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Agenda 10/11/2016 Item #11A 11.A 10/11/2016 EXECUTIVE SUMMARY Recommendation to consider the counter-offer and purchase of the office building owned by Courthouse Shadows Consolidated Holding Inc.,located at 3375 Tamiami Trail East. OBJECTIVE: To provide relevant information regarding the state-certified independent appraisal obtained,the offer made,the counter-offer received, and for the Board to determine if the counter-offer is acceptable. CONSIDERATIONS: On September 13, 2016, the Board authorized the County Manager to make an offer on the office building located at 3375 Tamiami Trail East (Building), to bring back the appraisal results,and to provide the total cost of the acquisition. The asking price is $1,495,000. The County obtained one independent real estate appraisal from state- certified real estate appraiser T.A. Tippett, Inc. The value determined by utilizing the sales approach is $1,210,000; a copy of the appraisal is attached for reference. Staff made an offer at appraised value, but the offer was rejected. A counter-offer in the amount of $1,395,000 was provided by the seller's representative. FISCAL IMPACT: The acquisition cost should not exceed $1,395,000 plus approximately $12,600 in incidental expenses for title commitments, title policy, recording fees, other closing costs and an inspection of the property. Revenue from the existing lease commitments through 2019 are expected to total $169,186.50. One tenant has the option to renew extending the lease through 2023. Budget amendments will be necessary from the General Fund reserves to fund acquisition of the property. Any renovation costs will be determined in conjunction with the planned facility master plan and budgeted in the appropriate fiscal year. GROWTH IMPACT: This acquisition would meet current Growth Management Plan standards to ensure the adequacy and availability of viable public facilities. LEGAL CONSIDERATION: This item has been reviewed by the County Attorney, is approved as to form and legality, and since the counter-offer is in excess of the appraisal, requires an "extraordinary" vote(at least one more than simple majority)per Florida Statute 125.355 (1)(b) -JAK RECOMMENDATION: That the Board of County Commissioners: (1) Determines whether the counter-offer should be rejected or accepted; and if accepted; (2) Approves and accepts a standard form Agreement for Sale and Purchase and Warranty Deed once they have been received and approved by the County Attorney's Office; (3) Authorizes the Chairman to execute the Agreement for Sale and Purchase and any and all other County Attorney's Office approved documents related to this transaction; (4) Directs the County Manager or his designee to proceed to acquire this parcel, to follow all appropriate closing procedures, to record the deed and any and all necessary documents to obtain clear title to this parcel, and to take all reasonable steps necessary to ensure performance under the Agreement; and (5) Authorizes the necessary budget amendments. PREPARED BY: Toni Mott,Manager,Division of Facilities Management ATTACHMENT(S) 1.TA Tippet Bail Bonds Appraisal(PDF) 2.Bail Bonds Buiilding September 13,2016 Executive Summary (PDF) Packet Pg.266 10/11/2016 COLLIER COUNTY Board of County Commissioners Item Number: 11.A Item Summary: Recommendation to consider the counter-offer and purchase of the office building owned by Courthouse Shadows Consolidated Holding Inc., located at 3375 Tamiami Trail East. (Len Price,Administrative Services Administrator) Meeting Date: 10/11/2016 Prepared by: Title: Property Management Specialist, Senior—Facilities Management Name: Michael Dowling 09/26/2016 9:39 AM Submitted by: Title: Division Director-Facilities Mgmt—Facilities Management Name: Dennis Linguidi 09/26/2016 9:39 AM Approved By: Review: Facilities Management Dennis Linguidi Level 1 Add Division Reviewer Completed 09/26/2016 11:26 AM Administrative Services Department Len Price Level 1 Division Reviewer Completed 09/26/2016 4:20 PM Administrative Services Department Len Price Level 2 Division Administrator Review Completed 09/26/2016 4:20 PM County Attorney's Office Jeffrey A.Klatzkow Level 2 Attorney Review Completed 09/30/2016 8:58 AM County Attorney's Office Jeffrey A.Klatzkow Level 3 County Attorney's Office Review Completed 09/30/2016 8:59 AM Office of Management and Budget Valerie Fleming Level 3 OMB Gatekeeper Review Completed 09/30/2016 9:18 AM Office of Management and Budget Laura Wells Additional Reviewer Completed 09/30/2016 3:36 PM Office of Management and Budget Susan Usher Additional Reviewer Completed 10/04/2016 3:20 PM County Manager's Office Leo E.Ochs Level 4 County Manager Review Completed 10/04/2016 3:54 PM Board of County Commissioners MaryJo Brock Meeting Pending 10/11/2016 9:00 AM Packet Pg.267 11.A.c APPRAISAL REPORT REAL ESTATE APPRAISAL Of Courthouse Shadows Office • 9 o 0 Csi 76 _ 1 cc 0. 3375TrnaiaCmoiuTntry,FL, 3 ailEast411Na2ples, Collier 0 CU As of CU August 23,2016 Prepared For 46; Mr. Roosevelt Leonard Management Collier County Real Property 1l 3335 Tamiami Trail E., Ste. 0 Naples, FL 34112 Client File: PO 4500170485 Prepared by r 111)1)ett. 11)(., Thomas A. Tippett, MAI File Name: 16 143 Packet Pg. 268 4 I 1.A.c ,.........„ rIVI 7, ,. n I,A. hppcn, Inc. 1061 Collier Center Way#3 239-405-8551 x 1 Naples,FL,34110 tom@tatippett.com September 1,2016 Mr. Roosevelt Leonard t .4 Collier County Real Property Management 9 3335 Tamiami Trail E., Ste. 101 II a Naples,FL 34112 m o 0 to c Re: Appraisal Report, Real Estate Appraisal o co Courthouse Shadows Office :— Fi 3375 Tamiami Trail East,Naples, in Collier County, FL,34112 4 1,- 0 CV File Name: 16 143 To Dear Mr. Leonard: iv CI < At your request, I have prepared an appraisal for the above referenced property,which co -a may be briefly described as follows: The property appraised is an office building located adjacent to the Collier County government complex. col i co Please reference page 12 of this report for important information regarding the scope of +al research and analysis for this appraisal,including property identification, inspection, a highest and best use analysis,and valuation methodology. 1=. 4 The appraisal appraisal is intended to conform with the Uniform Standards of Professional Appraisal Practice (USPAP),the Code of Professional Ethics and Standards of CD Professional Appraisal Practice of the Appraisal Institute. •C 0 CO 4-, I confirm that I am competent to perform this appraisal and adhere to the competency a provision within USPAP. I certify that I have no present or contemplated future interest in the property beyond this estimate of value. Your attention is directed to the Limiting Conditions and Assumptions section of this report(page 7).Acceptance of this report constitutes an agreement with these conditions and assumptions ..