C Conley Real Estate Appraisals, Inc. 321 Ohio Street, Upper Suite 1, Terre Haute, Indiana 47807 Phone and Fax: (812) 235-4576 E-Mail address: bconley@conleyappraisals.com December 11, 2006 Mr. Kurt Jones Jones & Sons, Inc. 1400 Springhill Road Terre Haute, Indiana 47802 RE: Real Estate Appraisal Jones & Sons, Inc. Property 1400 Springhill Road Terre Haute, Indiana 47802 Dear Mr. Jones: In accordance with your request, I have personally inspected the above captioned real estate to determine an estimate of Market Value for the purpose of determining a sales price. My estimate of Market Value, in this particular instance, is predicated upon the Sales Comparison Approach to value. By comparing the subject property with other properties of the like kind, and analyzing it with sales as documented through the Terre Haute Area Association of Realtors Multiple Listing Service and area brokers, it is my opinion that the subject property would have an Estimate of Market Value as of November 27, 2006 of TWO HUNDRED NINETY SEVEN THOUSAND FIVE HUNDRED DOLLARS ($297,500) If you should have any questions, please feel free to contact my office at your convenience. Respectfully submitted, BFC:tlf File #06112102 Brian F. Conley, GRI Indiana Certified General Appraiser State Certification Number: CG 69100221
REAL ESTATE APPRAISAL Jones & Sons, Inc. Property 1400 Springhill Road Terre Haute, Indiana 47802 Prepared For: Mr. Kurt Jones Jones & Sons, Inc. 1400 Springhill Road Terre Haute, Indiana 47802 December 11, 2006 Prepared By: Brian F. Conley File # 06112102 C Conley Real Estate Appraisals, Inc. 321 Ohio Street, Upper Suite 1, Terre Haute, Indiana 47807 Phone and Fax number: (812) 235-4576 E-Mail Address: bconley@conleyappraisals.com
TABLE OF CONTENTS Cover Page Table of Contents...2 Purpose of the Appraisal...19 Intended Use of Report...20 Property Rights Appraised...20 Effective Date of Value...20 Inspection Date...20 Date of Report...20 Exposure Time...20 Appraisal Development and Reporting Process...21 Description of Real Estate Appraised...21 Description of Real Estate Appraised...21 Description of Real Estate Appraised...22 Identification of Property...22 Three Year History...22 Zoning, Flood Plain, and Census Tract...22 Flood Plain Map...24 Site Data...25 Plat Map...26 Description of Improvements...27 Highest & Best Use...29 Summary of Analysis and Valuation...29 Sales Comparison Approach...29 Three Year History...34 Three Year History...46 Three Year History...48 Comparable Sales Summary...52 Plat Map...53 Conclusion...54 Cost Approach to Value...55 Income Capitalization Approach...55 Assumptions and Limiting Conditions...56 Certification...59 Qualifications of Appraiser...60 1400 Springhill Road, Terre Haute, Indiana Page 2
JONES & SONS INC PROPERTY 1400 SPRINGHILL RD, TERRE HAUTE, INDIANA NOVEMBER 27, 2006 VIEW: Front view of the office & showroom building looking north across Springhill Road VIEW: West side view of the office & showroom building looking east from South 14 th Street 1400 Springhill Road, Terre Haute, Indiana Page 3
JONES & SONS INC PROPERTY 1400 SPRINGHILL RD, TERRE HAUTE, INDIANA NOVEMBER 27, 2006 VIEW: Rear or north side view of the office & showroom building VIEW: Rear or north side view of the office & showroom building 1400 Springhill Road, Terre Haute, Indiana Page 4
JONES & SONS INC PROPERTY 1400 SPRINGHILL RD, TERRE HAUTE, INDIANA NOVEMBER 27, 2006 VIEW: East side view of the office & showroom building VIEW: Reception area in the office & showroom building 1400 Springhill Road, Terre Haute, Indiana Page 5
JONES & SONS INC PROPERTY 1400 SPRINGHILL RD, TERRE HAUTE, INDIANA NOVEMBER 27, 2006 VIEW: Showroom VIEW: Showroom 1400 Springhill Road, Terre Haute, Indiana Page 6
JONES & SONS INC PROPERTY 1400 SPRINGHILL RD, TERRE HAUTE, INDIANA NOVEMBER 27, 2006 VIEW: Showroom VIEW: Private office 1400 Springhill Road, Terre Haute, Indiana Page 7
JONES & SONS INC PROPERTY 1400 SPRINGHILL RD, TERRE HAUTE, INDIANA NOVEMBER 27, 2006 VIEW: Storage room VIEW: Employee break room 1400 Springhill Road, Terre Haute, Indiana Page 8
JONES & SONS INC PROPERTY 1400 SPRINGHILL RD, TERRE HAUTE, INDIANA NOVEMBER 27, 2006 VIEW: Storage room VIEW: Unheated storage building, south side view 1400 Springhill Road, Terre Haute, Indiana Page 9
JONES & SONS INC PROPERTY 1400 SPRINGHILL RD, TERRE HAUTE, INDIANA NOVEMBER 27, 2006 VIEW: Unheated storage building, south side view VIEW: East side view of the unheated storage building 1400 Springhill Road, Terre Haute, Indiana Page 10
JONES & SONS INC PROPERTY 1400 SPRINGHILL RD, TERRE HAUTE, INDIANA NOVEMBER 27, 2006 VIEW: North side view of the unheated storage building VIEW: North side view of the unheated storage building 1400 Springhill Road, Terre Haute, Indiana Page 11
JONES & SONS INC PROPERTY 1400 SPRINGHILL RD, TERRE HAUTE, INDIANA NOVEMBER 27, 2006 VIEW: View of the outside storage yard VIEW: View of the outside storage yard 1400 Springhill Road, Terre Haute, Indiana Page 12
