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HL 15 - Appraisal - Mesquite Ridge Condo
A REAL PROPERTY APPRAISAL REPORT OF THE SURFACE ESTATE IN 5.909 ACRES OR 257,400 SQUARE FEET OF LAND BELONGING TO: MESQUITE RIDGE OWNER’S ASSOCIATION, INC. Located at the northeast corner of Collins Street and Bernard Street, or 600-860 W. Collins Street, Denton, Denton County, Texas 76201 City of Denton, DME Program Management Project #DTN13535, Hickory to Locust TM Line, Parcel: 015 PREPARED FOR: FREESE AND NICHOLS, INC. c/o Mr. George Morrow, General Manager Denton Municipal Electric (DME) 215 E McKinney Street Denton, Texas 76201 EFFECTIVE DATE OF THE APPRAISAL: October 17, 2017 PREPARED BY: 3208 COLLINSWORTH STREET FORT WORTH, TEXAS 76107 Job No. – 17.1330 PARCELS 15 – MESQUITE RIDGE OWNER’S ASSOCIATION, INC. PAGE 1 TABLE OF CONTENTS PAGE NO. TABLE OF CONTENTS ........................................................................ 1 SECTION I - APPRAISAL REPORT ............................................................. 2 Scope of Work .......................................................................... 4 Competency Rule ...................................................................... 6 Jurisdictional Exception Rule ........................................................ 6 Extraordinary Assumptions ........................................................... 6 Hypothetical Conditions .............................................................. 7 Definition of Market Value ........................................................... 8 Summary of Salient Facts and Conclusions......................................... 9 Aerial .................................................................................. 10 Appraisal Summary .................................................................. 11 Date of the Report................................................................... 12 Effective Date of Appraisal ......................................................... 12 Purpose and Property Rights Appraised .......................................... 12 Identity of the Client and Intended Users of the Report ...................... 12 Intended Use of the Appraisal ..................................................... 12 Statement of Ownership, Sales History and Status ............................. 12 Market Area Analysis ................................................................ 13 Demand Generators Map ............................................................ 20 Site Analysis .......................................................................... 23 As If Vacant – After Acquisition .................................................... 31 Market Value Estimate of the Whole Property .................................. 32 Partial Acquisition Methodology ................................................... 38 Valuation of Area To Be Acquired ................................................. 39 Remainder Property Valuation Summary ......................................... 43 Damage Summary .................................................................... 45 Cost to Cure .......................................................................... 46 Total Compensation ................................................................. 47 SECTION II – EXHIBITS ..................................................................... 48 Area Map .............................................................................. 49 Market Area Map ..................................................................... 50 Property Aerial ....................................................................... 51 DME Easement ........................................................................ 52 Plat .................................................................................... 62 Project Map ........................................................................... 63 Subject Photos ....................................................................... 67 SECTION III – COMPARABLE SALES ANALYSIS .............................................. 71 SECTION IV – CERTIFICATION OF THE APPRAISAL .......................................... 78 SECTION V – ASSUMPTIONS AND LIMITING CONDITIONS AND DEFINITIONS .................. 81 SECTION VI – QUALIFICATIONS OF THE APPRAISERS ....................................... 89 PARCELS 15 – MESQUITE RIDGE OWNER’S ASSOCIATION, INC. PAGE 2 SECTION I - APPRAISAL REPORT SECTION I – APPRAISAL REPORT PARCELS 15 – MESQUITE RIDGE OWNER’S ASSOCIATION, INC. PAGE 3 O’BRIEN REALTY ADVISORS, LLC REAL ESTATE CONSULTANTS & APPRAISERS 3208 COLLINSWORTH STREET FORT WORTH, TEXAS 76107 December 8, 2017 FREESE AND NICHOLS, INC. c/o Mr. George Morrow General Manager Denton Municipal Electric (DME) 215 E McKinney Street Denton, Texas 76201 SUBJECT: 5.909 ACRES OR 257,400 SQUARE FEET OF LAND Located at the northeast corner of Collins Street and Bernard Street, or 600-860 W. Collins Street, Denton, Denton County, Texas 76201 Dear Mr. Morrow: O’Brien Realty Advisors, LLC is pleased to present this appraisal report that was prepared on the above referenced property. The purpose of this appraisal is to derive an opinion of the market value of the part acquired and any damages to the remainder, as of October 17, 2017, the effective date of the appraisal. The report has been prepared in conformity with the Uniform Standards of Professional Appraisal Practice (USPAP), The State of Texas, and the Standards of Professional Practice of the Appraisal Institute. Our opinion of market value is premised upon the Assumptions and Limiting Conditions outlined herein. The definition of market value may be found in Sections I and V. SECTION I – APPRAISAL REPORT PARCELS 15 – MESQUITE RIDGE OWNER’S ASSOCIATION, INC. PAGE 4 SCOPE OF WORK As part of this appraisal, we have completed the following steps to gather, confirm, and analyze the data. Mike C. O’Brien and Gina Cannova Phalen physically inspected the subject and the surrounding market area on October 17, 2017. The inspection of the property is limited to those things readily observable without the use of special testing or equipment. Collected factual information about the subject and the surrounding market area and confirmed that information with various sources. Performed a highest and best use analysis of the subject site as vacant and as improved when applicable. The subject condominium property is currently owned by (94) individual owners, each of whom own the fee simple to their unit defined as a separate and identified air space, together with the interior surfaces of the perimeter wall, floors, ceilings, window frames, doors and door frames and trim, which air space is distinct from and not part of the Common Elements and share undivided and inseparable rights with other Co-Owners in the limited and general common elements of the property. None of the land in this Project on which any Unit space or porch space is located shall be separately owned, as all land in the Project shall constitute part of the “Common Elements” of the Property. The owners of each unit shall own an undivided 1.0638% interest in Common Elements. As stated in the condominium declaration, “in the event that an action in eminent domain is brought to condemn a portion of the Common Elements (together with or apart from any Condominium Unit), the Association, as Attorney-in-Fact, in addition to the general powers set out herein, shall have the sole authority to determine whether to defend or resist any such proceeding, to make any settlement with respect thereto, or to convey such Property to the condemning authority in lieu of such condemnation proceeding”. Therefore, we have addressed the owner as Mesquite Ridge Owner’s Association, Inc. We have determined no damages exist to the remainder. As a result, we have appraised the whole contiguous property as though vacant and under one common ownership. SECTION I – APPRAISAL REPORT PARCELS 15 – MESQUITE RIDGE OWNER’S ASSOCIATION, INC. PAGE 5 Gathered market information on comparable sales. The comparable information was confirmed with at least one of the parties to the transaction. Analyzed market information and developed indications of value under the necessary approaches to value for a credible assignment result. The market information was analyzed for an appraisal of the Whole Property, the Part to be Acquired and the value of the Remainder Before and Remainder After the acquisition. In certain partial right-of-way acquisitions, the primary improvements are removed from the area of proposed acquisition. If it has been determined that the proposed acquisition will not result in permanent damages to the remainder property, the opinion of compensation can be limited to the valuation of the land and affected site improvements. The valuation of the unaffected improvements is not necessary in some cases for a credible assignment result. The appraisal of real estate typically employs three traditional valuation methods: the sales comparison approach, cost approach, and income approach. Only the sales comparison approach (land only) was used in this analysis. Partitioned the Whole Property value opinion between the Part to be Acquired and the Remainder Before the acquisition (i.e. The value of the part acquired was simply subtracted from the whole property to determine the remainder before). Performed a highest and best use analysis on the Remainder After with consideration to the impact on the residual property as a result of the proposed acquisition. If necessary, the cost to cure and restore the functional utility of the remainder after was estimated. Derived an estimate of total compensation due the property owner as the result of a proposed acquisition by summation of the part to be acquired and any damages. Damages are calculated based on the difference in the value opinion for the remainder before and remainder after. Prepared an appraisal report summarizing our analyses, opinions and conclusions. SECTION I – APPRAISAL REPORT PARCELS 15 – MESQUITE RIDGE OWNER’S ASSOCIATION, INC. PAGE 6 COMPETENCY RULE We have the knowledge and experience of appraising similar type properties located within the subject’s market area, and applying the approaches to value utilized; therefore, we are able to complete this assignment competently. JURISDICTIONAL EXCEPTION RULE If any part of the Uniform Standards of Professional Appraisal Practice is contrary to the law or public policy of any jurisdiction, only that part shall be void and of no force or effect in that