APPRAISAL REPORT OF ±1,519 ACRES OF VACANT LAND LOCATED IN BABCOCK RANCH ALVA, FLORIDA

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1 APPRAISAL REPORT OF ±1,519 ACRES OF VACANT LAND LOCATED IN BABCOCK RANCH ALVA, FLORIDA FOR LEE COUNTY - DEPARTMENT OF COUNTY LANDS CONSERVATION 20/20 PARCEL NOVEMBER 2018 Diversified Appraisal, Inc. Lee County Lands - Parcel /

2 Diversified Appraisal, Inc. Real Estate Appraisers and Consultants Ted A. Dickey, MAI David C. Vaughan, MAI, MBA State-Certified General Real Estate Appraiser State-Certified General Real Estate Appraiser Certification #RZ 570 Certification #RZ November 2018 Lee County - Department of County Lands P.O. Box 398 Fort Myers, Florida Attention: Mr. J. Keith Gomez, Sr. Property Acquisition Agent Re: Job # Appraisal Report of ±1,519 acres of vacant land located in Babcock Ranch, Alva, Florida, Conservation 20/20, Parcel 450-3, Notice to Proceed No Dear Mr. Gomez: As requested, a detailed on-site inspection and analysis of the subject property has been made as of 9 November Within the attached Appraisal Report, please find enclosed a description of the subject property. This is an Appraisal Report which is intended to comply with the reporting requirements set forth under Standards Rule 2-2 of the Uniform Standards of Professional Appraisal Practice for an Appraisal Report. As such, it presents discussions of the data, reasoning, and analyses that were used in the appraisal process to develop the appraiser's opinion of value. Supporting documentation concerning the data, reasoning, and analyses is retained in the appraiser's file. The depth of discussion contained in this report is specific to the needs of the client and for the intended use stated below. The appraiser is not responsible for unauthorized use of this report. This appraisal is not based upon a minimum valuation, a specific valuation, or the approval of a loan. The appraisal report is intended to comply with the Uniform Standards of Professional Appraisal Practice adopted by the Appraisal Standards Board of the Appraisal Foundation, as well as the Code of Professional Ethics and the Standards of Professional Appraisal Practice of the Appraisal Institute. I have complied with the Standards of Professional Appraisal Practice, Competency Rule. I certify that I have had no past, present or future contemplated interest in the real estate and to the best of my knowledge, the facts contained herein are true and correct Royal Palm Square Blvd. Suite 104 Ft. Myers, Florida (239) Fax (239)

3 The purpose of the appraisal is to estimate the market value of the subject property. Market value as set forth in Title 12 of the Code of Federal Regulations (f) is: 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: a. Buyer and seller are typically motivated. b. Both parties are well informed or well advised, and each acting in what they consider their own best interest. c. A reasonable time is allowed for exposure in the open market. d. Payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and e. The price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale. The intended use of the appraisal is understood to be for assisting the clients/users with acquisition activities and possible purchase of the subject property. The intended clients/users of this appraisal is Lee County - Department of County Lands. The subject property is vacant land. The appraiser did not detect, and has no knowledge of, the existence of any hazardous materials or substances on the site. This appraisal assumes that no such materials exist to the extent that they would have an effect on the value. If any hazardous materials or substances are found on the site, then this appraisal is subject to reanalysis. The appraiser is not an expert in this field. The subject property is appraised as of 9 November A detailed on-site inspection and analysis was made on that date by David C. Vaughan, MAI. I have been instructed to appraise the subject as if it is zoned AG-2, the uplands classified as DR/GR, and the wetlands classified as Wetlands by the Lee County Future Land Use Plan. Diversified Appraisal, Inc. Lee County Lands - Parcel /

4 Based on my inspection, analysis, data research, and information contained in the appraiser's work file, it is my opinion that the market value of the undivided fee simple interest of the subject property, as if zoned AG-2, with Lee County Future Land Use Classifications of DR/GR for the uplands, and Wetlands for the wetlands", as of 9 November 2018, is: NINE MILLION EIGHT HUNDRED SEVENTY FIVE THOUSAND DOLLARS($9,875,000) Sincerely, David C. Vaughan, MAI State-Certified General Real Estate Appraiser RZ 569 Diversified Appraisal, Inc. Lee County Lands - Parcel /

5 TABLE OF CONTENTS EXECUTIVE SUMMARY... I PHOTOGRAPHS... 1 PREFACE...12 IDENTIFICATION OF THE SUBJECT...13 SCOPE OF THE APPRAISAL...13 STATEMENT OF OWNERSHIP/PURCHASE HISTORY/TAX INFORMATION...14 EXPOSURE TIME...28 MARKETING TIME...29 OBJECTIVE OF THE APPRAISAL...29 DEFINITION OF MARKET VALUE...29 PROPERTY RIGHTS APPRAISED...30 INTENDED USE / INTENDED USER OF THE APPRAISAL...30 EXTRAORDINARY ASSUMPTIONS/HYPOTHETICAL CONDITIONS...30 DATE OF VALUE ESTIMATE...31 DATE OF REPORT...31 USE OF REAL ESTATE...31 REGIONAL AND LOCAL ANALYSIS...32 LEE COUNTY DATA...33 LEE COUNTY MAP...36 MARKET AREA ANALYSIS...54 MARKET AREA MAP...55 SUBJECT ANALYSIS...60 DESCRIPTION OF REAL ESTATE APPRAISED...61 AERIAL MAP...62 PROPERTY SKETCH...63 SITE MAP...64 FLUCFCS MAP...65 FLOWWAYS MAP...66 SPATIAL REPORTS...67 ANALYSIS OF HIGHEST AND BEST USE...79 THE APPRAISAL PROCESS...82 LAND VALUATION ANALYSIS...84 COMPARABLE LAND SALES MAP...85 COMPARABLE LAND SALES...86 COMPARABLE LAND SALES GRID APPRAISAL CERTIFICATION ADDENDA NOTICE TO PROCEED LEGAL DESCRIPTION ASSUMPTIONS AND LIMITING CONDITIONS QUALIFICATIONS OF THE APPRAISER Diversified Appraisal, Inc. Lee County Lands - Parcel /

6 EXECUTIVE SUMMARY PROJECT NAME: Conservation 20/20, Parcel PROJECT NUMBER: 8800 OWNER OF RECORD: Babcock Property Holdings, LLC c/o Kitson and Partners STRAP NUMBER(S): ; ASSESSED VALUE: $8,246,368 5 YEAR SALES HISTORY: N/A LOCATION: LAND AREA: IMPROVEMENTS: DEVELOPMENT PERMITS: ALLOWABLE DEVELOPMENT UNIT(S): ZONING/LAND USE: HIGHEST AND BEST USE: Babcock Ranch, Alva, Florida ±1,519 acres Vacant Land N/A N/A MPD / New Community Mixed Used - Residential Development DATE OF VALUATION: 9 November 2018 ESTIMATE OF VALUE - COST APPROACH: N/A ESTIMATE OF VALUE - MARKET APPROACH: $9,875,000 ESTIMATE OF VALUE - INCOME APPROACH: INTEREST APPRAISED: N/A Fee Simple FINAL VALUE ESTIMATE: VALUE OF LAND AS VACANT: $9,875,000 PER UNIT VALUE (ACRE): $6,500 VALUE AS IMPROVED: N/A TYPE OF EASEMENT: N/A APPRAISER: David C. Vaughan EXTRAORDINARY ASSUMPTIONS: See Page 30 HYPOTHETICAL CONDITION: See Page 30 Diversified Appraisal, Inc. i Lee County Lands - Parcel /

7 Photographs PHOTOGRAPHS PHOTO OF SUBJECT PHOTO OF SUBJECT Diversified Appraisal, Inc. 1 Lee County Lands - Parcel /

8 Photographs PHOTO OF SUBJECT PHOTO OF SUBJECT Diversified Appraisal, Inc. 2 Lee County Lands - Parcel /

9 Photographs PHOTO OF SUBJECT PHOTO OF SUBJECT Diversified Appraisal, Inc. 3 Lee County Lands - Parcel /

10 Photographs PHOTO OF SUBJECT PHOTO OF SUBJECT Diversified Appraisal, Inc. 4 Lee County Lands - Parcel /

11 Photographs PHOTO OF SUBJECT PHOTO OF SUBJECT Diversified Appraisal, Inc. 5 Lee County Lands - Parcel /

12 Photographs PHOTO OF SUBJECT PHOTO OF SUBJECT Diversified Appraisal, Inc. 6 Lee County Lands - Parcel /

13 Photographs PHOTO OF CREEK LOCATED ON SUBJECT PHOTO OF SUBJECT Diversified Appraisal, Inc. 7 Lee County Lands - Parcel /

14 Photographs PHOTO OF SUBJECT PHOTO OF SUBJECT Diversified Appraisal, Inc. 8 Lee County Lands - Parcel /

15 Photographs PHOTO OF SUBJECT PHOTO OF SUBJECT Diversified Appraisal, Inc. 9 Lee County Lands - Parcel /

16 Photographs ACCESS ROAD TO THE PROPERTY ACCESS ROAD TO THE PROPERTY Diversified Appraisal, Inc. 10 Lee County Lands - Parcel /

17 Photographs EASTERLY VIEW OF NORTH RIVER ROAD WESTERLY VIEW OF NORTH RIVER ROAD Diversified Appraisal, Inc. 11 Lee County Lands - Parcel /

18 Preface PREFACE Diversified Appraisal, Inc. 12 Lee County Lands - Parcel /

19 Preface IDENTIFICATION OF THE SUBJECT The subject property consists of ±1,519 acres of vacant land located in northeast Lee County, Alva, Florida. This location is east of Babcock Ranch Road (SR 31), and north of North River Road, on the Lee County/Charlotte County Line. The site has approximately 1,063.4 acres of upland area, and acres of wetland area. The legal description for the subject property is rather lengthy and appears in the Addenda to this report. The subject property can be identified as Parcel Numbers ; ; and a portion of SCOPE OF THE APPRAISAL The property being appraised consists of ±1,519 acres of vacant land located northeasterly Lee County, Alva, Florida. The property is zoned MPD with a Lee County Future Land Use classification of New Community. I have been instructed to appraise the subject as if it is zoned AG-2, the uplands classified as DR/GR, and the wetlands classified as Wetlands by the Lee County Future Land Use Plan. As the subject property is vacant land, the only applicable approach to value is the Sales Comparison Approach. I did an extensive sales search for sales that I consider to be similar to the subject property. My research indicated that some amount of activity had occurred within the past several years. These sales are presented later within the report and will be utilized as a database in the valuation of the subject property. This is an Appraisal Report, which is intended to comply with the reporting requirements set forth under Standards Rule 2-2 of the Uniform Standards of Professional Appraisal Practice. As such, it presents discussions of the data, reasoning, and analyses that were used in the appraisal process to develop the appraiser's opinion of value. Supporting documentation concerning the data, reasoning, and analyses is retained in the appraiser's file. The depth of discussion contained in this report is specific to the needs of the client and for the intended use stated below. The appraiser is not responsible for unauthorized use of this report. Diversified Appraisal, Inc. 13 Lee County Lands - Parcel /

20 Preface STATEMENT OF OWNERSHIP/PURCHASE HISTORY/TAX INFORMATION The owner of record is listed on the Lee County Tax Roll as Babcock Property Holdings, LLC. c/o Kitson and Partners. The appraiser is aware of no arms length transactions or listings of the property over the previous three years. The following information is presented as it pertains to the subject property. Diversified Appraisal, Inc. 14 Lee County Lands - Parcel /

