<PAGE>
Exhibit (c)(1)(F)
SUMMARY
REAL ESTATE APPRAISAL REPORT
The 484-space A Garden Walk Mobile Home Community
8200 North Military Trail
Palm Beach Gardens, Unincorporated Palm Beach County, Florida 33410
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 WHITCOMB REAL ESTATE]
May 19, 2000
Steve Waite
Windsor Corporation
6430 South Quebec
Englewood, Colorado 80111
RE: 484-Space A Garden Walk Mobile Home Community
8200 North Military Trail
Palm Beach Gardens, Unincorporated Palm Beach County, Florida 33410
Dear Mr. Waite:
At your request, we have inspected and appraised the above captioned
property. We estimate the "as is" market value of the property rights outlined
herein, as of May 1, 2000, based on an exposure period of six months, to be:
- ELEVEN MILLION SEVEN HUNDRED THOUSAND DOLLARS -
($11,700,000)
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.
A Garden Walk is a fully developed 484-space manufactured home community,
with a clubhouse, pavilion, tennis and shuffleboard courts, horseshoe pits, and
two swimming pools.
Our conclusion is premised on the Assumptions and Limiting Conditions as
cited in our attached report, as well as the facts and circumstances as of the
valuation date. This appraisal has been prepared in accordance with the "Uniform
Standards of Professional Appraisal Practice" (USPAP) as published by the
Appraisal Standard Board of the Appraisal Foundation 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
the Windsor Corporation.
<PAGE>
Steve Waite
May 19, 2000
Page Two
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.
This is a Summary Appraisal, which is intended to comply with the reporting
requirements set forth under Standards Rule 2-2(b) of the Uniform Standards of
Professional Appraisal Practice for Summary Appraisal Reports. This report
represents only summary discussions of the data, reasoning, and analyses
employed in the appraisal process toward the development of our opinion of
value. Supporting documentation has been retained in our files.
Very truly yours,
/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
<S> <C>
Transmittal
Table Of Contents....................................................... 4
Summary Of Facts And Conclusions........................................ 6
Extent Of Confirming, Collecting And Reporting Data..................... 7
Purpose And Function Of The Appraisal................................... 7
Area/Neighborhood Description........................................... 8
Manufactured Home Community Market Overview............................. 10
Land And Site Improvements.............................................. 10
Improvement Description................................................. 11
Ownership And Property History.......................................... 12
Occupancy............................................................... 12
Zoning And Other Land Use Controls...................................... 12
Real Estate Assessment And Taxes........................................ 13
Marketability And Marketing Period...................................... 14
Highest And Best Use.................................................... 14
Valuation Process....................................................... 15
Income Capitalization Approach.......................................... 16
Sales Comparison Approach............................................... 24
Final Estimate Of Value................................................. 28
Certification........................................................... 29
Assumptions And Limiting Conditions..................................... 30
</TABLE>
Addenda
Legal Description
Maps
Profiles Of Appraisers
<PAGE>
5
PHOTOGRAPHS OF THE SUBJECT (Taken May 15, 2000)
[PHOTO APPEARS HERE]
1. Entrance to Subject
[PHOTO APPEARS HERE]
2. Typical Street View
<PAGE>
6
SUMMARY OF FACTS AND CONCLUSIONS
--------------------------------
Property Appraised: 484-Space A Garden Walk Mobile Home Community
-------------------
8200 North Military Trail
Unincorporated Palm Beach County, Florida
Property Rights
---------------
Appraised: Fee Simple Interest, subject to tenant leases.
----------
Land Area: 71.35 acres or 3,108,006 square feet.
----------
Improvements: 484 manufactured home spaces, with a clubhouse,
-------------
pavilion, tennis and shuffleboard courts,
horseshoe pits, and two swimming pools.
Owner: Windsor Park Properties, 6 and Windsor Park
------
Properties, 7
Zoning: RM, Palm Beach County
-------
Highest and Best Use: As Improved -- Current Use
---------------------
Value Indications: Income Approach $11,700,000
------------------
Sales Comparison Approach $11,700,000
Final Estimate of Value: $11,700,000
------------------------
Date of Appraisal: May 1, 2000
------------------
Date of Inspection: May 15, 2000
-------------------
<PAGE>
7
EXTENT OF CONFIRMING, COLLECTING AND REPORTING DATA
---------------------------------------------------
This assignment encompasses providing an "as is" market value of the fee
simple title of the property and improvements, as of the specified date. The
scope of this investigation included an overview of the area and local
manufactured home markets, inspections of the subject properties and their
environs, and the collection and analysis of market data, inspection of the
comparable and competitive properties, consideration and application of the
appropriate valuation methods, and a reconciliation and final estimate of value.
The real estate interest appraised is that of ownership in fee simple
interest, subject to the existing tenant leases. The property is appraised free
and clear of mortgages, liens, servitude's and encumbrances, except those noted
in the body of this appraisal.
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 tenant leases, of
the real estate, as of May 1, 2000. The information, opinions, and conclusions
contained in this report have been prepared as a basis for portfolio valuation.
The date of this appraisal is May 1, 2000. The intended user of this report is
the Windsor Corporation.
Market Value is defined as: The most probable price which a property should
bring in a competitive and open market under all conditions requisite to a fair
sale, the buyer and seller each acting prudently, knowledgeably and assuming the
price is not affected by undue stimulus.
Implicit in this definition is the consummation of a sale as of a specified
date and the passing of title from seller to buyer under conditions whereby:
. Buyer and Seller are typically motivated;
. Both parties are well informed or well advised, and each acting in
what he considers his own best interest;
. A reasonable time is allowed for exposure in the open market;
. Payment is made in terms of cash in U. S. dollars or in terms of
financial arrangements comparable thereto; and
. The price represents the normal consideration for the property sold
unaffected by special or creative financing or sales concessions
granted by anyone associated with the sale./1/
____________________
/1/ The Office of the Thrift Supervision, 12 CFR 564.2(f).
<PAGE>
8
AREA/NEIGHBORHOOD DESCRIPTION
-----------------------------
Location/Access
---------------
The subject property is located along the east side North Military Trail in
an unincorporated area of northern Palm Beach County, just south of incorporated
Palm Beach Gardens. The neighborhood is generally bounded by North Lake
Boulevard to the north, Interstate 95 to the east, Blue Heron Boulevard to the
south and the Florida Turnpike to the west. The center of the neighborhood is
approximately 4 miles west of the Atlantic Ocean. The eastern boundary of the
site abuts Interstate 95.
Land uses generally consist of commercial development along the major
thoroughfares with residential backup. The neighborhood is approximately 80%
built-up with new development occurring west of the subject property across
Military Trail.
