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Home My WebLink About20192886.tiffAugust 6, 2019 Petitioner: 1ST AVENUE PARTNERS LLC PO BOX 69 WINDSOR, CO 80550-0069 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 2019-2886 Appeal 2008224637 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 R8947321 Stipulated - Approved Stipulated Value $2,524,190 $2,000,000 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 ed2,6„tO. T.tPOIG�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 R8947321 ar Baal STIPULATION (As To Tax Year 2019 Actual Value) RE PETITION OF : 1ST AVENUE PARTNERS LLC NAME: PO BOX 69 ADDRESS: WI NDSOR, CO 80550-0069 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: Lot 1 MILLER FARM MINOR 2ND REPLAT 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 $2,524,190 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 /d`oaD vvo 5. The valuation, as established above, shall be binding only with respect to tax year 2019. 6. Brief narrative as to why the reduction was made: lurder revn'G1v of ail ate, roae 1 ,6 valve ?yeti?* Al 4O6101 eri €n r 7. Both parties agree that: The hearing scheduled before the Board of Equalization on 8/2/2019 at 9:00 AM be vacated. ark A hearing has not yet been scheduled before the Board of Equalization. R8947321 TPR 1 00 I 9 P8 acci ASoio3 2 day of August J 1 Pe ' io er(s) or Agent or Attorney Address: ?De en. 4? (Assistant) County AttQfney for Respondent, Weld County Board of Commissioners Address: 1150 CO" Street kOb1/4ThsoQl Co 8oSSa P.O. Box 758 Greeley, CO 80632 Telephone: '/zo, ?o'-/2 Telephone:(970) 336-7235 `County As Address: 1400 N.17th Avenue Greeley, CO 80631 Telephone: (970) 400-3650 Docket Number 2019-2886 R8947321 .r TPR 1—Icznd - i V e re c� NOTICE OF DETERMINATION Brenda Dones Weld County Assessor 1400 N 17th Ave Greeley, CO 80631 RECEIVED JUL 1 5 2019 Date of Notice: 6/25/2019 Telephone: (970) 400-3650 Fax: (970) 304-6433 Office Hours: 8:00AM - 5:00PM ACCOUNT NO. .....z.....,..,{�,1.. TAX YaQMVII . !Q RS.EGAL DESCRIPTION/ PHYSICAL LOCATION R8947321 2019 0600 Lot 1 MILLER FARM MINOR 2ND REPLAT 2824 1ST GREELEY PROPERTY OWNER 1ST AVENUE PARTNERS LLC PO BOX 69 WINDSOR, CO 80550-0069 PROPERTY CLASSIFICATION ; ASSESSOR'S VALUATION ACTUAL VALUE PRIOR TO REVIEW ACTUAL VALUE AFTER REVIEW COMMERCIAL 2,741,132 2,524,190 TOTAL 2,741,132 2,524,190 The Assessor has carefully studied all available information, giving particular attention to the specifics included on your protest. The Assessor's determination of value after review is based on the following: CM03 - After review of your property, we have made adjustments. This was done because of additional information obtained, or provided through the appeal process. If you disagree with the Assessor's decision, you have the right to appeal to the County Board of Equalization for further consideration, § 39-8-106(1)(a), C.R.S. The deadline for filing real property appeals is July 15. The Assessor establishes property values. The local taxing authorities (county, school district, city, fire protection, and other special districts) set mill levies. The mill levy requested by each taxing authority is based on a projected budget and the property tax revenue required to adequately fund the services it provides to its taxpayers. The local taxing authorities hold budget hearings in the fall. If you are concerned about mill levies, we recommend that you attend these budget hearings. Please refer to last year's tax bill or ask your Assessor for a listing of the local taxing authorities. Please refer to the reverse side of this notice for additional information. Agent (If Applicable): 15-DPT-AR PR 207-08/13 R8947321 2019-2886 "SO IO3 APPEAL PROCEDU RES County Board of Equalization Hearings will be held from July 25th through August 5th at 1150 O Street. To appeal the Assessor's decision, complete the Petition to the County Board of Equalization shown below, and mail, file online, or deliver a copy of both sides of this form to: Weld County Board of Equalization 1150 O Street, P.O. Box 758 Greeley, CO 80631 Telephone: (970) 356-4000 ext, 4225 Online: www.co.weld.co.us/appsl/cboe/ To preserve your appeal rights, your Petition to the County Board of Equalization must be postmarked or delivered on or before July 15 for real property — after such date, your right to appeal is lost. You may be required to prove that you filed a timely appeal; therefore, we recommend that all correspondence be mailed with proof of mailing. You will be notified of the date and time scheduled for your hearing. The County Board of Equalization must mail a written decision to you within five business days following the date of the decision. The County Board of Equalization must conclude hearings and render decisions by August 5, § 39-8-107(2), C.R.S. If you do not receive a decision from the County Board of Equalization and you wish to continue your appeal, you must file an appeal with the Board of Assessment Appeals by September 10, § 39-2-125(1)(e), C.R.S. If you are dissatisfied with the County Board of Equalization's decision and you wish to continue your appeal, you must appeal within 30 days of the date of the County Board's written decision to ONE of the following: Board of Assessment Appeals District Court 1313 Sherman Street, Room 315 Contact the District Court in the County Denver, CO 80203 where the property is located. See your (303) 866-5880 local telephone book for the address and www.dola.colocado.gov/baa telephone number. Binding Arbitration For a list of arbitrators, contact the County Commissioners at the address listed for the County Board of Equalization. If the date for filing any report, schedule, claim, tax return, statement, remittance, or other document falls upon a Saturday, Sunday, or legal holiday, it shall be deemed to have been timely filed if filed on the next business day, § 39-1-120(3), C.R.S. PETITION TO COUNTY BOARD OF EQUALIZATION What is your estimate of the property's value as of June 30, 2018? (Your opinion of value in terms of a specific i�dollar amount is required for real property pursuant to § 39-8-106(1.5), C.R.S.) $ ti`lt',,ecc3. na What is the basis for your estimate of value or your reason for requesting a review? (Please attach additional sheets as necessary and any supporting documentation, i.e., comparable sales, rent roll, original inst lied cost, appraisal, etc.) H AVE- i peltil Ai-) i 74 PPM l3AL 6 16; oevs O TA 71,,,) C� 13 rE 014.44 "As i5'. ATTESTATION I, the u :e i%ne• owner or agent' of the property identified above, affirm that the statements contained herein and o' a' - t / ments hereto are true and complete. S"an- a Telephone Number Date Email Address 'Attach letter of authorization signed by property owner. 15-DPT-AR PR 207-08/13 R8947321 1st Avenue Partners LLC - Miller Farm Minor Subdivision & USR Appraisal Analysis 17 -Mar -19 Drive Up Enclosed Large Self Storage Units Enclosed Bulk Storage (13,500 SgFt) Drive Up Enclosed Self Storage Units Temperture Controlled Self Storage Units Self Storage Exterior Parking (TBD) Canopy (Covered) Exterior Parking Portable Storage Units Portable Office Unit Sea Containers Total Available Unit Count Rentable Square Feet 2014 2015 2016 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 2017 2018 2019 2020 2021 20 50% 20 50% 20 50% 40 100% 40 X 44 9% 271 56% 271 56 100% 56 100% 56 68 68 68 68 34 100% 34 100% 34 100% 34 100% 47 100% 47 100% 47 100% 47 100% 1 1 100% 1 100% 1 100% 1 100% 1 3 100% 3 100% 3 100% 3 100% 3 Units 20% 173 25% 273 40% 520 76% 520 76% 686 61960 75285 207432 30% 36% Sq Feet 68 0 100% 100% Total USR Approved 40 6% 1 0% 484 71% 56 8% 20 3% 34 5% 47 7% 3 139 45130 22% 100% 100% 100% 47 0% 0% 100% 100% Appraisal it 1 Prospective Market Value 2014 2015 2016 2017 2018 2019 2020 2021 DRM Real Estate Advisors, Sept. 9, 2014, File # 201412299 Minor Subdivision "At Completion of Construction" 3 Lot Subdivision (5.37, 7.04 & 7.0 Acre Lots) "As Is" 22,3 Acres" (Sept. 17, 2014) 7 Acre, Sold for $ 2.79/SgFt "At Completion of Construction" Leased Fee Estate Appraisal # 2 Prospective Market Value DRM Real Estate Advisors, Jan. 31, 2017, File # 17-108 "Upon Stabilized Occupancy" May 1, 2018 Outside & Enclosed RV Storage Six (6) Man Cave Units For Sale: SOLD Remaining 5.6 Acres Phase II Land "Upon Completion of Construction" May 1, 2017 Outside & Enclosed RV Storage Six (6) Man Cave Units For Sale: For Sale Remaining 5.6 Acres Phase II Land "As Is" 12.36 Acre Lot Jan. 6, 2017 Appraisal # 3 Prospective Market Value Walter & Associates, May 15, 2018, File # 278 Proposed 469 -Unit Self -Storage Facility Sales Approach "As Is" Land w/ Improvements 5/15/2018 Cost Approach Sales Approach "As Complete & Stabilized" Income Approach "As Complete & Stabilized" 12/1/2021 Income Approach "As Complete" 6/1/2019 $ 1,000,000.00 $ 1,550,000.00 $ 2,010,000.00 Lot 3, Sold for $ 850,000.00 2014 2015 2016 2017 2018 2019 2020 2021 $ 2,575,000.00 $ 1,875,000.00 (SOLD) $ 725,000.00 $ 3,145,000.00 1,750,000.00 670,000.00 725,000.00 $ 1,525,000.00 2014 2015 2016 2017 2018 2019 2020 2021 $ 1,065,000.00 $ 5,900,000.00 $ 6,060,000.00 Per SF Value $ 63.00 96175.0 Square Feet $ 4,750,000.00 $ 6,100,000.00 Appraisal # 4 Prospective Market Value Walter & Associates, June 15, 2018, File # 277 Existing Lot 1, Existing Bldg 1, with Excess Land "As Complete & Stabilized" Self -Storage Hybrid with Excess Land "As Complete" Self Storage/Warehouse Hybrid with Excess Land "Aggregate Retail" 6 -Unit Condo Building 6/1/2019 "DCF - Present Value, 1 -Year Sell -Out" Appraisal # 5 Prospective Market Value DRM Real Estate Advisors, LLC, Dec 28, 2018 File # 18-208 "Upon Stabilized Occupancy" Lot 1 7.47 Acre with Existing 20 -Unit RV Storage Building "Upon Stabilized Occupancy" Lot 2 4.89 -Acre with Completed 100 Self -Storage Unit 68 Open RV Storage Spaces and 34 Covered RV Spaces "Upon Completion of Construction" Lot 2 "As Is" 12.36 Acre with Improvements 2014 2015 2016 2017 2018 2019 2020 2021 $ 1,445,000.00 $ 2,800,000.00 $ 924,000.00 $ 154,000/Unit $ 765,000.00 $ 127,500/Unit $ 3,000,000.00 2014 2015 2016 2017 2018 2019 2020 2021 $ 1,275,000.00 $ 1,600,000.00 $ 1,850,000.00 $ 1,740,000.00 1 PAGE OF DOCUMENT INCLUDED IN PAPER FILE. REMAINDER RETAINED ELECTRONICALLY IN TYLER. r Walter & Associates Real Estate Valuation and Analysis An Appraisal of 1st Avenue Storage - Phase II A Proposed Mixed -Use Industrial Facility Located at 2824 1st Avenue Greeley, CO 80631 Prepared for: Farmers Bank 713 S Lemay Avenue Fort Collins, CO 80524 Prepared by: Walter & Associates Greg A. Walter 537 Linden View Drive Fort Collins, CO 80524 EIN: 20-0518832 Date of Viewing: May 15, 2018 File #277 Report Date: June 15, 2018 June 15, 2018 Farmers Bank 713 S Lemay Avenue Fort Collins, Colorado, 80524 Re: Real Estate Appraisal of Phase II, a proposed mixed -use industrial facility or 1st Ave. Storage located at 2 824 1st Avenue Greeley, Weld County, Colorado, 80631 File Name: 277 Dear Farmers Bank, In accordance with your request, I have viewed and appraised . u ese �f developing the above -described property for p the "as is" mostly land with 1 -building of its leased complete" value as well as the "as complete.:.. � fee interest, the "as and stabilized" market value of its leased fee interest applyingas of the a with the value estimate 15, 2018 viewing date, the prospective June 1 completion date and the December 1, 2020 stabilized � a �� 1 date. This report addresses Phase IF of the project as I understand it. See Extraordinary Assumptions section descriptions. The subject1� within this report for further sites (Larger Parcel) is further identified as Parcel Number 096121219001. The value opinion is intended to reflect the current went expectations and: perceptions oftnarket participants along with available factual data. This valuation is for l 00% -real - estate. This report is designed to be in an Appraisal Report Format andsatisfies current reporting art p standards of USPApr The purpose of the appraisal is for estimating the . investment market value for loan underwriting au.d�'er an decision by the Farmers Bank. The appraisal was conducted in conformance with the Uniform Standards of Professional Appraisal Practice. (IJSPAP) developed by the Appraisal Standards Board P of th�e Appraisal Foundation, the Code of Professional Ethics of the Appraisal Institute FI1�� FR P�a � � �►. Title XI, 12 �'.�. Part 323 (FDIC), and 12 rt 34 (RTC). it is subject to the and Limiting • Assumptions Conditions and Certification of Value, .a part of the report. The appraisal should not be relied conditions on unless these are accepted. The appraiser has not been influenced by any parties 1n.their .� interest iu. the value � conclusions and have no financial property. A. utnmaiy of Salient Facts is presented beginningbegimiing on page No responsibility has been assumed for matters legal in rendered and marketable �nature, nor has any opinion on title been title is assumed..Liens and encumbrances, if an have property has been appraised as � ya been disregarded and property pp though free of indebtedness. It has been a pleasure working with you in the preparation this . forard. to the o • of p p era of as assignment, and. I look opportunity 'continuing to serve your appraisal needs in the near future. Respectfully Submitted, Walter & Associates Greg Walter Colorado -00100039718: December 31, 2019 537 Linden View Drive Fort Collins, CO 80524 Phone: (970} 5564223 Table of Contents Table of Contents ..... .f : c r ■r a art .. a i !' •Summary . a r ■ r.. a ..1Suof Salient Facts ....r...aaa4. Certification. Statement ...,;:111. s ..... %WT.r vem..uu..aur Limiting Conditions and Assumptions rt,.!piiFf:..s Scope of Work Subject Neighborhood •a.., +4111 a ws...., rr4h...,i!4+4..a■nen.**Oa s■ a}.}..■r.. n...✓ r.a.95}re.......r.set.,iirM....w.... pieme+'•tt:rm Site Description :14•44, r 4,054444414•41 Zoning a r. r o �r . a■ a 1111 . a Flood Map 111, 1, 27 Parcel flap ... '4'ie■•smote aaa. Subject Improvements ra.a4rv.e...r Subject Site Photographs "As Is" i r..aar ..�.■aipr,•a .sa . ■.aar}44.*.. a..0 31 :.fz.r - _!i:4 Subject Site Photographs "As Is" .,a.r...g} ... ..■44}}rvr...4'4.4yra•+p ht 4.i■......nta p. i• 6leg aim 4.4.8...44 32 Site Plan Highest and Best Use. ...... Approaches to .........43 Ap alue ■■ r f!#3•.••f,.t Cost Approach ..., 47 •, a 4..a..}{i- a*a.rtrna 49 �'�}'� r� 1�s �1 �( t:rroe.r.■�..w.r..a■a}}e...... :r....hr■aaa}ee,..r Land Comparable Sales Discussion � f'�{y . :4 e r r tir■■.•■a.ar.*ar.a.pace.m4...w.4.a.raa.aap}yr...as..a.rrt=ri..a.2 57 Market Value via Cost Approach — MiniStorage/Hybrid Building 3+'y� MarketValue via Cost Approach- rts..■}rr...nr �atu•a4#:rraa...arrt..p.p 6.} � 1.r.'J t �'j /"� [w !� � Condos �(]J �'y� �y 4.,l •}•� 1 anti i i Eno ■ Ina r r Industrial Condos ! 6 — nits ea.....aasearrr;asi�'r...rm....sa 4i..68 Sales Comparison "kk Approach .ti:.m...,r.s.....a..4E}r. ■....s... h. ■1 .p; Market Research . . Comparables ... "As Complete & Stabilized" a Approach {y�+�, 4a..asc3i.r.4.a.fi.341E+1...113■r4r4r.s..taa,a.■}v.4l 12 Income t i��„Jl �ii4� — � f � 1111 •41444 Market •a "As Complete" Self -Storage Units... . - - .: - - i i 3 � ...:u..illpi.ag '.,aap.}d,ie...r,r'a...'Ma+appt•,'e..e 4 1.J Value via Income Approach ...raa.4er..4.....+a!=: rr,r...wa.1■a4.•.,1!!.p41.48.404 ••I1441.4 444iris4..1prt:44..:.-441 14 .a ii.ery-.1aa4rv 4 4.v■4..r 6 ..... .t",..von a a ..44 hr... 7 et ..... •.3r..msa...wt.,■■aiitr..'r.■r .. 16 4. are..yel.fl......ra.a+. 44 y}...a■a..rcu....F ai44r 42 4• +4..■ra....:..4•.F4 a.P ...4. .... a..a a.4 26 I. f a ... 4 4, e r ro a.■■ a. r .. i' F. a.} rspgh}er.a.sa.s. 34 ..s.sa . h a4.*44?rr■•.ii.ws.ir..,.!pp•4 4 ®!t, 4..m • ■e.*1.,1441.f . 69 rtr.■p} •- •..11.:.:4 Income ar........ ..m4.4444:a!apa..I 44.4..4: 69 Approach"e.. n4_ � f.n.rra►{g- �� — "As Complete Stabilized" Self -Storage Facility .s Complete Stabilized" •f r 95 ■.rac4sam ten •:.:ri..mr++40:04**+!p•4104 Market Value via Income Approach .■re r.fy....H.aiir rih.rtri..: `i4arroe 112 "As Complete" ,rt.*!ie.■ra..a.. r,. ....::4.vrrer 444. 44444 ... .a...Et* 4 rt• sr,' .1 irk4 gar. i.:.mr I I4 t:r.n'a4..r44..•hrtr11l.F:ir■..,141!.:wrt:.:.!.ats:l.m.■ Income Approach — "As Complete" Industrial Condos . rt i i .,.... , r . IsisDiscussion as,..sapt..mar■s.rrr 1 15 ' j7scu r ii.wraa3E} rurrr ■s �r.+l tilLisslon —Phase II a a i. r r r.■ ....r 4. 4 h .. 120 MarketValue via Income ('� Comparison Approach t g i'4' mt r ..wars . e r r s r .. r . • ll�kJJll..et ♦ .tLI]&f1.r Sales damn 144t}m..raao _004tir:.s.a'ar:.nThag.. - Firial Reconciliation m....121 14 +4.4.1...4.0 f4aa■g}_ r sr.••aa.s- ad.rm a48:rea4■ firr:rr..:frap bi Exposure Time and Marketing Time ....No. Addendum Qualifications Engagement Letter Zoning Regulations Marshall & Swift Cost Sheets City and Regional Data ' \ ALTER i&A .S aS o I A ES Real Estate Valuations & Analysis I'. _ ... h 4. a. a p T-.......... 3 1 a. F 1 .: a 4!.. Table of Contents ..a+p.rv.r....,ur.. 122 PO ti..a: p4:r4r....s44..'h 1.!g ibm 1' 126 .■a:4 Page 3 Summary of Salient Facts I GENES Identification of Subject: Owner: Legal Description: Parcel Number: Date of Value "As Is Land Only: "As Complete": "As Complete Stabilized" Date of Report: Intended Use: Intended User(s): Property Rights: Current Listing/Contract: 1st Avenue Storage - Phase II 2824 1st Avenue, Greeley, CO Weld County, Colorado, 80631 1st Avenue Partners LLC LOT 1, MILLER FARM MINOR 2ND PLAT, Per Weld County Assessor (I2.359Ac, Larger/Parent Parcel). 096121219001 May 15, 2018 June 1, 2019 December 1, 2020 June 15, 2018 To establish the market value of the subject property for purposes of an evaluation for a loan request or making an investment decision. The intended users of this appraisal include Farmers Bank, and its parent, affiliates, subsidiaries and assigns. (The appraiser is not responsible for unauthorized use of this appraisal). Bldg. 3: 'As Is' — Leased Fee Interest Bldg. 1 & Bldg. 2 - Prospective 'As Complete & Stabilized a - Leased Fee Interest No known transfers or offerings on the market for the subject has occurred in the past 3 years. Please see the History Property Ownership P Section on page 12 for further details. II'ER ASSOCIATES Real Estate Valuations & Analysis Summary of Salient Facts Page 4 PROPERTY Land Area: Building: Zoning: Highest and Best Use of the Site as Vacant: Highest and Best Use as Improved: Furniture, Fixtures Equipment Value: The subject consists of Phase II site area totaling 7.461 Acre or 324,985 S. E, per provided survey on page 30. For purposes of this report a hypothetical condition exists whereas the total site 7.461 Acres will be split into 3 separate parcels to accommodate improvements and excess land ,for the "as is" as well as the "as complete" valuation within this report. Hypothetical land allocations can be found on page 57 of this report. Please note, the site area totaling 7.461 Acres an the process of being split, re plat and recorded with Weld County Assessor from its parent tract totaling 12.359 Acres. The subjectproperty is a proposed (2) building 40 -unit self -storage facility thatwill include 2 -models of various sizes. Bach building consists of steel construction on a slab foundation. Please note, (1) 20 -unit, 12,000 SF building inclusive of 40 -unit total already exists on subject site, The 2nd storage facility will be a hybrid building consisting of 13,500 SF storage units as well as 13,500 SF open clear span, which is inclusive of the 39,000 SF. Each building is a 1 story design steel frame construction with concrete flooring and an "as complete" total gross building area of 39,000 SF, per the provided plans and specifications from owner/architect. In addition, is a proposed 1 -story design steel frame constructed 8,860 SF 6 - unit, industrial condominium building. (I -M) - Industrial Medium Intensity District, with a Development Concept Master Plan Overlay Development with an industrial oriented use. At 7.461 Acres, it most. likely would be subdivided into 2-3 smaller industrial tots. Highest and best use as improved is an industrial facility -oriented use as currently proposed. Proposed improvements are subjectto approval of the USR., which includes the industrial condos and self -storage building. None - real estate only VALUE INDICATIONS.* ALSO SEE FINAL. RECONCILIATION SECTION Indicated Value by Each Applicable Approach: *See Final Reconciliation on Pages 123 & 124 of this report. opinion of Marketing Time: 8 Months or Less Opinion of Exposure Time: 8 Months or Less WALTER ASSOCIATES Real Estate Valuations & Analysis Summary of Salient Facts Page 5 Certification Statement I certify that to the best of our knowledge and belief: • The statements of fact contained in this report are true and correct. • The reported analyses, opinions, and conclusions are limited only the reported assumptions and limiting conditions and are our personal, impartial, and unbiased professional analyses, opinions, conclusions and recommendations. • No change of any item in this appraisal report shall be made by anyone other than those who signed this report, and we shall have no responsibility for any such unauthorized change. • I have no present or prospective interest in the property that is the subject of this report and have no� � personal interest with respect to the parties involved. • I have no bias with respect to the property that is the subject of this report or to the parties involved with this assignment. • My engagement in this assignment was not contingent upon developing or reporting predetermined results. • My compensation for completing this assignment is not contingent upon the development upon p or reporting of a predetermined value or direction in value that favors the cause of the client, the amount of the value opinion, the attainment of a stipulated result, or the occurrence of a subsequent event directly related to the intended use of this appraisal. My analyses,,. p'p y opinions, and conclusions were developed, and this report has been re eared p' 1� x in conformity with the Uniform. Standards of Professional Appraisal Practice(US and ..PAP) the Certification Standard of the Appraisal Institute. • I have made a personal viewing of the vacant site of the property that is the subject inspected � ub,�ect of this report. I have also the exterior of each of the comparables in this report. • No one provided significant real property appraisal assistance to the persons signing this certification. g g • None of the appraisers or staff of Walter & Associates, the preparers of this report, has been sued by a regulatory agency or financial institution for fraud or negligence Solving an appraisal report. • The use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representatives, • As of the date of this report, Greg Walter has completed the continuing education program of the Appraisal Institute. • Greg Waiter has performed a previous appraisal involving the "Phase I" with excess land portion of subject property on March 7, 2018. Greg Walter Colorado -C6100039718: December 31, 2019 WALTER & ASSOCIATES ATES Real Estate Valuations & Analysis Certification Statement Page 6 Limiting Conditions and Assumptions The appraiser will not be responsible for matters of leal nature that affect ' � either the property being appraised or the title to it, except for information that he or she became aware of during the research involved in performing this appraisal. The appraiser assumes that. �� the title i s good and marketable and will not render any opinions about the title. No responsibility is assumed ed for matters of a legal nature. Acceptance of and/or use of this report constitutes acceptance of the following conditions p ewm� limiting conditions and assumptions; these can only be modified by written documents executed parties. by both parties. This appraisal is to be used only for the purpose stated. While distribution ` tiara of this appraisal in its entirety is at the discretion of the client, individual sections shall not be distributed; this report is intended to be used in whole and not in part. The distribution, if any, of the total valuation in this report between land applies and improvements only under the stated program of utilization. The separate allocations buildings for land and buildings must not he used in conjunction with any other appraisal and are invalid i f l�P so used. Possession of this report, or a copy thereof, does not carry with it the right of publication. It may not be used for any purpose by any person other than theparty to whom it without is addressed without the written consent of the appraiser, and in any event only with properqualification � � written and only in its entirety. All files, work papers and documents developed in connection with th this assignment are the property of Walter & Associates. Information and opinions are verified where possible but cannot be guaranteed. Plans provided are intended to assist the client in visualizing property; the no other use of these plans is intended or permitted. No hidden or unapparent conditions of the property, subsoil or structure,wh ich would make the property more or less valuable, were discovered by the appraiser(s) or made known to the appraiser(s). No responsibility is assumed for such conditions or engineering. necessary to discover them. Unless otherwise stated, this appraisal assumes there is no ' existencc of hazardous materials or conditions, in any form, on or near the subject property. Unless otherwise state in this report, the existence of hazardous substances, including without limitation asbestos, polychlorinated biphenyl, petroleum leakage, orchemicals, � � agricultural chemicals, which may or may not be present on the property, was not called to the attention of the appraiser nordid the appraiser become aware of such during the appraiser's inspection. l�F pect2on. The appraiser has no knowledge of the existence of such materials on or in the ro c p p rty unless otherwise stated. The appraiser, however, is not qualified to test for such substances. The re p sense of such hazardous substances may affect the value of the property. The value opinion developed eloped is predicated on the assumption that no such hazardous substances exist on or in the ro p pe rt or in such proximity WALTER AI ASS CA1114:S Real Estate Va+uations & Analysis Limiting Conditions and Assumptions Page 7 thereto, which would cause a loss in value. No responsibility ` � t,� is assumed for and such hazardous substances, or for any expertise or knowledge required to discover � thern. The appraiser has examined the available flood maps that are provided p�rv�ded by the Federal Emergency Management Agency (or other data sources) and has noted appraisal in the report whether any portion of the subject site is located in an identified Special Flood Hazard Area. Because the appraiser is not a surveyor, he or she makes no guar antees, express or implied, regarding this determination. Necessary licenses, permits, consents, legislative or administrative trative authority from any local, state or Federal government or private entity are assumed to be in l p a+ce or reasonably ohtainahie. It is assumed there is no zoning violation, encroachment, a easement or other restrictions which would affect the subject property, unless otherwise stated. The appraiser(s) are not required to give testimony in urt in connection with this appraisal. If the appraisers are subpoenaed pursuant to a court order, the client agrees to pay the appraiser(s) Walter & Associates regular per diem rate expenses. enses. plus � Appraisals are based on the data available at the time the assignment is cornpleted. Amendments/modifications to appraisals based on new information made available after the appraisal was completed will be made, as soon as reasonably . . for an additional fee* Americans with Disabilities Act (ADA) of 1990 A civil rights act passed by Congress guaranteeing individuals disabilities with equal opportunity in public accommodations, employment,trans ' transportation, government services, and telecommunications, Statutory deadlines become effectiv e on various dates between 1990 and 1997. Walter & Associates has not made a determination re garding the subject's ADA compliance or non�cornplianee. Non-compliance could have a negative impactvalue; r � p on however, this has not been considered or analyzed in this appraisal. The appraiser has provided a sketch in this appraisal report p'p � rt to show the approximate dimensions of the improvements. The sketch is included only to assist the reader in visualizing the property and understanding the appraiser's determination of its size. WALTER " ASSOCIATES Real Estate Valuations & Analysis Limiting Conditions and Assumptions Page 8 Scope of Work According to the Uniform Standards of Professional Appraisal ��' sal Practice, it is the appra.lser ' s responsibility to develop and report a scope of work that results in credible ble conclusions that are appropriate for the appraisal problem and intended user(s). Therefore, the appraiser must • �dentif y and consider: • the client and intended users; • the intended use of the report; • the type and definition of value; • the effective date of value; assignment conditions; • typical client expectations; and • typical appraisal work by peers for similar assignments The purpose of this appraisal is to form an opinion of Market subject Value for the subject as of May 15, 2018, the 'as is' date of viewing, the "As Complete" as of "As p ,dune 1, C� 1 � andas of December 1, 2020 , Federal Register 34696, August 1990 as amended at 57 Federal Register 12202, April 1992 and Title 12 CFR Part 34 define "Market : e -t Value" a.s, "the most probable price which a property should bring . . ve 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 " Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: Buyer and seller are typically motivated; • Both parties are well informed or well advised, and acting in • what they consider their own best interests; • A reasonable time is allowed for exposure in the open market; eta • Payment is made in terms of cash in. U.S. dollars or in terms of financial arrangements comparable thereto; and The price represents the normal consideration for the ro e P p sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale. WALTER & _ ASSOCIATES Real Estate Valuations & Analysis Scope of Work Page 9 SCOPE. 'OF WORK Report Type: Purpose: Intended User: Intended Use: Date of Value "As Is Land Only": "As Complete" "As Complete Stabilized" Date of Report: Viewing appraiser: Market Analysis: Highest and Best Use Analysis; WALTER ASSOCIATES Real Estate Valuations & Analysis This report is designed to be in an Appraisal Report Format. The purpose of this assignment is to develop an opinion of the 'As Is', 'As Complete' and 'As Stabilized' market value of the subject property. The intended user of this appraisal includes Farmers Bank. (The appraiser is not responsible for unauthorized use of this appraisal) To establish the market value of the subject property for purposes of an evaluation for a loan request or making an investment decision. May June 1, 2019 December 1, 2020 June 15, 2018 Greg Walter A complete analysis of market conditions has been made. The appraiser maintains a comprehensive database for this market area and have reviewed the market for additional sales and listings relevant to this analysis. The subject's highest and best use, as though vacant and as improved were analyzed including: physically possible; legally permissible, financially feasible, and maximally productive uses. Highest and best use as vacant is an industrial oriented use. At 7.461 Acres, it most likely would be subdivided into 2-3 smaller industrial lots. Highest and best use as improved is an industrial facility -oriented use as currently proposed. Proposed improvements are subject to approval of the USR, which includes the industrialcondos and self - storage building. Scope of Work Page 10 Property Rights Appraised: Definition of Value. The subject is currently mostly vacant land with an existing 12,000 building leased on a on short term basis, which will be appraised "As Is" on a Leased Fee basis, while the subject "As Complete & Stabilized" will be 100% tenant occupied with leases in place. Therefore, I have appraised the subject "As Complete" and "As Stabilized" Market value as a tenant occupied facility. Based on the scope of this assignment the subject's "As Complete & As Stabilized" Leased Fee interest is defined as follows: A Leasehold Interest' is defined as: "The right held by the Lessee to use and occupy real estate for a stated term and under conditions specified in the lease." The purpose of thisappraisal is to estimate Market Value o f' the subject land and Building 3 "As Is" as of May 15, 2018, the date of viewing, the "As Complete" as of June 1, 2019 and "As Stabilized" as of December 1, 2020 . Market Value, as used in Market Value2, as used in this report, is defined as: this report, is defined as: Prospective Opinion of value, used in this report, is defined as: "The most probable price, as of a specific date, in cash, or in terms equivalent to cash, or in other precisely revealed terms, for which the specific property rights should sell after reasonable exposure in a competitive market under all conditions requisite to a fair sale, with the buyer and seller each acting prudently, knowledgeably, and for self-interest, and assuming that neither is under undue duress." Prospective Opinion of Value3, as used in this report, is defined as: "A value opinion effective as of an effective date of a spec iedfuture date. The term does not define a type of value, Instead, it identifies a value opinion as being effective at some specific future date. An opinion of value as of a prospective date is frequently sought in connection with projects that are proposed, under construction, or under conversion to a new use, or those that not yet achieved sellout or a stabilized level of long-term occupancy. Appraisal Institute, The Diction.ary of Real Estate Appraisal, 6th Ed., 2015, p. 12S 3 Appraisal Institute, The Dictionary of Real Estate A 61 Ed., 2015, p, 180 2 Appraisal Institute, The Dictionary of Real Estate A n � ras6t Ed., 2015, p. 141 WA LTE I&. S SO ClATES Real Estate Valuations & Analysis Scope of Work Page 11 Hypothetical Conditions: Extraordinary Assumptions: NOTE: For purposes of this report a hypothetical condition exists whereas the total site 7.461 Acres will be split into 3 separate parcels with improvements with the remaining 3435 Acres allocated as excess land for the "gas is" as well as the "as complete" valuation. Land allocations are on page 57 of this report. Please note, the site area totaling 7.461 Acres in the process of being split, re - platted and recorded with Weld County Assessor from its parent tract totaling 12.359 Acres. NOTE: An extraordinary assumption exists due to the subject's valuation being based upon information received both verbally and in documentation from the owner (Wayne Frelund) and plans designed by RidgeTop Engineering and Consulting. The subject is currently mostly vacant land with one existing 12,000 'F building on site. Implied is a twelve-month preparation/constr•uction time. The "as complete" value is estimated as of June a 2019, while the "!as stabilized" is projected to stabilize in one and a half years or December 1, 2020. The subject's valuation is based upon information received both verbally and in documentationfor rom the owner. Per the City of Greeley, the project has an approved USR (Use by Special Review), subject to approval of drawings. The estimate of Prospective Market Value "At Completion of Construction" of Phase 11 is specifically condition on the Extraordinary project Assumption that the as described herein receives nal approval from the City of Greeley, specifically referencing that the project can be built so long as it does not exceed quantities as specs led in the ,'?. Developer Wayne Frelund has confirmed described proposed improvements as noted throughout this report. Elements provided are expected to be completed per plans and specification in a t'mel, , satisfactory and workmanlike manner. In the event the provided information in regard to workmanship is below industry standards or as reported by owner, it may have an a, ect or impact on value. HISTORY PROPERTY ER ,HIP Weld County property records indicate the subject property is currently owned. by 1st Avenue Partners LL. There have been no known changes of title or activity involving the subject property over the p' p" past three years; however, no guarantees of title are stated or implied. LT H SLT AS a1 ATES Real Estate Valuations & Analysis Scdpe of Work Page 12 Valuation Affidres Cost Approach: Sales Comparison Approach: Income Approach: Approaches Used: A cost approach was considered and developed due to typical market participants relying on cost with a proposed facility as the subject type of property. A sales approach wasconsidered and developed because there was adequate data to develop a value opinion and this approach reflects market behavior for this property type. An income approach was developed due to self -storage facilities and industrial condominiums typically being income producing and there was adequate data to develop a value opinion with this approach. Cost, Sales and Income Approaches Market research for this appraisal was gathered from numerous sources, including, but not limited to the following: Public Records of Weld County, Property Assessors of Weld County, the Planning and Zoning Departments of the City of Greeley, Xceligent, Loopnet commercial property data services, Costar and interviews with parties to the transactions. My primary emphasis in the data research process centered on the immediate, surrounding and regional area in which the project is located. Adequate sales and rental data were located within the subject's market area of Greeley, Loveland, Fort Collins, Windsor and Denver Metro. Direct and indirect forms of verification were performed in the valuation as si ent. I personally viewed each vacant land and improved sale as well as rent comparable used within this report then made a determination of comparability based on factors including, but not limited to, location, age, condition, size and market conditions. The comparable data applicable to the valuation of the subject were viewed and photographed. The appraiser's viewing is not a detailed inspection such as would be performed by a licensed and/or certified home inspector or surveyor, The client and/or buyer should not rely on the appraiser's viewing as a warranty or guarantee, implied or otherwise, regarding any system or component of the real property. No external obsolescence was noted. No functional obsolescence was noted. WALTER &ASSOCIATES Real Estate Valuations & Analysis Regional Data Page 13 Northern Colorado Regional Data The subject property is located in Weld County, Within the City of Greeley. A brief overview of the Northern Colorado Regional Data is to follow. In addition, regional and local economies, the City and Regional Data detailing the market conditions in terms of population, employment, and other pertinent market data has been included in Addendum of this report. The region's economy and real estate market are summarized as follows: • The population has steadily increased over the last 10 years and is projected to continue largely as the result of the numerous accolades the region has received in national publications such as Sperling's Best Places, Forbes rating as 410 in the country for business and careers and Business Week Magazine. • Unemployment for the region has historically been and continues to be lower than the state and national averages, even with the recent national economic downturn. • Income in the region has seen a steady increase for the middle -income bracket of $50,000-$100,000 ($76,341 median) over the last 5 years. The upper income bracket of $100,000+ and the lower income bracket of $0-50,000 have experienced minor increases and decreases over the last 5 years. • The retail market in the Northern Colorado region is currently experiencing strong demand for quality space paired with tight supply. Rental rates continue to trend upward as available supply dwindles. The overall vacancy rate has decreased from 0.3% to 3.2% in 3 nd Qtr. 2016 to ,2.9 in 3rd Qtr. 2017, , per Xceligent 3 Qtr. 2017 survey. Weighted average Northern Colorado asking rents in all retail class types increased $3.01 psi recording $17.12psf at the close of 3 Qtr. 2017 compared to $14.11 psf at the close of 3rd Qtr. 2016. • The office market in the region is currently experiencing signs of stabilization in terms of slightly higher vacancy, however rents continue to rise in the overall office market. The overall vacancy rate has increased from 0.2% to 8.1% in 3rd to �.� �� in 3 qtr, � l 7,per ccl�.gexit tr. 20163rd . Qtr. 2017 survey. Weighted average Northern Colorado asking rents in all office class types .p's increased $1.54 psf recording $20.76 psf at the close of 3n1Qtr.. 2017 compared to $19.22 psf at the close of 3'd Qtr. 2016. Absorption is expected to be positive for the best located and maintained properties. • The industrial market continues to be extremely tight in the Northern Colorado market, particularly Larimer and Larimer Counties. The overall vacancy rate has decreased from 7.1% in 3rd Qtr. 2016 to 5.9% in 3rd Qtr. 2017, per Xceligent 3rd Qtr. 2017 survey weighted average. Northern Colorado asking rents in all classes increased 4.6% recording $9.64 psf at the close of 3 Qtr. 2017 compared to $9.22 psf during 311 Qtr. 2016. The apartment market is very strong in the Northern Colorado market due to job growth and demand that continues to outpace new construction. Fort Collins and Loveland vacancy rates are at 3.1%, while Fort Collins's vacancy rate is 3.0%. Rental rates continue to climb with Fort Collins/Loveland average rent at $1,315.28 and FortCollins's subtnarket average rent at $1,301.27 per month. This market data was derived from the 4th Qtr. 2017 Colorado . ulti_ Family Housing Vacancy Survey. • Residential development is currently booming in Northern Colorado due to increased population, low unemployment and low interest rates. The average sale price of a single-family home in the City of Fort Collins in 4th Qtr. 2017 is $366,500, up 7.57% from 2016 at $340,700, up 4.83% from $325,000 in 2015, up 15.66% from 2014 and up 7.66% from 2013, per Colorado .Property. corn Tres. The continued population growth is driving the high demand for housing and supply is low, which continues to drive prices higher decreasing affordability. WALTER & ASSOCIATES Real Estate Valuations & Analysis Regional Data Page 14 Regional Map (Northern Colorado) playannt r r, Is 0477 1 T" -"-- EildfB et:whim Subject q�..+ • �j ben. c,1 q.•• �•'..�.. r II "err— .Ita r 1 O I:I - I II fle o a • J b.• r •ru r •a JI �. n f`. `' f ;cIf1Ylttica IAft i c Yi t .I{. ',y aj z_ _ Jr'IM4 t I Wawa I II iif le W ;lib ..- * •r4 A w u -a a N 4! � I oa km a' 14.E •s , „ v Weak i el 3 l 4 I P r tr 'L) 6. 12 1? 24 30 :WALTER Sr ASSOCIATE'S Rea] Estate Valuations & Analysis Regional Data Pale 15 Subject Neighborhood A neighborhood can be defined as a homogeneous grouping of inhabitants or roe usage. property Since environmental, govermnental, social, and economic changes can influence property values, it is necessary to identify these trends that affect the environment of the property being appraised. . � � � pp alsed. The subject is in the City of Greeley, Weld County, Colorado. General Description: The subject area includes eastern portions of the City of Greeley as well as the western fringe g of Unincorporated Weld County. Commercial uses along U. S. Highway 34 business route 10th Street) are primarily office and retail toward the west side of Greeley and retail in the central and east parts of the subject area. Industrial uses are mostly located along H. S. Highway � y 8 which tuns north /south along the eastern corridor of the City of Greeley. The subject neighborhood y .� � hood area is mostly a mix of industrial/commercial uses and also includes pockets of vacant agriculture land. Location/Boundaries The subject property is located in the eastern corridor of the City Limits ofGreeley adjacent to the ,� southeast of the U. S. Highway 85 (By-pass) & Highway 34 (By-pass) interchange. The subject neighborhood is bounded by: Weld County or Balsam Ave, to the east, Weld County Road 54 to the south, E 8th Street to the north and 59th Ave. to the west. Access Access to the subject neighborhood is via (U.S. Hwy 34), which continues east/west on the southern fringe of the City of Greeley. Hwy 34 By -Pass connects with US Hwy 85 By -Pass within 0,15 mile to the northwest, and to Interstate 25 about fifteen miles to the west. Topography Topography of the neighborhood is generally level. There are no known adverse soil or subsoil conditions, or environmental hazards thatwould affect construction on the site. Utilities All public utilities are available to properties in the subject area through the city or public utility companies. This includes: electric power, natural gas, domestic water and fire � sanitary hydrants, itar y y sewer, and telephone service. Zoning Portions of the neighborhood are generally zoned "RMH", Residential Medium Dens ity 1ty sporadically to the east and north of subject along the east side of Highway 85. In addition, zoning districts primarily consists of "IM's -Industrial Medium Intensity and "J -L" -Industrial Lo w Intensity running north and south along US Hwy. 85. WA I T'MR & ASSOCIATES Real Estate Valuations & Analysis Neighborhood Page 16 Employment Due to its location, the City of Greeley benefits from all employers in the tri-city region. Major employers in the area. include: JES USA & Affiliates, Banner Health: Northern Colorado Medical Center, Greeley/Evans School District 6, State Farm Insurance Companies, TeleTech, Select Energy Services and University of Northern Colorado. Leprino Foods has opened a $270 million cheese factory in Greeley, Colorado, The plant has created 500 new jobs for the Weld County labor force and bring a much -needed boost to the local dairy farmers. The factory is projected to generate $15 million over 20 years in wages and in direct and indirect spending. To supply the milk for the cheese production, the dairy fanners in the area are expected to bring in 80,000 additional cows to their herds which may double the current milk production. MS S employs over 3,000 in its Greeley beef production plant while serving its customers around the United States and exporting 30% overseas. Banner Health: Northern Colorado Medical Center employs over 3,000 while they strive in providing the latest health care facilities and technology to Weld County. A few services provided at this location include: behavioral and mental health, family medicine, maternity and rehabilitation. Weld County has a 2.6% unemployment rate as of Pt Qtr. 2017. Trends and Development In 2016 Greeley was named the fourth fastest -growing metropolitan statistical area in the United States. Oil and gas rich areas in Wyoming, North Dakota, Utah and Texas have all seen a drop in their population while Weld County grew by over 9,000 during a 12 -month period. The number of oil and gas jobs increased from 51 last year to 166 this year. Weld County now has a strong mix of agricultural, oil and gas, manufacturing and health -related industries, which remained strong even with an oil and gas downturn in the last two years according to a March 24th, 2017 article in the Greeley Tribune. Commercial and retail uses in the western portion of the subject neighborhood include Greeley Commons that consist of 13 8, 818 square feet retail development on the southwest corner of 47th Avenue and U.S. Highway 34 and CenterPlace that consist of 119,090 square feet of retail on the northeast corner of 47th Avenue and U.S. Highway 34. North of CenterPlace is the mixed -use master planned Fox Run development. The Village at Fox Run includes approximately eleven various sized retail pads; some sold and some for sale, Additional new development along U.S. 34 (business loop) includes the Northgate Village located at the southeast corner of 10th Street and 71' Avenue. This center is approximately 140,000 square feet and includes King Soopers, 19,000 square feet of shopping space, and five pad sites for sale or lease. WALTER ASSOCIATES Real Estate Valuations & Analysis Neighborhood Page 17 Larger commercial uses on the west side of Greeley include the 590 -acre Promontory office development at the northeast corner of U.S. Highway 34 and Highway 257. This corporate office park emerged in 1999 with State Farm constructing regional corporate offices in the park. In 2000, ConAgra (now JBS USA & Affiliates) relocated its headquarters to Promontory, while State Farm Insurance also has its regional headquarters in Greeley. U.S. Highway 34 Bypass Corridor includes several shopping centers. The area has a wide range of retail uses including big box retail, strip centers, restaurants, and auto dealerships. The Greeley planning department includes U. S. Highway 34 corridor between Greeley and Interstate 25 as the focal point for future economic development in Greeley. The City developed a 2020 Comprehensive Plan specifically indicating the U. S. Highway 34 corridor as a top priority for future growth. The intention is to encourage moderate to large employers in clean industries that demand high -quality facilities that generally have low water needs. Residential development is planned on the perimeter of the employment area. The Plan views this area as the "gateway" to Greeley. Surrounding Population Northern Colorado communities referenced below include Greeley, Fort Collins, Loveland and Windsor. The following charts provides an analysis of population trends from 2010 to 2015 within the major metro areas of Northern Colorado. Northern Colorado Population 18O,OO0 160,000 140,000 120,000 100,000 80,000 60,000 40,000 20,000 0 2000 2005 2010 2013 2014 2015 Greeley 78,385 86,679 93,203 95,411 98,596 100,883 -Windsor 10,360 14,316 18,763 20,427 21,106 21,751 ,Loveland 51,881 60,067 66,997 71,334 72,651 75,182 Fort Collins 120,062 129,497 144,505 152,061 156,480 161,175 - Greeley Windsor r Loveland ��Fvrt Collins WA LTE Lt & ASSOCIATES Real Estate Valuations & Analysis Neighborhood Page 18 160 000 140 000 120,000 100,000 80,000 s0.o00 _ 40 000 _ 20 000 Fort Collins{ CO Gresloy. CO Lo &Iatitf Windsor, CO 0 1990 1991 1992 1993 1994 1995 1995 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 1991 1992 1993 1994 1915 + 1996 1997 ` 1996 1999 2000 2001 2002 r 2003 2004 2005 2006 2007 20D6 2009 2010 2011 2012 2013 Data from U S Census Bureau Last updated: Oct 11, 2016 02014 Google • Help - Terms or Serilc -linty - Disclaimer - Discuss University of Northern Colorado The University of Northern Colorado (UNC) is a coeducational public University located in Central Greeley. The University has a strong background in nursing and teacher education and offers several undergraduate programs in the arts, sciences, humanities, business, human sciences, education and nearly 50 graduate programs; primarily in education. Undergraduate degrees are typically 4 -year programs and degree programs have a strong emphasis in liberal arts education. According to a Wikipedia account, "The University of Northern Colorado is the third largest university in Colorado". According to UN 's web page the student enrollment over the last few years is as follows: University Year (Spring) of Northern Colorado Enrollment - Total Student % Change Enrollment 2014 11, 461 N/A 2015 11,290 •-1.49 % 2016 11,402 0.99% 2017 12 260 7.52% According to the table above student enrollment continues to grow creating demand for off -campus housing. WALTER LTERR SOCiA.TES Real Estate Valuations & Analysis Neighborhood Page 19 Neighborhood Summary In summary, the subject neighborhood contains convenient access to all parts of the city as well as easy access to the University of Northern Colorado, just one -mile northwest of the subject. US Highway 85 is within 0.15 -mile northwest of the subject connects to the Highway 34 Bypass to the south providing easy access to the west corridor of Greeley. The subject immediate neighborhood is in the revitalization phase of its life cycle with older buildings being remodeled with a consistent use. In addition, Greeley's CBD is located within 23 miles northwest of the subject. There should be good demand for self -storage facilities as well as remaining undeveloped land within the neighborhood. In addition, the neighborhood's proximity to the larger communities of Loveland, Windsor, and Fort Collins provides a stable employment base and ample amenities. WA WALTER & ASSOCIATES Real Estate Valuations & Analysis Neighborhood Page 20 Neighborhood Map gurbi 3O1 hi Ai et' iad6on Luta l 20181 ST i Data use subject to license, O DeLorrrse. Deism* Street Atlas U S 2015, ,detarme.rom WALTER &T ASSOCIATES Real Estate Valuations & Analysis 4U X: ST 1 ":�l4TH ST } A 28241t,'Aire. (SuFa�s,i e 29T$ ST Soto Philo i t ST sconsav A NiNt kg fn at .IP a ,< mi MN mos E) Neighborhood 3AV HJJJ1Q r. i f _I assopmmisomegi qty IIINLS]14 _I�k, VIII" "St talta ft S00 1200 1900 2400 3000 Data Zoom 134 Page 21 Subject Neighborhood Photographs WALTER & ASSOCIATES Real Estate Valuations & Analysis Viewing south at Riverview Farm subdivision, which is located adjacent to the east of subject. Viewing west at BMA Industries, which is located across street to the west of subject. Viewing east at the ongoing development of Power Equipment Company, which is located adjacent to south of subject. Neighborhood Page 22 Site Description The following description is based on my property viewing, assessment records, Weld County maps, and information provided by the managing company. i Location: Site Size: Land Use Restrictions: Shape: Frontage: Access: Visibility: Topography: Soil Conditions: The subject site is located at the southeast corner of 1st Avenue and B 28th Street, or more specifically at 2824 1st Avenue, Greeley, CO. The site has a total area of 324,985 S.F. or 7.461 acres, per provided site survey. For purposes of this report a hypothetical condition exists whereas the total site 7.461 Acres will be split into a 4.12 Acre improved sites with the remaining 3.35 Acres allocated as excess land for the "as is" as well as the ;`as complete" valuation, Although no authoritative report of title was provided or reviewed for this analysis, there does not appear to be any unusual encroachments or restrictions that would adversely affect the utilization of the site. The site described as Phase II is mostly irregular or "L" shaped. A site survey showing dimensions was not available to appraiser. Therefore, using the Weld County measuring tool the subject frontage along the east side of Pt Avenue is about 14'+/- and about 663'41- along the south side of E 28th Street. Access to the subject site is from one driveway along the south side of B 28th Street as well as one drive along the east side of Pt Avenue. Subject site has good visibility from 1st Avenue and E 28th Street. The site is mostly level and at grade with neighborhood properties. No soil report of the subject property has been made available or reviewed; however, it is assumed and appears that the soil is of satisfactory load -bearing capacity to support the structure. No evidence to the contrary was observed upon our physical viewing of the property. Drainage of the site appears to be adequate. WALTER & ASSOCIATES Real Estate Valuations & Analysis Neighborhood Page 23 Utilities: All utilities are on the site and assumed adequate. Environmental Issues: Encumbrance Easements: I was not provided a Phase II environmental report nor qualified to detect the presence of environmental hazards. My value opinion assumes there are not any environmental hazards on or about the site that would result in a diminution in value. I did not observe any obvious signs of environmental hazards during our viewing of the property (See Assumptions and Limiting Conditions). I was 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 the value due to land use restrictions. (See Assumptions and Limiting Conditions). Site Improvements & Owner did not specify detailed landscaping. Proposed landscaping is Parking: assumed to meet City of Greeley code requirements. Parking: Proposed parking is assumed to meet City of Greeley code requirements The immediate surrounding uses of the subject include a mix of mostly residential properties to the east and industrial uses to the north, south and west. Light industrial uses exist to the south and westwithin the immediate area of the subject, zoning: zoning for the subject site is classified by the City of Greeley as (EM) - Industrial Medium Intensity District, with a Development Concept Master Plan Overlay. The purpose of I -M District is to provide for the development and protection of industrial uses along with commercial support uses. Such uses may be found along arterial streets and highways and rail corridors. Surrounding Uses: The proposed use of the subject property appears to be a conforming use based on our review of public information. A portion of the Industrial Medium Intensity District Zoning Regulations can be found in the Addenda of this report. I am not an expert in the interpretation of complex zoning ordinances, but the proposed use of the subject property as a mixed use industrial facility appears to be conforming to the zoning and the surrounding neighborhood. WALTER & ASSOCIATES Real Estate Valuations & Analysis Site Description Page 24 The appraiser knows of no deed restrictions, private or public, that further limit the subject property's use. The appraiser cannot guarantee that no such restrictions exist. Deed restrictions are a legal matter and only a title examination by an attorney or Title Company can usually uncover such restrictive covenants. Thus, it is recommended that a title search is conducted to determine if any such restrictions do exist. Environmental Disclaimer: Unless otherwise stated within this report, the existence of any hazardous material, including without limitation asbestos, polychlorinated biphenyl, petroleum leakage, or agricultural chemicals, which may or may not be present on the subject property, was not called to the attention of nor did the appraiser become aware of such during the appraiser's viewing. The appraiser has no knowledge of the existence of such materials on or in the property unless otherwise stated. The appraiser, however is not qualified to test for such substances. The value opinion developed herein is predicated on the assumption that no such hazardous substances exist on or in the property or in the proximity thereto, which would cause a loss in value. No responsibility is assumed for any such hazardous substances, or for any expertise or knowledge ledge required to discover them. WALTER & ASSOCIATES Real Estate Valuations & Analysis Site Description Page 25 Zoning Map (I-M)-Industria1 Medium Intensity District W. a Development Concept Master ter Plan Overlay City of Creeley Official 2017 Zoning Map SIPS Development Concept Master Plan ROW Vacations Conservation District (C -O) Commercial High Intensity (C41) Commercial Low Intensity (C -L) Holding Agriculture (Ha) Industrial High Intensity 0-H) industrial Low Intensity II -L) Industrial Medium intensity (I -M) W LTE & ASSOCIATES Real Estate Valuations & Analysis Site Description Page 26 Flood Map According to Federal Emergency Management Agency (FEMA) map 08123 1543E, dated 1/20/2016, the subject is located in Zone "r, which is an area located outside of the identified 500 -year flood plain, Note, I am not an expert surveyor in the interpretation of flood map information, but the property appears to be located as just mentioned. WALTER ASSOCIATES Real Estate Valuations & Analysis Site Description Page 27 Parcel Map �' �8. 