THURSTON, CASALE & RYAN, LLC

Transcription

1 APPRAISAL REPORT XXXX AVENUE TOWN OF XXXX XXXX COUNTY, NEW YORK f INDUSTRIAL OFFICE BUILDING OWNER OF RECORD XXXX PREPARED FOR XXXX DATE OF PREPARATION February XXXX DATE OF VALUATION February 10, XXXX Real estate appraisal and cnsulting 1080 State Fair blvd (315) Syracuse, NY (315) (fax)

2 THURSTON, CASALE & RYAN, LLc 1080 state fair blvd Syracuse, NY Real Estate Appraisal and Cnsulting (315) (315) (fax) March 1, XXXX XXXX XXXX XXXX XXXX Re: Industrial Office Building XXXX Avenue Twn f XXXX, XXXX Cunty Dear XXXX: T fulfill my respnsibility utlined in the Letter f Engagement submitted XXXX, I present this Appraisal Reprt prepared XXXX. As agreed, the market value f subject s fee simple interest is prvided in the attached reprt alng with the supprting data and analysis that this appraisal frmat affrds. The date f valuatin is February 10, XXXX. The pinins f value reprted herein are subject t thse General Assumptins and Limiting Cnditins n page 2, as well as thse Extrardinary Assumptins and Hypthetical Cnditins fund starting n page 5. The steps taken t research, analyze, and estimate market value are as utlined within my Scpe f Wrk n page 5. The client and intended user f this reprt are XXXX. The functin f the appraisal is restricted t the abve referenced parties fr XXXX. It may nt be reprduced in all r part, r emplyed by any ther entity, withut my written permissin. I inspected the prperty and prepared this reprt. Thank yu fr yur cnfidence in my services. If yu have any questins r cmments, please call at yur cnvenience. Respectfully submitted, Tdd P. Thurstn Principal NYS Certified General Appraiser #

3 TABLE OF CONTENTS BODY OF REPORT: I. CERTIFICATION 1 II. GENERAL ASSUMPTIONS AND LIMITING CONDITIONS 2 III. QUALIFICATIONS: TODD P. THURSTON, MAI 3 IV. SUMMARY OF IMPORTANT CONCLUSIONS 4 V. IDENTIFICATION OF PROPERTY 5 VI. SCOPE OF WORK 5 VII. INTENDED USE/FUNCTION OF APPRAISAL 5 VIII. ASSIGNMENT CONDITIONS 5 IX. EXTRAORDINARY ASSUMPTIONS 5 X. HYPOTHETICAL CONDITIONS 6 XI. PROPERTY RIGHTS APPRAISED 6 XII. OWNER CONTACT AND PROPERTY INSPECTION 6 XIII. DATE OF VALUE ESTIMATE 6 XIV. DEFINITION OF VALUE 7 XV. HISTORY OF THE PROPERTY 7 XVI. CURRENT OCCUPANCY AND LEASES IN EFFECT 8 XVII. REGIONAL AND COUNTY ANALYSIS 9 XVIII. NEIGHBORHOOD ANALYSIS 15 XIX. TRENDS IN REAL ESTATE PRICES, RENTS AND MARKETING 20 XX. ASSESSMENT AND TAXES ANALYSIS 23 XXI. SITE DATA AND ANALYSIS 24 XXII. IMPROVEMENT DATA AND ANALYSIS 26 XXIII. HIGHEST AND BEST USE ANALYSIS 28 XXIV. SITE VALUATION 30 XXV. COST APPROACH 34 XXVI. SALES COMPARISON APPROACH 41 XXVII. INCOME CAPITALIZATION APPROACH 47 XXVIII. RECONCILIATION OF VALUE INDICATORS 56 EXHIBITS (tabs): 1 SUBJECT AND NEIGHBORHOOD PHOTOS 2 CURRENT DEED 3 ZONING/FLOOD ZONE DATA 4 COMPARABLES EMPLOYED

4 1 I. CERTIFICATION I CERTIFY THAT, TO THE BEST OF MY KNOWLEDGE AND BELIEF: The statements f fact cntained in this reprt are true and crrect. The reprted analyses, pinins, and cnclusins are limited nly by the reprted assumptins and limiting cnditins, are my persnal, impartial, unbiased prfessinal analyses, pinins, and cnclusins. I have n bias r a present r prspective interest in the prperty that is the subject f this reprt and n persnal interest with respect t the parties invlved. I have nt perfrmed services, as an appraiser r in any ther capacity, regarding the prperty that is subject f this reprt within the three-year perid immediately preceding acceptance f this assignment. I have n bias with respect t the prperty that is the subject f this reprt r t the parties invlved with this assignment. My engagement in this assignment was nt cntingent upn develping r reprting predetermined results. My cmpensatin fr cmpleting this assignment is nt cntingent upn the develpment r reprting f a predetermined value r directin in value that favrs the cause f the client, the amunt f the value pinin, the attainment f a stipulated result, r the ccurrence f a subsequent event directly related t the intended use f the reprt. I have made a persnal inspectin f the subject f this reprt. N ne prvided significant real prperty appraisal assistance t the persn(s) signing this certificatin. The reprted analyses, pinins and cnclusins were develped, and this reprt has been prepared, in cnfrmity with the requirements f the Cde f Prfessinal Ethics and the Standards f Prfessinal Practice f the Appraisal Institute. The use f this reprt is subject t the requirements f the Appraisal Institute relating t review by its duly authrized representatives. As f the date f this reprt, I have cmpleted the cntinuing educatin prgram fr Designated Members f the Appraisal Institute. Tdd P. Thurstn, MAI NYS Certified General Real Estate Appraiser #

