Appraisal Report acres composed of 10 Industrial Zoned Lots in the Riverbend Commerce Park, Post Falls, ID CVG

Transcription

1 Appraisal Report acres composed of 10 Industrial Zoned Lots in the Riverbend Commerce Park, Post Falls, ID CVG

2 Real Estate Appraisers and Consultants 1410 Lincoln Way, Suite 200 Stanley D. Moe, MAI Coeur d'alene, ID (208) Fax (208) North Idaho College Attn: Carol A. Jones 1000 W. Garden Avenue Coeur d Alene, ID June 16, 2015 RE: Appraisal of acres comprised of 10 industrial lots in The Riverbend Commerce Park, Post Falls, Kootenai County, ID Our File No. CVG Dear Ms. Jones: As requested we have completed an inspection and appraisal of the above referenced real estate. The appraised property consists of 10 industrial zoned building lots, none of which have buildings improvements, ranging in size from 0.71 to 2.38 acres. The combined 10 lots total acres. Each site is located between Interstate 90 (north) and the Spokane River (south) in the Riverbend Commerce Park development. Access is off either the Beck Road or Pleasant View Road interchanges on the west end of Post Falls, ID. The appraisal process utilized in the performance of this appraisal assignment is intended to meet the requirements defined by the Appraisal Standards board of the Appraisal Foundation. This appraisal report is intended to comply with the reporting requirements set forth under Standards Rule 2-2 of the Uniform Standards of Professional Appraisal Practice (USPAP) performed under Standard 1.

3 North Idaho College Page 2 of 2 The appraisal problem was to estimate the current market value of the subject property defined as Value to Single Purchaser. To reach our value conclusion we have first estimated values for each individual site. At current market value we estimate it would require thirty (30) months for the market to absorb all 10 lots. Therefore, we have discounted future sales recognizing that the present value of a cash payment to be received in the future is less than the same payment if it were received today. Discounting is necessary because of the risks and cost of capital borne by a purchaser of the property today. SUMMARY OF CONCLUSIONS PROSPECTIVE GROSS SALES FROM 10 DEVELOPED BUILDING LOTS $1,564,000 Within in a range of $108,000 to $311,000 PROSPECTIVE VALUE TO A SINGLE PURCHASER $1,244,000 Discount for Wholesale Purchase: 21.42% DATE OF VALUE: June 15, 2015 Thank you for the opportunity to be of service. If you have any questions pertaining to the attached report, or if we can be of further assistance, please let me know. Respectfully submitted, Stanley D. Moe, MAI Idaho Certified General Appraiser #072

4 Table of Contents Letter of Transmittal Table of Contents Summary of Salient Facts...1 Appraiser Certification...3 Assumptions and Limiting Conditions...4 Subject Property Photos...6 Definition of the Appraisal Problem...9 REGIONAL, AREA, AND NEIGHBORHOOD DATA Regional and Area Data...13 Neighborhood Description...22 Market Conditions...25 Site Description...27 Highest and Best Use...30 VALUATION SECTION Introduction...33 Value of Developed Lots, Sales Comparison Approach...35 Value to Single Purchaser...40 Reconciliation and Value Conclusions...45 ADDENDA

5 SUMMARY OF SALIENT FACTS Subject Property 10 developed industrial zoned lots totaling acres (see below) Present Use Vacant building lots Net Land Area acres (see below) Highest and Best Use Commercial Development Zoning Industrial, City of Post Falls Ownership Interest Appraised Fee Simple Estate Values Estimated Value to a Single Purchaser Date of Valuation June 15, 2015 Date of Last Inspection June 15, 2015 Date of Report June 16, 2015 Parcel Number Square Acreage Footage P A ,780 P ,626 P ,542 P ,059 P ,376 P ,462 P ,509 P ,028 P ,797 P ,797 Page 1

6 Property Appraised MARKET VALUE CONCLUSIONS 10 Lots in the Riverbend Commerce Park Post Falls, ID Value Conclusions GROSS SALES FROM 10 DEVELOPED BUILDING LOTS $1,564,000 VALUE TO A SINGLE PURCHASER Wholesale Purchase Discount: 21.42% $1,244,000 Page 2

7 I certify that, to the best of my knowledge and belief: APPRAISER CERTIFICATION 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. 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 the Standards of Professional Appraisal Practice of the Appraisal Institute, which include the Uniform Standards of Professional Appraisal Practice. I have no present or prospective interest in or bias with respect to the property that is the subject of this report, and I have no personal interest or bias with respect to parties involved. I have performed no services, as an appraiser or in any other capacity, regarding the property that is the subject of this report within the three-year period immediately preceding acceptance of this assignment. My compensation for completing this assignment is not contingent upon the reporting of a predetermined value or direction in value that favors the cause of the client, the amount of the value estimate, 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 Appraisal Practice promulgated by the Appraisal Institute. Stanley D. Moe made a personal inspection of the property that is the subject of this report and supervised the research and report writing functions. Jonathan Branson, registered trainee with, Inc. provided significant professional assistance to the person signing this report in the form of taking photographs, research, and report preparation. The final conclusions as to value are my own. The use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representatives. This appraisal assignment was not based on a requested minimum valuation, a specific valuation, or approval of a loan. The appraiser is competent and qualified to perform this appraisal assignment. As of the date of this report, Stanley D. Moe has voluntarily completed the requirements of the continuing education program of the Appraisal Institute. Date: June 16, 2015 Stanley D. Moe, MAI, Idaho Certified General Appraiser #072 Page 3

