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Item N2County of Monroe {r `° " rel BOARD OF COUNTY COMMISSIONERS n Mayor David Rice, District 4 The FlOnda Keys y m �� 11 Mayor Pro Tem Sylvia J. Murphy, District 5 Danny L. Kolhage, District 1 George Neugent, District 2 Heather Carruthers, District 3 County Commission Meeting September 19, 2018 Agenda Item Number: N2 Agenda Item Summary #4601 BULK ITEM: Yes DEPARTMENT: County Attorney's Office TIME APPROXIMATE: STAFF CONTACT: Patricia Eables (305) 292-3477 no AGENDA ITEM WORDING: Ratification of the Agreement for Sale and Purchase approved by the BOCC on May 16, 2018, to purchase two (2) parcels in the City of Layton for use as a portion of the property for a future replacement fire station in Layton, and approval of a Lease of the property to the owner/seller, Haring Properties, Inc., for up to three (3) years at a nominal fee pursuant to the purchase contract. ITEM BACKGROUND: The BOCC at its May 16, 2018, meeting approved the Agreement for Purchase and Sale of Mr. Haring's property (two parcels identified as RE# 00387620-000000 & RE#00387640-000000) which adjoins the three (3) parcels owned by the City of Layton on which the Layton City Hall and existing fire station are located. The parties at the time still needed to finalize certain contract dates and other minor terms, which have now become a part of the Agreement. The Mayor has now executed the Agreement and it has been attested by the Clerk. Since this is the purchase of real property, staff believes the revised Agreement should be ratified by the BOCC for clarification. So, this is only a ratification of the final revised Purchase Agreement which was previously approved by the BOCC. The contract includes a lease back provision to allow Mr. Haring to operate his business from the property at a nominal rent of $100.00 per year for up to three (3) years from the closing date which was August 30, 2018. There is a lease cancellation provision should the County be prepared to move forward with construction of the fire station sooner than three (3) years. One of the two parcels contains the Haring Real Estate and Insurance offices. The other is vacant. Mr. Haring and City of Layton officials approached the County about the possibility of purchasing the properties for future replacement of the Layton fire station after hurricane Irma damaged the buildings on the property. Two (2) appraisals were performed. After corrections for estimated damage, the values were set at $700,000 and $455,000. The average is $577,500. The two (2) Haring parcels comprise 18,750 SF. The three (3) City of Layton parcels total 18,750 SF. When combined with the Haring properties these would total 37,500 SF. This is the same size and approximate footprint of the property acquired in 2016 for the Cudjoe fire station. The City of Layton has indicated a willingness to deed the three (3) City properties to the County when the County is ready to construct a replacement fire station subject to the County's agreement to include space for a City Hall office and City Council chambers in any replacement structure. This latter agreement is not a part of the contract now being ratified. PREVIOUS RELEVANT BOCC ACTION: On May 16, 2018, the BOCC approved the purchase of the Property and authorized the Mayor to execute the final Agreement and approved the concept of the Lease, but a draft Lease was not attached. CONTRACT/AGREEMENT CHANGES: Ratification of new contract to purchase land & approval of Lease of land to Seller STAFF RECOMMENDATION: Ratification of the final Agreement for Purchase and Sale and Approval of the Lease. DOCUMENTATION: 05/16/2018 Agreement Lease Agreement (partially executed & legal stamped) 2018-02-20 Appraisal (Haring) 2017-11-2 1 appraisal 68300 Overseas Hwy, Layton FINANCIAL IMPACT: Effective Date: 16 May 2018 of the Purchase and Sale Agreement; 30 August 2018 effective date of the Lease for three (3) years. Expiration Date: N/A Total Dollar Value of Contract: $577,000 Total Cost to County: $577,000 Current Year Portion: $577,000 Budgeted: Yes Source of Funds: CPI: N/A Indirect Costs: Staff time Estimated Ongoing Costs Not Included in above dollar amounts: Revenue Producing: Yes Grant: N/A County Match: N/A Insurance Required: If yes, amount: $100/year Additional Details: There will be a rental fee of $100 per year for three (3) years if not earlier terminated. REVIEWED BY: Bob Shillinger Completed 09/04/2018 1:14 PM Kevin Wilson Completed 09/04/2018 3:26 PM Patricia Eables Completed 09/04/2018 4:25 PM James Callahan Completed 09/04/2018 4:32 PM Budget and Finance Completed 09/04/2018 4:34 PM Maria Slavik Completed 09/04/2018 6:12 PM Kathy Peters Completed 09/04/2018 7:00 PM Board of County Commissioners Pending 09/19/2018 9:00 AM Kevin Madok, CPA 6 .. f Clerk Of the Circuit Court & Comptroller c Monroe County, Florida DATE: August 3, 2018 TO: Patricia Eables, Assistant County Attorney County Attorney's Office FROM: Pamela G. Hancock, D.C. SUBJECT: May 16th BOCC Meeting Attached is an electronic copy of Item 04, Contract to purchase two (2) parcels in the City of Layton for use as a portion of the property for a future replacement fire station in Layton and authorization for the Mayor to execute the contract once signed by the owner, for your handling. Should you have any questions, please feel free to contact me at ext. 3130. Thank you. cc: Finance File KEY WEST 500 Whitehead Street Key West, Florida 33040 305-204-4641 MARATHON 3117 Overseas Highway Marathon, Florida 33050 305-230-6027 PLANTATION KEY 88820 Overseas Highway Plantation Key, Florida 33070 305-852-7145 PKlROTH BUILDIN 50 High Point Road Pigntation Key Flrrida 23 70 3 Packet Pg. 2178 AGREEMENT FOR SALE AND PURCHASE THIS AGREEMENT is made this I4�& day of�� , 2018, between MONROE COUNTY, FLORIDA, a political subdivisiorf' of the State of Florida, as "Purchaser" or "COUNTY", coo County Administrator, 1100 Simonton Street, Room 2-205, Key West, Florida 33040, and HARING PROPERTIES, INC., a Florida for -profit corporation, as "SELLER", whose mailing address is P. O. Box 838, Long Key, FL 33001- 0838. 1. In consideration of Ten Dollars ($10.00) in hand, paid by the COUNTY, the receipt of which is hereby acknowledged, the SELLER agrees to sell to the COUNTY and the COUNTY agrees to purchase from SELLER those certain lands upon the terms and conditions hereinafter set forth, and for the purchase price of FIVE HUNDRED AND SEVENTY-SEVEN THOUSAND DOLLARS AND NO/CENTS ($577,000.00) for all of the lands and other interests, which lands shall include all tenements, hereditaments, together with all water and other rights, easements, appurtenances, and any and all of the SELLER'S rights in or arising by reason of ownership thereunto belonging, owned by SELLER, situated and lying in the County of Monroe, State of Florida, more particularly described in paragraph 2 below and Exhibit "A" attached hereto. 2. The property which the SELLER agrees to sell and the Purchaser agrees to buy pursuant to the terms of this Agreement is that property situated at and commonly known as 68300 Overseas Highway, Layton, Long Key, Monroe County; Florida 33001, and more particularly described as: Lots 28 and 29, Block 3, Long Key Estates Second Addition (Alternate Key# 1475742, Parcel ID# 00387620-000000) and Lot 30, Block 3, Long Key Estates Second Addition (Alternate Key# 1475769, Parcel ID# 00387640-000000). 3. If the SELLER wishes to proceed with this transaction, the SELLER has until July 27, 20I8, to sign and return this Agreement to the County Administrator at: Mr. Roman Gastesi County Administrator 1100 Simonton Street, Suite 2-205 Key West, Florida J3040 Execution of this Agreement by SELLER shall serve to warranty that HARING PROPERTIES, INC., is the sole owner of the property, holds a certificate of good standing with the Florida Division of Corporations, Florida Department of State, and holds good and sufficient title to the property. 4. The SELLER agrees that it has full right, power and authority to convey, and that it will convey, to the COUNTY the fee simple title to the property, with legal and practical access thereto clear, free and unencumbered except as stated above. 5. SELLER shall convey a marketable title to the property to COUNTY subject only to the aforementioned liens, encumbrances, exceptions or qualifications set forth herein. Marketable Pare 1 of 9 title to the property shall be conveyed by Seller to the COUNTY by a good and sufficient statutory warranty deed determined according to applicable title standards adopted by authority of the Florida Bar and in accordance with law. a. The COUNTY shall have thirty (30) days from the date that the latter of both the SELLER and the COUNTY fully execute this Agreement (the "Effective Date") within which to examine title. If title to the property is found to be other than as portrayed by Seller and if such differences render title to the property unmarketable ("defects"), then the COUNTY shall, within the specified time period, notify SELLER in writing specifying the defect(s) and the SELLER will have thirty (30) days from receipt of notice of the defects) within which to remove the defect(s), failing which the COUNTY shall have the option (to be exercised within Five (5) days after the expiration of the thirty (30) day cure period) of either accepting the title as it then is or terminating this Agreement. If the COUNTY terminates this Agreement, the COUNTY and the SELLER shall release one another without liability to either party of all further obligations under this Agreement, except those which expressly survive the termination or expiration hereof. b. The SELLER will, if title is found defective and unmarketable, use diligent efforts to correct the defect(s) in title within the time provided therefore, excluding the bringing of necessary suits. 6. During the pendency of this Agreement, the SELLER further agrees not to do, or suffer others to do, any act by which the value or title to said lands may be diminished or encumbered. It is further agreed that any loss or damage occurring prior to the vesting of title to the property in the COUNTY by reasons of the unauthorized cutting or removal of products therefrom, or any other hazard, shall be borne by the SELLER. In the event any such loss or damage occurs, the COUNTY may refuse, without liability, to accept conveyance of said lands by written notice thereof to SELLER within ten (10) days of being notified of such loss or damage, in which event this Agreement shall thereupon terminate and the parties shall be released herefrom (except for these matters which expressly survive the termination hereof). 7. The SELLER further agrees that during the period covered by this Agreement the officers and accredited agents of the COUNTY shall have at all proper times and with prior notice to SELLER the right and privilege to enter upon said lands for the inspection and examination of said lands and the resources upon them. COUNTY agrees to pay and be responsible for paying all of the costs and expenses of conducting its inspection and examination of said land. The COUNTY'S agreement to pay such costs and expenses shall survive the termination hereof and/or the closing hereunder and the making of any payment hereunder. COUNTY shall make available to SELLER, upon request, copies of all reports, test results, and information derived from the above -described activities. 8. The COUNTY, at its own expense, shall have five (5) days from the Effective Date of this Agreement in which to conduct and conclude any and all inspections deemed to be necessary as determined in Buyer's sole discretion, including but not limited to a current Phase 1 Environmental Site Assessment (ESA) to determine the existence and extent, if any, of any Page 2of9 hazardous materials on the property. For the purposes of this Agreement, "hazardous materials" shall mean any hazardous or toxic substance, material or waste of any kind or any other substance which is regulated by any environmental law. The County waives its right to conduct a Phase II Environmental Site Assessment (ESA II). a. If the Phase I ESA identifies the presence of hazardous materials on the property, the COUNTY shall, within the five (5) day time period, notify SELLER in writing of such findings and it shall with such notice provide a copy of ESA to SELLER. b. The SELLER will have the right, but not the obligation to, within thirty (30) days from receipt of such notice at SELLER'S sole cost and expense, assess and clean-up the property to the extent necessary to bring the property into full compliance with any and all applicable federal, state or local laws. c. If the SELLER refuses to act or fails to act to bring the property into full compliance with any and all applicable federal, state, or local environmental laws within such specified time, this Agreement shall terminate and the COUNTY and the SELLER shall release one another of all further obligations under this Agreement except for those which expressly survive the termination hereof. 9. Closing shall take place on or before September 7, 2018 (the "Closing Date") and provided COUNTY does not cancel this Agreement on or prior to the expiration of the Inspection Period (as hereinafter defined), subject only to the extension of the Closing Date to allow for the cure of defect(s) in title or the remediation of environmental conditions on the property, each as above set forth. In the event that the Closing Date is extended to account for the cure periods related to title defect(s) or property contamination disclosed by the ESA, then the Closing Date shall be thirty (30) days after such cures are effected or thirty (30) days after the COUNTY waives the curing of title defect(s) (environmental conditions requiring remediation by SELLER not being waivable by the COUNTY) and elects to proceed with the transaction, whichever occurs earlier. Closing on the property may occur prior to that date if all contingencies in this Agreement have been met and both parties agree in writing to an earlier date for closing. 10. In consideration whereof, the COUNTY agrees that it will purchase all of said lands and other interests of SELLER therein at the closing at the purchase price of FIVE HUNDRED AND SEVENTY-SEVEN THOUSAND DOLLARS AND NOXENTS ($577,000.00). The COUNTY further agrees that, upon the preparation, execution and delivery of the deed, as hereinafter provided, it will cause to be paid to the SELLER the purchase price by a check drawn on the account of the COUNTY or by federal wire transfer of funds, whichever SELLER elects by giving written notice to COUNTY at least five (5) days prior to closing. 11. The COUNTY shall pay the following expenses associated with the conveyance of the property: deed recording fees, abstract fees, survey, the COUNTY's attorney's fees, the pro rats share of real property taxes and assessments allocable to the period subsequent to the vesting of title in the COUNTY, or the effective date of possession of such real property by the same, whichever is earlier, all costs of conducting its inspections of the property, including the ESA. Page 3 of 9 12. The SELLER shall pay the expenses of documentary stamps to be affixed to the deed, real estate commissions, if any, to SELLER'S broker only. SELLER and COUNTY shall split equally the title examination fee and Owner's Title Policy premium. SELLER shall be responsible for the removal and disposal of trash and debris from the property, if any. Full possession of the premises shall pass to the COUNTY as of the date payment is made to the SELLER subject only to the reservations and exceptions stated in this Agreement and any additional rental provisions for the SELLER to retain possession of the property pursuant to a Lease Agreement to be entered into between the parties. 13. SELLER will pay (i) the full amount of assessment liens that are certified, confirmed and ratified before closing and (ii) the amount of the last estimate of the assessment if any improvement is substantially completed as of the closing, but has not resulted in a lien before closing. COUNTY will pay all other amounts. If special assessments may be paid in installments, COUNTY will pay installments due after closing. 14. It is mutually understood and agreed that notice of acceptance of this Agreement shall be given to the SELLER no later than August 3, 2018, by mail addressed to the SELLER at the following address: HARING PROPERTIES, INC. P. O. Box 838 Long Key, FL 33001-0838 and shall be effective upon the date of execution by the Mayor of Monroe County, Florida, and shall be binding upon the SELLER and COUNTY provided that the notice is mailed by said date 15. As previously set forth, the Effective Date of this Agreement shall be that date when the last one of the SELLER and the COUNTY has signed this Agreement. 16. This Agreement may be executed in counterparts each of which will be deemed an original, but all of which will constitute one and the same instrument. Notwithstanding any provision of this Agreement to the contrary, the execution and delivery of this Agreement by or before the Effective Date is contingent upon approval by the Monroe County Board of County Commissioners by or before the Effective Date. 17. The following additional provisions ("additional provisions") shall be deemed to be an integral part of this Agreement. In the event of any conflict between the additional provisions and any of the other provisions, terms and conditions of this Agreement, the additional provisions shall control over those provisions, terms and conditions with which they are in conflict: a. COUNTY during the Title Review Period and at its option and at its expense, may have the property surveyed at COUNTY's expense. The survey will conform to the minimum requirements for land surveys as developed and adopted by the Florida Board of Land Surveyors of the Florida Department of Professional Regulation. If Page 4 of 9 the survey, certified by a registered Florida surveyor, shows any encroachment on the property or improvements located on the property encroaching on lands of others, or any other conditions which would render title to the property unmarketable, same shall be treated as a title defect(s) in accordance with Paragraph 5(a) and (b) above. SELLER will deliver to COUNTY a copy of the survey if existing presently in its possession within ten (10) days of the Effective Date. b. Within thirty (30) days from the Effective Date, COUNTY shall obtain a title insurance commitment issued by True Title Agency, Inc., a title insurance company qualified to do business in the State of Florida (hereinafter, the "Title Insurance Company"), agreeing to issue to COUNTY, upon recording of the deed conveying the property to COUNTY, an owner's title insurance policy in the amount of the purchase price, insuring the fee simple title in and to the property in the COUNTY, subject only to the exceptions which do not render title to the property unmarketable. The title insurance policy premium relating to the issuance of the COUNTY's Owner's Title Insurance Policy shall be a shared expense of the SELLER and COUNTY and shall be at the lowest promulgated rate available. c. Except as otherwise provided herein, the closing of title shall take place on the Closing Date, provided that COUNTY has not elected to cancel this Agreement on or before the expiration of the Inspection Period. The closing of title shall take place at 9 Ships Way, Big Pine Key, Florida 33043, or at such other place in Monroe County as COUNTY and SELLER may agree upon not later than seven (7) days prior to the Closing Date. The closing of title shall be accomplished "in escrow", in accordance with the customs and practices generally followed in Florida for such closings and may be a "mail away" closing. The Title Insurance Company, directly or through its agent, is hereby appointed to act as the closing and disbursing agent (hereinafter the "Closing Agent"). All closing documents in respect to the property and closing monies shall be delivered to the Closing Agent on or before the Closing Date, with instructions to record all recordable documents, update abstracts through such recording, and if no lien or encumbrance or other matter (other than those subject to which COUNTY has agreed to accept title to the property) is shown, to effect distribution of closing documents and closing funds promptly upon completion of updated examination of the title to the property or, if a lien or encumbrance or other matters (other than those subject to which COUNTY has agreed to accept on the property) shall be shown, to promptly notify COUNTY and SELLER and await further instruction, unless the provisions hereof otherwise direct. The Title Insurance Company shall insure against the "gap" under F.S. 627.7841, in which event the foregoing procedure shall not apply and the documents shall be recorded and funds disbursed on the Closing Date. d. If COUNTY defaults in its performance hereunder, the SELLER shall have the right to pursue those remedies which may be available to it in law and/or equity. If SELLER defaults in its performance hereunder, the COUNTY shall have the right to pursue those remedies which may be available to it in law and/or equity. Page 5 of 9 e. SELLER agrees, from time to time and at any time, including but not limited to the Closing Date, following a reasonable request therefor by COUNTY or the Title Insurance Company, to execute and deliver to COUNTY such further documents and instruments in form and substance reasonably satisfactory to the Title Insurance Company or COUNTY, as applicable, as may be necessary to confirm and/or effectuate the obligations of SELLER hereunder and the consummation of the transactions contemplated hereby. COUNTY agrees, from time to time and at any time, including but not limited to the Closing Date, following a request therefore by SELLER, or the Title Insurance Company, to execute and deliver to SELLER or the Title Insurance Company such further documents and instruments in form and substance reasonably satisfactory to SELLER or the Title Insurance Company, as applicable, as may be necessary to confirm and/or effectuate the obligations of County hereunder and the consummation of the transactions contemplated hereby. The provisions of this Article shall survive the closing of title. f. Notwithstanding anything contained herein to the contrary, the COUNTY may cancel this Agreement in its sole and absolute discretion at any time prior to 5:00 p.m. on that date which is thirty (30) days subsequent to the Effective Date ("Review Period"). During such Review Period, COUNTY shall have the right to inspect the property and all aspects thereof to determine if same is suitable to COUNTY in its sole and absolute discretion. Such inspections may include, without limitation, the preparation of, presentation to and approval by the Monroe County Board of County Commissioners of a business plan for the post -closing improvement and use of the property. In the event the COUNTY does not deliver written notice of its election to cancel this Agreement to SELLER and Escrow Agent on or before 5:00 p.m. on the last day of the Inspection Period, then, in that event and except as otherwise provided for in this Agreement, COUNTY shall be deemed to have waived the right of cancellation set forth in this paragraph and shall proceed with the sale and purchase transaction as provided herein. In the event the COUNTY does timely deliver written notice of its election to cancel this Agreement, then this Agreement shall be deemed cancelled and of no further force or effect whatsoever except for those provisions hereof which expressly survive the cancellation or termination hereof. COUNTY's failure or refusal to cancel this Agreement by the expiration of the Review Period shall be deemed to further evidence the approval hereof and the sale and purchase provided for herein by the MONROE COUNTY BOARD OF COUNTY COMMISSIONERS. g. COUNTY and SELLER agree that upon closing, the SELLER may lease the property described herein from the COUNTY at a nominal fee of One Hundred and 00/100 ($100.00) Dollars per year for up to three (3) years from the closing date pursuant to terms and conditions as set forth in a separate Lease Agreement to be executed by the parties. h. This Agreement integrates and supersedes all other agreements and understandings of every character of the parties and comprises the entire agreement between them. This Agreement may not be changed except in writing signed by both of the parties. Pase 6 of 9 Except as expressly provided for herein, no waiver of any rights or obligations hereunder shall be deemed to have occurred unless in writing signed by the parties against whom such waiver is asserted and no waiver shall be deemed a waiver of any other or subsequent rights or obligations. Words used herein in the singular shall include the plural and words in the masculine shall include words in the feminine or neuter gender where the text of this Agreement so requires. j. The terms, covenants and conditions of this Agreement shall apply to, be binding upon, inure to the benefit of, and be enforceable against the parties hereto and their respective successors and permitted assigns, and legal representatives. This Agreement shall not be assignable without the prior written consent of the other party hereto, which may be granted or withheld in such other parties' reasonable discretion. k. In connection with any litigation arising out of this Agreement, the prevailing party shall be entitled to recover all costs incurred, including reasonable attorney's fees and costs at all levels of proceedings. 1. This Agreement shall not become effective and binding until fully executed by both COUNTY and SELLER, the date the last party fully executed this Agreement being the "Effective Date" hereof. m. This Agreement shall be governed by and construed in accordance with the laws of the State of Florida. n. Any headings inserted at the beginning of any article are for convenience of reference only and shall not limit or otherwise affect or be used in the construction of any of the terms or provisions hereof. o. This Agreement shall not be construed more strongly against either party regardless of who is responsible for its preparation. p. All Exhibits attached hereto are incorporated herein by reference and made a part hereof as if fully rewritten or reproduced herein, including but not limited to Exhibit "A" attached hereto. IN WITNESS WHEREOF, the SELLER has hereunto signed this Agreement as of the date below written and the SELLER, for and in consideration of the Ten Dollars ($10.00) hereinabove acknowledged as received, has and does hereby grant unto the COUNTY or its authorized representative, or any other officer or agent of the COUNTY authorized to purchase said lands, the right to enter into this Agreement on May 16, 2018, and to purchase said lands as herein provided. Execution hereof by the COUNTY by or before August 3, 2018, shall be deemed to evidence approval hereof by the MONROE COUNTY BOARD OF COUNTY COMMISSIONERS. Page 7 of 9 THIS IS TO BE A LEGALLY BINDING CONTRACT. IF NOT FULLY UNDERSTOOD, SEEK THE ADVICE OF AN ATTORNEY PRIOR TO SIGNING. SELLER: HARING PRO ERTIES, INC. By: A Si nature P ' t lame Print Title PURCHASER: `COUNTY" BOARD OF COUNTY COMMISSIONERS OF MONROIDA By: Date: %/ i 0 7S7 Date: Q'rry. Z1' � r MO OE COUNTY ATTORNEY'S OFFICE PATRICIA EAGLES DATE: ASSISTANT CO Page 8 of 9 EXHIBIT "A" (Legal Description) That property situated at, and commonly known as, 68300 Overseas Highway, Layton, Long Key, Monroe County, Florida 33001, and more particularly described as: Lots 28 and 29, Block 3, Long Key Estates Second Addition (Alternate Key# 1475742, Parcel ID# 00387620-000000) and Lot 30, Block 3, Long Key Estates Second Addition (Alternate Key# 1475769, Parcel ID# 00387640-000000) according to the map or plat thereof, as recorded in Plat Book 4, Page 127, of the Public Records of Monroe County, Florida. Paee 9 of 9 LEASE AGREEMENT THIS LEASE AGREEMENT is made and entered into on this 301h day of August, 2018, by and between MONROE COUNTY, a political subdivision of the State of Florida, whose address is 1100 Simonton Street, Key West, Florida 33040 ("Lessor"/"County"), and HARING PROPERTIES, INC., a Florida for -profit corporation, ("Lessee"P'Seller"), whose mailing address is P. O. Box 838, Long Key, Florida 33001-0838. WHEREAS, the County has entered into an Agreement for Sale and Purchase dated May I6, 2018, ("Agreement"), with the Seller for the purchase of that certain property situated at and commonly known as 68300 Overseas Highway, Layton, Long Key, Monroe County, Florida 33001 ("Property"); and WHEREAS, the County and Seller expect to close on the sale of this Property on or before September 7, 2018, pursuant to the Agreement; and WHEREAS, the County is purchasing this property with the intention of building a Monroe County Fire Station on this Property in the future; and WHEREAS, as a condition of the sale, pursuant to Paragraph 17.g. of the Agreement, the County and Seller agreed that upon closing, the Seller may lease the Property from the County at a nominal fee per year for up to three (3) years from the closing date pursuant to the terms and conditions as set forth in this Lease Agreement; and WHEREAS, the Lessee desires to lease the Property in the interim time period to continue his current business until the County proceeds with development of the Property; and WHEREAS, the County is willing to lease the Property for the purposes of Lessee continuing his business operations until it is ready to proceed with construction of a new Fire Station or other such use by the County; NOW, THEREFORE, IN CONSIDERATION of the mutual promises and covenants set forth below, the parties agrees as follows: 1. Premises. The Lessor does hereby lease to Lessee and Lessee leases from the Lessor, the Property situated at and commonly known as 68300 Overseas Highway, Layton, Long Key, Monroe County, Florida 33001, and more particularly described as: Lots 28 and 29, Block 3, Long Key Estates Second Addition (Alternate Key# 1475742, Parcel ID# 00387620-000000) and Lot 30, Block 3, Long Key Estates Second Addition (Alternate Key# 1475769, Parcel ID# 00387640-000000), ("Premises"), as more particularly described on Exhibit "A" attached to this Lease and made a part hereof. 2. Term and Effective Date. Subject to and upon the terms and conditions as set forth herein, the term of this Lease shall be for up to three (3) years from commencement of this Lease, which said term shall commence on the closing date of the purchase of the Property by the County from Seller, which shall also be the effective date of this Lease. In the event that either party wishes to terminate this Lease prior to expiration of the three (3) year term, the Lessee will have one hundred eighty (180) days to vacate the Premises after receipt of such notice. 3. Extension Period. There are no extension periods anticipated as part of this Lease. In the event that Lessor chooses to offer an extension, Lessor will notify Lessee ninety (90) days prior to the expiration of the Lease, in writing, that it will consider a renewal of the Lease, and under what terms and conditions, for a mutually agreed upon time period, which will be set forth in a written amendment to this Lease. 4. Rent. Lessee shall pay the Lessor the sum of One Hundred and 00/100 ($100.00) Dollars per year, plus applicable sales tax, due on the first day of each year, including any extension periods, payable in advance and remitted to Monroe County Clerk's Office, 500 Whitehead Street, Key West, Florida 33040. No security deposit will be required. 5. Taxes. The Lessee shall pay all taxes and assessments, if any, including any sales or use tax, levied by any governmental agency with respect to the Lessee's operations on the Premises. 6. Utilities. Lessee shall be responsible for payment of all utilities on a monthly basis, including but not limited to the following as necessary, water, electric, sewer, solid waste, trash removal, telephone, internet service, cable, LP gas, insect and rodent extermination, or other such similar utilities, as needed by Lessee. 7. Insurance. Prior to commencement of work governed by this contract, Lessee shall obtain, at Lessee's own expense, insurance as specified in Exhibit `B" attached hereto and made a part hereof. Lessee shall provide to the Lessor, as satisfactory evidence of the required insurance, either (1) a Certificate of Insurance or, (2) a Certified copy of the actual insurance policy. The Lessor, at its FA sole option, has the right to request a certified copy of any or all insurance policies required by this Lease. All insurance policies must specify that they are not subject to cancellation, non -renewal, material change, or reduction in coverage unless a minimum of thirty (30) days prior notification is given to the Lessor by the insurer. The acceptance and/or approval of Lessee's insurance shall not be construed as relieving Lessee from any liability or obligation assumed under this contract or imposed by law. The Monroe County Board of County Commissioners, its employees and officials shall be included as "Additional Insured" on all policies, except for Worker's Compensation. If the insurance policies originally purchased which meet the requirements of this Lease are cancelled, terminated, or reduced in coverage, then the Lessee shall immediately substitute complying policies so that no gap in coverage occurs. Copies of current policy certificates shall be filed with the Monroe County Risk Department whenever acquired, amended, and annually during the term of this Lease. 8. Mechanic's Liens. The Lessee shall not permit any mechanic's lien or liens to be placed on the Premises or on improvements thereon. If a mechanic's Iien is filed, it shall be the sole responsibility of the Lessee or its officer, employee, agent, contractor, or other representative causing the lien to be filed to discharge the lien and to hold harmless and defend Monroe County against enforcement of such lien. Pursuant to Section 713.23, Fla. Stat., the liens authorized in Ch. 713, Fla. Stat. does not apply to the Lessor. 9. Records — Access and Audits. The Lessee shall maintain all books, records, and documents directly pertinent to performance under this Agreement in accordance with generally accepted accounting principles consistently applied and maintain such records for a period of four (4) years after termination of this Lease. The Lessor, its officers, employees, agents, and contractors shall have access to the Lessee's books, records, and documents related to this Lease upon request. The access to the inspection of such books, records, and documents by the Lessor shall occur at any reasonable time. 10. ReIationship of Parties. The Lessee is, and shall be an independent contractor and not an agent or servant of the Lessor. The Lessee shall exercise control, direction, and supervision over the means and manner that its personnel, agents, employees, and volunteers perform the work for which purpose this Lease is entered. The Lessee shall have no authority whatsoever to act on behalf and /or as agent for the Lessor in any promise, lease, or representation other than specifically provided for in this Lease. The Lessor shall at no time be legally responsible for any negligence on the part of the Lessee, its personnel, agents, employees, or volunteers resulting in either bodily or personal injury or property damage to any individual, property, or corporation. 11. Termination. This Lease may be terminated at the discretion of the Lessor in the following circumstances: k] A. Lessee fails to pay the rent when due; B. Lessee fails to obtain the insurance required under this Lease or allows the required insurance coverage to lapse or fall below the minimum required; C. Lessee otherwise breaches the terms of this Lease; D. Lessor may terminate this Lease upon giving sixty (60) days' prior written notice to the Lessee. E. Lessor may terminate this Lease prior to the expiration of the three (3) year term, without any penalty, in the event the County desires to earlier pursue development of the Property for the Fire Station or to meet some other County need, and in the event of such termination, Lessee shall have one hundred eighty (180) days to vacate the Premises after receipt of such notice. Unless the Lessor has accepted in writing a delay in performance of duties, the failure to perform said duties shall constitute a default under the terms of this Lease. In the case of default/breach, the County Administrator or his designee shall first give Lessee a written notification stating the default/breach and that Lessee has seven (7) days to correct the defaultlbreach. If the Lessee has not corrected the default/breach at the end of the seven (7) days, then the Lessor may terminate the Lease in its discretion. If it shall be necessary to employ the services of an attorney in order to enforce its rights under this Lease, the Lessor shall be entitled to reasonable attorney's fees. Waiver of a default in any particular month shall not bind the Lessor to forego the provisions of this paragraph and any subsequent default shall be grounds for termination. 12. Uses. The Premises shall be used solely for the purposes of conducting the Lessee's activities related to its business Operations known as Haring Properties, Inc. Lessee shall neither commit, nor permit waste of the demised Premises, shall use with care and shall not destroy or remove without consent of the Lessor, any fixtures or improvements of the Premises. Lessee shall not maintain, commit, or permit, the maintenance or commission of any nuisance on the Premises. Any damages resulting from misuse shall be borne by the Lessee. Lessee shall be permitted to erect signs on the Premises with prior permission of Lessor, including but not limited to a sign containing the name of Lessee's operations. The Lessor's decision on signage will be delivered no later than fifteen (15) days after the Lessee's request. Lessor retains the right to display signage for its own purposes provided it meets all legal requirements. Lessee shall not remove any interior or existing signs without Lessor's consent/permission. 13. Maintenance and Condition of the Premises. During the term of this Lease, Lessee is responsible for all maintenance and repairs, including major repairs. Lessee must keep the Premises in good order and condition. Lessee must promptly repair damage to the Premises. At the end of the term of this Lease, the Lessee must surrender the Premises to the Lessor in the same good order and condition as the Premises were on the commencement of the term, normal wear and tear excepted. The Lessee shall not commit waste on the Premises, nor maintain or permit a nuisance on the Premises. After termination or expiration of this Lease, the 4 Lessee shall pay the Lessor the cost of any repairs and clean-up necessary to restore the Premises to its condition at the commencement of the Lease. Lessee accepts the Property in "AS IS" condition, with full knowledge that the property has been determined to be "substantially damaged" and as such must be brought up to any and all current applicable Building Code provisions. The Lessee does hereby accept the leased Premises as now being in fit and tenantable condition for all purposes of the Lessee. If at any time during the term of the Lease, however, the property is determined by any lawful authority, including but not limited to, Layton Building Dept., FEMA, Dept. of Health, or Dept. of Justice for any ADA compliance standards, or for any other such related issues, to not be safe or lawfully habitable, the cost of compliance or repair will be borne by the Lessee or the Lease shall immediately terminate. 14. Assignment. Lessee may not assign this Lease or assign or subcontract any of its obligations under this Lease without the prior written approval of the Monroe County BOCC. All the obligations of this Lease will extend to and bind the legal representatives, successors, and assigns of the Lessee and the Lessor. 15. Subordination. This Lease is subordinate to the laws and regulations of the United States, the State of Florida, and Monroe County, whether in effect on commencement of this Lease or adopted after that date. 16. Licenses. Lessee shall be responsible for and provide all licenses required by all local, state, and federal agencies. 17. Premises to be Used for Lawful Purposes, It is expressly covenanted between the parties hereto that the Lessee will not use, suffer nor permit any person to use in any manner whatsoever the leasehold property, nor any portion thereof, for purposes calculated to injure the reputation of the leasehold property or of the neighboring property, nor for any purpose or use in violation of the laws of the United States, or of the State of Florida, or of the Ordinances of Monroe County, Florida, or of the Ordinances of any applicable municipality. Lessee will keep and save the Lessor forever harmless from any penalty or damage or charges imposed for any violation of any of said laws, whether occasioned by neglect of Lessee and Lessee will indemnify and save and keep harmless the Lessor against and from any loss, cost, damage, and expense arising out of any accident or other occurrence, causing injury to any person or property whomsoever or whatsoever, and due directly or indirectly to the use of the leasehold Premises or any part thereof by Lessee. 18. Limitation of Lessor's Liability. It is further agreed that in no case shall the Lessor herein be liable, under any express or implied covenants in the Lease, for any damages whatsoever to the Lessee beyond the rent reserved by the Lease accruing, for the act, or breach of covenant, for which damages may be sought to be recovered against said Lessor, and that in the event said Lessee shall be ousted from the possession of said property by reason of any defect in the title of said Lessor or said Lessor's authority to make this Lease, said Lessee shall R not be required to pay rent under this Lease while it is so deprived of said property, and that said Lessor shall not incur any liability as a result of such ouster. 19. No Waiver of Breach. It is further mutually covenanted and agreed between the parties hereto that no waiver of a breach of any of the covenants of this Lease shall be construed to be a waiver of any succeeding breach of the same covenant. 20. County's Right of Entry. The Lessor reserves the right hereunder to enter upon the Premises at any reasonable time during normal operating hours for the purpose of inspecting said Premises to determine whether Lessee has complied and is complying with the terms and conditions of this Lease. The Lessee hereby agrees to keep the Premises at all times in a clean and sanitary condition, and not to maintain or keep upon said Premises any properties or equipment not used in connection with the operation of said business, unless authorized by the Lessor to do so. 21. Responsibility for Property on Leasehold. All property of any kind that may be on the Premises during the term of this Lease shall be at the sole risk of the Lessee. The Lessor shall not be liable to the Lessee or any other person for any injury, loss, or damage to property or person on the Premises. 22. Damage to Leasehold. In the event that the demised Premises, or a major part thereof, are destroyed by fire, storm, or any other casualty, the Lessor at its option may forthwith repair the damage to the Premises and any structures Iocated thereon at its own cost and expense. The rental thereon shall cease until the completion of such repairs. If Lessor exercises its option to repair the Premises, Lessee agrees to assign its right to the insurance proceeds to the Lessor. 23. Rights Reserved. Rights not specifically granted to Lessee by this Lease are reserved to the Lessor. 24. Indemnification 1 Hold Harmless. The Lessee covenants and agrees to defend, indemnify and hold harmless Monroe County Board of County Commissioners, and its elected and appointed officers, officials, agents, servants, and employees from any and all claims, demands, or causes of action for bodily injury (including death), personal injury, and property damage (including property owned by Monroe County) and any other losses, damages, costs, penalties, and expenses (including attorney's fees) which arise out of, in connection with, or by reason of the Lessee utilizing the property governed by this lease/rental agreement. The extent of liability is in no way limited to, reduced, or lessened by the insurance requirements contained elsewhere within this agreement. 25. Governing Law, Venue, and Interpretation: This Lease shall be governed by and construed in accordance with the laws of the State of Florida applicable to contracts made and to be performed entirely in the State. In the event that any cause of action or administrative proceeding is instituted for the enforcement or interpretation of this Lease, the Lessor and Lessee agree that venue will lie in the appropriate court or before the appropriate administrative body in Monroe County, Florida. 0 The Lessor and Lessee agree that, in the event of conflicting interpretations of the terms or a term of this Lease by or between any of them the issue shall be submitted to mediation prior to the institution of any other administrative or legal proceeding. 26. Entire Agreement. This writing embodies the entire agreement and understanding between the parties hereto, and there are no other agreements and understandings, oral or written, with reference to the subject matter hereof that are not merged herein and superseded hereby. Any amendment to this Lease shall be in writing, approved by the Board of County Commissioners, and signed by both parties before it becomes effective. 