Primary access to the subject property is via Military Trail. Military
Trail is a six lane divided thoroughfare, which bisects the neighborhood in a
north/south direction. Access to Interstate 95 is available two miles south of
the subject property via Blue Heron Boulevard and one mile north of the property
via North Lake Boulevard. Access to the Florida Turnpike is available at PGA
Boulevard, four miles northwest of the subject property. Overall, access to the
subject property is considered good.
The subject property's location in regard to the local amenities in the
form of shopping, recreational and activity centers is considered excellent. The
infrastructure is in-place in the neighborhood 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 lack of prime available land in the
neighborhood, and the advanced degree of existing development. The subject
property will benefit from its excellent location and the westward trend of
development.
Population
----------
The Bureau of Economic and Business Research from the University of Florida
estimated Palm Beach County's 1990 population at 863,503, an increase of
approximately 50% over the 1980 figure. This rate of growth ranked the County as
the sixth fastest growing metropolitan area in the United States and second
fastest in the state. The average growth rate for Palm Beach County has been 5%
to 6% per year over the past 20 years. The 1998 population was 1,020,521, an
18.2% increase from 1990. The County now ranks as the 49th largest Metropolitan
Statistical Area in the
<PAGE>
9
Area/Neighborhood Description
nation, up from 58th in 1980. Palm Beach County is the third most populated
county in the state. Future projections indicate a continued population growth
although at a declining rate.
Employment
----------
The Palm Beach market has a well-balanced employment base with no single
industry dominating. This diversified industrial base will continue to be the
driving force for continued growth in this metropolitan area. Reflecting the
health of the local economic climate, all sectors of the area's major industries
have shown growth in the past decade. The Palm Beach County civilian work force
stood at 507,754 as of 1998, with a 5.5% unemployment rate, above the state and
national averages over the same period.
Transportation
--------------
The Palm Beach area is accredited as a major Florida transportation center.
It is served by 15 airlines, Greyhound Bus Lines, Tri-Rail, Amtrak and CSX rail
service, cruise and freight shipping, as well as the interstate highway system.
Its prime geographic location provides easy access to all markets.
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 and 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.
Summary and Conclusion
----------------------
The subject is located just south of Palm Beach Gardens, which is located
in the northern portion of Palm Beach County. The subject's location in regard
to the local amenities in the form of shopping, recreational and activity
centers is considered excellent due to the proximity of the Cities of Palm Beach
Gardens and West Palm Beach. General real estate values have been static over
the last three to four year period.
<PAGE>
10
MANUFACTURED HOME COMMUNITY MARKET OVERVIEW
-------------------------------------------
According to the Florida Manufactured Housing Association's 1996
Statistical Package, there are 139 manufactured home communities in Palm Beach
County. Of this total, there are 46 communities (approximately 33% of the
total), with 101 or more spaces. Additionally, 52 of the communities, or
approximately 37% of the total, are in the 26 to 100-space range. Approximately
30% of the manufactured home communities in Palm Beach County have 100 or less
spaces. The large percentage of large communities points to an established and
sophisticated marketplace, with a variety of ownership forms. The subject, at
484 spaces, is one of the larger communities in Palm Beach County.
LAND AND SITE IMPROVEMENTS
--------------------------
The subject site is an irregularly shaped parcel of land containing
approximately 71.35 acres of gross area. The tract is generally level and at
street grade and drainage of the tract appears adequate. No adverse soil or
subsoil conditions were noted during the physical inspection of the site.
Utility services connected and in service on the date of valuation include
water, electricity, cable television and telephone. An on-site wastewater
treatment plant handles wastewater and storm sewer is handled by the ponds. The
individual sites are accessed by roadways configured to maximize the use of the
land, common to most manufactured home communities. Roadway improvements
include:
Street-bed: Military Trail is an asphalt paved, six-lane
----------
thoroughfare. The subject streets are asphalt paved 20-
foot wide roadways.
Sidewalks/Curb: Military Trail has concrete sidewalks and curbs.
--------------
There are no sidewalks in the subject, however there are
concrete curbs.
Street Lights: Military Trail and the subject park all have
-------------
pole mounted overhead streetlights along the right of way.
Landscaping: Sodded and planted areas extend along the entire
-----------
perimeter and throughout the site.
Other: The subject is enclosed by a six-foot high masonry
------
block and chain link fence.
Encumbrances: None noted.
-------------
Easements: Standard utility easements assumed to exist.
----------
Encroachments: None noted.
--------------
<PAGE>
Land and Site Improvements 11
Our review of the deed and county property records did not reveal any
adverse or potentially adverse interests that would affect the utility of the
subject property. Specifically, there are no recorded, or otherwise known liens,
defects in title or adverse easements. There are no rent controls in effect in
Palm Beach County.
Functional Utility
------------------
The site, which is irregular in shape and contains approximately 71.35
acres, is large enough to accommodate building improvements and roadways as well
recreational amenities and green areas. The site is considered functional for
various residential development scenarios. The current development of 484 total
units equates to an overall density of approximately 6.78 units per acre,
similar to current development standards.
IMPROVEMENT DESCRIPTION
-----------------------
The subject is improved with 484 manufactured home pads, arranged along
streets configured to maximize the available lots. The lots vary slightly in
size, averaging 4,000 square feet. The density of the property is equal to 6.78
units per acre.
The common area amenities include a clubhouse and adjacent pool area,
pavilion and pool, horseshoe pits, petanque, tennis court and shuffleboard
courts. There are four ponds on site that serve to control drainage and as a
view amenity.
The clubhouse is a frame structure on piers, with a gable style roof
structure. This structure contains approximately 6,450 square feet of area and
is configured to provide a recreation/dining hall, kitchen, storage area,
billiards room and laundry room. There are mens and ladies rest rooms. The
interior construction consists of painted or papered drywall walls and ceilings.
The finish flooring is vinyl tile. The lavatories have ceramic floor coverings
and marble wainscot. There are flush mounted fluorescent light fixture and
ceiling fans. The kitchen contains a refrigerator, combination oven and range,
and microwave oven. The kitchen was being re-floored on the date of our
inspection. A brick manager's residence containing approximately 1,872 square
feet is located on the site.
We have not estimated a separate value for these amenities, or equipment,
as they are standard items found at most mobile home parks. These amenities are
typical for a park of this age and size and are adequate and functional in use.
<PAGE>
Improvement Description 12
The subject community and site improvements were built in 1968. The
community is, therefore approximately 32 years old. According to public records,
the clubhouse and manager's residence were built in the mid-1940's. The common
areas, streets, amenities and individual manufactured homes were observed to be
in good overall condition, having been originally constructed of high quality
materials and having been well maintained over the years. No significant item of
deferred maintenance was noted and overall maintenance levels in the community
are rated good.
