A Real Estate Appraisal
In a Self-contained Report
Of
4801 Riverbend Road
Boulder, Colorado 80301
FOR
Sam Banker
Sample Bank
101 Example Rd
Denver, Colorado 82507
Date of Value - June 16, 2007
Report Date - July 1, 2007
BY
Sample Appraisals, Inc
123 Anystreet
Denver, Colorado 82706
303-555-1901
July 1, 2007
Sam Banker
Sample Bank
101 Example Rd
Denver, Colorado 82507
Re:
Appraiser’s File Office Demo
4801 Riverbend Road
Boulder, Colorado 80301
Dear Banker:
At your request, we have prepared a real estate appraisal of the above referenced
property which is presented in a self-contained report. The property rights appraised
for this analysis is the fee simple estate interest. The type of value in the analysis is
the market value. The definition of value is described in the report. The date of the
subject’s “as is” value is June 16, 2007, the date the property was inspected for
appraisal purposes.
The intended user of the report is our client, The intended user is the client, "the best
bank"., and the intended use of the appraisal is The intended use of this to support
mortgage loan underwriting.. This appraisal report is prepared for the sole and
exclusive use of the client. No third parties are authorized to rely upon this report
without the express written consent of the appraisers.
The appraisal is based on standard assumptions, extraordinary assumptions, and
hypothetical conditions. This report has been prepared in conformity with the
appraisal standards required by Title XI of FIRREA, the Office of the Comptroller of the
Currency, the Code of Professional Ethics and Standards of Professional Practice of the
Appraisal Institute, the Uniform Standards of Professional Appraisal Practice
promulgated by the Appraisal Foundation and the instructions provided by our client,
Sample Bank.
This letter of transmittal has attached a report that contains XX pages and XX addenda
items. Methods used and all pertinent data gathered in our investigation are included
in this report.
Sam Banker
July 1, 2007
Page 2
Our opinion of the market value of the fee simple estate in the subject property as of
June 16, 2007, was:
Final Opinion of Market Value:
$1,000,000
The market value conclusion is based on a reasonable marketing period estimated to
be 12 months or less and exposure time of 6 to 12 months.
This appraisal analysis is subject to the following extraordinary assumptions and
hypothetical conditions. If any of the following prove to be incorrect, we reserve the
right to amend our analysis as it may have an affect on the value conclusions stated
herein.
1. It is assumed that the size reported by the assessor is accurate.
Our firm appreciates the opportunity to have performed this appraisal assignment on
your behalf. If we may be of further service, please contact us.
Respectfully submitted,
Sample Appraisals, Inc
TABLE OF CONTENTS
SUMMARY OF FACTS AND CONCLUSIONS ........................................................................... 1
PROPERTY BEING APPRAISED ................................................................................................... 3
PROPERTY BEING APPRAISED ................................................................................................... 3
DATE OF VALUE ESTIMATE ......................................................................................................... 3
DATE OF VALUE ESTIMATE ......................................................................................................... 3
INTENDED USE AND INTENDED USERS OF THE APPRAISAL ...................................... 3
PURPOSE AND INTENDED USE AND INTENDED USERS OF THE APPRAISAL ....... 3
PROPERTY RIGHTS APPRAISED ................................................................................................ 3
PROPERTY RIGHTS APPRAISED ................................................................................................ 3
TYPE OF VALUE ................................................................................................................................ 3
DEFINITION OF MARKET VALUE ............................................................................................... 3
VALUE DEFINITIONS ..................................................................................................................... 3
ASSUMPTIONS AND LIMITING CONDITIONS ..................................................................... 4
ASSUMPTIONS AND LIMITING CONDITIONS ..................................................................... 4
SCOPE OF THE WORK ................................................................................................................... 8
CITY AND REGIONAL DATA ........................................................................................................ 9
CITY AND REGIONAL DATA ........................................................................................................ 9
MARKET OVERVIEW ....................................................................................................................... 9
SUBJECT PROPERTY DESCRIPTION ...................................................................................... 12
Location ................................................................................................................................ 12
2006 MILL LEVY ........................................................ ERROR! BOOKMARK NOT DEFINED.
SITE DESCRIPTION ...................................................................................................................... 13
IMPROVEMENTS DESCRIPTION .............................................................................................. 14
ECONOMIC CHARACTERISTICS OF THE PROPERTY ...................................................... 17
HIGHEST AND BEST USE ANALYSIS..................................................................................... 18
HIGHEST AND BEST USE ANALYSIS..................................................................................... 18
Analysis "As Improved".............................................................................................. 18
VALUATION ...................................................................................................................................... 19
SALES COMPARISON APPROACH ........................................................................................... 21
ECONOMIC ADJUSTMENTS ....................................................................................................... 24
PHYSICAL ADJUSTMENTS .......................................................................................................... 26
Building Improvements .............................................................................................. 32
Site Improvements ........................................................................................................ 32
Curable Physical Deterioration ............................................................................... 34
Incurable Physical Deterioration .......................................................................... 34
Functional Obsolescence ............................................................................................ 35
External Obsolescence ................................................................................................ 35
SALES COMPARISON APPROACH ........................................................................................... 37
ECONOMIC ADJUSTMENTS ....................................................................................................... 41
PHYSICAL ADJUSTMENTS .......................................................................................................... 42
INCOME APPROACH ..................................................................................................................... 48
RECONCILLIATION OF VALUE.................................................................................................. 55
CERTIFICATE OF APPRAISAL ................................................................................................... 58
ADDENDA
I.
INSERT ADDENDA ITEMS HERE
4801 Riverbend Road
Boulder, Colorado
4801 Riverbend Road Boulder, Colorado
SUMMARY OF FACTS AND CONCLUSIONS
Date of Value:
Date of Report:
Date of Inspection:
June 16, 2007
July 1, 2007
June 16, 2007
Type of Property:
Sub-Property Type:
Interest Appraised:
Office
Low-Rise
fee simple estate
Location:
4801 Riverbend Road
Boulder, Colorado
Owner of Record:
Tax Assessor's Parcel Number:
Assessor’s Actual Value:
4801 Riverbend Limited Liability Company
146328018001
$1,100,000
Land Area:
Land to Building Ratio:
Parking:
0.419 acres / 18,250 square feet
2.9:1
28 spaces
Zoning:
Does subject conform to zoning?
TB-D (Transitional Business - Developing)
Appears to be a legally conforming use
Year of Construction:
Estimated Remaining Economic Life:
Type of Construction:
1984
35 years
wood or steel studs
Has subject sold in last three years?
No
Gross Building Area:
Net Rentable Area:
6,286 square feet
6,286 square feet
Efficiency Ratio:
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100 %
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4801 Riverbend Road Boulder, Colorado
SUMMARY OF FACTS AND CONCLUSIONS
(continued)
Value Indications for Subject:
Land Value:
$640,000 - $820,000
Cost Approach:
$1,120,000 - $1,170,000
Sales Comparison Approach:
$1,100,000 - $1,200,000
Income Approach:
$900,000 - $1,050,000
Final Opinion of Value:
Value Per Square Foot:
Overall Rate:
$1,000,000
$159.08
6.3%
Reasonable Marketing Period:
Exposure Time:
 2016 Sample Appraisals, Inc
12 months or less
6 to 12 months
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4801 Riverbend Road Boulder, Colorado
PROPERTY BEING APPRAISED
The subject property office building is situated on 0.419 acres of land located at 4801
Riverbend Road in Boulder, Colorado.
DATE OF VALUE ESTIMATE
The effective date of the appraisal in its "as is" condition is June 16, 2007, the date
the property was last inspected for appraisal purposes. Appraisals have specific
effective dates because the value of real estate is subject to change both up and down
over time.
INTENDED USE AND INTENDED USERS OF THE APPRAISAL
The intended use of this report is The intended use of this to support mortgage loan
underwriting.. The intended user of the report is The intended user is the client, "the
best bank".. This appraisal report is prepared for the sole and exclusive use of the
client. No third parties are authorized to rely upon this report without the express
written consent of the appraiser. The report has been written in accordance with our
understanding of the appraisal instructions provided to us. A copy of the instructions
is included in the addenda.
PROPERTY RIGHTS APPRAISED
The subject property is appraised assuming a fee simple estate, subject to the
easements and restrictions noted herein.
The term "fee simple estate" is defined as:
Absolute ownership unencumbered by any other interest or estate, subject
only to the limitations imposed by the governmental powers of taxation,
eminent domain, police power, and escheat. Source: The Dictionary of Real
Estate Appraisal, Fourth Edition, Appraisal Institute, Chicago, Illinois, 2002.
TYPE OF VALUE
The type of value utilized in this analysis is the market value, as defined below.
DEFINITION OF MARKET VALUE
The definition of "market value," as used in this report, is as follows:
"Market Value" is the most probable price which a property should bring in
a competitive and open market under all conditions requisite to a fair sale,
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4801 Riverbend Road Boulder, Colorado
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 interests,
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.
Source: OCC's Final Rule, 12 CFR Part 34, Subpart C-Appraisals, Section
34.42(g), effective August 24, 1990.
EXTRAORDINARY ASSUMPTIONS AND HYPOTHETICAL CONDITIONS
An extraordinary assumption per USPAP is “an assumption, directly related to a
specific assignment, which, if found to be false, could alter the appraiser’s opinions or
conclusions.” Source: Uniform Standards of Professional Appraisal Practice and Advisory
Opinions, effective July 1, 2006, The Appraisal Foundation.
A hypothetical condition per USPAP is “that which is contrary to what exists but is
supposed for the purpose of analysis.” Source: Uniform Standards of Professional Appraisal
Practice and Advisory Opinions, effective July 1, 2006, The Appraisal Foundation.
This appraisal analysis is subject to the following extraordinary assumptions and
hypothetical conditions. If any of the following prove to be incorrect, we reserve the
right to amend our analysis as it may have an affect on the value conclusions stated
herein.
1. It is assumed that the size reported by the assessor is accurate.
ASSUMPTIONS AND LIMITING CONDITIONS
The Certificate of Appraisal at the conclusion of this report is subject to the following
conditions and to other specific and limiting conditions as described by the appraisers
in the report.
1.
We assume no responsibility for matters legal in nature affecting the property
appraised or its title, nor do we render any opinion as to the title, which is assumed to
be good and marketable. All existing liens and encumbrances, if any, have been
disregarded, and the property is appraised as though free and clear and held under
responsible ownership and competent management.
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4801 Riverbend Road Boulder, Colorado
2.
Information, estimates and opinions furnished to the appraisers and contained in the
report were obtained from sources considered to be reliable and are believed to be
true and correct. However, we assume no responsibility for their accuracy.
3.
Although parcel dimensions were taken from a source considered to be reliable, this
should not be construed as a land survey. The exact land size and legal description
should be verified by a licensed engineer or land surveyor.
4.
Sketches presented in the report may show approximate dimensions and are included
to assist the reader in visualizing the property. We assume no responsibility for their
accuracy, and we have made no survey of the property.
5.
Unless otherwise stated in the report, the estimated value does not include the
contributory value of any personal property, furniture, fixtures, equipment or ongoing business value.
6.
It is assumed that the utilization of the land and improvements is within the
boundaries or property lines of the property and that there is no encroachment or
trespass unless noted in the report.
7.
This appraisal report is prepared for the sole and exclusive use of the client. No third
parties are authorized to rely upon this report without the express written consent of
the appraiser.
8.
It is assumed that all applicable zoning and use regulations and restrictions have been
complied with unless a nonconformity was stated, defined and considered in the
appraisal report.
9.
It is assumed that all required licenses, certificates of occupancy, consents or other
legislative or administrative authority from any local, state or national government or
private entity or organization have been or can be obtained or renewed for any use on
which the value estimate contained in this report is based.
10. Full compliance with all applicable federal, state and local environmental regulations
and laws is assumed unless noncompliance is stated, defined and considered in the
appraisal report.
