APPRAISAL OF:
SAN JOSE STAGE THEATER
490 SOUTH 1ST STREET
SAN JOSE, CALIFORNIA
PREPARED FOR:
SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY OF THE CITY OF SAN JOSE
SAN JOSE, CALIFORNIA
JANUARY 2018
2017-CNA-230
February 7, 2018
Mr. Richard Keit Managing Director Successor Agency to the Redevelopment Agency of the City of San Jose 200 E. Santa Clara Street, 13th Floor San Jose, California 95113 Re: 2017-CNA-230, Appraisal Report Project: San Jose Stage Theater 490 South 1st Street San Jose, California
Dear Mr. Keit:
At your request and authorization, Carneghi-Nakasako and Associates has appraised the real estate located at 490 South 1st Street in the City of San Jose, County of Santa Clara, California. The subject property is further identified by the Santa Clara County Assessor’s office as assessor parcel number (APN): 467-47-098.
The subject property, commonly known as the San Jose Stage Theater, consists of an approximate 6,761 rentable square foot, average quality, one story, freestanding, commercial building that was originally constructed in 1969, fully renovated for its current performing arts use in 1990, and is in average condition. The existing building improvements are situated on an approximate 0.444 acre or 19,343 square foot site, reflecting a floor area ratio (FAR) of 35 percent. The subject site has a general plan designation of Downtown and is zoned PQP (Public/Quasi-Public).
The subject property is currently 100 percent leased/occupied by the San Jose Stage Company on a month-to-month basis at a contract rental rate of $1.00 per month on a triple net expense basis. The Lessee is a non-profit organization and the Lessor (Successor Agency to the Redevelopment Agency of the City of San Jose) has agreed to the discounted rent in exchange for the arts, cultural and community services provided by the Lessee to the community in the SoFA district.
The client for this Appraisal Report is Mr. Richard Keit, Managing Director, Successor Agency to the Redevelopment Agency of the City of San Jose. The purpose of this Appraisal Report is to estimate the current “as is” fee simple market value of the subject property. It is our understanding that the intended use/user of this Appraisal Report is for exclusive use by the Successor Agency to the Redevelopment Agency of the City of San Jose for internal review and/or possible disposition of the subject property. This report should not be used or relied upon by any other parties for any reason.
Mr. Richard Keit 2 February 7, 2018
Value Conclusion
Based on our research and analysis and subject to the limiting conditions and assumptions contained herein, it is the opinion of the appraiser that the “as is” fee simple market value of the subject property, as of January 13, 2018, is:
TWO MILLION THREE HUNDRED THOUSAND DOLLARS
($2,300,000)
This letter must remain attached to the Appraisal Report, identified on the footer of each page as 2017CNA230, plus related exhibits, in order for the value opinion set forth to be considered valid.
Certification
We, the undersigned, hereby certify that, to the best of our knowledge and belief: the statements of fact contained in this report are true and correct; 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; we have no present or prospective interest in the property that is the subject of this report, and we have no personal interest with respect to the parties involved; we have no bias with respect to the property that is the subject of this report or to the parties involved with this assignment; our engagement in this assignment was not contingent upon developing or reporting predetermined results, 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; the appraisal assignment was not based on a requested minimum valuation, a specific valuation, or the approval of a loan; our analyses, opinions and conclusions were developed, and this report has been prepared in conformity with the Uniform Standards of Professional Appraisal Practice, Code of Professional Ethics and the Standards of Professional Appraisal Practice of the Appraisal Institute, and is in compliance with FIRREA; Rick Nakasako has made a personal inspection of the property that is the subject of this report; no one provided significant real property appraisal assistance to the persons signing this certification.
The use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representatives. In accordance with the Competency Provision in the USPAP, we certify that our education, experience and knowledge are sufficient to appraise the type of property being valued in this report. We have performed appraisal services concerning the property that is the subject of this report in the 36 months prior to accepting this assignment.
2017CNA230.tl
Mr. Richard Keit 3 February 7, 2018
We are pleased to have had this opportunity to be of service. Please contact us if there are any questions regarding this appraisal.
Sincerely,
CARNEGHI-NAKASAKO & ASSOCIATES
Rick Nakasako, MAI Certified General Real Estate Appraiser State of California No. AG013832 (exp. 8/10/2019) Ph# 408 535-0900 x 117 Email: [email protected]
2017CNA230.tl
TABLE OF CONTENTS
I. REPORT SUMMARY 1 A. Property Appraised 1 B. Property Identifications 1 C. Client, Purpose, Intended Use and Intended User 2 D. Type of Appraisal and Scope of Work 2 E. Property Rights Appraised 2 F. Date of Inspection/Valuation/Report 2 G. Definition of Market Value 3 H. As Is Fee Simple Market Value Conclusion 3 I. Exposure/Marketing Period 3 J. Extraordinary and General Assumptions and Limiting Conditions 4
II. AREA AND NEIGHBORHOOD DESCRIPTION 6 A. County of Santa Clara 6 B. City of San Jose 7 C. Neighborhood Description 7
III. MARKET ANALYSIS 10 A. General Economic Conditions 10 B. Office Market Conditions 10 C. Residential Rental (Apartment) Market Conditions 11
IV. PROPERTY IDENTIFICATION AND DESCRIPTION 12 A. Site Description 12 B. Utilities 12 C. Preliminary Title Report, Easements, Encroachments, and Encumbrances 12 D. Assessed Valuation and Real Estate Taxes 12 E. Environmental Observations 12 F. Flood Hazard and Earthquake Information 13 G. General Plan/Zoning 13 H. Ownership History 17 I. Improvement Description 17 J. Functional Utility, Effective Age and Remaining Economic Life 18
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TABLE OF CONTENTS
K. Leased Status 18
V. HIGHEST AND BEST USE AND VALUATION METHODOLOGY 19 A. Highest and Best Use 19 B. Valuation Methodology 21
VI. VALUATION BY THE DIRECT SALES COMPARISON APPROACH 22 A. Comparable Improved Sales Discussion 22 B. Comparable Improved Sales Analysis 23 C. Per Unit Value Conclusion(s) 25
VII. VALUATION BY THE INCOME APPROACH 27 A. Economic Rent Estimate 27 B. Current Leased Status 28 C. Potential Gross Annual Income Estimate 28 D. Vacancy and Expenses 28 E. Net Operating Income Estimate 29 F. Overall Capitalization Rate Selection 29 G. Value Conclusion by the Income Approach 30
VIII. RECONCILIATON AND FINAL VALUE CONCLUSION 31
IX. EXPOSURE/MARKETING PERIOD 32
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TABLE OF EXHIBITS
LIST OF TABLES Page
Table 1 – Comparable Building Sales 23.1
Table 2 – Comparable Building Sales Adjustment Grid 25.1
Table 3 – Comparable Land Sales Adjustment Grid 25.1
Table 4 – Comparable Leases 28.1
Table 5 – Comparable Leases Adjustment Grid 28.2
Table 6 – Reconstructed Operating Statement 30.1
LIST OF MAPS
Neighborhood Map following 8
Assessor Map following 13
Comparable Building Sales Map following 23.1
Comparable Leases Map following 28.1
ADDENDA
Subject Photographs Comparable Photos Data Sheets Submitted Lease Info List of Major Developments in downtown San Jose Qualifications and License of Appraiser
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I. REPORT SUMMARY
A. Property Appraised
The subject of this appraisal is the real estate addressed at 490 South 1st Street in the City of San Jose, County of Santa Clara, California. The subject property is further identified by the Santa Clara County Assessor’s office as assessor parcel number (APN): 467-47-098.
The subject property, commonly known as the San Jose Stage Theater, consists of an approximate 6,761 rentable square foot, average quality, one story, freestanding, commercial building that was originally constructed in 1969, fully renovated for its current performing arts use in 1990, and is in average condition. The existing building improvements are situated on an approximate 0.444 acre or 19,343 square foot site, reflecting a floor area ratio (FAR) of 35 percent. The subject site has a general plan designation of Downtown and is zoned PQP (Public/Quasi-Public).
The subject property is currently 100 percent leased/occupied by the San Jose Stage Company on a month-to-month basis at a contract rental rate of $1.00 per month on a triple net expense basis. The Lessee is a non-profit organization and the Lessor (Successor Agency to the Redevelopment Agency of the City of San Jose) has agreed to the discounted rent in exchange for the arts, cultural and community services provided by the Lessee to the community in the SoFA district.
B. Property Identifications
For ease of reference, the following represents a summary of pertinent property identifications for the subject.
Assessor's Parcel No: 467-47-098 General Plan: Downtown Zoning: PQP (Public/Quasi-Public) Census Tract No.: 5009.01 Zip Code: 95113 Flood Zone: D (Flood insurance is not required) Alquist Priolo Earthquake Zone: Not located in an Alquist-Priolo Earthquake Special Studies Zone
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C. Client, Purpose, Intended Use and Intended User
The client for this Appraisal Report is Mr. Richard Keit, Managing Director, Successor Agency to the Redevelopment Agency of the City of San Jose.
The purpose of this Appraisal Report is to estimate the current “as is” fee simple fair market value of the subject property. It is our understanding that the intended use/user of this Appraisal Report is for exclusive use by the Successor Agency to the Redevelopment Agency of the City of San Jose for internal review and possible disposition. This report should not be used or relied upon by any other parties for any reason.
D. Type of Appraisal and Scope of Work
This is an Appraisal Report within a narrative format.
The scope of work performed within this Appraisal Report is to use the appropriate approaches to value in accordance with the Uniform Standards of Professional Appraisal Practice (USPAP) to arrive at the market value conclusion indicated as the purpose of this appraisal.
