Kitsap County Assessor

Transcription

1 Kitsap County Assessor Narrative for Countywide Model Tax Year: 2018 Appraisal Date: 1/1/2017 Property Type: Countywide Retail - Standalone Drug Store Updated 6/12/2017 by CM20 Area Overview Countywide models are for properties located throughout Kitsap County, rather than by neighborhood. Property Type Overview A stand alone drug store is a good quality single tenant building with approximately 14,500 square feet to 18,000 square feet in size. Situated at high traffic lighted intersections they command some of the best commercial locations available in Kitsap County. Drug store tenants in attached units associated with shopping centers are valued using the Retail Large Single Tenant model. Economic Overview: This property type typically remains occupied for the economic life of the building. Valuation Summary Approach Used: Income Analysis and Conclusion Summary: The three approaches to value were considered. The cost approach was given little consideration in the appraiser's final analysis. Cost approach components such as replacement cost new, effective age, and depreciation are difficult to accurately calculate in a mass appraisal model. A market/sales comparison approach uses sale prices of comparable properties to calculate value. The market/sales approach was not applied as Kitsap County lacks sufficient, recent sales. The income approach was selected as the best method for valuing these properties. The data used to develop our current model data was collected from our mail survey, site visits, local sales, national publications, and data supplied for review or appeal. Drug stores, built by or for the intended tenant are at primary intersections representing superior locations throughout the county. The tenant (drug store) typically sells the property and leases it back at a lease rate substantially higher than commanded by similar properties. A sale-leaseback transaction is defined as a financing arrangement in which real property is sold by its owner-user, who simultaneously leases the property from the buyer for continued use. Dictionary of Real Estate Appraisal, Fourth Edition, Appraisal Institute As such, the value dictated by these sales is for value in use rather than the fair market value as if it were an unencumbered fee estate. Sale and resale of these properties reflect a value more attributable to the creditworthiness of the business enterprise than the real estate value itself. Both the sales and documented income have not been used in this analysis. Model Calibration Preliminary Ratio Analysis: Analysis of sales resulted in a mean ratio of 115%, a median ratio of 107%, and a coefficient of disperson (COD) of /Sales Comparison Approach Data and Analysis Sales: Range of Sale Dates: 1/1/2013 to 12/31/2016. A total of 5 local sales, and 14 regional sales, and 0 national sales were used in the sales analysis. Additional information is provided on the sales analysis Printed 6/12/2017

2 Property type: Countywide Retail - Standalone Drug Store (continued) data sheet. Kitsap County attempts to review, analyze, and validate via telephone, mail, or in person interviews, all commercial sales within the county for inclusion or exclusion in our market/sales approach. /Sales Rates: Sales ranged from $58.90 to $ per square foot. A 5% trend was applied to sales from Income Approach and Data Analysis Values were calculated using a triple net (NNN) income model. Income and expense information was collected from mailed surveys, property representatives, on-site visits, and market research (publications, newsletters, websites, etc.) Three local drug store rents were documented. The leases in place for drug stores occupied by a national chain are typically for twenty to twenty-five years with multiple five-year renewal clauses and are an absolute net basis where the tenant is responsible for all operating expenses. The lease amount established is more by investors estimate of required return rather than market rates. Therefore, the documented rents of stores currently occupied by chain pharmacy retailers have not been used as a basis of value. Using the principal of substitution, review of other large single tenant structures, and their rents, were used to develop the income model. Data: The Assessor validated rents from 44% of the market. Typical reported rents had a range of $4.59 to $ We selected $3.95 to $11.50 for our model. Vacancy Data: Typical reported vacancy had a range of to 10. We selected 5% to 5% for our model. Expense Data: Typical reported expense had a range of 5% to 54%. We selected 6% to 6% for our model. Capitalization Rate (Cap) Data: Typical sale cap rates ranged from 3.14% to 12.02%. We selected 7.5% to 8.75% for our model. Local cap rates were reviewed, along with cap rates from regional sales and from national publications. Income Model Value Range: The income approach calculates a range of values from $40.31 to $ per square foot. Final Ratio Analysis: Analysis of sales resulted in a mean ratio of 104%, a median ratio of 113%, and a coefficient of disperson (COD) of Sources Kitsap County Board of Equalization appeal documentation. Washington State Board of Tax appeal documentation. Kitsap County income and expense surveys. Kitsap County sales questionaires. The Dictionary of Real Estate Appraisal, Appraisal Institute, Third Edition, 1993 Property Appraisal and Assessment Administration, IAAO, 1990 Glossary for Property Appraisal and Assessment, IAAO,1997 LoopNet - Commercial Brokers Association - Boulder Group Net Lease Report Q CBRE Survey 1st Half 2016 Calkain Net Lease s PWC-Korpacz 1st Qtr 2017 Printed 6/12/2017

