HomeMy WebLinkAboutCB Denton Square B AppraisalAn Appraisal Report
of
A Proposed Sidewalk Easement of
A 1.0400 Acre Tract of Land
Located at 210 South Locust Street
Denton, Denton County, Texas 76201
TPA File #: 23.0911 - B
As of
September 24, 2023
Prepared for
Specialty Land Services LLC
Mr. Buddy Minett & Matthew Hutto
8780 3rd Street, Suite 110
Frisco, Texas 75034
Prepared by
2301 Ohio Drive, Suite 150
Plano, Texas 75093
(214) 297-9000
www.ToddPropertyAdvisors.com
2301 Ohio Drive, Suite 150 ▲ Plano, Texas 75093 ▲ www.ToddPropertyAdvisors.com
TELEPHONE: (214) 297-9000 ▲ FAX: (469) 365-9127 ▲ E-MAIL: mitchell@toddpa.com
October 5, 2023
Specialty Land Services LLC
Mr. Buddy Minett & Matthew Hutto
8780 3rd Street, Suite 110
Frisco, Texas 75034
RE: A proposed sidewalk easement of a 1.0400 acre tract of land Located at 210 South
Locust Street Denton, Denton County, Texas 76201
Dear Mr. Minett & Mr. Hutto:
We have personally inspected the above-referenced property and have prepared an opinion of
value in accordance with your request. The purpose of this appraisal is to provide an opinion of
market value of the fee simple estate of the subject property in “as is” condition and recommended
compensation for the parts to be acquired and damages to the remainder, if any, as of the effective
date of appraisal. The property in question involves a proposed 0.0350 acre sidewalk easement
by the City of Denton. All data considered pertinent to the preparation of this appraisal has been
investigated and analyzed and the results of the analysis together with our conclusions may be
found within the following report. Mitchell B. Todd, MAI, Michael A. Keane, MAI, and Jonathan D.
Moncrief have performed numerous appraisals on similar properties and are sufficiently
competent to complete this assignment.
This appraisal involves an appraisal report in compliance with the Scope of Work Rule of the
2020-2023 Edition of the Uniform Standards of Professional Appraisal Practice (USPAP) as
provided by the Appraisal Foundation. It involves the application of the Sales Comparison
Approach to value, as well as a Certification. Additionally, please note the Assumptions and
Limiting Conditions located at the end of this report. For purposes of this report, we have only
been asked to provide an opinion of market value.
This appraisal report sets forth the identification of the subject property, information regarding the
subject property and its surrounding area, comparable sales data, the results of the investigations
and analyses, and the reasoning leading to our conclusions. The appraisal assignment was not
based on a requested minimum valuation, a specific valuation or the approval of a loan.
All methodology utilized to arrive upon the opinion of market value can be found in The Appraisal
of Real Estate, Fifteenth Edition, as published by The Appraisal Institute.
Mr. Minett & Mr. Hutto
October 5, 2023
Page Two
In our professional opinion, and after careful consideration of the various factors influencing this
appraisal, the following illustrates the “as is” market value for the subject property and the
recommended compensation, as of the effective date of appraisal, September 24, 2023:
Extraordinary Assumption: According to the 2020-2023 USPAP, an extraordinary
assumption is “an assignment-specific assumption as of the effective date regarding
uncertain information used in an analysis which, if found to be false, could alter the
appraiser’s opinions or conclusions.” An extraordinary assumption has been made that
the acquisitions by the City of Denton will not permanently limit ingress/egress to and from
the subject property. The use of this assumption could affect the results of this assignment
and if found to be incorrect could necessitate re-analysis.
Further, these opinions of value are contingent upon the subject property being free of any
hazardous wastes deposited thereupon by the present or previous owners/tenants of the site
which would adversely affect the value of the property. The existence of any such materials was
not observed upon the physical inspection of the property. However, we are not qualified to detect
these substances and it is recommended that an expert in this field be obtained if the client has
suspicion of these materials and substances existing on the property. It is also assumed there is
full compliance with all requirements of Title III, of the Americans with Disabilities Act (ADA) which
became effective January 26, 1992. No responsibility is assumed by the appraisers for any such
conditions, or for any expertise of architectural/design knowledge and cost required identifying
such non-compliance.
Value of the Whole Property:$1,237,791
Value of the Part Acquired (0.035 Acre Sidewalk Easement):$53,779
Remainder Before Acquisition:$1,184,012
Remainder After Acquisition:$1,184,012
Enhancements:$0
Damages:$0
Cost to Cure:$0
Value of the Part Acquired (0.035 Acre Sidewalk Easement):$53,779
Total Recommended Compensation:$53,779
Opinions of Recommended Compensation
Appraisal Institute General Demonstration of Knowledge - Capstone Program
Admissions Department
March 14, 2018
Page Two
Based on the data rendered via a physical inspection of the subject, as well as other pertinent
information, it is my opinion that the market value of the fee simple interest in the subject
property, as of March 6, 2018, is:
“As Is" Market Value:
ONE MILLION SEVEN HUNDRED FORTY THOUSAND DOLLARS
($1,740,000)
Such opinion is subject to the general assumptions and limiting conditions found on page
?????. This letter must remain attached to the report, which contains ????? pages, in order for
the value opinion set forth to be considered valid. Particulars and supporting data are provided
in the accompanying report.
Respectfully submitted,
Michael A. Keane
State Certification #TX-1380384-G
michaelakeane@me.com
Mr. Minett & Mr. Hutto
October 5, 2023
Page Three
There was no information required or deemed pertinent to the completion of this appraisal, which
was not available to the undersigned unless otherwise stated in this report. Additionally, the value
conclusions found within this report are exclusive of any personal property, fixtures, or intangible
items that are not real property. Thus, the reported values within this report pertain to the real
property only. In order for the opinion of value set forth herein to be considered valid this letter of
transmittal must not be considered separately or independently of the attached appraisal report,
and this appraisal report must be used in its entirety and must not be separated into parts.
Should any questions regarding this appraisal arise, please contact us.
Respectfully submitted,
Mitchell B. Todd, MAI Michael A. Keane, MAI
President Senior Vice President
State Certification #TX-1323514-G State Certification #TX-1380384-G
mitchell@toddpa.com michael@toddpa.com
Jonathan D. Moncrief
Appraiser Associate
State Certification #TX- 1381122-G
jon@toddpa.com
jonathan@toddpa.com
TABLE OF CONTENTS
Section I - Introduction
Executive Summary ........................................................................................................ 2
Identification of the Property ............................................................................................ 5
Objective of the Appraisal................................................................................................ 6
Identification of the Appraisal Problem ............................................................................ 6
Date of Value Opinion ..................................................................................................... 6
Date of Report ................................................................................................................. 6
Appraisal Report Option .................................................................................................. 6
Intended Use/Intended User ............................................................................................ 6
Statement of Prior Services Rendered ............................................................................ 7
Property Rights Appraised............................................................................................... 7
Definition of Market Value ............................................................................................... 7
Statement of Ownership .................................................................................................. 7
Scope of Work ................................................................................................................. 7
History of the Subject Property ........................................................................................ 9
Estimate of Exposure Time ............................................................................................. 9
Hypothetical Conditions ................................................................................................. 10
Extraordinary Assumptions............................................................................................ 10
Section II – External Influences
Regional Analysis .......................................................................................................... 12
City/Neighborhood Analysis .......................................................................................... 22
Section III - Factual Descriptions and Analyses
Site Description and Analysis ........................................................................................ 28
Zoning and Land Use Restrictions ................................................................................. 35
Tax Analysis .................................................................................................................. 38
Subject Property Photographs ....................................................................................... 39
Highest and Best Use Analysis ..................................................................................... 43
The Appraisal Process .................................................................................................. 46
Section IV – Land Valuation
Land Valuation .............................................................................................................. 48
Comparable Land Sales Presentation ........................................................................... 49
Land Sales Analysis ...................................................................................................... 54
Conclusion of Land Value ............................................................................................. 62
Section V - Valuation Conclusion
Final Opinion of Value ................................................................................................... 66
Section VI - Certification & Assumptions & Limiting Conditions
Certification ................................................................................................................... 70
Assumptions and Limiting Conditions ............................................................................ 73
Section VI – Addendum
Qualifications & Certifications of the Appraisers
SECTION I - INTRODUCTION
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EXECUTIVE SUMMARY
SALIENT FACTS & CONCLUSIONS
Property Appraised: A 1.0400 acre tract of land (45,302 square feet)
improved with a 39,500 square foot apartment
building. The source of the land size is the Denton
Central Appraisal District. According to surveys
provided by Kimley-Horn and Associates, Inc., the
portions of the site from which property rights will
potentially be acquired involves a 0.0350 acre
(1,526 square foot) sidewalk easement.
Furthermore, we determined that the use of the main
improvements will not be affected by the proposed
acquisitions as the acquisitions are located a
sufficient distance from the main improvements and
will not negatively affect internal circulation,
drainage, ingress/egress, or utility of the remainder.
Property Type: A 39,500 square foot apartment building with site
improvements
Location: 210 South Locust Street, Denton, Denton County,
Texas
Date of Inspection: September 24, 2023
Date of Valuation: September 24, 2023
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Date of Report: October 5, 2023
Property Rights Appraised: Fee Simple Estate
Ownership: CB Denton Square Owner, LLC
Land Size: Total Land: 1.0400 acres (45,302 SF)
Sidewalk Easement: 0.0350 acres (1,526 SF)
Status of Property: As of the date of the appraisal, the subject property
comprises a tract of land improved with a 39,500
square foot apartment building. The tract comprises
1.0400 acres (45,302 square feet) and is located at
the northeast corner of Sycamore Street and Elm
Street and has a municipal address of 210 South
Locust Street, Denton, Texas. According to surveys
provided by Kimley-Horn and Associates, Inc., the
portions of the site from which property rights will
potentially be acquired involves a 0.0350 acre
(1,526 square foot) sidewalk easement. The
property currently has access to all utilities.
Zoning: MD – Mixed-Use Downtown Core
HIGHEST AND BEST USE:
As If Vacant: Office-Retail Development
SCOPE OF WORK
Appraisal Problem Identification: To provide an opinion of market value of the fee
simple estate of the subject property in “as is”
condition and recommended compensation for the
parts to be acquired and damages to the remainder,
if any, as of the effective date of appraisal
(September 24, 2023).
Objective of the Appraisal: To provide an opinion of market value of the fee
simple estate of the subject property in “as is”
condition and recommended compensation for the
parts to be acquired and damages to the remainder,
if any, as of the effective date of appraisal
(September 24, 2023). These value opinions are
intended to assist in determining compensation
regarding the potential acquisitions by the City of
Denton.
Intended User: Specialty Land Services, LLC and the City of Denton
Client: Specialty Land Services, LLC
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Valuation Approaches Used: Sales Comparison Approach
CONCLUSION OF VALUES
Value of the Whole Property:$1,237,791
Value of the Part Acquired (0.035 Acre Sidewalk Easement):$53,779
Remainder Before Acquisition:$1,184,012
Remainder After Acquisition:$1,184,012
Enhancements:$0
Damages:$0
Cost to Cure:$0
Value of the Part Acquired (0.035 Acre Sidewalk Easement):$53,779
Total Recommended Compensation:$53,779
Opinions of Recommended Compensation
TODD PROPERTY ADVISORS
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23.0911 - B 5
IDENTIFICATION OF THE PROPERTY
As of the date of the appraisal, the subject property comprises a tract of land improved with a
39,500 square foot apartment building. The tract comprises 1.0400 acres (45,302 square feet)
and is located at the northeast corner of Sycamore Street and Elm Street and has a municipal
address of 210 South Locust Street, Denton, Texas. According to surveys provided by Kimley-
Horn and Associates, Inc., the portion of the site from which property rights will potentially be
acquired involves a 0.0350 acre (1,526 square foot) sidewalk easement. The property currently
has access to all utilities. A summary of the legal description of the subject tract is located below
followed by an aerial photograph of the subject property.
Being a tract of land situated in the William Loving Survey Abstract No. 759, City of
Denton, Denton County, Texas; said tract being part of Lot 3R, Block 24, Original
Town of Denton, an addition to the City of Denton, according to the plat recorded
Instrument No. 2012-258 of the Official Public Records, Denton County, Texas; said
tract also being part of a tract of land described in Special Warranty Deed to CB
Denton Square Owner LLC, recorded in Instrument No. 2020-34780 of the said
Official Public Records.
*The yellow lines depicted in the aerial photograph outlines the boundaries for the subject property, while the blue shaded area depicts
the boundaries of the proposed sidewalk easement.. These boundaries are approximations based upon our best estimates given the
surveys provided. (Image capture date: September 2023).
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OBJECTIVE OF THE APPRAISAL
To provide an opinion of market value of the fee simple estate of the subject property in “as is”
condition and recommended compensation for the parts to be acquired and damages to the
remainder, if any, as of the effective date of appraisal (September 24, 2023). These value opinions
are intended to assist in determining compensation regarding the acquisition of a sidewalk
easement by the City of Denton.
IDENTIFICATION OF THE APPRAISAL PROBLEM
The appraisal problem of this report is to provide an opinion of the market value of the fee simple
estate of the subject tract and recommended compensation for the part to be acquired of the
subject property and damages to the remainder, if any, as of the date of appraisal (September
24, 2023).
DATE OF VALUE OPINION
An inspection of the property was conducted on September 24, 2023. The effective date of
valuation is September 24, 2023.
DATE OF REPORT
The transmittal date of this appraisal is October 5, 2023.
APPRAISAL REPORT OPTION
This is an Appraisal Report that complies with the reporting requirements set forth under
Standards Rule 2-2 (a) of the Uniform Standards of Professional Appraisal Practice (USPAP). As
such, it presents sufficient information to enable the client and other intended users as identified
to understand it properly. The depth of discussion contained in this report is specific to the needs
of the client and the intended use of the appraisal as noted herein.
INTENDED USE/INTENDED USER
This appraisal report has been prepared for and is intended to be used by Specialty Land
Services, LLC and the City of Denton. The intended use of this appraisal report has been identified
by the appraisers based on communications with the client, at the time of the assignment to assist
in determining the market value and recommended compensation, of the subject property
regarding the potential acquisition by the City of Denton. Therefore, the intended user of this
report is Specialty Land Services, LLC and the City of Denton. Use of this report by others is not
intended by the appraisers. No one other than the intended users should rely on the opinion of
value or any other conclusions contained in this report.