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33 Preface Diversified Appraisal, Inc. 27 Lee County Lands - Parcel /

34 Preface EXPOSURE TIME A reasonable exposure time is one of a series of conditions contained within the market value definition. Exposure time is always presumed to precede the effective date of the appraisal. Exposure Time may be defined as follows: The estimated length of time the property interest being appraised would have been offered on the market prior to the hypothetical consummation of sale at market value on the effective date of the appraisal; a retrospective estimate based upon an analysis of past events assuming a competitive and open market. It should be emphasized that exposure time is always presumed to occur prior to the effective date of the appraisal and is substantiated by related facts in the appraisal process: Supply/demand conditions as of the effective date of the appraisal; the use of current cost information; the analysis of historical sales information; and, the analysis of future income expectancies estimated from the effective date of the appraisal. Reasonable exposure period is a function of price, time, and use, not an isolated estimate of time alone. As an example, an over-priced property that has been on the market for several years does not constitute a reasonable marketing time. Only when this property is placed on the market at a reasonable price and is marketed aggressively does the time frame for it to sell then determine the reasonable exposure. Within this analysis, the appraiser has studied statistical information relating to days on market for the subject property type and attempted to gather information through sales verification as to exposure periods, as well as interviewed various market participants including brokers, property managers and buyers and sellers. Reasonable exposure period should be differentiated from reasonable marketing time whereas, again, reasonable exposure time is an historical event and reasonable marketing time is the period immediately after the effective date of the appraisal. Based on my conversations with market participants familiar with properties of this type, it is my opinion that an exposure time of 12 months is considered to be applicable for the subject property. Diversified Appraisal, Inc. 28 Lee County Lands - Parcel /

35 Preface Marketing Time is defined as follows: MARKETING TIME An opinion of the amount of time it might take to sell a real or personal property interest at the concluded market value level during the period immediately after the effective date of appraisal. The estimated marketing time (i.e. the amount of time it would most likely take to sell the subject property if exposed in the market beginning on the date of this valuation) is estimated to be approximately 12 months. OBJECTIVE OF THE APPRAISAL The purpose or objective of the appraisal is to estimate the market value of the subject property. DEFINITION OF MARKET VALUE Market value as set forth in Title 12 of the Code of Federal Regulations (f) is: 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: a. Buyer and seller are typically motivated. b. Both parties are well informed or well advised, and each acting in what they consider their own best interest. c. A reasonable time is allowed for exposure in the open market. d. Payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and e. The price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale. Diversified Appraisal, Inc. 29 Lee County Lands - Parcel /

36 Preface PROPERTY RIGHTS APPRAISED The property rights to be appraised is the fee simple estate. The Appraisal of Real Estate, 14th Edition, lists the following definitions: "Absolute ownership unencumbered by any other interest or estate, subject only to the limitations imposed by the governmental powers of taxation, eminent domain, police power and escheat." INTENDED USE / INTENDED USER OF THE APPRAISAL The intended use of the appraisal is understood to be for assisting the clients/users with acquisition activities and possible purchase of the subject property. The intended clients/users of this appraisal is Lee County - Department of County Lands. This is an Appraisal Report, which is intended to comply with the reporting requirements set forth under Standards Rule 2-2 of the Uniform Standards of Professional Appraisal Practice for an Appraisal Report. As this is an Appraisal Report, it reports discussions of the data, reasoning, and analyses that were used in the appraisal process to develop the appraiser's opinion of value. Supporting documentation concerning the data, reasoning, and analyses is retained in the appraiser's file. The depth of discussion contained in this report is specific to the needs of the client and for the intended use stated. The appraiser is not responsible for unauthorized use of this report. EXTRAORDINARY ASSUMPTIONS/HYPOTHETICAL CONDITIONS An extraordinary assumption is an assumption which if found to be false could alter the resulting opinion or conclusion. A hypothetical condition is an assumption made contrary to fact, but which is assumed for the purpose of discussion, analysis, or formulation of opinions. The subject size was provided to me. If that is not correct, then my value estimate could change. The subject property is zoned MPD, a Mixed Use Planned Development classification, with a Lee County Future Land Use classification of New Community for the upland portions, and Wetlands for the wetlands portion. I have been instructed to appraise the subject as if it is zoned AG-2, the uplands classified as DR/GR, and the wetlands classified as Wetlands by the Lee County Future Diversified Appraisal, Inc. 30 Lee County Lands - Parcel /

37 Preface Land Use Plan DATE OF VALUE ESTIMATE The subject property is appraised as of 9 November A detailed on-site inspection was made on that date by David C. Vaughan, MAI. DATE OF REPORT The date of the report is 27 November USE OF REAL ESTATE As of the date of value, the property is vacant land. Diversified Appraisal, Inc. 31 Lee County Lands - Parcel /

38 Regional and Local Analysis REGIONAL AND LOCAL ANALYSIS Diversified Appraisal, Inc. 32 Lee County Lands - Parcel /

39 Lee County Data LEE COUNTY DATA The Appraisal of Real Estate, 14th Edition, states that the value of real property reflects and is affected by the interaction of four basic forces that influence human activity. A. Social Forces B. Economic Forces C. Government Forces D. Environmental Forces The interaction of these forces influences the value of every parcel of real estate in the market. An understanding of value influencing forces is fundamental to the appraisal of real property. All statistical data was obtained from the Florida Statistical Abstract, unless otherwise stated. A. SOCIAL FORCES Social forces are those forces that are primarily exerted by population characteristics. The detailed study of the level and characteristics of an area's population is vital in order to understand the demand for real estate. Of primary importance are the overall population, change of population, and age distributions. Population levels and population fluctuations have a significant impact on property values. The population increases Lee County has experienced since 1960 is shown below: Diversified Appraisal, Inc. 33 Lee County Lands - Parcel /

40 Lee County Data YEAR TOTAL GROWTH SINCE , , % , % , % , % , % , % , % , % , % , % , % , % , % , % , % , % , % , % , % , % , % From 1960 to 2017, Lee County s population increased by 684,685, which is an increase of %. This continued rise in population has increased Lee County's density (including water area), from 67.9 persons per square mile in 1960, to nearly 826 persons per square mile in Lee County has 803 square miles of area. Lee County is tied for the 3 rd fastest growing county in the country and is experiencing nearly double Florida s growth rate. Diversified Appraisal, Inc. 34 Lee County Lands - Parcel /

41 Lee County Data Population increases typically have a favorable effect on the demand for real estate. Recently, Lee County population has increased. The effect of population on taxable values in Lee County is presented as follows: YEAR TOTAL TAXABLE PROPERTY VALUE (MILLIONS OF DOLLARS) 2007 $96, $84, $64, $55, $53, $52, $54, $58, $62, $64, $74,047.2 Source: Theresa Watts, Property Appraiser's Office As indicated, taxable property values are on the rise after a period of declining values from Diversified Appraisal, Inc. 35 Lee County Lands - Parcel /

42 Lee County Data LEE COUNTY MAP Diversified Appraisal, Inc. 36 Lee County Lands - Parcel /

43 Lee County Data B. ECONOMIC FORCES In analyzing the economic forces on property, the appraiser is concerned with current and expected supply/demand conditions, and the economic ability of the people to satisfy their demands. Effective demand is the desire for property coupled with the ability to purchase. Primary among considered variables are employment levels, income levels, the economic base of the region, the cost and availability of capital, housing starts, and ownership of housing. Economic Base: The economic base of an area has been defined as the activity of a community that enables it to attract income from outside of its borders. The dominant industries in Southwest Florida include construction/real estate, banking, tourism, agricultural, retail and service industries. Construction/Real Estate: The following table summarizes Lee County deeds and values over the past ten years. YEAR TOTAL NUMBER DEEDS TOTAL VALUE DEEDS IN MILLIONS ,743 13, ,567 5, ,640 5, ,708 5, ,602 5, ,680 5, ,199 6, ,921 7, ,930 9, ,029 9, ,250 9,326.8 The number of recorded deeds has been fairly steady since The following table summarizes the total value of Lee County permits over the past ten years. Diversified Appraisal, Inc. 37 Lee County Lands - Parcel /

44 Lee County Data Permit values increased in YEAR TOTAL PERMIT VALUES 2007 $2,273,999, $ 593,774, $ 331,691, $ 295,739, $ 382,368, $ 383,216, $ 510,150, $ 943,275, $ 947,408, $ 658,615, $ 713,124,872 Source: Cora Guerrier, Lee County Housing Starts: As previously mentioned, Lee County had been one of the fastest growing areas in the country. To keep pace with the ever-increasing population, additional housing is perpetually in demand. Over the past two decades, Lee County has been one of the top 50 fastest-growing metropolitan areas in the country and has often ranked in the top 10 hottest housing market, according to U.S. Housing Markets. According to the US Census, Cape Coral/Ft. Myers was the 9 th fastest growing metropolitan area in the country from The following chart details recent activity. LEE COUNTY HOUSING PERMITS YEAR SINGLE FAMILY ANNUAL % CHANGE , % , % % % , % , % , % , % , % , % , % Source: Market Watch Diversified Appraisal, Inc. 38 Lee County Lands - Parcel /

45 Lee County Data Unemployment: The following chart shows the various unemployment rates for the counties in Southwest Florida. During the peak years of the recession the unemployment rate for Lee County was over 12%. The most recent data indicates that unemployment is currently in the 4% range Charlotte County Collier County Glades County Hendry County Lee County Sarasota County Florida Source: U.S. Bureau of Labor Statistics Per Capita Income: The following chart shows the most recent information of per capita income for Southwest Florida Charlotte County 33,178 32,675 30,812 31,178 30,528 31,443 38,473 Collier County 59,736 60,251 51,641 51,755 51,455 51,371 84,101 Glades County 20,868 19,778 19,454 19,828 20,599 21,171 23,041 Hendry County 25,274 24,001 23,653 24,499 24,558 25,857 29,556 Lee County 38,557 37,884 36,851 36,804 37,353 34,886 45,768 Sarasota County 52,028 51,864 46,740 46,867 46,684 47,144 59,013 Source: Bureau of Economic and Business Research Diversified Appraisal, Inc. 39 Lee County Lands - Parcel /

46 Lee County Data The most recent single-family permit activity indicates an upward trend, which is a direct result of the decreasing housing supply. Diversified Appraisal, Inc. 40 Lee County Lands - Parcel /

47 Lee County Data Commercial Real Estate Economic Trends: The following charts show the economic trends for various sectors of the Lee County Real Estate market. The information from the various charts was obtained from CRE Consultants: Diversified Appraisal, Inc. 41 Lee County Lands - Parcel /

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55 Lee County Data Summary: Most market sectors are on the upswing. Any sectors that are showing temporary declines may be a direct result of a final surge of bank foreclosure sales. Diversified Appraisal, Inc. 49 Lee County Lands - Parcel /

56 Lee County Data Tourism: Tourism is considered an important part of Lee County's economic base. Recent tourism figures have indicated a downward trend in consumer spending due to the recession and ongoing economic downturn. C. GOVERNMENT FORCES Lee County is governed by a county commission composed of five commissioners elected to four year terms. Lee County contains six cities, each which have their own form of government, and each offering their own services. These cities include Fort Myers, Cape Coral, Sanibel, Bonita Springs, Fort Myers Beach, and the Village of Estero. Airport Activity: Page Field Airport, located adjacent to the southern city limits of Fort Myers, has two runways for private aircraft. The major commercial airlines use Southwest Florida International Airport located off of Treeline Avenue east of I-75 (Exit 21). Airlines providing service to Fort Myers include Air Berlin, Air Canada, Air Tran, American, American Eagle, Cape Air, Comefly, Delta, Delta Connection, Frontier, Jetblue, Southwest, Spirit, Sun Country, United, US Airways, and Westjet. In years when Easter falls in April (many tourists use Easter to signal the end of season and return home), the month of April can be considered as part of the peak tourist season. In these cases, as many people pass through the airports in the first four months as do in the remaining eight months. Therefore, airport passenger traffic is a major local economic indicator. Diversified Appraisal, Inc. 50 Lee County Lands - Parcel /