11. In this appraisal assignment, the existence of potentially hazardous material, gases,
toxic waste and mold, which may or may not be present on the property, was not
observed by the appraisers; nor do we have any knowledge of the existence of such
materials on or in the property. To the best of our knowledge, the presence of
potentially hazardous waste, materials or gases has not been detected, or if they have
been detected, it has been determined that the amount or level is considered to be
safe according to standards established by the Environmental Protection Agency.
However, the appraisers are not qualified to detect such substances and do not make
any guarantees or warranties that the property has been tested for the presence of
potentially hazardous waste material or gases or, if tested, that the tests were
conducted pursuant to EPA-approved procedures. The existence of any potentially
hazardous waste, gases, or mold may have an effect on the value of the property.
We urge the client to retain an expert in this field if desired.
12. The appraisers are not property or environmental inspectors. The appraiser provides
an opinion of value. The appraisal does not guarantee that the property is free of
defects of environmental issues. The appraiser performs an inspection of the visible
and accessible areas only. The appraiser is not qualified to determine the existence of
mold, the cause of mold, the type of mold, or whether, if any mold exists, the mold
might pose any risk to the property or its inhabitants. Mold may be present in areas
of the house, including areas the appraiser cannot see. A professional home or
property inspection or environmental inspection is recommended.
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4801 Riverbend Road Boulder, Colorado
13. It is assumed that the property will have an adequate supply of energy in the future.
14. 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 impact on the value of the property. Since the appraisers have no
direct evidence relating to this issue, possible noncompliance with the requirements of
the ADA was not considered in estimating the value of the property.
15. We assume there are no hidden or unapparent conditions of the property, subsoil or
structures that would render it more or less valuable. We assume no responsibility for
such conditions or for engineering that might be required to discover such factors.
16. No requirement shall be made of the appraisers to give testimony or appear in court
by reason of this appraisal of the property in question, unless arrangements have
been made previously. If any courtroom or administrative testimony is required in
connection with this report, an additional fee shall be charged for those services.
17. Possession of this report, or copy hereof, does not carry with it the right of publication
nor may it be used for any purposes whatsoever by any but the appraisal client
without the previous written consent of the appraisers or the appraisal client.
18. Disclosure of the contents of the appraisal report is governed by the Bylaws of the
Appraisal Institute. Neither all nor any part of the contents of this study (especially
any conclusions of value, the identity of the appraisers or the firm with which they are
connected, or any reference to any professional society or institute or any initialed
designations conferred upon the appraiser) shall be disseminated to the public
through advertising media or public means of communication without prior written
consent and approval of the appraisers.
19. Our inspection of the subject should in no way be construed as an engineering
inspection for its structural soundness, its physical condition or for the condition of the
mechanical systems; we recommend that interested parties obtain an engineering
inspection by a competent engineer.
20. The cost approach, if developed for this assignment, has only been developed by the
appraiser as an analysis to support their opinion of the property’s market value. Use
of this data, in whole or in part, for other purposes in not intended by the appraiser.
Nothing set forth in the appraisal should be relied upon for the purpose of determining
the amount or type of insurance coverage to be placed on the subject property. The
appraiser assumes no liability for and does not guarantee that any insurable value
estimate inferred from this report will result in the subject property being fully insured
for any loss that may be sustained. Further, the cost approach may not be a reliable
indication of replacement or reproduction cost for any date other than the effective
date of this appraisal due to changing costs of labor and materials and due to
changing building codes and governmental regulations and requirements.
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4801 Riverbend Road Boulder, Colorado
21. When the client requires an insurable value worksheet be completed for the
assignment, the provision of an Insurable Value by the appraiser does not change the
intended user or the intended use of the appraisal. The appraiser assumes no liability
for the Insurable Value estimate provided and does not guarantee that any estimate
or opinion will result in the subject property being fully insured for any possible loss
that may be sustained. The appraiser recommends that an insurance professional be
consulted. The appraiser does not claim to be an expert in estimating replacement
costs. Incremental soft costs in a particular jurisdiction could be substantially higher
than the estimate provided by Marshall Valuation Service which was relied upon for
this analysis. A standard adjustment of 0.90 was applied to the estimated costs to
account for items that may or may not be destroyed in a fire. The actual damage in
the event of a loss could be greater, resulting in a higher replacement cost. The
Insurable Value estimate may not be a reliable indication of replacement or
reproduction costs for any date other than the effective date of the appraisal due to
changing costs of labor and materials and due to changing building codes and
governmental regulations and requirements.
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4801 Riverbend Road Boulder, Colorado
SCOPE OF THE WORK
In the appraisal of the subject property, the appraisers completed the following steps
and analyses:
1. Sam P Appraiser has inspected the subject property, the neighborhood, and the
comparables employed in arriving at the value estimates stated herein. has
reviewed the analyses and conclusions and concurs with the reasoning that led to
the final value estimation.
2. Gathered and analyzed data on regional, city and neighborhood characteristics.
3. Gathered pertinent data regarding the subject property and recent improved
property sales in the general market area.
4. Analyzed the site characteristics, existing improvements, existing and potential
zoning, surrounding land uses, and supply and demand to establish the highest
and best use of the site.
5. Analyzed the comparable property data to arrive at a probable range of value for
the subject via the cost approach, sales comparison approach, and income
approach.
6. Reconciled the results of these analyses into a final market value estimate as of
June 16, 2007 and estimated an exposure time and a reasonable marketing
period.
7. In connection with this assignment, the appraisers were provided with the
following items, which will be referenced in this report.
 A copy of the title commitment/title policy
 A site plan for the subject
 An Phase I Environmental Report
 A soils report
 Operating History
 Rent Roll
8. In connection with this assignment, the appraisers interviewed and/or obtained
information from
 Property owner
 Zoning Department
 Assessor’s Office
 Treasurer’s Office
 Real Estate Brokers
 Real Estate Owners and/or Property Managers
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4801 Riverbend Road Boulder, Colorado
CITY AND REGIONAL DATA
Insert City Regional Information Here
MARKET OVERVIEW
Insert Market Overview Information Here
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4801 Riverbend Road Boulder, Colorado
NEIGHBORHOOD DESCRIPTION
General Description
The subject neighborhood boundaries have been defined by the appraisers as
Arapahoe Road to the south, Pearl Street to the north, 30th Street to the west, and
55th Street to the east. The neighborhood is made up of mostly commercial
properties that include office, retail. There are few parcels available for development.
One major redevelopment project called, "The Peloton" is under construction and will
include residential, office, retail. The subject property is approximately 2.0 miles
from the Central Business District. The subject property has a suburban location.
The subject neighorhood is on the east central portion of the City of Boulder.
Access
Foothills Parkway (US Highway 119) is the major north / south arterial in the
neighborhood and the city of Boulder. Fifty-fifth street is another north/south
arteiral. Baseline, Arapahoe Road, Pearl Parkway, and Valmon are the primary
east/west arterials.
Access to the neighorhood is excellent.
Land Use Patterns
Suburban of the neighborhood has been developed. The subject neighborhood
features the following land uses:
Office:
Industrial:
Retail:
40%
30%
30%
The proposed fast tracks rail connection between Boulder and Denver will traverse
through the middle of this neighborhood.
Life Stage and Trends
The subject neighborhood is in a stability stage of the development lifecycle. The
typical improvement in the area is new to 50 years old.
The overall condition of the
neighborhood is average and the overall appeal of the neighborhood is average.
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4801 Riverbend Road Boulder, Colorado
The neighborhood has good appeal as a result of convenient access from all
directions.
Economic/Demographic Data
There is limited land available for new competing improvements to be built within the
neighborhood.
Public Facilities
There is a community hospital that has opened with the last five years that is located
on the west side of the neighborhood.
Conclusions
The neighborhood has convenient access to downtown Boulder, US Highway 36
(Boulder/Denver Turnpike), and Longmont. Overall the neighborhood has good
appeal.
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4801 Riverbend Road Boulder, Colorado
SUBJECT PROPERTY DESCRIPTION
Location
The subject property is located at 4801 Riverbend Road in Boulder, Colorado.
Legal Description
Per the ownership deed associated with the subject property, the legal description is:
Lot 1, Riverbend First Replat, 4801 Riverbend Road
History of Ownership
The subject property currently is owned by 4801 Riverbend Limited Liability Company.
This is evidenced by a general warranty deed recorded December 18, 1993 in the
Boulder Clerk and Recorder's office under 1293-18945.
The documentary fee on the
deed implied consideration of $500,000. A copy of the deed is included in the
addenda.
Three years of ownership history, current or recent
listing and/or contract information is required to be
analyzed and reported.
Zoning
The subject property is zoned TB-D, Transitional Business - Developing in Boulder,
Colorado.
Allowed Uses By Right
Uses allowed by right in this district generally
include office, retail, smaller scale restaurants, and
light-industrial.
Minimum Lot Size
None
Minimum Lot Width
None
Height Restriction
35 feet
Maximum Building Coverage
0.5 to 1
Front Yard Setback
10 feet
Side Yard Setback
5 feet
Rear Yard Setback
5 feet
Parking Requirements
one space per 250 square feet of office and one
space per 500 square feet of industrial
Potential For Zoning Change
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There is essentially no chance for a change in
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4801 Riverbend Road Boulder, Colorado
zoning.
Date
of
Most
Recent
Zoning
This information is current as of February 2008.
Information Update
The subject improvement appears to be a legally conforming use. Based on
discussions with the zoning authority there is essentially no chance of a zoning
change.
Real Estate Tax Analysis
Boulder County records show the following assessed values and taxes for the subject
property, identified as tax assessor's Parcel No. 146328018001.
Assessor Data
18,250 square feet or
Land Size
0.419 acres
Improvement Size
6,286 square feet
Total Market Value / Actual Value
$1,100,000
Total Assessed Value
$319,000
Date Property Was Last Reassessed
June 30, 2006
Treasurer Data
Mill Levy
65.830000
Current Calculated Taxes
$21,000.00
Current Taxes Owed Per Assessor
$21,000.00
The subject property is not in a special tax district. There are no delinquent taxes due.
SITE DESCRIPTION
Description:
Data:
Land Square Footage
Land Acreage
Land Size Source
Land Shape
Frontage
Depth
Topography
18,250 square feet
0.419 acres
county assessor
rectangular
Approximately 117 feet along Riverbend
Road
163 feet
level
Flood Plain
FEMA Community Map Panel
AE - areas of 500-year flood
No. 0024-08013C0415F
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4801 Riverbend Road Boulder, Colorado
FEMA Map Revision Date
Surplus Land
06/02/95
no
Improvement Footprint
Landscaping Square Feet
Parking, Sidewalk Square
Feet
Total Site Size
4,100 SF
8,500 SF
5,650 SF
18,250 SF
Easements/Encroachments
There are no known easements or encroachments associated with the subject
property.
Soil Conditions
There are no known adverse soil conditions associated with the subject property.
Environmental Issues
It is unknown whether there are any environmental issues associated with the
subject property. For purposes of this analysis it is assumed that there are no
adverse environmental issues.
Utilities Description/Abnormalities
All utilities are available and installed to the subject including gas, electricity,
water, sewer, cable t.v., and telephone.
Surrounding Land Uses
Direction
North
South
East
West
Land Use
Industrial
Multi-family and single family residential
Industrial
Community Hospital
Summary
There are eight covered parking spaces on the east side of the building that are
part of the total parking count.The site is a 0.419 acre or 18,250 square foot parcel
that is located in the eastern part of the neighborhood. The property can be
accessed from Arapahoe Road on the west. The site is level and recangular in
shape.