8 ASSUMPTIONS AND LIMITING CONDITIONS The general assumptions and limiting conditions listed below are critical to the analyses and conclusions contained in this report. The value(s) reported are subject to the following assumptions and limiting conditions: a. That the appraiser has inspected as far as possible by observation the land and that the improvements; however, it was not possible to personally observe conditions beneath the soil or hidden structural defects or toxic materials which would render it more or less valuable. No responsibility is assumed for any such conditions or for any engineering expertise to discover them. All mechanical components are assumed to be in operable condition and status standard for properties of the subject type. The appraiser does not warrant against problems arising from soil conditions, including toxic wastes. b. That the legal description as given is assumed correct. No survey or search of title to the property has been made for this report and no responsibility is assumed for such matters including encumbrances, ownership, etc. The property is appraised in fee simple estate as though free and clear of all encumbrances, except as specifically noted within this report. c. That the data, statistics, and opinions furnished by others and contained herein have been reasonably checked and are considered reliable and correct. No responsibility for their accuracy is assumed by the appraiser. If errors or omissions are subsequently found which may directly affect the information and/or conclusions offered in this report, the appraiser reserves the right to modify or correct such errors, omissions and conclusions. d. That this appraisal has been made in accordance with the rules and regulations of professional ethics as set forth by the Appraisal Institute. e. That possession of this report or any copy thereof does not carry with it the right of publication nor may it be used for other than its intended use. The bylaws and regulations of the Appraisal Institute requires each member and candidate to control the use and distribution of each appraisal report; except the client may distribute copies of this appraisal report in its entirety to such third parties as he may select. However, selective portions of this appraisal report shall not be given to third parties without the prior written consent of the appraiser. f. That neither all nor any part of the contents of this report shall be conveyed to the public through advertising, public relations, news, sales, or other media without first obtaining the written consent and approval of the appraiser, particularly as to the valuations, or any reference to the Appraisal Institute. g. That the liability of, Inc. is limited to the client only Page 4

9 ASSUMPTIONS AND LIMITING CONDITIONS and to the fee actually received by the appraiser. Further, there is no accountability, obligation or liability to any second or third party. If this report is placed in the hands of anyone other than the client, the client shall make such party aware of all limiting conditions and assumptions of the assignment and related discussions. h. That all maps, plans, and diagrams contained in this report are for illustrative purposes only and are not to be construed as accurate. i. That where the value of land and component or structural improvements are shown separately, the value of each is segregated only as an aid to better estimate the value which it lends to the whole parcel, rather than the value of that particular item as if it were by itself. j. That the appraisal is based on the premise that the subject property is in full compliance with all applicable federal, state and local environmental regulations and laws unless otherwise stated in this report. Improvements proposed, if any, as well as repairs required are considered for purposes of this appraisal to be completed in good and workmanlike manner according to information submitted or considered by the appraiser. In cases of proposed construction, the appraisal is subject to change upon inspection of property after construction is completed. k. That the subject property will be under prudent and competent ownership and management, neither inefficient nor super-efficient. l. That the appraiser by reason of this report, is not required to give testimony or attendance in a court of law or any other government hearing with reference to the property in question, unless prior arrangements have been made. m. The appraiser is not qualified to detect hazardous waste and/or toxic materials. Any comment by the appraiser that might suggest the possibility of the presence of such substances should not be taken as confirmation of the presence of hazardous waste and/or toxic materials. Such determination would require investigation by a qualified expert in the field of environmental assessment. The presence of substances such as asbestos, urea-formaldehyde foam insulation, or other potentially hazardous material may affect the value of the property. The appraiser's value estimate is predicated on the assumption that there is no such material on or in the property that would cause a loss in value unless otherwise stated in this report. No responsibility is assumed for any environmental conditions, nor for any expertise or engineering knowledge required to discover them. The appraiser's descriptions and resulting comments are the result of the routine observations made during the appraisal process. Page 5

10 SUBJECT PROPERTY PHOTO Aerial view of subject neighborhood with the subject property highlighted by the red arrow Additional aerial view with each of the subject lots labeled Page 6

11 SUBJECT PHOTOS View of the subject property from the intersection of Moyie Street and Lochsa Street View of the subject facing south on Moyie Street Page 7

12 SUBJECT PHOTOS Additional view of subject View facing north on St Joe Avenue Page 8

13 APPRAISAL DESCRIPTION OSTENSIBLE OWNER OF RECORD / OWNERSHIP HISTORY Each of the subject lots are owned by North Idaho College whose mailing address is 1000 W. Garden Avenue, Coeur d Alene, Idaho There has been no transfer in title within the previous three years. LOCATION The subject property is located in the Riverbend Commerce Park, north of the Spokane River in Post Falls, Idaho. Post Falls is located just east of the Idaho / Washington border approximately 10 miles west of Coeur d Alene, +45 miles south of Sandpoint, ID, and +25 miles east of the Spokane, WA CBD. PRESENT USE 10 vacant industrial building lots. All of the lots are ready for construction with site improvements completed including paved streets, sidewalks, curbs, and gutters. LEGAL DESCRIPTION 8 of the 10 lots are located in Block 4 of Riverbend Commerce Park Phase III. The remaining two lots are in Block 2 of Riverbend Commerce Park Phase II. All lots are located in Section 7, T50N, R5W, B.M., Kootenai County, ID. The parcel numbers are shown below and the complete legal description for the lots are located in the Addenda of this report. Parcel Number Lot Block Square Access Acreage Footage P A ,780 Clearwater Loop P ,626 Clearwater Loop P ,542 NWC of Moyie St & Lochsa St P ,059 Lochsa Street P ,376 Lochsa Street P ,462 Lochsa Street P ,509 Lochsa Street P ,028 Lochsa Street P ,797 St. Joe Avenue P ,797 St. Joe Avenue TOTALS Gross Size ,976 Page 9