5 2 II. GENERAL ASSUMPTIONS AND LIMITING CONDITIONS This appraisal reprt is made with the fllwing general assumptins and limiting cnditins: 1. N respnsibility is assumed fr the legal descriptin r fr matters including title cnsideratins. Title t the prperty is assumed t be gd and marketable unless therwise stated. 2. The prperty is appraised free and clear f any r all liens r encumbrances unless therwise stated. 3. Respnsible wnership and cmpetent prperty management are assumed. 4. The infrmatin furnished by thers is believed t be reliable. Hwever, n warranty is given fr its accuracy. 5. All engineering is assumed t be crrect. The plt plans and illustrative material in this reprt are included nly t assist the reader in visualizing the prperty. 6. It is assumed that there are n hidden r unapparent cnditins f the prperty, subsil, structures that render it mre r less valuable. N respnsibility is assumed fr such cnditins r fr arranging fr engineering studies that may be required t discver them. 7. It is assumed that there is full cmpliance with all applicable federal, state, and lcal envirnmental regulatins and laws unless nncmpliance is stated, defined, and cnsidered in the appraisal reprt. 8. It is assumed that all applicable zning and use regulatins and restrictins have been cmplied with, unless a nncnfrmity has been stated, defined, and cnsidered in the appraisal reprt. 9. It is assumed that all required licenses, certificates f ccupancy, cnsents, r ther legislative r administrative authrity frm any lcal, state, r natinal gvernment r private entity r rganizatin have been r can be btained r renewed fr any use n which the value estimate cntained in this reprt is based. 10. It is assumed that the utilizatin f the land and imprvements is within the bundaries r prperty lines f the prperty described and that there is n encrachment r trespass unless nted in the reprt. 11. Unless therwise stated in this reprt, the existence f hazardus materials, which may r may nt be present n the prperty, was nt bserved by the appraiser. The appraiser has n knwledge f the existence f such materials n r in the prperty. The appraiser, hwever, is nt qualified t detect such substances. The presence f substances such as: asbests, urea-frmaldehyde fam insulatin, and ther ptential hazardus materials may affect the value f the prperty. The value estimated is predicated n the assumptin that there is n such material n r in the prperty that wuld cause a lss in value. N respnsibility is assumed fr such cnditins r fr any expertise r engineering knwledge required t discver them. The intended user is urged t retain an expert in this field, if desired. 12. The distributin, if any, f the ttal valuatin in this reprt between land and site imprvements applies under the stated prgram f utilizatin. The separate allcatins fr land and buildings must nt be used in cnjunctin with any ther appraisal and are invalid if s used. 13. Pssessin f this reprt, r a cpy theref, des nt carry with it the right f publicatin. 14. The appraiser, by reasn f this appraisal, is nt required t give further cnsultatin, testimny, r be in attendance in curt with reference t the prperty in questin unless arrangements have been previusly made. 15. Neither all nr any part f the cntents f this reprt (especially any cnclusins as t value, the identity f the appraiser, r the firm with which the appraiser is cnnected) shall be disseminated t the public thrugh advertising, public relatins, news, sales, r ther media withut prir written cnsent and apprval f the appraiser. 16. The Americans with Disabilities Act (ADA) became effective January 26, The appraiser has nt made a specific cmpliance survey r analysis f the prperty t determine whether r nt it is in cnfrmity with the varius detailed requirements f ADA. It is pssible that such a survey/analysis wuld reveal that the prperty is nt in cmpliance with ne r mre requirements f the act. If s, this fact culd have a negative impact upn the value f the prperty. Since the appraiser has n direct evidence relating t this issue, pssible nncmpliance was nt cnsidered in estimating a value fr the prperty.

6 3 III. QUALIFICATIONS: TODD P. THURSTON, MAI EMPLOYMENT HISTORY EDUCATION AND APPRAISAL RELATED COURSEWORK PROFESSIONAL AFFILIATION LICENSES COURT/TESTIMONY EXPERIENCE PROFESSIONAL EXPERIENCE EXPERIENCE HIGHLIGHTS 8/03-Current: Principal Thurstn, Casale & Ryan, LLC 11/01-7/03: President Thurstn Appraisal Cmpany, LLC 12/93-11/01: Vice President Pmery Appraisal Assciates, Inc. 06/91-12/93: Staff Appraiser Pmery Appraisal Assciates, Inc. Bachelr f Science in Finance: Rchester Institute f Technlgy (1991) Appraisal Institute (since 2003): 7-hur USPAP Update (03,05,07,09,11,13,15); Case Studies in Valuatin f Upstate NY (03,05,07-10,12,14-17), Slving Appraisal Prblems in Upstate NY (04), Apartment Appraisal Cncepts and Applicatins (06), Cndminiums, C-Ops, and PUDs (07), Business Practice and Ethics (07, 12), Appraisal f Nursing Facilities (10), Data Verificatin Methds (10), Appraising Cnvenience Stres (10), Fundamentals f Separating RP, PP, & IBA (12), Prblems in the Valuatin f Partial Acquisitins (12), Rates & Ratis: Making Sense f GIMs, OARs, & DCF (14), Analyzing Operating Expenses (14), Subdivisin Valuatin (16) IRWA: Principles f Real Estate Law (02), Principles f Real Estate Negtiatin (02), Easement Valuatin (04), Mbile Hme Relcatin (06) ASFRMA: Yellw Bk: Unifrm Appraisal Standards fr Federal Land Acq. (06) Member f the Appraisal Institute (MAI) Member f the Internatinal Right-f-Way Assciatin (IRWA) NYS Certified General Appraiser # Cnsultant Appraiser NYS Department f Transprtatin Expert witness in NYS Supreme Curt and NYS Curt f Claims Several assessment grievance bards (Hrnell, Osweg, Greece) Experience includes: airprts, apartments, autmbile dealerships, banks, farms, glf curses, gravel beds, htels/mtels, manufacturing plants, mini-marts, mbile hme parks, ffice buildings, ffice/warehuses, nursing hmes, railrads (active and abandned), residential dwellings, residential subdivisins, restaurants, shpping centers, utility prperties (i.e. gas, electric, telephne), etc. Extensive eminent dmain experience invlving prjects and claims f the NYS Departments f Transprtatin and Federal Aviatin Administratin. Frequent Presenter fr lcal chapters f Appraisal Institute and IRWA: Tpics have included: Crridr Valuatin, Extracting Capitalizatin Rates fr Single- and Multi-Family Dwellings, The Pitfalls f Expensing Capital Items, The Impact f Access n Visibility & Price, A Case Study in ATF Valuatin, and Extracting External Obslescence frm Cmparable Sales. Airprt Prjects ( ): Invlved in the valuatin f airprt prperties and/r neighbring lands fr federally funded prjects t determine cmpensatin resulting frm full r partial fee acquisitins and avigatin easements. List since 2005 includes: Lt. Warren Eatn (05), Massena Int l (06), Clumbia C. (05,08,12), Flyd Bennett Memrial (09,12,14,16), Orange C. (09), Elmira-Crning (09,16), Dansville Municipal (11), Finger Lakes (12), and Perry-Warsaw (13,14). Experience als includes appraisals f: Riverside Airprt NYSDOT apprpriatin (94), Hrnell Airprt certirari (99), Michael Airfield acquisitin (00), Syracuse Suburban Airprt acquisitin (00, 01); aircraft hangars at Fultn C., Hancck Int l, Clintn C., Elmira-Crning, Griffiss, and Tmpkins C. Airprts Native American Land Claims: Invlved in analysis and valuatin f disputed lands between several Irquis tribes and the State f New Yrk. Played significant rle in the research and develpment f histrical land values/trending and calculatin f applicable rental damages. Specific land claim areas include: Cuba Lake (99-01), Niagara River Islands (99), and Stckbridge-Munsee (95).