15 GIS ,C aFcarlia!ri�,�'cres . _, STATE DEPT hF HIGHWAYS__ 3.273 G Oallicyialtsrtl Acres S TrAATEO DE P B F I Ors. E CENTER 2ND RPLT .alculatedAcres i ALL -WELL LLC •mi s Cil la 4 28"--4 ALL E L L L L C �tT83� fir., $r aicClalial Acres;* LINEAGE MASTER RE 3 LLC 10.23 GIS Calculated Acres V tC ELE COMMERCE CENTER 1ST RF'LT TRACT A 'AME R C E C E N TE R 211 INVESTMENTS LLC 6.021 GIS Calculated Acres uIv?_ .. .20M WA LTER & ASSOCIATES Rea! Estate Valuations & Analysis 5.7711,4iIalcu ate Ana ANICN 8S rieakcIN _ W' _ -9.?25 GISIC ill! 12.359 Acres MILLER FARM MICR 2ND RF'LT 12.364 GIS Calculnied Acres 1S T AVEIJN E PARTNERS LLC fe- MILLER FARM MINOR 7.035 GIS Calculated Acres POWER EQUIPMENT COMPANY DOW DALE 'ZIA irr".� -I Malec Acres Site Description antt aail:IpsIRErI RD _.... . RIVERVIEW F� 1'12�f1 p,Irs:i`1$ E E�T!L ICJ E - Page 28 Subject Aerial Overview tilMrmaTplibia '•. WA L FE1t ' A_,soC:.1A'r! s Real Estate Valuations & Analysis Site Description E •2i Ili Si HIGHWAY''-.3*BYPtyf.— li. 1� L t • Ste' jjam�,, ^ . •. ;a.3V43 3 '094, � °. n4i;3ka1'ic.1i1'U"L 1- alligrs et- rams-- _ ea c�� i��i WS. mike ,ra112;11r ..414 Sib 44` OOPS g 10:0-1),Ve 2 1 J2; V , 3 a .102:12.10:1"4J20326/400 :4124 ri rerr:m 1/44 "�k ""hr 72 8215') 31Q5 -31:1:91.1:j2-3:3 Z9:4:D5T " .i $ �y QII 1 Nei ti :.....•E 28IT I1S 7R ,-- Zi9_1; '+I; o 1.9:3. , :92 :' gyp+ 4 lot' "" , I�!fil_13i 1 lteas ,..44.1,9.,;4,1 �L9�' L .00'I 6 112310 , I , "- ,tea. a �..� . _ _ d °if R. _ itl e, .ate=k _.. - III ,ILI.I a" 403i3S11-9i375:q1-321c :4' 4915/11e0e47.67 61°41 Page 29 Site Survey t1Y f n CiWA IWI foal J'IIIHi L$ - IT+,E( 71.44 Subject Phase II I g 51 rri LP tt1Agasua two oarrc • OS mist( aa 290.001 Z S PIP or_ LOT I 1X`ai V a� &,!-51'20 L-47,05" ++j� r ChB.PJ44"qqR"4O E5 CW.s42.371 = - 1c_g 4tur..etWru4 7 A. I : r tra & WWI WI A T Real Estate Valuations & Analysis tpmr� a r \-14.51301,1 Subject: Phase I1 Vitt 50010(127* U.≥ Z 53$ 101 2 ,( I��I3/�0� a avr. $eer3 IMES gel6 Wpm an. 1d aoiletie n+rwit swoon at /iwr 4WD° J®x, 7fil trot, t i IKON +h IN Pt so FA woof p IPITCPP Site Description immarw.m•aaa- VcaseZa'.s a; Subject Phase r ti 1ST AVENUE Ike RMCH I of 'OW +2 IS' t 44EP CiJa U.' OM 1 4'14 al' la VIM .na 1.141. i Subject .Phase i W I ittitf nit uza'wit - A 1T 1 tkMftI" loll 'Mar Page 3D n0PM$ WIN Aix N "St. Subject Site Photographs "As Is" WALTER S: ASSOCIATES Real Estate Valuations & Analysis Viewing south of subject's existing improvements and primary ingress/egress from E 28Th St. Viewing northeast of subject's existing improvements. Viewing west along B 28th Street along the north boundary of subject. Site Description Page 31 Subject Site Photographs "As Ls" I 'WALTER STASSOCIATES Real Estate Valuations & Analysis Viewing west of proposed building site from the northeast boundary. Viewing east of north boundary and proposed building site from 1 st Avenue. Viewing southeast of proposed building site from 1St Avenue and southwest boundary. Site Description Page 32 Subject Site Photographs "As Is" Viewing northeast of proposed building site from Pt Avenue and southwest boundary. Viewing south along Pt Avenue from the E 28th Street intersection. Viewing east along E 28th Street from pt Avenue intersection, 1N/ALTER ASSOCIATES Tl Real Estate Valuations & Analysis Site Description Page 33 Subject Improvements The following description is based on discussions with developer, Wayne Frelund as well as review of the plans designed by RidgeTop Engineering and Consulting (please see extraordinary assumptions). Please note, elevation plans describing detailed building components of proposed buildings were not available to appraiser. Building descriptions to follow are based on typical mini -storage and industrial multi -unit condo construction. The following table includes the "As Proposed" gross square feet derived from the building plans provided by developer: r GENERAL- Proposed SeltiStorage Facility & Industrial. Condominiums s Property Identification: For purposes of this report descriptions to follow are for the subject's individual units/condo building 'as complete' as of July 1, 2019 completion date. There is an existing 12,000 SF self -storage building on -site (Bldg. 3), while the remaining two buildings are proposed. The subject ect property is a proposed 8,820 SF industrial building (Bldg. 1) that will include 6 -condominium units of same size, as well as a proposed industrial hybrid 13,500 SF 20 -unit self -storage units and remainder 13,500 SF clear span warehouse space (Bldg. 2). Each building consists of steel construction on a slab foundation. Please note, Phase 2 is presently improved with (Bldg. 3), which is a 20 -unit, 12,000 SF building. Construction Type: Marshall Valuation Service, Class S, Steel frame Construction Quality / Year Built: Blended Effective Age: Remaining Useful Life: Condition: Areas, Ratios Numbers: Average to Good Cost (Bldg. 1) — Proposed I New Construction Average to Good Cost (Bldg. 2) — Proposed / New Construction Average to Good Cost (Bldg. 3) — Existing / 2017 Year Built New Construction / Blended 45 years (Avg. to Good - Marshall Valuation Service) New Construction Number of Stories: 1 -story (3) buildings. 8,820 SF proposed — Units / (Bldg. 1) — Condominium/6 Units 13,500 SF proposed — 0 Units (Bldg. 2)e— Hybrid / Self -Storage 13,500 SF proposed — Warehouse (Bldg. 2) — Hybrid / Clear Span 12 OOO SF existing y- 20 Units (Bldg. 3) — Self Storage 47,820 SF Gross Total, per provide plans and specs. Land to Building Ratio: 3.75 to 1 "as complete", excluding allocated 3.35 excess land. WALTER & ASSOCIATES Real Estate Valuations & Analysis Subject Improvements Page 34 Improvement Description — Building I I As Proposed Industrial The sketch below shows the potential floor plan for the 8,820 SF, 6 -Unit Condominium: industrial condominium building that will be advertised by owner as "Man Caves". The actual configuration was reported vaguely to appraiser as having some build -outs that consists of a restroom and a small office area. In addition, the units may or may not have mezzanine areas. Each unit will have an overhead door in the rear and a storefront -type fa�ade elevation at front. Construction is steel frame, clear height 16'-l-/-, sprinkler system, fixed frame windows, *fire er.zr Fi,st Avenue Man Caves - Greeley, Co For Sale or Lease sark 1 S+ 4: wra'e . lime r: . a - 1 eras SOS -tr5 .-1 t •F�t F Improvement Description — Binding -- 2 / As Proposed l e l 1 Hybrid Industrial/Storage Building: Y a In its "As Proposed" Phase II, plans also call for a hybrid 27,000 gross square foot fabricated steel constructed temperature -controlled building. Configuration of building consists of half or 13,500 square feet, 20 -Unit (15 x 45) self -storage units at a 16'+/ -clear height. The remainder of the hybrid building 13,500 square feet consists of clear span warehouse area with no interior partitions with a 24'+/- clear height. The actual configuration was reported vaguely to appraiser due to no elevations/plans being drawn up to date, per developer. WALTER a ASSOCIATES Real Estate Valuations & Analysis Subject improvements Page 35 improvement Description — Building — 3 / As Is — Existing! Self -Storage Building: In its "As Is" Phase IL is an existing 12,000 gross square foot fabricated steel constructed non -temperature -controlled building. Configuration ration of building consists of 12,000 square feet, 20 -Unit (15 x 40) self -storage units at a' - clear height. Each of the 20 -units has an overhead door. Units are offered as open space with no interior build -outs or sprinkler systems. Building is situated at the ingress/egress off of E 28th Street. WALTER ASSOCIATES Real Estate Valuations & Analysis Subject Improvements Page 36 Site PJan rani • I IS 1S di r A Ili u t ,T' IrI tT I i t l i I, 111(IJIII� a,�l 1. w p ti I Subject Fl a —,r-i I 1 4 c 1 4 . ;at X ,SISS4)tit 'I'I ,ti Real Estate Valuations & Analysis i I --r 1 41- 1 I M I p „ 1 U :w1 t . p 11111L 111('l -III -ill .ITVd�...del_III 1rllit II [I I t I I w I I I I I' I 1 I T I I I C I II I' V Qi.Rt-UT A vim ACiie5 as nr Mi MO i a• 4 OF ses!'! a i a a Yj� JF ii •h .,. t nart- :+q' 1bi�\2"}+�•kc! •�L�J*i I \ {. R 1'}L�1-•\ ��;(was,. dpi . . l ; Imo• ' . — -+_ Yt.f .J'. .Y .`r was I r IIia li-LJ;I,1 111l L I.l.(1 l a1:UPI.I4 a a is. es a s 1ST AVENUE. eft Subject Improvements Y a _.—a fla� a e mos Page 37 .. .. r JPI I! J.1 ,'a rKdr.7(] •..,'I 15_:•,a I i Sawbjccl Hiatt I • I I 1 4 1 1 1 :.14 41 4I t -I Y._ a- a a. _ t r - 'iv P.* - 'aim a 0114111 *raa.4' r>,eZ • !i �III *di Oda .5 r riira! . 19T A1VEN UE • STORAGE IMAM MAW tom,. WINDHAM DEW LOPII4ENTS INC, Fifa Sim 1111141:44511. ��•w .-J - APMMSA1, SET Taal Dm I SW.* i I mania dr Model* sea; Sim =...• anal e'i1 ,41.C MAP ouvisi 1:a Site Development Phasest*NOTE -- Only the vacant land with existing Building 3 and proposed Phase 2 - Buildings 1 & 2 are described and appraised within this report, The remaining phases of construction with proposed improvements were not given value or consideration Merin this report. IN W li a a _ non Medea asa a see on Sae an =Sam raiat-fir I Mt Ilia PA CTIOD u in SM. a SOM. - S Subject ?hosein_ a Ii a++++l+�.i• 7 +1 .r,y.. t li ^may 3q r4i . i �i i r' il ti *a -. r'tirT'ilsllk�,•l�i ;P +ljt'y:,;.+t" r. r �., er� a rye-. ..-:a li(••Y j..i r4, a+... L+'Y etsmith 11'71 A't+rP.I, 4 I I i'ti I it ltt i 1I IaI 1$''I 11q I+a 1._41 a 1..+ i a,49,4N WP -94.11 49•9••One OBIS line apnea ■ I■ aI Inarl IIM I . a 1P1$1 'rT I 11' I I I 11i10 lilt Subj'Cl'.t E'h n .c I --41•alp■. 1 r r••• •• • .1.1.Yy.l4! • ii4 r tl i:; S3iwif;U'T-17ps Real Estate Valuations & Analysis Subject IrI1pro4rements Page 38 LEGEND itt 311 Pn& L DATA t■■ If PHASC 6P.PLAK owN ,p,iI a •al 'trill I I ar AWN Plan I CT AVENUE STORAGE MASA. R.ylgj 44 N algaIY r -1; ra N. lie 'Milli is• .{Sr wi�t'A < f■ �1�iC ; 1p ' '� .1 E • . Ii r DE V ELopM g ✓ ES r n$- I I P■ INC. r e r 1 • !7 r HS • i tr rtrfs PHASE TABL a -A - -■ r n Ill 9 Ps • !n■rlit. -- 4-.rt . w ■ dit id:a _ ti i. 1+ R+i I +i 1 • L I aka la ar tenth �Yr4Y. t4 APPRAISAL ,fir art k .* S.41>Ut T 7O518/4/ trawls 1•MAW 43 dee ira CalliaubLit a■ aur 317/2014 KVITIP1 DUILata6 ti PAN. PH -1_0 1 •,.■leant We.1 Iirlrr:afAi 7 a 12 Real Estate Assessments. and Taxes Tax Authority Assessment Year Assessed Values: Parcel Number Assessed Value f Taxes (A. sals) Current Mill Levy Rate Total Estimated Tax Amount Tax Assessments within Colorado WALTER & ASSOCIATES Real Estate Valuations & Analysis Weld County Treasurer / Taxing Authority 2017 Weld County Parcel Number: 0961 1219001 Assessed Value: • Improvement: $113,010 • Total Land Assessed Value; $154,120 • Assessor's Actual Value: • Improvement: $389,686 • Total Land Actual Value: $531,446 83.275 2017 Payable in 2018: Total Taxes: $23,922.42 - *Note, taxes above are for the property "as is" on larger parent tract with a Phases included, with existing Building 3 and does not represent remaining proposed improvements within this report The lax information below represents the "as complete" tax valuation within this report. The "as complete" value is assumed to be reassessed in the near future onceproposed improvements are complete and taxes are projected to be assessed accordingly. Real estate in Colorado is revalued by the county assessor every two years (odd years only). The most recent re -assessment of the subject will occur in the I St Qtr. 2017. It should be noted that the above market value and assessed value indications are reflective of the recent reassessment in 2017; however, the property tax component 'total' reflects the property taxes due and payable this year, , which consider the assessor's valuation from 2017. The State ofColorado has provided for a unified system to assess real estate for property � operty taxes.. Appraisal districts are established on a county basis to assess sess real estate within the county. The individual taxing authorities within the county set their owner tax rates. Taxes and Assessments Page 39 Industrial Market Analysis sis Rents and Vacancies The subject general Northern Colorado market area of Fort Collins, Loveland and Greeley was used as an indicator of market statistics, I have relied upon a published document from eefi ent' ra Quarter 2017 Industrial Market Study within Northern Colorado that shows vacancies - in each sector reported as follows: raft -as Corr No At -west LVL- t -I5 +Garr So L1L-East LVL-tiorth LVL-South Overall By Market and Specific Use Market Name Specific Use PC -1-25 Corr No Flex Lt Ind Mfg Whse/Di t Subtotal PC -North Flex LI Ind Peg WhsielDisl Subtotal PC -South Flex It hid d WI.,.eJcThn Subtotal Fe -Windsor Flex Lt hid wise/Dist subtotal u m ti erlise 0itt Subto to l Flex Lt Ind tnlc W/Ott Subtotal Flex Lt Ind W */0151 Subtotal flex Lt md MA{ is'ihse f Dis Subtotal Lt lad Subto to l jjFin `Lt ind Subtotal flax Li lad Whit/CSI Subtotal Direct Vacancy Rates By Market Quarter Veer 30, 2016 4Q 2016 1,9% 19% 04% O 0% 0:0% 0.096 0,0% 0.0% 016% 0. 7.1% 6.29 2..6% 2.6% 100.D% 0.0% 9.34 9.5'96 12.2% 4.4% 5.0% 5.6% 0.0% 0.0% 12 6% 12.4% 6.1% 0. 0.1714 0.0% 0.0% 0.016 0.0% 0.0% 9.8% 9.8% 1.,7% 1.7% 0.0% 0.046 0.0% 0.096 010% t0 0,0% 1.9% 0.5% OA% 0,0% 0.0% 12,6% 12.+6% 5.0% 5.0614 1,694 0.0% 0,0% 0.0% 0.0% 0.09E 0.5% 0.0% 1.4% 2.7% 1.5% 6,5% 0.0% 0.096 4.7% 1:1% 1.1% 2,9% 0.0% 0.0' 0.0% 4.0% 0.0% 0.0% X0.0% 0,0% 0.. 1.2% 0.0% 0.0% 0.0% 00% 0,0% 0.5% 70 s.% 70.1% 3.4% 3.5% 75.9% 73.9% 0.0% 0.0% 25.7% 2~5.T 1Q2017 2Q2017 3Q 3017 1.9% 1.9% 1.9% 0.0% 0.0% 0.[i1% 0.0% 0.0% 0.0% 0.0% 0.0% O.Q+% 0,6% 0,6% 0.6% 6.256 6.2% 11.4% 4,4% 33% 3% 2.2% 0.0% 0.0% Off% 1,8% 1.8% 1.8% 4.1%1 3.5% 4,3%1 5,$% 5.0% 5.0% 13.,2.% 13.2% 13.2' 12 Jo% 12.0 6 12.6% 9.1% S.IIt% 0,0% 0-0& 0.0% ,�0■.[y0/}5��#�1 0ai[�G�16 ■y0,(�.}.i V,0% 0,0 46 0l� 0.0% 0.0% 4.1"! i 0.0% Oat +i 0.%% 0. 00% 0.x1%6 0.ii +i 0.0% 0.0% 11.0% 0.0% 0.0% t0.O + 1,9% 1,9% 0.714 0.6% 0.6% 0.0% 0.0% O.n 14A% 12 6% 124% 5,7% 3.0% 5,0% 0.0+6 0= 32.$% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 9.6% 0.0% 0.0% 1.1% 10,(33%% SS'a%7.(11%�� 0,T -. 0 . 0% 0.0% s _5% .5.2% 1.3% 6,2% 5.6% 3,1% 0.0% 0.0% 0.0% 0,0% 0:0 6 0.0% 0,0% 0.0% 4.0% 0.0% 0.0% 0./4y 3.. 1-1% i 0.0 0.0% 0.0% 0.0% 0:0% 0 046 0.0% 0.5% 0.2% 0,0% 69..9% 69 9% 69.9% L7% 1.5% 1.5i° 75,9% 75.9% 49.0% 1.6% 1.6% 5.7'% 2.5.6% 25.0% 25.2% 6.4% 6.0% 5.9% 3O 2017 Mark 7ttr� ; 20x7 4 9t�£�r (eel ,qi� ltil nns. tq«�' 3 WALTER ASSOCIATES Real Estate Valuations & Analysis 2.4 Oki, 21 .096 18 054 13 OW 120% 909i 6 d 30% t. Y its U2 1 C.1 }. CLe rr3 Northern Colorado By Specific Use 1t 42% 1b0% 14 09f. 12 ac 10 0% 8 0%f% E Q4 20% ' Flex tt pad 3Q 2016 SQ 2016 IQ 2017 National by Specific Use 0% 6 0%• 1.0% 4W. 30% 2 0% 1 0% Mfg L_,• ri • wh., 20. 2017 302037 Flex MI It Ind "Mt Witte,/Dist 3t], 4014 4Q 2016 1Q 2017 0, 2+317 30_2017 Market Analysis MAMMA DATA EV1tRYw:HELtt- Page 40 Per, Xceligent market trends table on previous page indicates direct vacancy in overall Northern Colorado Industrial Market has decreased from 7.1% in 31d1 Qtr. 2016 to 5.9% at the close of 314 Qtr. 2017. Northern Colorado industrial market recorded 79,900 SF of positive absorption during g rid Qtr. 2017, which is upturn negative 43,031 SF recorded in rd Qtr. 2016. The following page represents Fort Collins, Loveland and Greeley's and overall industrial . s specific direct weighted average asking rates by class. DirectWeighted Average Asking Rates (NNN) By Market and Specific Use Quarter Year Market Name Speak Use , 34 2016 4Q 2016 Fe- I-13 Corr No Flex - $10.50 It irtd $16.00 $16.40 A/1ft Subtotal IC -North Flex It Ind Mfg whsejoin4 Subtotal FCC -South Flex it Inca whsejDi t subtotal Fe -Windsor Flex L# Ind Mfg Whse/oist Subtotal {GR-i5 tort No Lt Ind W h secnist Subtotal MGR -East flex LIIntl 5900 $9.000 Mfg Whse/Dist 511.00 $5095 Subtotal $11.95 sass G9 -went Flex Lt Ind whsefoict Subtotal t L` I-25 Corr So flex - ;,x.7.5 Lt lrid ' $10.61 $9.00 59.04 Mfg Whse/oist $4.45 $B.45 $11.62. Subtotal LVL.-cast tt Ind rhsei'nin Subtotal LA/L-North Flex LVL.-Southt Overall tt Ind Mfg Whse/D►ist Subtotal Hem L1 lnd Mfg wineetin subtotal • a 10 2017 $16.000 Zia 2027 - S16 cm $16000 $1540 $16.00 $16.00 $10.40 $11.72 $1f-79 Sian $6.0? $574 S.59 $ 6.76 - . t $3.00 $8.00 $0.00 $11.00 Sass $931 $9.71 510.7.4 $13-01 $13.99 $13.08 $16.00 .$7.0 $6.2$ $_+66.99 $4.99 .a Sass $0.95 S.95 $9.50 $9463 $9A1 S0.910 r a • C s • a T 59.00 $5.50 $5.93 . 3Q2O17 $10.50 $145,00 $12.00 T sass $lz,as $9.14 56.44 510,75 512.67 $B4O0 S9.5O $10.118 By Market $12 00 $10s00 St00 $6.00 $440 $1 00 ci Lc 3 IC ite 15 Northern Colorado by Specific Use - I __ Fix ■ it Ind ■ Mfg - $13.45 - $13.45 $10 00 r a Y $0.79 $#.79 $4039 set _ $900 $5.00 $6?, $1200 - $700 - $1.1.00 • $14.00 $9.25 $9.04 . $►8.93 Stan .97 $923 • a - $10.00 $10.00 $00.00 r sr J $10.0D $10.00 $10.00 59.36 x..30 $9.36 39.38 $11,12 $8.17 $7_91 San $4. SO $&S0 $6.50 $0.5+0 floe $3.97 $9.93 $'9.02 $3.23 $►9.13 $9.08 $9.23 Se .2a a • a $9.38 $2.33 $6,75 $3.85 $9.02 $9.64 OA - I -Z5 Co rr Sc wing/Dist l 34 2016 +4 2.016 1Q2017 National by Specific Use L Fin Si 00 $600 $3 00 $4.00 tiled a. _ Mfg 2,Q2017 Whie/Dist 3Ct 2017 10,2016 40 20 is lg2027 20_2017 3Q2017 i w WALTER & ASSOCIATES Real Estate Valuations & Analysis Market Analysis Page 41 Weighted average rent growth in Fort Collins North, Fort Collins South and Greeley South continued to increase during 3 Qtr. 2017. Weighted average asking rents in all class types increased from $9.22 psf in 3 M Qtr. 2016 compared to $9.64 psf at the close of 3rd Qtr. 2017, Economic Overview, per Xceligent Commercial Services and accordin the g to Bureau of Labor Statistics, the unemployment rate decreased 0.8% points from 2.9% in July2016 to � 1 � in July 2017. The unemployment rate decreased due to more people finding and com ares � favorably to the US rate of 4.6%. The Fort Collins statistical area nonfarm job creation was up 4, 8 % totaling ng 7,800 jobs over the past year. Industrial using jobs that include manufacturing and trade transportation and utilities, added 800 jobs during the past year, Rents and. Vacancies (Costar) The subject general market area of overall Greeley and the immediate surrounding market e t areas were also used as an indicator of market statistics. The following table contains market statistics . 4thstres from the Qtr, 2015 to the QTD 2018 for the general Greeley Market area as reported p d by the CoStar Market Reports: Greeley Market Area -, industrial Statistics Airstarage NNN Annual % Year End Rent Rend Change Vacancy Rata 2015 Source: CoStar Market Reports The table above and discussions with real estate brokers and property owners indicate that p }� rental rates are most recently showing signs of stabilizing, while vacancy rates since 2015 remain mostly at historic lows. Through my research with local Brokers and landlords regarding more specifically comparable p y pa able to the subject building in Greeley industrial space is leasing about $7.00 to $9.00 net per square quart foot. The variance is linked to location of space, quality, exposure,proximity to Hwy. 85 Bypass/Hwy. 34 and visibility. As is with the rest of the commercial markets, the industrial market fundamentals have been soft through the 2°d Qtr. 2012; however, the past several years show the industrial market continue to improve and most recently in regard to rental rates showing signs of stabilizing. . g WALIFER ASS°Cl TES Real Estate Valuations & Analysis Market Analysis Page 42 Highest and Best Use According to The _ t tetionary of Real Estate Appraisal, Sixth Edition, a publication of the Appraisal Institute, the highest and best use may be defined as: The reasonably probable use of property that results in the highest value. The four criteria that the highest and best use meet are legal permissibility, physical possibility, financialfeasibihty, and maximum productivity. Implied in these definitions is that the determination of the highest and best use is shaped by the competitive forces within the market where the property is located. Therefore, the analysis and interpretation of the highest and best use is an economic study of market forces focused on the subject property. There are two types of highest and best use. The first is the highest and best use of the land or site as if vacant. The second is its highest and best use as if improved. The highest and best use for the land as if vacant and ready for development may differ from the highest and best use of the property as linproved. Within this analysis weevaluated the subject sites highest and best use as though vacant and as currently improved. Highest and Best Use of Land as Though Vacant: Highest and best use of land or a site as though vacant assumes that a parcel of land is vacant or can be made vacant by demolishing any improvements. With this assumption, uses that create value in the marketplace can be identified, and the appraiser can begin to select comparable properties and form an opinion of land value. Land as though vacant is a fundamental concept of valuation theory and the basis for the Cost Approach. Because many appraisals include an allocation of value between the land and the buildings associated with it, a highest and best use analysis of the land as though vacant is frequently performed. The opinion of the value of land is generally calculated as though vacant. When the land is already vacant, the reasoning is obvious; the land is valued as it exists. When the land is not vacant however, the land value depends on how the land can be utilized. Therefore, the highest and best use of land as though vacant must be considered in relation to its existing use and all potential uses. WALTER & ASSOCIATES Real Estate Valuations & Analysis Highest & Best Use Page 43 Financially Feasible/ Maximum Productive: The questions to be answered in this analysis are: If the land is, or were, vacant, what use should be made of it? What type of building or other improvements, if any, should be constructed on the land, and when? The reasons to identify the highest and best use of land as though vacant in an appraisal are to indicate an opinion of a separate land value and to identify comparable vacant land sales. In evaluating the site's highest and best use of both lands as though vacant and property as improved, the following four criteria must be met. The highest and best use must always be: (1) legally permissible, (2) physically possible, (3) financially feasible, and (4) maximally productive. Tests of legal permissibility and physical possibility must be applied before the remaining tests of financial feasibility and maximal productivity. Conclusion: Legally Permissible: From a legal standpoint, the subject site is zoned I-1' -Industrial. Medium Intensity with a Development Concept Master Plan Overlay, per the City of Greeley, which allows for a wide range of light industrial as well as limited commercial uses. The proposed use is considered a legal and conforming use of the site. Physically Possible: The subject Phase II site size total 324,985 square foot or 7461 Acres, mostly level and "L", irregular shaped site. The subject has good frontage and visibility along both E 28th Street and 1St Avenue. The "L" shape of overall site offers good frontage and visibility. Subject frontage along the east side of l st venue is about 814'+/- and about 663'+/- along the south side of E 28th Street., per Weld County measuring tool. All public utilities, including natural gas, electric, city water and sewers are available. The site is large enough for most medium to large sized light industrial development. There are no apparent physical limitations to the development of the site. Physically speaking, the site appears to be adequate for development. In addition, we specifically assume the property proposed usage and improvements as described throughout this report will be approved with the City of Greeley Planner. Any physically possible and legal use of vacant land that produces a positive return to the land after considering risk and all costs to create and maintain the use if financially feasible. As noted in the market analysis section of this report, the current economy continues to improve, and new industrial and commercial construction are a feasible improvement giving consideration to its location within the City of Greeley as well as its close proximity to Highway 34 Bypass and Hwy. 85 interchange. The convenient location to Greeley CBI , Northern Colorado University and 1-25 also enhances feasibility. WALTER ASSOCIATES ATE Real Estate Valuations & Analysis Highest & Best Use Page 44 Highest and Best Use as Improved: The highest and best use of a property as Unproved pertains to the use that should be made of an improved property in light of its improvements. The use that maximizes an investment property's value, consistent with the long-term rate of return and associated risk, is its highest and best use as improved. There are two reasons to analyze the highest and best use of a property as improved. The first is to identify the property use that can be expected to produce the highest overall return for each dollar of capital invested. If, for example, a property is currently being used for a specific use, will this use continue to provide maximum benefits or would the rate of return be increased by converting the property to another use, after considering renovation or demolition costs? The value of the property will differ under these two use assumptions, and the use providing the highest present value is the highest and best use as long as it is a legal or possible use. As long as the value of the property as improved is greater than the value of the site as vacant, the highest and best use is the use of the property as improved. The second reason to estimate the highest and best use of the property as improved is to help identify comparable properties. The highest and best use of land as though vacant and property as improved should be similar for each comparable property as for the subject property. Conclusion: Legally Permissible: The existing and proposed use is considered legally permissible. Physically Possible: Financially Feasible/Maximally Productive: The existing and proposed use is considered physically possible. The maximally productive use of this site considers all of the available development options, the current market conditions, and the character of the ,greater area. The prospective market value "As Complete" and "As Stabilized" opinions are subject to the Extraordinary Assumption that the 6 -unit /industrial condos are put on the market and sold. The developer may sell all or retain one, some or all for rentals. Appraiser cannot forecast every scenario. Typically, industrial condos are designed as "For Sale" product. A projected cost for Phase II was not available from the developer. Costs specific to Phase II including: grading, etc. are difficult to measure. Financially feasibility is measured by comparing the cost to construct a product versus its value after completion and stabilization. Lacking costs and given some of the unknowns and the fact that this project is being built in phases, no judgement is made herein as to financial feasibility. WALTER kV ASSOCIATES Real Estate Valuations & Analysis Highest & Best Use Page 45 Highest and Best Use as Vacant & As Improved: Highest and best use as vacant is for future development with an industrial oriented use. At 7.461 Acres, it most likely would be subdivided into 2-3 smaller industrial lots. Righest and best use as improved is an industrial facility -oriented use as currently proposed. Proposed improvements are subject to approval of the USR, which includes the industrial condos and self -storage building. Ownership Profile: Based on market observation of the marketplace and the subject j eet improvements, in my opinion the most likely ownership profile is an investor. WA LTER & ASSOCIATES Real Estate Valuations & Analysis Highest & Best Use Page 46 Approachesto Value Professional Appraisal Practice customarily includes the Cost, Income, and Sales Comparison Approaches to Value to develop a final value opinion of value. The Cost Approach The Cost Approach involves estimating the current reproduction or replacement cost of improvements and subtracting thedepreciation from all causes, as of the date of the appraisal. The opinion of value of the land is then added to the depreciated cost of the improvements. The land value is developed through comparing recent sales of similar vacant parcels to the subject site, "as vacant" and available to be put to its Highest and Best Use. The estimates of replacement costs are based on the various services and knowledge of the local market. Sales Comparison Approach One of the best indications of the "Market Value" of a property is the Sales Comparison Approach found by comparing recent sales of other similar properties. FIRREA of 1989 and Title 12 FR Part 34 defines "Market Value" as: "the most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected ted by undue s 'mulus ", Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: • Buyer and seller are typically motivated; • Both parties are well informed or well advised, and acting in what they consider their own best interests; • A reasonable time is allowed for exposure in the open market; • Payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and • The price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale. WALTER OU ATES1 Real Estate Valuations & Analysis Approaches to Value Page 47 The 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 would property demand if it were available for lease as of the date of the appraisal, is used to develop the potential gross annual income. In the Income and Expense Statement, deductions are made for operating expenses, vacancy and collection losses to derive a Net Operating Income. Through analysis of comparable sales and/or examination of the financial market, a Capitalization Rate is calculated. Net Income divided by the Capitalization Rate indicates value by the Income Approach, The use of one or more of these techniques may be determined by the quantity or quality of data available. In some instances, depending upon the type of property under appraisement or the purpose of the appraisal, one or two of the approaches may carry more weight or may furnish a more reliable indication of value than the others. In other instances, because of use, age, design, obsolescence or inadequacy of data, one may be accorded little weight in a correlation of the approaches into a final value opinion, Exhibits are used in each approach to describe sales data and justify required adjustments. Final Reconciliation The appraisal process concludes with the Final Reconciliation of the values derived from the approaches for a single opinion of market value. Different properties require different means of analysis and therefore one approach may be more reliable than the others. Analyses Applied A cost analysis was developed due to typical market participants relying on this approach for a proposed or newer property. A sales comparison analysis was considered and developed due to having adequate data to provide a value opinion and this approach reflects market behavior for this property type, i An income analysis was developed because it is the approach typically used by investors of commercial or industrial income properties. WALTER ". ASS0UATES Real Estate Valuations & Analysis Approaches to Value Page 48 i Cost Approach The Cost Approach is defined as: «A set ofprocedures through ich a value indication is derived in a property by estimating the current cost to construct vedfor the fee simple interest a reproduction of or replacement for, the existing structure; deducting accrued depreciation replacement cost; and adding the estimated land value plus an entrepreneurial Adjustments may then be made to the indicated f`ee simple value of the subject ro er to reflect the value of the property interest being The basic underlying assumption in the cos t approach is that cost is an appropriate although cost does not always measure of�a1ue, althou� s equate to value. However, it assumes that the informed purchaser or investor will and. rational purchaser pay no more for an existing improved property than the Producing a substitute property with the p' � cost of same utility. This approach does not as directly intangible ititemssuchucsuch�ct� reflect good will or business value. The steps involve briefly described ' din the cost approach are below. The subject's site value is estimated as though vacant and available to its highest and best • The reproduction or replacement cost new of the subject improvements is estimated an include direct andandindirect costs and.to appropriate allowance for entrepreneurial incentive. • The estimated aceru.ed. depreciation if pand from all sources is subtracted from t cost the reproduction or replacement ne. • The resulting depreciated cost of the improvements ` � is added to the indicated site value to arrive at an indication of the value of the property. Land Valuation The most reliable method for estimating . land value is based on a comparison of subject ect similar land sales, Market research of � site with CoStar, Ires, Loopnet and assessor's records order to find sales of similar industrial a� made in sites in the subject's competitive market ar land �a�e� arc consideredconsidered to +ea, the following he the best representative of market a e reflect"arm's length"�ar�et transactions between disinterested al of the subject site. They between disinterested parties each seeking their own financial positions involving to maximize those sales/market aan.d. concessions. T e Diction a ` I Estate A raisal Third Edition, Appraisal Institute, Page $1 L WALTER ASSOCIATES peal Estate Valuations & Analysis Page 49 Comparable Land Sale 1 Property Information Property Type: Location/Address: Parcel ID Sale Information Sale Price: Sale Price/Gross Acre Sale Price/Gross SF Sale Date: Grantor: Grantee: Reception Number: Confirmation: Land Size Information Site Size: Zoning: Remarks: Industrial - Vacant Land 2836 Pt Avenue, Greeley, CO 096121218003 $850,000 121,4 3/Ac. $2.79/SF November 3, 2015 1st Avenue Partners LLC Power Equipment Company 4157396 Greg Walter (Walter & Associates) with Wayne Frelund (Grantor), & Courthouse Records. 3 04, 844 SF or 6.998 acres (LM) - Industrial Medium Intensity District Grantee's intentions are for present industrial development of a building to accommodate Power Equipment facility. This site is located along the east side of Pt Avenue, just south of E 28th Street. The site is located adjacent to south of subject and was originally subject's larger parcel prior to being split for redevelopment. WALTER & ASSOCIATES Real Estate Valuations & Analysis Cost Approach Page 50 Comparable Land Sale 2 Property information Property Type: Location/Address: Parcel ID Sale Information Sale Price: Sale Price/Gross Acre Sale Price/Gross SF Sale Date: Grantor: Grantee: R e c epti on Numb er : Confirmation: Land She Information Site Size: Zoning: Remarks: Industrial - Vacant Land 625 31 Street, Evans, CO 096120129001 $1,046,000 $88,292/Ac. $2.03 November 19, 2015 Gordon J Corn & Leroy Wright Rush Truck Centers 4160662 Greg Walter (Walter & Associates) with Mark Bradley wi Realtec Commercial RE Services), CoStar & Courthouse Records. 516,075 SF or 11.847 acres US 85 Retail and Commercial Auto District Grantee's intentions are for future commercial/industrial development. This site is located at the southeast quadrant of Highway 34 Bypass and Highway 34 Bypass, along the north side of 31 th Street. The site is within a 0.50 mile west of the subject. The property was offered on the market for about 630 days, per CoStar. WALTER SSOC ATES Real Estate Valuations & Analysis Cost Approach Page 51 Comparable Land Sale 3 Property Information Property Type: Location/Address: Parcel III Sale Information Sale Price: Sale Price/Gross Acre Sale Price/Gross SF Sale Date; Grantor: Grantee: Reception Number: Confirmation: Land Size Information Site Size: Zoning: Remarks: Industrial - Vacant Land 21 t St., Greeley, CO 095714203004 $630,000 156,328/Ac $3.59 March 12, 2015 Golden Eye Investments LLC VB Properties LLC 4089827 Greg Walter (Walter & Associates) with Courthouse Records, 175,532 SF or 4.03 acres I -M -Industrial District, per the City of Greeley Grantee's intentions are for future development. The site is located within the West Greeley Tech Center within 10 miles west of the subject. Numerous attempts have been made to speak with a direct party to the transaction have been unsuccessful, however are ongoing. WALTER & ASSOCIATES Real Estate Valuations & Analysis Cost Approach Page 52 Comparable Land Sale 4 Property Information Property Type: Location/Address: Parcel ID Sale Information Sale Price: Sale Price/Gross Acre Sale Price/Gross SF Sale Date: Grantor: Grantee: Reception Number: Confirmation, Land Size Information Site Size: Zoning: Remarks: Industrial - Vacant Land WCR 44 & Hwy, 85, LaSalle, CO 105723201007 $547,800 $108,907/Ac. $2.50 December 18, 2017 Peckham Development Corp, T&R Properties LLC 4361132 Greg Walter (Walter & Associates) with CoStar Courthouse Records. 219,107 SF or 5.03 acres (1-3) - Industrial District Grantee's intentions are for future commercial/industrial development. This site is located just east off Hwy. 85 in Unincorporated Weld County, within Weld County Industrial Park along the east side of Niobrara Blvd. The site is within 7.25 miles southwest of subject. The property was offered on the market for about 1,081 days, per CoStar. Numerous attempts have been made to speak with a direct party to the transaction have been unsuccessful, however are ongoing. WALTER 4,T ASSOCiATES Real Estate Valuations & Analysis Cost Approach Page 53 Comparable Land Listing 5 Property information Property Type: Location/Address: Parcel ID Listing info rmation ation Listing Price: Listing Price/Gross Acre Listing Price/Gross SF Owner: Confirmation: Land Size 1nfon cation Site Size: Zoning: Remarks: WALTER - S OCIAT.1 Real Estate Valuations & Analysis Industrial - Vacant Land AA Street, Greeley, CO 080330000092 (Larger Parcel) $1,306,800 (Asking price for 10 to 20 Acres) 139,680/Ae. $3.00 Greeley Land Fund LLC Greg Walter (Walter & Associates) with CoStar Courthouse Records. Range from 1-2 acres to 20+ acres (I -M) - Industrial Medium Intensity District Grantee's intentions are for future commercial/industrial development. This site is located just east off Hwy. 85 in Unincorporated Weld County, within The Grainery Industrial Park. The site is within 4.5 miles northwest of subject. The property has been offered on the market for about 2,337 days, per CoStar. Asking price per acre increases with smaller size acreage sites. Note, no current infrastructure exists on site. Cost Approach Page 54 Comparable Land Sales Map Comer nIDELORME Data use subject to icense DeLorme. DeLorrne SkeetAtlas USA® 2018 wtiww. tornw CCM A LI!' Ii: it IVASSOCIATES Real Estate Valuations & Analysis SOlleth t�rr�xr� Rerrr Land Site 4 44 CR 4 MN (7.9° E) Cost Approach 0 14 Owner tray !yeti minim I mere Mug S " ;\ 21P.,2-, stAMMO! p SiMitil 1 11 2 Data Zoom 11-1 pie '4 21/2 Page 55 Land Sales Grid Coma ratiit liand l usttment Taut Vacant Land 'As Is' 24241st Avenue Goteley, CO Walter and Assodates, Real estate Valuation & Analysis, May 2018 4$64 is) itrijr#t iurftrrn ;erunarroittrd Sole di ti Las pet Acre t f put Me Si.jr ;r: S /Snit • a tit! iii ttrra�tlynis 4 Lt Avenue 2136 ist Avcntle 625 31M Stneet tint Strett WCR 44 a� ■ . A !,■I1lt f F$ t .} c Real Estate Valuations & Analysis Cost Approach Page 56 Land Comparable Sales Discussion The comparable sales detailed on the previous table are the most similar land sales available for comparison from the local market. They range in size from 4.03 Acre to 11.85 Acre and indicate an unadjusted price -per -acre range from $88,292/Acre to 156,328/Acre of land area, I have qualitatively analyzed the per acre sales prices with a plus (-F) adjustment for those characteristics inferior to the subject, a minus (-) adjustment for those characteristics superior to the subject. Research did not reveal definitive changes in market conditions since 2015 for land sales in the Greeley market area. Therefore, the sales were not adjusted upward or downward for changes in market conditions. However, Listing 5's asking price was adjusted downward 10% to reflect most land listings selling for less than asking price. Sales 1 & 2 are located within close proximity to subject, indicating no adjustment. Sale 3 is located in W Greeley in closer proximity to 1-25, which typically brings a higher price per acre, suggesting a lower value for subject from this indicator. Sale 4's less dense locale in LaSalle, suggests a higher value for subject from this indicator. Sale 2's functional utility is considered inferior to subject due to triangulated shaped site decreasing use ability, suggesting a higher value for subject. Typically, there is an inverse relationship between size and price per acre, whereas smaller size tracts will typically sell for more on a price per acre basis than a large size tract. Therefore, Sale Listing 5 were adjusted upward for larger acre sites. All sales with exception of Sale 2, are similar industrial oriented zoning districts located within the City of Greeley and LaSalle. These zoning districts allow for a wide range of industrial uses; therefore, no adjustment was required, Sale 2's commercial zoning suggests a slightly lower value from this indicator. Consideration was based on the above mentioned four vacant land sales, 1 -listing and the subject property's size, overall utility, location at the southeast corner of Pt Ave. B 28th Street. It is concluded that the 'as is' land value is indicated at $120,000/Acre for Phase Il's 7.47 acres. The determination of land allocations was estimated by using the parcel map as well as conversations with Brad Anderson from RidgeTop Engineering and Consulting. Land area allocations were used to determine land market value of sites for the two portions of Phase II — 2 - Self storage buildings and the industrial condo building site. The remaining site allocation was for Phase 2 excess land. The site allocation with opinion of value for each is as follows: Land Values Land Allocation / Allocations for Phase Value Per II Acre Value Rounded Industrial Self Excess Condo Storage Land Bldg. Site - Site - Phase Phase - I Phase I II I I 1.20 2.92 3.35 Acres Acres Acres x x x $145,000 $350,000 $400,000 $120,000 $120,000 $120,000 $144,000 $350,400 $402,000 Total Phase II I _ 7.47 Acres ; $895,000 Ni'lk A i;rr l &. AA,SSOCI :1/4 TES Real Estate Valuations & Analysis Cost Approach Page 57 Site Survey (Allocations) 444 f PUNS licrrignig':—Thr !t MilUeelIS !'dsMsh f tkfl a w i_ o1f4 toragcoPbase It 2492 Ac. Site Allocation I la MT LOT I .94,5 �. 7.481 AIMS M W Fl IV 46 Ha CAID011 Excess Land-Pha :II 135 Ac. Site A Ilocatcnn i s 5,27i 531 P h a se I 4,89 Ac. Site 10T 2 21561113 V, 4 61.3 ACRES 494 WI nil 'M fi8t aN'-- 7I CO 446 • i4'CPA I 11M1 ite Wait Y i 11 ICY@ ii . in ou en Industrial Condo -Phase II 216' x 31' or L20 Ac, Site Allocation fir ,ta ChBoN44`55'40t 4'51.42.37' P 711 or coloy1ZNCEULNT NCWOC 'CO IN ■xs+� nr rs Y7aT Ilk Cr NC NOM 1/1 or be 511/1 amen 31 ss*won I Sfb tr CI 131 AVENUE ia)' ROJIf to an 10. fat 4111 Dame Page 58 WA. l ITER. obi:. ASSOCIATES Real Estate Valuations & Analysis Cost Approach Replacement Cost Estimate (Self -Storage Units) The replacement cost of a building is the total cost of construction required to replace or build the subject building with a substitute of similar utility. These costs include labor, materials, supervision, contractor's profit and overhead, architect's plans and specifications, sales taxes, and insurance. The major portion of the Marshall Valuation Service is devoted to the development of replacement or reproduction costs by various methods. In calculating building cost estimates, it is important to consider both direct costs (hard costs) and indirect costs (soft costs). Both types of costs are essential for a reliable estimate of replacement or reproduction cost. Also necessary is the inclusion of developer or entrepreneurial profit since this is the primary incentive necessary to induce an entrepreneur to undertake the risks associated with building the project. Direct costs are expenditures for the labor and materials used in construction of improvements. These costs include the overhead and profit of the general contractor as well as various sub- contractors. Indirect costs are expenditures or allowances that are necessary for construction but are not typically part of the construction contract. Indirect costs include such items as architectural and engineering fees, legal and professional fees, construction loan interest and fees, taxes and insurance, marketing, and administrative costs. Entrepreneurial profit is the value created over and above cost through the efficient organization of the various components of development. The total cost of the project should be less than the market value upon completion in order to reward the entrepreneur for taking the risks. Whether a profit is actually realized depends upon the expertise of the developer in coordinating the components of the construction process. Direct Cost As mentioned, direct costs are expenditures for the labor and materials used in construction of improvements. These costs include the overhead and profit of the general contractor as well as various sub -contractors. The replacement cost of the subject improvements has been estimated according to type andquality of materials as well as workmanship. Source of the replacement cost estimate is from the Marshall all Valuation Service', a nationally recognized cost service. Current construction cost and local multipliers will be applied in order to accurately estimate replacement cost for the subject. The subject's improvements will be Class S (Steel Frame) construction. The plans, specifications and developers cost for the non -climate -controlled units indicate an average to good quality base cost, while the climate control units also indicate average to good quality base cost S structure. Therefore, I have used the listed `average to good' for both non -climate controlled climate -controlled units for purposes of estimated base cost. The improvements are described 5 Marshall Valuation Service© 2015 - Marshall & Swift, 911 Wilshire Boulevard, 16th Floor, Los Angeles, CA, 90017-3409, Telephone (213) 683-9000. WAIXER & ASSOCIATES Real Estate Valuations & Analysis Cost Approach Page 59 Heg it& Si IQ Refinements # of stories multiplier Story height multiplier Floor area -perimeter multiplier Combined height & size multipliers Current & local refinements Current cost multiplier Local cost multiplier (Greeley) Combined ctrrent & local multipliers Indicated Total Direct Building Costs by Marshall and Swift Section 14, Page 28. The following table references section and page numbers: MARSHALL VALUATION SERVICE REFERENCE INDUSTRIAL BUILDINGS: MINI -WAREHOUSES Cost Source: Manual Section: Manual Page Number: Building Type: Construction Class: Quality; Date: Marshall Valuation Service 14 28 Mini -Warehouse Class "S" Avg. to Good Cost (Non -CC) Avg. to Good (CC) February 2018 A summary of the base cost with appropriate multipliers for the subject's existing 12,000 S.F. "average to good cost" non -climate control units and hybrid 13,500 S.F. "average to good" climate -controlled units to be completed in June 2019 is as follows: 1st Avenue Storage - Mini -Storage !Wigs. 2 & 3 BASE COST Cost /SF Area Total Cost Base Square Foot Cost - NontClimate Control Storage Warehouse (12,000 SF) - Type -Avg, to Good $36.62 x 12,000 SF $439,440 Base Square Foot Cost - CC Storage Warehouse (13,500 SF x $41.26) - Type -Avg. to Gd. $41.26 x 13,500 SF $557,010 $996,450 1,000 1.040 1.OOQ 1.040 1.010 o 0.980 1.019 $1,015,383 Remainder of the base cost with appropriate multipliers for the subject's proposed hybrid 13,500 S.F. "average to good cost" (Section 14, page 35), industrial warehouse -shell building to be completed in June 2019 is as follows: WALTER (Xt. ASS0Uii rrES Real Estate Valuations & Analysis Cost Approach Page 50 BASE COST 1st Avenue Storage - Hybrid -Warehouse Bldg. 2 Base Square Foot Cost - Industrial Warehouse -Shell (13,500 SF x $38.50) - Type -Avg. to Gd. Add Base Cost/SF, Warehouse Radiant Heat; Cost /SF Area Total Cost $38.50 x 13,500 SF $519,750 $2.24 x 13,500 SF $30,240 $549,990 Height & Size Refinements n of stories multiplier 1,000 Story height multiplier 1.181 Floor area -perimeter multiplier 1 000. Combined height & size multipliers 1.181 Current & local refinements Current cost multiplier Local cost multiplier (Greeley) Combined current & local multipliers Indicated Total Direct Building Costs 1.010 0.970 0.980 1.157 $636,338 Entrepreneurial Profit The anticipated developer/entrepreneurial profit must be recognized since it represents the primary incentive in undertaking a project of this nature. This amount represents the amount the developer expects to receive as compensation for undertaking the project. Whether a profit is actually realized depends upon the expertise of the developer in coordinating the various components of the construction process and the local economy. Typically, the amount of profit varies with the size and complexity of the project In most cases, owner -occupied and single -use properties will display smaller profit ranges than will larger projects, multi -tenant projects, or subdivisions. In most cases, observed profit ranges from 8% to 15% for smaller less complicated structures. Therefore, an entrepreneurial profit of 10% is applied to the subject. Depreciation Depreciation is the loss in property value from any cause, usually expressed as the difference between replacement cost and market value. Depreciation is classified into three categories of physical depreciation, functional obsolescence, and external obsolescence as discussed below. Physical Depreciation Physical depreciation or deterioration is the result of wear and tear or structural defects in the building. This type of depreciation is typically broken down into two categories of physical curable and physical incurable. Curable physical deterioration refers to items of deferred maintenance that are in need of repair as of the effective date of the appraisal. Deferred maintenance refers to items such as minor repairs, painting and refurbishing which are required to restore the improvements to an optimum state of marketability. These items are considered curable if the cost of correcting the condition would be offset by an equal or greater increase in value. WALTER fiSt ASSOCIATES Real Estate Valuations & Analysis Cost Approach Page 61 Incurable physical depreciation or deterioration refers to items that cannot be practically or economically corrected at the present time. These items typically represent major structural components of the building such as foundation, load -bearing walls, roof system, and mechanical systems. This type of depreciation is calculated for all structural components that are not included in the physical curable category. This type of depreciation is usually estimated using the age -life method whereby the ratio of actual or effective age to estimated total economic life is applied to the replacementor reproduction cost of incurable physical building components. Marshall and Swift estimates the typical life for an average to good cost class "S" self -storage buildings to be 40 years. Considering the subject's proposed construction of the 27,000, there is no physical depreciation deduction for the facility. In addition, the existing 12,000 S.F. building was constructed in 2017 and has an effective age of less than a year, indicating a 0% physical depreciation deduction for the mini -storage building. Functional Obsolescence Functional obsolescence is a loss in value resulting from defects is design. It can also be caused by changes that, over time, have made some aspect of the structure obsolete by modem standards. Functional obsolescence can both be attributed to deficiencies or super adequacies and can be divided into both curable and incurable categories. To be curable, the cost to correct the defect must be the same as or less than the anticipated increase in value. The subject's proposed improvements are expected to be built at industry standards and are not considered to have any functional obsolescence. External Obsolescence External obsolescence refers to diminished utility of a structure due to negative influences emanating from outside the property boundaries and is usually incurable on the partof the building owner. External obsolescence can be attributable to a variety of factors such as neighborhood decline, surrounding uses, or local market conditions. No external obsolescence is present. Site Improvements Site improvements section consists of the excavation, concrete drives/sidewalks, asphalt drives and landscaping. The proposed site improvement cost was provided verbally by owner and is assumed to be accurate. The site improvements reported are as follows: Site Improvements Concrete Asphalt Landscaping drivesiparldng drives/sidewalksdrives/sidewalks on estimated estimated on 24,045 estimated 18,034 SF 40,075 SF @ $3.06/SF @ $2.50/SF SF @ $4.50/SF $180,338 $45,085 $73,578 Total $299,001 WALTER & ASSOCI 'F.ES Real Estate Valuations 81. Analysis Cost Approach Page 62 The following table contains the replacement cost estimate for the subject property utilizing the aforementioned data. .SUMMARY OF THE COST APPROACH Replacement Cost Mini Storage/Warehouse Facility CC/Warehouse Facili ► Site Improvements (Eslimated) Total Direct Cost Indirect / Soft Cost (Planting, Engineering, Fees, Etc.) @ 10% Total laprovement Costs Entrepreneurial Profit 10% ofCosts 10% Replacement Cost New of Improvements Less Physical Depreciation Less External Obsolescence Less Functional Obsolescence Depreciated Cost of Improvements Add: Land Value (2.92 Acres) INDICATED VALUE BY THE COST APPROACH 0.0% 0% 0% 1,015,383 636,338 299,001 1,950,722 195,072 $ 2,145,794 + $ 214,579 2,360,374 2,360,374 350,000 2,710,3 74 ROUND TO $ 2,710,000 $ 69.49 /SF Market Value via Cost Approach — Mini Storage/Hybrid Building $2,710,000 WA LT 1 It & ASSOCIATES Cost Approach Real Estate Valuations & Analysis Page 63 Replacement Cost Estimate - Industrial Condominium Building (6 -Units) The replacement cost of a building is the total cost of construction required to replace or build the subject building with a substitute of similar utility. These costs include labor, materials, supervision, contractor's profit and overhead, architect's plans and specifications, sales taxes, and insurance. The major portion of the Marshall Valuation Service is devoted to the development of replacement or reproduction costs by various methods. In calculating building cost estimates, it is important to consider both direct costs (hard costs) and indirect costs (soft costs). Both types of costs are essential for a reliable estimate of replacement or reproduction cost. Also necessary is the inclusion of developer or entrepreneurial profit since this is the primary incentive necessary to induce an entrepreneur to undertake the risks associated with building the project. Direct costs are expenditures for the labor and materials used in construction of improvements. These costs include the overhead and profit of the general contractor as well as various sub- contractors. Indirect costs are expenditures or allowances that are necessary for construction but are not typically part of the constructioncontract. Indirect costs include such items as architectural and engineering fees, legal and professional fees, construction loan interest and fees, taxes and insurance, marketing, and administrative costs. Entrepreneurial profit is the value created over and above cost through the efficient organization of the various components of development. The total cost of the project should be less than the market value upon completion in order to reward the entrepreneur for taking the risks. Whether a profit is actually realized depends upon the expertise of the developer in coordinating the components of the construction process. Direct Cost As mentioned, direct costs are expenditures for the labor and materials used in construction of improvements. These costs include the overhead and profit of the general contractor as well as various sub- contractors. The replacement cost of the subject improvements has been estimated according to type and quality of materials as well as workmanship. Source of the replacement cost estimate is from the Marshall Valuation Service6, a nationally recognized cost service. Current construction cost and local multipliers will be applied in order to accurately estimate replacement cost for the subject. The subject's improvements will be Class S (Steel Frame) construction. The plans, specifications and developers cost for the industrial flex condominium building indicate an average quality base cost. Therefore, I have used the listed `average' for purposes of estimated base cost. The improvements are described by Marshall and Swift Section 14, Page 13. The following table references section and page numbers: 6 Marshall Valuation Service© 2015 - Marshall & Swift, 911 Wilshire Boulevard, 16th Floor, Los Angeles, CA, 90017-3409, Telephone (213) 683-9000. WA LTE ( & ASSOCIATES Real Estate