14 APPRAISAL DESCRIPTION APPRAISAL PROBLEM The appraisal problem is to estimate the market value of the subject property in fee simple estate As Is Value of the Gross Sales and the Discounted Value to One Purchaser. INTENDED USE The function of the appraisal is to assist the Client, North Idaho College, in planning decisions. INTENDED USER The sole intended user is the Client, North Idaho College. SCOPE OF THE APPRAISAL It is the appraiser s responsibility to determine and perform a scope of work sufficient to produce credible assignment results. According to the terms of our agreement with the Client, this appraisal report has been prepared applying one or more of the three recognized approaches to value as appropriate for the property being appraised. The scope of the appraisal assignment included the following tasks: An analysis of the subject property's physical, locational, and economic characteristics An investigation and evaluation of market characteristics and trends The collection and analysis of pertinent data, including searches for comparable land and improved sales, was conducted through the data bank, assistance from other appraisers, and local real estate sources. Developing of a conclusion as to the market value of the property. In this appraisal we will develop opinions of value as to: 1. projected gross retail sales in order to provide the 2. value assuming bulk sale to one purchaser. The scope of this appraisal includes an analysis of local and regional economics, trends in the market for properties of this type, and economic forces that impact the value of properties in the Kootenai County market area. The valuation analysis outlined in this report summarizes available market data which would indicate the demand for and the value of the subject property Page 10

15 APPRAISAL DESCRIPTION in the current market environment. This data includes an analysis of land sales, current listings, prevailing appreciation trends, and any other appropriate indicators of investor and / or user attitudes toward the type of property being appraised. Our sales search was limited to Kootenai County and eastern Spokane County to avoid being influenced by non-appropriate or misleading data. This appraisal assignment employs the Direct Sales Comparison or Market Approach to Value. The Cost Approach and Income Approach have been omitted, recognizing the subject is subdivided building lots that are not purchased for their income producing capabilities, but for private use. DEFINITION OF MARKET VALUE Market value means the most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, 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 each 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 amounts or sales concessions granted by anyone associated with the sale. (OCC, 12 CFR Part 34, Subpart C, 34.42) PROPERTY RIGHTS APPRAISED The property has been appraised as if held in fee simple estate, with all rights that can be lawfully owned with the exception of the four powers which remain with the sovereign, being taxation, escheat, eminent domain, and police power (zoning), and except easements and encumbrances of record. It is assumed to possess good and merchantable title, responsible ownership, and competent management. Page 11

16 APPRAISAL DESCRIPTION UNAVAILABILITY OF INFORMATION We were not supplied with a title policy. If disclosures subsequent to the appraisal are made that would have a positive or detrimental impact on the value conclusions outlined herein, the appraisers reserve the right to alter the value conclusions. REASONABLE MARKETING PERIOD The term "marketing period" is defined by the Office of the Comptroller of the Currency as "the term in which an owner of a property is actively attempting to sell that property in a competitive and open market." For purposes of this report, the term "market period" is defined as: A normal market period is the amount of time necessary to expose a property to the open market in order to achieve a sale. Implicit in this definition are the following conditions: The property will be actively exposed and aggressively marketed to potential purchasers through marketing channels commonly used by buyers and sellers of similar types of properties. The property will be offered at a price reflecting the most probable mark-up over market value used by sellers of similar property. A sale will be consummated under the terms and conditions of the definition of market value stated in this report. The competition is plentiful and the choices to a prospective buyer are many within Kootenai County. Many of the commercial and industrial building lots on the market are not directly comparable because of size, location, amenities, utilities, neighboring uses, etc. We have attempted to develop a reasonable estimate of marketing time for the subject lots, based on past sales activity in the area and a comparison of physical attributes between the subject lots and others being offered for sale. See the Market Conditions Section of this report. DATE OF LAST INSPECTION & DATE OF VALUATION June 15, 2015 DATE OF REPORT June 16, 2015 Page 12

17 REGIONAL AND AREA DATA Subject LOCATION Post Falls is approximately 10 miles west of the Coeur d'alene central business district. Coeur d Alene is the largest city in the panhandle of north Idaho, which is made up of Boundary, Bonner, Kootenai, Shoshone, and Benewah counties (from north to south). The five panhandle counties encompass an area 50 to 100 miles long. The Coeur d Alene metro area is naturally expanding west toward Post Falls and to the north, where it meets the city limits of Dalton Gardens, the City of Hayden, and the City of Hayden Lake The city of Post Falls is situated on the northeastern edge of the broad Columbia Basin, an agricultural area of dry land grains and irrigated farms, on the westerly drainage of the Bitterroot Range of the Rocky Mountains. It lies at an elevation of between 2,318 and 2,335 feet above sea level, where the foothills of the Rocky Mountains begin. It is also the first city along Interstate 90 after crossing the Idaho border from Washington. Page 13