Specific steps include the inspection of the subject property and the research and analysis of comparable data to arrive at the value indication(s) as put forth in this report. Sources of information used in this Appraisal Report may include, but are not limited to: appraiser files; real estate brokers and agents; property owners; CoStar; Loopnet; MLS; local government agencies and other market participants.
E. Property Rights Appraised
The subject property is rented on a month-to-month basis. In addition, the lease contains a Termination Clause that states: “At any time during the Extended Lease Term (the current term), Lessor, at its sole and absolute discretion, shall have the right to revoke this Lease, without cause. In such instance, Lessee shall vacate the premises upon notice, at Lessee’s expense. Thus, the property rights appraised essentially reflect those of a fee simple interest.
A fee simple interest 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.” (The Appraisal of Real Estate, 13th Edition, 2008, p. 114)
F. Date of Inspection/Valuation/Report
The subject property was final inspected on, and has an “as is” date of valuation as of, January 13, 2018.
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The date of this Appraisal Report is February 7, 2018.
G. Definition of Market Value (OCC 12 CFR 34.42 (f)) & (OTS 12 CFR 564.2 (f))
Market value means the most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently, knowledgeably and assuming the price is not affected by undue stimulus. Implicit in this definition are the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby:
buyer and seller are typically motivated;
both parties are well informed or well advised, and acting in what they consider their own best interest;
a reasonable time is allowed for exposure in the open market;
payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and
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.
H. As Is Fee Simple Market Value Conclusion
Based on our research and analysis and subject to the limiting conditions and assumptions contained herein, it is the opinion of the appraiser that the “as is” fee simple market value of the subject property, as of January 13, 2018, is:
TWO MILLION THREE HUNDRED THOUSAND DOLLARS
($2,300,000)
I. Exposure/Marketing Period
Based on our research of comparable improved transactions and discussions with local real estate brokers as well as considering the current/projected economic climate and real estate market, it is our opinion that the subject property will require an exposure period of approximately 6 to 9 months as of the date of valuation. A similar marketing period of 6 to 9 months is also estimated as of the date of valuation.
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J. Extraordinary and General Assumptions and Limiting Conditions (The use of these extraordinary assumptions and limiting conditions might have affected the assignment results.)
Extraordinary Assumptions and Limiting Conditions
It should be noted that the Lease includes reference to a Parking Agreement in favor of the parcel north for the use of 12 parking spaces within the subject property. The agreement is dated June 1998 for a term of five years, plus three, five-year renewal options (expiration of June 2018 if all options were exercised). Discussions with representatives of the property owner and current Lessee revealed no knowledge that the agreement is still in effect. However, no formal termination notice was available to the appraiser for review. Valuation of the subject property is based on the extraordinary assumption that the Parking Agreement is no longer in effect.
No preliminary title report was submitted to the appraiser for review. No responsibility is assumed for legal matters. Valuation of the subject property is based on the extraordinary assumption that title to the property is marketable and free and clear of any liens, easements, encumbrances, encroachments, and special assessments, other than those identified in this report.
Valuation of the subject property is based on the extraordinary assumption that there is no existence of potentially hazardous materials used in the construction or maintenance of the improvements or disposed of on the site. These materials may include (but are not limited to) the existence of formaldehyde foam insulation, asbestos insulation, lead paint or toxic wastes. The appraiser is not qualified to detect such substances. The client is advised to retain an expert in the field.
No environmental or soil study was submitted for review. Valuation of the subject property is based on the extraordinary assumption that there are no hidden or unapparent conditions of the property, subsoil, or structures, which would render it more or less valuable. The appraiser assumes no responsibility for such conditions, or for engineering which might be required to discover such factors. It is assumed that no soil contamination exists as a result of chemical drainage or leakage in connection with any production/operation (current or historical) on or near the subject property.
General Assumptions and Limiting Conditions
It is the client’s responsibility to read this report and to inform the appraiser of any errors or omissions of which he/she is aware prior to utilizing this report or making it available to any third party.
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Plot plans and maps are included to assist the reader in visualizing the property. Information, estimates, and opinions furnished to the appraiser, and contained in the report, were obtained from sources considered reliable and believed to be true and correct. However, no responsibility for accuracy of such items furnished the appraiser is assumed by the appraiser.
All information has been checked where possible and is believed to be correct, but is not guaranteed as such.
The appraiser is not required to give testimony or appear in court in connection with this appraisal unless arrangements have been previously made.
Neither all nor part of the contents of this report shall be conveyed to the public through advertising, public relations, new sales, or other media without the written consent and approval of the appraiser, particularly as to the valuation conclusions, the identity of the appraisers, or any reference to the Appraisal Institute or the MAI designation.
Information regarding any earthquake and flood hazard zones for the subject property was provided by outside sources. Accurately reading flood hazard and earthquake maps, as well as tracking constant changes in the zone designations, is a specialized skill and outside the scope of the services provided in this appraisal assignment. No responsibility is assumed by the appraisers in the misinterpretation of these maps. It is strongly recommended that any lending institution re-verify earthquake and flood hazard locations for any property for which they are providing a mortgage loan.
The Americans with Disabilities Act (“ADA”) became effective January 26, 1992. The appraisers have not made a specific compliance survey and analysis of this property to determine whether or not it is in conformity with the various detailed requirements of the ADA. It is possible that a compliance survey of the property, together with a detailed analysis of the requirements of the ADA, could reveal that the property is not in compliance with one or more of the requirements of the Act. If so, this fact could have a negative effect upon the value of the property. Since we have no direct evidence relating to this issue, we did not consider possible noncompliance with the requirements of ADA in estimating the value of the property.
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II. AREA AND NEIGHBORHOOD DESCRIPTION
A. County of Santa Clara
Santa Clara County is the most populous of the San Francisco Bay Area counties. The County population was 1,938,180 as of January 1, 2017, according to the California Department of Finance (DOF). This represents an increase of approximately 0.8 percent from the year prior reported population. Population growth in Santa Clara County is generally limited by the fully built out nature of the area.
Over the past few years, Santa Clara County has been experiencing strong employment conditions. According to statistics published by the State of California Employment Development Department (EDD), the Santa Clara County unemployment rate was 2.6 percent as of November 2017, based on 1,015,900 jobs. This is similar to the one year prior unemployment rate of 3.5 percent, based on 996,000 jobs. Current jobs statistics are essentially reflective of full employment in the subject market area.
Santa Clara County is well served by transportation routes, although many are heavily congested during commute hours. Highway 101 travels in a north/south direction through the middle of the County, continuing north to San Francisco and south to Los Angeles. Interstate 880 extends south from Oakland in the north, through Santa Clara County, where it becomes Highway 17, extending into Santa Cruz County. Interstate 280 crosses through the middle of Santa Clara County in an east/west direction, before turning north towards San Francisco. Interstate 680 extends in a predominantly northerly direction across the eastern portion of the County, extending into Alameda County. Highways 237, 85, and 87 provide further freeway transportation through the County.
Public transportation options in Santa Clara County include an extensive bus network, the Santa Clara County Light Rail system, and the Cal Train commuter rail service. The Light Rail system originally provided public transportation to areas of San Jose, Santa Clara, Sunnyvale, Mountain View, and Milpitas. An extension to the light rail system was recently completed, providing additional access to Campbell and Los Gatos. The CalTrain commuter rail service extends from Gilroy in the south, through San Jose, to San Francisco in the north, with multiple stops provided in both Santa Clara and San Mateo Counties. The area is served by San Jose Mineta International Airport. A planned extension of the BART regional rail system, which serves the greater San Francisco Bay Area, into Santa Clara County will further enhance public transit options. Following the recent completion of an extension of the BART system to the southern end of Alameda County, new BART stations in Milpitas and the Berryessa neighborhood of San Jose are expected to open in the near term.
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B. City of San Jose
The City of San Jose is situated in the north-central portion of Santa Clara County and represents the largest single municipal jurisdiction in the County with an incorporated area of 177.7 square miles. In terms of population, San Jose is the largest city in the San Francisco Bay Area, the third largest city in the State of California, and recently became the 10th largest city in the United States. However, similar to the County as a whole, population growth in San Jose is limited by the lack of remaining land suitable for residential development. The DOF estimated the city’s population at 1,046,079 as of January 2017. The number of residents increased 0.9 percent from the year prior.
Similar to the County as a whole, San Jose employment statistics have been strong reflecting rapid economic growth. Unemployment, according to the EDD, was reported at a rate of 2.9 percent in San Jose as of November 2017, compared to the rate of 3.9 percent reported one year earlier. The EDD reported a total of 538,600 jobs in San Jose as of November 2017, similar to the total of 528,000 jobs reported one year earlier. Current statistics are essentially reflective of full employment conditions in the subject market area.
As with Santa Clara County as a whole, the transportation infrastructure in San Jose is extensive, but generally congested during commute hours. Highway 101 extends in a north/south direction, passing through the center of San Jose. Interstate 880 also extends through the center of San Jose before becoming Highway 17 as it continues south. Interstate 280 extends in an east/west direction across much of San Jose, before turning north as Interstate 680 in the eastern part of the City. Highways 85 and 237 extend in east/west directions across the southerly and northerly portions of San Jose, and Highway 87 provides access from the residential neighborhoods in south San Jose to the downtown area and the high-tech employment areas in the northerly portion of the city.
The public transportation network in San Jose is also extensive. The Santa Clara County Light Rail system has multiple stops in the City of San Jose, as does the CalTrain commuter rail service. The future extension of the BART system will provide stations in the eastern portion of San Jose, as well as downtown, further enhancing public transit options.
