneurial skill in acquiring the land and filling the community.
Assessed values, for purposes of property taxation are determined on
January 1, of each year. In the state of Arizona, manufactured housing
communities are assessed at 10% of the Full Cash Value and Limited Primary
Value. Properties are reassessed annually and equitability of assessments is
not a basis for assessment in the state of Arizona. The 1999 current taxes total
$39,841.22 and should be approximately the same in 2000.
In the State of Arizona, property taxes are paid in arrears. Taxes are due
and payable on or before December 31/st/.
<PAGE>
14
MARKETABILITY AND MARKETING PERIOD
----------------------------------
The subject is competitive with other properties in the marketplace and is
marketable, although not considered a candidate for a resident purchase.
Discussions with large institutional manufactured home community investor
representatives and local area realtors, indicated that "properly priced",
stable, well kept manufactured home communities should "be under contract"
within a six month period in today's market.
Our discussions also indicated overall capitalization rates were higher for
all-age communities and dependent upon occupancy and condition. Pricing is
established by processing gross income, reduced by a vacancy and credit loss
factor, operating expenses and an additional capital charge based on overall
condition, is deducted to arrive at a net operating income (NOI). Those surveyed
indicated that at properties not operating at stabilized occupancy, they were
unwilling to compensate a seller for any of the upside to be gained in filling
the property.
Interest rates are low and financial institutions are again willing to lend
money for real estate projects with good occupancies. There has also been
significant institutional investor interest in manufactured home community
investments. In our opinion, the marketing period for the property would be
within the range indicated by the industry participants or six months.
<PAGE>
15
HIGHEST AND BEST USE
--------------------
Highest and Best Use may be defined as: The reasonably probable and legal
use of vacant land or an improved property, which is physically possible,
appropriately supported, financially feasible and which results in the highest
value."/2/
We have considered all of the potential uses to which the subject is
legally and physically adaptable. It is our opinion that the current use of the
subject, as a 320-space, manufactured home community, represents the highest and
best use of the subject.
VALUATION PROCESS
-----------------
There are three recognized approaches to the valuation of real property:
Cost; Income; and, Direct Sales Comparison. The appropriateness of each
approach varies with the type and age of the property under examination, as well
as the quantity and quality of applicable market data as of the appraisal date.
In the analyses and appraisal of the subject, we have considered the positive
and negative aspects of each approach for this specific assignment.
The Cost Approach provides a value indication based on the depreciated cost
of the improvements added to land value. The Income Approach produce an
estimate of value through an economic analysis of the net income derived from
the property and is converted to a capital sum at an appropriate rate. The
Sales Comparison Approach produces an estimate of value through a comparison of
similar properties, which have been transferred in the local market.
In the analysis of a fully occupied manufactured home community, investors
are primarily concerned with cash flow to service any debt and the equity
position. While development costs are important for developing communities,
investors assume that these costs are adequately accounted for in rental levels.
In communities where developers have made money on the sale of mobile homes by
offering low space rental rates, an investor would not be willing to compensate
a seller for any more than the income to be received. The subject is fully
developed with no expansion possibilities, therefore a potential investor would
be primarily interested in the cash flow and equity return and we have excluded
the Cost Approach.
_______________________
/2/ The Appraisal Institute, The Appraisal of Real Estate, 10th Ed. Chicago: The
Appraisal Institute, 1992, page 275.
<PAGE>
16
INCOME CAPITALIZATION APPROACH
------------------------------
As an introduction to the analysis of the subject it is helpful to identify
the goals and objectives of both buyers and sellers of properties such as the
subject.
From the standpoint of a seller, maximum price is, of course, an initial
goal. Tempered by capital gains considerations and the potential for recapture
of book depreciation accruals, a seller is often forced to consider a negotiated
price that may include such concessions as interim or permanent financing.
Dictated by market forces, the rate, term, and amount of financing may be
favorable, neutral, or unfavorable with respect to the ultimate selling price.
The purchasers of investment realty naturally prefer to pay a minimum price
subject to terms, and within the goal of price minimization seek:
1. Cash flow relative to capital investment measured either on a pre-
income tax or post-income tax basis.
2. Minimal capital investment to permit leverage.
3. Equity build-up through mortgage amortization.
4. Sheltered income through accumulation of book depreciation.
5. Capital accumulation through market appreciation.
The relative importance of the above factors to an investor's formula is
difficult to quantify. Institutional investors, speculators, developers,
financial institutions, and syndicators do not uniformly apply the same
investment strategies. Location, property size, tenant mix, age of the
facility, absence or presence of long term leases, assignability of existing
debt, condition of the facility, level of occupancy, quality of management, and
other related factors are among the criteria that affect the marketability of an
income-producing property in the market.
The first step in the Income Approach to value involves the estimate of
future net operating income to be generated by the subject property. The
estimate of net operating income is derived through the process of estimating
the total potential gross income (PGI from rentals and other sources, less any
vacancy and credit loss producing an effective gross income (EGI) estimate. All
expenses associated with the operation of the property are then deducted to
yield a stabilized net operating income (NOI) estimate.
A survey of the competitive properties is presented in summary form on the
following page.
<PAGE>
RENT COMPARABLE SUMMARY
<TABLE>
<CAPTION>
===============================================================================================================================
No. Name Total Monthly Rental Services Amenities
Address Spaces/ Rate Included In
% Occ. Concession Rent
-------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1 Country Club Estates MHP 256/ $245.00 to None Pool and playground.
5600 South Country Club Road 99.2% $260.00
Tucson, Arizona
-------------------------------------------------------------------------------------------------------------------------------
2 Desert Classic Mobile Home 273/ $200.00 to None Clubhouse, pool and
5250 South Campbell 100% $210.00 playground.
Tucson, Arizona
-------------------------------------------------------------------------------------------------------------------------------
3 Mountain Vista Mobile Home Park 459/ $220.00 to None Clubhouse and two pools.
4545 South Mission Road 95.0% $230.00
Tucson, Arizona
-------------------------------------------------------------------------------------------------------------------------------
4 Park Lane Mobile Home Park 136/ $250.00 to None Clubhouse, pool and
5255 South Park Street 97.1% $260.00 billiard room.
Tucson, Arizona
-------------------------------------------------------------------------------------------------------------------------------
5 Mobile Aire Mobile Home Park 80/ $159.00 None Pool.
6065 South Country Club Road 100%
Tucson, Arizona
-------------------------------------------------------------------------------------------------------------------------------
Subj. Town & Country Estates MHP 320/ $258.00 Water, sewer and Clubhouse, 2 pools with
4444 E. Benson Highway 95.0% trash pick-up. spa, billiards and
Tucson, Arizona shuffleboard.