18 REGIONAL AND AREA DATA TRANSPORTATION Coeur d Alene is located approximately twelve miles east of the Idaho-Washington border and is approximately 105 miles south of Canada. Interstate 90 is the primary highway across the northern tier of states linking northern Idaho to Moses Lake, Ellensburg, and the metropolitan areas of Seattle, Washington to the west; and Missoula, Bozeman and Billings, Montana, all the way to Chicago, Illinois, approximately 1,750 miles to the east. US Highway 95 is the primary north-south route through Idaho, connecting Boise, Idaho s capital, to the northern counties and Canada. I-90 intersects with U.S. Highway 95 approximately 10 miles east of the subject property in Coeur d Alene. It is considered the crossroads of Idaho. Spokane International Airport serves both the passenger and air-freight requirements of the region with 9,000 foot and 8,200 foot commercially rated runways. Geiger Field (Spokane International Airport) is approximately 39 miles west of Coeur d Alene, ID. The largest airport in the Idaho panhandle is located at Hayden, ID, approximately 10 miles northeast of the subject property. It has paved runways of 7,400 feet and 5,400 feet, and is rated for light commercial airfreight and private aviation. Kootenai County has no commercial passenger airline service available at this time. POPULATION GROWTH TRENDS Idaho s population grew by 21.1% from April 2000 to April 2010, the 4th biggest increase in the nation. It more than doubled the 9.7% national rate, boosting the state s population to just over 1,568,000. Nevertheless, Idaho remains one of the least dense states in the nation with just 19 Idahoans per square mile; vs. a national average of 87 persons per sq. mi. Kootenai County experienced a very gradual, but steady population growth between the end of WWI and the early-1970 s. Between 1970 and 1980 robust growth expanded the population from 35,332 to 59,770, a 69.2% increase in 10 years, and an average annual compounded growth rate of 5.4%. Figures for the 1990 census indicated a population of 69,795, total growth of 16.8% and an average annual compounded growth rate of 1.6% between 1970 and The 2000 Census listed the population of Kootenai County as , indicating an increase of 55.7% over 1990 levels, and an average annual compounded growth rate of 5.6% Census data, released in May 2011, report a 2010 population in Kootenai County of 138,494 persons, for total growth of 27.4% for the first decade of the 21st century. The Spokane-Kootenai MSA has been the 29th fastest growing metropolitan area in the country out of 363 designated MSA s in the US. Kootenai County Population Intercensal estimates of the resident population , , , ,265 Change: 55.7% 27.4% 4.2% Change 1990 to current: 106.7% Page 14

19 REGIONAL AND AREA DATA Current population numbers as of 2014 are: Coeur d Alene, 45,579; Post Falls, 28,651; Hayden, 13,549; and Rathdrum, 7,024. Coeur d Alene is the 6th largest city in Idaho and Post Falls is 11th. Coeur d Alene is the only city within the top ten that exceeded the average statewide growth rate. Of 200 Idaho cities reported, 111 gained population and 82 either held steady or experienced modest population declines. Only seven cities recorded population losses of more than 2%. None of Kootenai County s cities lost population in the past year and the 2014 population indicate +144,000 living in the county. ECONOMIC FACTORS From 1987 to 2000, Kootenai County s economy grew at a rapid pace as it diversified its manufacturing base, expanded its tourism sector, and added national call centers. In addition, tourism and population growth fueled a construction boom that lasted until late 2006, allowing retail stores, health care providers, service businesses and government agencies to expand. The opening of the Coeur d Alene Resort in 1987 led to the major tourism growth and the establishment of Coeur d Alene as a national and international resort destination. The Silverwood theme park opened in 1988 and has continued to grow with the addition of new rides and attraction every year. In 1994, the Coeur d Alene Tribe opened the Coeur d Alene Casino & Resort in Worley, ID. Today, the casino, golf course and hotel employ more than 900 people. In 2006, tourism-related jobs averaged 8,400 through the region. Other events contributing to economic diversification and growth during the last decade were the relocation of many manufacturing operations, and six call centers to Kootenai County from outside the region. Approximately 8,000 people work in the county s manufacturing businesses while 2,300 people work at national and international call centers located in the County. Kootenai County s low business costs, low land costs and low real estate taxes, provide it a competitive business environment and an excellent quality of life that has enable businesses to relocate her and attract qualified employees. EMPLOYMENT Services and retail trade, tourism, and agriculture are major industries. The area also has a wellestablished and growing electronics industry. Many national stores are represented in the area as are many local chain stores, with locations in both northern Idaho and eastern Washington. Some of the more familiar stores and service establishments include: Cabela s, Costco, J.C. Penney, Big-K, Sears, Target, Shopko, Kohl s, Lowe s, Home Depot, North 40 Outfitters, Wal- Mart (3 stores in Kootenai County), Safeway, Albertson's (2 stores), Super 1 (3 stores), Fred Meyer, Staples, Office Max, Outback Steakhouse, Red Lobster, Elmer s, Denny's, Burger King, Wendy's, McDonald's, Arby s, Carl s Jr., Red Robin, and Texas Roadhouse. Winco Foods Page 15

