HomeMy WebLinkAbout321 W Hickory StIntegra Realty Resources
Fort Worth
Appraisal of Real Property
Parcels 26 & 27
321 West Hickory Street
Denton, Denton County, Texas 76201
Client Reference: Parcels 26 & 27
Prepared For:
Pinnacle Consulting Management Group, Inc.
Date of the Report:
December 20, 2024
Report Format:
Appraisal Report
IRR - Fort Worth
File Number: 195-2024-1025
Subject Photographs
Parcels 26 & 27
321 West Hickory Street
Denton, Texas
Aerial Photograph
The Larger Parcel is outlined in red, the proposed permanent drainage easement is shaded in blue, and
the proposed temporary construction easement is shaded in green.
Integra Realty Resources 7080 Camp Bowie Boulevard T 817.763.8000
Fort Worth Fort Worth, Texas 76116 www.irr.com
December 20, 2024
Ms. Sarah Riebe
Regional Manager
Pinnacle Consulting Management Group, Inc.
1400 Brown Trail
Bedford, Texas 76022
SUBJECT: Market Value Appraisal
Parcels 26 & 27
321 West Hickory Street
Denton, Denton County, Texas 76201
Client Reference: Parcels 26 & 27
IRR - Fort Worth File No. 195-2024-1025
Dear Ms. Riebe:
Integra Realty Resources – Fort Worth is pleased to submit the accompanying appraisal of the
referenced property. This appraisal is necessitated by the pending acquisition of a portion of the
Parent Tract by City of Denton for the PEC-4 Drainage Improvements. The purpose of the appraisal is
to develop the following opinions of value:
x The market value as is of the fee simple interest in the subject property as of the
effective date of the appraisal, November 19, 2024
The client for the assignment is Pinnacle Consulting Management Group, Inc. on behalf of the City of
Denton. The intended use is to assist the client and assigns in determination of a reasonable
compensation due to the property owner for the proposed acquisition by providing an opinion of
the market value as is of the fee simple estate for the subject Parent Tract (Larger Parcel), Parts to
be Acquired, Remainder Before the Acquisition, Remainder After the Acquisition,
Damages/Enhancements to the Remainder After the Acquisition, Costs to Cure Damages (if any),
and Total Compensation due to the property for proposed easement acquisitions. The structural
improvements are not affected by the proposed easement acquisition; therefore, we have valued
the parent tract, or larger parcel, as vacant land, as well as affected site improvements. The
intended user of this report is the client and assigns. No other party or parties may use or rely on the
information, opinions, and conclusions contained in this report.
Ms. Sarah Riebe
Pinnacle Consulting Management Group, Inc.
December 20, 2024
Page 2
The larger parcel contains 53,437 square feet and is located on West Mulberry Street in Denton,
Texas. The subject is encumbered by a 30-foot drainage easement that bisects the southern portion
of the site. The proposed Part to Acquire is a 770 square foot Permanent Drainage Easement and a
Temporary Construction Easement consisting of 4,124 square feet. The easements are located in the
southern portion of the larger parcel and along the edge of the existing drainage easement. The City
of Denton identifies the Part to be Acquired as Parcel 26, and Parcel 27 of the PEC-4 Drainage
Improvements Project. The subject is zoned 'MD' Mixed-Use Downtown Core and is partially
situated in the AE floodway. The structural improvements are not affected by the proposed
easement acquisitions; therefore, we have valued the parent tract, or larger parcel, as vacant land,
as well as affected site improvements. It is necessary for The City of Denton to acquire the subject
property as a part of the PEC-4 Drainage Improvements.
The proposed acquisition is summarized in the following table.
Proposed Acquisition Summary
Parcel No. Type of Acquisition Land Area Affected (SF)
Parcel 26 Temporary Construction Easement 4,124
Parcel 27 Permanent Drainage Easement 770
The client is Pinnacle Consulting Management Group, Inc. The intended users are Pinnacle
Consulting Management Group, Inc and the City of Denton, and assigns. The intended use of the
report is for assist the client and assigns in determination of a reasonable compensation due to the
property owner for the proposed acquisition. No other party may use or rely on the information,
opinions, and conclusions contained in this report.
The appraisal conforms to the Uniform Standards of Professional Appraisal Practice (USPAP), the
Code of Professional Ethics and Standards of Professional Practice of the Appraisal Institute,
applicable state appraisal regulations, and the Uniform Act.
Standards Rule 2-2 (Content of a Real Property Appraisal Report) contained in the Uniform
Standards of Professional Appraisal Practice (USPAP) requires each written real property appraisal
report to be prepared as either an Appraisal Report or a Restricted Appraisal Report. This report is
prepared as an Appraisal Report as defined by USPAP under Standards Rule 2-2(a), and incorporates
Ms. Sarah Riebe
Pinnacle Consulting Management Group, Inc.
December 20, 2024
Page 3
practical explanation of the data, reasoning, and analysis that were used to develop the opinion of
value.
Based on the valuation analysis in the accompanying report, and subject to the definitions,
assumptions, and limiting conditions expressed in the report, the concluded opinions of value are as
follows:
Extraordinary Assumptions and Hypothetical Conditions
1.All information relative to the proposed acquisition and the subject property, including land areas and other
pertinent data that was provided by the client and public records and is assumed to be correct.
2. It is assumed that there are no environmental issues that impact the use or value of the subject property.
1.The “project” for which the acquisition is necessary is assumed to be complete and being fully utilized for
purposes of estimating the value of the Remainder After the Acquisition, it is also assumed that the subject
property is affected by the project similar to the “community.” If it becomes known that there are
“specific” damages that affect the subject property that are not considered herein, this appraisal and its
conclusions may be subject to reconsideration.
The use of any extraordinary assumption or hypothetical condition may have affected the assignment results.
The value conclusions are based on the following hypothetical conditions. A hypothetical condition is a
condition, directly related to a specific assignment, which is contrary to what is known by the appraiser to exist
on the effective date of the assignment results, but is used for the purpose of analysis.
The value conclusions are subject to the following extraordinary assumptions. 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.
If you have any questions or comments, please contact the undersigned. Thank you for the
opportunity to be of service.
Respectfully submitted,
Integra Realty Resources - Fort Worth
Brent Pitts, MAI, AI-GRS, R/W-AC
Texas Certified General Real Estate Appraiser
#1380206 G
Telephone: 817.763.8000
Email: bpitts@irr.com
Mr. Parker Grudt
Texas Certified General Real Estate
Appraiser #1381510 G
Telephone: 817.763.8000
Email: pgrudt@irr.com
Table of Contents
Parcels 26 & 27
Quality Assurance 1
Summary of Salient Facts and Conclusions 2
Identification of the Appraisal Problem 3
Subject Description 3
Current Ownership and Sale History 3
Pending Transactions 3
Appraisal Purpose 3
Proposed Acquisitions 4
Interest Appraised 4
Value Type Definitions 4
Definition of Market Value 4
Appraisal Premise Definitions 4
Property Rights Definitions 4
Client and Intended User(s) 5
Intended Use 5
Applicable Requirements 5
Report Format 5
Prior Services 5
Appraiser Competency 6
Scope of Work 7
Economic Analysis 9
Denton County Area Analysis 9
Surrounding Area Analysis 16
Property Analysis 20
Larger Parcel Determination 20
Improvements Description and Analysis 25
Real Estate Taxes 32
Highest and Best Use – Larger Parcel 33
Valuation 35
Valuation Methodology 35
Land Valuation 37
Larger Parcel (1.23 Acres; 53,437 SF) 37
Analysis and Adjustment of Sales 41
Land Value Conclusion – Larger Parcel 44
Reconciliation and Conclusion of Value – Before Condition 45
The Proposed Part to Acquire 45
Site Improvements in the Part to Acquire 46
Highest and Best Use – Part to Acquire 49
Valuation of the Part to Acquire (PTA) 49
Table of Contents
Parcels 26 & 27
Value of the Remainder as a Portion of the Whole 49
Value of the Remainder in the After Condition Before Considering Benefits 49
Damages/Enhancements to the Remainder After the Acquisition 50
Temporary Construction Easement 50
Site Improvements Within the Part to Acquire 51
Reconciliation and Conclusion of Value 52
Exposure Time 52
Marketing Time 52
Certification 53
Assumptions and Limiting Conditions 55
Addenda
A. Appraiser Qualifications
B. Definitions
C. Property Information
D. Legal and Plats for Proposed Acquisition
Comparable Data
Land Sales
Quality Assurance 1
Parcels 26 & 27
Quality Assurance
IRR Quality Assurance Program
At IRR, delivering a quality report is a top priority. Integra has an internal Quality Assurance Program
in which managers review material and pass an exam in order to attain IRR Certified Reviewer status.
By policy, every Integra valuation assignment is assessed by an IRR Certified Reviewer who holds the
MAI designation, or is, at a minimum, a named Director with at least ten years of valuation
experience.
This quality assurance assessment consists of reading the report and providing feedback on its quality
and consistency. All feedback from the IRR Certified Reviewer is then addressed internally prior to
delivery. The intent of this internal assessment process is to maintain report quality.
Designated IRR Certified Reviewer
An internal quality assurance assessment was conducted by an IRR Certified Reviewer prior to delivery
of this appraisal report. This assessment should not be construed as an appraisal review as defined by
USPAP.
Summary of Salient Facts and Conclusions 2
Parcels 26 & 27
Summary of Salient Facts and Conclusions
Property Name
Address
Property Type
Owner of Record
Tax ID
Legal Description
Land Area - Larger Parcel 1.23 acres; 53,437 SF
Permanent Drainage Easement 770 SF
Temporary Construction Easement 4,124 SF
Zoning Designation
Highest and Best Use
Exposure Time; Marketing Period 6-9 months; 6-9 months
Effective Date of the Appraisal November 19, 2024
Date of the Report December 20, 2024
Property Interest Appraised
Sales Comparison Approach
Number of Sales 5
Range of Sale Dates May 21 to May 24
Range of Prices per SF (Unadjusted)$17.22 - $38.92
Market Value Conclusion $1,015,303
H Squared Partners, LLC
634388
Lot 1A, Block 3, Baines Addition, Abstract No. 971, Denton County, Texas
Parcels 26 & 27
321 West Hickory Street
Denton, Denton County, Texas 76201
Commercial Land
The values reported herein are subject to the definitions, assumptions, and limiting conditions set forth in the accompanying report of which this summary is a
part. No party other than Pinnacle Consulting Management Group, Inc and the City of Denton, and assigns may use or rely on the information, opinions, and
conclusions contained in the report. It is assumed that the users of the report have read the entire report, including all of the definitions, assumptions, and
limiting conditions contained therein.
MD, Mixed-Use Downtown Core
Mixed-use development
Fee Simple
Valuation Summary: Parcels 26 & 27
Date of Value: November 19, 2024
Valuation
Opinions
Value of Property
Rights to be Acquired
Value of Larger Parcel, As if Vacant - Land Only $1,015,303
Property Rights
Value of the Permanent Easement, As if Vacant- Land Only $7,315
Value of the Temporary Construction Easements, As If Vacant, Land $15,672
Value of Site Improvements within Part to Acquire $4,830
Cost to Cure $0
Total Compensation $27,817 $27,817
Total Market Value of Proposed Acquisitions $27,817
Identification of the Appraisal Problem 3
Parcels 26 & 27
Identification of the Appraisal Problem
Subject Description
The larger parcel contains 53,437 square feet and is located on West Mulberry Street in Denton,
Texas. The subject is encumbered by a 30-foot drainage easement that bisects the southern portion of
the site. The proposed Part to Acquire is a 770 square foot Permanent Drainage Easement and a
Temporary Construction Easement consisting of 4,124 square feet. The easements are located in the
southern portion of the larger parcel and along the edge of the existing drainage easement. The City
of Denton identifies the Part to be Acquired as Parcel 26, and Parcel 27 of the PEC-4 Drainage
Improvements Project. The subject is zoned 'MD' Mixed-Use Downtown Core and is partially situated
in the AE floodway. The structural improvements are not affected by the proposed easement
acquisitions; therefore, we have valued the parent tract, or larger parcel, as vacant land, as well as
affected site improvements. A legal description of the property is provided below and in the addenda.