===============================================================================================================================
</TABLE>
<PAGE>
Income Capitalization Approach 18
Income Analysis
---------------
The general market practice is on a base lot rent charged on a monthly
basis. The base lot rent in our survey ranged from $159.00 to $260.00 per
month, as indicated by the rent comparables recited in this report. As shown by
our survey, the subject's lot rents are within the market range. In our
forecast of total rental income, we have projected 12 months at the current rent
levels. Based on the current rent roll, the total monthly rent amounts to
$82,560 and the average monthly rental rate for the 320 units is equivalent to
$258.00. The potential gross income from rentals is $990,720 per year.
Vacancy and Credit Loss
-----------------------
The subject is an all-age community currently 95.0% physically occupied with
16 of the 320 sites vacant. The market currently ranges from 95.0% to 100%. We
have estimated vacancy and credit loss at 7.0% of total potential gross income,
or $69,350.
Other Income
------------
Additional income is typically derived from sources such as storage fees,
labor charges to the tenants, commissions on sales and rentals of the units.
Historically, the subject has generated from $23.50 per space in 1998 to $37.01
per space in 1999, in other income. We have based our estimate of other income
on the historical levels, estimating this income at $30.00 per space, or $9,600
annually.
Effective Gross Income (EGI)
----------------------------
Effective Gross Income is derived from income based upon the current
economic rent less a vacancy and credit loss allowance for present and
anticipated losses due to tenant changes, plus any additional income. Thus
potential gross rental income of $990,720 less a vacancy and credit loss
allowance in the amount of $69,350 or 7.0% produces an effective gross income
from rentals estimate of $921,370. To this we add income derived from other
sources, which totals $9,600, arriving at an effective gross income estimate of
$930,970.
=======================================================================
Town & Country Manufactured Housing Community
Effective Gross Income
=======================================================================
Gross Potential Rental Income:
Monthly Monthly
Spaces Rent Total Annualized
-----------------------------------------------------------------------
320 $ 258.00 $ 82,560 $ 990,720
Less:
Vacancy & Credit Loss 7.0% (69,350)
----------
Effective Gross Income From Lot Rentals $ 921,370
Miscellaneous Income 9,600
----------
Effective Gross Income $ 930,970
=======================================================================
<PAGE>
<TABLE>
<CAPTION>
============================================================================================================================
Town & Country Manufactured Housing Summary of Historical Operations
Pct. of $ Per Pct. of $ Per Pct. of $ Per
1996 Income Space 1997 Income Space 1998 Income Space
----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Income:
Rents $ 663,011 98.74% $ 2,071.91 $ 732,672 98.91% $ 2,289.60 $ 785,827 99.05% $ 2,455.71
RV Rent 252 0.04% 0.79 - 0.00% - - 0.00% -
Utility Income 152 1.89% 0.48 - 0.00% - - 0.00% -
Miscellaneous/Other 8,034 1.20% 25.11 8,097 1.09% 25.30 7,520 0.95% 23.50
---------------------------------------------------------------------------------------------------
Total Income $ 671,449 101.87% 2,098.28 $ 740,769 100.00% 2,314.90 $ 793,347 100.00% $ 2,479.21
Expenses:
Insurance 13,092 1.95% 40.91 15,927 2.15% 49.77 4,402 0.55% 13.76
Office 41,605 6.20% 130.02 46,060 6.22% 143.94 41,159 5.19% 128.62
Maintenance & Supplies 22,284 3.32% 69.64 34,520 4.66% 107.88 30,209 3.81% 94.40
Management Expense 33,580 5.00% 104.94 36,983 4.99% 115.57 39,496 4.98% 123.43
Wages & Benefits 65,936 9.82% 206.05 87,087 11.76% 272.15 94,567 11.92% 295.52
Property Taxes 31,501 4.69% 98.44 31,681 4.28% 99.00 34,282 4.32% 107.13
Utilities 89,969 13.40% 281.15 98,742 13.33% 308.57 96,080 12.11% 300.25
---------------------------------------------------------------------------------------------------
Total Expenses $ 297,967 44.38% $ 931.15 $ 351,000 47.38% $ 1,096.88 $ 340,195 42.88% $ 1,063.11
Net Operating Income $ 373,482 55.62% $ 1,167.13 $ 389,769 52.62% $ 1,218.03 $ 453,152 57.12% $ 1,416.10
============================================================================================================================
<CAPTION>
============================================================
Pct. of $ Per
1999 Income Space
-----------------------------------------------------------
<S> <C> <C> <C>
Income:
Rents $874,420 98.66% $2,732.56
RV Rent - 0.00% -
Utility Income - 0.00% -
Miscellaneous/Other 11,842 1.34% 37.01
---------------------------------
Total Income $886,262 100.00% $2,769.57
Expenses:
Insurance 5,862 0.66% 18.32
Office 45,108 5.09% 140.96
Maintenance & Supplies 30,718 3.47% 95.99
Management Expense 44,313 5.00% 138.48
Wages & Benefits 101,836 11.49% 318.24
Property Taxes 38,087 4.30% 119.02
Utilities 95,485 10.77% 298.39
---------------------------------
Total Expenses $361,409 40.78% $1,129.40
Net Operating Income $524,853 59.22% $1,640.17
============================================================
</TABLE>
<PAGE>
Income Capitalization Approach 20
Operating Expense Analysis
--------------------------
Insurance: Historically, this expense has exhibited a decreasing trend. Our
---------
estimate of this expense has been stabilized based on the historical amounts, or
$20.00 per space per year. This is equal to $6,400 annually or approximately
0.69% of the effective gross income.
Administrative/Office: Historically, this expense has varied since 1997. In the
---------------------
financial statements, this expense does include some corporate expense items,
which we have not considered. We have stabilized our estimate of this expense at
$140.00 per space per year, which is equal to $44,800 or approximately 4.81% of
the estimated effective gross income.
Maintenance and Repair: Historically, this expense has varied. We have based
----------------------
our estimate on the indicated historical trend at $100.00 per space per year or
$32,000 annually, believed adequate to properly maintain the community. This
amount is equal to approximately 3.44% of the estimated effective gross income.
Management Fees: This expense typically includes off-site management, the
---------------
oversight of the on-site manager and monthly bookkeeping functions. We used a
rate of 5% of the effective gross income estimate, typical in the market place,
equal to $46,548 or $145.46 per space per year.
Wages and Benefits: Historically, this expense has steadily increased. We have
------------------
based our estimate on the historical data at $325.00 per space per year or
$104,000, which is equal to 11.17% of the estimated effective gross income.
Property Taxes: This category is project specific due to location. Based on our
--------------
analysis of the historical tax trends, we have estimated the tax liability to be
$39,850. This equates to $124.53 per space per year or approximately 4.28% of
the estimated effective gross income.
Utilities: The expense is expected to cover the cost of providing water, sewer
---------
and trash pick-up and the utility expense related to the common area. We have
utilized $300.00 per space. This is equal to $96,000, or approximately 10.31%
of the estimated effective gross income.