20 REGIONAL AND AREA DATA opened a 71,000 sf store in December 2013; Natural Grocers built and opened a new store, while a Golden Corral Buffet and Buffalo Wild Wings opened in April and September Alliance Data, an Ohio based credit card services company, recently to hired about 200 employees to work at their 44,500 sf call center in Coeur d Alene which opened in September This facility was formerly occupied by Coldwater Creek for their catalog sales division. Among the fastest growing employers are: Kootenai Health, Hagadone Corporation, Qualfon (formerly Center Partners), Buck Knives, and Esterline Advanced Input Systems. Largest Employers in Kootenai County Employer FTE Employees Industry Employer FTE Employees Industry Center Partners 1,550 Call Center Groundforce Worldwide 205 Manufacturing Kootenai Health 1,375 Health Care Raycap, Incl 170 Manufacturing Coeur d Alene Casino Resort 1,060 Hospitality City of Post Falls 146 Government Coeur d Alene School District Education Accurate Molded Plastics 145 Manufacturing Kootenai County 758 Government Cabela's 143 Retail USBank 635 Banking / Call Center Kroc Center 135 Other North Idaho College 575 Education Transector Systems Incl 123 Manufacturing Post Falls School District Education CPM Development 115 Other Lakeland School District Education Silverwood * 98 Entertainment Esterline, Advanced Input Systems 380 Manufacturing Avista 92 Utility City of Coeur d Alene 356 Government MOR Manufacturing 80 Manufacturing Buck Knives 292 Manufacturing Kootenai Electric Cooperative 72 Utility Flexcel (Kimball Office) 272 Manufacturing Hecla Mining Co. 55 Other Fred Meyer 268 Retail Ednetics, Inc. 54 Education Idaho Forest Group 226 Manufacturing Red Lion Hotels 40 Hospitality Costco Wholesale 216 Retail * Hires an additional 1,000 during the summer Businesses who did NOT report include Albertsons, Century Publishing Co., Coldwater Creek, Contractors NW, Empire Airlines, Hagadone Hospitality, State of Idaho (Health & Welfare, Labor, Transportation, Idaho Veneer Interstate Concrete, LaCrosse Health, Super 1 Foods, Merritt Brothers Lumber, Panhandle Health District, Pinewood Care Center, Safeway, Sears, Stein Brothers, Sunshine Minting, US. Postal Service, USDA Forest Service, Walmart (3 stores). In previous years, Hagadone Corp. reported 2,000+. Other than USBank which also has a call center here, no other banks or credit unions reported. Northwest Specialty Hospital and Heritage Health also did not report. Kootenai Medical Center is now known as Kootenai Health. In March, 2014, Kootenai Health announced a $57 million hospital expansion, the first patient care expansion in 30 years. The 300,000+ sf addition will have three floors and the north side of the building will provide a new main entryway to the hospital. The project is Phase I of a five year plan and it will add between $7 and $10 million in new payroll, distributed between 100 and 150 new employees. Phase 1 will be completed by late in 2015 making way for Phase II, an expansion of operating rooms. Another large medical facility in the area is Heritage Health, formerly known as the Dirne Clinic. More robust economic growth will tend to occur when privately owned, profit-oriented businesses comprise a larger percentage of the employment base. In Post Falls, an expansion of the Northwest Specialty Hospital together with two other buildings is underway. The North Idaho Surgical Hospital will be the fourth building in the medical Page 16

21 REGIONAL AND AREA DATA campus. At the NEC of Mullan Avenue and Syringa Street, it is a 17,000 sf two-story building on a 4.2 acre site that is one of the 14 properties owned by the investment group creating the campus along the Mullan Avenue corridor. The next table summarizes the total county-wide employment picture, illustrating those sectors that account for the existing jobs / employment base as of 2013, which was the last full year available. Idaho has consistently ranked in the top 10% of statewide employment rates. Kootenai County had been lower than the national average for 46 straight months until finally exceeding the national rate in December Employment in Idaho peaked at just under 729,000 in July 2007 before the economic downturn. In July 2008 unemployment rose to 4.1% and ended Idaho s historic streak of 37 straight months of rates below 4%. In April 2015, employment set a new record with 761,200 employed. Period Dec-00 Dec-07 Change Dec-12 Change Dec-13 Change from previous year Dec-14 Change from previous year Kootenai County 7.50% 2.90% -61.3% 8.10% 179.3% 6.40% -21.0% 4.30% -32.8% State of Idaho 4.80% 4.50% -6.3% 7.10% 57.8% 6.10% -14.1% 4.70% -23.0% National 4.00% 5.00% 25.0% 7.70% 54.0% 6.70% -13.0% 5.90% -11.9% Most of the rise in unemployment during the great recession era of was being blamed on the closure of several businesses and the drastic slow-down of both residential and commercial construction. In Kootenai County today, +95.4% of the workforce is employed, whereas full employment is considered to be +95%. As of April 2015, the national unemployment rate was 5.4% while the State of Idaho rate for the same date was 3.8% and the rate for Kootenai County was 4.6%. Just 12 months ago the county rate was 6.4%. The state s Page 17

