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Home My WebLink About20193088.tiffAugust 6, 2019 Petitioner: DUGGAN HOLDINGS LLC 6564 JERRY BASS LN PUEBLO, CO 81005-9617 CLERK TO THE BOARD PHONE (970) 400-4226 FAX (970) 336-7233 WEBS ITE: www.weldgov.com 1150 O STREET P.O. BOX 758 GREELEY CO 80632 Agent (if applicable): RE: THE BOARD OF EQUALIZATION 2019, WELD COUNTY, COLORADO NOTICE OF DECISION Docket 2019-3088 Appeal 2008224773 Hearing 8/5/2019 Dear Petitioner: On the day indicated above, the Board of County Commissioners of Weld County Colorado convened and acting as the Board of Equalization, pursuant to C.R.S. §39-8-101 et seq., considered petition for appeal of the Weld County Assessor's valuation of your property described above, for the year 2019. Account # Decision The Assessment and valuation is set as follows: Actual Value as Actual Value as Set by Determined by Assessor Board R0016088 Stipulated - Approved Stipulated Value $1,656,201 $1,514,186 A denial of a petition, in whole or in part, by the Board of Equalization must be appealed within thirty (30) days of the date the denial is mailed to you. You must select only one of the following three (3) options for appeal: 1. Appeal to Board of Assessment Appeals: You have the right to appeal the County Board of Equalization's decision to the Colorado Board of Assessment Appeals. A hearing before that Board will be the last time you may present testimony or exhibits or other evidence, or call witnesses in support of your valuation. If the decision of the Board of Assessment Appeals is further appealed to the Court of Appeals pursuant to C.R.S. §39-8-108(2), only the record of proceedings from your hearing before the Board of Assessment Appeals and your legal brief are filed with the appellate court. All appeals to the Board of Assessment Appeals filed after August 10, 2019, MUST comply with the following provisions of C.R.S. §39-8-107(5): (5)(a)(I) On and after August 10, 2019, in addition to any other requirements under law, any petitioner appealing either a valuation of rent -producing commercial real property to the Board of Assessment Appeals pursuant to C.R.S. §39-8-108(1) or a denial of an abatement of taxes pursuant to C.R.S. §39-10-114 shall provide to the County Board of Equalization or to the Board of County Commissioners of the County in the case of an abatement, and not to the Board of Assessment Appeals, the following information, if applicable: (A) Actual annual rental income for two full years including the base year for the relevant property tax year; (B) Tenant reimbursements for two full years including the base year for the relevant property tax year; (C) Itemized expenses for two full years including the base year for the relevant property tax year; and (D) Rent roll data, including the name of any tenants, the address, unit, or suite number of the subject property, lease start and end dates, option terms, base rent, square footage leased, and vacant space for two full years including the base year for the relevant property tax year. (II) The petitioner shall provide the information required by subparagraph (I) of this paragraph (a) within ninety days after the appeal has been filed with the Board of Assessment Appeals. (b)(I) The Assessor, the County Board of Equalization, or the Board of County Commissioners of the County, as applicable, shall, upon request made by the petitioner, provide to a petitioner who has filed an appeal with the Board of Assessment Appeals not more than ninety days after receipt of the petitioner's request, the following information: (A) All of the underlying data used by the county in calculating the value of the subject property that is being appealed, including the capitalization rate for such property; and (B) The names of any commercially available and copyrighted publications used in calculating the value of the subject property. (II) The party providing the information to the petitioner pursuant to subparagraph (I) of this paragraph (b) shall redact all confidential information contained therein. (c) If a petitioner fails to provide the information required by subparagraph (I) of paragraph (a) of this subsection (5) by the deadline specified in subparagraph (II) of said paragraph (a), the County may move the Board of Assessment Appeals to compel disclosure and to issue appropriate sanctions for noncompliance with such order. The motion may be made directly by the County Attorney and shall be accompanied by a certification that the County Assessor or the County Board of Equalization has in good faith conferred or attempted to confer with such petitioner in an effort to obtain the information without action by the Board of Assessment Appeals. If an order compelling disclosure is issued under this paragraph (c) and the petitioner fails to comply with such order, the Board of Assessment Appeals may make such orders in regard to the noncompliance as are just and reasonable under the circumstances, including an order dismissing the action or the entry of a judgment by default against the petitioner. Interest due the taxpayer shall cease to accrue as of the date the order compelling disclosure is issued, and the accrual of interest shall resume as of the date the contested information has been provided by the taxpayer. Appeals to the Board of Assessment Appeals must be made on forms furnished by that Board, and must be mailed or delivered within thirty (30) days of the date the denial by the Board of Equalization is mailed to you. The address and telephone number of the Board of Assessment Appeals are: Board of Assessment Appeals 1313 Sherman Street, Room 315 Denver, Colorado 80203 Telephone Number: (303) 864-7710 Email: baa@state.co.us Fees for Appeal to the Board of Assessment Appeals: A taxpayer representing himself is not charged for the first two (2) appeals to the Board of Assessment Appeals. A taxpayer represented by an attorney or agent must pay a fee of $101.25 per appeal. OR 2. Appeal to District Court: You have the right to appeal the decision of the Board of Equalization to the District Court of the county wherein your property is located: in this case that is Weld County District Court. A hearing before The District Court will be the last time you may present testimony or exhibits or other evidence, or call witnesses in support of your valuation. If the decision of the District Court is further appealed to the Court of Appeals pursuant to C.R.S. §39-8-108(1), the rules of Colorado appellate review and C.R.S. §24-4-106(9), govern the process. OR 3. Binding Arbitration: You have the right to submit your case to binding arbitration. If you choose this option, the arbitrator's decision is final and you have no further right to appeal your current valuation. C.R.S. §39-8-108.5 governs this process. The arbitration process involves the following: a. Select an Arbitrator: You must notify the Board of Equalization that you will pursue arbitration. You and the Board of Equalization will select an arbitrator from the official list of qualified people. If you cannot agree on an arbitrator, the District Court of the county in which the property is located (i.e. Weld) will select the arbitrator. b. Arbitration Hearing Procedure: Arbitration hearings are held within sixty (60) days from the date the arbitrator is selected, and are set by the arbitrator. Both you and the Board of Equalization are entitled to participate in the hearing. The hearing is informal. The arbitrator has the authority to issue subpoenas for witnesses, books, records documents and other evidence pertaining to the value of the property. The arbitrator also has the authority to administer oaths, and determine all questions of law and fact presented to him. The arbitration hearing may be confidential and closed to the public if you and the Board of Equalization agree. The arbitrator's decision must be delivered personally or by registered mail within ten (10) days of the arbitration hearing. c. Fees and Expenses: The arbitrator's fees and expenses are agreed upon by you and the Board of Equalization. In the case of residential real property, the fess may not exceed $150.00 per case. For cases other than residential real property, the arbitrator's total fees and expenses are agreed to by you and Board of Equalization, but are paid by the parties as ordered by the arbitrator. If you have questions concerning the above information, please call me at (970) 400-4226. Very truly yours, BOARD OF EQUALIZATION CLe(G'C. Esther E. Gesick Clerk to the Board Weld County Board of Commissioners and Board of Equalization cc: Brenda Dones, Weld County Assessor COUNTY BOARD OF EQUALIZATION WELD COUNTY Single County Schedule Number R0016088 STIPULATION (As To Tax Year 2019 Actual Value) RE PETITION OF : NAME: ADDRESS: DUGGAN HOLDINGS LLC 6564 Jerry Bass Lane Pueblo, CO 81005 Petitioner (s) and the Weld County Assessor hereby enter into this Stipulation regarding the tax year 2019 valuation of the subject property, and jointly move the Board of Equalization to enter its order based on this Stipulation. Petitioner (s) and Assessor agree and stipulate as follows: 1. The property subject to this Stipulation is described as: GR 12098 PT N2SE4 4 5 65 (OGILVY 2ND ANNEX) COM AT NW COR SE4 (CEN OF SEC) S01 D32'W 1075.04' TO PT ON S R/W LN OF COLO STATE HWY 263 S87D12'E 182.33' S85D54'E 550' S80D41'E 345' S78D45'E 336.85' 2. The subject property is classified as commercial property. 3. The County Assessor originally assigned the following actual value to the subject property for the tax year 2019 : Total $1,656,201 4. After further review and negotiation, Petitioner (s) and Weld County Assessor agree to the following tax year 2019 actual value for the subject property: Total $1,514,186 5. The valuation, as established above, shall be binding only with respect to tax year2019 6. Brief narrative as to why the reduction was made: After a review of the approaches to value, an adjustment was indicated. 7. Both parties agree that: EZThe hearing scheduled before the Board of Equalization on 8/1/2019 at 9:00 am be vacated. nA hearing has not yet been scheduled before the Board of Equalization. 1 aO(9-30 8 A30 ( 03 DATED this 31 day of July , 2019 , l Gerald s(Jul 31, 20191 Petitioner(s) or Agent or Attorney (Assistant) County Attorney for Respondent, Weld County Board of Commissioners Address: 6564 JERRY BASS LANE PUEBLO Telephone: 7192505364 Docket Number R0016088 Stip-1.Frm Address: 1150 "O" Street P.O. Box 758 Greeley, CO 80632 Telephone:(970) 336-7235 County Assessor Address: 1400 N.17th Avenue Greeley, CO 80631 Telephone: (970) 400-3650 2 R0016088/DUGGAN HOLDINGS LLC Final Audit Report 2019-07-31 Created: 2019-07-31 By: Courtney Maya (canaya@co.weld.co.us) Status: Signed Transaction ID: CBJCHBCAABAAwrB4E9_UmDFNpUU2EREFSihbx-W3JXvI "R0016088/DUGGAN HOLDINGS LLC" History in Document created by Courtney Anaya (canaya@co.weld.co.us) 2019-07-31 - 2:45:55 PM GMT- IP address: 204.133.39.9 E?, Document emailed to Courtney Anaya (canaya@co.weld.co.us) for approval 2019-07-31 - 2:45:57 PM GMT £ Document approved by Courtney Anaya (canaya@co.weld.co.us) Approval Date: 2019-07-31 - 2:46:07 PM GMT - Time Source: server- IP address: 204.133.39.9 E? Document emailed to Susan Gundry (sgundry@weldgov.com) for approval 2019-07-31 - 2:46:08 PM GMT t Email viewed by Susan Gundry (sgundry@weldgov.com) 2019-07-31 - 2:47:10 PM GMT- IP address: 204.133.39.9 be Document approved by Susan Gundry (sgundry@weldgov.com) Approval Date: 2019-07-31 - 2:55:15 PM GMT - Time Source: server- IP address: 204.133.39.9 C'-. Document emailed to Brenda Dones (bdones@co.weld.co.us) for signature 2019-07-31 - 2:55:17 PM GMT ,n Email viewed by Brenda Dones (bdones@co.weld.co.us) 2019-07-31 - 2:55:31 PM GMT- IP address: 204.133.39.9 A, Document e -signed by Brenda Dones (bdones@co.weld.co.us) Signature Date: 2019-07-31 - 2:55:42 PM GMT - Time Source: server- IP address: 204.133.39.9 Cl Document emailed to Gerald Davis (jdavis123697@gmail.com) for signature 2019-07-31 - 2:55:44 PM GMT In Email viewed by Gerald Davis (jdavis123697@gmail.com) 2019-07-31 - 3:35:30 PM GMT- IP address: 66.102.7.43 Adobe Sign GS® Document e -signed by Gerald Davis (jdavis123697@gmail.com) Signature Date: 2019-07-31 - 3:37:40 PM GMT - Time Source: server- IP address: 174.209.24.92 E7+ Document emailed to Karin McDougal (weld-cboe@weldgov.com) for signature 2019-07-31 - 3:37:41 PM GMT t Email viewed by Karin McDougal (weld-cboe@weldgov.com) 2019-07-31 - 3:48:05 PM GMT- IP address: 204.133.39.9 4 Document e -signed by Karin McDougal (weld-cboe@weldgov.com) Signature Date: 2019-07-31 - 3:49:46 PM GMT - Time Source: server- IP address: 204.133.39.9 Q Signed document emailed to Gerald Davis (jdavis123697@gmail.com), Karin McDougal (weld- cboe@weldgov.com), Courtney Anaya (canaya@co.weld.co.us), canaya@weldgov.com, and 2 more 2019-07-31 - 3:49:46 PM GMT Adobe Sign Thank you for submitting an appeal to the Weld County Board of Equalization We will review the mformation submitted and you will receive a date to appear before the board Contact Information: Contact Name Gerald Davis Contact Email jdavis123697@gmail corn Contact Phone 719-250-5364 Appeal Submitted 09 47 AM July 15, 2019 Appeal submitted for: R0016088 - DUGGAN HOLDINGS LLC 1128 E 8TH ST, GREELEY Legal GR 12098 PT N2SE4 4 5 65 (OGILVY 2ND ANNEX) COM AT NW COR SE4 (CEN OF SEC) S01D32 W 1075 04 TO PT ON S R/W LN OF COLO STATE HWY 263 S87D12 E 182 33 S85D54 E 550 S80D41 E 345 S78D45 E 336 85 TO TRUE POB S78D45 E 574 37 S0D28 W 509 18 N89D31 W 567 34 NOD45 E 616 48 TO POB Reason Value Too High - The property was appraised on 3/1/16 for $1,171,000 No improvements have been made to the residential property and improvements of approximately $120,000 have been made to the commercial property as of 6/30/18 The current residential and commercial valuations represent increases of 22 6% and 147 9% from the prior valuation, respectively Further, the overall valuation of the property represents a 74 3% increase from the appraisal dated 3/1/16 We believe that the increase does not reflect realizable appreciation since 3/1/16 The 2017/2018 rent for the, entire property was $129,600 annually Utilizing a 10% cap rate, which we believe is average in this market, we calculate a valuation of $1,296,000 for the entire property Estimate of Value $1,296,000 00 Document(s) Submitted: Account R0016088 - 1128 E 8th Street Appraisal pdf Account R0016088 - R0016088_INITIAL PROTEST pdf Account R0016088 - 2019 Appraisal Service Agreement for Weld County Assessor Protest pdf You have selected the following Date Preferences Monday, August 5, 2019, from 10 30 a m to 12 00 p m Thursday, August 1, 2019, from 1 30 p m to 3 30 p m Thursday, August 1, 2019, from 9 00 a m to 12 00 p m The Appeal process can take several weeks for us to complete You will receive a written decision on your appeal within five (5) working days of your hearing We thank you for your submittal Weld County Board of Equalization 019-3088 O105 } Thank you for submitting an appeal to the Weld County Assessor's Office. We will review the information submitted and if we have questions we will contact you at one of the following: Contact Information: Contact Name: Gerald Davis Contact Email: j davis 123 97@gmail.com Contact Phone: 719-250-5364 Appeal Submitted: 12:39 PM May 20, 2019 Appeal submitted for: R0016088 - DUGGAN HOLDINGS LLC 1128 E 8TH ST, GREELEY Legal: GIB 12098 PT N2 E4 4 5 65 (OGTLVY 2ND ANNEX) COM AT Nov COR SE4 (CEN OF SEC) 501D32 W 1075.04 TO PT ON S R/W LN OF COLO STATE HWY 263 587D12 E 182.33 85D54 E 550 580D41 E 345 S78D45 E 336.85 TO TRUE POB S78D45 E 574.37 S0D28 509.18 N89D31 W 567.34 NOD45 E 616.48 TO POB Reason: Value Too High - The property was appraised on 3/1/16 for S1,171,000. No improvements have been made to the residential property and improvements of approximately $120,000 have been made to the commercial property as of 6/30/18. The current residential and commercial valuations represent increases of 22.6% and 147.9% from the prior valuation, respectively. Further, the overall valuation of the property represents a 74.3% increase from the appraisal dated 3/1/16. We believe that the increase does not reflect realizable appreciation since 3/1/16. The 2017/2018 rent for the entire property was $129,600 annually. Utilizing a 10% cap rate, which we believe is average in this market, we calculate a valuation of $1,296,000 for the entire property. Estimate of Value: $1,296,000.00 Documents) Submitted: Account: All Accounts - 212 N. 6th St. Appraisal 2-23-16.pdf Account 80016088 - 1 128 E 8th Street Appraisal.pdf The Appeal process can take several weeks for us to complete. We will mail a decision on your appeal by June 30th for real property and by July 10th for business personal property and/or oil and gas We thank you for your submittal. Weld County Assessor's Office (970) 400-3650 Appraisal Services Agreement WE. Lundquist LLB ("Appraiser") is pleased to present this agreement for appraisal services to Mr. Gerald Davis ("Client"). Please sign and return a copy to accept these terms and conditions for the engagement. We look forward to being of service to you. Client and Appraiser agree to the terms of engagement set forth below. This Appraisal Services Agreement and the Terms and Conditions ("Terms and Conditions"), which is attached hereto, shall be collectively referred to as the "Agreement's. The parties agree that specific information about the property to be valued shall be agreed to by the parties in separate written Engagement Letter(s). Such Engagement Letter(s) are expressly incorporated herein by reference and are made part(s) of this Agreement. When capitalized below, the term "Personnel" refers to any and all employees, partners, owners, shareholders, members, officers, directors or independent contractors of the respective party. e1. Property Documentation. Client agrees to provide Appraiser with the documentation required and requested by the Appraiser to complete the appraisal. Delays in Appraiser's receipt of requested documentation may result in Appraiser being unable to deliver the appraisal report on the agreed -upon delivery date. 2. Appraisal Statements and Conditions. The appraisal performed under this Agreement will be subject to all statements, assumptions, limiting conditions and other conditions (collectively, "Appraisal Conditions") set forth in the appraisal report. Client. agrees that Client will review the Appraisal Conditions upon receipt of the report and that Client's use of the appraisal will constitute acceptance of the Appraisal Conditions. The Appraisal Conditions shall be considered as being incorporated into anc forming part of this NOTICE: Nothing herein shall be construed as legal or professional advice, Parties must retain and consult with legal counsel or obtain other appropriate professional advice in the preparation of these types of documents. The Appraisal institute does not assume any responsibility or liability for any services performed pursuant to these materials nor does it make any representation or warranty that these materials contain terms and conditions appropriate to any particular appraisal assignment. Appraisal Institute 2018, All Rights Reserved Appraisal Services Agreement 1128 E. 8" Street Greeley, CO of Page 2 Agreement with respect to the appraisal in which they are contained and to the services relating to that appraisal. Appraiser's anticipated Appraisal Conditions at this time are attached and incorporated into and form part of this Agreement. Additional Appraisal Conditions may be developed during performance of the appraisal and set forth in the report. Incorporation of Terms and Conditions for Appraisal Services and Reports. The Terms and Conditions, the Appraisal Services Agreement, and any Engagement Letters entered into pursuant to the Terms and Conditions and Appraisal Services Agreement forms material parts of this Agreement and are no less important than any other part. The Terms and Conditions also will be attached to and incorporated into Appraiser's report. As between Client and Appraiser, the following modifications of the Terms and Conditions for Appraisal Assignments shall apply: None. 4. Confidentiality. Appraiser and its Personnel will comply with all duties of confidentiality imposed by applicable law and professional standards. Client agrees that Appraiser and its Personnel may disclose the appraisal report, assignment results and other information relating to the appraisal, including information which may be considered confidential under applicable professional standards, to third parties as required by law, and asnecessary for compliance with professional standards. Client consents to and authorizes Appraiser and its Personnel to disclose the appraisal report, assignment results and other information relating to the appraisal, including information which may be considered confidential under applicable professional standards, in response to threatened or actual legal or regulatory actions or for insurance coverage of such matters. Appraiser's duties of confidentiality to Client under applicable laws and professional standards shall continue rollowing completion of Appraiser's services under this Agreement. S. When Appraiser's Obligations Are Complete. Appraiser's obligations under this Agreement are complete when the appraisal report specified above has been delivered to Client. Appraiser agrees to be reasonably responsive to Client's legitimate inquiries regarding the contents of the report after delivery. 