HomeMy WebLinkAbout24-378 Fire Station 3232 Teasley Ln. Denton TX
APPRAISAL REPORT
OFFICE WAREHOUSE
3232 Teasley Lane
Denton, Texas 76210
Report Date: September 4, 2024
Prepared For
Mark Mastroleo
City of Denton
401 North Elm Street
Denton, Texas 76201
Prepared By
Richard McBride
Pyles Whatley
16910 Dallas Parkway, Suite 100
Dallas, Texas 75248
16910 Dallas Parkway, Suite 100 Dallas, Texas 75248
Ofc: 214.340.5880 www.PylesWhatley.com Appraisals@pyleswhatley.com
September 4, 2024
Mark Mastroleo
City of Denton
401 North Elm Street
Denton, Texas 76201
Re: An appraisal of an office warehouse (fire station) located at 3232 Teasley Lane, Denton, Denton
County, Texas 76210.
Dear Mr. Mastroleo:
At your request, we submit this appraisal report to estimate the market value of the above referenced
property. We have made an on-site inspection of the property and considered factors pertinent to and
indicative of value including the Denton area characteristics, market area data and trends, locational
amenities, highest and best use, and other elements of value. This report conforms to USPAP standards.
The appraisal problem, as applied to the subject, is to determine the property’s market value. “The most
probable price, as of a specified date, in cash, or in terms equivalent to cash, or in other precisely revealed
terms, for which the specified 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.” The Appraisal of Real Estate, 15th
Edition, 2020, Appraisal Institute, Chicago, Illinois
This appraisal provides an appraisal report in compliance with the Uniform Standards of Professional
Appraisal Practice (USPAP), as provided by the Appraisal Foundation. Our opinion of value for the
subject is effective as of August 29, 2024, and the methodology and terminology used throughout the
report includes the following:
Market Value, As Is on the Appraisal Date – An opinion of the market value of a property in
the condition observed upon inspection and as it physically and legally exists without hypothetical
conditions, assumptions, or qualifications as of the date the appraisal is prepared.
Our opinion of the market value for the subject is as follows:
Market Value Opinion
Fee Simple, As Is $1,050,000
Page 2
Mr. Mark Mastroleo
September 4, 2024
The following report sets forth a description of the subject property, along with a summary of the market
data considered and the conclusions derived from such data. Your attention is directed to the general
assumptions and limiting conditions of this appraisal.
EXTRAORDINARY ASSUMPTIONS
The property is currently platted with the abutting property. For the purposes of this appraisal, the subject
and the abutting property have been split and valued separately.
This appraisal assumes that all of the information obtained for analysis is accurate; this information has
been verified to the extent possible by the appraiser.
If you should have questions concerning any portion of this appraisal, please contact our office.
Respectfully submitted,
PYLES WHATLEY
Richard McBride
State of Texas License #TX-1380335-G
SUMMARY OF IMPORTANT FACTS AND CONCLUSIONS
Subject Property
Location
Denton, Denton County, Texas
Land Area (Measurements)52,116 SF or
Zoning
Gross Building Area 6,038 SF
Occupancy
Year of Construction 1993
Reasonable Exposure Time 12 months
Reasonable Marketing Period 12 months
Market Value Indicators As Is
Cost Approach N/A
Sales Comparison Approach $1,025,000
Income Capitalization Approach $1,055,000
Market Value Opinion
Fee Simple, As Is $1,050,000
Date of Appraisal Value
Date of Inspection
Date of Appraisal Report
Office Warehouse
3232 Teasley Lane
1.196 AC
PF (Public Facilities)
(Field Measurements)
100%; owner occupied
Upon Completion
September 4, 2024
$720,000
$1,025,000
$1,055,000
August 29, 2024
August 29, 2024
TABLE OF CONTENTS
LETTER OF TRANSMITTAL
SUMMARY OF IMPORTANT FACTS AND CONCLUSIONS
PAGE
SCOPE OF WORK........................................................................................................................1
DEFINITION OF MARKET VALUE .........................................................................................5
GENERAL ASSUMPTIONS AND LIMITING CONDITIONS ...............................................6
EXTRAORDINARY ASSUMPTIONS AND HYPOTHETICAL CONDITIONS..................9
DEFINITIONS AND TERMS ....................................................................................................10
DALLAS/FORT WORTH METROPOLITAN AREA ANALYSIS ......................................13
REGIONAL MAP ........................................................................................................................22
SUBJECT AREA ANALYSIS ....................................................................................................23
LOCATION MAP ........................................................................................................................28
AERIAL PHOTOGRAPHS ........................................................................................................29
SUBJECT PROPERTY...............................................................................................................30
PARCEL MAP .............................................................................................................................30
FLOOD MAP ...............................................................................................................................32
ZONING MAP .............................................................................................................................33
SUBJECT PHOTOGRAPHS .....................................................................................................38
REAL ESTATE TAX ANALYSIS .............................................................................................40
HIGHEST AND BEST USE ANALYSIS ..................................................................................42
APPRAISAL PROCEDURE ......................................................................................................46
REASONABLE EXPOSURE TIME..........................................................................................48
COST APPROACH .....................................................................................................................49
SALES COMPARISON APPROACH ......................................................................................50
INCOME CAPITALIZATION APPROACH ...........................................................................65
RECONCILIATION ...................................................................................................................89
REASONABLE MARKETING PERIOD .................................................................................91
APPRAISER’S CERTIFICATE ................................................................................................92
QUALIFICATIONS OF APPRAISERS....................................................................................93
ADDENDA
TAX INFORMATION
ZONING INFORMATION
ENGAGEMENT LETTER
STATE CERTIFICATIONS
SCOPE OF WORK
PYLES WHATLEY 24-378 1
Purpose of the Appraisal
SCOPE OF WORK
The purpose of this appraisal is to render an opinion of the market value of the subject property.
The report complies with the requirements of the Uniform Standards of Professional Appraisal
Practice, the Code of Ethics of the Appraisal Institute, and Texas Appraiser Licensing and
Certification Board rules.
The appraisal problem, as applied to the subject, is to determine the property’s market value. “The
most probable price, as of a specified date, in cash, or in terms equivalent to cash, or in other
precisely revealed terms, for which the specified 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.” The Appraisal of Real Estate, 15th Edition, 2020, Appraisal Institute,
Chicago, Illinois
Effective Date of the Appraisal
The subject property is being appraised as of August 29, 2024, and is subject to the market
influences and economic conditions, which existed on that date. This date is also known as the
effective date and is the date of the opinions and conclusions found in this report. The property
was also inspected and photographed on August 29, 2024, which included a visual observation of
the site and any improvements. The date of this appraisal report is September 4, 2024.
Property Rights Appraised
Property rights are an enforceable, legal claim to title of or interest in property. Three primary
property rights may typically be appraised. The rights are fee simple estate, leased fee estate, and
leasehold estate, which are defined as follows:
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.
Leased Fee Estate - The ownership interest held by the lessor, which includes the right to receive
the contract rent specified in the lease plus the reversionary right when the lease expires.
Leasehold Estate - The right held by the lessee to use and occupy real estate for a stated term and
under the conditions specified in the lease.
In this report, we develop a market value opinion of the fee simple interest in the real property.
SCOPE OF WORK
PYLES WHATLEY 24-378 2
Subject Identification & Legal Description
Property Type: Office Warehouse
Ownership: City of Denton
Subject Property Location: 3228 Teasley Lane
Denton, Denton County, Texas
Zip Code: 76210
Legal Description: Block 1, Lot A (PT), in the R.N.W. Addition, within the City of
Denton, Denton County, Texas
Subject History
According to the Denton Central Appraisal District, the current owner is the City of Denton. The
appraisers were unable to locate a deed for the property. The property is not currently listed for
sale, nor is the subject is under contract for sale. According to public records, there have been no
transfers of the subject property within the past three years.
Please note that this information is included only to satisfy the requirements of USPAP. It is not
intended as a guarantee to the chain of title and a title search should be performed by a title
company should a definitive abstract be desired.
Subject Summary
The subject property consists of a 6,038 square foot office warehouse. The property is owner
occupied and being operated as Fire Station 6. According to the facilities manager, an emergency
backup generator was installed for approximately $80,000 at an unknown date.
The property is currently platted with the abutting property, having a total of 2.780 acres or
121,101 square feet. For the purposes of this report, the appraisers have assigned 1.196 acres to
the subject.
Intended Use, Intended User, and Client
The intended use of this report is for financial and estate planning purposes for City of Denton’s
officers, administrators, employees, assignees, and appropriate regulatory agencies. The intended
user, City of Denton, is also the client. Any other user or uses are not intended or authorized. Use
of this appraisal for any other use or by another user or appraisal date may invalidate the findings
and conclusions.
SCOPE OF WORK
PYLES WHATLEY 24-378 3
Data Researched
For this report, the subject market was researched for all pertinent data relating to the appraisal
problem including: collecting and confirming data through brokers, appraisers, property owners,
lessees/lessors, and others familiar with the real estate market. The information provided by these
sources is deemed reliable, but is not guaranteed.
In addition, verifiable third party sources were utilized including Costar Realty Information,
Roddy Information Services, LoopNet, and the Multiple Listing Service (MLS). Additional
market data were extracted from market reports and data circulated and purchased from Robert G.
Watts/RealtyRates.com, Real Estate Research Corporation, Price Waterhouse Coopers Investor
Survey, and M/PF Yieldstar. The information provided by these sources is deemed reliable, but
is not guaranteed.
Competency
The appraisers involved in this assignment have considerable experience in appraising this property
type. The appraisers are actively engaged in appraisal work in the geographical area of the subject
property. The company maintains a database on this area for similar properties. We have adequate
knowledge of the property type and location to meet the competency requirements of the Uniform
Standards of Professional Appraisal Practice.
In addition, other appraisers in the market would perform similar actions in the appraisal process
to fulfill the scope of work in this assignment and the appraisal meets or exceeds the expectations
of parties who are regularly intended users for similar assignments.
SCOPE OF WORK
PYLES WHATLEY 24-378 4
Scope of Work
Richard McBride and/or Samantha Gwinn performed all aspects of this report, which included
the following:
- Communicated with City of Denton, regarding the appraisal assignment; a narrative
appraisal report meets the client’s requirements.
- Communicated with Mark Mastroleo (owner's representative), regarding the history
and the condition of the subject.
- Researched the public records for data on the subject property, including zoning,
assessments, taxes, acreage, buildings and site improvements, and maps.
- A preliminary search of all available resources was made to determine market trends,
influences, and other significant factors pertinent to the subject property. The property
is identified previously in this report.
- Richard McBride and Samantha Gwinn inspected the subject and the subject
neighborhood on August 29, 2024; photographs were taken of the subject and the
comparable sales and income properties. The owner's representative, DeAnna Cody,
was present during the inspection. Although due diligence was exercised while
inspecting the property, the appraiser is not an expert in such matters as soils, structural
engineering, hazardous waste, etc., and no warranty is given as to these elements.
- Research and collection of data (improved sales, listings, and income) were performed
as present in the market area and of sufficient quality to express an opinion of value as
defined herein. The appraiser examined data from the Costar Realty Information,
Roddy Information Services, LoopNet, Multiple Listing Service (MLS), county
records, and owner interviews.
- An analysis of the highest and best use was completed.
- Gathered and analyzed the market data to reach an estimate of market value for the fee
simple interest of the subject, using the sales comparison and income capitalization
approaches to value.
- Assembled and wrote the narrative report, complete with maps, photos, and supporting
addenda.
DEFINITION OF MARKET VALUE
PYLES WHATLEY 24-378 5
The definition of market value is:
Definition of Market Value
“The most probable price, as of a specified date, in cash, or in terms equivalent to cash, or in other
precisely revealed terms, for which the specified 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." *
* The Appraisal of Real Estate, 15th Edition, 2020, Appraisal Institute, Chicago, Illinois, p. 48
GENERAL ASSUMPTIONS AND LIMITING CONDITIONS
PYLES WHATLEY 24-378 6
The Uniform Standards of Professional Appraisal Practice and the Code of Professional Ethics and
Standards of Professional Practice of the Appraisal Institute require the appraiser to "set forth all
assumptions and limiting conditions that affect the analyses, opinions, and conclusions in the
report”. In compliance therewith, and to assist the reader in interpreting this report, such general
assumptions and limiting conditions are set forth below. Specific assumptions, if any, are referred
to in the transmittal letter and their location in the report detailed.
General Assumptions and Limiting Conditions
Title is assumed to be marketable, free, and clear of all liens and encumbrances, easements, and
restrictions except those specifically discussed in the report. The property is appraised assuming it
to be under responsible ownership and competent management and available for its highest and
best use.
No opinion is intended to be expressed for legal matters or that would require specialized
investigation or knowledge beyond that ordinarily employed by real estate appraisers,
notwithstanding the fact that such matters may be discussed in the report.