27. Severability. If any term, covenant, condition, or provision of this Lease (or the application thereof to any circumstance or person) shall be declared invalid or unenforceable to any extent by a court of competent jurisdiction, the remaining terms, covenants, conditions, and provisions of this Lease, shall not be affected thereby; and each remaining term, covenant, condition, and provision of this Lease shall be valid and shall be enforceable to the fullest extent permitted by law unless the enforcement of the remaining terms, covenants, conditions, and provisions of this Lease would prevent the accomplishment of the original intent of this Lease. The Lessor and Lessee agree to reform the Lease to replace any stricken provision with a valid provision that comes as close as possible to the intent of the stricken provision. 28. Attorney's Fees and Costs. The Lessor and Lessee agree that in the event any cause of action or administrative proceeding is initiated or defended by any party relative to the enforcement or interpretation of this Agreement, the prevailing party shall be entitled to reasonable attorney's fees, court costs, investigative, and out-of-pocket expenses, as an award against the non -prevailing party, and shall include attorney's fees, courts costs, investigative, and out-of-pocket expenses in appellate proceedings. Mediation proceedings initiated and conducted pursuant to this Lease shall be in accordance with the Florida Rules of Civil Procedure and usual and customary procedures required by the circuit court of Monroe County. 29. Binding Effect. The terms, covenants, conditions, and provisions of this Lease shall bind and inure to the benefit of the Lessor and Lessee and their respective legal representatives, successors, and assigns. 30. Authority. Each party represents and warrants to the other that the execution, delivery and performance of this Lease have been duly authorized by all necessary County and corporate action, as required by law. 31. Claims for Federal or State Aid. Lessor and Lessee agree that each shall be, and is, empowered to apply for, seek, and obtain federal and state funds to further the purpose of this Lease; provided that all applications, requests, grant proposals, and funding solicitations shall be approved by each party prior to submission. 32. Adiudication of Disputes or Disagreements. Lessor and Lessee agree that all disputes and disagreements shall be attempted to be resolved by meet and confer sessions 7 between representatives of each of the parties. If the issue or issues are still not resolved to the satisfaction of the parties, then any party shall have the right to seek such relief or remedy as may be provided by this Lease or by Florida law. 33. Cooperation. In the event any administrative or legal proceeding is instituted against either party relating to the formation, execution, performance, or breach of this Lease, Lessor and Lessee agree to participate, to the extent required by the other party, in all proceedings, hearings, processes, meetings, and other activities related to the substance of this Lease or provision of the services under this Lease. Lessor and Lessee specifically agree that no party to this Lease shall be required to enter into any arbitration proceedings related to this Lease. 34. Nondiscrimination. Lessor and Lessee agree that there will be no discrimination against any person, and it is expressly understood that upon a determination by a court of competent jurisdiction that discrimination has occurred, this Lease automatically terminates without any further action on the part of any party, effective the date of the court order. Lessor and Lessee agree to comply with all Federal and Florida statutes, and all local ordinances, as applicable, relating to nondiscrimination. These include but are not limited to: 1) Title VII of the Civil Rights Act of 1964 (PL 88-352) which prohibits discrimination in employment on the basis of race, color, religion, sex, and national origin; 2) Title IX of the Education Amendment of 1972, as amended (20 USC ss. 1681-1683, and 1685-1686), which prohibits discrimination on the basis of sex; 3) Section 504 of the Rehabilitation Act of 1973, as amended (20 USC S. 794), which prohibits discrimination on the basis of handicaps; 4) The Age Discrimination Act of 1975, as amended (42 USC ss. 6101- 6107) which prohibits discrimination on the basis of age; 5) The Drug Abuse Office and Treatment Act of 1972 (PL 92-255), as amended, relating to nondiscrimination on the basis of drug abuse; 6) The Comprehensive Alcohol Abuse and Alcoholism Prevention, Treatment and Rehabilitation Act of 1970 (PL 91-616), as amended, relating to nondiscrimination on the basis of alcohol abuse or alcoholism; 7) The Public Health Service Act of 1912, ss. 523 and 527 (42 USC ss. 690dd-3 and 290ee-3), as amended, relating to confidentiality of alcohol and drug abuse patient records; 8) Title VIII of the Civil Rights Act of 1968 (42 USC s.3601 et seq.), as amended, relating to nondiscrimination in the sale, rental or financing of housing; 9) The Americans with Disabilities Act of 1990 (42 USC s. 12101 Note), as may be amended from time to time, relating to nondiscrimination on the basis of disability; 10) Monroe County Code, Chapter 14, Article II, which prohibits discrimination on the basis of race, color, sex, religion, disability, national origin, ancestry, sexual orientation, gender identity or expression, familial status or age; 11) Any other nondiscrimination provisions in any Federal or state statutes which may apply to the parties to, or the subject matter of, this Lease. 35. Covenant of No Interest. Lessor and Lessee covenant that neither presently has any interest, and shall not acquire any interest, which would conflict in any manner or degree with its performance under this Lease, and that the only interest of each is to perform and receive benefits as recited in this Lease. 36. Code of Ethics. Lessor agrees that officers and employees of the Lessor recognize and will be required to comply with the standards of conduct for public officers and employees as delineated in Section 112.313, Florida Statutes, regarding, but not limited to, 8 solicitation or acceptance of gifts; doing business with one's agency; unauthorized compensation; misuse of public position, conflicting employment or contractual relationship; and disclosure or use of certain information. 37. No Sol icitation/Payment. The Lessor and Lessee warrant that, in respect to itself, it has neither employed nor retained any company or person, other than a bona fide employee working solely for it, to solicit or secure this Lease and that it has not paid or agreed to pay any person, company, corporation, individual, or firm, other than a bona fide employee working solely for it, any fee, commission, percentage, gift, or other consideration contingent upon or resulting from the award or making of this Lease. For the breach or violation of this provision, the Lessee agrees that the Lessor shall have the right to terminate this Lease without liability and, at its discretion, to offset from monies owed, or otherwise recover, the full amount of such fee, commission, percentage, gift, or consideration. 38. Public Access. The Lessor and Lessee shall allow and permit reasonable access to, and inspection of, all documents, papers, letters or other materials in its possession or under its control subject to the provisions of Chapter 119, Florida Statutes, and made or received by the Lessor and Lessee in conjunction with this Lease; and the Lessor shall have the right to unilaterally cancel this Lease upon violation of this provision by Lessee. 39. Non -Waiver of Immunity. Notwithstanding the provisions of Chapter 768.28, Florida Statutes, the participation of the Lessor and Lessee in this Lease and the acquisition of any commercial liability insurance coverage, self-insurance coverage, or local government liability insurance pool coverage shall not be deemed a waiver of immunity to the extent of liability coverage, nor shall any contract entered into by the Lessor be required to contain any provision for waiver. 40. Privileges and Immunities. All of the privileges and immunities from liability, exemptions from laws, ordinances, and rules and pensions and relief, disability, workers' compensation, and other benefits which apply to the activity of officers, agents, or employees of any public agents or employees of the Lessor, when performing their respective functions under this Lease within the territorial limits of the County shall apply to the same degree and extent to the performance of such functions and duties of such officers, agents, volunteers, or employees outside the territorial limits of the County. 41. Le2al ®blipations and Responsibilities. Non -Delegation of Constitutional or Statutory Duties. This Lease is not intended to, nor shall it be construed as, relieving any participating entity from any obligation or responsibility imposed upon the entity by law except to the extent of actual and timely performance thereof by any participating entity, in which case the performance may be offered in satisfaction of the obligation or responsibility. Further, this Lease is not intended to, nor shall it be construed as, authorizing the delegation of the constitutional or statutory duties of the Lessor, except to the extent permitted by the Florida constitution, state statute, and case law. 42. Non -Reliance by Non -Parties. No person or entity shall be entitled to rely upon the terms, or any of them, of this Lease to enforce or attempt to enforce any third -party claim or 9 entitlement to or benefit of any service or program contemplated hereunder, and the Lessor and Lessee agree that neither the Lessor nor the Lessee or any agent, officer, or employee of either shall have the authority to inform, counsel, or otherwise indicate that any particular individual or group of individuals, entity or entities, have entitlements or benefits under this Lease separate and apart, inferior to, or superior to the community in general or for the purposes contemplated in this Lease. 43. Attestations. Lessee agrees to execute such documents as the Lessor may reasonably require, including a Public Entity Crime Statement, an Ethics Statement, and a Drug - Free Workplace Statement. 44. No Personal Liability. No covenant or agreement contained herein shall be deemed to be a covenant or agreement of any member, officer, agent, or employee of Monroe County in his or her individual capacity, and no member, officer, agent, or employee of Monroe County shall be liable personally on this Lease or be subject to any personal liability or accountability by reason of the execution of this Lease. 45. Execution in Counterparts,. This Lease may be executed in any number of counterparts, each of which shall be regarded as an original, all of which taken together shall constitute one and the same instrument and any of the parties hereto may execute this Lease by signing any such counterpart. 46. Section Headings. Section headings have been inserted in this Lease as a matter of convenience of reference only, and it is agreed that such section headings are not a part of this Lease and will not be used in the interpretation of any provision of this Lease. 47. Cancellation of Agreement. Lessor may cancel this Lease Agreement by giving Lessee sixty (60) days' advanced written notice upon the happening of any of the following events: the appointment of a receiver of Lessee's assets; the divesting of Lessee's leasehold estate by other operation of law; the abandonment by Lessee of the premises for a period of sixty (60) days. By the end of the sixty (60) days' notice period, Lessee shall have vacated the premises and the Lessor may immediately re-enter and take possession of same. If it is necessary to employ the services of an attorney in order to enforce the Lessor's rights under this paragraph, the Lessor shall be entitled to reasonable attorney's fees. 48. Mutual Review. This Lease has been carefully reviewed by Lessee and Lessor; therefore this Lease is not to be construed against either party on the basis of authorship. 49. Notices. Any written notice or correspondence given pursuant to this Lease shall be sent by United States Mail, certified, return receipt requested, or by courier with proof of delivery. Notice shall be sent to the following persons: LESSOR: County Administrator Monroe County 1100 Simonton Street LESSEE: Philip R. Haring Haring Properties, Inc. P. O. Box 838 10 Room 2-205 Key West, Florida 33040 Long Key, Florida 33001-0838 IN WITNESS WHEREOF, the parties hereto have set their hands and seals the day and year first above written. (SEAL) ATTEST: KEVIN MADOK, CLERK LESSOR: BOARD OF COUNTY COMMISSIONERS OF MONROE COUNTY, FLORIDA By: By: Deputy Cleric Mayor David Rice LESSEE: HARING PROPERTIES, INC. MONROE COUNTY AWORNEWS OFFICE ... AEPROVED AS TO Eff _ } PATRCIA EA13LES ASSISTANT COWU ATrWNEY EXHIBIT "A" Legal Description of Premises I IWIV I I 6319fism Tliat property situated at, and commonly known as, 68300 Overseas Highway, Layton, Long Key, Monroe County, Florida 33001, and more particularly described as: W-1 ri• 1 MM accordinu to (lie map or plat fliereof, as recorded in Plat t� Book 4, Page 127, of" the Public Records of Monroe County, Florida. N" EXHIBIT "B" Insurance Requirements 2015 edition MONROE COUNTY, FLORIDA RISK MANAGEMENT POLICY AND PROCEDURES CONTRACT ADMINISTRATION MANUAL General Insurance Requirements for Organizations/Individuals Leasing County -Owned Property Prior to the Organization or Individual taking possession of the property owned by the County, or commencing its concessionaire operations, the Organization/Individual shall obtain, at histher own expense, insurance as specified in the attached schedules, which are made part of this lease/rental agreement. The Organization/Individual will not be permitted to occupy or use the property until satisfactory evidence of the required insurance has been furnished to the County as specified below. The Organization/Individual shall maintain the required insurance throughout the entire term of this leaselrental agreement and any extensions specified in the attached schedules. Failure to comply with this provision may result in the immediate termination of the leaselrental agreement and the return of all property owned by the County. The Organiation/Individual will be held responsible for all deductibles and self insured retentions that may be contained in the Organization/individual's Insurance policies. The Organization/Individual shall provide, to the County, as satisfactory evidence of the required insurance, either. • Certificate of Insurance or • A Certified copy of the actual insurance policy. The County, at its sole option, has the right to request a certified copy of any or all insurance policies required by this contract. All insurance policies must specify that they are not subject to cancellation, non -renewal, material change, or reduction in coverage unless a minimum of thirty (30) days prior notification is given to the County by the insurer. The acceptance and/or approval of the Organization/Individual's insurance shall not be construed as relieving the Organization/Individual from any liability or obligation assumed under this contract or imposed by law. The Monroe County Board of County Commissioners, will be included as "Additional Insured" on all policies. They will also be named as "Loss Payee" with respect to Fire Legal Exposure. Administrative Instruction 7500.6 31 2015 Cilition Any deviations from these General Insurance Requirements must be requested in writing on the County prepared form entitled "Request for Waiver of Insurance Requirements" and approved by Monroe County Risk Management. Administrative Instruction 7500,6 32 GENERAL LIABILITY INSURANCE REQUIREMENTS FOR LEASE/RENTAL OF PROPERTY OWNED BY THE COUNTY BETWEEN MONROE COUNTY, FLORIDA AND 4 4 1150111"ININN100 14114"Ll, I Lqq am01i'm ror-1 W V1 11 its1U[-q_ Premises Operations Products and Completed Operations Blanket Contractual Liability Personal Injury Liability Fire Legal Liability (with limits equal to the fair market value of the leased property.) The minimum limits acceptable shall be: RIS61 M10 ITITS "m 1 ml- IM-32MMEF An Occurrence Form policy is preferred. If coverage is provided on a Claims Made policy, its a' to OW111 r4 F.W"IRMTP rLtWJ"MRPMJ.%-,.-J.-TW all policies issued to satisry the above requirements. Administrative Insuuction 7500.6 34 ALL RISK PROPERTY INSURANCE REQUIREMENTS FOR LEASESIRENTALS OF COUNTY -OWNED PROPERTY BETWEEN MONROE COUNTY, FLORIDA AND Prior to the Organization/Individual taking possession of the property govemed by this lease/rcntal agreement, the Organization/Individual shall obtain All Risk Property Insurance (to include the perils of Flood and Wind) with limits no less than the Replacement Cost Value of the property leased or rented. Coverage shall be maintained throughout the life of the Leasc/Rental Agreement and include, as a minimum, liability coverage for The Viryffxe Ciuxty Viarl,-if Ci Loss Payee on all policies issued to satisfy the above requirements. Administrative Instruction 7500.6 3144 \nrtvslde prise, Ste 201 Key West, FT 33(40 € Rear. (34)5) 296-4563 1iN (305)922-2117 Website: th—kersapprads;vls.esonv F.-tli:vil: 1 iwt uaila-key wvtviiv.aisail�a^runt February 20, 2018 Mr. Kevin G. Wilson, P.E. Assistant County Administrator Monroe County, FL (Florida Keys) 102050 Overseas Highway Key Largo, Florida 33037 Appraisal Report: 68300 Overseas Highway Layton, Long Key, Monroe County, FL 33001 P.O.458843 Our File No.: 112-18 Dear Mr. Wilson: I performed an appraisal assignment and estimate of the "As Is " Market Value of the Fee Simple Estate of the subject property commonly known, as 68300 Overseas Highway, Layton, Long Key, Florida 33001, as of Februaryl2, 2018. The reader is advised to review the Scope of Work section within this report. The subject property is located on the Overseas Highway, within the City of Layton at approximately mile market 68 on Long Key. The subject site consists of three contiguous 50 feet by 125 feet commercial lots. Lots 28 and 29 are improved, while Lot 30 is vacant. The site is an interior rectangular parcel with a total of 150 feet of frontage along the southerly side of the Overseas Highway extending southerly, approximately 125 feet in depth. Thus, the overall subject site consists of 18,750 square feet or 0.43 acres of upland area. The two westerly lots are improved with a one-story, CBS/wood frame office and residential mixed -use structure containing a gross building area of 2,625 square feet. In addition, there is a 358 square foot carport, plus a 61 square feet attached storage shed. The owner -occupied subj ect has been utilized as the Haring Insurance Agency's Office, plus a two to three bedroom non -transient residence. Per the Monroe County Property Appraiser's record the subject property was built in 1964. Ipersonally inspected the subject building and site improvements. The overall site area and dimensions were referenced from a Monroe County Property Appraiser's records, as a recent survey was not available. The building dimensions were based on my on site measurements. Mr. Kevin G. Wilson, P.E. Assistant County Administrator Monroe County, FL (Florida Keys) February 20, 2018 Page 2 The subject property was impacted by Hurricane Irma, which made landfall on September 10, 2017. The subject building was flooded by storm surge with much of the finishes removed from four feet or less down. The City of Layton has determined that the substantial damage was approximately $72,000. I have conservatively considered a Cost to Cure adjustment of $80,000, which has been deducted herein, in order to arrive at the "As Is" Market Value. This report contains the results of my investigation and analysis made in order to furnish an estimate of the "As Is " Market Value of the Fee Simple Estate of the Subject Property. The Fee Simple Estate is the unencumbered value of the subject property; basically, market rents and terms are considered with no regard to existing leases and terms. The subject property consists of an owner occupied property, which is not encumbered by any long term leases. Therefore, only the Fee Simple Interest is included herein. However, the reader is cautioned that a title search was not made; thus, no other encumbrances are considered herein. Market Value is defined as the most probable price in cash (or its equivalency) for which the appraised property will sell in a competitive market under all conditions requisite to a fair sale. Market value assumes a normal or reasonable time for exposure on the open market. Based on market analysis and research, it is my opinion that the "As Is " Market Value of the Fee Simple Estate of the Subject Property, commonly known as 68300 Overseas Highway, Layton, Long Key, Florida, 33001, subject to, definitions, assumptions and limiting conditions, as of Februaryl2, 2018 is: SEVEN HUNDRED THOUSAND DOLLARS ($700,000) The "As Is" Market Value for the subject property considers no personal property. This Appraisal Report is intended to comply with the reporting requirements set forth under Standard Rule 2-2(a) of the Uniform Standards of Professional Appraisal Practice. As such, it might not include full discussions of the data, reasoning, and analyses that were used in the appraisal process to develop the appraiser's opinion of value. Supporting documentation concerning the data, reasoning, and analyses is retained in the appraiser's file. The information contained in this report is specific to the needs of the client and for the intended use stated in this report. This confidential report is prepared for the sole use and benefit of the Monroe County Board of County Commissioners, is based, in part, upon documents, writings, and information owned and possessed by the client, Monroe County. This report is provided for informational purposes only to third parties authorized to receive it. Appraisal Company of Key West assumes no responsibility if this report is used in any other manner. Mr. Kevin G. Wilson, P.E. Assistant County Administrator Monroe County, FL (Florida Keys) February 20, 2018 Page 3 If you have any questions regarding this appraisal report, please feel free to contact me. Thank you for giving me the opportunity to provide this service for you. This transmittal letter must remain attached to the report, which contains 82 pages including related exhibits, in order for the value opinion set forth to be considered valid. Respectfully submitted, S James E. Wilson, MRICS, President State -certified general real estate appraiser RZ 2164 email: LLLi r L,,i-kew iuu'�� i�.cozn Report Attached: UColin-18\112-18\Comm-112-18.wpd Appraisal Report 68300 Overseas Highway, Layton , FL TABLE OF CONTENTS COVER PAGE LETTER OF TRANSMITTAL SUMMARY OF FACTS AND CONCLUSIONS ........................................ 3 SUBJECT PROPERTY PHOTOGRAPHS ............................................. 6 ASSUMPTIONS AND LIMITING CONDITIONS ..................................... 13 STATEMAP...................................................................16 FLORIDA KEYS MAP...........................................................17 LOCATION MAP...............................................................18 AERIAL PLAT MAP............................................................20 PURPOSE & INTENDED USE OF THE APPRAISAL .................................. 22 DEFINITIONS..................................................................22 PROPERTY RIGHTS APPRAISED & DEFINITIONS .................................. 23 SUBJECT'S MARKET AREA (NEIGHBORHOOD) ANALYSIS ......................... 24 DEMOGRAPHICS..............................................................30 MARKETING TIME / EXPOSURE TIME ........................................... 32 OWNERSHIP /SALES HISTORY / HISTORY OF THE SUBJECT ........................ 32 ZONING......................................................................32 REAL ESTATE TAX AND ASSESSMENT AND BURDEN ............................. 34 Appraisal Company of Key West Page 1 Appraisal Report 68300 Overseas Highway, Layton , FL TABLE OF CONTENTS (Continued) DESCRIPTION OF THE SUBJECT PROPERTY ...................................... 39 FLOODMAP...................................................................41 BUILDING SKETCH............................................................45 HIGHEST AND BEST USE ....................................................... 46 SCOPE OF WORK..............................................................48 COST APPROACH..............................................................50 THE INCOME APPROACH....................................................... 51 THE SALES COMPARISON APPROACH ........................................... 64 RECONCILIATION AND CONCLUSION ........................................... 75 CERTIFICATE OF APPRAISAL ................................................... 76 ADDENDA QUALIFICATIONS OF APPRAISER JAMES E. WILSON ........................ 78 PURCHASE ORDER ...................................................... 82 Appraisal Company of Key West Page 2 Appraisal Report 68300 Overseas Highway, Layton , FL SUMMARY OF FACTS AND CONCLUSIONS Subject Property: 68300 Overseas Highway, Gulf Layton, Long Key, Monroe County, Florida 33001 Property Type: Mixed Commercial Office/Residential/Storage Use Property Overall Land Size: 1 1 00387620-000000 1475742 1 68300 Overseas Hwy., Layton, FL 33001 100.001 12,5001 0.29 2 ' 00387640-0000001 1475769 ' Lot 30 Overseas Hwy., Layton, FL 33001 ' 50.00' 6,250' 0.14 Totals: 150.00 18,7501 0.43 Zoning: "C", Commercial zoning district, City of Layton, Florida Flood Zone: FEMA Map 12087C1719K February 18, 2005 Zone: AE (Elevation 9 Feet) Improvement Site: (t t ., � � ✓ ;�t i 4 �, � i r r t t t Scow 'I�ti�lt' YJ'se' l Type` C©n�trucht�n ,I�?t. taw I�?t.< Use y1-Story CBS/Frame 419 1964 ---1 ---Office/Resid_Mixed Totals: --2,6251 -----��------1---- 2,625 419 Highest and Best Use: As Improved for Mixed Commercial/Residential Use Appraisal Company of Key West Page 3 El Appraisal Report 68300 Overseas Highway, Layton , FL Date of Site Visit Valuation Date: Report Date: Value Indications: Exposure Time: Extraordinary Assumptions: Februaryl2, 2018 Februaryl2, 2018 February 21, 2018 Cost Approach: Not -Applicable Income Approach: $710,000 Sales Comparison Approach: $690,000 "As Is" Market Value of the Fee Simple Interest as of February 12, 2018 (Rounded) $700,000 6 to 18 Months based on a list price within 5 percent of appraised value and based on stable economic conditions. None Hypothetical Assumptions: None Appraisal Company of Key West Page 4 Appraisal Report 68300 Overseas Highway, Layton , FL APPRAISAL REPORT This is an appraisal report which is intended to comply with the reporting requirements set forth under Standard Rule 2-2(a) of the Uniform Standards of Professional Appraisal Practice for an appraisal report. As such, it might not include full discussions of the data, reasoning, and analyses that were used in the appraisal process to develop the appraiser's opinion of value. Supporting documentation concerning the data, reasoning, and analyses is retained in the appraisers' file. The information contained in this report is specific to the needs of the client and for the intended use stated in this report. The appraisers are not responsible for unauthorized use of this report. The reader is referred to the Scope of Work section of this report. CLIENT: Mr. Kevin G. Wilson, P.E. Assistant County Administrator Monroe County, FL (Florida Keys) 102050 Overseas Highway Key Largo, FL 33037 OWNER OF Haring Properties, Inc. RECORD: P.O. Box 838 Long Key, Florida 33001 APPRAISER: James E. Wilson, MRICS, President State -certified general real estate appraiser RZ 2164 SUBJECT: 68300 Overseas Highway Layton, Long Key, Monroe County, Florida 33001 Appraisal Company of Key West Page 5 222� Ra 2e o z 6 J00 Uv � e * Hi &»a,fa t g,Ff SUBJECT PROPERTY Street View Looking Westerly Along Overseas HighwU Street View Looking Easterly Along the Overseas /ice& Appraisal Company oKey West Page 222� Ra 2e o z 6 J00 Uv � e * Hi &»a,fa t g,Ff SUBJECT PROPERTY Front View of the SubjelProperty Looking SoU§e «el Front View of the SubjelProperty Looking SoU§we e6& Appraisal Company oKey West Page 222� Ra 2e o z 6 J00 Uv � e * Hi &»a,fa t g,Ff SUBJECT PROPERTY Sid View of the Sub]elProperty Looking Wet 6/ View of Subject Vacal£m Looking Northwesterly Appraisal Company oKey West Page 222� Ra 2e o z 6 J00 Uv � e * Hi &»a,fa t g,Ff SUBJECT PROPERTY View of Su ]e tVacant Lot Looking SoU§el Interior of Carol Appraisal Company oKey West Page 222� Ra 2e o z 6 J00 Uv � e * Hi &»a,fa t g,Ff SUBJECT PROPERTY interior of Qaa c Interior View of Kitchen Appraisal Company oKey West Page 10 222� Ra 2e o z 6 J00 Uv � e * Hi &»a,fa t g,Ff SUBJECT PROPERTY Interior View of Kitchen hiedo View of OflceW66nz Are Appraisal Company oKey West Page II Appraisal Report 68300 Overseas Highway, Layton , FL SUBJECT PROPERTY Interior View of Private Office Interior View of Office Area Appraisal Company of Key West Page 12 Appraisal Report 68300 Overseas Highway, Layton , FL ASSUMPTIONS AND LIMITING CONDITIONS This Appraisal Report is intended to comply with the reporting requirements set forth under Standard Rule 2-2(a) of the Uniform Standards of Professional Appraisal Practice. As such, it might not include full discussions of the data, reasoning, and analyses that were used in the appraisal process to develop the appraiser's opinion of value. Supporting documentation concerning the data, reasoning, and analyses is retained in the appraiser's file. The information contained in this report is specific to the needs of the client and for the intended use stated in this report. This confidential report is prepared for the sole use and benefit of Monroe County Board of County Commissioners, is based, in part, upon documents, writings, and information owned and possessed by the client, Monroe County. This report is provided for informational purposes only to third parties authorized to receive it. Appraisal Company of Key West assumes no responsibility if this report is used in any other manner. THIS VALUATION IS CONTINGENT UPON THE FOLLOWING CONDITIONS: This appraisal report has been prepared to comply with my understanding of the requirements of the Uniform Standards of Professional Appraisal Practice. Market Value is defined as the most probable price in cash (or its equivalency) for which the appraised property will sell in a competitive market under all conditions requisite to a fair sale. Market value assumes a normal or reasonable time for exposure on the open market. A survey of the subj ect property was not available. Thus, the appraiser could not verify if there are any easements or encroachments. No responsibility is taken by this office for the accuracy or in regard to any questions on the nature of encroachments, encumbrances, or dissimilarities in measurement. Any maps or plats reproduced and included in this report are intended only for the purpose of showing spatial relationships. They are not measured surveys nor measured maps, and no responsibility for cartographic or surveying errors is assumed. The appraiser reserves the right to change the final indicated value herein, if subsequent surveys are made available and any further encroachments and/or easements area noted. The subj ect property was impacted by Hurricane Irma, which made landfall on September 10, 2017. The subject building was flooded by storm surge with much of the finishes removed from four feet or less down. The City of Layton has determined that the substantial damage was approximately $72,000. I have conservatively considered a Cost to Cure adjustment of $80,000, which has been deducted herein, in order to arrive at the "As Is" Market Value. Appraisal Company of Key West Page 13 Appraisal Report 68300 Overseas Highway, Layton , FL This appraisal is to be used in whole and not in part, in particular, no part of the contents of this report shall be conveyed to the public through advertising, public relations, news, sales or other media, without the written consent and approval of the author, particularly as to valuation conclusions, the identity of the appraiser or firm with which he or she is connected. No responsibility is assumed by the Appraisers for matters which are of legal nature, nor is any opinion on the title rendered herewith. Good title is assumed as a title search was not made available. The property has been appraised as though free of liens and encumbrances, except as herein described. Delinquent charges for solid waste collection, stormwater, or central sewage system or other liens against the subject property have not been considered in the valuation contained herein as a title search was not made available or conducted by the appraiser. The management of the property is assumed to be competent and the ownership in responsible hands. The management of the property is assumed to be competent and the ownership in responsible hands The Appraiser herein is not required to give testimony in court unless arrangements have been previously made thereof. The Appraiser assumes that there are no hidden or unapparent conditions of the property, subsoil, or structures, which would render it more or less valuable. The Appraiser assumes no responsibility for such conditions, or for engineering which might be required to discover such factors. Information, estimates and opinions furnished to the appraisers, and contained in the report, were obtained from sources considered reliable and believed to be true and correct. However, no respon- sibility for accuracy of such items furnished to the Appraiser can be assumed by the Appraiser. The Americans with Disabilities Act ("ADA") became effective January 26, 1992. The appraiser has not made a specific survey or analysis of this property to determine whether or not it is in conformity with the various detailed requirements of the ADA. It is possible that a compliance survey of the property, together with a detailed analysis of the requirements of the ADA, could reveal that the property is not in compliance with one or more of the requirements of the Act. If so, this fact could have a negative effect upon the value of the property. Since the appraiser has no direct evidence relating to this issue, a possible noncompliance with the requirements of the ADA in estimating the value of the property has not been considered. Disclosure of the contents of the appraisal report is governed by the Bylaws and Regulations of the professional appraisal organizations with which the Appraiser is affiliated. Appraisal Company of Key West Page 14 Appraisal Report 68300 Overseas Highway, Layton , FL The undersigned Appraiser has no present or contemplated future interest in the property and the compensation is in no manner contingent upon the value reported. Possession of this report does not carry with it the right of publication or advertisement of any of its conclusions, nor may any except the applicant use the same for any purpose without the previous written consent of the appraisers or the applicant. This appraisal report has been made in conformity with and is subject to the requirements of the Code of Professional Ethics and Standards of Professional Conduct of the appraisal organizations with which the Appraiser is affiliated. This appraisal report is in conformity with the Uniform Standards of Professional Appraisal Practices and this appraisal assignment was not based on a requested minimum valuation, a specific valuation, or the approval of a loan. The discovery of latent conditions is beyond the scope of this appraisal. Detection of latent conditions requires the expertise of qualified persons such as architects and engineers. Latent conditions include, among other things, non -apparent structural conditions; presence of prohibited hazardous wastes; presence of radon gas, methane gas, asbestos, lead, petroleum products and other air, soil, or water contaminants; and many other conditions too numerous to mention which may affect the value of the property being appraised. An environmental site assessment report for subject property was not provided. The appraiser is not an expert in the field of environmental hazards. The appraiser has assumed that subj ect property is environmentally "clean". As a result, if environmentally clean up and/or remediation is required then the subject's market value could be adversely affected. The former K.T.'s Marina about one-half block easterly from the subject had some underground fuel leakage issues years ago. I believe it has been remediated and the property has been recently razed and redeveloped. An environmental site assessment might be warranted, if the client so desires. ACCORDINGLY NOTICE IS HEREBY GIVEN that neither the appraiser conducting this appraisal, nor the APPRAISAL COMPANY OF KEY WEST makes any warranty, express or implied, to property covered by this appraisal, and neither shall have any liability to any person for differences in the value of the appraised property, or other damages, resulting from discovery of latent conditions (including those mentioned above and others) on, or in proximity to, the appraised lands. I hereby certify that to the best of my knowledge and belief the statements of fact contained in this report, upon which the analyses, opinions and conclusions expressed herein are based, are true and correct; also this report sets forth all the limiting conditions affecting the analyses, opinions and conclusions contained in this report; also this report has been made in conformity with the Appraisal Institute. Appraisal Company of Key West Page 15 Appraisal Report 68300 Overseas Highway, Layton , FL TATE MAP Appraisal Company of Key West Page 16 Appraisal Report 68300 Overseas Highway, Layton , FL FLORIDA KEYS MAP FLORIDA Key Largo MM 99-106 Tavernier MM 91-92 Plantation Key MM 86-90 (;5---Windley Key MM84 Islamorada Upper Matecumbe Key MM80 d o M 1�(/E o Loner Matecumbe Key MM74 ~ P 0-Fiesta Key MM70 Layton Wr�// \ 5 ng Key MM66-69 h Keys MM61 Key -G sy Key MM57-60 &ar ra ey aShores on Key y Beach MM54 Vaca Key Marathon MM50 Pigeon Key MM45 7-mile Bridge H Oo6�7)° Sunshine Key MM 40 Qygpe Bahia Honda MM337-38 Mne h M2T �8 • Mid flte orCo a 8 amrod MM 26-zz7 Summer�land MM 24 2$ SugarNa�` Key2NMM 2-23 Lower Sugarloaf Key MM 17 Saddlebunch Keys MM 13-16 o' ig Coppitt MM 10 Boca Chica MM 7-8 Stock Island MM 5 • Key West MM 0-4 Appraisal Company of Key West Page 17 Appraisal Report 68300 Overseas Highway, Layton , FL LOCATION MAP Appraisal Company of Key West Page 18 ZD 222� Ra 2e o z 6 J00 Uv � e * Hi &»a,fa t g,Ff AERIAL LOCATION MAP Appraisal Company oKey West Page 19 222� Ra 2e o z 6 J00 Uv � e * Hi &»a,fa t g,Ff AERIAL PLAT MAP FOR LOTS 28&29 Appraisal Company oKey West Page 20 222� Ra 2e o z 6 J00 Uv � e * Hi &»a,fa t g,Ff AERIAL PLAT MAP FOR LOT30 Appraisal Company oKey West Page 21 Appraisal Report 68300 Overseas Highway, Layton , FL PURPOSE AND INTENDED USE OF THE APPRAISAL The purpose of this appraisal is to estimate of the "As Is " Market Value of the Fee Simple Estate of the subject property commonly known as 68300 Overseas Highway, Layton, Long Key, Monroe County, Florida 33001, as of Februaryl2, 2018. The intended use of this appraisal is for possible purchase by Monroe County Board of County Commissioners and incorporate with the adjacent Fire Station to the west. The intended user of the appraisal report is Monroe County Board of County Commissioners. This appraisal is for exclusive use by Monroe County Board of County Commissioners. Parties that may receive a copy of the apprisal or review report do not become intended users unless specified by the client at the time of engagement. MARKET VALUE DEFINITION Market Value: as defined by the Office of the Comptroller of the Currency (OCC) is: "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, knowledgeably and assuming the price is not affected by undue stimulus. Implicit in this definition is 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 each acting in what he considers his own best interest; 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 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. Appraisal Company of Key West Page 22 Appraisal Report 68300 Overseas Highway, Layton , FL PROPERTY RIGHTS APPRAISED & DEFINITIONS This appraisal is made with the understanding that the present ownership of the property includes all the rights that may lawfully be held under a Fee Simple Estate. These rights are sometimes referred to in appraisal literature as the "bundle of rights." It includes the right to use, keep others from using, sell, rent or otherwise dispose of the property. The elements which have been included in this appraisal are the land and any existing improvements. Fee Simple Estate Definition: According to The Dictionary of Real Estate Appraisal, Sixth Edition, "Fee Simple Estate is absolute ownership unencumbered by any other interest or estate, subject only to the limitations imposed by the governmental powers of taxation, eminent domain, police power, and escheat." This report contains the results of my investigation and analysis made in order to furnish an estimate of the Market Value of the Fee Simple Estate of the subject property. The subject property consists of an owner operated property which is not encumbered by any long term leases. Therefore, only the Fee Simple Interest is included herein. However, the reader is cautioned that a title search was not made; thus, no other encumbrances are considered herein. LEGAL DESCRIPTION: The legal description for the subject property is as follows. Lots 28, 29 and 30, Block 3, Long Key Estates, Second Addition, according to the Plat thereof, as recorded Book 4 at Page 127 of the Public Records of Monroe County, Florida. Appraisal Company of Key West Page 23 Appraisal Report 68300 Overseas Highway, Layton, FL MARKET AREA (NEIGHBORHOODI ANALYSIS The subject property is located in an urban, area commonly known as the City of Layton, Long Key in Monroe County, Florida, which ratified the incorporation on September 18, 1963. It is located approximately at mile marker 68, and approximately 64 miles northeasterly from Key West, stretching across twenty-seven bridges. The subject property is located in a residential and commercial area providing all of the services necessary within an urban area. Being a main population area of the Middle Keys, Long Key, is supported by the larger, City of Marathon which offers much in terms of commerce, residential housing and service as well as industrial areas. The main attraction of Layton is Long Key State Park and the City is famous as a fishing destination, thanks in part to promotion by sports writer Zane Grey. This is an area of mixed zoning and uses which service the demands and requirements of the Middle Keys market. The subject site consists of an rectangular shaped parcel with 150 feet of frontage along the southerly side of the Overseas Highway and extending 125 feet to the deepwater canal at the rear of the property. The commercial uses along U. S. Highway No. l include hotels, motels, restaurants, professional offices, hospital, retail shops and marine laboratory, tourist -related businesses, service establishments, small recreational and commercial marinas, marine related uses, and mobile home parks. The Marathon Airport is located about15 miles easterly from the subj ect property. Marathon Airport is used for privately owned airplanes, as well as for light commercial and charter traffic which services the population area. The airport was upgraded with a totally rebuilt terminal in February 1995 at a cost of $7.8 million. The terminal reflects Florida Keys "Conch Architecture's and encompasses 19,000 square feet. Although the main commercial carrier at the Marathon Airport has ceased service negotiations with new providers are still on going. Rent concessions and other perks have offered. Marathon also offers the only substantially sized shopping district for the Middle Keys community, having two large commercial shopping centers, as well as many smaller strip shopping centers, utility company offices, Monroe County offices, schools, etc. The City of Layton has its own municipal sewerage treatment plant. Throughout the Florida Keys, only Key West and Key Largo provide a similar variety of services. The subject property is located on the westerly side of the "uptown" Business District. Marathon has developed steadily over the past three decades; this development accelerated as a result of the conversion of the Overseas Highway from a two-lane to a four -lane highway in the late 1980's and early 1990's through Marathon. Appraisal Company of Key West Page 24 Appraisal Report 68300 Overseas Highway, Layton, FL Marathon has recently opened a maj or Hyatt hotel with marina and restaurant. There is also a Courtyard Marriot Courtyard Hotel which recently opened, plus an Hampton Inn is under construction. Many older mom and pop motels are awaiting redevelopment. Hence, it is anticipated that within the next two years there well be more than 300 rooms added to the present inventory. Saply and Demand The supply of commercial space is limited and new commercial construction has been restricted since 1996 due to a commercial building moratorium that had been in effect until the commercial rate of growth ordinance (NROGO) was implemented. Therefore, the current and ongoing regulations are expected to place upward pressure on price levels of existing units. Even to a greater extent because of the difficulty and high cost in obtaining building permits for new construction, both residential and commercial. Commercial real estate experienced a decline of 30% to 60% during the economic downturn in 2007- 2008. However, it appears that generally the market reached the bottom at the end of 2011 and stabilized in 2012. There has been more transactions in 2013and 2014, lessening the supply indicating a strengthening market. IMPLEMENTATION OF COMMERCIAL R.O.G.O. Sales of vacant, commercially zoned parcels within the Florida Keys have dwindled over the past few years due to a commercial building moratorium which existed until 2002, when the non-residential rate of growth ordinance NROGO went into effect. This system is similar to the residential R.O. G.O. system in that it awards building permits based on a point system. The Non -Residential Rate of Growth Ordinance (N.R.O.G.O.) was enacted with an effective date of January 1, 2002. Under the new and current regulations the maximum allowable square footage for new commercial development is 2,500 square feet per parcel. The ordinance does provide for Administrative Relief in the event that the applicant is not successful in obtaining an allocation award, a permit, within at least three of four consecutive annual allocation periods. The remedies for relief are to grant the applicant an allocation award, offer to purchase the property, or suggest such other relief as may be necessary and appropriate. General Economic Conditions: The Florida Keys have flourished over the past two decades with tourism developing as the County's primary economic base. The County has had tremendous success with its advertising efforts and attraction of tourists of all Nationalities. Hotels and motel facilities in Monroe County have flourished over the past decade. However, we experienced a decrease in tourism as a result of the very active hurricane seasons of 2004 and 2005, followed by the national decline in the real estate housing market and the current economic recession and credit crisis. However, the tourism and the real estate market had rebounded, especially the hospitality industry. Furthermore, the traffic count has returned to the 2006-2007 levels. Hurricane Irma made landfall in the Florida Keys September 10, 2017. The subject Appraisal Company of Key West Page 25 Appraisal Report 68300 Overseas Highway, Layton, FL property did not appear to suffer significant storm damage (either wind or storm surge). However, many properties within the Florida Keys sustained damage. Several high end transient operations in the Upper Keys have numerous rooms off-line such as the Islander and the Cheeca Lodge. In addition the Hawks Cay Resort, located in Duck Key (approximately mile marker 60) has recently laid off approximately 250 employees and hopes to re -open by mid -summer 2018. The clean-up process has been non-stop and effective. However, at this time, the true extent of the impact is unable to measure. Con cln si on In summary, the subject property is located in the Middle Keys where there is a concentration of services, employment and shopping. Only Key West and Key Largo offer similar services, each is located 40 to 60 miles away. Residential uses are located off the highway; these neighborhoods, as well as neighboring communities support the commercial businesses in the area. In 1994-1995, Monroe County moved some of its divisions to a new facility in Marathon; therefore, increasing the employment population which requires goods and services. Marathon's central location is appealing, especially with the increasing availability of services. The neighborhood may be undergoing an increase in desirability in the future due to improvements with respect to goods and services and its accessibility to the mainland. Two such developments, representative of Marathon's central region location, include the opening of Home Depot, Office Depot and two Walgreens Drug stores. Most recently the Winn Dixie is remodeling and expanding their store. The surrounding structures are generally well maintained in average to above average condition. The considerable amount of automobile traffic along U.S. Highway No. 1, a.k.a. the Overseas Highway, provides good exposure to this area. I anticipate continued improvement in the general quality of the neighborhood, particularly with the increased demand for this type of property due to building and environmental restrictions placed on all properties in the Florida Keys. The following average daily two-way traffic data for U.S. Highway No. 1 was provided by the State of Florida Department of Transportation: Appraisal Company of Key West Page 26 Appraisal Report 68300 Overseas Highway, Layton, FL FACTS ABOUT LAYTON According to the 2010 census, the population is 184 comprised of 96 Male and 88 Female. The number of residents was 186 in 2006. The land area covers only 0.2 square miles of which 0.04 square miles is water (bay bottom). Layton is well known for it sports fishing and Long Key State Park. History of Layton: In the late 19th century, Long Key was used as a coconut plantation. By 1910, Layton was becoming famous as a fishing destination, thanks in part to promotion by sports writer Zane Grey. However, the developing tourist infrastructure on Long Key was largely destroyed by the Labor Day Hurricane of 1935. After World War II, Mary and Del Layton, who ran a grocery business in Miami, bought 40 acres (160,000 square miles) on Long Key and started developing the property as "Layton's Long Key Fishing Camp," which grew substantially over the succeeding years. Layton was incorporated as a town on September 18,1963. The land that would become Long Key State Park was acquired between 1961 and 1973; the park opened on October 1, 1969. Development Includes: based on 2000 US Census Bureau 84 Households and 50 families Median Income per Household $53,750 Median Income per Family $73,750 Layton is the 12ffi smallest City in Florida Survey of Market Participants The appraiser interviewed or obtained information from the following market participants including Claude J. Gardner Jr., (Berkshire and Hathaway Realty), Curtis A. Skomp, CCIM, (RE/Max), Brian Schmitt, Coldwell Bankers Schmitt Real Estate, and George Garrett, Marathon Planning Director, and Mr. Phillip "Skip" Haring, Administrative Assistant to the Mayor City of Layton. Other commercial Realtors, real estate investors, tenants and landlords, were also contacted in my research. In analyzing the active listings of commercial and mixed use properties, it appears that they have been on the market from about two months to 16 months with continued reduction in listing prices. The mid point of the listings is about nine months. Well priced properties have sold. The closed comparable sales analyzed for this appraisal indicated days on market from zero to 160 days. With a mean at 89 days and a medium at 95 days. A number of active listings for commercial and mixed -use properties are noted as follows. Appraisal Company of Key West Page 27 Appraisal Report 68300 Overseas Highway, Layton, FL 572989 112235 Overseas Hwy. i Marathon i $1,100,000! 