C. Neighborhood Description
1. Downtown San Jose Development Trends
The subject property is situated on the southwestern fringe of the downtown San Jose core area or Central Business District (CBD). The CBD is generally defined as the land area bounded by Santa Clara Street on the north; Highway 87 on the west; West San Carlos Street on the south, and
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Fourth Street on the east. Prominent uses in the CBD include: The Fairmont Hotel and Pavilion Shops; Plaza Park; San Jose Convention Center; The Tech Museum; Park Center Plaza; The Children’s Discovery Museum; and the San Jose Museum of Art. Although influenced by the CBD, the quality of, and demand for, commercial space within the subject’s immediate neighborhood is secondary to that of the CBD.
Downtown San Jose has experienced substantial growth and development in nearly all real estate sectors over the past several of decades. New development was initially driven by Redevelopment Agency of the City of San Jose, but private developers have more recently been active in the downtown area.
Two new high rise apartment towers recently completed construction in Downtown San Jose with several others currently either planned or in various stages of construction. One of the projects, known as Centerra, occupies the full city block bordered by Carlyle Street, Notre Dame Avenue, St. John Street and Almaden Avenue. Centerra, which was construction complete in early-2016, is a 21-story, 347-unit, mixed-use development with 7,000 square feet of ground floor retail space facing the San Pedro Square Market.
The second project, known as “One South Market,” represents a very good quality, 23-story, mixed-use building consisting of 312 residential units, 6,000 square feet of ground floor retail, and an associated 404 stall parking garage on a 0.97 acre site located at the southwest corner of Santa Clara and Market Streets. The project was completed in late-2015.
A third high rise development known as Silvery Towers, addressed at 190 West Saint James Street, broke ground in February 2015. The approximately 2.0 acre site is entitled for development with 643 residential units with ground level retail in two high-rise towers of 23 and 24 stories. The units will be condominiums and construction is anticipated to be complete in 2018. A number of other residential projects have recently started construction including Marshall Squares located at St. John Street from North First Street to North Second Street. This is a seven-story mixed- use building with 190 residential units and 8,990 square feet of retail/commercial space.
The most recent high-rise office development in Downtown San Jose is River Park II. This is a very good quality, approximately 321,618 square foot, seventeen story, steel frame office building which was construction complete in 2009, addressed at 300 Park Avenue. Although the property was mostly vacant until 2014, the building is now believed to be mostly occupied.
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Neighborhood Map
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Appraisal: 490 South 1st Street, San Jose, California Page 9
2. Immediate Neighborhood
More specifically, the subject property is located within the South First Area (SoFA) Strategic Development Plan area which is generally described as the area between Market Street to the west, Fourth Street to the east, San Carlos Street to the north, and I-280 to the south. The core of SoFA is the two block area on South First Street between San Carlos and William Streets (the subject is situated near the intersection of South 2nd and East San Salvador Streets). This area is home to the art galleries, restaurants and nightclubs on which the identity and focus of SoFA hinges. However, interspersed within these blocks are professional offices, auto uses and some discount/bulk retail. The SoFA Committee has expressed the desire to see the district alive at all times of the day and night. Concentrating entirely on creating an exclusive arts and entertainment district could result in a relatively inactive place during the day. Thus, mixing in office development, housing and retail can ensure a greater presence of people during the day. The continuity of retail/entertainment uses along the street level in new infill development forwards the concept of SoFA as an arts/entertainment district.
Adjacent uses to the subject property include one and two story, average quality storefront commercial buildings in all directions.
Transportation and access to the subject is considered good. The Guadalupe Corridor light rail line operates on East San Carlos, one block north of the subject. Freeway access to Interstates 280/680/880, as well as Highways 87 and 101 is available within a two mile radius of the subject property. In addition, major nearby surface streets include First Street, Market Street, Santa Clara Street, and San Carlos Street.
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III. MARKET ANALYSIS
A. General Economic Conditions
UCLA Anderson Forecast’s third quarterly report in 2017 anticipates modest growth in real GDP with gains in employment. On a national level, a number of pro-growth economic policies involving proposed tax cuts, investment in infrastructure and regulatory relief were expected to be initiated this year by the new administration in Washington, D.C., but few have transpired. Although there has been some progress on the regulatory front, challenges remain on a host of issues, including immigration, health care and trade policies. In California, the forecast is slightly lower, reflecting the administration’s difficulties in getting proposals passed.
In his outlook for the national economy, UCLA Anderson Forecast Senior Economist David Shulman notes that the economy has grown, despite chaos in Washington, and is expected to continue to grow at more than 2 percent, while operating at full employment. He writes that growth will continue with real GDP increasing by 2.1 percent, 2.8 percent, and 2.1 percent in 2017, 2018 and 2019, respectively. The optimism for 2018 is based on expectations that Congress will ultimately enact a tax cut and a formal infrastructure package later this year. In this environment, the unemployment rate nationally will remain at or below 4.4 percent for the forecast horizon, Shulman writes. Inflation will increase modestly, running slightly above the 2.0 percent range during the forecast period. The combination of full employment and somewhat higher inflation will prompt the Fed to continue its modest tightening path.
The forecast for the State of California projects slightly lower growth again this quarter, owing partly to the Trump administration’s difficulty getting legislation through Congress. The tightening of immigration rules is expected to have a significant effect in California; however, because of protections put into place by the state, not as much an effect as previously anticipated. The California unemployment rate is expected to have its normal differential to the U.S. rate at 4.5 percent by the end of the forecast period (2019), the same as in June’s forecast, Nickelsburg says. The forecast for 2017, 2018, and 2019 total employment growth in California is 1.1 percent, 0.9 percent, and 0.9 percent, respectively. Payrolls will grow at about the same rate over the forecast horizon and real personal income is forecast to grow 2.0 percent, 3.1 percent and 3.1 percent in 2017, 2018 and 2019, respectively. Home building will accelerate to about 123,000 units per year through the forecast horizon.
B. Office Market Conditions
The commercial brokerage firm Cushman & Wakefield reported on office market conditions in their Silicon Valley Marketbeat report for the Fourth Quarter 2017
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and said Silicon Valley’s office vacancy rate continued to climb during the fourth quarter 2017 to 11.4% an increase of 230 basis points from the 9.1% rate one year prior. The most recent uptick in vacancy was due to the completion of 574,000 square feet of speculative space.
1. Downtown San Jose Office Inventory
The commercial brokerage firm Cushman & Wakefield reports that, as of the fourth quarter 2017, the subject’s Downtown San Jose submarket contains a total office inventory of 8,621,721 square feet, or approximately 10.5 percent of the total office inventory in all of Silicon Valley.
2. Downtown San Jose Office Vacancy Statistics
As of the fourth quarter 2017, the average office vacancy rate for the subject’s downtown San Jose submarket was reported at 13.2 percent, similar to the rate of 13.1 percent reported one year prior.
Office vacancy rates for both Silicon Valley and the subject submarket have been declining over the past few years. However, the vacancy rate in the subject’s Downtown San Jose submarket has historically been above that indicated for Silicon Valley as a whole.
3. Downtown San Jose Office Average Asking Rental Rates
As of the fourth quarter 2017, Cushman & Wakefield reports an average asking rental rate for office space in the subject’s downtown San Jose submarket was reported at $3.65 per square foot per month full service, compared to $3.38 per square foot per month full service one year prior.
C. Residential Rental (Apartment) Market Conditions
According to the Cushman & Wakefield Multifamily Snapshot for the second quarter 2017, the Bay Area employed just under 4 million residents at the close of second quarter 2017, similar to the number one year prior. Apartment communities in the Bay Area ended second quarter 2017 with a total market vacancy of 3.9 percent compared to 3.8 percent a year ago.
The downtown San Jose market has several projects planned as identified in the Business Journal article The List: Major developments in downtown San Jose”, dated July 28, 2016, a copy of which is reproduced in the addenda of this report.
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IV. PROPERTY IDENTIFICATION AND DESCRIPTION
A. Site Description
The subject property is addressed at 490 South 1st Street in the City of San Jose, County of Santa Clara, California. The subject property is further identified by the Santa Clara County Assessor’s office as assessor parcel number (APN): 467-47- 098.
The subject site, situated at the northeast corner of South 1st Street and East William Street, is comprised of a single legal parcel containing a total of approximately 0.444 acres or 19,343 square feet of land area, according to public records. The site is rectangular in shape, level at street grade, and fully improved with all offsites. It contains approximately 139 feet of frontage along South 1st Street and 137 feet of frontage along East William Street. Based on its rectangular shape and corner orientation, development utility and visibility/exposure is considered good. The location, shape and orientation of the site are best illustrated by the Assessor Map on the following page.
B. Utilities
All utilities appear to be available to the subject site. These include natural gas, electricity, sewer, water and telephone. It appears that each is available in sufficient quantity and has an adequate service capacity for any usage permitted on the property.
C. Preliminary Title Report, Easements, Encroachments, and Encumbrances
No preliminary title report prepared was submitted for review. No responsibility is assumed for legal matters. Valuation of the subject property is based on the extraordinary assumption that title to the property is marketable and free and clear of any liens, easements, encumbrances, encroachments, and special assessments, other than those identified in this report.
D. Assessed Valuation and Real Estate Taxes
The subject property is owned by the Successor Agency to the Redevelopment Agency of the City of San Jose and is tax exempt.
E. Environmental Observations
No environmental or soil study was submitted for review. The appraiser assumes no responsibility for such conditions, or for engineering which might be required to discover such factors. Valuation of the subject property is based on the extraordinary assumption that no soil contamination exists as a result of chemical
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drainage or leakage in connection with any operation (current or historical) on or near the subject property.
F. Flood Hazard and Earthquake Information
According to Flood Insurance Rate Map, Community Panel No. 060349 – 06085C0234H, published on May 18, 2009, the subject property is located in Flood Zone D. Flood hazard insurance is not required within this zone.
The subject site is not located within an Alquist-Priolo earthquake special studies zone.
G. General Plan/Zoning
1. Subject’s GP/Zoning
The subject property is situated in an area general planned by the City of San Jose as Downtown and is zoned PQP (Public/Quasi-Public).
