An Appraisal of Real Property in an Appraisal Report
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AN APPRAISAL OF REAL PROPERTY IN AN APPRAISAL REPORT LUCKY DRAGON HOTEL & CASINO 300 West Sahara Avenue Las Vegas, NV 89102 NKF Valuation and Advisory Job No.: ..................... 17-2685-0064 PERTINENT DATES: “As Is” Valuation Date: ....................................... October 11, 2017 “Upon Stabilization” Valuation Date: .................. October 11, 2019 Report Date: ..................................................... November 8, 2017 PREPARED FOR: Mr. Tony Petruccello, Director of Operations Silver Arch Capital Partners, LLC 433 Hackensack Avenue Hackensack, NJ 07601 PREPARED BY: Newmark Knight Frank Valuation & Advisory Hospitality and Leisure Specialty Practice 891 Hillcrest Road, Suite 150 Mobile, AL 36695 LUCKY DRAGON HOTEL & CASINO 300 West Sahara Avenue Las Vegas, NV 89102 November 8, 2017 Mr. Tony Petruccello, Director of Operations Silver Arch Capital Partners, LLC 433 Hackensack Avenue Hackensack, NJ 07601 Re: An Appraisal of the 203-room Lucky Dragon Hotel & Casino (Las Vegas, NV) Dear Mr. Petruccello: In accordance with your request, we have performed an appraisal of the 203-room Lucky Dragon Hotel & Casino (Las Vegas, NV). As agreed upon, this appraisal is the result of an analysis based on the described scope of work, and was written in a standard Appraisal Report format, based on analysis conducted during October 2017. This report complies with the reporting requirements set forth in Standards Rule 2-2 (a) of the Uniform Standards of Professional Appraisal Practice. This appraisal has been conducted to conform to the Federal Regulation 12 CFR (Part) 564, Uniform Standards of Professional Appraisal Practice (USPAP) as promulgated by the Appraisal Foundation and as outlined within Title XI of FIRREA, federal regulations as stipulated by The Office of the Comptroller of the Currency (OCC) and in conformance with the requirements of Silver Arch Capital Partners, LLC. The purpose of this appraisal report is to estimate the current Market Value - As Is of the fee simple interest in the hotel, and the Prospective Market Value - Upon Stabilization of the fee simple interest in the hotel at the date of stabilized operations. For the hotel, the legal interest appraised reflects the fee simple interest in the property as a going-concern, including the contributory value of furniture, fixtures and equipment. The Market Value - As Is date of value is October 11, 2017, the most recent date the property was inspected. The Prospective Market Value - Upon Stabilization date of value is October 11, 2019. All value conclusions are intended to reflect the expectations of the most probable buyer of the subject property, consistent with the property’s highest and best use, as discussed in this report. This report assumes that the subject property obtains and retains an affiliation with Best Western, or a similar national franchise, and that it is subject to competent management typically provided for similar hotels. The intended use of this report is solely for mortgage financing purposes and no other use. The intended user(s) of this report are Silver Arch Capital Partners, LLC. This report may be used and relied upon only by Silver Arch Capital Partners, LLC, and no other party is permitted to use or rely on the report. Newmark Knight Frank Valuation and Advisory disclaims liability to any party other than an Intended User identified herein. The report is not intended to be distributed to any other third parties nor be used for other financing or investment purposes without Newmark Knight Frank Valuation & Advisory’s written permission. The subject property consists of a 2.51-acre site that is improved with a 2-story casino building and a 9-story, interior- corridor hotel tower featuring 203 total guest rooms. Property amenities include a lobby with front desk and sitting area, multiple food and beverage outlets, casino space (27,500 SF), retail area, business center, fitness center, full spa, outdoor swimming pool and hot tub, guest pantry/gift shop, guest laundry, and wireless high-speed internet. Please refer to The Property section of this report for a more detailed description of the subject property. Complete descriptions of the property, together with the sources of information and the bases of our estimates, are stated in the accompanying sections of this report. Your attention is called to the Certification, Standard Conditions, Special Conditions and Significant Issues that are a part of this report. Newmark Knight Frank Valuation & Advisory Hospitality & Leisure Specialty Practice 891 Hillcrest Road, Suite 150 | Mobile, AL 36695 Phone: 251.706.1500 | Web: www.newmarkkf.com In accordance with USPAP, we recognize that the final going-concern value estimate(s), if any, may include items of realty, personalty, and other components for the subject property. All concluded values in this report reflect the fee simple interest of the going-concern value for the hotel. Based on the available data, prevailing conditions observed in October 2017, along with our analyses, opinions, and conclusions, we are of the opinion that the market values of the indicated interest in the indicated component(s) of the subject property, as described in the attached report, as of the indicated dates, are: Reconciled Values Prospective Market Value - Market Value - As Is Upon Stabilization Date of Value October 11, 2017 October 11, 2019 Final Value Conclusion $143,000,000 $156,000,000 Subject to the Certification, Standard Conditions and Special Conditions The accompanying prospective financial analyses are based on estimates and assumptions developed in connection with the appraisal. However, some assumptions inevitably will not materialize, and unanticipated events and circumstances may occur; therefore, actual results achieved during the period covered by our prospective financial analyses will vary from our estimates and the variations may be material. This report, the final estimates of value and the prospective financial analyses are intended solely for your information and assistance for the function stated herein, and should not be relied upon for any other purpose. Neither our report nor any of its contents nor any reference to the appraisers or our firm may be included or quoted in any document, offering circular or registration statement, prospectus, sales brochure, other appraisal, loan or other agreement without Newmark Knight Frank Valuation & Advisory’s prior written approval of the form and context in which it will appear. Respectfully submitted, NEWMARK KNIGHT FRANK VALUATION & ADVISORY Evan Ranes, MAI, ASA First Vice President Nevada Certified General Appraiser License Number A.0001497-CG, expires 03/31/18 Newmark Knight Frank Valuation & Advisory Hospitality & Leisure Specialty Practice 891 Hillcrest Road, Suite 150 | Mobile, AL 36695 Phone: 251.706.1500 | Web: www.newmarkkf.com CERTIFICATION LUCKY DRAGON HOTEL & CASINO (LAS VEGAS, NV) CERTIFICATION Each of the undersigned certify that, to the best of my (our) knowledge and belief: the statements of fact contained in this report are true and correct; the reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions, and are my personal, impartial, and unbiased professional analyses, opinions, and conclusions; I have no present or prospective interest in the property that is the subject of this report, and I have no personal interest with respect to the parties involved; I have no bias with respect to any property that is the subject of this report or to the parties involved with this assignment; My engagement in this assignment was not contingent upon developing or reporting predetermined results. My compensation for completing this assignment is not contingent upon the development or reporting of a predetermined value or direction in value that favors the cause of the client, the amount of the value opinion, the attainment of a stipulated result, or the occurrence of a subsequent event directly related to the intended use of this appraisal; My analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the Uniform Standards of Professional Practice and the Appraisal Institute; This appraisal assignment was not based upon a requested minimum valuation, a specific valuation, or the approval of a loan. The use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representatives. The appraiser(s) has performed no other services, as an appraiser or in any other capacity regarding the subject property within the three year period immediately preceding the date of acceptance of this assignment; Evan Ranes, MAI, ASA has made a personal inspection of the property that is the subject of this report. Gregory P. Kendall, CRE, MAI, FRICS and John D. Hartman provided significant real property appraisal assistance to the person(s) signing this certification. As of the date of this report, Evan Ranes, MAI, ASA and Gregory P. Kendall, CRE, MAI, FRICS, have completed the continuing education program of the Appraisal Institute. Evan Ranes, MAI, ASA First Vice President Nevada Certified General Appraiser License Number A.0001497-CG, expires 03/31/18 CERTIFICATION SUBJECT PHOTOGRAPHS LUCKY DRAGON HOTEL & CASINO (LAS VEGAS, NV) W. SAHARA AVENUE, FACING EAST HOTEL & CASINO EXTERIOR HOTEL EXTERIOR PARKING GARAGE EXTERIOR HOTEL MAIN ENTRANCE LOBBY (FRONT DESK) SUBJECT PHOTOGRAPHS SUBJECT PHOTOGRAPHS LUCKY DRAGON HOTEL