jurisdiction. EXTRAORDINARY ASSUMPTIONS An extraordinary assumption is an assumption, directly related to a specific assignment, which, if found to be false, could alter the appraiser’s opinions or conclusions. Extraordinary assumptions are specific to the assignment, as opposed to general assumptions, which could be applicable to any assignment. In this assignment, we have assumed typical general assumptions and limiting conditions as cited later in this report. Particular to this assignment, the client has indicated that a radius up to 30 feet could be necessary for installation of proposed transmission poles, but that existing right-of-way could be used to reduce the radius impacting the property. The appraisers were instructed to assume that any new poles will be in the areas indicated on the map provided by the client (see Exhibits). In addition, the proposed easement is assumed to be the limit of required installation space on the subject property. The client has also indicated a construction period of 90 days, or 3 months. Additionally, the client has indicated that access to the property will not be denied during construction. The client has also indicated that any wood patio fencing adjacent to subject condominiums will be allowed to remain in the easement area and will not be impacted by construction. Finally, the client has indicated that the property within the proposed easement areas will be restored to similar or better condition after construction. SECTION I – APPRAISAL REPORT PARCELS 15 – MESQUITE RIDGE OWNER’S ASSOCIATION, INC. PAGE 7 HYPOTHETICAL CONDITIONS A hypothetical condition is “that which is contrary to what exists but is supposed for the purpose of analysis.” In the State of Texas, appraisal reports prepared for eminent domain purposes may recognize one or more hypothetical conditions. For example, the appraisal of a remainder property assumes that the proposed public or private improvements were complete as of the effective date of valuation, when in fact it is known that they are not. The use of hypothetical conditions derived from public policy and case law does not result in a process that is limited or renders the results no longer credible. No additional hypothetical conditions were used in this appraisal assignment. SECTION I – APPRAISAL REPORT PARCELS 15 – MESQUITE RIDGE OWNER’S ASSOCIATION, INC. PAGE 8 DEFINITION OF MARKET VALUE “Market value,” as used herein, is defined as: …the price which the property would bring when it is offered for sale by one who desires, but is not obliged to sell, and is bought by one who is under no necessity of buying it, taking into consideration all of the uses to which it is reasonably adaptable and for which it either is or in all reasonable probability will become available within the reasonable future. City of Austin v. Cannizzo, et al, 153 Tex. 324, 267 S.W.2d 808 (Tex. 1954). SECTION I – APPRAISAL REPORT PARCELS 15 – MESQUITE RIDGE OWNER’S ASSOCIATION, INC. PAGE 9 SUMMARY OF SALIENT FACTS AND CONCLUSIONS 5.909 ACRES OR 257,400 SQUARE FEET OF LAND Location Located at the northeast corner of Collins Street and Bernard Street, or 600-860 W. Collins Street, Denton, Denton County, TX 76201 Legal Descriptions The subject is legally described as being a parcel of land situated in the Alexander Hill Survey, Abstract 623, Mesquite Ridge Townhouse Addition Plus, City of Denton, Denton County, Texas Owners of Record Mesquite Ridge Condos No address available per Denton Appraisal District Property Tax Number(s) 122410 Effective Date of the Appraisal October 17, 2017 Date of the Report December 8, 2017 Land Area 257,400 square feet or 5.909 acres Improvements According to our inspection and Denton Central Appraisal District, the subject is currently improved with a condominium complex and related site improvements. The main improvements are removed from the proposed acquisition area and the client has instructed us that any site improvements disturbed or damaged by the proposed project will be repaired or replaced with similar or better materials and workmanship by the project contractor. Therefore, the improvements have not been valued as part of this appraisal. Highest and Best Use as Vacant Multi-Family Residential Estimated Exposure Time 12-18 months Property Rights Appraised Fee simple estate (Surface Estate Only) Indicated Market Value $2,960,100 or $11.50 per SF (Land Only) Indicated Total Compensation $191,242 SECTION I – APPRAISAL REPORT PARCELS 15 – MESQUITE RIDGE OWNER’S ASSOCIATION, INC. PAGE 10 AERIAL Source: GoogleEarth © 2017, Imagery Date 1/25/2017 *LOCATIONS OF BOUNDARY AND EASEMENT ARE APPROXIMATE SECTION I – APPRAISAL REPORT PARCELS 15 – MESQUITE RIDGE OWNER’S ASSOCIATION, INC. PAGE 11 APPRAISAL SUMMARY 1. Whole Property Land 257,400 SF @ 11.50$ /SF 2,960,100$ Total 257,400 SF 2,960,100$ 2. Part Acquired Electric Utility Easement 21,973 SF @ 11.50$ /SF @ 75%189,517$ 21,973 SF (-)189,517$ 3. Remainder immediately before the acquisition is:2,770,583$ Remainder immediately after the acquisition is: Land 235,427 SF @ 11.50$ /SF @ 100%2,707,411$ Electric Utility Easement 21,973 SF @ 11.50$ /SF @ 25%63,172$ Total 279,373 SF (-)2,770,583$ 4. Net Damages -$ 5. Total Compensation: Part Acquired 189,517$ Cost to Cure (+)1,725$ TOTAL 191,242$ SECTION I – APPRAISAL REPORT PARCELS 15 – MESQUITE RIDGE OWNER’S ASSOCIATION, INC. PAGE 12 DATE OF THE REPORT The date of the report is December 8, 2017. EFFECTIVE DATE OF APPRAISAL The effective date of this appraisal (value) is October 17, 2017. PURPOSE AND PROPERTY RIGHTS APPRAISED The purpose of this appraisal is to derive an opinion of market value of the part acquired and any damages to the remainder, as of October 17, 2017, the effective date of the appraisal. The surface estate has been appraised. IDENTITY OF THE CLIENT AND INTENDED USERS OF THE REPORT The client is Freese and Nichols, Inc., and the intended users are Freese and Nichols, Inc.; Denton Municipal Electric (DME); 7 Arrows Land Staff, LLC; and their agents, representatives and assigns. INTENDED USE OF THE APPRAISAL This appraisal report has been prepared for Freese and Nichols, Inc.; DME; 7 Arrows Land Staff, LLC; and their assigns, for assistance in right-of- way/easement negotiations and eminent domain proceedings, if necessary. STATEMENT OF OWNERSHIP, SALES HISTORY AND STATUS According to the Uniform Standards of Professional Appraisal Practice (USPAP), the appraisers are required to discuss and analyze any previous sales of the subject property within the previous three years for all properties. According to public records, the subject is currently owned by Mesquite Ridge Owner’s Association, Inc.. The Mesquite Ridge Owner’s Association was created via the Condominium Declaration for Mesquite Ridge Condominiums in Volume 1456, Page 435, as recorded in the Denton County Public Records on August 2, 1984. SECTION I – APPRAISAL REPORT PARCELS 15 – MESQUITE RIDGE OWNER’S ASSOCIATION, INC. PAGE 13 The subject condominium property is currently owned by (94) individual owners, each of whom own the fee simple to their unit defined as a separate and identified air space, together with the interior surfaces of the perimeter wall, floors, ceilings, window frames, doors and door frames and trim, which air space is distinct from and not part of the Common Elements and share undivided and inseparable rights with other Co-Owners in the limited and general common elements of the property. None of the land in this Project on which any Unit space or porch space is located shall be separately owned, as all land in the Project shall constitute part of the “Common Elements” of the Property. The owners of each unit shall own an undivided 1.0638% interest in Common Elements. As stated in the condominium declaration, “in the event that an action in eminent domain is brought to condemn a portion of the Common Elements (together with or apart from any Condominium Unit), the Association, as Attorney-in-Fact, in addition to the general powers set out herein, shall have the sole authority to determine whether to defend or resist any such proceeding, to make any settlement with respect thereto, or to convey such Property to the condemning authority in lieu of such condemnation proceeding”. Therefore, we have addressed the owner as Mesquite Ridge Owner’s Association, Inc. The property does not currently appear to be listed for sale, and the appraisers are not aware of any options or contracts on the property. MARKET AREA ANALYSIS A neighborhood is typically a segment of a community, city or town, which is a homogeneous grouping of individuals, buildings, or business enterprises within the larger community. A neighborhood has three stages of life and possibly a fourth. They are: (1) growth, (2) stability, (3) decline, and (4) revitalization and continuance of the neighborhood life cycle. Principal factors which improve neighborhood values are good schools, churches, rural residential facilities, homogeneity and civic responsibility, prestige and visual appeal, satisfactory transportation affording good ingress and egress, good planning, adequate utilities, conformity in land use, sensible zoning, and topographical and geographical advantages. Some factors which reduce neighborhood values are: the tendency of inhabitants to think the neighborhood is losing its desirability, movement of undesirable uses into the area, lack of zoning protection, increasing taxes, reduced rental rates and values of surrounding properties, lack of adequate planning, community pride, and nuisances. The book entitled Real Estate Appraisal Terminology defines a neighborhood as: SECTION I – APPRAISAL REPORT PARCELS 15 – MESQUITE RIDGE OWNER’S ASSOCIATION, INC. PAGE 14 A portion of a larger community or an entire community in which there is a homogeneous grouping of inhabitants, buildings or business enterprises. Inhabitants of a neighborhood usually have more than a casual community of interest. Neighborhood boundaries may consist of well-defined natural or man- made barriers or they may be more or less well defined by a distinct change in land use or in the character of the inhabitants. The subject is located in central Denton County, in the City of Denton, Texas. The neighborhood is largely influenced by a mix of commercial, industrial, institutional and residential uses. The City of Denton encompasses a landmass of 97 miles and has a population of approximately 119,000. It’s located approximately 35 miles north of Dallas and Fort Worth and is centrally located within the country. ACCESS AND LINKAGES