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STATEMENT OF PRIOR SERVICES RENDERED
Todd Property Advisors, and Mitchell B. Todd, MAI, Michael A. Keane, MAI, and Jonathan D.
Moncrief have rendered no services as an appraiser or in any other capacity regarding this
property within the three-year period immediately preceding acceptance of this assignment.
PROPERTY RIGHTS APPRAISED
The fee simple estate is defined as "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" 1 This differs from the leased fee estate. “In appraisal practice,
the lessor’s, or landlord’s, position is referred to as the leased fee. The rights of the lessor (the
leased fee owner) and the lessee (leaseholder) are specified by contract terms contained in the
lease". 2
The fee simple estate of the subject is being appraised, due to the lack of existence of any lease
agreements, which would encumber the property. Furthermore, the proposed sidewalk easement
has also been appraised. This ownership interest is subject to any zoning ordinances, easements,
restrictions of record and other applicable codes and ordinances of record.
DEFINITION OF MARKET VALUE
The appropriate definition of market value for this assignment is as follows: “Market Value” is the
price the property would bring when offered for sale by one who desires to sell, but is not obliged
to sell, and is bought by one who desires to buy, but is under no necessity of buying, taking into
consideration all those uses to which it is reasonably adaptable and for which it either is or in all
reasonable probability will become available within the reasonable future.
City of Austin v. Cannizzo, 267 S.W. 2d 808 (Tex, 1954)
STATEMENT OF OWNERSHIP
According to information provided by the Denton CAD and information provided by the client, title
of the subject is vested in CB Denton Square Owner, LLC.
SCOPE OF WORK
The scope of work is defined as the type and extent of research and analysis in an assignment.
The scope of this appraisal assignment is to provide a credible opinion of the market value of the
subject property in “as is” condition and the recommended compensation as of the effective date
of appraisal (September 24, 2023). In compliance with the 2020-2023 Edition of the Uniform
1 The Appraisal Institute, The Dictionary of Real Estate Appraisal (Sixth Edition), Chicago, Illinois, 2015, page 90.
2 The Appraisal Institute, The Appraisal of Real Estate (Fifteenth Edition), Chicago, Illinois, 2020, page 62.
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Standards of Professional Appraisal Practice (USPAP), and upon the request of the client, an
appraisal report has been prepared utilizing the Scope of Work Rule.
The Scope of Work Rule within USPAP emphasizes the requirements for problem identification,
determining the appropriate scope of work, and disclosure of the scope of work that was
performed in appraisal, appraisal review, and appraisal consulting assignments. The following is
a discussion of the scope of work undertaken within the context of this report.
The scope of work for this appraisal was determined by the complexity of the assignment and the
reporting requirements of this appraisal report type, including: the definition of market value, real
property interests valued, assumptions and limiting conditions, and certifications.
The appraisers considered this scope of work to be adequate to complete a credible appraisal of
the subject property. The appraisers believe that this scope of work would meet the expectations
and needs of parties who are regular intended users for similar assignments and that this scope
of work is substantially similar to what an appraiser’s peers actions would be in performing the
same or similar assignment. Based upon our education and experience appraising similar
properties for right-of-way acquisition purposes and our knowledge of the local market, we are
competent to complete this appraisal assignment.
The subject appraisal research began with a review of the three year history of the subject
property prior to the date of appraisal by conducting research of the Denton County public records.
This research was facilitated by several on-line resources including CoStar.com, the Denton CAD,
and Loopnet.com, as well as several other resources including owners, buyers, lenders and other
parties knowledgeable of the subject property. The Regional, City, and Neighborhood Analyses
are presented in a summarized format and include information gathered through inspection of the
areas, review of published secondary data, such as that provided by the North Central Texas
Council of Governments, and a variety of resources available from the Cities of Fort Worth, Dallas,
and other surrounding communities comprising the Metroplex.
The site analysis included an inspection by the appraisers and a review of FEMA flood insurance
rate maps, and aerial photographs via satellite. The property inspection included a visual survey
of the subject on September 24, 2023. The applicable zoning ordinance of the subject property
was verified with the zoning records of the City of Denton. The tax rates, assessed values and
information regarding the subject's tax debt were verified by the Denton CAD and the individual
taxing jurisdictions via the appraisal district’s website (www.dentoncad.com).
Primary data regarding the subject submarket and the immediate surrounding area was verified
by the appraisers through an inspection of the area, and interviews conducted with owners, real
estate brokers, and management company representatives. To complete this appraisal
assignment, the Sales Comparison Approach was considered and utilized. All data gathered
within this approach regarding properties similar to the subject have been previously verified with
either the Grantor, the Grantee, or their representatives through their respective sources. A more
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detailed explanation of the methods and techniques employed in these approaches is located in
the Valuation Process section of this report.
HISTORY OF THE SUBJECT PROPERTY
The subject property sales history was researched thorough a search available from the Denton
CAD property records, CoStar.com, and Loopnet.com among various other sources. According
to Denton County Tax Records, title of the subject is vested in CB Denton Square Owner, LLC.
According to the Denton CAD, the subject was purchased by the current owner in March 2020.
The purchase price and additional details regarding this transaction were not available to the
appraisers. No other arm’s length conveyances have been uncovered regarding the subject
during the last three years.
ESTIMATE OF EXPOSURE TIME
A reasonable exposure period is the amount of time necessary to expose a property to the open
market in order to achieve a sale. According to USPAP 2020-2023, exposure time is defined as,
“an estimated length of time that the property interest being appraised would have been offered
on the market prior to the hypothetical consummation of a sale at market value on the effective
date of the appraisal.” It is our opinion that a period of six to nine months, with a contract period
of 90 days is reasonable. This results in a total exposure time until closing at a title company of
nine to twelve months. We performed due diligence in estimating the exposure period for the
subject property by surveying the marketing period for comparable properties which had recently
sold or were placed under contract. Additionally, the brokers contacted in verifying the comparable
improved sales within this report generally indicated that exposure times during the last twelve
months have typically ranged from six to twelve months.
It was observed that properties are often marketed for several months or years with very little
interest shown in the property. However, they eventually sell after significant price reductions. A
common tendency among the majority of these sales is that once these properties experience
price reductions, which are believed to bring them into alignment with the rest of the market, their
exposure time was typically less than one year. The price reductions and recognition of market
derived values is reflected in the comparables' sales prices. This is to the extent that the sales
price as represented by the value conclusion for the subject is attractive to an investor today.
Thus, this attractive price should result in a normal exposure of less than one year. Therefore, it
is our opinion that had the subject property been marketed at or very near the "as is" value
conclusion contained herein, it would have been sufficiently attractive to entice an investor to
purchase the property within a nine to twelve month exposure period.
Marketing time is defined as “an opinion of the amount of time it might take to sell a real or
personal property interest at the concluded market value level during the period immediately after
the effective date of an appraisal. Marketing time differs from exposure time, which is always
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presumed to precede the effective date of an appraisal.” 3 Thus, marketing time is an estimate of
the amount of time necessary to sell a property after the date of appraisal, which differs from
exposure time which is a retrospective estimate of the amount of time necessary to achieve a
sale prior to the effective date of appraisal.
It is our opinion that a marketing period of six to nine months, with a contract period of 90 days is
reasonable. This results in a total marketing time until closing at a title company of nine to twelve
months. We performed due diligence in estimating the marketing period for the subject property
by surveying the marketing period for comparable properties which had recently sold or were
placed under contract. A common tendency among the majority of the sales is that once these
properties experience price reductions which are believed to bring them into alignment with the
rest of the market, their marketing period is typically less than one year. For example, properties
are often marketed for several years with very little interest shown in the property. However, they
eventually sell after significant price reductions. The price reductions and recognition of market
derived values is reflected in the comparables' sales prices. This is to the extent that the sales
price as represented by the value conclusion for the subject is attractive to an investor today.
Thus, this attractive price should result in a normal marketing period of less than one year.
Therefore, it is our opinion that if the subject property is marketed at or very near the value
conclusion contained herein, it will be sufficiently attractive to entice an investor or user to
purchase the property within a twelve month marketing period.
HYPOTHETICAL CONDITIONS
According to the 2020-2023 USPAP, a hypothetical condition is “a condition, directly related to a
specific assignment, which is contrary to what is known by the appraiser to exist on the effective
date of the assignment results, but is used for the purpose of analysis.” There were no
hypothetical conditions utilized within this report.
EXTRAORDINARY ASSUMPTIONS
According to the 2020-2023 USPAP, an extraordinary assumption is “an assignment-specific
assumption as of the effective date regarding uncertain information used in an analysis which, if
found to be false, could alter the appraiser’s opinions or conclusions.” An extraordinary
assumption has been made that the acquisitions by the City of Denton will not permanently limit
ingress/egress to and from the subject property. The use of this assumption could affect the
results of this assignment and if found to be incorrect could necessitate re-analysis.
3 The Appraisal Institute, The Dictionary of Real Estate Appraisal (Sixth Edition), Chicago, Illinois, 2015, page 140.
SECTION II – EXTERNAL INFLUENCES
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REGIONAL ANALYSIS
Real Estate is an immobile asset, which is dependent upon the exterior environment for economic
viability. The economic climate in which a property is located is both general (the region or area
in which a property is located) and specific (the neighborhood). Four forces continually exert
influence on real estate values within any environment: social, economic, environmental and
governmental. The purpose of this section is to consider all pertinent forces that will have an
effect on the use and value of the subject property.
The Dallas-Fort Worth-Arlington Consolidated Metropolitan Statistical Area (CMSA)
encompasses approximately 9,289 square miles in north central Texas. The Dallas-Fort Worth-
Arlington CMSA is comprised of 12 counties: Collin, Dallas, Denton, Tarrant, Johnson, Kaufman,
Parker, Rockwall, Hunt, Wise, Delta and Ellis. This CMSA, which is also referred to as the D/FW
area or Metroplex, is located 203 miles northeast of Austin, 240 miles northwest of Houston and
206 miles south of Oklahoma City. On a national level, the Metroplex is located in the southern
central sector of the country. The Dallas/Fort Worth area is located approximately equidistant
from both coasts and from the four major concentrations of population in North America: New
York, Chicago, Los Angeles and Mexico City. The following is a discussion of the aforementioned
forces that exert influence on property value.
Subject Property
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Environmental
The Dallas-Fort Worth climate is humid subtropical with hot summers. It is also considered to be
continental, characterized by a wide annual temperature range. The amount of precipitation
usually varies and ranges from less than 20" to more than 50". D/FW winters are somewhat mild,
but occasionally there are sudden drops in temperature. Periods of extreme cold that occasionally
occur are short-lived, so that even in January mild weather occurs frequently. During the summer,
the high temperatures are associated with fair skies, westerly winds, and low humidity’s. Average
high and low temperatures range from 37 F in January to 98 F in August. Rainfall occurs
throughout the year, but usually occurs more frequently during the night and also during the
spring. Usually, periods of rainy weather last for only a day or two, and are followed by several
days with fair skies. Moderate hail may occur on about two or three days a year, only causing
slight and scattered damage. However, windstorms occurring during thunderstorm activity may
be destructive. Snowfall is rare. The average length of the warm seasons (freeze-free period) is
about 249 days, or about 8 months. Thus, the local climate is very conducive of real estate
development.
The area's topography is basically level in the northern sector to gently rolling in the southern
portion. The rolling terrain of the southern sector is due to a geologic formation known as the
escarpment. This escarpment consists of a chalky soil that rests on top of shales causing unstable
building foundations. The shale soil presents shrink-swell problems for the foundations of
buildings that are constructed on it, and the chalk is an unstable soil that crumbles easily, resulting
in minor landslides.
Transportation
As stated above, on a national basis, the Dallas/Fort Worth Metroplex is centrally located, which
has resulted in the development of a major transportation network that connects the Metroplex
with the rest of the country. This network consists of major thoroughfares, railroad lines and air
carriers. In regards to roadways, the Dallas/Fort Worth region is located at the convergence of
four Interstate Highways: north-south access is provided by Interstate Highways 35 and 45 (IH-
35 and IH-45); east-west access is provided by IH-20 and IH-30. Two major outer loops provide
internal accessibility to the region. LBJ Freeway (IH-635) surrounds Dallas, and IH-820
encompasses Fort Worth. Both of these arteries connect with the interstate highways as well as
local streets, thus affording the cities regional as well as internal access. In recent years, greater
access and mobility have been expanded to the Metroplex’s surrounding communities. The
President George Bush Toll Road (SH-190) is a loop encircling IH-635 that connects IH-30 in
Garland/Rockwall to IH-20 in Grand Prairie traversing the communities of Rowlett, Mesquite,
Garland, Richardson, Plano, Carrollton, Coppell, Irving, Arlington and Grand Prairie. Additionally,
the North Texas Tollway Authority (NTTA) recently opened the Chisholm Trail Parkway
connecting the Downtown Fort Worth Business District with communities to the south including
Benbrook, Crowley, Joshua and connecting with SH-67 in Cleburne.
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Two additional toll roads which serve the Metroplex are the Dallas North Tollway and the Sam
Rayburn Tollway (SRT). SH-121(located north of SH-190) has expanded to incorporate and
become the SRT. While SH-121 continues to run east-west from Fort Worth to McKinney
connecting DFW Airport to other areas of the Metropolitan area, the SRT has provided a larger
artery for traffic to flow between the communities of Grapevine, Coppell, Carrollton, Plano, Frisco,
Allen and McKinney. The Dallas North Tollway connects downtown Dallas to the rapidly growing
areas of Frisco and Prosper. The Sam Rayburn Tollway connects central Collin County to the
vicinity of the DFW International Airport.
Reference may be made to Mobility 2040 which was adopted by the Regional Transportation
Council in March of 2016. This long range strategic plan aims to define the vision for the Region’s
transportation system and identify solutions and options. The goals of the plan are to improve
mobility, quality of life, and air quality concerns for the cities of Dallas and Fort Worth as well as
the surrounding areas. In addition, properties located along or near new or improved
thoroughfares should benefit from this plan through better access and exposure. It is worthy to
note that the region is also serviced by multiple public transportation services including bus, rail
and light rail. These services include Dallas Area Rapid Transit (DART), DART Light Rail, the Fort
Worth Transportation Authority (FWTA or The T), the Trinity Railway Express (TRE), and the
Denton County Transportation Authority (DCTA).
