COMPLETE APPRAISAL (SELF-CONTAINED REPORT)
Property of Consolidated Edison Company Of New York, Inc.
**************** Vacant Parcel East Side of Windmill Road Town of North Castle Westchester County, New York ****************
VALUATION DATE Februaiy 29, 1996
SUBMITTED Fred B. Tyler, Ed.D. Senior Real Estate Representative Consolidated Edison Company of New York, Inc. 511 Theodore Fremd Avenue Rye, New York 10580
PREPARED BY McGrath, Basciani and Associates, Inc. Real Estate Appraisers and Counselors
1 McGRATH, " i BASCIANI J & ASSOCIATES March 4,1996
Fred B. Tyler, Ed.D. Senior Real Estate Representative Consolidated Edison Company Of New York, Inc. 511 Theodore Fremd Avenue Rye, New York 10580
Re: Appraisal of Vacant Parcel East Side of Windmill Road Town of North Castle Westchester County. New York
Dear Mr. Tyler:
In accordance with your request, we have inspected the captioned property, consisting of an 11,622± square foot parcel of vacant land, for the purpose of providing you with our estimate of "as-is" market value, of the fee simple interest. The market value estimate is rendered as of the date of our physical inspection, February 29, 1996.
To this end, we have conducted an analysis of the physical aspects of the subject property, and have reviewed relevant market and economic considerations. The enclosed consists of a complete appraisal, submitted within a self-contained report. Within this report is a detailed description of the approaches relied upon in arriving at the valuation estimate.
As a result of this analysis, it is our opinion that the market value of the captioned property, as of February 29, 1996, was as follows:
THREE THOUSAND FIVE HUNDRED ($3.500) DOLLARS or, $0.30 per square foot (1 l,622dt sq. ft.), Rd.
McGRATH, BASCIANI 2 & ASSOCIATES This appraisal has been prepared to conform to the Uniform Standards of Professional Appraisal Practice (USPAP), adopted by the Appraisal Foundation. We believe the content of this report covers the scope of our assignment. If there are any questions, or if you should require clarification, do not hesitate to call.
Thank you for providing us with the opportunity to assist you with this matter.
Very truly yours,
George R. Basciani, MAI, RM President Reviewed and Approved (N.Y. State License # 16232-Gen. Appraiser)
McGRATH, BASCIANI 3 & ASSOCIATES TABLE OF CONTENTS
Title Page...... 1 Letter Of Transmittal...... 2 Table Of Contents...... 4 Executive Summary...... 5 Nature Of The Assignment...... 7 Purpose And Date Of Appraisal...... 7 Scope Of The Appraisal...... 9 Current Ownership & Sales History...... 9 Property Identification - Legal Description...... 9 Property Inspection...... 9 Property Rights Appraised...... 11 Town And Neighborhood Data...... 13 Site Data...... 16 Improvement Data...... 23 Assessment And Tax Data...... 24 Zoning Data...... 25 Highest And Best Use...... 27 Sales Comparison Approach...... 30 Land Sales...... 31 Summary...... 47 Underlying Assumptions And Contingent Conditions...... 48 Appraiser’s Certification...... 49
M . 1 McGRATH „ A BASCIANI 4 J&ASSOCL EXECUTIVE SUMMARY Following is a summary of salient factual data and of the valuation conclusion. The value estimate presented herein is based upon the material in the report and the appraisers' background, knowledge, training, and experience. It has been developed and reached through the use of recognized appraisal theory, method, technique, and practice, and represent the appraisers' judgment and opinion with respect to the subject property as of February 29, 1996.
Property Summary
Type of Property Vacant Land. Land Area 11,622± Square Feet (0.267 Acres). Property Rights Appraised Fee Simple Interest. Assessed Valuation $3,000. Real Estate Taxes $2,146.50. Zoning District "R-1.5A, One Family Residence.” Highest and Best Use Sale To An Adjoining Property Owner.
Conclusion:
Market Value Of Subject Property $3,500.
McGRATH, BASCIANI & ASSOCIATES SUBJECT PHOTOGRAPH
EAST SIDE OF WINDMILL ROAD TOWN OF NORTH CASTLE, N. Y.
* * * * *
1 McGRATH, "iBASC IAN I 6 M J & ASSOCIATES NATURE OF THE ASSIGNMENT McGrath, Basciani and Associates, Inc. has been retained to estimate the market value of the real property known as Section 1, Block 4, Lot 10D1, Windmill Road, Town of North Castle, Westchester County, New York. The property consists of an 11,622± square foot parcel of vacant land. The appraisal will address the physical, economic, governmental and marketing considerations affecting the value of the subject real property.
SUBMITTED Fred B. Tyler, Ed.D., Senior Real Estate Representative, Consolidated Edison Company Of New York, Inc., 511 Theodore Fremd Avenue, Rye, New York, 10580.
APPRAISAL FOUNDATION STANDARDS This appraisal has been prepared to conform to the Uniform Standards of Professional Appraisal Practice (USPAP), adopted by the Appraisal Foundation.
PURPOSE AND DATE OF APPRAISAL The purpose of this appraisal is to estimate the market value of the subject property, as of February 29, 1996, for your planning purposes.
The definition of market value which follows is taken from Uniform Standards of Professional Appraisal Practice (USPAP) instructions, adopted by the Appraisal Standards Board of the Appraisal Foundation.
"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 and knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a date and the passing of title from seller to buyer under conditions whereby-"
McGRATH, BASCIANI 7 & ASSOCIATES Market Value Definition. Continued.
” 1. Buyer and seller are typically motivated. 2. Both parties are well informed or well advised, and acting in what they consider their own best interests. 3. A reasonable time is allowed for exposure in the open market. 4. Payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto. 5. 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."
In rendering an estimate of market value, the appraisers have considered various marketplace factors affecting the value of real property.
Among several criteria, we have considered typical financing patterns, its "R-1.5A" zoning, development capacity of the 11,622± square foot site, neighborhood characteristics and influences, and availability and sufficiency of municipal utilities and services. We have also considered overall marketability of the property. Each of these criteria has been carefully considered and, when viewed as a whole, provide for the formulation of intelligent, considered, and informed value conclusions, within the context of the definition of market value presented above.
McGRATH, BASCIANI 8 & ASSOCIATES SCOPE OF THE APPRAISAL Within this report, we have utilized the Sales Comparison Approach to value the subject land, an unimproved parcel, comprising 11,622± square feet.
To this end, information gathered within this report was researched by McGrath, Basciani & Associates, through leads from 1) Real Estate Data, Inc., a cumulative, comparable sales report for real estate, 2) area real estate brokers, and 3) past records of McGrath, Basciani & Associates. All information contained herein has been verified through municipal records and through the Westchester County Division of Land Records located in the City of White Plains.
CURRENT OWNERSHIP & SALES HISTORY The present owner of record is Consolidated Edison Company Of New York, Inc. Ownership of subject property has not transferred in the past three years.
PROPERTY IDENTIFICATION (LEGAL DESCRIPTION) The subject of this appraisal is situated at the east side of Windmill Road at the confluence of Long Pond Road, Town of North Castle, Westchester County, New York; it is municipally identified on the official tax assessment maps and rolls of the Town of North Castle as Section 1, Block 4, Lot 10D1.
PROPERTY INSPECTION Subject was physically inspected for the purpose of this appraisal report on February 29, 1996 by Stanley A. Hyman. It was subsequently revisited for further review and analysis.
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McGRATH. _ BASCIANI 10 H W H -I J S. ASSOCIATES PROPERTY RIGHTS APPRAISED Real Estate is the physical land and appurtenances affixed to the land, e.g., structures. Real Property consists of all interests, benefits, and rights inherent in the ownership of physical real estate.
A rental property is not always a complete parcel of real estate which includes a complete bundle of rights, i.e., "fee simple” rights. When a property is leased, different interests are created, such as the "leased fee" interest and "leasehold" interest. Within this appraisal, we will primarily be concerned with the value of the fee simple interest, since the subject is vacant, unimproved land and apparently unencumbered by lease.
The various "fee simple" and lease interests, as shown in The Dictionary of Real Estate Appraisal 1984 edition, are defined as follows:
"Fee Simple" is defined as: Absolute ownership unencumbered by any other interest or estate; subject only to the limitations of eminent domain, escheat, police power, and taxation.
"Leased Fee Estate" is defined as: An ownership interest held by a landlord with the right of use and occupancy conveyed by lease to others; usually consist of the right to receive rent and the right to repossession at the termination of die lease.
"Leasehold Estate" is defined as: The right to use and occupy real estate for a stated term and under certain conditions; conveyed by a lease.
PERSONAL PROPERTY. FIXTURES AND INTANGIBLE ITEMS This appraisal is of the real estate only, and excludes the value of any personal property, fixtures and intangible items.
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1 McGRATH, - i BASCIANI 12 J & ASSOCIATES TOWN AND NEIGHBORHOOD DATA The Town of North Castle is located in the east central portion of Westchester County, roughly 30 miles north of mid-town Manhattan. North Castle is bounded on the north by the Towns of Bedford and New Castle, on the east by the Town of Pound Ridge and Fairfield County Connecticut (Towns of Greenwich and Stamford), on the south by the City of White Plains and the Town of Harrison and on the west by the Town of Mount Pleasant. North Castle's population increased 6.3% since 1980, for a 1990 population of 10,061. The Town continues to enjoy the reputation as one of the more affluent and desirable residential communities within the County.
Geographically, North Castle is divided into three unincorporated areas, North White Plains, Armonk and Banksville-Middle Patent. The latter two areas comprise some of the wealthiest sections in Westchester County, characterized by the last remnants of large acreage estates, and homes of executives of Westchester-based Fortune 500 Corporations.
A neighborhood is a "group of complementary land uses," affected by similar operation of the four outside forces that affect value, i.e., social, economic, governmental and environmental. The area most closely surrounding the subject property, whether it contains residential properties only or a mixture of commercial and residential properties, is called a neighborhood. A neighborhood is often defined by fairly specific geographic and land use boundaries.
Subject is located in the northeastern section of the Town of North Castle within a residential subdivision known as Windmill Farms. Developed approximately 30-35 years ago, this subdivision consists primarily of ranch, split level and colonial style single family residences on sites having, for the most part, minimum lot areas of 1.5± acres. Both homes and grounds throughout the neighborhood have been generally well maintained and pride of ownership is apparent. Demand for homes in this area of North Castle has remained relatively stable over the recent past, despite an abatement in sales activity in other portions of the Town. The stable character of this neighborhood, in conjunction with relatively moderate prices ($400,000 - $500,000) for the Armonk area have been contributing factors to the desirability and marketability of homes in the Windmill Farms subdivision.
McGRATH, BASCIANI 13 & ASSOCIATES The subject area is located approximately three (3) miles northeast of the central business district of Armonk, which includes a myriad of local retail and personal service establishments. A more comprehensive selection of goods and services is available within nearby White Plains, Mount Kisco and Greenwich (Connecticut). Significant local and commuter surface routes of transportation are conveniently located including NYS Routes 22 and 128, Bedford-Banksville Road, Interstate 684 (3± miles) and the Merritt Parkway (4± miles) south in Connecticut. Commuter train service is within short driving distance to stations at North White Plains, Chappaqua and Pleasantville with travel time to New York City ranging from approximately 40 minutes to one hour. Local and regional retail and employment centers are conveniently located and easily accessible from the Armonk area and this further enhances the appeal of the community as a desirable business and residential area.
In conclusion, the subject property is situated in a stable residential area of the Town of North Castle. A semi-rural ambiance exists within the specific vicinity of the subject property due to sparse development, to the immediate east and south, resulting from nearby wetlands and property owned and utilized by the Town of North Castle (water supply).
1 McGRATH A BASCIANI 14 J&ASSOCL 1 McGRATH, A BASCIANI J & ASSOCIATES SITE DATA A survey of the subject site was not available and, therefore, reliance has been placed on municipal records for information relative to site dimensions.
