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Appraisal P 090_25
Form ROW-A-5 (Rev. 08/11) Page 1.0 1 REAL ESTATE APPRAISAL REPORT - TEXAS DEPARTMENT OF TRANSPORTATION Address of Property: 2930 W University Drive, Denton, TX 76201 ROW CSJ: N/A Property Owner: Golden Arch Limited Partnership District: N/A Address of Property Owner: P.O. Box 182571, Columbus, OH 43218 Parcel: 090-25 Occupant’s Name: Not Disclosed Federal Project No: N/A Whole: Partial: X Acquisition Highway: IH-35 Utility Relocations County: Denton Purpose of the Appraisal The purpose of this appraisal is to estimate the market value of the fee simple title to the real property to be acquired, encumbered by any easements not to be extinguished, less oil, gas and sulphur. If this acquisition is of less than the whole property, then any special benefits and/or damages to the remainder property must be included in accordance with the laws of Texas. Market Value Market value is defined as follows: “Market Value is the price which the property would bring when it is offered for sale by one who desires, but is not obliged to sell, and is bought by one who is under no necessity of buying it, taking into consideration all of the uses to which it is reasonably adaptable and for which it either is or in all reasonable probability will become available within the reasonable future.” Certificate of Appraiser I hereby certify: That, it is my opinion the total compensation for the acquisition of the herein described property is $62,570 as of February 16, 2022, based upon my independent appraisal and the exercise of my professional judgment; That on February 16, 2022, I personally inspected in the field the property herein appraised; and I afforded Golden Arch Limited Partnership, the property owner, the opportunity to accompany me at the time of the inspection; the letter was delivered via certified mail and no response was received; the inspection took place from the public right-of-way and surrounding public areas; That the comparables relied upon in making said appraisal were as represented by the photographs contained in the appraisal report and were inspected on February 25, 2022; That I have not revealed and will not reveal the findings and results of such appraisal to anyone other than the proper officials of the Texas Department of Transportation or officials of the Federal Highway Administration until authorized by State officials to do so, or until I am required to do so by due process of law or until I am released from this obligation by having publicly testified to such findings; That my compensation is not contingent upon the reporting of a predetermined value or direction in value that favors the cause of the client, the amount of the value estimate, the attainment of a stipulated result or the occurrence of a subsequent event. The appraiser has considered access damages in accordance with Section 21.042(d) of the Texas Property Code, as amended by SB18 of the Texas 82nd Regular Legislative Session and finds as follows: 1. Is there a denial of direct access on this parcel? No (yes or no) 2. If so, is the denial of direct access material? N/A (yes, no, or not applicable) 3. The lack of any access denial or the material impairment of direct access on or off the remaining property affects the market value of the remaining property in the sum of $0. I certify to the best of my knowledge and belief that: That the statements of fact contained in this report are true and correct; That the reported analyses, opinions and conclusions are limited only by the reported assumptions and limiting conditions, and are my personal, unbiased professional analyses, opinions and conclusions; That I have no present or prospective interest in the property that is the subject of this report, and I have no personal interest or bias with respect to the parties involved; and, That my analyses, opinions and conclusions were developed, and this report has been prepared in conformity with the appropriate State laws, regulations, and policies and procedures applicable to the appraisal of right of way for such purposes, and that to the best of my knowledge no portion of the value assigned to such property consists of items which are noncompensable under the established law of said State, and any decrease or increase in the fair market value of subject real property prior to the date of valuation caused by the public improvement other than that due to the physical deterioration within the reasonable control of the owner has been disregarded in estimating the compensation for the property. To the best of my knowledge, the value does not include any items which are not compensable under State law. T.J. Smith, TX-1380471-G Certification Number March 31, 2022 Date Reviewing Appraiser Date 03/31/2022 DocuSign Envelope ID: 25E66FBC-2A6A-4B97-AD34-4BEF8006E1B6 Aerial 1.1 SUBJECT AERIAL WITH ACQUISITION OVERLAY Aerial View of Subject and Acquisition Subject Parcel 25 TxDOT DocuSign Envelope ID: 25E66FBC-2A6A-4B97-AD34-4BEF8006E1B6 Certification 1.2 CERTIFICATION We certify to the best of our knowledge and belief: 1.The statements of fact contained in this report are true and correct. 2.The reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions and are our personal, impartial and unbiased professional analyses, opinions, and conclusions. 3.We have no present or prospective interest in or bias with respect to the property that is the subject of this report and have no personal interest in or bias with respect to the parties involved with this assignment. 4.Our engagement in this assignment was not contingent upon developing or reporting predetermined results. 5.Our compensation for completing this assignment is not contingent upon the development or reporting of a predetermined value or direction in value that favors the cause of the client, the amount of the value opinion, the attainment of a stipulated result, or the occurrence of a subsequent event directly related to the intended use of this appraisal. 6.Our analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the Uniform Standards of Professional Appraisal Practice, as well as the requirements of the State of Texas. 7.The reported analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the requirements of the Code of Professional Ethics and Standards of Professional Appraisal Practice of the Appraisal Institute. 8.The use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representatives. 9.T.J. Smith has made a personal inspection of the property that is the subject of this report. 10.No one provided significant real property appraisal assistance to the persons signing this report. 11.Valuation & Advisory Services operates as an independent economic entity within CBRE, Inc. Although employees of other CBRE, Inc. divisions may be contacted as a part of our routine market research investigations, absolute client confidentiality and privacy were maintained at all times with regard to this assignment without conflict of interest. 12.T.J. Smith has not provided any 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. T.J. Smith, TX-1380471-G DocuSign Envelope ID: 25E66FBC-2A6A-4B97-AD34-4BEF8006E1B6 Table of Contents 1.3 TABLE OF CONTENTS 1 REAL ESTATE APPRAISAL REPORT - TEXAS DEPARTMENT OF TRANSPORTATION ................................... 1.0 Table of Contents .............................................................................................................................................. 1.3 Identification of the Subject ............................................................................................................................. 1.7 Ownership .......................................................................................................................................................... 1.7 Owner Contact .................................................................................................................................................. 1.8 2 PHOTOGRAPHS OF SUBJECT PROPERTY .................................................................................................. 2.0 Neighborhood Analysis ..................................................................................................................................... 2.3 Location .............................................................................................................................................................. 2.3 Growth Patterns ................................................................................................................................................. 2.4 Access ................................................................................................................................................................ 2.6 Demographics ................................................................................................................................................... 2.8 Conclusion .......................................................................................................................................................... 2.8 Tax Map .............................................................................................................................................................. 2.9 Plat Map ........................................................................................................................................................... 2.10 Floodplain Map ................................................................................................................................................ 2.11 Site Analysis ...................................................................................................................................................... 2.12 Improvements Analysis .................................................................................................................................... 2.14 Zoning ............................................................................................................................................................... 2.15 Tax Assessment Data ....................................................................................................................................... 2.17 3 PROPERTY VALUATION SUMMARY - WHOLE ........................................................................................... 3.0 Sales Comparison Approach ........................................................................................................................... 3.5 Land Value ......................................................................................................................................................... 3.6 Cost Approach ................................................................................................................................................ 3.13 Sales Comparison Approach ......................................................................................................................... 3.16 Income Approach ........................................................................................................................................... 3.17 Reconciliation of Value - Whole .................................................................................................................... 3.18 4 PART TO BE ACQUIRED ............................................................................................................................. 4.0 Valuation of the Remainder Before the Acquisition ...................................................................................... 4.3 5 PROPERTY VALUATION SUMMARY - REMAINDER ................................................................................... 5.0 Description and Highest and Best Use – Remainder After the Acquisition .................................................. 5.1 Sales Comparison Approach ........................................................................................................................... 5.5 Cost Approach .................................................................................................................................................. 5.6 Sales Comparison Approach ........................................................................................................................... 5.7 Income Approach ............................................................................................................................................. 5.8 Reconciliation of Value – Remainder After .................................................................................................... 5.9 6 COMPENSATION SUMMARY .................................................................................................................... 6.0 Cost to Cure ....................................................................................................................................................... 6.1 Assumptions and Limiting Conditions .............................................................................................................. 6.2 7 ADDENDA .................................................................................................................................................. 7.0 DocuSign Envelope ID: 25E66FBC-2A6A-4B97-AD34-4BEF8006E1B6 Introduction 1.4 Executive Summary INTRODUCTION CBRE File No.:21-361RW-0499-25 Date of the Report March 31, 2022 Effective Date February 16, 2022 Valuation Date Type Current Client City of Denton, its employees, agents and assigns ROW Provider Name CobbFendley Representative Mr. Michael Hale, SR/WA, R/W-URAC, R/W-NAC, R/W-RAC, Principal, Right of Way Production Manager Address 2801 Network Boulevard Frisco, TX 75034 Parcel Number 25 Subject Location 2930 W University Drive Denton, Denton County, TX Owner Golden Arch Limited Partnership Legal Description Lot 1, Block 1, Moore Addition, City of Denton, Denton County, Texas Assessor IDs (Impacted Only)188305 Property Rights Appraised Fee Simple Estate subject to existing encumbrances Rights Being Acquired Easement Current Use of Subject McDonald's restaurant Highest and Best Use As Vacant Commercial of Acquisition As part of the Whole Property Estimated Exposure Time 9-18 Months Buyer Profile Developer or Owner-User LAND AREAS Whole Property 0.7177 AC 31,264 SF Fee Area 0.7177 AC 31,264 SF Part Acquired Parcel 25 0.0689 AC 3,002 SF Remainder Property Fee Area Remaining 0.6488 AC 28,262 SF Parcel 25 0.0689 AC 3,002 SF Remainder Total Size 0.7177 AC 31,264 SF CONCLUDED MARKET VALUE Market Value Compensation Larger Parcel $932,413 Part(s) Being Acquired $54,405 Remainder Before Consideration of Damages $878,008 Remainder After Consideration of Damages $878,008 Net Damages or Benefits $0 Net Cost to Cure (Temporary Damages)$8,165 Total Compensation $62,570 DocuSign Envelope ID: 25E66FBC-2A6A-4B97-AD34-4BEF8006E1B6 Introduction 1.5 SALIENT POINTS The subject whole property is considered to be the remainder property after the acquisition by TxDOT for the expansion of the IH-35 right-of-way. According to the client, any impacted site improvements will be repaired or replaced by the project contractor to a similar or better condition than what exists prior to installation of utilities. It is noted that the irrigated landscaping, sign, and light standard impacted by the proposed acquisition will not be replaced by the project contractor. As such, the value of these impacted improvements has been included in our analysis along with a cost to cure this item. The site is improved with a fast-food restaurant along with related site improvements. The main improvements are not impacted by the proposed acquisition and therefore have been excluded from this analysis. COVID-19 – MARKET UNCERTAINTY With vaccination rollouts and the lifting of occupancy restrictions becoming common across the United States, many real estate market sectors and locations are experiencing a return to relative normalcy. In these types of markets, property sales and leasing activity are recovering and there is less uncertainty regarding how investors and tenants are responding to the impacts of COVID-19. Still, other property types and locations are impacted by uncertainty, providing limited sales and leasing activity as evidence for economic assumptions. During our investigation of market data for the subject of this report we were able to identify market activity e.g. sales and leasing activity that has occurred since March of 2020 (or the inception of the Global Pandemic). Due to the availability of market data we believe the impacts of COVID-19 on this property type has been adequately considered. EXTRAORDINARY ASSUMPTIONS AND HYPOTHETICAL CONDITIONS An extraordinary assumption is defined as “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.” 