4,1901 40,6001 $262.531 $27.091 4211 Active RetailService with 1 1 Cottage and separate ! i ! ! ! ! ! ! 130,492 SF Parcel 576372 8 103 1 overseas Hwy. i i Islarmrada i i $1,400,000 8,286 60,548 i i $168.96 i $23.12 i 182 i Active ivacant ConrmrcialFo=Restaurant with iApartnients,Ready for Redeyelopnient 577448 i90184Overseas Hwy. ; Islarmrada i $1,495,5001 6,0171 31,5001 $248.551 $47.48i 74i Active Fonrer Bank Branch Bldg. with Drive -Thai, i i i i i i i i i TWO -Story CBS 572069 182681 Overseas Hwy. Islarmrada 1 $1,500,0001 8,7501 15,0701 $171.431 $99.541 4921 Active One -Story CBS, Multi -Unit, Fortner Bank Li ;Branch with Drive -Thai 576491 i 14125thStreet Gulf j Marathon i $2,200,000! 6,128j 68,290! $359.oi $32.22i 177! Active i Two -Story CBS, Multi-Unit,FOmer Church 575806 ' 22966 Overseas Hwy. Cadjoe Key $490,0001 1,958 12,9631 $250.261 $37.801 2341 Active 11-Story Elevated Wood Frarre , 6 otlice Suites Fonrer Bank Branch Bldg. with Drive -Thai, 123552 i305720verseas Hwy. i Big Fine Key i $589,000i 1,975 i 28,158i $298.23 $20.92i 556i Active i i lone -Story CBS ----=------------=---------------=---=----=-----=-----=----=------=---------------------- i 575626 i 3W71 Avenue A Big Pine Key $6W,000! 2,271 26,095 i $307.791 $26.79 i 253 i Active lone -Story CBS w/ 3 Cornm Bays _---1------------1--------1------1---`----1-----1-----L----J------L---------------------- 571602 i2797Oven eas Hwy. i Marathon i $525,000i 2,520i 5,600i $208.33i $93.75i i 3 Retail/Office Bays, new roof, One -Story, 539i Contiigent i i i i i i ! i iZoned MU Mean $252.79 $45.41 325 Median $250.26 $32.22 253 mnimum $16896 $20.92 74 Maximum $359.01 $99.54 556 Advantages and Disadvantages of Subject Property Strengths • Neighborhoodis almost full developedwith very limited potential fornew construction of competing office or mixed -use space. • Great Access to Marathon Airport • Ample On -Site Parking on the vacant lot • The Middle Keys market has appreciating land values, which is a significant barrier to entry • Great Access and Exposure from the Overseas Highway • Located on a deepwater canal with access to the Long Key Bight and the Atlantic Ocean. Appraisal Company of Key West Page 28 Z Appraisal Report 68300 Overseas Highway, Layton, FL Weakness: Finding reliable workforce and even management is difficult in the Florida Keys due to the extremely high cost of living and lack of affordable housing. Hurricane Irma made landfall in the Florida Keys September 10, 2017. The subject property did suffer some storm damage along with many properties within the Florida Keys. Several high end transient operations in the Middle to Upper Keys have numerous rooms off-line. In fact, in Hawks Cay, located in Duck Key (approximately mile marker 60) has recently laid off approximately 250 employees and hopes to re -open by mid -summer 2018. The clean-up process has been non-stop and effective. However, at this time, the true extent of the impact is not known. Appraisal Company of Key West Page 29 Appraisal Report 68300 Overseas Highway, Layton, FL DEMOGRAPHICS In terms of demographic trends taking place in Layton, Florida, the following data has been compiled by from the CCIM Site To Do Business within a 40-mile radius of the subject property: Gesri" 58455-68705 Overseas Hwy, Long Key, Florida, 33001 Prepared by Esri Ring: 40 smile radius Summary Census 2010., 2017: 2022 Population 34,929 36,852. 38,476 Households 16,068 16,991. 17,607 Families 9,416 9,820 10,198 Average Household Sire 2,14 2.15 2.15 Owner Occupied Horsing Units 10,348 10,248 10,633 Renter Oeeupied Housing Units 5,720 6,643 6,974 Mediae, Age 49.6. 52.3 54.2 Trends: 2017 - 2022 Annual. Rate Area. State National Population 0.87% 1.36 /.. 6.83' ., Households 1.R A 0.79f% Famines 0. 76% 1.25 °A 0.71 W. Owner HHs 0.741 a 1.1,9% 0.72111=, Median Household Income 2.61% 2. 1.3°'a 2., 12.010 2017 2022: Households by Income Number Percent. Number Percent:. c$15,.000 1,768 10.5xb 1,793 10.Z'?'n $15000 - $2:4,999 1,775 1D.5uYr, 1, 687 9. 6=','n $75:000 - $34,999 1., 809 10,7% 1,F64 9.51% $35,000 - $4.9,999 1,905 11.3"': 1,597 9. A,% $50,060 - $74, 9'99 3,354 19.11 3,,107 17.6% $75,000 - $99,999 2,005 1.1.99A 2,224 12.691. $100,000-$149,999 2,310 13.7% 2,833 16, 1,+r $150000 - 3199,999 785 4.6% 1, 087 6.2% $200:000+ 1,177 7.0% 1,614 9.2% Medusa HsuseFneld I -me $56,637 $64,416 Average Household 1'ncnma $83,694 $99,302 Per Capita lnenme $38,609 $45,678 Census 2010 2017 2022 -. Population by Age: Number Percent Number Number Percent: Number Percent: 0- 4 1,355 3.94l. 1.,245 3.4%. 1,230 3.24m S - 9 1,326 3.9% 1,431 3.9% 1,411 3.TN. 10 - 14 1,481 4.2% 1,517 4. 1£,'e 1,640 4.3 Is- i9 1,571 4.5% 1,431 3.9°A 1,.555 4.0% 20- 24 1,387 4.0-,.. 1..329 3.6°!e 1,179 3.1% 25 - 34 3,288 9.4% 3,477 9.4°!a 3,.258 S. 5%. 35 - 44 4,245 12.2910 3,952 10.71% 4,215 1.1.09'm 45 - 54 6,492 18.61% 5,755 15,6111.. 5,208 13, 5% 55 - 64. 6'a86 19.7 ro 7,541 20 5,,'a '7,405 19.51% 65 - 74 4,304 12.39110 6,051 16.4-A 7,.257 18.91Yn 75 - 84 1,979 5.7% 2,359 6.49,4u 3,182. S.3 f 85+ 61.7 t'89.+0 765 2.19/0 847 2.2% Census 2010. 20'J,7 2022:. Ft "and Ethnicity.. Number Percent :Number Pement .Number. Percent. White A[- 32,628 93.4q-6 31,904 92.0% 35,030 41.0% blaek Alone 918 2.6% 1,166 3..2% 3,369 3. 59v American Indian Alone 1.45 U.4% 171. 0.5v. 1.90 0..5'?'0 Asian Alone 27H 0.8w. 374 1.0% 45.5 1.24'n P-Jir. ltilandrr Alone 2Z 0.1% 24 0.1% 2.7 0. 191n Some other Race Alone. 373 1., 1. in 475 1.3 0 544 1,4W.. Tvm or Mnre Races 565 1.6% 735 2.0% 861 2.2% Hispanic origin (Any Race) 6,671 119.1% 8,20Q 22.3% 9,513 24.7 tiara Not.: te. ,-p, in cui rr, <Iiarx. 9-ire. U. S u , ary F11, I ,ts €trr 2C61 and 2i127.. February 20, 2618 Appraisal Company of Key West Page 30 Appraisal Report 68300 Overseas Highway, Layton, FL esn' ®ernagraphic and IncOme Profil Ring: 40 rnile radius Prepared by Esr¢ Trends 2017-2022 2.5 u 2 1.s 3�, W! sIM Area []..5 ( '.. state USA 4 populationHouseholds FafYllale5 Owner HH5 y Median HH i€{c9mE Population by Age 2 i7 18 15- 14 12 a 8 r s 2917 4 2022 2 0 0-4 5-9 10-14 1.5-1y9 20-24 25-34 35-44 45-54 55-54 155-74 75-84 851. 2017 Household Income 2017 Population by Race sxsu -saaM 90 zu », _ 5MK•"9K - s3sM sz�K 121 P1. $0 w 76 •..s 1. S.K 60 w 5Q- 49 $2G9M- 30 1-.9�IU 'Y.4'!v 20 1 SJ White Black Am 1 d Asian Paco€ic Ctner Two+ 2017 Percenr. Hispanic Origin; 22 3% Source. U.S sus irnc.:R) Crows it O. Surnrnary lrihx 9 srr >r ,awt; -(xi 200 r., 20.22 February 20, 2013 Appraisal Company of Key West Page 31 1 Appraisal Report 68300 Overseas Highway, Layton , FL EXPOSURE TIME Exposure time considers the amount of time necessary to affect a sale of the subject property on the valuation date. In the case at hand, it is my opinion that the exposure time would be between 6 and 18 months, based on a listing price within 5.0% of my appraised value. This exposure time appears reasonable based on analysis of the active listings and closed sales utilized herein. OWNERSHIP According to the Monroe County Property Appraiser's Records, the subject property is owned by Haring Properties, Inc. P.O. Box 838 Long Key, FL 33001 SALES HISTORY OF SUBJECT PROPERTY AND CURRENT CONTRACTS According to the Monroe County Property Appraiser's records, the subject property's has not sold within the past five years. The subject property has not been under contract for sale and purchase nor officially listed for sale over the past five years. ZONING AND FUTURE LAND USE The subject is zoned "C" commercial district. The purpose of the"C" commercial category is to provide commercial activities that will serve the needs of local residents and tourists, as well as uses that will enhance the tourist industry in the city and the county. It is also the intent of the city to encourage commercial uses that reflect the historic, aesthetic, and natural attributes of the Florida Keys. The maximum floor area ratio (FAR) for this category is 0.60 square feet. Planned developments in accordance with the city's land development regulations shall be allowed and encouraged in the commercial district. Appraisal Company of Key West Page 32 Appraisal Report 68300 Overseas Highway, Layton , FL ZONING AND FUTURE LAND USE MAP City ofl,ayton, Florida Comprehensive flan FIGURE 3-4 CITY OF LAYT€ N, FLORIDA FUTURE LAND USE MAC' 0 Single -Family 500 0 500 10 Feet Multi -Family Commercial institutional Recreation —~ Conservation 0 ate[fii`41`et areas M city limits uruselwlu uo-vz-uz rmu Lutiu use riurnum Amended; 02-07-2008 24 Appraisal Company of Key West Page 33 Appraisal Report 68300 Overseas Highway, Layton , FL REAL ESTATE TAXES AND ASSESSMENT 2016 $162,500 $172,710 $10,637 $345,847 $345,847 $4,142.93 $498.32 $0.00 $4,641.25 1 2017 $162,500 $112,330 $11,436 $286,266 $286,266 $3,274.40 $498.32 $0.00 $3,772.72 1 2016 $25,000 $0 $1,694 $26,694 $26,694 $319.78 $0.00 $0.00 $319.78 2017 $25,000 $0 $1,569 $26,569 $26,569 $303.89 $0.00 $0.00 $303.89 According to the Monroe County Property Appraiser's records the total assessed value for the subject property is $312,835. Based on the 2017 millage rate of $11.4383 per $1,000 of the subject's real estate tax burden is $3,578.29, plus the non -ad valorem waste water assessment of $498.32, resulting total tax burden is $4,076.61. The overall assessment for the subject real property is 45% of my opinion of the value; therefore, a tax appeal is not feasible. According to the Tax Collector's office the 2017 ad valorem and non - ad valorem taxes have been paid. Copies of the 2017 real estate and non -ad valorem tax assessment are included on the following pages. The appraiser was not provided with a title search for the subject property. Appraisal Company of Key West Page 34 Appraisal Report 68300 Overseas Highway, Layton , FL Real Estate Tax Analysis: Total Assessment per Sq. Ft. ofBuilding Area: $119.18 Total Assessment per Sq. Ft. of Site Upland Area: $16.68 TaxBurden per Sq. Ft. ofBuilding Area: $1.36 TaxBurden per Sq. Ft. of Site Area: $0.19 Appraisal Company of Key West Page 35 Appraisal Report 68300 Overseas Highway, Layton , FL REAL ESTATE TAX ASSESSMENT & TAX BURDEN DANISE 0. HENRIQUEZ. C. F.C. 2017 Paid Real Estate ME N ROE COUNTY TAX MLECTOR NOTICE OF AD VALOREM TAXES AND NON -AD VALOREM ASSESSMENTS donom M I 75772— GOLA 1475742 RARING PROPERTIES INC 00367620000000336435 PC Box 838 69300 OVERSEAS HVVY LONG KEY, FL 336'0t LONG KEY ESTATES SECOND ADDITION P134-127 LONG KEY LOTS 28 & 29 BILK 3 OR613-729 OR614-5130 OR614-59 SCHOOL STATE LAW 1,6080 286,2E8 0 286,266 460.32 SCHOOL LOCAL BOARD 1.7480 286,266 0 280206 600.39 GENERAL REVENUE FUND 0.6949 286,26E 0 286,266 198.03 F&F LAW ENFORCE JAJL JUDICIAL 1.0530 266,2613 a 200,266 659.34 HEALTH CLINIC 0.0469 286,266 0 286,266 13.4 FLORIDA KEYS MOSQUITO CONTROL 0.4646 286.2130 0 286,266 133.011 CITY OF LAYTON 2.4906 286,266 0 286,266 712A7 SO FL WATER MANAGEMENT DIST 0.1275 286,269 0 296,266 36.EE OKEECHOBEE BASIN 9.1384 206,266 0 286,266 N.0 LOVER. & MIDDLE KEYS FIRE &AMB 2.i214 286,266 0 296,266 607.2E EVERGLADES CONSTRUCTION PRJT 9.0441 206,26t a 286,266 12.62 5F FIR TOTAL MILLAGE 11.4383 ADVALOREMTAXES S3;274.40) NON -AO LAYTON WASTEWATER DIST 498.a2 r ,772.72 NON-ADVALOREMASSSSMENTS $498.32 ONIIRNEIT.AINDASSESSMENT5 $3See sersase ad. fo- If a By 1, 2017 IF PAID BY % DANISE D HIENRIQUg, C.F.C. 2017 Paid Real Estate MONROE COUg-tiY TAX COLL= NOTICE OF AD VALOREM TAXES AND NON -AD VALOREM ASSESSMENTS 1476742 50LA W5742 0030 76 2,00000 00 3304'36 HARING PROPERTIES INC 6830U OVERSEAS HW( POBOX OM LONG KEY,FL 33001 LONG KEY ESTATES SECOND ADDITION PB4.127 LONG KEY LOTS 28 & 29 OLK 3 OR613-729 OR614-590 OR614-5S CHECKS ON 1L8- BANKS ONLY TO DAMBE O. HENRIQUE7 010. TAX COLLECTOR PO- BOX 1129, KEY WFET, PL. 88W1 -1129 If Postmarked By � Di9c 31, 2017 Please Pay $000 Paid 1210712017 RaceiptV 222-17-00006199 $3,652.54 Appraisal Company of Key West Page 36 Appraisal Report 68300 Overseas Highway, Layton , FL REAL ESTATE TAX ASSESSMENT & TAX BURDEN DANISE 0. HENRIQUEZ. C. F.C. 2017 Paid Read Estate MO N ROE COUNTY TAX COLLECTOR NOTICE OF AD VALOREM TAXES AND NON -AD VALOREM ASSESSMENTS =ET 76 7139 t 611LA 1476769 ut RARING PROPERTIES INC 00367640000000336435 PO Box 838 LC VACANT LAND LONG KEY, FL 33G0t BK 3 LT 30 LONG KEY ESTATES SECOND ADDITION PE4-127 LONG KEY OR775-I ME OR782-i472 ORW534428013 ORI 3 in irrmmr SCHOOL STATE LAW 1,6080 26.569 0 26,569 42.72 SCHOOL LOCAL BOARD 1.7480 26,569 0 20'569 46.44 GENERAL REVENUE FUND 9.6949 26,569 0 26,569 18.46 F&F LAW ENFORCE JAJL JUDICIAL 1.0530 26369 a 28,509 51.9t HEALTH CLINIC 0.0469 26.569 0 26,569 1.25 FLORIDA KEYS MOSQUITO CONTROL 0.4646 26,6611 0 26,569 12.34 CITY OF LAYTON 2.4906 26,569 0 26,569 00.17 SO FL WATER MANAGEMENT DIST 0.1275 26.569 0 26,669 3.39 OKEECHOBEE BASIN (LI384 2656E 0 26,569 3.68 LOVWR & MIDDLE KEYS FIRE &AMB 2.1214 26.6110 0 26'56E 56.36 EVERGLADES CONSTRUCTION PRJT 13.0441 26,569a 26,569 1.17 5F TOTAL MILEAGE 11.4383 ADVALOREMTAXES W3.11 Jed X�T-I 11IN11% I I NON -AD VALOREM &=SW:tM NDN-ADVALOREMASSSSMENTS C0.11111EIT.ESAINDASSESSMENT5 $303-89 Sm ad. fo- If a By 46C 3t. 2017 IF PAID BY % DANISE D HIENRIQUg, C.F.C. 2017 Paid Real Estate MONROE COUg-IiY TAX COLL= NOTICE OF AD VALOREM TAXES AND NON -AD VALOREM ASSESSMENTS � 4767H=, �711. 50LA W5769 L 0030764000000330436 HARING PROPERTIES INC 0 VACANT LAND POBOX ON LONG KEY, FL 33001 BK3 LT 30 LONG KEY ESTATES SECOND ADDITION P114-127 LONG KEY OR775-1 395 0 R782-147 2 0 R 1053-14 28IJ B OR 13 Cki ON U.8- BANKS ONLY TO DAMBE O. 11EMQUE7 010. TAX COLLEYfOR PO- BOX 1129, KEY WEffT. PL. &MAI -1129 If Postmarked By D.. 31, 2017 Please Pay so -Do Paid 12M712017 Receipt# 222-17-0000D199 $294.77 Appraisal Company of Key West Page 37 Appraisal Report 68300 Overseas Highway, Layton , FL Real Estate Assessment Analysis: Previous Previous Annual Diffeiencer 2017 Assessedr 2017 Sale listing SP/IP Sales Sales 2ndPrice/ Change Agaeciation In Dates Assessed Asses. PerS.R Tax Burden/ Na DOM Price Ratio Date Price Sg R Price Rate Years Value Ratio (BA Burden S.F. (RA Sale 1 58i $1,300,0001i 10001.11 N/Aj N/A11 N/A11 N/Aj N/Aj N/Aj $1,032,058jj_ 794%j $ 125.86 j $ K876.42 j $ 1.08 Sale 95! $1,000,000' 110.(P/o 12/1/95! $580,000! $0.53! $52Q000! 3.01/o 21.M m.491! 89(P/o! $ 173.67 ! $ 9,223.19 ! $ 1.64 __1_____L____LL__ Sale € 131 $2,299,000! 99.W/o 4.3% 27. 9 $2,291,528I $ 1 $__21058.94 $1.67 __5/1/89! _$824500! __$0.31! _%,M550_0! ___ ___ _82A_/ol _173.88 _ _ __. __ __ _ __. __ _ _ _ Sale4 160 $1,295,000i 949%r N/Ai NAi NA NAr NA NAr$1,007231r 81.8/oT$ 153.15 1 11,463.82 i 1.75 1.7 -------=-----=--------------------------------=----------------------------2 s NANA iSale NA L 51U $75,000i1 L $1.07i -$50,000Li L %i 7.0i $89Li 803%i $ 157.851 $ 5,51211Li 1.49 Sale a $29500001 70.2%! ,, 6. 9!, 14.931 $887,557I 429/o! $ 127.82! $ K357.50! $ 1.20 Subject NPan 89 94.8% 33% 76.0% $152.04 $10,91533 SIX Nkdan 95 99.0% 3.6% 80.9% $155.50 $9,049.81 $1.56 Mninmu 0 70.2% -0.9% 42.9% $125.86 $5,512.11 $1.08 Nk-dmtm 160 110.0% 69% 89.0% $173.88 $22,05894 $1.75 The six closed comparable sales analyzed in the Sales Comparison Approach indicated an real estate tax assessment per square foot of gross building range from $125.86 to $173.88 with a mean at $152.04 and median at $155.50. The subject's 2017 assessment of $119.18 per square feet of gross building area is at the lower -end of the data; thus a tax appeal does not appear warranted and the assessment appear to be understated. The current assessment is only 45% of my opinion of final value, which is well below the assessment to sales price ratios of the above sales comparables. Appraisal Company of Key West Page 38 Appraisal Report 68300 Overseas Highway, Layton , FL DESCRIPTION OF THE SUBJECT PROPERTY Site Anal: The subject property is located on the Overseas Highway, within the City of Layton at approximately mile market 68 on Long Key. The subject site consists of three contiguous 50 feet by 125 feet commercial lots. Lots 28 and 29 are improved, while Lot 30 is vacant. The site is an interior rectangular parcel with a total of 150 feet of frontage along the southerly side of the Overseas Highway extending southerly, approximately 125 feet in depth. Thus, the overall subject site consists of 18,750 square feet or 0.43 acres of upland area. Site Size and Description Parcel Parcel Alternate Street UplandSize Land Size I.D. Account No. Key; Address Frontage Sq. Ft. Acres 1 ' 00387620-000000' 1475742 ' 68300 Overseas Hwy., Layton, FL 33001 100.001 12,500' 0.29 2 00387640-0000001 1475769 1 Lot 30 Overseas Hwy., Layton, FL 33001 1 50.001 6,2501 0.14 Totals:1 150.0011 18,750 0.43 Easements/Encroachments: A survey of the subj ect property was not available, thus the appraiser could not verify the existence or not of any easements or encroachments. No responsibility is taken by this office for the accuracy or in regard to any questions on the nature of encroachments, encumbrances, or dissimilarities in measurement. Any maps or plats reproduced and included in this report are intended only for the purpose of showing spatial relationships. They are not measured surveys nor measured maps, and no responsibility for cartographic or surveying errors is assumed. I reserve the right to change the final indicated value herein, if a recent survey is are made available and any further encroachments and/or easements area noted. Topographer Although no soil engineering report was made available to me, it appears that the site and most of the properties in the immediate neighborhood show no signs of any subsurface instability. The subj ect site is level and slightly above the street grade, with adequate drainage sloping toward the street. Utilities: Municipal services available and currently serving the property include electricity, water and central sewer system. Additional utility services including: telephone, cable television and LP bottled gas are available with the private sector. All utilities appeared to be adequate and typical for the area and use. The electrical and plumbing systems in the buildings appeared to be in average condition. Census Tract: According to Mr. Jim Anderson of the Tallahassee, Florida Division of the United States Census Bureau, Monroe County is not divided into Census Tracts; but rather "Block Numbering Areas". According to 2010 Census Maps, the subject property is located within Block Number 9710. Flood Zone The subj ect site is located in a Special Flood Hazard Area, specifically Zone AE, Elevation 9 feet, according to the Federal Emergency Management Agency Flood Insurance Rate Maps of Monroe County, Appraisal Company of Key West Page 39 Appraisal Report 68300 Overseas Highway, Layton , FL Florida, Map Number 12087C 1719 K, dated February 18, 2005. The subject was built prior to the inception of FEMA regulations. It does not appear that the subject structure meets the current FEMA elevation regulations. If the subject structure does not meet current FEMA elevation requirements, and was destroyed more than 49.9 percent of it's building improvement value, then it would be required to meet FEMA regulations in effect at the time of reconstruction. Monroe County does participate in a National Flood Insurance Program and is covered by a regular program. The reader is cautioned that the subject's flood zone should be verified by a vendor's report as required by Federal regulations. Appraisal Company of Key West Page 40 Appraisal Report 68300 Overseas Highway, Layton , FL FLOOD MAP National Flood Hazard Layer >. a :xx r�aarvrw so.rrJ.;; a+�. Ac kdFl:C4=M1 a ar�n:xcx„su.�� ��Yj Wdt� S�metl5dm:itlEi 'AhBh sl i`r�'a:a�.luret Git'wYrvrt YhaaA krahnl. A�:+s:a�a sl RT': rereaunl 3SxAxx �4 wil3v rcvrAly fah tesa LR even 1., wx.ea+wu P �paaaA'Earcu rv`ulv��ax aGuauq .mAe, .... 0 1 ar S;+,WJ.NaI IN Aar warn. T`-"�t �"� 4�irvNt 4aAA1+1nAm YA Anaa ®Y;en P�r✓df'ri €4�e� N �.c�'p Irx Tall:R?a LM lit' �LQLA,"Y f�J6,..R' NRY �' ���waYU M'lru�Prem nua as Uihvvti -. � A�;,� 8£drk ul Yd+llS41."'pgtl dA9�taU 4 -.. ' BflftwSsrl: e£IWNi; (0140 C€taGaaAc.LL.•aw., %hx>trvai ':tilr+ea 5Y¢.g.rcl �an�:.v�. 1;rRAY4alifuS nr�rrr a aWaru. htikc, rP. rkm?'wadl nIQ--='� Ctee4s t8.raea rtry l', drntrhal �hrs�G. tw Sul LJmrcret .m. Taaelvtiar!?L' .a L4rm;I�N',g R M Mari, m--.•. 31#rr'u1-�+n PkesmrYhS —:.__ c .anra,lrrcxn��l nr��hh� {Y(v`�l�1nYi:CvsYilAii' �I. *r 41Falkl4.Yin �.;, IFdxia 'r PA.Nl4it �,L, Vr4Y6rc�f#d �Ysrnrm�IG atarJ^rta vrii5s 7�bkt°k �arrrYa+ok MaY 11� RYA of r1� IMzwJ rc,ar,A rl'::.I N„a y2tr. a �recr h>alsr;.. rI. —J.4'MkiY —,—a. Wqh Flu" Y.hM€ lflidl �,esrat}eran:,,,;vrtls' T'Pv"ft j hAteM MPk9— it 44'"Pdv %"—OY uai+Jwseh,v3rvry NV IiL w'ti�L .��vkem VamteYci lry # LMi '.ties rnngj ilhkn l5�ll lr(e„E! t�5,11 .14. 0',VL wC�rviM eAilpt.A ry gnar nr�.v9Yrrvpr YP er�reaya 1 ^%'tuA Ihfih. Nl frkHL drCd(bll S4�e +$A15Pfi:V:�41r(ILh51`,M&V¢ ra Sa.L+?h�d': kti 3� el;ria ���=P 1aA. fFS.a., nark In�aFn a u'uW I tvx mns...rz n>rrm :S Ifra I,A3a�.mn` k n�m� s6amenlx � r3aa AY�ur exaar rnpa rylY�n=y +Uac rrtru `�ra[a Yrjveulaa cmr mzh nwl:cti ���.3uervmr,.xwAT dml�I'.Ark.. FIRM, iwirvvrain! arG r" rcllAtstra 4t" WR oi,ag &rl mot. eai7wwd tsa m��in.;axiy IaitiWamck,. Appraisal Company of Key West Page 41 Appraisal Report 68300 Overseas Highway, Layton , FL Improvement Anal The two westerly lots are improved with a one-story, CBS/wood frame office and residential mixed -use structure containing a gross building area of 2,625 square feet. In addition, there is a 358 square foot carport, plus a 61 square feet attached storage shed. The owner -occupied subject has been utilized as a Haring Insurance Agency's Office, plus a two to three bedroom non -transient residence. Per the Monroe County Property Appraiser's record the subject property was build in 1964. The following descriptions of the improvements were based upon a physical inspection of the interior and exterior of the buildings and site improvements, and the Monroe County Property Appraiser's records. A construction summary of the building improvements follows: S t � frC x", Office/Resid_Mixed Use 1_-Story_CBS/Frame____ 4191 1964 Totals: 2,625 419 Foundation & Floors: The subject structure is built on concrete footer foundation with a concrete slab on grade. The floors were finished with a combination of carpet, finished concrete and wood laminate. The restrooms are finished with ceramic file floors. Exterior Walls: The exterior walls of the subject painted Stucco over CBS/Masonry exterior walls plus vinyl lapsiding above wood frame walls. The exterior doors are a combination of glass, metal, metal roll -up, and wood, while the windows are a combination of glass sliding, awning, and sash. Roof: The structure has a modified gable, hip and flat roof structure. The flat roof is covered by a roll composition, while the gable and hip roof is covered by metal v-crimp. The roof is assumed to be in good condition as it has been recently installed. Electrical Service: The electrical services to the buildings appeared adequate for the use of the property. Air Conditioning: The subject structure has a roof -top central air conditioner/heat systems, plus a few wall unit air conditions. Appraisal Company of Key West Page 42 Appraisal Report 68300 Overseas Highway, Layton , FL Plumbing: Furnishings & Equipment: Construction Quality: Improvement Condition: Building Ages: The subject building has a two, three -fixture full bathroom. The valuation of the subject property does not consider any personal property. Above Average Average to Above Average (I have considered the Cost of Repairs for Hurricane Damage). Environmental Issues: In this appraisal assignment, the existence of potentially hazardous material used in the construction or maintenance of the building or the overall property, such as the presence of radon, asbestos insulation and/or existence of toxic waste, which may or may not be present on the property, has not been considered. The appraiser is not qualified to detect such substances. The appraiser is not an expert in the field of environmental hazards. An expert in the field is recommended if desired, as no environmental tests were made by the appraiser. ADA Compliance: The Americans with Disabilities Act ("ADA") became effective January 26, 1992. The Appraiser has not made a specific survey or analysis of this property to determine whether or not it is in conformity with the various de- tailed requirements of the ADA. The Appraiser recommends that a Contractor or Engineer be hired to determine compliance or noncompliance, if so desired. The Appraiser is not a contractor and is not qualified to make a determination if the building adheres to the requirements. The property, together with a detailed analysis of the requirements of the ADA, could reveal that the property may or may not be in compliance with one or more of the requirements of the Act. If so, this fact could have an effect upon the value of the property. Appraisal Company of Key West Page 43 Appraisal Report 68300 Overseas Highway, Layton , FL Cost to Cure: The subject property was impacted by Hurricane Irma, which made landfall on September 10, 2017. The subject building was flooded by storm surge with much of the finishes removed from four feet or less down. The City of Layton has determined that the substantial damage was approximately $72,000. I have conservatively considered a Cost to Cure adjustment of $80,000, which has been deducted herein. The subject's damage is higher than half of the County Appraiser's estimate of the Actual Cash Value or Depreciated Value of the subject building. First of all, the assessment of the building only appears understated. Second the City of Layton amended their ordinance to allow that storm damage can be repaired up to 50% of the value of the building per occurrence, not cumulative. The County considers substantial damage as repairs/renovations over a five-year period. As a result, it appears that the subject can be repaired and the structure will not have to be razed or demolished and rebuilt up to current FEMA flood elevation requirements. Appraisal Company of Key West Page 44 Appraisal Report 68300 Overseas Highway, Layton , FL BUILDING SKETCH Ope" � Pa t,3 2 2. V Frei Mkhefl 68300 Overseas Highway Layton, Monroe County, Honda BffjrWM 4 23.7 r; r- 3-Fix. Fill! 2' Bath 3- Fix. k UR b-Ah N Q N ;1 ;1 Garage/SL:orage Carport ry 4. V Private Office Private Office '397 fl.11 st 7' L21,1, �j nf 4, 1' 54.31 Overseas Highway GBALI Entire Bd1g, 2625.19 2625.19 Entire Bd1g. GAR Carport 357.65 54.30 z 3.20 Garage 752.57 1110.22 58A0 X 2.10 OTH Storage 61.20 61.20 22.80 z 54.30 33,50 z 22.10 Scaler I = 15 173.76 473.04 1238.04 740.35 Net BUILDING Area (rounded) � 2625 4 Items (rounded) 1 2625 El Appraisal Company of Key West Page 45 Appraisal Report 68300 Overseas Highway, Layton , FL HIGHEST AND BEST USE: In appraisal practice, the concept of Highest and Best Use represents the premise upon which value is based. The four criteria the highest and best use must meet are: Legally permissible; Physically possible; Financially feasible; and Maximum profitability Highest and Best Use analysis involves assessing the subject both "as if vacant" and "as improved." "As If Vacant": Physically Possible Use - The subject site consists of an interior commercial lot in the City of Layton in the Florida Keys. The site has 150 feet of frontage along the southerly side of the Overseas Highway encompasses 18,750 square feet of upland area. The subject has frontage at the rear along a deep water canal providing access to Long Key Bight and the Atlantic Ocean. Leery Permissible Use - The subject property is zoned C, Commercial Zoning District. "C" commercial district. The purpose of the"C" commercial category is to provide commercial activities that will serve the needs of local residents and tourists, as well as uses that will enhance the tourist industry in the city and the county. It is also the intent of the city to encourage commercial uses that reflect the historic, aesthetic, and natural attributes of the Florida Keys. The maximum floor area ratio (FAR) for this category is 0.60 square feet. Planned developments in accordance with the city's land development regulations shall be allowed and encouraged in the commercial district. For further details, the reader is referred to the City of Layton Land Development Regulations. Financially Feasible Use - The determination of financial feasibility is dependent primarily on the relationship of supply and demand for the legally probable land uses versus the cost to create the uses. As previously discussed, vacant land in this Commercial zoning district is limited. The general commercial uses in the subject's area were previously discussed. It is the appraiser's opinion that, if vacant and available, development of the subject site for Commercial Use/Mixed Use would provide a positive net return to the site and would therefore be considered feasible. Maximum Profitable Use - In the final analysis, a determination must be made as to which feasible use is the Highest and Best Use of the parcel as if vacant. It is my opinion that the Highest and Best Use of the subject Appraisal Company of Key West Page 46 Appraisal Report 68300 Overseas Highway, Layton , FL site would be for commercial office or governmented use, as permitted by zoning with maximization of the site. "As Improved": In the final analysis, the appraiser must determine if the land alone is worth more than the existing property "As Is" to determine if the improvements contribute to the overall property. The subject site has prime frontage on the Overseas Highway or US Highway 1, offers good highway access. The subject's location and layout are attractive, especially to Office or Governmented use. The subject is adjacent to the fire station and City Hall. The existing improvements still make a substantial contribution to the total property in excess of the value of the site. Therefore, no alternative legal use would economically justify removal of the existing improve- ments. Thus, in my opinion the subject property's Highest and Best Use is "As Improved" as a mixed use property. The subject could be easily converted to a governmental use. Appraisal Company of Key West Page 47 Appraisal Report 68300 Overseas Highway, Layton , FL APPRAISAL DEVELOPMENT AND REPORTING PROCESS SCOPE OF WORK There are three typical approaches to value to consider in each appraisal assignment. The three traditional approaches to value are the Cost Approach, the Sales Comparison Approach and the Income (Direct Capitalization and/or Discounted Cash Flow) Approach. The three approaches to value are not always applicable to the assignment; however, the three approaches to value are always considered. All appraisals begin by identifying the subject property (property to be appraised) and the appraisal problem. Data relevant to the subject property is obtained from various sources including but not limited to: the Monroe County Property Appraiser's Office, surveys, building plans and specifications and the property owner. If possible, more than one source is utilized to confirm information. Improvements, if applicable, are inspected and measured by the appraiser. If and when building plans or sketches are made available, the measurements are verified for accuracy. Land size is based on recorded plat maps, Monroe County public records, legal descriptions or surveys (when available). The local geographical market was researched and analyzed. The appraiser describe the building improvements in detail, if applicable; these descriptions are based on a physical inspection and/or plans and specifications. The appraiser is not a contractor nor structural engineer; therefore, structure soundness or damage cannot be warranted. The appraiser will note any apparent or potential problems such as deferred maintenance, water damage or spalling. The Cost Approach consists of combining the estimated value of the land, based on comparable sales, with the depreciated value of the improvements. The vacant land sales are always inspected. The cost of the improvements is estimated by utilizing a cost service, Marshall and Swift/Boeckh, LLC, plus knowledge of costs to construct obtained from local contractors. Exterior site visits of the comparable improved sales are always made; interior walk-through visits are made when possible. Sales prices for the comparable sales are obtained from the public records. Prices are customarily confirmed with a party to the transaction, i.e., buyer, seller, closing agent/attorney, or real estate agent. The public records are researched for mortgage terms and information. The comparable sales are researched utilizing First America Real Estate Solution and Realist.com, (FARES), FLEX MLS and LoopNet.com are computerized MLS (Multiple Listing System). All sources use data from the Monroe County Property Appraiser's Office, as well as, from the public records. The data is verified and compiled into sale sheets located within this report. Additional data sources include: newspaper clippings and the National Multiple Listing Service. Real estate agents in the market area are interviewed for the most current information on sales and listings. All of the information is analyzed in preparing the report and is utilized in supporting the indicated value. Appraisal Company of Key West Page 48 Appraisal Report 68300 Overseas Highway, Layton , FL The reader of the appraisal should be made aware that the valuation contained herein is based on a specific date. The value estimated on the specified valuation date will likely differ from the value one, two or three years in the future or in the past. The reader is advised to review the Assumptions and Limiting Conditions in Section, as well as, the Certificate of Value. Finally, the three indicated values developed by the approaches, are reconciled to produce the final estimate of value. A brief description of each of the approaches to value follows: Appraisal Company of Key West Page 49 Appraisal Report 68300 Overseas Highway, Layton , FL THE COST APPROACH The Cost Approach is based on the principle of substitution, the belief that a purchaser would not pay more than the cost of acquiring a similar site plus the cost of construction a replica or similar structure. "The Cost Approach is based on the understanding that market participants relate value to cost. In the Cost Approach the value of a property is derived by adding the estimated value of the land to the current cost of constructing a reproduction or replacement for the improvements and then subtracting the amount of depreciation (i.e., deterioration and obsolescence) in the structures from all causes. Incentive for coordination by the entrepreneur is included in the value indication. This approach is particularly useful in valuing new or nearly new improvements and properties that are not frequently exchanged in the market. Cost Approach techniques can also be employed to derive information needed in the Sales Comparison and Income Approaches to value. In preparing this appraisal, the appraiser inspected the subject site and both the exterior and interior of the building improvement. Information on comparable land sales was gathered, confirmed, and analyzed. The subject property is utilized as apublic library. The Cost Approach consists of combining the estimated value of the land, based on comparable sales, with the depreciated value of the improvements. A purchaser would normally give little consideration to this value approach when his primary interest in the property is its income stream and desirable rate of return on his equity. The two major exceptions might be in the case of apurchaser who is acquiring a property for his own use and occupancy, an owner -user property, or in valuing a special use property. In the case at hand, a reliable valuation of the subject site was not possible due to the lack of recent land sales in the market area, especially within the C, Commercial zoning district in the City of Layton. Furthermore, due to the age and condition of the structure, a reliable depreciation estimate would be difficult. Thus, the Cost Approach was considered, but not deemed applicable. Appraisal Company of Key West Page 50 Appraisal Report 68300 Overseas Highway, Layton , FL THE INCOME APPROACH The Income Approach to value presumes that no prudent buyer will pay more for the subject property than the capitalized rental value attainable through ownership of the property. The Income Approach represents the value an owner may consider paying in order to gain the benefits and profits of the business as well as that of the real estate. The buyer will be willing to pay the present value of what he considers those future benefits to be. This approach has greatest application when the property being appraised is a type that purchasers buy for investment purposes. In the case at hand, the subject property is 100% tenant -occupied. The Direct Capitalization Method takes into consideration the current estimated net income, which is capitalized at a rate of return for similar property or investments of comparable risk, to indicate the price that a prudent and knowledgeable investor would be justified in paying for ownership. The traditional Direct Capitalization Method was considered appropriate in valuing the subject property. This report contains the results of my investigation and analysis made in order to furnish an estimate of the "As Is " Market Value of the Fee Simple Estate of the Subject Property. The Fee Simple Estate is the unencumbered value of the subject property; basically, market rents and terms are considered with no regard to existing leases and terms. The subject property consists of an owner occupied property, which is not encumbered by any long term leases. Therefore, only the Fee Simple Interest is included herein. However, the reader is cautioned that a title search was not made; thus, no other encumbrances are considered herein. Therefore, a one-year stabilized net income is estimated for the property based on market data and comparison to most comparable rental data available was considered and will be capitalized into value utilizing a market extracted overall capitalization rate (OAR). In short, the Direct Capitalization Method utilizes the net annual operating income that the property is expected to produce. This estimated net income is capitalized, according to prevailing rates of return on similar property or investments of comparable risk, to indicate the price an investor would be justified in paying for ownership. Historical financials for the subject property were not available. Appraisal Company of Key West Page 51 Appraisal Report 68300 Overseas Highway, Layton , FL Analysis of Potential Rental Income from Office. Storage, Work Shop and Open Parking The subject property has a small floor area ratio (FAR) or building to land ratio. The office has a small amount of parking in front; thus, the additional vacant lot would likely be utilized for parking and open storage. The subject compasses 18,750 square feet of site area and 2,625 square feet of gross building area. The office, residential, workshop and storage uses are all intertwined. Therefore, a tenant would likely occupy the entire area, except for all of the dockage. As a result, I have researched leases of larger site areas including smaller gross building areas, as open storage is the driving factor in these rentals. Therefore, Iprojected the potential rent income based on the following rent comparables. Office/Warehouse & Outdoor Storage Rent ConVmbles Upland CBA Unit Nbnthly Annual No. Address Area(SF) (SF) Use Base Rent Rent CBA Land ReIIbSF ReIIbSF Terms 1 ' 89111 Overseas Hwy_, Plantation Key 1 18,000 ' 2,191' Office/Service/Storagey_ $3,287.081 $39,4451 $18.00 $2_19 Triple Net* --1-------------L---L---------- -----L-----1----- _ 2 'Parcel 1, 5550 5th Ave., Stock Island 1 17,0001 0' Gen. Contractor Open Stg.----+— $4,250.001 $51,0001 $0.00 $3_00 Triple Net — 3 15509 Sth Ave., Units 1&2 Stock Island ! 