7 4 IV. SUMMARY OF IMPORTANT CONCLUSIONS Lcatin f Prperty: Type f Prperty: Site: Building Imprvement: XXXX Avenue Twn f XXXX, XXXX Cunty Industrial Office 29,394± sq.ft. (0.675± Ac.); crner lt with 153± f.f. n XXXX and 188± f.f. n XXXX Tw-stry industrial ffice building (c.19xx) cntaining 10,683 sq.ft. f grss building area Tax Map # and Assessment: Tax Map # 2001 ASSESSMENTS Land Imprvements Ttal Taxable Eq. Value XXXX XXXX XXXX XXXX XXXX XXXX Highest and Best Use As Thugh Vacant: As Imprved: Zning Classificatin: Prperty Rights Appraised: Value Estimate Requested: Date f Inspectin: Date f Value Estimate: Industrial Office Develpment Industrial Office XXXX District (XX) Fee Simple Market Value February 10, XXXX February 10, XXXX Final Market Value: MARKET VALUE CONCLUSIONS OF APPROACHES TO VALUE Site Valuatin $32,000 Cst Apprach $417,000 Sales Cmparisn Apprach $353,000 Incme Capitalizatin Apprach Direct Capitalizatin $419,000 Yield Capitalizatin Nt Utilized THREE HUNDRED SEVENTY-FIVE THOUSAND DOLLARS ($375,000)

8 5 V. IDENTIFICATION OF PROPERTY ***Picture f Subject The appraised cnsists f a tw-stry industrial building n a 0.675± Ac. site. It is cnstructed f cncrete blck and steel with a partial cedar clapbard facade. The structure cntains 10,683 sq.ft. (78% finished; remainder warehuse) and was built c.19xx. Additinal phtgraphs f subject and neighbrhd are within Exhibit 1. VI. SCOPE OF WORK In accrdance with the Unifrm Standards f Prfessinal Appraisal Practice (USPAP), I: Made persnal inspectins f the site and interir/exterir f the building imprvement; Cllected and analyzed relevant infrmatin frm public/municipal surces; Researched and verified cmparable sales, reprductin cst new data, and rental data; Applied all three appraches t value. VII. INTENDED USE/FUNCTION OF APPRAISAL The client and intended user f this reprt are XXXX. The functin f the appraisal is restricted t the abve referenced parties fr XXXX. VIII. ASSIGNMENT CONDITIONS Reprt cnsiders the fllwing: This is an Appraisal Reprt in a frmat cnsistent with what was frmally knwn as a Self-Cntained Appraisal Reprt 1. It is prepared in cmpliance with the reprting requirements set frth in Standards Rule 2-2(a) f the Unifrm Standards f Prfessinal Appraisal Practice. IX. EXTRAORDINARY ASSUMPTIONS Extrardinary assumptins are defined as (a)n assumptin directly related t a specific assignment, as f the effective date f the assignment results, which, if fund t be false, culd alter the appraiser s pinins r cnclusins. Extrardinary assumptins presume as fact therwise uncertain infrmatin abut physical, legal, r ecnmic characteristics f the subject prperty; r abut cnditins external t the prperty such as market cnditins r trends; r 1 Term was revised in USPAP beginning January 2014

9 6 abut the integrity f data used in an analysis. 2 extrardinary assumptins: This reprt is subject t the fllwing Site size is based n a prperty survey, while building area is surced frm field measurements. Prperty is assumed t be free and clear f envirnmental cntaminatin r ther adverse cnditins. T the limited extent f my expertise, n ptential issues were bserved during my prperty inspectin r interview with wner/representative. Hwever, the client and intended users are urged t seek a qualified expert fr certainty. X. HYPOTHETICAL CONDITIONS Defined as a cnditin, directly related t a specific assignment, which is cntrary t what is knwn by the appraiser t exist n the effective date f the assignment results, but is used fr the purpse f analysis. Hypthetical cnditins are cntrary t knwn facts abut physical, legal, r ecnmic characteristics f the subject prperty; r abut cnditins external t the prperty, such as market cnditins r trends; r abut the integrity f data used in an analysis. 3 º N hypthetical cnditins are applicable t this valuatin. XI. PROPERTY RIGHTS APPRAISED Interest appraised is fee simple estate, defined as: "abslute wnership unencumbered by any ther interest r estate, subject nly t the limitatins impsed by the gvernmental pwers f taxatin, eminent dmain, plice pwer, and escheat". 4 XII. OWNER CONTACT AND PROPERTY INSPECTION The wner, XXXX, was cntacted in cnjunctin with this assignment by telephne. The inspectin f the prperty was set fr February 10, XXXX, which cnsisted f a detailed review f the imprvements and site. XXXX was present during the visit. XIII. DATE OF VALUE ESTIMATE Subject is valued as f February 10, XXXX. 2 The Appraisal Fundatin, Unifrm Standards f Prfessinal Appraisal Practice, Editin (Washingtn DC: Appraisal Standards Bard, 2012) U-3. 3 The Appraisal Fundatin. 4 Appraisal Institute, The Dictinary f Real Estate Appraisal, Fifth Editin (Chicag: Appraisal Institute, 2010) 78.

10 7 XIV. DEFINITION OF VALUE Market value is defined as "the mst prbable price which a prperty shuld bring in a cmpetitive and pen market under all cnditins requisite t a fair sale, the buyer and seller each acting prudently and knwledgeably, and assuming the price is nt affected by undue stimulus. Implicit in this definitin is the cnsummatin f a sale as f a specified date and the passing f title frm seller t buyer under cnditins whereby: 1) buyer and seller are typically mtivated; 2) bth parties are well-infrmed r well-advised, and acting in what they cnsider their wn best interests; 3) a reasnable time is allwed fr expsure in the pen market; 4) payment is made in terms f cash in United States dllars r in terms f financial arrangements cmparable theret; and 5) the price represents the nrmal cnsideratin fr the prperty sld unaffected by special r creative financing r sales cncessins granted by anyne assciated with the sale" 5. XV. HISTORY OF THE PROPERTY Mst recent transfer f the prperty tk place in the fllwing deed: Grantr: XXXX Grantee: XXXX Deed Date: May XX, 2000 Recrded: Octber XX, 2000 Purchase Price: XXXX ($XXXX /sq.ft.) Bk/Page: XXXX /XXXX Rights/Restrictins: N unusual encumbrances nted A cpy f this deed is included in Exhibit 2. Subject is nt actively marketed fr sale at this time, and n purchase cntracts are reprtedly pending. 5 Appraisal Institute, The Dictinary f Real Estate Appraisal, Fifth Editin (Chicag: Appraisal Institute, 2010) 123.