LOCATION East side of Windmill Road at the confluence of Long Pond Road, Town of North Castle, Westchester County, New Yoik.
SIZE/SHAPE Generally triangular, inside parcel containing 11,622± square feet (0.267 acres). Northern property line of 150± feet, eastern boundary of 117.22± feet and southern line, along Windmill Road and driveway serving the Water Department of the Town of North Castle, of approximately 186.31 feet.
FRONTAGE 135.50± feet of frontage along the east side of Windmill Road.
TOPOGRAPHY Within the southeast portion of the site, the property rises gradually from the grade of the driveway serving the Town of North Castle Water Department toward the rear (northern) property line. Along the eastern portion of Windmill Road, subject slopes away from grade, in an eastern direction, and then rises toward the northern boundary line.
UTILITIES Public utilities include telephone, electric and water. Septic systems are required in the absence of sanitary sewer.
FRONTING ROADS Windmill Road and Long Pond Road, in the vicinity of the subject are two-way paved public streets. The eastern portion of the property is not accessible by vehicle as a cable is stretched across the driveway serving the Town of North Castle Water Department.
McGRATH, BASCIANI 16 & ASSOCIATES SITE DATA - (CONT'D)
EASEMENTS/ ENCROACHMENTS No apparent adverse easements or encroachments noted.
FLOOD ZONE According to Flood Hazard Map #360923 0002 B, dated December 2, 1983, subject property is NOT in a federally designated Flood Hazard Area.
M m 1 McGRATH _ *4 BASCIANI 17 JSlASSOCI, | Tax Ma
M . 1 McGRATH _ A BASCIANI 18 J&ASSOCL SOUTHERN VIEW ALONG WINDMILL ROAD
NORTHERN VIEW ALONG W IN D M IL L B 0|ft 1 McGRATH ^ BASCIANI 19 ■ W B J& ASSOCIATES NORTHERN VIEW OF SUBJECT SITE
SOUTHEAST VIEW OF SUBJECT McGRATH, BASCIANI 20 m W M = 1 J& ASSOCIATES [Flood Plain Map]
Z O N E C
ZONE
McGRATH, BASCIANI 21 -]& ASSOCIATES 0 Property Appraisal Services, Inc.
VIEW WEST OF THE SUBJECT ON EAST GUNHILL ROAD
DETAIL OF INDUSTRIAL BUILDING AT 3290 LACONIA AVENUE
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VIEW OF SUBJECTS YATES AVENUE FRONTAGE
INTERIOR VIEW OF ONE-STORY COMMERCIAL BUILDING
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VIEW OF LACONIA EASEMENT
VIEW OF 1100 EAST GUN HILL SITE
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PURPOSE OF APPRAISAL
The purpose of this appraisal is to estimate the fair market value of the subject properties,
as of the date of the inspection on October 15, 1993.
PROPERTY RIGHTS APPRAISED
3290 Laconia Avenue - Fee Simple Interest - Industrial Building
1100 East Gunhill Rd. - Fee Simple Estate - Vacant Site
Laconia Avenue Easement - Leased Fee - Vacant Site
DATE OF VALUATION:
This appraisal report is made as of the date of inspection on October 15, 1993.
LEGAL DESCRIPTION:
A legal description was provided by ownership and is included in the addenda. Please
refer to the plot plan for a graphic depiction of the sites as well as the improvement.
SALES HISTORY
The subject has been held by Con Edison for in excess of five years and has been
utilized as an electrical sub-station.
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MARKET CONDITIONS
Presently, the Northeast is experiencing a slowdown in the real estate market. Properties
that previously were experiencing +10% increases in market value annually are now either
remaining stable or decreasing in value. Although interest rates are presently within the
reach of most buyers, credit restrictions have lessened the ability of many buyers to enter
the market. Both the local and national economy are coming out of the recession, with
a stable future outlook. Forecasts are for stable interest rates, continued credit
restrictions, and a slow upturn in the economy over the next year.
The market for small commercial/industrial type properties and vacant, commercially
zoned land is presently stable with a slightly greater supply than demand. In consideration
of these factors, and the limited market for commercial type properties, the estimated
marketing time for the subject is at least one year.
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DEFINITIONS OF PERTINENT TERMS
The definition of Market Value taken from the Uniform Standards of Professional
Appraisal Practice of the Appraisal Foundation, is as follows:
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 and knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby:
1. Buyer and seller are typically motivated;
2. Both parties are well informed or well advised, and acting in what they consider their own best interests;
3. A reasonable time is allowed for exposure in the open market;
4. Payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and
5. 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.
Fee Simple Interest Absolute ownership interest unencumbered by any other interest or estate; subject only to the limitations of eminent domain, escheat, police power, and taxation.
Leased Fee Estate An ownership interest held by a landlord with the right of use and occupancy conveyed by lease to others; usually consists of the right to receive rent and the right to repossession at the termination of the lease.
Leasehold Estate The right to use and occupy real property for a stated term and under certain conditions; conveyed by a lease.
17 Property Appraisal Services, Inc. Market Rent The rental income that a property would most probably command on the open market.
Value in Use The value a particular property has for a specific use.
Cash Equivalent A price expressed in terms of cash, as distinguished from a price expressed totally or partly expressed in terms of the face amounts of notes or other securities that cannot be sold at their face amounts.
SCOPE OF THE APPRAISAL
In the process of preparing this appraisal, I have performed the following functions;
Inspected the property and interviewed the owner.
Surveyed competitive industrial properties possessing commercial type exposure and interviewed leasing brokers to obtain comparable rental data.
Researched recent transactions involving similar properties and inspected such properties.
Conducted a general investigation into conditions of the Bronx industrial market and
Developed, free and clear, value indications by 2 of the 3 traditional methods (Sales Comparison and Income Approaches)for 3290 Laconia Avenue (industrial building) and developed a value indication for 1100 East Gunhill Road (vacant site) by use of the Sales Comparison Approach.
18 Property Appraisal Services. Inc. REGIONAL ANALYSIS
Overview of New York City
The property under evaluation is located in New York City. New York City is on the
Eastern Seaboard of the Continental United States. The City is part of the New York/New
Jersey Metropolitan Statistical Area (SMSA #5600) serving the New York, New Jersey and
Connecticut Tri-State area. It is a mayor port of entry into the United States.
The central waterfront location that New York City commands has been the prominent
factor in the City’s development as an influential center for trade, commerce, industry and
culture. Its role as a port of entry for immigrants throughout history is the underlying
factor in the growth and development of the many ethnic neighborhoods that make up
the fiber of New York City. The City of New York is comprised of five boroughs or
counties. These are Manhattan (New York County), Queens (Queens County), Brooklyn
(Kings County), Bronx (Bronx County) and Staten Island (Richmond County).
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Transportation
The 301.5 square miles that comprise the 5 boroughs of New York are interconnected
to each other by a sophisticated network of over 20 bridges, 4 tunnels and major
highways such as I-78,1-87 and I-95. Points more than a few hours from New York are
accessible from LaGuardia, Kennedy and Newark International Airports. Daily these three
airports collectively account for 2,000 commercial plane movements and millions of tons
of cargo transferred between major U.S. Cities and world-wide markets.
Intra-city travel is provided by one of the most sophisticated public transportation
networks in the world. Subways and buses operate 24 hours daily shuttling visitors and
a world force of approximately 3 million to and from their destinations in New York City.
Complementing the public transit system is the Long Island Railroad which terminates
underneath Madison Square Garden at Pennsylvania Station. Amtrack connects travelers
with cities throughout the U.S. and is accessed via Pennsylvania Station and Conrail.
Conrail’s main Terminus is Grand Central Station. The Port Authority of New York and
New Jersey operates the Port Authority bus terminal on 42nd Street and Eighth Avenue.
Major bus lines such as Trailways, Greyhound and commuter lines such as New Jersey
Transit are located here.
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Population
New York City is the fifth most populous city in the world and the largest city in the United
States since 1810. As of 1990, New York City’s population was 7,322,564.
Household Size
The decline in New York City’s middle age population is compensated by an increase in
the number of households and a decline in the size of the household. The increase in
number of households has been accompanied by a steady increase in the number of
housing units in New York City.
Housing
The 1980 census reports that approximately 2,783,000 housing units are within the
boundaries of the City of New York. Between 1979 and 1982, an additional 15,160
housing units were constructed, bringing the total number to 2,798,161. Seventy-three
percent of New York’s housing is rental housing; 22% is owner-occupied; 3% is available
to let or sell, 1% is rented, sold or for occasional use; and the balance is under
construction or awaiting demolition.
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The low vacancy rate in New York City and the increase in the number of households
indicate a healthy housing market. New York’s burgeoning housing market is also
evident from large percentage increases in residential construction contracts awarded.
Factors explaining the increase in conversions are new zoning regulations severely
restricting buildable height and mass in many of New York’s most desirable districts, tax
laws, most notably J-51, which encourage renovation as opposed to new construction;
aggressive landmarking of buildings and neighborhoods prohibiting demolition of existing
structures and limiting their reuse; and stringent residential tenant laws curtailing a
landlord’s ability to remove tenants from an occupied building in order to demolish it and
replace it with a more profitable structure.
The decrease in demolition of New York City residential real estate, of which 40% was
built before 1929, reflects a change in owners attitudes who are no longer abandoning
or not maintaining their housing stock and are finding it more lucrative to renovate,
maintain or re-sell their investment. Additional evidence of the resurgence of the New
York City residential housing market is a decrease in the number of properties taken by
New York City for non-payment of real estate taxes.
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Tax abatements through the 421 (a) and J-51 programs are incentives to new
construction and conversions in New York City and are an important reason for the gain
in housing. In 1982, the latest year for which statistics are available, almost 75,000 units
received J-51 benefits. Over 2,000 units received 421(a) tax benefits in 1982.
During 1985-1986, the cost of housing construction has increased significantly reflecting
local inflationary trends. Between 1985 and 1986, home-owner costs in this area rose
7.7%; national renting rose 8.5% locally and 5.7% nationally. This is an indication of
owner/renter’s willingness to spend more of their total income on housing. These
housing prices are the result of the shrinking inventory of land and the various strict
zoning ordinances that restrict building heights.
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Economic Base
The City has a highly diversified economic base, and sustains an extraordinary volume
of business activity. The largest aggregate of economic activity in the City is corporate
and ancillary services. New York City is headquarters for the greatest number of
corporations in the nation, and is the leading center for corporate services such as
commercial and investment banking, law, accounting and advertising. In fact, over 80%
of the nation’s advertising agencies with a gross billing in excess of $1 million and over
70% of the nation’s public relations firms with a net income of over $2 million, are located
in New York City. The garment industry continues to be an important economic sector
in New York City. Over 60% of the garment industry is in the New York area.
Infrastructure
The physical infrastructure of a city, its system of water supply, sewers, streets, and mass
transit, is the underlying component of its economic base, and is vital to its economic
health. New York City’s infrastructure is extensive. Apart from the reservoir and
aqueduct systems that supply water to the City from its upstate watershed, the water
distribution system consists of approximately 6,150 miles of water lines. There are
approximately 6,200 miles of streets and arterial highways, and more than 1,300 bridges
and tunnels. The mass transit system covers over 230 route-miles with 460 stations, and
is the most extensive underground system in the world.
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The City’s physical plant is aging. Rapid growth combined with an aging infrastructure
is straining the system. Major elements of the City’s capital plant need major repairs or
reconstruction to meet the increasing demands placed on it. New York is slowly
addressing its aging infrastructure. In 1982, the City developed a five-year improvement
program for all public services. The City has appropriated $589 million for the Transit
Authority to improve subway and bus service. In addition, $5,149 billion in funds from
other sources is to be used in Transit Authority improvements. These other sources
include Federal and State governments, the Port Authority, and bond issues. New
subway cars were introduced in 1984. Tracks, station guide-a-rides, and improved maps
are other indicators of the City’s efforts to upgrade its mass transit system. Funds have
also been appropriated for improvement to ferries, airports and private buses.