--.. Packet Pg.,.2,.69 'ISA cwt Mr.Leonard Collier County Real Property Management September 1,2016 Page 2 In particular,I note the following: Hypothetical Conditions: • There are no hypothetical conditions for this appraisal. Extraordinary Assumptions: 43 • It is an extraordinary assumption that the property appraised will be managed and ° marketed to the public professionally. • The Liberty Bail Bonds tenant is an entity related to the building owner. While their lease is not arm's length,for the purpose of this appraisal it is an extraordinary assumption that if the property sold the Liberty Bail Bonds tenant would continue to c pay rent and honor all terms of their lease. m Based on the appraisal described in the accompanying report, subject to the Limiting Conditions and Assumptions, Extraordinary Assumptions and Hypothetical Conditions c (if any), I have made the following value conclusion: To Current As Is Market Value: tv The As Is market value of the Leased Fee estate of the property,as of August 23,2016, is o.$1,050,000 One Million Fifty Thousand Dollars m The market exposure time preceding August 23, 2016 would have been 12 months and the estimated marketing period as of August 23,2016 is 12 months. o.a If you have any questions or comments,please contact the undersigned. Thank you for the opportunity to be of service. F' Respectfully submitted, T.A. Tippett, Inc. 4 t � Thomas A.Tippett,MAI State-certified general real estate appraiser RZ#1669 tom a@tatippett.com Packet Pg•,270 11%11 Courthouse Shadows Office Summary of Important Facts and Conclusions GENERAL Subject: Courthouse Shadows Office 3375 Tamiami Trail East,Naples, Collier County, FL, 34112 The property appraised is an office building located adjacent to the Collier County government complex. Owner: Courthouse Shadows Consolidated Holdings, Inc. c Legal Description: Lengthy, see deed in addenda Date of Report: September 1,2016 Client: Collier County Real Property Management m° Intended Use: The intended use is for assisting the client with a purchase decision.. N_ Intended User(s): The client, Collier County Board of Commissioners. �� UJ Assessment: Q, Real Estate Assessment and Taxes Tax ID Assessment Total County Taxes c Year Rate #00389960007 2,015 $614,470 $11.67 $7,173 VSNotes: The assessed value of the property appraised is consistent with the assessed value of similar property types.The proposed a. Q. assessment for 2016 is$636,096 which would result in a tax i= amount of$7,423 if the tax rate remains unchanged. Sale History: The subject has not sold in the last three years, according °' to public records. 5 Current The subject is not currently listed for sale,or under Listing/Contract(s): contract. Page 1 Packet Pg.271 3i A.c Courthouse Shadows Office Land: Land Summary Parcel ID Goss Land Gross Land Usable Land Usable Land Topography Shape Area(Acres) Area(Sq Fl) Area(Acres) Area(Sq Ft) 3375 Tamiami Trl.E. 0.45 19,500 0.45 19,500 Level Roughly rectangular Notes: The subject is located on the north side of Tamiami Trail East/US-41 adjacent to the Collwr County government complex Improvements: Building Summary Building Name/ID Year Built Condition Number of Gross Building Rentable Stories Area Area p Courthouse Shadows Offic 1999 Above Average 1.0 4,849 4,640 y Notes: The building is well suited for its current use. 0 U Zoning: C-3 Commercial Intermediate Highest and Best Use commercial use of the Site: 0 Highest and Best Use Continued office use as Improved: N,•—• L a a. co C 0 m cTs m d a. a. I— Q C G) E .0 R y.+ Q � rill Page 2 Packet.Pg 272 r { 11.A.cu Courthouse Shadows Office VALUE INDICATIONS Type of Value: Market Value Cost Approach: Not Applicable Sales Comparison $1,210,000 Approach: Income Approach: $1,050,000 Reconciled Value: As Is Value Conclusion(s) $1,050,000 Effective Date(s) August 23,2016 Property Rights Leased Fee as Hypothetical Conditions: • There are no hypothetical conditions for this appraisal. Extraordinary Assumptions: m° • It is an extraordinary assumption that the property appraised will be managed and marketed to the public professionally. • The Liberty Bail Bonds tenant is an entity related to the building owner. While their lease is not arm's length,for the purpose of this appraisal it is an extraordinary N assumption that if the property sold the Liberty Bail Bonds tenant would continue to \ pay rent and honor all terms of their lease. o. 15 o. a rrr Page 3 Packet Pg. ,273 { 11 A c, Courthouse Shadows Office Land Use In the immediate vicinity of the subject,predominant land uses are commercial and residential. Other land use characteristics are summarized below. SURROUNDING AREA LAND USES Character of Area Suburban Predominant Age of Improvements New to 40 years Predominant Quality and Condition Average Approximate Percent Developed 98% 0 Infrastructure/Planning Average Predominant Location of Undeveloped Land North and East 0 Prevailing Direction of Growth North and Eastco U c 0 SUBJECT'S IMMEDIATE SURROUNDINGS 0° North Collier County Government Complex to m South Neighborhood Shopping Center ti East Wal mart c N West Collier County Government Complex Development Activity and Trends a During the last five years,development has been predominantly of renovation of residential and commercial uses. The pace of new development has generally been intermittent over this time but market expectations are that new development will begin within the next year or two. a i= d I a I Tr Page 17 Packet Pg.274 11.A.c Courthouse Shadows Office Outlook and Conclusions The area is in the stabilization stage of its life cycle. Given the history of the area and the growth trends, it is anticipated that property values will stabilize in the near future. In comparison to other areas in the region,the area is rated as follows: SURROUNDING AREA ATTRIBUTE RATINGS Highway Access Average Demand Generators Below Average 0 Convenience to Support Services Above Average c Convenience to Public Transportation Average v Employment Stability Average Police and Fire Protection Average m Property Compatibility Average m General Appearance of Properties Average ti 0 Appeal to Market Below Average 713 N i PriceNalue Trend Average Q f c p r Ca Es Cd a d a. s. Page 18 � � € Packet Pg.275 1.1.A.c Courthouse Shadows Office ....