Property Identification
Property Name Parcels 26 & 27
Address 321 West Hickory Street
Denton, Texas 76201
Tax ID 634388
Owner of Record H Squared Partners, LLC
Legal Description Lot 1A, Block 3, Baines Addition, Abstract No. 971, Denton County, Texas
Current Ownership and Sale History
The current owner of record is H Squared Partners, LLC. The most recent closed sale of the subject is
summarized as follows:
Sale Date May 29, 2015
Seller RLB Investment Partners LLC
Buyer H Squared Partners, LLC
Sale Price Undisclosed
Recording Instrument Number 2015-59071
Pending Transactions
Based on available information, the property is not subject to an agreement of sale or an option to
buy, nor is it listed for sale, as of the effective appraisal date.
Appraisal Purpose
The purpose of the appraisal is to develop an opinion of the market value of the proposed acquisitions
and the net damages, if any, which may accrue to the remainder by reason of the acquisitions and
construction of the project in the manner proposed. The effective date of the appraisal is November
19, 2024. The date of the report is December 20, 2024. The appraisal is valid only as of the stated
effective date.
Identification of the Appraisal Problem 4
Parcels 26 & 27
Proposed Acquisitions
Proposed Acquisition Summary
Parcel No. Type of Acquisition Land Area Affected (SF)
Parcel 26 Temporary Construction Easement 4,124
Parcel 27 Permanent Drainage Easement 770
Interest Appraised
We are appraising the fee simple interest in the larger parent parcel (land only) and the partial
acquisition.
Value Type Definitions
The definitions of the value types applicable to this assignment are summarized below.
Definition of Market Value
Market value is defined as:
“Market Value is the price which the property would bring when it is offered for sale by one who
desires, but is not obliged to sell, and is bought by one who is under no necessity of buying it,
taking into consideration all of the uses to which it is reasonably adaptable and for which it
either is or in all reasonable probability will become available within the reasonable future.”
Market Value, as defined in this report, is defined by the case, City of Austin v. Cannizzo, 267 S.W.2d 808
(Tex. 1964).
Appraisal Premise Definitions
The definitions of the appraisal premises applicable to this assignment are specified as follows.
As Is Market Value
The estimate of the market value of real property in its current physical condition, use, and zoning as
of the appraisal date.1
Property Rights Definitions
The property rights appraised which are applicable to this assignment are defined as follows.
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.”2
An easement is defined as “the right to use another’s land for a stated purpose.”
1Appraisal Institute, The Dictionary of Real Estate Appraisal, 6th ed. (Chicago: Appraisal Institute, 2015)
2 Appraisal Institute, The Dictionary of Real Estate Appraisal, 6th ed. (Chicago: Appraisal Institute, 2015)
Identification of the Appraisal Problem 5
Parcels 26 & 27
A temporary easement is defined as “a non-permanent right to use another’s property for a specific
purpose and limited period. Typically established for activities such as construction, access, or utility
installation and maintenance. Once the designated period expires, or the purpose is fulfilled, the
easement rights are relinquished, and full property use reverts to the owner. Temporary easements
may impact property market value during their duration.”
A permanent easement (aka perpetual easement) is defined as “an easement that lasts forever.”
A prescriptive easement is defined as “an easement acquired through open and notorious use of an
owner's land which is adverse to the owner's rights, for a continuous and uninterrupted period of
years.” The period of years required for such an easement is defined by state laws.
Client and Intended User(s)
The client is Pinnacle Consulting Management Group, Inc. The intended users are Pinnacle Consulting
Management Group, Inc and the City of Denton, and assigns. No other party or parties may use or rely
on the information, opinions, and conclusions contained in this report.
Intended Use
The intended use of the appraisal is for assist the client and assigns in determination of a reasonable
compensation due to the property owner for the proposed acquisition. The appraisal is not intended
for any other use.
Applicable Requirements
This appraisal report conforms to the following requirements and regulations:
x Uniform Standards of Professional Appraisal Practice (USPAP)
x Code of Professional Ethics and Standards of Professional Appraisal Practice of the Appraisal
Institute
x The Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, as
amended, 42 U.S.C. 4601-4655 (Uniform Act)
x Applicable state appraisal regulations and the applicable laws of the State of Texas
x Appraisal guidelines of the client, if any.
Report Format
Standards Rule 2-2 (Content of a Real Property Appraisal Report) contained in the Uniform Standards
of Professional Appraisal Practice (USPAP) requires each written real property appraisal report to be
prepared as either an Appraisal Report or a Restricted Appraisal Report. This report is prepared as an
Appraisal Report as defined by USPAP under Standards Rule 2-2(a), and incorporates practical
explanation of the data, reasoning, and analysis used to develop the opinion of value.
Prior Services
USPAP requires appraisers to disclose to the client any other services they have provided in
connection with the subject property in the prior three years, including valuation, consulting, property
Identification of the Appraisal Problem 6
Parcels 26 & 27
management, brokerage, or any other services. We have performed no services, as an appraiser or in
any other capacity, regarding the property that is the subject of this report within the three-year
period immediately preceding the agreement to perform this assignment.
Appraiser Competency
No steps were necessary to meet the competency provisions established under USPAP. The
assignment participants have appraised several properties similar to the subject in physical, locational,
and economic characteristics, and are familiar with market conditions and trends; therefore, appraiser
competency provisions are satisfied for this assignment. Appraiser qualifications and state credentials
are included in the addenda of this report.
Scope of Work 7
Parcels 26 & 27
Scope of Work
Introduction
The appraisal development and reporting processes require gathering and analyzing information
about the assignment elements necessary to properly identify the appraisal problem. The scope of
work decision includes the research and analyses necessary to develop credible assignment results,
given the intended use of the appraisal. Sufficient information includes disclosure of research and
analyses performed and might also include disclosure of research and analyses not performed.
To determine the appropriate scope of work for the assignment, the intended use of the appraisal, the
needs of the user, the complexity of the property, and other pertinent factors were considered. The
concluded scope of work is described below.
Research and Analysis
The type and extent of the research and analysis conducted are detailed in individual sections of the
report. The steps taken to verify comparable data are disclosed in the addenda of this report.
Although effort has been made to confirm the arms-length nature of each sale with a party to the
transaction, it is sometimes necessary to rely on secondary verification from sources deemed reliable.
Subject Property Data Sources
The legal and physical features of the subject property, including size of the site, flood plain data,
seismic zone designation, property zoning, existing easements and encumbrances, access and
exposure, and condition of the improvements (as applicable) were confirmed and analyzed.
Contacts
We contacted the property owner, H Squared Partners, LLC, via certified letter and have not received
a response. As such, we inspected the property from the right-of-way.
Valuation Methodology
Three approaches to value are typically considered when developing a market value opinion for real
property. These are the cost approach, the sales comparison approach, and the income capitalization
approach. Use of the approaches in this assignment is summarized as follows:
Approaches to Value
Approach Applicability to Subject Use in Assignment
Cost Approach Applicable Utilized
Sales Comparison Approach Applicable Utilized
Income Capitalization Approach Not Applicable Not Utilized
In this analysis, we develop an opinion of market value as is for the fee simple interest in the larger
parcel as vacant land by using the sales comparison approach. This approach is applicable to this
Scope of Work 8
Parcels 26 & 27
assignment as the proposed acquisitions do not impact the primary improvements. There is also an
active market for land sales, and sufficient data is available for analysis.
We then use the results of the sales comparison approach to perform a valuation of the acquisitions.
The full development of the cost and income capitalization approaches are not applicable to the
assignment as we are valuing the larger parcel as if vacant land. However, elements of the cost
approach are used to value the site improvements included in this analysis.
Inspection
Details regarding the property inspection conducted as part of this appraisal assignment are
summarized as follows:
Property Inspection
Party Inspection Type Inspection Date Inspection Details
Brent Pitts, MAI, AI-GRS, R/W-AC On-site November 22, 2024 Typical
Parker Grudt On-site November 19, 2024 Typical
The property owner, Nick Miller, was not present at the time of inspection on November 19, 2024. We
inspected the subject property from the right-of-way. The property owner, Nick Miller, met us on-site
for the inspection on November 22, 2024.
Denton County Area Analysis 9
Parcels 26 & 27
Economic Analysis
Denton County Area Analysis
Denton County, Texas, nestled in the heart of the Dallas-Fort Worth metroplex, embodies a
harmonious blend of urban vibrancy and natural beauty. Boasting a strong economy driven by sectors
like healthcare, education, and technology, the county offers its residents diverse opportunities for
career growth and educational pursuits, with the University of North Texas and Texas Woman's
University as academic anchors. The county's captivating landscapes, marked by rolling hills and
serene lakes, provide a backdrop for outdoor enthusiasts, while historic downtown districts and
modern amenities cater to a wide range of lifestyles. With a commitment to sustainable development
and connectivity through well-maintained transportation networks, Denton County thrives as a
dynamic and inclusive community that continues to evolve while preserving its unique charm.
Population
Denton County has an estimated 2024 population of 1,019,105, which represents an average annual
3.0% increase over the 2020 census of 906,422. Denton County added an average of 28,171 residents
per year over the 2020-2024 period, and its annual growth rate exceeded the State of Texas rate of
1.3%.
Looking forward, Denton County's population is projected to increase at a 2.0% annual rate from
2024-2029, equivalent to the addition of an average of 21,182 residents per year. Denton County's
growth rate is expected to exceed that of Texas, which is projected to be 0.9%.
Employment
Total employment in Denton County was estimated at 315,937 jobs at year-end 2023. Between year-
end 2013 and 2023, employment rose by 116,754 jobs, equivalent to a 58.6% increase over the entire
period. There were gains in employment in ten out of the past ten years. Denton County's rate of
employment growth over the last decade surpassed that of Texas, which experienced an increase in
employment of 23.6% or 2,656,854 jobs over this period.
A comparison of unemployment rates is another way of gauging an area’s economic health. Over the
past decade, the Denton County unemployment rate has been consistently lower than that of Texas,
Population Compound Ann. % Chng
2020 Census 2024 Estimate 2029 Projection
Denton, TX (city) 139,869 157,373 172,038 3.0% 1.8%
Denton County, TX 906,422 1,019,105 1,125,017 3.0% 2.0%
Dallas-Ft. Worth, TX 8,328,399 8,851,689 9,304,378 1.5% 1.0%
Texas 29,145,505 30,665,339 32,119,807 1.3% 0.9%
Source: Claritas
Population Trends
Denton County Area Analysis 10
Parcels 26 & 27
with an average unemployment rate of 4.0% in comparison to a 4.9% rate for Texas. A lower
unemployment rate is a positive indicator.
Recent data shows that the Denton County unemployment rate is 3.2% in comparison to a 3.5% rate
for Texas, a positive sign that is consistent with the fact that Denton County has outperformed Texas
in the rate of job growth over the past two years.
Major employers in Denton County are shown in the following table.
Employment Trends
Total Employment (Year End) Unemployment Rate (Ann. Avg.)
Year Denton County
%
Change Texas
%
Change Denton County Texas
2013 199,183 11,248,559 5.4% 6.3%
2014 211,482 6.2% 11,672,985 3.8% 4.5% 5.2%
2015 224,936 6.4% 11,831,449 1.4% 3.6% 4.5%
2016 233,551 3.8% 11,972,594 1.2% 3.4% 4.6%
2017 244,353 4.6% 12,224,998 2.1% 3.4% 4.4%
2018 253,596 3.8% 12,539,711 2.6% 3.2% 3.9%
2019 267,253 5.4% 12,802,919 2.1% 3.0% 3.5%
2020 267,588 0.1% 12,264,651 -4.2% 6.5% 7.7%
2021 290,438 8.5% 13,025,292 6.2% 4.4% 5.7%
2022 300,599 3.5% 13,591,394 4.3% 3.3% 3.9%
2023 315,937 5.1% 13,905,413 2.3% 3.5% 3.9%
Overall Change 2013-2023 116,754 58.6% 2,656,854 23.6%
Avg Unemp. Rate 2013-2023 4.0% 4.9%
Unemployment Rate - April 2024 3.2% 3.5%
Source: U.S. Bureau of Labor Statistics and Moody's Analytics. Employment figures are from the Quarterly Census of Employment and Wages
(QCEW). Unemployment rates are from the Current Population Survey (CPS). The figures are not seasonally adjusted.