IH-35, whose eastern and western segments intersect in the City of Denton, run through Dallas (IH-35E) and Fort Worth (IH-35W) to the south and continue past the Texas/Oklahoma border to the north. Other major thoroughfares in the area are Loop 288 and University Drive. The DFW Airport, the region’s largest international airport, is approximately 22 miles to the south. Access to Denton is good with IH-35 and US Highway 377 providing north/south travel and University Drive and US Highway 380 providing east/west travel. SECTION I – APPRAISAL REPORT PARCELS 15 – MESQUITE RIDGE OWNER’S ASSOCIATION, INC. PAGE 15 Source: City of Denton SECTION I – APPRAISAL REPORT PARCELS 15 – MESQUITE RIDGE OWNER’S ASSOCIATION, INC. PAGE 16 EMPLOYMENT The primary employment centers for the people living in the subject’s neighborhood are located in the larger DFW Metroplex area. According to the Dallas Business Journal Book of Lists 2017, the major employers for North Texas are as follows: Employer Employees Wal-Mart 34,000 American Airlines Group 27,000 Texas Health Resources 22,296 Dallas Independent School District 19,740 Baylor Scott & White Health 16,500 Lockheed Martin Aeronautics Co. 13,750 Bank of America 13,500 City of Dallas 13,336 UT Southwestern Medical Center 13,018 Texas Instruments Inc. 13,000 JPMorgan Chase Bank 12,676 The City of Denton also has many large employers – mostly in the industrial, health care and education fields. According to the Denton Economic Development Partnership, the top major employers for Denton are as follows: Employer Employees University of North Texas 8,738 Denton ISD 4,417 Peterbilt Motors 2,314 Denton State Supported Living Ctr CtrCeCtr 1,700 Texas Women’s University 1,672 Denton County 1,581 City of Denton 1,383 FEMA 594-1,100 (varies) Denton Regional Medical Ctr 950 Sally Beauty Company, Inc. 950 Safran Electrical & Power 830 SECTION I – APPRAISAL REPORT PARCELS 15 – MESQUITE RIDGE OWNER’S ASSOCIATION, INC. PAGE 17 DEMAND GENERATORS Retail – Rayzor Ranch is a major mixed-use development that is planned to ultimately include more than 582,000 square feet of retail and commercial space. Stores in the development include Academy Sports and Outdoors, Kohl’s, Ross Dress for Less, Famous Footwear, Boot Barn, Petco, Panera Bread, Jo-Ann’s Fabric and DK Foot. A 600,000 square foot Rayzor Ranch Town Center are in development and plans include a Cinemark Movie Bistro. Golden Triangle Mall is a major retail center that has had major renovations including adding a food court, interior landscaping, Wi-Fi and many new stores and restaurants. Tenants include Sephora, Buckle, Body Central, Charlotte Russe, Tobu Asian Eatery, Italia Express and Smoothie Paradise. Two pad sites for Pollo Tropical and Corner Bakery were also added. Downtown Denton continues to grow with the addition of H Squared, a new apartment complex with ground-floor retail and many new restaurants and bars. The area around the University of North Texas has seen continued apartment activity, with new and redeveloped complexes coming online over the past few years. Business – Denton experienced strong growth in 2015. Not only did four long- time Denton companies expand, but several new companies chose to move to Denton. An O’Reilly Hotel is developing an Embassy Suites and a 70,000-square foot convention center in the Rayzor Ranch Town Center. The Railyard Downtown Project – Rail Yard Partners, Ltd. is renovating an existing 28,000-square foot building as part of a larger transit- SECTION I – APPRAISAL REPORT PARCELS 15 – MESQUITE RIDGE OWNER’S ASSOCIATION, INC. PAGE 18 oriented development. The City will lease 9,216-square feet for a collaborative working space and business incubator. WinCo Foods – acquired 77 acres on the west side of Western Blvd., just north of Airport Road, to construct an 800,000-square foot distribution center. This project is projected to create 165 jobs. Buc-ee’s – this “travel center” will be located along I-35E and will include 53,000-square feet of retail, fuel sales and a car wash. Tetra Pak Materials, a manufacturer and distributor of liquid foods, is expanding their current 220,000 square foot facility with an additional 32,000 square foot expansion, including relocating their headquarters from Chicago to Denton. Air Medical Group Holdings, Inc., a national helicopter ambulance company, plans to begin construction on its new headquarters and hangar near Denton Enterprise Airport – relocating their current headquarters from Lewisville. Business Air is planning an expansion at the Denton Enterprise Airport with plans to construct a 24,000 square foot hangar with an additional 4,000 square feet of office. Education – City of Denton residents have access to several higher education facilities including the University of North Texas, Texas Woman’s University and North Central Texas College. The University of Texas just started construction on a new $70 million College of Visual Arts and Design building that will be a 4-story and 145,000 square foot complex scheduled for completion by Fall 2018. This addition will give their College of Visual Arts and Design a total complex of 228,000 square feet. Recreation – The city has many parks that provide playground areas, waterparks, walking/bike trails, picnic areas and dog parks. In proximity to the City of Denton is Lake Lewisville. Lake Lewisville is one of the largest lakes in north Texas spanning 29,000 acres with 233 miles of shoreline. This recreational lake allows for fishing, skiing, swimming and recreational boating. There are numerous parks located around the lake. There are plenty of nice beaches, campgrounds, hiking and biking trails, golf SECTION I – APPRAISAL REPORT PARCELS 15 – MESQUITE RIDGE OWNER’S ASSOCIATION, INC. PAGE 19 courses, and other outdoor activities. Lewisville Lake is operated by the US Corps of Engineers and is a part of the Trinity Regional Project. The Trinity Regional Project is a cluster of seven local lakes: Bardwell, Benbrook, Grapevine, Joe Pool, Lavon, Lewisville and Ray Roberts. Lake Lewisville Source:www.lake-lewisville.org Source:www.swf-wc.usace.army.mil SECTION I – APPRAISAL REPORT PARCELS 15 – MESQUITE RIDGE OWNER’S ASSOCIATION, INC. PAGE 20 DEMAND GENERATORS MAP PUBLIC SERVICES The area is served by the Denton Independent School District. Electric service is provided by Denton Municipal Electric (DME), the City of Denton provides water and waste services and gas is provided by Atmos Energy. LAND USE Neighborhood land use is primarily commercial, institutional and industrial along major thoroughfares, with residential infill. RESIDENTIAL Residential housing is a mix of single-family (58%) and multi-family (42%) within the City of Denton. Multi-family continues to grow as 361 new units were added in 2015 and 607 new units were added in 2016.1 1 Statistical Trends and News of Denton, December 2016 SECTION I – APPRAISAL REPORT PARCELS 15 – MESQUITE RIDGE OWNER’S ASSOCIATION, INC. PAGE 21 DEMOGRAPHIC FACTORS A demographic profile of the subject, as provided by Site to Do Business, is presented in the following tables: SECTION I – APPRAISAL REPORT PARCELS 15 – MESQUITE RIDGE OWNER’S ASSOCIATION, INC. PAGE 22 OUTLOOK AND CONCLUSIONS The market area is in the growth stage of its life cycle. Given the history of the area and the growth trends, it is our opinion that property values will increase gradually, along with the national economy. SECTION I – APPRAISAL REPORT PARCELS 15 – MESQUITE RIDGE OWNER’S ASSOCIATION, INC. PAGE 23 SITE ANALYSIS An analysis of the property is particularly important in estimating its highest and best use. Following is a discussion of those site characteristics considered most important. PROPERTY LOCATION, SIZE AND SHAPE The subject is a 257,400 square-foot, irregular-shaped tract of land located at the northeast corner of Collins Street and Bernard Street, or 600-860 W. Collins Street, Denton, Denton, Denton County, TX 76201. We have relied on the plat map for our size determination of the land. LEGAL DESCRIPTION The subject is legally described as being a parcel of land situated in the Alexander Hill Survey, Abstract 623, Mesquite Ridge Townhouse Addition Plus, City of Denton, Denton County, Texas. PROPERTY TAX INFORMATION Real estate tax assessments are estimated by jurisdiction on a county basis for the subject. The subject lies in Denton County. Real estate taxes in this state and this jurisdiction represent ad valorem taxes, meaning a tax applied in proportion to value. State law requires that all real property be revalued at least every three years. The following is a summary of the subject tax account. Land Size Tax Assessed Account Tax Owner Name (SF)Year Gross per SF Imps.Value 122410 Mesquite Ridge Condos 257,396 2017 -$ -$ -$ -$ Total 257,396 2017 -$ -$ -$ -$ Land Value DENTON COUNTY MARKET AND ASSESSED VALUES ** It is not known why there is no assessed value. The tax account summary is located in the addenda. The 2017 composite tax rate for the subject is itemized as follows: DENTON COUNTY 2017 COMPOSITE TAX RATE Taxing Entity Tax Rate (/$100) Denton County City of Denton Denton ISD 0.237812 0.637856 1.540000 Total 2.415668 SECTION I – APPRAISAL REPORT PARCELS 15 – MESQUITE RIDGE OWNER’S ASSOCIATION, INC. PAGE 24 SITE ACCESS AND FRONTAGE STREET Bernard St. Collins St. Frontage ±337 feet ±820 feet Paving Asphalt Asphalt Curbs/Gutters Yes Yes Sidewalks Yes Not near subject Direction of Traffic North/South East/West Condition Average Average Traffic Levels Average Average Signals/Traffic Control Stop Signs Stop Signs Access Average Average Visibility/Exposure Average Average ENVIRONMENTAL STATEMENT We are unaware of any detrimental environmental conditions that affect the property. For the purposes of our analysis we have estimated the market value of the site as if it is free from any adverse environmental conditions. IMPROVEMENTS According to our inspection and Denton Central Appraisal District, the subject is currently improved with a condominium complex and related site improvements. There are 94 individually owned condominiums plus common areas. The main improvements are removed from the proposed acquisition areas. In addition, the client has instructed us that any site improvements disturbed or damaged by the proposed project will be repaired or replaced with similar or better materials and workmanship by the project contractor. SECTION I – APPRAISAL REPORT PARCELS 15 – MESQUITE RIDGE OWNER’S ASSOCIATION, INC. PAGE 25 UTILITIES The following is a summary of the subject’s utility service. UTILITY