No opinion is expressed on the value of subsurface oil, gas or mineral rights, water rights, or
whether the property is subject to surface entry for the exploration or removal of such, except as
expressly stated.
The date of value to which the opinions expressed in this report apply is set forth in the letter of
transmittal. The appraiser assumes no responsibility for economic or physical factors occurring at
some later date, which may affect the opinions herein stated. The opinion of value is considered
reliable only as of the date of the appraisal.
The valuation is reported in dollars of U.S. currency prevailing on the date of the appraisal.
Maps, plats, and exhibits included herein are for illustration only as an aid in visualizing matters
discussed within the report. They should not be considered as surveys or relied upon for any other
purpose unless specifically identified as such.
All information and comments pertaining to this, and other properties included in the report
represent the personal opinion of the appraiser, formed after examination and study of the subject
and other properties. While it is believed the information, estimates and analyses are correct, the
appraiser does not guarantee them and assumes no liability for errors in fact, analysis, or judgment.
Neither all nor any part of the contents of this report (especially any conclusions as to value, the
identity of the appraiser or the firm with which he is connected, or any reference to the Appraisal
Institute or to the MAI or SRA designation) shall be disseminated to the public through advertising
media, public relations media, sales media, or any other public means of communication without
written consent and approval of the undersigned.
The appraiser is not required to give testimony or to appear in court by reason of this appraisal,
unless prior arrangements have been made.
GENERAL ASSUMPTIONS AND LIMITING CONDITIONS
PYLES WHATLEY 24-378 7
The distribution of the total valuation in this report between land and improvements applies only
under the existing or proposed/completed program of utilization. The separate valuations for land
and buildings must not be used in conjunction with any other appraisal and are invalid if so used.
Certain information concerning market and operating data were obtained from others. This
information is verified and checked, where possible, and is used in this appraisal only if it is
believed to be accurate and correct. However, such information is not guaranteed.
Opinions of value contained herein are opinions only. There is no guarantee, written or implied,
that the subject property will sell for such amounts. Prospective values are based on market
conditions as of the effective date of the appraisal. The appraiser is not responsible if unforeseeable
events alter market conditions subsequent to the effective date of the appraisal. As a personal
opinion, valuation may vary between appraisers based on the same facts.
No responsibility for hidden defects or conformity to specific governmental requirements, such as
fire, building and safety, earthquake, or occupancy codes can be assumed without provision of
specific professional or governmental inspections. While the general conditions of the property
were observed, no guarantee can be made concerning the individual components of the structures
including but not limited to the heating system, plumbing, electrical services, roof, possible termite
damage or building foundation. This appraiser is not qualified to make a complete inspection of
any well or septic system, consequently, it was beyond the scope of this report and no statements
can be made concerning the adequacy or condition of these or other systems.
No investigation - unless presented in other sections of this report - was made by the appraiser to
determine if asbestos, fiberglass, or synthetic mineral fiber products are present in improved
properties. The existence of such products, if any, would have to be determined by a qualified
inspector. It is assumed that there is no asbestos, fiberglass, synthetic mineral fiber products, nor
other contaminates present that would materially affect value.
The Americans with Disabilities Act (ADA) became effective January 26, 1992. I have not made
a specific compliance survey and analysis of this property to determine whether or not it is in
conformity with the various detailed requirements of the ADA. It is possible that a compliance
survey of the property together with a detailed analysis of the requirements of the ADA could
reveal that the property is not in compliance with one or more of the requirements of the act. If so,
this fact could have a negative effect upon the value of the property. Since I have no direct evidence
relating to this issue, I did not consider possible noncompliance with the requirements of ADA in
estimating the value of the property.
No investigation - unless presented in other sections of this report - was made by the appraiser to
determine if any toxic materials are present on the subject tract. The existence of such materials,
if any, would have to be determined by a qualified inspector. It is assumed that no toxic materials
are present that would materially affect value or development costs.
A reasonable investigation was made to determine the existence of any underground storage tanks
(UST) on the subject site. If USTs are present on the subject site details are provided in other
sections of this report.
GENERAL ASSUMPTIONS AND LIMITING CONDITIONS
PYLES WHATLEY 24-378 8
In the event the appraisal is based upon proposed improvements, it is assumed that the
improvements will be completed in substantial conformity with plans and specifications, which
have been furnished to the appraiser, and with good materials and workmanship. It is also assumed
that the proposed foundation and construction techniques are adequate for the existing sub-soil
conditions.
Due to the multiplicity of mathematical calculations used in standard appraisal practice, rounded
values, e.g., rounded to whole dollars or whole units of measure such as linear feet or square feet,
may result in inexact sums of components. The typical difference in such cases does not materially
affect the value conclusions of this appraisal report or the total compensation due to the property
owner.
Personal property, fixtures, or intangible items that are not real property, which are included in the
appraisal, are identified as Furniture, Fixtures and Equipment, or FF&E.
EXTRAORDINARY ASSUMPTIONS AND HYPOTHETICAL CONDITIONS
PYLES WHATLEY 24-378 9
Extraordinary Assumptions and Hypothetical Conditions: The Uniform Standards of
Professional Appraisal Practice require the disclosure of hypothetical conditions and extraordinary
assumptions when employed in the development of an appraisal. As defined in the Uniform
Standards of Professional Appraisal Practice, an extraordinary assumption is “an assignment-
specific assumption as of the effective date regarding uncertain information used in an analysis
which, if found to be false, could alter the appraiser’s opinions or conclusions.” As defined in the
Uniform Standards of Professional Appraisal Practice, a hypothetical condition is “a condition,
directly related to a specific assignment, which is contrary to what is known by the appraiser to
exist on the effective date of the assignment results but is used for the purpose of analysis.” The
following extraordinary assumptions and hypothetical conditions are set forth for appraisal
purposes and no legal reasoning is intended. The reader should be aware that, in the event that
any of the assumptions or conditions proves false or improperly applied, the conclusions of this
appraisal could be changed or invalidated.
EXTRAORDINARY ASSUMPTIONS
The property is currently platted with the abutting property. For the purposes of this appraisal,
the subject and the abutting property have been split and valued separately.
This appraisal assumes that all of the information obtained for analysis is accurate; this
information has been verified to the extent possible by the appraiser.
HYPOTHETICAL CONDITIONS
None
DEFINITIONS AND TERMS
PYLES WHATLEY 24-378 10
Various terms and symbols are used throughout the appraisal report. The following are definitions
of the terms and explanations of the symbols used:
Anticipation – The perception that value is created by the expectation of benefits to be derived in
the future.
DEFINITIONS AND TERMS
Business Enterprise Value – The value contribution of the total intangible assets of a continuing
business enterprise such as marketing and management skill, an assembled workforce, working
capital, trade names, franchises, patents, trademarks, contracts, leases, customer base, and
operating agreements.
Deferred Maintenance – Items of wear and tear on a property that should be fixed now to protect
the value or income-producing ability of the property. These items are almost always curable.
Excess Land – Land that is not needed to serve or support the existing use. Excess land has the
potential to be sold separately and is valued separately.
Going Concern, Market Value of the – The market value of an established and operating
business including the real property, personal property, financial assets, and the intangible assets
of the business.
Grantee – A person to whom property is transferred by deed or to whom property rights are
granted by a trust instrument or other document.
Grantor – A person who transfers property by deed or grants property rights through a trust
instrument or other document.
Highest and Best Use – The reasonably probable use of property that results in the highest value.
Interim Use – The use contemplated by the market participants that the subject real estate can be
put to while waiting for certain subsequent factors to occur. Many times, these are used to defray
holding cost expenses.
Investment Value – The value of a property to a particular investor or class of investors based on
the investor’s specific requirements. Investment value may be different from market value because
it depends on a set of investment criteria that are not necessarily typical of the market.
Lessee – One who has the right to occupancy and use the property of another for a period of time
according to a lease agreement.
Lessor - One who conveys the rights of occupancy and use to others under a lease agreement.
Market Rent - The most probable rent that a property should bring in a competitive and open
market under all conditions requisite to a fair lease transaction, the lessee and lessor each acting
prudently and knowledgeably, and assuming the rent is not affected by undue stimulus.
Market Value - See Definition of Market Value section.
DEFINITIONS AND TERMS
PYLES WHATLEY 24-378 11
Present Value - The value of a future payment or series of future payments discounted to the
current date or to time period zero.
Price - The amount asked, offered, or paid for a property. Once stated, price is a fact, whether it is
publicly disclosed or retained in private. Because of the financial capabilities, motivations, or
special interests of a given buyer or seller, the price paid for a property may or may not have any
relation to the value that might be ascribed to that property by others.
Property Rights – An enforceable, legal claim to title of or interest in property. The rights may
be in real property or personal property.
Property Rights Adjustment – An adjustment made to the indicated property value if the value
of the property is not at market rent, market occupancy, or lease basis.
Surplus Land – Land that is not currently needed to support the existing use but cannot be
separated from the property and sold off for another use. Surplus land does not have an independent
highest and best use and may or may not contribute value to the improved parcel.
Utility – The ability of a product to satisfy a human want, need, or desire.
Abbreviations
SF = square feet PSF or /SF = per square foot FF = front feet
LF = lineal feet AC = acres ROW = right of way
RR = railroad CBD = central business district GI = gross income
EGI = effective gross income NOI = net operating income PV = present value
OAR or Ro = overall capitalization rate EDR or RE = equity dividend rate UA = usable area
GBA = gross building area RA = rentable area ± = plus, or minus from
amount stated
Source of Definitions: The Dictionary of Real Estate Appraisal, Seventh Edition, Appraisal Institute, Chicago, Illinois, 2022.
DEFINITIONS AND TERMS
PYLES WHATLEY 24-378 12
STAGES OF VALUE
During the real estate development process, a property typically progresses from a state of
unimproved land to construction of improvements to stabilized occupancy. In general, the market
value associated with the property increases during these stages of development. After reaching
stabilized occupancy, ongoing forces affect the property during its life, including physical wear
and tear, changing market conditions, etc. These factors continually influence the property’s
market value at any given point in time. Opinions of value are developed on the basis of one or
more of the following:
Market Value, As Is on the Appraisal Date – An opinion of the market value of a property in
the condition observed upon inspection and as it physically and legally exists without hypothetical
conditions, assumptions, or qualifications as of the date the appraisal is prepared.
Market Value, As If Complete on the Appraisal Date – The market value of a property with all
construction, conversion, or rehabilitation hypothetically completed, or under other specified
hypothetical conditions as of the date of appraisal. With regard to properties wherein anticipated
market conditions indicate that stabilized occupancy is not likely as of the date of completion, this
opinion of value should reflect the market value of the property as if complete and prepared for
occupancy by tenants.
Prospective Future Value Upon Completion of Construction – The prospective future value of
a property on the date construction is completed, based upon market conditions forecast to exist
as of that completion date. The value estimate at this stage of value is stated in current dollars
unless stated otherwise.
Prospective Future Value Upon Reaching Stabilized Occupancy – The prospective future
value of a property at a point in time when all improvements have been physically constructed and
the property has been leased to its optimum level of long-term occupancy. The opinion of value
at this stage of value is in current dollars unless stated otherwise.
Retrospective Value, As of Appraisal Date – An opinion of the market value of a property that
is likely to have applied as of a specific historic date and as it physically and legally existed without
hypothetical conditions, assumptions, or qualifications as of the specific historic date. The opinion
of value at this stage of value is in current dollars unless stated otherwise.
The stage of value utilized in this report is Market Value, As Is on the Appraisal Date.
DALLAS/FORT WORTH METROPOLITAN AREA ANALYSIS
PYLES WHATLEY 24-378 13
The subject property in this report is located in the Dallas/Fort Worth Metropolitan Area, one of
the major financial and population centers in the nation. Therefore, an overview of the Metroplex
is appropriate.
DALLAS/FORT WORTH METROPOLITAN AREA ANALYSIS
Downtown Dallas Downtown Fort Worth
Photograph Courtesy of the Dallas Convention & Visitors Bureau
CLASSIFICATION
The classifications represented in the Dallas/Fort Worth area are:
Metropolitan Statistical Area (MSA) and Metropolitan Division (MD)
With a population of over 7.9 million in 2023, Dallas/Fort Worth and the surrounding area is the
fourth largest MSA under this classification. The DFW MSA is comprised of two Metropolitan
Divisions: Dallas-Plano-Irving (or Dallas MD) on the east and Fort Worth-Arlington (or Fort
Worth MD) on the west. The Dallas MD includes Collin, Dallas, Denton, Ellis, Hunt, Kaufman,
and Rockwall Counties with a 2023 estimated population of over 5.3 million. Fort Worth MD is
comprised of Johnson, Parker, Tarrant, and Wise Counties with a 2023 estimated population of
over 2.6 million. The DFW MSA has grown 21.3% since 2010, with Collin, Denton, Kaufman,
and Rockwall experiencing the greatest growth.
