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Home My WebLink About20111823.tiff CLERK TO THE BOARD PHONE (970) 336-7215, Ext. 4226 FAX: (970) 352-0242 115050 O STREET P. O. BOX 758 wKit IwD €. GREELEY, COLORADO 80632 COLORADO August 30, 2011 B & L LEASING LLC 5833 SHENANDOAH AVE FIRESTONE, CO 80504 RE: THE BOARD OF EQUALIZATION, 2011, WELD COUNTY, COLORADO - STIPULATE PETITIONER'S APPEAL AND AFFIRM ASSESSOR'S VALUE DESCRIPTION OF PROPERTY: ACCOUNT#1 PARCEL #: VARIOUS - SEE ATTACHED LIST Dear Petitioner: On July 29, 2011, the Board of County Commissioners of Weld County, Colorado,convened, and acting as the Board of Equalization, pursuant to Section 39-8-101, C.R.S., et.seq., considered the Stipulation on your petitions of appeal of the County Assessor's valuation of your properties described in the attached list, for the year 2011. The Stipulation was entered into between the Assessor and said petitioner(s), and accepted by the Board of Equalization, agreeing that the assessment and valuation of the Weld County Assessor be Stipulated as follows: ACTUAL VALUE AS ACTUAL VALUE DETERMINED BY AS STIPULATED ASSESSOR $50,000 $30,000 2011-1823 AS0079 B & L LEASING LLC - VARIOUS ACCOUNTS Page 2 If you have questions or need additional information, please do not hesitate to contact me at (970) 336-7215, Extension 4226. Very truly yours, Esther E. Gesick Deputy Clerk to the Board cc: Christopher Woodruff, Assessor COLORADO CERTIFIED APPRAISALS LLC 615 BROSS ST LONGMONT, CO 80501 DESCRIPTION OF PROPERTY: ACCOUNT #: R1222502 PARCEL#: 131312404043 - FIR 2BF L43 BLK4 BOOTH FARMS 2ND FG DESCRIPTION OF PROPERTY: ACCOUNT#: R1222602 PARCEL#: 131312404044 - FIR 2BF L44 BLK4 BOOTH FARMS 2ND FG DESCRIPTION OF PROPERTY: ACCOUNT#: R1224102 PARCEL#: 131312406009 - FIR 2BF L9 BLK6 BOOTH FARMS 2ND FG DESCRIPTION OF PROPERTY: ACCOUNT#: R1224802 PARCEL#: 131312407007 - FIR 2BF L7 BLK7 BOOTH FARMS 2ND FG DESCRIPTION OF PROPERTY: ACCOUNT#: R1224902 PARCEL#: 131312407008 - FIR 2BF L8 BLK7 BOOTH FARMS 2ND FG DESCRIPTION OF PROPERTY: ACCOUNT#: R1225002 PARCEL#: 131312407009 - FIR 2BF L9 BLK7 BOOTH FARMS 2ND FG 2011-1823 AS0079 2011 COUNTY BOARD OF EQUALIZATION WELD COUNTY ASSESSOR'S ACCQUNT NUMBER: R122250P;R1222502,R1222802,R1224102,R1224802,R1224902 Rizz5coz STIPULATION (As To Tax Year 2011 Actual Value) RE PETt11ON OF: NAME: B&L LEASING LLC 5833 SHENANDOAH AVE FIRESTONE CO 80504 . . . . . . . . . . . . • . Petitioner(s), B&L LEASING LLC end the Weld County Assessor, hereby enter into this Stipulation regarding the tax year 2011 valuation of the subject property,and jointly move that the Board of Equalization to enter Its order based on this Stipulation. Petitioner(s)and the Assessor agree and stipulate as follows: 1.The property subject to this Stipulation is described as: BOOTH FARMS 2ND FG 2.The subject property is classified as Vacant Land property 3.The County Assessor originally assigned the following actual value to the subject property for 2011. LAND: $50.000 IMPROVEMENTS: >� TOTAL $50.000 4.After further review and negotiation,the petitfoner(s) and Weld County Assessor agree to the folly wthg actual value for the subject property. LAND: $30.000 IMPROVEMENTS: TOTAL > Ng .� .Rm.w......,.,ns.c.. 07011 - j93 5.The valuations,as established above, shall be binding only with respect to tax year 2011. 6.Brief narrative as to why the reduction was made: Value was adjusted based upon the general market prices per sq.ft that were in place In the base period. 7.Both parties agree that the hearing scheduled before the Weld County Board of Equalization on 7/28/2011 at 8:30 AM be vacated. DATED this 27 day of July,2011. �� s iyt C•414-6 r(s)or Attorney Petitioners) or Attorney Address: Address: “4'-2_3j3 5he✓Laa2€L.c,t .4e%, e6Yc,1P s-o.car Telephone: 72O --. —9'�.3 Sr Telephone: County Assessor. K aka. ADDRESS: 1400 N.17th Avenue Greeley, CO 80631 (970)353-9845 ext. 3656 ftt PRIMP wILMICOMrMIisO lr NOTICE OF DETERMINATION Christopher M. Woodruff Date of Notice: 6/22/2011 Weld County Assessor Telephone: (970) 353-3845 or (720) 652-4255 1400 N 17th Ave Fax: (970) 304-6433 Greeley, CO 80631 E-mail: appeals@co.weld.co.us www.co.weld.co.us Office Hours: 8:00 AM - 5:00 PM SCHEDULE/ACCOUNT NO. TAX YEAR TAX AREA LEGAL DESCRIPTION/ PHYSICAL LOCATION R1222502 2011 2556 FIR 2BF L43 BLK4 BOOTH FARMS 2ND FG cc m B&L LEASING LLC 5833 SHENANDOAH AVE /0v3 c ( err y v4/c 0 y FIRESTONE,CO 80504 re a. a. O a. ASSESSOR'S VALUATION PROPERTY CLASSIFICATION ACTUAL VALUE PRIOR TO ACTUAL VALUE AFTER REVIEW REVIEW VACANT LAND 50,000 50,000 TOTAL $50,000 $50,000 The Assessor has carefully studied all available information, giving particular attention to the specifics included on your protest. The Assessor's determination of value after review is based on the following: AL01 - Your property has been uniformly valued following Colorado law. Your protest of value has been denied due to comparison of other similar properties which sold during the 2009/2010 time period. If you disagree with the Assessor's decision, you have the right to appeal to the County Board of Equalization for further consideration, § 39-8-106(1)(a), C.R.S. The deadline for filing real property appeals is July 15. The deadline for filing personal property appeals is July 20. The Assessor establishes property values. The local taxing authorities (county, school district, city, fire protection, and other special districts) set mill levies. The mill levy requested by each taxing authority is based on a projected budget and the property tax revenue required to adequately fund the services it provides to its taxpayers. The local taxing authorities hold budget hearings in the fall. If you are concerned about mill levies, we recommend that you attend these budget hearings. Please refer to last year's tax bill-or-ask your Assessor for a listing of the local taxing authorities. - Please refer to the reverse side of this notice for adiditioojl 'Ifilbrmlat1 n. O • APPEAL PROCEDURES County Board of Equalization Hearings will be held from July 1 through August 5 at 915 10th Street, Greeley, CO To appeal the Assessor's decision, complete the Petition to the County Board of Equalization shown below, and mail or deliver a copy of both sides of this form to: Weld County Board of Equalization 915 10t Street, P.O. Box 758 Greeley, CO 80632 Telephone (970) 356-4000 Ext, 4225 To preserve your appeal rights, your Petition to the County Board of Equalization must be postmarked or delivered on or before July 15 for real property and on or before July 20 for personal property— after such date, your right to appeal is lost. You may be required to prove that you filed a timely appeal; therefore, we recommend that all correspondence be mailed with proof of mailing. You will be notified of the date and time scheduled for your hearing. The County Board of Equalization must mail a written decision to you within five business days following the date of the decision. The County Board of Equalization must conclude hearings and render decisions by August 5, § 39-8-107(2), C.R.S. If you do not receive a decision from the County Board of Equalization and you wish to continue your appeal, you must file an appeal with the Board of Assessment Appeals by September 12, § 39-2-125(1)(e), C.R.S. If you are dissatisfied with the County Board of Equalization's decision and you wish to continue your appeal, you must appeal within 30 days of the date of the County Board's written decision to ONE of the following: Board of Assessment Appeals District Court 1313 Sherman Street, Room 315 9th Avenue and 9th Street Denver, CO 80203 P.O. Box C (303) 866-5880 Greeley, Colorado 80632 www.dola.colorado.qov/baa (970) 356-4000 Ext. 4520 Binding Arbitration For a list of arbitrators, contact the County Commissioners at the address listed for the County Board of Equalization. If the date for filing any report, schedule, claim, tax return, statement, remittance, or other document falls upon a Saturday, Sunday, or legal holiday, it shall be deemed to have been timely filed if filed on the next business day, § 39-1-120(3), C.R.S. PETITION TO COUNTY BOARD OF EQUALIZATION What is your estimate of the property's value as of June 30, 2010? (Your opinion of value in terms of a specific dollar amount is required for real property pursuant to § 39-8-106(1.5), C.R.S.) $7Z /Doe What is the basis for your estimate of value or your reason for requesting a review? (Please attach additional sheets as necessary and any supporting documentation, i.e., comparable sales, rent roll, or ginal installed co t, appraisal, etc.) 0 ge-, -.� r - Z X22 ATTESTATION I, the undersigned owner or agent' of the property identified above, affirm that the statements contained herein and on any attachments hereto are true and complete. 72 L)4 9G3 7/2A tur Telephone Number Date 15-DPT-AR PR 207-08/11 R1222502 12390 1 Attach letter of authorization signed by property owner. TO: Weld County Assessor FROM: B&L Leasing, LLC 5833 Shenandoah Ave. DATE: July 12,2011 Firestone,CO 80504 (720)560-9638 Lots In Booth Farms Filing#1 R1222502 Lot 43/Blk4 10435 Cherryvale $22,000 R1222602 Lot 44/BIk4 10437 Cherryvale $22,000 R1224102 Lot 9/Bik6 5785 Shenandoah $20,000 R1224802 Lot 7/Blk7 10414 Cherryvale $22,000 R1224902 Lot 8/B1k7 10392 Cherryvale 522,000 R1225002 Lot 9/Blk7 10380 Cherryvale $22,000 An appraisal was completed(full appraisal attached for reference)by Craig Castleberry on the above lots for the period 2009 and In half 2010. Attached are the certification/qualifications of Mr.Castleberry(pages 48-52 of the appraisal). A variety of methods were used to determine the above lot"values"(pages 5-7)with specific comments within the appraisal document supporting final values(pp 20,22,23,28-30). Appraiser determined: Page 7 * The$50,000 actual value of each lot is above market level. . . Page 20 * Current(mid 2010)residential lot prices are 40%to 70%below prices paid four to six years ago. Page 22 * Areas similar to the "subject" have had typical lot prices between$14,000 and$30,000. SUMMARY: (Page 30) • The information provided shows that listings within the immediate"subject"area are typically$33,400 to $36,500 with limited response which is above a market level for the "subject" lots. • Comparable#1 has had superior demand for housing providing a predictable absorption for home builders and the$24,000 to$27,500 price range is considered above market on the "subject"lots. • Closed transactions within Comparable#4,#5,#7,#8, and#9 are inferior to the"subject" indicating the $20,000 per lot price is below a base lot value for the"subject". • This supports a base lot price range of$20,000 to$24,000 for the "subject" lots which is reasonably rounded to a base lot value of$22,000. There Is not a premium paid for larger lots nor a premium/discount for western/interior lots. The lot with a more prominent slope was discounted 10%. Five lots valued at$22,000 and one lot at$20,000. B&L LEASING,LLC APPEAL(Additional Information) July 12, 2011 Page 2 MARKET PARTICIPANT RESPONSES: Page 22 * There has been very limited land sales activity in Carbon Valley this year and a number of property owners are losing their lot holdings through foreclosure. Page 23 * . . .lots listed for sale at$34,000 for well over a year with no interest. Page 23 * .. .sold a lot in the Mad Russian subdivision in Milliken. . .for$14,400. ...two more lots listed for sale at $18,000 each. There has been no interest in the lots. Page 26 SALES COMPARISON APPROACH Page 28 Comparable#1: WC Builders and Sage Homes have been acquiring lots between$24,000 and$27,500. .. . . .the comparable lot price range of$24,000 to$27,500 is above market for the "subject". Comparable#2 $29,000 to$33,000 lot price range is above market for the"subject"lots. Comparable#3 The subdivider has no pressure to liquidate the lots and has no interest in selling below$33,400 per lot. There has been no interest in the comparable lots at this price level... These are unrealistically priced lots above a market value for the"subject" lots. Comparable#4 The sellers eventually accepted the$14,400 offer. . . Page 29 . ..sites available for$18,000 each with absolutely no interest. Overall,this is an inferior location and the$14,400 lot sales is below a market value for the"subject"lots. Comparable#5 Considering the inferior location and seller motivation the$10,500 acquisition price of the lot that sold is below market for the"subject"lots. Comparable#6 There has been limited interest in the comparable lots at$39,000. .. Comparable#7 The comparable Evans location is inferior to the"subject"location and the$13,300 lot is below a market value for the"subject"lots. The listing agent reported that there are two more lots available for a listing price of$18,255,but the seller would likely accept a lower offer. Comparable#8 .. . is a slightly inferior location. . . . lot available at the same$18,000 price. This is considered to be near, but slightly below a market lot value for the"subject"lots. Page 30 Comparable#9 . . .three lots for$20,000 per lot. Comparable#10 There has been no interest in the lots at this price level indicating that$34,000 per lot is above market for the"subject"lots. fz2ZS7z 6 LOTS BOOTH FARM COLORADO CERTIFIED APPRAISALS.LLC CERTIFICATIO\ CERTIFICATION The following Certification statements are in addition to and may supersede any other Appraiser's Certification included or attached to this appraisal report. This Appraiser's Certification is compliant with the 2010 Uniform Standards of Professional Appraisal Practice. I certify that. to the best of our knowledge and belief: The statements of fact contained in this report are true and correct. The reported analyses. opinions, and conclusions are limited only by the reported assumptions and limiting conditions, and is my personal. impartial. and unbiased professional analyses. opinions.and conclusions. I have no present or prospective interest in the property that is the subject of this report. and no personal interest with respect to the parties involved. I have not provided any past valuation analysis. consultation. or professional service of or relating to the subject sites. I have no bias with respect to the property that is the subject of this report or to the parties involved with this assignment. My engagement in this assignment was not contingent upon developing or reporting predetermined results. My compensation for completing this assignment is not contingent upon the development or reporting of a predetermined value or direction in value that favors the cause of the client, the amount of the value opinion. the attainment of a stipulated result. or the occurrence of a subsequent event directly related to the intended use of this appraisal. My analyses. opinions. and conclusions were developed, and this report has been prepared. in conformity with Uniform Standards of Professional Appraisal Practice. Craig Castleberry made a personal inspection of the property that is the subject of this report. No one provided significant real property appraisal assistance to the appraisers' signing this report. PURPOSE. INTENDED USE. AND INTENDED USER OF THE APPRAISAL: The purpose of the appraisal is to estimate the market value of the subject property. as defined in this report. on behalf of the referenced client as the intended user of this report. The intended use of the appraisal is to assist the client. as the intended user of this report. 48 • • 6 LOTS BOOTH FARM COLORADO CERTIFIED APPRAISALS.LLC CERTIFICATION in evaluating the subject property for lending purposes. The use of this appraisal by anyone other than the stated intended user. or for any other use than the stated intended use. is prohibited. ANALYSIS AND REPORT FORM: This is a real property appraisal written in a Summary Report format. As such, data and analysis has been presented in a summary report format with more complete information retained in my files. The appraisal is based on the information gathered by the appraiser from public records. other identified sources. inspection of the subject property and neighborhood. and selection of comparable sales and listings within the subject and comparable market areas. When conflicting information was provided, the source deemed most reliable has been used. Craig Castleberry CO Certified General Appraiser #CG 1323026 Exp. 12/31/2010 49 6 LOTS BOOTH FARM COLORADO CERTIFIED APPRAISALS.LLC QL:ALIFICATlo s APPRAISER QUALIFICATIONS CRAIG D. CASTLEBERRY COLORADO CERTIFIED GENERAL APPRAISER#CG01323026 Owner Colorado Certified Appraisals. LLC 615 Bross Street Longmont. Colorado 80501 Voice-(303)995—6017 Fax---(303) 774 - 8603 Generalized Summary and Location of Assignments Subdivisions Retail Office Industrial Garfield County Grand County Grand County Boulder County Boulder County Boulder County Boulder Count Weld County Weld County Weld County Weld County Larimer County Adams County Adams County Adams County Arapahoe County Larimer County Larimer County Larimer County Larimer County Summit County Summit County Garfield County Garfield County Garfield County Garfield County Laramie, Wyo Rock Springs.Wyo Laramie,Wyo Ventura,CA Montana Oregon Since 1991, Mr. Castleberry has completed real property appraisal reports of various income and owner occupied commercial properties. His experience has been as a fee appraiser completing commercial/residential real estate appraisal reports in a narrative format in conformance to USPAP and accepted techniques of the Appraisal Institute. He is an associate member of the Appraisal Institute pursuing his MAI. Licenses: Colorado Certified General Appraiser=CG01323026 so • 6 Los BOOTH FARM COLORADO CERTIFIED APPRAISALS.LLC QUALIFICATIONS Related Coursework: Principles of Real Estate Appraisal Methods Income Capitalization NCRE 200-Principles of Real Estate Appraisal NCRE 208-Uniform Standards of Professional Appraisal Practice(USPAP) (USPAP Updates as promulgated for Continuing Education) NCRE 210-Residential Real Estate Appraisal Techniques NCRE 215-Development of a Real Estate Appraisal NCRE 222-Income Capitalization Techniques NCRE 225-Narrative Appraisal Review Colorado Real Estate Contracts and Law Environmental Issues in Commercial Real Estate Commercial Real Estate Financing Real Estate Law Real Estate Financing Real Estate Development Subdivision Valuation—Appraisal Institute Advanced Income Capitalization—Appraisal Institute Appraisal Clients: (A partial listing) Mile High Banks Boulder County Business Bank Compass Bank Boulder County Transportation Boulder County National Acceptance Company Farm Credit NCWCD Boulder Valley Public Schools Boulder West City of Longmont University of Colorado Colorado Department of Transportation Vern Bank Colorado National Bank FirsTier Bank Guaranty Bank Crowder Mortgage Bank of The West M &T Banks Bank of Choice it • • b 1 AirS BOOTH FARM COLORADO CERTIFIED APPRAISALS,LLC QUAUF1CA71ONS • STATE OF COLORADO Department of Regulatory Agencies Division of Real Estate Active. PRINTED ON s C E PAP!' Ce't Gen Appraiser 1323026 Jan 1 ?00 ! Dec 31 2010 Number issue Date ; Extl,ros �.rtM :K.ktevt.AS CAS r1C RF.t2RY .4 +`�{,;giraRt nL1'L1ifNSLr:1:Cy( .VAN,tiLLjLl:itu►N • • 52 1zzz5'cz 6 LOTS BOOTH FARM COLORADO CERTIFIED APPRiISALS.LLC SCOPE OF WORE Reasonable Exposure Time Reasonable exposure time is the estimated length of time the fee simple interest in the subject property would have been offered on the market prior to the hypothetical consummation of a sale at market value on the effective date of this report. July 20. 2010. Comparable lot sales provided in the subsequent Sales Comparison Approach section of this report have a days on the market range from 30 to 436 with lots listed for sale between 30 and over 700 days. These are misleading according to the listing brokers and do not take into account the period of time the lots were listed at unrealistic prices. A more realistic days on the market for the comparable sales is 30 to 180 days in consideration of adjusting the asking prices to market levels. Brokers interviewed concur with this estimate. There has been a significant inventory of lots with low sales volume over the past year. Based on current sales and broker interviews. a reasonable exposure period for each of the subject lots is estimated to be 30 to 90 days with an overall absorption of the subject inventory at 12 months or less. Property Appraised and Property Rights Appraised The subject property is an inventory of six residential lots in the second filing of the Booth Farms subdivision. These are in-fill lots with all infrastructure in place and raw water dedicated without water or sewer taps. The lots vary in size from 6.000 to 14.888 square feet in size. At your request. the retail value of each lot individually and in aggregate has been provided. In addition. the market and disposition values in a bulk sale scenario to a single purchaser of the fee simple interest in the subject lot inventory is being appraised. The following steps were conducted in appraising the subject property: 1. Gathered data from numerous secondary sources including: Weld County records. Colorado Bureau of Labor and Employment. U.S. Census Bureau, Cite of Firestone. multiple listing service, the appraisers' records. CoStar data services. Realty Rates investor survey. DMCAR real estate listing association. Burbach and Associates Real Estate Investment Survey. Frederick Ross Market Surrey, and various economic and development authorities relating to the subject market. 2. Consulted various personnel relating to the appraisal assignment including: knowledgeable real estate professionals: parties related to data presented (buyer, seller. lessor, lessee, buyer's broker. seller's broker), and original data collection surveys. 3. Visually inspected the subject property and surrounding area on July 20, 2010 considered the effective date of the appraiser's opinions and value conclusions. 4. Researched public records for data on the subject. including zoning. utilities and assessments. 5. Analyzed the highest and best use of the property. 5 6 LOTS Boom FARM COLORADO CERTIFIED APPR.JISALS.LLC SCOPE OF WORK 6. Searched the local market for land sales similar to the subject sites. 7. Analyzed the comparable sales for perceived differences with the subject sites and estimated a market value for the each of the subject lots as well as an aggregate retail value for the entire inventory. 8. Utilized a cash flow analysis by deducting holding costs and discounting the net income by an anticipated absorption period to estimate a bulk sale of the inventory to a single purchaser. 9. Analyzed and compared bulk sales to the subject inventory to determine the market value of the subject inventory in a bulk sale scenario to a single purchaser. 10. Reconciled the information provided to determine the individual lot values, aggregate retail value. and market value of a bulk sale scenario to a single purchaser of the subject inventory. 11. Estimated a discount to appi to the "as is- market value in estimating the disposition value of the subject inventory in a bulk sale scenario to a single purchaser. 6I.OTS ROOM FARM COLOR ADO CERT1F!ET)APPR41SA S.LLC REAL ESTATE TA.KE5 REAL ESTATE TAXES The Weld County Assessors' office has estimated an equivalent $50,000 actual value for each of the six subject lots with an equivalent assessed value of$14,500. The 2009 mill levy is 93.927 and total taxes for the subject inventory are calculated as follows: Assessed Value Mill Levy Per Lot Taxes $14,500 x 0.093927 = $1361.97 x 6 Lots Total Taxes $ 8.171.82 According to the Treasurers' office, current and past taxes have been paid in full. The $50,000 actual value of each lot is above a market level and a tax protest would be well advised and should result favorably for the ownership. 6 LOTS BOOTH}ARM COLORADO CERTIFIED APPRAISALS.LLC HIGHEST AND BEST USE HIGHEST AND BEST USE ANALYSIS Highest and Best lise is defined as: "The reasonable probable and legal use-of vacant land or an improved property. which is physically possible. appropriately supported. financially feasible. and that results in the highest value. "4 To determine the highest and best use of the subject site, the physically possible, legally permissible. and financially feasible alternatives have been considered. The subject lots are final planed in conformance to the Residential B zoning regulations for detached single-family home sites and have had an ODP specifying the size and use of the subject. A change in use would unlikely be desired or permitted. Raw water deficits have been satisfied and there are no outstanding issues that would prevent issuance of building permits. The lots varn- from 6.000 to 14.888 square feet in size with sufficient topographical features and access to utilities to support detached residential development. There were no known environmental or hazardous conditions and the lots are outside 100 and 500 year flood hazard areas. Overall, the physical nature of the land supports the permitted use. When considering thc leasibL uses at the subject prwpeii . the supple and demand for homes and lots in the local market was analyzed. The limited lot sales activity has been predominantly REO sales followine foreclosure. Current residential lot prices are 40% to %0% below prices paid lour to six years ago. in ?i�ct. lots are being acquired below the cost to acquire the raw land. dedicate raw water. and install infrastructure. 1..ocal brokers report that once stimulus incentives expired. housing activity throughout Southwest Weld County stalled. I here remains a limited availability. of tinunciiw to support a local home builder to pursue development of the subject lots. Residential market condition have not changed since last year and speculative home development is not j1Slti.d The highest and best use of the subject sites. arc to hold the lots until market corudltiotls improve or an end user is idtentifltd. `The bictionary of Real Estate Appraisal.4th Edition..Appraisal Institute.�0n_ ,0 6 LOTS BOOM F4R\! COLORS\DO CERTIFIED,tPPRAIS-\LS.LLC S!;\!MAR1ztn MARKET ANALYSIS The area has experienced significant foreclosures because of difficulties associated with sub-prime mortgages. The bank owned homes (REO properties) were offered at discounted prices influencing a downward detached residential value trend. The strained residential market conditions are a product of unregulated sub-prime lending practices, a troubled financial industry.and national recessionary conditions. Information available from the local MIS, shows that there are 215 home listings in the Tri-Town area of Dacono. Firestone, and Frederick with an average price of$228,294. Over the past year 377 homes have sold with an average sales price of$224,301. Very limited residential lot sales have been enured into the N LS in the Carbon Valley over the past 12 to 18 months. There have also been a limited number of inquiries for the lots listed for sale. A market survey and analysis of Northern Colorado data indicates that lots have been selling between O1.000 and $30.000. ArceN siiliihii tit Illy +LIb ed liitie livid typical tit prices between$14.000 and$30,000. (itt.:i(ll'.' expanding t_ititi: t?t Frocletrict And 1=ir.stono in the early portion of 2000 resulted in an oversupply of detached residences and residential lots in the local market over the past few years. The contraction of the residential market and limited availability of financing has Ctrl:•.ipitously dirrtirlisheect demand liar homes and detached lots. A recovery to levels of development that occurred in 2004 and 2005 will unlikely return until financing becomes more readily available and job expansion returns in primary employment centers. In 2010, weak demand will be further limited by continued chronic oversupply from a combination of distressed home sa1c by individuals who have sttl tere'4t job tosses or other economic setbacks. and by the need for lenders to move foreclosure properties. in the past few months, there have been a !nirr+her of lot sales acquired by lenders and the 11)1C from builders unable to service their debt. This has provided a qualitative indication of decreasing price levels. Property owners have also begun to more realistically price residential properties stimulating some activity as well. Although sales ale dratiiaticalll discounted t oil! past price levels. it represenk inn k activity that was nearly non-existent in 2000 with builders shoeing increased interest in residential land. Market Paeticipaitt lat,^i'ti•kws In the development of the appraisal a 'uinlber of censoned !eal estate brokers. pt—opert� isles►liil!eis. and prupcct.: ite;•s. weR' ttiir; l�:,ae.:l r,ii-detir_' alt.:: ...i office. retail. and light industrial market. Some of the more pertinent interviews relating to the subject market are summarized below. iieunis :;chick is a it v11 estabiislied t`roker in Nuitherii Uolora&kf that has numerous listings for finished residential lots in Weld County iiidltleiing the adjoining St Vrain Ranch subdivision directly cast of the subject. There has been very limited land sates:activity in t nbo i Valtcy this ycl shaft is Itttti,hii ut p wj.pcd 0 11k.' ?,cite pLtSiti tlit'ir lot holdings through for closure.. The increased RIO inventories and limited �i�atlatttlity 6 LOTS Boon FARM COLORADO CERTIFIED APPR.AIs..Ls.LLC SUMMARIZED M.4Rl:r:r ANALYSIS of financing is having an adverse affect on lot values. Lot price trends will continue in a downward direction until the substantial bank owned and FDIC controlled inventories are reduced. This is unlikely to occur this year since a number of foreclosures are likely to occur throughout 2010. Shyla McKee is a broker with lot listings in the subject subdivision including one lot adjacent to the subject lots in Block 4. She has had her lots listed for sale at $34,000 for well over a year with no interest. Although it is generally accepted that 2009 was one of the most difficult marketing periods for residential lots, there does not appear to be much change in market conditions this year relative to last year. There was an increase in home sales when first home buyer tax credits were available, but sales activity immediately stalled when the stimulus expired. Home builders are unable to finance residential construction projects and home prices in the subject subdivision have been continuously decreasing. Billie io Downing is a broker that sold a lot in the Mad Russian subdivision in Milliken this year for $14.400. Four or five years ago the lots in the subdivision were selling for $55,000 to $65.000. There is very limited interest and sales activity in southwest Weld County. She currently has two more lotslisted for sale at. Si 8,11711 each. There has been no interest in the lots. She believes market conditions have not changed in 2010 relative to 2009 for vacant residential lots in Weld County.. I lle respondents ifid':iliilid as At ell as other market participants have not seen the anticipated rebound in the southwest residential lot market that was projected. The subject area appears to have been more dramatically affected by the current economic downturn and there have Lieu a �iuiii�l It of home and residential tV' 1QieClVsttft:s the past six to twelve months. Lot values arc below the cost to acquire the raw land and install infrastructure indicating that land development projects are not feasible. The most pit:dent LitAiotl fin lot l;1ttle «ould be to bold it enit�r,es until lildrk t condittolts stabiliZe which will certainly not occur in 2010. There has been interest in residential lots priced between $10.000 and 325.000 because at this level a speculative investor can al lord to hold an inventory lintel Il1FIrk et condlli(is lmpro\t'. I tlt' rl'Sitl:'llt:al tot \:flue trend will most likely continue in a downward direction for the remainder of the year. MEADOWS-WELLINGTON COLORADO CERTIFIED APPRAISALS,LLC SALES COMPARISON APPROACH SALES COMPARISON APPROACH When there are a number of recent land sales that have similar characteristics to the subject, the Sales Comparison Approach is one of the best land valuation approaches. Based on the principle of substitution, a prudent buyer would not pay more for the subject than the price required for a comparable substitute property. A summary of the most comparable sales and listings used to estimate the value of the subject lots is included in the chart below. Date \o I,ora1Ton `ales Price #of I /I or I of 4.11/0(SF) 01'Sale I Columbine Estates,Wellington 4 Lots Blocks B2.B3&B4 5/2010 $110,000 4 $27,500 6.700 Ave 2 1.ois Rlock R3&RI9 5/2010 550.000 2 $25.000 8.750 Ave 3 Lots Block 3&4 4/2010 $82.500 3 $27,500 7,100 Avc Lot 5,Block 2 1/2010 $24,000 1 $24,000 7,140 2 'limber Ridge,Severance Lot 12,Block 5 3/2010 533.000 1 $33,000 9,733 Lot 15,Block 5 5.2009 $29.000 1 $29,000 13.843 3 Nonume Creek,Frederick Fur Sale $33,400- 10 $33.400- 6,900—8,900 $36.500 $36,500 4 Mad Russian,Milliken 311 Heidie Lane 3:'2010 S14,400 I $14,400 7,320 Icidic l.ane For Sale $18,000- 3 $18,000- 7,320 $25,000 $25,000 5 Stroh Ranch,Johnstown 2134 Blue Wing 3/2010 $8,000 I $8,000 6,000 Multiple For Sale $9,750 4 $9,750 6,500 Ave (U/C) 6 St Vrain Ranch,Firestone lot 3,BIk 5,#5 4/2010 $40,000 I 540;000 9,831 Lot 19,B1k 5,#3 For Sale $39,000 5 $39,000 10,039 7 Grapevine Hollow,Evans 3334 Merlot 9/2009 $13,333 1 $13,333 6.098 Mult:plc For Sale S18,255 2 $18.255 6.200 Ave. 3 Johnson Farm,Frederick 5426 Drake Street 52010 $18,000 I $18,000 7,840 5485 Gunnison Drive For Sale $18,000 1 S18,000 6,534 9 Monarch Estates 4/2010 $60,000 3 $20,.00 9,117 to 10,428 10 Booth Farms,Firestone 10413 Cherryvaic For Sale $34,000 I $34,000 8,366 10475 Cimmarron For Sale $34,000 1 $34,000 8,049 26 • MEADOWS-WELLINGTON COLORADO CERTIFIED.APPR AlS ALS,LLC SALES COMPARISON APPROACH Lot sales volume has nearly stalled the past two years and both listings and sales have been displayed in determining the market retail value of each of the subject lots. Comparable #1 includes a summary of substantial lot sales activity in the Columbine Estate subdivision of Wellington. Columbine Estates is on the west side of Wellington were there have been substantial home development the past couple of years. The comparable lots are approximately 38 miles north of the subject in a similar suburban community as Firestone. WC Builders and Sage Homes have been acquiring lots between $24.000 and $27,500 over the past year in the comparable subdivision. Including independent builders. twenty-two lots sold in the subdivision the past twelve months with a number of homes under-construction on the effective date of this report. The lots are typically 7.100 square feet in size which is similar in size to the subject lots. Demand for homes in the comparable subdivision is superior to the subject subdivision and, overall, the comparable lot price range of$24.000 to 527.500 is above market for the subject. It is unlikely that a home developer in the subject Booth Farms subdivision would enjoy the success that WC Builders and Sage Homes has enjoyed. Comparable #2 is two lot sales similar in size to the subject lots in the Timber Ridge subdivision of Severance. The comparable subdivision is of an affordable nature with thirty-seven homes selling in the past fifteen months for an average price of $204.603. This is art entry home market that has performed well because of the first time home buyer credit that c\as available. Potential home buyers are also able to qualify for homes at this price level which will likely allow the home builders to continue selling homes at this pace. A home builder at the subject subdivision would unlikely sell a finished home at the subject subdivision as rapidly as the :omp.udbk. The strong demand for homes in the comparable subdivision is superior to the limited demand for homes at the subject subdivision and the 529.000 to $33.000 lot price range is above market for the subject lots. Comparable 3 includes information about listings in the NoName Creek Subdivision in Frederick. This is a lei\ snbditisit.un in the ;ubjcet located approximately one mile south of the subject. The subdivider initially offered lots for sale without raw water dedication and there %Sas limited response. There are currently ten lots available for sale that the listing agent disclosed includes the satisfaction of raw water. T'hc subdivider has no pressure to liquidate the lots and has no interest in selling below $33.400 per lot. Ile would consider financing the acquisition of all ten lots. There has been no interest in the comparable lots at this prig IC\c �iliu tilt\ betici lepic:,tr4 die lowest price the owner is willing to receive than a market indicated value. These are unrealistically priced lots above a market value for the subject lots. Comparable ''•1 is a tilarcii 2010 sale of a lilt at ..:I4.400 in the Mad Russian subdivision in Milliken. It also includes information about three listings. The comparable subdivision has a similar rural Northern, Colorado location like the subject subdivision. but has had tins i d tiOliand \\itl, the .....i„ The lot that sold was available for over three \ears at $65.000 \\ith the raw water deficit satisfied. The sellers eventual) accepted the 514.400 offer tiller the lung listing pciiud MEADOWS-WELLINGTON COLORADO CERTIFIED APPRAISALS.LLC SALES COMPARISON APPROACH and recognizing the substantial inventory of similar lots available in Weld County and Northern Colorado. The listing agent reported that she has two nearly identical sites available for $18.000 each with absolutely no interest. The comparable location has inferior access to community services and 1-25 like the subject. Overall, this is an inferior location and the $14.400 lot sale is below a market value for the subject lots. Comparable #5 includes a March 2010 sale and four listings of lots in the Stroh Ranch subdivision in Johnstown. Colorado. Johnstown has similar characteristics to Firestone. but is further from employment centers and is an overall inferior location. The comparable subdivision is also south of Central Johnstown and is inferior in nature to the subject subdivision. The comparable lots are FDIC assets and require the buyer to pay past due taxes. The listing agent reported that an additional $2.400 was required with the sale of the lot which equates to a total acquisition cost of$10.500. Seller motivation is also associated with the lot sale. There are an additional four lots available for $9.750 with approximately the same amount of past due taxes as the lot that sold. These lots are under-contract for less than the asking price. Considering the inferior location and seller motivation, the $10.500 acquisition price of the lot that sold is below market for the subject lots. Comparable #6 includes the asking price for five lots in the Saint Vrain Ranch subdivision directly east across Weld County Road 13 from the subject Booth Farms subdivision. It also includes the sale of one lot for $40.000 that was confirmed through public records and is not considered high(} reliable information. This is a very similar location and subdivision to the subject. There has been limited interest in the comparable lots at $39,000 although there is a single sale at $40.000. One listing agent reported that he had an inventory of lots listed at $72.000 each in the comparable subdivision with no interest and they are in the process of being foreclosed. This will add to the inventory of RED lots available in the local market placing greater downward pressure on market prices. Comparable #7 is a lot sale in the Grapevine Hollow subdivision in Evans directly south of the Greeley City limits. This is one of three lots that sold for$13.300 each with raw water deficits satisfied. Similar to the subject Carbon Valley area. there is a large inventory of lots available in Greeley stemming from the distressed residential market conditions. The comparable and the other two lots that sold for the same price represented excess inventory of a home builder. The comparable Evans location is inferior to the subject location and the $13.300 lot price is below a market value for the subject lots. The listing agent reported that there are two more lots available for a listing price of$18.255. but the seller would likely accept a lower offer. Comparable #8 is a May 2010 sale of a lot in Frederick that sold with the raw water deficit satisfied. The comparable Johnson Farm subdivision is similar in nature to the subject Booth Farms subdivision, but the comparable location is further from community services and is a slightly inferior location. In addition to the lot that sold. there is a lot available at the same $18.000 price. This is considered to be near. but slightly below a market lot value for the subject lots. 29 • MEADOWS-WELLINGTON COLORADO CERTIFIED APPRAISALS.LLC SALES COMPARISON APPROACH Comparable #9 is sales information obtained from public records and confirmed through recorded deeds. This is the Monarch Estates subdivision directly east of the subject with slightly inferior access to shopping amenities than the subject. The comparable sale includes information about three lots for$20.000 per lot. Comparable #10 is two lots currently listed for sale in the subject subdivision. One of the lots is adjacent to the subject lots along the western boundary and the other lot is an interior lot. The listing agent reported that there is no discernable difference for the lots along the western boundary. and interior lots. There has been no interest in the lots at this price level indicating that 534.000 per lot is above market for the subject lots. The subject ownership did not disclose a current asking price for the subject lots and there were no listings discovered in the local MLS or other typical listing services. The information provided shows that listings within the immediate subject area are typically 533.400 to $36,500 with limited response which is above a market level for the subject lots. Comparable #1 has had superior demand for housing providing a predictable absorption for home builders and the 524.000 to $27.500 price range is considered above market for the subject lots. Closed transactions within comparables#4, #5, #7, #8. and #9 are inferior to the subject indicating the $20.000 per lot price is below a base lot value for the subject. This supports a base lot price range of $20,000 to 524.000 for the subject lots which is reasonably rounded to a base lot value of$22,000. Comparable #2 provides sale data that shows there is not a premium paid for larger lots in suburban subdivisions like the subject. The comparable listings at the subject subdivision (comparable #10) and conversations with the listing agent additionally indicate that there is no indicated premium or discount for lots along the western boundary relative to interior lots. The subject ownership acquired five of the six lots for the same price as an inventory of lots to support production home development. There is no premium attributed to size of location for the lots in blocks 4 and 6. However, 5785 Shenandoah has a more prominent slope and is in a slightly less mature area than other five lots and has an estimated 10% discount from the base lot value to 520.000. Lot Value Summary SUBJECT LOT INVENTORY—Booth Farms#2 Legal Address Size Value Estimate Lot 44.Block 4 10437 Cherryxale Street 11.372 SF 522.000 Lot 43.Block 4 10435 Chem-ale Street 14.888 SF 522.000 Lot 7.Block 7 10414 Chen vale Street 8.334 SF $22,000 Lot 8. Block 7 10392 Cherryvale Street 6.652 SF S22.000 r Lot 9.Block 7 10380 Cherry ale Street 6.000 SF S22.000 Lot 9.Block 6 5785 Shenandoah.At e. 7.401 SF 520.000 Aggregate Retail Value 5130.000 30 NOTICE OF DETERMINATION Christopher M. Woodruff Date of Notice: 6/22/2011 Weld County Assessor Telephone: (970) 353-3845 or (720) 652-4255 1400 N 17th Ave Fax: (970) 304-6433 Greeley, CO 80631 E-mail: appeals@co.weld.co.us www.co.weld.co.us Office Hours: 8:00 AM - 5:00 PM SCHEDULE/ACCOUNT NO. TAX YEAR TAX AREA LEGAL DESCRIPTION/ PHYSICAL LOCATION R1222602 2011 2556 FIR 2BF L44 BLK4 BOOTH FARMS 2ND FG CC B&L LEASING LLC /,,,// 5833 SHENANDOAH AVE /t 37 e r r y o4 r FIRESTONE,CO 80504 cc 0. 