6. Withdrawal of Appraiser prior to Completion of Assignment Appraiser may Nithdraw without penalty or liability from the assignment(s) contemplated under this Agreement before completion or reporting of the appraisal in the event that Appraiser determines, at Appraiser's sole discretion, that incomplete information was provided to NOTICE: Nothing herein shall be construed as legal or professional advice_ Parties must retain and consult with legal counsel or obtain other appropriate professional advice in the preparation of these ypes of documents. The Appraisal Institute does not assume any responsibility or liability for any services performed pursuant to these materials nor does it make any representation or wan-anty that hese materials contain terms and conditions appropriate to any particular appraisal assignment. Appraisal Institute 2018, All Rights Reserved Appraisal Services Agreement 1128 E 8th Street Greeley, Co of 6 Page Appraiser prior to the engagement, that Client or other parties have not or cannot provide Appraiser with documentation or information necessary to Appraiser's analysis or reporting, that conditions of the subject property render the original scope of work inappropriate, that Appraiser becomes aware that he or she lacks the competency needed for the assignment within the meaning of applicable professional standards, that a conflict of interest has arisen, or that Client has not complied with its payment obligations under this Agreement. Appraiser shall notify Client of such withdrawal in writing. 7. Cancellation of Assignment by Client. Client may cancel this Agreement at any time prior to Appraiser's delivery of the appraisal report upon written notification to Appraiser. Client shall pay Appraiser for worcompleted on the assignment prior to Appraiser's receipt of written cancellation notice, unless otherwise agreed upon by Appraiser and Client in writing. 8. Services Not Provided. The fees set forth in this Agreement apply to the appraisal services rendered by Appraiser as set forth in this Agreement. Unless otherwise specified herein, Appraiser's services for which the fees in this Agreement apply do not include meetings with persons other than Client, Client's Personnel or Client's agents or professional advisors; Appraiser's deposition(s) or testimony before judicial, arbitration or administrative tribunals; or any preparation associated with such depositions or testimony. Any additional services performed by Appraiser not set forth in this Agreement will be performed on terms and conditions set forth in an amendment to this Agreement or in a separate written agreement. 9. Testimony in Court or Other Proceedings. Unless otherwise stated in this Agreement, Client agrees that Appraisers engagement pursuant to this Agreement does not include Appraiser's participation in or preparation for, whether voluntarily or pursuant to subpoena, any oral or written discovery; sworn testimony in a judicial, arbitration or administrative proceeding; or attendance at any judicial, arbitration or administrative proceeding relating to this assignment_. 10. Designation as an Expert Witness. Unless otherwise stated in this Agreement, Client will not designate or disclose Appraiser or any. of its Personnel as an expert witness in any court, arbitration or other proceeding without the prior written consent of Appraiser. iI i . Entire Agreement. This Agreement, its attachments, and the terms of any Engagement Letters entered into pursuant to the terms of this Agreement, set forth the entire agreement of the parties with respect to the services described herein. Other than such materials that are incorporated expressly into this Agreement, no other agreement, OTlCE: Nothing herein shall be construed as legal or professional advice, Parties must retain and onsult with legal counsel or obtain other appropriate professional advice in the preparation of these ypes of documents_ The Appraisal Institute does not assume any responsibility or liability for any ervices performed pursuant to these materials nor does it make any representation or warranty that hese materials contain terms and conditions appropriate to any particular appraisal assignment. Appraisal Institute 2018, All Rights Reserved Appraisal Services Agreement 1 128 E. 8th Street Greeley, CO Page 4 of 6 statement, or promise made on or before the date this Agreement became effective, oral or otherwise, will be binding on the parties. 12. Modifications. This Agreement may only be modified by a subsequent agreement of the parties in writing signed by all the parties. 13. Assignment. Neither party may assign this Agreement, or any rights or claims under this Agreement, to a third party without the express written consent of the other party, which the non,assi ning party may withhold in its sole discretion. In the event this Agreement is assigned by mutual consent of the parties, it shall become binding on the assigning party's permitted successors and assigns, An assignment of this Agreement, with permission or otherwise, shall not constitute an assignment or readdressing of any completed appraisal to a different client (within the meaning of Appraiser's applicable professional standards) than stated in the report nor result in any obligation of Appraiser to readdress .a report to a different client. 14. severability. If any provision of this Agreement is held, in whole or part, to be void, unenforceable or invalid for any reason, the remainder of that provision and the remainder of the entire Agreement shall be severable and remain in full force and effect. 15. Governing Law and Jurisdiction, This Agreement and any dispute between Client and Appraiser shall be governed by the law of the state in which Appraiser's office as specified in this Agreement is located, exclusive of that state's choice of law rules. Client and Appraiser agree that any legal proceeding brought by either party to interpret or enforce this Agreement,or to enforce an arbitration award entered pursuant to this Agreement, shall all be brought in a state or federal court having jurisdiction over the location of Appraiser's office as specified in this Agreement, and the parties hereby waive any objections to the personal jurisdiction or venue of said court. 16. Notices. Any notice or request required or permitted to be given to any party shall be given in writing and shall be delivered to the receiving party by: a) registered or certified mail, postage prepaid; (b) overnight courier, such as Federal Express, United Parcel Service or equivalent; or (c) hand delivery. The address for delivery of any notice shall be the address for the party as specified in this Agreement, or at such other address as party may designate by written notice to the other party in conformance with this paragraph. Unless otherwise specified herein, notice shall be effective the date it is postmarked or given to a third party for delivery to the receiving party, whether or not the receiving party signs for or accepts delivery of such notice. NOTICE: Nothing herein shall be construed as legal or professional advice. Parties must retain and consult with legal counsel or obtain other appropriate professional advice in the preparation of these types of documents. The Appraisal Institute does not, assume any responsibility or liability for any services performed pursuant to these materials nor does it make any representation or warranty that these materials contain terms and conditions appropriate to any particular appraisal assignment, Appraisal Institute 2018, All Rights Reserved Appraisal Services Agreement 1128 E. 8th Street Greeley, CO of 6 Page 17. Client's Duty to Indemnify Appraiser. Client agrees to defend, indemnify and hold harmless Appraiser from any damages, claims, demands, causes of action, liabilities losses or expenses of whatsoever kind or nature, including attorneys' fees and litigation expenses at trial or on appeal, arising from or relating to allegationsasserted against Appraiser by any third party that if proven to be true would constitute a breach by Client of any of Client's obligations, representations or warranties made in this Agreement, or any violation by Client of any federal, state or local law, ordinance or regulation, or common law (a "Claim"). In the event of a Claim, Appraiser shall promptly notify Client of such Claim, and shall cooperate with Client in the defense or settlement of any Claim: Client shall have the right to select legal counsel to defend any Claim, provided that Appraiser shall have the right, to engage independent counsel at Appraiser's expense to monitor the defense or settlement of any Claim. Client shall have the right to settle any Claim, provided that Appraiser shall have the right to approve any settlement that results in any modification of Appraiser's rights under this Agreement, which approval will not be unreasonably withheld, delayed or conditioned M. Client's Representations and warranties. Client represents and warrants to Appraiser that (1) Client has all right, power and authority to enter into this Agreement; (2) Client's duties and obligations under this Agreement do not conflict with any other duties or obligations assumed by Client under any agreement between Client and any other party; and (3) Client has not engaged Appraiser, nor will Client use Appraiser's appraisal report} for any purposes that violate any federal, state or local law, regulation or ordinance or common law. 19. Signature and Copies. A signature on a copy of this Agreement received by facsimile, by email or in digital form is binding upon the parties as an original. The parties shall treat a photocopy of such facsimile or printout of the emailed or digital form as a duplicate original. "NOTICE: Nothing herein shall be construed as legal or professional advice. Parties must retain and ;onault with legal counsel or obtain other appropriate professional advice in the preparation of these hypes of documents. The Appraisal Institute does not assume any responsibility or liability for any services performed pursuant to these materials nor does it make any representation or warranty that These materials contain terms and conditions appropriate to any particular appraisal assignment.. *Appraisal Institute 20181All Rights Reserved Appraisal Services Agreement 1128 E. 8" Street Greeley, CO of 6 Page 6 20. Expiration. This Agreement is legally binding only if signed by both Appraiser and Client within 10 days of the date appearing on the first page. Client: Mr, Gerald Davis/Duggan Holdings Dated: f By: Name: 6ora Position: Billing Address (email or person/address to whom invoices should be sent): 6564 Jerry Bass Ln, Pueblo, CO 81005 Appraiser WE. Lundquist. LLC Name: William E. Lundquist Position: Principal NOTICE: Nothing herein shall be construed as legal or professional advice, Parties must retain and :onsult with legal counsel or obtain other appropriate professional advice in the preparation of these types of documents. The Appraisal Institute does not assume any responsibility or liability for any services performed pursuant to these materials nor does it make any representation or warranty that these materials contain terms and conditions appropriate to any particular appraisal assignment. Appraisal Institute 2018, All Rights Reserved An Appraisal of: Industrial Building 1128 East 8th Street Greeley, Colorado Prepared for: Gerald Davis Edmund Duggan Estate P.O. Box 340 Windsor, CO 80550 Effective Date: November 5, 2015 Report Date: March 1, 2016 Prepared by: Shannon & Associates Donald J. Shannon MAI, SRA William E. Lundquist, Associate EN: 84-1570364 File # 3736 SHANNON & ASSOCIATES Real Estate Appraisers and Consultants March 1, 2016 Mr. Gerald Davis, CPA Edmund Duggan Estate P.O. Box 340 Windsor, Co 80550 Re: An appraisal of the industrial buildings at 1128 East 8th Street, Greeley, Colorado. Dear Mr. Davis: As requested, we have made an inspection and analysis of the above -referenced property and have prepared a comprehensive narrative appraisal presented in a summary report format. The purpose of this inspection and analysis is to develop an estimate of "Market Value" for the industrial building "As Is" in Fee Simple Interest. "Market Value" and "Fee Simple", as used herein, are defined on page 14 of the attached report. Mr. Lundquist inspected the exterior and interior of the property on January 27, 2016. Mr. Shannon inspected the property previously. The effective date of this appraisal is November 5, 2015, which is the date of death of Edmund Duggan. It is our understanding that the purpose of this appraisal is to assist the client in settling the estate of Edmund Duggan. An electronic copy of this appraisal have been provided for your use. The original report and all photographs used within will be maintained in the appraisers' file. You or your assignee may purchase additional copies, if required. This appraisal has been preparedin accordance with the appraisers interpretation of OCC Rule 12 CFR Section 4.42f0, the Uniform Standards of Professional Appraisal Practice. The appraisal is subject to the typical Assumptions and Limiting Conditions and Certification of value statements attached. The appraisal should not be relied on unless these conditions are accepted. The appraisers have not been influenced by any parties in their value conclusions, and have no financial interest in the subject property. The appraisers are not responsible for any unauthorized use of this report, An Executive Summary is presented on page 5. Respectfully Submitted, Shannon & Associates r Donald E* Shannon, MAI, SRA CO-CG01313438, 12/31/17 WY -78, 09/04/17 illiam K Lundquist, Associate/Appraiser Co-CG40005157, 12/31/17 WY -1088, 03/02/17 SHANNON & ASSOCIATES 215 W. OAK STREET, su1TE 501 FORT COLLINS, CO 80521 PH: (970) 482-1010 • F ; (970) 221-4444 Table of Contents Assumptions and Limiting Conditions Table of Contents 3 Executive Summary 5 Appraisal Assignment 5 5 Highest and Best Use 6 7 Certification 10 Appraisal Assignment 12 12 12 12 12 Recent Sales History 12 Interest Appraised 12 12 13 13 13 13 14 City and Regional Analysis 15 Subject Neighborhood 16 Location: 16 Boundaries: 16 Subject Neighborhood Photographs 18 Subject Neighborhood Photographs . . 19 Subject Neighborhood Map 20 Subject Property 21 Topography, Soil and Drainage 21 Easements 22 Subject Site 22 Subject Improvements 22 Subject Property Photographs 25 Subject Property Photographs 26 Weld County Assessor Map 27 Highest and Best Use 28 Physical Considerations 28 Political Considerations 28 Financial Feasibility and Maximum Productivity 29 Approaches to Value 30 Cost Approach 30 Income Approach 30 Sales Comparison Approach 30 Cost Approach 32 Site Value 33 Subject Property Characteristics Identification of the Intended Users Intended Use/Function of the Appraisal Identification of the Subject Property _ Ownership Purpose of the Appraisal Appraisal Dates Scope of the Appraisal Process Standard and Regulatory Requirements Report Format Definitions of Value SHANNON & ASSOCIATES Real Estate Appraisers & Consultants Table of Contents Page 3 Comparable Site Sale 1 34 Comparable Site Sale 2 35 Comparable Site Sale 3 36 Comparable Site Listing 4 37 Comparable Land Sales Map 38 Comparable Land Sales Discussion 40 Comparable Land Sale 1 40 Comparable Land Sale 2 40 Comparable Land Sale 3 40 Comparable Listing 4 40 Land Sales Summary 41 Addendum Qualifications Engagement Letter City and Regional Data SHANNON & ASSOCIATES Real Estate Appraisers & Consultants Table of Contents Page 4 Executive Summary Appraisal Assignment Purpose Scope Intended User Intended Use Inspection Date Date of Value To estimate "Market Value" of the subject property in "Fee Simple Interest". To develop a comprehensive appraisal presented in a narrative report format using the sales comparison approach for the land and a depreciated cost approach for the buildings. Gerald Davis and the Edmund Duggan Estate To aid the Client in settling the estate of Edmund Duggan. November 5, 2015 November 5, 2015 Subject Property Characteristics Location The subject property is located at 1128 East 8t'' Street. This location is on the south side of East 8t}, Street. It is across from the Greeley Weld County Airport in the extreme east part of Greeley. Legal Description Property Type Property Rights Site Description GR 12098 PT N2SE4 4 5 65 (OGILVY 2ND ANNEX) COM AT NW COR SE4 (CEN OF SEC) S01D32'W 1075.04' TO PT ON S Rl LN OF COLO STATE HWY 263 S87D 12'E 182.33' S 85D54'E 550' S80D41'E 345' S 7 8D45'E 336.85' TO TRUE POB S7 8D 45'E 574.37' S0D28'W 509.18' N89D31'W 567.34' NOD45'E 616.48' TO POB An industrial site with 6 Free standing light industrial buildings and an older house. Fee Simple Interest Rectangular 318,424 Square foot (7.31) acre site. SHANNON & ASSOCIATES Real Estate Appraisers & Consultants Executive Summary Page 5 Subject Improvements Zoning Flood Zone Environmental Hazards Highest and Best Use As Vacant As Improved Marketing Time Value Conclusion The subject property is improved with six free standing industrial building which have a total of 27,850 square feet. An older home which contains 1,428 square feet and various older outbuildings. `IM' Industrial Medium Intensity by City of Greeley According to Community Panel No. 081230 1541E, National Flood Insurance Rate Map, revised January 20, 2016, the subject property is in zone AO which is a flood fringe zone. Much of the subject neighborhood north of East 18th Street is in the 100 year flood None observed on site Development with industrial buildings which could be utilized for various types of industrial or commercial uses. The present industrial buildings represent one of the highest and best uses of the subject site, although the site is underutilized with only the six small buildings. Six months to one year if priced at or near the appraised value and aggressively marketed by a knowledgeable realtor familiar with the product type. After reading this report, please refer to the reconciliation. SHANNON & ASSOCIATES Real Estate Appraisers & Consultants Executive Summary Page: Assumptions and Limiting Conditions The "Market Value" estimate provided in this appraisal report is subject to the following assumptions and limiting conditions and to other such specific and limiting conditions as may be set forth by the Appraiser's in this report. 1. Distribution and use of this report is limited to the intended user. 2. Any user of this report agrees to the attached limiting conditions. 3. This is a Summary Appraisal Report, which is intended to comply with the reporting requirements set forth under Standard Rule 2-2 of the Uniform Standards of Professional Practice for a Summary Appraisal Report. As such, it may not include full discussions of the data, reasoning, and analyses that were used in the appraisal process to develop the appraisers' opinion of value. Supporting documentation concerning the data, reasoning, and analyses is retained in the appraiser's file. 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's are not responsible for the unauthorized use of this report. 4. 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. 5. The property is appraised free and clear of any or all liens and encumbrances unless otherwise stated in this report. 6. Responsible ownership and competent management are assumed unless otherwise stated in this report. 7. 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. The Appraiser's have made no survey of the property. 8. It is assumed that there are no hidden or un-apparent conditions of the property, subsoil, or structures that render it more or less valuable. No responsibility is assumed for such conditions or for arranging engineering studies that may be required to discover them. 9. 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. 10. 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 report. SHANNON & ASSOCIATES Real Estate Appraisers & Consultants Assumptions & Limiting Conditions Page 7 11. 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 estimates contained in this report are based. 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 no encroachment or trespass unless otherwise stated in this report. 13 The Appraiser/s are not required to give testimony, appear in court, or give further consultation because of having made the appraisal with reference to the property in question, unless arrangements have been previously made therefore. 14. Any distribution of the valuation in this report between land and improvements applies only under the existing program of utilization. The separate valuations for land and building must not be used in conjunction with any other appraisal and are invalid if so used. 15. The Appraiser/s are not qualified to detect hazardous waste and/or toxic materials. Any comment by the Appraiser/s 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 Appraiseris have no knowledge of the existence of such materials on or in the property; however, they are not qualified to detect such substances. The presence of potentially hazardous materials may affect the value of the property. The 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. No responsibility is assumed for any such conditions, or for any expertise or engineering knowledge required to discover them. The client is urged to retain an expert in this field, if desired. 