<PAGE>
Exhibit (c)(1)(A)
SELF-CONTAINED
REAL ESTATE APPRAISAL REPORT
103 Space - Lakeside
Manufactured Housing Community
3291 Bankhead Highway
Douglas County, Georgia
PREPARED FOR
Mr. Bill Petak
SunAmerica Life Insurance Company
Anchor National Life Insurance Company
First SunAmerica Life Insurance Company
American International Life Assurance Company of New York
AIG Life Insurance Company
1 SunAmerica Center - 38/th/ Floor
Los Angeles, CA 90067
AS OF
April 18, 2000
PREPARED BY
WHITCOMB REAL ESTATE
<PAGE>
Whitcomb
_______ _______
Real Estate
May 5, 2000
Mr. Bill Petak
SunAmerica Life Insurance Company
Anchor National Life Insurance Company
First SunAmerica Life Insurance Company
American International Life Assurance Company of New York
AIG Life Insurance Company
1 SunAmerica Center - 38/th/ Floor
Los Angeles, CA 90067
RE: 103 Space - Lakeside
Manufactured Housing Community
3291 Bankhead Highway
Douglas County, Georgia
Dear Mr. Petak:
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 June 1, 1999, based on an exposure period of six months, to be:
- ONE MILLION SIX HUNDRED SIXTY THOUSAND DOLLARS -
($1,660,000)
Our value estimate applies to the land as physically constituted and to
the improvements actually in existence. Our value estimate 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.
The subject is a 103-space, all-age manufactured housing community. The
subject base rent is currently $224.00 per lot, per month. The rent was
increased $15.00 per month April 1, 2000. The physical occupancy at the subject
is currently 96.1%.
<PAGE>
Mr. Bill Petak
May 5, 2000
Page 2
This 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, the Financial
Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA) and
Collateral Mortgage Company's Appraisal Guidelines.
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 and would like
to thank you for the help and information you provided. If you have any
questions, please feel free to contact us.
Very truly yours,
WHITCOMB REAL ESTATE
/s/ L. Drake Moore
L. Drake Moore, MAI
REA #004008
<PAGE>
4
TABLE OF CONTENTS
<TABLE>
<S> <C>
Title Page
Transmittal
Table of Contents.............................................................. 4
INTRODUCTORY SECTION.......................................................... 5
Photographs of the Subject.................................................... 6
Summary of Facts and Conclusions.............................................. 8
Scope of the Assignment....................................................... 9
Purpose and Function of the Report............................................ 11
Appraisal Definitions......................................................... 11
Effective Date of Value....................................................... 12
Date of Inspection............................................................ 12
DESCRIPTIVE SECTION........................................................... 13
Area Description.............................................................. 14
Neighborhood Description...................................................... 19
Manufactured Housing Community Market Overview................................ 23
Land and Site Improvements.................................................... 32
Improvement Description....................................................... 35
Ownership and Property History................................................ 37
Occupancy..................................................................... 37
Zoning and Land Use Controls.................................................. 38
Assessment and Taxes.......................................................... 39
Marketability and Exposure Period............................................. 40
VALUATION SECTION............................................................. 42
Highest and Best Use.......................................................... 43
Valuation Process............................................................. 48
Income Capitalization Approach................................................ 49
Sales Comparison Approach..................................................... 66
Final Estimate of Value....................................................... 83
Certification................................................................. 84
Assumptions and Limiting Conditions........................................... 85
ADDENDA....................................................................... 89
Legal Description
Profile of Appraiser
</TABLE>
<PAGE>
INTRODUCTORY SECTION
<PAGE>
6
PHOTOGRAPHS OF SUBJECT (Taken April 18, 2000)
[PHOTOGRAPH APPEARS HERE]
View of Entry
[PHOTOGRAPH APPEARS HERE]
Typical Interior Street Scene
<PAGE>
7
PHOTOGRAPHS OF SUBJECT (Taken April 18, 2000)
[PHOTOGRAPH APPEARS HERE]
View Of Wastewater Plant
[PHOTOGRAPH APPEARS HERE]
Typical Interior Street Scene
<PAGE>
8
SUMMARY OF FACTS AND CONCLUSIONS
--------------------------------
Property Appraised: 103 Space - Lakeside
-------------------
Manufactured Housing Community
3291 Bankhead Highway
Douglas County, Georgia
Property Rights Appraised: Fee Simple Interest, subject to tenant leases
--------------------------
Land Area: 31.4080 gross acres
----------
Improvements: 103 manufactured housing spaces. The development
-------------
has no amenities.
Owner: Windsor Park Properties 5
------
Zoning: R-8, Mobile Home Park by Douglas County
-------
Highest and Best Use: As Vacant: Hold for future development as predicated
---------------------
by market demand.
As Improved: Current use (Manufactured Housing
Community)
Value Indications: Income Approach $1,680,000
------------------
Sales Comparison Approach $1,500,000
Final Estimate of Value: $1,660,000
------------------------
Date of Appraisal: April 18, 2000
------------------
Date of Inspection: April 18, 2000
-------------------
<PAGE>
9
SCOPE OF THE ASSIGNMENT
-----------------------
This assignment encompasses providing an "as is" market value of the
fee simple property rights, subject to tenant leases. The subject is a 103-space
manufactured housing community, known as Lakeside Mobile Home Park, located in
Douglas County, Georgia. The date of the valuation is April 18, 2000.
The first step in the analysis is to develop a concise statement or
definition of the appraisal assignment. This sets the limits of the analysis and
eliminates any ambiguity about the nature of the assignment. This is
accomplished by: 1) identifying the real estate being analyzed, 2) stating the
effective date of value, 3) stating the purpose and use (function) of the
analysis, 4) defining market value, 5) defining and identifying the property
rights to be valued, and 6) stating the assumptions and limiting conditions
applicable to the conclusions.
After defining and accepting the assignment, the preliminary analysis,
which was previously formulated in order to determine the character and extent
of the proposed assignment, is reviewed and refined. The preliminary analysis
also determines the amount of work that will be required to gather the necessary
data. This analysis and work plan are dependent upon the character of the
assignment and the type of property being analyzed. The next step is to make a
physical inspection of the subject, which was accomplished on April 18, 2000,
and its environs, including the gathering of general and specific data.
General data consists of information on the principles, forces and
factors that affect marketability and property value. This information includes
regional and neighborhood trends, as well as social, economic, governmental and
environmental forces that could or may have an effect on the subject's
marketability and value. This general data contributes significantly to the
understanding of the marketplace. Area data for Douglas County and the subject's
immediate neighborhood was obtained from a number of published sources that are
appropriately cited in the report. Based on the data produced through the
research of the general area and neighborhood the initial searches for market
data were extended back to January 1997. As there was adequate data from which
to evaluate the subject property, during that time period, the search was not
further extended or otherwise modified.
Specific data relates to the property being appraised, including a
detailed description of both the parcel comprising the subject site and the
subject's existing site improvements, based upon the physical inspection of the
premises and the neighborhood, together with various documents and drawings
obtained from the owner, management and public services; as well as current and
recent changes in ownership of the subject, occupancy, zoning and land use
regulations affecting the subject, and assessment and real estate tax
information applicable to the subject, obtained from the appropriate
governmental agencies. The gathering of specific data also relates, as may be
applicable, to the comparable land sales, improved sales and rentals selected.
The majority of the market transactions were originally researched through the
TRW
<PAGE>
10
Scope of the Assignment
REDI subscription services, which were then visually inspected and verified with
a principle of the transaction, a broker or agent involved in the transaction
and through public records.
In addition to the physical data, locational and income and expense
information for the subject and, as available, for the comparable sales and
rentals was utilized. Also considered are financing arrangements and/or unusual
motivations of either buyer or seller that could or did affect selling prices or
rentals.
An integral part of the valuation process for the property is the
determination of the highest and best use of the subject site: 1) as if vacant,
and 2) as currently improved. The latter analysis is useful in identifying
comparable properties, and determining whether the existing improvements should
be retained, renovated or demolished. The land value estimate, as if vacant, is
required when the land's contribution to total property value is sought, or when
improvements are valued separately, as in the Cost Approach.
After determining the subject site's highest and best use and gathering
the necessary data, we integrate the information drawn from the market research
and analysis of data and consider the application of the three valuation
approaches - the Income Capitalization Approach, the Sales Comparison Approach
and the Cost Approach - in order to derive a well-supported value estimate of
the fee simple interest. Although the three approaches are interrelated, the
property type and use will determine which approach or approaches are most
appropriate. Upon completion of the applicable approaches, we reconcile the
value conclusions derived in order to provide a final value estimate.
<PAGE>
11
PURPOSE AND FUNCTION OF THE REPORT
----------------------------------
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 the date of inspection, April 18, 2000.
The information, opinions, and conclusions contained in this report
have been prepared as a basis for mortgage financing.
APPRAISAL DEFINITIONS
---------------------
Market Value, as defined by the Office of the Comptroller of the
Currency is:
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
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 acting
in what they consider their own best interests;
- 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.
Fee Simple Interest is defined as the absolute ownership unencumbered
by any other interest or estate subject only to the four powers of
government./1/
______________
/1/ The Dictionary of Real Estate Appraisal, Third Edition, Appraisal
Institute, 1993.
<PAGE>
12
PROPERTY RIGHTS APPRAISED
-------------------------
The real estate interest appraised is that of ownership in fee simple
interest, subject to existing tenant leases, and the property is appraised as if
free and clear of mortgages, liens, servitudes and encumbrances, except those
noted in the body of this appraisal.
EFFECTIVE DATE OF VALUE
-----------------------
The effective date of our value is April 18, 2000, consistent with our
date of inspection.
DATE OF INSPECTION
------------------
L. Drake Moore, MAI inspected the property on April 18, 2000.
<PAGE>
DESCRIPTIVE SECTION
<PAGE>
14
AREA DESCRIPTION
----------------
Introduction
------------
The economic vitality of the surrounding area and the immediate
neighborhood encompassing the subject property is an important consideration in
estimating demand and future cash flow potential of a particular property. The
regional analysis usually focuses on the social, economic, governmental and
environmental forces that effect real estate.
Definition of the Region
------------------------
The Atlanta Region consists of 18 counties. The subject is in Coweta
County. Atlanta is the largest incorporated area in the Atlanta Region. The city
limits of Atlanta are located mostly within Fulton County, but there is a small
section extending into neighboring DeKalb County. The subject is located 15
miles west of downtown Atlanta.
Overview of the Atlanta Region
------------------------------
Atlanta is a major financial and corporate center for the entire
southeastern United States. Its relatively low cost of living, mild climate,
excellent transportation facilities, and a variety of educational and
recreational facilities have contributed to its attractiveness as a place to
live. The metropolitan area has been successful at attracting corporate
relocations to the area. It also continues to be the city of choice for many
start-up companies in a variety of service and manufacturing industries. Atlanta
was the site of the 1994 Super Bowl and the 1996 Summer Olympic Games.
Overview of Atlanta Real Estate Market
--------------------------------------
During the first half of the current decade, the primary objective of
many participants in the Atlanta commercial real estate market was survival as
the metro area struggled through the effects of the national recession which
also effected most major markets throughout the United States. The survivors now
appear to be enjoying an Atlanta marketplace that has strongly recovered. The
primary sectors of ft commercial real market: office, industrial, apartments,
and retail all experienced an oversupply during the 1930s. However, during the
first part of the decade, demand exceeded additions to supply and, as a result,
both occupancies and rents have increased.
A number of factors have contributed to the Atlanta commercial real
estate market's resurgence:
. The recovery of the nation's economy.
. Activity generated by the 1996 Olympic Games.
. The mature and well-developed metropolitan transportation infrastructure
which includes:
. The strategic location at the junction of three interstate highways.
. Hartsfield International Airport which is one of the nation's busiest and
has recently completed a $306 million concourse to service international
air traffic.
<PAGE>
15
Area Description
. The Metropolitan Atlanta Rapid Transit Authority (MARTA) rail system which
was established in 1988 and now connects the downtown business area and the
airport to suburban office and residential locations.
. Diverse job base anchored by services, retail trade, government and
manufacturing employment.
The above factors are market fundamentals that do not completely
insulate the Atlanta area from periodic slumps in the national economy but
generally serve to mitigate their effects. Atlanta's employment diversification
has also proved to be attractive to many real estate investors. A number of
recent surveys have chosen Atlanta as one of the more popular business and
residential locations in the United States.
