APPRAISAL REPORT
OF
GREENBRIER STATION SHOPPING CENTER
GOLDEN SPRINGS ROAD
ANNISTON, ALABAMA
(B97-134B)
FOR
MR. LARRY MILLER
MERRILL LYNCH & COMPANY
WORLD FINANCIAL CENTER-NORTH TOWER
NEW YORK, NY 10281
AS OF
AUGUST 7, 1997
BY
DAVID P. MULLINS, MAI
H. J. PORTER & ASSOCIATES
14 OFFICE PARK CIRCLE
SUITE 230
BIRMINGHAM, ALABAMA 35223
(205) 871-3600
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H.J. Porter & Associates
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[H.J. Porter & Associates - Letterhead]
August 13, 1997
Mr. Larry Miller
Merrill Lynch & Company
World Financial Center - North Tower
New York, NY 10281
Re: Greenbrier Station Shopping Center
Golden Springs Road
Anniston, Alabama
Dear Mr. Miller:
At your request, I have inspected and appraised the referenced property. The
purpose of the appraisal was to estimate the market value of the leased fee
interest in the subject property, one of fifteen shopping centers to be included
in a portfolio of retail shopping centers that will be cross collateralized,
under single management, and subject to stringent release provisions. AS SUCH,
THE ESTIMATED VALUE OF THE SUBJECT PROPERTY IS SUBJECT TO THE ABOVE CONDITIONS.
This complete appraisal, communicated in a self contained narrative report, has
been prepared in accordance with the Uniform Standards of Professional Appraisal
Practice (USPAP) as amended by the Comptroller of the Currency.
Based upon my investigation into the subject property, and its current economic
environment, I am of the opinion that the market value of the leased fee
interest in the subject property, as of August 7, 1997, is:
FIVE MILLION FIVE HUNDRED THOUSAND DOLLARS
($5,500,000)
Please note that this report is subject to the contingent and limiting
conditions as found in the addendum. It should be noted that my employment was
not conditional upon my producing a specific value with a given range. Future
employment prospects with Merrill Lynch are not dependent upon my producing a
specified value. Also, neither payment of my fee, nor my employment is/was based
upon whether a loan application is approved or disapproved. I appreciate the
opportunity to be of service to you in this matter.
123 N. College St., Ste. 100 o P.O. Box 28 o Auburn, Alabama 36830 o
(334)826-8682 o Fax (334)826-3827
14 Office Park Circle, Suite 230 o Birmingham, Alabama 35223 o (205)871-3600 o
Fax (205)879-3762
418 Scott Street o Montgomery, Alabama 36104 o (334)262-8331 o Fax (334)262-8325
Real Estate Research, Appraisal & Counseling
Mr. Miller
August 13, 1997
page 2
The attached report is submitted in support of these conclusions.
Yours very truly,
/s/ David P. Mullins
--------------------------------
David P. Mullins, MAI
Certified General Real
Property Appraiser
Alabama Certificate #G8
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H.J. Porter & Associates
SUMMARY OF SALIENT FACTS AND CONCLUSIONS
PROPERTY IDENTIFICATION: Greenbrier Station Shopping Center
Golden Springs Road
Anniston, Alabama
HIGHEST AND BEST USE
AS VACANT AND AS IS: Neighborhood Shopping Center
DATE OF VALUE: August 7, 1997
DATE OF REPORT: August 13, 1997
SITE DATA: 7.69 Acres
BUILDING DATA: 66,432 Sq. Ft. - GBA
62,840 Sq. Ft. - NLA divided as:
44,000 Sq. Ft. Winn Dixie
9,240 Sq. Ft. Drugs for Less
9,600 Sq. Ft. Shop Space
ESTIMATED LAND VALUE
AS OF AUGUST 7, 1997: $590,000
VALUE INDICATIONS: $5,190,000 Cost Approach
$5,500,000 Income Approach
$5,200,000 Market Approach
MARKET VALUE: $5,500,000
H.J. Porter & Associates
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TABLE OF CONTENTS
Intended Use of Appraisal ............................................. 1
Environmental Considerations .......................................... 1
Scope of the Assignment ............................................... 1
Date of Value Estimate ................................................ 2
Type Appraisal/Type Report ............................................ 2
Exposure Time ......................................................... 2
Property Ownership .................................................... 2
Property Location ..................................................... 3
Zoning/Public Utilities ............................................... 3
Legal Description/Land Size ........................................... 3
Ad Valorem Tax Analysis ............................................... 4
Purpose of Appraisal/Definition of Value .............................. 6
Rights Appraised ...................................................... 5
Area Analysis - Anniston, Alabama ..................................... 7
Neighborhood Analysis ................................................. 13
Site Analysis ......................................................... 16
Description of Subject Improvements ................................... 17
Highest and Best Use .................................................. 18
The Appraisal Process ................................................. 20
Land Value - Direct Comparison ........................................ 23
Cost Approach to Value ................................................ 29
Income Approach to Value .............................................. 32
Market Approach ....................................................... 50
Reconciliation and Final Value Estimate ............................... 62
Certification ......................................................... 63
EXHIBITS
Location Map .......................................... Facing Page 3
Survey ................................................ Facing Page 4
State Map ............................................. Facing Page 7
Site Plan ............................................. Facing Page 16
Subject Photographs.................................... Facing Page 17
Land Sales Map ........................................ Facing Page 23
Rental Location Map ................................... Facing Page 32
Improved Sales Map .................................... Facing Page 50
REAR EXHIBITS
Engagement Letter
Lease Synopses
Assumptions and Limiting Conditions
Appraiser's Qualifications
Appraiser's Certificate
H. J. Porter & Associates
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INTENDED USE OF APPRAISAL 1
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This appraisal has been requested to function as a basis for loan underwriting
purposes in conjunction with a mortgage loan to be placed upon the subject
property, and for use in the securitization of the mortgage. Accordingly, this
appraisal may be provided by Merrill Lynch & Company to potential investors in a
securitization or other sale of the mortgage loan. The appraisal is undertaken
without departure in accordance with USPAP as promulgated by the Appraisal
Foundation and as amended by the Comptroller of Currency.
ENVIRONMENTAL CONSIDERATIONS
According to a Phase I Environmental Site Assessment conducted by Hazclean
Environmental Consultants, Inc., 10 Old Montgomery Highway, Suite 200,
Birmingham, Alabama, there are no significant environmental liabilities at the
subject site. This valuation is made subject to there being no contamination or
a-typical soil conditions.
SCOPE OF THE ASSIGNMENT
The subject property, a neighborhood shopping center, is one of fifteen shopping
centers to be included in a portfolio of retail properties which will be cross
collateralized, under single management, and subject to stringent release
provisions.
The scope of the assignment includes undertaking the three recognized approaches
to value with consideration given to the current status of the retail market in
the Anniston area. In the Cost Approach local Realtors(R) and Appraisers were
contacted and a search of public records was made to locate comparable land
sales. A detailed inspection of the property was made on August 7, 1997.
Construction detail was taken from inspection notes, and from the Site Plan
titled Winn-Dixie Marketplace, Anniston, Alabama, dated 9/12/95. The Site Plan
was prepared by South & Associates, Inc. 601 Vestavia Parkway, Suite 100,
Birmingham, Alabama. Cost calculations were taken from the Marshall Valuation
Service, a recognized national cost service indexed to the Birmingham market.
In the Income Approach to Value, a survey of local retail market conditions was
made by interviews with local leasing and management agents to determine if the
contract rents for the local tenant shop space was competitive and market
oriented. Expense comparables were studied to estimate appropriate expense
deductions. The resulting net operating income was capitalized into a value
estimate with an overall capitalization rate. The comparable improved sales
found in the Market Approach sold on direct capitalization of stabilized net
operating income rather than discounted cash flow analysis. The overall
capitalization rate was derived from market sales, built-up rates using current
market rates for debt and equity and from published investor surveys.
H. J. Porter & Associates
SCOPE OF THE ASSIGNMENT - (CONTINUED) 2
Local Realtors(R), Appraisers and mortgage lenders were interviewed to locate
sales of comparably improved properties. The sales located were compared to the
subject with adjustments made for items of difference. The three approaches to
value were reconciled to provide a value estimate of the property.
DATE OF VALUE ESTIMATE
The value estimate predicated in this report is made effective as of August 7,
1997, being the date of the most recent on-site inspection of the subject
property. The data utilized in preparing this appraisal was researched, gathered
and/or updated during the period August 7, 1997 to August 11, 1997. The Date of
Report is made effective as of the date of the transmittal letter.
TYPE APPRAISAL/TYPE REPORT
In accordance with the Uniform Standard of Profession Appraisal Practice, the
appraiser has performed a "Complete" appraisal according to Standard Rule 1 and
communicated the results to the client in a "Self-contained Appraisal Report" in
accordance with Standard Rule 2-2a.
EXPOSURE TIME
The exposure time for the subject property, to obtain the values communicated
herein, is estimated to have been within one year or less. This exposure period
assumes competent sales and marketing efforts, the property is maintained in a
marketable condition, and that the property is sold for "market value" as
defined herein. The estimated exposure period is based upon the marketing period
for the Comparable Improved Sales found in the Market Approach.
PROPERTY OWNERSHIP
The subject property is under the ownership of:
Golden Springs Partners, Ltd.
An Alabama Limited Partnership
1900 Church Street, Suite 500
Nashville, TN 37203
The property was part of a larger vacant tract of land acquired from Charles S.
Doster, Hoyt W. Howell, Jr., and William M. Wakefield on September 30, 1995, and
recorded in the Calhoun County Probate Office in Deed Book 1953, Page 1. The
reported acquisition price was $650,000.
H. J. Porter & Associates
[GRAPHICS OMITTED]
Location Map
PROPERTY LOCATION 3
The subject property is located in the Golden Springs area of Anniston, Alabama
on the southwest corner of Golden Springs Road and Greenbrier Road approximately
2.5 miles southeast of Anniston's Central Business District. It is located by
street address as:
Greenbrier Station Shopping Center
Golden Springs Road
Anniston, Alabama
ZONING/PUBLIC UTILITIES
The subject property is located in the City of Anniston and falls under that
city's zoning regulations. The current zoning of the subject site is NSC,
Neighborhood Shopping Center, which allows shopping center use as is currently
on the site. General requirements for this zoning classification call for a
minimum lot size of three acres for a neighborhood shopping center, minimum
setback requirements are ten feet to the right-of-way of any existing street or
alley, and maximum building height of 35 feet. Parking requirements designate a
minimum of 2.5 parking spaces per 1000 feet of net occupied building area. The
subject's improvements and current use complies with the zoning regulations.
The subject has all public utilities available to it, including electric, gas,
water, sewage and telephone. The City of Anniston provides water and sewer and
electric power is provided by Alabama Power. Public services such as police and
fire protection are amply provided for by the City of Anniston.
LEGAL DESCRIPTION/LAND SIZE
Based on information supplied to the appraisers from Terry Templeton with
Newton, Oldacre, McDonald, project developers, the subject property is legally
described as:
As a starting point, start at the Northwest corner of said
Section 22; thence South 00(degree)00'18" West for a
distance of 79.39 feet to a point, said point being on the
South right-of-way of Greenbrier Drive; thence South
89(degree)52`34" East and along the South right-of-way line
of said Greenbrier Drive for a distance of 1,993.55 feet to
a point; thence South 89(degree)44`56" East, continue along
the South boundary of Greenbrier Drive for a distance of
296.71 feet to the POINT OF BEGINNING of the parcel herein
described; thence continue South 89(degree)44`45" East and
along the South boundary of Greenbrier Drive for a distance
of 40.20 feet to a point; thence South 00(degree)03'47" East
for a distance of 174.73 feet to a point; thence North
89(degree)56'13" East for a distance of 249.92 feet to a
point on the West boundary of Golden Springs Road; thence
South 00(degree)03'47" East and along the West boundary of
Golden Springs Road for a distance of 411.37 feet to a
point; thence South 44(degree)56'13" West for a distance of
246.97 feet to a point; thence South 89(degree)56'13" West
for a distance of 413.26 feet to a point on the East
boundary of Greenbrier Industrial Park; thence North
00(degree)02'22" East and along the East boundary of
Greenbrier Industrial Park for a distance
H. J. Porter & Associates
[GRAPHICS OMITTED]
[MAP OF GREENBRIER INDUSTRIAL PARK]
LEGAL DESCRIPTION/LAND SIZE - (CONTINUED) 4
of 31.51 feet to a point; thence North 00(degree)01'56" East
and along said East boundary of Greenbrier Industrial Park
for a distance of 329.63 feet to a point; thence North 00
(degree)00'13" East and along the East boundary of said
Greenbrier Industrial Park for a distance of 224.86 feet to
a point; thence North 89(degree)56'13" East for a distance
of 274.11 feet to a point; thence North 44(degree)56'13"
East for a distance of 45.25 feet to a point; thence North
00(degree)03'47" West for a distance of 133.76 feet to a
point; thence North 45(degree)03'47" West for a distance of
13.01 feet to the POINT OF BEGINNING. Said parcel containing
7.69 acres.
As indicated by the copy of the survey on facing page, the site is irregular
shaped and contains 411.37 feet of frontage on Golden Springs Road, and the
average depth is 564 feet.
As indicated previously, the subject property is one of fifteen shopping center
to be included in a portfolio of retail properties which will be cross
collateralized, under single management, and subject to stringent release
provisions. The other shopping centers, included in the portfolio, are listed as
follows:
===================================================================
59 West Shopping Center Bessemer, AL
Clanton Marketplace Clanton, AL
Betts Crossing Shopping Center Opelika, AL
Opp Marketplace Opp, AL
Russell Crossing Shopping Center Phenix City, AL
29 North Shopping Center Cantonment, FL
Nine Mile Plaza Shopping Center Pensacola, FL
Parker Shopping Center Parker, FL
The "Y" Shopping Center Panama City Beach, FL
Mandeville Marketplace Mandeville, LA
Brownsville Place Shopping Center Brownsville, TN
Chicot Crossing Shopping Center Pascagoula, MS
Delchamps Plaza Long Beach, MS
One Main Place Moss Point, MS
===================================================================
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AD VALOREM TAX ANALYSIS
The subject parcel is under the taxing authority of the Calhoun County Tax
Assessor's Office and is found on the tax rolls as:
Assessed to: Golden Springs Partners, Ltd.
P.O. Box 176
Prattville, AL 36067
Parcel I.D. #: 11-21-5-22-0-003-001.026
H. J. Porter & Associates
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AD VALOREM TAX ANALYSIS - (CONTINUED) 5
Value: Land: $214,500
Improvements: 0
--------
Total: $214,500
Annual Tax: $2,080.65
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Due to the subject's recent completion, ad valorem tax values reflect land only.
In order to estimate the subject's stabilized taxes, three shopping centers were
analyzed on the basis of appraised value per square foot. The Calhoun County Tax
Assessor appraises all properties in the county and applies the millage rate of
the municipality where the property is located to the assessed value. The tax
rate in the City of Anniston, Calhoun County for commercial property is $4.85
per $100 of assessed value with an assessment ratio of 20% of appraised value.
The comparable properties used to estimate the subject's appraised value are
illustrated in the following table.
AD VALOREM TAX ANALYSIS
Comparable Name Yr. Blt. Size - SF App. Value Value/SF
Greenbrier S.C. 1989 50,800 $1,885,350 $37.11
Coldwater Creek 1989 51,850 $1,890,470 $36.46
Saks Plaza 1989 58,325 $2,052,200 $35.19
================================================================================
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The Tax Assessor's appraised value per square for the three comparables range
from $35.19 to $37.11. As indicated in the table above, all three comparables
are older than the subject. Comparable 1 is most similar to the subject in terms
of location. Based on these comparables, the Tax Assessor's appraised value for
the subject property is estimated to be $39.00 per square foot. From this
estimate of value, the subject's taxes are calculated in the following table
which shows the division of taxes between Winn Dixie and the remainder of the
shopping center.
SUBJECT'S ESTIMATED TAX
Total Winn Dixie Remainder
Building Area 62,840 44,000 18,840
Estimated Value Per SF $39.00 $39.00 $39.00
---------- ---------- --------
Total Estimated Value $2,450,760 $1,716,000 $734,760
Assessment Ratio 20% 20% 20%
-- -- --
Assessed Value $490,152 $343,200 $146,952
Milage Rate 0.0485 0.0485 0.0485
---------- ---------- --------
Estimated Tax $23,772 $16,645 $7,127
Tax Per Sq. Ft. $0.38 $0.38 $0.38
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H. J. Porter & Associates
6
PURPOSE OF APPRAISAL/DEFINITION OF VALUE
This appraisal is made for the purpose of estimating the market value of the
leased fee interest in the subject property. Market Value is defined by the
Appraisal Standards Board of the Appraisal Foundation in the Uniform Standards
of Professional Appraisal Practice 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
and knowledgeably, and assuming the price is not affected by
undue stimulus. Implicit in this definition is the
consummation of a sale as of a specified date and the
passing of title from seller to buyer under conditions
whereby:
1. Buyer and seller are typically motivated;
2. Both parties are well informed or well advised, and acting in what
they consider their own best interest;
3. A reasonable time is allowed for exposure in the open market;
4. Payment is made in terms of cash in U.S. Dollars or in terms of
financial arrangements comparable thereto; and
5. The price represents the normal consideration for the property sold
unaffected by special or creative financing or sales concessions
granted by anyone associated with the sale.
RIGHTS APPRAISED
The ownership interest in the subject property appraised is the "Leased Fee
Estate." The Dictionary of Real Estate Appraisal, 3rd Edition, Page 204, defines
Leased Fee Estate as, "an ownership interest held by a Landlord with the right
of use and occupancy conveyed by lease to others. The rights of lessor "the
leased fee owner" and the leased fee are specified by contract terms contained
within the lease." A Lease Synopsis for each of the subject's tenant leases is
found in the Addendum.
H. J. Porter & Associates
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AREA ANALYSIS - ANNISTON, ALABAMA
The subject's geographical location is within the City of Anniston, Calhoun
County Alabama. The four basic factors which should be considered in analyzing
an area are: (1) Physical-Location factors; (2) Economic-Financial factors; (3)
Political-Government factors; and (4) Sociological factors. Each of the factors
is briefly analyzed.
PHYSICAL-LOCATION FACTORS
The City of Anniston is located in south central Calhoun County. Calhoun County
is in the northeastern corner of Alabama. Distance to other major metropolitan
areas are illustrated in the table below.
Atlanta, GA East 90 miles
Birmingham, AL West 69 miles
Chattanooga, TN North 111 miles
Mobile, AL South 278 miles
Montgomery, AL South 111 miles
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Anniston is the county seat for Calhoun County, and is the area trade center.
Located at the end of the Appalachian plateau, the topography in the area ranges
from nearly level to gently rolling. Ranging in altitude from 710 feet to 1,310
feet above sea level, the climate is temperate, with a mean temperature in July
of 80.3 degrees, and a mean temperature in January of 40.6 degrees. Average
annual rainfall is 53 inches.