12,6781 1,756:1 Marine Service/Engine Repair--+— $3,000.001 $36,000 $20.50 $2_84 Triple Net — 4 102 Ave. A, Marathon 17,950 0! Boat Storage & Dockage 1 $5,489.501 $65,8741 $0.00 $3.67 Triple Net *Comp Adj. to Triple Net Terns Mean $4,006.65 $48,080 $9.63 $2.93 Median $3,768.54 $45,223 $9.00 $2.92 Minimum $3,000.00 $36,000 $0.00 $2.19 Nbximum $5,489.50 $65,874 $20.50 $3.67 Based on these comparables, it appears that the base rent for similar properties range from $2.19 to $3.67 per square foot of site area per year with a mean at $2.93 and a median at $2.92. Thus, based on a market rent comparables, I projected a market rent at $3.00 per square foot, which is at the mid range of the spectrum. This equal an annual rental of $56,250 or $4,687.50 per month. In addition, the prof ected annual rent is $21.43 per square foot of gross building area. Thus, the rent projection is well supported. Iprojected the overall upland lease on a triple net basis with the tenant paying utilities, his/her pro rata share of the real estate tax, hazard insurance, plus repairs and maintenance based on total revenue. Triple net rent is typical in the market area for most commercial properties. Frictional vacancy and collection loss was estimated at 5%. Appraisal Company of Key West Page 52 Appraisal Report 68300 Overseas Highway, Layton , FL COMPARABLE RENTS MAP Appraisal Company of Key West Page 53 Appraisal Report 68300 Overseas Highway, Layton , FL Rent Comparable No. 1: 89111 Overseas Highway, Plantation Key, FL Rent Comparable No. 3: 5509 5�' Ave., Units 1 & 2, Stock Island, FL Rent Comparable No. 2 Parcel 1, 5550 5' Ave; Stock Island, FL Rent Comparable No. 4: 102 Ave. A, Marathon, FL Appraisal Company of Key West Page 54 Appraisal Report 68300 Overseas Highway, Layton , FL The rent comparables are largely leased on a triple net basis, wherein the tenants are responsible for all utilities. The landlord is responsible for real estate taxes, property hazard insurance, repairs and maintenance, plus management and reserves for replacement. Most of the comparables are leased similarly or have been adjusted to modified gross terms. Analysis of Potential Wet Slips Income: The subject has 150 linear feet of dockage along the concrete seawall extending the width of the lot with frontage on a deepwater canal, which leads out eventually to the Atlantic Ocean with no fixed bridges. In order to allow for adequate space for docking, I conservatively estimated three 30 foot slips. The vacant lot does have some mangrove fringe which impedes dock space. Below are comparable wet slips dockage rates charged by competing marinas and small dockage facilities. Typical Monthly Wet Slip Dockage Fees Rent Per Per Comp Lin. H. Lin.1L No. Marina Summer Winter Amenities 1 IKeys Boatworks, Marathon i $11.50 i $13.50 iRestrooms, Cable, Water, Pump -out -----------------------------------------T------------------------ 2 :Boot Key Mama, City of Marathon $14.50 $19.75 �Restrooms, Water, Pump -Out msW at -------=-----------------------=------=-------=---- 3 Shelter Bay Marina, Coco Plum $11.50 $15.50 -------------- Restrooms, Water, Pump -Out -------=-----------------------=------=-------=------------------------ 4 --------------------------------------------------- Sombrero Resort, Key Colony $16.50 $24.60 Restrooms, Water, Pump -Out msW at -------------- 5 'Castaway Restaurant, Marathon ' $13.44 ' $22.84 'Dockage Adjacent to Restaurant Mean $13.49 $19.24 Median $13.44 $19.75 Mnimum $11.50 $13.50 Maximum $16.50 $24.60 Current monthly rental rates for wet slips of comparable properties range from $11.50 - $24.60 per linear foot of boat length. I have projected a year -around market rate at the lower -end of the range at $15.00 per linear foot, since the subject does not have typical marina services and amenities. Furthermore, Ihave estimated that the average boat length is 30 feet. I project the frictional vacancy and collection loss at 10%, which is considered conservative in this market; however, many boats were damaged or destroyed in Hurricane Irma. This potential dockage income is based on a gross basis with the landlord paying all the expenses. Currently, one slip is owner -occupied. The remaining slips appear to be vacant. Appraisal Company of Key West Page 55 Appraisal Report 68300 Overseas Highway, Layton , FL Potential Market Rent (Fee Simple) Analysis: Market rent was projected after interviewing market participants including landlords and rental agents. The potential rent was estimated at the lower to mid range of the comparable rents due to the subject's location on Layton a very small city in the Florida Keys. Wet Slips: 3 30 $15.00 S450.0011$16,200 10% 11 $14,5� Totals for Wet Stora e: 3 30 $16,200 $14,58 �tt%1�69,6 4�e'1� " 'l nk� l� $L�)�/3�r Grc �" �iii�� �"i � ;' �iuu��`Iuctrrn Office/Apt. & Land 1 18,750i $4,687.50 $3.001 $56,2501 5% i $53,43 Totals for Commercial: 1 18,750 $4,687.50 $56,250 $53,43 Grand Totals : 1 $72,4501 1 $68,01 Vacancy and Collection Allowance: Vacancy & Collection losses include allowances for vacancy due to tenant turnover or loss of rents from a tenant who vacates the building or is late with payments. Typically, the market is experiencing a 3% to 10% vacancy and collection losses on commercial retail/office use properties on an annual basis. The higher end of the spectrum is for large, multi -unit structures. Due to the subject's good highway front location and reasonable rental rates, I estimated a fractional 5% vacancy and collection loss rate for the commercial units. As noted earlier, 10% vacancy was projected for the dockage. Most dockage was running at close to full occupancy prior to Hurricane Irma. Reimbursables: In my analysis, I considered the upland tenant to be 83% pro-rata share of expenses based on the total effective income. In my fee simple analysis for the real estate taxes, building insurance and repairs and maintenance, I estimated a reimbursable income equal to a percentage of the total effective income of these income sources, adjusted for vacancy and collection losses of 5.0%, which would be the landlord's share. Expense Analysis: In my analysis, I considered the landlord's expenses for the property, which include real estate taxes, building hazard insurance, exterior building and common area maintenance, property management and reserves for replacement. Real Estate Taxes: The real estate tax assessment for the subject property for 2017 is $312,835, for the entire property the 2017 tax assessment represents approximately 45% of my final opinion of "As Is" Market Value of the subject property. As the total appears to be understated, I projected this expense equal to the a projected assessment of 80% of my final opinion of value of $700,000. Therefore, the assessment is $560,000 Appraisal Company of Key West Page 56 Appraisal Report 68300 Overseas Highway, Layton , FL times the current millage rate of 11.4383/1,000, plus a waste water non -ad valorem assessment of $498.32, resulting in a total tax burden of $4,076.61. Building Insurance: This expense is for fire, windstorm and flood insurance for the building improvements. Typical insurance rates in the market area indicate $2.00 to $3.00 per square foot of building area for similar structures like the subject in similar locations. The subject's historical insurance expense was not available. I conservatively estimated this expense at $6,563 or $2.50 per square foot of gross building area due to the subject's being in a flood zone, its size, and construction. Building Maintenance and Repairs Expense: This expense includes all general operating expenses, including building repairs and maintenance for the subject property. This expense typically ranges from $1.00 to $2.00 per square foot of building area for similar properties. Historical data was not available. Considering the size of the subject property and its current condition, I utilized $1.50 per square foot of gross building area or $3,938 for the repairs and maintenance expenses for the subject. Utilities Expense: In the case at hand, the utility expenses are paid 100% by the tenant. Property Mana eg ment: This expense includes the collection of rents and actions necessary to keep the property in good condition and the owner informed. This expense is based on apercentage of Effective Gross Income. Typical management expenses range from 4.0 to 10.0 percent of Effective Gross Income for commercial properties, depending on the size of the building and the number of tenants. As the subject is presently a three bay property, I estimated a property management fee at 5% of effective gross income. Reserves for Replacement: This expense includes items which have a shorter economic life than the building. Reserves for replacement typically range from 1.0% to 2.5% of Total Operating Income. I estimated a conservative rate of 2.0% of Total Operating Income due to its large amount of concrete seawall and large flat roof cover. My projection of $1,635 or $0.63 per square foot of gross building area is well -supported by the RealtyRates.com Investor survey-4th Quarter 2017, which indicates that the National Surveyed Reserve Requirements ranged from $0.28 to $0.72 with a mean at $0.52 per square foot of gross building area for office uses. My projection is well within the range. Appraisal Company of Key West Page 57 222� Ra 2e o z 6 J00 Uv � e * Hi &»a,fa t g,Ff 9de=t, 2017a , Copyright 2017 RcaltyRatcM" Appraisal Company oKey West Page 5 Appraisal Report 68300 Overseas Highway, Layton , FL Income and Expense Summary: A Projected Fee Simple, Income and Expense Statement is shown for the subject property. Potential Gross Commercial Rental Income: $56,250 Less 5% Vacancy & Collection Allowance: $( 2,813) Effective Gross Commercial Rental Income: $53,437 Potential Dockage Rental Income: $16,200 Less 10% Vacancy & Collection Allowance: $( 1,620) Effective Gross Dockagel Rental Income: $14,580 Total Effective Rental Income: 1 $68,017 Plus Reimbursable Income: Real Estate $5,730 Insurance $5,447 Repairs & Maintenance $3,269 Total Reiinbursable Income $14,446 Less 5% Vacancy & Collection Allowance: $( 722) Total Reimbursable Income: $13,724 Total Operating Income: 1 $81,741 Less Operating Expenses: % of EGI % of TOI $/SF of GBA Real Estate Incl. Non -Ad Valorem $6,904 10.15% 8.45% $2.63 Insurance $6,563 9.65% 8.03% $2.50 Repairs & Maintenance $3,938 5.79% 4.82% $1.50 Property Management $3,401 5.00% 4.16% $1.30 Reserves For Replacement 1 635 2.40% 2.00% $0.62 Total Expenses: $22,441 32.99% 27.45% $8.55 Net Operating Income: Capitalization: Capitalization can be defined as a method of converting an income stream into a capital sum by dividing the net income of the future income stream by an overall rate (OAR) or capitalization rate. The result should be the indicated value of the total property or the income -producing package. The capitalization rate was determined by the Mortgage Equity Method, from capitalization rates derived from the market, and from Debt Coverage Analysis as detailed as follows. Appraisal Company of Key West Page 59 Appraisal Report 68300 Overseas Highway, Layton , FL National survey rates from RealtyRates.com was analyzed as follows. '4th Ouw to 2017 Data Copyright 2018 RcaItyRat co.com TM Band of Investment Model or Mortgage Equity Method: An overall rate based on the Band of Investment Method was estimated at 7.57%. Assume a mortgage of 70% of the value, 5.5 % interest with a 25-year term, the mortgage constant will be 0.0702; a down payment of 30% as equity and an Equity Capitalization of 8.5%. Comparable Sales Analysis: I have estimated a 7.5% capitalization rate for the subject property via the Comparable Sales Method, based on an analysis of local overall rates, which range from 5.5% to 8.8% with a mean of 7.3% and a median of Appraisal Company of Key West Page 60 Appraisal Report 68300 Overseas Highway, Layton , FL 7.2%. The local capitalization or overall rates are noted in the Sales Comparison Approach to value. According to RealtyRates.com, National capitalization rates range from 4.61% to 11.97% with a mean at 11.97% with a mean at 8.97%. Debt Coverage Analysis: An overall rate based on the Debt Coverage Method was estimated at 7.40%. After analysis of current financing availability for similar properties with quoted rates ranging from 4.0% to 6.5% and loan -to -value ratios of from 70% to 80%, I estimated an 7.02% mortgage constant for the subject property with a loan -to - value at 70.0%. A conservative debt coverage ratio of 1.50 was considered appropriate for the subject according to a survey of local commercial banks. Thus, an overall rate based on the debt coverage analysis was estimated. A reconciled Overall Rate (OAR) of 7.50% has been estimated for the subject property with heavy weight being given to the Comparable Sales method as it is most reflective of the local market. The following chart summarizes the three methods utilized. Appraisal Company of Key West Page 61 Appraisal Report 68300 Overseas Highway, Layton , FL Development of Capitalization Rate Loan Ratio 70.0% Loan Tenn (Years) 25 Loan Rate 5.00% Equity Capitalization Rate 8.50% Band of Investment Method Capital Source Mortgage Loan Equity Funds Overall Rate Overall Rate Via Band of Investment Method (Rounded): Debt CoveraLle Analvsis Debt Coverage Ratio X Loan to Value Ratio X Mortaaae Constant Overall Rate Overall Rate Via Debt Coverage Analysis (Rounded): Market Derived Capitalization Rates: Realtv Rates .Com 4th Ouarter 2017: Low High Average Median Overall Rate Via Market Approach (Rounded): Portion Rate 70.00% 7.02% 30.00% 8.50% 1.50 70.0% 0.0702 7.37% National Retail Un-Anchored Centers 5.31 % 14.65% 10.89% N/A Cap. Rate 4.91 7.46%1 1 7.50% 1 1 7.40% 1 Market 5.8% 8.8% 7.3% 7.2% 7.50% 7.50% � Appraisal Company of Key West Page 62 Appraisal Report 68300 Overseas Highway, Layton , FL Asa result, I estimated a 7.5% capitalization rate for the subject property, which is well -supported by market data. The estimated value via the Income Approach is as follows. Subject Property Subject GBA: 2,625 Subject Site Size (SF): 18,750 Net Operating Income: $59,300 Value Per Value Per NOI Divided by Cap Rate: 7.50 % SF of GBA SF of Land Indicated "As Is" Value (Rounded): $790,000 $300.95 $42.13 Less Costs to Cure (Hurricane Damage) (Rnd): ($80,000) Indicated "As Is" Value: $710,000 $270.48 $37.87 Conclusion: In summary, this technique is viewed as along -term investment valuation, subj ect to definitions, assumptions and limiting conditions. The Income Approach is most applicable to properties that are purchased for rental value. In the case at hand, the subject property has historically been utilized as a mixed office/residential and storage use property. As such the Income Approach was considered applicable and weighted heavily in the final reconciliation. "AS IS" VALUE OF TH LEASED FEE INTEREST OF THE SUBJECT PROPERTY VIA THE INCOME APPROACH, AS OF February 12, 2018 (Rounded) IS:.......... $710,000 Cost to Cure: The Cost to Cure adjustment based on needed repairs due to Hurricane Irma is explained in detail earlier within the Improvement Analysis Section of this report. Appraisal Company of Key West Page 63 Appraisal Report 68300 Overseas Highway, Layton , FL THE SALES COMPARISON APPROACH This approach to value is based upon the principal of substitution; that is, when a property is placed in the market, its value tends to be set at the cost of acquiring an equally desirable substitute property, assuming no costly delays in making the substitution. The Sales Comparison Approach bases its value indication on sales of other similar properties in the area. These sales are analyzed and compared to the subject property. The Sales Comparison Approach bases its value indication on recent sales that are pertinent to the value of the subject property. From these comparable sales, the appraiser must extract meaningful "common denomi- nators" to be applied to the subject building. Typically, the sale price per square foot of gross building area, per square foot of land area and the overall sale price are the most common denominators used in estimating the value of the properties similar to the subject. Adjustments are made to the indicated sales price for differences between the sale and the subject, when possible. The more similar the sale is to the subject property, the fewer required adjustments, and the better it serves as an indicator of value. Market Data: The subject property consists of 2,625 square feet of gross building area located on a 18,750 square feet of total site area. Extensive research has revealed a reliable number of potential comparable sales. Although the sales are not identical, they are considered representative of the subject property. Due to the availability of the commercial use properties, and the owner -user nature of the subject property, this approach was given heavy weight in the final reconciliation. Appraisal Company of Key West Page 64 ,, I I I MIFIllir "MMEM M-. 03171111iiiii III I . I . I 24: 2 C O C�j CA Appraisal Report 68300 Overseas Highway, Layton , FL SALES COMPARISON COMPARABLES MAP itv Appraisal Company of Key West Page 66 Appraisal Report 68300 Overseas Highway, Layton , FL Sale Not-100460 Overseas Highway Largo: This recent comparable consists of a rectangular, interior site with 100 feet of frontage along the Overseas Highway at approximately mile marker 100.5 and it contains 21,418 square feet of upland area. The site is improved with a one and one-half story mixed -use CBS building, which contains 8,200 square feet of gross building area. The current unit mix is comprised of medical office, office, retail and a two bedroom/two bathroom upstairs apartment. This is an arm's length transaction, wherein John H. Smith, Trustee sold the property to Commercial Center of the Florida Keys, LLC. I recently appraised the property. This comparable was purchased for conversion to a medical clinic. Sale No.2 -13367 & 13369 Overseas Highway, Key Largo: This is the recent sale of a mixed -use medical office and residential apartment property encompassing two detached CBS structures with a total gross building area of 5,640 square feet. The facility is situated on a 1.29 acre upland site, plus there is an additional 0.91 acres of environmentally sensitive land. It appears that the existing leases were below market. The sale was an arms length transaction, all cash, wherein Alan G. Schmitt, Inc. Sold the property to 13367 Overseas Hwy.,LLC. A local doctor purchased the property. Appraisal Company of Key West Page 67 Appraisal Report 68300 Overseas Highway, Layton , FL Sale No. 3 - 81981 Overseas Highway, Fpper Matecumbe: This comparable parcel consists of a rectangular -shaped, interior parcel with approximately 300 feet fronting along the southerly side of Overseas Highway, aka U.S. Highway No. 1, plus 300 feet along the northerly side of Old State Road 4A. The site extends 167.46 feet in depth and contains 50,238 square feet or 1.15 acres of upland area. The site encompasses three contiguous platted lots. The property is commonly known as Island Silver and Spice, a former upscale retail department store featuring clothing, swim wear, shoes, jewelry, house wares and gifts. The property is located at 81981 Overseas Highway, at about Mile Marker 82, Islamorada Florida. The property has a prime location within the downtown central business district of Islamorada, Village of Islands with excellent visibility from both the northbound and southbound lanes of Overseas Highway. The comparable improvements consist of a one-story CBS/masonry structure with awood frame addition that contains 13,179 square feet of gross building area. The building encompasses several retail areas, a retail mezzanine, customer and private restroom facilities, storage rooms, and offices. There is a covered entry/exit at the easterly side of the building, which is accessible from the large parking lot on the easterly two-thirds of the overall site. According to the Monroe County Property Appraiser's records, the original portion of the building was constructed in 1956. This sale was an arm's length transaction. Island Silver and Spice, Inc. sold the subject to RTG Islamorada Retail Ventures, LLC via a warranty deed that was recorded in Official Record Book 2788, Page 21 in the Monroe County Public Records. I appraised this comparable in the past; it has been recently vacant. The property will be redeveloped for a national tenant. Appraisal Company of Key West Page 68 Appraisal Report 68300 Overseas Highway, Layton , FL Sale No. 4 - 68100 Overseas Highway, on: This is the sale of a two-story mixed -use CBS structure containing 6,544 square feet of gross building area. There is a convenience store at the first level with apartments above. The improvements are situated on a 22,754 square foot highway front site within the City of Layton. The parcel does have a small amount of canal frontage. This was an arm's length transaction. This comparable is located one-half block westerly from the subject property. Sale No. 5 - 24752 Overseas Highway, Summerland Kew This is the sale of a multi -tenant commercial office/retail building. This property is within Summerland Key, within very close proximity (only four lots westerly) to the subject property. It is located on the same canal as the subject property, therefore, includes similar dockage. The one-story CBS/masonry building contains 3,690 square feet of gross building area. According to the Monroe County Property Appraiser's records, the building was constructed in 1984. This was a arm's length conventional financing transaction. Appraisal Company of Key West Page 69 Appraisal Report 68300 Overseas Highway, Layton , FL Sale No.6 - 4801 Overseas Highway, Marathon: Although this property is identified by one County parcel number, it consists of an improved parcel, plus a vacant parcel. The property consists of two rectangular -shaped sites, with each encompassing 6 contiguous lots and each parcel fronting approximately100 linear feet on the southerly side of U.S. Highway No. 1, also known as the Overseas Highway; each parcel is approximately 200 linear feet in depth, with 100 linear feet fronting along the northerly side of Lynmeade (Ocean) Boulevard. The vacant parcel also fronts 200 linear feet along the westerly side of 49t' Street. Each of the parcel's site area is 20,000 square feet, for an overall total area of 40,000 square feet. Parcel A is improved with a CBS building containing a total of 6,944 square feet of gross building area for retail sales. The building has an unfinished, partially below grade, storage area of about 7,284 square feet. This area has an unpaved floor and lacks lighting and air-conditioning, therefore, it has been considered as an amenity. The structure contains a large, open retail sales area, two, 2-fixture restrooms with a sales office/counter, a kitchenibreak area and storage area in the southwesterly end of the subject building. This was an arm's length transaction wherein was conventional financing. This comparable set the upper -limit of the value range. I appraised this property at the time of sale. Units of Measure: Typically, mixed use properties are analyzed via the sales price per square foot of gross building area. However properties with lower FARs (floor area ratios) or building to land ratios, price per square foot per upland site area tends to be a tighter correlation. The price per square foot of site are is a more reliable unit of measure, in the case at hand. Discussion of Adjustments: Market Conditions: Based on the sale and resale of some of the comparable sales properties in Florida Keys, the data indicates that values generally stabilized with annual appreciation at an average of 2.3% and median at 3.6% per annum. Appraisal Company of Key West Page 70 Appraisal Report 68300 Overseas Highway, Layton , FL As a result, sales which transpired over a year ago were adjusted for positive market conditions at an appreciation rate of 3% per year. An analysis of the comparable sales/resales activity is as follows. Previous Previous Annual Difference 'F 2017 Assessed " 2017 Sale Listing SP/LP Sales Sales 2ndPrice/ Change Appreciation In Dates Assessed Asses. Per S.F. Tag Bur No. DOM Price Ratio Date Price Sg Ft. Price Rate Years Value Ratio GBA Burden S.F. Sale 1 58! $1,300,000! 100.00/0! N/A ! N/A ! N/A N/A ! N/A! N/A $1,032,058i 79.4% $ 125.86 ! $ 8,876.42 ! $ . -----r-------------Y---------------�------ ----?------------------ Sale 2 i951 $1,000,000 110.0% i 12/ U95 $580-----,000 -----$0 5--3 $52Q000---------- 3.0% i 21.84 $979,4911 89.0% i $ 173.67 $ 9,223.19 i $__ Sale 3 i 1311 $2,799,0001 99.20/o' 5/1/89' $824,5001 $0.31' _ $1,840,5001 4.3%1 27.79' $2,291,5281 _ 82.5%1 $ 173.88 ' $ 22,058.94 ' $ Sale 4 1601 $1,295,0001 95.1%1 N/A ! N/A ! N/A ! N/A ! N/A ! N/A ! $1,002,23I i 81.4% i $ 153.15 ! $ 11,463.82 ! $ N/Ai N/Ai N/Ai 5/1/09i $775,000i $1.07 $5O,000i 0.90/0i 7.00i $582,459 80.3% $ 157.85 i $ 5,512.11 j $ _SaleS Sale i Oi $2,956OOOi 95.1%i 5/30/Oli $971,000i $0.37i $1,679,000i 6.9%i 14.991i $887,5571 31.6%i Subject Mean 89 99.9% 3.3% 74.1% $152.04 $10,915.33 Median 95 99.2% 3.6% 80.9% $155.50 $9,049.81 Minimum 0 95.1% -0.9% 31.6% $125.86 $5,512.11 Maximum 160 110.0% 6.9% 89.0% $173.88 $22,058.94 Property Rights: The subject is not encumbered by any leases, and is owner -occupied. Therefore only a Fee Simple analysis is warranted herein. Comprables 3 through 6, were owner occupied or no long-term leases in place; thus, they were considered Fee Simple. Sale 6 was leased, but the tenant purchased the property. Thus, it really sold Fee Simple. Comparables 1 and 2 did sell with leases in place (Leased Fee). These leases were considered to be below market; which is inferior to the subject; thus apositive adjustment was made. Conditions of Sale: All of the sales were arm's length transactions; thus, no adjustments were warranted herein. Financing: All of the comparable sales were considered cash equivalent, either cash, conventional or private financing (purchase money mortgage) at market rates. Thus, none of the comparables required adjustment for financing. Floor to Area (FAR): The subj ect property has a lower FAR (Building Area to Land Area Ratio). Comparables 2 had 6 have similar FARs; thus, they were not adjusted. Typically, a sale with a higher FAR has a higher price per square foot of site area, which is the most reliable unit of measure, in the case at hand. Sale Nos. 1, 3, 4 and 5 have higher FARs; thus, they were negatively adjusted. Upland Site Area: Market data indicates that the larger the site area, then the price per square foot of site area, decreases resulting in an inverse relationship. Therefore, the smaller site areas require a negative adjustment. The smaller the Appraisal Company of Key West Page 71 Appraisal Report 68300 Overseas Highway, Layton , FL site area, the higher the price per square foot of site area. Sales 2, 3 and 6 are larger; thus, positively adjusted, while the other sales are considered overall similar in site area. Highway Frontage: The subject has frontage along Overseas Highway in the City of Layton. All of the comparables are located on -the -highway; thus no adjustments were made. Water Frontage: The subject has 150 linear feet of deepwater, canal frontage. Sales 1, 2, 3 and 6 are non -waterfront sites, therefore, they required positive adjustment. Sales 4 and 5 have similar canal frontage, therefore considered similar. Overall Location: The subject is located in Layton, the smallest city in Key West, and one of the smallest cities in the State of Florida. Sale 3 is located only one-half block westerly from the subject. All of the other sales are located in superior areas; thus, negative adjustments were made. Zoninz: The subject is located within the C, Commercial Zoning District. Each of the comparable sales were considered similar, therefore, they did not require an adjustment. Condition/Quality of Construction: The subject property is considered to be in above average condition. Sales 1, 3 and 4 were slightly inferior, therefore, required a positive adjustment. The following grid summarizes each sale and shows the necessary adjustments as previously described: Appraisal Company of Key West Page 72 ,, I I I MIFIllir "MMEM M-. 031711111ill III I . I . I 2 C I lop I 4 Ic c ai lop v5 O u t I cd I PI -,I '-I fn N 4n � olpl to to 6, -1 C=�j up "t to C= mt 4n It 21 C= C= j c, 'It N "t o i 3 .. ....... . -t4 is "o 118, o ow A.44 o 41 P C> Appraisal Report 68300 Overseas Highway, Layton , FL Valuation Conclusion: In order to estimate the value of the subject property, we analyzed recent sales of commercial and commercial/residential mixed -use properties. The subject is an owner -occupied office and residential property, wherein the uses share some common areas. On the preceding table, a detailed adjustment grid is presented for the subject property. The comparables indicate an adjusted value per square foot of site area for the subject property from $18.36 to $59.62 per square foot with a mean at $43.91 and a median at $47.39. Based on analysis and adjustments to the individual comparables, Sales 2, 4, and 6 were given the most weight, as overall they were considered the most similar. The other Sales were moderately weighted. The weighted average of these comparables equaled $41 (rounded) per square foot of site area. Therefore, in my opinion the subject's overall value is calculated below, which is considered reasonable and well -supported. 7 1� otf iCe;;, 1Vl111` $41.00 X 18,750 = $768,750 "As Is" Value via the Sales Comparison Approach (Rounded): $770,000 Less Cost to Cure (Hurricane Damage): ($80,000) "As Is" Value via Sales Comparison Approach (Rounded): $690,000 "AS IS" VALUE OF THE FEE SIlVIPLE INTEREST IN THE SUBJECT PROPERTY, AS INDICATED BY THE SALES COMPARISON APPROACH (Rounded) .................... $690,000 Note: The cost to cure adjustment was discussed earlier in detail in the Improvement Analysis section of this report. Subject Property - 68300 Overseas Hwy., Layton, FL Subject GBA: 2,625 Subject Site Size (SF): 18,750 Value Per Value Per X Indicated Price Per SF of GBA: $41 SF of GBA SF of Land Indicated Value (Rounded): $690,000 $262.86 $36.80 I have also analyzed six, recent closed sales of commercial and mixed -use sales in the Middle Keys market area. These sales all had low FARs and mostly waterfront; however, they lacked frontage on the Overseas Highway. The subject's value on a per square foot of site area is $36.80. The unadjusted comparable sales indicated a sales price per square foot of site area of $32.36 to $89.86 with a mean at $45.40 and a median of $37.49. Therefore, the subject's value is also well -supported by this group of additional sales. Appraisal Company of Key West Page 74 Appraisal Report 68300 Overseas Highway, Layton , FL RECONCILIATION AND FINAL ESTIMATE OF VALUE The following Fee Simple value indications have been developed in my analysis of the Market Data. The greatest weight is given to that approach in which the appraiser has the highest degree of confidence. This implies a minimum of assumptions and a sufficient quantity of data. The Cost Approach was not considered applicable due to the age and condition of the building improvements, as estimating depreciation would be very subject and lessen the reliability of the valuation method, plus the lack of land sales, especially in the Commercial zoning district within the City of Layton. Based on analysis of the real estate market activity in the subject property market area and considering the applicability and reliability of each of the approaches, it is my opinion that the Market Value of the subject property is most accurately indicated by the Sales Comparison Approach, due to the availability of recent similar use owner -occupied properties. Accordingly, greatest weight has been placed on the Sales Comparison Approach. The Income Approach was weighted moderately due to the income producing potential for subject property, (if leased as an mixed use property) and reliable market rental income and expense data. Based on market analysis and research, it is my opinion that the "As Is " Market Value of the Fee Simple Estate of the Subject Property, commonly known as 68300 Overseas Highway, Layton, Florida, 33001, subject to proposed split -out from larger parcel, definitions, assumptions and limiting conditions, as of Februaryl2, 2018 is: SEVEN HUNDRED THOUSAND DOLLARS ($700,000) The "As Is" Market Value for the subject property considers no personal property. Appraisal Company of Key West Page 75 Appraisal Report 68300 Overseas Highway, Layton , FL CERTIFICATE OF APPRAISAL I HEREBY CERTIFY THAT UPON APPLICATION FOR VALUATION BY: Mr. Kevin G. Wilson, P.E. Assistant County Administrator Monroe County, FL (Florida Keys) 102050 Overseas Highway Key Largo, FL 33037 I have personally examined the following property: Commonly Known as: 68300 Overseas Highway Layton, FL 33001 and based on market analysis and research, it is my opinion that the "As Is " Market Value of the Fee Simple Estate of the above Subject Property, subject to definitions, assumptions and limiting conditions, as of Februaryl2, 2018 is: SEVEN HUNDRED THOUSAND DOLLARS ($700,000) The "As Is" Market Value for the subject property considers no personal property. I ADDITIONALLY CERTIFY that, to the best of my knowledge and belief- 0 The statements of fact contained in this report are true and correct. o The reported analyses, opinion, and conclusions are limited only by the reported assumptions and limiting conditions, and are my personal, impartial, and unbiased professional analyses, opinions and conclusions. o I have no bias with respect to the property that is the subject of this report or to the parties involved with this assignment. O My engagement in this assignment was not contingent upon developing or reporting predetermined results. Appraisal Company of Key West Page 76 Appraisal Report 68300 Overseas Highway, Layton , FL o My compensation for completing this assignment is not contingent upon the development or reporting of a predetermined value or a 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. o My analyses, opinions, and conclusions were developed and this report has been prepared in conformity with the Uniform Standards of Professional Appraisal Practice. o James E. Wilson has made a site visit of the exterior and interior walk-through of the property that are the subject of this report. o No one has provided significant professional assistance to the persons signing this report. o The use of this report is subject to the requirements of the State of Florida relating to review by the Florida Real Estate Appraisal Board of the Department of Professional Regulations, Division of Real Estate. o James E. Wilson has completed the Standard and Ethics education requirements of the Appraisal Institute for Associate Members. o The reported 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. o The appraisers has performed no services, as an appraiser or in any other capacity, regarding the property this is the subject of this report within the three years period immediately preceding acceptance of this assignment. APPRAISAL COMPANY OF KEY WEST James E. Wilson, MRICS, President State -certified general real estate appraiser RZ 2164 Appraisal Company of Key West Page 77 Appraisal Report 68300 Overseas Highway, Layton , FL PROFESSIONAL QUALIFICATIONS JAMES E. WILSON, III, MRICS James E. Wilson has been a resident of South Florida since 1976. His education includes a Bachelor of Science in Business Administration with a Major in Economics from the University of Florida, 1987-1991. His ' experience in the real estate industry began in early 1992 as a residential real estate appraiser in Pompano Beach, h ; > Florida. He appraised a wide variety of single and multi -family residential properties in Dade, Broward, and Palm Beach counties over a two-year period. In the search of advancement and challenge, James Wilson moved Y p to the City of Key West, Monroe County, Florida in order to obtain experience and practice commercial real estate appraisal valuation techniques in a demanding and somewhat unique market area. Over the past 25 years James has been exposed to awide- range of appraisal projects, including highest and best use studies, complex property appraisals, and wetland and environmentally sensitive valuations including transferrable development rights. His appraisal experience includes financial and investment analysis, appraisal review, feasibility and planning analysis, as well as market research and analysis. James Wilson is a State Certified General Real Estate Appraiser (licensed to perform residential and commercial appraisals) and a General Associate Member of the Appraisal Institute. He is a member of RICS (Royal Institution of Chartered Surveyors), which is an international member organization for professionals in property, land, real estate, construction and related environmental issues. Jim is past President of the Key West Gator Club, 2013/2014 President of the Sunset Key West Rotary Club, member of Class VII Leadership Monroe, 2012 President of the Key West Chamber of Commerce, and has been elected to continue to serve on the Board of Directors of the Key West Chamber of Commerce. Jim is still an active member on the Board of Directors for the Key West Chamber of Commerce. Education: SOUTH BROWARD HIGH SCHOOL, Hollywood, FL, 1987. UNIVERSITY OF FLORIDA, Gainesville, Florida - Bachelor of Science in Business Administration - Major in Economics, 1987-1991. APPRAISAL INSTITUTE Appraisal Reporting of Complex Residential Properties, October, 1993. Persuasive Style in Narrative Appraisal Reports, May, 1994. ACE 1779 - "Special Purpose Properties - The Challenge of Real Estate Appraising in Limited Markets", September, 1996. 410 Standards of Professional Practice, Part A (USPAP), 8/97. 420 Standards of Professional Practice, Part B, August, 1997. 520 Highest & Best Use and Market Analysis, October, 1997. Non -Conforming Uses Seminar, January, 1998. 510 Advanced Income Capitalization, May, 1998. 530 Advanced Sales Comparison & Cost Approach, May, 1998. 540 Report Writing & Valuation Analysis, August, 1998. 550 Advanced Applications, February, 1999. Regression Analysis in Appraisal Practice: Concepts & Applications, Seminar, March, 2000. General Demonstration Appraisal Report Writing Seminar, March, 2000. 800 Separating Personal & Real Property from Intangible Business Assets, March, 2002. Successful Completion of the General Comprehensive Examination for the Appraisal Institute Uniform Appraisal Standards for Federal Land Requisitions, March, 2007 General Demonstration Appraisal Report Writing Seminar, August, 2007 Valuation of Conservation Easements, January, 2008. Appraising Distressed Commercial Real Estate, June, 2009 Oil Spills and Property Values, Webinar, August, 2010 Business Practices and Ethics, September, 2010 A Debate of the Allocation of Hotel Total Assets, October 26, 2010 Appraisal Institute Update, May 19, 2011 Appraisal Company of Key West Page 78 Appraisal Report 68300 Overseas Highway, Layton , FL Professional Qualifications of James E. Wilson, III (Continued) APPRAISAL INSTITUTE Appraisal Curriculum Overview (2-day General) May, 2011 Perspectives from Commercial Review Appraisers, July 20, 2011 Fundamentals of Separating Real Property, Personal Property, and Intangible Business Assets, 05/07/2012 - 05/08/2012 UAD-Up Close and Personal, November, 2014 Expert Witness Testimony: To Do or Not to Do, November, 2014 Analyze This! Applications of Appraisal Analysis, November, 2014 Florida Appraisal Laws and Regulations Update Reviewers Checklist, November, 2014 National USPAP Update Equivalent (2014-2015) , November, 2014 Purchase Price Allocations for Financial Report and Tax, April 16, 2014 Behind the Headlines, the New Real Estate Real Estate Economy, May 16, 2014 GOLD COAST SCHOOL OF REAL ESTATE Real Estate Principles, Practices, and Law - FREC Course I, May, 1992. Salesman Post -License Program, February, 1994. Mortgage Broker, Exam -Prep Program, September, 1992. AB I - Appraisal Board - Fundamentals of R.E. Appraising, 5/92. AB II - Appr. Board - Appraising Resid. & Income Properties, 2/94. AB IIb - Appraisal Board - Cert. Resid. Appraisal Course, 7/94. AB III - Appraisal Board - Certified General Appraisal Course (Income Capitalization Course), February, 1995 USPAP - Uniform Standards of Professional Appraisal Practice, 6/92. USPAP Course, September, 1995. A-102 - Plan Reading for Appraisers, September, 1995. National USPAP Update Course, June 2006 Techniques of Income Property Appraisal, June 2006 McKISSOCK DATA SYSTEMS Automated Valuation Models, October, 2000. Uniform Standards of Professional Appraisal Practice, October,2000. Factory Built Housing, October, 2000. Appraiser Liability, September, 2002. Appraising Nonconforming & Difficult Properties, September,2002. Appraiser Liability, USPAP, September, 2002. Appraising for the Secondary Market, October, 2004. Appraising High -Value Residential Properties, October, 2004. Florida Laws and Regulations, October, 2004. Limited Appraisals and the Scope of Work Decision, October, 2004. National USPAP Equivalent, October, 2004. Florida Laws and Regulations, September 2006. Disclosures and Disclaimer, September, 2006. Appraisal Trends, September 2006. National USPAP Update Equivalent(2008-2009), November, 2008. Introduction to Expert Witness Testimony, November 2008. Mortgage Fraud -Protect Yourself, November, 2008. Florida Appraisal Supervisor -Trainee Roles and Relationships, November, 2008. Florida Laws and Regulations, November, 2008. National USPAP Update Equivalent (2010-2011), August, 2010. Risky Business: Ways to Minimize Liability, August, 2010. Appraisal Company of Key West Page 79 Appraisal Report 68300 Overseas Highway, Layton , FL Professional Qualifications of James E. Wilson, III (Continued) Florida Laws and Regulations, August 2010. Florida Apprisal Supervisor -Trainee Roles and Relationships, August, 2010. The Changing World of FHA Appraising, August, 2010. Systems Built Housing: Advances in Housing for the New Millennium, October, 2012 Deriving and Supporting Adjustments, October, 2012 Introduction to Regression Analysis for Appraisers, October, 2012 Introduction to Residential Green Building for Appraisers, October, 2012 Florida Appraisal Laws and Regulations Update National USPAP Update Equivalent (2012-2013), October, 2012 Appraisal of Fast Food Facilities, November, 2016 2016-2017-Hour National USPAP Update Course, November, 2016 Managing Appraiser Liability, November, 2016 Florida Appraisal Laws and Regulations, November, 2016 Advanced Hotel Appraising -Full Service Hotels, November, 2016 VALUE INFORMATION TECHNOLOGY, INC. "Perspectives on Appraisals" FREAB Course ACE#1591, June, 1995. NORTH BROWARD BOARD OF REALTORS ACE 591 - Basics of Construction - How a Florida Home is Built II, January, 1994. Certification: State certified general real estate appraiser, as designated by the Department of Professional Regulation, State of Florida; Registration No. RZ 2164. Licensed Real Estate Salesperson, as designated by the Department of Professional Regulation, State of Florida; License No. SL 0589552 (currently inactive). Professional Associations: Key West Board of Realtors General Associate Member of the Appraisal Institute Member of RICS (Royal Institute of Chartered Surveyors), October, 2010 Member#1299389 Affiliations: Past President of the Key West Gator Club (Alumni Organization of the University of Florida Member of Class VIII, Leadership Monroe County Board Member of the Rotary Club of Sunset Key West, 2013/2014 President, 2009 Treasurer, 2010 Vice President, 2011 President-Elect,2012 President Board of Directors of the Key West Chamber of Commerce, Current Board Member Experience: WILCO VALUATIONS, P.A. d/b/a APPRAISAL COMPANY OF KEY WEST, James Wilson, President and his wife, Maria. Virginia Wilson, also a State Certified General Real Estate Appraiser purchased the Appraisal Company of Key West from Mr. Richard Padron in April, 2004. Mr. Padron has continued to be a Fee Commercial Real Estate Appraiser with the Appraisal Company of Key West, which has ensured continuity and quality control. APPRAISAL COMPANY OF KEY WEST, INC., Fee Commercial Real Estate Appraiser, April, 1994 to April, 2004. F.C.P. APPRAISAL SERVICES, INC., Senior Real Estate Appraiser and Trainer, May, 1992 to April, 1994. Appraisal Company of Key West Page 80 Appraisal Report 68300 Overseas Highway, Layton , FL Appraised various types of properties in the Florida Keys, including Retail Stores Commercial/Residential Condominiums Restaurants Full -Service Marinas/Boat Yards Strip Centers Environmentally Sensitive Acreage Office Buildings Industrial Uses Mixed -Use Properties Guest Houses /Hotels/Motels Service Stations Mobile Home and RV Parks Multi -family Projects Warehouse (including mini -storage) Proposed Developments Special -Use Properties including Schools Single-family Estates Seafood Processing Plants APPRAISER CERTIFICATION DEPARTMENT OF BUSINESS AND PROFESSIONAL REGULATION FLORIDA REAL ESTATE APPRAISAL BD RZ2164 En r Appraisal Company of Key West Page 81 Appraisal Report 68300 Overseas Highway, Layton , FL PURCHASE ORDER MONROE COUNTY i 1 BOARD OF COUNTY COMMISSIONERS 1100 Simonton Street Suite 2-213 i, Key West FL 33040 SALES TAX EXEMPT NO.. 85-8013825294C-7 v F (jU I i PHONE: N ] 14 HOR HSI:D2 SFc 0 R f h At;E3'r 3 ',152 PURCHASE ORDER NO 00 58843 PAOE `7O. I P®F COPY HMONROE COUNTY Lt7G_I 7-ER__7G DE2T I1.,J s I M "JII Car sI ..r.w'. .11, f� R00*1 ., 21.`, P LiEY WES._ FL 33U 10 a7-TNI•-T.3TN]r rrcnn. T 0 L} I ORDER DATE .:2? F11'� BUYER: mP.NIlIz -: U'ZET�.I'« REq Ni3.--.}0.5 ai ;'7 RE4 DATE ,;; •> ,j18 TERMS Ilr'I' 30' t•AY,", 0 6 JOE,9C.: rTEMa� gUANTITY_ UOM OESCRIPTIQN UNIT PRIDE EXTENSItiN LIF' 1.00 A 'iRill3=iI. =tE L'C1R`" hI' 663:, :, OVERSEAS 1=idY, 3000.0[J OC'r 3,C'00.00 _. Y-QN, FL +3001 '...... ITEM& COST CENTER ACCOUNT PROJECT PROJE:CTACCT AMOUNT PAGE TOTAL S.... 31 000.:i0 i?-,1 ^2004 53i--iC I.O;.i. 011 TOTAL 5 ll.; J PARTIAL PAYMENT FINAL PAYMENT...... INVOICE. NO. INVOICE AMOUNT. PAYMENT DESC PAYMENT APPROVAL PURCHASING AGENT Appraisal Company of Key West Page 82 68300 Overseas Highway, Layton, FL 33001 APPRAISAL REPORT REAL ESTATE APPRAISAL Of 68300 Overseas Highway, Layton, FL 33001 As of November 21st, 2017 Prepared For Mr. Kevin Wilson. Monroe County, FL (Florida Keys), 102050 Overseas Highway, Key Largo, FL 33037 Client File: 00058381 Prepared by APPRAISERS OF THE KEYS Kevin Talbott SRA, CertGen RZ2139 Nicholas Farrar MRICS, CertGen RZ3742 File Name: 13927 See pages 3, 63 - 67 for main info Page 1 of 85 File# 13927 Client File # 00058381 68300 Overseas Highway, Layton, FL 33001 APPRAISERS OF THE KEYS 3208 Flagler Ave Key West, FL, 33040 December 1st, 2017 Mr. Kevin Wilson. Monroe County, FL (Florida Keys), 102050 Overseas Highway, Key Largo, FL 33037 Re: Appraisal Report, Real Estate Appraisal 68300 Overseas Highway, Layton, FL 33001 Our File #: 13927 Client File #: 00058381 Dear Mr. Wilson. 