Population
----------
During the early to mid-1970s, the City of Atlanta experienced
substantial out-migration of population to the suburban areas, creating dramatic
new suburban residential and commercial retail development. The primary
directions of growth were northwest and northeast into the suburban counties of
Cobb, Gwinnett and DeKalb.
While the population of the metropolitan area was increasing rapidly,
the City of Atlanta actually showed a 14.0 percent population decrease during
the decade of the 1970s. Since 1980, the city's population has stabilized and
may have even increased slightly. The suburban development trend has continued
with many outlying areas now offering their own infrastructures.
The previous chart is based on demographic statistics and estimates
prepared by National Decision Systems (NDS). Some important points are: the
population of the MSA has grown at a more rapid pace than either the State or
Nation as a whole since 1980, and this trend is expected to continue for the
next three to five years.
Households
----------
Growth in households is important to both office and retail properties.
The previous chart shows the MSA also experienced more rapid household growth
than either the State or Nation as a whole since 1980 and this trend is expected
to continue for the next three to five years.
Economic Base and General Conditions
------------------------------------
The composition of Atlanta's labor force is diverse and not dominated
by manufacturing or any one industry group. The trade and services sectors of
the economy employ about 55% of the work force in the metropolitan area. A
summary of Atlanta's employment characteristics is as follows:
. The labor force has grown by about 16 percent, in aggregate, since 1990.
<PAGE>
16
Area Description
. The November, 1997, unemployment rate for the MSA was about 3.3 percent
which is lower than the 3.5 percent for the State.
. The unemployment rate for the Atlanta area has consistently been lower than
experienced by the State as a whole since I 990.
. Job growth during the latter part of the 1980s exhibited a declining trend
and was negative in 1991. However, since 1991, this trend has reversed. In
1993 through 1995, job growth was estimated at 85,300, 96,800, and 77,900,
respectively. The Georgia State University Economic Forecasting Center
(EFC) estimated that the Atlanta regional economy created slower but still
impressive levels of job growth in 1996 of about 76,000.
Directions of Growth
--------------------
The primary directions of growth for the Atlanta area are generally
considered to be in the 1-75 and 1-85 corridors both north and south of 1-285.
Although the subject property is situated in one of the primary directions of
growth for the metropolitan area, the tremendous growth has not stretched this
far as yet.
Immediate Neighborhood
----------------------
The subject neighborhood is located south of Atlanta along Interstate
85. The subject is located in the northwest quadrant of the intersection of
Interstate 85 and Collinsworth Road. This area is generally rural in nature,
which contributes to its desirability for housing. There are large tracts of
vacant land nearby, but new development seems unlikely in the immediate future.
Schools and shopping are located within a 20-minute drive. A competing
manufactured housing community is located adjacent to the property.
Conclusion
----------
Atlanta has seen a resurgence in job growth, approaching the experience
of the mid- 1980s. The economy is driven by job growth which is generated by the
airport, transportation infrastructure, and the desirable business climate.
This, along with other factors, has translated into a healthy demand for
industrial, retail and office space. The overall improvement of the Atlanta
economy, together with the 1996 Olympic Games, have led to improvements in all
segments of demand.
Some recent positive and negative factors impacting Atlanta's economy
are:
Negatives
. Metro Atlanta failed air quality standards set by the Clean Air Act which
has led to Federal restrictions and potential loss of road building funds.
. Georgia Pacific is in the process of an early retirement program to
eliminate about 1,400 jobs including about 160 in Atlanta.
<PAGE>
17
Area Description
Positives
---------
. The 1996 Summer Olympic Games were the largest in history, attracting about
10,000 athletes and sold about 9 million tickets. The Olympics were
completed with a slight profit, a portion of which will be used to
construct a permanent museum at Centennial Olympic Park.
. A $213 million sports arena has been approved on the site of the Omni
Coliseum by the Fulton County Commission and the Atlanta City Commission so
the Atlanta Hawks professional basketball team will stay in the downtown
area.
. First Data Corporation (FDC), a Fortune 500 firm, is in the process of a
staged relocation of its corporate headquarters from New Jersey to Atlanta.
About 10% of FDC's 37,000 employees now work in the metro area.
. Lockheed Martin recently won a $700+/-million contract from the Australian
Air Force to build12 C- 1 30 transport planes.
. General Motors started producing vans at its Doraville assembly plant in
June 1996, after spending two years retooling the plant. Employment at the
plant has now grown to about 3,300 jobs.
. Local companies like SunTrust Bank, Delta Airlines, and Norfolk Southern
have recently announced significant hiring plans.
All of these factors result in Atlanta having one of the most vibrant
regional economies in the United States. The economy, driven by job growth at
impressive levels, is currently favored by most real estate investor groups- It
is therefore probable that Atlanta is likely to remain at the forefront of
favored real estate investment locations for at least the next three to five
years
<PAGE>
Area Map
[MAP APPEARS HERE]
<PAGE>
19
NEIGHBORHOOD DESCRIPTION
------------------------
A neighborhood is defined as a portion of a larger community, or an
entire community, containing a homogeneous group of inhabitants, buildings, or
business enterprises.
Social Factors and Trends
-------------------------
Douglas County had a 1990 population of approximately 71,800 and an
estimated 1999 population of 93,500, while the city of Douglasville had a 1998
population of 17,508. The Atlanta Regional Commission estimates that Douglas
County will grow to 100,400 by the year 2003 and is expected to double (over
1990 numbers) by the year 2020.
Economic Factors and Trends
---------------------------
Presently labor is available for manufacturing and distribution
operations in Douglas County. Presently, the labor force is over 50,000 people
in Douglas County and over 875,000 within easy commuting range in the adjacent
counties.
The county is currently home to a diversity of business, manufacturing
and distribution facilities, a growing retail center, and agricultural agencies.
Some of the larger employers include Douglas County School System (1,839),
Douglas County Government (550), HCA Parkway Medical Center (540), Kroger (400),
Wal-Mart (379), Douglas General Hospital (365), Inner Harbour Hospitals, Ltd.
(273), Winn Dixie (250), Greystone Power Company (2098), and the Commercial Bank
(125).
The county's largest industries include Alco Manufacturing Company
(130), Cay Metal Products (65), Metal Building Components (50), Robert Bosch
Corporation (185), and Seasons 4, Incorporated (107). Major distribution
facilities include ProSource Distribution (150), Hyundai Motor America,
Mitsubishi Motor Sales of America, Progress Lighting, Treadway America
Incorporated, and NIBCO, Incorporated. A number of support services including
machine shops, electric motor service, mill supplies, fastener and welding
services area are available to the various industries in the county.
Government Influences
---------------------
A County Commission with a County Manager governs Douglas County. The
commission consists of five elected members, with the chairman who serves full-
time, being elected by the people. The other members of the commission serve on
a part time basis. The County Manager is a full time employee. The city of
Douglasville and Douglas County each have their individual zoning ordinances and
subdivision design standards.
<PAGE>
20
Neighborhood Description
Location
--------
The subject property is located in Douglas County approximately fifteen
miles west of Atlanta. The neighborhood is generally bounded by the Interstate
20 to the south, the Southern Pacific Railroad to the north, Thornton Road to
the east, and the Douglasville City limits to the west. The subject property is
located in the northeast section of the neighborhood.
The neighborhood is approximately 50% built up with commercial
development along Bankhead Highway and residential development on secondary
thoroughfares. Shopping is available two miles to the west of the subject
property in Douglasville and two miles east of the subject property in Austell.
With the development of Interstate 20, traffic moved away from Bankhead Highway
in this area, with neighborhood retaining a rural flavor.
Access
------
Primary access to the subject property is from Bankhead Highway, which
interchanges with Thornton Road approximately one mile to the east of the
subject. Bankhead, also known as U.S. Highway 78 is a two-lane asphalt
thoroughfare. Douglas County is easily accessible via Interstate 20, which
carries traffic eastward into Atlanta's central business district and westward
into Birmingham, Alabama. Other major thoroughfares include U.S. Highway 78 and
State Highway 5,6, 8, 92, 161 and 166, which provide access throughout the
county and surrounding area. Overall, access to the subject property is
considered good.
Housing
-------
While the subject competes with all forms of housing to a certain
degree, the closest competition is other manufactured housing communities. There
are five manufactured housing communities near the subject. Lakeside Estates is
also owned and operated by Windsor Park Properties and is located immediately
east of the subject on Bankhead Highway. The other properties are discussed in
the Manufactured Community Market Overview. Our surveys of residents indicate
that a sense of community is the primary reason that people choose to reside in
a manufactured housing community. There is also a sense of security, as
residents pay close attention to comings and goings in the community.
Douglasville, Lithia Springs and Austell are all bedroom communities to Atlanta.
While the subject is not the least expensive form of housing in the
neighborhood, it is also not the most expensive.
<PAGE>
21
Neighborhood Description
Summary and Conclusion
----------------------
The subject property's location in regard to the local amenities in the
form of shopping, recreational and activity centers is considered excellent. The
infrastructure is in-place in the neighborhood. General real estate values have
been increasing over the last three to four year period, although construction
has been continuing at a rapid pace, on properties purchased during that period.
Future development in the neighborhood is expected to continue, due to
the improving infrastructure and the proximity to shops and other services. The
subject property will benefit from its excellent location and lack of land zoned
for new manufactured housing communities in Douglas County.
<PAGE>
Neighborhood Map
[NEIGHBORHOOD MAP APPEARS HERE]
<PAGE>
23
MANUFACTURED HOUSING COMMUNITY MARKET OVERVIEW
----------------------------------------------
The manufactured housing industry in the state of Georgia has matured
over the past twenty years, as a direct result of the advancements in
manufactured housing construction techniques and the continued ability of
producers and dealers to make manufactured housing a relatively inexpensive
housing alternative. Over this period the industry has progressed from it's
original "trailer park" image, to the "mobile home park" and, finally, to its
present status as "a manufactured housing community." This most recent status is
only appropriate, as most manufactured homes are typically moved only once
during their economic lifetime; from the manufacturer or dealer's lot to the
homesite.
According to the 1993 U.S. Housing Market Map, Georgia ranked 4th among
states in the number of homes shipped in 1993. As shown on the following table,
manufactured home shipments in Georgia increased annually since that time.
Georgia's 1997 national ranking was 3rd.
Manufactured
Home Shipments
===========================
Year Shipments
----------------------------
1993 13,525
----------------------------
1994 18,121
----------------------------
1995 20,133
----------------------------
1996 22,296
----------------------------
1997 21,432
============================
Source: Georgia Manufactured Housing Association
There is a narrow range of rates in the marketplace. Generally
speaking, lot rent ranges between $239.00 per month to $268.00 per month.
Services included in the rental rate vary and may include trash collection. At
the subject water, sewer and trash collection is not included in the monthly lot
rent. At the subject water and sewer is included in the monthly lot rent. In
April 1998, an $8.00 monthly fee was assessed for trash collection. The subject
base rent is $224.00 per lot, per month as of April 1/st/ and is supported by
the market range.
The subject is a 103-space, all-age manufactured housing community. The
communities that are most competitive with the subject have been detailed on the
following pages. These communities are currently between 88.9% and 99.5%
occupied. The physical occupancy at the subject is currently 97.1%, and the
economic occupancy is 96.1% as the assistant manager occupies one space rent-
free. Although most of the comparables have a pool, the subject is located
adjacent to a small lake. According to the Douglas County Planning Department,
no new manufactured housing communities are planned.
<PAGE>
24
Manufactured Housing Community Market Overview
Summary
-------
The manufactured housing market is strong in the state of Georgia.
Shipments have increased annually over the last four years. Manufactured housing
provides a lower cost housing alternative to site built homes and a sense of
community to residents.
<PAGE>
25
Manufactured Housing Community Market Overview
West Atlanta Village
2970 Skyview Drive
Lithia Springs, Douglas County, Georgia
[PICTURE APPEARS HERE]
Location: North Side of Skyview Drive
Number of Spaces: 230
Property Description: All age manufactured housing
community built in 1980's
Monthly Rental Rates: $239.00
Occupancy: 98.3% (226 of 230)
Services Included in Rates: None
Amenities: Clubhouse, playground and swimming
pool.
Verification/Date: Community Manager on April 18, 2000.
Comments: This community is in good condition.
This community is approximately one
mile southeast of the subject. A $10
charge per month is collected for
trash collection. Park is actually
larger, but several lots are too
small and unusable.
============================================================================
Location Access Visibility Condition Amenities Home Quality Overall
----------------------------------------------------------------------------
Similar Similar Similar Similar Similar Similar Similar
============================================================================
<PAGE>
26
Manufactured Housing Community Market Overview
Douglas Estates
One Barbara Lane Southwest
Lithia Springs, Douglas County, Georgia
[PICTURE APPEARS HERE]
Location: North of Old Alabama Road, West
of Maxham Road.
