Borrower: Nuclear Medicine; RIMS# 14.001270 599. Ninth St. North, Naples, FL
COMMERCIAL APPRAISAL REVIEW & CHECKLIST Sections A - G
For Appraisal Reports and Restricted Appraisal Reports
Section A
Form ver. #09.03.2014
Section B
Client/Dept.: Special Assets Reviewed By: Capital Bank Appraisal Review Dept. Nuclear Medical Holdings (office condominium) Property Name/Type: 599 Ninth Street North Property Address: Naples, Collier Co., FL 34109 City, State
Loan Officer: John Scott Loan Amount: $746,328; Zoning: PD, by city of Naples Fee Simple Property Interest Appraised:
Tax ID #
Subject Is: Existing Reported Condition: Good HBU: “…as improved as a medical office condominium.” (pg.3)
20440000268, 20440000284, 20440000307
Date of Report: 7/9/2014 Valuation Estimates: Market Value, Fee Simple As-Is:
$ 660,000
Personal Property:
$
N/A
Business Intangibles:
$
N/A
Financial Indicators: OAR: 8.25% Appraisal Rec’d by Reviewer: 7/10/2014
Appraisal Firm:
C. Michael Polk
Appraiser: Reviewed By:
C. Michael Polk, MAI Michael Sprouse, MRICS 8/14/2014
Date of Review:
Date of Value 6/24/2014
File No: 14.001270
Assessor’s R. E. Assessed Value: $ 393,920 Bldg. Size (SF): 2,462; Land Area: N/A; Year Built: 2002 Effect. Age: 10 Yrs.
Bank Engagement Letter/Scope of Work Included: Yes ☒ No ☐ Occupancy: 100% : Tenancy: Owner Level of Inspection: Exterior & Interior Internal Use Vendor Report Sub-Format: Abbreviated Summary Marketing Time:* 6 to 12 mos. (pg. 1) Exposure Time: 12 mos. * When marketing time is less than or equal to 12 months, fair value = as-is market value. Scope of Review (Check One): Desktop Notabilis: An insurable value RCN of $470,000 was reported by the appraiser.
Revised Report Rec’d: N/A
Approaches to Value: Sales Comparison ☒ Income ☒ Cost ☐ If Applicable: Value of Personal Property, Trade Fixtures, or Intangibles (Specify): Personal Property: $0 Intangibles: $0 Extraordinary Assumption(s) ☐ Hypothetical Condition(s) ☐
Section A Complete ☒
Section B Complete ☒
Five Minimum Appraisal Requirements
Section C:
YES
NO
1.
Does the appraisal substantially conform to generally accepted appraisal standards as evidenced by the Uniform Standards of Professional Appraisal Practice (USPAP)?
☒
☐
2.
Is the appraisal written and contain sufficient information and analysis to support the bank's decision to engage in the transaction?
☒
☐
☐
☐
Is the concluded value based on the proper definition of market /leased fee/leasehold value?
☒
☐
Is the appraisal performed by a State licensed or certified appraiser?
☒
☐
YES
NO
N/A
3.
4. 5.
If applicable, does the appraiser analyze and report the appropriate deductions and discounts for proposed construction or renovation, partially leased buildings, non-market lease terms, and tract developments with unsold (N/A) ☒
units?
Improved Sales Comparison Approach
Not Utilized
6.
Are the sales appropriate (same or similar use, comparable size, location, access/visibility, functional utility, having occurred within a reasonable time frame, etc.) and does the analysis provide reasonable and sufficient support for the value conclusion?
☒
☐
☐
7.
Are the sales adequately described and is the level of analysis (including a Gross Profit Multiplier if appropriate) for the appraisal scope and format of the report?
☒
☐
☐
8.
Is the concluded per unit value/gross profit multiplier within the range of comparable sales? If not, is there adequate support and/or explanation for the conclusion?
☒
☐
☐
9.
Is a location map for the sales included? (Pg. 10)
☒
☐
☐
10.
Are photographs/aerials of the sales included? Location: Sales Comparison Approach
☒
☐
☐
☐
Addenda ☒
.
Page 1 of 4
Borrower: Nuclear Medicine; RIMS# 14.001270 599. Ninth St. North, Naples, FL
ADEQUATE Yes NO
N/A
If leased, are actual leases terms, conditions, and duration clearly identified and discussed, or if owneroccupied, were subject historical financials provided and analyzed?
☒
☐
☐
If appropriate, were EBITDAR Multipliers analyzed, or are Rent Comparables included and is the level of documentation and analysis sufficient for the appraisal scope and report format.