Name Number of Employees
1 University of North Texas 8,891
2 Peterbilt Motors Company 2,000
3 Texas Health Presbyterian Hospital 1,100
4 Texas Women's University 1,077
5 Sally Beauty Holdings 1,000
6 Medical City Holdings 799
7 Safran Electrical & Power 571
8 Tetra Park 500
9 ESAB Welding & Cutting 405
10 Flowers Baking Company 375
Major Employers - Denton County, TX
Source: Denton Chamber of Commerce
Denton County Area Analysis 11
Parcels 26 & 27
Gross Domestic Product
Gross Domestic Product (GDP) is a measure of economic activity based on the total value of goods and
services produced in a defined geographic area, and annual changes in Gross Domestic Product (GDP)
are a gauge of economic growth.
Economic growth, as measured by annual changes in GDP, has been considerably higher in Denton
County than Texas overall during the past five years. Denton County has grown at a 7.1% average
annual rate while Texas has grown at a 2.9% rate. Denton County continues to perform better than
Texas. GDP for Denton County rose by 6.4% in 2022 while Texas's GDP rose by 2.7%.
Denton County has a per capita GDP of $46,935, which is 27% less than Texas's GDP of $64,070. This
means that Denton County industries and employers are adding relatively less value to the economy
than their counterparts in Texas.
Gross Domestic Product
Year
($,000s)
Denton County % Change
($,000s)
Texas % Change
2017 32,503,089 – 1,667,313,000 –
2018 33,816,542 4.0% 1,746,543,300 4.8%
2019 35,977,333 6.4% 1,802,912,800 3.2%
2020 39,570,027 10.0% 1,772,185,600 -1.7%
2021 43,110,011 8.9% 1,873,473,400 5.7%
2022 45,868,233 6.4% 1,924,007,500 2.7%
Compound % Chg (2017-2022) 7.1% 2.9%
GDP Per Capita 2022 $46,935 $64,070
Source: U.S. Bureau of Economic Analysis and Moody's Analytics; data released December 2023.
The release of state and local GDP data has a longer lag time than national data. The data represents inflation-adjusted ""real""
GDP stated in 2017 dollars.
Denton County Area Analysis 12
Parcels 26 & 27
Denton County Area Analysis 13
Parcels 26 & 27
Denton County Area Analysis 14
Parcels 26 & 27
Income, Education and Age
Denton County is more affluent than Texas. Median household income for Denton County is $102,026,
which is 39.8% greater than the corresponding figure for Texas.
Residents of Denton County have a higher level of educational attainment than those of Texas. An
estimated 48% of Denton County residents are college graduates with four-year degrees, versus 32%
of Texas residents. People in Denton County are similar in age to their Texas counterparts. The median
age of both Denton County and Texas is 37 years.
Conclusion
The Denton County economy will benefit from a growing population base and higher income and
education levels. Denton County experienced growth in the number of jobs and has maintained a
consistently lower unemployment rate than Texas over the past decade. It is anticipated that the
Denton County economy will improve and employment will grow, strengthening the demand for real
estate.
Median
Denton County, TX $102,026
Texas $72,993
Comparison of Denton County, TX to Texas + 39.8%
Source: Claritas
Median Household Income - 2024
Education & Age - 2024
Source: Claritas
10%
20%
30%
40%
50%
60%
70%
80%
Denton County, TX Texas
48%
32%
Percent College Graduate
10
15
20
25
30
35
40
45
50
Denton County, TX Texas
37 37
Median Age
Denton County Area Analysis 15
Parcels 26 & 27
Area Map
Surrounding Area Analysis 16
Parcels 26 & 27
Surrounding Area Analysis
Location
The subject is located in the central portion of Denton County. This area is part of the Denton
submarket. Adjacent communities include Gainesville to the north, McKinney to the east, Fort Worth
to the south, and Decatur to the west. Area boundaries and delineation are indicated in the following
table. A map identifying the location of the property follows this section.
Boundaries & Delineation
Boundaries
Market Area Dallas-Fort Worth, TX
Submarket Denton
Area Type Urban
Delineation
North Gainesville
South Fort Worth
East McKinney
West Decatur
Access and Linkages
Access throughout the area is considered average. Primary access and linkages to the subject area,
including highways, roadways, public transit, traffic counts, and airports, are summarized in the
following table.
Access & Linkages
Vehicular Access
Major Highways I-35W, US-377, US-77, US-380
Primary Corridors Elm St, Locust St, Caroll Blvd, Oak St
Vehicular Access Rating Average
Public Transit
Providers Denton County Transportation Authority (DCTA)
Transit Access Rating Average
Airport(s)
Distance 27 miles
Driving Time 30 minutes
Primary Transportation Mode Automobile
The subject experiences from average daily traffic counts. Furthermore, the Fort Worth Central
Business District (CBD), the economic and cultural center of the region, is approximately 35 miles from
the property.
Surrounding Area Analysis 17
Parcels 26 & 27
Demographics
A demographic profile of the surrounding area, including population, households, and income data, is
presented in the following table.
As shown above, the current population within a 10-minute drive time of the subject is 106,107, and
the average household size is 2.3. Population in the area has grown since the 2020 census, and this
trend is projected to continue over the next five years. Compared to Denton County overall, the
population within a 10-minute drive time is projected to grow at a slower rate.
Median household income is $56,767, which is lower than the household income for Denton County.
Residents within a 10-minute drive time have a lower level of educational attainment than those of
Denton County, while median owner-occupied home values are considerably lower.
Surrounding Area Demographics
2024 Estimates
5-Minute Drive
Time
10-Minute Drive
Time
15-Minute Drive
Time Denton, TX (city)
Denton County,
TX Texas
Population 2020 22,910 95,558 174,578 139,869 906,422 29,145,505
Population 2024 25,493 106,107 193,498 157,373 1,019,105 30,665,339
Population 2029 27,648 115,197 211,052 172,038 1,125,017 32,119,807
Compound % Change 2020-2024 2.7% 2.7% 2.6% 3.0% 3.0% 1.3%
Compound % Change 2024-2029 1.6% 1.7% 1.8% 1.8% 2.0% 0.9%
Households 2020 10,705 38,201 65,453 53,963 328,884 10,491,147
Households 2024 12,081 43,048 73,240 61,347 369,987 11,081,289
Households 2029 13,230 47,172 80,351 67,513 408,878 11,644,207
Compound % Change 2020-2024 3.1% 3.0% 2.9% 3.3% 3.0% 1.4%
Compound % Change 2024-2029 1.8% 1.8% 1.9% 1.9% 2.0% 1.0%
Median Household Income 2024 $38,864 $56,767 $74,146 $68,904 $102,026 $72,993
Average Household Size 1.9 2.3 2.5 2.5 2.7 2.7
College Graduate %42% 40% 41% 41% 48% 32%
Median Age 25 29 32 31 37 37
Owner Occupied %10% 34% 50% 46% 63% 61%
Renter Occupied %90% 66% 50% 54% 37% 39%
Median Owner Occupied Housing Value $256,631 $315,558 $348,875 $349,651 $427,811 $273,092
Median Year Structure Built 2002 1991
Average Travel Time to Work in Minutes 23 24 27 26 30 29
Source: Claritas
Surrounding Area Analysis 18
Parcels 26 & 27
Land Use
Predominant land uses in the immediate vicinity of the subject include a mix of commercial and
residential uses. Land use characteristics of the area are summarized below.
Surrounding Area Land Uses
Character of Area Urban
Predominant Quality and Condition Average
Land Use Allocation
Single-Family 25%
Multifamily 20%
Retail 20%
Office 20%
Industrial 10%
Vacant Land 5%
Infrastructure and Planning Average
Immediate Surroundings
North Retail
South Office
East Office
West Retail
Outlook and Conclusions
The area is in the growth stage of its life cycle. Given the history of the area and the growth trends, it
is anticipated that property values will increase in the near future.
In comparison to other areas in the region, the area is rated as follows:
Surrounding Area Ratings
Highway Access Average
Demand Generators Average
Convenience to Support Services Average
Convenience to Public Transit Average
Employment Stability Average
Neighborhood Amenities Average
Police and Fire Protection Average
Barriers to Competitive Entry Average
Price/Value Trends Average
Property Compatibility Average
Surrounding Area Analysis 19
Parcels 26 & 27
Surrounding Area Map
Larger Parcel Determination 20
Parcels 26 & 27
Property Analysis
Larger Parcel Determination
In conducting our appraisal of the subject property, we have examined the issue of the “Larger Parcel”
as it relates to the economic unit which is appropriate for analysis. Issues considered in this Larger
Parcel analysis include:
1. Commonality of ownership;
2. Physical contiguity; and,
3. Common use and/or common highest and best use
The concluded larger parcel in this analysis is comprised of a single assessor’s parcel, the parent tract.
There are no other adjacent or proximate parcels that share common ownership. The overall area of
the larger parcel is indicated in the following table:
Land Area Summary
Tax ID SF Acres
634388 53,437 1.23
Source: Survey
Shape and Dimensions
The subject site’s Larger Parcel is rectangular in shape, with dimensions of approximately 170 feet in
width, and approximately 320 feet in depth. Site utility based on shape and dimensions is average.
Topography
The site is generally level and at street grade. The topography does not appear to pose development
challenges.
Drainage
A permanent drainage easement bisects the southern portion of the subject.
Larger Parcel Determination 21
Parcels 26 & 27
Streets, Access and Frontage
Details pertaining to street access and frontage of the Larger Parcel are provided in the following table.
Streets, Access and Frontage
Street Hickory Street West Mulberry Street
Frontage Feet 170 170
Paving Asphalt Asphalt
Curbs Yes Yes
Sidewalks Yes Yes
Lanes 2 way, 1 lane each way 2 way, 1 lane each way
Direction of Traffic East/West East/West
Condition Average Average
Traffic Levels Low Low
Signals/Traffic Control None None
Access/Curb Cuts Yes Yes
Visibility Average Average
Utilities
The availability of utilities to the subject is summarized in the following table.
Utilities
Service Provider
Water City of Denton
Sewer City of Denton
Electricity Oncor
Natural Gas Atmos
Local Phone Various
Flood Hazard Status
The following table provides flood hazard information.
Flood Hazard Status
Community Panel Number 48121C0360G
Date April 18, 2011
Zone AE
Description Within 100-year floodplain
Insurance Required?Yes
Larger Parcel Determination 22
Parcels 26 & 27
Flood Boundary Map
The subject is partially located within the regulatory floodway as established by FEMA. Properties
within the regulatory floodway cannot be developed with any use that would affect upstream water
flow, which typically includes all structures, site improvements, and site work. While it is possible to
remove properties from the regulatory floodway, it requires substantial expenditures in engineering
and hydrology studies and approval from FEMA, which is in no way guaranteed. Because of the
significant expense and heightened risk, these properties typically trade at a significant discount
relative to properties that are not within the regulatory floodway. The existing improvements likely
predate the creation of the regulatory floodway and are therefore permitted to remain, but any
redevelopment of the site would be required to conform to existing floodway requirements.
Larger Parcel Determination 23
Parcels 26 & 27
Environmental Hazards
An environmental assessment report was not provided for review, and during our inspection, we did
not observe any obvious signs of contamination on or near the subject. However, environmental issues
are beyond our scope of expertise. It is assumed that the property is not adversely affected by
environmental hazards.
Ground Stability
A soils report was not provided for our review. Based on our inspection of the subject and observation
of development on nearby sites, there are no apparent ground stability problems. However, we are not
experts in soils analysis.