The area is well located in regard to distribution with easy access to major
markets via-Interstate Highway 20 which runs easterly to Atlanta and westerly to
Birmingham. Interstate 59 is located approximately thirty miles to the north and
can be accessed by US Highway 431, a four lane divided highway. There are 21
motor freight terminals, and two rail lines serving the area. AMTRAK passenger
service is also available twice daily. Birmingport, on the Tenn/Tom waterway, is
approximately seventy-five miles west via Interstate 20, giving access to the
Alabama State Docks at Mobile, Alabama. The Anniston Municipal airport has a
7000 foot pave and lighted runway, and provides access to private and commuter
flights.
H. J. Porter & Associates
[GRAPHICS OMITTED]
[COUNTY-TOWN MAP OF THE STATE OF ALABAMA]
AREA ANALYSIS - ANNISTON, ALABAMA (CONTINUED) 8
ECONOMIC-FINANCIAL FACTORS
Calhoun County's population increased sporadically from 1970 to 1980. From 1980
to 1990, the county's population decreased 4% from 119,761 to 116,034. Based on
the 1990 Census, the populations of the major cities in Calhoun County are
listed in the following table.
=============================================
POPULATION - 1990 Census
=============================================
Anniston 26,623
Jacksonville 10,283
Oxford 9,362
Piedmont 5,544
Weaver 2,715
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The primary reason for the decline in the county's population was the initial
announcement in 1985 of the potential closing of Ft. McClellan which resulted
from the Federal Government's Military Base Closure and Realignment Program. The
effect of this announcement on residential and commercial property was stagnant
property values.
Through a concerted effort from local leaders, state Senators and Congressman,
Ft. McClellan was removed from the "hit list" of potential base closings. Ft.
McClellan has been the Army's primary base for chemical weapons storage and
training facilities. Although the number of Army personnel assigned to the base
and the corresponding civilian employees has been less than it was in the mid to
late 1980's, the psychological impact on the local population was renewed hope
of economic prosperity. This in turn had a positive impact on residential and
commercial property values in the past several years.
However, a final decision has recently been made to close For McClellan.
According to the Chamber of Commerce in Anniston, the closing will be phased
over a period of several years. Several real estate agents in the Anniston
market have indicated that the base closing will have somewhat of a negative
effect on the market. However, since the closing is to be phased out over
several years, the Anniston market is expected to have time to readjust.
Although the base will cease to operate under its current military directive, a
recent public announcement indicated that the base will be used in part for a
anti-terrorist training facility which will create approximately 1,000 jobs.
This new training facility will help off-set the negative impact of closing the
base.
For many years Ft. McClellan has been the mainstay of the Anniston and Calhoun
County economies. As a result of the closing of Ft. McClellan, local political
and civic leaders have come to realize that they must diversify their industrial
base and economic structure. In conjunction with this realization, these leaders
have built a new area Chamber of Commerce and greatly expanded it's staff to
attract new industry to the area.
H. J. Porter & Associates
AREA ANALYSIS - ANNISTON, ALABAMA (CONTINUED) 9
Another factor which will have a positive impact on the community and the
potential to attract new industry is the Alabama Department of Transportation's
plans to improve and extend major traffic arteries. US Highway 431 will be
extended from it's intersection with State Highway 21 in north Anniston to
connect with Golden Springs Road in southeast Anniston. Golden Springs Road will
be widened from two to five lanes from just north of it's intersection with
Greenbrier Road southward to Interstate 20. This new road will create an eastern
loop and open a substantial amount of land for future residential and commercial
development.
The second part of the DOT's plans include the widening, straightening and
connecting of primary roads linking U.S. Highway 431 approximately three miles
west of it's intersection with State Highway 21 in north Anniston to Interstate
Highway 20 in the Coldwater community. This improved road system will create a
western loop and likewise open additional land for development.
Although the population in Calhoun County declined in the 1980's, retail sales
showed an overall increase from 1988 through 1996. During this time period,
retail sales had an average annual increase of 1.65%. Only during the year from
1988 to 1989 did retail sales decline. The table below illustrates the change in
retail sales from 1988 through 1993.
TAXABLE RETAIL SALES 1988-1993
Year Sales
-----------------------------------------------
1988 $625,390,000
1989 $615,436,000
1990 $634,254,000
1991 $645,159,000
1992 $720,624,000
1993 $754,325,000
1994 $801,800,000
1995 $839,490,000
1996 $866,512,000
-----------------------------------------------
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Source: University of Alabama Business Ctr.
H. J. Porter & Associates
AREA ANALYSIS - ANNISTON, ALABAMA (CONTINUED) 10
Like retail sales, the total labor force increased during the period from 1990
to 1993. The table below illustrates this growth.
=====================================================
EMPLOYMENT TRENDS
=====================================================
Year
-----------------------------------------------------
1990 50,750
1991 51,410
1992 52,840
1993 52,740
-----------------------------------------------------
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Source: Economic Abstract of Alabama 1995
As of May 1997 the unemployment rate in the Anniston MSA was 4.3% as compared to
the state unemployment rate of 4.6%. The area labor force works in a variety of
industries. The table below shows the area's ten largest employers, products
produced and number of employees.
================================================================================
NAME PRODUCTS EMPLOYEES
---- -------- ---------
Anniston Army Depot Tank Rebuild Center 3450
Fort McClellan Training Center 2787
NE AL Regional Medical Center Hospital 1285
Springs Industries Comforters 1150
Jacksonville State University 4-year University 707
MCD Microwave Ovens/Dehumidifiers 550
SCT Yarn Yarn Mill 530
United Defence, LP Forging 500
Blue Mountain Industries Yarn/Thread Mill 495
Anniston Sportswear Trousers 430
--------------------------------------------------------------------------------
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Source: Calhoun County Chamber of Commerce
H. J. Porter & Associates
AREA ANALYSIS - ANNISTON, ALABAMA (CONTINUED) 11
In 1994 the estimated average household income was $31,800 and the estimated
number of households was 44,369. As illustrated in the table below, over 50% of
the all households had incomes exceeding $25,000.
==================================================
INCOME RANGE PERCENT OF HH'S
$150,000 or more .33%
$100,000 to $149,999 1.42%
$75,000 to $99,999 2.65%
$50,000 to $74,999 11.48%
$35,000 to $49,999 17.50%
$25,000 to $34,999 19.31%
$15,000 to $24,999 19.00%
Under $15,000 28.31%
--------------------------------------------------
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Source: Calhoun County Chamber of Commerce
POLITICAL-GOVERNMENT FACTORS
The City of Anniston is effectively governed under the Mayor-Council form of
government. Anniston has a fire rating of 4 and an effective police force. The
City of Anniston also has an active Planning and Zoning Commission.
Calhoun County is effectively governed by a County Commission. Police protection
is provided by the County Sheriff's Department. There are no zoning regulations
in the unincorporated areas of the county. Building regulations are ensured by
the County Building Inspectors and County Health Department.
SOCIOLOGICAL FACTORS
The convenience of Cheaha State Park, Alabama's highest point, and the Talladega
National Forest, as well as Birmingham's metropolitan culture provide an outlet
for those seeking a wide range of activities ranging from football and
basketball to Broadway musicals and top name entertainers. The area is also
endowed with a number of excellent dining and tavern facilities in the area, as
well as numerous theaters, a country club, several public golf courses and
numerous public tennis courts.
H. J. Porter & Associates
AREA ANALYSIS - ANNISTON, ALABAMA (CONTINUED) 12
AREA SUMMARY
In summary, the Anniston MSA presently exhibits a sound economy with a sound
economic base and history of high employment. Based on conversation with market
participants, it appears that the future economy in Anniston will be impacted by
the base closure, however, the negative impact will be ameliorated by the phase
out period. The subject property is well located in regards to local residential
areas and future potential growth areas of the County.
H. J. Porter & Associates
13
NEIGHBORHOOD ANALYSIS
The term neighborhood is defined in "The Appraisal of Real Estate" 10th Ed. at
page 172 as "a group of complementary land uses."
The four basic factors which must be considered in analyzing a neighborhood or
district, as in an area analysis are:
Physical and Locational Factors
Economic and Financial Factors
Political and Governmental Factors
Sociological Factors
Each of these factors is discussed briefly with conclusions as to their effect
on the subject property.
PHYSICAL AND LOCATIONAL FACTORS
The subject property is located in the city limits of Anniston, Alabama at the
southwest corner of Golden Springs Road and Greenbrier Road. At the present
time, Golden Springs Road is a two lane road, with plans to widen to four-lanes
with a center turn lane. This proposed road construction will extend northward
from the intersection of Morgan/Golden Springs Road and Interstate 20 to Highway
431 in north Anniston. The purpose of widening Golden Springs Road is to
alleviate the heavy traffic volume along Quintard Avenue. This proposed road
construction is referred to as the eastern bypass for the Anniston area.
Greenbrier Road is a two-lane road that connects Quintard Avenue to the west and
Golden Springs Road to the east. It is currently being widen to three lanes. The
subject property is approximately 1.25 miles north of the intersection of
Morgan/Golden Springs Road and Interstate 20 and about two miles east of
Quintard Avenue. Quintard Avenue is a main thoroughfare that runs north and
south through the City of Anniston. The downtown district of Anniston is about
2.5 miles northwest of the subject neighborhood.
US Highway 78, approximately one mile south of the subject, is the primary
east/west traffic artery serving the City of Oxford. Property along Highway 78
East between the two interstate highway exits is growing with new commercial
developments. This is the main growth area in the City of Oxford and will have a
positive affect on the subject neighborhood. According to Herman Robertson,
Right of Way Engineer with the Alabama Department of Transportation 4th
Division, this area of Highway 78 is currently being widened to a five lane
road.
The subject neighborhood, which is loosely described as the Golden Springs area
in southeast Anniston, consists of mix-uses. Property east and north of the
subject is mostly residential. Greenbrier Industrial Park is located adjacent to
the subject to the west along Greenbrier Road. St. Mark United Methodist Church
is located across from the subject along Greenbrier Road,
H. J. Porter & Associates
NEIGHBORHOOD ANALYSIS - (CONTINUED) 14
and there is a proposed Catholic Church at the northeast corner of Golden
Springs Road and Greenbrier Road. Property located west of the subject along
Greenbrier Road is mostly commercial uses. Property located at the intersection
of Greenbrier Road and Coleman Road, approximately 1/2 mile west, consist
Greenbrier Plaza (formerly anchored by Winn Dixie) and Greenbrier Village, an
unanchored strip center. Other uses include apartments, banks, and small
businesses. Based on land use patterns, it appears that the subject neighborhood
is in a growth stage and should continue into the near future.
The topography in the subject neighborhood is mostly, level with some rolling
terrain and adequate drainage. Utilities available to the area are serviced by
major providers such as the City of Anniston, Alagasco, and Alabama Power. These
utilities include electricity, gas, telephone, water, and sewer.
ECONOMIC AND FINANCIAL FACTORS
The newest development to impact the subject neighborhood is a 109 acre
commercial/industrial subdivision located at the Morgan Road/Golden Springs Road
exit of I-20, which is approximately 1.25 mile south of the subject. Six
commercial sites have been sold and are being or planned for development. These
developments include Cracker Barrel Restaurant, Long Horn Steakhouse, Jameson
Inn, and Colonial Bank. Planned developments include a chinese restaurant and
another limited service motel. Wendy's restaurant is also building on a site
retained by the developers. There are approximately 30 additional commercial
sites remaining to be sold.
As previously discussed, demand for property along Highway 78 East between
Quintard Avenue and Golden Springs Road is growing. The widening of Highway 78
East to a five lane road will have a positive effect on the subject's immediate
neighborhood. Also, the proposed Eastern Bypass will increase the traffic volume
in the subject's immediate area which will have a positive effect on the subject
property.
POLITICAL AND GOVERNMENTAL FACTORS
The subject property is located in Calhoun County in the city limits of
Anniston, Alabama. The subject property has fire and police protection from the
City of Anniston. The subject property is currently zone NSC, Neighborhood
Shopping Center and the Planning and Zoning Department appear to be
pro-development in the City of Anniston. The City of Anniston has a
Mayor-Council form of government.
H. J. Porter & Associates
NEIGHBORHOOD ANALYSIS - (CONTINUED) 15
SOCIOLOGICAL FACTORS
The City of Anniston has a city school system which has a good reputation.
Jacksonville State University is the fourth largest university in the state and
is located north of Anniston. The cities of Anniston and Oxford offer cultural
and recreational facilities such as the Anniston Museum of Natural History,
Anniston Community Theatre, Oxford lake and Civic Center, Neely Henry Lake, and
the Victoria. The Victoria is a country inn and restaurant which as formerly an
1880's residence.
CONCLUSIONS
The subject neighborhood consists of mixed-use development such as residential,
commercial and industrial. At the present time, there are only two competing
shopping centers in the neighborhood which are Greenbrier Plaza and Greenbrier
Village, neither of which has a food anchor. Harco Drugs is located at
Greenbrier Plaza. With the construction of the proposed Eastern Bypass, new
development will emerge and traffic volumes will increase. The subject's
immediate neighborhood should continue to grow into the near future.
H. J. Porter & Associates
[GRAPHICS OMITTED]
[FLOOR PLAN OF WINN-DIXIE MARKETPLACE]
16
SITE ANALYSIS
The subject property is located in the southwest comer of Golden Springs Road
and Greenbrier Road in Anniston, Alabama. As indicated in the site plan on the
facing page, the subject property is irregular shaped. The individual site
characteristics of the shopping center site are as follows:
Size: 7.69 Acres
Shape: Irregular
Street Frontage: 411 feet on Golden Springs Road
40 feet on Greenbrier Road
Curb-cuts: There are two curb cuts on Golden Springs
Road and one on Greenbrier Road.
Excess Land: None
Topography: The site is now level. Prior to construction
it was rolling.
Drainage/Flood
Hazard: Drainage is adequate. According to the
FEMA Flood Insurance Rate Map, Community
Panel # 010020 0001 C, the subject property
is not located in a flood hazard zone.
Utilities: All utilities are available to the site.
Site Improvement: There are approximately 225,000 square feet
of asphalt and concrete paving which
accommodates 374 parking spaces and drive
lanes. Other improvements include
approximately 1,900 linear feet of concrete
curb and gutters, pylon sign, and parking lot
light standards.
H. J. Porter & Associates
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SUBJECT PHOTOGRAPHS
[GRAPHICS OMITTED]
[PHOTOGRAPH]
1. Front of Subject
2. Winn-Dixie
3. shop space
4. Rear of shop space
5. Rear of Winn-Dixie
6. Golden Springs Road north view
7. Golden Springs Road south view
H. J. Porter & Associates
SUBJECT PHOTOGRAPHS
[GRAPHICS OMITTED]
[PHOTOGRAPH]
1. Front of Subject
2. Winn-Dixie
3. shop space
4. Rear of shop space
5. Rear of Winn-Dixie
6. Golden Springs Road north view
7. Golden Springs Road south view
H. J. Porter & Associates
SUBJECT PHOTOGRAPHS
[GRAPHICS OMITTED]
[PHOTOGRAPH]
1. Front of Subject
2. Winn-Dixie
3. shop space
4. Rear of shop space
5. Rear of Winn-Dixie
6. Golden Springs Road north view
7. Golden Springs Road south view
H. J. Porter & Associates
SUBJECT PHOTOGRAPHS
[GRAPHICS OMITTED]
[PHOTOGRAPH]
1. Front of Subject
2. Winn-Dixie
3. shop space
4. Rear of shop space
5. Rear of Winn-Dixie
6. Golden Springs Road north view
7. Golden Springs Road south view
H. J. Porter & Associates
SUBJECT PHOTOGRAPHS
[GRAPHICS OMITTED]
[PHOTOGRAPH]
1. Front of Subject
2. Winn-Dixie
3. shop space
4. Rear of shop space
5. Rear of Winn-Dixie
6. Golden Springs Road north view
7. Golden Springs Road south view
H. J. Porter & Associates
SUBJECT PHOTOGRAPHS
[GRAPHICS OMITTED]
[PHOTOGRAPH]
1. Front of Subject
2. Winn-Dixie
3. shop space
4. Rear of shop space
5. Rear of Winn-Dixie
6. Golden Springs Road north view
7. Golden Springs Road south view
H. J. Porter & Associates
SUBJECT PHOTOGRAPHS
[GRAPHICS OMITTED]
[PHOTOGRAPH]
1. Front of Subject
2. Winn-Dixie
3. shop space
4. Rear of shop space
5. Rear of Winn-Dixie
6. Golden Springs Road north view
7. Golden Springs Road south view
H. J. Porter & Associates
17
DESCRIPTION OF SUBJECT IMPROVEMENTS
The subject's improvements were completed and occupied in January 1997. The
building contains 66,432 square feet of gross building area, and 62,840 square
feet of stated leased area. The difference between gross building area and
stated leased area is due to the Winn-Dixie lease. Their building contains
47,592 square feet but their lease states a demised area of 44,000 square feet,
with the difference being the loading and rear storage areas. Other divisions of
space include 9,240 square feet leased to Revco Drugs, and 9,600 square feet of
local/regional shop tenants.
Basic construction detail includes:
Roof: Built up tar and gravel over rigid insulation on metal
decking.
Walls: Exterior walls are brick veneer over concrete block on the
building front and painted concrete block on the sides and
rear. Partition walls between tenant spaces are painted
sheetrock on metal wall studs.
Canopy: Canopies are a combination of brick veneer and raised metal
seam awnings built on brick and jumbo block columns.
Doors: Anodized aluminum store front doors. Interior (rest room)
doors hollow core wood.
Windows: Anodized bronze aluminum store fronts with single glazing.
Floors: Reinforced 4" concrete slab with resilient tile cover.
Insulation: Rigid insulation in built-up roof system.
Ceilings: Suspended lay-in acoustic tile with recessed fluorescent
light fixtures.
HVAC: Individual roof mounted electric central heating and cooling
for each unit. Make unknown.
Plumbing: One or two-two fixture restrooms in each shop space. The
total building area is fully equipped with a fire sprinkler
system.
H. J. Porter & Associates
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18
HIGHEST AND BEST USE
Highest and best Use is defined in the Dictionary of Real Estate Appraisal, 3rd
edition, page 171, as:
"The reasonably probable and legal use of vacant land or an improved
property, which is physically possible, appropriately supported,
financially feasible, and that results in the highest value. The four
criteria the highest and best use must meet are legal permissibility,
physical possibility, financial feasibility, and maximum
profitability."
Based on this definition, consideration must be given to both the subject land
site as if vacant, and the total property as improved.
HIGHEST & BEST USE - AS VACANT
PHYSICALLY POSSIBLE - The subject's land area of 7.69 acres would support an
office complex, a neighborhood shopping center, apartment complex, industrial
building or a combination of these uses. The shape and configuration of the site
is well suited for a neighborhood shopping center. The site has sufficient area
to allow these uses and provide sufficient area for parking.