22 REGIONAL AND AREA DATA jobless rate was the lowest since May of Idaho s rate has been below the national rate for more than 13 consecutive years. The five resource-dependent Panhandle counties have the highest regional rate at 7.29% overall, but it has been over ten months since any Idaho county reported double-digit unemployment. A lack of industrial and manufacturing diversification is cited as the cause of lagging employment in the five panhandle area counties. A new business, Alliance Data, opened June 2014 employing 200+ people at wages starting at $11.00/hr. The company manages more than 130 private label and co-brand credit card programs and is taking over the 44,500 sf former Coldwater Creek facility. Their plans include expansion to create up to 450 jobs within 24 months. Alliance Data has more than 5,100 employees in a dozen locations serving more than 33 million cardholder accounts. It has earned nine Center of Excellent certifications by Benchmark Portal for its care centers an unmatched distinction in its industry. A June 2014 study by the Kauffman Foundation found that Idaho is the 2 nd friendliest state for small business and the easiest of the 50 states to start a business. The survey found Idaho had the highest share of entrepreneurs who receive their primary income from their business and the state had the second highest share of business startups. While Idaho receive an A+ rating, neighboring Washington and Oregon received C and C-. NEW KTEC CAMPUS The Kootenai Technical Education Center buildings were recently completed after more than 15 years in the planning stage. The 54,000 sf school was built on six acres of a 20 acre site they purchased. KTEC supporters, including the 45-member North Idaho Manufacturer s Consortium, passed a $9.5 million levy for the school in 2010 in the districts of Lakeland, Coeur d Alene, and Post Falls. KTEC students are required to finish high school as they complete their KETC certificate programs. The campus will eventually include a training facility connected to North Idaho College which owns 40 acres of land contiguous to the land KTEC will occupy. Lakeland School District also owns adjacent land. The project is modeled after the 42-year old Canyon-Owyhee School Service Agency which provides technical education to five school districts in Canyon and Owyhee Counties in southern Idaho. The seven programs are: automotive technology, diesel technology, engineering design and automation, industrial welding and metal fabrication, construction trades, resort management, and computer repair. The college-level courses are aligned with industry standards and industry certification. The school opened its doors in August 2012 with 280 students chosen from 920 applications. They are considering night classes to allow more students or adding additional infrastructure. Page 18

23 REGIONAL AND AREA DATA CONSTRUCTION ACTIVITY Building permit figures for the past ten years are shown below for the county and the four largest cities. Building Permits Kootenai County 1,464 1,385 1,237 1,230 1,342 1,451 1,614 1,582 1,691 1,958 Coeur d'alene 3,549 3,013 2,910 2,380 1,714 1,717 1,769 2,451 2,985 3,462 Post Falls , , ,508 Hayden ,014 Rathdrum N/A Kootenai County figures include data for several smaller cities such as Athol, Bayview, Dalton Gardens, Fernan, Harrison, Hauser Lake, Huetter, Spirit Lake, State Line, and Worley / 2014 saw a resurgence of commercial construction with completion of the $15 million SpringHill Suites at 2250 W. Seltice Way in CDA. The 118 room hotel is just north of Riverstone overlooking the Spokane River. Recently completed are a 71,000 sf Winco Foods at Ramsey Road and Appleway Avenue with an estimated cost of $8.5 million (completed in November 2013), a regional VA Outpatient Clinic to contain 16,348 sf at 915 Emma Avenue and a 63,433 sf facility to be occupied by the Kootenai Physicians Clinic at 1919 Lincoln Way (Completed in October 2013). The KPC is part of Kootenai Health s intern program. Both the Emma Avenue and Lincoln Way medical properties are in the Kootenai Health hospital district. These projects are dwarfed by the +$30 million spent by the City of Coeur d Alene on McEuen Park and the new parking garage. Page 19

24 REGIONAL AND AREA DATA Occupancy rates reported for Kootenai County are as follows: Occupancy Rates - Kootenai County Through, 2014 Industrial & Flex-Tech % Occupancy Vacancy 13 to 14 Vacancy 12 to 14 Total SF Vacancy Vacant SF in 2013 % Change in 2012 % Change Coeur d'alene 1,667, % 109, % 0.66% 4.57% 2.00% Post Falls 2,717, % 120, % -3.34% 10.67% -6.25% Hayden 1,175, % 81, % -0.99% 5.29% 1.65% TOTAL 5,561, % 311, % -1.62% 7.63% -2.03% Office % Occupancy Total SF Vacancy Vacant SF Coeur d'alene 2,939, % 352, % 0.54% 14.19% -2.20% Post Falls 528, % 54, % 2.77% 13.59% -3.33% Hayden 362, % 20, % -0.87% 8.09% -2.31% TOTAL 3,830, % 427, % 0.91% 13.46% -2.30% Retail % Occupancy Total SF Vacancy Vacant SF Coeur d'alene 5,097, % 318, % -0.79% 6.99% -0.74% Post Falls 1,868, % 302, % -1.76% 18.51% -2.33% Hayden 860, % 32, % -0.81% 4.10% -0.27% TOTAL 7,826, % 654, % -1.02% 9.48% -1.12% SUMMARY - CONCLUSIONS Kootenai County serves as a regional hub of industrial and commercial activity in northern Idaho, and is considered the heart of this inter-mountain region. Offering a full range of recreational and lifestyle amenities and unsurpassed beauty, the county offers residents an ideal place to live and tourists a great place to visit. The area has long been recognized for its beauty, life-style and livability. U.S. News and World Report named Coeur d'alene one of the 10 best cities in America to live, and National Geographic described the lake as one of the five most beautiful in the world. Coeur d Alene, Hayden, and Post Falls are bedroom communities to Spokane, which is the largest urban area between Seattle and Minneapolis / St. Paul within the northern-tier states. Spokane and Kootenai Counties combined are home to nearly 600,000 residents. The economy relies heavily upon manufacturing, wood products, agriculture, retail trade and services and tourism for its economic base. Employment statistics since 1982, with the exception of late 2008 through today, have shown a steady decrease in the unemployment rate and tourism and service related facilities are growing industries. Page 20