Valuations & Analysis Cost Approach Page 64 MARSI-LALL VALUATIONSSERVI FE N CE INDUSTRIAL BUILDINGS: INDUSTRIAL FLEX CONDOMINILTM Cost Source: Manual Section: Manual Page Number: Building Type: Construction Class: Quality: Date: Marshall Valuation Service 14 13 Industrial Flex Class "S" Average Cost February 2018 A summary of the base cost with appropriate multipliers for the subject's proposed 8,820 S.F. "average cost" building to be completed in June 2019 is as follows: BASE COST 1st Avenue Storage - Industrial Flex Condo Bldg. Base Square Foot Cost - Type -Average - Class Base Cost/ F, Mezzanine Structure (15x25) Each: Allocatim Front Elevation Enhancements @ $2,500/Unit Add Base Cost/SF, Warehouse Radiant Heat: Height & Sin Refinements # of stories multiplier Story height multiplier Floor area -perimeter multiplier Combined height & size multipliers unent & local refinements Current cost multiplier Local cost multiplier (Greeley) Combined current & local multipliers Indicated Total Direct Building Costs Cost /SF $46.50 x $21.75 x $2,500 , x $2.24 x 1.000 1.040 1— L040 1.01 0.970 0.980 Area 8,820 2,250 6 8,820 SF SF Each SF Total Cost $410,130 $48,938 $15,000 $19,757 $493,824 1.019 $503,207 Indirect or Soft Costs The base costs provided. by Marshall Valuation Service do not include such items as planning, engineering, escrow fees and legal fees, interest on the land, property taxes, land planning, off -site costs, and marketing costs required to bring the project to stabilized occupancy. The appraiser has included an allowance of 10 percent to cover those items not included in the base costs. WALTER i& ASSOCIATES Real Estate Valuations & Analysis Cost Approach Page 65 Entrepreneurial Profit The anticipated developer/entrepreneurial profit must be recognized since it represents the primary incentive in undertaking a project of this nature. This amount represents the amount the developer expects to receive as compensation for undertaking the project. Whether a profit is actually realized depends upon the expertise of the developer in coordinating the various components of the construction process and the local economy. Typically, the amount of profit varies with the size and complexity of the project. In most cases, owner -occupied and single -use properties will display smaller profit ranges than will larger projects, multi -tenant projects, or subdivisions. In most cases, observed profit ranges from 8% to 15% for smaller less complicated structures. Therefore, an entrepreneurial profit of 10% is applied to the subject. Depreciation Depreciation is the loss in property value from any cause, usually expressed as the difference between replacement cost and market value. Depreciation is classified into three categories of physical depreciation, functional obsolescence, and external obsolescence as discussed below. Physical Depreciation Physical depreciation or deterioration is the result of wear and tear or structural defects in the building. This type of depreciation is typically broken down into two categories ofphysical curable and physical incurable. Curable physical deterioration refers to items of deferred maintenance that are in need of repair as of the effective date of the appraisal. Deferred maintenance refers to items such as minor repairs, painting and refurbishing which are required to restore the improvements to an optimum state of marketability. These items are considered curable if the cost of correcting the condition would be offset by an equal or greater increase in value. Incurable physical depreciation or deterioration refers to items that cannot be practically or economically corrected at the present time. These items typically represent major structural components of the building such as foundation, load -bearing walls, roof system, and mechanical systems. This type of depreciation is calculated for all structural components that are not included in the physical curable category. This type of depreciation is usually estimated using the age -life method whereby the ratio of actual or effective age to estimated total economic life is applied to the replacement or reproduction cost of incurable physical building components. Marshall and Suitt estimates the typical life for an average to good cost class "S" industrial flex buildings to be 40 years. Considering the subject' s proposed construction, there is no physical depreciation deduction for the facility. WALTER & ASSOCIATES Real Estate Valuations & Analysis Cost Approach Page 66 Functional Obsolescence Functional obsolescence is a loss in value resulting from defects is design, It can also be caused by changes that, over time, have made some aspect of the structure obsolete by modem standards, Functional obsolescence can both be attributed to deficiencies or super adequacies and cm be divided into both curable and incurable categories. To be curable, the cost to correct the defect must be the same as or less than the anticipated increase in value. The subject's proposed improvements are expected to be built at industry standards and are not considered to have any functional obsolescence. External Obsolescence External obsolescence refers to diminished utility of a structure due to negative influences emanating from outside the property boundaries and is usually incurable on the part of the building owner. External obsolescence can be attributable to a variety of factors such as neighborhood decline, surrounding uses, or local market conditions, No external obsolescence is present. Site Improvements Site improvements section consists of the excavation, concrete, entry gate, signage, fencing and landscaping. The proposed site improvement cost was provided verbally by owner and is assumed to be accurate. The site improvements reported are as follows: Site eve, Concrete Asphalt Landscaping drives/sidewalks drives/parking on estimated on estimated 20,700 SF @ $430/SF estimated 9,800 SF @ $2150/SF 12,706 SF i $3.94/SF $93,150 $24,500 50,061 _ Total 167,711 The following table contains the replacement cost estimate for the subject property utilizing the aforementioned data. WALTER I& ASSOCIATES Real Estate Valuations & Analysis Cost Approach Page 67 SUMMARY OF THE COST APPROACH Replacement Cost Industrial Flex Condo Building (6aUnits) Site Improvements (Estimated) Total Direct Cost Indirect / Soft Cost (Planning Engineering, Fees, Etc.) @ 10% Total Improvement Costs Entrepreneurial Profit 10% of Costs 10% Replacement Cost New of Improvements Less Physical Depreciation Less External Obsolescence Less Functional Obsolescence Depreciated Cost of Improvements Add: Land Value (1.20 Acres) INDICATED VALUE BY THE COST APPROACH 0.0% 0% 0% ROUND TO $ 503,207 + $ 167,711 $ 670,918 $ 67,092 $ 738,010 +r $ 73,801 $ 811,811 $ r s $ 811,811 + 145,000 $ 956,811 955,000 $ 108.28 1SF 159,167 /Unit n Market Value via Cost approach- Industrial Condos (6 — Units) $955,000 Building id tifi ,tdo n _ Self-Storage/Hybrid Eld s, 2& 3 3.35 Excess Land Phase II — Market Value via Cost Approach Rounded To Indicated Value $2,710,000 400000 $3,110,000 $3,110.000 WALTER & ASSOCIATES Cost Approach Real Estate Valuations & Analysis Page 68 Sales Comparison Approach Self -Storage The Sales Comparison Approach is based on the premise that a buyer would pay no more for a specific property than the cost of obtaining a property with the same quality, utility, and perceived benefits of ownership. It is based on the principles of supply and demand, balance, substitution and externalities. The following steps describe the applied process of the Sales Comparison Approach. The market in which the subject property competes is investigated; comparable sales, contracts for sale and current offerings s are reviewed. • The most pertinent data is further analyzed, and the details of the transaction were investigated. * The most meaningful unit of comparison for the subject property is determined, • Each comparable sale is analyzed and where appropriate, adjusted to equate with the subject property. • The value indication for the subject by each comparable sale is analyzed and the data reconciled for a final indication of value via the Sales comparison Approach. Market Research I have researched sales of similar self -storage facilities and warehouse buildings in the immediate & surrounding market area. There are five properties that are most comparable and are documented on the following pages followed by a location map and analysis grid. All sales have been researched through county records and published data sources, inspected from the street and made every attempt to confirm by a party to the transaction. The subject consists of an existing 12,000 gross square feet non -climate control units and a proposed hybrid 13,500 SF climate -controlled self -storage facility and remaining half containing 13,500 gross square feet clear span warehouse area. In addition, the subject consists of a third structure described as a proposed 8,820 S.F. 6 -unit industrial condominium building. The industrial condominium building will be appraised separately following the mini -storage and hybrid warehouse/mini-storage analysis. Based on the subject's highest and best use gross square footage is the primary unit of comparison. Comparables Sales were selected based on the following criteria: Size: 25,000 to 150,000 square feet -Self Storage Facilities Location: Northern Colorado and Denver Metro Market Area Sale Dates: 4th Qtr. 2015 to present Highest and Best Use: Self -Storage Facilities/Warehouse Buildings w ATTER 4' ASSOCIATES Real Estate Valuations & Analysis Sales Comparison Approach Page 69 Comparable Sale 1 Location Information Property Name: Property Type: Location/Address: Parcel ID Sale Information. Building Area: Units: Sale Price: Price per square foot: Price per unit: Sale Date: Grantor: Grantee: Reception Number: Year Built: Site Size: Land to Building Ratio: Condition/Quality; Financial Information PGI Expenses Cap Rate Confirmation: American elfa ery Storage Self -Storage 2855-2858 31st Ave., Greeley, CO 095924201015 & 095924 01037 10 8, 600 square Feet 858 $6,800,000 / * WD $5,285,800 (Seb remarks below) $62.62 $7,925 June 16, 2017 Justco Mini Storage Inc. Pfankuch Storage Greeley LLP 4311605 1985, 1993 & 2012 2 -Sites totaling 7.377 Acres/ 1,722 SF 2.96 to Good/Avg. to Good $863,016 34.64% 7.5% Greg Walter (Walter & Associates) with Roger Hill (Selling Broker w/ Roger Hill RE), purchase contract, appraiser files & County Records. WALTER xR & ASSOCIATES Rea/ Estate Valuations & Analysis Sales Comparison Approach Page 70 Remarks: Comparable Sale 1- Continued Property contains 10 -buildings with 858 units, 25 -models, office, and 1 - manager apartment. Property was reported 993% occupied at the time of closing. *Note, Assessor records indicate purchase price of $5,285,800, However, Broker indicated an additional $.1,514,200 was paid for property and allocated toward business value, which does not show up on recorded deed. This property was sold as a portfolio sale with 2450 29th Street, Greeley, CO for a total combined sales price including real property and business value of $11,000,000, per Broker, appraiser files and reviewed sales contract. WALTER & ASSOCIATES Real Estate Valuations & Analysis Sales Comparison Approach Page 71 Comparable Sale 2 Location Information Property Name: Property Type: Location/Address: Parcel ID Sale Inform; Building Area: Units: Sale Price: Price per square foot: Price per unit: Sale Date: Grantor: Grantee: Reception Number: Year Built: Site Size: Land to Building Ratio: Condition/Quality: Financial Information PGI Expenses Cap Rate Confirmation: 29th Street Storage Sell -Storage 2450 29th Street, Greeley, CO 095924100010 & 95924100065 68,975 GBA (Temperature control & non -CC controlled) 441 $4,200,000 / *SWIG $2,906,000 (See remarks below) $60+89 $9,523 Excluding parking spaces June 16, 2017 Justco Mini. Storage Inc, Pfankuch Storage Greeley LLP 4311595 1987/Remodeled in 2014/2015 2 -Sites totaling 6.909 Acres/300,943 SF 3.94 to 1 Good/Avg. to Good $576,468 37.88% 7,5% Greg Walter (Walter & Associates) With Roger Hill (Selling Broker wl Roger Hill RE), purchase contract, appraiser files & County Records. WALTER & ASSOCIATES Real Estate Valuations & Analysis Sales Comparison Approach Page 72 Comparable Sale 2 - Continued Remarks: Property contains 10 -buildings with 325 units, 29 -models, outside parking spaces, office area and 2 -apartments. Property was reported 99% occupied at the time of closing. *Note, Assessor records indicate purchase price of $2,906,000, However, Broker indicated an additional $1,294,000 was paid for property and allocated toward business value, which does not show up on recorded deed, This property was sold as a portfolio sale with 2855-2858 31st Ave., Greeley, CO for a total combined sales price including real property and business value of $11,000,000, per Broker, appraiser files and reviewed sales contract. WALTER & ASSOCIATES Real Estate Valuations & Analysis Sales Comparison Approach Page 73 Comparable Sale 3 Location Information Property Name: Property Type: Location/Address: Parcel III Sale Information Building Area: Units: Sale Price: Price per square foot: Price per unit: Sale Date: Grantor: Grantee: ReceptionNumber: Year Built: Site Size: Land to Building Ratio: Condition/Quality: Financial Information PGI E -I Expenses Cap Rate Confirmation: Remarks: Crossroads Self -Storage Self -Storage 4270 Highland Meadows Pkwy., Windsor, CO 86354-12-001 45,949 square Feet 275 $3,100,000 $67.47 $11,273 October 20, 2015 Crossroads Enterprises LLC Crossroads Storage LLC 20150070437 2013 3.34 Acres/145,839 SF 3.17to1 Good/Good Not stated Not stated Not stated 7.1% Greg Walter (Walter & Associates) with Kent Greenwald (Listing/Selling Broker wl Insight Invest.) & County Records. Property contains 7 -buildings with 275 units. Property was reported 98% occupied at the time of closing as well as interview on 5/25/16 with onsite manager. Cap rate was provided by Broker. WALTER & ASSOCIATES Real Estate Valuations & Analysis Sales Comparison Approach Page 74 Comparable Sale 4 Location Information Property Name: Property Type: Location/Address: Parcel ID Sale Information Building Area: Units: Sale Price; Price per square foot: Price per unit: Sale Date: Grantor: Grantee: Reception Number: Year Built: Site Size: Land to Building Ratio: Condition/Quality: Financial Information PUI EGI Expenses Cap Rate Confirmation: Remarks: Johnson Drive Self -Storage Self -Storage 255 Johnson Drive, Fort Collins, CO 97231-06-017 32,020 square Feet 250 $2,100,000 $65.58 $8,400 February 23, 2016 Fort Collins Associates LP 255 Johnson Storage LLC 20160013348 1959 (office) / 1985 (storage units) 2.22 Acres/96,938 SF 3.03to1 Average/Average Not stated Not stated 31% 7.0% Greg Walter (Walter & Associates) with Tom Stine (Grantee), Costar & County Records. Property contains 6 -buildings with 250 units, Property was reported 99% occupied at the time of closing as well as interview on 5/25/16 with owner & on -site manager. Cap rate and operating expenses were provided by Grantee. WALTER F ASSOCIATES Real Estate Valuations & Analysis Sales Comparison Approach Page 75 Comparable Sale 5 - (3 -Portfolio Storage Facilities) WALTER & ASSOCIATES Real Estate Valuations & Analysis train lz 1.- I 7271-7273 Kearney St., Commerce City 6345 E 78th Ave . , Commerce City 443 Laredo St., Aurora Sales Comparison Approach Page 76 Comparable Sale 5 - Continued Location Information Property Name: Property Type: Best Bargain Storage & Buckley Bargain Storage Self -Storage uLocatio &Address 3 -Parcel Portioito Pending Sale Net Rentable SF Gross SF Number of Units Year BuItt 443 Laredo St, Aurora 44.789 42,650 322 1984/Rem. 2014 7271-7273 Kearney St, Commerce City 1927/1996/1997 32,797 29 200 237 6345 E 78th Ave., Commerce City 1984 Total 32,000 31,210 164 109,586 103,060 723 Acres Z470 2.678 2.000 7.148 Sale Information Total Gross Building Area: Total Units: Sale Price: Price per square foot: Price per unit: Sale Date: Grantor: Grantee: Reception Number: Year built: Land to Building Ratio: Condition/Quality: Financial Information PSI EI Expenses Cap Rate Confirmation: Remarks: 109,586 SF/103,060 Net Rentable Area 723 $9,900,000 $90.34 $13,692 June 1, 2017 Buckley Bargain Storage LLC & Best Bargain Storage LLC GVS Colorado Holdings I LLC 2017000047 826 - $5,000,000 & D706 Page 2399 - $4,900,000 1927 (office), 1996/1997 (storage units) 2.84 to 1 Average/Average Not stated Not stated Not stated 6.80% Greg Walter (Walter & Associates) with. Joan Lucas (Broker w/ Joan Lucas RE Services), Costar & County Records. Property contains 723 units that are situated on three separate sites. Occupancy about 96.7% at the time of listing and a pending cap rate of 6.87%, per Broker's marketing brochure. The property was listed for l .3,000,000, 30 DOM, per Joan Lucas (Broker). WALTER r ASSOCIATES RealEstate Valuations & Analysis Sales Comparison Approach Page 77 Comparable Sales Map— 2824 i st Ave. I Self -Storage Portion of Hybrid Building mien ' If N i� i�raeinneie I nDk LORME: Data use subject to license DeLorrne DeLorme Street Atlas USAS 2015. wtww.del rrne.carin WALTER & ASSOCIATES Real Estate Valuations & Analysis tanaa s uun 5 Luce me Denver btl iy 7 2 3 4 5 6 7 8 9 MN (8.0° E} Data Zoom 0-3 Sales Comparison Approach Page 78 Saks Grid Analysis 'lornns Lt. •h,r„k.s l !ci Mitisloienti Tam "As Co fteie -d- d&abiltaari" Solt Slump F4ei7dy 2924 Iill Alvaaua Motley, CO niter anal Amor! an, Real HAW Vartesta NJ eltd(cia, December 202dt'praspecrA0 qrA n 1 All oadice Namo IN *ft rfrsasattira -Vildia dors Snots Ylt=n :Fthfriti Sslr. rest ink (" e= par SF ri ua par IJn I Pithiest' %tn (SF) lRu 1 d r NMI) Yin ma du kits(Sgmarc Feel) glisi '.n 1Crj+ [ n-1,tth -■ mark} nett 'rl.a le IN 31 4 '1!1 Minim Orrakyi CO AK, II BEN tst So Wed 19.0# 40 lotIinownsc 2,92A0137,11,ST NMI fronts A+rot ost to Good grab re n rsab* _nom 1iinit For Cub to %let Anrnh Lvovlh dN ptryin GlichyilQund Goad Astray 4q Good $ISi P4' • Ytnrr;emialirbdii* SdtStvage Favglly 39,000 SW CIawl'it Noo-CC Caataolln] j'A to 185S•2115113111 Ave Watell% CO G=-17 turtoa'Mini &Ingo Li+: Ptenku Slump crseteyLLP 4311603 56,606,11011 56262 P.923 gag 198$, 1993 it Zola 321,72,2 Nicol tnmv Avner to Good Icrierd Ian cart to Saw A— 'n I s• amajuniand Indinibre 'ablated Velum Iptr Irk Clrarkpl&upmkt Shetlar Similar 1953, 19931.20121Lr r Strrilar 108,600 Ncm CC Glity►1nCarior 295Im1 G ar r 245029thSI men unral yr,CO !'N ,l' Ju4(oc Mini Siana tat Prenkvch Slonyp Grcelay LLP 4311595 S4,20o,020 560.84 59.523 611,475 441 1957/R4rnodvhd in 233411915 300,943 Malarailleiotal fumy Goad lisd • Iatct his atoaorgoocnor Similar Superior S•t6 Mbowdlntariac Smear 61.975 CC& Non COBapvrior 04 Mi�lt�I.o i 417o Atoka Mradtrrss nun Vitaltot, co 041: l$ Croanoida Enktprisa LLC tl'ota terde Slump LLC 20!300'70431 53,104,000 $67.47 111.273 45,944 275 2413 145,839 'Lets froma Avenge to Good 1410 94144, • (a) Downward 9 nun Suni]ar 2413t5ircrior Sami6t r 45,949 Nom CC tMtyfjilinihr 1_Ili to 1 SA' r r tuar 2SS Sahifon Orivr Fait Coigns, CD rub Ma Irat4'apra&P-r4" Ir 253 Jahn n 9ler. Yv LGC `1160013J4g $2000,006 00,044 363 SS 3 MOO 321,!120 I939.)195.3 94,938 Mao I Rama Arersas %411 5 -2 -mm r Irian l..avt¢•1:Ism !'rile it Sail throe r I It : Y, fob -lb Far CalkolSupor;or Si/m.1v LC -trier 19S9f I96'Mnteriar Bif1A Ilex 32,022 Non CC Onto infen ce 303 to 1 s!1 (1-) Upward S 443 Undo St. Ore Wrid-up} Woo SConanwrceCN ACO l odkky B u repro et @ oII 8irp la Sump 07/5 C01414da Holdings 1 LW See Witsup 19,940,060 590 34 313,693 124,583 7.23 10801leiow 2014/1927/Mailsin 3'430 Natal bona Arnn pm >rr'e5L, t I Lean,' Ira. t r.r• r.Sa5)rr r,, 'k Au ran CCometaro, Ciy7Supar4a &mita/ Inrorior Sue Aboveln kaki 108,586 Non CC OrnyfluMor 211411m1 111 1 17 0t! 6'.45_11 i FP t r 4.) Downward \r• itKic �ti' %%soU' 4 aA'J' EN seal Estate Valuations & Analysts Sales Comparison Approach Page 79 Conditions of Sale and Economic Adjustments — Self Storage Buildings The comparable sales detailed on the previous table are the most similar sales available for comparison from the local market. They range in size from 32,020 F to 109,586 SF, and indicate an unadjusted price -per -square foot range from $60.89/SF to $90.34/SF. It is important to note that due to limited sales activity in the hmnediate subject market area: there is inadequate data to make quantitative adjusted based on paired sales analysis. The concluded quantitative adjusted presented herein are included to identify the relative direction of the required adjustment and are not meant to establish mathematical certainty. I have analyzed the per square foot sales prices with a plus (+) adjustment for those characteristics inferior to the subject, a minus (-) adjustment for those characteristics superior to the subject. Property Rights Conveyed. All of the comparable sales are confirmed as transfers of the Leased Fee Interest with no leasehold value; therefore, no adjustments for property rights were necessary. Financing Terms. All of the sales involved cash or terms equal to cash. No adjustments were necessary. Conditions of Sale. All of the comparable sales are confirmed as arm's -length market transactions with no special conditions, motivations, or undue stimulus affecting the sales price; no adjustments were needed for conditions of sale. Expenditures After the Sate. All comparable sales are confirmed as reasonably fit for occupation with no undue additional costs; no adjustments were needed for expenditures after sale. Market Conditions (Date of Sale) - Since about mid -year 2012 the Northern Colorado commercial and industrial markets experienced a vibrant growth cycle including several new developments, increasing rents, decreasing capitalization rates, and increasing land and improved values. Conversations with several brokers active in the market and our experience the market for industrial space also began to improve in mid -2012. Per Xceligent's 3s Quarter 2017 Market Study reported industrial rental rates within Northern Colorado's overall sector have moderately increased within the past year from $9.22/SF - 3rd Quarter 2016 to 2018 YTD .64/ F. Therefore, due to industrial market statistics in overall Northern Colorado indicating relatively low vacancy and slight upward trends to stabilizing rents; no adjustments were made for market conditions. In addition, three sales used within this report have occurred in 2017, one in 2016 remaining in 2015. It also should be noted that the oldest 2015 sale price per square feet is 2nd highest among data set. Therefore, no adjustments for market conditions were warranted. WALTER & ASSOCIATES Real Estate Valuations & Analysis Sales Comparison Approach Page 80 Physical Adjustments ustments Locaiion/Vi.sibilitv, Location can be rated by many different criteria including access, traffic counts, visibility, rents and land values in the area, income and home prices, neighboring development, and/or significant draws nearby. Although some of these factors can be quantified, typically applying location adjustments are a combination of all of the factors as well as a judgment call from the appraiser. Based on quantified and qualified analysis, the subject, comparable sales, and adjustments are presented and described as follows: Sales 1 & 2 are located in central to West Greeley with good exposure and considered slightly superior to subject, requiring a downward adjustment. Sale 3 is located in Windsor at the Crossroads exit near I-25, requiring a downward adjustment. Sale 4 is located in Fort Collins near CSU, which is considered superior indicating a downward adjustment. Sale 5 is located in Aurora & Commerce City, which are considered to be slightly superior in a denser locale requiring a downward adjustment. Quality; The construction class and quality rating of buildings will have an effect on value. The subject overall quality is considered to be an average to good quality climate control and non - climate unit facility. Sales 1 & 3 are non -climate controlled single story drive -up units and considered to be average or average to good in regard to quality, requiring no adjustment. Sale 2's mostly climate -controlled facility has been recently updated indicating a lower value for subject. Sale 4 & 5's average quality non -climate -controlled facilities are older in age and considered to be inferior regarding quality suggesting an upward adjustment from these value indicators, Ave/Condition. The condition, construction class, and overall condition rating of buildings will have an effect on value. The subject is a metal frame constructed facility and considered to be in 'tnew construction" overall condition "as complete". All sales are considered to have a higher overall effective age at varying degrees as compared to subject, warranting upward pressure from these indicators. Coniieji'ation/Functional Utility, All sales are similar in regard to functional utility as compared to the subject, therefore, no adjustment is required. Size, Generally, there is typically an inverse relationship between size and price per square foot, all other factors being equal. The subject and comparable sales as well as their corresponding adjustments are described as follows: Sales 3 & 4 are the smallest in size and price per square feet is among the mid portion of price range. Demonstrating no correlation between size and price per square feet. Functional Utility or Unit Mix. All sales with exception of Sale 2 are 100% non -climate -controlled units, while (50%) of the subject is climate controlled indicating an upward pressure on price per square foot. Sale 2's mostly climate -controlled units warrants a similar price for subject from this indicator. WALTER{ St ASSOCIATES Real Estate Valuations & Analysis Sales Comparison Approach Page 81 Laos u 1 i Ratd All sales have relatively similar land to building ratios as compared to subject's allocated ratio, warranting no adjustments from these indicators. Comparable Sales Analysis Comparable 1 is the sale of a non -climate controlled self -storage facility that sold on June 16, 2017 for 6,800,000, which equates to $62.62 per square foot, After qualitative adjustments this comparable value indicator suggests a similar price per square foot for the subject. Comparable is the sale of a mostly climate controlled self -storage facility that sold on June 16, 2017 for $4,200,000, which equates to $60.89 per square foot. After qualitative adjustments this comparable value indicator suggests a slightly lower price per square foot for the subject, Comparable 3 is the sale of a non -climate controlled self -storage facility that sold on October 20, 2015 for $3,100,000, which equates to $67,47 per square foot. After qualitative adjustments this comparable value indicator suggests a similar price per square foot for the subject. Comparable 4 is the sale of a non -climate controlled self -storage facility that sold on February 23, 2016 for $2,100,000, which equates to $65.58 per square foot. After qualitative adjustments this comparable value indicator suggests a higher price per square foot for the subject. Comparable 5 is the sale of 3 -separate non -climate controlled self -storage facilities that sold on June 1, 2017 for $9,900,000, which equates to $90.34 per square foot. After qualitative adjustments this comparable suggests a lower price per square foot for the subject. WALTER & ASSOCIATES Real Estate Valuations & Analysis Sales Comparison Approach Page 82 25,500 SF self storage $63.00 Sales Comparison Summary in Self Storage Buildings x.11 sales are located within Greeley, Windsor, Fort Collins as well as the Denver Metro Market areas and would appeal to similar buyers. The sales were not adjusted quantitatively for market conditions that range from $60.89/SF to $90.34/SF. The self -storage value indicators suggest a slightly wider sales price per square feet range than typical or preferred. However, the self -storage facility sales used are still considered to be good value indicators for the existing and prospective subject. Sales 1 & 2, which transferred combined as a portfolio sale are located the closest in proximity to the subject's Greeley Market area and are given most weight due to similar quality and attributes as the subject. All comparables with exception of Sale 2 are 100% non -climate controlled, while the subject has 50% climate -controlled units of total facility, indicating minimum impact on value. Similar to slightly higher values are suggested from these indicators. Sales 3 & 4 are given considerable weight due to location in Northern Colorado Market area and having similar attributes as subject. In contrast, Sales 5 is given least weight due to superior location within the Denver Metro market, suggesting a lower value for the subject. However, Comparable 5 is a supportive value indicator demonstrating recent market activity of similar type properties along the Front Range. In addition, giving the subject's location within East Greeley near the Hwy. 34 Bypass/Hwy. 85 Bypass interchange with a unit make-up of 50% climate -controlled units, and partial new construction, it is reasonable that an indicated value be most similar to Sales 1 thru 4's Northern Colorado Market area) range of market values. Based on this data and the analyses it is my opinion that a value of $63 per square foot is appropriate for the 'as complete & stabilized' storage facility. The sales comparison value estimate iscalculated as follows: Ile $1,606,500 Industrial Warehouse -Clear span portion of Proposed Building Analysis - Now that an opinion of value has been determined for the self -storage facility portion of subject property, we will appraise the subject's industrial warehouse buildings allocation separately using researched sales gathered from CoStar of detached freestanding industrial buildings in the Greeley market area. There are three industrial buildings that are most comparable to the subject and are documented on the following photographs, location map and analysis grid, All sales have been researched through county records and published data sources and inspected from the street WALTER i ASSOCIATES Real Estate Valuations & Analysis Sales Comparison Approach Page 83 Sales Comparable Photographs / Warehouse Hybrid Building WALTER & ASSOCIATES Real Estate Valuations & Analysis ANS Sale 1-112 E 30th St., Greeley Sale 2 — 711 350 St., Evans Sale 3 — 655 Academy Ct, Windsor Sales Comparison Approach Page 84 Sales Map i 2824 Ave. / Industrial Warehouse Portion of Hybrid Building ger S .-' trh- le tds Jr* iri lawrireLs ireAs's Pro il 11 'N ' ` a a a^�.`!"�" r.: I d 057 jailer eSi 474 Dt1O1O111. Data use subject to geese CD Data e_ Det_Dime Street Atlas'ISike 2015. w+► �ww.tlelotrne_c or. MN 7.A° E) I i . av --s scale 0 9 2 Data Zoom 10-7 arr r erte 3 ml WA [TER & ASSOCIATES ReaJ Estate Valuations & Analysis Sales Comparison Approach Page 85 Comparable Markoc1 Silts Ad"ustobp'ur Table. "As COny lerau Indonslal 4tirarsb -w I'?srtLnu rrt II.}nrld 0rtl.Ilts� 2824 1d Avenue Greeley, CO 'Pokergetti.,ctnfes. Rcol ertafe Yatrrutiori di Analysis, June 1, 21119 (Presspardwc) illtuh err l ur+ir�a�rr� .,.r�l I 1 u� �sosai 1 fm' f41+4,7S licit 1109,11 Address aodlor Name 2824 In Avow Greeley, CO 112E 30th St Greety, CO 71135ttr St fvan3, in) 655 Aradsmay CI Windsor, CO allitirthi ; Brio Pi Contriee & Stalifircd Grantor Gram Reception t+tumb ' Sole Prise Stile prise parr Square Fool 9midi midis' Size (Square Feet) Year Bulk She Size (Square Fasts) Coastuctirau Type Construction Qualify Connors ba Stabitletd - June 2g i0 13.500 2019 t.Tsiect ICoartructba} 2.92 Ac1127,195 SF Steel Post St Beam Avenge to Good II:brid Industrial WatsSaw Dac 17 13.0 trio Hhchoeck LLC Mack Reel Estate LLC 4362816 £1,300,000 3109 21 11,904 1995/2015 i ..30 Ai; (56691 SF Similar ,Average to Goal Mice Industrial Jan -18 Daniel L & Dcbre X Baker White Bear Management LLC 4365198 5310, DID 561}.78 .5,100 1980 D 27 Ac 111,900 SF Steel Pool & Beam Average Offiteind'isnial Dec -17 655 Academy1d,C HDD LLC 4358710 $1,42.2,500 $ 101 37 14,013 2.001 51,992 Similar Avenge lEr-re tndtnt4l Property Rights Pi ancmg, Ctmaire of Sale Expenditures After the Sr& Adjusted GBA Unit Pries Tima7tdarket Conditions Adivated 0BA Uaii Prix Leased Fla Caste to Seller Arm'sCarsgl6 0% per year Fee Simple Cash is Saner -Arm's •,' Fee Simple Cash to Seller 'Arm's 1t Pee Simple Cash to Seller l'am'a „, 5.0.00 W;t10 'Stl.al0 S lit9 y1' 5[0.711 5113137 _ Lima? DJOIP, , Sin -1 R D.D Ihuc-'17 1100% 516921 %I A 110117 --- 1'ireeley/Senlar 11,904 1995/200I51lafaior Similar I.00.11r14l4104). MaksSlni:MAP AaPrOidlikut Quilts C:ourgustikstTtmclimal Utility t7Thit`iwr lle0 I'unoti,+nsi Utley 1nano 1 itiLiari Kati) Greeley/Good 13,'300 20191New Construction Average to Good Industrial Clear Spas OD/2d' 41- Once i(0%) 31.2,6 to 1 - a - Evemaf$nnilar 5,10D 19(SOliaterior Sir Sdelft- + Windsor/Superstar 14,0331 213011'larerior $Qnilir - 4 - o n Similar Sager 4-Q1YsfI7'CEltI- Estimated 25% +/- 4 76 to 1 1.01D/16'CH 15% +f• 2 33 in 1 2-OD+'s/18'C}{ 30% In 40% 1 71 in �1sl11rrt WaatU SiNetdirlo n Indlerttrd Value per Name Foot (-) Downward i (+) Upward @ D wnward WALTER ii ASSOi.iJ TES Real Estate Valuations & Analysis Sales Comparison Approach Page 86 Conditions of Sale and Economic Adjustments -Warehouse portion of Hybrid Building The comparable sales detailed on the previous table are the most similar sales available for comparison from the local market. They range in size from 5,100 SF to 14,033 SF, and indicate an unadjusted price -per -square foot range from $60.78/SF to $109.21/SF. It is important to note that due to limited sales activity in the immediate subject market area: there is inadequate datato make quantitative adjusted based on paired sales analysis. The concluded qualitative adjusted presented herein are included to identify the relative direction of the required adjustment and are not meant to establish mathematical certainty. I have analyzed the per square foot sales prices with a plus (+) adjustment for those characteristics inferior to the subject, a minus (-) adjustment for those characteristics superior to the subject. Fropc' Rights_ onveyed, All of the comparable sales are confirmed as transfers of the Fee Simple or Leased Fee Interest with no leasehold value; therefore, no adjustments for property rights were necessary. Financing Terms. All of the sales involved cash or terms equal to cash. No adjustments were necessary. �onditi�ns of Sale. All of the comparable sales are confirmed as arm's -length market transactions with no special conditions, motivations, or undue stimulus affecting the sales price; no adjustments were needed for conditions of sale. Expenditures After ter the Sale. All comparable sales are confirmed as reasonably fit for occupation with no undue additional costs; no adjustments were needed for expenditures after sale. Market Conditions (Date of Sale) — Per Xceligent's 3"1 Quarter 2017 Market Study reported industrial rental rates within Northern Colorado's overall sector have moderately increased within the past year from $9.22/SF - 3rd Quarter 2016 to 2018 YTD $9.64/SF. Therefore, due to industrial market statistics in overall Northern Colorado indicating relatively low vacancy and slight upward trends to stabilizing rents; no adjustments were made for market. conditions. In addition, two sales used within this report have occurred in 2017 and one in 2018, therefore, no adjustments for market conditions were warranted. WA LTE1t & ASS(J14I A'FI Real Estate Valuations & Analysis Sales Comparison Approach Page 87 Sales Comparison Summary 118 Warehouse portion of Hybrid Building All sales are located within Greeley, Windsor and Evans Market areas and would appeal to similar buyers. The unadjusted sales indicate a range from 0.78/SF to 109.21/ F. Prior to qualitative adjustments, the industrial value indicators suggest a wider sales price per square feet range than typical or preferred, However, the industrial building sales used are considered to be adequate value indicators for the subject's warehouse portion of hybrid building. Sale 1 is given considerable weight due to its relatively recent sale date, location within 0.25 miles south of subject and having a relatively low effective age. However, Sale 1's office build -out suggests a lower value for subject clear span warehouse space, Sale 2 is given least weight due to high overall effective age as well as its office/showroom build -out. Sale 3 is given moderate weight given its superior Windsor setting and office build -outs, both suggesting a lower value for subject. Based on this data and the analyses it is my opinion that a value of $80 per square foot is appropriate for the 'as complete' warehouse -clear span area of the hybrid self- storage/industrial warehouse building, The sales comparison value estimate is calculated as follows: e 13,500 SF — Hybrid Industrial Warehouse Area $80.00 $1,080,000 Industrial Condo Building I 6 -Unit Analysis Now that an opinion of value has been detennined for the self -storage facility portion of subject property, we will appraise the subject's industrial condo building separately using researched sales gathered from Co Star of similar industrial condominiums in the Greeley market area. There are three industrial condo buildings/units and one listing that are most comparable to the subject and are documented on the following pages that include: photographs, location map and analysis grid. All sales have been researched through county records and published data sources and inspected from the street, WALTER & ASSOCIATES Real Estate Valuations & Analysis Sales Comparison Approach Page 88 Sales Comparable Photographs Sale 1— 3940 Carson Ave., Units 1, 2,5,Evans Sale 2 — 561 E Garden Dr., Unit B, Windsor Sale 3 — 587-623 N Denver, Units 619-623, Loveland ,WALTER & ASSOCIATES Real Estate Valuations & Analysis Sales Comparison Approach Page 89 Sales Comparable Photographs Listing 4 -- 2881 S 31" Ave., Greeley WALTER F ASSOCIATES Real Estate Valuations & Analysis Sales Comparison Approach Page 90 Sales Map — 2824 1" Ave. / Industrial 6 -Unit Condo Bulkiln Fair ow'nio is t� m_VAIDt - Tininath • Car rera Airport ono MELD DF LONMT; Data use subject to license. DeLowne. aeLorme Street Atlas USAS 2015 lwww.delormesom kuilinikan WE Jr4 Ale twk MN (6 °' E) Sao Am IKug 1141 Tong II Crap AD mt 0 1 2 3 4 5 Data Zoom 10-0 mi WALTER SSOCI TE Real Estate Valuations &Analysis Sales Comparison Approach Page 91 Comwarabllt (kb ckct Ii c Ad II Silt meat Table ',Aggregate Retail" Lad astral 0 (Fee Hen Gaa omiai m, 2824 Isi.Avenue Greeley, CO Waller vad.Alssoelatu. Rai agate VcIHarion & Arral;krta. June 2019 (P, spec l a) Sate Sales Comparison Grid I _a ilsadi t rr: 5}1, all Cl'-Li �- III MICI 3 2874 Id Avenue Greeley, CO 561 E Garden Dr., Unit e 11Ymdox, CO 2881$ 01st Ave. Greeley, CO 394U Ceram Ave e Liars I, 2 & 5 wens, CO 639-62314 Doom, Uet619-623 Loveland, CO Address andlur Name rissole.reDab - - - y. 1?MCp1PCI1t:Mc rI;- Td1LG <lrama Clam& (Amu Lin tiumno Ssti Price ,Sokprim perSquare Fool 11su a$Siae (Square Feet) Y'ttr Bat ,'I•;iinSloe(Square Feel) {gnatmtionType Cosleunr.tatnQcal* Van :. 41-iirn Jun -19 Jun -19 6,826 (6-Uolis )1,470 5R 2014 (Nov Conaintedon} Condominium Steel Foal & Ekon Avenge to Good IltrkeILtd ands Lt'ruin ` T Oct'1.1 Iron Bull lnvesiitsmnts IiC Robert Billy 096130141001, t}D2, 005 $334,000 $8970 4,261 2006 Gandaminirm �-IY Seiler Groves Investmenla, LIE Reach N jh 56i E Garden [LC 80722309045 S317,0aa Si 1065 2,86,5 1998 Condominium Sled Pv I & Beam Average to Good Office Irttumi111'nsln �} Semi/ Joe] Loiennann kffrey C Horingrw nh 851ST 61619 5555,000 511563 4,1100 2001 Condomnua Ma3asay Average to Good I)flit Ind LarrisVCmulo Us Com ti blow CAC 95914203004 $349,9'01 S97 19 3,600 1999 Condominium Mowry kiornewerauidi nab; I4tiurple'm Steal Pan & Beam Avarege in Good 1_l:(1 c Indatritilali'llo&D T ice SIrsalrk 'oink* Sear mar's L -•. I wriralik 1'nth to Seder Mies 1 .r... IFec Sin e Cash la Seder Antra Lc 6 kw kirk C ISIS as Seiler hnztt -, h Pre Nook Crash la Muir Arm'a Length 0% per year z Cr 00 341:00 SJF.00 ION ST'i7ii 5IIfi,155 SILS41 WI 9 Ocl-I 7 0 (Tr % .' .17 0.03.el. lawn O.I}tflE 1 0, sti4 WI S(1Q,6:i. $11,563 547,19 _ ' L.:nrunit:;r.d d -Coma rjj 1,470 SF 2019 Oleo Coostructlou Avenge in Goad Office le &mirk, Fier 1.00Each116' +1- Office (14%t/-) •0'wi,lbininium WmdsorlStpario, 2,865 1995fInfcrior Similar Similar 1.013/16'CH+1- Estimated I5-20%41- Condo raid= + . Lovetmdlaauperior 4,800 2001/inferior Similar Shaer 1 -CD Each/IS'CH 15% +I- Ca nimbi= - r • - Greeley/Slimily 3,600 1999. rear SQniL r I tiPtinai yr fltA* *SW(6BA) Agonoft1434 QklishoP tPR ')ri''I:'uutvii- !hay 171Thticor Ilci i I IllttelkIllaUtility Ia a I -. lbw - t Evensllaferiar 1,4i2, 1,432, 1,437 20©6/Int-eriur Similar Similar Sinner I -0D Each/16"4"ll+i- Est nasod 1S-20°%+1- corer dndayurn I.OD/IftC1I $0% +11- Comma � Ad) .ulmcatladkat an + - troliesianai.t parSir sstEns O) Upward (-) Downward 0-0 Downward Similar I''ALT 1°;R .ig r'kss"tlC:1 .iaTES Real Estate Valuations & Analysis Saks Comparison Approach Page 92 Comparable Sales Discussion — Industrial Condo Building — Aggregate Retail The comparable sales detailed on the previous table are the most similar sales available for comparison from the local market. They range in size from 2,865 SF to 4,800 SF, and indicate an unadjusted price -per -square foot range from $89.70/SF to $115.63/SF. It is important to note that due to limited sales activity in the immediate subject market area: there is inadequate data to make quantitative adjusted based on paired sales analysis. The concluded quantitative adjusted presented herein are included to identify the relative direction of the required adjustment and are not meant to establish mathematical certainty. I have analyzed the per square foot sales prices with a plus (+) adjustment for those characteristics inferior to the subject, a minus (-) adjustment for those characteristics superior to the subject Pro Rights Conveyed. All of the comparable sales are confirmed as transfers of the Fee Simple or Leased Fee Interest with no leasehold value; therefore, no adjustments for property rights were necessary. Financing Terms. All of the sales involved cash or terms equal to cash. No adjustments were necessary. Conditions of gale. All of the comparable sales are confirmed as arm's -length market transactions with no special conditions, motivations, or undue stimulus affecting the sales price; no adjustments were needed for conditions of sale. Expenditures After the Sale. All comparable sales are confirmed as reasonably fit for occupation with no undue additional costs; no adjustments were needed for expenditures after sale. Market Conditions (Date of Sale) - All three sales used within this report have occurred in 2017 and one listing, therefore, no adjustments for market conditions were warranted. Sales Comparison Summary All sales are located within Greeley, Evans, Windsor and Loveland Market areas and would appeal to similar buyers. The sales were not adjusted quantitatively for market conditions that range from $89.70/SF to $115.63/SF. The industrial condominium value indicators suggest a slightly wider sales price per square feet range than typical or preferred. However, the industrial condominium unit's sales used are still considered to be good value indicators for the subject. Sale 1 is given considerable weight due to its close proximity to subject, similar unit sizes as well as its overall similar attributes as subject. However, Sale 1's inferior locale as well as its higher overall effective age, suggests a higher value for subject. Sales 2 & 3 are also given considerable weight among the data set due to similar overall attributes. However, Sales 2 & 3's locations are considered superior, suggesting a slightly lower price from these indicators. Listing 4 is given least weight due to not yet transferred, however is considered to be a supportive value indicator for subj ect. WALTER & ASSOCIATES Real Estate Valuations & Analysis Sales Comparison Approach Page 93 All three sales and one listing comparable are considered to provide a supportive value indicator for subject. Based on this data and the analyses it is my opinion that a value of $105 per square foot or $926,100 or 154,00 /Unit (Rounded) is appropriate for the 6 -unit condo building "Aggregate Retail Market Value". Building Size Per Unit Value indicated Value 6 -Unit - condo bldg. Aggregate Retail Value Rounded to $154,000/Unit $924,000 $924,000 The opinion of total Market Value via Sales Comparison Approach that includes Phase II is calculated as follows: Building Size Per SF Value Indicated Sale Approach Comparison Value Via 25,500 SF — self storage $63.00 $1,606,500 13,500 SF — warehouse $80.00 $1,080,000 3.35 Excess Land $120,000/Acre $400,000 (R) "As $3,086,500 Phase II Com fete & Stabilized" Rounded to $3,085,000 WALTER i& ASSOC' ATES Real Estate Valuations & Analysis Sales Comparison Approach Page 94 Income Approach — "As Complete & Stabilized" Self -Storage Facility The income approach analyzes the investment characteristics of an income producing property and the benefits received by the owner of such a property. This approach can be processed via a direct capitalization technique or a discounted cash flow analysis. For mini -storage facilities "as complete & stabilized" a directcapitalization analysis is most appropriate. Whereas a short-term discounted cash flow is most appropriate and will be used for the "as complete" opinion of value, with an added direct capitalization analysis for test of reasonableness. Direct Capitalization Approach The income capitalization approach develops indications of value based on actual or anticipated income. Rent, vacancy, operating expenses, and capitalization rates are needed to form an opinion of value by the income capitalization approach. The projected income and expenses for the subject property are based on information from the subject and from properties of similar age, size, and condition, The market and actual information is used to develop an estimate of current and future income the subject property can produce. A capitalization rate is then applied to the net operating income to develop an indicated value of the subject property. The income capitalization approach involves following steps. Consider the subject current leases; • Research and analyze market leases; Develop an opinion of Fair Market (economic) Rent; • Estimate expenses to calculate the Net Operating Income; ■ Develop market capitalization rate; ■ Divide the net operating income by the capitalization rate for an indication of value for the subject. Estimation of Potential Gross Income The subject property units will be 100% leased on a short-term basis. Therefore, as a check of lease rates a market survey of similar self -storage type properties in the subject market area was made. Of the surveyed self -storage properties that offer lager size units, the following are the most directly competitive with the subject property and are detailed as follows: WALTER & ASSOCIATES Real Estate Valuations & Analysis Income Approach Page 95 Comparable Lease 1 Gateway Self -Storage, 2600 36k" Ave., Greeley Comparable Lease 2 — Windsor Guardian Self -Storage, 760 E Garden Dr., Windsor WALTER & ASSOCIATES Real Estate Valuations & Analysis Income Approach Page 96 Comparable Lease 3 a NOCO Premier RV -Storage, 27292 WCR 13, Johnstown Comparable Lease 40- Beacon Indoor Storage, 4059 Camelot Circle, Longmont WALTER & ASSOCIATES Real Estate Valuations & AYnarysis Income Approach Page 97 Lease Comparable Map - 2824 Pt Ave. / Self -Storage Portion of Hybrid Building f; e itmat lithe a Ti mathe • • • Litt.,timid DELORM1. lb i ✓ I • Carter:Ana e ra ; C e sae Weatdl°r. R amorr 197101 ii1'Grrii Data use subject to license DeLorme DeLorme Street Atlas u A F 2015_ d e s rn e _ G Cu ll Refill 1 4— t-, Wow t weir fie MN (0.02 E A Kupvelk51rong Eaton Lucerne Mat kiclk A ilH 44 +A -fief+ II* HI CropAihr int Uhhc* Ginitt-telltticniy 202415k MICA Siliblet0 • Evaar /i 1Ea Sane it Lower 14Ikaur A" arrow Easiontsisitay Atifro r L �/ a's+ R*atilt r 0 1 2 3 4 5 Data Zoom 10-0 mi Vs A 1.1E.R xx ASSOCIATES Real Estate Valuations & Analysis Income Approach Page 98 Comparable Salt Storage Rents sutoct isiks COMPS. t Rani Corm 1 Marti Comp 2 1 1 C I ' 3 Cupp 4 Subject P.foloctotd Inn — Gateway Sell 2600 361h G re&e Storage Ave , , 7' { 'Ir4lt i � Iti 'r f. � 4059 J+�l ■ + mor � tat &tout Sloe 4 1st knout Greey 7 J oh tow "I n Yea! OS ti 14401CarIODUCOOn 1i995 108 2018 2003d 2O041, 2OCS Co nation easertac'tiK'in Good Good G Goat t 1 W Uill (ton - CArrste • Conu (Lint Mac},, $tire #tFt Pdtf 401 !taut per 1.1ffi1 _ !Fp rsl PR .4 1 Sul* S Rail_ _ i . _.. and 15x40(4a) 15x.71] d$325) $325 A 5 Alio 15460 .(SW) (aim naed') 15 x'r '(S329 x; is t L1St: � } 16x & ($375) $ 360 ACC 15O(4.5 x.4Y 20 x 30 ($396)5 17,5 x52($ ) WALTER & ASSOCIATES Real Estate Valuations & Analysis income Approach Page 99 Market Rent Estimate Discussion -Self -Storage Units • Rent 1 - is located northwest within 3.5 miles of the subject, just west off of 35th Avenue in a higher dense locale with numerous nearby apartments, commercial and residential dwellings. This rent comparable has a superior office indicating a lower price per unit for the subject. The current 1 Qtr, 2018 occupancy rate was not reported. However, interviews with onsite manager in 2017 indicated occupancy at about 98%. Overall quality of the facility is considered similar to subject. In addition, the facility has a similar larger size enclosed unit n such as the subject. However, Rental 1's (15 x 30) unit size is shorter than the proposed subject, suggesting a higher rent from this indicator. • Rent - is located northwest within 12 miles of the subject, southeast of Highway 254 and Hwy. 392 in a higher dense locale with numerous nearby apartments, commercial and residential dwellings. This rent comparable has a superior office indicating a lower price per unit for the subject. The current 1st Qtr. 2018 occupancy rate was reported at 95% to 100%, per onsite manager. Overall quality of the facility is considered similar to subject. In addition, the facility has a similar larger size enclosed unit mix such as the subject, However, Rental 2's (15 x 50) unit size is larger than the proposed subject, suggesting a lower rent from this indicator, • Rent 3 — is located west within 14 miles from subject, just southeast 2.5 miles +1- of Hwy. 34/1-25 interchange, in Johnstown. The unit sizes are similar to the subject and considered a good rent indicator for subject. In addition, its location off the I-5 interchanges suggests a slightly lower rate for the subject. The current June 2018 occupancy rate was reported at 98%, per onsite manager. In addition, manager stated facility has a waiting list for the 15 x 40 units. Overall quality of the facility is considered similar to due to unit mix including both non - climate as well as climate control. • Rent 4 is located southwest within 20 miles from the subject at the Highway 66/1-25 intersection, in Longmont, The unit sizes are similar to the subject and considered a good rent indicator for subject. In addition, its location offthe I-25 interchanges suggests a slightly lower rate for the subject. The current occupancy was not disclosed to appraiser. Overall quality of the facility is considered similar to due to unit mix including both non -climate as well as climate control. Based on consideration of the subject's projected rents and its competitive market position within the properties of the rental survey, a potential investor would consider the following projected rents to be at prevailing market terms. WA 1,11tI lie ASSOCIATES Real Estate Valuations & Analysis Income Approach Page 100 Therefore, the subject's potential gross income on the following page is indicated as follows: "As Is" I Non -Temperature Controlled Self Storage Units Subject (Non - Controlled) Climate - (Unit Size Mix) Projected Subject Rent Unit I per Projected POI per Month X 12 Months Projected PGI Total Units A 15 x40 20 $325 $6,500 12 $78,000 20 Potential Gross Income - Non -Climate Controlled $78,000 "As Complete & Stabilized" / Temperature Controlled Self Storage Units Subject (Climate Controlled) - (Unit Size Mix) Total Units Projected Subject $ Rent Unit per Projected per PGI Month X 12 Months Projected PGI 1 15 x 45 f 20 $ 60 $7,200 1 12$86,400 A -CC 20 $78,000 Potential Gross Income - Non -Climate Controlled Potential Gross Income - Climate Controlled $86,400 Total Potential Gross Income - 164,400 Vacancy, Collection Loss, and Operating Expenses Vacancy & Collection Loss Both the investor and the appraiser are primarily interested in the annual revenue and income property is likely to produce over a specified period of time. They realize that even in a strong market there will be some income loss for turnover, failure to pay rent, or late rent payment. Typically, self -storage facilities have stabilized occupancy with minimal vacancy. Interviews with manager/owners reported strong occupancy trends within the subject self -storage sector of the Greeley market area at the time of interview ranging from 0% to 10%. However, each on -site manager interviewed stated January/February is a slow time of the year that occupancies are expecting to increase in March. Given Greeley's continued growth within the Northern Colorado Sector, a lower rate could be justified. Therefore, given consideration to existing building at 95% occupancy as well as frictional vacancy typically associated with self -storage facilities, a lower rate at 4.0% will be applied for vacancy. WALTER & ASSOCIATES Real Estate Valuations & Analysis Income Approach Page 101 Expense Estimate The second step in processing the Income Approach is that of estimating the typical property expenses associated with the rental income. The subject's market rent has been estimated on a gross basis with the owner paying all expenses. In order to estimate the typical expenses for the subject, a study was made of comparable properties in the subject market area. These nine self -storage facilities are considered too reflect the expenses for the subject properties projected operational budget. The following table shows the historical operating records of these comparable self -storage facilities and the typical percentage of each expense as reported. Itemized expenses include cost of management, insurance, maintenance, taxes, utilities, trash removal, advertising, landscaping/snow removal and supplies. Expense comparables are as follows: Location/Address Comparable Expenses Expense Ratios I Id° Number of Units 1172 Automaton Way, Windsor I 30% 260 225 Johnson Drive, Fort Collins 31% 250 9O00 Gale Blketl., Thornton 35% 521 5900 S Gun Club Rd., 35% 338 36% 313 316 Basher Drive, Johnstown 2855-2855 31st Ave., Greeley, 35% 858 2450 29th Street, Greeley 38% 441 760 E Garden Cdr., Windsor 30% to 40% 552 1405 32nd St. , Evans 35% to 45% 471 The subject expenses were not projected by owner; therefore, I have relied on these expenses in order to calculate the subject net operating income. Taxes on the subject are calculated on a lower mill rate of 83.275, indicating a lower expense ratio for the subject. Therefore, based on these expense ratios we have projected the subject expenses at 34.00%, which falls within the range and considered reasonable. Now that the net operating income has been estimated, the next step in the Income Approach is capitalizing the net income into a present value indication. Capitalization Process Capitalization is defined as: "the method used in the income capitalization approach to convert a single year's income into a value conclusion". In real estate appraising, it usually takes the form of discounting. Page 513, The Appraisal of Real Estate (Eleventh Edition), published by the Appraisal Institute. WALTER & ASSOCIATES Real Estate Valuations & Analysis Income Approach Page 102 Overall Capitalization Rate An overall capitalization rate is "a ratio of one year's net operating income provided by an asset to the value of the asset; used to convert income into value in the application of the income capitalization approach". Page 31, The Dictionary of Real Estate Appraisal (Sixth Edition), published by the Appraisal Institute. Capitalization rates were derived from two sources including: Investor surveys — CoStar, Price Waterhouse Cooper & Burbach & Associates • Northern Colorado self -storage sales Regional Surveys The following table shows the current industrial and self -storage capitalization rates from the various surveys: Capitalization Rates if i du tr is l) 2017 to Date High Low Aversi CoStar Burbach PriceWaterhouse (NOCO & - Self Associates Cooper Storage (Summer) (2nd - 2015 Qtr. thru 2017 2017 Stats) Mats) 6.8% 7.5% 7.2% 9.0% 5.0% 7.0% 6.9% 4.0% 5.3% Averages 6.5% The table on previous page shows an average capitalization rate of 5.3% to 7.2% for industrial buildings and self -storage facilities. The Price Waters Coopers surveys research larger investment grade developments, which are not as applicable to the subject property. The Burbach and Associates survey with an average of 7.0% (Industrial) is primarily the Denver Metropolitan area; however, the capitalization rates typically are in line with the Northern Colorado Area representing Larimer/Weld County industrial market. The Co Star survey is for Northern Colorado and is an adequate indicator for the subject area self -storage industrial market statistics. CoStar is a sale database that tracks local and national sales and rents. Based on a narrowed search of self -storage sales in Northern Colorado and Metro Denver current capitalization rates are shown as follows: Location/Address Self -Storage Comparable Capitalization Rates - Northern Sale Colorado/Denver Date Units Metro Cap Rate 10/20/2015i 275 7.10% !14270 Highland Meader Pkwy. , Windsor 255 Johnson Dr., Fort Collins 2/23/2016 250 7.00% 2450 29th St, Greeley 6118120/7 441 7.50% 6/16/2017 858 7.50% 2855-2858 31st Ave., Greeley 011120/7 723 6.80% 443 Laredo St, 7271 Kearney St & 6345 E 78th Ave. Commerce City WALTER - ASSOCIATES Income Approach Real Estate Valuations & Analysis Page 103 The previous capitalization rates were extracted from the Northern Colorado & Denver Metro industrial self -storage market ranges from 6.80% to 7,50%. The Denver Metro area cap rates tended to be lower than Northern Colorado market area, In reconciling a capitalization rate, consideration was also given to the subject's Greeley location that typically generates slightly lower rental ratesthan neighboring Fort Collins or Windsor market areas. Based on these indications most weight has been placed on capitalization ranges from actual market sales in Northern Colorado, Given the subject's Greeley location as well as new construction, a slightly more conservative rate of 7A0% will be used and applied to estimate the net income stream, The following stabilized reconstructed operating statement is derived from the preceding income and expense estimates: RECONSTRUCTED OPERATING STATEMENT "A Complete & Stabilized" Total Potential Income Vacancy & Collection Loss Effective Income 4.0% Total Operating Expenses Year 1 Net Operating Income Capitalized @ 7.40% Indicated Value by Income Approach Rounded This is before income tax, depreciation, and debt service cash ow $164,400 $157,824 34.00% $53 660 $6,57b 104,164 $1,407,619 $1,410,000 I Market Value Self "As Complete via Income -Storage Units & Stabilized" Approach $1,410,000 Income Approach — "As Complete" Warehouse Portion Industrial Warehouse -Clear span portion of Proposed Hybrid Building Analysis Estimation of Potential Gross Income The subject warehouse portion of the hybrid building is proposed to be tenant occupied. Therefore, as a check of the lease rates, a market survey of similar industrial property rents in the subject market area was made. Of the surveyed industrial buildings, the following are the most dfrectly competitive with the subject property and are detailed as follows: 'ALTER ASSOCIATES Real Estate Valuations & Analysis Income Approach Page 104 Lease Comparable Photographs ccAalp f sarliar WALTER & ASSOCIATES Real Estate Valuations & Analysis Lease 1 2751 96 Ave., Greeley Lease 2 — 455 5th Ave., Greeley Lease 3— 527 6th Ave., Greeley Income Approach Page 105 Lease Comparable Map - 28241" Ave. / Industrial Warehouse Portion of Hybrid Building 41!1 51 C 1 gIN ST I is LOTH Sillikan Rc; r▪ i— i Din t n Nh sn Nat ont:412 ,f 2 . ix:.0.y g 0 • - T� I • ▪ et, ix lan i q j • rn i!l1 E4 ?fi � A- CTRC.NF Zr ^ 1. d rah 're ` .