<PAGE>
Exhibit (c)(1)(E)
SELF CONTAINED COMPLETE
REAL ESTATE APPRAISAL REPORT
143 Space - Village Glen
Manufactured Home Community
1825 Marywood Road
Melbourne, Brevard County, Florida 32934
PREPARED FOR
Mr. Steve Waite
Windsor Corporation
6430 South Quebec
Englewood, Colorado 80111
AS OF
May 1, 2000
PREPARED BY
WHITCOMB REAL ESTATE
<PAGE>
[LETTERHEAD OF WHITECOMB REAL ESTATE]
May 19, 2000
Mr. Steve Waite
Windsor Corporation
6430 South Quebec
Englewood, Colorado 80111
RE: 143 Space - Village Glen
Manufactured Home Community
1825 Marywood Road
Melbourne, Brevard County, Florida 32934
Dear Mr. Waite:
At your request, we have inspected and appraised the above captioned
property. We estimate the prospective market value of the property rights
outlined herein, as of May 1, 2000, based on an exposure period of six months,
to be:
- THREE MILLION DOLLARS -
($3,000,000)
Our value estimate applies to the land as physically constituted, to the
improvements actually in existence and reflects prevailing trends in the local
real estate market. We have made a careful inspection, study, and analysis of
the property, and have considered all factors, which, in our opinion, would tend
to influence the market value of the subject.
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 and those specific
conditions indicated in the engagement letter.
This appraisal assignment was not based on a requested minimum value,
specific value, or the approval of a loan. The intended user of this report is
Windsor Corporation.
Village Glen is an age restricted manufactured home community located on
the east side of Marywood Road, north of Aurora Road in an unincorporated area
of Brevard County, Florida. The property is located in the south central portion
of the county and was originally developed in 1974. We observed the property to
be in good overall condition. There were no major items of
<PAGE>
Mr. Steve Waite
May 19, 2000
Page Two
deferred maintenance noted during the physical inspection of the premises.
Village Glen consists of 143 manufactured home spaces, a clubhouse and
swimming pool. As of the date of inspection, 137 of the manufactured home sites
were occupied. The site rent rates range from $277.00 to $282.00 per site per
month, averaging $278.47. These rents became effective January 1, 2000, when an
increase of $10.00 per manufactured home site took effect.
Our analysis has accounted for a management fee, adequate to ensure
professional management of the property. We have also forecast maintenance
expenditures to maintain the property in adequate repair in order to retain
residents and achieve rental increases. Our analysis and opinions are
contingent on adequate management and maintenance expenditures.
We appreciate this opportunity to be of service to you. If you have any
questions, please do not hesitate to contact us.
Very truly yours,
WHITCOMB REAL ESTATE
/s/ John H. Whitcomb JAG
John H. Whitcomb, MAI, CCIM
St. Cert. Gen. REA #0001234
/s/ William G. Trask JAG
William G. Trask
St. Cert. Gen. REA #0002347
<PAGE>
4
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Title Page
Transmittal
<S> <C>
Table Of Contents.......................................................... 4
Introduction
Photographs Of Subject..................................................... 6
Summary Of Facts And Conclusions........................................... 8
Extent of Confirming, Collecting And Reporting Data........................ 9
Purpose And Function Of The Report......................................... 9
Property Rights Appraised.................................................. 10
Effective Date Of Value.................................................... 10
Appraisal Definitions...................................................... 10
Descriptive Section
Area Description........................................................... 12
Neighborhood Description................................................... 20
Manufactured Home Community Market Overview................................ 23
Land And Site Improvements................................................. 35
Improvement Description.................................................... 37
Ownership And Property History............................................. 39
Occupancy.................................................................. 39
Zoning And Other Land Use Controls......................................... 39
Assessment And Taxes....................................................... 40
Marketability And Exposure Period.......................................... 42
Valuation Section
Highest And Best Use....................................................... 45
Valuation Process.......................................................... 50
Income Capitalization Approach............................................. 51
Sales Comparison Approach.................................................. 67
Final Estimate Of Value.................................................... 84
Certification.............................................................. 85
Assumptions And Limiting Conditions........................................ 86
</TABLE>
Addenda
Legal Description
Profiles Of Appraisers
<PAGE>
INTRODUCTION
<PAGE>
PHOTOGRAPHS OF THE SUBJECT (Taken May 18, 2000) 6
[PICTURE APPEARS HERE]
Entrance to Village Glen
[PICTURE APPEARS HERE]
Typical Street View
<PAGE>
PHOTOGRAPHS OF THE SUBJECT (Taken May 18, 2000) 7
[PICTURE APPEARS HERE]
Marywood Road Facing North
[PICTURE APPEARS HERE]
Marywood Road Facing South
<PAGE>
8
SUMMARY OF FACTS AND CONCLUSIONS
--------------------------------
Property Appraised: 143 Space - Village Glen
------------------- Manufactured Home Community
1825 Marywood Road
Melbourne, Brevard County, Florida
Property Rights Appraised: Fee Simple Interest, subject to tenant leases
--------------------------
Land Area: 27.41 acres
----------
Improvements: Existing 143 manufactured home spaces, a
------------- clubhouse, swimming pool and shuffleboard
courts.
Owner: Windsor Park Properties, 7.
------
Zoning: TR-3, Mobile Home Park, Brevard County
-------
MSA/Census Tract: 4900 (Melbourne/Titusville/Palm Bay MSA) /
----------------- 064121 (Brevard County)
Highest and Best Use:
---------------------
As Vacant: Hold for future development as predicated by
market demand.
As Improved: The current use as a manufactured home
community.
Market Value: Income Approach $3,000,000
------------- Sales Comparison Approach $3,000,000
Final Estimate of Market Value: $3,000,000
-------------------------------
Date of Appraisal: May 1, 2000
------------------
Dates of Inspection: May 18, 2000
--------------------
<PAGE>
9
EXTENT OF CONFIRMING, COLLECTING AND REPORTING DATA
---------------------------------------------------
William G. Trask inspected the property on May 18, 2000. The property's
physical data is based on information provided by the owner, confirmed by
physical inspection of the premises and information obtained from the Brevard
County Property Appraiser's office.
Information regarding the subject's land use plan designation and zoning
are based on discussions with representatives of Brevard County, Florida. We
have analyzed the property with regard to its Highest and Best Use, as if the
land was vacant and available for development and as it has been currently
improved.
We have employed only the Income Capitalization and Sales Comparison
Approaches in our estimate of the market value of the property. The Cost
Approach has not been used in this valuation, due to the subjectivity of
entrepreneurial profit estimates. Recent data for the Income Capitalization and
Sales Comparison Approaches has been generated from local real estate brokers,
investors (local and nationally), owners, managers, and from our inspection of
the supporting rental neighborhood. All of the market data has been confirmed
with buyers, sellers, or other real estate professionals involved with or
knowledgeable of the transaction.
PURPOSE AND FUNCTION OF THE APPRAISAL
-------------------------------------
The purpose of the appraisal is to express our opinion of the "As Is"
market value of the fee simple interest, subject to existing leases, of the real
estate as of May 1, 2000.
Rental rates and increases are governed by the community's prospectus,
filed with the Florida Department of Business and Professional Regulation, until
a unit is removed from the community. At that time, a new prospectus can be
supplied to the tenant. The prospectus for Village Glen has been assigned
identification numbers PRMZ001401-P10538 and PRMZ001401-PA0538 AT. A copy of
the prospectus has been included in the Addenda of this report.
We have surveyed the local market rents, but emphasis has been
appropriately given to the prospectus, in the forecast of rental levels at the
subject.
The information, opinions, and conclusions contained in this report have
been prepared as a basis for loan underwriting.
<PAGE>
10
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 May 1, 2000.
APPRAISAL DEFINITIONS
---------------------
Market Value is defined as: The most probable price which a property should
bring in a competitive and open market under all conditions requisite to a fair
sale, the buyer and seller each acting prudently, knowledgeably and assuming the
price is not affected by undue stimulus.
Implicit in this definition is the consummation of a sale as of a specified
date and the passing of title from seller to buyer under conditions whereby:
. Buyer and Seller are typically motivated;
. Both parties are well informed or well advised, and each acting in
what he considers his own best interest;
. A reasonable time is allowed for exposure in the open market;
. Payment is made in terms of cash in U.S. dollars or in terms of
financial arrangements comparable thereto; and
. The price represents the normal consideration for the property sold
unaffected by special or creative financing or sales concessions
granted by anyone associated with the sale./1/
Fee Simple Interest is defined as: The absolute ownership unencumbered by
any other interest or estate subject only to the four powers of government./2/
_______________
/1/ The Office of the Comptroller of Currency, 12 CFR 564.2(f).
/2/ The Dictionary of Real Estate Appraisal, Third Edition, Appraisal Institute,
1993.
<PAGE>
DESCRIPTIVE SECTION
<PAGE>
12
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
area analysis usually focuses on the social, economic, governmental and
environmental forces that affect real estate.
The first step in estimating the highest and best use of the subject
property is an examination of the social, economic, governmental and
environmental forces affecting property values in the Brevard County area. In
the following discussion, we have attempted to present sufficient data to inform
readers unfamiliar with the state of Florida, Brevard County and the Melbourne
metropolitan area and its environs.
The subject is located in the State of Florida, nicknamed the Sunshine
State. Florida has a strong economic base consisting of tourism, real estate,
construction, manufacturing, finance, defense contracting and insurance.
Florida
-------
The population of Florida has grown rapidly in recent decades. In 1950,
Florida was the twentieth largest state in the nation with a population
approaching 3 million. By 1990, Florida had become the fourth largest state in
the nation with a population of nearly 13 million. This growth saw dramatic
changes in the demographic composition of the population, brought about by a
higher population age, a lower minority population and increased per capita
wealth. As shown in the following table, the population growth was explosive
during the 1970's and 1980's, slowing in the early 1990's. This trend is
expected to continue in the future as shown by the 2004 and 2009 projections.
Florida Population Growth and Projections
<TABLE>
<CAPTION>
============================================
Year Population Percent
Change
--------------------------------------------
<S> <C> <C>
1970 6,790,929 N/A
--------------------------------------------
1980 9,746,324 43.5%
--------------------------------------------
1990 12,937,926 32.7%
--------------------------------------------
1999* 15,167,025 17.2%
--------------------------------------------
2004* 16,416,782 8.2%
--------------------------------------------
2009* 17,648,165 7.5%
============================================
</TABLE>
United States Census Bureau.
*Florida Trend 2000 Economic Yearbook, April 200.
<PAGE>
Area Description 13
The slower rate of future population growth will be partially attributable
to more stringent growth management policies. Growth management legislation
will curtail the demand for developable properties, which will restrict the
supply of a given population. The result should be more modest returns on real
estate investments with investors having to develop feasible projects in areas
where sufficient demand exists.
The dynamic complexities in the demographic composition had a significant
impact on the Florida real estate market through increased demand for housing
and the corresponding commercial development that usually follows. Until the
recessionary period of the early nineties and the financial institution
collapse, Florida was one of the most heavily invested states in the nation for
speculative real estate development.
Geography
---------
The subject is located in the south central portion of Brevard County and
lies just north of the City of Melbourne municipal limits. More specifically,
the subject property is located on the east side of Marywood Road north of
Aurora Road. This location is within one-mile northeast the intersection of Eau
Gallie Boulevard and Interstate 95.
Brevard County is located along the Atlantic coastline of Central Florida,
bounded by Volusia, Orange, Osceola and Indian River Counties to the north, west
and south respectively. The Indian River runs the entire length of the county
and is separated from the Atlantic Ocean by a series of narrow barrier reefs and
islands. Titusville, the county seat, is located approximately 40 miles east of
Orlando and approximately 142 miles south of Jacksonville, in the northern
portion of the county.
The county's total land area is approximately 1,557 square miles and is the
18th largest county in the state of Florida. The unincorporated areas in the
county account for 859 square miles of land area. However, much of this area is
located in the western portion of the county and consists mainly of
undevelopable marshland. Approximately 30%, or 538 square miles of the county
consists of water. Thirteen municipalities, for the most part are located along
the coastline, encompass the remaining land area.
Population
----------
Brevard County's highest period of population growth occurred during the
1980's. According to the U. S. Census Bureau, the 1990 population was 398,978
persons. This was an increase of 126,019 persons (or 46%) from the 1980 census,
which reported the population at 272,959 persons. According to the 1999 Florida
------------
Statistical Abstract, published by the University of Florida Bureau of Economic
--------------------
and Business Research (BEBR), the 1998 estimate of the population was 465,825
persons. This estimate represents a 16.8% increase over the 1990 U. S. Census
estimates and indicates a continuance of the trend of the last decade.
Estimates for the county for the year 2005, are 523,931 persons, growing to
562,330 by the year 2010.
<PAGE>
Area Description 14
The greatest percentage of the population is in the 25 to 44 year old
group, which numbered 133,691 persons, or 29% of the total population estimate.
There are an estimated 107,980 persons (23%) of the population in the 45 to 64
year old age group. The prime labor group, therefore, comprised approximately
52% of the total population. The 65 years and over age group is estimated at
84,793 persons or 18% of the total population and the median age of the county
was 39.5 years. According to the BEBR estimates, in-migration accounted for
approximately 86% of the growth in population between 1990 and 1998.
Due primarily to the economic development of Brevard County, the population
growth has not occurred evenly throughout the area. The bedroom communities of
the Space Center area, which are located in the northern section of the county,
have shown a slower growth rate due to the decrease in employment over the past
twenty years. The central section of Brevard, where the beach communities are
located, have shown a moderate growth primarily due to the Patrick Air Force
Base, which is a major employer. The area that has experienced the most growth
in Brevard County is the southern section. This area's growth is predominantly
attributed to the expansion of the area's industrial community.
The population growth for the entire county is anticipated to continue
through the first part of the next century. The southern portion of the county
will continue to grow until the developable land becomes scarce. The northern
and central areas of the county are also projected to experience an increase in
their growth due to the resumption of the space shuttle program, industrial
development near Titusville and lower housing costs.
