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Item O4
0.4 G BOARD OF COUNTY COMMISSIONERS County of MonroeMayor Sylvia Murphy,District 5 The Florida Keys l'U � � Mayor Pro Tern Danny Kolhage,District 1 �pw° Michelle Coldiron,District 2 Heather Carruthers,District 3 David Rice,District 4 County Commission Meeting September 18, 2019 Agenda Item Number: 0.4 Agenda Item Summary #5985 BULK ITEM: Yes DEPARTMENT: Assistant County Administrator Kevin Wilson TIME APPROXIMATE: STAFF CONTACT: Kevin Wilson (305) 292-4441 No AGENDA ITEM WORDING: Approval of a contract for the purchase of the building at 2945- 2975 Overseas Highway in Marathon for a new office location for the State Attorney and other County offices. ITEM BACKGROUND: The contract is for the purchase of the full building including three (3) separate office units. The proposed purchase price is $1.5 million. The total building area is 5,722 square feet (SF). The average of two appraisals is $1.41 million so approval will require an extraordinary (4/51')vote. F.S. 125.355(1)(b). The contract includes a short term lease back of up to 3 months of one unit to the current occupant at fair market value until he can relocate his office. The contract also includes a requirement that the condominium association that currently controls the units be dissolved and the standard contingencies for inspections and title clearance. The proposed use of the building is to house the State Attorney in one of the former condominium units (2,875 SF). The other units may house the Property Appraiser or Code Compliance but the final placement has not yet been finalized. The County is obligated by law to provide office space for the State Attorney and Public Defender. See, Section 14, Art. V, Florida Const. & F.S. 29.008. The State Attorney currently shares a building with the Public Defender but requires some additional space. The Public Defender also requires additional space and will take over some of the space currently occupied by the State Attorney. The longer term plan is to find an alternate location for the Public Defender since the full building currently housing the Public Defender and State Attorney is larger than the space required for the Public Defender. The current lease is month to month anticipating that the owner will want to redevelop the land for other purposes. PREVIOUS RELEVANT BOCC ACTION: N/A Packet Pg. 2155 0.4 CONTRACT/AGREEMENT CHANGES: No STAFF RECOMMENDATION: Approval DOCUMENTATION: SECOND REVISED Agreement for Sale and Purchase (Executed by CMW Office Building LLC & Wolfe Family Holdings Inc.) 9 10 19 Counter-Offer to Monroe County Location of Proposed purchase 2019-05-31 SJM units A,B,C 2019-05-31 SJM unit A 2019-05-31 SJM units B&C 2019-06-26 AOKW Appraisals FINANCIAL IMPACT: Effective Date: 18 SEP 2019 Expiration Date: N/A Total Dollar Value of Contract: $1,500,000 Total Cost to County: $1,500,000 Current Year Portion: None Budgeted: Source of Funds: Infrastructure Sales Surtax CPI: N/A Indirect Costs: legal &inspection fees Estimated Ongoing Costs Not Included in above dollar amounts: TBD Revenue Producing: No If yes, amount: Grant: N/A County Match: N/A Insurance Required: N/A Additional Details: None N/A REVIEWED BY: Kevin Wilson Completed 09/03/2019 2:06 PM Bob Shillinger Completed 09/03/2019 2:53 PM Bob Shillinger Completed 09/03/2019 3:23 PM Budget and Finance Completed 09/03/2019 3:51 PM Maria Slavik Completed 09/03/2019 4:54 PM Packet Pg. 2156 0.4 Kathy Peters Completed 09/03/2019 5:39 PM Board of County Commissioners Pending 09/18/2019 9:00 AM Packet Pg. 2157 AGREEMENT FOR SALE AND PURCHASE COMMERCIAL PROPERTY U) THIS AGREEMENT is made this day of September 2019, between MONROE COUNTY, FLORIDA, a political subdivision of the State of Florida, as "Purchaser" or "COUNTY", c\o 6 County Administrator, 1100 Simonton Street, Room 2-205, Key West, Florida 33040, and Z: CMW OFFICE BUILDING,LLC, a Florida limited liability company and WOLFE FAMILY 21 HOLDINGS, INC., a Florida for profit corporation, hereafter known collectively as "Seller", cu whose address is 2945-2975 Overseas Highway, Marathon Florida 33050. U. 40- 0 1. In consideration of Ten Dollars ($10.00) in hand, paid by the COUNTY, the receipt 3: of is is hereby acknowledged, the Seller agrees to sell to the COUN,rY and the 06 COUNTY agrees to purchase fro m Seller those certain building and lands upon the terms and conditions hereinafter set forth, and for the purchase price of ONE MILLION FIVE HUNDRED THOUSAND DOLLARS AND No/cExrs ($1,500,000.00) for which lands shall include all tenements, here ditaments and improvements, together with all other rights, easements, appurtenances, and any and all of the Seller's rights in or arising by reason of .2 ownership there to belonging, owned by Seller, situated and lying in the County of 0 Monroe, State of Florida. 