An Appraisal Report for the Valuation of a Multifamily Residential Development Owned by State of ...

156 Pages·2017·6.29 MB·English

An Appraisal Report for the Valuation of
a Multifamily Residential Development

Owned by
State of Arizona

Location of Property to be Appraised:
Southeast of 59th Avenue and Roosevelt Street
777 N. 59th Avenue
Phoenix, Arizona 85043

Report Dated: Effective Date:
March 13, 2017 February 1, 2017
Prepared for:
Arizona Department of Transportation
Right of Way Operations Section
205 S. Seventeenth Avenue
Room 331, Mail Drop #612E
Phoenix, Arizona 85007
Reference:

Highway: South Mountain Freeway
Section: Salt River – Junction I-10 Papago
Parcel: L-C-018B
TYPE OF APPRAISAL: Appraisal Report
Parcel Number: L-C-018B
Owner: State of Arizona
Property Location: Southeast corner of 59th Avenue and Roosevelt Street
777 N. 59th Avenue
Phoenix, Arizona 85043
Project Number: 202L MA 000 H5439
Highway: South Mountain Freeway
Section: Salt River – Jct. I-10 Papago
Date of Report: March 13, 2017
Date of Value: February 1, 2017
Appraiser:
March 13, 2017
Mr. Jim Walcutt
Review Appraiser
Arizona Department of Transportation
Right of Way Operations Section
205 S. Seventeenth Avenue
Room 331, Mail Drop #612E
Phoenix, Arizona 85007
RE: PROJECT: 202L MA 000 H5439
HIGHWAY: South Mountain Freeway
SECTION: Salt River – Jct. I-10 Papago
PARCEL: L-C-018B
Dear Mr. Walcutt:
In accordance with your request and authorization, I have prepared an
appraisal of the property referenced above. I am pleased to present the narrative
Appraisal Report transmitted by this letter, containing pertinent data related to the
valuation of the property appraised.

The subject property is the former Southwest Village apartment community,
comprised of a 280-unit multifamily residential development built on a 13.145-acre
tract of land. A physical inspection of the property was made on November 29,
2016, with representatives of the property owner present, and several other
occasions unaccompanied.

The purpose of this appraisal is to estimate the market value of the property
identified herein. The intended use of this appraisal is to assist in the possible sale
or disposition of the property. The effective date for this appraisal assignment is
February 1, 2017.

This appraisal report has been written in accordance with the Uniform
Standards of Professional Appraisal Practice (USPAP) adopted by the Appraisal
Standards Board of the Appraisal Foundation, the Code of Ethics of the American
Society of Appraisers, the Code of Professional Ethics and Standards of
Professional Appraisal Practice of the Appraisal Institute, the Federal Highway
Administration (FHWA) Uniform Act, 49 CFR Part 24, and the guidelines and
standards of the Arizona Department of Transportation.
i
Mr. Jim Walcutt
Arizona Department of Transportation
March 13, 2017

The opinion of market value as defined and expressed herein is subject to
the Underlying Assumptions and Limiting Conditions set forth in this report, as
well as the appraiser’s certification. There have been no hypothetical conditions
made for this appraisal assignment, although several extraordinary assumptions
have been made which are discussed on page 6 of the appraisal report. The use of
these extraordinary assumptions might have affected the assignment results.

As a result of my investigation and study, I am of the opinion that the market
value of the fee simple estate of the appraised property, as-is, as of February 1,
2017, is:

EIGHT MILLION
SEVEN HUNDRED TEN THOUSAND DOLLARS
$8,710,000.00

Thank you for the opportunity to be of service to you. If you have any
questions or if we may be of any further assistance in this matter, please do not
hesitate to call or write this office.

