Index of Examples Chapter 1 Letter of Transmittal... 1 Example 1A Detailed Letter of Transmittal... 2 Example 1B Detailed Letter of Transmittal with Risk Factors and Assumptions... 6 Example 1C Brief Letter of Transmittal... 9 Example 1D Transmittal Letter - Other Important Risk Factors... 12 Example 1E Transmittal Letter - General Market Uncertainty Warning... 14 Example 1F Transmittal Letter - Partial Certification... 15 Example 1G Transmittal Letter Limitations Statements... 16 Chapter 2 General Assumptions and Limiting Conditions... 19 Example 2A Common Assumptions and Limiting Conditions... 20 Example 2B Categorized Assumptions and Limiting Conditions... 24 Chapter 3 Extraordinary Assumptions and Hypothetical Conditions... 29 Example 3A Definitions Included... 30 Example 3B Hidden Risks with Extraordinary Assumptions... 32 Example 3C Extreme Assumptions and Conditions... 33 Chapter 4 Certification... 37 Example 4A USPAP Certification... 37 Chapter 5 Summary of Important Conclusions... 41 Example 5A Dashboard Approach... 41 Example 5B Two-Column Summary of Important Facts and Conclusions... 44 Example 5C Brief Summary of Salient Facts... 48 Example 5D Strengths, Weaknesses, Opportunities and Threats (SWOT)... 49 Chapter 6 Identification of the Appraisal Problem and Scope of Work... 53 Example 6A Typical Appraisal Problem and Scope of Work Overview... 53 Example 6B Appraisal Problem Collaboration and Development... 57 Example 6C Newly Discovered Issues since Prior Valuation... 59 Chapter 7 Identification of Subject Property... 63 Example 7A Concise Identification of Subject... 63 Example 7B Detailed Subject History... 64 Example 7C Subject History Table Format... 67
Chapter 8 Scope of Work... 71 Example 8A Detailed Scope of Work... 72 Example 8B Concise Scope of Work... 74 Example 8C Standardized Scope of Work... 75 Example 8D Scope of Work Narrative Format... 78 Example 8E Scope of Work with Exclusions... 80 Chapter 9 Market Area, City, Neighborhood and Location Data... 83 Example 9A Standard Market Area and Location Description... 83 Example 9B Smaller Community Description with Graphs... 90 Chapter 10 Land Description... 97 Example 10A Land Description Tables with Supplemental Narrative... 98 Example 10B Site Summary in Table Format... 102 Example 10C Typical Land Description Summary... 104 Chapter 11 Improvements Description... 107 Example 11A Improvements Description Tables with Supplemental Narrative... 108 Example 11B Comprehensive Improvements Description... 111 Example 11C Improvements Summary in Table Format... 115 Example 11D Depreciation and Obsolescence Discussed in Improvements Description... 117 Chapter 12 Taxes and Assessment Data... 121 Example 12A Thorough Tax Analysis... 121 Example 12B Real Estate Tax Comparables... 124 Example 12C Real Estate Tax Comparables... 125 Example 12D Real Estate Tax Stabilization Analysis... 126 Example 12E Significant Over-Assessment Language... 128 Chapter 13 Marketability Study... 131 Example 13A Fundamental Market Analysis Residential Condominiums... 132 Example 13B Comprehensive Retail Market Analysis... 145 Example 13C Comprehensive Regional Office Market Analysis... 159 Example 13D Office Market Analysis... 167 Example 13E Restaurant Market Analysis... 171 Example 13F Residential Market Analysis... 176 Example 13G - Brief Supply/Demand Overview... 181
Example 13H Absorption Rate Comps... 185 Example 13I - Market Participant Interviews... 186 Chapter 14 Highest and Best Use of the Land, as though vacant... 191 Example 14A Brief Highest and Best Use Analysis... 192 Example 14B Highest and Best Use Analysis... 194 Example 14C Detailed Discussion of Legal and Financial Challenges... 197 Example 14D Most Probable Buyer for Vacant Industrial Site... 200 Example 14E Most Probable Buyer for Residential Development... 203 Example 14F Feasibility of Building/Developing Sloped Land... 207 Chapter 15 Highest and Best Use of the property as improved... 211 Example 15A Brief Highest and Best Use Analysis... 212 Example 15B Demolition, Expansion, Conversion, Renovation or Continued Use... 214 Example 15C Demolish, Modify or Continue Narrative Format... 216 Example 15D - Bank Branch... 217 Example 15E Timing of New Construction Feasibility... 220 Chapter 16 Land Valuation... 225 Example 16A Complete Land Sales Comparison Approach - Commercial Lot... 226 Example 16B - Land Sales Selection Process... 238 Example 16C - Land Sales Selection Process... 240 Example 16D Adjustment Categories... 241 Example 16E Financing Terms/Cash Equivalency Adjustment Support... 243 Example 16F Time/Market Conditions Adjustment Price and Transaction Volume Trends... 244 Example 16G Time/Market Conditions Adjustment Analysis of Listings... 249 Example 16H The Location Adjustment Retail Land... 251 Example 16I Development Potential Analysis to measure Shape Adjustment for Commercial Land... 257 Example 16J Paired Sales to measure Shape Adjustment for Commercial Land... 261 Example 16K Ground Lease Capitalization Land Valuation... 266 Example 16L Land Sale Comparable Format Examples... 268 Chapter 17 Cost Approach... 275 Example 17A Complete Cost Approach... 276 Example 17B New Construction Cost Approach... 282