= Dallas-Fort Worth Arlington MSA
Fort Worth-Arlington
Metropolitan Division
Dallas-Plano-Irving
Metropolitan Division
DALLAS/FORT WORTH METROPOLITAN AREA ANALYSIS
PYLES WHATLEY 24-378 14
Demographics/Population
The DFW MSA is the fourth largest metro area in the nation and larger than 33 US states. Dallas
is the third largest city in Texas and ninth in the nation. Dallas County is the eight most populous
county in the nation at 2,598,864 persons. Fort Worth ranks as the fifth largest city in the state of
Texas and twelfth in the United States. The city serves as the county seat for Tarrant County which
consists of a 2023 population estimate of 2,162,241. The Dallas-Fort Worth-Arlington
metropolitan population is estimated at 7,986,356, according to the U.S. Census Bureau’s 2023
population estimates. The MSA has more than 2,750,000 households.
The breakdown of growth by the four major counties of the MSA is as follows:
Source: Texas A&M University
Collin County
355,969
27%
Dallas County
244,175
18%
Denton
County
245,534
18%
Tarrant
County
299,399
22%
All Others
197,755
15%
2010 -2020 Share of Population Growth by County
DALLAS/FORT WORTH METROPOLITAN AREA ANALYSIS
PYLES WHATLEY 24-378 15
The subsequent table illustrates growth trends, in total numbers and annualized percentages, of all
the major cities, suburbs, and statistical regions from 2000 to 2023 estimate, with a 2028 estimate.
AREA (est.)2028 (est.)2010-2020
Change
DFW MSA 5,156,410 6,294,555 7,637,387 7,986,356 8,522,646 21.3%
Dallas MD 3,444,276 4,156,759 5,129,966 5,381,738 5,766,235 23.4%
Collin County 491,676 708,496 1,064,465 1,169,881 1,287,237 50.2%
Dallas County 2,219,132 2,369,364 2,613,539 2,598,864 2,706,011 10.3%
Denton County 430,999 660,888 906,422 987,504 1,076,444 37.2%
Ellis County 111,294 150,049 192,455 214,708 235,908 28.3%
Hunt County 76,602 86,129 99,956 109,682 118,503 16.1%
Kaufman County 71,493 103,325 145,310 175,592 200,839 40.6%
Rockwall County 43,080 78,508 107,819 125,507 141,293 37.3%
Fort Worth MD 1,712,134 2,137,796 2,507,421 2,604,618 2,756,411 17.3%
Johnson County 126,822 150,501 179,927 197,889 214,542 19.6%
Parker County 88,447 116,927 148,222 168,353 185,646 26.8%
Tarrant County 1,448,085 1,811,241 2,110,640 2,162,241 2,273,330 16.5%
Wise County 48,780 59,127 68,632 76,135 82,893 16.1%
Allen 41,942 84,358 104,627 114,696 126,243 24.0%
Arlington 334,292 364,654 394,266 402,677 423,353 8.1%
Carrollton 111,272 118,618 133,434 139,426 149,587 12.5%
Dallas 1,182,168 1,195,311 1,304,379 1,303,927 1,362,657 9.1%
Denton 84,147 115,922 139,869 151,160 164,248 20.7%
Desoto 37,482 49,121 56,145 55,722 58,012 14.3%
Euless 44,311 50,879 61,032 62,335 65,556 20.0%
Flower Mound 51,414 65,653 75,956 82,514 89,973 15.7%
Fort Worth 545,356 744,121 918,915 947,584 990,493 23.5%
Frisco 35,022 117,690 200,509 221,595 242,995 70.4%
Garland 214,822 226,859 246,018 244,797 255,017 8.4%
Grand Prairie 126,730 174,726 196,100 198,103 207,119 12.2%
Irving 191,011 214,695 256,684 254,432 264,947 19.6%
Lewisville 77,544 96,643 111,822 121,576 132,515 15.7%
Mansfield 27,239 56,504 72,602 75,244 79,308 28.5%
McKinney 54,953 132,654 195,308 215,048 236,515 47.2%
Mesquite 125,619 139,705 150,108 149,261 155,498 7.4%
North Richland Hills 56,244 62,609 69,917 72,438 76,190 11.7%
Plano 223,856 258,733 285,494 311,235 342,516 10.3%
Richardson 92,063 98,243 119,469 123,181 130,448 21.6%
Rowlett 44,474 55,703 62,535 63,924 97,281 12.3%
Southlake 20,464 25,757 31,265 31,861 33,539 21.4%
Wylie 16,540 43,637 57,526 63,126 69,441 31.8%
POPULATION
ANNUALIZED GROWTH RATES
Source: EASIDemographics.com
DALLAS/FORT WORTH METROPOLITAN AREA ANALYSIS
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EMPLOYMENT AND ECONOMIC BASE
According to the Texas Workforce Commission, the following exhibit summarizes the labor
statistics for the DFW MSA related to employment, unemployment, and labor force. Recent
decreases in unemployment are a direct result of the recovery from the COVID-19 pandemic. Prior
to the onset of the pandemic, the area was experiencing stable growth.
DALLAS/FORT WORTH METROPOLITAN AREA ANALYSIS
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DALLAS/FORT WORTH METROPOLITAN AREA ANALYSIS
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DALLAS/FORT WORTH METROPOLITAN AREA ANALYSIS
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Local Companies
The metropolitan area boasts an extensive list of national and international corporate headquarters,
with many major companies relocating to DFW in the past twenty years. The availability of
reasonably priced land, lower living cost for employees, favorable climate, and reasonable housing
are great incentives.
In 2023, DFW MSA is now home to 24 of the Fortune 500 Companies. The Metroplex is the third
highest-ranking headquarters metro area behind New York, Chicago, and Houston. 72 major
companies have moved their corporate HQ to Dallas since 2010 including Toyota North America,
Liberty Mutual Insurance, Omnitracts, Ameriflight LLC, Topgolf, MoneyGram, HMS Holdings,
and Six Flags Entertainment.
Below are the top five employers located in North Texas:
Dallas/Fort Worth
Top Five Employers No. of Local Employees
Texas Health Resources 27,000
Lockheed Martin 22,000
University of Texas Southwestern Medical Center 21,539
Medical City Healthcare 17,000
Bank of America 13,850
Source: Dallas Business Journal 2022 Book of Lists
Below are the top five public-sector companies located in North Texas as rated by their 2023
revenues:
Dallas/Fort Worth
Top Five Employers 2023 Revenue (billion)
McKesson Corp. $308.95
AT&T, Inc. $122.43
Caterpillar Inc. $67.06
American Airlines Group Inc. $52.79
D.R. Horton Inc. $35.46
Source: Dallas Business Journal 2023 Book of Lists
DALLAS/FORT WORTH METROPOLITAN AREA ANALYSIS
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Dallas/Fort Worth International Airport
The Dallas/Fort Worth International Airport, which opened January 1974, has had an enormous
impact on the economy of the DFW Metroplex. Located roughly 16 miles northwest of the Dallas
CBD, 19 miles northeast of the Fort Worth CBD, and employs approximately 60,000 people, the
17,183-acre space is the second largest airport facility in the nation. DFW is currently ranked as
“best large airport in America” by the Airports Council International.
The airport has 5 terminals, 7 runways, 171 gates, and 260 destinations, being 193 domestic
destinations and 67 international destinations. DFW Airport includes 12 instrument landing
approaches and 3 control towers giving it the capacity of the three New York airports combined.
DFW is the only airport where four planes can land simultaneously. Twenty-five passenger airlines
operate out of DFW, of which 12 are commuter airlines, and 16 are foreign flag airlines.
DFW International Airport ranks eighth in the world, serving 79,700,000 passengers in 2023. DFW
also ranks 3rd in the world in terms of operations and 3rd busiest airport in the world for passengers.
Approximately 218,356 passengers travel daily through DFW Airport.
DFW Airport recently completed a $2.7 billion "Terminal Renewal and Improvement Program"
(TRIP), which encompassed renovations of three of the original four terminals (A, B, and E).
Terminal A was the first terminal to undergo these renovations, which were completed in January
2017 at a cost of about $1 billion. Subsequently, the completion of Terminal E in August 2017 and
Terminal B in December 2017.
In May 2019, DFW airport (along with American Airlines) announced plans to build a sixth
terminal. The proposed project is estimated to cost $3.2 billion and expected to finish by 2026.
Along with the addition of up to 15 new gates to Terminal F, renovations of Terminals A and C
are planned to take place, being the final terminals requiring updating at a cost of $2.72 billion.
The renovations are anticipated to be completed in 2028 and will include eight additional gates.
The goal of the new terminal is to "provide the region with the growth it needs to compete with
international business centers," according to CEO of DFW Airport, Sean Donohue.
American Airlines has its largest hub at DFW Airport, with 84% of the passenger volume. DFW
Airport also provides an impressive global distribution center with several cargo carriers, 4.1
million square feet of cargo facilities, and a foreign trade zone with direct highway access.
Covering more than 387 acres, this area is developing into a full-service free trade zone.
Approximately $62 billion dollars across North Texas is attributable to airport traffic.
DALLAS/FORT WORTH METROPOLITAN AREA ANALYSIS
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CONCLUSIONS
The foregoing city data and local area economic base activity are presented to establish growth
and income patterns, which materially affect real estate development, real estate sales volume and
value. The Dallas/Fort Worth area, based upon past performances and reasonable forecasts, should
continue an upward growth trend, both in population and employment, particularly in the suburban
cities.
As population in the suburban communities continues to increase, and as traffic in and around the
Central Core becomes more congested, both residents and local firms are beginning to look toward
new, outlying employment centers. The growth is especially seen in North Dallas along the LBJ
Freeway/Dallas Parkway Corridors as well as along the Dallas North Tollway/Parkway corridor,
as well as master planned areas such as Las Colinas and Legacy Business Park.
The DFW economy continued to post stable numbers through 2020 and into 2021, with the
unemployment rate continuing to decline. Housing continued to grow in 2023, with the DFW new-
home sales staying solid but were not as frantic as earlier in 2022. Homebuilders noted that tight lot
supply and shortages of labor and materials have elongated building-cycle times and are restraining
activity. The metroplex remains one of the busiest markets in single-family construction among large
U.S. metros due to the population growth being seen in the area.
REGIONAL MAP
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REGIONAL MAP
SUBJECT AREA ANALYSIS
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A market area, as defined in The Dictionary of Real Estate Appraisal, 7th Edition, copyrighted
2022, is:
SUBJECT AREA ANALYSIS
“The geographic region from which a majority of demand comes and in which the majority of
competition is located.”
When analyzing value influences, the focus is on the market area. A market area is defined in terms
of the market for a specific category of real estate and thus, is the area in which alternative, similar
properties effectively compete with the subject property in the minds of probably, potential
purchasers, and users. A market area can encompass one or multiple neighborhoods or districts.
MARKET AREA INFLUENCES
The subject is located in Denton, Texas, situated in central Denton County. Area analyses and subject
vicinity are presented in the following pages. Other market influences include University of North
Texas, Denton’s Downtown, Texas Women’s University, and Ray Roberts Lake State Park.
Location
The subject is located adjacent to the southwest corner of Teasley Lane and Sundown Boulevard.
Traffic Routes
The traffic system is efficient and provides average access amenities to the area. Interstate
Highway-35, which travels north to south, is a six-lane freeway connecting the Denton area to the
cities of Dallas and Fort Worth. The other major freeway that services the neighborhood is US
Highway 380 (University Drive), a six-lane undivided roadway, which is the main east-west
highway through the city of Denton connecting Interstate 35, U.S. 377, and Loop 288.
The primary north-south traffic route near the subject is U.S. 377, a two-lane undivided roadway.
Additional north-south traffic routes include FM 720 and FM 424. East to west traffic routes
include Fishtrap Road and University Drive.
Area Development
The area is estimated to be 60% developed and is experiencing a period of rapid development,
with land uses that include a great deal of single family and multi-family residential, retail and
commercial, and a limited number of office uses. Continued interest and appreciation in the general
vicinity is driven by commercial development surrounding the US Highway 380 commercial
corridor.
SUBJECT AREA ANALYSIS
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AREA DEMOGRAPHICS
The following Market Profile provided by Site To Do Business provides demographic and income
data for 1-mile, 3-mile, and 5-mile radii centered on the subject’s location.
SUBJECT AREA ANALYSIS
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SUBJECT AREA ANALYSIS
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SUBJECT AREA ANALYSIS
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CONCLUSION
The transportation network in the area is good and surrounding land uses are considered to be
compatible and homogenous. The subject area is in a stable phase of development and in proximity
to employment centers and quality schools and services with few improvements needing repairs
and/or renovations. Consequently, some new construction, as well as renovation of older
properties, is more likely to occur within the subject area in the near future. Additionally, there
appears to be no detrimental influences upon the area that would inhibit the income-producing
capabilities of the improved properties. The long-term prospects for the area and the subject
property are positive.