25 REGIONAL AND AREA DATA Kootenai County's population has increased steadily with nearly half of the county's population between the ages of 18 and 60 representing the majority of the work force. "Jobs Plus", a privately funded marketing initiative was created to provide an economic development program for Kootenai County and to spearhead business growth in the area. Jobs Plus was directly responsible for bringing Kimball Office, Buck Knives, and Qualfon (formerly Center Partners) to Kootenai County. Panhandle Area Council has devised an overall economic development program for planning and coordination of economic development activities to stimulate private and public investment to provide employment and growth opportunities. The Coeur d Alene Metro Area (Kootenai County) is the state s largest after Boise. It accounts for 9% of the state s population and 8.4% of all jobs, more than any of the other three metro areas (Idaho Falls, Lewiston, and Pocatello). Kootenai County contributes 8+% of Idaho s economic output. Developers, environmentalists and governmental administrators have been working together to establish growth management plans to ensure sustainable and profitable growth for the decades and generations ahead. From all current indications it appears that the housing market strengthened significantly during 2013 and 2014, a trend that is likely to continue. The inventory backlog of for sale housing on the market and absorption rates have been reduced, and prices are increasing. New development in 2013 and 2014 outpaced previous years with a new Winco supermarket, Natural Grocers, Golden Corral, Buffalo Hot Wings, several small office buildings, and a major medical office addition. A major addition to the Kootenai Medical Center will be completed in early The retail sector is still lagging, although the vacancy rate for retail has also been reduced over the past year. To say the future looks bright for real estate in Kootenai County might be an overstatement, but conditions are clearly improving. Page 21

26 NEIGHBORHOOD LOCATION The subject properties are located with frontage on Lochsa Street, St. Joe Avenue, Clearwater Loop or Moyie Street in the Riverbend Commerce Park approximately one mile east of the Idaho / Washington state line. Riverbend Commerce Park is situated between the Spokane River on the south and. Post Falls shares city limits with Hayden and Coeur d'alene and is located +40 miles south of Sandpoint, ID, and +25 miles east of Spokane, WA. JURISDICTION AND PROXIMITY TO SUBJECT The subject property is located within the incorporated portion of Kootenai County, Idaho known as Post Falls. BOUNDARIES AND NEIGHBORING LAND USES A neighborhood may be defined as "a portion of a large community, or an entire community, in which there is a homogenous grouping of inhabitants, groupings, buildings, or business enterprises." "...neighborhood boundaries may consist of well-defined natural or manmade barriers, or they may be more or less well defined by distinct change in land use...". Based on Page 22

27 NEIGHBORHOOD the surrounding land use patterns, traffic patterns, and local development trends, the boundaries of the subject neighborhood have been defined as follows: Northern Boundary: US Highway 53 Southern Boundary: Spokane River Eastern Boundary: Spokane Street Western Boundary: Idaho / Washington state line Stateline Business Park Expo at Post Falls The Pointe at Post Falls Subject Development To the northeast of the subject property at the intersection with Pleasant View Road is the Expo at Post Falls development. On the date of this appraisal, 39 of the 66 recorded lots have been developed or sold to individual owners by the developers since the original plat was recorded in Lots fronting along Pleasant View Road have been improved with retail or service commercial uses while lots west of Pleasant View Road on Seltice Way are improved with industrial buildings. Located north of the subject development across Interstate 90 along Seltice Way is the Stateline Business Park. On the date of this appraisal all 25 developed lots have been sold by the developers to individual owners, however only five of the lots have been improved with buildings. Page 23

28 NEIGHBORHOOD The Pointe at Post Falls adjoins the Stateline Business Park to the south along Interstate 90. On the date of this appraisal 3 of the 28 platted parcels had been developed with the tenants being Wal-Mart, Cabela s and Food Service of America. The subject development was constructed by Jacklin Land Company. There were originally 124 lots; all except 35 have been sold. Current occupants include several light industrial businesses such as Buck Knives, AC Data Systems, Healthcare Resource Group, research firms in the Jacklin Research Building at 278 Lochsa Street, Tapmatic, Cabletron, Swiss Tech Precision, Quality Coating, Secured Interactive, Northlight Institute of Technology, Lifestream Technology, Old Standard Life Insurance, Western United Life Assurance, Classic Custom Vacation, Chadco Northwest, Scooters America, Plastic Model Engineering, Bild Industries, ALK Abello, and others. The University of Idaho Research Park is located next to the Riverbend Commerce Park. CONCLUSION The subject neighborhood has been stable in terms of commercial, light industrial, light manufacturing, and service commercial businesses. The location offers a recognizable address, convenient access, synergy with other light industrial firms, and a central location for firms doing business in Kootenai and Spokane Counties. We conclude the future of this neighborhood to be good in terms of occupancy and demand for light manufacturing, light industrial, warehouse, and service commercial space. Page 24