Number of Spaces: 210
Property Description: All age manufactured housing
community built in 1980's.
Monthly Rental Rates: $268.00
Occupancy: 99.5% (209 of 210)
Services Included in Rates: Trash Collection
Amenities: Pool and Playground area.
Verification/Date: Community Manager on April 18, 2000.
Comments: The property is in good condition
and located approximately two and
one half miles east of the subject.
=============================================================================
Location Access Visibility Condition Amenities Home Quality Overall
-----------------------------------------------------------------------------
Similar Similar Similar Superior Superior Superior Superior
=============================================================================
<PAGE>
27
Manufactured Housing Community Market Overview
Flagview Village
5682 Fairburn Road
Douglasville, Douglas County, Georgia
[PICTURE APPEARS HERE]
Location: South Side of Fairburn Road,1/2mile
West of I-20.
Number of Spaces: 200
Property Description: All age manufactured housing
community built in 1969.
Monthly Rental Rates: $268.00
Occupancy: 98.0% (196 of 200)
Services Included in Rates: None
Amenities: Clubhouse, pool and playground.
Verification/Date: Community Manager on March 30, 1999.
Comments: The park is well maintained. Park
has only 8 doublewide lots. Rent was
increased $30 in January.
============================================================================
Location Access Visibility Condition Amenities Home Quality Overall
----------------------------------------------------------------------------
Similar Similar Similar Superior Superior Superior Superior
============================================================================
<PAGE>
28
Manufactured Housing Community Market Overview
Springtime
3221 McKown Road
Douglasville, Douglas County, Georgia
[PICTURE APPEARS HERE]
Location: South Side of Bankhead Highway
Number of Spaces: 205
Property Description: All age manufactured housing
community.
Monthly Rental Rates: $250.00
Occupancy: 99% (203 of 205)
Services Included in Rates: Trash
Amenities: Swimming pool
Verification/Date: Subject manager on April 18, 2000
Comments: The park has a rural location near
east of Douglasville. The community
is well maintained and full. Trash
included in rent at $12 per month.
==============================================================================
Location Access Visibility Condition Amenities Home Quality Overall
------------------------------------------------------------------------------
Similar Similar Similar Similar Similar Similar Similar
==============================================================================
<PAGE>
29
Manufactured Housing Community Market Overview
Pinebrook MHP
4486 Cherokee Road
Douglas County, Georgia
[PICTURE APPEARS HERE]
Location: East of SR 92, 1/4 mile north of
IH-20.
Number of Spaces: 147
Property Description: All age manufactured housing
community.
Monthly Rental Rates: $270.00
Occupancy: 95.2% (140 of 147)
Services Included in Rates: Trash
Amenities: Pool
Verification/Date: Community Manager on April 18, 2000
Comments: The park is located near retail area
of SR 92, and Flagview Village MHP,
although there is no major road
frontage.
=============================================================================
Location Access Visibility Condition Amenities Home Quality Overall
-----------------------------------------------------------------------------
Similar Similar Similar Similar Similar Similar Similar
=============================================================================
<PAGE>
<TABLE>
<CAPTION>
RENTAL COMPARABLE CHART
====================================================================================================================================
NO. OF MONTHLY
SPACES/ RENTAL
NO. NAME/LOCATION % OCC. RATES SERVICES AMENITIES
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1 West Atlanta Village 230/ $239.00 None Clubhouse, playground
2970 Skyview 98.3% and pool.
Lithia Springs, Douglas County, Georgia
------------------------------------------------------------------------------------------------------------------------------------
2 Douglas Estates 210/ $268.00 Trash collection. Swimming pool and
One Barbara Lane Southwest 99.5% playground.
Lithia Springs, Douglas County, Georgia
------------------------------------------------------------------------------------------------------------------------------------
3 Flagview Village 200/ $268.00 None Clubhouse, pool and
5682 Fairburn Road 98.0% playgrounds.
Douglasville, Douglas County, Georgia
------------------------------------------------------------------------------------------------------------------------------------
4 Springtime 205/ $250.00 Trash collection Swimming Pool
3221 McKown Road 99.0%
Douglasville, Douglas County, Georgia
------------------------------------------------------------------------------------------------------------------------------------
5 Pinebrook Estates 147/ $270.00 Trash collection None
4486 Cherokee Road 95.2%
Douglasville, Douglas County, Georgia
------------------------------------------------------------------------------------------------------------------------------------
Subj. Lakeside MHP 126/ $224.00 None None
3291 Bankhead Highway 88.9%
Douglas County, Georgia
====================================================================================================================================
</TABLE>
<PAGE>
[RENT COMPARABLE LOCATION MAP APPEARS HERE]
<PAGE>
32
LAND AND SITE IMPROVEMENTS
--------------------------
The subject site is an irregularly shaped parcel of land containing
approximately 31.408 acres, or approximately 1,368,132 square feet of gross
area. The tract is of rolling topography and at street grade and drainage of the
tract appears adequate. No adverse soil or subsoil conditions were noted during
the physical inspection of the site.
Utility services connected and in service on the date of valuation
include the following:
Sanitary Sewer: Individual Septic tank
--------------
Water: Douglas County
-----
Electric: Greystone Power
--------
Gas: Austell Natural Gas
---
Cable Television: Media One
----------------
Trash Collection: Georgia Disposal.
----------------
Ingress to and egress from the subject community is via Bankhead
Highway (U.S. Highway 78). Access is rated good. Roadways that are laid-out to
maximize the natural features of the terrain access the individual lots in the
community. Roadway improvements include:
Street-bed: Bankhead Highway is an asphalt paved, two-
---------- lane thoroughfare.
The streets in the community are
asphalt-paved roadways and are 20-foot wide
right-of-ways.
Curb: Bankhead Highway has neither curbs nor
---- gutters. The subject does not have
curbs.
Sidewalk: There are no sidewalks along Bankhead
-------- Highway, or in the community.
<PAGE>
33
Land and Site Improvements
Streetlights: Bankhead Highway has some overhead
------------ streetlights in this vicinity. There are
pole-mounted lights throughout the
community.
Landscaping: Grass and other planted areas are found
----------- throughout the site. Some lots have trees.
Arrangements between the subject ownership and municipal and/or public
utility authorities for the connection of telephone and electricity are presumed
to exist, although neither a plan specifically identifying the location of all
underground lines nor contracts providing for their installation were provided
to us.
Encumbrances
------------
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. Additionally, there are no rent controls
in effect in Douglas County.
Easements
---------
Standard utility easements for electricity and telephone are assumed
to exist. No other easements were identified to us.
Encroachments
-------------
There were no obvious encroachments observed during the inspection of
the subject and neighboring properties.
Environmental
-------------
There were no obvious areas of contamination on or about the subject
site. We are not qualified in environmental hazards and recommend an audit be
performed.
Functional Utility
------------------
The subject parcel, which is slightly irregular in shape and contains
approximately 31.408 acres, is large enough to accommodate building improvements
and roadways as well recreational amenities and green areas. The site is
considered functional for various residential development scenarios. The current
development as a 103-space manufactured housing community with an overall
density of approximately 3.28 spaces per acre is considered low for modern
standards, but the site is considered functional for use as a manufactured
housing community.
<PAGE>
34
Land and Site Improvements
[IMAGE APPEARS HERE]
Site Plan
<PAGE>
35
IMPROVEMENT DESCRIPTION
-----------------------
The subject is improved with 103 manufactured housing community pads. There
are 5 doublewide units. The individual lots vary in size, averaging
approximately 4,000 square feet. The development has no common area amenities.
Park equipment is housed in sheds behind the manager's home.
The community streets are asphalt paved and 30 feet wide. The streets were
observed to be in average to poor condition.
Age and Condition
-----------------
The subject community and site improvements were originally built in 1966.
The community is approximately 30 years old. The common areas, streets, and
individual mobile homes observed to be in average overall condition. Overall
maintenance levels in the community are rated good.
<PAGE>
Improvement Description 36
--------------------------------------------------------------------------------
Lakeside
Manufactured Home Community
A great community for people who want to enjoy life
------------------------------------------------------------------
[MAP APPEARS HERE]
-----------------------------------------------------------------------
Single-section and multi-section homesites and
beautiful late model resale homes available.
. On-sale Professional . Spacious Homesites
Management . Planned Community
Activities
[LETTERHEAD OF CHATEAU]
--------------------------------------------------------------------------------
Site Layout
<PAGE>
37
OWNERSHIP AND PROPERTY HISTORY
------------------------------
The ownership of the subject property, as recorded in the Official
Records of Douglas County, Georgia in Deed Book 612 at Page 541, is in the name
of Windsor Park Properties 5. According to the property owner, the subject is
not currently listed for sale or the subject of a pending contract.
OCCUPANCY
---------
A fully developed 103-space manufactured housing community currently
occupies the subject property. According to the manager, there are 3 spaces
vacant and one space occupied by the assistant manager. We have incorporated no
income attributable to the sale of homes in our analysis. The economic occupancy
is 96.1%.
Rental rates at the community are $224.00 per month. The last rent
increases occurred in April 2000 and was $15.00. In April 1998, the resident
started paying for trash collection. Water and sewer is included in the rent.
<PAGE>
38
ZONING AND OTHER LAND USE CONTROLS
----------------------------------
The subject property is located in Douglas County and is zoned "R-8"
Mobile Home Park. This classification allows a density of 6 units per acre. The
property was in existence prior to the adoption of the current regulations and
is considered a legal, non-conforming use.
Flood Hazard
------------
Douglas County is a participant in the Federal Emergency Management
Agency (FEMA) flood map system. According to Flood Map Community Number 130306,
Panel 0015A, dated January 2, 1980, the property is located in Zone "C" which is
defined as an area of minimal flooding.
Environmental
-------------
We observed no obvious areas of contamination on or about the site, but
recommend an environmental audit be performed.
<PAGE>
39
ASSESSMENT AND TAXES
--------------------
The subject property is identified in the Douglas County records under
Parcel Number 362-180-7. The assessed value of the subject property totals
$453,280. The state of Georgia utilizes a 40% assessment ratio. The total tax
liability for 1998 was $12,705.44. According to the Tax Collector's Office, all
taxes are current.
Assessed values, for purposes of property taxation are determined on
January 1, of each year. In the state of Georgia, properties are assessed at 40%
of the market. Tax bills are issued in arrears. For instance, the 1998 taxes
were payable in December 1998, and January 1999. Properties are reassessed
annually and equitability of assessments is a basis for appeal.
The table below illustrates the tax liability for the subject property
since 1996.
===============================
Year Total Taxes
-------------------------------
1999 $12,614.78
-------------------------------
1998 $12,705.44
-------------------------------
1997 $12,705.44
-------------------------------
1996 $14,087.94
===============================
Historically the taxes have varied, but we would expect some increase
in future years as the demand for governmental service increases. We have
forecast stabilized taxes at $12,614.78 reflective of the 1999 amount.
In comparison to our market value opinion contained herein, the
subject's assessed value appears low. It is our opinion that the subject
property is under assessed. It is not uncommon for manufactured housing
communities to be under assessed, since large parts of the value can be
attributed to the entrepreneurial skill in acquiring the land and filling the
community.
<PAGE>
40
MARKETABILITY AND EXPOSURE PERIOD
---------------------------------
The subject property as discussed in the Neighborhood Analysis and
Manufactured Housing Community Market Overview sections of this report is
competitive and marketable with other properties in the marketplace.
There are typically four classes of purchasers attracted to this type
of development. The first are the tenants/residents of the community, purchasing
on a cooperative or condominium basis to reduce rental rates. The second class
of purchaser would be the single owner/operator who purchases a community as an
income and investment vehicle. Third would be the "traditional" manufactured
housing community owner/developer who views the community as a safe, long-term
investment. Finally, there is the institutional investor or syndicate (REIT)
which owns several large manufactured housing communities on a
statewide/nationwide basis.
Due to the stability of manufactured housing community investments, the
REIT investors have been a major player in the marketplace. In 1994, REIT
investors bid down capitalization rates for new, large communities. However,
after the initial splash, REIT investments have slackened as property owners
have placed premium prices on their properties. Resident groups have also
increased demand for manufactured housing community investments. According to
our banking sources, resident groups are able to borrow money at debt coverage
ratios as low as 1.0 to 1. The banks view resident group loans as good quality
with minimum risk. Typical payback periods range between five and eight years.