No noticeable nuisances or hazards are in the area and the majority of improvements are in the early
to middle stages of economic life, and sufficient area services are accessible to service the community.
LOCATION MAP
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LOCATION MAP
AERIAL PHOTOGRAPHS
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AERIAL PHOTOGRAPHS
Source: Google Maps (Imagery date: 2023)
Red shaping - approximate subject property boundary – appraiser’s estimate.
Source: Google Maps (Imagery date: 2023)
SUBJECT
SUBJECT
SUBJECT PROPERTY
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The subject is an office warehouse, located adjacent to the southwest corner of Teasley Lane and
Sundown Boulevard, Denton, Denton County, Texas.
SUBJECT PROPERTY
SITE DATA
Dimensions/Frontage
According to the Denton Central Appraisal District records, the subject tract is rectangular and
contains 52,116 square feet or 1.196 acres. The property is currently platted with the abutting
property, having a total of 2.780 acres or 121,101 square feet. For the purposes of this report, the
appraisers have assigned 1.196 acres to the subject. The subject fronts the western line of Teasley
Lane for approximately 35 linear feet. Teasley Lane is a six-lane, divided thoroughfare.
The subject is approximately 300 feet deep along the northern property line.
PARCEL MAP
Source: Denton Central Appraisal District Mapping System
Red Area – represents the subject area – appraiser’s estimate.
PARENT TRACT
SUBJECT
SUBJECT PROPERTY
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Access/Abutting uses
Access (ingress and egress) to the site is available via along the western property line of Teasley
Lane and an access agreement with the abutting property to the east. The subject abuts a parking
lot to the north, a library to the east, single-family residences to the south, and single-family
residences and vacant land (across Bent Oaks Drive) to the west.
Topography
The topography of the tract is level and at street grade along the roadways; the topography of the
subject is not problematic to development.
Utilities/Community Services
Water, sanitary sewer, electricity, and phone services are available to the subject. Various
deregulated service providers provide electricity and telecommunication services in the area.
Atmos Energy supplies natural gas services. Water and wastewater services are provided by the
City of Denton. Police and fire protection are provided by the City of Denton. The property is
located within the Denton Independent School District.
Soils, Development Limitation, and Productivity
This report assumes the soil is capable of supporting the structures, as numerous improvements
are located within the subject area and adjoining area. A study of the development, limitations,
and productivity were not completed in this appraisal report, as it is not necessary to the scope of
the appraisal.
SUBJECT PROPERTY
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Flood Plain
According to FEMA flood hazard map, 48121C0386H dated June 19, 2020, the subject is
determined to be outside the 100-year floodplain, being within Zone 'X'. Drainage of the site
appears graded and improved. No guaranty is made that the site will or will not flood. A
hydrological study or survey is required for confirmation of flood-designated boundaries.
Reference the subsequent exhibits for a copy of the area flood map.
FLOOD MAP
Source: FEMA
Environmental Hazards
To our knowledge, a Phase I Environmental Site Assessment has not been completed for the
subject property as of the date of inspection. The subject is appraised predicated on the absence
of detrimental environmental conditions. Should contaminants be present the conclusions in the
report would be invalidated.
SUBJECT
SUBJECT PROPERTY
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Zoning
The site is zoned PF (Public Facilities) by the City of Denton. The purpose of the PF (Public
Facilities) district is intended to provide adequate lands for public and quasi-public community
uses and services, including but not limited to fire stations, schools, libraries, community centers,
hospitals, civic buildings, open spaces, parks, utilities, and other public related facilities.
Additional zoning information can be referenced in the addenda.
ZONING MAP
Source: City of Denton Zoning Map
SUBJECT
SUBJECT PROPERTY
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Easements
A survey of the site is not available for analysis. This valuation concludes that utility and access
easements typical of this property type are present and that no detrimental easement conditions
exist. This should not be considered as a guaranty or warranty; however, adverse easements do not
exist. Were the property to have any easements detrimental to the subject, the opinion of value
concluded herein may be invalid.
Deed Restrictions
To our knowledge, no deed restrictions affect or limit the use of the property; however, this should
not be considered as a guaranty or warranty that no such restrictions exist. Deed restrictions are a
legal matter: normally discoverable only by a title search by a title attorney. It is recommended
that a title search be made if any questions regarding deed restrictions arise.
Wetlands
No visual evidence was observed to indicate whether wetlands exist on the subject site. Wetlands,
as defined by Section 404 of the Clean Water Act, are those areas that are inundated or saturated
by surface or groundwater at a frequency and duration sufficient to support, and under normal
circumstances do support, a prevalence of vegetation typically adapted for life in saturated soil
conditions. Swamps, bogs, fens, marshes, and estuaries are subject to federal environmental law.
SUBJECT PROPERTY
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SUBJECT IMPROVEMENTS
Design/Construction
The improvements consist of an 6,038-square foot office warehouse, used as a fire station. The
improvement descriptions are based on inspections, estimates, and other data available.
Exterior
Year Built 1993
Type Class C
Building Size - Gross 6,038 square feet (Field Measurements)
Foundation Reinforced concrete slab
Walls Concrete block
Roof Flat; built up
HVAC Office -100%Complete system (ground-mounted);
Warehouse - heated only
Quality Average
Condition Average
Interior
Rooms Open office area,two offices,two sets of restrooms,
conference area, kitchen area, and breakroom
Flooring Ceramic tiles, sealed concrete
Walls Concrete block
Exposed, insulated metalCeiling2 x 4 drop-in acoustical ceiling panels; exsposed beams
Exposed, insulated beamLightingStandard commercial fixtures
Quality Average
Condition Average
OFFICE WAREHOUSE
Site Improvements
Site improvements include concrete paving and drives, concrete walkways along building,
monument signage, building-mounted lighting, and landscaping.
Parking
The subject has 26 delineated parking spaces, including handicap accessible spaces.
SUBJECT PROPERTY
PYLES WHATLEY 24-378 36
BUILDING SKETCH
SUBJECT PROPERTY
PYLES WHATLEY 24-378 37
Occupancy
The subject is 100% occupied by the owner and operated as a fire station.
Physical Condition
The subject improvements (office warehouse) were built in 1993; the improvements are in average
condition. Overall, the design and construction quality of the improvements are considered typical
of similar buildings of the age of the subject improvements.
Functional Utility
Defined as the ability of a property or building to be useful and to perform the function for which
it is intended according to current market tastes and standards. The subject is an office warehouse.
The improvements are functionally adequate given the architectural style, design and layout, traffic
patterns, and the size and configuration of the improvements for this property type.
External Obsolescence
External obsolescence is considered to be the loss in value of the property resulting from an influence
of negative forces not inherent with the property. It can be caused by the exertion of detrimental
external forces upon the area or property itself. Specific examples are significant fluctuations in the
local economy, noise from nearby expressways or airports, excessive taxes, supply and demand
imbalances, special assessments or certain other governmental actions, the lack of financial liquidity
in the marketplace, or the infiltration of unharmonious groups or land uses. This form of obsolescence
is rarely, if ever, curable. The subject regional area is currently experiencing stable rental rates and
occupancy levels. Based upon the stable market conditions within the extended area the property
does not appear to suffer from external obsolescence.
CONCLUSIONS
The subject is an office warehouse, with adequate frontage and access via along the western
property line and an access agreement with the abutting property to the east. As improved, the
property appears to be a legal and conforming use. Our opinion of the improvements effective age
is 20 years, which is less than the actual age. According to Marshall & Swift Valuation Service,
the typical economic life span for buildings of the same construction class and design as the subject
is typically 50 years. Therefore, the subject improvements are said to have a remaining economic
life of 30 years (50 years less the effective age of 20 years).
Please refer to the subsequent exhibits and addenda for additional details.
RE Classification:Storage Warehouses
Class:C
Type:Average
Section:14
Page:26
Life Expectancy:50 years
Marshall Swift Data
SUBJECT PHOTOGRAPHS
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PHOTOGRAPHED ON AUGUST 29, 2024
SUBJECT PHOTOGRAPHS
Viewing southeasterly at the subject’s front
and western side
Viewing southwesterly at the subject’s front
and eastern side
Viewing northeasterly at the subject’s rear and
western side
Viewing northwesterly at the subject’s rear
and eastern side
Viewing the kitchen area Viewing the conference area
SUBJECT PHOTOGRAPHS
PYLES WHATLEY 24-378 39
Viewing an office Viewing an office
Viewing a restroom Viewing an open office area
Viewing the warehouse area
Viewing the warehouse area
REAL ESTATE TAX ANALYSIS
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Real estate taxes in Texas and this jurisdiction represent ad valorem taxes, meaning a tax applied
in proportion to value. Property assessments are based on market value. The composite rate is
based on a total of several taxing entities’ individual rates.
REAL ESTATE TAX ANALYSIS
In Denton County, the Denton Central Appraisal District is responsible for ad valorem tax
appraisals of all real estate within the county. Based on the ad valorem tax appraisal, various tax
districts levy annual taxes on property located within their respective districts. Typical taxing
jurisdictions include assessments from the county, city, and school districts in which the property
is located. The total ad valorem tax burden is the sum of the assessments for the various taxing
authorities.
The subject property falls within the taxing jurisdictions listed in the following table. Pertinent
2023 tax rates for the subject are detailed below. The 2024 tax rates are not available as of the
date of this report.
City of Denton 0.560682$
Denton County 0.189485$
Denton ISD 1.159200$
Total 1.909367$
2023 TAX RATES (per $100)
The Denton Central Appraisal District account for 2024 is summarized as follows:
Account Number Land Improvements Total
162330 1,695,416$ 2,961,816$ 4,657,232$
Based on the preceding assessed value and pertinent tax rates, the subject's annual tax liability is
calculated as follows:
Assessed Value Tax Rate
$4,657,232 x $0.01909367
Indicated Tax Liability
88,924= $
The assessed value equates to $4,657,232 to the building improvements or $771.32 per square foot
of building area. The assessed value is above the concluded market value in this appraisal. This
difference is typically due to the valuation methods of the appraisal district.
The assessed value above represents both the subject and the abutting property. On the following
page, tax comparbles are presented to determine an assessed value for the subject.
REAL ESTATE TAX ANALYSIS
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The subject is compared to similar properties in location, physical characteristics, and utility. The
appraisal district’s value assessments for those properties are listed in the following table:
Address Assessed Value Square Feet Value per SF
2718 Virginia Circle $2,170,800 10,447 $208
116 Rose Lane $2,240,608 11,000 $204
960 North Mill Street $914,682 5,500 $166
1210 Metro Park Boulevard $3,383,725 23,000 $147
1028 Shady Oaks Drive $779,940 12,000 $65
904 South Woodrow Lane $286,307 2,800 $102
619-701 South Locust Street $789,598 16,568 $48
110 South Mayhill Road $810,000 16,000 $51
SUBJECT 6,038
TAX COMPARABLES
The assessed values of similar properties range from $48 to $208 per square foot, with an average
of $124 per square foot and a median of $125 per square foot. At an estimated $125 per square
foot, the tax burden for the subject property would equate to $14,411.
HIGHEST AND BEST USE ANALYSIS
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One of the basic elements of real estate valuation is the theory of highest, best, and most profitable
use.
HIGHEST AND BEST USE ANALYSIS
As defined in The Dictionary of Real Estate Appraisal, 7th Edition (Copyright 2022) and the
Appraisal of Real Estate, 15th Edition (Copyright 2020), highest and best use is defined as that
reasonably probable use of property that results in the highest value.
These definitions recognize that in cases where a site has existing improvements on it, the highest
and best use may very well be determined to be different from the existing use. The existing use
will continue, however, unless and until land value in its highest and best use exceeds the total
value of the property in its existing use.
Because the use of land can be limited by the presence of improvements, highest and best use is
determined separately for the land or site as though vacant and available to be put to its highest
and best use, and for the property as improved.
In appraisal practice, highest and best use analysis not only identifies the use of the property
expected to produce the maximum net present value, but also helps the appraiser select comparable
properties.
Four basic criteria are examined in estimating the Highest and Best Use of a property both as
vacant and as improved. These stages of analysis are as follows:
a) Physically Possible Use - the uses to which it is physically possible to put on the site in
question.
b) Legally Permissible Use - the uses that are permitted by zoning and deed restrictions on
the site in question.
c) Financially Feasible Use - the possible and permissible uses that will produce any net return
to the owner of the site.
d) Maximumly Productive Use - among the feasible uses, the use that will produce the highest
net return on the highest present worth.
The highest and best use of a specific parcel of land is not determined through subjective analysis
by the property owner, the developer, or the appraiser; rather, highest and best use is shaped by
the competitive forces within the market where the property is located. Therefore, the analysis
and interpretation of highest and best use is an economic study of market forces focused on the
subject property.