OWNERSHIP AND PROPERTY HISTORY
------------------------------
The ownership of the subject, as recorded in the Official Records of Palm
Beach County in Official Record Book 8881 at Page 0248, is in the name of
Windsor Park Properties 6 and Windsor Park Properties 7. The deed was recorded
in August 1995, and the indicated consideration was $9,280,000.
OCCUPANCY
---------
A fully developed 484-space manufactured home community occupies the
subject. Our inspection confirmed 44 vacant sites, 2 vacant park owned homes, 2
model homes and 1 employee occupied site. The economic occupancy is 89.9%. The
community is governed, as required by law, by a prospectus, dated October 8,
1985, and revised February 23, 1993. Rents were increased by $8.00 per space per
month on January 1, 2000.
ZONING AND OTHER LAND USE CONTROLS
----------------------------------
The subject is zoned RM, Multiple Family Residential. It is our opinion
that the subject property is in conformance with the zoning code.
Concurrency
-----------
The subject property is in conformance with the approved comprehensive plan
filed by Palm Beach County. Therefore, concurrency is not an issue for the
subject site.
Flood Hazard
------------
The subject property is located in a designated Flood Zone "B" according to
Flood Map Community Number 120192, Panel 0130B, dated October 15, 1982. Zone B
is defined as an area of moderate flood hazard, usually depicted on Flood
Insurance Rate Maps as between the limits of the
<PAGE>
Zoning and Other Land Use Controls 13
base and 500-year floods. B zones are also used to designate base floodplains of
little hazard, such as those with average depths of less than 1 foot.
Environmental
-------------
We observed no obvious areas of contamination on or about the site.
However, we have no qualifications in environmental hazards and recommend an
environmental audit be performed.
REAL ESTATE ASSESSMENT AND TAXES
--------------------------------
The subject property is identified in the Palm Beach County records under
Folio Number 00-42-42-24-00-000-5010. The assessed value of the subject totals
$8,721,473. It is our opinion that the subject property is fairly assessed. The
1999 taxes were $270,176.30 indicating a per space tax liability of $568.63.
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. Our discussions with a number of owner's of investment real
estate and mobile home parks has indicated that "early" payment of real estate
taxes is a very common practice. Additionally, prudent management would also
dictate the payment of real estate taxes to take advantage of any discounts
offered. Our estimate of taxes, in the amount of $261,963, reflects this
practice.
<PAGE>
14
MARKETABILITY AND MARKETING PERIOD
----------------------------------
The subject is competitive with other properties in the marketplace and is
marketable, although not considered a candidate for a resident purchase.
Discussions with large institutional manufactured home community investor
representatives and local area realtors, indicated that "properly priced",
stable, well kept manufactured home communities should "be under contract"
within a six month period in today's market.
Our discussions also indicated overall capitalization rates were higher for
all-age communities and dependent upon occupancy and condition. Pricing is
established by processing gross income, reduced by a vacancy and credit loss
factor, operating expenses and an additional capital charge based on overall
condition, is deducted to arrive at a net operating income (NOI). Those surveyed
indicated that at properties not operating at stabilized occupancy, they were
unwilling to compensate a seller for any of the upside to be gained in filling
the property.
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-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 real estate projects with good occupancies. There has also been
significant institutional investor interest in manufactured home community
investments. In our opinion, the marketing period for the property would be
within the range indicated by the industry participants or six months.
HIGHEST AND BEST USE
--------------------
Highest and Best Use may be defined as: The reasonably probable and legal
use of vacant land or an improved property, which is physically possible,
appropriately supported, financially feasible and which results in the highest
value."/2/
___________________
/2/The Appraisal Institute, The Appraisal of Real Estate, 10th Ed. Chicago: The
----------------------------
Appraisal Institute, 1992, page 275.
<PAGE>
Highest and Best Use 15
We have considered all of the potential uses to which the subject is
legally and physically adaptable. It is our opinion that the current use of the
subject, as a 484-space, manufactured home community, represents the highest and
best use of the subject.
VALUATION PROCESS
-----------------
There are three recognized approaches to the valuation of real property:
Cost; Income; and, Direct Sales Comparison. The appropriateness of each approach
varies with the type and age of the property under examination, as well as the
quantity and quality of applicable market data as of the appraisal date. In the
analyses and appraisal of the subject, we have considered the positive and
negative aspects of each approach for this specific assignment.
The Cost Approach provides a value indication based on the depreciated cost
of the improvements added to land value. The Income Approach produce an estimate
of value through an economic analysis of the net income derived from the
property and is converted to a capital sum at an appropriate rate. The Sales
Comparison Approach produces an estimate of value through a comparison of
similar properties, which have been transferred in the local market.
In the analysis of a fully occupied manufactured home community, investors
are primarily concerned with cash flow to service any debt and the equity
position. While development costs are important for developing communities,
investors assume that these costs are adequately accounted for in rental levels.
In communities where developers have made money on the sale of mobile homes by
offering low space rental rates, an investor would not be willing to compensate
a seller for any more than the income to be received. The subject is fully
developed with no expansion possibilities, therefore a potential investor would
be primarily interested in the cash flow and equity return and we have excluded
the Cost Approach.
<PAGE>
16
INCOME CAPITALIZATION APPROACH
------------------------------
As an introduction to the analysis of the subject it is helpful to identify
the goals and objectives of both buyers and sellers of properties such as the
subject.
From the standpoint of a seller, maximum price is, of course, an initial
goal. Tempered by capital gains considerations and the potential for recapture
of book depreciation accruals, a seller is often forced to consider a negotiated
price that may include such concessions as interim or permanent financing.
Dictated by market forces, the rate, term, and amount of financing may be
favorable, neutral, or unfavorable with respect to the ultimate selling price.
The purchasers of investment realty naturally prefer to pay a minimum price
subject to terms, and within the goal of price minimization seek:
1. Cash flow relative to capital investment measured either on a pre-
income tax or post-income tax basis.
2. Minimal capital investment to permit leverage.
3. Equity build-up through mortgage amortization.
4. Sheltered income through accumulation of book depreciation.
5. Capital accumulation through market appreciation.
The relative importance of the above factors to an investor's formula is
difficult to quantify. Institutional investors, speculators, developers,
financial institutions, and syndicators do not uniformly apply the same
investment strategies. Location, property size, tenant mix, age of the facility,
absence or presence of long term leases, assignability of existing debt,
condition of the facility, level of occupancy, quality of management, and other
related factors are among the criteria that affect the marketability of an
income-producing property in the market.