29 MARKET CONDITIONS Current Active Listings Average Average Lots Price DOM Commercial Sites in Kootenai County 108 $536, Closed Sales, Last 36 months Average Average Lots Price DOM Commercial Sites in Kootenai County 60 $243, Closed Sales, Last 24 months Average Average Lots Price DOM Commercial Sites in Kootenai County 47 $232, Change -5% 69% Closed Sales, Last 12 months Average Average Lots Price DOM Commercial Sites in Kootenai County 32 $235, Change 1% -3% 36 months average lot sales per mt 24 months average lot sales per mt 12 months average lot sales per mt Active Listings # of years inventory based on 12 mts sale activity The subject property is 10 platted industrial lots within Riverbend Commerce Park. Of the 124 developed lots within Riverbend Commerce Park development, 89 lots have been built out or sold. Over the past 12 to 18 months the residential and most of the commercial market has rebounded with increased building permits, reduced inventory being reported through the local MLS, and sale prices on the rise. Some areas still to watch would be: The cost of holding and maintaining inventories, built on speculation by contractors, consuming cash flow and reducing profits. Extensive competition and competitive pricing in nearly every development. We have compiled information for all commercial land sales on the above from the Kootenai County Multiple Listing Service, summarized as follows: 1. Total lot sales over the past 36 months in all of Kootenai County were: 60 properties (average of lots per month). (Average purchase price $243,869). Page 25

30 MARKET CONDITIONS 2. Total lot sales over the past 24 months in all of Kootenai County were: 47 properties (average of lots per month). (Average purchase price $232,241). 3. Total lot sales over the past 12 months in all of Kootenai County were: 32 properties (average of 2.67 lots per month). (Average purchase price $235,110). 4. Current listings: properties currently for sale represent years of inventory based on the past 12 months absorption rate. These figures do not include several developments in Kootenai County which are not marketed through the local MLS, but would compete with the subject lots for buyers. As discussed in the neighborhood section of this report, developments surrounding the subject property still have 60+ lots available to sell although a majority of the lots have been platted but not developed with utilities and roads. These undeveloped lots are potential competition for the subject lots, particularly if offered at a lower price point. As seen from the above summary, lot sales have averaged around 2 per month for the past 3 years while pricing has remained essentially unchanged. At this pace it would require five months to market all ten subject lots IF 100% of the market was captured, which is highly improbable. Page 26

31 SITE DATA GENERAL SITE DATA Physical Description: Street Orientation and Access: Shape: The subject property is 10 platted lots located in Riverbend Commerce Park Development. Sizes range from 0.71 acre to 2.38 acres for a total land area of acres. The level lots each have access to all utilities including city water and sewer. Each of the subject property lots is accessed from Interstate 90 to the north via a new interchange at Beck Road to the west, or from the Pleasant View Road interchange to the east. The subject lots have access and frontage on one of the following four subdivision streets: Lochsa Street, Clearwater Loop, Moyie Street and St. Joe Avenue. Rectangular or irregular, see plat above Page 27

32 SITE DATA Topography: Zoning: Drainage: Soil: Topography is level and at the grade of the streets and neighboring properties. Zoned Industrial under the current Post Falls Zoning Ordinance. Zoning specifications are included in the Addenda of this report. See zoning map below. Appears adequate with storm water drains in place No soils report provided to appraisers. Soils in this area are typically stable, with a high gravel content, and do not require special foundation construction. Interior Subdivision Streets: Utilities: Culinary Water: Sanitary Sewer: Natural Gas: Electric Power: Telephone: Easements, Restrictions and Reservations: All on-site utilities are underground including cable TV / Internet lines and fibre optic phone lines City of Post Falls City of Post Falls Avista Utilities Avista Utilities Frontier Communications or Time Warner Valuation assumes free and clear title with no adverse encumbrances, easements, or restrictions other than typical road and utility easements, subdivision covenants or other encumbrances of record. Community Services: Police: Fire/Paramedic: City of Post Falls Kootenai Fire and Rescue Page 28

33 SITE DATA Flood Hazard Status: FEMA Map Panel No C0375E dated May 3, NOT in a federal flood hazard area. See flood map in the Addenda of this report. Environmental: No Superfund lots in area. No evidence of physical disturbance, no hazardous materials incidents on record with the State of Idaho. Real Estate Tax Information Parcel Number ALTA Square 2014 Taxes 2015 Assessed Assessed Assessed Acreage Footage Value Value Per Acre Value Per SF P A ,780 Tax Exempt $145,535 $141,571 $3.25 P ,626 Tax Exempt $106,034 $141,567 $3.25 P ,542 Tax Exempt $256,266 $107,811 $2.47 P ,059 Tax Exempt $250,121 $107,811 $2.47 P ,376 Tax Exempt $95,940 $108,899 $2.50 P ,462 Tax Exempt $93,655 $108,901 $2.50 P ,509 Tax Exempt $98,772 $108,900 $2.50 P ,028 Tax Exempt $95,070 $108,900 $2.50 P ,797 Tax Exempt $76,992 $108,900 $2.50 P ,797 Tax Exempt $76,992 $108,900 $ ,976 $1,295,377 The owner of the subject lots is North Idaho College who is a tax exempt entity. Page 29