Self-Contained Appraisal Report Prepared
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SELF-CONTAINED APPRAISAL REPORT BROOKLYN BRIDGE PARK – (CONVERSION PROPERTY) TOBACCO WAREHOUSE & EMPIRE STORES Part of 51 Water Street N/E/C Water Street & New Dock Street Brooklyn, New York BLOCK 26, PART OF LOT 1 PREPARED FOR: Mr. Charles R. Kamps Executive Director NYC Department of Citywide Administrative Services 1 Centre Street, 20th Floor North New York, NY 10007 PREPARED BY: Mr. Matthew J. Guzowski - Principal, Ms. Kathleen Rairden – Senior Vice President Ms. Tonia Vailas – Senior Vice President Goodman-Marks Associates, Inc. 420 Lexington Avenue, Suite 456 New York, NY 10017 TABLE OF CONTENTS PAGE Certificate of Appraisal ....................................................................................................9 Summary of Salient Facts and Conclusions ..................................................................12 Appraisal Definitions .....................................................................................................15 Hypothetical Conditions, Extraordinary Assumptions, Limiting Conditions & Jurisdictional Exception ...........................................................18 Valuation Date/Purpose, Intended Use & Users of the Appraisal/Subject Property Identification & Ownership History..............................................................................21 Survey of Subject Property...........................................................................................23 Site Map of Brooklyn Bridge Park................................................................................26 Aerial Photographs of Subject Property........................................................................27 Exterior Photographs of Subject Improvements ............................................................29 Exterior Photographs of Subject Improvements ............................................................33 Street Views and Views of Surrounding Improvements ................................................36 Scope of the Appraisal & Methods of Valuation ..............................................................43 Area Map......................................................................................................................48 Area Description............................................................................................................49 Local Area Map.............................................................................................................67 Local Area Description ..................................................................................................68 Property Description.....................................................................................................92 Sketch of Area Calculations – Conversion Property......................................................96 Tobacco Warehouse Site Structure Layout ...................................................................97 Empire Stores Site Building Layout..............................................................................98 Interior Photographs – Empire Stores Site ..................................................................103 Tax Map.....................................................................................................................110 Assessment and Real Estate Tax Data ...........................................................................111 Zoning Map ................................................................................................................122 Zoning Excerpt............................................................................................................123 Highest and Best Use .................................................................................................141 Income Capitalization Approach.................................................................................178 Income Capitalization Approach Methodology...........................................................179 Analysis of the Local Apartment Market ....................................................................180 Comparable Apartment Rentals Location Map ...........................................................184 Photographs of Comparable Apartment Rentals..........................................................185 New York City Outer Boroughs Office Market Overview ..............................................195 Analysis of the Local Office Market...........................................................................201 Comparable Office Rentals Location Map ..................................................................209 Photographs of Comparable Office Rentals ................................................................210 New York City Outer Boroughs Retail Market Overview ...............................................212 Analysis of the Local Retail Market ...........................................................................217 Comparable Retail Rentals Location Map...................................................................226 Photographs of Comparable Retail Rentals.................................................................227 New York City Outer Boroughs Industrial Market Overview..........................................231 Analysis of the Local Industrial Market......................................................................237 TABLE OF CONTENTS (continued) PAGE Analysis of Income & Expenses .................................................................................241 Estimated Construction Costs.....................................................................................247 Construction and Absorption Timetable .....................................................................254 Choice of Residual Capitalization Rate.......................................................................257 Choice of Discount Rate.............................................................................................271 Recapitulation of Assumptions ...................................................................................275 Larger Parcel Determination – As Improved – As One Zoning Lot/Renovation of Existing Improvements..........................................276 Empire Stores – As Improved - As a Separate Zoning Lot/Renovation of Existing Improvements.................................277 Tobacco Warehouse – As Improved - As a Separate Zoning Lot/ Construction of 1-Story Retail Building within Existing Structure.................................278 Sales Comparison Approach.......................................................................................280 Sales Comparison Approach Methodology.................................................................281 Analysis of Comparable Industrial Shell Building Sales .............................................286 Comparable Industrial Shell Building Sales Location Map .........................................309 List of Comparable Industrial Shell Building Sales.....................................................310 Analysis of Comparable Industrial Land Sales............................................................314 Comparable Industrial Vacant Land Sales Location Map............................................340 List of Comparable Industrial Vacant Land Sales .......................................................341 Correlation and Value Choice.....................................................................................351 Qualifications.............................................................................................................361 ADDENDA Statement of Work Guidance for Larger Parcel Determination Memorandum Engagement Letter Discounted Cash Flow Models CORPORATE HEADQUARTERS / ACCOUNTING DEPARTMENT 170 OLD COUNTRY ROAD, SUITE 501, MINEOLA, NEW YORK 11501 PHONE: (516) 248-9777 FAX: (516) 248-9628 NEW YORK CITY OFFICE 420 LEXINGTON AVENUE, SUITE 456, NEW YORK, NEW YORK 10170 PHONE: (212) 324-2870 FAX: (212) 324-2879 www.goodmanmarks.com July 8, 2013 Mr. Charles R. Kamps Executive Director NYC Department of Citywide Administrative Services 1 Centre Street, 20th Floor North New York, NY 10007 Re: Brooklyn Bridge Park – Conversion Property Tobacco Warehouse & Empire Stores Part of 51 Water Street N/E/C Water Street & New Dock Street Brooklyn, New York File No. 13-208 Dear Mr. Kamps: At your request, we have inspected and performed the attached self-contained appraisal report of the above-captioned property, which is located at the northeast corner of Water Street and New Dock Street in the DUMBO/Fulton Ferry section of the Borough of Brooklyn, Kings County, New York. The property is identified on the tax maps of Kings County as Block 26, part of Lot 1. The subject property is currently owned by the State of New York and is known as the “Tobacco Warehouse” site and the “Empire Stores” site. The subject is part of the Brooklyn Bridge Park project site, an 85-acre park that stretches along 1.3± miles of waterfront area consisting of piers, landscaped areas, ecological habitats, recreational facilities, a marina, commercial space, and upland and water areas. It provides a scenic overlook as well as access to a public waterfront plaza, several landmarked buildings and a public pier and esplanade. The subject property is part of lands that involved funding from the Federal government under the Land and Water Conservation Fund (L&WCF). As part of the project, the City of New York is currently seeking to “convert” the property into