0. O cc a ASSESSOR'S VALUATION PROPERTY CLASSIFICATION ACTUAL VALUE AFTER ACTUAL'VALUE PRIOR TO REVIEW REVIEW VACANT LAND 50,000 50,000 TOTAL $50,000 $50,000 The Assessor has carefully studied all available information, giving particular attention to the specifics included on your protest. The Assessor's determination of value after review is based on the following: ALO1 - Your property has been uniformly valued following Colorado law. Your protest of value has been denied due to comparison of other similar properties which sold during the 2009/2010 time period. If you disagree with the Assessor's decision, you have the right to appeal to the County Board of Equalization for further consideration, § 39-8-106(1)(a), C.R.S. The deadline for filing real property appeals is July 15. The deadline for filing personal property appeals is July 20. The Assessor establishes property values. The local taxing authorities (county, school district, city, fire protection, and other special districts) set mill levies. The mill levy requested by each taxing authority is based on a projected budget and the property tax revenue required to adequately fund the services it provides to its taxpayers. The local taxing authorities hold budget hearings in the fall. If you are concerned about mill levies, we recommend that you attend these budget hearings. Please refer to last year's tax bill dr ask your Assessor for a listing of the local taxing authorities. Please refer to the reverse side of this notice for additfion'alaMcirinatibri APPEAL PROCEDURES County Board of Equalization Hearings will be held from July 1 through August 5 at 915 101h Street, Greeley, CO To appeal the Assessor's decision, complete the Petition to the County Board of Equalization shown below, and mail or deliver a copy of both sides of this form to: Weld County Board of Equalization 915 10th Street, P.O. Box 758 Greeley, CO 80632 Telephone (970) 356-4000 Ext, 4225 To preserve your appeal rights, your Petition to the County Board of Equalization must be postmarked or delivered on or before July 15 for real property and on or before July 20 for personal property — after such date, your right to appeal is lost. You may be required to prove that you filed a timely appeal; therefore, we recommend that all correspondence be mailed with proof of mailing. You will be notified of the date and time scheduled for your hearing. The County Board of Equalization must mail a written decision to you within five business days following the date of the decision. The County Board of Equalization must conclude hearings and render decisions by August 5, § 39-8-107(2), C.R.S. If you do not receive a decision from the County Board of Equalization and you wish to continue your appeal, you must file an appeal with the Board of Assessment Appeals by September 12, § 39-2-125(1)(e), C.R.S. If you are dissatisfied with the County Board of Equalization's decision and you wish to continue your appeal, you must appeal within 30 days of the date of the County Board's written decision to ONE of the following: Board of Assessment Appeals District Court 1313 Sherman Street, Room 315 9th Avenue and 9th Street Denver, CO 80203 P.O. Box C (303) 866-5880 Greeley, Colorado 80632 www.dola.colorado.gov/baa (970) 356-4000 Ext. 4520 Binding Arbitration For a list of arbitrators, contact the County Commissioners at the address listed for the County Board of Equalization. If the date for filing any report, schedule, claim, tax return, statement, remittance, or other document falls upon a Saturday, Sunday, or legal holiday, it shall be deemed to have been timely filed if filed on the next business day, § 39-1-120(3), C.R.S. PETITION TO COUNTY BOARD OF EQUALIZATION What is your estimate of the property's value as of June 30, 2010? (Your opinion of value in terms of a specific dollar amount is required for real property pursuant to § 39-8-106(1.5), C.R.S.) $_7,2_/700 What is the basis for your estimate of value or your reason for requesting a review? (Please attach additional sheets as necessary and any supporting documentation, i.e., comparable sales, rent roll, odginal installed cost, appr��a,isal,,/etc.) 1 Q /i !/ //�.✓SivYlilil /p-, ,wzz n L J/e ///iii7F 0 A ESTATION I, the undersigned owner or agent' of the property identified above, affirm that the statements contained herein and on any attachments hereto are true and complete. o-yG5? 7//i ' n re 7 7 Telephone Number Date 15-DPT-AR PR 207-08/11 R1222602 12392 ' Attach letter of authorization signed by property owner. TO: Weld County Assessor FROM: B&L Leasing, LLC 5833 Shenandoah Ave. DATE: July 12,2011 Firestone,CO 80504 (720)560-9638 Lots in Booth Farms Filing#1 R1222502 Lot 43/BIk4 10435 Cherryvale $22,000 R1222602 Lot 44/Blk4 10437 Cherryvale $22,000 R1224102 Lot 9/Blk6 5785 Shenandoah $20,000 R1224802 Lot 7/Blk7 10414 Cherryvale $22,000 R1224902 Lot 8/B1k7 10392 Cherryvale $22,000 R1225002 Lot 9/B1k7 10380 Cherryvale $22,000 An appraisal was completed(full appraisal attached for reference)by Craig Castleberry on the above lots for the period 2009 and 1"half 2010. Attached are the certification/qualifications of Mr.Castleberry(pages 48-52 of the appraisal). A variety of methods were used to determine the above lot"values"(pages 5-7)with specific comments within the appraisal document supporting final values(pp 20,22,23,28-30). Appraiser determined: Page 7 * The$50,000 actual value of each lot is above market level. . . Page 20 * Current(mid 2010)residential lot prices are 40%to 70%below prices paid four to six years ago. Page 22 * Areas similar to the "subject" have had typical lot prices between$14,000 and$30,000. SUMMARY: (Page 30) • The information provided shows that listings within the immediate "subject" area are typically$33,400 to $36,500 with limited response which is above a market level for the "subject" lots. • Comparable#1 has had superior demand for housing providing a predictable absorption for home builders and the$24,000 to$27,500 price range is considered above market on the"subject"lots. • Closed transactions within Comparable#4,#5,#7,#8, and#9 are inferior to the"subject"indicating the $20,000 per lot price Is below a base lot value for the"subject". • This supports a base lot price range of$20,000 to$24,000 for the "subject" lots which is reasonably rounded to a base lot value of$22,000. There is not a premium paid for larger lots nor a premium/discount for western/interior lots. The lot with a more prominent slope was discounted 10%. Five lots valued at$22,000 and one lot at$20,000. B&L LEASING,LLC APPEAL(Additional Information) July 12,2011 Page 2 MARKET PARTICIPANT RESPONSES: Page 22 * There has been very limited land sales activity in Carbon Valley this year and a number of property owners are losing their lot holdings through foreclosure. Page 23 * . . .lots listed for sale at$34,000 for well over a year with no interest. Page 23 * . . .sold a lot in the Mad Russian subdivision in Milliken.. .for$14,400. . . .two more lots listed for sale at $18,000 each. There has been no interest in the lots. Page 26 SALES COMPARISON APPROACH Page 28 Comparable#1: WC Builders and Sage Homes have been acquiring lots between$24,000 and$27,500. .. . ..the comparable lot price range of$24,000 to$27,500 is above market for the "subject". Comparable#2 $29,000 to$33,000 lot price range is above market for the"subject"lots. Comparable#3 The subdivider has no pressure to liquidate the lots and has no interest in selling below$33,400 per lot. There has been no interest in the comparable lots at this price level... These are unrealistically priced lots above a market value for the"subject" lots. Comparable#4 The sellers eventually accepted the$14,400 offer. . . Page 29 . . .sites available for$18,000 each with absolutely no interest. Overall,this is an inferior location and the$14,400 lot sales is below a market value for the"subject" lots. Comparable#5 Considering the inferior location and seller motivation the$10,500 acquisition price of the lot that sold is below market for the"subject" lots. Comparable#6 There has been limited interest in the comparable lots at$39,000.. . Comparable#7 The comparable Evans location is inferior to the"subject"location and the$13,300 lot is below a market value for the"subject" lots. The listing agent reported that there are two more lots available for a listing price of$18,255,but the seller would likely accept a lower offer. Comparable#8 . . . is a slightly inferior location. . .. lot available at the same$18,000 price. This is considered to be near, but slightly below a market lot value for the"subject"lots. Page 30 Comparable#9 .. .three lots for$20,000 per lot. Comparable#10 There has been no interest in the lots at this price level indicating that$34,000 per lot is above market for the"subject"lots. R/zzzl0oz 6 LoTs BOOTH FARM COLORADO CERTIFIED APPRAISALS.LLC CERTIFICATION CERTIFICATION The following Certification statements are in addition to and may supersede any other Appraiser's Certification included or attached to this appraisal report. This Appraiser's Certification is compliant with the 2010 Uniform Standards of Professional Appraisal Practice. I certify that.to the best of our knowledge and belief: The statements of fact contained in this report are true and correct. The reported analyses. opinions, and conclusions are limited only- by the reported assumptions and limiting conditions. and is my personal. impartial. and unbiased professional analyses. opinions. and conclusions. I have no present or prospective interest in the property that is the subject of this report. and no personal interest with respect to the parties involved. I have not provided any past valuation analysis. consultation. or professional service of or relating to the subject sites. I have no bias with respect to the property that is the subject of this report or to the parties involved with this assignment. My engagement in this assignment was not contingent upon developing or reporting predetermined results. My compensation for completing this assignment is not contingent upon the development or reporting of a predetermined value or direction in value that favors the cause of the client. the amount of the value opinion. the attainment of a stipulated result. or the occurrence of a subsequent event directly related to the intended use of this appraisal. My analyses. opinions, and conclusions were developed. and this report has been prepared. in conformity with Uniform Standards of Professional Appraisal Practice. Craig Castleberry made a personal inspection of the property that is the subject of this report. No one provided significant real property appraisal assistance to the appraisers' signing this report. PURPOSE.INTENDED USE, AND INTENDED USER OF THE APPRAISAL: The purpose of the appraisal is to estimate the market value of the subject property. as defined in this report. on behalf of the referenced client as the intended user of this report. The intended use of the appraisal is to assist the client. as the intended user of this report. 48 6 LOTs BOOTH FARM COLORADO CERTIFIED APPR41S.ALS.LLC CERTIFICATION in evaluating the subject property for lending purposes. The use of this appraisal by anyone other than the stated intended user. or for any other use than the stated intended use, is prohibited. ANALYSIS AND REPORT FORM: This is a real property appraisal written in a Summary Report format. As such. data and analysis has been presented in a summary report format with more complete information retained in my files. The appraisal is based on the information gathered by the appraiser from public records. other identified sources. inspection of the subject property and neighborhood. and selection of comparable sales and listings within the subject and comparable market areas. When conflicting information was provided. the source deemed most reliable has been used. Craig Castleberry CO Certified General Appraiser #CG1323026 Exp. 12/31/2010 49 6 LOTS BOOTH FARM COLORADO CERTTFTED APPRAISALS.LLC Q[.'kuncATioNs APPRAISER QUALIFICATIONS CRAIG D. CASTLEBERRY COLORADO CERTIFIED GENERAL APPRAISER#CG01323026 Owner Colorado Certified Appraisals.LLC 615 Bross Street Longmont. Colorado 80501 Voice- (303)995-6017 Fax-(303) 774 - 8603 Generalized Summary and Location of Assignments Subdivisions Retail Office Industrial Garfield County Grand County Grand County Boulder County Boulder County Boulder County Boulder County Weld County Weld County Weld County Weld County Larimer County Adams County Adams County Adams County Arapahoe County Larimer County Larimer County Larimer County Larimer County Summit County Summit County Garfield County Garfield County Garfield County Garfield County Laramie. Wyo Rock Springs.Wyo Laramie, Wyo Ventura,CA Montana Oregon Since 1991,Mr. Castleberry has completed real property appraisal reports of various income and owner occupied commercial properties. His experience has been as a fee appraiser completing commercial/residential real estate appraisal reports in a narrative format in conformance to USPAP and accepted techniques of the Appraisal Institute. He is an associate member of the Appraisal Institute pursuing his MAI. Licenses: Colorado Certified General Appraiser tCG01323026 50 6 Lom BOOTH FkR.N4 COLORADO CERTIFIED APPRAISALS.LLC QUALIFICATIONS Related Coursework: Principles of Real Estate Appraisal Methods Income Capitalization NCRE 200-Principles of Real Estate Appraisal NCRE 208-Uniform Standards of Professional Appraisal Practice(USPAP) (USPAP Updates as promulgated for Continuing Education) NCRE 210-Residential Real Estate Appraisal Techniques NCRE 215-Development of a Real Estate Appraisal NCRE 222-Income Capitalization Techniques NCRE 225-Narrative Appraisal Review Colorado Real Estate Contracts and Law Environmental Issues in Commercial Real Estate Commercial Real Estate Financing Real Estate Law Real Estate Financing Real Estate Development Subdivision Valuation—Appraisal Institute Advanced Income Capitalization—Appraisal Institute Appraisal Clients: (A partial listing) Mile High Banks Boulder County Business Bank Compass Bank Boulder County Transportation Boulder County National Acceptance Company Farm Credit NCWCD Boulder Valley Public Schools Boulder West City of Longmont University of Colorado Colorado Department of Transportation Vectra Bank Colorado National Bank FirsTier Bank Guaranty Bank Crowder Mortgage Bank of The West M&T Banks Bank of Choice 51 • 6 ens Boom FARM COLORADO CERTIFIED APPRAISALS,LLC 1QUALIFICATIONS STATE OF COLORADO Department of Regulatory Agencies Division of Real Estate Ace r PRINTED i:`1 3 t,A . {_:e„ Gen Apprawer 13230;1; Jan 1 2008 Der 31 2010 Number Issue Date Extl/r0% ;:A16 S•!;Gi.A5 LASIICREttRy Sass; PY ✓` i 1 rangy r6'rza.,,..L`N to etnifo t3ftArULrr r • 52 12226 O7_ 6 LOTS BOOTH FARM COLORADO CER I'IFIED APPRAISALS.LLC SCOPE OF WORK Reasonable Exposure Time Reasonable exposure time is the estimated length of time the fee simple interest in the subject property would have been offered on the market prior to the hypothetical consummation of a sale at market value on the effective date of this report. July 20. 2010. Comparable lot sales provided in the subsequent Sales Comparison Approach section of this report have a days on the market range from 30 to 436 with tots listed for sale between 30 and over 700 days. These are misleading according to the listing brokers and do not take into account the period of time the lots were listed at unrealistic prices. A more realistic days on the market for the comparable sales is 30 to 180 days in consideration of adjusting the asking prices to market levels. Brokers interviewed concur with this estimate. There has been a significant inventory of lots with low sales volume over the past year. Based on current sales and broker interviews. a reasonable exposure period for each of the subject lots is estimated to be 30 to 90 days with an overall absorption of the subject inventory at 12 months or less. Property Appraised and Property Rights Appraised The subject property is an inventory of six residential lots in the second filing of the Booth Farms subdivision. These are in-fill lots with all infrastructure in place and raw water dedicated without water or sewer taps. The lots vary in size from 6.000 to 14.888 square feet in size. At your request. the retail value of each lot individually and in aggregate has been provided. In addition. the market and disposition values in a bulk sale scenario to a single purchaser of the fee simple interest in the subject lot inventory is being appraised. The following steps were conducted in appraising the subject property: 1. Gathered data from numerous secondary sources including: Weld County records. Colorado Bureau of Labor and Employment. U.S. Census Bureau, City of Firestone. multiple listing service, the appraisers' records. CoStar data services. Realty Rates investor survey. DMCAR real estate listing association. Burbach and Associates Real Estate Investment Survey. Frederick Ross Market Survey. and various economic and development authorities relating to the subject market. 2. Consulted various personnel relating to the appraisal assignment including: knowledgeable real estate professionals; parties related to data presented (buyer. seller, lessor, lessee, buyer's broker. seller's broker), and original data collection surveys. 3. Visually inspected the subject property and surrounding area on July 20. 2010 considered the effective date of the appraiser's opinions and value conclusions. 4. Researched public records for data on the subject. including zoning, utilities and assessments. 5. Analyzed the highest and best use of the property. 6 Lors BOOTH F.A\1 COLORADO CERTIFIED APPR.AIS.ALS.LLC SCOPE OF NA ORK 6. Searched the local market for land sales similar to the subject sites. 7. Analyzed the comparable sales for perceived differences with the subject sites and estimated a market value for the each of the subject lots as well as an aggregate retail value for the entire inventory. 8. Utilized a cash flow analysis by deducting holding costs and discounting the net income by an anticipated absorption period to estimate a bulk sale of the inventory to a single purchaser. 9. Analyzed and compared bulk sales to the subject inventory to determine the market value of the subject inventory in a bulk sale scenario to a single purchaser. 10. Reconciled the information provided to determine the individual lot values. aggregate retail value, and market value of'a bulk sale scenario to a single purchaser of the subject inventory. 11. estimated a discount to appl to the "as is-. market value in estimating the disposition value of the subject inventory in a bulk sale scenario to a single purchaser. 61.ars Boon!FARM COLORADO CERTIFIED AVM 41SALS.LLC REAL ESTATE TAXES REAL ESTATE TAXES The Weld County Assessors' office has estimated an equivalent $50.000 actual value for each of the six subject lots with an equivalent assessed value of$14.500. The 2009 mill levy is 93.927 and total taxes for the subject inventory are calculated as follows: Assessed Value Mill Levy Per Lot Taxes $14,500 x 0.093927 = $1.361.97 x 6 Lots Total Taxes $ 8.171.82 According to the Treasurers" office, current and past taxes have been paid in full. The $50,000 actual value of each lot is above a market level and a tax protest would be well advised and should result favorably for the ownership. • 6 LOTS BOOTH tARM COLORADO LERTWWIED APPRAISALS,LLC HIGHEST AND BEST USE HIGHEST AND BEST USE ANALYSIS Highest and Best Use is defined as: "The reasonable probable and legal use-of vacant land or an improved property. which is physically possible. appropriately supported. financially feasible. and that results in the highest value. "4 To determine the highest and best use of the subject site. the physically possible. legally permissible, and financially feasible alternatives have been considered. The subject lots are final platted in conformance to the Residential B zoning regulations for detached single-family home sites and have had an ODP specifying the size and use of the subject. A change in use would unlikely be desired or permitted. Raw water deficits have been satisfied and there are no outstanding issues that would prevent issuance of building permits. The lots vary from 6.000 to 14.888 square feet in size with sufficient topographical features and access to utilities to support detached residential development. 'There were no known environmental or hazardous conditions and the lots are outside 100 and 500 year flood hazard areas. Overall, the physical nature of the land supports the permitted use. When considering tk :at the subject property. the supple and demand for homes and lots in the local market was analyzed. The limited lot sales activity has been predominantly REO sales following foreclosure. Current residential lot prices are 40% to 70% below prices paid lour to six years ago. in fact, lots are being acquired below the cost to acquire the raw land, dedicate raw water. and install infrastructure. l..ocal brokers report that once stimulus incentives expired. housing activity throughout Southwest Weld County stalled. I here remains a limited availability of financing to support a local home builder to pursue development of the subject lots. Residential market conditions have not changed since last year and speculative home development is not just The highest and best use of the subject sites. arc to hold the lots until market conditions improve or an end user is identified. 'ThcTictionarc of Real Estate Appraisal 4th Edition.Appraisal Institute,2002 20 • b LOTS Boom FARM COLORADO CERTIFIED APPRAISALS.LLe. :SUMMARIZED MARKET ANALYSIS The area has experienced significant foreclosures because of difficulties associated with sub-prime mortgages. The bank owned homes (REO properties) were offered at discounted prices influencing a downward detached residential value trend. The strained residential market conditions are a product of unregulated sub-prime lending practices, a troubled financial industry.and national recessionary conditions. Information available from the local MLS, shows that there are 215 home listings in the Tri-Town area of Dacono. Firestone. and Frederick with an average price of$228,294. Over the past year 377 homes have sold with an average sales price of$224301. Very limited residential lot sales have been entered into the MLS in the Carbon Valley over the past 12 to 18 months. There have also been a limited number of inquiries for the lots listed for sale. A market survey and analysis of Northern Colorado data indicates that lots have been selling between 1;8.000 anti $S'i;.00f. Areas similar to die situjeet have had typkai lot prices between$14.000 and 530.000. t h rapidly expanding Cities: zt 1:reeteeiek. and Firestone ne in the early portion of 2000 resulted in an oversupply of detached residences and residential lots in the local market over the past few years. The contraction of the residential market and limited availability of financing has precipitously diminished tI inand if.1r horses and detached lots. A recovery to levels of development that occurred in 2004 and 2005 will unlikely return until financing becomes more readily availahhe and job expansion returns in primal-) employment centers. In 2010. weak demand will be further limited by continued chronic oversupply from a combination of distressed home sales by individuals who have siiffere(i lob losses or other economic setbacks_ and by the need for lenders to move foreclosure properties. in the past few months. there have been a iininhe9 of lot sales acquired bL lenders and the VOW front builders unable to service their debt. This has provided a qualitative: indication of decreasing price levels. Property owners have also begun to more realistically price residential properties stimulating sonic activity as well. Although sales ale dreuimtiealh discounted ilolii !WIN( ill lee: ice'e'1S, ii represents iinirwt;t activity tlt;it was nearly non-existent in 7009 with builders showing increased interest iii residential land. %ilitrket Paoli:pant Interviews in rho development of the appraisal a number of seasoned real estate brokers, properly managers, and prutteet;' (:Dili•!.. \e n :I tiL'jtte:\\4'i_j ?c. jiL{ftl;:. tll�. local and light industrial market. Some of the more pertinent interviews relating to the subject market arc summarized below. ��Luula .,cheek is a well established broker in Nvithem Coloradd that has numerous listings for finished residential lots in Weld County including the adjoining Si Vrain t aneh subdivision directly cast of the subject. There has been very limited land slakees activity in Cat bon Valley this>ea: anti os pow: ucrs etc ksmw ' tin-it lot holdings through foreclosure. The increased 100 inventorie: and limited availability 6 Lors Boom FARM COLORADO CERTIFIED APPRAISALS.LLC SL\t\l RILED\'IARiEr ANALYSIS of financing is having an adverse affect on lot values. Lot price trends will continue in a downward direction until the substantial bank owned and FDIC controlled inventories are reduced. This is unlikely to occur this year since a number of foreclosures are likely to occur throughout 2010. Shyla McKee is a broker with lot listings in the subject subdivision including one lot adjacent to the subject lots in Block 4. She has had her lots listed for sale at $34,000 for well over a year with no interest. Although it is generally accepted that 2009 was one of the most difficult marketing periods for residential lots, there does not appear to be much change in market conditions this year relative to last year. There was an increase in home sales when first home buyer tax credits were available. but sales activity immediately stalled when the stimulus expired. Home builders are unable to finance residential construction projects and home prices in the subject subdivision have been continuously decreasing. Billie 30 Downing is a broker that sold a lot in the Mad Russian subdivision in Milliken this year for $14.400. Four or five years ago the lots in the subdivision were selling for $55,000 to $65.000. There is very limited interest and sales activity in southwest Weld County. Shc currently has two more lots listed .for sale at $18..000 each. There has been no interest in the lots. She believes market conditions have not changed in 2010 relative to 2009 for vacant residential lots in Weld Count;. The respondents indentitied as t+III as either market participants have not seen the anticipated rebound in the southwest residential lot market that was projected. The subject area appears to have been more dramatically affected by the current economic downturn and there have been a film bet of home and residential tot foreclosuics the pass. six to twelve months.- Lot values are below the cost to acquire the rats land and install infrastructure indicating that land development projects arc not feasible. The roost prudent action lot lot ut:ners ttioulu be to hold inventories until market conditions stabilize which will certainly not occur in 2010. There has been interest in residential lots priced between $10.000 and S25.000 because at this level a speculative investor can al here! to hold an inventory until market conditions impro‘ . I he residential tot i alue trend will most likely continue in a downward direction for the remainder of the year. MEADOWS-WELLINGTON COLORADO CERTIFIED APPRAISALS.LLC SALES COMPARISON APPROACH SALES COMPARISON APPROACH When there are a number of recent land sales that have similar characteristics to the subject, the Saks Comparison Approach is one of the best land valuation approaches. Based on the principle of substitution, a prudent buyer would not pay more for the subject than the price required for a comparable substitute property. A summary of the most comparable sales and listings used to estimate the value of the subject lots is included in the chart below. hate Su l.oeation !Silk.Price 44'l.ut. ' 'I lit I.,» Si,r Oh A Sale I Columbine Estates,Wellington 4 Lots Blocks B2.B3&B4 5/2010 $110,000 4 527300 6,7(}0 Ave 2 1 aI.Block 83&319 5/2010 $50.000 2 525.000 8.750 Ave 3 Lois Block 3&4 4/2010 $82.500 3 527,500 7.100 Ave Lot 5.Block 2 1/2010 $24,000 I $24,000 7,140 2 Timber Ridge,Severance Lot 12.Block 5 3/2010 533.000 I 533.000 9,733 Lot 15,Block_5 5/2009 $29.000 1 $29,000 13,843 3 Noname Creek,Frederick For Sale $33,400- 10 533,400- 6.900—8.900 $36,500 $36,500 4 Mad Russian,Milliken 311 Heidie Lane 3:2010 514,400 1 $14,400 7,320 lcidie Lane For Sale $18.000- 3 $18,000- 7,320 $25,000 $25,000 5 Stroh Ranch.Johnstown 2134 Bloc Wing 3/2010 $8,000 I 58,000 6,000 Multiple For Sale $9,750 4 $9,750 6,500 Ave (U/C) 6 St Vrain Ranch,Firestone Lot 3,Blk 3,#5 4/2010 540,000 I 540,000 9,831 Lot 19.BIk 5,#3 For Sale $39,000 5 $39.000 10,039 7 Grapevine Hollow,Evans 3334 Merlot 9/2009 $13,333 1 513,333 6.098 Multiple For Sale 518,255 2 $18.255 6.200 Ave. 8 Johnson Farm,Frederick 5426 Drake Street 5/2010 S18,000 1 $18,000 7,840 5485 Gunnison Drive For Sale $18,000 I 518,000 6,534 9 Monarch Estates 4/2010 $60,000 3 $20,000 9,117 to 10,428 IU Booth Farms,Firestone 10413 Chcrryvalc For Sale 534,000 1 $34,000 8.366 10475 Cimmarron For Sale $34,000 1 $34,000 8.049 26 MEADOWS-WELLINGTON COLORADO CERii iwAPPRAISALS.LLC S ALES COMEARtSO`:APPROACH Lot sales volume has nearly stalled the past two years and both listings and sales have been displayed in determining the market retail value of each of the subject lots. Comparable #1 includes a summary of substantial lot sales activity in the Columbine Estate subdivision of Wellington. Columbine Estates is on the west side of Wellington were there have been substantial home development the past couple of years. The comparable lots are approximately 38 miles north of the subject in a similar suburban community as Firestone. WC Builders and Sage Homes have been acquiring lots between $24.000 and $27,500 over the past year in the comparable subdivision. Including independent builders. twenty-two lots sold in the subdivision the past twelve months with a number of homes under-construction on the effective date of this report. The lots are typically 7.100 square feet in size which is similar in size to the subject lots. Demand for homes in the comparable subdivision is superior to the subject subdivision and, overall, the comparable lot price range of$24.000 to$27.500 is above market for the subject. It is unlikely that a home developer in the subject Booth Farms subdivision would enjoy the success that WC Builders and Sage Homes has enjoyed. Comparable #2 is two lot sales similar in size to the subject lots in the Timber Ridge subdivision of Severance. The comparable subdivision is of an affordable nature with thirty-seven homes selling in the past fifteen months for an average price of $204.603. This is an entry home market that has performed well because of the first time home buyer credit that w as available. Potential hone buyers are also able to qualify for homes at this price level which will likely allow the home builders to continue selling homes at this pace. A home builder at the subject subdivision would unlikely sell a finished home at the subject subdivision as rapidly as the ::omparable. The strong demand for homes in the comparable subdivision is superior to the limited demand for homes at the subject subdivision and the $29.000 to $33.000 lot price range is above market for the subject lots. Comparable 3 includes information about listings in the NoName Creek Subdivision in Frederick. This is a ver' similar subdit•isi n to the subject located approximately one mile south of the subject. The subdivider initially offered lots for sale without raw water dedication and there was limited response. There are currently ten lots available for sale that the listing agent disclosed includes the satisfaction of raw water. The subdivider has no pressure to liquidate the lots and has no interest in selling below $33.400 per lot. l-I would consider financing the acquisition of all ten lots. There has been no interest in the comparable lots at this price level and beuei lepie u iL the lowest price the owner is willing to receive than a market indicated value. These are unrealistically priced lots above a market value for the subject lots. Comparable .?4l is a March 2010 sale of a lot at Sl4.400 in the Mad Russian subdivision in Milliken. It also includes information about three listings. The comparable subdivision has a similar rural Northern Colorado location like the subject subdivision. but has had limited demand is tl't the de—i.ii.it:Tiio in the !loosingIrta,ket. The lot that sold was available for over three 'ears at $65.000 with the raw water deficit satisfied. The sellers eventually accepted the $14.400 offer after the long listing period '_R MEADOWS-WELLINGTON COLORADO CERTIFIED APPR 41S LS.LLC SALES COMPARISON APPROACH and recognizing the substantial inventory of similar lots available in Weld County and Northern Colorado. The listing agent reported that she has two nearly identical sites available for $18.000 each with absolutely no interest. The comparable location has inferior access to community services and 1-25 like the subject. Overall, this is an inferior location and the $14.400 lot sale is below a market value for the subject lots. Comparable #5 includes a March 2010 sale and four listings of lots in the Stroh Ranch subdivision in Johnstown. Colorado. Johnstown has similar characteristics to Firestone. but is further from employment centers and is an overall inferior location. The comparable subdivision is also south of Central Johnstown and is inferior in nature to the subject subdivision. The comparable lots are FDIC assets and require the buyer to pay past due taxes. The listing agent reported that an additional $2.400 was required with the sale of the lot which equates to a total acquisition cost of$10.500. Seller motivation is also associated with the lot sale. There are an additional four lots available for $9.750 with approximately the same amount of past due taxes as the lot that sold. These lots are under-contract for less than the asking price. Considering the inferior location and seller motivation, the $10.500 acquisition price of the lot that sold is below market for the subject lots. Comparable #6 includes the asking price for five lots in the Saint Vrain Ranch subdivision directly east across Weld County Road 13 from the subject Booth Farms subdivision. It also includes the sale of one lot for $40.000 that was confirmed through public records and is not considered highly reliable information. This is a very similar location and subdivision to the subject. There has been limited interest in the comparable lots at $39,000 although there is a single sale at $40.000. One listing agent reported that he had an inventory of lots listed at $72.000 each in the comparable subdivision with no interest and they are in the process of being foreclosed. This will add to the inventory of REO lots available in the local market placing greater downward pressure on market prices. Comparable #7 is a lot sale in the Grapevine Hollow subdivision in Evans directly south of the Greeley City limits. This is one of three lots that sold for $13.300 each with raw water deficits satisfied. Similar to the subject Carbon Valley area, there is a large inventory of lots available in Greeley stemming from the distressed residential market conditions. The comparable and the other two lots that sold for the same price represented excess inventory of a home builder. The comparable Evans location is inferior to the subject location and the $13,300 lot price is below a market value for the subject lots. The listing agent reported that there are two more lots available for a listing price of$18,255. but the seller would likely accept a lower offer. Comparable #8 is a May 2010 sale of a lot in Frederick that sold with the raw water deficit satisfied. The comparable Johnson Farm subdivision is similar in nature to the subject Booth Farms subdivision. but the comparable location is further from community services and is a slightly inferior location. In addition to the lot that sold. there is a lot available at the same $18.000 price. This is considered to be near. but slightly below a market lot value for the subject lots. 29 MraaowS•WELLINGTON COLORADO CERTIFIED APPRAISALS.LLC SALES COMPARISON APPROACH Comparable #9 is sales information obtained from public records and confirmed through recorded deeds. This is the Monarch Estates subdivision directly east of the subject with slightly inferior access to shopping amenities than the subject. The comparable sale includes information about three lots for$20.000 per lot. Comparable #10 is two lots currently listed for sale in the subject subdivision. One of the lots is adjacent to the subject lots along the western boundary and the other lot is an interior lot. The listing agent reported that there is no discernable difference for the lots along the western boundary and interior lots. There has been no interest in the lots at this price level indicating that 534.000 per lot is above market for the subject lots. The subject ownership did not disclose a current asking price for the subject lots and there were no listings discovered in the local MLS or other typical listing services. The information provided shows that listings within the immediate subject area are typically 533.400 to $36.500 with limited response which is above a market level for the subject lots. Comparable #1 has had superior demand for housing providing a predictable absorption for home builders and the $24.000 to $27.500 price range is considered above market for the subject lots. Closed transactions within comparables#4, #5, #7. #8. and #9 are inferior to the subject indicating the $20.000 per lot price is below a base lot value for the subject. This supports a base lot price range of $20.000 to 524.000 for the subject lots which is reasonably rounded to a base lot value of$22,000. Comparable #2 provides sale data that shows there is not a premium paid for larger lots in suburban subdivisions like the subject. The comparable listings at the subject subdivision (comparable #10) and conversations with the listing agent additionally indicate that there is no indicated premium or discount for lots along the western boundary relative to interior lots. The subject ownership acquired five of the six lots for the same price as an inventory of lots to support production home development. There is no premium attributed to size of location for the lots in blocks 4 and 6. However, 5785 Shenandoah has a more prominent slope and is in a slightly less mature area than other five lots and has an estimated 10% discount from the base lot value to 520.000. Lot Value Summary SUBJECT LOT INVENTORY—Booth Farms l#2 Legal Address Size Value Estimate Lot 44.Block 4 10437 Cherry ale Street 1 I.372 SF $22.000 Lot 43.Block 4 10435 Chem-ale Street 14.888 SF $22.000 Lot 7.Block 7 10414 ChemYale Street 8.334 SF 522.000 Lot 8.Block 7 10392 Cherryyale Street 6.652 SF $22,000 r Lot 9.Block 7 10380 Cheri;vale Street 6.000 SF S22.000 Lot 9.Block 6 5785 Shenandoah.Ave. 7.401 SF $20.000 Aggregate Retail Value 5130.000 30 NOTICE OF DETERMINATION Christopher M. Woodruff Date of Notice: 6/22/2011 Weld County Assessor Telephone: (970) 353-3845 or (720) 652-4255 1400 N 17th Ave Fax: (970) 304-6433 Greeley, CO 80631 E-mail: appeals@co.weld.co.us www.co.weld.co.us Office Hours: 8:00 AM - 5:00 PM SCHEDULE/ACCOUNT NO. TAX YEAR TAX AREA LEGAL DESCRIPTION/ PHYSICAL LOCATION R1224102 2011 2556 FIR 2BF L9 BLK6 BOOTH FARMS 2ND FG cc z B&L LEASING LLC O 5833 SHENANDOAH AVE 47 gc She/with"p L'' r FIRESTONE,CO 80504 r x a. O O rt a. ASSESSOR'S VALUATION PROPERTY CLASSIFICATION ACTUAL VALUE PRIOR TO ACTUAL VALUE AFTER REVIEW REVIEW VACANT LAND 50,000 50,000 TOTAL $50,000 $50,000 The Assessor has carefully studied all available information, giving particular attention to the specifics included on your protest. The Assessor's determination of value after review is based on the following: AL01 - Your property has been uniformly valued following Colorado law. Your protest of value has been denied due to comparison of other similar properties which sold during the 2009/2010 time period. If you disagree with the Assessor's decision, you have the right to appeal to the County Board of Equalization for further consideration, § 39-8-106(1)(a), C.R.S. The deadline for filing real property appeals is July 15. The deadline for filing personal property appeals is July 20. The Assessor establishes