-y.. ,- 5Z' 41 . ,I R t T� n r�I 9711. NJ Tn s Z7Itot€; r 3811 ST DELIORME Data ue subject to license. C beLorrne DeLornie Slr:eetAtlas LISAIID 2015_ my? OMNI-be corn 0TH Si §NFU car • TI -Y • i' m r MN {7 9° E) 8Tii ST Tr, ST E 16TH ST I�N E2:ND ST am 4.4 I m Sultil4 Part t C drn t E i9T. �T _ Y 1-. - io --� ril l E≥t5 mil ASPEN AVE co I A ik 2024 1st Ave. (51 41400 oc;t) 30TH ST E 30`firi si 31ST 5T E 27TH sr ft 0 600 1200 1e00 2400 3000 3600 Data Zoom 13-1 'I'A LTER & ASSOCIATES Real Estate Valuations & Analysis Income Approach Page 106 Comparable Industrial Lease Table 'As Complete & Stabilized' Industrial Warehouse Portion ofHybrid Building - Clear Span 28241st Avenue Greeley, CO Walter and' Associates, Real estate Valuation & Analysis, Jerre 2019 (Prospective) Sub tee • n n a -:a Play J' Address 2824 1st Avenue Greeley, CO' 2751 9th Avenue Greeley, [.' } 455 5th Avenue Greele . 527 6th Greek Avenue ,,CO 4 Unit Building Lonaliontvisibility Ike A p/Condit kurctional LOSe Lease Terms Femtional Quality Tenor Size (SF) Size (SF) ion Appeal Start Date Rate PSF (Avg.) Utility 13,5041 13,590 Greeley/Average lndustrlsl/Clea►r Span 2019 / New Construction Average Appraised as NNN Industrial/Office (0%) Average to Good 8,096 8,096 Similar/Superior Similar 1958/Upd. Sim. Similar 3rd Qtr. 2017 $8.15 Ind/Office (15%+/-) Similar 2 Year u Similar/Similar 1974/Sin 1st Ind./Office 1.$ 2,400 3,912 Similar Similar qtr, $8100 NNN (l0%+/-) Similar Year . 2018 r - 21,782 21,782 Similar/Similar Similar 1 948/Inf, + 1 + Si i Oar 1st Qtr. 2018 $6.25 NNN Ind./Office (15%+1_) Similar 3 Year .a i _ 1- _ _ V__ "1. - - ASS IOU Indicated Value per SF (-) Downward (-) Downward I.Ta11 s - A SS 0 1,i►TIncome Approach Real Estate Valuattan5 & Analysis Page 107 (4)11pwartl Market Rent Discussion - Warehouse portion of Hybrid Building The rent survey indicates a range of rents from $6.00/S.F. to $8.15/S.F. net for typical rents of industrial space located within the subject property's Greeley market area. The subject will be tenant occupied~ In keeping with typical market expense structure, rents will be estimated on a triple net basis with the tenant paying utilities, management fees, taxes and insurance. All rentals are located within close proximity to the subject's Greeley market area and are considered to be good rent indicators for the subject space. Lease 1 is located in a superior setting within a quasi-commercial/industrial corridor of South Greeley, warranting downward rent pressure from this indicator. Lease 2 is much smaller in size as compared to subject, suggesting lower rent pressure from this indicator. Typically, smaller size space will lease at a higher rate than larger space (economies of scale). In addition, Lease s office build -out percentage indicates a lower rent from this indicator. Lease 3's much larger size as well as its higher overall effective age, suggests a higher rent from this indicator. All rentals are considered to have similar highest and best uses and are representative of what a is al market participant would pay in rent for the subject in the Greeley Market area. Consideration was also given to the subject's East Greeley location, size, its proposed new construction as well as it being attached to a self -storage facility. Therefore, based on the aforementioned analysis the subject's potential gross income has been projected as follows: PGI as 2824 1st Aye,, Greeley, CO Square Market E eases Foot Rent/SF Hybrid - Whse. clear span portion LTA .I : - ASSOCIATES Real Estate Valuations & Analysis Income Approach Page 108 Vacancy, Collection Loss, and Operating Expenses Vacancy & Collection Loss Both investor and the appraiser are primarily interested in the annual revenue and income the property is likely to produce over a specified period of time. It is normally a prudent practice to expect some income loss as tenants vacate, fail to pay rent, or pay rent late. I have relied on vacancy of industrial space tracked by CoStar as a relative gage for the subject overall market. The following table contains market statistics from the 4th Qtr. 2015 to the QTD 2018 as reported by the CoStar Market Reports that encompasses the Greeley industrial market area: Year End Greeley Market Average Rent NMI - Industrial Annual Rent Change Statistics % Vacancy Rate 2018 QTD $7.26 -14.59% 0.60% 2017 -1.16% i 0.80% $8.50 2016 $3.60 35.65% 1.60% 2015 i $6.34 NA 1.00% Source: CoStar Market Reports A potential investor for the subject property would allow for some annual vacancy. Considerations for vacancy consists of interviews with local brokers, the subject's location in Greeley near the Hwy. 85 Bypass corridor, 100% tenant occupancy and industry publications. Therefore, a rate of 5.0% will be applied for vacancy, which is reasonable, Expenses The second step in processing the Income Approach is that of estimating the typical property expenses associated with product of the rental income. The subject's market rent has been estimated on a triple net basis with the typical owner expenses being only management fee, structural maintenance/replacement reserves allowance. According to industry trends, a typical management expense for the subject building would be estimated at 7% of effective income. Based on available information a typical maintenance/repair expense as well as reserves for replacement for a property of this age after renovation is estimated at 2%. Now that the net operating income has been estimated, the next step in the Income Approach is capitalizing the net income into a present value indication. G� ITER & ASSOCIATES Rear Estate Valuations & Analysis Income Approach Page 109 Capitalization Process Capitalization is defined as: "the method used in the income capitalization approach to convert a single year's income into a value conclusion". In real estate appraising, it usually takes the form of discounting. Page 513, The Appraisal of Real Estate (Eleventh Edition), published by the Appraisal Institute. overall Capitalization Rate An overall capitalization rate is "a ratio of one year's net operating income provided by an asset to the value of the asset; used to convert income into value in the application of the income capitalization approach". Page 31, The Dictionary of Real Estate Appraisal (Sixth Edition), published by the Appraisal Institute. Capitalization rates were derived from two sources including: ■ Investor surveys — CoStar, Price Waterhouse Cooper & Burbach & Associates • Northern Colorado industrial sales Regional Surveys The following table shows the current industrial capitalization rates from the various surveys: Capitalization Rates I) 2017 High Low to .Date Avenge ! 1 Co Starr (2018 to QTLY Stats) 7.9% 6.7% 7.2% Burbach & Associates (Summer) 9.0% 5.0% 740% PriceWaterhouse Cooper (2nd Qtr. 2017 tats) 6.9% 4.0% 5.3% Averages 6.5% The table on the previous page shows an average capitalization rate of 5.3% to 7,2% for industrial buildings. The Price Waters Coopers surveys research larger investment grade developments, which are not as applicable to the subject property, The Burbach and Associates survey with an average of 7.0% (Industrial) is primarily the Denver Metropolitan area; however, the capitalization rates typically are in line with the Northern Colorado Area representing Wel Larimer County industrial mmket. The Costar survey is for Northern Colorado and is a good indicator for the subject area industrial market statistics. WALTER & ASSOCIATES Real Estate Valuations & Analysis Income Approach Page 110 Costar is a sale database that tracks local and national sales and rents. Based on a narrowed search of industrial sales in Northern Colorado current capitalization rates are shown as follows: Property Address 3985 S Lincoln Ave„ 320 Gateway Dr. 1616 N Lincoln Ave. 698 Technology Circle 175 14th St. SE propel, Loveland Berthoud Loveland Windsor Loveland igale Peke 5/4/2017 $3,684,211 7/28/20171 $ 3,14 5,154 11/6/2017 311/2018 6/23/2017 $ 2,300,000 $ 2,200,000 $ 975,000 Bldg SF 28,501 27,525 8,808 11,400 9,280 Price Per SF $129.27 $114427 $265.50 $192.081 $105.081 Actual Cap Rate 7.90% 7.8% 6.70% 7.00% 6.80% The previous capitalization rates were extracted from the Northern Colorado industrial market ranges from 6.70% to 7.90%. In reconciling a capitalization rate, consideration was also given to the subject's current use, its lower overall effective age as well as the strong occupancy in the immediate market area, and overall appeal of the subject property. Recent sales with capitalization rates were found in the Northern. Colorado Market Area. Based on these indications most weight has been placed on capitalization ranges from actual market sales as well as the Burbach and Associates Survey. Based on these indications as well as the subject's location in E Greeley, which typically produces a slightly higher cap rate and good overall appeal a capitalization rate toward the upper portion of the overall range at 7490% will be used and applied to estimate the net income stream. WALTER ff ASSOCIATES Real Estate Valuations & Analysis Income Approach Page 111 The following stabilized operating statement is derived from the preceding income and expense discussions_ RECONSTRUCTED OPERATING STATEMENT "As tabxlized" P01(13,500 SF x $7.75/SF) Potential. Income - Vacany & Collection Loss Effective Income Operating Expenses Fixed Expenses Real Estate Taxes Insurance Variable Expenses Management Maintenance/Reserves Total Operating Expenses Year 1 Net Operating Income Capitalized Indicated Value by Income Approach 5.0% 7.0% 2.0% 7.90% Rounded This is bcforr•c income tax, depreciation, and debt service cash . 5,231 Tenant Tenant $6,958 $1,988 $104,625 $99,394 $8,945 90,448. $1,,,144, 15 $1,145,000 Market Value via Income Approach Warehouse portion of Hybrid Building "As "omplete & Stabilized" $1,145,000 Building Size Opinion of Value Opinion of indicated value Via Income Approach 25,500 SF — self storage 13,500 SF — warehouse 3,35 Excess Land Phase II "As Complete & Stabilized" $120,000/Acre Rounded to $1,410,000 $1,145,000 $400000 (R) $2,955,000 $2,955,000 ALTER & ASSOCIATES Real Estate Valuations & Analysis Income Approach Page 112 Income Approach — "As Complete" Self -Storage Units Now that the "As Complete & Stabilized" value has been estimated we will discount the value in order to recognize the estimated time to achieve stabilized occupancy. As discussed earlier in the rental section we interviewed managers/owners of four self -storage facilities in the subject Greeley market area that reported current vacancies ranging from 90% to 100%. Also, it was noted that each onsite facility manager stated January/FebruaryJanuary/February were the slowest time of the year that they expected to increase in March/April 2018. Secure Space self -storage was built in 2017 and is a 225 -unit non -climate -controlled Fort Collins facility, which reported a 15% occupancy rate after being open for about 3.5 months, per site manager. The site manager expected to be at stabilized occupancy within 2 years or less. In addition, another relatively recent project came online within Fort Collins is SecurCare are Self -Storage, which is a 424 - unit climate -controlled facility scheduled to open in February 2017. The onsite manager of this facility also expects to be at a stabilized occupancy within 2 years or less. Both of these self -storage units are northwest of subject within Fort Collins. An older stabilized Self -Storage in Loveland at Centerra opened November 2015 and achieved 85% occupancy in 8 months, per on site manager interviewed on 6/1/2016. The self -storage industry is faring well. The subjects existing 20 -Unit facility was reported to be 95% occupied upon viewing. Therefore, given this only 21 units or 52.5% will need to be absorbed to reach stabilized occupancy. It is difficult to predict how long it will take for the property to stabilize, but assuming active and competent management is willing to accept a market rental rate, 18 months is a reasonable projection. Giving consideration to projected population growth in the Greeley market area, strong occupancy levels of existing self -storage facilities as well as the competitors in the Greeley market area, an absorption period of 1.5 years is reasonable. As indicated below expenses to reach stabilized occupancy total $55,896. It is unreasonable to assume that an investor would purchase a vacant building without some anticipated profit. A 10% entrepreneurial incentive will also be applied to the "at stabilized occupancy" value due to the risk involved_. Total cost of absorption is projected at $61,486. Rent Loss (2.5 Year Lease Up) Entrepreneurial Profit (10%) of Opinion of value Total Lease Up Costs to Stabilization Indicated Value "As StabilizedValue" Less Lease Up Costs Indicated Value "As Complete" WALTER &. ASSOCIATES Real Estate Valuations & Analysis Sales Comparison Approach Page 113 In addition, interviews with brokers specializing in the self -storage industry stated that selling the facilities on an 'as complete' basis with a Certificate of occupancy is becoming more common. Adam Schlosser a broker specializing nationally in self -storage facilities with Marcus & Millichap, reported a standardized practice within in the industry to determine 'as complete' value is adding 150-200 basis points to the capitalization rate. This format is applied as a test of reasonableness in the following chart. We've applied 100 basis points to the 'as complete & stabilized' cap rate of 7.40%, resulting in an 8.40% cap rate, which is on the following page: RECONSTRUCTED OPERATING T TEMENT "As Complete" Total Potential Income Vacancy & Collection Loss 4+o% Effective Income Total Operating Expenses Year 1 Net Operating Income Capitalized 8.40% $b,576 34.00% Indicated Value by Income Approach Rounded Nearest 10K This is before income taxe areprec /al and debt service cash flow. S 164,400 $157,824 $53,660 11%164 $1,240,046 $1,240,000 After considering each method to determine the prospective "as complete" market value for the subject property, as of June 1, 2019, allowing 12 months to construct the improvements, is: Market Value via Incrt a Approach Self -Storage portion of Existing & Hybrid Building "AsComplete" $1,300,000 Income indicated Value Comparison Via Building Size Per SF Value Approach 25,500 SF — 13,500 SF self — warehouse storage $1,300,000 3.35 Excess Land $120,000/Acre $1,100,000 _ $400,000 (RR Phase II "As Comte" Rounded $2,800,000 to S2,800,000 WA LTEII &S_ SS1CI A, T Ics Real Estate Valuations & Analysis Sales Comparison Approach Page 114 Income Approach - "As Complete" Industrial Condos The income approach analyzes the investment characteristics of an income producing property and the benefits received by the owner of such a property. The subject's six -unit industrial flex condos unit are being modeled herein for sell-off'. The Income Approach will be used to measure the value of the income stream created by selling those 6 units, based on my opinion of market value for individual units with sell --out occurring and selling commissions and holding expenses deducted. With projected Anticipated Use of the Income Approach Technique, Market Value is developed for the group of 6 -units based upon gross income to be generated by the sale of individual units within the development, less carrying costs and entrepreneurial profit. Carrying costs including sales commissions, miscellaneous expenses, real estate taxes and developer profit. Net proceeds from unit sales are then discounted to present value at a rate commensurate with the risk involved in the project to attract investment capital. The conclusion of the financial discounting process is an estimate of Market Value for the 6 industrial condos as of the date of Prospective Market Value. The 6 condos will be sold individually, so absorption is modeled over a sell-out period. The Anticipated Use Technique of the Income Approach is developed using the following steps. • Estimate Market Value of the fmi.shed units to potential buyers; • Estimate an applicable absorption period to sell the units: • Estimate applicable development and carrying costs over the absorption period; • Discount the future cash flow of unit sales to present and accumulate the present worth of the income stream to a PresentValue indication. Market Value Opinion of the Finished Industrial Condos The market value was previously developed within the Sales Approach application. Based on preceding Sales Approach opinion of Value (Page 94), an aggregate retail value for the proposed 6 -unit building is as follows: Aggregate Retail - 2824 ilst Ave.., Greeley, CO (industrial Condo Units) Aggregate Unit Type Retail/Unit # Units Retail +Units at 1,470 SF L Valued at $104.76/SF I $154,000 6 $924,000 Aggregate Retail Value $924,000 For simplicity, adding the 6 -individual unit values together as noted above indicates the total Market Value of $924,000. However, the 6 units are intended for individual sale, and that will take a period of time to achieve. Since there are several units that need to be sold individually, the appraisal process requires us to WALTER & ASSOCIATES Real Estate Valuations & Analysis Income Approach Page 115 consider the time necessary to sell the units along with the costs to sell and hold the inventory and then discount those incomes streams over time. Based on the opinion of individual market values, the average unit value for the subject for use in the subsequent absorption analysis equals $154,000 (Total Retail Value = $924,000 / 6 Units = $154,000) for the proposed units. Therefore, the $154,000 average unit value will be used in the sell-out analysis. Project Unit Sellout and Prospective Market Value "At Completion" / Bulk Sale Value Estimating Bulk Sates Value/Prospective Market Value "Upon Completion of Construction" for the subject, a cash flow analysis is prepared that analyses the projected sell-out for the subject's 6 - units over an applicable absorption period, which takes into account the cost of sales and holding costs of units over the sellout period. Absorption of Subject 6 -Unit Industrial Condo Units The subject industrial condo units are considered very marketable in the Greeley area. A 6 -unit project in Windsor recently sold out in less than 6 months, although one unit sold to the developer. Given these considerations as well as the quality of development, quantity and location of subject units, a slightly more conservative absorption projectionl2-months will be used for subject's - units. Therefore, given this analysis it is reasonable to assume that the subject sell out/absorb the 6 total units in 12 months using average rates of 13 units per quarter or (0.50 -Units per month). Revenue Growth Rates (Appreciation) As noted earlier within the Sales Comparison Approach in forming an opinion of value market trends over the past year are showing sign of stabilizing. However, consideration is also given to construction cost that will continue to rise. Therefore, based on current stabilizing market trends and increasing cost of construction, we will apply a quarterly appreciation in our analysis based on an annual rate of 2 %. Carrying Costs - Sales Commissions Marketing a development typically demands expenses for brokerage conissions. Typical brokerage selling commission range between 4% to 7%. Considering the subject project, total commission will be based on 6% of gross revenues. Property Taxes/Legal and accounting/Administration Costs In marketing the project, other expenses are incurred for cost such as property taxes, legal, accounting and administration. Therefore, an opinion of $390/Qtr./Unit will be applied for holding costs that consist of property taxes, HOA dues, legal, accounting, administration and miscellaneous expenses, which is reasonable. WALTER ASSOCIATES Real Estate Valuations & Analysis Income Approach Page 116 Capitalization Analysis The anticipated developer/entrepreneurial profit must be recognized since it represents primary nts the incentive in undertaking a project of this nature. This amount represents the amount the developer expects to receive as compensation for undertaking the project. Whether a profit is actually realized reaed depends upon the expertise of the developer in coordinatin the various components .� p eats of the construction process and the local economy. Typically, the amount ofprofit varies with the ' size and complexity of the project. In most cases, owner -occupied and single -use properties p � � p s will display smaller profit ranges than will larger projects, multi -tenant or subdivisions. In most projects, cases, observed profit ranges from 10% to 20% for smaller less complicated structures. Given subject is at an advanced stage of development given its approval status, much of the development � risk and expense is reduced. Therefore, an entrepreneurial profit of 8% is applied to the subject. �ect. A discounted cash flow analysis will be used to form an opinion of market value for p the subject's proposed 6 -unit industrial condos. Various factors weigh on determining an appropriate discount rate for the subject that largely are determined by increasing or decreasing risk of ' onershrp. Factors increasing risk are the following: location in SE Greeley,which is east of area's growth that is in W Greeley, and the likelihood of interest rates rising. Factors decreasing riskownership of include: subject project is approved by the City of Greeley and strong co n.erclal market condition indicators as well as historically low vacancy rates. Now that the subject's absorption and expenses have been addressed, the next step is to ' ' estimate a discount rate. Discount Rate (Internal Rate of Return) Discount rates are influenced by many considerations, including degree of risk, market attitudes with respect to future inflation, prospective rates of return for alternative investment .t opportunities, historical rates of return earned by comparable properties, supply/demand for mortgage funds, and availability of tax shelter. Rate selection requires appraisal 'ud ent and knowledge edge concerning prevailing market attitudes and economic conditions. The discount rate used in esti • ll�ating the present value of the income stream from the subject property reflects the time, supply p'p y and demand, perceived risk, and expense over the holding period. The prime rate is a major factor and component of the discount rate. As of Rune 6, 2018, the prime rate was 4.75%; mortgage yield rates were in the 4.01 to 4.74 ercent range; US Treasury bond yields were 1.90 to 308 percent, and yields on alternative investments tments such as Certificates of Deposit (5 year) was 2.814 percent. Since these alternative inv estments are relatively safe in comparison to real estate development, an incremental increase is necessary for the discount rate to compensate for investor perceived risk in the use of the capital p' sum, need for management of the investment, as well as the time required to realize cash from rental income and the resale of the property (Le. non -liquidity). These factors suggest a loading of 4. 0 to 6.0 percent and a discount rate of approximately 9.0 to 12.0 percent. (a built-up rate). WALTER & ASSOCIATES Real Estate Valuations & Analysis Income Approach Page 117 Discount rates were also derived from two sources including: • Investor surveys — Realty Rates "Mountain Region Survey" • Burbach & Associates Realty rates survey is broken down into a geographic area that includes Colorado's Mountain region sector. The Developer Survey 2nd Qtr. 2018 is on following page: IIeaJtyRates.c aril DE ELOPER SURVEY - 2nd Quarter 201 e' MotAnain - Condominiums 8 Co -Ups Actual Rates Min Mn lAvg Pelona. ResEdentla I 13.136x ns.ee % 19.21" Hi-Rise?Urban Townhouse 14.67 c 25.08•,.; 1$147% G aidendSuburban Townhouse 13.S6X 24.50'x ! 19.45% Mixed Use 14 _,45X 25.77xI3.30',, Resort & Second Home 15.61 28, kr: 21133X H i41 i r 15.77X 28.07% 21.48 Gardentrowthouss 15..61: 24.35%` 19.111%. Comm+ercial:Industrial 11.84: 26.36% 17.6?x Uthan OFF ke 12 r12V 23.52:' 17.85% Suburban Office 11.07x 23,24x! 15.65% P rt.a 12.71' 2€. 19.75 Industrial 11.84" 24.01%. 17_21X Pro -Forma Rates Mlirr Mai 13.28% 24S4x 14.0 e% 24.04x 13.21 . 23,591. 13.28x 24.74x 14.99x 2:695x 15.14 26.95X 14.99X 23.39' 11.37'', 25.38,: 12A Ox 22.59. 1133% 22.31' 12,E Orfre. 25.30%. 1I2 7X 2105% Aug 19.35x 19,1 17.71 18.25 < 19.52'. 20, 18.42> 16,96' 17.14% 16.18'x 18.00% 1552% '1A Galr t fir 2010 Dalt Copyright 20$ tinityRott nom"' The last category of "Industrial" condominiums relates directly to the subject, whereas survey respondents have experienced actual yields ranging from 11.84% to 24.01%, with an average of 17.21% (ie above charts bottom category on left). These rates are reflective and inclusive of developer's profit. The Burbach and Associates (Winter 2017/2018) survey indicates Discount Yield Rate (IRR) ranging from 7.0% to 10.0% (Industrial/Warehouse) is primarily the Denver Metropolitan area; however, the capitalization rates typically are in line with the Northern Colorado Area representing Larimer/Weld County industrial market. As noted earlier within this analysis, a separate line item deduction for developer's profit of 8% of gross revenues. Deducted from the RealtyRates survey range, the indicated average rate of 17,21% would then be deducted 8% equating to 921% % discount rate. After careful analysis and considering the subject's smaller no. of units, current low interest rates, relatively lower risk associated with development, a discount of the properties cash flow at a yield rate of 18%. As previously mentioned, we have made an 8% line -item deduction for secondary profit: therefore, the Discount Rate O]C ) applied to the prospective cash flows will be 10.0% (10% + 8% — 18%). The discounted cash flow representing the subject's 6 -Unit, 1 year -sell off is detailed on the following page: WALTER & ASSOCIATES Real Estate Valuations & Analysis Income Approach Page 118 DISCOUNTED CASH FLOW - .5 PROPOSED INDUSTRAL CONDO UNITS Unit Tye 6-U:nits at 1,470 SF Aggregate Retail value Average Retail Value Units Available Units Sold Units Remaining Gross Sale Proceeds .Retail/Unit Units Vaioed gag 9104.16/5 F $154,000 riperating Ex:t naat Sale Commissions 6,00% Carrying Costs (HOA Duos $368Vb., Taxes $1,125/Year $.390/Qtr./Unit airs Profit 8.00% Total Carrying Costa Net Sale Proceeds Discount Rate @ 10% Net Present Vak,e of Cash Flows Total NPV "As Complete" Rounded 10.00% WALTfIt t ASSOCIATES Real Estate Valuation & Analysts 6 1.5 4.5 $231,000 $13,860 $2,340 'f8 4B0 $34,680 f $196,320 0.97645409 $191,697 $765,395 $765,000 6 4.5 1.5 3 $235,620 Arne Retail $924,000 $024,000 $154,000 near Se 2% Apprec iai ion 3 1.5 1.5 $240,240 $244,860 2 1.5 0 $14,137 $14,414 $14,692 $1,755 $1,170 $585 $18,850 $19,219 $19,580 $34,742 $34, 804 $34,865 $200,878 h $209,995 0.953462589 0.931012445 0.901 $191i530 $191, 264 $190404 $127,500 lUnit - Bulk income Approach Page 119 "As Is" Discussion -- Phase II The "As Complete & Stabilized" as well as the "As Complete" values have been estimated. Now we will form the "As Is" opinion of value of subject site with improvements using land value from the Cost Approach, and Income Approach for subject's existing 12,000 SF — 20 Unit building. . As discussed in detail within the Cost Approach, opinion of land value was $12 000/Acre or $775,320 or $775,000 (R) for the 6.461 Acre Excess Land (1 -Acre was allocated for existing g building site). te). As mentioned, the subject is currently improved with a 12,000 SF storage building containing ((20) - 15 x 40 storage units. Each units potential income was projected to be rented at $325/month, which is considered at market and used to calculate potential gross income. "As Is"' / Non -Temperature Controlled Self Storage Units Subject (Non - Climate - ControNled) (UnitMix) Size G 15 x 40 Total Units 20 Projected Subject Rent per Unit $325 Projected EGI per Month $6,500 12 Months 12 Projected POI $78,000 Expenses were calculated using same 34% as previously used in "As Complete & Stabilized" with a 7.40% capitalization rate. Value of improvements described will be calculated using a reconstructed operating statement as follows: RECONSTRUCTED bPE�ATING SSTATEMENT 'As Is ff (20) 10) 15 x 40 Non -Temperature Controlled d Total Potential Income - 20 Units x 325 Mo. x 12 Vacancy & Collection Loss 4a0% Effective Income Total Operating Expenses Year 1 Net Operating Income Capitalized @ 7&40% Indicate d Value by Income Approach This is before income tax, depreciation, and debt service cash /low WALTER & ASSOCIATES Real Estate Valuation &Analysis $3,120 34.00% Rounded tc Nearest 10K I $78,000 $74,880 $25,459 49,421 $667,849 $670,000 Final Reconciliation Page 120 Building/Land Indicated Value (20) 15 x 40 Non - Temperature Controlled 6.461 Acres of Excess Land $120,000/Acre Total "As Is" $670,000 $775,000 (R) $1,365,000 Market Value via Income & Sales Comparison Approach "As Is" $1,445,000 WALTER & ASSOCIATES Real Estate Valuation & Analysis Final Reconciliation Page 121 Final Reconciliation This section is a summary of the property, the data available, the thought processes, and the applicable approaches to value. A summary of each value conclusion indicates the following: The indicated value of the subject property through the three approaches: !Kid Self -Storage Units/Warehouse Clear Span Building Sales Comparison & Income Approach "As Is" Phase II - 12,000 SF Storage Building 6.461 Ac. Excess Land - $1,445,000 Cost Approach - -.. , .., $3,110,000 Sales Comparison Approach "As Complete & Stabilized" - $3,085,000 Income Approach "As Complete & Stabilized" -$2,955,000 Income Approach "As Complete" - $2,800,000 Prospective Market Value "Stabilized": ... Prospective Market Value "As Complete": .. II * a ...i i i i t i. r.$3,0 10,000 0••■•■■•••0•••• ••••1.327800#000 "At Completion" 6 Industrial Condominium Units Cost Approach - $955,000 Sales Comparison Approach "Retail Aggregate" - $924,00 ► Income Approach " D F" Avg. Unit Value" .r ...... r r r r . 154,000 Income Approach "D F" — Present Value, 1 -Year Sell -Out - tx U a o r It n r.nr* i•. a 1 tO,. co$7 65,000 Prospective Market Value -Ind. Condos Portion "As Complete":................ 765,000 The Cost Approach is most useful when the building is new and there is little accrued depreciation involved. Typically, this approach is most useful in valuing properties which are proposed or newer, which is the case for the subject. Therefore, this approach is considered to produce a supportive value indication for the subject property. There was adequate market data that is representative of the market appeal of the subject property. For this reason, the Sales Comparison Approach is considered to produce a supportive value indication for the subject properties real property opinion of value. Overall reliability is considered to be adequate, but an investor being the most probable buyer, secondary emphasis is placed on the sales approach. The Income Capitalization Approach is frequently the most effective means of appraising income producing properties. There was adequate rental data available for self -storage facilities such as the subject in Greeley immediate market area. The surrounding trade area was surveyed for rents, vacancy and cap rate indicators. Expense comparables were limited, however analyzed as LTER & ASSOCIATES Real Estate Valuation & Analysis Final Reconciliation Page 122 available. Overall reliability is considered to be good, and given the nature of the subject, primary emphasis is placed on the income capitalization approach. ill approaches indicate a consistent range of value for the "as compete & stabilized" subject property with a variance of only 5.24% between the highest to lowest value conclusions. Based on the analysis presented in this report, it is my opinion that the "As Is" Market Value of the Fee Simple Interest in the subject property Phase II - 747 Acre "Existing 12,000 SF Building Excess Land Only" as of the May 15, 2018 viewing is as follows: Conclusion of "As is" 12,000 SF Self -Storage Building & 6.461 Excess Land - Opinion of Market Value (Fee Simple Interest) One Million Four Hundred and Forty -Five Thousand Dollars $1,445 GOO Based on the analysis presented in this report, it is my opinion that the "As Complete Stabilized" Market Value of the Leased Fee Interest in the subject property "Proposed self - storage facility/clear span building with excess land" as of the December 1, 2020 prospective value is as follows: Conclusion of "As Complete Stabilized" Self-Stura a/.l*I brid Building &Excess Land a Opinion of Market 'clue (Leased Fee Interest) Three Million Dollars $3,000,000 Based on the analysis presented in this report, it is my opinion that the "As omplete" Market Value of the Leased Fee Interest in the subject property "Proposed self storage facility/clear span building with excess land" upon completion but prior to stabilization as of the June 1, 2019 prospective value is as follows: Conclusion of "As Complete" Self-Storage/Warehouse - Hybrid Building' & Excess Land - Opinion of Market Value. (Leased Fee Interest) Two Million Eight Hundred Thousand Dollars S,800,GQ0 WALTER & ASSOCIATES Real Estate Valuation & Analysis Final Reconciliation Page 123 Based on the analysis presented in this report, it is my opinion that the "Aggregate Retail" Market Value of the subject property "6 -Unit condo building" upon completion but prior to sell- off as of the June 1, 2019 prospective value is as follows: "Aggregate Conclusion of Retail" 6 -Unit Condo Building as Opinion of Market Value Nine Hundred $924,000 and Twenty -Four or 154,000/Unit Thousand Dollars Based on the analysis presented in this report, it is my opinion that the "DCF — Present Value, 1 - Year Sell -Out" Market Value of the subject property "6 -Unit condo building" value is as follows: Conclusion .of "Present Value, 1 Year Sell-Out1' 6 -Unit Condo Building — Opinion of Market Value Seven Hundred and Sixty -Five Thousand Dollars $765,000 or $127,500/Unit WALTER & ASSOCIATES Real Estate Valuation & Analysis Final Reconciliation Page 124 NOTE: For purposes of this report a hypothetical condition exists whereas the total site 7.461 Acres will be split into 3 separate parcels with improvements with the remaining 3.35 Acres allocated as excess land for the "as is" as well as the "as complete" valuation. Land allocations are on page 57 of this report. Please note, the site area totaling 7 461 Acres in the process of being split, re- platted and recorded with Weld County Assessorfrom its parent tract totaling 12,359 Acres. NOTE: An extraordinary assumption exists due to the subject's valuation being based upon information received bothverbally and in documentation from the owner (Wayne Frelund) and plans designed by RidgeTop Engineering and Consulting. The subject is currently mostly vacant land with one existing 12,000 SF building on site, Implied is a twelve-month preparation/construction time. The "as complete" value is estimated as of June I, 2019, while the "as stabilized" is projected to stabilize in one and a half years or December 1, 2020. The subject's valuation is based upon information received both verbally and in documentation form from the owner Per the City of Greeley, the project has an approved USSR (Use by Special Review), subject to final approval of drawings. The estimate of prospective Market Value "At Completion of Construction " of Phase Il is specifically condition on the Extraordinary Assumption that the project as described hereinreceives final approval from the City of Greeley, specifically referencing that the project can be built so long as it does not exceed quantities as specified in the USR, Developer Wayne Frelund has confirmed described proposed improvements as noted throughout this report. Elements provided are expected to be completed per plans and specification in a timely satisfactory and workmanlike manner. In the event the provided information in regard to worT nanship is below industry standards or as reported by owner, it may have an affect or impact on. value, W A LTE R &r _ASSOCIATES Real Estate Valuation & Analysis Exposure and Marketing Time Page 125 Exposure Time and .Marketing Time The exposure period is the period of time, prior to the date of value, the subject property is exposed to the market prior to being sold at the appraised value on the date of value. The marketing time is the amount of time require€1 to sell the property after the date of value. The exposure/marketing time is dependent on many factors including: • Professional exposure to the market • Reasonableness of asking price • Health of the overall market • Availability of financing • Competitive strengths of the subject property The following table includes industrial sales in the Greeley since 1st Qtr, 2017: Industrial Sales/Exposure Time • Greeley, Colorado Exposure Property Address Property City Sale Price Sale Date Time 2881 S 31st Ave Greeley $762,500 3/6/2017 192 923-937 A St Greeley $660,000 7/26/2017 125 1108E 18th St Greeley $2907000 4/14/2017 193 Greeley 700 6th Ave $250,000 4/28/2017 23 Low: 23 High: 193 Avg: 133 Source: Coster Exposure time from 2008 to 2012 most markets experienced significantly longer exposure and marketing periods due to the soft market and the reduced availability of financing. Over the past four years market indications such as decreasing vacancies, increasing rents, reduced capitalization rates, and larger sales volumes all indicate a healthier market. Based on the exposure periods in the above table and the current market conditions, my value conclusion represents a market price achievable in 9 months or less prior to the effective date of value. The table on the following page includes self -storage sales in Northern Colorado & Metro Denver since October 2015: WALTER & LTER& S O CI T E S Real Estate Valuation &Analysis Exposure and Marketing Time Page 126 Property Self Address Storage Sees/Exposure sit PropertyCity Time = Northern Sale Colorado/Denver Price Sale Date Metro Bldg SF Exposure Time 4270 Highland Meadows Pkwy. Windsor $7,700,000 12/23/2015 45,949 120 2855-2858 31st St. Greeley 6/16/2017 108,600 14 $5,800,000 Greeley 2450 29th St. $4,200,000 6/16/2017 68,972 14 7059 S Kenton St. $13,500,000 Centennial 4/13/2016 62,600 35 443 Laredo St.17271 Kearney St. Aurora/Commerce City_ $9,900,000 I 6/1/2017 109,586 30 9000 Gale Blvd. Thornton $12,809,345 3/1/2016 62.116 30 Low: 14 High: 120 Avg: 41 Source: CoStar/Brokers Exposure time from 2008 to 2012 most markets experienced significantly longer exposure and marketing periods due to the soft market and the reduced availability of financing. Over the past three years market indications such as decreasing vacancies, increasing rents, reduced capitalization rates, and larger sales volumes all indicate a healthier market. Minimal exposure times for self -storage facilities have been found in 2018, which is expected to representa shorter exposure period. The majority of sales occurred within three months or less. In addition, several recent self -storage sales transferred with no broker involved selling by word of mouth to Public REETS . This further illustrates the demand for this property type along Colorado's Front Range. Based on the exposure periods in the above table and the current market conditions, my value conclusion represents a market price achievable a blended exposure period of typical industrial buildings and self - storage facilities of eight months or less prior to the effective date of value. Respectfully Submitted, Walter & Associates C jouz4z- Gre L alter Colorado-CG100039718: December 31, 2019 WALTER & ASSOCIATES Real Estate Valuation & Analysis Exposure and Marketing Time Page 127 ADDENDA Qualifications WALTER p ASSOCIATES Addenda Real Estate Valuations & Analysis Greg Walter Professional License Colorado Certified General Real Estate Appraiser Presently working toward the MAI designation Phone 970-556-1223 gwa l ter I (1M-OrnaiLcsom EDUCATION Ohio University, Athens Ohio Bachelor of Arts, Organizational Communication; Minor in Business Ohio University, Lancaster, Ohio. - Associates Degree, Business Management PROFESSIONAL EXPERIENCE & EMPLOYMENT • Full time experience in real estate appraising in Colorado, Tennessee, Ohio, Michigan & Pennsylvania since 1997. i Walter & Associates (Colorado) • Shannon & Associates (Colorado) Walter & Associates (Tennessee) • The William Fall Group (Ohio) COURSES & SEMINARS Professional Standards of Practice & Code of Ethics Sales Comparison Approach Cost & Income Approaches Appraising Regulatory Issues and the Government Seminar 23rd Annual Real Estate Economic Seminar 310 -Basic Income Approach 330- Apartment Appraising 420 -Ethics & Practices 500 -Advanced Residential Report Writing 510 -Advanced Income & Capitalization 520 -Highest & Best Use 530 -Advanced Cost & Sales 540 -Advanced Report Writing 550 -Advanced Applications 710 -Condemnation Appraising, Principles & Applications 720 -Condemnation Appraising, Advanced Applications CROSS SECTION OF APPRAISAL/ANALYSIS * Industrial Warehouses • Community / Neighborhood Shopping Centers • Service Garages • Schools • Apartment Buildings • Office Buildings • Office Condominium Projects • Condemnation, damages 2/15 — Present 10/12 — 1115 10/03 - 07/12 1997 - 2003 Ohio Assoc, of Realtors Ohio Assoc. of Realtors Ohio Assoc. of Realtors Appraisal Institute Appraisal Institute Appraisal Institute Appraisal Institute Appraisal Institute Appraisal Institute Appraisal Institute Appraisal Institute Appraisal Institute Appraisal Institute Appraisal Institute Appraisal Institute Appraisal Institute WORK Special Purpose Properties Retail Strips Commercial/Industrial Land Residential Developments Hotels Bank Buildings Airport Hangers Agricultural Land with Water Rights WALTER & ASSOCIATES Addenda Real Estate Valuations & Analysis Grog Allen Waller 537 Linden View Crime Fart Collins, CO- 80524 Director: Marcia Waters State of Dorado Department of Regulatory Agencies Division of Real Estate Board of Reel Estate Appraisers Greg Alien Wafter Certified -General App rier License #: CG.10003Q718 Status: Active Expires: 12/31/2019 For the most up to date information regarding this credential, visit http://dora.cotora gov/dre WA I/f Ell + MisOllAsticS Addenda Real Estate Valuations & Analysis Engagement Letter WALTER SI ASSOCIATES Addenda Real Estate Valuations & Analysis COMMERCIAL APPRAISAL ENGAGEMENT LETTER This letter shall serve as your instructions to perform an appraisal on the below referenced property for FARMERS BANK as your client. At a minimum, the appraisal must be performed in accordance with the current edition of Uniform Standai ds of Professional Appraisal Practice (USPAP) as promulgated by the Appraisal Standards Board of the Appraisal Foundation. CT CM -- DATE May 14, 2018 ORDERED BY Bev Ziemer DUE DATE June 11, 2018 APPRAISER COMPANY Greg Walter Walter & Associates The above appraiser will be the principal appraiser, if the appraiser requires professional assistance from others, those Individuals must be soh -sloe -tone to the Bank. REPORT TYPE APPROACHES REQUESTED APPRAISAL FEE Complete Summary Consider all 3 — income, Sales, and Construction L$3,000 PROPERTY ADDRESS TO BE APPRAISED PARCEL/LEGAL DESCRIPTION SUBJECT COUNTY REAL ESTATE DESCRIPTION PROPERTY RIGHTS NAME OF PROPERTY OWNERS CONTACT PERSON ,{ PHONE if COMMENTS REPORT & INVOICE ATTENTION 1$t Avenue Storage — Phase 2 108 E. 2816 St., Greeley, eeley. CO. 80631 i Lot 1, Miller Farm Minor Subdivision 2' Replat Weld Existing and proposed storage and commercial warehouse units Fee Simple and Leased Fee 1st Avenue Partner, LLC Wayne Frelund 970420-9048 Existing building, Phase 2 Building 1, Phase 2 Building 2, andexcess platted land for additional approved; buildings Farmers Bank, Attention: Bev Ziemer 713 S. lemay, Fort Collins, CO. 805 24 By signing below, you certify and acknowledge that you have no direct or indirect interest, financial or otherwise, in the property or transaction, The appraisal was not based on a requested valuation, or compensation conditioned upon the approval of a loan, The purpose of the appraisal assignment includes all of time following: ia( basis for evaluation of a loan request; (b) basis for making investment decisions; {c) basis for establishing or adjusting book value; or (d) risk management purposes, This report may be distributed by the Bank, in its entirety, to selected third parties, including but not limited to, the owner of the property. Penalty Clause: For every day after the Due Date that the appraisal Is ate, so long as client has provided Information available to It in a timely manner to appraiser, the fee due the appraiser shall be reduced by $50.00 per day. Please sign below acknowledging receipt of the letter and agreement to its terms and conditions. Return the signed of igin a l letter to the undersigned. I/We have reviewed the engagement letter and hereby certify that all reports will comply with USPAP's PAP's generally accepted standards of practice. It is understood that the engagement letter and all resulting reports and documentation are proprietary in nature and will be held in strict coptideac APPRAISER SIGNATURE DATE WALTER & ASSOCIATES Addenda Real Estate Valuations & Analysis Zoning Regulations, per City of Greeley (I -M -Industrial Medium Intensity District) WALTER ER ASSOCIATES Addenda Real Estate Valuations & Analysis 3 15r2D18 Greeley. CO Munieipaf Cade 18.38.090 - Industrial Districts (l -L Low Intensity; I -M Medium Intensity; I -H High Intensity) These districts are intended for areas containing or planned for low-, medium - and high -intensity industrial uses. These districts provide for the development and protection of industrial uses along with commercial support uses. Such uses may be found along arterial streets and highways and rail corridors, Also refer to the Table of Principal Land Uses for the I -L, I -M and I -H Districts in Chapter 8.30 for land uses. Industrial District Development Standards Category Base Standards Base Standard Options A. Land Use Institutional, commercial, industrial allowed uses B. Lot Size (may differ for hillside areas - see Chapter 18.50) No minimum (may differ for hillside areas) Institutional, commercial, industrial allowed uses No minimum (may differ for hillside areas) MMRll/Redevelop (See Chapter _l_a_44 and Chapter 18.34, Article III) Institutional, commercial, industrial allowed uses No minimum (may differ for hillside areas) WA LTIM ASSOCIATES Real Estate Valuations & Analysis Addenda 3/1512018 C. Street Width (Iota! industrial streets) D. Open Space - % of site Greeley. CO Municipal Cade 37' pavement, 5Q1 r - Base, Option o -w 10 or AC Private (on lot): 10% E4 Sidewalks 5' wide attached, (local streets) both sides F. Parking G. Landscaping, Buffering and Perimeter Treatment H, Lot Coverage - ma , See Chapier 18 42 Private (on lot): 10% or Option 16 Base, AC * See h &ter 18.42 See p►ter 1844 Seehapter JM4 90% 90% Match existing street Private (on lot): 10%, Option 17 or AC Match existing sidewalk See Chapter 18A2 and Chapter 18434, Article II See Chapter 18.44 90%, option 17 or AC WALTER & ASSOCIATES Real Estate Valuations & Analysis Addenda 3/15/2018 L Building, Structure Setbacks (See Chapter la52 for access. buildings & structures) J. Building, Structure Height Greeley, CO htlunicipal Code 25' for all sides Base, Option Base, Option 4 or adjacent to streets, 4 or AC * AC * interior rear and interior side based on Building Code requirements 40' I-4, I -M; 60' Hai Base, Option Base, Option 5 or 5,6orAC* 6 o AC* * Alternative Compliance (AC) • See Section 11384140, (Ord. 22, 2010 §1; Ord. 04, 2008 §5) Ord. 65, 2002 1; Card. 46, 1999 §1; Ord, 27, 1998 §1) WALTER SOCI TES Real Estate Valuations & Analysis Addenda Cost Sheets (Marshall & Swift) WALTER & ASSOCI ATES Addenda Real Estate Valuations & Analysis CALCULATOR METHOD CiD tit ite wet 4 MINI -WAREHOUSES (38.6) Cs N le T 497 83 3.30 46.25 I 371.35 2.46 34.50 277,17 1.84 25,75 0 est tir e cs1 M1 3 g N ig in gi G r F 476 3D 3.1E 4425 355.21 2.36 3100 265 .E7 1.76 24,7x0 197.5 - 1.3T 18.35 Subdivided cubicles, . Good�. ;riding or brick veneer, good smutty outlets ftghing in t y_Ci partitions. office-aeach ,h . mini um plumbing None A Mod frame and stucco or wood Subdivided into sarh s;. mixed Adequate electrical seswic�e perNone saw, unfinished stab. smaq office spate, minimum water haw cost Low-dosi stucco or siring, Est �rtxfivid+e~rd into Irw cubicles„ light Minimum electrical service None entries slab, no support Ladles Goo d Good p.oie frame, metal siding, Subdvided cubicles. good security Electric -al outlets and Igh`ttag in No ne nasty doors 7 . office -apartment each sue, minimum plumbing b Sudued into cues, mixed A Wood pole frame. n�atad sitingequate electrical �.t per None sin s. tn1erWisixod SW,. t rrdlt cue space, :rrrinercre wi er LOW cwt Role trait cu , metal siding, bw-cost &ubdiwid d irrba large bides. light minimum sfeuricei service,None door entries slab. to support facThttes Good t erpneered frame, insulated, subdivided ail:noses, good security Electrical outlets and Bghg% in hbrte doors partitions. rae#nni e$ch sane, e>~rtirrti plumbing Average Light steel frame and metal siding Subxdivided(±iint�o[�]cubicles, mistab, maixed office Adequate tIea'ic al service per N one space. rniiimurri water . Lt txatt Lot steel tame, siding, ivw`+arst Subd iafed into Large cubicles. light minimum electrical service None ernines slab, no support facilAaen Cheap Light steel tare, siding and doom Extra large only: all cubes > Ob sq. It. Minimum electrical only None INC, PLUMB IECHANfOAL outlets and lighten ntinimcrrn plum +aartssr'uriicm Subdivided into cubicle sue, unfinished fib, ight roof, Subdivided into a tyc stab. no t taci9itie Brick, block or lift -up, rn Blade, tilt -up, light Low -c block. titt-up, low -iced dope entrias 5 Cu) 4 C O r 2 0. Is I, 8agE E rig Lul th h.. i r St I 40 CA go iii ID 57-74 4.46 62 50 513,99 3.41 47,75 It Z 8 1 ; I Block, 1111 -up,.,. sow metal and Subdivided into cubicles. mixed sizes, *Adequate electrical service, Ventilation Average glas trim unfinished 5,€s, equate Lace mrwmum plumbing I 2lii Lji E li if 0 i ii -E t t. ii rti i Aar 1 Subdivided cuttbida , its partitions. officerapartnent i 1 it It ,:ti i 1 II It 1 I 1 it .3 j I , . ' O - g 64 E In „r V ill a riu 1 I 11 p t .i 1 41gil 20 in 1 g III 1. e fl es. 14 $ Nizi . i E 1115 bt fl'!sk 2 h. i; II ,II ill ilirg xi il F 0 _ I I 1si t . gs z x 01 '2 1 1 ki i 8 LI Via rt-11 d E I `• t .4' ali if 11 k mst ,L2 I 11 III jh cYCI r -dip iahhfl 5r t it it At: 611 Is 44 I 1 ta Irg it iti It i tt ii tue au in igt .w t• yesfug ?rnci E44 et rt i sic WALTER & ASSOCIATES Addenda Real Estate Valuations & Analysis sioto LI rift La) CALCULATOR METHOD 04) CO I- us O e 8 pp 8 in r 0 soo r to gig eti t+ - s,, to. a R.. O 03 O' 4.12 0o Z w _E z INTERIOR FINISH EXTERIOR WALLS 40 5 C ti 15 I I hin Ipti hhhi gi I AT g l selutg ra PgIVIP ilk!! i Hifi J 11 �aa co C, z C to lai a IC U, z C z Fag ?Et %Eiei° E U � fir, i ill kg 1 � agegihE m Kd E8 e�+.1, NevSAM a i • S grc s 2 To • d ra tgl z.el t 1 tiQ'gg ing i i a. Aar'. i bee! 117 84 v 2 i °92 ft a 1 ?pi at 5I4I: il w i lag .," WI 5 gw6 3 2,,_ a. ilt 1 • i r 4 WALTER AK ASSOCIATES Real Estate Valuations & Analysis Addenda oe la PI tiaJ tit CALCULATOR METHOD 54 'Men G y� -43 ug tf fie ig tog m 4 Eit 811Est to Zn CO *Pi pep O §liar� Li Ct u a to -0! 19 I- 1 cis 0 V. Lit LIGHTING AND PLUMBING 63 a n ni A d' ch T" z aa trn; 5 H.rni§ t C, WALTER &r ASSOCIATES Real Estate Valuations & Analysis .5 a a' iu- EE rap Fram aim r`., p LU Nm ©+73 O,2 tE 2.40 btb t th - CC Addenda co co +�ir11� W u) UA US - 01 ed iX 8 Ili is I— w Eire Jo c4 U, 0 z St Oi m v r g to m c4 u fil r N: x I L TYPE INTERIOR FINISH LIGHTING AND PLUMBING HEAT I Good Good piaster, partitions, pnehiang, suspended acoustic, carpet, Good fluorescent ligntirtg, good title cr vinyl. g atne of showroomPa ge A.�C_ � space red-tr`+�et� and �Ft�tur'�. some til�c Low cost Lownnctall partilionsv paint suspended ceiling, vinyl cornmeal -on, Minimum lignang and plumbing, Electric wall rnlrtaa l t kttter and shelving extras , small tearoom heaters Gb ,,Thee r n" Metal structure aarid ooze over offces, stairs and railings Included in office IrtK tided in St tur+e office cost Avesaga: office mezzanine Included in structure Wood structure end deck over offices, stairs and railings Included` in cost office Excellent Good execubve sates. cafeteria, gland finishes, hales God fixtures, kitchen, sorne extras Average Average drywall or piaster, acoustic tile. vinyl composition or Adequa lighting and cm c afr she - a.r►tS _cunt emus restrooms and I 18 LL. ,$ ;c gepr too gtave a� 1 8 Y 0 C 41 513 dl s °. E es -a' 42. trJ pe W � Y ig i4§ 2 se C 20.1 Northern Colorado Regional Analysis The subject property is located and 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. The following pages contains the statistical analysis of the three areas, which includes; market data (industrial, retail, industrial & multi- family), demographics, etc. Data was gathered from numerous sources and is updated through the 2nd quarter of 2015 where possible. tit a I. J .71C SWIM I ' *Grand Lyclot w •i4.ksPalk i_ �' - — �•�. - II Act , I . ill L • • if � 4 Sprints f1 do g` IOWA -,e1X411— •� ! L1 !y -11;• Ili.�,8r�on ^' FRai1MI n jteditlir�a 1 T G VW al L ti P bd am A , • 1 F ' a f ` tic_ •�I X011 I 1 W II ♦ F1 ! I■ a a .� f P. �l. / �. / Ceti 'llLr Ta •.S 1 It'•� !. , 1TO " i • -E - ! -' c'_. 1 fJY,'`. ! 1 • •. f . x ! _ .-14- .Lr. a Y l.f,rt li ' Ga T i •� • 1+ • f ^ 1 .'(( I •ice^` �_. ` -• X twiturn f f v,i _>r■ • �� 1• r �Ifrotul'Is r�wai �,laq M s 6 r 11�' i trr !Viii. s.i rgls; ir ..; f , f tit en 'quite 1 ` ♦, 1 1 1 Al i•!1 f R II II ,.ryYY ■a Jj !. /� { ray } y{yy +� ,- i f 1 -, PII4/0iaf^' t 111 yfA.1 if ws 0 1 .. f • i j « n - • aO1 II f(. 1. i'J'�A - 4 l `.rt .s i 1i i et • + 4 . A' II ( 1 1,11 ) 11 II �y L . 1 y `+ .ra ' '1'YI�rF _1, • . Frlj c J '.. ayy di gis. r �AflaL,• 1 Ds'r'r Trr MN(El O°E) ikworm r j i at it It ram a. 0 6 12 18 24 30 Data Zoom 1-1 mi WALTER ASSOCIATES Addenda Real Estate Valuations & Analysis Location Northern Colorado is the area between Denver and Cheyenne bisected running north/south by Interstate 25. It is one of the fast growing regions within the State of Colorado. Fort Collins is nestled along the Cache La Poudre River at the foothills of the Rocky Mountains. Fort Collins is home to over 140,000 residents. More specifically, it is about 65 miles north of Denver, 50 miles south of Cheyenne, WY at 4,979 feet in elevation. Colorado State University is located within Fort Collins and is the city's largest employer as well as Colorado's second largest public university, enrolling about 30,000 total students, 25,600 on - campus and 22,000 undergrad students each academic year. Colorado State University is a land- grant institution and a Carnegie Research University (very high research activity). CSU was founded as the Colorado Agricultural College in 1870, six years before the Colorado Territory gained statehood. It was one of 68 land-grant colleges established under the Morrill Act of 1862. The doors opened to a freslunan class of 20 students in 1879. In 1935, the school became the Colorado State College of Agriculture and Mechanic is Arts, or Colorado A&1`' , and was renamed Colorado State University in 1957. Fort Collins began as a hub for agricultural production, namely sugar beet manufacturing. As its population has grown, especially into the latter half of the 20th and early part of the 2 Pt century, the city has shifted its focus from an agriculturt-based economy to a high-tech economy. Employment in Fort Collins has increased an average of 0.6% per year from 2001 to 2005, compared to an average annual increase of 0.0% throughout the United States. Even during the recession that struck throughout the United States from 2001 to 2003, employment growth in Fort Collins remained stronger than the rest of the country. Loveland is known for attracting artists and tourists to the region. In addition, Loveland has experienced major commercial growth at its I-2 /E Eisenhower intersection, Tourists travel through Loveland to reach Rocky Mountain National Park and Estes Park via Loveland's major highway, US 34 (Eisenhower Blvd). The 2014 population estimate was 72,651. The area has easy access to the central portions of the state including Denver and the Rocky Mountains. Greeley, with an estimated 2014 population of 98,596, is an agricultural and manufacturing hub, and the home of the University of Northern Colorado. Additional data regarding the population demographics and major employers for Loveland and Greeley are contained in the following pages. The remainder of the Regional Analysis will show various charts from various noted sources representing regional market data, market statistics, demographics, etc. WALTER & ASSOCIATES TES Addenda Real Estate Valuations & Analysis The following 6 pages is cell ent's 3rd `r. 2017 Market Report for the Retail, Industrial Office market sectors in the Fort Collins and Loveland (Northern Colorado) market areas. }� CELIGENT MAR KT TRiiN1m 30 2011 Niarthern *inI t I coriomic Overview According to the Bureau of Labor Statistics, the unemployment. rate decreased 0,8 percentage points from 2..99ii in July 2016 to 2.1% in July 2017. The unemployment rate decreased due to more people finding Jobs and compares favorably to the US rate of 4.6%. The Fort Collins statistical area nonfarm job creation was up 4,8% totaling 7,800 jobs over the past year. Retail using jobs (industries include trade, transportation and utilities) added 700 jobs from July 2016 to July 2017. Market Overview The Northern Colorado retail market recorded positive 244,054 square feet (sf) of absorption during 3Q 2017_ The total vacancy rate has increased 0.5% from &s4% in 302016 to 3.9% at the close of 3Q 2017. Direct vacancy rates decreased 0.3 percentage points from 3.2% to 2,9% during the same lime period_ Weighted average rent growth Increased during 30 2017 especially in Convenience/Strip centers in FtCollins-Mid Town, Old Town/North, Southeast Greeley/€wallas and North Loveland. Weighted average asking rents in all classes increased 3.01 per square foot (psf) recording $17.12 psf at the dose of 302017 compared to $14.11 psf at the close of 30 201.6. There is currently 396,200 if of construction in the region. Market HighIigJ i is Class A and Class S type centers continue to have very little or no inventory available. Older and less desirable centers that have been difficult to lease in the past continue to show lots of activity, especially with service' industry tenants. In -line shop space is extremely high in demand while big box activity is stagnant. Activity levels for "off -price" and softagoodds type concepts are very slow. High grade sit down type restaurants and fast -casual dining restaurants are very active. Small restaurant spaces with hoods are very difficult to find and the demand for this type of space is increasing. Rental rates continue to be at record highs and are expected to remain at these levels until more product is delivered to the market. Rents are predicted to remain high due to the high costs of construction, which are currently in 'the low to ,raid -$30 per square foot range as well as. the imposition of state-wide real estate tax increases. 