The PQP Public/Quasi-Public District is intended to provide for publicly serving uses on lots that are designated Public/Quasi-Public on the General Plan Land Use/Transportation Diagram. The publicly serving land uses within this district can include schools, colleges, research institutions, corporation yards, homeless shelters, libraries, fire stations, water treatment facilities, convention centers with integrated hotels and restaurants, auditoriums, museums, governmental offices, airports, stadiums, and other similar publicly-oriented institutional land uses with associated incidental commercial uses supporting such publicly-oriented institutional land uses. This district may also accommodate private schools, daycare centers, hospitals, public utilities, and the facilities of any organization involved in the provision of public services such as gas, water, electricity, and telecommunications facilities that are consistent in character with established public land uses. Private community gathering facilities, including those used for religious assembly or other comparable assembly activity, may also be considered. The appropriate intensity of development can vary considerably depending on potential impacts on surrounding uses and the particular Public/Quasi-Public use developed on a site. Site development regulations under the PQP zoning designation include: minimum lot size of 6,000 square feet; maximum building height of 65 feet; and front/side/rear setbacks of 10 feet. Minimum parking requirements for theater usage is 1 parking space for every 4 fixed seats. The subject reportedly contains 200 fixed seats and would thus require a minimum of 50 parking spaces. The subject site contains a total of 25 designated parking spaces.
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As part of this assignment, the appraiser contacted Ms. Sylvia Do, Division Manager, Planning Division, City of San Jose on January 25, 2018. According to Ms. Do, the General Plan designation for the subject site is Downtown, and the current zoning is PQP. Surrounding properties are primarily zoned DC (Downtown Primary Commercial District), and this would be the conforming district (to the Downtown GP designation) for a potential rezoning. Ms. Do noted that the subject’s peripheral downtown location would have some impact on potential building height/# of stories. The subject site is not part of a Specific Plan area, but future development should be consistent with the Downtown Strategy. This development phasing of the Downtown Strategy was recently revised as outlined in the Addendum to the EIR. The Downtown Strategy and Addendum are discussed/described later in this section.
The DC zoning designation allows office, retail, service, residential, and entertainment uses in the Downtown Core Area. Lower intensity commercial uses are appropriate in outer parts of the Core Area, peripheral to the high intensity Park Center/San Antonio Plaza redevelopment areas. Development should incorporate pedestrian oriented design features at street level. Uses that discourage pedestrian activity and movement such as uses that serve the occupants of vehicles, i.e. drive-up service windows, are not considered appropriate. In areas where the Core Area designation exists, higher density residential uses at 25+ dwelling units per acre or mixed-use development of commercial and residential uses are appropriate as is development of either use individually. For mixed-use projects, residential uses should generally be located above non-residential uses with commercial uses at street level. Unless specifically designated, properties located in the DC district are not subject to any minimum set back requirements. Parking within the subject’s DC zoning district is determined by use.
The subject is also within the Downtown Core Area of the San Jose International Airport Environs Area Boundary. As such, it is regulated by building height limitations established by the FAA and the city’s Airport Department. An FAA (Federal Aviation Administration) ruling indicating that there is no hazard created by any potential structure is necessary for any building proposed for the subject site that is greater than 125 feet in height. At 125 feet in height or less no FAA review is necessary. Any development on the subject site would also be reviewed by the Airport Department, with an avigation easement likely to be required from the property owner. This would release the city from any responsibility associated with airport noise. The avigation easement is typical of downtown San Jose properties.
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2. Downtown Strategy
The subject is located within the San Jose Downtown Strategy 2000 plan area. The San José Downtown Strategy 2000 Plan (Downtown Strategy 2000) is an integrated strategic urban design plan (2000-2010) that focuses on the revitalization of Downtown San José by envisioning higher density infill development and replacement of underutilized uses within the boundaries of Downtown. The Downtown Strategy 2000 is not a land use document per se, but a vision or action guide for development activities in Downtown planned for 2000-2020. According to the Strategy 2000: San Jose Greater Downtown Strategy for Development, a guide to make policy, planning and budgetary decisions concerning development in the downtown San Jose area, “Building on the synergies of the Convention Center and San Jose State University, the SoFA area is a unique blend of arts, technology and entertainment retail. Stretching along the southern end of 1st Street, SoFA is bounded by Fox California Theater/Opera San Jose to the north, and Gore Park/Plaza de Pobladores to the south. The area enjoys easy freeway access from I-280 to the south, and easy transit access from the downtown light rail loop to the north. The easy connection to San Jose State University via San Carlos St. allows for a steady stream of pedestrians venturing from campus at lunch and at the end of the day. Unique art installations along Market Street soften the facade of the Convention Center while adding to the area’s funky charm. During the day, convention goers and tourists browse in art galleries, check their email at the cyber cafes and soak up the sun at Gore Park/Plaza de Pobladores. At night, SoFA becomes a converging point for technophiles, music bands and Opera fans.” So, although not a land use document, Strategy 2000 does represent the city’s intention for the immediate area.
The Strategy 2000 Final Environmental Impact Report and Traffic Impact Analysis divided this development capacity into four phases (Phase 1 through 4) of 25% increments, which were tied to the completion of specified infrastructure improvements, as follows:
Original Downtown Strategy 2000 Development Capacity Phase 1 Phase 2 Phase 3 Phase 4 Office Space (sf) 2,800,000 2,800,000 2,800,000 2,800,000 Res. Dwelling Units 2,125 2,125 2,125 2,125 Retail (sf) 350,000 350,000 350,000 350,000 Hotel Guest Rooms 900 900 900 900
In October 2014, an Addendum to the San José Downtown Strategy 2000 Final EIR was prepared to adjust Phase 1 development levels to meet market demand by allowing additional residential units while reducing the amount of office development. It was determined at that time that the proposed Phase 1 changes (increasing residential capacity from 2,125 units to 5,500
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units and decreasing office capacity from 2.8 million square feet to 1.4 million square feet) would not result in any new traffic impacts beyond those already identified the Strategy 2000 EIR.
Further, in May 2015, the City Council directed planning staff to prepare a new EIR for the Downtown Strategy that: 1) Updates the traffic analysis based on Envision San José 2040 General Plan Transportation goals, potentially reducing or modifying the required mitigation measures and plans identified in EIR. Reducing mitigation is especially important because dissolution of the Redevelopment Agency removed the funding source for such mitigation; 2) Updates Downtown development levels to reflect the current General Plan; 3) Increases the maximum residential and office capacities allowed in Downtown; 4) Expands the Downtown boundary; 5) Removes or modifies the phasing of development connected to the construction of traffic improvements identified as mitigation in the Downtown Strategy 2000 EIR; and 6) Updates and clarifies development capacities to reflect the adoption of the Diridon Station Area Plan.
Per the City of San Jose Planning Department, as of mid-2016, the remaining development capacity for Phase I was roughly:
Phase I Remaining Development Capacity Office Space (sf) 770,000 sf Res. Dwelling Units 875 units Retail (SF) 142,000 sf Hotel Guest Rooms 547 rooms
Although the Phase I residential dwelling unit capacity is running low, the City of San Jose Planning Department indicated that it is highly unlikely that any planned residential projects would be declined as long as they conformed to the General Plan.
According to the Downtown Strategy 2040 Draft EIR (also reproduced in the addenda of this report), the proposed project includes substantial changes to the amount of residential and office development contemplated in the Downtown Strategy and brings the Strategy into conformance with the Envision San José 2040 General Plan. Therefore, the Downtown Strategy 2040 EIR will utilize any pertinent information included in the Downtown Strategy 2000 EIR and the Envision San José 2040 General Plan EIR to the extent possible. While the boundaries of the Downtown will be slightly modified by the proposed project, the vast majority of the Downtown Strategy area is within the boundaries of the approved Downtown Strategy 2000 Project.
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Proposed Downtown Strategy 2040 Development Capacities
Proposed Current Current 2040 Downtown Strategy 2000 General Plan Strategy 2040 Office Space (sf) 11.2 mm 11.2 mm 14.2 mm Res. Dwelling Units 8,500 10,360 14,360 Retail (sf) 1.4 mm 1.4 mm 1.4 mm Hotel Guest Rooms 3,600 3,600 3,600
Per the City of San Jose Planning Department, at this time no plans to redevelop the subject site have been submitted for review. The existing building improvements reflect a legal, non-conforming use of the site according to City of San Jose regulations due to its below standard parking.
H. Ownership History
According to the public records, fee title to the subject property is currently vested in: Successor Agency to the Redevelopment Agency of the City of San Jose.
No arms-length ownership transfers over the past three years were disclosed by our research. Furthermore, the subject property is not currently being marketed for sale.
I. Improvement Description
Building square footage was taken from architectural plans and confirmed through physical on-site measurements by the appraiser.
The subject property, commonly known as the San Jose Stage Theater, consists of an approximate 6,761 rentable square foot, average quality, one story, freestanding, commercial building that was originally constructed in 1969, partially expanded and fully renovated on the interior for its current performing arts use in 1990, and is in average condition. The existing building improvements are situated on an approximate 0.444 acre or 19,343 square foot site, reflecting a floor area ratio (FAR) of 35 percent. Site improvements include an open courtyard area at the front entrance to the building and 25 asphalt paved parking spaces along the north and west perimeters of the parcel.
The building’s superstructure is of concrete and concrete block materials over a poured-in-place reinforced concrete foundation. The flat roof has a built-up composition cover and is supported by glu-laminated wood beams and interior columns. The building is fully fire sprinklered and has HVAC throughout.