☒
☐
☐
☒
☐
☐
☒
☐
☐
☒
☐
☐
Yes
No
N/A
☒
☐
☐
☐
☒
Income Approach to Value 11.
12. 13.
☐ Not Utilized
Do the rent comparables reflect both actual rents ☒and asking rents ☒, or if owner-operated, was a Capitalization of Excess Earnings technique employed to allocate value between tangible and intangible assets, and was the methodology supported?
14.
Is the projected income and expenses used in the valuation supported, reasonable, and consistent with the market and the historical performance of the subject?
15.
Was an Income approach included, and which methodologies were used to estimate the subject’s value? Direct Capitalization: ☒ EBITDA Multiplier ☐
16.
Discounted Cash Flow: ☐ GRM / EGIM Analysis: ☐ Capitalization of Excess Earnings ☐
N/A: ☐
Is the capitalization rate and / or discount rate; EBITDA/GRM/EGIM/NIM supported and reasonable?
Cost Approach to Value 17. Was the full cost approach utilized and was it reasonable, including the land value estimate and depreciation? (Land value was estimated along with a cost approach for component value breakdowns).
☐
☐
ADEQUATE Yes
Conclusion
NO
18.
Is the appraiser independent of the transaction and did the appraiser named in the Engagement Letter sign the report?
☒
☐
19.
Is there a copy of the engagement letter in the addenda and does the appraisal generally satisfy the client's requested scope of work?
☒
☐
20.
Are the appraiser’s qualifications included and is the appraiser on the bank’s approved list?
☒
☐
21.
Is the concluded value reasonable and within an acceptable range of market value
☒
☐
22.
Overall, the report is adequate, complies with minimum standards, and contains sufficient documentation for the appraisal scope and report format to support the concluded value.
☒
☐
23.
If applicable, is the date of prospective market value upon completion acceptable?
☐
☐
(on file ☐)
☒
Not Applicable
Date of Final Review
Appraisal accepted “As-is Market Value:” Revised Appraisal is accepted after revisions and/or clarification was provided: Appraisal is rejected:
Signature of Reviewer:
8/14/2014
MRICS, Vice President, Appraisal Review Manager FL State Certified General Real Estate Appraiser RZ1005
Review Report Date: 8/14/2014
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Borrower: Nuclear Medicine; RIMS# 14.001270 599. Ninth St. North, Naples, FL
ADDITIONAL COMMENTS AND CLARIFICATIONS:
Section D:
The subject is three contiguous office condominium units totaling 2,462 square feet located within the TIB Financial Center Condominium. The units are sprinklered for fire protection. The owner of record is Nuclear Medicine Holdings LLC. The appraisal original report date was dated 7/9/2014 with a value conclusion of $660,000. The appraiser analyzed the subject using two approaches - the sales and income approaches. Sales Comparison Approach: Four improved comparables from 2013-2014 were considered by the appraiser. Three were located in Naples and one in Port Charlotte. Before adjustments, the sales ranged between $174.88 and $248.58 per square foot of building area, or a range of $73.70. After adjustments to all the comparables, the indicated subject value range was between $236.09 and $285.87 per square foot, or only $49.78. Based on the adjustments made to the comparables, the appraiser indicates the market supports a value of approximately $275 per square foot, or $680,000(R). The resultant value via the sales comparison approach was, therefore, $680,000(R). The use of this approach and the appraiser’s analysis was sufficiently supported. Appraiser’s Concluded As-Is Market Value Income Approach: Fee Simple Analysis; The appraiser utilized 5 market rent comparables ranging between $16.00 Cost $ N/A and $29.50 per square foot on a net basis to estimate the subject’s potential market annual rental income. The Income $ 630,000 analyst also considered seven listings of available medical space for lease in the Naples area, which demonstrated a range in asking rates of $14.50 to $30.00 per S.F. on a NNN basis. Based on the executed leases and listings, the Sale Comparison $ 680,000 appraiser projects a pro forma rent of $22/SF on a net basis, for a potential gross income of $54,164 for market Reconciled Value $ 660,000 rent. V & C was projected in this sub-market at an acceptable 3%, and the resultant overall EGI was $65.202. Expenses were developed based on the subject’s actual and market-derived costs from comparables, as well as published indices, resulting in an overall expense ratio for this property of 20%, or $13,302. NOI was concluded at $51,901. The appraiser concluded an OAR within the range of local market extracted rates. Utilizing an 8.25% OAR, the value indication via the income approach was $630,000(R). Reconciliation: The appraiser reconciled a final value from the two approaches at $660,000. Conclusion: It is the opinion of the reviewer that we are accepting the appraiser as a local expert who is currently on our approved appraiser’s list. As a result, we assume he has provided the best comparable data, as presented in the report. The value conclusion presented in this report supports the subject’s value range. Reviewer’s Analysis: The appraiser’s real estate value estimate of $660,000 can be utilized for bank internal decision-making purposes.