Zoning
Zoning Summary
Zoning Jurisdiction City of Denton
Zoning Designation MD
Description Mixed-Use Downtown Core
Legally Conforming? Appears to be legally conforming
Zoning Change Likely? Yes
Permitted Uses Various high-density residential, commercial, office and
entertainment uses
Category Zoning Requirement
Minimum Lot Area None
Minimum Lot Width (Feet) None
Minimum Lot Depth (Feet) None
Minimum Setbacks (Feet) None
Maximum Building Height 100
Maximum Site Coverage 100%
Larger Parcel Determination 24
Parcels 26 & 27
Zoning Map
Easements, Encroachments and Restrictions
Based upon a review of the deed and property survey, there is a permanent existing drainage
easement that bisects the southern portion of the property. The drainage easement prevents
development within its boundaries.
Conclusion of Site Analysis
The subject is partially completely within the regulatory floodway as established by FEMA. Properties
within the regulatory floodway cannot be developed with any use that would affect upstream water
flow, which typically includes all structures, site improvements, and site work. Overall, the physical
characteristics of the site make it suitable for limited uses.
Improvements Description and Analysis 25
Parcels 26 & 27
Improvements Description and Analysis
We are valuing the larger parent parcel as vacant land; therefore, a complete description of the
improvements is not included. The structural improvements that are situated on the parent tract are
not affected by the acquisition and have not been considered in this analysis.
The affected site improvements have been considered in the Cost to Cure. The following description is
based on our site inspection of the property and information from public records.
We assume the temporary construction easement will not require removal and replacement of grade-
level improvements like concrete. The site improvements are shown below:
Site Improvements in the Parts Acquired
Site Improvement Acquisition Area
Area
(Number)Unit
Post Oak Permanent Drainage Easement 1 Each
Bald Cypress Temporary Construction Easement 1 Each
Parcels 26 & 27
View of Part to Acquire View of the subject property facing north
View of the Part to Acquire View of the subject facing north
View of the part to acquire View of the southern property boundary
Parcels 26 & 27
View of the southern property boundary View drainage channel
Parcels 26 & 27
Aerial View – Larger Tract with Shaded Part to Acquire
The Larger Parcel is outlined in red, the proposed permanent drainage easement is shaded in blue,
and the proposed temporary construction easement is shaded in green.
Parcels 26 & 27
Tax Plat Map
The larger parcel is outlined in blue and is made up of tax parcel 634388.
Parcels 26 & 27
Survey – Part to Acquire
Parcels 26 & 27
Real Estate Taxes 32
Parcels 26 & 27
Real Estate Taxes
Real estate tax assessments are administered by the Denton County Appraisal District and are
estimated by jurisdiction on a county basis for the subject. Real estate taxes in this state and this
jurisdiction represent ad valorem taxes, meaning a tax applied in proportion to value. The real estate
taxes for an individual property may be determined by dividing the assessed value for a property by
$100, then multiplying the estimate by the composite rate. The composite rate is based on a
consistent state tax rate throughout the state, in addition to one or more local taxing district rates.
Real estate taxes and assessments for the current tax year are shown in the following table.
Taxes and Assessments - 2024
Assessed Value Taxes and Assessments
Tax ID Land Improvements Total Tax Rate
Ad
Valorem Total
634388 $1,062,864 $6,237,136 $7,300,000 1.909367% $139,384 $139,384
Based on the concluded market value of the parent tract and consideration of the ratio of assessed
value to market value of other properties in this county, assessed value appears reasonable.
Highest and Best Use – Larger Parcel 33
Parcels 26 & 27
Highest and Best Use – Larger Parcel
The highest and best use of a property is the reasonably probable use resulting in the highest value,
and represents the use of an asset that maximizes its productivity.
Process
Before a property can be valued, an opinion of highest and best use must be developed for the subject
site, both as though vacant, and as improved or proposed. By definition, the highest and best use
must be:
x Physically possible.
x Legally permissible under the zoning regulations and other restrictions that apply to the site.
x Financially feasible.
x Maximally productive, i.e., capable of producing the highest value from among the
permissible, possible, and financially feasible uses.
As Though Vacant
First, the property is evaluated as though vacant, with no improvements.
Physically Possible
The subject property is partially situated within the floodway. The physical characteristics of the site
impose restrictions on development. The subject is located completely within the regulatory floodway
as established by FEMA. Properties within the regulatory floodway cannot be developed with any use
that would affect upstream water flow, which typically includes all structures, site improvements, and
site work. Overall, the physical characteristics of the site and the drainage channel limit the site for
potential development. FEMA regulations allow structures or improvements that existed before the
establishment of a designated regulatory floodway to remain in place, but they impose restrictions on
rebuilding if the structures are substantially damaged or destroyed.
Legally Permissible
The site is zoned MD, Mixed-Use Downtown Core. Permitted uses include various high-density
residential, commercial, office and entertainment uses. There are no apparent legal restrictions, such
as easements or deed restrictions, effectively limiting the use of the property. Given the property’s
location within the regulatory floodway, holding for future mixed-use development is the only use
considered.
Financially Feasible
Based on the accompanying analysis of the market, it appears that holding the site for future mixed-
use development would result in a value that aligns with its potential cost. Therefore, holding the site
for mixed-use development is considered to be financially feasible.
Maximally Productive
There does not appear to be any reasonably probable use of the site that would generate a higher
residual land value than mixed-use development. Accordingly, mixed-use development, developed to
the normal market density level permitted by zoning, is the maximally productive use of the property.
Highest and Best Use – Larger Parcel 34
Parcels 26 & 27
Conclusion
Mixed-use development is the only use which meets the four tests of highest and best use. Therefore,
it is concluded to be the highest and best use of the property as though vacant.
As Improved
Based on public records, the parent tract is improved with one 61,720 square foot commercial
building constructed in 2014. The improvements are not affected by the acquisition and have not
been considered in this analysis.
Most Probable Buyer
Taking into account the size and characteristics of the property and its occupancy, the likely buyer is a
regional or national investor.
Valuation Methodology 35
Parcels 26 & 27
Valuation
Valuation Methodology
Appraisers usually consider three approaches to estimating the market value of real property. These are
the cost approach, sales comparison approach and the income capitalization approach. This section of
the report explains the applicability of recognized appraisal methods, reviews the work performed in
the valuation process, and sets forth the reasoning that supports each opinion or conclusion.
The cost approach assumes that the informed purchaser would pay no more than the cost of producing
a substitute property with the same utility. This approach is particularly applicable when the
improvements being appraised are relatively new and represent the highest and best use of the land or
when the property has unique or specialized improvements for which there is little or no sales data from
comparable properties. In this approach, the cost to replace the improvements is estimated. A
deduction is made for any depreciation, and the result is combined with the estimated value of the
underlying land. This approach is applicable when each component is independently measurable, and
when the sum of all components is believed to reflect market value. The approach is not applicable to
unimproved land or obsolete improvements.
The sales comparison approach assumes that an informed purchaser would pay no more for a property
than the cost of acquiring another existing property with the same utility. This approach is especially
appropriate when an active market provides sufficient reliable data. This approach compares the
subject to other properties that have changed hands fairly recently, at known price levels. The approach
is most meaningful when there is adequate market data involving comparable properties. Reliability of
the approach varies directly with the quantity and quality of available market data. The sales
comparison approach is less reliable in an inactive market or when estimating the value of properties
for which no directly comparable sales data is available. The sales comparison approach is often relied
upon for owner-user properties.
The income capitalization approach reflects the market’s perception of a relationship between a
property’s potential income and its market value. This approach converts the anticipated net income
from ownership of a property into a value indication through capitalization. The primary methods are
direct capitalization and discounted cash flow analysis, with one or both methods applied, as
appropriate. This approach is widely used in appraising income-producing properties. The approach is
suitable for properties that have obvious earning power and investment appeal, but inappropriate for
properties that have no readily discernible income potential.
Reconciliation of the various indications into a conclusion of value is based on an evaluation of the
quantity and quality of available data in each approach and the applicability of each approach to the
property type.
Valuation Methodology 36
Parcels 26 & 27
The methodology employed in this assignment is summarized as follows:
Approaches to Value
Approach Applicability to Subject Use in Assignment
Cost Approach Applicable Utilized
Sales Comparison Approach Applicable Utilized
Income Capitalization Approach Not Applicable Not Utilized
In this analysis, we develop an opinion of market value for the fee simple interest in the larger parcel
as vacant land by using the sales comparison approach. This approach is applicable to this assignment
as the proposed acquisitions do not impact the structural improvements. There is also an active
market for land sales, and sufficient data is available for analysis.
We then use the results of the sales comparison approach to perform a valuation of the acquisitions.
The full development of the cost and income capitalization approaches are not applicable to the
assignment as we are valuing the larger parcel as if vacant land. However, elements of the cost
approach are used to value the site improvements included in this analysis.
Land Valuation 37
Parcels 26 & 27
Land Valuation
To develop an opinion of the subject’s land value, as if vacant and available to be developed to its
highest and best use, we utilize the sales comparison approach. This approach develops an indication
of value by researching, verifying, and analyzing sales of similar properties.
Larger Parcel (1.23 Acres; 53,437 SF)
To apply the sales comparison approach to the Larger Parcel, we searched for sale transactions within
the following parameters:
x Location: Denton County
x Size: 0.1 to 2.0 Acres
x Use: Mixed uses
x Transaction Date: 2022 through the Effective Appraisal Date
For this analysis, we use price per square foot as the appropriate unit of comparison because market
participants typically compare sale prices and property values on this basis. The most relevant sales
are summarized in the following tables.
Land Valuation 38
Parcels 26 & 27
Summary of Comparable Land Sales
No. Name/Address
Sale Date;
Status Sale Price
SF;
Acres Zoning
$/SF
Land $/Acre
1 A 0.27 Acre Tract of Vacant Land May-24 $450,000 11,561 $38.92 $1,695,554
401 Bryan St. Closed 0.27
Denton
Denton County
Tax ID: R34948
Grantor: William Carter
Grantee: 2609 Douglas LLC
2 A 0.29 Acre Tract of Vacant Land Nov-23 $318,000 12,581 $25.28 $1,101,108
711 Bernard St. Closed 0.29
Denton
Denton County
Tax ID: R705522
Grantor: Hazelwood Ltd
Grantee: 711 Bernard LLC
3 Land - Denton, TX Nov-22 $653,400 32,670 $20.00 $871,200
West side of Bonnie Brae Street, south of Linden DriClosed 0.75
Denton
Denton County
Tax ID: Part of 1003679
Grantor: 2500 Panhandle LLC
Grantee: DDGH LLC
MN
MN
MN
Comments: The property sold in May 2024 for $450,000, the same as its October 2023 listing price. It was on the market for five months
before going under contract. The listing agent was Jeremy Scott from Summit Cove Realty, Inc.
Comments: This property sold in November 2023 with a sale price of $318,000. The property was originally listed in September 2022 with an
asking price of $349,000. The property is zoned MN Mixed-Use Neighborhood and not situated in the floodplain. The listing agent for the
property was Marilyn Newland with Keller Williams.
Comments:
4 A 0.20 Acre Tract of Mixed-Use Land Mar-24 $150,000 8,712 $17.22 $750,000
215 Bernard St. Closed 0.20
Denton
Denton County
Tax ID: R34388
Grantor: North Texas Housing LLC
Grantee: Tjandramulia Berdy
5 1.01 Acres of Commercial Land May-21 $791,921 43,996 $18.00 $784,080
N. Loop 288 Closed 1.01
Denton
Denton County
TX
Tax ID: 978160
Grantor: 100 North Loop 288, LLC
Grantee: Community Dental Partners
Subject 53,437 MD
Parcels 26 & 27 1.23
Denton, TX
MN
Comments: The property sold in March 2024 with a sale price of $150,000. The original listing price for the property was $150,000 and was on
the market for less than a week before entering a purchasing agreement. The listing agent for the property was Jose Trevino with Keller
Williams Realty. The property consists of 0.20 acres and is zoned for mixed-use.
Comments: This property has a sale date of May 5, 2021 with a sale price of $791,921 or ($18.00/sf). The property was marketed as a retail or
office opportunity.