Industry/Employment
-------------------
According to the Florida State Employment Service, the total civilian labor
force for Brevard County in 1998 was 204,396, with an employment of 195,650 and
annual average unemployment rate of 4.3%, or 8,746. The jobless rate compares
favorable to the state rate of 5.5% and the national rate of 5.6%. Since 1988,
the total labor force, employment and unemployment have shown moderate increases
due to the combined forces of a national recession and industry cutbacks in the
local space programs.
The majority of the growth experienced in Brevard County is due to the
space program and several large technology corporations. NASA's Kennedy Space
Center and the Cape Canaveral Air Force Station, which are both located in north
Brevard County, and their affiliated contractors, accounted for the employment
of approximately 38,550 people in 1998. The NASA contractors include
Lockheed/Martin, EG&G, McDonnell Douglas Astronautics Co., Northrop/Grumman
Melbourne Systems, Rockwell International, General Dynamics and Boeing Aerospace
Operations. As of 1997, 24 of the largest 26 companies in Brevard County were
aerospace-related.
Within the central area of the county, specifically the Cocoa Beach area,
there are twenty
<PAGE>
Area Description 15
Fortune 500 companies. Among those represented are Bell South, Borden,
Brunswick, Coca-Cola, ITT, Lone Star Industries, Lockheed/Martin, TRW and United
Technologies.
Another avenue for growth for the central portion of the county is Port
Canaveral, the third largest cruise-passenger port in the country. This deep-
water port is a popular port-of-call for cruise ships arriving and departing
from all parts of the world, including the Bahamas and Caribbean Islands, New
York and Europe. The number of passengers boarding and disembarking has
dramatically increased within the recent past. Furthermore, Port Canaveral
provides the facilities to import and export commercial materials on an
international basis. Additionally, this port is also home to a large commercial
fishing fleet and charter crafts.
Construction
------------
As previously mentioned in the breakdown of employment by sector,
construction in Brevard County has been declining since the mid-1980's. In
1982, as interest rates started declining, construction increased.
Consequently, the number of building permits issued peaked during 1984-85. This
growth simultaneously occurred while the Kennedy Space Center and its affiliated
companies expanded. In September, 1986, the disaster of the space shuttle,
Challenger, halted the space program. Massive layoffs within the industry and a
national recession created a leveling of new construction from 1986 to the
present. The total number of building permits issued by the County Building
Department further illustrates this scenario. In 1997, the total number of
residential building permits issued were 3,112, an increase of 128 from the
previous year. Demand for speculative commercial and industrial buildings has
lowered as well. However, as the economy turns around demand for new
construction, both residential and non-residential, alike, are predicted to
increase in the future.
Tourism
-------
Brevard County's moderate year-round climate with an average annual
temperature of 73 degrees provides an environment in which many people choose to
reside and vacation. Additionally, the proximity of the Atlantic Ocean and
Brevard's 72 miles of beaches also encourages outdoor recreation for boating,
fishing and surfing enthusiasts. The area's major attractions, NASA's space
center and Port Canaveral, further attract many local, national and
international visitors. The relative closeness of Florida's other world-
renowned attractions, such as Orlando's Disney World, Universal Studios and Sea
World and Daytona's Speedway, provide additional incentive to visit the Brevard
County area.
Transportation
--------------
The transportation system of Brevard County provides convenient
accessibility to all the cities and communities not only within its own locale,
but to neighboring areas as well. The county's transportation network involves
ground, air and water services, as further discussed below.
<PAGE>
Area Description 16
Traversing throughout a major portion of the eastern coast of the state are
Interstate 95 and U. S. Highway 1, both of which are north/south bound routes.
These two routes connect Brevard County with its northern and southern
neighboring counties. Access from the mainland to the nearby islands is easily
reached via numerous connecting causeways. And within the islands, Highway A1A,
is the main north/south bound thoroughfare. Additional secondary roads and
tertiary streets are also available within the various cities and communities.
Air transportation for Brevard County is provided by three airports, two of
which are local. Melbourne International Airport, located towards the southern
portion of Brevard County, provides domestic and international flight service.
The Space Center Executive Airport, located in the county seat of Titusville, is
a general aviation airport. Additional flight service to the area is provided
by Orlando's International Airport, which is located about 45 miles west of
Brevard.
As previously mentioned, Port Canaveral is a deep-water port-of-entry,
which provides both domestic and international seafaring service. Additionally,
this port has direct access to rail and piggyback facilities and the national
intermodal rail network. In addition to the above-named transportation network,
Brevard County also has parcel delivery services available through such carriers
as: Airborne; Emery; Federal Express; Greyhound; Purolator; Roadway; and, United
Parcel Service. There are approximately 13 such air freight and cargo carriers
offering daily service to Brevard County.
Income
------
Brevard County, with all of its high-tech industries, has a tremendous
resource of skilled, semi-skilled and unskilled workers for the manufacturing
sector. The area also has the state's highest concentration of engineers and
technicians. Total per capita personal income has grown continuously over the
last decade. The per capita personal income for Brevard County in 1980 was
$9,193, increasing to $17,805 by 1990. Florida posted slightly higher figures
of $9,202 and $18,024 for the same period. The per capita income estimate for
1999 was $20,918 for Brevard County, while the State of Florida was $23,285.
Utilities
---------
As the county is continuing to expand, so does its need for utilities.
Currently, the sources providing the utilities for Brevard County are: Florida
Power & Light for electricity, City Gas Company of Florida for natural gas;
water and sewer are available in the major municipalities; and BellSouth
provides the local telephone service.
Education
---------
Numerous public and private schools for primary, secondary and advanced
education service Brevard County. The School Board of Brevard County operates
28 public schools within
<PAGE>
Area Description 17
the county. There are also ten private primary and secondary schools. Brevard
Community College, which is affiliated with the Florida University system, has
branches in both cities of Cocoa and Melbourne. The Florida Institute of
Technology is also located in Melbourne and offers numerous undergraduate and
graduate degree programs. A branch of the University of Central Florida is
located adjacent to the Brevard Community College campus in Cocoa. Rollins
College has an annex at Patrick Air Force Base, just south of Cocoa Beach.
Concurrency
-----------
The State of Florida's Local Government Comprehensive Planning Act of 1975
required all counties and municipalities in the state to develop, implement and
monitor local comprehensive/growth management plans. Pursuant to this law, each
county was required to publish Land Use Policy Guides, both in written and map
form, which designate desired types of land use and probable zoning for all
county lands not within their boundaries.
Under Florida's 1985 Growth Management Act, a concept called "concurrency
was set for to require that adequate roads, sewers, schools and other facilities
be in place when local officials approve new development. Fearing restrictions
on growth, developers, builders and Realtors have vehemently lobbied the State
Legislature to alter the requirement.
At present, concurrency requires developers to agree to provide necessary
infrastructure before new developments are approved. However, in some areas,
moratoriums on new development are being implemented to allow government staff
sufficient time to study the affects of further growth and to develop plans,
both on-site and off will likely result in a protracted approval processes, and
ultimately entail more costs to the private sector.
Any proposed large development that will have impacts on traffic, noise,
air quality, etc. that go beyond the immediate vicinity, must go through
Development of Region Impact (DRI), a regional planning council. The Council
studies the proposed development and its potential impacts, then makes
recommendations to the appropriate local governmental entity regarding whether
the development should be approved and what, if any, constraints or mitigation
requirements should be imposed to minimize adverse regional impacts.
Conclusion
----------
In summary, Brevard County has experienced a slower growth pattern since
the mid-1980's, as indicated by both the population and construction levels.
This is primarily attributed to the national recession and local industry
cutbacks in the aerospace program. However, with the present resurgence of the
space shuttle program and the expansion of the local high-technology industry,
it is anticipated that the county will continue to grow although at a pace
slower than experienced during the 1980's. The area has much to offer to both
resident and tourist alike. Namely, Brevard County has a moderate year-round
climate, close proximity to the Atlantic Ocean, 72 miles of beaches, a
diversified employment with major sophisticated high-tech
<PAGE>
Area Description 18
manufacturers, along with NASA's space center, local area attractions, an
excellent transportation network, which includes an international port, Port
Canaveral and Melbourne International Airport, together with an established
infrastructure.
Collectively, all of these factors enable Brevard County to be a popular
area within the state of Florida for both leisure and employment lifestyles.
<PAGE>
[AREA MAP APPEARS HERE]
<PAGE>
20
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.
Location and Boundaries
-----------------------
The subject property is located on the east side of Marywood Road, north of
Aurora Road and just north of the municipal limits of the City of Melbourne.
This location places the subject approximately six miles northwest of downtown
Melbourne. The neighborhood is generally bounded by the Interstate 95 corridor
to the west, the Indian River to the east, Eau Gallie Boulevard to the south and
Wickham Road to the north. The subject property lies in the southwestern
portion of the neighborhood. Large portions of the neighborhood are within the
unincorporated area of Brevard County.
Access
------
Access to the neighborhood is rated above average. The access to the
property is good, as Aurora Road is a two-lane roadway bisecting the southern
portion of the neighborhood in an east/west direction. The property is located
approximately one mile northeast of the intersection of Eau Gallie Boulevard and
Interstate 95. Access to Interstate 95 is also available south of the subject
at U. S. Highway 192 or north of the property at Wickham Road.
Neighborhood Characteristics and Housing
----------------------------------------
The neighborhood offers all amenities and shopping, with schools, churches,
and medical facilities located throughout the area. Retail development is
mainly focused along the Wickham Road, Eau Gallie Boulevard and Sarno Road
corridors.
Housing around the subject property consists of most forms of residential
development. All forms of residential development priced in the $50,000 to
$70,000 range, surround the subject. Further to the east are the U. S. Highway
1 corridor and the Intracoastal Waterway, while west of the Interstate 95
corridor are large areas of vacant and agricultural lands. The municipal limits
of the City of Melbourne are located just south and east of the subject.
While the subject competes with all forms of housing to a certain degree,
the closest competition is other manufactured housing communities. 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. While the subject is not the least expensive form of housing in the
neighborhood, it is also not the most expensive.
Summary and Conclusion
----------------------
<PAGE>
Neighborhood Description 21
The subject property's location in regard to the local amenities in the
form of shopping, recreational and activity centers is considered good. The
infrastructure is in-place in the neighborhood and concurrency is not an issue
in development. General real estate values have been static over the last three
to four year period, although construction has been continuing at a moderate
pace, on properties purchased during that period.
Future infill development in the neighborhood is expected to be at a much
slower pace, due primarily to the advanced degree of existing development and
the slow economic pace. The subject will benefit from its excellent location and
the expected future population growth and is a competitive form of housing in
the local market.
<PAGE>
[NEIGHBORHOOD MAP APPEARS HERE]
<PAGE>
Manufactured Housing Community Market Overview 23
MANUFACTURED HOME COMMUNITY MARKET OVERVIEW
-------------------------------------------
The manufactured home industry in the State of Florida has prospered and
matured, over the past twenty years, as a direct result of the advancements in
manufactured home construction techniques and the continued ability of producers
and dealers to make manufactured homes 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 home 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 home site.
According to the 1990 U. S. Census, 1,290,000 people occupied 762,855
manufactured homes in the State of Florida. These totals were the highest in
the United States with only Texas and California having manufactured home
populations that exceed one million. The measure of the significance of the
manufactured home in the state is evidenced by the fact that nearly 12.5% of all
housing units in the state were manufactured homes, as of 1990. The table below
lists the top five counties in the state, the number of manufactured homes and
the percentage of the state total of manufactured homes.
<TABLE>
<CAPTION>
================================================
Manufactured Housing Communities
Top Five Counties In Florida
------------------------------------------------
County No. Of Homes Pct. Total Housing
<S> <C> <C>
Pinellas 52,207 6.84%
------------------------------------------------
Polk 51,768 6.36%
------------------------------------------------
Hillsborough 42,314 5.55%
------------------------------------------------
Pasco 40,391 5.29%
------------------------------------------------
Lake 26,935 3.53%
------------------------------------------------
Florida 762,855 100.00%
================================================
Source: 1990 U.S. Census
</TABLE>
As shown in the table on the following page, sales have decreased 39%
since 1985, again due principally to restriction imposed by government
regulations as well as difficult economic times. The 1996 through 1998
statewide figures show a varied trend, with significant increases over the 1991
sales.
<PAGE>
Manufactured Housing Community Market Overview 24
Single Family Housing
Site Built vs. Manufactured Home Sales
Florida and Brevard County 1983 to 1998
<TABLE>
<CAPTION>
==================================================================
State of Florida Brevard County
------------------------------------------------------------------
Year Housing Mfd. Mfd. Housing Mfd. Mfd.
Starts Home Homes % Starts Home Homes %
Sales of Total Sales of Total
------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1983 99,164 29,244 22.77% 4,602 683 12.92%
------------------------------------------------------------------
1984 92,386 29,442 24.17% 4,582 690 13.09%
------------------------------------------------------------------
1985 94,947 30,126 24.09% 5,436 635 10.46%
------------------------------------------------------------------
1986 97,146 27,233 21.90% 4,284 951 18.17%
------------------------------------------------------------------
1987 106,650 25,446 19.26% 4,585 703 13.29%
------------------------------------------------------------------
1988 99,178 23,315 19.03% 4,674 628 11.84%
------------------------------------------------------------------
1989 97,474 21,821 18.33% 4,599 585 11.28%
------------------------------------------------------------------
1990 72,126 17,483 19.51% 4,254 501 10.54%
------------------------------------------------------------------
1991 70,925 12,572 15.06% 2,898 251 7.97%
------------------------------------------------------------------
1992 83,228 14,172 14.55% 3,533 251 6.63%
------------------------------------------------------------------
1993 91,016 15,964 14.92% 3,722 257 6.46%
------------------------------------------------------------------
1994 96,293 17,067 15.06% 3,631 254 6.54%
------------------------------------------------------------------
1995 84,877 16,199 16.03% 2,553 224 8.07%
------------------------------------------------------------------
1996 91,000 15,905 14.88% 2,973 179 5.68%
------------------------------------------------------------------
1997 90,268 18,242 16.81% 2,966 199 6.29%
------------------------------------------------------------------
1998 97,870 19,035 16.28% 3,237 203 5.90%
==================================================================
</TABLE>
Source: Florida Manufactured Housing Association, Statistical Package, 1998.