The building is currently utilized as a performing arts theater. The main entrance is located at the building’s front or South 1st Street facing elevation. There are additional secondary entrances on the building’s remaining elevations. At the front
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entrance is an open lobby with ticket sales area and bar for theater patrons. The interior also includes a private office area, men’s/women’s restrooms, a “green” room, two upstairs changing rooms each with a two-fixture restroom, storage area and performing theater area with stepped-up fixed seating for 200 persons.
The interior finish includes open beam insulated ceilings with fluorescent and stage lighting, commercial grade carpeting and tile flooring, and painted drywall partitions. The interior improvements are of average to good quality and in average condition.
J. Functional Utility, Effective Age and Remaining Economic Life
Although the interior configuration is currently designed for use as a performing arts theater, the interior could easily be converted to a more typical office or retail commercial use. Thus, functional utility of the subject building improvements is considered good. Although originally constructed in 1969, it was expanded and fully renovated for theater use in 1990 and has an effective age estimated at 15 years. According to the Marshall Valuation cost estimation service, the economic life of similar quality properties is estimated at 45 years. Based on the estimated 15 year effective age of the improvements, their remaining economic life is estimated at 30 years.
K. Leased Status
The subject property is currently 100 percent leased/occupied by the San Jose Stage Company on a month-to-month basis at a contract rental rate of $1.00 per month on a triple net expense basis. The Lessee is a non-profit organization and the Lessor (Successor Agency to the Redevelopment Agency of the City of San Jose) has agreed to the discounted rent in exchange for the arts, cultural and community services provided by the Lessee to the community in the SoFA district. It should be noted that the lease includes reference to a Parking Agreement in favor of the adjacent parcel north for the use of 12 parking spaces within the subject property. The agreement is dated June 1998 for a term of five years, plus three, five-year renewal options (expiration of June 2018 if all options were exercised). Discussions with representatives of the property owner and current Lessee revealed no knowledge that the agreement is still in effect. However, no formal termination notice was available to the appraiser for review. Valuation of the subject property is based on the extraordinary assumption that the Parking Agreement is no longer in effect. A copy of the lease/amendments is reproduced in the addenda of this report.
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V. HIGHEST AND BEST USE AND VALUATION METHODOLOGY
A. Highest and Best Use
Highest and best use is defined as “the reasonably probable use of property that results in the highest value” (The Appraisal of Real Estate, 14th Edition, 2013, p. 332).
Implied in the definition of highest and best use is that the determination of highest and best use takes into account the contribution of a specific use to the community, and community development goals, as well as the benefits of that use to individual property owners. The following sections discuss/conclude the highest and best use of the subject property, as if vacant, and as improved.
1. As If Vacant
For the highest and best use of land as though vacant, the use must meet the following four criteria: the highest and best use must be 1) physically possible, 2) legally permissible, 3) financially feasible, and 4) maximally productive. The following paragraphs discuss each of the four criteria and conclude the highest and best use of the subject site, as if vacant.
Physically Possible
The subject site, situated at the northeast corner of South 1st Street and East William Street, is comprised of a single legal parcel containing a total of approximately 0.444 acres or 19,343 square feet of land area, according to public records. The site is rectangular in shape, level at street grade, and fully improved with all offsites. It contains approximately 139 feet of frontage along South 1st Street and 137 feet of frontage along East William Street. Based on its rectangular shape and corner orientation, development utility and visibility/exposure is considered good. Consequently, the physical characteristics of the site tend to indicate that the highest and best use of the site, as if vacant, is for various types of development.
Legally Permissible
The subject’s current General Plan designation is Downtown and is zoned PQP (Public/Quasi-Public). Per our discussion with representatives from the City of San Jose Planning Department, if redevelopment/rezoning were considered, the most applicable zoning would be DC (Downtown Primary Commercial District). The DC zoning designation allows office, retail, service, residential, and entertainment uses in the Downtown Core Area. Lower intensity commercial uses are appropriate in outer parts of the Core Area (such as the subject’s location), peripheral to the high intensity Park Center/San Antonio Plaza redevelopment areas. Unless specifically
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designated, properties located in the DC district are not subject to any minimum set back requirements. Therefore, based on the physically possible and legally permissible uses, as well as considering the surrounding neighborhood, the highest and best use of the subject site, as if vacant, is considered to be some type of medium-high density mixed-use residential/commercial development with ground floor retail.
Financially Feasible/Maximally Productive
Physically, the subject appears to be suited for various types of development. Legally, the subject is general planned Downtown and should redevelopment/rezoning be considered, would most likely fall under the DC (Downtown Primary Commercial District) zoning district. The subject is situated within the SoFA district of downtown San Jose, considered to be on the southern periphery of downtown San Jose. As was noted in the Market Analysis chapter of this report, market conditions in the downtown San Jose submarket have improved over the past few years with several new projects planned/recently completed.
Based on the physically possible, legally permissible, and financially feasible/maximally productive uses, and considering the current economic climate and real estate market, the highest and best use of the subject site, as if vacant, is considered to be some type of medium-high density mixed- use residential/commercial development with ground floor retail.
Conclusion- As If Vacant
After analyzing the subject site based on the four highest and best use criteria, the highest and best use of the subject site, as if vacant, is considered to be some type of medium-high density mixed-use residential/commercial development with ground floor retail.
2. As Improved
In estimating the highest and best use of the subject property, as improved, consideration is given to the zoning of the site, quality, design, and functional utility of the existing improvements, as well as uses in the surrounding area.
The subject property, commonly known as the San Jose Stage Theater, consists of an approximate 6,761 rentable square foot, average quality, one story, freestanding, commercial building that was originally constructed in 1969, partially expanded and fully renovated for its current performing arts use in 1990, and is in average condition. The existing building improvements are situated on an approximate 0.444 acre or 19,343 square
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foot site, reflecting a floor area ratio (FAR) of 35 percent. The existing building improvements are considered functional for their current use. In addition, it could easily be converted to typical office space usage.
The following chapters value the subject property, based on the existing building improvements, and as a redevelopment site. Based on the conclusions presented herein, the highest and best use of the subject property, as improved, is considered to be interim use of the existing building improvements and until redevelopment with some type of medium-high density commercial/residential mixed use development, with ground floor retail, is financially feasible.
The subject site is large enough wherein its highest and best use value is as stand alone.
B. Valuation Methodology
This Appraisal Report utilizes the Direct Sales Comparison and Income Approaches to value. The Cost Approach is not utilized as investors in properties similar to the subject do not typically rely on this approach to value. A description of the Direct Sales Comparison Approach is provided below.
1. Direct Sales Comparison Approach
This approach is based on the principle of substitution, i.e., the value of a property is governed by the prices generally obtained for similar properties. In analyzing the market data, it is beneficial that the sales prices be reduced to common denominators to relate the degree of comparability to the property being appraised. The difficulty inherent in this approach is that no two properties are exactly alike.
2. Income Approach
An investment property is normally valued in proportion to its ability to produce income. Hence, the Income Approach involves an analysis of the property in terms of its ability to provide a net annual income. In the analysis of the subject property, the direct capitalization method is utilized.
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VI. VALUATION BY THE DIRECT SALES COMPARISON APPROACH
In this valuation scenario, value is estimated by comparing the subject property as improved with the existing building improvements with recent sales of properties considered similar and adjusting for various comparative differences. Comparisons are made based on the differences in physical and locational characteristics. In addition, conditions of sale, financing terms, and date of sale are also considered. In this analysis, the most appropriate unit of comparison is considered to be price per rentable square foot of building area and/or price per square foot of land area. The comparable improved sales are outlined on the following table, keyed to the following map, and are further described in the following section.
A. Comparable Improved Sales Discussion
Comparable 1 is located at 366 South 1st Street in downtown San Jose, one-block north of the subject. Commonly known as the former Camera One movie theater building, this 4,053 rentable square foot, one story, average quality, storefront commercial building was constructed in 1955, has been periodically updated, and is in average condition. The interior is configured for art gallery usage. The site has a general plan designation of Downtown and is zoned DC. The building improvements are situated on a 4,692 square foot site, reflecting a floor area ratio (FAR) of 86 percent.
In January 2018, this property transacted at a purchase price of $1,050,000, equivalent to a unit value of $259.07 per rentable square foot of building area and/or $223.79 per square foot of land area. Per discussions with a representative of the seller, the property was 100 percent leased to Two Fish Design at a significantly below market rent on a month-to-month basis. The purchase price was established via an appraisal.
Comparable 2 is located at 431 South 1st Street in downtown San Jose, one-half block north of the subject. Commonly known as the Corrotto building, this 6,969 rentable square foot, one story, average quality, storefront commercial building was constructed in 1935, periodically updated, and is in fair to average condition. The interior primarily consists of open area. The site has a general plan designation of Residential Neighborhood and is zoned DC. The building improvements are situated on a 7,004 square foot site, reflecting a floor area ratio (FAR) of roughly 100 percent.
In May 2017, this property transacted for a purchase price of $1,662,500, equivalent to a unit value of $238.56 per rentable square foot of building area and/or $237.36 per square foot of land area.
