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Fair Market Value and Fair Market Rent of the Fee Simple Estate
Citrus Memorial Healthcare Center at Sugarmill Woods Parcel No. 5
7945 – 7955 South Suncoast Boulevard Sugarmill Woods, Florida 34446
SUMMARY APPRAISAL REPORT
Appraisal Date: February 6, 2013 Distribution Date: March 19, 2013
Prepared for
Mr. Robert Priselac Citrus County Hospital Board of Trustees
Citrus County Hospital Board 123 South Pine Avenue Inverness, Florida 34452
2515 McKinney Avenue, Suite 1500 • Dallas, Texas 75201 • Telephone: 214.369.4888 • Fax: 214.369.05413100 West End Avenue, Suite 940 • Nashville, Tennessee 37203 • Telephone: 615.777.7300 • Fax: 615.777.7301
DAL LA S • NASHV I L L E
BUS IN E S S VALUAT ION • PROFE S S IONA L SE RV I C E S VALUAT ION S • AS SE T APPRA I S A L S • REA L ES TAT E • TRAN SACT ION ADV I SORY • CONSU L T ING
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Chateau Plaza 3100 West End Avenue 2515 McKinney Avenue Suite 940 Suite 1500 Nashville, Tennessee 37203 Dallas, Texas 75201 P 615.777.7300 P 214.369.4888 F 615.777.7301 F 214.369.0541 www.vmghealth.com
March 19, 2013 Mr. Robert Priselac Citrus County Hospital Board of Trustees Citrus County Hospital Board 123 South Pine Avenue Inverness, Florida 34452 Re: Fair Market Value and Fair Market Rent of Parcel No. 5 – Citrus Memorial Healthcare Center at Sugarmill Woods Dear Mr. Priselac, At your request, we have estimated the Fair Market Value and the Fair Market Rent of the Fee Simple Estate in the real estate identified as Citrus Memorial Heathcare Center at Sugarmill Woods located at 7945 – 7955 South Suncoast Boulevard, Sugarmill Woods, Citrus County, Florida. The subject property consists of approximately 23,513 square feet of gross building area in two buildings located on 5.342 acres of land. The appraised improvements are currently utilized as a medical office, diagnostic and rehabilitation facility. The effective date of the valuation is February 6, 2013, the date of inspection. The following analysis is not to be used for any other purpose or distributed, in whole or in part, to third parties, other than Citrus County Hospital Board and their duly authorized representatives, the Internal Revenue Service, Office of Inspector General and other regulatory authorities without the express written consent of VMG Health. The opinions presented are subject to the following extraordinary assumption. An extraordinary assumption is directly related to a specific assignment, as of the effective date of the assignment results, which, if found to be false, could alter the appraiser’s opinions or conclusion. Within this specific assignment, according to the Citrus County Property Appraiser, the gross building area of the subject premises is 23,513 square feet for the subject premises. Should the actual gross building area differ from the provided area, the appraiser reserves the right to amend the contents of this Summary Appraisal Report, including the conclusion. In addition, the opinions presented are subject to the following hypothetical condition. A hypothetical condition is a condition, directly related to a specific assignment, which is contrary to what is known by the appraiser to exist on the effective date of the assignment results, but is used for the purpose of analysis. The property is subject to the Lease Agreement between Citrus County Hospital Board and Citrus Memorial Health Foundation, Inc. For purpose of this analysis, the lease is not considered; the property rights appraised are those of the Fee Simple Estate. Based on this analysis, the estimate of the Fair Market Value of the Fee Simple Estate as of February 6, 2013 for the subject real estate is reasonably estimated to be:
FOUR MILLION TWO HUNDRED THOUSAND DOLLARS
$4,200,000 Based on this analysis, it is our opinion that the Fair Market Rent range for the subject property is $17.00 to $20.00 per square foot as of February 6, 2013. Implicit in this rental rate estimate is a NNN basis, with the tenant being
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Chateau Plaza 3100 West End Avenue 2515 McKinney Avenue Suite 940 Suite 1500 Nashville, Tennessee 37203 Dallas, Texas 75201 P 615.777.7300 P 214.369.4888 F 615.777.7301 F 214.369.0541 www.vmghealth.com
responsible for all operating costs. The lease term would be a minimum term of five years, without concessions, on an “as is” basis. The rate does not include an annual CPI increase in the base rate. These concluded estimates of Fair Market Value and Fair Market Rent of the Fee Simple Estate are well within the parameters established by the competing properties. Please refer to the attached analysis for further detail. Respectfully submitted,
Charles B. Nolen, MAI Manager Florida Certified General Real Estate Appraiser RZ3509
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TABLE OF CONTENTS
REPORT FORMAT 4
IDENTIFICATION OF PROPERTY 4
PURPOSE OF THE APPRAISAL 4
PROPERTY RIGHTS 4
CLIENT AND INTENDED USE OF THE APPRAISAL 5
EFFECTIVE DATE OF VALUATION 5
DEFINITIONS 5
SCOPE OF ENGAGEMENT 7
COMPETENCY STATEMENT 9
PROPERTY HISTORY 9
SUMMARY OF SALIENT FACTS 11
REGIONAL ANALYSIS 12
HEALTHCARE MARKET OVERVIEW 24
NEIGHBORHOOD ANALYSIS 30
SITE DESCRIPTION 34
IMPROVEMENTS DESCRIPTION 37
HIGHEST AND BEST USE 39
VALUATION 42
COST APPROACH 44
SALES COMPARISON APPROACH 64
INCOME CAPITALIZATION APPROACH 77
VALUE RECONCILIATION 86
RANGE OF FAIR MARKET RENT 86
MARKETING AND REASONABLE EXPOSURE TIME ANALYSIS 88
ASSUMPTIONS AND LIMITING CONDITIONS 89
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Overview
REPORT FORMAT
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 the the Fair Market Value and the Fair Market Rent of the real estate identified in this report.
Supporting documentation concerning the data, reasoning and analyses is retained in the appraiser’s files. The depth of discussion contained in this report is specific to the needs of the client and for the intended use stated within this report.
IDENTIFICATION OF PROPERTY
The subject of this appraisal assignment consists of two medical office buildings (23,513 gross square feet) on the contiguous tract of land containing 232,685 square feet or 5.34 acres. All estimates are based on information provided from the Citrus County Property Appraiser or from personnel associated with Citrus County Hospital Board.
The effective date of the valuation is February 6, 2013, the date of inspection.
PURPOSE OF THE APPRAISAL
The purpose of the appraisal is to provide our opinion of the Fair Market Value and the Fair Rental Value of the Fee Simple Estate for the premises fully identified in this Summary Appraisal Report.
PROPERTY RIGHTS
The property rights appraised are those of the Fee Simple Estate. Fee Simple Estate is defined in The Dictionary of Real Estate Appraisal, Fifth Edition:
"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 or escheat.”
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CLIENT AND INTENDED USE OF THE APPRAISAL
The intended user (client) of this Summary Appraisal Report is Citrus County Hospital Board and their duly authorized third-party representatives. VMG Health is not responsible for the unauthorized use of this Summary Appraisal Report. The intended use of this analysis is to assist Citrus County Hospital Board with an evaluation of the possible benefits to persons residing in Citrus County from the sale or lease of the Hospital Facilities to a not-for-profit or for-profit entity.
EFFECTIVE DATE OF VALUATION
This report was prepared in February and March 2013. We conducted an on-site inspection of the subject premises on February 6, 2013. The effective date of this assignment is February 6, 2013, the date of inspection.
DEFINITIONS
The following is a list of definitions applicable to this assignment. Fair Market Value – Fair Market Value is defined by the Internal Revenue Service as "the price that property would sell for on the open market. It is the price that would be agreed on between a willing buyer and a willing seller, with neither being required to act, and both having reasonable knowledge of the relevant facts." The term herein, is also used interchangeably in this analysis with the term Market Value. Market Value means “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 is 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 U.S. dollars or in terms of financial arrangements comparable thereto; and
5. The price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale.
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Additionally, in accord with THE LAWS OF FLORIDA Ch. 2012-66, “Fair market value” means the price that a seller or lessor is willing to accept and a buyer or lessee is willing to pay on the open market and in an arms-length transaction, or what an independent expert in hospital valuation determines the fair market value to be.
Furthermore, The Stark Law defines “fair market value” as “the value in arm’s length transactions, consistent with the general market value.” “General market value” means “the compensation that would be included in a service agreement as the result of bona fide bargaining between well-informed parties to an agreement who are not otherwise in a position to generate business for the other party at the time of the agreement.”
Fair Market Rent is synonymous with Market Rent. The definition of Market Rent is shown below.
Fair Market Rent – The most probable rent that a property should bring in a competitive and open market reflecting all conditions and restrictions of the lease agreement including permitted uses, use restrictions, expense obligations, term, concessions, renewal and purchase options, and tenant improvements (TIs). 1 Implicit in this definition are the following conditions:
Lessee and lessor are typically motivated. Both parties are well informed or well advised, and acting in what they
consider their best interests. A reasonable time is allowed for exposure in the open market. The rent payment is made in terms of cash in United States dollars, and is
expressed as an amount per time period consistent with the payment schedule of the lease contract.
The rental amount represents the normal consideration for the property leased unaffected by special fees or concessions granted by anyone associated with the transaction.
This assignment includes the following identified property.
Real Property – The interests, benefits, and rights inherent in the ownership of real estate.2
Improvements – Buildings or other relatively permanent structures or developments located on, or attached to, land.3
1 The Dictionary of Real Estate Appraisal, 5th Edition (Chicago: Appraisal Institute, 2010). 2The Dictionary of Real Estate Appraisal, Page 161, 5th Edition (Chicago: Appraisal Institute, 2010). 3 The Dictionary of Real Estate Appraisal, Page 98,5th Edition (Chicago: Appraisal Institute, 2010).
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Extraordinary Assumption – An assumption, directly related to a specific assignment, as of the effective date of the assignment results, which, if found to be false, could alter the appraiser’s opinions or conclusions.4
Within this specific assignment, the client has provided a gross building area of 23,513 square feet for the building improvements. Should the actual gross building area differ from the provided area, the appraiser reserves the right to amend the contents of this Summary Appraisal Report, including the conclusion.
Hypothetical Condition – A condition, directly related to a specific assignment, which is contrary to what is known by the appraiser to exist on the effective date of the assignment results, but is used for the purpose of analysis. 5 The subject property is subject to the Lease Agreement between Citrus County Hospital Board and Citrus Memorial Health Foundation, Inc. According to the Fourth Amendment to Lease Agreement, the commencement date is March 1, 1990 and the expiration date is June 15, 2033, with an option to renew for an additional forty-five (45) year term. For purpose of this analysis, the lease is not considered; the property rights appraised are those of the Fee Simple Estate.
SCOPE OF ENGAGEMENT
The results of this investigation are presented in a Summary Appraisal Report. The following scope was completed by Value Management Group, LLC d/b/a VMG Health (“VMG”) for this assignment:
1. Analyzed regional, city, neighborhood and market area. Gather current, relevant, data related to demographic, economic,
governmental and environmental forces that have a direct or indirect influence on the subject property.
Provide supporting comments and appropriate conclusions to describe the influence of these factors on the subject property.
Market data was gathered from a variety of sources including local and regional realtors, brokers and online sources.
2. Completed a visual on-site study of the subject property and the market
area or neighborhood relevant to the subject property. The visual on-site study of the subject property involved observing
the exterior walls and fenestration, noting the quality and condition. 4 “Uniform Standards of Professional Practice” (The Appraisal Foundation, 2012-2013 Edition). 5 “Uniform Standards of Professional Practice” (The Appraisal Foundation, 2012-2013 Edition).
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Photographs were taken of the interior and exterior of the improvements.
The visual on-site observation of the site included the type and condition of walkways, curbs, sidewalks, parking surfaces, security lighting and fencing, the quality and abundance of landscaping and the observed adequacy of water drainage and runoff, as pertinent. Photographs were taken of notable site improvements and street views of all adjacent roadways.
The visual on-site observation involved an inspection of the site. The visual observation of the market area or neighborhood
included driving the adjacent roadways and the major thoroughfares in the area, noting convenience to area shopping, retail, entertainment, employment and major arterial roadways. The adequacy and condition of area improvements (including condition and appeal, occupancy and competitive properties, and any adverse influences) were also observed. Observations were also made regarding the approximate mix of residential, multi-family, commercial and industrial property types within the subject neighborhood and market area.
Reviewed relevant supporting data. The inspecting appraiser’s visual on-site observation was supported by the review of the available building plans.
Reviewed data regarding taxes, utilities, easements and city services.
The availability or existence of all utilities, easements and city services was determined by on-site observation and data available from Citrus County Hospital Board and the Citrus County Board of County Commissioners, Citrus County, Florida.
3. Considered comparable improved building sales and rental information. Comparable rents, sales and listings were analyzed by date of
leases/sales, lease structure, similarity of space use/size, direct or indirect competition and proximity to the subject. Information was gleaned from appraiser’s internal proprietary files as well as available market information.
Photographs, as available, and write-ups are provided as applicable to the assignment for the comparable sales and leases.
Pertinent information for the selected comparable sales and rents are presented within the body of this Summary Appraisal Report.
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4. Analyzed the data and applied the applicable approaches to value. The value opinions presented in this Summary Appraisal Report
are based on review and analysis of the market conditions affecting real property value, including the attributes of competitive properties and rental data for similar properties.
The appraisal problem did not warrant an intensive Highest and Best Use analysis. Given the nature of the subject real property, VMG Health’s conclusion of Highest and Best Use is based on logic and observed evidence.
Three traditional approaches are typically used to arrive at an opinion of value of real property: the Sales Comparison Approach; the Cost Approach; and the Income Capitalization Approach. All three approaches to value were considered and those most appropriate are relied on to address the appraisal problem and to arrive at an opinion of the Fair Market Value and Fair Market Rent of the Fee Simple Estate in the subject property as of the date of this appraisal.
Specific attention is drawn to the Proposal, Definitions, General Assumptions and Limiting Conditions, and Significant Issues for further understanding of the scope of the appraisal. The subject site and improvement descriptions are based on a personal inspection of the property and a review of provided data. The inspection is not a substitute for thorough engineering studies.
COMPETENCY STATEMENT
Charles B. Nolen, MAI has valued numerous real estate projects throughout the United States over the past 25 years. In addition, Mr. Nolen has analyzed and appraised numerous medical projects (including hospital campuses) throughout the United States. The appraiser holds the MAI designation with the Appraisal Institute. Mr. Nolen, MAI is a Certified General Real Estate Appraiser from the State of Florida (State License Number RZ3509). Accordingly, the appraiser has the professional competency required to appraise the subject property.
PROPERTY HISTORY
The Appraisal Foundation's Uniform Standards of Professional Appraisal Practice Standard Rule 1-5 states:
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In developing a real property appraisal, when the value opinion to be developed is market value, an appraiser must, if such information is available to the appraiser in the normal course of business:
(a) analyze all agreements of sale, options, or listings of the subject property current as of the effective date of the appraisal; and
(b) analyze all sales of the subject property that occurred within the three (3) years prior to the effective date of the appraisal.
The subject property is subject to the Lease Agreement between Citrus County Hospital Board and Citrus Memorial Health Foundation, Inc. According to the Fourth Amendment to Lease Agreement, the commencement date is March 1, 1990 and the expiration date is June 15, 2033, with an option to renew for an additional forty-five (45) year term.