All age communities, like the subject, typically are not candidates for resident
purchase.
Discussions with large institutional manufactured housing community
investor representatives and local area realtors, indicated that "properly
priced", stable, well kept manufactured housing communities should "be under
contract" within a six to eight month period in today's market. However, our
research has also revealed that very few communities are "listed" for sale and
that for the most part brokers solicit owners for buyers.
Our discussions further indicated that institutional investors required
a minimum of 200 spaces, and pricing would reflect an 8.50% to 9.50% overall
capitalization rate requirement for senior communities. All age communities
typically reflect higher capitalization rates due to a less stable occupancy
base. Pricing is established by processing gross income, reduced by a 2% to 3%
vacancy and credit loss factor with expenses of 35% of effective gross income.
An additional capital charge of 3% to 5%, based on overall condition, is
deducted to arrive at a net operating income (NOI). This criterion is generally
the most restrictive pricing, as other investors will tend to accept lower
expense ratios (30%), no capital charges and a lower overall rate.
<PAGE>
41
Marketability and Exposure Period
Interest rates are low and financial institutions are again willing to
lend money for existing real estate projects with good occupancies. The presence
of life insurance companies and conduit programs has made the financing of
manufactured housing communities a very competitive business. The insurance
companies and conduit programs will lend on a non-recourse basis, with terms
ranging from 10 to 20 years.
In early October 1998, commercial mortgage backed securities (CMBS)
lenders restructured their pricing for long term fixed rate loans. These loans
had historically been priced based on an interest rate spread above Treasury
Securities. The secondary market for these loans became illiquid and lenders
were unable to sell the loans profitably. Consequently, although interest rates
on Treasuries have fallen, the interest rates on securitized loans has
increased. Our discussions with national lenders indicate that long term, fixed
rate loans are still available, but at a minimum interest rate of 7.25% to 8.0%.
On the basis of the preceding analysis, in our opinion, the exposure
period for the subject would be within the range indicated by the industry
participants, and we estimate an exposure period of six months.
<PAGE>
VALUATION SECTION
<PAGE>
43
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/
The highest and best use of a specific parcel of land does not depend
on subjective analysis by the property owner, the developer, or the appraiser;
rather, the competitive forces within the market where the property is located
shape highest and best use. Therefore, the analysis and interpretation of
highest and best use is an economic study of market forces focused on the
subject property.
Market forces also shape market value. The general data that is
collected and analyzed to estimate property value is also used to formulate an
opinion of the property's highest and best use as of the effective date of the
appraisal. In all valuation assignments, value estimates are based on use. The
highest and best use of a property to be appraised provides the foundation for a
thorough investigation of the competitive positions of buyers and sellers in the
marketplace. Consequently, highest and best use can be described as the
foundation on which market value rests. Without interaction in the marketplace,
highest and best use would not exist and market value estimations would be
impossible.
When potential buyers contemplate purchasing real estate for personal
use or occupancy, their principal motivations are perceived benefits of enhanced
enjoyment, prestige, and privacy. Purchasers of investment property are
frequently motivated by the promise of net income or capital accumulation and
certain tax advantages. These investors are more directly concerned with
feasibility, an indication that a project has a reasonable likelihood of
satisfying their specific objectives. These objectives may include assured
occupancy, establishing operating costs at a reasonable and acceptable level,
and potential property appreciation.
_____________
/2/ The Appraisal Institute, The Appraisal of Real Estate, 10th Edition
----------------------------
Chicago: The Appraisal Institute, 1992, page 275.
<PAGE>
44
Highest and Best Use
Analysis of the highest and best use of: 1) the land as though vacant,
and 2) the property as improved, is essential in the valuation process. Through
highest and best use analysis, we attempt to interpret the market forces that
influence the subject property and identify the use on which the final value
estimate will be based. This determination is based on the analysis and
interpretation of prevailing market conditions, the trends affecting the buyers
and sellers in the marketplace, and the existing use of the subject property.
Analyzing the highest and best use of the land as though vacant serves
two functions. First, it helps identify comparable properties that should have
highest and best uses of the land as though vacant, similar to that of the
subject property. The second reason is to identify the use that would produce
maximum income to the land after property income is allocated to the
improvements. In the Cost Approach and some income capitalization techniques, a
separate value estimate of the land is required. Estimating the land's highest
and best use as though vacant becomes the necessary part of deriving a land
value estimate.
There are also reasons to analyze the highest and best use of the
property as improved. The first is to help identify comparable properties that
should have the same or similar highest and best uses as the improved subject
property. The second is to decide whether the improvements should be demolished,
renovated or retained in their present condition. They should be retained as
long as they have some marketable value and the return from the property exceeds
the return that would be realized by a new use, after deducting the costs of
demolishing the old building and constructing a new one. Identification of the
existing property's most profitable use is crucial to this determination.
The highest and best use of both the land as though vacant and the
property as improved must meet four criteria. The highest and best use must be:
1. Legally Permissible
2. Physically Possible
3. Financially Feasible
4. Maximally Productive
These criteria are usually considered sequentially; a use may be
financially feasible, but this is irrelevant if it is physically impossible or
legally prohibited. Only when there is a reasonable possibility that one of the
prior, unacceptable conditions can be changed is it appropriate to proceed with
the analysis. If, for example, current zoning does not permit a potential
highest and best use, but there is a possibility that the zoning can be changed,
the proposed use can be considered on that basis.
<PAGE>
45
Highest and Best Use
Legally Permissible
-------------------
The use must be legal. The use must be probable, not speculative or
conjectural. There must be a profitable demand for such a use and it must return
to the land the highest net return for the longest period of time.
Legal restrictions, as they apply to the subject property, are of two
types, i.e., private restrictions (deed restrictions, easements, etc.) and
public restrictions (zoning, building codes, environmental regulations and
historic district controls, etc.). These latter restrictions must be
investigated, to the best of our ability, because they may preclude many
potential highest and best uses. No information regarding private restrictions
affecting the subject was uncovered in our research or provided by the client.
It is assumed that only common restriction, i.e., utility easements, etc. are
in-place, which would not be of any significant consequence to the development
of the site.
If the highest and best use of the site or property is not allowed
under current zoning, but there is a reasonable probability that a change in
zoning could be obtained due to shifting economic and social patterns, these
conditions can be considered determining highest and best use. However, we must
fully disclose all pertinent factors relating to a possible zoning change,
including that the change will not be granted. We must also be sensitive to
potential public reaction to proposed development projects since adverse
reactions from local residents and the general public have stopped many real
estate developments. The existing and/or projected use should be harmonious with
the nature and condition of existing neighborhood development.
The subject is located in an area designated by the Douglas County
Zoning Ordinance as an "R-8", Mobile Home Park. The property, as constructed, is
a non-conforming legal use of the land. The current use of the subject meets the
legally permissible criteria of this analysis.
Physically Possible
-------------------
The second constraint imposed on the possible use of the property is
that dictated by the physical aspects of the site itself. Size, shape and
terrain of the parcel of land affect the uses to which it can be developed. The
utility of the parcel may depend on its frontage and depth. Also considered are
the capacity and availability of public utilities. When a site's topography or
subsoil conditions make development restrictive or costly, its potential use is
adversely affected. In general, the larger the site is, the greater the
potential for achieving economies of scale or flexibility in development.
The highest and best use of a property as improved also depends on
physical considerations such as size, design and condition. The condition of the
property and its ability to continue in its current use may be relevant. If the
property should be converted to another use, the cost of conversion must be
analyzed in light of the returns to be generated by the new use. Obviously, the
costs of conversion depend on the property's existing physical condition.
<PAGE>
46
Highest and Best Use
The primary subject site is irregular in shape and contains a total
area of 31.408 acres. The site is generally level and has access from Bankhead
Highway. The lack of major thoroughfare frontage would preclude most types of
commercial development. The size and shape of the site does not restrict maximum
flexibility and development, and the subject's development has made an adequate
use of the site as indicated by its current density of approximately 3.28 spaces
per acre.
Financially Feasible
--------------------
After determining which uses are physically possible and legally
permissible, we have eliminated many uses from consideration. Then the uses that
meet the first two criteria are analyzed further to determine which are likely
to produce an income, or return, equal to or greater than the amount needed to
satisfy operating expenses, financial obligations and capital amortization. All
uses that are expected to produce a positive return are regarded as financially
feasible.
To determine financial feasibility, we then estimate the future gross
income that can be expected from each logical highest and best use. Vacancy and
collection losses and operating expenses are then subtracted from each gross
income to obtain the likely net operating income (NOI) from each use. A rate of
return on the invested capital can then be calculated for each use. If the net
revenue capable of being generated is enough to satisfy the required rate of
return on investment and provide a return on the land, the use is financially
feasible within some price limit.
Maximally Productive
--------------------
Of the financially feasible uses, the use that produces the highest
price, or value, consistent with the rate of return warranted by the market for
that use is the highest and best use. To determine the highest and best use of
land as though vacant, the same rate of return is often used to capitalize
income streams from different uses into their respective values. This procedure
is appropriate if all competing uses have similar risk characteristics. If not,
differing rates of return would be required. The use that produces the highest
value is the highest and best use.
To test the highest and best use of land as though vacant or a property
as improved, an appraiser analyzes all logical, feasible alternatives. The
market usually limits the number of property uses to a few logical choices. Each
alternative use must first meet the tests of physical possibility and legal
permissibility. The uses that meet the first two tests are then analyzed to
ascertain how many financially feasible alternatives must be considered.
An appraiser must exercise caution in performing market analysis to
support an estimate of highest and best use. Although a given site may be
particularly well suited for a specific use,
<PAGE>
47
Highest and Best Use
there may be a number of other sites that are also well suited, and some may be
better suited. Therefore, the appraiser must test the highest and best
conclusion to ensure that existing and potential competition from other sites
has been fully recognized.
Highest and Best Use - Vacant Land
----------------------------------
In determining the highest and best use of the site as vacant, the most
restrictive constraint is the legal use of the site. In the Zoning section of
this appraisal, it was noted that manufactured housing community development of
the property is a legal, specific use of the site.
We have also noted that there are a number of competitive manufactured
housing communities in the subject's neighborhood. Due to the non-availability
of space for immediate manufactured housing community development fees and a
lack of financing for speculative projects, it is unlikely that there will be
speculative manufactured housing community development in the foreseeable
future.
Current trends in the manufactured housing sales would preclude the
development of a manufactured housing community until such time as the market
has improved. In our opinion, the highest and best use of the site, as if vacant
and available for development, would be to hold the property for future sale as
the market trends might predicate.
Highest and Best Use - As Improved
----------------------------------
The site is currently improved with a 103-space all age manufactured
housing community. The use of the site is a legal non-conforming use under the
current zoning code. The subject property has been in existence as a
manufactured housing community since 1968.
The improvements are well situated on the site. The site has access via
Bankhead Highway, also known as U.S. Highway 78. The amenities for this size and
type of improvement are better than the competitors. The use of the site is
physically possible. Some demand for manufactured housing in this area is
evident, as the subject is fully developed and has a high level of occupancy. As
evidenced in the Income Capitalization Approach, the property is capable of
providing an acceptable return to an owner, demonstrating the financial
feasibility of the subject property.
The property, as currently improved, is physically possible, legally
permissible, financially feasible and maximally productive. Therefore, in our
opinion, the highest and best use of the property as improved is its current use
as a 103-space all age manufactured housing community.
<PAGE>
48
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 property, 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
Direct 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 stabilized manufactured housing community,
investors are primarily concerned with cash flow to service any debt and the
equity positions. 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
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
property is a fully developed community, with no expansion possibilities;
therefore, a potential investor would be primarily interested in the cash flow
and equity return. Due to the subjectivity of depreciation estimates and the
lack of comparable land sales, we have omitted the cost approach.
A number of positive and negative factors were believed to affect the
overall value of the subject property.
On the positive side, the following were considered.
1. The community is located along a small lake.
2. The community has a high level of occupancy.
Partially offsetting the positive influences are negative factors among
which the following were considered the most pertinent:
1. The subject is an older property and has some smaller lots.
With the above factors in mind, the Income Capitalization and Sales
Comparison Approaches will now be discussed in detail on the following pages.
<PAGE>
49
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. Within the goal of price minimization purchasers 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 property,
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.
<PAGE>
50
Income Capitalization Approach
The first step in the Income Approach to value involves the estimate of
future net operating income to be generated by the property. The estimate of net
operating income is derived through the process of estimating the total
potential gross income (PGI), from lot rentals, less any vacancy and credit
loss, added to the estimate of income from other sources, 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.