Comparable 3 is located at 501 Vine Street in downtown San Jose approximately one-half mile southwest of the subject. This 1,760 rentable square foot, one story,
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Table 1 Page 22.1 Comparable Building Sales Appraisal of 490 South 1st Street San Jose, California
Bldg. SF/ Land Area COE Sale Year Built/ SF/AC GP/ Price/SF Price/SF NOI/ Grantor/Grantee No. Location Date Price # of Stories FAR Zoning of Bldg Area of Land Area OAR Document #
1 366 S. 1st St. 1/18 $1,050,000 4,053 4,692 Downtown $259.07 $223.79 $78,431 Successor Agency of SJ San Jose 1955 0.11 DC 7.47% 366 S First Street, LLC APN: 467-46-075 1 86% Mkt. @ $1.75/sf/mo. NNN #23847757
2 431 S. 1st St. 5/17 $1,662,500 6,969 7,004 Downtown $238.56 $237.36 $134,860 Turco Settlement Tr San Jose 1935 0.16 DC 8.11% Adam Berg LT APN: 264-30-085 1 100% Mkt. @ $1.75/sf/mo. NNN #23648210
3 501 Vine St. 12/16 $876,000 1,760 6,453 Downtown $497.73 $135.75 $34,058 Successor Agency of SJ San Jose 1950s 0.15 DC 3.89% Bee & Bell Llc APN: 264-31-037 1 27% Mkt. @ $1.75/sf/mo. NNN #23535096
4 476 S. 1st St. 7/16 $1,240,000 3,395 5,663 NCC $365.24 $218.97 $65,698 Vincent & Marcy DiCarolis Trust San Jose 1930 0.13 DC 5.30% Full Gallop Llc APN: 467-47-007 1 60% Mkt. @ $1.75/sf/mo. NNN #23372380
5 495 S. 2nd St. 5/16 $1,075,000 3,478 4,792 Downtown $309.09 $224.33 $67,304 Fkiaras Family Trust San Jose 1950 0.11 DC 6.26% Toan Le & Maria Martins APN: 467-47-013 1 73% Mkt. @ $1.75/sf/mo. NNN #23293417
Subject Property 6,761 19,343 Downtown 490 S 1st Street 1969/1990 0.444 PQP San Jose 35% APN: 467-47-098
Source: Carneghi-Nakasako & Associates, January 2018 RN2017CNA230 Sales Comparable Sales Map
0 yds 200 400 600 Copyright © and (P) 1988–2006 Microsoft Corporation and/or its suppliers. All rights reserved. http://www.microsoft.com/streets/ Portions © 1990–2006 InstallShield Software Corporation. All rights reserved. Certain mapping and direction data © 2005 NAVTEQ. All rights reserved. The Data for areas of Canada includes information taken with permission from Canadian authorities, including: © Her Majesty the Queen in Right of Canada, © Queen's Printer for Ontario. NAVTEQ and NAVTEQ ON BOARD are trademarks of NAVTEQ. © 2005 Tele Atlas North America, Inc. All rights reserved. Tele Atlas and Tele Atlas North America are trademarks of Tele Atlas, Inc.
Appraisal: 490 South 1st Street, San Jose, California Page 23
average quality commercial building appears to have been constructed in the 1950s, has been periodically updated, and is in fair to average condition. The site has a general plan designation of Downtown and is zoned DC. The building improvements are situated on a 6,453 square foot site, reflecting a floor area ratio (FAR) of 27percent.
In January 2018, this property transacted at a purchase price of $876,000, equivalent to a unit value of $497.73 per rentable square foot of building area and/or $135.75 per square foot of land area. Per discussions with a representative of the seller, the property was 100 percent vacant at the time of sale. The highest of 6 submitted bids was accepted and the buyer intends to utilize the space as a law office.
Comparable 4 is located at 476 South 1st Street in downtown San Jose, adjacent north of the subject. This 3,395 rentable square foot, one story, average quality, storefront commercial/office building was constructed in 1930, has been periodically updated, and is in fair to average condition. The site has a general plan designation of Neighborhood/Community Commercial and is zoned DC. The building improvements are situated on a 5,663 square foot site, reflecting a floor area ratio (FAR) of approximately 60 percent.
In July 2016, this property transacted for a purchase price of $1,240,000, equivalent to a unit value of approximately $365.24 per rentable square foot of building area and /or $218.97 per square foot of land area. The property was not formally marketed as the buyer went directly to the seller.
Comparable 5 is located at 495 South 2nd Street in downtown San Jose, approximately one block east of the subject. This 3,478 rentable square foot, one story, average quality, three unit, storefront retail/commercial building was constructed in 1950, has been periodically updated, and is in average condition. The building improvements are situated on a 4,792 square foot site, reflecting a floor area ratio (FAR) of approximately 73 percent.
In May 2016, this property transacted for a purchase price of $1,075,000, equivalent to a unit value of approximately $309.09 per rentable square foot of building area and/or $224.33 per square foot of land area. The property was vacant at the time of sale and had been on the market for approximately 7 months prior to going under contract.
B. Comparable Improved Sales Analysis
The selected comparable transactions indicate an unadjusted price range from approximately $235.00 to $500.00 per rentable square foot of building area and/or $135.00 to $240.00 per square foot of land area. Adjustments are now applied to the comparable transactions to reflect comparative differences with the subject
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property. A Comparable Building Sales Adjustment Grid and a Comparable Land Sales Adjustment Grid are presented on the following pages.
It should be emphasized that although the adjustment process is a mechanical one, the analysis applied by the appraiser is actually less mechanical and more intuitive in nature. Specific adjustments are intended to represent the appraiser’s best judgment concerning the differential between each comparable and the subject. Any specific adjustment should be considered general in nature and the overall process is intended to narrow the pattern indicated by the comparable data.
Conditions of Sale
Conditions of sale represent motivations involved in purchase negotiations or decisions which may have affected the purchase price. All of the selected comparables are considered to have transacted under typical negotiations. Therefore, no conditions of sale adjustment is deemed warranted.
Financing
All of the selected comparable sales transacted on an all cash or cash-equivalent basis. Therefore, no adjustment is deemed warranted for financing.
Date of Sale
Comparables 1, 2 and 3 transacted within the past 13 months, considered reflective of current market conditions and no date of sale adjustment is deemed warranted. Comparables 4 and 5 transacted in mid-2016, considered an inferior market period and a positive date of sale adjustment is deemed warranted.
Specific Location
All of the selected comparables, except Comparable 3, are located within an approximate two-block radius of the subject in downtown San Jose. Based on their close proximity to the subject, no location adjustment is deemed warranted. Comparable 3 is located within close proximity to the Children’s Discovery Museum, considered a slightly superior specific location and a negative adjustment is deemed warranted.
Size
The subject contains 6,761 rentable square feet of building area. In general, larger properties will sell at a lower per square foot price than smaller ones, all other factors being equal, due to economies of scale. The smaller size of Comparable 3 and 3 warrants a negative adjustment. The remaining selected comparables are
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Table 2 Page 24.1 Comparable Building Sales Adjustment Grid Appraisal of 490 South 1st Street San Jose, California
Comparable 1 Comparable 2 Comparable 3 Comparable 4 Comparable 5 Address: 366 S. 1st St. 431 S. 1st St. 501 Vine St. 476 S. 1st St. 495 S. 2nd St. San Jose San Jose San Jose San Jose San Jose Rentable SF 4,053 6,969 1,760 3,395 3,478 Sale Date: 1/18 5/17 12/16 7/16 5/16 Sale Price: $1,050,000 $1,662,500 $876,000 $1,240,000 $1,075,000 Unadjusted Price/SF: $259.07 $238.56 $497.73 $365.24 $309.09 Conditions of Sale: 0.00% 0.00% 0.00% 0.00% 0.00% Financing: 0.00% 0.00% 0.00% 0.00% 0.00% Adjusted Sale Price: $1,050,000 $1,662,500 $876,000 $1,240,000 $1,075,000 Adjusted Price/SF: $259.07 $238.56 $497.73 $365.24 $309.09 Date of Sale/List 0.00% 0.00% 0.00% 5.00% 5.00% Price Adj for Mkt Cond/SF: $259.07 $238.56 $497.73 $383.51 $324.54 Specific Location 0.00% 0.00% -10.00% 0.00% 0.00% Size 0.00% 0.00% -20.00% 0.00% 0.00% Age/Condition 5.00% 5.00% 5.00% 5.00% 5.00% FAR/Parking 10.00% 15.00% 0.00% 5.00% 10.00% Total Adjusted %: 15.00% 20.00% -25.00% 10.00% 15.00%
Adjusted Per SF Bldg. Value $297.93 $286.27 $373.30 $421.86 $373.22
Source: Carneghi-Nakasako & Associates, January 2018 RN2017CNA230
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considered to be relatively similar in size as compared to the subject and no adjustment is deemed warranted.
Age/Condition
The subject building improvements were originally constructed in 1969, expanded/remodeled in 1990, and are in average condition. The inferior age/condition of all the selected comparables warrants a positive adjustment.
Floor Area Ratio (FAR)
Generally speaking, a property with a lower floor area ratio (FAR) will tend to sell for a higher per square foot of building area unit value as there is additional land for expansion, parking, and/or landscaping. The subject property indicates a floor area ratio (FAR) of approximately 35 percent. The higher FAR of all the selected comparables, except Comparable 3, warrants a positive adjustment. Comparable 3 indicates a relatively similar FAR as compared to the subject and no adjustment is deemed warranted.