Although recent trends indicate sales of manufactured homes to be far below
the peak of the mid eighties, demand within good quality manufactured housing
communities is still strong according to recent publications. Brevard County, as
shown, has occupied a very small share of the manufactured housing market in the
state of Florida, a trend that appears to be continuing.
According to the Florida Manufactured Housing Association data, there
are 142
<PAGE>
Manufactured Housing Community Market Overview 25
manufactured housing communities in Brevard County. Of this total, there are 35
communities (approximately 25% of the total), with 101 or more spaces.
Additionally, 71 of the communities, or approximately 50% of the total, are in
the 26 to 100-space range. Approximately 25% of the manufactured housing
communities in Brevard County have less than 100 spaces. The large percentage of
large communities points to an established and sophisticated marketplace, with a
variety of ownership forms. The subject, at 143 spaces, is one of the mid sized
communities in Brevard County.
The rapid growth in Florida during the 1960's and 1970's outstripped the
ability of county and municipal governments to provide adequate infrastructure
improvements. This precipitated state legislation mandating that each county
submits an acceptable Comprehensive Plan. As previously discussed in the Area
Description section of this report, the concept of Concurrency required all
municipalities with zoning jurisdiction to adjust their zoning codes and reach
"substantial conformance" to county-wide land use plan. Many municipal planners
were forced to scale back the total developable inventory in their communities,
resulting in decreased projections of future municipal revenues from property
taxes. Manufactured housing communities were viewed as a poor developmental
alternative in many municipalities since they produce less property tax for the
municipality while creating about the same infrastructure burden. While many
counties have instituted a moratorium on the development of new manufactured
housing communities, others have imposed severe limitations on the development
of manufactured housing communities, typically found in the form of restrictive
impact fees (or transportation fees). It was noted that approved communities
have been allowed to develop to capacity.
Based on our conversations with Brevard County officials, it is readily
apparent that it has become increasingly more difficult to rezone sites to
manufactured home use, with governmental restrictions and increasing impact
fees, much of the developer's profit has been taken away. When coupled with
infrastructure costs dictated by concurrency, the cost of development can
increase to a point that makes the development of a manufactured home community
financially unfeasible. Hence, there is limited inventory and future supply will
be limited.
Additionally, our survey of the smaller municipalities has indicated that
additional fees are incurred for community development and are generally based
on the community's capacity. These fees vary among the individual
municipalities. The overall effect has been the decline in the development of
new manufactured housing communities in recent years. The difficult economic
times of the early 1990's and the lack of land for development have been
contributing factors to the inhibited growth in the state.
In the early 1980's, lot rental rates in most quality communities increased
100% or more, while vacancies, at that time, were negligible. Spiraling rent
increases and the lack of a viable alternative for manufactured home owners had
resulted in problems in many communities in the form of rent strikes, picket
lines, and a high percentage of homes made available for resale.
<PAGE>
Manufactured Housing Community Market Overview 26
An additional restriction, which has greatly impacted the operation of
manufactured housing communities, was the 1984 Florida Mobile Home Act. This Act
established the Bureau of Mobile Homes of the Department of Business and
Professional Regulation and further, set out a list of requirements for
community owners and residents under Chapter 723 of the Florida Statutes.
The law requires manufactured home community owners to file a prospectus
with the Bureau of Mobile Homes fully describing the community and its rental
agreements and further requires owners to distribute the prospectus to all
community residents. In addition, rental rates must pass the test of being
reasonable. The code states:/3/
1. For the purpose of this section, a lot rental amount that is in excess
of market rent shall be considered unreasonable.
2. Market rent means that rent which would result from market forces
absent an unequal bargaining position between mobile home park owners
and mobile home owners.
3. In determining market rent, the court may consider rents charged by
comparable mobile home parks in its competitive area. To be
comparable, a mobile home park must offer similar facilities,
services, amenities, and management.
4. In determining whether a rent increase or resulting lot rental amount
is unreasonable, the court may consider economic or other factors, but
not limited to, increases or decreases in the consumer price index,
published by the Bureau of Labor Statistics of the Department of
Labor, increases or decreases in operating costs or taxes and prior
disclosures.
5. An arbitrator or mediator under sections 723.037, 723.038 and 723.0381
shall employ the same standards as set forth in this section.
The statute established procedures that the community owner must follow in
order to affect rental rate increases and, perhaps most importantly, requires
that a community owner who wishes to sell his community must first offer it (at
the owner's price and terms) to the community's homeowners association.
Current HUD wind standards are more stringent for manufactured housing than
they are for conventional site built housing. These wind standards were created
in response to Hurricane Andrew. Additionally, many insurance companies are
hesitant to write business interruption coverage for manufactured housing
communities in coastal Florida. However, business interruption insurance only
covers losses sustained until all debris is cleared away and the community is
again fit for occupancy, the point when the insurance coverage ends. Therefore,
______________
/3/ History: Section 1, Chapters 84-90 and Section 9, Chapters 90-198.
<PAGE>
Manufactured Housing Community Market Overview 27
the insurance coverage is available for a typically short period of time. These
changes do not appear to have had a major effect on the demand for manufactured
homes, as market demand has actually strengthened. It is apparent that the
market reception for manufactured homes is as a continued source of quality and
affordable housing.
Rental Rates and Occupancy
--------------------------
There is a wide range of rates in the marketplace, based on the project and
the amenities offered. Generally speaking, a standard (non corner/no view
amenity) pad ranges between $191.50 per month to $343.50 per month. Premiums
are also attached to pads with a corner or view amenity, and these can run as
high as $25 per month above the standard pad pricing, although these premiums
are not generally found in smaller communities. Services included in the rental
rate vary by community, with higher rental rates indicative of more services.
The subject averages $278.47 per lot (based on 143 lots), per month, with
the rent range from $277.00 to $282.00. The local market supports the subject
rents. No rent increase is planned at the current time.
Most importantly, regardless of the competitive rental rates shown by the
competitive properties, the subject community is governed exclusively by the
Prospectus, which specifically addresses annual rental increases and other
charges. A copy of the Prospectus has been included in the Addenda to this
report. Income forecasts were based upon current rent levels.
The subject is a 143-space, fully developed, age restricted manufactured
housing community. The communities that are most competitive with the subject
have been detailed on the following pages. These four communities are fully
developed and are currently between 94.4% and 100.0% occupied. The physical
occupancy at the subject is currently 95.8%. The manager occupies one space
rent free and 136 occupied sites produce rent resulting in an economic occupancy
of 95.1%. The physical occupancy appears to be slightly below the sub-market
occupancy of approximately 95.9%.
<PAGE>
Manufactured Housing Community Market Overview 28
Summary
-------
The State of Florida experienced high levels of growth in the manufactured
housing industry during the 1980's. Sales climbed steadily through the late
seventies and early eighties, peaking in 1985. Since that time sales showed a
steady decline each year through 1991. Sales in 1992, 1993 and 1994 indicated a
reversal from this most recent declining trend and have further increased in
1997 and 1998.
Manufactured home community owners, who in recent years have benefited from
a "captive" market and little competitive new supply, now find their interests
sandwiched between those of county and municipal authorities on the one hand,
and those of state regulators on the other. The upshot is likely to be that
although occupancies in manufactured housing communities will remain high,
future rent increases will not likely be as great as they have been.
<PAGE>
29
RENT COMPARABLE NUMBER ONE
--------------------------
Lamplighter Village
500 North John Rodes Boulevard
Melbourne, Brevard County, Florida
[PICTURE APPEARS HERE]
Location: West side of John Rodes Boulevard, south of Eau
Gallie Boulevard.
Number of Spaces: 639
Property Description: Age restricted manufactured housing community
built in 1973.
Monthly Rental Rates: $326.00 to $349.00
Occupancy: 94.5% (604 of 639)
Services Included in Rates: Lawn mowing.
Amenities: Clubhouse, pool, shuffleboard, tennis and
miniature golf.
Verification/Date: Karen, Community Manager on May 16, 2000.
Comments: The last rental increase was $17 per month in
January 2000. No concessions are offered.
================================================================================
Location Access Visibility Condition Amenities Home Quality Overall
Similar Similar Superior Similar Superior Similar Superior
================================================================================
<PAGE>
30
RENT COMPARABLE NUMBER TWO
--------------------------
Casa Loma Estates
6560 North Harbor City Boulevard
Melbourne, Brevard County, Florida
[PICTURE APPEARS HERE]
Location: West side of U. S. Highway 1, north of the Pineda
Causeway.
Number of Spaces: 108
Property Description: Age restricted manufactured housing community
built in 1954.
Monthly Rental Rates: $235.00 to $250.00
Occupancy: 94.4% (102 of 108)
Services Included in Rates: Water and trash collection.
Amenities: Clubhouse, shuffleboard and horseshoes.
Verification/Date: Ray, Community Manager on May 18, 2000.
Comments: This property is located northeast of the subject.
The last rent increase was January 2000 and was
$10.00 per space.
================================================================================
Location Access Visibility Condition Amenities Home Quality Overall
Similar Similar Similar Similar Similar Similar Similar
================================================================================
<PAGE>
31
RENT COMPARABLE NUMBER THREE
----------------------------
Arrowood
3500 Fell Road
Melbourne, Brevard County, Florida
[PICTURE APPEARS HERE]
Location: North side of Fell Road, east of Hollywood
Boulevard.
Number of Spaces: 204
Property Description: Age restricted manufactured housing community
built in 1979.
Monthly Rental Rates: $191.50 to $206.50
Occupancy: 100.0% (204 of 204)
Services Included in Rates: Trash collection.
Amenities: Clubhouse, pool, putting green, bocci and
shuffleboard.
Verification/Date: Community Manager on May 18, 2000.
Comments: The last rent increase was January 2000 and was
$6.50.
================================================================================
Location Access Visibility Condition Amenities Home Quality Overall
Similar Similar Similar Similar Superior Similar Similar
================================================================================
<PAGE>
32
RENT COMPARABLE NUMBER FOUR
---------------------------
Lakewood Village
3245 South Babcock Street
Melbourne, Brevard County, Florida
[PICTURE APPEARS HERE]
Location: East side of South Babcock Street, south of
University Boulevard.
Number of Spaces: 340
Property Description: Age-restricted manufactured housing community
built in 1973.
Monthly Rental Rates: $343.50 to $368.50
Occupancy: 96.5% (328 of 340)
Services Included in Rates: Water, sewer, basic cable television and trash
collection.
Amenities: Clubhouse, pool, exercise room, executive golf
course and shuffleboard.
Verification/Date: Shirley, Community Manager on May 16, 2000.
Comments: This is a larger, age-restricted community located
southeast of the subject.
================================================================================
Location Access Visibility Condition Amenities Home Quality Overall
Similar Similar Superior Similar Superior Similar Superior
================================================================================
<PAGE>
RENTAL COMPARABLE CHART
<TABLE>
<CAPTION>
====================================================================================================================================
Occ.
Sites/Sites Monthly
No. Name/Location % Occ. Rental Rates Services Included Amenities
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1 Lamplighter Village 604/639 $326.00 to Lawn mowing. Clubhouse, pool,
500 North John Rodes Boulevard 94.5% $349.00 shuffleboard, tennis and
Melbourne, Brevard County Florida miniature golf.
------------------------------------------------------------------------------------------------------------------------------------
2 Casa Loma Estates 102/108 $235.00 to Water and trash Clubhouse, shuffleboard
6560 North Harbor City Boulevard 94.4% $250.00 collection. and horseshoes.
Melbourne, Brevard County, Florida
------------------------------------------------------------------------------------------------------------------------------------
3 Arrowood 204/204 $191.50 to Trash collection. Clubhouse, pool,
3500 Fell Road 100.0% $206.50 shuffleboard, bocci and
Melbourne, Brevard County, Florida putting green.
------------------------------------------------------------------------------------------------------------------------------------
4 Lakewood Village 328/340 $343.50 to Water, sewer, basic Clubhouse, pool, exercise
3245 South Babcock Street 96.5% $368.50 cable television and room, executive golf
Melbourne, Brevard County, Florida trash collection. course and shuffleboard.
------------------------------------------------------------------------------------------------------------------------------------
Subj. Village Glen 137/143 $277.00 to Trash collection and Clubhouse, pool and
1825 Marywood Road 95.8% $282.00 irrigation water. laundry.
Melbourne, Brevard County, Florida
====================================================================================================================================
</TABLE>
<PAGE>
[RENT COMPARABLES MAP APPEARS HERE]
<PAGE>
35
LAND AND SITE IMPROVEMENTS
--------------------------
The subject site is a rectangular shaped parcel of land containing
approximately 27.41 acres of gross area. The site is presently developed with
143 manufactured housing spaces. The tract is generally level and at street
grade and drainage of the tract appears adequate. We observed no obvious
adverse soil or subsoil conditions during the physical inspection of the site.
Utility services connected and in service on the date of valuation include
the following:
Sanitary Sewer: City of Melbourne.
--------------
Storm Sewer: On site drainage system.
-----------
Water: City of Melbourne.
-----
Telephone: BellSouth
---------
Electric: Florida Power and Light
--------
Ingress to and egress from the subject community is via Marywood Road,
north of Aurora Road. The individual lots, in the community, are accessed by
roadways, which are laid-out in a grid pattern, maximizing the use of the site,
typical of manufactured housing communities. Roadway improvements include:
Street-bed: Marywood Road is an asphalt paved two-lane roadway. The
---------- streets in the community are asphalt-paved roadways and
are 24-foot wide right-of-ways.
Curb: Marywood Road does not have concrete curbs. The
---- community streets do not have curbs.
Sidewalk: Marywood Road does not have concrete sidewalks. The
-------- community streets do not have sidewalks.
Streetlights: There are pole mounted lights along Marywood Road and
------------ throughout the community.
Landscaping: Grass and planted areas found throughout the site.