Reserves: This expense category represents the inclusion of set-asides for
--------
major recurring or capital type expenditures experienced periodically by any
property. We have used $25.00 per space per year, believed adequate to cover
future capital costs. This equates to $8,000 annually or 0.86% of (EGI).
Total Expenses: To summarize, we have stabilized total operating expenses for
--------------
the subject property at $377,598. This estimate is equal to 40.56% of the
Effective Gross Income (EGI) estimate or $1,180.00 per space per year. As
shown, expenses have historically ranged between 40.78% (1999) and 47.38%
(1998).
<PAGE>
Income Capitalization Approach 21
<TABLE>
<CAPTION>
================================================================================
Town & Country Manufactured Housing Community
Stabilized Operating Statement
% of $ per
Amount EGI Space
================================================================================
<S> <C> <C> <C>
Total Effective Gross Income $ 930,970 100.00% $ 2,909.28
Expenses
Insurance $ 6,400 0.69% $ 20.00
Office 44,800 4.81% 140.00
Maintenance & Repairs 32,000 3.44% 100.00
Management Expense 46,548 5.00% 145.46
Wages & Benefits 104,000 11.17% 325.00
Property Taxes 39,850 4.28% 124.53
Utilities 96,000 10.31% 300.00
Reserves 8,000 0.86% 25.00
------------------------------------
Total Expenses $ 377,598 40.56% $ 1,180.00
Net Operating Income $553,371 59.44% $ 1,729.28
================================================================================
</TABLE>
<PAGE>
Income Capitalization Approach 22
Selection of a Capitalization Rate
----------------------------------
Direct capitalization of terminal net operating income by an overall
capitalization rate extracted from the market provides an excellent indication
of market value. Purchasers of manufactured home communities most often utilize
this method. This method is easily understood, closely related to the market,
and convincing if the overall rates abstracted from recent sales are from
comparable sale properties and accurate income data are available.
Market Data
-----------
The comparable sale data indicated an overall capitalization rate between
8.22% and 10.30%. The data indicates a narrow range in overall capitalization
rates, which tend to be influenced by the size of the community, its occupancy,
expense ratio, age and condition, amenity package and location.
<TABLE>
<CAPTION>
======================================================================
Sale Sale Date Vacancy Rate Expense Ratio Overall Rate
----------------------------------------------------------------------
<S> <C> <C> <C>
1 February 1999 3.0% 32.2% 9.78%
----------------------------------------------------------------------
2 February 1999 7.0% 35.0% 9.00%
----------------------------------------------------------------------
3 December 1998 1.0% 29.5% 10.30%
----------------------------------------------------------------------
4 November 1997 0% 36.8% 10.00%
----------------------------------------------------------------------
5 July 1997 5.0% 35.0% 9.35%
======================================================================
</TABLE>
The comparable sale data represents recent sales of all age communities in
Arizona. The upper end of the indicated range is represented by sales that are
inferior in quality and amenities to the subject property. Sale Comparable
Numbers Two, Three and Five are also inferior in terms of condition to the
subject property. However, Sales Comparable Numbers 1 and 5 are situated in
superior residential areas and reflect reduced risk. Based on these
considerations, we have concluded an overall capitalization rate of 9.0%.
Debt Coverage Ratio Method
--------------------------
We have also developed an overall rate through the Debt Coverage Ratio
analysis. Current commercial lending policies indicate a mortgage loan of 75%
of market value, based on a 20-year amortization schedule at an annual interest
rate of 8.00%, which yields an annual mortgage constant of 10.037%. A minimum
debt coverage ratio (DCR) of 1.25 to 1.00 would likely be required for a
property similar to the subject. Based on these assumptions an overall
capitalization rate has been developed, as presented below:
<PAGE>
Income Capitalization Approach 23
<TABLE>
<CAPTION>
==========================================================================================
M F DCR OAR
X X =
Loan to Value Ratio Mortgage Constant Debt Coverage Ratio Overall Rate
------------------------------------------------------------------------------------------
<S> <C> <C> <C>
0.75 0.10037 1.25 0.09410
-------------------------------------------------------------------------------------------
Rounded 9.4%
===========================================================================================
</TABLE>
The Debt Coverage Ratio method indicated a capitalization rate based upon
financing by local banks. However, as the popularity of manufactured home
community investments has increased, alternate sources of financing have become
available through insurance companies and conduit programs.
The rate via the debt coverage ratio is supportive of the rate concluded
from the market data. Our estimate of the market value of the subject, indicated
by the Income Capitalization Approach, is calculated as follows:
<TABLE>
<CAPTION>
Net Operating Income Overall Capitalization Rate Market Value
<S> <C> <C>
$553,371 divided by 0.090 $6,148,568
Rounded $6,150,000
</TABLE>
<PAGE>
24
SALES COMPARISON APPROACH
-------------------------
The fundamental premise of the Sales Comparison Approach is the concept
that the analysis of sales of reasonably similar properties provides an
appraiser with empirical data from which observations and conclusions about the
property being appraised can be made. Proper application of the approach
requires that:
1. Only market transactions be weighed, and the data of each transaction
be confirmed to the greatest extent possible.
2. The degree of comparability of each sale to the subject be considered;
differences in physical, functional, and economic characteristics be
noted; and adjustments for the differences be made.
3. The value conclusion is consistent with the analysis of the sales
data.
So that a conclusion from the analysis of the sales data can be drawn, a
unit of comparison has been selected. Calculation of a unit of comparison
provides a common denominator by which the market sales can be related to each
other and to the subject property. The commonly accepted unit of comparison in
the valuation of manufactured home communities is the selling price per space.
While a diverse array of transactions was initially considered, the sales
selected for direct comparison to the subject are those transactions that are
most similar to the subject. For dissimilar features adjustments are made
indicating the price at which the subject could be expected to sell. In making
adjustments, all relevant factors were considered including:
1. Nature of surrounding development.
2. Size.
3. Availability of competing properties.
4. Effect of time on selling prices.
5. Age and condition of the improvements.
Based on our investigation, the following five sales of all age communities
are the most significant transactions for direct comparison with the subject.
<PAGE>
<TABLE>
<CAPTION>
Summary of Sale Comparables
===================================================================================================================================
No. Name Sale Price/ Total Price/ Average E.G.I.M./ O.A.R.