JONES & SONS INC PROPERTY 1400 SPRINGHILL RD, TERRE HAUTE, INDIANA NOVEMBER 27, 2006 VIEW: Interior view of the unheated storage building, former kiln VIEW: Interior view of the unheated storage building 1400 Springhill Road, Terre Haute, Indiana Page 13
JONES & SONS INC PROPERTY 1400 SPRINGHILL RD, TERRE HAUTE, INDIANA NOVEMBER 27, 2006 VIEW: Interior view of the unheated storage building VIEW: Interior view of the unheated storage building 1400 Springhill Road, Terre Haute, Indiana Page 14
JONES & SONS INC PROPERTY 1400 SPRINGHILL RD, TERRE HAUTE, INDIANA NOVEMBER 27, 2006 VIEW: Interior view of the unheated storage building VIEW: Street view looking east along Springhill Road 1400 Springhill Road, Terre Haute, Indiana Page 15
JONES & SONS INC PROPERTY 1400 SPRINGHILL RD, TERRE HAUTE, INDIANA NOVEMBER 27, 2006 VIEW: Street view looking west along Springhill Road VIEW: View of the 1 Acre lot located north of the building improvements looking east from South 14 th Street 1400 Springhill Road, Terre Haute, Indiana Page 16
JONES & SONS INC PROPERTY 1400 SPRINGHILL RD, TERRE HAUTE, INDIANA NOVEMBER 27, 2006 VIEW: View of the 1 Acre lot located north of the building improvements looking east from South 14 th Street 1400 Springhill Road, Terre Haute, Indiana Page 17
SUMMARY APPRAISAL REPORT This is a Summary Appraisal Report, which is intended to comply with the reporting requirements set forth under Standards Rule 2-2 (b) of the Uniform Standards of Professional Appraisal Practice for a Summary Appraisal Report. As such, it presents only summary 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. CLIENT: Mr. Kurt Jones Jones & Sons, Inc. 1400 Springhill Road Terre Haute, Indiana 47802 APPRAISER: Brian F. Conley Conley Real Estate Appraisals, Inc. 321 Ohio Street, Upper Suite 1 Terre Haute, Indiana 47807 SUBJECT: Jones & Sons, Inc. Property 1400 Springhill Road Terre Haute, Indiana 47802 1400 Springhill Road, Terre Haute, Indiana Page 18
PURPOSE OF THE APPRAISAL The purpose of this appraisal is to provide the appraiser s best estimate of the market value of the subject real property as of the effective date. Market value is defined by the federal financial institutions regulatory agencies as follows: 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 are the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: 1) buyer and seller are typically motivated; 2) both parties are well informed or well advised, and acting in what they consider their own best interests; 3) a reasonable time is allowed for exposure in the open market; 4) payment is made in terms of cash in US dollars or in terms of financial arrangements comparable thereto; and 5) the price represents the normal consideration for property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale. (Source: Office of the Comptroller of the Currency under 12 CFR, Part 34, Subpart C-Appraisals, 34.42 Definitions {f}.) 1400 Springhill Road, Terre Haute, Indiana Page 19
INTENDED USE OF REPORT This appraisal is intended to assist the client, Mr. Kurt Jones of Jones & Sons, Inc., in determining the market value of the subject to help determine a sales price. PROPERTY RIGHTS APPRAISED The property rights appraised, for this appraisal report, are those of fee simple estate. Fee simple estate is defined as "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." 1 EFFECTIVE DATE OF VALUE: November 27, 2006 INSPECTION DATE: November 27, 2006 DATE OF REPORT: December 11, 2006 1400 Springhill Road, Terre Haute, Indiana Page 20
APPRAISAL DEVELOPMENT AND REPORTING PROCESS On November 21, 2006, the client engaged the appraiser to perform a real estate appraisal on the subject property. The client has purchased another property and intends to move the business to the new location. The client intends to sell the subject property. The client wants the appraisal to help establish a possible sale price for the property. The appraiser met the client at the property on November 27, 2006. In preparing this appraisal, the appraiser inspected the subject site and both the exterior and interior of the improvements. Information on improved sales was gathered, confirmed, and analyzed and the Sales Comparison Approach was applied. Per prior agreement with the client, the appraiser did not use the Cost Approach or the Income Approach to value. Because these approaches would not generally be considered meaningful in appraising a property of this type, the appraiser believes the primary approach to value is the Sales Comparison Approach. This Summary Appraisal Report is a brief recapitulation of the appraiser s analyses and conclusions. Supporting documentation is retained in the appraiser s file. 1 The Appraisal of Real Estate, The Appraisal Institute, 11 th Edition, 1996, Chicago, Illinois, p. 137 1400 Springhill Road, Terre Haute, Indiana Page 21