11 8 XVI. CURRENT OCCUPANCY AND LEASES IN EFFECT Prperty is presently ccupied by XXXX. A nn-arm s lease is in place, subject t the fllwing terms: Term Cntract Rent (yrs.) Per Year Per Mnth Per Sq.Ft. 01/01/01 10,683 XXXX XXXX XXXX XXXX XXXX Nne Lease Date Leased Area N ther knwn lease agreements are in effect. Tenant Expenses Renewal Optins

12 9 XVII. REGIONAL AND COUNTY ANALYSIS ***Insert Area Map Reginal and Cunty Defined: Subject is lcated in the Twn f XXXX, just utside the City f XXXX, the largest metrplitan area in XXXX New Yrk. These municipalities, in additin t the Twns f XXXX, XXXX, and XXXX, include apprximately 84% f the ffice and industrial base within XXXX Cunty. Fr this reasn, emphasis will be placed n these five areas in my evaluatin f the Cunty and Regin. In accrdance with my analysis f the factrs that influence the regin and cunty, this sectin will be brken dwn int fur main categries Ecnmic, Gvernmental, Scial, and Envirnmental. Refer t each fr further discussin. Office/Industrial Value Levels: Statistics in the table t the right are based n inventry data maintained by LANDATA 6 fr select prperty classes and areas thrugh 2000 (thrugh July). Price trends since 1995 are incnclusive, as mdest increases in Median Sale Prices are mre than ffset by declines n a Median/Sq.Ft. basis. ECONOMIC ANNUAL PRICE CHANGES FOR SELECT PROPERTY CLASSES Year Number Of Sales Median Sale Price Median Price/Sq.Ft. Average Annual Change Sales activity has been reasnably strng since ( ) 15.7% 2.8% -2.3% 1996, mirrring an imprvement in rental rates (see Neighbrhd Analysis). Median Size Median Year Built , , , , , , , , , , , , Cmpund Annual Change ( ) 14.6% 0.4% -4.8% 6 LANDATA Infrmatin Services, Inc. Rush, NY

13 10 Building Permit Data: BUILDING PERMITS FOR SELECTED TYPES & AREAS 7 Year Nn-residential building permits are nt cnsistently maintained by the Cunty and were nt available fr this analysis. Hwever, residential statistics were and are useful in characterizing the relative health f an ecnmy As shwn, building permits , Cuntywide have imprved dramatically * , ver the last five years. The perid f the mid-1990s was affected by the Cmpund Annual Change clsure/dwnsizing f several large ( ) 46.1% 18.5% 8.7% 8.1% manufacturers (i.e. General Mtrs, Average Annual Change General Electric) and the resulting ( ) 174.6% 69.9% 12.5% 8.1% ppulatin decline (see Scial sectin). * Annualized based n data frm Jan.-Nv. This in turn led t an versupply f husing units, negatively impacting the residential real estate market frm bth a new cnstructin and resale standpint. Majr Emplyers: Twn f XXXX XXXX Cunty Ttal 1-Fam. Ttal 1-Fam Althugh emplyment has been stable ver the last fur t five years, the XXXX area experienced the departure/dwnsizing f several large emplyers (i.e. General Electric, General Electric, and Fay s). This created a gd deal f versupply f ffice and industrial space, which has nly recently been absrbed. TOP TWELVE EMPLOYERS IN Emplyer 2000 SUNY Upstate Medical 4,851 Carrier Crpratin 4,180 Syracuse University 3,898 New Venture Gear 3,508 St Jseph's Hspital 3,300 Niagara Mhawk 2,750 Wegman's 2,104 Cruse Hspital 2,018 Lckheed Martin~ 2,000 The Penn Traffic Cmpany 1,925 United Parcel Service 1,592 Bell Atlantic 1,250 Ttal Emplyed 35,376 7 Surce: XXXX Cunty Planning Department 8 Business Recrd and XXXX Chamber f Cmmerce

14 11 Unemplyment Rates: UNEMPLOYMENT RATES Nt Seasnally Adjusted Year Twn f XXXX XXXX Cunty New Yrk State United States Fr all fur areas surveyed, unemplyment rates 9 have been n a steady dwnward trend since Bth XXXX Cunty (green) and Twn f XXXX (red) statistics are belw Federal and State levels. Althugh lw unemplyment is widely believed t be desirable, it des have its shrtfalls. Labr shrtages and upward pressure n wages has reprtedly hurt the expansin pssibilities f lcal emplyers. Emplyment Breakdwn: As shwn in this table, the largest emplyment sectr is the service industry (81% f wrkfrce). This is nt unlike many ther XXXX New Yrk cmmunities, but the lng term effects f a service-based ecnmy is nt cnducive t the expansin f the existing industrial base. EMPLOYMENT BY INDUSTRY XXXX MSA 10 (XXXX Cunties) OCT 2000 % f Wrkfrce OCT 1999 Change OCT 1991 Change Manufacturing % % % Durable Gds % % % Nndurable Gds % % % Cnstructin & Mining % % % Transprtatin & Public Util % % % Whlesale & Retail Trade % % % Finance, Ins., & R.E % % % Services % % % Gvernment % % % Ttal Wrkfrce % % Number Emplyed: Cncurrent with significant declines in unemplyment, the number emplyed has actually increased 2.4% in the last 12 mnths (+8,600 jbs), and 7.3% ver the last decade (+26,600 jbs). These gains have bth taken place despite ppulatin declines f 14,500 peple with the XXXX MSA since It seems paradxical that ttal emplyment is expanding in the midst f a ppulatin decline (see Scial sectin). This explains why unemplyment rates in the Cunty are abut half f the s called natural unemplyment rate f 6%