16. Unless otherwise stated in this report, the subject property is appraised without a specific compliance survey having been conducted to determine if the property is or is not in conformance with the requirements of the Americans with Disabilities Act. The presence of architectural and communication barriers that are structural in nature and would restrict access by disabled individuals may adversely affect the property's value, marketability, and/or utility. 17. Possession of this report or a copy thereof does not imply right of publication nor use for any purpose by any other than the person to whom it is addressed, without the written consent of the Appraiser/s. The Client or Assigns shall indemnify the Appraiser/s against third party lawsuits. SHANNON & ASSOCIATES Real Estate Appraisers & Consultants Assumptions & Limiting Conditions Page 8 18. Neither all nor any part of the contents of this report shall be conveyed to the public through advertising, public relations, news, sales or any other media, without the written consent and approval of the author, particularly as to the valuation conclusions, the identity of the Appraiser or firm with which he is connected, or any references to the Appraisal Institute. 19 On all appraisals subject t0 satisfactory completion, repairs, or alterations, the appraisal report and value conclusion are contingent upon completion of the improvements in a good workmanlike manner and a completion inspection by the Appraiser/s. 20. Satisfactory road maintenance agreements, condominium declarations, and other pertinent agreements are assumed to be recorded. 21. The Appraiser's assume that financing, as discussed in the report, is available for potential purchasers. 22. It should be understood that this is an Opinion of Value, based upon the data available to the Appraiser's, not a guarantee or warranty of value. 23. The limit of liability shall be no more than the remuneration received. SHANNON & ASSOCIATES Real Estate Appraisers & Consultants Assumptions & Limiting Conditions Page 9 Certification 1. The Appraiser's certify that to the best of my/our knowledge and belief: 2. The Appraiser/s have no unreported present or prospective interest in the property that is the subject of this report. Further, I/e have no personal interest or bias with respect to the subject matter or the parties involved. 3. The Appraiser's have personally inspected the property, both inside and out, and have made an exterior inspection of all comparable sales listed in this report. To the best of the Appraiser's knowledge and belief, all statements of fact and information in this report are true and correct, and the Appraiser/s have not knowingly withheld any significant information, subject to the stated assumptions and limiting conditions contained in this report. 4. The reported analyses, opinions, and conclusions were developed, and this report has been prepared in conformity with the requirements of the Code of Professional Ethics and Standards of Professional Appraisal Practice of the Appraisal Institute, which includes the Uniform Standards of Professional Appraisal Practice. 5. The use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representatives. 6. All conclusions and opinions concerning the real estate set forth in this appraisal report were prepared by the Appraiseris whose signatures appear on this appraisal report, unless indicated as "Review Appraiser". No change of any item in this appraisal report shall be made by anyone other than the Appraiser/s, and the Appraiser/s shall have no responsibility for any such unauthorized change. 7. The Appraiser/s compensation is not contingent upon the reporting of a. predetermined value or direction in value that favors the cause of theclient, the amount of the value estimate, the attainment of a stipulated result, or the occurrence of a subsequent event. Furthermore, the appraisal assignment was not based on a requested minimum valuation, a specific valuation, or the approval of a loan. 8. The reported analyses, opinions, and conclusions are limited only by the reported Assumptions and Limiting Conditions on the following pages and are the Appraisers personal, unbiased professional analyses, opinions, and conclusions. 9. No one provided significant professional assistance to the person's signing this report Of there are exceptions, the name of each individual providing significant professional assistance has been stated.) SHANNON & ASSOCIATES Certification Page 10 Real Estate Appraisers & Consultants 10. As of the date of this report, Donald J. Shannon, MAI, SRA has completed the continuing education program of the Appraisal Institute. 11. None of the appraisers or staff of Shannon and Associates, the preparers of this report, has been sued by a regulatory agency or financial institution for fraud or negligence involving an appraisal report. Donald J. Shannon, MAI, SRA Date CO-CG01313438, 12/31/17; WY -78, 9/4/17 Inspected Property © Yes No Assisted in Analysis © Yes No r cor William E. Lundquist, Associate Date CO-CG40005157, 12/31/17; WY -1088, 3/2/17 Inspected Property a Yes No Assisted in Analysis ' Yes No SHANNON & ASSOCIATES Real Estate Appraisers & Consultants Certification Page 11 Appraisal Assignment Identification of the Intended Users Intended users of the report are Mr. Gerald Davis, CPA and other representatives of the Edmund Duggan Estate. Intended Use/Function of the Appraisal The function of the appraisal is to aid the client in settling the estate of Edmund Duggan. Identification of the Subject Property The subject property is located at 1128 East 8thStreet, Greeley CO. The property is improved with six light industrial buildings having a total of 27,285 square feet. The subject property is described legally as: GR 12098 PT N2 E4 4 5 65 (OGILVY 22ND ANNEX) COM AT NW COR SE4 (CEN OF SEC) S01D32'W 1075.04' TO PT ON R/W LIB OF COLO ►T.ATE HWY 263 S87D1TE 182.33' 85D54'E 550' S80D411E 345' 78D45'E 336.85' TO T ` UE POB S78D451E 574.37' OD 'W 509.18' N89D31'W 567.34' N0D45'E 616.48' TO POB Ownership The subject property is owned by Edmund Duggan Estate , P.O. Box 340, Windsor, CO 80550. Recent Sales History The last market sale of the subject property was May 4, 1990 when the property sold for $45,000. Interest Appraised The primary property interest to be appraised is the Fee Simple Estate, defined as: "Absolute ownership unencumbered by any other interest or estate, subject only to the limitations imposed by governmental powers of taxation, eminent domain, police power, and escheat."' Purpose of the Appraisal The purpose of the appraisal is to provide an "As Is" opinion of market value. 1 The Dictionary of Real Estate Appraisal. 4th Ed., 2002, Appraisal Institute, page 113 SHANNON & ASSOCIATES Real Estate Appraisers & Consultants Appraisal Assignment Page 12 Appraisal Dates Inspection Date: Effective Date: Report Date: William E. Lundquist inspected the property on January 27, 2016. Donald J. Shannon, MAI inspected the property previously November 5, 2015 March 1, 2016 Scope of the Appraisal Process In the development of this appraisal, the following process was undertaken: • onald J. Shannon, MAT, SRA and William E. Lundquist inspected the subject property. • We analyzed the property in relation to current and anticipated future economic conditions. • We analyzed the property based on visual observation, and review of descriptive data obtained from the property owner, the City of Greeley and Weld County. • We made a determination of the property's highest and best use. • We gathered, confirmed., and analyzed information pertaining to sales of similar industrial buildings to estimate market value "As Is" of the subject property via the sales comparison approach. • We gathered, confirmed, and analyzed information pertaining to leases of similar industrial buildings to estimate the market value of the property via the income approach • Based on the foregoing procedures and analysis, we developed an opinion of market value in fee simple estate as of November 5, 2015. Standard and Regulatory Requirements This appraisal was prepared to conform to the Appraisal Foundation's Uniform Standards of Professional Appraisal Practice (USPAP) and to the Standards of Professional Appraisal Practice and the Code of Professional Ethics of the Appraisal Institute. Report Format The 2014-2015 edition of Uniform Standards of Professional Appraisal Practice eliminates reference to "Summary" or "Self -Contained" styles of reporting. Instead, "Standard 2 does not dictate the form, format, or style of real property appraisal reports. The form, format, and style of a report are functions of the needs of intended users and appraisers. The substantive content of a report determines its compliance." This report is designed to be similar to the requirements of a "Summa y" report as described in former editions of USPAP and satisfies the current reporting standards. SHANNON & ASSOCIATES Real Estate Appraisers & Consultants Appraisal Assignment Page 13 Definitions of Value Market Value means the most probable price, which a property should bring in a competitive and open Market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: a) Buyer and seller are typically motivated; b) Both parties are well informed or well advised, and acting in what they consider their own best interests; c) A reasonable time is allowed for exposure in the open market; d) Payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and e) 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.2 "As Is" Premise: Market Value "As Is" on appraisal date means an estimate of the market value of a property in the condition observed upon inspection and as it physically and legally exists without hypothetical conditions, assumptions, or qualifications, as of the date the appraisal is prepared. This requires that the property be valued according to its highest and best use; however, it does not prohibit valuation based upon anticipated future events such as leasing of vacant space, demolition of obsolete buildings, etc. 2 The Dictionary of Real Estate Appraisal, 4'1` Ed, 2002, Appraisal Institute, page 177-178 3 The Dictionary of Real Estate Appraisal, 4111 Ed, 2002, Appraisal Institute, page 306 SHANNON & ASSOCIATES Real Estate Appraisers & Consultants Appraisal Assignment Page 14 City and Regional Analysis The subject property is located in the northeast quadrant of Greeley. Given the location of the subject, we believe the subject will be influenced by market conditions in both the Greeley/Weld County and Fort Collins/Loveland areas. That said, an analysis that describes market conditions in the overall Northern Colorado, in terms of population, employment and other pertinent market conditions, can be found in the Addendum section of this report. SHANNON & ASSOCIATES City & Regional Analysis Page 15 Real Estate Appraisers & Consultants Subject Neighborhood A neighborhood can be defined as a complimentary grouping of inhabitants or property usage. Since environmental, governmental, social, and economic changes can influence property values, it is necessary to identify these trends that affect the environment of the property being appraised. Location: The subject neighborhood is generally described as the East Greeley Industrial area. It includes the Greeley Weld County Airport and areas in The Greeley city limits as well as areas of unincorporated Weld County. Boundaries: The subject neighborhood boundaries are generally described as: North: 0 Street and County Road 64 East: County Road 49 South: U.S. Highway 34 Bypass West: U.S. Highway 85 Bypass This area includes the extreme east part of Greeley and the industrial areas just outside the Greeley city limits. The area has mostly industrial and agricultural uses. There are residential uses scattered throughout the area. There are several small industrial parks in the area. The area includes the Greeley Weld County Airport. M aj or businesses in the area include: Luprino Foods, B c' G Equipment, Burris Optics, Hill Petroleum, Anderson Salvage, Kuhn Agricultural Machinery, Dairy Farmers of America, Beegles Aircraft service, Moore Bearing Co., and Engineered Propulsion Systems. The Greeley Weld County Airport is a general aviation airport with a 10,000 foot by 100 foot runway. It has a 6,000 square foot general aviation terminal building with a restaurant. The Greeley Weld County Airport is home to the 233rd Space Group of the Colorado Air National Guard and the aviation program of Aims Community College. There are several aviation related business located at the airport. SHANNON & ASSOCIATES Subject Property Page 16 Real Estate Appraisers & Consultants The U.S. Highway 85 bypass forms the west border of the neighborhood. U.S. Highway 85 extends north through Greeley to Cheyenne Wyoming and Interstate 80. It extends south to the Denver Metropolitan area. The U.S. Highway 34 Bypass forms the south border of the neighborhood. Highway 34 extends west to Loveland Colorado and Interstate 25. It extends east of Brush and Fort Morgan Colorado and Interstate 76. Colorado Highway 263 extends east from Greeley past the airport to the unincorporated community of Gill. County Road 49, which carries a large amount of oil field traffic, is being improved to four -lanes from the east edge of the airport to Highway 34. It will eventually be improved south to Keenesburg and Interstate 76. In summary, the subject neighborhood is the extreme eastern part of Greeley and includes unincorporated areas of Weld County, The area includes the Greeley Weld County Airport. U.S. Highway 85, which forms the west edge of the neighborhood, is a major thoroughfare into the Denver Metropolitan area. It has good transportation linkages to three Interstate highways and most front range cities. SHANNON & ASSOCIATES Subject Property Page 17 Real Estate Appraisers & Consultants Subject Neighborhood Photographs East 8th Street viewing west from in front of the subject property East 8th Street viewing east from in front of the snub j e et property. Neighboring property to the northeast SHANNON & ASSOCIATES Subject Property Page 18 Real Estate Appraisers & Consultants Subject Neighborhood Photographs Neighboring property to the north Neighboring property to the west SHANNON & ASSOCIATES Subject Property Page 19 Real Estate Appraisers & Consultants Subject Neighborhood Map SHANNON & ASSOCIATES Subject Property Real Estate Appraisers & Consultants Page 20 Subject Property Characteristics of the subject property are described in this section. Descriptions are based on our visual observation, information obtained from the client, and from various departments in the City of Greeley and Weld County. Address/Location The property being appraised is located at 1128 East 8thStreet, Greeley, Colorado. This location is in the Extreme east part of the City of Greeley. It is on the south side of 8th Street across the street and to the west of the Greeley Weld County Airport. Legal Description The property's legal description is as follows: GR 12098 PT N2SE4 4 5 65 (OGILVY 2ND ANNEX) COM AT NW COIF SE4 (EN OF SEC) 01 D32'W 1075.04' TO PT ON S R/W LN OF COLD STATE HWY 263 87D 12'E 182.33' 85D54'E 550' S80D411E 345' SI8D45t 336.85' TO TRUE POB 578 45'E 574.37' OD28'W 509.18' N89D31'W 567.34' NOD45'E 61648' TO POB Parcel Number The subject is identified under Weld County parcel number 096104000063. Topography, Soil and Drainage The topography of the site is mostly level and at grade and drainage appears to be adequate. No known soil or subsoil conditions exist which would adversely affect the subject site. Land Use Restrictions We were not provided with a Commitment for Title Insurance for the subject property. A specific Assumption and Limiting Condition of this appraisal is that there is no detrimental impact on value due to legal land use restrictions (see, Assumptions and Limiting Conditions). Environmental Hazards We are not qualified to detect the presence of environmental hazards. Our value estimate assumes there are no environmental hazards on, or about, the site that would result in a diminution in value. We did not observe any obvious signs of environmental hazards during our inspection of the property (see, Assumptions and Limiting Conditions). Flood Zone According to Community Panel No. 01231541E, National Flood Insurance Rate Map, revised January 20, 2016, the subject property is zone AO which is a flood fringe zone. Much of the subject neighborhood north of East 18th Street is in the 100 year flood SHANNON & ASSOCIATES Subject Property Page 21 Real Estate Appraisers & Consultants Zoning The subject property is zoned "IM"- Industrial Medium Intensity by the City of Greeley. Access The subject is located on the south side of East 8th Street which is also Colorado Highway 263. East 8th Street leads west to the U.S. Highway 85 bypass. There is a new four -lane highway that leads south to U.S. Highway 34. It intersects Highway 34 near Kersey. The property is also convenient to the Greeley Weld County Airport. Surrounding Uses The uses in the area immediately surrounding the subject property are varied and contain a mix of industrial uses. There is a large auto salvage yard to the east. There is vacant industrial land to the south. There is a Truck washout and a gravel mine to the west. A plant which manufactures farm equipment is located across 8t'' Street to the north. Easements No survey of the site was provided, and typical utility easements are assumed to be in place. Subject Site The subject site is more or less rectangular shaped and contains 318,424 square feet (7.31 acres). It is approximately 614 feet deep 571 feet wide. It has approximately 582 feet of frontage on the south side of East Stn Street. Subject Improvements The subject property is improved with six industrial buildings. Each building measures 42.5 feet wide by 107 feet long, and contains 4,547.5 square feet. They have 18 -foot high sidewalls. This equates to a total of 27,285 square feet of industrial space for all six buildings. All of the buildings are pole frame construction with ribbed steel siding and roofing. All have 12- foot by 14 -foot overhead doors at each end. Building 1 which is the farthest east has a concrete floor in approximately half of the building and is heated. The floor and heating system was installed by the tenant. Building 5 has a full concrete floor. The rest of the buildings are insulated but not heated and have dirt floors. All of the buildings have water and natural gas piped to the buildings. There is a single family residence located at the north end of the property. It contains 1,428 square feet and is in serviceable condition. It is currently rented for $400 per month. There is an older two -car garage which is in serviceable condition. SHANNON & ASSOCIATES Subject Property Page 22 Real Estate Appraisers & Consultants There are some older outbuildings which are in various states of disrepair. They would have no significant contributory value. There is a gas wellhead and tank battery located in the southwest corner of the property, which we have not been engaged to value. SHANNON & ASSOCIATES Subject Property Page 23 Real Estate Appraisers & Consultants Property Taxes The subject property is located in Taxing Area 4493, which has a current Mill levy of 74.1360000 per $1,000 of assessed value. The subject property is identified as parcel number 096104000063. Property Taxes Parcel # 096104000063 Actual Value Land $238,818 Improvements $221,532 Total $460,350 Assessed Value Land $55,510 Improvements $17,630 Total $73,140 Taxes $5,422.30 As indicated above, the 2015 taxes due and payable in 2016 for the subject property are $5,422.30 which, according to the Weld County Treasurer's Office, have been paid. Contract Lease Building 1 is currently rented to the operator of the gravel mine to the west for $2,000 per month. The house is rented for $400 per month. The owners allow trucks to be parked on the property for $75 per month. SHANNON & ASSOCIATES Subject Property Page 24 Real Estate Appraisers & Consultants Subject Property Photographs Jar- lani t The south (front) and west sides of the subject buildings viewing from the southwest. The north and west sides of the subject buildings. The north side of the house located at the north edge of the property SHANNON & ASSOCIATES Subject Property Page 25 Real Estate Appraisers & Consultants Subject Property Photographs •._ -- -LAU- .-rte,.