57 Lee County Data Total passenger traffic and freight over the past 10 years is indicated as follows: YEAR TOTAL PASSENGERS % INCREASE TOTAL FREIGHT (PDS) % INCREASE ,049, % 39,562, % ,603, % 33,787, % ,415, % 33,660, % ,514, % 34,168, % ,537, % 32,539, % ,350, % 33,830, % ,902, % 32,156, % ,970, % 33,469, % ,371, % 32,938, % ,604, % 32,104, % ,842, % 32,731, % As indicated, passenger counts have increased, while freight counts had a slight decrease in 2015 and Cargo carriers include AirBorne Express, Federal Express, and United Parcel Service. The Federal Aviation Administration ranks our airport the 8 th fastest growing airport in the nation. The airport has embarked on an ambitious ongoing expansion program, which includes a 685,000 square foot two-story, 28-gate passenger terminal that opened in D. ENVIRONMENTAL FACTORS Lee County is bordered by Hendry County to the east, Collier County to the south, and Charlotte County to the north. The county's western boundary is the Gulf of Mexico. Lee County contains a total of 803 square miles of land area and ±200 square miles of inland water area. Lee County is ranked 13 th in area in the state. A map of the county is indicated in this section of the report. There are six incorporated cities within Lee County; Fort Myers (the county seat), Cape Coral, Fort Myers Beach, Bonita Springs, the Village of Estero, and Sanibel Island. Other communities in the county include Diversified Appraisal, Inc. 51 Lee County Lands - Parcel /

58 Lee County Data Lehigh Acres, Alva, Tice, Olga, North Fort Myers and Bonita Springs. Lee County has a subtropical climate. The average temperature is 73.9 degrees, with a monthly mean high of 91.6 in the summer months and an average winter mean of 65.9 degrees. Temperature extremes are infrequent with only a rare freeze and few readings above the low to mid 90's. Rainfall averages just under 54 inches annually, with the heaviest rains during the summer months. The area is generally considered to be a very pleasant place to live. This has been reflected by the tremendous influx of residents to this area over the past few decades. Lee County has long been a popular place for tourists. The miles of sandy beaches, which include famous Sanibel and Captiva Islands, serve as vacation spots for a growing number of tourists from around the world. Fishing, shelling, boating, and skiing are popular activities, as the area has an abundance of navigable waterways and fishing areas. According to the Department of Commerce, Fort Myers Beach ranked second only to Fort Lauderdale in the number of students during spring break in the past decade. Lee County also has many parks and recreational facilities. There is also a wide variety of public and private golf courses. Lee and Collier Counties have continued to develop new golf courses to satisfy the demands of a growing population. According to National Golf Foundation figures, the corridor between Lee and Collier County has more holes per capita than any other area in the United States. Other amusement facilities or tourist attractions include the Shell Factory and the Edison-Ford Estates. Of special significance to Lee County is its location on the Gulf of Mexico and the presence of the Caloosahatchee River. Beaches are available at Sanibel and Captiva Islands, Fort Myers Beach, and Bonita Springs. The Caloosahatchee River runs west, from Lake Okeechobee to the Gulf of Mexico. Residential land located along the river is greatly enhanced in value by virtue of its waterfront view. Conclusion: All of the preceding factors contribute a vital part to the thriving, diversified economy of Lee County. The recent increases in population in Lee County indicate that the demand for both housing and support facilities should continue. The nation and Diversified Appraisal, Inc. 52 Lee County Lands - Parcel /

59 Lee County Data county endured a long period of recession recovery; however, the real estate market has returned to relatively healthy conditions. There were a record number of singlefamily foreclosures in , which was the result of lax loan standards and overzealous investors. Finally, foreclosures are now at a reasonable, stable level. The median home price in 2017 was $243,500, compared to $227,400 in 2016, which is an increase of 7.1%. Unemployment at the end of 2017 was 4.1%, down slightly from These market indicators suggest that the local economy continues to recover. Diversified Appraisal, Inc. 53 Lee County Lands - Parcel /

60 Market Area Analysis MARKET AREA ANALYSIS The definition of market area was taken from The Appraisal of Real Estate 14 th Edition, is as follows: The geographic or locational delineation of the market for a specific category of real estate, i.e., the area in which alternative, similar properties effectively compete with the subject property in the minds of probable, potential purchasers and users. This is opposed to a neighborhood which is a group of complimentary land uses; a related grouping of inhabitants, buildings, or business enterprises, or a district which is a market area characterized by one predominant land use, e.g., apartment, commercial, industrial, agricultural. In the analysis of the market area, an appraiser studies how value influences affect property. Market areas are defined by a combination of factors which include physical features, the demographic and socio-economic characteristics of the residents or tenants, the condition of the improvements (including age, upkeep, ownership, vacancy rates, and land use trends). A market area analysis requires an appraiser to identify the appropriate boundaries. This requires an inspection of the areas physical characteristics and a geological delineation of the area. Diversified Appraisal, Inc. 54 Lee County Lands - Parcel /

61 Market Area Analysis MARKET AREA MAP Diversified Appraisal, Inc. 55 Lee County Lands - Parcel /

62 Market Area Analysis Location: The subject property is located in what has historically been a rural area in Alva / North Fort Myers. The primary market area delineations are considered to be I-75 to the west, the Caloosahatchee River to the south, Hendry County to the east, and Charlotte County to the north. Similar land uses extend beyond these boundaries. In a sense, the general market area delineations could be considered to be all of North Fort Myers and all of Alva. Similar land uses are found in Alva and in the North Fort Myers area. The subject=s location is somewhat remote with respect to proximity to support services. Approximate driving distances to these support services are as follows: SR miles west I-75 8 miles west Market Area Shopping Facilities ± 6 miles southwest Riverdale High School ± 10 miles south As mentioned, the subject property is located in a rural area of Alva. The predominant land use in the area is residential development or agricultural land, with a typical homesite being 1 to 20 acres in size. The northerly two sections in Lee County in Township 43, Ranges 25, 26 & 27 has mostly been designated by the Lee County Future Land Use Plan as either Density Reduction/Groundwater Resource or Open Lands. This classification limits density to a maximum of 1 unit per 10 acres. Property values had historically ranged from a low of approximately $5,000 per acre, for larger acreage sales, to a high of approximately $12,000 per acre within the general subject market area. However, during 2004 to 2006, property values dramatically escalated to levels above $50,000 per acre for some parcels. Within the past several years, property values have dramatically declined and are now approaching historic price levels. The most recent sales are in the $6,000 to $11,000 per acre range depending on size. Diversified Appraisal, Inc. 56 Lee County Lands - Parcel /

63 Market Area Analysis Growth Patterns: A market area normally goes through 4 stages during its life. These 4 stages as indicated by the Appraisal of Real Estate, 14 th Edition, Page 136 are as follows: 1. Growth. A period during which the market area gains public favor and acceptance. 2. Stability. A period of equilibrium without marked gains or losses. 3. Decline. A period of diminishing demand. 4. Revitalization. A period of renewal, redevelopment, modernization, and increasing demand. Although the stages describe the market area's evolution in a general way, they should not always be overemphasized in providing guidelines to its trends. A market area does not necessarily have to go through the entire cycle of growth and decline. For instance, some market areas may go from a growth stage to a stability stage, and then enjoy a period of renewed growth due to favorable factors that may be occurring in the immediate area. Some market areas never go through a decline or revitalization period. Having a dramatic impact to the north of the subject market area is the Babcock Ranch parcel. The subject is part of this development. Developer Syd Kitson purchased the ±91,000 acre Babcock Ranch parcel in what was the biggest land deal in the history of Florida in After more than a year of negotiations, the state paid Kitson $350,000,000 to sell approximately 73,000 acres of the property. Kitson retains ownership in 17,608 acres of the property of which 13,630.6 acres are located in Charlotte County. Kitson is developing the Charlotte County portion before the Lee County portion, as he met considerable resistance in Lee County for the re-zoning and development of his property. Kitson has completed a development of regional impact for the portion located in Charlotte County and has been approved a total of 17,870 residential dwelling units, 2,925,943 square feet of retail area, 2,064,057 square feet of office area, 600 hotel rooms, 650,000 square feet of industrial space, 177 hospital beds, 418 units of assisted-living facilities, 54 holes of golf, and ancillary facilities such educational services, schools, and university research. The total development within Diversified Appraisal, Inc. 57 Lee County Lands - Parcel /

64 Market Area Analysis the Charlotte County area shall not exceed 17,870 dwelling units and 6,000,000 square feet of non-residential uses not including the educational service centers, schools, and university research facilities, which square footage will be additional. Overall, the Charlotte County portion shall have a density of 1.31 dwelling units per acre. Plans had called for the development to begin several years ago; however, the drastic slow down in the real estate market, specifically with respect to rural parcels similar to the subject parcel stalled development. Development has now begun on the property. Babcock Ranch has 7 home builders offering more than 50 home designs. There are various types of residential products being offered. New home contracts were 215 as of 1 October Prices range from $190,000 to $1,000,000. Babcock National, featuring an 18 hole golf course designed by Gordon Lewis will be the first golf course community. Commercial development includes Table & Tap restaurant, Slater s Goods and Provisions, Square Scoops, Curry Creek Outfitters, and the Babcock neighborhood school. There is a 440 acre solar farm that powers Babcock Ranch. The 75 megawatts FPL Babcock Ranch Solar Energy Center is being expanded to 150 megawatts, with the addition of 400 acres last year. Located in Lee County is a 1,569 acre parcel that Lee County purchased. This property was purchased for approximately $16,000 per acre in In November 2017, the remaining 4,157.2 acres in Lee County was approved for development of 1,630 dwelling units, 600 hotel rooms, and 1,170,000 square feet of commercial and retail uses. Access Systems: The general subject market area is primarily accessed by going east on North River Road, or north on Babcock Ranch Road to the primary subject neighborhood. Available Utilities: Utilities typically available in this market area include some public water, telephone, and electrical service. Public water, if available, is generally provided by Lee County Utilities, electrical service is provided by the Lee County Electric Cooperative, and telephone service is provided by Centurylink. Sewage is typically disposed of by on-site, privately-owned, package treatment plants for the higher density residential communities, and by septic tank and drainfield combinations for smaller Diversified Appraisal, Inc. 58 Lee County Lands - Parcel /

65 Market Area Analysis residential and commercial developments. The subject as part of Babcock Ranch could have access to their utilities and infrastructure if extended. Zoning: The subject property is zoned MPD, which is a Mixed Use Planned Development zoning classification in Lee County. I have been instructed to appraise the subject as if zoned AG-2. Future Land Use Plan Designation: 1,063.4 acres of the subject property is located within the New Community classification of the Lee County Future Land Use Plan, with acres classified as Wetlands. I have been provided with a FLUCCS Map from Johnson Engineering that was done in September 2018 that indicates the wetlands on the site. I have been instructed to appraise the subject as if the uplands were classified DR/GR (Density Reduction Groundwater Resource), and the wetlands classified as Wetlands. Conclusion: In conclusion, the subject property is located in Alva / North Fort Myers in a rural market area. The subject is part of the Babcock Ranch development. Diversified Appraisal, Inc. 59 Lee County Lands - Parcel /