1 We have relied on public records for the land area size utilized in this assignment and we assume this size to be correct. This is net the TxDOT fee acquisition explained in the ownership history. Based on instructions from the client, it is assumed that any damage to improvements such as paving, sidewalks, landscaping and structural improvements caused by construction, maintenance, operation, repairing, alteration, replacement, or removal of its facilities shall be repaired or replaced to their as-is condition or better. Thus, no compensation or cost to cure these improvements has been included in this analysis. 1 The Appraisal Foundation, USPAP DocuSign Envelope ID: 25E66FBC-2A6A-4B97-AD34-4BEF8006E1B6 Introduction 1.6 It is assumed that any underground improvements or other improvements which are not known to the appraiser will not be impacted by the project. Any impact to such improvements will require modification of this analysis or separate agreement between the property owner and the client. Based on our investigation, we believe it is reasonable to make the extraordinary assumption that the acquisition will not affect the status of the site as it relates to legal conformity to applicable zoning standards. A hypothetical condition is defined as “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 purposes of analysis.” 2 The use of extraordinary assumptions and hypothetical conditions may affect assignment results. The value of the remainder after the acquisition is subject to the Hypothetical Condition that, as of the effective date of appraisal, the proposed project has been constructed according to project specifications. This appraisal is performed under the condition that influence of the project on property values has been disregarded. “The appraiser shall disregard any decrease or increase in the market value of the real property caused by the project for which the property is to be acquired, or by the likelihood that the property would be acquired for the project, other than that due to physical deterioration within the reasonable control of the owner.”3 Any non-compensable damages have been excluded from analysis, as prescribed by legal instruction, even though the value of the remainder may be impacted by the project. Certain elements of damage cannot be considered in the appraisal of the remainder although these elements may reduce the value of the remainder tract. This is in accordance with State v. Schmidt, 867 S.W. 2d 769, 781 (Tex. 1993), wherein the Supreme Court ruled that damages due to diversion of traffic, circuitry of travel, increased noise, reduced visibility to passers byes, and inconvenience due to construction activities are non-compensable and are thus not considered in the valuation of the remainder. See also Texas Property Code, Chapter 21, Subchapter C, Section 21.042 (d). The valuation of the whole property assumes that TxDOT has completed their right- of-way acquisition for the IH-35E widening project, which has necessitated the relocation of the City of Denton utilities outside of the State's new right-of-way. Any improvement impact resulting from the state's right-of-way acquisition is assumed to have been considered, and compensation awarded accordingly, during negotiations for those acquisitions. In situations where demolition of on-site improvements was considered necessary as a result of the state's acquisitions, the property is appraised utilizing the hypothetical condition that those improvements have been removed from the site as of the effective date, even though those 2 The Appraisal Foundation, USPAP 3 Uniform Relocation Assistance and Real Property Acquisition for Federal and Federally-Assisted Programs, 49 C.F.R. § 24.103 (2005) DocuSign Envelope ID: 25E66FBC-2A6A-4B97-AD34-4BEF8006E1B6 Introduction 1.7 improvements may have still been present on the site on the effective date of the appraisal. IDENTIFICATION OF THE SUBJECT The subject is a 0.7177-acre commercial tract improved with a 2,707-square foot retail property (McDonald's restaurant) located at 2930 W University Drive in Denton, Texas. The improvements were constructed in 1996 and are considered to be in average condition for their age. The improvements are not affected by the proposed acquisition and have not been valued. The City of Denton intends to acquire an easement for water and wastewater lines. Identification of the Larger Parcel The value of a property cannot be estimated without a determination of the property to be appraised. In some cases, multiple tax parcels are utilized together in one use or a larger tract of land may be legally, economically and physically divisible into smaller economic units. The three tests to determine the “larger parcel” to be valued in an appraisal are: Unity of Title - control by a single entity, individual, or group. Title is largely a legal question. Unity of Use - an integrated highest and best use separate from surrounding land. Multiple tracts can have the same use but be separate tracts, such as platted lots. Use is an economic question that is dependent upon supply and demand, availability of substitutes and other economic principles. Proximity - contiguous tracts or proximate tracts that are used together. Subordinate to Unity of Use. In this case, the subject identified for valuation purposes of this assignment is 0.7177 acres, or 31,264 square feet of land that is under the same owner and use. OWNERSHIP Based on our research, the most recent acquisition was in 1996 and is not relevant for this analysis. To the best of our knowledge there has been no ownership transfers of the property during the previous five years. The summary of ownership information is listed in the table below. DocuSign Envelope ID: 25E66FBC-2A6A-4B97-AD34-4BEF8006E1B6 Introduction 1.8 OWNERSHIP SUMMARY Current Owner:Golden Arch Limited Partnership Date Purchased:Nov 6, 1996 Purchase Price:Unknown Legal Reference 1996-079626 County/Locality Name:Denton Pending Sale:No Change of Ownership - Past 5 Years No According to Document No. 2020-209694 in the Denton County records, the State of Texas acquired 3,536 square feet of land on November 23, 2020. This acquisition is along the subject's south property line. This acreage has been netted out of the acreage provided in the subject's plat map to conclude to the whole property size. Compiled by CBRE OWNER CONTACT The owner was initially contacted via US Certified Mail. The appraiser unable to establish contact with a representative of the property owner. Thus, an inspection was made from the public right-of-way and surrounding properties on February 16, 2022. OWNER AND CONTACTS Owner Name Golden Arch Limited Partnership Owner Address P.O. Box 182571 Owner City, State, Zip Columbus, OH 43218 Occupancy Not Disclosed Compiled by CBRE Scope of Work This Appraisal Report is intended to comply with the reporting requirements set forth under Standards Rule 2 of USPAP. It is also intended to comply with guidance set forth in the Texas Property Code, Title 4, Chapter 21, Subchapter A and the TxDOT “ROW Appraisal and Review Manual.” The scope of the assignment relates to the extent and manner in which research is conducted, data is gathered and analysis is applied. Intended Use of Report This appraisal is to be used for real property acquisition for the IH-35 Utility Relocations project, based on the rights being acquired, and no other use is permitted. The report is not the appraisal but is the reporting of the appraisal to the named client or named intended user. Anyone else who attempts to rely on an appraisal report that is not a named user may be misled by the report. If you are not the client, you have no way of knowing if a later appraisal was done that replaces this report. Any changes will result in a different report date. Accordingly, this document may no longer contain the appraisers’ opinions. Any subsequent reports, with a later report date, voids this document even to the client or intended user. DocuSign Envelope ID: 25E66FBC-2A6A-4B97-AD34-4BEF8006E1B6 Introduction 1.9 Client The client is the City of Denton, its employees, agents and assigns, through a subcontract with Cobb, Fendley & Associates, Inc. Intended User Of Report This appraisal is to be used by the City of Denton, its employees, agents, and assigns and no other user may rely on our report unless as specifically indicated in the report. Intended Users - the intended user is the person (or entity) who the appraiser intends will use the results of the appraisal. The client may provide the appraiser with information about other potential users of the appraisal, but the appraiser ultimately determines who the appropriate users are given the appraisal problem to be solved. Identifying the intended users is necessary so that the appraiser can report the opinions and conclusions developed in the appraisal in a manner that is clear and understandable to the intended users. Parties who receive or might receive a copy of the appraisal are not necessarily intended users. The appraiser’s responsibility is to the intended users identified in the report, not to all readers of the appraisal report. 4 Purpose of the Appraisal The purpose of this appraisal is to estimate the total compensation due to the property owner based on the market value of the whole property, acquisition, remainder, and any temporary easements or curative costs. Definition of Value The definition of market value, as defined in City of Austin v. Cannizzo et al.5, is stated on Page 1 of this report. Interest Appraised INTERESTS APPRAISED Fee Simple Estate Absolute ownership unencumbered by any other interest or estate, subject only to the limitations imposed by the governmental powers of taxation, eminent domain, police power and escheat. Dictionary of Real Estate Appraisal, Sixth Edition, 2015, page 90 Easement The right to use another’s land for a stated purpose. Dictionary of Real Estate Appraisal, Sixth Edition, 2015, page 71 The interest appraised includes the value of the rights to the fee owner, considering existing easements, encumbrances, and restrictions. The value of any mineral estate is excluded from this valuation, unless otherwise stated. Extent to Which the Property is Identified The property is identified through the following sources: 4 Appraisal Institute, The Appraisal of Real Estate, 14th ed. (Chicago: Appraisal Institute, 2013), 50. 5 City of Austin v. Cannizzo et al., 267 S.W. 2d 808, 815 [Tex. 1954]. DocuSign Envelope ID: 25E66FBC-2A6A-4B97-AD34-4BEF8006E1B6 Introduction 1.10 postal address assessor’s records legal description Extent to Which the Property is Inspected The extent of the inspection included a personal, on-site visit with photography. Inspections were conducted as follows: T.J. Smith personally inspected from the nearest point along a public right of way on February 16, 2022. Effective Date The effective date is February 16, 2022. Type and Extent of the Data Researched The appraiser reviewed the following: applicable tax data zoning requirements flood zone status demographics comparable data Type and Extent of Analysis Applied The appraiser analyzed the data gathered through the use of appropriate and accepted appraisal methodology to arrive at a probable value indication via each applicable approach to value. The steps required to complete each approach are discussed in the methodology section. Data Resources Utilized in the Analysis DATA SOURCES Item:Source(s): Site Data Whole Property Public records Acquisition Size Survey provided by the client Remainder Size Public records Floodplain FEMA Zoning City of Denton Compiled by CBRE DocuSign Envelope ID: 25E66FBC-2A6A-4B97-AD34-4BEF8006E1B6 Form ROW-A-5 (Rev. 8/11) 2.0 2 PHOTOGRAPHS OF SUBJECT PROPERTY Include Each Major Improvement Parcel No.: 25 Local Address: 2930 W University Drive, Denton, TX Date Taken: February 16, 2022 Taken By: T.J. Smith 1. Point from which taken: Near the SEC of the subject property Looking: West at the subject property 2. Point from which taken: Near the SEC of the subject property Looking: West along proposed acquisition DocuSign Envelope ID: 25E66FBC-2A6A-4B97-AD34-4BEF8006E1B6 Form ROW-A-5 (Rev. 8/11) 2.1 PHOTOGRAPHS OF SUBJECT PROPERTY Include Each Major Improvement Parcel No.: 25 Local Address: 2930 W University Drive, Denton, TX Date Taken: February 16, 2022 Taken By: T.J. Smith 3. Point from which taken: Near the SWC of subject Looking: East along proposed acquisition 4. Point from which taken: Near the SWC of subject Looking: East along proposed acquisition DocuSign Envelope ID: 25E66FBC-2A6A-4B97-AD34-4BEF8006E1B6 Form ROW-A-5 (Rev. 8/11) 2.2 PHOTOGRAPHS OF SUBJECT PROPERTY Include Each Major Improvement Parcel No.: 25 Local Address: 2930 W University Drive, Denton, TX Date Taken: February 16, 2022 Taken By: T.J. Smith 5. Point from which taken: Near the SWC of the subject property Looking: Northeast toward main improvements DocuSign Envelope ID: 25E66FBC-2A6A-4B97-AD34-4BEF8006E1B6 Neighborhood Analysis 2.3 NEIGHBORHOOD ANALYSIS LOCATION The subject is located in Denton County, Texas, in an area known as the DFW Metroplex. NEIGHBORHOOD CHARACTERISTICS Location:(urban, suburban, rural)Rural Built-Up:(>75%, 25-50%, <25%)25% - 75% Growth Rate / Change:(rapid, stable, slow)Stable Change in Present Land Use:(not likely, likely*, taking place*)Not Likely Neighborhood Boundaries North: South: East: West: Source: CBRE SH-288 IH-35E SH-288 FM 156 DocuSign Envelope ID: 25E66FBC-2A6A-4B97-AD34-4BEF8006E1B6 Neighborhood Analysis 2.4 Neighborhood Housing Trends The neighborhood housing trends and home prices are summarized as follows: NEIGHBORHOOD HOUSING TRENDS Property Values:(increasing, stable, declining)Increasing Demand/Supply:(shortage, in balance, oversupply)In Balance Marketing Time:(< 3 months, 3-6 months, > 6 months)< 3 Months Low High Predominant Price ($000's):$100 $4,121 $255 Age (yrs.):New 107 22 Source: CBRE Land Use The local land use patterns are summarized as follows. NEIGHBORHOOD LAND USE Commercial Land Use Patterns Primary Commercial Thoroughfares: Major Demand Generators: Source: CBRE Denton is home to the University of North Texas, Texas Women's University, and many other large employers such as Peterbilt Motors, Texas Health Presbyterian Hospital Denton, Medical City Denton, Josten's, Inc., Sally Beauty Supply, Inc., among others. IH-35, US Highway 377, US-77, FM 2181, SH-288, US-380 Land uses are predominately commercial in the vicinity of the subject; however, the larger neighborhood includes a mix of residential, multi-family, and commercial uses. Larger uses include several auto dealers, Medical City Denton, and The University of North Texas. GROWTH PATTERNS Growth patterns have occurred primarily along area arterials such as Interstate Highway 35. Growth patterns have also occurred along primary commercial thoroughfares such as SR North Loop 288, Teasley Lane, Mingo Road, South Woodrow Lane, South Bell Avenue, North Elm Street, East McKinney Street, US Highway 380, North Locust Street, East Sherman Drive, and Carroll Boulevard. Retail development in the subject neighborhood is comprised primarily of community retail centers located at the intersections of major neighborhood thoroughfares. Rayzor Ranch Rayzor Ranch Town Center is a newer area of commercial development located at the southeast quadrant of Interstate Highway 35 and U.S. Highway 380 in the northwestern DocuSign Envelope ID: 25E66FBC-2A6A-4B97-AD34-4BEF8006E1B6 Neighborhood Analysis 2.5 portion of the neighborhood. This area includes approximately 600,000 square feet of open-air shopping, dining and entertainment. In addition to retail stores such as Alamo Draft House Cinema, Cotton Patch Café, Houlihan’s Restaurant and Bar and Andy B’s Bowl Social, this area includes outdoor gathering spaces and an amphitheater with the design inspired by historic regional urban architecture. The Rayzor Ranch Market Place is located in the northeast