-----------
<PAGE>
Land and Site Improvements 36
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, county property records and survey did not reveal
any adverse or potentially adverse interests, which 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 Brevard 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, therefore recommend an audit be
performed.
Functional Utility
------------------
The site, which is rectangular in shape and contains approximately 27.41
acres, is large enough to accommodate building improvements and roadways as well
as recreational amenities and green areas. The site is considered functional
for various residential development scenarios. The existing development as a
143-space manufactured housing community with an overall density of
approximately 5.22 spaces per acre is within modern standards. The site is
considered functional for use as a manufactured housing community.
<PAGE>
37
IMPROVEMENT DESCRIPTION
-----------------------
The subject is improved with 143 manufactured housing spaces. The lots in
the community are arranged along streets laid out in a grid pattern taking
advantage of the rectangular shape of the site. The streets have been
configured to maximize the available number of spaces. The individual
manufactured housing lots in the community vary slightly in size averaging
approximately 5,000 square feet. The density of the property is equal to 5.22
dwelling units per acre.
The common area amenities include a clubhouse and swimming pool. The
clubhouse contains approximately 3,100 square feet of area and has been
partitioned into the main hall/multipurpose room, restrooms, kitchen, laundry
and the park office. The interior construction consists of painted or papered
drywall walls and ceilings. The flooring finish is vinyl tile. There are flush
mounted fluorescent light fixtures and ceiling fans. Adjacent to the clubhouse
is a patio and the pool area.
We have not estimated a separate value for these amenities, or equipment,
as they are standard items found at most manufactured housing communities.
These amenities are typical for a community of this type, age, size and
location, and are adequate and functional in use.
Age and Condition
-----------------
According to the owner, the community was developed in 1974. The subject
is approximately 26 years old. The common areas, streets, amenities and
individual mobile homes were observed to be in good overall condition. Overall,
the subject improvements are estimated to be effectively 15 years old and were
observed to be in good condition.
<PAGE>
Improvement Description 38
[MOBILE HOME PARK LAYOUT APPEARS HERE]
Site Layout-Village Glen
<PAGE>
39
OWNERSHIP AND PROPERTY HISTORY
------------------------------
The ownership of the subject, as recorded in the Official Records of
Brevard County, Florida, is in the name of Windsor Park Properties, 7. The
property was purchased by the current owners in October 1995 for $2,500,000 as
is evidenced by the Special Warranty Deed recorded in Official Record Book 3509
on Page 3644. This indicates a price per space of $17,483. There have been no
other significant transactions involving the subject property within the past
five years.
OCCUPANCY
---------
The property is currently occupied by a 143-space manufactured housing
community, known as Village Glen. There are six vacant manufactured housing
spaces of the 143 total spaces. The physical occupancy is 95.8%. All of the
spaces will accommodate multi-sectional homes. In addition to the physical
vacancy the manager occupies one space rent free resulting in an economic
occupancy of 136 spaces. The economic vacancy of the manufactured housing
spaces is 7 spaces or 4.9%.
The community is governed, as required by law, by a prospectus. Annual
increases in the rental rates are governed by the prospectus, contained in the
Addenda to this report. The current rents at the subject range from $277.00 to
$282.00 per month. The rents were increased by $10.00 per site per month,
effective January 1, 2000.
Our analysis does not incorporate any value attributable to any community
owned models as these units are considered personal property, not a portion of
the real estate. Likewise, we have incorporated no income attributable to the
sale of homes in our analysis.
ZONING AND OTHER LAND USE CONTROLS
----------------------------------
The subject property is located in an unincorporated area of Brevard County
and is zoned TR-3, Mobile Home Parks according to the Brevard County zoning
ordinance. The land use classification (Residential) allows for a density of up
to 12 dwelling units per acre.
The subject is a considered a legal, non-conforming use of the site by
design. This is due to the community not meeting today's design standards.
Concurrency
-----------
Based on the present configuration of the subject, it is in conformance
with the approved comprehensive plan filed by Brevard County. Therefore,
concurrency is not an issue.
<PAGE>
Zoning And Other Land Use Controls 40
Flood Hazard
------------
Brevard County is a participant in the Federal Emergency Management Agency
(FEMA) system. According to Flood Map Community Number 12009C, Panel 0439 E,
dated April 3, 1989, the subject property is located in FEMA designated "A" and
"X" zones. The "A" zone covers approximately the eastern quarter of the
community. An "A" zone is defined as a "special flood hazard area where no base
flood elevations are provided". An "X" zone is defined as "an area of minimal
to moderate flood hazard usually depicted on Flood Insurance Rate Maps as being
above the base flood elevations".
ASSESSMENT AND TAXES
--------------------
The subject is identified in the Brevard County records under Parcel Number
27-361401-57. According to the records at the Brevard County Property
Appraiser's Office, the current (1999) assessed value of the subject totals
$1,925,000. In comparison to our opinion of the market value the subject is
under assessed. Under assessment is common for manufactured home communities,
because much of the value can be attributed to the entrepreneurial skill in
acquiring the land and filling the community. In our discussions with the
Brevard County Property Appraiser's Office, it has been noted that properties
are not re-assessed upon sale in Brevard County. Rather, all properties are re-
assessed every two to three years and any sale will be factored in to the
assessment of each property type. The subject was re-assessed in 1999 and will
probably be re-assessed in 2001 or 2002. The Prospectus allows for the pass
through of additional ad valorem taxes to the residents.
Assessed values, for purposes of property taxation are determined on
January 1, of each year. In the state of Florida, properties are assessed at
100% of the market value, as required by Florida Statute, Chapter 192.042.
Properties are reassessed annually and equitability of assessments is not a
basis for assessment in the state of Florida. Taxes are due and payable on the
first day of the year, although tax bills are issued in arrears. Discounts up
to 4% of the total bill are available for early payment and taxes become
delinquent after March 31. Discussions with owners of investment real estate
and manufactured home communities have revealed that "early" payment of real
estate taxes is a common practice. Additionally, prudent management would also
dictate the payment of real estate taxes to take advantage of any discounts
offered. All tax amounts are current.
Historically, the actual taxes have varied over the last three years. The
table on the following page illustrates the actual taxes and assessments over
the last three years.
<PAGE>
Assessment And Taxes 41
Historical Taxes
<TABLE>
<CAPTION>
=========================================
Tax Year Assessment Taxes
-----------------------------------------
<S> <C> <C>
1999 $1,925,000 $60,378.21
-----------------------------------------
1998 $1,800,000 $55,247.11
-----------------------------------------
1997 $1,800,000 $55,670.11
=========================================
</TABLE>
Based on the historical taxes we expect the real estate taxes to increase
slightly in the future. We have the estimated 2000 tax liability to be $60,982.
We have applied the available early payment discount for November 1999 and our
estimate of total taxes is $58,543. From this amount we have deducted the solid
waste fee, which is included in the tax bill. This amounted to $21,019 for 1997
and 1998 and decreased to $16,321 in 1999. Deducting the solid waste fee (1999
amount) results in a net tax amount of $42,221.
<PAGE>
42
MARKETABILITY AND EXPOSURE PERIOD
---------------------------------
The subject as discussed in the Neighborhood Analysis, and Manufactured
Home 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
home 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 home community investments, the REIT
investors have been a major player in the marketplace. REIT investors have bid
down capitalization rates for new, large communities. Resident groups have also
increased demand for manufactured home 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.
Discussions with large institutional manufactured home 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. Family 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 criteria 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.
In late summer 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 have
increased. Prior to this increase, interest rate spreads were available lower
than 150 basis points over the 10-
<PAGE>
Marketability and Exposure Period 43
year Treasuries. Since the fall, spreads have increased to the low 200 basis
point range for manufactured housing communities.
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.
On the basis of the preceding analysis, the subject would be attractive to
all but the institutional investor. 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>
45
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. The four
criteria the highest and best use must meet are legal permissibility,
physical possibility, financial feasibility, and maximum
profitability."/4/
The highest and best use of a specific parcel of land does not depend on
subjective analysis; rather, the competitive forces in the market shape it. The
analysis and interpretation of highest and best use is an economic study of the
market forces on the subject.
Market forces also shape market value. The data 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 provides the foundation for an investigation of the
competitive positions of buyers and sellers in the marketplace, and 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.
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 market conditions, the trends affecting the buyers and sellers
in the marketplace, and the existing use of the subject. The highest and best
use of the land, as though vacant and the property as improved, must meet four
criteria.
/4/ The Appraisal Institute, The Dictionary of Real Estate Appraisal, 3d ed.
(Chicago, Illinois: The Appraisal Institute, 1993), Page 170.
<PAGE>
Highest and Best Use 46
Analyzing the highest and best use of the land as though vacant serves two
functions. First, it helps identify comparable properties, which 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.
Legally Permissible
-------------------
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 restrictions, such as utility easements, are in-place, which would not be
of any significant consequence to the development
<PAGE>
Highest and Best Use 47
of the site.
The subject is an approved Manufactured Housing Community by the Brevard
County Planning and Zoning Department. As discussed in the Zoning and Other
Land Use Controls Section of this report, the property, as developed, is a legal
non-conforming use of the land and concurrency is not an issue.
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. Generally, the larger the site, 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 are also relevant.
The subject site is rectangular in shape and contains a total area of 27.41
acres. The site is generally level and has adequate access frontage along the
east side of Marywood Road, within one mile northeast of Interstate 95. 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 density of approximately 5.22 spaces per acre. The subject
meets the physically possible criteria of this analysis.
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 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.
<PAGE>
Highest and Best Use 48
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, 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. As stated above and in the
Zoning and Other Land Use Controls section of this report, the subject is a
legal, non-conforming use of the site.
We have also noted that approximately 1/4 of the manufactured housing
communities have over 100 spaces in Brevard County. Due to the non-availability
of space for immediate development, restrictive governmental impact 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.
<PAGE>
Highest and Best Use 49
Highest and Best Use - As Improved
----------------------------------
The site is currently improved with a 143-space age restricted manufactured
housing community. The use of the site is a legally permissible use under the
current zoning. The subject property has been in existence as a manufactured
housing community since 1974.
The improvements are well situated on the site. The site has excellent
access from Marywood Road. The amenities for this size and type of improvement
are within normal standards. The use of the site is physically possible.
Demand for manufactured housing in this area is evident. 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 143-space age restricted manufactured housing community.
<PAGE>
50
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
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 site rents, an investor would not be willing to compensate a seller for any
more than the income to be received. The Cost Approach was not utilized due to
the subjectivity of depreciation and entrepreneurial profit estimates.
A number of positive and negative factors were believed to affect the
overall value of the subject. On the positive side, the following were
considered.
1. The subject is well located in regard to the area amenities.
2. The subject is well kept and has a high-grade amenity package.
Partially offsetting the positive influences are negative factors among
which the following was considered the most pertinent:
1. The market is competitive, with shipments down from the 1980's levels.
With the above factors in mind, the Income Capitalization Comparison and
Sales Comparison Approaches will now be discussed in detail on the following
pages.
<PAGE>
51
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. The location, size, tenant mix, age, absence or presence
of long term leases, assignability of existing debt, condition of the
facilities, level of occupancy, quality of management, and other related factors
are among the criteria affecting the marketability of an income-producing
property.
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 a process of estimating the total
potential gross income (PGI) from lot rentals, less a vacancy and credit loss
factor, added to an estimate of income from other sources. The result is 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, expense levels and historical trends. We have also
considered the current rent and expenses at manufactured home communities
similar to the subject, as limited by the existing Prospectus and rental
agreement.
<PAGE>
Income Capitalization Approach 52
The subject's historical income and expenses for 1997, 1998 and 1999 have
been presented, in the table, on the following page. Although the reported
expenses do not appear unreasonable, we have also relied on market comparables.
Current income and expense information for three comparable age-restricted
manufactured home 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 a following page.
<PAGE>
<TABLE>
<CAPTION>
===========================================================================================================================
Village Glen - Historical Income and Expenses
Pct. of $ Per Pct. of $ Per Pct. of $ Per
1997 Income Space 1998 Income Space 1999 Income Space
---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Income:
Rents $408,010 99.36% $2,853.22 $426,097 99.48% $2,979.70 $442,232 99.57% $3,092.53
Miscellaneous/Other 2,637 0.64% 18.44 2,227 0.52% 15.57 1,898 0.43% 13.27
---------------------------------------------------------------------------------------------------
Total Income $410,647 100.00% $2,871.66 $428,324 100.00% $2,995.27 $444,130 100.00% $3,105.80
Expenses:
Insurance $ 4,019 0.98% $ 28.10 $ 2,670 0.62% $ 18.67 $ 2,964 0.67% $ 20.73
Office/Administration 32,752 7.98% 229.03 27,447 6.41% 191.94 25,901 5.83% 181.13
Maintenance & Repairs 9,493 2.31% 66.38 13,396 3.13% 93.68 18,367 4.14% 128.44
Management Expense 20,423 4.97% 142.82 21,376 4.99% 149.48 22,206 5.00% 155.29
Wages & Benefits 30,186 7.35% 211.09 35,791 8.36% 250.29 37,726 8.49% 263.82
Property Taxes 27,000 6.57% 188.81 27,810 6.49% 194.48 34,803 7.84% 243.38
Utilities 30,470 7.42% 213.08 30,628 7.15% 214.18 29,770 6.70% 208.18
---------------------------------------------------------------------------------------------------
Total Expenses $154,343 37.59% $1,079.32 $159,118 37.15% $1,112.71 $171,737 38.67% $1,200.96
Net Operating Income $256,304 62.41% $1,792.34 $269,206 62.85% $1,882.56 $272,393 61.33% $1,904.85
===========================================================================================================================
</TABLE>
<PAGE>
Income Capitalization Approach 54
Income Analysis
---------------
The general practice in the local market is to charge a base lot rent on a
monthly basis. The base lot rate may, or may not include such services as water,
sewer, trash collection and lawn mowing. The higher base lot rents typically
include more services. The base lot rents typically generate between 90% and
99% of the total income in a manufactured home community. At the subject, lawn
mowing is included in the monthly lot rent. As previously discussed, based on
the market rent range, we are of the opinion that the subject rent structure is
within the market range for comparable properties.