30 2017 Market Trends di! 2017 bur Xeligent, Inc. All Rights tcsutrved Northern Colorado Employment Source BLS .14 n a 0 al Market Recap Inventory (sf) # of Bldgs Qtriy Abs (sf) Total Avail Rate Total Vacancy Rate U/C inventory (sf) Delivered Of) Weighted Average Asking Rate (NNN) N} pi IP li101 MOON 4 eN CI r C 40 a 73 fN 4 :71 {L�J tO Cl Absorption and Vacancy Rate Qtrly A& is II Total Vacancy Rate 200k C .2 a z et t_ OK a E- -1AUK 1O0K 3Q 2016 40. Z016 10 2017 ZQ 2O17 34 1017 p. rI +,7 6. rcl 4 036 3096 ock 20,477 264 1,088 244,054 5.4% 3-9% 396,200 U $17.12 41.04 3.0$t 2.04 0.05i BUILDING DATA. EVERYWHERE. WALTER & ASSOCIATES Real Estate Valuations & Analysis Addenda Direct Weighted Average Asking Rates (NNN) By Market arid Specific Use Market Name fC-M'dtwn FC-Old ront/No EC -South FIC Min/ Sew FC•wIlristri CSR-Eatonf Ault GR-NE Grtyrf Dwtn G1t'SE Griy,) Erns CR-West LVLtBerthoud L 'L-E41V l=25 LVL-Jhntwn/ itlkn LVL Horth VA -South OveraII Specific Use COnwiStrip Ctr Free/G en Nbrhd/Corm Ctr Reg/Power ccr Subtotal Com/3trip Ctr Free/Gen Nbrhd/Comm cr r Subtotal Cony/Strip Ctr free/Gen N brhd/Comm Ctr Reg/Power CU Subtotal cony/Strip Ctr Free/G en N brhd/Comm ttr Subtotal Free/Gen N brhd/Cpmm Ctr Subtotal Free/Gen Subtotal Comv/5trip ctr Free/G en Nbrhd/Comm icy Subtotal t1orw/Strip Ctr Free/Gen Nbrfid/Corrtm Ctr ReiPower Ctt Subto to l C rnistrip Ctr Free/Gen Nthrhd,iCamm Ctr Reg/Power Cr Subtotal Free/Gen N brhdfC.amrn Ctr Subtotal COnz/ttrip Ctr Frea/G en Nbrh&Gomm Ctr Reg/Power Gtr Suf total Cony/Strip Ctr FreefG 8f! Nbrbditcanirri Ctr Subtota I Cony/strip Ctr free/Gen NbrhdiCamm ctr Subtotal conw./Strip ctr Free/Gen NPaid/Comm cxr Subtota quarter Year 3Q 2016 4f,2016 1Q2017 2142017 3Q2017 $13.59 $24.02 $14.51 514.16 514.54 513.E - - $3+4.40 $31.82 $14 48 WAS $36 35 $13.1514 $13.42 $13.85 $14.19 $14.79 $14.95 $1.544 $22,25 $20.24 miss $28.39 $24.27 $17.60 520 51 $19 70 $17.12 $21130 $26 65 $26.65 $26.65 $31,!00 $23.04 $22.68 $23,13 $22.7'3 $2.1,81, $16.72 $28.65 $21.551 $21,57 $21.57 $27'.81 $30.75 $29.66 $23.94 $24.50 $17,15 $17.15 $15. $15500 $15.00 $13-tO 513.00 $1300 $11.00 $24.00 $21.50 $22.93 $24.19 $21.12 $2237 $12.25 $13.09 $12 09 512.45 $15.18 $12.00 - a 512.23 • a $13.49 $12.09 $12.45 $1•,5.18 S 4 a . • $9.67 $5,67 $12.33 $11.76 57.25 $9.58 514.550 $.18.30 $17.16 510.44 I. $14 50 $14.50 510.00 $31.00 $11.00 $11.00 $10.00 $11.00 $11,00 $3.1.00 $12.50 510.00 59.51 $10.50 $14.50 $12 57 $12 92 $12.77 $9.00 $8,.55 $8.568 58.00 $11.23 Slaw 510.10 $10.85 $15.51 $15,57 $15.57 $12.45 $5.4.110 $16.01 $15.12 $16.44 $17.16 $26.00 $2E 0 $24.01:! $16.501 $16.50 51650 - $16.32 $17.58 $17,54 $0+4.71 $14.50 $14.50 $1430 $14.50 $14.50 $1450 $1430 $1430 r a i . #3100 531.00 $3110 $31.00 - $31,00 z . $24.00 $17.00 512.00 $14.17 517.90 $10.00 - $13.12 $14.11, • $24.00 $5.3.76 $12.00 $1369 $2232 510.00 4 $14.35 $16.61 . a $31.00 $31100 $31.00 $22.00 $22.00 $25.54 515.00 $14.005 $13.03 51100 $11.00 $11.42 $11.69 $11,58 512.01 $21.79 $13.02 $21.7$ $32.00 $10.00 a - $#.2.00 $14,26 $23..12 $17.9 $17.32 $16.56 517.12 By Market $30 00 $25.04 520 km $1510 $3000 $3 00 L 'J u. L'P'L -U rthauzi Northern Colorado by Specific Use Irt Cow/Strip CO Reg/Power Ctr Free/Gen Nbrhd/corn m Ctt $24-00 $22.00 $20.,00 $10 00 $16 CO $14 00 $12.00 .30 201.6 Liu ors An J 44101+5 102017 20.2017 3Q2017 National by Specific Use Conu/Strip Ctr Free/Gen $14 00 $0.2017 Marlyn Trends ei 2.017 by Xeelict nta Inc I it Rights Reseed WALTER Sz ASSOCIATES Real Estate Valuations & Analysis $1.3.00 Addenda Reg/Power Ctr Nbrkt/Cornm Ctr 3Q 2616 44 2016 10 2017 20 2017 3Q 2017 BU5IL01MG DATA EVERYWHERE CELIGENT MARKET TRENDS 2017 J Wir meth CCoradt I Industrial S: . a. sa wSal •a a.=. am*•••• .........- Li_ (min, i r Overview According to the Bureau of Labor Statistics, the unemployment rate decreased 0.8 percentage points from 2.9% in July 2016 to 2.1% in July 2017. The unemployment rate decreased due to more people finding jobs and compares favorably to the US rate of 4.6% The Fort Collins statistical area nonfarm jot creation was up 4_8% tote iing 7,800 jobs over the past year. industrial using jobs (industries Include manufacturing and trade transportation and utilities) added 800 jobs during the past year. Market Overview The Northern Colorado industrial market recorded positive 79,900 square feet {sr) of absorption during 3Q 2017. Absorption was up considerably, from the negative .43)331 sf that was recorded during 3Q 2016. The total vacancy rate has decreased from 7.1% in 3O 2016 to 5.9% at the close of 3Q 2017, and direct vacancy ended the same way. Weighted average rent growth improved during 3Q 2017 especially in light industrial type properties in the Fort Collins North, Fort Collins South and Loveland South submarkets. Weighted average asking rents in all classes increased 4.6% recording $9.64 per square foot (psf) at the dose of 3Q 2017 compared to $ 9.22 psf during 3O, 2016. Ply a h:t.i J la{��rilnllf , Leasing activity) in the Northern Colorado region was at a slow to moderate pace primarily, due to the lack of inventory that is currently, on the market. Tenant looping for warehouse or distribution type buildings with dock -hi loading capabilities and high ceilings in the 10,000 sf to 40,000 sf size range have very few options to choose from, As a result, they are having to either build their own buildings, look outside of the area or renew their current leases, which is what many, tenants are doing. There were more lease renewals in 3Q 201.7 than there were new lease deals. Due to lack of viable product and high demand, rental rates are still at all-time highs and continue to increase in many of the subr,narkets throughout the area. Currently, there are very minimal amounts of speculative construction and most of what is being built is by owner -user type tenants since there is such a shortage of viable space. 3Q 2}17 M ark*: Trends € 7017 by XceGgent Inc All Riihts fiettrved. Northern Colorado Employment Sacra: ar..S [50 100 $0 0 Market Recap Inventory (sf} 4 of Bldgs Qrtly Abs {$i) Total Avail Rate Tot a l Va ca n cy Rate We Inventory (se Delivered i s#) Weighted Average Asking Rate (NNN) N) Absorption and Vacancy Rate Mt' 1Inrtrk xpi*"n 30DV, 100k tartly Abs, lafl Total V2 cartcy Rate 302016 4O, 2016 r-i C a 3 4.0% Qi 096 21,197,570 539 79,900 7.3% 5.9% 232,904 11,400 $9.64 Y 496 1Q2017 2Q2017 902017 BUILDING DATA. EVERYWHERE. WALTER. & ASSOCIATES Real Estate Valuations & Analysis Addenda CELIGENT MARKET TRENDS' '0 2017 " Northern Colorado I Industrial Direct Weighted Average Asking Rates (NNN) By Market and Specific Use Market Name Specific Use FC- r-15 Corr MG Flex Lt Ind Kik Whsa f Dist Subtotal PC -North Flex Lk Ind Mfg Whse/Dist Subtotal TC-South Piet Lt Ind Whse/Dist Subtotal IC -Windsor Flex Lt Ind Mfg Whiernist Subtotal Lurid Whse/Dist Subtotal G R -t ast Flak LI Ind Ol eg. WhselDist Subtotal MGR -writ Fix LI Ind Wise/Dist Subtotal tVL- I-25 Cori So Flax Lt Ind Mk Whse/Dist Subtotal LVL-East Lt Ind Whse/Dist Subtotal tyt-North Flex Lt Ind Mfg Subtotal LUL-South Flex Lt Ind +CR-e3 Corr No Mfg Whs�effli t Subtotal Overall Quarter Tar 3Q2016 4Q 2016 14,2017 242017 • $10_S0 - $16.00 $16.00 $16.00 516.00 $16.00 $10.80 $0.67 $Its Se ear $7.50 $8,95 $9.63 a a • - saG-so a $1$.40 511.72 ."x.74 VW) 59.31 Salem 56..25 5015 $9.41 • . a $9.00 $9.95 Sass $9.75 59.00 58.+15 58.45 $5.83 seas a -. $16.00 $11.79 S8.68 $13.40 $9.71 $13-98 $6S9 $8.95 $16.00 $11.33 $8.76 $8.00 $1024 $16.130 56.94 $9.50 $0 sin I. $9.00 $9.'79 - 6- - $r633 $t79 4 9 a s $9,23 $9.23 - $10.00 $10010 $10.00 T • • 342017 $10.5.0 $1.6.00 $12.01! $.13.55 $12.81# 59.14 $1.00 $10.'75 $12,67 Stec $9.50 $10488 By Market 00 $32.00 $10.00 Moo $6 D0 $4.00 5100 FC $-2S Corr No t u. 2 Northern Colorado by Specific Use nit* Li Ind Mfg $10.00 $9.00 *79 r SS OD $32.00 T a .. $10.00 510.00 $10.0 $0.30 $9138 $9.38 $s►.5t $91.39 $It -f2 $8.1.7 $7.131 5-1.3 58.3 I $6.50 $6.50 56.50 $6.50 $6.75 - - $5,85 $8.011 $8.97 $8.93 5'3.02 $9.02 Sil.g1 $9115 $6608 $9.23, $9.61 3Q 2017 Marker Treejds 8 2017 by Atli -gent Fnc. All Rights Reserved. $7.00 40.1016 1Q 1017 141017 3Q 2016 tk L? National by Specific Use $7.00 $6.00 $5D0 $4 DO ; Flax 30. 2016 let Ind Ml$ 0 ci d ■ Whse/Dist 3Q 2017 Whse/Dist mil,2018 tQ 2017 ≥420.17 BUILDING DATA 3Q 2017 . EVERYWHERE. WALTER ASSOCIATES Real Estate Valuations & Analysis Addenda Economic Overview According to the Bureau of Labor Statistics, the unemployment rate decreased 0.8 percentage points from 2.99t in July 2016 to 2.1% in July 2017_ The unemployment rate decreased due to more people finding jobs and compares favorably to the US, rate of 4.6%. The Fort Collins statistical area nonfarm job creation was up. 4S% totaling 2,,600 jobs over the past year. Office using jobs (information, professional and business services and financial activities) added 700 jobs during the past year. Market Oyu kiii., The Northern Colorado office market recorded 164,519 square feet (sf) of positive absorption during 3Q 2017 which is up substantially from the negative 35,939 sf in 20 2017. The total vacancy rate has increased slightly from 8.1% recorded in 3O 2016 to 8.3% at the close of 3Q 2017. Direct vacancy rates increased from 81% to 3.3% during the same time period. Weighted average rent growth continued to increase during 3Q 2017_ Weighted average asking rents in all class types increased from $19,22 per square foot (psi) in 30 20►16 compared to $20.76 psf at the close of 30 2017. Currently there is only 107,030 sf of construction in the region, Me,het I lig1 lielrl%. leasing activity throughout the region was active, especially with prospective tenants in the 1,200 - 3,000 square feet (sf) range, whereas activity, levels for prospective tenants that were looking for spaces 4,000 sf and larger was very slow. 75% of all lease deals that were signed in 3Q 2017 were below 2,5©0 sf in size. Agriurn occupied their new facility, which accounted for a maJority of the absorption in 30.2017. There is still a lack of viable space on the market which is a major contributor to the lower levels of leasing activity, especially, in Fort Collins_ Despite the slower activity levels, Landlords in the Fort Collins area are keeping their asking rents at high levels and are not offering favorable tenant concession packages to prospective tenants. In Loveland and Greeley, concessions are being offered and rental rates continue to show moderate decrease.sL Tenant improvement costs remain at ari-time highs and have increased 18%40% over the past year and a halt 3Q ID17 Poi arkez Trend; 63 2017 by X4tlicent Inc Ail Riot: Reserved Northern Colorado Employment Source: BLS 150 100 50 0 III11ohIi1III Illlliiirllr tfl :-i u4 0 CI 0 L �4 I LID PJ 1161 gc 4 Lon a 4 Q ax t 0 Jv era ar— Market Recap Inventory (sf) # of B ldgs Qrtiy Abs 4sf) Total Avail Rate Total Vacancy Rate t /C I nvento rye (sf) Delivered (sf) Weighted Average Asking Rate (PSG) Absorption and Vacancy Rate 15OK 10OK SOK Y-1 0. rC 2 Total Citrly Abs Yalta I Vacancy Rate 2 kut ►•R JO ri J 4,0 20% 0D% 11,596,475 547 164,519 9_5% 8.3% 107,030 3Q 2416 4Q 2015 1Q 2017 ≥Q 2017 3O, 2017 0 $20.76 10 OR 3 0511 0% u396 20% BUILDING DATA. EVERYWHERE. WALTER & ASSOCIATES Real Estate Valuations & Analysis Addenda "4- CELIGENT" MARKr TRLNL 302017 I Northern Colorado Office By Market and Class Market Name FC-East f1~-Mwttwts FC-Marto FC-So Coil Carr FC•5outhtact FC-west MGR -Central GR-13wtn GE -East Litt-Ewtni/ Sty G8. G8 --west LV L-ISerthoud LVL-Oowntowm LVL-E6St WI -North L'VL-So t -2,S ton M. -South Overall Clan 8 c Subtotal a B c Subtotal A B C Subtotal C Subtotal A 6 C Subtota I B C. subtotal A S ti Subtotal 0 c SL.Jnctal C subtotal e subtotal A 0 C subt4rtal 0 Subtotal A c Subtota A 6 Sub tota A B C Sabtota A 14 C Subtotal 8 C subtotal direct Weighted Average Asking Rates (FSG) By Market 3Q 2016 $19,76 522.11 $2033 $31..00 $22 .93 520,92 $24.22 52.E .i8 $24.90 523414 $21.0.2 a. $21,02 $20.29 $24.27 $24.+43 .$22,73 $16.94 $16.94 516.94 $16.09 $16,09 $18.05 $11.00 $14.06 $11.06 $1504 $14.33 $14.93 $4.4.89 $13.06 5i5_Si $14.71 514,42 51+#.6? $45,46 $45.60 $14.50 $1520 516.06$ $15.00 $14..64 $10.00 510.041 $10,043 $14.26 $15.05 $ $15.56 4Q2©15 $18.94 $19.30 $4.9.04 $ 31.00 $ 2+4.60 $19.06 $25.21 Quarter vear 1Q 2017 $20.54 $19.57 $2044 531.00 $24.54 $20.98 52.5.59 20,2017 921.14 517.13 &20.93 $31..40 $►24.29 520.62 525.53 $ 13.77 $22.50 $23.37 $ 21.02 $21.60 $21.62 $214611 $21,24 $21.02 $21.04 $20 90 522,54 $24,94 $1+1.64'11 $ 20.45 $23,05 $.2.'3.71 $16.94 $16,09 $24.95 $12.90 $23.51 $22.641 52261. $30.45 $25.10 $21.54 $26.74 s . $11.00 $11.00 $11.00 $11.00 511.,00 $11100 $11.00 $11.00 $16.'x' 516.77 a $19,49 $12.00 529.545 $30.06 526.50 $29a9 $25.40 $2+0.20 519.+39 $4204.4 r $16.27 $16,25 514.94 $1027 $16.2.5 $14.94 . a _ r $25.40 519.19 $19.51 51'9.5$ . 51922 $19.12 3Q 2011 M Ian fittn:+it € 2017 Xct lent. Inc Al RIEhii Rnstmetsl $32.35 $1730 $in.1.$ $2417 a $24,57 525.40 $19.19 520.29 $20,24 a $16.7.6 30,2017 $2031 $10 it Si 0.44 91.00 S24.2t 520.09 525.20 $19,95 $116.17 $10467 $z2.►60 $22.60 $3090 $21.32 $1i. $24.71 $11.99 • $11,99 $.18.08 $15.04 $12.79 $1541,5 516.00 S1.0.+0+ $23:36 a, a' $14 115 ale $14.t3 $18.40 $ia.00 $12,00 Sty site* a $2540 $1559 $1923 $19.02 f i i a a $25.40 515.26 $1',18 $1.7,+99 51.9.81 $20,70 2100 $21 00 618 00 $15 00 $32 00. $9 00 $600 $3 00 IC tia FC-So Col 1 Corr FC-5oL,#heast 7.; ti Northern Colorado by Class ■' A ■ a k C $30 00 $za 00 $26.G0 $24 00 $22.00 ;.24 00 $11:00 ca C en uy C Cx Kr National by Class A 0 N $26.00 5211 00 S22 00 1x1$.41} 516 00 8.1400 C rrt ci 414 4-4 r T lvI -Downtown r- 0 rr1 H Cs n4 m .c n z -a etift.DING DATA, EVERYWHERE. The following charts are provided by the Colorado Division of Housing. It represents Colorado Multifamily Housing Vacancy & a Rental Surveyor the 2nd Qtr. 2017. WALTER ASSOCIATES Real Estate Valuations & Analysis Addenda VACANCY RATES BY MARKET AREA {in Pertem) i4) 2i1 AIN t7i-1k Iii mil attir -Kraals cir - is k . 1 II i : 1 • M • Om 41.0 4 r 1l l w , 2 rimcgta, v t2' !id S . 3re tom'' 4111,124$ C U 'r.1 +■ . , tin Ilig )4•604, .ifh7 Il'r I rd O; icor] M f lea r.t t[r, ' w (51 i "11 !�`, ftherlaki 66 9 6.'S 4 11 2 d0 x'*r SS 32 e3 17 11 6 25 CIS 00 Cs phi 7+ Cents id 14dcrinliirtl: t ul:�1eti+'r>�1) C o 1City Cows Lake C;twrtty .. 107 5$ 70 F1 179 48 59 63 72 25 57 35 *2 15 14 00 T ■ • 7a 'u r ■ A' 11_1 ■ ■ •. , 4)0 L3 Ce ■ ■ ■ s ■ ■ 3 0 18 ■ p ■ r . r i 30 ■ , .. iSprwto t4urthrlerit hilxthee61 Far igelthe4A _Southeast shattfWileheld'Countatn Southwest Central 410 1f 43 63 65 60 60 61 es Sid 184 193 6 t S4 58 88 2 58 64 62 57 36 Se 56 R5 435 54 46 53 55 74 71 15 74 90 BO 116 162 150 ID9 167 33 49 5€ $4 _-4 62 7'r 44 50 61 71 Sr 54 64< to 51 4* 59 4:i' 37 43 54 511 54 57 44 5E: 55 40 41 5;[ 61 4e 422 9fi 89 55 70 13{I 105 D6 81S 101 73 8o 62 851 93 36 47 26, 58 59 101 5?I 82 Si +18 4 4 I *5 44 38 4t1 58 60 4? B6 47 66 Si 51 13; tiT 6T SIB' ?g X16 6U 62 45 'dI 61 3 73 a3 44 47 3 t 28 4$ 53 68 59 6 60 2 S7' fat I 43 38 42 3th 81 4 th BILE 84 63 60 4h 51 11 26 tiEF Sf3 +4,C 26 32' 60 32 50 e6 68 37 SI 3i 51 24 43 42 144 U 57 37 i# 45 48 38 37 35 44 49 2.5 42 40 30 43 78 41 IA 14 84 26 tSt 165 118 36 00 47 36 35 37 ii 30 ' S4 �1 Out; •r 39 I 43 47 39 16 23 43 12 16 1 It a7 Z7 .oj4 ICE.Yt.•f 4 II III 4 4 t a Ch 7 8- - - , FartGStnsetreetarg Cafit Willy**, t,Icxlheell Saluirat Southwest =' .• 26 41 28 4! 20 35 20 51 25 it 30 I b 4 63 2'3 3+t 40 64 22 30 53 90 477' 1,[ 23 45 18 art 3S 76 25 t 71 41 •2' 34 ,` 4] 35 21 2+i 26 35 21 26 07 06 04 {J i4 36 00 11 t1f 3if 60 2 ? 7;a +1. 21 1.4 61 62 28 21 56 66 20 14d; 03 38 05 00' 07 00 00 2!I 133 56 31 3t„' 4+t 74 4 3 21 2;. 12 t At 17 26 t3 i 2: 19 21 14 n20 18 14 22 2& GO 04 03 04i 00 12 00 38 20 11 34 32 i0 37 24 17 7 3 . m4 ZB 4 7 18 21 3F 33 D4 F2 i $ 17 00 1 3 4 t 36 2 2 34 34 26 2@ 24 22 20 07 14 00 18 24 21 34 23 7 41 1+6 2D 09 10� 62 42 01 02 13 34 00 00 16 U,U II 19 79 20 16 OP t Integgintroulti ik4 111 5 . fa, Ii4 t. 17 64 r' '-4ty' 3 4 5S 1 r ,n 1 r '1' i �+Z'' 1. 4 k. 5 t +' iii CA ilinda, chin 1' 75. 63 43 7? r0 _�. 104 5i 34 6 11 r' r 1 1511 11 24 i,1 16 2i 4 7 9:i 4 '6 4 1 '+ 14 1 63 ' II 1 S1 3' 4. _ 49 12 ;vr�■ w36 `5 37 UN t 6n 34__ .3a ¢r ; it 0 0.0 0' srctr�a.r ?j 5Q +0 43 188 86 _ PO 66 I —5i 4 0❑ OA 1? 22 16 06 14 27 77 14 t.5 26 21 2 31 as tl0 1? 414 23 20 30 21 T.4 do 43 155 161' o* 04 DO OD 51 52 lig 66 1{}4 24 109 flab: 149 111 93. 03 11 00 II 40 tae 142 103 DS too 47 84 71 N►nr;Iq ligsth► st Mdihm 4 SauRhree�si hwt: 110 IO. 85 Rt 1# 1 $20 1+4 3 a RF 77 g:1 51 66 90 7:I 00 40 17 III' 100 77 115 I0{I CD 26 51 3S 2!' 36 5' 51 57" 00 11 15 4O 40 80 B1 7'1 30 a7 24 76 8�6 77 7;i' 3�I 73 15 6T 7.8 110 ?.�4 79 7 1 0 t7 ? 1 0 0 63 70 72 07 Seur'tiszurtt+ 'Gana AO i I:.8 09 _1. 0_' t10 i I.0 16 , 134 17'. 151 0 6! 1D 5 1171 �wPr1.. 3 £ 6 5 t 11 1f is 3 Idh �4 3 4 PQ _ Sint* Caen 6 26 12 U 42 21 4.1 33 11 06 al 'As of O32012 Raau VeAti Canon C4v LakeCainly 8 Salidawe;e rtenbined ltwa he Cenw ,1 Mourdans ns lrfarlat Arta ,yA 1.7'ktiV ASSOC 141`ES Addenda Real Estate Valuations & Analysis AYERAGE RENT BY MARKET AREA, on NAPO WI! 4 -' Ni , I'4' t'l I ` 2011 Q t. ". A ' �. _ J i / i ■ Ill l _ It , Iy 1, 4• �. 7 a6. tt. IrriIrl _YI i WM NM I K.. rl' " ell.c J !� i ,i i . i et, • Irma MI Al 14406 ear otilMi aft 474.1 Gemini . WOW -fi+r' 4!!JEW; lig 4,,I 1 • ix walk, Jail A0140 Carelttl ikuliafry 6MCry Ylali Cnr�n Laha t`�t�trlY ;laat db69Ci650 c+Dtl eS1 1 J Or 06 •+ ,Haltt _Visfrit 412 bill • 411 IQ' • WO • ■ 77? le Darcy • tllflrollo 51prv111c 1w PbrPsnt Fit Mt�rtrinrl 5tturt.aaal e��+ ++►1 �leu4M•reat a!� ili a+1 7At a1I 12KC 6/735 413 as t4rU P6ni 743 51 43 hi '•_ 1'45 10 114630 -MI I41 fr.. 756 rc 866 24 r11,3 711 Stew 75511h 151 46 70i )1 Fi4.n,_MN) vaitz is2 I YI 440-011'41 604 32 I ?NM . 602 42 10392 r 213 SS. 411 51 11063 reit 03 175 ISI • • Ay 716511 0MNB p22 t+l 80.11,r Nil ill 411 t{!to 1,27 J!4 WI 461 04 116s as tai at 144175 7a?7f 1!5 DI 132 i1 inks All?.. lits03 AV In 0'61 S0 7W 72 *17 15 ew al veil 456 4d' 141 ei aid Al *56-5 rs44 Wm t3 Olt ti X144 MI6 84 1140332 104233i 112052 lir 05 92611 91461 1141 4e1 11;13 ICI 12134;I *Mut 102121i i 1.14 ,31t 01 I 611 k1 94231" 670111.1 Oaf dt' 7023:. 411 7'31 6 * lip 44241 44021 NowIaIG#t! er5 44e16x Lou 231% ironOD3 jag ica Mla o33 t!1 xr 4 fi° iXiZT X71 415 R 44191 4061 2tr ide S•I 1011411 711 IC 410 DA f14 -'f W.''t, 1159 NI 1659 041 1C44 7.11 Atilt GO II We .- 921 14. 702011;41 1091 16111611ltSi liNti IC,aln 047471D5! '. tat11 11Mt 1194211 IYl it02411h X.6(1 I01401N it Ili 2t _ -- -- .n4.1.1? _mil _ -w2 • _an LAOthrt1 11210 co CI IVCi11 at t�taS.blu flail r 7'tii i24S/1 1311 YE ton CONinNl.tmiiand ' port Coins Hor1 si mates* Seth hint tr.Citrl+1rm1 6,v,,.l nd list V1 want Iiri641 71331> 1412 all *Nei ¶CIS • 19731313 an 20 1143 22 11123'4 NO 15 iNiozi in* 5,,1 1001 61 IMO 34 9Th 11 li?4.41f 1012119 lam C 1144.4,1 4141.14+` 1020 aU G632Pd 11115401 1104 12' W4161 ett_4dill NV rt. iiaal it 110T MI MO 45, PH 72 loom 044 L4 161417{', 192I 371 10Q141' d101f 5:I 101 S1.4Y! 470 t31 tsk2 lrli 10'36 1,1 1037 34 11140? 74iSOI 102432 irbi 4t jam 696701: m i iii 1.}4 911 760 it' 1112176 106t pi Vats* 1043 17 IOU Si 12U 1 QZ t43 f0 111202 ID+! 44 I1ta.n. IratS fall Ka 41 15291' *ono ION t laalr(el 1244,*, 1 t$J I$ }algal 140? 011 71441 11 P P 411 i iris ?I , 8240 22 - 4464 cat oven, 115 Xi 13?8411 1112.41 motto 14731147 90% 201 iQ% 121 et₹ 13 72911 11431 It write 1CZ 1301 19 mast, 1222 51, 113 k 1206 ti iksit 11. ii, 1113 59 1175 all 101714 ?11!I'r 12+x5 1111 077 tat ,O.1 -4r inG,2g13'54411:11044 Inlet1247 ono 120911 •, 13761 _Jy1 b 2a S? 37 i?✓l" 3a its? at, 1677 3;1 1110 it 111141 ' 12141.1 ti 411.0as ar3 ma 127116 1210 45 11412 1327 To Ill ri UM 141 1510154 15514443t}Tib 41141469194!1Surf? 1249671314 134371x17111 2412373? 11 k4 F 12x1+ 1k711201 fd1i264 31 AO ow; 124325 + .. 644 $6 124591 4241* kg, 71 1316E' 1321 MA Ili 121? Xi '264 Ofti brizij ;ail Mac air' Iflig I1 I 461 a.t-i 1 4 • 'O. . er in . ltrn iP . 11 s g •r ? ei ±iP:Fi "C . • f t'1- -_ - .r. .f +' rI-. _y •.f. Yf: v'711'�l,f' ++1 64240 11 rift WW1. •iii .1 • Jed_ t 7.16.TQ 126.24, 711.110 !41#1. 4444'1 OW 412425 4Sbr1/ ta21d5i 06!07 Noit takaa 10411 c0.54 e{14t,L] i? Mit , I. : R, I KC sil 71 1 1 71!. - # . ,, Units AM 11U Me la All 41116. III 1!9 a at 545 stl,i Mt 74 _ nit 3, - . Y . • 1,40411rak kt Socifitasc Siacatomm I 6 ear El><rWI 5214N 564 TAUIlia Ir a'i fX. +67 fit471 + Qis 15SO + 4a lit air 1411' 411 Da 4Yd4 r1r AAA 141 11.44 MI .. itS. 441 aaa el I en so)64121 N. $4, 6917:1 42431 601 fit 291N 410 63 era 62 652 it WassIPai 4 ti dO! tar tee 47778 t{I574 #1t 1{t rta xI 621 rs 74 412214 aS 516 I 134 Bil all I 71 Me in a Isi 15194 71 ma 23 ilaid 621,03ieia 614 242. 441. IA, 694 111, 166 At 4.$ .. al TS* ita111443 53110444 ll' 5-500 , iti 1414 IA SY 1 lig1,41O#44kle* ',}111144 t7 C6164411 11524 5*.92. En .. ..• 1A.7-rr SI:Ea _ISO _514{4i 11133! tairKsliblifillt 41111F Mg If ?q 14 NM el ,- •rW lii% 1111414 �_ :� x;411 WC) trot.I 44.144 -444 2'1 1661 111 ir164.+i+t WI it lefia fed!t1$ 3qi — 104 d 01,1 ?4t a llama Yenta Ca►gr C./ LA car Pat! 4 Sok wet me tfli trtiw ,re Crrnrar 11.11W matte Miami Alilt i"ALF! EILt t' ASSIu:i t rs Real Esta to Valuations & Analysis Addenda The following 4 pages are a Demographic Profile 2014 of the overall Northern Colorado area. This study was published by The Group Inc. Real Estate. It shows several indicators of the overall Northern Colorado Region that include; demographics, labor force statistics, employment wages, average household income, average price cost, education, health care facilities, etc, Noithern Colorado LARIMER COUNTY Latimer and Old auntie Lorimer County and WWMCounty-die &oteo1cnorthern ccrr1raP(oktadocowing onDIM cif 6,645 45 square allies, Mere ate more Phan S$0,000 sop tiv1ap In Marta, iwi h fittametor aotosfMmcrCook tting35 guno(epland Memedian afftorWeld Cooly OP11oars old 1otn`rnrrfowi. rL3tarnirtlh kirptirmMtifott.andWeld(nkttMe.thlyd Wpm' try OM, labor force Labor Force Employed Unemployed Unemployment Rate Bureau Of take Stailstitr-h'cwmbrt )01J Colorado Latimer Weld 2,741,584 1$0,916 124,777 2,564,537 171,899 116,877 177,057 9,017 7,900 65% 5 ,.0% 63% population forecast Metropolitan Statistical Ara 4t≤M5al 2015 2020 2025 2030 iNorthstrn Front Rang* 610,$42 6894402 779,630 869,993 Fort Collins-LouaIand 3284236 360,613 394,236 u s n 6.6% Greeley 282,706 328,588 385,394 424,833 445,160 Skint- klitohyokiny td!atadpll,rislon of IVO! 6oivaA7nn, &m aOrophy ate, 1*wrmberJOl I A M tO .Srdr+sr rasa i iJ$ rr ant:1 ll, Mil mrfr 4u1 arm thorn utetkugyksoloo rants v *4iscr porrel"m.deadlythert1:&mu &flrfren;et uc arrrr'l'raap ifitsztt StAfirOmpri ofdn n s rnirts10154 l ,k or!: maiiiip 9a $Npc 4.glotio pral $nji ►N attprepte age distribution Median Age 0.17 18.64 65-90 Larlrner 364 6?+917 210/6578 43,842 climate Abundant sunshine and low humidity Averages temperature 54 dwgrees Annual precipitation 15,8" Average snowfall 300"at mountain resorts First snow in September Sniff na,{11.th7'iQ.twwil►zirtirc LSult "ALTER c'r ASSOCIATE'S Real Estate Valuations & Analysis Wald 33.9 74,302 171,103 30,672 property tax Lorimar Demographic Profile 2014 Lorimer Counityr col 'CT LS, On average, 0.62% or a property's estimated fair market value as properly tat The evecsge yearly 0 ropertyrtax paid by :aril& County residents amounts W approximately 2.4? .of their yearly Income. Wald Weld County collets, on average. 0.63% of a property`s, gdtrated fair market value as property mx. The average yearly proper tyr tax paid by We'd County residents amounts to approximately t . 1594► of 1 heir yearly Income. Stuart wice',rt t71es worrokial9 race and ethnicity White Mack of African American American Indian/Alaska Native Asian Some other race Native Hawaiian S Other Pacific Islander Hispanic or Latino (of any rare) .aurtt tact*adtrt femur W CM' us 8u,aw Lorimer 1% 2,1To 3,9'l 0.1 % 1 0,8% We l d 673% i.0% 0 6% 12% 14% 285% rite ►yAl Q� lilt Slt I111}ii,dud ld it !AO' N M' �+ iLLi+�{edlli�r{JII� Cd(�t�U1Ifl ma) eCd co CIVIC pails idImad bet filmic p44ply writ teJFIR'd Moor, limn °PIP FE CF dl r lit eel Jr" /N' a ■urrLog y major employers Lorimar Colorado State University University of Colorado Health (formerly Poudre Valley Health System) Banner Health: McKee Medical Censer Poudre School District Thompson School District Lorimer County Hewlett Packard Woodward Columbine Health Wail -Mart Distribution Center (includes Greeley) Center Pa rtners City of Fort Collins City of Loveland Hach Front Range Community College Otterbox New Belgium Weld ,CBS Swift and Company Danner Health: North Colorado Medical Center Weld County School District 6 Lin kversity ef Northern Colorado Weld County Government State Farm Insurance Companies City of Greeley Alms Community College *Me; 41rw►thirrr+lr,aancp+u, nlLaykt'rg rbJMit bul anon h'arrhtm tahuadp €flak A i rinpmmr Corpva ppo www.uFc4Ttf41QrphOng}*r1, tgonIyd (Qllrsr9tlttnlplGyeis him UperottCalm* ironc rOrreityme t aso SlatdItnrsa0l4 Addenda Employees 6,475 5,522 4,112 3,289 2,036 1,539 2,000 1,475 1,450 1,350 1,300 1,200 958 900 775 571 465 11,500 4,112 2,300 1,658 1,282 1,188 869 800 per capita income Nation $43,735 Iowa , limirketcfacitrttpot Department of(ommu , Colorado 345,775 personal income Colorado p $247,634416 Soum, troll, mw thr t1SOePotbnrrllal'Comm"' Lorimer 541,311 Lorimer $12,826,581 median income Colorado Latimer j'/.� S57,685,q pp !� 1, X57*715 Team ?a:ii Imillirr•-Fi,a!4 yy�1:Fnrit.ti 11,1 tdn.W; Soar Employment and wages Industry Agri€ulture, Forestry, Fishing, Hunting Mining Utilities Construction Manufacturing Wholesale Trade Retail Trade Transportation and Warehousing information Firanceand Insurance Real Estate, Rental and Leasing Professional and Technical Services Management of Companies and Enterprises Administrative and Waste Management Educational Services Health Care and Social Assistance Arts, Entertainment and Recreation Accommodation and Food Services Other Services Government Son: out atrikvIis alp; run r LiAr Cokirt ofrnp1,y i si onit litri rrxTivi 3,40047mr1017 Weld S31,6$7 Wald $$,347,637 Wald $55,825 £mploirees 946 387 714 7,857 11,469 3,435 17,197 2,601 2659 3,231 21355 9,027 652 8,712 15,092 77,676 2,833 16,821 3,675 24,148 residential building permits 2013 Single -Family Multifamily (units} Scott w'ww.lhtgturpdnc.{an The kw, int Rid Foote Fort Coffins 555 552 residential average price - 2013 Fort Colkna, Wellington, Tim nett% Loveland 5315,973 $262,494 Source. ►www.ilierriptrM.ran me{r m, kw,, iteal6hirr WALTER ASSOCIATES Real Estate Valuations & Analysis household I of ormatior Average number of persons per family Average number of persons per hr,u5ehold Total number of households Married couple households Households with children under 18 Households 65 or older "rr ftithrectfindtr1,crnawl( 111 retS l jib ilarlmer AverageWady Wages $27,120 544,064 $59,488 543,106 $73,944 $53,872 323,40`4 $35,048 S49,764 $48,828 $30,836 $68,328 $64,532 $27.508 527,456 $42,376 $15,704 514,924 $28,028 $41.080 Loveland 233 109 Greeley 155 275 Greeley, Evans Windsor 5183,375 $335,456 Addenda Ladner 2.94 2.42 120,295 50.1% 20.7% Weld 2 76 324 89,349 56.4, 39.0% I 9A% Weld Ernplayen Average Wages 3,663 $30,048 5,033 $63,600 33+5 $60,480 7,408 S4?,732 11,456 $38,160 3,529 $54,528 8,178 $26,016 3,126 $454264 918 $36,576 3,010 $45,456 1,012 $35,440 Z200 5464896 1,294 5101,664 4,731 $25,776 8000 $36,576 8,206 $38,304 1,038 $ 74.208 6,319 $13,344 1,896 526,544 )3,747 $34,372 Windsor 356 52 Ault, Eaton, .Johnstown,, $.er- R LaSalle, mead. Milliken $234.554 Atlanta, GA Baltimore, MD Roston, MA Chicago, IL Cleveland, OH Daiias, TX Denver, CO Houston, TX Miami, FL Minneapolis, MN New York, NY Philadelphia, PA Portland, QR Raleigh, NC Sari Diego. CA San Francisco, CA Seattle, WA Washington, DC inrrrct' wristfgAig is? Quoin ?0t2 education Pre -k through Grade 12 Lorimer District Poodle Thompson R2 -J Park R'3 Weld Weld County RE -1 Eaton RE -2 Keenesburg RE -31 Windsor RE -4 Johnstown-Miiiiken RE -.5J Greeley RE -6 Platte Valley R&7 Fort Lupton RE -8 Ault -Highland RE -9 8riggsdale RE -10 Prairie RE -11 Pawnee RE -12 Higher Educe tion Colorado State University 30,700 Fort Collins University of Northern Colorado 13,070 Greeley Front Range Community College 8.934 Fort Collins Alms Community College 6.000 Greeley. Fort [(Wort and Loveland 3rwrre Whim Colorado Minns, Report Enrollment 27,909 16,042 1,139 finance and incentives Northern Colorado Economic Development Corporation Upstate Colorado Economic Development 1.931 1,BO4 2,276 4,364 31300 19,840 1,102 2.300 846 157 174 75 Websitt www.psd.klico.us www.thortnpson k12 co us www.psdr3.k12,co.us www,weid-ae1.k12,co art wwww.eaton,k 12.co.us www re3j.com www weldre4 k12.co us www weldresj k12,co,us www.greeleyschools org www.piattevatley.k12 co us www,ftlupton .k12.co us www weldre9.k12 co us w ww, b rlgq sd a l esc h ool.org www.prairiescho J org www.pawneeschool<corn www,colostate.edu www,unco edu www,f rontrange ecru www,airns wiry www,nceck.com www..upstatecolorado org ACCRA cost of living index - Annual Average Data City Composite Grocery Housing Index Items 98.i 107.9 85,8 116.6 171,9 157 .6, 139.4 1)8.8 1653 116,9 107 6 138 1 10111 108,4 93.8 99,8 101 .9 75 0 104.0 968S 11448 92,9 84.0 91 9 110.3 llas 1214 108.4 106.6 114 1 2283 1477 451.9 124,5 1247 1405 1152 102,3 134.4 91.2 92 4 72.5 1327 1148 1426 1063 120.4 294 6 1159 111 2 135 8 144.6 113,2 248 4 health care University of Colorado Health (formerly Po+udre Valley Hearth System) Poudre Valley Hospital Located an fort Call it s. Pouchy Valley Hospital is a 241, bed regional medical center oflerincg a wide array of treatments, ssurgei les, and tllag'icnrk tests In more their, three dozen medical ipet ialties Medical Center of the Rockier~ i Located irr Loveland, f 4a�acal Center or tfte Rockies. the newest addition to the Poudre Valley )Health System is a 136. bed regional medical center oriel ing a{uN spectrum t of services. with specralvel in cardiac and trauma care. totatailithi Banner Health Molina Medical Center t ox aced i n Loveland, McKee Medical Center is a 132 -bed, acute -•c sire hospital that has iervverd the cornmonlly for more than 30 years., McKee pri*51tsefr on providing excellent patient cure, the latest an technidogicall advances and caring attention to patient. needs. North, Colorado Medical Center e for me d in Greeley, he hospital coreplei e,cl a major expansion in ?00.5. bringing the. minter of hospital beds to 398. i*I'orth Colorado serves as the primary full•ser-viee hospital for nCrthoin and eastern Colorado, southern Wyoming, western I*bra.s'kaand $ansas IkketOliwtheiltjuom Ernest Hrtarilh, Inc, Northern Colorado 'Rehabilitation Center - Located in Johnstown, Des.lgned solelyfor the provision of specialized rehabilitative care, this Pt the only freestantiing oCi le rehabilitation how t $ Ivin9 Nord tem Colorado. This hospital provides rehabilitative sexvices for patients with Function..?deficits issaresult of detsilrlal+,r►a ilinesset. or Irtjurins, rumeattayailtatreirom Estes Park Medical Center Estes Park Medical Center - A 25 -bed critical access acute care facility with a 24 -hour emergency department, 24 -hour ambulance service, emergency air transport, Inedicaliturgical services, obstetrics,, home health care, and hospice. t�r.lr�o8at�trn r+stun+aacr tronvilndr endtnllrvingowlret and airrstethrirrgcairn, arietilr Ostro Franu and r,,, µ.,ldr+drys? Utilities Transportation 96,1 102.7 142.4 1054 I0s,) 111,4 89,6 90.5 102,8 102,7' 127.9 129.3 103.2 104.9 1069 93.7 89.6 103 4 109.1 101.5 110.6 116.7 101 5 1089 90.8 94,8 112.8 105€ 131,0 105.6 120 5 101.6 111.7 1109 109.0 107.6 The (noveJ'nrt'eermv+r &1nbistiiuperrorat The,AXRAt©iraleft.y1?$rrreelviesft'catrvrptlrrhvelffo;fDf1FGJT1rfgoodhurrd!erwrjrhparrrr+pnPd }air rtre irirrrygr rev eltporrepahrpMoat both meirapo/erg>awdntwerzr.trerokg4r egi&t 100, Ondterhporrkrppnnrrdtrlsreedar aprfrevogeofthe es -colt to pinfe! WALTER Sc ASSOCIATES Real Estate Valuations & Analysis Addenda Health Care 99.4 100.3 127 (/ 4 1 , 04.3 103.8 108.2 10948 95.2 117.2 102.6 124,8 105,4 117,2 93 8 110.6 112',8 118.3 101.9 Misc. Goods and Services 101 8 94,0 1353 1 07A 99/ 113.1 105.7 97.4 101E 1073 1426 117.4 1053 966 105,5 1214 110,8 971 parks and recreation centers Larimer Fort Collins Recreation Department Loveland Recreation Department Larimer County Parks Estes-Poudre Ranger Distract Poudre Canyon Boyd Lake Mate Park Roosevelt National Park Red fie at he r Ranger District www fcgov corn wwwci iovelanel co us www co_iarfrner,co us wvvw ohranger.com www Leoloradoinfo corn ;Army parks state co us www.nps g0V vwww.fs fed.us Rocky Mountain National Park www.rockyrmountainnationaJpark,coat Estes Valley Rec. & Park District www estesvalleyrrecreat lon,corn Weld Greeley Parks and Recreation Department www greeleygav corn Windsor Parks and Recreation Department wwwwindsorgov corn JI MO (Purfi %MIMS 2iankrsroloprnepaieosrrrtaiArr•,8tu fnuiaYtr¢ eryciv of 49wAcqip mrnp ai nf2, mrrsorperkrrr'ana lialek p pw P;wdn Ant lord 'retitle )1 miff ()twee% Itinepc,a+J&n;rj l,Xi+rrrso" Vic? rount n Of•mkrr.9.10ll`.r, ate 1rfi4 PlatagekitAndiiii, t.Si'i e`, e, a`r 1r1S '"es IT..•..-i „ill rr,r. sports teams Colorado Eagles Hockey {ECRU Fort Collins Foxes Baseball {Summer colkglaia leagued Colorado Ice Indoor Football iuF) Colorado Rapids Soccer was] Colorado Force Soccer iusr.i transportation Air Denver international Airport (DIA) The Fort Collins -Loveland Municipal Airport f FNLI Greeley Weld County Airport Rail Amtrak Pr 1HE cor ior nose Etc. Jr Capirnohe to 21174 The Group Pit Aeol swore www coloradoeag les corn, www fo►tcollinsfoxes,corn www thecoloradcice.ccom wwwcolo►adorapids corn www forcesoccer.org www flydenver.com www fortloyealr.com Wow gxy.net www.amtrak corn golf courses Lorimer City Park Nine, Collindale Fort Collins Country Club Harmony Highland Meadows Mountain Vi s t a Greens Ptarmigan Country Club Southrldge Cattail Creek, Mariana Butte, The Ctlde Course at Loveland Estes Park Golf Course, Lake Estes Executive Weld Greeley Country Club Highland Hills, Boomerang Links Pelican Lakes Mad Russian www.fcgav corn www fcgalf.org www,harrncnyhornescolorado.cam wvww.highlandmeadows corn www mountainvistagreens corn www ptarrrnigancc .,corn www..goIfsouthrldgacorn www.ci ,Ioveland .co,us www.estesparkcvb corn www.greeleycc org www.greeleygov.com www.watervalleycom www.madrussiangolf.com performing arts and e% Latimer Lincoln Center Rialto Theater The Ranch -Budweiser Events Center Fort Collins Symphony Weld Greeley Philharmonic Orchestra Union Colony Civic Center Island Grove libraries Lorimer Poudre River Public Library Dist, Loveland Public Library EstesValleyr Library Weld High Plains Library District Clearview Library District museums leerlmer Fort Collins Museum of Discovery Fort Collins Museum of Art Loveland Museum Gallery Estes Park Museum Weld Greeley Freight Station Museum Centennial Village Museum Greeley History Museum Fort Vasquez MMtuseunn Plumb Farrn Learning Center Meeker Home Museum This Dernographirr Profile Was Prepared By The Group, Inc: Real Estate www.thegroupinccom vvyiw.fcgov,com www,ci.lovela n d .ca.0 s www.budweiserevuentscemer.€om www.,fcsymphony.org www.greeleyphilharrnonlc corn www.greeleygov.com www:greelepgauhorn www poudrelibraries org www.cidoveland,co,us www,estesvaileyllbraryDrg www mylibrary.us www,myrciearview,info www.fcrnlodorg www ftcma ,org www ci inveland CCU,* Wwwestesnet.cani www gfsrn,org www.greeleyrgov1ccm www greeleygov,com www.coloradohistory org www greeleygow.com www greele+ygov.com Co WALTER4,V • SSOCIATEu Real Estate Valuations & Analysis Addenda 1 PAGE OF DOCUMENT INCLUDED IN PAPER FILE. REMAINDER RETAINED ELECTRONICALLY IN TYLER. Walter & Associates Real Estate Valuation and Analysis An Appraisal of 1st Avenue Storage — Phase I A Proposed 469 -Unit Self -Storage Facility Located at 2824 1st Avenue Greeley, CO 80631 Prepared for: Farmers Bank 713 S Lemay Avenue Fort Collins, CO 80524 Date of Viewing: May 15, 2018 Report Date: June 28, 2018 Prepared by: Walter & Associates Greg A. Walter 537 Linden View Drive Fort Collins, CO 80524 EIN: 20-0518832 File #278 June 28, 2018 Farmers Bank 713 S Lemay Avenue Fort Collins, Colorado, 80524 Re: Real Estate Appraisal of a Proposed 469 -unit self -storage facility located at 2824 1st Avenue Greeley, Weld County, Colorado, 80631 File Name: 278 Dear Farmers Bank, In accordance with your request, I have viewed and appraised the above-gdescribed property for purpose of developing the "as is" mostly land with an existing covered RV parking structure of its leased fee interest, the "as complete" value as well as the "as complete and stabilized" its with p' ed market value of leased fee interest the value estimate applying as of the May 1 2018 viewing viewing date, the prospective June 1, 2019 completion date and the December 1, 2021 stabilized date. The subject site is further identified as Parcel Number 0961 1219001. The value opinion is intended ded to reflect the current expectations and perceptions of market participants along with available factual data. This valuation is for 100% -veal estate. This report is designed to be in an Appraisal e satisfies current Report Format and reporting standards of USPAP. The purpose of the appraisal is for estimating the market value for loan underwriting . ng and/or an investment decision by the Farmers Bank. The appraisal was conducted in conformance with the Uniform Standards of Professional Appraisal i+onal �pprai sal Practice (USPAP) developed by the Appraisal Standards Board of the Appraisal Foundation, Pp tion, the Code of Professional Ethics of the Appraisal Institute, FIRREA TitleXI, 12 CFI- Part CF.(RTC).323 (FDIC), and 1 � R Part 3 4 It is subject to the Assumptions and Conditions andw� Limiting Certification of Value, a part o t the report. The appraisal sal should not be relied on unless these conditions ons are accepted. The appraiser has not been influenced by any parties in their value conclusions and have no financial interest in the property. A Summary of Salient Facts is presented beginning on page 4. No responsibility has been assumed for matters legal in nature, nor has any opinion rendered p' on on title been and marketable title i s assumed. Liens and encumbrances, if an have been disregarded the property has any, and. P p been appraised as though free of indebtedness. It has been a pleasure working with you in the preparation of this appraisal assignment, Pp g ent, and I look forward to the opportu n i t or ` continuing to serve your appraisal s al needs in the near future. uture. Respectfully Submitted, Walter & Associates Greg Walter Colorado -C 100039718: December 31, 2019 537 Linden View Drive Fort Collins, Co 80524 Phone: (970) 556-1223 Table of Contents Table of Contents a s - a eaacacaa r. - r 3 j�� f� Salient Facts Mks :a..a55555iWTI aia.a• iteer444�rtie.r•rra4gg} Stinary u of Salient 1 acts :Iirii'4,* - _ .. ,..*.ri m ,y,r,r: litre ii ne••44}}ie•er•rre-rrrrrssrrrur:r.■: Certification Statement rFF54554ireirre •ean* rrrirr.*Mtn aqag i4•t•tir Limiting Conditions and Assumptions a ......n ,44 it ••••••••••••7 ScopeofWork - .er}......*irrii.s..u•a4 & if$i,iitrrr . . - - - .. - . .•+44f..iirrrsort ,9 Subject Neighborhood • erre or re■st*;4w...iiiir*UPSg44ffqirrreaaaaasr.T4se Sad•.rr 1 '" t•. 5iitii4is to i Site ri tion I'*a4itilrre 4rcpflieliermmaret - . 1 - rerssssmlq.•: - 24 111 1�7 Zoninge:Baereverrerreraerr,•Oerrs 4a.►es*,parrreerr4 iik, rbeirrierrfr I FloodMap r44 m .4 m rr f+;+3ii�!•+rrerrssssrri,rr 4 r 8 Parcel Map $- 5ei44rrarr wrr -4 a s i Fa• i ai f �.f a.Oi it. 444.... 4 i r44 Subject Site Photographs "As Is" aell N►.r44e•a•44..irGaaa.teesra,e a: 32 Subject Improvements 14.r at+.rrf4fsf4}}•b$orr•r FF5fgii- no, 35 Site Plansy},,rens 9t•F66i 38 Building Plans/Layouts Highest and Best Use -er.44eaeariaOff4f4}4i+ii••4-r� 39 I ee44.4 i446i:t•eii4i 4.5 Approaches to Value aw �20 {•}F 4 49 Cost Approach. 4if ill It 4044 42rober 51 Land Comparable Sales [e5 Discussion a�a1r !V R�Fi }+ � iv a F p f 4 5 _ _ .. • �r i i k i• 4 # ! F r r .. r .. a r a a a, F t � - t ,r.+ Market Value via Cost Approach Srrff4iite.wer tam, .....aai*now 4444tis r•rw 64 Sales Comparison Approach .........,...... arr4.4I4•4ir.i4*4rrr,nprrr5444414tr I 65 Market Research a •.4a 65 aa.. Comparables iraA4 4Ii•Peiiirse4RrWs■■4..ae4..iee4d,SOW r e ietea• 4re4i•a•rq4f G 65 Market Value via Sales Comparison Approach .4 i WOO #Frb4ai4asf444Fff5ieirs4..79 Income Approach 8 0 e4444444taartyi.;y.a,Fi444 444.•ffee.' - "As Complete &ta.hlll � ■aa rr 5iiiiii r 4,4 ibiiee4■ s. r.■ .... re isn't error "r04**t*'** - - 444+•trrrre492 "As Complete" Market Value via Income Approach e*raearar 5.®.i.45444ti.ersee...94 Market Value via Income Approach4.,„,r.. fffiii44a 97 Final Reconciliation a.44rent •.rrr4 - :4444•44 40••at:i • ,fi!i- •••• 98 Exposure Time and Marketing Time 4rs...a .44 Nu a as ii 0 r Y•+ Erf 4.r a statist -4a ra•rieaisWrt 100 Addendum Qualifications Engagement Letter Zoning Regulations Cost Construction Estimates Marshall & Swift Cost Sheets City and Regional Data WALTER 4: AS! OCIATES Real Estate Valuations & Analysis Table of Contents Page 3 Summary of Salient Facts GENERAL Identification of Subject: Owner: Legal Description: Parcel Number: Date of Value "As Is Land Only: "As Complete": "As Complete Stabilized": Date of Report: Intended Use: Intended User(s): Property Rights: Current Listing/Contract: Phase I - 2824 1st Avenue, Greeley, CO Weld County, Colorado, 80631 1st Avenue Partners LLC LOT 1, MILLER FARM MINOR 2ND PL .T, Per Weld County Assessor (Larger Parcel). Subject Phase I 4.893 Ac. will be re - platted from this parent tract. 096121219001 May 15, 2018 June 1, 2019 December 1, 2021 June 28, 2018 To establish the market value of the subject property for purposes of an evaluation for a loan request or making an investment decision. The intended users of this appraisal include Farmers Bank, and its parent, affiliates, subsidiaries and assigns. (The appraiser is not responsible for unauthorized use of this appraisal). 1 -covered RV -storage structure: 'As Is' — Leased Fee Interest Prospective 'As Complete & Stabilized'- Leased Fee Interest No known transfers or offerings on the market for the subject has occurred in the past 3 years. Please see the History Property Ownership Section on page 13 for further details. WALTER AK ASSOCI AT E is Real Estate Valuations & Analysis Summary of Salient Facts Page 4 PROPERTY Land Area: Building: Zoning: Highest and Best Use of the Site as Vacant: Highest and Best Use as Improved: Furniture, Fixtures Equipment Value: The subject - Phase I site area totals 4.893 Acre or 213,123 S.F., per provided survey on page 30. For purposes of t is report a hypothetical condition exists whereas the total site 12.359 Acres will he split into 2 separate parcels to accommodate Phase I & IL Please note, the site area totaling 4.893 Acres in the process of being split, re -platted and recorded with Weld county Assessor from its parent tract totaling 12.359 Acres. The subject property is a proposed (10) building 435 -unit self -storage facility that will include 10 -models of various sizes, and (1) existing 34 -unit covered canopy RV parking structure. Each building, is a I story design steel frame construction with concrete slab foundation and has an "as complete" total gross building area of 96,175 SF, per the provided plans and specifications from o neriarehiteet. (I-Mi - Industrial Medium Intensity District, with a Development Concept Master Plan Overlay Development with an industrial oriented use Highest and best use as improved is a self -storage type industrial facility -oriented use as currently proposed. Proposed improvements are subject to approval of the USR, which includes the self -storage facility building. None - real estate only VALUE&KAM ALSO EE FINAL RECONCILIATION SECTION Indicated Value by Each Applicable Approach: *See Final Reconciliation on Pages 98 & 99 of this report. Opinion of Marketing Time: Opinion of Exposure Time: 6 months or less 6 months or less WALTER & ASSOCIATES Summary of Salient Facts Real Estate Valuations & Analysis Page 5 Certification Statement I certify that to the best of our knowledge and belief: • The statements of fact contained in this report are true and correct. • The reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions and are our personal, impartial, and unbiased professional analyses, opinions, conclusions and recommendations. • No change of any item in this appraisal report shall be made by anyone other than those who signed this report, and we shall have no responsibility for any such unauthorized change. • I have no present or prospective interest in the property that is the subject of this report and have no personal interest with respect to the parties involved. * I have no bias with respect to the property that is the subject of this report or to the parties involved with this assignment. • My engagement in this assignment was not contingent upon developing or reporting predetermined results. • My compensation for completing this assignment is not contingent upon the development or reporting of a predetermined value or direction in value that favors the cause of the client, the amount of the value opinion, the attainment of a stipulated result, or the occurrence of a subsequent event directly related to the intended use of this appraisal. • My analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the Uniform Standards ofProfessional ssional Appraisal Practice (USPAP) and the Certification Standard of the Appraisal Institute. I have made a personal viewing of the vacant site of the property that is the subject of this report. I have also inspected the exterior of each of the comparables in this report. • No one provided significant real property appraisal assistance to the persons signing this certification. None of the appraisers or staff of Walter & Associates, the preparers of this report, has been sued by a regulatory agency or financial institution for fraud or negligence involving an appraisal report. • The use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representatives. • As of the date of this report, Greg Walter has completed the continuing education program of the Appraisal Institute. • Greg Walter has performed a previous appraisal involving the "Phase I" with excess land portion of subject property on March 7, 2018. Greg Walter Colorado -CG 100039718: December 31, 2019 WALTER & ASSOIATES Real Estate Valuations & Analysis Certification Statement Page & Limiting CConditions and Assumptions The appraiser will not be responsible for matters of legal nature that affect either the property � being appraised or the title to it, except for information that he or she became aware of durinthe research involved in performing this appraisal. The appraiser assumes that the title is ood and market able and will not render any opinions about the title, No responsibility is assumed for matters of a legal nature. Acceptance of and/or use of this report constitutes acceptance of the following limiting conditions ditiorls and assumptions; these can only be modified by written documents executed by both parties. p es. This appraisal is to be used only for the purpose stated. While distribution of this appraisal ` inits entirety is at the discretion of the client, individual sections shall not be distributed; this re port is intended to be used in whole and not in part. The distribution, if any, of the total valuation in this report between land and improvements p is applies only under the stated program of utilization. The separate allocations for land and buildings dins must not be used in conjunction with any other appraisal and are invalid if so used. Possession of this report, or a copy thereof, does not carry with it the right of publication. It may not be used for any purpose by any person other than theparty to whom it i s addressed without the written consent of the appraiser, and in any event only with proper written qualification p p' � cation and only in its entirety. All files, work papers and documents developed in connection with this assignment are the property of Walter & Associates. Information and opinions are verified where possible but cannot be guaranteed. Plans provided are intended to assist the client in visualizing theproperty; noother use of these plans is intended or permitted. No hidden or unapparent conditions of the property, subsoil or structure, which would make the property more or less valuable, were discovered by the appraiser(s) or made known to the appraiser(s). No responsibility is assumed for such conditions or engineering necessary to discover � them. Unless otherwise stated, this appraisal assumes there is no existence of hazardous materials materials or conditions, in any form, on or near the subject property. Unless otherwise state in this report, the existence of hazardous substances, including without thout limitation asbestos, polychlorinated biphenyl, petroleum leakage, or agricultural chemicals, � � which may or may not be present on the property, was not called to the attention of the appraiser nor did the appraiser become aware of such during the appraiser's inspection. The p'p" p appraiser has no knowledge of the existence of such materials on or in the ro ert unless otherwise P stated. The appraiser, however, is not qualified to test for such substances. The presence of such hazardous azardous substances may affect the value of the property. The value opinion developed is r p' p Pedicatedonthe assumption that no such hazardous substances exist on or in the ro ert or in such property proximity WALTER (V ASSOCIATES Real Estate Valuations & Analysis Limiting Conditions and Assumptions Page 7 thereto, which would cause a loss in value. No responsibility is assumed for any such hazardous substances, or for any expertise or knowledge required to discover them. The appraiser has examined the available flood maps that are provided by the Federal Emergency Management Agency (or other data sources) and has noted in the appraisal report whether any portion of the subject site is located in an identified Special Flood Hazard Area. Because the appraiser is not a surveyor, he or she makes no guarantees, express or implied, regarding this determination. Necessary licenses, permits, consents, legislative or administrative authority from any local, state or Federal goverment or private entity are assumed to be in place or reasonably obtainable. It is assumed there is no zoning violation, encroachment, easement or other restrictions which would affect the subject property, unless otherwise stated. The appraiser(s) are not required to give testimony in Court in connection with this appraisal. If the appraisers are subpoenaed pursuant to a court order, the client agrees to pay the appraiser(s) Walter & Associates regular per diem rate plus expenses. Appraisals are based on the data available at the time the assignment is completed. Amendments/modifications to appraisals based on new information made available after the appraisal was completed will be made, as soon as reasonably possible, for an additional fee. Americans with Disabilities Act (ADA) of 1990 A civil rights act passed by Congress guaranteeing individuals with disabilities equal opportunity in public accommodations, employment, transportation, government services, and telecommunications. Statutory deadlines become effective on various dates between 1990 and 1997. Walter & Associates has not made a determination regarding the subject's ADA compliance or non-compliance. Non-compliance could have a negative impact on value; however, this has not been considered or analyzed in this appraisal. The appraiser has provided a sketch in this appraisal report to show the approximate dimensions of the improvements. The sketch is included only to assist the reader in visualizing the property and understanding the appraiser's determination of its size. WALTER & ASSOCIATES Real Estate Valuations & Analysis Limiting Conditions and Assumptions Page 8 Scope of Work According to the Uniform Standards of Professional Appraisal Practice, it is the appraiser's responsibility to develop and report a scope of work that results in credible conclusions that are appropriate for the appraisal problem and intended user(s). Therefore, the appraiser must identify andconsider: • theclient and intended users; the intended use of the report; • the type and definition of value; • the effective date of value; • assignment conditions; • typical client expectations; and • typical appraisal work by peers for similar assignments The purpose of this appraisal is to form an opinion of Market Value for the subject as of May 15, 2018, the 'as is' date of viewing, the "As Complete" as of June 1, 2019 and "As Stabilized" as of December 1, 2021. Federal Register 34696, August 1990 as amended at 57 Federal Register 12202, April 1992 and Title 12 FR Part 34 define "Market Value" as: "the most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus." Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: • Buyer and seller are typically motivated; • Both parties are well informed or well advised, and acting in what they consider their own best interests; • A reasonable time is allowed for exposure in the open market; • Payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and • The price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale. W:%LTEfit. $r ASSOCIATES Real Estate Valuations&Analysis Scope of Work Page 9 SCOPE Or WORK Report Type: Purpose: Intended User: Intended Use: Date of Value "As Is Land Only": "As Complete" "As Complete & Stabilized" Date of deport: Viewing appraiser: Market Analysis: Highest and Best Use Analysis: This report is designed to be in an Appraisal Report Format. The purpose of this assignment is to develop an opinion of the 'As Is', 'As Complete' and 'As Stabilized' market value of the subject property. The intended user of this appraisal includes Farmers Bank. (The appraiser is not responsible for unauthorized use of this appraisal) To establish the market value of the subject property for purposes of an evaluation for a loan request or making an investment decision. May IS, 2018 June 1, 2019 December 1, 2021 June 28, 2018 Greg Walter A complete analysis of market conditions has been made. The appraiser maintains a comprehensive database for this market area and have reviewed the market for additional sales and listings relevant to this analysis. The subject's highest and best use, as though vacant and as improved were analyzed including: physically possible; legally permissible, financially feasible, and maximally productive uses. Highest and best use as vacant is an industrial oriented use. Highest and best use as is a self -storage type industrial facility -oriented use as currently proposed. Proposed improvements are subject to approval of the USR, which includes the self -storage facility. WALTER & .ASSOCINTES Real Estate Valuations & Analysis Scope of Work Page 10 Property Rights Appraised: Definition of Value: The subject is currently mostly vacant land with an existing (1) 34 -unit covered canopy RV parking structure as well as several outdoor parking spaces leased on a on short term basis, which will be appraised "As Is" on a Leased Fee basis, while the subject "As Complete & Stabilized" will be 100% tenant occupied with leases in place. Therefore, I have appraised the subject "As Complete" Market Value as a tenant occupied facility. Based on the scope of this assignment the subject's "As Complete & As Stabilized" Leased Fee interest is defined as follows: A Leasehold Interest' is defined as: "The right held by the Lessee to use and occupy real estate for a stated term and under conditions specified in the lease." The purpose of this appraisal is to estimate Market Value of the subject land "As Is" as of May 15, 2018, the date of viewing, the "As Complete" as of June 1, 2019 and "As Stabilized" as of December 1, 2021. I Appraisal Institute, The Dictionaryof Real Estate Appraisal., 6th Ed,, 2015, p. 128 WA LIEU ' : ASSOCI ATES Real Estate Valuations & Analysis Scope of Work Page 11 Market Value, as used in Market Value2, as used in this report, is defined as: this report, is defined as: Prospective Opinion of Value, used in this report, is defined as: "The most probable price, as of a specific date, in cash, or in terms equivalent to cash, or in other precisely revealed terms, for which the specific property rights should sell after reasonable exposure in a competitive market under all conditions requisite to a fair sale, with the buyer and seller each acting prudently, knowledgeably, and for self- interest, and assuming that neither is under undue duress." Prospective Opinion of Value3, as used in this report, is defined as: "A value opinion effective as of an effective date of a specUiedfuture date. The term does not define a type of value. Instead, it identifies a value opinion as being effective at some specific future date. An opinion of value as of a prospective date is frequently sought in connection with projects that are proposed, under construction, or under conversion to a new use, or those that not yet achieved sellout or a stabilized level of long -teen occupancy. 