DESCRIPTION OF REAL ESTATE APPRAISED Identification of Property According to the Vigo County Assessor's office, the subject property is vested in the name of Jones & Sons, Inc. The subject property is made-up of one two parcels. The short legal descriptions used by the assessor's office are as follows: 103-09-10-252-007: Prt W Side SW NE, 10-11-9, 2.610 AC. 1400 Springhill Road. 103-09-10-252-023: C F Hilton Sub, Lot 1, 10-11-9, 1.00 AC. No common street address. Three Year History The current owner has owned tax parcel 103-09-10-252-007, uninterrupted, since 1999. Tax parcel 103-09-10-252-023 was purchased from Hilton on September 22, 2003 for $12,500. The total property has not been and is not currently for sale. The use of the property has not changed over the past three years. The client is intending to sell the property. Zoning, Flood Plain, and Census Tract Effective as of November 22, 1996 all properties in Vigo County except the City of Terre Haute are covered by the Unified Zoning Ordinance for Vigo County, Indiana. According to the code, the subject property is zoned M-1 1400 Springhill Road, Terre Haute, Indiana Page 22
or Light Industry District. The subject s current use as a concrete block sales and warehousing business is a permitted use under the county zoning classification. According to the National Flood Insurance Program Federal Emergency Management Agency Flood Map No. 180263-0070B the property is in zone AO or is in the 100 year flood plain. The location within the flood plain does not have a negative affect on the market value. The 2000 census tract number for the subject property is 0107.01. 1400 Springhill Road, Terre Haute, Indiana Page 23
FLOOD PLAIN MAP 1400 Springhill Road, Terre Haute, Indiana Page 24
Site Data The subject site is made up of two tax parcels located on the northeast corner of Springhill Road and Hilton Street, also known as South 14 th Street. The site has frontage on Springhill Road of 297.12, and a combined depth of 531, for a total land area of 3.61 acres. It appears from the plat map that the site goes to the center of Springhill Road, therefore the effective acreage would be something less than 3.61 acres. The site is level at street grade with no obvious drainage problems. It appears that most of the site is covered by the improvements except for the back 1 acre. Located on the site is a fuel pump which appears to have an underground fuel storage tank. For the purpose of this appraisal, it is assumed that the underground fuel storage tank meets all federal and state requirements. All public utilities are currently available and in service at the site. The site is large enough for its current use as a concrete block sales facility and would be ideally suited for a commercial retail building, and/or some type of residential development. 1400 Springhill Road, Terre Haute, Indiana Page 25
PLAT MAP 1400 Springhill Road, Terre Haute, Indiana Page 26
Description of Improvements Located on the site are two separate building. The front building is a one story, one unit; commercial retail building built about 1974. This is a concrete block building built on a concrete slab, and has a 3-1 asphalt shingled roof. There is 3,000 square feet of building area. The building is used as a retail showroom and office building. The interior is made up of a showroom, two small office areas, one unfinished storage room, a finished storage room and a three half baths. The back building is a former production building for the creation of concrete blocks. The building is now used for unheated storage space. This is a 7816 square foot unheated, unfinished, concrete block, and pole constructed building built on a concrete slab. The total building area of the two buildings is 10,816 square feet. Located north and east of the buildings is an open storage yard and materials storage area. Overall, the improvements appear to be in fair to average condition. No personal property or equipment is included in this appraisal. 1400 Springhill Road, Terre Haute, Indiana Page 27
BUILDING SKETCHES 1400 Springhill Road, Terre Haute, Indiana Page 28
Highest and Best Use The reasonably probable and legal use of vacant land or improved property, which is physically possible, appropriately supported, financially feasible, and that results in the highest value. 2 Highest and best use as though vacant: Some type of commercial development consistent with what would be found along Springhill Road for the front 1-2 acres. The back 1.61 to 2.61 could be used for residential development. Highest and best use as though improved: Its current use for a retail showroom and office building with storage. SUMMARY OF ANALYSIS AND VALUATION Sales Comparison Approach This is an appraisal technique in which the market value estimate is predicated upon prices paid in actual market transactions and current listings. It is a process of correlation and analysis of recently sold properties. This appraiser attempted to find recent sales of older retail/office buildings used for sales and storage. There were no such sales found. Below are several sales in Vigo County that meet some of the search criteria. 1400 Springhill Road, Terre Haute, Indiana Page 29