PROVIDER Water City of Denton Sewer City of Denton Electricity Denton Municipal Electric Natural Gas Atmos Energy Local Telephone Various FLOODPLAIN According to FEMA Map Panel 48121C0360G, dated April 18, 2011, the property appears to be outside of the 500-year floodplain. Please see “Exhibits” for a floodplain map. TOPOGRAPHY The property is an irregular-shaped tract with generally level terrain. SECTION I – APPRAISAL REPORT PARCELS 15 – MESQUITE RIDGE OWNER’S ASSOCIATION, INC. PAGE 26 ZONING The subject is located in the City of Denton, Texas and is zoned Downtown University Core with a land use category of DR-2, “Downtown Residential”. The purpose of the Downtown University Core District is to “encourage mixed use development within specified commercial areas of the district”. This district is a pedestrian friendly district. A zoning map and specific restrictions are presented below. Minimum Lot Area 4,000 SF Minimum Lot Width / Depth 40’ / 80’ Minimum Residential Unit Size 500 SF Maximum Lot Coverage 75% Maximum Dwelling Units/Acre 30 Required Parking Spaces: Mixed-density dwellings Retirement/Senior Living 1-bedroom 1.5 spaces/unit 2-bedroom 1.75 spaces/unit 3-bedroom 2 spaces/unit 4-bedroom 1 space/bedroom 2 spaces/unit + 1 space for each bedroom over (3) bedrooms SECTION I – APPRAISAL REPORT PARCELS 15 – MESQUITE RIDGE OWNER’S ASSOCIATION, INC. PAGE 27 OTHER LEGAL AND REGULATORY CONSTRAINTS According to our research and inspection of the property, it appears that the property contains mostly typical perimeter easements. Based on the title report provided by the client, the property is subject to the restrictions shown below: It appears that there are no easements, encumbrances or restrictions that would restrict the property from being developed to its highest and best use. SECTION I – APPRAISAL REPORT PARCELS 15 – MESQUITE RIDGE OWNER’S ASSOCIATION, INC. PAGE 28 HIGHEST AND BEST USE ANALYSIS The following summarizes the highest and best use of the property. PROCESS Before a property’s value can be concluded, the highest and best use of the property must be determined for both the subject site as though vacant, and for the property as currently improved (if applicable). The highest and best use must be: Legally permissible under the zoning laws and other restrictions that apply to the site. Physically possible for the site. Economically feasible. Capable of producing the highest net return on investment (i.e. highest value) from among the possible, permissible, and economically feasible uses. AS THOUGH VACANT LEGALLY PERMISSIBLE The subject is located in the City of Denton and is zoned Downtown University Core with a land use category of DR-2, “Downtown Residential”. The appraisers are unaware of any deed restrictions or any further legal limitations on the property which would inhibit the property from being developed to its highest and best use. PHYSICALLY POSSIBLE The size, location, access, frontage, availability of utilities, floodplain characteristics and topography of the site affect the uses to which it can be developed. The subject consists of approximately 257,400 square feet of land and is located at the northeast corner of Collins Street and Bernard Street in Denton. The subject is an irregular-shaped tract of land with generally level terrain. The property is unencumbered by the 500-year floodplain and has access to all utilities. Development of the property for a variety of uses is physically possible. SECTION I – APPRAISAL REPORT PARCELS 15 – MESQUITE RIDGE OWNER’S ASSOCIATION, INC. PAGE 29 FINANCIALLY FEASIBLE Proposed development must be financially feasible. Factors that must be considered include surrounding land uses, the supply and demand of the property type, the availability of financing, and the cost of land acquisition and building construction in relation to the property’s income producing capacity. Conformity is the appraisal principle that holds that real property values are created and sustained when the characteristics of the property conform to the demands of its current market. The styles and uses of the properties in an area may conform for several reasons, including economic pressures, the shared preference of owners of certain types of structures, amenities and services and the enforcement of uniform standards by means of zoning. Through local zoning ordinances, the government encourages conformity by restricting land use. Standards of conformity are set by the market and are therefore subject to change. Zoning codes, however, tend to establish conformity in basic property characteristics including size, style, and design. A particular market also sets standards of conformity, especially in terms of price. Usually the value of an over improved property will decline, or regress towards the value of surrounding, conforming properties, while the value of an under improved property may increase, or progress towards the prevailing market standards. Based on prevailing market conditions, land use patterns and the physical characteristics of the site, multi-family residential use is considered to be the most financially feasible use. MAXIMALLY PRODUCTIVE There does not appear to be any reasonably probable use of the site that would generate a higher residual land value than multi-family residential use. SECTION I – APPRAISAL REPORT PARCELS 15 – MESQUITE RIDGE OWNER’S ASSOCIATION, INC. PAGE 30 AS IMPROVED According to our inspection and Denton Central Appraisal District, the subject is currently improved with a condominium complex and related site improvements. The main improvements are removed from the proposed acquisition area. In addition, the client has instructed us that any site improvements disturbed or damaged by the proposed project will be repaired or replaced with similar or better materials and workmanship by the project contractor. Therefore, the improvements have not been valued as part of this appraisal, and a Highest and Best Use analysis as improved is not applicable. SECTION I – APPRAISAL REPORT PARCELS 15 – MESQUITE RIDGE OWNER’S ASSOCIATION, INC. PAGE 31 AS IF VACANT – AFTER ACQUISITION The part acquired consists of a 0.504 acre, or 21,973 square foot, permanent electric utility easement for the purposes of “erecting, operating, maintaining and servicing thereon one or more underground and/or above ground electric transmission and electric distribution power and/or communication lines, not to exceed 138-kv”. The proposed easement traverses the subject’s western and southern boundaries. The remainder after the acquisition will have the same highest and best use as before the acquisition. SECTION I – APPRAISAL REPORT PARCELS 15 – MESQUITE RIDGE OWNER’S ASSOCIATION, INC. PAGE 32 MARKET VALUE ESTIMATE OF THE WHOLE PROPERTY We have estimated the value of the whole property, as though vacant, by the sales comparison approach. The appraisers have used the Sales Comparison Approach to estimate the value of the subject in the preparation of this report. The valuation of the subject does not rely on the Income Capitalization Approach, since there is no periodic economic income benefits associated with the tract under its current use. Also, the Cost Approach to value is not applicable as the site is valued as unimproved. In order to derive an opinion of the market value of the subject land, assuming the property is available for development to its highest and best use, we have assembled sales data for similar properties in the area. After examining available sales data, we have selected the following land sale transactions as most comparable for this analysis. After an adjustment process, which compensates for the significant differences between these sales and the subject, these sales provide an indication of the subject’s land value. The identified sale prices have been adjusted to cash-equivalency, when appropriate. At the end of Section III is a Qualitative Adjustment Grid, which provides relevant data and shows the appropriate adjustments. For each element of comparison, each sale is rated as being superior, comparable, or inferior to the subject. In analyzing the individual sales, we have selected the price per square-foot (SF) of land as the operative unit of comparison. This is the unit of comparison most commonly quoted by brokers, sellers, and purchasers when discussing sales transactions and is considered the most relevant for the subject. A presentation of the land sales follows. SECTION I – APPRAISAL REPORT PARCELS 15 – MESQUITE RIDGE OWNER’S ASSOCIATION, INC. PAGE 33 Sale No.Location Date of Sale Size (SF) Effective Price per SF 1 Located along the west side of Fort Worth Dr., south of Collins Street,Denton,Denton County, Texas 04/19/16 88,645 $9.59 2 Located at the wrap-around corner of Garrison St. and FM 2181, Corinth, Denton County, Texas 09/08/15 397,734 $4.27 3 Located southwest of I35E,north of Wind River Lane, Denton, Denton County, Texas 05/13/15 301,697 $13.26 4 Located along the east and west sides of Avenue A at Underwood St., Denton, Denton County, Texas 09/11/14 77,739 $12.50 Subject:Located at the northeast corner of Collins St.and Bernard St., Denton, Denton County, Texas 257,400 SUMMARY OF COMPARABLE LAND SALES SECTION I – APPRAISAL REPORT PARCELS 15 – MESQUITE RIDGE OWNER’S ASSOCIATION, INC. PAGE 34 COMPARABLE SALES LOCATIONS SECTION I – APPRAISAL REPORT PARCELS 15 – MESQUITE RIDGE OWNER’S ASSOCIATION, INC. PAGE 35 Subject Sale #1 Sale #2 Sale #3 Sale #4 Location: Located at the northeast corner of Collins St. and Bernard St., Denton, Denton County, Texas Located along the west side of Fort Worth Dr., south of Collins Street, Denton, Denton County, Texas Located at the wrap- around corner of Garrison St. and FM 2181, Corinth, Denton County, Texas Located southwest of I35E, north of Wind River Lane, Denton, Denton County, Texas Located along the east and west sides of Avenue A at Underwood St., Denton, Denton County, Texas Sale Price/Effective Sale Price:$850,000 $1,700,000 $4,000,000 $971,738 Sale Date:4/19/2016 9/8/2015 5/13/2015 9/11/2014 Land Size (Gross Square Feet):257,400 88,645 397,734 301,697 77,739 Price/Square Foot:N/A $9.59 $4.27 $13.26 $12.50 Sale #1 Sale #2 Sale #3 Sale #4 Comparable Comparable Comparable Comparable Comparable Comparable Comparable Comparable Comparable Comparable Comparable Comparable Inferior Inferior Inferior Inferior Sale #1 Sale #2 Sale #3 Sale #4 Comparable Inferior Superior Comparable Inferior Inferior Inferior Comparable Superior Inferior Inferior Superior Comparable Comparable Comparable Inferior Superior