quadrant of Interstate 35 and U.S. Highway 380 includes a concentration of retail development. Tenants include Walmart, PetCo, Sam’s Club, Kohl’s, Ross Dress for Less, JoAnn Fabric and Craft, Tuesday Morning, Marshalls, Famous Footwear and others. University of North Texas Noted as one of the nation’s largest universities, University of North Texas (UNT) currently offers 106 bachelor’s, 88 master’s and 36 doctoral programs. The UNT main campus is located in the southwestern portion of the subject neighborhood. However, the 550,000 square foot University of North Texas Discovery Park (formerly Research Park) is located north of the main campus in Denton and in the northwest potion of the subject neighborhood. The facility houses leading-edge research projects in biomedicine, nanotechnology, materials composition and others. It is also home to the UNT School of Engineering, supports teaching and research of STEM (science-tech-eng-math) disciplines and partners in regional economic development initiatives that promote technology innovation in North Texas. The most recent certified enrollment as of the Fall of 2020 was 40,653 students, the fifth largest in the State of Texas. In addition, for the December 2019, May 2020 and August 2020 graduations, the university awarded 8,030 bachelor’s degrees, 1,930 master’s degrees, and 311doctoral degrees. The five-year average for degrees awarded at the university is 9,448. Texas Woman’s University Texas Women’s University is also located in the central portion of the subject neighborhood. In the U.S. News and World Report's 2013 Best Colleges issue, TWU was ranked in the top three institutions in the state and ten nationally for universities that have the most diverse student populations. TWU’s graduate program in Physical Therapy is the only physical therapy program in Texas that is consistently ranked as a top Physical Therapy program by U.S. News and World Report. Finally, TWU is among the nation’s leading providers of healthcare professionals and produces more nurses than any Texas program. DocuSign Envelope ID: 25E66FBC-2A6A-4B97-AD34-4BEF8006E1B6 Neighborhood Analysis 2.6 Golden Triangle Mall The Golden Triangle Regional Mall is the largest regional mall in the area and is located at the northeast quadrant of Interstate Highway 35 and Loop 288. This regional mall features approximately 75 stores and is anchored by Macy’s, JCPenney, Barnes & Noble, Dillard’s and H&M. This mall features a food court, WIFI hotspots, and children’s play area. Also, within the Golden Triangle Mall area is the Denton Community Theatre, which presents dozens of productions throughout the year. Finally, Golden Triangle Mall also includes Silver Cinemas, which is a full-service movie theater with five screens. ACCESS Primary access to the subject neighborhood is provided by Interstate Highway 35. Interstate Highway 35 is primarily a four-lane, variable width right-of-way, traversing the neighborhood in an east/west and north/south direction. This arterial splits into Interstate Highway 35 East and Interstate Highway 35 West in the southern Denton area, providing a direct route to both the Dallas and Fort Worth Central Business Districts. Interstate Highway 35 West connects the subject neighborhood with the Fort Worth Central Business District, while Interstate Highway 35 East connects the subject neighborhood with the Dallas Central Business District. The SR North Loop 288 encircles the eastern portion of the neighborhood and intersects with Interstate Highway 35 in the southern portion of the subject neighborhood. Additional major thoroughfares include Teasley Lane, Mingo Road, South Woodrow Lane, South Bell Avenue, North Elm Street, East McKinney Street, U.S. Highway 380, North Locust Street, East Sherman Drive, and Carroll Boulevard. DocuSign Envelope ID: 25E66FBC-2A6A-4B97-AD34-4BEF8006E1B6 Neighborhood Analysis 2.7 Surrounding Land Use Map Subject DocuSign Envelope ID: 25E66FBC-2A6A-4B97-AD34-4BEF8006E1B6 Neighborhood Analysis 2.8 DEMOGRAPHICS Selected neighborhood demographics for the subject are shown in the following table: 2930 W University Drive Denton, TX 76201 Population 2026 Total Population 3,273 56,218 116,517 1,086,333 2021 Total Population 2,766 50,489 105,224 948,666 2010 Total Population 2,242 41,395 88,003 662,614 2000 Total Population 1,828 37,325 76,462 432,382 Annual Growth 2021 - 2026 3.42%2.17%2.06%2.75% Annual Growth 2010 - 2021 1.93%1.82%1.64%3.32% Annual Growth 2000 - 2010 2.06%1.04%1.42%4.36% Households 2026 Total Households 1,355 22,681 45,377 389,767 2021 Total Households 1,143 20,114 40,773 341,130 2010 Total Households 910 16,220 33,855 240,289 2000 Total Households 756 15,051 29,636 158,630 Annual Growth 2021 - 2026 3.46%2.43%2.16%2.70% Annual Growth 2010 - 2021 2.09%1.98%1.70%3.24% Annual Growth 2000 - 2010 1.87%0.75%1.34%4.24% Income 2021 Median Household Income $77,035 $42,009 $52,762 $93,016 2021 Average Household Income $85,611 $56,357 $69,622 $120,855 2021 Per Capita Income $35,321 $22,568 $27,257 $43,496 2021 Pop 25+ College Graduates 808 10,564 23,528 286,032 Age 25+ Percent College Graduates - 2021 40.8%41.1%39.3%46.6% Source: ESRI SELECTED NEIGHBORHOOD DEMOGRAPHICS Denton County1 Mile Radius 3 Mile Radius 5 Mile Radius As shown above, the population within the subject neighborhood has experienced an increase over the past several years. The neighborhood is expected to experience population growth over the next five years. As a result, the demand for existing developments is expected to be average to good. The neighborhood appears to be well established and favorably accepted. CONCLUSION As shown above, the population within the subject neighborhood has experienced positive growth since 2000. The neighborhood currently has an average household income of $56,357 within a three mile radius of the subject. The area is also reflecting a median household income of $42,009 for 2021. The outlook for the neighborhood is for continued growth over the next several years. As a result, the demand for existing developments is expected to be good. DocuSign Envelope ID: 25E66FBC-2A6A-4B97-AD34-4BEF8006E1B6 Site Analysis 2.9 TAX MAP Subject DocuSign Envelope ID: 25E66FBC-2A6A-4B97-AD34-4BEF8006E1B6 Site Analysis 2.10 PLAT MAP Subject DocuSign Envelope ID: 25E66FBC-2A6A-4B97-AD34-4BEF8006E1B6 Site Analysis 2.11 FLOODPLAIN MAP Subject DocuSign Envelope ID: 25E66FBC-2A6A-4B97-AD34-4BEF8006E1B6 Site Analysis 2.12 SITE ANALYSIS The following chart summarizes the salient characteristics of the subject site. SITE SUMMARY AND ANALYSIS Physical Description Gross Site Area 0.7177 Acres 31,264 Sq. Ft. Primary Road Frontage US-380 150 Feet Average Depth 210 Feet Shape Topography Primary Traffic Counts (24 hrs.)US 380 28,805 @ IH-35 Date: 2020 Zoning District Flood Map Panel No. & Date 48121C0360G April 18, 2011 Flood Zone Zone X (Unshaded) Flood Notes Ingress/Egress Points Comparative Analysis Access Visibility Functional Utility Traffic Volume Adequacy of Utilities Landscaping Drainage Utilities Availability Water Yes Sewer Yes Natural Gas Yes Electricity Yes Telephone Yes Other Yes No Unknown Detrimental Easements X Encroachments X Deed Restrictions X Source: Various sources compiled by CBRE Average Average Provider City of Denton Appears adequate City of Denton Atmos Energy Oncor Electric AT&T through various providers Rating Average Average Average Rectangular Generally Level SC - Suburban Corridor AREA OF MINIMAL FLOOD HAZARD 2 along south boundary and adjoining tracts Average DocuSign Envelope ID: 25E66FBC-2A6A-4B97-AD34-4BEF8006E1B6 Site Analysis 2.13 Conclusion of Site Analysis The site is suitable for uses commensurate with the surrounding neighborhood. The site is well-located and is afforded average visibility and average access from roadway frontage. The size of the site is typical for the area and there are no known detrimental uses in the immediate vicinity. There are no known factors which are considered to prevent the site from development to its highest and best use, as vacant. DocuSign Envelope ID: 25E66FBC-2A6A-4B97-AD34-4BEF8006E1B6 Improvements Analysis 2.14 IMPROVEMENTS ANALYSIS The subject is a 0.7177-acre commercial tract improved with a 2,707-square foot retail property (McDonald's restaurant) located at 2930 W University Drive in Denton, Texas. The improvements were constructed in 1996 and are considered to be in average condition for their age. The improvements are not affected by the proposed acquisition and have not been valued. The City of Denton intends to acquire an easement for water and wastewater lines. The main improvements are not impacted by the proposed acquisition and are therefore excluded from this analysis. According to the client, any impacted paving, sidewalks and curbing will be repaired or replaced by the project contractor to a similar or better condition than what exists prior to installation of utilities. It is noted that the irrigated landscaping, pylon sign, and light standard impacted by the proposed acquisition will not be replaced by the project contractor. As such, the value of these impacted improvements have been included in our analysis along with a cost to cure as necessary. Below is a summary of the impacted improvements. IMPROVEMENT CONDITION RATINGS Improvement Condition Irrigated Landscaping 150 SF Average Sign 1 EA Average Light Standard 1 EA Average Compiled by CBRE FURNITURE, FIXTURES AND EQUIPMENT (PERSONAL PROPERTY) There were no items of personal property noted during the inspection. DocuSign Envelope ID: 25E66FBC-2A6A-4B97-AD34-4BEF8006E1B6 Zoning 2.15 ZONING The following chart summarizes the subject’s zoning requirements. ZONING SUMMARY Current Zoning Legally Conforming Uses Permitted Zoning Change Category Zoning Requirement Minimum Lot Size 10,000 Sq. Ft. Minimum Lot Width None Minimum Lot Depth None Maximum Height 55 Feet Minimum Setbacks Front Yard 20 Feet Street Side Yard 5 Feet Interior Side Yard 5 Feet Rear Yard 10 Feet Maximum Bldg. Coverage 80% Source: City of Denton Planning & Zoning Dept. SC - Suburban Corridor See Comments The SC district is intended to provide moderate- to high-intensity commercial, office, and retail uses along high-traffic corridors. The SC district provides elevated building and landscape design, buildings oriented to the street, and appropriate buffering from adjacent neighborhoods. While the SC district is primarily auto-oriented, it provides a safe environment for pedestrians and cyclists. Not likely ANALYSIS AND CONCLUSION OF LAND USE REGULATIONS The improvements represent a legally-conforming use and, if damaged, may be restored without special permit application. The above information is based upon publicly-available data and is not a substitute for a site-specific development plan that has been reviewed and approved by the municipality. Additional information may be obtained from the appropriate governmental authority. For purposes of this appraisal, the appraiser has assumed the information obtained is correct. DocuSign Envelope ID: 25E66FBC-2A6A-4B97-AD34-4BEF8006E1B6 Zoning 2.16 ZONING MAP Subject DocuSign Envelope ID: 25E66FBC-2A6A-4B97-AD34-4BEF8006E1B6 Tax Assessment 2.17 TAX ASSESSMENT DATA The following summarizes the local assessor’s estimate of the subject’s market value. TAX INFORMATION Assessor Account ID(s)188305 Tax Year 2021 Assessed Land Acres .799 AC Assessed Land SF 34,804 SF Assessor Improvement Value $662,753 Assessor Land Value $870,100 Assessor Total Market Value $1,532,853 Assessor Land Value/SF $25.00 Tax Rate 2.160909 Total Taxes $33,124 Based on our anlaysis, the assessed value appears to be low. For purposes of this analysis, the appraiser assumes that all taxes are current. DocuSign Envelope ID: 25E66FBC-2A6A-4B97-AD34-4BEF8006E1B6 Form ROW-A-5 (Rev. 8/11) Each approach developed follows this page and is sequenced as shown below. Land Value, Pg SCA-3.5 Cost Approach, Pg CA-3.13 Sales Comparison Approach, Pg SCA-3.16 Income Approach, Pg IA-3.17 Page PVS-3.0 3 PROPERTY VALUATION SUMMARY - WHOLE Whole: Part to be Acquired: Remainder After: HIGHEST AND BEST USE ANALYSIS:(The Highest and Best Use analysis should consider the reasonably probable and legal use of vacant land or improved property considering legally permissible, physically possible, financially feasible, and maximally productive. Use a separate page, numbered accordingly, as necessary.) See analysis. VALUATION APPROACHES Insert value estimate, then describe, analyze, and support each approach as required. Sales Comparison Approach, (land value) ................................................................. $922,288 Cost Approach ............................................................................................................... $932,413 Sales Comparison Approach, (as improved) ...................................................................... N/A Income Approach .................................................................................................................. N/A Reconciliation of Approaches to Value: The sales comparison approach for land is utilized to develop an opinion of land value because market participants rely on this method. The cost approach was developed to a degree appropriate for the scope of this assignment. The subject is valued as vacant land and so the sales comparison approach for improved property is not applicable. Being valued as vacant land, the income approach for improved property is not applicable. Furthermore, surface rights in this area are not purchased based on income production. Based on the foregoing, the market value of the subject property before the acquisition has been concluded as follows: Contributory Value of Improvements (Itemized) Irrigated Landscaping 150 SF $525 Sign 1 EA $7,360 Light Standard 1 EA $2,240 Total Contributory Value of Improvements $10,125 Contributory Land Value (Itemized) Fee Area (31,264 SF) @ $29.50 $922,288 Reconciled Final Value $932,413 DocuSign Envelope ID: 25E66FBC-2A6A-4B97-AD34-4BEF8006E1B6 Valuation Analysis – Whole Property 3.1 Highest and Best Use – Whole Property In appraisal practice, the concept of highest and best use represents the premise upon which value is based. The four criteria the highest and best use must meet are: legally permissible; physically possible; financially feasible; and maximally productive. The highest and best use analysis of the subject is discussed below. AS VACANT Legally Permissible The legally permissible uses were discussed in the Site Analysis and Zoning Sections. Based on the legally permissible uses, only commercial uses are given further consideration in the following analysis. There are no known easements or encroachments impacting the site that are considered to affect the marketability or highest and best use. There are also no known covenants, conditions, or restrictions impacting the site that are considered to affect the marketability or highest and best use. Physically Possible The subject is adequately served by utilities, and has an adequate shape and size, sufficient access, etc., to be a separately developable site. There are no known physical reasons why the subject site would not support any legally probable development (i.e. it appears adequate for development). Existing structures on similar sites within the subject neighborhood provide additional evidence for the physical possibility of development. Financially Feasible Consideration to existing land use trends has been given in determining feasible uses. Only those uses that are physically possible and legally permissible are given further consideration. Recent development of surrounding land uses at sites similar to the subject have been a mixture of uses, primarily commercial in nature. Based on our analysis of the market, there is currently adequate demand for commercial use in the subject’s area. It appears that a newly developed commercial use on the site would have a value commensurate with its cost. Therefore, commercial use is financially feasible. DocuSign Envelope ID: 25E66FBC-2A6A-4B97-AD34-4BEF8006E1B6 Valuation Analysis – Whole Property 3.2 Maximally Productive - Conclusion Based on the information presented above and upon information contained in the market and neighborhood analysis, we conclude that the highest and best use of the subject as if vacant would be the development of a commercial use. Our analysis of the subject and its respective