Address Sale Date Spaces/ Space Lot Rent Expense %
(Adj. For Cash Occupancy
Equivalency)
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 Mesa Dunes $9,500,000 451/ $21,064 $ 235.00 6.94/ 9.78%
7807 E. Main Street February 1999 97.0% 32.16%
Mesa, Maricopa County, Arizona
-----------------------------------------------------------------------------------------------------------------------------------
2 Cactus Garden $1,685,000 75/ $22,467 $ 200.00 7.22/ 9.0%
233 W. Irvington Place February 1999 93.0% 35.0%
Tucson, Pima County, Arizona
-----------------------------------------------------------------------------------------------------------------------------------
3 El Molina Mobile Home Park $1,675,000 103/ $16,262 $ 200.00 6.84/ 10.3%
1552 W. Miracle Mile December 1998 99% 29.5%
Tucson, Pima County, Arizona
-----------------------------------------------------------------------------------------------------------------------------------
4 Fiesta Village $3,500,000 172/ $20,349 $ 250.00 6.32/ 10.0%
235 W. Southern Avenue November 1997 100% 36.82%
Mesa, Maricopa County, Arizona
-----------------------------------------------------------------------------------------------------------------------------------
5 Westward Ho Mobile Home Park $2,150,000 113/ $19,027 $ 140.00 6.95/ 9.35%
3810 N. Romero Road July 1997 95.0% 35.0%
Tucson, Pima County, Arizona
===================================================================================================================================
</TABLE>
<PAGE>
Sales Comparison Approach 26
As previously stated, the Sales Comparison Approach involves investigating
recent transfers of properties similar to the subject. The properties, which
have been compared to the subject, have been discussed below:
Sale Comparable Number One is Mesa Dunes Mobile Home Park in Mesa, Arizona.
The all age community has 451 spaces and sold in February 1999 for $9,500,000,
or $21,064 per space. Based on an effective gross income of $1,368,869, the
EGIM was 6.94. The overall rate was 9.78%. The average lot rent at the time of
sale was approximately $235.00. The expenses represented approximately 32.16%
of the effective gross income. The community was 97.0% occupied at the time of
sale.
Sale Comparable Number Two is the Cactus Garden Mobile Home Park in Tucson,
Arizona. This 75-space all ages community sold for $1,685,000 and equates to a
sale price per space of $22,467. Based on an effective gross income of
$233,308, the EGIM was 7.22. The expenses represented approximately 35.0% of the
effective gross income and the indicated overall capitalization rate was 9.0%,
based on a net operating income of $151,650. This community was built in 1973
and was 93.0% occupied at the time of sale.
Sale Comparable Number Three is the El Molina Mobile Home Park in Tucson,
Arizona. The 103-space all age community sold for $1,675,000 in December 1998.
The cash equivalent price equates to a sale price per space of $16,262. Based
on an effective gross income of $244,728, the EGIM is 6.84. The indicated
overall capitalization rate was 10.3%, which would indicate a net operating
income of $172,525. The average lot rent at the time of sale was $200.00. The
park was 99.0% occupied at the time of sale.
Sale Comparable Number Four is Fiesta Village Mobile Home Park in Mesa,
Arizona. This 172-space all age community sold for a cash equivalent price of
$3,500,000 in November 1997. The price equates to a sale price per space of
$20,349. Based on an effective gross income of $554,000, the EGIM was 6.32.
The expenses represented 36.82% of the effective gross income and the indicated
overall capitalization rate was 10.0%, based on a net operating income of
$350,000. This community was 100% occupied at the time of sale.
Sale Comparable Number Five is the former Westward Ho Mobile Home Park in
Tucson, Arizona. This 113-space all age community sold for $2,150,000 in July
1997. The price equates to a sale price per space of $19,027. Based on an
effective gross income of $309,168, the EGIM was 6.95. The expenses were 35.0%
of the effective gross income and the indicated overall capitalization rate was
9.35%, based on a net operating income of $200,959. This community was 95.0%
occupied at the time of sale. The comparable is now a part of Continental West
manufactured housing community.
<PAGE>
Sales Comparison Approach 27
All of the sales were fee simple transactions, with no abnormal financing.
There were no abnormal sale conditions known to have occurred and all of the
sales represent transactions that have taken place over the last nine months,
having traded under similar market conditions.
Other adjustments, typically considered, are location, amenities, age and
condition, occupancy, etc., and are reflected in the average lot rent. A tenant
is typically willing, absent other factors, to pay more lot rent for a better
located, newer community. This also holds true for amenities, age and other
factors. The average lot rent reflects, in most cases, the market perception of
a property's position in the marketplace. It is also typical that lot rent
increases contribute to increases in net operating income. Alternatively, we
have employed the Effective Gross Income Multiplier (EGIM), in this analysis.
The Effective Gross Income Multiplier for the comparable sale properties
ranged between 6.32 and 7.22. As previously discussed, the EGIM is essentially
a function of the average lot rent. The average lot rent is a function of the
physical aspects of the property, such as age and condition, location and
amenities. EGIM's also reflect the market's perception of the potential for
future rent increases.
The subject is an all age community with a 5.0% physical vacancy. The
subject was observed to be in good condition and has a good location in near
Interstate 10 and Valencia Road in Tucson, Arizona. The comparables all had an
expense ratio lower than the subject, ranging from 29.5% to 35.0%. By
comparison, the subject has a forecast expense ratio of 40.56%. Based on these
considerations, we have concluded an EGIM in the lower end of the indicated
range, processing the subject's Effective Gross Income of $930,970 with an EGIM
of 6.3.
Thus $930,970 x 6.5 is $6,051,302
Rounded, $6,050,000
On a per space basis, this is equivalent to $18,906.
<PAGE>
28
FINAL ESTIMATE OF VALUE
-----------------------
The two approaches to value applied in the subject analysis yielded these
conclusions:
Income Capitalization Approach $6,150,000
Sales Comparison Approach $6,050,000
Depending on the circumstances of an appraisal, the two approaches to value
apply to various degrees. The income capitalization approach indicates the
amount at which a prudent investor might be interested in acquiring the
property. The sales comparison approach reflects demand and reasonable selling
price expectancy as evidenced by sales of similar properties.
In the reconciliation, we reviewed each approach to value (a) to ascertain
the reliability of the data and (b) to weight the approach that best represented
the actions of typical users and investors in the marketplace.
The income capitalization approach depends on the principles of
substitution and anticipation. This approach postulates that the value of a
property derives from the net income the property will produce during its
economic life. Investors in the market predicate their decisions on economic
factors oriented to the market and concern themselves with net income and its
durability. The income capitalization approach synthesizes the capitalized
return to and of the improvements and to the land. In the current instance, the
availability of sufficient reliable and supportable historical data for the
subject, made the income capitalization approach a reliable gage of the market
value of the subject.
The sales comparison approach uses a number of value indicators, both
physical and economic, including investors' strategies and attitudes reflected
in documented market transactions. The principle of substitution is the basis of
this approach, which states that a prudent investor will pay no more to buy a
property than the cost to buy a comparable substitute property. In the valuation
of the subject property, the sales comparison approach was considered reliable.