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SUMMARY OF SALIENT FACTS – PARCEL NO. 5
Date of Appraisal: February 6, 2013 (Date of Inspection) Property Name/Location: Citrus Memorial Healthcare Center
7945 – 7955 South Suncoast Boulevard Sugarmill Woods, Citrus County, Florida
Client: Citrus County Hospital Board Land Size: 232,685 square feet or 5.342 acres Improvement Size: 23,513 gross building square feet Owner of Record: Citrus County Hospital Board Subject Property Description: Medical office buildings, diagnostic and rehabilitation center Fair Market Value: $4,200,000 Range of Fair Market Rent: $17.00 to $20.00 per square foot, NNN basis, minimum five-
year term, without concessions, on an “as is” basis, with no annual CPI increase.
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REGIONAL ANALYSIS The subject property is located in the community of Sugarmill Woods, Citrus County, Florida. Citrus County is located in west Florida, south of the Florida panhandle. Citrus County borders the Gulf of Mexico and is located approximately 80 miles north of Tampa and 80 miles northwest of Orlando. The county is part of the Homosassa Springs Micropolitan Statistical Area. A Micropolitan Statistical Area is defined as one or more adjacent counties that have at least one urban core area with a population between 10,000 and 50,000.
Sugarmill Woods is located in the southwest quadrant of Citrus County. Incorporated cities in the Citrus County include Inverness and Crystal River. Other communities in the county include Beverly Hills, Black Diamond, Citrus Hills, Citrus Springs, Floral City, Hernando, Homosassa, Homosassa Springs, Pine Ridge and Lecanto. Sugarmill Woods is a Census Designated Place (CDP) by the U.S. Census Bureau. The CDP is the counterpart of incorporated places identified for statistical purposes and lacks a separate municipal government. The total population of the Sugarmill Woods CDP in 2010 was estimated to be 8,257. A map on the following page depicts the subject property and its surrounding area.
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CLIMATE
Citrus County’s climate is classified as humid subtropical and temperatures are relatively mild, due to regulation from the close proximity of the Gulf of Mexico.
The hottest month of the year is July with an average high of 92 degrees, which is slightly higher than the United States average high of 86.5 degrees. The coolest month is January with an average low of 44.8 degrees, which is higher than the United States average low of 20.5 degrees. There are on average 246 sunny days per year, which is higher than the United States average of 205 sunny days per year. Citrus County averages 53.9 inches of precipitation per year, which is significantly higher than the United States average of 36.5 inches of precipitation per year.
TOPOGRAPHY AND SOIL
The topography of Citrus County is characterized by fairly level terrain. The reported elevation of Citrus County is forty nine feet above sea level. According to the United States Census Bureau, the county has an area of 773 square miles with a large portion of the total area covered by water (24.49%). Soil in the region is generally considered stable for construction purposes.
The topographic features of Citrus County impact development trends. There are three areas that limit development: the Tsala Apopka Lakes along the eastern boundary; the Withlacoochee State Forest in the center; and the Crystal River Preserve State Park and the Chassahowitzka River and Coastal Swamps along the western portion of the county. Transportation and development are funneled along either side of the Withlacoochee State Forest between the water features of the Tsala Apopka Lakes and the Chassahowitzka River and Coastal Swamps. Primary north-south routes along either side of the Withlacoochee State Forest are U.S. Highway 98 (South Suncoast Parkway) to the west and U.S. Highway 41 to the east.
TRANSPORATION
Citrus County is serviced by several heavily traveled routes. Located on the western side of Florida, State Highway 44 runs east to west through the City of Inverness, connecting the Gulf of Mexico to the Atlantic Ocean. It spans a total of 116 miles. State Highway 44 also intersects north-south route Interstate Highway 75, directly east of Citrus County.
State Highway 45 runs north-south directly south of Inverness, and State Highway 41 runs north to south directly north of Inverness. Both state highways service the immediate surrounding area and are also referred to as South Florida Road and North Florida Road respectively. Both are connected by State Highway 44.
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Interstate Highway 75 is a major north-south route that connects Hialeah in southern Florida to Sault Ste. Marie, Michigan at the Ontario border. Interstate Highway 75 is the seventh longest interstate highway in the United States and runs a total of 1,786 miles, passing through six states (Florida, Georgia, Tennessee, Kentucky, Ohio and Michigan). Interstate Highway 75 is located approximately ten miles east of Citrus County. Because of the traffic levels, much of Interstate Highway 75 is six lanes, even in rural areas.
U.S. Highway 98 is a 964-mile, east-west highway that connects western Mississippi and southern Florida. U.S. Highway 19 is a north-south, 1,377-mile route that extends from Memphis, Florida to Erie, Pennsylvania. In southwest Citrus County, U.S. Highway 98 intersects the Suncoast Parkway (toll road) via Florida Highway 700.
Suncoast Parkway and Veterans Expressway (Florida Highway 589) form a north-south toll road, a 57-mile roadway that connects U.S. Highway 98 to Tampa. Veterans Expressway (15 miles in length) was constructed to serve increasing commuter traffic in Tampa; Suncoast Parkway extended Veterans Expressway to U.S. Highway 98 in 2001 and is 42 miles long.
Plans are in progress to extend the Suncoast Parkway as Suncoast Parkway 2 from the existing intersection with West Ponce De Leon Boulevard north to the intersection of North Suncoast Boulevard, north of Dunnelon Road, in Crystal River.
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The current status of the project is reportedly suspended (paused) according to the website www.suncoast2online.com.
Inverness Airport, located south of the City of Inverness, serves the immediate surrounding area. The airport is owned and operated by Citrus County and in 2010 had a total of 15,000 aircraft operations. Orlando International Airport is located in Orlando and operates as the 13th busiest airport in the United States; Tampa International Airport to the south is the 31st busiest.
SOCIAL
The primary social trends that directly influence real estate values are related to population. The City of Inverness’s population increased 6.23% from 2000 to 2011. The Citrus County population grew at a more rapid pace, increasing 18.58%. In comparison, growth in the State of Florida has increased 8.52% more than the growth rate for the country as a whole for the years 2000-2011 (19.24%-10.72%). The tables located below and on the following page contain historical population statistics for the Citrus County, the State of Florida and the United States.
Population Totals
Year United States Florida Citrus County
1990 248,845,816 12,938,071 93,513
2000 281,421,906 15,982,378 118,085
2001 284,968,955 16,356,966 121,197
2002 287,625,193 16,689,370 123,491
2003 290,107,933 17,004,085 126,215
2004 292,805,298 17,415,318 129,840
2005 295,516,599 17,842,038 133,791
2006 298,379,912 18,166,990 137,826
2007 301,231,207 18,367,842 140,974
2008 304,093,966 18,527,305 142,122
2009 306,771,529 18,652,644 141,381
2010 308,745,538 18,801,310 141,236
2011 311,591,917 19,057,542 140,031
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Rate of Population Growth 2001‐2011
Year United States Florida Citrus County
2001 1.26% 2.34% 2.64%
2002 0.93% 2.03% 1.89%
2003 0.86% 1.89% 2.21%
2004 0.93% 2.42% 2.87%
2005 0.93% 2.45% 3.04%
2006 0.97% 1.82% 3.02%
2007 0.96% 1.11% 2.28%
2008 0.95% 0.87% 0.81%
2009 0.88% 0.68% ‐0.52%
2010 0.64% 0.80% ‐0.10%
2011 0.92% 1.36% ‐0.85%
total 10.72% 19.24% 18.58%
As of 2011, Citrus County had 140,031 people in 59,915 households. Of the population, 15.5% were under the age of 18, and 32.8% were 65 years or older. In comparison, the State of Florida population under the age of 18 was estimated to be 21.0%; 17.6% were 65 years or older. The median income for a household was $38,189, and the median home value was $134,800. The income per capita was $22,939, and 15.8% of the families were living below the poverty line.
The Florida Legislature’s Office of Economic and Demographic Research annually provides population estimates as of April 1. Following are the Medium Projections of Florida Population by County, 2011 -2040, for Citrus County and the adjacent counties.
County/State April 1, 2011 2020 2030 2040 Change Citrus 140,956 157,201 177,017 194,591 38.1%Levy 40,767 45,727 51,775 57,093 40.0%Marion 331,745 388,261 455,932 516,926 55.8%Sumter 96,615 130,774 171,684 211,337 118.7%Hernando 173,078 204,398 241,913 275,710 59.3%Florida 18,905,048 21,021,643 23,567,010 25,846,980 36.7%
Citrus County is projected to slightly outperform the State, but lags the forecast for the surrounding counties.
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GOVERNMENT
The City of Inverness operates under a council-manager structure, where the city council sets policy and the city manager implements desired action from the city council. The city also provides police and fire departments. In Crystal River, the City Council is composed of five elected members, including the Mayor. The City Council constitutes the governing body with power to pass ordinances, adopt resolutions, appoint officers and exercise the power as provided in the City Charter. As the legislative body of the City, the Council appropriates all monies of the City. Both cities have zoning ordinances and building codes to control growth. The remaining communities are governed by the Citrus County Board of County Commissioners.
EDUCATION
Citrus County is serviced by Citrus County School District. The public school district ranges from pre-kindergarten through 12th grade, and is made up of eleven elementary schools, four middle schools, four high schools and two alternate schools.
HEALTHCARE
The immediate area is served by the Citrus Memorial Hospital. Seven surrounding short-term acute-care hospitals listed below are within approximately thirty-miles from the subject property. The following information was reported as of 2011. (Source: www.ahd.com). The occupancies were calculated by the appraiser.
Hospital Beds Net Income
($000s) Patient Days Occupancy
Citrus Memorial Hospital (Subject) 198 ($7,488) 41,804 58% Seven Rivers Regional Medical Center – Crystal River 128
$10,358 28,922 62%
Tri-County Hospital - Williston 20 ($917) 1,928 26% Munroe Regional Medical Center - Ocala 399
$18,668 108,298 74%
Ocala Regional Medical Center - Ocala 270 $10,576 61,121 62% The Villages Regional Hospital – The Villages 198
$110 49,974 69%
Brooksville Regional Hospital - Brooksville 244
$25,869 55,868 63%
Oak Hill Hospital 240 $33,847 58,607 67% Total 1,697 $91,023 406,522 66%
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QUALITY OF LIFE
Citrus County features a good business climate and an affordable lifestyle. The area known as the “Natural Coast” is considered to be a great get-away place, because it offers a multitude of water activities due to its close proximity to the Gulf of Mexico in addition to the 30 square miles of lakes in the region. Specifically, Inverness is known as bikers’ paradise because of the 46 miles of paved and groomed bike trails the public can access year around. Citrus County worked together with the Economic Development Council, Inc. (EDC) to help grow jobs in the area. The EDC offers incentives for job growth, job relocation to the area, as well as providing the Micro-loan programs. The EDC also provides tax abatement incentives to growing businesses in the region.
Withlacoochee State Trail
Withlacoochee State Trail is an undeveloped state park located in Citrus County that provides enjoyment to adventure seekers. The State Park includes a 46-mile trail that is designed for bike riding. In addition, the park offers hiking and horseback riding terrain. The park is not developed, and therefore makes traveling to and from Inverness from the south and west more difficult.
Crystal River Power Plant
The Crystal River Energy Complex consists of five power-generating plants on a 4,700- acre site at near the mouth of the Crystal River in northwest Citrus County. Four of the five are fossil fuel power plants. The Crystal River 3 Nuclear Power Plant, also known as the Crystal River Nuclear Plant, is the sole nuclear power plant on the site. In September 2009 upgrades were conducted on the facility. A gap in the concrete containment dome was discovered; repairs were unsuccessful. In February 2013, Duke Energy announced that the Crystal River Nuclear Plant would be permanently shut down. The four coal-fired units were not affected.
ECONOMIC
Economic conditions influencing the value of the subject property include labor and employment, the economic base and trends of the region and current economic real estate conditions. The unemployment rate in the Citrus County has typically been above average compared to both the State of Florida and the nation as a whole. The Citrus County economy has not fully recovered from the recent national recession to the extent that many other areas have. Tables containing the historical unemployment statistics for Citrus County as well as the State of Florida are given on the following page.
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As of January 2013, the reported unemployment rate for Citrus County was 9.1%. With help from the EDC, Citrus County is taking measures to create a more diversified economy. However, county unemployment rates still above the State and National unemployment rates of 8.0% and 7.8% respectively. Education, health services and transportation/utilities are the major industries in the Citrus County economy as well as the State of Florida. Employment by industry for Citrus County and Florida economies are shown below.
The real estate market in Citrus County has recovered at a slower pace from the economic crisis than most major markets nationally. Citrus County benefits from its proximity and access to the Gulf of Mexico, as well as its easy access to the Tampa Bay region that is located roughly 80 miles south.
Overall, Citrus County is transforming into a more diverse economy.
REAL ESTATE MARKET
The recent recession and sub-prime housing crises has had an impact on the Florida and Citrus County real estate market. As seen in the map depicted on the following page, Citrus County has had a greater level of foreclosure activity compared to the rest of the state.
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With regard to the office market, occupancy rates decreased, while rental rates have changed dramatically. According to COSTAR, the current office market indicates an overall vacancy in the 35% range.
CONCLUSION
In summary, the subject property is located in the Sugarmill Woods CDP, Citrus County, Florida. Citrus County is located approximately 80 miles north of Tampa and 80 miles northwest of Orlando. While the Citrus County economy has not yet fully recovered from the recent national recession, it has made some improvements. Overall, the quality of life in the Citrus County region is based off an affordable cost of living in addition to the easy access to the natural surroundings. Short-term forecasts for the region indicate stability as the economy continues to recover.
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HEALTHCARE MARKET OVERVIEW Healthcare Spending
Over the last fifty years, health care spending as a percentage of GDP has grown from approximately 4% to approximately 18%. This steady rise in health care spending is illustrated in the graph below. Healthcare spending in the United States grew 3.9% in 2011, which was equal to the increase in 2010. Total health expenditures reached $2.7 trillion in 2011, which translates to $8,680 per person or 17.9% of the nation’s Gross Domestic Product (GDP). By 2020, national health spending is expected to reach $4.5 trillion and comprise 19.2% of GDP. According to the World Health Organization, the United States spends more on healthcare, both per capita, and as a share of GDP, than any other country in the world.
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
18.0%
20.0%
1960 1970 1980 1990 2000 2010
National Healthcare Spending as a % of GDP
2011
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Healthcare Spending by Category
Hospital care (31.5%) and professional services (26.8%) accounted for the majority of healthcare spending in 2011. Though hospital expenditures account for the largest portion of healthcare spending in the United States, the long-term and home care, and the other health, residential and personal care spending categories have increased at similar rates over the last five years. Recent spending trends and growth rates signify that burgeoning healthcare spending is slowing as a result of the transition of care from an inpatient setting to an outpatient setting. In 2011, year-over-year hospital spending growth declined to 4.9% over 2010. While hospital spending growth has slowed in recent years, hospital spending continues to be a significant driver in the rising cost of healthcare. On average, annual hospital spending growth has outpaced average annual healthcare spending growth in the United States over the last five years.
Hospital Care, 850.6
Other Health, Residential, and
Personal Care, 133.1
Long-term and Home Care, 223.6Pharmaceuticals
(retail), 263
Health administration and insurance, 267.9
Investment in health, 153.5
Durables , 38.9
Non-Durables, 47.0
Professional Services, 723.0
Total Healthcare Spending by Category, 2011 (in billions)
Source: Center for Medicare & Medicaid Services
4.3%
5.5%
5.6%
3.2%
3.4%
3.2%
4.0%
3.4%
5.5%
4.5%
Professional Services
Other Health, Residential, and Personal Care
Long-term and Home Care
Pharmaceuticals (retail)
Health administration and insurance
Investment in health
Non-Durables
Durables
Hospital Care
Total Spending Growth
Yearly Growth Since 2006Spending by Category: 2006-2011
Source: Center for Medicare & Medicaid Services
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Funding Overview A combination of private and public sources finance health care in the United States. Most Americans under the age of 65 have private health insurance obtained through an employer. According to CMS estimates, in 2010, about 56% of the population (150 million people) will have employment-based coverage, and about 5% (13 million people) will have private coverage purchased directly from an insurer. In 2011 about 110 million people were covered by Medicare and Medicaid, the two main sources of public financing for health care. In the same year, federal spending for Medicare and Medicaid made up approximately 38% of national health expenditures.