66 Subject Analysis SUBJECT ANALYSIS Diversified Appraisal, Inc. 60 Lee County Lands - Parcel /

67 Subject Analysis DESCRIPTION OF REAL ESTATE APPRAISED Property Description: The subject property is located to the north of North River Road (S.R. 78), and to the east of Babcock Ranch Road (S.R. 31) in east Lee County, Florida. This location is at the southerly edge of the Charlotte County/Lee County line. The property contains 1,063.4 acres of uplands, and acres of wetlands, for a total of 1,519 acres. The subject property is zoned MPD, which is a Mixed Use Planned Development zoning classification in Lee County. The upland portion of the subject property is located within the New Community classification of the Lee County Future Land Use Plan, with the wetland portion classified as Wetlands. I have been instructed to appraise the subject as if it is zoned AG-2, the uplands classified as DR/GR, and the wetlands classified as Wetlands by the Lee County Future Land Use Plan. The Lee County portion of Babcock Ranch of which the subject is part of, contains 4,157.2 acres. It has been approved for 1,630 residential dwelling units, 600 hotel rooms, and 1,170,000 square feet of commercial and retail uses. Access to the subject property is via an easement from SR 78. Access to the parent tract is via SR 31. The subject on its own does not have access to SR 31. Utilities available to the area include telephone and electrical service. Water must be obtained by well and pump, while sewage must be disposed of by septic tanks subject to an approved percolation test. The subject as part of Babcock Ranch could eventually tie into their utilities. The subject property is not subject to any adverse easement or restricted covenants that I am aware of. The property is located within various Flood Zones as indicated by Community Map #12071C-0138F; #12071C-0139F; and #12071C-0143F, dated August 28, The location for the subject property is in Census Tract 301. Parcel Numbers and are located outside of the FIRM Floodway, while Parcel has 67.48% outside of the FIRM Floodway, and 32.52% in the Floodway. Diversified Appraisal, Inc. 61 Lee County Lands - Parcel /

68 Subject Analysis AERIAL MAP Diversified Appraisal, Inc. 62 Lee County Lands - Parcel /

69 Subject Analysis PROPERTY SKETCH Diversified Appraisal, Inc. 63 Lee County Lands - Parcel /

70 Subject Analysis SITE MAP Diversified Appraisal, Inc. 64 Lee County Lands - Parcel /

71 Subject Analysis FLUCFCS MAP Diversified Appraisal, Inc. 65 Lee County Lands - Parcel /

72 Subject Analysis FLOWWAYS MAP Diversified Appraisal, Inc. 66 Lee County Lands - Parcel /

73 Subject Analysis SPATIAL REPORTS Diversified Appraisal, Inc. 67 Lee County Lands - Parcel /

74 Subject Analysis Diversified Appraisal, Inc. 68 Lee County Lands - Parcel /

75 Subject Analysis Diversified Appraisal, Inc. 69 Lee County Lands - Parcel /

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80 Subject Analysis Diversified Appraisal, Inc. 74 Lee County Lands - Parcel /

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82 Subject Analysis Diversified Appraisal, Inc. 76 Lee County Lands - Parcel /

83 Subject Analysis Diversified Appraisal, Inc. 77 Lee County Lands - Parcel /

84 Subject Analysis Diversified Appraisal, Inc. 78 Lee County Lands - Parcel /

85 Analysis of Highest and Best Use ANALYSIS OF HIGHEST AND BEST USE When valuing a parcel of real estate, understanding market behavior is essential. When estimating market value, highest and best use identifies the most profitable use for the property. Highest and best use is defined in The Appraisal of Real Estate, 14th Edition, Page 333, as: The reasonably probable and legal use of vacant land or an improved property that is legally permissible, physically possible, appropriately supported, financially feasible, and that results in the highest value. The revised edition of the Real Estate Appraisal Terminology text defines highest and best use as follows: That reasonable and probable use that supports the highest present value, as defined, as of the effective date of the appraisal. Alternatively, that use, from among reasonably probable and legal alternative uses, found to be physically possible, appropriately supported, financially feasible, and which results in highest land value. The definition immediately above applies specifically to the highest and best use of land. It is to be recognized that in cases where a site has existing improvements on it, the highest and best use may very well be determined to be different from the existing use. The existing use will continue, however, unless and until land value in its highest and best use exceeds the total value of the property in its existing use. Implied within these definitions is recognition of the contribution of that specific use to community environment or to community development goals in addition to wealth maximization of individual property owners. Also implied is that the determination of highest and best use results from the appraiser's judgment and analytical skill, i.e., that the use determined from analysis represents an opinion, not a fact to be found. In appraisal practice, the concept of highest and best use represents the premise upon which value is based. In the context of most probable selling price (market value) another appropriate term to reflect highest and best use would be most probable use. In the context of investment value an alternative term would be most profitable use. Diversified Appraisal, Inc. 79 Lee County Lands - Parcel /

86 Analysis of Highest and Best Use Discussed in the above definitions is the concept of two types of highest and best use. Type 1, is the highest and best use of the site as though vacant and Type 2, is the highest and best use of the property as improved. Both the highest and best use as vacant and as improved require separate analysis. Highest and Best Use "As Vacant": The highest and best use analysis of the site as though vacant assumes that a site is either vacant or can be made so through demolition of the existing improvements. This analysis examines the type of improvement that is most appropriate on a particular site. To represent the highest and best use (as vacant or improved), four critical factors must be met. These factors include: 1. Legally permissible 2. Physically possible 3. Financially feasible 4. Maximally productive Legally Permissible: - The subject property is zoned MPD, which is a Mixed Use Planned Development zoning classification. The majority of the subject property is also located within the New Community Future Land Use classification. I have been instructed to appraise the subject as if it is zoned AG-2, the uplands classified as DR/GR, and the wetlands classified as Wetlands by the Lee County Future Land Use Plan. The DR/GR classification caps density at 1 unit per 10 acres, while the Wetlands caps density at 1 unit per 20 acres. Physically Possible: The subject property contains a total area of ±1,519 acres of land area. There is sufficient size to allow for residential development, agricultural use, or any type of future development. The physically possible uses are not considered to be overly restricted. Financially Feasible: The financially feasible uses for the subject property are (based on the instructed zoning of AG-2 and a Future Land Use classification of DR/GR for the uplands, and Wetlands for the wetlands) considered to be low density residential Diversified Appraisal, Inc. 80 Lee County Lands - Parcel /

87 Analysis of Highest and Best Use development, agricultural use, or speculation. residential development and agricultural use. There is demand for low density Maximally Productive: The maximally productive use for the subject property under the DR/GR and Wetlands classifications is considered to be consistent with the financially feasible use, or to develop the subject property with a low-density residential development, use for agricultural purposes, or speculation. Highest and Best Use - as Vacant: The highest and best use as vacant would be to develop the subject property with a low-density residential development, use for agricultural purposes, or speculation assuming it is zoned AG-2 with DR/GR and Wetlands land use classifications. Conclusion of Highest and Best Use: The highest and best use for the subject property is considered to be for a low density residential development, agricultural use or even speculation. Diversified Appraisal, Inc. 81 Lee County Lands - Parcel /

88 The Appraisal Process THE APPRAISAL PROCESS Typically, an improved property is valued using the three traditional approaches to value which are as follows: 1. Cost Approach 2. Sales Comparison Approach 3. Income Capitalization Approach The Cost Approach is based on the principle of substitution. This assumes that a buyer would not pay more than the cost of producing a substitute property with the same features and utility as the subject. This approach reflects the cost to construct a reproduction or replacement of the improvements, deduct depreciation on the structure from all causes, and add the land value. The Cost Approach is most applicable when valuing new improvements or when the property is considered to be improved with a special purpose use. On the other hand, when the improvements are old or there is no active market in vacant land sales, the Cost Approach tends to be more subjective and less reliable. The Sales Comparison Approach is also based on a theory of substitution and takes into consideration anticipation and contribution. This approach is most applicable when there has been a sufficient number of sales which are considered to be comparable to the subject. Verifiable and accurate data must be available for all sales. When large adjustments are necessary, this approach tends to lose validity. The Income Capitalization Approach is the process which converts anticipated benefits to be derived from the ownership of a property into a value estimate. The anticipated market income will be capitalized into a present value through the capitalization process. This approach is based on the theory of anticipation, contribution, and increasing and decreasing returns. Like the Sales Comparison Approach, this requires sufficient and accurate data with regard to income and expenses. The Income Diversified Appraisal, Inc. 82 Lee County Lands - Parcel /

89 The Appraisal Process Approach is typically the most reliable for the valuation of commercial properties as it mirrors investor's expectations and actions in the market. As the subject property is vacant land, the only applicable approach to value is the Sales Comparison Approach. Diversified Appraisal, Inc. 83 Lee County Lands - Parcel /

90 Land Valuation Analysis LAND VALUATION ANALYSIS The value of land is influenced by such principles as anticipation, change, supply and demand, substitution, and balance. Anticipation refers to the expectation of benefits in the future. Even if a parcel is not ready for development, the anticipation for future development creates value. Land value is substantially affected by supply and demand. When demand is low and the supply of available land is high prices are low. Conversely, when demand is high and the supply is low, prices rise. Even though the supply and demand affect value, it is the economic use of a site that determines its value. The price an entrepreneur can pay for a site is determined by the net income the improvements will earn, less the cost of construction. The value of a site can be estimated by one of many procedures. These include (1) The Sales Comparison Approach, (2) Allocation, (3) Extraction, (4) Subdivision Development, (5) Land Residual, and (6) Ground Rent Capitalization. Of the preceding approaches, the Sales Comparison Approach is the preferred method. This method of valuation is applicable for land that is actually vacant, or which is being considered as though vacant for appraisal purposes. This approach involves analyzing sales of similar parcels of land. The analysis should include adjusting the comparable sales for differences between the sale properties and the subject and reconciling the adjusted sale prices into a final value conclusion for the subject. Our firm has conducted an extensive search for comparable land tracts that have occurred in the subject market area or in an area of similar economic influence. All of the land sales have been verified with either the buyer, seller, broker, or the actual copy of the deed. The applicable unit of comparison in this instance is the price per acre. The following sales were selected as the most comparable and are presented here to be used as a data base in the valuation of the subject. Diversified Appraisal, Inc. 84 Lee County Lands - Parcel /

91 Land Valuation Analysis COMPARABLE LAND SALES MAP Diversified Appraisal, Inc. 85 Lee County Lands - Parcel /

92 Land Valuation Analysis COMPARABLE LAND SALE 1 DATE OF SALE: Pending WARRANTY DEED, RECORDING NUMBER: N/A GRANTOR: Harmony Estates, LLC, and Bonita LTD, c/o Vernon A. Ball GRANTEE: Lee County STRAP NUMBER(S): ; and others LEGAL DESCRIPTION: Lengthy legal in Sections 09 and 10, Township 44 South, Range 27 East, Lee County, Florida. Please see the Public Records of Lee County, Florida for a complete legal description. DESCRIPTION OF SALE PROPERTY: The sale property is located on the westerly side of Joel Boulevard, about 2 miles south of SR 80 in Lehigh Acres. Utilities available to the site include electricity and telephone service. ZONING: MPD FUTURE LAND USE PLAN CLASSIFICATION: Urban Community / Wetlands HIGHEST AND BEST USE: Mixed Use / Residential Development SALES PRICE: $3,873,300 FINANCING: Cash to Seller CASH EQUIVALENT SALES PRICE: $3,873,300 SIZE: 624 acres UNIT OF VALUE: $6,207 per acre COMMENTS: The appraiser is aware of no recorded arms length transactions of the property over the previous three years. The property had been listed for $5,300,000 and was on the market for ±1 year. The property has approvals for 1,750 dwelling units (760 single family and 990 multifamily), 280,000 square feet of commercial / retail floor area, 80,000 square feet of office floor area and a acre water treatment storage facility. Verified with Teresa Mann of County Lands. Diversified Appraisal, Inc. 86 Lee County Lands - Parcel /