SC
Land Valuation 39
Parcels 26 & 27
Comparable Land Sales Map – Larger Parcel
Parcels 26 & 27
Sale 1
A 0.27 Acre Tract of Vacant Land
Sale 2
A 0.29 Acre Tract of Vacant Land
Sale 3
Land -Denton, TX
Sale 4
A 0.20 Acre Tract of Mixed-Use Land
Sale 5
1.01 Acres of Commercial Land
Parcels 26 & 27
Analysis and Adjustment of Sales
The sales are compared to the subject and adjusted to account for material differences that affect value.
Adjustments are considered for the following factors, in the sequence shown below.
Adjustment Factor Accounts For Comments
Effective Sale Price Atypical economics of a
transaction, such as
demolition cost or
expenditures by buyer at
time of purchase.
No adjustments necessary.
Real Property Rights Fee simple, leased fee,
leasehold, partial interest,
etc.
No adjustments necessary.
Financing Terms Seller financing, or
assumption of existing
financing, at non-market
terms.
No adjustments necessary.
Conditions of Sale Extraordinary motivation
of buyer or seller,
assemblage, forced sale.
No adjustments necessary.
Market Conditions Changes in the economic
environment over time
that affect the
appreciation and
depreciation of real
estate.
Rent growth in the subject’s
submarket is projected to continue.
All sales have been adjusted upward
5% per year to account for market
conditions through the Effective
Appraisal Date.
Location Market or submarket area
influences on sale price;
surrounding land use
influences.
The subject is located within the
City of Denton and benefits from
increasing demand and
development with regards to its
proximity to downtown Denton.
Sales 2, 3, and 5 are inferior with
regards to proximity to downtown
Denton.
Access/Exposure Convenience to
transportation facilities;
ease of site access;
visibility; traffic counts.
No adjustments necessary.
Size Inverse relationship that
often exists between
parcel size and unit value.
The larger parcel consists of 1.23
acres or 53,437 square feet. Sales 1,
2, and 4 have been adjusted
downward for their smaller sizes.
Shape and Topography Primary physical factors
that affect the utility of a
site for its highest and
best use.
None.
Parcels 26 & 27
Adjustment Factor Accounts For Comments
Zoning Government regulations
that affect the types and
intensities of uses
allowable on a site.
None.
Floodplain Land in the floodplain can
often have development
restrictions and require
insurance.
The subject property is partially
situated in the floodway. All of the
sales have been adjusted downward
for not being situated in the
floodway. This adjustment is based
on paired sales analysis retained in
our files.
Encumbrances/Easements Physical and/or legal
encumbrances restricting
use and development of a
site.
The southern portion of the subject
is bisected by a drainage channel.
Sales 1, 2, 3, and 5 have been
adjusted downward for being
superior with regards to easement
characteristics.
As in most analyses, each element of comparison is not weighted equally. For example, the location of a
property as an element of comparison may outweigh its size, resulting in an overall rating of “inferior” to
the subject, though there may be numerically more elements rated as “similar” in the comparison grid. Also
true in this analysis is that certain elements balance the effect of other elements in each sale’s comparison.
The following table summarizes the adjustments we made to the comparable sales.
Parcels 26 & 27
Adjustment Factors
The sales are compared to the subject and adjusted to account for material differences that affect value.
Adjustments are considered for the following factors, in the sequence shown below.
Land Sales Adjustment Grid - Larger Parcel
Subject Comparable 1 Comparable 2 Comparable 3 Comparable 4 Comparable 5
Address 321 West Hickory
Street
401 Bryan St. 711 Bernard St. West side of
Bonnie Brae
Street, south of
Linden Drive
215 Bernard St. N. Loop 288
City Denton Denton Denton Denton Denton Denton
County Denton Denton Denton Denton Denton Denton
Sale Date May-24 Nov-23 Nov-22 Mar-24 May-21
Sale Status Closed Closed Closed Closed Closed
Sale Price $450,000 $318,000 $653,400 $150,000 $791,921
Square Feet 53,437 11,561 12,581 32,670 8,712 43,996
Acres 1.23 0.27 0.29 0.75 0.20 1.01
Zoning Code MD MN MN MN MN SC
Flood Zone Designation AE X X X X (Shaded) X
Price per Square Foot $38.92 $25.28 $20.00 $17.22 $18.00
Property Rights Fee Simple Fee Simple Fee Simple Fee Simple Fee Simple
% Adjustment – – – – –
Financing Terms Cash to seller Cash to seller Cash to seller Cash to seller Cash to seller
% Adjustment – – – – –
Conditions of Sale
% Adjustment – – – – –
Market Conditions 11/19/2024 May-24 Nov-23 Nov-22 Mar-24 May-21
Annual % Adjustment 5% 2% 5% 10% 3% 18%
Cumulative Adjusted Price $39.70 $26.54 $22.00 $17.73 $21.24
Location – 10% 10% – 20%
Access/Exposure –––––
Size -5% -5% – -5% –
Shape and Topography –––––
Zoning –––––
Floodplain -25% -25% -25% -15% -15%
Encumbrances/Easements -10% -10% -10% – -10%
Net Property Adjustments ($)-$15.88 -$7.96 -$5.50 -$3.55 -$1.06
Net Property Adjustments (%) -40% -30% -25% -20% -5%
Final Adjusted Price $23.82 $18.58 $16.50 $14.19 $20.18
Range of Adjusted Prices $14.19 - $23.82
Mean $18.65
Indicated Value $19.00
Land Valuation 44
Parcels 26 & 27
Land Value Conclusion – Larger Parcel
Prior to adjustments, the sales reflect a range of $17.22 - $38.92 per square foot. After adjustment,
the range is narrowed to $13.30- $18.70 per square foot, with an average of $18.65 per square foot.
To arrive at an indication of value, we place emphasis on the mean with consideration given to the
most recent sales.
Accordingly, our opinion of the market unit value of the fee simple interest in the subject, as of the
date of this report, is $19.00 per square foot. Based on the preceding analysis, we reach a land value
conclusion of the Larger Parcel as follows:
Land Value Conclusion - Larger Parcel
Indicated Value per Square Foot $19.00
Subject Square Feet 53,437
Indicated Value $1,015,303
Reconciliation and Conclusion of Value – Before Condition 45
Parcels 26 & 27
Reconciliation and Conclusion of Value – Before Condition
Based on the preceding analysis, the value of the Larger Parcel is indicated in the following table.
Value Conclusion
Value Type & Appraisal Premise Interest Appraised Date of Value Value Conclusion
Market Value As Is Fee Simple November 19, 2024 $1,015,303
The value of the underlying land at the larger parent parcel is used as the basis for the valuation of the
acquisitions in this analysis.
The acquisition does not permanently impact access, use, or development potential. As such, the
highest and best use of the subject is the same in the after condition, on an As Vacant basis.
The Proposed Part to Acquire
As a result of the project in the manner proposed, the temporary construction easement consists of
4,124 square feet and the permanent drainage construction easement consists of 770 square feet.
Proposed Acquisition Summary
Parcel No. Type of Acquisition Land Area Affected (SF)
Parcel 26 Temporary Construction Easement 4,124
Parcel 27 Permanent Drainage Easement 770
The Parcel 26 Part to Acquire (PTA) is described as:
x Irregular in shape.
o 150 linear feet wide
o 51 linear feet deep
x Level at grade.
x Part to acquire is adjacent to the existing permanent drainage easement.
The Parcel 27 Part to Acquire (PTA) is described as:
x Irregular in shape.
o 25 linear feet wide
o 30 linear feet deep
x Below grade level.
x The part to acquire is primarily within an existing drainage channel.
Reconciliation and Conclusion of Value – Before Condition 46
Parcels 26 & 27
Site Improvements in the Part to Acquire
We assume the temporary construction easement will not require removal and replacement of grade-
level improvements like concrete. The site improvements are shown below:
Site Improvements in the Parts Acquired
Site Improvement Acquisition Area
Area
(Number)Unit
Post Oak Permanent Drainage Easement 1 Each
Bald Cypress Temporary Construction Easement 1 Each
Reconciliation and Conclusion of Value – Before Condition 47
Parcels 26 & 27
Parcel 26 Temporary Construction Easement – Survey
Reconciliation and Conclusion of Value – Before Condition 48
Parcels 26 & 27
Parcel 27 Permanent Drainage Easement
Highest and Best Use – Part to Acquire 49
Parcels 26 & 27
Highest and Best Use – Part to Acquire
The highest and best use of the Parts to be Acquired is as part of the Larger Parcel since they are of
insufficient size and shape to be independent, self-sustaining economic units.
Valuation of the Part to Acquire (PTA)
The proposed acquisitions have been previously described in our discussion of The Proposed Part
Acquired, earlier in this section of the report.
Part to Acquire
It has been noted that the shape and size of the proposed acquisition are insufficient in size to
represent economic units. The area to be acquired would contribute to the whole and it is the
appraiser’s opinion that the data used to estimate the market value of the subject property whole
land would be applicable to the part to be acquired.
The proposed acquisition represents a permanent drainage easement located within an existing
drainage channel and partially within the AE floodway. Based on the rights being acquired, we
conclude that the proposed permanent drainage easement comprises 50% of the fee value. The
following table summarizes the land value of the proposed acquisition.
Permanent Acquisition Area
Part Acquired
Area
(SF)
Land
Value
Indicated Rights
Acquired
Indicated
Value
770 SF of Land 770 x $19.00 x 50% = $7,315
Total $7,315
Value of the Remainder as a Portion of the Whole
The value of the remainder as part of the whole is calculated below.
Remainder as a Portion of the Whole
Value of the Larger Parcel - Land Only $1,015,303
Less: Permanent Acquisition $7,315
Remainder as a Portion of the Whole - Land Only $1,007,988
The figure above is useful for comparison purposes, with the value of the remainder in the after
condition, as the method for estimating damages to the remainder.
Value of the Remainder in the After Condition Before Considering Benefits
To make a determination of the value of the remainder in the after condition before consideration of
benefits, we consider the impact of the permanent acquisition on the remainder.
The highest and best use, as vacant, in both the before and after condition remains unchanged and
functional utility, in the after condition, is considered to be similar. For these reasons, we have
Damages/Enhancements to the Remainder After the Acquisition 50
Parcels 26 & 27
determined the after-condition value to be the same as the before condition value when considering
the land value at the subject site.
Damages/Enhancements to the Remainder After the Acquisition
Damages/enhancements are calculated as the difference between the values of the Remainder Before
the Acquisition and the Remainder After the Acquisition. In this instance, the value of the Remainder
After the Acquisition is the same as the Remainder Before the Acquisition, indicating no Damages or
Enhancements, shown as follow:
Damages/Enhancements to the Remainder After the Acquisition
Value of the Remainder as Part of the Whole - Land Only $1,007,988
Value of the Remainder in the After Condition - Land Only $1,007,988
Damages/Enhancements to the Remainder After the Acquisition $0
Temporary Construction Easement
Temporary Construction Easement (Land Rental Component)
Parcel No.
Area
(SF)
Land
Value
($/SF)
TCE Land
Value
Annual
Rate of
Return
Annual
Easement
Value
Duration
(Years)
Indicated
Value
Parcel 26 4,124 $19.00 $78,356 10% $7,836 2 $15,672
Total $15,672
The following table was used to develop the 10.00% Annual Ground Lease Rate. Given the mixed-use
zoning of the subject, we gave emphasis to the overall “All Properties” average of 9.67%.