Government Funding Medicare provides federal health insurance for 45 million people who are elderly or disabled (the elderly make up about 85% of enrollees) or who have end-stage renal disease or amyotrophic lateral sclerosis (also known as Lou Gehrig’s disease). Individuals become eligible for Medicare on the basis of age when they reach 65; disabled individuals become eligible for Medicare 24 months after they become eligible for benefits under Social Security’s Disability Insurance program.
Medicaid is a joint federal–state program that pays for health care services for a variety of low-income individuals. The program, created in 1965 by the same legislation that created Medicare, replaced an earlier program of federal grants to states to provide medical care to people who had low income. In fiscal year 2011, federal spending for Medicaid was approximately $408 billion. The federal government’s share of Medicaid’s spending for benefits varies among the states but generally averages 57%. Medicare spending has grown by approximately 9.1% each year from $37.4 billion in 1980 to
Medicare, 22%
Medicaid and CHIP, 16%
Out‐of‐Pocket Payments, 12%
Other Health Insurance
Programs, 4%
Private Health Insurance, 35%
Other Third Parties, 11%
National Health Expenditures in the U.S. by Source of Payment, 2011
Source: Center for Medicare & Medicaid Services
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$554 billion in 2011. Prior to the recent reform measures, health care spending was projected to increase 25% by 2030, according to the Center for Disease Control (CDC).
Healthcare Reform Because of the increasing cost of healthcare in March 2010, Congress passed and the President signed into law two pieces of legislation—the Patient Protection and Affordable Care Act (PPACA, Public Law 111-148) and the Health Care and Education Reconciliation Act of 2010 (P.L. 111-152)—that make major changes regarding the provision of health insurance, subsidies for insurance coverage, payments for health care through federal programs, and tax revenues. Discussion of the new legislation has dominated the health care industry as industry participants attempt to determine how to adjust to new market conditions.
PPACA is expected to result in significant changes to health care in the United States. Major provisions of PPACA include: the creation of accountable care organizations; reductions in Medicare reimbursements; creation of an Independent Payment Advisory Board; value-based payments for hospital services; elimination of physician-owned hospitals; increased Medicaid payments for primary care; individual health insurance coverage mandate; elimination of the Medicare Part D donut hole; flexible spending accounts; and numerous additional programs. While much of the health care overhaul will not take effect until 2014 or beyond, implementation of some programs began in 2011. Health care providers are currently determining how best to adapt to changes in the system, with emphasis on increased integration, increased accountability, growth of large health systems and improved implementation of technology.
Despite controversy over the legislation, the majority of analysts agree that an increased portion of the population will be insured in the long-term due to the new legislation. According to the Congressional Budget Office, 32 million Americans who are currently uninsured will be covered by insurance by 2020. This significant increase in the insured population is expected to drive increased demand for medical services.
The increased demand for medical services is a factor in the projected shortfall in the number of physicians. According to the Association of American Medical Colleges' (AAMC), the United States will face a shortage of more than 90,000 doctors by 2020. The Council on Graduate Medical Education (COGME) also projects an upcoming physician shortage, predicting a 10% shortfall by 2020. Despite some controversy regarding the future physician supply, overall demand in the health care market is projected to increase in the coming years.
Changes in the healthcare system are expected to have myriad effects. One trend has been an increasing number of taxable, investor-owned hospitals. Previously, according to survey results published by the American Hospital Association (AHA), slightly less
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than 20% of the 5,010 community hospitals in the United States were taxable, investor owned facilities (as compared to more than 58% classified as nongovernment, not-for-profit, tax-exempt facilities and more than 22 percent classified as state and local government owned, tax-exempt facilities). This is primarily due to the fact that "many stand-alone hospitals and small non-profit systems simply do not have the capital, expertise, or economies of scale needed to compete in the rapidly changing market" (Poteet, Jack. "Hospital Tax Assessment: More Hospitals to Hit Tax Rolls", Fair & Equitable Magazine September 2010). An increasing number of for-profit hospital corporations are acquiring non-profit facilities due in part to the relatively tight credit markets, which places small, not-for-profit hospitals at a disadvantage due to their lack of access to Wall Street equity capital (compared to for-profit hospital corporations). Additionally, many local governments face budget crises, further fueling the trend of increased investor-owned hospitals (in order to increase local tax revenue). Large health systems also benefit from increased negotiating leverage with payers. It is further noted that healthcare related properties are attractive to investors due to the aforementioned positive projections for future demand in the healthcare sector.
The medical office market reflects the healthcare industry's resistance to the current recession as compared to other market sectors. Declines in the medical office market have generally been less significant than other market sectors. For instance, the median price of medical offices has declined approximately 16 percent since the 2007 peak of $169 per square foot. Comparatively, decreases in other commercial property types have ranged from 25 percent to 40 percent. According to Marcus & Millichap's October 2012 Special Medical Office Research Report, "Asking rents average slightly more than $22.00 per square foot on the national level but vary significantly by quality and location.. On average, space brought online within the past five years carries rents roughly 25% higher than earlier construction." While medical office capitalization rates have not yet returned to pre-recession levels, trends have improved (declined) over the past year. Overall capitalization rates (since 2nd Quarter 2008) in the medical office market are profiled in the following table. This data was obtained from the PwC Real Estate Investor Survey.
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7.2%
7.4%
7.6%
7.8%
8.0%
8.2%
8.4%
8.6%
8.8%
9.0%
Medical Office Building Market: Overall Capitalization Rate
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Neighborhood Analysis The subject property is located in the unincorporated community of Sugarmill Woods, Florida, along the east side of South Suncoast Boulevard, approximately 335 feet north of West Burnt Bridge Road, in the southwest quadrant of Citrus County.
The subject neighborhood is the corridor along South Suncoast Boulevard, north from West Ponce De Leon Boulevard to West McKinley Street, a distance of approximately 3.6 miles.
South Suncoast Boulevard is concurrent with U.S. Highway 98 and U.S. Highway 19.
U.S. Highway 98 is a 964-mile, east-west highway that connects western Mississippi and southern Florida. U.S. Highway 19 is a north-south, 1,377-mile route that
extends from Memphis, Florida to Erie, Pennsylvania.
West Ponce De Leon Boulevard, concurrent with U.S. Highway 98 and Florida Highway 700, splits from the southern terminus of the subject neighborhood and South Suncoast Boulevard and continues southeast to Palm Beach, Florida. West Ponce De Leon Boulevard intersects Suncoast Parkway (toll road) approximately 4.25 miles southeast of the subject neighborhood. Suncoast Parkway and Veterans Expressway (Florida Highway 589) is a 57-mile north-south toll road that connects U.S. Highway 98 to Tampa. Veterans Expressway (15 miles in length) was constructed to serve increasing commuter traffic in Tampa; Suncoast Parkway extended Veterans Expressway to U.S. Highway 98 in 2001 and is 42 miles long. Plans are in progress to extend the Parkway as Suncoast Parkway 2 from the existing intersection with West Ponce De Leon Boulevard north to the intersection of North Suncoast Boulevard, north of Dunnelon
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Road, in Crystal River. The extension will be located approximately three miles east of the subject neighborhood.
South Suncoast Boulevard is a four-lane roadway separated by a 50-foot grass median. Other roads include West Cardinal Street, a two-lane thoroughfare that connects South Suncoast Boulevard and the center of the subject neighborhood to South Lecanto Highway (County Road 491), which provides a route to the north and south around the Withlacoochee State Forest.
The subject neighborhood is approximately 30% developed, with the majority of improvements along and backing the east side of South Suncoast Boulevard.
Land uses include retail, medical, industrial, small office and secondary commercial uses along South Suncoast Boulevard.
Major retail uses include the recently constructed Walmart in the center of the subject neighborhood adjacent to the southeast corner of South Suncoast Boulevard and West Cardinal Road. The building is a 124,261-gross-square-foot structure and was completed in 2012. At the south quadrant of the neighborhood is the Shoppes at Sugarmill Woods. The Shoppes at Sugarmill Woods include a Publix super market, a Walgreens, Suntrust Bank and a small retail center containing 14,400 square feet built in 2007, with tenants that include Subway and Verizon.
South of the subject property is a 7,246 square-foot medical office building built in 1989. Tenancy includes Suncoast Primary Care and Center for Alternative Medicine. To the north is a vacant 3.6 acres that is the reported future site of a hematology and oncology center. Farther north is the Sweetwater Plaza with a variety of tenants including a sub sandwich shop, Southern Sun Title and medical tenants, including Premier Vein Control, Bay Dermatology and Cosmetic Surgery. The center was constructed in 2007.
Overall, the subject neighborhood is considered to be located in the older region of the community, well located to the primary thoroughfare in the area, U.S. Highway 41.
Pertinent demographics, presented in one-mile, three-mile and five-mile demographic rings from the property located to the north of the subject (7699 South Suncoast Boulevard) (from COSTAR) are located on the following page.
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In summary, the subject’s neighborhood is located in the corridor along South Suncoast Boulevard in the southwest quadrant of Citrus County and consists of retail, medical, industrial, small office and secondary commercial uses.
Overall, the neighborhood is in a state of stability in terms of its neighborhood life cycle. It is expected to remain in this stage into the foreseeable future.
SITE DESCRIPTION
LOCATION
The subject property is located at 7945-7955 South Suncoast Boulevard along the roadway’s east side, approximately 335 feet north of West Burnt Bridge Road, in the southwest quadrant of Citrus County.
The subject site has adequate access from one curb cut along South Suncoast Boulevard and indirect access from across the adjoining properties to the north and south.
SIZE
According to information from the Citrus County Property Appraiser, the subject site comprises a gross land area of
5.342 acres or approximately 232,685 square feet.
CONFIGURATION
The subject site is rectangular in shape. Based upon an estimate by the appraiser using the plat map from the Citrus County Property Appraiser, the subject property has approximately 460 feet of frontage along the east side of South Suncoast Boulevard.
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TOPOGRAPHY
The subject site is at street grade along South Suncoast Boulevard. Land adjacent to the eastern and southern perimeter of the building has been excavated approximately three feet to a lower depth to permit drainage.
The subject site provides for adequate surface drainage. Flood Insurance Rate Map number 1200630335B, dated August 15, 1984, indicates the subject is within Zone C. According to FEMA, Zone C is defined as "Area of minimal flood hazard, usually depicted on FIRMs as above the 500-year flood level.” According to the Land Development Code Atlas of Citrus County, the subject property is located within the Coastal High Hazard Area.
It is recommended that a definitive survey be conducted by engineers to determine the final status of the subject property.
GROUND STABILITY
No engineering study was made to determine the soil and subsoil conditions. However, the soils and subsoils of the subject land parcel appear to be adequate for commercial construction, as evidenced by the other existing structures located in the immediate area. It is assumed that the soil’s load bearing capacity is sufficient to support the existing structure. VMG Health did not observe any evidence to the contrary during physical inspection of the subject property.
HAZARDOUS MATERIALS/TOXIC WASTES
There were no known hazardous materials observed during an inspection of the property. It is assumed that no toxic wastes are present within the soils. However, VMG Health is not qualified to detect the presence or absence of such materials. If further evidence is needed regarding the lack of danger from hazardous materials or toxic wastes, authorities with expertise in detecting these conditions should be consulted.
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EASEMENTS/ENCROACHMENTS
There are no known easements or subsurface restrictions that would adversely affect the utility of the property.
PUBLIC AND PRIVATE LAND USE CONTROLS
Usage of property may be limited by public or private land use controls. Public land use controls include: zoning regulations; subdivision rules and regulations; board of health covenants (typically related to water and sewer services); wetland regulations; floodplain water resource and aquifer protection districts; endangered species act legislation; and/or county planning commissions and other overlay or floating districts. Zoning restrictions are the primary public land use control identified for the appraised property.
Under the Citrus County Land Development Code, the subject property is zoned PSI (Public/Semi-Public, Institutional District). The category permits medical and dental
office use.
UTILITIES
Water, sewer, gas and electric services are all available to the subject site and installed in sufficient supply that all types of development are possible.
CONCLUSION
Sufficient utilities are available and installed. There are no known easements or surface restrictions that would adversely affect the utility of the subject site. The subject site is conducive to a variety of uses, commercial and institutional, including its current use.
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IMPROVEMENTS DESCRIPTION
The Citrus Memorial Healthcare Center at Sugarmill Woods contains two structures, one building with medical office, diagnostic imaging and rehabilitation services and the other a medical office building (MOB).
Building Area (SF) Year Built 7945 South Suncoast Boulevard 20,368 2009 7955 South Suncoast Boulevard 3,145 1989 Total 23,513
Both buildings are of similar construction: a one-story structure with a concrete brick frame on a reinforced concrete slab on drilled piers and beams. The larger building has a sloped metal roof; the smaller has a sloped composite roof. Both feature an exterior of stucco with aluminum frame windows and entry doors.
The larger building located at 7945 South Suncoast Boulevard is segregated between a physician’s practice, the walk-in clinic, the laboratory and diagnostic imaging and the rehabilitation and aquatic center. The interior finish for the spaces include waiting rooms, reception areas, file rooms, exam rooms with sinks, restrooms and storage areas, as well as a waiting room with a vaulted ceiling. The floors are carpet or 1’X1’ vinyl tile, textured and painted or wallpapered walls, 2’X2’ ceiling tiles and recessed fluorescent lighting in 2’X4’ frames. The diagnostic imaging area includes rooms for mammography, bone density, ultrasound, and chest x-ray. The rehabilitation and aquatic center offers a gym and swimming pool.
The medical office building at 7955 South Suncoast Boulevard is equally divided into two separate physician’s offices. It is reported to include waiting rooms, reception areas, file rooms, exam rooms with sinks, restrooms and storage areas. The floors are carpet or 1’X1’ vinyl tile, textured and painted or wallpapered walls, 2’X2’ ceiling tiles and recessed fluorescent lighting in 2’X4’ frames. An interior inspection of the improvements was not conducted; the description is based on inspections of similar properties under the same ownership and discussion with property operations personnel.
The land improvements include asphalt paving, a monument sign, single-lamp halide lighting fixtures on aluminum poles, concrete curbs and walkways and landscaping.
Based on information provided by Citrus Memorial Health System, the cost to construct the building and improvements totaled $4,826,163, or $236.95 per square foot (based on 20,368 gross square feet). The site improvements totaled $109,861, or $5.39 per square foot of building area.
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The subject improvements are in average (7955 South Suncoast Boulevard) to good (7945 South Suncoast Boulevard) condition, which is consistent with the chronological age of the structures and the level of maintenance. The descriptive information provided in this section is based on our inspection of the site, combined with information provided by the owner/owner’s representatives. The subject’s physical adaptability conforms to that of its competitors.
Overall, the subject premises at 7945 South Suncoast Boulevard are considered to be of good-quality construction; the structure at 7955 South Suncoast Boulevard to be average. The project amenities of both buildings are consistent with competing projects and attract both patients and physicians. The design and layout appear to be conducive to the patients and medical staff for whom it is designed. Considering these facts, the subject premises’ physical characteristics conform well overall within its market segment. There were no incurable functional problems noted from our review of the subject space. As such, the improvements do not appear to suffer from any measurable functional or external obsolescence.