93 Land Valuation Analysis Diversified Appraisal, Inc. 87 Lee County Lands - Parcel /

94 Land Valuation Analysis DATE OF SALE: September 2018 COMPARABLE LAND SALE 2 WARRANTY DEED, RECORDING NUMBER: GRANTOR: Karen Lynn Coleman GRANTEE: Pri-Car III, LLC STRAP NUMBER: LEGAL DESCRIPTION: Southwest 1/4 of Northeast 1/4 of Section 01 Township 43 South, Range 25 East, Lee County, Florida. Please see Instrument # in the Public Records of Lee County, Florida for a complete legal description. DESCRIPTION OF SALE PROPERTY: The sale property is located west of US 31, just south of the County line. The property has legal access to US 31 via Busbee Lane. Utilities available to the site include electricity and telephone service. ZONING: AG-2 FUTURE LAND USE PLAN CLASSIFICATION: DR/GR HIGHEST AND BEST USE: Low Density Residential SALES PRICE: $260,000 FINANCING: Cash to Seller CASH EQUIVALENT SALES PRICE: $260,000 SIZE: 40 acres UNIT OF VALUE: $6,500 per acre COMMENTS: The appraiser is aware of no recorded arms length transactions of the property over the previous three years. Verified with Rick Pritchett, the buyer. Approximately 70% of the site is wetlands. Diversified Appraisal, Inc. 88 Lee County Lands - Parcel /

95 Land Valuation Analysis Diversified Appraisal, Inc. 89 Lee County Lands - Parcel /

96 Land Valuation Analysis Diversified Appraisal, Inc. 90 Lee County Lands - Parcel /

97 Land Valuation Analysis DATE OF SALE: December 2017 COMPARABLE LAND SALE 3 WARRANTY DEED, INSTRUMENT NUMBER: GRANTOR: Babcock Property Holdings, LLC GRANTEE: Florida Power & Light Company PARCEL NUMBER(S): ; ; and LEGAL DESCRIPTION: Lengthy legal. See Instrument # in the Public Records of Charlotte County, Florida. DESCRIPTION OF SALE PROPERTY: The sale property is located to the east of SR 31, on the northerly portion of Babcock Ranch. Utilities available to the site include electricity and telephone service. ZONING: (BOZD) Babcock Overlay Zoning District FUTURE LAND USE PLAN CLASSIFICATION: Babcock Mixed Use HIGHEST AND BEST USE: Special Purpose SALES PRICE: $4,374,800 FINANCING: Cash to Seller CASH EQUIVALENT SALES PRICE: $4,374,800 SIZE: acres UNIT OF VALUE: $10,174 per acre COMMENTS: The appraiser is aware of no recorded arms length transactions of the property over the previous three years. The property was purchased by Florida Power & Light to utilize for electrical production. It was combined with a preexisting 440 acre site and together they provide electricity for Babcock Ranch. The property was reportedly 100% uplands. Verified with Greg Pankow, Operations Manager for Babcock Ranch. Diversified Appraisal, Inc. 91 Lee County Lands - Parcel /

98 Land Valuation Analysis Diversified Appraisal, Inc. 92 Lee County Lands - Parcel /

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111 Land Valuation Analysis DATE OF SALE: June 2017 COMPARABLE LAND SALE 4 WARRANTY DEED, RECORDING NUMBER: GRANTOR: ZREV Farms, LLC GRANTEE: GA-Pinnacle Cape Coral, LLC STRAP NUMBER: C LEGAL DESCRIPTION: Lengthy legal in Section 20, Township 43 South, Range 23 East, Lee County, Florida. Please see Recording # , in the Public Records of Lee County, Florida for a complete legal description. DESCRIPTION OF SALE PROPERTY: The sale property is located on the east side of Burnt Store Road. Utilities available to the site include electricity and telephone service. ZONING: AG-2 FUTURE LAND USE PLAN CLASSIFICATION: MUP-3D/MUP-C HIGHEST AND BEST USE: Residential Development SALES PRICE: $1,575,000 FINANCING: Cash to Seller CASH EQUIVALENT SALES PRICE: $1,575,000 SIZE: acres UNIT OF VALUE: $6, per acre COMMENTS: The appraiser is aware of no recorded arms length transactions of the property over the previous three years. The property reportedly had over 95% uplands. The buyers had purchased an adjoining 1,491 acre tract at auction for $3,049,500 or $2,044 per acre in April This purchase gave them frontage on Burnt Store Road for the adjoining tract. Information provided by Stan Stouder, broker with CRE Consultants. Diversified Appraisal, Inc. 105 Lee County Lands - Parcel /

112 Land Valuation Analysis Diversified Appraisal, Inc. 106 Lee County Lands - Parcel /

113 Land Valuation Analysis Diversified Appraisal, Inc. 107 Lee County Lands - Parcel /

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115 Land Valuation Analysis Diversified Appraisal, Inc. 109 Lee County Lands - Parcel /

116 Land Valuation Analysis COMPARABLE LAND SALE 5 DATE OF SALE: April 2017 WARRANTY DEED, INSTRUMENT NUMBER: GRANTOR: Crimson Tamiami Trail Holdings, LLC GRANTEE: Tuckers Point I Limited Partnership PARCEL ID: and LEGAL DESCRIPTION: Lengthy legal in Section 35, Township 41 South, Range 23 East, Charlotte County, Florida. Please see Instrument Number , in the Public Records of Charlotte County, Florida for a complete legal description. DESCRIPTION OF SALE PROPERTY: The sale property is located on the northeast corner of Tamiami Trail and Tuckers Grade. The property has frontage on I-75 as well. Utilities available to the site include electricity and telephone service. Water and sewer could be made available and ready by the developers in ±1 year. ZONING: PD HIGHEST AND BEST USE: Mixed Use Development SALES PRICE: $6,500,000 FINANCING: Cash to Seller CASH EQUIVALENT SALES PRICE: $6,500,000 SIZE: acres UNIT OF VALUE: $11,555 per acre COMMENTS: The appraiser is aware of no recorded arms length transactions of the property over the previous three years. Information provided by Ashley Broom, the listing broker at (941) The property was reportedly on the market for 568 days. The Lely Development Company out of Naples was the true purchaser. Joseph Bott, the president of the company stated they plan to build 2,400 residences, and 50 acres of commercial. The site is currently approved for 999 residential units and 22 acres of commercial. It is projected to take a year to add utilities to the site. Diversified Appraisal, Inc. 110 Lee County Lands - Parcel /

117 Land Valuation Analysis Diversified Appraisal, Inc. 111 Lee County Lands - Parcel /

118 Land Valuation Analysis Diversified Appraisal, Inc. 112 Lee County Lands - Parcel /

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127 Land Valuation Analysis DATE OF SALE: March 2017 COMPARABLE LAND SALE 6 WARRANTY DEED, RECORDING NUMBER: GRANTOR: MLIC Asset Holdings, LLC GRANTEE: Okeecrops, LLC STRAP NUMBER(S): ; ; ; and LEGAL DESCRIPTION: Lengthy legal in Sections 33, 34 27, Township 46 South, Range 27 East, Lee County, Florida. Please see Recording # in the Public Records of Lee County, Florida. DESCRIPTION OF SALE PROPERTY: The sale property is located at Carter Road. This location is south of Corkscrew Road. Utilities available to the site include electricity and telephone service. ZONING: AG-2 FUTURE LAND USE PLAN CLASSIFICATION: DR/GR HIGHEST AND BEST USE: Agricultural Use SALES PRICE: $2,000,000 FINANCING: Cash to Seller CASH EQUIVALENT SALES PRICE: $2,000,000 SIZE: acres UNIT OF VALUE: $5,356 per acre COMMENTS: The appraiser is aware of no recorded arms length transactions of the property over the previous three years. Information provided by Brian Beasley, broker with Saunders Real (863) Diversified Appraisal, Inc. 121 Lee County Lands - Parcel /

128 Land Valuation Analysis Diversified Appraisal, Inc. 122 Lee County Lands - Parcel /

129 Land Valuation Analysis Diversified Appraisal, Inc. 123 Lee County Lands - Parcel /

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135 Land Valuation Analysis Diversified Appraisal, Inc. 129 Lee County Lands - Parcel /

136 Land Valuation Analysis DATE OF SALE: December 2016 COMPARABLE LAND SALE 7 WARRANTY DEED, RECORDING NUMBER: GRANTOR: Regwin, LLC, Schmidt Landing, LLC, and Schmidt Downs, LLC GRANTEE: Bovine Breeze, LLC STRAP NUMBER(S): ; ; and LEGAL DESCRIPTION: Lengthy legal in Section 27, Township 46 South, Range 27 East, Lee County, Florida. Please see Recording # , in the Public Records of Lee County, Florida for a complete legal description. DESCRIPTION OF SALE PROPERTY: The sale property is located on Corkscrew Road, east of Lazy D Farm Road. This location is about 7 miles east of I-75. Utilities available to the site include telephone and electric. Water and sewer is available by well and septic. ZONING: AG-2 FUTURE LAND USE PLAN CLASSIFICATION: DR/GR / Wetlands HIGHEST AND BEST USE: Low Density Residential / Agricultural / or Conservation SALES PRICE: $1,350,000 FINANCING: Cash to Seller CASH EQUIVALENT SALES PRICE: $1,350,000 SIZE: acres UNIT OF VALUE: $6,750 per acre COMMENTS: The appraiser is aware of no recorded arms length transactions of the property over the previous three years. The property was licensed and permitted for an airstrip at the time of sale. The buyer plans to hold the property and use if for recreational purposes. Reportedly 60% of the site is uplands. Information provided by Todd Holman, broker with Woodyard & Associates at (239) Diversified Appraisal, Inc. 130 Lee County Lands - Parcel /

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141 Land Valuation Analysis Diversified Appraisal, Inc. 135 Lee County Lands - Parcel /

142 Land Valuation Analysis DATE OF SALE: November 2016 COMPARABLE LAND SALE 8 WARRANTY DEED, RECORDING NUMBER: GRANTOR: MM Properties of SW FL, LLC GRANTEE: Rodney J. Troyer, Trustee STRAP NUMBER(S): ; ; LEGAL DESCRIPTION: Lengthy legal in Section 7, Township 43 South, Range 25 East, Lee County, Florida. Please see Recording # , in the Public Records of Lee County, Florida for a complete legal description. DESCRIPTION OF SALE PROPERTY: The sale property is located on the east side of Slater Road. Utilities available to the site include water, electricity, and telephone service. ZONING: AG-2 / MH-1 FUTURE LAND USE PLAN CLASSIFICATION: Open Lands HIGHEST AND BEST USE: Residential Development SALES PRICE: $616,000 FINANCING: Cash to Seller CASH EQUIVALENT SALES PRICE: $616,000 SIZE: acres UNIT OF VALUE: $7,989 per acre COMMENTS:.96 acres of the property is zoned MH-1. The property previously sold in December 2014 for $505,000 according to Instrument Number Verified with Mark Vincent of M & M Properties. Diversified Appraisal, Inc. 136 Lee County Lands - Parcel /