Superior Comparable Superior Superior Inferior Comparable Comparable Land Value - Sales Comparison Approach Size Conditions of Sale Property Rights Conveyed Financing Terms Land Sales Summary Sales Adjustment Market Conditions Other Adjustments Net Other Adjustments Zoning/Utilities Functional Utility Location Access SECTION I – APPRAISAL REPORT PARCELS 15 – MESQUITE RIDGE OWNER’S ASSOCIATION, INC. PAGE 36 OVERVIEW OF ADJUSTMENTS Potential adjustments include the following categories, which typically affect sale prices. For each element of comparison, each sale has been rated as being superior, comparable, or inferior to the subject (see comparison grid on previous page). PROPERTY RIGHTS CONVEYED This adjustment considers the transfer of property rights, such as differences between properties owned in fee simple and in leased fee. FINANCING TERMS This adjustment considers the financing terms of a transaction, as compared to what is typical in the market. CONDITIONS OF SALE This adjustment considers the motivations of either the buyer or the seller in a transaction, e.g., when the comparable contains improvements with contributory value. MARKET CONDITIONS Real estate values normally change over time. This adjustment considers market differences occurring between the effective date of the appraisal and the sale date of the comparable, when values have appreciated or depreciated. LOCATION This adjustment considers the surrounding area influences, adjoining land uses, and overall location within the market area. ACCESS This adjustment considers access to the subject including the availability and amount of road frontage and multiple roadway access. SIZE This adjustment considers size. Typically, smaller sites will bring higher unit sales prices when compared to larger sites with similar characteristics. FUNCTIONAL UTILITY This adjustment considers physical attributes (i.e. water features, tree coverage, flood plain), site configuration, encumbrances, and/or topography. ZONING/UTILITIES This adjustment considers permissible uses under zoning laws and other legal restrictions that apply to a site as well as the availability of utilities. SECTION I – APPRAISAL REPORT PARCELS 15 – MESQUITE RIDGE OWNER’S ASSOCIATION, INC. PAGE 37 The above sales range from $4.27 per SF to $13.26 per SF. These sales are the most comparable to the subject in the market area. Based upon on our analysis of the comparables considered above, the appraisers estimate the market value to be $11.50 per SF as of October 17, 2017. WHOLE PROPERTY VALUATION SUMMARY Land: 257,400 SF @ $11.50/SF TOTAL VALUE AS A UNIT $ 2,960,100 $2,960,100 Based upon the previously discussed information, it is the opinion of the appraisers that the subject property has an estimated market value, via the Sales Comparison Approach, as of October 17, 2017 of: $2,960,100 TWO MILLION NINE HUNDRED SIXTY THOUSAND ONE HUNDRED DOLLARS. SECTION I – APPRAISAL REPORT PARCELS 15 – MESQUITE RIDGE OWNER’S ASSOCIATION, INC. PAGE 38 PARTIAL ACQUISITION METHODOLOGY The Texas Constitution permits the acquisition of private property for public use (eminent domain), but it requires that any such acquisition entitles the owner to just compensation and that it shall be by the due process of the law of the land. The law dictates that the value of the whole property, the value of the part acquired, the value of the remainder before the acquisition and the value after the acquisition be ascertained. The law allows for the offset of damages by enhancement if the enhancement is specific to the subject property. In the valuation of the proposed easement(s), the appraisers have taken into consideration the rights being acquired and the contributory value of the land affected by this project. The percentage of the fee value acquired in the acquisition of the easement is based on two basic effects: 1) the LEGAL ENCUMBRANCE of the easement rights and obligations; and 2) the PHYSICAL USE of the easement areas. SECTION I – APPRAISAL REPORT PARCELS 15 – MESQUITE RIDGE OWNER’S ASSOCIATION, INC. PAGE 39 VALUATION OF AREA TO BE ACQUIRED DESCRIPTION OF THE AREA TO BE ACQUIRED The part acquired consists of a 0.504 acre, or 21,973 square foot, permanent electric utility easement for the purposes of “erecting, operating, maintaining and servicing thereon one or more underground and/or above ground electric transmission and electric distribution power and/or communication lines, not to exceed 138- kv”. The proposed easement traverses the subject’s western and southern boundaries. The City of Denton has adopted The National Electric Safety Code under City of Denton Development Code, Subchapter 24, Section 35.24.1.3, which generally prohibits structures within 37.5 feet on either side of the centerline of an overhead transmission line. According to the code, however, for existing transmission lines and lines being reconstructed in developed areas, the utility may elect to perform NESC analysis and calculations to determine if safe and adequate reduced easement widths can be utilized in lieu of the standard 37.5 foot width. The primary purpose of the proposed easement is to satisfy this measure. See the following page for an aerial of the proposed easements. SECTION I – APPRAISAL REPORT PARCELS 15 – MESQUITE RIDGE OWNER’S ASSOCIATION, INC. PAGE 40 Source: GoogleEarth © 2017, Imagery date 1/25/2017 *LOCATIONS OF BOUNDARY AND EASEMENT ARE APPROXIMATE SECTION I – APPRAISAL REPORT PARCELS 15 – MESQUITE RIDGE OWNER’S ASSOCIATION, INC. PAGE 41 LAND VALUE OF THE AREA TO BE ACQUIRED The shape and size of the proposed acquisition is insufficient to represent an economic unit. The area to be acquired contributes to the whole, and it is the opinion of the appraisers that the estimated whole property land value of $11.50 per square foot would be applicable to the part acquired. With respect to the permanent easement, only a portion of the total bundle of rights (or fee simple estate) is being acquired as the property owner will still retain ownership of the areas in question. Thus, based upon the rights being acquired, the value estimated for the electric utility easement will be 75%. IMPROVEMENT VALUE According to our inspection and Denton Central Appraisal District, the subject is currently improved with a condominium complex and related site improvements. The main improvements are removed from the proposed acquisition area and the client has instructed us that any site improvements disturbed or damaged by the proposed project will be repaired or replaced with similar or better materials and workmanship by the project contractor. Therefore, the improvements have not been valued as part of this appraisal. However, the subject does contain a light pole in the southwest corner that will not be allowed to remain in the proposed easement area. This item is addressed in our Cost to Cure. SECTION I – APPRAISAL REPORT PARCELS 15 – MESQUITE RIDGE OWNER’S ASSOCIATION, INC. PAGE 42 SUMMARY The following table is a summary of the valuation of the part to be acquired. SUMMARY OF AREA TO BE ACQUIRED Estimated Land Value Electric Utility Easement 21,973 SF @ $11.50/SF @ 75% $189,517 Estimated Improvement Value None (+)$ 0 Total Value As A Unit $ 189,517 SECTION I – APPRAISAL REPORT PARCELS 15 – MESQUITE RIDGE OWNER’S ASSOCIATION, INC. PAGE 43 REMAINDER PROPERTY VALUATION SUMMARY REMAINDER BEFORE THE ACQUISITION Below is a chart representing the remainder from the whole property without the part to be acquired. The chart below is a mathematical subtraction of the part to be acquired, and does not consider the effect of the proposed acquisition. The appraisers have used the jurisdictional exception as shown in the Uniform Standards of Professional Appraisal & Practice to estimate the value of the remainder before the taking. SUMMARY OF REMAINDER BEFORE Whole Property Contributory Value of the Land $ 2,960,100 Total $ 2,960,100 Part Acquired Improvements $ 0 Electric Utility Easement $ 189,517 Total (-)$ 189,517 TOTAL VALUE AS A UNIT $2,770,583 SECTION I – APPRAISAL REPORT PARCELS 15 – MESQUITE RIDGE OWNER’S ASSOCIATION, INC. PAGE 44 REMAINDER AFTER THE ACQUISITION PROPERTY DESCRIPTION The remainder property will still contain 257,400 square feet of land. The ultimate question is, “will the remainder command a lower price due to the presence of the easements?” According to the survey, the electric utility easement is for an overhead electric transmission line. The part acquired consists of a 0.504 acre, or 21,973 square foot, permanent electric utility easement for the purposes of “erecting, operating, maintaining and servicing thereon one or more underground and/or above ground electric transmission and electric distribution power and/or communication lines, not to exceed 138- kv”. The proposed easement traverses the subject’s western and southern boundaries. The remainder after will be the same as the whole property, except it will be encumbered by a new electric utility easement. The remainder after the acquisition will have the same highest and best use as before the acquisition, which consists of multi-family use. The following table is a summary of the valuation of the remainder after. SUMMARY OF REMAINDER AFTER Remainder After Land Electric Utility Easement 235,427 SF 21,973 SF @ $11.50/SF @ $11.50/SF @ 25% $ 2,707,411 (+)$ 63,172 TOTAL VALUE AS A UNIT $2,770,583 SECTION I – APPRAISAL REPORT PARCELS 15 – MESQUITE RIDGE OWNER’S ASSOCIATION, INC. PAGE 45 DAMAGE SUMMARY DAMAGES As the value of the remainder before the acquisition is the same as the value of the remainder after the acquisition, damages do not exist. The following is a summary. SUMMARY OF DAMAGES Remainder Before $ 2,770,583 Remainder After $ 2,770,583 TOTAL VALUE AS A UNIT $ 0 SECTION I – APPRAISAL REPORT PARCELS 15 – MESQUITE RIDGE OWNER’S ASSOCIATION, INC. PAGE 46 COST TO CURE As previously mentioned, the subject contains a light pole in the southwest corner that will not be allowed to remain in the proposed easement area (pictured below). As a reasonable cost to cure, the appraisers have considered a flood light replacement to be affixed on the apartment building proximate to the current light pole. We have utilized Marshall Valuation Service index as our source for costs. We have also added a 15% entrepreneurial incentive. See below for an explanation of our costs: Floodlight: $1,500 + 15% = $1,725. SECTION I – APPRAISAL REPORT PARCELS 15 – MESQUITE RIDGE OWNER’S ASSOCIATION, INC. PAGE 47 TOTAL COMPENSATION The following is a summary of the estimated total compensation for the subject