— Collier County Office Sales Activity Over the past three years average prices1)er square foot have been relatively stable. Sales volume has fluctuated with a slowing in 2016aftera large increase in 2015. Capitalization rates have been stable over the past three years. Overall,this market has some of the highest prices per square foot in Southwest Florida and has been stable over the past three years.This is expected to continue in the short term. Average Sale Price Per SF t iv 3Y 5Y 10Y Ail 0 ' $600 g --, 1.. 0 9 0 0 o $400 0 c o ='- RS $200 * .. er,' * w ',Z n, 1,.• 0 CV $0 ' I ' ' ' t — C6 2013 2014 2014 2015 2015 2016 20136 Q .2—o'......' Q3 01 03 01 Q3 Q1 a I .1til. I CoStar Properties 0 "CS C Sales Volume 5 lY 3y 51 Di All Q ''' al Fs m $100 irs a D. P ....• u) c c ta 2 $50 2.— u co .., ..... < 2013 2014 2014 2015 2015 20161 2016 Q 03 01 03 01 Q3 Q3 CoStar Properties yfflii,—, ri Page 22 t; i Packet_ t Pg.276 i 11 Courthouse Shadows Office Cap Rate f 3Y ITASI 4:t 10% 8% 6% f o 41 0 2013 2014 2014 2015 2015 2016 2016 0 03 Q1 03 01 03 01 03 0 CoStar Properties m m ti co N Tht6 i Q Q N C a m C t- c• t 1� Page 23 Packet Pg. 277 41 f.A.c Courthouse Shadows Office Property Description The following description is based on my property inspection, assessment records, property deeds,site plan dated 5/21/98 prepared by Frank L. Veasley, II and Associates, a floor plan prepared by LFDG Architects dated 5/5/98 and information provided by the property manager and broker Bill Poteet. S1te Location: The subject is located on the north side of Tamiami Trail East/ d US-41 adjacent to the Collier County government complex. o 9 Current Use of the Improved as office Property: o Site Size: Total: 0.45 acres; 19,500 square feet tn 0 Usable: 0.45 acres; 19,500 square feet CO ' m Shape: The site is roughly rectangular. nt Frontage/Access: The subject property has good access with frontage as follows: • Tamiami Trail East: 150 feet ra The site has an average depth of 130 feet. It is not a corner lot. Visibility: Average Topography: The subject has level topography at grade and no areas of m° wetlands. Soil Conditions: The soil conditions observed at the subject appear to be typical Q, of the region and adequate to support development. Utilities: Electricity: The site is served by public electricity. Sewer: Municipal sewer a Water: Municipal water Natural Gas: TECO 1.4 Underground Utilities: The site is serviced by underground utilities. Adequacy: The subject's utilities are typical and adequate for the market area. Site Improvements: Street Lights:Along US-4l Sidewalk: Concrete Curb/Gutter: Concrete Landscaping: The subject has average landscaping. Page 24 l Packet Pg. 278 11.A.c Courthouse Shadows Office Flood Zone: The subject is located in an area mapped by the Federal Emergency Management Agency(FEMA). The subject is located in FEMA flood zone AE elevation 7,which is classified as a flood hazard area. FEMA Map Number: 12021C0394H FEMA Map Date: May 16,2012 Zone AE-Areas with a 1%annual chance of flooding and a 26%chance of flooding over the life of a 30-year mortgage. In most instances, base flood elevations derived from detailed analyses are shown at selected intervals within these zones. 9 Wetlands/Watershed: No wetlands were observed during our site inspection. z Environmental Issues: There are no known adverse environmental conditions on the subject site. Please reference Limiting Conditions and Assumptions. CO Encumbrance/ There are no known adverse encumbrances or easements. Easements: Please reference Limiting Conditions and Assumptions. Site Comments: The site has average and typical utility. 0. to ca co ru o_ o. _c Page 25 Packet Pg.279 11.A.c Courthouse Shadows Office a � Development/Property Courthouse Shadows Office Name: Property Type: Office Overview: The property appraised is an office building located adjacent to the Collier County government complex. L GENERAL-Cot iot SuAWOWS OFFICE o Building Identification: Courthouse Shadows Office Building Description: Professional office building Building Class: C o Construction: Class C Construction Quality: Average N Year Built: 1999 �—s' Effective Age: 15 years a Remaining Useful Life: 30 Condition: Above Average Appeal/Appearance: Average a Q. Areas, Ratios& Number of Stories: 1.00 Ea.. Numbers: Gross Building Area: 4,849 Gross Leasable Area:4,640 E U c0 .r. Page 28 Packet Pg.280 Courthouse Shadows Office 7z-liatIOATI0NiFitalym&ExqyRxitttR.-,COliRTttOt$EtStkt4OWSOF'FiCE Foundation: Poured concrete slab Structural Frame: Masonry Frame Exterior: Concrete Block Windows: Fixed Casement Roof/Cover: Flat/Rubber Membrane a) 9 ,biTERIOR COURTHOUSVS •WS OFfICE Interior Layout: Average Floor Cover: Carpet, Ceramic Tile Walls: Painted drywall Ceilings&Ceiling Acoustic ceiling panels/ 10 ft. Height: c.1 Lighting: A mix of fluorescent and incandescent lighting. (1) Restrooms: Average 0. COUIt'n1OUSESMIP 0 WS FFJCP, A/Oct:TAM-cm,SYSTEIVLS _ Heating: Electric Cooling: Package Units Electrical: Flexible conduit I— Plumbing Condition: Average Sprinkler: None .c C13 Elevators/Escalators: 0/0 Security: None noted Comments, Courthouse The building is well suited for its current use. Shadows Office: Page 29 Packet Pg.281 11.A.c Courthouse Shadows Office Valuation Methodology Three basic approaches may be used to arrive at an estimate of market value. They are: I. The Cost Approach 2. The Income Approach 3. The Sales Comparison Approach Cost Approach The Cost Approach is summarized as follows: Cost New 0 - Depreciation +Land Value c.> =Value Income Approach m The Income Approach converts the anticipated flow of future benefits(income)to a present value estimate through a capitalization and or a discounting process. v i Sales Comparison Approach The Sales Comparison Approach compares sales of similar properties with the subject N^ property. Each comparable sale is adjusted for its inferior or superior characteristics. The values derived from the adjusted comparable sales form a range of value for the subject. By process of correlation and analysis,a final indicated value is derived. -a Final Reconciliation The appraisal process concludes with the Final Reconciliation of the values derived from the approaches applied for a single estimate of market value. Different properties require m different means of analysis and lend themselves to one approach over the others. o. Analyses Applied a A cost analysis was considered and was not developed because the age of the improvements makes the depreciation difficult to accurately measure. E A sales comparison analysis was considered and was developed because there is adequate data to develop a value estimate and