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146 Land Valuation Analysis Diversified Appraisal, Inc. 140 Lee County Lands - Parcel /

147 Land Valuation Analysis COMPARABLE LAND SALE 9 DATE OF SALE: May 2016 WARRANTY DEED, RECORDING NUMBER: ; ; ; ; and GRANTOR: Roger S. Hale GRANTEE: Bayshore, LLC; 20 Sabal Palm, LLC; TPRI, LLC; TPR4, LLC; and TPT4, LLC, and NPRI, LLC STRAP NUMBER(S): ; ; and ; ; ; and LEGAL DESCRIPTION: Lots Lengthy legal in Section 23, Township 43 South, Range 25 East, Lee County, Florida. Please see Recording # in the Public Records of Lee County, Florida. DESCRIPTION OF SALE PROPERTY: The sale property is located on the north side of Bayshore Road. Utilities available to the site include electricity and telephone service. ZONING: AG-2 FUTURE LAND USE PLAN CLASSIFICATION: Rural / Wetlands HIGHEST AND BEST USE: Residential Development SALES PRICE: $746,750* FINANCING: Cash to Seller CASH EQUIVALENT SALES PRICE: $746,750* SIZE: acres UNIT OF VALUE: $6, per acre COMMENTS: The appraiser is aware of no recorded arms length transactions of the property over the previous three years. The size and price was verified with Randy Lauer, Broker with Re/Max Realty Group at (239) The property closed in multiple transactions. Randy stated that two houses and an additional building added $170,000 in value. The actual price was $916,750; however, $170,000 was attributable to the improvements. The sale was reported as an arm s length transaction. The purchase was Diversified Appraisal, Inc. 141 Lee County Lands - Parcel /

148 Land Valuation Analysis for acres; however, the buyer wanted to break it up in to as many parcels as possible. Diversified Appraisal, Inc. 142 Lee County Lands - Parcel /

149 Land Valuation Analysis Diversified Appraisal, Inc. 143 Lee County Lands - Parcel /

150 Land Valuation Analysis Diversified Appraisal, Inc. 144 Lee County Lands - Parcel /

151 Land Valuation Analysis Diversified Appraisal, Inc. 145 Lee County Lands - Parcel /

152 Land Valuation Analysis Diversified Appraisal, Inc. 146 Lee County Lands - Parcel /

153 Land Valuation Analysis Diversified Appraisal, Inc. 147 Lee County Lands - Parcel /

154 Land Valuation Analysis Diversified Appraisal, Inc. 148 Lee County Lands - Parcel /

155 Land Valuation Analysis Diversified Appraisal, Inc. 149 Lee County Lands - Parcel /

156 Land Valuation Analysis Diversified Appraisal, Inc. 150 Lee County Lands - Parcel /

157 Land Valuation Analysis Diversified Appraisal, Inc. 151 Lee County Lands - Parcel /

158 Land Valuation Analysis COMPARABLE LAND SALES GRID SALE 1 SALE 2 SALE 3 SALE 4 SALE 5 SALE 6 SALE 7 SALE 8 SALE 9 LOCATION: Joel Blvd. US 31 / Busbee Lane Babcock Ranch Burnt Store Rd Tamiami Trl & Tuckers Grade Carter Road Corkscrew Road Slater Road Bayshore Road SALE DATE: Pending 9/18 10/18 6/17 4/17 3/17 12/16 11/16 5/16 SALE PRICE: $3,933,094 $260,000 $4,374,800 $1,575,000 $6,500,000 $2,000,000 $1,350,000 $616,000 $746,750 LAND AREA (Acres) PRICE PER ACRE $6,200 $6,500 $10,174 $6, $11,555 $5,356 $6,750 $7,989 $6, NON-PHYSICAL ADJUSTMENTS: FINANCING Cash to Seller Cash to Seller Cash to Seller Cash to Seller Cash to Seller Cash to Seller Cash to Seller Cash to Seller Cash to Seller 0% 0% 0% 0% 0% 0% 0% 0% 0% CONDITIONS OF SALE Arm s Length Arm s Length Arm s Length Arm s Length Arm s Length Arm s Length Arm s Length Arm s Length Arm s Length 0% 0% 0% 0% 0% 0% 0% 0% 0% EXPENDITURES AFTER PURCH. None None None None None None None None None 0% 0% 0% 0% 0% 0% 0% 0% 0% MARKET CONDITIONS/TIME 0% 0% 0% 0% 0% 0% 0% 0% 0% NET ADJUSTMENTS MARKET COND. ADJ. SALE PRICE $6,200 $6,500 $10,174 $6,157 $11,555 $5,356 $6,750 $7,989 $6,864 COMPATIBILITY: Superior Smaller Superior Comparable Superior Comparable Comparable Superior Superior Diversified Appraisal, Inc. 152 Lee County Lands - Parcel /

159 Land Valuation Analysis Conclusion: In this instance, no adjustment was required for financing, conditions of sale, expenditures made immediately after purchase, or market conditions/time. The sales presented are considered to be the best available. The sales range from a low of $5,356 per acre to a high of $11,555 per acre. Comparable Sale 1 is the pending sale of a 624 acre parcel located on the westerly side of Joel Boulevard, about 2 miles south of SR 80 in Lehigh Acres. The property was just put under contract by Lee County for $3,873,300 or $6,207 per acre. The property is considered to be extremely comparable to the subject in that it is a rural large acreage site. The subject will be influenced by its proximity to Babcock Ranch, whereas the sale property is influenced by its proximity to Lehigh and the surrounding development. The sale is considered to be superior to the subject property with respect to zoning as the sale property has approvals for 1,750 dwelling units as well as commercial and office space. The site was a very unique site in that had been previously mined and was covered with extensive lakes and ponds throughout the parcel. The property was an openly negotiated transaction for 20/20 purposes. Lee County based their offer on two appraisals done for the property. Overall, this sale is considered to be very representative of the value for the subject property as it is a pending sale for a very similar parcel with respect to size and location. Although the sale property was approved for 1,750 dwelling units, I question whether there is significant demand to justify the development of the sale property, and therefore, the highest and best use is more likely for low-density residential development due to demand limited restrictions. Still, this sale is superior to the subject with respect to zoning. Comparable Sale 2 is a recent sale that occurred in September 2018, to the west of the subject property. The sale property is located west of US 31, just south of the County line. The property has legal access to US 31 via Busbee Lane. The property is a 40 acre tract purchased for $260,000 or $6,500 per acre. Reportedly, 70% of the site is wetlands area. Overall, this sale is considered to be significantly different from the subject with respect to size and inferior with respect to upland/wetlands conditions. The property is presented as it is a relatively large acreage sale that occurred extremely Diversified Appraisal, Inc. 153 Lee County Lands - Parcel /

160 Land Valuation Analysis recent in time in the primary subject neighborhood. The indicated price of $6,500 per acre will be given consideration in the valuation of the subject property. Comparable Sale 3 sold in December 2017 for $4,374,800 or $10,174 per acre. This sale is from the developers of Babcock Ranch to Florida Power & Light Company. The property was purchased for use as a solar farm. It will be added to the existing ±440 acre solar farm. Overall, this sale is considered to be superior to the subject property with respect to development potential, and uplands. The subject is about 30% wetlands. Therefore, the indicated price of $10,174 per acre is considered to be representative of the high end of the value range for the subject property due to the superior topographical conditions and highest and best use. Comparable Sale 4 sold in June 2017 for $1,575,000 or $6, per acre. The property is a acre site located on the east side of Burnt Store Road in the northwesterly portion of Cape Coral. The buyers had purchased the adjoining 1,491 acre tract at auction for $3,049,500 or $2,044 per acre in April This sale gave them control over approximately 1,750 acres. The sale property is considered to be superior to the subject in that it fronts on Burnt Store Road, and in that it was approved for a mixed use development that allowed up to 224 residential units, and an extremely large amount of non-residential square footage as well. The buyer does plan to eventually develop the site with a mixed-use development. The water situation was considered somewhat troublesome as Cape Coral had no plans to currently expand water to the neighborhood; however, Charlotte County had conversation with agencies discussing the possibility of providing water to the neighborhood. Still, it appears that no water will be available to the neighborhood for years to come. Therefore, this sale would be similar to the subject in that it would be purchased primarily for future development even with the highest and best use for future residential development. Overall, because this is a large acreage sale size, and because of the numerous other areas of similarities, the indicated price of $6, per acre will be given very strong consideration in the valuation of the subject property. Diversified Appraisal, Inc. 154 Lee County Lands - Parcel /

161 Land Valuation Analysis Comparable Sale 5 sold in April 2017 for $6,500,000 or $11,555 per acre. The property is a acre tract located at the Tuckers Grade interchange in Charlotte County. The sale property benefits from frontage on I-75, US 41, and Tuckers Grade. The property is considered to be very superior to the subject property with respect to proximity to surrounding developments, accessibility, and development potential. At the time of sale, the property was approved for 999 residential units, and 22 acres of commercial development. The purchasers of the property plan to try to change the zoning on the property to allow for 2,400 residences and 50 acres of commercial development. The indicated price of $11,555 per acre clearly sets the high end of the value range for the subject property as the sale property is considered to be significantly superior to the subject property with respect to location and development potential. Comparable Sale 6 sold in March 2017 for $2,000,000 or $5,356 per acre. The property was improved with an orange grove; however when verifying this sale with the broker, he indicated the orange grove added minimal value. Because the property was farmed, the upland/wetland situation is considered to be superior to the subject in that the majority of the property is upland area. The listing agent Brian Beasley indicated that the property was listed at market and sold at market even though it was a foreclosed upon asset owned by Metropolitan Life Insurance Corporation. The indicated price is considered to be representative of the market value of the subject property due to the areas of comparability, especially with respect to size, zoning, and DR/GR Lee County Future Land Use classification; however, the property is superior to the subject with respect to upland/wetlands. Comparable Sale 7 sold in December 2016 for $1,350,000. The property contains a total of acres and sold for an indicated price of $6,750 per acre. This sale was verified with Todd Holman, a broker with Woodyard & Associates. The property is considered to be very comparable to the subject in that it is located in an area classified by the future land use plan as DR/GR, as well as it is a large acreage very recent sale of a comparable rural property. Overall, the indicated price of $6,750 per acre will be given strong consideration in the valuation of the subject property. Diversified Appraisal, Inc. 155 Lee County Lands - Parcel /

162 Land Valuation Analysis Comparable Sale 8 sold in November 2016 for $616,000. The property is located on Slater Road. I appraised this property on several occasions. The property, which contains a total of acres, has a zoning of AG-2. The future land use classification is Open Lands. Even though the property is zoned AG-2, it could be developed at a density of 1 unit per acre, and therefore it is considered to be superior to the subject property is this respect. Also, this property is significantly smaller than the subject property; however, it is presented as there has been relatively few large acreage transactions in the North Fort Myers area. The indicated price of $7,989 per acre is considered to be representative of the high end of the value range for the subject property. Comparable Sale 9 sold in May 2016 for $746,750 or $6, per acre. This is a significantly smaller sale than the subject property located in an area closer to development. This sale property is considered to be superior to the subject property with respect to development potential/zoning, but significantly different from the subject property in that it only contains acres. The indicated price of $6, per acre will be given consideration in the valuation of the subject property. In addition to the sales presented within the report, I am also aware of the Edison Farms property that was purchased by the County in November This sale that indicated slightly over $10,500 per acre is far superior to the subject with respect to location with I-75 frontage and a location between Estero and Bonita Springs, in one of the premier areas for development in Lee County. The subject is located in a rural remote location. The subject property is extremely difficult to value due to its very unique location and larger size. There have been relatively few large acreage comparable tracts that have sold in the area within the past several years. I presented the sales that I considered to be most similar to the subject property. The two sales that indicated the high end of the value range, specifically Sales 3 and 5 are considered to be significantly superior to the subject property. Both of these sales require substantial downward adjustments for location/development potential. Sale 3 was reportedly 100% uplands. Sale 8 is also Diversified Appraisal, Inc. 156 Lee County Lands - Parcel /