Comparable Sale No. 1 The property at 1033 North Fruitridge Avenue sold on May 30, 2003. The seller was Barcus and the buyer was Gutich. This was a one-story, one-unit pole constructed commercial/industrial building that was originally built in 1982. The building measured 52 feet by 128 feet or 6656 square feet. This building, built on a concrete slab, was situated on a 2.04-acre site. The reported sale price was $190,000 or $28.55 per square foot building area. 2 The Appraisal of Real Estate, The American Institute of Real Estate Appraisers, 11 th Edition, 1996, Chicago, Illinois, P. 50. 1400 Springhill Road, Terre Haute, Indiana Page 30
Comparable Sale # 1 Type Property Commercial Address 1033 N Fruitridge Ave County Vigo Terre Haute, Indiana Township Harrison Date Sold: May 30, 2003 Price: $190,000 Seller: Barcus Square Foot: 6656 Buyer: Gutish $ Per Square Feet: 28.56 Exterior Construction: Alum/ Steel Site Size: # of Stories: One Building to Land %: Unknown # of Rooms: Zoning: M-2 # of Baths: 2 Deed Record Information: Basement: Slab Building Date: 1982 Square Foot: %Finished: Parcel Number: 18-06-13-200-010 Legal Description: Total Assessed Value: Unknown Condition of Sale: Arms Length Financing: Cash to Seller Date Verified: 12/22/03 Verified By: MLS #10781 Comments: Highest and Best Use: Commercial 1400 Springhill Road, Terre Haute, Indiana Page 31
Comparable Sale No. 2 On April 14, 2000, the Louis Vitale Trust sold to Dever Family Limited Partnership the property at 1025 N. Fruitridge Avenue in Terre Haute, Indiana. This was a 16,080 square foot pole barn constructed metal commercial building situated on 3.86 acres. This property is located immediately north of the subject property. The reported purchase price was $540,000 or $33.50 per square foot building area. Dever later told this appraiser that he sold this property to the Oakley Corporation on May 30, 2001 for $560,000 or $34.82 per square foot building area. A Sales Disclosure Form filed in the Vigo County Auditors office shows that on November 11, 2002 Oakley Corporation sold to Reynolds & Co. the property for $625,000 or $38.87 per square foot of building area. 1400 Springhill Road, Terre Haute, Indiana Page 32
Comparable Sale # 2 Type Property Industrial Address 1025 N. Fruitridge Ave. County Vigo Terre Haute, IN 47803 Township Harrison Date Sold: November 11, 2002 Price: $625,000 Seller: Oakley Corp. Square Foot: 16,080 Buyer: Reynolds & Co. $ Per Square Feet: $38.87 Exterior Construction: Steel Site Size: 3.86 Acres # of Stories: One Building to Land %: 9.6% # of Rooms: -- Zoning: M-2 # of Baths: -- Deed Record Information: Basement: Slab Building Date: 1983 Square Foot: %Finished: Parcel Number: 18-06-13-200-011 Legal Description: Prt N ½ W ½ W ½ NE, 13-12-9 Total Assessed Value: $94,470 Condition of Sale: Arms Length Financing: Cash to Seller Date Verified: 03/30/2003 Verified By: VC Auditor SD form Comments: Highest and Best Use: Industrial/Wrhse 2,600 SF of office space 1400 Springhill Road, Terre Haute, Indiana Page 33
Comparable Sale No. 3 The property at 2408 Hendricks Ave sold on June 21, 2006. The seller was Sparkle Pools Inc. and the buyer was Willig. This was a one-story one-unit warehouse building with 8920 square feet of warehouse space and approximately 200 square feet of office space for total building area of 9120 square feet. This building sat on a.752-acre site having been built in 1980. The reported purchase price was $70,000 or $7.68 per square foot up building area. 1400 Springhill Road, Terre Haute, Indiana Page 34
COMPARABLE SALE NO. 3 1400 Springhill Road, Terre Haute, Indiana Page 35
Comparable Sale No. 4 The property located at 5176 North Clinton St in Terre Haute sold on May 22, 2006. This was a 10,560 square foot warehouse and office building formerly used by Sargent Electric. This property is located at the northwest corner of Park Street and Lafayette Avenue in the North Terre Haute area. This building had 2400 square feet of conference room and office space with a warehouse of 8160 square feet. This warehouse space was well insulated and heated. This building was situated on a 4.89-acre site. The seller was Sargent Electric and the buyer was Dake. The reported purchase price was $300,000 or $28.41 per square foot of total building area. 1400 Springhill Road, Terre Haute, Indiana Page 36
COMPARABLE SALE NO. 4 1400 Springhill Road, Terre Haute, Indiana Page 37
Comparable Sale No. 5 The property at 1624 East Springhill Drive sold on July 1, 2005. The seller was Sanders and the buyer was Brucken. This property consisted of four separate buildings. Located on the property was a 1460 square foot house, a newer 4000 square foot retail building, formerly used as a lighting center, a 40' x 26' storage building and a 40' x 64' storage building. All of these buildings were located on a 2.38-acre site. The total building area for this sale was 9060 square feet. The buyer purchased this property and converted the retail building into a medical office building. The reported purchase price was $365,000 or $40.29 per square foot of total building area. 1400 Springhill Road, Terre Haute, Indiana Page 38