property values. The local taxing authorities (county, school district, city, fire protection, and other special districts) set mill levies. The mill levy requested by each taxing authority is based on a projected budget and the property tax revenue required to adequately fund the services it provides to its taxpayers. The local taxing authorities hold budget hearings in the fall. If you are concerned about mill levies, we recommend that you attend these budget hearings. Please refer to last year's tax bra} fisk your Assessor for a listing of the local taxing authorities. Please refer to the reverse side of this notice for asipitdoidl ihfbrrnatik n: APPEAL PROCEDURES County Board of Equalization Hearings will be held from July 1 through August 5 at 915 10th Street, Greeley, CO To appeal the Assessor's decision, complete the Petition to the County Board of Equalization shown below, and mail or deliver a copy of both sides of this form to: Weld County Board of Equalization 915 10'h Street, P.O. Box 758 Greeley, CO 80632 Telephone (970) 356-4000 Ext, 4225 To preserve your appeal rights, your Petition to the County Board of Equalization must be postmarked or delivered on or before July 15 for real property and on or before July 20 for personal property— after such date, your right to appeal is lost. You may be required to prove that you filed a timely appeal; therefore, we recommend that all correspondence be mailed with proof of mailing. You will be notified of the date and time scheduled for your hearing. The County Board of Equalization must mail a written decision to you within five business days following the date of the decision. The County Board of Equalization must conclude hearings and render decisions by August 5, § 39-8-107(2), C-R.S. If you do not receive a decision from the County Board of Equalization and you wish to continue your appeal, you must file an appeal with the Board of Assessment Appeals by September 12, § 39-2-125(1)(e), C.R.S. If you are dissatisfied with the County Board of Equalization's decision and you wish to continue your appeal, you must appeal within 30 days of the date of the County Board's written decision to ONE of the following: Board of Assessment Appeals District Court 1313 Sherman Street, Room 315 9th Avenue and 9th Street Denver, CO 80203 P.O. Box C (303) 866-5880 Greeley, Colorado 80632 www.dola.colorado.qov/baa (970) 356-4000 Ext. 4520 Binding Arbitration For a list of arbitrators, contact the County Commissioners at the address listed for the County Board of Equalization. If the date for filing any report, schedule, claim, tax return, statement, remittance, or other document falls upon a Saturday, Sunday, or legal holiday, it shall be deemed to have been timely filed if filed on the next business day, § 39-1-120(3), C.R.S. PETITION TO COUNTY BOARD OF EQUALIZATION What is your estimate of the property's value as of June 30, 2010? (Your opinion of value in terms of a specific dollar amount is required for real property pursuant to § 39-8-106(1.5), C.R.S.) $ ZO coo What is the basis for your estimate of value or your reason for requesting a review? (Please attach additional sheets as necessary and any supporting documentation, i.e., comparable sales, rent roll, origin4nl installed cost,,ajpraisal, etc.) ,1Z t t4 , w„ /L, ,[3-Z)cno,e, O ii Ant-4 M-c) 4cac 6Od a / zed A STATION I, the undersigned owner or agent' of the property identified above, affirm that the statements contained herein and on any attachments tt/�� // .ts�hereto are true and complete. � /ce $ 72o-S��y�3� 71/4 iS nat re Telephone Number Date 15-DPT-AR PR 207-08/11 R1224102 12391 ' Attach letter of authorization signed by property owner. TO: Weld County Assessor FROM: B& L Leasing, LLC 5833 Shenandoah Ave. DATE: July 12,2011 Firestone,CO 80504 (720)560-9638 Lots In Booth Farms Filing#1 R1222502 Lot 43/Bik4 10435 Cherryvale $22,000 R1222602 Lot 44/BIk4 10437 Cherryvale $22,000 R1224102 Lot 9/B1k6 5785 Shenandoah $20,000 R1224802 Lot 7/B1k7 10414 Cherryvale $22,000 R1224902 Lot 8/B1k7 10392 Cherryvale $22,000 R1225002 Lot 9/BIk7 10380 Cherryvale $22,000 An appraisal was completed(full appraisal attached for reference)by Craig Castleberry on the above lots for the period 2009 and 1'r half 2010. Attached are the certification/qualifications of Mr.Castleberry(pages 48-52 of the appraisal). A variety of methods were used to determine the above lot"values"(pages 5-7)with specific comments within the appraisal document supporting final values(pp 20,22,23,28-30). Appraiser determined: Page 7 * The$50,000 actual value of each lot is above market level. . . Page 20 * Current(mid 2010) residential lot prices are 40%to 70%below prices paid four to six years ago. Page 22 * Areas similar to the "subject" have had typical lot prices between$14,000 and$30,000. SUMMARY: (Page 30) • The information provided shows that listings within the immediate"subject"area are typically$33,400 to $36,500 with limited response which is above a market level for the "subject" lots. • Comparable#1 has had superior demand for housing providing a predictable absorption for home builders and the$24,000 to$27,500 price range is considered above market on the "subject"lots. • Closed transactions within Comparable#4,#5,#7,#8,and#9 are inferior to the"subject"indicating the $20,000 per lot price is below a base lot value for the"subject". • This supports a base lot price range of$20,000 to$24,000 for the "subject" lots which is reasonably rounded to a base lot value of$22,000. There is not a premium paid for larger lots nor a premium/discount for western/interior lots. The lot with a more prominent slope was discounted 10%. Five lots valued at$22,000 and one lot at$20,000. B&L LEASING, LLC APPEAL(Additional Information) July 12,2011 Page 2 MARKET PARTICIPANT RESPONSES: Page 22 * There has been very limited land sales activity in Carbon Valley this year and a number of property owners are losing their lot holdings through foreclosure. Page 23 * . . .lots listed for sale at$34,000 for well over a year with no interest. Page 23 * . . .sold a lot in the Mad Russian subdivision in Milliken. . .for$14,400. . . .two more lots listed for sale at $18,000 each. There has been no interest in the lots. Page 26 SALES COMPARISON APPROACH Page 28 Comparable#1: WC Builders and Sage Homes have been acquiring lots between$24,000 and$27,500. . . . . .the comparable lot price range of$24,000 to$27,500 is above market for the "subject". Comparable#2 $29,000 to$33,000 lot price range is above market for the"subject"lots. Comparable#3 The subdivider has no pressure to liquidate the lots and has no interest in selling below$33,400 per lot. There has been no interest in the comparable lots at this price level... These are unrealistically priced lots above a market value for the"subject"lots. Comparable#4 The sellers eventually accepted the$14,400 offer. . . Page 29 . . .sites available for$18,000 each with absolutely no interest. Overall,this is an inferior location and the$14,400 lot sales is below a market value for the"subject" lots. Comparable#5 Considering the inferior location and seller motivation the$10,500 acquisition price of the lot that sold is below market for the"subject"lots. Comparable#6 There has been limited interest in the comparable lots at$39,000. . . Comparable#7 The comparable Evans location is inferior to the"subject" location and the$13,300 lot is below a market value for the"subject" lots. The listing agent reported that there are two more lots available for a listing price of$18,255,but the seller would likely accept a lower offer. Comparable#8 . . . is a slightly inferior location. . . . lot available at the same$18,000 price. This is considered to be near, but slightly below a market lot value for the"subject"lots. Page 30 Comparable#9 . . three lots for$20,000 per lot. Comparable#10 There has been no interest in the lots at this price level indicating that$34,000 per lot is above market for the"subject"lots. IZZyI0Z 6 LOTS Boom FARM COLOR ADO CERTIFIED APPRAISALS.LLC CERTIFICATIONS CERTIFICATION The following Certification statements are in addition to and may supersede any other Appraiser's Certification included or attached to this appraisal report. This Appraiser's Certification is compliant with the 2010 Uniform Standards of Professional Appraisal Practice. I certify that, to the best of our knowledge and belief: The statements of fact contained in this report are true and correct. The reported analyses. opinions. and conclusions are limited only by the reported assumptions and limiting conditions. and is my personal. impartial. and unbiased professional analyses. opinions. and conclusions. I have no present or prospective interest in the property that is the subject of this report. and no personal interest with respect to the parties involved. I have not provided any past valuation analysis. consultation, or professional service of or relating to the subject sites. I have no bias with respect to the property that is the subject of this report or to the parties involved with this assignment. My engagement in this assignment was not contingent upon developing or reporting predetermined results. My compensation for completing this assignment is not contingent upon the development or reporting of a predetermined value or direction in value that favors the cause of the client, the amount of the value opinion, the attainment of a stipulated result. or the occurrence of a subsequent event directly related to the intended use of this appraisal. My analyses, opinions, and conclusions were developed. and this report has been prepared, in conformity with Uniform Standards of Professional Appraisal Practice. Craig Castleberry made a personal inspection of the property that is the subject of this report. No one provided significant real property appraisal assistance to the appraisers' signing this report. PURPOSE. INTENDED USE.AND INTENDED USER OF THE APPRAISAL: The purpose of the appraisal is to estimate the market value of the subject property, as defined in this report, on behalf of the referenced client as the intended user of this report. The intended use of the appraisal is to assist the client. as the intended user of this report. 48 6 LOTS Boom FARU COLORADO CERTIFIED APPRAISALS.LLC CERTIFICATION in evaluating the subject property for lending purposes. The use of this appraisal by anyone other than the stated intended user, or for any other use than the stated intended use. is prohibited. ANALYSIS AND REPORT FORM: This is a real property appraisal written in a Summary Report format. As such, data and analysis has been presented in a summary report format with more complete information retained in my files. The appraisal is based on the information gathered by the appraiser from public records. other identified sources. inspection of the subject property and neighborhood, and selection of comparable sales and listings within the subject and comparable market areas. When conflicting information Ns as provided. the source deemed most reliable has been used. Craig Castleberry CO Certified General Appraiser #CG1323026 Exp. 12/31/2010 49 6 Los Boom FARM COLORADO CERTIFIED APPRAISALS,LLC QUALIFICATIONS APPRAISER QUALIFICATIONS CRAIG D. CASTLEBERRY COLORADO CERTIFIED GENERAL APPRAISER#CG01323026 Owner Colorado Certified Appraisals, LLC 615 Bross Street Longmont. Colorado 80501 Voice-(303)995—6017 Fax—(303) 774 - 8603 Generalized Summary and Location of Assignments Subdivisions Retail Office Industrial Garfield County Grand County Grand County Boulder County Boulder County Boulder County Boulder County Weld County Weld County Weld County Weld County Larimer County Adams County Adams County Adams County Arapahoe County Larimer County Larimer County. Larimer County Larimer County Summit County Summit County Garfield County Garfield County Garfield County Garfield County Laramie,Wyo Rock Springs,Wyo Laramie,Wyo Ventura,CA Montana Oregon Since 1991,Mr. Castleberry has completed real property appraisal reports of various income and owner occupied commercial properties. I-Es experience has been as a fee appraiser completing commercial/residential real estate appraisal reports in a narrative format in conformance to USPAP and accepted techniques of the Appraisal Institute. He is an associate member of the Appraisal Institute pursuing his MAI. Licenses: Colorado Certified General Appraiser#CG01323026 50 6 LOTS BOOTH FARM COLORADO CERTIFIED APPRAISALS,LLC QUALIFICATIONS Related Coursework: Principles of Real Estate Appraisal Methods Income Capitalization NCRE 200-Principles of Real Estate Appraisal NCRE 208-Uniform Standards of Professional Appraisal Practice(USPAP) (USPAP Updates as promulgated for Continuing Education) NCRE 210-Residential Real Estate Appraisal Techniques NCRE 215-Development of a Real Estate Appraisal NCRE 222-Income Capitalization Techniques NCRE 225-Narrative Appraisal Review Colorado Real Estate Contracts and Law Environmental Issues in Commercial Real Estate Commercial Real Estate Financing Real Estate Law Real Estate Financing Real Estate Development Subdivision Valuation—Appraisal Institute Advanced Income Capitalization—Appraisal Institute Appraisal Clients: (A partial listing) Mile High Banks Boulder County Business Bank Compass Bank Boulder County Transportation Boulder County National Acceptance Company Farm Credit NCWCD CD Boulder Valley Public Schools Boulder West City of Longmont University of Colorado Colorado Department of Transportation Vectra Bank Colorado National Bank FirsTier Bank Guaranty Bank Crowder Mortgage Bank of The West M&T Banks Bank of Choice Si 6 LOTS Boom FARM COLORADO Cpai&mD APPRAISALS,LLC QUALIFICATIONS STATE OF COLORADO Department of Regulatory Agencies Division of Real Estate PRINT sz Ac1re C.et1 Gen Appra:rier 13236.4, Jan 1 2008 I Dec 31 201n Number Issue Date Expire:, cANC :If H;GI AB r.ASTI,,Et3E C., M.6=:,$N1FS$• /1 1 1 - rap Aim r :..:Ur Yr,eRFRP 0 7nxttu>e • 52 %ZZ y/ oz. 6 LoTs BOOTH FUM COLORADO CERTIFIED APPRAISALS.LLC SCOPE OF WORK Reasonable Exposure Time Reasonable exposure time is the estimated length of time the fee simple interest in the subject property would have been offered on the market prior to the hypothetical consummation of a sale at market value on the effective date of this report. July 20. 2010. Comparable lot sales provided in the subsequent Sales Comparison Approach section of this report have a days on the market range from 30 to 436 with lots listed for sale between 30 and over 700 days. These are misleading according to the listing brokers and do not take into account the period of time the lots were listed at unrealistic prices. A more realistic days on the market for the comparable sales is 30 to 180 days in consideration of adjusting the asking prices to market levels. Brokers interviewed concur with this estimate. There has been a significant inventory of lots with low sales volume over the past year. Based on current sales and broker interviews. a reasonable exposure period for each of the subject lots is estimated to be 30 to 90 days with an overall absorption of the subject inventory at 12 months or less. Property Appraised and Property Rights Appraised The subject property is an inventory of six residential lots in the second filing of the Booth Farms subdivision. These are in-fill lots with all infrastructure in place and raw water dedicated without water or sewer taps. The lots vary in size from 6,000 to 14,888 square feet in size. At your request. the retail value of each lot individually and in aggregate has been provided. In addition, the market and disposition values in a bulk sale scenario to a single purchaser of the fee simple interest in the subject lot inventory is being appraised. The following steps were conducted in appraising the subject property: 1. Gathered data from numerous secondary sources including: Weld County records. Colorado Bureau of Labor and Employment. U.S. Census Bureau, City of Firestone. multiple listing service. the appraisers' records. CoStar data services, Realty Rates investor survey. DMCAR real estate listing association. Burbach and Associates Real Estate Investment Survey, Frederick Ross Market Survey, and various economic and development authorities relating to the subject market. 2. Consulted various personnel relating to the appraisal assignment including: knowledgeable real estate professionals; parties related to data presented (buyer, seller, lessor, lessee, buyer's broker, seller's broker), and original data collection surveys. 3. Visually inspected the subject property and surrounding area on July 20, 2010 considered the effective date of the appraiser's opinions and value conclusions. 4. Researched public records for data on the subject, including zoning, utilities and assessments. 5. Analyzed the highest and best use of the pr VIM ty. 5 6 Lars Boom FARM COLORADO CERTIFIED APPRAISALS.LLC SCOPE OF WORK 6. Searched the local market for land sales similar to the subject sites. 7. Analyzed the comparable sales for perceived differences with the subject sites and estimated a market value for the each of the subject lots as well as an aggregate retail value for the entire inventory. 8. Utilized a cash flow analysis by deducting holding costs and discounting the net income by an anticipated absorption period to estimate a bulk sale of the inventory to a single purchaser. 9. Analyzed and compared bulk sales to the subject inventory to determine the market value of the subject inventory in a bulk sale scenario to a single purchaser. 10. Reconciled the information provided to determine the individual lot values, aggregate retail value, and market value of a bulk sale scenario to a single purchaser of the subject inventor. 11. Estimated a discount to apply to the "as is" market value in estimating the disposition value of the subject inventory in a bulk sale scenario to a single purchaser. 6 6I ZITS Boom FARM COLORADO CERnFIED APPRAISALS.LLC REAL ESTATE TA)fr5 REAL ESTATE TAXES The Weld County Assessors' office has estimated an equivalent $50,000 actual value for each of the six subject lots with an equivalent assessed value of$14,500. The 2009 mill levy is 93.927 and total taxes for the subject inventory are calculated as follows: Assessed Value Mill Levy Per Lot Taxes $14,500 x 0.093927 = $1,361.97 x 6 Lots Total Taxes $ 8.171.82 According to the Treasurers' office, current and past taxes have been paid in full. The S50,000 actual value of each lot is above a market level and a tax protest would be well advised and should result favorably for the ownership. 7 6 LOS BOOTH FARM COLORADO CERTIFIED APPRAISALS,LLC HIGHEST AND BEST USE HIGHEST AND BEST USE ANALYSIS Highest and Best Use is defined as: "The reasonable probable and legal use of vacant land or an improved property, which is physically possible, appropriately supported financially feasible, and that results in the highest value. "4 To determine the highest and best use of the subject site, the physically possible, legally permissible, and financially feasible alternatives have been considered. The subject lots are final platted in conformance to the Residential B zoning regulations for detached single-family home sites and have had an ODP specifying the size and use of the subject. A change in use would unlikely be desired or permitted. Raw water deficits have been satisfied and there are no outstanding issues that would prevent issuance of building permits. The lots vary from 6,000 to 14.888 square feet in size with sufficient topographical features and access to utilities to support detached residential development. There were no known environmental or hazardous conditions and the lots are outside 100 and 500 year flood hazard areas. Overall, the physical nature of the land supports the permitted use. When et,usidering the feasible uses at the subject property, the supply and demand for homes and lots in the local market was analyzed. The limited lot sales activity has been predominantly REO sales following foreclosure. Current residential lot prices are 40% to 70% below prices paid four to six years ago. In fact, lots are being acquired below the cost to acquire the raw land, dedicate raw water, and install infrastructure. Local brokers report that once stimulus incentives expired, housing activity throughout Southwest Weld County stalled. there remains a limited availability of financing to support a local home builder to pursue development of the subject lots. Residential market conditions have not changed since last year and speculative home development is not justified The highest and best use of the subject sites. are to hold the lots until market conditions improve or an end user is identified. 'The Dictionan of Real Estate Appraisal.4th Edition.Appraisal Institute.2002 20 6 Lots BOOTH FARM COLORADO CERTIFIED APPRAISALS.LLC JC titNIAR inn MARKL7 A ALYSIS The area has experienced significant foreclosures because of difficulties associated with sub-prime mortgages. The bank owned homes (REO properties) were offered at discounted prices influencing a downward detached residential value trend. The strained residential market conditions are a product of unregulated sub-prime lending practices, a troubled financial industry,and national recessionary conditions. Information available from the local MLS, shows that there are 215 home listings in the Tri Town area of Dacono, Firestone, and Frederick with an average price of$228,294. Over the past year 377 homes have sold with an average sales price of$224.301. Very limited residential lot sales have been entered into the MLS in the Carbon Valley over the past 12 to 18 months. There have also been a limited number of inquiries for the lots listed for sale. A market survey and analysis of Northern Colorado data indicates that lots have been selling between $8.000 and $80,000. Areas similar to the subject.have had tpie�id let prices between$14,000 and$30,000. r l h.. rapidly expanding Cities. or Frederick anti Fircctpnc in the early portion of 2000 resulted in an oversupply of detached residences and residential lots in the local market over the past few years. The contraction of the residential market and limited availability of financing has precipitously diminished demand fur homes and detached lots. A recovery to levels of development that occurred in 2004 and 2005 will unlikely return until financing becomes more readily available and job expansion returns in primary employment centers. in 2010, weak demand will be further limited by continued chronic oversupply from a combination of distressed home sales by individuals who have suffered job losses or other economic setbacks, and by the need for lenders to move foreclosure properties. in the past few months, there have been ec number of lot sales acquired by lenders and the FDIC from builders unable to service their debt. This has provided a qualitative indication of decreasing price levels. Property owners have also begun to more realistically price residential properties stimulating some activity as well. Although sales alt- dramatically 1; ftorn past pi ice levels. it represents market activity that was nearly non-existent in 2.009 with builders showing increased interest in residential land. maket l;'artieipaIIt Interviews in the development of the appraisal a number of seasoned real estate brokers, property managers, and pruperty owners woe e interviewed ri g.ardiin .. the local office, retail, and light industrial market. Some of the more pertinent interviews relating to the subject market arc summarized below. i)cnnis Schick is a swell established broker in Northern C:oloradd that has numerous listings for finished residential lots in Weld County including the adjoining St Vrain Ranch subdivision directly cast of the subject. There has been very tintited land sates activity iti t:srborc Valley this year anti a numberof pia}arty owners ate losing their lot holdings through foreclosure. The increased 1OO inventories and limited availability • 6 Lots Boom FARM COLORADO CERTIFIED APPRAJSALS.LLC SUMMARIZED MARKET ANALYSIS of financing is having an adverse affect on lot values. Lot price trends will continue in a downward direction until the substantial bank owned and FDIC controlled inventories are reduced. This is unlikely to occur this year since a number of foreclosures are likely to occur throughout 2010. Shyla McKee is a broker with lot listings in the subject subdivision including one lot adjacent to the subject lots in Block 4. She has had her lots listed for sale at $34,000 for well over a year with no interest. Although it is generally accepted that 2009 was one of the most difficult marketing periods for residential lots, there does not appear to be much change in market conditions this year relative to last year. There was an increase in home sales when first home buyer tax credits were available, but sales activity immediately stalled when the stimulus expired. Home builders are unable to finance residential construction projects and home prices in the subject subdivision have been continuously decreasing. Billie Jo Downing is a broker that sold a lot in the Mad Russian subdivision in Milliken this year for $14,400. Four or five years ago the lots in the subdivision were selling for $55,000 to $65,000. There is very limited interest and sales activity in southwest Weld County. She currently has two more lots listed for sale at$15,000 each. There has been no interest in the lots. She believes market conditions have not changed in 2010 relative to 2009 for vacant residential lots in Weld County. The ,espondcnty indentitied as well as other market participants have not seen the anticipated rebound in the southwest residential lot market that was projected. The subject area appears to have been more dramatically affected by the current economic downturn and there have been a nunihei of home and residential lot foicelosuies the past six to twelve months. Lot values arc below the cost to acquire the raw land and install infrastructure indicating that land development projects arc not feasible. The most prudent action for lot owners would be to hold inventories until market conditions stabiliLe which will certainly not occur in 2010. There has been interest in residential lots priced between $10,000 and $25.000 because at this level a speculative investor can afford to hold an inventory until market conditions improve. I lic residential lot value trend will most likely continue in a downward direction for the remainder of the year. • 23 MEADOWS-WELLINGTON COLORADO CERTIFIED APPRAISALS.LLC SALES COMPARISON APPROACH SALES COMPARISON APPROACH When there are a number of recent land sales that have similar characteristics to the subject, the Sales Comparison Approach is one of the best land valuation approaches. Based on the principle of substitution, a prudent buyer would not pay more for the subject than the price required for a comparable substitute property. A summary of the most comparable sales and listings used to estimate the value of the subject lots is included in the chart below. mar \u Location 'Nth,Prier P.uii m. C I nl I.nl Sift'1•41 ut Nick 1 Columbine Estates,Wellington 4 Lots Blocks B2.B3&134 5/2010 $110,000 4 $27,500 6,700 Ave 2 lots Block B3&B 19 5/2010 $50.000 2 $25,000 8.750 Ave 3 Lois Block 3&4 4/2010 $82,500 3 $27,500 7.100 Ave Lot 5,Block 2 12010 $24,000 I $24,000 7,140 2 Timber Ridge,Severance Lot 12,Block 5 3/2010 $33,000 I $33,000 9,733 Lot 15,Block 5 5/2009 $29,000 1 $29,000 13,843 3 Noaame Creek,Frederick For Sale $33,400- 10 $33,400- 6,900—8,900 $36,500 $36,500 4 Mad Russian,Milliken 311 Heidie Lane 32010 $14,400 1 $14,400 7,320 Ikidie lane For Sale $18,000- 3 $18,000- 7,320 $25,000 $25,000 5 Stroh Ranch,Johnstown 2134 Blue Wing 3/2010 $8,000 1 $8,000 6,000 Multiple For Sale $9,750 4 $9,750 6,500 Ave (U/C) 6 St Vrain Ranch,Firestone Lot 3,B1k 5,#5 42010 540,000 1 $40,000 9,831 Lot 19,Blk 5,#3 For Sale $39,000 5 $39,000 10,039 7 Grapevine Hollow,Evans 3334 Mcrlot 9/2009 $13,333 I $13,333 6,098 Multiple For Sale $18,255 2 $18,255 6.200 Ave. 8 Johnson Farm,Frederick 5426 Drake Street 5/2010 $18,000 1 $18,000 7,840 5485 Gunnison Drive For Sale $18,000 I $18,000 6,534 9 Monarch Estates 4/2010 $60,000 3 $20,000 9,117 to 10,428 10 Booth Farms,Firestone 10413 Cherryvale For Sale $34,000 I $34,000 8,366 10475 Cimmarron For Sale $34,000 I $34,000 8,049 26 MEADOWS-WELLINGTON COLORADO CERTIFIED APPRAISALS.LLC SALES COMPARISON APPROACH Lot sales volume has nearly stalled the past two years and both listings and sales have been displayed in determining the market retail value of each of the subject lots. Comparable #1 includes a summary of substantial lot sales activity in the Columbine Estate subdivision of Wellington. Columbine Estates is on the west side of Wellington were there have been substantial home development the past couple of years. The comparable lots are approximately 38 miles north of the subject in a similar suburban community as Firestone. WC Builders and Sage Homes have been acquiring lots between $24.000 and $27.500 over the past year in the comparable subdivision. Including independent builders. twenty-two lots sold in the subdivision the past twelve months with a number of homes under-construction on the effective date of this report. The lots are typically 7.100 square feet in size which is similar in size to the subject lots. Demand for homes in the comparable subdivision is superior to the subject subdivision and,overall,the comparable lot price range of$24,000 to $27,500 is above market for the subject. It is unlikely that a home developer in the subject Booth Farms subdivision would enjoy the success that WC Builders and Sage Homes has enjoyed. Comparable #2 is two lot sales similar in size to the subject lots in the Timber Ridge subdivision of Severance. The comparable subdivision is of an affordable nature with thirty-seven homes selling in the past fifteen months for an average price of $204,603. This is an entry home market that has performed well because of the first time home buyer credit that was available. Potential home buyers are also able to qualify for homes at this price level which will likely allow the home builders to continue selling homes at this pace. A home builder at the subject subdivision would unlikely sell a finished home at the subject subdivision as rapidly as the comparable. The strong demand for homes in the comparable subdivision is superior to the limited demand for homes at the subject subdivision and the $29,000 to $33.000 lot price range is above market for the subject lots. Comparable f3 includes information about listings in the NoName Creek Subdivision in Frederick. This is a er> similar subdivision to the subject located approximately one mile south of the subject. The subdivider initially offered lots for sale without raw water dedication and there was limited response. There are currently ten lots available for sale that the listing agent disclosed includes the satisfaction of raw water. The subdivider has no pressure to liquidate the lots and has no interest in selling below $33,400 per lot. He would consider financing the acquisition of all ten lots. There has been no interest in the comparable lots at this price level and they better rcpiesent ilic lowest price the owner is willing to receive than a market indicated value. These are unrealistically priced lots above a market value for the subject lots. Comparable f ,1- is a March 2010 sale of a lot at S 14.400 in the Mad Russian subdivision in Milliken. It also includes information about three listings. The comparable subdivision has a similar rural Northern Colorado location like the subject subdivision. but has had limited demand with the de erii itttiii': is the housing market. The lot that sold was available for over three years at 565.000 'pith the raw water deficit satisfied. The sellers eventually accepted the $14.400 offer after the long listing Iiciiud MEADOWS-WELLINGTON COLORADO CERTIFIED APPRAISALS,LLC SALES COAIP.ARISON APPROACH and recognizing the substantial inventory of similar lots available in Weld County and Northern Colorado. The listing agent reported that she has two nearly identical sites available for $18.000 each with absolutely no interest. The comparable location has inferior access to community services and 1-25 like the subject. Overall, this is an inferior location and the $14.400 lot sale is below a market value for the subject lots. Comparable #5 includes a March 2010 sale and four listings of lots in the Stroh Ranch subdivision in Johnstown. Colorado. Johnstown has similar characteristics to Firestone. but is further from employment centers and is an overall inferior location. The comparable subdivision is also south of Central Johnstown and is inferior in nature to the subject subdivision. The comparable lots are FDIC assets and require the buyer to pay past due taxes. The listing agent reported that an additional $2.400 was required with the sale of the lot which equates to a total acquisition cost of$10.500. Seller motivation is also associated with the lot sale. There are an additional four lots available for $9.750 with approximately the same amount of past due taxes as the lot that sold. These lots are under-contract for less than the asking price. Considering the inferior location and seller motivation, the $10.500 acquisition price of the lot that sold is below market for the subject lots. Comparable #6 includes the asking price for five lots in the Saint Vrain Ranch subdivision directly east across Weld County Road 13 from the subject Booth Farms subdivision. It also includes the sale of one lot for $40.000 that was confirmed through public records and is not considered highly reliable information. This is a very similar location and subdivision to the subject. There has been limited interest in the comparable lots at$39,000 although there is a single sale at $40.000. One listing agent reported that he had an inventory of lots listed at $72.000 each in the comparable subdivision with no interest and they are in the process of being foreclosed. This will add to the inventory of REO lots available in the local market placing greater downward pressure on market prices. Comparable#7 is a lot sale in the Grapevine Hollow subdivision in Evans directly south of the Greeley City limits. This is one of three lots that sold for $13.300 each with raw water deficits satisfied. Similar to the subject Carbon Valley area, there is a large inventory of lots available in Greeley stemming from the distressed residential market conditions. The comparable and the other two lots that sold for the same price represented excess inventory of a home builder. The comparable Evans location is inferior to the subject location and the $13,300 lot price is below a market value for the subject lots. The listing agent reported that there are two more lots available for a listing price of$18,255. but the seller would likely accept a lower offer. Comparable #8 is a May 2010 sale of a lot in Frederick that sold with the raw water deficit satisfied. The comparable Johnson Farm subdivision is similar in nature to the subject Booth Farms subdivision, but the comparable location is further from community services and is a slightly inferior location. In addition to the lot that sold, there is a lot available at the same $18.000 price. This is considered to be near. but slightly below a market lot value for the subject lots. 29 MEADOWS-WELLINGTON COLORADO CERTIFIED APPRAISAL&LLC SALES COMPARISON APPROACH Comparable #9 is sales information obtained from public records and confirmed through recorded deeds. This is the Monarch Estates subdivision directly east of the subject with slightly inferior access to shopping amenities than the subject. The comparable sale includes information about three lots for$20.000 per lot. Comparable #10 is two lots currently listed for sale in the subject subdivision. One of the lots is adjacent to the subject lots along the western boundary and the other lot is an interior lot. The listing agent reported that there is no discernable difference for the lots along the western boundary and interior lots. There has been no interest in the lots at this price level indicating that $34.000 per lot is above market for the subject lots. The subject ownership did not disclose a current asking price for the subject lots and there were no listings discovered in the local MLS or other typical listing services. The information provided show's that listings within the immediate subject area are typically $33.400 to $36.500 with limited response which is above a market level for the subject lots. Comparable #1 has had superior demand for housing providing a predictable absorption for home builders and the $24.000 to $27,500 price range is considered above market for the subject lots. Closed transactions within comparables#4. #5, #7, #8. and #9 are inferior to the subject indicating the $20.000 per lot price is below a base lot value for the subject. This supports a base lot price range of $20.000 to $24.000 for the subject lots which is reasonably rounded to a base lot value of$22,000. Comparable #2 provides sale data that shows there is not a premium paid for larger lots in suburban subdivisions like the subject. The comparable listings at the subject subdivision (comparable #10) and conversations with the listing agent additionally indicate that there is no indicated premium or discount for lots along the western boundary relative to interior lots. The subject ownership acquired five of the six lots for the same price as an inventory of lots to support production home development. There is no premium attributed to size of location for the lots in blocks 4 and 6. However, 5785 Shenandoah has a more prominent slope and is in a slightly less mature area than other five lots and has an estimated 10% discount from the base lot value to $20.000. Lot Value Summary SUBJECT LOT INVENTORY—Booth Farms#2 Legal Address Size Value Estimate Lot 44.Block 4 10437 Cherry ale Street 11.372 SF $22.000 Lot 43.Block 4 10435 Cherry%ale Street 14.888 SF $22.000 Lot 7.Block 7 10414 Chen-vale Street 8.334 SF 522.000 Lot 8.Block 7 10392 Cherry-vale Street 6.652 SF 522.000 Lot 9.Block 7 10380 Cherry%ale Street 6.000 SF 522.000 Lot 9.Block 6 5785 Shenandoah Ave. 7.401 SF $20,000 Aggregate Retail Value $130.000 30 NOTICE OF DETERMINATION Christopher M. Woodruff Date of Notice: 6/22/2011 Weld County Assessor Telephone: (970) 353-3845 or (720) 652-4255 1400 N 17th Ave Fax: (970) 304-6433 Greeley, CO 80631 E-mail: appeals@co.weld.co.us www.co.weld.co.us Office Hours: 8:00 AM - 5:00 PM SCHEDULE/ACCOUNT NO. TAX YEAR TAX AREA LEGAL DESCRIPTION/ PHYSICAL LOCATION R1224802 2011 2556 FIR 2BF L7 BLK7 BOOTH FARMS 2ND FG ¢ B&L LEASING LLC d / / y/� 2rryY4 3O 5833 SHENANDOAH AVE / FIRESTONE,CO 80504 O cc ASSESSOR'S VALUATION PROPERTY CLASSIFICATION ACTUAL VALUE PRIOR TO ACTUAL VALUE AFTER REVIEW REVIEW VACANT LAND 50,000 50,000 TOTAL $50,000 $50,000 The Assessor has carefully studied all available information, giving particular attention to the specifics included on your protest. The Assessor's determination of value after review is based on the following: AL01 - Your property has been uniformly valued following Colorado law. Your protest of value has been denied due to comparison of other similar properties which sold during the 2009/2010 time period. If you disagree with the Assessor's decision, you have the right to appeal to the County Board of Equalization for further consideration, § 39-8-106(1)(a), C.R.S. The deadline for filing real property appeals is July 15. The deadline for filing personal property appeals is July 20. The Assessor establishes property values. The local taxing authorities (county, school district, city, fire protection, and other special districts) set mill levies. The mill levy requested by each taxing authority is based on a projected budget and the property tax revenue required to adequately fund the services it provides to its taxpayers. The local taxing authorities hold budget hearings in the fall. If you are concerned about mill levies, we recommend that you attend these budget hearings. Please refer to last year's tax bill or ask-your Asse3s& for a listing of the local taxing authorities. nr� Please refer to the reverse side of this notice for addition rotor atEoh.7 I -- .. I la: O// ,?,3 APPEAL PROCEDURES County Board of Equalization Hearings will be held from July 1 through August 5 at 915 10th Street, Greeley, CO To appeal the Assessor's decision, complete the Petition to the County Board of Equalization shown below, and mail or deliver a copy of both sides of this form to: Weld County Board of Equalization 915 10th Street, P.O. Box 758 Greeley, CO 80632 Telephone (970) 356-4000 Ext, 4225 To preserve your appeal rights, your Petition to the County Board of Equalization must be postmarked or delivered on or before July 15 for real property and on or before July 20 for personal property — after such date, your right to appeal is lost. You may be required to prove that you filed a timely appeal; therefore, we recommend that all correspondence be mailed with proof of mailing. You will be notified of the date and time scheduled for your hearing. The County Board of Equalization must mail a written decision to you within five business days following the date of the decision. The County Board of Equalization must conclude hearings and render decisions by August 5, § 39-8-107(2), C.R.S. If you do not receive a decision from the County Board of Equalization and you wish to continue your appeal, you must file an appeal with the Board of Assessment Appeals by September 12, § 39-2-125(1)(e), C.R.S. If you are dissatisfied with the County Board of Equalization's decision and you wish to continue your appeal, you must appeal within 30 days of the date of the County Board's written decision to ONE of the following: Board of Assessment Appeals District Court 1313 Sherman Street, Room 315 9th Avenue and 9th Street Denver, CO 80203 P.O. Box C (303) 866-5880 Greeley, Colorado 80632 www.dola.colorado.gov/baa (970) 356-4000 Ext. 4520 Binding Arbitration For a list of arbitrators, contact the County Commissioners at the address listed for the County Board of Equalization. If the date for filing any report, schedule, claim, tax return, statement, remittance, or other document falls upon a Saturday, Sunday, or legal holiday, it shall be deemed to have been timely filed if filed on the next business day, § 39-1-120(3), C.R.S. PETITION TO COUNTY BOARD OF EQUALIZATION What is your estimate of the property's value as of June 30, 2010? (Your opinion of value in terms of a specific dollar amount is required for real property pursuant to § 39-8-106(1.5), C.R.S.) $ zZOOO What is the basis for your estimate of value or your reason for requesting a review? (Please attach additional sheets as necessary and any supporting documentation, i.e., comparable sales, rent roll, onn final installed cost, appraisal, etc.) /' .CIaG7ie cLD� i k.