163 Land Valuation Analysis clearly superior to the subject with respect to location and zoning. When reconciling the final value estimate it is important to recognize that it is not appropriate to take an average of the sale price per acre of the various sales. Some sales are clearly significantly superior to the subject property and are presented primarily to set the upper end of the value range for the subject. In this instance, as mentioned, Sale 5 is significantly superior to the subject in almost every aspect including location, topographical conditions, zoning, availability of utilities, and access. Clearly, this sale would require substantial negative adjustments. To average it with more comparable sales would be wrong. The remaining sales are considered to be most comparable to the subject property with respect to value potential. They tend to form a very narrow range around $6,500 per acre. I am appraising the subject without any entitlements. After considering the preceding sales, it is my opinion that the market value for the subject property is $6,500 per acre. Multiplying this unit of value by the size of the subject, I obtain the following value estimate: ±1,519 acres x $6,500 per acre = $9,873,500 Rounded to, Say $9,875,000 Diversified Appraisal, Inc. 157 Lee County Lands - Parcel /

164 Appraisal Certification APPRAISAL CERTIFICATION I certify that, to the best of my knowledge and belief: The statements of fact contained in this report are true and correct. The reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions and are my personal, impartial, and unbiased professional analyses, opinions, and conclusions. I have no present or prospective interest in the property that is the subject of this report and no personal interest with respect to the parties involved. I have no bias with respect to the property that is the subject of this report or to the parties involved with this assignment. My engagement in this assignment was not contingent upon developing or reporting predetermined results. My compensation for completing this assignment is not contingent upon the development or reporting of a predetermined value or direction in value that favors the cause of the client, the amount of the value opinion, the attainment of a stipulated result, or the occurrence of a subsequent even directly related to the intended use of this appraisal. 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 Standards of Professional Appraisal Practice of the Appraisal Institute.. The reported analyses, opinions, and conclusions were developed, and this report has been prepared in conformity with the Uniform Standards of Professional Appraisal Practice. The use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representatives. I have made a personal inspection of the property that is the subject of this report. Diversified Appraisal, Inc. 158 Lee County Lands - Parcel /

165 Appraisal Certification No one provided significant real property appraisal assistance to the person signing this certification. I have not appraised the subject property in the past 3 years. As of the date of this report, I have completed the continuing education program of the Appraisal Institute It is my opinion that the market value of the undivided fee simple interest of the subject property, "as if zoned AG-2, with Lee County Future Land Use Classifications of DR/GR for the uplands, and Wetlands as wetlands", as of 9 November 2018, is: NINE MILLION EIGHT HUNDRED SEVENTY FIVE THOUSAND DOLLARS($9,875,000) David C. Vaughan, MAI State-Certified General Real Estate Appraiser RZ 569 Diversified Appraisal, Inc. 159 Lee County Lands - Parcel /

166 Addenda ADDENDA Diversified Appraisal, Inc. 160 Lee County Lands - Parcel /

167 Addenda NOTICE TO PROCEED Diversified Appraisal, Inc. 161 Lee County Lands - Parcel /

168 Addenda Diversified Appraisal, Inc. 162 Lee County Lands - Parcel /

169 Addenda Diversified Appraisal, Inc. 163 Lee County Lands - Parcel /

170 Addenda LEGAL DESCRIPTION Diversified Appraisal, Inc. 164 Lee County Lands - Parcel /

171 Addenda Diversified Appraisal, Inc. 165 Lee County Lands - Parcel /

172 Addenda Diversified Appraisal, Inc. 166 Lee County Lands - Parcel /

173 Addenda ASSUMPTIONS AND LIMITING CONDITIONS This appraisal is to be used in whole and not in part. No part of this appraisal shall be used in conjunction with any other appraisal. Marketable title is assumed although we are unable to render a legal opinion. This appraisal represents the best opinion of the evaluators as to market value of the property as of the appraisal date. The term "market value" is defined in the appraisal report. The appraisers have no present or prospective interest in the property that is the subject of this report, and have no interest or bias with respect to the parties involved. Our 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 Practice of the Appraisal Institute. 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 our personal, unbiased professional analyses, opinions, and conclusions. It is assumed that the legal descriptions as given are correct, that the improvements are entirely and correctly located on the property described and that there are no encroachments or overlapping boundaries. Unless stated otherwise, legal access to the property is assumed. An investigation, but no survey has been made. No engineering survey was made or caused to be made by the appraisers. If no recent certified survey was provided, this appraisal is made subject to same. Any estimates of fill or other site work are based on visual observation, and accuracy is not guaranteed. No test borings or typing and analysis of sub-soils were made or caused to be made by the appraisers. Soil of the parcel under appraisement appears firm and solid, typical for the area; and subsidence in the area is unknown or uncommon. The appraisers, however, cannot warrant against such conditions or occurrence. The consideration for the preparation of this appraisal report is the payment by the employer of all charges due the appraiser in Diversified Appraisal, Inc. 167 Lee County Lands - Parcel /

174 Addenda connection therewith. Any responsibility of the appraiser for any part of the report is conditioned upon full and timely payment. No environment impact studies were either requested or made in conjunction with this appraisal, and the appraiser hereby reserves the right to alter, amend, revise, or rescind any of the value opinions based upon any subsequent environmental impact studies, research or investigation. The appraiser herein, by reason of this report, is not required to give testimony or attendance in court or any governmental hearing with reference to the property appraised, unless arranged previously. Information as to the type and variety of trees, shrubs, and other vegetation mentioned in the report are believed correct from observation and personal knowledge, but no responsibility is assumed for complete accuracy. Description and condition of physical improvements that add contributory value to the subject, if any, described herein are based on visual observation. As no engineering tests were conducted, no liability can be assumed for soundness of structural components including but not limited to roof, electrical wiring, plumbing, HVAC systems, and mechanical systems. The appraisers have carefully inspected any improvements that add contributory value to the subject described in the report, and any reference as to termites, dry rot, wet rot, or other infestation was reported as a matter of information by the appraisers; and existence or amount of damage noted, if any, is not guaranteed and the appraisers expressly disclaim any responsibility relating thereto. Inspection by a reputable pest control company is recommended for any existing improvement. All value estimates have been made contingent on zoning regulations and land use plans in effect as of the date of appraisal, and based on information provided by governmental authorities and employees. This appraisal report covers only the premises herein, and no figures provided, analysis thereof, or any unit values derived therefrom are to be construed as applicable to any other property, however similar they may be. Distribution of the total valuation in this report between land and improvements (if applicable) applies only under the existing program of utilization. Separate valuations Diversified Appraisal, Inc. 168 Lee County Lands - Parcel /

175 Addenda of land and improvements must not be used in any other manner, nor in conjunction with any other appraisal, and are invalid if so used. Certain data used in compiling this report was furnished by the client, his counsel, employees, and/or agent, or from other sources believed reliable. Data has been checked for accuracy as possible, but no liability or responsibility may be assumed for complete accuracy. No responsibility is assumed for matters legal in nature, nor is any opinion rendered herein as to title, which is assumed to be good and merchantable. The property is assumed free and clear of all liens and encumbrances, unless specifically enumerated herein, and under responsible ownership and management as of the appraisal date. Neither all nor any portion of the contents of this appraisal shall be conveyed to the public through advertising, public relations, news, sales, and other media without the written consent and approval of the appraisers, particularly as to valuation conclusions, identity of the appraisers or firm with which they are connected, or any reference to the Appraisal Institute, or the MAI designation. Furthermore, neither all nor any portion of the contents of this appraisal shall be used in connection with any offer, sale or purchase of a security (as that term is defined in Section 2 [1] of the Securities Act of 1993) without the prior express written consent of the appraiser. Possession of this report or copy thereof does not convey any right or reproduction or publication, nor may it be used by any but the client, the mortgagee, or its successors or assigns, mortgage insurers, or any state or federal department or agency without the prior written consent of both the client and the appraisers, and in any event, only in its entirety. Before any loans or commitments are made predicated on value conclusions reported in this appraisal, the mortgagee should verify facts and valuation conclusions contained in this report with the appraisers. Unless specifically stated in the report, the appraisers did not determine the flood plain status of the property appraised. If such data is available, it is recommended it be obtained prior to any development that might be contemplated. Diversified Appraisal, Inc. 169 Lee County Lands - Parcel /

176 Addenda Estimates of expenses, particularly as to assessment by the county property appraisers and subsequent taxes, are based on study of historical or typical data. Such estimates are based on assumptions and projections which, as with any prediction, are affected by external forces, many unforeseeable. While all estimates are based on our best knowledge and belief, no responsibility can be assumed that such projections will come true. The use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representative. No one provided significant professional assistance other than the person(s) signing this report. Any forecasts or projections included in this report (if applicable) are used to assist in the valuation process and are based on current market conditions, anticipated short-term supply and demand factors, and a continued stable economy. These forecasts are therefore subject to changes in future conditions, which cannot be accurately predicted by the appraiser and could affect the future income and/or value forecasts. Radon is a naturally occurring radioactive gas that, when it has accumulated in a building in sufficient quantities, may present health risks to persons who are exposed to it over time. Levels of radon that exceed federal and state guidelines have been found in buildings in Florida. Additional information regarding radon and radon testing may be obtained from your county public health unit. The appraiser is not qualified to detect hazardous 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 materials may affect the value of the property. The appraiser's value estimate is predicated on the assumption that there is no such materials or substances on the site. No responsibility is assumed for any environmental conditions, or for any expertise or engineering knowledge required to discover them. The appraiser's description and resulting comments are the result of the routine observations made during the appraisal process. Diversified Appraisal, Inc. 170 Lee County Lands - Parcel /

177 Addenda Unless otherwise stated in this report, the subject property is appraised without a specific compliance survey having been conducted to determine if the property is or is not in conformance with the requirements of the Americans with Disabilities Act. The presence of architectural and communications barriers that are structural in nature that would restrict access by disabled individuals may adversely affect the property's value, marketability, or utility. Any proposed improvements (if applicable) are assumed to be completed in a good workmanlike manner in accordance with the submitted plans and specifications. No opinion is expressed as to the value of subsurface oil, gas or mineral rights, if any, and we have assumed that the property is not subject to surface entry for the exploration or removal of such materials, unless otherwise noted in our appraisal. The analyst is not an expert with respect to subsurface conditions, and would recommend that an expert be consulted. Diversified Appraisal, Inc. 171 Lee County Lands - Parcel /