In 1983 awards for infrastructure improvements totaled more than $1 billion - more than
double the volume in 1982 and at least double the volume of any one year in a decade.
Over the three year period of 1984 - 1987, the City planned to upgrade the bridges in
poor condition. Street and highway reconstruction is also underway. Many traffic
congestion problems stalling daily commuters will be cured in the next 1 to 3 years.
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Summary
New York City has emerged from the 1980’s with a strong, growing economy that
appears to have suddenly halted. This stagnation can be traced to weaknesses in the
office and co-op sectors. High office vacancies and an abundance of tenant-owned
apartments on the marketplace has forced both rents and some apartment prices
downward over the past year. New development has slowed due to oversupply as well
as uncertainty in the financial markets. Commercial banks have increased lending criteria
due to non-performing assets in fear of an S&L type debacle. Many buildings that were
co-op in the past five years have not sold out and foreclosed units sold at auctions.
Even though the real estate market is suffering a temporary downturn and unemployment
is up, all indicators point to New York’s continued growth on a long-term basis. This
growth is propelled by a change in the city’s economic base from one of manufacturing
and industry to services and finance. Employees of the new basic industries of the City
are changing the demographic profile into a city that is populated by upward mobile, well
educated professionals who will continue to be avid consumers. Although housing
construction is expected to slow after the past of the 1980’s, business is expected to
expand and investment continue to flow into New York City.
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COUNTY DATA
The subject is located in the Borough of The Bronx, City and State of New York.
The Borough of the Bronx is the northernmost of the five boroughs and the only one
on the mainland, it is also a County of New York State. The Bronx is bordered on
the north by Westchester County and on the west by the Hudson River. It is
separated from Manhattan on the south and west by the Harlem River. The East River
and Long Island Sound bound the Borough on the east. The total area of the
Bronx is 44 square miles. The 1990 population of the borough is 1,203,789.
The Bronx County population is 17% of the total New York City population of 7,322,564.
It is a borough that is primarily residential in usage, with industrial usage along the
eastern waterfront, commercial usage in the central corridor and recreational uses
concentrated primarily in the northwest (Van Cortland Park)and the northeast (Pelham
Bay Park) with the renowned Bronx Zoo and Botanical Gardens occupying 27 acres
in the center of the Borough. Nearly 80% of the 100,400 parcels of land in the Bronx
are under residential use.
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The Borough is made up of distinct and identifiable neighborhoods such as
Riverdale, University Heights, Norwood, Morisania and East Tremont. Throughout the
Borough are many large housing developments such as Concourse Village, a union
sponsored complex built over the Mott Haven Railroad Yards, the publicly financed
Castle Hill and Soundview Houses and the privately sponsored Parkchester and Bronx
River Apartments. The largest single housing development is the Mitchell-Lama(State
Sponsored) Co-op City Housing Development. Apart from the large developments
mentioned above, the typical housing stock is composed primarily of four to five story
walk-ups and six story elevator buildings built mainly between the wars. The
remainder of the residential tots (49,OCX) parcels) are improved with one and two family
homes. Although The Bronx is chiefly Residential in use, there are several central
commercial corridors and three industrial parks.
Health Care Institutions are among the Borough’s largest employers. This industry
accounted for 14% of the total employment base, providing 36,550 jobs in 1990. Some
of the outstanding Bronx health care institutions include: Montefiore Medical Center -
This hospital employs over 9,000 people and is one of only 39 hospitals in the
country which receive more than one million dollars in grants from the National
Institute of Health. In Addition, Montefiore was recently chosen as one of five
hospitals in the country to test the anti-cancer agent Interleukin 2.
28 Property Appraisal Services, .Inc.
Albert Einstein College of Medicine of the Yeshiva University - Albert Einstein is
consistently rated as on of the country’s top ten medical schools. Einstein employs
over 1,000 full-time medical professionals in addition to 3,000 technical personnel. The
major area hospitals in the Bronx are as follows: Bronx-Lebanon and Lincoln Hospitals,
serving the South Bronx. Einstein and Bronx Municipal, serving the East Bronx; St.
Barnabas and Union Hospitals serving the Central Bronx and Montefiore, North Central
and Our Lady of Mercy Hospitals serving the North Bronx.
The Bronx is called the Borough of Universities. Among its mayor institutions are
the Herbert H. Lehman College of the City University of New York, Manhattan
College, Fordham University, one of the oldest Roman Catholic Universities, the
University Heights Center of New York University which houses the hall of Fame for
Great Americans and the State University Maritime College at Throgs Neck.
LOCAL AREA DESCRIPTION
The subject is located within Community District No. 12, in the north central section of the
Bronx. This district is bounded on the north by Mount Vernon and Pelham Manor
(Westchester County), on the east by the New England Thruway, and on the west by
Jerome Avenue and Van Cortland Park East. East Gunhill and Adee Avenue form the
district’s southern boundary.
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Property Appraisal Services. Inc.
Land Use in District No. 12 is as follows:
Residential______Lote______Percentage
1 - 2 Family 14,186 72.5 Condominiums 0 0.0 Old Law Tenements 4 0.0 Walkups 2,601 13.3 Elevator Apartments 102 .5 Industrial 180 .9 Commercial 880 4.5 Vacant 1,289 6.6 Other 318 1.6 Total 19,560 100.0
Total Land Area 3596.3 acres 5.6 square miles
The total population in the district as of 1991 was 129,620, with 17.6% of the population
requiring some form of income support. District 12 encompasses the following
neighborhoods in the northeastern portion of the Bronx: Baychester, Edenwald, Fishbay,
Olinville, Wakefield, Williamsbridge and Woodlawn Heights.
The subject sites are specifically located along District 12’s southern border, in the
Williamsbridge neighborhood. 3290 Laconia Avenue possesses 125’ of frontage along
Laconia Avenue, between East Gunhill Road and Boston Road. The 1100 East Gunhill
Road site is located at the intersection of East Gunhill Road and Yates Avenue.
30 Property Appraisal Services, Inc. The surrounding neighborhood is predominantly residential in character; housing stock
in the area generally consists of private homes and walk-up multi-family apartment
buildings, with street level stores along the main avenues. Residential rents are limited
by rent control and rent stabilization regulations. Renovated apartments are permitted to
be leased at market levels, often renting for double or triple their previously regulated rent.
Property values have escalated within the past decade, but have experienced a downward
trend recently, consistent with the overall trend in New York’s realty market.
The subject neighborhood is served by commercial establishments and various other
community services along East Gun Hill Road, Boston Road and White Plains Road. East
Gun Hill Road is a heavily concentrated retail area extending across the Bronx from
Jerome Avenue to the New England Thruway.
Typical retail outlets found along East Gunhill Road consist of grocery stores,fast food
restaurants, medical offices, and hardware stores; an Exxon service station is situated
opposite the 1100 East Gunhill Road site, at the corner of East Gun Hill Road and Boston
Road. Improvements along Laconia Avenue include a mix of one-story garage and
industrial buildings.
31 Property Appraisal Services, Inc.
The subject area is well served by public transportation, with an IRT No. 5 train station
located at White Plains Road, affording rapid access to Manhattan’s business districts,
and with bus service available on all wider local streets and Avenues. For vehicular traffic,
the subject area possesses easy access to the Mosholu and Bronx River Parkways. The
Metro North Harlem Line commuter train services this area, with a station at East Gun Hill
Road and Webster Avenue.
The wider subject areas possesses a richness of parks and cultural resources. The
Bronx Zoo and Botanical Garden, Van Cortland Park, and the Mosholu Golf Course are
within minutes of the subject neighborhood. Notable local educational institutions include
the Bronx High School of Science, Lehman College C.U.N.Y., and Fordham University.
The nearby Montefiore-North Central Bronx Hospital complex, at Rochambeau Avenue
and East Gun Hill Road, is the largest single employer in the Bronx. With over 8,000
employees and an annual operating budget of over $300 million, it is one of the largest
medical centers in the United States. This hospital provides in-patient and clinic care to
over 300,000 people annually.
In sum, the subject is located within an industrial/commercial subdistrict of a stable
residential neighborhood. We expect the value trend for industrial and commercial
properties in this area to be stable for the foreseeable future.
32 Property Appraisal Services, Inc. SITE DESCRIPTION:
LOCATION:
3290 Laconia Avenue - Mid block site located on the east side of Laconia Avenue, 164’ south of East Gunhill Road and 283’ north of Boston Road. The property is presently identified on the Tax Records of Bronx County as Section 16, Block 4614 Lot 30.
1100 East Gunhill Road - Corner site located at the south west corner of the East Gunhill Road and Yates Avenue intersection. The property is presently identified on the Tax Records of Bronx County as Section 16, Block 4614, Lots p/o 30 and p/o 38.
Laconia Avenue Easement - This area fronts on the east side of Laconia Avenue, along the northern border of Lot 30, 139’ south of East Gunhill Road. The easement area is presently part of lot 30.
SHAPE & AREA
3290 Laconia Avenue - This parcel is regular in configuration, containing 12,500 square feet (125’ x 100’) in total, according to lot dimensions shown on New York City’s tax maps.
1100 East Gunhill Road - This parcel is irregular in configuration containing 26,750 square feet (235’ x 107’ irregular) in total, according to lot dimensions shown on New York City’s tax maps.
Laconia Avenue Easement - This area is rectangular in configuration, containing 2,500 S.F. (25’ x 100’).
TOPOGRAPHY & DRAINAGE
The subject sites are level at street grade along Laconia Avenue, East Gunhill Road and
Yates Avenue, however an interior section of the 1100 East Gunhill Road site contains a
steep slope of approximately 4 feet, 100’ west of the Yates Avenue frontage. Adequate
drainage appears to be provided by surface and subsurface public street improvements
and natural runoff.
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SOILS & GEOLOGY
No soil report dealing with the subject site has been examined by the Appraiser. This
valuation assumes soil conditions are adequate to support the existing improvement
constructed thereon. Louis M. Carnevale, AICP, PP, Senior Real Estate Representative
for Consolidated Edison Company of New York Inc., has reported that the subject sites
are free of hazardous material contamination. This report has been prepared based on
the assumption that the subject sites are free of hazardous contaminants.
UTILITIES
All of the usual and necessary utilities and services are provided to the site including gas,
electric, telephone, and water. This district is served by storm and sanitary sewers.
STREETS & ACCESS
3290 Laconia Avenue : has 125’ of frontage on the east side of Laconia Avenue, between
Boston Road and East Gunhill Road. This section of Laconia Avenue is a 100’ wide,
lightly travelled commercial street.
1100 East Gunhill Road: has 107’ and 235’ of frontage on East Gunhill Road and Yates
Avenues, respectively. East Gunhill Road is a 100’ wide, heavily travelled commercial
street extending across the Bronx from Jerome Avenue to the New England Thruway.
Yates Avenue is a 60’ wide, lightly travelled street. Each street is asphalt paved with
concrete curbs and sidewalks, lighting is provided by the City of New York. Property Appraisal Services, Inc
EASEMENTS & ENCROACHMENTS
Typical utility and public service easements common to most real estate exist. An
easement is proposed for a 2,500 square foot (25’ x 100’) area fronting on Laconia
Avenue, along the northern border of 3290 Laconia Avenue 139’ south of East Gunhill
Road. No other apparent adverse encroachments or other adverse site conditions were
noted.
POTENTIAL HAZARDS
No nuisances or hazards such as chemicals, asbestos, waste disposal, noise, or odor,
were uncovered which would have a negative impact on the subject (see comment in
Soil & Geology section). The site lies within a FEMA Rood Insurance Rate Map Panel
360497 0007B, designated Zone C indicating areas of minimal flood hazard.
ENVIRONMENTAL CONDITIONS
There were no apparent adverse environmental conditions nor hazards observed or
perceived at the time of inspection. The appraiser, however, is not qualified to detect
such conditions. The client is suggested to retain an expert in this field, if desired.