= The gas wellhead in the southwest corner of the subject property Oil tank battery in the southwest corner of the property SHANNON & ASSOCIATES Subject Property Page 26 Real Estate Appraisers & Consultants Weld County Assessor Map 4 S 1 Subject Property 73 a mita S St •y� T l 411H 4 2 3 aro :4711 AtiL RS "LAI 7,; SHANNON & ASSOCIATES Subject Property Page 27 Real Estate Appraisers & Consultants Highest and Best Use Highest and best use is defined as: The reasonably probable and legal use of vacant land or an improved property, which is physically possible, appropriately supported, financially feasible, and that results in the highest value.' Inherent in this definition is the use must be physically possible, legally permissible, financially feasible, and maximally productive. These criteria are usually considered sequentially. Physical Considerations The subject property is a 318,424 square foot (7.31 acre) site with six light industrial or warehouse buildings and an older home. The property is located on the south side of East 8th Street which is also Colorado Highway 263. It is approximately one mile east of the U.S. Highway 85 bypass. Highway 85 leads north to Cheyenne Wyoming and south to the Denver metropolitan area where it intersects with Interstate 70. Approximately two miles east 8th Street intersects with a new four -lane highway that leads south to U.S. Highway 34 near Kersey. Highway leads east to interstate 76 and west to Interstate 25 and Loveland and Estes Park. The property is located across the street and to the west of the Greeley Weld County airport. The property is in flood zone AO which is a flood fringe area. Political Considerations The subject property is zoned IM -Industrial Medium Intensity by the City of Greeley. Permitted uses include: farming; cemeteries; columbariums; churches; libraries; museums; police stations; fire stations; adult schools; art, dance and photo studios and galleries; auction houses; auto rental; towing services; banks and financial institutions, ATM's; bars, taverns, and lounges; bingo halls and parlors; brewpubs; builders, contractors supply, offices and yards; cleaning and janitorial services; dry cleaning; emissions testing centers; exterminating shops; flea and farmers markets; golf courses, country clubs, and driving ranges; miniature golf; laundromats; manufactured home sales and repair lots; mortuaries and funeral homes; nurseries, greenhouses, and garden shops; offices; parking lots and structures; pawn shops; printing and copy shops; mail centers; community recreation buildings; extensive indoor and outdoor recreation uses; open space; parks; rental services; repair shops; taxidermists; indoor movie theaters; train and shuttle bus depots; upholstery shops; warehouses; wholesale goods and sales; bulk storage of flammable liquids and gasses; co -generation and power plants; commercial laundries and dry cleaning plants; concrete and asphalt batch plants; crematoriums; farm equipment, implement, diesel, and bus sales and repair; manufacturing, fabrication, and assembly; moving and storage companies; 4 The Appraisal of Real Estates 126 Ed., Appraisal Institute, 2002, page 305 SHANNON & ASSOCIATES Highest & Best Use Page 28 Real Estate Appraisers & Consultants newspaper and publishing plants and binderies; research and testing labs; transportation facilities; truck, trailer, and large equipment rental; trucking and freight terminals; utility service facilities; water and waste water treatment facilities; welding and machine shops; well drilling companies; wireless telecommunications towers. Other uses are permitted by special or design review. The house is considered an accessory use and is a legal and conforming use. Financial Feasibility and Maximum Productivity The subject site is located in the extreme east edge of the city of Greeley in an industrial area. It is on the south side of East Stn Street. It has good access to major highways and the most Front Range cities. Being on the east edge of town it also has good access to the agricultural and energy production areas of rural Weld County. It is close to the Greeley Weld County airport which could be an advantage in some industries. The subject property's zoning would allow for most industrial or manufacturing uses. Much of the sales activity in industrial buildings in Greeley in the past few years has been sales to various businesses in the energy industry. The subject property has a large site relative to the improvements, which is a requirement of many energy businesses. These sales to energy industry businesses have been mostly to owner users. These sales have typically been at the high end of the market range and cash sales. Currently oil prices are at a ten-year low and many oil and gas operators are downsizing operations. This has historically been a cyclical market and demand will increase when oil prices recover. In conclusion, the highest and best use of the subject site, as though vacant, is for development with a commercial use that would benefit from subject property's access to Highway 85 and northeastern Colorado. The improvements are six separate building which could be rented or used separately. The conclusion of highest and best use as improved is as a facility for a manufacturing or energy business which would benefit from the subject property's large site, and access to major highways and rural weld county. The subjects current improvements are consistent with the highest and best uses of the site. SHANNON & ASSOCIATES Highest & Best Use Page 29 Real Estate Appraisers & Consultants Approachesto Value Professional appraisal practice customarily includes the cost, income, and sales comparison approaches to arrive at a final value estimate. Cost Approach The cost approach involves estimating the current reproduction or replacement cost of the improvements, less accrueddepreciation from all causes, plus the estimated value of the land. Land value is developed by comparing recent sales of similar vacant parcels to the subject site, as if vacant and available to be put to its highest and best use. The replacement cost estimate is based on Marshall Valuation Service, builder's cost breakdown, and knowledge of the local market. This approach is based on the principal of substitution that states no prudent purchaser would pay more for a. property than the amount for which he/she can obtain, by purchasing the land and construction of a building without undue delay, a property of equal utility. This approach is particularly applicable when the appraisal concerns newer or proposed construction that represents the highest and best use of the subject site. Income Approach The income approach to value converts a stream of net income into an indication of value by use of a Capitalization Rate (Direct Capitalization) or a Discount Rate (Yield Capitalization, i.e., Discounted Cash Flow Analysis). The estimate of economic rent, defined as rent a property would demand if it were available for lease, is used to develop the potential gross annual income. In the Income and Expense Summary, deductions are made for vacancy and rental losses and operating expenses, to derive net operating income. Through analysis of comparable sales and/or examination of the financial market, Capitalization Rates are selected. Net Income can be converted to an indication of value by the Direct Capitalization or by a Discounted Cash Flow Analysis (DCF). Typically for a property with relatively long term lease, the DCF analysis is the preferred technique of this approach. Very few industrial leases were found in the Greeley area. Those that were found were extremely inconsistent in terms of lease rate. For this reason the income approach was not developed. Sales Comparison Approach One of the best indications of the Market Value of a property is the sales comparison approach, wherein recent sales of similar properties are compared to the subject. The comparable sales may be analyzed in the following two ways: 1. Gross sale price per square foot or gross sale pnce per unit (sale price divided by square footage of the improvements or the number of units). 2. irect comparison to subject after allocation of sale price between land and improvements. This comparison is done on a per -square -foot or per unit basis. SHANNON & ASSOCIATES Approaches to Value Real Estate Appraisers & Consultants Page 30 1 _ The use of one or more of these techniques may be determined by the quantity or quality of data available. Exhibits are used in each approach to graphically portray the data and adjustments utilized. In some instances, depending upon the type of property being appraised or its purpose, one or two of the approaches may carry more weight or may furnish a more reliable indication of value. In other instances, because of use, age, design, obsolescence or inadequacy of data, one or more may be given little weight or not be meaningful in the final value estimate. For this assignment reasonably good land sales are available for valuing the land. There are no sales or leases for truly comparable properties with seven acre sites with only 27,285 square feet of building space. In our judgement we used a cost approach, which values the land by the sales comparison approach and values the improvements by a depreciated cost approach. SHANNON & ASSOCIATES Real Estate Appraisers & Consultants Approaches to Value Page 31 Cost Approach The cost approach is applicable in this appraisal because the improvements are newer. Good cost data is available from Marshall Valuation Service that we use in this report. The first step in the cost approach is the estimate the value of the land as if it were vacant and ready to be put to its highest and best use. The cost of engineering, planning, and site development are added at a later point in the cost approach along with replacement or reproduction cost of the improvements. The site value for this analysis is based on the site allocation figures for the comparables in the sales comparison approach. The subject site consists of 318,424 square foot site with six industrial buildings with a total of 27,285 square feet of usable industrial space. Physical depreciation for the improvements is based on the agellife method. The cost analysis summarized on the following pages: SHANNON & ASSOCIATES Real Estate Appraisers and Consultants Reconciliation 32 Site Value The first step in the cost approach is to estimate the value of the site as if it vacant and ready to be put to its highest and best use. The subject site is a 318,424 square foot (7.31 acre) industrial site in the extreme east part of Greeley. There have been few recent sales of industrial sites in east Greeley. Three sales and one active listing were used. This is the best data available. The sales and listing are summanzed below: • All of the comparables are industrial sites in east Greeley • Sale 1 and the listing are located across the street from the subject. • Total square footages for the sales range from 486,130 square feet to 1,562,062 square feet. • Sale dates range from June of 2014 to an active listing. These sales are considered individually on the following pages: SHANNON & ASSOCIATES Real Estate Appraisers and Consultants Reconciliation 33 Comparable Site Sale 1 Location Information Location Northeast Corner of 8th Street and Balsam Ave. Greeley, CO Parcel Number: Sales Information Sale Date Size Sale Price Price/Square Foot Grantor Grantec Recording Financing Conditions of Sale Intended Use Physical Information Shape Topography Frontage Utilities Confirmation Remarks 096104000047 June 30, 2014 1,562,032 square feet (35.86 acres) $2,000,000 $1.28 2025 Investments, LLC Global Assets Recovery, LLC 4027207 Cash to Seller Arms -Length Gravel Development Irregular Mostly level East 8th Street All utilities at site David Bowes (Shannon and Associates), John Kundert, County Records This property was purchased in 2009 for $1,150,000. The buyer platted the site for 12 light industrial lots and put the property back on the market in 2013 for $2,734,000 or S1.75 per square foot. The site is on the north side of East 8t" Street and cast of the J.S. Highway 85 bypass. The property was purchased by an adjacent property owner who plans to nine the property for gravel. The property is in a flood fringe area. SHANNON & ASSOCIATES Real Estate Appraisers and Consultants Reconciliation 34 Comparable Site Sale 2 Location Information Location 398 E 18th Street Greeley, CO Parcel Number: 09619300085 Sales Information Sale Date Site Size Sales Price Price/Square Foot Grantor Grantee Recording Financing Conditions of Sale Intended Use Physical Information Shape Topography Frontage Utilities Confirmation Remarks October 13, 2015 206,910 square feet (4.75 acres) $135,000 $0.65 Venegas, Zeferina Ulta Energy Solutions, LLC 4151220 Cash to Seller Arms -Length Industrial development Rectangular Level East 1$..en Street All at site W. Lundquist (Shannon & Associates) Sam Lopez of Pro Realty, County Records T. 's is the sale of a 4.75 -acre site on East 18th street which is also the U.S. Highway 34 Business Route. It is located in a mixed arca with residential, commercial and industrial uses. SHANNON & ASSOCIATES Real Estate Appraisers and Consultants Reconciliation 35 Comparable Site Sale 3 Location Information Location North U.S. Highway 85 Bypass Greeley, CO Parcel Number: 080332400002 Sales Information Sale Date February 15, 2015 Site Size 1,664,733 Square Feet (38!217 acres) Sales Price $1,300,000 Price/Square Foot $0.78 Grantor Wake, LLLP Grantee Extraction Oil & Gas, LLC Recording 4080977 Financing Cash to Seller Conditions of Sale Arms -Length Intended Use Industrial development Physical Information Shape Irregular Topography Level Frontage U.S. Highway 85 Bypass Utilities All utilities at site Confirmation W. Lundquist (Shannon & Associates) Bruce Johnson of Wake LLLP, County Records Remarks This the sale of an irregular shaped site on the north edge of Greeley. It has frontage on the U.S. Highway 85 Bypass. SHANNON & ASSOCIATES Real Estate Appraisers and Consultants Reconciliation 36 Comparable Site Listing 4 Location Information Location 2139 East Stn Street Greeley, CO Parcel Number: 096103000061 Sales Information Sale Date ACTIVE LISTING Site Size 486,130 Square Feet (11.16 acres) Listing Price $972,259 Price/Square Foot $2.00 Grantor Gap, LLC Grantee Not Sold Recording Not recorded Financing Cash to Seller Conditions of Sale Arms -Length Intended Use Industrial development Physical Information Shape Irregular Topography Level Frontage East 8th Street Utilities At site Confirmation W. Lundquist (Shannon and Associates) with Mark Bradley of Realtec, County Records Remarks This is the active listing of an industrial site on the north side of east 8th Street. It is one of two adjacent sites listed by the same owner. It backs to the Greeley Weld County Airport and there is potential for through -the -fence access to the airport runway. This would have value to some potential purchasers. SHANNON & ASSOCIATES Real Estate Appraisers and Consultants Reconciliation 37 Comparable Land Sales Map Greel eyJunctian Gorrnp.arable 3 1 t16TH-SIT jiff Jackson Field J2.flTH ST Comparable I Subject Property Sunrise Park Comparable 2 Listing 4 Darling Renoir treeley-Weld County SHANNON & ASSOCIATES Reconciliation Real Estate Appraisers and Consultants 8 Comparable Land Sale Adjustment Table 1128 E. 8th Street Greeley, CO Shannon and Associates, Real estate Appraisers and Consultants, February 2016 Subject Land Sale 1 Summary of Unadjusted Sale Prices Summary of Adjusted Sale Prices Low per Square Foot $0.65 Low per Square Foot $0.78 High per Square Foot $2.00 High per Square Foot $1.71 Land Sale 2 Land Sale 3 Land Sale 4 Location/Name City 1128 E. 8th Street Greeley, CO NE Corner of 8th St. & Balsam Ave. Greeley, CO 398 E. 18th Street Greeley, CO North Hwy 85 Bypass Greeley, CO 2139 E 8th Street Greeley, CO General Data Date of Value/Sale Sale Price Site Area (Square Site Area (Acres) Price per Grantor Grantee Reception Feet) Square Foot Number November 5, 2015 Subject 318,424 7.31 Subject Subject Subject N/A Jun -14 $2,000,000 1,562,062 35.86 $1.28 2025 Investments, LLC Global Assets Recovery, LLC 4027207 Oct -15 $135,000 206,910 4.75 $0.65 Venegas, Zeferina Ulta Energy Solutions, LLC 4151220 Feb -15 $1,300,000 1,664,733 38.217 $0.78 Wake LLLP Extraction Oil & Gas, LLC 4080977 ACTIVE LISTING $972,259 486,130 11.160 $2.00 Gap, LLC Not Sold Not Recorded Economic Adjustments Description Adjustment Adjustment Adjustment Adjustment Property Rights Financing Conditions of Sale Date of Sale Adjusted Sale Price/SF Fee Simple Subject Subject Subject Subject Fee Simple Cash to Seller Market Jun -14 $1.28 Fee Simple Cash to Seller Market Oct -15 $0.65 Fee Simple Cash to Seller Market Feb -15 $0.78 Fee Simple Cash to Seller Market ACTIVE LISTING -10.00% $1.90 Physical Adjustments Location Access Size Zoning Utilities Misc. Misc. Good Good 318,424 I -M (Industrial Medium Intensity) Typical Good Good 1,562,062 I -M Typical 10% Good Average 206,910 Agricultural Typical 10% 10% Good Average 1,664,733 Typical 10% 10% Good + (Borders Airport) Good 486,130 I -M Typical -10% Total Adjustment Indicated Value per Square Foot 10% $1.41 SHANNON & ASSOCIATES Reconciliation Real Estate Appraisers and Consultants 20% $0.78 39 20% $0.94 -10% $1.71 Comparable Land Sales Discussion All of the comparables are industrial sites located in east Greeley. Three closed sales and one listing were used. There have been few sales in recent years, comparable data is marginal and requires significant judgment. These sales were the most comparable data available. Comparable Land Sale 1 Comparable 1 is a 1,562,062 square foot (35.86 -acre) site located on the north side of East 8th Street. The property sold in June of 2014 for $2,000,000 which equates to $1.28 per square foot. Comparable 1 requires the following adjustments: • A 10% upward adjustment for size as larger sites tend to sell for less per square foot than smaller sites. Overall this comparable requires a net upward adjustment of 10% and indicates a value of $1.41 per square foot for the subject property. Comparable Land Sale 2 Comparable 2 is the sale of a 206,910 square foot (4.75 -acre) site on the north side of East 18th Street. The property sold in October of 2015 for $135,000 which equates to $0.65 per square foot. Comparable 2 requires the following adjustments: • A 10% upward adjustment for access as it is not directly on a highway. • A 10% upward adjustment for zoning as it is zoned Agriculture Over all this comparable requires a net upward adjustment of 20% and indicates a value of $0.78 per square foot for the subject property. Comparable Land Sale 3 Comparable 3 is the sale of a 1,664,733 square foot (38.217 -acre) site located in northeast Greeley. It sold in February of 2015 for $1,300,000 which equates to $0.78 per square foot. This comparable requires the following adjustments: • A 10% downward adjustment for access. Although it has frontage on the U.S. Highway 85 Bypass it is accessed from a side street. • A 10% upward adjustment for size as larger sites tend to sell for less per square foot than smaller sites. Overall this comparable requires a 20% upward adjustment and indicates a value of $0.94 per square foot for the subject property. Comparable Listing 4 Comparable 4 is the active listing of an industrial site in east Greeley. It is listed for sale at $972,259 which equates to $2.00 per square foot. Before making physical adjustments the following economic adjustment was made: SHANNON & ASSOCIATES ' econciliation Page 40 Real Estate Appraisers & Consultants • A 10% downward adjustment for being an active listing. Sale prices are typically adjusted down from the listing price. This comparable requires the following physical adjustments: •A 10% downward adjustment for location as it borders the Greeley Weld County Airport and has the potential for through -the -fence access to the runway. Overall this comparable requires a 10% downward economic adjustment and a 10% downward physical adjustment and indicates a value of $1.71 per square foot for the subject property. Land Sales Summary The three comparables and one listing are the best data available and were used in the Comparable Land Sales Comparison Table. Land Sales Adjustment Table suggests a per square foot range of $0.78 to $1.71 per square foot. Comparables 1 and 4 are most similar in terms of location and are located in the same flood zone. Comparable 4 is similar in terms of size. Most weight is given to Comparables 1 and 4. Based on these considerations our opinion of unit value for the subject is $1.60 per square foot. The market value by the sales comparison approach, for the land in fee simple estate, for November 5, 2015 is calculated below. 