Market forces also shape market value, so the general data that are collected and analyzed to derive
an opinion of market value are also used to formulate an opinion of the property’s highest and best
use as of the appraisal date.
HIGHEST AND BEST USE ANALYSIS
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SITE, AS VACANT
According to the Denton Central Appraisal District records, the subject tract is rectangular and
contains 52,116 square feet or 1.196 acres. The subject fronts the western line of Teasley Lane for
approximately 35 linear feet.
The subject abuts a parking lot to the north, a library to the east, single-family residences to the south,
and single-family residences and vacant land (across Bent Oaks Drive) to the west.
Physically Possible
In arriving at our opinion of highest and best use for the subject site, it was first necessary to
determine if the physical characteristics of the site - such as soil conditions, topography, shape,
and frontage were favorable for development. Soil conditions in the region are adequate for
development provided appropriate engineering, design, and construction. According to FEMA
flood hazard map, 48121C0386H dated June 19, 2020, the subject is determined to be outside the
100-year floodplain, being within Zone 'X'. No guaranty is made that the site will or will not flood.
A hydrological study or survey is required for confirmation of flood-designated boundaries. The
tract is of sufficient size to be economically adaptable for development and benefits from adequate
frontage and accessibility. Thus, the physical characteristics impose no limitations on possible
development.
Legally Permissible
The site is zoned PF (Public Facilities) by the City of Denton. The purpose of the PF (Public
Facilities) district is intended to provide adequate lands for public and quasi-public community
uses and services, including but not limited to fire stations, schools, libraries, community centers,
hospitals, civic buildings, open spaces, parks, utilities, and other public related facilities.
Additional zoning information can be referenced in the addenda.
Financially Feasible
As defined in The Dictionary of Real Estate Appraisal, Seventh Edition, 2022, financial feasibility is
“the capability of a physically possible and legal use of property to produce a positive return to the
land after considering risk and all costs to create and maintain the use.”
The surrounding properties and land uses are considered for compatibility in determination of
feasible use. Based on the land usage pattern of the surrounding area, the layout, location, and
frontage/visibility of the site, the most feasible use is considered to be for institutional
development.
Maximally Productive
The financially feasible use of the subject site would be for institutional development. Based upon
the location in Denton, institutional development is considered most logical.
HIGHEST AND BEST USE ANALYSIS
PYLES WHATLEY 24-378 44
Therefore, the maximally productive use of the subject, as vacant, would be for institutional
development.
SUMMARY OF HIGHEST AND BEST USE, AS THOUGH VACANT
The highest and best use of the subject would be for institutional development, as demand warrants.
Use: institutional development
Timing: as demand warrants
Market Participants:
User: owner
Most Probable Buyer: owner, developer
SITE, AS IMPROVED
According to the site measurements, the improvements consist of an 6,038-square foot office
warehouse, used as a fire station.
Physically Possible
The subject improvements were built in 1993 and intended for use as an office warehouse. The
design of the improvements is typical for the area. The physical characteristics and accompanying
amenities of the subject improvements are not readily adaptable to other uses and are specific in
design for use as an office warehouse.
Legally Permissible
The site is zoned PF (Public Facilities) by the City of Denton. Fire Stations are allowed in this
zoning district. If the property transferred, the new owner would have the property rezoned or the
city would grandfather the property in the current zoning.
Financially Feasible
As defined in The Dictionary of Real Estate Appraisal, Seventh Edition, 2022, financial feasibility is
“the capability of a physically possible and legal use of property to produce a positive return to the
land after considering risk and all costs to create and maintain the use.”
Financially feasible uses for the subject property include use as an office warehouse. This use will
produce a positive return to the subject site.
Maximally Productive
The improvements not only add value to the subject site; they also represent the maximally
profitable use of the site, as improved.
HIGHEST AND BEST USE ANALYSIS
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The preceding analysis indicates the improvements to be feasible based on current market
parameters. Thus, it is concluded that the maximally productive use of the subject, as improved, is
use as an office warehouse.
SUMMARY OF HIGHEST AND BEST USE, AS IMPROVED
Our opinion of the highest and best use of the subject is for continued use as an office warehouse.
Use: continued use as an office warehouse
Timing: current
Market Participants:
User: owner, tenant
Most Probable Buyer: owner, investor (landlord)
APPRAISAL PROCEDURE
PYLES WHATLEY 24-378 46
DATA COLLECTION PROCESS
For purposes of this report, the subject market was researched for all pertinent data relating to the
appraisal problem as stated below. This process typically includes collecting and confirming data
through local real estate brokers, appraisers, property owners, lessee/lessors, and others familiar
with the local real estate market. The information provided by these sources is deemed reliable
but is not guaranteed.
APPRAISAL PROCEDURE
The rendered opinion of market value of a property that is being appraised is accomplished by the
comparison and analysis of as many appraisal techniques as are appropriate. The following
approaches are generally used to produce value indications.
Cost Approach: The value indication by this approach is accomplished by estimating the
Reproduction (or Replacement) Cost New of the improvements and deducting accrued
depreciation from all causes, if any. The value of the land (by comparison) is then added to this
depreciated cost figure.
The cost approach is based on the premise that the value of a property can be indicated by the
current cost to construct a reproduction or replacement for the improvements minus the amount of
depreciation evident in the structures from all causes plus the value of the land and entrepreneurial
profit. This approach to value is particularly useful for appraising new or nearly new
improvements.
Sales Comparison Approach: The comparison of similar properties, which have sold in the
marketplace, is used to produce an indication of value. The comparison may be either direct or
indirect with commonly accepted units or elements of comparison.
The sales comparison approach is founded upon the principle of substitution, which holds that the
cost to acquire an equally desirable substitute property without undue delay ordinarily sets the
upper limit of value. At any given time, prices paid for comparable properties are construed to
reflect the value of the property appraised. The validity of a value indication derived by this
approach is heavily dependent upon the availability of data on recent sales of properties similar in
location, size, and utility to the appraised property.
Income Capitalization Approach: This approach to value is applicable to properties capable of
producing a net income stream. The net income stream is translated into a value indication through
the capitalization process.
The income capitalization approach is based on the principle of anticipation, which recognizes the
present value of the future income benefits to be derived from ownership in a particular property.
The income capitalization approach is most applicable to properties that are bought and sold for
investment purposes, and is considered very reliable when adequate income and expense data are
available. Since income producing real estate is most often purchased by investors, this approach
is valid and is generally considered the most applicable when the property being appraised was
designed for, or is easily capable of, producing a satisfactory rental income.
APPRAISAL PROCEDURE
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The strengths and weaknesses of each approach used are weighed in the final analysis. The
approach or approaches offering the greatest quantity and quality of supporting data are typically
emphasized, and the final opinion of value is correlated.
Under the parameters of this assignment, the following approaches to value were considered and
used in this appraisal:
Approach Considered Used
Cost Yes No
Sales Comparison Yes Yes
Income Capitalization Yes Yes
A preliminary survey of the property indicates the following:
- This report incorporates the sales comparison approach and income capitalization
approach, and reconciles these approaches into a final opinion of market value.
- Due to the age of the improvements, the cost approach is not considered a reliable
indicator of market value and is not judged to be applicable. As such, the cost approach
is omitted from this report.
Secondary sources of market data and investor criteria were utilized including Real Estate
Research Corporation’s Real Estate Report (RERC), Price Waterhouse Coopers Real Estate
Investor Survey, Real Estate Investment Services (REIS), M/PF, ALN Systems, Cushman
Wakefield Market Reports, Marcus Millichap Market Reports, CB Richard Ellis Market Reports,
Insignia Market Reports, Jones Lang LaSalle Market Reports, and other industry publications.
APPRAISAL PROBLEM
The appraisal problem, as applied to the subject, is to determine the market value of the fee simple
interest in the subject property. In addressing this problem, the principles of utility, substitution,
and anticipation are considered in the following valuation.
REASONABLE EXPOSURE TIME
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When the purpose of an assignment is to develop an opinion of market value, the appraiser must
also develop an opinion of reasonable exposure time linked to the value opinion.
REASONABLE EXPOSURE TIME
Reasonable exposure time is one of a series of conditions in most market-value definitions.
Exposure time is always presumed to precede the effective date of the appraisal.
Exposure time, as defined by the Uniform Standards of Professional Appraisal Practice, is an
opinion, based on supporting market data, of the length of time that the property interest being
appraised would have been offered on the market prior to the hypothetical consummation of a sale
at market value on the effective date of the appraisal.
The fact that exposure time is always presumed to occur prior to the effective date of the appraisal
is substantiated by related facts in the appraisal process, i.e. supply/demand conditions as of the
effective date of the appraisal, the use of current cost information, the analysis of historical sales
information (sold after exposure and after completion of negotiations between the seller and the
buyer), and the analysis of future income expectancy projected from the effective date of the
appraisal.
The opinion of the time period for reasonable exposure is not intended to be a prediction of a date
of sale or a one-line statement. Instead, it is an integral part of the analyses conducted during the
appraisal assignment. The opinion may be expressed as a range and can be based on one or more
of the following:
• Statistical information about days on market
• Information gathered through sales verification.
• Interviews of market participants
Related information garnered through this process may include the identification of typical buyers
and sellers for the type of property involved and typical equity investment levels and/or financing
terms.
The reasonable exposure period is a function of price, time, and use, not an isolated opinion of
time alone. The answer to the question “what is reasonable exposure time?” should always
incorporate the answers to the question “for what kind of property at what value range?” rather
than appear as a statement of an isolated time period.
A reasonable exposure time for the subject property at the market value definition and market
value conclusion in this appraisal was developed by discussions with local market participants.
According to local brokers, appraisers, and informed market participants, the reasonable exposure
time for properties similar to the subject, is considered to be 12 months.
COST APPROACH
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The purpose of the cost approach is to develop an opinion of the cost to construct a reproduction of,
or replacement for, the existing structure and then deduct all accrued depreciation in the property
being appraised from the cost new of the reproduction or replacement structure. When the value of
the land and an entrepreneurial profit, if appropriate, are added to this figure, the result is an indication
of the value of the fee simple interest in the property.
COST APPROACH
When applicable, the cost approach reflects market thinking by recognizing that market
participants relate value to cost. Investors tend to judge the value of an existing structure by
considering the prices and rents of similar buildings and the cost to create a new building with
optimal physical and functional utility. Investors adjust the prices they are willing to pay by
estimating the costs to bring an existing structure up to the level of physical and functional utility
they desire.
The cost approach is based on the estimated replacement cost of the improvements less
depreciation from all causes, to which is added the market value of the land based on comparable
sales.
The concept of highest and best use is fundamental to real property value. In one application of
the concept, land is valued as though vacant and available for its highest and best use; in the other
application, the highest and best use of the property as improved is estimated. Thus, a site may
have one highest and best use as though vacant, and the existing combination of site and
improvements may have another highest and best use. Existing improvements have a value equal
to the amount they contribute to the site or they penalize value by an amount equal to the cost to
remove them from the site. Existing improvements that do not develop the land to its highest and
best use are usually worth less than their reproduction or replacement cost.
COST APPROACH AS APPLICABLE TO THIS ASSIGNMENT
The subject, being 31 years old and having an aggregate effective age of 20 years, suffers from a
high degree of physical depreciation. In our experience, buildings of this age will have been
rehabilitated from time to time, but not necessarily in a comprehensive manner. Different areas of
the improvement spaces exhibit different degrees of condition and quality.
The cost approach would likely be the least reliable approach to value due to the speculative cost
and depreciation estimates on the existing improvements. Moreover, the cost approach to value
of real estate with existing improvements of the subject's age is not typically a reliable indicator
of market value when considering the use, and the degree of perceived depreciation applied to the
structure. The subjective nature of concluding depreciation to the structure in this instance
outweighs the construction elements of the cost approach with regard to an overall valuation.
Thus, the cost approach is not used in this assignment.
SALES COMPARISON APPROACH
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The sales comparison approach is a method of estimating market value whereby a property is
compared with similar properties that have sold recently. One premise of the sales comparison
approach is that the market will determine a price for the property being appraised in the same
manner that it determines the price of comparable, competitive properties. The principle of
substitution is basic in this approach as it implies that a prudent person will not pay more for a
property than an acceptable alternative available in the market.
SALES COMPARISON APPROACH
The steps of the sales comparison approach are outlined as follows:
(a) Research the market to obtain information about sales, listings, and offerings of properties
similar to the subject property.
(b) Ascertain the nature of the conditions of sale, including the price, terms, motivating forces,
and its bona fide nature.
(c) Determine relevant units of comparison, e.g., sales price per square foot and develop a
comparative analysis for each unit.
(d) Compare each of the comparable properties' important attributes to the corresponding ones
of the property being appraised, under the general categories of time, location, physical
characteristics, and conditions of sale.