� 'f-.5751449e9 ,�,Lc1cJ- -' Z o/a iii .✓ �¢D .O ,, �i , -tip,. ,e...," �0/e7 opt 7� lv a . ATTESTATION I, the undersigned owner or agent' of the property identified above, affirm that the statements contained herein and on any attachments hereto are true and complete. /1 /?97-t- 7zo,.3Z , /y .z 261/ 'gnu ure Telephone Number D e 15-DPT-AR PR 207-08/11 R1224802 12395 1 Attach letter of authorization signed by property owner. TO: Weld County Assessor FROM: B&L Leasing, LLC 5833 Shenandoah Ave. DATE: July 12,2011 Firestone, CO 80504 (720)560-9638 Lots in Booth Farms Filing#1 R1222502 Lot 43/Blk4 10435 Cherryvale $22,000 R1222602 Lot 44/B1k4 10437 Cherryvale $22,000 R1224102 Lot 9/Blk6 5785 Shenandoah $20,000 R1224802 Lot 7/Blk7 10414 Cherryvale $22,000 R1224902 Lot 8/BIk7 10392 Cherryvale $22,000 R1225002 Lot 9/Blk7 10380 Cherryvale $22,000 An appraisal was completed(full appraisal attached for reference)by Craig Castleberry on the above lots for the period 2009 and 1 half 2010. Attached are the certification/qualifications of Mr.Castleberry(pages 48-52 of the appraisal). A variety of methods were used to determine the above lot"values" (pages 5-7)with specific comments within the appraisal document supporting final values(pp 20,22,23,28-30). Appraiser determined: Page 7 * The $50,000 actual value of each lot is above market level. . . Page 20 * Current (mid 2010)residential lot prices are 40%to 70% below prices paid four to six years ago. Page 22 * Areas similar to the "subject" have had typical lot prices between $14,000 and $30,000. SUMMARY: (Page 30) • The information provided shows that listings within the immediate "subject" area are typically$33,400 to $36,500 with limited response which is above a market level for the "subject" lots. • Comparable#1 has had superior demand for housing providing a predictable absorption for home builders and the$24,000 to$27,500 price range is considered above market on the "subject" lots. • Closed transactions within Comparable#4,#5,#7,#8, and#9 are inferior to the "subject" indicating the $20,000 per lot price is below a base lot value for the"subject". • This supports a base lot price range of$20,000 to$24,000 for the "subject" lots which is reasonably rounded to a base lot value of$22,000. There is not a premium paid for larger lots nor a premium/discount for western/interior lots. The lot with a more prominent slope was discounted 10%. Five lots valued at$22,000 and one lot at$20,000. B&L LEASING,LLC APPEAL(Additional Information) July 12, 2011 Page 2 MARKET PARTICIPANT RESPONSES: Page 22 * There has been very limited land sales activity in Carbon Valley this year and a number of property owners are losing their lot holdings through foreclosure. Page 23 ' .. .lots listed for sale at$34,000 for well over a year with no interest. Page 23 * .. .sold a lot in the Mad Russian subdivision in Milliken. ..for$14,400. .. .two more lots listed for sale at $18,000 each. There has been no interest in the lots. Page 26 SALES COMPARISON APPROACH Page 28 Comparable#1: WC Builders and Sage Homes have been acquiring lots between$24,000 and$27,500. .. . ..the comparable lot price range of$24,000 to$27,500 is above market for the "subject". Comparable#2 $29,000 to$33,000 lot price range is above market for the"subject"lots. Comparable#3 The subdivider has no pressure to liquidate the lots and has no interest in selling below$33,400 per lot. There has been no interest in the comparable lots at this price level... These are unrealistically priced lots above a market value for the"subject" lots. Comparable#4 The sellers eventually accepted the$14,400 offer. . . Page 29 . .. sites available for$18,000 each with absolutely no interest. Overall,this is an inferior location and the$14,400 lot sales is below a market value for the"subject" lots. Comparable#5 Considering the inferior location and seller motivation the$10,500 acquisition price of the lot that sold is below market for the"subject"lots. Comparable#6 There has been limited interest in the comparable lots at$39,000. . . Comparable#7 The comparable Evans location is inferior to the"subject" location and the$13,300 lot is below a market value for the"subject" lots. The listing agent reported that there are two more lots available for a listing price of$18,255, but the seller would likely accept a lower offer. Comparable#8 . .. is a slightly inferior location. . . .lot available at the same$18,000 price. This is considered to be near,but slightly below a market lot value for the"subject"lots. Page 30 Comparable#9 . . .three lots for$20,000 per lot. Comparable#10 There has been no interest in the lots at this price level indicating that$34,000 per lot is above market for the"subject"lots. /Z Z gSyo.) • 6 Lars Boom FARM COLORADO CERTIFIED APPRAISALS.LLC CERTIFICATION CERTIFICATION The following Certification statements are in addition to and may supersede any other Appraiser's Certification included or attached to this appraisal report. This Appraiser's Certification is compliant with the 2010 Uniform Standards of Professional Appraisal Practice. I certify that,to the best of our knowledge and belief: The statements of fact contained in this report are true and correct. The reported analyses. opinions, and conclusions are limited only by the reported assumptions and limiting conditions, and is my personal. impartial. and unbiased professional analyses, opinions.and conclusions. I have no present or prospective interest in the property that is the subject of this report. and no personal interest with respect to the parties involved. I have not provided any past valuation analysis. consultation. or professional service of or relating to the subject sites. I have no bias with respect to the property that is the subject of this report or to the parties involved with this assignment. My engagement in this assignment was not contingent upon developing or reporting predetermined results. My compensation for completing this assignment is not contingent upon the development or reporting of a predetermined value or direction in value that favors the cause of the client, the amount of the value opinion, the attainment of a stipulated result. or the occurrence of a subsequent event directly related to the intended use of this appraisal. My analyses. opinions, and conclusions were developed. and this report has been prepared. in conformity with Uniform Standards of Professional Appraisal Practice. Craig Castleberry made a personal inspection of the property that is the subject of this report. No one provided significant real property appraisal assistance to the appraisers' signing this report. PURPOSE,INTENDED USE, AND INTENDED USER OF THE APPRAISAL: The purpose of the appraisal is to estimate the market value of the subject property. as defined in this report. on behalf of the referenced client as the intended user of this report. The intended use of the appraisal is to assist the client. as the intended user of this report. 48 • 6 LOTS Boom FARM COLORADO CERTIFIED APPRAISALS.LLC CERTIFICATION in evaluating the subject property for lending purposes. The use of this appraisal by anyone other than the stated intended user. or for any other use than the stated intended use, is prohibited. ANALYSIS AND REPORT FORM: This is a real property appraisal written in a Summary Report format. As such, data and analysis has been presented in a summary report format with more complete information retained in my files. The appraisal is based on the information gathered by the appraiser from public records. other identified sources, inspection of the subject property and neighborhood, and selection of comparable sales and listings within the subject and comparable market areas. When conflicting information was provided, the source deemed most reliable has been used. Craig Castleberry CO Certified General Appraiser #CG1323026 Exp. 12/31/2010 49 6 Lots Boom FARM COLORADO CERTIFIED APPRAISALS.LLC QUALIFICATIONS APPRAISER QUALIFICATIONS CRAIG D. CASTLEBERRY COLORADO CERTIFIED GENERAL APPRAISER#CG01323026 Owner Colorado Certified Appraisals.LLC 615 Bross Street Longmont. Colorado 80501 Voice-(303)995—6017 Fax—(303) 774 - 8603 Generalized Summary and Location of Assignments Subdivisions Retail Office Industrial Garfield County Grand County Grand County Boulder County Boulder County Boulder County Boulder County Weld County Weld County Weld County Weld County Larimer County Adams County Adams County Adams County Arapahoe County Larimer County Larimer County Larimer County Larimer County Summit County Summit County Garfield County Garfield County Garfield County Garfield County Laramie,Wyo Rock Springs,Wyo Laramie,Wyo Ventura,CA Montana Oregon Since 1991,Mr. Castleberry has completed real property appraisal reports of various income and owner occupied commercial properties. His experience has been as a fee appraiser completing commercial/residential real estate appraisal reports in a narrative format in conformance to USPAP and accepted techniques of the Appraisal Institute. He is an associate member of the Appraisal Institute pursuing his MAI. Licenses: Colorado Certified General Appraiser i#CG01323026 50 6 Lots Boom FARM COLORADO CERTIFIED APPRAISALS,LLC QUALIFICATIONS Related Coursework: Principles of Real Estate Appraisal Methods Income Capitalization NCRE 200-Principles of Real Estate Appraisal NCRE 208-Uniform Standards of Professional Appraisal Practice(USPAP) (USPAP Updates as promulgated for Continuing Education) NCRE 210-Residential Real Estate Appraisal Techniques NCRE 215-Development of a Real Estate Appraisal NCRE 222-Income Capitalization Techniques NCRE 225-Narrative Appraisal Review Colorado Real Estate Contracts and Law Environmental Issues in Commercial Real Estate Commercial Real Estate Financing Real Estate Law Real Estate Financing Real Estate Development Subdivision Valuation—Appraisal Institute Advanced Income Capitalization—Appraisal Institute Appraisal Clients: (A partial listing) Mile High Banks Boulder County Business Bank Compass Bank Boulder County Transportation Boulder County National Acceptance Company Farm Credit NCWCD CD Boulder Valley Public Schools Boulder West City of Longmont University of Colorado Colorado Department of Transportation Vectra Bank Colorado National Bank FirsTier Bank Guaranty Bank Crowder Mortgage Bank of The West M&T Banks Bank of Choice 51 6 Lars Boom FARM Cowxnno CERTIFIED APPRAISALS,LLC QUAuncAnONs I.__� .� .�. — STATE OF COLORADO i 1 Department of Regulatory Agencies Division of Real Estate A£',f'rf' PRELATE!)CM SS .. = PAZ'; Ce•t Gen Appraiser 1323016 - Jan 1 2008 t Dec 31 2010 Number Issue Date i Exi»ra,: r Air 1O .,c)r AJ tASTLE tiEf•tR'Y i i 1 1lip,fie J. -r rim Arms r.rt.r irc-errs« tyn.rtur1 r 52 6 Lots BOOTH FARM COLORADO CERTIFIED APPRAIs.ALS.LLC SCOPE OF WORT Reasonable Exposure Time Reasonable exposure time is the estimated length of time the fee simple interest in the subject property would have been offered on the market prior to the hypothetical consummation of a sale at market value on the effective date of this report. July 20, 2010. Comparable lot sales provided in the subsequent Sales Comparison Approach section of this report have a days on the market range from 30 to 436 with lots listed for sale between 30 and over 700 days. These are misleading according to the listing brokers and do not take into account the period of time the lots were listed at unrealistic prices. A more realistic days on the market for the comparable sales is 30 to 180 days in consideration of adjusting the asking prices to market levels. Brokers interviewed concur with this estimate. There has been a significant inventory of lots with low sales volume over the past year. Based on current sales and broker interviews, a reasonable exposure period for each of the subject lots is estimated to be 30 to 90 days with an overall absorption of the subject inventory at 12 months or less. Property Appraised and Property Rights Appraised The subject property is an inventory of six residential lots in the second filing of the Booth Farms subdivision. These are in-fill lots with all infrastructure in place and raw water dedicated without water or sewer taps. The lots vary in size from 6,000 to 14,888 square feet in size. At your request. the retail value of each lot individually and in aggregate has been provided. In addition, the market and disposition values in a bulk sale scenario to a single purchaser of the fee simple interest in the subject lot inventory is being appraised. The following steps were conducted in appraising the subject property: 1. Gathered data from numerous secondary sources including: Weld County records. Colorado Bureau of Labor and Employment, U.S. Census Bureau, City of Firestone, multiple listing service, the appraisers' records. CoStar data services. Realty Rates investor survey. DMCAR real estate listing association. Burbach and Associates Real Estate Investment Survey, Frederick Ross Market Survey, and various economic and development authorities relating to the subject market. 2. Consulted various personnel relating to the appraisal assignment including: knowledgeable real estate professionals: parties related to data presented (buyer, seller, lessor, lessee, buyer's broker, seller's broker), and original data collection surveys. 3. Visually inspected the subject property and surrounding area on July 20, 2010 considered the effective date of the appraiser's opinions and value conclusions. 4. Researched public records for data on the subject. including zoning, utilities and assessments. 5. Analyzed the highest and best use of the property. s 6 Lots Boom FARM COLORADO CERTIFIED APPR.VSALs.LLC SCOPE OF WORK 6. Searched the local market for land sales similar to the subject sites. 7. Analyzed the comparable sales for perceived differences with the subject sites and estimated a market value for the each of the subject lots as well as an aggregate retail value for the entire inventory. 8. Utilized a cash flow analysis by deducting holding costs and discounting the net income by an anticipated absorption period to estimate a bulk sale of the inventory to a single purchaser. 9. Analyzed and compared bulk sales to the subject inventory to determine the market value of the subject inventory in a bulk sale scenario to a single purchaser. 10. Reconciled the information provided to determine the individual lot values, aggregate retail value. and market value of a bulk sale scenario to a single purchaser of the subject inventory. 11. Estimated a discount to apply to the "as is- market value in estimating the disposition value of the subject inventory in a bulk sale scenario to a single purchaser. 6 • 61 PPS BOOTH FARM COLOR ADO CERTIFIED APPRAISALS,LLC REAL ESTATE TAXES REAL ESTATE TAXES The Weld County Assessors' office has estimated an equivalent $50,000 actual value for each of the six subject lots with an equivalent assessed value of$14,500. The 2009 mill levy is 93.927 and total taxes for the subject inventory are calculated as follows: Assessed Value Mill Levy Per Lot Taxes $14,500 x 0.093927 = $1,361.97 x 6Lots Total Taxes $ 8,171.82 According to the Treasurers' office, current and past taxes have been paid in full. The $50,000 actual value of each lot is above a market level and a tax protest would be well advised and should result favorably for the ownership. 7 6 LOTS BOOTH F AILM COLORADO CERTIFIED APPRAISALS,LLt, HIGHEST AND 13rsT USE HIGHEST AND BEST USE ANALYSIS Highest and Best Use is defined as: "The reasonable probable and legal use-of vacant land or an improved property,, which is physically possible, appropriately supported. financially feasible, and that results in the highest value. "' To determine the highest and best use of the subject site,the physically possible, legally permissible, and financially feasible alternatives have been considered. The subject lots are final planed in conformance to the Residential B zoning regulations for detached single-family home sites and have had an ODP specifying the size and use of the subject. A change in use would unlikely be desired or permitted. Raw water deficits have been satisfied and there are no outstanding issues that would prevent issuance of building permits. The lots vary from 6,000 to 14,888 square feet in size with sufficient topographical features and access to utilities to support detached residential development. There were no known environmental or hazardous conditions and the lots are outside 100 and 500 year flood hazard areas. Overall, the physical nature of the land supports the permitted use. When considering the feasible uses at the subject propert , the supply and demand for homes and lots in the local market was analyzed. The limited lot sales activity has been predominantly REO sales following foreclosure. Current residential lot prices are 40% to 70% below prices paid four to six years ago. in fact, lots are being acquired below the cost to acquire the raw land, dedicate raw water, and install infrastructure. Local brokers report that oncc stimulus incentives expired, housing activity throughout Southwest Weld County stalled. I here remains a limited availability of financing to support a local home builder to pursue development of the subject lots. Residential market conditions have not changed since last year and speculative home development is not justified The highest and best use of the subject sites, are to hold the lots until market conditions improtie or an end user is identified. 'The Dictionary of Real Estate Appraisal,4th Edition.Appraisal Institute,2002 20 • 6 LOTS BOOTH FARM COLORADO CERTIFIED APPRAISALS,i.i..C J1;NfmARI ZED MARKET ANALYSIS The area has experienced significant foreclosures because of difficulties associated with sub-prime mortgages. The bank owned homes (REO properties) were offered at discounted prices influencing a downward detached residential value trend. The strained residential market conditions are a product of unregulated sub-prime lending practices. a troubled financial industry.and national recessionary conditions. Information available from the local MLS, shows that there are 215 home listings in the Tri=Town area of Dacono. Firestone, and Frederick with an average price of$228,294. Over the past year 377 homes have sold with an average sales price of$224,301. Very limited residential lot sales have been entered into the MLS in the Carbon Valley over the past 12 to 18 months. There have also been a limited number of inquiries for the lots listed for sale. A market survey and analysis of Northern Colorado data indicates that lots have been selling between $8,000 and $80.000. Areas similar to the subje1.1 have had typical loi prices between$14,000 and$30,000. fire rapidly expanding, Cities of Frederick and Firestone in the early portion of 2000 resulted in an oversupply of detached residences and residential lots in the local market over the past few years. The contraction of the residential market and limited availability of financing has precipitously diminished demand iirr homes and detached lots. A recovery to levels of development that occurred in 2004 and 2005 will unlikely return until financing becomes more readily available and job expansion returns in primary employment centers. In 2010, weak demand will be further limited by continued chronic oversupply from a combination of distressed home sales by individuals who have suffered job losses or other economic setbacks, and by the need for lenders to move foreclosure properties. In the past kw months, there have been a number of lot sales acquired by lenders and the FDIC from builders unable to service their debt. This has provided a qualitative indication of decreasing price levels. Property owners have also begun to more realistically price residential properties stimulating some activity as well. Although sales air dramatically discounted lion, past price levels. it represents.: market. activity that was nearly non-existent in 2009 with builders showing increased interest in residential land. Market Cartieipant IntervL ws In the development of the appraisal a number of seasoned real estate brokers, property managers, and property owtuert.\very itttci Viewed regarding the local oilier.. retail. and light industrial market. Some of the more pertinent interviews relating to the subject market arc summarized below. Dennis Schick is a well established booker in Northcin Coloracld that has numerous listings for finished residential lots in Weld County including the adjoining St %/rain Ranch subdivision directly cast of the subject. There has been very limited land sales activity in Carbon Valley this year and a iit.tirit1CM ui'pi'opc ly owners air losing;their lot holdings through foreclosure, The increased RFD inventories and limited availability 22 6 LOTS Bourn FARM COLORADO CERTIFIED MrrtAISALs,LLC SUMMARIZED MARKET ANALYSIS of financing is having an adverse affect on lot values. Lot price trends will continue in a downward direction until the substantial bank owned and FDIC controlled inventories are reduced. This is unlikely to occur this year since a number of foreclosures are likely to occur throughout 2010. Shyla McKee is a broker with lot listings in the subject subdivision including one lot adjacent to the subject lots in Block 4. She has had her lots listed for sale at $34,000 for well over a year with no interest. Although it is generally accepted that 2009 was one of the most difficult marketing periods for residential lots, there does not appear to be much change in market conditions this year relative to last year. There was an increase in home sales when first home buyer tax credits were available, but sales activity immediately stalled when the stimulus expired. Home builders are unable to finance residential construction projects and home prices in the subject subdivision have been continuously decreasing. Billie Jo Downing is a broker that sold a lot in the Mad Russian subdivision in Milliken this year for $14,400. Four or five years ago the lots in the subdivision were selling for $55,000 to $65,000. There is very limited interest and sales activity in southwest Weld County. Shc currently has two more lots listed for sale at $18,000 each. There has been no interest in the lots. She believes market conditions have not changed in 2010 relative to 2009 for vacant residential lots in Weld County. The icspo:rdcnts indcntiti d as well as other market participants have not seen the anticipated rebound in the southwest residential lot market that was projected. The subject area appears to have been more dramatically affected by the current economic downturn and there have been a nuniix:i of home and residential lot foreclosures the past six to twelve months. Lot values are below the cost to acquire the raw land and install infrastructure indicating that land development projects arc not feasible. The most prudent action loi lot owners would be to hold inventories until market conditions stabilize which will certainly not occur in 2010. There has been interest in residential lots priced between $10,000 and $25.000 because at this level a speculative investor can atlord to hold an inventor) until market conditions improve. I he residential lot value trend will most likely continue in a downward direction for the remainder of the year. 23 MEADOWS-WELLINGTON COLORADO Ctmnnrn APPRAISALS,LLC SALES COMPARISON APPROACH SALES COMPARISON APPROACH When there are a number of recent land sales that have similar characteristics to the subject, the Sales Comparison Approach is one of the best land valuation approaches. Based on the principle of substitution, a prudent buyer would not pay more for the subject than the price required for a comparable substitute property. A summary of the most comparable sales and listings used to estimate the value of the subject lots is included in the chart below. Hate \o Location Salr.i'r,cc a id 1.m. S: I uI I m Sire ISFI id Sale t Columbine Estates,Wellington 4 Luts Blocks B2,B3&B4 5/2010 $110,000 4 $27,500 6,700 Ave 2 l nls Block B3&819 5/2010 $50,000 2 $25,000 8.750 Ave 3 Lots Block 3&4 4/2010 $82,500 3 $27,500 7,100 Ave Lot 5,Block 2 12010 $24,000 I $24,000 7,140 2 Timber Ridge,Severance Lot 12,Block 5 3/2010 $33,000 1 $33,000 9,733 Lot 15,Block 5 5/2009 $29,000 1 $29,000 13,843 3 Noname Creek,Frederick For Sale $33,400- 10 $33,400- 6,900-8,900 536,500 536,500 4 Mad Russian,Milliken 311 Heidie Lane 3/2010 $14,400 I $14,400 7,320 fiddle Lane For Sale $18,000- 3 $18,000- 7,320 $25,000 $25,000 5 Stroh Ranch,Johnstown 2134 Blue Wing 3/2010 $8,000 1 $8,000 6,000 Multiple For Sale $9,750 4 $9,750 6,500 Ave (U/C) 6 St Vrnin Ranch,Firestone Lot 3,BIk 5,#5 4/2010 $40,000 1 $40,000 9,831 Lot 19,Blk 5,#3 For Sale $39,000 5 $39,000 10,039 7 Grapevine Hollow,Evans 3334 Mcrlot 9/2009 $13,333 1 $13,333 6,098 Multiple For Sale $18,255 2 $18,255 6,200 Ave. S Johnson Farm,Frederick 5426 Drake Street 5/2010 $18,000 1 $18,000 7,840 5485 Gunnison Drive For Sale $18,000 I 518,000 6,534 9 Monarch Estates 4/2010 $60,000 3 $20,000 9,117 to 10,428 10 Booth Farms,Firestone 10413 Cherryvale For Sale $34,000 I $34,000 8,366 10475 Cimmarron For Sale $34,000 1 534,000 8,049 • 26 MEADOWS-WELLINGTON COLORADO CERTIFIED APPRAISALS.LLC SALES COMPARISON APPROACH Lot sales volume has nearly stalled the past two years and both listings and sales have been displayed in determining the market retail value of each of the subject lots. Comparable #1 includes a summary of substantial lot sales activity in the Columbine Estate subdivision of Wellington. Columbine Estates is on the west side of Wellington were there have been substantial home development the past couple of years. The comparable lots are approximately 38 miles north of the subject in a similar suburban community as Firestone. WC Builders and Sage Homes have been acquiring lots between $24,000 and $27.500 over the past year in the comparable subdivision. Including independent builders. twenty-two lots sold in the subdivision the past twelve months with a number of homes under-construction on the effective date of this report. The lots are typically 7.100 square feet in size which is similar in size to the subject lots. Demand for homes in the comparable subdivision is superior to the subject subdivision and,overall,the comparable lot price range of$24,000 to$27.500 is above market for the subject. It is unlikely that a home developer in the subject Booth Farms subdivision would enjoy the success that'WC Builders and Sage Homes has enjoyed. Comparable #2 is two lot sales similar in size to the subject lots in the Timber Ridge subdivision of Severance. The comparable subdivision is of an affordable nature with thirty-seven homes selling in the past fifteen months for an average price of $204,603. This is an entry home market that has performed well because of the first time home buyer credit that was available. Potential home buyers are also able to qualify for homes at this price level which will likely allow the home builders to continue selling homes at this pace. A home builder at the subject subdivision would unlikely sell a finished home at the subject subdivision as rapidly as the comparable. The strong demand for homes in the comparable subdivision is superior to the limited demand for homes at the subject subdivision and the $29.000 to $33.000 lot price range is above market for the subject lots. Comparable =3 includes information about listings in the NoName Creek Subdivision in Frederick. This is a very similar subdivision to the subject located approximately one mile south of the subject. The subdivider initially offered lots for sale without raw water dedication and there was limited response. There are currently ten lots available for sale that the listing agent disclosed includes the satisfaction of raw water. The subdivider has no pressure to liquidate the lots and has no interest in selling below $33.400 per lot. He would consider financing the acquisition of all ten lots. There has been no interest in the comparable lots at this price level and tiicy bett‘..i represcnt the lowest price the owner is willing to receive than a market indicated value. These are unrealistically priced lots above a market value for the subject lots. Comparable 4l is a March 2010 sale of a lot at 4.400 in the Mad Russian subdivision in Milliken. It also includes information about three listings. The comparable subdivision has a similar rural Northern Colorado location like the subject subdivision. but has had limited demand with the deteiltri atiOn in the housing market. The lot that sold was available for over three years at $65.000 with the raw water deficit satisfied. The sellers eventually accepted the $14.400 offer after the long listing period MEADOWS-WELLINGTON COLORADO CERITFIEo APPRAISALS,LLC SALES COMPARISON APPROACH and recognizing the substantial inventor,' of similar lots available in Weld County and Northern Colorado. The listing agent reported that she has two nearly identical sites available for $18.000 each with absolutely no interest. The comparable location has inferior access to community services and 1-25 like the subject. Overall, this is an inferior location and the $14.400 lot sale is below a market value for the subject lots. Comparable #5 includes a March 2010 sale and four listings of lots in the Stroh Ranch subdivision in Johnstown. Colorado. Johnstown has similar characteristics to Firestone, but is further from employment centers and is an overall inferior location. The comparable subdivision is also south of Central Johnstown and is inferior in nature to the subject subdivision. The comparable lots are FDIC assets and require the buyer to pay past due taxes. The listing agent reported that an additional $2.400 was required with the sale of the lot which equates to a total acquisition cost of$10.500. Seller motivation is also associated with the lot sale. There are an additional four lots available for $9,750 with approximately the same amount of past due taxes as the lot that sold. These lots are under-contract for less than the asking price. Considering the inferior location and seller motivation, the $10,500 acquisition price of the lot that sold is below market for the subject lots. Comparable #6 includes the asking price for five lots in the Saint Vrain Ranch subdivision directly east across Weld County Road 13 from the subject Booth Farms subdivision. It also includes the sale of one lot for $40,000 that was confirmed through public records and is not considered highly reliable information. This is a very similar location and subdivision to the subject. There has been limited interest in the comparable lots at $39,000 although there is a single sale at $40,000. One listing agent reported that he had an inventory of lots listed at $72.000 each in the comparable subdivision with no interest and they are in the process of being foreclosed. This will add to the inventory of REO lots available in the local market placing greater downward pressure on market prices. Comparable #7 is a lot sale in the Grapevine Hollow subdivision in Evans directly south of the Greeley City limits. This is one of three lots that sold for $13.300 each with raw water deficits satisfied. Similar to the subject Carbon Valley area. there is a large inventory of lots available in Greeley stemming from the distressed residential market conditions. The comparable and the other two lots that sold for the same price represented excess inventory of a home builder. The comparable Evans location is inferior to the subject location and the $13,300 lot price is below a market value for the subject lots. The listing agent reported that there are two more lots available for a listing price of$18,255. but the seller would likely accept a lower offer. Comparable #8 is a May 2010 sale of a lot in Frederick that sold with the raw water deficit satisfied. The comparable Johnson Farm subdivision is similar in nature to the subject Booth Farms subdivision, but the comparable location is further from community services and is a slightly inferior location. In addition to the lot that sold, there is a lot available at the same $18.000 price. This is considered to be near. but slightly below a market lot value for the subject lots. 29 MEADOWS-WELLINGTON COLORADO Canines APPRAISALS.LLC SALES COMPARISON APPROACH Comparable #9 is sales information obtained from public records and confirmed through recorded deeds. This is the Monarch Estates subdivision directly east of the subject with slightly inferior access to shopping amenities than the subject. The comparable sale includes information about three lots for$20.000 per lot. Comparable #10 is two lots currently listed for sale in the subject subdivision. One of the lots is adjacent to the subject lots along the western boundary and the other lot is an interior lot. The listing agent reported that there is no discernable difference for the lots along the western boundary and interior lots. There has been no interest in the lots at this price level indicating that $34.000 per lot is above market for the subject lots. The subject ownership did not disclose a current asking price for the subject lots and there were no listings discovered in the local MLS or other typical listing services. The information provided shows that listings within the immediate subject area are typically$33.400 to $36.500 with limited response which is above a market level for the subject lots. Comparable #1 has had superior demand for housing providing a predictable absorption for home builders and the $24.000 to 527.500 price range is considered above market for the subject lots. Closed transactions within comparables#4, #5, #7. #8. and #9 are inferior to the subject indicating the $20.000 per lot price is below a base lot value for the subject. This supports a base lot price range of $20.000 to $24.000 for the subject lots which is reasonably rounded to a base lot value of$22,000. Comparable #2 provides sale data that shows there is not a premium paid for larger lots in suburban subdivisions like the subject. The comparable listings at the subject subdivision (comparable #10) and conversations with the listing agent additionally indicate that there is no indicated premium or discount for lots along the western boundary relative to interior lots. The subject ownership acquired five of the six lots for the same price as an inventory of lots to support production home development. There is no premium attributed to size of location for the lots in blocks 4 and 6. However, 5785 Shenandoah has a more prominent slope and is in a slightly less mature area than other five lots and has an estimated 10% discount from the base lot value to 320.000. Lot Value Summary SUBJECT LOT INVENTORY—Booth Farms#2 Legal Address Size Value Estimate Lot 44.Block 4 10437 Cherryvale Street 11.372 SF 522.000 Lot 43.Block 4 10435 Cherrpale Street 14.888 SF 522.000 Lot 7.Block 7 10414 Cherryvale Street 8.334 SF 522.000 Lot 8.Block 7 10392 Cherryvale Street 6.652 SF $22,000 Lot 9,Block 7 10380 Cherryvale Street 6.000 SF 522.000 Lot 9:Block 6 5785 Shenandoah Ave. 7.401 SF 520.000 Aggregate Retail Value 5130.000 30 NOTICE OF DETERMINATION Christopher M. Woodruff Date of Notice: 6/22/2011 Weld County Assessor Telephone: (970) 353-3845 or (720) 652-4255 1400 N 17th Ave Fax: (970) 304-6433 Greeley, CO 80631 E-mail: appeals@co.weld.co.us www.co.weld.co.us Office Hours: 8:00 AM - 5:00 PM SCHEDULE/ACCOUNT NO. TAX YEAR TAX AREA LEGAL DESCRIPTION/ PHYSICAL LOCATION R1224902 2011 2556 FIR 2BF L8 BLK7 BOOTH FARMS 2ND FG ZB&L LEASING LLC /0372- Citerrs Va c 3O 5833 SHENANDOAH AVE // y FIRESTONE,CO 80504 cc w a O a ASSESSOR'S VALUATION PROPERTY CLASSIFICATION ACTUAL VALUE PRIOR TO ACTUAL VALUE AFTER REVIEW REVIEW VACANT LAND 50,000 50,000 TOTAL $50,000 $50,000 The Assessor has carefully studied all available information, giving particular attention to the specifics included on your protest. The Assessor's determination of value after review is based on the following: AL01 - Your property has been uniformly valued following Colorado law. Your protest of value has been denied due to comparison of other similar properties which sold during the 2009/2010 time period. If you disagree with the Assessor's decision, you have the right to appeal to the County Board of Equalization for further consideration, § 39-8-106(1)(a), C.R.S. The deadline for filing real property appeals is July 15. The deadline for filing personal property appeals is July 20. The Assessor establishes property values. The local taxing authorities (county, school district, city, fire protection, and other special districts) set mill levies. The mill levy requested by each taxing authority is based on a projected budget and the property tats_revenue required to adequately fund the services it provides to its taxpayers. The local taxing authorities hold budget hearings in the fall. If you are concerned about mill levies, we recommend that you attend these budget hearings. Please refer to last year's tax bill or_ask•you? Assessor for a listing of the local taxing authorities. 