property, described herein, as of October 17, 2017: TOTAL COMPENSATION SUMMARY Part to be acquired Cost to Cure $ 189,517 (+)$ 1,725 TOTAL COMPENSATION $191,242 The appraisers have retained all information regarding this appraisal in the file. Please contact us if we can be of further assistance in this matter. Sincerely, O’BRIEN REALTY ADVISORS REAL ESTATE CONSULTANTS & APPRAISERS Mike C. O’Brien State of Texas Certification #TX-1331171-G Gina Cannova Phalen State of Texas Certification #TX-1380648-G PARCELS 15 – MESQUITE RIDGE OWNER’S ASSOCIATION, INC. PAGE 48 SECTION II – EXHIBITS SECTION II - EXHIBITS PARCELS 15 – MESQUITE RIDGE OWNER’S ASSOCIATION, INC. PAGE 49 AREA MAP SECTION II - EXHIBITS PARCELS 15 – MESQUITE RIDGE OWNER’S ASSOCIATION, INC. PAGE 50 MARKET AREA MAP SECTION II - EXHIBITS PARCELS 15 – MESQUITE RIDGE OWNER’S ASSOCIATION, INC. PAGE 51 PROPERTY AERIAL Source: GoogleEarth © 2017, Imagery date 1/25/2017 *LOCATIONS OF BOUNDARY AND EASEMENT ARE APPROXIMATE SECTION II - EXHIBITS PARCELS 15 – MESQUITE RIDGE OWNER’S ASSOCIATION, INC. PAGE 52 DME EASEMENT SECTION II - EXHIBITS PARCELS 15 – MESQUITE RIDGE OWNER’S ASSOCIATION, INC. PAGE 53 DME EASEMENT SECTION II - EXHIBITS PARCELS 15 – MESQUITE RIDGE OWNER’S ASSOCIATION, INC. PAGE 54 DME EASEMENT SECTION II - EXHIBITS PARCELS 15 – MESQUITE RIDGE OWNER’S ASSOCIATION, INC. PAGE 55 DME EASEMENT SECTION II - EXHIBITS PARCELS 15 – MESQUITE RIDGE OWNER’S ASSOCIATION, INC. PAGE 56 SECTION II - EXHIBITS PARCELS 15 – MESQUITE RIDGE OWNER’S ASSOCIATION, INC. PAGE 57 SECTION II - EXHIBITS PARCELS 15 – MESQUITE RIDGE OWNER’S ASSOCIATION, INC. PAGE 58 DME EASEMENT SECTION II - EXHIBITS PARCELS 15 – MESQUITE RIDGE OWNER’S ASSOCIATION, INC. PAGE 59 DME EASEMENT SECTION II - EXHIBITS PARCELS 15 – MESQUITE RIDGE OWNER’S ASSOCIATION, INC. PAGE 60 DME EASEMENT SECTION II - EXHIBITS PARCELS 15 – MESQUITE RIDGE OWNER’S ASSOCIATION, INC. PAGE 61 DME EASEMENT SECTION II - EXHIBITS PARCELS 15 – MESQUITE RIDGE OWNER’S ASSOCIATION, INC. PAGE 62 PLAT SECTION II - EXHIBITS PARCELS 15 – MESQUITE RIDGE OWNER’S ASSOCIATION, INC. PAGE 63 PROJECT MAP SECTION II - EXHIBITS PARCELS 15 – MESQUITE RIDGE OWNER’S ASSOCIATION, INC. PAGE 64 DENTON APPRAISAL DISTRICT SECTION II - EXHIBITS PARCELS 15 – MESQUITE RIDGE OWNER’S ASSOCIATION, INC. PAGE 65 SECTION II - EXHIBITS PARCELS 15 – MESQUITE RIDGE OWNER’S ASSOCIATION, INC. PAGE 66 FLOOD PLAIN MAP Source: GoogleEarth © 2017 with FEMA Overlay SECTION II - EXHIBITS PARCELS 15 – MESQUITE RIDGE OWNER’S ASSOCIATION, INC. PAGE 67 SUBJECT PHOTOS Looking west towards the subject and approximate location of the proposed easement area. Looking west along proposed electric easement from southeast corner of the subject. SECTION II - EXHIBITS PARCELS 15 – MESQUITE RIDGE OWNER’S ASSOCIATION, INC. PAGE 68 SUBJECT PHOTOS Looking east along approximate location of the proposed electric easement area. Looking east towards southeast corner of subject. SECTION II - EXHIBITS PARCELS 15 – MESQUITE RIDGE OWNER’S ASSOCIATION, INC. PAGE 69 SUBJECT PHOTOS Looking east along approximate location of easement from southwest corner of the subject. Looking southerly from the northwest corner of the subject along approximate location of proposed easement. SECTION II - EXHIBITS PARCELS 15 – MESQUITE RIDGE OWNER’S ASSOCIATION, INC. PAGE 70 SUBJECT PHOTOS Looking east along Collins Street from ROW southwest of the subject. Looking north along Bernard Street from ROW southwest of subject. SECTION III – COMPARABLE SALES ANALYSIS PARCELS 15 – MESQUITE RIDGE OWNER’S ASSOCIATION, INC. PAGE 71 SECTION III – COMPARABLE SALES ANALYSIS SECTION III – COMPARABLE SALES ANALYSIS PARCELS 15 – MESQUITE RIDGE OWNER’S ASSOCIATION, INC. PAGE 72 SALES COMPARISON APPROACH The sales comparison approach is a set of procedures in which a value indication is developed by comparing the subject to similar properties that have recently sold or are listed for sale. The steps taken to apply the sales comparison approach are as follows: Research recent sales of comparable properties; Select sales most similar to the subject and assemble pertinent data; Compare the sales to the subject under various elements of comparison and adjust the sale prices to compensate for differences that affect value; Reconcile the adjusted prices of the sales into a value indication for the subject. In order to derive an opinion of the market value of the subject land, assuming the property is available for development to its highest and best use, we have assembled sales data for similar properties in the area. After examining available sales data, we have selected the following land sale transactions as most comparable for this analysis. After an adjustment process, which compensates for the significant differences between these sales and the subject, these sales provide an indication of the subject’s land value. In analyzing the individual sales, we have selected the price per square foot of land as the operative unit of comparison. This is the unit of comparison most commonly quoted by brokers, sellers, and purchasers when discussing sales transactions and is considered the most relevant for the subject. A presentation of the land sales follows. SECTION III – COMPARABLE SALES ANALYSIS PARCELS 15 – MESQUITE RIDGE OWNER’S ASSOCIATION, INC. PAGE 73 Land Sale No. 1 Property Identification Property Type Multi-Family Residential Address 510 Fort Worth Drive, Denton, Denton County, Texas Sale Data Grantor CC Ballard Holdings, LLC Grantee Five Ten Villas, LLC Sale Date April 19, 2016 Deed Book/Page 2016-44257 Property Rights Fee simple Financing Cash to seller Verification Broker Effective Sale Price $850,000 Land Data Zoning Downtown Commercial-General (150 du/acre) Topography Generally level Utilities All to site Shape Near rectangular Land Size Information Gross Land Size 2.035 Acres or 88,645 SF Indicators Effective Price/Gross SF Remarks $9.59 Buyer intends to develop multi-family residential. SECTION III – COMPARABLE SALES ANALYSIS PARCELS 15 – MESQUITE RIDGE OWNER’S ASSOCIATION, INC. PAGE 74 Land Sale No. 2 Property Identification Property Type Multi-Family Residential Address Wrap-around corner of Garrison St. and FM 2181, Corinth, Denton County, Texas Sale Data Grantor Corinth 2181 JV Grantee Oxford 2181, Inc. Sale Date September 8, 2015 Deed Book/Page 2015-104828, Denton County Deed Records Property Rights Fee simple Financing Cash to seller Verification Seller Effective Sale Price $1,700,000 Land Data Zoning MX-R – Mixed-use with Residential Topography Generally level Utilities All to site Shape Mostly-rectangular Land Size Information Gross Land Size 9.131 Acres or 397,734 SF Indicators Effective Price/Gross SF $4.27 Remarks The property is being developed into 240 multi-family units in five buildings plus 7,700 square feet of retail on the ground floor of two of the buildings. SECTION III – COMPARABLE SALES ANALYSIS PARCELS 15 – MESQUITE RIDGE OWNER’S ASSOCIATION, INC. PAGE 75 Land Sale No. 3 Property Identification Property Type Multi-Family Residential Address 3200 S. Interstate 35E, Denton, Denton County, Texas Sale Data Grantor ERI-Denton 38 Land, L.P. Grantee Movie Theater Apartments, Ltd. Sale Date May 12, 2015 Deed Book/Page 2015-51070, Denton County Deed Records Property Rights Fee simple Financing Cash to seller Verification Buyer/Developer Effective Sale Price $4,000,000 Land Data Zoning RCC-D – Regional Center Commercial Downtown (100 du/acre) Topography Generally level Utilities All to site Shape Irregular Land Size Information Gross Land Size 6.926 Acres or 301,697 SF Indicators Effective Price/Gross SF $13.26 Remarks The property is being developed into Epic Apartments at Unicorn Lake. The developer included apx. 10,000 square feet of retail to accommodate the required parking. SECTION III – COMPARABLE SALES ANALYSIS PARCELS 15 – MESQUITE RIDGE OWNER’S ASSOCIATION, INC. PAGE 76 Land Sale No. 4 Property Identification Property Type Multi-Family Residential / Commercial Address 1216-1220 Avenue A and 1328 Underwood St., Denton, Denton County, Texas Sale Data Grantor Grantee Chapel Hill Commercial Investments, LLC / Centennial Plaza Partners, Ltd. Sale Date Ave A/Underwood LLC Deed Book/Page September 11, 2014 and March 10, 2016 Property Rights 2014-93731 / 2016-28557 Financing Fee simple Verification Cash to seller Broker Effective Sale Price $971,738 Land Data Zoning Topography DR-2 – Downtown Residential DC-G – Downtown Commercial Utilities Generally level Shape All to site Triangular and Rectangular Land Size Information Gross Land Size 1.785 Acres or 77,739 SF Indicators Effective Price/Gross SF $12.50 Remarks The buyer has since developed apartments on the triangular parcel. Although the Grantor names differ, the broker advised us that these were the same parties and the sale price for both parcels was negotiated at the same time. The square parcel had some title issues that delayed closing until March 2016. SECTION III – COMPARABLE SALES ANALYSIS PARCELS 15 – MESQUITE RIDGE OWNER’S ASSOCIATION, INC. PAGE 77 QUALITATIVE ADJUSTMENT GRID Subject Sale #1 Sale #2 Sale #3 Sale #4 Location: Located at the northeast corner of Collins St. and Bernard St., Denton, Denton County, Texas Located along the west side of Fort Worth Dr., south of Collins Street, Denton, Denton County, Texas Located at the wrap- around corner of Garrison St. and FM 2181, Corinth, Denton County, Texas Located southwest of I35E, north of Wind River Lane, Denton, Denton County, Texas Located along the east and west sides of Avenue A at Underwood St., Denton, Denton County, Texas Sale Price/Effective Sale Price:$850,000 $1,700,000 $4,000,000 $971,738 Sale Date:4/19/2016 9/8/2015 5/13/2015 9/11/2014 Land Size (Gross Square Feet):257,400 88,645 397,734 301,697 77,739 Price/Square Foot:N/A $9.59 $4.27 $13.26 $12.50 Sale #1 Sale #2 Sale #3 Sale #4 Comparable Comparable Comparable Comparable Comparable Comparable Comparable Comparable Comparable Comparable Comparable Comparable Inferior Inferior Inferior Inferior Sale #1 Sale #2 Sale #3 Sale #4 Comparable Inferior Superior Comparable Inferior Inferior Inferior Comparable Superior Inferior Inferior Superior Comparable Comparable Comparable Inferior Superior Superior Comparable Superior Superior Inferior Comparable Comparable Land Value - Sales Comparison Approach Size Conditions of Sale Property Rights Conveyed Financing Terms Land Sales Summary Sales Adjustment Market Conditions Other Adjustments Net Other Adjustments Zoning/Utilities Functional Utility Location Access PARCELS 15 – MESQUITE RIDGE OWNER’S ASSOCIATION, INC. PAGE 78 SECTION IV – CERTIFICATION OF THE APPRAISAL SECTION IV – CERTIFICATION OF THE APPRAISAL PARCELS 15 – MESQUITE RIDGE OWNER’S ASSOCIATION, INC. PAGE 79 We certify that, to the best of our knowledge and belief: 1. The statements of fact contained in this report are true and correct. 