C. Per Unit Value Conclusion(s)
1. Price/SF of Bldg Area
Subsequent to adjustments, the comparables indicate a range from approximately $285.00 to $420.00 per rentable square foot of building area. Considering the subject’s physical and locational characteristics, a per unit value near the middle of the adjusted range, at $360.00 per rentable square foot of building area, is considered reasonable for the subject. Applying the concluded per unit value to the subject’s 6,761 rentable square feet of building area, results in a market value for the subject property, on a price per rentable square foot of building area basis, by the Direct Sales Comparison Approach, as follows:
6,761 SF x $360.00/SF = $2,433,960
Rounded = $2,430,000
2. Price/SF of Land Area
Subsequent to adjustments, the comparables indicate a range from approximately $80.00 to $190.00 per square foot of land area. Considering the subject’s physical and locational characteristics, as well as current zoning, a per unit value near the middle of the adjusted range, at $115.00 per square foot of land area, is considered reasonable for the subject. Applying the concluded per unit value to the subject’s 19,343 square feet of
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Table 3 Page 25.1 Comparable Land Sales Adjustment Grid Appraisal of 490 South 1st Street San Jose, California
Comparable 1 Comparable 2 Comparable 3 Comparable 4 Comparable 5 Address: 366 S. 1st St. 431 S. 1st St. 501 Vine St. 476 S. 1st St. 495 S. 2nd St. San Jose San Jose San Jose San Jose San Jose Land SF 4,692 7,004 6,453 5,663 4,792 Sale Date: 1/18 5/17 12/16 7/16 5/16 Sale Price: $1,050,000 $1,662,500 $876,000 $1,240,000 $1,075,000 Unadjusted Price/SF of Land: $223.79 $237.36 $135.75 $218.97 $224.33 Conditions of Sale: 0.00% 0.00% 0.00% 0.00% 0.00% Financing: 0.00% 0.00% 0.00% 0.00% 0.00% Adjusted Sale Price: $1,050,000 $1,662,500 $876,000 $1,240,000 $1,075,000 Adjusted Price/SF: $223.79 $237.36 $135.75 $218.97 $224.33 Date of Sale/List 0.00% 0.00% 0.00% 5.00% 5.00% Price Adj for Mkt Cond/SF: $223.79 $237.36 $135.75 $229.91 $235.55 Specific Location 0.00% 0.00% -10.00% 0.00% 0.00% Size -25.00% -20.00% -20.00% -20.00% -20.00% Shape/Utility 0.00% 0.00% 0.00% 0.00% 0.00% GP/Zoning -10.00% 0.00% -10.00% 0.00% -10.00% Total Adjusted %: -35.00% -20.00% -40.00% -20.00% -30.00%
Adjusted Per SF Land Value $145.46 $189.89 $81.45 $183.93 $164.88
Source: Carneghi-Nakasako & Associates, January 2018 RN2017CNA230 Land AG
Appraisal: 490 South 1st Street, San Jose, California Page 26
land area, results in a market value for the subject property, on a price per square foot of land area basis, by the Direct Sales Comparison Approach, as follows:
19,343 SF x $115.00/SF = $2,224,445
Rounded = $2,220,000
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Appraisal: 490 South 1st Street, San Jose, California Page 27
VII. VALUATION BY THE INCOME APPROACH
Investment properties are normally valued in proportion to their ability to produce a net annual income. In the analysis of the subject property by the Income Approach, the direct capitalization analysis method is utilized. In direct capitalization, the market value of a property is estimated by deducting a stabilized vacancy and applicable expenses from the potential gross annual income projection to arrive at a pre-tax net income. This estimated net income is then capitalized at an appropriate overall capitalization rate commensurate with the risk inherent in ownership of the property. The appropriate overall rate utilized in capitalization of the net income is typically derived from comparable sales. Direct capitalization analysis assumes the property is operating at stabilized income and occupancy. The following paragraphs discuss each component of direct capitalization analysis.
A. Economic Rent Estimate
Market rent (or economic rent) is “the most probable rent that a property should bring in a competitive and open market reflecting all conditions and restrictions of the typical lease agreement, including permitted uses, use restrictions, expense obligations, term, concessions, renewal and purchase options, and tenant improvements (TIs)” (The Appraisal of Real Estate, 14th Edition, 2013, p.447).
Rental rates in the subject’s market are typically expressed on both a triple net and gross expense basis. In a triple net lease, the Lessor is typically responsible for structural repairs/reserves and non-reimbursable management costs while the Lessee is responsible for all other operating expenses. In a gross lease, the Landlord is typically responsible for base year taxes and insurance; the Lessee is typically responsible for all other expenses. For the purposes of this analysis, the gross leases are converted to a triple net expense basis. The following paragraphs discuss/describe the selected rent comparables. These comparables vary in age/condition, appeal, and quality.
The superior age/condition and free rent provided within Rent Comparables 1 and 3 indicates a lower rental rate for the subject. The superior age/condition of Rent Comparable 2 indicates a lower rental rate for the subject. The free rent provided within Rent Comparable 4 is offset by its older lease date. After adjustments, a similar rental rate is indicated for the subject.
Economic Rent Conclusion
Subsequent to adjustment, the comparables indicate a range from approximately $1.80 to $2.20 per rentable square foot per month triple net for the subject property. Based on the subject’s physical and locational characteristics, an economic rental rate nearer the lower end of the adjusted range, at $1.80 per square foot per month triple net, is considered reasonable for the subject property. The concluded
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Table 4 Page 27.1 Comparable Leases Survey Appraisal of 490 South 1st Street San Jose, California
Initial Rent Tenant/ Lease Lease Year Built/ Per SF/Month Expense TI's/SF Term- No. Location Date SF (NRA) Renov. (NNN) Basis Escalations Free Rent Mos.
1 Forager Tasting Room & Eatery 1/17 14,000 1930s/ $2.25 Annual 3% As Is 72 410-420 South 1st. St. 2016 8 mths San Jose
2 Office tenant 9/16 4,930 1910/ $2.40 Gr Annual 3% $1.00 60 451 South 1st St. 2016 ($0.15) Exp None San Jose $2.25 NNN
3 One Rent 7/16 17,777 2010 $2.25 Gr $2.25/6m, $2.31/3m, $1.13 63 505 South Market St. ($0.15) Exp $2.39/3m, $2.46/1y 1m, 3 mths San Jose $2.10 NNN $2.53/1y 1m, $2.68/1y
4 Lincoln Law School 7/15 7,000 1951/2007 $2.20 Annual 3% As Is 60 384 South 2nd St (1) 3 mos free San Jose
Subject Property 6,761 1969/ 490 S 1st St. 1990 San Jose
(1) Essentially reflects a NNN lease as property is tax-exempt due to non-profit status of tenant). Source: Carneghi-Nakasako & Associates, January 2018 RN2017CNA230 Leases Comparable Leases Map
0 yds 200 400 600 Copyright © and (P) 1988–2006 Microsoft Corporation and/or its suppliers. All rights reserved. http://www.microsoft.com/streets/ Portions © 1990–2006 InstallShield Software Corporation. All rights reserved. Certain mapping and direction data © 2005 NAVTEQ. All rights reserved. The Data for areas of Canada includes information taken with permission from Canadian authorities, including: © Her Majesty the Queen in Right of Canada, © Queen's Printer for Ontario. NAVTEQ and NAVTEQ ON BOARD are trademarks of NAVTEQ. © 2005 Tele Atlas North America, Inc. All rights reserved. Tele Atlas and Tele Atlas North America are trademarks of Tele Atlas, Inc. Table 5 Page 27.2 Comparable Rental Adjustment Grid Appraisal of 490 South 1st Street San Jose, California
Comparable 1 Comparable 2 Comparable 3 Comparable 4 Address: 410-420 South 1st. St. 451 South 1st St. 505 South Market St. 384 S 2nd St. San Jose San Jose San Jose San Jose Rentable SF 14,000 4,930 17,777 7,000 Lease Date 1/17 9/16 7/16 7/15 Unadjusted Rent/Sq. Ft: $2.25 $2.25 $2.10 $2.20 Date of Lease/List 0% 0% 0% 5% Price Adj for Mkt Cond/Sq. Ft: $2.25 $2.25 $2.10 $2.31 Location 0% 0% 0% 0% Size 0% 0% 0% 0% Age/Condition -10% -10% -10% 0% Concessions/TIs -10% 0% -5% -5% Total Adjusted %: -20% -10% -15% -5%
Adjusted Rent/SF $1.80 $2.03 $1.79 $2.19
Source: Carneghi-Nakasako & Associates, January 2018 RN2017CNA230
Appraisal: 490 South 1st Street, San Jose, California Page 28
economic rental rate is based on a typical three to five year lease term, annual three percent escalations, and the subject’s “as is” condition.
B. Current Leased Status
The subject property is currently 100 percent leased/occupied by the San Jose Stage Company on a month-to-month basis at a contract rental rate of $1.00 per month on a triple net expense basis. The Lessee is a non-profit organization and the Lessor (Successor Agency to the Redevelopment Agency of the City of San Jose) has agreed to the discounted rent in exchange for the arts, cultural and community services provided by the Lessee to the community in the SoFA district.
C. Potential Gross Annual Income Estimate
The precious two sections discussed/concluded economic and current contract rent for the subject property. Market rent for the subject property is concluded at $1.80 per rentable square foot per month triple net. The concluded economic rental rate is based on a typical three to five year lease term, annual three percent escalations, and the subject’s “as is” condition.
Again, the subject property is currently rented on a month-to-month basis at a rate of $1.00 per month. The Lessee is a non-profit organization and the Lessor (City of San Jose) has agreed to the discounted rent in exchange for the arts, cultural and community services provided by the Lessee to the community in the SoFA district.
Based on the “discounted” monthly rental basis, economic rent, at $1.80 per square foot per month triple net, is processed in the income analysis and results in an estimated potential gross annual income for the subject property as follows:
6,761 SF x $1.80/SF/Mo. x 12 Mos. = $146,038
D. Vacancy and Expenses
In order to calculate effective gross income, a stabilized annual vacancy and collection loss is typically deducted. This stabilized annual vacancy is typically considered appropriate for tenant turnover, uncollectible rent and the potentially unoccupied periods during an investment term. A five percent vacancy factor is often considered appropriate for similar properties and is processed into the income analysis. Deducting five percent from the gross annual income estimate results in an effective gross income estimate of $138,736.
In a triple net lease, the Lessor is typically responsible for structural repairs/reserves and non-reimbursable management costs while the Lessee is responsible for all other operating expenses. Based on the quality and condition of the improvements, two percent of effective gross income is deducted for structural repair/reserves. An
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Appraisal: 490 South 1st Street, San Jose, California Page 29
expense of one percent of effective gross income is deducted for non-reimbursable management costs.