2 Appraisal Institute, The Dictionary of Real Estate ADDraisal, 6th Ed., 2015, p, 141 3 Appraisal Institute, The Dictionary of Real Estate Appraisals 6t Ed., 2015, p. 180 WALTER & ASSOCIATES Real Estate Valuations & Analysis Scope of Work Page t2 HypotheticalNOTE: For purposes of this report a hypothetical etical condition exists whereas Conditions: the total site 12.359 Acres arger/parernt,parcel) will be split into a 4.893 Acre -Phase I improved site. The remaining 7 469 Acres represents Phase II of overall development and will not be given consideration -within this report. Extraordinary Assumptions: NOTE: An extraordinary assumption exists due to the subject's valuation being based upon information received both verbally and in documentation from the developer (Wayne Frelund) and plans designed by RidgeTop Engineering and Consulting. The subject is currently mostly vacant land with (I) existing 34 -unit covered canopy RV parking structure on site. Implied is a el ve- onth preparation/construction time. The "as co l ete " value is estimated as of June 1, 2019, while the "as stabilized" is projected to stabilize in two and a half years or December .l, 2021. The subject's valuation is based upon information received both verbally and in documentation form from the owner. Per the City of Greeley, the project has an approved S. (Use by Special Review), subject to approval of drawings. The estimate of Prospective Market Value "At Completion of onstrction " of Phase I is specifically condition on the Extraordinary Assumption that the project as described herein receives final approval from the City of Greeley, specifically referencing that the project can be built so long as it does not exceed quantities as specified in the USR. Developer Wayne Frelund has confirmed described proposed improvements as noted throughout this report Elements provided are expected to be completed per plans and specification in a timely, satisfactory and workmanlike manner. In the event the provided information in regard to workmanship is below industry standards or as reported by owner, it may have an a fe ct or impact on value. HESIDRY PROPERTY OWN Weld County property records indicate the subject property is currently owned by 1st Avenue Partners LL. There have been no known changes of title or activity involving the subject property over the past three years; however, no guarantees of title are stated or implied. WALTER & ASSOCIATES Real Estate Valuations & Analysis Scope of Work Page 13 Valuation Analyses Cost Approach: A cost approach was considered and developed due to typical market participants relying on cost with a proposed facility as the subject type of property. Sales Comparison Approach: A sales approach wasconsidered and developed because there was adequate data to develop a value opinion and this approach reflects market behavior for this property type. Income Approach: An income approach was developed due to self -storage facilities typically being income producing and there was adequate data to develop a value opinion with this approach. Approaches Used: Cost, Sales and Income Approaches REPORTING DATA Market research for this appraisal was gathered from numerous sources, including, but not limited to the following: Public Records of Weld County, Property Assessors of Weld County, the Planning and Zoning Departments of the City of Greeley, Xceligent, Loopnet commercial property data services, CoStar and interviews with parties to the transactions. My primary emphasis in the data research process centered on the immediate, surrounding and regional area in which the project is located. Adequate sales and rental data were located within the subj ect' s market area of Greeley, Loveland, Fort Collins, Windsor and Denver Metro. Direct and indirect forms of verification were performed in the valuation assignment. I personally viewed each vacant land and improved sale as well as rent comparable used within this report then made a determination of comparability based on factors including, but not limited to, location, age, condition, size and market conditions. The comparable data applicable to the valuation of the subject were viewed and photographed. The appraiser's viewing is not a detailed inspection such as would be performed by a licensed and/or certified home inspector or surveyor. The client and/or buyer should not rely on the appraiser's viewing as a warranty or guarantee, implied or otherwise, regarding any system or component of the real property. No external obsolescence was noted. No functional obsolescence was noted. WALTER & ASSOCIATES Real Estate Valuations & Analysis Regional Data Page 14 Northern Colorado Regional Data The subject property is located in Weld County, within the City of Greeley. A brief overview of the Northern Colorado Regional Data is to follow. In addition, regional and local economies, the City and Regional Data detailing the market conditions in terms of population, employment, and other pertinent market data hasbeen included in Addendum of this report. The region's economy and real estate market are summarized as follows: • The population has steadily increased over the last 10 years and is projected to continue largely as the result of thenumerous accolades the region has received in national publications such as Sperl i n g's Best Places, Forbes rating as #10 in the country for business and careers and Business Week Magazine. • Unemployment for the region has historically been and continues to be lower than the state and national averages, even with the recent national economic downturn. • Income in the region has seen a steady increase for the middle income bracket of $50,000-$100,000 ($76,341 median) over the last 5 years. The upper income bracket of 100,000+ and the lower income bracket of $0-50,000 have experienced minor increases and decreases over the last 5 years, • The retail market in the Northern Colorado region is currently experiencing strong demand for quality space paired with tight supply. Rental rates continue to trend upward as available sup ply dwindles. The overall vacancy rate has decreased from 0,3% to 3.2 in 3" Qtr. 20 t 6 to 2,9% in 3rd Qtr. 2017, per Xceligent 3fl Qtr-, 2017 survey. Weighted average Northern Colorado asking rents in all retail class types increased $3.01 psf recording $17.12 psf at the close of 3" Qtr. 2017 compared to $14.11 psf at the close of 3rd Qtr. 2016. • The office market in the region is currently experiencing signs of stabilization in terms of slightl y higher vacancy, however rents continue to rise in the overall office market. The overall vacancy rate has increased from 0.2% to 8.1% in 3rd Qtr. 2016 to 8.3% in 3 r4 Qtr. 2017, per ccl ig ent 3, r" Qtr. 2017 survey. Weighted average Northern Colorado asking rents in all office class types increased $1.54 psf recording $20.76 psf at the close of " Qtr. 2017 compared to $19.22 psf the close of 3r'a Qtr. 2016... Absorption is expected to be positive for the best located and maintained properties. • The industrial market continues to be extremely tight in the Northern Colorado market, particularly Larimer and Larimer Counties. The overall vacancy rate has decreased from 7.1% in 3rd Qtr. 2016 to 5.9% in 3Td Qtr. 2017, per Xceligent 3rd Qtr. 2017 survey we i ted average. Northern Colorado asking rents in all classes increased 4.6% recording $9,64 psf at the close of 3r" Qtr. 2017 compared to $9.22 psf during 3" Qtr. 2016. The apartment market is very strong in the Northern Colorado market due to job growth and demand that continues to outpace new construction, Fort Collins and Loveland vacancy rates are at 3.1%, while Fort Collins's vacancy rate is 3.0%. Rental rates continue to climb with Fort Collins/Loveland average rent at $1,315.28 and Fort Collins's submarket average rent at $1,301.27 per month. This market data was derived from the 4th Qtr. 2017 Colorado Multi - Family Housing Vacancy Survey. • Residential development iscurrently boom ing in Northern Colorado due to increased population, low unemployment and low interest rates. The average sale price of a single-family home in the City of Fort Collins in 4th Qtr. 2017 is $366,500, up 7.57% from 2016 at $340,700, up 4.83% from $325,000 in 01 up 1 � , 6�6'��a from � � 14 and up � , ��,� from � � 13, per Colorado Property.com Ires. The continued population growth is driving the high demand for housing and supply is low, which continues to drive prices higher decreasing affordability. L4TER & ASSOCIATES Real Estate Valuations & Analysis Regional Data Page 15 Regional Map (Northern Colorado) ■ T i ▪ a. 6,,341j ' ft }gr,.i�ri 7�r.� _ ll dY e I 'li"' :•:71,41/40a\ 4 - .t • w I Iy -_r '-_—r j- 4 47 I r f_ l'C ? P /l y }11 '•I . I (4 on 4.► r �3F "a nStitlir 4 I 5 i ruilr l J� r ICI ■ J!V - !1 1 J 1 di F. ri 44 111 44 II a � r .. ■ , t C W ~t t' C a- 4314 a ' c I_ C i le c rt `� + r. Y • Y .tea d " . - m r�■ ■ it w i�• °y �� P •f •,I'' �Yir- - ,' - rr f i �, Sao • 1 p C I ; ltd. --asra r + s t "�Y''�'�>�,.:. ardi 7, . • la ▪ 0 +•■mss. ..n I -• �P � �. ▪ ° 4 14 iI je . .- . - I .. •. TY 41 y y .I Regional Data Subject Neighborhood A neighborhood can be defined as a homogeneous 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. The subject is in the City of Greeley, Weld County, Colorado. General Description: The subject area includes eastern portions of the City of Greeley as well as the western fringe of Unincorporated Weld County. Commercial uses along U. S. Highway 34 business route (10th Street) are primarily office and retail toward the west side of Greeley and retail in the central and east parts of the subject area. Industrial uses are mostly located along U. S. Highway 85 (By-pass), which runs north/south along the eastern corridor ofthe City of Greeley. The subject neighborhood area is mostly a mix of industrial/commercial uses and also includes pockets of vacant agriculture land. Location/Boundaries The subject property is located in the eastern corridor of the City Limits of Greeley adjacent to the southeast of the U. S. Highway 85 (By-pass) & Highway 34 (By-pass) interchange. The subject neighborhood is bounded. by: Weld County or Balsam Ave. to the east, Weld County Road 54 to the south, E 8th Street to the north and 59th Ave. to the west. Access Access to the subject neighborhood is via (UIS. Hey 34), which continues east/west on the southern fringe of the City of Greeley. Hwy 34 By -Pass connects with US Hwy 85 By -Pass within 0.15 mile to the northwest, and to Interstate 25 about fifteen miles to the west. Topography Topography of the neighborhood is generally level. There are no known adverse soil or subsoil conditions, or environmental hazards that would affect construction on the site, Utilities All public utilities are available to properties in the subject area through the city or public utility companies. This includes: electric power, natural gas, domestic water and fire hydrants, sanitary sewer, and telephone service. Zoning Portions of the neighborhood are generally zoned "RMH", Residential Medium Density sporadically to the east and north of subject along the east side of Highway 85. In addition, zoning districts primarily consists of "IM" -Industrial Medium Intensity and `J -r" -Industrial Low Intensity running north and south along US Hwy, 85. WALTER r ASSOCIATES Real Estate Valuations & Analysis Neighborhood Page 17 Employment Due to its location, the City of Greeley benefits from all employers in the tri -city region. Major employers in the area include: IBS USA & Affiliates, Banner Health: Northern Colorado Medical Center, Greeley/Evans School District 6, State Farm Insurance Companies, TeleTech, Select Energy Services and University of Northern Colorado. Leprino Foods has opened a $270 million cheese factory in Greeley, Colorado. The plant has created 500 new jobs for the Weld County labor force and bring a much -needed boost to the local dairy farmers. The factory is projected to generate $15 million over 20 years in wages and in direct and indirect spending. To supply the milk for the cheese production, the dairy farmers in the area are expected to bring in 80,000 additional cows to their herds which may double the current milk production. MS employs over 3,000 in its Greeley beef production plant while serving its customers around the United States and exporting 30% overseas. Banner Health: Northern Colorado Medical Center employs over 3,000 while they strive in providing the latest health care facilities and technology to Weld County. A few services provided at this location include: behavioral and mental health, family medicine, maternity and rehabilitation. Weld County has a 2.6% unemployment rate as of 1 st Qtr. 2017. Trends and. Development In 2016 Greeley was named the fourth fastest -growing metropolitan statistical area in the United States. Oil and gas rich areas in Wyoming, North Dakota, Utah and Texas have all seen a drop in their population while Weld County grew by over 9,000 during a 12 -month period. The number of oil and gas jobs increased from 51 last year to 166 this year. Weld County now has a strong mix of agricultural, oil and gas, manufacturing and health -related industries, which remained strong even with an oil and gas downturn in the last two years according to a March 24th, 2017 article in the Greeley Tribune. Commercial and retail uses in the western portion of the subject neighborhood include Greeley Commons that consist of 138,818 square feet retail development on the southwest corner of 47th Avenue and U.S. Highway 34 and CenterPlace that consist of 119,090 square feet of retail on the northeast corner of 47th Avenue and U.S. Highway 34. North of CenterPlace is the mixed -use master planned Fox Run development. The Village at Fox Run includes approximately eleven various sized retail pads; some sold and some for sale. Additional new development along U.S. 34 (business loop) includes the Northgate Village located at the southeast corner of 10th Street and 71st Avenue. This center is approximately 140,000 square feet and includes King Soopers, 19,000 square feet of shopping space, and five pad sites for sale or lease. WALTER TE t AS JJI _.I,r-7lTE Real Estate Valuations & Analysis Neighborhood Page 18 Larger commercial uses on the west side of Greeley include the 590 -acre Promontory office development at the northeast corner of U.S. Highway 34 and Highway 257. This corporate office park emerged in 1999 with. State Farm constructing regional corporate offices in the park. In 2000, ConAgra (now MS USA & Affiliates) relocated its headquarters to Promontory, while State Farm Insurance also has its regional headquarters in Greeley. U.S. Highway 34 Bypass Corridor includes several shopping centers. The area has a wide range of retail uses including big box retail, strip centers, restaurants, and auto dealerships. The Greeley planning department includes U. S. Highway 34 corridor between Greeley and Interstate 25 as the focal point for future economic development in Greeley. The City developed a 2020 Comprehensive Plan specifically indicating the I.J. S. Highway 34 corridor as a top priority for future growth. The intention is to encourage moderate to large employers in clean industries that demand high -quality facilities that generally have low water needs. Residential development is planned on the perimeter of the employment area. The Plan views this area as the "gateway" to Greeley. Surrounding Population Northern Colorado communities referenced below include Greeley, Fort Collins, Loveland and Windsor. The following charts provides an analysis of population trends from 2010 to 2015 within the major metro areas of Northern Colorado. Northern Colorado Population 180,000 160,000 140,000 120,000 100,000 80,000 60,000 40,000 20,000 0 2000 2005 2010 2013 2014 2015 Greeley 78,385 86,679 93,203 95,411 98,596 100,883 Windsor 10,360 14,316 18,763 20,427 21,10E 21,751 Loveland 51,881 60,067 66,997 71,334 72,651 75,182 Fort Collins 120,062 129,497 144,505 152,061 156,480 161,175 Greeley Windsor iLoveland msw—Fort Collins \V ALTER &ASSOC! A TES Real Estate Valuations & Analysis Neighborhood Page 19 160 000 140,000 120,400 100 001 BQ, 000 60,000 40,000 20.000 Fort Collins, CO Greeley, CO Loveland. CO Windsor, CO a 1990 1991 1992 1993 1994 1995 1996 1t97 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2010 2014 1991 1992 1993 199$ 1995 1996 1997 1908 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2309 2010 2011 2012 2013 Data horn U S Census Bureau Last updated: Oct 'f1, 2016 02014 Goog - Help - Terms of Service - Privacy - Uisdakmer - Discuss University of Northern Colorado The University of Northern Colorado (UNC) is a coeducational public University located in Central Greeley. The University has a strong background in nursing and teacher education and offers several undergraduate programs in the arts, sciences, humanities, business, human sciences, education and nearly 50 graduate programs; primarily in education. Undergraduate degrees are typically 4 -year programs and degree programs have a strong emphasis in liberal arts education. According to a Wikipedia account, "The University of Northern Colorado is the third largest university in Colorado". According to QC's web page the student enrollment over the last few years is as follows: I 4� I Year y �I �,��rY'�r`L��`Y (9pnnng) 1 �a}� ��.��,�1•I� g I Colorado Enrollment �Y�%��1 - Total: Student % Change Enrolment r f` 2014 11461 N/A 11,290 -1.49% 2015 2016 11,402 0.99% 2017 12,260 7.52% According to the table above student enrollment continues to grow creating demand for off -campus housing. r\%'A 1.TEl( & ASSOCIATES Real Estate Valuations & Analysis Neighborhood Page 20 Neighborhood Summary In summary, the subject neighborhood contains convenient access to all parts of the city as well as easy access to the University of Northern Colorado, just one -mile northwest of the subject. US Highway 85 is within 0.15 -mile northwest of the subject connects to the Highway 34 Bypass to the south providing easy access to the west corridor of Greeley. The subject immediate neighborhood is in the revitalization phase of its life cycle with older buildings being remodeled with a consistent use. In addition, Greeley's CBD is located within 2.5 miles northwest of the subject. There should be good demand for self -storage facilities as well as remaining undeveloped land within the neighborhood. In addition, the neighborhood's proximity to the larger communities of Loveland, Windsor, and Fort Collins provides a stable employment base and ample amenities. WALTER & ASSOC] A` E'S Real Estate Valuations & Analysis Neighborhood Page 21 Neighborhood Map +H SJ 04, w` O w n:DLLORML 71IN' ST Mil ST , 1 T ray r it 271-11514,07 Fri 241H 'ST tt . �rrrrtt�� nn 30TH .ST 1' Ja Goan F LO ° A Mee. 21: Tu ST ei 421 dearkelerir 1"1!•. "41*'`4 ar 28241st MS. (Subject) A. a w d a I 4 in ,JP I J: 41ST ST I Data use subject to license. Delurme. DeLomr ie Street Atlas U SAS 2015, 'w.dekannacorn South Platt Pflat 46 E 30Th ST P MN (7.6° E) A 2 L Si SI E25THS1 Ca • C rn P CP rrt ui 4: Cr 2 QC 0 .706 32 a Igo y --"Elan: ft 0 600 1200 1600 2400 3004) Data Zoom 13-.3 WALTER & ASSOCIATES Real Estate Valuations & Analysis Neighborhood Page 22 Subject Neighborhood Photogrjphs Viewing south at Riverview ervie Farm subdivision, which is located adjacent to the east of subject. Viewing west at BMA Industries, which is located across street to the west of subject. Viewing east at the future site of Power Equipment Company, which is located adjacent to south of subject. WALTER T ASSOCIATES TE6S, Real Estate Valuations & Analysis Neighborhood Page 23 Site Description The following description is based on my property viewing, assessment records, Weld County maps, and information provided by the managing company. Location: Site Size: Land Use Restrictions: Shape: Frontage: Access: Visibility: Topography: Soil Conditions: The subject site is located at the southeast corner of 1st Avenue and E 28th Street, or more specifically at 2824 1st Avenue, Greeley, CO. The subject sites larger parcel total area is 538,367 . F. or 12.359 acres, per assessor records. For purposes of this report a hypothetical condition exists whereas the total site 12359 Acres will be spilt into a 4893 Acre tract (Phase .), with the remaining 7 469 Acres — (Phase 1f) . Phase 11 is not given any consideration within this report Although no authoritative report of title was provided or reviewed for this analysis, there does not appear to be any unusual encroachments or restrictions that would adversely affect the utilization of the site. The site is mostly rectangular in shape. A site survey showing dimensions was available to appraiser and can be viewed on page 31 of this report. The survey indicates no direct frontage from E 28th Street or 1st Avenue. The survey detailing the subject site shows 659.83' on its southern boundary and 488.30' along its western boundary. The site will be accessed via a 40' access easement from E 28th St., and a 30' access easement along the east side of 1 st Avenue, per survey. Subject site has good visibility from 1St Avenue and B 28th Street. The site is mostly level and at grade with neighborhood properties. No soil report of the subject property has been made available or reviewed; however, it is assumed and appears that the soil is of satisfactory load -bearing capacity to support the structure. No evidence to the contrary was observed upon our physical viewing of the property. Drainage of the site appears to be adequate. WALTER E'' ASSOCIATES Real Estate Valuations & Analysis Neighborhood Page 24 Utilities: Environmental Issues: Encumbrance Easements: Site Improvements Parking: Surrounding Uses: Zoning: All utilities are on the site and assumed adequate, I was not provided a Phase II environmental report nor qualified to detect the presence of environmental hazards. My value opinion assumes there are not any environmental hazards on or about the site that would result in a diminution in value. I did not observe any obvious signs of environmental hazards during our viewing of the property (See Assumptions and Limiting Conditions). I was 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 the value due to land use restrictions. (See Assumptions and Limiting Conditions). Note, The site will be accessed via a 40' access easement from. E 28th t., and. a 30' access easement along the east side of 1 st Avenue, per provided. survey. Owner did not specify detailed landscaping. Proposed landscaping is assumed to meet City of Greeley code requirements. Parking: Proposed parking is assumed to meet City of Greeley code requirements. The immediate surrounding uses of the subject include a mix of mostly residential properties to the east and industrial uses to the north, south and west. Light industrial uses exist within the immediate area of the subj eet. Zoning for the subject site is classified by the City of Greeley as (I -M) - Industrial Medium Intensity District, with a Development Concept Master Plan Overlay. The purpose of TaM District is to provide for the development and protection of industrial uses along with commercial support uses. Such uses may be found along arterial streets and highways and rail corridors. The proposed use of the subject property appears to be a conforming use based on our review of public information. A portion of the Industrial Medium Intensity District Zoning Regulations can be found in the Addenda of this report. I am not an expert in the interpretation of complex zoning ordinances, but the proposed use of the subject property as a self -storage facility appears to be conforming to the zoning and the surrounding neighborhood. WALTER & ASSOCIATES Real Estate Valuations & Analysis Site Description Page 25 Deed Restriction Disclaimer: Environmental Disclaimer: The appraiser knows of no deed restrictions, private or public, that further limit the subject property's use. The appraiser cannot guarantee that no such, restrictions exist. Deed restrictions are a legal matter and only a title examination by an attorney or Title Company can usually uncover such restrictive covenants. Thus, it is recommended that a title search is conducted to determine if any such restrictions do exist. Unless otherwise stated within this report, the existence of any hazardous material, including without limitation asbestos, polychlorinated biphenyl, petroleum leakage, or agricultural chemicals, which may or may not be present on the subject property, was not called to the attention of nor did the appraiser become aware of such during the appraiser's viewing. The appraiser has no knowledge of the existence of such materials on or in the property unless otherwise stated. The appraiser, however is not qualified to test for such substances. The value opinion developed herein is predicated on the assumption that no such hazardous substances exist on or in the property or in the proximity thereto, which would cause a loss in value. No responsibility is assumed for any such hazardous substances, or for any expertise or knowledge required to discover them. WALTERIII?. ASSOCIATES Real Estate Valuations & Analysis Site Description Page 26 Zoning Map (L-M)-IndustriaI Medium Intensity District wi a Development Concept Master Plan Overlay First Avenue Pond NaturalAr City of Greeley OfficIal 2017 Zoning Map rA• Development Concept Master PLan ROW Vacations IIIII Conservation District (CND) Commercial High Intensity (C+I) Commercial Low Intensity (Cat) Holding Agricuilure (Ha) industrial High intensity (1*H ) industrial Low Intensity (I L) tndu strial Medium Intensity (1 4) ) WALTER ASSOC! A TES Real Estate Valuations & Analysis Site Description Page 27 Flood Map According to Federal Emergency Management Agency (TEMP) map 08 123 1543E, dated 1/20/2016, the subject is located in Zone "X", which is an area located outside of the identified 500 -year flood plain. Note, I am not an expert surveyor in the interpretation of flood map information, but the property appears to be located as just mentioned, WALTER } kSSOCI TES Real Estate Valuations & Analysis Site Description Page 28 N Cie C a 4e peo 44 Nuo Pmb C tup Site Description to n oZi rti4fi tin C '404 ra 4-1 _as LU CC 4 pet Ts CIO £W6S9 ,544-14 r �If'fiCL luirjscam i atuts .r c,.cc.69N 5 arcs XV {EC big 4 o tp 0.1 if a _tacit rh is] �E to ay r ,40-0c9 3„,0Z.119.76.1314 133&&S H193 1 V] nic 901 Tic wa vat" OM as as a t Paill Sc —1 tiE OE ''W AM Xitll M1Mai 02 z — URI r1- ri trn &'ChL E pi aro Pa.,, Pal IC If il 'It CO at.5o.,1 m CD b4 a - Site Description t1, arri co ct c0 Grai QC 3 > h11 --- c Subject Site Photographs "As Is" Viewing northeast at subject's temporary mobile office with automated security gate from secondary ingress/egress access from F 28th Street. Viewing southwest of subject's existing improvements. Viewing west at automated gate from subject's primary ingress/egress access from 1" Avenue. WALTER tCr ASSOCIATES Real Estate Valuations & Analysis Site Description Page 32 Subject Site Photographs "As Is" Viewing west at existing improvements (covered canopy RV parking). Viewing east at subject site from west boundary. Viewing north at subject site from southwest boundary. WALTER t•ribz I_ LS Real Estate Valuations & Analysis Subject Improvements Page 33 Subject Site Photographs "As Is" Viewing west along B 28th Street along the north boundary of subject. Viewing south along 1st Avenue from the E 28th Street intersection. Viewing east along E 28th Street from Pr Avenue intersection. WALTER & ASSOCIATES Real Estate Valuations & Analysis Subject Improvements Page 34 subject Improvements The following description is based on discussions with developer, Wayne Frelund as well as review of the plans designed by RidgeTop Engineering and Consulting (please see extraordinary assumptions). Please note, elevation plans describing detailed building components of proposed buildings were not available to appraiser. Building descriptions to follow are based on typical includes construction. The following table the "As Proposed" gross square feet derived from the building plans provided by developer: GENERAL -, Proposed elf -Storage Facility Property Identification: For purposes of this report descriptions to follow are for the subject's individual units 'as complete' as of June 1, 2019 completion date. Existing and proposed on -site office is a storage container build -out as office space and considered personal property. The subject property is a proposed (7) building 435 -unit self -storage facility that will include 10 -models of various sizes, and (1) existing 34 -unit covered canopy RV parking structure. Each building consists of steel construction. Construction Type: Construction Quality: Year Built: Effective Age: Remaining Useful Life: Condition: Areas, Ratios Numbers: Marshall Valuation Service, Class S, Steel frame Average to Good Cost (Non - Climate Control) Average to Good Cost (Climate Controlled Units) New Construction projected to be completed in June 2019, per developer. New Construction 38 years (Avg, to Good - Marshall Valuation Service) New Construction Number of Stories: 1 -story (7) buildings. 96,175 Gross building square feet. Net building square feet: 74,100 SF non -climate controlled 4,875 SF climate controlled 3j830 SF canopy parking 95,805 SF Net Total, per provide plans and specs. Land to Building Ratio: 2.22 to 1 "as complete". WALTER &_ ASSOCIATES Real Estate Valuations & Analysis Subject Improvements Page 35 FOUNDATION, FRAM,E EX:T.E RIOR Foundation: Exterior: Windows: Roof/Cover: INTERIOR 'NIT MIX Configuration: Concrete slab on grade. The walls are covered with ribbed metal, faux stone and stucco facade. No windows noted in buildings. Gabel & lean-to design / ribbed metal, standing seam metal roof. The subject's (7) a 1 story buildings accommodate 469 -units steel- storage units; each being accessed from an exterior roll- up overhead door with exception of canopy storage structure. The unit descriptions are as follows, while the specific layout for each floor is displayed on the following pages. Subject (Non Climate Controlled) -- - I (Unit Mix) Size F per Unit Total Units Net _ Total A 5)(10 2,050 10x10 100 X42 4,200 B 10 x15 150 57 8,550 C D 10x 20 29,400 E 1 0 25 2 50 8020,000 F 10� x 30 309 33 9,900 Tots I Non-+ 400 74,100 Subject ( Iim rnatroll to - (Unit Mix) i+ F per Unit Tsai Jnits N t of l A-+ 5 x 5 25 1 25 B - CC 5 250 C - CC 10x10 100 12 1200 D -CC 10 x 20 200 7 3400 Total CC � ing) Size SF e'er Unit T ni t I het F T t l P11 x 45 495 34 16,830 WALTER 4,"IZT ASSOCIATES Real Estate Valuations & Analysis Subject Improvements Page 36 Floor Cover: Restrooms: Lighting: Walls: Smooth finished concrete slabs form the floor in the storage units No restrooms or plumbing noted in climate or non -climate -controlled units. A mix of fluorescent and incandescent lighting. Interior partitions between individual storage units are corrugated metal panes attached to steel post framing. Ceilings & Height: Storage unit ceilings are open to the underside of the metal roofing anels. 10'+/,- side wall height. UA+: No HVAC in non -climate -controlled units. HVAC in CC units. Electrical: The electrical expected to meet or exceed current standards. Fire Protection: PROPERTY ERTY ANALYSIS Design & Functional Utility: Miscellaneous: No fire suppression noted. A six-foot high chain link fence will surround the entire storage yard. A six-foot high, (2) 25 -foot wide automated security gates, operated by a keypad -activated electric motor provides 24 -hour access to the area. Each unit has a lock. There is expected to be firewalls as needed to meet fire code on each building. 435 various size roll -up overhead doors. Detailed sizes can be found in the building plans provided on the following pages as well as the chart on the previous page. Signage. 36 camera video surveillance. W A L f. 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C {t+l ram; - 1 CT, 441:4 wires';-064 .tF a - J L f ,� ,� „;„is ,p _ e� m Subject Improvements tie a :Ec,„ 414 X•I 11•14.9 .+t 4 40 NO ▪ YR • r ,^ CO L 41 C w L C C C C PO et 1•,P I -Is =1•1'� Is M Gel wy ilea e cid C C � E u Is .IC ran y� NisT a e Cis t116 ett •� A �t C C' et L C 911. t1��J{ '•F,r` 'IR Ti c Cti Cisi yy 4.0 T l� E X14ta 4.1 r� it a 24 ;a • r • 4 1 I •Thilj �W stf "1g m g z a tr- m POP 19i 'o'#'t J v kw" 1 1 f ■ ■ ion! r r, IL t..s * 1 . tall? PHASE TABLE -1 7 s II _ . I r p I I E' w 4 F a mg . l- lg. j • . { 241 . a IS • iii . I II . :1:k • I fa ' �. I w ( • I . li lli , { 1 i ril ao n c_ n y ., I ' I f r 1.JJUIS HIHt J 1 I al le l ct Cal CL Subject Improvements ASSOC RTES WALTER osist Real Estate Valuations & Analysis Real Estate Assessments and Taxers Tax Authority Assessment Year Assessed Values: Parcel Number Assessed Value Taxes (As -i0 Current Mill Levy Rate Total Estimated Tax Amount Weld County Treasurer / Taxing Authority 2017 La rimer County Parcel Number: 096121219001 Assessed Value: • Improvement $154,120 • Land: $113,010 • Total AssessedValue; $267,130 Assessor's Actual Value: • Improvement: $389,686 • Land: $531,446 • Total Assessed Actual Value: $921,132 Taxes Estimated (AsuComplete 41. Stabilized) Opinion of Market Value as indicated in the Final Reconciliation section of this report: Indicated Assessed Value: *Estimated Taxes upon completion of improvements: 83.275 2017 Payable in 2018: Total Taxes: $23,922.42 *Note, taxes above are for the property "as is" recently constructed building situated on Phase II and does not represent proposed improvements within this report. The tax information below represents the "as stabilized" tax valuation within this report. The "as complete & stabilized" value is assumed to be reassessed in the near future and taxes are projected to be assessed accordingly. $6,075,000 $1,761,750 146,709.73 The estimated projected taxes upon completion of the improvements is based on opinion of value carried forward from the Final Reconciliation in this report. WALTER & ASSOCIATES Real Estate Valuations & Analysis Taxes and Assessments Page 41 Tax Assessments within Colorado Real estate in Colorado is revalued by the county assessor every two years (odd years only) . The most recent re -assessment of the subject will occur in the 1st Qtr. 2017. It should be noted that the above market value and assessed value indications are reflective of the recent reassessment in 2017; however, the property tax component `total' reflects the property taxes due and payable this year, which consider the assessor's valuation from 2017. The State of Colorado has provided for a unified system to assess real estate for property taxes. Appraisal districts are established on a county basis to assess real estate within the county. The individual taxing authorities within the county set their owner tax rates. WALTER ASSOCIATES Real Estate Valuations & Analysis Taxes and Assessments Page 42 Sell -Storage (Local and National) The subject property, a proposed self -storage facility, is located within the City of Greeley, Weld County, Colorado. Local surveys of `the self -storage market were not available, therefore I pulled national surveys and articles that pertain to the general market including Colorado and have called local Brokers as well as interviewed self -storage owners/managers in the local market. According to a 2017 Annual Report submitted by Public Storage, between 2011 and 2016, same store revenue growth rate averaged 5.4%, well above our 20 -year historical average of 3.7%. The absence of new supply pp' y after the 2008/2009 financial crisis and strong job growth were "tailwinds" for the self -storage business. In 2016, however, Public Storage's revenue growth declined for the first time in six years to 5.8%, and in 2017 decelerated to 3.0%. This was described as largely due to construction of new properties that has increased significantly over the last three years". Public Storage's 2016 Annual Report further describes that with any real estate business, when it is cheaper to build than to buy and the return on investment is high, developers will build. The strong revenue growth in 2011 to 2016 combined with low interest rates and an abundance of capital created the ideal environment for the development ofnew self -storage properties. This level of development is a natural part of the real estate cycle. Given the liquidity in the financial markets, low interest rates and strong incentive for asset managers to invest, most financial assets, such as equity stocks, bonds and real estate, are at historically high prices. At some point it will again be cheaper to buy than to build and new supply will abate, initiating a period of strong revenue growth. An article written by Storage Insider indicated, "The self -storage industry survived the 'Great Recession" by sustaining occupancy levels and the industry now reports growing trends among top operators." p Other local positive indicators include increasing rental rates and low vacancy (1% to 10% based on a survey of competing Fort Collins/Loveland/Windsor self -storage facilities). Majority of immediate Greeley market area indicated a similar vacancy rate of 0% to 10% as of May 2018. According to market surveys and local brokers, capitalization rates have consistently dropped since 2012. *Subject's occupancy was reported at 95% for existing building located within Phase II which consists of a 20 -Unit non -temperature -controlled unit building. g Competing selfstorage facilities within a 3 -mile radius reported existing occupancy rates as p � follows: Gateway Self -Storage 99%, American Self-Sery er torage 92% and 29th Street Self -Storage at 93%. Both American Self-Sery and 29th Street rates have been increased just over 25% since August, which is reason for slightly lower occupancy that was near 99% prior to increase, per owner. WALTER & ASSOCIATES Real Estate Valuations & Analysis Market Analysis Page 43 One of Northern Colorado' s most recent and similar stabilized elf -Storage in Loveland at Centerra opened November 2015 and achieved 85% occupancy in 8 months, per on site manager interviewed on 6/1/2016. Survey of recent sales of Class A self -storage facilities in the Denver Metro area indicated many properties are transferring without a brokerage firm, whereas Public R_EITs are actively seeking these assets out prior to entering the market. The self -storage industry is faring well. Conclusion As is with the rest of the commercial markets, the industrial market fundamentals have been soft through. the "Qtr. 2012; however, the past several years show the industrial market continue to improve through the 2" Qtr. 2018 and most recently showing signs of stabilizing. However, g self - storage seems to be "recession proof', if properly managed, and this industry seems to be faring well. In addition, consideration is placed on the population growth within the subject's location within the City of Greeley. The overall outlook for the self -storage market in the subject area is favorable. 'WALTER & ASSOCIATES. Real Estate Valuations & Analysis Market Analysis Page 44 Highest and Best Use According to The P ictionary onary of Real Estate Appraisal, Sixth Edition, a publication of the Appraisal Institute, the highest and best use may be defined as: The reasonably probable use of propertt, that results in the highest value. The four criteria that the highest and best use meet are legal permissibility, physical possibility, fin an cial' easibility, and maximum productivity. Implied in these definitions is that the determination of the highest and best use is shaped by the competitive forces within the market where the property is located. Therefore, the analysis and interpretation of the highest and best use is an economic study of market forces focused on the subject property. There are two types of highest and best use. The first is the highest and best use of the land or site as if vacant. The second is its highest and best use as if improved. The highest and best use for the land as if vacant and ready for development may differ from the highest and best use ofthe property e p' rty as improved. Within this analysis we evaluated the subject sites highest and best use as though vacant and as currently improved. Highest and Best Use of Land as Though Vacant: Highest and best use of land or a site as though vacant assumes that a parcel of land is vacant or can be made vacant by demolishing any improvements. With this assumption, uses that create value in the marketplace can be identified, and the appraiser can begin to select comparable properties and form an opinion of land value. Land as though vacant is a fundamental concept of valuation theory and the basis for the Cost Approach. Because many appraisals include an allocation of value between the land and the buildings associated with it, a highest and best use analysis of the land as though vacant is frequently performed. The opinion of the value of land is generally calculated as though vacant. When the land is already vacant, the reasoning is obvious; the land is valued as it exists. When the land is not vacant however, the land value depends on how the land can be utilized. Therefore, the highest and best use of land as though vacant must be considered in relation to its existing use and all potential uses. WALTER I & A Sit)C1 tTTry' Real Estate Valuations & Analysis Highest & Best Use Page 45 Financially Feasible: The questions to be answered in this analysis are: If the land is, or were, vacant, what use should be made of it? What type of building or other improvements, if any, should be constructed on the land, and when? The reasons to identify. the highest and best use of land as though vacant in an appraisal are to indicate an opinion of a separate land value and to identify comparable vacant land sales. In evaluating the site's highest and best use of both lands as though vacant and property as improved, the following four criteria must be met. The highest and best use must always be: (1) legally. permissible, (2) physically possible, (3) financially feasible, and (4) maximally. productive. Tests of legal permissibility and physical possibility must be applied before the remaining tests of financial feasibility and maximal productivity. Conclusion: Legally. Permissible: From a legal standpoint, the subject site is zoned I- -Industrial Medium Intensity with a Development Concept Master Plan Overlay, per the City of Greeley, which allows for a wide range of light industrial as well as limited commercial uses. The proposed use is considered a legal and conforming use of the site. Physically Possible: The subject total Phase I site size is 213,123 square foot or 4.893 Acres, mostly level and rectangular shaped site. A site survey showing dimensions was available to appraiser and can be viewed on page 31 of this report. The survey indicates no direct frontage from B 28th Street or 1st Avenue. The survey. shows 659.83' on its southern boundary and 488.30' along its western boundary. Site will be accessed via a 40' access easement from B 28th St, and a 30' access easement along the east side of p1 Ave., per survey., The rectangular shape of overall site offers good visibility. All public utilities, including natural gas, electric, city water and sewers are available. The site is large enough for most medium sized light industrial development. There are no apparent physical limitations to the development of the site. Physically speaking, the site appears to be adequate for development. In addition, we specifically assume the property proposed usage and improvements as described throughout this report will be approved with the City. of Greeley. Planner. Any physically possible and legal use of vacant land that produces a positive return to the land after considering risk and all costs to create and maintain the use if financially feasible. As noted in the market analysis section of this report, the current economy continues to improve, and new industrial and commercial construction are a feasible improvement giving consideration to its location within the City. of Greeley as well as its close proximity. to Highway. 34 Bypass and Hwy. 85 interchange, The convenient location to Greeley. CBD, Northern WALTER & ASSOCIATES Real Estate Valuations & Analysis Highest & Best Use Page 46 Maximally Productive: Colorado University and I also enhances feasibility. The current economy remains strong, and self -storage construction is a feasible improvement giving consideration of the increasing demand for housing in the subject neighborhood. The maximally productive use of this site considers all of the available developmentoptions, the current market conditions, and the character of the greater area. Highest and best use as though vacant is for an industrial oriented use. Highest and Best Use as Improved: The highest and best use of a property as improved pertains to the use that should be made of an improved property in light of its improvements. The use that maximizes an investment property's value, consistent with the long-term rate of return and associated risk, is its highest and best use as improved. There are two reasons to analyze the highest and best use of a property as improved. The first is to identify the property use that can be expected to produce the highest overall return for each dollar of capital invested. If, for example, a property is currently being used for a specific use, will this use continue to provide maximum benefits or would the rate of return be increased by converting the property to another use, after considering renovation or demolition costs? The value of the property will differ under these two use assumptions, and the use providing highest hest � present value is the highest and best use as long as it is a legal or possible use. As long as the value of the property as improved is greater than the value of the site as vacant, the highest and best use is the use of the property as improved. The second reason to estimate the highest and best use of the property as improved is to help identify comparable properties. The highest and best use of land as thoughvacant and as property improved should be similar for each comparable property as for the subject property. WA `'E R & ASSOCIATES Real Estate Valuations & Analysis Highest & Best Use Page 47 Conclusion: Legally Permissible: Physically Possible: Financially Feasible/Maximally Productive: Highest and Best Use as vacant & As Improved: Ownership Profile: The existing and proposed use are considered legally permissible. The existing and proposed use are considered physically possible. The maximally productive use of this site considers all of the available development options, the current market conditions, and the character of the greater area. The prospective market value "As Complete" and "As Stabilized" opinions are subject to the Extraordinary .s sumptions as noted within this report. A projected cost for Phase I was not available from the developer. Costs specific to Phase I including: grading, etc. are difficult to measure. Financially feasibility is measured by comparing the cost to construct a product versus its value after completion and stabilization, Lacking costs and given some of the unknowns and the fact that this project is being built in phases, no judgement is made herein as to financial feasibility. Highest and best use as vacant is for future development with an industrial oriented use. Highest and best use as improved is a self -storage type industrial facility -oriented use as currently proposed. Proposed improvements are subject to approval of the USR. Based on market observation of the marketplace and the subject improvements, in my opinion the most likely ownership profile is an investor. WALTER & ASSOCIATES Real Estate Valuations & Analysis Highest & Best Use Page 48 Approachesto Value Professional Appraisal Practice customarily includes the Cost, Income, and Sales Comparison Approaches to Value to develop a final value opinion of value. The Cost Approach The Cost Approach involves estimating the current reproduction or replacement cost of improvements and subtracting the depreciation from all causes, as of the date of the appraisal. The opinion of value of the land is then added to the depreciated cost of the improvements. The land value is developed through comparing recent sales of similar vacant parcels to the subject site, "as vacant" and available to be put to its Highest and Best Use. The estimates of relacement costs are based on the various services and knowledge of the local market. Sales Comparison Approach One of the best indications of the "Market Value" of a property is the Sales p'p Comparison Approach p found by comparing recent sales of other similar properties. FIRREA of 1989 and Title 12 CFR Part 34 defines "Market Value" as: "the most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting retl and knowledgeably, eably, and assuming the price is not affected by undue stimulus". Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: • • • • Buyer and seller are typically motivated; Both parties are well informed or well advised, and acting in what they consider their own best interests; A reasonable time is allowed for exposure in the open market; Payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and The price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale. on CATER , AS `_7OC J A'r Es Real Estate Valuations & Analysis Approaches to Value Page 49 The 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 as of the date of the appraisal, is used to develop the potential gross annual income. In the Income and Expense Statement, deductions are made for operating g expenses, vacancy and collection losses to derive a Net Operating Income. Through analysis of comparable sales and/or examination of the financial market, a Capitalization Rate is calculated. Net Income divided by the Capitalization Rate indicates value by the Income Approach. The use of one or more of these techniques may be determined by the quantity or quality of data available. In some instances, depending upon the type of property under appraisement or the purpose of the appraisal, one or two of the approaches may carry more weight or may furnish a more reliable indication of value than the others. In other instances, because of use, age, design, obsolescence or inadequacy of data, one may be accorded little weight in a correlation of the approaches into a final value opinion. Exhibits are used in each approach to describe sales data and j ustif `y required adjustments. Final Reconciliation The appraisal process concludes with the Final Reconciliation of the values derived from the approaches for a single opinion of market value. Different properties require different means of analysis and therefore one approach may be more reliable than the others. Analyses Applied A cost analysis was developed due to typical market participants relying on this approach for a proposed or newer property. A sales comparison analysis was considered and developed due to having adequate data to provide a value opinion and this approach reflects market behavior for this property type. • An income analysis was developed because it is the approach typically used by investors of commercial or industrial income properties. WALTER ASSOCIATES Real Estate Valuations & Analysis Approaches to Value Page 50 Cost Approach The Cost Approach is defined as: "A set of procedures through which a value indication is derivedfor the fee simple interest in a property by estimating the current cost to construct a reproduction of or replacement for, the existing structure; deducting accrued depreciation from the reproduction or replacement cost; and adding the estimated land value plus an entrepreneurial profit. Adjustments may then be made to the indicated fee simple value of the subject property to reflect the value of the property interest being appraised. "4 The basic underlying assumption in the cost approach is that cost is an appropriate ro riate measure of value, although cost does not always equate to value. However, it assumes that the informed and rational purchaser or investor will pay no more for an existing improved p ro than the cost of property producing a substitute property with the same utility. This approach does not directly reflect intangible items such as good will or business value. The steps involved in the cost approach are briefly described below. • The subject's site value is estimated as though vacant and available to its highest and best use. • The reproduction or • Replacement cost new of the subject improvements is estimated to include direct and indirect costs and an appropriate allowance for entrepreneurial incentive. • The estimated accrued depreciation if any from all sources is subtracted from the reproduction or replacement cost new. • The resulting depreciated cost of the improvements is added to the indicated site value to arrive at an indication of the value of the property. Land Valuation The most reliable method for estimating land value is based on a comparison of subject site with similar land sales. Market research of CoStar, Tres, Loopnet and assessor's records was made in order to find sales of similar neighborhood commercial sites in the subject's competitive market area. The following land sales are considered to be the best representative of market appeal of the pF subject site. They reflect "arm's length" market transactions between disinterested parties each seeking to maximize their own financial positions involving those sales/market and concessions. 4 The Dictionary orR.eeal Estate Appraisal, Third Edition, Appraisal Institute, Page 81,. 'WALTER ASS OCI ATES Real Estate Valuations & Analysis Cost Approach Page 51 Comparable Land Sale 1 Property Information Property Type: Location/Address: Parcel ID Sale Information Sate Price: Sale Price/Gross Acre Sale Price/Gross SF Sale Date: Grantor: Grantee: Reception Number: Confirmation: Land Size Information Site Size: Zoning: Remarks: Industrial - Vacant Land 2836 1st Avenue, Greeley, CO 096121218003 $850,000 121,46 /Ac.' $2.79/SF November 3, 2015 1st Avenue Partners LTC Power Equipment Company 4157396 Greg Walter (Walter & Associates) with Wayne Frelund (Grantor), & Courthouse Records. 3 04, 844 SF or 6.998 acres (I -M) - Industrial Medium Intensity District Grantee's intentions are for present industrial development of a building to accommodate Power Equipment ent facility. This site is located along the east side of l st Avenue, just south of E 28111 Street. The site is located adjacent to south of subject and was originally subject's larger parcel prior to being split for redevelopment. WALTER & ASSOCIATES Real Estate Valuations & Analysis Cost Approach Page 52 Comparable Land Sale 2 Property Information Property Type: Location/Address: Parcel ID Sale Information Sale Price: Sale Price/Gross Acre Sale Price/Gross SF Sale Date: Grantor: Grantee: Reception Number: Confirmation: Land Size Information Site Size: Zoning: Remarks: WALTER Si ASSOCIATES Real Estate Valuations & Analysis Industrial - Vacant Land 625 31st Street, Evans, CO 096120129001 $1,046,000 $88,292/Ac. .03 November 19, 2015 Gordon. J Corn & Leroy Wright Rush Truck Centers 4160662 Greg Walter (Walter & Associates) with Mark Bradley w/ Realtec ommercial RE Services), Costar & Courthouse Records. 516,075 SF or 11.847 acres US 85 Retail and Commercial Auto District Grantee's intentions are for future commercial/industrial development. This site is located at the southeast quadrant of Highway 34 Bypass and Highway 34 Bypass, along the north side of 31 tb. Street. The site is within a 0.50 mile west of the subject. The property . offered on the market for about 630 days, per CoStar. Cost Approach Page 53 Comparable Land Sale Property Information Property Type: Location Address: Parcel ID Sale Information Sale Price: Sale Price/Gross Acre Sale Price/Gross SF Sale Date: Grantor: Grantee: Reception Number: Confirmation: Land Size Information Site Size: Zoning: Remarks: WALTER & ASSOCIATES Real Estate Valuations & Analysis Industrial - Vacant Land 21' St., Greeley, CO 095714203004 $630,000 S156,328/Ac. $3.59 March 12, 2015 Golden Eye Investments LLC VB Properties LLC 4089827 Greg Walter (Walter & Associates) with Courthouse Records. 175,532 SF or 4.03 acres I-1` -Industrial District, per the City of Greeley Grantee's intentions are for future development. The site is located within the West Greeley Tech Center within 10 miles west of the subject. Numerous attempts have been made to speak with a direct party to the transaction have been unsuccessful, however are ongoing. Cost Approach Page 54 Comparable Land Sale 4 Property Information Property Type: Location/Address: Parcel ID Sale Information Sale Price: Sale Price/Gross Acre Sale Price/Gross SF Sale Date: Grantor: Grantee: Reception Number: Confirmation: Land Size Information Site Size: Zoning: Remarks: WALTER & ASSOCIATES Real Estate Valuations & Analysis Industrial •- Vacant Land WCR 44 Hv . 85, LaSalle, CO 1057 3201007 $547,800 $108,907/Ac. $2.50 December 18, 2017 Peckham Development Corp. T&R Properties LLC 4361132 Greg Walter (Walter & Associates) with Costar Courthouse Records. 