market characteristics indicate the most likely buyer, as if vacant, would be a developer or owner-user. AS IMPROVED As the main improvements are not impacted by the proposed project, they have been excluded from the valuation, and a highest and best use analysis as improved was not performed. DocuSign Envelope ID: 25E66FBC-2A6A-4B97-AD34-4BEF8006E1B6 Valuation Analysis – Whole Property 3.3 Appraisal Methodology In appraisal practice, an approach to value is included or omitted based on its applicability to the property type being valued and the quality and quantity of information available. Cost Approach The Cost Approach is based on the proposition that the informed purchaser would pay no more for the subject than the cost to produce a substitute property with equivalent utility. This approach is particularly applicable when the property being appraised involves relatively new improvements that represent the highest and best use of the land, or when it is improved with relatively unique or specialized improvements for which there few sales or leases of comparable properties exist. Sales Comparison Approach The Sales Comparison Approach utilizes sales of comparable properties, adjusted for differences, to indicate a value for the subject. Valuation is typically accomplished using physical units of comparison such as price per square foot, price per unit, price per floor, etc., or economic units of comparison such as gross rent multiplier. Adjustments are applied to the physical units of comparison derived from the comparable sale. The unit of comparison chosen for the subject is then used to yield a total value. Economic units of comparison are not adjusted, but rather analyzed as to relevant differences, with the final estimate derived based on the general comparisons. Income Capitalization Approach The Income Capitalization Approach reflects the subject’s income-producing capabilities. This approach is based on the assumption that value is created by the expectation of benefits to be derived in the future. Specifically estimated is the amount an investor would be willing to pay to receive an income stream plus reversion value from a property over a period of time. The two common valuation techniques associated with the income capitalization approach are direct capitalization and the discounted cash flow (DCF) analysis. DocuSign Envelope ID: 25E66FBC-2A6A-4B97-AD34-4BEF8006E1B6 Valuation Analysis – Whole Property 3.4 Methodology Applicable to the Subject • The appraiser analyzed the data gathered through the use of appropriate and accepted appraisal methodology to arrive at a probable value indication via each applicable approach to value. The sales comparison approach for land is utilized to develop an opinion of land value because market participants rely on this method. The cost approach was developed to a degree appropriate for the scope of this assignment. The subject is valued as vacant land and so the sales comparison approach for improved property is not applicable. Being valued as vacant land, the income approach for improved property is not applicable. Furthermore, surface rights in this area are not purchased based on income production. • The 'summation method' for valuation of a partial acquisition is utilized, as is required in the State of Texas. Total compensation is estimated as the value of the partial acquisition, plus damages to the remainder (which may be offset by special benefits), plus any necessary costs to cure and temporary easements if they are part of the scope of the assignment. • We searched public and private databases for sales data in the area. It is worth noting here that the fee simple interest of the subject property is appraised, and unified fee at that. This means that all interests and title are valued together. In reality, the leased fee valuation of the property may be different from the fee simple value because of the terms of existing leases. This appraisal follows the so-called unit rule which includes the valuation of all rights of any parties who may have an interest (such as tenants, life estate holders, remaindermen, leaseholders, etc.) in the subject as one. The exception is consideration of existing easement encumbrances. DocuSign Envelope ID: 25E66FBC-2A6A-4B97-AD34-4BEF8006E1B6 Form ROW-A-5 (Rev. 8/11) Page SCA-3.5 SALES COMPARISON APPROACH Whole: Part to be Acquired: Remainder After: Land: Improved: Subject Comp No. 1 Comp No. 2 Comp No. 3 Comp No. 4 Grantor Habitat for Humanity of Denton County First United Leasing Corporation DB Denton II LLC Azalea Commercial Properties, Ltd. Grantee LK Pop DFW, LLC JRJ Wood, LP ACG Texas, L.P. Westdale Properties America I, Ltd. Date of Sale Feb-22 Feb-22 Aug-20 Oct-18 Jan-18 Address 2930 W University Drive NWC of West University Drive (US-380) and Cornell Lane 3720 S. IH-35E 3200 North Interstate Highway 35 510 N I-35 E City, State Denton, TX Denton, TX Denton, TX Denton, TX Denton, TX Gross Acres 0.7177 0.7124 1.6960 1.0000 1.6900 Gross Square Feet 31,264 31,032 73,878 43,558 73,616 Actual Sale Price $915,030 $1,846,944 $1,100,000 $1,914,000 Adjusted Sale Price 1 $915,030 $1,926,944 $1,100,000 $1,914,000 Unit Price Per SF $29.49 $26.08 $25.25 $26.00 Property Rights Conveyed Financing Conditions of Sale Market Conditions (Time)5%0%7%17%21% Adjusted $/SF $29.49 $27.91 $29.54 $31.46 Location Size Shape Topography Zoning/Use Utilities Net Adjustment 0%0%0%0% Indicated Unit Value $29.49 $27.91 $29.54 $31.46 Estimated Unit Value $29.50 Estimated Value by Sales Comparison Approach ........................................................................................... $922,288 Explanation of Adjustments with Reconciliation (Attach Comparable Data Supplement and Map; use separate page, numbered accordingly, as necessary.): Please refer to the following pages. DocuSign Envelope ID: 25E66FBC-2A6A-4B97-AD34-4BEF8006E1B6 Valuation Analysis – Whole Property 3.6 LAND VALUE The following map summarizes the locations of the comparable data used in the valuation of the subject site. DocuSign Envelope ID: 25E66FBC-2A6A-4B97-AD34-4BEF8006E1B6 Form ROW-A-5S (Rev. 11/11) Page 3.7 COMPARABLE DATA SUPPLEMENT District:N/A Parcel No.:25 Highway: IH-35 Utility Relocations County: Denton ROW CSJ: N/A Land Sale 1 Improved Sale Rental Data Grantor/Lessor:Grantee/Lessee: Date:2/25/2022 Recording Information:2022-32163 Lat/Long:33.229753, -97.14771 Address:Zip Code:76201 Legal Description: Confirmed Price:$915,030 actual $915,030 effective Verified with: Rental Data:N/A Land Size Gross:0.7124 AC.31,032 Sq. Ft.Unit Price as Vacant: Type Street:Utilities: N/A N/A Unit Price as Improved: N/A N/A Current Use:Highest and Best Use: Date of Inspection: 2/25/2022 Floodplain: Zone X (Unshaded) Appraiser:March 31, 2022 (Typed, not signed)Date Habitat for Humanity of Denton County LK Pop DFW, LLC NWC of West University Drive (US-380) and Cornell Lane, Denton, TX T.J. Smith Terms and Conditions of Sale: Lot 1R2 of Minor Replat Krause Addition, Denton County, Texas This comparable represents a 0.697 acre tract of land located at the northwest corner of West University Boulevard (US-380) and Cornell Lane in Denton, Texas. It has a rectangular shape with generally level topography and is zoned SC, Suburban Corridor District. According to the contract of sale, the property sold for a reported consideration of $915,030 or $29.49 per square foot. Existing improvements on the site are a freestanding 2,000 square foot Budget/Avis Rental Car building, which is planned for demolition; thus, the existing improvements were given little to no contributory value within the purchase price. The proposed use is for the development of a freestanding Popeye's quick service restaurant. US Hwy $29.49/SF All to site Improvement(s) Description: Improvement(s) Size: (GBA / NRA) Condition and Functional Design: Budget/Avis Rental Car Popeye's Zoning: SC, Suburban Corridor District Contract Cash to Seller DocuSign Envelope ID: 25E66FBC-2A6A-4B97-AD34-4BEF8006E1B6 Form ROW-A-5S (Rev. 11/11) Page 3.8 COMPARABLE DATA SUPPLEMENT District:N/A Parcel No.:25 Highway: IH-35 Utility Relocations County: Denton ROW CSJ: N/A Land Sale 2 Improved Sale Rental Data Grantor/Lessor:Grantee/Lessee: Date:8/20/2020 Recording Information:2020-128511 Lat/Long:33.171886, -97.089522 Address:Zip Code:76210-6857 Legal Description: Confirmed Price:$1,846,944 actual $1,926,944 effective Verified with: Rental Data:N/A Land Size Gross:1.6960 AC.73,878 Sq. Ft.Unit Price as Vacant: Type Street:Utilities: N/A N/A Unit Price as Improved: N/A N/A Current Use:Highest and Best Use: Date of Inspection: 2/25/2022 Floodplain: Zone X (Unshaded) Appraiser:March 31, 2022 (Typed, not signed)Date Improvement(s) Description: Improvement(s) Size: (GBA / NRA) Condition and Functional Design: Vacant Land Commercial Development Zoning: HC - Highway Commercial This is the sale of 1.696 acres of land located at 3720 S. Interstate 35E in Denton. Prior to this sale, the site consisted of 2.243 acres, but TxDOT acquired 0.547 acre (Deed 2019-69474 - 6/13/2019) for the expansion of Interstate 35E. The sale was reported at $25.00 per square foot by the buyer who noted that they would be paying to demolish the (condemned) building. We have included $80,000 for demolition resulting in an adjusted sale price of $1,926,944. The site was purchased by the adjoining property owner to expand the Chevrolet dealership. The site is generally level, has a rectangular shape, is located outside of the 100-year floodplain and is zoned "HC - Highway Commercial" by the City of Denton. T.J. Smith Terms and Conditions of Sale: $26.08/SF IH-35 Frontage Road All to site First United Leasing Corporation JRJ Wood, LP 3720 S. IH-35E, Denton, TX Lot 1, Block 1, Denton Cancer Center Addition, addition to the City of Denton, Denton County, Texas Buyer Cash to Seller DocuSign Envelope ID: 25E66FBC-2A6A-4B97-AD34-4BEF8006E1B6 Form ROW-A-5S (Rev. 11/11) Page 3.9 COMPARABLE DATA SUPPLEMENT District:N/A Parcel No.:25 Highway: IH-35 Utility Relocations County: Denton ROW CSJ: N/A Land Sale 3 Improved Sale Rental Data Grantor/Lessor:Grantee/Lessee: Date:10/10/2018 Recording Information:2018-120336 Lat/Long:33.223429, -97.171032 Address:Zip Code:76201 Legal Description: Confirmed Price:$1,100,000 actual $1,100,000 effective Verified with: Rental Data:N/A Land Size Gross:1.0000 AC.43,558 Sq. Ft.Unit Price as Vacant: Type Street:Utilities: N/A N/A Unit Price as Improved: N/A N/A Current Use:Highest and Best Use: Date of Inspection: 2/25/2022 Floodplain: Zone X (Unshaded) Appraiser:March 31, 2022 (Typed, not signed)Date IHOP Commercial Development Zoning: RCC-D This comparable represents the acquisition of 1.00-acre located at 3200 North Interstate Highway 35 in Denton, Texas. The site has a rectangular shape with generally level topography and is situated at the northeast corner of North Interstate Highway 35 and Town Center Trail. This site is located in the western portion of the Razor Ranch Town Center, and has exposure to IH 35. The developer was responsible for constructing interior streets on the south and east sides of the site. The site was zoned RCC-D and the proposed use at the time of sale was for future development of a freestanding IHOP restaurant. T.J. Smith IH-35 Frontage Road All Available Improvement(s) Description: Improvement(s) Size: (GBA / NRA) Condition and Functional Design: Terms and Conditions of Sale: $25.25/SF DB Denton II LLC ACG Texas, L.P. 3200 North Interstate Highway 35, Denton, TX Mike Walden, Buyer Cash to Seller Lot 23R, Block A, Rayzor Ranch Town Center, City of Denton, Denton County, Texas DocuSign Envelope ID: 25E66FBC-2A6A-4B97-AD34-4BEF8006E1B6 Form ROW-A-5S (Rev. 11/11) Page 3.10 COMPARABLE DATA SUPPLEMENT District:N/A Parcel No.:25 Highway: IH-35 Utility Relocations County: Denton ROW CSJ: N/A Land Sale 4 Improved Sale Rental Data Grantor/Lessor:Grantee/Lessee: Date:1/5/2018 Recording Information:2018-2723 Lat/Long:33.196959, -97.138053 Address:Zip Code:76201 Legal Description: Confirmed Price:$1,914,000 actual $1,914,000 effective Verified with: Rental Data:N/A Land Size Gross:1.6900 AC.73,616 Sq. Ft.Unit Price as Vacant: Type Street:Utilities: N/A N/A Unit Price as Improved: N/A N/A Current Use:Highest and Best Use: Date of Inspection: 2/25/2022 Floodplain: Zone X (Unshaded) Appraiser:March 31, 2022 (Typed, not signed)Date Zoning: DC-G - Downtown Commercial General This comparable represents the sale of a tract of vacant land located at 510 N I-35E in Denton, Denton County, Texas. At the time of sale, the property was irregular in shape, zoned DC-G (Downtown Commercial General) and generally level in topography. This tract was assembled from several remainder parcels on the IH-35E project. It was purchased for the development of a McDonald's restaurant. T.J. Smith Broker Market Rate Financing Improvement(s) Description: Improvement(s) Size: (GBA / NRA) Condition and Functional Design: McDonald's restaurant Commercial Development Terms and Conditions of Sale: $26.00/SF IH-35 Frontage Road All Azalea Commercial Properties, Ltd.Westdale Properties America I, Ltd. 510 N I-35 E, Denton, TX Part of Lots 1 and 2, Sunrise Center Addition, and all of Lot 5R, Eagle Point Shopping Center Addition, City of Denton, Denton County, Texas DocuSign Envelope ID: 25E66FBC-2A6A-4B97-AD34-4BEF8006E1B6 Valuation Analysis – Whole Property 3.11 DISCUSSION OF ADJUSTMENTS Based on our comparative analysis, the following discussion summarizes the adjustments warranted to each comparable. CONDITIONS OF SALE/FINANCING/PROPERTY RIGHTS CONVEYED. All sales were indicated to be cash-to-seller transactions or financed by a third party at market terms and none appeared to occur under duress. As such, no adjustments for cash equivalency were necessary. Furthermore, the sales reflected arm’s length transactions; therefore, no adjustments for conditions of sale were warranted. The rights conveyed in the transactions are typical for this market and property type, warranting no additional adjustment. No adjustments for conditions of sale were warranted. MARKET CONDITIONS An upward adjustment was applied to each sale at a rate of generally 5% per year to reflect improving market conditions since the date of sale and the effective date of value. This is based on information in the neighborhood analysis and discussions with market participants. LOCATION Location can have a significant influence on value. The subject is located in a high- trafficked area along a primary thoroughfare, with Rayzor Ranch immediately to the south and east, including the Sam’s Club and Walmart Supercenter complex immediately adjacent. Sale 1 is located just east of the subject along the same development corridor and is considered similar. Sales 2 and 4 are located at corner locations along IH-35, which is superior to the subject; however, surrounding development is considered inferior. Overall, Sales 2 and 4 are considered similar to the subject. Sale 3 is located within Rayzor Ranch in close proximity to the subject and generally benefits from similar exposure as the site fronts on the IH-35 service road but lacks direct access from the frontage road. Additionally, the site is located between an IH-35 off-ramp to the south and an on-ramp to the north, which is considered sufficiently similar to the subject’s access. Overall, no adjustment was considered necessary for Sale 3. SIZE Typically, an inverse relationship exists between site size and unit value. All of the sales are considered sufficiently similar in size compared to the subject, and no adjustments were required. SHAPE The subject property has a rectangular shape. All of the sales are considered sufficiently similar, and no adjustments for shape were required. DocuSign Envelope ID: 25E66FBC-2A6A-4B97-AD34-4BEF8006E1B6 Valuation Analysis – Whole Property 3.12 TOPOGRAPHY The subject property has a level topography. All of the sales are considered similar, and no adjustments for topography were required. ZONING/USE All of the sales are considered to have similar use potential to the subject, and no adjustments were considered necessary. UTILITIES The subject has access to public water and sewer. All of the sales are considered similar with regard to utility access and no adjustments were required. CONCLUSION Generally equal consideration was given to all sales analyzed. The following table presents the valuation conclusion: CONCLUDED LAND VALUE $ PSF SF Unrounded Total Fee Area $29.50 x 31,264 $922,288.00 =$922,288 Compiled by CBRE DocuSign Envelope ID: 25E66FBC-2A6A-4B97-AD34-4BEF8006E1B6 Form ROW-A-5 (Rev. 8/11) Page CA-3.13 COST APPROACH Whole: Part to be Acquired: Remainder After: Estimated Replacement Cost Improvement No. of Units $ per Unit Cost New Value 0 SF $0.00 $0 $0 $0 Contributory Value of the Buildings N/A Accessory Improvements Contributory Value of the Accessory Improvements N/A Site Improvements Irrigated Landscaping 150 SF $3.50 $525 $0 $525 Sign 1 EA $9,200.00 $9,200 $1,840 20%$7,360 Light Standard 1 EA $2,800.00 $2,800 $560 20%$2,240 Contributory Value of the Site Improvements $10,125 Contributory Value of all Improvements $10,125 Fee Area $922,288 Estimated Value by the Cost Approach $932,413 < Depreciation> Furnish sources of cost data and support for depreciation factors (physical, functional, and economic. Use separate page, numbered accordingly, as necessary.) Please refer to the following pages. DocuSign Envelope ID: 25E66FBC-2A6A-4B97-AD34-4BEF8006E1B6 Valuation Analysis – Whole Property 3.14 Cost Approach – Whole In estimating the replacement cost new for the subject, local contractor estimates are utilized instead of estimates from cost manuals. A local contractor was contacted to provide cost estimates. This source was: Marathon Construction Estimating, LLC (817) 625-5999 Direct Cost Site improvements such as parking, walks, signage, landscaping, and miscellaneous other improvements are analyzed by the Unit-in-Place method based on the typical units for these items in which their costs are typically quoted. For some improvements the Segregated Cost Method is utilized for more detail and to supplement calculations by the square foot. Cost New The cost estimates for the site improvements are local and already reflective of the contractors’ overhead and profit. The following table summarizes the cost estimation performed which includes an estimated entrepreneurial profit that represents the return to the developer and is separate from contractor’s overhead and profit. Depreciated Cost Estimate To complete the analysis of the improvements and arrive at a value indication for the subject, depreciation is estimated and applied to the estimated Cost New. Depreciation is generally estimated on a straight-line basis for newer construction or by the Age-Life method for older properties, which takes into consideration ongoing maintenance and renovations. The current condition and apparent ages of the subject improvements provides the appraiser with fundamental criteria for estimating depreciation. There is no substantial functional or external obsolescence noted in the subject. Depreciation is primarily a function of the effective age and condition of the improvements. The following table summarizes the depreciated value estimates for the subject improvements. COST APPROACH SUMMARY Improvement Source/MVS Sec & Pg Reconciled Unit Cost Quantity Cost New Phys. Dep. % Total Depreciation Value Unit $ Irrigated Landscaping Contractor $3.50 150 SF $525 0%$0 $525 $3.50 Sign Contractor $9,200.00 1 EA $9,200 20%$1,840 $7,360 $7,360.00 Light Standard 66/5 $2,800.00 1 EA $2,800 20%$560 $2,240 $2,240.00 Total $10,125 Compiled by CBRE It is noted that the landscaping located within the acquisition has not been depreciated. COST APPROACH CONCLUSION The value estimate is calculated as follows. DocuSign Envelope ID: 25E66FBC-2A6A-4B97-AD34-4BEF8006E1B6 Form ROW-A-5 (Rev. 8/11) 3.15 COST APPROACH CONCLUSION - WHOLE PROPERTY Depreciated Value of Improvements $10,125 Land Value $922,288 Total Value by the Cost Approach $932,413 Compiled by CBRE DocuSign Envelope ID: 25E66FBC-2A6A-4B97-AD34-4BEF8006E1B6 Form ROW-A-5 (Rev. 8/11) Page SCA-3.16 SALES COMPARISON APPROACH Whole: Part to be Acquired: Remainder After: Land: Improved: VALUATION GRID Representative Comparable Sales Subject Comp No. 1 Comp No. 2 Comp No. 3 Grantor Grantee Date of Sale Unit Price Relative Location Financing Conditions of Sale Market Conditions Physical Characteristics Indicated Unit Value Estimated Unit Value N/A Estimated Value by Sales Comparison Approach ........................................................................................ N/A Explanation of Adjustments with Reconciliation (Attach Comparable Data Supplement and Map; use separate page, numbered accordingly, as necessary.) The sales comparison approach for improved property is not applicable in this assignment. DocuSign Envelope ID: 25E66FBC-2A6A-4B97-AD34-4BEF8006E1B6 Form ROW-A-5 (Rev. 8/11) Page IA-3.17 INCOME APPROACH Whole: Part to be Acquired: Remainder After: Potential Gross Income Vacancy Effective Gross Income Expenses Fixed Taxes Insurance Variable Management Total Expenses Net Operating Income Income Capitalized @ Plus: Value of Excess Land (if any) Estimated Value by Income Approach N/A Furnish supporting information/data, justification of gross income estimates, expenses, method of capitalization and capitalization rate (Attach Comparable Rental Data Supplement and Map. Use separate page, numbered accordingly, as necessary.): The income approach for improved property is not applicable in this assignment. DocuSign Envelope ID: 25E66FBC-2A6A-4B97-AD34-4BEF8006E1B6 Valuation Analysis – Whole Property Page 3.18 RECONCILIATION OF VALUE - WHOLE The value indications from the approaches to value are summarized as follows: SUMMARY OF VALUE CONCLUSIONS Land Value $922,288 Cost Approach $932,413 Sales Comparison Approach N/A Income Capitalization Approach N/A Compiled by CBRE The sales comparison approach for land is utilized to develop an opinion of land value because market participants rely on this method. The cost approach was developed to a degree appropriate for the scope of this assignment. The subject is valued as vacant land and so the sales comparison approach for improved property is not applicable. Being valued as vacant land, the income approach for improved property is not applicable. Furthermore, surface rights in this area are not purchased based on income production. Based on the foregoing, the market value of the subject property before the acquisition has been concluded as follows: Contributory Value of Improvements (Itemized) Irrigated Landscaping 150 SF $525 Sign 1 EA $7,360 Light Standard 1 EA $2,240 Total Contributory Value of Improvements $10,125 Contributory Land Value (Itemized) Fee Area (31,264 SF) @ $29.50 $922,288 Reconciled Final Value $932,413 DocuSign Envelope ID: 25E66FBC-2A6A-4B97-AD34-4BEF8006E1B6 Form ROW-A-5 (Rev. 8/11) Page 4.0 4 PART TO BE ACQUIRED Highest and Best Use (Use separate page, numbered accordingly, as necessary): The acquisition does not have sufficient physical characteristics to support independent development. Therefore, its highest and best use is to serve as part of the whole property. Contributory Value of Improvements (Itemized) Irrigated Landscaping 150 SF $525 Sign 1 EA $7,360 Light Standard 1 EA $2,240 Total Contributory Value of Improvements $10,125 $44,280 Total Land $44,280 TOTAL VALUE AS A UNIT $54,405 Parcel 25: 3,002 SF @ $29.50/SF x 50% REMAINDER BEFORE THE ACQUISITION Contributory Value of Improvements (Itemized) Total Contributory Value of Improvements $0 Fee Area Remaining: 28,262 @ $29.50/SF $833,729 Parcel 25: 3,002 SF @ $29.50/SF x 50%$44,279 * Total Land $878,008 TOTAL VALUE AS A UNIT $878,008 The value of the Parcel 25 is rounded down. This is done to ensure correct calculation of the Whole Property less the Part to be Acquired, relative to the Remainder. DocuSign Envelope ID: 25E66FBC-2A6A-4B97-AD34-4BEF8006E1B6 Part to be Acquired 4.1 Part to be Acquired Part to be Acquired - Aerial Subject TxDOT Parcel 24 DocuSign Envelope ID: 25E66FBC-2A6A-4B97-AD34-4BEF8006E1B6 Part to be Acquired 4.2 ACQUISITION SUMMARY Parcel ID/Number 25 Highest and Best Use of Acquisition Area The acquisition does not have sufficient physical characteristics to support independent development. Therefore, its highest and best use is to serve as part of the whole property. The proposed easement is for relocation of the City of Denton water and wastewater services along the state’s new right-of-way line after TxDOT’s acquisition of additional right-of-way for the widening of IH-35. Due to the acquisition being easement estate, only a portion of the rights within this area are being acquired. Based on the attributes of this easement, the rights within this encumbered area will be shared between the fee owner and the easement owner. Thus, we have applied an estimate of 50% of the fee value for this proposed acquisition area. VALUATION OF PARTIAL ACQUISITION - LAND Partial Acquisition Unit Value Acquired Unrounded Value (Rounded) Parcel 25 3,002 SF x $29.50 x 50% =$44,279.50 $44,280 Total $44,280 Compiled by CBRE Area As noted previously, according to the client, any impacted paving, sidewalks and curbing will be repaired or replaced by the project contractor to a similar or better condition than what exists prior to installation of utilities. It is noted that the irrigated landscaping impacted by the proposed acquisition will not be replaced by the project contractor. As such, the value of this impacted improvement has been included in our analysis, along with a cost to cure this improvement. Irrigated Landscaping Sign and Light Standard VALUATION OF PARTIAL ACQUISITION - IMPROVEMENTS Irrigated Landscaping 150 SF x $3.50 /SF $525 Sign 1 EA x $7,360.00 $7,360 Light Standard 1 EA x $2,240.00 $2,240 Total Value of Improvements in Acquisition Area $10,125 Compiled by CBRE DocuSign Envelope ID: 25E66FBC-2A6A-4B97-AD34-4BEF8006E1B6 Part to be Acquired 4.3 VALUATION OF PARTIAL ACQUISITION - TOTAL Land in Acquisition Area $44,280 Improvements in Acquisition Area $10,125 Total Acquisition Value $54,405 VALUATION OF THE REMAINDER BEFORE THE ACQUISITION The value of the remainder before the acquisition is a mathematical computation where the value of the acquisition is subtracted from the value of the whole property. The Cost, Sales Comparison, and Income Capitalization approaches are not analyzed in the appraisal of the remainder before the acquisition. The resultant value is the remainder immediately before the acquisition, as set forth in the following table; it is compared to the value of the remainder after the taking to determine potential damages or enhancements to the remainder. REMAINDER BEFORE VALUATION SUMMARY Value of Whole Property Value of Partial Acquisition Value of Remainder Before the Acquisition $932,413 -$54,405 =$878,008 DocuSign Envelope ID: 25E66FBC-2A6A-4B97-AD34-4BEF8006E1B6 Form ROW-A-5 (Rev. 8/11) Each approach developed follows this page and is sequenced as shown below. Land Value, Pg SCA-5.5 Cost Approach, Pg CA-5.6 Sales Comparison Approach, Pg SCA-5.7 Income Approach, Pg IA-5.8 Page PVS-5.0 5 PROPERTY VALUATION SUMMARY - REMAINDER Whole: Part to be Acquired: Remainder After: HIGHEST AND BEST USE ANALYSIS:(The Highest and Best Use analysis should consider the reasonably probable and legal use of vacant land or improved property considering legally permissible, physically possible, financially feasible, and maximally productive. Use a separate page, numbered accordingly, as necessary.) See analysis to follow. VALUATION APPROACHES Insert value estimate, then describe, analyze, and support each approach as required. Sales Comparison Approach (land value) ................. $ $878,008 Cost Approach ............................................................... $ N/A Sales Comparison Approach ........................................ $ N/A Income Approach .......................................................... $ N/A Reconciliation of Approaches to Value: The sales comparison approach for land is utilized to develop an opinion of land value because market participants rely on this method. The remainder is valued as vacant land so the cost approach is not applicable. The remainder is valued as vacant land and so the sales comparison approach for improved property is not applicable. Being valued as vacant land, the income approach for improved property is not applicable. Furthermore, surface rights in this area are not purchased based on income production. Contributory Value of Improvements (Itemized) Total Contributory Value of Improvements $0 Contributory Land Value (Itemized) Fee Area Remaining: 28,262 @ $29.50/SF $833,729 Parcel 25: 3,002 SF @ $29.50/SF x 50%$44,279 Reconciled Final Value $878,008 DocuSign Envelope ID: 25E66FBC-2A6A-4B97-AD34-4BEF8006E1B6 Valuation Analysis – Remainder After 5.1 DESCRIPTION AND HIGHEST AND BEST USE – REMAINDER AFTER THE ACQUISITION Remainder Aerial The remainder will be very similar to the whole property, except that it will be subject to a new permanent utility easement. The valuation of the remainder after the acquisition takes into consideration any severance damage accruing to the remainder as a result of the condemnation. Per state law, the appraiser has excluded from consideration any remainder damages Remainder Parcel 25 DocuSign Envelope ID: 25E66FBC-2A6A-4B97-AD34-4BEF8006E1B6 Valuation Analysis – Remainder After 5.2 resulting from “...diversion of traffic, inconvenience of access, impaired visibility, and temporary construction inconvenience.” The appraiser was further advised that “...injuries to a remainder that may result from factors other than the ‘effect of the acquisition’ and ‘the use to which the part taken is to be put’ or, injuries resulting from activities occurring away from the subject on lands either already owned by the State or acquired from others are non-compensable.” Additionally, “...matters that occur as a consequence of a change in the highway to a controlled access highway are ‘shared by the entire area through which it runs.’...and these are non-recoverable community damages.” “In Texas, the loss of business, circuity of travel, loss of direct access to main lanes, the introduction of center medians, etc. are considered non- compensable.”6 The intended use of the acquisition will be in conjunction with the construction of the project. The proposed project consists of the relocation of City of Denton water and wastewater utilities outside of the new IH-35 right-of-way after TxDOT’s acquisitions for the widening of that highway. The project extends from the Interstate 35 split to University (US 380). According to the client, the utility installation will include open-cut sections, and any impacted site improvements will be repaired or replaced by the project contractor to a similar or better condition than what was present before the acquisition. Because the acquisition is an easement only and does not bisect a building, no impact to the main improvements is expected. Remainder Access No change in access is expected as a result of the acquisition. Market Conformance The subject will be functional for its intended use and typical for the neighborhood after the acquisition is complete. 