0,7 Please refer to the reverse side of this notice for additb'onaU1f6rhl2t*ori' w J i+l\ APPEAL PROCEDURES County Board of Equalization Hearings will be held from July 1 through August 5 at 915 10th Street, Greeley, CO To appeal the Assessor's decision, complete the Petition to the County Board of Equalization shown below, and mail or deliver a copy of both sides of this form to: Weld County Board of Equalization 915 10th Street, P.O. Box 758 Greeley, CO 80632 Telephone (970) 356-4000 Ext, 4225 To preserve your appeal rights, your Petition to the County Board of Equalization must be postmarked or delivered on or before July 15 for real property and on or before July 20 for personal property— after such date, your right to appeal is lost. You may be required to prove that you filed a timely appeal; therefore, we recommend that all correspondence be mailed with proof of mailing. You will be notified of the date and time scheduled for your hearing. The County Board of Equalization must mail a written decision to you within five business days following the date of the decision. The County Board of Equalization must conclude hearings and render decisions by August 5, § 39-8-107(2), G.R.S. If you do not receive a decision from the County Board of Equalization and you wish to continue your appeal, you must file an appeal with the Board of Assessment Appeals by September 12, § 39-2-125(1)(e), C.R.S. If you are dissatisfied with the County Board of Equalization's decision and you wish to continue your appeal, you must appeal within 30 days of the date of the County Board's written decision to ONE of the following: Board of Assessment Appeals District Court 1313 Sherman Street, Room 315 9th Avenue and 9th Street Denver, CO 80203 P.O. Box C (303) 866-5880 Greeley, Colorado 80632 www.dola.colorado.qov/baa (970) 356-4000 Ext. 4520 Binding Arbitration For a list of arbitrators, contact the County Commissioners at the address listed for the County Board of Equalization. If the date for filing any report, schedule, claim, tax return, statement, remittance, or other document falls upon a Saturday, Sunday, or legal holiday, it shall be deemed to have been timely filed if filed on the next business day, § 39-1-120(3), C.R.S. PETITION TO COUNTY BOARD OF EQUALIZATION What is your estimate of the property's value as of June 30, 2010? (Your opinion of value in terms of a specific dollar amount is required for real property pursuant to § 39-8-106(1.5), C.R.S.) $L_2 DOS) What is the basis for your estimate of value or your reason for requesting a review? (Please attach additional sheets as necessary and any supporting documentation, i.e., comparable sales, rent roll, origin installed cost, appraisal, etc.) cr!g�-,.24 .oi21 4*;S7JC270 G�Zl�e.v, O �c Z 2 OOO,. L.nt..Jr � �� rru�y �'rnnh1Lw6o Lti ATTEST ION / I, the undersigned owner or agent' of the property identified above, affirm that the statements contained herein and on any attachments hereto are true and complete. del /ilyz— 724— t0-5 JJ 7�/a /// gna re Telephone Number Date 15-DPT-AR PR 207-08/11 R1224902 12393 ' Attach letter of authorization signed by property owner. TO: 1NeId County Assessor FROM: B& L Leasing, LLC 5833 Shenandoah Ave. DATE: July 12,2011 Firestone,CO 80504 (720)560-9638 Lots in Booth Farms Filing#1 R1222502 Lot 43/Blk4 10435 Cherryvale $22,000 R1222602 Lot 44/Blk4 10437 Cherryvale $22,000 R1224102 Lot 9/Blk6 5785 Shenandoah $20,000 R1224802 Lot 7/Blk7 10414 Cherryvale $22,000 R1224902 Lot 8/Blk7 10392 Cherryvale $22,000 R1225002 Lot 9/Blk7 10380 Cherryvale $22,000 An appraisal was completed (full appraisal attached for reference) by Craig Castleberry on the above lots for the period 2009 and 1"half 2010. Attached are the certification/qualifications of Mr.Castleberry(pages 48-52 of the appraisal). A variety of methods were used to determine the above lot"values"(pages 5-7)with specific comments within the appraisal document supporting final values(pp 20, 22,23,28-30). Appraiser determined: Page 7 * The$50,000 actual value of each lot is above market level. . . Page 20 * Current(mid 2010) residential lot prices are 40%to 70% below prices paid four to six years ago. Page 22 * Areas similar to the "subject" have had typical lot prices between$14,000 and$30,000. SUMMARY: (Page 30) • The information provided shows that listings within the immediate"subject" area are typically$33,400 to $36,500 with limited response which is above a market level for the "subject" lots. • Comparable#1 has had superior demand for housing providing a predictable absorption for home builders and the$24,000 to$27,500 price range is considered above market on the "subject" lots. • Closed transactions within Comparable#4, #5,#7,#8, and#9 are inferior to the"subject" indicating the $20,000 per lot price is below a base lot value for the "subject". • This supports a base lot price range of$20,000 to$24,000 for the "subject" lots which is reasonably rounded to a base lot value of$22,000. There is not a premium paid for larger lots nor a premium/discount for western/interior lots. The lot with a more prominent slope was discounted 10%. Five lots valued at$22,000 and one lot at$20,000. B&L LEASING,LLC APPEAL(Additional Information) July 12, 2011 Page 2 MARKET PARTICIPANT RESPONSES: Page 22 * There has been very limited land sales activity in Carbon Valley this year and a number of property owners are losing their lot holdings through foreclosure. Page 23 ' . ..lots listed for sale at$34,000 for well over a year with no interest. Page 23 * . ..sold a lot in the Mad Russian subdivision in Milliken. ..for$14,400. . . .two more lots listed for sale at $18,000 each. There has been no interest in the lots. Page 26 SALES COMPARISON APPROACH Page 28 Comparable#1: WC Builders and Sage Homes have been acquiring lots between$24,000 and$27,500.. . .the comparable lot price range of$24,000 to$27,500 is above market for the "subject". Comparable#2 $29,000 to$33,000 lot price range is above market for the"subject"lots. Comparable#3 The subdivider has no pressure to liquidate the lots and has no interest in selling below$33,400 per lot. There has been no interest in the comparable lots at this price level... These are unrealistically priced lots above a market value for the"subject"lots. Comparable#4 The sellers eventually accepted the$14,400 offer. .. Page 29 . . .sites available for$18,000 each with absolutely no interest. Overall,this is an inferior location and the$14,400 lot sales is below a market value for the"subject"lots. Comparable#5 Considering the inferior location and seller motivation the$10,500 acquisition price of the lot that sold is below market for the"subject"lots. Comparable#6 There has been limited interest in the comparable lots at$39,000. . . Comparable#7 The comparable Evans location is inferior to the"subject"location and the$13,300 lot is below a market value for the"subject" lots. The listing agent reported that there are two more lots available for a listing price of$18,255,but the seller would likely accept a lower offer. Comparable#8 . . .is a slightly inferior location. .. . lot available at the same$18,000 price. This is considered to be near, but slightly below a market lot value for the"subject" lots. Page 30 Comparable#9 .. .three lots for$20,000 per lot. Comparable#10 There has been no interest in the lots at this price level indicating that$34,000 per lot is above market for the"subject"lots. ( IllO Z 6 LOTS BOOTH FARM COLORADO CERTIFIED APPRAISALS,LLC CERTIFICATIOx CERTIFICATION The following Certification statements are in addition to and may supersede any other Appraiser's Certification included or attached to this appraisal report. This Appraiser's Certification is compliant with the 2010 Uniform Standards of Professional Appraisal Practice. I certify that,to the best of our knowledge and belief: The statements of fact contained in this report are true and correct. The reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions, and is my personal. impartial. and unbiased professional analyses, opinions,and conclusions. I have no present or prospective interest in the property that is the subject of this report, and no personal interest with respect to the parties involved. I have not provided any past valuation analysis. consultation, or professional service of or relating to the subject sites. I have no bias with respect to the property that is the subject of this report or to the parties involved with this assignment. My engagement in this assignment was not contingent upon developing or reporting predetermined results. My compensation for completing this assignment is not contingent upon the development or reporting of a predetermined value or direction in value that favors the cause of the client, the amount of the value opinion, the attainment of a stipulated result, or the occurrence of a subsequent event directly related to the intended use of this appraisal. My analyses, opinions, and conclusions were developed. and this report has been prepared, in conformity with Uniform Standards of Professional Appraisal Practice. Craig Castleberry made a personal inspection of the property that is the subject of this report. No one provided significant real property appraisal assistance to the appraisers' signing this report. PURPOSE.INTENDED USE. AND INTENDED USER OF THE APPRAISAL: The purpose of the appraisal is to estimate the market value of the subject property, as defined in this report. on behalf of the referenced client as the intended user of this report. The intended use of the appraisal is to assist the client, as the intended user of this report. 48 ' b thT\S OOTHi"ARM COLORADO CERTIFIED APPRAISALS.LLC CERTIFICATION in evaluating the subject property for lending purposes. The use of this appraisal by anyone other than the stated intended user. or for any other use than the stated intended use. is prohibited. ANALYSIS AND REPORT FORM: This is a real property appraisal written in a Summary Report format. As such, data and analysis has been presented in a summary report format with more complete information retained in my files. The appraisal is based on the information gathered by the appraiser from public records, other identified sources. inspection of the subject property and neighborhood, and selection of comparable sales and listings within the subject and comparable market areas. When conflicting information was provided, the source deemed most reliable has been used. Craig Castleberry CO Certified General Appraiser #CG1323026 Exp. 12/31/2010 49 6 Lars Boom FARM COLORADO CERllm7>APPRAISALS.LLC QUALIFlCAt1ONs APPRAISER QUALIFICATIONS CRAIG D. CASTLEBERRY COLORADO CERTIFIED GENERAL APPRAISER#CG01323026 Owner Colorado Certified Appraisals. LLC 615 Bross Street Longmont. Colorado 80501 Voice- (303) 995-6017 Fax—(303) 774- 8603 Generalized Summary and Location of Assignments Subdivisions Retail Office Industrial Garfield County Grand County Grand County Boulder County Boulder County Boulder County Boulder County Weld County Weld County Weld County Weld County Larimer County Adams County Adams County Adams County Arapahoe County Larimer County Larimer County Larimer County Larimer County Summit County Summit County Garfield County Garfield County Garfield County Garfield County Laramie.Wyo Rock Springs,Wyo Laramie,Wyo Ventura,CA Montana Oregon Since 1991,Mr. Castleberry has completed real property appraisal reports of various income and owner occupied commercial properties. His experience has been as a fee appraiser completing cornmercialresidential real estate appraisal reports in a narrative format in conformance to USPAP and accepted techniques of the Appraisal Institute. He is an associate member of the Appraisal Institute pursuing his MAI. Licenses: Colorado Certified General Appraiser#CG01323026 so 6 LOTS BOOTH FARM COLORADO CERTIFIED APPRAISALS,LLC QUALIFICATIONS Related Coursework: Principles of Real Estate Appraisal Methods Income Capitalization NCRE 200-Principles of Real Estate Appraisal NCRE 208-Uniform Standards of Professional Appraisal Practice(USPAP) (USPAP Updates as promulgated for Continuing Education) NCRE 210-Residential Real Estate Appraisal Techniques NCRE 215-Development of a Real Estate Appraisal NCRE 222-Income Capitalization Techniques NCRE 225 -Narrative Appraisal Review Colorado Real Estate Contracts and Law Environmental Issues in Commercial Real Estate Commercial Real Estate Financing Real Estate Law Real Estate Financing Real Estate Development Subdivision Valuation—Appraisal Institute Advanced Income Capitalization—Appraisal Institute Appraisal Clients: (A partial listing) Mile High Banks Boulder County Business Bank Compass Bank Boulder County Transportation Boulder County National Acceptance Company Farm Credit NCWCD Boulder Valley Public Schools Boulder West City of Longmont University of Colorado Colorado Department of Transportation Vectra Bank Colorado National Bank FirsTier Bank Guaranty Bank Crowder Mortgage Bank of The West M&T Banks Bank of Choice • 6 In Boom FARM COLORADO CERTIFIED APPRAISALS,LLC QUALIFICATIONS STATE OF COLORADO Department of Regulatory Agencies Division of RS Estate Aibvf Cer+, Ge.^ Appraiser 1323026 Jan 1 2008 I Dec 31 2010 Number Issue Date E)(pee rte, teDaAS CAS ILLBF.ru;v t. ''.vt.10,4T 1:i nu„). s r C P "fiLLrrar!l jrtl.'11+fu;�br:�:f lit RO'A?0 Sr(Y;%dU4r) • • 52 6 LOTS Boom FAR COLORADO CERTIFIED APPR AIS.4LS.LLC SCOPE OF WORT: Reasonable Exposure Time Reasonable exposure time is the estimated length of time the fee simple interest in the subject property would have been offered on the market prior to the hypothetical consummation of a sale at market value on the effective date of this report. July 20. 2010. Comparable lot sales provided in the subsequent Sales Comparison Approach section of this report have a days on the market range from 30 to 436 with lots listed for sale between 30 and over 700 days. These are misleading according to the listing brokers and do not take into account the period of time the lots were listed at unrealistic prices. A more realistic days on the market for the comparable sales is 30 to 180 days in consideration of adjusting the asking prices to market levels. Brokers interviewed concur with this estimate. There has been a significant inventory of lots with low sales volume over the past year. Based on current sales and broker interviews, a reasonable exposure period for each of the subject lots is estimated to be 30 to 90 days with an overall absorption of the subject inventory at 12 months or less. Property Appraised and Property Rights Appraised The subject property is an inventory of six residential lots in the second filing of the Booth Farms subdivision. These are in-fill lots with all infrastructure in place and raw water dedicated without water or sewer taps. The lots vary in size from 6,000 to 14,888 square feet in size. At your request, the retail value of each lot individually and in aggregate has been provided. In addition, the market and disposition values in a bulk sale scenario to a single purchaser of the fee simple interest in the subject lot inventory is being appraised. The following steps were conducted in appraising the subject property: 1. Gathered data from numerous secondary sources including: Weld County records. Colorado Bureau of Labor and Employment. U.S. Census Bureau, City of Firestone. multiple listing service, the appraisers' records. CoStar data services. Realty Rates investor survey. DMCAR real estate listing association, Burbach and Associates Real Estate Investment Survey. Frederick Ross Market Survey, and various economic and development authorities relating to the subject market. 2. Consulted various personnel relating to the appraisal assignment including: knowledgeable real estate professionals; parties related to data presented (buyer, seller, lessor, lessee, buyer's broker, seller's broker), and original data collection surveys. 3. Visually inspected the subject property and surrounding area on July 20, 2010 considered the effective date of the appraiser's opinions and value conclusions. 4. Researched public records for data on the subject, including zoning, utilities and assessments. 5. Analyzed the highest and best use of the property. 5 6 Lois Boon FARM COLORADO CERTIFIED APPRAISALS.LLC SCOPE OF WORK 6. Searched the local market for land sales similar to the subject sites. 7. Analyzed the comparable sales for perceived differences with the subject sites and estimated a market value for the each of the subject lots as well as an aggregate retail value for the entire inventory. 8. Utilized a cash flow analysis by deducting holding costs and discounting the net income by an anticipated absorption period to estimate a bulk sale of the inventory to a single purchaser. 9. Anal zed and compared bulk sales to the subject inventory to determine the market value of the subject inventory in a bulk sale scenario to a single purchaser. 10. Reconciled the information provided to determine the individual lot values, aggregate retail value, and market value of a bulk sale scenario to a single purchaser of the subject inventor}. 11. Estimated a discount to apply to the "as is' market value in estimating the disposition value of the subject inventory in a bulk sale scenario to a single purchaser. 6 61.ors ROOTJI FARM COLORADO CERTIFIED APPRAISALS.LLC REAL ESTATE TAXES REAL ESTATE TAXES The Weld County Assessors' office has estimated an equivalent $50,000 actual value for each of the six subject lots with an equivalent assessed value of$14,500. The 2009 mill levy is 93.927 and total taxes for the subject inventory are calculated as follows: Assessed Value Mill Levy Per Lot Taxes $14,500 x 0.093927 = $1,361.97 x 6 Lots Total Taxes $ 8,171.82 According to the Treasurers' office, current and past taxes have been paid in full. The $50,000 actual value of each lot is above a market level and a tax protest would be well advised and should result favorably for the ownership. 7 6 Lots BOOTH tAR.at COLORADO CERTIFIED APPRAISALS,LLI; HIGHEST AND BEST USE HIGHEST AND BEST USE ANALYSIS Highest and Best Use is defined as: "The reasonable probable and legal use of vacant land or an improved property. which is physically possible. appropriately supported. financially feasible, and that results in the highest value. "' To determine the highest and best use of the subject site, the physically possible. legally permissible,and financially feasible alternatives have been considered. The subject lots are final platted in conformance to the Residential B zoning regulations for detached single-family home sites and have had an ODP specifying the size and use of the subject. A change in use would unlikely be desired or permitted. Raw water deficits have been satisfied and there are no outstanding issues that would prevent issuance of building permits. The lots vary from 6,000 to 14,888 square feet in size with sufficient topographical features and access to utilities to support detached residential development. There were no known environmental or hazardous conditions and the lots are outside 100 and 500 year flood hazard areas. Overall, the physical nature of the land supports the permitted use. When considering the feasible uses at the subject property, the supply and demand for homes and lots in the local market was analyzed. The limited lot sales activity has been predominantly REO sales following foreclosure. Current residential lot prices are 40% to 70% below prices paid four to six years ago. In fact, lots are being acquired below the cost to acquire the raw land, dedicate raw water, and install infrastructure. l..ocal brokers report that once stimulus incentives expired, housing activity throughout Southwest Weld County stalled. I here remains a limited availability of financing to support a local home builder to pursue development of the subject lots. Residential market conditions have not changed since last year and speculative home development is not justified The highest and best use of the subject sites. are to hold the lots until market conditions improve or an end user is identified. 'The Dictionary of Real Estate Appraisal.4th Edition.Appraisal lnsuwte.2002. 20 • 6 LOTS BOOTH FARM COLORADO CERTIFIED APPRAISALS.L.LC SUNIMARI2EDiviARK r ANALYSIS The area has experienced significant foreclosures because of difficulties associated with sub-prime mortgages. The bank owned homes 1REO properties) were offered at discounted prices influencing a downward detached residential value trend. The strained residential market conditions are a product of unregulated sub-prime lending practices. a troubled financial industry. and national recessionary conditions. information available from the local MLS, shows that there are 215 home listings in the Tri-Town area of Dacono. Firestone, and Frederick with an average price of$228,294. Over the past year 377 homes have sold with an average sales price of$224,301. Very limited residential lot sales have been entered into the 1VMS in the Carbon Valley over the past 12 to 18 months. There have also been a limited number of inquiries for the lots listed for sale. A market survey and analysis of Northern Colorado data indicates that lots have been selling between $8.000 and $80.000. Areas similar to the subject have had typical lot prices between$14.000 and$30,000. fhe rapidly expnnrtinn ('iti;.c of I - derick and f=ireerone in the early portion of 2000 resulted in an oversupply of detached residences and residential lots in the local market over the past few years. The contraction of the residential market and limited availability of financing has precipitously diminished demand for homes and detached lots. A recovery to levels of development that occurred in 2004 and 2005 will unlikely return until financing becomes more readily available and jrib expansion returns in primary eeta ployment centers. In ?010, weak demand will be further limited by continued chronic oversupply from a combination of distressed home sales hy individuals who have suffered job losses or other economic setbacks. and by the need for lenders to move foreclosure properties. in the past few months, there have been a number of lot sales acquired by lenders and the FDIC front builders unable to service their debt. l'his has provided a qualitative indication of decreasing price levels. Property owners have also begun to more realistically price residential properties stimulating some activity as well. Although sales art: dramatically discounted titan past price levels. it represents tni..rk.t activity that was nearly non-existent in 20)09 with builders showing increased interest in residential land. Market Pal t:eipannt Intcrvkws in the development of the appraisal a number of seasoned real estate brokers, property managers. and prupert OWlIers +elt interviewed regarding the local office. retail, and tight industrial market. Some of the more pertinent interviews relating to the subject market are summarised below. Dennis Se lick is a ►s,cll established broker in Northern Uoloradd that has numerous listings for finished residential lots in Weld County including the adjoining St Vrain Rine:h subdivision directly cast of the subject. There has been very limited land sales activity ire Colon Valley this year and a ili.inbc.i`of property owners time losing their lot holdings through foreclosure. The increased RE() inventories and limited availability 6 Lars Boors FAR:Ni COLORADO CERrlrteo APPRAISALS.LLC SUMMARIZED MARKET. ANALYSIS of financing is having an adverse affect on lot values. Lot price trends will continue in a downward direction until the substantial bank owned and FDIC controlled inventories are reduced. This is unlikely to occur this year since a number of foreclosures are likely to occur throughout 2010. Shyla McKee is a broker with lot listings in the subject subdivision including one lot adjacent to the subject lots in Block 4. She has had her lots listed for sale at $34,000 for well over a year with no interest. Although it is generally accepted that 2009 was one of the most difficult marketing periods for residential lots, there does not appear to be much change in market conditions this year relative to last year. There was an increase in home sales when first home buyer tax credits were available, but sales activity immediately stalled when the stimulus expired. Home builders are unable to finance residential construction projects and home prices in the subject subdivision have been continuously decreasing. Billie Jo Downing is a broker that sold a lot in the Mad Russian subdivision in Milliken this year for $14.400. Four or five years ago the lots in the subdivision were selling for $55.000 to $65,000. There is very limited interest and sales activity in southwest Weld County. Shc currently has two more lots listed for sale at $18,000 each. There has been no interest in the lots. She believes market conditions have not changed in 2010 relative e to 2009 for vacant residential lots in Weld County. The lespottdcitts indentit`icd as well as other market participants have not seen the anticipated rebound in the southwest residential lot market that was projected. The subject area appears to have been more dramatically affected by the current economic downturn and there have been a number of home and residential lot foieciosuies the pasi six to twelve months. Lot values are below the cost to acquire the raw land and install infrastructure indicating that land development projects arc not feasible. The most prudent action for lot owners would be to hold invenlurtcs until market conditions stabilize which will certainly not occur in 2010. There has been interest in residential lots priced between $10,000 and $25.000 because at this level a speculative investor can allord to hold an inventory until market conditions impro e. I he residential lot value trend will most likely continue in a downward direction for the remainder of the year. • • 23 • MEADOWS-WELLINGTON COLORADO CERTIFIED APPRAISALS.TLC SALES COMPARISON APPROACH SALES COMPARISON APPROACH When there are a number of recent land sales that have similar characteristics to the subject, the Sales Comparison Approach is one of the best land valuation approaches. Based on the principle of substitution, a prudent buyer would not pay more for the subject than the price required for a comparable substitute property. A summary of the most comparable sales and listings used to estimate the value of the subject lots is included in the chart below. nine No I.neatlen "ale.Price P id HI. ' I id I.s,t 'ire Iel'I iii Sale 1 Columbine Estates,Wellington 4 Lots Blocks B2.B3&B4 5/2010 $110,000 4 $27,500 6,700 Ave 'Lon ons Block 113&1319 5/2010 $50,000 2 $25,000 8,750 Ave 3 Lots Block 3&4 4/2010 $82,500 3 $27,500 7,100 Ave Lot S,Block 2 12010 $24,000 I $24,000 7,140 2 Timber Ridge,Severance Lot 12,Block 5 3/2010 $33,000 1 $33,000 9,733 Lot 15,Block 5 5/2009 $29,000 1 $29,000 13,843 3 Rename Creek,Frederick For Sale $33,400- 10 $33,400- 6,900—8.900 $36,500 $36,500 4 Mad Russian,Milliken 311 Heidie Lane 3/2010 $14,400 1 $14,400 7,320 Ilcidie Lane For Sale $18,000- 3 $18,000- 7,320 $25,000 $25,000 5 Stroh Ranch,Johnstown 2134 Bloc Wing 3/2010 $8,000 I $8,000 6,000 Multiple For Sale $9,750 4 $9,750 6,500 Ave (U/C) 6 St Vrain Ranch,Firestone Lot 3,Mk 5.#5 4/2010 $40,000 1 $40,000 9,831 Lot 19,BIk 5,#3 For Sale $39,000 5 $39,000 10,039 7 Grapevine Hollow,Evans 3334 Mcrlot 9/2009 $13,333 I $13,333 6,098 Multiple For Sale $18,255 2 $18,255 6.200 Ave. S Johnson Farm,Frederick 5426 Drake Street 5/2010 518,000 1 $18,000 7,840 5485 Gunnison Drive For Sale $18,000 1 $18,000 6,534 9 Monarch Estates 4/2010 $60,000 3 $20,000 9,117 to 10,428 10 Booth Farms,Firestone 10413 Chcrryvalc For Sale $34,000 1 $34,000 8,366 10475 Cimmarron For Sale $34,000 I $34,000 8,049 26 MEADOWS-WELLINGTON COLORADO CER77FIED APPRAISALS.LLC SALES COMPARISON APPROACH Lot sales volume has nearly stalled the past two years and both listings and sales have been displayed in determining the market retail value of each of the subject lots. Comparable #1 includes a summary of substantial lot sales activity in the Columbine Estate subdivision of Wellington. Columbine Estates is on the west side of Wellington were there have been substantial home development the past couple of years. The comparable lots are approximately 38 miles north of the subject in a similar suburban community as Firestone. WC Builders and Sage Homes have been acquiring lots between $24.000 and $27.500 over the past year in the comparable subdivision. Including independent builders. twenty-two lots sold in the subdivision the past twelve months with a number of homes under-construction on the effective date of this report. The lots are typically 7.100 square feet in size which is similar in size to the subject lots. Demand for homes in the comparable subdivision is superior to the subject subdivision and,overall,the comparable lot price range of$24.000 to $27.500 is above market for the subject. It is unlikely that a home developer in the subject Booth Farms subdivision would enjoy the success that WC Builders and Sage Homes has enjoyed. Comparable #2 is two lot sales similar in size to the subject lots in the Timber Ridge subdivision of Severance. The comparable subdivision is of an affordable nature with thirty-seven homes selling in the past fifteen months for an average price of $204,603. This is an entry home market that has performed well because of the first time home buyer credit that was available. Potential home buyers are also able to qualify for homes at this price level which will likely allow the home builders to continue selling homes at this pace. A home builder at the subject subdivision would unlikely sell a finished home at the subject subdivision as rapidly as the comparable. The strong demand for homes in the comparable subdivision is superior to the limited demand for homes at the subject subdivision and the $29.000 to $33,000 lot price range is above market for the subject lot>. Comparable ~3 includes information about listings in the NoName Creek Subdivision in Frederick. This is a rer) similar subdivision to the subject located approximately one mile south of the subject. The subdivider initially offered lots for sale without raw water dedication and there was limited response. There are currently ten lots available for sale that the listing agent disclosed includes the satisfaction of raw water. The subdivider has no pressure to liquidate the lots and has no interest in selling below $33.400 per lot. He would consider financing the acquisition of all ten lots. There has been no interest in the comparable lots at this price level and they beitur rcpie'tmi the lowest price the owner is willing to receive than a market indicated value. These are unrealistically priced lots above a market value for the subject lots. Comparable 44 is a March 2010 sale of a lot at `Sl4.400 in the Mad Russian subdivision in Milliken. It also includes information about three listings. The comparable subdivision has a similar rural Northern Colorado location like the subject subdivision. but has had limited demand with the deiei it:nation in the housing market. The lot that sold was available for over three 'ears at $65.000 with the raw water deficit satisfied. The sellers eventually accepted the $14.400 offer after the long listing pet iod MEADOWS-WELLINGTON COLORADO CERTIFIED APPRAISALS,LLC SALES COMPARISON APPROACH and recognizing the substantial inventory of similar lots available in Weld County and Northern Colorado. The listing agent reported that she has two nearly identical sites available for $18.000 each with absolutely no interest. The comparable location has inferior access to community services and I-25 like the subject. Overall, this is an inferior location and the$14,400 lot sale is below a market value for the subject lots. Comparable #5 includes a March 2010 sale and four listings of lots in the Stroh Ranch subdivision in Johnstown. Colorado. Johnstown has similar characteristics to Firestone, but is further from employment centers and is an overall inferior location. The comparable subdivision is also south of Central Johnstown and is inferior in nature to the subject subdivision. The comparable lots are FDIC assets and require the buyer to pay past due taxes. The listing agent reported that an additional $2.400 was required with the sale of the lot which equates to a total acquisition cost of$10.500. Seller motivation is also associated with the lot sale. There are an additional four lots available for $9.750 with approximately the same amount of past due taxes as the lot that sold. These lots are under-contract for less than the asking price. Considering the inferior location and seller motivation, the $10,500 acquisition price of the lot that sold is below market for the subject lots. Comparable #6 includes the asking price for five lots in the Saint Vrain Ranch subdivision directly east across Weld County Road 13 from the subject Booth Farms subdivision. It also includes the sale of one lot for $40.000 that was confirmed through public records and is not considered highly reliable information. This is a very similar location and subdivision to the subject. There has been limited interest in the comparable lots at $39,000 although there is a single sale at $40.000. One listing agent reported that he had an inventory of lots listed at $72.000 each in the comparable subdivision with no interest and they are in the process of being foreclosed. This will add to the inventory of REO lots available in the local market placing greater downward pressure on market prices. Comparable#7 is a lot sale in the Grapevine Hollow subdivision in Evans directly south of the Greeley City limits. This is one of three lots that sold for $13.300 each with raw water deficits satisfied. Similar to the subject Carbon Valley area. there is a large inventory of lots available in Greeley stemming from the distressed residential market conditions. The comparable and the other two lots that sold for the same price represented excess inventory of a home builder. The comparable Evans location is inferior to the subject location and the $13,300 lot price is below a market value for the subject lots. The listing agent reported that there are two more lots available for a listing price of$18,255. but the seller would likely accept a lower offer. Comparable #8 is a May 2040 sale of a lot in Frederick that sold with the raw water deficit satisfied. The comparable Johnson Farm subdivision is similar in nature to the subject Booth Farms subdivision, but the comparable location is further from community services and is a slightly inferior location. In addition to the lot that sold, there is a lot available at the same $18.000 price. This is considered to be near. but slightly below a market lot value for the subject lots. 29 • • MEADOWS•WELLINGTON COLORADO CERTIFIED APPRAISALS.LLC SALES COMPARISON APPROACH Comparable #9 is sales information obtained from public records and confirmed through recorded deeds. This is the Monarch Estates subdivision directly east of the subject with slightly inferior access to shopping amenities than the subject. The comparable sale includes information about three lots for$20.000 per lot. Comparable #10 is two lots currently listed for sale in the subject subdivision. One of the lots is adjacent to the subject lots along the western boundary and the other lot is an interior lot. The listing agent reported that there is no discernable difference for the lots along the western boundary and interior lots. There has been no interest in the lots at this price level indicating that $34.000 per lot is above market for the subject lots. The subject ownership did not disclose a current asking price for the subject lots and there were no listings discovered in the local MLS or other typical listing services. The information provided shows that listings within the immediate subject area are typically $33.400 to $36.500 with limited response which is above a market level for the subject lots. Comparable #1 has had superior demand for housing providing a predictable absorption for home builders and the $24.000 to $27.500 price range is considered above market for the subject lots. Closed transactions within comparables#4, #5, #7, #8. and #9 are inferior to the subject indicating the $20.000 per lot price is below a base lot value for the subject. This supports a base lot price range of $20,000 to $24.000 for the subject lots which is reasonably rounded to a base lot value of$22,000. Comparable #2 provides sale data that shows there is not a premium paid for larger lots in suburban subdivisions like the subject. The comparable listings at the subject subdivision (comparable 410) and conversations with the listing agent additionally indicate that there is no indicated premium or discount for lots along the western boundary relative to interior lots. The subject ownership acquired five of the six lots for the same price as an inventory of lots to support production home development. There is no premium attributed to size of location for the lots in blocks 4 and 6. However, 5785 Shenandoah has a more prominent slope and is in a slightly less mature area than other five lots and has an estimated 10% discount from the base lot value to $20,000. Lot Value Summary SUBJECT LOT INVENTORY—Booth Farms#2 Legal Address Size Value Estimate Lot 44.Block 4 10437 Cherrvlale Street 11.372 SF $22000 Lot 43.Block 4 10435 Cherrpale Street 14.888 SF 522.000 Lot 7.Block 7 10414 Chen-wale Street 8.334 SF $22.000 Lot 8;Block 7 10392 Cherrvvale Street 6.652 SF 522.000 t Lot 9.Block 7 10380 Cherry ale Street 6.000 SF 522.000 Lot 9.Block 6 5785 Shenandoah Ave. 7.401 SF 520.000 Aggregate Retail Value 5130.000 30 93v 7��$ • NOTICE OF DETERMINATION Christopher M. Woodruff Date of Notice: 6/22/2011 Weld County Assessor Telephone: (970) 353-3845 or (720) 652-4255 1400 N 17th Ave Fax: (970) 304-6433 Greeley, CO 80631 E-mail: appeals@co.weld.co.us www.co.weld.co.us Office Hours: 8:00 AM - 5:00 PM SCHEDULE/ACCOUNT NO. TAX YEAR TAX AREA LEGAL DESCRIPTION/ PHYSICAL LOCATION R1225002 2011 2556 FIR 2BF L9 BLK7 BOOTH FARMS 2ND FG z n, B&L LEASING LLC to:MO Cheri-ri C 5833 SHENANDOAH AVE f/ FIRESTONE,CO 80504 O cc ASSESSOR'S VALUATION PROPERTY CLASSIFICATION ACTUAL VALUE PRIOR TO ACTUAL VALUE AFTER REVIEW REVIEW VACANT LAND 50,000 50,000 TOTAL $50,000 $50,000 The Assessor has carefully studied all available information, giving particular attention to the specifics included on your protest. The Assessor's determination of value after review is based on the following: AL01 - Your property has been uniformly valued following Colorado law. Your protest of value has been denied due to comparison of other similar properties which sold during the 2009/2010 time period. If you disagree with the Assessor's decision, you have the right to appeal to the County Board of Equalization for further consideration, § 39-8-106(1)(a), C.R.S. The deadline for filing real property appeals is July 15. The deadline for filing personal property appeals is July 20. The Assessor establishes property values. The local taxing authorities (county, school district, city, fire protection, and other special districts) set mill levies. The mill levy requested by each taxing authority is based on a projected budget and the property tax revenue required to adequately fund the services it provides to its taxpayers. The local taxing authorities hold budget hearings in the fall. If you are concerned about mill levi®s;,we•.recommend that you attend these budget hearings. Please refer to last year's tax bill or ask your Assessor for a listing of the local taxing authorities. Please refer to the reverse side of this notice fior Ailsf irftotmation. l 2011-1823 APPEAL PROCEDURES County Board of Equalization Hearings will be held from July 1 through August 5 at 915 10th Street, Greeley, CO To appeal the Assessor's decision, complete the Petition to the County Board of Equalization shown below, and mail or deliver a copy of both sides of this form to: Weld County Board of Equalization 915 10th Street, P.O. Box 758 Greeley, CO 80632 Telephone (970) 356-4000 Ext, 4225 To preserve your appeal rights, your Petition to the County Board of Equalization must be postmarked or delivered on or before July 15 for real property and on or before July 20 for personal property — after such date, your right to appeal is lost. You may be required to prove that you filed a timely appeal; therefore, we recommend that all correspondence be mailed with proof of mailing. You will be notified of the date and time scheduled for your hearing. The County Board of Equalization must mail a written decision to you within five business days following the date of the decision. The County Board of Equalization must conclude hearings and render decisions by August 5, § 39-8-107(2), C.R.S. If you do not receive a decision from the County Board of Equalization and you wish to continue your appeal, you must file an appeal with the Board of Assessment Appeals by September 12, § 39-2-125(1)(e), C.R.S. If you are dissatisfied with the County Board of Equalization's decision and you wish to continue your appeal, you must appeal within 30 days of the date of the County Board's written decision to ONE of the following: Board of Assessment Appeals District Court 1313 Sherman Street, Room 315 9th Avenue and 9th Street Denver, CO 80203 P.O. Box C (303) 866-5880 Greeley, Colorado 80632 www.dola.colorado.qov/baa (970) 356-4000 Ext. 4520 Binding Arbitration For a list of arbitrators, contact the County Commissioners at the address listed for the County Board of Equalization. If the date for filing any report, schedule, claim, tax return, statement, remittance, or other document falls upon a Saturday, Sunday, or legal holiday, it shall be deemed to have been timely filed if filed on the next business day, § 39-1-120(3), C.R.S. PETITION TO COUNTY BOARD OF EQUALIZATION What is your estimate of the property's value as of June 30, 2010? (Your opinion of value in terms of a specific dollar amount is required for real property pursuant to § 39-8-106(1.5), C.R.S.) $!.t 040O What is the basis for your estimate of value or your reason for requesting a review? (Please attach additional sheets as necessary and any supporting documentation, i.e., comparable sales, rent roll, on inal installed cost, appraisal, etc.) .,Z) .7-O/ v -4411.) � lir•° r/.�._j /2.4 ZS%z-ni rieel fi /!J `Q - ee)-- 4372 27604 - / wet/ .La.a2teMCA ATTESTATION / I, the undersigned owner or agent' of the property identified above, affirm that the statements contained herein and on any attachments hereto are true and complete. 12ryz 7zo sGr� $6�� 7l/z./i/ nat re Telephone Number Date 15-DPT-AR PR 207-08/11 R1225002 12394 ' Attach letter of authorization signed by property owner. TO: Weld County Assessor FROM: B&L Leasing, LLC 5833 Shenandoah Ave. DATE: July 12,2011 Firestone,CO 80504 (720)560-9638 Lots in Booth Farms Filing#1 R1222502 Lot 43/BIk4 10435 Cherryvale $22,000 R1222602 Lot 44/BIk4 10437 Cherryvale $22,000 R1224102 Lot 9/BIk6 5785 Shenandoah $20,000 R1224802 Lot 7/B1k7 10414 Cherryvale $22,000 R1224902 Lot 8/B1k7 10392 Cherryvale $22,000 R1225002 Lot 9/BIk7 10380 Cherryvale $22,000 An appraisal was completed(full appraisal attached for reference)by Craig Castleberry on the above lots for the period 2009 and ft half 2010. Attached are the certification/qualifications of Mr.Castleberry(pages 48-52 of the appraisal). A variety of methods were used to determine the above lot"values"(pages 5-7)with specific comments within the appraisal document supporting final values(pp 20,22,23,28-30). Appraiser determined: Page 7 * The$50,000 actual value of each lot is above market level. . . Page 20 * Current(mid 2010)residential lot prices are 40%to 70% below prices paid four to six years ago. Page 22 * Areas similar to the "subject" have had typical lot prices between$14,000 and$30,000. SUMMARY: (Page 30) • The information provided shows that listings within the immediate"subject"area are typically$33,400 to $36,500 with limited response which is above a market level for the "subject"lots. • Comparable#1 has had superior demand for housing providing a predictable absorption for home builders and the$24,000 to$27,500 price range is considered above market on the "subject"lots. • Closed transactions within Comparable#4,#5,#7,#8, and#9 are inferior to the"subject"indicating the $20,000 per lot price is below a base lot value for the"subject". • This supports a base lot price range of$20,000 to$24,000 for the "subject" lots which is reasonably rounded to a base lot value of$22,000. There is not a premium paid for larger lots nor a premium/discount for western/interior lots. The lot with a more prominent slope was discounted 10%. Five lots valued at$22,000 and one lot at$20,000. B&L LEASING,LLC APPEAL(Additional Information) July 12,2011 Page 2 MARKET PARTICIPANT RESPONSES: Page 22 * There has been very limited land sales activity in Carbon Valley this year and a number of property owners are losing their lot holdings through foreclosure. Page 23 * . . .lots listed for sale at$34,000 for well over a year with no interest. Page 23 ' . ..sold a lot in the Mad Russian subdivision in Milliken. . .for$14,400. . . .two more lots listed for sale at $18,000 each. There has been no interest in the lots. Page 26 SALES COMPARISON APPROACH Page 28 Comparable#1: WC Builders and Sage Homes have been acquiring lots between$24,000 and$27,500.. . ...the comparable lot price range of$24,000 to$27,500 is above market for the "subject". Comparable#2 $29,000 to$33,000 lot price range is above market for the"subject"lots. Comparable#3 The subdivider has no pressure to liquidate the lots and has no interest in selling below$33,400 per lot. There has been no interest in the comparable lots at this price level... These are unrealistically priced lots above a market value for the"subject"lots. Comparable#4 The sellers eventually accepted the$14,400 offer. . . Page 29 . ..sites available for$18,000 each with absolutely no interest. Overall,this is an inferior location and the$14,400 lot sales is below a market value for the"subject"lots. Comparable#5 Considering the inferior location and seller motivation the$10,500 acquisition price of the lot that sold is below market for the"subject" lots. Comparable#6 There has been limited interest in the comparable lots at$39,000. . . Comparable#7 The comparable Evans location is inferior to the"subject"location and the$13,300 lot is below a market value for the"subject" lots. The listing agent reported that there are two more lots available for a listing price of$18,255,but the seller would likely accept a lower offer. Comparable#8 .. . is a slightly inferior location. . .. lot available at the same$18,000 price. This is considered to be near, but slightly below a market lot value for the"subject"lots. Page 30 Comparable#9 .. .three lots for$20,000 per lot. Comparable#10 There has been no interest in the lots at this price level indicating that$34,000 per lot is above market for the"subject"lots. 6 LOTS Boom FARM COLORADO CERTIFIED APPRAISALS.LLC CERTIFICATION CERTIFICATION The following Certification statements are in addition to and may supersede any other Appraiser's Certification included or attached to this appraisal report. This Appraiser's Certification is compliant with the 2010 Uniform Standards of Professional Appraisal Practice. I certify that,to the best of our knowledge and belief: The statements of fact contained in this report are true and correct. The reported analyses, opinions. and conclusions are limited only by' the reported assumptions and limiting conditions. and is my personal. impartial. and unbiased professional analyses, opinions, and conclusions. I have no present or prospective interest in the property that is the subject of this report. and no personal interest with respect to the parties involved. I have not provided any past valuation analysis. consultation, or professional service of or relating to the subject sites. I have no bias with respect to the property that is the subject of this report or to the parties involved with this assignment. My engagement in this assignment was not contingent upon developing or reporting predetermined results. My compensation for completing this assignment is not contingent upon the development or reporting of a predetermined value or direction in value that favors the cause of the client, the amount of the value opinion. the attainment of a stipulated result, or the occurrence of a subsequent event directly related to the intended use of this appraisal. My analyses. opinions, and conclusions were developed, and this report has been prepared, in conformity with Uniform Standards of Professional Appraisal Practice. Craig Castleberry made a personal inspection of the property that is the subject of this report. No one provided significant real property appraisal assistance to the appraisers' signing this report. PURPOSE,INTENDED USE, AND INTENDED USER OF THE APPRAISAL: The purpose of the appraisal is to estimate the market value of the subject property. as defined in this report. on behalf of the referenced client as the intended user of this report. The intended use of the appraisal is to assist the client, as the intended user of this report. 