Consolidated Edison of New York Inc., (Louis Carnevale), reports that the sites does not
contain chemical or environmental hazards of any type.
SPECIAL VALUE
The subject has no significant natural, cultural, recreational, or scientific value.
35 Property Appraisal Services, Inc.
ZONING:
"Zoning shapes the city; through zoning, a city controls building size, population
density, and the way land is used. Along with the city’s power to budget, tax,
and condemn property, it is a key tool for carrying out planning policy". The current NYC
zoning resolution was enacted and took effect in 1961. This zoning resolution
coordinated use and bulk regulations, and incorporated parking requirements.
The City is divided into three separate zoning districts: Residential (R), Commercial (C),
and Manufacturing (M). These three basic categories are further subdivided
into low, moderate, and high density districts.
Development within these districts is regulated by use, bulk, and parking regulations.
Each zoning district regulates permitted uses, the land/building size ratio, the
required open space, required setbacks, and the amount of required parking.
The uses permitted in each district are found within one or more of the eighteen
Use Groups. The uses listed in each group have common functional or
nuisance characteristics, the higher the use group, the greater the nuisance.
36 Property Appraisal Services, Inc
Bulk (building size) is regulated by the use of Floor Area Ratios (FAR) and Open
Space Ratios (OSR). These control the physical volume of buildings, as well as the
relationship of building size to land area. The FAR expresses the relationship of the
amount of useable floor area to the amount of lot area. Therefore a 10,000 square
foot lot with a FAR of 10 could contain 100,000 square feet of floor area. This
maximum floor area is further reduced by applying an Open Space Ratio. The OSR,
found in residential districts, requires that a minimum amount of open lot area be
provided for each square foot of floor area. Expressed as a percent, an OSR of 20
would mandate that 20,000 square feet of open land area be provided for a 100,000
square foot building.
Other standards reducing building size include maximum density requirements (units
per acre), front, side and rear yard requirements, maximum building height
regulations, and parking requirements.
Manufacturing uses and certain intense commercial uses are subject to
performance standards which limit noise, air pollution, and other nuisance creating
activity.
37 Property Appraisal Services, Inc.
Regulations are not binding on properties constructed prior to the 1961
resolution. Properties that have been grand-fathered are considered legal,
pre-existing, non-conforming uses. They may not be altered other than to
conform to zoning. If damaged over 50%, they may not be reconstructed in their
current form. Many of the properties in the City do not conform to zoning, mainly
due to the lack of off-street parking. Variances and special permits may be
granted on a property by property basis.
NYC Zoning Handbook, NYC Department of City Planning
38
Property Appraisal Services, Inc
C8-1 General Service District
The subject is located in a C8-1 General Service District. The Zoning Resolution defines
the C8-1 district as follows: "These districts are designed to provide for necessary
services for a wider area than is served by the Local Service Districts. Since these service
establishments often involve objectionable influences, such as noise from heavy service
operations and large volume of truck traffic, they are incompatible with both residential
and retail uses. New residential development is excluded from these districts".
The 3290 Laconia Avenue site is developed with a 9,555 square foot industrial building.
A maximum commercial FAR of 1.0 is allowed in a C8-1 district. Based on the
requirements of a C8-1 district, the subject improvement and use appears to be a legal
and conforming use.
The 1100 East Gunhill Road site is presently vacant, and available for development. The
FAR of 1.0 allows development of the site with an automotive or other heavy commercial
service improvement, less parking and setback requirements which vary with use and
district.
39 Property Appraisal Services, Inc
TAX ASSESSMENT:
The subject property, is currently classified by the City of New York as an electric utility
(U2); according to public records this property is presently exempt from Real Estate Tax
liability. An estimate of potential real estate tax liability for the proposed sites have been
estimated using actual taxes paid by the improved and unimproved sale comparables.
BOROUGH OF BRONX. BLOCK 4614. LOT 30 AND P/O 38
Improved Industrial Comparables Size/SF Assessment Tax Rate Taxes Taxes/SF
1681 Bronxdale 8,688 $168,500 .10724 $18,070 $2.08 1712 Jerome 10,000 $141,100 .10724 $15,132 $1.51 1672 E. 233rd. 7,000 $141,800 .10724 $15,207 $2.17 1617 Stillwell 4,700 $ 49,600 .10724 $ 5,319 $1.13 1710 Bronxdale 6,100 $60,000 .10724 $6,434 $1.05
Vacant Land Comparables Size/SF Assessment Tax Rate Taxes Taxes/SF
3290 Webster 9,600 $47,700 .10724 $5,115 $.53 3568 Boston Road 9,925 $31,370 .10724 $3,364 $.34 602 Fordham Road 5,400 $46,820 .10724 $5,021 $.92 232 Bathgate 5,005 $ 6,900 .10724 $ 740 $.14 1535 Jerome 14,780 $40,510 .10724 $4,344 $.29 1855 Webster 13,200 $26,000 .10724 $2,788 $.21
40 Property Appraisal Services, Inc.
Real Estate Tax Liability for the industrial building comparables range from $1.05 to $2.17
per square foot with an average of $1.58 per square foot and real estate tax liability for
the vacant land comparable ranged from $.14 to .$92 per square foot with an average of
$.49 per square foot. Based on the comparables examined, we estimate a real estate tax
liability for 3290 Laconia Avenue of $2.00 per square foot and $.35 per square foot for
1100 East Gunhill Road.
TAX RATE:
The tax rate for Class IV (commercial) property for 1993-94 tax year is $10,724 per $100
of assessment. Real estate tax is based on the lower of the transitional and actual
assessments; taxes for the current fiscal year are estimated to be as follows:
3290 Laconia Avenue: 8,255 Sq. Ft.' x $2.00 per Sq. Ft. = $16,510.00
1100 East Gunhill Road: 26,750 Sq. Ft. x .35 per Sq. Ft. = $ 9,363.00
TOTAL $25,875.00
* Represents 6,955 sq.ft. of ground floor space plus mezzanine area weighted by 50%,
2,600 x .5 = 1300; 1,300 plus 6,955 = 8,255 sq ft of total weighted area.
41 Property Appraisal Services. Inc.
IMPROVEMENT DESCRIPTION: (3290 LACONIA AVENUE)
The subject parcel is improved with a 9,555 square foot one story and mezzanine, (6,955
sq.ft. of ground floor space and 2,600 sq.ft. of mezzanine area), concrete and steel,
industrial building constructed circa 1930. The improvements has been used as a Con
Edison electrical sub-station throughout the past three decades and the windows along
the Laconia Street frontage were sealed. The interior consists of a 20 foot high enclosure
used to house electrical switching equipment There are four entrances, three on the side
and one in the rear with no access from Laconia Avenue.
The structure has masonry bearing walls, a sealed poured concrete floor and steel
concrete enclosed roof supports. If the existing obsolete machinery were to be removed,
the space would be commercial in nature and suitable for automotive, manufacturing or
distributive uses.
The first level consists of a semi-modern office area, locker room, lavatories and boiler
room, below the mezzanine and a large open area housing the switching machinery.
The mezzanine which contains a control room with windows overlooking the work area
was approximately 2,600 square feet and includes a lavatory and locker room.
42 Property Appraisal Services, Inc
The following description of the construction of the subject based on a physical inspection
as no engineering report was available:
Construction Features:
Foundation: Poured concrete slab and footings.
Frame: Masonry load bearing walls, with steel beams supporting roof span.
Floors: Sealed reinforced concrete.
Exterior Wails: Beige common brick with industrial type reinforced glass windows (one/over one) on the mezzanine level and north facade. The windows have steel frames.
Interior Walls: Glazed brick and concrete block in work area and painted brick in office and control room.
Interior Floors: Sealed concrete in work area and linoleum covered concrete in mezzanine.
Restrooms: Employee restrooms on both levels have stalls but missing fixtures. Plumbing appears inoperable.
Lighting: Ceiling suspended fluorescent fixtures throughout.
HVAC: Heat for the office and mezzanine area is provided by an oil fired boiler which appears inoperable. There are no space heaters or air conditioning units.
Roof: Black tar composition roof with concrete parapet walk. Roof not inspected.
43 Property Appraisal Services, Inc. Site Improvement: 3290 Laconia: (Industrial Blda.) There is a 10 and 15 foot chain link fence surrounding the property. The side yards provide automobile access and will sustain minimum parking when concrete fixtures are removed.
1100 E. Gunhill Road: This corner site consists of a trapezoidal shaped lot bordered on the north by East Gunhill road and on the east by Yates Avenue. The Gunhill frontage and part of the Yates frontage is improved with a wooden fence that is in disrepair.
The land is debris laden and there is a centrally located metal structure - formerly used for automotive purposes. This structure is in disrepair and should be razed. This area is improved with gravel and covering; and several partially dismantled concrete structures used to house machinery. For purposes of this appraisal this equipment will be removed and the lot pending level.
Condition: The 3290 Laconia improvement appears structurally sound with the mechanicals non-functional. The site improvements are in poor condition, and have outlived their usefulness. There is some space for on-site parking at 3290 Laconia Avenue.
Size: First Floor: 6,955 Sq. Ft. Mezzanine: 2.600 Sq. Ft. Total 9,555 Sq. Ft.
Total First Level 6,955 Sq. Ft.
1100 East Gunhill Road: Vacant Site The 1100 East Gunhill Road site is strewn with debris and the concrete pads will be costly to remove. 1100 East Gunhill Road is to be delivered vacant, and has frontage along the south side of East Gunhill Road and Yates Avenue. A section of the 1100 East Gun Hill Road site contains a steep slope of approximately 4 feet, 100’ west of Yates Avenue.
44 Property Appraisal Services, Inc
HIGHEST AND BEST USE: The Appraisal Institute defines Highest and Best Use as follows:
1 hat reasonable and probable use that will support the highest present value, as defined, as of the effective date of the appraisal. Alternatively, that use, from among reasonably probable and legal alternative uses, found to be physically possible, appropriately supported, financially feasible, and which results in highest land value/
For a use to be considered the Highest and Best Use, it must meet the test of being
physically possible, legally permitted, economically feasible and that single use which
provides the highest net return. The Highest and Best use is analyzed in two ways: land
as though vacant and ready for development and the property as it is currently improved.
The Highest and Best Use of the site, as if vacant, is influenced by public and private
economic forces in the market in proximity to its location. In the following analysis, each
of the criteria is applies to the subject property under both assumptions:
IF VACANT
Possible Use
The first constraint imposed on the possible use of the site is determined by its physical
characteristics. 3290 Laconia Avenue contains 12,500 SF and 1100 East Gunhill Road
contains 26,750 SF. Each site is level at curb grade; 3290 Laconia Avenue possesses
125' of frontage on Laconia Avenue and 1100 East Gunhill Road possesses 107’ of
frontage on East Gunhill Road and 235’ of frontage on Yates Avenue. Almost any legal
and economically balanced use could apply.
45 Property Appraisal Services, Inc.
Permissible Use
The subject parcels lie within a C8-1 (automotive type commercial) district. The Zoning
Resolution defines the C8-1 district as follows:
These districts are designed to provide for necessary sen/ices for a wider area than is served by the Local Service Districts. Since these sen/ice establishments often involve objectionable influences, such as noise from heavy service operations and large volume of truck traffic, they are incompatible with both residential and retail uses. New residential development is excluded from these districts*.
Economic Feasibility
Any legal and permissible use which provides an adequate financial return to the land
would be considered feasible. The feasibility of developing vacant land is a function of
current and future supply and demand conditions for new development. As mentioned
in our neighborhood and regional analysis, New York City is currently in the midst of a
recession that has adversely affected the ability to generate financing for all but the most
secure proposals. Inspection of the wider subject area discloses limited new construction
of one story commercial/industrial improvements.
Based on area demand, surrounding development, zoning constraints, and the specific
characteristics of the proposed subject sites, it is our opinion that the most likely use
would be to develop 3290 Laconia Avenue with a one story automotive/commercial
building and to develop 1100 East Gunhill Road with fast food outlet or automotive service
station, possibly combined with a convenience store.