ii
Table of Contents
Letter of Transmittal ....................................................................................................................................................... i
Table of Contents..........................................................................................................................................................iii
Summary of Salient Facts and Conclusions .................................................................................................................. v
Aerial Photograph ......................................................................................................................................................... vi
Regional Map .............................................................................................................................................................. vii
INTRODUCTION ....................................................................................................................................................... 1
PURPOSE AND SCOPE OF THE APPRAISAL ......................................................................................................... 2
Purpose ..................................................................................................................................................................... 2
Scope of Work .......................................................................................................................................................... 4
Limiting Conditions .................................................................................................................................................. 6
FACTUAL DATA........................................................................................................................................................ 7
IDENTIFICATION OF THE REAL ESTATE ............................................................................................................. 8
OWNERSHIP AND OCCUPANCY ............................................................................................................................. 9
Ostensible Owner ...................................................................................................................................................... 9
Occupancy ................................................................................................................................................................ 9
REGIONAL ANALYSIS ............................................................................................................................................ 10
Location and Climate .............................................................................................................................................. 10
Population ............................................................................................................................................................... 11
Economic Trends .................................................................................................................................................... 13
Real Estate Market Sectors ..................................................................................................................................... 18
NEIGHBORHOOD ANALYSIS ................................................................................................................................ 20
Location .................................................................................................................................................................. 20
Transportation ......................................................................................................................................................... 21
Land Use Patterns ................................................................................................................................................... 22
Amenities ................................................................................................................................................................ 22
Trends ..................................................................................................................................................................... 23
REAL PROPERTY DESCRIPTION........................................................................................................................... 24
Site Plan .................................................................................................................................................................. 24
Site Data.................................................................................................................................................................. 25
Improvement Data .................................................................................................................................................. 27
Zoning ..................................................................................................................................................................... 30
Easements and Restrictions..................................................................................................................................... 31
Taxes and Assessments ........................................................................................................................................... 32
Division of Real and Personal Property .................................................................................................................. 33
VALUATION ANALYSIS ........................................................................................................................................ 34
HIGHEST AND BEST USE ....................................................................................................................................... 35
As If Vacant ............................................................................................................................................................ 35
As Improved ........................................................................................................................................................... 37
Summary and Conclusion ....................................................................................................................................... 40
VALUATION METHODOLOGY .............................................................................................................................. 41
SALES COMPARISON APPROACH ........................................................................................................................ 43
Introduction ............................................................................................................................................................. 43
Land Value Analysis ............................................................................................................................................... 44
Conclusion of Land Value ...................................................................................................................................... 50
Improved Sales Analysis......................................................................................................................................... 52
Indicated Value – As Stabilized .............................................................................................................................. 59
Indicated Value – As Is ........................................................................................................................................... 61

iii
Table of Contents
INCOME CAPITALIZATION APPROACH ............................................................................................................. 62
Introduction ............................................................................................................................................................. 62
Direct Capitalization ............................................................................................................................................... 62
Indicated Value – As Stabilized .............................................................................................................................. 72
Indicated Value – As Is ........................................................................................................................................... 72
COST APPROACH ..................................................................................................................................................... 73
Introduction ............................................................................................................................................................. 73
Cost of Improvements Analysis .............................................................................................................................. 73
Indicated Value – As Stabilized .............................................................................................................................. 75
Indicated Value – As Is ........................................................................................................................................... 76
RECONCILIATION OF VALUE ............................................................................................................................... 77
CERTIFICATION ....................................................................................................................................................... 79

ADDENDA
A Underlying Assumptions and Limiting Conditions
B Subject Photographs
C Maps
 Neighborhood Map
 Assessor’s Parcel Map
 Zoning Map
 Flood Map
D Exhibits
 Meyer Development Feasibility Study
 Vesting Deed
 Area Calculations
 Cost Approach Calculations
E City of Phoenix Zoning Ordinance
 Section 618: R-5 Multifamily Residence District
F Comparable Land Sales Data
G Comparable Improved Sales Data
H Comparable Lease Data
I Qualifications and Resume of the Appraiser

iv
Summary of Salient Facts and Conclusions

Client Arizona Department of Transportation
Client Reference Highway: South Mountain Freeway
Section: Salt River – Jct. I-10 Papago
Parcel: L-C-018B
Date of Report March 13, 2017 Limiting Conditions See Addendum A
Report Format Appraisal Report Certification See Page 79
Intended Use Assist in the possible sale or disposition of the subject property
Intended User(s) Arizona Department of Transportation and Federal Highway Administration
Property Information
Ostensible Owner State of Arizona
Location of Property South of the southeast corner of 59th Avenue and Roosevelt Street
Street Address 777 N. 59th Avenue County Maricopa
Phoenix, Arizona 85043
Section/Township-Range 5/1N-2E Map Reference 147-158LU
Assessor Parcel Number(s) 103-28-003J; 103-28-003K
Site Area 572,594 square feet Zoning District(s) R-5
13.145 acres City of Phoenix
Flood Zone Zone X
Present Use Multifamily Residential
Building Area 170,235 square feet
Year Built 1986
Highest and Best Use:
As If Vacant: Land Investment
As Improved: Multifamily Residential
Valuation Information
Effective Date February 1, 2017
Extraordinary Assumptions See page 6 The use of the hypothetical conditions and extraordinary assumptions
Hypothetical Conditions None stated in this report might have affected the assignment results.
Valuation Summary Sales Comparison Approach ..................................................... $14,560,000.00
Income Approach ...................................................................... $16,130,000.00
Cost Approach ........................................................................... $14,530,000.00
Fee Simple Interest Conclusion of Value, Stabilized $15,500,000.00
Conclusion of Value, As-Is $8,710,000.00
v
Aerial Photograph

SU B JEC T
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© Google

vi
Regional Map

T
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E
J
B
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© Arizona State Land Department Parcel Viewer

vii
I
NTRODUCTION

1