In addition to the various modes of ground transportation, the Metroplex is serviced by a major
international airport as well as several other local and regional airports. D/FW International Airport,
located midway between Dallas and Fort Worth, has the 2nd largest land area of any other airport
in the nation with 17,207 acres and the fourth largest in the world. In 2016, D/FW was responsible
for 65,670,697 passengers reaching their destinations, making it the world’s 11th busiest airport
in number of passengers, with service provided by 9 international and 11 domestic airlines. As of
December 2018 DFW Airport provides transportation to more than 244 destinations including 62
international and 182 domestic destinations with the number of daily flights just under 3,000
including passenger and freight. Additionally, DFW is one of 3 domestic airports and 11 globally
providing service to more than 200 destinations around the world.
The City of Dallas owns and operates Dallas Love Field. The airfield is located six miles northwest
of the downtown central business district and is managed by the City's Department of Aviation.
Southwest Airlines is the predominant user of Love Field; however, Alaska Airlines and Delta
Airlines also utilize Love Field. In 1963, several airlines had all agreed to seek full repeal of the
Wright Amendment; which restricted direct flights to other states from Love Field. In 2008, the
airport handled approximately 8,060,000 passengers. On October 13, 2014, the Wright
Amendment had been repealed and new non-stop service to several cities began. This has led
to significant increases in passenger traffic. Southwest Airlines added numerous other cities in
the beginning of 2015. In 2016, the airport handled approximately 15,563,000 passengers. To
accommodate the increase in traffic construction on a new parking garage was constructed and
opened in 2018.
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Commercial air freight service is provided to the region by the Alliance International Centre which
is the first development of its type in the world. This Fort Worth based facility comprises a 3,000-
acre cargo airport/industrial park. Meacham Field (Fort Worth), Addison Airport (North Dallas) and
several other municipal airports, provide for the area’s general aviation needs.
Social
According to The Appraisal of Real Estate, Fifteenth Edition, social forces studied by appraisers
primarily relate to population characteristics. Because the demographic composition of the
population reveals the potential demand for real estate, proper analysis and interpretation of
demographic trends are required. Real property values are affected not only by population
changes and characteristics, but also by the entire spectrum of human activity. The total
population, its composition by age and gender, and the rate of household formation and
dissolution strongly influence real property values. Social forces are also manifest in attitudes
toward education, law and order, and lifestyle options. This section of the report will identify all
social forces that may have an effect on the value of the subject property.
According to the North Central Texas Council of Governments (NCTCOG) 2023 population
estimates, North Central Texas estimated that the region had added approximately 161,433 new
residents between 2022 and 2023 for a total population of 8,284,892. A chart detailing the
individual county growth rates is located below included the most recent year over year data.
The estimated January 1, 2023, population for the NCTCOG region is 8,284,892. Last year the
region added 161,433 people, over 4,000 more residents than were added in 2021. Fort Worth
(18,943) added more population than any other city, almost double compared to the next closest
city. Celina (9,787), Frisco (7,602), Arlington (5,861) and Mansfield (5,245) round out the top 5
growth cities. For the second straight year, Collin County added more than 40,000 new residents
while Denton County and Tarrant County each added over 30,000 new people. Since 2020,
453,000 new residents now call north Texas home.”
County Name
2012 Est.
Pop.
Apr. 1
2013 Est.
Pop.
Jan. 1
2014 Est.
Pop.
Jan. 1
2015 Est.
Pop.
Jan. 1
2016 Est.
Pop.
Jan. 1
2017 Est.
Pop.
Jan. 1
2018 Est.
Pop.
Jan. 1
2019 Est.
Pop.
Jan. 1
2020 Est.
Pop.
Jan. 1
2021 Est.
Pop.
Jan. 1
2022 Est.
Pop.
Jan. 1
2023 Est.
Pop.
Jan. 1
Jan. 2022
to Jan.
2023 Abs.
Change
Jan. 2022
to Jan.
2023 %
Change
Collin 795,390 827,780 851,920 873,840 901,170 932,530 969,780 1,010,330 1,039,540 1,082,760 1,135,058 1,175,974 40,916 3.60%
Dallas 2,383,790 2,415,060 2,435,800 2,455,050 2,478,970 2,502,270 2,529,150 2,554,770 2,593,570 2,619,040 2,656,297 2,675,009 18,712 0.70%
Denton 677,880 714,000 736,900 761,040 784,840 814,560 844,260 874,240 902,190 933,220 975,158 1,006,492 31,334 3.21%
Ellis 152,570 158,070 161,200 165,010 168,690 173,410 183,360 189,820 198,640 206,810 207,623 218,125 10,502 5.06%
Erath 38,340 40,700 41,010 41,460 43,540 43,850 44,200 44,700 45,670 46,180 43,322 43,287 (35)-0.08%
Hood 53,670 58,880 61,680 64,400 64,620 64,840 65,060 65,960 66,890 66,920 62,116 62,511 395 0.64%
Hunt 87,840 90,070 91,240 92,530 93,110 94,350 95,960 97,410 99,300 101,510 104,903 109,127 4,224 4.03%
Johnson 151,790 155,240 156,710 158,880 161,670 164,970 169,160 173,700 178,260 185,180 193,494 201,427 7,933 4.10%
Kaufman 104,050 106,400 108,120 109,300 113,530 116,140 119,670 124,850 128,520 132,250 153,130 158,672 5,542 3.62%
Navarro 47,940 48,470 48,590 48,900 49,030 49,170 49,740 50,250 50,870 51,670 53,612 55,639 2,027 3.78%
Palo Pinto 28,290 28,420 28,590 28,710 28,660 28,660 28,710 28,820 28,960 29,360 28,776 29,277 501 1.74%
Parker 118,040 120,640 121,830 124,630 127,980 130,150 131,210 134,620 136,600 139,180 152,928 155,607 2,679 1.75%
Rockwall 79,570 83,400 85,900 88,200 90,570 93,130 97,990 101,020 107,780 113,350 119,897 124,734 4,837 4.03%
Somervell 8,550 8,690 8,800 8,950 9,230 9,420 9,640 9,820 9,980 10,190 9,662 9,899 237 2.45%
Tarrant 1,832,660 1,875,930 1,899,900 1,922,470 1,945,320 1,966,440 1,989,810 2,024,030 2,064,340 2,091,320 2,157,741 2,188,951 31,210 1.45%
Wise 59,600 60,920 61,690 61,970 62,240 62,460 62,700 64,060 65,300 66,010 69,741 70,159 418 0.60%
16-County Region 6,619,970 6,792,670 6,899,880 7,005,340 7,123,170 7,246,350 7,390,400 7,548,400 7,716,410 7,874,950 8,123,458 8,284,890 161,432 1.99%
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Economic
Economic forces have a direct and obvious effect on property values. The condition of an area's
economy in great measure determines the growth or decline of the population, as well as its
purchasing power, which affect the demand for goods and services. If an area's economy is in a
growth stage, construction of new housing, retail centers and expansions of employment centers
occur to accommodate the needs of the population. Conversely, as the unemployment rate rises
because of an area's declining economy, some residents move from the area, and those who
remain may have decreased disposable incomes, both of which result in a diminished demand
for housing as well as goods and services. As occupancy rates for housing, retail facilities, and
employment centers decrease, demand for new construction either decreases or may even cease
altogether. Characteristics that are considered to be demand-oriented include employment levels,
the number and size of basic industries, and the availability of mortgage credit. Economic
characteristics that are considered to be supply-oriented include the stock of available vacant and
improved properties, occupancy rates, and rental rates.
Apartment markets continue to fare better than expected, with occupancy and rents improving in
most Texas metros. According to the 2nd Quarter 2023 CoStar analytics report, the Dallas/Fort
Worth area apartment asking rent has increased approximately 2.2% (YOY). Additionally, CoStar
reports “Multifamily demand is recovering in Dallas-Fort Worth and in an encouraging signal that
more households are willing to sign new leases. Even so, the multifamily market remains
challenged as the market has weathered weak demand as elevated economic uncertainty sowed
by stubborn inflation weigh on household formation. In turn, vacancy rates are shifting higher and
rent growth is weakening. The market vacancy rate has shifted higher from 4.9% at the end of
2021 to 8.7% through the second quarter of 2023. Meanwhile, rent growth downshifted, turning
negative at -0.4%.” Furthermore, “the pace of construction in Dallas-Fort Worth remains
manageable even as the market ranks among the top spots for construction with 58,000 units
under way, translating to 6.9% of inventory. Development activity is concentrated in Collin and
Denton counties and parts of Fort Worth, tracing robust population growth in the region. While
many peer markets will face acute supply side pressure through the near term, Dallas-Fort Worth
should be relatively well insulated. In turn, vacancies and rent growth are expected to recover
more quickly compared to others in the southeast.”
The D/FW Metroplex has an excellent transportation network, a good central U.S. location, and a
relatively low cost of living compared to other parts of the U.S., which attracts major corporate
employers. D/FW is a major product distribution center and it is a major trade hub with Mexico
and other sectors across Latin America. The Emerging Trends in Real Estate markets-to-watch
survey for 2018 revealed the Dallas/Fort Worth market as the number-five market to watch. The
area is considered to continue strong growth due to projected population increases and corporate
relocations. Multiple survey respondents and interviewees mentioned the strong job growth
driving the local economy. (Emerging Trends in Real Estate, United States and Canada 2018,
PricewaterhouseCoopers LLP and Urban Land Institute). D/FW is also known for its large
technology influence, and provides business services such as advertising, data processing,
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telecommunications, and other computer services. As mentioned previously, the transportation
industry will continue to play an important part of the economy, due to D/FW International Airport’s
large influence.
According to the NCTCOG Forecast 2040, total employment for the region is anticipated to grow
in excess of 2,750,000 jobs between 2010 and 2040. Dallas County alone is expected to
encounter over 1.3 million new jobs during this time period accounting for more than 45% of the
projected growth. Collin and Denton counties will account for 18% of the region’s total growth by
adding approximately 314,000 and 196,000 new jobs respectively between 2010 and 2040.
Tarrant County is anticipated to add approximately 713,000 new jobs during this time period as
well. Employment is expected to increase tremendously over the next 20+ years which will only
continue to contribute to the growing economy of the region. The following page contains an
economic snapshot of the Dallas-Fort Worth-Arlington Metropolitan District (Dallas, Tarrant,
Collin, Denton, Rockwall, Johnson, Ellis, Hunt, Kaufman, Wise, Parker, Hood, and Somervell
Counties). This information was provided by the Texas Workforce Commission from their August
2023 Economic Profiles and is currently the most recent available.
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Governmental
Although the Metroplex is governed by state and county agencies, the most direct influence on
properties lies with the municipalities. The majority of the cities within the nine county area have
council-manager forms of government. County and city governments are financed by a
combination of property taxes, sales taxes, and miscellaneous taxes, fees, and fines. Property
taxes are collected by the various taxing districts based upon market value assessments
determined each year by county appraisal districts. No personal or corporate income taxes are
levied by any city or county in the CMSA. The state of Texas does impose Franchise Taxes which
are an indirect form of corporate income tax.
The City of Dallas has a council-manager form of government with the mayor selected at-large,
14 single member district council members, and one city manager. In a council-city management
form of government, council members represent the people in their geographic districts. The City
Manager is responsible to the council for the administration of business policies that the council
has established. Services provided by the city include complete fire protection, police protection,
water, sewer and garbage disposal. Electric service is provided by Oncor Electric Company while
natural gas is provided by Atmos Energy. Telephone service is provided by AT&T. Fort Worth,
like Dallas, utilizes a Council-City Management form of government. The Fort Worth City Council
consists of an appointed City Manager, an at-large elected mayor and eight council members.
The City manager is the Chief Administrator of the city and is appointed by and accountable to
the council. Also, like Dallas, water, sanitation, sewer services, and police and fire protection, as
well as street and bridge maintenance are all provided by the City government. The other utility
carriers of electricity, gas and telephone are all provided by the companies serving Dallas.
Conclusion
Total Nonfarm employment increased by 16,700 positions in August to reach a job count of
13,979,100. This marked the 23rd consecutive series high as employment expanded in 39 of the
last 40 months. As of August 2023, employment grew by 1,007,800 jobs since the February 2020
prepandemic level. Since August 2022, the job count rose by 402,000 positions while the annual
growth rate slowed for the 10th time in 12 months, to 3.0 percent. The private sector added
346,700 positions over this same timeframe as all 11 major industries achieved positive annual
growth for the 23rd consecutive period.
Government sector employment expanded by 12,100 jobs over the month in August. Local
Government employment mostly drove the increase with 10,400 positions added while Federal
Government employment contributed 1,100 and State Government rose by 600. After a revised
July increase of 12,200 positions, Leisure and Hospitality added 9,100 over the month in August.
The Accommodation and Food Services sector added 6,300 jobs and Arts, Entertainment, and
Recreation contributed 2,800. Following three consecutive monthly losses, Other Services had
the largest monthly increase since July 2022 with 5,000 positions added as the industry reached
a series high 477,000 jobs.
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The Texas unemployment rate was 4.1 percent for the fourth consecutive month in August. It
declined 8.7 points compared to April 2020 when it peaked at 12.8 due to COVID-19 and
measures taken to slow its spread. The rate rose annually by four-tenths of a point. The U.S. rate
rose threetenths of a point over the month from 3.5 in July to 3.8 in August. The rate increased
annually by 0.1 point and declined by 10.9 compared to April 2020.
The Texas civilian labor force grew by 33,500 over the month. The number of employed increased
for a 12th consecutive month, including an August increase of 24,300, while the unemployed rose
by 9,200. The U.S. civilian labor force added 736,000 individuals over the month, which marked
the largest increase since January 2023.