2. The reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions, and are our personal, impartial, and unbiased professional analyses, opinions, and conclusions. 3. We have no present or prospective interest in the property that is the subject of this report, and we have no personal interest with respect to the parties involved. 4. We have performed no services, as an appraiser or in any other capacity, regarding the property that is subject of this report within the three-year period immediately preceding acceptance of this assignment. 5. We have no bias with respect to the property that is the subject of this report or the parties involved with this assignment. 6. Our engagement in this assignment was not contingent upon developing or reporting predetermined results. 7. Our 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. 8. Our analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the requirements of the Code of Professional Ethics and Standards of Professional Appraisal Practice of the Appraisal Institute, which includes the Uniform Standards of Professional Appraisal Practice (USPAP). 9. Mike O’Brien and Gina Cannova Phalen made a personal inspection of the property that is the subject of this report. 10. No one has provided significant professional assistance to the persons signing this report. 11. This appraisal is not based on a requested minimum valuation, a specific valuation, or the approval of a loan. SECTION IV – CERTIFICATION OF THE APPRAISAL PARCELS 15 – MESQUITE RIDGE OWNER’S ASSOCIATION, INC. PAGE 80 12. We have not relied on unsupported conclusions relating to characteristics such as race, color, religion, national origin, gender, marital status, familial status, age, receipt of public assistance income, handicap, or an unsupported conclusion that homogeneity of such characteristics is necessary to maximize value. 13. It is our opinion that the subject does not include any enhancement in value as a result of any natural, cultural, agricultural or scientific influences retrospective or prospective. 14. We have extensive experience in appraising properties similar to the subject and are in compliance with the Competency Rule of USPAP. 15. The use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representatives. 16. As of the date of this report, Mike O’Brien and Gina Cannova Phalen have completed the Standards and Ethics Education Requirement for Candidates of the Appraisal Institute. Mike C. O’Brien State of Texas Certification #TX-1331171-G Gina Cannova Phalen State of Texas Certification #TX-1380648-G PARCELS 15 – MESQUITE RIDGE OWNER’S ASSOCIATION, INC. PAGE 81 SECTION V – ASSUMPTIONS AND LIMITING CONDITIONS AND DEFINITIONS SECTION V – ASSUMPTIONS AND LIMITING CONDITIONS & DEFINITIONS PARCELS 15 – MESQUITE RIDGE OWNER’S ASSOCIATION, INC. PAGE 82 ASSUMPTIONS AND LIMITING CONDITIONS In conducting this appraisal, we have assumed, except as otherwise noted in our report, as follows: 1. The title is marketable and free and clear of all liens, encumbrances, encroachments, easements and restrictions. The property is under responsible ownership and competent management and is available for its highest and best use. 2. There are no existing judgments or pending or threatened litigation that could affect the value of the property. This excludes the project which is addressed in this report. 3. There are no hidden or undisclosed conditions of the land or of the improvements that would render the property more or less valuable. Furthermore, there is no asbestos in the property. 4. The property is in compliance with all applicable building, environmental, zoning, and other federal, state and local laws, regulations and codes. 5. An appraisal is inherently subjective and represents our opinion as to the value of the property appraised. 6. The conclusions stated in our appraisal apply only as of the effective date of the appraisal, and no representation is made as to the affect of subsequent events. 7. No changes in any federal, state or local laws, regulations or codes (including, without limitation, the Internal Revenue Code) are anticipated. 8. No environmental impact studies were either requested or made in conjunction with this appraisal, and we reserve the right to revise or rescind any of the value opinions based upon any subsequent environmental impact studies. If any environmental impact statement is required by law, the appraisal assumes that such statement will be favorable and will be approved by the appropriate regulatory bodies. 9. We are not required to give testimony or to be in attendance in court or any government or other hearing with reference to the property without written contractual arrangements having been made relative to such additional employment. 10. We have made no survey of the property and assume no responsibility in connection with such matters. Any sketch or survey of the property included in this report is for illustrative purposes only and should not be considered to be SECTION V – ASSUMPTIONS AND LIMITING CONDITIONS & DEFINITIONS PARCELS 15 – MESQUITE RIDGE OWNER’S ASSOCIATION, INC. PAGE 83 scaled accurately for size. The appraisal covers the property as described in this report, and the areas and dimensions set forth are assumed to be correct. 11. No opinion is expressed as to the value of subsurface oil, gas or mineral rights, if any, and we have assumed that the property is not subject to surface entry for the exploration or removal of such materials, unless otherwise noted in our appraisal. 12. We accept no responsibility for considerations requiring expertise in other fields. Such considerations include, but are not limited to, legal descriptions and other legal matters, geologic considerations, such as soils and seismic stability, and civil, mechanical, electrical, structural and other engineering and environmental matters. 13. The distribution of the total valuation in this report between land and improvements applies only under the reported highest and best use of the property. The allocations of value for land and improvements must not be used in conjunction with any other appraisal and are invalid if so used. This appraisal report shall be considered only in its entirety. No part of this appraisal report shall be utilized separately or out of context. 14. Neither all nor any part of the contents of this report (especially any conclusions as to value, the identity of the appraisers, or any reference to the Appraisal Institute) shall be disseminated through advertising media, public relations media, news media or any other means of communication (including without limitation prospectuses, private offering memoranda and other offering material provided to prospective investors) without the prior written consent of the appraisers. 15. Information, estimates and opinions contained in this report, obtained from sources outside of the office of the undersigned, are assumed to be reliable and have not been independently verified. 16. Any income and expense estimates contained in this appraisal report are used only for the purpose of estimating value and do not constitute predictions of future operating results. 17. No assurance is provided that the methodology and/or results of the appraisal will not be successfully challenged by the Internal Revenue Service. In particular, the methodology for appraising certain types of properties, including without limitation, government subsidized housing, which has been the subject of debate. SECTION V – ASSUMPTIONS AND LIMITING CONDITIONS & DEFINITIONS PARCELS 15 – MESQUITE RIDGE OWNER’S ASSOCIATION, INC. PAGE 84 18. If the property is subject to one or more leases, any estimate of residual value contained in the appraisal may be particularly affected by significant changes in the condition of the economy, of the real estate industry, or of the appraised property at the time these leases expire or otherwise terminate. 19. No consideration has been given to personal property located on the premises or to the cost of moving or relocating such personal property; only the real property has been considered. 20. The current purchasing power of the dollar is the basis for the value stated in our appraisal; we have assumed that no extreme fluctuations in economic cycles will occur. 21. The value found herein is subject to these and to any other assumptions or conditions set forth in the body of this report but which may have been omitted from this list of Assumptions and Limiting Conditions. 22. The analyses contained in this report necessarily incorporate numerous estimates and assumptions regarding property performance, general and local business and economic conditions, the absence of material changes in the competitive environment and other matters. Some estimates or assumptions, however, inevitably will not materialize, and unanticipated events and circumstances may occur; therefore, actual results achieved during the period covered by our analysis will vary from our estimates, and the variations may be material. 23. The Americans with Disabilities Act (ADA) became effective January 26, 1992. We have not made a specific survey or analysis of this property to determine whether the physical aspects of the improvements meet the ADA accessibility guidelines. In as much as compliance matches each owner's financial ability with the cost to cure the non-conforming physical characteristics of a property, we cannot comment on compliance to ADA. Given that compliance can change with each owner's financial ability to cure non-accessibility, the value of the subject does not consider possible non-compliance. Specific study of both the owner's financial ability and the cost to cure any deficiencies would be needed for the Department of Justice to determine compliance. 24. This appraisal report has been prepared for the exclusive benefit of Freese and Nichols, Inc.; DME; 7 Arrows Land Staff, LLC; and their agents, representatives and assigns. It may not be used or relied upon by any other party. All parties who use or rely upon any information in this report without our written consent do so at their own risk. SECTION V – ASSUMPTIONS AND LIMITING CONDITIONS & DEFINITIONS PARCELS 15 – MESQUITE RIDGE OWNER’S ASSOCIATION, INC. PAGE 85 25. No studies have been provided to us indicating the presence or absence of hazardous materials on the site or in the improvements, and our valuation is predicated upon the property being free and clear of any environment hazards. 