318,424 Square Feet X $1.60 per Square Foot = $509,478 Round To $509,000 SHANNON & ASSOCIATES ' econciliation Page 41 Real Estate Appraisers & Consultants Marshall Is aluation Service Replacement Cost Worksheet Tndustriai 1128 E. 8th Street Greeley, CO Shannon and Associates, Real estate Appraisers and Consultants, February 2016 Average Quality Class D Warehouse (Building 1) Section 14, Page 26 4,548 Square Foot Warehouse Base Cost per Square Foot: (Average Quality) Multiplied by Factors for: Floor Area -Perimeter Multiple : Story Height (14 feet): Location Modifier: Current Cost Update: 1.0000 1.0000 0.9600 1.0300 COMBINED MODIFIER Adjusted Base Cost per Square Foot: Estimated Reproduction Cost New of the Building 4,548 Square Feet X $32.22 = Plus: Heating 4,548 SF X $2.08 per SF = $9,460 Partial concrete floor 2,274 SF X $4.96 per SF= S11,279 Total Estimated Reproduction Cost New of Building LESS DEPRICIATION Physical (Modified Age/Life Method) Actual Age: Effective Age: Total Economic Life: 4,548 SF Warehouse $32.58 X 0.9888 $32.22 $146,514 Basic Building $146,514 520,739 Total Additions $20,739 48 Years 20 Years 45 Years Effective Age/Total Economic Life = Physical Depriciation (20 years/45 years)Rounded to: = 44.44% Functional Obsolescence (None) = 0.00% External/Locational Obsolescence (None) = 0.00% Total Accrued Depriciation Total Estimated Cost of Building After Depriciation $74,335 50 So $167,253 (574,335) $92,918 Average Quality Class D Warehouse (Building 2) Section 14, Page 26 4,548 Square Foot Warehouse Base Cost per Square Foot: (Average Quality) Multiplied by Factors for: Floor Are a -Pe rimete r M ultiple : Story Height (16 feet): Location Modifier Current Cost Update: 1.0000 1.0410 0.9600 1.0300 COMBINED MODIFIER Adjusted Base Cost per Square Foot: Estimated Reproduction Cost New of the Building 4,548 Square Feet X $33.54 = Plus: Total Estimated Re production Cost New of Building LESS DEPRICIATION Physical (Modified Age/Life Method) Actual Age: Effective Age: Total Economic Life: 48 Years 20 Years 45 Years Effective Age/Total Economic Life = Physical Depriciation (20 years/45 years )Rounded to: _ Functional Obsolescence (None) _ External/Locational Obsolescence (None) = Total Accrued Depriciation Total Estimated Cost of Building After Depriciation 4,548 SF Warehouse $32.58 Basic Building X 1.0293 $33.54 S152,521 S152,521 SO Total Additions SO 44.44% 0.00% 0.00% $67,7$7 $0 $0 $152,521 ($67,787) $84,734 SHANNON & ASSOCIATES ' econciliation Real Estate Appraisers & Consultants Page 42 Average Quality Class D Warehouse (Building 3) Section 14, Page 26 4.548 Square Foot Warehouse BaseCost per Square Foot: (Average Quality) Multiplied by Factors for: Floor Are a -Pe rime to r Multiple: Story Height (16 le et): Location Modifie r: Current Cost Update: COMBINED MODIFIER Adjusted Base Cost per Square Foot: Estimated Reproduction Cost New of the Building 4,548 Square Feet X Plus:. Total Estimated Reproduction Cost New of Building LESS DEPRICIATION Physical (Modified Age/Life f l ?mod) Actual Age : Effective Age: Total Economic Life: $33.54 = 4,54.8 SF Warehouse $3238 00 ll f) 00 X 1.0293 $33.54 $152,521 Basic Building $152,521 $0 Total Additions $0 1.00 1.0410 0.96 1.03 48 Years 20 Years 45 Years Effective Age/Total Economic Life = Physical Depriciation (20 years/45 years)Rounded to: Functional Obsolescence (None) External/Locational Obsolescence (None) Total Accrued De priciation Total Estimated Cost of Building After Depriciation 44.44% 0.00% 0.00% • $67,787 $0 $0 Si 52,521 ($67,787) $84,734 Average Quality Class D Warehouse (Building 4) Section 14, Page 26 4,548 Square Foot Warehouse Base Cost per Square Foot: (Average Quality) Multiplied by Factors for: Floor Are a -Pe rimete r Multiple : Story Height (16 feet): Location Modifier: Current Cost Update: COMBINED MODIFIER Adjusted Base Cost per Square Foot: Estimated Reproduction Cost New of the Building 4,548 Square Feet X Plus:. Total Estimated Reproduction Cost New of Building LESS DEPRICIATION Physical (Modified Age/Life Method) Actual Age: Effective Age: Total Economic Life: $33.54 4,548 SF Warehouse $32.58 lit) (11) ll[) X 1.0293 $33.54 $152,521 Bask Building $152,521 $0 Total Additions $0 1.00 1.0410 0.96 1.0 3 48 Years 20 Years 45 Years Effective Age/Total Economic Life = Physical Depriciation (20 years/45 years)Rounded to: Functional Obsolescence (None) External/Locational Obs Dies ce nce (None ) Total Accrued Depriciation Total Estimated Cost of Building Atter Depriciation 44.44% 0.00% 0.00% $67.787 $0 $0 $152,521 ($67,787) $84,734 SHANNON & ASSOCIATES ' econciliation Real Estate Appraisers & Consultants Page 43 .v e rage Quality Class C) Warehouse (Building 5) Section 14, Page 26 4,548 Square Foot Warehouse Base Cost per Square Foot: (Ar erage Quality) Multiplied by Factors for: Floor Area -Perimeter Multiple: Story Height (16 feet): Location Modifier: Current Cost Update: CO MI BINED MODIFIER Adjusted Base Cost per Square Foot: Estimated Reproduction Cost New of the Building 4,548 Square Feet X Plus: Concrete Floor 4,548 SF X $4.96 per SF Total Estimated Reproduction Cost New of Building LESS DEPRICIATION Physical (Modified Age/Life Method) Actual Age: Effective Age: Total Economic Life: $33.54 1.0000 1.0410 0.9600 1.0300 $22,558 $22,558 48 Years 20 Years 45 Years Effective Age/Total Economic Life = Physical Depriciation (20 years/45 ye ars)Rourule (I to: Functional Obsolescence (None) External/Locational Obsolescence (None) Total Accrued Depriciation Total Estimated Cost of Building After Depriciation 4,548 SF Warehouse $32.58 44.44% 0.00% 0.00% X 1.0293 $33.54 $152,521 Basic Building $152,521 Total Additions $22,558 $77,813 $0 $0 $175,079 ($77,813) $97,266 Average Quality Class D Warehouse (Building 6) Section 14, Page 26 4,548 Square Foot Warehouse Base Cost per Square Foot: (Average Quality) Multiplied by Factors for: Floor Are a -Pe rime to r Multiple: Story Height (16 feet): Location Modifier: Current Cost Update: COMBINED MODIFIER Adjusted Base Cost per Square Foot: Estimated Reproduction Cost New of the Building 4,548 Square Feet X Plus: Total Estimated Reproduction Cost i\e�t of Building LESS DEPRICIATION Physical (Modified Age/Life Method) Actual Age: Effective Age: Total Economic Life: 1.0000 1.0410 0.9600 1.0300 S33.54 = 48 Years 20 Ye ars 45 Years Effective Age/Total Economic Life = Physical Depriciation (20 years 45 ye ars )Rounded to: Functional Obsolescence (None) External/Locational Obsolescence (None) Total Accrued Depriciation Total Estimated Cost of Building After Depriciation 4,548 SF Warehouse $32.58 X 1.0293 $33.54 $152,521 Basic Building $152,521 $0 fatal Additions $0 44.44% 0.00% 0.00% a6i7,787 $0 $0 $152,521 ($67,787) $84,734 SHANNON & ASSOCIATES ' econciliation Real Estate Appraisers & Consultants Page 44 Average Quality Class D Home Section 12. Page 25 1,428 Square Foot Home Base Cost per Square Foot: (Average Quality) M ultipled by Factors for: Floor Area -Perimeter Multiple: Story Height: Location Modifier: Current Cost Update: 1.0000 1.0000 0.9600 1.0300 COMBINED MODIFIER Adjusted Base Cost per Square Foot: Estimated Reproduction Cost New of the Building 1,428 Square Feet X $71.16 = Plus: Total Estimated Re production Cost New of Building LESS DEPRICIATIO N Physical 01 odified Age/Life Method) Actual Age: Effective Age: Total Economic Life: 126 Years 30 Years 60 Years Effective Age /Total Economic Life = Physical Depriciation (2 years/45 years)Rounded to: Functional Obsolescence (None) External/Locational Obsolescence (None) Total. Accrued Depriciation Total Estimated Cost of Building After De priciation 411. 1,428 SF Home $71.97 X 0.9888 $71.16 $101,622 Basic Building $101,622 $0 Total Additions $0 50.00% 0.00% 0.00% $50,811 $0 $0 $101,622 ($50,811) $50,811 Average Quality Class D Garage Section 12, Page 35 704 Square Foot Garage Base Cost per Square Foot: (Average Quality) Multiplied by Factors for: Floor Area -Perimeter M ultiple: Story Height (8 feet): Location Modifier: Current Cost Update: 1.0900 1.0900 0.9600 1.0300 COMBINED MODIFIER Adjusted Base Cost per Square Foot: Estimated Reproduction Cost New of the Building 704 Square Feet X $20.43 = Pius: Total Estimated Reproduction Cost New of Building LESS DEPRICIATIO N Physical (M o difie d Age /Life M e tho d) Actual Age: Effective Age: Total Economic Life: 80 Years 30 Years 60 Years Effective Age/Total Economic Life = Physical Depriciation (30 years/45 years)Rounded to: Functional Obsolescence (None) External/Locational Obsolescence (None) Total Accrued Depriciation Total Estimated Cost of Building After Depriciation 704 SF Garage $20.66 X 0.9888 $20.43 $14,382 Basic Building $14,382 $0 Total Additions $0 50.00% 0.00% 0.00% $7,191 $0 $0 $14,382 ($7,191) $7,191 SHANNON & ASSOCIATES ' econciliation Real Estate Appraisers & Consultants Page 45 Depriciated Cost of Budding 1 Depriciated Cost of Building 2 Depriciated Cost of Building 3 Depriciated Cost of Building 4 Depriciated Cost ofBuilding 5 Depriciated Cost ofBuilding 6 Depriciated Cost of House Depriciated cost of Garage TOTAL Plus Site Improvements (Contributory Value) Site Iprrovements (Water Taps, M is c.) Subtotal of Site Improvements Subtotal of B uildings (De priciate d) and site improvements Plus Estimated Value of Land 318,424 Square feet X Total Cost Prior to Entrapeneural ural Incentive Entrape ne ural Incentive Total Indicated \'al a e of B wilding, Site impro vi' me nts and Land $75,000 Per Square Foot $145.59 $92,918 $84,734 $84,734 $84,734 $97,266 $84,734 $50,811 $7,191 $587,123 $75,000 $662,123 $1.60 Per Square Foot $509,478 Rounded To: $509,000 $1,171,123 $0 $1,171,123 Rounded to $1,171,000 Based upon the data and analysis presented within this appraisal, the subject property's indicated Market Value in "Fee Simple", as of November 5, 2015 is: One Million One Hundred Seventy One Thousand Dollars $1,171,000 Respectfully Submitted, Shannon & Associates 9 Donald J. Shannon, MAI, SRA CO-CG01313438, 12/31/17 WY -78, 09/04/17 Fr William E. Lnndqui , Associ e CO-CG40►0051 7, 12/1 /17 WY -1088 3/2/17 SHANNON & ASSOCIATES Real Estate Appraisers & Consultants econciliation Page 46 Addendum Qualifications SHANNON & ASSOCIATES Real Estate Appraisers & Consultants Donald J. Shannon, MAI, SRA Professional & Appraisal Institute Affiliations Appraisal Institute SRA and MAI Member, International Right of Way Association Member Colorado Certified General Appraiser # CG0I 313438 Wyoming Certified General Appraiser No. WY -78 Appraisal Institute Past or Present Committees or Offices: Colorado Chapter: Admissions, Director, Secretary -Treasurer, Vice President, President Region II: Review & Counseling Committee, Candidates Guidance Chair, Regional Representative, Regional Director, Regional Chair National: Candidates Guidance Chair, Teaching Faculty, and National Director Education Bachelor of Science in Marketing & Economics from University of Missouri Over 200 technical real estate appraisal courses and seminars including: • Discounted Cash Flow Analysis • Fair Lending • Market Analysis • Business Valuation • Investment Analysis • Reviewing Appraisals • Subdivision Analysis • Appraisal of Leaseholds • Uniform Standards of Professional Practice • Appraisal of Partial Interest • Feasibility Analysis and Highest & Best Use • Appraisal Consulting • Mortgage Fraud • Standards for Federal Acquisitions (Yellow Book) • Eminent Domain • Green Building Certificate Program • Distressed Commercial Real Estate (Colorado State University) • Livestock Ranches • Valuing Green Buildings - Appraisal Institute Appraisal Practice Owner/Manager of Shannon & Associates, Real Estate Appraisers and Consultants Independent real estate appraiser since 1971 completing a wide variety of appraisal assignments including: • Office Buildings • Health Clubs • Motels & Hotels • Golf Courses • Shopping Centers • Multi -Family • Industrial Buildings • Education Facilities • Warehouse Buildings • Mobile Home/R.V Parks • Medical & Surgical Centers • Farms & Ranches • Hospitals • Guest Ranches • Event Centers • Appraisal Reviews • Single & Multi -Tenant Retail • Mountain Resorts • Self -Storage • Rural Tracts • Development Land • Subdivisions • Eminent Domain • Conservation Easements • Leaseholds and Partial Interest • Feasibility Analysis • Real Estate Counseling • Qualified Litigation Support • Solar Building Specialized in Passive Solar homes in the early 1980s and built a solar home in 1985. Owns and manages various apartments, office buildings, shopping center and a service station. 1986 appraisal and subsequent court testimony in the LaPlatta Electric v. Cummris case before the Colorado Supreme Court resulted in a major policy change in condemnation law. SHANNON & ASSOCIATES 215 W Oak Street, Suite 501, Fort Collins, CO 80521 Real Estate Appraisers & Consultants Phone: (970) 482-1010 Don@shannonmai.com Colorado Department of Regulatory Agencies Division of Real Estate Donald Joseph Shannon Certified General Appraiser CG.OO1 3 License Active er License Status Expiration Verify this license at http: / /dora.cotorado. ovidre 8-44. L-6:1) Director: Marcia Waters Licens Signature �c_f ETZL-Lnu rEPLEPLEEPLE , riEE �rJ�rs'rJ- Lr 55 X72,7' 21�r�rJ�err cPEP n rJP 1, ' rffEE IEPLIE e l�r..:J� E ldancid iclO r i IO JE License Number 78 CERTIFIE DONALD J MUNN'N CERTIFIED GENER.Q.I. APPRAISER AS PROVIDED FOR. BY THE LAWS 0 SHANNON . ASSOCIATES 215 SY OAK ST. STE $01 El COLLINS. CO SO525 STATE OF WYOMING NON TRANSFERABLE REAL ESTATE APPRAISER PERMIT Al DIMING Emu .. .c OO .11; S. do Issued: 09/05/2015 Expires: 09/04/2017 AUTHORIZED BY THE WYOMING CERTIFIED REAL ESTATE APPRAISER BOARD WITNESS (' ■ HAND AND THE OFFICIAL SEAL. AT CHEYENNE, Crilf restrike Nicole Novotny Smith Executive Director .IEP� LIEI ELIMEJ�rJEMPLO e PLIM�LIMPLIthaPS ESOMPrI PJEFIL e-2-27rMPLrMrJE PEPEPEEPLPEESOI ��.kr�r.Prc501J�rJVrElr. IPS3r. DLO ESEMIEFOMPErPEMPrr�ro ES00521022r�rJ0_ SHANNON Si ASSOCIATES Real Estate Appraisers & Consultants 215 W Oak Street, Suite 501, Fort Collins, CO 80521 Phone: (970) 482-1010 Don@shannonmai.com William E. Lundquist Professional License Colorado Certified General Appraiser # CG40005157 Wyoming Certified General Appraiser #1088 Professional Experience Associate Appraiser: Shannon & Associates, Fort Collins, Co; 3/2007 -Present 9 Commercial Real Estate Appraisals, Rural Farm & Ranch Appraisals Real Estate Appraiser; Real Yalu, Inc.; Greeley, CO; 1997 to 2007 • Real estate appraisals; single family, residential income and residential acreage appraisals; vacant land, agricultural, light commercial and subdivision development appraisals; review appraisals of the same. Customer Service Representative; R.A. Warkentin Construction; Greeley, Co; 1994-1997 • Customer follow-up, mitigating customer complaints. estimating construction extras; small remodeling projects; managed completion phase of custom home construction. Broker Associate; Wheeler Realty Co.; Greeley, CO; 1991-1994 • Residential and commercial real estate and new home sales, land development and market analysis; Land development Sales Associate; Legend Realty; Aurora, CO; 2/1991-8/1991 • Real estate sales, market analysis Carpenter/Supervisor; R. A. Warkentin Construction; Greeley CO: 1986-1991 • Managed framing and finish crew for high -end custom home construction Contractor/Homebuilder; Neligh, NE; 1980-1986 • Residential and agricultural construction and remodeling Education University of Colorado Boulder, CO; 1996-2002 Basic Appraisal Principals & Procedures Appraisal Standards and Ethics Residential Case Studies Small Residential Income Properties Reporting, Reviewing and Analyzing Residential Appraisals Appraisal Principals and Advanced Applications Income Capitalization Commercial Case Studies Aims Community College Greeley, CO; 1995-1996 Liberal Arts Aims Community College Greeley, CO; 1988-1989 Real Estate Practice and Law Colorado Real Estate Contracts Real Estate Closings and Trust Accounts Professional Affiliations MAI Candidate of the Appraisal Institute Associate Member of the American Society of Farm Managers & Rural Appraisers Real Estate Finance Advanced Real Estate Law Central Technical Community College Hastings, NE; 1977-1980 Construction Technology Appraisal Institute General Appraiser Income Approach I General Appraiser Income Approach II Small Hotel/Motel Valuation Subdivision Analysis Valuation of Conservation Easements General Market Analysis & Best Use Conservation Easement Appraisal Colombia Institute Eminent Domain Under Yellowbook ASFMRA Rural Appraisal Practices and Procedures SHANNON & ASSOCiATES 215 W Oak Street, suite 501, Fort Collins, co 80521 Real Estate Appraisers & Consultants Phone: (:970) 482-1010 Bi1lLundquist@juno.com William E. Lundquist William, E Lundquist 215 Y'! Oak St SuiTte 501 Fort Calms„ CO 60521 kehtiottut eitlaite44) Director: Marcia Waters State of Colorado Department of Regulatory Agencies Division of Real Estate License #: C .M40005157 Status: Active Expires: 12/31/2017 For the most up to date information regarding this credential, visit http: f /dara.colaradaagov/ire 0 i! IT)110Th i _ r ITAEI _ 'i rJ It I _ r -pi _ r -1 _ rJ I dl —a EMLIJ _ i.l-rJ i:L cJ rli�l�i ti r��e�e-fr�c_E3 c_ PrJ(�r�r�rJ�r�r_.r� (Pr_PrJPr�OPr�tEPLEErc_1 r. LPr-J_ _l�ryl� i�.11___ _,;l�C I_C ar [_1"[JElrSOr_!c1°aC1""PC1zEEPEPtIO[PPESOGMPLE I NON TRANSFERABLE �� J 0 k i r* rai Pi -J 1 2 i 5 RI License Number 1088 STATE OF WYOMING CERTIFIEDESTATEL APPRAISER PERMIT rj Issued: 03/03/2015 Expires: 0/102/2017 INILLIAM E LU D UIST • 5:i CERTIFIED GENERAL, APPRAISER i AS PROVIDED FOR BY THE LAWS OF W : -.__ SHANNON + iASSOCIATES�I: !FI-IORIZEE) BY THE WYOMING CERTIFIED _a4 5 \V OAK ST...T F 01 . ' L F: T TF APPPAIS17.1110ARD w1T Ts MYii ,. i ... F:iHI iii I4-1:4erliksitrit. R. I (j C Nicole Novotny Smith. Executive Director 0 re -rd �rnr ErrropErriar rndier lcrar urz is PEPLEPEPLM :SrJM �C_PLE-c117 Eldrr _ PLEP J`r J7] _ I J _ IEJ PE TEIT] _ i !fl 3- n PL P RA 1 Tc�1 r i I r r LEFIL r ILIMEEPLIOndEir21. SHANNON & ASSOCIATES 215 W Oak Street, Suite 501, Fort Collins, CO 80521 Real Estate Appraisers & Consultants Phone: (970) 482-1010 Bil1Lundquist ajunoicom Addendum Engagement Letter SHANNON & ASSOCIATES Real Estate Appraisers & Consultants APPRAISAL AGREEMENT DATE OF AGREEMENT CLIENT NAME CLIENT COMPANY ADDRESS CITY, STATE, ZIP PHONE F tEMAIL/CELL February 9, 2016 PARTIES TO AGREEMENT Mr. Gerald Davis Ed Duggan Estate 1236 6 E. 27th St Tulsa, OK 74114 918-289-1052 Jdavis123697@grnail.com APPRAISER R NAME APPRAISER COMPANY ADDRESS CITY, STATE, ZIP' PHONE FAX Donald J. Shannon Shannon & Associates 215 W.Oak St., Suite 501 Fort Collins, CO 80521 970-482-1010 970-221 4 444 The Client hereby engages the Appraiser to complete the following appraisal assignment: PROPERTY IDENTIFICATION See attached Addendum for property details. PROPERTY TYPE See attached Addendum for property details INTEREST VALUED Fee Simple INTENDED USER(S) The Estate of Ed Duggan INTENDED USE To determine Market Value of the real estate owned by Ed Duggan for estate tax purposes. TYPE OF VALUE Market Value as defined by the appraisal requirements pursuant to FIR.R.EA. OPINION OF VALUE It should be understood that this is an Opinion of Value, based upon the data available to the Appraiser/s, not a guarantee or warranty of value. HYPOTHETICAL CoNDrnoNs1ExTRAoarnN4utY ASSUMPTIONS None anticipated SHANNON & ASSOCIATES Real Estate Appraisers & Consultants Page 1 of 12 APPRAISAL AGREEMENT SCOPE OF WORK Site Visit The Appraiser shall make an interior and exterior inspection of the subject property. Client or Client's designated agent are encouraged to be present at the time of inspection. Client shall make all reasonable effort to provide access in a timely manner to the Appraiser for inspection, and Appraiser shall make all reasonable effort not to unduly disturb the business(s) currently using the subject property, if any. Valuation Approaches The appraisal shall use the Sales Comparison and Income (as appropriate) Approaches to Value to develop a credible opinion of value. Report Format The Appraisal Report shall be prepared in a Narrative format. Delivery Date March 2, 2016 Delivery Method The Appraisal Report shall be delivered to the Client by email. Hard copies are available upon request. Number of Copies The Appraiser shall provide the Client with 2 copies of the appraisal report, upon request. Payment to Appraiser The total fee for this appraisal assignment is $31,500. A retainer of $15,750 is required to begin work on this assignment. The remainin amount of $15,750 shall be due upon delivery of the completed appraisal report to the Client. Proposed Improvements is Not Applicable If the property appraised consists of proposed improvements, Client shall provide to the Appraiser all plans, specifications, and documentation sufficient to identify the extent and character of the proposed improvements. Properties Under/Contract for Sate - Not Applicable If the property is currently under contract for sale, the Client shall provide to appraiser a copy of said contract including all addenda. SHANNON & ASSOCIATES Page 2 of 12 Real Estate Appraisers & Consultants APPRAISAL AGREEMENT REQUIRED INFORMATION FOR ASSIGNMENT Client shall provide to Appraiser the following information necessary for the completion of this assignment (if available and appropriate): • Preliminary title report or title policy Agreements of Sale or Options to Buy (current and/or during the last three years) • Prior/current marketing information • Legal Description of the property • Site plan or survey • Plans and specifications for all improvements • Square footage breakdown for overall building, individual units/bays, and common areas. • Personal property inventory if applicable to appraisal and available. • Environment audits and studies disclosing any wetlands, hazardous wastes or other environmental conditions • Date of completion, detail phasing and or staging plan for any proposed improvements • Detailed line item construction costs • Construction cost to date and costs to complete • Detailed rent roll and copies of leases. Please identify any tenants who have initiated discussions