6 ROW Appraisal and Review Manual. TxDOT 11/2018. Pg. 5-14 DocuSign Envelope ID: 25E66FBC-2A6A-4B97-AD34-4BEF8006E1B6 Valuation Analysis – Remainder After 5.3 The following chart summarizes the salient characteristics of the remainder property. REMAINDER SUMMARY ANALYSIS - REMAINDER COMPARISON Physical Description Whole Property - Before Acquisition Remainder After the Acquisition Gross Site Area 0.7177 Acres 31,264 Sq. Ft.0.7177 Acres 31,264 Sq. Ft. New Easements 0.0689 Acres 3,002 Sq. Ft. Primary Road Frontage US-380 150 Feet US-380 150 Feet Average Depth 210 Feet 210 Feet Shape Topography Primary Traffic Counts (24 hrs.)US 380 28,805 US 380 28,805 @ IH-35 Date: 2020 @ IH-35 Date: 2020 Zoning District Legally Conforming Site Flood Zone Flood Notes Comparative Analysis Access Visibility Functional Utility Traffic Volume Adequacy of Utilities Landscaping Drainage Utilities Availability Water Yes Sewer Yes Natural Gas Yes Electricity Yes Telephone Yes Other Yes No Unknown Yes No Unknown Detrimental Easements 0 X 0 0 X 0 Encroachments 0 X 0 0 X 0 Deed Restrictions 0 X 0 0 X 0 Source: Various sources compiled by CBRE See Comments Unchanged Unchanged Unchanged Unchanged Unchanged City of Denton City of Denton Atmos Energy Oncor Electric AT&T through various providers Rating Rectangular Generally Level SC - Suburban Corridor Rating Provider Average Average Average Average Average Appears adequate Rectangular Generally Level SC - Suburban Corridor AREA OF MINIMAL FLOOD HAZARD Zone X (Unshaded) Unchanged Unchanged Unchanged Unchanged Unchanged Unchanged Average Unchanged Zone X (Unshaded) See Comments AREA OF MINIMAL FLOOD HAZARD HIGHEST AND BEST USE – REMAINDER PROPERTY AS VACANT Legally Permissible The acquisition will not affect the legal conformance of the subject to current zoning regulations. Physically Possible The remainder will be similarly suited for the legally permissible uses that were achievable in the whole property before the acquisition. There are no known physical reasons why the subject site would not support any legally probable development (i.e. it appears adequate for development). Financially Feasible Given the remainder’s size, zoning, and its surrounding development, the financially feasible for the remainder property after the acquisition is unchanged from that of the whole property. Accordingly, commercial use is considered feasible. Maximally Productive - Conclusion Based on the information presented above and upon information contained in the Area and Neighborhood analysis, the highest and best use of the remainder property after the acquisition, as if vacant, would be for commercial use. DocuSign Envelope ID: 25E66FBC-2A6A-4B97-AD34-4BEF8006E1B6 Valuation Analysis – Remainder After 5.4 AS IMPROVED As the main improvements are not impacted by the proposed acquisition, a highest and best use analysis as improved was not performed. DocuSign Envelope ID: 25E66FBC-2A6A-4B97-AD34-4BEF8006E1B6 Form ROW-A-5 (Rev. 8/11) Page SCA-5.5 SALES COMPARISON APPROACH Whole: Part to be Acquired: Remainder After: Land: Improved: Subject Comp No. 1 Comp No. 2 Comp No. 3 Comp No. 4 Grantor Habitat for Humanity of Denton County First United Leasing Corporation DB Denton II LLC Azalea Commercial Properties, Ltd. Grantee LK Pop DFW, LLC JRJ Wood, LP ACG Texas, L.P. Westdale Properties America I, Ltd. Date of Sale Feb-22 Feb-22 Aug-20 Oct-18 Jan-18 Address 2930 W University Drive NWC of West University Drive (US-380) and Cornell Lane 3720 S. IH-35E 3200 North Interstate Highway 35 510 N I-35 E City, State Denton, TX Denton, TX Denton, TX Denton, TX Denton, TX Gross Acres 0.7177 0.7124 1.6960 1.0000 1.6900 Gross Square Feet 31,264 31,032 73,878 43,558 73,616 Actual Sale Price $915,030 $1,846,944 $1,100,000 $1,914,000 Unit Price Per SF $29.49 $26.08 $25.25 $26.00 Property Rights Conveyed 0%0%0%0% Financing 0%0%0%0% Conditions of Sale 0%0%0%0% Market Conditions (Time)5%0%7%17%21% Adjusted $/SF $29.49 $27.91 $29.54 $31.46 Location 0%0%0%0% Size 0%0%0%0% Shape 0%0%0%0% Topography 0%0%0%0% Zoning/Use 0%0%0%0% Utilities 0%0%0%0% Net Adjustment 0%0%0%0% Indicated Unit Value $29.49 $27.91 $29.54 $31.46 Estimated Unit Value $29.50 Estimated Value by Sales Comparison Approach ................................................................... $878,008 Explanation of Adjustments with Reconciliation (Attach Comparable Data Supplement and Map; use separate page, numbered accordingly, as necessary.): The same sales and adjustments that were applicable in the valuation of the whole property before the acquisition are applicable in the valuation of the remainder. CONCLUDED LAND VALUE $ PSF SF Unrounded Total Fee Area Remaining $29.50 x 28,262 100%$833,729.00 =$833,729 Parcel 25 $29.50 x 3,002 x 50%$44,279.50 =$44,279 Indicated Value:$878,008 Compiled by CBRE * Parcel 25 has been rounded down in order to balance the Remainder Before with Remainder After. DocuSign Envelope ID: 25E66FBC-2A6A-4B97-AD34-4BEF8006E1B6 Form ROW-A-5 (Rev. 8/11) Page CA-5.6 COST APPROACH Whole: Part to be Acquired: Remainder After: Estimated Replacement Cost Improvement No. of Units $ per Unit Cost New Value Contributory Value of the Buildings N/A Accessory Improvements Contributory Value of the Accessory Improvements N/A Site Improvements Contributory Value of the Site Improvements N/A Contributory Value of all Improvements N/A Estimated Value by the Cost Approach N/A < Depreciation> Furnish sources of cost data and support for depreciation factors (physical, functional, and economic. Use separate page, numbered accordingly, as necessary.) The cost approach is not applicable in this assignment. DocuSign Envelope ID: 25E66FBC-2A6A-4B97-AD34-4BEF8006E1B6 Form ROW-A-5 (Rev. 8/11) Page SCA-5.7 SALES COMPARISON APPROACH Whole: Part to be Acquired: Remainder After: Land: Improved: Subject Comp No. 1 Comp No. 2 Comp No. 3 Grantor Grantee Date of Sale Unit Price Relative Location Financing Conditions of Sale Market Conditions Physical Characteristics Indicated Unit Value Estimated Unit Value N/A Estimated Value by Sales Comparison Approach .......................................................................................N/A Explanation of Adjustments with Reconciliation (Attach Comparable Data Supplement and Map; use separate page, numbered accordingly, as necessary.) The sales comparison approach for improved property is not applicable in this assignment. DocuSign Envelope ID: 25E66FBC-2A6A-4B97-AD34-4BEF8006E1B6 Form ROW-A-5 (Rev. 8/11) Page IA-5.8 INCOME APPROACH Whole: Part to be Acquired: Remainder After: Potential Gross Income Vacancy Effective Gross Income Expenses Fixed Taxes Insurance Variable Management Total Expenses Net Operating Income Income Capitalized @ Plus: Value of Excess Land (if any) Estimated Value by Income Approach N/A Furnish supporting information/data, justification of gross income estimates, expenses, method of capitalization and capitalization rate (Attach Comparable Rental Data Supplement and Map. Use separate page, numbered accordingly, as necessary.): The income approach is not applicable in this assignment. DocuSign Envelope ID: 25E66FBC-2A6A-4B97-AD34-4BEF8006E1B6 Valuation Analysis – Remainder After Page IA-5.9 RECONCILIATION OF VALUE – REMAINDER AFTER The value of the remainder after the acquisition is based on a new site analysis, improvement analysis, and highest and best use analysis. Reference to the value of the Remainder Before is made only with reference to calculation of any remainder impact, not determination of the value of the remainder after the acquisition. The value indications from the approaches to value are summarized as follows: SUMMARY OF VALUE CONCLUSIONS Land Value $878,008 Cost Approach N/A Sales Comparison Approach N/A Income Capitalization Approach N/A Compiled by CBRE As in the valuation of the whole property before the acquisition, each approach was given consideration based upon its applicability to the valuation of the remainder after the acquisition. The sales comparison approach for land is utilized to develop an opinion of land value because market participants rely on this method. The remainder is valued as vacant land so the cost approach is not applicable. The remainder is valued as vacant land and so the sales comparison approach for improved property is not applicable. Being valued as vacant land, the income approach for improved property is not applicable. Furthermore, surface rights in this area are not purchased based on income production. A summary of the appraised value is shown on the following page. DocuSign Envelope ID: 25E66FBC-2A6A-4B97-AD34-4BEF8006E1B6 Form ROW-A-5 (Rev. 8/11) 6.0 EXPLANATION OF DAMAGES (if any): No permanent damages are anticipated to the remainder. Some curative measures will be required to restore the remainder and are discussed on the following pages. 6 COMPENSATION SUMMARY WHOLE PROPERTY: The market value of the whole property is………………………………………………………………………...…………$932,413 PART TO BE ACQUIRED: Considered as severed land, the fee simple title to the part being acquired for highway purposes (less oil, gas and sulphur and subject to existing easements, if any, which are not to be extinguished) is…………………………………………………………………………………………$54,405 REMAINING PROPERTY The value of the remainder immediately before the taking is…………………………………………………………………$878,008 Considering the uses to which the part taken is to be subjected, the market value of the remainder immediately after the acquisition is……………………………………………………………………………………………………………………….$878,008 NET DAMAGES OR ENHANCEMENTS, if any………………………………………………………………….………………………………$0 ACCESS: The lack of any access or the material impairment of direct access on or off the remaining property affects the market value of the remaining property in the sum of……………………………..………...………………..…….……………………….$0 COST TO CURE:$8,165 TOTAL COMPENSATION:$62,570 DocuSign Envelope ID: 25E66FBC-2A6A-4B97-AD34-4BEF8006E1B6 Cost to Cure 6.1 COST TO CURE In order for the property to function as optimally as before the acquisition in the remainder condition, it is necessary to cap the irrigation system and reconfigure the irrigation zone affected by the acquisition. Additionally, the pylon sign and light standard should be replaced. The cost to cure these improvements is based on costs from local contractor estimates. In order to avoid double compensation, the contributory value of the improvements in the part acquired is deducted from the replacement cost new (RCN) to result in the appropriate cost to cure. A 10% contingency cost is added to the cost to cure subtotal to reflect contractor price changes and/or overruns. The calculation of the cost to cure is given below: COST TO CURE Improvement # Units Cost per Unit RCN (Rounded)Compensation Paid Net Cost Due Sign 1 EA $9,200.00 $9,200 ($7,360)$1,840 Light Standard 1 EA $2,800.00 $2,800 ($2,240)$560 Cap Irrigation System 2 EA $575.00 $1,150 $1,150 Reconfigure Irrigation Zone 2 EA $1,500.00 $3,000 $3,000 Subtotal $16,150 $6,550 Contingency 10%$1,615 Total Cost to Cure $8,165 Compiled by CBRE DocuSign Envelope ID: 25E66FBC-2A6A-4B97-AD34-4BEF8006E1B6 Assumptions and Limiting Conditions 6.2 ASSUMPTIONS AND LIMITING CONDITIONS 1.CBRE, Inc. through its appraiser (collectively, “CBRE”) has inspected through reasonable observation the subject property. However, it is not possible or reasonably practicable to personally inspect conditions beneath the soil and the entire interior and exterior of the improvements on the subject property. Therefore, no representation is made as to such matters. 2.The report, including its conclusions and any portion of such report (the “Report”), is as of the date set forth in the letter of transmittal and based upon the information, market, economic, and property conditions and projected levels of operation existing as of such date. The dollar amount of any conclusion as to value in the Report is based upon the purchasing power of the U.S. Dollar on such date. The Report is subject to change as a result of fluctuations in any of the foregoing. CBRE has no obligation to revise the Report to reflect any such fluctuations or other events or conditions which occur subsequent to such date. 3.Unless otherwise expressly noted in the Report, CBRE has assumed that: (i)Title to the subject property is clear and marketable and that there are no recorded or unrecorded matters or exceptions to title that would adversely affect marketability or value. CBRE has not examined title records (including without limitation liens, encumbrances, easements, deed restrictions, and other conditions that may affect the title or use of the subject property) and makes no representations regarding title or its limitations on the use of the subject property. Insurance against financial loss that may arise out of defects in title should be sought from a qualified title insurance company. (ii)Existing improvements on the subject property conform to applicable local, state, and federal building codes and ordinances, are structurally sound and seismically safe, and have been built and repaired in a workmanlike manner according to standard practices; all building systems (mechanical/electrical, HVAC, elevator, plumbing, etc.) are in good working order with no major deferred maintenance or repair required; and the roof and exterior are in good condition and free from intrusion by the elements. CBRE has not retained independent structural, mechanical, electrical, or civil engineers in connection with this appraisal and, therefore, makes no representations relative to the condition of improvements. CBRE appraisers are not engineers and are not qualified to judge matters of an engineering nature, and furthermore structural problems or building system problems may not be visible. It is expressly assumed that any purchaser would, as a precondition to closing a sale, obtain a satisfactory engineering report relative to the structural integrity of the property and the integrity of building systems. (iii)Any proposed improvements, on or off-site, as well as any alterations or repairs considered will be completed in a workmanlike manner according to standard practices. (iv)Hazardous materials are not present on the subject property. CBRE is not qualified to detect such substances. The presence of substances such as asbestos, urea formaldehyde foam insulation, contaminated groundwater, mold, or other potentially hazardous materials may affect the value of the property. (v)No mineral deposit or subsurface rights of value exist with respect to the subject property, whether gas, liquid, or solid, and no air or development rights of value may be transferred. CBRE has not considered any rights associated with extraction or exploration of any resources, unless otherwise expressly noted in the Report. (vi)There are no contemplated public initiatives, governmental development controls, rent controls, or changes in the present zoning ordinances or regulations governing use, density, or shape that would significantly affect the value of the subject property. (vii)All required licenses, certificates of occupancy, consents, or other legislative or administrative authority from any local, state, nor national government or private entity or organization have been or can be readily obtained or renewed for any use on which the Report is based. (viii)The subject property is managed and operated in a prudent and competent manner, neither inefficiently or super-efficiently. (ix)The subject property and its use, management, and operation are in full compliance with all applicable federal, state, and local regulations, laws, and restrictions, including without limitation environmental laws, seismic hazards, flight patterns, decibel levels/noise envelopes, fire hazards, hillside ordinances, density, allowable uses, building codes, permits, and licenses. DocuSign Envelope ID: 25E66FBC-2A6A-4B97-AD34-4BEF8006E1B6 Assumptions and Limiting Conditions 6.3 (x)The subject property is in full compliance with the Americans with Disabilities Act (ADA). CBRE is not qualified to assess the subject property’s compliance with the ADA, notwithstanding any discussion of possible readily achievable barrier removal construction items in the Report. (xi)All information regarding the areas and dimensions of the subject property furnished to CBRE are correct, and no encroachments exist. CBRE has neither undertaken any survey of the boundaries of the subject property nor reviewed or confirmed the accuracy of any legal description of the subject property. Unless otherwise expressly noted in the Report, no issues regarding the foregoing were brought to CBRE’s attention, and CBRE has no knowledge of any such facts affecting the subject property. If any information inconsistent with any of the foregoing assumptions is discovered, such information could have a substantial negative impact on the Report. Accordingly, if any such information is subsequently made known to CBRE, CBRE reserves the right to amend the Report, which may include the conclusions of the Report. CBRE assumes no responsibility for any conditions regarding the foregoing, or for any expertise or knowledge required to discover them. Any user of the Report is urged to retain an expert in the applicable field(s) for information regarding such conditions. 4.CBRE has assumed that all documents, data and information furnished by or behalf of the client, property owner, or owner’s representative are accurate and correct, unless otherwise expressly noted in the Report. Such data and information include, without limitation, numerical street addresses, lot and block numbers, Assessor’s Parcel Numbers, land dimensions, square footage area of the land, dimensions of the improvements, gross building areas, net rentable areas, usable areas, unit count, room count, rent schedules, income data, historical operating expenses, budgets, and related data. Any error in any of the above could have a substantial impact on the Report. Accordingly, if any such errors are subsequently made known to CBRE, CBRE reserves the right to amend the Report, which may include the conclusions of the Report. The client and intended user should carefully review all assumptions, data, relevant calculations, and conclusions of the Report and should immediately notify CBRE of any questions or errors within 30 days after the date of delivery of the Report. 