Example 17C Cost Approach w/ Actual Construction Cost Comparison... 288 Example 17D Comprehensive Extraction of Total Depreciation - Industrial... 292 Example 17E Brief Support for External Obsolescence... 296 Example 17F Extraction and Breakdown of Total Depreciation - Hotel... 297 Example 17G Equipment/Short-Lived Physical Depreciation... 299 Example 17H Functional Obsolescence for Rail Siding Industrial Property... 300 Example 17I Functional Obsolescence Retail Service Garage... 301 Chapter 18 Sales Comparison Approach... 305 Example 18A Complete Sales Comparison Approach... 306 Example 18B Appropriate Unit of Comparison... 311 Example 18C Building Sales Selection Process... 313 Example 18D Building Sales Selection Process... 315 Example 18E Other Sales Considered... 316 Example 18F Additional Sales Noted... 317 Example 18G Unit and Elements of Comparison... 319 Example 18H Adjustment Factors - Industrial... 320 Example 18I Financing/Cash Equivalency Adjustment Contract for Deed... 322 Example 18J Conditions of Sale Adjustment Support... 323 Example 18K Time/Market Conditions Adjustment - CPPI... 324 Example 18L Time/Market Conditions Adjustment Sales and Re-sales... 326 Example 18M Time/Market Conditions Adjustment - Apartment Property... 329 Example 18N Size Adjustment-Industrial Property... 339 Example 18O Age Adjustment - Industrial... 341 Example 18P Condition of Improvements Adjustment... 343 Example 18Q Adjustment for Mezzanine Space - Industrial... 344 Example 18R Percent Office Finish Adjustment Cost Basis... 345 Example 18S Percent Office Finish Adjustment Rent Basis... 347 Example 18T Percent Office Finish Adjustment Overall Cost Basis... 349 Example 18U Unit Mix Adjustment-Market Rate Apartment Property... 350 Example 18V Concise Land-to-Building Ratio Adjustment - Industrial Property... 352 Example 18W Comprehensive Land-to-Building Ratio Adjustment - Industrial Property... 354 Example 18X Economic Characteristics Adjustment Hotel RevPAR... 361
Example 18Y Addition of Capitalized Difference in NOI After Renovation... 364 Example 18Z Examples of Sales Sheets for Comparables... 366 Chapter 19 Income Capitalization Approach... 371 Example 19A Complete Direct Capitalization - Net Leased Single-tenant Retail Property... 372 Example 19B Direct Capitalization with Contract Rent at Above Market Rent... 385 Example 19C Lease Synopsis Table Format... 388 Example 19D Lease Synopsis Narrative Column Format... 390 Example 19E Reconstruction of In-Place Income and Expenses Multi-tenant Retail... 392 Example 19F Brief Overview of Rental Analysis Factors Industrial Property... 394 Example 19G Market Conditions Adjustment Estimated Market Rent Grocery Store... 395 Example 19H Support for Bathroom Premium in Apartment Rents... 398 Example 19I Brief Operating Expense Analysis Retail Property... 399 Example 19J Expense Comparable Analysis Market Rate Apartments... 400 Example 19K Replacement Reserves Calculation Industrial Property... 401 Example 19L Capitalization Rate Analysis Retail Property... 402 Example 19M Capitalization Rate Analysis Market Rate Apartment... 404 Example 19N Capitalization Rate Analysis Multi-tenant Office Property... 405 Example 19O Yield and Capitalization Rate Analysis Full Service Hotel... 406 Example 19P Tax Neutral Direct Capitalization Market Rate Apartment... 408 Example 19Q Bulk Sale DCF Sensitivity Analysis Condominium Property... 411 Example 19R Land plus Residual Income to Improvements... 413 Example 19S Income Loss Valuation of Impact of Parking Loss Office Property... 416 Example 19T Examples of Rent Sheets for Comparables... 420 Chapter 20 Reconciliation and Final Opinion of Value... 425 Example 20A Detailed Reconciliation and Final Value Opinion... 426 Example 20B Typical Reconciliation... 430 Example 20C Brief Reconciliation... 432 Example 20D Typical Reconciliation with Extraordinary Assumptions and Hypothetical Conditions... 433 Chapter 21 Estimate of Exposure Time... 435 Example 21A Comprehensive Definitions and Support for Exposure Period... 436 Example 21B Exposure Period Comparables... 439
Example 21C Brief Example without Explicit Support... 440 Chapter 22 Bonus Examples... 443 Example 22A Net Realizable or Go Dark Value... 443 Example 22B Net Liquidation Value... 445 Example 22D Thorough Liquidation Value Support via Survey and Comparables... 449 Example 22F Insurable Value - Industrial... 455 Example 22G Insurable Value - Retail... 457 Example 22H Appraisal Standards Checklist... 460