15 12 GOVERNMENTAL Cmparative Tax Rates 11 : Equalized real estate tax rates have been very stable in all five study areas. Fr mst f the last six years, the City f XXXX has been the mst expensive municipality, but after cnsistent annual reductins, XXXX nw has that distinctin. XXXX is third, while XXXX and XXXX are at the bttm f the range. EQUALIZED TAX RATES FOR SELECT AREAS Annual Change XXXX $32.79 $32.62 $34.18 $33.15 $33.51 $ % XXXX % XXXX % XXXX % XXXX % Miscellaneus Services: Plice and fire prtectin are within clse prximity and cnsidered adequate. Primary and secndary educatinal systems are highly rated relative t ther areas f the State. Ppulatin Densities 12 : While ppulatin grwth has barely been psitive in the State ver the last decade (+0.1%), XXXX Cunty and XXXX have fared wrse (-0.3% and 0.0%, respectively). Since its peak in 1993, nearly 18,000 fewer peple live within the Cunty, the majrity f which (80%) nce resided in the City f XXXX and the fur twnships surveyed. The lss/dwnsizing f several large emplyers cmbined with favrable emplyment Change frm Previus Year SOCIAL ANNUAL POPULATION GROWTH Selected Areas pprtunities in the Suth and Midwest, have negatively affected ppulatin trends and the ptential fr grwth within the regin. Year New Yrk State XXXX Cunty Twn f XXXX 11 Surce: NYS Office f Real Prperty Services 12 Surce: US Bureau f the Census (raw data nly) graph generated by appraiser

16 13 Husing Statistics: Althugh these statistics are related t the single-family residential market, a direct crrelatin exists between these and nnresidential price trends. This is because the same factrs that enhance the residential market (i.e. stable/imprving emplyment base, favrable interest rates, gd lcal/reginal ecnmy, etc.) psitively affect cmmercial and industrial prperty classes. This direct relatinship is als true with negative factrs such as: higher interest rates and inflatin, emplyment ersin, etc. In the areas surveyed, prices have ( ) 5.1% -0.9% 4.2% 1.5% generally remained stable t slightly decreasing since Hwever, ne sign that appreciatin is likely in the near term is the imprvement in the number f transfers. As listing inventries diminish, supply and demand factrs shuld result in higher single-family prices. Land Areas: ENVIRONMENTAL ONE-FAMILY RESIDENTIAL SALE STATISTICS MULTIPLE LISTING SERVICE Twn f XXXX XXXX Cunty Sales Avg. Price Sales Avg. Price 1995 XXXX XXXX 3,746 97, XXXX XXXX 3,791 98, XXXX XXXX 3, , XXXX XXXX 4, , XXXX XXXX 4, , XXXX XXXX 4, ,900 Cmpund Change: LAND AREAS FOR RELEVANT MUNICIPALITIES 13 Sq. Miles Acreage XXXX Cunty XXXX XXXX XXXX MSA XXXX XXXX XXXX XXXX XXXX Climate: Gegraphy: SUMMARY STATISTICS FOR CLIMATE IN XXXX COUNTY 14 Mean Temperatures January April July September Average Snwfall Average Rainfall 24 F 46 F 71 F 62 F Gelgically 15, XXXX Cunty is characterized by rlling hills and flat plains. Altitudes range frm 364 t 681 with an average elevatin f XXXX Chamber f Cmmerce, Cmmunity Guide t XXXX 2000/2001, 2000, XXXX Chamber f Cmmerce, XXXX Chamber f Cmmerce, XXXX, New Yrk Fact Sheet, 2000.

17 14 Majr Arteries/Transprtatin: XXXX Cunty is lcated at the intersectin f tw majr New Yrk State interstates I-XX (east-t-west) and I-XX (nrth-t-suth). Other majr thrughfares include: Interstate Rute XX; NYS Rutes XX, XX, XX and XX; and US Rute XX. Nrth-t-suth rutes cnsist f NYS Rutes XX, XX, and XX, and US Rute XX. XXXX Internatinal Airprt prvides bth freight and passenger air travel, while CSX (freight) and Amtrak (passenger) supprt rail service. Cnclusin: As shwn by the data in this sectin, the XXXX area has: a gd gegraphic lcatin, excellent infrastructure, a diverse emplyment base, lw unemplyment, and a stable tax base. The lss f several large manufacturers with ensuing ppulatin declines, and a shift in the emplyment base created an versupply f space acrss the entire real estate sectr, negatively affecting appreciatin rates and rent levels until The perid that fllwed was a stabilizatin f srts, as the ppulatin and lcal ecnmy retrenched t prepare fr grwth, r at least the prspects f which. Perhaps ptimistically, I believe that is where the real estate market is at present, n the cusp f slw, stable grwth.

18 15 XVIII. NEIGHBORHOOD ANALYSIS Neighbrhd Map Overview: ***Insert Street Atlas map Neighbrhd Map Aerial View: ***Insert Aerial Map Neighbrhd Bundaries Defined: ***Insert Neighbrhd Tax Map As shwn by the tax map (left), neighbrhd is bunded by XXXX Avenue t the west, residential land uses t the suth, XXXX t the east, and the CSX railrad crridr t the nrth. Other industrial neighbrhds exist t the nrth and west, but their underlying character is sufficiently different s that they are nt cmplementary (i.e. aut repair, trailer park, different life cycle, etc,). Histry: Neighbrhd was mstly develped in the mid-1950s t early-1960s fr light manufacturing and industrial distributin purpses. Fr all intents and purpses, underlying land uses are still cnsistent with what they were riginally intended. Hwever, highly accessible rail service, the primary reasn fr the neighbrhd s being, is n lnger a pririty amng the varius businesses. The siding that traverses the center f the district (see aerial map) is n lnger functinal, but given the shift t trucking, this is nt cnsidered a detriment t value/marketability. Lcatin and Accessibility: Relative t ther industrial areas, subject s lcatin ff XXXX Avenue is nt cnsidered prime. Interstate access is nt highly cnvenient and peripheral uses include incmpatible uses such as: an aging residential neighbrhd, cemetery, and trailer park. The main access rute is XXXX Avenue, a tw- t fur-lane thrughfare that cnnects the neighbrhd with Interstates 81 and 90 (via XXXX Street) t the suth and the XXXX (via XXXX) t the nrth. Zning District and Intent: ***Insert Zning Map