219,107 SF or 5.03 acres (1-3) - Industrial District Grantee's intentions are for future commercial/industrial development. This site is located just east off Hwy. 85 in Unincorporated Weld County, within Weld County Industrial Park along the east side of Niobrara Blvd. The site is within 7 miles southwest of subject. The property was offered on the market for about 1,081 days, per Costar. Numerous attempts have been made to speak with a direct party to the transaction have been unsuccessful, however are ongoing. Cost Approach Page 55 Comparable Land Listing 5 Prounity y Information Property Type: Location/Address: Parcel ID Listing) nfnr malon Listing Price: Listing Price/Gross Acre Listing Price/Gross SF Owner: Confirmation: Land Size information Site Size: Zoning: Remarks: WA urEit_a ASSOCIATF Real Estate Valuations & Analysis Industrial - Vacant Land AA Street, Greeley, CO 0803 0000O92 (Larger Parcel) $1,306,800 (Asking price for 10 to 20 Acres) $130,680/Ac. $3.00 Greeley Land Fund LLC Greg Walter (Walter & Associates) with Costar & Courthouse Records. Range from 1-2 acres to 20+ acres (IM) - Industrial Medium Intensity District Grantee's intentions are for future commercial'industrial development. This site is located just east off Hwy. . 85 in Unincorporated Weld County, within The Grainery Industrial Park. The site is within 4.5 miles northwest of subject. The property has been offered on the market for about 2,337 days, per CoStar.Asking price per acre increases with smaller size acreage sites. Note, no current infrastructure exists on site. Cost Approach Page 56 Comparable Land Sales Map Land Sale 3 y4�lasat.r ° arAavtlishe flD LORME Data use subject tD license. DeLarme. iJeLorme Street Atlas USA° 2015. `w wwi del orrrte,.c.onil rn Coined Listing S YV FST W- : WFST South Pie ivot Land Said 4 MN (7.9 E) WALTER ASSOCIATES Real Estate Valuations & Analysis 204Th St +Land Sale 2 3's.TI t 0 % Cost Approach nit 1 134 2 21/2 Data Zoom 11-1 Page 57 Land Sales Grid arable Land Sale Adjustment Table E Vacant Land 'As Is' 2824 ist Avenue aU 1t Ce ;vie to cht 0 49 71 ed v , to a ,a vQ 413 Cost Approach cra PEN i F. sit to 0 r• o r• o W Land Comparable Sales Discussion The comparable sales detailed on the previous table are the most similar land sales available for comparison from the local market. They range in size from 4.03 Acre to 11.5 Acre and indicate an. unadjusted price -per -acre range from 88,2' /Acre to 156,3 /Acre of land area. I have qualitatively analyzed the per acre sales prices with a plus (+) adjustment for those characteristics inferior to the subject, a minus (-) adjustment for those characteristics superior to the subject. p � Research did not reveal definitive changes in market conditions since 2015 for land sales in the Greeley market area. Therefore, the sales were not adjusted upward or downward for changes in market conditions. However, Listing 5's asking price was adjusted downward 10% to reflect most land listings selling for less than asking price. Sales 1 & 2 are located within close proximity to subject, indicating no adjustment. Sale 3 is located in W Greeley in closer proximity to 1-25, which typically a brings higherprice per acre, g suggesting a lower value for subject from this indicator. Sale 4's less dense locale in LaSalle, suggests a higher value for subject from this indicator. Sale 2's functional utility is considered inferior to subject due to triangulated shaped site decreasing use ability, suggesting higher value gg g a g for subject. Typically, there is an inverse relationship between size and price per acre, whereas smaller size tracts will typically sell for more on a price per acre basis than a large size tract. Therefore Sale 2 a Listing 5 were adjusted upward for larger acre sites. All sales with exception of Sale 2, are similar industrial oriented zoning districts located within the City of Greeley and LaSalle. These zoning districts allow for a wide range of industrial uses; therefore, no adjustment was required. Sale 2's commercial zoning suggests a slightly lower value from this indicator. Consideration was based on the above mentioned four vacant land sales, 1 -listing subject the sub j ect property's size, overall utility, location at the southeast corner of 1 Pt Ave. E 28th Street. It is concluded that the 'as is' land value is indicated at 120,000/Acre or $587,160 or $585,000 R. ) for the 4.893 Acre subject site. Replacement Cost Estimate The replacement cost of a building is the total cost of construction required to replace or build the � subject building with a substitute of similar utility. These costs include labor, materials, supervision, contractor's profit and overhead, architect's plans and specifications, sales taxes, and insurance. The major portion of the Marshall Valuation Service is devoted to the development of replacement or reproduction costs by various methods. In calculating building cost estimates, it is important to consider both direct costs hard costs) and indirect costs (soft costs). Both types of costs are essential for a reliable estimate of replacement or reproduction cost. Also necessary is the inclusion of developer or entrepreneurial profit since p this is the primary incentive necessary to induce an entrepreneur to undertake the risks associated with building the project. WALTER ASSOCIATES Real Estate Valuations & Analysis Cost Approach Page 59 Direct costs are expenditures for the labor and materials used in construction of improvements. These costs include the overhead and profit of the general contractor as well as various sub -contractors. Indirect costs are expenditures or allowances that are necessary for construction but are not typically part of the construction contract. Indirect costs include such items as architectural and engineering fees, legal and professional fees, construction loan interest and fees, taxes and insurance, marketin . ga and administrative costs. Entrepreneurial profit is the value created over and above cost through the efficient organization of the various components of development. The total cost of the project should be less than the market value upon completion in order to reward the entrepreneur for taking the risks. Whether a profit is actually realized depends upon the expertise of the developer in coordinating the components of the construction process. Direct Cost As mentioned, direct costs are expenditures for the labor and materials used in construction of improvements. These costs include the overhead and profit of the general contractor as well as various sub -contractors. The replacement cost of the subject improvements has been estimated according to type and quality ofmaterials as well as workmanship. Source of the replacement cost estimate is from the Marshall Valuation services, a nationally recognized cost service. Current construction cost and local multipliers will be applied in order to accurately estimate replacement cost for thebect. The subject's subject. improvements will be Class S (Steel Frame) construction. The plans, specifications and developers cost for the non -climate -controlled units indicate an average to good quality base cost, white the climate control units also indicate average to good quality base cost S structure. Therefore, I have used the listed 'average to good' for both non -climate controlled & climate -controlled units for purposes of estimated base cost. The improvements are described by Marshall and Swift Section 14, Page 28. The following table references section and page numbers: '` . , s anti tl VALUATION ION `ri s. �J _ • 5"'i ih 7 R l'', iT INDUSTRIAL BUILDINGS: MINI -WAREHOUSES Cost Source: Manual Section: Manual Page Number: Building Type: Construction Class: Quality: Date: Marshall Valuation Service 14 28 Mini -Warehouse Class "S" Avg. to Good Cost (Non -CC) Avg. to Good (CC) February 018 5 Marshall Valuation Service) 2015 - Marshall & Swift, 911 Wilshire Boulevard, 16th Floor, Los Angeles, CA, 90017-3409, Telephone (213) 683-9000. WALTEIt & ASSOCIATES Real Estate Valuations & Analysis Cost Approach Page 60 A. summary of the base cost with appropriate multipliers for the subject's proposed 74,425 gross square feet "average to good cost" non -climate control units and 4,875 S.F. "average to good" climate -controlled units to be completed in November 2018 is as follows: BASE COST Base Square Foot Cost - Non -Climate Control Storage Warehouse (74,425 SF) - Type -Avg Base Square Foot Cost - CC Storage Warehouse (4,875 SF x 48.9) - Type -Avg. to Gd. Base Square Foot Cost - Canopy Storage (16,875 SF x 11,74) - Type -Avg. to (3d. Adjusted Base Square Foot Cost Height & Size Refinements # of stories multiplier Story height multiplier Floor area -perimeter multiplier Combined height & size multipliers Adjusted square foot cost Current& local refinements 1.000 E000 1.000 1.000 . to Good $36.62 Added below Added below $36.62 Current cost multiplier 1.010 Local cost multiplier (Greeley) 0 .970 Combined current & local multipliers 0.980 Final square foot cost size of the improvements (SF) Indicated Direct Building Costs Base SF Cost wi multiplier (4,875 SF x $48.92/SF - Climate Controlled warehouse - Avg. to Good) Base SF Cost w/ multiplier (16,875 SF x $11.51/SF - Canopy parking - Avg. to Good) Indicated Total Direct Building Costs $3642 $35.88 74,425 $2,670,369 $238,485 $194,231 $3,103,085 Indirect or Soft Costs The base costs provided by Marshall Valuation Service do not include such items as escrow fees and legal fees, interest on the land, property taxes, land planning, off -site costs, and marketing costs required to bring the project to stabilized occupancy. The appraiser has included an allowance of 10 percent to cover those items not included in the base costs. Entrepreneurial Profit The anticipated developer/entrepreneurial profit must be recognized since it primary re resents the p' incentive in undertaking a project of this nature. This amount represents the amount the developer expects to receive as compensation for undertaking the project. Whether a profit is actually realized depends upon the expertise of the developer in coordinating the various components of the construction process and the local economy. Typically, the amount of profit varies with the size and complexity of the project. In most cases, owner -occupied and single -use properties will l� p display smaller profit ranges than will larger projects, multi -tenant ,lro' ects or subdivisions. In projects, most cases, observed profit ranges from 8% to 15% for smaller less complicated structures. Therefore, an entrepreneurial profit of 10% is applied to the subject. WALTER ' ASSOCIATES Real Estate Valuations & Analysis Cost Approach Page 61 Depreciation Depreciation is the loss in property value from any cause, usually expressed as the difference between replacement cost and market value. Depreciation is classified into three categories of physical depreciation, functional obsolescence, and external obsolescence as discussed below. Physical Depreciation physical depreciation or deterioration is the result of wear and tear or structural defects in, the building. This type of depreciation is typically broken down into two categories ofphy sical curable and physical incurable. Curable physical deterioration refers to items of deferred maintenance that are in need of repair as of the effective date of the appraisal. Deferred maintenance refers to items such as minor repairs, painting and refurbishing which are required to restore the improvements to an optimum state of marketability. These items are considered curable if the cost of correcting the condition would be offset by an equal or greater increase in value. Incurable physical depreciation or deterioration refers to items that cannot be practically or economicallycorrected at the present time. These items typically represent major structural components of the building such as foundation, load -bearing walls, roof system, and mechanical systems. This type of depreciation is calculated for all structural components that are not included in the physical curable category. This type of depreciation is usually estimated using the age -life method whereby the ratio of actual or effective age to estimated total economic life is applied to the replacement or reproduction cost of incurable physical building components. Marshall and Swft estimates the typical life for an average to good cost class "S" self -storage buildings to be 38 years. Considering the subject's proposed construction, there is no physical depreciation deduction for the facility. Functional Obsolescence Functional obsolescence is a loss in value resulting from defects is design. It can also be caused by changes that, over time, have made some aspect of the structure obsolete by modem standards. Functional obsolescence can both be attributed to deficiencies or super adequacies and can be divided into both curable and incurable categories. To be curable, the cost tocorrect the defect must be the same as or less than the anticipated increase in value. The subject's proposed improvements are expected to be built at industry standards and are not considered to have any functional obsolescence. WALTER Kr ASSOCIATES Real Estate Valuations & Analysis Cost Approach Page 62 External Obsolescence External obsolescence refers to diminished utility of a structure due to negative influences emanating from outside the property boundaries and is usually incurable on the part of the building owner. External obsolescence can be attributable to a variety of factors such as neighborhood decline, surrounding uses, or local market conditions. No external obsolescence is present. Site improvements section consists of the excavation, concrete, entry gate, signs e, fencing and landscaping. The proposed site improvement cost was provided verbally by developer and is assumed to be accurate. The site improvements reported are as follows: Site [$200000 Earthwork Security fence $75,000 Security gates $100,000 Site concrete $910,000 Total $1,285,000 WALTER &ASSOCIATES Real Estate Valuations & Analysis Cost Approach Page 53 The following table contains the replacement cost estimate for the subject property utilizing the aforementioned data. SUMMARY OF THE COST APPROACH Replacement Cost Total Direct Cost Indirect Cost @ 10% Total Improvement Costs Entrepreneurial Profit: 10% of Costs Replacement Cost New of Improvements Less Physical Depreciation Less External Obsolescence Less Functional Obsolescence Depreciated Cost of Improvements Add: Land Value (4.893 Acres) Mini Storage Facility Site Improvements (Estimated & provided by Builder) DIDICATED VALUE BY THE COST APPROACH $3,103,085 + $1,285,000 1 $4,388,085 r 438,809 $4,826,894 +r$ 482,6!9 $5,309,583 IMP $5,309,583 + $ 585.000 $5,894,583 ROUND TO ,900,000 Market Value via o f Approach $5,900,000 WALTER & ASSOCIATES Cost Approach Real Estate Valuations & Analysis Page 64 Sales Comparison Approach The Sales Comparison Approach is based on the premise that a buyer would pay no more for a specific property than the cost of obtaining a property with the same quality, utility, and perceived benefits of ownership. It is based on the principles of supply and demand, balance, substitution and externalities. The following steps describe the applied process of the Sales Comparison Approach. The market in which the subject property competes is investigated; ; comparable sales, contracts for sale and current offerings are reviewed. • The most pertinent data is further analyzed, and the details of the transaction were investigated • The most meaningful unit of comparison for the subject property is determined • Each comparable sale is analyzed and where appropriate, adjusted to equate with the subject property. • The value indication ,for the subject by each comparable sale is analyzed and the data reconciled for a final indication of value via the Sales Comparison Approach. Market Research I have researched sales of similar self -storage facilities in the immediate & surrounding market area. There are five properties that are most comparable and are documented on the following pages followed by a location map and analysis grid. All sales have been researched through county records and published data sources, inspected from the street and made every attempt to confirm by a party to the transaction. The subject consists of a proposed self -storage facility containing 79300 gross square feet & 16,875 SF canopy RV storage parking. Based on the subject's highest g and best use gross square footage is the primary unit of comparison. Comparables Sales were selected based on the following criteria: Size: 30,000 to 150,000 square feet Location: Northern Colorado and Denver Metro Market Area Sale Dates: 4th Qtr. 2015 to present Highest and Best Use: Self -Storage Facilities WALTER ERR r ASSOCIATES Real Estate Valuations & Analysis Sales Comparison Approach Page 65 Comparable Sale 1 Location Information Property Name: Property Type: Location/Address: Parcel ID Sale Information Building Area: Units: Sale Price: Price per square foot: Price per unit: Sale Date: Grantor: Grantee: ReceptionNumber: Year Built: Site Size: Land to Building Ratio: Condition/Quality: Financial Information PI Expenses Cap Rate Confirmation: American Self -Berg Storage Self -Storage 2855-2858 31' Ave,, Greeley, CO 095924201015 & 095924201037 108,600 square Feet 858 $6,800,000 ' *SWD $5,285,800 (See remarks below) $62.62 $7,925 June 16, 2017 Justco Mini Storage Inc. Pfankuch Storage Greeley LIP 4311605 1985, 1993 & 2012 2 -Sites totaling 7.377 Acres/321,722 SF .96 to I. Good/Avg, to Good $863,016 34.64% 7.5% Greg Walter (Walter & Associates) with Roger Hill (Selling Broker wi Roger .ill RE), purchase contract, appraiser files & County Records. WALTER ASSOCIATES OCIATE Real Estate Valuations & Analysis Sales Comparison Approach Page 66 Remarks: WALTER �' . ASSOCIATES Real Estate Valuations & Analysis Comparable Sale 1- Continued Property contains 10 -buildings with 858 units, 25 -models, office, and 1 - manager apartment. Property was reported 99.5% occupied at the time of closing. *Note, Assessor records indicate purchase price of $5,285,800. . However, Broker indicated an additional $1,514,200 was paid for property and allocated toward business value, which does not show up on recorded deed. This property was sold as a portfolio sale with 2450 29th Street, Greeley, CO for a total combined sales price including real property and business value of $11,000,000, per Broker, appraiser files and reviewed sales contract. Sales Comparison Approach Page 67 Comparable Sale 2 Location In formation Property Name: Property Type: Location/Address: Parcel ILA Sale Information Building Area: Units: 441 2O Street Storage Self -Storage 2450 29th Street, Greeley, CO 095924100010 & 95924100065 68,975 GBA (Temperature control & non -CC controlled) Sale Price: $4,200,000 / *SWD $2,906,000 (See remarks below) Price per square foot: $60.89 Price per unit: $9,523 / Excluding parking spaces Sale Date: June 16, 2017 Grantor: Justco Mini Storage Inc. Grantee: Pfankuch Storage Greeley LLP Reception Number: 4311595 Year Built: 1987/Remodeled in 2014/2015 Site Size: 2 -Sites totaling 6.909 Acres/300,943 SF Land to Building Ratio: 194 to I Condition/Quality: Good/Avg. to Good Financial Information PGI Expenses Cap Rate Confirmation: $576,468 37.88% 7.5% Greg Walter (Walter & Associates) with Roger Hill (Selling Broker Roger Hill RE), purchase contract, appraiser files & County Records. WALTER T ASSOCIATE Real Estate Valuations & Analysis Sales Comparison Approach Page 68 Remarks: Comparable Sale - Continued Property contains 10 -buildings with 325 units, 29 -models, outside parking spaces, office area and 2 -apartments. Property was reported 99% occupied at the time of closing. *Note, Assessor records indicate purchase price of $2,906,000. However, Broker indicated an additional $1,294,000 was paid for property and allocated toward business value, which does not show up on recorded deed. This property was sold as a portfolio sale with 2855-2858 31 Ave., Greeley, CO for a total combined sales price including real property and business value of $11,000,000, per Broker, appraiser files and reviewed sales contract. WALTER LTE-R & ASSOCIATES Real Estate Valuations & Analysis Sales Comparison Approach Page 69 Comparable Sale Location Information Property Name: Property Type: Location/Address: Parcel ID Sale Information Building Area: Units: Sale Price: Price per square foot: Price per unit: Sale Date: Grantor: Grantee: ReceptionNumber: Year Built: Site Size: Land to Building Ratio: Condition/Quality: Financial Information PI EGI Expenses Cap Rate Confirmation: Remarks: WALTER & _ASSOCIATES Real Estate Valuations & Analysis Crossroads Self -Storage Self -Storage 4270 Highland Meadows Pkwy., Windsor, CO 86354-12-001 45,949 square Feet 275 $3,100,000 $67447 $11,273 October 20, 2015 Crossroads Enterprises LLC Crossroads Storage LLC 20150070437 2013 3034 Acres/145,839 SF 3.17 to 1 Good/Good Not stated Not stated Not stated 7.1% Greg Walter (Walter & Associates) with Kent Greenwald. (Listing/Selling Broker w/ Insight Invest.) & County Records, Property contains 7 -buildings with 275 units. Property was reported 98% occupied at the time of closing as well as interview on 5/25/16 with onsite manager. Cap rate was provided. by Broker. Sales Comparison Approach Page 70 Comparable Sale 4 Location Informatlo ii Property Name: Property Type: Location/Address: Parcel ID Sale Information Building Area: Units: Safe Price: Price per square foot: Price per unit: Sale Date: Grantor: Grantee: Reception Number: Year Built: Site Size: Land to Building Ratio: Condition/Quality: Financial Information PGI BI Expenses Cap Rate Confirmation: Remarks: W A LT ER ek ASSOCIATES Real Estate Valuations & Analysis Johnson DriveSelf-Storage Self Storage 255 Johnson Drive, Fort Collins, CO 97231-06-017 32,020 square Feet 250 2,100,000 $65.58 8,490 February 23, 2016 Fort Collins Associates LP 255 Johnson Storage LLC 20160013348 1959 (office) / 1985 (storage units) 222 Acres/96,938 F 303 to 1 Average/Average Not stated Not stated 31% 7.0% Greg Walter (Walter & Associates) with Tom Stine (Grantee), CoStar & County Records. Property contains 6 -buildings with 250 units. Property was reported 99% occupied at the time of closing as well as interview on 5/25/16 with owner & on -site manager. Cap rate and operating expenses were provided by Grantee. Sales Comparison Approach Page 71 Comparable Sale - (3 -Portfolio Storage Facilities) !WALTER ASSOCIATES Real Estate Valuations & Analysis 7271-7273 Kearney St. , Commerce City 6345 E 78th Ave., Commerce City 443 Laredo St., Aurora Sales Comparison Approach Page 72 Location/Address 443 Laredo St., Aurora 7271-7273 Kearney St., Commerce City 6345 E 78th Ave., Commerce City Total Sale information Total Gross Building Area: Total Units: Sale Price: Price per square foot: Price per unit: Sale Date: Grantor: Grantee: Reception Number: Year built: Land to Building Ratio: Condition/Quality: Financial Information PGI BGI Expenses Cap Rate Confirmation: Remarks: Comparable Sale 5 as Continued Location information Property Name: Property Type: Best Bargain Storage & Buckley Bargain Storage Self -Storage S -Parcel Portfolio Pending Safe Net Rentable Number of Gross SF SF Units 109,586 421650 103,060 Year Built 1984/Rem. 2014 1927/1996/1997 1984 Acres 2.678 2.000 7.148 109,586 P/103,060 Net Rentable Area 723 $9,900,000 $90.34 $13,692 June I, 2017 Buckley Bargain Storage LLC & Best Bargain Storage LLC GVS Colorado Holdings I LLC 2017000047826 - $5,000,000 & D706 Page 2399 - $4,900,000 1927 (office), 1996/1997 (storage units) 2.84 to 1 Average/Average Not stated Not stated Not stated .80% Greg Walter (Walter & Associates) With Joan Lucas (Broker Wit Joan Lucas RE Services), Costar & County Records. Property contains 723 units that are situated on three separate sites. Occupancy about 963% at the time of listing and a pending cap rate of 6.87%, per Broker's marketing brochure. The property was listed for 13,000,000, 30 DOM, per Joan Lucas (Broker). WALTER ScL ASSOCIATES TE Real Estate Valuations & Analysis Sales Comparison Approach Page 73 Comparable Sales Map Fort Go9lh.s +1 �.. 8ortP►ud r�O�n�lile glite Data use subject to license. t) DeLorme, DeLorme Street Alas LISA® 2015, ter dellorme.,com, WALTER & ASSOCIATES Real Estate Valuations & Analysis rarrerr _ . ..._. Sales Comparison Approach Page 74 Sales Grid Analysis a e, ��; arable Market Saks Adjustment Table E O Phase f - "h. Complete & Stabilized" m Ia U 8 ra t AD sui 4 ,w 4 wad is "' 4 8 Jar tg, r i ilfi U) r. Va ra Ca Sales Comparison Approach WALTER & ASSOCIATES Real Estate Valuations & .Analysis Conditions of Sale and Economic Adjustments The comparable sales detailed on the previous table are the most similar sales available for comparison from the local market. They range in size from 32,020 SF to 109,586 F, and indicate an unadjusted price -per -square foot range from $60.89/SF to $90.34/SF. It is important to note that due to limited sales activity in the immediate subject market area: there is inadequate data to make quantitative adjusted based on paired sales analysis. The concluded quantitative adjusted resented herein are included to identify the relative direction of the required adjustment and are not meant to establish mathematical certainty. I have analyzed the per square foot sales prices with a plus (+) adjustment for those characteristics inferior to the subject, a minus (-) adjustment for those characteristics superior to the subject. Parks Conveyed. All of the comparable sales are confirmed as transfers of the Fee Simple or Leased Fee Interest with no leasehold value; therefore, no adjustments for ro ert p p' y rights were necessary. Financing Terms. All of the sales involved cash or terms equal to cash. No adjustments were necessary. Conditions of Sale. All of the comparable sales are confirmed as arm's -length market transactions with no special conditions, motivations, or undue stimulus affecting the sales price; no adjustments were needed for conditions of sale. Expenditures After the Sale. All comparable sales are confirmed as reasonably fit for occupation with no undue additional costs; no adjustments were needed for expenditures after sale. Market Conditions , Date of Sale) - Since about mid -year 2012 the Northern Colorado commercial and industrial markets experienced a vibrant growth cycle including several new developments, increasing rents, decreasing capitalization rates, and increasing land and improved values. Conversations with several brokers active in the market and our experience the market for industrial space also began to improve in mid -2012. Per Xceligenf rd Quarter 2017 Market Study reported industrial rental rates within Northern Colorado's overall sector have moderately increased within the past year from $9.22/SF - 3rd Quarter 2016 to 2018 YTD $9.64/SF. Therefore, due to industrial market statistics in overall Northern Colorado indicating relatively low vacancy and slight upward trends to stabilizing rents; no adjustments were made for market conditions. In addition, three sales used within this report have occurred in 2017, one in 2016 remaining in 2015. It also should be noted that the oldest 2015 sale price per square feet is 2nd highest among data set. Therefore, no adjustments for market conditions were warranted. WALTER & ASSOCI ATES Real Estate Valuations & Analysis Sales Comparison Approach Page 76 Physical Adjustments Location/Visibility,Location can be rated by many different ferent criteria including access, traffic counts, visibility, rents and land values in the area, income and home prices, neighboring development, and/or significant draws nearby. Although • �' some of these factors can be quantified, typically applying location adjustments are a combination } � of all �►f`the factors asjudgment call from the appraiser. Based onquantified and qualified subject, as a analysis, the ��.�� eet, comparable sales, and adjustments are presented and described as follows • Sales I & 2 are located in central to west Greeley with t good exposure and considered slightly superior to subject, requiring downward � '� g a adjustment. Sale 3 i s located in Windsor at the Crossroads exit near 1-25, requiring a down'ard adjustment. • � �ne.nt. Sale 4 is located in Fort Collins near CSU, which is considered superior indicating a downward adjustment Sale 5 is located in Aurora Commerce City, which is considered to be slightly � superior in a denser locale requiring a downward adjustment. Quality.The construction class and.quality rating ofwill buildings Deli have an effect on value. The subject overall quality is considered to be an average to good quality minimal climate control and mostly non -climate unit facility. Sales 1 & 3 are noneclimate controlled single story drive -up units and considered to be average or average to good in regard to quality, requiring no adjustment. Sale 2's mostly climate -controlled facility has been recently updated indicated a lower va lue for subject. Sale 4 & 5's averagequality non -climate -controlled facilities are older in age and considered to be inferior regarding ' ty suggesting an upward adjustment from these value indicators. Agt/Condiiion. The condition, construction class, and � • overall condition rating of buildings will have an effect on value. The subject is a metal frame • � e�nstru.cted. facility and eonsidered to be in "new construction" overall condition "as complete". All sales are considered to have a higher overall effe ctive age at varying degrees as compared to subject, warranting upward pressure from these indicators. Configuration/Functional Utility. All sales are similar '. in regard to functional utility as compared to the subject, therefore, no adjustment is required. Size. Generally, there is typically an inverse relationship • s�iip between size and. price per square ,re foot all other factors being equal. � ' The subject and comparable sales as well as their corresponding adjustments are described as follows: Sales 3 & 4 are the smallest in size and square price per feet is among the mid portion of rane. Demonstrating no correlation between size and price per square feet. Functional Utility or Unit Mix. All sales with exception 100% p en of Sale are non -climate -controlled wilts, while a small percentage (5.07%) of the subject bj ect is climate controlled indicating slight upward pressure on price. Sale 2's mostly climate -controlled t units warrant denard pressure from this indicator. WALTER & ASSOCIATES Real Estate Valuations & Analysis Sales Comparison Approach Page 77 Land to Bufidia .I Ratio. All sales have relatively higher land to building ratios as compared to subject, warranting slight downward pressure from these indicators. Comparable Sales Analysis sis Comparable 1 is the sale of a non -climate controlled self -storage facility that sold on June 16, 2017 for $6,800,000, which equates to $62.62 per square foot. After qualitative adjustments this comparable value indicator suggests a similar price per square foot for the subject. Comparable 2 is the sale of a mostly climate controlled self -storage facility that sold on June 16, 2017 for $4,200,000, which equates to $60.89 per square foot. After qualitative adjustments this comparable value indicator suggests a slightly lower price per square foot for the subject. Comparable 3 is the sale of a non -climate controlled self -storage facility that sold on October 20, 2015 for ,100,000, which equates to $67.47 per square foot. After qualitative adjustments this comparable value indicator suggests a similar price per square foot for the subject. Comparable 4 is the sale of a non -climate controlled self -storage facility that sold on February 23, 2016 for $2,100,000, which equates to $65.58 per square foot. After qualitative adjustments � this comparable value indicator suggests a higher price per square foot for the subject. Comparable 5 is the sale of 3 -separate non -climate controlled self -storage facilities that sold on June 1, 2017 for $9,900,000, which equates to $90.34 per square foot. After qualitative adjustments this comparable suggests a lower price per square foot for the subject. WALTER 461. ASSOCIATES Real Estate Valuations & Analysis Sales Comparison Approach Page 78 Sales Comparison Summary All sales are located within Greeley, Windsor, Fort Collins as well as the Denver Metro Market areas and would appeal to similar buyers. The sales were not adjusted quantitatively for market conditions that range from 6O.8 /SF to $90.34/SF. The self -storage value indicators suggest a slightly wider sales price per square feet range than typical or preferred. However, the self -storage facility sales used are stillconsidered to be good value indicators for the subject. Sales 1 &2, which transferred combined as a portfolio sale are located the closest in proximity to the subject's Greeley Market area and are given most weight due to similar quality and attributes as the subject. All comparables with exception of Sale 2 are 100% non -climate controlled, while the subject has only 5.07% climate -controlled units of total facility, indicating minimum impact on value. Similar to slightly higher values are suggested from these indicators. Sales 3 & 4 are given considerable weight due to location in Northern Colorado Market area and having similar attributes as subject. In contrast, Sales 5 is given least weight due to superior location within the Denver Metro market, suggesting a lower value for the subject. However, Comparable 5 is a supportive value indicator demonstrating recent market activity of similar type properties along the Front Range. The difference in the RV canopy covered units and remainder ofunits is an enclosed wall perimeter as well as concrete flooring. An investor looking at the overall facility on a price per SF basis would likely only discount the covered parking minimally or not as all when comparing to remainder of typical enclosed units when determining a price per square feet value for facility. Therefore, the subject's 16,875 gross square feet canopy unit structure will be included in the subject's overall gross square feet in forming an opinion of value. In addition, giving the subject's location within East Greeley near the Hwy. 34 Bypass/Hwy. 85 Bypass interchange with a unit make-up of 94.93% non -climate -controlled units, and new construction, it is reasonable that an indicated value be most similar to Sales 1 thru 4's (Northern Colorado Market area) range of market values. Based on this data and the analyses it is my opinion that a value of $63 per square foot is appropriate for the 'as complete & stabilized' facility. Building Size Per SF Value 96,175 SF $63.00 Rounded To Indicated Value $6,059,025 $6,060,000 Market Value via Sales Comparison Approach "As Complete & Stabilized" $6,060,000 WALTER & ASSOCIATES Real Estate Valuations & Analysis Sales Comparison Approach Page 79 Income Approach The income approach analyzes the investment characteristics of an income producin.g pro ert and the benefits received by the owner of such a property. This approach can be processed via a direct capitalization technique or a discounted cash flow analysis, For mini -storage facilities "as complete & stabilized" a direct capitalization analysis is most appropriate. Whereas a short-term discounted cash flow is most appropriate and will be used for the "as complete" opinion of value, with an added direct capitalization analysis for test of reasonableness. Direct Capitalization Approach The income capitalization approach develops indications of value based on actual or anticipated income. Rent, vacancy, operating expenses, and capitalization rates are needed to form an opinion of value by the income capitalization approach. The projected income and expenses for the subject property are based on information from the subject and from properties of similar age, size, and condition. The market and actual information is used to develop an estimate of current and future income the subject property can. produce. A capitalization rate is then applied to the net operating pp p' g income to develop an indicated value of the subject property. The income capitalization approach involves following steps: • Consider the subject current leases; Research and analyze market leases; • Develop an opinion of Fair Market (economic) Rent; • Estimate expenses to calculate the Net Operating Income; • Develop market capitalization rate; • Divide the net operating income by the capitalization rate for an indication of value for the subject. Estimation of Potential Gross Income The subject property units will be 100% leased on a short-term basis. Therefore, as a check of lease rates a market survey of similar self -storage type properties in the subject market area was made. Ofthe surveyed self -storage properties, the following are the most directly competitive with the subject property and are detailed as follows: WALTER 4Xr ASSOCIATES Income Approach Real Estate Valuations & Analysis Page 80 Comparable Lease 1— Gateway elf- torage, 2600 36th Ave., Greeley Comparable Lease — Safe & Secure Storage, 1015 rd St., Greeley mostAGE I; ill on I IllllfllI litI uil IMMO OE PN# WALTER & ASSOCIATES Real Estate Valuations & Analysis Income Approach Page 81 Comparable Lease 3 -- Parkview Self-Storage,22nd St., Greeley Comparable Lease 4 — Store it Wise - -�t Self-Storage2880 1 Ave., Greeley .Nc1.44 ITER et ----ASSOCIATES Income Approach Real Estate. Valuations & Analysis Page 82 Comparable Lease 5 — Greeley Self -Storage, 505 318t St., Greeley Comparable Lease 6 — 9th St. Self -Storage, 2450 29th sit., Greeley WALTER ASSOCIATES Real Estate Valuations & Analysis Income Approach Page 83 flDELORME Data use subject to license. DeLarrne. DeLorme Street Atlas USA! 2015. wiwitdelornne.xcm Lease ComparableM MN (IF E) 0 t %s Data Zoom 12-5 1 mi WALTER & ASSOCIATES Real Estate Valuations & Analysis Income Approach Page 84 tr 0 tel C , txp 0 a 8 Ira Am U, S a l f7lRemr_ 2014120 15 0 t k 0) w 0 Ire 0 0 a k 9 r� zi cuc 60 '4 till w f45 4 P 0 CO 8 T a ito OIL <af a r C, 2 e e csito T tol in 0 .2 i 4 I S tnt X 0 0 X 0 x 0 0 r T CSI tK xxxx T r *- r w U - CI 0 C 8 x os a 1 hO 0 Income Approach , Ili c CI 023 Cin c .�i Ii Market Rent Estimate Discussion • Rent 1 - is located northwest within 3.5 miles of the subject, just west off of 35th Avenue in a similar dense locale with numerous nearby apartments„ �' s„ commercial and residential dwellings. This rent comparable has a superior office indicating a lower price per unit for the subject. The current 1st Qtr. 20 1 occupancy � p y rate was not reported. However, interviews with onsite manager in 2017 indicated occupancy at about 98%. Overall �� ail quality of the is considered similar to the subject due to unit mix including non -climate as well as climate control, However, Rental 1 brackets the upper end. of the e price range within the immediate market area.. For these reasons Rental. 1 is given weight • � �n projecting market rent for the subject units. Rent 2 l" is located northwest within 2.90 miles of the • subject, west off of �` 85 in a less • dense locale within an older industrial as well as residential neighberhood, Minimal commercial facilities exist in this immediate location. This rent comparable facility is eonsidered inferior indicating a higher per price u�t for the subject The facility has average exposure/visibility from 3rd street which is a secondary roadway. Safe Secure Storage is most similar to the subject's covered parking units. • Rent 3 : is located north within 0.75 mile from suhe�� .� et at the southeast corner oft' Ave. and 22"d street. Facility has a higher overall effecti• ve age indicating a slightly higher overall rent subject. However, for the it has, a slightly higher dense locale off B 22 Street suggesting a lower rent for the subject. The current l st tr. 20i8 occupancy rate was not reported. However, interviews with onsite �' manager in 2017 indicated occupancy at about 99%. Overall the facility quality of facility is considered slightly inferior due to unit mix including 100% non -climate control unit as compared to a portion of sub' it's temperature -controlled. ,� units. This facility is the most similar in comparison to subject's non -climate -controlled units in E Greeley, suggesting similar rental rates for subject. • Rent 4 — is located within a 3.0 mile southwest of the su bject e+et along the west side of35th Ave. in Evans as well as 2880 31' St., Greeley. The on -site site Baer reported 1 vacancy at cc�vere�. RV pa�r.�in,, axes. along 31st street. Overallquality of the facility is considered similar to the subject due to unit mix including both non -climate climate well as control. For these reasons Rental 4 is given weight in projecting market rent for the subject climate -controlled units as well as covered RV storage. l� WALTER & ASSOCIATES Real Estate Valuation &Analysis Income Approach Page 86 • Rent 5 is located southwest within. O65 mile of subject and has a higher effective age indicating a higher rent for the subject. Overall quality of the facility is considered inferior to the subject in regard to overall quality as well as partially gravel paved site. The current 2018 occupancy rate was not reported. However, interviews with onsite manager in 2017 indicated occupancy at about 95%. In addition, this rent indicator has a similar dense locale off B 31st Street in SE Greeley, suggesting a similar rent for the subject. Parking price for this facility is $45 per space, which is a gravel unmarked space, suggesting subject's "as is" parking areas to be in line with market rents. • Rent 6 — is located west within 235 mile of subject and has a slightly higher effective age indicating a higher rent for the subject. Overall quality of the mostly climate -controlled facility is considered superior to the subject as well as its apartment/office management space. The current occupancy rate was reported at 92.5% by owner/manager. In addition, this rent indicator has a denser locale off 29th Street in S Greeley, suggesting a lower rent for the subject. Marked asphalt uncovered parking price for this facility is $99 per space, suggesting a higher rent for subject's "as complete" covered parking. Based on consideration of the subject's projected rents and its competitive market position within the properties of the rental survey, a potential investor would consider the following rents to be at prevailing market terms. Therefore, the subject's potential gross income on the following page is indicated as follows: LTER & ASSOCIATES Real Estate Valuation & Analysis Income Approach Page 87 Potential Gross Income - Non -Climate Controlled E Subject (Climate - Controlled) "As Stabilized" I Non -Temperature Controlled Self Storage Units (Unit Mix) Size 10 x15 10x20 Total Units 41 400 Projected Subject $ Rent per Unit Projected PGI per Month $2,255 $3,990 x12 Months $6,840 12 $22,785 $13,600 "As Stabilized" / Temperature Controlled Self Storage Units 1 (Unit Mix) Size Total Units A -CC 5x5 B -CC 5x10 C -CC 10 x10 D -CC 10x20 1 5 12 17 35 Potential Gross Income - Climate Controlled Subject (Canopy Parking) CP (Unit Mix} Size 11 x45 Projected Subject $ Rent per Unit Projected Pc per Month $45 $65 $45 $325 $100 $165 $1,200 $2,805 Projected PGI $27,060 $47,880 $82, 080 $273,420 $163,200 $73260 $666,900 X12 Months Projected PG1 12 12 $540 $3,900 12 $14,400 12.E $52,500 "As Stabilized" / Covered RV Parking Total Units 34 Projected Subject $ Rent per Unit $125 Projected PGI X 12 per Month Months $4,250 f 12 Potential Gross Income - Non -Climate Controlled Potential Gross Income - Climate Controlled Potential Gross Income - RV Covered Parking 'Total Potential Gross Income Projected PGI $51,000 $666,900 $52,500 $51,000 $770,400 WALTER TER ASSOCIATES Real Estate Valuation & Analysis Income Approach Page 88 Vacancy, Collection Loss, and Operating Expenses Vacancy & Collection Loss Both the investor and the appraiser areprimarily interested in the annual revenue and income property is likely to produce over a specified period of time. They realize , that even in a strong market there will be some income loss for turnover, failure to pay rent, or late rent payment. Typically, self -storage facilities have stabilized occupancy wi th �'' ' th minimal vacancy. Interviews with manager/owners reported strong occupancy trends within the subject self -storage sector of the Greeley market area at the time of interview ranging from 0% to 10%. However, each on -site manager interviewed stated occupancies January/Februaryis a slow time of the year tha t are increase to in March. Given Greeley's continued growth within the Northern Colorado Sector, a lower rate could be] usti fi+ed. however, given consideration to frictional vacancy typically associated with self -storage facilities, higher .� _... �, . a higher rate at 10.0 �� will be applied for vacancy. Expense Estimate The second step in processing the Income Approach isestimating p'p' that of the typical property expenses associated ed with the rental income. The subject's market rent has been estimated on a gross basis with the owner paying all expenses. In order to estimate the typical expenses for the subject, a study .l � was made of comparable properties in the subject market area. These nine self -storage facilities are considered too reflect the expenses for the subject properties projected operational budget. The following table shows the historical operating records comparable of these eornp able self -storage facilities and the typical p percentage ge of each expense as reported. Itemized expenses include e cost of management, insurance, maintenance, taxes, utilities, trash removal, advertising, landscaping/snow removal and supplies. Expense comparables are as follows: Conipatable.evenees Ratios LoeaonfAddre.s. _Expenseatitio. 1172 Automation Way, Windsor 225 Johnson Drive, Fort Collins 9009 Gale BI +d.., Thornton 5900 S Gun n lu b Rd., 316 Basher Drive, Johnstown 2855-2858 31st Ave., Greeley, , 2450 29th Street, Greeley 760 E Garden Dr., Windsor 1405 32nd St., Evans 30% 31% 35% 35% 35% 38% 30% to 40% 260 250 521 338 313 858 441 552 471 WALT t T. It & ASSOCIATES E Real Estate Valuation & Analysis Income Approach Page 89 The subject expenses were not projected by owner; therefore, I have relied on these expenses in order to calculate the subject net operating income. Taxes on the subject are calculated on a lower mill rate of 83.275, indicating a lower expense ratio for the subject. In addition, only 5.07% of facility is climate -controlled, which also indicates a lower expense ratio. Therefore, based on these expense ratios we have projected the subject expenses at 34.00%, which falls within the range and considered reasonable. Now that the net operating income has been estimated, the next step in the Income Approach is capitalizing the net income into a present value indication. Capitalization Process Capitalization is defined as: "the method used in the income capitalization approach to convert a single year's income into a value conclusion". In real estate appraising, it usually takes the form of discounting. Page 513, The Appraisal of Real Estate (Eleventh Edition), published by the Appraisal Institute. Overall Capitalization late An overall capitalization rate is "a ratio of one year's net operating income provided by an asset to the value of the asset; used to convert income into value in the application of the income capitalization approach". Page 31, The Dictionary of Real Estate Appraisal (Sixth Edition), published by the Appraisal Institute. Capitalization rates were derived from two sources including: �* Investor surveys — CoStar, Price Waterhouse Cooper & Burbach & Associates ■ Northern. Colorado self -storage sales Regional Surveys The following table shows the current industrial and self -storage capitalization rates from the various surveys: ?�iR�ii aIi 177��!!i�i� II��QS n . Rates '` In'� i I_ ,,,��yya i■■#T "SS;ttL , 200 tote High Low, AverAge, CoStar (NOCO O - Self Storage - 2015 t ru 2017 tats) Burbach & Associates (Summer) Price Waterhouse Cooper (2nd Qtr. 2017 Stats) 6.8% 7.5% 7.2% 9.0% 5.0% 7.0% 6.9% 4.0% 5.3% Averages 6.5% WALTER & ASSOCIATES Real Estate Valuation & Analysis Income Approach Page 90 The table on previous page shows an average capitalization rate of 5.3% to 7.2% for industrial buildings and self -storage facilities. The Price Waters Coopers surveys research larger investment grade developments, which are not as applicable to the subject property. The Burbach and Associates survey with an average of 7.0% (Industrial) is primarily the Denver Metropolitan area; however, the capitalization rates typically are in line with the Northern Colorado Area representing Larimer/Weld. County industrial market. The Costar survey is for Northern Colorado and is an adequate indicator for the subject area self -storage industrial market statistics. CoStar is a sale database that tracks local and national sales and rents. Based on a narrowed search of self -storage sales in Northern Colorado and Metro Denver current capitalization rates are shown as follows: Lisa _ n! Setf- en t+crag:e Corriparable Capitalization Sale Date Units Cap Rate 4270 Highland Meadows Pkwy., Windsor 10/20/2015 275 7.10% 255 Johnson Dr., Fort Collins 250 7.00% 2/23/2018 2450 29th t, „ Greeley 6/16/2017 441 7.50% 2855-2858 81st Ave. , Greeley 6/16/2017 858 7.50% 443 Laredo 6/112017 723 6.80% St, 7271 Kearney St. & 6345 E 78th Am, Commerce City The previous capitalization rates were extracted from the Northern Colorado & Denver Metro industrial self -storage market ranges from 6.80% to 7.50%. The Denver Metro area cap rates tended to be lower than Northern Colorado market area. In reconciling a capitalization rate, consideration was also given to the subject's Greeley location that typically generates lower rental rates than neighboring Fort Collins or Windsor market areas. Based on these indications most weight has been placed on capitalization ranges from actual market sales in, Northern Colorado. Given the subject's East Greeley location as well as new construction, recent interest rate increase from fed and higher interest rates projected in near future, a slightly more conservative rate of 7.50% will be used and applied to estimate the net income steam. WALTER & ASSOCIATES Real Estate Valuation & Analysis Income Approach Page 91 The following stabilized reconstructed operating statement is derived from the preceding income and expense estimates: RECONSTRUCTED OPERATING ST TE 'iE T "As Complete & Stabilized" Total Potential Income Vacancy & Collection Loss Effective Income 10.0% Total Operating Expenses Year 1 Net Operating Income Capitalized @ 7.50% Indicated Value by Income Approach Rounded to Nearest 10K This is beibre income tax, depreciation„ awionfr and debt service caskflow, w. $7'x,040 34.00% $779,400 $693,360 235,742 457, 18 $6,101,568 $6,100,000 Market Value via Income Approach "As Coin p ete & Stabilized" SALTER tv ASSOCIATE Real Estate Valuation & Analysis $6,100,000 Income Approach Page 92 "As Complete" Discussion Phase I Now that the "As Complete & Stabilized" value has been estimated we will discount the value in order to recognize the estimated time to achieve stabilized occupancy. As discussed earlier in the rental section we interviewed managers/owners of four self -storage facilities in the subject Greeley market area that reported current vacancies ranging from 90% to 99%. Also, it was noted that each onsite facility manager stated January/February were the slowest time of the year that they expected to increase in March/April 2018. Secure Space self -storage was built in 2017 and is a 225 -unit non -climate -controlled Fort Collins facility, which reported a 15% occupancy rate after being open for about 3.5 months, per site manager. The site manager expected to be at stabilized occupancy within 2 years or less. In addition, another relatively recent project came online within Fort Collins is SecurCare Self -Storage, which is a 424 - unit climate -controlled facility scheduled to open in February 2017. The onsite manager of this facility also expects to be at a stabilized occupancy within 2 years or less. Both of these self -storage units are northwest of subject within Fort Collins. An older stabilized Self -Storage in Loveland at Centerra opened November 2015 and achieved 85% occupancy in 8 months, per on site manager interviewed on 6/1/2016. The self -storage industry is faring well. It is difficult to predict how long it will take for the property to stabilize, but assuming active and competent management is willing to accept a market rental rate, 30 months is a reasonable projection. Giving consideration to projected population growth in the Greeley market area, strong occupancy levels of existing self -storage facilities as well as the competitors in the Greeley market area, an absorption period of 2.5 years is reasonable. As indicated on table below expenses to reach stabilized occupancy total $808,920. It is unreasonable to assume that an investor would purchase a vacant building without some anticipated profit. A 10% entrepreneurial incentive will also be applied to the "at stabilized occupancy" value due to the risk involved. Total cost of absorption is projected at 1,416,420. Occupancy Calculations (2.5 Year Stabilization) Year 1 Year 2 Year 3 Occupancy Yearly % Lease Up 35% 70% Occupancy Yearly Income $269,640 $539,280 Vacant (Rent Loss °h 65% 30% Rent Loss (25 Year Lease Up) $500,760 $231,120 Entrepreneurial Profit (10%) of opinion of Value Total Lease Up Costs to Stabilization Indicated Value "As Stabilized Value" Less Lease Up Costs Indicated Value "As Complete" 90% $693,360 10% $77,040 $808,920 $607,500 $1,416,420 $6,075,000 14416,420 $4,658,580 WALTER & r SSOCI AT ES Real Estate Valuation & Analysis "As Complete" Discussion Page 93 In addition, interviews with brokers specializing in the self -storage industry stated that selling the facilities on an 'as complete' basis with a Certificate of Occupancy is becoming more common. Adam Schlosser a broker specializing nationally in self -storage facilities with Marcus Millichap, reported a standardized practice within in the industry to determine 'as complete' value is adding 150-200 basis points to the capitalization rate. This format is applied as a test of reasonableness in the following chart. We've applied 200 basis points to the 'as complete & stabilized' cap rate of 7.50%, resulting in an 9.50% cap rate, which is on the following page: fiFEC ST.UCj"E l .r PERM' STATE "As Complete" Total Potential Income Vacancy & Collection Loss 10.0% Effective Income Total Operating Expenses Year 1 Net Operating Income Capitalize d Indicated value by Income Approach 9.50% $77,040 34.00% Rounded Nearest 10K This is before income lax, depreciation, and debt service cash flow. $770,400 $693,360 $235,742 $457,618 $4,817,027 4,820,001) After considering each method to determine the prospective "as complete" market value for the subject property, as of June 1, 2019, allowing 12 months to construct the inwrovements, is: "As Comptete•" Market value via Interne Approach $4,750,000 '° ALTER & ASSOCIATES Real Estate Valuation &Analysis "As Complete" Discussion Page 94 "As Is" Discussion — Phase I The "As Complete & Stabilized" as well as the "As Complete" values have been estimated. Now we will form the "As Is" opinion of value of subject site with improvements using land value from the Cost Approach, and Income Approach for subject's existing 16,875 SF — 34 Unit canopy RV parking building as well as outdoor parking spaces. As discussed in detail within the Cost Approach, opinion of land value was $1.20,000/Acre or $587,160 or $585,000 (R) for the 4.893 Acre subject site. As mentioned, the subject is currently improved with a 16,875 SF canopy RV storage building containing (34) - 11 x 45 storage units. Each unit is currently offered for rent at 12 /month, which is considered at market and used to calculate potential gross income. "As is" / RV -Canopy Covered Parking Storage Units Subject (RV- Canopy Covered) (Unft. Size Mix) Total Units ' Projected per Subject Rent Unit Months X 12 Projected PGI Projected per PGI Month G 11 x45 34 I$125 $4,250 12 $51,000 Expenses were calculated using same 34% as previously used in "As Complete & Stabilized" with a 7.50% capitalization rate. Value of improvements described will be calculated using a reconstructed operating statement as follows: RECONSTRUCTED IPER.A. LING STATEMENT "As Stabilized" (34) Canopy Covered Parking Spaces Total Potential Income •- Vacancy & Collection Loss 10.0% Effective Income Total Operating Expenses Year 1 Net Operating Income Capitalized @ 7.50% Indicated Value by Income Approach Rounded to Nearest 10K This is be bre income lax, depreciation, and debt service cash low. $51,000 $45,900 34.00% $15,606 $5,10t? $30,294, 40420 $405,000 WALTER Se ASSOCIATES Real Estate Valuation &Analysis "As fs" Discussion Page 95 As discussed earlier in the rental section we interviewed managers/owners of four self -storage facilities in the subject Greeley market area that reported current vacancies ranging from 0% to 10%. The RV canopy structures were recently completed in April 2018 and presently has several spaces occupied. It is reasonable to expect lease -up to a stabilized occupancy within 1 year. Giving consideration to the strong occupancy levels in the Greeley market area an absorption period of one year is reasonable. Therefore, discounting the $405,000 "AsStabilized" market value by 10% over a 1 -year period results in a $368,182 rounded to $370,000 "As Is" # market value for the 4- Tnit Canopy Covered RY parking structure. Lastly, the subject site 'as is' accommodates 100 outdoor marked parking spaces. However, as of the effective date of this report, only about 15 spaces were leased on a short-term month to month basis. Also, the outdoor parking is considered tempotary until construction starts on the proposed self -storage facility. Current asking rents were considered at market and used in calculating potential gross income. "As is" / U nCovered Parking -- (Uncovered "As Parking). Is" Unit Size Mix) Spaces MI of Projected per Subject Rent Unit Projected per PGI Month Months X 12 Projected Pet j A -UP 11x20 19 $40 I $760 12 _ $91120 B -UP 11 x25 21 $50 $1, 050 12 $12,600 -UP 11 x30 30 $60 $1, 800 12 $21,600 D -UP 11 x40 30 $80 1 $21400 12 $28,800 Total Spaces 100 Total Potential Gross Income - $72,120 WALTER & ASSOCLVIFES Real Estate Valuation & Analysis "As ie Discussion Page 96 As of effective date of this report about 15 spaces were occupied of the 100 parking spaces, indicating an 85% vacancy rate. As mentioned given the outdoor storage space is temporary until construction starts for the proposed self -storage facility, a lease up analysis/discounted cash flow will not be considered. Therefore, a higher or actual vacancy rate of 85% will be used in the following ROS for vacancy and collection loss, which is reasonable. In addition, expenses were estimated using a slightly lower rate of 25% and 7.5% capitalization rate as previously used in "As Complete & Stabilized". The "As Is" Value of outdoor parking spaces will be calculated using a reconstructed operating statement as follows: RECONSTRUCTED OPERATING TTE ENrl. "As Is" (100) Variable size Outdoor/Uncovered Parking Spaces Total Potential Income Vacancy & Collection Loss 85.0% Effective Income Total Operating Expenses 1 e ar 1 Net Operating Income Capitalized ® 7.50% Indicated Value by Income Approach Rounded to Nearest 10K `This is before income tax, depreciation, and debt service cash flow $61,302 $72,120 $10,818 25.00% $2,705 $8,114 S108,180 S110,000 Summary of the 'As Is' overall opinion of Market Value for Phase I is as follows: Canopy Covered Parkin,gtiitd:oor Parking/Land Value Phase I t.. "As is" (34) 11 x 45 Canopy Covered RV Parking Outdoor parking 4.893 Acres of Land Total "As Is" indicated. Value $120,000/Acre $370,000 $110,000 $585,000 $1,065,000 Opinion of Market Value. "As Is" $1,065,000 WACSER ASSOCIATES Real Estate Valuation & Analysis "As Is" Discussion Page 97 Final Reconciliation This section is a summary of the property, the data available, the thought processes, and the applicable approaches to value. A summary of each value conclusion indicates the following: The indicated value of the subject property through the three approaches: Sales Comparison Approach "As Is" Land wl Improvements - Cost Approach ........r .. Sales Comparison Approach "As Complete & Stabilized" - Income Approach "As Complete & Stabilized" - ..... Income Approach "As Complete" - $1,065,000 $5,900,000 $6,060,000 ..,..:4$6,100,000 $4,750,000 The Cost Approach is most useful when the building is new and there is little accrued depreciation involved. Typically, this approach is most useful in valuing properties which are proposed or newer, which is the case for the subject. Therefore, this approach is considered to produce a supportive value indication for the subject property. There was adequate market data that is representative of the market appeal of the subject ro ert . p p � For this reason, the Sales Comparison Approach is considered to produce a supportive value indication for the subject properties real property opinion ofvalue. Overall reliability is considered to be adequate, but an investor being the most probable buyer, secondary emphasis is placed on the sales approach. The Income Capitalization Approach is frequently the most effective means of appraising income producing properties. There was adequate rental data available for self -storage facilities such as the subject in Greeley immediate market area. The surrounding trade area was surveyed for rents, vacancy and cap rate indicators. Expense comparables were limited, however analyzed as available. Overall reliability is considered to be good, and given the nature of the subject, primary emphasis is placed on the income capitalization approach. All approaches indicate a consistent range of value for the "as compete & stabilized" subject property with a variance of only 3,39% between the highest to lowest value conclusions. Based on the analysis presented in this report, it is my opinion that the "As Is" Market Value of the Leased Fee Interest in the subject property "Land with Improvements" as of the May 15, 2018 viewing is as follows: Conclusion of "As Is" Land w/Impravements - �pinion of Market Value (Leased Fee Interest) One Million and Sixty -Five Thousand Dollars $1,065,000 VAITElt & ASSOCIATES Real Estate Valuation 81, Analysis Final Reconciliation Page 98 Based on the analysis presented in this report, it is my opinion that the "As Complete Stabilized" Market Value of the Leased Fee Interest in the subject property "Proposed self - storage storage facility" as of the December 1, 2021 prospective value is as follows: Conclusion of "As Complete & Stabilized" Opinion of Market Value (Leased Fee Interest) Six Million and Seventy -Five Thousand Dollars $6,075,000 Based on the analysis presented in this report, it is my opinion that the "As Complete" Market Value of the Leased Fee Interest in the subject property upon completion but prior to stabilization as of the June 1, 2019 prospective value is as follows: Conclusion of "As Complete" Opinion of Market Value (Leased Fee Interest) Four Million. Seven Hundred and Fifty Thousand Dollars $4,750,000 NOTE: For purposes of this report a hypothetical condition exists whereas the total site 1 2. 