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 account 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 $477,852. The manufactured
home lot rent rate averages $278.47 per month.
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
community is 95.8% physically occupied. As of the date of inspection, there
were six vacant spaces and one occupied by the community manager. The economic
vacancy of the manufactured home sites at the subject is currently 4.9 %. In
addition to the vacancy, a small percentage for credit loss is appropriate. We
have estimated stabilized vacancy and credit loss for the manufactured home
spaces at 6.0% to account for both physical and economic vacancy and credit
loss. Total vacancy and credit loss has been estimated to be $28,671. The
effective gross income from rentals is estimated to be $449,181.
Miscellaneous Income
--------------------
Miscellaneous income, at the subject, is derived from late check charges
and similar fees. Historically this amount has ranged from $13.27 to $18.44 per
space, varying annually. Based on the historical financials we have estimated
this amount at $15.00 per space, equal to $2,145 annually.
<PAGE>
55
Income Capitalization Approach
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, added to any additional
income from miscellaneous sources. Our estimate of the stabilized effective
gross income follows:
===========================================================
Village Glen
Effective Gross Income
===========================================================
Income:
Monthly Number Monthly
Spaces Rent Months Total Annualized
-----------------------------------------------------------
101 $ 277.00 12 $ 27,977 $ 335,724
42 $ 282.00 12 11,844 142,128
-----------------------------------------------------------
Gross Potential Rental Income $ 477,852
Less:
Vacancy & Credit Loss 6.0% (28,671)
---------
Effective Gross Income From Rentals $ 449,181
Miscellaneous/Other Income (per space) $15.00 2,145
---------
Effective Gross Income $ 451,326
===========================================================
Operating Expense Analysis
--------------------------
The following discussion addresses each of the line item expenses for the
property. We have presented the 1997, 1998 and 1999 accounts 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.
<PAGE>
<TABLE>
<CAPTION>
====================================================================================================================================
Manufactured Housing Community Comparable Operations
Pct. of $ Per Pct. of $ Per Pct. of $ Per
Spaces 176 Income Space 130 Income Space 207 Income Space
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Income:
Rents $206,695 100.00% $1,174.40 $341,763 99.44% $2,628.95 $689,020 98.55% $3,328.60
Miscellaneous/Other 0 0.00% 0.00 1,923 0.56% 14.79 10,161 1.45% 49.09
-------------------------------------------------------------------------------------------------
Total Income $206,695 100.00% $1,174.40 $343,686 100.00% $2,643.74 $699,181 100.00% $3,377.69
Expenses:
Insurance $ 5,014 2.43% $ 28.49 $ 2,848 0.83% $ 21.91 $8,707 1.25% $42.06
Office/Administration 10,343 5.00% 58.77 9,264 2.70% 71.26 13,029 1.86% 62.94
Maintenance & Repairs 7,533 3.64% 42.80 21,766 6.33% 167.43 49,275 7.05% 238.04
Management Expense 0 0.00% 0.00 0 0.00% 0.00 16,168 2.31% 78.11
Wages & Benefits 13,254 6.41% 75.31 40,235 11.71% 309.50 38,059 5.44% 183.86
Property Taxes 15,679 7.59% 89.09 23,005 6.69% 176.96 61,933 8.86% 299.19
Utilities 31,009 15.00% 176.19 57,397 16.70% 441.52 56,120 8.03% 271.11
-------------------------------------------------------------------------------------------------
Total Expenses $ 82,832 40.07% $ 470.64 $154,515 44.96% $1,188.58 $243,291 34.80% $1,175.32
Net Operating Income $123,863 59.93% $ 703.77 $189,171 55.04% $1,455.16 $455,890 65.20% $2,202.37
====================================================================================================================================
</TABLE>
<PAGE>
Income Capitalization Approach 57
Insurance charges are property specific based on the location of the
property and the amenity package. Insurance charges have varied over the last
three-year period. Insurance costs have ranged from $18.67 per space in 1998 to
$28.10 per space in 1997. The 1999 amount was $20.73 per space. The comparable
expense data indicated a range from $21.91 to $42.06 per space. We have used
$20.00 per space based on the historical amounts, which is $2,860 annually.
Insurance
<TABLE>
<CAPTION>
===========================================================================================================
1997 1998 1999 Comp Comp Comp Stabilized
1 2 3 Estimate
-----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Total $4,019 $2,670 $2,964 $5,014 $2,848 $8,707 $2,860
-----------------------------------------------------------------------------------------------------------
% EGI 0.98% 0.62% 0.67% 2.43% 0.83% 1.25% 0.62%
-----------------------------------------------------------------------------------------------------------
$/Space $28.10 $18.67 $20.73 $28.49 $21.91 $42.06 $20.00
===========================================================================================================
</TABLE>
Office/Administrative expense is project specific due to varying
classifications of expense categories. At the subject, this expense includes
the costs associated with the operation of the office, such as telephone,
supplies, licenses, dues and subscriptions and advertising expenses. We have
attempted to include like items in this category for both the subject and the
expense comparables. The expense comparables indicated a range for this
category from $58.77 to $71.26 per space. The historical data has decreased
annually over the last three years and was above the range of the comparable
expenses. We have placed greatest reliance on the historical data weighed by
the comparable data, estimating administrative expense at $170.00 per space or
$24,310 per year.
Office/Administration
<TABLE>
<CAPTION>
===========================================================================================================
1997 1998 1999 Comp Comp Comp Stabilized
1 2 3 Estimate
-----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Total $32,752 $27,447 $25,901 $10,343 $9,264 $13,029 $24,310
-----------------------------------------------------------------------------------------------------------
% EGI 7.98% 6.41% 5.83% 5.00% 2.70% 1.86% 5.39%
-----------------------------------------------------------------------------------------------------------
$/Space $229.03 $191.94 $181.13 $ 58.77 $71.26 $ 62.94 $170.00
===========================================================================================================
</TABLE>
<PAGE>
Income Capitalization Approach 58
Maintenance and Repairs expense is project specific based on the age and
condition of the property. Many properties expense capital items rather than
capitalizing them. This can result in abnormal spikes in the expense amounts in
certain years.
Historically, maintenance and repair expenses have increased from $66.38
per space in 1997 to $128.44 per space in 1999. Our inspection revealed the
property to be in good overall condition, with no items of deferred maintenance
noted.
The expense comparables indicate a wider range of expense in this category
from $42.80 per space (Comparable Number 1), to $238.04 per space (Comparable
Number 3). Our stabilized estimate of this expense is $100.00 per space or
$14,300 annually, based on the historical data weighed by the comparable data.
Maintenance and Repairs
<TABLE>
<CAPTION>
============================================================================================================
1997 1998 1999 Comp Comp Comp Stabilized
1 2 3 Estimate
------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Total $9,493 $13,396 $18,367 $7,533 $21,766 $49,275 $14,300
------------------------------------------------------------------------------------------------------------
% EGI 2.31% 3.13% 4.14% 3.64% 6.33% 7.05% 3.17%
------------------------------------------------------------------------------------------------------------
$/Space $66.38 $ 93.68 $128.44 $42.80 $167.43 $238.04 $100.00
============================================================================================================
</TABLE>
Management Fee has historically ranged from 4.97% to 5.00% of effective
gross income at the subject. Management expense was charged at one of the three
comparables and amounted to 2.31%, for Comparable Number Three. The overall
market range for management fees was found to range from approximately 3.0% to
5.0%.
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 $22,566 or $157.81 per space per year.
<PAGE>
Income Capitalization Approach 59
Wages and Benefits expense has increased annually ranging from $211.09 per
space in 1997, to $263.82 per space in 1999. The comparable data indicated a
wider range from $75.31 per space for Comparable Number One to $309.50 per space
for Comparable Number Two.
This category includes all of the costs associated with the staffing
including payroll and payroll taxes and any health and/or life insurance
benefits. The manager would typically receive a rent-free home and this is the
case at the subject property. Our estimate of this expense has been based on the
historical amounts weighed by the comparable data. Our estimate of $39,325
annually is the equivalent of $275.00 per space or 8.71% of the Effective Gross
Income estimate.
Wages and Benefits
<TABLE>
<CAPTION>
==============================================================================================================
1997 1998 1999 Comp Comp Comp Stabilized
1 2 3 Estimate
--------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Total $30,186 $35,791 $37,726 $13,254 $40,235 $38,059 $39,325
--------------------------------------------------------------------------------------------------------------
% EGI 7.35% 8.36% 8.49% 6.41% 11.71% 5.44% 8.71%
--------------------------------------------------------------------------------------------------------------
$/Space $211.09 $250.29 $263.82 $ 75.31 $309.50 $183.86 $275.00
==============================================================================================================
</TABLE>
Property Taxes represent 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 historical tax data as presented and
discussed in the Assessment and Taxes section of this report. Our stabilized
estimate of the owner's annual property tax liability is $42,221, corresponding
to the forecast November 2000 amount. This is equivalent to $295.25 per space or
9.35% of the Effective Gross Income estimate.
<PAGE>
Income Capitalization Approach 60
Utilities expense is also project specific, due to the number and type of
services which may be included in the rent. In this case, this line item
includes trash collection and irrigation water for the residents and the cost of
the common area utilities. We have placed greatest reliance on the historical
data, as it is the best indicator for this expense at the subject. The expense
comparables include some utilities in the lot rents. Historically, this expense
has varied slightly each year. We have estimated utilities expense at $210.00
per space or $30,030 annually. This is equivalent to 6.65% of the Effective
Gross Income estimate.
Utilities
<TABLE>
<CAPTION>
============================================================================================================
1997 1998 1999 Comp Comp Comp Stabilized
1 2 3 Estimate
------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Total $30,470 $30,628 $29,770 $31,009 $57,397 $56,120 $30,030
------------------------------------------------------------------------------------------------------------
% EGI 7.42% 7.15% 6.70% 15.00% 16.70% 8.03% 6.65%
------------------------------------------------------------------------------------------------------------
$/Space $213.08 $214.18 $208.18 $176.19 $441.52 $271.11 $210.00
============================================================================================================
</TABLE>
Reserves are not typically accounted for by property owners. 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 1.0%) of effective gross income. We have used $25.00 per space per
year, which should be adequate to cover future capital costs. This equates to
$3,575 annually.
<PAGE>
Income Capitalization Approach 61
Expense Summary
---------------
To summarize, we have estimated the stabilized total operating expenses for
the subject to be $179,188. This estimate is equal to 39.70% of the Effective
Gross Income (EGI) estimate.
Expense Summary
<TABLE>
<CAPTION>
===================================================================================================================
1997 1998 1999 Comp Comp Comp Stabilized
1 2 3 Estimate
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Total $ 154,343 $ 159,118 $ 171,737 $82,832 $ 154,515 $ 243,291 $ 179,188
-------------------------------------------------------------------------------------------------------------------
% EGI 37.59% 37.15% 38.67% 40.07% 44.96% 34.80% 39.70%
-------------------------------------------------------------------------------------------------------------------
$/Space $1,079.32 $1,112.71 $1,200.96 $470.64 $1,188.58 $1,175.32 $1,253.06
===================================================================================================================
</TABLE>
As shown on the preceding table, expenses have historically represented
between 37.15% (1998) and 38.67% (1999) of the Effective Gross Income, and have
varied each year. The expense comparables, as summarized above, indicated a
wider range between 34.80% (Comparable Number 3) and 44.96% (Comparable Number
2). Our estimate of total expenses is equal to 39.70% of the estimated EGI. It
should be noted that the historical expenses had no provision for a reserve for
capital expenditures, which we have included in our estimate.
Our estimate of net operating income is $272,138. We have presented our
stabilized estimate of income and expenses on the following page.
<PAGE>
Income Capitalization Approach 62
================================================================================
Village Glen
Stabilized Operating Statement
% of $ per
Amount EGI Space
================================================================================
Total Effective Gross Income $ 451,326 100.00% $ 3,156.13
Expenses $ 2,860 0.63% $ 20.00
Insurance 24,310 5.39% 170.00
Office 14,300 3.17% 100.00
Maintenance & Repairs 22,566 5.00% 157.81
Management Expense 39,325 8.71% 275.00
Wages & Benefits 42,221 9.35% 295.25
Property Taxes 30,030 6.65% 210.00
Utilities 3,575 0.79% 25.00
====================================
Reserves $ 179,188 39.70% $ 1,253.06
Total Expenses
Net Operating Income $ 272,138 60.30% $ 1,903.06
================================================================================
<PAGE>
Income Capitalization Approach 63
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 home communities
are typically valued by direct capitalization, based on existing income.
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 home 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 between 7.98% and 9.48%. Our
analysis of this data indicated a narrow range in overall capitalization rates,
which tend to be influenced by the size of the community, its age and condition,
occupancy, amenity package and location.
Comparable Sales
<TABLE>
<CAPTION>
=====================================================================
Sale Sale Date Overall
Number Capitalization Rate
---------------------------------------------------------------------
<S> <C> <C>
1 07/98 8.24%
---------------------------------------------------------------------
2 07/99 9.48%
---------------------------------------------------------------------
3 03/99 9.27%
---------------------------------------------------------------------
4 10/98 8.72%
---------------------------------------------------------------------
5 08/99 7.98%
=====================================================================
</TABLE>
As discussed in the marketability section of this report, our sources
indicated that
<PAGE>
Income Capitalization Approach 64
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's were bidding rates down even
further. Our information revealed that manufactured home community cooperatives
and associations would more likely accept slightly lower overall rates, while
the small investor would require a slightly higher rate. We have also discussed
the fact that the manufactured home community market in Brevard County is
sophisticated and the subject at 143 spaces is one of the mid sized communities
in the county.
The comparable sale data represents recent sales of properties, similar in
respects to the subject. Sale Comparable Number One is a sale of a smaller,
slightly newer property with similar amenities. Sale Comparable Number Two is a
slightly smaller, similar aged property, with similar amenities, located in a
more rural area. This sale indicated an overall rate of 9.48%, and represented
the top of the indicated range. Sale Comparable Number Three is a larger older
property with similar amenities to the subject, located in a more rural area.