3 RETAIL IFICATION GUIDELINES Location Synergy Access Visibility Traffic Parking Quality of Building Condition of Building Delivery Access Highest and Best Use A Associated with a shopping center Destination shopping such as shopping centers or designated retail developments. Multiple accesses, lighted access, round-a-bouts, allway stop signs. Store front or signage highly visible. High traffic count or destination shopping area. Ample on-site parking. Very good retail building with impressive façade. New or recently renovated with modern mechanical upgrades. Good delivery access to rear of building, possibly loading docks. As developed. B Associated with a shopping center or Destination or easy impulse shopping location. Multiple accesses, lighted access, round-a-bouts, allway stop signs. Store front or signage highly visible. High traffic count or destination shopping area. In midst of downtown core walking pattern. Ample on-site parking or adequate nearby parking for locations. Good retail building with attractive façade. New or recently renovated with modern mechanical upgrades. Good delivery access to rear of building, possibly loading docks. As developed. C Free standing or Good traffic from neighboring business mix. Adequate access, possible multiple accesses, turn lane on busy roads. Good store front or signage visibility. Adequate traffic counts. In midst of or at edge of walking pattern. Adequate on-site parking or nearby parking for locations Average retail building, typical façade. Average condition, no functional obsolescence. All Rear access man mechanical components meet doors with good requirements. Typical road. maintenance on building completed as needed. As developed. D Free standing, secondary street locations, or in defunct shopping center. Limited synergy from neighboring businesses. Adequate access, possibly difficult during high traffic commute hours. Limited store front or signage visibility. Adequate to low traffic count, or extremely high count during peak commute hours. Off the main walking pattern for. Adequate to limited on-site parking or nearby parking for locations Average retail building with plain or dated façade. Possible deferred maintenance, possible Possible rear functional obsolescence. May access, alley not meet todays standards for access. mechanical improvements. As developed, possibly transitioning away from current use. E Free standing, secondary street locations, or in defunct shopping center. Limited or none. Adequate to difficult access. Very limited. Low traffic count. Not part of typical walking pattern for areas. Limited parking, distance to parking in areas. Fair or low quality retail building, plain or dated façade. Needs maintenance, possible functional obsolescence, approaching need for redevelopment. Does not meet todays mechanical standards. Limited with narrow alley, or no rear access. Transitioning away from current use or need of complete redevelopment to today's standards. Onsite parking is not typical in areas where 10 building footprint to land is allowed. Locations within the typical walking pattern for areas are prime retail sites. Those located at the fringes or back streets are less desirable. Retail stores in excess of 10,000 sf for single tenant occupancy tend to be square in shape. Retail stores are typically rectangular in shape with the short side being the store frontage. Consider higher rent class if the long side is store frontage.

4 Kitsap County Assessor Tax Year: 2018 Property Type: Retail Countywide Neighborhood: 0 Rtl>20K Outside Rtl>100K SA Drug SupMkt Class A Class B Class C Class D Class E Income Mode