COMPARABLE SALE NO. 4 1400 Springhill Road, Terre Haute, Indiana Page 39
Comparable Sale No. 6 The property at 1925 South 13th Street sold on February 26, 2002. The seller was Nationwide Postal Management and the buyer was Posey. This was a one-story one unit industrial building built in 1968 for use as the United States Post Office annex building. This building had 29,160 square feet of area situated on a 2.6-acre site. This building was on the market for over three years. The reported purchase price was $325,000 or $13.54 per square foot a building area. 1400 Springhill Road, Terre Haute, Indiana Page 40
COMPARABLE SALE NO. 6 General MLS #: 28314 Baths: 2 Class: COMMERCIAL/INDUSTRIAL Basement: NO Type: OTHER Stories: OT Area: Vigo County Price: $325,000 Status: SLD Address: 1925 S 13TH ST ZIP: 47802 Terre Haute For Sale Asking Price: $395,000 Zoning: M-1 List Agent: PFISTER, MARY CAYE Parcel #: 1-18-0634181001 Agent Phone: (812)232-5083 Township: Other Listing Office: PFISTER BH&G Business Type: DISTRIBUTION Office Phone (812)232-5083 Year Built: 1968 Compensation-Buyer 2.5 A.V.: 194900 Broker: Compensation- 2.5 Bldg#1 Total SqFt: 29160 Variable Rate: Compensation- N Bldg#1 WH SqFt: 0 Contingency (Y/N): Keybox: No Bldg#1 Office SqFt: 0 Keybox-Number: N Bldg#1 Mfg. SqFt: 0 Owner Name/Phone: NATIONWIDE POSTAL MG-N/A Bldg#1 Ceiling Ht- 16' Max: Listing Date: 04/11/1997 Showing Instructions: CALL LIST OFFICE Lot Size: 2.6 ACRES Features * EXTERIOR CONSTRUCTION * MISCELLANEOUS EXTERIOR * ROADS Masonry Onsite Parking City Street * LOCATION Paved Parking * WATER Industrial Loading Dock City Water * HEATING * POSSESSION * SEWER Natural Gas Immediate City Sewer Financial Taxes: 23534 Financing Terms: CASH Remarks VERSATILE BUILDING ADAPTABLE TO VARIOUS USES. MOSTLY WIDE-OPEN WORK AREA, SOME OFFICE AREA, LUNCH ROOM, RESTROOMS.LARGE COVERED LOADING DOCK. ABUNDANCE OF PARKING. PREVIOUSLY USED AS A POST OFFICE DISTRIBUTION CENTER. ABUNDANCE OF CONCRETE PARKING, 18,000 Addendum SF OF ASPHALT. ALSO PARKING ACROSS 12TH STREET. ALSO AVAILABLE FOR LEASE. Sold How Sold: Conventional Selling Office 1: PFISTER BH&G Contract Date: 02/26/2002 Buyer: Posey Closing Date: 06/11/2002 Concessions: None Sold Price: $325,000 DOM: 1887 Selling Agent 1: P, HOUSE 1400 Springhill Road, Terre Haute, Indiana Page 41
Comparable Sale No. 7 The property at 800 East Haythorne Avenue sold on May 5, 2004. This was a one-story one-unit commercial/industrial pre-engineered steel building built in 1999 on 6.53 acres. This building was originally built for use as an indoor raceway park for go-carts. The building measured 100 feet by 200 feet or 20,000 square feet. This building had limited uses because of a 16-foot ceiling height. Next to this building was a 1200 square foot pole barn building used for storage. This building added no value to this property. The reported sale price for this property was $375,000 or $18.75 per square foot of building area. 1400 Springhill Road, Terre Haute, Indiana Page 42
COMPARABLE SALE NO. 7 1400 Springhill Road, Terre Haute, Indiana Page 43
Comparable Sale No. 8 The property at 951 Ohio St sold on March 25, 2003. This was a one-story one unit retail and warehouse building situated on a.98-acre site. The building had a total of 22,000 square feet of area with 13,700 square feet in warehouse space 2800 square feet in office space and 5500 square feet in retail space. This building was built in 1993 on a concrete slab. The seller was WWH Corporation and the buyer was Terre Haute Electrical Joint Apprenticeship Program. The reported purchase price was $525,000 or $23.87 per square foot of building area. 1400 Springhill Road, Terre Haute, Indiana Page 44
COMPARABLE SALE NO. 8 1400 Springhill Road, Terre Haute, Indiana Page 45
Comparable Sale No. 9 The property at 175 Canal St sold on June 27, 2005. The seller was B & S Plumbing and the buyer was D Amico. This building had 6240 square feet of area situated on a 148 x 298 lot. This building was built in 1985 office and warehouse space for the plumbing company. The reported purchase price was $300,000 or $48.08 per square foot building area. 1400 Springhill Road, Terre Haute, Indiana Page 46
COMPARABLE SALE NO. 9 1400 Springhill Road, Terre Haute, Indiana Page 47
Comparable Sale No. 10 The property 3601 North Fruitridge Ave sold on July 29, 2003. The seller was WCO Limited and the buyer was Ferrall. This was a retail building and warehouse building situated on the northeast corner of Fruitridge Avenue and Fort Harrison Road at the entrance to the Fort Harrison Industrial Park. There was 4800 square feet in the retail building that was built in 1983 and 3000 square feet of area in the warehouse building built in 1994. These buildings were situated on a two-acre site located within one block of the subject property. The reported purchase price was $325,000 or $41.67 per square foot building area. 1400 Springhill Road, Terre Haute, Indiana Page 48