The two approaches reflect a narrow range of value. Our opinion of value
is based on the Income Approach, as buyers are most concerned with cash flow to
service debt. Our opinion of the market value of the subject, based on a
reasonable exposure period of six months, as of May 1, 2000 was:
- SIX MILLION ONE HUNDRED THOUSAND DOLLARS -
($6,100,000)
<PAGE>
29
CERTIFICATION
-------------
I certify that, to the best of my knowledge and belief:
. The statements of fact in this report are true and correct.
. The reported analyses, opinions, and conclusions are limited only by
the reported assumptions and limiting conditions and is my personal,
unbiased professional analyses, opinions, and conclusions.
. I have no present or prospective interest in the property that is the
subject of this report, and I have no personal interest or bias with
respect to the parties involved.
. My compensation is not contingent on the reporting of a predetermined
value or direction in value that favors the cause of the client, the
amount of the value estimate, the attainment of a stipulated result,
or the occurrence of a subsequent event.
. To the best of my knowledge and belief, the reported analyses,
opinions, and conclusions were developed and this report was prepared
in conformity with the Uniform Standards of Professional Appraisal
Practice of the Appraisal Foundation, the Code of Professional Ethics,
and the Standards of Professional Practice of the Appraisal Institute.
. The use of this report is subject to the requirements of the Appraisal
Institute relating to review by its duly authorized representatives.
. As of the date of this report, L. Drake Moore, MAI, CCIM has completed
the requirements under the continuing education program of the
Appraisal Institute.
. L. Drake Moore, MAI, CCIM has made a personal inspection of the
property that is the subject of this report.
. John H. Whitcomb, MAI, CCIM provided significant professional
assistance to the person signing this report.
. I am in compliance with the competency provisions of the Uniform
Standards of professional Appraisal Practice of the Appraisal
Foundation.
. This appraisal assignment was not based on a requested minimum value,
specific value, or the approval of a loan.
/s/ L. Drake Moore JAG
L. Drake Moore, MAI, CCIM
St. Cert. Gen. REA #TP40569
<PAGE>
30
ASSUMPTIONS AND LIMITING CONDITIONS
-----------------------------------
The primary assumptions and limiting conditions pertaining to the conclusion in
this report are summarized below.
To the best of our knowledge and belief, the statements of facts contained in
the appraisal report, upon which the analysis and conclusion expressed are
based, are true and correct. Information, estimates and opinions furnished to
us and contained in the report or utilized in the formation of the value
conclusion were obtained from sources considered reliable and believed to be
true and correct. However, no representation, liability or warranty for the
accuracy of such items is assumed by or imposed on us, and is subject to
corrections, errors, omissions and withdrawal without notice.
The legal description of the appraised property, as exhibited in the report is
assumed correct.
The valuation may not be used in conjunction with any other appraisal or study.
The value conclusion stated in this appraisal is based on the program of
utilization described in the report, and may not be separated into parts. The
appraisal was prepared solely for the purpose and party so identified in the
Purpose and Function of the Report. The appraisal report may not be reproduced,
in whole or in part, and the findings of the report may not be utilized by a
third party for any purpose, without the written consent of Whitcomb Real
Estate.
No change of any item in any of the appraisal report shall be made by anyone
other than Whitcomb Real Estate and we shall have no responsibility for any such
unauthorized change.
The property has been appraised as though free and clear of mortgages, liens,
leases, servitudes and encumbrances, except as may be described in the
appraisal.
We are not required to give testimony or to be in attendance at any court or
administrative proceeding with reference to the property appraised unless
additional compensation is agreed to and prior arrangements have been made.
Unless specifically stated, the value conclusion contained in the appraisal
applies to the real estate only, and does not include personal property,
machinery and equipment, trade fixtures, business value, goodwill or other non-
realty items. Income tax considerations have not been included or valued unless
so specified in the appraisal. We make no representations as to the value
changes which may be attributed to such considerations.
Neither all nor any part of the contents of the report shall be disseminated or
referred to the public through advertising, public relations, news or sales
media, or any other public means of communication or referenced in any
publication, including any private or public offerings including buy not limited
to those filed with Securities and Exchange Commission or other governmental
agency, without the prior written consent and approval of and review by Whitcomb
Real Estate.
<PAGE>
Assumptions and Limiting Conditions 31
In completing the appraisal, it is understood and agreed that the report are not
now intended, and will not be used in connection with a real estate syndication.
Good and marketable title to the interest being appraised is assumed. We are
not qualified to render an "opinion of title," and no responsibility is assumed
or accepted for matters of a legal nature affecting the property being
appraised. No formal investigation of legal title was made, and we render no
opinion as to ownership of the property or condition of its title.
Unless otherwise noted in the appraisal, it is assumed that there are no
encroachments, zoning, building, fire or safety code violations, or restrictions
of any type affecting the subject property. It is assumed that the property is
in full compliance with all applicable federal, state, local and private codes,
laws, consents, licenses and regulations, and that all licenses, permits,
certificates, approvals, franchises, etc. have been secured and can be freely
renewed and/or transferred to a purchaser.
It is assumed that the utilization of the land and any improvements are within
the boundaries or property lines of the property described, and that there are
no encroachments, easements, trespass, etc., unless noted within the report. We
have not made a survey of the property, and no responsibility is assumed
concerning any matter that may be disclosed by a proper survey. If a subsequent
survey should reflect a differing land area and/or frontages, we reserve the
right to review our final value estimate.
All maps, plats, building diagrams, site plans, floor plans, photographs, etc.
incorporated into the appraisal are for illustrative purposes only, to assist
the reader in visualizing the property, but are not guaranteed to be exact.
Dimensions and descriptions are based on public records and/or information
furnished by others, and is not meant for use as a reference in legal matters of
survey.
Management is assumed to be competent, and the ownership to be in responsible
hands. The quality of property management can have a direct effect on a
property's economic viability and value. The financial projection contained in
the appraisal assumes responsible ownership and competent management. Any
variance from this assumption could have a significant impact on the final value
estimate.
We assume that there are no hidden or unapparent conditions of the property's
soil, subsoil or structures, which would render them more or less valuable. No
responsibility is assumed for such conditions, or for engineering which might be
required to discover such factors. Detailed soil studies were not made
available to us, so statements regarding soil qualities, if made in the report,
are not conclusive but have been considered consistent with information
available to us and provided by others. In addition, unless stated otherwise in
the appraisal, the land and soil of the area under appraisement appears firm and
solid, but the appraisal does not warrant this condition.
The appraisal report covering the subject is limited to surface rights only, and
does not include any inherent subsurface or mineral rights.