This review contains various components, including research-based data, calculations, and analyses, which may be contained on a part of this review by reference. Review Appraiser’s Certification (USPAP: SR 3-3)
Section E: I certify that, to the best of my knowledge and belief:
the facts and data reported by the review appraiser and used in the review process are true and correct.
the analyses, opinions, and conclusions in this review report are limited only by the assumptions and limiting conditions stated in this review report, and are my personal, impartial, and unbiased professional analyses, opinions, and conclusions.
I have no present or prospective interest in the property that is the subject of this report, and I have no personal interest or bias with respect to the parties involved.
my engagement in this assignment was not contingent upon developing or reporting predetermined results.
my compensation is not contingent on an action or event resulting from the analyses, opinions, or conclusions in, or the use of, this review report.
my analyses, opinions, and conclusions were developed, and this review report was prepared, in conformity with the Uniform Standards of Professional Appraisal Practice of The Appraisal Foundation and the Code of Professional Ethics and Standards of the Royal Institution of Chartered Surveyors, London, UK
I did not personally inspect the subject property of the report under review.
no one provided significant professional assistance to the person signing this review report.
the use of this review report is subject to the requirements of the Appraisal Foundation and the State of Florida relating to review by its duly authorized representatives.
this review was not based on a requested minimum valuation, a specific valuation, or the approval of a loan.
MRICS FL State Certified General Real Estate Appraiser RZ1005
8/14/2014
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Borrower: Nuclear Medicine; RIMS# 14.001270 599. Ninth St. North, Naples, FL
Section E:
PURPOSE & INTENDED USE OF REVIEW
The purpose of this review is to form an opinion as to the adequacy, completeness, and appropriateness of this appraisal/evaluation report. This review is for internal business decisions, and is intended solely for the confidential internal use of the client – Capital Bank. Section F:
SCOPE OF WORK FOR REVIEW
This review report represents a technical review of the appraisal report. This review is considered a desk review unless otherwise noted. The review was completed in conformance with the 2014-2015 Uniform Standards of Professional Appraisal Practice, Standard 3. The data contained within the appraisal report was not confirmed by the reviewer, and additional market data pertinent to the subject was not identified by the reviewer, unless specifically stated otherwise. It is assumed that the data in the appraisal report is factual and representative of existing and forecast market conditions. Any correspondence and associated information pertaining to this review is retained in the reviewer’s work file and made a part of this review by reference.
Section G:
ASSUMPTIONS & LIMITING CONDITIONS
The appraisal review is specifically limited as to the following conditions: 1.
Possession of this Review or a copy thereof, does not carry with it the right of publication.
2.
This Review is intended solely for the internal use of the Client and/or its subsidiary corporations. Neither all nor any part of the contents of this Review shall be disseminated to the outside appraiser (author of the appraisal report), the borrower, or the public through word of mouth, advertising, public relations, news, sales, or other media without the prior written consent and approval of the reviewer.
3.
The reviewer, by reason of this Review, is not required to give further consultation or testimony, or to be in attendance in court with reference to the property that is the subject of the Review, unless arrangements have been previously made.
4.
This Review constitutes a limited-scope assignment and should not be construed as an independent appraisal of the subject property. Only an opinion as to the reasonableness of the appraiser’s opinion of value is made by the Reviewer. If no engagement letter was provided to the Reviewer, the determination of the appraiser’s compliance with the scope of work cannot be assessed by the Reviewer.
5.
The analyses, opinions, and conclusions in this Review are based solely on the data, analyses, and conclusions contained within the appraisal report under review. It is assumed that these data are representative of existing market data. No attempt, unless otherwise stated, has been made to obtain additional market data for this review from the normal appraisal report.
6.
All analyses and conclusions expressed by the reviewer are limited by the scope of the review process as defined herein.
7.
The reviewer assumes the subject property legal description provided in the appraisal correctly identified the subject property.
8.
Unless otherwise stated in the review comments, the reviewer did not re-verify the comparable data, and an independent market data search was not conducted by the reviewer. Extraordinary Assumption: If a copy of the Engagement Letter was not included in the report, the reviewer assumes that the scope of the assignment is in compliance with what was requested by the bank. Should this be otherwise, this reviewer reserves the right to amend the review accordingly.
Appraisal Scorecard (To Be Completed by Reviewer)
Ranking1 to 5 (5 being the best):
4
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