As illustrated in the recent statistics, the Dallas-Fort Worth-Arlington Metroplex continues to be
one of the fastest growing areas of the United States. This trend is expected to continue in the
future and through the year 2030, as population is expected to reach 9.1 million. More employers
are expected to migrate to D/FW, and therefore provide an increased number of jobs. Dallas/Fort
Worth accounts for over 30 percent of the State’s gross regional product and is a national leader
in the creation of new jobs, corporate relocations, and technology-related businesses. One of the
primary factors in maintaining this employment growth is excellent access to the area provided
by a well-developed highway system and D/FW International Airport, as well as an extensive rail
transportation system. Since the late 1990s, the D/FW economy has shown good signs of growth
and stability. Many experts are guardedly optimistic about the current economic outlook as it
Civilian Labor Force Estimated for Texas and the United States
Seasonally Adjusted (In Thousands)
Yearly Yearly
Aug-23 Jul-23 Aug-22 Change Aug-23 Jul-23 Aug-22 Change
Civilian Labor Force 15,111,936 15,078,414 14,679,033 432,903 Civilian Labor Force 167,839,000 167,103,000 164,714,000 3,125,000
Employed 14,489,007 14,464,723 14,133,565 355,442 Employed 161,484,000 161,262,000 158,394,000 3,090,000
Unemployed 622,929 613,691 545,468 77,461 Unemployed 6,355,000 5,841,000 6,021,000 334,000
Unemployment Rate 4.1%4.1%3.7%0.4%Unemployment Rate 3.8%3.5%3.7%0.1%
TX Labor Force Statistics US Labor Force Statistics
Seasonally Adjusted (In Thousands)
Texas Employment by Industry
Total Nonagricultural 13,499,819 100.0%13,319,049 100.0%12,908,292 100.0%1.4%4.6%
Total Private 13,031,442 96.5%12,851,508 96.5%12,445,671 96.4%1.4%4.7%
Goods Producing 2,050,736 15.2%1,802,969 13.5%1,939,738 15.0%13.7%5.7%
Natural Resources and Mining 268,442 2.0%26,419 0.2%246,422 1.9%916.1%8.9%
Construction 834,976 6.2%832,048 6.2%787,280 6.1%0.4%6.1%
Manufacturing 947,318 7.0%944,502 7.1%906,036 7.0%0.3%4.6%
Service Providing 11,449,083 84.8%11,516,080 86.5%10,968,554 85.0%-0.6%4.4%
Trade, Transportation, and Utilities 2,811,533 20.8%2,870,910 21.6%2,739,191 21.2%-2.1%2.6%
Information 242,974 1.8%242,954 1.8%227,808 1.8%0.0%6.7%
Financial Activities 878,797 6.5%880,331 6.6%839,572 6.5%-0.2%4.7%
Professional and Business Services 2,127,189 15.8%2,149,288 16.1%2,025,343 15.7%-1.0%5.0%
Education and Health Services 3,098,534 23.0%3,094,456 23.2%2,968,611 23.0%0.1%4.4%
Leisure and Hospitality 1,460,087 10.8%1,450,175 10.9%1,365,385 10.6%0.7%6.9%
Other Services 361,592 2.7%360,425 2.7%340,023 2.6%0.3%6.3%
Public Administration 468,377 3.5%467,541 3.5%462,621 3.6%0.2%1.2%0
% of Total % of Total % of Total Quarterly
Change
Yearly
ChangeINDUSTRY TITLE Q1 2023
Employment
Q4 2022
Employment
Q1 2022
Employment
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compares favorably to a softening national economy and the last two years of erratic energy
prices. Dallas/Fort Worth is larger today in population than 27 states, and is a major economic,
social, and political center of both Texas and the United States. Due to the changing
demographics, the regional economy in general, and the continued stability of the local
government, expectations for the region’s future are optimistic
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CITY/NEIGHBORHOOD ANALYSIS
A neighborhood is defined in The Appraisal of Real Estate, Fifteenth Edition, published by the
Appraisal Institute, as a group of complementary land uses. 4 Land uses within a neighborhood
are not necessarily homogeneous, as in a district, but are related in that property values are
affected by the same factors. Neighborhood boundaries identify the physical area that influences
the value of a subject property. These boundaries may coincide with observable changes in
prevailing land use or occupant characteristics. Physical features such as the type of structures,
street patterns, terrain, vegetation, and lot sizes tend to identify land use districts. Transportation
arteries, bodies of water, and changing elevation can also be significant boundaries. To identify
the neighborhood boundaries, we have followed the following four steps (summarized), as
recommended within The Appraisal of Real Estate: 1) Examine the subject property; 2) Examine
the area's physical characteristics, 3) Determine preliminary boundaries on a map; and 4)
Determine how well the preliminary boundaries correspond to the demographic data. 5
4 The Appraisal Institute, The Appraisal of Real Estate (Fifteenth Edition), Chicago, Illinois, 2020, page 138.
5 Ibid. page 141-142.
Subject Property
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The following neighborhood description will include a definition of the boundaries of the subject
neighborhood, a discussion of the primary thoroughfares, types of improvements along these
thoroughfares, the density of development, secondary street infrastructure, and a discussion of
the type of commercial uses within the neighborhood. The subject neighborhood, as defined
herein, is considered to be the immediate competing trade area for the subject property, taking
into account the various types of land uses present or reasonably probable in the neighborhood,
patterns and rates of growth, traffic patterns and density, and the density of land use, among other
factors considered in the previously suggested steps. All of these factors are considered
influential in the determination of the value of the subject.
Neighborhood Boundaries
The subject site is physically located at the northeast corner of Sycamore Street and Elm Street
and has a municipal address of 210 South Locust Street, Denton, Texas. The neighborhood is
defined as the city limits of Denton. The neighborhood has good accessibility given its proximity
to Interstate 35E and Interstate 35W and the major transportation nodes.
Location
The subject property is located in the City of Denton, Texas, in Denton County. The site is heavily
influenced by the Dallas/Forth Worth Metroplex. The subject property is located approximately
30-35 miles northwest of the Dallas Central Business District. Primary access to and from Denton
is provided by IH-35W from Fort Worth and IH-35E from Dallas. Major thoroughfares surrounding
Denton include Loop 288 to the north and east of Denton, and IH-35 to the south and west.
North/south access through Denton is provided by U.S. Highway 77 while major east/west
thoroughfares include McKinney, Oak, and Hickory Streets as well as University Drive.
Population
As can be seen in the following charts provided via the Site to do Business, the 2023 population
estimate was 149,125. The population has grown at a steady rate of 1.99%/annually since 2020.
Population between 2023 and 2028 is expected to grow at a steady rate of 2.47%/annually. The
charts for population and household growth are located below.
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Income
According to the Site to do Business, the 2023 median household income within the neighborhood
was $67,380, which is slightly below the national average of $72,603. Income is projected to grow
at a relatively steady rate of 2.96% over the next five years. Located below is a chart detailing the
median, average and per capita income for the subject neighborhood.
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Employment
According to the Site to do Business, employment was relatively high with an unemployment rate
of 4.1%. The main industries within the city include Management/Business/Financial, Professional
and Services. Approximately 64.8% of residents work in white-collar jobs.
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Conclusion
The neighborhood has been impacted positively by a recovery and growth in the national
economy since the end of the Great Recession. The progress has continued into 2023 and is
anticipated to continue into the near future. The D/FW market in general experienced economic
growth and remained attractive for investment opportunities. Given this, indications are that
market conditions within this neighborhood are moving in a positive direction.
SECTION III - FACTUAL DESCRIPTIONS AND ANALYSES
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SITE DESCRIPTION AND ANALYSIS
Site description consists of comprehensive factual data, information on land use restrictions, a
legal description, other title and record data, and information on pertinent physical characteristics.
Site analysis goes further. It is a careful study of factual data in relation to the market area
characteristics that create, enhance, or detract from the utility and marketability of specific land
or a given site as compared with other sites that it competes with. 6
Location and Legal Description
The subject property is physically located at the located at the northeast corner of Sycamore
Street and Elm Street and has a municipal address of 210 South Locust Street, Denton, Texas.
The following is a summarized legal description for the subject site.
Being a tract of land situated in the William Loving Survey Abstract No. 759, City of
Denton, Denton County, Texas; said tract being part of Lot 3R, Block 24, Original
Town of Denton, an addition to the City of Denton, according to the plat recorded
Instrument No. 2012-258 of the Official Public Records, Denton County, Texas; said
tract also being part of a tract of land described in Special Warranty Deed to CB
Denton Square Owner LLC, recorded in Instrument No. 2020-34780 of the said
Official Public Records.
Size and Shape
A legal description, survey of the part to be acquired, and parcel map for the subject tract are
located on the following pages. The subject consists of a tract of land totaling 1.0400 acres
(45,302 square feet). The tract is nearly rectangular in shape. The portions of the site from which
property rights are proposed to be acquired involves a 0.0350 acre (1,526 square foot) sidewalk
easement.
Access and Exposure
The subject property is physically located at the northeast corner of Sycamore Street and Elm
Street and has a municipal address of 210 South Locust Street, Denton, Denton County, Texas.
At the subject, South Elm Street and South Locust Street are a three lane, one way, asphalt-
paved primary roadways and Sycamore Street is a two lane bi-directional secondary roadway.
Therefore, the subject property is considered to have good exposure. Access to the property is
good due to its location along a primary roadway.
6 The Appraisal Institute, The Appraisal of Real Estate (Fifteenth Edition), Chicago, Illinois, 2020, page 165.
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Legal Description of the Proposed Sidewalk Easement
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Survey of the Proposed Sidewalk Easement
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Parcel Map
Subject Property
Topography
The topography of the subject tract is generally level and is best described as being at street
grade. Furthermore, the topography should not limit the use of the property.
Environmental Concerns
The existence of any hazardous substances or materials was not observed upon the physical
inspection of the tract. However, we are not qualified to detect these substances. It should be
noted that the opinions of value found within this report are contingent upon the subject property
being free of any hazardous wastes deposited thereupon by the present or previous
owners/tenants of the sites, which would adversely affect the value of the property.
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Flood Zone
Our analysis of flood plain considerations was conducted through a review of Community-Panel
Number 48121C0360G, dated April 18, 2011 as prepared by the Federal Emergency
Management Agency (FEMA) National Flood Insurance Program. A copy of the FEMA map for
the subject property is located following this paragraph. After careful inspection of the property
and analysis of flood plain maps, it appears that none of the subject property lies within the 100
year flood plain.
Subject Property
Soils
Strict attention should be taken to the soils, insofar as preliminary site work preparation and
excavation is concerned, as damage may occur to improvements if proper precautions are not
undertaken. However, these soil characteristics are very common throughout the region and
should not seriously hinder the development potential of the site, provided proper site preparation
and planning is undertaken. Based upon the extent of development in the subject neighborhood,
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there is no anticipated difficulty with improvements built upon these subsoil conditions, assuming
proper design and workmanship.
Surrounding Land Uses
The land usage surrounding the subject property consists of office uses to the north, west, and
south, and a church to the east. An aerial photograph depicting the subject in relation to
surrounding properties is located as follows.
Subject Property
Easements
The subject tracts appear to be encumbered by typical utility easements. We were not furnished,
and it is beyond the defined scope of our assignment to obtain title work for the subject property.
For purposes of this analysis we are assuming that only typical utility easements exist and that
they would not, and/or have not adversely affected development of the subject property. If this
assumption is not correct it could necessitate re-analysis.
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Utilities and Public Services
The subject property has access to all utilities. Telephone service is available to the area as well
as police and fire protection.
Conclusion
The subject property is located in the City of Denton in Denton County. The site is comprised of
1.0400 acres (45,302 square feet), is rectangular in shape, and has access to all utilities. The site
has good access/exposure characteristics for a retail-oriented property. Furthermore, none of the
site lies within the 100 year flood plain. The topography of the subject tract is generally level and
is best described as being at street grade. Soil and subsoil conditions are not anticipated to
severely restrict the development potential of the site.
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ZONING AND LAND USE RESTRICTIONS
The subject tract is zoned MD – Mixed- Use Downtown Core by the City of Denton. According to
the City of Denton Code of Ordinances, ”The MD district is provided to allow for a variety of uses
contributing to the economic viability of Downtown Denton. This district allows for moderate- and
high-density residential, commercial, office, entertainment, and other uses tailored to encourage
a greater level of activity while protecting the scale and strengthening the character of Downtown
and Denton's historic core. This district contributes to a vibrant environment for pedestrians,
bicyclists, and other modes of travel.” Further information for the zoning ordinance is as follows:
3.3.2 MD - Mixed-Use Downtown Core.
A. Purpose. The MD district is provided to allow for a variety of uses contributing to the economic viability of
Downtown Denton. This district allows for moderate- and high-density residential, commercial, office,
entertainment, and other uses tailored to encourage a greater level of activity while protecting the scale and
strengthening the character of Downtown and Denton's historic core. This district contributes to a vibrant
environment for pedestrians, bicyclists, and other modes of travel.
Figure 3.3-B: MD District Dimensional Standards
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B. MD District Dimensional Standards.
Table 3.3-B: MD District Dimensional Standards
Dimensional Standards Additional Standards
Lot Dimensions (minimum)
A Lot area None 3.7.2A: Minimum Lot Dimensions
B Lot width None
C Lot depth None
Setbacks (Minimum)
D Front yard None 3.7.3: Setbacks
E Side yard None
[1]
F Rear yard None
[1]
Other Standards
G Building height (maximum) 100 feet
[1] [2]
3.7.5: Building Height
Building coverage (maximum) 100
percent
3.7.6: Building Coverage
Single-family detached dwelling,
townhome, or duplex
If approved prior to October 1, 2019, see
Section 1.5.2I: Applicability of this DDC to
Existing Residential Uses and Structures
Notes:
[1] Buildings adjacent to a Residential zoning district shall comply with the standards in Subsection
7.10.6: Building Height in Transition Areas.
[2] Additional height may be allowed with a specific use permit pursuant to Subsection 2.5.2: Specific
Use Permit (SUP), and a viewshed study, if such study clearly demonstrates that any views of the
Historic Courthouse are not blocked by the new structure(s) additional height.
Furthermore, there are no other known deed restrictions, either public or private, that would further
significantly limit the utilization of the subject property. This statement should not be taken as a
guarantee or warranty that no such restrictions exist. Deed and title examinations by a competent
attorney on the property appraised is recommended if any questions regarding such restrictions
should arise. Deed restrictions are matters legal in character within the State of Texas, and only
title examination by a qualified attorney can result in an informed opinion. Should there be a
question regarding the compliance with any existing deed restrictions, we recommend a title
examination by a licensed and qualified title attorney to the extent assurances to this matter are
desired.