IMPROVEMENTS DESCRIPTION
Description
Data
Gross Building Area
6,286 square feet
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4801 Riverbend Road Boulder, Colorado
Source of Gross Building Area
Net Rentable Area
Source of Net Rentable Area
Land to Building Ratio
owner
6,286 square feet
assumed to be same as the GBA
2.9:1
FAR – Floor Area Ratio
Building Efficiency
Occupancy Rate
0.3
100.0 %
92 %
Year of Construction
Effective Age
Economic Life
Remaining Economic Life
Number of Buildings
Number of Stories
Type of Construction
1984
15 years
50 years
35 years
1
2
wood or steel studs
Construction Quality
Property Condition
Building Class
average
average
B - top 10 to 50 percent of the market
Construction Components
Roof Type
Ceiling Height
Heat Type
AC Type
Fire Sprinklers
gable
9 to 10 feet
gas hot water boiler
complete engineered cooling system
no
Additional Details
There is a 12 year old shake shingle roof. There are eight covered parking spaces on
the east side of the building that are part of the total parking count.
Parking
Total Number of Parking Spaces
Square Feet of GBA Per Parking Space
Type of Parking
Number of Parking Spaces in Structure
28
225
surface parking
24
Deferred Maintenance
There was no deferred maintenance observed at the subject property at the time of
inspection.
Conclusions
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4801 Riverbend Road Boulder, Colorado
There are eight covered parking spaces on the east side of the building that are part
of the total parking count.
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4801 Riverbend Road Boulder, Colorado
Economic Characteristics of the Property
The subject property is partially owner occupied.
2005
% EGI
$/NRSF
Rental Income
2006
Total
% EGI
$/NRSF
2007
Total
% EGI
$/NRSF
Total
$108,715
$114,685
$116,817
$117,691
$122,221
$120,351
Other Income
Total Income
Property Taxes
19.4%
$3.63
$22,815
18.7%
$3.63
$22,842
17.5%
$3.35
$21,058
Insurance
1.0%
$0.19
$1,221
1.9%
$0.36
$2,286
1.7%
$0.33
$2,084
Offsite Management
4.1%
$0.77
$4,857
4.7%
$0.92
$5,752
4.4%
$0.85
$5,318
Admin and General
2.8%
$0.53
$3,348
2.4%
$0.47
$2,948
0.2%
$0.03
$218
Payroll
0.8%
$0.16
$987
2.4%
$0.47
$2,951
1.0%
$0.20
$1,245
Utilities
13.7%
$2.57
$16,130
12.3%
$2.39
$15,005
14.7%
$2.81
$17,660
Repairs & Maintenance
7.4%
$1.38
$8,699
13.8%
$2.68
$16,834
14.0%
$2.68
$16,853
Reserves
0.0%
$0.00
$0
0.0%
$0.00
$0
0.0%
$0.00
$0
49.3%
$9.24
$58,057
56.1%
$10.92
$68,618
53.5%
$10.25
$64,436
$9.49
$59,634
$8.53
$53,603
$8.90
$55,915
Total Expenses
Net Operating Income
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4801 Riverbend Road Boulder, Colorado
HIGHEST AND BEST USE ANALYSIS
If a land value is being concluded, a highest and best
use analysis, “as though vacant” is required.
Analysis "As Improved"
Physically Possible Uses
The physically possible uses of the current structure include XXXX.
Legally Permissible Uses
Legally permissible uses of the current structure include XXXX.
Financially Feasible Uses
The financially feasible uses are those that would be expected to produce a positive
return. It is our opinion that XXXX uses would produce a positive return.
Maximally Productive Use
In our opinion, the maximally productive use of the subject site “as improved” would
be development with an XXXX related use/to continue with the current use. Also
discuss the most probable purchaser of the property (owner user, partial owner user,
or investor).
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4801 Riverbend Road Boulder, Colorado
ANALYSIS OF DATA
VALUATION METHODOLOGY
The three traditional approaches to value for improved properties are:
1.
Sales Comparison Approach - A comparison of the property
appraised with reasonably similar, recently conveyed properties
for which the price, terms and conditions of sale are known.
2.
Income Approach - The processing of a projected net income
into a valuation estimate via one or more capitalization
techniques.
3.
Cost Approach - An estimate of the replacement cost of all
structural improvements as if new, less loss in value attributable
to depreciation from all causes, plus the value of the land as if it
were vacant.
The sales comparison approach is founded on the principle of substitution, which holds
that the cost to acquire an equally desirable substitute property without undue delay
ordinarily sets the upper limit of value. At any given time, prices paid for comparable
properties are construed by many to reflect the value of the property appraised. The
validity of a value indication derived by this approach is heavily dependent on the
availability of data on recent sales of properties similar in location, size and utility to
the appraised property.
The income approach is based on the principle of anticipation, which recognizes the
present value of the future income benefits to be derived from ownership of a
property. The Income Approach is most applicable to properties that are bought and
sold for investment purposes, generally income-producing properties. This approach is
considered to be very reliable when the property being appraised was designed for or
is easily capable of producing a rental income and when adequate income and expense
data are available.
The cost approach is based on the premise that the value of a property can be
indicated by the current cost to construct a reproduction or replacement for the
improvements minus the amount of depreciation evident in the structures from all
causes plus the value of the land and entrepreneurial profit. This approach to value is
particularly useful for appraising new or nearly new improvements.
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4801 Riverbend Road Boulder, Colorado
The cost approach, sales comparison approach and income approach will be developed
for this assignment. The appraisal process concludes with a reconciliation and
correlation, which gives consideration to the type and reliability of market data used,
the applicability of each methodology developed, to the type of property appraised and
the type of value being sought.
Reminder to Appraiser - Explain why any approach is
not being developed.
Cost Approach
The cost approach considers the depreciated cost of replacing or constructing the
property in today’s market. Depreciation refers to a market-derived estimate and
must consider the physical and economic life of the property or component being
depreciated. For valuation purposes in this approach, the subject property is divided
in to land and improvements. The land value is estimated by the sales comparison
approach, and the improvements are valued by determining their depreciated
replacement cost. The two figures are added to derive a total property value estimate.
This approach to value is based on the replacement cost concept (principle of
substitution). From a buyer’s standpoint, the concept proposes that a property’s value
is no more than the cost of producing a substitute with equal utility. In applying this
concept, the cost approach assumes that time is not an important element in the
buyer’s decision that the buyer is able and willing to produce the substitute and that
land is available for this purpose. A major limitation of this approach, in addition to
the limitations implied by these assumptions, is the difficulty in determining the
amount of depreciation, especially in older properties.
The cost approach begins by estimating the value of the land as if it were vacant and
ready to be put to its highest and best use.
Land Value Analysis
Five methods can be used to estimate land value. The are the sale comparison
approach, the allocation method, the extraction method, the capitalization of ground
rent method and the land residual method. The sale comparison approach is preferred
when sufficient sales data are available for analysis.
The sales comparisons analysis is a process of comparing actual property sales. This
approach to value is premised on the principle of substitution, which holds that the
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4801 Riverbend Road Boulder, Colorado
value of a property that is replaceable in the market tends to be set by the cost of
acquiring an equally desirable substitute property. The principle also suggests that
when substitute properties are not available in the market, the reliability of the sales
comparison approach may be less than that of other approaches to value.
This analysis is based on gathering sales data about similar properties for comparison
to the subject property. Market derived adjustments for differences in relevant factors
can be extracted from the data and other market sales. The data are compared to the
subject based on date of sale, financial considerations associated with the transaction,
and physical characteristics.
SALES COMPARISON APPROACH
Our search of comparable sales data focused on recent land sales or sales purchased
with improvements that will be removed. The sales search included sales that closed
from XXXXX,XX,XXXX to present. The sales search geographic area was defined as
XXXXXXXXXXXXXXXXXX. Characteristics associated with the sale search included, site
size which ranged from xxxx to xxxx, zoning of xxxx and/or xxxxx, etc.
The appraiser is responsible to insure that the
comparable sales bracket the concluded value.
Otherwise, additional sales should be
considered.
The following table summarizes the land sales that are used in this analysis. This is
followed by a narrative discussion of each sale, analysis of the comparable sales, an
adjustment grid, and a land value conclusion. For this analysis the sales will be
analyzed based on the following units of comparison:
* price per square foot
as presented below. Detailed profile pages and a location map are included in the
addenda of the report.
Comparable Land Sales Summary
Sale
1
Location
3624 Walnut Street
Boulder
 2016 Sample Appraisals, Inc
Sale
Date
Size
(SF)
11/29/06
23,479
21
Zoning
Sale
Price
$/SF
$553,000
$23.55
4801 Riverbend Road Boulder, Colorado
2
3
4
Subject
2961 Broadway
Boulder
2685 28th Street
Boulder
2824 Broadway
Boulder
02/07/06
6,250
CB-E
$450,000
$72.00
08/11/04
58,371
R-E/CBE
$1,988,971
$34.07
05/05/04
9,375
HZE
$471,420
$50.28
18,250
TB-D
4801 Riverbend Road
Boulder
Comparable Land Sale 1 is a 23,479 square foot parcel. The site is located at 3624
Walnut Street in Boulder, Colorado. The seller was Fremont Trust and the buyer was
Giambrocco & Sons, LLC. The land sold on November 29, 2006 for $553,000, which is
equivalent to $23.55 per square foot.
The financing terms were cash to the seller.
The site is in a zoning district. It is in the raw land stage of development. The use at
the time of sale was vacant land and the proposed use is nusery/garden center. The
site was vacant, undeveloped land at the time of the sale. The buyer reported that
they purchased the property for the future development of a nursery/garden center;
however, the timing of the development has not been established. The buyer reported
that because of the lack of available land in Boulder, when this property became
available they purchased it because they eventually want a presence in Boulder. Mr.
Giambrocco indicated that it might be 2-3 years before they develop the site.
Comparable Land Sale 2 is a 6,250 square foot parcel. The site is located at 2961
Broadway in Boulder, Colorado. The seller was Fortune Frog, LLC and the buyer was
Catherine Chipman. The land sold on February 7, 2006 for $450,000, which is
equivalent to $72.00 per square foot.
The financing terms were cash to the seller.
The site is in a zoning district. It is in the annexed and zoned stage of development.
The use at the time of sale was vacant building and the proposed use is xx. This
property is located at the southwest corner of Broadway and Dellwood Avenue in
western Boulder. At the time of sale this property is was improved with a building
originally constructed in 1915. It has had some renovation over the years but was in
fair condition and vacant at the time of sale. THIS SALE WAS CONFIRMED BY
KATHERINE CHITMAN ON APPROX. APRIL 20, 2006. SHE REPORTED A SALE OF
$399,000 PLUS $350,000 IN REMODELING COSTS - AND IT WAS RECENTLY
APPRAISED AT $700,000. SHE STATED THERE WERE MULTIPLE BACK UP OFFERS AT
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4801 Riverbend Road Boulder, Colorado
$475,000. SOMETHING APPEARS ODD ABOUT THIS AND THESE STATEMENTS NEED
TO BE CHECKED MORE THOROUGHLY BEFORE USING THIS SALE!!!
Comparable Land Sale 3 is a 58,371 square foot parcel. The site is located at 2685
28th Street in Boulder, Colorado. The seller was 28th Street Properties, LLC and the
buyer was EWM Investments. The land sold on August 11, 2004 for $1,988,971,
which is equivalent to $34.07 per square foot.
The financing terms were cash to the seller.
The site is in a zoning district. It is in the all infrastructure completed stage of
development. The use at the time of sale was mobile home park and the proposed
use is mixed use development. This property, located on the west side of the 28th
street just south of the intersection of 28th Street and Valmont Road, was previously
a mobile home park. The proposed use was a mixed use development with residential,
storefront retail, and possible office. According to the listing broker the preliminary
plans include 30 residential loft units and approximately 20,000 square feet of
commercial space. The broker indicated that the commercial space will most likely be
retail space. As of December 2004, no plans have been submitted to the City of
Boulder for approval. The property is currently back on the market and listed for sale
for $3,150,000 or 53.97 per square foot.