The appraisal is made for valuation purposes only. It is not intended nor to be
construed to be an engineering report. We are not qualified as structural or
environmental engineers and we are not qualified to judge the structural and
environmental integrity of the improvements, if any. Consequently, no warranty,
representations or liability are assumed for the structural soundness, quality,
adequacy or capacities of said improvements and utility services, including the
construction materials, particularly the roof, foundations, and equipment,
including the HVAC systems, if applicable. Should there be any question
concerning them, it is strongly recommended that an Engineering, Construction,
and/or Environmental inspection be obtained.
<PAGE>
Assumptions and Limiting Conditions 32
The value estimate stated in this appraisal, unless otherwise noted, is
predicated on the assumption that all of the improvements, equipment and
building services, if any, are structurally sound and suffer no concealed or
latent defects or inadequacies other than those noted in the appraisal.
Any proposed construction or rehabilitation referred to in the appraisal report
is assumed to be completed within a reasonable time and in a workmanlike manner
according to or exceeding currently accepted standards of design and methods of
construction.
Any areas or inaccessible portions of the property or improvements not inspected
are assumed to be as reported or similar to the areas which are inspected.
Unless specifically stated in the report, we found no obvious evidence of insect
infestation or damage, dry or wet rot. Since a thorough inspection by a
competent inspector was not performed for us, the subject improvements, if any,
is assumed to be free of existing insect infestation, wet rot, dry rot, and any
structural damage which may have been caused by pre-existing infestation or rot
which was subsequently, treated.
In the appraisal assignment, the existence of potentially hazardous material
used in the construction, maintenance or servicing of the improvements, such as
the presence of urea-formaldehyde foam insulation, asbestos, lead paint, toxic
waste, underground tanks, radon and/or any other prohibited material or chemical
which may or may not be present on or in the subject property, was, unless
specifically indicated in the report, not observed by us, nor do we have any
knowledge of the existence of such materials on or in the property. We,
however, are not qualified to detect such substances. The existence of these
potentially hazardous materials may have a significant effect on the value of
the property. The client is urged to retain an expert in this field, if
desired. The value conclusion assumes the property is "clean" and free of any
of these adverse conditions unless notified to the contrary in writing.
No effort has been made to determine the possible effect, if any, on the subject
property of energy shortages or present or future federal, state or local
legislation, including any environmental or ecological matters or
interpretations thereof.
We take no responsibility for any events, conditions or circumstances affecting
the subject property or its value, that take place subsequent to either the
effective date of value cited in the appraisal or the date of our field
inspection, which ever occurs first.
The estimates of value stated in this appraisal apply only to the effective
dates of value stated in the report. Value is affected by many related and
unrelated economic conditions within a local, regional, national and/or
worldwide context, which might necessarily affect the prospective value of the
subject property. We assume no liability for an unforeseen change in the
economy, or at the subject property, if applicable.
We believe that the underlying assumptions and current conditions provide a
reasonable basis for the value estimate stated in this appraisal. However, some
assumptions or projections inevitably will not materialize and unanticipated
events and circumstances may occur during the forecast period. These could
include major changes in the economic environs; significant increases or
decreases in current mortgage interest rates and/or terms or availability of
financing altogether; property assessment; and/or major revisions in current
state and/or federal tax or regulatory laws. Therefore, the actual results
achieved during the projected holding period and investor requirements relative
to anticipated annual returns and overall yields could vary from the projection.
Thus, variations could be material and have an impact on the individual value
conclusion stated herein.
<PAGE>
Assumptions and Limiting Conditions 33
The Americans with Disabilities Act (ADA) became effective January 26, 1992.
The appraiser has not made a specific compliance survey and analysis of this
property to determine whether it is in conformity with the various detailed
requirements of the ADA. It is possible that a compliance survey of the
property, together with a detailed analysis of the requirements of the ADA,
could reveal that the property is not in compliance with one or more of the
requirements of the act. If so, this fact could have a negative effect upon the
value of the property. Since the appraiser has no direct evidence relating to
this issue, possible noncompliance with the requirements of ADA was not
considered in estimating the value of the property.
<PAGE>
ADDENDA
<PAGE>
LEGAL DESCRIPTION
<PAGE>
LEGAL DESCRIPTION
PARCEL 1
LOT 3 OF TRAILERANCHO ESTATES, A SUBDIVISION OF PIMA COUNTY, ARIZONA, ACCORDING
TO THE MAP OR PLAT THEREOF OF RECORD IN THE OFFICE OF THE COUNTY RECORDER OF
PIMA COUNTY, ARIZONA, IN BOOK 21 OF MAPS AND PLATS AT PAGE 49 THEREOF.
PARCEL 2
ALL THAT PORTION OF SECTION 10, TOWNSHIP 15 SOUTH, RANGE 14 EAST, GILA AND SALT
RIVER BASE AND MERIDIAN, PIMA COUNTY, ARIZONA, LYING BETWEEN LOTS 1 AND 2 OF
TRAILERANCHO ESTATES, A SUBDIVISION OF PIMA COUNTY, ARIZONA, ACCORDING TO THE
MAP OR PLAT THEREOF OF RECORD IN THE OFFICE OF THE COUNTY RECORDER OF PIMA
COUNTY, ARIZONA, IN BOOK 21 OF MAPS AND PLATS AT PAGE 49 THEREOF, AND SOUTH OF
THE TUCSON-BENSON HIGHWAY.
If an Event has occurred, Lender shall notify Borrower in writing at the address
set forth above of said Event, except
<PAGE>
MAPS
<PAGE>
[AREA MAP APPEARS HERE]
<PAGE>
[NEIGHBORHOOD MAP APPEARS HERE]
<PAGE>
[RENT COMPARABLE LOCATION MAP APPEARS HERE]
<PAGE>
[SALE COMPARABLE LOCATION MAP APPEARS HERE]
<PAGE>
PROFILE OF APPRAISER
<PAGE>
PROFILE OF APPRAISER
L. DRAKE MOORE, MAI
St. Cert. Gen. REA #1321098-G
REAL ESTATE EXPERIENCE
----------------------
Appraiser
Whitcomb Real Estate
Tampa, FL
Specialize in complex real estate valuations and consulting projects.
Property types include manufactured home communities, recreational vehicle
parks, self-storage facilities, hotels, manufacturing plants, office
buildings, retail buildings and other types of commercial establishments as
well as special use facilities. Mr. Moore has also owned and operated the
L.D. Moore Company, a commercial appraisal firm in Dallas, Texas since 1991.
Senior Appraiser/Manager
Marshall and Stevens, Inc.
Dallas, TX and Tampa, FL
Specialized in preparing appraisals for land and buildings in industrial,
commercial and residential uses. Performed appraisals for purposes of
sale/purchase, property tax appeals, syndication, financing and allocation
of purchase price. December 1988 to September 1990.
Appraiser
Appraisal & Acquisition, Inc.
Lakeworth, Florida
Prepared appraisals on hotels and other commercial properties for purposes
of sale/purchase, property tax appeals, financing and allocation of purchase
price. September 1987 to December 1988.