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Zoning Map
Subject Property
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TAX ANALYSIS
The Texas legislature has provided for a unified system of taxation for the assessment and
collection of real property taxes. In each county an appraisal district is established for the purpose
of listing and assessing all real estate within the county. Real property is presumably assessed at
100 percent of market value. Once the taxable value of the property is established by the appraisal
district, each of the individual taxing authorities within the county set their own tax rates. The
subject property is assessed by the Denton CAD. The following table depicts the taxing
jurisdictions and historical property tax rates pertaining to the subject property:
As the above table indicates, the overall tax rate for property located within this portion of Denton
County have been decreasing by 2.88 percent per year during the five year period. Tax rates are
anticipated to remain relatively flat in subsequent years. The subject account number and 2019
assessed value are as follows:
The tax summary reflects the land and improvements of the subject tract, which has a 2023
certified assessed value of $8,522,018. Based on a taxable value of $8,522,018, and an estimated
2023 tax rate (same as 2022) of $2.122825/$100 of assessed value, the subject property has a
tax expense of $180,908.
Compound
Rate of Change
Tax Authority 2022 2018-2022
Denton County $0.2255740 $0.2252780 $0.2249850 $0.2330860 $0.2175430 -0.90%
City of Denton 0.6204770 0.5904540 0.5904540 0.5658230 0.5606820 -2.50%
Denton ISD 1.5400000 1.4700000 1.4076000 1.3620000 1.3446000 -3.34%
Total Tax Rate $2.386051 $2.285732 $2.223039 $2.160909 $2.122825 -2.88%
Denton County Tax Rates
Improvement Total Market
Tax I.D. Number Land Value Value Value
556458 $1,132,560 $7,389,458 $8,522,018
Total Assessment:$1,132,560 $7,389,458 $8,522,018
Assessment PSF:$202.10 $1,343.54 $1,549.46
Tax Summary
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SUBJECT PROPERTY PHOTOGRAPHS
Looking northwest across the acquisition area
Looking north across the acquisition area
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SUBJECT PROPERTY PHOTOGRAPHS
Looking east across the acquisition area
Looking west across the acquisition area
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SUBJECT PROPERTY PHOTOGRAPHS
Looking north along Locust Street
Looking south along Locust Street
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SUBJECT PROPERTY PHOTOGRAPHS
Looking north along Locust Street
Looking south along Locust Street
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HIGHEST AND BEST USE ANALYSIS
The economic principles which affect the market value of real property also play a significant role
in forming the property's highest and best use. In all valuation assignments, value opinions are
based upon use. The highest and best use of a property provides the foundation for a thorough
investigation of the competitive positions of market participants. Consequently, highest and best
use can be described as the foundation upon which market value rests. The highest and best use
of a property is defined as follows:
The reasonably probable use of property that results in the highest value. The four
criteria that the highest and best use must meet are legal permissibility, physical
possibility, financial feasibility, and maximum productivity. 7
With regard to retail development, the highest and best use is generally regarded as that use
among all reasonable, alternative uses, which yields the highest present land value, after
payments are made for labor, capital, and coordination. It is to be recognized that in cases where
a site has existing improvements on it, the highest and best use may very well be determined to
be different from the existing use.
Analysis of the highest and the best use of a property as improved implies that the existing
improvement should be renovated or retained as is so long as it continues to contribute to the
total market value of the property, or until the return from a new improvement would more than
offset the cost of demolishing the existing building and constructing a new one. Furthermore, the
existing use will continue, unless and until land value in its highest and best use exceeds the total
value of the property in its existing use.
Implied within this definition is recognition of the contribution of that specific use to community
environment or to community development goals in addition to wealth maximization of individual
property owners. In appraisal practice, the concept of highest and best use represents the
premise upon which value is based. In the context of most probable selling price (market value)
another appropriate term to reflect highest and best use would be most probable use. The most
probable use is defined as follows:
1) The use to which a property will most likely be put based on market analysis and
the highest and best use conclusion. The most probable use is the basis for the
most probable selling price of the property
2) Highest and best use in the context of market value. 8
7 The Appraisal Institute, The Dictionary of Real Estate Appraisal (Sixth Edition), Chicago, Illinois, 2015, page 109.
8 Ibid. page 152.
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To test for the most feasible or the highest and best use for land as vacant all logical and feasible
alternatives must be analyzed. All alternative uses must meet four criteria. The criteria are as
follows:
1) The legal use of the site – what uses of the site are permitted under applicable
zoning ordinances and other legal restrictions.
2) The physical use of the site – what potential uses of the site are physically
possible.
3) The feasible use of the site – what possible and legally permissible use of the site
will produce a positive return.
4) The maximum productive use of the site – among the highest financially feasible
uses, the use that provides the highest rate of return, or value (given a constant
rate of return), is the highest and best use.
While some investors/developers seek to maximize their returns, most seem to operate on the
belief that the available information is too imperfect to permit optimization or maximization. It
appears that the typical investor is satisfied if their investment can be expected to return a yield
that will meet their standards. Thus, it is possible for more than one single use to be feasible for
a site if the uses meet an investment criteria of the typical investor/developer for a property.
Generally accepted professional appraisal practice dictates that in appraising improved property,
the highest and best use be estimated under two different premises. First, the highest and best
use of the site “as vacant and available” must be estimated. The second analysis estimates the
highest and best use of the property “as improved or proposed to be improved.”
Highest and Best Use of the Site As If Vacant
The first question to be answered, What uses are legally permissible? requires a review of the
zoning restrictions applicable to the site. As indicated in the Zoning and Land Use Restrictions
section of this report, the tract is currently zoned MD – Mixed- Use Downtown Core by the City of
Denton. Given the permitted uses under the current zoning ordinances, a retail oriented
development is considered to be a legally permissible use of the site.
Addressing the second question, What uses of the site are physically possible? requires a
review of the physical characteristics of the site. The subject tract is rectangular in shape and is
physically located at the northeast corner of Sycamore Street and Elm Street and has a municipal
address of 210 South Locust Street, Denton, Texas. The subject property consists of 1.0400
acres. The size of a parcel of land is important in terms of feasible development alternatives, and,
ultimately, the value of the land. Optimal size is that which allows the highest marginal returns on
investment after development. A tract of land which is too large is worth more in subdivided parcels
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whereas a tract which is too small for development is worth more when combined with contiguous
sites. A less than optimally sized small tract may be further constrained if contiguous tracts are
currently developed to their highest and best use. In such a case, assemblage may not be a viable
alternative. The immediate surrounding area is predominantly vacant land/residential uses.
This 1.0400 acre site would be physically feasible to develop due to its shape and size. The site
is generally level which is beneficial for most urban types of retail development. The site does not
appear to be affected by adverse easements or encroachments. None of the subject is located
within the flood plain. Furthermore, the topography of the site does not significantly limit its use.
Therefore, the highest and best use of the subject would be retail development.
Therefore, based on shape and the surrounding land uses, it is our reasoned opinion that
development for retail use is the most likely potential use of the site.
Answering the third and fourth questions, What uses are financially feasible? and What uses
are maximally productive? requires an analysis of potential income based on demand that could
be expected from all physically possible and legally permissible uses.
Upon inspection of the surrounding neighborhood, there has been a large amount of new retail
development within the immediate vicinity of the subject. The current land sales within the subject
neighborhood have been acquired for either speculative investments or retail development. Given
the subject’s location and surrounding land uses, retail use appears to be the most likely potential
use of the site and is considered to be financially feasible. Therefore, the highest and best use of
the site is for retail development.
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THE APPRAISAL PROCESS
The appraisal process represents a logical analysis of the factors that bear upon the present value
of real estate. In this process, three basic approaches are typically used by appraisers: 1) the
Cost Approach, 2) the Income Capitalization Approach, and 3) the Sales Comparison Approach.
The Cost Approach is based upon the proposition that an informed purchaser would pay no more
than the cost of producing a substitute property with the same utility as the subject. First, the
subject's site is valued (as if vacant) by comparing it to the sale of similar sites using the Direct
Sales Comparison Approach. The reproduction cost new is then estimated for the subject
improvements, and from this, an amount is deducted for depreciation from all causes to arrive at
a value via the Cost Approach.
The Sales Comparison Approach is based upon the proposition that an informed purchaser would
pay no more for a property than the cost to him of acquiring a similar property with the same utility.
In this approach, similar properties that have recently sold are compared to the subject. Notable
differences in the utilized comparables are adjusted to the subject in the process. Comparisons
are made and are typically based upon the terms of sale, age, location, size, financing, and
physical characteristics. The adjustments are abstracted from and/or otherwise supported to
represent the actions of buyers and sellers in the market. The value range that is indicated by
the adjusted comparable sales is correlated or reconciled into a final value opinion via this
approach.
The Income Capitalization Approach is the process in which the anticipated flow of future benefits
(dollar income or amenities) is discounted to a present worth figure through a capitalization or
direct discount procedure. All expenses attributable to the real estate are deducted from an
effective gross income estimate to arrive at forecasts of applicable net income streams. The net
income streams are then "capitalized" or discounted into value by market abstracted rates. The
purpose of ownership is to generate income and provide to the owner a sufficient return on his/her
investment to make the purchase of such a property attractive.
The subject property consists of 1.0400 acres land improved with a 39,500 square foot apartment
building. However, we determined that the use of the main improvements will not be affected by
the proposed acquisitions as the acquisitions are located a sufficient distance from the main
improvements and will not negatively affect internal circulation, drainage, ingress/egress, or utility
of the remainder. Therefore, we have provided a value of land via the Sales Comparison
Approach utilizing comparable land sales and a value of the site improvements affected by the
acquisition via the cost approach.
SECTION IV – LAND VALUATION
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LAND VALUATION
“Sales comparison is usually the preferred methodology for developing an opinion of site value.
When this method is used, most of the techniques for selecting comparable sales and making
adjustments that are described in Chapter 20 [of The Appraisal of Real Estate, Fifteenth Edition]
can be applied to site valuation. When there are not enough sales of similar parcels for the
application of sales comparison, alternative methods such as market extraction, allocation, land
residual analysis, and various income capitalization techniques may be used.” 9 All of these land
valuation procedures, which are summarized below, are derived from the three traditional
approaches to value.
– Sales Comparison – Sales of similar, vacant parcels are analyzed, compared, and
adjusted to provide a value indication for the land being appraised.
– Market Extraction – An estimate of the contributory value of improvements is deducted
from the total sale price of a property to arrive at an indicated land value for the
comparable. The indicated land values of the comparables are then compared to
provide a value indication for the land being appraised.
– Allocation – A ratio of site value to property value is extracted from comparable sales
in competitive locations and applied to the value of the improved subject property or
comparable properties to develop the site value.
– Direct Capitalization: Land Residual Analysis – The net operating income attributable
to the land is capitalized or the cost to construct an improvement is deducted from the
value as if completed to produce an indication of the land’s contribution to the total
property.
– Direct Capitalization: Ground Rent Capitalization – A market-derived capitalization rate
is applied to the ground rent of the subject property.
– Yield Capitalization: Discounted Cash Flow Analysis-Subdivision Development
Analysis – Direct and indirect costs and entrepreneurial incentive are deducted from
an estimate of the anticipated gross sales price of the finished lots or units, and the
net sales proceeds are discounted to present value at a market-derived rate over the
development and absorption period. If entrepreneurial incentive is not deducted as a
line-item expense, then the discount rate must reflect the full effect of any profit.
When sufficient market data is available, the best method of site valuation is the Sales
Comparison Approach. This method calls for comparison weighing and relating sales data to the
site being appraised. The data can be analyzed and the indications of adjustments for time,
location, physical utility and conditions of sale, can then be applied so as to result in a meaningful
value opinion for the subject site. For a sale to be truly comparable, the highest and best use of
the comparable land should be the same or similar to the appraised site. This is the method of
site valuation, which will be utilized in this report.
9 The Appraisal Institute, The Appraisal of Real Estate (Fifteenth Edition), Chicago, Illinois, 2020, pages 339.
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COMPARABLE LAND SALES PRESENTATION
The subject market was searched for sales of tracts of land most comparable to the subject. After
sales were selected for more analysis, the public records were researched and verification of the
details of the sales was obtained from parties knowledgeable concerning the sales. We then
analyzed the specific differences and made appropriate adjustments, abstracting these
adjustments from the market whenever possible. The final reconciliation of these adjusted sales
indicated a value of the subject property. A map depicting the location of the sales in comparison
to the subject property is located below.
Date Size Sales
Map #of Sale (Acres)Price/SF
1 Under Contract 0.805 $27.08
2 6/1/22 2.099 $30.00
3 5/20/21 1.010 $18.00
4 7/14/20 1.082 $27.57
S -1.040 Subject
Map Comparable Summary
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Location (Physical):SWC of Sycamore St and S Elm St
Denton, Texas
Legal Description:O T DENTON BLK 26 LOT 1 (N PT) O
T DENTON BLK 26 LOT 1(PT) O T
DENTON BLK 26 LOT 1(S75' OF
N157' OF E113') 7/305//
Grantor:SCHMITZ REALTY HOLDINGS, LLC
Grantee:N/A
Date of Sale:Under Contract Sales Price:
Recording Information:N/A Participant's Sale Terms:Cash to Seller
Property Rights Conveyed:Fee Simple Estate Cash Equivalent Price:
Conditions of Sale:Arm's Length Transaction Intended Use:Investment
Road Frontage:Sycamore St and S Elm St Size of the Tract:0.805 acres
Configuration:Near Rectangular 35,077 square feet
Flood Plain:0%Improvements:None
Topography:Level Utilities:All Available
Zoning:MD
Actual Sales Price Per Sq. Ft.:$27.08
Cash Equivalent Price Per Sq. Ft.:$27.08
Contact Person:Eric Schmitz Telephone Number:
Position:Listing Broker
COMMENTS
This property isphysically located at the southwest corner of Sycamore Street and South Elm Street in Denton, Denton County, Texas and is
currently under contract for $950,000 or $27.08 PSF.