The first step in the Income Approach to value involves the estimate of
future net operating income to be generated by the subject property. The
estimate of net operating income is derived through the process of estimating
the total potential gross income (PGI from rentals and other sources, less any
vacancy and credit loss producing an effective gross income (EGI) estimate. All
expenses associated with the operation of the property are then deducted to
yield a stabilized net operating income (NOI) estimate.
A survey of the competitive properties is presented in summary form on the
following page.
<PAGE>
RENTAL COMPARABLE CHART
<TABLE>
<CAPTION>
=============================================================================================================================
No. Name Total Monthly Services Included In Amenities
Address Spaces/ Rental Monthly Rates
Occ.
-----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Sunshine Village
1 2765 10/th/ Avenue North 170/ $275.00 to Water, sewer and trash Laundry, shuffleboard
Lake Worth, Unincorporated 166 $305.00 collection. and horseshoes.
Palm Beach County, Florida
-----------------------------------------------------------------------------------------------------------------------------
2 Arrowhead 602/ $381.00 to Water, sewer, lawn Clubhouse, two pools,
6255 Lawrence Road 588 $429.00 maintenance and trash laundry and shuffleboard.
Lantana, Palm Beach County, collection.
Florida
-----------------------------------------------------------------------------------------------------------------------------
3 Mas Verde Mobile Estates 300/ $325.00 to Water, sewer and trash Clubhouse, pools,
5656 Lake Worth Road 297 $335.00 collection. laundry and shuffleboard.
Lake Worth, Palm Beach County,
Florida
-----------------------------------------------------------------------------------------------------------------------------
4 Lantana Cascade 461/ $370.00 to Irrigation water and Clubhouse, pools,
6330 South Congress Avenue 441 $390.00 cable television. shuffleboard and
Lantana, Unincorporated Palm laundries.
Beach County, Florida
-----------------------------------------------------------------------------------------------------------------------------
Subj. A Garden Walk 484/ $373.00 to Water, sewer and trash Clubhouse, pools, tennis
8200 North Military Trail 440 $389.00 collection. courts, petanque and
Palm Beach Gardens, Palm Beach shuffleboard.
County, Florida
=============================================================================================================================
</TABLE>
<PAGE>
Income Capitalization Approach 18
Income Analysis
---------------
The general market practice is on a base lot rent charged on a monthly
basis. The base lot rent in our survey ranged from $275.00 to $381.00 per month,
as indicated by the rent comparables recited in this report. As shown by our
survey, the subject's lot rents are within the market range.
Potential Gross Income
----------------------
In our forecast of total rental income, we have projected 12 months at the
current rent levels. Based on the current rent roll, the total monthly rent
amounts to $182,804 and the average monthly rental rate for the 484 units is
equivalent to $377.69. The potential gross income from rentals is $2,193,648 per
year.
Vacancy and Credit Loss
-----------------------
The subject is an all-age community currently 90.9% physically occupied with
44 of the 484 sites vacant. To the physical vacancy, we have added a small
percentage to account for credit loss in our estimate of economic vacancy of
12.0% of total potential gross income, or $263,238.
Other Income
------------
Additional income is typically derived from sources such as storage fees,
labor charges to the tenants, commissions on sales and rentals of the units.
Historically, the subject has generated from $11,859 (1999) to $19,864 (1997),
in other income. We have based our estimate of other income on the historical
levels, estimating this income at $25.00 per space.
Effective Gross Income (EGI)
----------------------------
Effective Gross Income is derived from income based upon the current
economic rent less a vacancy and credit loss allowance for present and
anticipated losses due to tenant changes, plus any additional income. Thus
potential gross rental income of $2,193,648 less a vacancy and credit loss
allowance in the amount of $263,238, or 12.0% produces an effective gross income
from rentals estimate of $1,930,410. To this we add income derived from other
sources, which totals $12,100, arriving at an effective gross income estimate of
$1,942,510.
<PAGE>
<TABLE>
<CAPTION>
===================================================================================================================================
A Garden Walk - Summary of Historical Operations
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> <C>
Income:
Rents $1,819,173 98.92% $3,758.62 $1,876,704 98.99% $3,877.49 $1,933,087 99.39% $3,993.98
Utility Income 0 0.00% 0.00 0 0.00% 0.00 0 0.00% 0.00
Other Income 19,864 1.08% 41.04 19,142 1.01% 39.55 11,859 0.61% 24.50
-----------------------------------------------------------------------------------------------------------
Total Income $1,839,037 100.00% $3,799.66 $1,895,846 100.00% $3,917.04 $1,944,946 100.00% $4,018.48
Expenses:
Administration/Office $ 72,922 3.97% $ 150.67 $ 71,161 3.75% $ 147.03 $ 66,148 3.40% $ 136.67
Insurance 16,816 0.91% 34.74 15,239 0.80% 31.49 8,559 0.44% 17.68
Maintenance & Repairs 45,287 2.46% 93.57 38,993 2.06% 80.56 43,204 2.22% 89.26
Management Expense 92,177 5.01% 190.45 94,658 4.99% 195.57 97,247 5.00% 200.92
Wages & Benefits 134,391 7.31% 277.67 154,975 8.17% 320.20 156,216 8.03% 322.76
Property Taxes 269,390 14.65% 556.59 252,431 13.31% 521.55 279,211 14.36% 576.88
Utilities 199,109 10.83% 411.38 222,682 11.75% 460.09 230,511 11.85% 476.26
-----------------------------------------------------------------------------------------------------------
Total Expenses $ 830,092 45.14% $1,715.07 $ 850,139 44.84% $1,756.49 $ 881,096 45.30% $1,820.45
Net Operating Income $1,008,945 54.86% $2,084.60 $1,045,707 55.16% $2,160.55 $1,063,850 54.70% $2,198.04
===================================================================================================================================
</TABLE>
<PAGE>
Income Capitalization Approach 20
Operating Expense Analysis
--------------------------
Administrative/Office: Historically, this expense has shown a decreasing trend.
----------------------
In the financial statements, this expense does include some corporate expense
items, which we have not considered. We have stabilized our estimate of this
expense at $140.00 per space per year, which is equal to $67,760 or
approximately 3.49% of the estimated effective gross income.
Insurance: Historically, this expense has exhibited a decreasing trend. Our
----------
estimate of this expense has been stabilized based on the historical amounts at
$25.00 per space per year. This is equal to $12,100 annually or approximately
0.62% of the effective gross income.
Maintenance and Repair: Historically, this expense has varied since 1997. We
-----------------------
have based our estimate on the indicated historical trend at $90.00 per space
per year or $43,560 annually, believed adequate to properly maintain the
community. This amount is equal to approximately 2.24% of the estimated
effective gross income.