26. We have not been provided with any evidence or documentation as to the presence or location of any wetlands. Wetlands generally include swamps, marshes, bogs, and similar areas. We are not qualified to detect such areas. The presence of wetlands may affect the value of the property, and the value conclusion is predicated on the assumption that wetlands are non-existent or minimal. SECTION V – ASSUMPTIONS AND LIMITING CONDITIONS & DEFINITIONS PARCELS 15 – MESQUITE RIDGE OWNER’S ASSOCIATION, INC. PAGE 86 SPECIAL ASSUMPTIONS AND LIMITING CONDITIONS In addition to the previously discussed assumptions and limiting conditions, the appraisers are compelled to outline the following special assumptions and limiting conditions: The client has indicated that a radius up to 30 feet could be necessary for installation of proposed transmission poles, but that existing right-of-way could be used to reduce the radius impacting the property. The appraisers were instructed to assume that any new poles will be in the areas indicated on the map provided by the client (see Exhibits). In addition, the proposed easement is assumed to be the limit of required installation space on the subject property. The client has indicated a construction period of 90 days, or 3 months. The client has indicated that access to the property will not be denied during construction. The client has also indicated that any wood patio fencing adjacent to subject condominiums will be allowed to remain in the easement area and will not be impacted by construction. Finally, the client has indicated that the property within the proposed easement areas will be restored to similar or better condition after construction. SECTION V – ASSUMPTIONS AND LIMITING CONDITIONS & DEFINITIONS PARCELS 15 – MESQUITE RIDGE OWNER’S ASSOCIATION, INC. PAGE 87 DEFINITIONS The definitions included in this Addendum have been extracted, solely or in combination, from definitions and descriptions printed in: The Uniform Standards of Professional Appraisal Practice 2016-2017 Edition (USPAP); The Dictionary of Real Estate Appraisal, Sixth Edition, Appraisal Institute, Chicago, Illinois, 2015 (Dictionary); The Appraisal of Real Estate, Fourteenth Edition, Appraisal Institute, Chicago, Illinois, 2013; and/or Appraisal The act or process of developing an opinion of value; an opinion of value. (USPAP) Across the Fence Method A land valuation method often used in the appraisal of corridors. The across the fence method is used to develop a value opinion based on comparison to abutting land. (Dictionary) Assemblage The combining of two or more parcels, usually but not necessarily contiguous, into one ownership or use. (Dictionary) Effective Date of the Appraisal The date at which the value opinion is an appraisal applies, which may or may not be the date of inspection; the date of the market conditions that provide the context for the value opinion. Current appraisals occur when the effective date of the appraisal is contemporaneous with the date of the report. Prospective value opinions (effective date of the appraisal subsequent to the date of the report) are intended to reflect the current expectations and perceptions along with available factual data. Retrospective value opinions are likely to apply as of a specific historic date; the opinions are intended to reflect the expectations and perceptions of market participants at the specified date, along with available factual data. Data subsequent to the effective date may be considered in estimating a retrospective value as a confirmation of trends. (Dictionary and USPAP) Fee Simple Estate Absolute ownership unencumbered by any other interest or estate, subject only to the limitations imposed by the governmental powers of taxation, eminent domain, police power, and escheat. (Dictionary) SECTION V – ASSUMPTIONS AND LIMITING CONDITIONS & DEFINITIONS PARCELS 15 – MESQUITE RIDGE OWNER’S ASSOCIATION, INC. PAGE 88 Insurable Value The Appraisal Institute defines insurable value as the value based on the replacement and/or reproduction cost of physical items that are subject to loss from hazards. It is that portion of an asset or asset group that is acknowledged or recognized under the provisions of an applicable loss insurance policy. Marshall & Swift defines insurable value as the “replacement or reproduction cost less deterioration and non-insurable items.” (MVS and Dictionary) Leased Fee Estate An ownership interest held by a landlord with the rights of use and occupancy conveyed by lease to others. The rights of the lessor (the leased fee owner) and the leased fee are specified by contract terms contained within the lease. (Dictionary) Leasehold Estate The interest held by the lessee (the tenant or renter) through a lease conveying the rights of use and occupancy for a stated term under certain conditions. (Dictionary) Market Value Market value is the price which the property would bring when it is offered for sale by one who desires, but is not obliged to sell, and is bought by one who is under no necessity of buying it, taking into consideration all of the uses to which it is reasonably adaptable and for which it either is or in all reasonable probability will become available in the reasonable future. City of Austin v. Cannizzo, 153 Tex. 324, 267 S.W.2d 808, 815 (1954). PARCELS 15 – MESQUITE RIDGE OWNER’S ASSOCIATION, INC. PAGE 89 SECTION VI – QUALIFICATIONS OF THE APPRAISERS SECTION VI – QUALIFICATIONS OF THE APPRAISERS PARCELS 15 – MESQUITE RIDGE OWNER’S ASSOCIATION, INC. PAGE 90 PROFESSIONAL QUALIFICATIONS OF MIKE C. O’BRIEN EXPERIENCE: Mike C. O’Brien is President of O’Brien Realty Advisors, LLC, a full service real estate consulting and appraisal firm. Mr. O’Brien has performed appraisals on various properties including, but not limited to, shopping centers, apartment complexes, industrial facilities, raw and developed land, office towers and complexes, restaurants, and mixed-use developments. Mr. O’Brien has valued and consulted on properties in Alabama, Arkansas, Illinois, Louisiana, Mississippi, Missouri, New Mexico, Ohio, Oklahoma, Texas and Wisconsin. He has provided consultation, feasibility studies, and has worked extensively on complex eminent domain assignments of all types of properties. Mr. O’Brien has worked on valuations of easement interest, partial interest, and undivided interest. Assignments have also included consultation for both ad valorem and estate tax purposes. He has testified in eminent domain proceedings before Texas courts and before numerous Special Commissioners hearings in various counties throughout Texas. In addition, Mr. O’Brien has been a guest lecturer to TCU’s real estate appraisal course since 2008. Mr. O’Brien is a 1997 graduate from The University of Texas in Austin with a Bachelor of Science degree in Economics and a minor in Business Foundations. Prior to the formation of his company, he was a Principal with Korman O’Brien, LLC. Mr. O’Brien was a Senior Analyst with Integra Realty Resources’ Fort Worth office from January 2003 to 2008. Prior to his work with Integra, Mr. O’Brien trained with Lewis Realty Advisors and Arthur Andersen and Company in Houston, Texas as a real estate associate on various appraisal projects. During college, he trained with the development firm of Barshop and Oles, Inc. in Austin, Texas as a real estate intern. Currently, Mr. O’Brien is an advanced candidate progressing toward obtaining his MAI designation with the Appraisal Institute. PROFESSIONAL ACTIVITIES: Texas State Certified General Real Estate Appraiser Certificate No. TX-1331171-G Also licensed in Arkansas, Louisiana, New Mexico and Oklahoma Appraisal Institute – Candidate for Designation Program - Public Relations Committee, Central Texas Chapter (2010-2012) Member – International Right of Way, Chapter 36 - Membership Committee Chairman (2013 – 2015) - Steve Baggett Memorial Golf Tournament Committee Co-Chair (2013 & 2015) Member – Greater Fort Worth Real Estate Council - Membership Committee (2011 – 2014) Member – Tarrant County Bar Association Member – Fort Worth Chamber of Commerce Leadership Fort Worth, Class of 2008 Overton Park Neighborhood Association – Parks Committee (2009 – 2012) EDUCATION: Bachelor of Science, Economics, Minor in Business Foundations The University of Texas in Austin, 1997 Coursework accredited by the Appraisal Institute, The University of Texas, and the State of Texas SECTION VI – QUALIFICATIONS OF THE APPRAISERS PARCELS 15 – MESQUITE RIDGE OWNER’S ASSOCIATION, INC. PAGE 91 SECTION VI – QUALIFICATIONS OF THE APPRAISERS PARCELS 15 – MESQUITE RIDGE OWNER’S ASSOCIATION, INC. PAGE 92 PROFESSIONAL QUALIFICATIONS OF GINA CANNOVA PHALEN EXPERIENCE: Gina L. Cannova Phalen is a Senior Analyst with O’Brien Realty Advisors, LLC, a full service real estate consulting and appraisal firm. Ms. Phalen has consulted on various eminent domain assignments for all types of real estate. Prior to joining O’Brien Realty Advisors, LLC, Ms. Phalen was an analyst with LandPro Valuation in Mesa, Arizona and Sell and Associates in Tempe, Arizona. Ms. Phalen is a graduate of Arizona State University with a Bachelor of Business Administration degree in Supply Chain Management. PROFESSIONAL ACTIVITIES: Texas State Certified General Real Estate Appraiser No. TX-1380648 Appraisal Institute – Practicing Affiliate International Right of Way, Chapter 36 – Member CREW Network (Commercial Real Estate Women), Fort Worth Chapter CREW Communications Committee Co-Chair- 2016-2017 City of Southlake, Texas – Building Board of Appeals (2016-2018) City of Southlake, Texas – Zoning Board of Adjustment (2016-2018) EDUCATION: Bachelor of Business Administration, Supply Chain Management Arizona State University, 1997 Coursework accredited by the Appraisal Institute and/or TALCB including: Uniform Standards of Professional Appraisal Practice Mastering Unique and Complex Properties Expert Witness for Commercial Appraisers General Appraiser Sales Comparison Approach General Appraiser Site Valuation and Cost Approach General Appraiser Market Analysis and Highest & Best Use General Appraiser Income Approach Parts I & II Eminent Domain Conference, CLE International – 2016 SECTION VI – QUALIFICATIONS OF THE APPRAISERS PARCELS 15 – MESQUITE RIDGE OWNER’S ASSOCIATION, INC. 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