48 6 Lon Boom FARM COLORADO CERTIFIED APPRAISALS.LLC CERTIFICATION in evaluating the subject property for lending purposes. The use of this appraisal by anyone other than the stated intended user, or for any other use than the stated intended use. is prohibited. ANALYSIS AND REPORT FORM: This is a real property appraisal written in a Summary Report format. As such, data and analysis has been presented in a summary report format with more complete information retained in my files. The appraisal is based on the information gathered by the appraiser from public records. other identified sources. inspection of the subject property and neighborhood, and selection of comparable sales and listings within the subject and comparable market areas. When conflicting information was provided. the source deemed most reliable has been used. Craig Castleberry CO Certified General Appraiser #CG1323026 Exp. 12131/2010 49 6 Lars Boom FARM COLORADO CERTIFIED APPRAISALS.LLC QUALIFICATIONS APPRAISER QUALIFICATIONS CRAIG D. CASTLEBERRY COLORADO CERTIFIED GENERAL APPRAISER#CG01323026 Owner Colorado Certified Appraisals. LLC 615 Bross Street Longmont. Colorado 80501 Voice-(303)995—6017 Fax—(303) 774 - 8603 Generalized Summary and Location of Assignments Subdivisions Retail Office Industrial Garfield County Grand County Grand County Boulder County Boulder County Boulder County Boulder County Weld County Weld County Weld County Weld County Larimer County Adams County Adams County Adams County Arapahoe County Larimer County Larimer County. Larimer County Larimer County Summit County Summit County Garfield County Garfield County Garfield County Garfield County Laramie,Wyo Rock Springs,Wyo Laramie,Wyo Ventura,CA Montana Oregon Since 1991,Mr. Castleberry has completed real property appraisal reports of various income and owner occupied commercial properties. His experience has been as a fee appraiser completing commercial/residential real estate appraisal reports in a narrative format in conformance to USPAP and accepted techniques of the Appraisal Institute. He is an associate member of the Appraisal Institute pursuing his MAI. Licenses: Colorado Certified General Appraiser#CG01323026 50 6 tors Boom FAIL{ COLORADO CERTIFIED APPRAISALS,LLC QUALIFICATIONS Related Coursework: Principles of Real Estate Appraisal Methods Income Capitalization NCRE 200-Principles of Real Estate Appraisal NCRE 208-Uniform Standards of Professional Appraisal Practice(USPAP) (USPAP Updates as promulgated for Continuing Education) NCRE 210-Residential Real Estate Appraisal Techniques NCRE 215-Development of a Real Estate Appraisal NCRE 222-Income Capitalization Techniques NCRE 225-Narrative Appraisal Review Colorado Real Estate Contracts and Law Environmental Issues in Commercial Real Estate Commercial Real Estate Financing Real Estate Law Real Estate Financing Real Estate Development Subdivision Valuation—Appraisal Institute Advanced Income Capitalization—Appraisal Institute Appraisal Clients: (A partial listing) Mile High Banks Boulder County Business Bank Compass Bank Boulder County Transportation Boulder County National Acceptance Company Farm Credit NCWCD Boulder Valley Public Schools Boulder West City of Longmont University of Colorado Colorado Department of Transportation Vectra Bank Colorado National Bank FirsTier Bank Guaranty Bank Crowder Mortgage Bank of The West M&T Banks Bank of Choice 5I • 6 Lots Boom FARM COLORADO CERTIFIED APPRAISALS,LW QUALIFICATIONS STATE OF COLORADO Department of Regulatory Agencies Division of Real Estate Acir.e I e t Gen Appraiser • 13230'26 18n 1 2008 Dec 31 2010 NUM DPI - Issue Date Ck'W n?UGIAS LAS III`liERRY z. /r i r C f !—y ii 1 a N . ,3nuturn 52 6 LOTS BOOTH FARM COLORADO CERTIFIED APPRAISALS.LLC SCOPE OF WORT: Reasonable Exposure Time Reasonable exposure time is the estimated length of time the fee simple interest in the subject property would have been offered on the market prior to the hypothetical consummation of a sale at market value on the effective date of this report. July 20. 2010. Comparable lot sales provided in the subsequent Sales Comparison Approach section of this report have a days on the market range from 30 to 436 with lots listed for sale between 30 and over 700 days. These are misleading according to the listing brokers and do not take into account the period of time the lots were listed at unrealistic prices. A more realistic days on the market for the comparable sales is 30 to 180 days in consideration of adjusting the asking prices to market levels. Brokers interviewed concur with this estimate. There has been a significant inventory of lots with low sales volume over the past year. Based on current sales and broker interviews, a reasonable exposure period for each of the subject lots is estimated to be 30 to 90 days with an overall absorption of the subject inventory at 12 months or less. Property Appraised and Property Rights Appraised The subject property is an inventory of six residential lots in the second filing of the Booth Farms subdivision. These are in-fill lots with all infrastructure in place and raw water dedicated without water or sewer taps. The lots vary in size from 6,000 to 14,888 square feet in size. At your request, the retail value of each lot individually and in aggregate has been provided. In addition, the market and disposition values in a bulk sale scenario to a single purchaser of the fee simple interest in the subject lot inventory is being appraised. The following steps were conducted in appraising the subject property: 1. Gathered data from numerous secondary sources including: Weld County records. Colorado Bureau of Labor and Employment. U.S. Census Bureau, City of Firestone, multiple listing service. the appraisers' records. CoStar data services, Realty Rates investor survey. DMCAR real estate listing association. Burbach and Associates Real Estate Investment Survey, Frederick Ross Market Survey, and various economic and development authorities relating to the subject market. 2. Consulted various personnel relating to the appraisal assignment including: knowledgeable real estate professionals; parties related to data presented (buyer, seller, lessor, lessee, buyer's broker, seller's broker),and original data collection surveys. 3. Visually inspected the subject property and surrounding area on July 20, 2010 considered the effective date of the appraiser's opinions and value conclusions. 4. Researched public records for data on the subject. including zoning, utilities and assessments. 5. Analyzed the highest and best use of the property. 6 Lois Boom FARM COLORADO CERTIFIED APPRAISALS.LLC SCOPE OF WORK 6. Searched the local market for land sales similar to the subject sites. 7. Analyzed the comparable sales for perceived differences with the subject sites and estimated a market value for the each of the subject lots as well as an aggregate retail value for the entire inventory. 8. Utilized a cash flow analysis by deducting holding costs and discounting the net income by an anticipated absorption period to estimate a bulk sale of the inventory to a single purchaser. 9. Analyzed and compared bulk sales to the subject inventory to determine the market value of the subject inventory in a bulk sale scenario to a single purchaser. 10. Reconciled the information provided to determine the individual lot values, aggregate retail value. and market value of a bulk sale scenario to a single purchaser of the subject inventor . 11. Estimated a discount to apply to the "as is" market value in estimating the disposition value of the subject inventory in a bulk sale scenario to a single purchaser. 6 1 MS BOOTH FARM COLORADO CERTIFIED APPRAISALS.LLC REAL ESTATE TAXES REAL ESTATE TAXES The Weld County Assessors' office has estimated an equivalent $50,000 actual value for each of the six subject lots with an equivalent assessed value of$14,500. The 2009 mill levy is 93.927 and total taxes for the subject inventory are calculated as follows: Assessed Value Mill Levy Per Lot Taxes $14,500 x 0.093927 = $1,361.97 x 6 Lots Total Taxes $ 8,171.82 According to the Treasurers' office, current and past taxes have been paid in full. The $50,000 actual value of each lot is above a market level and a tax protest would be well advised and should result favorably for the ownership. 7 6 LOTS BOOTH FARM COLORADO CERTIFIED APPRAISALS,LLC HIGHEST AND BEST USE HIGHEST AND BEST USE ANALYSIS Highest and Best Use is defined as: "The reasonable probable and legal use-of vacant land or an improved property. which is physically possible, appropriately supported. financially feasible, and that results in the highest value. "4 To determine the highest and best use of the subject site,the physically possible, legally permissible,and financially feasible alternatives have been considered. The subject lots are final platted in conformance to the Residential B zoning regulations for detached single-family home sites and have had an ODP specifying the size and use of the subject. A change in use would unlikely be desired or permitted. Raw water deficits have been satisfied and there are no outstanding issues that would prevent issuance of building permits. The lots vary from 6,000 to 14,888 square feet in size with sufficient topographical features and access to utilities to support detached residential development. There were no known environmental or hazardous conditions and the lots are outside 100 and 500 year flood hazard areas. Overall, the physical nature of the land supports the permitted use. When considering the feasible uses at the subject property. the supply and demand for homes and lots in the local market was analyzed. The limited lot sales activity has been predominantly REO sales following foreclosure. Current residential lot prices arc 40% to 70% below prices paid four to six years ago. In tact. lots are being acquired below the cost to acquire the raw land, dedicate raw water, and install infrastructure. Local brokers report that once stimulus incentives expired. housing activity throughout Southwest Weld County stalled. i here remains a limited availability of financing to support a local home builder to pursue development of the subject lots. Residential market conditions have not changed since last year and speculative home development is not justitie;i The highest and best use of the subject sites. are to hold the lots until market conditions improve or an end user is identified. 'fit a nictionar of Real Estate Appraisal,4th Edition.Appraisal Institute,2002 20 6 LOTS BOOTH 1 ARM COLORADO CERTIFIED APPRAISALS.LLC SUMMARIZED MARKET ANALYSIS The area has experienced significant foreclosures because of difficulties associated with sub-prime mortgages. The bank owned homes (REO properties) were offered at discounted prices influencing a downward detached residential value trend. The strained residential market conditions are a product of unregulated sub-prime lending practices, a troubled financial industry,and national recessionary conditions. Information available from the local MLS, shows that there are 215 home listings in the Tri-Town area of Dacono, Firestone, and Frederick with an average price of$228,294. Over the past year 377 homes have sold with an average sales price of$224,301. Very limited residential lot sales have been entered into the MLS in the Carbon Valley over the past 12 to 18 months. There have also been a limited number of inquiries for the lots listed for sale. A market survey and analysis of Northern Colorado data indicates that lots have been selling between $8.000 and $80,000. Areas similar to the subjeua have had typical lot prices between$14,000 and$30,000. rho rapidly expanding Cities of Frz�cterick and t irccuone in the early portion of 2000 resulted in an oversupply of detached residences and residential lots in the local market aver the past few years. The contraction of the residential market and limited availability of financing has precipitously diminished demand iisr homes and detached lots. A recovery to levels of development that occurred in 2004 and 2005 will unlikely return until financing becomes more readily r available and job expansion returns in primary employment centers. In 2010, weak demand will be further limited by continued chronic oversupply li-om a combination of distressed home sales by individuals who have suffered job losses or other economic setbacks, and by the need for lenders to move foreclosure properties. In the past few months, there have been a number of lot sales acquired by lenders and the FDIC from builders tillable to service their debt. This has provided a qualitative indication of decreasing price levels. Property owners have also begun to more realistically price residential properties stimulating some activity as well. Although sales aie dramatically discounted flow past price levels. it represcnis tliarket activity that was nearly non-existent in 2009 with builders showing increased interest in residential land. Market Participant Interviews in the development of the appraisal a number of seasoned real estate broken, property managers, and propixty Owns iicttiviewcd regardif,g the local office, retail, and light industrial market. Some of the more pertinent interviews relating to the subject market arc summarized below. t eunis :ichick is a well established broker in Northern Coloraacld that has numerous listings for finished residential lots in Weld County including the adjoining St Vrain Ranch subdivision directly east of the subject. There has been very limited land sales activity ir;Carbon Valley this year and a ruined€k i Of pedal+city owners ere losing their lot holdings through foreclosure. The increased RF.O inventories and limited availability 6 Lots Boom FARM COLORADO CFii7irwo APPRAISALS.LLC SUMMARIZED MARKET ANALYSIS of financing is having an adverse affect on lot values. Lot price trends will continue in a downward direction until the substantial bank owned and FDIC controlled inventories are reduced. This is unlikely to occur this year since a number of foreclosures are likely to occur throughout 2010. Shyla McKee is a broker with lot listings in the subject subdivision including one lot adjacent to the subject lots in Block 4. She has had her lots listed for sale at $34,000 for well over a year with no interest. Although it is generally accepted that 2009 was one of the most difficult marketing periods for residential lots, there does not appear to be much change in market conditions this year relative to last year. There was an increase in home sales when first home buyer tax credits were available, but sales activity immediately stalled when the stimulus expired. Home builders are unable to finance residential construction projects and home prices in the subject subdivision have been continuously decreasing. Billie Jo Downing is a broker that sold a lot in the Mad Russian subdivision in Milliken this year for $14,400. Four or five years ago the lots in the subdivision were selling for $55,000 to $65.000. There is very limited interest and sales activity in southwest Weld County. She currently has two more lots listed for sale at $18,0011 each. There has been no interest in the lots. She believes market conditions have not changed in 2010 relative to 2009 for vacant residential lots in Weld County. The icspondents indentilled as well as other market participants have not seen the anticipated rebound in the southwest residential lot market that was projected. The subject area appears to have been more dramatically affected by the current economic downturn and there have been a nuli hei of home and residential lot foicciosuies the pntii. six to twelve months. Lot values arc below the cost to acquire the raw land and install infrastructure indicating that land development projects arc not feasible. The most prudent action for lot owners would be to hold inventories until market conditions stabilize which will certainly not occur in 2010. There has been interest in residential lots priced between $10,000 and $25.000 because at this level a speculative investor can afford to hold an inventor) until market conditions improve. 1 lw residential lot value trend will most likely continue in a downward direction for the remainder of the year. • . MEADOWS-WELLINGTON COLORADO CERTIFIED APPRAISALS,LLC SALES COMPARISON APPROACH SALES COMPARISON APPROACH When there are a number of recent land sales that have similar characteristics to the subject, the Saks Comparison Approach is one of the best land valuation approaches. Based on the principle of substitution, a prudent buyer would not pay more for the subject than the price required for a comparable substitute property. A summary of the most comparable sales and listings used to estimate the value of the subject lots is included in the chart below. oak. \u Location ',ale.Price a ill'I Ili. s I III I ui ',iii'INF) of"4k 1 Columbine Estates,Wellington 4 Low Blocks B2.B3&B4 5/2010 $110,000 4 $27,500 6,700 Ave 2 1 on:Block A3&R19 5/2010 $50,000 2 525,000 8,750 Ave 3 Lots Block 3&4 4/2010 $82,500 3 $27,500 7,100 Ave Lot 5,Block 2 12010 $24,000 1 $24,000 7,140 2 Timber Ridge.Severance Lot 12,Block 5 3/2010 $33,000 I $33,000 9,733 Lot I5,Block 5 5/2009 $29,000 I $29,000 13,843 3 Nonnme Creek,Frederick For Sale 533,400- 10 533,400- 6,900—8.900 $36,500 $36,500 4 Mad Russian,Milliken 311 Heidie Lane 3/2010 $14,400 I $14,400 7,320 Ilcidie Lane For Sale $18,000- 3 $18,000- 7,320 $25,000 $25,000 5 Stroh Ranch,Johnstown 2134 Blue Wing 3/2010 $8,000 I $8,000 6,000 Multiple For Sale $9,750 4 59,750 6,500 Ave RUC) 6 St Vrain Ranch,Firestone Lot 3,BIk S,#5 4/2010 $40,000 I $40,000 9,831 Lot 19,Blk 5,#3 For Sale $39,000 5 $39,000 10,039 7 Grapevine Hollow,Evans 3334 Mcrlot 9/2009 $13,333 1 $13,333 6,098 Multiple For Sale $18,255 2 $18,255 6.200 Ave. $ Johnson Farm,Frederick 5426 Drake Street 52010 SI8,000 I $18,000 7,840 5485 Gunnison Drive Far Sale $18,000 I S18,000 6,534 9 Monarch Estates 4/2010 $60,000 3 $20,000 9,117 to 10,428 10 Booth Farms,Firestone 10413 Cherryvalc For Sale $34,000 1 $34,000 8.366 10475 Cimmanron For Sale $34,000 I $34,000 8.049 26 MEADOWS-WELLINGTON COLORADO CERTIFIED APPRAISALS.LLC SALES COMPARISON APPROACH Lot sales volume has nearly stalled the past two years and both listings and sales have been displayed in determining the market retail value of each of the subject lots. Comparable #1 includes a summary of substantial lot sales activity in the Columbine Estate subdivision of Wellington. Columbine Estates is on the west side of Wellington were there have been substantial home development the past couple of years. The comparable lots are approximately 38 miles north of the subject in a similar suburban community as Firestone. WC Builders and Sage Homes have been acquiring lots between $24,000 and $27,500 over the past year in the comparable subdivision. Including independent builders, twenty-two lots sold in the subdivision the past twelve months with a number of homes under-construction on the effective date of this report. The lots are typically 7.100 square feet in size which is similar in size to the subject lots. Demand for homes in the comparable subdivision is superior to the subject subdivision and, overall,the comparable lot price range of$24,000 to$27.500 is above market for the subject. It is unlikely that a home developer in the subject Booth Farms subdivision would enjoy the success that WC Builders and Sage Homes has enjoyed. Comparable #2 is two lot sales similar in size to the subject lots in the Timber Ridge subdivision of Severance. The comparable subdivision is of an affordable nature with thirty-seven homes selling in the past fifteen months for an average price of $204,603. This is an entry home market that has performed well because of the first time home buyer credit that was available. Potential home buyers are also able to qualify for homes at this price level which will likely allow the home builders to continue selling homes at this pace. A home builder at the subject subdivision would unlikely sell a finished home at the subject subdivision as rapidly as the comparable. The strong demand for homes in the comparable subdivision is superior to the limited demand for homes at the subject subdivision and the $29.000 to $33.000 lot price range is above market for the subject lots. Comparable r3 includes information about listings in the NoName Creek Subdivision in Frederick. This is aver} similar subdivision to the subject located approximately one mile south of the subject. The subdivider initially offered lots for sale without raw water dedication and there was limited response. There are currently ten lots available for sale that the listing agent disclosed includes the satisfaction of raw water. The subdivider has no pressure to liquidate the lots and has no interest in selling below $33,400 per lot. He would consider financing the acquisition of all ten tots. There has been no interest in the comparable lots at this price level an they hcitri rcpic:,ont Ilk' lowest price the owner is willing to receive than a market indicated value. These are unrealistically priced lots above a market value for the subject lots. Comparable 44 is a March 2010 sale of a lot at $14.400 in the Mad Russian subdivision in Milliken. It also includes information about three listings. The comparable subdivision has a similar rural Northern Colorado location like the subject subdivision. but has had limited demand with the del 1k'r tticin is tier. housing [ aiket. The lot that sold was available for over three 'ears at $65.000 with the raw water deficit satisfied. The sellers eventually accepted the $14.400 offer after the long listing period MEADOWS-WELLINGTON COLORADO CERTIFIED APPRAISALS,LLC SALES COMPARISON APPROACH and recognizing the substantial inventory of similar lots available in Weld County and Northern Colorado. The listing agent reported that she has two nearly identical sites available for $18.000 each with absolutely no interest. The comparable location has inferior access to community services and I-25 like the subject. Overall, this is an inferior location and the$14.400 lot sale is below a market value for the subject lots. Comparable #5 includes a March 2010 sale and four listings of lots in the Stroh Ranch subdivision in Johnstown. Colorado. Johnstown has similar characteristics to Firestone, but is further from employment centers and is an overall inferior location. The comparable subdivision is also south of Central Johnstown and is inferior in nature to the subject subdivision. The comparable lots are FDIC assets and require the buyer to pay past due taxes. The listing agent reported that an additional $2.400 was required with the sale of the lot which equates to a total acquisition cost of$10.500. Seller motivation is also associated with the lot sale. There are an additional four lots available for $9.750 with approximately the same amount of past due taxes as the lot that sold. These lots are under-contract for less than the asking price. Considering the inferior location and seller motivation, the $10,500 acquisition price of the lot that sold is below market for the subject lots. Comparable #6 includes the asking price for five lots in the Saint Vrain Ranch subdivision directly east across Weld County Road 13 from the subject Booth Farms subdivision. It also includes the sale of one lot for $40.000 that was confirmed through public records and is not considered highly reliable information. This is a very similar location and subdivision to the subject. There has been limited interest in the comparable lots at $39,000 although there is a single sale at $40.000. One listing agent reported that he had an inventory of lots listed at $72.000 each in the comparable subdivision with no interest and they are in the process of being foreclosed. This will add to the inventory of REO lots available in the local market placing greater downward pressure on market prices. Comparable#7 is a lot sale in the Grapevine Hollow subdivision in Evans directly south of the Greeley City limits. This is one of three lots that sold for$13.300 each with raw water deficits satisfied. Similar to the subject Carbon Valley area. there is a large inventory of lots available in Greeley stemming from the distressed residential market conditions. The comparable and the other two lots that sold for the same price represented excess inventory of a home builder. The comparable Evans location is inferior to the subject location and the $13,300 lot price is below a market value for the subject lots. The listing agent reported that there are two more lots available for a listing price of$18,255. but the seller would likely accept a lower offer. Comparable #8 is a May 2010 sale of a lot in Frederick that sold with the raw water deficit satisfied. The comparable Johnson Farm subdivision is similar in nature to the subject Booth Farms subdivision, but the comparable location is further from community services and is a slightly inferior location. In addition to the lot that sold, there is a lot available at the same $18,000 price. This is considered to be near. but slightly below a market lot value for the subject lots. 29 MEADOWS-WELLINGTON COLORADO CERTIFIED APPRAISALS.LLC SALES COMPARISON APPROACH Comparable #9 is sales information obtained from public records and confirmed through recorded deeds. This is the Monarch Estates subdivision directly east of the subject with slightly inferior access to shopping amenities than the subject. The comparable sale includes information about three lots for$20.000 per lot. Comparable #10 is two lots currently listed for sale in the subject subdivision. One of the lots is adjacent to the subject lots along the western boundary and the other lot is an interior lot. The listing agent reported that there is no discernable difference for the lots along the western boundary and interior lots. There has been no interest in the lots at this price level indicating that$34.000 per lot is above market for the subject lots. The subject ownership did not disclose a current asking price for the subject lots and there were no listings discovered in the local MLS or other typical listing services. The information provided shows that listings within the immediate subject area are typically $33.400 to $36,500 with limited response which is above a market level for the subject lots. Comparable #1 has had superior demand for housing providing a predictable absorption for home builders and the $24.000 to $27.500 price range is considered above market for the subject lots. Closed transactions within comparables#4. #5, #7, #8. and #9 are inferior to the subject indicating the $20.000 per lot price is below a base lot value for the subject. This supports a base lot price range of $20.000 to $24.000 for the subject lots which is reasonably rounded to a base lot value of$22,000. Comparable #2 provides sale data that shows there is not a premium paid for larger lots in suburban subdivisions like the subject. The comparable listings at the subject subdivision (comparable #10) and conversations with the listing agent additionally indicate that there is no indicated premium or discount for lots along the western boundary relative to interior lots. The subject ownership acquired five of the six lots for the same price as an inventory of lots to support production home development. There is no premium attributed to size of location for the lots in blocks 4 and 6. However, 5785 Shenandoah has a more prominent slope and is in a slightly less mature area than other five lots and has an estimated 10% discount from the base lot value to $20.000. Lot Value Summary SUBJECT LOT INVENTORY—Booth Farms#2 Legal Address Size Value Estimate Lot 44.Block 4 10437 Cherryvale Street 11.372 SF 522.000 Lot 43,Block 4 10435 Cherry%ale Street 14.888 SF S22.000 Lot 7.Block 7 10414 Cherryvale Street 8.334 SF $22,400 Lot 8.Block 7 10392 Cherryvale Street 6.652 SF 522.000 Lot 9.Block 7 10380 Cherryvale Street 6.000 SF S22.000 Lot 9.Block 6 5785 Shenandoah Ave. 7.401 SF 520.000 Aggregate Retail Value 5130.000 30 A REAL PROPERTY APPRAISAL IN SUMMARY REPORT FORMAT OF SIX VACANT RESIDENTIAL LOTS LOCATED IN FILING TWO OF BOOTH FARMS FIRSTONE, COLORADO Bank of the West RIMS#10-0811-01 FOR MR MICHAEL SULLIVAN,MAI, SRA VP AND SENIOR COMMERCIAL REVIEW APPRAISER BANK OF THE WEST 633 17T" STREET DENVER,COLORADO 80202 AS OF: Effective Date of Appraisal: July 20, 2010 Date of Report: August 3,2010 BY Craig D. Castleberry Colorado Certified Appraisals,LLC 6i5 Bross Street Longmont, Colorado 80501 (303) 995- 6017 :Z d i i"'n i't . File: CCA10-BTH06 August 3, 2010 Mr. Michael Sullivan, MAI, SRA VP and Senior Commercial Review Appraiser Bank of the West 833 17th Street Denver, Colorado 80202 RE: Complete Scope Real Property Appraisal in Summary Report Format of Six Vacant Residential Lots within the Second Filing of Booth Farms, Firestone, Colorado Dear Mr. Sullivan: In accordance to our agreement, I have personally inspection the referenced property and surrounding neighborhoods. The subject property includes six vacant residential lots that have had all infrastructure completed typically acceptable as "finished lots" to home builders in Firestone, Colorado. According to the recorded plat, the lots vary in size from 6,000 to 14,888 square feet. Raw water has been dedicated for each lot, but water and sewer taps have not been installed or paid. The subdivision is nearly fully completed and these arc considered in-fill lots. This is a real property appraisal presented in summary report format. The methodology applied and all pertinent data gathered in my investigation has been presented in a summary report format with more complete information contained in my files. A market value has been estimated to assist my client in acquisition, financing, loan classification, or asset disposition. Contingent and Limiting Conditions as well as the Appraiser's C'crtilication and Qualifications precede the addendum. This report has been prepared with the intention of meeting the requirements of' the 2010 IJniiilrTn Standards of Professional Appraisal P active (U'Si Ar SLwda,a, :;uk 2(b)1. Bank vi the West appraisal requirement-,_ ca;,d die Financial Institutions Reform, Rcv.nveT) And Enforcement Act of I9K9 (FIRM-.A). !n n:-' opinion.. the "ns ic" retail value of the fi-e simple interest ,.h of the ci\ lots as of July 20, 2010 was: Lot 43.Block 4— 10437 Cherryvale Street $22,000 Lot 44,Block 4—10435 Cherryvale Street $22,000 Lot 9,Block 6-5785 Shenandoah Avenue $20,000 Lot 7,Block 7— 10414 Cherryvale Street $22,000 Lot 8,Block 7— 10392 Cherryvale Street $22,000 Lot 9,Block 7—10380 Cherryvale Street $22,000 In my opinion, the aggregate retail value of the fee simple interest in the subject lot inventory as of July 20, 2010, was: ONE HUNDRED THIRTY THOUSAND DOLLARS $110,1100 In my opinion, "as is" fee simple market value of the subject lot inventory in a bulk sale scenario, as of July 20, 2010, was: ONE HUNDRED THOUSAND DOLLARS $1_00.000 In my opinion, the "as is" fee simple disposition value of the subject lot inventory in a bulk sale scenario based upon a marketing period of 90 days or less as of July 20, 2010, was: SIXTY-FIVE THOUSAND DOLLARS $65,000 Respectfully submitted, Craig Castleberry Certified General Appraiser #CG01323026 6 Lars BOOTH FARM COLORADO CERTIFIED APPRAISALS,LW TABLE OF CONTENTS TABLE OF CONTENTS SUMMARY OF SALIENT FACTS AND CONCLUSIONS 1 APPRAISAL SCOPE OF WORK 3 REASONABLE EXPOSURE TIME 5 PROPERTY APPRAISED AND PROPERTY RIGHTS APPRAISED 5 REAL ESTATE TAXES 7 REGIONAL DESCRIPTION 8 AREA AND NEIGHBORHOOD DESCRIPTION 11 PROPERTY DESCRIPTION 14 ZONING 14 DESCRIPTION OF THE SITES 14 HIGHEST AND BEST USE ANALYSIS 20 SUMMARIZED RESIDENTIAL LOT MARKET 21 MARKET PARTICIPANT INTERVIEWS 22 VALUATION METHODOLOGY 24 SALES COMPARISON APPROACH 26 LOT VALUE SUMMARY 30 DISCOUNT RATE&PROFIT 32 BULK SALE ANALYSIS 35 LAND SALE I 37 LAND SALE 2 38 LAND SALE 3 39 LAND SALE 4 40 BULK SALES SUMMARY 41 RECONCILIATION 42 FINAL ESTIMATES OF VALUE 42 DISPOSITION VALUE ANALYSIS 44 CONTINGENT AND LIMITING CONDITIONS 45 CERTIFICATION 48 APPRAISER QUALIFICATIONS 50 ADDENDUM Engagement Letter, Property Data,Zoning Information 6 Lars Boom FARM COLORADO CERTIFIED APPRAISALS,LLC SUMMARY OF SALIENT FACTS SUMMARY OF SALIENT FACTS AND CONCLUSIONS Subject Property: The subject property is an inventory of six residential lots in the second filing of the Booth Farms subdivision. These are in-fill lots with all infrastructure in place and raw water dedicated without water or sewer taps. The lots vary in size from 6,000 to 14,888 square feet in size. Location: The second filing of Booth Farms is a 77 acre residential subdivision located along the west side of Colorado Boulevard (Weld County Road 13) and south of Firestone Boulevard (Weld County Road 24). The subject lots are located along the west side of the subdivision set-back from both arterials along the local roadway, Cherryvale Street. Lots 43 and 44 in Block 4 are along a western cul-de-sac bend of Cherryvale Street and abut the western boundary of the subdivision. The three lots in block 7 are 150 feet south of Lots 43 and 44 along the east side of Cherryvale Street. Lot 9, block 6 is at the northeast corner of Cherryvale Street and Shenandoah Avenue. Property Rights Appraised: Fee Simple. Effective Date: July 20,2010 Zoning: The subject property is zoned Residential-B, PUD. The Residential-B zoning is the underlaying zoning intended for residential development including detached and attached housing. The PUD (Planned Development Plan) in accordance to the finalized ODP (Official Development Plan) for the second filing of Booth Farms specifics detached residential development for the subject lots. Parcel Numbers Legal Address Parcel Number Lot 44,Block 4 10437 Cherryvale Street 131312404044 Lot 43,Block 4 10435 Cherryvale Street 131312404043 Lot 7,Block 7 10414 Cherryvale Street 131312407007 Lot 8,Block 7 10392 Cherryvale Street 131312407008 Lot 9,Block 7 10380 Cherryvale Street 131312407009 Lot 9,Block 6 5785 Shenandoah Ave. 131312406009 6 Lars Boom FARM COLORADO CERTIFIED APPRAISALS,LLC SUMMARY OF SALIENT FACTS Legal Description: Lots 43 & 44, Block 4; Lot 9, Block 6; and Lots 7 to 9, Block 7;Booth Farms Filing#2, Firestone, Colorado. Flood Plain Status: The subject sites are outside potential 100 and 500 year flood hazards according to FEMA map panel 0802660861 C,published September 28, 1992. Highest&Best Use: Hold for future speculative residential development of a single home on each lot in conformance to the approved platting in Booth Farms. Owner of Record: B&L Leasing, LLC 3 Year Sales Disclosure: There have been no known or identified transfers of the subject sites over the three year required disclosure period. Information obtained from the Weld County Web services shows the following transfers. The appraiser suggests obtaining title insurance for a more accurate sales history. Sales History Legal Date of Sale Price Lot 44,Block 4 January,2007 $56,000 Lot 43,Block 4 January,2007 $56,000 Lot 7,Block 7 January,2007 $56,000 Lot 8,Block 7 January,2007 $56,000 Lot 9,Block 7 January,2007 $56,000 Lot 9,Block 6 November,2004 $330,000' 'Multiple Parcel Acquisition of Five Lots Including Lot 9,Block 6 Competency Provision: The appraiser notes and warrants that in accordance with the provisions of the 2010 USPAP, he is competent to perform an appraisal of the property that is the subject of this appraisal analysis. Specifically, it is noted that as of the effective date of the appraisal, Craig Castleberry has performed a number of vacant residential lot appraisals in southwest Weld County over the past nineteen years. Subject Specific Recommendations: The appraiser's Certification, Standard Contingent and Limiting Conditions are included in this report preceding the addendum. This is a real property appraisal excluding personal property, fixtures, and equipment. 2 6 LOTS Boom FARM COLORADO CERTIFIED APPRAISALS,LLC SCOPE OF WORK APPRAISAL SCOPE OF WORK After discussion with my client and intended user, Bank of the West, it was determined that the purpose of this appraisal report would be to communicate the fee simple market of each individual lot ("As Is") and the aggregate retail value of all six lots. In addition, the market and disposition values of the inventory in a bulk sale scenario to a single buyer have been requested for the subject lot inventory. The intended use of the conclusions and analysis communicated in this report will be to aid my client and the intended user, Bank of the West in acquisition, financing, loan classification, or asset disposition of the subject lot inventory. A detailed description of the subject lot inventory is included in the property description section of this report. Definitions "Fee Simple Interest"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."I At your request, this appraisal was prepared in accordance to the following definitions of market and disposition values: "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, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in this definition are 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.' 'The Dictionary of Real Estate Appraisal Fourth Edition The Appraisal Institute,2002 'Financial Institutions Reform Recovery.and Enforcement Act.Title Xi 1989,Section 323.2 amended at 57 Fed.Reg.9049,March 16,1992;59 Fed.Reg.29501,June 7,1994. 3 6 LOTS Boom FARM COLORADO CERTIFIED APPRAISALS,LLC SCOPE OF WORK "Disposition Value" is defined as: "The most probable price that a specified interest in real property is likely to bring under all of the following conditions: 1. Consummation of a sale will occur within a limited future marketing period specified by the client. 2. The actual market conditions currently prevailing are those to which the appraised property interest is subject. 3. The buyer and seller is each acting prudently and knowledgeably. 4. The seller is under compulsion to sell. 5. The buyer is typically motivated. 6. Both parties are acting in what they consider their best interests. 7. An adequate marketing effort will be made in the limited time allowed for the completion of a sale. 8. Payment will be made in cash in U.S. dollars or in terms of financial arrangements comparable thereto. 9. 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. The client has specified a 90 day future marketing period for the disposition value. "Aggregate Retail"is defined as: "The sum of the appraised values of the individual units in a subdivision, as if all of the units were completed and available for retail sale, as of the date of the appraisal. The sum of the retail sales includes an allowance for lot premiums, if applicable, but excludes all allowances for carrying costs. Also called gross retail value."JBJD "Bulk Sale Market Value" is defined as: "A valuation scenario in which a group of residential lots are transferred to a single purchaser in a single transaction as of the effective date of the appraisal. This valuation scenario recognizes an absorption period for the lots, deductions and discounts for hold and sales costs as well as a profit contingency. "3 'Subdivision Valuation Don Emerson,Jr.,MM,SRA,The Appraisal Institute,2008. 