LEGALLY PERMISSIBLE - The subject's zoning of NSC, Neighborhood Shopping Center,
does not restrict commercial development of the subject site.
FINANCIALLY FEASIBLE - The land use pattern in the neighborhood indicates retail
and other commercial uses are located around the intersection of Greenbrier and
Coleman Roads, approximately .5 miles west of the subject. With the planned
widening of Golden Springs Road, and current widening of Greenbrier Road, this
pattern will likely shift to the subject's location, and increase residential
demand for the Golden Springs area. Retail and commercial uses are typically
located at intersections of primary traffic arteries like the subject's.
With consideration to the subject's size and zoning, it would appear therefore,
that the optimum use of the subject site would be for retail purposes.
MAXIMALLY PRODUCTIVE - The maximally productive use of the subject property is a
function of the density and development potential of the site. Due to the
dynamic state of supply and demand for retail space in the subject's market
environment, a build-out commensurate with successful leasing activity is most
prudent.
Based upon the previous analysis, the highest and best use of the subject site,
as vacant and available to be put to its highest and best use, is for a food and
drug anchored neighborhood shopping center.
H. J. Porter & Associates
HIGHEST AND BEST USE - (CONTINUED) 19
HIGHEST & BEST USE - AS IMPROVED
The use of the subject site currently, for a neighborhood shopping center and
parking appears to be consistent with highest and best use as if vacant. Next
focus shifts to the adequacy of the improvements for maximizing return.
PHYSICALLY POSSIBLE - The existing building on the subject site is well located
on the subject site with parking conveniently located near the retail shops. The
existing building's contribution to total value is substantial and appears to
provide the highest return to the land. The quantity and quality of the
improvements or total size and design of the building appears to be consistent
with highest and best use.
LEGALLY PERMISSIBLE - The improvements in place on the subject property are
consistent with the zoning restrictions.
FINANCIALLY FEASIBLE - No items were noted which would necessitate renovation or
improvement to command a higher rental rate.
MAXIMALLY PRODUCTIVE - the subject's existing improvements appear to be
consistent with the highest and best use of the subject land site as if vacant.
Based on this analysis, the subject's neighborhood shopping center is considered
to be the highest and best use of the property, as improved.
H. J. Porter & Associates
20
THE APPRAISAL PROCESS
The appraisal process is a procedure for estimating the market value of real
property. This process involves gathering all pertinent information available
from the market which may influence the value of the subject property. This data
is then utilized in forming an estimate of value based upon the three generally
accepted approaches to value. These three approaches are the Cost Approach, the
Income Approach, and the Direct Sales Comparison Approach.
COST APPROACH
The Cost Approach is defined as that approach in appraisal analysis which is
based upon the proposition that an informed purchaser would pay no more than the
cost of producing a substitute property with the same utility as the subject
property. It is assumed that the potential purchaser considers producing a
substitute property with the same utility as the property being appraised. This
analysis involves the cost to buyer of producing an exact replica of the subject
property, in the same location and condition as the subject property, as of the
effective date of the appraisal.
The application of the Cost Approach involves the following steps:
1. Estimating value of the site as if vacant and available to be put to its
highest and best use.
2. Estimating the reproduction cost new of the improvements.
3. Estimating all elements of accrued depreciation.
4. Subtracting the total accrued depreciation from the reproduction cost new
of the improvements (resulting in an estimate of the present worth of the
improvements).
5. Adding the present worth of all the improvements (including site
improvements) to the estimated site value.
6. Rounding the figure to an appropriate indication of value.
The major limitations of the Cost Approach is its reliance upon an estimation of
accrued depreciation. Generally, the older the property and the higher the
estimate of accrued depreciation, the less reliable becomes the value indication
from this approach. This is particularly critical in the valuation of older
properties that normally incur greater amounts of depreciation. The Cost
Approach is particularly appropriate when the property being appraised involves
relatively new improvements which represent the highest and best use of the site
or when the improvements are relatively unique or specialized and there is
limited or a total lack of comparable properties which have sold recently.
H. J. Porter & Associates
THE APPRAISAL PROCESS - (CONTINUED) 21
INCOME ANALYSIS
The Income Analysis is defined as that procedure in appraisal analysis which
converts anticipated benefits (dollar income or amenities) to be derived from
the ownership of property into a value estimate. Anticipated future income
and/or reversions are discounted to a present-worth figure through the
capitalization process.
This analysis requires an estimate of market rent based upon comparable rent of
leased properties. This rental estimate is a gross amount and all expenses to
real estate are deducted. These expenses include vacancy and rent loss which,
when subtracted from the gross income, produces the effective gross income.
Other expenses include real estate taxes, management cost, insurance cost, and
maintenance expense. If applicable, a reduction would also be made for services
and utilities. All expense estimates are obtained from the market by comparison
to similar structures.
After all expenses have been subtracted from the gross income, the resulting
figure is the net operating income, which will be capitalized into value. The
capitalization rate is derived from actual sales that have occurred in the
market place. The sales are analyzed in order to estimate the net operating
income of the property. After the net operating income is estimated, it is
divided by the sales price to provide an indication of the overall
capitalization rate. Capitalization rates can also be built up from the market
factors considered most applicable to income-producing properties. After the net
operating income and the capitalization rate are estimated, the net income is
then capitalized into a value indication by the applicable capitalization
technique.
DIRECT SALES COMPARISON APPROACH
The Direct Sales Comparison Approach is defined as that approach in an appraisal
analysis which is based upon the proposition that an informed purchaser would
pay no more for the property than the cost to him of acquiring an existing
property with the same utility. Presumably, the potential purchaser considers
the alternatives that are available to him and then makes a rational decision
based upon the information he has about those alternatives that are available to
him and then makes a rational decision based upon the information he has about
those alternatives.
The application of the Direct Sales Comparison Approach involves selecting a
number of competitive properties which have recently sold on the market. The
information derived from this section is analyzed through an adjustment process
which develops indications of what the competitive properties would have sold
for if they possessed all the important characteristics of the subject property.
These indications fall into a pattern surrounding one figure which, when
appropriately rounded, is an indication of the market value of the subject
property as of the date of the appraisal.
H. J. Porter & Associates
THE APPRAISAL PROCESS - (CONTINUED) 22
The reliability of this approach is dependent upon the availability and
verification of the comparable sales data. The degree of comparability between
the competitive properties and the subject, and the absence of non-typical
conditions affecting the sales price of those properties are also important
items that are considered. Therefore, this approach is particularly applicable
when an active market provides sufficient quantities of reliable data which can
be verified from authoritative sources.
RECONCILIATION ANALYSIS
The reconciliation analysis is an evaluation process where the appraiser
carefully evaluates value indications from each of the three approaches. The
reliability of each approach to the present appraisal problem is examined and
weight is given to the accuracy, reliability, quantity of data available for use
in each approach, and the approach in which the market participant typically has
the greatest confidence.
H. J. Porter & Associates
[GRAPHICS OMITTED]
[MAP OF ANNISTON]
Comparable Land Sales
23
LAND VALUE - DIRECT COMPARISON
To estimate value for the subject site, a comparison is made between the subject
property and recent sales of similar commercial sites in the subject market.
Sales considered include:
Sale # 1
Address/Locations: SW corner of Golden Springs Rd. & Greenbrier Dear Road
Anniston, AL
Grantor: William Wakefield/Hoyt Howell/Charles Doster
Grantee: Golden Springs Partners, Ltd.
Sale Date: 09/30/1995
Sale Price: $650,000
Cash Equiv Price: $650,000
Terms: Cash to Seller
Recorded: Deed Book 1953, Page 00001; Calhoun County
Verified With: Charlie Evans
Verified By: Linda Yates, H.J. Porter & Associates
Date Verified: 05/02/1996
Rights Conveyed: Fee simple title
Land Size: 12.97 Acres; 564,973 Square Feet
Zoning: NSC
Highest & Best Use: Commercial
Use At Sale: Vacant
Topo/Drainage: Fairly level/Average
Access/Visibility: Good/Good
Utilities: All public
Remarks: This is the purchase of the larger parcel from which
the subject property was subdivided. Approximately 15%
of the total area was located in a FEMA Floodway and
wetland. This area can not be developed without a "No
Rise" certificate.
Indicators of Value: PRICE PER ACRE: $50,116
H. J. Porter & Associates
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LAND VALUE - DIRECT COMPARISON (CONTINUED) 24
Sale # 2
Address/Location: NW Corner of S. Quintard Avenue and Greenbrier Road
Anniston, AL
Grantor: City of Anniston
Grantee: McLain Commercial Real Estate
Sale Date: 06/05/1997
Sale Price: $1,270,000
Cash Equiv Price: $1,270,000
Terms: Cash to seller
Recorded: Deed Book 2012, Page 973; Calhoun County
Verified With: Scott McLain's Secretary Sandy (205) 533-3414
Verified By: David Mullins, MAI
Date Verified: 07/18/1997
Rights Conveyed: Fee simple title
Land Size: 631.00 Front Ft; 347 Avg Depth (Ft.)
5.478 Acres; 238,637 Square Feet
Zoning: GB, General Business
Highest & Best Use: Commercial
Use At Sale: Ball field and recreation park
Topo/Drainage: Level/Adequate
Access/Visibility: Good/Good
Utilities: All available
Remarks: This is the old Ezell Park. McLain purchased and
subdivided for commercial uses. OfficeMax, Hollywood
Video, and Ruby Tuesday's have purchased lots and are
developing facilities. There are two remaining vacant
lots for sale.
Indicators of Value: PRICE PER ACRE: $231,836
H. J. Porter & Associates
|
LAND VALUE - DIRECT COMPARISON (CONTINUED) 25
Sale # 3
Address/Location: West Side of Morgan Road
Oxford, AL
Grantor: Golden Springs, L.L.C.
Grantee: Cracker Barrel Old Country Store, Inc.
Sale Date: 08/19/1996
Sale Price: $575,000
Cash Equiv Price: $575,000
Terms: Cash to seller
Recorded: Deed Book 1982, Page 888; Calhoun County
Verified With: Stan Pate, Developer's Consultant (205) 752-0677
Verified By: David Mullins, MAI
Date Verified: 02/15/1997
Rights Conveyed: Fee simple title
Land Size: 3.65 Acres; 158,994 Square Feet
Zoning: NSC
Highest & Best Use: Commercial
Use At Sale: Commercial
Topo/Drainage: Fairly level/Good
Access/Visibility: Good/Good (Interstate exposure)
Utilities: All public
Remarks: This property has been developed with Cracker Barrel
Restaurant and is part of the Golden Spring
Development. It is located on the west margin of Morgan
Road and the north margin of I-20.
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Indicators of Value: PRICE PER ACRE: $157,534
H. J. Porter & Associates
LAND VALUE - DIRECT COMPARISON (CONTINUED) 26
Sale # 4
Address/Location: West Margin Highway 21
Anniston, AL
Grantor: IRS Properties
Grantee: Wal Mart Stores
Sale Date: 01/08/1992
Sale Price: $900,000
Cash Equiv Price: $900,000
Terms: Cash to Seller
Recorded: Book 1831, Page 529; Calhoun County
Verified With: Stall Ingram (205) 236-0892
Verified By: Linda Yates, H.J. Porter & Associates
Date Verified: 02/01/1993
Rights Conveyed: Fee Simple
Land Size: 15.36 Acres; 669,082 Square Feet
Zoning: Neighborhood Shopping Center
Highest & Best Use: Commercial
Use At Sale: Vacant
Topo/Drainage: Level/Adequate
Access/Visibility: Average/Average
Utilities: All Available
Remarks: Site located in the Central Park area between North
Anniston and Weaver. Site has been developed with a new
Wal Mart store.
Indicators of Value: PRICE PER ACRE: $58,594
H. J. Porter & Associates
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LAND VALUE - DIRECT COMPARISON (CONTINUED) 27
Land Sales 1 through 4 detailed above are compared and adjusted to the subject
for notable differences. These adjustments are made in the adjustment grid
below.
==========================================================================================================================
LAND SALES COMPARISON GRID
==========================================================================================================================
Comp. Number Subject #1 #2 #3 #4
Grantor Wakefield etal City of Anniston Gd. Sp. LLC IRS Prop.
Grantee Gd Sp. Part. McLain Comm. Cracker Wal Mart
Barrel Stores
Stores
Location Golden Springs Rd Golden Springs Rd S. Quintard Av Morgan Rd Hwy 21
Anniston, AL Anniston, AL Anniston, AL Oxford, AL Anniston, AL
--------------------------------------------------------------------------------------------------------------------------
Cash Eq. Price SEE BELOW $650,000 $1,270,000 $575,000 $900,000
Date of Sale 08/07/97 09/30/95 06/05/97 08/19/96 01/08/92
Land Size Acres 7.690 12.97 5.48 3.65 15.360
==========================================================================================================================
Unadj. $/Acres $50,116 $231,836 $157,534 $58,594
Unadj.$/Sq. Ft. $1.15 $5.32 $3.62 $1.35
==========================================================================================================================
ADJUSTMENTS #1 #2 #3 #4
Conditions of Sale Normal Normal Normal Normal
Net Adjustment $0 $0 $0 $0
Market Conditions 3.71% 0.35% 1.93% 11.17%
(Time) @ 2% /year
==========================================================================================================================
Preliminary Adj. Price $674,115 $1,274,445 $586,098 $1,000,530
==========================================================================================================================
PHYSICAL DIFFERENCES #1 #2 #3 #4
Floodway 1.15 1.00 1.00 1.00
Location 1.00 0.40 0.70 0.80
--------------------------------------------------------------------------------------------------------------------------
Subtotal-Physical 1.15 0.40 0.70 0.80
==========================================================================================================================
Adjusted Price $775,232 $509,778 $410,268 $800,424
Adjusted Price/Acres $59,771 $93,059 $112,402 $52,111
==========================================================================================================================
Size 1.31 0.84 0.68 1.43
==========================================================================================================================
Adjusted Price/Acre $78,300 $78,170 $76,433 $74,519
==========================================================================================================================
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No adjustments for financing, rights conveyed, or condition of sale were
required. The comparable sales listed above were adjusted to the subject for:
Time: Considers an increase in value of 2% per year over the past
several years. This is based on general trends as there were
no sale-resales found with which to compare.
H. J. Porter & Associates
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LAND VALUE - DIRECT COMPARISON (CONTINUED) 28
Floodway: Sale 1, from which the subject was subdivided, was partially
located in a FEMA Floodway and is a wet-lands area. This
area, which consisted of approximately 15% of the total, is
not useable without a "No Rise" Certificate. As such,
Comparable 1 was adjusted +15%.
Location: The subject is similar in location to Sale 1 and inferior to
Sales 2, 3, and 4. Based on a comparison with Sale 1, after
adjustment for Floodway and with consideration to size
differences, the superior sales were adjusted -60%, -30%,
and -20% respectively.
Size: The subject contains 7.69 acres and the sales ranged in size
from 3.65 acres to 15.36 acres. The comparables were
adjusted to the subject based on the Dilmore Size Adjustment
Program, a statistical analysis of the relationship of size
and sale price per acre. The comparables were adjusted +31%,
-16%, -32% and +43% respectively.
|
The comparable sales, after adjustment, ranged from $74,519 to Z$78,300 per acre
with a mean adjusted sale price of $76,855 per acre. The subject is most
comparable to Sale 1 in location and Sale 2 in size. Based on these adjusted
sales, the subject site, as if vacant, is valued as:
7.69 Acres @ $77,000 = $592,130
Rounded $590,000
H. J. Porter & Associates
29
COST APPROACH TO VALUE
The cost factors used are from the Marshall Valuation Service, a national cost
service indexed to the Anniston market and found to be reliable and consistent
with costs incurred by builders within the area. The cost factors from this cost
service are inclusive of architect/engineering fees, construction period
interest, contractors overhead and profit, and normal site prep costs. Excluded
are site improvements such as paving, landscaping, etc., land costs, and
indirect costs such as developers profit and permanent loan fees.
Calculations of total building reproduction costs are:
VALUATION - COST APPROACH
DIRECT COST
Estimated Replacement Cost New - [MARKET]
Good Market Class "C" -See. 13 Page 19
Base Cost $56.83
Sprinkler System $1.70
------
Total Base Cost $58.53
Area/Perimeter Adjust. x 0.82
Adjust to Current Cost x 1.05
Adjust Local Conditions x 0.90
------
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Gr.Bldg Area 47,592 Sq.Ft. x $45.35 per Sq.Ft.= $2,158,297
Canopy @ 35% of Base Cost
3,075 Sq.Ft. x $15.87 per Sq.Ft.= $48,800
Estimated Replacement Cost New - [NEIGHBORHOOD SHOPPING CENTER]
Average, Class "C" -See. 13 Page 21
Base Cost $46.08
Sprinkler System $1.70
------
Total Base Cost $47.78
Area/Perimeter Adjust. x 0.95
Adjust to Current Cost x 1.05
Adjust Local Conditions x 0.90
------
Gr.Bldg Area 18,840 Sq.Ft. x $42.89 per Sq.Ft.= $808,048
Canopy @ 35% of Base Cost
2,370 Sq.Ft. x $15.01 per Sq.Ft.= $35,574
================================================================================
Total Replacement Cost New - All Structures $3,050,719
================================================================================
H. J. Porter & Associates
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COST APPROACH TO VALUE - (CONTINUED) 30
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INDIRECT COST
Indirect costs including developer's entrepreneurial profit and permanent loan
fees are added to the subject's direct cost to estimate the total value of the
subject property via the Cost Approach. Developer's entrepreneurial profit is
added at 20% based upon sales of new shopping centers, discussions with
Developers and Brokers, and with consideration given to the cross
collateralization of the portfolio of retail properties to which the subject
will be a part. Permanent loan fees are added at the amount typically charged by
lenders - 2% of the loan amount (1% construction - 1% permanent).
ACCRUED DEPRECIATION AND OBSOLESCENCE
The subject's improvements were recently completed, and consequently, there are
no items of deferred maintenance. Incurable physical depreciation is estimated
using the economic age/life method and calculated as:
================================================================================
Total Building Replacement Cost New $3,050,719
--------------------------------------------------------------------------------
Estimated Chronological Building Age 0.5
Effective Age 0.5
Economic Life New 40
Percentage Depreciation (Effective Age/Life New) 1.3%
--------------------------------------------------------------------------------
Dollar Depreciation - Incurable Long Lived Items
|
$3,050,719 X 1.3% $39,659
Based on inspection of the subject property and its neighborhood, there is no
functional or external obsolescence.
Site improvements are added at their depreciated values and the underlying
vacant shopping center site land value is added as arrived at previously by
comparison. The calculation of Value by the Cost Approach is presented in
tabular form on the following page.