this approach reflects market behavior for this property type. An income analysis was considered and was developed because the subject is an income producing property and there is adequate data to develop a value estimate with this approach. Page 40 '11 Packet Pg.282 11.A c Courthouse Shadows Office Sales Comparison Approach The Sales Comparison Approach is based on the premise that a buyer would pay no more for a specific property than the cost of obtaining a property with the same quality, utility, and perceived benefits of ownership. It is based on the principles of supply and demand, balance, substitution and externalities.The following steps describe the applied process of the Sales Comparison Approach. • The market in which the subject property competes is investigated;comparable sales, contracts for sale and current offerings are reviewed. • The most pertinent data is further analyzed and the quality of the transaction is determined. • The most meaningful unit of value for the subject property is determined, -a co • Each comparable sale is analyzed and where appropriate,adjusted to equate with r- (Ts the subject property. • The value indication of each comparable sale is analyzed and the data reconciled 0 Cs1 for a final indication of value via the Sales Comparison Approach. Unit of Comparison For this analysis, I use price per square foot as the appropriate unit of comparison because market participants typically compare sale prices and property values on this basis. r- ru 0. a E 0 Page 41 Packet Pg. 283 11A c' Courthouse Shadows Office 44.'.... Comparables Map oderis'adk4 ,„... X^, ,-,' L,,, TV,'.-rt_ - ''4.• carit,in Gardens--a ---- ‘2- -gort,,,, IP 4 444'''' 141 MeraZengt 11104.e 3 ,,,,,,, 14,-, Outtt99et 1 n c., 0. Li, , a1 g Entortgii*Ayt i tEttt t, v tt4ht",,,,t-t•!--:- -it't';''..r",'"il-'- Si 91 - ,„,„ 7.- ,Ai. t . l' i RA d la Rd :.*,..---,••:-.–k-t- , --..,-•-..... n'A* -tm. ,., -' a),, 4— a'estel,;4,4', 1," -',•—,!,.*ft `',;•., r''' I ,: ,,,--s'e tc,),„, , 4,.°-;4,•, ,,...;=.„.•, z 4.Napes Municipal Airport l 0 Naples - --te---- „ i. 40' EStri 4440 = OLD NAPLES ' 4 * 11' 0 - .0,4%ii‘•,,ttitq'itssr,tt:it.T,,-° log. ---- ' ,. .. ti 414 o 'ir4ic''-i:tirgi14-eift't-i•-:---.,e, ' ..,0*--1 * ,, ir,A i , CO a'S .a. •r , ....' -:4-4!..--,,`'---....4. it, ": * l'. ' . .„, '''' CO ''''.,-, ,°,.-', '.:'''',,•''-:...ri.* ..:,y'r.2` c V:,4. . It ig, E , EAST,NA S —. - t--- -,;', -..,, ,,•z,',.••= ..z, "--, - - ,, - . . -'. ,....-- ,, ,,,,,,...,,.", n,": :i.,,t - - ,3-, , _- - Y4 -‘44. csi t.."oogic-:t,-4,,t. ,..----zp -,:: -1,4 ' ., c; Map data©2016 Google,INEGI .--E9,,....... rc Analysis Grid cl. D. < The above sales have been analyzed and compared with the subject property. I have 0 '0 considered adjustments in the areas of: c 0 co • Property Rights Sold • Market Trends :- (1 m • Financing • Location l • Conditions of Sale • Physical Characteristics ci; i. 0. i:: On the following page is a sales comparison grid displaying the subject property,the comparables, and and the adjustments applied. .«.; c a) E ..c 6.) 0 ... Page 46 r jr il .. Packet Pg.284 11.A.c Courthouse Shadows Office � Y Comparable Sale Adjustments The adjustment process is typically applied through either quantitative or qualitative analysis. Quantitative adjustments are often developed as dollar or percentage amounts, while qualitative adjustments are simply expressed through relative comparison(i.e. significantly inferior). Quantitative adjustments are most applicable when the quality and quantity of data allows paired sales, cost or statistical analysis. Given the availability of data and imperfect nature of the real estate market,participants most often rely on relative or qualitative comparisons. a> Combining the benefits of both qualitative and quantitative analysis,a blended o adjustment technique is generally used. This is accomplished through pre-assigning quantitative adjustments for relative comparison. The following chart illustrates the blended adjustment technique. fill BLENDED ADJUSTMENTS m° Qualitative Pre-Assigned Quantitative m Comparisons Adjustment Slight Adjustment 5% Moderate Adjustment 10% Fair Adjustment 15% Significant Adjustment 20% .L Large Adjustment 25%plus Q Market participants can often identify superior or inferior characteristics when comparing properties. Without paired sales or statistical information,applying quantitative adjustments to reflect the differences is often problematic or subjective.For this analysis, the above listed quantitative adjustments reflect the need for slight,moderate,fair, significant of large adjustments. a Property Rights The transaction price of a sale is always based on the real property interest conveyed. In this instance, an adjustment for this attribute was not considered necessary. a) Financing Prices paid in acquiring property may differ significantly due to the financing involved, if any. Cash or cash equivalencies are the basis of value,whereas extended,above market interest rate and/or leverage investor terms sales, generally represent the higher portion of a sales price range. Therefore, some methods of converting these financing terms to cash must occur so that the adjustment process may be applied to the sales. In reviewing the comparables,an adjustment was not required for atypical financing. rwri Page 48 ril Packet Pg.285 IG +r 11.A.c; Courthouse Shadows Office Parking Type and Type:Paved open surface parking Number of Spaces: Spaces: 15 Condition:Average Parking Ratio: 3.09 spaces per 1,000 square feet. Design &Functional Average Utility: 0 0 Deferred Maintenance: None noted a) Capital Improvements: None known (.) ins Comments: The building is well suited for its current use. Americans With Disabilities Act Please reference the Limiting Conditions and Assumptions section of this report on page 11. -- Hazardous Substances L a Please reference the Limiting Conditions and Assumptions section of this report on page a 11. = I m i 0. a Page 30 Packet Pg.286 Courthouse Shadows Office Comparables I have researched three coles for this analysis;these are documented on the following pages followed by a location map and analysis grid.AJ\ma{embuwebcco researched through numerous sources, inspected and verified by a party to the transaction. Comp Name Grantor Price Price Per SF Condition Address Grantee Date GBA Year Built Subject Courthouse Courthouse Above Average Shadows Office Shadows 3375 Tamiami Trail 8/23/2016 4,849 1999 --_-East_-___ 1 848Y4lstAve. &48First LLC $3,225,000 $191.11 Average o 848NlmtAve ASNC,LLC 7B0/2015 16875 1970 0 � 2 851 5th Ave.N. Lorcar,Inc. $3,619.385 $245.00 Average 85l5th Ave.N. Naples 5th Ave. 68/2016 14773 1980 SAA,LLC — ' - -- - — (.1 3 Colonial Square Gregory J. 5527.000 $203.00 Average 1020 KnVriw\TR l02OGood|ume Rd. DADP, LLC 9/11/2014 2596 1990 N. 0. co rD Page 42 Packet Pg.287 � r�� 11.A.c Courthouse Shadows Office Comparable 1 J 510F AL ART'S$U1L 1N L is NN Im .F w 1 a, W Transaction Fs ID 2209 Date 7/30/2015 m Name 848 N 1st Ave. Price $3,225,000 Address 848 N 1st Ave Price Per SF $191.11 0 tY Ci Naples Financing Cash Eq. i Tax ID 14045280004 Property Rights Leased Fee v�ir. Grantor 848 First LLC Verification Source Seller Broker Le Grantee ASNC,LLC Source Name John Paulich a Legal Description Lengthy Source Phone 239-776-9400 Q o Site c 0 Acres 0.9 Topography Level m Land SF 38,768 Zoning Commercial a Road Frontage 1st Ave.N. Encumbrance or None known m Easement a) Q. Shape Rectangular Environmental Issues None knownix Utilities City water&sewer Q H Improvements&Financial Data c m E GBA 16875 c u r Year Built 1970 NOI $320,625 Q Condition Average Cap Rate 9.94% Comments The broker indicated this was an arm's length transaction.This is a professional office building with 1 or 2 medical offices located in downtown Naples. NOI calculated using market parameters of$20 psf NNN rent and 5%vacancy. r. TT Page 43 Packet Pg.288 I 1.A.0 Courthouse Shadows Office Com,arahie 2 ,--,„ , ' th, • , .. V ..,.. .... wvi Li '14.144.. i , ' — , a) --4--, 0 L. a).T3...-.. - = 0 0 U) -2 0 CU tt,;"?°:,7r.'fittriittitxs:A'.:47.01:1;1.,;c4'-',7',,,,,-,,;;" ',°' ,..,,,,,,,:',11,..,/,',..,..:ii......:,,,,Vic::,,,'-,•'',,,,,t; a co .;;-,,:4*,,,',S,44:if:6*.;4frw," :he'..,-fr-ve..,',-. ,, ,v- -'' • .. ti Transac on 6/3/2016 .cr t•-• 0 Date c%) 3020 Price $3,619,385 S/45.00 ....... ID 851 5th Ave.N. Price Per SF Cash Eq. Te tr) Name 851 5th Ave.N. Financing El Address Naples Property Rights Leased Fee Public Records 'EL 0. City Verification Source < Tax ID -- tr) Source Name ,---, Grantor #L005tc5at40,Oinc00.426 Naples 5th Ave.SAA, o Grantee LLC -- CU .— F*3 CO Legal Description Lengthy Source Phone Level a. 0. 0.5 i= None known Acres 21,780 SiteTopographyzoningCommercial Road Frontage Land SF I— left in Environmental Issues 9th St.N.right in and out, EncumbranceEasementor a) Near Rectangular E Shape City water&sewer .c C., Utilities None known IA Improvements& Financial Data $296,790 GBA NOI 1980 Cap Rate 8.20% Year Built Average Condition Comments could be reached for nor seller Class C office building with 8 covered parking Neither the buyer spaces.Incometaken from CoStar Properties. ----. Page 44 Till Packet Pg. 289 Ai.A.c Courthouse Shadows Office Comparable 3 , - , . 'relf4:-',:..,:t rplezt..,k•',L,r, ..4,70-.0 -,.,f,,,I,14,..T,..., '. ,.... co" ,.....- 9 iii 0 0 (I)- - XI - -- ---- - .....' co0 Transaction Ea ID 3058 Date 9/11/2014 Name Colonial Square 1020 Price $527,000 7.1. Address 1020 Goodlette Rd.N. Price Per SF $203.00 gi) City Naples Financing Cash Eq. Tax ID #05830290027 Property Rights Fee Simple 71 ,u),..--... Grantor Gregory.1.Kopriva,TR Verification Source Seller Broker cc' Grantee DAD?, LLC Source Name Patty McClimans Q. Legal Description Lengthy Source Phone (239)963-4288 < en Site g m Acres -- Topography Level Land SF -- Zoning Commercial Fs CB Road Frontage Goodlette Rd.right in and Encumbrance or None known 15 out,left in Easement a. a Shape Near Rectangular Environmental Issues None known Utilities City water&sewer < 1-- Improvements&Financial Data 4E1' a) E GRA 2596 ..c c.) .1.1 Year Built 1990 NOI $29,594 :=-C Condition Average Cap Rate 5.62% I Comments This was an arm's length transaction according to the broker.There are 3 private offices and an open area downstairs,and 3 private offices,a large room and open area upstairs.There is a bathroom on each floor. The seller was a software developer and the building has very fast fiber optic internet connectivity,This is a land condominium where the land owned is the building footprint and parking is a common element with all buildings in the project.. NOI calculated using market parameters of$12 psf NNN rent and 5%vacancy. Page 45 Packet Pg.290 g 11.A.c ._, Courthouse Shadows Office .---. Analysis Grid Comp 1 Comp 2 Comp 3 Name Courthouse 848 N 1st Ave. 851 5th Ave.N. Colonial Square Shadows Office 1020 Address 3375 Tamiami 848 N 1st Ave 851 5th Ave. N. 1020 Goodlette Trail East Rd.N. City Naples Naples Naples Naples Date 8/23/2016 7/30/2015 6/3/2016 9/11/2014 Price $3,225.000 $3,619,385 $527,000 GBA 4,849 16875 14773 2596 GBA Unit Price $191.11 $245.00 $203.00 ,... ,... Transaction Adjustments ° Property Rights Leased Fee Leased Fee 0.0% Leased Fee 0.0% Fee Simple 0.0% Financing Cash Eq, Cash Eq. 0.0% Cash Eq. 0.0% Cash Eq. 0.0% c = Conditions of Sale Normal Normal 0.0% Normal 0.0% Normal 0.0% 0 Adjusted GBA Unit Price $191.11 $245.00 $203.00 -61) Market Trends Through 8/23/2016 0.0% 0.0% 0.0% 0.0% c m Adjusted GBA Unit Price $191.11 $245.00 $203.00 = co Location Very Good Very Good Very Good Above Average m %Adjustment 0% 0% 10% er f••• $Adjustment $0.00 $0.00 $20.30 c) cv GBA 4,849 16875 14773 2596 Ts ca %Adjustment 0% 0% 0% 1-6. $Adjustment $0.00 $0.00 $0.00 o. o. <t Condition Above Average Average Average Average .15 Year Built 1999 1970 1980 1990 c o %Adjustment 20% 10% 10% m ._ $Adjustment $38.22 $24.50 $20.30 m to Road Frontage Tamiami Trl. E. 1st Ave. N. 9th St. N. right Goodlette Rd. 'al ct. right in and out in and out, left right in and out, o. r-: in left in < %Adjustment 5% -5% 5% 46; $Adjustment $9.56 -$12.25 $10.15 g Distance I 0.0 2.5 2.7 2.9 6.) IS Adjusted GBA Unit Price $238.89 $257.25 $253.76 Net Adjustments 25.0% 5.0% 25.0% Gross 25.0% 15.0% 25.0% ,........„. W Page 47 Packet Pg.291 t' •e c„ Courthouse Shadows Office L Rent Roll ° m E The following rent roll details the current occupancy and rent status on a unit by unit basis. ° Rent Roll N Rent Roll Suite No.of %of Lease Date Lease Date Lease Lease Contract Contract Market CntrJAsk Tenant/Unit Name No. Space Type ype Uoits SF Total Start End Term Type Rent" Rent/SF Rent Variance C I Liberty Bail Bonds 100 Small Office 1 1,142 24,0% 4;1/2000 3/31/2019 228.07 Mos. Net $17,458 $15.29 $13.00 18% Donald Day 200 Small Office 1 2,060 43.4% 11/1/2013 10/31/2018 59.99 Mos. Net $30,976 $15,04 $1300 16% JobnMusca 300 Small Office 1 698 14.7% 4/15/2010 3/14/2018 95 Mos. Net $12,570 $18.01 $13.00 39% m Brown,Suarez,Rios, Weinberg 400 Small Office 1 850 17.9% 3/1/2014. 2128/2019 59.99 Mos. Gross $18,000 $21.18 $13.00 63% Totals 4 4,750 100.0°/. Total $79,003 $16.63 ti i Leased 4 4,750 100,0% Total Commercial $79,003 $16.63 Rent/SF/Year Vacant 0 0 0.0°!