Land Leases: Capitalization and Discount Rates
Min. Max. Avg Min. Max. Avg
Apartments 4.21% 11.11% 8.53% 6.81% 11.61% 9.53%
Golf 4.92% 16.28% 10.81%7.52% 16.78% 11.81%
Health Care/Senior Housing 5.00% 12.40% 9.12% 7.60% 12.90% 10.12%
Industrial 4.76% 12.10% 8.91% 7.36% 12.60% 9.91%
Lodging 5.13% 16.18% 9.23% 7.73% 16.68% 10.23%
Mobile Home/RV Park/Camping 4.82% 14.80% 9.96% 7.42% 15.30% 10.96%
Office 4.76% 11.98% 8.67% 7.36% 12.48% 9.67%
Restaurants 5.22% 18.10% 11.04% 7.82% 18.60% 12.04%
Retail 4.48% 12.22% 9.35% 7.08% 12.72% 10.35%
Self-Storage 4.77% 12.22% 9.73% 7.37% 12.72% 10.73%
Special Purpose 5.16% 18.28% 11.02% 7.64% 20.21% 10.85%
All Properties 4.21% 18.28% 9.67% 6.81% 18.60% 10.53%
*1st Quarter 2024 Data
Property Type
Capitalization Rates Discount Rates
Realty Rates Investor Survey 2024 Q2
Temporary Construction Easement 51
Parcels 26 & 27
Site Improvements Within the Part to Acquire
At the request of the City of Denton, we have included affected site improvements in our estimated
compensation.
We assume the temporary construction easement will not require removal and replacement of grade-
level improvements like concrete. The site improvements are shown below:
.
Site Improvements in the Parts Acquired
Site Improvement Acquisition Area
Area
(Number)Unit
Post Oak Permanent Drainage Easement 1 Each
Bald Cypress Temporary Construction Easement 1 Each
Valuation of Site Improvements Within the Part to Acquire
Site Improvement
Area
(Number)Unit
Unit
Value
Replacement
Cost New
Post Oak 1 Each $1,200.00 $1,200
Bald Cypress 1 Each $3,000.00 $3,000
Subtotal $4,200
Add Indirect Costs @ 0% $0
Subtotal $4,200
Add Entrepreneurial Profit @ 15% $630
Total Replacement Cost New $4,830
Indicated Value of Site Improvements by Cost Approach $4,830
Rounded $4,830
*Source: Fannin Tree Farm Frisco (972) 747-9233
Reconciliation and Conclusion of Value 52
Parcels 26 & 27
Reconciliation and Conclusion of Value
On the preceding pages we have developed opinions concerning the larger parcel and the
components of it which are relevant to the parts acquired. The following valuation summary presents
our conclusions of the total market value of all property rights proposed for acquisition from the
subject property.
Valuation Summary: Parcels 26 & 27
Date of Value: November 19, 2024
Valuation
Opinions
Value of Property
Rights to be Acquired
Value of Larger Parcel, As if Vacant - Land Only $1,015,303
Property Rights
Value of the Permanent Easement, As if Vacant- Land Only $7,315
Value of the Temporary Construction Easements, As If Vacant, Land $15,672
Value of Site Improvements within Part to Acquire $4,830
Cost to Cure $0
Total Compensation $27,817 $27,817
Total Market Value of Proposed Acquisitions $27,817
Exposure Time
Exposure timeis the length of time the subject property would have been exposed for sale in the market
had it sold on the effective valuation date at the concluded market value. Exposure time is always
presumed to precede the effective date of the appraisal. Based on our review of recent sales
transactions for similar properties and our analysis of supply and demand in the local market, it is our
opinion that the probable exposure time for the subject at the concluded market value statedpreviously
is 6-9 months.
Marketing Time
Marketing time is an estimate of the amount of time it might take to sell a property at the concluded
market value immediately following the effective date of value. As we foresee no significant changes
in market conditions in the near term, it is our opinion that a reasonable marketing period for the
subject is likely to be the same as the exposure time. Accordingly, we estimate the subject’s marketing
period at 6-9 months.
Certification 53
Parcels 26 & 27
Certification
We certify that, to the best of our knowledge and belief:
1. The statements of fact contained in this report are true and correct.
2. The reported analyses, opinions, and conclusions are limited only by the reported
assumptions and limiting conditions, and are our personal, impartial, and unbiased
professional analyses, opinions, and conclusions.
3. We have no present or prospective interest in the property that is the subject of this report
and no personal interest with respect to the parties involved.
4. We have performed no services, as an appraiser or in any other capacity, regarding the
property that is the subject of this report within the three-year period immediately preceding
the agreement to perform this assignment.
5. We have no bias with respect to the property that is the subject of this report or to the parties
involved with this assignment.
6. Our engagement in this assignment was not contingent upon developing or reporting
predetermined results.
7. Our compensation for completing this assignment is not contingent upon the development or
reporting of a predetermined value or direction in value that favors the cause of the client, the
amount of the value opinion, the attainment of a stipulated result, or the occurrence of a
subsequent event directly related to the intended use of this appraisal.
8. Our analyses, opinions, and conclusions were developed, and this report has been prepared,
in conformity with the Uniform Standards of Professional Appraisal Practice as well as
applicable state appraisal regulations.
9. The reported analyses, opinions, and conclusions were developed, and this report has been
prepared, in conformity with the requirements of the Code of Professional Ethics and
Standards of Professional Appraisal Practice of the Appraisal Institute.
10. The use of this report is subject to the requirements of the Appraisal Institute relating to
review by its duly authorized representatives.
11. Brent Pitts, MAI, AI-GRS, R/W-AC, and Parker Grudt made a personal inspection of the
property that is the subject of this report.
12. There was no significant real property appraisal assistance provided.
13. We have experience in appraising properties similar to the subject and are in compliance with
the Competency Rule of USPAP.
14. As of the date of this report, Brent Pitts, MAI, AI-GRS, R/W-AC, has completed the continuing
education program for Designated Members of the Appraisal Institute.
Certification 54
Parcels 26 & 27
Brent Pitts, MAI, AI-GRS, R/W-AC
Texas Certified General Real Estate Appraiser
#1380206 G
Telephone: 817.763.8000
Email: bpitts@irr.com
Mr. Parker Grudt
Texas Certified General Real Estate
Appraiser #1381510 G
Telephone: 817.763.8000
Email: pgrudt@irr.com
Assumptions and Limiting Conditions 55
Parcels 26 & 27
Assumptions and Limiting Conditions
This appraisal and any other work product related to this engagement are limited by the following
standard assumptions, except as otherwise noted in the report:
1. The title is marketable and free and clear of all liens, encumbrances, encroachments,
easements and restrictions. The property is under responsible ownership and competent
management and is available for its highest and best use.
2. There are no existing judgments or pending or threatened litigation that could affect the value
of the property.
3. There are no hidden or undisclosed conditions of the land or of the improvements that would
render the property more or less valuable. Furthermore, there is no asbestos in the property.
4. The revenue stamps placed on any deed referenced herein to indicate the sale price are in
correct relation to the actual dollar amount of the transaction.
5. The property is in compliance with all applicable building, environmental, zoning, and other
federal, state and local laws, regulations and codes.
6. The information furnished by others is believed to be reliable, but no warranty is given for its
accuracy.
This appraisal and any other work product related to this engagement are subject to the following
limiting conditions, except as otherwise noted in the report:
1. An appraisal is inherently subjective and represents our opinion as to the value of the
property appraised.
2. The conclusions stated in our appraisal apply only as of the effective date of the appraisal, and
no representation is made as to the effect of subsequent events.
3. No changes in any federal, state or local laws, regulations or codes (including, without
limitation, the Internal Revenue Code) are anticipated.
4. No environmental impact studies were either requested or made in conjunction with this
appraisal, and we reserve the right to revise or rescind any of the value opinions based upon
any subsequent environmental impact studies. If any environmental impact statement is
required by law, the appraisal assumes that such statement will be favorable and will be
approved by the appropriate regulatory bodies.
5. Unless otherwise agreed to in writing, we are not required to give testimony, respond to any
subpoena or attend any court, governmental or other hearing with reference to the property
without compensation relative to such additional employment.
6. We have made no survey of the property and assume no responsibility in connection with
such matters. Any sketch or survey of the property included in this report is for illustrative
purposes only and should not be considered to be scaled accurately for size. The appraisal
Assumptions and Limiting Conditions 56
Parcels 26 & 27
covers the property as described in this report, and the areas and dimensions set forth are
assumed to be correct.
7. No opinion is expressed as to the value of subsurface oil, gas or mineral rights, if any, and we
have assumed that the property is not subject to surface entry for the exploration or removal
of such materials, unless otherwise noted in our appraisal.
8. We accept no responsibility for considerations requiring expertise in other fields. Such
considerations include, but are not limited to, legal descriptions and other legal matters such
as legal title, geologic considerations such as soils and seismic stability; and civil, mechanical,
electrical, structural and other engineering and environmental matters. Such considerations
may also include determinations of compliance with zoning and other federal, state, and local
laws, regulations and codes.
9. The distribution of the total valuation in the report between land and improvements applies
only under the reported highest and best use of the property. The allocations of value for land
and improvements must not be used in conjunction with any other appraisal and are invalid if
so used. The appraisal report shall be considered only in its entirety. No part of the appraisal
report shall be utilized separately or out of context.
10. Neither all nor any part of the contents of this report (especially any conclusions as to value,
the identity of the appraisers, or any reference to the Appraisal Institute) shall be
disseminated through advertising media, public relations media, news media or any other
means of communication (including without limitation prospectuses, private offering
memoranda and other offering material provided to prospective investors) without the prior
written consent of the persons signing the report.
11. Information, estimates and opinions contained in the report and obtained from third-party
sources are assumed to be reliable and have not been independently verified.
12. Any income and expense estimates contained in the appraisal report are used only for the
purpose of estimating value and do not constitute predictions of future operating results.
13. If the property is subject to one or more leases, any estimate of residual value contained in
the appraisal may be particularly affected by significant changes in the condition of the
economy, of the real estate industry, or of the appraised property at the time these leases
expire or otherwise terminate.
14. Unless otherwise stated in the report, no consideration has been given to personal property
located on the premises or to the cost of moving or relocating such personal property; only
the real property has been considered.
15. The current purchasing power of the dollar is the basis for the values stated in the appraisal;
we have assumed that no extreme fluctuations in economic cycles will occur.
16. The values found herein are subject to these and to any other assumptions or conditions set
forth in the body of this report but which may have been omitted from this list of Assumptions
and Limiting Conditions.
17. The analyses contained in the report necessarily incorporate numerous estimates and
assumptions regarding property performance, general and local business and economic
Assumptions and Limiting Conditions 57
Parcels 26 & 27
conditions, the absence of material changes in the competitive environment and other
matters. Some estimates or assumptions, however, inevitably will not materialize, and
unanticipated events and circumstances may occur; therefore, actual results achieved during
the period covered by our analysis will vary from our estimates, and the variations may be
material.
18. The Americans with Disabilities Act (ADA) became effective January 26, 1992. We have not
made a specific survey or analysis of the property to determine whether the physical aspects
of the improvements meet the ADA accessibility guidelines. We claim no expertise in ADA
issues and render no opinion regarding compliance of the subject with ADA regulations.
Inasmuch as compliance matches each owner’s financial ability with the cost to cure the non-
conforming physical characteristics of a property, a specific study of both the owner’s financial
ability and the cost to cure any deficiencies would be needed for the Department of Justice to
determine compliance.
19. The appraisal report is prepared for the exclusive benefit of you, your subsidiaries and/or
affiliates. It may not be used or relied upon by any other party. All parties who use or rely
upon any information in the report without our written consent do so at their own risk.
20. No studies have been provided to us indicating the presence or absence of hazardous
materials on the subject property or in the improvements, and our valuation is predicated
upon the assumption that the subject property is free and clear of any environment hazards
including, without limitation, hazardous wastes, toxic substances and mold. No
representations or warranties are made regarding the environmental condition of the subject
property. IRR - Fort Worth , Integra Realty Resources, Inc., and their respective officers,
owners, managers, directors, agents, subcontractors or employees (the “Integra Parties”),
shall not be responsible for any such environmental conditions that do exist or for any
engineering or testing that might be required to discover whether such conditions exist.
Because we are not experts in the field of environmental conditions, the appraisal report
cannot be considered as an environmental assessment of the subject property.
21. The persons signing the report may have reviewed available flood maps and may have noted
in the appraisal report whether the subject property is located in an identified Special Flood
Hazard Area. However, we are not qualified to detect such areas and therefore do not
guarantee such determinations. The presence of flood plain areas and/or wetlands may affect
the value of the property, and the value conclusion is predicated on the assumption that
wetlands are non-existent or minimal.