4 6 LOTS BOOTH FARM COLORADO CERTIFIED APPRAISALS,LLC SCOPE OF WORK Reasonable Exposure Time Reasonable exposure time is the estimated length of time the fee simple interest in the subject property would have been offered on the market prior to the hypothetical consummation of a sale at market value on the effective date of this report, July 20, 2010. Comparable lot sales provided in the subsequent Sales Comparison Approach section of this report have a days on the market range from 30 to 436 with lots listed for sale between 30 and over 700 days. These are misleading according to the listing brokers and do not take into account the period of time the lots were listed at unrealistic prices. A more realistic days on the market for the comparable sales is 30 to 180 days in consideration of adjusting the asking prices to market levels. Brokers interviewed concur with this estimate. There has been a significant inventory of lots with low sales volume over the past year. Based on current sales and broker interviews, a reasonable exposure period for each of the subject lots is estimated to be 30 to 90 days with an overall absorption of the subject inventory at 12 months or less. Property Appraised and Property Rights Appraised The subject property is an inventory of six residential lots in the second filing of the Booth Farms subdivision. These are in-fill lots with all infrastructure in place and raw water dedicated without water or sewer taps. The lots vary in size from 6,000 to 14,888 square feet in size. At your request, the retail value of each lot individually and in aggregate has been provided. In addition, the market and disposition values in a bulk sale scenario to a single purchaser of the fee simple interest in the subject lot inventory is being appraised. The following steps were conducted in appraising the subject property: I. Gathered data from numerous secondary sources including: Weld County records, Colorado Bureau of Labor and Employment, U.S. Census Bureau, City of Firestone, multiple listing service, the appraisers' records, CoStar data services, Realty Rates investor survey, DMCAR real estate listing association, Burbach and Associates Real Estate Investment Survey, Frederick Ross Market Survey, and various economic and development authorities relating to the subject market. 2. Consulted various personnel relating to the appraisal assignment including: knowledgeable real estate professionals; parties related to data presented (buyer, seller, lessor, lessee, buyer's broker, seller's broker), and original data collection surveys. 3. Visually inspected the subject property and surrounding area on July 20, 2010 considered the effective date of the appraiser's opinions and value conclusions. 4. Researched public records for data on the subject, including zoning, utilities and assessments. 5. Analyzed the highest and best use of the property. 5 6 LOTS BOOTH FARM COLORADO CERTIFIED APPRAISALS,LLC SCOPE OF WORK 6. Searched the local market for land sales similar to the subject sites. 7. Analyzed the comparable sales for perceived differences with the subject sites and estimated a market value for the each of the subject lots as well as an aggregate retail value for the entire inventory. 8. Utilized a cash flow analysis by deducting holding costs and discounting the net income by an anticipated absorption period to estimate a bulk sale of the inventory to a single purchaser. 9. Analyzed and compared bulk sales to the subject inventory to determine the market value of the subject inventory in a bulk sale scenario to a single purchaser. 10. Reconciled the information provided to determine the individual lot values, aggregate retail value, and market value of a bulk sale scenario to a single purchaser of the subject inventory. 11. Estimated a discount to apply to the "as is" market value in estimating the disposition value of the subject inventory in a bulk sale scenario to a single purchaser. 6 6 Lars Boom FARM COLORADO CERTIFIED APPRAISALS,LLC REAL ESTATE TAXES REAL ESTATE TAXES The Weld County Assessors' office has estimated an equivalent $50,000 actual value for each of the six subject lots with an equivalent assessed value of$14,500. The 2009 mill levy is 93.927 and total taxes for the subject inventory are calculated as follows: Assessed Value Mill Levy Per Lot Taxes $14,500 x 0.093927 = $1,361.97 x 6 Lots Total Taxes $ 8,171.82 According to the Treasurers' office, current and past taxes have been paid in full. The $50,000 actual value of each lot is above a market level and a tax protest would be well advised and should result favorably for the ownership. 7 6 LOTS BOOTH FARM COLORADO CERTIFIED APPRAISALS,LLC REGIONAL DESCRIPTION REGIONAL DESCRIPTION The subject property is located in Weld County. Weld County covers an area of 4,002 square miles in north central Colorado and is the third largest in the state. It is bordered on the north by Wyoming and Nebraska and on the south by the Denver metropolitan area. The third largest county in Colorado, Weld County has an area greater than that of Rhode Island, Delaware and the District of Columbia combined. The climate is dry and generally mild with warm summers, mild winters and a growing season of approximately 138 days. The land surface is fairly level in the east, with rolling prairies and low hills near the western border. Elevations in the county range from 4,400 to 5,000 feet. The South Platte River and its tributaries, the Cache la Poudre, Big Thompson, Little Thompson, Boulder, St. Vrain, and other smaller streams, flow into Weld County from the south and west, leaving the county on the east. There are 31 incorporated towns in Weld County. The county seat and principal city, Greeley, is located in the west central part of the county and contains almost half the county's population. Generally, most of the remaining population resides within a 20 to 30 miles radius of Greeley;the northeastern part of the county is sparsely populated. Recreational opportunities are almost endless. Much of Weld County is within an hour's distance of the Rocky Mountains. Weld County's cultural assets include Centennial Village, an authentic recreation of pioneer life on the Colorado plains. The Meeker Museum in Greeley is a national historic site. Fort Vasquez In southern Weld County has an exciting history as an early Colorado trading post. The Greeley Philharmonic Orchestra is the oldest symphony orchestra west of the Mississippi. The University of Northern Colorado's Little Theatre of the Rockies is one of America's premier college dramatic organizations. Weld County is agriculturally oriented, and is the leading producer of cattle, grains and sugar beets in the state. In fact, Weld County is the leading agricultural products seller in the state and is the fifth largest producing county nationally, according to Colorado State University. It is also the second leading producer of oil and gas in the state of Colorado. Given the county's agricultural base, opportunities exist to further expand food processing industries, agricultural research, biopharma, and bio-based products. Population growth will foster development in the services area. Weld County had an estimated population of 249,775 people in 2008, which is up from 131,821 people in the 1990 census count. When market conditions were better in the later 1990's, the southern portion of the county was one of the fastest growing portions of the state because of the affordable cost of living with adequate community services. 8 6 LOTS BOOTH FARM COLORADO CERTIFIED APPRAISALS,LLC REGIONAL DESCRIPTION Education Weld County features twelve school districts for educational opportunities, which have earned a reputation for quality. Greeley is the home of the University of Northern Colorado, a 4-year university offering bachelors, masters and doctorate degrees to 11,000 students. Aims Community College is a 2-year liberal arts and vocational college in Greeley with a second campus in Fort Lupton. MAJOR WELD COUNTY EMPLOYERS Company Description Employees Location IBS Swift&Company Headquarters Processed beef 3,650 Weld County North Colorado Medical Center Regional hospital 2700 Greeley Greeley/Evans District 6 Education 2307 Greeley/Evans Weld County County Government 1490 Weld U.S.Government Federal government. 1400 Weld State Farm Insurance Companies Auto,home,life,health,business insurance and 1322 Greeley financial services. City of Greeley Local Government 1306 Greeley State of Colorado Includes University of Northern Colorado 1159 StarTek,Inc. Integrated value added outsourcing service provider. 906 Greeley Wal-Mart Supercenter#980 Retail merchandise,food. 856 Weld Carestream Health,Inc. Medical Imaging products 800 Windsor Kodak Colorado Division Sensitized photgraphic and digital media supplies 750 Windsor Vestas Blades A/S Manufacturer of wind turbine blades 650 Windsor Aims Community College Vocational education/Arts&Sciences 745 Greeley/Ft.Lupton School District RE-4 Education 615 Windsor Hall-Irwin/Bestway Concrete Commercial buildings,land development, 550 Milliken pipe/infrastructure,aggregate supplies, McLane Westem,Inc. Grocery warehouse and wholesale distribution. 537 Longmont King Soopers(5) Retail Foods 494 Weld Asurion Process insurance claims on wireless phone policies 410 Evans and provide roadside assistance. School District RE-8 Education 369 Ft.Lupton The Greeley Medical Clinic,P.C. Health care. 350 Greeley School District RE-3J Education 334 Keenesburg School District RE-1 Education 320 Gilcrest Bonell Good Samaritan Center Homes for the elderly 315 Greeley District RE-51 Johnstown-Milliken Education 305 Johnstown Safeway(5) Retail grocer 284 Multiple North Range Behavioral Health Mental Health Treatment 248 Greeley Weld County is served by 16 newspapers in addition to the metro-Denver papers. Four radio local stations serve the area as well as radio and television stations originating from Denver and Cheyenne. The chart of population trends in Weld County from 1960 until 2008 is included on the following page. 9 6 LUIS BOOTH FARM COIURADO CERII PIED APPRAISALS,LLC REGIONALDESCRIP11ON Population Characteristics: Weld , Greeie Population (Census) 1960 f 72 344 26 314 197 89,297 38,902_ 1980 r 123,438 11 53,006 J 1990 131,821 1 60 536 2000 I 180,936 I 76,930 2008 I 249 775 911492 Source:US Census Bureau Unemployment Unemployment rates have been trending up over the past three years and are at the highest levels they have been in over ten years. Job growth has become one of the paramount issues of this recession. Year Greeley Weld Colorado U.S. 2000 3.20% 2.70% 2.70% 3.90% 2001 4.10% 3.50% 3.80% 4.80% 2002 6.20% 5.20% 5.70% 5.80% 2003 7.00% 5.90% 6.10% 5.70% 2004 6.80% 5.70% 5.60% 5.60% 2005 6.60% 5.60% 5.10% 5.10% 2006 5.70% 4.80% 4.40% 4.60% 2007 5.00% 4.20% 3.90% 5.00% 2008 6.20% 5.30% 4.90% 7.20% 2009 10.20% 8.70% 7.40% 10.00% _2010( 11.30% _ 9.60% 8.30% _ 9.50% Source:Bureau of Labor and Statistics 12010 Data as of June Weld County's proximity to the Denver/Boulder metro area and other northern Front Range communities places it within easy commuter distance to an estimated labor force of over 650,000. A high emphasis on family, low cost of living, and good proximity to transportation corridors are positive attributes to an area that has been dramatically affected by recessed conditions with high unemployment rates and decreasing home values. to 6 LOTS Boom FARM COLORADO CERTIFIED APPRAISALS,LLC AREA&NEIGHBORHOOD SUMMARY AREA AND NEIGHBORHOOD DESCRIPTION The subject property is located in the Town of Firestone approximately 25 miles north of The City of Denver and 20 miles east of the City of Boulder. Firestone is a small community in the southern portion of Weld County with an estimated June 2009 population of 8,356 (US Census Bureau). This is 338% above the US Census Bureau 2000 population estimate of 1,908 and Firestone was one of the most rapidly expanding US municipalities in the early portion of 2000. Firestone was founded by the Denslow Coal and Land Company and named for Jacob Firestone, owner of the townsite land. The town was incorporated in 1908 and was one of three towns (Dacono, Firestone, and Frederick) largely supported by the coal mining industry at the turn of the century. This area has been commonly referred to as the Carbon Valley because of the early coal mining activity. As coal mining began to wane in the 1940's, agriculture became the main industry of the Carbon Valley as well as most of Weld County. Light industrial development was expanding when market conditions were better, but agriculture remains the primary economic force in the area. The I-25 corridor in southern Weld County provides good linkage to the Denver Metropolitan area and Northern Front Range communities. Because of the locational character of the 1-25 corridor, and pro-development attitudes of government officials in Firestone and Weld County, new distribution and light manufacturing facilities were developed. Jobs created by these new facilities during the most recent economic expansion of the 1990s along with strong growth in the north Denver Metro Area substantially increased demand for new residential dwellings in Southwest Weld County. The area provided more affordable housing than primary employment centers to the south or west. Residential development was rapid in the late 1990's and early 2000, but development was slow to subside as recessionary conditions became more prominent and, eventually, the supply of housing and lots for detached housing exceeded the demand. The boundaries for the subject neighborhood are considered: Weld County Road 24 (Firestone Boulevard) to the North, Weld County Road 15 to the East, Weld County Road 18 to the South, and I-25 to the West. This is the northern section of Firestone that includes a mixture of residential, industrial, and commercial uses along with large tracts of vacant land. In the later potion of the 1990s and the beginning of 2000, the area appeared to be in the path of rapid residential growth. Numerous detached single-family subdivisions were planned and expanding in the subject neighborhood. However, development has stalled with recessionary conditions. The majority of existing uses are detached single-family homes on 8,000 to 20,000 square foot lots. There are pockets of commercial development along Weld County Road 13 with industrial development in the Raspberry Hill and Frederick West subdivisions that front 1-25. A Lexus and Toyota car dealership have built facilities along 1-25 with good exposure to the high traffic counts. Frederick West is an area comprised of metal and concrete manufacturing and office structures. Demand for industrial uses has been more subdued at Frederick West than a II 6 LOTS BOOTH FARM COLORADO CERTIFIED APPRAISALS,LLC AREA&NEIGHBORHOOD SUMMARY number of industrial parks along 1-25 because it does not have direct access to Interstate interchanges. Southeast of the neighborhood is the original portion of the town of Firestone. Development is residential in nature with primarily single-family detached housing. This area includes the 18 hole (240 acre) Saddleback Golf Course. The Golf course is considered to have a positive influence on the subject neighborhood as well as the entire Firestone community. Golf course frontage homes are proposed along the Saddleback Course that will also have a positive influence on property in the immediate area. Development projects that have impacted the subject neighborhood and Carbon Valley communities of Dacono, Frederick, and Firestone are the IS hole Saddleback golf course, Safeway anchored neighborhood shopping center, and King Soopers anchored shopping center. The golf course includes approximately 240 acres near the intersection of County Roads 20 and 13. The Safeway was completed in 2001 and includes 56,000 square feet of space. On either side of Safeway, there is approximately 22,605 square feet of supporting retail space in fourteen individual suites. An Adams State Bank branch was completed north of Safeway along with an Ace Hardware Store. At the southeast corner of Weld County Roads 24 and 13, is the Hi-Plains shopping center. A 68,000 square foot King Soopers grocery store was completed with supporting retail suites and free standing retail outlets available. Directly west of Hi-Plains is a Walgreen's Drug Store with a retail strip center north across Firestone Boulevard.. Summary and Relevance to Subject Property The subject neighborhood is a suburban residential area serviced by two neighborhood shopping centers that are anchored by good credit grocery stores. The area is benefitted from good access to the local highway and interstate network. During periods of growth, the area experienced some of the most rapid rates of expansion in Colorado. Recessionary conditions have cooled demand for all types of real property and have had a dramatic adverse affect on the residential market with a greater supply to meet the demand. 12 6 LoTs Boom FARM COLORADO CERTIFIED APPRAISALS, LLC AREA & NEIGHBORHOOD SUMMARY .: STu). . 1- _ _-_�� . tit'=, }tPfTY Pp:;a . - _ . ,.i4_ - --. SUBJECT r , a: .t-: , I ,m..;.,..,._a jl. cit , t J..% __ ►Tr.-_ilflf't,:E -_ _- i n_t I-. T K X 3 13 6 LOTS BOOTH FARM COLORADO CERTIFIED APPRAISALS,LLC PROPERTY DESCRIPTION PROPERTY DESCRIPTION Zoning According to the Firestone Planning Department, the subject property is zoned Residential-B, PUD with an approved ODP (official development plan) for detached housing. The underlaying Residential B zoning is intended for attached and detached residential development. The finalized ODP for the second filing of Booth Farm dictates the permitted uses and is 77 acres in size with 166 buildable lots and 12 outlots. Each of the subject lots is designated specifically for a single detached home. The final platting of the second filing for Booth Farms and PUD regulations are included in addendum to this report. Description of the Sites Location: Booth Farms is located along the west side of Colorado Boulevard (Weld County Road 13) and south of Firestone Boulevard (Weld County Road 24). The subject lots are located along the west side of the subdivision set-back from both arterials along the local roadway, Cherryvale Street. Lots 43 and 44 in Block 4 along the western bend of Cherryvale Street and abut the western boundary of the subdivision. The three lots in block 7 are 150 feet south of Lots 43 and 44 along the east side of Cherryvale Street. Lot 9, block 6 is at the northeast corner of Cherryvale Street and Shenandoah Avenue. Shape: Two lots in block seven and the lot in block six are rectangular in shape. Lots 43 and 44 in Block 4, and Lot 7, Block 7 are "pie" shaped lots. Access Good from Cherryvale Street. SUBJECT LOT INVENTORY—Booth Farms#2 Legal Address Size Parcel Number Lot 44,Block 4 10437 Cherryvale Street 11,372 SF 131312404044 Lot 43,Block 4 10435 Cherryvale Street 14,888 SF 131312404043 Lot 7,Block 7 10414 Cherryvale Street 8,334 SF 131312407007 Lot 8,Block 7 10392 Cherryvale Street 6,652 SF 131312407008 Lot 9,Block 7 10380 Cherryvale Street 6,000 SF 131312407009 Lot 9,Block 6 5785 Shenandoah Ave. 7,401 SF 131312406009 Topography Lots 43 and 44 have gentle slopes south and west. The three lots in block 7 that are located along the east side of Cherryvale Street, are generally flat and level with very gentle southern slopes. Lot 9, block 6 has a more pronounced slope to the west than the other five lots. 14 6 Lois Boom FARM COLORADO CERTIFIED APPRAISALS,LLC PROPERTY DESCRIPTION Drainage Drainage appeared adequate with no evidence of water pooling. FEMA Flood Designation: The subject sites are outside potential 100 and 500 year flood hazards according to FEMA map panel 0802660861 C, published September 28, 1992. Environmental Condition: No known soil or subsoil conditions exist that would hamper development. A phase I environmental analysis was not provided to the appraiser, but there were no apparent or reported environmental or hazardous conditions at the subject property. Utilities: The subject property has access to natural gas and electrical service as well as potable water and sewer from the City of Firestone. Raw water has been transferred and water and sewer taps are readily available. Development Condition: Infrastructure comprised of asphalt streets, concrete walks and utility stubs have been completed. The City confirmed that the lots are in "permit ready" condition with no outstanding issues that would delay permit issuance. HOA Fees: There is a$342 annual HOA fee per lot to maintain community open space. • •J..+ ♦. ' ...' .I.,l •—.(...o.. ' .. ••••V; •�• 1 1.. row• •: 1i, Lo14f l%t�43 • ac de' r fir.. f.I ,.ft 4. �.,: ,:j ,ntt �s. j,i • 4t .....a, w r-- -- ' ,.4t,. w ,4 I r , ., ♦ ..... � .....r.r.rw.... Lot 8• $ ' .A. j Lek 9 l' "A ' .{ -: � �Ml� 7 Lot 9' • { [ . ,.• eV i -. - «r'.4:4•.• »'i.lfrr:, r..1Y/.�/1'�..ys t. .,i '" ! ''A 1. I R 15 6 LOTS Boom FARM COLORADO CERTIFIED APPRAISALS, LLC PROPERTY DESCRIPTION � i' • • . • . . 0 • ;� . . : .- C.) i LI 1 ! 1, :` 3 F., -- filt";.. i;t7nlitel 1 1%4 \ lltr:Teht.:: 4„4 .i. 4 t ;t4. . .. . : —r-i---T—Lit ts t • f + r .. a,_�e'�°" I%Via_ " v .j ?., I. It g g •ftL. 'ft b - St t et,,,,-;t• 'A • r At 9 _ (,�� i ill wl . 0 1:.1 -� •i iq 7 -el I t a •fie-Ki.1..»�� ••ice. r ') .. .c`3 u^s+ 4O.... 3�.y a 2. . ' I. — - . .--�. .r.._. ... .__...._s. - • - 1F. � . � . j I ' • !; • �I. , l •it a I it .,. _ : . iti a. __ 16 6 Lots Boom FARm COLORADO CERTIFIED APPRAISALS, LLC PROPERTY DESCRIPTION yr _ 7. ;. . -- -_ �. a _ - • - - - . _ . - - - -•---- •• }� .� ' µ - I. --a�_ ' ... Looking North Across Subject Lot 44 ,-----.)go.-- - a. .. it }� .Yi 9- art _ .11fr- - ��- r' Y -r„ • - - _ - --- Looking East at the Three Subject Lots in Block 7 6 Lois Boom FARM COLORADO CERTIFIED APPRAISALS, LLC PROPERTY DESCRIPTION • . - _ . .2 r • • --_ . ss - -_._-_- - _-- Looking East Across Subject Lot 43 ( 10435 Cherryvale Street) I _ a.*7 . < • - ., ,-C . _ t w • '--'Clik ^ter • P �S (.77*1.. 14.: :1, ... . r a_:, __f..:: tl (yt tdt Y • 3 - t. I 4°rtr^)'2.,I v `.rs j,� .., ti. • 1-N.: ..--n`:...--,' r i Lam. ~1��-.f� r. 'il•J'f r '7 ....h ' �1{14S":_�.a';y�,��i �.....'A,tic. v �,,7f1�':.-', . A View to the North at Lot 9, Block 6 (5785 Shenandoah Avenue) 18 6 LOTS BOOTH FARM COLORADO CERTIFIED APPRAISALS, LLC PROPERTY DESCRIPTION t # . f6 K .S' a'J aalJ t • 1,44 rirt • "L *kir J •aft•,.-a- . - •- Shenandoah Avenue to the East jam. . tr : aC_ L.pvJiL 1sail • Cherryvale Street to the South I9 6 LOTS BOOTH FARM COLORADO CERTIFIED APPRAISALS,LLC HIGHEST AND BEST USE HIGHEST AND BEST USE ANALYSIS Highest and Best Use is defined as: "The reasonable probable and legal use-of vacant land or an improved property, which is physically possible, appropriately supported, financially feasible, and that results in the highest value. To determine the highest and best use of the subject site,the physically possible, legally permissible,and financially feasible alternatives have been considered. The subject lots are final platted in conformance to the Residential B zoning regulations for detached single-family home sites and have had an ODP specifying the size and use of the subject. A change in use would unlikely be desired or permitted. Raw water deficits have been satisfied and there are no outstanding issues that would prevent issuance of building permits. The lots vary from 6,000 to 14,888 square feet in size with sufficient topographical features and access to utilities to support detached residential development. There were no known environmental or hazardous conditions and the lots are outside 100 and 500 year flood hazard areas. Overall, the physical nature of the land supports the permitted use. When considering the feasible uses at the subject property, the supply and demand for homes and lots in the local market was analyzed. The limited lot sales activity has been predominantly REO sales following foreclosure. Current residential lot prices arc 40% to 70% below prices paid four to six years ago. In fact, lots are being acquired below the cost to acquire the raw land, dedicate raw water, and install infrastructure. Local brokers report that once stimulus incentives expired, housing activity throughout Southwest Weld County stalled. ''here remains a limited availability of financing to support a local home builder to pursue development of the subject lots. Residential market conditions have not changed since last year and speculative home development is not justified The highest and best use of the subject sites, are to hold the lots until market conditions improve or an end user is identified. The Dictionary of Real Estate Appraisal,4th Edition,Appraisal Institute,2002. 20 6 Logs Boom FARM COLORADO CERTIFIED APPRAISALS. LLC SUMMARIZED MARKET ANALYSIS SUMMARIZED RESIDENTIAL LOT MARKET While there is optimism that the longest recession in over fifty years will soon end, there is no indication of significant job growth in the foreseeable future. In the 2010 Colorado Business Economic Outlook completed at the end of 2009, there was no anticipated change in housing demand. Factors affecting the tepid demand for housing were an anticipated slow employment growth and oversupply of home inventory from individuals who have suffered job losses and lenders needing to unload inventory acquired from foreclosures. The first half of 2010 has supported this assertion with lower sales volume and fewer building permits than the same period in 2007 and 2008, but the sales volume and home building activity are above the levels of last year. Stimulus programs were the primary force behind the improved activity and activity has essentially stalled since the programs expired. It is important to note that production builders began to re-build land inventories at the first of the year and took advantage of the historically low prices for finished lots. There were more bulk lot sales in the first five or six months of 2010 relative to the entirety of 2009. - Firestone Residential Permits 300 250 248 244 200 I- 195 150 1 ` I � 100 104 87 72 50 61 0 2004 2005 2006 2007 2008 2009 2010 2010 Data Current as of July 23, 2010 There is also an unbalanced supply exceeding the demand for lots proposed in the Carbon Valley area. A summary of the lot inventory is included below. Residential Lot Inventory - Carbon Valley Proposed & Unbuilt Being Built Total Inventory Firestone 8, 100 2,900 11,000 Frederick 8,391 3,009 11 ,400 Dacono 8, 100 2, 100 10,200 24,591 8,009 32,600 21 6 Los Boom FARM COLORADO CERTIFIED APPRAISALS.LLC SUMMARIZED MARKET ANALYSIS The area has experienced significant foreclosures because of difficulties associated with sub-prime mortgages. The bank owned homes (REO properties) were offered at discounted prices influencing a downward detached residential value trend. The strained residential market conditions are a product of unregulated sub-prime lending practices, a troubled fmancial industry,and national recessionary conditions. Information available from the local MLS, shows that there are 215 home listings in the Tri-Town area of Dacono, Firestone, and Frederick with an average price of$228,294. Over the past year 377 homes have sold with an average sales price of$224,301. Very limited residential lot sales have been entered into the MLS in the Carbon Valley over the past 12 to 18 months. There have also been a limited number of inquiries for the lots listed for sale. A market survey and analysis of Northern Colorado data indicates that lots have been selling between $8,000 and $80,000. Areas similar to the subject have had.typical tut prices between$14,000 and$30,000. The rapidly expanding Cities of Frederick and Firestone in the early portion of 2000 resulted in an oversupply of detached residences and residential lots in the local market over the past few years. The contraction of the residential market and limited availability of financing has precipitously diminished demand for homes and detached lots. A recovery to levels of development that occurred in 2004 and 2005 will unlikely return until financing becomes more readily available and job expansion returns in primary employment centers. In 2010, weak demand will be further limited by continued chronic oversupply from a combination of distressed home sales by individuals who have suffered job losses or other economic setbacks, and by the need for lenders to move foreclosure properties. In the past few months, there have been a number of lot sales acquired by lenders and the FDIC from builders unable to service their debt. This has provided a qualitative indication of decreasing price levels. Property owners have also begun to more realistically price residential properties stimulating some activity as well. Although sales are dramatically discounted from past price levels, it represents market activity that was nearly non-existent in 2009 with builders showing increased interest in residential land. Market Participant Interviews In the development of the appraisal a number of seasoned real estate brokers, property managers, and property owners were interviewed regarding the local office, retail, and light industrial market. Some of the more pertinent interviews relating to the subject market arc summarized below. Dennis Schick is a well established broker in Northern Colorado that has numerous listings for finished residential lots in Weld County including the adjoining St Vrain Ranch subdivision directly cast of the subject. There has been very limited land sales activity in Carbon Valley this year and a number of property owners are losing their lot holdings through foreclosure. The increased REO inventories and limited availability 22 6 Lois BOOTH FARM COLORADO CERTIFIED APPRAISALS,LLC SUMMARIZED MARKET ANALYSIS of financing is having an adverse affect on lot values. Lot price trends will continue in a downward direction until the substantial bank owned and FDIC controlled inventories are reduced. This is unlikely to occur this year since a number of foreclosures are likely to occur throughout 2010. Shyla McKee is a broker with lot listings in the subject subdivision including one lot adjacent to the subject lots in Block 4. She has had her lots listed for sale at $34,000 for well over a year with no interest. Although it is generally accepted that 2009 was one of the most difficult marketing periods for residential lots, there does not appear to be much change in market conditions this year relative to last year. There was an increase in home sales when first home buyer tax credits were available, but sales activity immediately stalled when the stimulus expired. Home builders are unable to finance residential construction projects and home prices in the subject subdivision have been continuously decreasing. Billie Jo Downing is a broker that sold a lot in the Mad Russian subdivision in Milliken this year for $14,400. Four or five years ago the lots in the subdivision were selling for $55,000 to $65,000. There is very limited interest and sales activity in southwest Weld County. She currently has two more lots listed for sale at $18,000 each. There has been no interest in the lots. She believes market conditions have not changed in 2010 relative to 2009 for vacant residential lots in Weld County. The respondents indentitred as well as other market participants have not seen the anticipated rebound in the southwest residential lot market that was projected. The subject area appears to have been more dramatically affected by the current economic downturn and there have been a number of home and residential lot foreclosures the past. six to twelve months. Lot values are below the cost to acquire the raw land and install infrastructure indicating that land development projects arc not feasible. The most prudent action for lot owners would be to hold inventories until market conditions stabilize which will certainly not occur in 2010. There has been interest in residential lots priced between $10,000 and $25,000 because at this level a speculative investor can afford to hold an inventory until market conditions improve. the residential lot value trend will most likely continue in a downward direction for the remainder of the year. 23 6 LOTS BOOTH FARM COLORADO CERTIFIED APPRAISALS,LLC VALUATION METHODOLOGY VALUATION METHODOLOGY The traditional appraisal process in the valuation of improved property calls for three approaches to be used in estimating market value; The Cost Approach, The Income Approach, and The Sales Comparison Approach. Typically, the Cost and Income Approaches are utilized for property improved with permanent structures. There is insufficient market evidence to develop the Income and Cost Approaches for the subject property in this report. The most typical land valuation techniques are summarized below: Sales Comparison The Sales Comparison Approach requires the collection and analysis of market data about land similar to the subject property that have sold recently or are offered for sale. Information about similar parcels is compared to the subject property with the greatest consideration going to the most similar properties that actually sold. Land Development The land development technique is a means of valuing the "as is" value of raw land intended for development by a discounted cash flow process. All costs associated with the development of the land are deducted from the projected gross revenue acquired with the sale of finished lots. The net income is discounted back to a present value by a market derived discount rate that takes into consideration the risk of the project as well as the forecasted absorption of the finished lots. Allocation In the allocation technique, either sales of improved properties are analyzed and the prices paid are allocated between the land and the finished properties, or comparable sites under development are analyzed and the costs of the finished properties are allocated between the land and the improvements. Allocation can be used in two ways: to establish a typical ratio of land value to total value, which may be applicable to the property being appraised, or to isolate the value contribution of either the land or the building from the sale for use in comparison analysis.5 Extraction In the extraction technique, land value is estimated by subtracting the estimated value of the depreciated improvements from the known sale price of the property. This procedure is frequently used when the value of the improvements is relatively low or easily estimated. fslD S The Appraisal of Real Estate,Twelfth Edition,Appraisal Institute,Chicago,Illinois,2001 24 6 Lois Boom FARM COLORADO CERTIFIED APPRAISALS,LLC VALUATION METHODOLOGY Land Residual When developing the land residual technique, the land is assumed to be improved to its highest and best use. The income attributable to the return on and of the value invested in the improvement(s) is deducted from the net operating income. The result is the income attributable to the land. This income is capitalized to derive an estimate of land value. BID Ground Rent Capitalization This procedure is used when land rents and land capitalization rates are readily available, eg, for appraisals in well-developed areas. Net ground rent, the net amount paid for the eight to use and occupy the land, is estimated and divided by a land capitalization rate. Either actual or estimated rents can be capitalized using rates that can by supported in the market. 'em Final Value Estimate A final value estimate is derived by correlating the indications from the Sales Approach. This is the most reliable value technique when there are sufficient recent and comparable sales in the local market. There is sufficient data to develop the Sales Comparison Approach in this report. This is considered the most reliable and only approach developed to estimate the value of the subject sites in this report. 25 MEADOWS-WELLINGTON COLORADO CERTIFIED APPRAISALS,LLC SALES COMPARISON APPROACH SALES COMPARISON APPROACH When there are a number of recent land sales that have similar characteristics to the subject, the Sales Comparison Approach is one of the best land valuation approaches. Based on the principle of substitution, a prudent buyer would not pay more for the subject than the price required for a comparable substitute property. A summary of the most comparable sales and listings used to estimate the value of the subject lots is included in the chart below. Hate \o Location Sales Price of I oI S/I i t Lot Size(SI I of�udc 1 Columbine Estates,Wellington 4 Lots Blocks B2,B3&B4 5/2010 $110,000 4 $27,500 6,700 Ave 2 Lots Block B3&B19 5/2010 $50,000 2 $25,000 8,750 Ave 3 Lots Block 3&4 4/2010 $82,500 3 $27,500 7,100 Ave Lot5,Block 2 1/2010 $24,000 I $24,000 7,140 2 Timber Ridge,Severance Lot 12,Block 5 3/2010 $33,000 1 $33,000 9,733 Lot 15,Block 5 5/2009 $29,000 1 $29,000 13,843 3 Noname Creek,Frederick For Sale $33,400- 10 $33,400- 6,900—8,900 $36,500 $36,500 4 Mad Russian,Milliken 311 Heidie Lane 3/2010 $14,400 1 $14,400 7,320 Heidie Lane For Sale $18,000- 3 $18,000- 7,320 $25,000 $25,000 5 Stroh Ranch,Johnstown 2134 Blue Wing 3/2010 $8,000 1 $8,000 6,000 Multiple For Sale $9,750 4 $9,750 6,500 Ave (U/C) 6 St Vrain Ranch,Firestone Lot 3,Blk 5,#5 4/2010 $40,000 1 $40,000 9,831 Lot 19,Blk 5,#3 For Sale $39,000 5 $39,000 10,039 7 Grapevine Hollow,Evans 3334 Merlot 9/2009 $13,333 I $13,333 6,098 Multiple For Sale $18,255 2 $18,255 6,200 Ave. S Johnson Farm,Frederick 5426 Drake Street 5/2010 $18,000 1 $18,000 7,840 5485 Gunnison Drive For Sale $18,000 1 $18,000 6,534 9 Monarch Estates 4/2010 $60,000 3 $20,000 9,117 to 10,428 10 Booth Farms,Firestone 10413 Cherryvale For Sale $34,000 l $34,000 8,366 10475 Cimmarron For Sale $34,000 I $34,000 8,049 26 MEADOWS - WELLINGTON COLORADO CERTIFIED APPRAISALS, LLC SALES COMPARISON APPROACH HYRR , trail Sale in - (•abwtbh►e Fssstwe, Waken _-_ - _. r.........., tt 1 , ♦ 1� .► •a �� N . � .SD._- Lot Sale -1 IJS�et Ride..Hlee. Sestrrce I { 1imeida%" ! - a taraatn i - [stun lifl a;or1/41$14 , ; - „Y. 1;.:I- --." . - - .-..-...yrilnif. _ la -,-.0.... - - . - btu t 1 . ..:_,Let Sidle AC• Grapevine Hellaie. Evans I I L& Sale mai ?Id liassiaa. Makes d r. a;a,t« -S1/44.44N) r i.• ,it th—torg Sale to - Sank itawtit. Js$snu►tw • crest • wire: • s ♦mare +brew* `.,S['IIJI:(�T La tide ..10 mum alot Sale * - St ♦taro tswefi j 7.1. ' �� y� tea..... -.-- -..•-r- - I,';fq --�- _ . . !La Salt M - Meon& Bones a lnttmar r __ ��__ , �-.I.ol Sale vS Nesane t ♦ett Ft MuaA Lot Salt 4 - ila`lan i ants i 'atm �. '`�"" •4. , s*j ilvacs�iro t_ i J-- __;QuItarrai �.. • - 9wiar+Mw - -- - �Er.e / ... 