Consider all dissimilarities and their probable effect on the price of each sale property to
derive individual market indications for the property being appraised.
(e) Formulate, in light of the comparison thus made, an opinion of the relative value of the
subject property as a whole, or where appropriate, by applicable units, compared with each
of the similar properties.
In the sales comparison approach, the property appraised is compared with known prices paid for
comparable properties in the open market. Typically, for most properties, the most common units
of comparison used are the overall price paid per unit and sales price per square foot.
Knowledgeable investors usually consider these methods, as rules of thumb, to establish a value
range. To produce a highly meaningful answer, the comparable properties should be as highly
similar in age and condition, operating expense ratio, and land value as possible.
The following summary information on improved sales judged to be comparable to the property
appraised is included herein, establishing the probable value of the subject property by the sales
comparison approach.
SALES COMPARISON APPROACH
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SALES COMPARISON APPROACH
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Improved Sale No. 1
Location 2718 Virginia Circle
Denton, Denton County, Texas
Grantor BUI Investments, LLC
Grantee
Record Data
Date December 27, 2022
Document No.2022-174989
Consideration $2,250,000
Sale Price/SF $215.37
Conditions of Sale Cash (or cash equivalent) to the seller
Physical Description
Land Area
2.29 AC
99,752 SF
Building Coverage 10.47%
Gross Building Area 10,447 SF
Year Built 2020
Occupancy @ Sale 100%
Description Office Warehouse
Quality Average
Comments
Prodigy 600 FWD, LLC
Acres
Square Feet
The property is located along the southern line of Virginia
Circle,east of Mockingbird Lane.The property is a single
tenant office warehouse with Arrowhead Stairs &Trimbeing
the tenant at the time of sale.According to the costar listing,
the asking price was $2,250,000.
SALES COMPARISON APPROACH
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Improved Sale No. 1 (Cont.)
Total $/SF
Gross Rental Income 156,705$ 15.00$
Plus:Expense Reimbursement 40,116$ 3.84$
Less:Vacancy @ 5%9,841$ 0.94$
Effective Gross Income 186,980$ 17.90$
Total Expenses 48,787$ 4.67$
Net Operating Income 138,193$ 13.23$
Source: Appraiser's estimate
6.14%
$215.37
73.91%
Sales Price/SF
NOI/EGI Ratio
Pro-Forma Operating Statement - Sale No. 1
Income Data
Units of Comparison
Overall Rate (Ro)
SALES COMPARISON APPROACH
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Improved Sale No. 2
Location 116 Rose Lane
Frisco, Denton County, Texas
Grantor GCC Ventures, LLC
Grantee
Record Data
Date August 4, 2022
Document No.2022-114473
Consideration $1,573,091
Sale Price/SF $143.01
Conditions of Sale Cash (or cash equivalent) to the seller
Physical Description
Land Area
0.80 AC
34,673 SF
Building Coverage 31.72%
Gross Building Area 11,000 SF
Year Built 2019
Occupancy @ Sale 100%
Description Office Warehouse
Quality Average
Comments
Harger Properties, LLC
Acres
Square Feet
The property is located along the western line of Rose Lane,
south of Crystal Lane.The property is a multi-tenant office
warehouse.At the inspection,the building was occupied by
RMG Apparel Corporation.The property is constructed with
a metal and stone exterior and metal roof.
SALES COMPARISON APPROACH
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Improved Sale No. 2 (Cont.)
Total $/SF
Gross Rental Income 110,000$ 10.00$
Plus:Expense Reimbursement 35,200$ 3.20$
Less:Vacancy @ 5%7,260$ 0.66$
Effective Gross Income 137,940$ 12.54$
Total Expenses 42,790$ 3.89$
Net Operating Income 95,150$ 8.65$
Source: Appraiser's estimate
6.05%
$143.01
68.98%NOI/EGI Ratio
Pro-Forma Operating Statement - Sale No. 2
Income Data
Units of Comparison
Overall Rate (Ro)
Sales Price/SF
SALES COMPARISON APPROACH
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Improved Sale No. 3
Location 960 North Mill Street
Lewisville, Denton County, Texas
Grantor GJBLM Enterprises, LLC
Grantee
Record Data
Date June 30, 2022
Document No.2022-96922
Consideration $905,000
Sale Price/SF $164.55
Conditions of Sale Cash (or cash equivalent) to the seller
Physical Description
Land Area
0.53 AC
23,286 SF
Building Coverage 23.62%
Gross Building Area 5,500 SF
Year Built 1998
Occupancy @ Sale 0%
Description Office Warehouse
Quality Average
Comments
JBMS Realty, LLC
Acres
Square Feet
This property is located along the eastern line of North Mill
Street,south of East Valley Ridge Boulevard.The property is
a single-tenant office warehouse.At the time of sale,the
property was occupied by G &B Tile &Plaster,Ltd.The
property is constructed with a metal exterior and roof.
SALES COMPARISON APPROACH
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Improved Sale No. 3 (Cont.)
Total $/SF
Gross Rental Income 55,000$ 10.00$
Plus:Expense Reimbursement 17,600$ 3.20$
Less:Vacancy @ 5%3,630$ 0.66$
Effective Gross Income 68,970$ 12.54$
Total Expenses 21,395$ 3.89$
Net Operating Income 47,575$ 8.65$
Source: Appraiser's estimate
5.26%
$164.55
68.98%
Units of Comparison
Overall Rate (Ro)
Sales Price/SF
NOI/EGI Ratio
Income Data
Pro-Forma Operating Statement - Sale No. 3
SALES COMPARISON APPROACH
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Improved Sale No. 4
Location 1210 Metro Park Boulevard
Lewisville, Denton County, Texas
Grantor Metro Park Properties, LLC
Grantee
Record Data
Date October 19, 2021
Document No.2021-192296
Consideration $2,150,000
Sale Price/SF $93.48
Conditions of Sale Cash (or cash equivalent) to the seller
Physical Description
Land Area
1.46 AC
63,619 SF
Building Coverage 36.15%
Gross Building Area 23,000 SF
Year Built 1985
Occupancy @ Sale 0%
Description Office Warehouse
Quality Average
Comments
Square Feet
This property is located along the southern line of Metro Park
Boulevard,south of East State Highway 121 Business.The
property is a single-tenant office building and was occupied
by Mobile Air &Power Rentals at the time of inspection.The
property is constructed of a metal exterior and roof.
Acres
CS/R Resolute, LLC
SALES COMPARISON APPROACH
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Improved Sale No. 4 (Cont.)
Total $/SF
Gross Rental Income 207,000$ 9.00$
Plus:Expense Reimbursement 66,240$ 2.88$
Less:Vacancy @ 5%13,662$ 0.59$
Effective Gross Income 259,578$ 11.29$
Total Expenses 80,500$ 3.50$
Net Operating Income 179,078$ 7.79$
Source: Appraiser's estimate
8.33%
$93.48
68.99%NOI/EGI Ratio
Pro-Forma Operating Statement - Sale No. 4
Income Data
Units of Comparison
Overall Rate (Ro)
Sales Price/SF
SALES COMPARISON APPROACH
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Sale No.Address YOC SF Price/SF
Date of
Sale
1 2718 Virginia Circle 10,447 $215.37
Denton, Denton County, Texas
2 116 Rose Lane 11,000 $143.01
Frisco, Denton County, Texas
3 960 North Mill Street 5,500 $164.55
Lewisville, Denton County, Texas
4 1210 Metro Park Boulevard 23,000 $93.48
Lewisville, Denton County, Texas
1985 Oct-2021
1998 Jun-2022
Summary of Improved Sales
2020 Dec-2022
2019 Aug-2022
The sales in the sample were selected from a larger group as being most similar in overall physical
characteristics as compared to the subject. The sale sample ranges in price from $93.48 to $215.37
per square foot. They range in size from 5,500 square feet to 23,000 square feet and were constructed
between 1985 and 2020.
ADJUSTMENT DESCRIPTIONS AND ANALYSIS
The first step in any comparative analysis is to identify which elements of comparison affect
property values in the subject market. Each of the basic elements of comparison must be analyzed
to determine whether an adjustment is required. If sufficient information is available, a
quantitative adjustment can be made.
Adjustments for differences are made to the price of each comparable property to make that
property equivalent to the subject in market appeal on the effective date of the opinion of value.
The magnitude of the adjustment made for each element of comparison depends on how much that
characteristic of the comparable property differs from the subject property. We have considered
all appropriate elements of comparison in the following discussions.
In the following analysis, consideration is given for rights conveyed, financing, sale and market
conditions, location, and physical characteristics. Property rights conveyed and financing are basic
components of sale. Rights conveyed should be identical and financing should be on a cash
equivalent basis. Sale conditions require analysis to determine any unusual characteristics.
Consideration of market conditions is necessary because of the cyclical nature of the real estate
market and continuous economic change. The location adjustment considers factors such as type,
location, compatibility, quality, desirability, and accessibility of area development. Comparison
of utility considers such factors as access, size, exposure, age, and condition.
SALES COMPARISON APPROACH
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COMPARATIVE ANALYSIS
In analyzing the sales, comparative analyses are used to identify differences between the subject
and the comparable sales. The difference in selling price is allocated to the elements of comparison,
which the market data indicates contribute to different prices. While we have no direct support for
these selected adjustments, an analysis of comparable properties requires adjustment for these
elements to be applied. The following table is a summary of comparable elements and their
associated adjustments.
Adjustment Category
Size
Age
5-10%; for the differences in sizes of the properties
1%; for the difference for every 5 years between effective age
SUMMARY OF SELECTED ADJUSTMENTS
Selected Adjustments
These adjustments are not intended as exact measurements but are used to define accurately the
range of values indicated by the market.
RIGHTS CONVEYED, FINANCING, SALE, EXPENDITURES, MARKET CONDITIONS, AND LOCATION
Rights Conveyed
When property rights are sold, they may be the sole subject of the contract or the contract may
include other rights, less than all of the real property rights, or even another property or properties.
Before the price of a comparable sale property can be used in sales comparison analysis, the
appraiser must first ensure that the sale price of the comparable property applies to property rights
that are similar to those being appraised. To do so, adjustments may be required before specific
differences in the physical real estate can be compared. The comparable sales are similar to the
subject and are not adjusted.
Financing
The transaction price of one property may differ from that of an identical property due to different
financing arrangements. The cost of financing includes the interest rate and any points, discounts,
equity participations, or other charges that the lender requires to increase the effective yield of the
loan. The cost and availability of credit for real estate financing influence both the quantity and
quality of real estate demanded and supplied. Additional financing adjustments could be made
based on owner financing, favorable financing terms, or assumptions. The comparable sales were
purchased with cash, or third party financing, which requires no adjustments.
Sale Conditions
Sale condition adjustments account for factors such as buyer or seller motivation, which affect the
purchase price. The sales were evaluated and no adjustments for sale conditions are considered
necessary for the comparable sales.
SALES COMPARISON APPROACH
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Expenditures Made Immediately After Purchase
A knowledgeable buyer considers expenditures that will have to be made upon purchase of a
property because these costs affect the price the buyer agrees to pay. The anticipated costs are
estimated unless specific expenditure data are available. The comparable sales were evaluated and
no adjustments for expenditures are considered necessary.
Market Conditions
The sales occurred between October 2021 and December 2022. Adjustments for market conditions
are applied if property values have increased or decreased since the transaction dates. Based on
our observations and analysis, real estate has appreciated approximately 5% annually. Each sale
is adjusted accordingly.
Location
Location adjustments account for differences in desirability (or locational appeal) in terms of
general location, specifically the subject and comparable sub-market, income and vacancies, and
other locational influences. The sales have similar locational appeal as compared to the subject
and warrant no adjustments.
PHYSICAL CHARACTERISTICS
Access
Access has a bearing on real estate in the market. Access is defined as the points, or number of
points available for ingress/egress to the subject site or ease of access to the site from abutting
roadways. Sale properties are adjusted based on their inferiority/superiority as compared with the
subject. The comparable sales are similar in access to the subject. Adjustments are not warranted.
Size
This adjustment accounts for the impact of size on value. Typically, a larger property will sell for
less on a per square foot basis than a smaller property, assuming all other factors are relatively
equal. Typically, through experience with comparable properties, a 0% to 15% adjustment may
be necessary to account for size differences. Sale Nos. 1, 2, and 4 are larger than the subject and
are adjusted +5%, +5%, and +10%, respectively. Sale No. 3 is similar in size when compared to
the subject and is not adjusted.
Age
Sale Nos. 1, 2, 3, and 4 were constructed in 2020, 2019, 1998, and 1985, which have effective ages
of 5 years, 5 years, 15 years, and 20 years, respectively. The subject improvements were built in
1993. The effective age of the subject is estimated at 20 years . Each of the sales is adjusted based
on its effective age as compared to the subject’s effective age; each comparable sale is adjusted 1%
for each 5 years of difference in effective age.