Management Fees: This expense typically includes off-site management, the
---------------
oversight of the on-site manager and monthly bookkeeping functions. We used a
rate of 5% of the effective gross income estimate, typical in the market place,
equal to $97,126 or $200.67 per space per year.
Wages and Benefits: Historically, this expense has increased annually since
-------------------
1997. We have based our estimate on the historical data at $325.00 per space per
year or $157,300, which is equal to 8.10% of the estimated effective gross
income.
Property Taxes: This category is project specific due to location. Based on our
---------------
analysis of the historical tax trends, we have estimated the tax liability to be
$261,963. This equates to $541.25 per space per year or approximately 13.49% of
the estimated effective gross income.
Utilities: This expense was equal to $411.38 per space in 1997, $460.09 per
----------
space in 1998 and the 1999 amount is equal to $476.26 per space. We have
estimated this expense at $490.00 per space per year. This is equal to $237,160,
or approximately 12.21% of the estimated effective gross income.
Reserves: This expense category represents the inclusion of set-asides for
---------
major recurring or capital type expenditures experienced periodically by any
property. We have used $25.00 per space per year, believed adequate to cover
future capital costs. This equates to $12,100 annually or approximately 0.62% of
the estimated effective gross income.
Total Expenses: To summarize, we have stabilized total operating expenses for
---------------
the subject property at $889,068. This estimate is equal to 45.78% of the
Effective Gross Income (EGI) estimate or $1,836.92 per space per year. As shown,
expenses have historically ranged between 44.84% (1998) and 45.30% (1999).
<PAGE>
Stabilized Operating Statement - A Garden Walk Mobile Home Community 21
<TABLE>
<CAPTION>
==========================================================================================================
A Garden Walk
Reconstructed Operating Statement
==========================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Income
Spaces Monthly Rent Monthly Total Annualized
--------------------------------------------------------------------------
1 $373.00 $ 373 $ 4,476
270 $374.00 $100,980 $1,211,760
7 $376.00 $ 2,632 $ 31,584
34 $379.00 $ 12,886 $ 154,632
4 $381.00 $ 1,524 $ 18,288
33 $382.00 $ 12,606 $ 151,272
118 $383.00 45,194 542,328
4 $388.00 1,552 18,624
13 $389.00 5,057 60,684
--------------------------------------------------------------------------
484 $377.69 $182,804 Pct. $
of EGI Per Space
-------------------------------
Gross Potential Rental Income $ 2,193,648 112.93% $ 4,532.33
Less:
Vacancy & Credit Loss (263,238) 12.0% $ (543.88)
-------------------------------------------
Effective Gross Income From Rentals $ 1,930,410 99.38% $ 3,988.45
Add:
Miscellaneous Income 12,100 0.62% $ 25.00
-------------------------------------------
Total Effective Gross Income $ 1,942,510 100.00% $ 4,013.45
Expenses
Administrative/Office $ 67,760 3.49% $ 140.00
Insurance 12,100 0.62% 25.00
Maintenance & Repairs 43,560 2.24% 90.00
Management Expense 97,126 5.00% 200.67
Wages & Benefits 157,300 8.10% 325.00
Property Taxes 261,963 13.49% 541.25
Utilities 237,160 12.21% 490.00
Reserves 12,100 0.62% 25.00
-------------------------------------------
Total Expenses $ 889,068 45.78% $ 1,836.92
Net Operating Income $ 1,053,442 54.22% $ 2,176.53
==========================================================================================================
</TABLE>
<PAGE>
22
Income Capitalization Approach
Selection of a Capitalization Rate
----------------------------------
Direct capitalization of terminal net operating income by an overall
capitalization rate extracted from the market provides an excellent indication
of market value. Purchasers of manufactured home communities most often utilize
this method. This method is easily understood, closely related to the market,
and convincing if the overall rates abstracted from recent sales are from
comparable sale properties and accurate income data are available.
Market Data
-----------
The comparable sale data shown in the Sales Comparison section of this
report indicated an overall capitalization rate from 7.44% to 9.83%. Our
analysis of this data indicated a narrow range in overall capitalization rates,
which tend to be influenced by the size of the community and its age and
condition.
Comparable Sales
================================================================
Sale Sale Date Overall
Number Capitalization Rate
----------------------------------------------------------------
1 03/99 9.27%
----------------------------------------------------------------
2 01/99 7.94%
----------------------------------------------------------------
3 09/98 7.44%
----------------------------------------------------------------
4 07/98 8.29%
----------------------------------------------------------------
5 06/98 9.83%
================================================================
Based on the comparison of the sale data to the subject and considering the
current investor and interest rate environment, the overall rate for the subject
would likely be in the 9.0% range. We have concluded a rate of 9.0%.
Debt Coverage Ratio Method
--------------------------
We have also developed an overall rate through the Debt Coverage Ratio
analysis. Current commercial lending policies indicate a mortgage loan of 75%
of market value, based on a 20-year amortization schedule at an annual interest
rate of 7.75%, which yields an annual mortgage constant of 9.8514%. A minimum
debt coverage ratio (DCR) of 1.25 to 1.00, would likely be required for a
property similar to the subject. Based on these assumptions an overall
capitalization rate has been developed, as presented below:
<PAGE>
23
Income Capitalization Approach
<TABLE>
<CAPTION>
================================================================================================
M f DCR OAR
X X =
Loan to Value Ratio Mortgage Constant Debt Coverage Ratio Overall Rate
-------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
0.75 0.098514 1.25 0.092357
-------------------------------------------------------------------------------------------------
Rounded 9.2%
================================================================================================
</TABLE>
The Debt Coverage Ratio method indicated a capitalization rate based upon
financing by local banks. However, as the popularity of manufactured home
community investments has increased, alternate sources of financing have become
available through insurance companies and conduit programs.
The presence of institutional investors in the market and the reduction in
quality of 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.
We have placed a greater emphasis on the overall capitalization rate
indicated by the market data, as this is a direct reflection of risk perceptions
by market participants, although the rates are almost equivalent. Our estimate
of the market value of the subject, indicated by the Income Capitalization
Approach, is calculated as follows:
Net Operating Income Overall Capitalization Rate Market Value
$1,053,442 divided by 0.090 $11,704,911
Rounded to $11,700,000
<PAGE>
24
SALES COMPARISON APPROACH
-------------------------
The fundamental premise of the Sales Comparison Approach is the concept
that the analysis of sales of reasonably similar properties provides an
appraiser with empirical data from which observations and conclusions about the
property being appraised can be made. Proper application of the approach
requires that:
1. Only market transactions be weighed, and the data of each transaction
be confirmed to the greatest extent possible.