5.CBRE assumes no responsibility (including any obligation to procure the same) for any documents, data or information not provided to CBRE, including without limitation any termite inspection, survey or occupancy permit. 6.All furnishings, equipment and business operations have been disregarded with only real property being considered in the Report, except as otherwise expressly stated and typically considered part of real property. 7.Any cash flows included in the analysis are forecasts of estimated future operating characteristics based upon the information and assumptions contained within the Report. Any projections of income, expenses and economic conditions utilized in the Report, including such cash flows, should be considered as only estimates of the expectations of future income and expenses as of the date of the Report and not predictions of the future. Actual results are affected by a number of factors outside the control of CBRE, including without limitation fluctuating economic, market, and property conditions. Actual results may ultimately differ from these projections, and CBRE does not warrant any such projections. 8.The Report contains professional opinions and is expressly not intended to serve as any warranty, assurance or guarantee of any particular value of the subject property. Other appraisers may reach different conclusions as to the value of the subject property. Furthermore, market value is highly related to exposure time, promotion effort, terms, motivation, and conclusions surrounding the offering of the subject property. The Report is for the sole purpose of providing the intended user with CBRE’s independent professional opinion of the value of the subject property as of the date of the Report. Accordingly, CBRE shall not be liable for any losses that arise from any investment or lending decisions based upon the Report that the client, intended user, or any buyer, seller, investor, or lending institution may undertake related to the subject property, and CBRE has not been compensated to assume any of these risks. Nothing contained in the Report shall be construed as any direct or indirect recommendation of CBRE to buy, sell, hold, or finance the subject property. 9.No opinion is expressed on matters which may require legal expertise or specialized investigation or knowledge beyond that customarily employed by real estate appraisers. Any user of the Report is advised to retain experts in areas that fall outside the scope of the real estate appraisal profession for such matters. DocuSign Envelope ID: 25E66FBC-2A6A-4B97-AD34-4BEF8006E1B6 Assumptions and Limiting Conditions 6.4 10.CBRE assumes no responsibility for any costs or consequences arising due to the need, or the lack of need, for flood hazard insurance. An agent for the Federal Flood Insurance Program should be contacted to determine the actual need for Flood Hazard Insurance. 11.Acceptance or use of the Report constitutes full acceptance of these Assumptions and Limiting Conditions and any special assumptions set forth in the Report. It is the responsibility of the user of the Report to read in full, comprehend and thus become aware of all such assumptions and limiting conditions. CBRE assumes no responsibility for any situation arising out of the user’s failure to become familiar with and understand the same. 12.The Report applies to the property as a whole only, and any pro ration or division of the title into fractional interests will invalidate such conclusions, unless the Report expressly assumes such pro ration or division of interests. 13.The allocations of the total value estimate in the Report between land and improvements apply only to the existing use of the subject property. The allocations of values for each of the land and improvements are not intended to be used with any other property or appraisal and are not valid for any such use. 14.The maps, plats, sketches, graphs, photographs, and exhibits included in this Report are for illustration purposes only and shall be utilized only to assist in visualizing matters discussed in the Report. No such items shall be removed, reproduced, or used apart from the Report. 15.The Report shall not be duplicated or provided to any unintended users in whole or in part without the written consent of CBRE, which consent CBRE may withhold in its sole discretion. Exempt from this restriction is duplication for the internal use of the intended user and its attorneys, accountants, or advisors for the sole benefit of the intended user. Also exempt from this restriction is transmission of the Report pursuant to any requirement of any court, governmental authority, or regulatory agency having jurisdiction over the intended user, provided that the Report and its contents shall not be published, in whole or in part, in any public document without the written consent of CBRE, which consent CBRE may withhold in its sole discretion. Finally, the Report shall not be made available to the public or otherwise used in any offering of the property or any security, as defined by applicable law. Any unintended user who may possess the Report is advised that it shall not rely upon the Report or its conclusions and that it should rely on its own appraisers, advisors and other consultants for any decision in connection with the subject property. CBRE shall have no liability or responsibility to any such unintended user. 16.CBRE, Inc. is not qualified to detect the existence of any potentially hazardous materials such as lead paint, asbestos, urea formaldehyde foam insulation, or other potentially hazardous construction materials on or in the land or improvements. The existence of such substances may affect the value of the property. For the purpose of this assignment, we have assumed there are no hazardous materials that would cause a loss in value to the subject. 17.A soils analysis for the site has not been provided for the preparation of this appraisal. In the absence of a soils report, it is a specific assumption that the site has adequate soils to support the highest and best use. DocuSign Envelope ID: 25E66FBC-2A6A-4B97-AD34-4BEF8006E1B6 Addenda 7.0 7 ADDENDA DocuSign Envelope ID: 25E66FBC-2A6A-4B97-AD34-4BEF8006E1B6 Addenda Addendum A PROJECT INFORMATION DocuSign Envelope ID: 25E66FBC-2A6A-4B97-AD34-4BEF8006E1B6 DocuSign Envelope ID: 25E66FBC-2A6A-4B97-AD34-4BEF8006E1B6 DocuSign Envelope ID: 25E66FBC-2A6A-4B97-AD34-4BEF8006E1B6 Addenda Addendum B SUBJECT INFORMATION DocuSign Envelope ID: 25E66FBC-2A6A-4B97-AD34-4BEF8006E1B6 1/18/22, 12:32 PM Denton CAD - Property Details https://propaccess.trueautomation.com/clientdb/Property.aspx?cid=19&prop_id=188305 1/2 Denton CAD Tax Year: 2021Property Search Results > 188305 GOLDEN ARCH LTD P/S for Year 2021 Property Account Property ID:188305 Legal Descrip on:MOORE ADDN BLK 1 LOT 1 OLD DCAD A43 TR24B Geographic ID:SD0904A- -0000 Zoning:Retail Fast Food Type:Real Agent Code:180 Property Use Code:RE040 Property Use Descrip on:FAST FOOD Loca on Address:2930 W UNIVERSITY DR DENTON, TX 76201-1632 Mapsco: Neighborhood:FAST FOOD DENTON Map ID: Neighborhood CD:RE40S05 Owner Name:GOLDEN ARCH LTD P/S Owner ID:311596 Mailing Address:PO Box 182571 Columbus, OH 43218-2571 % Ownership:100.0000000000% Exemp ons: Values (+) Improvement Homesite Value:+$0 (+) Improvement Non-Homesite Value:+$662,753 (+) Land Homesite Value:+$0 (+) Land Non-Homesite Value:+$870,100 Ag / Timber Use Value (+) Agricultural Market Valua on:+$0 $0 (+) Timber Market Valua on:+$0 $0 -------------------------- (=) Market Value:=$1,532,853 (–) Ag or Timber Use Value Reduc on:–$0 -------------------------- (=) Appraised Value:=$1,532,853 (–) HS Cap:–$0 -------------------------- (=) Assessed Value:=$1,532,853 Taxing Jurisdic on Owner:GOLDEN ARCH LTD P/S % Ownership:100.0000000000% Total Value:$1,532,853 En ty Descrip on Tax Rate Appraised Value Taxable Value Es mated Tax C05 DENTON CITY OF 0.565823 $1,532,853 $1,532,853 $8,673.23 CAD DENTON CENTRAL APPRAISAL DISTRICT 0.000000 $1,532,853 $1,532,853 $0.00 DocuSign Envelope ID: 25E66FBC-2A6A-4B97-AD34-4BEF8006E1B6 1/18/22, 12:32 PM Denton CAD - Property Details https://propaccess.trueautomation.com/clientdb/Property.aspx?cid=19&prop_id=188305 2/2 G01 DENTON COUNTY 0.233086 $1,532,853 $1,532,853 $3,572.86 S05 DENTON ISD 1.362000 $1,532,853 $1,532,853 $20,877.45 Total Tax Rate:2.160909 Taxes w/Current Exemp ons:$33,123.54 Taxes w/o Exemp ons:$33,123.54 Improvement / Building Improvement#1:Commercial StateCode:F1 LivingArea:3523.0 sq Value:$628,183 Type Descrip on ClassCD Exterior Wall YearBuilt SQFT MA MAIN AREA 360 Stone 1996 2707.0 MAAA ATTACHED ADDITION 360 1996 816.0 Improvement#2:Commercial StateCode:F1 LivingArea:sq Value:$34,570 Type Descrip on ClassCD Exterior Wall YearBuilt SQFT PV PAVING CON 1996 24628.0 Land #Type Descrip on Acres Sq Eff Front Eff Depth Market Value Prod. Value 1 6 COMMERCIAL 0.7990 34804.00 34804.00 1.00 $870,100 $0 Roll Value History Year Improvements Land Market Ag Valua on Appraised HS Cap Assessed 2022 N/A N/A N/A N/A N/A N/A 2021 $662,753 $870,100 0 1,532,853 $0 $1,532,853 2020 $662,753 $870,100 0 1,532,853 $0 $1,532,853 2019 $627,175 $870,100 0 1,497,275 $0 $1,497,275 2018 $668,778 $626,472 0 1,295,250 $0 $1,295,250 2017 $648,454 $626,472 0 1,274,926 $0 $1,274,926 2016 $588,528 $626,472 0 1,215,000 $0 $1,215,000 2015 $553,128 $626,472 0 1,179,600 $0 $1,179,600 2014 $553,128 $626,472 0 1,179,600 $0 $1,179,600 2013 $395,198 $626,472 0 1,021,670 $0 $1,021,670 2012 $227,542 $626,472 0 854,014 $0 $854,014 2011 $401,562 $522,060 0 923,622 $0 $923,622 2010 $401,562 $522,060 0 923,622 $0 $923,622 2009 $408,755 $522,060 0 930,815 $0 $930,815 2008 $399,381 $522,060 0 921,441 $0 $921,441 Deed History - (Last 3 Deed Transac ons) #Deed Date Type Descrip on Grantor Grantee Volume Page Deed Number 1 11/7/1996 SW SPECIAL WD MOORE INV CO TR GOLDEN ARCH LTD P/S 96-0079826 Ques ons Please Call (940) 349-3800 Website version: 1.2.2.33 Database last updated on: 1/13/2022 10:56 PM © N. Harris Computer Corpora on DocuSign Envelope ID: 25E66FBC-2A6A-4B97-AD34-4BEF8006E1B6 Addenda Addendum C QUALIFICATIONS DocuSign Envelope ID: 25E66FBC-2A6A-4B97-AD34-4BEF8006E1B6 T.J. Smith Vice President, Fort Worth ̶̶̶̶̶̶̶̶̶̶̶̶̶̶̶ Experience ̶̶̶̶̶̶̶̶̶̶̶̶̶̶̶ T.J. Smith leads a team of appraisers in the Fort Worth office of CBRE Valuation and Advisory services, where he serves as Vice President. Mr. Smith trains appraisers, manages projects, and coordinates communication among projects. At CBRE, he has been named a Top Producer and was part of Team of the Year for the South Central Region. Prior to joining CBRE, Mr. Smith was an appraiser at JLL Valuation and Advisory services and was Senior Analyst with Integra Realty Resources – DFW for over a decade. During his tenure, he has assisted in valuation and consulting services on various property types. His appraisal experience includes numerous valuations for financial underwriting, eminent domain assignments, right-of- way abandonments, impact studies, market studies, corridor valuations, easement valuations, land swaps, diminution in value, and assistance in jury trials. His experience in appraisal includes projects for the Texas Department of Transportation (TxDOT), various local municipalities, Trinity River Authority (TRA), ONCOR, Tarrant Regional Water District, and various other pipeline and electrical transmission line companies. Mr. Smith is involved with IRWA Chapter 36 where he served as website chair for several years (Website of the Year) and the chair of the Young Professionals Committee. ̶̶̶̶̶̶ Professional Affiliations / Accreditations ̶̶̶̶̶̶ • Certified General Real Estate Appraiser: State of Texas No. TX1380471-G • Practicing Affiliate – Appraisal Institute • Member - International Right of Way Association • Awarded Department of Transportation Professional Real Estate Appraisal Services (PREAS) contract, State of Texas ̶̶̶̶̶̶̶̶̶̶̶̶̶̶̶̶ Education ̶̶̶̶̶̶̶̶̶̶̶̶̶̶̶̶ • University of Texas at Arlington, Master of Science in Interdisciplinary Studies – Sustainability 2012. Focus on business sustainability and the three pillars of economic viability, social responsibility, and environmental impact. • Texas A&M University, Master of Land Economics & Real Estate 2006. The focus of the program is real estate finance and evaluation of development feasibility, including the following: o Statistics in Economics o Real Property Analysis o Real Property Finance o Real Property Valuation o Commercial Real Estate Law o Project Management o Land Development • Texas A&M University, BA Economics 2005 • Appraisal Institute education includes Valuation of Green Commercial Buildings, Residential and Commercial Valuation of Solar, Analyzing Operating Expenses, and USPAP, among others. • International Right of Way Association courses include: The Valuation of Partial Acquisitions, Ethics, Property Descriptions, and The Valuation of Easements, among others. T 817.569.6136 M 469.337.4413 tj.smith@cbre.com 301 Commerce Street Suite 3131 Fort Worth, TX 76102 DocuSign Envelope ID: 25E66FBC-2A6A-4B97-AD34-4BEF8006E1B6 Form ROW-A-10 (Rev. 09/16) Page 1 of 10 22.250 Review, Parcel 090-25, IH-35 Utility Relocation, Denton, Texas TABULATION OF VALUES Parcel: 090-25 Highway: IH-35 Utility Relocation ROW CSJ: N/A Taking Type: Partial District: N/A Size of Remainder: 31,264 SF (0.7177 Acres) County: Denton Type of Property: McDonald’s Restaurant Federal Project: N/A Contract Fencing: N/A Appraised by: TJ Smith Date Appraised: February 16, 2022 Access will be provided or denied to the new facility. If access will be partially provided or denied, explain in comments. Agency Participating Percentage Expense Description N/A N/A N/A Interest Owner Acquisition Interest Land Area Value Lease (Y/N) Golden Arch Limited Partnership Easement 3,002 SF $44,280.00 N TOTAL $44,280.00 N I. Appraised Values Land Value Improvement Value Sign Value Damages/Enhancements Total Value $44,280.00 $10,125.00 $0.00 $8,165.00 $62,570.00 II. Improvements Item No. Improvement Type Type Construction Improvement Value Retention Value Bisection Category A Landscaping 150 SF – Irrigated Sod $525.00 $1.00 B Signage 1 – Small Sign $7,360.00 $74.00 C Lighting 1 Light Standard $2,240.00 $23.00 Total $10,125.00 $98.00 DocuSign Envelope ID: 25E66FBC-2A6A-4B97-AD34-4BEF8006E1B6 Form ROW-A-10 (Rev. 09/16) Page 2 of 10 22.250 Review, Parcel 090-25, IH-35 Utility Relocation, Denton, Texas TABULATION OF VALUES (continued) Parcel: 090-25 Highway: IH-35 Utility Relocation ROW CSJ: N/A III. Damages and Enhancements Total Non-Exempt Damages Enhancements Exempt Damages Net Damages $0.00 $0.00 $8,165.00 $8,165.00 IV. Sign Values Item No. Sign Owner Type Construction Improvement Value Retention Value Bisect. Cat. N/A Total V. Recapitulation Date: February 16, 2022 Recommended Value Appraiser’s Name: TJ Smith Value of Whole Property $932,413.00 Parcel Area: Square Feet 3,002 VALUE FOR PARCEL $0.00 $0.00 Land: Per Square Foot – Fee Simple $29.50 Land: Per Square Foot – Easement $14.75 Easement $44,280.00 $44,280.00 Improvements $10,125.00 $10,125.00 Net Damages or (Enhancements) $8,165.00 $8,165.00 OAS Value(s) TOTAL COMPENSATION $62,570.00 $62,570.00 Calculations for Net Damages or (Enhancements) considers Direct Access Denial damages. DocuSign Envelope ID: 25E66FBC-2A6A-4B97-AD34-4BEF8006E1B6 Form ROW-A-10 (Rev. 09/16) Page 3 of 10 22.250 Review, Parcel 090-25, IH-35 Utility Relocation, Denton, Texas TABULATION OF VALUES (continued) Parcel: 090-25 Highway: IH-35 Utility Relocation ROW CSJ: N/A VI. Comments and Conclusions on Values in the Appraisal Report Project: The proposed project is for the relocation of water, wastewater, and electric lines owned by the City of Denton. The project is a result of the new right-of-way line after acquisitions by the Texas Department of Transportation for the IH- 35 roadway project. The City of Denton indicates that installation of the new utility lines will