Documentation for Area 3 South - Port Orchard and South Kitsap UGA Tax Year: 2019 Appraisal Date: 1/1/2018 Property Type: Restaurants, Bars, and Taverns Updated 5/16/2018 by CM20 Area Overview Port Orchard including Gorst, Highway 3, Bremerton Airport, Highway 16. Property Type Overview Restaurants are constructed for the purpose of preparation and sale of food and beverages. The average dining area is 60 to 70 percent of the gross building size. The balance is used by the kitchen, storage, and prep areas. Bars and taverns are designed mainly for the sale of beverages with limited food production and typically will have a higher seating ratio. There are approximately 114 properties countywide improved with single tenant buildings developed as restaurants or bars/taverns. Sizes range between 388 and 10,100 square feet with a countywide average of 3,850 square feet. Area 1 has 21 restaurants and three bars/taverns representing 2 of the overall population countywide. Sizes range from 2,135 to 6,410 square feet with an overall average of 4,292 square feet. Land to Building Ratio: The national land to building ratio for this property type is 8-10:1. The countywide land to building ratio for this property type is: 8.6:1. The land to building ratio is used to determine excess or surplus land. Review of zoning requirements such as total lot coverage or requirements, as well as topography and easements, must also be considered before calculating value for this land. Economic Overview: Sales of restaurants or bars/taverns are infrequent. Valuation Summary Approach Used: Income Analysis and Conclusion Summary: The three approaches to value were considered. The cost approach was given little consideration in the appraiser's final analysis. Cost approach components such as replacement cost new, effective age, and depreciation are difficult to accurately calculate in a mass appraisal model. A market/sales comparison approach uses sale prices of comparable properties to calculate value. The market/sales approach was not applied as Kitsap County lacks sufficient, recent sales. The income approach was selected as the best method for valuing these properties. The data used to develop our current model data was collected from our mail survey, site visits, local sales, national publications, and data supplied for review or appeal. Model Calibration Preliminary Ratio Analysis: Analysis of 6 sales resulted in a mean ratio of 85%, a median ratio of 78%, and a coefficient of disperson (COD) of 45.79. /Sales Comparison Approach Data and Analysis Sales: Range of Sale Dates: 1/1/2016 to 12/31/2017. A total of 6 local sales, and 0 regional sales, and 0 national sales were used in the sales analysis. Additional information is provided on the sales analysis Printed 12/3/2018
Property type: Restaurants, Bars, and Taverns (continued) data sheet. Kitsap County attempts to review, analyze, and validate via telephone, mail, or in person interviews, all commercial sales within the county for inclusion or exclusion in our market/sales approach. /Sales Rates: Sales ranged from $54.42 to $453.64 per square foot. Income Approach and Data Analysis Values were calculated using a triple net (NNN) income model. Income and expense information was collected from mailed surveys, property representatives, on-site visits, and market research (publications, newsletters, websites, etc.) Insufficient data was available from individual population areas. s were reviewed countywide. and vacancy rates were adopted from retail. Data: The Assessor validated rents from 19% of the market. Typical reported rents had a range of $6.56 to $33.42. We selected $6.16 to $26 for our model. Vacancy Data: Typical reported vacancy had a range of to 10. We selected 1 to 25% for our model. Expense Data: Typical reported expense had a range of 17% to 32%. We selected 6% to 6% for our model. Capitalization Rate (Cap) Data: Typical sale cap rates ranged from to. We selected 8% to 8.75% for our model. Cap rates from local sales were reviewed. Additional cap rate information from national publications was reviewed. The Calkain Q4 2017 Report lists casual dining between 4.5 and 8.44% with an average cap rate of 6.17%. Boulder Group Q1 2017 Net Lease Casual Dining Report has cap rates ranging from 5.55% to 6.75%. Income Model Value Range: The income approach calculates a range of values from $49.63 to $274.95 per square foot. Final Ratio Analysis: Analysis of 6 sales resulted in a mean ratio of 89%, a median ratio of 85%, and a coefficient of disperson (COD) of 40.93. Sources Kitsap County Board of Equalization appeal documentation. Washington State Board of Tax appeal documentation. Kitsap County income and expense surveys. Kitsap County sales questionaires. The Dictionary of Real Estate Appraisal, Appraisal Institute, Third Edition, 1993 Property Appraisal and Assessment Administration, IAAO, 1990 Glossary for Property Appraisal and Assessment, IAAO,1997 LoopNet - www.loopnet.com Commercial Brokers Association - www.commercialmls.com Printed 12/3/2018