SALES COMPARISON APPROACH
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Condition
The subject is maintained in average condition. The sales are maintained in similar in condition
compared to the subject and warrants no adjustments.
Quality
The subject was constructed to average quality. The sales appears to be constructed of average
quality and are similar to the subject with no adjustment warranted.
SALES COMPARISON APPROACH
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ADJUSTMENTS
The following grid summarizes the adjustment process.
Sale No.1 2 3 4
Year Built
Size SF 10,447 11,000 5,500 23,000
Sale Date Dec-22 Aug-22 Jun-22 Oct-21
Sale Price $2,250,000 $1,573,091 $905,000 $2,150,000
Sale Price Per SF $215.37 $143.01 $164.55 $93.48
Rights Conveyed -0--0--0--0-
Financing -0--0--0--0-
Sale Conditions -0--0--0--0-
Immediate Expenditures -0--0--0--0-
Market Conditions 8%10%11%14%
Adjusted Price $232.60 $157.31 $182.65 $106.57
Location -0--0--0--0-
Access -0--0--0--0-
Size 5%5%-0-10%
Age -3%-3%-1%-0-
Condition -0--0--0--0-
Quality -0--0--0--0-
Net Adjustment 2%2%-1%10%
Adjusted Price/SF $237.25 $160.46 $180.82 $117.23
IMPROVED SALES ADJUSTMENTS
SALES COMPARABLE CONCLUSION
The comparable sales used in this valuation are the most recent available and were selected to
accurately reflect the value range of properties similar to the subject. The direct sales comparison
method indicates an adjusted range from $117.23 to $237.25 per square foot, with an adjusted
mean of $173.94 per square foot and an adjusted median of $170.64 per square foot. Giving
emphasis to the adjusted mean and median, the indicated value is estimated to be $170.00 per
square foot or $1,025,000.
Size SF $/SF Indicated Value
6,038 x $170.00 =$1,026,460
$1,025,000
VALUE INDICATED BY THE SALES PRICE
PER SQUARE FOOT METHOD
Value by Sales Comparison
INCOME CAPITALIZATION APPROACH
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The premise of the income capitalization approach is that an indication of value can be derived by
capitalizing the net income a property will produce - under prudent management - at an appropriate
rate which reflects the current market conditions, trends, and investor requirements. The approach
is based on the principle of anticipation of future benefits, foremost of which is the stream of
annual net income for a holding period plus a capital sum at the end of that period. The mechanism
by which these benefits are translated to value i.e., present worth, is the capitalization process.
INCOME CAPITALIZATION APPROACH
The income capitalization approach consists of the following steps:
Market Analysis: Research the market to determine relevant income parameters i.e.,
rental rate, vacancy rates, absorption trends, escalations, allowances,
and other factors.
Estimate of Operations: Estimate potential gross income. Then, deduct a vacancy and
collection loss allowance to derive effective gross income. Finally,
estimate and deduct expenses of operation to derive net operating
income.
Capitalization: Select an applicable capitalization method and technique. Develop
the appropriate rate or rates and capitalize the net operating income
or income stream to derive an indication of value.
MARKET ANALYSIS
As described above, the analysis of the market includes thorough research of the market to determine
relevant income parameters i.e., rental rate, vacancy rates, absorption trends, escalations, allowances,
and other factors.
The Coldwell Banker Richard Ellis (CBRE), Marcus and Millichap and CoStar were consulted for
market data. A summary of competing properties in the subject neighborhood is also included the
following pages.
INCOME CAPITALIZATION APPROACH
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INCOME CAPITALIZATION APPROACH
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INCOME CAPITALIZATION APPROACH
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INCOME CAPITALIZATION APPROACH
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INCOME CAPITALIZATION APPROACH
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INCOME CAPITALIZATION APPROACH
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INCOME CAPITALIZATION APPROACH
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INCOME CAPITALIZATION APPROACH
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INCOME CAPITALIZATION APPROACH
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INCOME CAPITALIZATION APPROACH
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INCOME PROPERTY NO. 1
Address 1028 Shady Oaks Drive
Denton, Denton County, Texas
Year of Construction 1989
Rentable Building Area 12,000 SF
Occupancy 100%
Rental Rate Per SF $10.00
Lease Terms Triple Net
Comments This property is located along the southern line of Shady Oaks
Drive,east of Teasley Lane.The asking rental rate for 4,535 square
feet is $10.00 per square foot on a triple basis,with an unknown
term.The property is constructed with a metal exterior and pitched
metal roof.
INCOME CAPITALIZATION APPROACH
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INCOME PROPERTY NO. 2
Address 904 South Woodrow Lane
Denton, Denton County, Texas
Year of Construction 1996
Rentable Building Area 2,800 SF
Occupancy 100%
Rental Rate Per SF $12.00
Lease Terms Triple Net; 5-year lease
Comments This property is located along the western line of South Woodrow
Lane,south of Morse Street.The asking rental rate for the property
is $12.00 per square foot on a triple net basis,with a 5-year lease
term that commenced in December 2021.The property is
occupied by Fire Shield Fire Protection.
INCOME CAPITALIZATION APPROACH
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INCOME PROPERTY NO. 3
Address 619-701 South Locust Street
Denton, Denton County, Texas
Year of Construction 1985
Rentable Building Area 16,568 SF
Occupancy 100%
Rental Rate Per SF $6.50
Lease Terms Triple Net
Comments This property is located along the eastern line of South Locust
Street,north of South Bell Avenue.The asking and starting rental
rate for 6,000 square feet is $6.50 per square foot on a triple net
basis,with an unknown term.The property is constructed with a
metal exterior and pitched metal roof.
INCOME CAPITALIZATION APPROACH
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INCOME PROPERTY NO. 4
Address 110 South Mayhill Road
Denton, Denton County, Texas
Year of Construction 1984
Rentable Building Area 16,000 SF
Occupancy 100%
Rental Rate Per SF $8.25
Lease Terms Triple Net
Comments This property is located along the western line of South Mayhill
Road,south of East McKinney Street.The asking rental rate for the
property is $8.25 per square foot on a triple net basis,with an
unknown term.The property is occupied by a local tenant,Joe
Hudson's Collision Center.
INCOME CAPITALIZATION APPROACH
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Rental No. Name/Location Rental Rate Lease Basis YOC Rentable Area
1 1028 Shady Oaks Drive
Denton, Denton County, Texas
2 904 South Woodrow Lane
Denton, Denton County, Texas
3 619-701 South Locust Street
Denton, Denton County, Texas
4 110 South Mayhill Road
Denton, Denton County, Texas
16,000 SF1984$8.25 Triple Net
Triple Net 1985 16,568 SF
$12.00 Triple Net 1996 2,800 SF
$6.50
RENTAL SURVEY
$10.00 Triple Net 1989 12,000 SF
The properties in the survey are similar to the subject and are comparable in design, construction,
and use. The facilities range in size from 2,800 to 16,568 square feet. The lease rates of the survey
range from $6.50 to $12.00 per square foot on a triple net basis and are representative of the market.
For the purpose for this analysis, the subject is estimated to leased on a triple net lease basis. That
is, the operator/tenant is responsible for operating expenses, including pro rata shares of taxes,
insurance, and maintenance/grounds. Based on this lease arrangement, the only expense to an
owner would be a management fee and any structural maintenance charges. Each of the
comparable rents varies in location and quality; they also differ in size as compared with the
subject.
Market Rent and Gross Rental Income Analysis
In estimating the appropriate market rental rate for the subject, all of the comparable rental
properties were considered. Considering the location of the subject, the quality of finish, careful
consideration of data and inspecting each comparable property, the market data supports a market
rental rate of $12.00 per square foot on a triple net lease basis. This estimate recognizes the
location, construction, size, quality, and condition of the subject as compared with competing
properties in the local market.
Potential Gross Income
Based on a market rate, the potential gross rental income of the subject property is $72,456 per
year or $12.00 per square foot.
Reimbursements
Under a triple net lease arrangement, the tenant is responsible for operating expenses.
Reimbursements for taxes, insurance, and maintenance/grounds are estimated at $23,161 for the
office warehouse.
INCOME CAPITALIZATION APPROACH
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Vacancy & Collection Loss
According to the Dictionary of Real Estate Appraisal, vacancy and collection (credit) loss is
defined as an allowance for reductions in potential income attributable to vacancies, tenant
turnover, and non-payment of rent. The portion referring to vacancy is typically derived from
market sources such as the market conditions of competing properties and the competitive market.
The collection loss is a reflection of the type of tenants within the market or subject.
In order to estimate anticipated vacancy and credit loss for the subject, relevant market data sources
have been researched, and the operating expenses and comparable properties have been analyzed.
A survey of local management companies and rental properties show that there is a wide range of
vacancy rates in the area, which vary from 0% to 50%, with an average of approximately 9.50%
as reported for the Dallas/Fort Worth Market. The subject is 100% owner occupied. Given the
subject’s size, current/potential tenancy, market occupancy rates, and location, a reasonable market
vacancy and credit loss rate for the subject is estimated at 5%, which equates to $4,781 or $0.79
per square foot. This percentage calculates at approximately three months of vacancy every five
years.
INCOME CAPITALIZATION APPROACH
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OPERATING EXPENSES
The following annual expense summary is estimated based on operations of comparable properties
in the subject market. Expenses include both fixed and variable expenses. Fixed expenses include
ad valorem property taxes and property insurance. Variable expenses include
management/administrative and maintenance/repair costs. Typical leases on properties of this type
are structured on a triple net lease basis. That is, the operator/tenant is responsible for operating
expenses, including pro rata shares of taxes, insurance, and maintenance/grounds. Based on this
lease arrangement, the only expense to an owner would be a management fee and any structural
maintenance charges.
Where actual operating statements were not available for analysis, estimates are applied in the
expense estimates for the subject property.
EXPENSES
Real Estate Taxes
Real estate taxes (as detailed previously in the tax analysis portion of the subject property section)
are estimated at $14,411 or $2.39 per square foot. This expense is reimbursed. The basis of this
expense is estimated by comparing tax assessments of similar properties, as noted in the tax section
of this report.
Fire & Extended Coverage Insurance
Based on information from third party reports, the estimated typical fire, extended coverage, and
liability policy is $5,000 or $0.83 per square foot. This expense is reimbursed. The basis of this
expense is market estimates and surveyed data.
Maintenance/Grounds
This expense includes such items as parking lot, security, trash, minor HVAC repairs, and
landscaping. Based on market estimates and surveyed data, this expense is estimated at $3,750 or
$0.62 per square foot. Market reports show maintenance charges ranging from $0.37 to $2.88 per
square foot. This expense is reimbursed.
Management Fees
Includes general management, supervision, professional fees, legal fees, printing, keys and locks,
sign expenses, and purchasing, etc. Management fees in this market range between 2% and 8% of
effective gross income. Based on the market estimates and surveyed data, we utilize a 3%
management fee based on market estimates, which equates to $2,725 or $0.45 per square foot.
INCOME CAPITALIZATION APPROACH
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Structural Maintenance/Reserves
This category covers all normal annual maintenance and repair costs to the structure. This expense
includes such items as exterior repairs and roof repairs, as well as maintenance of the interior and
its equipment, including HVAC units, elevators, plumbing and electrical. Based on market
estimates and surveyed data, this expense is estimated at $0.28 per square foot or $1,691 annually.
Expense Summary
Based on the foregoing, the expenses are estimated at $4.57 per square foot or $27,577 per year.
INCOME CAPITALIZATION APPROACH
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PRO FORMA ANALYSIS
The following table represents the stabilized pro forma operating statement for the subject
property.
INCOME AND EXPENSE SUMMARY
Rentable Building Area: 6,038 SF
$/SF Total
Gross Rental Income $12.00 72,456$
Expense Reimbursements $3.84 23,161$
Total Potential Income $10.00 95,617$
Less: Vacancy @ 5%$0.79 4,781$
Effective Gross Income $15.04 90,836$
Less: Expenses Reimbursed
Real Estate Taxes X $2.39 14,411$
Insurance X $0.83 5,000$
Maintenance/Grounds X $0.62 3,750$
Management Fees (3% of EGI)$0.45 2,725$
Structural Maintenance/Reserves $0.28 1,691$
Total Expenses $4.57 27,577$
Net Operating Income $10.47 63,259$
Net Income/Effective Gross Income Ratio 69.64%
INCOME CAPITALIZATION APPROACH
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CAPITALIZATION
The method of capitalization selected for this appraisal is the Direct Capitalization Method in
which the net income stream attributable to the entire property is capitalized into an indication of
value by a single overall rate (OAR). Income producing property is usually bought as an
investment. That is, the purchaser wants the property for the return it will yield on the capital
(whether owned or borrowed) used to buy it. The rate of return the investor receives is the
capitalization rate (also called the overall rate), which can be expressed as a relationship between
the annual net operating income a property produces and its value. By dividing the indicated net
operating income of a property by the appropriate capitalization (cap) rate, the property’s value
can be indicated.