COMPARABLE SALE NO. 10 1400 Springhill Road, Terre Haute, Indiana Page 49
Comparable Sale No. 11 The property at 1041 North Fruitridge Ave sold on January 11, 2005. This was a 12,508 square foot retail and warehouse building situated on a 2.3 acre site. The seller was Modesitt and the buyer was BRSH, LLC. This building was built in 1984 and had 5255 square feet of retail area and 7248 square feet in the warehouse. Modesitt had purchased the property in October of 2003 for $425,000. The reported purchase price in January 2005 was $525,000 or $41.97 per square foot of total building area. 1400 Springhill Road, Terre Haute, Indiana Page 50
COMPARABLE SALE NO. 11 1400 Springhill Road, Terre Haute, Indiana Page 51
Comparable Sales Summary Sale No. ADDRESS Sale Price Square Feet Price / Sq Ft Site Size Date Location B/L % Construction Condition Age Office Use Multiple Buildings SUBJECT 1400 Springhill --- 10,816 --- 3.61 A 11/27/06 Average 7% CB/Pole Fair 1974 Large Retail Yes COMPARABLE SALES 1 1033 Fruitridge $190,000 6,656 $28.55 2.2 A 5/30/03 Average 7% Pole Average 1992 Large Retail No $22.46-10% +9% +10% -10% -10% -10% 2 1025 N. Fruitridge $625,000 16,080 $38.87 3.86 A 11/11/02 Average 10% Pre-Engi Average 1983 Small Industrial No $42.27 +20% +13% -10% -10% -0- +10% -10% 3 2408 Hendricks Ave $70,000 9,120 $7.68 0.752 6/21/06 Average- 28% Pole Poor 1980 None Warehouse No $12.14-0- -0- +10% +10% +10% +10% -0- +20% -10% 4 5176 N. Clinton $300,000 10,560 $28.41 4.89 A 04/20/06 Average 4% Pole Average 1990 Large Office/Ware No $22.78-0- -0- +10% -10% -10% -10% 5 1624 E. Springhill 365,000 9,060 $40.29 2.38A 05/18/05 Average 9% Various Average Various Large Retail/Storage Yes $36.98-0- +3% -0- -0- -10% -10% -0-6 1925 S. 13th St. $325,000 29,160 $11.15 2.6a 06/11/02 Average 25% Pre Engi Average 1968 Small Dist Wrhs No $12.84 30% +13% -0- +10% -20% -10% -0- +10% -10% 7 800 E. Haythorne Ave. $375,000 20,000 $18.75 6.53 A. 05/05/04 Average- 7% Pre Engi/Stl Average 1999 None Industrial No $17.68 30% +6% +10% -20% -10% -20% +20% -10% 8 951 Ohio Street $525,000 22,000 $23.86.98 A. 03/25/03 Average+ 52% Brk/Alum/Stl Average 1993 Small Wrhse/Office No $29.28 +30% +9% -10% +20% -0- -10% -10% +10% -10% 9 175 Canal St $300,000 6,240 $48.08 1.01 A 6/27/05 Average 14% Pole Average 1985 Small Office/Storage Yes $38.83-20% +3% -0-10% -10% -10% +10% -0-10 3601 N. Fruitridge $375,000 7,800 $48.08 2.00 A 7/29/03 Average 9% Metal/Pole Average 83/94 Large Retail/Ware Yes $33.11-10% +9% -0- -0- -10% -10% +10% -0-11 1041 N. Fruitridge $525,000 12,508 $41.97 2.3 A 1/15/05 Average 12% Brick/Pole Average 1984 Large Retail/Ware No $34.67 +10% +3% -0- -0- -10% -10% -10% AVERAGE $27.55 Adjusted Value 1400 Springhill Road, Terre Haute, Indiana Page 52
LOCATION MAP 1400 Springhill Road, Terre Haute, Indiana Page 53
CONCLUSION After reviewing the 11 comparable improvement sales and making adjustments for building sizes, site sizes, dates of sale, building construction, building conditions, building ages, office space, and multiple buildings the adjusted values range from a low of $12.14 per square foot building area to a high of $42.27 per square foot of total building area with an average of $27.55 per square foot of building area. Because none of the 11 sales is considered comparable to the subject property, it seems reasonable to believe that the subject would meet the market close to this average or say $27.50 per square foot of total building area. I therefore estimate the market value by the Sales Comparison Approach as of November 27, 2006 to be $297,440 say TWO HUNDRED NINETY THOUSAND DOLLARS ($297,500) 1400 Springhill Road, Terre Haute, Indiana Page 54
Cost Approach to Value In the Cost Approach, an estimate of the vacant land is first developed. This is followed by estimating the reproduction cost of the building and improvements. Thereafter, the various types of depreciation were analyzed, estimated and deducted from the reproduction cost. The cost approach was not used for this particular appraisal problem because of the advanced ages of the improvements. Income Capitalization Approach The Income Capitalization Approach is the process that converts anticipated income to be derived from ownership of the property into a value estimate. Anticipated future income and/or revisions are discounted to a present worth figure through a capitalization process. The Income Approach to Value was not used in this appraisal process because the typical buyer for this property would be a user as apposed to a real estate investor looking to derive a net income from renting the buildings. 1400 Springhill Road, Terre Haute, Indiana Page 55