AD VALOREM TAXES
Assessed values for property tax purposes are based on assessments by the Citrus County Property Appraiser. The subject property is assessed under the Alt Key account number 2578777. The chart located below summarizes the assessed value for the subject property as of 2012.
Market/Just Value Assessed Value Taxable Value $2,413,145 $2,413,145 $0
The property is tax-exempt.
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Highest and Best Use Analysis
DEFINITION
Highest and Best Use may be defined as, “the reasonably probable and legal use of vacant land or an improved property that is physically possible, appropriately supported, and financially feasible, and that results in the highest land value.”6
Because the use of land can be limited by the presence of improvements, Highest and Best Use is determined separately for the site as though vacant and available to be put to its Highest and Best Use, and for the property as improved.
Highest and Best Use must meet four criteria. It must be:
Physically possible; Legally permissible; Financially feasible; and Maximally productive.
PROCEDURE
The Highest and Best Use analysis is performed in two parts:
The Highest and Best Use of the land as though vacant; and The Highest and Best Use of the land as though improved
In the analysis of Highest and Best Use of the land as though vacant, it is assumed that the land is vacant or can be made vacant by removal of existing improvements. The Highest and Best Use of the land as though vacant addresses the questions of what uses should be made of the land; and when and what type of improvement, if any, should be built on the site. The analysis of Highest and Best Use of the land as improved considers the alternative uses of an improved property.
Both parts of the Highest and Best Use are important to the appraisal process in several ways. For instance, the Highest and Best Use analysis helps to establish what types of properties are considered comparable, and often, the Highest and Best Use can reveal problems of functional or external obsolescence.
6 Appraisal of Real Estate, 13th Edition
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HIGHEST AND BEST USE AS VACANT
Physically Possible
The physical characteristics of the Citrus Memorial Healthcare Center at Sugarmill Woods are adequate. It has good accessibility and the site has level topography. All utilities are at the property. There are no physical conditions adversely affecting the development potential of the site as a whole. The site is sufficient in size to allow development without requiring the assemblage of adjacent parcels.
Legally Permissible
Legal restrictions pertaining to the subject land are limited primarily to private restrictions. The subject property is zoned PSI (Public/Semi-Public, Institutional District) by Citrus County Board of County Commissioners. The PSI District allows for public/semi-public and institutional facilities, including such activities as educational, religious, medical and health care, governmental and limited recreational uses. Therefore, the subject’s current use is considered legally permissible at the subject’s site.
Financially Feasible
Based on the subject’s location characteristics and surrounding property uses, development of the subject site with a medical use is considered feasible. The most financially feasible use of the site as vacant remains as future development of medical development upon economic justification.
Maximally Productive
The maximally productive use of the subject site, as if vacant, would be for development with medical development upon economic justification.
As Vacant Conclusion
It is VMG Health’s opinion that the Highest and Best Use of the subject site, as if vacant, would be for medical development upon economic justification.
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Highest and Best Use as Improved
The Highest and Best Use as Improved may determine that:
No changes are necessary to the existing improvements; or that Some changes or conversion are required; or that The property should be demolished and replaced.
In the case of the subject property, the improvements are functional and constitute a substantial improvement to the subject site. The cost of demolishing the improvements would far exceed any increase in revenue that could be generated from an alternative use at this time. The improvements conform to current private and public restrictions.
The improvements suffer from no form of incurable functional obsolescence. In all respects, the improvements are functional and well suited for their current use as a medical facility.
Conclusion
The subject site is improved with medical development including office, diagnostics and rehabilitation. The improvements contribute significantly to the value of the subject site and provide for both a return to the land and improvements. Therefore, it is our opinion that the Highest and Best Use as Improved of the property would be for the continued use as a medical facility and its related development.
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Valuation In earlier sections of this Summary Appraisal Report, the valuation problem and property characteristics were defined. Information regarding the interaction of four basic forces that motivate human activity (environmental conditions, governmental controls and regulations, social forces and economic conditions) and how they affect the overall commercial market as well as the subject property were analyzed. Additionally, the Highest and Best Use of the subject property was established. In the following section of this Summary Appraisal Report, general and specific data gathered will be analyzed to determine the Fair Market Value and the Fair Market Rent of the Fee Simple Estate by the appropriate appraisal processes.
The estimate of Fair Market Value of a property usually calls for employment of the three basic approaches to value. These approaches to value are identified as follows:
THE COST APPROACH
THE SALES COMPARISON APPROACH
THE INCOME APPROACH
The Cost Approach is based upon the proposition that the informed purchaser would pay no more than the cost of producing a substitute property with the same utility as the subject property. The Cost Approach is particularly applicable when the property being appraised involves relatively new improvements which represent the Highest and Best Use of the land or when relatively unique or specialized improvements are located on the site and for which there exists no comparable properties in the marketplace.
The Sales Comparison Approach is based upon the proposition that an informed purchaser would pay no more for a property than the cost of acquiring an existing property with the same utility. This approach is applicable when an active market provides sufficient quantities of reliable data which can be verified from authoritative sources. The Sales Comparison Approach is relatively unreliable in an inactive market or in estimating the value of properties for which no real comparable sales data is available.
The Income Approach is a procedure in appraisal analysis which converts the anticipated benefits (dollar income or amenities) to be derived from the ownership of property into a value estimate. The Income Approach is widely applied in appraising income producing properties. In this approach, an estimate of potential income for the subject property is first projected. From this amount, deductions are made for typically-incurred costs involved with ownership of the property, resulting in a net operating income estimate. An appropriate capitalization rate is then applied to the net operating income to derive at an indication of value.
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Income producing real estate is a capital good which is typically bought and sold primarily on the basis of the net income produced from the property. In all economic and investment analyses, of which real estate appraisal is an integral part, the value of a capital good is established and measured by calculating, as of a particular date, the present value of the anticipated future benefits (all sources of net revenue) to the owner over a specified period.
The appraisers analyzed all market data and considered all three traditional approaches to value.
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COST APPROACH
The Cost Approach is based on the principle of substitution, defined as "a set of procedures through which a value indication is derived for the fee simple interest in a property by estimating the current cost to construct a reproduction of (or replacement for) the existing structure, including an entrepreneurial incentive, deducting depreciation from the total cost, and adding the estimated land value. Adjustments may then be made to the indicated fee simple value of the subject property to reflect the value of the property interest being appraised."
In the Cost Approach, an estimate is conducted of the difference in worth to a potential buyer between the property appraised and a newly constructed building with optimal utility. The first step in the Cost Approach to value is to estimate the underlying land value. The next stage involves the estimation of the replacement cost new of the appraised improvements. Accrued depreciation due to physical deterioration, functional obsolescence and external obsolescence is then deducted from the replacement cost new. The resulting depreciated value of the improvements is then added to the estimated land value to arrive at a final value conclusion.
Estimate of Land Value
The first step in the Cost Approach to value is to estimate the underlying land value. The land is valued separately, assuming it is vacant and available for development to its Highest and Best Use. Forming an opinion of value for the subject tract involved the investigation, inspection and gathering of data regarding similar vacant tracts within the local area. A comparative analysis was conducted of these transactions, and the sale prices were adjusted for the following six characteristics: Property Rights Conveyed; Financing; Conditions of Sale; Market Conditions (Time); Location; and Physical Characteristics.
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SCOPE OF THE INVESTIGATION
The market investigation revealed several recent sales of comparable land parcels. The sales were obtained from reliable sources and/or verified by county records, grantor, grantee, broker, or appraisers with knowledge of the transaction.
UNIT OF COMPARISON
Individual tracts of land within the area are typically bought and sold on the basis of price per square foot of land area. Thus, for this appraisal, the price per square foot of land area will be analyzed.
LAND SALES
The following market indicators are considered to be the best available for valuation of the subject site. All of the comparables consist of land parcels in the surrounding area that were acquired for commercial/retail purposes. A map showing the location of these market indicators in relation to the subject property is included on the following page. A discussion of each sale follows the sales map.
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Land Sale No. 1
Location 7230 W. Miss Maggie DriveHomosassa, Citrus County, Florida
Parcel Identification Number 3377200
Grantor FEDERAL DEPOST INSURANCE CORPORATION ASRECEIVER OF COLONIAL BANK, N.A.
Grantee US 19 AND 98 ACQUISITIONS, LLC, a Florida limited liabilitycompany
Date of Sale July 30, 2010
Instrument Special Warranty Deed
Recording Book 2368 / Page 1734 of Citrus County
Adjusted Sale Price $225,000Per Square Foot $4.67Per Acre $203,343
Financing Cash to Seller
Land Size (Square Feet) 48,199Land Size (Acres) 1.107
Zoning GNC (General Commercial District)
Shape Irregular
Frontages Approximately 320 feet along west side of South SuncoastBoulevard; 230 feet along W. Miss Maggie Drive
Topography Level and at street grade
Utilities Available
Easements None detrimental
DRAFT
SUMMARY APPRAISAL REPORT Page 48
CITRUS COUNTY HOSPITAL BOARD
Land Sale No. 2
Location West side of S. Suncoast Boulevard, appr. 210 feet north of W. MissMaggie Drive
Homasassa, Citrus County, Florida
Parcel Identification Number 3495211
Grantor US 19 AND 98 ACQUISITIONS, LLC, a Florida limited liabilitycompany
Grantee Teramore, LLC, a Georgia limited liability company
Date of Sale January 2, 2013
Instrument Warranty Deed
Recording Book 2524 / Page 1437, 1435 of Citrus County
Sale Price $217,500Per Square Foot $3.36Per Acre $146,348
Financing Cash to Seller
Land Size (Square Feet) 64,738Land Size (Acres) 1.486
Zoning GNC (General Commercial District)
Shape Rectangular
Frontages Approximately 190 feet along west side of South Suncoast Boulevard
Topography Level
Utilities Available
Easements None Detrimental
DRAFT
SUMMARY APPRAISAL REPORT Page 49
CITRUS COUNTY HOSPITAL BOARD
Land Sale No. 3
Location 8631 South Suncoast BoulevardSugarmill Woods, Citrus County, Florida
Parcel Identification Number 1182018
Grantor SMW Properties, Inc., a Florida corporation
Grantee CRM FLORIDA PROPERTIES, LLC, a Georgia limited liability company
Date of Sale October 2, 2012
Instrument Special Warranty Deed
Recording Book 2507 / Page 0873 of Citrus County
Sale Price $90,900Per Square Foot $0.86Per Acre $37,499
Financing Cash to Seller
Land Size (Square Feet) 105,591Land Size (Acres) 2.424
Zoning GNC (General Commercial District)
Shape Rectangular
Frontages Approximately 200 feet along east side of South Suncoast
Topography At street grade; the western quadrant has two retention ponds.
Utilities Available
Easements None detrimental
DRAFT
SUMMARY APPRAISAL REPORT Page 50
CITRUS COUNTY HOSPITAL BOARD
Land Sale No. 4
Location 7114 South Suncoast BoulevardHomosassa, Citrus County, Florida
Parcel Identification Number 2595051
Grantor Community Bank of Manateee, a Florida corporation
Grantee Pinzon, LLC, a Florida limited liability company
Date of Sale January 7, 2011
Instrument Warranty Deed
Recording Book 2396 / Page 2410 of Citrus County
Sale Price $113,500Per Square Foot $0.90Per Acre $39,159
Financing Cash to Seller
Land Size (Square Feet) 126,257Land Size (Acres) 2.898
Zoning MDR (Medium Density Residential District)
Shape Rectangular
Frontages Approximately 210 feet along west side of South Suncoast Boulevard
Topography Generally level
Utilities Available
Easements None detrimental
DRAFT
SUMMARY APPRAISAL REPORT Page 51
CITRUS COUNTY HOSPITAL BOARD
Cit
rus
Mem
oria
l Hea
lthc
are
Cen
ter
at S
ugar
mill
Woo
ds79
45 -
795
5 S
outh
Sun
coas
t B
oule
vard
Sug
arm
ill W
oods
, Flo
rida
LA
ND
CO
MP
AR
AB
LES
SU
MM
AR
Y
DA
TE
LA
ND
LA
ND
AD
JUST
ED
PR
ICE
OF
AR
EA
AR
EA
SAL
EP
ER
#L
OC
AT
ION
SAL
E(N
ET
AC
RE
S)(S
F)
PR
ICE
SF
172
30 W
. Mis
s M
aggi
e D
rive
30-J
ul-1
01.
107
48,1
99$2
25,0
00$4
.67
Hom
osas
sa, C
itru
s C
ount
y, F
lori
da
2
Wes
t sid
e of
S. S
unco
ast B
oule
vard
, app
r. 2
10 fe
et n
orth
of W
. M
iss
Mag
gie
Dri
ve02
-Jan
-13
1.48
664
,738
$217
,500
$3.3
6
Hom
asas
sa, C
itru
s C
ount
y, F
lori
da
386
31 S
outh
Sun
coas
t Bou
leva
rd02
-Oct
-12
2.42
410
5,59
1$9
0,90
0$0
.86
Sug
arm
ill W
oods
, Cit
rus
Cou
nty,
Flo
rida
471
14 S
outh
Sun
coas
t Bou
leva
rd07
-Jan
-11
2.89
812
6,25
7$1
13,5
00$0
.90
Hom
osas
sa, C
itru
s C
ount
y, F
lori
da
Sub
ject
:79
45 -
7955
Sou
th S
unco
ast B
oule
vard
Cur
rent
5.34
223
2,68
5?
?
Sug
arm
ill W
oods
, Flo
rida
DRAFT
SUMMARY APPRAISAL REPORT Page 52
CITRUS COUNTY HOSPITAL BOARD
The aforementioned comparables represent sales of commercial land parcels within the subject neighborhood. The appraised property is subject to the same external influences as the comparable sales. As previously mentioned, each of the market indicators is adjusted for: 1) property rights conveyed; 2) financing terms; 3) conditions of sale; 4) market conditions; 5) location; and 6) physical characteristics. Each of these items will be discussed below with the resulting adjustments presented on the adjustment grid at the end of this section.
PROPERTY RIGHTS CONVEYED
Property rights consist of both the physical real estate and the rights involved in ownership of the land. In analyzing the land transactions, all involve the exchange of the Fee Simple Estate in the land. The analysis of the subject property utilizing the Cost Approach requires that the value of Fee Simple Estate of the land be determined. Therefore, no other adjustments for property rights conveyed were required in determining the value of the subject land parcel.
FINANCING TERMS
Financing arrangements may change the transaction prices of two identical properties. Therefore, financing terms of the comparable sales must be investigated to determine which sales, if any, require adjustments to reflect normal market financing terms. Analysis of the comparables indicates the sales were made on either a cash basis, or with the grantee obtaining financing at prevailing market rates, and no adjustments were necessary.
CONDITIONS OF SALE
Adjustments for conditions of sale usually reflect the motivations of the buyer and the seller. In many situations, the conditions of sale significantly affect transaction prices. Investigation of the comparable sales revealed that the sales involved arm's-length transactions reflecting typical buyer motivations, and no adjustments were necessary for this element of comparison.
MARKET CONDITIONS
An adjustment for market conditions may be required to a comparable if property values have appreciated or depreciated between the time of occurrence and the appraisal date. Each of the sales have occurred after the start of the recession in 2008; accordingly, no adjustment is applied.