2. The degree of comparability of each sale to the subject be considered;
differences in physical, functional, and economic characteristics be
noted; and adjustments for the differences be made.
3. The value conclusion is consistent with the analysis of the sales
data.
So that a conclusion from the analysis of the sales data can be drawn, a
unit of comparison has been selected. Calculation of a unit of comparison
provides a common denominator by which the market sales can be related to each
other and to the subject property. The commonly accepted unit of comparison in
the valuation of manufactured home communities is the selling price per space.
While a diverse array of transactions was initially considered, the sales
selected for direct comparison to the subject are those transactions that are
most similar to the subject. For dissimilar features adjustments are made
indicating the price at which the subject could be expected to sell. In making
adjustments, all relevant factors were considered including:
1. Nature of surrounding development.
2. Size.
3. Availability of competing properties.
4. Effect of time on selling prices.
5. Age and condition of the improvements.
Based on our investigation, the following five sales are the most
significant transactions for direct comparison with the subject.
<PAGE>
Summary of Sale Comparables
<TABLE>
<CAPTION>
==============================================================================================================================
No. Name Sale Price/ Total Price/ Average E.G.I.M./ O.A.R.
Address Sale Date Spaces/ Space Lot Rent Expense %
Occupancy
------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1 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
------------------------------------------------------------------------------------------------------------------------------
2 Honeymoon Park $ 8,500,000 231/ $36,797 $330.87 8.35/ 7.94%
1100 Curlew Road January 1999 98.7% 33.7%
Dunedin, Pinellas County, Florida
------------------------------------------------------------------------------------------------------------------------------
3 Country Lakes Village I and II $14,100,000 472/ $29,873 $273.67 9.40/ 7.44%
5700 Bayshore Road September 1998 100.0% 30.6%
Palmetto, Manatee County, Florida
------------------------------------------------------------------------------------------------------------------------------
4 Pleasure Cove and Plantation Manor $16,600,000 585/ $28,376 $308.31 8.03/ 8.29%
3030 U.S. Highway 1 July 1998 97.3% 33.4%
Fort Pierce, St. Lucie County, Florida
------------------------------------------------------------------------------------------------------------------------------
5 Village Park $ 8,000,000 307/ $26,059 $391.41 6.50/ 9.83%
3900 West Prospect Road June 1998 94.5% 36.1%
Fort Lauderdale, Broward County, Florida
==============================================================================================================================
</TABLE>
<PAGE>
26
Sales Comparison Approach
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 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 Two is Honeymoon Park located in Dunedin, Pinellas
County, Florida. This 231 space age restricted community sold in January 1999
for $8,500,000. This price equates to a sale price per space of $36,797. Based
on an effective gross income of $1,017,882, the EGIM was 8.35 and the overall
rate was 7.94%. The park was 98.7% occupied at the time of sale.
Sale Comparable Three is Country Lakes Village I and II in Palmetto,
Manatee County, Florida. The property has 472 home sites and recently sold for
$14,100,000, or $29,873 per space. Based on an effective gross income of
$1,500,590, the EGIM was 9.40. The expenses represented 30.6% of the effective
gross income and the indicated capitalization rate was 7.44%. This age
restricted community was 100% occupied at the time of sale.
Sale Comparable Number Four is Pleasure Cove and Plantation Manor
Manufactured Housing Communities. The properties are adjacent to one another and
were both built in 1972. There are 585 total spaces and the property sold in
July 1998 for $16,600,000, or $28,376 per space. Based on an effective gross
income of $2,067,085, the EGIM was 8.03. The expenses represented 33.4% of the
effective gross income and the indicated capitalization rate was 8.29%. The
combined occupancy of both communities was 97.3% at the time of sale.
Sale Comparable Number Five is Village Park in Fort Lauderdale, Broward
County, Florida. This 307 space rental park sold for $8,000,000 in June 1998.
This price equates to a sale price per space of $26,059. Based on an effective
gross income of $1,230,257, the EGIM was 6.50, and the overall rate was 9.83%.
This park was 94.5% 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 a 2 year period, having traded under similar market conditions.
Other adjustments, typically considered, are location, amenities, age and
condition, occupancy, etc., and are reflected in the average lot rent. A tenant
is typically willing, absent other factors, to pay more lot rent for a better
located, newer community. This also holds true for amenities, age and other
factors. The average lot rent reflects, in most cases, the market perception
<PAGE>
Sales Comparison Approach 27
of a property's position in the marketplace. It is also typical that lot rent
increases contribute to increases in net operating income. Alternatively, we
have employed the Effective Gross Income Multiplier (EGIM), in this analysis.
The Effective Gross Income Multiplier for the comparable sale properties
ranged between 6.50 and 9.40. 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 age restricted community with a 9.1% physical vacancy.
The subject was observed to be in average condition and has a good location in
Palm Beach County, Florida. All of the comparables had higher occupancy rates
than the subject and the expense ratios are lower, ranging from 27.4% to 36.1%.
By comparison, the subject has a forecast expense ratio of 45.78%. Based on
these considerations, we have concluded an EGIM below the indicated range,
processing the subject's Effective Gross Income of $1,942,510 with an EGIM of
6.00.
Thus $1,942,510 x 6.00 is $11,655,060
Rounded to $11,700,000
On a per space basis, this is equivalent to $24,173.
<PAGE>
28
FINAL ESTIMATE OF VALUE
-----------------------
The two approaches to value applied in the subject analysis yielded these
conclusions:
Income Capitalization Approach $11,700,000
Sales Comparison Approach $11,700,000
Depending on the circumstances of an appraisal, the two approaches to value
apply to various degrees. The income capitalization approach indicates the
amount at which a prudent investor might be interested in acquiring the
property. The sales comparison approach reflects demand and reasonable selling
price expectancy as evidenced by sales of similar properties.
In the reconciliation, we reviewed each approach to value (a) to ascertain
the reliability of the data and (b) to weight the approach that best represented
the actions of typical users and investors in the marketplace.
The income capitalization approach depends on the principles of
substitution and anticipation. This approach postulates that the value of a
property derives from the net income the property will produce during its
economic life. Investors in the market predicate their decisions on economic
factors oriented to the market and concern themselves with net income and its
durability. The income capitalization approach synthesizes the capitalized
return to and of the improvements and to the land. In the current instance, the
availability of sufficient reliable and supportable historical data for the
subject, made the income capitalization approach a reliable gage of the market
value of the subject.