46 Property Appraisal Services, Inc. AS IMPROVED
When analyzing 3290 Laconia Avenue’s optimal use as currently improved, consideration
is given as to whether the improvement should remain as is, be remodeled, expanded or
demolished. Zoning for 3290 Laconia Avenue permits a FAR of 1.0, allowing full
development of the site, less parking and set-back requirements. It is dear that the
existing improvement contributes value to the site; however, in order to be competitive in
the local realty market the building will require installation on an overhead loading door
along its Laconia Avenue frontage plus demolition and removal of interior concrete walls
and electrical switching equipment.
I have given careful consideration to the various factors affecting the Highest and Best
Use of 3290 Laconia Avenue, including its location, neighboring property influences,
accessibility to public transportation and roadways, zoning, market demand factors, and
the size, shape and utility of the property. Taken into consideration as an improved
property (pending renovation), the existing improvement contributes to the overall
property value, and offers utility in demand in this area.
Therefore, the existing improvement as a one-story industrial building provides, at this
time, the highest return to the land.
47 Property Appraisal Services, Inc. THE APPRAISAL PROCESS
The generally accepted method of obtaining the Market Value of a parcel of property is
by the use of the three approaches to value. These approaches are the Sales
Comparison Approach, Income Approach and the Cost Approach. The value indicated
by each approach is carefully considered and employed in attaining the estimate of value
for the subject property.
In the Sales Comparison approach, the subject property is compared to similar properties
that have been sold recently or for which listing prices or offering figures are known.
Data for generally comparable properties are used, and comparisons are made to
demonstrate a probable price at which the subject property would sell if offered on the
market.
In the Income Capitalization approach, an estimate of the property’s value based upon
an analysis of the present worth of the future potential benefits of the property, measured
by the net income which is then capitalized at a rate to reflect its current value from a
prudent investment standpoint.
In the Cost approach, an estimated reproduction or replacement cost of the building and
land improvements as of the date of the appraisal is developed, together with an estimate
of the losses in value that have taken place due to wear and tear, design, or
neighborhood influences. To the depreciated cost estimate is added the estimated value
of the land. The total represents the value indicated by the Cost Approach.
48 Property Appraisal Services, Inc.
LAND VALUE BY DIRECT SALES COMPARISON
The market value of the subject site is best indicated by an analysis of recent transactions
of similarly zoned land in the subject area. A search of the public records and a field
investigation were undertaken throughout the Borough of the Bronx to disclose recent
transfers of C8 zoned land comparable to the subject. Summaries of the comparable
sales are presented on the following pages, with analysis by the price per square foot
method of comparison.
49 Property Appraisal Services, Inc.
LAND SALE COMPARABLE NO. 1
LOCATION: 3290 Webster Ave (Between East Gunhill and 209th Street)
GRANTOR: James P Needham
GRANTEE: Atlas Auto Spring Incorporated
SALE DATE: May 11, 1993
SALE PRICE: $200,000
BLOCK/LOT: 3357/111
DIMENSIONS/AREA: 9,600 S.F; 150’ x 64’
ZONING: C8-2
SALE PRICE/SF: $20.83
COMMENTS: Mid block site on a moderately travelled section of Webster Avenue. A small garage structure (1,107 sq. ft.) is located on the site. Grantee reports that the garage was in extremely poor condition at time of sale, requiring a $30,000 renovation, $27.10 per square foot.
50 Property Appraisal Services, Ina
JS U usa
LAND SALE COMPARABLE NO. 2
LOCATION: 3568 Boston Road, Bronx (at corner of Tiemann Avenue)
GRANTOR: Ellen Gubitosi (ex)
GRANTEE: TJC Operations
SALE DATE: March 30, 1993
SALE PRICE: $175,000
BLOCK/LOT: 4729/33,83,84
DIMENSIONS/AREA: 9,925 S.F.; 49* x 178’ irregular
ZONING: C8-1
SALE PRICE/SF: $17.63
COMMENTS: Three contiguous corner lots, possessing good access, and exposure. Lot 33 lies wholly within C8-1 zoning, 85% of Lot 84 lies within C8-1 zoning and Lot 83 lies within and R6 zone.
51 Property Appraisal Services. Inc.
LAND SALE COMPARABLE NO. 3
LOCATION: 602-604 East Fordham Road, Bronx (Between Arthur and
Hughes Avenues)
GRANTOR: Dursi Associates
GRANTEE: Teddy Zarembski
SALE DATE: September 30, 1992
SALE PRICE: $155,000
BLOCK/LOT: 3078/14
O.R. BOOK/PAGE: 1126/1521
DIMENSIONS/AREA: 5,400 S.F.; 50’ x 108’
ZONING: C8-1
SALE PRICE/SF: $28.70
COMMENTS: Mid-block site possessing excellent access and exposure, located at Fordham Road’s eastern border.
52 Property Appraisal Services, Inc.
LAND SALE COMPARABLE NO. 4
LOCATION: 1533 Jerome Avenue, Bronx (Corner of Globe Place)
GRANTOR: Joseph Arditte
GRANTEE: Park Avenue Holding Corporation
SALE DATE: May 27, 1992
SALE PRICE: $200,000
BLOCK/LOT: 2859/58,61,65
DIMENSIONS/AREA: 14,780 S.F.; 140’ x 100’
ZONING: C8-3
SALE PRICE/SF: $13.53
COMMENTS: Corner parcel at intersection of Jerome Avenue and Goble Place, a heavily trafficked location in the South Bronx.
53 Property Appraisal Services, Inc.
LAND SALE COMPARABLE NO. 5
LOCATION: Bronxwood Avenue (between Arnow Ave. and Boston Road)
GRANTOR: G & L Homes
GRANTEE: Domenico Broccoli
SALE DATE: February 3, 1992
SALE PRICE: $130,000
BLOCK/LOT: 4515/44,47
DIMENSIONS/AREA: 12,500 S.F. ; 125’ x 100’
ZONING: C8-1
SALE PRICE/SF: $10.40
COMMENTS: Mid-block site possessing 125’ of frontage along Bronxwood Avenue, a moderately travelled local artery.
54 Property Appraisal Services, Inc
LAND SALE COMPARABLE NO. 6
LOCATION: 2321 Bathgate Avenue, Bronx (Corner of East 184th Street)
GRANTOR: Frank Carlucci
GRANTEE: Mella Rento
SALE DATE: August 23, 1991
SALE PRICE: $90,000
BLOCK/LOT: 3053/51
O.R. BOOK/PAGE: 1059/1524
DIMENSIONS/AREA: 5,005 S.F.; 55’ x91’
ZONING: C8-3
SALE PRICE/SF: $17.98
COMMENTS: Comer site located on a lightly travelled side street, possessing moderate commercial potential.
55 Appraisal Appraisal evcs Inc.Services. Property Property
COMPARABLE SALES GRID
Sale Sales Land Time Location Size Total Adjusted # Address Date Price Size SF $/SF Land Adj. Ad]. Adi. Adj. $/SF Land ...... 1 3290 Webster Ave 5/93 $200,000 9,600 $20.83 0% 5% 7% 12% $23.33 2 3568 Boston Road 3/93 $175,000 9,925 $17.63 0% -5 % 7% 2% $17.98 3 602 Fordham Rd 9/92 $155,000 5,400 $28.70 0% -25% 10% -15% $24.40 4 1533 Jerome Ave 5/92 $200,000 14,780 $13.53 0% 5% 5% 10% $14.88 5 2 72 5 -3 9 Bronxwood 2/92 $130,000 12,500 $10.40 0% 10% 5% 15% $11,96 6 2321 Bathgate Ave 8/91 $90,000 5,005 $17.98 -2 % 10% 10% 18% $21.22 __ __ ^ - . Avg. $18.18 $18.96 Min. $10.40 $11.96 Max. $28.70 $24.40 KH Mato 0»fN «. to*. econrraom 1*7*
Comparable Sales Property Appraisal Services, Ina
EXPLANATION OF ADJUSTMENTS
Sales of six C8 (commercially) zoned sites in the Bronx were identified, and analyzed on
the basis of price per square foot. Price per square foot of buildable area (FAR) was not
correlated since in our observation the predominant type of improvement is a one-story
building regardless of allowable FAR.
Tim e - Values of vacant commercially zoned sites in the Bronx have decreased since
1987; but have remained stable since January 1992. Adjustment for time was applied at
-6% per year (-.5% per month) until January 1992, to reflect the influence of a declining
market. Only Comparable # 6 required a time adjustment.
Size - The influence of size was adjusted for based on utility for commercial development.
Due to economies of scale, utility and the amenity created by a larger project, the smaller
sales were considered disadvantaged in comparison with larger buildable sites, and were
adjusted upward.
57 Property Appraisal Services. Inc.
Location - The subject (1100 East Gunhill Road) fronts on the popular and intensely
developed East Gunhill Road, considered superior to comparable No.’s 1, 4, 5 and 6 in
location based on our observation of neighborhood characteristics and market activity.
Sale No. 2 and 3 required negative adjustment for location reflecting their superior
commercial exposure on Boston Road and Fordham Road. Adjustment was applied for
location based on our judgement, after inspection of each comparable and its
surrounding area.
Market Data Conciusion
The sales demonstrate a range, after adjustment, of from $11.96 to $24.40 per square
foot, with an average of $18.96 per square foot. Each of the comparables provides a
good measure of value. In light of the range of indication presented, 1100 East GunHill
Road’s land value is estimated to be $19.00 per square foot, or $508,000 ($19 per sq. ft.
x 26,750 S.F.); we have subtracted $25,000 from the land value conclusion ($508,250 -
$25,000 = $483,250 rounded to 485,000) to account for the cost of removing the cement
pads and remaining debris.
LAND VALUE BY DIRECT COMPARISON
Four Hundred Eight Five Thousand Dollars
($485,000)
58 Property Appraisal Services, Inc. SALES COMPARISON VALUATION
The Sales Comparison approach involves the gathering and analysis of comparable sales
data. Each of these sales are compared to the subject property and adjustments are
made to reflect dissimilar characteristics. The amount of adjustment is determined by the
contribution to value made by the presence or absence of each item considered.
An investigation was undertaken for the purpose of disclosing sales of industrial buildings
possessing commercial exposure which have occurred in the Bronx over the past several
years. The comparables provide a firm basis for a value estimate.
The unit of comparison selected was price per square foot. Adjustments have been made
for differences between the subject and comparables.
59 Property Appraisal Services, Inc
Address: 1681 Bronxdale Avenue, Bronx
Location: Comer location on a heavily trafficked street with commercial exposure.
Improvements: One story garage building containing 9,964 S.F., reported to be in poor condition when purchased; is presently undergoing renovation.
Block/Lot: 4042/25
Lot Size: 9,964 S.F.; 111'x 90’ .
Building Size: 8,688 S.F.
Zoning: M1-1
Seller: BMRR Realty Company
Buyer: Anthony Coscia
Sales Price: $445,000
Sale Date: October 8, 1992
Assessment: $168,550
Indicated Price/S.F. $51.00
60 Property Appraisal Services, Inc.
SALE # 2
Address: 2475-81 Westchester Avenue, Bronx
Location: Corner site at St. Peter’s Avenue intersection.
Improvements: One story commercial building containing 8,170 S.F., located on an active commercial artery.
Block/Lot: 3974/43
Lot Size: 11,590 S.F.; 95’ x 122’
Building Size: 8,170 S.F.; 86’ x 95’
Zoning: C2-2
Seller: Consoliated Edison
Buyer: 437 East 165 Street Realty
Sales Price: $215,000
Sale Date: September 30, 1992
Assessment: N/A (Pending re-assessment)
Indicated Price/S.F. $26.32
61 Property Appraisal Services, Inc.
SALE # 3
Address: 1712-18 Jerome Avenue, Bronx
Location: Mid-block site on Jerome Avenue, an active commercial street, improved with automotive business of all types.
Improvements: One story garage building containing 10,000 square feet.