178 Addenda QUALIFICATIONS OF THE APPRAISER DAVID C. VAUGHAN, MAI EDUCATIONAL BACKGROUND AND TRAINING MBA (Finance), University of Florida, Gainesville, Florida, Bachelor of Arts in Economics, Davidson College, Davidson, North Carolina, Real Estate Appraisal Principles, Course Number 1A-1, given by the American Institute of Real Estate Appraisers, Eckerd College, St. Petersburg, Florida, 1983 Basic Valuation Procedures, Course Number 1A-2, given by the American Institute of Real Estate Appraisers, Eckerd College, St. Petersburg, Florida, 1983 Capitalization Theory and Techniques, Part A, Course Number 1B-A, given by the American Institute of Real Estate Appraisers, Orlando, Florida, 1986 Capitalization Theory and Techniques, Part B, Course Number 1B-B, given by the American Institute of Real Estate Appraisers, Daytona Beach, Florida, 1986 Standards of Professional Practice, given by the American Institute of Real Estate Appraisers, Daytona Beach, Florida, 1986 Case Studies in Real Estate Valuation, Course Number 2-1, University of Georgia, 1987 Valuation Analysis and Report Writing, Course Number 2-2, given by the American Institute of Real Estate Appraisers, University of Georgia, 1987 Seminar - Valuation and Evaluation of Proposed Projects, given by the American Institute of Real Estate Appraisers, Fort Myers, Florida, October 1987 Standards of Professional Practice Part A & B, given by the American Institute of Real Estate Appraisers, Fort Myers, Florida, June 1991 Rates, Ratios and Reasonableness, given by the American Institute of Real Estate Appraisers, Fort Myers, Florida, March 1992 Seminar - Appraising Troubled Properties, given by the American Institute of Real Estate Appraisers, Fort Myers, Florida, May 1992 Seminar - HP12c Calculator, given by Lee and Grant, Fort Myers, Florida, October 1992 Seminar - Discounted Cash Flow Analysis, given by the Appraisal Institute, Fort Myers, Florida, November 1993 Diversified Appraisal, Inc. 172 Lee County Lands - Parcel /

179 Addenda Seminar - Understanding Limited Appraisals and Reporting Options, General, given by the Appraisal Institute, Fort Myers, Florida, July 1994 Seminar - Appraisal Law, given by Lee and Grant, Instructor-Steve Patton, MAI, Sarasota, Florida, September 1994 Seminar - Income and Cost Approach/Valuation of Partial Interests, by Fort Myers Association of Realtors, Fort Myers, Florida, November 1994 Seminar - Americans with Disabilities Act, by the Appraisal Institute, Fort Myers, Florida, November 1994 Seminar - Rates, Ratios and Reasonableness, by William H. Reeve, MAI, Tampa, Florida, March 1995 Seminar - Appraisal of Retail Properties, by the West Coast Florida Chapter of the Appraisal Institute, Tampa, Florida, February 1996 Seminar - Fair Lending and the Appraiser, by the South Florida-Caribbean Chapter of the Appraisal Institute, Pompano Beach, Florida, March 1996 Seminar - Litigation Skills For The Appraiser: An Overview, by the West Coast Florida Chapter of the Appraisal Institute, Tampa, Florida, September 1997 Seminar - Appraising From Blueprints and Specifications, by the West Coast Florida Chapter of the Appraisal Institute, June 1998 Seminar - 7-Hour USPAP CORE Law for Appraisers, by West Coast Florida Chapter of the Appraisal Institute, Fort Myers, Florida, September 1998 Course - Standards of Professional Practice, Part C, by West Coast Florida Chapter, April 1999 Seminar - Attacking & Defending An Appraisal In Litigation by West Coast Florida Chapter of the Appraisal Institute, Longboat Key, Florida, June 2000 Seminar - 7-Hour USPAP/Law for Appraisers, by West Coast Florida Chapter of the Appraisal Institute, Ft. Myers, Florida, September 2000 Seminar - State of the Valuation Profession, by the West Coast Florida Chapter of the Appraisal Institute, Ft. Myers, Florida, April 2001 Seminar - Regression Analysis in Appraisal Practice: Concepts & Apps., by the West Coast Florida Chapter of the Appraisal Institute, Sarasota, Florida, June 2001 Diversified Appraisal, Inc. 173 Lee County Lands - Parcel /

180 Addenda Seminar - When Good Houses Go Bad by West Coast Florida Chapter of the Appraisal Institute, Ft. Myers, Florida, September 2001 Seminar - Appraisal and Real Estate Lending, What Every Banker Should Know, by the West Coast Florida Chapter of the Appraisal Institute, St. Petersburg, Florida, October 2001 Seminar - Appraisal Consulting by West Coast Florida Chapter of the Appraisal Institute, St. Petersburg, Florida, March 2002 Seminar - Florida State Law & USPAP by West Coast Florida Chapter of the Appraisal Institute, Ft. Myers, Florida, April 2002 Seminar - How to Evaluate the Ugly Home by West Coast Florida Chapter of the Appraisal Institute, Ft. Myers, Florida, September 2002 Seminar - Residential Demonstration Appraisal Report Writing Seminar by West Coast Florida Chapter of the Appraisal Institute, St. Petersburg, Florida, November 2002 Seminar - Analyzing Commercial Lease Clauses, by West Coast Florida Chapter of the Appraisal Institute, St. Petersburg, Florida, November 2002 Seminar - Rates and Ratios: Making Sense of GIM s, OAR s, and DCF s, by West Coast Florida Chapter of the Appraisal Institute, Ft. Myers, Florida, September 2003 Seminar - The Emerging Mark-to-Market: Valuation for Financial Reporting, by West Coast Florida Chapter of the Appraisal Institute, Ft. Myers, Florida, September 2003 Seminar - Florida State Law for Real Estate Appraisers, by West Coast Florida Chapter of the Appraisal Institute, Tampa, Florida, February 2004 Seminar - 7-Hour National USPAP Update Course, by West Coast Florida Chapter of the Appraisal Institute, Tampa, Florida, February 2004 Seminar - The Valuation of Wetlands, by West Coast Florida Chapter of the Appraisal Institute, Ft. Myers, Florida, September 2004 Seminar - Uniform Appraisal Standards for Federal Land Acquisitions, by West Coast Florida Chapter of the Appraisal Institute, Florida, 2004, 2017 Seminar - Case studies in Commercial Highest and Best Use, by West Coast Florida Chapter of the Appraisal Institute, Fort Myers, Florida, September 2005 Seminar - Market Analysis and the Site to do Business, b West Coast Florida Chapter of the Appraisal Institute, Tampa, Florida, November 2005 Diversified Appraisal, Inc. 174 Lee County Lands - Parcel /

181 Addenda Update Course - USPAP, by West Coast Florida Chapter of the Appraisal Institute, Fort Myers, Florida, August 2006 Seminar - Florida State Law for Real Estate Appraisers, by West Coast Florida Chapter of the Appraisal Institute, Fort Myers, Florida, August 2006 Seminar - Business Practices and Ethics, by West Coast Florida Chapter of the Appraisal Institute, Fort Myers, Florida, November 2006 Seminar - Reappraising, Readdressing and Reassigning, by West Coast Florida Chapter of the Appraisal Institute, Fort Myers, Florida, May 2007 Seminar - Real Estate Finance, Statistics & Valuation Modeling, by West Coast Florida Chapter of the Appraisal Institute, Tampa, Florida, August 2007 Seminar - Litigation Skills for the Appraiser, Appraisal Institute, Fort Myers, Florida, March 2008 Seminar - 7-Hour Nation USPAP Update Course, Appraisal Institute, Fort Myers, Florida, May 2008 Seminar - Florida Supervisor Trainee Roles and Rules, Appraisal Institute Region X, Fort Myers, Florida, May 2008 Seminar - Florida State Law Update for Real Estate Appraisers, Appraisal Institute Region X, Fort Myers, Florida, May 2008 Seminar - 7-Hour Appraisal of Local Retail Properties, Appraisal Institute, Fort Myers, Florida, May 2009 Course - Condemnation Appraising: Principles and Applications, Appraisal Institute, Tampa, Florida, October 2009 Seminar - 7 Hour National USPAP Update Course, Fort Myers, Florida, May 2010 Florida Law Update for Real Estate Appraisers, Fort Myers, Florida, May 2010 Florida Supervisor / Trainee Roles and Rules, Fort Myers, Florida, May 2010 Seminar - Uniform Appraisal Data Set, by West Coast Florida Chapter of the Appraisal Institute, Fort Myers, Florida, August 2011 Seminar - Analyzing Tenant Credit Risk, by West Coast Florida Chapter of the Appraisal Institute, Lakewood Ranch, Florida, September 2011 Diversified Appraisal, Inc. 175 Lee County Lands - Parcel /

182 Addenda Seminar - Appraisal Curriculum Overview, (2-Day General), West Coast Florida Chapter of the Appraisal Institute, Lakewood Ranch, Florida, November 2011 Seminar - 7 Hour National USPAP Update Course, Fort Myers, Florida, 2012, 2014, 2016, 2018 Florida Law Update for Real Estate Appraisers, Fort Myers, Florida, 2012, 2014, 2018 Business Practice Ethics, Appraisal Institute, Tampa, Florida, 2012, 2017 Appraising the Appraisal: Appraisal Review - Residential, Appraisal Institute, Fort Myers, Florida 2013 Critical Thinking in Appraisals, Appraisal Institute, Fort Myers, Florida 2014 Up close UAD / Up Close and Personal, McKisick, Ft. Myers, Fl, 2014 Reviewers checklist, McKisick, Ft. Myers, Fl 2014 The New FHA Handbook , McKisick, Ft. Myers, Fl 2015 Exploring Appraiser Liability, McKissock, Ft. Myers, Fl 2016 Florida Appraisal Oddities, McKissock, Ft. Myers, Fl 2016 Nuts and Bolts of Condo Appraisal, McKissock, Ft. Myers, Fl Valuation Resources for Solar Photovoltaic Systems, Ft. Myers, Fl 2017 EXPERIENCE Hanson Appraisal Co., Fort Myers, Florida, June 1982-June Allied Appraisers & Consultants, Inc., Fort Myers, Florida, June 1987-February Principal with the firm Diversified Real Estate Appraisal and Consulting Company, Inc., Fort Myers, Florida, May 1989 to Present. PROFESSIONAL MEMBERSHIPS Member Appraisal Institute - MAI State-Certified General Real Estate Appraiser - License RZ 569 Licensed Florida Real Estate Broker Member of Real Estate Investment Society Diversified Appraisal, Inc. 176 Lee County Lands - Parcel /

183 Addenda PROPERTIES APPRAISED Commercial properties including but not limited to apartment complexes, condominium projects, mobile home parks, funeral homes, cemeteries, shopping centers, warehouses, subdivisions, office buildings, groves, etc. Qualified as expert witness in Lee County Circuit Court, Bankruptcy Court. PARTIAL LISTING OF PAST CLIENTS First National Bank of the Gulf Coast, JP Morgan Chase, Busey Bank, First Community Bank, Sanibel/Captiva Community Bank, BB & T, Florida Shores Bank, First Citizens Bank, Edison National Bank, FineMark Bank, SunTrust Bank of Lee County, Great Florida Bank, Preferred Community Bank, Capital Bank, Stonegate Bank, Iberia Bank (Florida Gulf Bank), BankUnited, Bank of Naples, International Bank of Commerce, CNL Bank, M & S Bank, Reliance Bank, Florida Gulf Coast University, Lee County, City of Fort Myers, Lee County School Board, Attorneys, etc. RE-CERTIFICATION "The Appraisal Institute conducts a voluntary program of continuing education for its designated members. MAIs and SRAs who meet the minimum standards of this program are awarded periodic educational certifications. I am currently certified under this program." Diversified Appraisal, Inc. 177 Lee County Lands - Parcel /