Eating & Drinking - Restaurant & Bar - Model Definition Class Location Construction Exterior Finish Interior Finish Age/Condition Unit size Wall Height Parking Waterfront, view amenity, New or recent complete renovation, Heavy Frame, Individual design, ornamental Good quality Smaller structures and/or superior location with in excellent to very good condition, Tendency Wood, Steel, exterior, good quality finish finish, insulation, tend to have higher Ample off high traffic flow, good very little to no deferred maintenance toward higher A Concrete, and fenestration, mix of floor covering, SF rents if all else is street paved visibility, corner location, and or obsolescence evident, all major ceilings and Metal, or textured concrete, brick, tile, wall finish, trim, equal (Restaurant < usually has synergy from short-lived items are like new, high vaulted areas Masonry wood, metal, or stucco heat system 2,000sf) curb appeal B Good visibility on or near a main highway or major road with good traffic flow, may have synergy from Wood, Steel, Concrete, Metal, or Masonry Better than average design, good quality finish and fenestration, mix of concrete, brick, tile, wood, metal, or stucco Better quality finish, floor finish, trim, heat system 7 to 15 year effective age, little deferred maintenance evident, but not everything is new, no obsolescence evident, appearance and utility above the basics Smaller to average structures tend to have higher SF rents if all else is equal (Restaurant 2,000sf - 3,200) Tendency toward higher than typical ceilings, could have vaulted areas Ample off street paved C Visible, average traffic flow, Wood, Steel, or may have some synergy from Concrete Frame Average design, typical finish and fenestration, concrete, wood, stucco, or metal with mix of other exterior Average quality finish, typical floor finish, trim, heat system 15 to 25 year effective age, some deferred maintenance and/or functional obsolescence evident but major components still function and have utility, not unappealing Average or typical size (Restaurant 3,200sf - 3,945 sf, Bar 2,700sf) Typical or average ceiling height Sufficient off street paved D Limited visibility, near a main road, little to no synergy from Wood or Concrete Frame Plain design, less than typical finish and fenestration, sheet, metal, wood, concrete, or stucco Plain, inexpensive finish, floor finish, and heat 25-35 year effective age, deterioration is somewhat worse than normally expected, some obvious deferred maintenance and/or functional obsolescence, appears worn Average to large size, larger structures tend to have lower rents per SF if all else is equal (Restaurant 3,945sf - 5,000sf) Lower than typical ceiling height Limited off street E Side street or not visible, low traffic flow, negative synergy Wood or pole frame Simple very plain design, little fenestration and very plain finish, inexpensive exterior sheet, wood, or metal covering Minimally or poorly finished, inexpensive floor finish, and heat 35+ years, older or very obvious deferred maintenance and/or functional obsolescence, deterioration much worse than normal, several major components need repair or replacement, substandard utility, unappealing Larger structures tend to have lower rents per SF if all else is equal (Restaurant 5,000sf +) Low ceiling height Limited to no off street, may be gravel NOTE: Properties usually have extensive food service, are freestanding structures, and may have a separate drinking lounge area. Some lounge areas may need to be valued using bar. Lack of cooking facilities, wiring, plumbing - consider retail for highest and best use. If property is located in a retail strip, use retail Industry standard median freestanding restaurant size is approximately 3,050 square feet with average size approximately 3,200 square feet - 4,000 square feet. Countywide freestanding median restaurants size is 3,995 square feet with average size of 4,428 square feet. Countywide median freestanding bar size is approximately 2,766 square feet. Average freestanding bar size is approximately 2,747 square feet. Restaurants have 6-8 of square feet in dining rooms, 2-4 in kitchens, preparation, and storage areas. Bars have significantly less or lack a kitchen area.