Two methods of developing rates for direct capitalization are illustrated below. First is the market
capitalization rate. This is an overall rate exhibited in the market and is the ratio between the total
net operating income (NOI) produced by the property and the sales price of the property.
Generally, the overall rate is extracted from the transactions of similar type properties. Second is
the band of investment method. This method considers the financial components, or bands, of debt
and equity capital required to support the investment.
Market Extracted - Capitalization Rate
In the sales comparison approach, the sales of similar properties are detailed. These sales included
actual or estimated pro forma income and expense information that allowed us to extract
capitalization rates from cash equivalent figures. These are summarized as follows:
Sale No.YOC SF Sale Date Price/Unit OAR
1 2020 10,447 Dec-2022 $215.37 6.14%
2 2019 11,000 Aug-2022 $143.01 6.05%
3 1998 5,500 Jun-2022 $164.55 5.26%
4 1985 23,000 Oct-2021 $93.48 8.33%
Summary of Improved Sales
The extracted capitalization rates range from 5.26% to 8.33%, with an average of 6.45% and a
median of 6.10%.
INCOME CAPITALIZATION APPROACH
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Band of Investment Method
A method commonly used to calculate an overall capitalization rate is the band of investment
method. This method considers the financial components, or bands, of debt and equity capital
required to support the investment. This method thus considers everyone who has a financial
interest in the real estate being appraised. Not every investor will be satisfied with the same rate
of return on an investment. For example, the owner may regard his or her position as riskier than
that of the first or second lien holder. Each mortgage creates a lien on the property. If the owner
defaults, the property may be sold to pay such liens, and the owner will receive only those proceeds
that may remain from the sale of the property after the lien holders have been paid. Since the
owner’s interest is generally considered inferior to those of lien holders, the owner may require a
higher total return on the investment but accept a lower cash flow return, given the value of the
owner’s residual interest in the property in addition to the owner’s subordinated claim on the cash
flow.
The band of investment method must consider both the rate required by the lender and the rate
necessary for the equity investor’s desired pretax cash flow. The rate required by the lender is
termed the mortgage constant and is annual debt service expressed as a percentage of the original
principal amount.
The rate required by the equity investor, which is the ratio of the investor’s expected pretax cash
flow to the investment’s value, is called the equity capitalization rate. The equity capitalization
rate also may be referred to at the cash-on-cash rate, cash flow rate or equity dividend rate.
The overall rate developed by the band of investment method thus is based on (1) the capitalization
rate for debt, called the mortgage constant, and (2) the rate of return required on equity, called the
equity capitalization rate.
For the subject, we are utilizing a 30-year amortization period covering 75% of the value at 9.00%
interest, and typically a buyer would require a 6.00% equity divided rate on this type of real estate
investment, considering the characteristics of the subject. Using the band of investment method,
the overall rate is developed as follows:
Amortization Period 30 years Mortgage Constant (Rm)0.096555
Loan-to-Value Ratio 75%
Equity Component 25%
Interest Rate (i)9.00%
Equity Dividend Rate (Re)6.00%
% Total Value Return Required
Loan 0.750 x 0.09655 (mortgage constant)=0.07242
Equity 0.250 x 0.06000 (equity dividend rate)=0.01500
Overall Rate 0.08742
Rounded 8.74%
INCOME CAPITALIZATION APPROACH
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Secondary Sources – Capitalization Rate
A secondary source of published actual capitalization rates is the RG Watts & Company –
RealtyRates.com Investor Survey. Their Investor Survey by methodology is a national survey and
is presented below:
INCOME CAPITALIZATION APPROACH
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Costar Analytics creates market reports based on the Costar data throughout the subject market
and submarket. The subject is located within the Dallas/Fort Worth industrial market. The
historical and forecasted market data is illustrated in the following exhibit:
Capitalization Rate Conclusions
Method Indicated Discount Rate
Local Market Extraction – Comparable Sales 5.26% - 8.33%
Local Market Extraction – Average 6.45%
Property Model (Band of Investment) 8.74%
Market Survey
RealtyRates.com – DCR 7.68%
RealtyRates.com – Band of Investment 8.48%
RealtyRates.com – Survey (Average) 8.64%
Costar Analytics 6.63%
INCOME CAPITALIZATION APPROACH
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Being the least representative method of estimating a capitalization rate in the current
financial/investment market, the band of investment technique is deemphasized.
In comparison to the sales extractions (given the most emphasis), market surveys, and given the
characteristics of the area and market demand and giving emphasis to the market extractions and
consideration to the tenancy/terms, an overall capitalization rate of 6.00% is supported for the
office warehouse. Using the net operating income and capitalizing it at that OAR produces the
following value at stabilized operation. Utilizing the preceding steps, the calculation for a value
estimate by direct capitalization is presented below:
$63,259
=0.0600
Value Indicated By Direct Capitalization $1,054,317
Final Value by Direct Capitalization $1,055,000
Net Operating Income
Capitalization Rate
RECONCILIATION
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In the preceding sections of this report, the area data and trends, location amenities, highest and
best use, and other elements of value are discussed. The market was researched for comparable
improved sales, and income producing properties.
RECONCILIATION
Cost Approach N/A
Sales Comparison Approach $1,025,000
Income Capitalization Approach $1,055,000
Reconciled Value $1,050,000
SUMMARY OF APPROACHES
Finally, considering the approaches to value, each approach is analyzed in terms of the quantity and
quality of the data used in each approach and applicability to estimate a reliable value.
Cost Approach
Due to the subject age, the cost approach is not as reliable as the sales comparison and income
capitalization approaches because of the amount of estimated depreciation. As such, the cost
approach is not utilized in this appraisal.
Based on the subject’s condition, renovations, and maintenance, the effective age is estimated at 20
years; the remaining economic life is anticipated to be 30 years.
Sales Comparison Approach
The price per square foot is used in the sales comparison approach to provide an indication of
value for the subject. These transactions are considered to reflect the behavior of typical market
participants. Although the sales were somewhat different in age, size, and use, they provide
reasonable value indications of the subject, after adjustment for these various differences. The
value range produced by this approach is a reasonable indicator based on the best available market
data.
Income Capitalization Approach
The direct capitalization method is used in the income capitalization approach to develop an
indication of market value. Operating expenses are estimated based primarily on actual data from
other projects, subject historical records (if available), and data extracted from the tax rolls.
The income capitalization approach is the best approach to determine market value when the real
estate market recognizes the value of a property based on the income it produces. The comparable
rental properties used are representative of market and provided a good indicator of the potential
of the subject property.
RECONCILIATION
PYLES WHATLEY 24-378 90
CONCLUSION
In conclusion, the sales comparison and income capitalization approaches are reliable indicators
due to both the quality and quantity of the available sale data and current rental market data, and
provide a good basis for valuation, with emphasis given to the income capitalization approach.
Based on this type of property, our final opinion of the fee simple interest market value of the
subject is as follows:
Market Value Opinion
Fee Simple, As Is $1,050,000
EXTRAORDINARY ASSUMPTIONS
The property is currently platted with the abutting property. For the purposes of this appraisal,
the subject and the abutting property have been split and valued separately.
This appraisal assumes that all of the information obtained for analysis is accurate; this
information has been verified to the extent possible by the appraiser.
REASONABLE MARKETING PERIOD
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The request to provide a reasonable marketing time opinion exceeds the normal information
required for the conduct of the appraisal process and is treated separately from the process.
REASONABLE MARKETING PERIOD
Reasonable marketing time, as defined by the Uniform Standards of Professional Appraisal
Practice, is an opinion of the amount of time it might take to sell a real or personal property interest
at the concluded market value or at a benchmark price during the period immediately after the
effective date of the appraisal. Marketing time differs from exposure time, which is always
presumed to precede the effective date of an appraisal.
The development of a marketing time opinion uses some of the same data analyzed in the process
of developing a reasonable exposure time opinion as part of the appraisal process and is not
intended to be a prediction of a date of sale or a one-line statement. It is an integral part of the
analyses conducted during the appraisal assignment. This opinion may be expressed as a range or
a number. The opinion can be based on one or more of the following:
• statistical information about days on market
• information from data collection services
• information gathered through sales verification.
• interviews of market participants
• anticipated changes in market conditions
Related information on market conditions that may affect marketing time includes identification
of typical buyers and sellers for the type of real estate involved and typical equity investment levels
and financing terms. Reasonable marketing time is a function of price, time, use, and anticipated
market conditions, such as changes in the cost and availability of funds and is not an isolated
opinion of time alone. The price that may be achieved in the future, at the end of the marketing
period, may or may not be equal to the current appraised value opinion, depending on potential
changes in the physical real estate, demographic and economic trends, the real estate market,
tenancy, property operations, and the effectiveness of the marketing program, among other factors.
A reasonable marketing period for the subject property at the market value opinion stated above is
developed in the following manner:
The opinion of value reached herein is considered supportable and reliable. It is based upon
recent market data including conversations with area brokers and principals involved in the
comparable sales utilized in the valuation of the subject.
According to local brokers, appropriately priced similar properties generally sell within time
periods ranging from approximately 8 to 16 months. This opinion was supported by the marketing
times reported by several of the parties to the improved comparable sales utilized herein. A
reasonable marketing time for the subject property, priced in accordance with the market value
opinion concluded in this report, is considered to be 12 months.
APPRAISER'S CERTIFICATE
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The undersigned certify that, to the best of knowledge and belief:
APPRAISER’S CERTIFICATE
• 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, and conclusions.
• We have no present or prospective interest in the property that is the subject of this report and
no personal interest with respect to the parties involved.
• We have performed no services, as an appraiser or in any other capacity, regarding the
property that is the subject of this report within the three-year period immediately preceding
acceptance of this assignment.
• We have no bias with respect to the property that is the subject of this report or to the parties
involved with this assignment.
• We engagement in this assignment was not contingent upon developing or reporting
predetermined results.
• We 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.
• We analyses, opinions, and conclusions were developed, and this report has been prepared, in
conformity with the Uniform Standards of Professional Practice.
• The reported analyses, opinions, and conclusions were developed, and this report has been
prepared, in conformity with the Code of Professional Ethics and Standards of Professional
Practice of the Appraisal Institute.
• As of the date of this appraisal, Richard McBride has completed the Standards and Ethics
Education Requirements for Practicing Affiliates of the Appraisal Institute.
• Samantha Gwinn and Richard McBride made a personal inspection of the property that is the
subject of this report.
• No one provided significant real property appraisal assistance to the persons signing this
certification.
PYLES WHATLEY
Richard McBride Samantha Gwinn
State of Texas Certification #TX-1380335-G State of Texas Certification #TX-1381399-G
QUALIFICATIONS OF APPRAISERS
RICHARD C. MCBRIDE
Appraisal assignments include retail centers, existing and proposed office buildings, commercial
and industrial properties, self-storage facilities, automobile dealerships, single-family and multi-
family residential properties, and vacant land. Additional consulting assignments include
condemnation and right-of-way work, and other various consulting assignments.
Experience
Appraiser with Pyles Whatley Corporation since 2007; Partner in the company
since 2018
Over sixteen years’ experience in appraising real property interests in Texas and
Oklahoma
Education
Numerous Appraisal Courses offered by the Appraisal Institute
Right-of-way courses offered by the International Right of Way Association
Richland College
o Engineering
o General studies
Professional
Texas Appraiser Licensing and Certification Board
o Certified General Real Estate Appraiser #TX-1380335-G
Oklahoma Real Estate Appraiser Board
o Certified General Real Estate Appraiser # 13506-CGA
Appraisal Institute
o Practicing Affiliate
International Right of Way Association, Chapter 36, Member
SAMANTHA L. GWINN
Experience
❖ Appraiser with PYLES WHATLEY since June 2020. Appraisal assignments include retail
centers, office buildings, RV Parks, hotels, apartments, both existing and proposed
properties, and various commercial and industrial properties.
Education
❖ Oklahoma State University
o Bachelor of Science in Agribusiness
▪ Minor: Agricultural Real Estate Appraisal
❖ Completed numerous appraisal courses and seminars conducted by the Appraisal Institute,
Champions School of Real Estate, and various real estate and financial organizations.
Professional Licenses
❖ State of Texas – Certified General Real Estate Appraiser: #1381399 G
❖ State of Oklahoma – Certified General Real Estate Appraiser: #13828CGA
Affiliations
❖ International Right of Way, Chapter 36, Member
❖ Appraisal Institute, Practicing Affiliate
ADDENDA
TAX INFORMATION
ZONING INFORMATION
ENGAGEMENT LETTER
STATE CERTIFICATIONS