The sales comparison approach uses a number of value indicators, both
physical and economic, including investors' strategies and attitudes reflected
in documented market transactions. The principle of substitution is the basis of
this approach, which states that a prudent investor will pay no more to buy a
property than the cost to buy a comparable substitute property. In the valuation
of the subject property, the sales comparison approach was considered reliable.
The two approaches reflect the same value. Our opinion of value is based on
the Income Approach, as buyers are most concerned with cash flow to service
debt. Our opinion of the market value of the subject, based on a reasonable
exposure period of six months, as of May 1, 2000 was:
- ELEVEN MILLION SEVEN HUNDRED THOUSAND DOLLARS -
($11,700,000)
<PAGE>
29
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. Trask JAG
---------------------------- ------------------------------
John H. Whitcomb, MAI, CCIM William G. Trask
St. Cert. Gen. REA #0001234 St. Cert. Gen. REA #0002347
<PAGE>
30
ASSUMPTIONS AND LIMITING CONDITIONS
-----------------------------------
The primary assumptions and limiting conditions pertaining to the conclusion in
this report are summarized below.
To the best of our knowledge and belief, the statements of facts contained in
the appraisal report, upon which the analysis and conclusion expressed are
based, are true and correct. Information, estimates and opinions furnished to
us and contained in the report or utilized in the formation of the value
conclusion were obtained from sources considered reliable and believed to be
true and correct. However, no representation, liability or warranty for the
accuracy of such items is assumed by or imposed on us, and is subject to
corrections, errors, omissions and withdrawal without notice.
The legal description of the appraised property, as exhibited in the report is
assumed correct.
The valuation may not be used in conjunction with any other appraisal or study.
The value conclusion stated in this appraisal is based on the program of
utilization described in the report, and may not be separated into parts. The
appraisal was prepared solely for the purpose and party so identified in the
Purpose and Function of the Report. The appraisal report may not be reproduced,
in whole or in part, and the findings of the report may not be utilized by a
third party for any purpose, without the written consent of Whitcomb Real
Estate.
No change of any item in any of the appraisal report shall be made by anyone
other than Whitcomb Real Estate and we shall have no responsibility for any such
unauthorized change.
The property has been appraised as though free and clear of mortgages, liens,
leases, servitudes and encumbrances, except as may be described in the
appraisal.
We are not required to give testimony or to be in attendance at any court or
administrative proceeding with reference to the property appraised unless
additional compensation is agreed to and prior arrangements have been made.
Unless specifically stated, the value conclusion contained in the appraisal
applies to the real estate only, and does not include personal property,
machinery and equipment, trade fixtures, business value, goodwill or other non-
realty items. Income tax considerations have not been included or valued unless
so specified in the appraisal. We make no representations as to the value
changes which may be attributed to such considerations.
Neither all nor any part of the contents of the report shall be disseminated or
referred to the public through advertising, public relations, news or sales
media, or any other public means of communication or referenced in any
publication, including any private or public offerings including buy not limited
to those filed with Securities and Exchange Commission or other governmental
agency, without the prior written consent and approval of and review by Whitcomb
Real Estate.
<PAGE>
Assumptions and Limiting Conditions 31
In completing the appraisal, it is understood and agreed that the report are not
now intended, and will not be used in connection with a real estate syndication.
Good and marketable title to the interest being appraised is assumed. We are
not qualified to render an "opinion of title," and no responsibility is assumed
or accepted for matters of a legal nature affecting the property being
appraised. No formal investigation of legal title was made, and we render no
opinion as to ownership of the property or condition of its title.
Unless otherwise noted in the appraisal, it is assumed that there are no
encroachments, zoning, building, fire or safety code violations, or restrictions
of any type affecting the subject property. It is assumed that the property is
in full compliance with all applicable federal, state, local and private codes,
laws, consents, licenses and regulations, and that all licenses, permits,
certificates, approvals, franchises, etc. have been secured and can be freely
renewed and/or transferred to a purchaser.
It is assumed that the utilization of the land and any improvements are within
the boundaries or property lines of the property described, and that there are
no encroachments, easements, trespass, etc., unless noted within the report. We
have not made a survey of the property, and no responsibility is assumed
concerning any matter that may be disclosed by a proper survey. If a subsequent
survey should reflect a differing land area and/or frontages, we reserve the
right to review our final value estimate.
All maps, plats, building diagrams, site plans, floor plans, photographs, etc.
incorporated into the appraisal are for illustrative purposes only, to assist
the reader in visualizing the property, but are not guaranteed to be exact.
Dimensions and descriptions are based on public records and/or information
furnished by others, and is not meant for use as a reference in legal matters of
survey.
Management is assumed to be competent, and the ownership to be in responsible
hands. The quality of property management can have a direct effect on a
property's economic viability and value. The financial projection contained in
the appraisal assumes responsible ownership and competent management. Any
variance from this assumption could have a significant impact on the final value
estimate.
We assume that there are no hidden or unapparent conditions of the property's
soil, subsoil or structures, which would render them more or less valuable. No
responsibility is assumed for such conditions, or for engineering which might be
required to discover such factors. Detailed soil studies were not made
available to us, so statements regarding soil qualities, if made in the report,
are not conclusive but have been considered consistent with information
available to us and provided by others. In addition, unless stated otherwise in
the appraisal, the land and soil of the area under appraisement appears firm and
solid, but the appraisal does not warrant this condition.
The appraisal report covering the subject is limited to surface rights only, and
does not include any inherent subsurface or mineral rights.
The appraisal is made for valuation purposes only. It is not intended nor to be
construed to be an engineering report. We are not qualified as structural or
environmental engineers and we are not qualified to judge the structural and
environmental integrity of the improvements, if any. Consequently, no warranty,
representations or liability are assumed for the structural soundness, quality,
adequacy or capacities of said improvements and utility services, including the
construction materials, particularly the roof, foundations, and equipment,
including the HVAC systems, if applicable. Should there be any question
concerning them, it is strongly
<PAGE>
Assumptions and Limiting Conditions 32
recommended that an Engineering, Construction, and/or Environmental inspection
be obtained. The value estimate stated in this appraisal, unless otherwise
noted, is predicated on the assumption that all of the improvements, equipment
and building services, if any, are structurally sound and suffer no concealed or
latent defects or inadequacies other than those noted in the appraisal.
Any proposed construction or rehabilitation referred to in the appraisal report
is assumed to be completed within a reasonable time and in a workmanlike manner
according to or exceeding currently accepted standards of design and methods of
construction.
Any areas or inaccessible portions of the property or improvements not inspected
are assumed to be as reported or similar to the areas which are inspected.