Sale Comparable Number Four is a sale of a smaller, similar aged property with
similar amenities. Sale Comparable Number Five is a sale of a larger, older
property with similar amenities.
Based on the comparison of the sale data to the subject, the overall rate
for the subject would likely be in the 8.5% to 9.5% range, as the subject is
considered attractive to all investors and interest rates are still low. We have
concluded a rate of 9.00%, as the subject is a 143 space, well-occupied
community, located in a sophisticated market area. The subject would appeal to a
large number of investors.
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, because a negative cash flow, after debt service, may indicate the
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. The formula for this procedure is: M x
f x DCR = R, where;
<PAGE>
Income Capitalization Approach 65
M = Loan to Value Ratio
f = Mortgage Constant
DCR = Debt Coverage Ratio
R = Overall Rate
In order to establish the criteria for the development of the Debt Coverage
Ratio Method, we have conducted a recent survey of local lenders. The results of
our survey have been summarized on the following table.
<TABLE>
<CAPTION>
============================================================================
Contact Gene Fogarty Mike McCoy
----------------------------------------------------------------------------
<S> <C> <C>
Bank NationsBank Community Bank
----------------------------------------------------------------------------
Type Of Lender Conventional Conventional
----------------------------------------------------------------------------
Nominal Mortgage Interest Rate 7.25% to 7.50% 7.25% to 7.50%
----------------------------------------------------------------------------
Amortization Period 15 - 30 Years 15 - 30 Years
----------------------------------------------------------------------------
Loan Term 3 - 7 Years 5 - 10 Years
----------------------------------------------------------------------------
Debt Coverage Ratio 1.20 - 1.25 1.20 - 1.25
----------------------------------------------------------------------------
Loan To Value Ratio 75% 75%
============================================================================
</TABLE>
Our survey of local lenders indicated an annual interest rate of 7.50%.
A mortgage loan would be available at 75% of the market value, based on a
15-year amortization schedule. Based on these criteria the indicated annual
interest rate constant is 9.6671%. 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>
0.75 0.96671 1.25 0.090629
---------------------------------------------------------------------------------------------------
Rounded 9.1%
===================================================================================================
</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 increased, alternate sources of financing have become
available through insurance companies and
<PAGE>
Income Capitalization Approach 66
conduit programs.
The presence of institutional investors in the market and few quality real
estate investments has bid down rates on manufactured home 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 home community investments.
The rate developed via the Debt Coverage Ratio method is slightly lower
than the rate extracted from the market data, and is considered supportive of
the market rate. We have estimated an overall capitalization rate of 9.00% for
the subject and capitalized the net income of $272,138. The value conclusion via
the income approach is summarized as follows:
$272,138 divided by .0900 = $3,023,756
Rounded to $3,000,000
<PAGE>
67
SALES COMPARISON APPROACH
-------------------------
The fundamental premise of the Sales Comparison Approach is the concept
that the analysis of sales of reasonably similar properties provides an
appraiser with empirical data from which observations and conclusions about the
property being appraised can be made. Proper application of the approach
requires that:
1. Only market transactions be weighed, and the data of each transaction
be confirmed to the greatest extent possible.
2. The degree of comparability of each sale to the subject be considered;
differences in physical, functional, and economic characteristics be
noted; and adjustments for the differences be made.
3. The value conclusion 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.
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.
<PAGE>
Sales Comparison Approach 68
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 home 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 sale 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 age-restricted communities
since they tend to have a less transient occupancy base and typically trade at
lower capitalization rates than all age communities. Based on our investigation,
the following five sales are the most significant transactions for direct
comparison with the subject. All are recent transactions and are indicative of
the actions of the manufactured housing community market. Meanwhile, we expanded
our sales search geographically in an attempt to provide the most relevant
market data to the subject property.
The sales occurred between July 1998 and August 1999. The properties ranged
in size from 110 to 337 spaces. The sale prices, on a per space basis, ranged
from $18,846 to $25,519. The Effective Gross Income Multipliers (EGIM) ranged
from 5.56 to 7.89 and the indicated overall rates, as previously mentioned,
ranged from 7.98% to 9.48%. The following pages detail each of the sales,
following which we have presented a summary of the pertinent data.
<PAGE>
Sales Comparable Number One 69
Shipp Reck Harbor
1600 Lake Shipp Drive South
Winter Haven, Polk County, Florida
[PICTURE APPEARS HERE]
<TABLE>
<S> <C>
Sale Date: July 1998
Property Description
--------------------
Size/Type: 112-space age-restricted manufactured home community
Utilities: All Public
Land Description: Generally level, irregularly shaped, parcel of land with
adequate access. Improved with asphalt paved streets and
streetlights.
Improvements/Amenities: Clubhouse, pool and shuffleboard courts.
Year Built/Condition: Late 1970's/Good
</TABLE>
<PAGE>
Sales Comparable Number One 70
<TABLE>
<CAPTION>
Income Data
-----------
<S> <C>
Annual Occupancy: 100.0% (112 of 112 spaces)
Average Lot Rent: $220.00
Effective Gross Income: 310,680
Expenses: $108,738 (35.0% of the effective gross income) estimated
Net Income: $201,942 / $1,803 per space
Sale Data
---------
Sale Price: $2,450,000
Cash Equivalent Price: $2,450,000
Grantor: Orin M. Shell, et al
Grantee: Isaac Kelbie, Inc.
Financing Terms: Purchase Money Mortgage, No effect.
Sales History
(Past 3 Years): None noted
Market Exposure: Unknown
Verification Source: Confidential
Date: September 29, 1998
Comparison Data
---------------
Sale Price/Space: $21,875
Effective Gross Income
Multiplier (EGIM): 8.24
Overall Capitalization
Rate (OAR): 7.89
Comments The income and expenses were estimated from percentages
provided during verification.
</TABLE>
<TABLE>
<CAPTION>
========================================================================================================================
Location Access Visibility Condition Amenities Home Quality Overall
------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Similar Similar Similar Similar Superior Similar Similar
========================================================================================================================
</TABLE>
<PAGE>
Sales Comparable Number Two 71
Hidden Village
3035 66/th/ Avenue North
St. Petersburg, Pinellas County, Florida
[PICTURE APPEARS HERE]
<TABLE>
<S> <C>
Sale Date: July 1999
Property Description
--------------------
Size/Type: 130-space age restricted manufactured housing community
Utilities: All Public
Land Description: Generally level, irregularly shaped, parcel of land with
adequate access. Improved with asphalt-paved streets and
streetlights.
Improvements/Amenities: Clubhouse, pool, shuffleboard courts and laundry
facilities.
Year Built/Condition: 1973/Good
</TABLE>
<PAGE>
Sale Comparable Number Two 72
<TABLE>
<CAPTION>
Income Data
-----------
<S> <C>
Annual Occupancy: 96.9% (126 of 130)
Average Lot Rent: $253.29
Effective Gross Income: $440,560
Expenses: $208,372 (47.3% of the effective gross income)
Net Income: $232,188/$1,786 per space
Sale Data
---------
Sale Price: $2,450,000
Cash Equivalent Price: $2,450,000
Grantor: Wayne C. Rickert
Grantee: Home Mobile Home Park
Financing Terms: Cash to Seller.
Sales History
(Past 3 Years): None noted
Verification Source: Lorraine Leitheiser, Broker
Date: November 10, 1999
Comparison Data
---------------
Sale Price/Space: $18,846
Effective Gross Income
Multiplier (EGIM): 5.56
Overall Capitalization
Rate (OAR): 9.48%
Comments: This sale also included 15 apartments along the front of the
community. The financial information reflects the buyer's pro-
forma adjusted for a 5% management fee and $25 per space in
reserves.
</TABLE>
<TABLE>
<CAPTION>
========================================================================================================================
Location Access Visibility Condition Amenities Home Quality Overall
------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Similar Similar Similar Similar Superior Similar Similar
========================================================================================================================
</TABLE>
<PAGE>
Sale Comparable Number Three 73
Flamingo Shores and Heritage Estates
3275 West U. S. Highway 92
Winter Haven, Polk County, Florida
[PICTURE APPEARS HERE]
<TABLE>
<S> <C>
Sale Date: March 1999
Property Description
--------------------
Size/Type: 206-space age restricted manufactured housing community
Utilities: All Public
Land Description: Generally level, irregularly shaped, parcel of land with
adequate access and lake frontage. Improved with asphalt-
paved streets and streetlights.
Improvements/Amenities: Clubhouses, shuffleboard courts, boat slips and docks.
Year Built/Condition: 1959/Good
</TABLE>
<PAGE>
Sale Comparable Number Three 74
<TABLE>
<CAPTION>
Income Data
-----------
<S> <C>
Annual Occupancy: 98.1% (202 of 206 spaces)
Average Lot Rent: $217.00
Effective Gross Income: $510,603
Expenses: $139,924 (27.4% of the effective gross income)
Net Income: $370,679/$1,799 per space
Sale Data
---------
Sale Price: $4,000,000
Cash Equivalent Price: $4,000,000
Grantor: Ullrich Enterprises, Inc.
Grantee: Corrigan Group Two, L.C.
Financing Terms: Cash to Seller.
Sales History
(Past 3 Years): None noted
Market Exposure: Unknown
Verification Source: Bill Corrigan, Buyer
Date: June 1999
Comparison Data
---------------
Sale Price/Space: $19,417
Effective Gross Income
Multiplier (EGIM): 7.83
Overall Capitalization
Rate (OAR): 9.27%
Comments This is a good quality community older than the subject.
</TABLE>
<TABLE>
<CAPTION>
========================================================================================================================
Location Access Visibility Condition Amenities Home Quality Overall
------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Similar Similar Similar Similar Similar Similar Similar
========================================================================================================================
</TABLE>
<PAGE>
Sale Comparable Number Four 75
Tyrone Village
13618 North Florida Avenue
Tampa, Hillsborough County, Florida
[PICTURE APPEARS HERE]
<TABLE>
<S> <C>
Sale Date: October 1998
Property Description
--------------------
Size/Type: 110-space age restricted manufactured housing community
Utilities: All Public
Land Description: Generally level, irregularly shaped 15.84-acre parcel of
land with adequate access. Improved with asphalt-paved
streets and streetlights.
Improvements/Amenities: Clubhouse, pool, laundry and shuffleboard courts.
Year Built/Condition: 1974/Good
</TABLE>
<PAGE>
Sale Comparable Number Four 76
<TABLE>
<CAPTION>
Income Data
-----------
<S> <C>
Annual Occupancy: 97.2% (106 of 110 spaces)
Average Lot Rent: $260.00
Effective Gross Income: $329,839
Expenses: $138,022 (41.85% of the effective gross income)
Net Income: $191,817/$1,744 per space
Sale Data
---------
Sale Price: $2,200,000
Cash Equivalent Price: $2,200,000
Grantor: Daniel and Catherine Woods
Grantee: Tyrone Park, LLC
Financing Terms: Cash to Seller
Sales History
(Past 3 Years): None.
Market Exposure: Unknown
Verification Source: Michael Hay, Grantee
Date: October 1998
Comparison Data
---------------
Sale Price/Space: $20,000
Effective Gross Income
Multiplier (EGIM): 6.67
Overall Capitalization
Rate (OAR): 8.72%
Comments: This sale included five rental homes.
</TABLE>
<TABLE>
<CAPTION>
========================================================================================================================
Location Access Visibility Condition Amenities Home Quality Overall
------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Similar Similar Similar Similar Superior Similar Similar
========================================================================================================================
</TABLE>
<PAGE>
Sale Comparable Number Five 77
Gateway Mobile Home Park
10100 Gandy Boulevard
St. Petersburg, Pinellas County, Florida
[PICTURE APPEARS HERE]
<TABLE>
<S> <C>
Sale Date: August 1999
Property Description
--------------------
Size/Type: 337-site age restricted manufactured home community
Utilities: All Public
Land Description: Generally level, irregularly shaped 40.07-acre parcel of
land with adequate access. Improved with asphalt-paved
streets and streetlights.
Improvements/Amenities: Clubhouse, pool, laundry and shuffleboard courts.
Year Built/Condition: 1957-1964/Good
</TABLE>
<PAGE>
Sale Comparable Number Five 78
<TABLE>
<CAPTION>
Income Data
-----------
<S> <C>
Annual Occupancy: 98.8% (333 of 337 sites)
Average Lot Rent: $290.00
Effective Gross Income: $1,094,711
Expenses: $408,412 (37.31% of the effective gross income)
Net Income: $686,299/$2,036 per space
Sale Data
---------
Sale Price: $8,600,000
Cash Equivalent Price: $8,600,000
Grantor: D. A. Bennett Company.
Grantee: RAC Investments, Inc.
Financing Terms: Cash to Seller
Sales History
(Past 3 Years): None.
Market Exposure: Unknown
Verification Source: D. A. Bennett, Grantor
Date: August 1999
Comparison Data
---------------
Sale Price/Space: $25,519
Effective Gross Income
Multiplier (EGIM): 7.86
Overall Capitalization
Rate (OAR): 7.98%
Comments: This community was developed in phases, with the newer phase
(62 lots) being completed in 1964. Expenses included a management fee
and have been adjusted to reflect $25.00 per site reserve.