5 Kitsap County Assessor Tax Year 2018 Local Income Survey for Retail - Retail-Large PGI per Unit Vacancy EGI per Unit Expense % $17.56 $ % $17.34 $ % $17.34 $ % $ % $14.86 $16.94 $16.94 $16.66 $16.66 $1 $1 $15.26 $ % $14.84 $ % $13.67 $ % $13.25 $ % $13.17 $13.17 $12.55 $ % $12.46 $12.46 $11.20 $11.20 $ $ % $10.00 $10.00 $9.38 $9.38 $ $ % $9.11 $ % $8.50 $8.50 3% $8.31 $8.31 6% $8.25 $8.25 $7.64 $ % $7.49 $ % $7.19 $7.19 $7.08 $ % $6.90 $6.90 $6.81 $6.81 5% $6.62 $6.62 $6.50 $ % $6.46 $6.46 $6.05 $6.05 $5.95 $5.95 8% $5.63 $5.63 $5.62 $5.62 9% $5.57 $5.57 $5.37 $ NOI per Unit $14.52 $14.53 $12.31 $14.86 $16.94 $16.66 $1 $10.79 $1 $9.71 $9.41 $13.17 $7.87 $12.46 $11.20 $0.00 $10.00 $9.38 $0.00 $7.00 $8.24 $7.77 $8.25 $3.97 $4.62 $7.18 $3.26 $6.90 $6.47 $6.62 $5.14 $6.46 $6.05 $5.46 $5.63 $5.13 $5.57 $4.80 Printed: 6/12/2017

6 Kitsap County Assessor Tax Year 2018 Local Income Survey for Retail - Rtl >100,000 sf PGI per Unit Vacancy EGI per Unit Expense % $4.72 $4.72 NOI per Unit $4.72 Kitsap County Assessor Tax Year 2018 Local Income Survey for Retail-CW - SA Drug PGI per Unit Vacancy EGI per Unit Expense % $29.97 $29.97 $24.70 $24.70 $23.37 $23.37 NOI per Unit $29.97 $24.70 $23.37 Printed: 6/12/2017

7 No. NBRHD PC Account Number Project Name Tax Year 2018 Countywide Retail Large Single Tenant, Standalone Drug Stores, and Supermarkets Sales from 01/01/2013 through 12/31/2016 Class Units Excise No. 5% V C Sales Date Sales Price Trended Sales Price Model Value Other Values Total TY2018 Value Wherehouse Music A 14,100 $ 1,930, Party City A 13,776 $ 1,886,310 06/12/2013 $ 6,500,000 $ 6,825, La Z Boy Furniture A 15,990 $ 2,189,470 $ 7,704, % Applebees A 5,742 $ 1,514,410 $ 183, Dollar Tree B 18, EX00757 V 02/06/2015 $ 2,825,000 $ 2,825,000 $ 2,121,770 $ 2,121,770 75% Dollar Tree B 18, EX07745 V 11/24/2014 $ 2,250,000 $ 2,250,000 $ 2,121,770 $ 2,121,770 94% Michaels + Center C 22,700 $ 2,033,990 $ 4,733, EX03749 TJ Maxx C 26,400 W 06/12/2013 $ 9,500,000 $ 9,975,000 $ 2,357,530 $ 492,730 $ 11,737, % LO Parking for Kitsap Place $ 2,120, Former Albertson's C 50, Parking Lot 2016EX05050 W 07/14/2016 $ 3,000,000 $ 3,000,000 $ 4,548,050 $ (909,610) $ 3,638, % Ratio NBRHD Neighborhood PC Property Class Count Silverdale 590 Other retail trade Low 75% Highway 303 East 592 Community Center High 121% Bremerton 460 Parking Median 113% Wheaton Way Mean 104% West Bremerton VC Property Class AAD South Kitsap UGA D Not economic unit COD Kingston V W S 8 M Valid Sale With other property Segregation Outlier Other Removed Sales 5% No. NBRHD PC Account Number Project Name Class Units Excise No. V C Sales Date Sales Price Trended Sales Price Model Value Other Values Total TY2018 Value Bucklin Place - Albertsons A 58, EX01368 V 03/06/2015 $ 9,229,396 $ 9,229,396 $ 7,943,390 $ 7,943,390 86% Albertson's store w/039 C 50, EX03523 V 05/27/2015 $ 3,668,563 $ 3,668,563 $ 4,548,050 $ (909,610) $ 3,638,440 99% Kingston Rite Aid A 18, EX05633 M 08/15/2013 $ 5,615,000 $ 5,895,750 $ 4,006,120 $ 4,006,120 68% Bremerton Walgreens B 14, EX07806 M 11/20/2014 $ 7,745,000 $ 7,745,000 $ 2,572,900 $ 2,572,900 33% Former Kmart/Strip Retail Mile Hill C 72, EX /13/2016 $ 2,000,000 $ 2,000,000 $ 4,180,530 $ 1,303,960 $ 5,484, % Mickelberry Ctr -Goodwill Industries C 61, EX01213 V 03/02/2015 $ 6,632,000 $ 6,632,000 $ 2,897,610 $ 1,663,340 $ 4,560,950 69% Furniture Store and Sporting Goods C 116, EX05260 S 08/05/2013 $ 10,050,000 $ 10,552,500 $ 10,421,580 $ 10,421,580 99% Walgreen's Port Orchard A 15, EX01112 M 02/11/2016 $ 5,175,000 $ 5,175,000 $ 3,328,760 $ 3,328,760 64% 1 Part of a portfolio sale of based on the merger of Albertsons and Safeway 2 Part of a portfolio sale of based on the merger of Albertsons and Safeway 3 Sale included leased fee estate, purchase price determined by credit rating of tenant. 4 Sale included leased fee estate, purchase price determined by credit rating of tenant. 5 Outlier 6 Mix of retail main floor and warehouse, mini-storage in basement. 7 Property was split into two sites after sale. 8 Sale included leased fee estate, purchase price determined by credit rating of tenant. Ratio