to renew, terminate or renegotiate/modify their lease(s), or who have give notice to terminate. Proposed terms for any re-neotiations should be revealed. • Provide letters of intent to lease or any outstanding lease proposals that have a reasonable likelihood of being finalized into executed leases. • Contact information for leasing agent and/or management company • Leasing brochures and/or any marketing materials, if available. CONFiDENTIALITY Appraiser shall not provide a copy of the appraisal report to or disclose the results of the appraisal prepared in accordance with this Agreement with any party other than the Client, without the Client's written authorization, except as stipulated in the confidentiality section of the ethics rule of the Uniform Standards of Appraisal Professional Appraisal Practice. SHANNON & ASSOCIATES Page 3 of 12 Real Estate Appraisers & Consultants APPRAISAL AGREEMENT CHANGES TO THE AGREEMENT Any changes to the assignment as outlined in this agreement must be made in writing and signed by the Client and the Appraiser. Changes will be subject to an additional fee which shall be specified in the written agreement. TEsTIMorw AT COURT OR OTRER PROCEEDINGS -Unless otherwise stated in this Agreement, Client agrees that Appraiser's assignment pursuant to this Agreement shall not include the Appraiser's participation in or preparation for, whether voluntarily or subject to subpoena, any oral or written discovery, sworn testimony in a judicial, arbitration or administrative proceeding, or attendance at any judicial, arbitration, or administrative proceeding relating to this assignment. If preparation and /or testimony for any of the above or similar proceedings is required it is mandatory that preparation time and estimated time for testimony is to be paid in advance before the court proceedings to avoid any appearance of advocacy. Fees for additional Consultation, Research and Meetings outside the scope of the Agreement: Don Shannon 00/hour; Court preparation and testimony $250/hour Associate $150 -$175/hour; Court preparation and testimony $200/hour APPRAISER INDEPENDENCE Appraiser cannot and shall not agree to provide an opinion of value that is contingent on a predetermined amount. Appraiser cannot guarantee the outcome of the assignment in advance. Appraiser cannot insure that the opinion of value developed as a result of this assignment will serve to facilitate any specific objective by the Client or others or to advance any particular cause. Appraiser's opinion of value will be developed competently and with independence, impartiality and objectivity. EXPIRATION OF AGREEMENT This agreement is valid only if signed by both. Appraiser and Client within 10 days of the Date of Agreement specified. GOVERNING LAW AND JURISDICTION The interpretation and enforcement of this Agreement shall be governed by the laws of the State of Colorado in which the Appraiser's principal place of business is located. SHANNON & ASSOCIATES Page 4 of 12 Real Estate Appraisers & Consultants APPRAISAL AGREEMENT No THIRD Psrnr BENEFICIARIES Nothing in this Agreement shall create a contractual relationship between the appraiser or the Client and any third party, or any cause of action in favor of any third party. This Agreement shall not be construed to render any person or entity a third party beneficiary of this Agreement, including but not limited to, any third parties identified herein. THE LIMIT OF LLssBILnv The limit of liability shall be no more than the remuneration received. USE OF EMPLOYEES OR INDEPENDENT CONTRACTORS Appraiser may use employees or independent contractors at appraiser's discretion to complete the assignment. Notwithstanding, the Appraiser shall inspect the subject property and sign the written appraisal report and take full responsibility for the services provided as a result of this Agreement. Real Estate Appraisers & Consultants APPRAISAL AGREEMENT APPRAISAL CONDITIONS 1 STANDARDS. The written report to be furnished by the Appraiser shall be addressed to the Client and shall comply with the professional and ethical standards of the American Institute of Real Estate Appraisers. 2. DEFINITION OF MARKET VALUE. The following or equivalent shall be the definition of market value in the final report: "The most probable price in cash, terms equivalent to cash, or in other precisely revealed terms for which the appraised property will sell in a competitive market under all conditions requisite to a fair sale, with the buyer and seller each acting prudently, knowledgeable, and for selfrinterest, and assuming that neither is under undue duress." 34 AUTHORIZATION AND DATA TO BE FURNISHED. Client authorizes the Appraiser to inspect the Property and agrees to furnish Appraiser with all pertinent data, which appraiser requests in connection with the Property. Client, if not owner of the Property, warrants that owner, or occupant, has been notified of this assignment and will be cooperative with the Appraiser unless otherwise noted herein. If special legal instructions are to be considered by Appraiser, the same are set forth above or are attached hereto and made a part hereof. The applicable statues or case law, which forms the basis for such instruction, shall be included herein or separately furnished to Appraiser. 4. COMPENSATION. Appraiser acknowledges receipt of the Retainer, the same to be credited against any and all amounts due Appraiser upon completion of this assignment. If the balance of compensation is to be paid by single payment, the same shall be available upon, or prior to, delivery of report. If the balance is to be payable on a periodic basis, the same shall be paid on submission of periodic statements, with final payment due upon, or prior to, delivery of the report. If compensation is to be paid on a periodic basis, Appraiser shall keep an accurate time record and furnish the same to client upon request. Appraiser's compensation is in no event contingent upon and shall in no event bear any relationship to the valuation to be reported. 5. COMPLETION TItVIE. Appraiser shall make all efforts to complete the report by the Delivery Date. The Delivery Date pertains solely to the report to be given to the Client and does not relate to any services pertaining to litigation. Completion time is specifically contingent upon Client supplying Appraiser with the items listed in this Appraisal Agreement. Any delay in providing these items shall extend the Delivery Date accordingly. 6. EXPENSES. If the property is outside Appraiser's normal operating area (Northern Colorado and Southern Wyoming), Client shall pay all reasonable business expenses incurred, 'including travel expenses, extraordinary job costs and reasonable subsistence costs. Said expenses shall be paid on submission of itemized statements therefore. 7. CANCELLATION. Client may at any time prior to the completion of Appraiser's services cancel this agreement by written notice to Appraiser. In such event client shall pay to Appraiser/Consultant, on presentation of a statement of work, compensation for all services rendered to the date of cancellation, together with all costs advanced in connection with said report prior to receipt of said notice. �. ADDITIONAL REPORT CDPIE. If the Client desires additional copies of the report, the same shall be furnished on payment of the $250 fee for additional copies. SHANNON & ASSOCIATES Real Estate Appraisers & Consultants Page 6 of 12 APPRAISAL AGREEMENT 9. LITIGATION. Litigation for the purpose of this agreement shall refer to all judicial, administrative and legislative proceedings and hearings, including pre-trial depositions, in which Appraiser may be required to testify, voluntarily or involuntarily, in relation to the above described property and appraisal services being rendered on account of thisagreement. Appraiser shall participate in. such proceedings and give such testimony providing client of the dates and times furnishes him with reasonable notice thereof. Appraiser shall be paid for the time or times of such testimony and for the time for the preparation for such testimony on an hourly basis. The terms of these litigation services will be set forth in a written agreement between Client and appraiser prior to the performance of any services related to litigation. In addition, Appraiser shall be paid all reasonable expenses relating to the Litigation and the preparation for the same which takes place outside the Appraiser's normal operating area (Northern Colorado and Southern Wyoming). Client shall pay such expenses upon receipt of statements for the same, and said statements shall to include an itemization of expenses on Client's request and to be submitted at intervals of not less than one month, 104 COLLECTION. All statements for fees and expenses shall be due within 30 days of the completion of the work by the Appraiser and the forwarding of a statement to the Client for said fees and expenses. Should payment in full of the amount due, as reflected on the Appraiser's) statement not be received within 30 days of the mailing of such statement, Client's account shall be deemed to be delinquent from date of billing. A late payment fee of 1.5% per month, or an ANNUAL PERCENTAGE RATE of 18%, with a $20.00 per month minimum, will be charged on all delinquent accounts. Should it be necessary for Appraiser to commence legal proceedings to the collection of the client's delinquent account, client agrees to submit to the jurisdiction of the Colorado Courts and Client agrees to pay Appraiser the actual costs of collection, plus reasonable attorney's fees incurred in connection with said collection proceedings. In addition, if Client is in default in payment of Appraiser's account, client agrees that Appraiser shall be entitled to a mechanic's lien upon the property made the subject of the appraisal. Such lien to be made, evidenced and enforced in the same manner as a mechanic's lien, all as provided in Article 22, Tide 38, Colorado Revised Statutes. 11. CONTINGENT AND LIMITING CONDITIONS OF THE REPORT. Any and all findings, predictions, assumptions, conclusions and the like contained in the report shall be Appraiser's professional opinion and are not assurances that future events or circumstances set forth therein will necessarily occur. Appraiser shall retain ownership of all reports and all original documentation, field notes, memoranda, data and the like made/assembled in and about the preparation of the report. No one other than Client may rely on or utilize the report without Appraiser's express written consent. 12. ENTITY. If the property to be appraised is owned or is hereafter acquired by an entity or combination of persons in which Client owns an interest; Client represents to Appraiser that Client has the authority to sign this agreement on behalf of such entity or persons. In the event that the Client signing this Appraisal Agreement is a partnership, corporation or any entity other than a sole proprietorship, the person signing for each entity specifically accepts sole personal responsibility for the charges contracted for it same should not be made by said entity. 11 The limit of liability shall be no more than the remuneration received. SHANNON a_ASSOCATES Real Estate Appraisers & Consultants Page 7 of 12 APPRAISAL AGREEMENT Assumptions and Limiting Conditions The market value estimate provided in this appraisal report is subject to the following assumptions and limiting conditions and to other such specific and limiting conditions as may be set forth by the Appraiser/s in this report. 1. The appraisal report to which this Appraisal Agreement pertains is intended to comply with the reporting requirements set forth under Standard Rule -2(b) of the Uniform Standards of Professional Practice for a Summary Appraisal Report. As such, it may not include full discussions of the data, reasoning, and analyses that were used in the appraisal process to develop the appraisers' opinion of value. Supporting documentation concerning the data, reasoning, and analyses is retained in the appraiser's file. 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 the unauthorized use of the 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 and documented by the Client and provided to the Appraiser. . The property shall be appraised free and clear of any or all liens and encumbrances unless otherwise stated and documented by the Client and provided to the Appraiser, 4. Responsible ownership and competent management are assumed unless otherwise stated and documented by the Client and provided to the Appraiser. 5. All engineering is assumed to be correct. Any plot plans and illustrative material that will be included in the report are included only to assist the reader in visualizing the property. The Appraiser has made no survey of the property. 6. It is ass, irned 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 engineering studies that may be required to discover them, 7. It is assumed that there is full compliance with all applicable federal, state, and local environmental regulations and laws unless otherwise stated and documented by the Client and provided to the Appraiser. 8. It is assumed that all applicable zoning and use regulations and restrictions have been complied with, unless a nonconformity has been stated, defused and considered by the Client and provided to the Appraiser. 9. 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 estimates to be included in the appraisal report are based. 10. 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 no encroachment or trespass unless otherwise stated and documented by the Client and provided to the Appraiser. SHANNON _& ASSOCIA'T'ES Page 8 of 12 Real Estate Appraisers & Consultants { APPRAISAL AGREEMENT 11. Any distribution of the valuation in the appraisal report between land and improvements applies only under the existing program of utilization. The separate valuations for land and building must not be used in conjunction with any other appraisal and are invalid if so used. 12. 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 ha7srdous waste and/or toxic materials. Such determination would require investigation by a qualified expert in the field of environmental assessment. The Appraiser has no knowledge of the existence of such materials on or in the property; however, they are not qualified to detect such substances. The presence of potentially hazardous materials may affect the value of the property. The 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. No responsibility is assumed for any such conditions, or for any expertise or engineering knowledge required to discover them. The Client is urged to retain an expert in this field, if desired. 13. Unless otherwise stated in the Appraisal Agreement, the subject property is being appraised without a specific compliance survey having been conducted to determine if the property is or is not in conformance with the requirements of the Americans with Disabilities Act. The presence of architectural and communication barriers that are structural in nature and would restrict access by disabled individuals may adversely affect the property's value, marketability, and/or utility. 14. Possession of the appraisal report or a copy to which this Appraisal Agreement pertains does not imply right of publication nor use for any purpose by any other than the Client, without the written consent of the Appraiser. The Client shall indemnify the Appraiser against third party law suits. 15. Neither all nor any part of the contents of the appraisal report shall be conveyed to the public through advertising, public relations, news, sales or any other media, without the written consent and approval of Appraiser, particularly as to the valuation conclusions, the identity of the Appraiser, or any references to the Appraisal Institute. 16. On all appraisals subject to satisfactory completion, repairs, or alterations, the appraisal report and value conclusion are contingent upon completion of the improvements in a good workmanlike manner and a completion inspection by the Appraiser. 17. Satisfactory road maintenance agreements, condominium declarations, and other pertinent agreements are assumed to be recorded. 18. The Appraiser assumes that financing, as may be discussed in the report, is available for potential purchasers. 19. It should be understood that an appraisal report provides an Opinion of Value, based upon the data available to the Appraiser, not a guarantee or warranty of value. $UANNQN � ASSC)CIATES Real Estate Appraisers & Consultants Page 9 of 12 APPRAISAL AGREEMENT Client hereby agrees to engage and the Appraiser agrees to perform the services specified herein. Client agrees to furnish the information requested and pay the compensation described. The undersigned hereby understands, accepts and agrees to the attached Conditions, Assumptions and Limiting Conditions, and Certification which are herewith made part of this Appraisal Agreement. Appraiser Signature Donald I. Shannon, MAI, SRA Printed Name February 9, 2016 Date Client Printed Name O 1 reir Date SHANNON Si ASSOCiATES Page 10 of 12 Real Estate Appraisers & Consultants Ins APPRAISAL AGREEMENT Certification Statement The Appraiser certifies that to the best of his knowledge and belief: 1. The Appraiser has no unreported present or prospective interest in the property that is the subject of this Appraisal Agreement. Further, the Appraiser has no personal interest or bias with respect to the subject matter or the parties involved. 2. The Appraiser has a. or has not _ provided services as an appraiser or in any other capacity, regarding the property that is the subject of this report within the three-year period immediately preceding acceptance of this assignment. . The Appraiser will personally inspect the property, bath inside and out, and make an exterior inspection of all comparable sales in the appraisal report to which this Appraisal Agreement pertai. To the best of the Appraiser's knowledge and belief, all statements of fact and information to be included in the appraisal report are true and correct, and the Appraiser will not knowingly withhold any significant information, subject to the stated assumptions and limiting conditions. 4. The appraisal report analyses, opinions, and conclusions will be developed, and the appraisal report will be prepared in conformity with the requirements of the Code of Professional Ethics and Standards. of Professional Appraisal Practice of the Appraisal Institute, which includes the Uniform Standards of Professional Appraisal Practice. 5. The use of the appraisal report will be subject to the requirements of the Appraisal Institute relating to review by its duly authorized representatives. 6. All conclusions and opinions concerning the real estate set forth in the appraisal report, to which this Appraisal Agreement pertains, will be prepared by the Appraiser whose signature appears on this appraisal report, unless indicated as "Review Appraiser". No change of any item in the appraisal report shall be made by anyone other than the Appraiser, and the Appraiser shall have no responsibility for any such unauthorized change. The Appraiser's compensation is not contingent upon the reporting of a predetermined value or direction in value that favors the cause of the client, the amount of the value estimate, the attainment of a stipulated result, or the occurrence of a subsequent event. Furthermore, the appraisal assignment was not based on a requested minimum valuation, a specific valuation, or the approval of a loan. The analyses, opinions, and conclusions to be included in the appraisal report are limited only by the reported Assumptions and Limiting Conditions and will be the Appraiser's personal, unbiased professional analyses, opinions, and conclusions. 9. No one will provide significant professional assistance to the Appraiser signing the report (If there are exceptions, the name of each individual providing significant professional assistance will be stated.) 10. As of the date of this agreement, Donald J. Shannon, MAI, SR A has completed the continuing education program of the Appraisal Institute. 11, None of the appraisers or staff of Shannon and Associates, the preparers of this report, have been sued by a regulatory agency or financial institution for fraud or negligence involving an appraisal report. 