DRAFT
SUMMARY APPRAISAL REPORT Page 53
CITRUS COUNTY HOSPITAL BOARD
LOCATION
The subject site is located along the east side of South Suncoast Boulevard, approximately 1.7 miles north of the intersection with U.S. Highway 98 to the south. Sale Nos. 1 and 2 are considered to have a superior location given their proximity to the intersection of South Suncoast Boulevard and U.S. Highway 98. Sale No. 1 is located at the southwest corner, indicating an additional downward adjustment. The remaining sales are located north and south of the subject away from the influence of the intersection. For Sale Nos. 3 and 4, no adjustment is applied.
PHYSICAL CHARACTERISTICS
The subject site comprises a land area of approximately 5.342 acres, while the comparable sales range in size from 1.107 to 2.898 acres.
Typically, tracts with smaller land sizes sell for a higher unit price due to developmental economies of scale. Based on size, the sales have been adjusted downward 30%, 25%, 10% and 10%, respectively. The subject property is rectangular in shape, but has a greater frontage to depth ratio that Sale Nos. 2, 3 and 4. An upward adjustment is applicable for the inferior configuration to these transactions. No other adjustments for physical characteristics were warranted.
A comparable land sales adjustment chart is included on the following page.
DRAFT
SUMMARY APPRAISAL REPORT Page 54
CITRUS COUNTY HOSPITAL BOARD
Cit
rus
Mem
oria
l Hea
lthc
are
Cen
ter
at S
ugar
mill
Woo
ds79
45 -
795
5 S
outh
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coas
t B
oule
vard
Sug
arm
ill W
oods
, Flo
rida
Com
para
ble
Lan
d S
ales
Adj
ustm
ent
Gri
d Sub
ject
Sal
e N
o. 1
Sal
e N
o. 2
Sal
e N
o. 3
Sal
e N
o. 4
Add
ress
/79
45 -
795
5 S
outh
Sun
coas
t B
oule
vard
SW
C S
. Sun
coas
t Blv
d &
W
. Mis
s M
aggi
e D
r.W
/S S
. Sun
coas
t Blv
d,
appr
. 210
' N o
f W
. Mis
s M
aggi
e D
r.
8631
Sou
th S
unco
ast B
oule
vard
W/S
of
McK
ay B
lvd,
app
rx.
800'
SW
of
N. M
emor
ial
Driv
eC
ityS
ugar
mill
Woo
ds, C
itrus
Cou
nty,
Hom
osas
sa, C
itrus
Cou
nty,
F
lorid
aH
omas
assa
, Citr
us C
ount
y,
Flo
rida
Sug
arm
ill W
oods
, Citr
us
Cou
nty,
Flo
rida
Hom
osas
sa, C
itrus
Cou
nty,
F
lorid
aS
ale
Dat
e30
-Jul
-10
02-J
an-1
302
-Oct
-12
07-J
an-1
1S
ale
Pric
e ($
)$2
25,0
00$2
17,5
00$9
0,90
0$1
13,5
00L
and
Are
a (S
F)
232,
685
48,1
9964
,738
105,
591
126,
257
Pric
e $/
SF
$4.6
7$3
.36
$0.8
6$0
.90
Util
ities
In-P
lace
All
Ava
ilabl
eA
ll A
vaila
ble
All
Ava
ilabl
eA
ll A
vaila
ble
but s
ewer
Top
ogra
phy
Gen
eral
ly le
vel
Sim
ilar
Sim
ilar
Sim
ilar
Sim
ilar
Zon
ing
PS
IG
NC
(G
ener
al C
omm
erci
al D
istr
ict)
GN
C (
Gen
eral
Com
mer
cial
Dis
tric
t)G
NC
(G
ener
al C
omm
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al D
istr
ict)
MD
R (
Med
ium
Den
sity
R
esid
entia
l Dis
tric
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prov
emen
tsA
s V
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ue A
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tion
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escr
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crip
tion
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rope
rty
Rig
hts
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veye
dF
ee S
impl
eF
ee S
impl
e0%
Fee
Sim
ple
0%F
ee S
impl
e0%
Fee
Sim
ple
0%F
inan
cing
Cas
hC
ash
0%C
ash
0%C
ash
0%C
ash
0%C
ondi
tions
of
Sal
eT
ypic
alN
one
0%N
one
0%N
one
0%N
one
0%D
ate
of S
ale
(Tim
e)C
urre
nt30
-Jul
-10
0%02
-Jan
-13
0%02
-Oct
-12
0%07
-Jan
-11
0%A
djus
ted
Val
ue (
$/S
F)
$4.6
7$3
.36
$0.8
6$0
.90
Phy
sica
l Cha
ract
eris
tics
Loc
atio
nG
ood
Sup
erio
r-3
0%S
uper
ior
-20%
Sim
ilar
0%S
imila
r0%
Zon
ing/
Res
tric
tions
PS
IS
imila
r0%
Sim
ilar
0%S
imila
r0%
Sim
ilar
0% S
ize
(SF
)23
2,68
5S
mal
ler
-30%
Sm
alle
r-2
5%S
mal
ler
-10%
Sm
alle
r-1
0% S
hape
Rec
tang
ular
Sim
ilar
0%In
ferio
r5%
Infe
rior
10%
Infe
rior
10%
Vis
ibili
ty/F
ront
age/
Acc
ess
Goo
dS
imila
r0%
Sim
ilar
0%S
imila
r0%
Sim
ilar
0% T
opog
raph
yL
evel
and
at g
rade
Sim
ilar
0%S
imila
r0%
Sim
ilar
0%S
imila
r0%
Impr
ovem
ents
As
Vac
ant
Vac
ant
0%V
acan
t0%
Vac
ant
0%V
acan
t0%
Com
posi
te A
djus
tmen
t-6
0%-4
0%0%
0%
Indi
cate
d V
alue
of
Sub
ject
($/
SF
)$1
.87
$2.0
2$0
.86
$0.9
0
Min
imum
:$0
.86
Max
imum
:$2
.02
Mea
n:$1
.41
Med
ian:
$1.3
8
Con
clus
ion:
$1.5
0
$349
,028
RO
UN
DE
D:
$350
,000
DRAFT
SUMMARY APPRAISAL REPORT Page 55
CITRUS COUNTY HOSPITAL BOARD
The adjusted unit sale prices of the comparable market indicators range from $0.86 to $2.02 per square foot, with a mean of $1.41 per square foot. The median is $1.38 per square foot. Based on this analysis, a value of approximately $1.50 per square foot of land area is considered reasonable. The estimated value of the subject site is calculated as follows:
232,685 Square Feet @ $1.50 p.s.f. = $349,028 Say $350,000
DRAFT
SUMMARY APPRAISAL REPORT Page 56
CITRUS COUNTY HOSPITAL BOARD
COST OF REPLACEMENT
Cost of Replacement New is defined on page 168 of The Dictionary of Real Estate Appraisal, Fifth Edition as "The estimated cost to construct, at current prices as of the effective appraisal date, a substitute for the building being appraised, using modern materials and current standards, design, and layout."
The cost of replacement new is estimated utilizing the calculator method. The calculator cost method is based on the Marshall Valuation Service. The Marshall Valuation Service is a nationally recognized cost estimating service which publishes current costs for various building components.
The total building area is 23,513 gross square feet. For the cost calculation, the two buildings are segregated (the medical office, diagnostics and rehabilitation center at 7945 South Suncoast Boulevard which contains 20,368 gross square feet and the medical office building at 7955 South Suncoast Boulevard with 3,145 gross square feet).
The Replacement Cost New (RCN) for the building components, including soft costs and entrepreneurial profit, is $5,550,000.
Included in the RCN (before soft costs and entrepreneurial profit) are miscellaneous items ($302,819) and site improvements ($382,774).
Details of the calculations are presented on the following pages.
Miscellaneous Fees and Entrepreneurial Profit
The Marshall Valuation Service also considers typical contractors' overhead and profit. Overhead is divided into two categories: general overhead costs and job overhead costs. General overhead includes all costs that cannot be charged to any particular job, including office rent, office supplies and equipment, utilities, advertising and salaries for office personnel. Job overhead includes costs which can be charged directly to the jobs at hand but which cannot be charged directly to materials, labor or equipment. Such items include temporary buildings, barricades, permits, surveys and on-site utilities. Every contractor is entitled to a profit from construction projects. Contractors' overhead and profit, expressed as a percentage of the sum of materials and labor, are based upon extensive surveys of numerous major markets.
Costs not included in the Marshall Valuation Service estimate are miscellaneous fees. Miscellaneous fees include all other indirect costs such as appraisal fees, recording fees, attorneys' fees, surveys, land taxes during construction and contingency fees.
DRAFT
SUMMARY APPRAISAL REPORT Page 57
CITRUS COUNTY HOSPITAL BOARD
Entrepreneurial Profit is defined on page 96 of The Dictionary of Real Estate Appraisal, Fifth Edition as "A market-derived figure that represents the amount an entrepreneur receives for his or her contribution to a project and risk; the difference between the total cost of a property (cost of development) and its market value (property value after completion), which represents the entrepreneur's compensation for the risk and expertise associated with development."
Analysis indicates that real estate developers have historically demanded a profit yield of 5% to 20% of total project costs.
For purpose of this analysis, the Miscellaneous Fees and Entrepreneurial Profit is estimated to be 5%, or $264,120, as shown.
Depreciation
Depreciation is defined on page 56 of The Dictionary of Real Estate Appraisal, Fifth Edition as "a loss in property value from any cause." The three principal categories of depreciation that occur in real estate are physical deterioration, functional obsolescence and external obsolescence. Physical deterioration is the actual wear and tear due to use and exposure to the elements; functional obsolescence is caused by defects in design, size or style of the improvements; and external obsolescence is attributed to negative economic, political or social influences. To accurately estimate each form of depreciation that applies to the subject property, the breakdown method of accrued depreciation was employed. The five basic elements of the breakdown method are 1) curable physical deterioration, 2) incurable physical deterioration, 3) curable functional obsolescence, 4) incurable functional obsolescence and 5) external obsolescence.
Curable physical deterioration refers to items of deferred maintenance, or those items that should be corrected immediately as of the date of the appraisal. No capital is deducted for curable physical deterioration.
Incurable physical deterioration is a defect caused by wear and tear that is impractical or uneconomical to correct. This element of accrued depreciation is calculated for all structural components, net of deferred maintenance, and is classified as either short-lived or long-lived items. As previously stated, the medical office, diagnostics and rehabilitation center at 7945 South Suncoast Boulevard is considered to be in good condition; the medical office building at 7955 South Suncoat Boulevard is average. The incurable physical deterioration is estimated within the following Cost Approach Conclusion page by applying the estimated effective age to the estimated useful life on a straight line basis.
Functional obsolescence is categorized into two major classifications - curable functional obsolescence and incurable functional obsolescence. Curable functional
DRAFT
SUMMARY APPRAISAL REPORT Page 58
CITRUS COUNTY HOSPITAL BOARD
obsolescence is defined on page 50 of The Dictionary of Real Estate Appraisal, Fifth Edition as "An element of depreciation; a curable defect caused by a flaw in the structure, materials, or design." Incurable functional obsolescence is defined on page 100 of The Dictionary of Real Estate Appraisal, Fifth Edition as "An element of depreciation; a defect caused by a deficiency or superadequacy in the structure, materials, or design, which cannot be practically or economically corrected."
As discussed earlier in this Summary Appraisal Report, the improvements of both 7945 and 7955 South Suncoast Boulevard are adequately designed for their intended use and do not suffer from functional obsolescence.
External market influences can have an impact on a property's value; external obsolescence is the loss in value caused by such an external influence. The recent recession coupled with the subject property’s location in a small community suggests that the subject property suffers from some external obsolescence. No specific deduction was made but external obsolescence will be considered in the reconciliation.
The conclusions reached by the Cost Approach are summarized on the following pages. As stated, the estimated value concluded for the subject property's Fee Simple Estate by application of the Cost Approach is $5,100,000.
DRAFT
SUMMARY APPRAISAL REPORT Page 59
CITRUS COUNTY HOSPITAL BOARD
PRELIMINARY DRAFT ‐ SUBJECT TO CHANGE
As of February 6, 2013
Building Number & Name TOTAL
Occupancy Number & Name 431/341
MOB / Diagnostic
/ Rehabilitation /
Aquatic Center 341
Medical Office
Building
Section Number & Page 15 25/22 15 22
Construction Class & Quality C Good C AverageGross Building Area (Square Feet) 20,368 3,145 23,513
Gross Perimeter (Linear Feet)
Number of Floors & Height per Story (Feet) 1 12 1 12
Base Cost ‐ Square Foot $205.52 $123.80
Refinements ‐ Square Foot
Heating, cooling, ventilating $0.00 $0.00
Elevator ‐$3.45 ‐$2.10
Sprinkler System $3.00 $0.00
Miscellaneous $0.00 $0.00
$205.07 $121.70
Refinements ‐ Multipliers
Number of Stories 1.000 1.000
Height per Story 1.000 1.000
Floor Area & Perimeter 0.933 1.046
Current Cost Multiplier 1.070 1.070
Local Cost Multiplier 1.000 1.000
Net Multiplier 0.998 1.119
Replacement Cost New (RCN)
Adjusted Cost ‐ Square Foot 204.66 136.18
Extended Base Cost $4,168,515 $428,286 $4,596,801
Miscellaneous ‐ ‐ 302,819$ 302,819
Site Improvements ‐ ‐ 382,774 382,774
Subtotal $4,168,515 $428,286 $685,593 $5,282,394
Soft Costs & Entreprenurial Profit 5.0% $208,426 5.0% $21,414 5.0% 34,280 264,120
RCN $4,376,941 $449,700 719,873$ $5,546,514
RCN Rounded $4,380,000 $450,000 $720,000 $5,550,000
RCN per Square Foot $215.04 $143.08 $236.04
Depreciation
Year Built 2009 1989
Physical Age 4 24
Effective Age 4 17
Economic Life (Section 97, Page 13) 45 40
Remaining Useful Life 41 23
Physical Depreciation (Age/Life) 8.9% $389,333 42.5% $191,250 $213,987 794,570
RCN less Physical Depreciation $3,990,667 $258,750 $506,013 $4,755,430
Functional Obsolescence 0.0% $0 0.0% $0 $0 ‐
less Functional Obsolescence $3,990,667 $258,750 $506,013 $4,755,430Economic Obsolescence 0.0% $0 0.0% $0 $0 ‐
less Economic Obsolescence $3,990,667 $258,750 $506,013 $4,755,430
Depreciated Cost $3,990,000 $260,000 $510,000 $4,760,000
per Square Foot $195.90 $82.67 $202.44
1 ‐ Citrus Memorial
Healthcare Center
2 ‐ Citrus Memorial
Healthcare Center
3‐ Miscellaneous and
Land Improvements
Parcel No. 5 ‐ Citrus Memorial Healthcare CenterBuilding Cost Development
Sugarmill Woods, Citrus County, Florida
688 241
DRAFT
SUMMARY APPRAISAL REPORT Page 60
CITRUS COUNTY HOSPITAL BOARD
PRELIM
INARY DRAFT ‐ SUBJECT TO
CHANGE
Current Cost
Local
Total
Multiplier
Multiplier
Cost
Canopies
3,685sf
$57.75
1.07
1.00
227,705
$
MVS ‐ Section 15 Page 37
Pool
600
117.00
$
1.07
1.00
75,114
MVS ‐ Section 66 Page 7
302,819
5%
15,141
Replacement Cost New
317,960
$
Depreciation %
13.4%
Depreciation
42,558
$
Source
Miscellaneous Items Pricing Support
Parcel N
o. 5
‐ Citrus Mem
orial Healthcare Center
Description
Quantity
Unit
Unit Cost
DRAFT
SUMMARY APPRAISAL REPORT Page 61
CITRUS COUNTY HOSPITAL BOARD
As of February 6, 2013
PRELIM
INARY DRAFT ‐ SUBJECT TO
CHANGE
Multipliers
Type
Description
MVS
Section
Page
Quantity
Unit
Unit Base
Cost
Current
Local
Unit Replacement
Cost, N
ew
Replacement
Cost New
Paving
Good quality asphalt parking lot(est)
66
386,650
SF$3.50
1.04
1.00
$3.64
$315,406
Paving
Good quality concrete parking lot(est)
66
32,820
SF$4.50
1.04
1.00
$4.68
$13,198
Landscaping
Landscaping
66
81,000
SF$3.71
1.04
1.00
$3.86
3,860
Lighting
Lighting
66
115
Units
$3,225
1.04
1.00
$3,354.00
50,310
Total Replacement Cost New (CRN)
$382,774
5%
19,139
$401,913
CRN Rounded
$400,000
Effective Age
3
Economic Life (Section 97, Page 19)
7
Rem
aining Useful Life
4
Physical Depreciation (Age/Life)
42.9%
$171,429
RCN less Physical Depreciation
$228,571
Functional Obsolescence
0.0%
$0
less Functional Obsolescence
$228,571
Economic Obsolescence
0.0%
$0
less Economic Obsolescence
$228,571
Depreciated Cost
$230,000
Sugarm
ill Woods, Florida
Parcel N
o. 5
‐ Citrus Mem
orial Healthcare Center
Land Im
provements Cost Development
DRAFT
SUMMARY APPRAISAL REPORT Page 62
CITRUS COUNTY HOSPITAL BOARD
The conclusions reached by the Cost Approach are summarized on the following page. As presented, the estimated value concluded for the subject property's Fee Simple Estate by application of the Cost Approach is $5,100,000.