Comparable Land Sale 4 is a 9,375 square foot parcel with 6,396 potential buildable
square feet of improvementwith 2 potential residential units. The site is located at
2824 Broadway in Boulder, Colorado. The seller was Stuart J. Herschleb and the
buyer was Landmark Condominiums, LLC. The land sold on May 5, 2004 for
$471,420, which is equivalent to $50.28 per square foot or $73.71 per potential
buildable square foot of improvement or $235,710 per unit.
The financing terms were $36,421 cash to the seller, with the seller carrying a note
of $434,999 at six percent interest, due in seven years.
None
The site is in a zoning district. It is in the annexed and zoned stage of development.
The use at the time of sale was office building and the proposed use is seven unit
condominium project. This property is located north of Boulder Memorial Hospital. It
was improved with an old house that had been used as offices and will be demolished
up redevelopment. At the time of this sale, the buyer was also negotiating to purchase
an adjacent parcel to the north that would result in a assemblage total of 28,125
square feet. The entire property will be developed with a condominium project known
as 1 Broadway Brownstones. These units will have asking sale prices that range from
approximately $1,075,000 to $1,325,000. Applying the figure of 7 units and 19,187
buildable square foot to the total project, the pro-rata share of units and buildable
area for this sale is approximately 2.3 units and 6,396 potential buildable square feet.
The demolition cost of the existing structure was not added to the sale price above.
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4801 Riverbend Road Boulder, Colorado
Sale Price Per Square Foot Analysis ($/SF)
The sales price per square foot is a physical unit of comparison. It is recognized that
dissimilarities in site size, shape, view, zoning, access, location, date of sale, and
other characteristics, may exist between the comparable sales and the subject
property. By analyzing the comparable sales and the variations in each, adjustments
for the dissimilarities can be derived. The following adjustments were applied for
this analysis.
Real Property Rights Conveyed
The property rights associated with each of the comparable sales are listed in the
table below. Where appropriate, the comparable sales were adjusted as indicated.
Comparable
Property Rights Conveyed
Sale
Indicated
Adjustment
1
fee simple estate
-0-
2
fee simple estate
-0-
3
fee simple estate
-0-
4
fee simple estate
-0-
ECONOMIC ADJUSTMENTS
Cash Equivalency. This adjustment takes into consideration financial factors
surrounding a transaction that would affect the purchase price. The most common
example is for seller-carried financing that is favorable to the buyer.
The cash equivalency adjustments that were applied in this analysis are summarized
in the table below. The details associated with the cash equivalency adjustments are
presented in the respective profile page.
Comparable Sale
Cash Equivalency Adjustment
1
$0
2
$0
3
$0
4
$0
The explanation, where applied, for the cash equivalency adjustment are as follows,
Comparable Sale 1:
The financing terms were cash to the seller.
Comparable Sale 2:
The financing terms were cash to the seller.
Comparable Sale 3:
The financing terms were cash to the seller.
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4801 Riverbend Road Boulder, Colorado
Comparable Sale 4:
The financing terms were $36,421 cash to the seller,
with the seller carrying a note of $434,999 at six
percent interest, due in seven years.
Conditions of Sale.
This adjustment reflects the motivations of the buyer and seller
that resulted in the transaction price being different than market value. For example
of a real estate broker purchases a property and reduces the price by five percent
instead of taking a real estate commission, the condition of sale adjustment would
reflect these circumstances.
The conditions of sale adjustment applied in this analysis are summarized in the
table below. The details associated with each adjustment are presented in the
respective profile page.
Comparable
Conditions of Sale Adjustment
Sale
1
$0
2
$0
3
$0
4
$0
Expenditures immediately after purchase. This adjustment takes into consideration
any capital investment or expenditures in the property immediately after purchase
that would affect the purchase price. An example is when a roof is replaced by the
buyer immediately after the purchase and the cost of the roof replacement affected
the purchase price.
Comparable Sale
Expenditures Immediately After
Purchase Adjustment
1
$0
2
$0
3
$0
4
$0
The explanation, where applied, for the expenditures immediately after purchase
adjustment are as follows,
Comparable Sale 4:
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4801 Riverbend Road Boulder, Colorado
Market Condition. This adjustment takes into consideration any change in value that
is a result of changing market conditions. As market’s improve, real estate values
have a tendency to increase, and as they deteriorate they have a tendency to
decrease. Imbalances in supply and demand will also influence the market value of
properties. This adjustment reflects the trend in real estate values for unimproved
sites in the time frame exhibited by the sales and the effective date of value.
The market condition adjustment that is applied in this analysis is 6.0 percent per
year.The magnitude of this adjustment is based on
xxxxxxxx.
The market
condition adjustments are summarized in the table below.
Comparable
Date of Sale
Market Condition Adjustment
1
11/29/06
3.52%
2
02/07/06
8.36%
3
08/11/04
8.97%
4
05/05/04
8.97%
Sale
PHYSICAL ADJUSTMENTS
Land Size. This adjustment takes into consideration any difference in value resulting
from the size of the comparable relative to the subject. Size also incorporates the
economic level of investment required to own a property. For example, there are
many market participants who would be willing and able to purchase a $500,000
property where as there is a more limited number of market participants who are
willing and able to acquire a ten million dollar property. Accordingly, the per unit
price of a large dollar investment is typically less than a smaller dollar investment.
Comparable
Land Size
Sale
Comparative
Price/GSF
Analysis
Adjustment
1
23,479
Similar
0%
2
6,250
Smaller
-10%
3
58,371
Larger
10%
4
9,375
Smaller
-10%
Subject
18,250
An explanation as to why each sale was adjusted and
an explanation of the magnitude of each adjustment
are appropriate for self-contained reports.
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4801 Riverbend Road Boulder, Colorado
Location/Access. The location/access adjustment is based on the neighborhood
influence of location and access. Locational influences that can affect value are
location in a planned industrial park rather than in a transitional neighborhood.
Access influences that can affect value are ease of access between the property and
the central business district, primary arterials, shopping, employment, etc.
Comparable
Comparative
Price/GSF
Sale
Analysis
Adjustment
1
Inferior
20%
2
Superior
-10%
3
Superior
-10%
4
Similar
0%
An explanation as to why each sale was adjusted and
an explanation of the magnitude of each adjustment
are appropriate for self-contained reports.
Zoning. The zoning associated with a land parcel provides guidance as to the types
and densities of uses that are allowed for the site. Generally, land that is zoned for
higher density commercial uses is of more value than land that is zoned for lower
density single-family residential use. This adjustment is intended to account for
discernable differences between the subject site's development potential and the
comparable's development potential.
Comparable
Zoning
Sale
1
Comparative
Price/GSF
Analysis
Adjustment
Similar
0%
2
CB-E
Superior
-5%
3
R-E/CB-E
Superior
-5%
4
HZE
Superior
-5%
Subject
TB-D
An explanation as to why each sale was adjusted and
an explanation of the magnitude of each adjustment
are appropriate for self-contained reports.
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4801 Riverbend Road Boulder, Colorado
Highest and Best Use. The highest and best use of a property includes the physical,
legal, and financial characteristics associated with a proprety. Generally when a
higher density can be developed there is more value per square foot of land area and
less value per buildable unit of comparison. It is important not to apply double
adjustments for zoning and highest and best use.
Comparable
Highest and Best Use
Sale
Comparative
Price/GSF
Analysis
Adjustment
1
Inferior
10%
2
Superior
-10%
3
Inferior
10%
4
Superior
-10%
Subject
An explanation as to why each sale was adjusted and
an explanation of the magnitude of each adjustment
are appropriate for self-contained reports.
Summary of Adjustments. A summary of the preceding adjustments and the
resulting adjusted sale prices per square foot is presented on the following page.
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4801 Riverbend Road Boulder, Colorado
Land Sales Adjustment Grid
Price Per Square Foot Analysis
Subject
Sale 1
Sale 2
Sale 3
Sale 4
Address
4801
Riverbend
Road
3624
Walnut
Street
2961
Broadway
2685 28th
Street
2824
Broadway
City
Boulder
Boulder
Boulder
Boulder
Boulder
Sale Date
11/29/06
02/07/06
08/11/04
05/05/04
Sale Price
$553,000
$450,000
$1,988,971
$471,420
$/GSF
$23.55
$72.00
$34.07
$50.28
$0
$0
$0
$0
ECONOMIC ADJUSTMENTS
Cash Equivalency Adjustment
Conditions of Sale
$0
Expenditures After Purchase
$0
$0
$0
$0
Adjusted Sales Price
$553,000
$450,000
$1,988,971
$471,420
Adjusted $/GSF
$23.55
$72.00
$34.07
$50.28
Market Condition
3.52%
8.36%
8.97%
8.97%
Economically Adjusted $/GSF
$24.38
$78.02
$37.13
$54.79
23,479
Similar
0%
6,250
Smaller
-10%
58,371
Larger
10%
9,375
Smaller
-10%
Inferior
20%
Superior
-10%
Superior
-10%
Similar
0%
Similar
0%
CB-E
Superior
-5%
R-E/CB-E
Superior
-5%
HZE
Superior
-5%
Highest and Best Use
Comparison
Adjustment
Inferior
10%
Superior
-10%
Inferior
10%
Superior
-10%
Overall Comparability
Inferior
Superior
Inferior
Superior
Net Adjustment
30%
-35%
5%
-25%
Adjusted $/GSF
$31.69
$50.71
$38.99
$41.09
 2016 Sample Appraisals, Inc
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PHYSICAL ADJUSTMENTS
Land Size
Comparison
Adjustment
18,250
Location/Access
Comparison
Adjustment
Zoning
Comparison
Adjustment
TB-D
4801 Riverbend Road Boulder, Colorado
Value Conclusion
Price Per Square Foot Analysis
After adjusting for cash equivalency, conditions of sale, expenditures immediately after
purchase, market conditions, and physical and financial characteristics, the net
adjustments applied to the comparable sales are summarized as follows
Sales with net upward adjustments:
Sale
Unit of Comparison
Adjustment
1
$31.69 per SF
30%
3
$38.99 per SF
5%
Sales with no net adjustments:
Sale
Unit of Comparison
Adjustment
Sales with net downward adjustments:
Sale
Unit of Comparison
Adjustment
2
$50.71 per SF
-35%
4
$41.09 per SF
-25%
It is our opinion that the following sales are considered to be properties that are most
similar to the subject property and the best indicators of value.
Sale
Adjusted Price Per Square Foot
3
$38.99
4
$41.09
We concluded with a value range of $35.00 to $45.00 per square foot.
Estimated Value Range per Square Foot of Land Area
$35.00 per square foot
X
18,250
square feet
=
$640,000
$45.00 per square foot
X
18,250
square feet
=
$820,000
Reminder to Appraiser
1.
The appraiser is required to explain the thinking associated with
all data that does not fit the pattern, for example,
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4801 Riverbend Road Boulder, Colorado
Sale
1
2
3
4
Adjusted Sale Price
$50
$55
$45
$55
Net Adjustment
=
+
+
Sale 4 does not fit the pattern. An explanation as to how Sale 4
relates to the value opinion is required.
2.
If there is a broad range of adjusted sale prices per square foot,
or it is not obvious why the selected best comparables are the best,
explain why these comparables were selected as the best indicators of
value.
3.
If property has sold in the past three years, discuss the difference
between the concluded value and the sales price of the last sale.
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4801 Riverbend Road Boulder, Colorado
Replacement Cost New
Replacement cost is defined as "the estimated cost to construct, at current prices
as of the effective appraisal date, a building with utility equivalent to the building
being appraised, using modern materials and current standards, design, and
layout." Source: The Dictionary of Real Estate Appraisal, Fourth Edition, Appraisal Institute, Chicago, Illinois,
2002, p. 244.