Block/Lot: 2849/5
Lot Size: 10.000 S.F.; 100’ x 100’
Building Size: 10.000 S.F.; 100’ x 100’
Zoning: C8-3
Seller: Lucille Nitzberg
Buyer: Eddie Badia, D /B /A Automotive
Sales Price: $387,500
Sale Date: July 10, 1992
Assessment: $141,100
Indicated Price/S.F. $38.75
62 Property Appraisal Services, Inc.
SALE # 4
Address: 1672-76 East 233rd Street, Bronx
Location: Mid-block site on East 233rd Street, an artery in the north east Bronx.
Improvements: One story industrial building containing 7,
Block/Lot: 4953/47
Lot Size: 7,500 S.F.; 75’ x 100’
Building Size: 7,000 S.F.; 70’ x 100’
Zoning: M3-1
Seller: Mike Ell Realty Corporation
Buyer: Joseph Pietrocola
Sales Price: $330,000
Sale Date: June 16, 1992
Assessment: $141,800
Indicated Price/S.F. $47.14
63 Property Appraisal Services. Inc.
Address: 1617 Stillwell Avenue, Bronx
Location: Comer site on a moderately travelled street possessing commercial exposure.
Improvements: One story industrial building containing 4,700 square feet.
Block/Lot: 3556/01
Lot Size: 4.700 S.F.; 27’ x 93’ IRR.
Building Size: 4.700 S.F.; 27’ x 93’ IRR.
Zoning: M1-1
Seller: Airway Transit Mix Company
Buyer: Very Best IRTJ Corporation
Sales Price: $275,000
Sale Date: March 5, 1992
Assessment: $49,600
Indicated Price/S.F. $58.51
64 I
Property Appraisal Services, Inc.
Address: 1710 Bronxdale Avenue
Location: Mid-block site on a heavily travelled street with commercial potential.
Improvements: One story plus mezzanine industrial building containing 5,500 square feet of ground floor space plus a 600 SF mezzanine area, 6,100 SF in total. The building has undergone renovation.
Block/Lot: 4094/29
Lot Size: 5,500 S.F.; 50’ x 110’
Building Size: 6,100 S.F.; 50’ x 110’
Zoning: M3-1
Seller: Ignazeo Battazela
Buyer: Tito Angovino
Sales Price: $250,000
Sale Date: March 28, 1991
Assessment: $60,000
Indicated Price/S.F. $40.98 evcs Inc Services, Appraisal Property Property
COM PARABLE SALES GRID
Sale Sales BIdg Time Location Size Cond. Total Adjusted # Address Date Price Size SF $/SF BIdg Adj. Adj. Ad). Adj. Adj, $/SF
- ' , ...... : 1 1681 Bronxdale Ave 10/92 $445,000 8,688 $51.22 0% -1 0 % 0% -5 % -1 5 % $43.54 2 2475 Westchester Ave 9/92 $215,000 8,170 $26.32 0% 10% 0% 0% 10% $28.95 3 1712-18 Jerome Ave 7/92 $387,500 10,000 $38.75 0% 5% 0% -2 3 % -1 8 % $31.78 4 1672-76 East 233 St 6/92 $330,000 7,000 $47.14 0% 5% —5% -2 7 % -2 7 % $34.41 5 1617 Stillwell Ave 3/92 $275,000 4,700 $58.51 0% 5% -1 0 % -33% -38% $36.28 6 1710 Bronxdale Ave 3/91 $250,000 6,100 $40.98 -4% -10% -5 % -5 % -2 4 % $31.15 ...... — ...... : ' ; ...... > Avg. $43.82 $34.35 Min. $26.32 $28.95 Max. $58.51 $43.54 sa|e§ agqejcdmoj
m i iH0WjU00O-»i -wwino m Property Appraisal Services, Inc
MARKET DATA CONCLUSION
Six arms-length sales of industrial properties in the Bronx were identified, and analyzed
on the basis of price per square foot. The comparables involve properties similar to the
subject, and provide a meaningful value range. Adjustments were applied for the
following influences:
Time
The comparable sales occurred between March, 1992 and Dec. 1992. Industrial property
values throughout the Bronx have increased in the past decade, but in the opinion of
most observers have lost values in the period between 1987 and 1991; values have
remained stable since January 1992. Adjustment for time was applied at -6% per year
(-.5% per month) until January 1992, to reflect the influence of a declining market.
Comparable # 6 required a negative adjustment for time.
Size
The subject (3290 Laconia Avenue) contains 9,555 square feet of roughly finished ground
floor industrial/garage space (includes 2,600 sq. ft. of mezzanine area). Relatively small
size is typically a positive value influence; adjustment for size was based on the commonly
observed phenomenon that smaller industrial/garage improvements typically sell for more,
per square foot, than otherwise similar larger structures, and vice versa.
67 Property Appraisal Services, Inc.
Location
The subject (3290 Laconia Avenue) fronts on Laconia Avenue between East Gunhill Road
and Boston Road, two of the areas major commercial arteries. Comparable No.’s 1 and
6 are considered superior to the subject in location, being located on Bronxdale Avenue,
a heavily travelled street with enhanced commercial potential. Comparable No.’s 2, 3, 4
and 5 are considered inferior in location, being located on active industrially and
commercially zoned streets, but possessing inferior commercial potential in comparison
to the subject. Adjustments were applied for the influence of location based on our
judgement.
Condition
The subject is in poor condition at present, with roughly finished industrial/garage space,
inadequate loading access, but offering good ceiling height. Renovation of the subject
would be required, including installation of a new overhead loading door along the
Laconia Avenue frontage and removal of interior concrete walls and electrical switching
equipment. We estimate that an expenditure of approximately $90,000 ($9.42/S.F.;
$90,000 / 9,555 SF) would be required. The adjustment for condition/utility was applied
to Comparables No. 3, 4, and 5 reflects the estimated $90,000 renovation cost as a
percentage of each sale’s total saJe price (ex. Sale No. 3: 90,000/387,500 = -23% adj.).
Sale No.’s 1,2 and 6 were reported to be in poor condition at the time of sale, thus
requiring smaller condition adjustments. Adjustments were applied to the comparables
based on our on-site observation of each.
68 Property Appraisal Services, Inc. Summary
The sales demonstrate a range, after adjustment, from $28.95 to $43.54 per square foot
with an average of $34.35 per square foot. The subject is a well-located industrial
building, that after renovation will offer good utility to a wide array of potential users;
comparable No.’s 2, 5 and 6 are most similar in terms of location and overall utility. We
have weighted the 2,600 sq.ft mezzanine area by 50% (2,600 x.5 =1,300), and added
1,300 sq. ft. to the subject’s ground floor area (6,955 + 1,300 =8,255), producing a
weighted total area of 8,255 square feet. In light of the range of indications presented,
3290 Laconia Avenue’s value is estimated to be $35 per square foot or $272,415 ($35 per
sq. ft x 8,255 = $288,925), rounded to $290,000.
SALES COMPARISON APPROACH CONCLUSION
($290,000)
Laconia Avenue Easement
An easement is proposed for a 2,500 square foot (25’ x 100’) section of Block 4614 Lot
30, fronting on Laconia Avenue. Based on our inspection of the subject site and a search
of public records for recent sales of vacant, C8-1 (commercially zoned) land in the Bronx,
as well as use restrictions, we estimate a value of $5 per square foot, or $12,500 ($5 PSF
x 2,500 sq.ft.), for the proposed area of perpetual easement.
69 Property Appraisal Services, Inc. INCOME APPROACH
The Income Approach to Value is based on the premise that a relationship exists between
the net income that a property is capable of producing and the value of the property.
The subject (3290 Laconia Avenue) is primarily an owner-user type of property, however
it is viewed to have some investment potential. Industrial properties are chiefly traded on
a projection of one year’s income stream. In arriving at a value estimate via the Income
Approach, the following steps are taken:
1. Estimate the annual Gross Potential Income of the property based on actual leases in
effect and/or on comparable rental data.
2. Deduct from the Gross Potential Income the estimated loss of income resulting from
vacancies and/or non-collections to arrive at an estimate of gross effective income.
3. Estimate the expenses which are anticipated to be incurred in the operation of the
property. The total expenses are deducted from the gross effective income to arrive at an
estimate of net operating income (NOI - income before debt service, income taxes and
depreciation).
4. Derive a capitalization rate by reference to the return requirements of the of the equity
and capital (mortgage) markets. Select an appreciate method of capitalization and
convert the NOI into a value estimate.
70 Property Appraisal Services. Inc.
Rental # 1
Address: 520 Barretto Street, Bronx, N.Y.
Lease date: April, 1993
Rentable Area: 10.000 S.F.
Description: One-story industrial building containing 10,000 square feet.
Terms: Ten year lease; Tenant is responsible for real estate taxes over base year, 10% rent escalations every 30 months.
Annual Rent/SF: $4.20
Rental # 2
Address: 2360 Powell Avenue, Bronx, N.Y.
Lease date: September 30, 1993 (Awaiting final signature)
Rentable Area: 5.000 S.F.
Description: One-story garage building containing 5,000 square feet, and approximately 250 S.F. of office area.
Terms: 5-year lease, 3Vfc% annual escalation, tenant pays increases in real estate taxes above base year, plus all operating expenses, insurance, utilities, water and sewer.
Annual Rent/SF: $7.20
71 Property Appraisal Services, Inc. Rental # 3
Address: 557 Timpson Street, Bronx, New York.
Lease date: November 1, 1991
Rentable Area: 5.000 S.F.
Description: 5.000 square feet of warehouse space within a recently constructed mixed use building.
Terms: 5-year term 4% annual increases, 100% of real estate tax increase above 1991/92 base year.
Annual Rent/SF: 1 $5.88 2 $6.12 3 $6.36 4 $6.62 5 $6.88
Rental # 4
Address: 436-440 Avenue, Bronx, N.Y.
Lease date: August, 1993
Rentable Area: 1,375 S.F.
Description: One-story garage building containing 1,375 square feet.
Terms: Five year lease; tenant pays real estate taxes above base year, no escalations.
Annual Rent/SF: $8.72
72 Property Appraisal Services, Inc. Rental # 5
Address: 1170 Bronx River Avenue, Bronx, N.Y.
Lease date: June, 1992
Rentable Area: 5,000 S.F.
Description: One-story garage building containing 9,800 square feet.
Terms: Ten year lease; 5% annual escalation, pro-rate of real estate taxes over base year.
Annual Rent/SF: $6.00
Rental # 6
Address: 829 East 144th Street, Bronx, NY
Lease date: June, 1991
Rentable Area: 6,000 S.F.
Description: One-story garage building containing 11,000 square feet.
Terms: 5-year lease; No escalations, tenant pays $8,000 of real estate taxes per year.
Annual Rent/SF: $3.40($4.73 S.F. including annual real estate passthroughs)
73 Property Appraisal Services, Inc
Rental # 7
Address: 1056 Bronx River Avenue, Bronx
Lease date: September, 1993 (Offering)
Rentable Area: 2,500 S.F.
Description: One-story garage building containing 20,000 square feet.
Terms: Negotiable
Annual Rent/SF: $6.00
BLOCK 4614, LOTS 30, P/O 38 RENTAL DATA SUMMARY
No. Location Area (SF) Lease Date Rental/SF
1 520 Barretto 10,000 04/01/93 4.20 2 2360 Powell Avenue 5,000 09/30/93 7.20 3 557 Timpson Street 5,000 11/01/91 5.88 4 436 Wales Avenue 1,375 08/01/93 8.72 5 1170 Bronx River Avenue 5,000 06/01/92 6.00 6 829 East 144th Street 5,000 06/01/93 3.40 7 1056 Bronx River Avenue 2,500 09/01/93 6.00 Property Appraisal Services, Ina
Market Rental Value Conclusion
The data collected demonstrates rents for small industrial/garage properties in the Bronx,
and provides a firm basis for a rental value estimate. Differences noted in our observation
of these comparables include location, size, story height, and condition, but each is
comparable to the subject in general type and overall utility. The lower rental value
indications are typically found in ordinary industrial structures clearly inferior to the subject
in commercial potential.