305-296-0831 aokreal@aol.com a ppra isersofthekeys.com At your request, I have prepared an Appraisal Report for the above referenced property. This report is limited to the client and intended users identified in this report. The purpose of the report is to estimate the subject's AS IS market value, for possible purchase as of the effective date November 21st, 2017. A full external and internal inspection of the subject property was undertaken on November 21St, 2017 by Kevin Talbott, SRA. The subject being appraised is a single story, detached commercial office building located on the south side of the Overseas Highway in the City of Layton in the Middle Florida Keys. The subject comprises of a mixed -use property with an office space, storage area, and a residential unit all situated on a canal front lot. The subject is a grade level property which has suffered flood damage to the interior and wind damage to the exterior and site improvements because of the recent disaster, Hurricane Irma which hit the Florida Keys on September 101", 2017. At time of inspection the subject was owner occupied with all utilities on and working. Based on current zoning the subject is legally permitted. Market Value may be defined as 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, knowledgeably and assuming the price is not affected by undue stimulus. This appraisal conforms to the Uniform Standards of Professional Appraisal Practice (USPAP), Standards 1 and 2, and is reported in a summary format. No extraordinary assumptions or hypothetical conditions are necessary in this assignment. Nicholas Farrar, MRICS: I have performed no prior services, as an appraiser or in any other capacity regarding the property that is the subject of this report within the three-year period immediately preceding acceptance of this assignment. Kevin Talbott, SRA: I have performed no prior services, as an appraiser or in any other capacity regarding the property that is the subject of this report within the three-year period immediately preceding acceptance of this assignment. Appraisers of the Keys Page 2 of 85 File# 13927 Client File # 00058381 68300 Overseas Highway, Layton, FL 33001 Please reference pages 16-18 of this report for important information regarding the scope of research and analysis for this appraisal, including property identification, inspection, highest and best use analysis, and valuation methodology. Your attention is directed to the Limiting Conditions and Assumptions section of this report (page 13). Acceptance of this report constitutes an agreement with these conditions and assumptions. We note the following: Hypothetical Conditions: • There are no hypothetical conditions. Extraordinary Assumptions: • Hazardous Waste: No information regarding the presence or absence of hazardous waste on the subject property was provided. This appraisal assumes the absence of all hazardous waste on the subject property. If hazardous waste is found to be present on the subject property, an adjustment to the valuation contained in this report may be required. • Title Conditions: No current title commitment/ report was provided for review. It is assumed that any special exceptions, other than those noted previously in this report, are typical, and there is no adverse impact on value. The right to modify the valuation contained in this report is reserved upon review of title conditions. • The appraiser has not been provided with an environmental survey of the site. An extraordinary assumption has been used and assumes that the site does not contain significant native species or areas of wetland that would affect development of the site. • The appraiser has not been provided with a survey of the site. Information regarding current setbacks have been taken from the visual inspection of the site and from aerial photography from the Monroe County Property Appraisers website and GIS system. • Any changes in assumptions may affect value conclusions. Based on the appraisal described in the accompanying report, subject to the Limiting Conditions and Assumptions, Extraordinary Assumptions, and Hypothetical Conditions (if any), we have made the following value conclusion(s): AS IS Market Value of the Fee Simple Interest, as of November 21st, 2017 is: $455,000 (Four Hundred and Fifty -Five Thousand Dollars) Respectfully submitted, � r k .gyp i ` , Kevin Talbott, SRA Nicholas Farrar, MRICS CertGen RZ2139 CertGen RZ3742 Appraisers of the Keys Page 3 of 85 File# 13927 Client File # 00058381 68300 Overseas Highway, Layton, FL 33001 Contents Tableof Exhibits....................................................................................................................................................6 Figures: ...................................................................................................................................................................... 6 Tables: ....................................................................................................................................................................... 6 SubjectPhotographs..............................................................................................................................................7 Definitions...........................................................................................................................................................12 Limiting Conditions and Assumptions..................................................................................................................14 ExecutiveSummary: ............................................................................................................................................ 16 Scopeof Work.....................................................................................................................................................17 Preamble.............................................................................................................................................................19 PropertyHistory: .................................................................................................................................................... 19 AreaAnalysis: ...................................................................................................................................................... 21 NeighborhoodAnalysis...........................................................................................................................................25 Linkages..................................................................................................................................................................25 HousingTrends: ...................................................................................................................................................... 28 MajorEmployers: ................................................................................................................................................... 29 Unemploymenttrends: .......................................................................................................................................... 29 MarketAnalysis: ............................................................................................................................................... 30 CommercialMarket: .............................................................................................................................................. 30 Rental market and occupancy rates: ...................................................................................................................... 32 Residential: ............................................................................................................................................................. 33 HurricaneIrma: ....................................................................................................................................................... 34 Market Participant Interviews: ............................................................................................................................... 35 Strengths/Opportunities: ....................................................................................................................................... 35 Weaknesses/Threats: ............................................................................................................................................. 35 LocationMap..........................................................................................................................................................37 Identification of the Subject................................................................................................................................ 38 PropertyDescription - Site......................................................................................................................................38 Aerialand Plat.........................................................................................................................................................39 Floodmap...............................................................................................................................................................40 Property Description - Improvements....................................................................................................................41 YearBuilt: ............................................................................................................................................................... 41 ConstructionDetails: .............................................................................................................................................. 41 EconomicAge and Life: ........................................................................................................................................... 42 Conclusion: .............................................................................................................................................................. 42 FloorPlan: ............................................................................................................................................................... 44 Assessmentand Taxes............................................................................................................................................45 Zoning.................................................................................................................................................................. 46 Highestand Best Use...........................................................................................................................................49 Highest and Best Use of the Site as Vacant: ........................................................................................................... 49 LegallyPermissible: ................................................................................................................................................ 49 PhysicallyPossible: ................................................................................................................................................. 49 FinanciallyFeasible: ................................................................................................................................................ 49 MaximallyProductive: ............................................................................................................................................ 50 Highest and Best Use as Improved: ........................................................................................................................ 50 LegallyPermissible: ................................................................................................................................................ 50 PhysicallyPossible: ................................................................................................................................................. 50 FinanciallyFeasible: ................................................................................................................................................ 50 MaximallyProductive: ............................................................................................................................................ 50 ValuationMethodology.......................................................................................................................................52 CostApproach........................................................................................................................................................52 IncomeApproach...................................................................................................................................................52 SalesComparison Approach...................................................................................................................................52 Appraisers of the Keys Page 4 of 85 File# 13927 Client File # 00058381 68300 Overseas Highway, Layton, FL 33001 FinalReconciliation................................................................................................................................................52 AnalysisApplied......................................................................................................................................................52 CostApproach..................................................................................................................................................... 53 SalesComparison Approach................................................................................................................................ 54 Comparables:..........................................................................................................................................................54 ComparableSales map...........................................................................................................................................55 AnalysisGrid...........................................................................................................................................................63 Time: ....................................................................................................................................................................... 64 Location/view: ........................................................................................................................................................ 65 GrossBuilding Area: ............................................................................................................................................... 65 Landto Building Ratio: ........................................................................................................................................... 65 Condition: ............................................................................................................................................................... 65 Type: ....................................................................................................................................................................... 65 Other: ..................................................................................................................................................................... 65 Reconciliation: ........................................................................................................................................................ 66 IncomeApproach to Value.................................................................................................................................. 68 FinalReconciliation: ............................................................................................................................................. 70 Valueby all Approaches..........................................................................................................................................70 ValueConclusion: ................................................................................................................................................... 70 Opinionof Marketing Time.................................................................................................................................. 71 PrivacyPolicy Notice............................................................................................................................................72 CertificationStatement....................................................................................................................................... 73 AppraiserLicenses..................................................................................................................................................76 Engagement letter / Purchase Order: ..................................................................................................................... 77 Warranty Deed — Improvements............................................................................................................................78 WarrantyDeed —Vacant Lot...................................................................................................................................79 Glossary: ................................................................................................................................................................. 80 Appraisers of the Keys Page 5 of 85 File# 13927 Client File # 00058381 68300 Overseas Highway, Layton, FL 33001 Table of Exhibits Figures: Figure 1— Subject location and drive time from subject.............................................................................................25 Figure 2 — Layton demographic survey (source — ESRI and Site to do Business).........................................................26 Figure 3 — Middle Keys demographic survey (source — ESRI and Site to do Business)................................................27 Figure 4 — Layton Key data (source — ESRI and Site to do Business)............................................................................27 Figure 5 - Housing profile (Key West and Monroe County).........................................................................................28 Figure 6 — Major Employers in Monroe County..........................................................................................................29 Figure 7 - Employment Rates (Monroe County v Layton)...........................................................................................29 Figure 8 — Inventory and Sales volumes (source Flex MLS).........................................................................................30 Figure 9 — Overall Market data (source Flex MLS).......................................................................................................31 Figure 10 — Sales volumes in Monroe County in dollars (Source — CoStar).................................................................32 Figure 11 - Sale volumes commercial market — Monroe County................................................................................32 Figure 12 - Monroe County residential market over past 4 years...............................................................................34 Figure 13 - Subject Location and aerial map................................................................................................................37 Figure 14 - Aerial and plat map — (source Monroe County Property Appraisers website)..........................................39 Figure 15 — Flood Map (source — STDB).......................................................................................................................40 Figure16— Improvements...........................................................................................................................................44 Figure17 — Zoning map...............................................................................................................................................48 Figure 18—Comparable sales map..............................................................................................................................55 Tables: Table 1- Monroe County and Key West population...................................................................................................22 Table2 - Population breakdown..................................................................................................................................22 Table 3 — Key West Cruise ship numbers (Source: Key West Chamber of Commerce)...............................................23 Table 4 — Key West Airport numbers (Source: Key West Chamber of Commerce).....................................................24 Table 5 - Key West Visitor numbers.............................................................................................................................24 Table 6 — Monroe County Retail Taxable Sales............................................................................................................28 Table 7 - Real Estate taxes - 2017 assessment year....................................................................................................45 Table 8 - Comparable tax records................................................................................................................................45 Table9 — Sales Summary.............................................................................................................................................55 Table 10 — Sale adjustment table................................................................................................................................64 Table 11— Sales Comparison Approach Value Indicators............................................................................................67 Appraisers of the Keys Page 6 of 85 File# 13927 Client File # 00058381 68300 Overseas Highway, Layton, FL 33001 Subject Photographs Subject Front view Subject rear view Subject street view (Overseas Highway looking south) Appraisers of the Keys Page 7 of 85 Subject side view Subject side view and view of garage access Canal and dock (damage in recent storm) File# 13927 Client File # 00058381 68300 Overseas Highway, Layton, FL 33001 Vacant lot adjacent to improvements Roof mounted central air conditioning unit Dock damage as a result of storm Appraisers of the Keys Page 8 of 85 Wood dock Soffit damage caused by storm Interior — Office space File# 13927 Client File # 00058381 68300 Overseas Highway, Layton, FL 33001 Interior — Office space Interior — Office space Interior —residential unit Interior —residential unit Interior —residential unit Interior —residential unit Appraisers of the Keys Page 9 of 85 File# 13927 Client File # 00058381 68300 Overseas Highway, Layton, FL 33001 Dry wall cut to 3ft due to flooding Interior — residential space Kitchen to residential space — base cabinets and drywall Bathroom removed due to flood damage Storage area Interior Appraisers of the Keys Page 10 of 85 File# 13927 Client File # 00058381 68300 Overseas Highway, Layton, FL 33001 Storage area Roof structure Appraisers of the Keys Page 11 of 85 File# 13927 Client File # 00058381 68300 Overseas Highway, Layton, FL 33001 Definitions 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 undue stimulus does not affect the price. 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. The most probable price, as of a specified date, in cash, or in terms equivalent to cash, or in other precisely revealed terms, for which the specified property rights should sell after reasonable exposure in a competitive market under all conditions requisite to a fair sale, with the buyer and seller each acting prudently, knowledgeably, and for self-interest, and assuming that neither is under undue duress. A Fee Simple estate is defined Z as: Absolute ownership unencumbered by any other interest or estate, subject only to the limitations imposed by the governmental powers of taxation, eminent domain, police power, and escheat. A Leased Fee interest is defined Z as: A freehold (ownership interest) where the possessory interest has been granted to another party by the creation of a contractual landlord -tenant relationship (i.e., a lease). Marketing Time is defined Z as: An opinion of the amount of time it might take to sell a real or personal property interest at the concluded market value level during the period immediately after the effective date of the appraisal. Marketing time differs from exposure time, which is always presumed to precede the effective date of the appraisal. Advisory Opinion 7 of the Appraisal Standards Board of The Appraisal Foundation and Statement on Appraisal Standards No. 6, "Reasonable Exposure Time in Real Property and Personal Property Market Value Opinions" address the determination of reasonable exposure and marketing time. Exposure Time is defined Z as: (1) The time a property remains on the market. (2) 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 on an analysis of past events assuming a competitive and open ' Appraisal Institute, The Dictionary of Real Estate Appraisal, 5th ed. (Chicago: Appraisal Institute, 2010). Appraisers of the Keys Page 12 of 85 File# 13927 Client File # 00058381 68300 Overseas Highway, Layton, FL 33001 market. See Marketing Time, above. Gross Building Area (GBA): Total floor area of a building, excluding unenclosed areas, measured from the exterior of the walls of the above -grade area. This includes mezzanines and basements when typically, included in the region.' Rentable Area (RA): For office buildings, the tenant's pro rata portion of the entire office floor, excluding elements of the building that penetrate through the floor to the areas below. The rentable area of a floor is computed by measuring the inside finished surface of the dominant portion of the permanent building walls, excluding any major based; calculated according to local practice.' Gross Leasable Area (GLA): Total floor area designed for the occupancy and exclusive use of tenants, including basements and mezzanines; measured from the center of joint partitioning to the outside wall surfaces.' As Is Market Value: The estimate of the market value of the real property in its current physical condition, use and zoning as of the appraisal date.' Stabilized Value: Stabilized value is the prospective value of a property after construction has been completed and market occupancy and cash flow have been achieved.' z Narrativel.com. Thomas W. Armstrong, MAI Appraisers of the Keys Page 13 of 85 File# 13927 Client File # 00058381 68300 Overseas Highway, Layton, FL 33001 Limiting Conditions and Assumptions Acceptance of and/or use of this report constitutes acceptance of the following limiting conditions and assumptions; these can only be modified by written documents executed by both parties. This appraisal is to be used only for the purpose stated herein. While distribution of this appraisal in its entirety is at the discretion of the client, individual sections shall not be distributed; this report is intended to be used in whole and not in part. No part of this appraisal, its value estimates or the identity of the firm or the appraiser(s) may be communicated to the public through advertising, public relations, media sales, or another media. All files, work papers and documents developed in connection with this assignment are the property of Appraisers of the Keys. Information, estimates and opinions are verified where possible, but cannot be guaranteed. Plans provided are intended to assist the client in visualizing the property; no other use of these plans is intended or permitted. No hidden or unapparent conditions of the property, subsoil, or structure, which would make the property more or less valuable, were discovered by the appraiser(s) or made known to the appraiser(s). No responsibility is assumed for such conditions or engineering necessary to discover them. Unless otherwise stated, this appraisal assumes there is no existence of hazardous materials or conditions, in any form, on or near the subject property. Unless otherwise stated in this report, the existence of hazardous substances, including without limitation asbestos, polychlorinated biphenyl, petroleum leakage, or agricultural chemicals, which may or may not be present on the property, was not called to the attention of the appraiser nor did the appraiser become aware of such during the appraiser's inspection. The appraiser has no knowledge of the existence of such materials on or in the property unless otherwise stated. The appraiser, however, is not qualified to test for such substances. The presence of such hazardous substances may affect the value of the property. The value opinion developed herein is predicated on the assumption that no such hazardous substances exist on or in the property or in such proximity thereto, which would cause a loss in value. No responsibility is assumed for any such hazardous substances, nor for any expertise or knowledge required to discover them. Unless stated herein, the property is assumed to be outside of areas where flood hazard insurance is mandatory. Maps used by public and private agencies to determine these areas are limited with respect to accuracy. Due diligence has been exercised in interpreting these maps, but no responsibility is assumed for misinterpretation. Good title, free of liens, encumbrances and special assessments is assumed. No responsibility is assumed for matters of a legal nature. Necessary licenses, permits, consents, legislative or administrative authority from any local, state or Federal government or private entity are assumed to be in place or reasonably obtainable. It is assumed there are no zoning violations, encroachments, easements, or other restrictions which would affect the subject property, unless otherwise stated. The appraiser(s) are not required to give testimony in Court regarding this appraisal. If the appraisers are subpoenaed pursuant to a court order, the client agrees to pay the appraiser(s) Appraisers of the Key's regular per diem rate plus expenses. Appraisals are based on the data available at the time the assignment is completed. Amendments/modifications to appraisals based on new information made available after the appraisal was completed will be made, as soon as reasonably possible, for an additional fee. Appraisers of the Keys Page 14 of 85 File# 13927 Client File # 00058381 68300 Overseas Highway, Layton, FL 33001 Hazardous Waste: No information regarding the presence or absence of hazardous waste on the subject property was provided. This appraisal assumes the absence of any and/or all hazardous waste on the subject property. If hazardous waste is found to be present on the subject property, an adjustment to the valuation contained in this report may be required. Title Conditions: No current title commitment/ report was provided for review. It is assumed that any special exceptions, other than those noted previously in this report, are typical, and there is no adverse impact on value. The right to modify the valuation contained in this report is reserved upon review of title conditions. Americans with Disabilities Act (ADA) of 1990 A civil rights act passed by Congress guaranteeing individuals with disabilities equal opportunity in public accommodations, employment, transportation, government services, and telecommunications. Statutory deadlines become effective on various dates between 1990 and 1997. Appraisers of the Keys has not made a determination regarding the subject's ADA compliance or non-compliance. Non-compliance could have a negative impact on value, however this has not been considered or analyzed in this appraisal. Appraisers of the Keys Page 15 of 85 File# 13927 Client File # 00058381 68300 Overseas Highway, Layton, FL 33001 Executive Summary: Location: 68300 Overseas Highway, Layton, FL 33001 Assessor's Parcel ID's: Improvements: 00387620-000000 - Alt Key #1475742 Vacant lot: 00387640-000000 — Alt Key #1475769 Property Rights Appraised: Fee Simple Improvements: No. of Buildings 1 No. of Stories 1 Gross Building Area 2,640 sq. ft. Net Rentable Area 2,640 sq. ft. Efficiency Ratio 100.00% Property Amenities Off-street parking for 5 cars. Year Built 1964 Condition Average with deferred maintenance Highest and Best Use: As Vacant: Mixed -use commercial building. As improved: Current use as mixed -use commercial building. Date of value opinion: November 21st, 2017 Exposure / Marking time 6 - 9 months / 6 — 9 months RECONCILED VALUES Market Value via Sales Comparison $455,000 Approach Market Value via Income Approach NA Market Value Final Reconciliation: $455,000 Appraisers of the Keys Page 16 of 85 File# 13927 Client File # 00058381 r 68300 Overseas Highway, Layton, FL 33001 Scope of Work According to the Uniform Standards of Professional Appraisal Practice, it is the appraiser's responsibility to develop and report a scope of work that results in credible results that are appropriate for the appraisal problem and intended user(s). Therefore, the appraiser must identify and consider: • the client and intended users; • the intended use of the report; • the type and definition of value; • the effective date of value; • assignment conditions; • typical client expectations; and • typical appraisal work by peers for similar assignments. This appraisal is prepared for Mr. Kevin Wilson of Monroe County, FL (Florida Keys). The problem to be solved is to estimate the 'AS IS' market value of the subject property's Fee Simple Estate as of November 21st, 2017. The property was inspected on November 21st, 2017 and this is the effective date. The intended use is to determine the market value for possible purchase. The intended users of this report are the client, Monroe County only. No other intended users have been identified. Dissemination of this report by any party to non -client, non -intended users does not extend reliance to any other party and Appraisers of the Keys will not be responsible for unauthorized use of the report, it's conclusions or contents used partially or in its entirety. Report Type: This is an Appraisal Report as defined by Uniform Standards of Professional Appraisal Practice under Standards Rule 2-2(a). This format provides a summary or description of the appraisal process, subject and market data, and valuation analyses. Property Identification: The subject has been identified by the legal description and the assessors' parcel number. Inspection: A complete interior and exterior inspection of the subject property has been made, and photographs taken. Market Area and Analysis of Market A complete analysis of market conditions has been made. The Conditions: appraiser maintains and has access to comprehensive databases for this market area and has reviewed the market for sales and listings relevant to this analysis. Highest and Best Use Analysis: A complete as vacant and as improved highest and best use analysis for the subject has been made. Physically possible, legally permissible, and financially feasible uses were considered, and the maximally productive use was concluded. Type of Value: AS IS Market Value VALUATION ANALYSES Cost Approach: A cost approach was not applied due to the difficulty in determining the level of depreciation. This is not a reliable indicator of value and is not typically relied upon by purchasers in the market. Appraisers of the Keys Page 17 of 85 File# 13927 Client File # 00058381 68300 Overseas Highway, Layton, FL 33001 Sales Comparison Approach: A sales comparison analysis was considered and developed as there have been several sales of commercial office units. This is typically a good indicator of value as it shows the relationship between a willing buyer and seller with most owner occupiers using this approach as their primary value conclusion. Income Approach: An income analysis was considered, however was not developed as these smaller units are typically owner -occupied and not investor driven. This is not a reliable indicator of value. Hypothetical Conditions: There are no Hypothetical Conditions for this appraisal. Extraordinary Assumptions: Hazardous Waste: No information regarding the presence or absence of hazardous waste on the subject property was provided. This appraisal assumes the absence of any and all hazardous waste on the subject property. If hazardous waste is found to be present on the subject property, an adjustment to the valuation contained in this report may be required. Title Conditions: No current title commitment/ report was provided for review. It is assumed that any special exceptions, other than those noted previously in this report, are typical, and there is no adverse impact on value. The right to modify the valuation contained in this report is reserved upon review of title conditions. The appraiser has not been provided with an environmental survey of the site. An extraordinary assumption has been used and assumes that the site does not contain significant native species or areas of wetland that would affect development of the site. The appraiser has not been provided with a survey of the site. Information regarding current setbacks have been taken from the visual inspection of the site and from aerial photography from the Monroe County Property Appraisers website and GIS system. Any changes in assumptions may affect value conclusions. Appraisers of the Keys Page 18 of 85 File# 13927 Client File # 00058381 68300 Overseas Highway, Layton, FL 33001 Preamble. The property being appraised comprises of a single -story, mixed -use, detached commercial property located on the south side of the Overseas Highway within the City of Layton. The subject comprises of office space, storage areas, and a residential unit. There is also a contiguous vacant parcel of land to the north which has been included in the appraisal. The unit is in a rural location and is surrounded by mainly commercial spaces all located on the highway and residential properties in the established neighborhoods on the secondary streets. The subject has good exposure to the passing traffic as it is located on the main road running though the Florida Keys, however is located further from the main commercial centers. The subject was owner occupied at time of inspection with all utilities on and working. The property was used by a local business who occupied the rear residential unit. The improvements are legally conforming as per the current zoning requirements as per the City of Layton. There is adequate off-street parking to the front with the site accessed directly from the Overseas Highway via a curb cut. The lot to the north is currently vacant and accessed from the Overseas Highway. The subject is with in an area that has been designated a disaster area from the recent hurricane (IRMA) that made landfall in the Florida Keys on September 101", 2017. The subject has suffered significant damage from the recent storm and the damages are detailed below: 1) The subject has suffered flood damage which has resulted in significant areas of the drywall to be removed (up to 3ft) as well as localized impact damage to the drywall. 2) Because of the flooding the base cabinets and drywall to the residential kitchen have been removed 3) The wood dock to the canal has been damaged and in some places collapsed due to the storm. 4) Minor damage to the fascia and soffits to the roof line. 5) Missing sink to restroom. The appraiser has estimated a cost to cure the deferred maintenance and this is detailed later in the report. The client should be aware of the FEMA 50% rule regarding the repair of damages to properties within a flood zone which were caused by a natural disaster. The cost of the repairs cannot exceed 50% of the market value of the structure (no land value included) otherwise the improvements must be removed or brought up to code in regard to building in a flood zone. The client should contact the local FEMA coordinator for more information. Property History: There have been no prior sales or transfers of the subject in the last 3 years. The subject is currently not listed in the local MLS system (Key West Association of Realtors, Inc (KWARMLS) or on any other commercial brokers website. The appraisal comprises of 2 parcels of land: 68300 Overseas Highway: The last market sale was on April 1st, 1998 for $190,000. This was not found in the local MLS system as the records do not go that far back. The sale was between HGS of Long Key Inc (Seller) and Haring Properties, Inc (buyer) — Book and Page: 1507/1946; Document #: 1056416. Vacant lot: The last market sale was on August 21st, 2002 for $57,500. This was not found in the local MLS system. The sale was between Telcom Systems Ltd (Seller) and Haring Properties, Inc (buyer) — Book and Page: 1809/2489; Document #: 1319132. The 2 parcels have not been combined by the current owner. Appraisers of the Keys Page 19 of 85 File# 13927 Client File # 00058381 68300 Overseas Highway, Layton, FL 33001 The appraisal assignment is to estimate the current 'AS IS' Market Value of the Fee Simple Estate of the property for potential purchase. The engagement includes the adjoining vacant lot. The subject was occupied at time of inspection and is 100% owner occupied. No Leased Fee interest has been calculated. The property is located at 68300 Overseas Highway, Layton FL 33001. Our investigation and analysis of the property included but was not limited to the following: • An internal and external inspection of the subject property and its site. • A detailed Market analysis was performed to determine market value via obtaining sales of comparable properties. A detailed Market analysis was performed to determine market value via obtaining rental data of comparable properties and determining an appropriate capitalization rate. In this case not applicable The value conclusions set forth herein is predicated upon current market conditions as they can be recognized and interpreted. Appraisers of the Keys Page 20 of 85 File# 13927 Client File # 00058381 68300 Overseas Highway, Layton, FL 33001 Area Analysis: The State of Florida has increased rapidly in population from 9,746,000 in 1980 to 16,396,515, in 2007 to 18,801,310 as of the 2010 Census Data with the last estimate of 19,893,2973. Florida in the past has been known principally for its tourist attractions, citrus, and winter produce. In addition to it being a year-round resort area, the State has experienced an influx of growth of industry and manufacturing since World War II. Florida is now less dependent upon tourism which indicates a more stable year-round economy. The trend of the Florida economy generally parallels that of the nation with favorable future economic forecasts. Monroe County stretches 150 miles south and west of Miami and Miami -Dade County along a series of islands or keys connected by 42 bridges carrying U.S. #1 (Overseas Highway) to terminus Key West, the County seat. Total usable land area scattered over the larger keys is about 100 square miles, which includes Key West's 6+ square miles. Of these 100 square miles, only 25% is improved. However, most of the 75% vacant land is not develop able, meaning it is wetlands, mangroves, or native areas protecting endangered species of birds, animals, plants and marine life. Virtually all of this land is 0 to 18 feet above mean high water and classified within the FEMA 500-year flood hazard zone. The geology is mostly oolite (calcium carbonate granules) and coral rock. Tropical vegetation covers surface areas with a wide assortment of grasses, vines, shrubs and trees such as palms and pines. The shoreline is extensive and nearly all in mangroves, a protected species. Sand beaches are few and are usually found in five or six state parks. On the Atlantic Ocean or Florida Straits side of the Keys is a string of barrier reefs four to six miles off -shore with the axis of the Gulf Stream two to four miles beyond, flowing northward. This band of turquoise and blue water contains some of the finest sport fishing in the world. Snorkeling and scuba diving are very popular, especially at John Pennecamp and Looe Key State Underwater Parks. Monroe County is the southernmost of Florida's 67 counties beginning at the Miami -Dade County line about 40 miles south of Miami, extending west and north to include the Everglades National Park and part of the Big Cypress National Preserve, and stretching 120 miles south and west along the largest of some 800 islands or Keys across 42 bridges carrying U.S. #1 (Overseas Highway) to terminus in Key West, the County seat. Total county area is 1,788 square miles, 1,672 square miles of which is national park and preserve. Unincorporated public and private usable areas are 94 square miles plus 6.25 square miles in the City of Key West, 4.87 square miles private and 1.4 square miles military. There is another 116 square miles in offshore Islands. The 2014 total population of Monroe County is estimated at approximately 77,136 permanent residents increasing to approximately 125,000 during the peak winter season. Key West has approximately 25,704 permanent residents increasing to approximately 90,000 in season and is host to about 2.2 million tourists. This population is spread among the Upper Keys (Key Largo to Lower Matecumbe) 28%, Middle Keys (Long Key to Marathon) 17% and Lower Keys (Big Pine to Stock Island) 23%. Approximately 15,000 vehicles per day cross into Monroe County according recent traffic counts.4 The overall permanent population has remained stable over the past 10 years based on information taken from the US Census Bureau. 