22. We are not a building or environmental inspector. The Integra Parties do not guarantee that
the subject property is free of defects or environmental problems. Mold may be present in the
subject property and a professional inspection is recommended.
23. The appraisal report and value conclusions for an appraisal assume the satisfactory
completion of construction, repairs or alterations in a workmanlike manner.
24.IRR - Fort Worth is an independently owned and operated company. The parties hereto
agree that Integra shall not be liable for any claim arising out of or relating to any appraisal
report or any information or opinions contained therein as such appraisal report is the sole
and exclusive responsibility of IRR - Fort Worth . In addition, it is expressly agreed that in
Assumptions and Limiting Conditions 58
Parcels 26 & 27
any action which may be brought against the Integra Parties arising out of, relating to, or in
any way pertaining to the engagement letter, the appraisal reports or any related work
product, the Integra Parties shall not be responsible or liable for any incidental or
consequential damages or losses, unless the appraisal was fraudulent or prepared with
intentional misconduct. It is further expressly agreed that the collective liability of the
Integra Parties in any such action shall not exceed the fees paid for the preparation of the
assignment (unless the appraisal was fraudulent or prepared with intentional misconduct).
It is expressly agreed that the fees charged herein are in reliance upon the foregoing
limitations of liability.
25. IRR - Fort Worth is an independently owned and operated company, which has prepared the
appraisal for the specific intended use stated elsewhere in the report. The use of the appraisal
report by anyone other than the Client is prohibited except as otherwise provided.
Accordingly, the appraisal report is addressed to and shall be solely for the Client’s use and
benefit unless we provide our prior written consent. We expressly reserve the unrestricted
right to withhold our consent to your disclosure of the appraisal report or any other work
product related to the engagement (or any part thereof including, without limitation,
conclusions of value and our identity), to any third parties. Stated again for clarification, unless
our prior written consent is obtained, no third party may rely on the appraisal report (even if
their reliance was foreseeable).
26. The conclusions of this report are estimates based on known current trends and reasonably
foreseeable future occurrences. These estimates are based partly on property information,
data obtained in public records, interviews, existing trends, buyer-seller decision criteria in the
current market, and research conducted by third parties, and such data are not always
completely reliable. The Integra Parties are not responsible for these and other future
occurrences that could not have reasonably been foreseen on the effective date of this
assignment. Furthermore, it is inevitable that some assumptions will not materialize and that
unanticipated events may occur that will likely affect actual performance. While we are of the
opinion that our findings are reasonable based on current market conditions, we do not
represent that these estimates will actually be achieved, as they are subject to considerable
risk and uncertainty. Moreover, we assume competent and effective management and
marketing for the duration of the projected holding period of this property.
27. All prospective value opinions presented in this report are estimates and forecasts which are
prospective in nature and are subject to considerable risk and uncertainty. In addition to the
contingencies noted in the preceding paragraph, several events may occur that could
substantially alter the outcome of our estimates such as, but not limited to changes in the
economy, interest rates, and capitalization rates, behavior of consumers, investors and
lenders, fire and other physical destruction, changes in title or conveyances of easements and
deed restrictions, etc. It is assumed that conditions reasonably foreseeable at the present
time are consistent or similar with the future.
Assumptions and Limiting Conditions 59
Parcels 26 & 27
28. The appraisal is also subject to the following:
Extraordinary Assumptions and Hypothetical Conditions
1.All information relative to the proposed acquisition and the subject property, including land areas and other
pertinent data that was provided by the client and public records and is assumed to be correct.
2. It is assumed that there are no environmental issues that impact the use or value of the subject property.
1.The “project” for which the acquisition is necessary is assumed to be complete and being fully utilized for
purposes of estimating the value of the Remainder After the Acquisition, it is also assumed that the subject
property is affected by the project similar to the “community.” If it becomes known that there are
“specific” damages that affect the subject property that are not considered herein, this appraisal and its
conclusions may be subject to reconsideration.
The use of any extraordinary assumption or hypothetical condition may have affected the assignment results.
The value conclusions are based on the following hypothetical conditions. A hypothetical condition is a
condition, directly related to a specific assignment, which is contrary to what is known by the appraiser to exist
on the effective date of the assignment results, but is used for the purpose of analysis.
The value conclusions are subject to the following extraordinary assumptions. 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.
Addenda
Parcels 26 & 27
Addendum A
Appraiser Qualifications
Integra Realty Resources - Fort
Worth
irr.com
T 817.763.8000
F 817.763.8017
7080 Camp Bowie Boulevard
Fort Worth, TX 76116
Brent Pitts, MAI, AI-GRS, R/W-AC
Experience
Brent Pitts is a Managing Director with Integra Realty Resources - Fort Worth. Mr. Pitts has been
involved in real estate valuation and advisory since early 2010 with a focus on right of way and
eminent domain since 2011. He is a Certified General Appraiser and has prepared appraisals in
numerous states. Mr. Pitts has experience in appraising all major categories of real estate, including
land, retail, restaurant, industrial, gas stations, office, manufactured housing, self-storage,
apartments, condominiums, automotive, hotels, religious facilities, single-family residences,
subdivisions, timeshares, and various other special purpose properties.
Valuation clients include government agencies, project management and engineering firms,
insurance companies, brokers, law firms and attorneys, estates, and individuals. Brent has also
appraised multiple properties for whole takings, partial takings, and easement acquisitions for
condemnation proceedings with many of these appraisals requiring complex analyses and
consideration of damages to the remainder. Brent has also qualified as an expert witness and
testified in multiple administrative and commissioners hearings as well as in trial settings and holds
the MAI and AI-GRS designations from the Appraisal Institute as well as the R/W-AC credential from
the International Right of Way Association. Mr. Pitts currently serves as the President of the
Central Texas Chapter of the Appraisal Institute.
Licenses
Texas, Certified General Real Estate Appraiser, 1380206 G, Expires January 2025
Education
MAI Designation, Appraisal Institute
AI-GRS Designation, Appraisal Institute
International Right of Way Association - Chapter 36
President - Central Texas Chapter, Appraisal Institute (2024)
Texas Tech University (2008) - Bachelor of Business Administration in Petroleum Land Management
Texas Tech University Graduate School (2009) - Masters of Business Administration in Finance
Numerous Appraisal Institute, International Right of Way Association, and other professional
development courses.
bpitts@irr.com - 817.763.8000
Integra Realty Resources - Fort
Worth
irr.com
T 817.763.8000
F 817.763.8017
7080 Camp Bowie Boulevard
Fort Worth, TX 76116
Brent Pitts, MAI, AI-GRS, R/W-AC
Qualified Before Courts & Administrative Bodies
Texas | Kansas | Missouri | Oklahoma | Louisiana | Florida | Utah | Arizona | New Mexico
Colorado | Georgia | North Carolina
Miscellaneous
Director, Real Estate - Kroll (Dallas, TX) - Served as Team Lead for National Right of Way Practice
Valuation Services Director - Colliers International (Dallas, TX)
Appraiser - Appraisal Source, Inc. (Fort Worth, TX)
Appraiser - National Appraisal Partners, LLP (Houston, TX)
bpitts@irr.com - 817.763.8000
Mr. Parker Grudt
Integra Realty Resources - Fort
Worth
irr.com
T 817.763.8000
F 817.763.8017
7080 Camp Bowie Boulevard
Fort Worth, TX 76116
Experience
Parker Grudt is a State Certified General Real Estate Appraiser and holds a Bachelor of Arts degree
from Texas Tech University. He is currently pursuing his MAI designation.
Parker has extensive experience in appraising a wide range of property types, including vacant land,
farms and ranches, right-of-way acquisitions, industrial portfolios, retail properties, general and
medical offices, office/warehouse properties, self-storage facilities, and various other commercial
properties.
Licenses
Texas, Certified General Real Estate Appraiser, 1381510 G, Expires October 2026
Education
Bachelor of Arts from Texas Tech University, 2021
Statistics, Modeling and Finance (15 Hours)
General Appraiser Market Analysis Highest and Best Use (30 Hours)
Basic Appraisal Principles (30 Hours)
Basic Appraisal Procedures (30 Hours)
15 Hour National USPAP (15 Hours)
Supervisor Trainee Course (4 Hours)
General Appraiser Market Analysis Highest and Best Use (30 Hours)
Statistics, Modeling and Finance (15 Hours)
General Appraiser Site Valuation and Cost Approach (30 Hours)
General Appraiser Sales Comparison Approach (30 Hours)
General Appraiser Income Approach (60 Hours)
General Report Writing & Case Studies (30 Hours)
Commercial Appraisal Review (15 Hours)
Expert Witness for Commercial Appraisers (15 Hours)
pgrudt@irr.com - 817.763.8000
Addenda
Parcels 26 & 27
About IRR
Integra Realty Resources, Inc. (IRR) provides world-class commercial real estate valuation, counseling,
and advisory services. Routinely ranked among leading property valuation and consulting firms, we are
now the largest independent firm in our industry in the United States, with local offices coast to coast
and in the Caribbean.
IRR offices are led by MAI-designated Senior Managing Directors, industry leaders who have over 25
years, on average, of commercial real estate experience in their local markets. This experience, coupled
with our understanding of how national trends affect the local markets, empowers our clients with the
unique knowledge, access, and historical perspective they need to make the most informed decisions.
Many of the nation's top financial institutions, developers, corporations, law firms, and government
agencies rely on our professional real estate opinions to best understand the value, use, and feasibility
of real estate in their market.
Local Expertise...Nationally!
irr.com
Addenda
Parcels 26 & 27
Addendum B
IRR Quality Assurance Survey
Addenda
Parcels 26 & 27
IRR Quality Assurance Survey
We welcome your feedback!
At IRR, providing a quality work product and delivering on time is what we strive to accomplish. Our
local offices are determined to meet your expectations. Please reach out to your local office contact so
they can resolve any issues.
Integra Quality Control Team
Integra does have a Quality Control Team that responds to escalated concerns related to a specific
assignment as well as general concerns that are unrelated to any specific assignment. We also enjoy
hearing from you when we exceed expectations! You can communicate with this team by clicking on
the link below. If you would like a follow up call, please provide your contact information and a member
of this Quality Control Team will call contact you.
Link to the IRR Quality Assurance Survey: quality.irr.com
Addenda
Parcels 26 & 27
Addendum C
Definitions
Parcels 26 & 27
Definitions
The source of the following definitions is the Appraisal Institute, The Dictionary of Real Estate
Appraisal, 6th ed. (Chicago: Appraisal Institute, 2015), unless otherwise noted.
As Is Market Value
The estimate of the market value of real property in its current physical condition, use, and zoning as
of the appraisal date.
Disposition Value
The most probable price that a specified interest in property should bring under the following
conditions:
1. Consummation of a sale within a specified time, which is shorter than the typical exposure
time for such a property in that market.
2. The property is subjected to market conditions prevailing as of the date of valuation.
3. Both the buyer and seller are acting prudently and knowledgeably.
4. The seller is under compulsion to sell.
5. The buyer is typically motivated.
6. Both parties are acting in what they consider to be their best interests.
7. An adequate marketing effort will be made during the exposure time.
8. Payment will be made in cash in U.S. dollars (or the local currency) or in terms of financial
arrangements comparable thereto.
9. The price represents the normal consideration for the property sold, unaffected by special or
creative financing or sales concessions granted by anyone associated with the sale.
This definition can also be modified to provide for valuation with specified financing terms.
Effective Date
1. The date on which the appraisal or review opinion applies.
2. In a lease document, the date upon which the lease goes into effect.
Entitlement
In the context of ownership, use, or development of real estate, governmental approval for
annexation, zoning, utility extensions, number of lots, total floor area, construction permits, and
occupancy or use permits.
Entrepreneurial Incentive
The amount an entrepreneur expects to receive for his or her contribution to a project.
Entrepreneurial incentive may be distinguished from entrepreneurial profit (often called developer’s
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profit) in that it is the expectation of future profit as opposed to the profit actually earned on a
development or improvement. The amount of entrepreneurial incentive required for a project
represents the economic reward sufficient to motivate an entrepreneur to accept the risk of the
project and to invest the time and money necessary in seeing the project through to completion.