Appraiser
Laventhol & Horwath
Dallas, Texas
Specialized in preparation of appraisals on hotel and commercial properties.
Performed appraisals for purposes of sale/purchase, financing and allocation
of purchase price. September 1985 to September 1987.
<PAGE>
Profile of the Appraiser
BANKING EXPERIENCE
------------------
Vice President
BF Saul Mortgage Company
Arlington, Texas
Managed branch office and originated non-confirming single-family mortgages
in addition to investor and commercial mortgages loans for BF Saul and
Chevy Chase Savings. March 1983 to 1985.
PROFESSIONAL AFFILIATIONS
-------------------------
MAI, Member Appraisal Institute
State Certified General Real Estate Appraiser
Florida #0002401
Georgia #004008
Texas #1321098-G
Real Estate Broker License
Florida #0512812
Texas #0283892
PARTIAL LIST OF CLIENTS AND PROPERTIES
--------------------------------------
Apartments
----------
Candlelight Lenexa, KS Oaktree Square Grandview, MS
Cedars Irving, Texas Pineridge Arlington, TX
Claridge Dallas, TX Regency Cove Tampa, FL
Elmwood West Palm Beach, FL Parkwood Broken Arrow, OK
Hunters Glen Kansas City, KS Santa Fe Village Kansas City, MS
Monticeto Austin, TX Towne Oaks Austin, TX
Manufactured Home Communities and Recreational Vehicle Parks
------------------------------------------------------------
Aberdeen Ormond Beach, FL Oak Hills Kyle, TX
Aztec Kyle, Texas Ramblewood Barnwell, SC
Boulevard Estates Pasadena, TX Regency Cove Tampa, FL
Casa del Monte West Palm Beach, FL Rolling Meadows Columbia, SC
Carolina Village Concorde, NC Rose Bay Port Orange, FL
Denton West Denton, TX Tropic Isles Palmetto, FL
Dessau Austin, TX Victoria Lakes Lexington, SC
<PAGE>
Profile of Appraiser
<TABLE>
<S> <C> <C> <C>
Hacienda Village New Port Richey, FL Villa del Sol Bradenton, FL
Hermitage Farms Camden, SC Windsor City Sumter, SC
Self-Storage Facilities
-----------------------
American Self Storage Charlotte, NC American Self Storage Ocala, FL
American Self Storage Monroe, NC Extra Closet Ft Lauderdale, FL
American Self Storage Newel, NC
American Self Storage Stallings, NC
Hotels/Resorts
--------------
114-Room Ambassador Plaza, Dallas, TX
420-Room Excelsior Hotel, Little Rock, AR
121-Room Lexington Park Suites, Memphis, TN
160-Room Ramada Inn, Kingsland, GA
71-Room Best Western, Guymon, OK
Office Buildings
----------------
AMI Medical Houston, TX Medical Park Hope, AR
Barnett Bank North Palm Beach, FL Okeechobee Commerce W Palm Beach, FL
Carteret Savings Del Ray Beach, FL United Bank Roswell, NM
Enron Houston, TX Schindler Corporate Morris, NJ
Harolds Dallas, TX Texarkana Medical Arts Texarkana, TX
First South Little Rock, AR QVC Network Plymouth, MN
First Union Atlanta, GA
Industrial
----------
American Lantern McKenzie, TN Falco Lime Boca Raton, FL
American Lantern Newport, AR High Ridge Commerce Boynton Beach, FL
Campbell Soup Paris, TX John Rust Albuquerque, NM
Carrington Irving, TX Lake Pointe Centre Boca Raton, FL
</TABLE>
<PAGE>
Profile of Appraiser
Clients List
------------
Bank of America Heller Financial
Barnett Bank Heron Financial
Belgravia Capital Hewlett Packard
Circuit City Internal Revenue Service
Citicorp Real Estate Lexington Hotel
Collateral Mortgage Lincoln Property
CoreStates Financial Corporation NationsBank
Credit Suisse First Boston Nomura Securities
FINOVA Capital Meyers Group (The)
First Union Corporation National Realty Advisors
GE Capital PA Holdings/Whitman Corporation
Goldman Sachs QVC
Greentree Financial Sullivan Development
EDUCATIONAL BACKGROUND
----------------------
University of Texas, B.A.
American Institute of Real Estate Appraisers
The Appraisal Institute
Commercial Investment Real Estate Institute
<PAGE>
================================================================================
State of Arizona
Board of Appraisal
BE IT KNOWN THAT
LAWRENCE D. MOORE
HAS MET ALL THE REQUIREMENTS AS A
TEMPORARY
Certified General Real Estate Appraiser
[SEAL]
<TABLE>
<S> <C>
In accordance with Arizona Revised Statutes In witness whereof the Arizona Board of Appraisal
and on authority of the Board of Appraisal, State caused to be signed by the Chair of the Board
of Arizona. and the Executive Director
This certificate shall remain evidence thereof
unless or until the same is suspended, revoked
or expires in accordance with the provisions of
law. /s/ [ILLEGIBLE] 9-8-99
------------------------------------------------------------
CERTIFICATE NUMBER Chair, Board of Appraisal Date
TP40569
EXPIRATION DATE /s/ [ILLEGIBLE] 9-8-99
------------------------------------------------------------
SEPTEMBER 8, 2000 Executive Director of the Board of Appraisal Date
</TABLE>
SHALL REMAIN PROPERTY OF ARIZONA BOARD OF APPRAISAL
================================================================================
<PAGE>
PROFILE OF APPRAISER
JOHN H. WHITCOMB, MAI, CCIM
St.Cert. Gen. REA #0001234
REAL ESTATE EXPERIENCE
----------------------
Owner
Whitcomb Real Estate
Tampa, FL
Specialize in complex real estate valuations and consulting projects.
Property types include manufactured home communities, recreational vehicle
parks, self-storage facilities, hotels, manufacturing plants, office
buildings, retail buildings and other types of commercial establishments as
well as special use facilities. Mr. Whitcomb is active in the ownership and
management of seven manufactured home communities throughout Florida.
January 1996 to present.
Partner
Chartwell Advisory Group, Ltd.
Tampa, FL
Supervised complex real estate valuations and property tax consulting
projects. Responsibilities included management of all technical staff
members throughout the country. Property types included manufactured home
communities, recreational vehicle parks, hotels, large manufacturing plants,
office buildings and retail buildings. April 1993 to January 1996.
Senior Appraiser
Marshall and Stevens, Inc.
Philadelphia, PA and Tampa, FL
Specialized in preparing appraisals for land and buildings in industrial,
commercial and residential uses. Performed appraisals for purposes of
sale/purchase, property tax appeals, syndication, financing and allocation
of purchase price. September 1985 to March 1990, and June 1992 to April
1993.