3 US Census Data 4 U.S. Census Bureau Appraisers of the Keys Page 21 of 85 File# 13927 Client File # 00058381 68300 Overseas Highway, Layton, FL 33001 i�t1�'N�_li4ti�6861a,-ufJasi ]��; I r �10Itro 4 fmng4 ke+ %N(M s 99 4 4 2 a• 3 J'AJ, v 2U I 74"?4.9. 4iF9YR" i" i` ""tFv& fdSkR`av, Iaferram Ia'"r@Wk "f Table 1- Monroe County and Key West population There are a number of families who make Key West their home and are born and raised here. The demographics of the area are similar to the remainder of Florida with an aging population. A number of the older residents typically move away after retirement to be closer to family and improved health care. As previously stated there are a number of non -permanent residents who visit Key West over the winter months and are typically from the northern states. These non -permanent residents own property in Key West and are typically retired individuals. 11unulation Ain-, f Ly W[:st CoLlllty FLnda sti.[x's Brenkdcawn: 015 70t5 2015 1015 0-19 18% 17% 23% 76% 35-44 17% 13% 1'111.6 131!16 .1:5-54 15'% 1 6?44 1 4% 141% 55-(A 16111_� 17% 13?;r 1 % fry- 4 c7r. 12% 1WA. 8Q. -+5= 4% 1S 16 9% fj% Mii1 an .Age- 41.6 46..8 41-4 37,6 _Sn fired i ee].Ylti F.hv"am Amencam f":fdeyf ilrider Population KVV Munme Un tcd [;Haul West County llonda `_Sta.tC; Breakdown. 21115 20[5 1()15 7.01.5 Whi,te 65.3",. 69 t5% 56 1% 613% Mack 114. 3,1,E 67 1 41.:6 15,S11. 1 _.3% 11kspanic. N-P.8l;n 9)+sl 73.7% 17.1% Other 3.6% 4p", 1,7 ' i. S. 31:'111 „4iiurce i S � . id.4l1.4 Uw., emdi A rdt"i.cjm Aided idi Yf Table 2 - Population breakdown Commercial fishing is equal in importance to the tourist industry. Industry in the Florida Keys, which was dominated by commercial fishing until recently, has changed in recent years to sport fishing and diving, marinas, motels, time-share resorts, restaurants, and other tourist -oriented businesses. Over the past ten years, the tourist season has expanded from a few months a year to almost year round. The United States Navy also contributes significantly to the Lower Keys economy, since Key West Trumbo Point and Boca Chica Naval Air Station are home to naval fighter training and development. All services are represented with highly trained units. This results not only in a substantial military population requiring housing and service needs, but also employment for local civilians. Monroe County growth and population has stabilized after years of growth. Much of the new resident population has located throughout the Keys. However, the greatest concentration of growth has been in Key Largo and the northern part of the county. Appraisers of the Keys Page 22 of 85 File# 13927 Client File # 00058381 68300 Overseas Highway, Layton, FL 33001 Tourism is now the single major economic driving force. 696,887 cruise ship passengers disembarked in Key West in 2016. This was the 2nd year in row with a decrease from the previous year, the figures from the Key West Chamber of Commerce shows that the numbers decreased from 2012 to 2013 increased from 2013 to 2014 and decreased though the end of 2016. Recent events in the cruise ship industry including several high -profile accidents and incidents has reduced the number of passengers on ships worldwide. The number of ships visiting Key West has decreased over the past 12 months as cruise ships are looking at different locations to dock. A vote by the residents of Key West, in 2014, stopped any consultation on dredging the channel to allow for the larger, more modern cruise ships. This would have involved damage to the nature reserve and sanitary through which the ships would have passed. This has resulted in several new ships not being able to call into Key West with companies bypassing Key West. Key West Chuis Sh:p Data - Passenger Cournts N..b- of Passenger Arrwags f5iu Q e of .Ker, ftJ'. RV, ."A.kranons. IF --I Month 2CC:6 2007 200E 2tD9 21310 20 t',. 2012 21313 2014 2015 2'�18 2517 J� '96,3.22 75.714 35,2f3 71n 19 69.747 9. .,•' 76 t06 61.792 8i,965- 88,9LI8 63.,39:`::. 85. 32 Feb- 35,508 .,3. H7 3rl,6.5k 77.595 60.465 32,113 �6.579 74,563 80,a65 84,501 74,567 74,Q05 Mar 1'10,229 93.470 82,145 78,309 79.734 3:1921 91-352 89,823 1Q3.883 108.069 68,034 77,623 Ap, 89,444 81.119 7F,328 72,2•••38 72,434 7 6'9@:. 73,143 63,134� '3431 71 a'0`r 76.324 69.648 tw+ea} 54; 5`.8 46.Q26 44,2- 91, 420 60,829 49,7`9.3 >n5,_63 55.210 59.210 30.3i7 33.887 45,'a79 Jinn, 52,702 47.4 7 3.5,940 79,330 69:457 4 r,502 59,344 44:Q73 43,950 35.353 -01,52a Jul 52, 586 52,621 45,1� 54,231 64.665. 4,122 c7.374 47.655. 47,130 41,821 47,.747 .Aug.. 50,5al0 69.083 3.3,0 t7 56,505 71.077 60,442. 55,407 50. 179 30,Ou9 32,.791 41.926 Sep 41,C26 57.233 45,927 51,e42 53,067 4',555 49:2,84 39,45E 33,59a 37,244 31-467 c[ D SQ;080 53-2L'`. 50,3€C 54,745 77.422 64, 161 83.263. 65,520 49,1F3 37,570 52,206 Nov 532 80, 784 64,957 660,455 80.471 15,21'7 59.445 65,190 6-.022 r.,,57C 56,59'9 De 97,576 92,134 92,351 r 5, 319 90.652 33,157 s�5,t43 93,41 S 101,161 65.260 33 254 Total 8F3, i`<3 r10„919 740.932 859,499 950270 611,458. 8.. 3.713 76c.132 796.960 726937 396,687 362,.590 Key}WR tCruiJ Shape Data - Pas-ger Counf9 Peroencage Change from Prior Year `:"­ Citt of Ke t ft,t ; a-xF ! Month 2026 20137 2005 2Q✓J9 2Q10 20€f 201.2 :2D13. 2}14 21,15 2ful6 2017 J_ -21 a -21.4,e '":5. 16-7% =2.9% =i.3% 20-511. 0. '°;; _.5% 14.37 FeS -12 i7°E -44.6 0 "Y.5`•6 -5,046 -22.15o 3"5.5% 5,6% 14.1`s TO% 5.190 1i.8% �7�0 Mar -10. -Z.7% 2. V < 4-3.4% -4.7% T.3% 9.0`a 5.:1°a - 2L. rd.7% W.2% 12.5% Ap€ -0-2 6 -'9.3`,6 -6.9% -0..e% -21. .5 9% 137116 24.2`e -5.3"° 6.7% -F.7=r; Mw 4% -2R.I`+e -3.'9`C tQ6. 1'a -3.32?; 8 3 319% 15.9% 7.2% _4&8',> 1€a% 34.6% J., -2.3% -2 3`r -24.3b 213% -1101,' _S3":.� 1'.111 7.8°;• 174% Jul - 2% -15.9% 14:",.% 41.0% 0.7% 16_°% 25.4ti-. 20.8!,a 4.1% 1f.3% 141% Aug.. .26.4% W.-7 -51..5% 74.9`a 21.37. -2.3°: 210.2% 3A;e -24:2^e .13.81". 27.9';. 3" p -10."!. 37. -t9.S% 34.2`�6 -119% ni.7`-a 18.1 `.G. -P9.�5% -:3.2?^; -15.F111. On 57. m 13. 'n -26.2% 28.6'. i9.6% -14% 122`;°, 1';,5`r� 6`4 3.9.0% N- 2Q6%a 21..01'. 8.21. -2..3% 26.2% 25 % -13% ° -ii.3`r� 13.2`;> -2:3.1% De -12:% -5. -.o ^0.2�° -13.7% 20g% -8:5% -21 4r.91 2.8% -45.7`°0 :3f% Total -3.:9% -S.0'% -9.3%. 16.D% to -4.6.% 0.3% _&0% 4.2`•6 10.8% 2.3% 10.545 Table 3 - Key West Cruise ship numbers (Source: Key West Chamber of Commerce) Key West airport, originally built to handle 35,000 people, handled 366,649 in 2016 which was an increase over the previous year. A regional jet service has been running since 2002, with Delta Airlines which now operates direct regional jet service to Atlanta as well as daily flights to Miami, Tampa, Fort Lauderdale, and Charlotte with American Airlines (American Eagle) and Silver Airways. There are direct nonstop services to New York and Chicago over the winter months which has typically been a prelude to full time regular flights. There are low-cost airlines which fly into Key West including Silver Airways which flies to Tampa, Ft Lauderdale and Orlando and has taken over the routes recently vacated by Southwest. There is no commercial carrier flying internationally from Key West, with local charter services available to the Caribbean, The Bahamas and recently to Cuba. Key West airport also recently went under significant renovations over the past 10 years with an improved customs, arrival and departure areas and a new parking garage. Appraisers of the Keys Page 23 of 85 File# 13927 Client File # 00058381 68300 Overseas Highway, Layton, FL 33001 Key W4 t Awport Da¢ - Passenger Curio is N:u-riser of Pa�sse.nger Arrw Is by Pfaoe Manih 2005 2017 2QQa 200:2. 201.:0 2Q11 2012 20 3 2Q 14 20?5 2016 2017 Jan 2,1.827 24,721 12. Q50 26,52E 24.411 �1 L.98 2,538 :33_.41 s7,83_, 32,919 33,u7C 35.735 Feb 724 25,?F,7 2.767 �,7 28581 2.. 34,5 8 33.2'73 37J775 32,5.51 258 32,392 Mar 3t, 123 29,358 246, 2 _543`� 29,734 5,593 37;122 41.27C 45_ 381 37,341 42,599 44,813 Apr 26,87e 26,,,16 22,645 24,1.4 25:21Q 34,90k 33,133 5. 9 39.496 34,490 34,594 39.324 May e282: '23,'r.98 21.0i6 -2.434 28 M5 3`_248 33.454 37224 ?,3f2 29,693 34Ad1 22,5W 20.2.54 16.724 19,625 1 _12:E 19:558 2a,305 22,2-24 "sQ 285. 24,85'2 25,234 23,5'9 Jti( 2G,725' 19,"+58 15,697 i 7',51 p 19.�d46 28,89;4 3Q E28 3Q,Q6C 23 579 2:5,2'24 28.,2'6 .5..:...g 95,227 -,28Q 12,679 i4,7Ei F830C 24 J712 25,315 28.852 29 5C'2 23,05Q 24,487 S.ep 9.. 8➢04 11,9:+2 +.8,50Q 20,15 S,3ti 22,533. 18 ?93 20,7:'9 21,589 Oct 2Q, 17� 20,126 15.243 1677-d 22.959 4. 51 23,BJ9 3L1.377 22,635 M.176 28,968 Plow 22 4 f:2 21 43 17-638 17,545 24.441 27 111 27,82, 11,R28 23,287 o2a 28.9Q9 7e.. 22,65E 21,389 19, 1'1 22,C:_Y._ 27, 435 31177 33,7i4 38,JQ2 23,945 3 ,541 37a'29 T-1 276,154- 263.7BB Z212..193 222315 7.'266 333.;978. 367,E 5 3E6,294 360;165 346,4J2 368,;849 192p42 Key West Airport Da[ -Pass: en gsr Counts Pe:roe ntage C hange fromPafior Year M.19i 2005 2037 200a. 200a 2 4Q 2'J11 2012 2tv'r'3 2014 2015 2016 2'J 17. ,tan S5i1S -a -9J79'-.Q% -78..22`%e 19..6% 3.:1%>.. 12.2. _ n.19?- Feb 4 % 7%2.p% 22 515< 235% -i.61 2.1% 22% 83% 5.72 Mar ti'' 52;% -A -4.7% 16.9% 197% 5. Iel 4% 5.'9` iTS% 142% 4.7` ..4* 'Apr "% 127% 03% 3.7 e May 3.5. - 1% i,&,V 1.3 2P.1°? 71% % 0,3% G4% 147% 1441% 3 39..48%°5 S.t...4% q 8%, i -C6:.-...5i5%= 8.74Jun .. 57% . QG % 1 a . % 5 Q 38%Ju. Aeg cry 13-D% .3= . 27.7' 9 '..MT1-% Sep E. 9.51,; SC CC- `C.- -3.1- -15.1` 5.5% Ot 4 24 Jr1+, 7% 57% o-4% 24.a% S 1% 3.1% 3216 -3.'" -1Pu G.rq,> 39.49 132; rL5.> ` Qi. 24.01+J 4.0% 90a Dec 5.3,. ...1 -69a5 5.2% 23. Q% iu.9% S. i'•> 12.6% -23.8%:> 9.J% 18.4°& 7a 1 42.0°•6 1 5% -95.8% 3:2% 21 2% 20.256 F.J. {_, S..B% -7'..4% -0.4% 5:11 Table 4 - Key West Airport numbers (Source: Key West Chamber of Commerce) The Upper Florida Keys does not have a general aviation airport, there is one private airport at mile marker 90. Visitors to the upper keys, fly into Key West or Miami airport. The Miami International Airport is approximately a one -hour drive from the Upper Florida Keys (Key Largo). Key West has approximately 2,464 hotel rooms, 2,077 motel rooms with another 464 rooms in guest houses,787 in transient multi -unit complexes and 1,004 vacation rentals for a total of 6,796 units of total lodging. Reports indicate occupancy rates of 70% in the county areas and 75%+ for transient properties in Key West. This high occupancy factor is due to occupancy increases in the off-season, as Key West and the Florida Keys become a year- round tourist destination.' t^IHknd.i ke rx %'kmriar @'e�rttnLLrrp Fidjmwtte c 16 `Ik'tik (fi91'.. 51`11 1 71117 ?;11 11 �1 W.,A K_., 'i.v-.r�z.„ .,wvra 1:. 112.'1.,1f. I.il5..i61 1 xv'0 %:.11111 1.SMU',1'= [.4 .rs,r+iw 1,W4-I11 F.rr°-V:y1Dv, Trirman _0.9jil.1 „rk,Uvv :9QJ00 313.31Nt .I1.�=? 7 r1.7:9 C'nxa.:, .saw+r''xw_nleo-r. 1,2ir, ¢79:10�r t.Q-.t 1iE.95k, S1a.71:, 7rt.`_ 31 ',46.4160 I *x:Fsy krzt°isltrs c1.511ts ^' k.q 1_at q: %._` 0 v..peam-s..y. ", `a:lh:,evsl.l arniplrl 2,In,,11YI 23',c_0 _. 1__6(,1 .,u_u.Yi I4X,r_r` .,.I.L3olF ..'Wjx.'O : r ko,� Ny Hppp ,r5 -wl, (d) .1 i "JANN is _, R5 *iA..*7 NnAvi 4. bJ11. tk'.F 7nt,Lahs, l"'ge i,°71k fit=aa„j; OVC191s i,H'R}c ':I's,'t;' ,�. '�, i'? ,�.11a."da`1li 9 eaiAIIKV N .31k%13-, ,'2._uls, ,aln1 ..?�_.. ai 1. .r.3 4,d.,4A. 4-1 :6.411fl %Sor.A,, t sump e..,m21gu1g uWTq .1,.4% rAa Y.I6isa Table 5 - Key West Visitor numbers. In 1981, Monroe County created the County Tourist Development Council (TDC). This is a non -governmental entity of Monroe County whose sole purpose is to promote and advertise tourism for all of Monroe County. The Monroe County TDC is funded by a 3% tax on all overnight accommodations in Monroe County. The first two percent of this 3% tax is used to promote all of Monroe County including the City of Key West. The second portion of the TDC's bed tax is a one percent tax on all overnight accommodations in Monroe County. This 1% revenue is then allocated among different sections of the county (Marathon and the Lower Keys, Key Largo, Key West etc.), based on their ' Smith Travel Research, Key West Chamber of Commerce. Appraisers of the Keys Page 24 of 85 File# 13927 Client File # 00058381 68300 Overseas Highway, Layton, FL 33001 pro -rated contribution of revenues. The portion of this revenue allocated to Key West is approximately 55% (per the TDC). These funds are used for direct expenditures for advertising, promotion, tourist information services and special events promotions. Of this total collected tax, approximately 65% goes to promotion and advertising and 35% to special events. Neighborhood Analysis. The Florida Keys are a series of islands, connected by a single overseas highway — US Route 1 (aka Overseas Hwy), which is the only entrance into Key West from the Florida Mainland. For most of its length, US Route 1 is a dual lane highway. As a result, traffic can often be slow, and transportation linkages are limited and often difficult. This is the only road in and out of the Florida Keys and as a result any property located directly on the Overseas Highway benefits from a high traffic count. The subject is within the boundaries of the City of Layton, which is one of the smaller cities within the Florida Keys. The city boundaries run from mile marker 62 to 72.5 of which the majority of is water and bridges. The city is located within the Middle Keys and is to the north of Marathon and to the south of Islamorada which are the 2 closest commercial centers. The neighborhood is approximately 60 miles from the City of Key West, the southern- most city of the Continental United States of America, and 60 miles from the City of Miami. The neighborhood is connected to the Florida mainland by a series of islands and bridges running from Key Largo in the North to Key West in the South. The neighborhood boundaries are the Duck Key to the West, Atlantic Ocean to the South, Gulf of Mexico to the North and the Village of Islamorada to the East. The following map shows the neighborhood location in relation to the remainder of the Florida Keys. Figure 1— Subject location and drive time from subject. Although the city is incorporated Monroe County provides both the police and fire departments as well as sewage and waste disposal systems. Water is provided by the Florida Keys Aqueduct Authority whilst power is provided by Keys Energy Service. Linkages By Road: As stated earlier, because Monroe County is made up of a series of islands and is connected by a single overseas highway — US Route 1 aka SR 5, which is the only road running from the Florida mainland to Key West. For most of Appraisers of the Keys Page 25 of 85 File# 13927 Client File # 00058381 68300 Overseas Highway, Layton, FL 33001 its length, US Route 1 is a dual lane highway and traffic can often be slow, and transportation linkages are limited and often difficult. The highway though the Layton is two lanes; one lane running both north and south. By Air: Layton and the Middle Keys can be accessed via air from Miami International approximately 100 miles to the north or via Key West International, 50 miles to the southwest. The City of Marathon has an airport located to the south which currently does not operate as a commercial airport and is used primarily by private owners, State authorities such as the Sheriff Department and commercial package carriers such as UPS and Fed Ex. There are currently plans to turn the airport over to a private operator with an aim to bring commercial flights back to the airport. This would require the airport to have significant upgrades due to the short runway and inadequate facilities internally. Customs and Border facilities are limited and are currently in the process of being expanded. There are several smaller airstrips scattered throughout the Upper Keys which along with Marathon allows for smaller private air planes. By Water: There is no commercial passenger terminal in Layton or the rest of the Middle and Upper Keys. There are several of larger marinas in the surrounding area running from Key Largo in the North to Key West in the South which are predominately for private use. There is a Customs and Border control center at the Marathon airport. Some of the smaller marinas are attached to condominiums or PUD developments and are for the private use of the owners in the development. The closest ferry terminal is in the City of Key West, 70 miles to the South. This currently has a daily service to from Fort Meyers, FL. There have been recent plans to operate a new service from Key West to Cuba which is in the early planning stage and has come about due to the easing of economic sanctions between the US and Cuba. Economy Layton is located within the Middle Keys which encompasses several islands, 'Keys', and cities including Duck Key, Conch Key, and Marathon which is largest island in the Middle Keys. The neighborhood and the surrounding areas are a major sport -fishing destination, with several charter fishing boats departing from local marinas every morning to both the Gulf of Mexico and the Atlantic Ocean. Bountiful reefs around Marathon make it a popular diving, snorkeling, spear fishing, and lobster tickling area. The Historic Seven -Mile bridge is to the south. Figure 2 — Layton demographic survey (source — ESRI and Site to do Business). Appraisers of the Keys Page 26 of 85 File# 13927 Client File # 00058381 68300 Overseas Highway, Layton, FL 33001 Figure 3 — Middle Keys demographic survey (source — ESRI and Site to do Business). The economy is seasonally driven. The winter months are typically busier with an increase in tourist figures as compared to the summer months. The hotels, motels and vacation rentals have very low vacancy rates over the winter months but struggle over the summer with some hotels reporting 30-40% vacancy at this time with historically September being the slowest time of the year. There is a small full time population that supports the businesses in the area with very few national business in the area. The national tenants in the neighborhood are occupying space in the larger plazas along the main highway. These anchor tenants are bringing local tenants in to these plazas to maximize footfall. Figure 4 — Layton Key data (source — ESRI and Site to do Business). Appraisers of the Keys Page 27 of 85 File# 13927 Client File # 00058381 i 68300 Overseas Highway, Layton, FL 33001 The overall market has improved over the past few years mainly due to the return of the tourist industry after the global recession. Hotels and guest house are reporting historically high occupancy levels and Average Daily Rates which in turn has increased the overall retail sales in the area. The table below has been taken from statistics on tourism provided by the Key West Chamber of Commerce and shows the year on year increases of retail receipts. There have been 2 newer hotels completed in Marathon (Holiday Inn and a Hyatt Place) in the past 2 years and one currently under -construction (Hampton Inn) further supporting an increase in tourist numbers. Visitors are staying further away from Key West to escape the high prices charged at the hotels in Key West. The table below has been taken from the Key West Chamber of Commerce and is the most update data for the sales tax and shows that the tourist industry has continued to increase and is the main economic driver for the area. Monrm County Sales Tax. E'Aa Rebi:..:I Taxahie 5:a1e5 dirt 7-4sn=3 RaGrfl2i.351'1, FUrd3 F2eepa. 1 IV L'Reven e F°tile 'a Ye 7 4er.2'nrs) Pa ull 21D5 20€t5+ 2W', 2000 2YIQ 2010 20i1 2012 2t"1.i3 27114 2015 2016 .fan 5 tSi.. I —a 1 i5 i s22 5 1'21'2,d[5 $ .._,_ -,[2£ $ Is, 1'£,d22 4 12-.451,.9_ 5 I" 2,3 ,`17 } —,%7,552 E Ised26,532 } 23£,2�,3� E --.,,-15,11? } ­,i'-,'22L Feb 5 !^5"`"8,M'. $ 152,215,E1S $ 1 `14,'.9E $ i'^3,265,455 $ Ia S'2,<-54 $ ISI.SSE,S51 $ I'Z'.W,,..`-'`-.: $ 4.3.5'.neS4 6 :.`.:L,'.i9.353 $ '.63,3&; 6 c.C'23,5%a $ s."3.'3:: ,ar i 211,?2 07 3 133."r.C',ESE 3 _24:A4,EEE i 2C2 a`,iE6 3 f'4.3[2,53& $ '_IM,224,H2 b :IS,' E,1.35 $ '�E' ,E-a,5?i b 2 E,[Es,61E $ 1:_: �E[ 1 3=4 i4.9 S 322-c[:E 3 }_._. ?v2 $ Y12.:.9,eu 4 ZIt;.,3F£,26=. 3 2?2,°£9,e24 } ;9iL",_5,-5] E v°,°':.2832 } �. 32?,i�a E "�[d',E?5,542 } ajs 0':2.#1 May S 1 U ; L' $ 2]5,701,7.65 $ 12S_r1 i,E'-:2 $ IS I. 22S $ 1^0235[,7E2 S IS',52E,IXI5 $ 214,04E,415 $ 215,SS:.,SS3 1,151 $ 3,E-S'5 Jun 5 151,MZ '173 $ i5.,c1_,672 $ IKsSI,Ud i i'T ', 1E; $ fx 552.'S^ 4 IS5,'AP.SS $ 1ci,e15,27S $ IS' ,"eEsss d 'I M'2.5,515 N'el5,5M $ 22E'22212 ,ul F 1?2d2k2 & 17,ir..G,6d3 S 14 i , _�,43E S ISS,YE,3-"--' S 152P3E,"'6 S 'I7sS72,[35 $ ssY,'2E,'z5 $ _'9s,`E-i,SJR' $ _ i.E0.° �14 $ ,-,xE1,1 ]S $ 23e'Sa2'2Is Aug 5 1?--[ 1 '1's.5 5d£ 5 1310S,"-£ 1 1 J:_'SS- $ fe_, 12[,[�i1 4 Ife.2.2,£� 5 192,'£5,[?= 7 262,+-s,533 E Y , `-,2s2 . ep 5 13'S"5S9 $ Ia2a ,4ce $ 1515'4,Gi5 $ 141545,I'.2 $ f3512'-,5El $ I55, 1`",55. $ I_.'.','.'_a, I:g3 $ 155,523,355 d I5S_.=E3,""-19 2e£,=11,"-55 $ .1:4'1117 34 'IEE 3 1.222.3 ' 3 11.,. 1'" s SN'9`:o. 3 f[E.3=_',[5S $ 10?a'E,01? 3 Is .sEa.6'-- $ I6,6_t,4A5 g 19 ,46,2?-. $ Id9,6S3, ]i $ IF .W:'SE $ %,`s:.?I? Nrru 5 In,.77s,Sa2 1 �.•. I,2'.` 5 151 s�31,24[ $ .ee_,-£2 $ f4_115,£E3 $ 144 �"5,"'3 5 IE:}`£d,[S3 } 12F"`£,5r.`. E I£'2,23',551 } —,[d'-,117 E Iq-,G43,=i5 } 2'3�E53.T�5 5 t77"2-, $ i5,_P,7£d $ f _tk4.x. a£. $ ?�s#I,G££ $ f40 SC,'d] $ 1445�2,' $ 'In6y_sG[,[55 } IE8,5[`,i53 F 'I9i,G£'1,555 } IE,Er1,553 F :�£,23a,'12 T 5 S $ .. L'-3.Si1, S 1322,42J2s 1 1,34_d ,@'3 E 21(.3,[5£,w 5 _--,777.2 § 2,b,455157 5 _'e££,2£5.351 § Z,.7,973.Y 5 �£e Table 6 — Monroe County Retail Taxable Sales. Housing Trends: The housing on Layton is predominantly single unit homes with the majority being on canal or open water lots in established residential neighborhoods. As with the rest of the Florida Keys there are restrictions on the number of properties that can be built largely in part due to the ROGO (Rate of Growth Ordinance) restrictions which were set in place to control the level of development in the Florida Keys. The housing market has continued to improve over the past 2-3 years with levels coming close to the pre -recession levels. There has been a shortage of supply of homes which has driven the prices up along with the sell-off of the distressed homes and homes in poor condition. New construction has returned to the market, with several new developments recently completed as well as a number of individual properties. The Florida Keys are issuing building permits on a point based system and with the average time to obtain a building permit shorter than in previous years. ROGO exemptions have previously been made available by private owners which have been purchased by developers. The table below shows the breakdown of the owner occupier and renters in the City of Key West and Monroe County. Kev'% e5t H01151I1a. PI.0file CNN -291'_ Fne ]eas'Es[ a ,10 Re+; i4'c.zt h2onrae Co[tnn- Total Hauling Units' 17,735 5.'1 917 0-up-1 Han p Un m 11.739 (66.2-a) 29 41 (i 5 4'44,m1 A,e-ge -Vun'rber of Anonxa_ 4.1 44 A -erage " wnbes- of Vehic less: 1.9 2.0 .an Hauaehald Income.: 552.660 S 3.416 Canner 0 .vied 111ru.sina U. it,: 5�869 17,1,96 Percent of 0—upied Units': 50a b tit °'. A, ,age Nu be, of Hausel-ld `Lembers.--. 2.SS 2.34 'vledian Value 4reupied Lnit_ S432.606 S157'00 ivleddS. l�lanthl't Heusive Cass -.11 Aloxtgage S2,534 S2 034 Renter 0c pied 1lai aT'nits: 5..8_0 11_i45 Percent of 0—upied Units nits 544 b 39 ° a Average Yu -be, of Hausehald 22--bers 2.._1 2.71 2vlediau Al—thly Housnae Casl S 1.4fl9 Si �390 Forrv.. .S C".,rt_ras Blar a rFmds C _ Figure 5 - Housing profile (Key West and Monroe County) Appraisers of the Keys Page 28 of 85 File# 13927 Client File # 00058381 68300 Overseas Highway, Layton, FL 33001 Major Employers: There are no single large commercial employers who operate in the Florida Keys and Key West, however one of the largest employers apart from Monroe County is the US Navy, which is based at sites both on the island of Key West and in the Lower Keys. Typically, these employees are ex -serviceman and women who have recently retired from the service and can take civilian jobs on the sites. There is a large labor force associated with the tourism industry. This is the primary sector in the Florida Keys with bars, restaurants, guesthouses, and hotels making up most of the businesses. NO. OF EMPLOYEES Pax r si� r<c.�s,�=emus 4"m.r, ACC,:,. er.Cr- Figure 6 — Major Employers in Monroe County. Many of the business owners in the Florida Keys are local "Mom and Pop' businesses with a small number of employees who have been in the same building for many years. There are some larger national chain stores located in Key West and Marathon which have larger employee numbers. Unemployment trends: Monroe County has one of the lowest unemployment rates in the country and is well below the national average. Historically the Florida Keys has had a lower than average unemployment rate compared to the rest of the country The area is predominately tourist driven with second and third home buyers which causes the transient employees to come to the area during the tourist seasons. Figure 7 - Employment Rates (Monroe County v Layton) Appraisers of the Keys Page 29 of 85 File# 13927 Client File # 00058381 68300 Overseas Highway, Layton, FL 33001 - ° <_" • V ! AE ir?(2Y Commercial Market: The commercial real estate market has lagged the residential market with an increase in values after the recession mainly due to the sell-off of the distressed properties. The hospitality units have driven the market due to the continued growth in the local tourism industry which continues to be the case today. Commercially there are no single, large companies who operate in the Florida Keys with most of the business owners being local companies or "Mom and Pop" organizations with a small number of employees who typically purchase the smaller units and occupy them themselves. Multi -unit properties are investor driven with a mix of local and regional investors. There are no large institutional grade properties in the Keys outside of Key West and no speculative new build. Most of the commercial properties are older structures that have not been removed and replaced. The lack of new build is predominately due to the current oversupply in the market and the lack of available commercial land. Other factors restricting development include the high build costs quoted by local contractors and the unique geography of the area. The typical commercial purchaser is looking for smaller individual units either to use as office space or retail space with good exposure to the passing traffic on the Overseas Highway. Larger national and regional tenants or purchases are looking for the larger stand-alone properties or units in the larger shopping plazas and are typically drawn towards the higher populated centers of Key West, Marathon, and Key Largo. There are several larger shopping plazas spread out over the Florida Keys typically with a single anchor tenant. Most commercial units are on the Overseas Highway utilizing the good exposure and visibility to the passing traffic with the residential uses reserved for the established neighborhoods on the secondary streets. The following pages show the trend of the local property market based when searching the Florida Keys between mile marker 5 and 107. The properties in the City of Key West sell for higher values due to their superior location within the prime shopping and tourist areas of the Keys and would not appeal to the same purchasers. The guest houses, motels/hotels, restaurants, and marinas are not typically purchased on a price per square foot basis and can distort the figures. These are typically purchased by investors who have experience in running and operating those types of business and again are not comparable. The data used has been obtained from the local MLS system as well as searching public records and contains all commercial properties. G:) Amfiwa, Said and Nm Uwfi npa, and Irrxan0ory Mar Florida Kays MLS, Inc. an ItOUN1722 1 :03 A PM '...,: PA�+H%S I -m, 1yy 0- .°. i�ss41 Figure 8 — Inventory and Sales volumes (source Flex MLS) Appraisers of the Keys Page 30 of 85 ff AM File# 13927 Client File # 00058381 68300 Overseas Highway, Layton, FL 33001 The graph above shows the inventory and sales volumes for the commercial market. This shows that there is currently an oversupply of properties with the sales volumes stable, on a month by month basis, over the past 3 years. This is compared to the overall commercial market in Monroe County which shows a similar pattern. The market has been driven by sales of mixed use properties and hospitality and lodging properties as investors are looking to capitalize on the increase in tourist figures. Numbefa1'L f Li Prig. $2.4M Fir Si "A � e '--=E`er,.... CtAl AiU.Ya h'edLo+ Lb? P r v.. W n,a& k"cdlar Lsr. PdM .fivatxa 1. ain::r laa i�., #dd� i�€�+ •ail ka.' +&'aw.0 .AbV.qrpjIqn $5?tv, in ont Vold. to U151 RWVQ 33 Mo. I � 95 27 Un 5'J4 i r{�afi 2A N. nN & Ah*.. mUon R= #Solo m OrUnS. LL: Prkc RIIAa .. Dmyys on Narkct f [ PNecr volurrrc Wo SA{IWL° q-0 s52071' ... _. ..... _. "UY y NO $fl€lV so .. Li 0 i. E^ 0,*Y UAL) hjm & Nw.v LhPhlrnw € # ?r ae�u liCi'd �, E # fi€43 %gxL+1e5 Y,irw Figure 9 — Overall Market data (source Flex MLS) The graphs above show the overall Monroe County market and shows that the sales volume in term of dollars has remained stable over the past 12 months with the number of listing sold also stable. The following graph supports the data taken from the local MLS system and is provide by a V party commercial research website. (Costar). Appraisers of the Keys Page 31 of 85 File# 13927 Client File # 00058381 68300 Overseas Highway, Layton, FL 33001 Sa14, s V c'kun) II.,,-r _`._I yea Esi pif=a Sales VGlumes -Manfoe County - C a star 2212 —11 °pry=;-n 2C.'.a e' °x 3" Figure 10 — Sales volumes in Monroe County in dollars (Source — CoStar) There is still an oversupply of commercial units with median marketing time of less than 12 months with the sales volumes having fluxuations based on seasonal variations. sold norms. umhu dwFlnMa.'z'MLS.Inc. on11.td'S84Tait10:04AM 1.�iK ilwg'-n qni 0 G 2 r Figure 11 - Sale volumes commercial market — Monroe County Rental market and occupancy rates: The rental market is typically stronger in the more populated centers, such as Key West, Marathon and Key Largo. Rents in the City of Key West are within the $20.00-40.00 per square foot range for office space with much higher rents found the closer to the courthouse and Historic Centers with retail space on Duval St closer to $100 per sq. ft. From research of rents in the City of Marathon, they range from $14.00 to $26.00 psf with the higher figures Appraisers of the Keys Page 32 of 85 File# 13927 Client File # 00058381 r 68300 Overseas Highway, Layton, FL 33001 located in the larger plazas occupied by an anchor tenant. The rents in the Upper Keys are in the $15.00 to $25.00 per square foot basis with the higher rents once again around the more populated areas including the commercial corridors in Islamorada, around mile marker 80 to 85 and in Key Largo around the 100-mile marker. Commercial units away from these centers typically are towards the lower end of the rental range. There are some larger plazas both solely on the 111 floor with a few plazas being 2 stories. Units located on the 1st floor typically rent for more than the units on the 2nd floor and has been confirmed by rents found in the local market. This is also reflected in the occupancy rates with several units on the 2nd and 3rd floor reporting lower occupancy rates and longer marketing times. There are several multi -tenant properties located in the Upper Keys which have the higher rental figures due to their location in established plazas anchored by national tenants. The rates are higher as these properties typically have a Common Area Maintenance (CAM) fees. These plazas are showing higher occupancy rates and lower marketing times. Most of these smaller units are owner occupied and mainly comprise of detached 1,500 — 2,500 sq. ft. properties or smaller mixed use properties with a residential space above which is either rented out or occupied by the owner. Residential: The residential market has increased quicker than the commercial market and has been driven by the second and third home buyers. The homes in Monroe County vary in terms of style, condition, location, and views and comprises of several custom-built neighborhoods with no tract housing. The homes vary from the older manufactured homes located on dry lots to larger custom built, estate style homes on large open water lots. The subject's immediate neighborhood comprises of a mixture of older manufactured homes, either on individual platted lots or in established parks, older grade level single unit homes to newer PUD's with modular homes built on stilts. There has been a trend of removing the older manufactured homes and replacing them with modular or custom built stick homes. There has been an increase in the residential construction market with several new homes and developments being constructed with many of these developments have been for market rate units. Development in the Florida Keys is regulated by the county under the ROGO system. The following in an extract taken from "A New Era in Growth Management: A Layman's Guide to Residential ROGO" published by Monroe County. 6 "The process of receiving o building permit in Monroe County is o competitive process. ROGO establishes the rules and procedures for that competition. This competition is o point based system that allows everyone applying for a new residential or commercial building permit to compete against each other for the limited number of allocations issued each year. The number of allocations available is determined through the adoption of on administrative rule on the state level. The number of allocations is based on the progress Monroe County has mode toward achieving state set goals such as o central wastewater system being available keys wide. The total number of available allocations is split among the three sub -areas of Monroe County. The Upper Keys, Lower Keys and the Big Pine and No Nome Key planning area. Each applicant competes against the other applicants located within the some sub- oreo. There is one exception to this process, applicants for offordoble housing. Affordoble housing applicants compete against oll applicants for affordable housing permits keys wide. Allocations ore awarded each quarter in each sub -area with the exception of Big Pine Key and No Nome Key where allocations ore awarded annually." The following graphs have been taken from the local MLS (Key West Association of Realtors, Inc) provided by Trendgraphix products and show the overall residential market for Monroe County. 6 http://www.floridakeyskeywestrealestate.com/pdf/laymansguideROG0.pdf (found August 14th, 2013) Appraisers of the Keys Page 33 of 85 File# 13927 Client File # 00058381 68300 Overseas Highway, Layton, FL 33001 Figure 12 - Monroe County residential market over past 4 years The graph shows the overall residential market for Monroe County and shows that the market has increased from 2012 at a steady rate. Seasonal variations effect the residential marker with typically higher sales volumes over the winter months when tourist figures and seasonal resident numbers increase. Overall the residential market has improved over the past 4 years with a shortage of supply in the market, however has since stabilized and is affected by the high list prices. Sale volumes over the winter months has been lower than average. There have been sales of affordable housing units which are restricted by the maximum sales prices designated by either Monroe County or the City of Key West. These units are selling a 100% of their maximum price. These units are typically townhomes located in PUD or condominium developments which offer common areas amenities such as pools, parking, landscaping and in some cases clubhouse with gyms etc. There is a lack of affordable housing in the county which has been recently high -lighted by a number reports commissioned by Monroe County. The higher cost of living reported in the Florida Keys and the large number of lower paid service industry employees along with the large number of second and third home owners has driven both the sales and rentals out of the range of these employees. The lack of available land, zoning and the "Not in my back yard" groups have restricted new developments of affordable housing in the County. The City of Marathon is offering a program that allows for the transfer of ROGO units from one site to another with the old site and improvements being designated as affordable. Hurricane Irma: Hurricane Irma hit the Florida Keys on September 10, 2017. The Lower Keys from mile marker 5 through 35 sustained the most wind damage along with the City of Marathon, while the Upper Keys sustained the most water damage. The storm did impact the entire county, (Monroe County) and there are damaged properties throughout the entire county. Historically, sales volumes increase and the mean sales price decreases after a storm, which is typically due to investors purchasing damaged homes, AS IS, to repair and flip. After Hurricane Wilma in October 2005, values did decline, this however was mainly due to the overall economy as the nationwide recession followed less than 18 months after the storm. After Hurricane Georges in September 1998, values were not negatively impacted. There was a short period of lower sale prices, again mainly due to the damaged homes being sold off AS IS. There are no historic patterns from which to derive a conclusion as to any effect on marketability or market values. As of the effective date there have been several pending and contingent sales that were listed prior to the storm. Based on interviews with the local realtors, most of the pending sales on homes without major damage are moving forward at contract prices, this would indicate a stable market. There have been sales of commercial units in the Keys since the storm also supporting the market opinion. Appraisers of the Keys Page 34 of 85 File# 13927 Client File # 00058381 68300 Overseas Highway, Layton, FL 33001 Market Participant Interviews: Interviews were undertaken with local realtors and brokers to further support the market trends discussed above. From these interviews the participants confirmed that the typical commercial unit is a small detached unit or a unit situated in a strip center with the typical purchaser being owner occupiers. They report that there are local and regional investors in the market place, however, they are looking to purchase the larger properties containing multiple units due to the potential income stream. There have been sales of hospitality units in the area by again local or regional investors look to take advantage of the increase in tourist numbers. There is still a large amount of retail and office space available in the City of Marathon and the competing neighborhoods which will keep market value and market rents stable. Higher rents are typically found in the larger plazas with large national retailers typically taking this space. There is demand for the smaller retail space from local tenants. Due to the recent storm, contractors and government agencies that are involved in the clean-up are leasing space for the next few years at market levels. There have been several sales of commercial properties in Marathon over the past 12 — 24 months not comparable to the subject property type as they are older commercial buildings with residential properties and typically sell for a higher price per square foot than office space due to the residential elements. S.W.O.T Analysis (Strengths, Weaknesses, Opportunities, and Threats): Strengths/Opportunities: The subject is a single -story, purpose built detached office building on the Overseas Highway. The subject has good exposure to both the north and south bound lanes of the Overseas Highway. There is good off-street parking to the front along with parking to the rear. Weaknesses/Threats: The subject has been damaged as a result of the recent storm and has damage noted previously. The cost to repair the property may result in the subject not complying with the FEMA 50% regarding properties that have significant damage and built in a flood zone. If the cost of the repairs is determined at more than 50% of the value of the improvements, then the structure may have to be razed or brought up to code. The subject is situated further away from the main commercial centers of Marathon and Islamorada. The subject is an older building in an active flood zone and has high insurance costs. Conclusion: The overall economy of Monroe County has improved over the past 3-4 years with tourism still accounting for the primary source of funds generated for the local economy. From the figures provided by Smith Travel Research and the Key West Chamber of Commerce, tourist figures have continued to increase over the past 3 years with the outlook for the remainder of 2017 unknown due to the recent storm. The Florida Keys has embarked on a large marketing campaign in the national media showing that the Florida Keys is open for business with the local Tourist Development Council (TDC) has spent over $1 million on advertising. The hotels and motels have re -opened, however are partly occupied by FEMA workers and displaced residents. Until more permanent lodgings can be found the hotel rooms will be occupied by those people affected by the storm. This may affect the recovery of the area in the short term. The peak season does not start until January and it is likely that most of the clean-up from the storm will have been completed by the start of the peak season. There have been sales of both residential and commercial properties since the storm with only the properties with significant damage showing larger price reductions. Homes that were not damaged have not had price revisions. The Florida Keys is a tourist driven economy with a second and third home buyer active in the market. The high Appraisers of the Keys Page 35 of 85 File# 13927 Client File # 00058381 68300 Overseas Highway, Layton, FL 33001 season starts at the beginning of year and runs through April. These months typically have a higher sales volume as compared to the summer months with September normally the quietest time. The commercial market has slowed mainly due to the higher list prices of the active properties. Over the past 12 months the sales volumes have decreased from the previous year with only the investors purchasing the lodging properties propping up the market. There smaller commercial properties are being purchased by owner occupiers. There is an oversupply of commercial properties listed for sale with the marketing times over 6 months. The rental market has remained stable and there have been several commercial spaces both office and retail that have been leased over the past 12 months. As stated earlier office space is being leased by local agents to government agencies and contractors involved in the clean-up of the Florida Keys. These units are leasing at full asking rent for up to 2 years. Appraisers of the Keys Page 36 of 85 File# 13927 Client File # 00058381 68300 Overseas Highway, Layton, FL 33001 Location Map Figure 13 - Subject Location and aerial map Appraisers of the Keys Page 37 of 85 File# 13927 Client File # 00058381 68300 Overseas Highway, Layton, FL 33001 Identification of the Subject. Property Description - Site. Gross Site Area: 68300 Overseas Highway: 12,500 sq. ft. — 0. 2869 acres. Vacant Lot: 6,250 sq. ft. — 0.1434 acres. TOTAL: 18,750 sq.ft. — 0.4304 acres. Primary Road Frontage: Overseas Highway —approx.150ft. (total) Secondary Road Frontage: None Shape: The lots are rectangular in shape. Contiguous lots: Yes Visibility: Good. The subject is located on the main highway running though the Florida Keys and is surrounded by both commercial and local government uses. Water Frontage: Yes — canal to rear with approx. 150 ft. Topography: The subject has level topography at grade. Zoning: 68300 Overseas Highway: C —Commercial (City of Layton) Vacant Lot: C —Commercial (City of Layton) Legal Description. 68300 Overseas Highway: LONG KEY ESTATES SECOND ADDITION PB4-127 LONG KEY LOTS 28 & 29 BLK 3 OR613-729 OR614-590 OR614-591 OR915-276 OR1029-1865 RE 38763 COMBINED FOR ASSESSING PURPOSES 4-1-92 OR1507-1946 Vacant Lot: BK 3 LT 30 LONG KEY ESTATES SECOND ADDITION PB4-127 LONG KEY OR775-1395 OR782-1472 OR1053-1428/JB OR1327-1390(JB) OR1809- 2489 (J M H ) Parcel ID and Alt Key #: 68300 Overseas Highway: 00387620-000000 - Alt Key #1475742 Vacant Lot: 00387640-000000 — Alt Key #1475769 Utilities: Electricity: Florida Keys Electric Corp Sewer: FKAA. Water: FKAA Gas — None (Gas is not public utility in Florida Keys) Flood Zone: Flood Zone AE, which is classified as a flood hazard area. FEMA Map Number: 12087C1179K FEMA Map Date: 02/18/2005 Appraisers of the Keys Page 38 of 85 File# 13927 Client File # 00058381 r 68300 Overseas Highway, Layton, FL 33001 Easements/Encumbrances: None noted. No survey has been provided. Environmental Issues: Hazardous Waste: No information regarding the presence or absence of hazardous waste on the subject property was provided. This appraisal assumes the absence of any and all hazardous waste on the subject property. If hazardous waste is found to be present on the subject property, an adjustment to the valuation contained in this report may be required. Aerial and Plat. I Aerial map — improvements I Aerial map — Vacant lot I hIF KIP 4 0' .➢'yaw'rr 5tn ti.. Plat map — improvements I Aerial map —vacant lot Figure 14 - Aerial and plat map — (source Monroe County Property Appraisers website) Appraisers of the Keys Page 39 of 85 File# 13927 Client File # 00058381 68300 Overseas Highway, Layton, FL 33001 Flood map. STDB 110111r. W%T?% V�nI! E a4alfi Kinp, W1. YA-xx 1. . Tr:el D: 1,Y) In, i k a::'Y o I Ac a a t e ic ma-j: h o j -i 'A i.x tea a -%in-'I e ys -�-I .'W�I� - C� I IL "I I c., F 1 -�Fa, -,:V.' F L J.'