ASSUMPTIONS AND LIMITING CONDITIONS: 1. As agreed upon with the client prior to the preparation of this appraisal, this is a Limited Appraisal because it invokes the Departure Provision of the Uniform Standards of Professional Appraisal Practice. As such, information pertinent to the valuation has not been considered and/or the full valuation process has not been applied. Depending on the type and degree of limitations, the reliability of the value conclusion provided herein may be reduced. 2. No responsibility is assumed for legal or title considerations. Title to the property is assumed to be good and marketable, unless otherwise stated in this report. 3. The property is appraised free and clear of any or all liens and encumbrances, unless otherwise stated in this report. 4. Responsible ownership and competent property management is assumed, unless otherwise stated in this report. 5. The information furnished by others is believed to be reliable. However, no warranty is given for its accuracy. 6. All engineering is assumed to be correct. Any plot plans and illustrative material in this report are included only to assist the reader in visualizing the property. 7. It is assumed that there are no hidden or unapparent conditions of the property, subsoil, or structures that render it more or less valuable. No responsibility is assumed for such conditions or for arranging for engineering studies that may be required to discover them. 8. It is assumed that there is full compliance with all applicable federal, state, and local environmental regulations and laws, unless otherwise stated in this report. 9. It is assumed that all applicable zoning and use regulations and restrictions have been complied with, unless a nonconformity has been stated, defined, and considered in this appraisal report. 1400 Springhill Road, Terre Haute, Indiana Page 56
10. It is assumed that all required licenses, certificates of occupancy or other legislative or administrative authority from any local, state, or national governmental or private entity or organization have been or can be obtained or renewed for any use on which the value estimates contained in this report are based. 11. Any sketch in this report may show approximate dimensions and is included to assist the reader in visualizing the property. Maps and exhibits found in this report are provided for reader reference purposes only. No guarantee as to accuracy is expressed or implied, unless otherwise stated in this report. No survey has been made for the purpose of this report. 12. It is assumed that the utilization of the land and improvements is within the boundaries or property lines of the property described and that there is no encroachment or trespass, unless otherwise stated in this report. 13. The appraiser is not qualified to detect hazardous waste 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 material on or in the property that would cause a loss in value, unless otherwise stated in this report. No responsibility is assumed for any environmental conditions, or for any expertise or engineering knowledge required to discover them. The appraiser s descriptions and resulting comments are the result of the routine observations made during the appraisal process. 14. 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. 1400 Springhill Road, Terre Haute, Indiana Page 57
15. Any proposed improvements are assumed to be completed in a good workmanlike manner in accordance with the submitted plans and specifications. 16. The distribution, if any, of the total valuation in this report between land and improvements applies only under the stated program of utilization. The separate allocations for land and buildings must not be used in conjunction with any other appraisal and are invalid if so used. 17. Possession of this report, or a copy thereof, does not carry with it the right of publication. It may not be used for any purpose by any person other than the party to whom it is addressed without the written consent of the appraiser, and in any event, only with proper written qualification and only in its entirety. 18. Neither all nor any part of the contents of this report (especially any conclusions as to value, the identity of the appraiser, or the firm with which the appraiser is connected) shall be disseminated to the public through advertising, public relations, news sales, or other media without prior written consent and approval of the appraiser. 19. This appraisal report has been prepared for the exclusive benefit of Mr. Kurt Jones of Jones & Sons, Inc. It may not be used or relied upon by any other party. Any party who uses or relies upon any information in this report, without the preparer s written consent, does so at his own risk. 1400 Springhill Road, Terre Haute, Indiana Page 58