9 K Donald J. Shannofic MAI, SRA Colorado -C 01313438: 12/31/2017, Wyoming -WY -78: 9/4/2017 SHANNON & ASSOCIATES Real Estate Appraisers & Consultants Page 11 of 12 APPRAISAL AGREEMENT ADDENDUM - Property descriptions and the fee schedule is as follows: Windsor Homes 207 Birch Street ($600) 213 & 213 1/2 T. 6th Street ($800) 217 N. 6th Street ($600) Windsor Main Street Lot 113 E. Main St. • Highest and Best Use Issue Windsor Commercial Lot 212 N. 6th Street • Ouansett Building on 3 Lots • Analyze Highest and Best Use "As -Is" vs. Land Value Windsor 32758 Highway 257 • Old office building • Truck Scales • 3.36 acres with highway frontage and extensive railroad frontage • Analysis of Highest and Best Use Greeley 1645 1st Avenue • Two separate values • Land Only ($2,000) • Office and two metal buildings ($4,000) Greeley 1128 E. 8th Street • 7.31 acres with six metal buildings plus house and onsite parking leases • Separate value for the land without improvements 1140 E. 8th Street • 10.24 acres withoffice building and five truck wash out bays with mechanical equipment, a green house and two lagoons. $2,040 $1,500 $3,000 $4,000 $6,000 $5,000 $10,000 Total: $31,500 SHANNON & ASSOCIATES Real Estate Appraisers & Consultants Page 12 of 12 Addendum City and Regional Data SHANNON & ASSOCIATES Real Estate Appraisers & Consultants Northern Colorado Regional Analysis The subject property is influenced by market conditions in the Northern Colorado area, which includes Eastern Larimer and Western Weld Counties, The major cities within the region are Fort Collins, Loveland, Greeley and Windsor. There are two areas listed as the Fort Collins/Loveland Metropolitan Statistical Area (MSA) and the Greeley MSA by the federal government for ranking and statistical analysis purposes. Data was gathered from numerous sources and is updated through the 4th quarter of 2014 where possible. L '-.r 40 J , Y. an. ./ S EAMY . W .. YYYYW.W ®W W U. Y. OS BUY W. YYW.Y WWWW.•W W.....YYYYYY..Y.Y. W.W.W.W.W.W.W. .W. W .W. W .W.W.....W WYYYW.Y..W .W.W.WIYWY.W.W.W.W W1 •WYWY•WYW W YY anaanaan an W...S, S CUMMY W. W ;Cpalrn Int... N. •••.Y..WWW W.W SW= •• •W.W...■. Y..Y••—S • .Y.W.W WW • •Y•WYWW •••••Y••W W..WY W..1.••Y••YYY W.W.W. W.W.W.WW . Y..Y..Y..Y..V■•••••••••f•••..•• . Y..Y..Y..Y..Y•••■• ••■• ••■■ ••■• • •• W.W.W.Y..W.W W•W•W W.W.W. W •Y•.W W▪ ..WW.. WWP t : YE Y W ettk rd Francis E1fVarrera Q F B, = Cheyenne • UNSAYS W.Y.. W W W W.Y.. W.W= Y.. W .YW. W.W.W. W W W W W W W.W.W W an W a" W • WlW.W YYW.W ONSIMOSSIMIE IMMYSIMSYS • L•YW.W. C INNS ••.....•..Y.Y•..Y•.• CC •w•... 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Brighton •fr L Breckenridge �k - r Alma ikk MMMMMMMMMMMMMMM jet r 1 A Como I rte:---,_;.Leadville , Fairplay ii nom. • M orrison`'' 's t f }1 Buffalo Creek 4 jtGlendal e 'Littleton t. rJ -Goodrich • r4raiters) pect Valley • • • Wiggin }Watkins— _Bennett _Franktouirn L. 1L I I ''`Larkspur '-EI - i 'Tier 1 t r i�lUillard L Byerz."i s. Deer Trail Sterling r Atw ood <+ _,/ ��A L/ ♦4M erin.o ' r• 5 Cr:r r Plan .. T— — —— Woodrow _ • 1 6 U M P••1 OD .1.1 E) 12 18 24 30 Data Zoom -A SHANNON & ASSOCIATES REAL ESTATE APPRAISERS & CONSULTANTS NORTHERN COLORADO REGIONAL ANALYSIS (APRIL 201 l) Location Northern Colorado is the area between Denver and Cheyenne bisected by Interstate 25. It is a growing area for all types of people. The Fort Collins/Loveland and Greeley MA's are located in north central Colorado, east of the Rocky Mountains. Fort Collins is the predominate business and economic hub, while Greeley is the agricultural and manufacturing hub. Loveland is known for attracting artists and tourists to the region. Tourists travel through Loveland to reach Rocky Mountain National Park and Estes Park utilizing Loveland's major highway, US 34. The area has easy access to the central portions of the state including Denver and the Rocky Mountains. State Population Colorado's population has been steadily increasing over the past fifteen years. According to the last national census the state has grown from a total of 4,301,261 residents in 2000 to 5,026,916 residents as of December 31, 2010. Colorado's population growth rate is double the national average of 0.75 percent during the same period. The Census Bureau's estimate puts the state's population at 5,355,866, up from 5,272,086 on July 1, 2013. The state Demography Office estimates that 60 percent of the state's population gains in 2013 came from net migration. Of those groups, about one in five was 18 to 24 years old and one in four was 25 to 34. The office forecast the state population to increase 1.6 percent as of July 1, 2014, before ramping up to a 1.7 percent annual rate as of July 1, 2015, and as of July 1, 2016. According to U.S. Census state population estimates for 2014, Colorado is the fourth fastest -growing state in the country. From July 1, 2013 to July 1, 2014, the state gained 83,780 residents, an increase of 1.59 percent from 2013. In terms of total population Colorado ranks 22nd, with a population of 5,355,866. Northern Colorado Population The population of Northern Colorado grew by more than 100,000 residents between 2000 and 2010, from 436,691 to 554,490, according to the most recent population census provided by the U.S. Census Bureau. That number is expected to grow to more than 775,000 by 2025, and to exceed 950,000 by 2035. As is with the state growth, the population in Northern Colorado has also increased over the last ten years and is likely to continue to grow. SHANNON & ASSOCIATES REAL ESTATE APPRAISERS & CONSULTANTS NORTHERN COLORADO REGIONAL ANALYSIS (APRIL 2015) 2 The following tab e provides population estimates for Larimer and Weld Counties from 2004 through 2014: 350,000 3 00, 000 250,000 200,000 150,000 100,000 S (J, 000 Population by County 9) Larimer Weld csr\P fly Source: Colorado Dept.. of Local Affairs, State Demography Office 2014 Household Data The total number of households in Larimer and Weld Counties has grown steadily from 2002 through 2014. According to the Colorado Department of Local Affairs' most recent information, the total number of households has grown from 204,848 in 2004 to 209,644 in 2014. This represents an average increase of 2.3% per year. The following chart shows growth in Larimer and Weld counties from 2004 through 2014. r 160,000 110,000 120,000 {� 1corn0o .I"il PI!, AL PI A rt n 4]1.151.Pti/l_P ,I CI, Cla fl rit Y44.1. . .BIL r - '1 r'1 n f+'L !'1 I_lrrl_P�Y14_P I �F Number of Households by County 1 _ 1- _ 1 1 7 7 1 l 7 7 7 l 7 7 7 7 3 7 7 7 i 11 A f • —i 7 a A i 71 7—t 7 7 t 7 7-E 7 7 t 7 7 L -71- 7 7 01 7 77 IS 7 MI 7 O —1 I- - - i' r C 7 7 a a S a MIT 7 a a 10--[ a - ]■ a ■-7i- la �All - E —Ma MC 2004 2005 2006 2007 4 SI MS 7® � -' 1 S ■ _- 7• 117—== T nit 1 a7• arsimam a I• a - a a - MI I■t - CINS -1---a ! 1i 1 7 7 I. 7 it 7 L I [ 7 7 3 7 7 7 7 7 7 7 7 7 7 [ 7 >tMEE a I I 2008 2V'0' 2010 2011 tl L3rirrier Source: Dept of LccaIAFairs, Larin'iar and Wald Courtiti; Data '4 eI1 Ea 11-31E MI E III -1 1 a CC H a MI r 1 M 7 L 3 a IFS f a 11 L .3 Al Illa r 9 1l It n 1 I a 4 7 t o 1 17 a 7—E 1 l- - t 7 11- 7 � a i 7 71 II i 7 II SE 7 ! 7 allal EN MI al 7 • AI a SF a A a >t-1� 7 l - MI 7 l 7 71 MI 1 �AN 7 • a 7 A L a t.a II 7 Me 1 MI I ® a 2012 2012 LW1L ■ 1 ■ • ] ■ ■ ■ ■ ■ ■ ■ ■ i� SHANNON & ASSOCIATES REAL ESTATE APPRAISERS & CONSULTANTS NORTHERN COLORADO REGIONAL ANALYSIS (APRIL 2015) Employment I Unemployment According to the Bureau of Labor and Statistics, national, state, and local employment experienced gradual, consistent job growth from 2005 through 2007. In 2008/2009 there was a drop in the employment rate for all three areas. As of year-end 2014 employment is projected to continue expanding. Employment numbers are as shown in the following chart: TOTAL EMPLOYMENT Employed Colorado % Unemployment A Rate Employed Fort Collins/Loveland % la Unemployment MSA Rate Employed Greeley % A MSA Unemployment Rate 2005 2,464, 903 2.9% 4.6% 158,791 1.6% 4.3% 106,269 3.1% 5.1% 2006 2,546,864 3.2% 3.8% 164,518 3.5% 3.3% 111,008 4.3% 4.0% 2007 2,581,945 1.4% 4.1% 165,911 0.8% 3.5% 112,590 1.4% 4.3% 2008 2,564, 627 -0.7% 6.0% 166,629 0.4% 4.8% 111,893 -0.6% 6.1% 2009 2,477, 274 -3.5% 8.3% 164,768 -1.1% 6.8% 107,911 -3.7% 9.4% 2010 2,479,608 0.1% 8.7% 164,321 -0.3% 7.3% 109,142 1.1% 10.0% 2011 2,528, 276 1.9% 8.1% 168,778 2.6% 6.3%. 113,292 3.7% 8.8% 2012 2,560, 977 1.3% 7.2% 171,413 1.5% 5.7% 1151714 2,1% 7.9% 2013 2,608,558 3.1% 5.9% 175,033 3.6% 4.7% 1201959 6.3% 6.0% 2014* 2,699,250 5.1% 4.2% 179,627 4.6% 3.3% 129,961 11.0% 4.0% *As of December 2014 Source: US Bureau of Labor and Statistics According to the Q2 2014 Colorado Secretary of State's business and economic report, national employment recorded a new peak in June 2014. Total nonfarm employment rose 1.8% yearly, and unemployment dropped to 6.1% in June 2014. Further growth in the national economy is expected, with gains in personal income and wealth (i.e., home prices and the S&P 500) mitigating less favorable business outlays. These include flat national wages and modest increases in prices. The state economy also recorded a new employment peak in 2014, with 66,300 seasonally adjusted jobs added year -over -year in June 2014. Aggressive building activity pushed building permits up 10.8% for the year and valuation to $6.1 billion in a 12 -month trailing total. Home prices across the state expanded 9.3% yearly in Q2 2014 and 2.6% over Qi 2014. Wages per employee in Colorado were S 50,864 for Q2 2014 and have increased marginally since Q2 2013 (0.6%). State personal income recorded more substantial gains in this time period, increasing by 4.9% year - over -year. While foreclosure filings and sales increased measurably in Q2 2014 (15.4% and 4.1%, respectively), gains in employment, consumption, and income drove growth. SHANNON & ASSOCIATES REAL ESTATE APPRAISERS & CONSULTANTS NORTHERN COLORADO REGIONAL ANALYSIS (APRIL 201 5) 4 The following graphs illustrate the state and local trends in total employment and unemployment; Greeley MSA Employment and Unemployment 140,000 120,000 100,000 80,000 60,000 —it— 40,000 _ 20,000 — I 0 12.0% - 10.0% - 8.0% 6.0% - 4.0% 2.0% 0.0% 2005 2006 2007 2008 2009 2010 2011 2012 2013 20145" Source: US Bureau of Labor & Statistics Unemplc"yinert Pate Employed SHANNON St ASSOCIATES REAL ESTATE APPRAISERS &t CONSULTANTS Nov`il1ERN COLORADO REGIONAL ANALYSIS (Ar'iuL 2015) 5 According to the Colorado Business Economic Outlook Report for 2015, the Colorado economy. will continue to grow in 2015. Although the U,S, economy is still somewhat out of sorts, Larimer and Weld counties appear to have more than fully recovered by most broad economic measures. The region has more jobs than ever, and unemployment rates are lower than they were on the recession's eve. Indeed, the local press has been citing a mounting pile of anecdotal evidence about labor shortages across a variety of industries. One important result is that regional wages are finally starting to grow in some sectors after many stagnant years, helping boost household incomes. Although both county economies are doing well, the driving forces are quite different. According to the Current Employment Statistics provided by the Colorado Department of Labor and Employment (C"IEEE) Weld County has added more than 9,000 nonfarm jobs over the past 24 months, a 10.7% change that exceeds the two year growth rates from previous expansions. Much of this is propelled by traditional strengths in food processing, and oil and gas; the supply - chain effects for these two industries is also prominent. Agricultural producers continue to prosper, in part buoyed by higher commodity prices. At the same time, natural resource extraction has bolstered the construction and transportation industries. Larimer County has added nearly 11,000 nonfarm jobs over the past two years, with much of the growth coining from service industries. Noteworthy expanding sectors reflecting the county's high -service orientation include Professional, Scientific and Technical Services; Health Care; and Education. A growing regional economy has also benefited retail development, with several new national merchants entering the market, including Costco, Sierra Trading Post, and Trader Joe's. Northern Colorado's housing market is also strong. Over the past two years, Federal Housing Finance Association (FHFA) data show single-family housing price indices in Weld and Larimer counties have climbed 15.2% and 14.8%, respectively, in Q2 2014. Price appreciation has led to builders moving more dirt, with single-family building permits rising in both counties. The U.S. Census Bureau estimates 1,500 permits were issued in Weld County through September 2014, up nearly 500 from two years earlier. Larimer County saw about 400 more single-family permits through the time period than 24 months earlier. A tight housing market means rents are also increasing. Recent figures from the Colorado Department of Local Affairs show the median rental rates for a two bedroom, two -bath apartment is $1,002 in Greeley and $1,246 in Fort Collins —Loveland. The increase over the past two years is 14.9% in Greeley and 11.1% in Fort Collins —Loveland. SHANNON & ASSOCIATES REAL ESTATE APPRAISERS & CONSULTANTS NORTHERN COLORADO REGIONAL ANALYSIS (APRIL 2015) 6 The overall strong performance over the past year isespecially remarkable given the damage caused by the September 2013 floods. In last year's regional outlook great concern was expressed about the potentially adverse impacts of substantial infrastructure damage. The impacts on the Town of Estes Park and its tourism -based economy, which bore significant damage to most access roads, were especially concerning. Due to a very focused and intense recovery effort, however, most of the negative effects were short-lived. Although comprehensive data are still scarce, recovery efforts injected millions of new dollars into the economy, and the Estes Park Trail Gazette recently reported that sales tax collections are up 6.7% over the same period last year. Still, there may have been some negative effects. National Park Service data show Rocky Mountain National Park visitor numbers for the first eight months of 2014 were down more than 3% from the same period in 2012, although the "cause" for this decline is very difficult to discern. Despite mostly positive news, it is important to remember that many local households are still not enjoying the prosperity. Forexample, the 2013 poverty rates in Weld and Larimer counties were 14.4% and 13.7%, respectively, firmly placing both counties above the state rate of 12.9%. To better understand why growth is not helping every household, itis useful to take a closer look at specific industries and the wages that they pay. Doing so reveals that much of the regional job growth is concentrated in industries that pay below -average wages. This is especially true for Larimer County, where CDLE data indicate 56% of the job growth between QI 2011 and Qi 2014 was in industries that pay less than the average wage. As a result, the average weekly wage in the county, adjusted for inflation, grew less than 2% over that timeframe. For Larimer County, the point is that despite many signs of a robust economy, there is much work to be done. Wage growth is not nearly as tepid in Weld County. Due to strong job growth in Construction and Natural Resources two sectors with above -average wages 62% of the recent employment gains have been in industries paying above -average wages. Adjusting for inflation, average weekly wages grew by about 12% between Q1 2011 and 1 2014. Despite this increase, Weld County wages average only about 83% of the state average. Looking forward, there is little reason to think things will change dramatically in 2015. Models predict that employment will continue to grow in both counties, and the industry mix will be consistent with recent history. The Construction Sector, which has seen a recent spurt in both residential and nonresidential projects, is expected to further strengthen in 2015. SHANNON & ASSOC1ATFS REAL ESTATE APPRAISERS & CONSULTANTS NORTHERN COLORADO REGIONAL ANALYSIS (APRIL 2015) In 2015, the job growth rate is expected to continue to outpace the state average, further lowering the local unemployment rate. One important consequence will be increased wages, which should help households across the income spectrum. Yet, concerns remain that wage gains for lower_ income households will fail to keep pace with rising housing prices. Contributor: Martin Shields, Colorado State University SHANNON & ASSOCIATES REAL ESTATE APPRAISERS & CONSULTANTS NORTHERN COLORADO REGIONAL ANALYSIS (APRIL 2015) 8 Northern Colorado Municipal Employment Drivers The City of Fort Collins Fort Collins is fueled by a highly educated workforce (40% of residents hold a college degree and 14% hold a doctoral degree), a major research institution and a variety of federal laboratories. The city hosts operations of some of the largest technology companies in the United States, including Avago Technologies Inc., Agilent Technologies, Advanced Micro Devices Inc. and LSI Logic Inc., among others. Other major employers include Advanced Energy Industries Inc. (a Fort Collins -birthed company) and Woodward Co. Otterbox is one of Fort Collins' most recent and most profitable success stories. Otterbox makes a protective hand-held device protectors. It started as a small venture in 1998 and is now one the fastest growing privately owned companies in the U.S. CSU is another principal driver of the economy in Fort Collins. CSU provides programs in engineering, energy research, business, veterinary sciences, hio-science and other disciplines. The CSU Veterinary Teaching Hospital was developed and is funded by four surrounding states and it is regarded as one of the top such programs in the nation. The City of Loveland The City of Loveland is known for a culture largely driven by the arts. The city and its population have poured finances and efforts into renovating the downtown, supporting local business and convincing Rocky Mountain National Park tourists that it is worth the time to stop and admire the city, and all the amenities it has to offer. Loveland's fastest growing industry is retail and healthcare, with McKee Medical Center and the Medical Center of the Rockies topping the city's employment charts. The Centerra shopping center provides the largest retail employment opportunity in Northern Colorado. The promise of more development along the 1-25 corridor also has given Loveland momentum. Greeley Greeley is the largest city in Weld County. The city has long expanded beyond its farming and ranching roots, developing its way into industries including manufacturing, health care and most notably in recentyears, energy. Growth in the oil and gas sector has rippled throughout the larger economy in Greeley, bringing in more consumers. According to the Greeley Chamber of Commerce, with the help of industry giants like Noble Energy and Anadarko Petroleum Corp., oil and natural gas contribute more than $625 million to Weld County's economy, and provide some of the highest -paying jobs in the region. SHANNON & ASSOC1ATFS REAL ESTATE APPRAISERS & CONSULTANTS NORTHERN COLORADO REGIONAL ANALYSIS (APRIL 2015) Agribusiness, however is still the city's largest sector. With more than 31% of local employment related to agriculture in one way or another, agribusiness contributes more than SI billion to the local economy. Weld County ranks in the nation's top five for agricultural products sold, and is No. 1 in livestock, iamb and poultry. Greeley is home to the North American Corporate Headquarters for JBS USA. JBS is the world's largest protein provider. Over the years the company has shown consistent growth, mergers and acquisitions that have boosted the region's economy. Another major contributor to the region's economy is its most recent manufacturing addition. Leprino Foods recently spent S250 million on a new 800,000 square foot cheese and whey factory. This factory is the world's largest mozzarella cheese provider. The Town of Windsor The Town of Windsor in recent years has become the region's boomtown, doubling its population in the last decade and projected to double again in the next decade. Although the town has a solid base of small local businesses, much of the growth is a result of several larger corporation's decisions to set down roots in this central Northern Colorado town. Vestas Blades, a wind turbine manufacturer, is the largest employer in Windsor with more than 700 employees, followed by Owens Brockway Glass Container Inc., a glass manufacturer. Tenneco Packaging, University Photo Products and ICON industries have all found a home here, paving the way for other businesses in need of solid local infrastructure. SHANNON & ASSOC1ATFS REAL ESTATE APPRAISERS & CONSULTANTS NORTHERN COLORADO REGIONAL ANALYSIS (APRIL 2015) - 1 0 - Major Employers in Northern Colorado Northern Colorado is home to a variety of large employers in numerous business sectors. These companies are drawn to the area due to the highly educated population base. Some of the largest employers are detailed below. Major Larimer & Weld County Employers Employer Colorado State University University of Colorado Health (formally PVH) J BS Swift and Company Banner Health: North Colorado Medical Cent( Banner Health: McKee Medical Center Poudre School District Weld County School District 6 Thompson School District R2J Hewlett Packard University of Northern Colorado Larimer County Woodward Columbine Health Walmart Distribution Center Center Partners Weld County Government City of Fort Collins State Farm Insurance City of Loveland No of Employees 6475 5522 4500 4112 4112 3289 2300 2036 2000 1658 1539 1475 1450 1350 1300 1282 1200 1188 958 Data obtained from the Northern Colorado Economic Development Corporation Employees by Business Sector Larimer Weld No. of Percentage of Employees No. of 3,663 Percentage Employed of 4.28% Agriculture, Hunting Forestry, Fishing, Employees 946 Employed 0.66% Construction 7,851 5.48% 7,408 8.65% Manufacturing 11,469 8.00% 11,456 13.38% Wholesale Trade 3,435 2.40% 3,529 4.12% Retail Trade 17,197 11.99% 