H. J. Porter & Associates
COST APPROACH TO VALUE - (CONTINUED) 31
=============================================================================================
CALCULATION OF COST
=============================================================================================
DIRECT COST
Total Replacement Cost New - Structures (from prior page) $3,050,719
Less Accrued Depreciation ($39,659)
---------
Total Depreciated Cost New $3,011,060
Add: Site Improvements Percent Depreciated
Area Cost / SF Dep. Cost
---- --------- ---- ----
Asphalt Paving - SF 225,000 $1.35 2% $297,675
Concrete Curbs - LF 1,900 $7.20 1% $13,543
Site Work $190,000
Project Sign $25,000
Landscaping $15,000
--------
Subtotal $541,218
----------
Total Value - All Improvements $3,552,278
INDIRECT COST
Entrepreneurial Profit 20% Cost+Land $828,456
Title and Legal $35,000
Permanent Loan Fees 2% of Loan Amt
Loan basis = 75% of Cost $62,134
Marketing/Lease Commissions $50,000
Miscellaneous $75,000
--------
TOTAL INDIRECT COST $1,050,590
----------
TOTAL COST NEW $4,602,868
LAND VALUE (from prior section) $590,000
----------
VALUE BY COST - At Completion $5,192,868
(Rounded) $5,190,000
=============================================================================================
|
H. J. Porter & Associates
[GRAPHICS OMITTED]
[MAP OF THE CITY OF BIRMINGHAM]
Comperable Rentals
32
INCOME APPROACH TO VALUE
As a primary approach to value for the subject, the estimated net operating
income is capitalized into a value estimate by use of an overall capitalization
rate. In arriving at a net operating income, consideration is given to rentals
and expenses which are incurred in the operation of the property.
POTENTIAL GROSS INCOME
The subject property is anchored by Winn Dixie Marketplace containing 44,000
square feet of stated leased area, and Revco Drugs with 9,240 square feet. There
are 9,600 square feet of non-anchored shop space leased to 4 tenants on lease
terms ranging from 3 to 5 years and rental rates ranging from $9.50 to $11.50
per square foot. There is one vacant shop containing 1,440 square feet. Found in
the Addendum is a Lease Synopsis for each of the subject tenants.
In order to determine if the subject's local shop space rents are competitive
and market oriented, and to estimate their market vacancy, five comparable
neighborhood shopping centers were inspected, surveyed, and compared to the
subject. Although three of the comparable centers are located in Anniston area,
their age and/or specific locations are less indicative of the subject property.
As such, two newer Winn Dixie anchored shopping centers in the
Birmingham-Atlanta corridor of I-20 are compared to the subject.
Comparable rentals considered for the subject's non-anchored space are shown on
the following pages.
H. J. Porter & Associates
INCOME APPROACH TO VALUE - (CONTINUED) 33
[GRAPHICS OMMITTED]
[PHOTOGRAPH]
RENT COMPARABLE 1
Name: Greenbrier Plaza
LOCATION: SW corner of Greenbrier Road & Coleman Road
Anniston, Alabama
YEAR BUILT: 1984
SIZE: 50,800 Sq. Ft. GBA
ANCHORS TENANTS: 35,200 Sq. Ft. Vacant - formerly Winn Dixie
9,800 Sq. Ft. Harco Drugs
4,200 Sq. Ft. Local Shop
------
49,200 Sq. Ft. NLA
SHOP TENANTS: Sally Beauty Supply, Concord Cleaners,
Karate, Custom Pizza, New China Restaurant
SHOP SPACE RENTS: $4.75 - $10.00 per Sq. Ft.
EXP. CONTRIBUTIONS: Taxes, CAM and Insurance
SHOP OCCUPANCY: 80%
VERIFIED WITH: Victory Developers (706) 327-4774, 1/29/97
REMARKS: The owners would not verify specific rents of
the tenants. Only a rental range for the shop
space was given. Winn Dixie has relocated to
Greenbrier Station 1/2 mile west. Also
Concord Cleaners have relocated. Since
construction of Greenbrier Station this
shopping center has declined substantially.
H. J. Porter & Associates
|
INCOME APPROACH TO VALUE - (CONTINUED) 34
[GRAPHICS OMITTED]
[PHOTOGRAPH]
RENT COMPARABLE 2
NAME: Saks Plaza
LOCATION: U.S. Highway 431
Anniston, Alabama
YEAR BUILT: 1984
SIZE: 58,325 Sq. Ft. GBA
ANCHORS TENANTS: 41,125 Sq. Ft. Winn Dixie
9,800 Sq. Ft. Harco Drugs
5,600 Sq. Ft. Local Shop
------
56,525 Sq. Ft. NLA
SHOP TENANTS: Trend Setters, Chiropractor, Olan Mills
SHOP SPACE RENTS: $5.00 - $9.00 per Sq. Ft.
EXP. CONTRIBUTIONS: Taxes, CAM, Insurance
SHOP OCCUPANCY: 100%
VERIFIED WITH: Victory Developers (706) 327-4774, 1/29/97
REMARKS: The owners would not verify specific rents
of the tenants. Only a rental range for the
shop space was given.
H. J. Porter & Associates
|
INCOME APPROACH TO VALUE - (CONTINUED) 35
[GRAPHICS OMITTED]
[PHOTOGRAPH]
RENT COMPARABLE 3
NAME: Coldwater Creek
LOCATION: Highway 78 & Coldwater Road
Anniston, Alabama
YEAR BUILT: 1984
SIZE: 51,850 Sq. Ft. GBA
ANCHORS TENANTS: 35,200 Sq. Ft. Winn Dixie
9,800 Sq. Ft. Harco Drugs
5,250 Sq. Ft. Local Shop
------
50,250 Sq. Ft. NLA
SHOP TENANTS: Supper 10, West Video, Palmetto Textile
Outlet
SHOP SPACE RENTS: $4.00 - $8.00 per Sq. Ft.
EXP. CONTRIBUTIONS: Cam, Tax and Insurance
SHOP OCCUPANCY: 83% (estimate)
VERIFIED WITH: Victory Developers (706) 327-4774, 1/29/97
REMARKS: The owners would not verify specific rents of
the tenants. Only a rental range for the shop
space was given. The occupancy level has been
estimated based on the number of vacant
units. This center is located in a rural area
of Calhoun County.
H. J. Porter & Associates
|
INCOME APPROACH TO VALUE - (CONTINUED) 36
[GRAPHICS OMITTED]
[PHOTOGRAPH]
RENT COMPARABLE 4
NAME: Pell City Marketplace
LOCATION: Highway 231 South
Pell City, Alabama
YEAR BUILT: 1993
SIZE: Anchors: 138,941 Sq. Ft.
Local Shop Space: 18,500 Sq. Ft.
------
Total 157,441 Sq. Ft.
ANCHOR TENANTS: K Mart, Winn-Dixie, Harco Drugs
SHOP SPACE RENT: $8.00 - $11.75 per Sq. Ft.
EXP. CONTRIBUTIONS: Pro rata share of taxes, insurance & CAM
SHOP OCCUPANCY: 100%
VERIFIED WITH: Bill Helms, (334) 264-1102, 1/29/97
REMARKS: This center is located just south of the
central business district of Pell City in a
rapidly growing commercial area. This
location is approximately two miles south of
Interstate 20. The shop space rent range
reflects size and term tenant spaces and
leases.
H. J. Porter & Associates
|
INCOME APPROACH TO VALUE- (CONTINUED) 37
[GRAPHIC OMITTED]
[PHOTOGRAPH]
RENT COMPARABLE 5
NAME: The Village at Moody
LOCATION: Interstate 20 at U.S. Highway 411
Moody, Alabama
YEAR BUILT: 1994
SIZE: 60,800 Sq. Ft.
ANCHOR TENANTS: Winn-Dixi 44,000 Sq. Ft.
Local Shop Space: 16,400 Sq. Ft.
SHOP SPACE RENT: $10.50- $11,50 per Sq.Ft.
EXP. CONTRIBUTIONS: Pro rata share of Cam, Tax and Insurance
SHOP OCCUPANCY: 93 %
VERIFIED WITH: Dick Schmalz, and rent roll
REMARKS: This property is located off I-20 in Moody,
Alabama, part of the Birmingham Metro Area.
H. J. Porter & Associates
|
INCOME APPROACH TO VALUE- (CONTINUED) 38
Rental rates for non-anchored shop space in the for three comparables in the
Anniston area ranged from $4.00 to $10.00 per square foot. The rates from the
newer centers in Pell City and Moody, which are most comparable to the subject,
ranged from $8.00 to $11.75 per square foot. Based on these comparables, the
subject's current rents appear to be competitive and market oriented. Based on
Comparables 4 and 5, as well as the subject's current leases, the market rent
for the subject's vacant shop is estimated at $11.00 per square foot.
As with most modem neighborhood shopping centers, shop space tenants pay their
pro rata share of taxes, insurance, and common area maintenance. In addition to
these expense contribution, most of the subject's local tenants pay 15% of CAM
expense for administration, and several contribute $.05 per square foot for
structural reserves, and one pays 5% of base rent for management fee.
The contract rents for Winn Dixie and Revco Drugs, like most signature stores,
are a function of the development cost and negotiations between developer and
tenant. The Winn Dixie rent at $7.70 per square foot, and Revco Drugs at $7.75
per square foot are within the range of similar food and drug tenant rental
rates as illustrated in the following table.
================================================================================
Tenant Location Year Size-Sq. Ft. Rent/Sq. Ft.
================================================================================
Winn Dixie Alabaster, AL 1993 44,000 $6.50
Winn Dixie Panama City, FL 1993 44,000 $7.15
Winn Dixie Moody, AL 1993 44,000 $7.00
Winn Dixie Chalkville, AL 1994 51,250 $6.50
Winn Dixie Alexander City, AL 1994 44,000 $6.75
Winn Dixie Chattanooga, TN 1994 44,000 $7.05
Winn Dixie Anniston, AL 1995 44,000 $7.70
Winn Dixie Birmingham, AL 1995 44,000 $6.95
Winn Dixie Mobile, AL 1996 51,282 $8.00
Winn Dixie Dalton, GA 1996 44,000 $9.26
Winn Dixie Trussville, AL 1996 44,000 $8.15
Winn Dixie Mobile, AL 1997 44,000 $9.00
Winn Dixie Mobile, AL 1997 44,000 $8.85
Winn Dixie Fairhope, AL 1997 51,282 $9.25
================================================================================
================================================================================
Drugs for Less Birmingham, AL 1993 18,000 $7.50
Harco Drugs Birmingham, AL 1993 12,876 $5.95
Harco Drugs Pell City, AL 1993 9,100 $7.50
Harco Drugs Alabaster, AL 1993 9,100 $8.50
Big B Drugs Chattanooga, TN 1994 8,470 $7.00
Harco Drugs Tuscaloosa, AL 1994 10,160 $7.90
Revco Anniston, AL 1995 9,240 $7.75
Drugs for Less Birmingham, AL 1995 18,000 $7.00
Revco Dalton, GA 1996 8,450 $9.75
Harco Drugs Mobile, AL 1997 10,125 $8.25
================================================================================
|
H. J. Porter & Associates
INCOME APPROACH TO VALUE- (CONTINUED) 39
Revco Drugs will pay their pro rata share of taxes, insurance, and common area
maintenance. Winn Dixie has their own identified parcel and directly pay all
taxes, insurance, and building and grounds maintenance. Due to the nature of the
Winn Dixie lease terms, which is nonterminable, their lease is considered a
"Bond Lease."
The Winn Dixie and Revco Drugs leases call for percentage rents. It is unlikely
that these tenants will reach a level of sales requiring percentage rent until
they have become well established in this market. As such, no income from
percentage rent is estimated.
The Potential Gross Income is the sum of the subject's contract rents plus
expense reimbursements for the pro rata share of taxes, insurance, and common
area maintenance, including administrative fee for some tenants as well as
structural reserves and management fee for the following tenants. Expenses for
these items are estimated in the Expense Analysis on the following pages. The
following table shows the calculations of CAM Administrative Fee, Structural
Reserves, and Management Fee for local shop tenants according to their leases.
OTHER EXPENSE REIMBURSEMENTS
CAM Admin Amount St. Rev. Amount Management Amount
Concord Cleaners 15% $81 $0.05 $60 0% $0
Head Start 0% $0 $0.05 $60 5% $630
Linda Strickland 15% $65 $0.00 $0 0% $0
================================================================================
Category Totals $416 $120 $630
================================================================================
Grand Total $896
================================================================================
|
The Potential Gross Income is calculated in the following table.
H. J. Porter & Associates
INCOME APPROACH TO VALUE - (CONTINUED) 40
VALUATION - INCOME APPROACH
POTENTIAL GROSS INCOME
Anchor Tenants
Winn Dixie 44,000 sq.ft.@ $7.70 = $338,800
Revco 9,240 sq.ft.@ $7.75 = $71,610
------ --------
Subtotal 53,240 sq.ft. $410,410
No-Anchor Tenants
Premier Video 4,800 sq.ft.@ $9.50 = $45,600
Concord Cleaners 1,200 sq.ft.@ $11.50 = $13,800
Head Start 1,200 sq.ft.@ $10.50 = $12,600
Linda Strickland 960 sq.ft.@ $11.00 = $10,560
Vacant 1,440 sq.ft.@ $11.00 = $15,840
------ --------
Subtotal 9,600 sq.ft. $98,400
Total Rental Income 62,840 sq.ft. $508,810
Expense Contributions
Revco 9,240 sq.ft.@ $0.93 = $8,593
No-Anchor Tenants
CAM Admin., St. $896
Res., Mgt.
CAM, Tax, Ins. 9,600 sq.ft.@ $0.93 = $8,928
------ --------
18,840 $18,417
-------
POTENTIAL GROSS INCOME $527,227
================================================================================
|
EFFECTIVE GROSS INCOME
Stabilized vacancy and collection loss is subtracted from Potential Gross Income
to estimate the Effective Gross Income. Winn Dixie and Revco Drugs have extended
lease terms and are considered credit anchor tenants. As such, no vacancy and
credit loss is calculated on their income. Local shop space in the five
comparable shopping centers ranged from 80% to 100% with the two most comparable
being in the upper end of the range. There is good demand for local shop space
in food and drug anchored shopping centers through out the Anniston metro area.
Vacancy and collection loss for the subject's non-anchored shop space is
estimated to be 5% of rent and expense reimbursements, and calculated as:
$527,227 Potential Gross Income
$5,411 Vacancy and Collection Loss
$521,816 Effective Gross Income
H. J. Porter & Associates
|
INCOME APPROACH TO VALUE - (CONTINUED) 41
OPERATING EXPENSES
After estimating Effective Gross Income, all applicable expenses are deducted to
arrive at Net Operating Income. Bring new, the subject has no operating history
to examine. To estimate the appropriate expense levels, statements from similar
shopping centers are analyzed. The expense comparables are presented below and
on the following pages.
Comparable #1
-------------
Project Name: Delchamps Plaza North
Location: McFarland & Watermelon Road
Tuscaloosa, AL
Year Built: 1986 GLA: 59,389 SF
Source: Year End
Statement
Type Center: Neighborhood
Analysis Year: 1995 Analysis By: DPM
Item Total $/SF %PGR
-------- -------- ------ -----
Potential Gross Rent: $459,768 $7.74 100.0%
Less Vac/Credit Loss: $-603 $-0.01 -0.1%
-------- ------ -----
Effective Gross Rent: $459,165 $7.73 99.9%
+ $41,120 $0.69 8.9%
CAM/Reimbursements:
+ Misc Income: $3,439 $0.06 0.7%
-------- ------ -----
Effec. Gross Income: $503,724 $8.48 100.0%
Item Total $/SF %EGI
-------- -------- ----- -----
Less Expenses:
Management: $30,762 $0.52 6.1%
Ad Valorem Tax: $33,939 $0.57 6.7%
Insurance: $4,915 $0.08 1.0%
Administration Expense: $1,391 $0.02 0.3%
CAM: $41,892 $0.71 8.3%
Miscellaneous: $8,765 $0.15 1.7%
-------- ----- -----
Total Expenses: $121,664 $2.05 24.2%
-------- ----- -----
Net Operating Income: $382,060 $6.43 75.8%
======== ===== =====
Comments: Utilities expense included in CAM. Miscellaneous expense is
non-pass through expense for budding repair.
H. J. Porter & Associates
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INCOME APPROACH TO VALUE - (CONTINUED) 42
Comparable # 2
Project Name: Delchamps Plaza South
Location: Skyland Blvd.
Tuscaloosa, AL
Year Built: 1986 GLA: 108,903 SF
Source: Year end operating statement
Type Center: Neighborhood Shopping Center
Analysis Year: 1996 Analysis By: LHH
Item Total $/SF %PGR
---- ----- ---- ----
Effective Gross Rent: $751,676 $6.90 %
+ CAM/Reimbursements: $61,400 $0.56 %
+ Misc Income: $300 $0.00 %
-------- ----- -----
Effec. Gross Income: $813,376 $7.47 100.0%
Item Total $/SF %EGI
---- ----- ---- ----
Less Expenses:
Management: $42,686 $0.39 5.2%
Ad Valorem Tax: $39,174 $0.36 4.8%
Insurance: $13,588 $0.12 1.7%
Administration Expense: $17,144 $0.16 2.1%
CAM: $25,322 $0.23 3.1%
Utilities: $6,564 $0.06 0.8%
Miscellaneous: $5,071 $0.05 0.6%
-------- ----- -----
Total Expenses: $149,549 $1.37 18.4%
-------- ----- -----
Net Operating Income: $663,827 $6.10 81.6%
======== ===== =====
Comments: Misc. Expense is travel and structural repair.
H. J. Porter & Associates
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INCOME APPROACH TO VALUE- (CONTINUED) 43
COMPARABLE # 3
Project Name: Stratford Square
Location: East Boulevard
Montgomery, AL
Year Built: 1987 GLA: 121,236 SF
Source: Year End Statement
Type Center: Community Shopping Center
Analysis Year: 1995 Analysis By: Philip Minor
Item Total $/SF %PGR
---- ----- ---- ----
Effective Gross Rent: $771,843 $6.37 %
+ CAM/Reimbursements: $118,804 $0.98 %
+Misc Income: $412 $0.00 %
-------- ----- -----
Effec. Gross Income: $891,079 $7.35 100.0%
Item Total $/SF %EGI
---- ----- ---- ----
Less Expenses:
Management: $43,173 $0.36 4.8%
Ad Valorem Tax: $47,541 $0.39 5.3%
Insurance: $12,987 $0.11 1.5%
Administration $13,769 $0.11 1.5%
Expense:
CAM: $53,488 $0.44 6.0%
Miscellaneous: $5,650 $0.05 0.6%
-------- ----- -----
Total Expenses: $176,608 $1.46 19.8%
-------- ----- -----
Net Operating Income: $714,471 $5.89 80.2%
======== ===== =====
Comments: Miscellaneous expense includes $3,762 for on-site management,and
$1,888 advertising and promotion
H. J. Porter & Associates
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INCOME APPROACH TO VALUE - (CONTINUED) 44
COMPARABLE # 4
Project Name: Corner Village
Location: Auburn, AL
Year Built: 1978 GLA: 62,510 SF
Source: Year End Statement
Type Center: Neighborhood Shopping Center
Analysis Year: 1995 Analysis By: Philip Minor
Item Total $/SF %PGI
---- ----- ---- ----
Effective Gross Rent: $260,657 $4.17 %
+ CAM/Reimbursements: $22,347 $0.36 %
+Misc Income: $83 $0.00 %
-------- ----- -----
Effec. Gross Income: $283,087 $4.53 100.0%
Item Total $/SF %PGI
---- ----- ---- ----
Less Expenses:
Management: $10,663 $0.17 3.8%
Ad Valorem Tax: $21,172 $0.34 7.5%
Insurance: $4,405 $0.07 1.6%
Administration Expense: $3,556 $0.06 1.3%
CAM: $25,305 $0.40 8.9%
Utilities: $332 $0.01 0.1%
Miscellaneous: $1,718 $0.03 0.6%
-------- ----- -----
Total Expenses: $67,151 $1.07 23.7%
-------- ----- -----
Net Operating Income: $215,936 $3.45 76.3%
======== ===== =====
Comments: Miscellaneous expense is building repair and maintenance.