-T 'IF PI 1, nl�;— ,—N, I k 1 .5 i a, s. V Figure 15 — Flood Map (source — STDB) Appraisers of the Keys Page 40 of 85 File# 13927 Client File # 00058381 68300 Overseas Highway, Layton, FL 33001 Property Description - Improvements The subject being appraised is a single story, detached mixed -use property with a small office space, storage area, and a residential unit to the rear. At time of inspection the property was 100% owner occupied with no current lease agreements. The building is a single story, grade level, mixed -use property with both a pitched metal roof and flat roof with rolled asphalt covering. The pitched roof structure is timber trusses with the flat rood believed to be timber joists with timber roof deck. The roof is set over a mix of CBS and timber framed external walls with a mix of painted stucco finish and timber siding. The windows are a mix of single hung vinyl, sliding windows, and older metal awning type with some windows protected by metal Bahama style shutters. Entrance doors are a mix of solid core to the rear and glass doors to the front commercial space. There are 2 up and over garage doors leading to the storage areas. The structure is built on a concrete slab foundation with an access ramp to the garages. Internally, the subject is divided into office space, storage areas, and a residential apartment to the rear. The ceilings are 8ft. in height with a mix of acoustic drop ceilings and painted dry -lined sections. The walls are painted dry -lined finishes to the both the internal face of the external walls as well as to the internal partitions. The partitions have been used to delignate the residential space. The flooring to the residential space is ceramic tile while the office space has heavy duty vinyl tile. There is exposed concrete flooring to the storage spaces. The office space has a restroom with toilet while the residential space has a full residential bathroom. The residential space also has a full kitchen. The property is climate controlled by a roof mounted central air conditioning units. There is a single electrical meter and a single water meter. The subject is connected to the mains sewer and has all countywide utilities available. The subject has no gas supply, and this is not a public utility in the area; Propane gas is available. There is adequate off-street parking to the front of the property which can be accessed directly from the main highway via the curb cuts with parking up to 5 cars. Year Built: The property was constructed in 1964 as per the Monroe County Property Appraisers property card. Construction Details: EXTERIOR: Foundation: Poured concrete pad foundations. Roof Cover: Metal v-crimp and rolled asphalt. Roof Structure: Timber trusses and joists with plywood. Exterior Walls: CBS and timber framed walls with painted stucco and timber siding. Windows/doors: Mix of single unit, sliding and older awning windows. Glazed and solid core entrance doors. Metal up and over garage doors Bahamian storm shutters. INTERIOR: Appraisers of the Keys Page 41 of 85 File# 13927 Client File # 00058381 68300 Overseas Highway, Layton, FL 33001 Ceilings: 8ft. height with a mix of acoustic tile and painted dry lined finishes. Internal Walls: Painted dry lined walls to the internal face of the external walls and to the internal partitions. Floors: Ceramic and vinyl the with exposed finished concrete to the storage areas. Doors: Solid core paneled doors. OTHER: Kitchen: Full residential kitchen Restrooms: Restroom to office space with toilet. Full residential bathroom. HVAC: Central air conditioning — roof mounted Electrical / Fire protection: 3-phase electrical system. 1 electrical meter. Fluorescent and incandescent lighting. Economic Age and Life: Actual Age of improvements 53 Estimate of effective age 30 Total economic life 60 Estimate of remaining life of improvements: 30 Accrued Physical Incurable Depreciation 50.00% Conclusion: The subject build quality is average and has had a new roof installed in 2007. The interior of the subject is in average to fair condition and has suffered significant damage from the recent storm and the damages are detailed below: 1) The subject has suffered flood damage which has resulted in significant areas of the drywall to be removed (up to 3ft) as well as localized impact damage to the drywall. 2) Because of the flooding the base cabinets and drywall to the residential kitchen have been removed. 3) The wood dock to the canal has been damaged and in some places collapsed due to the storm. 4) Minor damage to the fascia and soffits to the roof line. 5) Missing sink to restroom. Appraisers of the Keys Page 42 of 85 File# 13927 Client File # 00058381 68300 Overseas Highway, Layton, FL 33001 The appraiser has estimated a cost to cure the deferred maintenance and this has been estimated at $75,000. The client should be aware of the FEMA 50% rule regarding the repair of damages to properties within a flood zone which were caused by a natural disaster. The cost of the repairs cannot exceed 50% of the market value of the structure (no land value included) otherwise the improvements must be removed or brought up to code regarding building in a flood zone. The client should contact the local FEMA coordinator for more information. The appraiser's estimate of $75,000 to cure includes the replacement of the kitchen, drywall, paint, replacement of the missing soffit and fascia's, and the repair of the dock. The appraiser is not a licensed contractor or cost estimator and the cost used have been based on industry price books, discussions with local contractors, and from market data on properties damage by the recent storm. It is the appraiser's recommendation that a licensed contractor provide a cost to cure the damages and these should be forwarded to the appraiser. Any changes in assumptions could affect value conclusions. Appraisers of the Keys Page 43 of 85 File# 13927 Client File # 00058381 68300 Overseas Highway, Layton, FL 33001 Floor Plan: T37:._c11G:1h �xA zr. bj-2 I: me7e, srt. I M0 2 arnxt Figure 16 — Improvements Appraisers of the Keys Page 44 of 85 File# 13927 Client File # 00058381 68300 Overseas Highway, Layton, FL 33001 Assessment and Taxes County Appraised Value Land $162,500 $162,500 $162,500 $25,000 $25,000 $25,000 Improvements $182,173 $183,347 $123,766 $1,528 $1,694 $1,569 Tax Market Value $344,673 $345,847 $286,266 $26,528 $26,694 $26,569 Assessment Ratio 100% 100% 100% 100% 100% 100% Assessed Value $344,673 $345,847 $286,266 $26,528 $26,694 $26,569 Taxable Value $344,673 $345,847 $286,266 $26,528 $26,694 $26,569 Tax Rate 12.1149 11.9791 11.4383 12.1149 11.9791 11.4383 Tax Rate Per $1,000.0 $1,000.0 $1,000.0 $1,000.0 $1,000.0 $1,000.0 Real Estate Taxes $4,176.00 $4,143.00 $3,274.00 $321.00 $320.00 $304.00 Special Assessments $498.32 $498.32 $498.32 $0.00 $0.00 $0.00 Total Taxes $4,674.00 $4,641.26 $3,772.72 $321.38 $319.77 $303.90 Payment Status Paid Paid Current Paid Paid Current Amount Due $0.00 $0.00 $3,772.72 $0.00 $0.00 $303.90 Table 7 - Real Estate taxes - 2017 assessment year Note: 1 Total Assessed Value taken from Monroe County Property Appraisers website and records. Other taxes are for the City of Key West waste water. (Non -Ad Valorem taxes). Tax History: Many purchasers and investors are aware that real estate may be reassessed upon the completion of construction, substantial remodeling or renovation or a market sale. The subject appears to be assessed in line with similar properties in the area and should not be appealed. The assessed value has remained stable over the past 3 years. The current Monroe County Property Appraisers website does not show the breakdown of the assessed value in terms of land and improvements and they have been combined as shown above. Many purchasers and investors are aware that real estate may be reassessed upon the completion of construction, substantial remodeling or renovation or a market sale. Based on the appraiser's analysis the majority of the sales in the area have not been re -assessed to the sales price. 68300 22814 30046 101621 Address Overseas Hwy, Overseas Overseas Overseas 201 20th St, Layton Highway, Highway, Big Highway, Key Marathon Cudjoe Key Pine Key Largo Year Built 1964 1976 1974 1959 1986 Tax Year 2017 2017 2017 2017 2017 Assessed Value $312,835 $217,426 $265,012 $216,002 $288,610 $216,002 $288,610 $246,763 MarketVaIue $312,835 $217,426 $265,012 $332,058 $288,610 $217,426 $332,058 $275,777 GBA 2640 1820 1764 1408 2320 1408 2320 1828 Assessed vaI ue per GBA $118.50 $119.46 $150.23 $153.41 $124.40 $119.46 $153.41 $136.88 Sale Date - 6/16/2017 1/27/2016 5/20/2015 10/14/2016 Sale Price - $390,000 $510,000 $599,000 $700,000 $390,000 $700,000 $549,750 Old Assessed value - $202,164 $265,012 $187,949 $289,668 $187,949 $289,668 $236,198 New Assessed Value - $217,426 $265,012 $216,002 $288,610 $216,002 $288,610 $246,763 Percentage Change - 7.02% 0.00% 12.99% -0.37% 0% 13% 5% Percentage of Sale 1- 55.75% 51.96% 36.06% 41.23% 36% 56% 46% Table 8 - Comparable tax records Appraisers of the Keys Page 45 of 85 File# 13927 Client File # 00058381 68300 Overseas Highway, Layton, FL 33001 Zoning The City of Layton has zoned the lots C - Commercial. The information has been taken from the City of Layton Planning department. Below is an extract from the City of Layton's Code of Ordinance. • ARTICLE II. -ZONING DISTRICTS ESTABLISHED; ZONING AND LAND USE MAP • Sec. 126-26. - Zoning district specified. (a) Declaration of zoning districts. In order to regulate and limit the height and size of buildings, to regulate and limit the intensity of use of land area, to regulate and determine the area of open space within and around surrounding buildings, to classify, regulate and redistrict the location of commercial uses and the locations of buildings designed for specified residential uses, the city hereby is divided into five districts known as: (1) "SF" single-family district. (2) "MF" multifamily district. (3) "C" commercial district. (4) "CD" conservation district. (5) "PD" public use district. (b) "SF" single family district. The purpose of the "SF" single-family category is to provide for single-family detached residential development along with recreational, governmental, and educational uses allowable as a special exception if it can be demonstrated that they are not disruptive to a residential environment. The maximum density for this category is 8.7 units per acre. (c) "W" multifamily district. The purpose of the "MF" multifamily category is to provide for a housing mix in the city and to provide for buffer areas between single-family areas and other uses and facilities. Other uses which can occur in this category are recreational, governmental, and educational uses as a special exception if it can be demonstrated that they are not disruptive to a residential environment. The maximum density for the multifamily category is 12.0 units per acre. (d) "C" commercial district. The purpose of the "C" commercial category is to provide commercial activities that will serve the needs of local residents and tourists, as well as uses that will enhance the tourist industry in the city and the county. It is also the intent of the city to encourage commercial uses that reflect the historic, aesthetic, and natural attributes of the Florida Keys. The maximum floor area ratio (FAR) for this category is 0.60 square feet. Planned developments in accordance with the city's land development regulations shall be allowed and encouraged in the commercial district. (e) "CD" conservation district. The "CD" conservation category is intended to recognize, and discourage development in, areas containing highly environmentally sensitive areas that should be preserved. As such, development is discouraged in this area in order to protect fisheries and vegetative communities. However, a density of one unit per five acres may be transferred to developable areas of the city, including onsite transfers to non -jurisdictional areas north of Zane Grey Creek, except for single-family areas. The maximum density of any non -jurisdictional onsite areas designated as conservation to which densities are transferred/clustered is four units per acre, provided such areas do not require fill within jurisdictional wetlands for access. Any development on non -jurisdictional areas shall also provide a minimum setback of 20 feet from Zane Grey Creek and wetlands, and this area shall be revegetated with transitional plant species. Height shall be limited to two habitable stories and a minimum of 50 percent of the site shall be maintained as open space. Further, it is the intent of the city to establish an interlocal agreement with the county, or some other appropriate instrument or method, to allow the transfer of these units to developable areas of the county. Further, all lands from which units are transferred shall be deeded or transferred in some manner in perpetuity to the city or other government upon approval by the city council. Appraisers of the Keys Page 46 of 85 File# 13927 Client File # 00058381 68300 Overseas Highway, Layton, FL 33001 (f) VD" public use district. The "PY public use category is intended to accommodate public, governmental, institutional, or recreation uses. (LDR 2002, § 13.01) Commercial District: The "C" commercial district is intended to provide retail commercial activities and services that will serve the needs of local residents and tourists, as well as encourage uses that will enhance the tourist industry in the city and the county. It is also the intent of the city to encourage those uses in the commercial "C" district that will enhance the aesthetic and historical character of the city. Permitted Uses: Business Services Accessory Uses: Uses customarily incidental to permitted uses Special Exemptions: Restaurant, Sale of alcoholic beverages in conjunction with a permitted or special exception use, Tourist attractions, not including fairs, carnivals and other temporary amusements, Tourist lodging facilities. Food and convenience stores, marinas, Marine research facilities, Boat rentals, service and sales, Automobile service stations, planned commercial development, planned unit development: (FAR greater than 60% with maximum impervious surface ratio of 40%.), Mixed use developments, Shopping centers and Fishing, boating and other types of lodges and clubs associated with the natural attributes of the Florida Keys. Sec. 126-119. - Schedule of site regulations. Minimum lot size: 5,000 sq.ft. Maximum density: For tourist lodging facilities, 16 units per net acre. Minimum dwelling size: 200 sq.ft. Minimum lot width: 50 feet Maximum lot coverage: 60% impervious surface ratio Set Backs: Front = 10 feet Side = 5 feet Rear = 15 feet Canals = 20 feet Max Building height: 30 feet Appraisers of the Keys Page 47 of 85 File# 13927 Client File # 00058381 68300 Overseas Highway, Layton, FL 33001 subject City C?F I,pwa, Florida Curnprchero:Jyc Plain FIGORE 3-4 C17Y OF YTON, FLORIDA FUTURE LM< USE MA:) 2020 F__J'Single-Farnily 500 0 _5ua 11M) F00T Muhl -Family Commercial I n stiti tiuria I Recreation Con.seriation WaftiovWat areas city Ilmds LYrfUJLIuUJLX VS—W�'J d MMV LAIM U6V I.AwAr-Ifl, -Amcn,Aed. 9nAT7 IMZI �4 Figure 17 —Zoning map Appraisers of the Keys Page 48 of 85 File# 13927 Client File # 00058381 68300 Overseas Highway, Layton, FL 33001 Highest and Best Use Highest and best use may be defined as: "The reasonably probable and legal use of vacant land or improved property, which is physically possible, appropriately supported, financially feasible, and that results in the highest value. " 1. Legally Permissible: What uses are permitted by zoning and other legal restrictions? 2. Physically Possible: To what use is the site physically adaptable? 3. Financially Feasible: Which possible and permissible use will produce any net return to the owner of the site? 4. Maximally Productive. Among the feasible uses which use will produce the highest net return, (i.e., the highest present worth)? Highest and Best Use of the Site as Vacant: Legally Permissible: The subject site is in the C — Mixed Use commercial zoning district, as designated by the City of Layton planning department. The section above details the current legally permissible uses. There are no known easements that could adversely affect the development of marketability of the subjects' parcel. The Commercial (C) zoning accommodates commercial uses that serve the needs of both residents and the tourist industry. Permitted uses under right include business services as of right and other business uses including restaurants, lodging, convenience stores, marinas, boat rentals, and mixed -use developments. Single family and multi -family homes are not permitted under right. Due to the location on the main highway and that the neighboring lots are all zoned commercial it is unlikely that a zoning change could occur. Physically Possible: The subject's sites comprise of 2 contiguous parcels of land one containing 12,500 sq.ft. and the other 6,250 sq.ft, both rectangular in shape. The larger parcel has 100ft. on to the Overseas Highway and a depth of 125ft while the smaller lot has a 50ft frontage on to the Overseas Highway and a depth of 125ft. The Commercial (C) zone has a minimum lot size of 5,000 sq. ft. for commercial properties with a Floor Area Ratio (FAR) restriction of 0.60. There is a maximum build height of 30ft. and 2 stories is permitted. All county utilities service the site. Due to the lack of new commercial development the appraiser has determined that the site has adequate square footage to support all types of commercial development. The subject is an infill lot and has canal frontage. Density restrictions would limit the physically possible uses to business services, small retail, and convenience stores. There is inadequate water frontage for marinas. Financially Feasible: The subject has good exposure to the passing traffic as it is on the main highway. The neighboring sites are commercial with the residential uses in established neighborhoods behind. There is limited demand for new office and retail in the area with no new construction. There have been resales and leases in the market but none in the 5 miles surrounding the subject. There is good demand for mixed -use properties that include a residential element either for an owner occupier or in the terms of multiple units an investor. The most financially feasible use would be to hold the site for development of an mixed -use commercial space including a residential space until demand for the commercial market returns. Appraisers of the Keys Page 49 of 85 File# 13927 Client File # 00058381 68300 Overseas Highway, Layton, FL 33001 Maximally Productive: A determination must be made as to which of the feasible uses is the Highest and Best use of the parcel if vacant. The Highest and Best Use is the use that produces the highest or greatest return to the land. As stated in the Physically Possible section the Highest and Best use would be to combine the 2 parcels to increase the lot size to allow for a larger building and open storage. The subject's lots are bounded by mainly commercial properties and benefits from good exposure to the passing traffic on the Overseas Highway. There is demand for hotel uses, however due to the small site size and lack of available hotel licenses makes this use not productive. This therefore, results in the Highest and Best use to develop the site to maximum density with a mixed uses commercial development with a residential element. Development should be held until the commercial market improves with the most likely developer being an owner occupier building the unit to their own specifications. Use Mixed -use commercial Timing Future Market Participants - Users: Owner occupier. - Most Probable Buyers Owner occupier. Highest and Best Use as Improved: Legally Permissible: The subject site is in the C — Mixed Use commercial zoning district, as designated by the City of Layton planning department. The section above details the current legally permissible uses. There are no known easements that could adversely affect the development of marketability of the subjects' parcel. The Commercial (C) zoning accommodates commercial uses that serve the needs of both residents and the tourist industry. Permitted uses under right include business services as of right and other business uses including restaurants, lodging, convenience stores, marinas, boat rentals, and mixed -use developments. Single family and multi -family homes are not permitted under right. The subject's current use is legally permissible and is the Highest and Best Use. Physically Possible: The subject was constructed in 1964. As per zoning, the subject's improvements are legal non -conforming and does not comply with current FAR ratios. The property could be rebuilt if unintentionally destroyed to the current building size and footprint. The subject's current use is the Highest and Best physically possible use. Financially Feasible: The subject is a mixed -use commercial building. The most financially feasible use would be its current use as it does bring the highest return to the land. The cost to convert to any other use would not bring any higher rents or returns to the land. Maximally Productive: The final step is to analyze the site "as improved" The existing improvements are compared to the ideal improvements. Appraisers of the Keys Page 50 of 85 File# 13927 Client File # 00058381 68300 Overseas Highway, Layton, FL 33001 The current use is legal conforming and the highest and best use of the subject's land as improved would be it current use as a mixed -use commercial property as it does contribute value to the site. None of the comparable sales have been purchased for any other uses, have not been converted or demolished. Use Mixed -use commercial Timing Now Market Participants - Users: Owner occupier. - Most Probable Buyers Owner occupier. Appraisers of the Keys Page 51 of 85 File# 13927 Client File # 00058381 68300 Overseas Highway, Layton, FL 33001 Valuation Methodology Three basic approaches may be used to arrive at an estimate of market value. They are: 1. The Cost Approach 2. The Income Approach 3. The Sales Comparison Approach Cost Approach The Cost Approach is summarized as follows: Cost New - Depreciation + Land Value = Value Income Approach The Income Approach converts the anticipated flow of future benefits (income) to a present value estimate through a capitalization and or a discounting process. Sales Comparison Approach The Sales Comparison Approach compares sales of similar properties with the subject 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. 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 different means of analysis and lend themselves to one approach over the others. Analysis Applied A Cost Approach was not applied and is not considered for this report due to the difficulty in determining depreciation and the lack of commercial land sales. This is not a reliable indicator of value and is not typically relied upon by purchasers in the Florida Keys. A Sales Comparison analysis was considered and developed as there have been sales of similar mixed -use commercial buildings in the last 3 years and is typically the driving factor when purchasing these smaller units. Most of the buyers have been owner occupiers. An Income Approach was considered but has not been developed. The typical purchaser would be an owner occupier and is not investor driven as the property is not a multi -tenant building. There have been several leases in the Middle Keys for both office/retail properties and small residential units. Appraisers of the Keys Page 52 of 85 File# 13927 Client File # 00058381 68300 Overseas Highway, Layton, FL 33001 Cost Approach The Cost Approach is based on the principle of substitution - that a prudent and rational person would pay no more for a property than the cost to construct a similar and competitive property, assuming no undue delay in the process. The Cost Approach tends to set the upper limit of value before depreciation is considered. The applied process is as follows: Estimate the land value per its Highest and Best Use by using the Sales Comparison Approach; the process is as follows: o Comparable sales, contracts for sale and current offerings are researched and documented o Each comparable is analyzed and adjusted to equate with the subject property. The value indication of each comparable is analyzed and the data reconciled for a land value indication. • Estimate the replacement cost of the building and site improvements. • Estimate the physical, functional, and/or external depreciation accrued to the improvements. • Sum the depreciated value of the improvements with the value of the land for an indication of value The cost approach was not developed due to the difficulty in determining depreciation and the lack of commercial land sales. The cost approach is not typically relied upon by purchasers in the Florida Keys. Appraisers of the Keys Page 53 of 85 File# 13927 Client File # 00058381 68300 Overseas Highway, Layton, FL 33001 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. • Each comparable sale is analyzed and where appropriate, adjusted to equate with the subject property • The value indication of each comparable sale is analyzed and the data reconciled for a final indication of value via the Sales Comparison Approach. Comparables: Ideal comparable sales are sometimes unavailable due to the unique attributes of the subject property and the local Florida Keys market. The subject property is a detached mixed -use commercial property currently occupied by the owner and being used as an office with storage. The Highest and Best use of the site is to combine the 2 contiguous parcels of land with the improvements being a mixed -use property with residential element. The search parameters were for all mixed -use properties in the Florida Keys which have sold in the last 2 years. One sale of a non -mixed -use property has been used as it has up and over garage doors and was used for storage with ancillary office space. This has been added to show that there is demand for units with storage. Street retail units have been used and are considered comparable to the subject based on rental analysis. Theses space are used interchangeable by owners. The appraiser has attempted to identify the most comparable sales considering the most likely buyer and demand profile for the subject. In this regard, we have researched the following comparable sales for this analysis. These are documented on the following pages followed by a location map and analysis grid. All sales have been researched through numerous sources, inspected, and verified by a party to the transaction. Appraisers of the Keys Page 54 of 85 File# 13927 Client File # 00058381 68300 Overseas Highway, Layton, FL 33001 Sales Summary Address City Subject 68300 Overseas Highway Layton Sale #I 22814 Overseas Highway Cudjoe Key Sale # 2 30046 Overseas Hwy Big Pine Key Sale # 3 101621 Overseas Hwy Key Largo Sale #4 201 20th St Marathon Sale # 5 81167 Overseas Highway Upper Matecumbe Key Sale # 6 98310 Overseas Highway Key Largo Sale # 7 816110 Highway Upper Matecumbe Key Sale Price N/A $390,000 $510,000 $599,000 $700,000 $600,000 $415,000 $775,000 Date of Sale N/A 6/16/2017 1/29/2016 5/20/2015 10/12/2016 11/29/2017 8/3/2017 8/29/2016 Year Constructed 1964 1976 1974 1959 1986 1959 1985 1977 Actual Age at Sale 41 43 58 31 58 32 40 Analysis Price N/A $390,000 $510,000 $599,000 $700,000 $600,000 $415,000 $775,000 SF of GBA 2,640 1,820 1,768 1,408 2,320 2,150 2,293 2,160 Price/SF of GBA N/A $214.29 $288.46 $425.43 $301.72 $279.07 $180.99 $358.80 Units 1 1 2 1 2 1 1 2 Price/Unit N/A $390,000 $255,000 $599,000 $350,000 $600,000 $415,000 $387,500 Mixed Use, Mixed Use, Mixed Use, Marine Repair, Mixed Use, Mixed Use, Mixed Use, Current Use Retail, Retail, Street Retail Office, Service Office, Multi- Office, Multi- Retail, Residential Residential Industrial Family Family Residential Percent Office 62% 38% 64% 100% 52% 75% 36% 52% Land Size sq.ft. 18,750 8,084 16,875 22,000 21,184 25,210 13,885 9,975 Site Size (Acres) 0.43 0.19 0.39 0.51 0.49 0.58 0.32 0.23 Land to Building Ratio 7.10 4.44 9.54 15.62 9.13 11.73 6.06 4.62 Floor Area Ratio 0.14 0.23 0.10 0.06 0.11 0.09 0.17 0.22 Table 9 - Sales Summary Comparable Sales map. Figure 18-Comparable sales map Appraisers of the Keys Page 55 of 85 File# 13927 Client File # 00058381 68300 Overseas Highway, Layton, FL 33001 Improved Sale No. 1 .................................................................. Transaction Name Lower Keys Electrical Date of Sale 06-16-2017 Address 22814 Overseas Highway Adjusted Sale $390,000 Price City Cudioe Key Price Per SF $557.14 State Florida Sale Status Closed Seller Douglas Bell Sale Conditions Arm's Length Buyer Lower Keys Electric Inc Rights Conveyed Fee Simple Recording Date Days on Market 0 Book/Page 2860-689 Confirmed With Buyer/Seller/contract Legal Description BK 1 LT 16 CUDJOE OCEAN SHORES CUDJOE KEY PB5-107 OR564-756/59 OR700-480 OR783- 630/33 OR808-382D/C OR781-1504 OR845-2157 OR845-2158 OR846-2158 OR898-927C OR911-1521/25 OR923-2040 OR1188-668 OR1633-2206 OR2528-380/40OF/J OR2559- 1880/81 Site Land Sq. ft. 8,084 Topography Level Frontage Overseas Highway Zoning SC Shape Nearly rectangular In Flood Plain? Yes Utilities Electric and water Environ. Issues? None Improvements and Financial Data GBA 1,820 PGI NA Rentable Area 700 EGI NA No. of Units 1 Expense Ratio NA Year Built 1976 NOI NA Building Condition Average OAR NA c.......................................................................................................................................................................................................................................................................................................................................... I ................ Remarks Mixed use commercial unit with small office space to the front and a 2 bed 1 bathroom unit to the rear. Located on the main highway with additional storage garages below. Conventional financing, purchased by the tenant and not listed in the local MLS system. Appraisers of the Keys Page 56 of 85 File# 13927 Client File # 00058381 68300 Overseas Highway, Layton, FL 33001 Improved Sale No. 2 Transaction Name 30046 Overseas Hwy Date of Sale 01-29-2016 Address 30046 Overseas Hwy Adjusted Sale $510,000 Price City Big Pine Key Price Per SF $288.46 State Florida Sale Status Closed Seller Humphrey Holdings LLC Sale Conditions Arm's Length Buyer Octopuss Gardens of Key Inc Rights Conveyed Fee Simple Recording Date 02-01-2016 Days on Market 24 Book/Page 2780-558 Confirmed With Claude Gardner Legal Description 26 66 29 BIG PINE KEY PT S1/2 OF W1/2 OF NW1/4 OR403-897 OR672-519/520 OR674- 212/13 OR756-1596 OR823-2384 OR829-552/53C OR933-1677 OR1355-1527/28/TR OR2360- 246/47 OR2780-558/59 Site Land Sq. ft. 16,875 Topography Level Frontage Highway Zoning SC Shape Rectangular In Flood Plain? No Utilities Water, sewer Environ. Issues? None Improvements and Financial Data GBA 1,768 PGI NA Rentable Area 1,768 EGI NA No. of Units 2 Expense Ratio NA Year Built 1974 NOI NA Building Condition Average OAR NA c.......................................................................................................................................................................................................................................................................................................................................... I ................ Remarks Mixed use property located on Big Pine Key with a small (1128 sf) of commercial space and an efficiency unit (640 sf) to the rear. Property presented in average condition with good exposure to the passing traffic on the Overseas Hwy. Purchased with cash as an arm's length transaction. Arm's length transaction Appraisers of the Keys Page 57 of 85 File# 13927 Client File # 00058381 68300 Overseas Highway, Layton, FL 33001 c............................................................................................................................................................................................................................................................................................................Transaction......................................................................................................................................................................................................................................................................................................... I Name 101621 Overseas Hwy Date of Sale 05-20-2015 Address 101621 Overseas Hwy Adjusted Sale $599,000 Price City Key Largo Price Per SF $425.43 State Florida Sale Status Closed Seller Ellis Land Investments Sale Conditions Arm's Length Buyer R1101 Investments Rights Conveyed Fee Simple Recording Date Days on Market 8 Book/Page 2742-1386 Confirmed With Jim Signor Legal Description BK 10 LOTS 14, 15, 22 AND 23 LARGO GARDENS P134-38 KEY LARGO OR268-319 OR359-339 OR368-896 OR388-293 OR389-962 OR443-226/27 OR646-547 OR754-1830 OR767-217 OR811-1826 OR902-1725 OR1043-1059AFF OR1475-2264R/S OR1679-1308 OR1936-1071 OR2742-1386 Site Land Sq. ft. 22,000 Topography Level Frontage Overseas Hwy Zoning SC Shape Rectangular In Flood Plain? No Utilities All county utilities Environ. Issues? No Improvements and Financial Data GBA 1,408 PGI NA Rentable Area 1,408 EGI NA No. of Units 1 Expense Ratio NA Year Built 1959 NOI NA Building Condition Average OAR NA ................................................. Remarks Single level commercial building located on the Overseas Hwy at mile marker 101. Average condition with newer roof and exterior stucco. Has good exposure to the passing traffic and access to both the Overseas Hwy and a rear road. Comprises of 4 lots. Property was purchased by the neighbor as an arm's length transaction. Purchased with cash. Listed for 8 days. Originally listed on 02/17/2015 for $599,000 and contingent on 02/25/2015. No price revisions Appraisers of the Keys Page 58 of 85 File# 13927 Client File # 00058381 68300 Overseas Highway, Layton, FL 33001 ................................................................... Transaction Name NA Date of Sale 10-12-2016 Address 201 20th St Adjusted Sale $700,000 Price City Marathon Price Per SF $301.72 State Florida Sale Status Closed Seller D & F Seafood Sale Conditions Arms Length Buyer W & M US LLC Rights Conveyed Fee Simple Recording Date 10-26-2016 Days on Market 69 Book/Page 2822-1401 Confirmed With Clara Mayette - 305-395-2095 Legal Description PT OF LTS 7 8 & 9 BLK 1 PARRISH SUB MARATHON SUB SUB OF GOV LT 2 SEC 9 TWP 66S R32E PB2-18 A/K/A FISHERMENS POINTE LOT 1 (.25AC) & 1/25% IN COMMON ELEMENTS OR853- 288/289 OR929-2483/2484 OR936-1611 OR936-1612/1613 OR1032-1293/94/PR OR1479- 1468/69QC OR 1479-1472/73QC OR1666-387/44OREST OR2028-1211 OR2033-527/29 Site Land Sq. ft. 21,184 Topography Level Frontage 20th St Zoning MU-M Shape Rectangular In Flood Plain? Yes Utilities All county utilities Environ. Issues? None Improvements and Financial Data GBA 2,320 PGI NA Rentable Area 2,320 EGI NA No. of Units 2 Expense Ratio NA Year Built 1986 NOI NA Building Condition Average OAR NA c......................................................................................................................................................................................................................................................................................................................................... I Remarks 2 adjoining lots with improvements including a fish house and apartment. There was a separate vacant lot and 2 boat slips at the end of the street. Both lots were purchased together. Originally listed in the local MLS system (MLS 571022) for $590,000 on 05/24/2016 and contingent on 08/01/2016. The vacant lot to the south was listed separately as MLS #571021 for $350,000. Both lots were sold together. Appraisers of the Keys Page 59 of 85 File# 13927 Client File # 00058381 68300 Overseas Highway, Layton, FL 33001 ................................................................... Transaction Name NA Date of Sale 11-30-2017 Address 81167 Overseas Highway Adjusted Sale $600,000 Price City Upper Matecumbe Key Price Per SF $279.07 State Florida Sale Status Closed Seller Suzanne Miller Sale Conditions Arm's length Buyer Unknown Rights Conveyed Fee Simple Recording Date Not recorded Days on Market 566 Book/Page Not recorded Confirmed With Tom McDermott (Realtor) Legal Description 32 63 37 ISLAND OF UPPER MATECUMBE PB1-41 PT LOT 4 G47-154 G41-395 G41-395 OR117- 511/512 OR783-802/803 OR935-78/79 OR935-83AFF OR978-1933/1934 OR987-2180 OR1099-1287/1288 OR2402-2040/42 OR2402-2043/45 OR2402-2046/48 OR2402-2055/57 Site Land Sq. ft. 25,210 Topography Level Frontage Overseas Highway Zoning HC Shape Irregular In Flood Plain? No Utilities All county utilities Environ. Issues? No Improvements and Financial Data GBA 2,150 PGI $34,500 Rentable Area 2,150 EGI $34,500 No. of Units 1 Expense Ratio 20.29% Year Built 1959 NOI $27,500 Building Condition Average OAR 4.58% EGIM 17.390 Remarks Mixed use commercial building in the heart of Islamorada with 3 office space, 1 bed 1 bath apartment, and 5 storage units. Presented in average condition with some updates to the apartments. Income figures provided by the realtor. Expense information estimated. Sold as an arm's length transaction via the local MLS system. Property was market for 566 days due to a tenant agreement. Mixed use commercial unit with 3 office space, 1 bed 1 bath apartment, and 5 storage shed to the rear. Apartment has been updated with a newer kitchen. Motivated seller. Appraisers of the Keys Page 60 of 85 File# 13927 Client File # 00058381 68300 Overseas Highway, Layton, FL 33001 Improved Sale No. 6 ................................................................... Transaction Name NA Date of Sale 08-03-2017 Address 98310 Overseas Highway Adjusted Sale $415,000 Price City Key Largo Price Per SF $283.47 State Florida Sale Status Closed Seller TD Bank NA Sale Conditions Foreclosure Buyer Wire Nuts Electric of South Rights Conveyed Fee Simple Florida Recording Date 08-08-2017 Days on Market 35 Book/Page 2868-111 Confirmed With Deb Bennett (Realtor) Legal Description BK LT 1 CARIBBEAN HEIGHTS PB3-129 KEY LARGO OR556-210 OR787-452 OR1146-525 OR1146-526 OR1412-483 OR1631-1715 OR2223-1769 Site Land Sq. ft. 13,885 Topography Level Frontage Overseas Highway Zoning IS Shape Irregular In Flood Plain? No Utilities All county utilities Environ. Issues? None Improvements and Financial Data GBA 2,293 PGI NA Rentable Area 1,464 EGI NA No. of Units 1 Expense Ratio NA Year Built 1985 NOI NA Building Condition Average OAR Na c......................................................................................................................................................................................................................................................................................................................................... I Remarks Mixed use property with a small office space to the 1st floor and a 3bed 2bath apartment to the upper floors. Purchased by a local contractor who intends to occupy the building. Sold as a foreclosure and purchased with cash. Listed in the local MLS system (576011) as a foreclosure. Originally listed on 06/20/2017 for $484,900 and contingent on 07/25/2017 after price revisions to $459,900. Sold as an REO with a motivated bank seller. Appraisers of the Keys Page 61 of 85 File# 13927 Client File # 00058381 68300 Overseas Highway, Layton, FL 33001 ................................................................... Transaction Name NA Date of Sale 08-29-2016 Address 81611 Old Highway Adjusted Sale $775,000 Price City Upper Matecumbe Key Price Per SF $694.44 State Florida Sale Status Closed Seller Gallery at Morada Bay Sale Conditions Arm's length Buyer Craig & Cheryl Mcbay Rights Conveyed Fee Simple Recording Date 09-07-2016 Days on Market 146 Book/Page 2814-1432 Confirmed With Pierre Bellion (Realtor) Legal Description BK 2 LT 3 MATECUMBE BEACH PB 1-133 UPPER MATECUMBE G55-541-542 OR457-507Q OR784-395-407 OR786-286/298 PROB #79-62-CP-23 OR719-154 OR1020-62 OR1292-1153C OR1292-1154 OR1670-1784T/C OR1954-1517 OR2814-1432/33 Site Land Sq. ft. 9,975 Topography Level Frontage Old Highway Zoning VC Shape Rectangular In Flood Plain? No Utilities All county utilities Environ. Issues? None Improvements and Financial Data GBA 2,160 PGI NA Rentable Area 1,116 EGI NA No. of Units 2 Expense Ratio NA Year Built 1977 NOI NA Building Condition Good OAR NA c......................................................................................................................................................................................................................................................................................................................................... I Remarks 2 story, mixed use building in the heart of Islamorada. Large retail space to the 1st floor and a 2bed lbath apartment to the 2nd floor. Property had been updated over the years and was in good condition. Sold as an arm's length transaction listed in the local MLS system (569650). Originally listed on 01/25/2016 for $890,000 and contingent on 06/19/2016. No price revisions. Appraisers of the Keys Page 62 of 85 File# 13927 Client File # 00058381 68300 Overseas Highway, Layton, FL 33001 Analysis Grid The above sales have been analyzed and compared with the subject property. We have considered adjustments in the areas of: • Property Rights Sold • Financing • Conditions of Sale • Market Trends • Location • Physical Characteristics Comparable Sale Adjustments The subject is a single story, detached, mixed -use commercial building with a residential element. The subject is it the City of Layton in the Middle Keys and is further from the main commercial areas of Marathon and Islamorada. The subject is on the main road running through the Florida Keys and has good exposure to the passing traffic and is neighbored by commercial uses; residential uses are in established neighborhood. The sales used are the most recent and similar when searching the Lower, Middle and Upper Keys. As discussed in the market analysis section of the report there have been very few commercial sales in Monroe County that are directly comparable to the subject. The sold properties in the neighborhood vary in terms of condition, GLA, and type with the lodging and large retail spaces not comparable to the subject. Adjustments have been made based on market analysis and paired sales and have been summarized below: Appraisers of the Keys Page 63 of 85 File# 13927 Client File # 00058381 68300 Overseas Highway, Layton, FL 33001 Sale Adjustments Subject 68300 Overseas Sale # I 22814 Overseas Sale # 2 30046 Overseas Sale # 3 101621 Sale # 4 Sale # 5 81167 Overseas Sale # 6 98310 Overseas Sale # 7 81611 Old Address Highway 9 Y Highway 9 Y Hwy Y Overseas Hwy Y 20120th St Highway 9 Y Highway 9 Y Highway 9 Y City Layton Cudjoe Key Big Pine Key Key Largo Marathon pe Key Largo Matecpmbe Key Matecupmbe Key SF of GBA 2,640 1,820 1,768 1,408 2,320 2,150 2,293 2,160 Units 1 1 2 1 2 1 1 2 Year Constructed 1964 1976 1974 1959 1986 1959 1985 1977 Date of Sale N/A 6/16/2017 1/29/2016 5/20/2015 10/12/2016 11/29/2017 8/3/2017 8/29/2016 Average with Building Condition Deferred Average Average Average Average Average Average Good Maintenance Percent Office 61.50% 38% 64% 100% 52% 75% 36% 52% Land to Building Ratio 7.10 4.44 9.54 15.62 9.13 11.73 6.06 4.62 Land sq ft 18,750 8,084 16,875 22,000 21,184 25,210 13,885 9,975 Parcel Type Interior Interior Interior Interior Corner Interior Corner Corner Construction Quality Average Average Average Average Good Average Average Average Construction Class D -Wood Frame C - Masonry C - Masonry C - Masonry C -Masonry C -Masonry D -Wood Frame C - Masonry Density(Units/Acre) 465.00% 1078% 516% 198% 411% 691% 627% 873% NOI $27,500 Overall Rate N/A N/A N/A N/A N/A 3.79% N/A N/A EGIM N/A N/A N/A N/A N/A 21.01 N/A N/A Sale Price N/A $390,000 $510,000 $599,000 $700,000 $725,000 $415,000 $775,000 Gross Buildin SF 2640 1820 1768 1408 2320 2150 2293 2160 Unadjusted Price/SF $214.29 $288.46 $425.43 $301.72 $337.21 $180.99 $358.80 Time Adjusted Price/SF N/A $214.29 $288.46 $425.43 $301.72 $320.35 $180.99 $358.80 Adjusted Price/SF N/A $203.57 $230.77 $212.71 $211.20 $192.21 $180.99 $215.28 Property Rights 0.00% 0.00% 0.00% 0.00% -5.00% 0.00% 0.00% Property Rights $0.00 $0.00 $0.00 $0.00 -$16.86 $0.00 $0.00 Terms/Financing 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% Terms/Financing $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 Conditions of Sale 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% Conditions of Sale $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 Time/Market Conditions 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% Time/Market Conditions $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 Time Adjusted Price/SF $214.29 $288.46 $425.43 $301.72 $320.35 $180.99 $358.80 Location 0.00% 0.00% 0.00% 0.00% -5.00% 0.00% -5.00% Location $0.00 $0.00 $0.00 $0.00 -$16.02 $0.00 -$17.94 View 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% View $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 Gross Building Area -20.00% -20.00% -30.00% 0.00% 0.00% 0.00% 0.00% Gross Building Area -$42.86 -$57.69 -$127.63 $0.00 $0.00 $0.00 $0.00 Site/Land to Building Ratio 15.00% 0.00% -25.00% 0.00% -35.00% 0.00% 15.00% Site/Land to Building Ratio $32.14 $0.00 -$106.36 $0.00 -$112.12 $0.00 $53.82 Building Condition 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% -50.00% Building Condition $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 -$179.40 Residential Use 0.00% 0.00% 5.00% 0.00% 0.00% 0.00% 0.00% Residential Use $0.00 $0.00 $21.27 $0.00 $0.00 $0.00 $0.00 Other 0.00% 0.00% 0.00% -30.00% 0.00% 0.00% 0.00% Other $0.00 $0.00 $0.00 -$90.52 $0.00 $0.00 $0.00 Total Adjustments Net % Adjustments -5.0% -20.0% -50.0% -30.0% -43.0% 0.0% -40.0% Net $ Adjustments -$10.72 -$57.69 -$212.72 -$90.52 -$145.00 $0.00 -$143.52 Total % Adjustments 35.0% 20.0% 60.0% 30.0% 43.0% 0.0% 70.0% Total$ Adjustments $75.00 $57.69 $255.26 $90.52 $145.00 $0.00 $251.16 Adjusted Price/SF $203.57 $230.77 $212.71 $211.20 $192.21 $180.99 $215.28 Adjusted Price Indications Minimum Adjusted Price/SF $180.99 $200.00/SF MaximumAdjusted Price/SF $230.77 $528,000 Average Adjusted Price/SF $206.68 $530,000 Median Adjusted Price/SF $211.20 Standard Deviation /SF $15.07 Table 10 - Sale adjustment table Comparable Sale Adjustments Time: From the market analysis shown earlier in the report the market has stabilized and all of the sales have closed since the beginning of 2015. No time adjustments