35 9 Acres (larger/parent parcel) will be split into a 4.893 Acre -Phase ase I stand-alone site. The remaining 7.469 Acres represents Phase II of overall development and will not be given consideration within this report. In addition: An extraordinary assumption exists due to the subject's valuation being based upon information received both verbally and in documentation f om the developer (Wayne Frelund) and plans designed by R id e mp Engineering and consulting. The subject is currently mostly vacant land with (10 34 -unit covered canopy RV parking storage structure on site. Implied is a twelve- month preparation/construction time, The "as complete" value is estimated as off, June 1, 2019, while the "as stabilized" is projected to stabilize in two and a halfyears or December 1, 2021. The subject's valuation is based upon information received both verbally and in documentation orm from the owner. Per the City ofGreeley, ree ley, the project has an approved USR `Use by Special Review), subject to final approval of drawings. The estimate of Prospective Market Value " A t Completion of onstr ctio of Phase I is specifically condition on the Extraordinary Assumption that the project as described herein receives final approval from the Citii of reele , specifically referencing that the project can be built so long as it does not exceed quantities as specified in the USR, Developer Wayne Frelund has confirmed described proposed improvements as noted throughout this report. Elements provided are expected to be completed per plans and specification in a timely, satisfactory and workmanlike manner. In the event the provided information in regard to workmanship is below industry standards or as reported by owner, it may have an affect or impact on value WALTER & ASSOCIATES Real Estate Valuation & Analysis Final Reconciliation Page 99 Exposure Time and Marketing Time The exposure period is the period of time, prior to the date of value, the subject property is exposed to the market prior to being sold at the appraised value on the date of value. The marketing time is the amount of time required to sell the property after the date of value. The exposure/marketing time is dependent on many factors including: • Professional exposure to the market • Reasonableness of asking price • Health of the overall market • Availability of financing • Competitive strengths of the subject property The following table includes self -storage sales in Northern Colorado & Metro Denver since October 2015: 'elf Storage Sales/Exposure lime - Northern of oradc/De,nve.r Metro, osure Property Address Property 4270 Hi *Nand Meadows Pkwy. Windsor $7,700,000 12/23/201 ► 45$49 120 2855--2858 31st St. Greeley $6,800,C100 6/16/2017 108,600 14 2450 29th St. Greeley $41200t000 6/16/2017 68,972 14 7059 S Kenton St. Centennial $13,5001000 4/13/2016 62,600 35 443 Laredo t./7271 Kearney St. Aurora/Commerce City $91900,600 6/1/2017 109,586 30 9000 Gale Blvd. Thornton $12,609,345 3/1/2016 62,116 30 Low: 14 High: 120 Avv: 41 Source: Costar/Brokers Exposure time from 2008 to 2012 most markets experienced significantly longer exposure and marketing periods due to the soft market and the reduced availability of financing. Over the past three years market indications such as decreasing vacancies, increasing rents, reduced capitalization rates, and larger sales volumes all indicate a healthier market. Minimal exposure times for self -storage facilities have been found in 2018, which is expected to represent a shorter exposure period. The majority of sales occurred within three months or less. In addition, several recent self -storage sales transferred with no broker involved selling by word of mouth to Public REITS. This further illustrates the demand for this property type along Colorado's Front Range. Based on the exposure periods in the above table and the current market conditions, my value conclusion represents a market price achievable in six months or less prior to the effective date of value. Respectfully Submitted, Walter & Associates Cis b Dreg, alter Colorado-CG100039718; December 31, 2019 WALTER ASSOCIATES Real Estate Valuation & Analysis Exposure and Marketing Time Page 100 ADDENDA Qualifications WAITER ASSOCIATES Addenda Real Estate Valuations & Analysis Greg Walter Professional License Colorado Certified General Real Estate Appraiser Presently working toward the MAI designation Phone 970-556-1223 er197@amaiteem EDUCATION Ohio University, Athens Ohio Bachelor of Arts, Organizational Communication; Minor in Business Ohio University, Lancaster, Ohio. - Associates Degree, Business Management PROFESSIONAL EXPERIENCE & EMPLOYMENT • Full time experience in real estate appraising in Colorado, Tennessee, Ohio, Michigan Pennsylvania since 1997. • Walter & Associates (Colorado) • Shannon & Associates (Colorado) Walter & Associates (Tennessee) • The William Fall Group (Ohio) COURSES & SEMINARS Professional Standards of Practice & Code of Ethics Sales Comparison Approach Cost & Income Approaches Appraising Regulatory Issues and the Government Seminar 23rd Annual Real Estate Economic Seminar 310 -Basic Income Approach 330- Apartment Appraising 420 -Ethics & Practices 500 -Advanced Residential Report Writing 510 -Advanced Income & Capitalization 520 -Highest & Best Use 530 -Advanced Cost & Sales 540 -Advanced Report Writing 550 -Advanced Applications 710 -Condemnation Appraising, Principles & Applications 720 -Condemnation Appraising, Advanced Applications CROSS SECTION OF APPRAISAL/ANALYSIS • Industrial Warehouses • Community / Neighborhood Shopping Centers • Service Garages • Schools • Apartment Buildings • Office Buildings • Office Condominium Projects • Condemnation, damages 2/15 — Present 10/12-1/15 10/03 - 07/12 1997 - 2003 Ohio Assoc. of Realtors Ohio Assoc. of Realtors Ohio Assoc. of Realtors Appraisal Institute Appraisal Institute AppraisaI Institute Appraisal Institute Appraisal Institute Appraisal Institute Appraisal Institute Appraisal Institute Appraisal Institute AppraisaI Institute Appraisal Institute Appraisal Institute Appraisal Institute WORK Special Purpose Properties Retail Strips Commercial/industrial Land Residential Developments Hotels Bank Buildings Airport Hangers Agricultural Land with Water Rights %VA LTE14 ASSOCIATES Addenda Real Estate Valuations & Analysis U ust C C' "CC sessmit 1' 13 La o ® th 4._ O taLi O 148 Lai 4.•11 10 sea rs41, t I) C U, Cs co a ti ,E Board of Real Estate Appraisers co cso co cosi If) r cC z ta c et 0 to visi J r 4 O t U Marcia Waters S CP g p- 0 L 0 i U 0 a .71 For the most up to date information regarding this credentia C C CFI ra ct C; < cen CarD g de . ro id C Engagement Letter WALTER ASSOCIATES Addenda Real Estate Valuations & Analysis COMMERCIAL APPRAISAL ENGAGEMENT LETTER This letter stun I !.ervn as your Instructions to perform an applaisid on the below referenced property low FARMERS BANK am your cheat At a minimum, the appraisal must be performed ir'i accordance with the current edition of Uniform Standards of Professional Appraisal Practice (LJSPA P) as promulgated by the Appraisal surf ndards Board of the Appcals al ry undation , DATE ORDERED BY DUE DATE June 21,, 2019 Bev Ziemer, Farmers Bank June 29, 2018 APPRAISER COMPANY Greg Walter Waiter & Associates Thr a h0W2 a ppemsi' wit) be the priemplai apprar. ce r-. must be satisfactory to the Bank. REPORT TYPE Complete Summary APPROACHES REQUESTED Income, Sales, and Cost f APPRAI SAL FEE Si, 700 if the appraiser requires proles -tone/ as51510nce from others, those individuals PROPERTY ADDRESS TO BE APPRAISED PARCEL/LEGAL DESCRIPTION SUBJECT COUP REAL ESTATE DESCRIPTION PROPERTY RIGHTS 108E, 284 St., Greeley, CO. 4 Lot 211 Uter Farm Minor Subdivision 3rd Replat Weld Proposed mini -storage facility Fee Simple and Leased Fee NAME OF PROPERTY OWNERS 2Y Avenue Partners, tic CONTACT PERSON / PHONE COMMENTS REPORT & INVOICE ATTENTION Wayne Fr el a n d 970-420-9048 Ac is value, A5 completer and :its -Stabilized Fa►rmPrs Rank Acteation: Bev Ziernpr l3 5 Lemav, Fort Collins, co. 80524 a s ignrng below, you cc rta fyr and acknowledge that you have no direct or indirect i ri t€t e s t, financial or otherwise, in the property or transaction, The app a Ito I welpy no t asS on a requested valuator', or compensation. conditioned upwm the approval of a loan The pu rpoie t f the a ppraii al a ssiEn merit includes all al the following! la) basis for evaluation o1 a loan request; l bl basis, for making investment d'ecisioi m. (c) bask for establishing or adjusting took value: or fd) t isk management purposes Thlaii report rrra y by distributed by the Bank, in its entirety,, TO sc+ lect+ed third name%, in(lL rd JnE bet not limited to, the owner of the property. penalty Clause: For everyday after the Due Date that the appraisal is late, so tong as client hat provided information available to it in a timely manner to appralwr, the fee due the appraiser shall be reduced by $50.00 per day. Please sign below acki Low Ietig f rig ritteeipt of the let i er ;An} agreement to r I s terms and conditions, Return the s IMr Pd anginal inter to the undersigned, $/ 44 have r*wiewett the engagement letter and hereby certify that ail reports will comply with uSPA P's generally accepted standards of practice. Ire k u n dcrrst p ad that the ervgageme n t letter and all resulting rparts and documentation are proprietary in nature ,and will be held in um col Firt��rrh,,e APPRAISER SIGNATURE DATE WALTER &ASSOCIATES Addenda Real Estate Valuations & Analysis Zoning Regulations, per City of Greeley (I-M-lndustrial Medium Intensity District) WALTER ASSOCIATES Addenda Real Estate Valuations & Analysis 3/15/201B Greeley, CO rvlu&cipal Code 18.38.090 - industrial Districts (I -L Low Intensity; i-( Medium Intensity; I -H High Intensity) These districts are intended for areas containing or planned for low-, medium - and high -intensity industrial uses, These districts provide for the development and protection of industrial uses along with commercial support uses. Such uses may be found along arterial streets and highways and rail corridors, Also refer to the Table of Principal Land Uses for the I -L, I -f l and I -H Districts in Chapter 18.30 for land uses. Industrial District Development Standards Category Base Standards Base Standard Options A. Land Use Institutional, commercial, industrial allowed uses B. Lot Size No minimum (may (may differ for differ for hillside hillside areas - areas) see Chapter 18.50) Institutional, commercial, industrial allowed uses No minimum (may differ for hillside areas) I fl/I/Redevelop (See Chapter 18.46 and Chapter 18 34 • Article V/I) Institutional, commercial, industrial allowed uses No minimum (may differ for hillside areas) fir ` LT R_ c ASSOCINIES Real Estate Valuations & Analysis Addenda 3/15i2018 C. Street Width (local industrial streets) D. Open Space - % of site E. Sidewalks local streets) F. Parking G. Landscaping, Buffering and Perimeter Treatment H. Lot Coverage - max. Greeley, CO Municipal Cade 37' pavement, 50' r- Base, Option o -w 10 or AC Private (on lot): 10% 5' wide attached, both sides Private (on lot): 10% or Option 16 Base, AC See Chapter 18442 See Chapter 18.42 See Chapter 18.44 See Chapter lea 90% 9Q% Match existing street Private (on lot): 10%, Option 17 or AC* Match existing sidewalk See Chapter 18A2 an Chapter 18..340 Article II See Chapter 18,44 90%r Option 17 or AC I 2/3 `ALTER & ASSOCIATES Real Estate Valuations & Analysis Addenda 3/15/2018 I. Building, Structure Setbacks (See Chapter 18.52 for access, buildings & structures) J1 Building, Structure Height Greeley, CO Municipal Code 25' for all sides Base, Option Basel Option 4 or adjacent to streets, 4 or AC* AC * interior rear and interior side based on Building Code requirements 40' I -L, I- 11; 60' I -H Base, Option 5,6orAC* Base, Option 5 or 6 or AC * Alternative Compliance (AC) See Section 18.38.140, (Ord, 22, 2010 §1; Ord. 04, 2008 §5: Ord. 65, 2002 §1; Ord. 46, 1999 1: Ord. 27, 1998 §1) WALTER ASSOCIATES Real Estate Valuations & Analysis Addenda Cost Sheets (Marshall & Swift) & Limited Costs provided by Developer .WALTER i' ' ASSOCIATES Addenda Real Estate Valuations & Analysis CALCULATOR METHOD chi .405 Cam kit co U, LU to z 0 I LU et z tia A.N. i T ih 355.21 - 2 36 33.00 j Good •Stucco, siding or brick v+erueer, Sub dvided cubicles, good security Electrical Pullets and righting to None many dear _ partitions, #flit* -apartment each space,, minimum pturnbring Average VVood erne and stucco or wood Subdivided into cubicles, mined Adequate electrical service per None - i� - sines, unfinished slab, small office space, minimum water Low Mast Low-cost stun or siding, lost Subri vkled into tinge cubicles, tight Minimum electrical service None dear entries stab, pc support teat** Good Good pole frame, metal siding, Subdivided cubicles, good security Electrical outlets and fighting in many doors partjd1 . �paitrLenI each sue, minimum plurn forte Subdivided irtlla cubicles, mixed Adequate electrical service r Average Wood pole frame metal siting None s,u unfinished slab, small affive W c , minimum water Low cost frame, metal siding, low-cost Subdivided into Ike cubicles, light Minimum electrical service None door entries slob. no support racail ties euoN Ajuo I -goala wnsau!u!py 11 °bs 1ON SagrIO Ile!Aim °Wel e1lxQ sunup pue 6u!Prs'arue4 twits Itlefl deeuo sizaeuq,� axe ras lam! a wtii ulu!Vy pl #toddna Ott 'els s �aop ,�, - �_ 4 1 +fit met Olu! t kpcos 1soa-Hal 'Bops 'await pats 1 r �. 1 auaN "win kuntquiru 'weds aollic H 'gam peys!ugun 'sacris uaie art y pa� '�!� 0)U! Pai nS Sups'� I I�rl � red aouuas I aunty Poo UJnwlvlw 'ate #ua.u`uecteabwo •c +5 p p .liana uP4bHl pue steam) l la Alamos pone 'sap!grta pompons `E�insr.rl 'maw' p uegua aid `i' ! 6 IISH LI A good security Ek irtrnent ea — T O O 1_ 0 CO a mti 3 a. 03 c al , a jic w a 8 8 Q. a 672 74 4.46 6230 513_98 3.41 47.75 fi T to Co IfJ0 I security 'Good Qu'tferts and righting, Ventilation minimum plumbing . m al nji 14‘..Si E t i M it F E E I ll ILI il' ii 1 IL eai li e ubic coot :nfl 5 it lo LI 4 te p co g 1 ph 1,, il di T., C) � I 5 Tii & m u iae j 4 C g'La Pt 2e B dill W earn r 1" ir ill 1311 ,win re8 lit .4 ,,,,i E 0 ail 4." ;ILI 3 Jib I g 159 § .5 .1 iti im to cigt e 44( el ill 0 t. IfeSi. I 141 h a P`gi it Poi S eg I i s m , g .c 'I Oil: 2 F i t .1; .c 9 @ � 9 C5 i k I I ik Ipto act- vi raqi 1 512 LT ag it ii tgi cc g 57 a.i gm, en v. p e] 31 in N 11 g g ‘gtig.k' -- 2 -s k .t::. [1 J il,, 1 tli kill1i is rirs.: 21 11, I rl r 31 „al 6 0 cc n ;urn mu) P-1 it it g 11111 o et ge N Ittat tut It z L E sit mg tutirC ziae T'ff WALTER TER 4X. ASSOCIATES Addenda Real Estate Valuations & Analysis t MARIO e T R U n T U 11 m a 5650 El Comine Real, Suite 100, Cfltaa CA 92008 Phone: (760) 4484760 Fax 60) 1761 Proposal ?Ror1't*.4L smssartita MI i ^[S!;Tca4CFR`ti W Ally I -REMIND C1INTACT r*JNF WARE FRZLV `, 9121/7 VOTES a 7GL 2AG ;,tun » NAPS 11'I CHOICE STORAGE CIF's .STATE ed ZIP Coon _ ION LOCATION Co GREELEY, tcI TEt rata EFR RIDGE TOP n: Ti." i_ A' 5; l,17 rnMctptiicra"IN LENDER PU MF. a. ADDRESS I . We Prime lisieby to famish matrumple in accozdaczt with cpktifi Atic it below. for the sunk of O IMNDRED ONE THOUSAND TWO HUNDRED deli {1 201.230 km:lent to be ani as folloAs — — 10 PER.X ENT DOWN PAYMENT'MATERIAL INIEDICID UPON DELIVERY. NET 10 DAYS. LABOR. TO BE PROGRESS BILLED MONTHLY AND UP ` COMPLETION, NET 10 DAYS . Aft uaat*S2 A fram9LiY. 9a Fs ar s 7GM ►flay MI an rib WI-6Udplsnl w!o irmilaits moat amnion. saanthirri put ILO Ain ad5etafiieu m &LW ' fins ilia EFaatam n mw$b 4 Eat w4 Fir ri a yiAl LAI ne toccor t i., au) .mtasanit* dui l r min and whn c S alluoir A 11 awi Irma* uauNw 'ps 4NA! 1M a ari4JCn' iii &In k felting .,,i i ,.a a-,.1 On CM In eine. fin min mastaist Authorized. Signature Note: This proposal may with dzaun by us at an time prior to Customer's accepts. We hentn submit spefificJstions awl Intimates :. THE J E c 0 MMPL. TL FAS CALQY. AN.i! DELIVERY OF • H#3 FOLLOWINGBUILUMICiS OF OUR STANDARD DESIGN • VISC.;. .1: 4Ca'4 x 344-O`' with Pie' tsve_. 1 12 double sloped roof. (d) std at l3" high - BLDG 1 35'=01 tc Jam'' -0'° with We ewe_ [ 12 double slip roof (with cem ridge), (63 steps at 12 ' high Project consists of 11220 s q.ft W M: DES: th?GINEERn r f: foundation, slab and building' structural engineering iotbaded.. -NOTE: Foundation diesiza based upon use of st ndiad shallow : etei Ling desip and ;la k-oc grade. Any orbs ripe of design recesun' to accommodate a rco diSns an outside the scope of this bid FPA INC1: ' raltarthed hrhr a' a fuming. +� ROOF: Standing SEJm MO! I!yitan (McElroy 'Mani, 24 gauge, plated any standard coke.. SIDING Thrsfartened wall panels (McElroy iMultiltabni, 26 gave, parted any siandard color. TRW PACKAGE Stagy Ilyd Make trim package tt door mullions to h4bt of dotest corrugated tiding above. PALRTIndiTrrintai$Leued pan et bare Galtahcme , c amp n s.ir g wilt suhtheliNth et plans Gauge as reguired O11,1Mially FA:SIEVERS; ALl reci red f'astene.rs anti amt -hoc. except arty embedded =chow INSULATIOR 2" roof conde!nsartoa Mani et with scritertinforiced white vinyl facioz GtJ ttxs: Sectionalrferi wit fill height downspouts at appron, 41)' o.c FRE IGifl Ftetreht allowed to j bsite in C r#el+e ,.. CO T CO state and local salesiuse tax of 7.01 p 4, ALTEPN RTES: 1) LABOR Labor to instait materials included in this proposal ADD 93,145 CI 2) STORAGE 1.7NITfOO1 : i c't 4tp doom to include 133 rlaI Mx 3'O' a 1.6 4i i t:g'O , pointed ay stanclati color..,.. Mast. Sk ADD $ 64,41 U Labor_ ADD $ 13.44 0 DESIGN LOADS: 20 pal roof 113 owls E p C' w'M (3 second gust) t Stismk facts S 0.133, S t =0,053, moil rode D WA LITER 81 ASSOCIATES Addenda Real Estate Valuations & Analysis Northern Colorado Regional Analysis The subject property is located and 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. The following pages contains the statistical analysis of the three areas, which includes; market data (industrial, retail, industrial 8c multi- family), demographics, etc. Datawas gathered from numerous sources and is updated through the 2nd quarter of 2015 where possible. b.: Fort Collins •rpi,napne MiniumR Gout a �S RufllifbCreek ovhral of in iNPNai;; u GI 10 Foil Lupton e 1 [arbour Judson i Diri 03 Pi Di* Pal MN(90°E 0 6 12 18 24 30 Data Zoom 7-4 ml Wit L,I. E. II ect ; OCtA n #1Sti Addenda Real Estate Valuations & Analysis Location Northern Colorado is the area between Denver and Cheyenne bisected running north/south by Interstate 25. It is one of the fast growing regions within the State of Colorado. Fort Collins is nestled along the Cache La Poudre River at the foothills of the Rocky Mountains. Fort Collins is home to over 140,000 residents. More specifically, it is about 65 miles north of Denver, 50 miles south of Cheyenne, WY at 4,979 feet in elevation. Colorado State University is located within Fort Collins and is the city's largest employer as well as Colorado's second largest public university, enrolling about 30,000 total students, 25,600 on - campus and 22,000 undergrad students each academic year. Colorado State University is a land- grant institution and a Carnegie Research University (very high research activity). CST was founded as the Colorado Agricultural College in 1870, six years before the Colorado Territory gained statehood. It was one of 68 land-grant colleges established under the Morrill Act of 1862. The doors opened to a freshman class of 20 students in 1879. In 1935, the school became the Colorado State College of Agriculture and Mechanic Arts, or Colorado A&M, and was renamed Colorado State University in 1957. Fort Collins began as a hub for agricultural production, namely sugar beet manufacturing. As its population has grown, especially into the latter half of the 20th and early part of the 21' century, the city has shifted its focus from an agriculture -based economy to a high-tech economy. Employment in Fort Collins has increased an average of 0.6% per year from 2001 to 2005, compared to an average annual increase of 0.0% throughout the United States. Even during the recession that struck throughout the United States from 2001 to 200 3, employment growth in Fort Collins remained stronger than the rest of the country. Loveland is known for attracting artists and tourists to the region. In addition, Loveland has experienced major commercial growth at its I -25/E Eisenhower intersection. Tourists travel through Loveland to reach Rocky Mountain National Park and Estes Park via Loveland's major highway, US 4 (Eisenhower Blvd). The 2014 population estimate was 72,651. The area has easy access to the central portions of the state including Denver and the Rocky Mountains. Greeley, with an estimated 2014 population of 98,596, is an agricultural and manufacturing hub, and the home of the University of Northern Colorado. Additional data regarding the population demographics and major employers for Loveland and Greeley are contained in the following pages. The remainder of the Regional Analysis will show various charts from various noted sources representing regional market data, market statistics, demographics, etc. WALTER & ASSOCIATES Addenda Real Estate Valuations & Analysis The following 6 pages is eligen is "' Qtr. 2017 Market Report for the Retail, Industrial Office market sectors in the Fort Collins and Loveland (Northern Colorado) market areas. CELIGENT MARKET TktNu'- I Northern Colorado Retio Economic; Overview According to the Bureau of Labor Statistics. the unemployment rate decreased 0.8 percentage points • from 2.9% .in July 2O16 to 2.9.4 in July 2017. The unemployment rate decreased due to more people finding jobs and compares favorably to the US rate of 4,6%. The Fort Collins statistical area nonfarm job creation was up 4,8% totalling 7,800 Jobs over the past year. Retail using jobs (industries include trade, transportation and utilities) added 700 jobs from July 2016. to July 2017. Market (NO) VIii7oW The Northern Colorado retail market recorded positive 244,054 square feet (sf) of absorption during 30012. The total vacancy rate has increased 0,5%, from 3.4% in SQ 2016 to 3.9% at the dose of 30 2017. Direct vacancy rates decreased 0.3 percentage points from 2.2% to 2_% during the same time period, Weighted average rent growth increased dining 30 2017 especially in Convenience/Strip centers in Ft Collins -laid Town, Old Town/North, Southeast Gree&ey/Evans and North Loveland. Weighted average asking rents in all classes increased $3.Q1 per square foot (psi) recording $17.12 psf at the close of 3Q. .20l7 compared to $24.11 psf at the close of 3Q 2016- There is currently 395,200 sf of construction in the region. Ma rket l�li hUgh � Class A and Class 8 type centers continue to have very little or no inventory available. Older and less desirable centers that have been difficult to lease In the past continue to show lots of activity, especially with service industry tenants. In-11ne shop space is extremely high in demand while big box activity is stagnant. Activity levels for "off -price" and soft -goods type concepts are very slow. High grade sit down type restaurants and fast -casual dining restaurants are very active. Small restaurant spaces with hoods are very difficult to find and the demand for this type of space is Increasing. Rental rates continue to be at record highs and are expected to remain at these levels until more product is delivered to the market. Rents are predicted to remain high due to the high costs of construction, which are currently in the low to mid -3O per square foot range as well as the imposition of stage -wide real estate tax increases. 5111017 Market Trends q 2017 by Xceligent. Inc Ail Rights Re -served Northern Colorado Employment Source: BLS Market Recap Inventory Ist) 41 of Bldgs Otrly Abs (sf) Total Avail Rate Total Vacancy Rate WC Inventory (sfl Delivered. (sf) Weighted Average Asking Rate (NNN) Absorption and Vacancy Rate i COD' 11 tars iat) Tota9Vacancy Abe ToteKimarter tyAbsorption 200K 1O0K OK 5Q 1x01 s 1016 la 2O17 Zia aarU 30,1011 20'477'x284 1,088 244054 5-4% 3.9'0 396,200 0 $17.12 4.0% 3,0% 2.0% 1.0% BUILDING DATA. EVERYWHERE. WALTER tsle ASSOCIATES Real Estate Valuations & Analysis Addenda CELIGENT MA'KFT TRENDS 3Q 2017 I Northern Colorrn Rita n Direct Weighted Average Asking Rates (NNN) By Market and Specific Use Market Name RCM kttwn Fctold Twrs/NO FC-south FC-Win/ Sev Fcnlingtn cwEaton/Atit GR-NE Gtly/ Dwtth GR-SE Grivl Evans bit -West VA. -Berthoud L'VL-fast' 1-25 L.V L-1 hntwatl MI lkn Wt. -North L'L-South Overall Specific Use Cony/Strip Ct r Frt e/Gen Nbrhd,(Coenrn Cu Reg/Power Ctr subtotal Cony/strip Ctr Free/cen NbrhdfCoznrn Ctr Subtotal Conwsstrip Ctr Free/Gen Nbrhld(01mm ctr Reffrovver ctr Subtotal CorriAtrip Free/Gen N brlyd/Ciorrtrn ctr Subtotal Flee/Gen Nbrted/Cornet Ctr sublota I rteefGen subtotal comestrip C1kr Free/G en Nbrhd/comrn ctr subtotal Conw/Strip ctr Free/Gen Nbrbd/Cornrn ctr RegiPower Ctr Subtotal Cony/Strip Ctr Free/Gen N brtnd/Comm Ctr Pe I/Pow er Ctr Subtotal Free/Gen Nbrhud/eornr Ctr subtotal Cony/Strip C r Free/Gen r4brhd/Comrn Ctr Cleg/Power Ctr Subtotal con w'Strip Ctr Free/Gen Mbrhdfcomrrr Ctr subtota ConY/Strip Ctr Free/Gen Nbrhdfco rim Ctr subtotal canY/Strip ar Free/G en Nbrhd/eomm Ctr subtotal Quarter Year 30.2016 4412O15 142017 $1339 $14..02 $2.431 $13.07 S14.48 $14411 $6x_35 $13.05 $22.25 $17.60 $16.65 $23.04 $16.12 $27.61 $1715 $13.00 $21.50 $.11.25 $12.00 ,$14.19 $20;24 $2D_51 $26.65 $22.56 $18.86 $30.75 $1733 $13.00 $2233 $.13.054 $14479 $G"1A5 $19.70 $26.65 $23,13 $11.57 $29,66 $15,00 $13.010 $24.111 $12.89 e $12.23 $13.49 $11.86 a $8.67 $8.67 $12.33 $11.76 $7-25 $10.00 $10.00 $$12.50 $14.50 $9.00 $6.58 $11.13 $14.50 $1537 $18.20 $14.00 517.16 $17.16 .$36.510 $16A4 $16.32 a $11.00 $11.00 $10.00 $.12.57 $8..55 $114,02 $15.57 sissia $1630 $17.38 $14.50 $14,50 $1+1,54] $i4 s0 $14.50 $14.50 • 2CQ 2017 $14,16 $34700 $13.66 $161.545 $18.39 $17.12 $30.0 $22.73 $21.57 $23.94 $15.00 $11.00 $21„2 $12.45 $12.45 4 • 3,201? $1454 $33.82 $13 A6 $15,441 $14.27 $21 3D $21..61 $21.57 524.30 $15.00 $24.00 $2247 $15,18 $i.t6 $11.00 $11.00 $1t100 Samoa $0.61 $10.5D $12,93 $12,7?i 068 $8.410 $104.0 L11t.ss $15.57 $12.45 $16.11 $16.44 $26.00 $24.40 $1.6.50 $17,54 $14.71 $14.50 $14,50 $14,50 $t450 a Sot $31.00 $31.00 $31.00 $3140 • 331.00 $3L00 $31.00 $11,.09 P $24.00 $17.00 $12.00 $14,17 $17.90 $10-00 $13.29 $24.11 • ■ a $24.00 $13.7& $12.00 $13.69 $22.571 $10.00 $1.4.35 $14.26 $x211.61 $17.31 $22-00 $15.00 $11.00 $11.69 $21.79 $113.00 SQ 1017 Market Trends 8 2017 by Xceltent Inc Abl Rights Resented $12..0€0 $14.00 $11.00 $11.58 $21.82 $21.62 $15.56 $25.50 $13.0[1 S11.42 $12.01 $21.78 a $12.00 $17.99 $17.12 By Market $30 DO $23 00 $24.00 $15 .Do $10.00, $5 00 ati 3 GR-SE Grly} Evans Northern Colorado by Specific Use Cony/Strip Otr Tree/Gen $24.00 $20.00 $18.00 ;141.00 $14.00 512.0€0 ireg/Power Ctr Nbrhdjcamm Gtr 3Q2016 4Q2018 1CI,21013 National by Specific Use Conw/stri p ctr Free/'Gen $14.00 $33 DAD $12 00 laireeamarims Reg/Power eh, tabrhd/Comrn Ott LVL-8e ttnud Ii 20, 2017 3Q 2017 3Q 2016 4Q 2.0145 1Q2017 2Q2017 3Q2017 ULULC01PIG DATA. EVERYWHERE,. A LTr [I S.. ASSOCIATES Real Estate Valuations & Analysis Addenda }'_CELIGENT 11 m6.. Ga.•4 .: Lila_. 30.201 MARKET TRENDS Northern C olit r ada_' Economic Overview According to the Bureau of Labor Statistics, the unemployment rate decreased 0.8 percentage points from 2.9% in July 2016 to 2.1 in July 2017. The unemployment rate decreased due to more people finding jobs and compares favorably to the US rate of 4.6%, The Fort Collins statistical area nonfarm job creation was up 4,R%k totaling 7,800 jobs over the past year. industrial using Jobs (industries include manufacturing and trade transportation and utilities) added 8O0 jobs during the past year. Market Oveiview The Northern Colorado industrial market recorded posit*ve 79,900 square feet (sf) of absorption during 3O2017. Absorption was up considerably from the negative 43,031 sf that was recorded during 3O2016. The total vacancy rate has decreased from 7.1% Jn 3Q 2016 to 5.9% at the close of 3Q 2017, and direct vacancy ended the same ways_ Weighted average rent growth Improved during SQ 2017 especially' in light industrial type properties 'n the Fort Collins North, Fort Collins South and Loveland South submarl ets. Weighted average asking rents in all daises increased 4..6% recording, 9.64 ;per soave foot (psf) at the close of 3O 20 L7 compared to $9.22 psf during 3O 2O6. Market Higdillglitt, Leasing activity in the Northern Colorado region was at a slow to moderate pace primarily due to the lack of inventory that is currently on the market. Tenants looking for warehouse or distribution type baldings with dock -hi loading capabilities and high ceilings in the 10,000 sf to 40,000 sf size range have very few options to choose (torn, As a result, they are haying to either build their own buildings, lookoutside of the area or renew their current teases, which is what many tenants. are doing. There were more lease renewals in SQ 2017 than there were new lease deals. Due to lack of viable product and high demand, rental rates are still at all-time highs and continue to Increase in many of the subrnarketz throughout the area. Currently there are very minimal amounts of speculative construction and most of what is being built is by owner -user type tenants since there is such a shortage of viable space. Jig WV Market Trends €1 20i7 by heiigent, ke. Ad Rights Resented Northern Colorado Employment Source: BLS 1. SO 100 SQ U , 0 rJ L $t LL 1 r1 0 LL, it1 la - Market Recap Inventory (sf) If of Bldgs 0,rtly Abs (59 Total Avail Rate 'Total Vacancy Rate WC Inventory (sf) Delivered (sf) Weighted Average Asking Rate (NNW Absorption and Vacancy Rate Totalaparter IyAbslarpti,n r: -I r•1 E t1 C' IN °stile Abs (sf) IIII Total Vacancy Rate 300K 20OK 200K kfs 300 2.036 4Q 2516 31.1 2017 2Q 2017 ;: 21,197,570 539 79,900 7.5% 51,E 232,904 110 400 $9.64 30 2017 7.0% 60096 1 5aCitliN 3.G% 2.0% BUILDING DATA, EVERYWHERE. WATER 'K- ASSOCIATES Real Estate Valuations & Analysis Addenda CELIGENT 101 AP vt RLN Direct Weighted Average Asking Rates (NNN) By Market and Specific Use Market Marne Specific Use PC -1-25 Corr No Flex Lt WW1 Mfg Whse fpist Subtotal re -Worth Flex Lt Ind Mfg Whse/oist subtotal FC-South Flee. Lund 51'h3etOist Subtotal Flex tt Ind ViiisefoiSt Subtotal G R-85 Corr No Lt Ind ► hsetaist Subtotal GR-East Flex Lt hid MfG. Wise/Dist Subtotal MGR -West Flex Lt Ind Whse/Dist Subtotal L%iL• I-25 Corr So flex Lt Ind Mfg VAN/Dist Subtotal LVL-East it Ind Whse/Dist Subtotal LVL-Narttr, Flex It ind Mfg Whse/OJst Subtotal � LrSOljt t Flex Lt Ind FC-Windsor Mfg WhsfDist Subtotal Overall 90,2016 $16.00 • Quarter Year 4Q1016 3.0. 2017 20,2017 $10.50 $16.00 a. $16.00 $16)90 $1.600 $15.40 $16.00 $10.x#0 $11.72 $11.79 $8.6^r $8.74 Sass $16.00 $1233 $826 a. 4 tips= t,0.40 Su co $#lam $8.80 $931 $9.11 $1024 $13.98 $13,98 $13.98 $16.00 $730 $8.25 $6.98, $6.99 $8_+45 $6.95 $8.95 $9.50 $9.63 $941 $##.99► $8,69 a min $9.00 $8.00 • $10.60 $8.45 $8.83 Me • s $6.'14'''5 $8.95 a $9475 $9.00 Ole • alb $9.t0 Sasso $r>6.93 r N. a • 3Q 2017 $110.$0 $16.00 $1z _00 T $13,55 $22.n 9.14 - $8.00 $1.0475 $12.+67 $8.00 $ 9.50 $iLo.a • $13.45 $13.45 a. $4.79 $319 it r $$-i9 $8.79 - $12,00 a S9.04 $923 $8.45 $8.62 $8.85 $8.97 S923 3 • • a. $14.o0 $10,;00 $14.00 • r - $10.00 $10,00 $10.00 59.38 i9.39 $9.36 $9.31 $8.12 $8.17 $7.81 $823 $6.50 $6.50 $6.50 $630 - a $9.08 .$8.95 $8►93 $'91.01 $9112 $9.15 $9.06 $9.23 SQ 2017 Market Trends 4 1017 by Xceli;ent,. Inc. All Rights #lsntrred $12,0e $14.00 $9;.0;4 a $9.1,4 0,38 $8,33 6.7'5 $5.85 59,KK $964 By Market :r14 OU $12 ,00 $10.00 9 09 C;6,000 $2130 L5 r If . 1 LL U. Northern Colorado by Specific Use ti Flew x1000 9.00 SD 00 $7.00 It Ind tip 0 et -91 Mfg Wbsei'bist 10.1017 2Q.2017 3Q 2016 4Q 1016 National by Specific Use Flex Lt laud 7 00 $6.005 $5.00 $4.00 stesseir- 30, 2016 tAfg g4Q 1016 14, 2017 3Q2017 Wbse/tist 2Q 2017 °SQ 2017 et,UILN 4G DATA. EVERYu ti.LRE. 'WA IT ER Si' ASSOCIATES Real Estate Valuations & Analysis Addenda c:ELIcIENT MARKLF TRENDS 30 )017 roojttl Colorado ! Office Economic Overvi ev According to the Bureau of Labor Statistics, the unemployment rate decreased 0.8 percentage points from 2,9% in My 2016 to 2.1% in July 2017. The unemployment rate decreased due to more ,people finding jobs and compares favorably to the US rate of 4.6%. The Fort Collins statistical area nonfarm job creation was up 4.8% totaling 7,800 jobs over the past year. Office using jobs (information, professional and business services and financial activities) added 700 jobs during the past year. Market- Overview The Northern Colorado office market recorded 164,519 square feet (sf) : of positive absorption during 3Q2017 which is up substantially from the negative .35,939 sf in ZQ 2Q17. The total vacancy rate has increased slightly from 8.1% recorded in 3Q 2015 to 8_3% at the close of 3a 2017. Direct vacancy rates increased from 8.1% to 8.3%. during the same time period. Weighted average rent growth continued to Increase during 3Q 2017. Weighted average asking rents in all class types increased from $19,22 per square foot Ost° in 3Q2016 compared to $20,76 psi at the close of 3Q 2017. Currently there is only 107,030 sf of construction in the region. Market Leasing activity throughout the region was aver especially with prospective tenants in the 1,200 — 3,000 square feet (se range, whereas activity levels for prospective tenants that were looking for spices 4,000 sf and larger was very slow. 75% of all lease deals that were signed in 302017 were below 2,500 sf In size. Agrium occupied their new facility which accounted for a majority of the absorption in 30.2017 There is still a lack of viable space on the market which is a major contributor to the tower levels of leasing activity, especially in Fort Collins. Despite the slower activity levels, Landlords in the Fort Collins area are keeping their asking rents at high levels and are not offering favorable tenant concession packages to prospecttve tenants. In 'Loveland and Greeley, concessions are being offered and rental rates continue to show moderate decreases. Tenant Improvement costs remain at an -time highs and have increased 18%-20% over the past year and a half, 3Q 2017 MaricetTrendc J 2017 by Xcclisent, Incr W P rhtt Resented Northern Colorado Employment Spurt*: BLS '4 it'll I 1441 ei CA Cc rsi ry r4 41 rn a .�. 2 •z; Cl' Market Recap I nvento ryr (sf) Si of R Idgs Ortly Abs (sf) Total Avail Rate Total vacancy Rate WC Inventory (sf) Delivered (sf) Weighted Average Asking Rate {PSG) sat w�r!. -9I 4 Absorption and Vacancy Rate 130K 100K 50K OK -50K rt, bier zo rn r -,J a 43 1st N 2 4 u. Total Qtrly Abs II Total Vacancy Ratt 5aZ416 4102016 10,2017 4.06 2.0% 0.0% N Cis 11,596,475 547 154,519 9.5% 8.3% 107,030 0 $20.76 ≥f2417 JO, 2.017 10,0% 8D% 6.0% 4.0% 2.0% 0.0% BUILDING DATA. EVERYWHERE. rF ' / •r ER Si ASSOC! AT ES Real Estate Valuations & Analysis Addenda .7CELIGENT MARKET IHLNDS 2027 I Northern Cniorario --; By Market and Class Market Name E0-Eafl FC-M idtwn FC-North IFC-Sv Call Can VC -Southeast PO -West GR-C4 n�kral GR-vwtn GR-East GR-Evansj So MGR GR-West LV'L-Berthoud L'P'L--Downt own Wt. -East OIL North LVL-So I -2S cow LYL-sSouth Overall c lass C ;ubtota I A B C Suttota I A 8 e Subtotal B Subtotal B Subtotal a C Subtotal A tr Subtota 6 c Subtotal C Subtotal B Subtota A t3 C Subtotal B Subtotal ri B C Subtotal. A 0 Subtota l A, e G Subtota A 6 Subtota 6 u Subtotal Direct Weighted Average Asking Rates (FSG) By Market 302016 $19 76 $22.11 $20,33 $31.00 $22.99 $20.92 $2432 $22,18 $24.90 $23,14 $21,02 • $21.192 $20.8 $24,27 $20.45 $a2,n $16.94 $16,94 $1806 $15.04 $13 06 $14,83 $14:50 $10.00 $14.36 S $21.03 $►11,00 $16.,77 $16,777 t $1.9.99 $18.04 $19,06 $30.06 $26.50 $29,1.9 $25,40 $20.20 $19',99 $2014 ,a 4O 2016 $1.698 $19.30 $19.01 $ 31.00 $24.60 $19.08 S.2S.2i1, S2.3.7'7 S2Z.S0 $2.3.37 $21,02 $21,02 $20 99 $24.94 $2.0.45 $31.05 $161.94 , $16,94 $less $1+x.33 $15.51 04,27 Win $i0,OD $15.1,5 • a $12 on Slim $1.607 ■ S16.17 a • S18-36 $ 17_so taus -,. • $25.40 $19.19 $19.59 $1,94.51 • $19,22 $19,12 3010117 M afloat Trend: L 2017 by Xcehgert Inc. Alt Fight; Rtivved QUatta Year 1.2017 PO 54 $19.57 $20,44 $31:40 $24,54 $20.98 $25,59 $21.60 $$21.62 $21,61 $2'1.14 $2124 $22.54 $24.16 $2s,71 $16.09 • $ 16,09 $18:06 $14,93 $14.71 $15,461 $16 :30 $10 00 515,58 $11.00 $11,00 T $16„15 $16.25 $18.36 $17,50 $.12,12 $29.107 a $24,87 $25.40 $19,19 $20.2'9 $20,24 a 2+a 2017 $21.14 $►17.13 $2.0,93 $31.00 $2429 $20-62 sass $2496 $18.90 $23S1 $22.61 $22.61 $30.45 $2.'5.18 $21.54 $20.74 $i6,o9 $16.09 $18.06 $14,89 a $15.60 $15.00 Sinop $15.56 . $11,00 $11,00 C 51.4,94 $14.13 $14.94 $1,4,83 3Q 2017 $2o.ss $19.11 $2044 $31.00 $24.29 $20.09 $25,20 $19.95. $18.17 $19.67 $22,.60 $,22,610 $30.80 $22.32 $x7:66 $1471 $1199 $11S9 $18.06 $15.04 $12.79 $1,15 $16.00 $10.00 $1,56 a $18.00 $18.04 $25.0 $15,59 $19.23 $18.02 a 4 e 4 a $24,04 $21 00 S18 00 !AS 00 $12 00 $9 00 $600 a L4 ti I Northern Colorado by Class $311,04 5231.00 S26 00 Sao '1.22 00 S.2000 $13 00 A 6 Sit® National by Class $10.00 $1.8•140 ■ 4 ■ 8, $25,40 $15.26 $19.18 $17,99 a Min $19.88 $.20,76 S.261 00 $24 00 t.2≥ 00 X24 -0O t14.00 Al c drni th cti 1VL-c o a'n to Sn I t . I CI rJ +.1 O 1i S n 00 11.01116 G DATA, EVERYWHERE.. The following, charts arc provided by the Colorado Division of Housing. It represents Colorado Multifamily Housing Vacancy & a Rental Survey for the 2nd Qtr• 2017. \V L:FE & ASSA)C1 ES Real Estate Valuations & Analysis Addenda Th Are i ist qtr trc Otr 3r0 tftr 4th 04r 111 QV Znfl Ott .3n1 QW 4th 0b r U t S f I, i S 8 6 8 !fit 1 Q 0 O C css C U7 i~ 40 i0 tj 641 tab r CO r a. 0 4 N N 41 4. we ors o co ger Sri nl m n 9 CU 110 4a7 w 4, RI% r Rr W, tat el 04 in R Q t 1'S" 9 r wit) 7wmrim 4 P'r M1 0 e) Rr i'7 lit titi"! 41 V gr WA Tim O r t+5 C+' Po 1_! zi fl4 r, 4 f `A1 I[! W tt j i* r' yl * onSh 40 CI w4 to ie r C CV cm !'j h. Cy O) w w w {'A iDSri ti]C1!rti r I atitecookAalW al 41 01 40 4, mt mt 4111 63 h- It *- M 00 cap v40 *Mal 49104-0 to i- me Ott lir � oil 4 N MNM C wl r- al ml 1f1 v 414 nmqomn k1) ti ari +# un Omm in i ID rm: v tip 4f} r W M1 0 r--4 000N w4o a-- C 4 cat C5 Pm 0) Pm totits*t0ObiArtV4 o n N= 01 MI to v e 6ia M N tip} o oeow N w R r Q N ill cv rt9 fran gy' r+ Ha CD us/ LO +r - r ' iJt'S ij'J a " I n r3 N, lid r r Qf �ttir mt tO to l - MI S vsit rC301a 11.3artw Q! !M1 NO to r (t7 voncpr me rtinirr N m N Pm: gv4h'+ n t O v 01 tfi r r fit" m o n m w QNNti")41 mt M1 coNnell i'ivi t'y to kf N t1 o Q 4R r m *� C'' N S'i 471 r r OWOOMMN r +r-- d + twl N W N o CM O D) 'a C, K3 C, me N4C4NellAgMel r r G f r r a) rq o O r t*. 00 eti C7 an, ti'sV Nies! C2 e PI Nit NI NaNPRN mmomm cOma t'ri 'o N Nradoimime Ar- Ar- CA r cY) o M Cif t rJi G! 40 h db 0! tit ca tit e)Ni''�+r MNNMMWv 4J71. n - C .oe g n t 4 4 1#F N m m +tip g glitm Islill! t@ tit! co) I- let en N Ceti CO 1 st 0 CO thlk 1 r~, U, to I rfr W i m r< r r'? S t "R� SON is T r r u- O! ®7 rm P3 N N t�(111 NO 1'N Chi 0 r- C i) i2 kir) * M1 tai AP- O m- o r t>� nit i(7'+. 4D CO 0 4 ✓ I r t2 Itti .- CS t - N O rat tt? Nr] r �r- tocjMor to ca r�"} o to toC S IN f'7 o 3O M 0 eti r TOt*11 P 4 K r a4 1' 4_ r at w 00®4 t7Q Q tit tr, C flo ra 4 0 43 qr f a W w� ' q m /► r 0 rr� h..01`h.N,fir Ira lea rid r - a, flum 1 S tiA 8 co U) P t4 ` _ c C Sir r, C it .— MTo �y yy 44r uti W .s P. CC r ;it , Pig § E C,1 SON §11E.AfgE El gal ti4 Ct IJ a cu SHIN130S7V IMITVA3t. Q1 uations & Ana Real Estate Va The following 4 pages are a Demographic Profile 2014 of the overall Northern Colorado area. This study was published by The Group Inca Real Estate. It shows several indicators of the overall Northern Colorado Region that include; demographics, labor force statistics, employment wages, average household income, average price cost, education, health care facilities, etc. Northern Colorado Demographic Profile 2014 LARIMER COUNTY FT COLLINS MILANO Mm lofty and WelldCou,rttln Latimer County and Weld County ate located in northern teams/ Colorado covering an ateaa of 6,645 square mt1es- Their are more than 550,0110 people living in this area, with the median age In Lot/met Coimty being 35goes olde and the median ale in Weld County at 33 yeats alt Lorimer County Is the ninth Jotgestln the leak and Weld County is the ttlir4 (argect' by area WELD COUNTY EL(Y labor force Labor Force Employed Unemployed Unemployment Rate Savo: w nroirnlgattrtray Burt* dtior Stallsrlt3•Wnrnter 1013 Colorado 2,741,5M 2,564,527 177,057 6.s% population forecast Metropolitan Statistical Arta (MSA) Latimer Weld 180.916 1243,777 171,899 116,877 9,417 7,900 5.0% 6.3% U.5* • 6.5% Northern Front Range Fort Collins-Lovaiand Greeley 2015 610,912 328,236 282,706 2020 6a9,4a12 3611,813 32.8,588 2025 779,630 394,236 385,394 2030 869,993 424833 445,164 Satrae: ditigainagioy Maio °Won al tacdl6wvernmerrt Demography U, ice„ Norember 2011 A 1Metrapattla,r %ttrk&Area iM.511) rt a corm, Often ►ncklairrgmore thtul ant raviity mudan rarram, rind wark potions, deria ed by the U≤ Puna o of the (MEW $ ha Mhrp a RA lro ay e r at lws t 50 000 porn Or do o:tainted area of 5V.100peopleaid aawit pWaon cues pdyulariort of oc fast 1UU,tmpegople age distribution Ladner Median Age 36.4 017 667,917 18-64 210,678 65.90 43,842 Saint: C 0ACIWlG,t?pr1d. tpp:jtch wow $tttvcoesra,rlf climate Abundant sunshine and tow humidity AverA a tr+mpetature 54 degrees. Annual precipitation 15.e Average snowfall 300" at mountain resorts First snow in September S'oyrrt', rtwrrr►ty 44.piniiittorniarivero Awe WALTER 8 A S S t) C I A. T E S Real Estate Valuations & Analysis ward 33,9 74,342 ¶711103 30,672 property tax Lorimar Latimer County Collectson average, G.62% of a property's estimated fair market value as property tax, The average yearly properly tax paid by 1. rimer County residents amounts to opproxi'rnatelyr 2.07% of their yearly Income. Weld Weld County collects, on average, 0.63% of a property's estimated fair market value as property tax, The average yearly property tax pa Id by Weld County resldenes amounts, to approximately 1.t15% of their yearly income. source: tin}crt'gxtta7t etertrlar race and ethnicity White Black or African American American Indian/Alaska Native Asian Some other race Native Hawaiian & Other Pacific Islander Hispanic or Latino (of any race) SOME (oclfrnder2 {arils {t4P us &mut &,,eau Lad rlaer 93,5% 1% 1% 2.1% 3.9% 0,1% 108" Wild 673% 1,0% 06% 1.2% 14% 0.1% 28,5% Thy of the It {nitrvi,dvar fat,.'rtunr Ui ui t.,r«Ilgrialiaii Cal,v0i nq% May add KJ niorc Ih4n 1}IS: tulat pup ilMitan Lwceuio pop rc'who rtponed more than ANrrare awv'aUrpd tneseh ►aeaceileyeiry major employers Latimer Colorado State University University of Colorado Health (formerly Poudre Valley Health System). Banner Health: McKee Medical Center Poudre School District Thompson School District La rimer County Hewlett Packard Wood wa rd Columbine Health Wal-Mart Distribution Center (includes Greeley) Center Partners City of Fort Collins City of Loveland Hach Front Range Community College ►Otterbox New 8eigiu m Wald 155 Swift and Company Banner Health: North Colorado Medical Center Weld County School District 6 University of Northern Colorado Weld County Government State Farm Insurance Companies City of Greeley Alms Community College Nstrt ttn Wploradafevrrarncc00retapn,ein Carpta(a ww'w.ungtreSGtfA' 4Wirti 2urnyeut orrgeslemptraye Melt tilpitoreCi7M, gUEOnornk&evetstpmentogp kdiilrrn.ulla Addenda Employees 6,475 5,522 4,112 3,289 2,036 1,539 2,000 1,475 1,450 1,350 1,300 1,200 958 900 775 571 465 4,500 4,112 2,300 1.658 1,282 1,188 849 800 per capita income Nation Colorado $43,135 $45,775 IMrg4t1ttallagancautt G! D(flrtmM tof(01m2 era personal Income Colorado $247,634,418 Ikea: l iti im! i" ryw U$t epw(tenI alComme to Lorimar $41,311 Lariimer $12,826,581 median income Colorado $57,685 sow e iVe ociveWilmttlittierliailiti 0 0r+1e+°t M/ft& Larlrner 5570215 Employment and wages Industry Agriculture, Forestry, Fishing, Hunting Mining Utilities Construction Manufacturing WholesaleTrade Retail Trade Transportation and Warehousing information Finance and Insurance Real Estate. Rental and Leasing Professional andTechnical Services Management of Companies and Enterprises Administrative and Waste Management Educational Services Health Care and Social Assistance Arts, Entertainment and Recreation Accommodation and Food Services Other Services Government $cwcr: A..,._ .,' "?!4'lyrawait:�F'1�"'!: t:�t f w COIOXIOt; ImOotorreftr e+id Flax (Off M 1' iOmar20u Weld $31,657 Weld $$,347,637 Wild $55,825 Employees 946 387 714 7,851 11,469 3,435 17,197 Z603 2,659 3,231 235$ 9027 652 8,712 15,092 17,676 2,633 16,e21 3,675 24,148 residential building permits - 2013 Fort Collins Singte-Family 555 Multi -Family (units) 552 SOrrrtr: wwwsrrwuplr, ofn The6raup tm,9trolfstare residential average price- 2013 Fort Collins, WellingtoneTimnath LOVilland $313,973 $262494 Wm: w nt fhej torn thee % Inc Rai Eater WALTER �i.- ASSOCIATES Real Estate Valuations & Analysis household informatior r Average number of persons per family Avenge number of persons per household Total number of households Married couple ho use hold s Households with children under 1$ Hciceholds 65 or older Sown: ricriut, Wild Sinai Larinser Average Yearly Wages $27,120 544,064 $59,488 $43,105 $73,944 $53{872 $23,40! $35,048 $49764 548,828 $30,836 568,328 $64,532 $27,508 $27,456 $42,276 $15,704 $14,924 $28,028 $41,080 Loveland 233 109 Greeley 15$ 275 Greeley, Evans Windsor $ )83,375 5335,456 Employes' 3,663 5,033 336 ?,408 11,456 3,529 8,178 3,126 918 3,010 1,012 2,209 1,294 4,731 8000 8,206 1,038 6,319 1,696 13,747 Lerinr#r 294 242 120,295 50.1% 28.9% 24,7% Weld Weld 2/6 3,24 89,349 56,4% 39,0% 19A% Awns eWages $30,04$ $63,600 560,484 $47,712 $38,160 $54,52$ $216,016 $45,264 $ 36,57 $45,456 $35,040 $46,896 $101,664 $25,776 $36,576 $ 38,304 $14,208 $13,344 $26,5+4 $34,372 Windsor 356 52 Ault, Eaton, Johnstown, Kersey, LaSalle, Mew, ilil it liken $234,554 Addenda education Pre -K through Grade 112 Latimer District Poudre Thompson 92.] Park R-3 Enrollment 27,909 16,042 1,139 Weld Wefd County RE -1 1,931 Eaton FIE -2 1,804 tteenesbury RE -3J 2.276 Windsor RE -4 4r364 Johnstown -Milliken RE -5J 3,,300 Greeley RE.. s 19,840 Platte Valley RE -7 1,102 Fort Lupton RE -8 2,340 Ault -Highland RE -9 846 Briggsdale RE -10 157 Prairie RE -11 174 Pawnee RE -12 75 Higher Education Colorado State University Fort Collins University of Northern Colorado 13,070 Greeley Front Range Community College 8,934 Fort Collins Aims Community College 8,040 Greeley, Fort Lupton and Loveland iourrtltattiwar rohnn$du 9usffcn Repair finance and incentives Northern Colorado Economic Development Corporation Upstate Colorado Economic Development Website www.osd.k12.co.us wwwittiornpson.k 12.co.us wwvv.pst1 r3.k12,co.us www.welc-re 1.k 12,co us www,eaton.k12.co.us www.re3l,rorn www_weldre4.k12 co wrs www,weldre5J.k12.co.us www.greeleyschools.org www,plattevalley.k12.co.us www.tt i u pro n.lk 12,ca us www,weidre9,k t 2.eo.w,rs www,brlggsdaleschool.org www.prairieschool org v+ ruwv,pawneeschoal.com 30.700 www,coiostate.edu www,uncotedu www.frantrange,edu www.dlrns edu www.ncedr corn wwwupstatecolorado,org health care University of Colorado Health (formerly Poudre Valley Health System) Poudre Valley Hospital Located ire t=ort Collins, Poudre Valley Hospital is a 241 -bed rack mil me kaI center offering a wide array of treat menib, surgeries, and di acjnostit 101% In morel hart three dozen medical specialties. Medical Center of the Rockies - Located In Loveland, Medical Center of the Rockl, the inewt . dditlsn to the PoudrQ'Vall y� Health System, is a 1 36h - d mglonal a+nedical center offering' a lull spectrum of services with specialties in cardiac and trauma Care. n'Wieatia Danner Health McKee Medical Center - Located in Loveland, McKee Medical Center is a 132 -bed, acute -care hospital that has served the community for more than 30 years. McKee prides itself on providing excellent patient care, the Latest in technotoglcal advances and caring attention to patient needs. North Colorado Medical Center = Located in Greeley, the hasp 'tat completed a rrlajur expansion in 20M. to.rfnorjinr3 rlaw:niin71�t=a a1 hospital bcds to 390, North Colorado s,elliei as the primary full service hospital for northern and eastern Colorado. southern Wyoming, western Nebraska and Kansas. want.fitnwertit jit Ernest Health Inc. Northern Colorado Rehabilitation Center - Located in klhrIstovynl)es green solely the pru'ari cure cal %peciaHaiti ire r ihat li idatUve error, ibis is the onlonlystanding 4Cute rehabilitation al ivr�aYr'rg Northern Culuradu, This husp;llal provides rehabilitative services for patients with knitlion& deficits As a result of debilitating H finesses, or Injures.. 'Fmaditatailifittt,,{ii} Estes Park Medical Canter Estes Park Medical Center ' A 25 -bed critical access acute care facFlity with a 24 -hour emergency department/ 24 -hour arnbula rice service, emergency air transport, medlcalfsurgical services, obstetrics, home health care, and hospice, jywwcprn nr TIM cite OM Sewridllnrkparrdentiitiofonto afldauretedtxvkgoaten; oprrattrgai OM prints and kr ,A w sirte 1U?r$ ACCRA cost of living index - Annual Average Data City Corn prsite Grocery Housing index Items Atlanta, GA 98.1 107.9 Baltimore, MD 116.6 111.9 Boston, MA 139,4 118,8 Chicago, i L 116.9 107.6 Cleveland, OH 100.1 108,4 Wailes, TX 99,8 101.9 Denver. CO 104.0 9615 Houston, TX 92.9 84.0 Miami, FL 110.3 1 01.5 Minneapolis, MN 148.4 1 17.6 New York, NY 228 3 1147',7 Philadelphia, PA 124 5 124 7 Portland, OR 115.2 102.3 Raleigh, NC 91,2 90.4 San Diego, CA 132.7 1114.8 San Francisco, CA 166.5 120.4 Seattle, WA 115.9 111,2 Washington, DC 14al.+5 1132 5krrCrt t + .:a IV°ntter1011 85.8 1576 165.3 138.1 93.8 75.0 114.0 919 121 4 1141 451.9 140.5 134.4 72.5 192,6 294.8 1358 248.4 Utilities Transportation 96.1 102.7 142.4 105.4 145.1 1114 8946 90,5 102.8 102.7 127,9 129.3 103,2 104.9 106.9 93.7 B9.6 103,4 109.1 1013 110,6 1167 I©1.5 1089 90.+8 94.8 t12.6 105,8 131.0 105,6 120.5 101,6 111.7 114.9 109.0 107,8 Mt Council for tan naaalty & tionomir Rewords fire AM?A roil o t lint] +ruin' [near urea rerorlvep FAT /nth for roamer goods and services In pru tgrpalrne tool The &nage(Ora tpertrraparrngFlame both rneeropaktaraand non merrapalRsi. eoes 100, candeotpdrrrc$ s$incie1,.readGI percen!ageaThe Lrvefortat oil prow WIALIT 4. ASSOCIATES Real Estate Valuations & Analysis Addenda Health Care 99.4 1003 127.4 1043 1D3.2 108.2 109,8 95.2 111,2 102.6 124.5 105,4 1172 93.8 110.6 1121 1113 101.9 f4tiec. Goods and Services 1018 94.0 135.3 107.4 99.7 113.1 105,, 97.4 101.8 107.5 142,6 117,4 105,3 964 105.5 121,4 110.8 97.1 parks and recreatio Lorimar Fort Collins Recreation Department Loveland Recreation Department Larfrner County Parks Estes-Poudre Ranger District Poucire Canyon Boyd Lake State Park Roosevelt National Park Redfeather Ranger District Rocky Mountain National Park Estes Valley Rec. & Park District Weld Greeley Parks and Recreation Department Windsor Parks and Recreation Department , iOr!mL"Il rfaJitrKarJia 1n'! A 'n O'er t se emir NIP s4eG Om? 4i.114rut,rlo'i1 k4'.7#0,4 vutia 'J1,e�i.yrQfl41P •''•TM�$I Jlfra1/�tic kr d. �:iC..k"Oat tv :1A Sian rokiniav�i,ra *Wm a'a c,tg+i�t hilt, �l f/Oink, en testa teltahis mdati .yiij' Mi,$1 r,_ Life rag 4'ittpr'owendi/i n centers www.fcgovzQm www.ci ,iwteland.co,us www.co.larimer.co,us wwwohrangercorn www. co l to rad of nfo.ca m www.parks.state,co,us www.nps.g0v www.fsleci.us wwwicckymauntainnationalpark.cam uvww.estesvaileyrecreatkon.corn vvvvw.greelcygovicom • Yw wee ind artjov.com sports teams Colorado Eagles Hockey lEci- r) Fort Collins Foxes Baseball ISummerCaIlea* League) Colorado Ice indoor Football tuiF) Colorado Rapids Soccer iMLsi Colorado Force Soccer lusuti transportation Air Denver International Airport (DIA) The Fort Collins -Loveland Municipal Airport (FAIL) Greeley -weld County Airport tali Amtrak THE GROUP Rpm/ EAde Paola la lei 20 Pd The O U% r`1W Real &ate www.co 1 o ra doeag les.co m www,fortcollinsfoxes.com wwtiv,thecoloradoice.com Www.coloradarapids.com w ww,fo rice socc er'.or'•g www flydenver.com www.fartlovea lrcom wmrwnw,gxy,net www.amtrak.corn golf courses Larlmar City Park Nine, Collindale Fort Collins Country Club Harmony Highland iVieadows Mountain Vista Greens Ptarmigan Country Club Scuthritige Cattail Creek, Mariana Butte, The Olde Course at Loveland Estes Park Golf Course, Lake Estes Executive Weld Greeley Country Club Highland Hills, Boomerang Links Pelican Lakes Mad Russian WWW.f c g ov.co rn www,fcgolf.org www.ha rmonly homes►colorado com www,h ighiandrneadows.com www.mountainvistagreens,ccm www.pt a min i ga nccac am www.golfsQuthridge.corn www.ciloveland.co.us www.estesparkcvb.com www,greeleycc.arg www.gree$eygov.com ww w.waterva iley,corn www.rnadrussiangoif,corn performing arts and elk Lorimer Lincoln Center R$altoThe,a ter The Ranch -Budweiser Events Center fort Collins Symphony Wild Greeley Philharmonic Orchestra Union Colony Civic Center Island Grove libraries Latimer Poudre River Public Library Dist Loveland Public Library Estes Valley Library Weld High Plains Library District €iearvJew Library District museums Lorimer Fort Collins Museum of Discovery Fort Collins Museum of Art Loveland Museum Gad lery Estes Park Museum Weld Greeley Freight Station Museum Centennial village Museum Greeley History Museum Fort Vasquez Museum Plumb Fawn Learning Center Meeker Horne Museum �adti DV Ittat) rap, ilc Pi(30leWit Ptc'pair d 113yGroup, Inr„ R Estate WAITER & ASSOCIATES Real Estate Valuations at Analysis www.thegroupinccom Addenda www.itcgov..cotm www.cl.loveland,co.us www.budwelsereventscenter.com www.fcsyrnphanp.org www.g reeleyrphilharmonic.com www.greeteygovcom www.greeieygov.ccm www.pouclrelibraries.arg www.c iiove l are d ico. us www .e stesva I leyl i brary org www.mynaibrary.us ww w.rnyci earvie w, l nfo www.fcmod,r rg www.ftcma.org www-cd.lovelandlca.us www.estesnet.com wrw gfsm,org wvvw greeleyryiuv.com WwW.greeleyrgov.com www.coloradohistory.org www.greeieygcw.corn www.greeleygov.com July 26, 2019 Petitioner: 1ST AVENUE PARTNERS LLC PO BOX 69 WINDSOR, CO 80550-0069 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 2019-2886, AS0103 Appeal 2008224637 Hearing 8/2/2019 9:00 AM Account(s) Appealed: R8947321 Dear Petitioner(s): The Weld County Board of Equalization has set a date of August 2, 2019, at or about the hour of 9:00 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 LPLIs./o:yf G'i. Esther E. Gesick Clerk to the Board Weld County Board of Commissioners and Board of Equalization cc: Brenda Danes, Assessor Hello