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Based on the comparable sales analyze, the appraisal concluded between
<br />$185,000-$195,000 per unit or a value range of $21,300,000-$22,400,000. Based
<br />on the effective gross income multiplier of 2.75 to 3.25 a range of value between
<br />$19,900,000 to $23,500,000 was indicated. The appraisal concluded both units of
<br />comparison were well supported, weighed roughly equally and indicate a going
<br />concern value of $21,900,000.
<br />Again, to estimate the value of the real estate only, the cost approach was used. In
<br />the cost approach three comparable land sales were presented which range between
<br />$8.81 SF to $12.18 per SF. The appraisal concluded at $10.50 a SF or $1,840,000
<br />for the land as vacant. This was similar to the property assessors estimate of land
<br />value at $10 per square foot.
<br />In cost approach, the appraisal utilized Section 12 page 20 from Marshall
<br />Valuation Service for Multiple Residences, Elderly ALF properties. The quality of
<br />the building was considered to be between "average and good" quality with an
<br />average of approximately $104 per square foot. To the base cost, adjustments were
<br />made for the sprinkler system, current cost and local cost multipliers. The adjusted
<br />cost was calculated at approximately $100 per SF. This was applied to the total
<br />building area of 106,333 SF for a building cost new of approximately $10,668,000.
<br />Site improvement cost for landscaping, signage, sidewalks, parking lot, etc. were
<br />added for a total replacement cost new of $11,278,000 or approximately $106 per
<br />square foot. Soft costs were added for financing, marketing and income loss during
<br />lease up, for a total of 10% plus entrepreneurial incentive of 15% for a total cost
<br />new of approximately $14,202,000 or approximately $140 per SF.
<br />In the cost approach summary, the total cost new was re -analyzed at both a 10%
<br />and 15% entrepreneurial incentive and indicated a range from approximately
<br />$13,600,000-$14,202,000. Depreciation was then subtracted. From the low-end of
<br />the cost new range, 36% depreciation was subtracted. From the high end of the
<br />range, 30% depreciation was subtracted. The result was a depreciated value of the
<br />improvements ranging from approximately $8,754,000 to $9,942,000. Land value
<br />was then added for a total estimate of market value of the real property that ranged
<br />from $10,600,000 to $11,800,000. The depreciated value of the FF&E was added
<br />at $710,000 for a final range from $11,300,000-$12,500,000.
<br />Because the FF&E is not included in the Real Property assessment, the value
<br />indications ranging from $10,600,000 to $11,800,000 or an average of $11,200,000
<br />is applicable to this Finding. Again, an assessment ratio of 85% was applied to the
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