COMPARABLE LAND SALE NUMBER 1
PROPERTY IDENTIFICATION
TRANSACTION DATA
$950,000
$950,000
PHYSICAL CHARACTERISTICS
UNITS OF COMPARISON
VERIFICATION
(972) 567-6754
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Location (Physical):NEC Loop 288 & McKinney St
Denton, Texas
Legal Description:A0927A MEP & PRR, Lot 24A (PT)
Grantor:7-Eleven Inc
Grantee:Quick N Clean TX-04 LLC
Date of Sale:June 1, 2022 Sales Price:
Recording Information:2022-81941 Participant's Sale Terms:Cash to Seller
Property Rights Conveyed:Fee Simple Estate Cash Equivalent Price:
Conditions of Sale:Arm's Length Transaction Intended Use:Car Wash
Road Frontage:Loop 288, McKinney St Size of the Tract:2.099 acres
Configuration:Irregular 91,441 square feet
Flood Plain:None Improvements:None
Topography:Level Utilities:All Available
Zoning:SC
Actual Sales Price Per Sq. Ft.:$30.00
Cash Equivalent Price Per Sq. Ft.:$30.00
Contact Person:Confidential Telephone Number:
Position:N/A
COMMENTS
This property was purchased to construct a full service car wash.
PHYSICAL CHARACTERISTICS
VERIFICATION
N/A
UNITS OF COMPARISON
PROPERTY IDENTIFICATION
TRANSACTION DATA
$2,743,230
$2,743,230
COMPARABLE LAND SALE NUMBER 2
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Location (Physical):E Line N Loop 288, N of McKinney St
Denton, Texas
Legal Description:A0927A MEP & PRR, Lot 24A (PT)
Grantor:100 North Loop 288 LLC
Grantee:Community Dental Partners LLC
Date of Sale:May 20, 2021 Sales Price:
Recording Information:2021-92005 Participant's Sale Terms:Cash to Seller
Property Rights Conveyed:Fee Simple Estate Cash Equivalent Price:
Conditions of Sale:Arm's Length Transaction Intended Use:Dental Office
Road Frontage:Loop 288 Size of the Tract:1.010 acres
Configuration:Rectangular 43,995 square feet
Flood Plain:None Improvements:None
Topography:Level Utilities:All Available
Zoning:SC
Actual Sales Price Per Sq. Ft.:$18.00
Cash Equivalent Price Per Sq. Ft.:$18.00
Contact Person:Virgil Strange Telephone Number:
Position:Representative of the seller
COMPARABLE LAND SALE NUMBER 3
PROPERTY IDENTIFICATION
COMMENTS
This property was purchased fto construct a dental office.
$791,910
PHYSICAL CHARACTERISTICS
TRANSACTION DATA
$791,910
UNITS OF COMPARISON
VERIFICATION
(940) 735-1252
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Location (Physical):NWC Loop 288 & McKinney St
Denton, Texas
Legal Description:Sonic & Murphy Oil Addition, Blk A, Lot
7R1
Grantor:Dennis J Koop
Grantee:Murphy Oil USA Inc
Date of Sale:July 14, 2020 Sales Price:
Recording Information:2020-101318 Participant's Sale Terms:Cash to Seller
Property Rights Conveyed:Fee Simple Estate Cash Equivalent Price:
Conditions of Sale:Arm's Length Transaction Intended Use:Convenience Store
Road Frontage:Loop 288, McKinney St Size of the Tract:1.082 acres
Configuration:Near Rectangular 47,145 square feet
Flood Plain:None Improvements:None
Topography:Level Utilities:All Available
Zoning:SC
Actual Sales Price Per Sq. Ft.:$27.57
Cash Equivalent Price Per Sq. Ft.:$27.57
Contact Person:Nathan Tune Telephone Number:
Position:Broker
$1,300,000
$1,300,000
PHYSICAL CHARACTERISTICS
UNITS OF COMPARISON
COMPARABLE LAND SALE NUMBER 4
PROPERTY IDENTIFICATION
TRANSACTION DATA
VERIFICATION
(940) 381-2220
COMMENTS
This property was purchased to construct a convenience store with gas pumps.
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LAND SALES ANALYSIS
The process of comparing similar market sales to the subject property is fundamental to the sales
comparison approach, and usually provides the most credible and reliable indication of value. If
a comparable property has an element of comparison that is superior to the subject property, a
downward adjustment is made to the comparable sale. If the element of comparison is inferior,
then an upward adjustment is made. The adjustment process is not an exact science. Experience,
knowledge and objectivity are required on the part of the appraiser for the application of the
appropriate level of adjustment. Competent analysis leads us to a narrow range of variance
among the adjusted comparable sales, and to a high degree of confidence in reconciliation. The
analyses of the adjustments we considered relevant are found in the following paragraphs.
Financing Terms
All of the comparable land sales were consummated with the sellers effectively receiving cash in
exchange for their consideration in the property; therefore, no adjustments were required for
advantageous seller financing.
Property Rights Conveyed
This adjustment involves the type of real property interest that is conveyed in a sales transaction.
All of the comparable transactions conveyed fee simple ownership rights; thus, no adjustments
were required for this factor.
Conditions of Sale
Adjustments for this item usually reflect the motivation of the buyer and seller involved with a
transaction. Adjustments would be necessary for transactions where the seller wants to quickly
liquidate his assets or where there is an atypical financial, business, friend or family relationship
between the principals involved which affect the selling price of the property. Comparable 1 is
currently under contract and the sales price was verified with the listing broker. Therefore,
Sales
Sale Location Date Size Flood Price
No.(Physical)of Sale (Acres)Utilities Zoning Topography Plain PSF Intended Use
1 SWC of Sycamore St and S Elm St Under Contract 0.805 All Available MD Level 0%$27.08 Investment
Denton, Texas
2 NEC Loop 288 & McKinney St 6/1/22 2.099 All Available SC Level None $30.00 Car Wash
Denton, Texas
3 E Line N Loop 288, N of McKinney St 5/20/21 1.010 All Available SC Level None $18.00 Dental Office
Denton, Texas
4 NWC Loop 288 & McKinney St 7/14/20 1.082 All Available SC Level None $27.57 Convenience Store
Denton, Texas
Subject:NEC of Sycamore ST and S Elm St -1.040 All Available MD Level 0%--
Denton, Texas
Summary of
Comparable Sales
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Comparable 1 will not be adjusted. According to brokers in the area, Comparable 2 had been on
the market for several years before it sold. This was due to the fact that it was originally priced
over market and the ownership, 7-Eleven, refused to adjust the asking price as they had paid a
premium for the site. Brokers had submitted bids over that time period at less than asking price
but were rejected. A purchaser was finally found that paid the asking price but it was still
considered to be over market. Therefore, a negative adjustment of 10% will be applied to
Comparable 2 (-$3.00 per square foot). Comparables 3 and 4 were reported to be arm's-length
sales and did not involve any unusual conditions. Thus, no adjustments are necessary for these
sales.
Expenditures After Sale
This adjustment accounts for any expenses the purchaser of the property occurs immediately
after the purchase of the property. Some examples of these items could include environmental
clean-up, demolition costs, deferred maintenance, HVAC replacement/repair, renovations,
parking lot repair/replacement, cosmetic upgrades, etc... Adjustments for this item usually reflect
the motivation of the buyer and seller involved with a transaction. Adjustments would be
necessary for transactions where the buyer is aware that such expenditures after the sale must
occur in order to operate the property sufficiently. Any necessary adjustments for Expenditures
After Sale have been made within the individual Comparable write-ups. Therefore, no further
adjustments are necessary.
Market Conditions
This adjustment is generally made after the other transactional adjustments have been made
(property rights conveyed, financing, conditions of sale, and expenditures after sale). This
adjustment addresses potentially differing market conditions between the subject property (date
of appraisal), and the sales dates of the Comparables. As a test, the sales adjusted prices when
compared to the subject were chronologically arrayed by sale date and only adjusted for the
appropriate physical conditions in order to determine if adjustments for changing market
conditions is warranted.
The following table depicts the Price/Sq. Ft. for each comparable which has been adjusted for the
other transactional adjustments (property rights conveyed, financing, conditions of sale, and
expenditures after sale). The % Physical Adjustment column indicates the total adjustments made
for all physical characteristics (location, size, corner, utilities, topography zoning, flood plain, etc.)
as shown in the adjustment grid at the conclusion of this section of the report. The Adjusted
Price/Sq. Ft. is calculated by applying the % Physical Adjustment for each sale to its Price/Sq. Ft.
By analyzing the comparable sales adjusted prices per square foot after all other adjustments
have been made, trends in land prices over the time period may become apparent. However,
given the small sample size, the appraisers’ judgment is also relied upon based upon knowledge
gained from experience in the market over this time period.
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In closely analyzing the market Comparables, there is not a clear trend in sales prices over this
time period. However, market conditions within the area have been improving at a rate of
approximately 4 to 6 percent per year. Therefore, each Comparable will be adjusted upwards by
5 percent per year.
Location/Access
The axiom that “location is the most important physical characteristic of real estate” suggests that
this component warrants paramount consideration in the adjustment process. The subject
property is physically located at the northeast corner of Sycamore Street and Elm Street and has
a municipal address of 210 South Locust Street, Denton, Texas. Comparable 1 is located in a
similar location to the subject and will not be adjusted. Comparables 2, 3, and 4 have superior
exposure along Loop 288 and McKinney Street. Therefore, Comparables 2, 3, and 4 will be
adjusted downward 15 percent.
Size
The subject comprises 1.0400 acres or 45,302 square feet of land area. Typically, larger tracts
sell for less per unit than smaller sites. In reviewing market trends and the data set, the market
appears to recognize a difference in price for tracts substantially different in size. A market
observation witnessed throughout the Texas market area and most metropolitan areas in the
southwest supports an adjustment of five to fifteen percent for each halving/doubling in size. In
this instance a five percent adjustment for each halving/doubling in size will be utilized.
Comparable Date Unadjusted Physical %Adjusted
Number of Sale Price/Sq. Ft.*Adjustment Price/Sq. Ft.
Comparable 1 Under Contract $27.08 -2%$26.54
Comparable 2 June 1, 2022 $27.00 -10%$24.30
Comparable 3 May 20, 2021 $18.00 0%$18.00
Comparable 4 July 14, 2020 $27.57 -15%$23.43
*Inclusive of any necessary transactional adjustments
Market Conditions Comparison
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The following table illustrates the size adjustments based upon a market derived 5 percent
adjustment per each doubling/halving in size for the land market in the vicinity.
Corner
A tract of land with corner influence can, in many cases, command a higher price per unit than a
tract without corner influence. Corner influence typically becomes a more significant factor on
price with retail and commercial properties situated along two primary thoroughfares in
significantly developed urban areas. In order to abstract the appropriate adjustment for the
presence of a corner, the following paired sales analysis will be utilized. In each of the paired
sales, a tract with corner frontage has been paired with a similar tract without corner frontage.
0%-25%0.00%-1.25%
25%-50%1.25%-2.50%
50%-100%2.50%-5.00%
100%-200%5.00%-7.50%
200%-300%7.50%-10.00%
300%-500%10.00%-12.50%
0%-25%0.00%--2.50%
25%-50%-2.50%--5.00%
50%-75%-5.00%--10.00%
75%-more than -10.00%-or moreLargerSmallerIndicated Size Adjustments with a 5%
Adjustment per Doubling / Halving
Variance of Comp
from Subject
Indicated Adjustment
Range
Comparable Comparable Subject % Difference Adj. Per Indicated
Number Size (Acres)Size (Acres)In Size Halving/Doubling Adjustment
Comparable 1 0.805 1.040 -23%5%-2%
Comparable 2 2.099 1.040 102%5%5%
Comparable 3 1.010 1.040 -3%5%0%
Comparable 4 1.082 1.040 4%5%0%
Adjustment for Size
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Road Size Price/
Frontage Location Date (Acres)Sq. Ft.
No1 N Line of US 380, E of Oak Grove Ln, Little Elm, TX September 2016 0.888 $16.73
Yes NWC of US 380 & Oak Grove Ln, Little Elm, Texas April 2016 1.073 $19.47
Indicated Adjustment:16.4%
Corner Paired Comparison #1
1This sale has been adjusted downward 2%for increasing market conditions and downward 2%for the difference in size ($17.42/SF x
0.98 x 0.98 = $16.73).
Corner Tract
Non-Corner Tract
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Road Size Price/
Frontage Location Date (Acres)Sq. Ft.
No1 N Line of US 380, W of Hardin Blvd, McKinney, TX August 2017 4.840 $22.80
Yes NWC of US 380 & Hardin Blvd, McKinney, TX July 2019 2.105 $25.00
Indicated Adjustment:9.6%
1This sale has been adjusted upward 8%for increasing market conditions and upward 6%for the difference in size ($19.92/SF x 1.08 x
1.06 = $22.80).
Corner Paired Comparison #2
Non-Corner Tract
Corner Tract
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These paired comparisons indicate a range of adjustment of approximately +10 to +16 percent.
Therefore, an upward adjustment of 15 percent is considered reasonable for the difference
between corner and non-corner tracts. The subject property is located on a corner. Like the
subject, Comparables 1, 2, and 4 receive corner exposure and will not be adjusted. Comparable
3 does not benefit from corner exposure and will be adjusted upward 15 percent.
Utilities
The next consideration is for the location and adequacy of utilities. The subject currently has
access to all utilities. All of the Comparables have similar access to utilities and will not be
adjusted.
Size Price/
Corner Location Date (Acres)Sq. Ft.
No1 N Line of US 380, E of Hardin Blvd, McKinney, Texas April 2018 1.171 $22.38
Yes NWC of US 380 & Hardin Blvd, McKinney, Texas July 2019 2.105 $25.00
Indicated Adjustment:11.7%
1This sale has been adjusted upward 5% for increasing market conditions and downward 4% for the difference in size ($22.20/SF x 1.05 x
0.96 = $22.38).
Corner Paired Comparison #3
Non-Corner Tract
Corner Tract
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Topography
This adjustment takes into consideration the topography (terrain) of the subject property and how
developable the site is. The subject has a generally level topography. All of the Comparables have
similar topographical considerations and no adjustments will be made.
Zoning
The zoning classification a property possesses dictates the legally permissible uses that a site
can be developed with, and hence, has a major influence on the value of a property. The subject
site is currently zoned MD – Mixed- Use Downtown Core by the City of Denton. All of the
Comparables have similar zoning restrictions, allowing similar developments to the highest and
best use of the subject; therefore, they will not be adjusted.
Flood Plain
The next consideration is for the adverse influence of a tract being situated within the 100- or 500-
year flood plain. None of the subject tract lies in the 100-year flood plain. All of the Comparables
are located outside of the flood plain and will not be adjusted.
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CONCLUSION OF LAND VALUE
Located below is an adjustment grid for the subject tract, followed by the range, mean (average),
and standard deviation of the adjusted sales prices per square foot.