The lease comparables are reasonably consistent, demonstrating a rental range of from
$3.00 to $8.70 per square foot. The subject (3290 Laconia Avenue) is located on Laconia
Avenue between East Gunhill Road and Boston Road. After renovation, the building will
offers good utility to a wide range of potential users. Based on the rentals examined, it
is our opinion that the subject would command a rental value of $7.00 per square foot on
a partially net basis, meaning that base year taxes are to be paid by ownership. Potential
gross income calculates as follows:
POTENTIAL GROSS INCOME ESTIMATE: 8,255 SF* X $7.00/SF = $57,785
^(mezzanine area weighted by 50%)
75 Property Appraisal Services, Inc
Vacancy and Collection Loss
We estimate a vacancy/collection loss of 6% annually, based on the strength of the local
commercial and industrial market, and on the subject’s particular characteristics and
market appeal.
Annual Operating Expenses
The subject’s market rental has been estimated on a partially net basis, meaning that
expenses incurred by ownership will be limited to real estate taxes, non-occupant type
insurance, management cost, legal and accounting fees, and reserves for structural
repairs. Expenses have been estimated based on our experience with similar type
properties, and on costs roughly related by ownership.
Real Estate Taxes were estimated referring to the earlier report section "Assessed Value and Taxes"; based on our experience with this type of property.
Liability insurance at of the date of valuation is estimated at $.20 per square foot, or $1,651.
Management expense to ownership has been included at 4% of effective gross income, consistent with the usual cost of this service.
Legal and accounting fees are estimated at $1,500 per year.
Reserves for repairs were estimated at 2% of effective gross income based on the subject’s current condition.
76 Property Appraisal Services, Inc. The following summary presents income and expenses anticipated for the subject during
the initial year of a holding period assumed to commence at the date of appraisal.
3290 Laconia Avenue Summary of Estimated Income and Expenses (10/93 -10/94)
Gross Income
Base Rental $57,785 Less Vacancy/Collection Loss @ 6% 3.467
Effective Gross Income $ 54,318
Expenses
Real Estate Taxes (estimated) 16,510 Insurance 1,651 Legal/Accounting 1,500 Management @ 4% of EGI 2,173 Reserves @ 2% of EGI 1,086
Total Expenses
Net Operating Income $ 31,398
$31,398 Capitalized @ 10.00%
Rounded =$315,000
We have deducted $90,000 from the Income Approach conclusion of $315,000, the
cost to renovate 3290 Laconia Avenue ($315,000 - $90,000 = $225,000).
INCOME APPROACH CONCLUSION
$225,000
77 \
Property Appraisal Services, Inc.
Due to the fact that most properties are purchased with the combination of debt and equity capital, the return on investment component of the overall capitalization rate must satisify the market return requirements of each investment position. Lenders must anticipate receiving a competitive interest rate commensurate with the perceived risk, or they will not make the funds available. Equally, equity investors must anticipate a competitive yield, or they will seek other investment vehicles.
The overall capitalization rate is determined from this band of investment allocating the appropriate yield, and its percentage of the entire investment, to determine the overall capitalization rate.
Band of Investment: Mortgage Equity Yield Method
Loan to Value ratios:
Mortgage 75.00% Equity 25.00%
Equity Yield Rate 10.00% Competitive Mortgage Interest Rate 9.00% Mortgage Term in years 25 Annual Mortgage Constant 0.1007
Say 10.00% | Property Appraisal Services, Inc.
RECONCILIATION AND CHOICE OF VALUE:
The methods of value used within this report indicate the following:
3290 Laconia Avenue Direct Sales Comparison Approach $290,000 Income Approach $225,000
1100 East Gunhili Road Direct Sales Comparison Approach $485,000
Laconia Easement $12,500
The Sales Comparison approach is based upon an analysis of comparable sales data
from the same or competing areas. This approach is given impact because it directly
reflects the actions of buyers and sellers in the marketplace, the available sales data are
quantitatively adequate and in proximity to the subject. As industrial/garage type
properties (3290 Laconia Avenue) are usually purchased for owner occupancy, this
approach is the best indicator of value and has been weighted heavily.
The Income approach is the primary indicator of value for income producing properties.
This approach uses internally generated figures and reflects market income and
expenses. As industrial/garage warehouse buildings similar to the subject are typically
purchased for owner occupancy, and not to be leased, it is not a primary income
producing property. Thus, this approach has been used primarily to support the final
value estimate.
79 Property Appraisal Services, Inc
The Cost Approach was not used as 3290 Laconia Avenue is over 50% depreciated, and
buyers and sellers in this market do not consider cost reflective of value. Therefore the
Cost Approach was not used in this valuation.
VALUE CONCLUSION
Based on our examination of the subject and market analysis, it is our opinion that the
market value of 3290 Laconia Avenue and 1100 East Gunhill Road, Bronx, New York as
of October 15, 1993 is:
3290 Laconia Avenue (Improved) $275,000 Laconia Avenue (Easement) $12,500 1100 East Gunhill Road (Unimproved) $485,000
Richard J. Anastasio, MAI Certified Appraiser #46-2882
80 Property Appraisal Services, Inc. CERTIFICATE OF VALUE The undersigned does hereby certify that, except as otherwise noted in the appraisal report: I have no present or contemplated future interest in the real estate that is the subject of the report.
I have made a personal inspection of the property that is the subject of this report (R.J. Anastasio - Review Only).
I have no personal interest or bias with respect to the subject matter of the report or the parties involved.
To the best of my knowledge and belief, the statements of factors contained in the report, upon which the analysis, opinions, and conclusions expressed herein are based, are true and correct.
The reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions, and are my personal, unbiased professional analyses, opinions, and conclusions.
My compensation is not contingent upon the reporting of a requested minimum valuation, specific valuation, or the approval of a loan.
My analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the Uniform Standards of Professional Appraisal Practice and FIRREA
I certify that, to the best of my knowledge and belief, the reported analyses, opinions and conclusions were developed, and this report has been prepared, in conformity with the requirements of the Code of Professional Ethics and Standards of Professional Appraisal Practice of the Appraisal Institute.
I certify that the use of this report is subject to the requirements of the Appraisal institute relating to review by its duly authorized representatives. As of the date of this report, I have completed the requirements of the continuing education program of the Appraisal Institute (R.J. Anastasio, MAI).
No one other than the undersigned prepared the analyses, conclusions, and opinions concerning real estate that are set forth in this appraisal report.
Neither all nor any part of the contents of this report (especially any conclusions as to the value, the identity of the appraiser, or any reference to the Appraisal Institute or to the MAI designation) shall be disseminated to the public through advertising media, public relations media, news media, sales media, or any other means of communication without the prior consent and approval of the undersigned.
Certified Appraiser #46-7761 Certified Appraiser #46-2882
81 Property Appraisal Services, Ina
ASSUMPTIONS & LIMITING CONDITIONS
This appraisal is for no purpose other than property valuation, and the appraisers are neither qualified nor attempting to go beyond that narrow scope. The reader should be aware that there are also inherent limitations to the accuracy of the information and analysis contained in this appraisal. Before making any decision based on the information and analysis contained in this report, it is critically important to read this entire section to understand these limitations.
An appraisal is not a survey: It is assumed that the utilization of the land and improvements is within the boundaries of the property lines of the property described and that there is no encroachment or trespass unless noted within the report.
No survey of the property has been made by the appraiser and no responsibility is assumed in connection with such matters. Any maps, plats, or drawings reproduced and included in this report are intended only for the purpose of showing spacial relationships. The reliability of the information contained on any such map or drawing is assumed by the appraiser and cannot be guaranteed to be correct. A surveyor should be consulted if there is any concern on boundaries, setbacks, encroachments, or other survey matters.
An appraisal is not a legal opinion: No responsibility is assumed for matters of a legal nature that affect title to the property nor is an opinion of title rendered. The title is assumed to be good and marketable. The value estimate is given without regard to any questions of title, boundaries, encumbrances, or encroachments. We are not usually provided an abstract of the property being appraised and, in any event, we neither made a detailed examination of it nor do we give any legal opinion concerning it.
It is assumed that there is full compliance with all applicable federal, state and local environmental regulations and laws unless noncompliance is stated, defined, and considered in the appraisal report. A comprehensive examination of laws and regulations affecting the subject property was not performed for this appraisal.
It is assumed that all applicable zoning and use regulations and restrictions have been complied with, unless a nonconformity has been stated, defined, and considered in the appraisal report. Information and analysis shown in this report concerning these items is based only on a rudimentary investigation. Any significant question should be addressed to local zoning or land use officials and/or an attorney.
82 Property Appraisal Services, Inc.
It is assumed that all required licenses, consents, or other legislative or administrative authority from any local, state, or national government or private entity or organization have been or can be obtained or renewed for any use on which the value estimate contained in this report is based. Appropriate government officials and/or an attorney should be consulted if an interested party has any questions or concerns on these items since we have not made a comprehensive examination of laws and regulations affecting the subject property.
An appraisal is not an engineering or property inspection report: This appraisal should not be considered a report on the physical items that are a part of this property. Although the appraisal may contain information about the physical items being appraised (including their adequacy and/or condition), it should be clearly understood that this information is only to be used as a general guide for property valuation and is not a complete or detailed physical report. The appraisers are not construction, engineering, environmental, or legal experts, and any statement given on these matters in this report should be considered preliminary in nature.
The observed condition of the foundation, roof, exterior, walls, floors, heating system, plumbing, insulation, electrical service, and all mechanicals and construction is based on a casual inspection only as no detailed inspection was made. For example, we are not experts on heating systems and no attempt was made to inspect the interior of the furnace. The structures were not checked for building code violations and it is assumed that all buildings meet applicable building codes unless so stated in the report.
Some items such as conditions behind walls, above ceilings, behind locked doors, or under the ground are not exposed to casual view and therefore were not inspected. The existence of insulation, if any was mentioned, was found by conversation with others and/or circumstantial evidence. Since it is not exposed to view, the accuracy of any statements about insulation cannot be guaranteed.
It is assumed that there are no hidden or unapparent conditions of the property, sub-soil, or structures that would render it more or less valuable. No responsibility is assumed for such conditions, or for the engineering that may be required to discover such factors. Since no engineering or percolation tests were made, no liability is assumed for soil conditions. Sub-surface rights (mineral and oil) were not considered in making this appraisal.
Wells, septic, and sewer systems, if any, are assumed to be in good working condition and of sufficient size and capacity for the stated highest and best use.
83 Property Appraisal Services. Inc.
We are not environmental experts, and we do not have the expertise necessary to determine the existence of environmental hazards such as the presence of urea- formaldehyde foam insulation, toxic waste, asbestos, or hazardous building materials, or any other environmental hazards on the subject or surrounding properties. If we know of any problems of this nature which we believe would create a significant problem, they are disclosed in this report. Nondisclosure should not be taken as an indication that such a problem does not exist, however. An expert in the field should be consulted if any interested party has questions on environmental factors.
No chemical or scientific tests were performed by the appraiser on the subject property, and it is assumed that the air, water, ground, and general environment associated with the property present no physical or health hazard of any kind unless otherwise noted in the report. It is further assumed that the lot does not contain any type of dump site and that there are no underground tanks (or any underground source) leaking toxic or hazardous chemicals into the groundwater or the environment unless otherwise noted in the report.
The age of any improvements to the subject property mentioned in this report should be considered a rough estimate. We therefore rely on circumstantial evidence which may come into our possession (such as dates on architectural plans) or conversations with those who might be somewhat familiar with the history of the property such as property owners, on-site personnel, or others. Parties interested in knowing the exact age of the improvements on the land should pursue additional investigation.