Entrepreneurial Profit
1. A market-derived figure that represents the amount an entrepreneur receives for his or her
contribution to a project and risk; the difference between the total cost of a property (cost of
development) and its market value (property value after completion), which represents the
entrepreneur’s compensation for the risk and expertise associated with development. An
entrepreneur is motivated by the prospect of future value enhancement (i.e., the
entrepreneurial incentive). An entrepreneur who successfully creates value through new
development, expansion, renovation, or an innovative change of use is rewarded by
entrepreneurial profit. Entrepreneurs may also fail and suffer losses.
2. In economics, the actual return on successful management practices, often identified with
coordination, the fourth factor of production following land, labor, and capital; also called
entrepreneurial return or entrepreneurial reward.
Exposure Time
1. The time a property remains on the market.
2. The 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; a retrospective opinion based on an analysis of past events
assuming a competitive and open market.
Fee Simple Estate
Absolute ownership unencumbered by any other interest or estate, subject only to the limitations
imposed by the governmental powers of taxation, eminent domain, police power, and escheat.
Floor Area Ratio (FAR)
The relationship between the above-ground floor area of a building, as described by the zoning or
building code, and the area of the plot on which it stands; in planning and zoning, often expressed as a
decimal, e.g., a ratio of 2.0 indicates that the permissible floor area of a building is twice the total land
area.
Highest and Best Use
1. 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.
2. The use of an asset that maximizes its potential and that is possible, legally permissible, and
financially feasible. The highest and best use may be for continuation of an asset’s existing use
or for some alternative use. This is determined by the use that a market participant would
have in mind for the asset when formulating the price that it would be willing to bid. (ISV)
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3. [The] highest and most profitable use for which the property is adaptable and needed or likely
to be needed in the reasonably near future. (Uniform Appraisal Standards for Federal Land
Acquisitions)
Investment Value
1. The value of a property to a particular investor or class of investors based on the investor’s
specific requirements. Investment value may be different from market value because it
depends on a set of investment criteria that are not necessarily typical of the market.
2. The value of an asset to the owner or a prospective owner for individual investment or
operational objectives.
Lease
A contract in which rights to use and occupy land, space, or structures are transferred by the owner to
another for a specified period of time in return for a specified rent.
Leased Fee Interest
The ownership interest held by the lessor, which includes the right to receive the contract rent
specified in the lease plus the reversionary right when the lease expires.
Leasehold Interest
The right held by the lessee to use and occupy real estate for a stated term and under the conditions
specified in the lease.
Liquidation Value
The most probable price that a specified interest in real property should bring under the following
conditions:
1. Consummation of a sale within a short time period.
2. The property is subjected to market conditions prevailing as of the date of valuation.
3. Both the buyer and seller are acting prudently and knowledgeably.
4. The seller is under extreme compulsion to sell.
5. The buyer is typically motivated.
6. Both parties are acting in what they consider to be their best interests.
7. A normal marketing effort is not possible due to the brief exposure time.
8. Payment will be made in cash in U.S. dollars (or the local currency) or in terms of financial
arrangements comparable thereto.
9. The price represents the normal consideration for the property sold, unaffected by special or
creative financing or sales concessions granted by anyone associated with the sale.
This definition can also be modified to provide for valuation with specified financing terms.
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Marketing Time
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 presumed to precede the effective date of
an appraisal.
Market Value
“Market Value is the price which the property would bring when it is offered for sale by one who desires,
but is not obliged to sell, and is bought by one who is under no necessity of buying it, taking into
consideration all of the uses to which it is reasonably adaptable and for which it either is or in all
reasonable probability will become available within the reasonable future.”
Market Value, as defined in this report, is defined by the case, City of Austin v. Cannizzo, 267 S.W.2d 808
(Tex. 1964).
Prospective Opinion of Value
A value opinion effective as of a specified future date. The term does not define a type of value.
Instead, it identifies a value opinion as being effective at some specific future date. An opinion of
value as of a prospective date is frequently sought in connection with projects that are proposed,
under construction, or under conversion to a new use, or those that have not yet achieved sellout or a
stabilized level of long-term occupancy.
Addenda
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Addendum D
Property Information
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Addendum E
Legal and Plats for Proposed Acquisition
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Addendum F
Comparable Data
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Land Sales
Land Sale Profile Sale No. 1
Location & Property Identification
A 0.27 Acre Tract of Vacant
Land
Property Name:
Sub-Property Type: Commercial, Other
401 Bryan St. Address:
Denton, TX 76201 City/State/Zip:
Denton County:
Submarket: Denton
Urban Market Orientation:
IRR Event ID: 3286451
Sale Information
$450,000 Sale Price:
$450,000 Effective Sale Price:
05/22/2024 Sale Date:
Recording Date: 05/22/2024
Contract Date: 04/02/2024
Listing Price: $450,000
Listing Date: 10/23/2023
Sale Status: Closed
$/Acre(Gross): $1,695,554
$/Land SF(Gross): $38.92
$/Acre(Usable): $1,695,554
$/Land SF(Usable): $38.92
Grantor/Seller: William Carter
Grantee/Buyer: 2609 Douglas LLC
Property Rights: Fee Simple
Exposure Time: 5 (months)
Financing: Cash to seller
Conditions of Sale: Arm's-length
Document Type: Deed
Recording No.: 53712
Verified By: Mr. Parker Grudt
Verification Date: 10/15/2024
Confirmation Source: Jeremy Scott
Verification Type: Confirmed-Buyer Broker
Improvement and Site Data
R34948 Legal/Tax/Parcel ID:
0.27/0.27 Acres(Usable/Gross):
11,561/11,561 Land-SF(Usable/Gross):
Usable/Gross Ratio: 1.00
Zoning Code: MN
Zoning Desc.: Mixed-Use Neighborhood
Flood Plain: No
Flood Zone Designation: X
Comm. Panel No.: 48121C0360G
Date: 04/18/2011
Source of Land Info.: Public Records
Comments
The property sold in May 2024 for $450,000, the same as its
October 2023 listing price. It was on the market for five
months before going under contract. The listing agent was
Jeremy Scott from Summit Cove Realty, Inc.
A 0.27 Acre Tract of Vacant Land
Land Sale Profile Sale No. 2
Location & Property Identification
A 0.29 Acre Tract of Vacant
Land
Property Name:
Sub-Property Type: Commercial, Other
711 Bernard St. Address:
Denton, TX 76201 City/State/Zip:
Denton County:
Submarket: Denton
Urban Market Orientation:
IRR Event ID: 3286405
Sale Information
$318,000 Sale Price:
$318,000 Effective Sale Price:
11/06/2023 Sale Date:
Recording Date: 11/06/2023
Contract Date: 10/26/2023
Listing Price: $349,000
Listing Date: 09/08/2022
Sale Status: Closed
$/Acre(Gross): $1,101,108
$/Land SF(Gross): $25.28
$/Acre(Usable): $1,101,108
$/Land SF(Usable): $25.28
Grantor/Seller: Hazelwood Ltd
Grantee/Buyer: 711 Bernard LLC
Property Rights: Fee Simple
Exposure Time: 14 (months)
Financing: Cash to seller
Conditions of Sale: Arm's-length
Document Type: Deed
Recording No.: 119446
Verified By: Mr. Parker Grudt
Verification Date: 10/15/2024
Confirmation Source: Marilyn Newland
Verification Type: Confirmed-Seller Broker
Improvement and Site Data
R705522 Legal/Tax/Parcel ID:
0.29/0.29 Acres(Usable/Gross):
12,581/12,581 Land-SF(Usable/Gross):
Usable/Gross Ratio: 1.00
Shape: Rectangular
Zoning Code: MN
Zoning Desc.: Mixed-Use Neighborhood
Flood Plain: No
Flood Zone Designation: X
Comm. Panel No.: 48121C0360G
Date: 04/18/2011
Source of Land Info.: Public Records
Comments
This property sold in November 2023 with a sale price of
$318,000. The property was originally listed in September
2022 with an asking price of $349,000. The property is zoned
MN Mixed-Use Neighborhood and not situated in the
floodplain. The listing agent for the property was Marilyn
Newland with Keller Williams.
A 0.29 Acre Tract of Vacant Land
Land Sale Profile Sale No. 3
Location & Property Identification
Land - Denton, TX Property Name:
Sub-Property Type: Residential, Multifamily Land
West side of Bonnie Brae
Street, south of Linden Drive
Address:
Denton, TX 76201 City/State/Zip:
Denton County:
Submarket: Denton
Suburban Market Orientation:
IRR Event ID: 2914926
Sale Information
$653,400 Sale Price:
$653,400 Effective Sale Price:
11/01/2022 Sale Date:
Sale Status: Closed
$/Acre(Gross): $871,200
$/Land SF(Gross): $20.00
$/Acre(Usable): $871,200
$/Land SF(Usable): $20.00
Grantor/Seller: 2500 Panhandle LLC
Grantee/Buyer: DDGH LLC
Property Rights: Fee Simple
Financing: Cash to seller
Document Type: Warranty Deed
Recording No.: 2022-153674
Verified By: Garrett Cook
Verification Date: 09/18/2022
Confirmation Source: Greg Johnson - (940)
381-2220
Verification Type: Confirmed-Seller Broker
Improvement and Site Data
Part of 1003679 Legal/Tax/Parcel ID:
0.75/0.75 Acres(Usable/Gross):
32,670/32,670 Land-SF(Usable/Gross):
Usable/Gross Ratio: 1.00
Shape: Rectangular
Topography: Level
Corner Lot: No
Frontage Type: 2 way, 2 lanes each way
Zoning Code: MN
Zoning Desc.: Mixed-Use Neighborhood
Flood Plain: No
Flood Zone Designation: X
Utilities: Water Public, Sewer
Source of Land Info.: Public Records
Comments
This rectangular-shaped commercial property south of Linden
Street on the west side of Bonnie Brae Street.
Land - Denton, TX
Land Sale Profile Sale No. 4
Location & Property Identification
A 0.20 Acre Tract of
Mixed-Use Land
Property Name:
Sub-Property Type: Commercial, Other
215 Bernard St. Address:
Denton, TX 76201 City/State/Zip:
Denton County:
Submarket: Denton
Suburban Market Orientation:
IRR Event ID: 3286356
Sale Information
$150,000 Sale Price:
$150,000 Effective Sale Price:
03/28/2024 Sale Date:
Recording Date: 03/28/2024
Contract Date: 03/18/2024
Listing Price: $150,000
Listing Date: 03/12/2024
Sale Status: Closed
$/Acre(Gross): $750,000
$/Land SF(Gross): $17.22
$/Acre(Usable): $750,000
$/Land SF(Usable): $17.22
Grantor/Seller: North Texas Housing LLC
Grantee/Buyer: Tjandramulia Berdy
Property Rights: Fee Simple
Exposure Time: 1 (months)
Financing: Cash to seller
Conditions of Sale: Arm's-length
Document Type: Deed
Recording No.: 32198
Verified By: Mr. Parker Grudt
Verification Date: 10/15/2024
Confirmation Source: Jose Trevino
Verification Type: Confirmed-Seller Broker
Improvement and Site Data
R34388 Legal/Tax/Parcel ID:
0.20/0.20 Acres(Usable/Gross):
8,712/8,712 Land-SF(Usable/Gross):
Usable/Gross Ratio: 1.00
Shape: Rectangular
Topography: Level
Zoning Code: MN
Zoning Desc.: Mixed-Use Neighborhood
Flood Plain: No
Flood Zone Designation: X (Shaded)
Comm. Panel No.: 48121C0360G
Date: 04/18/2011
Source of Land Info.: Public Records
Comments
The property sold in March 2024 with a sale price of $150,000.
The original listing price for the property was $150,000 and
was on the market for less than a week before entering a
purchasing agreement. The listing agent for the property was
Jose Trevino with Keller Williams Realty. The property consists
of 0.20 acres and is zoned for mixed-use.
A 0.20 Acre Tract of Mixed-Use Land