° N 'Contract Rent=Annualized rent as of appraisal date Rent per SF for occupied space t The property appraised achieves among the highest rental rates in this submarket. a QThe Liberty Bail Bonds tenant is an entity related to the building owner.While their lease is not arm's length,for the purpose of this appraisal it is an extraordinary assumption that if the property sold the Liberty Bail Bonds tenant would continue to pay rent and honor all terms of their lease, ° CO For comparative purposes,Brown Saurez gross rent is equal to around$18.50 per square foot NNN rent. CO . 03+ a a 1— E .c I gs rilfr :it' Page 53 Packet Pg.-292 11.Ac ,-' Courthouse Shadows Office Lease Expiration Schedule The lease expiration schedule provides insight to vacancy exposure and lease-up expenses. Lease Expirations Year Ending SF Expiring* %of Total Cumulative %ofTotal 1/11/2018 0 0.0% 0 0.0% 1/11/2019 2,758 58.1% 2,758 58.1% 1/11/2020 1,992 41.9% 4,750 100.0% d 1/11/2021 0 0.0% 4,750 100.0% - *Existing commercial leases only.Projected leases,if any,excluded u,�i c c Leased Status Conclusion v The subject is at stabilized occupancy. It is leased to an average quality tenant base.The c lease structure in place results in a typical expiration exposure pattern. Contract rents are m generally higher than market rates. These factors result in average investment risk for the .- subject. m rr Market Rent N Market Rent Comparables N co I have researched four comparables for this analysis;these are documented on the a following pages followed by a location map and analysis grid. a h C O Comp Address Year Built Property Name m City/State Condition Type Size Rent/SF 1 2325 Stanford Ct 2001 Stanford Court 3 03 Houve Naples,FL Unit 401 NNN 3,000 $1200 +-5 2 2670 Airport Rd. 1973 Abstract Budding C. 3____ Naples,FL AboveAsking NNN 1 973 $13.25 M. 1- 2660 Airport Pulling 1985 Courtview Building .4 d S F Naples,FL Average asking 2nd floor NNN 1,350 $12.00 g; 4 2500 Airport Road 1984 Courtland Plaza C O Naples,FL Average asking Gross 1,673 $15.00 E t v ca Q ice, Page 54 741-1 Packet}Pg, 293 *,11,.A'c 0 Courthouse Shadows Office Lease Analysis Grid Comp 1 Comp 2 Comp 3 Comp 4 Name Courthouse Shadows Stanford Court Abstract Courtview Courtland Plaza Office Building Building Address 3375 Tamiami Trail 2325 Stanford 2670 Airport 2660 Airport 2500 Airport East Ci Rd. Pulling Rd S Road City Naples Naples Naples Naples Naples Rent/SF $12.00 $13.25 $12.00 $15.00 Expense Recoveries $5.50 NNN $6.00 None Size 3,000 1,973 1,350 1,673 Transaction Adjustments Conditions of Lease Listing -10% Listing -10% Listing -10% Listing -10% Other Similar 0% Similar 0% Similar 0% Similar 0% g Adjusted Rent $10.80 $11.93 $10.80 $13.50 C Trends/Year 0.0% 0.0% 0.0% 0.0% 0.0% a? Adjusted Rent $10.80 $11.93 $10.80 $13.50 = Expenses $0.00 $0.00 $0.00 -$6.00 0 Adjusted Rent $10.80 $11.93 $10.80 $7.50 rn Location Very Good Good Good Good Good S %Adjustment 10% 10% 10% 10% CO S Adjustment $1.08 $1.19 $1.08 $0.75 .- COas Condition Above Average Above Average Above Average Average Average %Adjustment 0% 0% 10% 10% $Adjustment $0.00 $0.00 $1.08 $0.75 N Access Right in and out Median cut Right in and out Right in and out Right in and out ti %Adjustment -5% 0% 0% 0% $Adjustment -$0.54 $0.00 $0.00 $0.00 Q' a in Distance) 0.41 0.18 0.19 0.31 c Adjusted Rent $11.34 $13.12 $12.96 $9.00 t) m Net Adjustments 5,0% 10.0% 20.0% 20.0% - Adjustments 15.0% 10.0% 20.0% 20.0% 00 m a a i-7- < -Q I- i c d E •_ V 2 Zi I I 1 n Page 60 Packet Pg.294 1.1'A.c.. Courthouse Shadows Office L t11 9 Potential Gross Income Summary ; Potential Gross Income-Occupied Space M Contract Contract Market Market Contract V. O U Occupied Space SF Units Rent Rent/SF Rent Rent/SF Mkt.Rent di Small Office 4,750 4 $79,003 $16.63 $61,750 513.00 127.9% C Occupied Space Totals 4,750 4 $79,003 $16.63 $61,750 $13.00 127.9% O m Commercial Totals 4.750 4 $79,003 $16.63 $61,750 $13.00 127.9% — CI *Contract Rent=Annualized rent as ofteppraisal date CO Potential Gross Income-Vacant Space { r- Potential Gross Rent Market Market ty Vacant Space SF Units Rent Rent/SF is ^ Vacant Space Totals 0 0 $0 $0.00 t/t CZ L Potential Gross Income Summary QCI.. Market Rent Market Rent i Q Market PGI For Occupied Space $61,750 Contract Rent For Occupied Space $79,0031 'N6 Market PGI For Vacant Space $0 Market PGI For Vacant Space $01 0 O Market Potential Gross Income $61,750 Contract&Market PGI $79,00311 Market PGI per SF $13.00 Contract&Market PGI per SF $16.63 td Contract to Market Ratio 127.9%1 CO O 0. 0. I- Q t- r.+ C to E V to Z a Page 63 Packet Pg. 295 11Ac : Courthouse Shadows Office Estimate of Gross Income Potential Gross Rent For purposes of the analysis that follows,potential gross rent is based on contract rents. Expense Recoveries Income is generated from tenant obligations to reimburse the owner for pass-through of all operating expenses, except Reserves for all tenants except the Brown Saurez tenant who reimburse no expenses. Expense recoveries are calculated on a lease-by-lease basis. L.6 Vacancy and Collection Loss 0 A vacancy and collection loss allowance is deducted at an expected stabilized rate.As c discussed in the Market Analysis,the current submarket vacancy rate is 10%. Vacancy 'o rates among the stabilized properties range from 0%to12%,with an average of about 5%. Based on this information and considering the location adjacent to the government c complex, I conclude a stabilized vacancy and collection loss allowance for the subject of 2.00%. Other income The subject does not generate significant amounts of recurring income from sources other than rent, and none is projected in this analysis. Nr1 Effective Gross Income �. a Based on the preceding estimates of potential gross income less allowance for vacancy and collection loss, effective gross income is calculated at$105,104. -a 0 co r m 0. 