are warranted based on the market analysis section of the report. Appraisers of the Keys Page 64 of 85 File# 13927 Client File # 00058381 68300 Overseas Highway, Layton, FL 33001 Location/view: The subject is in the City of Layton, which is a small city to the north of Marathon, and is on the main road running through the Florida Keys and has good exposure to the passing traffic with other similar commercial uses surrounding the subject. There have been no sales of directly comparable sales in Layton, however, there has been a recent sale of a larger mixed -use property sold that has been used to determine any adjustments. Sales 5 and 7 require location adjustments as they are in the heart of the main commercial centers of the Village of Islamorada considered superior to the subjects' location. The other sales are all located further away from the main commercial centers and have similar population centers and no adjustments are warranted. Although Sale 4 is within the City of Marathon it is set off the main highway. All of the sales except for Sale 4 are on the Overseas Highway and have a similar view and exposure to the passing traffic as the subject. Gross Building Area: The subject comprises of 2,640 square feet of usable building space and is divided in to a mix of office, storage, and residential space. Sales 4, 5, 6, and 7 all have similar GBA to the subject and no adjustments are warranted. Sales 1, 2, and 3 are smaller properties and a negative adjustment is warranted. The adjustment has been based on diminishing returns with typically smaller units selling for a higher price per square foot than larger units and vice versa. Land to Building Ratio: The Highest and best use of the property is to combine the 2 contiguous lots into one parcel. As previously discussed there is limited demand for small commercial lots and the vacant lot to the north could be used with the improvements for additional parking or storage space. The land to building ratio used has been determined including the 2 lots. Sales 2, 4, and 6 have similar land to building ratio and no adjustment is warranted. Sales 1 and 7 are inferior in land to building ratio requiring a positive adjustment with Sales 3 and 5 having a larger land to building ratio. The land to building ratio is a driving factor in the market as there is a lack of vacant commercial land that can be developed or used as storage. Purchasers, especially those in the construction, auto -repair, or marine repair industries, are looking for improvements with surplus land. Condition: The subjects overall condition is average with significant deferred maintenance as previously discussed and is dealt with later in the report. The damage to the unit is curable functional obsolescence. Sales 1, 2, 3, 4, 5, and 6 are all in average condition while Sale 7 has been fully renovated superior to the subject. Type: The subject is a detached, mixed -use commercial building with a single residential unit to the rear. All of the sales except Sale 3 have a residential element and all have a single unit. There have been other sales with multiple residential units that have not been used as these are investor driven due to the potential income streams. The 7 sales used were all purchased by an owner occupier who either uses the residential space for themselves or for employees. Sale 3 has been added as it has a similar use as a storage space with office. Other: The subject is a canal front lot with limited dockage to the rear. There have been very few sales of commercial units like the subject on canals. There is no market data to support adjustments for the benefit or detriment to having the canal. This is not a driving factor in the purchase of commercial properties unless there is significant waterfrontage or dockage. Sale 4 has 2 assigned commercial boat slips in an adjoining marina and was these were the driving factor behind the purchase requiring an adjustment. Appraisers of the Keys Page 65 of 85 File# 13927 Client File # 00058381 68300 Overseas Highway, Layton, FL 33001 Reconciliation: Sale 1 is a recent sale of a commercial property in the Lower Keys. This is a slightly smaller property with smaller residential unit to the rear. This sold outside of the local MLS system to the prior tenant as an arm's length transaction. This had covered parking and storage to the 1" floor. This is given emphasis as it is a mixed -use property that would appeal to an owner occupier. This has been added as it is a recent sale having closed in the last 6 months and is in a similar location away from the main commercial centers. Sale 2 is a mixed -use commercial building with a small residential space to the rear with office/retail space to the front. This is an older sale having closed in early 2016 and has a similar exposure and location to the subject. This was sold as an arm's length transaction via the local MLS system. This is given some emphasis as it is on a similar lot with a similar land to building ratio. Sale 3 is a commercial building with office space and no residential element located on the Overseas Highway in the Upper Keys. This has been added as it has similar storage elements but is a smaller unit but on a large lot. This is given less emphasis and is also one of the older sales having closed in the middle of 2015. Sale 4 is a mixed -use commercial building with boat dockage in an adjoining marina. The property is in Marathon, the next city to the south, and comprises of a storage area, office, and residential use. This property is set back off the main highway and has superior boating as it has 2 slips in a commercial marina with deep boating depth. This is given some emphasis as it is a similar mixed -use property with a similar GBA and land to building ratio. This sold just over 12 months ago. Sale 5 is the most recent sale having closed in between the effective date and the report date. The property is in the heart of the main commercial center of Islamorada superior to the subject. This is a mixed -use property with 3 offices, a residential unit, and storage areas to the rear. This is in average condition and has a similar GBA as the subject. This has a slightly superior land to building ratio. This is given the most emphasis as it is the most recent sale and further supports the lack of time adjustments and shows that the market has not been adversely affected by the recent storm. The subject did sell below the typical sale to list ratio due to motivation of the seller for personal reasons. Sale 6 is a recent sale of a mixed -use property on the Overseas Highway which comprises of a small office unit to the 1" floor and a larger residential unit to the upper floors. This is set on the Overseas Highway and has good exposure to the passing traffic. This was sold as a foreclosure and sets the bottom of the market. This is given less emphasis as it was a foreclosure. Sale 7 is a sale of a mixed -use commercial unit with a retail space to the 111 floor and a large residential unit to the 2"d floor. This is close to Sale 5 and is within the heart of the main commercial centers of Islamorada superior to the subject. This unit has been updated to both the residential and commercial spaces and is superior to the subject. This sold just over 12 months ago and is given some emphasis. The comparable properties used form a range of values of unadjusted values from $180.99 to $425.43 with an average of $292.68, median of $288.46 and a standard deviation of $76.44. The wide range of values is due to the differences in location, land to building ratio, and GBA. After adjustments, based on paired sales and market data, detailed above, the adjusted range of values is tightened to $167.45 to $230.77 per square foot; with the average of $203.14, a median of $211.20 and a standard deviation of $20.11. Appraisers of the Keys Page 66 of 85 File# 13927 Client File # 00058381 68300 Overseas Highway, Layton, FL 33001 Minimum Adjusted Price/SF $180.99 $200.00/SF MaximumAdjusted Price/SF $230.77 $528,000 Average Adjusted Price/SF $206.68 $530,000 Median Adjusted Price / SF $211.20 Standard Deviation/ SF $15.07 Subject Site 2,640 Gross Building Ai Indicated Unit Value $200.00 per SF Indicated Value $528,000 Rounded $530,000 Table 11— Sales Comparison Approach Value Indicators. The 7 closed sales are the most similar and recent sales of similar commercial buildings in the Lower, Middle and Upper Keys with Sales 1, 5, and 6 being the most recent sales. Most weight and emphasis is given to Sales 1 and 5 as they are the most recent sale having closed in the last 6 months and both have office, storage, and residential units and would appeal to the same purchasers. Some weight and emphasis is given to Sales 2 and 7 as they are similar mixed -use commercial unit but sold over 12 months ago. Less weight and emphasis is given to the other sales as they are not as similar to the subject as the other sales. Sale 3 has been added as it is a similar commercial building with storage and office but no residential units. Sale 4 has been added as it has water access but is superior to the subject as it has access to 2 commercial boat slips with deep dockage. Sale 6 is given less emphasis although it is a recent sale as is was a foreclosure sale. The sales used are the most recent and similar as compared to the subject and have been confirmed by a party to the transaction. The sales used require net and gross adjustments mainly due to condition, location, and GBA adjustments. The data is reliable, and the sales used are the most recent and similar sales when searching the Lower, Middle and Upper Keys. After adjustments that have been based on paired sale and market and statistical analysis most emphasis is given to Sales 1 and 5. It is the appraiser's opinion that the subject would fall within the middle of the range of these values supporting an opinion of value of $200.00 per square foot. The subject's opinion of value is towards the lower end of the unadjusted values on a price per square foot basis mainly due to its location being further away from the main commercial areas. Therefore, taking the $200.00 per square foot and multiplying this by the Gross Building Area (GBA) of 2,640 sq. ft., indicates a market value of $528,000 or $530,000 rounded. The subject has deferred maintenance which is considered curable. The damage was as a result of the recent storm and included both flood and wind damage. From discussions with local contractors the cost to repair the damage is estimated at $75,000 and this has been deducted from the figure above to calculate the AS IS market value. $530,000 minus $75,000 = $455,000 Therefore, the AS IS of market value via the Sales Comparison Approach is: AS IS Market Value as of November 21st, 2017 is: $455,000 (Four Hundred and Fifty -Five Thousand Dollars) Appraisers of the Keys Page 67 of 85 File# 13927 Client File # 00058381 68300 Overseas Highway, Layton, FL 33001 Income Approach to Value Income Approach Capitalization Premise Capitalization in Real Estate terminology is the process by which an income projection is converted into an indication of value. The element that transforms the income projection is a rate that reflects the return necessary to attract investment capital. The process of Income Capitalization generally reflects the principle of anticipation. Thought of as the present worth of an anticipated future benefit, anticipation follows a pattern similar to investor thinking and motivation. Income producing real estate is typically purchased as an investment, and from an investor's point of view, earning power is the critical element affecting property value. One investment premise holds that the higher the earnings, the higher the value, provided the amount of risk remains constant. An investor who purchases income producing real estate is essentially trading present dollars for the expectation of receiving future dollars. The Income Capitalization Approach to value consists of methods, techniques, and mathematical procedures that an appraiser uses to analyze a property's capacity to generate benefits and convert these benefits into an indication of value. The capitalization process must reflect the possibility that actual future income, expenses, and property may differ from those originally anticipated by an investor on the date of the appraisal. The more uncertainty there is concerning the future levels of these variables, the riskier the investment. Investors expect to earn a higher rate of return on investments that are riskier. This should be reflected in the support for the discount rate and capitalization rate obtained from market research. Direct Capitalization and Yield Capitalization are two generally accepted capitalization methods. Direct Capitalization is widely used when properties are already operating on a stabilized basis and there is an ample supply of comparable sales with similar risk levels, incomes, expenses, physical and location characteristics, and future expectations. This methodology may be less useful for properties going through an initial lease -up or when income and expenses are expected to change in an irregular pattern over time. Comparables with similar future expectations may not be available in these cases and one of the Yield Capitalization techniques may be more appropriate. The advantages of Direct Capitalization are that it is simple to use, easy to explain, often expresses market thinking, and provides strong market evidence of value when adequate sales are available. Direct Capitalization is distinct from Yield Capitalization in that the former does not directly consider the individual cash flows beyond the first year. Although Yield Capitalization explicitly calculates year -by -year effects of potential changing income patterns, changes on the original investment's value, and other considerations, Direct Capitalization processes a single year's income into an indication of value. Either Direct Capitalization or Yield Capitalization may correctly produce a supportable indication of value when based on relevant market information derived from comparable properties, which should have similar income -expense ratios, land value to building value ratios, risk characteristics, and future expectations of income and value changes over a typical holding period. A choice of capitalization method does not produce a different indication of value under this circumstance. The Direct Capitalization technique projects the net operation income attributable to the real estate and associated personally, which is the remaining income after subtracting vacancy losses and operating expenses from the potential gross income. Next, a capitalization rate is selected, which is used to capitalize the net operating income by the rate selected. The potential gross income is the total income attributable to real property at full occupancy before operating expenses and vacancy and collection losses are deducted. The effective gross income is the anticipated income from all operations of the real property, adjusted for vacancy and collection losses. This adjustment covers losses incurred due to unoccupied space, turnover, and non-payment of rent by tenants. The net operating income is the actual or anticipated net income remaining after all operating expenses are deducted from the effective gross income. Net operating income is expressed as an annual amount. In certain income applications, a single year's net operating income may represent a steady stream of fixed income that is expected to continue for a number of Appraisers of the Keys Page 68 of 85 File# 13927 Client File # 00058381 68300 Overseas Highway, Layton, FL 33001 years. Operating expenses are the periodic expenditures necessary to maintain the real property and continued production of the effective gross income, assuming prudent and competent management. Operating expense statements that conform to this definition are used for appraisal purposes. A reconstructed operating statement may differ from statements prepared for an owner because they often include non -cash expenses such as depreciation or interest expenses. Income rates express the relationship between one year's income and the corresponding capital value of the property. An overall capitalization rate is an income rate for a total property that reflects the relationship between a single year's net operating income into an indication of overall property value or price. It is used to convert net operating income into an indication of overall property value. An overall capitalization rate is not a rate of return on capital or a full measure of investment performance. It may be more than, less than, or equal to the expected yield on the capital invested, depending on the projected income or value changes. Whether estimating an income or yield rate, the conversion of income into property should represent the annual rate of return the market indicates is necessary to attract investment capital. This rate is influenced by factors such as: • The degree of risk • Market expectations • Prospective rates of return for alternative investments • Rates of return earned by comparable properties in the past • Availability of debt financing • Prevailing tax law Generally, the higher overall capitalization rates are associated with less desirable properties and the lower overall capitalization rates with more attractive properties. The suitability of a particular rate of return, which is the full recovery of the amount invested and a reward for the assumed risk, cannot be proven with market evidence, but the rate estimated should be consistent with the data available. Rate estimation requires appraisal judgment and knowledge of prevailing market attitudes and economic indicators. Typically, investors expect to receive a return on capital that represents the time value of money, with an appropriate adjustment for perceived risk. The minimum rate of return for invested capital is sometimes referred to as the safe rate, or the rate on insured savings accounts or securities. Theoretically, the difference between the total rate of return on capital and the safe rate may be considered a premium to compensate the investor for risk. (Source: The Appraisal of Real Estate- Thirteenth Edition, The Appraisal Institute, 2008) The subject is a small office building with the typical buyer and occupier being an owner occupier. These single unit properties are not investor driven. The typical investor is purchasing properties with multiple units to maximize the income stream. There is inadequate data to determine capitalization rates for these owner -occupied units and this approach has not been developed. It would not give a reliable indication of value and is not utilized by the owner occupier. Appraisers of the Keys Page 69 of 85 File# 13927 Client File # 00058381 68300 Overseas Highway, Layton, FL 33001 Final Reconciliation: The previous sections of the report considered the three approaches to value. The analysis of all pertinent facts and data considered to influence the value of the subject property has led to the following value opinions: The nature of reconciliation depends on the appraisal problem specific to the subject property, the approaches that have been used, and the reliability and adequacy of the data used. The inapplicability of the Cost Approach to value constitutes the Sales Analysis Approach and the Income Approach to value as the most reliable indications of value for the subject property. The Sales Analysis Approach to value in this appraisal has been developed and is reliable. There have been several sales of mixed -use commercial buildings in the last 3 years that are comparable to the subject. The sales that have occurred are the most similar in terms of Gross Building Area and condition. The Sales Analysis Approach is typically a good indicator of value as it takes account the relationship between a buyer and seller and is typically the main approach to value relied upon by owner occupiers and is given the most emphasis. The Income Approach has not been developed as this is not a reliable indicator of value when appraising these smaller buildings. The typical buyer would be an owner occupier who is not looking for a return on income. The property is set up for a single occupier and has no significant common areas. There have been several recent leases of commercial and residential units in the market to show that there is demand, however these units have been in multi-tenant/unit properties or in the larger plazas. This approach was therefore not developed as these unit do not appeal to investors. The Cost Approach is not reliable due to the difficulty in estimating depreciation. Although there have been commercial land sales in the neighborhood over the past 36 months, most purchasers base their decisions on economic factors, including projected net income and return on investment. These older properties, as they grow older and deteriorate, making quantifying the loss in value difficult therefore this approach is less reliable. Value by all Approaches To estimate the market value of the subject property, the data pertaining to the property has been analyzed by the Cost, Sales Comparison, and Income Approaches. The value estimates indicated by the 3 approaches are as follows: Cost Approach Not Developed Sales Comparison Approach $455,000 Income Capitalization Approach Not Developed Value Conclusion: The typical purchaser would be a local owner occupier with the Sales Comparison Approach given most emphasis as it is a good indicator of value and is the most reliable approach to value. The Income Approach has not been developed as the typical purchaser would not be an investor due to the lack of potential income streams. An owner occupier would not consider the Income Approach to value when making purchasing decisions. This is not a reliable indicator of value. Most weight and emphasis is therefore given to the Sales Comparison Approach when to determine an estimate of value. Therefore, in recognition of the purpose of this appraisal, and the type of property appraised our value opinions are as follows: Current AS IS Market Value of the Fee Simple Interest, as of November 21st, 2017 is: $455,000 (Four Hundred and Fifty -Five Thousand Dollars) Appraisers of the Keys Page 70 of 85 File# 13927 Client File # 00058381 68300 Overseas Highway, Layton, FL 33001 Opinion of Marketing Time Reasonable marketing time is: an opinion of the amount of time it might take to sell a real or personal property interest at the concluded market value level during the period immediately after the effective date of an appraisal. Marketing time differs from exposure time, which is always presumed to precede the effective date of an appraisal. Source: Uniform Standards of Professional Appraisal Practice (USPAP), 2016-2017 6 - 9 months is an estimated marketing time. 6 - 9 months is an estimated exposure time. The subject has been listed for over 18 months mainly due to the high list price. Appraisers of the Keys Page 71 of 85 File# 13927 Client File # 00058381 68300 Overseas Highway, Layton, FL 33001 Privacy Policy Notice Title V of the Gramm -Leach -Bliley Act (GLBA) generally prohibits any financial institution, directly or through its affiliates, from sharing any nonpublic personal information about you with a nonaffiliated party unless the institution provides you with a notice of its privacy policies and practices, such as the type of information that it collects about you and the categories of persons or entities to whom it may be disclosed. In compliance with the GLBA, we are providing you with this document, which notifies you of the privacy policies and practices of Appraisers of the Keys, Inc. We may collect nonpublic personal information about you from the following sources: Information, such as your social security number, that we receive from you, your lender, or others involved in your transaction, such as the real estate agent, on applications or other forms; Information about your transactions with us, our affiliates, or others, such as your loan account balances, payment history, parties to transactions, transaction expenses and your home's appraised value; Information we receive from a consumer -reporting agency, such as your creditworthiness and credit history; Unless it is specifically stated otherwise in an amended Privacy Policy Notice, no additional nonpublic personal information will be collected about you. We may disclose any of the above information that we collect about our customers or former customers to our affiliates or to nonaffiliated third parties as permitted by law. 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Appraisers of the Keys Page 72 of 85 File# 13927 Client File # 00058381 68300 Overseas Highway, Layton, FL 33001 Certification Statement • We certify that, to the best of our 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 our personal, impartial, and unbiased professional analyses, opinions and conclusions. • We 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. • We have no bias with respect to the property that is the subject of this report, or to the parties involved with this assignment. • Our engagement in this assignment was not contingent upon developing or reporting predetermined results. • Our 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 estimate, the attainment of a stipulated result, or the occurrence of a subsequent event directly related to the intended use of this appraisal. • Our analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the Uniform Standards of Professional Appraisal Practice (USPAP). • No one provided significant real property appraisal assistance to the person(s) signing this certification. • We certify sufficient competence to appraise this property through education and experience, in addition to the internal resources of the appraisal firm. • Kevin Talbott SRA: I have performed no prior services, or in any other capacity regarding the property that is the subject of this report within the three-year period immediately preceding acceptance of this assignment. • Nicholas Farrar, MRICS: I have performed no prior services, or in any other capacity regarding the property that is the subject of this report within the three-year period immediately preceding acceptance of this assignment. • The appraiser certifies and agrees that this appraisal report was prepared in accordance with the requirements of Title XI of the Financial Institutions, Reform, Recovery, and Enforcement Act (FIRREA) of 1989, as amended (12 U.S.C. 3331 et seq.), and any applicable implementing regulations in effect at the time the appraiser signs the appraisal certification. • The reported analyses, opinions and conclusions were developed, and this report has been prepared, in conformity with the requirements of the Code of Professional Ethics and Standards of Professional Appraisal Practice of the Appraisal Institute." • "As of the date of this report, I Kevin Talbott have completed the continuing education program for Designated members of the Appraisal Institute." Appraisers of the Keys Page 73 of 85 File# 13927 Client File # 00058381 68300 Overseas Highway, Layton, FL 33001 • As of the date of this report, I Nicholas Farrar have completed the Standards and Ethics Education Requirements for Candidates of the Appraisal Institute. • Kevin Talbott, SRA, Cert Gen RZ2139 inspected the property and reviewed the report. • Nicholas Farrar, MRICS, CertGen, RZ3742 inspected the exterior of the property, inspected the comparable properties from the exterior, collected data and narrated the report. Kevin Talbott, SRA CertGen RZ2139 Nicholas Farrar, MRICS CertGen RZ3742 Appraisers of the Keys Page 74 of 85 File# 13927 Client File # 00058381 68300 Overseas Highway, Layton, FL 33001 ADDENDUM Appraisers of the Keys Page 75 of 85 File# 13927 Client File # 00058381 68300 Overseas Highway, Layton, FL 33001 Appraiser Licenses. Appraisers of the Keys Page 76 of 85 File# 13927 Client File # 00058381 68300 Overseas Highway, Layton, FL 33001 Engagement letter / Purchase Order: IVIONROrf COUNTY PURCHASE ORDER NO. BOARD OF COUNTY COMMISSIONERS 110 D Simunfun Sfi L,.ot: Suite 2-2 13 PT..GF NO. I Key 'A(95r,, FL, 3U40 PDF COPY SAL.'-:,S TAX EXEM:,T NO: 8G-20'3 5294C-7 F —1 v H E r7T.,-R7F.-T-. V77.-, TF(: I I 120 2 I.AOR 102-1 `:,-1 2'-%#L RM 2 - 2 LL h N 4rrT,ATSER-q OF 7-17 F7YS . P KEY WE,'T, M 3:11:4Q 32-58 FLALER AVE 7 R 2334C, OL —1 OPDER DA 7E - 3 1; 0 - ?: I -, I BUER: 7.n.rTV-,, SIMMTT AG �-O-: t0C5246,1 I R=-Q- D.1.7E. I 7E-MG I= ',:j DAY.,,' DESC. 17EM9 �LAN71T-' I ucm DESr-R ?710K I J NIT PRICS rzx-E�4Sio`4 C-0 kPT,1RA7077-J) RRPOR7 7�7 6a300 OVRr,.:N-R 9W 2 4 13, C,, -)CC 21 0 fl� ZIA1,1UN 17-0.0ft COST=4TER ACCOUNT FFCJ-=C7 PROJECTACC7 r,?.qOJN- PAGE TLf-A- $ 2. 4y C- j0 !)-- ::1 A!Y: - C 2. -1:'�:'-.'!)U TOTAL $ 2. 40 C' -- Hojl� INVOICE NO. PAYMENT PAYMENTAPPROVAL Appraisers of the Keys Page 77 of 85 I'PAL I'A.W LN I FIN.AL PAYMENT INVOICEPAIOUN- P JrCl 1ASING AG :KT File# 13927 Client File # 00058381 i 68300 Overseas Highway, Layton, FL 33001 Warranty Deed - Improvements. *ikMAWR MM MWCOMMAT.)v rhW lu-uv,rrr Prepwmr bw VARLL L- ZJ*M' -ORAL, UMF Ti TLE MOFUXAtPh• V J. Eag 31P .LaLM*JARIA, Ell, 3JD3-3 ?UM 1,0D. : 2C-10'5 rr p.n Ap"— P.-!A 0',l 6 , Ijmnt,"I *;;i 01., � M00101 M9TY OFFUIRL MC01tas F I LE 11, 0 & 4 1 Fz Bw 0 1, 5 0 7 Put I S 4 6 MCD kpr 17 1996 J6,16KIR tAMMV L KGLffitroff, CL-IRY, DIED DOC 9TAMl A 3 3 1 . Efl -V Iol VM$9: Ell CLK Thl's ww"'To Dged ~.44 kn4 ip i-S by M:3t OF 1CM =, VC- TaVPOMiZM Miltifq of FLEMMA 82L 'ff qUM MIMT,, C= RMEMMUN VL 33-1511 ilumlc -moVERT-NE, rn"., 4 p"V""g meljok�qjvm P- VokV P,0, MPY 039. mr, FT, ylopT k-Mwfi- -Afed Zt-No Ar, ., WituessErdl. MW r1w m(d AMW )IV yard 04 "W"', j roL, xv" ,, 1, dqier UWY*, VAIUMfIWAY. 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F' I,n l's:aifi iIF4ti,N Y MB%= ' ;�+au�:avniw:an ct�ia� MLJMHIIw r;itllr=IT" aIRFIL.#-1L ,rf.pnprs Appraisers of the Keys Page 79 of 85 File# 13927 Client File # 00058381 68300 Overseas Highway, Layton, FL 33001 Site Survey. OVERSEAS BcHrAY I 1 !�*o.4od N+iL! � �fi o. s�.i rla� 'Z •'"•rldwsrr urrE '..,� .. .,•-� it 5�7-13-IX+ f l 'ws�le5t t w�,s Q�� � S 5G-�5-uP b' - S.F EOGf NIGxwNY FHVFM � �f4o.. 4ad aD'xE Farx r DelvEx'Nr w°°°i ;a.+cedrY ,eec IoL+b.lcGrds tl ¢� • x sNLM u a-rsaa r crwcAax iEC. k GBS .« - @r±' 1 rao• NER c Otl Na[.E 4A SO Pa REE. ju'a,•t S%PREEC 50% r �yt�I}f, Wa 4f'MFi rC PFYEHENP �I ° a .'.rE� .. '416 LOT 24 LOT 26 4 Sty "GA(K dY@ifq MAM 2Q 3 1$ W& 8Lc 153 &e�K3 cPx[.❑ara.nae_. o h m Aoomeu L T 36 LO M 'pn 4 FvcH&._ n psi ° Z+ LOT 27 BLOCK T s ` ess 1 8 d.OT JO 7`�1r (wacsuf){{hFt $ ry ti W YZ�Fd�9 8€ )BLOCK Asa� .' t Pi�vrFE ry F@'PM,tJL h uuE �L '{R•� • 21,.rP' Char�tp` L•5a' �` WrfJ�55 LauE 1 . 'r� � �� i+t ���` "f � ._ -Sa.PC N 5G-r'�AP E 51IZ uNE iQ0• � �. � s,� t ��, c �p a •-s9,,,�. *�, „;, 1 'r=• °cp af$t Spat �iy+ yam WOW DGEK a 'fir°A"���`s �r s�,�'n'�• ar �s � � �a'CANAL Wv�i)�s'y�r Appraisers of the Keys Page 80 of 85 File# 13927 Client File # 00058381 68300 Overseas Highway, Layton, FL 33001 Glossary: This glossary contains the definitions of common words and phrases, used throughout the appraisal industry, as applied within this document. Please refer to the publications listed in the Works Cited section below for more information. Works Cited: ■ Appraisal Institute. The Appraisal of Real Estate. 13th ed. Chicago: Appraisal Institute, 2008. Print. ■ Appraisal Institute. The Dictionary of Real Estate Appraisal. 5th ed. 2010. Print. Band of Investment A technique in which the capitalization rates attributable to components of a capital investment are weighted and combined to derive a weighted - average rate attributable to the total investment. (Dictionary, 5th Edition) Common Area 1. The total area within a property that is not designed for sale or rental but is available for common use by all owners, tenants, or their invitees, e.g., parking and its appurtenances, malls, sidewalks, landscaped areas, recreation areas, public toilets, truck and service facilities. 2. In a shopping center, the walkways and areas onto which the stores face and which conduct the flow of customer traffic. (ICSC) (Dictionary, 5th Edition) Common Area Maintenance (CAM) 1. The expense of operating and maintaining common areas; may or may not include management charges and usually does not include capital expenditures on tenant improvements or other improvements to the property. • CAM can be a line -item expense for a group of items that can include maintenance of the parking lot and landscaped areas and sometimes the exterior walls of the buildings. • CAM can refer to all operating expenses. • CAM can refer to the reimbursement by the tenant to the landlord for all expenses reimbursable under the lease. Sometimes reimbursements have what is called an administrative load. An example would be a 15% addition to total operating expenses, which are then prorated among tenants. The administrative load, also called an administrative and marketing fee, can be a substitute for or an addition to a management fee. 2. The amount of money charged to tenants for their shares of maintaining a center's common area. The charge that a tenant pays for shared services and facilities such as electricity, security, and maintenance of parking lots. The area maintained in common by all tenants, such as parking lots and common passages. The area is often defined in the lease and may or may not include all physical area to be paid for by all tenants. Items charged to common area maintenance may include cleaning services, parking lot sweeping and maintenances, snow removal, security, and upkeep. (ICSC) (Dictionary, 5th Edition) Debt Coverage Ratio (DCR) The ratio of net operating income to annual debt service (DCR = NOI/Im), which measures the relative ability of a property to meet its debt service out of net operating income; also called debt service coverage ratio (DSCR). A larger DCR indicates a greater ability for a property to withstand a downturn in revenue, providing an improved safety margin for a lender. (Dictionary, 5th Edition) Discount Rate A yield rate used to convert future payments or receipts into present value; usually considered to be a synonym for yield rate. (Dictionary, 5th Edition) Effective Age The age of property that is based on the amount of observed deterioration and obsolescence it has sustained, which may be different from its chronological age. (Dictionary, 5th Edition) Effective Date 1. The date on which the analyses, opinion, and advice in an appraisal, review, or consulting service apply. Appraisers of the Keys Page 81 of 85 File# 13927 Client File # 00058381 68300 Overseas Highway, Layton, FL 33001 2. In a lease document, the date upon which the lease goes into effect. (Dictionary, 5th Edition) Exposure Time 1. The time a property remains on the market. 2. 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 on an analysis of past events assuming a competitive and open market. (Dictionary, 5th Edition) External Obsolescence An element of depreciation; a diminution in value caused by negative externalities and generally incurable on the part of the owner, landlord, tenant. (Dictionary, 5th Edition) Extraordinary Assumption An assumption, directly related to a specific assignment, which, if found to be false, could alter the appraiser's opinions or conclusions. Extraordinary assumptions presume as fact otherwise uncertain information about physical, legal, or economic characteristics of the subject property; or about conditions external to the property such as market conditions or trends; or about the integrity of data used in an analysis. (USPAP, 2010-2011 ed.) (Dictionary, 5th Edition) Fee Simple Estate Absolute ownership unencumbered by any other interest or estate, subject only to the limitations imposed by the governmental powers of taxation, eminent domain, police power, and escheat. (Dictionary, 5th Edition) Functional Obsolescence The impairment of functional capacity of a property according to market tastes and standards. (Dictionary, 5th Edition) Functional Utility The ability of a property or building to be useful and o perform the function for which it is intended according to current market tastes and standards; the efficiency of a building's use in terms of architectural style, design and layout, traffic patterns, and the size and type of rooms. (The Appraisal of Real Estate, 13th Edition) Gross Building Area (GBA) Total floor area of a building, excluding unenclosed areas, measured from the exterior of the walls of the above -grade area. This includes mezzanines and basements if and when typically included in the region. (Dictionary, 5th Edition) Gross Leasable Area (GLA) Total floor area designed for the occupancy and exclusive use of tenants, including basements and mezzanines; measured from the center of joint partitioning to the outside wall surfaces. (Dictionary, 5th Edition) Highest & Best Use The reasonably probable and legal use of vacant land or an improved property that is physically possible, appropriately supported, financially feasible, and that results in the highest value. The four criteria the highest and best use must meet are legal permissibility, physical possibility, financial feasibility, and maximum productivity. Alternatively, the probable use of land or improved property —specific with respect to the user and timing of the use —that is adequately supported and results in the highest present value. (Dictionary, 5th Edition) Highest and Best Use of Land or a Site as Though Vacant Among all reasonable, alternative uses, the use that yields the highest present land value, after payments are made for labor, capital, and coordination. The use of a property based on the assumption that the parcel of land is vacant or can be made vacant by demolishing any improvements. (Dictionary, 5th Edition) Highest and Best Use of Property as Improved The use that should be made of a property as it exists. An existing improvement should be renovated or retained as is so long as it continues to contribute to the total market value of the property, or until the return from a new improvement would more than offset the cost of demolishing the existing building and constructing a new one. (Dictionary, 5th Edition) Hypothetical Condition That which is contrary to what exists but is supposed for the purpose of analysis. Hypothetical conditions assume conditions contrary to known facts about physical, legal, or economic characteristics of the subject property; or about conditions external to the property, such as market conditions or trends; or Appraisers of the Keys Page 82 of 85 File# 13927 Client File # 00058381 68300 Overseas Highway, Layton, FL 33001 about the integrity of data used in an analysis (Dictionary, 5th Edition) Leased Fee Interest A freehold (ownership interest) where the possessory interest has been granted to another party by creation of a contractual landlord -tenant relationship (i.e., a lease). (Dictionary, 5th Edition) Market Area The area associated with a subject property that contains its direct competition. (Dictionary, 5th Edition) Market Rent The most probably rent that a property should bring is 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 (Tls). (Dictionary, 5th Edition) Market Value The major focus of most real property appraisal assignments. Both economic and legal definitions of market value have been developed and refined. 1. The most widely accepted components of market value are incorporated in the following definition: The most probable price that the specified property interest should sell for in a competitive market after a reasonable exposure time, as of a specified date, in cash, or in terms equivalent to cash, under all conditions requisite to a fair sale, with the buyer and seller each acting prudently, knowledgeably, for self-interest, and assuming that neither is under duress. 2. Market value is described in the Uniform Standards of Professional Appraisal Practice (USPAP) as follows: A type of value, stated as an opinion, that presumes the transfer of a property (i.e., a right of ownership or a bundle of such rights), as of a certain date, under specific conditions set forth in the definition of the term identified by the appraiser as applicable in an appraisal. (USPAP, 2010-2011 ed.) USPAP also requires that certain items be included in every appraisal report. Among these items, the following are directly related to the definition of market value: • Identification of the specific property rights to be appraised. • Statement of the effective date of the value opinion. • Specification as to whether cash, terms equivalent to cash, or other precisely described financing terms are assumed as the basis of the appraisal. • If the appraisal is conditioned upon financing or other terms, specification as to whether the financing or terms are at, below, or above market interest rates and/or contain unusual conditions or incentives. The terms of above —or below —market interest rates and/or other special incentives must be clearly set forth; their contribution to, or negative influence on, value must be described and estimated; and the market data supporting the opinion of value must be described and explained. 3. The following definition of market value is used by agencies that regulate federally insured financial institutions in the United States: The most probable price that a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and the 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: • Buyer and seller 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; • Payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and • 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. (12 C.F.R. Part 34.42(g); 55 Federal Register 34696, August 24, 1990, as amended at 57 Federal Register 12202, April 9, 1992; 59 Federal Register 29499, June 7, 1994) 4. The International Valuation Standards Council defines market value for the purpose of international standards as follows: The estimated amount for which a property should exchange on Appraisers of the Keys Page 83 of 85 File# 13927 Client File # 00058381 68300 Overseas Highway, Layton, FL 33001 the date of valuation between a willing buyer and a willing seller in an arm's-length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently, and without compulsion. (International Valuation Standards, 8th ed., 2007) 5. Market value is the amount in cash, or on terms reasonably equivalent to cash, for which in all probability the property would have sold on the effective date of the appraisal, after a reasonable exposure of time on the open competitive market, from a willing and reasonably knowledgeable seller to a willing and reasonably knowledgeable buyer, with neither acting under any compulsion to buy or sell, giving due consideration to all available economic uses of the property at the time of the appraisal. (Uniform Standards for Federal Land Acquisitions) (Dictionary, 5th Edition) Marketing Time An opinion of the amount of time it might take to sell a real or personal property interest at the concluded market value level during the period immediately after the effective date of the appraisal. Marketing time differs from exposure time, which is always presumed to precede the effective date of an appraisal. (Advisory Opinion 7 of the Standards Board of The Appraisal Foundation and Statement on Appraisal Standards No. 6, "Reasonable Exposure Time in Real Property and Personal Property Market Value Opinions" address the determination of reasonable exposure and marketing time). (Dictionary, 5th Edition) Net Operating Income (NOI) The actual or anticipated net income that remains after all operating expenses are deducted from effective gross income but before mortgage debt Scope of Work The type and extent of research and analyses in an assignment. (Dictionary, 5th Edition) Stabilized Occupancy An expression of the expected occupancy of a property in its particular market considering current and forecasted supply and demand, assuming it is priced at market rent. (Dictionary, 5th Edition) Tenant Improvements (Tls) 1. Fixed improvements to the land or structures installed and paid for use by a lessee. service and book depreciation are deducted. (Dictionary, 5th Edition) Obsolescence One cause of depreciation; an impairment of desirability and usefulness caused by new inventions, changes in design, improved processes for production, or external factors that make a property less desirable and valuable for a continued use; may be either functional or external. (Dictionary, 5th Edition) Parking Ratio A ratio of parking area or parking spaces to an economic or physical unit of comparison. Minimum required parking ratios of various land uses are often stated in zoning ordinances. (Dictionary, 5th Edition) Rentable Area For office buildings, the tenant's pro rata portion of the entire office floor, excluding elements of the building that penetrate through the floor to the areas below. The rentable area of a floor is computed by measuring to the inside finished surface of the dominant portion of the permanent building walls, excluding any major vertical penetrations of the floor. Alternatively, the amount of space on which the rent is based; calculated according to local practice. (Dictionary, 5th Edition) Replacement Cost 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. (Dictionary, 5th Edition) 2. The original installation of finished tenant space in a construction project; subject to periodic change for succeeding tenants. (Dictionary, 5th Edition) Vacancy and Collection Loss A deduction from potential gross income (PGI) made to reflect income reductions due to vacancies, tenant turnover, and non-payment of rent; also called vacancy and credit loss or vacancy and contingency loss. Often vacancy and collection loss is expressed as a percentage of potential gross income and should reflect the competitive market. Its treatment can differ according to the interest being appraised, Appraisers of the Keys Page 84 of 85 File# 13927 Client File # 00058381 68300 Overseas Highway, Layton, FL 33001 property type, capitalization method, and whether the property is at stabilized occupancy. (Dictionary, 5th Edition) Appraisers of the Keys Page 85 of 85 File# 13927 Client File # 00058381