E. Net Operating Income Estimate
As shown in the Reconstructed Operating Statement on the following page, net operating income is estimated at $134,574. The net operating income estimate is then capitalized into an indication of value based on a market derived overall capitalization rate, as discussed in the following section.
F. Overall Capitalization Rate Selection
The appropriate rate of capitalization for the subject property is based on the quality, quantity, and durability of the projected income stream, the demand for and supply of competitive space, the relative stability of the expense projection, and the age, size, and quality of the subject in comparison with similar properties. The overall capitalization rate for the subject’s net operating income is extracted from data associated with sales of comparable properties.
As presented in the Comparable Building Sales table in the previous Valuation by the Direct Sales Comparison Approach chapter of this report, the overall capitalization rates indicate a range from 3.89 percent range to 8.11 percent. Again, all of the selected comparables represent a fairly good indicator for the subject due to their similarities of location, size, and GP/zoning designations. Therefore, based on the subject’s physical and locational characteristics, as well as processing market rent, an overall capitalization rate in the 5.50 to 6.00 percent range is considered reasonable for the subject.
Furthermore, according to the Cushman & Wakefield Bay Area Marketbeat report on the Investment market as of the third quarter 2017, the Bay Area continues to be one of the nation’s premier commercial real estate investment destinations in the third quarter 2017. The Bay Area, as a whole, held the 3rd position, trailing New York City and Los Angeles with one of the strongest regional economies in the U.S. According to the third quarter 2017 report, the average overall cap rate for all of the Bay Area markets is 5.5%, up slightly from the 5.2% one year prior. More specifically, as of the third quarter 2017, the average overall cap rate for the Bay Area office and retail markets was 5.4% and 4.4%, respectively.
Based on the above analysis, and considering the subject’s physical and locational characteristics, an overall rate of 6.00 percent is considered reasonable and processed in the income analysis.
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Table 6 Page 29.1 Reconstructed Operating Statement Appraisal of 490 South 1st Street San Jose, California
Gross Annual Income Estimate:
490 S 1st Street- 6,761 sf x $1.80 /sf/month NNN x 12 mos $146,038
Less Vacancy (5% of PGI): ($7,302)
Effective Gross Income: $138,736
Less Expenses
Management 1.0% of EGI ($1,387) Structural Repairs/Reserves 2.0% of EGI ($2,775)
Total Operating Expenses: ($0.62) /sf/yr ($4,162)
Net Operating Income: $134,574
Overall Capitalization Rate: 6.00%
Value Conclusion by the Income Approach: $2,242,894
Rounded: $2,240,000 $/SF of Bldg Area $331.31
Source: Carneghi-Nakasako & Associates, January 2018 RN2017CNA230 Op St
Appraisal: 490 South 1st Street, San Jose, California Page 30
G. Value Conclusion by the Income Approach
Applying the concluded overall capitalization rate to the subject’s net operating income estimate results in a value conclusion by the Income Approach as follows:
$134,574 ÷ 6.00% = $2,242,894
Rounded: = $2,240,000
Based on the subject’s relatively small size, it most likely appeals to the owner-user market, thus, no lease-up costs are deducted. This is supported by the number of owner-user purchases as presented previously in the Valuation by the Direct Sales Comparison Approach chapter of this report.
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Appraisal: 490 South 1st Street, San Jose, California Page 31
VIII. RECONCILIATON AND FINAL VALUE CONCLUSION
The “as is” fee simple market value indicated for the subject property by the approaches used in this appraisal assignment is as follows:
Direct Sales Comparison Approach $2,220,000 (as a redevelopment site)
Direct Sales Comparison Approach $2,430,000 (based on existing bldg. improvements)
Income Approach $2,240,000
The Direct Sales Comparison Approach involved the analysis of properties considered most similar to the subject. This approach used the price per rentable square foot of building area, and price per square foot of land area, units of comparison. The weakness of this approach is that no two properties are exactly alike. Based on the number of owner-user purchases in the downtown San Jose market, the Direct Sales Comparison Approach is considered a good indicator for the subject.
The Income Approach to value utilized the direct capitalization analysis method in determining the market value of the subject property. The Income Approach is considered a good indicator of value due to the availability of income, expense, and overall rate information.
The Direct Sales Comparison Approach indicates that the subject’s market value estimate, as improved with the existing building improvements, is slightly higher than that as a redevelopment site. This indicates that the existing building improvements continue to contribute interim value to the property in excess of land only. In correlating a final market value estimate for the subject property, the Direct Sales Comparison and Income Approaches to value are given equal emphasis.
Based on our research and analysis and subject to the limiting conditions and assumptions contained herein, it is the opinion of the appraiser that the “as is” fee simple market value of the subject property, as of January 13, 2018, is:
TWO MILLION THREE HUNDRED THOUSAND DOLLARS
($2,300,000)
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Appraisal: 490 South 1st Street, San Jose, California Page 32
IX. EXPOSURE/MARKETING PERIOD
A reasonable exposure/marketing period for the subject property is to be estimated in the event it was to be placed on the open market for sale. In order to estimate a reasonable exposure/marketing period, several factors must be taken into consideration. First, the overall demand and strength of the specific real estate market segment must be analyzed. If the market is relatively healthy, the exposure/marketing period will be shorter compared to a softer market in which the exposure/marketing period will be longer. Second, the physical as well as income characteristics of a particular property must be considered.
Based on the exposure/marketing periods for the sale of similar properties, together with conversations with active brokers in the market, it is our opinion that the subject property will require an exposure period of approximately 6 to 9 months, as of the date of valuation. A similar marketing period of approximately 6 to 9 months is also estimated.
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ADDENDA SUBJECT PHOTOGRAPHS
(photos taken 1/10/2018)
Subject Property – 490 South 1st St., San Jose
Subject Property – Front parking area
SUBJECT PHOTOGRAPHS
View from NWC of property
Street Scene
SUBJECT PHOTOGRAPHS
Street Scene (2)
Bar in lobby
SUBJECT PHOTOGRAPHS
Lobby restrooms
Lobby restrooms (2)
SUBJECT PHOTOGRAPHS
Small office
Dressing room
SUBJECT PHOTOGRAPHS
Dressing room (2)
Restroom in dressing area
SUBJECT PHOTOGRAPHS
Green room
View from stage
SUBJECT PHOTOGRAPHS
Rear of stage
COMPARABLE BUILDING SALES PHOTOGRAPHS
Comparable Sale 1
Comparable Sale 2
COMPARABLE BUILDING SALES PHOTOGRAPHS
Comparable Sale 3
Comparable Sale 4
COMPARABLE BUILDING SALES PHOTOGRAPHS
Comparable Sale 5
COMPARABLE LEASES PHOTOGRAPHS
Comparable Lease 1
Comparable Lease 2
COMPARABLE LEASES PHOTOGRAPHS
Comparable Lease 3
Comparable Lease 4
COMPARABLE SALES DATA SHEETS
Comparable Sale 1
Address: 366 South 1st Street City: San Jose APNs: 467-46-075 Bldg. Size – SF 4,053 Lot Size – SF 4,692 General Plan Downtown Zoning DC Sale Date: 1/18 Sales Price: $1,050,000 Price/SF Bldg: $259.07 Price/SF Land: $223.79 Grantor: Successor Agency Grantee: 366 S 1st St., LLC Document #: #23847757 Confirmation: Mr. Richard Keit, Successor Agency, 408 795-1849 1/24/18 Discussion: Improved with former Camera One movie theater
2017CNA230 S 1st COMPARABLE SALES DATA SHEETS
Comparable Sale 2
Address: 431 South 1st Street City: San Jose APNs: 264-30-085 Bldg. Size – SF 6,969 Lot Size – SF 7,004 General Plan Downtown Zoning DC Sale Date: 5/17 Sales Price: $1,662,500 Price/SF Bldg: $238.56 Price/SF Land: $237.36 Grantor: Turco Settlement Grantee: Adam Berg LT Document #: #23648210 Confirmation: CoStar and public records Discussion: Improved with a storefront commercial bldg.
2017CNA230 S 1st COMPARABLE SALES DATA SHEETS
Comparable Sale 3
Address: 501 Vine Street City: San Jose APNs: 264-31-037 Bldg. Size – SF 1,760 Lot Size – SF 6,453 General Plan Downtown Zoning DC Sale Date: 12/16 Sales Price: $876,000 Price/SF Bldg: $497.73 Price/SF Land: $135.75 Grantor: Successor Agency Grantee: Bee & Bell LLC Document #: #23535096 Confirmation: Mr. Richard Keit, Successor Agency, 408 795-1849 1/24/18 Discussion: Improved with small, older, commercial bldg..
2017CNA230 S 1st COMPARABLE SALES DATA SHEETS
Comparable Sale 4
Address: 476 S. 1st Street City: San Jose APNs: 467-47-007 Bldg. Size – SF 3,395 Lot Size – SF 5,663 General Plan NCC Zoning DC Sale Date: 7/16 Sales Price: $1,240,000 Price/SF Bldg: $365.24 Price/SF Land: $218.97 Grantor: DiCarolis Tr Grantee: Full Gallop LLC Document #: #23372380 Confirmation: CoStar and public records Adjacent north of the subject. Improved with older, average quality, Discussion: storefront commercial bldg.
2017CNA230 S 1st COMPARABLE SALES DATA SHEETS
Comparable Sale 5
Address: 495 S. 2nd Street City: San Jose APNs: 467-47-013 Bldg. Size – SF 3,478 Lot Size – SF 4,792 General Plan Downtown Zoning DC Sale Date: 5/16 Sales Price: $1,075,000 Price/SF Bldg: $309.09 Price/SF Land: $224.33 Grantor: Fkiaras Grantee: Le & Martins Document #: #23293417 Confirmation: CoStar and public records Discussion: Improved with a small retail commercial bldg..
2017CNA230 S 1st I AME ME O EASE