8,178 9.55% Transportation/Warehousing 2,603 1.82% 3,126 3.65% Finance/Insurance 3,231 2.25% 3,010 3.52% Real Estate/Rental/Leasing 2,355 1.64% 1,012 1.18% Professional, Technical Services Scientific, 9,027 6.30% 2,209 2.58% Administrative, Management Support, Waste 8,712 6.08% 4,731 5.52% Educational Services 15,092 10.52% 8,000 9.34% Health Care/Social Assistance 17,676 12.33% 8,206 9.58% Arts/Entertainment/Recreation 2,833 1.98% 1,038 1.21% Accommodation/Food Services 16,821 11.73% 6,319 7.38% Source: Colorado Employment and Wages, Local Employment Dynamics, Average Quarterly Employment SHANNON Et ASSOCIATES REAL ESTATE APPRAISERS &t CONSULTANTS Nov`il1ERN COLORADO REGIONAL ANALYSIS (APRIL 2015) Larimer County's Health Care & Social Assistance sector employed the most people (17,676). The Retail sector had the second highest employment numbers at 17,197 followed by Accommodation & Food Services at 16,821. The Educational Services ranked fourth with 15,092 and the Manufacturing sector ranked fifth at 11,469. The predominance of the Retail sector in the number of establishments and the number of employees is reflected in statewide numbers as well, with 18,357 Colorado retail businesses employing 242,477 people. Retail business accounted for 11.99% of the employees and 13.0% of all establishments in Larimer County, compared to 12.3% of employees and 12.2% of establishments statewide. Weld County primary employers represent every industry sector, from basic manufacturing to business services to high tech. Access to suppliers, workforce, transportation resources, quality healthcare, business support organizations andeducational institutions support local companies as they compete within their markets. The diversity of these companies enhances the inherent strength of the local economy, and offers the potential of even stronger job growth into the future. The manufacturing sector is the largest sector in Weld County and includes a wealth of companies producing a wide variety of products focused primarily in food manufacturing, wood products, chemical manufacturing, plastics/rubber products, fabricated metal products, machinery manufacturing, electrical equipment/components, transportation equipment and miscellaneous manufacturing. SHANNON & ASSOC1ATFS REAL ESTATE APPRAISERS & CONSULTANTS NORTHERN COLORADO REGIONAL ANALYSIS (APRIL 2015) - 1 - Single Family Housing While rising home prices continue to make headlines, the fact is homes in Northern Colorado are even more affordable than they were 10 years ago. Thanks primarily to falling interest rates, the monthly payment for an average -priced home during 2014 was actually lower in each of the local markets than it was in 2005. The driving forces behind this affordability trend is a mortgage interest rate that's hovered close to 4 percent over the past year, compared to 6 percent or higher in the mid -200s. Combine that lower rate with increasing family incomes, and the cost of ownership comes down. Rising rents and falling interest rates made 2014 the best investor market in memory. In addition, Colorado's condo defects law limited condo construction causing many potential first time buyers to rent apartments rather than own. New lot development costs, rising material prices, and labor shortages caused new home prices to rise significantly in 2014. There is an undersupply of resale homes and single-family homes for rent. Residential lots are quickly being absorbed by the large builders who have moved into our market. Interest rates continue to be at historic lows, providing additional buying power to buyers. As a result, local buyers are finding average monthly payments at levels below 2005, even as prices have increased. The National Association of Realtors predicts that first-time buyers will slowly return to the market as new mortgage products are available that feature low down payments and private mortgage insurance. Single-family homes to rent will continue to me difficult to find and rents will continue at an all-time high. Northern Colorado has proven to be one of the very best places to own investment real estate based on low vacancy rates, low unemployment, a diverse economy, and real estate prices that have appreciated over the long term. 2015 will be another positive year in the Northern Colorado real estate market.. Our growing population and robust economy will continue to drive the housing market. Prices, transaction, and new home starts will all continue their strong upward trend. The fundamentals of our region continue to make Northern Colorado a smart place to own real estate. SHANNON & ASSOC1ATFS REAL ESTATE APPRAISERS & CONSULTANTS NORTHERN COLORADO REGIONAL ANALYSIS (APRIL 2015) - 13- The data for the following graphs was obtained from the cities' planning departments: MULTIPLE LISTING SERVICE DATA FORT COLLINS YEAR SINGLE-FAMILY CON DOMIN IUM/TOWN HOME N OF UMBER SOLD UN ITS MEDIAN PRICE ANN CHANGE CHANGE PRICE UAL N OF UMBER SOLD UN ITS SALE MEDIAN PRICE ANN CHANGE PRICE UAL 2004 3,072 $220,000 1.0% 967 $157,900 5.0% 2005 3,066 $229,900 5.0% 883 $157,281 0.0% 2006 2,888 $230,000 0.0% 775 $156,000 -1.0% 2007 2,842 $235,000 2.0% 731 $155,000 -1.0% 2008 2,421 $243,000 -1.0% 666 $151,000 -3.0% 2009 2,270 $226,000 -3.0% 627 $150,000 -1.0% 2010 2,289 $232,000 3.0% 555 $153,000 2.0% 2011 2,303 $237,000 2.0% 558 $154,791 1.0% 2012 2,765 $246,000 4.0% 693 $154,700 0.0% 2013 3,204 $261,000 6.0% 734 $170,000 10.0% 2014 3,156 $281,000 8.0% 822 $185,000 9.0% Sources: IRES Multiple ListingService. SHANNON & ASSOCIATES REAL ESTATE APPRAISERS & CONSULTANTS Nov`il1ERN COLORADO REGIONAL ANALYSIS (APIuL 2015) MULTIPLE LISTING SERVICE DATA GREELEY YEAR SINGLE-FAMILY CON DOMINIUM/TOWNHOME NUMBER OF SOLD UN ITS MEDIAN SALE PRICE ANNUAL PRICE CHANGE NUMBER OF SOLD UN MEDIAN ITS SALE PRICE ANNUAL PRICE CHANGE 2004 3,895 $185,500 4.0% 486 $141,225 1/41 1.0% 2005 3,909 $190,000 2.0% 382 $149,300 6.0% 2006 3,585 $195,000 3.0% 390 $155,500 4.0% 2007 3,460 $189,900 -3.0% 347 $145,000 -7.0% 2008 3,302 $171,900 -9.0% 229 $132,904 -8.0% 2009 3,130 $169,500 -1.0% 269 $110,000 -17.0% 2010 2,965 $174,000 3.0% 233 $115,900 5.0% 2011 3,134 $172,000 -1.0% 250 $109,900 -5.0% 2012 3,439 $192,450 12.0% 277 $117,625 7.0% 2013 4,146 $210,000 9.0% 367 $137,751 17.0% 2014 4,624 $233,500 11.0% 496 $149,250 8.0% MULTIPLE LISTING SERVICE DATA LOVE LAN D YEAR SINGLE-FAMILY CON DOMIN IUM/TOWN HOME NUMBER OF SOLD UN ITS SALE MEDIAN PRICE ANN PRICE CHANGE UAL NUMBER OF SOLD UN ITS SALE MEDIAN PRICE ANN PRICE CHANGE UAL 2004 2,036 $220,500 8.0% 264 $161,900 -2.0% 2005 Z038 $232,900 6.0% 274 $164,500 2.0% 2006 1,778 $239,419 3.0% 228 $157,900 -4.0% 2007 1,579 $227,600 -5.0% 191 $153,627 -3.0% 2008 1,415 $217,000 -5.0% 160 $146, 000 -5.0% 2009 1,323 $205,000 -6.0% 166 $150,000 3.0% 2010 1,357 $215,000 5.0% 171 $153,000 2.0% 2011 1,423 $215,000 0.0% 170 $146,650 -4.0% 2012 1,759 $229,547 7.0% 241 $152,714 4.0% 2013 2,057 $249,825 9.0% 301 $167,000 9.0% 2014 2,015 $275,000 10.0% 306 $175,556 5.0% Sources: IRES Multiple ListingService. SHANNON & ASSOCIATES REAL ESTATE APPRAISERS & CONSULTANTS Nov`il1ERN COLORADO REGIONAL ANALYSIS (APRiL 2015) Home Sales Activity by Market Fort Collins/Wellington/Timnath Year # of Homes Sold % Change Dollar Value % Change Average Sales Price % Change 2009 2,923 -3.0% $699,252,210 -11.0% $239,223 -5.0% 2010 2,783 -5.0% $696,823,184 -2.0% $250,386 +5.0% 2011 2,736 -2.0% $693,885,165 0.0% $253,613 +1.0% 2012 3,374 +23.0% $879,448,133 +27.0% $260,654 +3.0% 2013 3,878 +15.0% $1,082,193,812 +23.0% $279,111 +7.0% 2014 3,816 -2.0% $1,146,193,050 +6.0% $300,365 +8.0% Loveland/Berthoud Year # of Homes Sold % Change Dollar Value % Change Average Sales Price % Change 2009 1,335 -4.0% $301,738,889 -10.0% $226,021 -6.0% 2010 1,363 +2.0% $315,371,969 +5.0% $231,381 +2.0% 2011 1,381 +1.0% $322,535,668 +2.0% $233,552 +1.0% 2012 1,681 +22.0% $412,216,976 +28.0% $245,221 +5.0% 2013 2,002 +19.0% $517,210,506 +25.0% $258,347 +5.0% 2014 1,977 -1.0% $556,336,704 +8.0% $281,405 +9.0% Greeley/Evans Year # of Homes Sold % Change Dollar Value % Change Average Sales Price % Change 2009 1,671 +0.5% $232,955,393 -7.0% $139,411 -8.0% 2010 1,532 -8.0% $218,002,039 -6.0% $142,299 +2.0% 2011 1,465 -4.0% $208,237,058 -4.0% $142,141 0.0% 2012 1,493 +2.0% $241,807,019 +16.0% $161,960 +14.0% 2013 1,944 +30.0% $344,461,436 +42.0% $177,192 +9.0% 2014 2,280 +17.0 _ $461,049,659 +34.0% $202,215 +14.0% Windsor/Severance Year # of Homes Sold % Change Dollar Value % Change Average Sales Price % Change 2009 495 +0.5% $141,649,327 -5.0% $286,160 -8.0% 2010 501 +1.0% $150,282,988 +14.0% $308,208 +5.0% 2011 557 +11.0% $161,958,496 -9.0% $297,490 -3.0% 2012 728 +31.0% $218,991,979 +37.0% $305,525 +3.0% 2013 819 +13.0% $260,621,098 +13.0% $327,021 +6.0% 2014 787 -4.0% $273,390,928 +5.0% $347,384 +9.0% Ault/Eaton/Johnstown/Kersey/Milliken/Mead/LaSalle Year # of Homes Sold % Change Dollar Value % Change Average Sales Price % Change 2009 532 -19.0% $100,097,095 -23.0% $188,152 -6.0% 2010 535 +1.0% $104,919,874 +5.0% $196,112 +4.0% 2011 698 $134,601,026 +28.0% $192,838 -2.0% +30.0% 2012 896 +28.0% $187,164,073 +39.0% $208,888 +8.0% 2013 1,053 +18.0% $245,284,496 +31.0% $232,939 +12.0% 2014 1,279 +21.0% . $334,731,851 +36.0% $261,714 +12.0% Data obtained from the February 2015 Group Real Estate Insider Vol. 39, No.1 The number of "homes sold" is defined as "purchased dwelling units" and includes both new and resale single-family homes, town homes, condominiums, and patio homes. Change in average sales price is not the same as appreciation/depreciation. SHANNON cat ASSOCIATES REAL ESTATE APPRAISERS &t CONSULTANTS Nov`il1ERN COLORADO REGIONAL ANALYSIS (Ar'iuL 2015) -16- Apartments Apartment rents soared in Northern Colorado with the average rent rising 17.2 percent, year over year, in Ft. Collins and 12.6 percent in Greeley. Ft. Collins/Loveland area's vacancy rate dropped to a thirteen -year low of 1,7 percent. In the June 11, 2014 Colorado Department of Local Affairs' Vacancy and Rent Survey, their economist, Ryan McMaken stated "Greeley is one of those places where brand-new buildings in the process of lease -up have increased the vacancy rate, with Greeley's rate rising to 4.4 percent." The multifamily market in Northern Colorado continued its strong performance through the third and fourth quarters of 2014, experiencing two more quarters of economic growth and development. Although there were some lulls seen in growth, Northern Colorado still expanded its workforce by nearly 5,000 workers in 2014. As the economy and market flourish, the influx of people is compressing vacancies to staggeringly low average rates of 1.4% across the market. Asking rents in Northern Colorado for multifamily units have been on an upward trend for the last five years, and that trend continued to close out the year in 2014. In Larirner county, average rents rose to an average of nearly S 1,2O0/month/unit, and an average sales price of nearly $152,000/unit. In Weld County, rentals rates climbed to nearly $870/monthlunit. Although recently there have been steady rental rate increases across all markets, this trend is expected to start plateauing due to the substantial amount of development currently underway. As expanding and diversified economy, along with favorable market conditions continue to harbor an environment of robust investment activity, and a high level of new development in Northern Colorado. The number of new and planned units will drastically add to the supply of inventory available to potential lessees, which may alleviate some stress on vacancy and rental rates. However, given the economic expansion of the Northern Colorado market, demand will likely remain very high. SHANNON & ASSOC1ATF.,s REAL ESTATE APPRAISERS & CONSULTANTS NORTHERN COLORADO REGIONAL ANALYSIS (APRIL 2015) -17- Multi Family Sales Multi -Family Building Permits No. of Permits ■ resrt Calling L weI5ritl Grnelty Source: The Group, Inc. Insider Vol. 39, N c'_ 1 k&Jind or $2 50 $200 - $150 - a V 7J E C $100 O a $50 $0 a a t".1 Data Source Costar a a N n a a r4 oa a a N a' a a N G a N Dollar Volume Number of Sales a r4 a N SHANNON St ASSOCIATES REAL ESTATE APPRAISERS & CONSULTANTS NOV`il1ERN COLORADO REGIONAL ANALYSIS (APIuL 2015) Average Apartment Rental Rates 1,400 1,200 1,000 $800 $600 $400 $200 S0 2009 2010 2011 2012 2013 2014 Source: Colorado Multifamily Housing Vacancy & Rent Survey FORT (CU.COILIINSADOVELA Dart GREELEY 8.0% 7.0% 6.0% .6.0"./a 4.0% 3.0% 2.0% 1.0% 0.0% Apartment Vacancy Rates 2009 2010 2011 2012 201.E 2014 Source: Colorado lvultifanhily Housing Vacancy & Rent Survey FORT C0LLt iLO'V'ELAI'JD GP, € ELE'r NORTHERN COLORADO METROPOLITAN APARTMENT DATA FORT COLLINS/LOVELAND GREELEY YEAR VACANCY RATE AVERAGE RENT PERCENTAGE CHANGE VACANCY AVERAGE RATE RENT PERCENTAGE CHANGE 2009 6.3% $854 3.6% 7.4% $637 0.0% 2010 4.1% $901 5.5% 5.1% $633 -0.6% 2011 3.4% $974 8.1% 6.4% $678 7.1% 2012 2.4% $1,008 11.9% 3.2% $692 9.3% 2013 2.1% $997 10.7% 6.3% $756 19.4% 2014 1.2% $1,203 23.5% 1.3% $869 28.2% Source: Colorado Multifamily Housi ng Va ca ncy and Rent Survey, 4th Quarter 2014. SHANNON & ASSOCIATES REAL ESTATE APPRAISERS & CONSULTANTS Nov`il1ERN COLORADO REGIONAL ANALYSIS (APRIL 2015) Commercial Building Permits The recovering economy has brought about some new construction as shown in the following graph: ■ Fort Collins 12 15 23 21 59 48 uLoveland I 17 8 14 8 19 9 16 I 37 SGreeley 10 8 7 17 37 u Windsor 3 2 4 27 10 The graph shows growth in new construction especially in Fort Collins. Also Loveland and Greely's growth has risen considerably since 2009. SHANNON & ASSOCIATES REAL ESTATE APPRAISERS & CONSULTANTS NORTHERN COLORADO REGIONAL ANALYSIS (APRIL 2015) -20 - Office Market Northern Colorado's office market is currently overbuilt as a result of the real estate boom in the early 2000s. This excessive supply resulted in increased vacancies and declining rental rates through 2009. The graphs below show some recovery in the office market since 2009. 16.0% 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% Office Vacancy Rates _ I I 1 1 I 2007 2008 2009 2010 2011 2012 2013 FORT COLLINS Data Source: CoStar GREELEY I LOVELAND $30.00 $25.00 $20.00 $15.00 $10.00 $ 5.00 $ 0.00 Average Office Lease Rates a -t1 2007 2008 2009 2010 2011 2012 2013 POR I COLLINS Data Source: Costar GREELEY 4 LOVELAND Office building sales have also declined since 2008. This is the result both of oversupply and new lending requirements imposed by banks beginning in 2007. As of 2012 the office market has seen modest gains. Dollar Volume of Sales (Millions) $120 - $100 - $80- $60 - $ 40 - $20 - $0 LA b O N d Data Source: CoStar O b C IN Office Building Sales Dollar Volu me b J N b Q N 0 d N Number of Sales C N N d N - 100 - 90 - 80 - 70 - 60 50 - 40 - 30 • 20 - 10 0 Number of Sales 1 SHANNON & ASSOCIATES REAL ESTATE APPRAISERS & CONSULTANTS NOV`il1ERN COLORADO REGIONAL ANALYSIS (APRIL 2015) -21- Retail Market Northern Colorado's retail market experienced the same growth in the early 2000s as the other market sectors. The oversupply of space was reflected in the vacancy rates in 2008, due to the decline in the economy, languishing retail industry, and overabundance of retail space. Retail lease rates were generally increasing through 2006 resulting from the influx of new, high quality space. However, lease rates steadily declined from 2007 through about 2009 and have remained relatively flat then 2012. Over the last two years the market seems to be stabilizing as rent rates are slowly increasing and vacancy rates are flat. 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% 2006 2007 2008 2009 2010 2011 2012 Data Source: CoStar k _ Retail Vacancy Rates 4. _ FORT COLLINS 4 GREELEY 4 LOVELAND t 'I Average Retail Lease Rates $18.00 $16.00 $14.00 $12.00 $10.00 $8.00 $6.00 $4.00 $2.00 $0.00 .41 1 I i 2006 2007 2008 2009 2010 2011 2012 Imissa FORT COLLI NS I. GREELEY a LOVELAND lib Data Source: CoStar I Retail building sales and sale prices also declined. Sales and sale prices declined in 2008, and as of 2012 the market has shown modest gains. r Dollar Volume (Millions) $250 - $200 $150 $100 - $50- i Data Source: CoSta r O a N Retail Building Sales 00 O 0 N N r N Dollar Volume 0 0 e`J 0 N Number of Sales 1 0 .V 160 - 140 120 - 100 - 80 60 40 - 20 0 N umber of Sales J SHANNON St ASSOCIATES REAL ESTATE APPRAISERS St CONSULTANTS Nov`il1ERN COLORADO REGIONAL ANALYSIS (APRIL 2015) -22- Industrial Market In Fort Collins the city was not over -built and rental rates remained relatively consistent. In Loveland the office warehouse market was over -built in 2008 and 2009 creating a high vacancy into 2011. Most recently, with significantly more supply than demand, Greeley has very high industrial vacancy rates, and low industrial lease rates. With the exception of Greeley, as of year-end 2011 the industrial market has shown signs of recovery. The vacancy rates and average lease rates for the warehouse and R&D building are as follows: 9.0% 8.0% 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% Industrial Warehouse Vacancy Rates 2007 2008 2009 2010 2011 2012 2013 Data Source; CoStar FORT COLLINS GREELEY .1 LOVELAND 50.0% 45.0% 40.0% 35.0% 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% industrial R & D Vacancy Rates T 2007 2008 2009 2010 2011 2012 2013 Data Source: CoStar -�� FORT COLLINS GREELEY I LOVELAND ar $9.00 $8.00 $7.00 $6.00 $5.00 $4.00 $3.00 $2.00 $1.00 $0.00 Average Industrial Warehouse Lease Rates .4 �I 200£ 2007 2008 2009 2010 2011. 2012 Data Source : CoStar FORT COLLINS GREELEY LOVELAND 4 4 4 4 Average Industrial R & D Lease Rates $12.00 $10.00 $8.00 $6.00 $4.00 $2.00 $0.00 2007 2008 2009 2010 2011 2012 2013 .— —• FORT COLLINS Data Source: CoStar GREELEY a LOVELAND SHANNON & ASSOCIATES REAL ESTATE APPRAISERS & CONSULTANTS NORTHERN COLORADO REGIONAL ANALYSIS (APRIL 2015) As with the other commercial markets, industrial building sales also declined significantly in 2008. 1n 2411 and 2012 sales increased in both the industrial/warehouse and R &. D sectors. r Industrial Warehouse Building Sales C C a Dollar Volume of Sales Iraq O UI C 0 N Data Source: Costar La 4 0 N O 0 N Dollar Volume CO 0 0 N 0 O N Number of Sales 100 90 80 70 60 50 40 30 20 10 Number of Sales r _ Dollar Volume of Sales (Millions) 70 60 50 40 30 20 10 0 UI a a Data Source: CoStar 0 Industrial Flex Sales N 0 fJ Dollar Volume to a 0 N a C -1 0 N Number of Sales N N d fV 100 90 80 70 60 50 40 30 20 10 Number et Sales SHANNON & ASSOC1ATFS REAL ESTATE APPRAISERS & CONSULTANTS NORTHERN COLORADO REGIONAL ANALYSIS (APRIL 2015) _24_ Summary Northern Colorado experienced significant growth in terms of population, employment, and new business opportunities through 2008 until the most recent recession hit. The real estate market was over -developed, resulting in high vacancy rates and lower lease rates and fewer sales through 2012. As of year-end 2011 commercial absorption rates were estimated anywhere from 3.5 to 8 years depending on the sector. As of year-end 2012 there was a significant decline in absorption indicating a healthier commercial market. f i Commercial Property Supply 1000 _ C) (13 tun a E z 100 10' _ 0.1 • L Office Industrial Retail Sales 66 69 91 Number of Listings* 164 153 125 Supply (Years) 2.5 2.2 1.4 Multi Family 16 4 03 *As of February 2013 ■ Sales lb Number of Listings* Supply (Years) rzwist Cniire r'h .Isr The Northern Colorado commercial market experienced a significant hit from the most recent recession in 2008 with languishing market fundamentals in all commercial sectors lasting though 2011. As of year-end 2012, the regional commercial markets are showing signs of recovery including an increase in sales and rental activity and decreases in the absorption and vacancy rates. The overall outlook of the Northern Colorado commercial market is favorable. SHANNON & ASSO IATE.,,S REAL ESTATE APPRAISERS & CONSULTANTS NORTHERN COLORADO REGIONAL ANALYSIS (APRIL 2015) 25_ July 26, 2019 Petitioner: DUGGAN HOLDINGS LLC 6564 JERRY BASS LN PUEBLO, CO 81005-9617 CLERK TO THE BOARD PHONE (970) 400-4226 FAX (970) 336-7233 WEBSITE: www.weldgov.com 1150 O STREET P.O. BOX 758 GREELEY CO 80632 Agent (if applicable): RE: THE BOARD OF EQUALIZATION 2019, WELD COUNTY, COLORADO NOTIFICATION OF HEARING SCHEDULED Docket 2019-3088, AS0103 Appeal 2008224773 Hearing 8/1/2019 9:00 AM Account(s) Appealed: R0016088 Dear Petitioner(s): The Weld County Board of Equalization has set a date of August 1, 2019, at or about the hour of 8:30 AM, to hold a hearing on your valuation for assessment. This hearing will be held at the Weld County Administration Building, Assembly Room, 1150 O 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, 2019, and mailed to you within five (5) business days. 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 discuss your value with the Assessor's Office, please call them at (970) 400-3650. If you wish to obtain the data supporting the Assessor's valuation of your property, please submit a written request to assessor@weldgov.com. Upon receipt ofyourwritten 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. 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 Esther E. Gesick Clerk to the Board Weld County Board of Commissioners and Board of Equalization cc: Brenda Danes, Assessor Hello