Vice President
Strategis Asset Valuation & Management, Inc.
Tampa, FL
Prepared appraisals and feasibility studies on complex commercial
properties. Performed appraisals for purposes of sale/purchase, property tax
appeals, financing and allocation of purchase price. March 1990 to May 1992.
<PAGE>
Profile of Appraiser 2
PROFESSIONAL AFFILIATIONS
-------------------------
MAI, Member Appraisal Institute
CCIM, Certified Commercial Investment Member Commercial Investment Real Estate
Institute
State Certified General Real Estate Appraiser
Florida #0001234
PARTIAL LIST OF CLIENTS AND PROPERTIES
--------------------------------------
Manufactured Home Communities
-----------------------------
<TABLE>
<S> <C> <C> <C>
Akers Away West Palm Beach, FL Lakeside Douglasville, GA
Alafia Riverfront Gibsonton, FL Lakewood Denton, TX
Alpine Village Sebring, FL Lantana Cascade Lantana, FL
Arbor Oaks Zephyrhills, FL Long Lake Village West Palm Beach, FL
Blue Heron Clearwater, FL Marlboro Court West Palm Beach, FL
Bradenton Trailer Park Bradenton, FL MH Country Club Oakland Park, FL
Carefree Village Tampa, FL Mission El Paso, TX
Carolina Village Concord, NC Moultrie Oaks St. Augustine, FL
Casa del Monte West Palm Beach,FL Oak Point Titusville, FL
Chateau Forest Seffner, FL Orange Manor East Winter Haven, FL
Chateau Village Bradenton, FL Palm Breezes Club Lantana, FL
Cloverleaf Brooksville, FL Palm Ridge Leesburg, FL
Colonial Coach Greenacres City, FL Panama City Estates Panama City, FL
Coquina Crossing St. Augustine, FL Plantation Estates Seffner, FL
Coral Lake Coconut Creek, FL Portside Jacksonville, FL
Country Club Estates Venice, FL Ridgecrest Fort Pierce, FL
Dessau Austin, TX San Souci North Fort Myers, FL
Foxcroft Village Loch Sheldrake, NY Scenic View Lakeland, FL
Foxwood Estates Lakeland, FL Seminole St. Petersburg, FL
Franklin Estates Murfreesboro, TN Shangri La Largo, FL
Gardens of Manatee Parrish, FL Southwinds Lakeland, FL
A Garden Walk West Palm Beach, FL St. Lucie Village Okeechobee, FL
The Groves Orlando, Fl Sunrise Village Cocoa Beach, FL
Gwinnett Estates Snellville, GA Sunshine Lake Worth, FL
Harmony Ranch Thornotosassa, FL Tall Pines Fort Pierce, FL
Holiday Ranch West Palm Beach, FL Tara Jonesboro, GA
Holiday Plaza West Palm Beach, FL Twin Shores Longboat Key, FL
Holland Fort Lauderdale, FL Valley Pines El Paso, TX
Kings and Queens Lakeland, FL Village Glen Melbourne, FL
</TABLE>
<PAGE>
Profile of Appraiser 3
<TABLE>
<CAPTION>
Recreational Vehicle Parks
--------------------------
<S> <C> <C> <C>
Avalon RV Park Clearwater, FL Pioneer Creek Bowling Green, FL
Camp Inn Frostproof, FL Rainbow Village Clearwater, FL
Forest Lake Village Zephyrhills, FL Space Coast RV Resort Rockledge, FL
Hide Away Ruskin, FL Sunshine RV Vero Beach, FL
Holiday RV Resort Leesburg, FL Topics Hudson, FL
Horizon RV Park Davenport, FL Twelve Oaks Sanford, FL
Key RV Park Marathon, FL Village Park Orange City, FL
Self-Storage Facilities
-----------------------
Affordable Self Storage Loganville, GA Orange Avenue Tallahassee, FL
Alpine Self Storage Rockford, IL Plantation Xtra Storage Plantation, FL
Baytree Self Storage Valdosta, GA St. Augustine Self Storage St. Augustine, FL
Budget Self Storage Sterling, VA Southern Self Storage Riviera Beach, FL
Delray Mini Storage Delray Beach, FL Storage Express Lauderhill, FL
Edison Lock Up Edison, NJ Valdosta Self Storage Valdosta, GA
Extra Space Lauderhill, FL Xtra Space Orlando, FL
Howell Self Storage Howell, NJ Your Extra Attic Duluth, GA
Hyde Park Storage Tampa, FL Your Extra Attic Norcross, GA
Jacksonville Storage Jacksonville, FL Your Extra Attic Stockbridge, GA
Okeechobee Storage Hialeah Gardens, FL Your Extra Attic Winters Chapel, GA
Hotels/Resorts
--------------
Canyon Ranch in the Berkshires Howard Johnson Maingate
Comfort Inn Kissimmee Hyatt On Union Square
Comfort Suites Asheville Hyatt Orlando
Embassy Suites Boca Raton Hyatt Wilshire
Hotel Nikko San Francisco Hyatt Regency Houston
Hilton Southwest Freeway Houston La Samanna
Hollywood Beach Hilton Ramada Resort Maingate
Holiday Inn Gainesville Westin Washington, D. C.
</TABLE>
<PAGE>
Profile of Appraiser 4
Financial
---------
Belgravia Capital Heller Financial
Bloomfield Acceptance Company Household Finance Corporation
Chase Manhattan Bank Irving Leasing Corporation
Chrysler Capital Corporation Mfd. Housing Community Bankers
Citicorp Real Estate Mellon Bank
Collateral Mortgage Morgan Stanley
CoreStates Financial Corporation NationsBank
Credit Suisse First Boston Nomura Securities
FINOVA Capital Pacificorp Financial Services
First Union Corporation PACTEL Finance
GE Capital Society National Bank
Goldman Sachs Sun America Insurance
Greentree Financial Union Capital
Real Estate/Real Estate Investment
----------------------------------
W.P. Carey & Company, Inc. LaSalle Partners
Chateau Communities Las Colinas Corporation
Continental Communities Metropolitan Life
Delaware North Companies MHC
Dillion Read Real Estate Inc. National Home Communities
Drexel Burnham Lambert Realty, Inc. Pitney Bowes Credit Corp.
First Boston Corporation Salomon Brothers, Inc.
EDUCATIONAL BACKGROUND
----------------------
University of Florida, B.A.
College of William and Mary, M.B.A.
American Institute of Real Estate Appraisers
The Appraisal Institute
Commercial Investment Real Estate Institute
PUBLICATIONS
------------
Mr. Whitcomb has authored an article on ad valorem taxes and cogeneration
facilities for Cogeneration and Resource Recovery magazine.
----------------------------------
TESTIMONY
---------
Mr. Whitcomb has presented expert testimony in United States Tax Court.