19 16 Entire neighbrhd, including subject, is zned XXXX District (XX). As described in the rdinance, (t)he intent f this district is t prvide areas, near r adjacent t highways designed t handle large vlumes, fr industrial heavy cmmercial and ther use which are nt generally cmpatible with uses permitted in ther districts r which are nt therwise permitted in this chapter. 16 Permitted uses range frm ffices t heavy manufacturing. Exclusive f certain bulk requirements, it appears that the neighbrhd cnfrms t this district. Relevant zning sectins are included in Exhibit 3. Ownership/Sale Histry: RELATIVE SUPPLY FOR INDUSTRIAL CLASS 5,000 TO 19,999 SQ.FT. 17 Year Vacancy Indicatr 1995 Mderate Shrtage 1996 Mderate Shrtage 1997 Substantial Shrtage 1998 Substantial Shrtage 1999 Substantial Shrtage Owner Ownership Date Sale Price XXXX 02/02/84 N/A XXXX 09/26/50 N/A XXXX 09/26/50 N/A XXXX 10/11/55 N/A XXXX 09/01/74 N/A XXXX 04/01/86 N/A XXXX 09/01/74 N/A XXXX 08/10/89 N/A XXXX 07/16/87 N/A XXXX 5/ XXX/00 XXXX XXXX 06/08/90 N/A XXXX 05/17/96 $0 XXXX 10/01/99 XXXX Average Ownership 21 years The neighbrhd is highly stable with nly three transfers within the last five years (ne nn-arm s length). Lw turnver cntributes t a stable and predictable tenancy, but cmplicates analysis f market vacancies, value trends, etc. Cnsequently, market surveys cnducted by SIOR (see belw) and my wn bservatins prvide supprt fr vacancy assumptins in the valuatin sectins. 16 Twn f XXXX, Zning frm the XXXX (XXXX Cunty: Twn f XXXX) XXXX. 17 Sciety f Industrial and Office Realtrs.

20 17 Office/Industrial Vacancy Levels Overall Market 18 : 16.00% 14.00% 12.00% 10.00% 8.00% 6.00% 4.00% 2.00% HISTORICAL VACANCY RATES IN XXXX AREA Select Prperty Classes Year The drp in vacancy rates has been a precipitus ne fr Class B Office Nn-CBD. Even at such lw vacancies and the general acknwledgement f undersupply (see fllwing table), little new cnstructin has resulted. Tighter financing requirements instituted after the last cnstructin bm is cnsidered primarily respnsible. Class B Nn-CBD Industrial In the last tw years, a number f build-t-suit prjects have taken place, with mre expected in the cming years. Hwever, it des nt appear t be at levels that culd result in higher verall vacancies r cause dwnward pressure n rents. Office/Industrial Rent Levels Overall Market 19 : Grss Annual Rent RENTAL RATES FOR OFFICE/INDUSTRIAL Years As shwn (left), market rents (n a grss basis) fr suburban ffice and industrial space have been stable t increasing since Despite perceived shrtages, demand has nly been sufficient in the last three years t psitively effect rents. This undubtedly cntributed t the lack f new cnstructin ver the last five years. Industrial (5,000-19,999 sf) Suburban Office B Occupancy Rates and Histry Neighbrhd: A current survey f the neighbrhd indicates that all prperties are mstly wner ccupied, excepting a land lease invlving the largest tenant, XXXX. Aside frm a change in wnership f XXXX, neighbrhd tenancy has nt changed. 18 Sciety f Industrial and Office Realtrs, Cmparative Statistics f Industrial and Office Real Estate Markets (New Yrk: Landauer Real Estate Cunselrs) , varius pages. 19 Sciety f Industrial and Office Realtrs, Cmparative Statistics f Industrial and Office Real Estate Markets (New Yrk: Landauer Real Estate Cunselrs) , varius pages.

21 18 Age and Cnditin f Imprvements: The average age f building imprvements appraches 40 years. Sme structures are shwing their age, exhibiting varius minr items f deferred maintenance (i.e. exterir pinting/painting needed), but all defects are curable within market parameters. Life Cycle: The fur stages f a neighbrhd s life cycle are: Grwth, Stability, Decline, and Revitalizatin. Given the lng-term ccupancy and extremely lw vacancies discussed in this sectin, subject s neighbrhd is classified as stable. N changes are anticipated in the near term. Neighbrhd Density: Ideal land-t-building ratis fr industrial prperties are 4:1. The neighbrhd as a whle falls shrt f this standard, averaging 3:1. Since this rati is indicative f the expansin pssibilities, available parking, exterir strage, etc., this culd ptentially affect value. Financing Surces and Current Rates: The fllwing lender survey was cnducted fr current mrtgage terms and rates: RATE/TERM SURVEY AMONG ACTIVE FINANCIAL INSTITUTIONS FEBRUARY XXXX Lender Max. LTV Interest Rate Term (yrs.) Target DCR Ntes BSB Bank & Trust 75% 8.5% fixed Yr. Call M&T 80% 5 Yr.Treas %-3.25% Yr. Call HSBC 75% Prime + 1%-2% Yr. Call Key Bank 80% 5 Yr.Treas %-3.5% Yr. Call Slvay Bank 75% 5 Yr.Treas %-3.25% Yr. Call CURRENT INTEREST RATES 20 Federal Funds 5.54% Survey indicates interests rates ranging frm 7.16% t Bank Prime 9.00% 11.00% fr fixed rate mrtgage terms. Hwever, interest rates belw 8.00% were unexpected and prbably nt representative 3-Yr. Treasuries 4.57% f actual fferings t prspective applicants. 5-Yr. Treasuries 4.66% 10-Yr. Treasuries 4.93% 30-Yr. Treasuries 5.41% Mdy's Aaa 7.08% Mdy's Baa 7.92% State & Lcal Bnds 5.09% Cnventinal Mrtgages 7.07% 20

22 19 Availability f Utilities: Given the age and type f neighbrhd (i.e. industrial), public utilities are assumed t be f sufficient capacity and availability. Cnclusin: The cnstructin and utility f neighbrhd prperties are very typical f its 1960s vintage. Light manufacturing and warehuse/distributin uses resulted frm its lcatin n a majr rail line, which is nw defunct. This is nt cnsidered as a detriment, hwever, given the shift t trucking as the primary frm f distributin. Althugh the neighbrhd is smewhat remved frm Interstates XX, XX, and XX, it has been very stable with little vacancy r change in tenancy. Land-t-building ratis are less than ideal, but the imprvements and the lng-term ccupancy des nt appear t be negatively affected. Overall, the neighbrhd s stability is expected t cntinue, with little change in use r tenancy expected.