'v.' ,rUtiprx f{ , t _� . . ,iota '�a dixu t .. Q dos. t rye a: , --- 1 thit C►ata use sutbect to tcense1 INNS min no Detterne D:,.ottm Street At+as '. :4,tJ 0 2 4 6 8 10 ,Mwit *NprrrX t7^ t.4t89' EI Data Zoom 9• , 27 MEADOWS-WELLINGTON COLORADO CERTIFIED APPRAISALS,LLC SALES COMPARISON APPROACH Lot sales volume has nearly stalled the past two years and both listings and sales have been displayed in determining the market retail value of each of the subject lots. Comparable #1 includes a summary of substantial lot sales activity in the Columbine Estate subdivision of Wellington. Columbine Estates is on the west side of Wellington were there have been substantial home development the past couple of years. The comparable lots are approximately 38 miles north of the subject in a similar suburban community as Firestone. WC Builders and Sage Homes have been acquiring lots between $24,000 and $27,500 over the past year in the comparable subdivision. Including independent builders, twenty-two lots sold in the subdivision the past twelve months with a number of homes under-construction on the effective date of this report. The lots are typically 7,100 square feet in size which is similar in size to the subject lots. Demand for homes in the comparable subdivision is superior to the subject subdivision and,overall,the comparable lot price range of$24,000 to$27,500 is above market for the subject. It is unlikely that a home developer in the subject Booth Farms subdivision would enjoy the success that WC Builders and Sage Homes has enjoyed. Comparable #2 is two lot sales similar in size to the subject lots in the Timber Ridge subdivision of Severance. The comparable subdivision is of an affordable nature with thirty-seven homes selling in the past fifteen months for an average price of $204,603. This is an entry home market that has performed well because of the first time home buyer credit that was available. Potential home buyers are also able to qualify for homes at this price level which will likely allow the home builders to continue selling homes at this pace. A home builder at the subject subdivision would unlikely sell a finished home at the subject subdivision as rapidly as the comparable. The strong demand for homes in the comparable subdivision is superior to the limited demand for homes at the subject subdivision and the $29,000 to $33,000 lot price range is above market for the subject lots. Comparable #3 includes information about listings in the NoName Creek Subdivision in Frederick. This is a very similar subdivision to the subject located approximately one mile south of the subject. The subdivider initially offered lots for sale without raw water dedication and there was limited response. There are currently ten lots available for sale that the listing agent disclosed includes the satisfaction of raw water. The subdivider has no pressure to liquidate the lots and has no interest in selling below $33,400 per lot. He would consider financing the acquisition of all ten lots. There has been no interest in the comparable lots at this price level and they better represent the lowest price the owner is willing to receive than a market indicated value. These are unrealistically priced lots above a market value for the subject lots. Comparable #4 is a March 2010 sale of a lot at $14,400 in the Mad Russian subdivision in Milliken. It also includes information about three listings. The comparable subdivision has a similar rural Northern Colorado location like the subject subdivision, but has had limited demand with the deterioration in the housing market. The lot that sold was available for over three years at $65,000 with the raw water deficit satisfied. The sellers eventually accepted the $14,400 offer after the long listing period 28 MEADOWS-WELLINGTON COLORADO CERTIFIED APPRAISALS,LLC SALES COMPARISON APPROACH and recognizing the substantial inventory of similar lots available in Weld County and Northern Colorado. The listing agent reported that she has two nearly identical sites available for $18,000 each with absolutely no interest. The comparable location has inferior access to community services and I-25 like the subject. Overall, this is an inferior location and the $14,400 lot sale is below a market value for the subject lots. Comparable #5 includes a March 2010 sale and four listings of lots in the Stroh Ranch subdivision in Johnstown, Colorado. Johnstown has similar characteristics to Firestone, but is further from employment centers and is an overall inferior location. The comparable subdivision is also south of Central Johnstown and is inferior in nature to the subject subdivision. The comparable lots are FDIC assets and require the buyer to pay past due taxes. The listing agent reported that an additional $2,400 was required with the sale of the lot which equates to a total acquisition cost of$10,500. Seller motivation is also associated with the lot sale. There are an additional four lots available for $9,750 with approximately the same amount of past due taxes as the lot that sold. These lots are under-contract for less than the asking price. Considering the inferior location and seller motivation, the $10,500 acquisition price of the lot that sold is below market for the subject lots. Comparable #6 includes the asking price for five lots in the Saint Vrain Ranch subdivision directly east across Weld County Road 13 from the subject Booth Farms subdivision. It also includes the sale of one lot for $40,000 that was confirmed through public records and is not considered highly reliable information. This is a very similar location and subdivision to the subject. There has been limited interest in the comparable lots at $39,000 although there is a single sale at $40,000. One listing agent reported that he had an inventory of lots listed at $72,000 each in the comparable subdivision with no interest and they are in the process of being foreclosed. This will add to the inventory of REO lots available in the local market placing greater downward pressure on market prices. Comparable#7 is a lot sale in the Grapevine Hollow subdivision in Evans directly south of the Greeley City limits. This is one of three lots that sold for$13,300 each with raw water deficits satisfied. Similar to the subject Carbon Valley area, there is a large inventory of lots available in Greeley stemming from the distressed residential market conditions. The comparable and the other two lots that sold for the same price represented excess inventory of a home builder. The comparable Evans location is inferior to the subject location and the $13,300 lot price is below a market value for the subject lots. The listing agent reported that there are two more lots available for a listing price of$18,255, but the seller would likely accept a lower offer. Comparable #8 is a May 2010 sale of a lot in Frederick that sold with the raw water deficit satisfied. The comparable Johnson Farm subdivision is similar in nature to the subject Booth Farms subdivision, but the comparable location is further from community services and is a slightly inferior location. In addition to the lot that sold, there is a lot available at the same $18,000 price. This is considered to be near, but slightly below a market lot value for the subject lots. 29 MEADOWS-WELLINGTON COLORADO CERTIFIED APPRAISALS,LLC SALES COMPARISON APPROACH Comparable #9 is sales information obtained from public records and confirmed through recorded deeds. This is the Monarch Estates subdivision directly east of the subject with slightly inferior access to shopping amenities than the subject. The comparable sale includes information about three lots for$20,000 per lot. Comparable #10 is two lots currently listed for sale in the subject subdivision. One of the lots is adjacent to the subject lots along the western boundary and the other lot is an interior lot. The listing agent reported that there is no discernable difference for the lots along the western boundary and interior lots. There has been no interest in the lots at this price level indicating that$34,000 per lot is above market for the subject lots. The subject ownership did not disclose a current asking price for the subject lots and there were no listings discovered in the local MLS or other typical listing services. The information provided shows that listings within the immediate subject area are typically $33,400 to $36,500 with limited response which is above a market level for the subject lots. Comparable #1 has had superior demand for housing providing a predictable absorption for home builders and the $24,000 to $27,500 price range is considered above market for the subject lots. Closed transactions within comparables#4, #5, #7, #8, and #9 are inferior to the subject indicating the $20,000 per lot price is below a base lot value for the subject. This supports a base lot price range of $20,000 to $24,000 for the subject lots which is reasonably rounded to a base lot value of$22,000. Comparable #2 provides sale data that shows there is not a premium paid for larger lots in suburban subdivisions like the subject. The comparable listings at the subject subdivision (comparable #10) and conversations with the listing agent additionally indicate that there is no indicated premium or discount for lots along the western boundary relative to interior lots. The subject ownership acquired five of the six lots for the same price as an inventory of lots to support production home development. There is no premium attributed to size of location for the lots in blocks 4 and 6. However, 5785 Shenandoah has a more prominent slope and is in a slightly less mature area than other five lots and has an estimated 10% discount from the base lot value to $20,000. Lot Value Summary SUBJECT LOT INVENTORY—Booth Farms#2 Legal Address Size Value Estimate Lot 44,Block 4 10437 Cherryvale Street 11,372 SF $22,000 Lot 43,Block 4 10435 Cherryvale Street 14,888 SF $22,000 Lot 7,Block 7 10414 Cherryvale Street 8,334 SF $22,000 Lot 8,Block 7 10392 Cherryvale Street 6,652 SF $22,000 Lot 9,Block 7 10380 Cherryvale Street 6,000 SF $22,000 Lot 9,Block 6 5785 Shenandoah Ave. 7,401 SF $20,000 Aggregate Retail Value $130,000 30 MEADOWS-WELLINGTON COLORADO CERTIFIED APPRAISALS,LLC SALES COMPARISON APPROACH Absorption Rate A subdivision absorption analysis is based on historical sales rates from both the subject subdivision as well as subdivisions in the local market. Unrealistic listing prices and recessed market conditions have resulted in no lots sales the past twelve months at the subject subdivision. The Fredrick and Firestone areas have had very limited sales activity the past couple of years. Five of the subject lots sold in January of 2007. Market perception indicates that 2009 represented one of the worst residential lot markets in over ten years. Although there was increased home sales at the beginning of this year because of national stimulus programs,once the incentives expired sales activity stalled. Most local brokers feel that market conditions in the subject Carbon Valley area have not changed since last year. There have been confirmed individual lot sales in Frederick at Johnson Farms and in Evans at Grapevine Hollow at realistic $13,333 to $18,000 prices. Once the lots were listed at these prices, a thirty to ninety day exposure period was required to sell the lots. There were eleven home sales in Booth Farms from January to July 1 of 2010 between $195,000 and $308,000 or an average of$238,445. This average home price and home sales price would be sufficient for home builders to acquire the subject lots at $20,000 to $22,000 each and generate sufficient profit to justify construction. It is anticipated that if listed at market levels, each of the subject lots would sell in a thirty to ninety day period or six to eighteen months. This is reasonably rounded to a sell-out period of twelve months. It is unrealistic to anticipate which of the subject lots will be sold more quickly and the total $130,000 aggregate retail value is divided evenly over the twelve month absorption period. Subject 6 Lot Absorption Projection and Revenue Distribution 10/2010 12/2010 2/2011 4/2011 6/2011 8/2011 Per Lot Value $21,667 $21,667 $21,667 $21,667 $21,667 $21,667 Lots Sold 1 I 1 1 1 1 = 6 Revenue $21,667 $21,667 $21,667 $21,667 $21,666 $21,666 Total Revenue =$130,000 Sales and Holding Costs Sales expenses will include a broker's commissions, and an additional contingency for closing costs and advertising. Sales commissions on vacant lots vary from 2.5% for cooperative fees to between 5% and 10% for full exclusive listing arrangements. In the current market, it would be most prudent to pay a local, experienced broker a typical 6% commission. Overhead, title policy, and promotional expenses are estimated to be 2% for the subject. The total sales expenses are estimated at approximately(6%commissions+2% overhead,promotional) 8%of the total gross sales. 31 MEADOWS-WELLINGTON COLORADO CERTIFIED APPRAISALS,LLC SALES COMPARISON APPROACH Taxes The total taxes for the six subject lots are $8,171.82 or $113.50 per lot per month. Insufficient data is available to determine when each specific lot will sell. The tax liability will be reduced$113.50 per month as each lot sells. HOA Fees Each lot is charged a $342 annual HOA fee for maintenance of community parks. The HOA liability will be reduced$28.50 per month as each lot sells. Appreciation The residential market continues to experience a decreasing value trend. There is not anticipated to be any appreciation for the twelve month absorption period. Discount Rate&Profit To estimate an appropriate discount rate for the subject, I give consideration to discount rates for national, development land as indicated by the Korpacz Real Estate Investor Survey and Burbach Real Estate Investment Survey. Land developers require a profit before they pursue a project. There are two manners in considering profit with a land development technique. One is adding a line item contingency in the discounted cash flow analysis and the other is incorporating the profit contingency with the discount rate. In this analysis,the profit contingency has been incorporated with the discount rate. Overall, the local Burbach and Associates Survey (Winter 2009/2010) shows a discount rate range from 18.00%to 25.00% for finished residential lots including a profit contingency with an average of 20.55%. The national Korpacz survey shows a 12% to 25% range with an average of 18.58%. The Realty Rates developers' survey shows a 17.93% to 41.21% discount rate range with an average of 28.98% for the Mountain regions that include Colorado. Another manner to derive a discount rate is a built-up derivation using a band of investment to derive a capitalization rate and additional spread for risk and anticipated revenue growth. "Safe rate" investments currently yield 2% to 4%. An equity capitalization rate of 30% is estimated for the subject because of its risk. Equity is estimated at approximately 50% for projects similar to the subject. Using a 20 year amortized loan at 7%, the following band of investment or weighted average technique is considered reflective of the Financial Discount Rate applicable for the subject property. Loan-to-Value Ratio(M) x Mortgage Constant(Rm) + Equity Position x Equity Capitalization = Overall Rate(Ro) Therefore: 0.50 x 0.09304 = 0.04652 +0.50 x 0.300 = 0.15000 0.19652 32 MEADOWS-WELLINGTON COLORADO CERTIFIED APPRAISALS,LLC SALES COMPARISON APPROACH The indicated capitalization rate would be 19.65%. Discount rates are generally 100 to 300 basis points above capitalization rates which would equate to a 20.65% to 22.65%discount rate range. Source Market Rate Type Discount Rates Winter 2009/2010 Denver Discount/Yield Rate With Profit Burbach Real Estate (IRR); Residential Range: 18.00%- 25.00% Investment Survey Finished Lots Average: 20.50% Korpacz Real Estate Nation Discount Rates(IRR); Includes Developers Profit Investor Survey National Development Range: 12.00%-25.00% Land Market Average: 18.58% Realty Rates Mountain Actual Discount Rates Includes Developers Profit Region Range: 17.93%-41.21% Average: 28.98% Built-Up Analysis 20.65%to 22.65% The secondary source data indicates a discount rate between 12% and 41% for residential projects including a contingency for profit. The average rate range is 18.58% to 28.98%. Based on the above analysis, a 22% discount rate is selected for the subject project. Discounting is applied at the end of period. 33 U < U e^ 6 O K 0. Q. 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S F 8 m O '0 b 6 LOTS BOOTH FARM COLORADO CERTIFIED APPRAISALS,LLC SALES COMPARISON APPROACH BULK SALE ANALYSIS In estimating the bulk sale analysis of the subject lots, Another manner of estimating the value of the lot inventory is through a sales analysis of bulk sales of residential lots. Below are four transfers of lot inventories with infrastructure installed. These are all larger inventories than the subject, but no inventories of similar size to the subject were discovered in the local market providing an indication of a discount for the sale of the subject inventory in bulk. COMPARABLE LAND SALES \,, I nealiuo Date tot 'tale '.:Jett Price #III'I oh ti Lot Lot Site(SI 1 Neighbor's Pointe,Firestone 3/2010 $2,708,000 156 $17,359 10,523 Ave 2 Timnath South,Timnath 12/2009 $1,225,000 35 $35,000 8,500 Ave 3/2010 $1,672,000 38 $44,000 3 Johnstown Farms,Johnstown 2/2010 $252,000 18 $14,000 6,602 Ave 4 Timnath Ranch,Timnath 1/2010 $900,000 180 $5,000 11,500 Ave The four comparable sales vary in unit price from $5,000 to $44,000 per lot and are located in Northern Colorado communities of Firestone, Timnath, and Johnstown. Comparable #1 included 104 finished lots and 52 lots platted, but without infrastructure installed. Comparables #2 and #3 are inventories of lots in typical development ready condition with infrastructure installed. Comparable #4 is the sale of, "raw", lots in unfinished condition. A location map and sale profile sheet of each sale is included on the following pages. 35 6 LOTS BOOTH FARM COLORADO CERTIFIED APPRAISALS, LLC SALES COMPARISON APPROACH ntammor; rt, 1 I men EviAtiariltl,ci>, • le. J 1 at pit 1 It Mitt I 4.X_I . .. • ikeler41. .. 'Saie 04 - Ili nstr ilastbi ' ftsiereir i ti i Pm bale AtZ tLslalb bau& „ • " 3e+r'>r+ a *ton 9atr . . i •rowdier I icnwtnr rot 1 „ '- 2sue,-rsdCads i s t� _ I T air ' Y flotsta", •.. LAS*" r '"' _ a ,....„1ISait s3 Jasttaw Farms, Jasmine's.'.1 t • i rat Afro , - 1 I We: : i .ec:.: 1. . N.tune ' I • • vrrut9rraan ir.ngT-rri e eV. �+itoted 33 'r 1 Let Sale ul Neif b.r's Poid41 otos tar `° to lup1o+. _,1 ..sob.- iv, i ! F It 12 . IScum+an • 4 7 ... i i i I IA O ftti o,;a c utk!Ct tO RCPrS. • �t-m n «► pckt c&fr# 511601 MMA& I xatift to I 0 2 4 S 8 10 ..nwn r'�+.IIJrr/r r;vr• MN tg Q' E) Data Laotn 9.: 36 6LoTS Boom FARM COLORADO CERTIFIED APPRAISALS,LLC SALES COMPARISON APPROACH A c' r . I "'�""-7, 14 ,. 4 12 _ ^vi,.. Y2.3 T.v4 < x k . . !'+i XIT% -:, a f .S "ik .r4 ,i w a ��x,', . r , z, , FIRESTONE - '� Neighbor's Point '._r< , 't�'"1 x . . ' •L.% ' 9 5. $ I 'a .hA �,G S.. *° Y 4 « .,•;,- e x v � IffiY � ',L�`�Zp. �Ik� y `�' . C. Land Sale 1 Location: Neighbor's Point,Firestone Date of Sale: 3/2010 Selling Price: $2,708,000 Number of Units 156 Lots Reception Number 3682942 Price Per Lot: $17,359 Proposed Use: Detached Residences Typical Lot Sizes: 10,523 Square Feet Entitlements: Fully Entitled and Final Platted Parcel Number: Multiple Property Condition Fifty-four finished single family lots and 104 Lots in unfinished condition. Grantor: First National Bank Grantee: MSP Corporation Financing Terms: Cash to Seller Confirmation Source: Buyer,County Records,CoStar Comparable sale 1 is a recent March acquisition of 156 bank owned lots in Firestone. It was confirmed that fifty-two of the lots were in unfinished condition. with streets and infrastructure installed. The remaining 104 lots were final platted with infrastructure installed including streets and utility stubs. The City of Firestone confirmed that raw water deficits had been satisfied for all 156 lots prior to the sale. Typically, inventories of lots as large as the comparable will sell for a lower per lot price than 6 lot inventories like the subject. This is a sale of an entire subdivision that would allow a developer to implement their own design at nearly half the cost to develop the property. The design of the subject subdivision is set. Although the comparable is a larger inventory with 33% of the lots in "raw", unfinished condition, the subdivision would allow a developer to implement a unique design to fit the market. 37 6 LOTS BOOTH FARM COLORADO CERTIFIED APPRAISALS, LLC SALES COMPARISON APPROACH , . :... Timnath South f Land Sale 2 Location: Timnath South, Timnath Date of Sale: 12/2009 / 3/2010' Selling Price: $1,225,000 / $1,672,000' Number of Units 35 Single Family Lots 38 Single Family Lots Reception Number 89594 Price Per Unit: $35,000 / $44,000' Proposed Use: Detached Single Family Homes Typical Lot Sizes: 8,500 Square Feet Entitlements: Full Parcel Number: Multiple Property Condition Platted and finished single family lots without water taps. Professional ConstructionGrantor: Timnath Ranch, LLC Grantee: Services, Inc. Financing Terms: Cash To Seller Confirmation Source: Seller, Listing Agent, MIS, County Records Comparable sale 2 is information about a December 2009 and March 2010 sale of finished lot inventories. The comparables included typical 8,500 square foot lots intended for detached residential development in the Northern Colorado, Timnath South subdivision. This is a superior location of larger lots that will eventually provide a much greater return than the subject inventory. Homes in the past eighteen months have sold between $270,000 and $330,000, but at a very slow pace. The comparable is within the Fort Collins/Loveland water district and, similar to Wellington, requires raw water fees with the permit for the eventual home. Overall, the $35,000 to $44,000 per lot price is well above a market value for the subject inventory, but was included to show how much lot prices for superior detached single family lots have decreased in Northern Colorado. 38 6 LOTS BOOTH FARM COLORADO CERTIFIED APPRAISALS, LLC SALES COMPARISON APPROACH . � frL/,� L,eilatillgtr c. A T :. a...i(.YN• II.+-�' (C �+Y� V _ Ili_ -. - IIN Ft I 3 . - 1 t Johnstown Farms is w_ ' l s.-. r� a - - -.... , :-...,.. -C.I.r:' +..—' N A t ra yw . ; faIraiaWay 1 ?.. tern ad X414 1 - .-. a4: -N 1 ♦. .mil �.. - _f ) .. . Ina lassavet it e • ! _ cAfi Z .IR frail titJ3. 1 - ,' 'l ?,t P + Z F79A �YNOMPAgg: . ; 'mil f1 W,}�� Vay. .�} =ft" i� Zr., .. f� a 1 74- ♦ - A. - t i Y 'J,,Ir 1i t- d . _ W1r _G i VI I�..4 i Er Fa NNW MIME filT [C _ , llIEK ,. r.'J[.' M..l i ~Of'. Ya 4, OTIMMIMINe - 1 j T�. S1// f 9 •f Land Sale 3 Location: Johnstown Farm, Johnstown Date of Sale: 2/2010 Selling Price: $252,000 Number of Lots 18 Reception Number 3678613 Price Per Unit: $14,000 Proposed Use: Detached Residences Typical Lot Sizes: 6,602 Square Foot Average Entitlements: Full Parcel Number: Multiple Property Condition 18 Platted and finished single family lots without water taps. Grantor: Mile High Banks Grantee: Mejias Investment ,Inc. Financing Terms: Acquisition Loan Mile High Banks Confirmation Source: Listing Agent, MLS, County Records Comparable land sale 3 is a smaller inventory of eighteen, bank owned lots in Johnstown, Colorado. This is a more similar inventory than the previous two land sales. Raw water fees are collected with tap and inspection fees at the time of building permit issuance for the detached residence in Johnstown. This is an inferior aspect of the comparable and an upward adjustment should be made to the unit price. The comparable was confirmed with the listing agent and the comparable lots were financed by the bank that sold the lots. While financing was at market rates, it is not typical for a bank owned inventory of lots to be financed by the selling entity and a downward conditions of sale is justified to the $ 14,000 per lot price of the comparable. Johnstown is a similar suburban community as Firestone, but further from shopping districts and an inferior location. The lots are of a similar size as the subject lots, but considering the larger inventory and inferior location, the $ 14,000 per lot price is below market for the bulk sale of the subject lots. 39 6 LOTS BOOTH FARM COLORADO CERTIFIED APPRAISALS, LLC SALES COMPARISON APPROACH IhS1..;:4)N ' 4 • .•jr_ .../ .teN . ,.• • I 4.44 ar:n....: -. , 4.... Timnath Ranch itrAio-. "Itoa it s‘toilw re". „lox sk , ...> 1- -1r4(‘111117 ff � _ - -T l � s • � _jN. Land Sale 4 Location: Timnath Ranch, Timnath Date of Sale: 1/2010 • Selling Price: $900,000 Number of Units: 180 Reception Number 4484 Price Per Lot: $5,000 Proposed Use: Detached Housing Typical Lot Size: 11,500 Square Feet Entitlements: Full Parcel Number: Multiple Property Condition Final Platted lots without infrastructure in "raw" land condition Grantor: Timnath Ranch, LLC Grantee: T R Investment Holdings LLC Financing Terms: Cash Confirmation Source: Seller, Listing Broker, County Records Comparable land sale 4 is the January 2010 sale of 180 platted lots in the Timnath Ranch subdivision located approximately 11 miles south of the subject. Typically, an inventory of 180 lots. The comparable lots have received final plat approval from the town of Timnath and range in size from approximately 9,000 to 18,000 square feet and are typically 11 ,000 to 12,000 square feet. No infrastructure had been installed which is inferior to the subject inventory. The seller transferred the lots at a price of $5,000 for each lot and reportedly entered into a buyback agreement with the buyer. The details of the buyback were not disclosed. The comparable is part of the Loveland/Fort Collins Water District that collects the raw water fee at the time that a permit is issued for home, similar to Wellington. The seller had a large inventory of developmental land in the area and was motivated to liquidate the property. Considering that these are unfinished lots of a substantially larger inventory than the subject, the $5,000 per lot price is below a market unit value for the subject lots. 40 6 LOTS Boom FARM COLORADO CERTIFIED APPRAISALS,LLC SALES COMPARISON APPROACH Bulk Sales Summary The overall analysis of the comparable sales indicate that comparable #2 is superior and comparables #3 and #4 are inferior that supports a per unit value range of $14,000 to $35,000 per lot. Comparable #3 is given strong consideration in the final analysis because it has a similar location as the subject lots. Comparable #1 is a relatively recent sale, but is a substantially larger inventory of lots. However, this is an entire subdivision that would allow a developer to implement a unique design, but the design of the subject has been set. With strong consideration to comparables #1 and#3, a unit value range of$15,000 to $20,000 is estimated for the market value of the subject inventory in a bulk sale scenario. Unit Value Range x # of Lots ="As Is" Subject Inventory Value Range $15,000 to$20,000 x 6 Lots = $90,000 to$120,000 41 6 LOTS BOOTH FARM COLORADO CERTIFIED APPRAISALS,LLC RECONCILIATION RECONCILIATION Sales Comparison Cash Flow Bulk Sales Individual Lot Values $20,000 to$22,000 - - AggregateRetail Value $130,000 - - Bulk Sale - $100,000 $90,000 to$120,000 The individual lot values was estimated by comparison to sales and listings in ten subdivisions in Northern Colorado. Placing most emphasis on lot sales in the immediate area with consideration to listings, five of the subject lots had an estimated market value of$22,000 with a 10% discount to the sloping corner lot that has an estimated $20,000 value. This equated to an aggregate retail value of$130,000. The estimated taxes, HOA fees, and sales costs were deducted from the gross revenue to determine net revenue from a cash flow analysis. A discount rate inclusive of profit was applied to the net income to estimate a $100,000 market value of a bulk sale scenario to a single purchaser. There were no highly comparable bulk sales to compare with the subject inventory, but there were four larger bulk sales in Northern Colorado that support a $90,000 to $120,000 market value in a bulk sale scenario to a single buyer of the subject inventory. The cash flow analysis is considered a more accurate manner of analyzing the subject because the bulk sales are not highly comparable. Final Estimates of Value In my opinion, the "as is" retail value of the fee simple interest in each of the six lots as of July 20, 2010 was: Lot 43,Block 4—10437 Cherryvale Street $22,000 Lot 44,Block 4—10435 Cherryvale Street $22,000 Lot 9,Block 6-5785 Shenandoah Avenue $20,000 Lot 7,Block 7—10414 Cherryvale Street $22,000 Lot 8,Block 7—10392 Cherryvale Street $22,000 Lot 9,Block 7—10380 Cherryvale Street $22,000 In my opinion, the aggregate retail value of the fee simple interest in the subject lot inventory as of July 20, 2010,was: ONE HUNRED THIRTY THOUSAND DOLLARS SIAM 42 6 LOTS Boom FARM COLORADO CERTIFIED APPRAISALS,LLC RECONCILIATION In my opinion, "as is" fee simple market value of the subject lot inventory in a bulk sale scenario, as of July 20, 2010, was: ONE HUNDRED THOUSAND DOLLARS $100.000 43 6 this Boom FARM COLORADO CERTIFIED APPRAISALS,LLC DISPOSITION VALUE DISPOSITION VALUE ANALYSIS One manner of estimating a disposition value is to determine an appropriate discount that applied to the market value would entice a buyer in 90 days or less. The residential land market has suffered from stalled sales activity in Weld County for the past two or three years. No highly similar liquidated residential lots were discovered to determine an appropriate discount to apply to the fee simple market value. Discounts for improved commercial properties have been between 20% and 50%to effectuate as quick of a sale as possible along the Front Range. It was projected that the reasonable exposure time for the subject lots was 12 months. A potential speculative investor may discount the "as is" value by the difference in the 90 day limited marketing time requested by the client in the disposition value and the reasonable exposure period of 12 months. This is a 9 month period. Using the same 22% discount rate utilized in the Cash Flow analysis, a discount factor of 0.84916 is derived for a 12 month period or an approximate discount of 15%. To consummate a 90 day sale, another 20% profit contingency or a 35% overall discount would be required. This is within the discount range for improved commercial properties along the Front Range and is considered an applicable discount to liquidate the subject property in 90 days or less. As Is Discount Disposition Value 35.00% Value $100,000 - $35,000 = $65,000 "As Is"Fee Simple Disposition Value of Subject Property $65.000 (rounded) 44 6 LoTs Boom FARM COLORADO CERTIFIED APPRAISALS,LLC CONTINGENT AND LIMITING CONDITIONS CONTINGENT AND LIMITING CONDITIONS (Summary Appraisal Report) The appraisal report has been made with the following contingent and limiting conditions: 1. This is a real property appraisal in Summary Report Format which is intended to comply with the reporting requirements set forth under Standard Rule 2-2(b) of the Uniform Standards of Professional Practice for a Summary Appraisal Report. As such, it might not include full discussions of the data, reasoning, and analyses that were used in the appraisal process to develop the appraiser's opinion of value. Supporting documentation concerning the data, reasoning, and analyses is retained in the appraiser's files. The information contained in this report is specific to the needs of the client and for the intended use stated in this report. The appraiser is not responsible for unauthorized use of this report. 2. No responsibility is assumed for legal or title considerations. Title to the property is assumed to be good and marketable unless otherwise stated in this report. 3. The property is appraised free and clear of any or all liens and encumbrances unless otherwise stated in this report. 4. Responsible ownership and competent property management are assumed unless otherwise stated in this report. 5. The information furnished by others is believed to be reliable. However,no warranty is given for its accuracy. 6. All engineering is assumed to be correct. Any plot plans and illustrative material in this report are included only to assist the reader in visualizing the property. 7. It is assumed that there are no hidden or unapparent conditions of the property,subsoil,or structures that render it more or less valuable. No responsibility is assumed for such conditions or for arranging for engineering studies that may be required to discover them. 8. It is assumed that there is full compliance with all applicable federal, state, and local environmental regulations and laws unless otherwise stated in this report. 9. It is assumed that all applicable zoning and use regulations and restrictions have been complied with, unless a nonconformity has been stated, defined, and considered in this appraisal. 10. It is assumed that all required licenses, certificates of occupancy 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 contained in this report are based. I I. Any sketch in this report may show approximate dimensions and is included to assist the reader in visualizing the property. Maps and exhibits found in this report are provided for reader reference purposes only. No guarantee as to accuracy is expressed or implied unless otherwise stated in this report. No survey has been made for the purpose of this report. 12. It is assumed that the utilization of the land and improvements is within the boundaries or property lines of the property described and that there is not encroachment or trespass unless otherwise stated in this report 45 6I oTs BOOTH FARM COLORADO CERTIFIED APPRAISALS,LLC CONTINGENT AND LIMITING CONDMONS CONTINGENT AND LIMITING CONDITIONS—CONTINUED 13. The appraiser is not qualified to detect hazardous waste and/or toxic materials. Any comment by the appraiser that might suggest the possibility of the presence of such substances should not be taken as confirmation of the presence of hazardous waste and/or toxic materials. Such determination would require investigation by a qualified expert in the field of environmental assessment. The presence of substances such as asbestos, urea-formaldehyde foam insulation, radon gas, lead based paint, or other potentially hazardous materials may affect the value of the property. The appraiser's value estimate is predicated on the assumption that there is no such material on or in the property that would cause a loss in value unless otherwise stated in this report. No responsibility is assumed for any environmental conditions,or for any expertise or engineering knowledge required to discover them. The appraiser's descriptions and resulting comments are the result of the routine observations made during the appraisal process. 14. The appraiser herein by reason of this appraisal is not required to give further consultation, testimony, or be in attendance in court with reference to the property in question unless arrangements have been previously made. 15. Any proposed improvements are assumed to be completed in a good workmanlike manner in accordance with the plans and specifications submitted. 16. The distribution, if any, of the total valuation in this report between land and improvements applies only under the stated program of utilization. The separate allocations for land and buildings must not be used in conjunction with any other appraisal and are invalid if so used. 17. The appraiser assumes that the reader or user of this report has been provided with copies of available building plans and all leases and amendments, if any, that pertain to the subject property. 18. Possession of this report,or a copy thereof,does not carry with it the right of publication. It may not be used for any purpose by any person other than the party to whom it is addressed without the written consent of the appraiser,and in any event,only with proper written qualification and only in its entirety. 19. Neither all nor any part of the contents of this report (especially any conclusions as to value, the identity of the appraiser, or the firm with which the appraiser is connected) shall be disseminated to the public through advertising, public relations, news sales, or other media without prior written consent and approval of the appraiser. 20. The Americans With Disabilities Act (ADA) became effective January 26, 1992. We have not made a specific ADA compliance survey. Non-compliance could have a negative effect on the value of the subject property. Since we have no direct evidence relating to this issue, we did not consider requirements of the ADA in estimating the value of the property. 21. This appraisal has been prepared by appraisers with extensive experience in the local market. There were no additional steps required to competently complete the attached appraisal report. 22. Photographs,maps,and exhibits contained in this report may be digital representations or enhancements and may not depict images to scale. 46 6 LOTS Boom FARM COLORADO CERTIFIED APPRAISALS,LLC CONTINGENT AND LIMITING CONDITIONS CONTINGENT AND LIMITING CONDITIONS—CONTINUED 23. Liability of the Appraiser is limited to the elected fee for preparation of the appraisal. Colorado Certified Appraisals, LLC, as well as any employee, agent or officer thereof, shall be completely indemnified against any and all losses, claims, damages liabilities, costs or expenses to which the recipient and/or third party user may become subject. There is no accountability or liability to any third party. 24. Any discounted present value estimations may be calculated using Microsoft Excel internal functions and may slightly differ from similar calculations using an HP financial calculator. The difference is negligible and is offset by rounding. 47 6 this BOOTH FARM COLORADO CERTIFIED APPRAISALS,LLC CERTIFICATION CERTIFICATION The following Certification statements are in addition to and may supersede any other Appraiser's Certification included or attached to this appraisal report. This Appraiser's Certification is compliant with the 2010 Uniform Standards of Professional Appraisal Practice. I certify that,to the best of our knowledge and belief: The statements of fact contained in this report are true and correct. The reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions, and is my personal, impartial, and unbiased professional analyses, opinions, and conclusions. I have no present or prospective interest in the property that is the subject of this report, and no personal interest with respect to the parties involved. I have not provided any past valuation analysis, consultation, or professional service of or relating to the subject sites. I have no bias with respect to the property that is the subject of this report or to the parties involved with this assignment. My engagement in this assignment was not contingent upon developing or reporting predetermined results. My compensation for completing this assignment is not contingent upon the development or reporting of a predetermined value or direction in value that favors the cause of the client, the amount of the value opinion, the attainment of a stipulated result, or the occurrence of a subsequent event directly related to the intended use of this appraisal. My analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with Uniform Standards of Professional Appraisal Practice. Craig Castleberry made a personal inspection of the property that is the subject of this report. No one provided significant real property appraisal assistance to the appraisers' signing this report. PURPOSE,INTENDED USE, AND INTENDED USER OF THE APPRAISAL: The purpose of the appraisal is to estimate the market value of the subject property, as defined in this report, on behalf of the referenced client as the intended user of this report. The intended use of the appraisal is to assist the client, as the intended user of this report, 48 6 LOTS BOOTH FARM COLORADO CERTIFIED APPRAISALS,LLC CERTIFICATION in evaluating the subject property for lending purposes. The use of this appraisal by anyone other than the stated intended user, or for any other use than the stated intended use, is prohibited. ANALYSIS AND REPORT FORM: This is a real property appraisal written in a Summary Report format. As such, data and analysis has been presented in a summary report format with more complete information retained in my files. The appraisal is based on the information gathered by the appraiser from public records, other identified sources, inspection of the subject property and neighborhood, and selection of comparable sales and listings within the subject and comparable market areas. When conflicting information was provided, the source deemed most reliable has been used. j ff Craig Castleberry CO Certified General Appraiser #CG1323026 Exp. 12/31/2010 49 6 LOTS BOOTH FARM COLORADO CERTIFIED APPRAISALS,LLC QUALIFICATIONS APPRAISER QUALIFICATIONS CRAIG D. CASTLEBERRY COLORADO CERTIFIED GENERAL APPRAISER#CG01323026 Owner Colorado Certified Appraisals,LLC 615 Bross Street Longmont,Colorado 80501 Voice-(303)995-6017 Fax—(303)774 - 8603 Generalized Summary and Location of Assignments Subdivisions Retail Office Industrial Garfield County Grand County Grand County Boulder County Boulder County Boulder County Boulder County Weld County Weld County Weld County Weld County Latimer County Adams County Adams County Adams County Arapahoe County Larimer County Larimer County Larimer County Larimer County Summit County Summit County Garfield County Garfield County Garfield County Garfield County Laramie,Wyo Rock Springs,Wyo Laramie,Wyo Ventura,CA Montana Oregon Since 1991,Mr.Castleben-y has completed real property appraisal reports of various income and owner occupied commercial properties. His experience has been as a fee appraiser completing commercial/residential real estate appraisal reports in a narrative format in conformance to USPAP and accepted techniques of the Appraisal Institute. He is an associate member of the Appraisal Institute pursuing his MAI. Licenses: Colorado Certified General Appraiser#CG01323026 50 6 LOTS BOOTH FARM COLORADO CERTIFIED APPRAISALS,LLC QUALIFICATIONS Related Coursework: Principles of Real Estate Appraisal Methods Income Capitalization NCRE 200-Principles of Real Estate Appraisal NCRE 208-Uniform Standards of Professional Appraisal Practice(USPAP) (USPAP Updates as promulgated for Continuing Education) NCRE 210-Residential Real Estate Appraisal Techniques NCRE 215-Development of a Real Estate Appraisal NCRE 222-Income Capitalization Techniques NCRE 225-Narrative Appraisal Review Colorado Real Estate Contracts and Law Environmental Issues in Commercial Real Estate Commercial Real Estate Financing Real Estate Law Real Estate Financing Real Estate Development Subdivision Valuation—Appraisal Institute Advanced Income Capitalization—Appraisal Institute Appraisal Clients: (A partial listing) Mile High Banks Boulder County Business Bank Compass Bank Boulder County Transportation Boulder County National Acceptance Company Farm Credit NCWCD Boulder Valley Public Schools Boulder West City of Longmont University of Colorado Colorado Department of Transportation Vectra Bank Colorado National Bank FirsTier Bank Guaranty Bank Crowder Mortgage Bank of The West M&T Banks Bank of Choice SI 6 LOTS BOOTH FARM COLORADO CERTIFIED APPRAISALS,LLC QUALIFICATIONS STATE OF COLORADO Department of Regulatory Agencies filvisron of Real Estate e't r.,. AG ra.t.e' 1 Lin 1 ?UOR Du +1 :-.10 i MIMEN Issue t7de ,n•�,i 1 A ch: it I ICI':'^;S I I P1YRY 1 Ilt l'r 52 CLERK TO THE BOARD PHONE (970) 336-7215 EXT 4226 FAX: (970) 352-0242 WEBSITE: www.co.weld.co.us ' 915 10TH STREET P.O. BOX 758 C. GREELEY, COLORADO 80632 COLORADO July 25, 2011 B & L LEASING LLC 5833 SHENANDOAH AVE FIRESTONE, CO 80504 Parcel No. and Account No.: VARIOUS - SEE ATTACHED LIST Dear Petitioner(s): The Weld County Board of Equalization has set a date of July 28, 2011, at or about the hour of 9:30 AM, to hold a hearing on your valuation for assessment. This hearing will be held at the Weld County Centennial Center, First Floor Hearing Room, 915 10th Street, Greeley, Colorado. You have a right to attend this hearing and present evidence in support of your petition. The Weld County Assessor or his designee will be present. The Board will make its decision on the basis of the record made at the aforementioned hearing, as well as your petition, so it would be in your interest to have a representative present. If you plan to be represented by an agent or an attorney at your hearing, prior to the hearing you shall provide, in writing to the Clerk to the Board's Office, an authorization for the agent or attorney to represent you. If you do not choose to attend this hearing, a decision will still be made by the Board by the close of business on August 5, 2011, and mailed to you on or before August 12, 2011. Because of the volume of cases before the Board of Equalization, most cases shall be limited to 10 minutes. Also due to volume, cases cannot be rescheduled. It is imperative that you provide evidence to support your position. This may include evidence that similar homes in your area are valued less than yours or you are being assessed on improvements you do not have. Please note: The fact that your valuation has increased cannot be your sole basis of appeal. Without documented evidence as indicated above, the Board will have no choice but to deny your appeal. If you wish to obtain the data supporting the Assessor's valuation of your property, please submit a written request directly to the Assessor's Office by fax (970) 304-6433, or if you have questions, call (970) 353-3845. Upon receipt of your written request, the Assessor will notify you of the estimated cost of providing such information. Payment must be made prior to the Assessor providing such information, at which time the Assessor will make the data available within three (3) working days, subject to any confidentiality requirements. -7/15 <1.2CA€ kV Lihdn. 2011-1823 AS0079 B & L LEASING LLC -VARIOUS ACCOUNTS Page 2 Please advise me if you decide not to keep your appointment as scheduled. If you need any additional information, please call me at your convenience. Very truly yours, BOARD OF EQUALIZATION • O. j e4 Esther E. Gesick Deputy Clerk to the Board cc: Christopher Woodruff, Assessor COLORADO CERTIFIED APPRAISALS LLC 615 BROSS ST LONGMONT, CO 80501 2011-1823 AS0079 PARCEL#: 131312404043 ACCOUNT#: R1222502 PARCEL#: 131312404044 ACCOUNT#: R1222602 PARCEL#: 131312406009 ACCOUNT#: R1224102 PARCEL#: 1 31 31 2407007 ACCOUNT#: R1224802 PARCEL#: 131312407008 ACCOUNT#: R1224902 PARCEL#: 131312407009 ACCOUNT#: R1225002 Hello