In the case of the subject property, the appraisers have utilized the Marshall Valuation
Service, a nationally recognized cost-estimating service as actual cost data for the
subject property was not available.
Building Improvements
We have relied on the Marshall Valuation Service manual to estimate replacement cost
new. In our opinion, the subject project is a Class B - top 10 to 50 percent of the
market office building of average quality. Cost factors included in the base cost are
direct and indirect development costs, as well as architect fees, interest on interim
development loans, contractor overhead and profit. The base cost indicated for such a
facility from Section 15, Page 15 of the Marshall Valuation Service cost manual, before
local and current cost multipliers, is $95.00 per square foot.
Cost Multipliers
The cost multipliers relied on for this appraisal come from Section 99 in the Marshall
Valuation Service cost manual. The current cost multipliers and local multipliers are
intended to bring the base cost estimate up-to-date as of the effective date of value.
Based on the multipliers from Section 99, Pages 3 and 7, we have relied on a current
cost multiplier of 1.02 and a local multiplier of 0.99.
Adjusted Base Cost
Based on the preceding estimated base cost for the subject and the application of the
current cost and local multipliers, the indicated adjusted base cost for analysis
purposes is $98.22 per square foot.
Site Improvements
The cost of site improvements associated with the subject property include the paving
costs (parking lot, sidewalks, and driveways) and landscaping. In Section 66, Marshall
Valuation Service estimates the paving costs at $3.25 per square foot and landscaping
costs at $2.50 per square foot. After applying the local and current cost multipliers
 2016 Sample Appraisals, Inc
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4801 Riverbend Road Boulder, Colorado
estimated previously, the adjusted paving cost is $3.28 per square foot and the
adjusted landscaping cost is $2.53 per square foot. The paving area is 5,650 square
feet and the landscaping area is 8,500 square feet, resulting in total costs of $18,532
for paving and $21,505 for landscaping.
Total Land Area
Building Footprint
Landscape Area
Parking, Sidewalks, and Driveways Area
Total of Components
Unaccounted Square Footage
18,250
4,100
8,500
5,650
18,250
0
Based on the preceding, the total estimated site improvements, including the parking
area, landscaping, and building costs, are $657,448.
Additional Soft Costs
Marshall Valuation Service does not include all indirect or soft costs associated with
real estate projects. Specific line item costs not accounted for in the Marshall
Valuation Service base cost estimate include appraisal fees, feasibility studies, legal
fees, environmental studies, finance costs other than interest on construction loans,
development impact fees, traffic impact studies, and off-site development costs. For
our analysis, we have estimated total other soft costs at $150,000.
Entrepreneurial Profit
Entrepreneurial profit is a market-derived estimate that represents the amount an
entrepreneur expects to receive in addition to the cost to develop, and it reflects the
difference between the development cost and the market value. This profit represents
the motivation for a developer to undertake a development for investment purposes.
We have estimated the entrepreneurial profit for the subject property at 10 percent,
or $80,745.
Replacement Cost New Summary
Building Hard Costs
Landscaping – Total Cost
Paving – Total Cost
Total Hard Costs
Soft Costs
Soft Costs Percent of Hard Costs
Total Hard and Soft Costs
Entrepreneurial Profit
Replacement Cost New
Accrued Depreciation Estimate
 2016 Sample Appraisals, Inc
33
$617,411
$21,505
$18,532
$657,448
$150,000
22.8
$807,448
$80,745
$888,193
4801 Riverbend Road Boulder, Colorado
Accrued depreciation is defined as "the difference between the reproduction or
replacement cost of the improvements on the effective date of the appraisal and the
market value of the improvements on the same date." Source: The Dictionary of Real Estate
Appraisal, Fourth Edition, Appraisal Institute, Chicago, Illinois, 2002, p. 4. Depreciation is a loss in value
resulting from several influences: (1) curable and incurable physical deterioration, (2)
curable and incurable functional obsolescence and (3) economic or external
obsolescence. In deriving a value estimate for the subject via the Cost Approach, this
loss in value must be subtracted from the replacement cost new for the
improvements.
Curable Physical Deterioration
Curable physical deterioration is defined as a loss in value from the cost new that can
be recovered or offset through correction, repair or replacement of the defective item
causing the loss, providing that the resultant value increase approximates the cost of
the work. We have estimated $0 in curable physical deterioration for the subject
property based on our inspection and estimates of deferred maintenance.
Incurable Physical Deterioration
Incurable physical deterioration is defined as the loss from cost new that is not
possible to offset or that would involve an expenditure substantially in excess of the
value increase caused by the expenditure. For the subject property, we have used the
age-life depreciation estimate to estimate the depreciation associated with incurable
deterioration. The depreciation percentage is assumed to be applicable to the entire
structure. The physical condition of the subject property is average and the actual age
is 24 years. Based on our inspection of the property, we estimate an aggregate
effective age at 15 years. Based on the Marshall Valuation Service building life tables
in Section 97, we estimate the economic life at 50 years, which results in a total
depreciation of 30.0 percent for the analysis.
We have also considered the Marshall Valuation Depreciation of 24.0 percent, and
concluded with a depreciation estimate of 30.0 percent. This equates to total incurable
depreciation of $266,458, and a total physical depreciation of $266,458.
Age-Life Depreciation
Section
Page
Category
Life Expectancy
Actual Age
Effective Age
Age-Life Percent Depreciated
Marshall Valuation
Depreciation
 2016 Sample Appraisals, Inc
34
98
2
Office
50
24
15
30%
4801 Riverbend Road Boulder, Colorado
Section
Page
Depreciation Percentage
98
3
24%
Average of Age-Life and Marshall
Concluded Depreciation
Percentage
Deferred Maintenance
Incurable Physical Depreciation
Total Physical Depreciation
27.00%
30.00%
$0
$266,458
$266,458
Functional Obsolescence
In addition to physical deterioration, functional obsolescence must be considered for
the subject. Functional obsolescence is the result of a poor floor plan, inadequate
mechanical equipment or functional inadequacy or superadequacy due to size or other
characteristics. Curable functional obsolescence is when an item's condition is
corrected and the value of the improvement is increased by more than the cost of the
cure. Incurable functional obsolescence is "a defect caused by a deficiency or
superadequacy in the structure, materials, or design, which cannot be practically or
economically corrected." Source: The Dictionary of Real Estate Appraisal, Fourth Edition, Appraisal
Institute, Chicago, Illinois, 2002, p. 282. In our opinion the subject property does not suffer from
functional obsolescence.
External Obsolescence
External obsolescence is caused by conditions outside the property such as insufficient
economic demand, changing property uses in the area or overall economic conditions.
It is the result of the diminished utility of the structure due to negative influences from
outside the site. We have estimated the subject property’s external obsolescence in
the amount of $200,000.
 2016 Sample Appraisals, Inc
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4801 Riverbend Road Boulder, Colorado
Value Conclusion - Cost Approach
The estimate of market value for the subject property, via the Cost Approach, is
summarized in the following chart:
Building
Basement
Mezzanine
Canopies
Balconies
Atrium/Vestibule
Structured Parking
Mechanical Penthouse
Elevators
Landscape Area
Parking, Sidewalks, Driveways
Soft Costs
Total Hard and Soft Costs
Entrepreneurial Profit
Total Replacement Cost New
Square Feet
6,286
0
0
0
0
0
0
0
0
8,500
5,650
Less Accrued Depreciation
Curable Physical
Depreciation
Incurable Physical
Depreciation
Functional Obsolescence
External Obsolescence
Total Accrued Depreciation
$ Per SF or Item
$98.22
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0
$2.53
$3.28
Total
$617,411
$0
$0
$0
$0
$0
$0
$0
$0
$21,505
$18,532
$150,000
$807,448
$80,745
$888,193
$0
$266,458
$0
$200,000
$466,458
Depreciated Replacement Cost
$421,735
Range
$700,000 - $750,000
$421,735
Land Value from Analysis
Plus Depreciated Replacement
Cost
Cost Approach Conclusion
(Rounded)
 2016 Sample Appraisals, Inc
$1,120,000 - $1,170,000
36
4801 Riverbend Road Boulder, Colorado
SALES COMPARISON APPROACH
The Sales Comparison Approach is premised on the principle of substitution, a
valuation principle that states that a prudent purchaser would pay no more for real
property than the cost to acquire an equally desirable substitute on the open market.
The principle of substitution presumes that the purchaser will consider the alternatives
available, that the purchaser will act rationally or prudently on the basis of the
information about the alternatives, and that time is not a significant factor.
Substitution may assume the form of the purchase of an existing property with the
same utility or of acquiring an investment that will produce an income stream of the
same size with the same risk as that involved in the property in question.
The search for sales comparables that were analyzed in this appraisal included the
following sources:
[XXCoStar Comps, Exceligent, Metrolist,
MyMLS].
The search criteria included closed sale transactions with geographic
boundaries of
[XX], a size range of [XX] to [XX], and year of construction
ranging from
[XX] to [XX].
The primary focus was for office improvements.
COMPARABLE SALES SUMMARY
Improved Property Sales Summary
Sale
1
2
3
Location
5387 Manhattan Circle
Boulder
4747 Table Mesa Drive
Boulder
4810 Riverbend Road
Boulder
3035 Center Green
4
Drive
Boulder
5
Subject
4895 Riverbend Road
Boulder
4801 Riverbend Road
Boulder
Sale
Date
Size
(SF)
YOC
Land to
Building
Ratio
Occupancy
Sale Price
$/GSF
03/20/0
6
17,328
1994
1.9:1
100 %
$3,400,000
$196.2
1
02/08/0
6
14,423
1984
2.2:1
0%
$1,850,000
$128.2
7
10/05/0
5
5,568
1978
3.3:1
100 %
$1,101,665
$197.8
6
06/14/0
5
32,253
1981
1.6:1
0%
$4,408,000
$136.6
7
06/02/0
5
6,163
1978
3.0:1
100 %
$960,000
$155.7
7
06/16/0
7
6,286
1984
2.9:1
92 %
Comparable Sale 1 is a 17,328 square foot low-rise office property located at 5387
Manhattan Circle in Boulder, Colorado. The property sold on March 20, 2006 for
$3,400,000 which is equivalent to $196.21 per square foot. The buyer was PV
 2016 Sample Appraisals, Inc
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4801 Riverbend Road Boulder, Colorado
Apartments, Ltd. and the seller was 5387 Manhattan Circle, LLC. The sale was from
an investor to an investor.
The financing terms were a down payment of $2,200,000 with the balance financed
by Wells Fargo Bank at market rates.
The overall capitalization rate was 6.0 percent. The property is located in a small
office enclave with visibility from Highway 36; however, access is off of Table Mesa
Drive. The seller reported that the property sold based on an overall capitalization
rate of 6.0 percent, indicating net operating income of $204,000.
Comparable Sale 1 has one building on the site with 2 stories. The quality of the
improvements is good and the overall condition is good. The exterior is made of
brick. There are a total of 58 off street parking spaces for a parking ratio of 299
square feet of gross building area per parking space.
Comparable Sale 2 is a 14,423 square foot low-rise office property located at 4747
Table Mesa Drive in Boulder, Colorado. The property sold on February 8, 2006 for
$1,850,000 which is equivalent to $128.27 per square foot. The buyer was Table
Mesa Partners, LLC and the seller was Moorhead Partnership. The sale was from an
investor owner to an owner user.
The financing terms were cash to the seller.
The overall capitalization rate was 8.3 percent. The property was vacant at the time
of the sale and was purchased primarily for owner-occupancy. The buyer occupies
the second floor and leases the first floor to a single-tenant. The lease was signed at
approximately the time of the sale and was a five-year lease with a first year rental
rate of $12 per square foot, triple net. Management fees and reserves for
replacement are excluded from the operating expenses paid by the tenant.