In our estimate of the stabilized net operating income, we have
considered the subject's current rent and expense levels and historical trends,
together with current rent and expense levels at manufactured housing
communities similar to the subject. The subject's historical income and expenses
for 1996, 1997, 1998 and 1999 have been presented, in the table on the following
page. It should be noted that we have grouped a number of expense items for
reporting purposes.
Although the expenses do not appear unreasonable, we have also relied
on market comparables. Current income and expense information on three
comparable manufactured housing communities has also been presented in this
section.
The data on the tables has been arrayed to display the "percent of
total income" and "dollar per space" figures, consistent with industry reporting
practices. We have combined some of the owners expense categories for purposes
of comparison.
Our analysis of each component of income, vacancy and credit loss and
expenses follows these tables, and has been summarized in the Reconstructed
Operating Statement found on Page 63.
<PAGE>
<TABLE>
<CAPTION>
================================================================================================================================
Lakeside 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 $ 207,154 98.46% $ 2,011.20 $ 213,188 101.33% $ 2,069.79 $231,367 95.63% $ 2,246.28
Utility Income - 0.00% - - 0.00% - 6,513 2.69% $ 63.23
Miscellaneous/Other 3,245 1.54% 31.50 3,305 1.57% 32.09 4,067 1.68% 39.49
------------------------------------------------------------------------------------------------------
Total Income $ 210,399 100.00% 2,042.71 $ 216,493 102.90% 2,101.87 $241,947 100.00% $ 2,349.00
Expenses:
Insurance 2,053 0.98% 19.93 2,400 1.14% 23.30 2,588 1.07% 25.13
Office 21,858 10.39% 212.21 17,249 8.20% 167.47 12,406 5.13% 120.45
Maintenance & Supplies 20,103 9.55% 195.17 13,011 6.18% 126.32 14,029 5.80% 136.20
Management Expense 10,231 4.86% 99.33 10,556 5.02% 102.49 11,878 4.91% 115.32
Wages & Benefits 13,040 6.20% 126.60 19,638 9.33% 190.66 19,520 8.07% 189.51
Property Taxes 14,088 6.70% 136.78 14,652 6.96% 142.25 15,167 6.27% 147.25
Utilities 20,052 9.53% 194.68 20,109 9.56% 195.23 27,448 11.34% 266.49
------------------------------------------------------------------------------------------------------
Total Expenses $ 101,425 48.21% $ 984.71 $ 97,615 45.09% $ 947.72 $103,036 42.59% $ 1,000.35
Net Operating Income $ 108,974 51.79% $ 1,058.00 $ 118,878 56.50% $ 1,154.16 $138,911 57.41% $ 1,348.65
================================================================================================================================
<CAPTION>
============================================================
Pct. of $ Per
1999 Income Space
------------------------------------------------------------
<S> <C> <C> <C>
Income:
Rents $ 240,083 95.33% $ 2,330.90
Utility Income 8,722 3.46% $ 84.68
Miscellaneous/Other 3,027 1.20% 29.39
-------------------------------
Total Income $ 251,832 100.00% $ 2,444.97
Expenses:
Insurance 1,520 0.60% 14.76
Office 13,542 5.38% 131.48
Maintenance & Supplies 10,479 4.16% 101.74
Management Expense 12,608 5.01% 122.41
Wages & Benefits 22,092 8.77% 214.49
Property Taxes 13,086 5.20% 127.05
Utilities 29,125 11.57% 282.77
-------------------------------
Total Expenses $ 102,452 40.68% $ 994.68
Net Operating Income $ 149,380 59.32% $ 1,450.29
============================================================
</TABLE>
51
<PAGE>
Income Capitalization Approach 52
Income Analysis
---------------
The general practice in the local market is to charge a base lot rent on a
monthly basis. As previously discussed in the Manufactured Housing Community
Market Overview section of this report, this rate at the subject is $209.00.
The base lot rate generally includes water and sewer. Base lot rents
typically generate between 90% and 99% of the total income in a manufactured
housing community. Based on the market range, we are of the opinion that the
subject has a reasonable rent structure within market levels.
Potential Gross Income
----------------------
As any potential purchaser would incorporate a one-year forecast of
potential gross income at the existing rent levels, our analysis must, and has,
also accounted for this. 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 potential gross income from lot rentals is $276,864.
Vacancy and Credit Loss
-----------------------
Vacancy and credit loss is typically a very small percentage in an
established community, due primarily to the high cost of relocating homes. The
current physical occupancy at the subject property is 97.1%. All age communities
typically have a more transient occupancy than do senior communities. According
to the management, concessions are no longer available. We have estimated
stabilized vacancy and credit loss at 5.0% to account for both physical and
economic vacancy, and credit loss.
Total vacancy and credit loss has been estimated to be $13,843. The
effective gross income from rentals is estimated to be $263,021.
Utility Income
--------------
The community has its own wells and private wastewater systtem. In April
1998, the residents started to reimburse the landlord for trash pick-up. In the
past, the community paid for the trash. Trash income amounted to $63.23 per
space in 1998 and $84.68 per space in 1999. We have projected utility income at
$85.00 per space or $8,755 annually.
<PAGE>
Income Capitalization Approach 53
Other Income
------------
Historically the subject has reported miscellaneous income, ranging from
$31.50 per space in 1996 to $39.49 in 1998. This category includes late fees,
bad check charges and other miscellaneous income items. The owner reported that
the late fee charge has been recently increased and a strict policy by
management is in force. We have relied on the 1998 amount to estimate
miscellaneous income at $35.00 per space or $3,605 per year.
Effective Gross Income
----------------------
Effective Gross Income is derived from income based upon the current
economic rent less a vacancy and credit loss allowance for present and
anticipated income losses due to any tenant changes. Our estimate of the
stabilized effective gross income of $275,381 is detailed below.
<TABLE>
<CAPTION>
================================================================================================
Lakeside Manufactured Housing Community
Effective Gross Income
================================================================================================
Gross Potential Rental Income:
Monthly Monthly
Spaces Rent Total Annualized
------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
103 $224.00 23,072 276,864
------------------------------------------------------------------------------------------------
Less:
Vacancy & Credit Loss 5.0% 13,843
--------------------
Effective Gross Income From Lot Rentals $ 263,021
Trash Income $ 8,755
Miscellaneous Income 3,605
--------------------
Effective Gross Income $ 275,381
================================================================================================
</TABLE>
<PAGE>
Income Capitalization Approach 54
Operating Expense Analysis
--------------------------
The following discussion addreses each of the line item expenses for the
property. We have presented 1996, 1997, and 1998 and 1999 amounts, together with
the comparable expense data, followed by our stabilized estimate of the expense.
The comparable expense information has been obtained from a number of
reliable sources and we have presented it in a summary form, on the following
page, to maintain confidentiality. The expense comparables range in size from
130 to 251 spaces. These communities have operations similar to the subject,
including connection to municipal or county utility systems.
<PAGE>
Manufactured Housing Community Comparable Operations
<TABLE>
<CAPTION>
Pct. of $ Per Pct. of $ Per
Spaces 195 Income Space 130 Income Space
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Income:
Rents $304,839 97.35% $1,563.28 $341,763 99.44% $2,628.95
Miscellaneous/Other 8,301 2.65% 42.57 1,923 0.56% 14.79
------------------------------------------------------------------------------
Total Income $313,141 100.00% $1,605.85 $343,686 100.00% $2,643.74
Expenses:
Insurance $6,733 2.15% $34.53 $2,848 0.83% $21.91
Office/Administration 17,845 5.70% 91.51 9,264 2.70% 71.26
Maintenance & Repairs 33,198 10.60% 170.24 21,766 6.33% 167.43
Management Expense 3,641 1.16% 18.67 0 0.00% 0.00
Wages & Benefits 33,590 10.73% 172.26 40,235 11.71% 309.50
Property Taxes 39,211 12.52% 201.08 23,005 6.69% 176.96
Utilities 16,996 5.43% 87.16 57,397 16.70% 441.52
------------------------------------------------------------------------------
Total Expenses $151,215 48.29% $775.46 $154,515 44.96% $1,188.58
Net Operating Income $161,926 51.71% $830.39 $189,171 55.04% $1,455.16
==============================================================================
</TABLE>
<TABLE>
<CAPTION>
Pct. of $ Per
Spaces 251 Income Space
--------------------------------------------------------------------------------
<S> <C> <C> <C>
Income:
Rents $375,664 99.57% $1,496.67
Miscellaneous/Other 1,619 0.43% 6.45
-------------------------------------
Total Income $377,283 100.00% $1,503.12
Expenses:
Insurance $7,366 1.95% $29.35
Office/Administration 29,468 7.81% 117.40
Maintenance & Repairs 37,153 9.85% 148.02
Management Expense 5,300 1.40% 21.12
Wages & Benefits 29,113 7.72% 115.99
Property Taxes 50,000 13.25% 199.20
Utilities 24,181 6.41% 96.34
-------------------------------------
Total Expenses $182,581 48.39% $727.42
Net Operating Income $194,702 51.61% $775.70
=====================================
</TABLE>
<PAGE>
Income Capitalization Approach 56
Insurance
---------
Insurance charges are typically property specific based on the location and
the amenity package. Historically, these charges have varied annually, ranging
from approximately $19.93 per space in 1996 to $25.13 per space in 1998. The
comparable expense data indicated a range from $21.91 to $34.53 per space. We
have placed emphasis on the historical amounts, supported by the comparables. We
have used $20.00 per space in our estimate of this expense. This is equal to
$2,060 annually and represents approximately 0.75% of the estimated effective
gross income.
<TABLE>
<CAPTION>
=======================================================================================================================
1996 1997 1998 1999 Comp Comp Comp Stabilized
1 2 3 Estimate
-----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Total $2,053 $2,400 $2,588 $1,520 $6,733 $2,848 $7,366 $2,060
-----------------------------------------------------------------------------------------------------------------------
% EGI 0.98% 1.14% 1.07% 0.60% 2.15% 0.83% 1.95% 0.75%
-----------------------------------------------------------------------------------------------------------------------
$/Space $19.93 $23.30 $25.13 $14.76 $34.53 $21.91 $29.35 $20.00
=======================================================================================================================
</TABLE>
Office/Administration
---------------------
This expense category is also project specific due to varying
classifications of expense categories. We have attempted to include like items
in this category for both the subject and the expense comparables. For the
subject, this category includes office expense, supplies, licenses, dues,
subscriptions, professional fees, postage, advertising and telephone.
Historically, this expense has ranged from $120.45 per space in 1998 to $212.21
per space in 1996. The expense comparables indicated a range for this category
from $71.26 to $117.40 per space. We have relied primarily on the comparables,
with consideration given to the historical data. We have estimated the
administrative/office expense at $130.00 per space or $13,390 per year. This
estimate is equal the equivalent of 4.86% of the effective gross income
estimate.
<TABLE>
<CAPTION>
=======================================================================================================================
1996 1997 1998 1999 Comp Comp Comp Stabilized
1 2 3 Estimate
-----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Total $21,858 $17,249 $12,406 $13,542 $17,845 $9,264 $29,468 $13,390
-----------------------------------------------------------------------------------------------------------------------
% EGI 10.39% 8.20% 5.13% 5.38% 5.70% 2.70% 7.81% 4.86%
-----------------------------------------------------------------------------------------------------------------------
$/Space $212.21 $167.47 $120.45 $131.48 $ 91.51 $71.26 $117.40 $140.00
=======================================================================================================================
</TABLE>
<PAGE>
Income Capitalization Approach 57
Maintenance and Supplies
------------------------
These expenses are project specific based on the age and condition of the
property. Many properties expense capital items rather than capitalizing them,
which results in abnormal spikes in the expense amounts in certain years.
Historically, maintenance and repair expenses have ranged from $126.32 per
space in 1997 to $195.17 in 1996. We observed the community to be in average
condition. Several asphalt streets need to be repaired. However, as the
community continues to age additional maintenance efforts will be necessary. The
expense comparables indicate a wide range of expense in this category from
$148.02 per space to $170.24 per space. Our stabilized estimate of this expense
is $120.00 per space or $12,360 annually, based primarily on the historical
data. This estimate is equal to approximately 4.49% percent of the estimated
effective gross income.