H. J. Porter & Associates
|
INCOME APPROACH TO VALUE- (CONTINUED) 45
As indicated previously, the subject has no operating history. The owner's
proforma for 1997 indicate the following expenses:
Management $.31 PSF
Ad Valorem Tax .42 PSF
CAM .495 PSF
Insurance .085 PSF
Building Maintenance .10 PSF
Administration .003 PSF
|
Based on these expense comparables and the owner's pro forma, the pertinent
expense categories in appropriate amounts are estimated below. Because Winn
Dixie is responsible for paying all operating expenses associated with their
store, the following expense estimates reflect expenses for Revco Drugs and the
non-anchored tenants only.
Management Fee: The management fee of the comparables properties
ranged from 3.8% to 6.1%. As indicated previously,
the subject property is one of fifteen shopping
centers in a cross collateralized portfolio of
retail properties under single management.
Considering economies of scale, the subject's
management fee is estimated at the low end of the
range at 4% of effective rental income.
Ad Valorem tax: The subject's ad valorem tax, as previously
discussed, is estimated at $7,127 per year or $.38
per square foot.
Insurance: The subject property is covered under a blanket
insurance policy, and being new, has no
established premium. Based upon the expense
comparables the cost of insuring the subject's
improvements and the cost of liability insurance
is estimated to be $1,900 per year or $.10 per
square foot.
Common Area Maintenance: Common area maintenance and repair expense is
estimated at $8,500 per year or $.45 per square
foot which is based on the comparables which
ranged from $.23 to $.71 per square foot with an
average of $.45 per square foot.
Structural Maintenance: Structural maintenance is estimated to be $.10 per
square foot for a total annual amount of $1,800.
The comparables ranged from $.03 to $.15 per
square foot with an average of $.07 per square
foot. The owner's pro forma indicated $.10 per
square foot.
H. J. Porter & Associates
|
INCOME APPROACH TO VALUE - (CONTINUED) 46
Administrative: This expense is estimated to be $500 per year or
$.03 per square foot, and is based on the
comparables which ranged from $.02 to $.16 with
and average of $.09 per square foot. The subject's
estimated cost is at the low end of the range due
to reimbursement of CAM administrative fee.
|
Total operating expenses are estimated to be $26,431 per year or $1.40 per
square foot for the Revco Drugs and non-anchor tenant space.
Net Operating Income
The subject's net operating income is calculated by subtracting the Operating
Expenses from the Effective Gross Income and illustrated as:
$521,816 Effective Gross Income
$26,431 Operating Expenses
--------
$495,385 Net Operating Income
|
Overall Capitalization Rate
To estimate the subject's value via the Income Approach, the subject's
stabilized net operating income is capitalized with an overall capitalization
rate of 9.0%. The selected overall capitalization rate is based on several
methods of capitalization rate development with consideration given to the
non-terminable Winn-Dixie lease, and the cross collateralization of the subject
property with the other fourteen shopping centers in the securitized portfolio
of retail properties. The cap rate development methods, which are presented
following the Income Approach Summary on the following page, includes rates
extracted from comparable sales, recently published investor survey, and three
methods using mortgage and equity positions which include the Ellwood, Band of
Investment, and Debt Coverage Ratio Methods.
Rates extracted from the comparable sales, none of which had non-terminable
leases, ranged from 9.57% to 10.20% with an average of 9.79% and the most recent
sale being at 9.64%. Published rates from the Second Quarter 1997, Korpacz Real
Estate Investor Survey for National Strip Shopping Center, ranged from 8.25% to
13% with an average rate of 9.84% which is similar to the market extracted
rates. The mid range rates from the three mortgage/equity methods ranged from
8.90% to 9.14%. The rates developed with mortgage/equity factors reflect current
conditions and declining interest rates. The criteria used for these methods was
taken from the above investor survey and from interviews with mortgage brokers.
H. J. Porter & Associates
INCOME APPROACH TO VALUE - (CONTINUED) 47
The High, Middle, and Low average of the five methods of cap rate development
are 10.25%, 9.31%, and 8.71% respectively. Based on this analysis and the above
considerations, the subject's overall capitalization rate is estimated to fall
between the Middle and Low range of the five methods.
ESTIMATED VALUE BY INCOME APPROACH
The subject's stabilized net operating income of $495,385 is capitalized with an
overall capitalization rate of 9.0% for an estimated value of $5,504,278 which
is rounded to $5,500,000. A summary of the Income Approach to Value is presented
below.
================================================================================
POTENTIAL GROSS INCOME $527,227
Less Vacancy and Collection Loss
Non-Anchor Tenants 5% Rent + Exp. Cont. = $5,411
--------
EFFECTIVE GROSS INCOME $521,816
% of $ per
Less Expenses: E.G.I. S.F.
------ ----
Management: $6,604 4.0% $0.35
Ad.Val.Tax $7,127 1.4% $0.38
Insurance $1,900 0.4% $0.10
CAM $8,500 1.6% $0.45
St. Maint. $1,800 0.3% $0.10
Misc. Admin. $500 0.1% $0.03
--- -----
Total Expenses 5.1% $1.40 $26,431
--------
NET OPERATING INCOME $495,385
Capitalized at 9.0% $5,504,278
TOTAL INDICATED VALUE - At Completion (Rounded) $5,500,000
================================================================================
|
H. J. Porter & Associates
INCOME APPROACH TO VALUE - (CONTINUED) 48
=====================================================================================================
Property Capitalization
Rate Justification
=====================================================================================================
PROPERTY: Greenbrier Station Shopping Center
ADDRESS: Anniston, Alabama
DATE: August 7, 1997
High Middle Low
---- ------ ---
----------------------------
1. Market extracted rates for 10.20% 9.79% 9.57%
----------------------------
similar local properties
----------------------------
2. Recent published cap rates 13.00% 9.84% 8.25%
----------------------------
used by institutional investors
3. Ellwood method calculated rates
11.55% = Eqty yield before tax (Korpacz)
----------------------------
% Property appreciation (income) over hold period = -5.00% 0.00% 5.00%
----------------------------
75% = Mortgage percent of value
7.75% = Mortgage interest rate
20.0 = Mortgage term in years
10.0 = Investment holding period
9.85% = Rm = Mortgage constant
14.4% = Rmp = Mortgage constant over holding period
31.6% = P = Percent of mortgage paid off over hold
5.8% = SFF = Sink fund factor
37.2% = J factor
----------------------------
Calculated cap rate = 9.36% 8.90% 8.45%
----------------------------
4. Band of Investment Method
Mortgage percent to value 70.000% 75.00% 80.00%
Mortgage constant 10.35% 9.85% 9.35%
Equity percent to value 30.00% 25.00% 20.00%
Eqty cash on cash rate 8.00% 7.00% 6.00%
----------------------------
Calculated cap rate 9.65% 9.14% 8.68%
----------------------------
5. Debt Coverage Ratio Method
Req'd debt coverage ratio 1.25 1.20 1.15
Mortgage percent to value 70.00% 75.00% 80.00%
Mortgage constant 10.35% 9.85% 9.35%
----------------------------
Calculated cap rate 9.06% 8.87% 8.60%
----------------------------
=====================================================================================================
|
H. J. Porter & Associates
INCOME APPROACH TO VALUE - (CONTINUED) 49
Explanatory Notes
Capitalization Rate Evidence
The accompanying chart illustrates 5 different sets of data or evidence as to
appropriate current property capitalization rates.
Item # 1 Reflects the current range in capitalization rates
in the local market based on actual sales - this information
is historical in nature although there has been a fairly
consistent pattern evident in this market over the years.
Item # 2 Reflects actual cap rates used by large financial
institutions in the acquisition and financing of major real
estate projects. These rates are also historical in nature,
but are based on properties of a magnitude atypical in this
market area. Properties that would appeal to at least a
regional and perhaps a national market of potential buyers.
Item # 3 Reflects a calculated cap rate utilizing the
Ellwood model based on future expectations in income and
property value growth and equity yield rates - explicit
input assumptions are listed. This method is compelling when
market mortgage and equity yield returns are predictable and
property and income changes can be reliably predicted.
Item # 4 Analyzes required capital outlays to service both
the debt (ie mortgage payment) and the equity (cash on cash
or before tax cash flow or equity dividend). The weighted
average of these required returns is, by definition, equal
to the capitalization rate. It should be noted that the
mortgage interest rate and equity yield rate are NOT part of
this calculation.
Item #5 Provides another method often used by lenders. The
debt coverage ratio is a factor equal to the net operating
income divided by the annual debt service - in other words,
it is an estimate of the "cushion" or excess of net
operating income over and above debt service. The calculated
cap can be solved for by the following formula R(o) = R(m) X
DCR X M.
The actual cap rate used by appraisers in this analysis is bracketed by this
information. Further, this chart illustrates the implicit market expectations of
the various investment parameters that are reflected by the specific
capitalization rate used.
H. J. Porter & Associates
[GRAPHICS OMITTED]
[MAP OF THE STATES OF TENNESSEE, MISSISSIPPI AND ALABAMA]
Improved Sales Map
50
MARKET APPROACH
To estimate the subject property's value by market comparison, a direct
comparison is made with actual sales of other neighborhood shopping center
properties. These sales are analyzed on the basis of price per square foot of
gross building area (GBA) and their effective gross income multiplier (EGIM).
While the subject property is part of a large portfolio of retail properties
which would most likely be marketed as a total package, no sales of similar
portfolio of properties were found with which to compare. The market for retail
properties is national, and purchases are made on the strength and reliability
of the income stream. Similar shopping center sales were located in Birmingham,
Moody, Madison, and Mobile Alabama and Chattanooga, Tennessee.
Each sale is adjusted to the subject for pertinent items, including unusual
financing or conditions of sale, time lapsed since sale, and physical
differences such as age, condition, and construction quality and location as
reflected in the net operating income.
The sales considered are detailed on the following pages with a comparison and
adjustment following the presentation of the sales data.
H. J. Porter & Associates
MARKET APPROACH - (CONTINUED) 51
[GRAPHICS OMITTED]
[PHOTOGRAPH]
Sale #1
Address/Location: Village At Moody
US Highway 411
Moody, AL
Grantor: FS Partnership, Ltd.
Grantee: Birmingham Realty
Sale Date: 02/14/1996
Sale Price: $4,485,000
Cash Equiv Price: $4,485,000
Equity: $1,485,000
Debt: $3,000,000
Terms: $1,485,000 cash plus assumption of $3,000,000
mortgage at market rates and terms.
Recorded: Book 261, Page 313; St. Clair County
Verified With: Paul Spina, Grantor (205) 733-1131
Verified By: David Mullins, H.J. Porter & Associates
Date Verified: 04/10/1996
Rights Conveyed: Leased Fee
Land Size: 8.43 Acres
Access/Visibility: Average/Average
Highest & Best Use: Neighborhood Shopping Center
Parking: 396 Parking Ratio: 6.51
Building Size: 60,800 SF(NRA)
|
H. J. Porter & Associates
MARKET APPROACH - (CONTINUED) 52
Sale #1 (Continued
Land: Bldg Ratio: 6.0
Year Built 1995
Condition Good
Building
Description: In-line, one story masonry construction with brick
exterior on front and sides, and CCB on rear. Flat
built-up roof system.
Anchors: Winn Dixie - 44,000 SF
Anchor - Sq. Ft.: 44,000 Anchor %: 72.37
Local: J&E Ent., Head Start, Movie Gallery, Open Book,
Vulcan Rehab, Moody Ceaners, Vill, Beverage, Merle
Norman, Nail Shop
Local - Sq. Ft.: 16,800 Local %: 27.63
Lease Information: Winn Dixie - $7.00 PSF, Local tenant rent range
$10.50 to $11.50 PSF with average of $10.67 PSF.
All tenants pay pro-rata share of CAM, tax, and
insurance.
|
ANALYSIS
(1|2|3) (*)Source TOTAL $ AMOUNT $ PER $F (NRA)
(A\E\F) Potential Gross Income: $533,922 $8.78
(A\E\F) Vac & Credit Loss: $ 9,920 $0.16
-------- -----
(A\E\F) Effec. Gross Income: $524,002 $8.62
(A\E\F) Less Expenses: $ 87,532 $1.44
-------- -----
(A\E\F) Net Oper. Income $436,470 $7.18
========================================================================
(*) Field 1: S = Seller B = Buyer A = Appraiser
Field 2: A = Actual E = Estimated
Field 3: P = Prior Year F = Year Following
========================================================================
INDICATORS OF VALUE: Price Per SF (NRA): $73.77
PGIM: 8.40
EGIM: 8.56
R(o): 9.73%
Expense Ratio: 16.70%
|
Remarks: At time of sale this center was less than one year old and did not
have a complete year of operating history. PGI includes contract rent
plus estimated expense contributions. Market vacancy estimated at 5%
of local tenant rent and expense contributions. Expenses include 4%
management fee, taxes at $.58 PSF, insurance at $.10 PSF, CAM at $.40
PSF, and St. Maintenance at $.05 PSF. This center is located at the
northeast corner of I-20 and US Highway 411 in Moody, Alabama. This
area is a rapidly growing commercial district in the
Birmingham/Atlanta interstate corridor.
H. J. Porter & Associates
MARKET APPROACH - (CONTINUED) 53
[GRAGHIC OMITTED]
[PHOTOGRAPH]
Sale #2
Address/Location: Plaza Center
Hughes Road at Old Madison Pike
Madison, Alabama
Grantor: Plaza, Ltd.
Grantee: Amberjack Ltd.
Sale Date: 12/21/1994
Sale Price: $5,850,000
Cash Equiv Price: $5,850,000
Terms: Cash to Seller
Recorded: Deed Book 846, Page 1097; Madison County
Verified With: Tommy Tillman, Broker (205) 822-7116
Verified By: David Mullins, H.J Porter & Associates
Date Verified: 01/11/1995
Rights Conveyed: Leased Fee
Land Size: 9.08 Acres
Access/Visibility: Good/Good
Highest & Best Use: Shopping Center
Building Size: 79,400 SF(NRA)
Land:Bldg Ratio: 5.0
Year Built: 1994
Condition: Good
|
H. J. Porter & Associates
MARKET APPROACH - (CONTINUED) 54
Sale #2 (Continued)
Building
Description: One Story masonry construction with brick veneer
and dryvit front. Built up flat roof.
Anchors: Kroger
Anchor - Sq. Ft.: 62,800 Anchor %: 79.09
Local: Sporting Edge, Cleaners, Papa John's Pizza,
Heavenly Hair, Baskin-Robbins, cornerstone, Movie
Gallery, Hallmark
Local - Sq. Ft.: 16,600 Local %: 20.91
Lease Information: All tenants pay a pro-rata share of CAM, Taxes,
and Insurance.
ANALYSIS
(1/2/3) *Source TOTAL $ AMOUNT $ PER SF (NRA)
-------------- --------------
(S/A/P) Potential Gross Income: $689,320 $8.68
(S/A/P) Vac & Credit Loss: $17,750 $0.22
-------- -----
(S/A/P) Effec. Gross Income: $671,570 $8.46
(S/A/P) Less Expenses: $111,457 $1.40
-------- -----
(S/A/P) Net Oper. Income $560,113 $7.05
================================================================================
* Field 1: S = Seller B = Buyer A = Appraiser
Field 2: A = Actual E = Estimated
Field 3: P = Prior Year F = Year Following
================================================================================
INDICATORS OF VALUE: Price Per SF (NRA): $73.68
PGIM: 8.49
EGIM: 8.71
R(0): 9.57%
Expense Ratio: 16.60
H. J. Porter & Associates
|
MARKET APPROACH - (CONTINUED) 55
[GRAGHIC OMITTED]
[PHOTOGRAPH]
Sale#3
Address/Location: North Hixson Marketplace
Hixson Pike and Camp Columbus Road
Chattanooga, TN
Grantor: North Hixson, L.L.C.
Grantee: Amberjack Ltd.
Sale Date: 03/04/1996
Sale Price: $4,760,000
Cash Equiv Price: $4,760,000
Terms: Cash to seller
Recorded: Hamilton County
Verified With: Dick Schmalz, with Grantor (205) 871-2617
Verified By: David Mullins, H.J Porter & Associates
Date Verified: 03/15/1996
Rights Conveyed: Leased Fee
Land Size: 9.24 Acres
Access/Visibility: Average/Average
Highest & Best Use: Neighborhood Shopping Center
Parking: 405 Parking Ratio: 5.88
Building Size: 63,270 SF(NRA)
Land:Bldg Ratio: 6.4
Year Built: 1995
Condition: Good
|
H. J. Porter & Associates
MARKET APPROACH - (CONTINUED) 56
Sale #3 (Continued)
Building
Description: One story neighborhood shopping center with split
face block exterior walks and synthetic stucco on
steel stud canopy.
Anchors: Winn Dixie (49,600 sf GBA & 44,000 sf NRA); Big B
Drugs 8,470 sf
Anchor - Sq. Ft.: 52,470 Anchor %: 82.93
Local: Movie Gallery, Sally's Beauty and other local
tenants
Local - Sq. Ft.: 10,800 Local %: 17.07
Lease Information: Anchor and Local: CAM, Taxes and Insurance
ANALYSIS
(1\2\3) (*)Source TOTAL $ AMOUNT $ PER $F (NRA)
-------------- --------------
(S\A\F) Potential Gross Income: $62,083 $9.85
(A\E\F) Vac & Credit Loss: $13,057 $0.21
-------- -----
(A\E\F) Effec. Gross Income: $610,026 $9.64
(A\E\F) Less Expenses: $124,533 $1.97
-------- -----
(A\E\F) Net Oper. Income $485,493 $7.67
========================================================================
(*) Field 1: S = Seller B = Buyer A = Appraiser
Field 2: A = Actual E = Estimated
Field 3: P = Prior Year F = Year Following
========================================================================
INDICATORS OF VALUE: Price Per SF (NRA): $75.23
PGIM: 7.64
EGIM: 7.80
R(o): 10.2%
Expense Ratio: 20.41%
|
Remarks: At time of sale, there were two vacant local shops containing 2,400
sq.ft. Expense contribution included in PGI and local vacancy. Vacancy
based on 10% of local shop income plus expense contributions. Expenses
based on 4% management, excluding expense contributions, $1.59 for
taxes, CAM and insurance plus $.05 for structural reserves. The
estimated expenses were consistent with Grantor's proforma. Average
local shop space rent for leased space was $10.45/sf.