DRAFT
SUMMARY APPRAISAL REPORT Page 63
CITRUS COUNTY HOSPITAL BOARD
Parcel No. 5 - Citrus Memorial Healthcare Center7945-7955 S. Suncoast BoulevardSugarmill Woods, Citrus County, Florida
TOTAL REPLACEMENT COST NEW $5,550,000
Less Accrued Depreciation:
Physical Curable $0
Physical Incurable 794,570
Total Physical $794,570
Functional Curable Obsolescence $0
Functional Incurable Obsolescence 0
Total Functional Obsolescence 0
External Obsolescence 0
TOTAL ACCRUED DEPRECIATION $794,570
LAND IMPROVEMENTS & BUILDINGS $4,755,430
PLUS LAND VALUE $350,000
ROUNDED RCNLD $5,110,000
ROUNDED $5,100,000
LESS ADJUSTMENTS -
VALUE INDICATED BY THE COST APPROACH $5,100,000
COST APPROACH CONCLUSION
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SALES COMPARISON APPROACH
The Sales Comparison Approach is applicable when an active market provides sufficient quantities of reliable data which can be verified from authoritative sources. The Sales Comparison Approach is relatively unreliable in an inactive market or in estimating the value of properties for which no real comparable sales data is available.
In order to estimate the Fair Market Value in the subject property via the Sales Comparison Approach, a search was conducted for arm's-length sales of similar projects.
The subject property consists of two buildings: the medical office, diagnostics and rehabilitation center at 7945 South Suncoast Boulevard which contains 20,368 gross square feet; and the medical office building at 7955 South Suncoast Boulevard with 3,145 gross square feet.
As support for the conclusion of value, a search of sales revealed four comparable properties that have sold within the past two years. Details of the transactions are located on the following pages.
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The subject property consists of two buildings: the medical office, diagnostics and rehabilitation center at 7945 South Suncoast Boulevard which contains 20,368 gross square feet; and the medical office building at 7955 South Suncoast Boulevard with 3,145 gross square feet. The analysis will be segregated between the two.
7945 SOUTH SUNCOAST BOULEVARD
Following is a summary of the subject property at 7945 South Suncoast Boulevard which contains 20,368 gross square feet and the comparable sales.
Parcel No. 5 ‐ Citrus Memorial Healthcare Center at Sugarmill Woods ‐ 7945 S. Suncoast Parkway
Improved Sales Summary
Subject PropertyImproved Sale
No. 1
Improved Sale
No. 2
Improved Sale
No. 3
Improved Sale
No. 4
NameCitrus Memorial
Healthcare
Address7945 S. Suncoast
Blvd.
6043 West
Nordling Loop
and 810 Medical
Court East
102 East Highland
Boulevard
203 South
Seminole
Avenue
2401 Forest Drive
City Sugarmill WoodsCrystal River and
InvernessInverness Inverness Inverness
State Florida Florida Florida Florida Florida
Transaction Date 5/15/2012 11/16/2012 5/8/2012 5/25/2011
Gross Building Area: 20,368 13,756 2,520 2,200 3,016
Land Acres 4.627 1.814 0.373 0.373 0.608
Land‐to‐Building Ratio 9.896 5.744 6.448 7.386 8.788
Parking Surface Surface Surface Surface Surface
Year Built 2009 1995 1994 2002 1983
Condition Good Good Good Good Good
Sale Price $ 1,800,000 $ 295,000 $ 250,000 $ 400,000
Price per SF $ 130.85 $ 117.06 $ 113.64 $ 132.63
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The following adjustments were considered applicable.
LOCATION
Each of the comparables is located in more-developed areas. Sale No. 1 includes two buildings as one transaction; one of those properties is located in the immediate vicinity of the Citrus Memorial Hospital in Inverness. Furthermore, each of the remaining sales are also near the Citrus Memorial Hospital. On this basis, a downward adjustment was applicable to each of the comparable sales.
AGE/CONDITION
The subject property was constructed in 2009. Each of the comparable sales are older. On the basis of age, an upward adjustment was applied, with a greater adjustment to the Sale No. 4.
CONSTRUCTION CHARACTERISTICS
The subject property includes medical office, diagnostics and rehabilitation facilities within the structure. Sale No. 1 represents the sale of two buildings with rehabilitation facilities within the structure. The remaining three sales are medical office buildings. Additionally, the subject represents a superior property compared to each of the comparable sales because of the diagnostics area. In addition, three of the comparables are considered inferior with regard to the rehabilitation area, which includes the swimming pool. An upward adjustment ranging from 43% to 80% was applied to the comparable sales for the incremental cost to include these amenities offered by the subject property, including diagnostics, rehabilitation and aquatics.
LAND-TO-BUILDING RATIO
Sale Nos. 1 and 2 have a lower land-to-building ratio compared to the subject; on this basis a downward adjustment was applicable.
BUILDING SIZE
The subject contains 20,368 gross square feet and is larger than each of the comparable sales. Typically, smaller buildings sell for a higher unit price due to developmental economies of scale. Downward adjustments ranging from 5% to 10% were applied.
A comparable land sales adjustment chart is included on the following page.
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The adjusted unit sale prices of the comparable market indicators range from $174.15 to $207.24 per square foot, with a mean of $189.95 per square foot. The median is $189.20 per square foot. Based on this analysis, a value of approximately $190.00 per square foot of building area is considered reasonable. The estimated value of the subject medical office, diagnostics and rehabilitation center at 7945 South Suncoast Boulevard which contains 20,368 gross square feet is calculated as follows:
20,368 Square Feet @ $190 p.s.f. = $3,869,920, Say $3,900,000
Parcel No. 5 ‐ Citrus Memorial Healthcare Center at Sugarmill Woods ‐ 7945 S. Suncoast Parkway
Improved Sales Adjustment Grid
Subject PropertyImproved Sale
No. 1
Improved Sale
No. 2
Improved Sale
No. 3
Improved Sale
No. 4
Name
Address7945 S. Suncoast
Blvd.
6043 West
Nordling Loop
and 810 Medical
Court East
102 East Highland
Boulevard
203 South
Seminole
Avenue
2401 Forest Drive
City Sugarmill WoodsCrystal River and
InvernessInverness Inverness Inverness
State Florida Florida Florida Florida Florida
Sale Price per SF $130.85 $117.06 $113.64 $132.63
Propert Rights Conveyed 0% 0% 0% 0%
Adjusted Sale Price $130.85 $117.06 $113.64 $132.63
Financing Terms 0% 0% 0% 0%
Adjusted Sale Price $130.85 $117.06 $113.64 $132.63
Conditions of Sale 0% 0% 0% 0%
Adjusted Sale Price $130.85 $117.06 $113.64 $132.63
Market Conditions 0% 0% 0% 0%
Adjusted Sale Price $130.85 $117.06 $113.64 $132.63
Location and Physical Adjustments
Location ‐5% ‐5% ‐5% ‐5%
Age/Condition 5% 5% 5% 10%
Construction Quality 0% 0% 0% 0%
Construction Characteristics 43% 74% 80% 61%
Land‐to‐Building Ratio ‐5% ‐5% 0% 0%
Building Size ‐5% ‐10% ‐10% ‐10%
Parking 0% 0% 0% 0%
Net Adjustments 33% 59% 70% 56%
Adjusted Sale Price $174.15 $185.65 $192.74 $207.24
Adjusted Unit Indicators
Population Size Minimum Adjusted Unit Price: $174.15
Maximum Adjusted Unit Price: $207.24
Median Adjusted Unit Price: $189.20
Mean Adjusted Unit Price: $189.95
Concluded Unit Value:
Indicated Value: 190.00$
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7955 SOUTH SUNCOAST BOULEVARD
With regard to the second building, following is a summary of the subject property at 7955 South Suncoast Boulevard with 3,145 gross square feet and the comparable sales.
Parcel No. 5 ‐ Citrus Memorial Healthcare Center at Sugarmill Woods ‐ 7955 S. Suncoast Parkway
Improved Sales Summary
Subject PropertyImproved Sale
No. 1
Improved Sale
No. 2
Improved Sale
No. 3
Improved Sale
No. 4
NameCitrus Memorial
Healthcare
Address7955 S. Suncoast
Blvd.
6043 West
Nordling Loop
and 810 Medical
Court East
102 East Highland
Boulevard
203 South
Seminole
Avenue
2401 Forest Drive
City Sugarmill WoodsCrystal River and
InvernessInverness Inverness Inverness
State Florida Florida Florida Florida Florida
Transaction Date 5/15/2012 11/16/2012 5/8/2012 5/25/2011
Gross Building Area: 3,145 13,756 2,520 2,200 3,016
Land Acres 0.715 1.814 0.373 0.373 0.608
Land‐to‐Building Ratio 9.896 5.744 6.448 7.386 8.788
Parking Surface Surface Surface Surface Surface
Year Built 1989 1995 1994 2002 1983
Condition Average Good Good Good Good
Sale Price $ 1,800,000 $ 295,000 $ 250,000 $ 400,000
Price per SF $ 130.85 $ 117.06 $ 113.64 $ 132.63
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The following adjustments were considered applicable.
LOCATION
Each of the comparables is located in more-developed areas. Sale No. 1 includes two buildings as one transaction; one of those properties is located in the immediate vicinity of the Citrus Memorial Hospital in Inverness. Furthermore, each of the remaining sales are also near the Citrus Memorial Hospital. On this basis, a downward adjustment was applicable to each of the comparable sales.
AGE/CONDITION
The subject property was constructed in 1989. Sale No. 4 is considered similar in age; no adjustment is applied. Sale Nos. 1, 2 and 3 are newer construction. On the basis of age, a downward adjustment was applied.
CONSTRUCTION CHARACTERISTICS
The subject property is a medical office building. Sale Nos. 2, 3 and 4 are also medical office buildings and not adjustment is applicable. Both properties included in Sale No. 1 feature dedicated rehabilitation areas including swimming pools (aquatic therapy). The properties are considered superior, for which a downward adjustment was applied.
LAND-TO-BUILDING RATIO
Sale Nos. 1 and 2 have a lower land-to-building ratio compared to the subject; on this basis a downward adjustment was applicable.
BUILDING SIZE
The subject contains 3,145 gross square feet and is smaller than Sale No. 1. Typically, larger buildings sell for a lower unit price due to developmental economies of scale. An upward adjustment was applied to Sale No. 1. The remaining sales are similar in size; no adjustment was warranted.
A comparable land sales adjustment chart is included on the following page.
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The adjusted unit sale prices of the comparable market indicators range from $91.60 to $125.99 per square foot, with a mean of $104.84 per square foot. The median is $100.89 per square foot. Based on this analysis, a value of approximately $100.00 per square foot of land area is considered reasonable. The estimated value of the subject medical office building at 7955 South Suncoast Boulevard which contains 3,145 gross square feet is calculated as follows:
3,145 Square Feet @ $100 p.s.f. = $314,500 Say $310,000
Parcel No. 5 ‐ Citrus Memorial Healthcare Center at Sugarmill Woods ‐ 7955 S. Suncoast Parkway
Improved Sales Adjustment Grid
Subject PropertyImproved Sale
No. 1
Improved Sale
No. 2
Improved Sale
No. 3
Improved Sale
No. 4
Name
Address7945 S. Suncoast
Blvd.
6043 West
Nordling Loop
and 810 Medical
Court East
102 East Highland
Boulevard
203 South
Seminole
Avenue
2401 Forest Drive
City Sugarmill WoodsCrystal River and
InvernessInverness Inverness Inverness
State Florida Florida Florida Florida Florida
Sale Price per SF $130.85 $117.06 $113.64 $132.63
Propert Rights Conveyed 0% 0% 0% 0%
Adjusted Sale Price $130.85 $117.06 $113.64 $132.63
Financing Terms 0% 0% 0% 0%
Adjusted Sale Price $130.85 $117.06 $113.64 $132.63
Conditions of Sale 0% 0% 0% 0%
Adjusted Sale Price $130.85 $117.06 $113.64 $132.63
Market Conditions 0% 0% 0% 0%
Adjusted Sale Price $130.85 $117.06 $113.64 $132.63
Location and Physical Adjustments
Location ‐5% ‐5% ‐5% ‐5%
Age/Condition ‐5% ‐5% ‐5% 0%
Construction Quality 0% 0% 0% 0%
Construction Characteristics ‐25% 0% 0% 0%
Land‐to‐Building Ratio ‐5% ‐5% 0% 0%
Building Size 10% 0% 0% 0%
Parking 0% 0% 0% 0%
Net Adjustments ‐30% ‐15% ‐10% ‐5%
Adjusted Sale Price $91.60 $99.50 $102.27 $125.99
Adjusted Unit Indicators
Population Size Minimum Adjusted Unit Price: $91.60
Maximum Adjusted Unit Price: $125.99
Median Adjusted Unit Price: $100.89
Mean Adjusted Unit Price: $104.84
Concluded Unit Value:
Indicated Value: 100.00$
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SUMMARY
The estimate of value of the subject properties based on the Sales Comparison Approach is $4,210,000, as follows.
Location 7945 South Suncoast Boulevard $3,900,000 7955 South Suncoast Boulevard 310,000 Total $4,210,000
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Income Capitalization Approach
The Income Capitalization Approach is applied to analyze a property's capacity to generate benefits and converts these benefits into an indication of value. Application of this approach begins with the estimation of the potential gross income a property is capable of generating. Income levels may then be adjusted for vacancy and collection losses, resulting in the effective gross income. The applicable expenses of operating the property are then deducted from the effective gross income resulting in the net operating income estimate.
Market sales data are then typically analyzed to derive an appropriate overall capitalization rate. This rate is then applied to the subject property's net operating income to arrive at a valuation conclusion.