Unless specifically stated in the report, we found no obvious evidence of insect
infestation or damage, dry or wet rot. Since a thorough inspection by a
competent inspector was not performed for us, the subject improvements, if any,
is assumed to be free of existing insect infestation, wet rot, dry rot, and any
structural damage which may have been caused by pre-existing infestation or rot
which was subsequently, treated.
In the appraisal assignment, the existence of potentially hazardous material
used in the construction, maintenance or servicing of the improvements, such as
the presence of urea-formaldehyde foam insulation, asbestos, lead paint, toxic
waste, underground tanks, radon and/or any other prohibited material or chemical
which may or may not be present on or in the subject property, was, unless
specifically indicated in the report, not observed by us, nor do we have any
knowledge of the existence of such materials on or in the property. We,
however, are not qualified to detect such substances. The existence of these
potentially hazardous materials may have a significant effect on the value of
the property. The client is urged to retain an expert in this field, if
desired. The value conclusion assumes the property is "clean" and free of any
of these adverse conditions unless notified to the contrary in writing.
No effort has been made to determine the possible effect, if any, on the subject
property of energy shortages or present or future federal, state or local
legislation, including any environmental or ecological matters or
interpretations thereof.
We take no responsibility for any events, conditions or circumstances affecting
the subject property or its value, that take place subsequent to either the
effective date of value cited in the appraisal or the date of our field
inspection, which ever occurs first.
The estimates of value stated in this appraisal apply only to the effective
dates of value stated in the report. Value is affected by many related and
unrelated economic conditions within a local, regional, national and/or
worldwide context, which might necessarily affect the prospective value of the
subject property. We assume no liability for an unforeseen change in the
economy, or at the subject property, if applicable.
We believe that the underlying assumptions and current conditions provide a
reasonable basis for the value estimate stated in this appraisal. However, some
assumptions or projections inevitably will not materialize and unanticipated
events and circumstances may occur during the forecast period. These could
include major changes in the economic environs; significant increases or
decreases in current mortgage interest rates and/or terms or availability of
financing altogether; property assessment; and/or major revisions in current
state and/or federal tax or regulatory laws. Therefore, the actual results
achieved during the projected holding period and investor requirements relative
to anticipated annual returns and overall yields could vary from the projection.
<PAGE>
Assumptions and Limiting Conditions 33
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 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>
EXHIBIT A
---------
The South 1/2 of the Southeast 1/4 of Section 24, Township 42 South, Range 42
East, Palm Beach County, Florida, less the Westerly 50 feet for road right of
way of State Road 809 (Military Trail), and less the Easterly 150 feet for State
Road 9 (I-95), and less the Southerly 33 feet for canal right of way, and
LESS THE FOLLOWING:
Commence at the center of said Section 24: thence South 01 degrees 34' 06" West,
along the North-South 1/4 section line of said Section 24, for 1329.19 feet;
thence South 88 degrees 25' 54" East 60 feet to the Point of Beginning; thence
South 01 degrees 34' 06" West for 1034.62 feet to the beginning of a curve
concave Westerly; thence Southerly along said curve, having a radius of
57,355.80 feet and a central angle of 00 degrees 35' 20", through an angle of 00
degrees 15' 40.37" for an arc distance of 261.49 feet; thence North 88 degrees
23' 11" West for 20 feet to a point on a curve concave Westerly; thence from a
tangent bearing of North 01 degrees 49' 47" East run Northerly along said curve
having a radius of 57,335.80 feet and a central angle of 00 degrees 35' 20"
through an angle of 00 degrees 15' 40.64" for an arc distance of 261.47 feet to
the end of said curve; thence North 01 degrees 34' 06" East for 1034.66 feet;
thence South 88 degrees 25' 54" East for 20 feet to the Point of Beginning.
<PAGE>
[MAPS]
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[AREA MAP APPEARS HERE]
<PAGE>
[NEIGHBORHOOD MAP APPEARS HERE]
<PAGE>
[RENT COMPARABLES MAP APPEARS HERE]
<PAGE>
[COMPARABLE SALES MAP APPEARS HERE]
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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
Prepare appraisals and feasibility studies on complex commercial
properties. Performed appraisals for purposes of sale/purchase, property
tax appeals, financing and allocation of purchase price. March 1990 to May
1992.
<PAGE>
Profile of Appraiser 2
PROFESSIONAL AFFILIATIONS
-------------------------
MAI, Member Appraisal Institute
CCIM, Certified Commercial Investment Member Commercial Investment Real Estate
Institute
State Certified General Real Estate Appraiser
Florida #0001234
PARTIAL LIST OF CLIENTS AND PROPERTIES
--------------------------------------
Manufactured Home Communities
-----------------------------
<TABLE>
<S> <C> <C> <C>
Akers Away West Palm Beach, FL Lakeside Douglasville, GA
Alafia Riverfront Gibsonton, FL Lakewood Denton, TX
Alpine Village Sebring, FL Lantana Cascade Lantana, FL
Arbor Oaks Zephyrhills, FL Long Lake Village West Palm Beach, FL
Blue Heron Clearwater, FL Marlboro Court West Palm BEach, FL
Bradenton Trailer Park Bradenton, FL MH Country Club Oakland Park, FL
Carefree Village Tampa, FL Mission El Paso, Tx
Carolina Village Concord, NC Moultrie Oaks St. Augustine, FL
Casa del Monte West Palm Beach, FL Oak Point Titusville, FL
Chateau Forest Seffner, FL Orange Manor East Winter Haven, FL
Chateau Village Bradenton, FL Palm Breezes Club Lantana, FL
Cloverleaf Brooksville, FL Palm Ridge Leesburg, FL
Colonial Coach Greenacres City, FL Panama City Estates Panama City, FL
Coquina Crossing St. Augustine, FL Plantation Estates Seffner, FL
Coral Lake Coconut Creek, FL Portside Jacksonville, FL
Country Club Estates Venice, FL Ridgecrest Fort Pierce, FL
Dessau Austin, TX San Souci North Fort Myers, FL
Foxcroft Village Loch Sheldrake, NY Scenic View Lakeland, FL
Foxwood Estates Lakeland, FL Seminole St. Petersburg, FL
Franklin Estates Murfreesboro, TN Shangri La Largo, FL
Gardens of Manatee Parrish, FL Southwinds Lakeland, FL
A Garden Walk West Palm Beach, FL St. Lucie Village Okeechobee, FL
The Groves Orlando, FL Sunrise Village Cocoa Beach, FL
Gwinnett Estates Snellville, GA Sunshine Lake Worth, FL
Harmony Ranch 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 Melboourne, FL
</TABLE>
<PAGE>
Profile of Appraiser 3
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 an 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
Recreational Vehicle Parks
--------------------------
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
Other
-----
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
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
</TABLE>
<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