CERTIFICATION I certify that to the best of my knowledge and belief: 1. The statements of fact contained in this report are true and correct. 2. The reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions, and are my personal, unbiased, professional analyses, opinions, and conclusions. 3. I have no present or prospective interest in the property that is the subject of this report and I have no personal interest or bias with respect to the parties involved. 4. My compensation is not contingent upon the reporting of a predetermined value or direction in value that favors the cause of the client, the amount of value estimate, the attainment of a stipulated result, or the occurrence of a subsequent event. 5. This appraisal was not base on a requested minimum valuation, a specific valuation, or the approval of a loan. 6. My analyses, opinions, and conclusions were developed, and this report has been prepared in conformity with the Uniform Standards of Professional Appraisal Practice. 7. I have made a personal inspection of the property that is the subject of this report. 8. No one provided significant professional assistance to the person signing this report. 9. The reported analyses, opinion, 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 Appraisal Practice of the Appraisal Institute. 10. The use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representatives. Brian F. Conley, GRI Indiana Certified General Appraiser State Certification Number: CG 69100221 1400 Springhill Road, Terre Haute, Indiana Page 59
EDUCATION: BRIAN F. CONLEY INDIANA GENERAL CERTIFIED APPRAISER Conley Real Estate Appraisals, Inc. 321 Ohio Street Upper Suite #1 Terre Haute, IN 47807 Phone and Fax (812) 235-4576 email: bconley@conleyappraisals.com Bachelor of Business Administration - Indiana State University, 1976. Appraisal Course IA-1 - (Real Estate Appraisal Principles) - sponsored by the Appraisal Institute, completed at Indiana University, 1978 and 1990. Appraisal Course IA-2 - (Basic Valuation Procedures) - sponsored by the Appraisal Institute, completed at Indiana University, 1978 and 1990. Appraisal Course IB - (Capitalization) - sponsored by the Appraisal Institute, taken at Indiana University, 1980. Appraisal Course II - (Valuation Analysis) - sponsored by the Appraisal Institute, taken at Indiana University, 1981. Graduate Realtors Institute (GRI) - sponsored by the Indiana Association of Realtors, taken at Indiana University, 1979. Fair Housing Laws - sponsored by the Education REsources, taken in Indianapolis, August 2004. Market Analysis and the Site to do Business Seminar Sponsored by the Appraisal Institute, taken in Indianapolis, July 2005 Americans with Disabilities Act Seminar - sponsored by the Education REsources, taken in Indianapolis August 2006 Standards of Professional Practice - sponsored by Education REsources, taken in Indianapolis, August 2006. Legal Descriptions & Surveying for Condemnation - sponsored by Education REsources, taken in Indianapolis, August 2002. Contemporary Environmental Issues - sponsored by the Education REsources, taken in Indianapolis, August 2004 PROFESSIONAL EXPERIENCE: Southeast Drainage Project. Projects 13, 14, 15, 17, 18, 19 and 20 Sewer Projects, Board of Sanitary Commissioners. Honey Creek-Vigo Conservancy District Plan A and Plan B Flood Control Project. Chamberlain Road project and Industrial Park Sewer Easements, Vigo County Commissioners. Federal National Mortgage Association (FNMA), Relocation Companies, various attorneys and private parties. All major banks in the Terre Haute area. Has been continuously associated with real estate appraisals for over 30 years with the present firm of Conley Real Estate Appraisals, Inc., of which he is president. 1400 Springhill Road, Terre Haute, Indiana Page 60
Appointed by and testified in Vigo County Superior Court, Clay County Circuit Court, and Owen County Circuit Court as an appraiser. Appointed by Governors B. Evan Bayh and Frank O Bannon as a real estate appraiser for the State of Indiana. Approved appraiser with Indiana Department of Transportation. PROFESSIONAL AFFILIATIONS: Indiana Certified General Appraiser license # CG69100221 Appointed by Governor B. Evan Bayh to the Indiana Real Estate Commission (June 1, 1991 through May 31, 1999). Reappointed by Governor Frank O Bannon (June 1, 1999 through May 31, 2003). Resigned to accept a new position on August 14, 2001 Appointed by Governor Frank O Bannon to the Indiana Real Estate Appraiser Licensure Board, August 14, 2001 through October 12, 2006. Served as Board Chairman 2004 & 2005. Associate Member, Appraisal Institute. Indiana Real Estate Brokers License number IB20501035. Past Chairman, Education Committee, Terre Haute Area Association of Realtors. Member, past director and past president of Terre Haute Board Association of Realtors. Member and past director of Indiana Association of Realtors. Member of National Association of Realtors. President and member Terre Haute Area Association of REALTORS Multiple Listing Service. Terre Haute Area Association of REALTORS, 1985 and 2003 REALTOR of the Year. Member of the Terre Haute Homebuilders Association Former member of Terre Haute City Council. (1988-1995). Past member of Vigo County Area Plan Commission. Awarded Sagamore of the Wabash by Governor B. Evan Bayh, January 1997 Member and current Vice Chairman of the Terre Haute Redevelopment Commission (appointed November 1999) 1400 Springhill Road, Terre Haute, Indiana Page 61