Income producing real estate is a capital good which is typically bought and sold primarily on the basis of the net income produced from the property. In all economic and investment analyses, of which real estate appraisal is an integral part, the value of a capital good is established and measured by calculating, as of a particular date, the present value of the anticipated future benefits (all sources of net revenue) to the owner over a specified period. Anticipated future income and/or reversions are discounted to a present worth figure through the capitalization process. The Income Capitalization Approach is widely applied in appraising income producing properties.
The subject property consists of two buildings: the medical office, diagnostics and rehabilitation center at 7945 South Suncoast Boulevard which contains 20,368 gross square feet; and the medical office building at 7955 South Suncoast Boulevard with 3,145 gross square feet. The analysis will be segregated between the two.
7945 SOUTH SUNCOAST BOULEVARD
Following is the analysis of the subject property at 7945 South Suncoast Boulevard which contains 20,368 gross square feet.
Rental Income
The cornerstone to the Income Capitalization Approach is the estimate of the market rental rate applicable to the subject. The market rental rate is defined as the most probable rental rate that the property would command if exposed on the open market for a time sufficient to attract a tenant with full knowledge of the options available in the marketplace.
A survey of comparable properties has been conducted to estimate the market rental rate applicable to the subject. The market rental rate is defined as the most probable rental rate that the property would command if exposed on the open market for a time
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sufficient to attract a tenant with full knowledge of the options available in the marketplace. After an inspection of the region, four rent comparables have been selected for analysis. These properties were selected due to their similar physical and economic characteristics and proximity to the subject property. These competing projects are summarized in the following chart.
Analysis of the competitive properties indicates an annual rental rate ranging from $10.00 to $13.50 per square foot of net rentable area. Rental Nos. 1 and 4 are most comparable given the quoted rate pertains to medical space. Rental Nos. 2 and 3 are for general retail/office use. The spaces available are for less than 2,000 square feet. The expense provisions for each of the properties is NNN, i.e., the tenant pays pro-rata share of expenses. Rent Nos. 1 and 4 are in proximity to the subject; Rent No. 1 is located just north of the subject and Rent No. 4 is approximately one-half-mile to the south. Rent Nos. 1 and 4 are in good condition; the subject property is considered superior. An upward adjustment is indicated. However, the spaces discussed are small in comparison to the subject property. A downward adjustment is warranted.
Parcel No. 5 ‐ Citrus Memorial Healthcare Center at Sugarmill Woods ‐ 7945 S. Suncoast Parkway
Improved Rental Summary
Subject PropertyImproved Rental
No. 1
Improved Rental
No. 2
Improved Rental
No. 3
Improved Rental
No. 4
NameCitrus Memorial
Healthcare
Sweetwater
Plaza
Unnamed
Shopping Center
Shoppes at
Sugarmill WoodsSugarmill Square
Address7945 S. Suncoast
Blvd.
7699 S. Suncoast
Blvd.
5709 S. Suncoast
Blvd.
9429 S. Suncoast
Blvd.
8361 S. Suncoast
Blvd.
City Sugarmill Woods Homosassa Homosassa Homosassa Homosassa
State Florida Florida Florida Florida Florida
Lease Date N/A N/A N/A N/A
Net Rentable Area 20,368 12,330 12,200 14,400 6,360
Land Acres 4.627 2.460 1.800 1.994 0.699
Land‐to‐Building Ratio 9.896 8.691 6.427 6.032 4.786
Parking Surface Surface Surface Surface Surface
Year Built 2009 2007 2007 2007 2002
Condition Good Good Average Good Average
Rent PSF N/A $ 13.50 $ 10.00 $ 12.00 $ 12.00
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In addition, the subject property is superior in terms of improvements. In addition to medical space, there are the diagnostics area (lead lined rooms for x-ray and related improvements) and rehabilitation/aquatic area (swimming pool and gym). The estimated difference, based on the cost approach, is approximately $80.00 per square foot. An investor seeking a return on the invested capital would amortize the cost over a five- to ten-year term. The cost, spread over a ten year lease, results in an increase to the rental rate of $8.00 per square foot.
Based on our analysis, the estimate of market rent for the subject property is $18.00 to $21.50 per square foot of rentable area, on a NNN basis. The lease term is five to ten years. For leases of similar terms, there is an annual CPI escalation included within the lease term.
Based on a mid-point of the rental range to be $19.75 per square foot, NNN, the Gross Revenue for the subject is $402,268.
Occupancy
The property is currently fully occupied. There are no third-party tenants.
Vacancy and Collection Loss
Vacancy and collection loss is a reduction of a property's potential gross income attributed to unrented space and late payment or nonpayment from existing tenants. Vacancy and collection projections, in the case of the subject property, are based on analyses of the expected space absorption and credit losses. The subject property is considered functional and has adequate visibility and access. Based on current market conditions, the stabilized vacancy and collection rate is estimated at 5%. The vacancy factor of 5% is reasonable given the current occupancy of the property and the occupancy of competing nearby medical properties.
Operating Expenses
Operating expenses are defined as "periodic expenditures necessary to maintain the real property and continue the production of effective gross income." The current expense provisions provide for a NNN lease, whereby the tenant is responsible for operating expenses. The landlord is responsible for structural maintenance and management fees, which are estimated at $0.05 per square foot and 3% of effective gross income, respectively.
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Direct Capitalization
Under direct capitalization, the rate used to convert income into value is known as an overall rate. There are several accepted techniques of estimating an overall rate. Derivation of an overall rate from comparable sales is preferred when sufficient market data is available. Factors affecting the capitalization rates of commercial buildings include, but are not limited to, the credit worthiness of the tenants, the age/condition of the project, and the date of sale. The subject commercial building is considered to be in good condition and is considered to be a good quality project.
Based on discussions with market participants, capitalization rates range from 6.5% to 10.0% depending on the quality of the property and the stability and financial stability of the tenant.
As support for a final capitalization rate estimate, Realtyrate.com indicates an overall range of 6.18% to 13.46% with an average of 9.23%.
Positives influencing the marketability of the subject include overall condition and quality of the underlying asset. Negatives include the overall uncertainty of the impact of
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healthcare reform coupled with a location in a small community. Additionally, the 2012 Newmark Grubb Knight Frank Healthcare Real Estate Survey was considered. The table below summarizes the findings. It is noted that 52% of the responses indicated that rehab hospital capitalization rates range from 8.0% to 9.5%.
Overall, a capitalization rate of 9.5% is considered reasonable. Direct capitalization of the subject's net operating income estimate of results in a value of $3,794,800, or $3,800,000, rounded as presented below.
Gross Building Area 20,368
Market Rent $19.75
Potential Gross Income 402,268$ Less Vacancy 5% 20,113
Effective Gross Income 382,155$
Less Management 3% 11,465$
Total Operating Expenses 11,465$
Less Structural Reserves 0.50$ 10,184
Net Operating Income 360,506$
Indicated Cap. Rate 9.50%
Indicated Value 3,794,800$
Less PV of Capital Expenditures -
Final Indicated Value 3,794,800
Rounded 3,800,000$
Citrus Memorial Healthcare Center at Sugarmill Woods
Direct Capitalization
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7955 SOUTH SUNCOAST BOULEVARD
With regard to the second building, following is a summary of the subject property at 7955 South Suncoast Boulevard with 3,145 gross square feet and the comparable sales. The comparables and the subject are summarized below.
Based on our analysis, the estimate of market rent for the subject property is $9.50 to $11.50 per square foot of rentable area, on a NNN basis. The lease term is three to five years. There is no annual escalation included within the lease term.
Based on a mid-point of the rental range to be $10.50 per square foot, NNN, the Gross Revenue for the subject is $33,023.
Occupancy
The property is currently leased to doctors who use the facility reportedly once a week. The property is leased to Life South Community Blood Centers who pays $588 per month on a month-to-month lease.
Parcel No. 5 ‐ Citrus Memorial Healthcare Center at Sugarmill Woods ‐ 7945 S. Suncoast Parkway
Improved Rental Summary
Subject PropertyImproved Rental
No. 1
Improved Rental
No. 2
Improved Rental
No. 3
Improved Rental
No. 4
NameCitrus Memorial
Healthcare
Sweetwater
Plaza
Unnamed
Shopping Center
Shoppes at
Sugarmill WoodsSugarmill Square
Address7945 S. Suncoast
Blvd.
7699 S. Suncoast
Blvd.
5709 S. Suncoast
Blvd.
9429 S. Suncoast
Blvd.
8361 S. Suncoast
Blvd.
City Sugarmill Woods Homosassa Homosassa Homosassa Homosassa
State Florida Florida Florida Florida Florida
Lease Date N/A N/A N/A N/A
Net Rentable Area 20,368 12,330 12,200 14,400 6,360
Land Acres 4.627 2.460 1.800 1.994 0.699
Land‐to‐Building Ratio 9.896 8.691 6.427 6.032 4.786
Parking Surface Surface Surface Surface Surface
Year Built 2009 2007 2007 2007 2002
Condition Good Good Average Good Average
Rent PSF N/A $ 13.50 $ 10.00 $ 12.00 $ 12.00
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Vacancy and Collection Loss
Vacancy and collection loss is a reduction of a property's potential gross income attributed to unrented space and late payment or nonpayment from existing tenants. Vacancy and collection projections, in the case of the subject property, are based on analyses of the expected space absorption and credit losses. The subject property is considered functional and has adequate visibility and access. Based on current market conditions, the stabilized vacancy and collection rate is estimated at 5%. The vacancy factor of 5% is reasonable given the current occupancy of the property and the occupancy of competing nearby medical properties.
Operating Expenses
Operating expenses are defined as "periodic expenditures necessary to maintain the real property and continue the production of effective gross income." The current expense provisions provide for a NNN lease. The current expense provisions provide for a NNN lease, whereby the tenant is responsible for operating expenses. The landlord is responsible for structural maintenance and management fees, which are estimated at $0.05 per square foot and 3% of effective gross income, respectively.
Direct Capitalization
Under direct capitalization, the rate used to convert income into value is known as an overall rate. There are several accepted techniques of estimating an overall rate. Derivation of an overall rate from comparable sales is preferred when sufficient market data is available. Factors affecting the capitalization rates of commercial buildings include, but are not limited to, the credit worthiness of the tenants, the age/condition of the project, and the date of sale. The subject commercial building is considered to be in good condition and is considered to be a good quality project.
Based on discussions with market participants, capitalization rates range from 6.5% to 10.0% depending on the quality of the property and the stability and financial stability of the tenant.
As support for a final capitalization rate estimate, Realtyrate.com indicates an overall range of 6.18% to 13.46% with an average of 9.23%.
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Positives influencing the marketability of the subject include overall condition and quality of the underlying asset. Negatives include the overall uncertainty of the impact of healthcare reform and its location within a small community. Overall, a capitalization rate of 8.50% is considered reasonable. Direct capitalization of the subject's net operating income estimate of results in a value of $339,503, or $340,000, rounded as presented on the following page
.
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SUMMARY
The estimate of value of the subject properties based on the Income Comparison Approach is $4,140,000, as follows.
Location 7945 South Suncoast Boulevard $3,800,000 7955 South Suncoast Boulevard 340,000 Total $4,140,000
Based on our analysis, the estimate of market rent for the subject property is as follows.
Location 7945 South Suncoast Boulevard $18.00 to $21.50 7955 South Suncoast Boulevard $9.50 to $11.50 Weighted Average $17.00 to $20.00
The range of the Fair Market Rent, including both buildings, is $17.00 to $20.00 per square foot of gross building area, on a NNN basis, without concessions, on an “as is” basis. The lease term is a minimum of five years. The annual rental rate does not include an annual CPI increase.
Gross Building Area 3,145
Market Rent $10.50
Potential Gross Income 33,023$ Less Vacancy 5% 1,651
Effective Gross Income 31,371$
Less Management 3% 941$
Total Operating Expenses 941$
Less Structural Reserves 0.50$ 1,573
Net Operating Income 28,858$
Indicated Cap. Rate 8.50%
Indicated Value 339,503$
Less PV of Capital Expenditures -
Final Indicated Value 339,503
Rounded 340,000$
Citrus Memorial Healthcare Center at Sugarmill Woods7955 South Suncoast Boulevard
Direct Capitalization
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VALUE RECONCILIATION
Application of the appraisal methods resulted in the following indications of the Fair Market Value of the Fee Simple Estate in the subject property, as of February 6, 2013:
Cost Approach $5,100,000
Sales Comparison Approach $4,210,000
Income Capitalization Approach $4,140,000
The Cost Approach is most appropriate when the improvements are new or nearly new and represent the Highest and Best Use of the land or when the facilities are of a special-purpose or specialized-use nature. The primary building, 7945 South Suncoast Boulevard, was recently constructed and related construction costs were included as part of this analysis. However, the recent economic recession coupled with the subject property’s location in a small community, suggests that the subject property suffers from some degree of external obsolescence. No specific deduction was made, but the Cost Approach conclusion was determined to be above the Fair Market Value of the subject property.
The Sales Comparison Approach was given emphasis due to the quality and quantity of the comparable sale data that could be obtained. The Income Capitalization Approach supported the Sales Comparison Approach.
Based upon the inspection of the property and the investigation and analysis of data obtained, we have formed the opinion that the Fair Market Value of the Fee Simple Estate in the subject property, and subject to the definitions, certifications, and limiting conditions set forth in the attached Summary Appraisal Report, as of February 6, 2013, is:
FOUR MILLION TWO HUNDRED THOUSAND DOLLARS ($4,200,000)
The estimated marketing period associated with this value estimate is twelve months, while the estimated exposure period is also twelve months. Our report and analysis are subject to the attached statement of Assumptions and Limiting Conditions.
RANGE OF FAIR MARKET RENT
Based on our research and analysis contained in this report, it is our opinion that the reasonable range of the Fair Market Rent for the subject property on a NNN basis is between $17.00 to $20.00 per square foot of net rentable area per year, without
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concessions, on an “as is” basis. The lease term is a minimum of five years. Within the NNN lease structure, the tenant is responsible for all operating expenses. The annual rental rate does not include an annual CPI increase.
Our report and analysis are subject to the attached statement of Assumptions and Limiting Conditions.
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MARKETING AND REASONABLE EXPOSURE TIME ANALYSIS MARKETING TIME
The Financial Institutions Reform, Recovery and Enforcement Act of 1989 (“FIRREA”) requires the derivation of marketing time. Similarly, the Uniform Standards of Professional Appraisal Practice (“USPAP”) address reasonable marketing time, which is defined as follows:
The reasonable marketing time is an estimate of the amount of time it might take to sell a property interest in real estate at the estimated market value level during the period immediately after the effective date of an appraisal. (Advisor Opinion AO-7, USPAP, Adopted September 16, 1992)
The key factor in marketing time is that it is presumed to occur after the effective valuation date.
REASONABLE EXPOSURE TIME
USPAP requires the derivation of reasonable exposure time, defined as follows:
The estimated length of time the property interest being appraised would have been offered on the market prior to the hypothetical consummation of a sale at market value on the effective date of the appraisal’ a retrospective estimate based upon an analysis of past events assuming a competitive and open market. (Statement on Appraisal Standards No. 6, USPAP, Approved for general distribution September 16, 1992)
The key factor in exposure time is that it is presumed to occur before the effective valuation date.
MARKETING & REASONABLE EXPOSURE TIME ANALYSIS
Analysis of typical marketing or exposure cycles for similar commercial properties indicates final consummation of sales generally within a one-year period. Overall, we have determined that a reasonable marketing period and an exposure period for a property similar to the subject would be approximately twelve months.