Because no detailed inspection was made, and because such knowledge goes beyond the scope of this appraisal, any observed condition or any other comments given in this appraisal report should not be taken as a guarantee that a problem does not exist. Specifically, no guarantee is made as to the adequacy or condition of the foundation, roof, exterior walls, interior walls, floors, heating system, air conditioning system, plumbing, electrical service, insulation, or any other detailed construction matters. If any interested party is concerned about the existence, condition, or adequacy of any particular item, we would strongly suggest that a construction expert be hired for a detailed investigation.
An appraisal is made under conditions of uncertainty with limited data: As can be seen from the limitations presented herein, this appraisal has been performed with a limited amount of data. Limitations result from a lack of certain areas of expertise by the appraiser (that go beyond the scope of the ordinary knowledge of an appraiser), the inability of the appraiser to view certain portions of the property, and the inherent limitations of relying upon information provided by others.
84 Property Appraisal Services, Inc. In addition, there is an economic constraint. The appraisal budget (and the fee for this appraisal) does not contain unlimited funds for investigation. We have spent our time and effort in the investigative stage of this appraisal in those areas where we think it will be most beneficial, but inevitably there is a significant possibility that we do not possess all information relevant to the subject property.
Information (including projections of income and expenses) provided by local sources, such as government agencies, financial institutions, accountants, attorneys, architects, management agencies, and others is assumed to be true, correct, and reliable. No responsibility for the accuracy of such information is assumed by the appraiser.
The comparable sales and rental data relied upon in the appraisal is believed to be from reliable sources. Though all of the comparables were examined, it was not possible to inspect them all in detail. The value conclusions are subject to the accuracy of said data.
Engineering analyses of the subject property were neither provided for use, nor made as part of this appraisal contract Any representation as to the suitability of the property for uses suggested in this analysis is therefore based only on a rudimentary investigation by the appraiser and the value conclusions are subject to such limitations.
All values shown in the appraisal report are projections based on our analysis as of the date of the appraisal. These values may not be valid in other time periods or as conditions change. We take no responsibility for events, conditions, or circumstances affecting the property’s market value that take place subsequent to either the date of value contained in this report or the date of our field inspection.
Since projected mathematical models and other projections are based on estimates and assumptions which are inherently subject to uncertainty and variation depending upon evolving events, we do not represent them as results that will actually be achieved.
This appraisal is an estimate of value based on an analysis of information known to us at the time the appraisal was made. We do not assume any responsibility for incorrect analysis because of incorrect or incomplete information. If new information of significance comes to light, the value given in this report is subject to change without notice.
Appraisal report limitations: Appraisal reports are technical documents addressed to the specific technical needs of clients. Casual readers should understand that this report does not contain all of the information we have concerning the subject property or the real estate market.
Appraisal reports made for lenders are technical documents specifically made to lender requirements. Casual readers are cautioned about their limitations and cautioned against possible misinterpretation of the information contained in these reports.
85 Property Appraisal Services, Inc.
Appraisal restrictions: This appraisal was prepared at the request of, and for the exclusive use of, the client to whom the appraisal is addressed. No third party shall have any right to use or rely upon this appraisal for any purpose.
There are no requirements, by reason of this appraisal, to give testimony or appear in court or any pretrial conference or appearance required by subpoena with reference to the property in question, unless sufficient notice is given to allow adequate preparation and additional fees are paid by the client at our regular rates for such appearance and the preparation necessitated thereby.
This report is made for the information and/or guidance of the client, and possession of this report, or a copy thereof, does not carry with it a right of publication or duplication. Neither all or any part of the contents of this report shall be conveyed to the public through advertising, public relations, news, sales, or other media or communication device without the written consent and approval of the appraiser. Nor shall the appraiser, firm, or professional organization of which the appraiser is a member be identified without the written consent of the appraiser.
It is suggested that those who possess this appraisal report should not give copies to others. Certainly legal advice should be obtained on potential liability issues before this is done. Anyone who gives out an incomplete or altered copy of the appraisal report (including all attachments) does so at their own risk and assumes complete liability for any harm caused by giving out an incomplete or altered copy. Neither the appraiser nor this company assumes any liability for harm caused by reliance upon an incomplete or altered copy of the appraisal report given out by others. Anyone with a question on whether their copy of this appraisal report is incomplete or altered should contact our office.
Values and conclusions for various components of the subject parcel as contained within this report are valid only when making a summation; they are not to be used independently for any purpose and must be considered invalid if so used. The allocation of the total value in this report between land and improvements applies only under the reported highest and best use of the property. The separate valuations for land and buildings must not be used in conjunction with any other appraisal and are invalid if so used.
86 Property Appraisal Services, Inc.
QUALIFICATIONS OF BRIAN J. WYNNE
EDUCATION
M.B.A., Manhattan College Graduate Business School B.A., Lehman College, The City University of New York
ADDITIONAL COURSES COMPLETED
Appraisal Institute Courses: Real Estate Appraisal Principles Basic Valuation Procedures Capitalization Theory and Techniques, Parts A and B Residential Valuation Procedures Standards of Professional Practice Case Studies in Real Estate Valuation
PROFESSIONAL AFFILIATIONS
MAI Candidate, Appraisal Institute
EXPERIENCE
Associate appraiser with Wm. Shubert & Co., Bronx, New York, performing all aspects of data search, verification, and report preparation. Prior real estate experience includes preparation of insurable value estimates for properties throughout New York City.
CERTIFICATION
New York State Certified General Appraiser #46-7761
87 Property Appraisal RICHARD J. ANASTASIO, MAI Services, Inc. QUALIFICATIONS CERTIFIED REAL ESTATE APPRAISER
I have been continuously employed as a real estate appraiser since 1970. Experience includes staff appraisal positions in officer capacity, in major lending institutions and investment firms.
DESIGNATIONS: American Institute of Real Estate Appraisers - MAI New York Chapter # 4,No. 6259(Currently Certified)
Columbia Society Of Appraisers - CSA New York
EDUCATION: Masters of Business Administration, 1970 City University, New York, N.Y.
Bachelors Degree, 1962 Manhattan College, New York, N.Y.
EXPERIENCE: Appraising a wide variety of properties since 1970 including office buildings, hotels, shopping centers, apartments, industrial buildings, commercial properties, warehouses, and residential properties.
Appraisals have been made in the following states: Arizona, Arkansas, California, Connecticut, Florida, Georgia, Hawaii, Illinois, Indiana, Massachusetts, Minnesota, Ohio, Oklahoma, Pennsylvania, New Jersey, New York, North Carolina, Nebraska, Nevada, Rhode Island, Tennessee, Texas, Virginia, and Washington D.C.
EMPLOYMENT Staff Appraiser Chase Manhattan Bank Appraisal Officer Bankers Trust Chief Appraiser Douglas Elliman Director of Valuations Prudential Securities, Inc. Principal Property Appraisal Services, Inc.
Adjunct Professor of Real Estate - Farleigh Dickinson University.
CERTIFICATION New York Certified General Appraiser #46-2882 Connecticut Licensed Appraiser #A01995 New Jersey Certified General Appraiser #RG00866 Pennsylvania Certified General Appraiser #GA-001099-R
88
3 A V Consolidated Edison Company of New York, Inc. 4 Irving Place, New York, N.Y. 10003 July 13, 1993
Richard J. Anastasio Property Appraisal Services, Inc. 2105 Williamsbrige Road Bronx, New York 10461
Appraisal of Laconia and Yates Avenue and Gun Hill Road, Bronx
Dear Mr. Anastasio:
As we discussed, Con Edison would like you to appraise a portion of the parcel of land and building it owns on Laconia Avenue in the Bronx, known as Block 4614, Lots 30 and 38 shown on Plan 1 in yellow. Con Edison is interested in selling that part of the property shown on Plan 2 crosshatched and in yellow and will grant an easement over the area in blue on Plan 2. We would like you to prepare a market value appraisal of the fee rights to this portion of the property with the easement area.
In addition, we would like you to estimate the impact on the value of the property of the easement versus a fee transfer of this part of the property. We are interested in knowing the economic impact of the easement on the sale value in order to determine whether it is cost effective to move some underground conduit we have in this area or to leave it and grant the easement.
The area of the land to be appraised is Lot 30 (part), 27,500 sq.ft., Lot 38 (part), 10,543 sq.ft. and the easement area, 2,500 sq.ft. for a total of 40,543 sq.ft. The building occupies approximately 7,000 sq.ft. of land. In your analysis you are to assume the property is environmentally clean. Equipment shown in the Insurance Map No. 5-27 dated October, 1962 has been largely removed and the property will be sold in its "as is" condition.
Please call me at (212) 460-4279 after you have reviewed this information with your proposed fee and when you might want to see the property. Thank you for your assistance.
Sincerely,
Louis M. Camevale Senior Real Estate Representative
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^©CONSOLIDATED EDISON CO. OF N.Y., INC SAFETY SERVICES BUREAU 4 IRVINQ PLACE MAP SHOWING CONSOLIDATED EDISON'S ' LACONIA AVS. SUBSTATION, INCORPORATING LOT'S 30 AND 36, BLOCK *4614. SCALE-1’. 40
DESCRIPTION OF LOTS 3 0 AND 3 6 '.OMMENCING AT MONUMENT NUMBER 8 0 0 , LOCATED ON THE SOUTHS AST :0RNjSR OF LACONIA AVS. AND GUN HILL RD. A S SHOWN IN QUADRANT VTIT IN RECORD MAP SECTION 3 5 , BOROUGH OF THE BRONX AMENDED AND CORRECTED JANUARY 18, 1178 ) COORDINATES OF SAID MONUMENT BEING NORTH 3 3 827-861 AND WEST 3 0 777.6,48 AS INDICATED IN THE BOROUGH OF THE BRONX COORDINATE .‘SYSTEM'. CONTINUING ALONG A BEARING OF SOUTH 3 8 DEGREES 55 MINUTES 27-2 SECONDS EAST A DISTANCE OF 17-74 ■EET TO A POINT OF BEGINNING, SAID POINT BEING THE NORTHWEST CORNER W LOT fr 3 8 OF THE LACONIA AVS. SUBSTATION, SAID POINT BEING NORTH 32812-170 AND WEST 3076,8-006. THENCE CONTINUING ALONG A BEARING )F SOUTH 6,7 DEGREES 13 MINUTES 44.2 SECONDE EAST A DISTANCE OF Z14. 78 FEET TO A POINT, COORDINATE'S OF SAID POINT BEING NOKl’H 3.3729.53? AND WEST 30561. <166. THENCE CONTINUING ALONG A BEARING OF SOUTH 1 DEGREE £3 MINUTES 3 4 -7 SECONDS WEST A DISTANCE OF 2 3 5 .8 6 , FEET TO A POINT, COORDINATES OF SAID POINT •SING NORTH 3 3 M+.049 AND WEST ’20575.700. THENCE CONTINUING iLOAJG A BEARING OF NORTH 8 8 DEGREES 3 6 MINUTES 2 5 .3 SECONDS ' E S T A DISTANCE OF 1 0 0 .0 0 FEET TO A POINT, COORDINATES OF SAID OINT BEING NORTH 33416. 480 AND WEST 30675.670. THENCE ONTINUING ALONG A BEARING OF NORTH 1 DEGREE S3 MINUTES 34- 7 ECOHDS EAST A DISTANCE OF 25.00 FEET TO A POINT, COORDINATES OF SAID 'OINT BEING NORTH 33521.473 AND WEST 3 0 6 7 5 .0 6 2 . THENCE CONTINUING LONG A BEARING OF NORTH 88 DEGREES 36 MINUTES 25- 3 SECONDS IE ST A DISTANCE OF 100.00 FEET TO A POINT, COORDINATES OF SAID O IN T BEING NORTH 3 3 5 2 3 . W 4 AND WEST 20775.640.THENCE WTINUING ALONG A BEARING OF NORTH 1 DEGREE 23 MINUTES 34.7 ’■JCONDS EAST A DISTANCE OF 269-14 FEET TO THE POINT OF ORIGIN, 10RDINATES OF SAID POINT BEING NORTH 338/2.970 AND WEST 30768.006.