H. J. Porter & Associates
MARKET APPROACH- (CONTINUED) 57
[GRAPHICS OMITTED]
[PHOTOGRAPH]
Sale #4
Address/Location: Hillcrest Marketplace
Hillcrest Road @ Grelot Road
Mobile, Alabama
Grantor: Hillcrest Marketplace, Ltd.
Grantee: 80% Shades Creek Partners, 20% Fairway
Investments, LLC
Sale Date: 06/19/1997
Sale Price: $6490000
Cash Equiv Price: $6,490,000
Equity: $1,590,000
Debt: $4,900,000 Year 1 Debt Service: $480,911
Terms: $1,590,000 cash and assumption of 20 year
mortgage at 8.375%.
Recorded: Deed Book 4479, Page 54; Mobile County
Verified With: Scott Holcombe, Arlington Properties-Developer
(205) 328-9600
Verified By: Harris Hollans, H.J. Porter & Associates
Date Verified: 04/02/1997
Rights Conveyed: Leased Fee Interest
Land Size: 12.49 Acres
Access/Visibility: Good/Good
Highest & Best Use: Neighborhood Shopping Center
Parking: 359 Parking Ratio: 4.63
Building Size: 76,365 SF(GBA)
Land:Bldg Ratio: 7.1
H. J. Porter & Associates
|
MARKET APPROACH - (CONTINUED) 58
Sale #4 (Continued)
Year Built: 1997
Condition: New
Building
Description: Red brick veneer front over concrete block wall.
Reinforced concrete slab. Single ply membrane
roof. Raised seam metal and canvas awning.
Anchors: Winn Dixie (51,282 sq.ft.), Revco (9,240 sq. ft.)
Anchor- Sq. Ft.: 60,522 Anchor %: 79.25
Local: Various regional, national, & local
Local- Sq. Ft.: 15,843 Local %: 20.75
Lease Information: Winn Dixie rent is $8.00 PSF & Revco rent is $8.00
PSF. At sale time, no local space was leased.
Local rent pro-forma was $11.50 PSF. Expense
contribution pro-forma was $1.50 PSF. Since
closing, 6 shops have been leased at $12.50 PSF.
$12.50 PSF.
|
ANALYSIS
(1\2\3) *Source TOTAL $ AMOUNT $ PER SF (GBA)
(S\E\F) Potential Gross Income: $780,918 $10.23
(S\E\F) Vac & Credit Loss: $15,447 $0.20
-------- ------
(S\E\F) Effec. Gross Income: $756,471 $10.02
(S\E\F) Less Expenses: $140,020 $1.83
-------- ------
(S\E\F) Net Oper. Income $625,451 $8.19
(S\E\F) Debt Service (Yr 1): $480,911 $6.30
-------- ------
(S\E\F) Cash Flow: $144,540 $1.89
========================================================================
* Field 1: S = Seller B = Buyer A = Appraiser
Field 2: A = Actual E = Estimated
Field 3: P = Prior Year F = Year Following
========================================================================
INDICATORS OF VALUE: Price Per SF (GBA): $84.99
PGIM: 8.31
EGIM: 8.48
Ro: 9.64%
Re: 9.09%
Expense Ratio: 18.29%
|
Remarks: The total Gross Building Area of the shopping center was 77,557 SF.
The sale was negotiated and closed prior to completion with equitable
remedy for completion delays after July 15, 1997. The Grantor
guaranteed the above EGI for a period of 2 years, thereby assuming the
risk of leasing up the remaining vacant shop space. The Grantor will
pay Grantee the difference between rents received, including exp.
contributions, and the above EGI. If gross income equals or exceeds
the above EGI for 6 months, guarantee is terminated. There are 5 out
parcels lots at this center which were not included in the sales. Lots
have been sold to Wendy's, New York Bagel, and Boston Market.
H. J. Porter & Associates
MARKET APPROACH - (CONTINUED) 59
The sales detailed above are compared adjusted to the subject for pertinent
items of difference as:
==============================================================================================================
MARKET SALES COMPARISON GRID
==============================================================================================================
Comp. Number #1 #2 #3 #4
Grantor FS Partnership Plaza, Ltd. North Hixson Hillcrest
Marketplace
Grantee SUBJECT Birmingham Amberjack, Ltd. Amberjack Confidential
Realty
Location Golden Springs US Hwy 411 Hughes Rd Hixson Pike Hillcrest Road
Rd
Anniston, AL Moody, AL Madison, AL Chattanooga, Mobile, AL
TN
--------------------------------------------------------------------------------------------------------------
Cash Eq. Sale Price $4,485,000 $5,850,000 $4,760,000 $6,490,000
Date of Sale 08/04/97 02/14/96 12/21/94 03/04/96 09/15/97
Building Area S.F. 62,840 60,800 79,400 63,270 76,365
Unadjust. Price/SF $73.77 $73.68 $75.23 $84.99
Eff. Gross Income $521,816 $524,002 $671,570 $610,026 $765,471
EGIM 8.56 8.71 7.80 8.48
Net Oper. Income $495,385 $436,470 $560,113 $485,493 $625,451
Per SF $7.88 $7.18 $7.05 $7.67 $8.19
--------------------------------------------------------------------------------------------------------------
ADJUSTMENTS #1 #2 #3 #4
Conditions of Sale Normal Normal Normal Normal
Adjustment 0% 0% 0% 0%
Market Conditions/Time 7.40% 13.15% 7.14% .67%
at 5.00% /year
==============================================================================================================
Preliminary Adj. Price $4,816,890 $6,619,275 $5,099,864 $6,533,483
Preliminary Adj.Price/Sq. Ft. $79.23 $83.37 $80.60 $85.56
==============================================================================================================
PHYSICAL DIFFERENCES #1 #2 #3 #4
Net Operating Income 9.75% 11.75% 2.74% -3.79%
--------------------------------------------------------------------------------------------------------------
Subtotal-Physical 9.75% 11.77% 2.74% -3.79%
==============================================================================================================
Final Adjusted Price $5,286,537 $7,398,364 $5,239,600 $6,285,864
Final Adj.Price/Sq.Ft. $86.95 $93.18 $82.81 $82.31
==============================================================================================================
|
The sales were adjusted to the subject for the following items:
CONDITION OF SALE: No adjustment indicated.
H. J. Porter & Associates
MARKET APPROACH - (CONTINUED) 60
Time: Considers an increase of 5% per year based on
analysis of the overall capitalization rates of
the comparable sales and range of rates from the
five methods considered in the Income Approach.
Net Operating Income: The comparable sales were adjusted to the subject
based on the difference in net operating income.
The physical and economic characteristics such as
condition, age, vacancy, size, and location are
reflected in a property's net operating income. As
indicated in the following table, there is a
direct relationship between the sale price per
square foot and net operating income per square
foot.
==================================
SP/SF NOI/SF
----------------------------------
$73.77 $7.18
$73.68 $7.05
$75.23 $7.67
$84.99 $8.19
==================================
|
The adjustment for NOI is based on the following
formula: the comparable sales NOI per square foot
is subtracted from the subject's estimated NOI per
square foot and the difference is divided by the
subject's NOI per square foot.
The comparable sales present an adjusted range of value from $82.31 to $93.18
per square foot. The arithmetic mean price is $86.31 per sq.ft. with a standard
devotion of $4.35 per sq.ft. Sale 5 is the most recent, and Sales 1 and 3 are
most similar in size and location. Based on this analysis, with consideration
given to the non-terminability of the Winn Dixie lease and the subject's cross
collateralization, the subject's value is estimated at $86.00 per square foot
for a total value by direct sales comparison as:
62,840 Sq. Ft. GBA @ $86.00 = $5,404,240
Rounded $5,400,000
H. J. Porter & Associates
|
MARKET APPROACH - (CONTINUED) 61
The Effective Gross Rent Multipliers (EGIM) derived from the above sales are
highlighted as:
SALE # EGIM
------ ----
1 8.56
2 8.71
3 7.80
4 8.48
|
The Effective Gross Income Multipliers of the five comparable sales range from
7.8 to 8.71 with a mean EGIM of 8.47. Based on these sales, with consideration
given to declining interest rates, the subject's EGIM is estimated at the high
end of the range. The subject is valued by EGIM as:
$521,816 EGIM x 8.7 = $4,539,799
Rounded $4,540,000
The two market indicators of value are correlated with greater wright given m
adjusted sale price per square foot for a value by market of $5,200,000. The
indicated value by EGIM is skewed because the multipliers do not reflect
declining caps rams.
H. J. Porter & Associates
RECONCILIATION AND FINAL VALUE ESTIMATE 62
Cost Approach ...................................................... $5,190,000
This approach is felt to be reliable, being based on a respected national cost
service's figures as well as actual cost of other centers. The land value is
based on recent commercial land sales from the subject's market area and is felt
to be well supported. This approach is given secondary consideration to the
Income Approach.
Income Approach .................................................... $5,500,000
This approach is felt to be most indicative of the subject's value. It best
reflects current and projected market conditions as they relate to the subject
and mirrors the actions of investors in today's market. Overall, this approach
is afforded greatest consideration.
Market Approach .................................................... $5,200,000
This approach is based on recent sale of other neighborhood shopping centers and
is reliant upon the direct sales comparison on a price per square foot basis.
The estimated value by EGIM is somewhat skewed because the Effective Gross
Income Multipliers of the comparable sales do not reflect the downward trend in
overall capitalization rates. This approach is afforded less consideration than
the Income Approach.
Based on the value indications summarized above, I am of the opinion that the
subject's leased fee interest has a market value, as of August 7, 1997, of:
FIVE MILLION FIVE HUNDRED THOUSAND DOLLARS
($5,500,000)
Divided As: Improvements $4,910,000
Land $590,000
----------
Total $5,500,000
H. J. Porter & Associates
|
63
CERTIFICATION
I certify that, to the best of our knowledge and belief,...
1. The statements of fact contained in this report are true and correct.
2. The reported analyses, opinions, and conclusions are limited only by the
reported assumptions and limiting conditions, and are my personal, unbiased
professional analyses, opinions and conclusions.
3. I have no present or prospective interest in the property that is the
subject of this report, and I have no personal interest or bias with
respect to the parties involved.
4. My compensation is not contingent on an action or event resulting from the
analyses, opinions, or conclusions in, or the use of, this report. My
compensation is not contingent upon the reporting of a predetermined value
or direction in value that favors the cause of the client, the amount of
the value estimate, the attainment of stipulated result, or the occurrence
of a subsequent event.
5. My analyses, opinions, and conclusions were developed, and this report has
been prepared, in conformity with the requirements of the Code of
Professional Ethics and the Standards of Professional Practice of the
Appraisal Institute, and the Uniform Standards of Professional Appraisal
Practice as promulgated by the Appraisal Standards Board of the Appraisal
Foundation.
6. The use of this report is subject to the requirements of the Appraisal
Institute and the Alabama Real Estate Appraisers Board relating to review
by its duly authorized representatives.
7. This assignment was made subject to regulations of the State of Alabama
Real Estate Appraisers Board. The undersigned State Certified General Real
Property Appraiser has met the requirements of the board that allow this
report to be regarded as a "certified appraisal."
8. I am currently certified under the continuing education program of the
Appraisal Institute.
9. I have made a personal inspection of the property that is the subject of
this report.
10. No one provided significant professional assistance to the person signing
this report.
H. J. Porter & Associates
CERTIFICATION - (CONTINUED)
11. This appraisal assignment was not based on a requested minimum valuation, a
specific valuation, or the approval of a loan.
12. Base upon the foregoing investigation and analysis of the subject property
and its economic environment, I am of the opinion that, the subject
property has a value as of August 7, 1997, of:
FIVE MILLION FIVE HUNDRED THOUSAND DOLLARS
($5,500,000)
/s/ DAVID P. MULLINS 9/15/97
---------------------- ---------
DAVID P. MULLINS, MAI DATE
Certified General Real Property Appraiser
Alabama Certificate No. G8
H. J. Porter & Associates
|
ADDENDUM
EXHIBITS
Location Map ............................................. Facing Page 3
Survey ................................................... Facing Page 4
State Map ................................................ Facing Page 7
Site Plan ................................................ Facing Page 16
Subject Photographs ...................................... Facing Page 17
Land Sales Map ........................................... Facing Page 23
Rental Location Map ...................................... Facing Page 32
Improved Sales Map ....................................... Facing Page 50
REAR EXHIBITS
Engagement Letter
Lease Synopses
Assumptions and Limited Conditions
Appraiser's Qualifications
Appraiser's Certificate
H. J. Porter & Associates
|
[H.J. PORTER ASSOCIATES - LETTERHEAD]
July 31, 1997
Mr. Anthony Rokovich
Merrill Lynch
World Financial Center - North Tower
New York, NY 10281
Re: Agreement for Appraisal Services
Dear Mr. Rokovich:
Please allow this to serve as our proposal and agreement for appraisal services
on the properties described below.
Property To Be Appraised
The real estate to be appraised is briefly described as:
59 West Shopping Center 29 North Shopping Center
700 Academy Drive 1550 South U.S. Highway 29
Bessemer, AL Cantonment, FL
Clanton Marketplace Nine Mile Plaza Shopping Center
Highway 31 & Ollie Avenue 312 East Nine Mile Road
Clanton, AL Pensacola, FL
Betts Crossing Shopping Center Parker Shopping Center
1441 Fox Run Parkway 208 South Tyndal Parkway
Opelika, AL Parker, FL
Opp Marketplace The "T" Shopping Center
507 E. Cummings Road 17184 Front Beach Road
Opp, AL Panama City Beach, FL
Greenbrier Station Shopping Center Mandeville Marketplace
1408 Golden Springs Road 619 N. Causeway Blvd.
Anniston, AL Mandeville,
Russell Crossing Shopping Center
U.S. Highway 280 and Stadium Drive
Phenix City, AL
|
123 N. College St., Ste. 100 o P.O. Box 28 o Auburn, Alabama 36830 o
(334)826-8682 o Fax (334)826-3827
14 Office Park Circle, Suite 230 o Birmingham, Alabama 35223 o (205)871-3600 o
Fax (205)879-3762
418 Scott Street o Montgomery, Alabama 36104 o (334)262-8331 o Fax (334)262-8325
Real Estate Research, Appraisal & Counseling
Mr. Rokovich
July 31, 1997
page 2
Purpose Of The Appraisal
These appraisals will be made to determine the market value of the leased fee
interest of the abject real estate. The term "market value" is as defined in the
Uniform Standards of Professional Appraisal Practice as promulgated by the
Appraisal Standards Board of the Appraisal Foundation.
Function Of The Appraisal
It is understood that these appraisals have been requested to functions as an
underwriting guide for mortgage loan purpose and for use in the securitization
of the mortgage. Accordingly, these appraisals may be provided by Merrill Lynch
to potential investors in a securitization or other sale of the Mortgage
Loan(s).
Scope Of The Appraisal
The scope of this assignment shall include, but not be limited to:
1) Personal contact with the owner or his representative to arrange an on-site
inspection.
2) On-site inspection of the site and improvements.
3) Review of public records pertaining to the subject.
4) Research into public records and interviews with Realtors(R), management
agents, owners, developers, and other appraisers as deemed pertinent, to
locate comparable data.
5) Analysis of comparable data and completion of the Cost, Market, and Income
Approaches to value as may be deemed applicable.
Report and Delivery
The appraisals will be complete analyses communicated in self-contained
narrative reports with all supporting information and exhibits included.
The appraisals will be made in conformance with the Standards of Professional
Practice mad Code of Ethics of the Appraisal Institute. As such, the reports
shall be subject to their review. The appraisals shall also conform to the
Uniform Standards of Professional Appraisal Practice as set by the Appraisal
Standards Board of the Appraisal Foundation.
The date of appraisals shall be made effective as of the dates of inspection.
The reports will be addressed to Mr. Anthony-Rokovich, Merrill Lynch:
Additionally, the properties will be valued as of the estimated dates of
completion of improvements and as of the estimated date of stabilized occupancy,
as may be applicable.
Three ( 3 ) copies of the completed reports will be delivered within four weeks
of receipt of your authorization to proceed and the required information noted
below.
Fee
Our fee for this assignment shall be Forty Six Thousand Dollars ($46,000.00) due
and payable on delivery of the completed reports. Any amount past due over
sixty (60) days shall be subject to a late charge of 1-1/2% per month.
H. J. Porter & Associates
Mr. Rokovich
July 31, 1997
page 3
The fee charged is for the appraisal reports requested. Should revisions be
requested due to a change in basic requirements by the client, an additional fee
will be charged. Consultations and, if requested in advance, court testimony,
stand by, depositions or pre-trial conferences will be charged at a per diem
rate of One Thousand Dollars ($1,000.00). Should additional copies of the report
be required, they will be made available on reasonable notice at a charge of One
Hundred Dollars ($100.00) per copy.
Client Relationship
It is understood that Merrill Lynch is considered to be the Client of H. J.
Porter & Associates. Accordingly, it shall be responsible for payment of all
fees due hereunder. Unless authorized in writing, the personnel of H. J. Porter
& Associates are not authorized to, nor will they divulge or discuss any of the
findings or conclusions of the appraisal with anyone other than the client.
Information Required
In order to uncle take this assignment we will need the following items for each
property to begin work. It is my understanding that the borrower, Newton,
Oldacre, McDonald will provide this information.
o Legal name and address of owner
o Copy of all current leases on the subject property.
o Transaction data on any sales of the subject (or a portion thereof) during
the past five (5) years.
o Ad Valorem tax information.
o Insurance information including limits of coverage, carrier, annual
premium, and agent.
o Current year to date and prior three years income and expense history.
o Survey and legal description of property to be appraised.
o Plot plan.
o Results of any environmental site assessments or testing for hazardous
materials.
Upon receipt of the information noted above and an executed copy of the
agreement, we will begin work on this assignment. This proposal shall remain
open for a period of one week from the above date. If not executed by that date
the delivery time and fee quoted are subject to change.
Your choice of us for this assignment is appreciated.
Yours very truly,
/s/ David P. Mullins
-----------------------------
David P. Mullins, MAI
H. J. Porter & Associates
|
The above terms and conditions are acceptable and you are authorized to proceed
as of this _____ day of____, 1997. It is understood that the fee agreed upon is
due and payable on delivery of the report and by executing this agreement agree
to responsibility for this fee.