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ASSUMPTIONS & LIMITING CONDITIONS This valuation by Value Management Group, LLC d/b/a VMG Health (“VMG”) is subject to and governed by the following Assumptions and Limiting Conditions:
1. Any legal description reported herein is assumed to be accurate. Any sketches, surveys, plats, photographs, drawings or other exhibits are included only to assist the intended user to better understand and visualize the subject property and assume no responsibility in connection with such matters.
2. The appraiser(s) has not conducted any engineering or architectural surveys in connection with this appraisal assignment. Information reported pertaining to dimensions, sizes, and areas is either based on measurements taken by the appraiser(s) or the staff or was obtained or taken from referenced sources and is considered reliable. No responsibility is assumed for the costs or preparation or for arranging geotechnical engineering, architectural, or other types of studies, surveys, or inspections that require the expertise of a qualified professional.
3. No responsibility is assumed for matters legal in nature. Title is assumed to be good and marketable and in fee simple unless discussed otherwise in the report. The property is considered to be free and clear of existing liens, easements, restrictions, and encumbrances, except as noted.
4. Unless otherwise noted herein, it is assumed there are no encroachments or violations of any zoning or other regulations affecting the subject property and the utilization of the land and improvements is within the boundaries or property lines of the property described.
5. VMG Health assumes there are no private deed restrictions affecting the property which would limit the use of the subject property in any way.
6. It is assumed the subject property is not adversely affected by the potential of floods. 7. It is assumed all water and sewer facilities (existing and proposed) are or will be in good
working order and are or will be of sufficient size to adequately serve any proposed buildings.
8. Unless otherwise noted within the report, the depiction of the physical condition of the improvements described herein is based on as on-site visual observation. No liability is assumed for the soundness of structural members since no engineering tests were conducted. No liability is assumed for the condition of mechanical equipment, plumbing or electrical components, as complete tests were not made. No responsibility is assumed for hidden, unapparent or masked property conditions or characteristics that were not clearly apparent during our on-site observation.
9. If building improvements are present on the site, no significant evidence of termite damage or infestation was observed during our on-site visual observation, unless so noted on the report. No termite inspection report was available, unless so noted in the report. No responsibility is assumed for hidden damages or infestation.
10. Any proposed or incomplete improvements included in this report are assumed to be satisfactory completed in a workmanlike manner or will be thus completed within a reasonable length of time according to plans and specifications.
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11. No responsibility is assumed for hidden defects or for conformity to specific governmental requirements, such as fire, building, safety, earthquake, or occupancy codes, except where specific professional or governmental inspections have been completed and reported in the appraisal report.
12. The property is assumed to be under financially sound, competent and aggressive ownership.
13. The appraiser(s) assume no responsibility for any changes in economic or physical conditions which occur following the effective date of this report that would influence or potentially affect the analyses, opinions, or conclusions in the report. Any subsequent changes are beyond the scope of the report.
14. The value estimates reported herein apply to the entire property. Any proration or division of the total into fractional interests will invalidate the value estimates, unless such a proration or division of interests is set forth in the report.
15. Any division of the land and improvement values estimated herein is applicable only under the program of utilization shown. These separate valuations are invalidated by any other application.
16. Unless otherwise noted in the report, only the real property is considered, so no consideration is given to the value of personal property or equipment located on the premises or the costs or moving or relocating such personal property or equipment.
17. Unless otherwise stated, it is assumed ownership includes subsurface oil, gas, and other mineral rights. No opinion is expressed as to whether the property is subject to surface entry for their exploration or removal. The contributing value, if any, of these rights has not been separately identified.
18. Any projections of income and expenses, including the reversion at time of resale, are not predictions of the future. Rather, they are our best estimate of current market thinking of what future trends will be. No warranty or representation is made that these projections will materialize. The real estate market is constantly fluctuating and changing. It is not the task of an appraiser(s) to estimate the conditions of a future real estate market, but rather to reflect what the investment community envisions for the future in terms of expectations of growth in rental rates, expenses, and supply and demand.
19. Unless subsoil opinions based upon engineering core borings were furnished, it is assumed there are no subsoil defects present, which would impair development of the land to its maximum permitted use or would render it more or less valuable. No responsibility is assumed for such conditions or for engineering which may be required to discover them.
20. VMG Health representatives are not experts in determining the presence or absence of hazardous substances, defined as all hazardous or toxic materials, wastes, pollutants or contaminants (including, but not limited to, asbestos, PCB, UFFI, or other raw materials or chemicals) used in construction or otherwise present on the property. We assume no responsibility for the studies or analyses which would be required to determine the presence or absence of such substances or for loss as a result of the presence of such substances. Appraiser(s) are not qualified to detect such substances. The client is urged to retain an expert in this field.
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21. VMG Health is not experts in determining the habitat for protected or endangered species that may be present on the property. We assume no responsibility for the studies or analyses which would be required to determine the presence or absence of such species or for loss as a result of the presence of such species.
22. No environmental impact studies were either requested or made in conjunction with this analysis. The appraiser hereby reserves the right to alter, amend, revise, or rescind any of the value opinions based upon any subsequent environmental impact studies, research and investigation.
23. The appraisal is based on the premise that there is full compliance with all applicable federal, state, and local environmental regulations and laws unless otherwise stated in the report; further that all applicable zoning building, and use regulations and restrictions of all types have been complied with unless otherwise stated in the report; further, it is assumed that all required licenses, consents, permits, or other legislative or administrative authority, local, state federal and/ or private entity or organization have been or can be obtained or renewed for any use considered in the value estimate.
24. Neither all nor any part of the contents of this report or copy thereof shall be conveyed to the public through advertising, public relations, news, sales, or any other media, without the prior written consent and approval of the appraisers. This limitation pertains to any valuation conclusions, the identity of the analyst or the firm and any reference to the professional organization of which the appraiser is affiliated or to the designations thereof.
25. Although the appraiser(s) has made, insofar as is practical, every effort to verify as factual and true information and data set forth in this report, no responsibility is assumed for the accuracy of any information furnished the appraiser either by the client or others. If for any reason, future investigations should prove any data to be in substantial variance with that presented in this report, the appraiser(s) reserves the right to alter or change any or all analyses, opinions, or conclusions and/or estimates of value.
26. If this report has been prepared in a so-called “public non-disclosure” state, real estate sales prices and other data, such as rents, prices, and financing, are not a matter of public record. If this is such a “non-disclosure” state, although extensive effort has been expended to verify pertinent data with buyers, sellers, brokers, lenders, lessors, lessees and other sources considered reliable, it has not always been possible to independently verify all significant facts. In these instances, the appraiser(s) may have relied on verification obtained and reported and on interviews with market participants. It is suggested the client consider independent verification as a prerequisite to any transaction involving sale, lease, or other significant commitment of funds to the subject property.
27. This report is null and void if used in any connection with a real estate syndicate or syndication, defined as a general or limited partnership, joint venture, unincorporated association, or similar organization formed for or engaged in investment or gain from an interest in real property, including but not limited to a sale, exchange, trade, development, or lease or property on behalf of others or which is required to be registered with the U.S. Securities and Exchange Commission or any Federal or State Agency which regulates investments made as a public offering.
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28. The American Disabilities Act of 1990 (ADA) sets strict and specific standards for handicapped access to and within most commercial and industrial buildings. Determination of compliance with these standards is beyond appraisal expertise and, therefore, has not been attempted by the appraisers. For purposes of this appraisal, we are assuming the building is in compliance; however, we recommend an architectural inspection of the building to determine compliance or requirements for compliance. We assume no responsibility for the cost of such determination and our appraisal is subject to revision if the building is not in compliance.
29. This appraisal report has been prepared for the exclusive benefit of the client. 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 their own risk.
30. The client agrees to indemnify and hold harmless VMG Health and its affiliates, partners, agents, and employees from and against any losses, claims, damages, or liabilities, which may be asserted by any person or entity who may receive our report, except to the extent of any losses, claims, damages or liabilities (or actions in respect thereof) arising be reason of the gross negligence or willful misconduct of VMG Health in preparing the report and will reimburse VMG Health for all expenses (including counsel fees) as they are incurred by VMG Health in connection with investigating, preparing, or defending any such action or claim.
31. In any circumstance in which the foregoing indemnification is held by a court to be unavailable to VMG Health, the client and VMG Health shall contribute to any aggregate losses, claims, damages or liabilities (including the related fees and expenses) to which the client and VMG Health may be subject in such proportion that VMG Health shall be responsible only for that proportion represented by the percentage that the fees paid to VMG Health for the portion of its services or work product giving rise to the liability bears to the value of the transaction giving rise to such liability.
32. VMG Health has completed an on-site visual observation of the subject property which consisted of less than inspecting 100% of the interior and exterior of the improvements. Accordingly, VMG Health, reserves the right to amend the appraised value and appraisal conclusions if engineering reports or other evidence is found, which would materially impact the report conclusions.
33. The right is reserved by the appraiser to make adjustments to the analysis, opinions, and conclusions set forth in this report as may be required by consideration of additional or more reliable data that may become available. No change of this report shall be made by anyone other than the appraiser or appraisers. The appraiser(s) shall have no responsibility for any unauthorized change(s) to the report.
34. If the client instructions to the appraiser(s) were to inspect only the exterior of the improvements in the appraisal process, the physical attributes of the property were from the street(s) as of the observation date of the appraisal. Physical characteristics of the property were obtained from tax assessment records, available plans, if any, descriptive information, and interviewing the client and other knowledgeable persons. It is assumed the interior of the subject property is consistent with the exterior conditions as observed and that other information relied upon is accurate.
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35. The submission of this report constitutes completion of the services authorized. It is submitted on the condition the client will provide reasonable notice and customary compensation, including expert witness fess, relating to any subsequent required attendance at conferences, depositions, and judicial or administrative proceedings. In the event the appraiser is subpoenaed for either and appearance or a request to produce documents, a best effort will be made to notify the client immediately. The client has the sole responsibility for obtaining protective order, providing legal instruction not to appear with the appraisal report and related work files and will answer all questions pertaining to the assignment, the preparation for the report, and the reasoning used to formulate the estimate of value. Unless paid in whole or in part by the party issuing the subpoena or by another party of interest in the matter, the client is responsible for all unpaid fees resulting from the appearance of production of documents regardless of who orders the work.
36. Acceptance or use of this report constitutes agreement by the client and any other users that any liability for errors, omissions or judgment of the appraiser(s) is limited to the amount of the fee charged for the appraisal.
37. Use of this appraisal constitutes acknowledgement and acceptance of the general assumptions and limited conditions, special assumptions (if any), extraordinary assumptions (if any), and hypothetical conditions (if any) on which this estimate of market value is based.
38. If provided, the estimated insurable value is included at the request of the client and has not been performed by a qualified insurance agent or risk management underwriter. This cost estimate should not be solely relied upon for insurable value purposes. The appraiser(s) are not familiar with the definition of insurable value from the insurance provider, the local government underwriting regulations, or the types of insurance coverage available. These factors can impact cost estimates and are beyond the scope of the intended use of this appraisal. The appraiser(s) are not cost experts in cost estimating for insurance purposes.
39. Extraordinary Assumptions – Within this specific assignment, the Citrus County Property Appraiser provided a gross building area of 23,513 square feet for the subject premises. Should the actual gross building area differ from the provided area, the appraiser(s) reserve the right to amend the contents of this Summary Appraisal Report, including the conclusion.
40. Hypothetical Condition –The subject property is subject to the Lease Agreement between Citrus County Hospital Board and Citrus Memorial Health Foundation, Inc. According to the Fourth Amendment to Lease Agreement, the commencement date is March 1, 1990 and the expiration date is June 15, 2033, with an option to renew for an additional forty-five (45) year term. For purpose of this analysis, the lease is not
regarded; the property rights appraised are those of the Fee Simple Estate.
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ADDENDA
SUBJECT PHOTOGRAPHS .................................................................................................. A
LEGAL DESCRIPTION…………………………………………………………………………….B
APPRAISER’S CERTIFICATION .......................................................................................... C
APPRAISER’S QUALIFICATIONS ........................................................................................ D
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SUBJECT PROPERTY PHOTOGRAPHS
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View of the Western Elevation of the Subject Property looking to the Southeast
View of the Northern Elevation of the Subject Property looking to the Southwest
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Looking to the Northwest at the Southern Elevation of the Subject Property
Looking to the Southwest at the Eastern Elevation of the Subject Property
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View of Lab Interior Corridor
View of the Bone Density Exam Room
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View of Pool
Looking to the South at the Heat Center/Specialty Center Building
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Looking to the South along South Suncoast Boulevadrd
Looking to the North along South Suncoast Boulevard
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LEGAL DESCRIPTION
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APPRAISER’S CERTIFICATION
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CERTIFICATE OF THE APPRAISER
It is hereby stated that, to the best of my knowledge and belief:
The statements of fact contained in this report are true and correct.
The reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions and are my personal, impartial, and unbiased professional analyses, opinions, and conclusions.
I have no present or prospective interest in the property that is the subject of this report, and no personal interest with respect to the parties involved.
I have no bias with respect to the property that is the subject of this report or to the parties involved with this assignment.
My engagement in this assignment was not contingent upon developing or reporting predetermined results.
My compensation for completing this assignment is not contingent upon the development or reporting of a predetermined value or direction in value that favors the cause of the client, the amount of the value opinion, the attainment of a stipulated result, or the occurrence of a subsequent event directly related to the intended use of this appraisal.
My analyses, opinions, 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 and the Uniform Standards of Professional Appraisal Practice.
My analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the Uniform Standards of Professional Appraisal Practice.
I have made a personal inspection of the property that is the subject of this report.
Charles B. Nolen, MAI has not provided any services regarding the subject property within the three years prior to this assignment and has no current or prospective interest in the subject property or parties involved.
No one provided significant professional assistance to the person signing this report.
The appraisal assignment was not based on a requested minimum valuation, a specific valuation, or the approval of a loan.
The use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representatives.
As of the date of this report, I, Charles B. Nolen, MAI, have completed the requirements of the education program of the Appraisal Institute.
Charles B. Nolen, MAI
Florida Certified General Real Estate Appraiser RZ3509
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APPRAISER’S QUALIFICATIONS
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Charles B. Nolen | MAI [email protected]
VALUATION EXPERIENCE Mr. Nolen has experience in the valuation of commercial, industrial, and investment grade properties to estimate Market Value for financing and investment decisions. Typical properties appraised have included vacant land, residential subdivisions, shopping centers, regional shopping malls, hotels, office buildings, light and heavy manufacturing, warehousing, and special purpose properties, including market centers and resorts. Mr.Nolen also has experience in the valuation of medically-related facilities, including hospitals. Since 1984, Mr. Nolen has specialized in the appraisal of investment grade income real estate, as well as having worked with dispositions, asset management and acquisitions. PROFESSIONAL AFFILIATIONS/ASSOCIATION MEMBERSHIPS MAI Designation, Appraisal Institute Certified Public Accountant – Texas State Certified General Real Estate Appraiser - Texas, Florida EDUCATION Texas Tech University, Lubbock, Texas, Bachelor of Business Administration, Accounting & General Engineering APPRAISAL AND SPECIAL COURSES American Institute of Real Estate Appraisers/Appraisal Institute Real Estate Principles Basic Valuation Procedures Capitalization Theory and Techniques, Parts IA and IB Valuation Analysis and Report Writing Standards of Professional Practice Online Analyzing Operating Expenses Introduction to Valuing Commercial Green Building Real Estate Industry Perspectives on Lease Accounting Forecasting Revenue Small Hotel/Motel Valuation Subdivision Valuation Appraisal of Nursing Facilities
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