<TABLE>
<CAPTION>
=======================================================================================================================
1996 1997 1998 1999 Comp Comp Comp Stabilized
1 2 3 Estimate
-----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Total $20,103 $13,011 $14,029 $10,479 $33,198 $21,766 $37,153 $12,360
-----------------------------------------------------------------------------------------------------------------------
% EGI 9.55% 6.18% 5.80% 4.16% 10.60% 6.33% 9.85% 4.49%
-----------------------------------------------------------------------------------------------------------------------
$/Space $195.17 $126.32 $136.20 $101.74 $170.24 $167.43 $148.02 $120.00
=======================================================================================================================
</TABLE>
Management Fee
--------------
Management fees have historically been approximately 5% of effective gross
income. Management fees are charged at two of the expense comparables and were
equal to 1.16% and 1.40%. The overall market range for management fees was found
to range from approximately 3.0% to 5.0% of effective gross income.
We have estimated a fee of 5.0% of effective gross income, considered
adequate for the management of a property of this size, in this location.
Applying this percentage to the effective gross income estimate produces an
annual amount of $13,769 or $133.68 per space per year.
<PAGE>
Income Capitalization Approach 58
Wages and Benefits
------------------
This expense includes all of the costs associated with the on-site staff.
These costs including payroll, payroll and unemployment taxes and any health
insurance benefit package. At the subject, the expenses attributed to on-site
management range from $126.60 per space for annualized 1996 to $190.66 per space
in 1998. The assistant on-site manager receives free rent as part of her
compensation package.
The expense comparables indicate a wide range of expense in this category
from $115.99 per space to $309.50 per space. Our estimate of this expense has
been based primarily on the historical data. Our estimate of $210.00 per space,
is equal to $21,630 annually or 7.85% of the estimated effective gross income.
<TABLE>
<CAPTION>
=======================================================================================================================
1996 1997 1998 1999 Comp Comp Comp Stabilized
1 2 3 Estimate
-----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Total $13,040 $19,638 $19,520 $22,092 $33,590 $40,235 $29,113 $21,630
-----------------------------------------------------------------------------------------------------------------------
% EGI 6.20% 9.33% 8.07% 8.77% 10.73% 11.71% 7.72% 7.85%
-----------------------------------------------------------------------------------------------------------------------
$/Space $126.60 $190.66 $189.51 $214.49 $172.26 $309.50 $115.99 $210.00
=======================================================================================================================
</TABLE>
Property Taxes
--------------
This category of expense represents the annual real estate tax liability of
the property. This category is project specific due to location and taxing
authority. We have not used the expense comparables for the estimate this
expense.
In our analysis we have relied on the analysis as presented and discussed
in the Assessment and Taxes section of this report. Our analysis indicated a
1999 tax liability of $12,615. This estimate is equal to $122.48 per space or
4.58% of the effective gross income estimate.
<PAGE>
Income Capitalization Approach 59
Utilities
---------
This category of expense is also project specific, due to the number and
type of services that are included in the rent. In this case, this line item
includes the costs of providing water and trash pick-up for the homesites and
water, sewer, electric and trash collection for the common areas of the
community. Only one of the expense comparables provides utilities in the base
rent. Typically, utilities are passed through to the tenant. The comparables, as
shown below, indicate a wide range from $87.16 to $441.52 per space. We have
estimated the utility expense at $280.00 per space or $28,840 annually. This is
equivalent to 10.47% of the effective gross income estimate.
<TABLE>
<CAPTION>
=======================================================================================================================
1996 1997 1998 1999 Comp Comp Comp Stabilized
1 2 3 Estimate
-----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Total $20,052 $20,109 $27,448 $29,125 $16,996 $57,397 $24,181 $28,840
-----------------------------------------------------------------------------------------------------------------------
% EGI 9.53% 9.56% 11.34% 11.57% 5.43% 16.70% 6.41% 10.47%
-----------------------------------------------------------------------------------------------------------------------
$/Space $194.68 $195.23 $266.49 $282.77 $ 87.16 $441.52 $ 96.34 $280.00
=======================================================================================================================
</TABLE>
Reserves
--------
Property owners do not typically account for reserves for capital
replacement. This category represents the inclusion of set-asides for major
recurring or capital type expenditures experienced periodically by any property.
This item is typically accounted for either on a dollar per space ($20.00 to
$30.00) or a percentage (0.5% to 2.0%) of effective gross income. We have used
$30.00 per space per year, believed adequate to cover future capital costs. This
equates to $3,090 annually, equal to approximately 1.12% of the effective gross
income estimate.
<PAGE>
Income Capitalizaiton Approach 60
Expense Summary
---------------
To summarize, we have estimated the stabilized total operating expenses for
the subject to be $107,754. This estimate is equal to 39.13% of the effective
gross income estimate or $1,046.16 per space annually.
Expense Summary
<TABLE>
<CAPTION>
=======================================================================================================================
1996 1997 1998 1999 Comp Comp Comp Stabilize
1 2 3 Estimate
-----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Total $101,425 $97,615 $ 103,036 $102,452 $151,215 $ 154,515 $182,581 $ 107,754
-----------------------------------------------------------------------------------------------------------------------
% EGI 48.21% 45.09% 42.59% 40.68% 48.29% 44.96% 48.39% 39.13%
-----------------------------------------------------------------------------------------------------------------------
$/Space $ 984.71 $947.72 $1,000.35 $ 994.68 $ 775.46 $1,188.58 $ 727.42 $1,046.16
=======================================================================================================================
</TABLE>
As shown on the preceding table, expenses have historically represented
between 40.68% (1999) and 48.21% (1996) of the Effective Gross Income,
reflective of the community filling. The expense comparables, as summarized
above, indicated a range from 44.96% (Comparable Number 2) and 48.39%
(Comparable Number 3).
Our estimate of total expenses is equal to 39.13% of the effective gross
income estimate. It should be noted that total expenses have been reduced due to
the reimbursement of the trash pick-up cost, which was previously absorbed by
the community. Real estate taxes are also lower. Historical expenses did not
include a reserve for capital expenditures. Additionally, none of the expense
comparables reflect a reserve for capital expenditures, which has been included
in our estimate. The subject's historical expenses include concessions given to
fill the community, which are no longer applicable.
Our estimate of net operating income is $167,627. Our stabilized estimate
of income and expenses for the subject is presented on the following page.
<PAGE>
Income Capitalization Approach 61
<TABLE>
<CAPTION>
================================================================================================================
Lakeside Manufactured Housing Community
Stabilized Operating Statement
% of $ per
Amount EGI Space
================================================================================================================
<S> <C> <C> <C>
Total Effective Gross Income $ 275,381 100.00% $ 2,673.60
Expenses
Insurance $ 2,060 0.75% $ 20.00
Office 13,390 4.86% 130.00
Maintenance & Repairs 12,360 4.49% 120.00
Management Expense 13,769 5.00% 133.68
Wages & Benefits 21,630 7.85% 210.00
Property Taxes 12,615 4.58% 122.48
Utilities 28,840 10.47% 280.00
Reserves 3,090 1.12% 30.00
---------------------------------------------
Total Expenses $ 107,754 39.13% $ 1,046.16
Net Operating Income $ 167,627 60.87% $ 1,627.44
================================================================================================================
</TABLE>
<PAGE>
Income Capitalization Approach 62
Capitalization Discussion
-------------------------
Two alternative methods of valuation are employed in the Income Approach.
Direct capitalization is a method of converting net operating income into market
value, employing a "capitalization" rate based upon market perimeters. This
approach is particularly applicable to properties with a stable income stream,
or in cases where income, and consequently value, can be projected to increase
at a constant or stable rate.
An alternative valuation method is yield capitalization, which employs a
year-by-year projection of income and expenses, recognizing rent changes and the
cost of improvements as they occur. Yield capitalization, also known as
Discounted Cash Flow Analysis, is considered most appropriate in the valuation
of properties with uneven income streams. Since investors are unwilling to pay
for any upside from vacant units, fully developed manufactured housing
communities are typically valued by direct capitalization.
Direct Capitalization
---------------------
Direct capitalization of net operating income by an overall capitalization
rate extracted from the market provides an excellent indication of market value.
Purchasers of manufactured housing communities most often utilize this method.
This method is the most 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. Income data was
available from all of the comparable sale properties included in this report.
Market Data
-----------
The comparable sale data shown in the Sales Comparison section of this
report indicated an overall capitalization rate from 9.15% to 12.15%. Our
analysis of this data indicated a narrow range in overall capitalization rates,
which tend to be influenced by the size of the community and its age and
condition.
Comparable Sales
===============================================================
Sale Sale Date Overall
Number Capitalization Rate
---------------------------------------------------------------
1 11/99 10.17%
---------------------------------------------------------------
2 09/97 12.15%
---------------------------------------------------------------
3 03/99 9.27%
---------------------------------------------------------------
4 08/98 10.82%
---------------------------------------------------------------
5 12/97 9.15%
===============================================================
Sale comparable one consists of two Sun Communities (Rentals No. 2 and 3)
properties in Douglas County that recently sold. The properties are in good
condition and the rents were increased $30.00 per month after the sale. Sale
comparable two is a similar size community
<PAGE>
Income Capitalization Approach 63
located in a western suburb of Atlanta. The property is older but in good
condition. Sale comparable three is a property located in an eastern Atlanta
suburb. The property is in similar condition as the subject. Sale comparable
four is larger and in good condition. The property is located in Augusta. The
rents were increased shortly after purchase by $15.00 per month. Sale comparable
five is a property located in a northern Atlanta suburb. The property is in
similar condition as the subject.
As discussed in the Marketability and Exposure Period section of this
report, our sources indicated that institutional investors required 8.5% to 9.5%
overall capitalization rates for projects in the 200 space range and were the
most restrictive in pricing due to stringent criteria. We also found that REIT
investors were bidding rates down even further. Our information revealed that
manufactured housing community cooperatives and associations would more likely
accept slightly lower overall rates, while the small investor would require a
slightly higher rate.
Based on the comparison of the sale data to the subject and considering the
current investor and interest rate environment, the overall rate for the subject
would likely be in the 9.5% to 10.5% range. We have concluded a rate of 10.0%,
reflective of the subject's location and physical characteristics and the
current interest rate environment.
Debt Coverage Ratio Method
--------------------------
As an alternative to market-derived overall capitalization rates, we have
developed an overall rate through the Debt Coverage Ratio analysis. The
parameters for this calculation are summarized below.
The Debt Coverage Ratio Method of income capitalization essentially
measures the risk involved in mortgage lending. Its usefulness to mortgage
underwriting takes the form of establishing a degree of safety with a given set
of loan terms.
Mortgage underwriting typically focuses on positive debt coverage, (net
operating income/annual mortgage debt service or NOI/ADS), rather than market
value, as a negative cash flow after debt service may indicate a probability
that a mortgage loan could be in jeopardy. Accordingly, if the greatest portion
of the property's value is debt capital, as established by the loan-to-value
ratio, annual debt coverage in underwriting is a major consideration. The debt
coverage ratio method is therefore market based and direct.
By multiplying this risk factor by the projected mortgage payment
requirement an estimate of the required overall rate to satisfy the lender's
minimum risk requirements can be derived.
<PAGE>
Income Capitalization Approach 64
The formula for this procedure is: M x f x DCR = R, where;
M = Loan to Value Ratio
f = Mortgage Constant
DCR = Debt Coverage Ratio
R = Overall Rate
To establish the criteria for the development of the Debt Coverage Ratio
Method, we have conducted a recent survey of lenders; the results are summarized
below:
<TABLE>
=========================================================================================
Contact Cary Monroe Rob Adrid
<S> <C> <C>
-----------------------------------------------------------------------------------------
Affiliation Monroe & Giordano United Southern Bank
-----------------------------------------------------------------------------------------
Type Of Lender Conduit Conventional
-----------------------------------------------------------------------------------------
Nominal Mortgage Interest Rate 230 Basis Points over 250 Basis Points over
10 year Treasuries 5 to 10 year
Treasuries with a
floor of 8.0%
-----------------------------------------------------------------------------------------
Amortization Period 30 Years 15 - 20 Years
-----------------------------------------------------------------------------------------
Loan Term 10 Years 5 - 10 Years
-----------------------------------------------------------------------------------------
Debt Coverage Ratio 1.20 - 1.25 1.20 - 1.25
-----------------------------------------------------------------------------------------
Loan To Value Ratio 80% 75%
=========================================================================================
</TABLE>
Our survey of local lenders indicated an annual interest rate of 8.5%.