Client:
By: /s/ Lawrence Miller
---------------------------------
Its: Director
|
H. J. Porter & Associates
LEASE SYNOPSIS
Tenant: Winn-Dixie Montgomery, Inc.
Area: 44,000 Sq. Ft.
Term: 20 years
Renewal Options: 6 option for 5 years each at same rent and terms
Minimum Rental: $338,800/year, or $7.70/sf
Percentage Rent: 1% over natural breakpoint
Expenses: Winn-Dixie will be responsible for building and
grounds maintenance, ad valorem taxes, and
property insurance on their delineated area. This
is a triple net lease wherein the tenant is
responsible for a expenses associated with the
operation of the property.
Repairs by Landlord: None
Repairs by Tenant: All
Parking: 6 spaces per 1,000 sf of leasable area with cross
parking easements with the remainder of the
shopping center.
Subletting: Tenant has right to use, vacate, assigned, sublet
in whole or part for retail food store or any
other lawful use.
Subordination: Yes
Non-Terminability: This lease shall not terminate and the Tenant
shall not have any right to terminate this lease
during the Term. Basic rent and all other sums
payable by Tenant shall be paid without notice or
demand, and without set-off, counterclaim,
recoupment, abatement, suspension, deferment,
diminution, deduction, or defence.
It is the intention of this lease that the
obligations of the Tenant shall be separate and
independent covenants and agreements, and that
Basic Rent and all other sums payable by Tenant
shall continue to be payable in all events, and
that the obligations of Tenant shall continue
unaffected.
H. J. Porter & Associates
|
LEASE SYNOPSIS
Tenant: Revco Drugs
Area: 9,240 Sq. Ft.
Term: 15 years
Renewal Options: 3 option for 5 years each
Minimum Rental: $7.75/Sq. Ft.
Percentage Rent: 2% over natural breakpoint
Expense Contributions:
C.A.M. Pro-rata share
Tax Pro-rata share
Insurance Pro-rata share
Structural Res. None
Management Fee None
Utilities Paid By: Tenant
Repairs by Landlord: Roof, foundation, and structural portions of the
building including exterior walls
Repairs by Tenant: All interior components and mechanical equipment
plus exterior doors and plate glass.
Parking: 5 spaces per 1,000 sf of leasable area
Subletting: Yes, with Lessor's written permission
Subordination: Yes
H. J. Porter & Associates
|
LEASE SYNOPSIS
Tenant: Premiere Video
Area: 4,800 Sq. Ft.
Tern: 5 years
Renewal Options: 2 option for 3 years each
Minimum Rental: $9.50/Sq. Ft.
Percentage Rent: None
Expense Contributions:
C.A.M. Pro-rata share
Tax Pro-rata share
Insurance Pro-rata share
Utilities Paid By: Tenant
Repairs by Landlord: Roof and exterior structural portions of the
building
Repairs by Tenant: All interior components and mechanical equipment
plus exterior doors and plate glass. Tenant must
maintain HVAC service contract.
Parking: None specified
Subletting: Yes, with Lessor's written permission
Subordination: Yes
H. J. Porter & Associates
|
LEASE SYNOPSIS
Tenant: Concord Cleaners
Area: 1,200 Sq. Ft.
Term: 3 years
Renewal Options: 2 options for 3 years each
Minimum Rental: $11.50/Sq. Ft.
Percentage Rent: None
Expense Contributions:
C.A.M. Pro-rata share plus 15% administrative cost
Tax Pro-rata share
Insurance Pro-rata share
Structural Res. Tenant pays $.05/sf for structural reserves
Utilities Paid By: Tenant
Repairs by Landlord: Roof and exterior structural portions of the
building
Repairs by Tenant: All interior components and mechanical equipment
plus exterior doors and plate glass. Tenant must
maintain HVAC service contract.
Parking: None specified
Subletting: Yes, with Lessor's written permission
Subordination: Yes
H. J. Porter & Associates
|
LEASE SYNOPSIS
Tenant: Head Start
Area: 1,200 Sq. Ft.
Term: 5 years
Renewal Options: 2 option for 5 years each
Minimum Rental: $10.50/Sq. Ft.
Percentage Rent: None
Expense Contributions:
C.A.M. Pro-rata share
Tax Pro-rata share
Insurance Pro-rata share
Other $.05/Sq. Ft. structural reserves and 5% management
Utilities Paid By: Tenant
Repairs by Landlord: Roof and exterior structural portions of the
building including foundation and bearing walls
Repairs by Tenant: All interior components and mechanical equipment
plus exterior doors and plate glass. Tenant must
maintain HVAC service contract.
Parking: None specified
Subletting: Yes, with Lessor's written permission
Subordination: Yes
Remarks:
H. J. Porter & Associates
|
LEASE SYNOPSIS
Tenant: Linda Strickland
Area: 960 Sq. Ft.
Term: 5 years
Renewal Options: None
Minimum Rental: $11.00/Sq. Ft.
Percentage Rent: None
Expense Contributions:
C.A.M. Pro-rata share plus 15% for administration
Tax Pro-rata share
Insurance Pro-rata share
Other None
Utilities Paid By: Tenant
Repairs by Landlord: Roof and exterior structural portions of the
building including foundation and bearing walls
Repairs by Tenant: All interior components and mechanical equipment
plus exterior doors and plate glass. Tenant must
maintain HVAC service contract.
Parking: None specified
Subletting: Yes, with Lessor's written permission
Subordination: Yes
Remarks:
H. J. Porter & Associates
|
ASSUMPTIONS AND LIMITING CONDITIONS
1. COPIES, PUBLICATION, DISTRIBUTION, USE OF REPORT:
Possession of this report or any copy thereof does not carry with the right
of publication, nor may it be used for other than its intended use. The
report may not be used for any purpose by any person or corporation other
than the client or the party to whom it is addressed or copied without the
written consent of the appraiser, and then only in its entirety.
Neither all nor any part of the contents of this report shall be conveyed
to the public through advertising, public relations efforts, news, sales,
or other media, without the written consent and approval of the appraiser,
nor may any reference be made in such a public communication to the
Appraisal Institute or the MAI designation.
2. CONFIDENTIALITY:
The appraiser may not divulge the material (evaluation) contents of the
report, analytical findings or conclusions, or give a copy of the report to
anyone other than the client or his designee as specified in writing except
as may be required by the Appraisal Institute as they may request in
confidence for ethics enforcement, or by a court of law or body with the
power of subpoena.
This appraisal is to be used only in its entirety and no part is to be used
without the whole report. All conclusions and opinion concerning the
analysis are set forth in the report and were prepared by the Appraiser
whose signature appears on the appraisal report, unless indicated as
"Review Appraiser." No change of any item in the report shall be made by
anyone other than the Appraiser and/or officer of the firm. The Appraiser
and firm shall have no responsibility if any such unauthorized change is
made.
3. INFORMATION USED:
No responsibility is assumed for accuracy of information furnished by or
from others, the client, his designee, or public records. We are not liable
for such information or the work of possible subcontractors. The comparable
data relied upon in this report has been confirmed with one or more parties
familiar with the transaction or from affidavit; all are considered
appropriate for inclusion to the best of our factual judgement and
knowledge.
H. J. Porter & Associates, Inc.
ASSUMPTIONS AND LIMITING CONDITIONS - (CONTINUED)
4. TESTIMONY, CONSULTATION, COMPLETION OF CONTRACT FOR APPRAISAL SERVICES:
The contract for appraisal, consultation or analytical service, are
fulfilled and the total fee payable upon completion of the report. The
appraiser or those assisting in the preparation of the report will not be
asked or required to give testimony in court or hearing because of having
made the appraisal, in full or in part, nor engage in post appraisal
consultation with client or third parties except under separate and special
arrangement and at additional fee.
5. EXHIBITS:
The sketches and maps in this report are included to assist the reader in
visualizing the property and are not necessarily to scale. Various photos,
if any, are included for the same purpose and are not intended to represent
the property in other than actual status, as of the date of the photos.
Site plans are not surveys unless shown from separate surveyor.
6. LEGAL, ENGINEERING, FINANCIAL, STRUCTURAL, OR MECHANICALNATURE HIDDEN
COMPONENTS, SOIL:
No responsibility is assumed for matters legal in character or nature, nor
matters of survey, nor of any architectural, structural, mechanical, or
engineering nature. No opinion is rendered as to the title, which is
presumed to be good and merchantable. The property is appraised as if free
and clear, unless otherwise stated in particular parts of the report.
The legal description is assumed to be correct as used in this report as
furnished by the client, his designee, or as derived by the appraiser.
The appraiser has inspected as far as possible, by observation, the land
and the improvements thereon; however it was not possible to personally
observe conditions beneath the soil or hidden structural, or other
components. We have not critically inspected mechanical components within
the improvements and no representations are made herein as to these matters
unless specifically stated and considered in the report. The value estimate
considers there being no such conditions that would cause a loss of value.
The land or the soil of the area being appraised appears firm, however
subsidence in the area is unknown. The appraiser does not warrant against
this condition or occurrence of problems arising from soil conditions.
The appraisal is based on there being no hidden, unapparent, or apparent
conditions of the property site, subsoil, or responsibility is assumed for
any such conditions or for any expertise or engineering to discover them.
All mechanical components are
H. J. Porter & Associates, Inc.
ASSUMPTIONS AND LIMITING CONDITIONS - (CONTINUED)
assumed to be in operable condition and status standard for properties of
the subject type. Conditions of heating, cooling, ventilating, electrical
and plumbing equipment is considered to be commensurate with the condition
of the balance of the improvements unless otherwise stated. No judgement is
made as to adequacy of insulation, type of insulation, or energy efficiency
of the improvements or equipment.
7. RELATING TO THE AMERICAN WITH DISABILITIES ACT:
The Americans with Disabilities Act ("ADA") became effective January 26,
1992. The appraisers have 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 there is no
direct evidence relating to this issue, possible non-compliance with the
requirements of ADA in estimating the value of the property has not been
considered.
8. LEGALITY OF USE:
The appraisal is based on the premise that, there is full compliance with
all applicable federal, state and local environmental regulations and laws
unless otherwise stated in the report; further that all applicable zoning,
building, and use regulations and restrictions of all types have been
complied with unless otherwise stated in the report; further that all
applicable zoning, building, and use regulations and restrictions of all
types have been complied with unless otherwise stated in the report;
further, it is assumed that all required licenses, consents, permits, or
other legislative or administrative authority, local, state, federal and/or
private entity or organization have been or can be obtained or renewed for
any use considered in the value estimate.
9. COMPONENT VALUES:
The distribution of the total valuation in this report between land and
improvements applies only under the existing program of utilization. The
separate valuations for land and building must not be used in conjunction
with any other appraisal and are invalid if so used.
H. J. Porter & Associates, Inc.
ASSUMPTIONS AND LIMITING CONDITIONS - (CONTINUED)
10. AUXILIARY AND RELATED STUDIES:
No environmental or impact studies, special market study or analysis,
highest and best use analysis study or feasibility study has been requested
or made unless otherwise specified in an agreement for services or in the
report. The appraiser reserves the unlimited right to alter, amend, revise
or rescind any of the statements, findings, opinions, values, estimates, or
conclusions upon any subsequent study or analysis or previous study or
analysis subsequently becoming known to him.
11. DOLLAR VALUES, PURCHASING POWER:
The market value estimated, and the costs used, are as of the date of the
estimate of value. All dollar amounts are based on the purchasing power and
price of the dollar as of the date of the value estimate.
12. INCLUSIONS:
Furnishings and equipment of business operations except as specifically
indicated and typically considered as a part of real estate, have been
disregarded with only the real estate being considered in the value
estimate unless otherwise stated.
13. PROPOSED IMPROVEMENTS, CONDITIONED VALUE:
Improvements proposed, if any, on or off-site, as well as any repairs
required are considered, for purpose of this appraisal to be completed in
good and workmanlike manner according to information submitted and/or
considered by the appraiser. In cases of proposed construction, the
appraisal is subject to change upon inspection of property after
construction is completed. This estimate of market value is as of the date
shown, as proposed, as if completed and operating at levels shown and
projected.
14. VALUE CHANGE, DYNAMIC MARKET, INFLUENCES:
The estimated market value is subject to change with market changes over
time; value is highly related to exposure, time, promotional effort, terms
motivation, and conditions surrounding the offering. The value estimate
considers the productivity and relative attractiveness of the property
physically and economically in the marketplace. The "Estimate of Market
Value " in the appraisal report is not based in whole or in part upon the
race, color or national origin of the present owners or occupants of the
properties in the vicinity of the property appraised.
In cases of appraisals involving the capitalization of income benefits, the
estimate of market value is a reflection of such benefits and appraiser's
interpretation of income and yields and other factors derived from general
and specific market information.
H. J. Porter & Associates, Inc.
ASSUMPTIONS AND LIMITING CONDITIONS - (CONTINUED)
Such estimates are as of the date of the estimate of value; they are thus
subject to change if the market is naturally dynamic.
15. MANAGEMENT OF THE PROPERTY:
It is assumed that the property which is the subject of this report will be
under prudent and competent ownership and management; neither inefficient
nor super efficient.
16. CONTINUING EDUCATION CURRENT:
The Appraisal Institute conducts a voluntary program of continuing
education for its designated members. MAIs and RMs who meet the minimum of
this program are awarded periodic certification. I am currently certified
under the Appraisal Institute Voluntary Continuing Education Program.
17. FEE:
The fee for this appraisal or study is for the service rendered and not for
the time spent on the physical report.
18. AUTHENTIC COPIES:
The authentic copies of this report are signed in blue ink. Any copy that
does not have an original signature is unauthorized and may have been
altered.
19. HAZARDOUS MATERIALS:
Unless otherwise stated in this report, the appraiser signing this report
has no knowledge concerning the presence or absence of urea-formaldehyde
foam insulation or asbestos containing material in existing improvements;
if such materials are present the value of the property may be adversely
affected and reappraisal at additional cost necessary to estimate the
effects of such material.
20. Unless otherwise noted within the attached report, there are no items of
FF&E included in the reported value. Any equipment included with the
property in the value are only those items that are considered as an
integral part of the realty, even though technically they could be legally
considered as personalty.
21. NOTE:
ACCEPTANCE OF, AND/OR USE OF, THIS APPRAISAL REPORT CONSTITUTES ACCEPTANCE
OF THE ABOVE CONDITIONS.
H. J. Porter & Associates, Inc.
PROFESSIONAL QUALIFICATIONS
OF
DAVID P. MULLINS, MAI
CURRENT STATUS
David P. Mullins is involved in the appraisal of and consulting with owners of
income producing real estate. He is the Managing Appraiser and a General Partner
of the Birmingham office of H.J. Porter & Associates with offices located at:
H. J. Porter & Assoc., Inc.
631 Stage Road/PO Box 28
Auburn, AL 36831
(334) 826-8682
H.J. Porter & Assoc. of Birmingham
#14 Office Park Circle, Suite 230
Birmingham, AL 35223
(205) 871-3600
H.J. Porter & Assoc. of Montgomery
235 South Court Street
Montgomery, AL 36104
(334) 262-8331
PROFESSIONAL AFFILIATIONS
Mr. Mullins is a member of the Appraisal Institute and holds the MAI Designation
(Certificate Number 11168). He is also a member of the International Right of
Way Association (Alabama Chapter Number 24).
PROFESSIONAL EDUCATION STATUS
Mr. Mullins is currently certified in Alabama as a Certified General Real
Property Appraiser (Certificate #G8). He has taken numerous courses and seminars
offered by the Appraisal Institute, Society of Real Estate Appraisers, and
International Right-of-Way Association.
HISTORICAL DATA
David P. Mullins is a graduate of Colorado State University with a Bachelors of
Science Degree in Agriculture Economics.
From 1983 to 1989 he worked with USDA/Farmers Home Administration. The first two
years he served as the Assistant County Supervisor in Centre, Alabama. He was
responsible for the Rural Housing Program which included appraising single
family residence. He also made farm real estate and operating loans which
included farm and ranch appraisals. In 1985 he moved to Dublin, Virginia as
County Supervisor. There he was responsible for the overall operation of the
field office where he supervised four employees. He completed appraisals of
single family housing loans and farm real estate loans. He also analyzed and
developed farm management plans for client borrowers. From 1987 to 1989 Mr.
Mullins worked in Richmond, Virginia as a Rural Housing Specialist. He provided
support and training to fifty field offices to administer the Rural Housing Loan
Program. He was the single family housing appraisal trainer, single family
housing review appraiser and multi-family housing appraiser.
From 1989 to 1991 Mr. Mullins was with the mortgage banking firm of Camp &
Company in Birmingham, Alabama. He served as the Head of the Appraisal and Loan
Submission Department for income property loans. He was responsible for
appraising investment grade
H. J. Porter & Associates
PROFESSIONAL QUALIFICATIONS OF DAVID P. MULLINS, MAI
income producing real estate that included shopping centers, office buildings,
multi-family apartments, and distribution warehouses.
From 1991 to 1993 Mr. Mullins worked as an employee for the appraisal firm of
H.J. Porter & Associates, Inc., managing their Birmingham office. In 1994 he
became a general partner of the Birmingham office with the title of Managing
Appraiser and the responsibility of managing two staff appraisers and one
support staff employee.
Since being associated with H.J. Porter & Associates, a variety of appraisal
assignments have been performed including the appraisal of neighborhood,
community, and power shopping centers, motels, single and multi-tenant office
buildings, multi-family apartments, assisted living facilities, convenience
stores, office/warehouse, distribution warehouses, vacant commercial and
agricultural land, and subdivision analysis. Other appraisal assignments
performed for different government entities include appraisal of total and
partial acquisitions for the Alabama Department of Transportation, the City of
Birmingham, and the Birmingham Airport Authority.
In addition to government entities, important clients include:
AmSouth Bank First Commercial Bank
Arlington Properties First Georgia Bank
Bank of Tuscaloosa Great Northern Insured Annuity Corp.
Baptist Health Systems Healthsouth
Birmingham Baptist Medical Center Jacksonville State University
Brookwood Medical Center NationsBank
CellularOne Norfolk Southern Corporation
Collateral Mortgage Regions Bank
Colonial Bank Salvation Army
Colonial Properties SouthTrust Bank
Columbus Bank & Trust Company Southern Natural Gas
Commercial Bank & Trust Co. St. Clair Federal
Compass Bank State Farm Life Insurance Company
Farmers National Bank Washington Mortgage Financial Group
First American Bank
H. J. Porter & Associates
|
State of Alabama
[ALABAMA GREAT SEAL]
This is to certify that
DAVID P. MULLINS
having given satisfactory evidence of the necessary
qualifications required by the laws of the State of Alabama
is licensed to transact business in Alabama as a
CERTIFIED GENERAL REAL PROPERTY APPRAISER
With all the rights, privileges and obligations
appurtenant thereto.