Comparable Sale 2 has one building on the site with 2 stories. The quality of the
improvements is average and the overall condition is average. The exterior is made
of brick. There are a total of 41 off street parking spaces for a parking ratio of 352
square feet of gross building area per parking space.
Comparable Sale 3 is a 5,568 square foot low-rise office property located at 4810
Riverbend Road in Boulder, Colorado. The property sold on October 5, 2005 for
$1,100,000 which is equivalent to $197.56 per square foot. The buyer was Kalthoff
Family Revocable Trust and the seller was Troost, LLC. The sale was from an
investor to an investor.
 2016 Sample Appraisals, Inc
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4801 Riverbend Road Boulder, Colorado
The financing terms were cash to the seller. A conditions of sale adjustment in the
amount of $666 was applied.
The buyer was crazy. The buyer painted the
property orange and blue. Based on the preceding, an expenditure after sale
adjustment in the amount of $999 was applied. The adjusted sale price was
$1,101,665 or $197.86 per square foot.
The overall capitalization rate was 4.8 percent. The property is located within the
Riverbend Office Park, which is located at the northeast corner of Arapahoe Avenue
and 48th Street. The building reportedly sold based on an overall capitalization rate
of 4.8 percent, which equates to net operating income at the time of the sale of
$52,800, or $9.48 per square foot. The building was 100 percent leased at the time
of the sale and sold within 30 days of going on the market.
Comparable Sale 3 has one building on the site with 3 stories. The quality of the
improvements is average and the overall condition is good. The exterior is made of
wood. There are a total of 20 off street parking spaces for a parking ratio of 278
square feet of gross building area per parking space.
Comparable Sale 4 is a 32,253 square foot office property known as Center Green
Office Park located at 3035 Center Green Drive in Boulder, Colorado. The property
sold on June 14, 2005 for $4,408,000 which is equivalent to $136.67 per square
foot. The buyer was State Higher Education Policy Center and the seller was RS
Center Green Drive, LP. The sale was from an investor owner to an owner user.
The financing terms were cash to the seller.
The overall capitalization rate was percent. The property is located in a small office
enclave in the city of Boulder, approximately one block west of Foothills Parkway to
the north of Valmont Street. The building was purchased for owner-occupancy.
Comparable Sale 4 has one building on the site with 2 stories. The quality of the
improvements is average and the overall condition is average. The exterior is made
of combination. There are a total of 102 off street parking spaces for a parking ratio
of 316 square feet of gross building area per parking space.
Comparable Sale 5 is a 6,163 square foot office property located at 4895 Riverbend
Road in Boulder, Colorado. The property sold on June 2, 2005 for $960,000 which is
equivalent to $155.77 per square foot. The buyer was 4895 Riverbend Road, LLC and
the seller was Jadison, LLC. The sale was from an investor to an investor.
The financing terms were a down payment of $67,500, with the balance financed at
market rates.
 2016 Sample Appraisals, Inc
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4801 Riverbend Road Boulder, Colorado
The overall capitalization rate was 5.4 percent. The property is located within the
Riverbend Office Park, which is located at the northeast corner of Arapahoe Avenue
and 48th Street. The building is a multi-tenant office building that was 100 percent
leased at the time of the sale. The building is currently on the market listed for sale
for $1,150,000, or $186.60 per square foot. The asking rental rate for vacant space
in the building is $9.75 per square foot, triple net. For the extrapolation of an overall
capitalization rate we have assumed an average rental rate of $9.75 per square foot,
a vacancy and collection factor of 7.0 percent, management fees of 4.0 percent and
a reserves for replacement of $0.25 per square foot. Based on the preceding
assumptions, the indicated overall capitalization rate for the sale is 5.4 percent.
Comparable Sale 5 has one building on the site with one story. The quality of the
improvements is average and the overall condition is good. The exterior is made of
wood. There are a total of 19 off street parking spaces for a parking ratio of 324
square feet of gross building area per parking space.
Sale Price Per Square Foot Analysis ($/SF)
The sales price per square foot is a physical unit of comparison. It is recognized that
dissimilarities in , and other characteristics, may exist between the comparable sales
and the subject property. By analyzing the comparable sales and the variations in
each, adjustments for the dissimilarities can be derived.
Adjustments based on physical characteristics and external or economic factors were
considered. According to standard appraisal guidelines, economic or external
adjustments must be made prior to adjusting the comparables for physical
characteristics. Therefore, adjustments for cash equivalency and market condition,
also known as date of sale or time, will be discussed first, followed by discussions of
the adjustments for physical characteristics.
Real Property Rights Conveyed
The property rights associated with each of the comparable sales are listed in the
table below. Where appropriate, the comparable sales were adjusted as indicated.
Comparable
Property Rights Conveyed
Sale
1
Indicated
Adjustment
fee
simple
with
market
rate
-0-
lease(s)
2
fee simple estate
-0-
3
fee simple estate
-0-
4
fee simple estate
5
fee
 2016 Sample Appraisals, Inc
simple
-0-
with
40
market
rate
-0-
4801 Riverbend Road Boulder, Colorado
lease(s)
ECONOMIC ADJUSTMENTS
Cash Equivalency. This adjustment takes into consideration financial factors
surrounding a transaction that would affect the purchase price. The most common
example is for seller-carried financing that is favorable to the buyer.
The cash equivalency adjustments that were applied in this analysis are summarized
in the table below. The details associated with each adjustment are presented in the
respective profile page.
Comparable
Sale
Conditions of Sale.
Cash Equivalency Adjustment
1
$0
2
$0
3
$0
4
$0
5
$0
This adjustment reflects the motivations of the buyer and seller
that resulted in the transaction price being different than market value. For example
of a real estate broker purchases a property and reduces the price by five percent
instead of taking a real estate commission, the condition of sale adjustment would
reflect these circumstances.
The conditions of sale adjustment applied in this analysis are summarized in the
table below. The details associated with each adjustment are presented in the
respective profile page.
Comparable Sale
Conditions of Sale Adjustment
1
$0
2
$0
3
$666
4
$0
5
$0
Expenditures made immediately after purchase. This adjustment takes into
consideration any non-financial factors surrounding a transaction that would affect
the purchase price. An example is for deferred maintenance costs incurred by the
buyer immediately after the purchase, or cost of demolishing the improvement.
Another example could be the replacement of mechanical equipment, or resealing
the parking lot.
 2016 Sample Appraisals, Inc
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4801 Riverbend Road Boulder, Colorado
The expenditures made immediately after purchase adjustment applied in this
analysis are summarized in the table below. The details associated with each
adjustment are presented in the respective profile page.
Comparable
Expenditures immediately after
Sale
purchase
1
$0
2
$0
3
$999
4
$0
5
$0
Market Condition. This adjustment takes into consideration any change in value that
is a result of changing market conditions. As markets improve, real estate values
have a tendency to increase, and as they deteriorate they have a tendency to
decrease. Imbalances in supply and demand will also influence the market value of
properties. This adjustment reflects the trend in real estate values for office
properties in the time frame exhibited by the sales and the effective date of value.
The market condition adjustment that is applied in this analysis is 6.0 percent per
year. The magnitude of this adjustment is based on
[xxxx].
The market condition adjustments are summarized in the table below.
Comparable
Date of Sale
Market Condition Adjustment
1
03/20/06
7.69%
2
02/08/06
8.34%
3
10/05/05
8.97%
4
06/14/05
8.97%
5
06/02/05
8.97%
Sale
PHYSICAL ADJUSTMENTS
Age / Condition.
This adjustment takes into consideration the difference in value
attributable to the overall age and condition of the improvements.
Comparable
Age / Condition
Sale
Comparative
Price/SF
Analysis
Adjustment
-5%
1
1994 / good
Superior
2
1984 / average
Similar
0%
3
1978 / good
Superior
-5%
4
1981 / average
Similar
0%
5
1978 / good
Superior
-5%
Subject
1984 / average
 2016 Sample Appraisals, Inc
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4801 Riverbend Road Boulder, Colorado
Size (GSF).
This adjustment takes into consideration any difference in value
resulting from the size of the comparable relative to the subject. Sometimes, a
smaller property has more value on a per-square foot basis than will a larger
property. Size also incorporates the economic level of investment required to own a
property. For example, there are many market participants who would be willing and
able to purchase a $500,000 property whereas there is a more limited number of
market participants who are willing and able to acquire a multi-million dollar
property. Accordingly, the per unit price of a large dollar investment is typically less
than a smaller dollar investment.
Comparable
Size (GSF)
Comparative
Price/SF
Analysis
Adjustment
Sale
1
17,328
Larger
5%
2
14,423
Larger
5%
3
5,568
Similar
0%
4
32,253
Larger
10%
5
6,163
Similar
0%
Subject
6,286
SF of GBA Per Parking Space.
This adjustment accounts for the square feet of
parking area per parking space. The smaller the number implies more parking for the
occupants and the larger the number implies less parking.
Comparable
SF of GBA Per Parking Space
Comparative
Price/SF
Analysis
Adjustment
Sale
1
299
Similar
0%
2
352
Similar
0%
3
278
Similar
0%
4
316
Similar
0%
5
324
Similar
0%
Subject
225
L:B Ratio. This is a ratio of the land area of the property divided by the building size.
The more land associated with a property, the higher the land-to-building ratio. A
higher land to building ratio often results in a higher per-square foot or per-unit
value because it provides more land area in relation to the building for potential
parking, open space, storage, or other uses.
Comparable
L:B Ratio
Sale
Comparative
Price/SF
Analysis
Adjustment
1
1.9
Superior
-10%
2
2.2
Similar
0%
3
3.3
Similar
0%
4
1.6
Superior
-10%
5
3.0
Similar
0%
Subject
2.9
 2016 Sample Appraisals, Inc
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4801 Riverbend Road Boulder, Colorado
Location.
The location adjustment is based on the neighborhood influence and
location influences of visibility and access. Locational factors that can affect value
include proximity to transportation, employment, and other community services as
well as the overall appeal of surrounding properties. It also considers the overall
visibility of the site from surrounding streets as well as site's ingress and/or egress.
Comparable
Comparative
Price/SF
Sale
Analysis
Adjustment
1
Similar
0%
2
Similar
0%
3
Similar
0%
4
Similar
0%
5
Similar
0%
Quality. This adjustment takes into consideration the difference in value attributable
to the quality of the improvements.
Comparable
Quality
Sale
Comparative
Price/SF
Analysis
Adjustment
1
good
Similar
0%
2
average
Inferior
15%
3
average
Similar
0%
4
average
Similar
0%
5
average
Similar
0%
Subject
average
Summary of Adjustments. A summary of the preceding adjustments and the
resulting adjusted sale prices per square foot is presented on the following page.