Sale Number 1 2 3 4
Sales Price/SF $27.08 $30.00 $18.00 $27.57
Financing Terms 0.00 0.00 0.00 0.00
Property Rights Conveyed 0.00 0.00 0.00 0.00
Conditions of Sale 0.00 -3.00 0.00 0.00
Expenditures After Sale 0.00 0.00 0.00 0.00
Market Conditions 0.00 1.89 2.16 4.41
Conditions Adj. Price/SF $27.08 $28.89 $20.16 $31.98
Location 0%-15%-15%-15%
Size -2%5%0%0%
Corner 0%0%15%0%
Utilities 0%0%0%0%
Topography 0%0%0%0%
Zoning 0%0%0%0%
Flood Plain 0%0%0%0%
Total Adjustment -2%-10%0%-15%
Adjusted Price/SF $26.54 $26.00 $20.16 $27.18
for Comparable Sales
Adjustment Grid
$/SF
Range $20.16 -$27.18 $26.00 -$26.54 -
Mean (Average)
Standard Deviation $0.38
Data Without Data with Absolute
All Data High and Low Extremes Adjustments <20%
$26.00 $27.18
$24.97 $26.27 $26.57
$3.24 $0.59
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All of the Comparables had a mean of $24.97 per square foot, while the mean of data without
high and low extremes is $26.27 per square foot, and the data with the least absolute adjustments
(<= 20%) had a mean of $26.57 per square foot. Additionally, according to Mr. Marc Moffit of
Crown Realty and Mr. Eric Schmitz of Schmitz Realty, the downtown Denton area is a highly
desirable location and vacant land, depending on the size of the tract, would more than likely sell
for approximately $25.00 to $35.00 PSF. Therefore, given the foregoing analysis, a market value
opinion of $27.00 per square foot is considered to be reasonable for the subject tract. Thus, the
“as is” market value opinion for the subject property, as of the effective date of the appraisal is
calculated below:
1.0400 acres (45,302 SF) x $27.00/SF = $1,223,154
Additionally, the subject property is improved with site improvements (concrete paving, a medium
tree, a large tree, and irrigated sod) which lie within the acquisition area. Based upon our
measurements taken via Google Earth, the total size of the concrete pavement located within the
proposed sidewalk easement is 820 square feet, 1 medium tree, 1 large tree, and approximately
700 square feet of irrigated sod. Therefore, the contributory value of the concrete paving that is
located in the acquisition will be added to the value of the land to arrive at a value opinion of the
whole property.
According to our conversations with Tree Land Nursery and other market participants, the total
replacement cost for a medium tree is $1,000 per unit and for a large tree is $1,400 per unit. Upon
including an entrepreneurial profit incentive of 20 percent, total replacement cost new for the trees
is $1,200 per unit (medium tree) and $1,680 per unit (large tree). Thus, the total replacement
cost for the medium and large tree is $2,880.
According to Marshall & Swift Cost Manual, the total replacement cost for irrigated landscaping is
$5.30 per square foot. Upon including an entrepreneurial profit incentive of 20 percent, total
replacement cost new for the landscaping is $6.36 per square foot. Based upon aerial
measurements taken via Google Earth, approximately 700 square feet of irrigated sod is located
within the proposed sidewalk easement. Thus, the total replacement cost for the irrigated sod is
$4,452.
According to Pavecon, the replacement cost of concrete paving is approximately $11.00/SF. Upon
including an entrepreneurial profit incentive of 20 percent, total replacement cost new for the
landscaping would equate to $13.20/SF. Approximately 826 square feet of concrete is located in
the proposed sidewalk easement; therefore, total replacement cost new would be $10,903 (820
SF x $13.20/SF cost). The concrete is of average quality and is in average condition and is
considered to have an effective age of 10 years and useful life of 30 years. Therefore, depreciation
has been estimated at 33 percent of replacement costs new (10 year age 30 year life), which
equates to $7,305 ($10,824 x 1 – 33%).
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Upon adding the contributory value of the site improvements within the acquisition of $14,637
($2,880 + $4,452 + $7,305) to the land value of the whole subject tract ($1,223,154), a market
value of the whole property of $1,237,791 results.
SECTION V - VALUATION CONCLUSION
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FINAL OPINION OF VALUE
VALUE OF THE WHOLE PROPERTY
The subject property consists of 1.0400 acres (45,302 square feet) of land with site improvements.
However, only the land and site improvements in the acquisition area are being valued. Therefore,
the market value of the whole property before the proposed acquisitions as of the effective date
of appraisal (September 24, 2023) was:
"As Is" Market Value of the Whole Property
($1,237,791)
VALUE OF THE PARTS TO BE ACQUIRED
The portion of the site from which property rights are proposed to be acquired by the City of
Denton involves a 0.0350 acre (1,526 square foot) sidewalk easement.
Value of Proposed Sidewalk Easement:
The portion of the site from which the proposed sidewalk easement is being taken is 0.0350 acres
(1,526 square feet). The easement acquisition encumbers some, but not all of the property rights
of the land (fee simple interest) comprising the easement.
In addition, there are various site improvements located in the acquisition area. The site
improvements in the proposed sidewalk easement consist of 1 medium and 1 large tree, 700
square feet of irrigated sod, and 826 square feet of concrete paving. Therefore, the site
improvements aforementioned will be included in the value of the proposed sidewalk easement.
The Easement Valuation Matrix located as follows provides a guide for allocating value of the fee
simple interest between the easement estate (dominant estate) and the landowner’s estate
(servient estate). This exhibit was provided by an article entitled “Valuation of Easements” by
Donald Sherwood, SR/WA, published in the November/December 2014 edition of Right of Way
Magazine.
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The easement will be used for street/sidewalk purposes. This easement is assumed to permit
ingress/egress by the property owner after the acquisition; however, the owner would not be
permitted to construct vertical improvements within the easement area. The easement is not
located across a non-usable area of the tract. Furthermore, given its proposed use as a sidewalk
easement, nearly all property rights will be conveyed to the City of Denton. Therefore, utilizing
the easement valuation matrix above as a guide, the easement is considered to comprise 95
percent of the fee simple value of the encumbered land and will be valued as follows:
Sidewalk Easement Area: $27.00/SF x 1,526 SF x 95% = $39,142
Lastly, the value of the site improvements (concrete paving) located in the easement acquisition
area will be included in the total value of the acquisition and were estimated previously to
contribute $14,637. Therefore, the value of the sidewalk easement acquisition totals:
$39,142 (Land Value) + $14,637 (Site Improvements) = $53,779
DAMAGES/ENHANCEMENTS
State law requires that enhancements to a remainder property in a condemnation acquisition be
determined and used as an offset to any damages to the remainder property to calculate net
damages. The highest and best use is for retail development of the site. The proposed acquisition
does not damage the remainder of the site. Thus, the highest and best use after the proposed
acquisition is retail development. Furthermore, the improvements are considered to be a sufficient
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distance from the proposed acquisition; therefore, it is determined that there are no net damages
to the improvements or the remainder property. State law requires that enhancements to a
remainder property in a condemnation acquisition be determined and used as an offset to any
damages to the remainder property to calculate net damages. No enhancements are evident as
a result of this project to the subject property.
COSTS TO CURE
Costs to cure involve the contributory value of the site improvements taken and costs to relocate
site improvements which can be salvaged. No improvements impacted by the proposed
acquisition seem to be salvageable.
Value of the Whole Property:$1,237,791
Value of the Part Acquired (0.035 Acre Sidewalk Easement):$53,779
Remainder Before Acquisition:$1,184,012
Remainder After Acquisition:$1,184,012
Enhancements:$0
Damages:$0
Cost to Cure:$0
Value of the Part Acquired (0.035 Acre Sidewalk Easement):$53,779
Total Recommended Compensation:$53,779
Opinions of Recommended Compensation
SECTION VI - CERTIFICATION & ASSUMPTIONS & LIMITING CONDITIONS
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CERTIFICATION
The undersigned hereby certifies that, to the best of their 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 the personal, impartial unbiased professional
analyses, opinions, and conclusions of the undersigned.
3) Neither the undersigned, nor any associate of the appraiser, have any present or
prospective interest in the property that is the subject of this report, and have no personal
interest with respect to the parties involved.
4) The undersigned have no bias with respect to the property that is the subject of this report
or to the parties involved with this assignment.
5) The engagement of the undersigned in this assignment was not contingent upon developing
or reporting predetermined results.
6) All analyses, opinions, and conclusions were developed, and this report has been prepared,
in conformity with the Uniform Standards of Professional Appraisal Practice.
7) The reported analyses, opinions, and conclusions were developed, and this report has been
prepared, in conformity with the Code of Professional Ethics and Standards of Professional
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) No one provided significant real property appraisal assistance in the preparation of this
appraisal report to the person(s) signing this certification.
10) As of the date of this report, Mitchell B. Todd, MAI, Michael A. Keane, MAI, Michael C. Todd,
MAI have completed the continuing education program for Designated Members of The
Appraisal Institute.
11) The undersigned's 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.
12) The appraisal report was not based on a requested minimum valuation, a specific valuation,
or the approval of a loan.
13) Neither the undersigned nor any associate of the appraisers considered race, color, religion,
sex, national origin, handicap, or familial status in determining the value of the subject
property.
14) Todd Property Advisors, and Mitchell B. Todd, MAI, Michael A. Keane, MAI, and Jonathan
D. Moncrief have rendered no services as an appraiser or in any other capacity regarding
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this property within the three-year period immediately preceding acceptance of this
assignment.
15) Jonathan D. Moncrief made a personal inspection of the property that is the subject of this
report on September 24, 2023. Mitchell B. Todd, MAI and Michael A. Keane, MAI did not
conduct a physical inspection of the property.
16) In our professional opinion, and after careful consideration of the various factors influencing
this appraisal, the following illustrates the “as is” market value for the subject property and
the recommended compensation, as of the effective date of appraisal, September 24, 2023:
17) Hypothetical Condition: According to the 2020-2023 USPAP, a hypothetical condition
is “a condition, directly related to a specific assignment, which is contrary to what is
known by the appraiser to exist on the effective date of the assignment results, but
is used for the purpose of analysis.” There were no hypothetical conditions utilized
within this report.
18) Extraordinary Assumption: According to the 2020-2023 USPAP, an extraordinary
assumption is “an assignment-specific assumption as of the effective date regarding
uncertain information used in an analysis which, if found to be false, could alter the
appraiser’s opinions or conclusions.” An extraordinary assumption has been made
that the acquisitions by the City of Denton will not permanently limit ingress/egress
to and from the subject property. The use of this assumption could affect the results
of this assignment and if found to be incorrect could necessitate re-analysis.
Value of the Whole Property:$1,237,791
Value of the Part Acquired (0.035 Acre Sidewalk Easement):$53,779
Remainder Before Acquisition:$1,184,012
Remainder After Acquisition:$1,184,012
Enhancements:$0
Damages:$0
Cost to Cure:$0
Value of the Part Acquired (0.035 Acre Sidewalk Easement):$53,779
Total Recommended Compensation:$53,779
Opinions of Recommended Compensation
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Appraisal Institute General Demonstration of Knowledge - Capstone Program
Admissions Department March 14, 2018 Page Two Based on the data rendered via a physical inspection of the subject, as well as other pertinent information, it is my opinion that the market value of the fee simple interest in the subject property, as of March 6, 2018, is: “As Is" Market Value: ONE MILLION SEVEN HUNDRED FORTY THOUSAND DOLLARS ($1,740,000) Such opinion is subject to the general assumptions and limiting conditions found on page
?????. This letter must remain attached to the report, which contains ????? pages, in order for
the value opinion set forth to be considered valid. Particulars and supporting data are provided
in the accompanying report.
Respectfully submitted,
Michael A. Keane
State Certification #TX-1380384-G
michaelakeane@me.com
Respectfully submitted,
Mitchell B. Todd, MAI Michael A. Keane, MAI
President Senior Vice President
State Certification #TX-1323514-G State Certification #TX-1380384-G
mitchell@toddpa.com michael@toddpa.com
Jonathan D. Moncrief
Appraiser Associate
State Certification #TX- 1381122-G
jon@toddpa.com
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ASSUMPTIONS AND LIMITING CONDITIONS
1) No responsibility is assumed for matters legal in character or nature, nor matters of survey, nor of any
architectural, structural, mechanical or engineering nature. No opinion is rendered as to the title of the subject
property, which is presumed to be good and marketable. The legal description is assumed to be correct as
used in this report.
2) The property is appraised as though free and clear of any or all liens or encumbrances unless stated.
3) The property is assumed to be under responsible ownership and competent management.
4) The appraisers have not independently verified all of the information furnished or assumptions made with
respect to the appraisal unless otherwise indicated and therefore is not responsible for their content or their
effect on the market value of the property. The information furnished by others is believed to be reliable.
However, no warranty is given for its accuracy.
5) All engineering is assumed to be correct. The maps or other illustrative materials included in this report are
intended only to depict spatial relationships. They are not measured surveys nor measured maps, and the
appraiser is not responsible for cartographic or surveying errors. Dimensions and areas of the subject property
and of the comparables were obtained by various means and are not guaranteed to be exact.
6) The appraisal is based on there being no hidden, unapparent, or apparent conditions of the property site,
subsoil, or structures or toxic materials which would render it more or less valuable. No responsibility is
assumed for any such conditions or for any expertise or engineering to discover them.
7) The appraisal is based on the premise that there is full compliance with all applicable federal, state and local
environmental regulations and laws unless otherwise stated in this report.
8) This appraisal is based on the assumption that all applicable zoning, building, and use restrictions for all types
have been complied with, unless a nonconformity has been stated, defined, and considered in report.
9) The assumption has been made that all required licenses, consents, permits or other legislative or
administrative authority, local, state, federal and/or private entity or organization have been or can be obtained
or renewed for any use considered in the value estimate.
10) Unless otherwise stated in this report, the existence of hazardous substances, including without limitation
asbestos, polychlorinated biphenyls, petroleum leakage, or agricultural chemicals, which may or may not be
present on the property, or other environmental conditions, were not called to the attention of nor did the
appraiser become aware of such during the appraiser's inspection. The appraisers have no knowledge of the
existence of such materials on or in the property unless otherwise stated. The appraisers, however, are not
qualified to test such substances or conditions. If the presence of such substances, such as asbestos, urea
formaldehyde, foam insulation, or other hazardous substances or environmental conditions, may affect the
value of the property, the value estimated is predicated on the assumption that there is not such condition on
or in the property or in such proximity thereto that it would cause a loss in value. No responsibility is assumed
for any such conditions, nor for any expertise or engineering knowledge required to discover them. The client
is urged to retain an expert in the field of environmental impacts upon real estate if so desired.