Tax Year: 2019 Property Type: Eating & Drinking Neighborhood: 8402305 8402306 8402307 8402308 8402403 9402390 9402391 Bar Rest Not Used Club Class A 2 2 10.00 10.00 8.00 8.00 Class B 22.00 22.00 20.00 20.00 8.000 8.000 Class C 15.00 15.00 8.25 8.25 Class D 9.00 9.00 8.50 8.50 Class E 6.16 6.16 8.75 8.75 Income Mode 302018
Local Income Survey for Eating & Drinking - Restaurant PGI per Unit Vacancy EGI per Unit Expense % $33.42 $33.42 9% $32.21 $32.21 $26.88 $26.88 25% $25.45 $25.45 59% $24.09 $24.09 $24.09 $24.09 $22.91 $22.91 $22.71 $22.71 $22.10 $22.10 $20.51 $20.51 2 $19.68 $19.68 $19.23 $19.23 27% $18.72 $18.72 $18.41 $18.41 $18.02 $18.02 $17.85 $17.85 $17.50 $17.50 $17.38 $17.38 $17.18 $17.18 $17.14 $17.14 $16.07 $16.07 $14.98 1 $13.48 32% $14.65 $14.65 28% $13.82 $13.82 $13.51 $13.50 $13.49 $13.49 $12.53 $12.53 $12.36 $12.36 $11.94 5% $11.34 $11.85 $11.85 17% $10.85 $10.85 $9.90 $9.90 $9.07 $9.07 $9.04 $9.04 $8.57 $8.57 NOI per Unit $30.31 $32.21 $20.16 $10.51 $24.09 $24.09 $22.91 $22.71 $22.10 $16.24 $19.68 $14.04 $18.72 $18.41 $18.02 $17.67 $17.50 $17.20 $17.18 $17.14 $16.07 $9.17 $10.55 $13.68 $13.50 $13.49 $12.40 $12.36 $11.34 $9.84 $10.85 $9.90 $9.07 $9.03 $8.57 Printed: 5/16/2018
Local Income Survey for Eating & Drinking - Restaurant $8.50 $8.50 $6.56 $6.56 $6.48 $6.48 $6.15 $6.15 $8.50 $6.56 $6.48 $6.15 Local Income Survey for Eating & Drinking - Bar PGI per Unit Vacancy EGI per Unit Expense % $18.75 $18.75 $1 $1 $8.70 $8.69 $6.91 10 $0.00 NOI per Unit $18.75 $1 $8.69 $0.00 Printed: 5/16/2018
KITSAP COUNTY ASSESSOR Eating & Drinking - Countywide Sales 01/01/2016-12/31/2017 Nbrhd Type Parcel No. ProjectName Year RC #Units Acres VC1 Sales Date Excise Sales Price Adjusted Sales Price 8100506 Restaurant 012401-2-126-2001 4120 Wheaton Way - Los Cabos 1964 C 3024 0.28 V 3/20/2015 2015EX01731 $ 310,000 $ 310,000 $ 102.51 $ 348,970 $ 168 $ 349,138 113% The Curry Indian Cuisine & 8100501 Restaurant 3718-008-017-0001 Lounge 1942 D 2940 0.07 V 5/16/2016 2016EX04139 $ 160,000 $ 160,000 $ 54.42 $ 243,844 $ - $ 243,844 152% Bar 3765-000-014-0201 The Garage Bar & MF Land 3765-000-013-0004 Land C 7718 1.64 D 1/14/2016 2016EX002678100502 $ 800,000 1934 $ 800,000 $ 103.65 $ 551,612 $ 284,240 $ 852,552 107% 104 N Callow - Pho Tai 8100502 Restaurant 3806-005-016-0001 Restaurant 1979 D 2400 0.26 V 4/22/2015 2015EX02964 $ 385,000 $ 385,000 $ 160.42 $ 199,056 $ 199,056 52% 8100506 Restaurant 3913-008-001-0002 Restaurant Manette 1940 A 604 0.1 V 5/17/2016 2016EX03268 $ 299,000 $ 274,000 $ 453.64 $ 132,717 $ 132,717 48% 8402308 Restaurant 4539-000-001-0001 Auto Repair, Jimmy D's Diner 1984- D 1990 7228 1.29 V 7/27/2015 2015EX05444 $ 600,000 $ 600,000 $ 83.01 $ 179,160 $ 199,450 $ 378,610 63% Price $/SF Model Value Other Total Value Ratio Count 6 Median 85% Mean 89% AAD 35% COD 40.93 Removed sales Nbrhd Type Parcel No. ProjectName Year RC #Units Acres VC1 Sales Date Excise Sales Price Adjusted Sales Price Price $/SF Invalidation 8100502 Restaurant 162401-4-014-2005 Denny's Kitsap Way 1983 6504 0.96 M 6/22/2015 2015EX04211 $ 1,000,000 $1,000,000 $ 153.75 Tenant purchased, no appraisal. 8402307 Restaurant 312402-1-055-2001 Rb's Fish & Chips - Mile Hill Dr. 1990 2392 0.49 M 8/26/2015 2015EX06242 $ 410,000 $ 410,000 $ 171.40 Tenant purchased. 8402306 Restaurant 4028-002-004-0002 Hiro Sushi Restaurant 1949 936 0.23 M 2/23/2016 2016EX01631 $ 165,000 $ 165,000 $ 176.28 FSBO, contiguous purchaser, fixtures included. 8402306 Restaurant 4044-001-001-0007 Ginos Restaurant 1984 9254 1.35 R 9/8/2016 2016EX06792 $ 1,390,000 $1,390,000 $ 150.21 8100502 Restaurant 152401-3-095-2000 4180 Kitsap Way - Former Panda Inn 1970 9188 0.24 E 9/16/2016 2016EX06978 $ 180,000 $ 180,000 $ 19.59 8401102 Bar 4458-009-001-0009 Old Town Pub 1925 E 4016 0.11 X 10/25/2016 2016EX08101 $ 300,000 $ 300,000 $ 74.70 4080 Wheaton Way - IHOP 8100506 Restaurant 3994-000-001-0001 1982 4770 0.43 U 11/16/2016 2016EX08839 $ 450,000 $ 450,000 $ 94.34 Restaurant 8402308 Bar 322401-1-128-2004 Toy's Topless 1944 E 3587 1.28 N 1/19/2017 2017EX00470 $ 375,000 $ 375,000 $ 104.54 1934-8401104 Bar 052401-3-068-2005 19th Hole Tavern B 3443 1.36 M 6/13/2017 2017EX04712 $ 1,000,000 $1,000,000 $ 290.44 1994 9402390 Restaurant 4601-000-024-0007 China West 1944 C 2966 0.54 1 8/30/2017 2017EX07268 $ 260,000 $ 260,000 $ 87.66 Remodel after sale. Estate sale, remodel after sale. Exempt Change of use. Remodel after sale. Not exposed to market. Family sale.