23 20 XIX. TRENDS IN REAL ESTATE PRICES, RENTS AND MARKETING Ideally, sales and lease data emplyed in a market value estimate wuld be very recent, ideally within six mnths f the date f appraisal. Hwever, this market is f insufficient size t generate the amunt f infrmatin required in this time frame. Cnsequently, in rder t identify and quantify trends when cmparables are lder, multiple surces are referenced that are either directly r indirectly tied t real estate. Refer t the fllwing: Sale & Resale f Cmparable Prperties: Insufficient sale/resale data was available t extract meaningful trends. Aggregate Trends f Cmparable Prperties: As shwn in the Reginal and Cunty Analysis, median price changes ranged frm 4.8% t +2.8% since In general, these statistics indicate stabilizatin in prices ver the last three t fur years. Sales activity has imprved dramatically since 1996, signaling that price appreciatin may nt be far away. New Yrk State Equalizatin Rates 21 : NYS EQUALIZATION RATES ( ) Year Rate Equalized Dllar Change 1995 XXXX % 1996 XXXX % 1997 XXXX % 1998 XXXX % 1999 XXXX % 2000 XXXX % Cmpnd Annual Change 0.5% assessments frm 1998 r The functin f an equalizatin rate is t adjust municipal assessments t full value. They are cmputed by the New Yrk State Office f Real Prperty Services and can be utilized t measure changes in aggregate real estate prices. Hwever, cautin is advised in the strict interpretatin f the data s cnclusins because: 1) the frmula used in the develpment f rates is nt exclusively based n transfers (i.e. als weights the largest assessed values within the municipality); and 2) a lag exists in their reprting prcess s that the indicated rate fr 2000, fr example, is derived frm sales and MLS Statistics Residential: Single-family sale statistics fr the Twn f XXXX and XXXX Cunty, were included n page 13 in the Reginal and Cunty Analysis sectin. Based n this infrmatin, residential prices declined 0.9% annually in the Twn f XXXX, while the Cunty nly managed a slight increase f 1.5% since

24 21 Althugh there is little slace with annual appreciatin rates less than cnsumer prices, sales activity has imprved cnsiderably, and is at, r near, decade highs. Indirect Indicatrs: Trend statistics based n cnstructin csts and cnsumer prices are indirectly invlved and nly peripherally relevant in identifying trends in real estate. The graph (right) depicts annual changes in the Building Cst Index 22, published by Marshall & Swift (Class C), and the Cnsumer Price Index 23 (all urban areas; base year ). Over the last decade and five-year perids, the frmer yields annual cmpund trends f 2.7% and 3.1%, while the latter amunts t 2.7% and 2.4%. Cnclusin: Change frm Previus Year Annual Changes in BCI and CPI Indices Year Building Cst Index-Nv. Cnsumer Price Index-Oct Trends fr last 5 years Sale/Resale Data Insufficient Data Aggregate Trends Office/Industrial Stable NYS Equalizatin Rates Stable MLS Statistics Stable t Slightly Decreasing Building Cst Index Slightly Increasing Cnsumer Prices Slightly Increasing is applicable between 1997 and The five available data surces revealed a mixed picture. Aggregate Office/Industrial trends are the mst relevant in estimating price changes, with equalizatin rates and MLS statistics nly as a secndary guide. Based n this infrmatin, n change in price As far as rentals are cncerned, I als recncile at n change between 1997 and 2001 (n a net basis). A survey in the Neighbrhd Analysis des shw an increase ver the last several years, but the analysis was based n grss rents. Annual increases ranging frm 2% t 5% are typical with grss leases, but this essentially cvers expense escalatins and is nt attributable t the base rent. Expsure Time/Marketing Perid: Subject s expsure time, defined as (t)he estimated length f time the prperty interest being appraised wuld have been ffered n the market prir t the hypthetical cnsummatin f a sale at market value n the effective date f appraisal; a retrspective Pg Marshall & Swift, L.P., Marshall Valuatin Service, (Ls Angeles: Marshall & Swift, ) Sect

25 22 estimate based n an analysis f past events assuming a cmpetitive and pen market 24, is estimated at ne year based n available cmparable data. Marketing time is (a)n pinin f the amunt f time it might take t sell a real r persnal prperty interest at the cncluded market value level during the perid immediately after the effective date f an appraisal 25. Based n current market cnditins, a marketing perid f ne year is prjected. 24 Appraisal Institute, The Dictinary f Real Estate Appraisal, Fifth Editin (Chicag: Appraisal Institute, 2010) Appraisal Institute 121.

26 23 XX. ASSESSMENT AND TAXES ANALYSIS ***Insert Tax Map Dates f Interest: TOWN OF XXXX 2001 ASSESSMENT ROLL DATES Fiscal Year Dates 1/1/ /31/2001 Valuatin Date 1/1/2001 Taxable Status Date 3/1/2001 Tentative Rll Date 5/1/2001 Grievance Day 5/22/2001 Final Rll Date 7/1/2001 Tax Map Identificatin, Current Assessment, and Equalized Value: Tax Map # Real Estate Tax Liability: Cnclusin: 2001 ASSESSMENTS Land Imprvements Ttal Taxable Eq. Value XXXX XXXX XXXX XXXX XXXX XXXX Year Twn & Cunty Years N. Syracuse Schl Ttals 2001 XXXX XXXX XXXX Subject is slightly ver-assessed based n my market value estimate, but certainly within the range indicated by the valuatin appraches utilized. Hwever, based n a purchase price f XXXX in XXXX 2000, the wner has the right t request an assessment reductin.

27 24 XXI. SITE DATA AND ANALYSIS ***Insert Site/Building Sketch Size: Access: Frntage: Sil Cnditins/Drainage: Tpgraphy: Shape: Utilities: Public Water Natural Gas Sanitary Sewers Strm Sewers Electricity Street Imprvements: Easements/Encrachments: Ac.; 29,394 sq.ft. Curb cuts alng bth frntages; reasnably sized fr tw-way traffic XXXX; 152,81 f.f. XXXX Street: f.f. Adequate Mstly level with slight grade change alng XXXX Street; site is 0 t 3 belw grade Essentially rectangular; nt detrimental frm a valuatin standpint Yes; sufficient capacity Yes; sufficient capacity Yes; sufficient capacity Yes; sufficient capacity and lcatin Yes; sufficient capacity Tarvia surface, lighting; n sidewalks r curbing Easements, cvenants, and restrictins f recrd; n unusual items nted Fld Zne Classificatin: ***Insert Fld Map FEMA Panel # Effective Date: Zne Wetland Classificatin: XXXX XXXX C; utside 100-year fld plain; fld insurance nt required Nt designated by either State r Federal Agencies Zning Designatin: *** Insert Zning Map Uses Permitted Offices, research and testing centers, data prcessing centers, light manufacturing and prcessing, warehusing