</TABLE>
<TABLE>
<CAPTION>
========================================================================================================================
Location Access Visibility Condition Amenities Home Quality Overall
------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Superior Similar Similar Similar Inferior Similar Similar
========================================================================================================================
</TABLE>
<PAGE>
Summary of Sale Comparables
<TABLE>
<CAPTION>
====================================================================================================================================
No. Name/Location Sale Price/ Total Price/ Average EGIM/ O.A.R
Sale Date Spaces/ Space Lot Rent %
Occupancy Expenses
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1 Ship Reck Harbor $2,450,000 112/ $21,875 $220.00 7.89/ 8.24%
1600 Lake Shipp Drive South July 1998 100.0% 35.0%
Winter Haven, Polk County, Florida
------------------------------------------------------------------------------------------------------------------------------------
2 Hidden Village $2,450,000 130/ $18,846 $253.29 5.56/ 9.48%
3035 66/th/ Avenue North July 1999 96.9% 47.3%
St. Petersburg, Pinellas County, Florida
------------------------------------------------------------------------------------------------------------------------------------
3 Flamingo Shores & Heritage Estates $4,000,000 206/ $19,417 $217.00 7.83/ 9.27%
3275 West U.S. Highway 92 March 1999 98.1% 27.4%
Winter Haven, Polk County, Florida
------------------------------------------------------------------------------------------------------------------------------------
4 Tyrone Village $2,200,000 110/ $20,000 $260.00 6.67/ 8.72%
13618 North Florida Avenue October 1998 97.2% 41.85%
Tampa, Hillsborough County, Florida
------------------------------------------------------------------------------------------------------------------------------------
5 Gateway Mobile Home Park $8,600,000 337/ $25,519 $290.00 7.86/ 7.98%
Gandy Boulevard August 1999 98.8% 37.3%
St. Petersburg, Pinellas County, Florida
====================================================================================================================================
</TABLE>
<PAGE>
[COMPARABLE SALES MAP APPEARS HERE]
<PAGE>
Sales Comparison Approach 81
As previously stated, the Sales Comparison Approach involves investigating
recent transfers of properties similar to the subject. The properties, which
have been compared to the subject, have been discussed below:
Sale Comparable Number One is Ship Reck Harbor in Winter Haven, Polk
County, Florida. This 112 space rental park sold for $2,450,000 in July 1998.
This price equates to a sale price per space of $21,875. Based on an effective
gross income of $310,680, the EGIM was 7.89, and the overall rate was 8.24%.
This park was 100.0% occupied at the time of sale.
Sale Comparable Number Two is Hidden Village in St. Petersburg, Pinellas
County, Florida. The property has 130 home sites and recently sold for
$2,450,000, or $18,846 per space. Based on an effective gross income of
$440,560, the EGIM was 5.56. The expenses represented 47.3% of the effective
gross income and the indicated capitalization rate was 9.48%. This age
restricted community was 96.9% occupied at the time of sale.
Sale Comparable Number Three is the combined sale of Flamingo Shores and
Heritage Estates in Winter Haven, Polk County, Florida. This 206 space age
restricted community sold for $4,000,000 in March 1999. This price equates to a
sale price per space of $19,417. Based on an effective gross income of
$510,603, the EGIM was 7.83, and the overall rate was 9.27%. The parks were
98.1% occupied at the time of sale.
Sale Comparable Number Four is Tyrone Village Mobile Home Park in Tampa,
Hillsborough County, Florida. This 110 space age restricted community sold for
$2,200,000 in October 1998. This price equates to a sale price per space of
$20,000. Based on an effective gross income of $329,839, the EGIM was 6.67, and
the overall rate was 8.72%. This community was 97.2% occupied at the time of
sale.
Sale Comparable Number Five is Gateway Mobile Home Park located in St.
Petersburg, Pinellas County, Florida. This 337-site age restricted community
sold for $8,600,000 in August 1999. This price equates to a sale price per site
of $25,519. Based on an effective gross income of $1,094,711, the EGIM was
7.86, and the overall capitalization rate was 7.98%. This community was 98.8%
occupied at the time of sale.
All of the sales were fee simple transactions, with abnormal financing
reflected in the cash equivalent price. There were no abnormal sale conditions
known to have occurred and all of the sales represent transactions that have
taken place over an eighteen-month period, having traded under similar market
conditions.
Effective Gross Income Multiplier
---------------------------------
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
<PAGE>
Sales Comparison Approach 82
amenities, age and other factors. The average lot rent reflects, in most cases,
the market perception of a property's position in the marketplace. It is also
typical that lot rent increases contribute to increases in net operating income.
Alternatively, we have employed the effective gross income multiplier (EGIM), in
this analysis.
The Effective Gross Income Multiplier for the comparable sale properties
ranged between 5.56and 7.89. As previously discussed, the EGIM is essentially a
function of the average lot rent. The average lot rent is a function of the
physical aspects of the property, such as age and condition, location and
amenities. EGIM's also reflect the market's perception of the potential for
future rent increases.
The subject is an established, age-restricted community, with a good
location and access. There is a history of good occupancy and the property and
improvements were observed to be in good overall condition. There is adequate
maintenance to maintain the current condition of the community. A rent increase
of $10.00 per space went into effect January 1, 2000 and our analysis
incorporates this increase. The rent levels have been shown to be within the
indicated market range. The subject's expense ratio is in the middle of the
range indicated by the sale comparables.
Based on these considerations, we have concluded an EGIM in the middle
portion of the indicated range, processing the subject's Effective Gross Income
of $451,326 with an EGIM of 6.7.
$451,326 x 6.70 = $3,023,884
Rounded $3,000,000
On a per space basis, our estimate of value is the equivalent of $20,979.
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 for a community, the higher the
per space sales price. The subject has a NOI/Space of $1,903.06 in our
stabilized analysis. The NOI/Space and the per space sales prices for the
comparables are shown 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
<PAGE>
Sales Comparison Approach 83
NOI/Space, a downward adjustment to the per space sales price 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 $ 1,803 $ 1,786 $ 1,799 $ 1,744 $ 2,036 $1,903
------------------------------------------------------------------------------------------------------------------
Price/Space $21,875 $18,846 $19,417 $20,000 $25,519 N/A
------------------------------------------------------------------------------------------------------------------
Percent
Adjustment 5.55% 6.55% 5.76% 9.13% -6.55% N/A
------------------------------------------------------------------------------------------------------------------
Adjusted
Price/Space $23,088 $20,081 $20,536 $21,827 $23,847 N/A
==================================================================================================================
</TABLE>
After adjustments, the indicated range is from $20,081 to $23,847 per
space. We have concluded towards the middle of the range giving equal weight to
all of the comparables. We concluded $21,000 per space.
Thus, 143 Spaces x $21,000/Space is: $3,003,000
Rounded $3,000,000
This value is reflective of the indication from the EGIM method and
considered mutually supportive. We have concluded $3,000,000 via the sales
comparison approach.
<PAGE>
84
FINAL ESTIMATE OF VALUE
-----------------------
The two approaches to value applied in the subject analysis yielded these
conclusions:
Income Capitalization Approach $3,000,000
Sales Comparison Approach $3,000,000
Depending on the circumstances of an appraisal, the two approaches to value
apply to various degrees. The income capitalization approach indicates the
amount at which a prudent investor might be interested in acquiring the
property. The sales comparison approach reflects demand and reasonable selling
price expectancy as evidenced by sales of similar properties.
In the reconciliation, we reviewed each approach to value (a) to ascertain
the reliability of the data and (b) to weight the approach that best represented
the actions of typical users and investors in the marketplace.
The income capitalization approach depends on the principles of
substitution and anticipation. This approach postulates that the value of a
property derives from the net income the property will produce during its
economic life. Investors in the market predicate their decisions on economic
factors oriented to the market and concern themselves with net income and its
durability. The income capitalization approach synthesizes the capitalized
return to, and of, the improvements and to the land. In this case, the
availability of sufficient reliable and supportable historical data for the
subject, made the income capitalization approach a reliable gage of the market
value of the subject.
The sales comparison approach uses a number of value indicators, both
physical and economic, including investors' strategies and attitudes reflected
in documented market transactions. The principle of substitution is the basis
of this approach, which states that a prudent investor will pay no more to buy a
property than the cost to buy a comparable substitute property. In the
valuation of the subject property, the sales comparison approach was considered
reliable. Given the relative homogeneity of the locations, the availability of
market data, we have emphasized this approach in the valuation.
The two approaches reflect the same value. Our estimate of value has been
based on the Income Approach, as buyers are most concerned with cash flow to
service debt. Our opinion of the market value of the subject property, based on
a reasonable exposure period of six months, as of May 1, 2000 is:
-THREE MILLION DOLLARS-
($3,000,000)
<PAGE>
85
CERTIFICATION
-------------
We 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 are our personal,
impartial and unbiased professional analyses, opinions, and conclusions.
. We have no present or prospective interest in the property that is the
subject of this report, and no personal interest with respect to the
parties involved.
. We have no bias with respect to the property that is the subject of this
report or to the parties involved with this assignment.
. Our engagement in this assignment was not contingent upon developing or
reporting predetermined results.
. Our compensation for completing this assignment is not contingent upon
the development or reporting of a predetermined value or direction in
value that favors the cause of the client, the amount of the value
opinion, the attainment of a stipulated result, or the occurrence of a
subsequent event directly related to the intended use of this appraisal.
. Our analysis, opinions, and conclusions were developed, and this report
has been prepared, in conformity with the Uniform Standards of
Professional Appraisal Practice.
. 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, John H. Whitcomb, MAI, CCIM has completed
the requirements under the continuing education program of the Appraisal
Institute.
. John H. Whitcomb, MAI, CCIM and William G. Trask have made a personal
inspection of the property that is the subject of this report.
. No one provided significant professional assistance to the persons
signing this report.
. We are 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/ John H. Whitcomb JAG /s/ William G. Trade JAG
------------------------------ -------------------------------
John H. Whitcomb, MAI, CCIM William G. Trask
St. Cert. Gen. REA #0001234 St. Cert. Gen. REA #0002347
<PAGE>
86
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 the findings of the report may not be utilized by a third party for
any purpose, without the written consent of Whitcomb Real Estate.
No change of any item in any of the appraisal report shall be made by anyone
other than Whitcomb Real Estate and we shall have no responsibility for any such
unauthorized change.
The property has been appraised as though free and clear of mortgages, liens,
leases, servitudes and encumbrances, except as may be described in the
appraisal.
We are not required to give testimony or be in attendance at any court or
administrative proceeding with reference to the property appraised unless
additional compensation is agreed to and prior arrangements have been made.
Unless specifically stated, the value conclusion contained in the appraisal
applies to the real estate only, and does not include personal property,
machinery and equipment, trade fixtures, business value, goodwill or other non-
realty items. Income tax considerations have not been included or valued unless
so specified in the appraisal. We make no representations as to the value
changes, which may be attributed to such considerations.
Neither all nor any part of the contents of the report shall be disseminated or
referred to the public through advertising, public relations, news or sales
media, or any other public means of communication or referenced in any
publication, including any private or public offerings including buy not limited
to those filed with Securities and Exchange Commission or other governmental
agency, without the prior written consent and approval of and review by Whitcomb
Real Estate.
<PAGE>
Assumptions and Limiting Conditions 87
In completing the appraisal, it is understood and agreed that the report are not
now intended, and will not be used in connection with a real estate syndication.
Good and marketable title to the interest being appraised is assumed. We are
not qualified to render an "opinion of title," and no responsibility is assumed
or accepted for matters of a legal nature affecting the property being
appraised. No formal investigation of legal title was made, and we render no
opinion as to ownership of the property or condition of its title.
Unless otherwise noted in the appraisal, it is assumed that there are no
encroachments, zoning, building, fire or safety code violations, or restrictions
of any type affecting the subject property. It is assumed that the property is
in full compliance with all applicable federal, state, local and private codes,
laws, consents, licenses and regulations, and that all licenses, permits,
certificates, approvals, franchises, etc. have been secured and can be freely
renewed and/or transferred to a purchaser.
It is assumed that the utilization of the land and any improvements are within
the boundaries or property lines of the property described, and that there are
no encroachments, easements, trespass, etc., unless noted within the report. We
have not made a survey of the property, and no responsibility is assumed 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 assumes 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, which would render them more or less valuable. No
responsibility is assumed for such conditions, or for engineering which might be
required to discover such factors. Detailed soil studies were not made available
to us, so statements regarding soil qualities, if made in the report, are not
conclusive but have been considered consistent with information available to us
and provided by others. In addition, unless stated otherwise in the appraisal,
the land and soil of the area under appraisement appears firm and solid, but the
appraisal does not warrant this condition.
The appraisal report covering the subject 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
<PAGE>
Assumptions and Limiting Conditions 88
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.
Any proposed construction or rehabilitation referred to in the appraisal report
is assumed to be completed within a reasonable time and in a workmanlike manner
according to or exceeding currently accepted standards of design and methods of
construction.
Any areas or inaccessible portions of the property or improvements not inspected
are assumed to be as reported or similar to the areas, which are inspected.
Unless specifically stated in the report, we found no obvious evidence of insect
infestation or damage, dry or wet rot. Since a thorough inspection by a
competent inspector was not performed for us, the subject improvements, if any,
is assumed to be free of existing insect infestation, wet rot, dry rot, and any
structural damage which may have been caused by pre-existing infestation or rot
which was subsequently, treated.
In the appraisal assignment, the existence of potentially hazardous material
used in the construction, maintenance or servicing of the improvements, such as
the presence of urea-formaldehyde foam insulation, asbestos, lead paint, toxic
waste, underground tanks, radon and/or any other prohibited material or chemical
which may or may not be present on or in the subject property, was, unless
specifically indicated in the report, not observed by us, nor do we have any
knowledge of the existence of such materials on or in the property. We,
however, are not qualified to detect such substances. The existence of these
potentially hazardous materials may have a significant effect on the value of
the property. The client is urged to retain an expert in this field, if
desired. The value conclusion assumes the property is "clean" and free of any
of these adverse conditions unless notified to the contrary in writing.
No effort has been made to determine the possible effect, if any, on the subject
property of energy shortages or present or future federal, state or local
legislation, including any environmental or ecological matters or
interpretations thereof.
We take no responsibility for any events, conditions or circumstances affecting
the subject property or its value, that take place subsequent to either the
effective date of value cited in the appraisal or the date of our field
inspection, which ever occurs first.
The estimates of value stated in this appraisal apply only to the effective
dates of value stated in the report. Value is affected by many related and
unrelated economic conditions within a local, regional, national and/or
worldwide context, which might necessarily affect the prospective value of the
subject property. We assume no liability for an unforeseen change in the
economy, or at the subject property, if applicable.