 2016 Sample Appraisals, Inc
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4801 Riverbend Road Boulder, Colorado
Office Sales Adjustment Grid
Price Per Gross Square Foot Analysis
Subject
Sale 1
Sale 2
Sale 3
Sale 4
Sale 5
4895
Riverbend
Road
Address
4801
Riverbend
Road
5387
Manhattan
Circle
4747 Table
Mesa Drive
4810
Riverbend
Road
3035
Center
Green
Drive
City
Boulder
Boulder
Boulder
Boulder
Boulder
Boulder
Sale Date
03/20/06
02/08/06
10/05/05
06/14/05
06/02/05
Sale Price
$3,400,000
$1,850,000
$1,100,000
$4,408,000
$960,000
$/GSF
$196.21
$128.27
$197.56
$136.67
$155.77
Cash Equivalency Adjustment
$0
$0
$0
$0
$0
Conditions of Sale
Adjustment
$0
$0
$666
$0
$0
Expenditures After Purchase
$0
$0
$999
$0
$0
Adjusted Sales Price
$3,400,000
$1,850,000
$1,101,665
$4,408,000
$960,000
Adjusted $/GSF
$196.21
$128.27
$197.86
$136.67
$155.77
Market Condition
7.69%
8.34%
8.97%
8.97%
8.97%
Economically Adjusted $/GSF
$211.30
$138.96
$215.61
$148.93
$169.74
ECONOMIC ADJUSTMENTS
PHYSICAL ADJUSTMENTS
Age / Condition
Comparison
Adjustment
1984 /
average
1994 /
good
Superior
-5%
1984 /
average
Similar
0%
1978 /
good
Superior
-5%
1981 /
average
Similar
0%
1978 /
good
Superior
-5%
Size (GSF)
Comparison
Adjustment
6,286
17,328
Larger
5%
14,423
Larger
5%
5,568
Similar
0%
32,253
Larger
10%
6,163
Similar
0%
SF of GBA Per Parking Space
Comparison
Adjustment
225
299
Similar
0%
352
Similar
0%
278
Similar
0%
316
Similar
0%
324
Similar
0%
L:B Ratio
Comparison
Adjustment
2.9
1.9
Superior
-10%
2.2
Similar
0%
3.3
Similar
0%
1.6
Superior
-10%
3.0
Similar
0%
Similar
0%
Similar
0%
Similar
0%
Similar
0%
Similar
0%
good
Similar
0%
average
Inferior
15%
average
Similar
0%
average
Similar
0%
average
Similar
0%
Overall Comparability
Superior
Inferior
Superior
Similar
Superior
Net Adjustment
-10%
20%
-5%
0%
-5%
Adjusted $/GSF
$190.17
$166.75
$204.83
$148.93
$161.25
Location
Comparison
Adjustment
Quality
Comparison
Adjustment
average
 2016 Sample Appraisals, Inc
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4801 Riverbend Road Boulder, Colorado
Value Conclusion – Sale Price per Square Foot Analysis
After adjusting for cash and non-cash equivalency items and market conditions, the
net qualitative adjustments applied to the comparable sales are as follows:
Sales with net upward adjustments:
Sale
2
Unit of Comparison
Adjustment
$166.75 per SF
20%
Sales with no net adjustments:
Sale
Unit of Comparison
4
Adjustment
$148.93 per SF
0%
Sales with net upward adjustments:
Sale
Unit of Comparison
Adjustment
1
$190.17 per SF
-10%
3
$204.83 per SF
-5%
5
$161.25 per SF
-5%
It is our opinion that the following sales are considered to be properties that are most
similar to the subject property and the best indicators of value.
Sale
Adjusted Sale Price Per Square Foot
1
$190.17
2
$166.75
3
$204.83
We have concluded with a value range of $170.00 to $190.00 per square foot. This
results in a rounded value range as follows:
Estimated Value Range via Price per Square Foot Analysis
$170.00
per SF
X
6,286
GSF
=
$1,070,000
$190.00
per SF
X
6,286
GSF
=
$1,190,000
Analysis of Net Operating Income per Square Foot
An additional method of analyzing the comparable sales involves the comparison of the
subject’s estimated net operating income (NOI) per rentable square foot with that of
 2016 Sample Appraisals, Inc
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4801 Riverbend Road Boulder, Colorado
the comparable sales. The first step in this method is to compare the subject’s
estimated NOI per rentable square foot to that of each of the comparable sales. This
results in a positive or negative percentage difference, which is then multiplied by the
sale price per square foot of each of the comparable sales to determine an adjusted
per square foot sale price for the subject. In theory, all adjustment factors typically
used in a sales comparison analysis such as location, age/condition, amenities, etc.,
should be already accounted for by the different rental rates and to some extent, the
operating expenses. The following table summarizes this method.
Sale
NOI/SF
1
2
3
5
Subject
$11.77
$10.69
$9.48
$8.45
$12.57
Office Sales Adjustment Grid
NOI/SF Analysis
%Difference
Price/SF
102%
112%
126%
142%
$196.21
$128.27
$197.86
$155.77
Indicated
Price/SF
$200.13
$143.66
$249.30
$221.19
Based on this analysis, the concluded value range is $175.00 to $195.00 per square
foot. This equates to a rounded value range as follows:
Estimated Value Range via NOI per Square Foot Analysis
$175.00
per SF
X
6,286
NRSF
=
$1,100,000
$195.00
per SF
X
6,286
NRSF
=
$1,230,000
Conclusion
The following is a summary of the methods applied in the sales comparison approach
and our final estimate of value from this approach.
Opinion of Value Based on the Sales Comparison
Approach
$1,100,000 - $1,200,000
 2016 Sample Appraisals, Inc
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4801 Riverbend Road Boulder, Colorado
INCOME APPROACH
The income approach is a process of estimating the value of real estate based on the
principle that the value is directly related to the present value of all future net income
attributable to the property. The value of the real property therefore is derived by
analyzing net income either by direct capitalization or a discounted cash flow analysis.
Regardless of the capitalization technique employed, a reasonable net operating
income must be estimated based on the best available market data. The derivation of
this estimate requires the appraisers to (1) project potential gross income (PGI) based
on a comparison of the subject to competing properties, (2) project income loss from
vacancy and collection loss based primarily on supply and demand relationships in the
subject's market, (3) calculate effective gross income (EGI) by subtracting the vacancy
and collection income loss from PGI, (4) project the operating expenses associated
with the production of the income stream by comparison of the subject to similar
competing properties and (5) calculate net operating income (NOI) by subtracting the
operating expenses from EGI.
For the purposes of this analysis, we will be using the direct capitalization method to
estimate the value of the subject property.
Market Rental Analysis
Our market analysis involved the search for current lease rates and concessions of
office buildings between
between
xxx
xxx and xxx.
search area.
units and
xxx
units, and years of construction
Our geographic search area included
xxx describe
The information analyzed is indicative of the current market.
The following table summarizes the comparable rentals used in our analysis. Detailed
profile pages and a map showing the location of these rentals may be found in the
addenda.
Comparable Rentals Summary
Rental
Address
Gross
Leasable
Area
(SF)
1
4895
Riverbend
Road
6,163
75 %
3.0:1
1978
$9.50
triple net
5,568
60 %
2.8:1
1978
$9.50
triple net
Occupancy
L:B
Ratio
YOC
Rent/
SF
Expense
Terms
Boulder
2
4810
Riverbend
Road
Boulder
 2016 Sample Appraisals, Inc
48
4801 Riverbend Road Boulder, Colorado
3
4800
Riverbend
Road
5,700
0%
3.0:1
1978
$13.00
triple net
5,484
65 %
3.6:1
1977
$14.75
triple net
14,474
100 %
4.5:1
1995
$16.95
triple net
6,286
%
2.9:1
1984
Boulder
4
4840
Riverbend
Road
Boulder
5
4855 &
4865
Riverbend
Road
Boulder
Subject
4801
Riverbend
Road
Boulder
Comparable Rental 1 is a 1 story office building located at 4895 Riverbend Road in
Boulder, Colorado. It was constructed in 1978. Rental 1 has 6,163 gross square feet.
The occupancy rate is 75 percent. The land to building ratio is 3.0:1. The lease rate
is based on $9.50 per square foot, with a typical lease term of three years. Space is
leased on the basis of triple net expenses.
Comparable Rental 2 is a 3 story office building located at 4810 Riverbend Road in
Boulder, Colorado. It was constructed in 1978. Rental 2 has 5,568 gross square feet.
The occupancy rate is 60 percent. The land to building ratio is 2.8:1. The lease rate
is based on $9.50 per square foot, with a typical lease term of three years. Space is
leased on the basis of triple net expenses.
Comparable Rental 3 is a 2 story office building located at 4800 Riverbend Road in
Boulder, Colorado. It was constructed in 1978. Rental 3 has 5,700 gross square feet.
The occupancy rate is 0 percent. The land to building ratio is 3.0:1. The lease rate is
based on $13.00 per square foot, with a typical lease term of three years. Space is
leased on the basis of triple net expenses.
Comparable Rental 4 is a 2 story office building located at 4840 Riverbend Road in
Boulder, Colorado. It was constructed in 1977. Rental 4 has 5,484 gross square feet.
The occupancy rate is 65 percent. The land to building ratio is 3.6:1. The lease rate
is based on $14.75 per square foot, with a typical lease term of three years. Space is
leased on the basis of triple net expenses.
Comparable Rental 5 is a 2 story office building located at 4855 & 4865 Riverbend
Road in Boulder, Colorado. It was constructed in 1995. Rental 5 has 14,474 gross
square feet. The occupancy rate is 100 percent. The land to building ratio is 4.5:1.
The lease rate is based on $16.95 per square foot, with a typical lease term of three
years. Space is leased on the basis of triple net expenses.
Vacancy and Collection Loss
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4801 Riverbend Road Boulder, Colorado
Our rent and occupancy survey indicated that the majority of similar Office buildings in
the market range from [XX] percent to [XX] percent occupancy, with an average of
[XX] percent and a median of [XX] percent. According to [Frederick Ross], the overall
vacancy rate is [X.X] percent in the [XXXXX] market, and [X.X] percent in the
[XXXXX] market. Collection losses were not reported by the sources of confirmation
but do not appear to be significant among the tenants. We have projected an
allowance of 10.0 percent for vacancy and collection loss, credit losses and other
unpredictable occurrences affecting collection of rents.
Operating Expenses
The following is a summary of comparable expense data used for our analysis.
Property Taxes. The subject’s current taxes are $[XX]. The estimated property tax
expense is $23,000.
Source
Historical - 2005
Historical - 2006
Historical - 2007
Appraiser
Estimate
Total
$22,815
$22,842
$21,058
$/SF
$3.63
$3.63
$3.35
% of EGI
19.4%
18.7%
17.5%
$23,000
$3.66
17.3%
Insurance. The estimated insurance expense is $2,200.
Source
Historical - 2005
Historical - 2006
Historical - 2007
Appraiser
Estimate
Total
$1,221
$2,286
$2,084
$/SF
$0.19
$0.36
$0.33
% of EGI
1.0%
1.9%
1.7%
$2,200
$0.35
1.7%
Management. Management fees are the expenses paid to a third party for the day-today management and operation of a facility on behalf of the owner. Typically, these
fees in the local market have ranged from [XX] to [XX] percent of the effective gross
income. This expense is estimated to be 5.0 percent of effective gross income. This
equals a total expense of $3,819.
Source
Historical - 2005
Historical - 2006
Historical - 2007
Appraiser
Estimate
 2016 Sample Appraisals, Inc
Total
$4,857
$5,752
$5,318
$/SF
$0.77
$0.92
$0.85
% of EGI
4.1%
4.7%
4.4%
$3,819
$0.61
5.0%
50
4801 Riverbend Road Boulder, Colorado
Administrative and General. This expense covers the on-site office expenses and other
general expenses such as office supplies, legal fees, etc. The estimated administrative
and general expense is $2,500.
Source
Historical - 2005
Historical - 2006
Historical - 2007
Appraiser
Estimate
Total
$3,348
$2,948
$218
$/SF
$0.53
$0.47
$0.03
% of EGI
2.8%
2.4%
0.2%
$2,500
$0.40
1.9%
Total
$987
$2,951
$1,245
$/SF
$0.16
$0.47
$0.20
% of EGI
0.8%
2.4%
1.0%
$2,500
$0.40
1.9%
Payroll. [Insert text here]
Source
Historical - 2005
Historical - 2006
Historical - 2007
Appraiser
Estimate
Utilities. The estimated utility expense is $17,500.
Source
Historical - 2005
Historical - 2006
Historical - 2007
Appraiser
Estimate
Total
$16,130
$15,005
$17,660
$/SF
$2.57
$2.39
$2.81
% of EGI
13.7%
12.3%
14.7%
$17,500
$2.78
13.2%
Repairs and Maintenance. The estimated repairs and maintenance expense is
$15,000.
