RDA Reso 2001-012 - Laserfiche WebLink

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V. VALUATION The purpose of this analysis is to establish the value of the Site being conveyed to the Developer, subject to the specific development program identified. The fair reuse value is the fair market value for a developable site subject to the specific terms and conditions of the DDA that control the reuse of the Site. The valuation of real estate is derived principally through three approaches to market value: the cost approach, the market data comparison approach, and the income approach. From the indications of these separate analyses and the weight accorded each, an opinion of value is reached, based on the quantity and quality of the factual data considered, tempered by the judgment and experience of the appraiser who is utilizing commonly accepted methods and techniques within the framework of the appraisal process. Due to the fact that this appraisal is for the valuation of a future development, the cost approach is not applicable. The market data comparison approach to value is based upon the principle of substitution; that is, when a property is replaceable in the market, its value tends to be set at the cost of acquiring an equally desirable substitute property, assuming no costly delay in making the substitution. The typical appraisal technique used to estimate values through substitution involves the collection and analysis of sales and listings on various properties having as many similar characteristics as possible to the property being appraised. The income approach is based upon the income characteristics of the proposed Project. For the purpose of determining the reuse value, the reuse value is defined as the difference between the cost to develop the Project, excluding land, and the total amount the Developer (or investor) can afford to invest. The amount the Developer can afford is based upon the projected net operating income revenue generated by the Project, the present and anticipated cost to finance debt, and the required rate of return on equity. Due to the absence of information on the income characteristics of the proposed project, Conley Consulting Group (CCG) relied exclusively on the market data comparison approach for valuation. Although the developer is only acquiring a portion of the Yokota property, the highest and best use appraisal was conducted for the entire Yokota property. As such, our fair reuse valuation will compare sites on a price per SF basis and will focus on transactions for parcels in the 150,000 SF to 400,000 SF range to allow for comparability to both the entire Yokota property and the Site being acquired by the Developer, which is the subject of the fair reuse valuation. Conley Consulting Group Page 14 of 22 9-9 Bartarse Reuse 10300.006 v5 September, 2001