A mortgage loan would be available at 75% of the market value, based on a
20-year amortization schedule. Based on these criteria the indicated annual
interest rate constant is 10.4139%. Additionally, our survey indicated that a
minimum debt coverage ratio (DCR) of 1.25 to 1.00 would likely be required for a
property similar to the subject. An overall capitalization rate, based on these
assumptions, has been developed as shown below:
<TABLE>
<CAPTION>
===========================================================================================================
M F DCR OAR
X X =
Loan to Value Ratio Mortgage Constant Debt Coverage Ratio Overall Rate
<S> <C> <C> <C> <C> <C> <C>
-----------------------------------------------------------------------------------------------------------
0.75 0.104139 1.25 0.09763
-----------------------------------------------------------------------------------------------------------
Rounded 9.8%
===========================================================================================================
</TABLE>
The debt coverage ratio method indicated a capitalization rate based upon
financing by local banks. However, as the popularity of manufacturing housing
community investments has
<PAGE>
Income Capitalization Approach 65
increased, alternate sources of financing have become available through
insurance companies and conduit programs.
The presence of institutional investors in the market and the dearth of
quality real estate investments have bid down rates on manufactured housing
communities. Investors have become more creative in their acquisition strategies
in order to compete. Therefore, actual transactions in the marketplace better
demonstrate investor perceptions of yields on manufactured housing community
investments.
The rates typically reflect a narrow range and are considered mutually
supportive. Therefore, we have estimated an overall capitalization rate of
10.0%. We have used this rate in the direct capitalization method to capitalize
the net income of $167,627. The value conclusion via the direct capitalization
method is summarized as follows:
$167,627 divided by .10 $1,676,268
Rounded to $1,680,000
<PAGE>
66
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 must be weighed, and the data of each
transaction must be confirmed to the greatest extent possible.
2. The degree of comparability of each sale to the subject must be
considered; differences in physical, functional and economic
characteristics be noted; and adjustments for the differences be
made.
3. The value conclusion must be consistent with the analysis of the
sales data.
For a conveyance to qualify as a "market transaction", four factors
must be present:
1. The conveyance must be "arm's length"; that is, it must be
between two non-related parties.
2. Neither the buyer nor the seller should have been under
compulsion to act.
3. The property should be available to the class of purchasers best
able to utilize the facility.
4. The price must be expressed in the equivalent of cash, adjusted
for any special financing, concessions, or terms.
For any class of real estate, the market area for comparative data
must reflect the area prospective purchasers would consider. Comparability is
also a function of the physical character of the asset to be appraised. Classes
of real estate in which physical specifications are standardized, or in which
scale is small, and/or in which the commodity has achieved uniform market
recognition require that the sales data considered closely resemble the subject.
As specifications become more complex, as scale increases, and as market
recognition declines, the physical similarity of the sales data and the subject
tends to decline.
<PAGE>
Sales Comparison Approach 67
To judge the degree of comparability that exists between the sales
selected for analysis and the subject, several guidelines were applied.
1. Each sale is in the same market as the subject. To the extent
that a market is a meeting place for buyers and sellers of real
estate of a given type, the boundaries of the market are set by
the participants in merchandising and absorbing competitive
properties and are economic not purely physical or geographic.
2. Physical characteristics of the subject and comparables are
similar.
3. The functional adequacy of each sale property and the subject
are competitive in terms of the ability of each to support
similar functions.
To draw a conclusion from the analysis of the sales data, a unit of
comparison has been selected. The 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 a manufactured housing community is the sale price per space. This unit of
comparison emphasizes the contribution of the improvements, and the contribution
of the land is merged into the unit-selling price.
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 features that are dissimilar, adjustments
have been made leading to an indication of the price at which the subject could
be expected to sell. In considering adjustments, relevant factors were
considered including:
1. Nature of surrounding development.
2. Relative size.
3. Availability of competing properties.
4. Effect of time on selling prices.
5. Age and condition of the improvements.
6. Amenities and occupancy.
In our search for comparable sales, we excluded senior communities
since they tend to have a less transient occupancy base and typically trade at
lower capitalization rates than all age communities.
<PAGE>
Sales Comparison Approach 68
Based on our investigation, the following five sales are the most
significant transactions for direct comparison with the subject.
Due to a lack of large sales in the Atlanta area, we expanded our
search to elsewhere in Georgia. These sales occurred between May 1997, and March
1999. The properties ranged in size from 115 to 401 spaces. The sale prices, on
a per space basis, ranged from $11,739 to $21,259. The Effective Gross Income
Multipliers (EGIM) ranged from 4.58 to 7.74. The indicated overall
capitalization rates range from 9.15% to 12.15%.
The following pages detail each of the five sales, following which we
have presented a summary of the pertinent data.
<PAGE>
Sale Comparable Number One 69
Douglas Estates
6279 Barbara Lane
Austell, Douglas County, Georgia
&
Flagview MHP
5682 Highway 92
Douglasville, Douglas County, Georgia
[PICTURE APPEARS HERE]
Sale Date: November 1999
PROPERTY DESCRIPTION
--------------------
Size/Type: 401 space all age manufactured housing
communities
Utilities: All available
Land Description: Generally level, irregularly shaped 26.803-
acre parcel with adequate access from Barbara
Lane and 36.59-acre parcel with access from
Highway 92. Improved with asphalt-paved
streets and streetlights.
Improvements/Amenities: Office, playground, maintenance building and
pool.
Year Built/Condition: 1965/Good
<PAGE>
Sale Comparable Approach 70
INCOME DATA
-----------
Annual Occupancy: 97.5% (Proforma)
Average Lot Rent: $268.00
Effective Gross Income: $1,448,665
Expenses: $581,315 (40.1%)
Net Income: $867,350 ($2,162.97 per space)
SALE DATA
---------
Sale Price: $8,525,000 ($4,289,000 - 202-Space Douglas
Estates & $4,236,000 - 199-Space Flagview MHP)
Cash Equivalent Price: $8,525,000
Grantor: Sun Communities Operating Limited Partnership
Grantee: Wayne Rickert
Financing Terms: Cash to seller.
Sales History
(Past 3 Years): None noted
Market Exposure: Unknown
COMPARISON DATA
---------------
Sale Price/Space: $21,259
Effective Gross Income
Multiplier (EGIM): 5.88
Overall Capitalization
Rate (OAR): 10.17%
Comments: The two parks were purchased together by
Rickert. Rents were increased $30 upon
acquisition and reflected in pro forma.
<TABLE>
==============================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Location Access Visibility Condition Amenities Home Quality Overall
--------------------------------------------------------------------------------------------------------------
Superior Similar Similar Similar Superior Similar Superior
==============================================================================================================
</TABLE>
<PAGE>
Sale Comparable Number Two 71
Ralph's Mobile Home Park
2300 Bankhead Highway
Austell, Cobb County, Georgia
[PICTURE APPEARS HERE]
Sale Date: September 1997
PROPERTY DESCRIPTION
--------------------
Size/Type: 115 space all age manufactured housing
community
Utilities: All available
Land Description: Generally level, irregularly shaped 15.3-acre
parcel of land with adequate access. Improved
with asphalt-paved streets and streetlights.
Improvements/Amenities: None.
Year Built/Condition: 1963/Good
<PAGE>
Sale Comparable Number Two 72
INCOME DATA
-----------
Annual Occupancy: 95%
Average Lot Rent: $225.00
Effective Gross Income: $294,975
Expenses: $130,890 (44.3% of the effective gross
income)
Net Income: $164,085 ($1,426.83 per space)
SALE DATA
---------
Sale Price: $1,350,000
Cash Equivalent Price: $1,350,000
Grantor: Margaret M. O'Hara
Grantee: Carol and Larry Lawrence
Financing Terms: Cash to Seller
Sales History
(Past 3 Years): None noted.
Market Exposure: Unknown
COMPARISON DATA
---------------
Sale Price/Space: $11,739
Effective Gross Income
Multiplier (EGIM): 4.58
Overall Capitalization
Rate (OAR): 12.15%
Comments: This community is located in suburban
northwest Atlanta.
<TABLE>
==============================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Location Access Visibility Condition Amenities Home Quality Overall
--------------------------------------------------------------------------------------------------------------
Similar Similar Similar Similar Similar Similar Similar
==============================================================================================================
</TABLE>
<PAGE>
Sale Comparable Number Three 73
The Landing
615 Lee Byrd Road
Loganville, Walton County, Georgia
[PICTURE APPEARS HERE]
Sale Date: March 1999
PROPERTY DESCRIPTION
--------------------
Size/Type: 126 space all age manufactured housing
community
Utilities: All Public
Land Description: Generally level, irregularly shaped 23-acre
parcel of land with adequate access. Density
is 5.48 pads per acre. Improved with asphalt-
paved streets, off street parking, fenced
lots and streetlights.
Improvements/Amenities: None.
Year Built/Condition: 1980/Average
<PAGE>
Sale Comparable Number Three 74
INCOME DATA
-----------
Annual Occupancy: 99.0%
Average Lot Rent: $160.00
Effective Gross Income: $232,560
Expenses: $65,651 (28.2% of the effective gross income)
Net Income: $166,909 ($1,324.67 per space)
SALE DATA
---------
Sale Price: $2,000,000
Cash Equivalent Price: $1,800,000
Grantor: N/A
Grantee: Hometown Communities
Financing Terms: Seller financing at favorable terms.
Sales History
(Past 3 Years): None noted
Market Exposure: Unknown
COMPARISON DATA
---------------
Sale Price/Space: $14,286
Effective Gross Income
Multiplier (EGIM): 7.74
Overall Capitalization
Rate (OAR): 9.27%
Comments: According to the grantee, the financing was
at favorable terms; although the terms were
not disclosed. The grantee reported that a
cash equivalent price would be $1,800,000.
<TABLE>
==============================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Location Access Visibility Condition Amenities Home Quality Overall
--------------------------------------------------------------------------------------------------------------
Similar Similar Similar Similar Similar Similar Similar
==============================================================================================================
</TABLE>
<PAGE>
Sale Comparable Number Four 75
Plantation Acres
3962 U. S. Highway 1 South
Augusta, Richmond County, Georgia
[PICTURE APPEARS HERE]
Sale Date: August 1998
PROPERTY DESCRIPTION
--------------------
Size/Type: 188 space all age manufactured housing
community
Utilities: All Public
Land Description: Generally level, irregularly shaped 47.07-
acre parcel of land with adequate access.
Density is 3.99 pads per acre. Improved with
asphalt-paved streets, on street parking and
streetlights.
Improvements/Amenities: No amenities.
Year Built/Condition: 1973/Average
<PAGE>
Sale Comparable Number Four 76
INCOME DATA
-----------
Annual Occupancy: 94.7% (178 of 188 spaces)
Average Lot Rent: $170.00
Effective Gross Income: $375,269
Expenses: $104,773 (27.9% of the effective gross
income)
Net Income: $270,496 ($1,438.81 per space)
SALE DATA
---------
Sale Price: $2,500,000
Cash Equivalent Price: $2,500,000
Grantor: Plantation Acres, Inc.
Grantee: Plantation Acres MHP, LLC
Financing Terms: Cash to seller.
Sales History
(Past 3 Years): None noted
Market Exposure: Unknown
COMPARISON DATA
---------------
Sale Price/Space: $13,298
Effective Gross Income
Multiplier (EGIM): 6.66
Overall Capitalization
Rate (OAR): 10.82%
Comments: Rents were increased by $20 per month
immediately after purchase of the park. Wells
and septic systems provide water and sewer
services for the community.
<TABLE>
==============================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Location Access Visibility Condition Amenities Home Quality Overall
--------------------------------------------------------------------------------------------------------------
Inferior Similar Similar Similar Similar Similar Inferior
==============================================================================================================
</TABLE>
<PAGE>
Sale Comparable Number Five 77
Pine Ridge Mobile Home Park
6465 Highway 9
Alpharetta, Fulton County, Georgia
[PICTURE APPEARS HERE]
Sale Date: December 1997
PROPERTY DESCRIPTION
--------------------
Size/Type: 195-space all age manufactured housing
community
Utilities: All public
Land Description: General level, rectangular shaped, 35.44-acre
parcel with adequate access. Density is 5.5
spaces per acre. Improved with asphalt-paved
streets and streetlights.
Improvements/Amenities: Playground.
Year Built/Condition: 1970/Average
<PAGE>
Sale Comparable Number Five 78
INCOME DATA
-----------
Annual Occupancy: 97.0%
Average Lot Rent: $185.00
Effective Gross Income: $432,510
Expenses: $201,360 (46.6% of the effective gross
income)
Net Income: $231,150 ($1,185.38 per space)
SALE DATA
---------
Sale Price: $2,525,000
Cash Equivalent Price: $2,525,000
Grantor: Rollingwood Limited LP
Grantee: Pine Ridge Associates, LLC
Financing Terms: Cash to seller.