Source
Historical - 2005
Historical - 2006
Historical - 2007
Appraiser
Estimate
Total
$8,699
$16,834
$16,853
$/SF
$1.38
$2.68
$2.68
% of EGI
7.4%
13.8%
14.0%
$15,000
$2.39
11.3%
Reserves for Replacement. The reserves for replacement are estimated as $0.50 per
square foot of building area, or $3,143 per year. Reserves are typically for the
replacement of items such as the roof, HVAC, parking lot, etc. over the life of the
lease. Typically, the market utilizes a reserve for replacement of $0.20 to $0.25 per
square foot.
Source
 2016 Sample Appraisals, Inc
Total
$/SF
51
% of EGI
4801 Riverbend Road Boulder, Colorado
Historical - 2005
Historical - 2006
Historical - 2007
Appraiser
Estimate
$0
$0
$0
$0.00
$0.00
$0.00
0.0%
0.0%
0.0%
$3,143
$0.50
2.4%
Total Operating Expenses
Source
Historical - 2005
Historical - 2006
Historical - 2007
Appraiser Estimate
Sales Comparable 1
Sales Comparable 2
Sales Comparable 3
Sales Comparable 4
Sales Comparable 5
Total
$58,057
$68,618
$64,436
$69,662
$0
$10,183
$0
$0
$3,776
$/SF
$9.24
$10.92
$10.25
$11.08
$0.00
$0.71
$0.00
$0.00
$0.61
% of EGI
49.3%
56.1%
53.5%
52.5%
0.0%
6.2%
0.0%
%
6.8%
Net Operating Income - Following is a Reconstructed Operating Statement for the
subject property. Based on the preceding analysis, the net operating income for the
subject is estimated to be $63,143 which is $10.05 per square foot.
Size
6286
Potential Base Rental
Income
Billback Income
Other
Income
Potential Gross Income
Less Vacancy and Credit
Effective Gross Income
Operating Expenses
Property Taxes
Insurance
Off-Site Management
General and Administrative
Payroll
Utilities
Repair and Maintenance
Reserves
Total Expenses
Net Operating Income
Market Rent
$13.50
Total Annual
$84,861
$62,700
$0
Billback
Y
Y
N
Y
Y
Y
Y
N
% of EGI
17.3%
1.7%
5.0%
1.9%
1.9%
13.2%
11.3%
2.4%
52.5%
10.0%
$147,561
$14,756
$132,805
$ / NRSF
$3.66
$0.35
$0.61
$0.40
$0.40
$2.78
$2.39
$0.50
$11.08
$10.05
Total
$23,000
$2,200
$3,819
$2,500
$2,500
$17,500
$15,000
$3,143
$69,662
$63,143
Capitalization Technique
Capitalization is the process of converting a net operating income into an indication
of value. This approach to valuation can be accomplished by (1) dividing a single
year’s net operating income by an appropriate overall capitalization rate (direct
capitalization) or (2) discounting to present value a net income stream and property
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4801 Riverbend Road Boulder, Colorado
reversion over a projected holding period (discounted cash flow analysis). As noted
earlier, we have employed the direct capitalization methodology in the analysis of
the subject property.
Direct Capitalization. In direct capitalization, the most appropriate overall
capitalization rate can be selected by several methods including the sales comparison
analysis and empirical data. We have used each of these to support our estimate of
an overall capitalization rate for the subject property.
Sales Comparison Analysis. The sales comparison analysis relies on the extraction
of overall capitalization rates from comparable sales found in the marketplace. Earlier
in this report in the Sales Comparison Approach, sales were analyzed in comparison
with the subject property. The overall capitalization rates from these sales for which
the information was extracted are detailed in the following chart.
Comparable Sale
Sale Date
1
03/20/06
2
02/08/06
3
10/05/05
5
06/02/05
NOI/SF
$11.77
Overall Rate
6.0%
%
$9.48
4.8%
%
Rates typically will vary depending on the buyer evaluation of the project’s condition,
the potential income increases after the sale and the generally the steps the new
owners believe can be taken to increase the resale price or increase the cash flow.
Substantial differences in capitalization rates can be caused by (1) variation in
expenses included in operating statements, (2) variation in rates of return demanded
by investors, (3) interest rates available in the market, and (4) risks associated with
the tenant base. The pro forma statement is typically subject to a slightly greater
risk because it uses projected rather than actual data.
The sales data indicates a range from 4.8 percent to 8.3 percent, with an average
6.1 percent and a median 5.7 percent.
Empirical Data. For support for our estimate of an overall rate for the subject
property, we have relied on empirical data published by Smith/Burbach Real Estate.
The firm publishes the results of a survey completed by commercial banks, developers,
local investors, savings and loan associations, life insurance companies and
institutional lenders and investors. In their most recent survey, Winter 2004/2005,
the responses of expected overall capitalization rates found from the market
participants ranged from [XX] percent to [XX] percent, with an average of [XX]
percent.
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4801 Riverbend Road Boulder, Colorado
Overall Rate Conclusion. Based on the data from the sales analysis and empirical
data, we have concluded an overall rate range for the subject property of 6.0 percent
to 7.0 percent.
Value Conclusion - Direct Capitalization Method
The final step in the valuation of the subject property via the direct capitalization
method of the Income Approach is to divide the estimated stabilized net operating
income by the concluded capitalization rate range. The calculations are shown in the
following chart. As noted, the following value range for the subject assumes
stabilized occupancy levels. The deductions/adjustments for the remaining lease-up
period, leasing commissions, tenant finish costs, etc. are addressed after the
Reconciliation and Final Value Estimate section.
Valuation Estimated Range - Direct Capitalization
Net Operating Income / Overall Rate = Indicated Value
$63,143 / 6.0% = $1,052,383
$63,143 / 7.0% = $902,043
Rounded: $900,000 - $1,050,000
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4801 Riverbend Road Boulder, Colorado
RECONCILIATION OF VALUE
Reconciliation and correlation is performed when more than one approach to value is
used to value real property. Reconciliation weights the relative significance, the
applicability and the defensibility of each value indication and relies most heavily on
the one that is most appropriate for the assignment. The conclusion drawn in the
reconciliation is based on the appropriateness, the accuracy and the quantity and
quality of the evidence in the entire appraisal.
The approaches to value that were utilized for the subject and their results are
summarized as follows:
Land Value:
$640,000 - $820,000
Sales Comparison Approach:
Income Approach:
Land Value:
$640,000 - $820,000
Cost Approach:
Sales Comparison Approach:
Land Value:
$640,000 - $820,000
Cost Approach:
$1,120,000 - $1,170,000
Sales Comparison Approach:
$1,100,000 - $1,200,000
Income Approach:
$900,000 - $1,050,000
The cost approach is often an effective check against the results derived from the
other approaches to value. When the improvements are new and represent the
highest and best use of the site, the cost approach is especially reliable. When
improvements are older, physical deterioration, functional obsolescence and external
obsolescence are more difficult to estimate.
In this instance, the cost approach was
xxxxxx.
The sales comparison approach is frequently a reliable method of value as it best
reflects interactions in the marketplace between buyers and sellers. When substantial
market data are available, the sales comparison approach tends to be a good indicator
of value and often is relied on by investors and other market participants. The sales
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4801 Riverbend Road Boulder, Colorado
comparison approach is a historical perspective to value, which sometimes can limit
the effectiveness of this approach. In this instance, the quality of data was
xxxxxx and the quantity of data was xxxxxx.
reliance on this approach to value was
Accordingly, the level of
xxxxxx.
All income capitalization methods, techniques and procedures attempt to forecast
future benefits and estimate their present value. The reliability of the income
approach is directly related to the appraisers’ ability to accurately estimate net
operating income and investment returns required by investors. For the final analysis,
consideration was given to the results of the income approach as the quantity and
quality of the comparable data and the subject’s historical data was
Accordingly, the level of reliance on this approach to value was
xxxxxx.
xxxxxx.
If property has sold in the past three years, discuss the difference between the
concluded value and the sales price of the last sale.
The estimated value of the fee simple estate interest in the subject property as of
June 16, 2007, was:
Final Opinion of Market Value:
$1,000,000
MARKETING PERIOD AND EXPOSURE TIME
Advisory Opinion G-7, by the Appraisal Standards Board of the Appraisal Foundation,
describes reasonable marketing time as "an estimate of the amount of time it might
take to sell a property interest in real estate at the estimated market value level
during the period immediately after the effective date of an appraisal." Marketing
period is to be distinguished from exposure time, which is defined in Statement on
Appraisal Standards No. 6 (SMT-6), by the Appraisal Standards Board, as "the
estimated length of time the property interest being appraised would have been
offered on the market prior to the hypothetical consummation of a sale at market
value on the effective date of the appraisal; a retrospective estimate based upon an
analysis of past events assuming a competitive and open market."
Marketing Period
Sale
Address
1
 2016 Sample Appraisals, Inc
Marketing Period
5387 Manhattan Circle
56
4801 Riverbend Road Boulder, Colorado
2
3
4
5
Boulder
4747 Table Mesa Drive
Boulder
4810 Riverbend Road
Boulder
3035 Center Green Drive
Boulder
4895 Riverbend Road
Boulder
less than 12 months
six to nine months
one month
less than 12 months
less than 12 months
The market value conclusion is based on a reasonable marketing period estimated to
be 12 months or less and exposure time of 6 to 12 months.
The following extraordinary assumptions apply to this analysis:
1. It is assumed that the size reported by the assessor is accurate.
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4801 Riverbend Road Boulder, Colorado
CERTIFICATE OF APPRAISAL
The undersigned does hereby certify that, except as otherwise noted in this appraisal
report:
-
To the best of our knowledge and belief, the statements of fact contained in the appraisal
report, upon which the analyses, opinions and conclusions are based, are true and correct.
-
The analyses, opinions and conclusions expressed in this report are limited only by the
assumptions and limiting conditions stated in the report and are our personal and unbiased
professional analyses, opinions and conclusions.
-
We have no present or prospective interest in the property that is the subject of this report,
and we have no personal interest or bias with respect to the parties involved.
-
The appraisal assignment was not based on a requested minimum valuation, a specific
valuation or the approval of a loan.
-
Our compensation is not contingent on an action or event resulting from the analyses,
opinions or conclusions in, or the use of, this report.
-
To the best of our knowledge and belief, our analyses, opinions and conclusions were
developed, and this report has been prepared, in conformity with the appraisal standards
required by Title XI of FIRREA, the Office of the Comptroller of the Currency, the Code of
Professional Ethics and Standards of Professional Practice of the Appraisal Institute, and the
Uniform Standards of Professional Appraisal Practice promulgated by the Appraisal
Foundation.
-
The use of this report is subject to the requirements of the Appraisal Institute relating to
review by its duly authorized representatives.
-
On June 16, 2007, Sam P Appraiser inspected the subject property, the neighborhood, and
the comparables employed in arriving at the value estimates stated herein.
-
Except as noted hereafter, no one other than the undersigned assisted in the preparation of
the analyses, conclusions and opinions concerning real estate that are set forth in the
appraisal report.
-
As of the date of this report, has completed the requirements of the continuing education
program of the Appraisal Institute.
-
The estimated value of the fee simple estate interest in the subject property as of June 16,
2007, was:
Final Opinion of Market Value:
$1,000,000
The market value conclusion is based on a reasonable marketing period estimated to be 12
months or less and exposure time of 6 to 12 months.
For this analysis, we have specifically assumed the following extraordinary assumptions and
hypothetical conditions. If any of these proves to be different or incorrect, we reserve the right
to amend our analysis as it may have an effect on the value conclusions stated herein. apply to
this analysis:
1.
It is assumed that the size reported by the assessor is accurate.
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4801 Riverbend Road Boulder, Colorado
Insert background and qualifications here
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4801 Riverbend Road Boulder, Colorado
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