be by open cut sections and any site improvements affected will be restored to similar or better than what was present before. The project will extend from Post Oak Drive to Loop 288. The appraisal under review considers an easement acquisition represented as Parcel 090-25 of the IH-35 Utility Relocation in the City of Denton, Denton County, Texas. The appraisal report is prepared by Mr. TJ Smith, dated March 31, 2022, and is effective as of February 16, 2022 (the date of the last inspection). For purposes of this analysis, the whole property is a 0.7177-acre, or 31,264 square foot tract of land improved with a sit down restaurant (McDonald’s) and supporting site improvements. The appraiser states the improvements are not affected by the acquisition and only the land and affected site improvements will be valued in this analysis. The land is valued via the sales comparison approach. The cost approach is utilized to value the affected site improvements which includes irrigated sod, small sign, and light standard. The sales comparison approach, and income approach to value, with respect to improved properties, are not applicable and are omitted. The appraiser uses the subject land size as stated by the survey provided by the client and other information. The area of the proposed easement acquisition is stated in the parcel survey and field notes. The appraiser has calculated the remainder land area by subtracting the easement acquisition from the whole property size. Location and Property Owner: The property is located along the northern line of University Drive (US-380), just east of IH-35, Denton, Denton County, Texas. The physical address of the site is 2930 West University Drive. Ownership is stated as Golden Arch Limited Partnership. The most recent property transfer was on November 6, 1996. Purchase price is unknown. The property is not currently listed for sale or under contract. Mr. Smith sent a certified letter to the property owner discussing the project and requesting a site visit. The return receipt was received. The landowner did not contact the appraiser and was not present for the site inspection. The property was inspected from the public right-of-way and subject property. Whole Property and Highest and Best Use: The subject parcel is generally rectangular shaped, containing 0.7177 acres, or 31,264 square feet. The site has approximately 150 linear feet of frontage along University Drive. Access is available along University Drive. The property is appraised as vacant land. The subject resides in the City of Denton and is zoned “SC”, Suburban Corridor. All utilities are available to service the property and the site is free of flood land. The subject and market area are examined with respect to the four tests of highest and best use. The appraiser states the highest and best use, as vacant, is for commercial development. Valuation (Land Only): The market area is analyzed for trends and information that affect real estate value, and the conclusions thereof are adequately supported. The land is valued via the sales comparison approach, using four comparable sales in the market area. The sales transacted between January 2018 and February 2022. Adjustments are supported by the appraiser’s reasoning and logic with respect to the market data and analysis presented. After applicable adjustments for market conditions, the sale prices range from $27.91 to $31.46 per square foot. The reconciled unit value for the subject land is concluded at $29.50 per square foot. This equates to $922,288 for the subject land in the whole property condition, as detailed below. Subject Land – 31,264 SF x $29.50/SF = $922,288 The cost approach is developed to value the site improvements affected by the acquisition. The appraiser states there is 150 square feet of irrigated sod, one small sign, and one light standard with a contributory value of $10,125. By combining the land value of $922,288 and $10,125 for affected site improvements, Mr. Smith estimates the whole property value to be $932,413. Continued, on next page DocuSign Envelope ID: 25E66FBC-2A6A-4B97-AD34-4BEF8006E1B6 Form ROW-A-10 (Rev. 09/16) Page 4 of 10 22.250 Review, Parcel 090-25, IH-35 Utility Relocation, Denton, Texas TABULATION OF VALUES (continued) Parcel: 090-25 Highway: IH-35 Utility Relocation ROW CSJ: N/A VI. Comments and Conclusions on Values in the Appraisal Report Partial Acquisition: The easement acquisition contains 3,002 square feet, is generally rectangular shaped, and located along the southern line of the site at a depth of 20 feet. Length of the acquisitions along University Drive is approximately 150 feet. The easement acquisition is for relocation of utilities. The appraiser estimates the value of the easement area to be 50% of fee simple, or 50% of $29.50 per square foot. This equates to $14.75 per square foot for the easement area. The appraiser states that 50% is used because the amount of rights being acquired, and the joint use the easement area will have in the remainder. The unit value of $14.75 per square foot is applied to the 3,002 square feet of land within the easement acquisition parcels. The result is a value of $44,280 as detailed below. 3,002 SF x $14.75/SF = $44,280 (rounded up) In addition to the land, there is 150 square feet of irrigated sod, one small sign, and one light standard with a contributory value of $10,125. Total estimated value for the part acquired is $54,405, consisting of $44,280 for the land, and $10,125 for the affected site improvements. Remainder Property (Land Only): The remainder before the acquisition is $878,008, as detailed below. Easement Land 3,002 SF x $14.75 per square foot = $ 44,279 (rounded down) Remainder Land 28,262 SF x $29.50 per square foot = $833,729 Remainder Before 31,264 SF $878,008 The remainder after property of 31,264 square feet is appraised using the same four comparable sales as in the whole property valuation. The value conclusion is unchanged at $29.50 per square foot. This equates to $878,008 for the subject land in the remainder after as detailed below. Easement Land 3,002 SF x $14.75 per square foot = $ 44,279 (rounded down) Remainder Land 28,262 SF x $29.50 per square foot = $833,729 Remainder After 31,264 SF $878,008 The value of the remainder after is $878,008, the same as the remainder before value. The highest and best use of the subject property is not changed or affected. The appraiser finds no permanent damages to the remainder property because of the acquisition. Total Compensation: Page 6.0 summarizes the total compensation due the property owner as $62,570, comprised of $54,405 for the part acquired, and $8,165 as a cost-to-cure. Cost-To-Cure: In the remainder after, the sign and light standard will need to be reinstalled and the irrigation system will need to be capped and rerouted. The appraiser indicates the cost to be $16,150. After deducting what was paid in the part acquired for each site improvement and adding a 10% contingency cost of cost new, the total cost-to-cure is $8,165. The appraiser has considered access damages in accordance with Section 21.042(d) of the Texas Property Code, as amended by SB18 of the Texas 82nd Regular Legislative Session and finds as follows: 1. Is there a denial of direct access on this parcel? No 2. If so, is the denial of direct access material? N/A 3. The lack of any access denial or the material impairment of direct access on or off the remaining property affects the market value of the remaining property in the sum of $0.00. DocuSign Envelope ID: 25E66FBC-2A6A-4B97-AD34-4BEF8006E1B6 Form ROW-A-10 (Rev. 09/16) Page 5 of 10 22.250 Review, Parcel 090-25, IH-35 Utility Relocation, Denton, Texas TABULATION OF VALUES (continued) Parcel: 090-25 Highway: IH-35 Utility Relocation ROW CSJ: N/A VI. Comments and Conclusions on Values in the Appraisal Report Mr. Smith’s appraisal report appears to comply with the requirements of Standards Rule 2-2(a) of the Uniform Standards of Professional Appraisal Practice (USPAP). Sufficient information, photographs, maps, and exhibits are included to identify and describe the whole property, the acquisition area, the remainder property, and the comparable data. The report and analysis appear to properly document and supports his findings and comply with typical appraisal practice for similar properties. The report and analysis meet the requirements set forth in USPAP and the Texas Department of Transportation’s ROW Appraisal and Review Manual. Mr. Smith’s total compensation of $62,570 is hereby recommended for approval for acquisition purposes by the client. DocuSign Envelope ID: 25E66FBC-2A6A-4B97-AD34-4BEF8006E1B6 Form ROW-A-10 (Rev. 09/16) Page 6 of 10 22.250 Review, Parcel 090-25, IH-35 Utility Relocation, Denton, Texas TABULATION OF VALUES (continued) Parcel: 090-25 Highway: IH-35 Utility Relocation ROW CSJ: N/A VII. Justification and Explanation for Credit if Retained. The small sign and light standard are considered to have a salvageable value of 1%. The irrigated sod is not considered to have a salvageable value and is given a nominal value of $1.00. VIII. Conditions Values for signs, if any, are applicable only if sign owner has compensable interest. Fencing is applicable only to actual cost or lump sum fencing on 90-10 Right of Way projects and State cost participation in fences to be in accordance with State’s Right of Way Manual. The values indicated hereon have been approved on the basis that all improvements within the taking will be acquired in the name of the State through negotiation. IX. Reviewing Appraisers’ Statements Reviewing Appraiser’s Statement It is my opinion that the appraiser’s report for this parcel appears adequately supported and in compliance with all appropriate appraisal standards, laws, and regulations, and I recommend this appraisal for use by the appropriate Agency Official and his/her assigns. I have no direct or indirect present or contemplated future personal interest in such property or in any benefit from the acquisition of the parcel. To the best of my knowledge, the value does not include any items that are not compensable under State law. Reviewing Appraiser Date March 31, 2022 Tommy Matthews Date Contract Reviewing Appraiser (if applicable) Division Reviewing Appraiser (if applicable) Date X. Approval of Values County/City Representative Date ROW Staff Representative Date DocuSign Envelope ID: 25E66FBC-2A6A-4B97-AD34-4BEF8006E1B6 Form ROW-A-10 (Rev. 09/16) Page 7 of 10 22.250 Review, Parcel 090-25, IH-35 Utility Relocation, Denton, Texas APPRAISAL REVIEW In keeping with USPAP Standards Rule 3-2 and 3-5, the following information is provided: Client: The City of Denton and Cobb, Fendley, & Associates Intended User(s): Cobb, Fendley, & Associates, The City of Denton, its counsel, employees, agents, and assigns. Intended Use: to provide a recommendation of the appraisal for use by The City of Denton for acquisition purposes as it pertains to the parcel described herein. Purpose of Review: To determine if the conclusions and methodology used in the appraisal report are reasonable and appropriate, and if the elements in the report meet the standards of the intended users, and communicate my findings to the client, by written review. This assignment does not include the development of my own opinion of value. This review assignment is intended to aide in decision-making and property acquisition with respect to The City of Denton’s IH-35 Utility Relocation project and includes a review opinion related only to the work under review. Effective Date of Review: the work was under review on March 15, 2022, and this is considered the effective date of the review. Date of Work Under Review (Appraisal Report Date): March 31, 2022 Effective Date of the Appraisal under review: February 16, 2022 Date of this Appraisal Review Report: March 31, 2022 Scope of Review: with respect to the appraisal review process, I have completed the following: I have read the appraisal report in its entirety, examined it for completeness, and have provided comments to the appraiser for consideration. I have not reviewed the appraiser’s work file and assume that items referenced in the appraisal report are retained in the work file; and the work file includes all information necessary to produce a credible opinion of value of the subject appraised. I did not research the market for additional comparable sales or other market data. I personally inspected the subject property and comparable sales utilized in the appraisal report under review. The subject property was inspected from the public right-of-way and/or subject property, and I had an unobstructed view of the proposed acquisition area (excepting areas of dense vegetation). My opinion of the work under review is limited to the report and information provided by the appraiser, and when necessary, information provided by The City of Denton (e.g., ROW maps). No other information was relied on. The information provided in the appraisal report is considered reliable but is not guaranteed. I did not confirm any of the subject, or comparable sale data. I did not perform any additional research, and I have not formed an independent opinion of market value for the subject property, acquisition, or remainder property. I have adequate knowledge of this property type and market area to meet the competency requirements set forth in USPAP. No extraordinary assumptions or additional hypothetical conditions are necessary in this review assignment. I have prepared a written report with my recommendations regarding the appraisal report. DocuSign Envelope ID: 25E66FBC-2A6A-4B97-AD34-4BEF8006E1B6 Form ROW-A-10 (Rev. 09/16) Page 8 of 10 22.250 Review, Parcel 090-25, IH-35 Utility Relocation, Denton, Texas CERTIFICATION I certify that, to the best of my knowledge and belief: • The statement of facts and data reported by the reviewer and used in the review process are true and correct. • the analyses, opinions and conclusions in this review are limited only by the reported assumptions and limiting conditions stated in this review report, and are my personal, impartial and unbiased professional analysis, opinions and conclusions. • I have no present or prospective interest in the property that is the subject of the work under review and have no personal interest with respect to the parties involved. • I have performed no services, as an appraiser or in any other capacity, regarding the property that is the subject of the work under review within the three-year period immediately preceding acceptance of this assignment. • I have no bias with respect to the property that is the subject of the work under review or to the parties involved with this assignment. • My engagement in this assignment was not contingent upon developing or reporting predetermined results. • My compensation is not contingent on an action or event resulting from the analyses, opinions, or conclusions in this review or from its use. • My compensation for completing this assignment is not contingent upon the development or reporting of predetermined assignment results or assignment results that favors the cause of the client, the attainment of a stipulated result, or the occurrence of a subsequent event directly related to the intended use of this appraisal review. • My analyses, opinions, and conclusions were developed, and this review report was prepared in conformity with the Uniform Standards of Professional Appraisal Practice, and the requirements of the Code of Professional Ethics and Standards of Professional Appraisal Practice of the Appraisal Institute. • I have made a personal inspection of the subject property of the report under review and the comparable sales included in that report. • No one provided significant real or personal property appraisal review assistance to the person signing this certification. • As of the date of this review, I am certified under the requirements of the State of Texas as a general real estate appraiser. • As of the date of this report, I have completed the Standards and Ethics Education Requirements for Candidates of the Appraisal Institute. Tommy Matthews State Certified General Appraiser, TX-1337544-G DocuSign Envelope ID: 25E66FBC-2A6A-4B97-AD34-4BEF8006E1B6 Form ROW-A-10 (Rev. 09/16) Page 9 of 10 22.250 Review, Parcel 090-25, IH-35 Utility Relocation, Denton, Texas DocuSign Envelope ID: 25E66FBC-2A6A-4B97-AD34-4BEF8006E1B6