LICENSE NUMBER: G00008 [ILLEGIBLE] Executive Director
EXPIRATION DATE: Sept 30.1997 ALABAMA REAL ESTATE APPRAISERS BOARD
APPRAISAL REPORT
OF
MANDEVILLE MARKETPLACE
NORTH CAUSEWAY BOULEVARD
MANDEVILLE, LOUISIANA
(B97-134C)
FOR
MR. LARRY MILLER
MERRILL LYNCH & CO.
WORLD FINANCIAL CENTER-NORTH TOWER
NEW YORK, NY 10281
AS OF
AUGUST 18, 1997
BY
DAVID P. MULLINS, MAI
H. J. PORTER & ASSOCIATES
14 OFFICE PARK CIRCLE
SUITE 230
BIRMINGHAM, ALABAMA 35223
(205) 871-3600
[LOGO]
H.J. Porter & Associates
[LOGO]
[H.J. PORTER & ASSOCIATES - LETTERHEAD]
August 21, 1997
Mr. Larry Miller
Merrill Lynch & Co.
World Financial Center - North Tower
New York, NY 10281
Re: Appraisal Report of
Mandeville Marketplace
North Causeway Boulevard
Mandeville, LA
Dear Mr. Miller:
At your request, I have inspected and appraised the referenced property. The
purpose of the appraisal was to estimate the market value of the leased fee
interest in the subject property, one of fifteen shopping centers to be included
in a portfolio of retail shopping centers that will be cross collateralized,
under single management, and subject to stringent release provisions. As such,
the estimated value of the subject property is subject to the above conditions.
This complete appraisal, communicated in a self contained narrative report, has
been prepared in accordance with the Uniform Standards of Professional Appraisal
Practice (USPAP) as amended by the Comptroller of the Currency.
Based upon my investigation into the subject property, and its current economic
environment, I am of the opinion that the market value of the leased fee
interest in the subject property, as of August 18, 1997, is:
TEN MILLION NINE HUNDRED THOUSAND DOLLARS
($10,900,000)
Please note that this report is subject to the contingent and limiting
conditions as found in the addendum. It should be noted that my employment was
not conditional upon my producing a specific value with a given range. Future
employment prospects with Merrill Lynch are not dependent upon my producing a
specified value. Also, neither payment of my fee, nor my employment is/was based
upon whether a loan application is approved or disapproved. I appreciate the
opportunity to be of service to you in this matter.
123 N. College St., Ste. 100 o P.O. Box 28 o Auburn, Alabama 36830 o
(334)826-8682 o Fax (334)826-3827
14 Office Park Circle, Suite 230 o Birmingham, Alabama 35223 o (205)871-3600 o
Fax (205)879-3762
418 Scott Street o Montgomery, Alabama 36104 o (334)262-8331 o Fax (334)262-8325
Real Estate Research, Appraisal & Counseling
Mr. Miller
August 21, 1997
page 2
The attached report is submitted in support of these conclusions.
Yours very truly,
/s/ David P. Mullins
David P. Mullins, MAI
Certified General Real Property Appraiser
Alabama Certificate #G8
|
[LOGO]
H.J. Porter & AssociateS
SUMMARY OF SALIENT FACTS AND CONCLUSIONS
PROPERTY IDENTIFICATION: Mandeville Marketplace
North Causeway Boulevard
Mandeville, Louisiana
HIGHEST AND BEST USE: Neighborhood Shopping Center
DATE OF VALUE: August 18, 1997
DATE OF REPORT: August 21, 1997
SITE DATA: 7.081 Acres/308,448 Sq. Ft.
BUILDING DATA: Gross Building Area 87,079 SF
Divided As:
Winn-Dixie 53,986 SF
Local Space 8,500 SF
Bank Building 12,800 SF
Bank Drive-thur 4,148 SF
ATM Canopy 520 SF
Net Rentable Area 77,786 SF
Divided As:
Winn-Dixie 53,986 SF
Bank 15,300 SF
Local Space 8,500 SF
ESTIMATED LAND VALUE
AS OF AUGUST 18, 1997: $2,800,000
VALUE INDICATIONS: Cost Approach $10,110,000
Income Approach $10,900,000
Sales Comparison Approach $10,600,000
MARKET VALUE: $10,900,000
|
H.J. Porter & Associates
TABLE OF CONTENTS
intended use of appraisal ................................................. 1
type appraisal/type report ................................................ 1
environmental considerations .............................................. 1
scope of the assignment ................................................... 1
date of value/ date of report ............................................. 2
exposure time ............................................................. 2
property ownership ........................................................ 2
property location ......................................................... 3
zoning/public utilities ................................................... 3
legal description/land size ............................................... 3
ad valorem tax analysis ................................................... 5
purpose of appraisal/definition of value .................................. 6
rights appraised .......................................................... 6
area analysis - st. Tammany parish, louisiana ............................. 7
neighborhood analysis ..................................................... 12
site analysis ............................................................. 16
description of subject improvements ....................................... 17
highest and best use ...................................................... 19
the appraisal process ..................................................... 21
land value - direct comparison ............................................ 24
cost approach to value .................................................... 30
income approach to value .................................................. 33
market approach ........................................................... 49
reconciliation and final value estimate ................................... 61
certification ............................................................. 62
EXHIBITS
--------
Location Map ............................................. Facing Page 3
Survey ................................................... Facing Page 4
Site Plan ................................................ Facing Page 16
Subject Photographs ...................................... Facing Page 17
Land Sales Map ........................................... Facing Page 24
Rental Location Map ...................................... Facing Page 33
Improved Sales Map ....................................... Facing Page 49
REAR EXHIBITS
-------------
Engagement Letter
Lease Synopses
Louisiana Temporary Registration Certification
Assumptions and Limiting Conditions
Appraiser's Qualifications
Appraiser's Certificate
H.J. Porter & Associates
|
1
INTENDED USE OF APPRAISAL
This appraisal has been requested to function as a basis for loan underwriting
purposes in conjunction with a mortgage loan to be placed upon the subject
property, and for use in the securitization of the mortgage. Accordingly, this
appraisal may be provided by Merrill Lynch to potential investors in a
securitization or other sale of the mortgage loan. The appraisal is undertaken
without departure in accordance with USPAP as promulgated by the Appraisal
Foundation and as amended by the Comptroller of Currency.
TYPE APPRAISAL/TYPE REPORT
In accordance with the Uniform Standard of Profession Appraisal Practice, the
appraiser has performed a "Complete" appraisal according to Standard Rule 1
and the communication to the client in a "Self-Contained Narrative Report" in
accordance with Standard Rule 2-2a.
ENVIRONMENTAL CONSIDERATIONS
According to a Phase I Environmental Site Assessment of the subject property
performed by Raborn & Associates, Inc., Baton Rouge, LA, dated September 24,
1996, there was no evidence of recognized environmental conditions in
connection with the property. This valuation is made subject to there being no
such contamination.
SCOPE OF THE ASSIGNMENT
The subject property, a neighborhood shopping center, is one of fifteen
shopping centers to be included in a portfolio of retail properties which will
be cross collateralized, under single management, and subject to stringent
release provisions.
The scope of the assignment includes undertaking the three recognized approaches
to value with consideration given to the current status of the retail market in
Mandeville, Louisiana. In the Cost Approach local Realtors(R) and Appraisers
were contacted and a search of public records was made to locate comparable land
sales. A detailed inspection of the property was made on August 18, 1997.
Construction detail was taken from inspection notes, public records, and site
development plan titled Site Plan w/Expansion, Mandeville Marketplace, prepared
by Sanford Bell & Associates, Inc., Montgomery, AL, with the most recent
revision date of July 1, 1996. Cost calculations were taken from the Marshall
Valuation Service, a recognized national cost service indexed to the local
market.
In the Income Approach to Value, a survey of local retail market conditions
was made by interviews with local leasing and management agents to determine
if the contract rents for the local tenant shop space was competitive and
market oriented. Expense comparables were studied
H.J. Porter & Associates
SCOPE OF THE ASSIGNMENT - (CONTINUED) 2
to estimate appropriate expense deductions. The resulting net operating income
was capitalized into a value estimate with an overall capitalization rate. The
comparable improved sales found in the Market Approach sold on direct
capitalization of stabilized net operating income rather than discounted cash
flow analysis. The overall capitalization rate was derived from market sales,
built-up rates using current market rates for debt and equity and from
published investor surveys.
Local Realtors(R), Appraisers and mortgage lenders were interviewed to locate
sales of comparably improved properties. The sales located were compared to
the subject with adjustments made for items of difference. The three
approaches to value were reconciled to provide a value estimate of the
property.
DATE OF VALUE/ DATE OF REPORT
The value estimate predicated in this report is made effective as of August
18, 1997, being the date of the most recent site inspection of the subject
property. The data utilized in preparing this appraisal was researched,
gathered and/or updated during the period August 1, 1997 to August 19, 1997.
The date of report is made effective as of the date of the Letter of
Transmittal.
EXPOSURE TIME
The exposure time for the subject property, to obtain the values communicated
herein, is estimated to have been within one year or less. This exposure
period assumes competent sales and marketing efforts, the property is
maintained in a marketable condition, and that the property is sold for
"market value" as defined herein. The estimated exposure period is based upon
the marketing period for the Comparable Improved Sales found in the Market
Approach.
PROPERTY OWNERSHIP
The subject property is under the ownership of:
Mandeville Partners, Ltd.
P.O. Box 176
Prattville, Alabama 36067
The property has been owned by the current owner in excess of five (5) years.
H.J. Porter & Associates
[GRAPHIC OMITTED]
LOCATION MAP
3
PROPERTY LOCATION
The subject property is located in the city limits of Mandeville, Louisiana at
the northeast corner of Causeway Boulevard and the East Approach Road. It is
located by street address as:
Mandeville Marketplace
Causeway Boulevard
Mandeville, Louisiana
ZONING/PUBLIC UTILITIES
The subject property is located in the city limits of Mandeville, Louisiana and
falls under that city's zoning jurisdiction. The current zoning of the property
is B-2, Highway Business District which allows retail and office use as is
currently in place on the subject property. This zoning category calls for a
minimum lot area of 15,000 square feet, minimum lot width of 150 feet, and
minimum lot depth of 100 feet. The minimum yard setback requirements are 25 feet
in the front and 15 feet on the sides and rear. The maximum impervious site
coverage is 75%. Off-street parking requirements are 4.5 spaces per 1,000 square
feet of building area. The subject property is in compliance with current
zoning.
The subject has all public utilities available to it, including electric, gas,
water, sewage and telephone. Public services such as police and fire protection
are amply provided for by the City of Mandeville.
LEGAL DESCRIPTION/LAND SIZE
Based on information supplied to the appraisers by Tom Newton, Managing Partner
of the owner, the subject property is legally described as:
A CERTAIN PORTION OF GROUND, together with all the buildings
and improvements thereon and all the rights, ways,
privileges, servitudes, appurtenances and advantages
thereunto belonging, or in anywise appertaining, situated in
the Parish of St. Tammany, City of Mandeville, State of
Louisiana, in that part thereof known as North Corporate
Village, a portion of Parcel "G", Poitevent Tract, all as
more particularly described on the final plat of said
subdivision recorded with the Clerk of Court of St. Tammany
Parish at Map File No. EM208, approved by the Planning
Commission of said city by resolution number 84-13 adopted
January 10, 1985, and in accordance with said final plat
more particularly described as Lots 1,2,3,4,5,6,7 and
approximately the south 60 feet of Lot 8.
Said property is further described in accordance with a
survey prepared by Cartier & Associates, Inc., Consulting
Engineers, dated May 2, 1986, revised June 2, 1986 as
follows, to-wit:
From the Northwest corner of Section 42, Township 8 South,
Range 11 East proceed North 22 degrees 23'0" East 927.7
feet; thence South 29 degrees 21'58" East, 1,381.8 feet;
thence 2,03.4 feet along
H.J. Porter & Associates
[GRAPHIC OMITTED]
[MAP OF RESUBDIVISION OF LOT 1A INTO LOT 1A-A & 1A-2]
LEGAL DESCRIPTION/LAND SIZE - (CONTINUED) 4
an arc with a radius of 11,559.13 feet, thence South 19
degrees 25'58" East, 2,145.0 feet; thence South 81 degrees
18'52" East 200.0 feet; thence South 8 degrees 41'8" West
710.0 feet to the Point of Beginning which forms the
Southwest corner of North Corporate Village Subdivision.
From the Point of Beginning proceed along the east
right-of-way of North Causeway Boulevard, North 8 degrees
41'8" East 590.0 feet to a point; thence South 81 degrees
18'52" East, 480.0 feet to a point; thence South 8 degrees
41'8" West, 85.43 Feet to a point; thence on a curve with a
radius of 155 feet, 189.37 feet to a point; thence South 61
degrees 18'52" East, 38.54 feet to a point; thence on a
curve with a radius of 70 feet, 38.02 feet to a point;
thence South 80 degrees 11'22" East, 40.12 feet to a point;
thence on a curve with a radius of 2,391.83 feet, 418.54
feet to a point; thence North 81 degrees 15'52" West, 375.49
feet back to the Point of Beginning. Containing 7.081 acres.
Based on this description and the survey on the facing page. The subject
property is irregular shaped and contains a total land area of 7.081 acres/
308,448 square feet. The property has frontage of 520 feet on North Causeway
Boulevard, 313.34 feet on Northlake Parkway North, and 496.68 feet on East
Approach Road.
As indicated previously, the subject property is one of fifteen shopping center
to be included in a portfolio of retail properties which will be cross
collateralized, under single management, and subject to stringent release
provisions. The other shopping centers, included in the portfolio, are listed as
follows:
==========================================================
59 West Shopping Center Bessemer, AL
Clanton Marketplace Clanton, AL
Betts Crossing Shopping Center Opelika, AL
Opp Marketplace Opp, AL
Russell Crossing Shopping Center Phenix City, AL
29 North Shopping Center Cantonment, FL
Nine Mile Plaza Shopping Center Pensacola, FL
Parker Shopping Center Parker, FL
The "Y" Shopping Center Panama City Beach, FL
Greenbrier Station Shopping Center Anniston, AL
Brownsville Place Shopping Center Brownsville, TN
Chicot Crossing Shopping Center Pascagoula, MS
Delchamps Plaza Long Beach, MS
One Main Place Moss Point, MS
==========================================================
H.J. Porter & Associates
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5
AD VALOREM TAX ANALYSIS
The subject parcel is under the taxing authority of the St. Tammany Parish Tax
Assessors Office and is found on the tax rolls as:
Assessed to: Mandeville Partners, Ltd.
P.O. Box 176
Prattville, Alabama 36067
Assessment # 1140304778
Value: Land: $1,010,780
Improvements: $2,032,133
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Total: $3,042,913
Annual Tax: $74,845.86
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The tax rate per $1,000 of assessed value for commercial property is $166.75 for
St. Tammany Parish and $17.64 for the town of Mandeville. The assessment ratio
is 10% for land and 15% for improvements.
H.J. Porter & Associates
6
PURPOSE OF APPRAISAL/DEFINITION OF VALUE
This appraisal is made for the purpose of estimating the market value of the
subject property. Market Value is defined by the Appraisal Standards Board of
the Appraisal Foundation in the Uniform Standards of Professional Appraisal
Practice 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
and knowledgeably, and assuming the price is not affected by
undue stimulus. Implicit in this definition is the
consummation of a sale as of a specified date and the
passing of title from seller to buyer under conditions
whereby:
1. Buyer and seller are typically motivated;
2. Both parties are well informed or well advised, and acting in what they
consider their own best interest;
3. A reasonable time is allowed for exposure in the open market;
4. Payment is made in terms of cash in U.S. Dollars or in terms of financial
arrangements comparable thereto; and
5. The price represents the normal consideration for the property sold
unaffected by special or creative financing or sales concessions granted by
anyone associated with the sale.
RIGHTS APPRAISED
The ownership interest in the subject property appraised is the "Leased Fee
Estate." The Dictionary of Real Estate Appraisal, 3rd Edition, Page 204, defines
Leased Fee Estate as, "an ownership interest held by a Landlord with the right
of use and occupancy conveyed by lease to others. The rights of lessor "the
leased fee owner" and the leased fee are specified by contract terms contained
within the lease."
The subject property is 100% leased to five tenants with lease terms ranging
from three to twenty years. Winn-Dixie occupies 53,986 square feet or 69.4% of
the net rentable area on a 20 year lease term which commenced in 1996. First
National Bank of Commerce leases 15,300 square feet or 19.7% of the net rentable
area. Their expires September 30, 2003. The remaining tenants have lease terms
ranging from three to five years. A Lease Synopsis for each tenant is located in
the Addenda.
H.J. Porter & Associates
7
AREA ANALYSIS - ST. TAMMANY PARISH,LOUISIANA
The four basic factors which must be considered in analyzing an area are:
Physical and Locational Factors
Economic and Financial Factors
Political and Governmental Factors
Sociological Factors
PHYSICAL AND LOCATIONAL FACTORS
The primary physical and locational factors effecting the subject property are
St. Tammany's locational proximity to New Orleans and the Federal Highway system
serving the Parish. St. Tammany Parish is located on the north shore of Lake
Pontchartrain, and is one of the six parishes included in the New Orleans MSA.
Causeway Bridge, the longest over-water bridge (23.8 miles), is one of two major
transportation arteries linking St. Tammany Parish to New Orleans. The other is
Interstate 10 from Slidell to New Orleans. St. Tammany Parish is served by three
Interstate Highways, which intersect just north of Slidell; I-10, I-12, and
I-59. I-59 is the major transportation artery linking New Orleans to Birmingham,
Alabama and Chattanooga, Tennessee. Interstate 59 terminates/begins in Slidell,
30 miles east of the subject. I-10 is the major east-west transportation artery
serving the southern most areas of the United States and extends from coast to
coast. I-10 turns southward in Slidell and runs through New Orleans. Interstate
12 is a By-Pass interstate serving the north shore area of Lake Pontchartrain,
and links Slidell and Baton Rouge, bypassing New Orleans. Other major Federal
Highways include US 11, US 90, and US 190.
Lake Pontchartrain, a mammoth salt water lake, which excepting the Great Lakes,
is the second largest inland lake in the United States. Shallow water barge
potential in St. Tammany is abundant as the entire southern border fronts Lake
Pontchartrain. The Inner Harbor Navigation Canal entering Lake Pontchartrain
provides access to the Mississippi River, Intracoastal Waterway and the
Mississippi River Gulf Outlet. New Orleans International Airport is 45 minutes
away. All motor carrier terminals are within one or two hours driving time to
any point in St. Tammany.
Convenient access to New Orleans, via Causeway Bridge, has spurred residential
growth and created bedroom communities in the towns of Mandeville, Covington,
Abita Springs, Chinchula, and Madisonville. These communities are located in the
western half of St. Tammany Parish were the majority of residential growth has
occurred.
H.J. Porter & Associates
AREA ANALYSIS - ST. TAMMANY PARISH, LOUISIANA - (CONTINUED) 8
ECONOMIC AND FINANCIAL FACTORS
St. Tammany Parish is one of the fastest growing parishes in the State of
Louisiana, and the fastest growing in the New Orleans
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