0. I- d E v Sd 1 Page 64 ITT Packet Pg;296: 11.A c� t € Courthouse Shadows Office Expenses I requested three years of historical operating data,year-to-date figures, and a current budget for the property. I was provided with only expenses from 2015.My inability to obtain this information and consider it in my analysis may affect my value opinion. To develop projections of stabilized operating expenses,I analyze the subject's expenses and comparable data from my files. The following table summarizes my analysis.As appropriate,the owner's operating expenses are reclassified into standard categories and exclude items that do not reflect normal operating expenses for this type of property. d Expense Summary 2 Appraisal 2015 Expense Amount $/SF', Amount S/SF Real Estate Taxes $7,423 $1.60 $7,173 $1.55 c Properly Insurance $6,960 $1.50'', $6,818 $1.47 Utilities $12,760 $2.75 $13,169 $2.84 Repairs/Maintenance $3,248 $0.70 $3,222 $0.69 Misc./Other $139 $0.03 $128 $0.03 Management $3,871 $0.83 $5,400 $1.16 0 Reserves $2,320 $0.50 $0 $0.00 Totals $36,721 $7.73 $35,910 $7.56 Notes: $/SF and/or$/Unit are based on totals for the o. a. Expenses Analysis and Projection o Real Estate Taxes This expense category includes all local,county, and state property tax levies. My projection is based on the property assessment and tax rate for the subject, as discussed previously in the Real Estate Tax Analysis. They are projected to be$7,423 in my analysis. Property Insurance Insurance expense includes property and casualty insurance for the subject. My projection is consistent with the subject's expenses and comparable data. They are projected to be$6,960 in my analysis. Utilities Utility charges include water, sewer, common electricity and trash collection expenses. My projection is consistent with the subject's expenses and comparable data. They are projected to be$12,760 in my analysis. Page 65 Packet Pg297: Courthouse Shadows Office Capitalization Rate Conclusion To conclude a capitalization rate,I consider each of the following investment risk factors to determine its impact on the capitalization rate. The direction of each arrow in the table below indicates my judgment of an upward,downward,or neutral impact of each factor. Impact on Risk Factor Issues Rate Income Characteristics Rollover risk,escalation pattern, above/below market rents,major tenant a)" credit strength. 0 Competitive Market Position Construction quality,appeal,condition, effective age,functional utility. O Location Market area demographics and life cycle y trends;proximity issues;access and I support services. t o co Market Vacancy rates and trends;rental rate trends;supply and demand. Highest&Best Use Upside potential from redevelopment, 4--> adaptation,expansion. Overall Impact cn Accordingly,placing primary reliance on the comparable sales,CoStar data and considering the location of the property appraised adjacent to the Collier County e Government Complex, I conclude to a capitalization rate of 6.50%. 0° m Q. I d E Page 72 Packet Pg.298 1 1-.A.0 Courthouse Shadows Office Capitalization to Value Income Capitalization Analysis Unit/Space Type Income Method Units/SF Annual %of PCI Small Office $16.63 5/SF/Year 4.750 $79,003 73.7% Expense Reimbursement $6.09 VSF/Year 4,640 $28,245 26.3% Potential Gross Income: $107,249 100.0% Vacancy&Collection Loss 2.00% $2,145 Other Income: $0 Effective Gross Income(EGI): $105,104 98.0% — $.- CD Expense Amount Method Annual S/SF 9 Real Estate Taxes $7,423 S/Year $7,423 $1.60 2 Property Insurance $1.50 S/SF $6,960 $1.50 c a , Utilities $2.75 SSE $12,760 $2.75 (.) 1 Repairs/Maintenance $0.70 S/SF $3,248 $0.70 in -a c Misc./Other $0.03 S/SF $139 $0.03 o [0 Man::ement 5% %Collected Rent $3,871 $0.83 r- ii Reserves $0.50 $/SF $2,320 $0.50 ca Total Expenses: $36,721 $7.91 .xt I,- Expense Ratio(Expenses/EGI): 34.94% 0 CV Net Operating Income(NOI): $68,382 $14.74 Ts Capitalization Rate: 6.50% u)Value(NOI/Cap Rate): $1,052,034 $226.73 IS. Rounded: $1,050,000 $226.29 a. 4 u) a o Direct Capitalization Analysis Conclusion m ci Based on the above analysis detailed above,as of August 23,2016 I have reconciled to a m direct capitalization approach value of: 15 o. o. i= $1,050,000 < 1-- ;.; One Million Fifty Thousand Dollars c E Hypothetical Conditions: 0 co • There are no hypothetical conditions for this appraisal. Extraordinary Assumptions: • It is an extraordinary assumption that the property appraised will be managed and marketed to the public professionally. • The Liberty Bail Bonds tenant is an entity related to the building owner, While their lease is not arm's length, for the purpose of this appraisal it is an extraordinary assumption that if the property sold the Liberty Bail Bonds tenant would continue to pay rent and honor all terms of their lease. ....--%, W Page 73 Packet Pg.299 Courthouse Shadows Office Final Reconciliation The process of reconciliation involves the analysis of each approach to value. The quality of data applied,the significance of each approach as it relates to market behavior and defensibility of each approach are considered and weighed. Finally, each is considered separately and comparatively with each other. Value indications Cost Approach: Not Applicable Sales Comparison Approach: $1,210,000 Income Approach: $1,050,000 c Cost Approach The cost approach is most reliable for newer properties that have no significant amount of ° accrued depreciation. As previously discussed,the Cost Approach is judged to be inapplicable and is not utilized. m Sales Comparison Approach m The sales comparison approach is most reliable in an active market when an adequate quantity and quality of comparable sales data are available. In addition, it is typically the most relevant method for owner-user properties, because it directly considers the prices of alternative properties with similar utility for which potential buyers would be ra competing. The analysis and adjustment of the sales provides a reasonably narrow range ^ of value indications.Nonetheless, it does not directly account for the income characteristics of the subject. Therefore,this approach is given secondary weight. a Income Approach Ca The income capitalization approach is usually given greatest weight when evaluating m investment properties. The value indication from the income capitalization approach is supported by market data regarding income,expenses and required rates of return.An investor is the most likely purchaser of the appraised property,and a typical investor would place greatest reliance on the income capitalization approach. For these reasons, the income capitalization approach is given greatest weight in the conclusion of value. E s V Page 74 PacketrPg.300 Courthouse Shadows Office Value Conclusion Based on the data and analyses developed in this appraisal,I have reconciled to the following value conclusion,as of August 23,2016, subject to the Limiting Conditions and Assumptions of this appraisal. Reconciled Value: Premise:As Is Interest: Leased Fee Value Conclusion: $1,050,000 One Million Fifty Thousand Dollars O 1.13Hypothetical Conditions: • There are no hypothetical conditions for this appraisal. Extraordinary Assumptions: • It is an extraordinary assumption that the property appraised will be managed and c marketed to the public professionally. co • The Liberty Bail Bonds tenant is an entity related