28 25 facilities, whlesale distributin centers, utility facilities, municipal, state and federal airprts, daycare centers, lumber/building supply cmpanies, cnstructin cmpanies, truck terminals, bulk strage (with sme exceptins), heavy manufacturing Uses By Special Permit Transitin parking areas, utdr theaters, utility service facilities, cemeteries, animal hspitals and kennels, sanitary landfills, junkyards, autmtive graveyards, crematries, slaughterhuses, rendering plants, autmtive repairs and service (indrs), mtr vehicle bdy repair services facilities; all uses nt specifically identified as permitted r prhibited uses herein 26 Minimum Lt Area 20,000 sq.ft.; existing is 29,394± sq.ft. Minimum Lt Width 100 ; existing is 150 Maximum Lt Cverage 50%; existing is 18% Minimum Frnt Yard Setback 50 ; existing is Minimum Side Yard Setback 20 n each side; existing is 21 t 46 Minimum Rear Yard Setback 20 ; existing is Maximum Building Height 45 ; existing is 22 On-Site Parking Requirement 1 space fr every 200 sq.ft. f ffice area r 42 ttal; existing is 37 spaces Site Imprvements: Asphalt parking and access, cncrete curbing and sidewalk, lawn area, mature plantings Site Data and Analysis Cnclusin: Appraised site is adequate fr industrial ffice use. Physically, its tpgraphy, shape, access, etc., are cnducive fr develpment, as evidenced by its current use. Hwever, it is smewhat undersized, limiting expansin pssibilities and accessry usage. It is cnsidered a ptential surce f functinal bslescence, as subject s land-t-building rati f 2.8:1 is inferir t ideal densities f 4:1. Refer t the Highest and Best Use sectin fr further discussin n this tpic. 26 Twn f XXXX, Zning frm the XXXX (XXXX Cunty: Twn f XXXX) XXXX.

29 26 XXII. IMPROVEMENT DATA AND ANALYSIS??? Insert building sketch Imprvement Type: Stries: Industrial Office One- and tw-stries; 51% f ttal area n secnd flr Grss Building Area: 10,683 sq.ft. (per XXXX Architects, P.C.) Office Allcatin 8,322 sq.ft.; 78% Warehuse Allcatin 2,361 sq.ft.; 22% Basement: Year Cnstructed: Nne 19XX; last renvated 19XX Actual & Effective Ages: XX years; XX years effectively 27 Fundatin: Frame: Rf: Exterir: Windws: Interir Partitining: Finished Areas Warehuse/Strage Ceilings/Lighting: Finished Areas Warehuse/Strage Flr Cverings: Cmmn Areas Offices Bathrm Facilities Reinfrced cncrete Split-faced cncrete blck and steel Flat; built-up cmpsitin (riginal) Cncrete blck and painted cedar clapbard facia Fixed; aluminum framed; insulated glass (riginal) Metal/wd studs; gypsum bard; papered, painted, vinyl cvering Minimal partitining; plywd/unfinished gypsum cvering Standard and textured acustical tile (suspended) and painted gypsum bard; verhead flurescent and recessed incandescent lighting Taped, unpainted gypsum bard with verhead flurescent lighting Wall-t-wall carpeting; vinyl sheet; slate Wall-t-wall carpeting Ceramic tile 27 Weighted average f lng- and shrt-lived building cmpnents

30 27 Warehuse/Strage HVAC: Finished Areas Warehuse/Strage Plumbing: Bathrm Fixtures Water Heater Electrical Service: Security/Fire Prtectin: Elevatr: Warehuse Features: Grade Level Overhead Drs Dckage Ceiling Heights Cncrete Tw gas-fired Carrier rf munted package units (installed 19XX and 19XX); supplemental electric basebard Tw gas-fired Carrier space heaters with 80 btu/hr. capacity; ceiling munted Ten fixtures included within fur restrms (tw n each level) Master Plumber 40-galln electric water heater 400 amp. three-phase, fur wire Wet sprinkler system thrughut Nne (Twn nn-cmpliance) One; 10 x 10 ; nn-electric; insulated steel dr One; 8 x 8 ; insulated steel dr; nn-electric; includes leveler and bumpers 9 (12 curse; 8 blck) Imprvement Data and Analysis Cnclusin: Building is well suited fr industrial ffice usage. Layut is functinal, cnsisting mainly f perimeter ffices and large interir wrkspaces. Finishes are f average quality and are abut three quarters thrugh their ecnmic life. Secnd level is smewhat uncharacteristic f this prperty class, but was necessary due t the limited site area. As discussed in the Site Data and Analysis, the imprvement is nt in cmplete cmpliance with existing parking requirements (i.e. 5 fewer parking spaces than what is required) and the lack f an elevatr (required in new cnstructin). This results primarily frm its site size, which des nt permit fr either parking lt r building expansin. I am inclined t believe this results in functinal bslescence refer t the Cst Apprach fr further discussin.

31 28 XXIII. HIGHEST AND BEST USE ANALYSIS Definitin: The reasnably prbable and legal use f vacant land r an imprved prperty that is physically pssible, apprpriately supprted, financially feasible, and that results in the highest value. The fur criteria the highest and best use must meet are legal permissibility, physical pssibility, financial feasibility, and maximum prductivity. 28 Intrductin: A highest and best use analysis examines the ptimum use f the site as vacant, and then, if imprved, whether the existing structure is ideal given the fur criteria utlined abve. Determinatin f what cnstitutes the ptimum land use r ideal structure is based largely n the preceding sectins t draw a cnclusin. Current zning and present site characteristics, discussed in the Site Data and Analysis, identify what uses are legally permitted and physically pssible. Market frces, described in the Reginal and Cunty Analysis and Neighbrhd Analysis, impact what prperty uses are financially feasible and mst prfitable. Once this infrmatin is studied, and a highest and best use determined, the subsequent sectins are based n cnclusins reached here t estimate value. A basic premise f highest and best use is that the site (as thugh vacant) and the prperty as imprved, require separate analysis. One reasn fr this is that the tw use cnclusins may differ frm ne anther. If this is the case, then the value f the site (less demlitin) at its highest and best use is cmpared t the prperty as imprved. If the frmer exceeds the value f the latter, the highest and best use f the ttal prperty is fr demlitin f the existing imprvements and eventual redevelpment. Site As Thugh Vacant: Highest and best use f land r a site as thugh vacant assumes that the parcel f land is vacant r can be made vacant by demlishing any imprvements" 29 Althugh subject is presently imprved, it is necessary t evaluate the highest and best use f the land fr valuatin purpses. The fur criteria that must be met t analyze highest and best use are: Legally Permissible: Subject's XXXX zning allws fr a variety f light and heavy industrial uses, as well as ffice buildings. N private restrictins f any kind were nted, nr were any substantive encumbrances besides thse related t utilities. Industrial ffice develpment is legally permitted. Single- and multi-family residential, agricultural, and high 28 Appraisal Institute, The Dictinary f Real Estate Appraisal, Fifth Editin (Chicag: Appraisal Institute, 2010) Appraisal Institute.