11) This appraisal is based on the assumption that the use of the land and improvements is within the boundaries
of the subject property and there is no trespass or encroachment unless otherwise noted in the report.
12) The distribution of the total valuation in this report between land and improvements applies only under the
existing program of utilization. The separate valuations for land and building must not be used in conjunction
with any other appraisal and are invalid if so used.
13) Possession of this report or any copy thereof does not carry with it the right of publication, nor may it be used
for other than its intended use. The Bylaws and Regulations of the Appraisal Institute require each Member
and Candidate to control the use and distribution of each appraisal report signed by such Member or Candidate;
this appraisal report shall not be given to third parties without the prior written consent of the signatory of this
appraisal report. Neither all nor any part of this appraisal report shall be disseminated to the general public by
use of advertising media, public relations, news, sales or other media for public communication without the
prior written consent of the appraisers.
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14) The appraisers are not obligated to provide any other services, including but not limited to, testimony in court
or before any other body charged with interpretation of enforcement of the appraisal.
15) No portion of the appraisal may be reproduced in whole or in part without the prior written consent of the
appraisers. The validity of the appraisal is expressly conditioned upon consideration of its entirety.
16) Due to the nature of real estate valuation and the complexities of external and internal factors which dictate the
market value of any real estate, and the rapid changes and fluctuations with respect to the valuation of real
estate, the opinion of the appraisers set forth in the appraisal concerning the market value of the property is
reliable as of the effective date and should not be considered as reliable at any time thereafter.
17) The appraisers make no guarantee or warranty, whether implied or expressed, concerning the market value
set forth in the appraisal. The appraisal merely sets forth the appraisers opinion of such market value based
upon information obtained by the appraisers and assumptions made by the appraisers with respect to the
property.
18) The appraisers assume 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.
19) Subsurface Rights (minerals and oil) were not considered in this appraisal unless otherwise specifically stated.
20) The State of Texas does not have full disclosure laws regarding real estate transactions. Therefore, the
appraisers necessarily confirmed all sales and rental comparables with brokers, property managers, mortgage
brokers, grantors, grantees and other parties familiar with the transaction. The appraiser’s data is limited by
the accuracy of the information supplied by the aforementioned individuals. Whenever possible, the information
was verified by county records.
21) The value conclusion within this report is contingent upon the site being in full compliance with city codes, and
that no contamination has occurred at the site. A Phase I Environmental Study was not provided, and the
appraisers accept no responsibility as to the current status of property with respect to environmental
contaminants. It is recommended that if a Phase I study has not been performed, that an expert in this field be
engaged to identify any hazardous materials and substances existing on the property.
22) It is assumed there is full compliance with all requirements of Title III, of the Americans with Disabilities Act
(ADA) which became effective January 26, 1992 unless non-compliance is stated, defined, and considered in
the appraisal report. No responsibility is assumed by the appraisers for any such conditions, or for any expertise
or architectural/design knowledge and cost required to identify such non-compliance.
23) As used in professional appraisal practice the term “inspection” is “a personal observation of the exterior and/or
interior of the real property that is the subject of an assignment. The purpose of an appraiser’s inspection is to
identify the property characteristics that are relevant to the assignment, such as amenities, general physical
condition, and functional utility.” Inspection is considered a term of art in the appraisal profession and does not
have the same meaning as it might have in other professions such as engineering or architecture or in other
design or construction related professions. Additionally, it does not infer any obligation to investigate.
24) Hypothetical Condition: According to the 2020-2023 USPAP, a hypothetical condition is “a
condition, directly related to a specific assignment, which is contrary to what is known by the
appraiser to exist on the effective date of the assignment results, but is used for the purpose of
analysis.” There were no hypothetical conditions utilized within this report.
25) Extraordinary Assumption: According to the 2020-2023 USPAP, an extraordinary assumption is
“an assignment-specific assumption as of the effective date regarding uncertain information used
in an analysis which, if found to be false, could alter the appraiser’s opinions or conclusions.” An
extraordinary assumption has been made that the acquisitions by the City of Denton will not
permanently limit ingress/egress to and from the subject property. The use of this assumption
could affect the results of this assignment and if found to be incorrect could necessitate re-
analysis.
SECTION VI – ADDENDUM
QUALIFICATIONS OF MITCHELL B. TODD, MAI
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EXPERIENCE
1/94 to Present President Todd Property Advisors, Real Property Analysts, Inc.:
Dallas, Texas
7/92 to 1/94 Vice President - Beer-Wells-Vaughan, Commercial Property Analysts, Inc.:
Dallas, Texas
6/86 to 7/92 Vice President- Noyd & O’Connell, Inc.: Real Estate Appraisers & Consultants:
Dallas, Texas (2/90-7/92): Houston, Texas (6/86-1/90)
During Mr. Todd's tenure as a real estate appraiser, he has prepared numerous valuations on a variety of high profile and
complex income producing real estate developments. Additionally, Mr. Todd has been involved in the valuation of
numerous single family and multi-family residential properties during his career. These assignments required analytical,
communication, and problem-solving skills which Mr. Todd has continually enhanced since his inception into the
profession. During the last several years, as the Dallas/Fort Worth residential market has expanded and mortgage interest
rates have been at attractive levels, Mr. Todd has gained significant experience in the appraisal of single-family residential
properties for the purpose of obtaining mortgage financing.
Some of the more complex assignments in which Mr. Todd has completed appraisals involve numerous parcels
assembled by the City of Dallas for the American Airlines Center and the new performing arts center in the Arts District;
Reunion Arena and adjacent parking facilities, The Grand Hotel and the Mercantile Complex in the Dallas CBD; the
proposed Bank One Building in the Fort Worth CBD; the Hughes Aircraft Facility in Las Cruces, New Mexico; the Stephens
Graphics Manufacturing Facility in Dallas, Texas; the Radisson Inn Tulsa Airport in Tulsa, Oklahoma, the Trophy Club
Development (all remaining lots, acreage, and disputed acreage) of Denton County, Texas; the Eldorado Subdivision (all
remaining lots and acreage) in McKinney, Texas; the Stonebriar Community Church in Frisco, Texas; the Trinity Terrace
Retirement Center in Fort Worth, Texas; the San Antonio Savings Association Headquarters Building in San Antonio,
Texas and numerous portfolios of credit tenant retail projects, office buildings, charter schools, full service car washes and
extended stay lodging facilities across Texas and the United States.
PROFESSIONAL LICENSE AND AFFILIATIONS
Designated member of The Appraisal Institute - MAI #9379.
State Certified General Real Estate Appraiser
Texas Certificate # TX-1323514G
Oklahoma Certificate # 1287CGA
Arkansas Certificate # CG3379
Registered Property Tax Consultant, State of Texas (Registration #00002555). Licensed Broker by the Texas Real
Estate Commission (License #0364803) Member - Society of Texas A&M Real Estate Professionals
EDUCATION
Master's Degree - Land Economics and Real Estate, Texas A&M University, 1986.
Bachelor of Science Degree - Agricultural Economics, Texas A&M University, 1984.
The Land Economics and Real Estate curriculum at Texas A&M University is one of only three degree programs in the
United States which have been sanctioned by The Appraisal Institute for post-graduate studies in commercial real estate
appraisal. During his pursuit of the Master's degree, Mr. Todd served as a graduate teaching assistant for several
undergraduate courses, including real estate appraisal curriculum. Mr. Todd received the Master's degree in May 1986.
Prior to his post-graduate studies, Mr. Todd received a Bachelor of Science Degree in December 1984, graduating with
Magna Cum Laude honors.
The Appraisal Institute courses completed by Mr. Todd include: Standards of Professional Appraisal Practice, Principles of
Appraisal, Basic Valuation, Capitalization Theory - Part A, Capitalization Theory - Part B, Case Studies in Real Estate
Valuation, Report Writing and Valuation Analysis, and received a passing grade on both the Comprehensive Examination
and the Demonstration Report. Mr. Todd was awarded the designation of MAI in May 1992. The Appraisal Institute
conducts a program of continuing professional education for its designated members. MAI and SRA members who meet
the minimum standards of the program are awarded periodic educational certification. Mr. Todd is currently certified under
this program. Mr. Todd serves on the Region 8 Ethics and Counseling Regional Panel of the Appraisal Institute. Other
college level real estate courses and seminars completed by Mr. Todd include: Real Estate Development Analysis, Real
Property Valuation, Building Construction Practices, Rural Real Estate Appraisal, Understanding Limited Appraisals and
ReportingOptions,_ASB_Informational_Meeting,_and_Texas_Property_Tax_Law.
QUALIFICATIONS OF MICHAEL A. KEANE, MAI
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EXPERIENCE
8/15 to Present Senior Vice President – Todd Property Advisors, Real Property Analysts, Inc.;
Plano, Texas
10/12 to 8/15 Senior Appraiser – Todd Property Advisors, Real Property Analysts, Inc.:
Frisco, Texas
10/09 to 10/12 Appraisal Associate – Beers-Wells-Todd, Real Property Analysts, Inc.:
Frisco, Texas
During Michael's tenure as a real estate appraiser and appraisal research assistant, he has assisted in the
preparation and market research for numerous valuations on a variety of commercial real estate developments. These
properties consisted of various single and multiple tenant industrial, general office, medical office, and retail facilities as
well as residential subdivision developments, multifamily developments, and user specific and special purpose
properties such as automotive repair/service, full and self-serve car wash facilities, airplane hangars, fixed base
operations, flight schools, marinas, ice skating rinks, and billboard properties. Michael has also appraised properties for
eminent domain/partial taking purposes.
Michael’s responsibilities involve performing property inspections as well as analyzing market trends, collecting and
analyzing market data, analyzing subject property income and expense information, estimating reproduction costs and
depreciation as well as utilizing all aforementioned data to perform real property appraisals.
PROFESSIONAL LICENSE AND AFFILIATIONS
Designated Member of The Appraisal Institute - MAI
State Certified General Real Estate Appraiser
Texas Certificate # TX-1380384-G
EDUCATION
Master’s Degree - Land Economics and Real Estate - Texas A&M University, 2008 Bachelor of Science
Degree – Sport Management - Texas A&M University, 2007.
Minor in Business Administration
The Land Economics and Real Estate curriculum at Texas A&M University is one of only three degree programs in the
United States which have been sanctioned by The Appraisal Institute for post-graduate studies in commercial real estate
appraisal. During his pursuit of the Master's degree, Michael completed various real estate and financial oriented
courses including Real Property Valuation I & II, Real Property Finance, Real Estate Development, Financing Real
Estate Investments, Money and Capital Markets, and Commercial Real Estate Law. Michael received the Master's
degree in December 2008. Prior to his post-graduate studies, Michael received a Bachelor of Science Degree in
August 2007.
Texas Appraiser Licensing and Certification Board certified courses completed by Michael include: Appraisal Principles,
Appraisal Procedures, Sales Comparison Approach, Income Approach Parts 1 & 2, Finance Statistics and Valuation
Modeling, Site Valuation and Cost Approach, Business Practices and Ethics, and Uniform Standards of Professional
Appraisal Practice receiving a passing grade on all course examinations.
QUALIFICATIONS OF JONATHAN D. MONCRIEF
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EXPERIENCE
08/01/18 to Present Appraisal Associate – Todd Property Advisors, Real Property Analysts, Inc.;
Dallas, Texas
11/01/15 to 08/01/18 Residential Appraiser – Denton Central Appraisal District:
Denton, Texas
04/04/13 to 11/01/15 Residential Appraiser – Dallas Central Appraisal District:
Dallas, Texas
During Jonathan's tenure as a real estate appraiser, he has assisted in the preparation and market research for numerous
valuations on a variety of commercial real estate developments. These properties consisted of various single and multiple
tenant industrial, general office, medical office, and retail facilities as well as residential subdivision developments,
farm/ranch/agricultural properties, multifamily developments, and user specific and special purpose properties such as
automotive repair/service, and single-family residential properties. Jonathan has also appraised properties for eminent
domain/partial taking purposes.
Jonathan’s responsibilities involve performing property inspections as well as analyzing market trends, collecting and
analyzing market data, analyzing subject property income and expense information, estimating reproduction costs and
depreciation as well as utilizing all aforementioned data to perform real property appraisals Jonathan’s responsibilities involved
performing property inspections as well as analyzing market trends, collecting and analyzing market data, analyzing subject
property income and expense information, and estimating reproduction costs and depreciation.
PROFESSIONAL LICENSE AND AFFILIATIONS
State Certified General Real Estate Appraiser
Texas Certificate# TX-1381122-G
EDUCATION
Master of Business Administration – Business Analytics, University of North Texas, 2022.
Bachelor of Business Administration – Real Estate with Concentration in Residential Property Management, University of North
Texas, 2012.
During his pursuit of the Masters, Jonathan completed various statistical analysis-oriented courses which includes a business
core curriculum including managerial finance and accounting, marketing management, organizational behavior analysis, and
administrative strategy. Additionally, the courses completed in the master program include model-based business intelligence,
data mining, business process analytics, and enterprise applications of business intelligence. Jonathan received the MBA –
Business Analytics in May 2022.
During his pursuit of the Bachelors, Jonathan completed various real estate and financial oriented courses which includes a
business core curriculum including finance, accounting, legal and ethical environment of business, statistics, management,
computer information systems, and business policy. Additionally, the courses completed in the degree program include
principles of real estate and specialized courses in basic and advance property management, real estate finance, real estate
investments, real valuation, law/contracts for real estate, and property management law. Jonathan received the bachelor’s
degree in December 2012.
Texas Appraiser Licensing and Certification Board certified courses completed by Jonathan include: Appraisal Principles,
Appraisal Procedures, Sales Comparison Approach, Income Approach Parts 1 & 2, Finance Statistics and Valuation Modeling,
Site Valuation and Cost Approach, Business Practices and Ethics, and Uniform Standards of
Professional_Appraisal_Practice_receiving_a_passing_grade_on_all_course_Examinations.