to the building owner. While their lease is not arm's length,for the purpose of this appraisal it is an extraordinary m assumption that if the property sold the Liberty Bail Bonds tenant would continue to pay rent and honor all terms of their lease. Q. O CO m a. C ltS Page 75 Packet Pg.301 Courthouse Shadows Office Certification Statement I certify 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 of my personal,impartial,and unbiased professional analyses,opinions and conclusions. • I have no present or prospective future interest in the property that is the subject of ° this report,and have 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 m° 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 cam„ the cause of the client,the amount of the value estimate,the attainment of a stipulated result,or the occurrence of a subsequent event directly related to the intended use of yn this appraisal. a. • The evaluation was not based on a requested minimum valuation or specific • valuation,or approval of a loan. • My analyses, opinions,and conclusions were developed,and this report has been prepared, in conformity with the Uniform Standards of Professional Appraisal Practice(USPAP). n. a • My reported analyses,opinions,and conclusions were developed and this report has been prepared in conformity with the Code of Professional Ethics and Uniform Standards of Professional Appraisal Practice(USPAP)of the Appraisal Institute. w E • The use of this report is subject to the requirements of the Appraisal Institute relating co to review by its duly authorized representatives. • No one provided significant real property appraisal assistance to the person(s)signing this certification. • I certify sufficient competence to appraise this property through education and experience, in addition to the internal resources of the appraisal firm. Page 76 Packet Pg 302 11Ac ': { Courthouse Shadows Office • The appraiser has not performed any prior services regarding the subject within the previous three years of the appraisal date. • Thomas A.Tippett has made an inspection of the subject property. • As of the date of this report,I(Thomas A. Tippett,MAI)have completed the requirements of the continuing education program of the Appraisal Institute. 0 2 Thomas A. Tippett,MAI o State-certified general real estate appraiser RZ#1669 0 tom ,tatippett.com .a C O m ctsm F- 0 N To" co t1 S1 co co O. Q f— C ca Page 77 Packet Pg303. 11.A.d 09/13/2016 EXECUTIVE SUMMARY Recommendation to authorize the County Manager to make an offer to purchase the Courthouse Shadows Consolidated Holding, Inc. office building located at 3375 Tamiami Trail East. (Toni Mott,Real Property Manager) OBJECTIVE: To facilitate future space planning requirements that will reduce the County's expenditures for off-site leaseholds. CONSIDERATION: In May 2016, staff contracted for an update to the County's Master Space Plan to ca ensure adequate space is available to meet service requirements in the near and long-term future. Staff co recently learned that the office building located immediately east of the Government Center's south •• entrance has become available for sale. A location map is attached for reference. The asking price is r— $1,495.000.Real Property Management's staff appraiser has prepared a market valuation in the amount of t $1,290,000. Per Florida Statute, one state certified independent appraisal will be required at a cost of $1,000. E The site is zoned C-3 and consists of.45 acres with a one-story,4,797 square foot building that is divided cr) into four separate office suites. There are fifteen parking spaces. The building is fully occupied with lease expiration dates that range from March 2018 to March 2019. However,one lease includes a provision for > a five-year renewal with rent to be negotiated at market rate. If negotiations are successful, the new termination date for this unit would be October 31, 2023. All leases are triple net (Lessee pays taxes, cu insurances,common area maintenance,and utilities)and the total annual gross rent income at the property is currently$116,495.76. There is no early termination clause provided for the existing tenants to vacate cs, their leased spaces prior to the termination dates. Upon termination of existing leases and any required renovations or remodeling, occupancy is projected in 2024. Rental income during that timeframe is estimated at$815,465 which includes Common Area Maintenance(CAM.) E a) S2 The purchase is subject to a building inspection and any other necessary inspections to ensure that the CD Property can be utilized for its intended purposes; that the Property is in compliance with all applicable State and Federal environmental laws and free from any pollution or contamination;and that all structures a) and improvements on the Property are sound, and all systems, fixtures, and appliances are in good and safe operating condition. •— •— co Approval of the following request by the County Manager is subject to formal ratification by the Board of County Commissioners. If the decision by the County Manager is not ratified by the Board, the request shall be enforceable against Collier County only to the extent authorized by law in the absence of such ca ratification by the Board. En Staff will submit a future agenda item outlining the appraisal results and the total cost of acquisition for a) Board action. U FISCAL IMPACT: At this time, there is no fiscal impact associated with this agenda item. Purchase of the property, if approved by the Board at a later date, could be funded through a combination of existing FY 2017 budgeted appropriations and reserves. Revenues generated from the existing rental agreements would be recognized in the fund ultimately used for the purchase. Packet Pg. 304 044 09/13/2016 GROWTH MANAGEMENT: There is no Growth Management Impacts associated with this Executive Summary. LEGAL CONSIDERATIONS: This item has been reviewed by the County Attorney, is approved as to form and legality, and requires majority vote for approval. -MK a) RECOMMENDATION: That the Board of County Commissioners authorizes the County Manager to 9 make an offer to purchase the Courthouse Shadows Consolidated Holding, Inc. office building located at 3375 Tamiami Trail East and directs the County Manager to bring back the appraisal results and the total cost of acquisition for future consideration. PREPARED BY: Toni A. Mott,Manager-Real Property Section,Division of Facilities Management m ATTACHMENT(S1 1.Bail Bonds Building Exhibit r- N ca E E co d } C) X W Co M L a) E a) i.+ 0. a) U) U) O Ca r-. d E v cC Q Packet Pg. 305