8 Other County Sales January 1, April 11, 2017 Big Box >100K County Account No Project Excise Date Sale Price Size $/Unit Cap King ' Midway Lowes Nov-16 $ 14,115, $ King Fred Meyers Jun-13 $ 13,380, $ King Former Target Nov-14 $ 8,200, $ King ' Dania Feb-16 $ 10,000, $ Pierce ' Home Depot - Tacoma Jun-15 $ 32,655, $ % Whatcom ' Home Depot - Bellingham Jun-15 $ 25,590, $ Yakima Shopko Yakima Jun-15 $ 9,931, $ Retail-Large >10K County Account No Project Excise Date price Size $/Unit Cap King Best Buy - Issaquah Aug-13 $ 6,720, $ King former McClendon's Hardware Jun-14 $ 5,560, $ Pierce ' Kmart Jan-17 $ 2,800, $ Snohomish ' Petco Jul-16 $ 4,745, $ Snohomish ' Petco & Grocery Outlet Sep-16 $ 8,300, $ Snohomish ' O'Reilly Auto Parts Feb-17 $ 3,250, $ Thurston Big Lots May-14 $ 3,700, $ % Whatcom ' Petsmart Dec-14 $ 3,500, $ Whatcom ' Michael's Mar-15 $ 4,050, $ Whatcom ' Tractor Supply Aug-16 $ 4,057, $ Whatcom Petsmart Oct-16 $ 4,353, $ Drug Stores County Account No Project Excise Date price Size $/Unit Cap Grant Rite Aid - Moses Lake Nov-15 $ 5,650, $ % Grays Harbor Rite Aid E Mar-14 $ 7,800, $ King Rite Aid - Fairwood Jul-13 $ 6,645, $ King Walgreens Issaquah Apr-14 $ 6,910, $ % King Bartell Drugs Mar-17 $ 4,100, $ King Walgreen's Mar-17 $ 5,500, $ Pierce Rite Aid Graham Jun-13 $ 5,350, $ % Pierce ' Rite Aid Spanaway Oct-13 $ 2,365, $ Pierce Walgreens & Starbucks Feb-15 $ 10,052, $ % Snohomish Walgreens Lake Stevens Apr-13 $ 9,294, $ % Snohomish ' Walgreens Lynnwood Jun-13 $ 5,890, $ Snohomish ' Bartell Drugs Oct-14 $ 5,934, $ Whatcom Walgreens - Bellingham Aug-15 $ 7,178, $ % Whatcom ' Rite Aid Ferndale Jan-15 $ 3,800, $ Supermarkets County Account No Project Excise Date price Size $/Unit Cap King ' Haggen Albertsons Grocery Jun-16 $ 12,746, $ % King ' Haggen Safeway Grocery Jul-16 $ 8,778, $ % King ' Country Aug-16 $ 4,500, $ Pierce ' Albertson's Jul-16 $ 8,795, $ Pierce ' former Albertson's/Haggen Apr-17 $ 13,500, $ Snohomish ' Haggen's Jun-16 $ 3,250, $ Snohomish ' Roger's Mountlake Terrace Oct-16 $ 2,500, $ 90.61