We believe that the underlying assumptions and current conditions provide a
reasonable basis for the value estimate stated in this appraisal. However, some
assumptions or projections inevitably will not materialize and unanticipated
events and circumstances may occur during the forecast period. These could
include major changes in the economic environs; significant increases or
decreases in current
<PAGE>
Assumptions and Limiting Conditions 89
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.
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>
For Official Use Only
----------------------------------------------
CFN 95870512 10-04-95 05:17 pm
OR Book/Page: 3509 / 3644
Sandy Crawford
Clerk Of Courts, Brevard County
#Pgs: 4 #Names : 2
Trust: 2.50 Re : 7.00
Deed: 17,500 Excise : 0.00 Serv 0.00
Mtg: 0.00 Int Tax: 0.00
----------------------------------------------
SPECIAL WARRANTY DEED
---------------------
THIS INDENTURE made as of the 3/rd/ day of October, 1995, by and between
VILLAGE GLEN, INC., a Florida corporation ("Grantor"), for and in consideration
of Ten Dollars ($10.00) and other good and valuable consideration in hand paid,
receipt of which is hereby acknowledged, hereby grants, bargains, sells, aliens,
remises, releases and conveys unto WINDSOR PARK PROPERTIES 7, a California
limited partnership ("Grantee") whose address is 120 West Grand Avenue,
Escondido, California 92025, the following described real property in the County
of Brevard, State of Florida, to-wit:
See Exhibit "A" attached hereto and made a part hereof.
TOGETHER with all the tenements, hereditaments and appurtenances, with
every privilege, right, title, interest and estate, reversion, remainder and
easement thereto belonging or in anywise appertaining.
TO HAVE AND TO HOLD the same in fee simple forever.
And the Grantor does hereby covenant that, except for the title exceptions
set forth on Exhibit "B" attached hereto and made a part thereof, Grantor does
fully warrant the title to the above described real estate so hereby conveyed
and will defend the same against the
This Instrument Prepared By Grantee: Windsor Park Properties 7
and Return to: ------------------------------
DAVID S. BERNSTEIN. ESQ. S.S. No. 33-0363181
Ruden, Barnett, et al. ------------------------------
Post Office Box 14034
St. Petersburg, Florida 33733
Property Appraiser's
Identification No. 27-36-14-01-57
--------------------
<PAGE>
For Official Use Only
---------------------------
OR Book/Page: 3509 / 3645
---------------------------
lawful claims, arising out of events occurring prior to the recording of this
Deed, of all persons claiming by, through or under the Grantor, but against none
other.
IN WITNESS WHEREOF, the Grantor aforesaid has set its hand and seal
effective as of the 3/rd/ day of October, 1995.
WITNESS: VILLAGE GLEN, INC., a Florida corporation
/s/ David Bernstein
--------------------------
Name: DAVID BERNSTEIN
---------------------
By: /s/ Adam McGavin, Jr.
/s/ Linda B. Wawrzynski ---------------------------------
-------------------------- Adam McGavin, Jr.
Name: Linda B. Wawrynski President
--------------------- Address:
c/o Gerald K. Holstein
8320 W. Sunrise Boulevard
Suite 203
Plantation, Florida 33322
STATE OF FLORIDA
COUNTY OF PINELLAS
The foregoing instrument was acknowledged before me this 3/rd/ day of
October 1995, by Adam McGavin, Jr., as President of VILLAGE GLEN, INC., a
Florida corporation, on behalf of said corporation. He is personally known to me
or has produced __________________ as identification and did (did not) take an
oath.
My Commission Expires:
/s/ David Bernstein
------------------------------------
Name: DAVID BERNSTEIN
-------------------------------
Notary Public
[SEAL]
2
<PAGE>
EXHIBIT A
Lots 57, 58, 59, 60, 61 and 62, INDIAN RIVER GROVES AND GARDENS, according to
the Plat thereof, as recorded in Plat Book 6, Page 86, of the Public Records of
Brevard County, Florida.
<PAGE>
EXHIBIT "B"
PERMITTED EXCEPTIONS
1. Taxes for the year 1995 and subsequent years.
2. Easement in favor of Southern Bell Telephone and Telegraph Company recorded
August 27, 1973, in Official Records Book 1373, Page 965.
3. Water Agreements with the City of Melbourne recorded in Official Records
Book 1355, Page 120; and in Official Records Book 2604, Page 600.
4. Easement in favor of City Gas Company of Florida recorded in Official
Records Book 1381, Page 758.
5. Resolution Regarding Changing of Street Names recorded in Official Records
Book 3192, Page 3592.
<PAGE>
PROFILES OF APPRAISERS
<PAGE>
PROFILE OF APPRAISER
JOHN H. WHITCOMB, MAI, CCIM
St.Cert. Gen. REA #0001234
REAL ESTATE EXPERIENCE
----------------------
Owner
Whitcomb Real Estate
Tampa, FL
Specialize in complex real estate valuations and consulting projects.
Property types include manufactured home communities, recreational vehicle
parks, self-storage facilities, hotels, manufacturing plants, office
buildings, retail buildings and other types of commercial establishments as
well as special use facilities. Mr. Whitcomb is active in the ownership and
management of seven manufactured home communities throughout Florida.
January 1996 to present.
Partner
Chartwell Advisory Group, Ltd.
Tampa, FL
Supervised complex real estate valuations and property tax consulting
projects. Responsibilities included management of all technical staff
members throughout the country. Property types included manufactured home
communities, recreational vehicle parks, hotels, large manufacturing
plants, office buildings and retail buildings. April 1993 to January 1996.
Senior Appraiser
Marshall and Stevens, Inc.
Philadelphia, PA and Tampa, FL
Specialized in preparing appraisals for land and buildings in industrial,
commercial and residential uses. Performed appraisals for purposes of
sale/purchase, property tax appeals, syndication, financing and allocation
of purchase price. September 1985 to March 1990, and June 1992 to April
1993.
Vice President
Strategis Asset Valuation & Management, Inc.
Tampa, FL
Prepared appraisals and feasibility studies on complex commercial
properties. Performed appraisals for purposes of sale/purchase, property
tax appeals, financing and allocation of purchase price. March 1990 to May
1992.
<PAGE>
Profile of Appraiser 2
PROFESSIONAL AFFILIATIONS
-------------------------
MAI, Member Appraisal Institute
CCIM, Certified Commercial Investment Member Commercial Investment Real Estate
Institute
State Certified General Real Estate Appraiser
Florida #0001234
PARTIAL LIST OF CLIENTS AND PROPERTIES
--------------------------------------
<TABLE>
<CAPTION>
Manufactured Home Communities
-----------------------------
<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
Recreational Vehicle Parks
--------------------------
<TABLE>
<S> <C> <C> <C>
Avalon RV Park Clearwater, FL Pioneer Creek Bowling Green, FL
Camp Inn Frostproof, FL Rainbow Village Clearwater, FL
Forest Lake Village Zephyrhills, FL Space Coast RV Resort Rockledge, FL
Hide Away Ruskin, FL Sunshine RV Vero Beach, FL
Holiday RV Resort Leesburg, FL Topics Hudson, FL
Horizon RV Park Davenport, FL Twelve Oaks Sanford, FL
Key RV Park Marathon, FL Village Park Orange City, FL
Self-Storage Facilities
-----------------------
Affordable Self Storage Loganville, GA Orange Avenue Tallahassee, FL
Alpine Self Storage Rockford, IL Plantation Xtra Storage Plantation, FL
Baytree Self Storage Valdosta, GA St. Augustine Self Storage St. Augustine, FL
Budget Self Storage Sterling, VA Southern Self Storage Riviera Beach, FL
Delray Mini Storage Delray Beach, FL Storage Express Lauderhill, FL
Edison Lock Up Edison, NJ Valdosta Self Storage Valdosta, GA
Extra Space Lauderhill, FL Xtra Space Orlando, FL
Howell Self Storage Howell, NJ Your Extra Attic Duluth, GA
Hyde Park Storage Tampa, FL Your Extra Attic Norcross, GA
Jacksonville Storage Jacksonville, FL Your Extra Attic Stockbridge, GA
Okeechobee Storage Hialeah Gardens, FL Your Extra Attic Winters Chapel, GA
Hotels/Resorts
--------------
Canyon Ranch in the Berkshires Howard Johnson Maingate
Comfort Inn Kissimmee Hyatt On Union Square
Comfort Suites Asheville Hyatt Orlando
Embassy Suites Boca Raton Hyatt Wilshire
Hotel Nikko San Francisco Hyatt Regency Houston
Hilton Southwest Freeway Houston La Samanna
Hollywood Beach Hilton Ramada Resort Maingate
Holiday Inn Gainesville Westin Washington, D. C.
</TABLE>
<PAGE>
Profile of Appraiser 4
Financial
---------
Belgravia Capital Heller Financial
Bloomfield Acceptance Company Household Finance Corporation
Chase Manhattan Bank Irving Leasing Corporation
Chrysler Capital Corporation Mfd. Housing Community Bankers
Citicorp Real Estate Mellon Bank
Collateral Mortgage Morgan Stanley
CoreStates Financial Corporation NationsBank
Credit Suisse First Boston Nomura Securities
FINOVA Capital Pacificorp Financial Services
First Union Corporation PACTEL Finance
GE Capital Society National Bank
Goldman Sachs Sun America Insurance
Greentree Financial Union Capital
Real Estate/Real Estate Investment
----------------------------------
W.P. Carey & Company, Inc. LaSalle Partners
Chateau Communities Las Colinas Corporation
Continental Communities Metropolitan Life
Delaware North Companies MHC
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.
<PAGE>
PROFILE OF APPRAISER
WILLIAM G. TRASK
St.Cert. Gen. REA #0002347
REAL ESTATE APPRAISAL EXPERIENCE
--------------------------------
Appraiser
Whitcomb Real Estate
Tampa, FL
Specializing in real estate valuations and consulting projects for
lending institutions, public and private corporations and individuals,
for a variety of uses. Property types appraised include manufactured
housing communities, recreational vehicle parks, manufacturing plants,
office buildings, apartment complexes, retail properties and other
types of commercial establishments. February 1998 to Present.
Appraiser
Atlas Real Estate Group, Inc.
Tampa, FL
Specialized in real estate condemnation valuations and related
studies. Property types appraised include agricultural, industrial,
residential, office buildings, retail properties and other types of
commercial land and establishments. August 1991 to January 1998.
PROFESSIONAL AFFILIATIONS
-------------------------
State Certified General Real Estate Appraiser
Florida #0002347
Georgia #CG007464
PARTIAL LIST OF CLIENTS AND PROPERTIES
--------------------------------------
Manufactured Home Communities
-----------------------------
<TABLE>
<S> <C> <C> <C>
A Garden Walk Palm Beach Gardens, FL Honeymoon Park Dunedin, FL
Bear Creek Ormond Beach, FL La Buona Vita Port St. Lucie, FL
Bonfire Leesburg, FL Lincolnshire Largo, FL
Briarwood Lake Worth, FL Meadowbrook Lakeland, FL
Camelot East Sarasota, FL Mobiland By The Sea Melbourne, FL
Camelot Lakes Sarasota, FL Oak View Arcadia, FL
Carefree Village Tampa, FL Palmetto Hallandale, FL
Clover Leaf Brooksville, FL Plaza Bradenton, FL
Coquina Crossing St. Augustine, FL Ranchero Village Largo, FL
</TABLE>
<PAGE>
Profile of Appraiser 2
William G. Trask
Manufactured Home Communities (Cont.)
-------------------------------------
<TABLE>
<S> <C> <C> <C>
Country Club Estates Venice, FL River Bay Tampa, FL
Country Lakes Coconut Creek, FL Riverview Micco, FL
Country Life Leesburg, FL Serendipity Clearwater, FL
Crystal River Village Crystal River, FL Southern Acres St. Cloud, FL
Diamond Point Leesburg, FL Spanish Trails Zephyrhills, FL
Friendly Village Sellersburg, IN Sun Village Largo, FL
Hammock Lake Fort Meade, FL Sundance Zephyrhills, FL
Heron Cay Vero Beach, FL Sunshine Village Lake Worth, FL
Hibiscus Mount Dora, FL Tall Pines Fort Pierce, FL
Hidden Village St. Petersburg, FL Tanglewood Fort Pierce, FL
High Point Clearwater, FL Vero Palms Vero Beach, FL
</TABLE>
Recreational Vehicle Parks
--------------------------
<TABLE>
<S> <C> <C> <C>
Lazy Lakes RV Sugarloaf Key, FL Ridgecrest RV Leesburg, FL
Lions Lair RV Marathon, FL Sunshine RV Vero Beach, FL
Pioneer Village North Fort Myers, FL Topics RV Spring Hill, FL
</TABLE>
Other
-----
<TABLE>
<S> <C> <C> <C>
ABC Pizza House Tampa, FL Fabian Enterprises Tampa, FL
Blakie's Restaurant Tampa, FL Florida Power & Light St. Petersburg, FL
Breed Automotive Lakeland, FL Mobil Oil Lakeland, FL
Discount Auto Parts Lakeland, FL Pier 1 Imports Hoover, AL
Discount Auto Parts Sarasota, FL Pizza Hut Brandon, FL
Discount Auto Parts Land O' Lakes, FL Pizza Hut Lakeland, FL
</TABLE>
Financial
---------
Belgravia Capital Heller Financial
Collateral Mortgage, Ltd. Lehman Brothers
Executive Commercial Funding NationsBank
First Federal Savings Bank, Leesburg, FL Republic Bank, Port Richey, FL
First National Bank, St. Lucie, FL Signature Financial Services, Inc.
First Union National Bank Union Capital Investments, LLC
GE Capital Corporation United Southern Bank, Eustis, FL
Greentree Financial
<PAGE>
Profile of Appraiser 3
William G. Trask
Real Estate/Real Estate Investment
----------------------------------
Continental Communities National Home Communities
Martin Newby Management Pacific Life
Munao Partnership Windsor Corporation
EDUCATIONAL BACKGROUND
----------------------
Florida State University
University of South Florida
Edison Community College
Hillsborough Community College
Appraisal Institute
International Right of Way Association
