Appraisal of Training Center Prepared For Mr. Stephen J. Gehret Chief Financial Officer Tusculum College Prepared By Charles M. Smith MAl Charles M. Smith & Associates, Inc. 249 N. Peters Road, Suite 301 Knoxville, Tennessee 37923-4910 Effective Date of Appraisal: March 7, 2007
CHARLES M. SMITH & ASSOCIATES, INC. REAL ESTATE APPRAISERS. CONSULTANTS 249 N. PETERS RD., SUITE 301 KNOXVILLE, TN 37923-4910 (865) 637-4011 FAX (865) 637-4955 Date of Report: March 7, 2007 March 7, 2007 Mr. Stephen J. Gehret Chief Financial Officer RE: Real Estate Appraisal Training Center Dear Mr. Gehret: In accordance to your request, I have inspected and appraised the above described property for the purpose of estimating its market value for asset evaluation purposes with the value estimate applying as of the March 7, 2007 inspection date. As of the appraisal date, the subject is a 30,000 S.P. two-story Class A steel reinforced concrete frame single tenant office structure being fully occupied as the training center and administrative office building, completed August 2002 on a 4.29 acre site. The building is located on Centerpoint Boulevard approximately 700'± west ofpellissippi Parkway. The subject property is further identified as Knox County Tax Map 118, Parcel 016.15. The following is a self contained report of a complete appraisal prepared in conformance with the Uniform Standards of Professional Appraisal Practice (US PAP) as adopted by the American Standards Board of the Appraisal Foundation regarding the enactment of Title XI of the Financial Institution Reform, Recovery and Enforcement Act of 1989 (FIRREA) and the instructions to the appraiser as enclosed in the Addenda. CHARLES M. SMITH, MAl
CHARLES M. SMITH & ASSOCIATES, INC. REAL ESTATE APPRAISERS. CONSULTANTS 249 N. PETERS RD., SUITE 301 KNOXVILLE, TN 37923-4910 (865) 637-4011 FAX (865) 637-4955 March 7, 2007 Mr. Stephen J. Gehret Chief Financial Officer RE: Real Estate Appraisal Training Center Dear Mr. Gehret: In accordance to your request, I have inspected and appraised the above described property for the purpose of estimating its market value for asset evaluation purposes with the value estimate applying as of the March 7, 2007 inspection date. As of the appraisal date, the subject is a 30,000 S.P. two-story Class A steel reinforced concrete frame single tenant office structure being fully occupied as the training center and administrative office building, completed August 2002 on a 4.29 acre site. The building is located on Centerpoint Boulevard approximately 700'± west ofpellissippi Parkway. The subject property is further identified as Knox County Tax Map 118, Parcel 016.15. The following is a self contained report of a complete appraisal prepared in conformance with the Uniform Standards of Professional Appraisal Practice (US PAP) as adopted by the American Standards Board of the Appraisal Foundation regarding the enactment of Title XI of the Financial Institution Reform, Recovery and Enforcement Act of 1989 (FIRREA) and the instructions to the appraiser as enclosed in the Addenda. CHARLES M. SMITH, MAl
Mr. Stephen Gehret Tusculum College March 7,2007 Page Two After careful analysis of the subject project and its competitive environment, the market value of the fee simple interest of the subject property, as of March 7,2007 is estimated as follows: FIVE MILLION FIVE HUNDRED THOUSAND DOLLARS ($5,500,000) We estimate a reasonable exposure time of six months to 1 year for the attainment of the foregoing value estimate. Estimation of this exposure period is based on both direct and indirect market evidence as well as polling of local and regional real estate brokers and investors. The reader is referred to the Certification and General Assumptions and Limiting Conditions included in the attached report. The appraisers certify that they have no present or contemplated future interest in the subject property. It has been a pleasure working with you in the preparation of this appraisal assignment and I look forward to the opportunity of continuing to serve your appraisal needs irr the near future. Sincerely, Charles M. Smith, MAl TN Certified General Appraiser #CG-l 09 rir. CHARLES M, SMITH, MAl
Training Cellter Knoxville, Tennessee 37932-1961 TABLE OF CONTENTS TABLE OF CONTENTS.................... 4 SUMMARY OF SALIENT FACTS.................... 5 PROPERTY IDENTIFICATION.................... 17 PURPOSE AND INTENDED USE OF THE APPRAISAL.................... 17 PROPERTY RIGHTS APPRAISED.................... 17 DEFINITION OF VALUE.................... 18 EFFECTIVE AND REPORTING DATES.................... 18 SCOPE OF THE APPRAISAL.................... 18 AREA DESCRIPTION.................... 19 NEIGHBORHOOD DESCRIPTION.................... 30 SITE DESCRIPTION............. 36 Utilities.................. 38 Flood Map Information.................. 38 Zoning..................... 38 Real Estate Taxes................ 39 IMPROVEMENT DESCRIPTION '".................... 39 PROPERTY OWNERSHIP / HISTORy.................... 45 HIGHEST AND BEST USE...... 45 Highest and Best Use, As Vacant............... 46 Highest and Best Use, As Improved............... 47 APPROACHES TO VALUE............... 48 COST APPROACH...............48 Land Valuation............... 49 Replacement Cost Estimate.......... 64 Depreciation............... 65 SALES COMPARISON APPROACH............... 66 Market Sales Analysis............... 87 INCOME CAPITALIZATION APPROACH............... 89 Gross Income Estimate.......... 90 Vacancy.............. 108 Expense Estimate.............. 110 Capitalization Process............ III CORRELATION AND FINAL VALUE ESTIMA TE............ 113 GENERAL ASSUMPTIONS............ 114 GENERAL LIMITING CONDITIONS............ 115 ADDENDA............ 118 CHARLES M. SMITH & ASSOCIATES, INC. PAGE 4
Thsculum College Training Center Knoxville, Tennessee 37932-1961 Identity of the Property: SUMMARY OF SALIENT FACTS Tax Map Reference: 118-016.15 Property Owner: Effective Date of Appraisal: March 7, 2007 USPAP Appraisal Type: USPAP Report Type: Property Rights Appraised: Complete Self-Contained Fee Simple Interest Site Area: 186,872 S.P. or 4.29 acres, of which 1.0583 acres is non-buildable drainage area Improvement Description: Highest and Best Use "As Vacant": Highest and Best Use "As Improved": 30,000 S.P., Two story office Commercial - office or institutional Commercial - office Indicated Value by Each Applicable Approach: Cost Approach: $5,281,000 Land Value: $1,072,500 Sales Comparison Approach: $5,211,000 Income Approach: $5,633,000 Estimated Market Value: $5,500,000 Marketing Time: Furniture, fixtures & equipment value: Intended Use: 6 to 12 months None- Real Estate Only Asset Evaluation Intended User: Mr. Stephen J. Gehret Chief Financial Officer, Note: The value estimate of this report are based on plans detailed by Barber & McMurry Incorporated Architects, Planners, Consultants as " At Centerpoint Park" depicted as sheets: SP-100 & 101, A-OO 1 to 601, S-IOO to 103, FP101, P-100 to 102, M-101 & 201, SE-100, and E-101 to 202 dated Oct. lsl.b, 2001 Project # 011700. CHARLES M. SMITH & ASSOCIATES, INC. PAGES