Sales History
(Past 3 Years): None noted
Market Exposure: Unknown
COMPARISON DATA
---------------
Sale Price/Space: $12,949
Effective Gross Income
Multiplier (EGIM): 5.84
Overall Capitalization
Rate (OAR): 9.15%
Comments: The seller increased the rents by $15.00 per
month after the purchase. This community is
located in suburban Atlanta.
<TABLE>
==============================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Location Access Visibility Condition Amenities Home Quality Overall
--------------------------------------------------------------------------------------------------------------
Similar Similar Similar Similar Superior Similar Superior
==============================================================================================================
</TABLE>
<PAGE>
79
COMPARABLE SALES SUMMARY
<TABLE>
<CAPTION>
===============================================================================================================================
No. Name/Location Sale Price/ Number Of Spaces Price/ Average
Sale Date Space Lot Rent
-------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1
Douglas Estates/Flagview MHP $8,525,000 401 $21,259 $268.00
Douglas County, Georgia November 1999
-------------------------------------------------------------------------------------------------------------------------------
2
Ralph's Mobile Home Park $1,350,000 115 $11,739 $225.00
2300 Bankhead Highway September 1997
Austell, Cobb County, Georgia
-------------------------------------------------------------------------------------------------------------------------------
3
The Landing $1,800,000 126 $14,286 $160.00
615 Lee Byrd Road Cash Equivalent
Loganville, Walton County, Georgia March 1999
-------------------------------------------------------------------------------------------------------------------------------
4
Plantation Acres $2,500,000 188 $13,298 $170.00
3962 U. S. Highway 1 South August 1998
Augusta, Richmond County, Georgia
-------------------------------------------------------------------------------------------------------------------------------
5
Pine Ridge Mobile Home Park $2,525,000 195 $12,949 $185.00
6465 Highway 9 December 1997
Alpharetta, Fulton County, Georgia
===============================================================================================================================
<CAPTION>
====================================================================================
No. Name/Location E.G.I.M./ O.A.R.
Expense Ratio
------------------------------------------------------------------------------------
<S> <C> <C> <C>
1
Douglas Estates/Flagview MHP 5.99/ 10.17%
Douglas County, Georgia 40.1%
------------------------------------------------------------------------------------
2
Ralph's Mobile Home Park 4.58/ 12.15%
2300 Bankhead Highway 44.3%
Austell, Cobb County, Georgia
------------------------------------------------------------------------------------
3
The Landing 7.74/ 9.27%
615 Lee Byrd Road 28.2%
Loganville, Walton County, Georgia
------------------------------------------------------------------------------------
4
Plantation Acres 6.66/ 10.82%
3962 U. S. Highway 1 South 27.9%
Augusta, Richmond County, Georgia
------------------------------------------------------------------------------------
5
Pine Ridge Mobile Home Park 5.84/ 9.15%
6465 Highway 9 46.6%
Alpharetta, Fulton County, Georgia
====================================================================================
</TABLE>
<PAGE>
80
[MAP APPEARS HERE]
Sale Comparable Location Map
<PAGE>
Sales Comparison Approach 81
As previously stated, the Sales Comparison Approach involves investigating
recent transfers of properties similar to the subject. All of the sales were fee
simple transactions, with no abnormal financing which would effect the price.
There were no abnormal sale conditions known to have occurred, except as noted.
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.
Effective Gross Income Multiplier (EGIM)
----------------------------------------
The Effective Gross Income Multiplier for the comparable sale properties
ranged between 4.58 and 7.74. 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 and a property's expense ratio.
The subject is an all age community, in a good location. The community has
an expense ratio near the high end of the range of the comparables. The subject
is of similar quality to most of the comparables. Based on these considerations,
we have concluded an EGIM in the low end of the range, processing subject's
Effective Gross Income of $275,381 with an EGIM of 5.5.
Thus, $275,381 x 5.5 is: $1,514,595
Rounded $1,510,000
This equates to $14,660 per space, slightly above the range of comparables.
Price Per Space Analysis
------------------------
Adjustments, typically considered, are location, age and condition,
occupancy, etc., and are reflected in the income generating capabilities of a
community. A tenant is typically willing, absent other factors, to pay more rent
for a better located, newer community with a greater amenity package. Rather
than making a subjective percentage adjustment to the per space sales prices,
the Net Operating Income/Space (NOI/Space) reflects, in most cases, the market
perception of a property's position in the marketplace. Since investors are
mainly concerned with cash flow to service debt, the net operating income
generating capability of a particular community can be used for comparison
purposes. Typically, the higher the NOI/Space is for a community, the higher the
per space sales price. The subject has a NOI/Space of $1,185 in our stabilized
analysis. The NOI/Space and the sales prices per space for the comparables are
shown
<PAGE>
Sales Comparison Approach 82
on the following table. We then compare the percentage difference between each
comparable's NOI/Space and the subject's NOI/Space. For comparables with a
higher NOI/Space, a downward adjustment to the sales price per space is made. An
upward adjustment is made for a comparable with a lower NOI/Space.
NOI/Space and Per Space Sales Price
<TABLE>
<CAPTION>
========================================================================================
COMP 1 COMP 2 COMP 3 COMP 4 COMP 5 SUBJECT
----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
NOI/Space $ 2,163 $ 1,427 $ 1,325 $ 1,439 $ 1,185 $1,185
----------------------------------------------------------------------------------------
Price/Space $21,259 $11,739 $14,286 $13,298 $12,949 N/A
----------------------------------------------------------------------------------------
Percent
Adjustment -24.76% +14.06% +22.86% +13.11% +37.29% N/A
----------------------------------------------------------------------------------------
Adjusted
Price/Space $15,996 $13,390 $17,551 $15,041 $17,778 N/A
========================================================================================
</TABLE>
After adjustments, the indicated range is from $13,390 to $17,778 per
space. This is a wide range and reflective of the varying quality and location
of the comparables. The subject is comparable to sale numbers 1 and 2 in
location and rental structure, although the subject is inferior in condition.
Sale Comparable 2 closed in 1997 and investor demand for manufactured housing is
currently at an all time high. We have and concluded a value at $14,500 per
space.
Thus, 103 spaces x $14,500/Space is: $1,493,500
Rounded, $1,490,000
This value is reflective of the indication from the EGIM method and
considered mutually supportive. We have concluded $1,510,000 via the Sales
Comparison Approach.
<PAGE>
83
FINAL ESTIMATE OF VALUE
-----------------------
The two approaches to value applied in the subject analysis yielded these
conclusions:
Income Capitalization Approach $1,680,000
Sales Comparison Approach $1,510,000
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 and listings 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 property.
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.
Given the relative homogeneity of the locations, the availability of market
data, we have emphasized this approach in the valuation.
The two approaches reflect a narrow range of values and are considered
mutually supportive. Since buyers are most concerned with cash flow to service
debt, we have placed primary emphasis on the income approach. Therefore, our
opinion of the market value of the subject property, based on a reasonable
exposure period of six months, as of April 18, 2000, was:
- ONE MILLION SIX HUNDRED SIXTY THOUSAND DOLLARS -
($1,660,000)
<PAGE>
84
CERTIFICATION
-------------
I certify that, to the best of our 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.
. No one 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
-------------------------
L. Drake Moore, MAI, CCIM
REA#004008
<PAGE>
85
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. The appraisal report may not be reproduced, in whole or in
part, and a third party may not utilize the findings of the report 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 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 that 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.
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
<PAGE>
Assumptions and Limiting Conditions 86
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 in
connection with 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 are not meant to be used 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 projections contained in
the appraisal assume both 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 that 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 property 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; therefore 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 same, it is strongly recommended that an
Engineering/Construction/Environmental inspection be obtained. The value
estimate stated in this appraisal, unless noted otherwise, is predicated on the
assumption that all 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.
<PAGE>
Assumptions and Limiting Conditions 87
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 that 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 88
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 or not 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>
Lawyers Title
Insurance Corporation
Case Number NATIONAL HEADQUARTERS Policy Number
1-134-547P RICHMOND VIRGINIA 85-01-061769
SCHEDULE A
DESCRIPTION - CONTINUED
of 209.02 feet to an iron pin found; running thence south 10 degrees 45 minutes
27 seconds east a distance of 36.08 feet to an iron pin found; running thence
south 10 degrees 39 minutes 49 seconds east a distance of 124.87 feet to an iron
pin found; running thence south 10 degrees 36 minutes 36 seconds east a distance
of 595.52 feet to an iron pin found; running thence south 10 degrees 45 minutes
18 seconds east a distance of 118.10 feet to an iron pin found; running thence
north 88 degrees 31 minutes 51 seconds west a distance of 66.38 feet to an iron
pin found; running thence north 87 degrees 31 minutes 35 seconds west a distance
of 195.17 feet to an iron pin found on the Land Lot Line dividing said Land Lots
437 and 438; running thence south 02 degrees 23 minutes 03 seconds west along
said Land Lot Line a distance of 160.77 feet to an iron pin found at the common
corner of Land Lots 437, 438, 465 and 466 of said District and Section; running
thence north 85 degrees 17 minutes 07 seconds west along said Land Lot Line a
distance of 19.67 feet to an iron pin found; running thence north 85 degrees 07
minutes 22 seconds west along said Land Lot Line a distance of 99.68 feet to an
iron pin found; running thence north 85 degrees 03 minutes 22 seconds west along
said Land Lot Line a distance of 99.89 feet to an iron pin found; running thence
north 85 degrees 05 minutes 59 seconds west along said Land Lot Line a distance
of 99.95 feet to an iron pin found; running thence north 86 degrees 01 minutes
06 seconds west along said Land Lot Line a distance of 199.82 feet to an iron
pin found; running thence north 87 degrees 22 minutes 15 seconds west along said
Land Lot Line a distance of 100.01 feet to an iron pin found; running thence
north 88 degrees 22 minutes 18 seconds west along said Land Lot Line a distance
of 100.19 feet to an iron pin found; running thence north 86 degrees 35 minutes
34 seconds west along said Land Lot Line a distance of 109.47 feet to an iron
pin found; running thence north 00 degrees 48 minutes 27 seconds west a distance
of 102.77 feet to an iron pin found; running thence north 00 degrees 46 minutes
03 seconds west a distance of 500.12 feet to an iron pin found; running thence
north 00 degrees 45 minutes 56 seconds west a distance of 399.61 feet to an iron
pin found; running thence north 00 degrees 44 minutes 38 seconds west a distance
of 199.85 feet to an iron pin found; running thence north 00 degrees 42 minutes
35 seconds west a distance of 131.34 feet to an iron pin found on the Land Lot
Line dividing said Land Lots 360 and 438; running thence north 03 degrees 56
minutes 58 seconds east a distance of 487.30 feet to an iron pin found on the
southern side of said 100-foot right-of-way of Bankhead Highway 78 (said iron
pin also being located a distance of 149.5 feet easterly, as measured along said
right-of-way line, from the intersection of said right-of-way line with the
eastern right-of-way line of Tralee Drive), running thence north 78 degrees 11
minutes 16 seconds east along said southern right-of-way line of Bankhead
Highway 78 a distance of 238.35 feet to the iron pin found at the point of
beginning, containing 31.408 acres, according to said plat of survey.
Being the same property conveyed by Warranty Deed from Richards & Associates
Management Company V, a California limited partnership composed of Maurice F.
Richards, Stanton Richards and Rhodelle Richards, to Windsor Park Properties 5,
a California limited partnership, dated July 15, 1988, filed for record July 19,
1988, recorded in Deed Book 612, page 541, in the Office of the Clerk of the
Superior Court of Douglas County, Georgia.
<PAGE>
FINANCIALS
<PAGE>
RENT ROLL
<PAGE>
PROFILES OF APPRAISERS
<PAGE>
PROFILE OF APPRAISER
L. DRAKE MOORE, MAI, CCIM
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, Flordia
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-conforming 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
CCIM, Certified Commercial Investment Member
State Certified General Real Estate Appraiser
Florida #0002401
Georgia #004008
Texas #1321098-G
Wyoming #456
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
<PAGE>
Profile of Appraiser
Denton West Denton, TX Tropic Isles Palmetto, FL
Dessau Austin, TX Victoria Lakes Lexington, SC
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 orth 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
<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>
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 Flordia.
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>
2
Profile of Appraiser
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 Thonotosassa, 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>
<S> <C> <C> <C>
Recreational Vehicle Parks
--------------------------
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 Suite 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
Dillon 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.