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 2945-2975 Overseas Highway Marathon, Florida 33045, and more particularly described as: Lot C., Lot A2., Lot B2.1 Sombrero Subdivision No. 6 as recorded in Plat Book 2, Page 3 of the Public Records of Monroe X County, Florida, ( RE## 00321.661-000000, 00321661-000100, 00321661-000200, and 0 00321661-000300) comprised of approximately 16,000 square feet of land and a building totaling U) approximately 5722 gross square feet 3. If the Seller wishes to proceed with this transaction, the Seller has until September 10,2 0 19, to sign and return this Agreement to the County Administrator at: Mr.Roman Gastesi, County Administrator 0 1100 Simonton Street, Suite 2-205 Key West,Florida 33040 E Execution of this Agreement by Seller shall serve to warranty that CMW OFFICE BUILDING, LLC and WOLFE FAMILY HOLDINGS, INC. are the sole owner of the W property, hold certificates of good standing with the Florida Division of Corporations, Florida Department of State, and hold good and sufficient title to the property subject only to those W matters set forth in Exhibit"A"to this Agreement. z 0 U W (n E Packet Pg. 2158 M 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 e x c e p t a s s t a t e d a b o v e U) 0 5. Seller shall convey a marketable title to the property to COUNTY subject only to the aforementioned, encumbrances, exceptions or qualifications set forth herein. Marketable title 0 to the property shall be conveyed by Seller to the COUNTY by a good and sufficient statutory 21 warranty deed determined according to applicable title standards adopted by authority of the Florida Bar and in accordance with law. LL 40- 0 3: a. The COUNTY shall have thirty (30) days from the date that the latter of both the 06 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 set forth in Exhibit "A" 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 defect(s) 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 0 terminating this Agreement. If the COUNTY terminates this Agreement the COUNTY and the 3: 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 X necessary suits. U) 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 or structure 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 alteration, demolition, preventable loss from negligence, or any other hazard, shall be home by the Seller. In the event any such loss or damage occurs, the COUNTY may refuse, without liability, to accept conveyance of said lands 0 by written notice thereof to Seller within ten (10) days of being notified of such loss or damage, in r- which event this Agreement shall thereupon terminate and the parties shall be released herefrom 0 E (except for those 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 W M right and privilege to enter upon said lands for the inspection and examination of said lands and the > W improvements 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 and improvements. The Z COUNTY'S agreement to pay such costs and expenses shall survive the termination hereof and/or the 0 closing hereunder and the making of any payment hereunder. COUNTY shall make available to W (n Seller upon request, copies of all reports, test results and information derived from the above- 4i described activities. E 2111 ag, u Packet Pg. 2159 U) 0 8. The COUNTY, at its own expense, shall have ninety (90) days from the Effective Date of this Agreement in which to conduct and conclude any and all inspections deemed to be necessary 0 as determined in Buyer's sole discretion, including but not limited to a current Phase I Z: 21 Environmental Site Assessment (ESA) to determine the existence and extent, if any, of any hazardous materials on the property. For the purposes of this Agreement, "hazardous materials" U_ shall mean any hazardous or toxic substance, material or waste of any kind or any other substance 40- which is regulated by any environmental law. In the event the COUNTY, in its sole discretion, 0 determines that a Phase II Environmental Site Assessment (ESA 11) is required, COUNTY shall 06 have an additional sixty (60) days in which to conduct the Phase 11 Assessment. a. If either the Phase I or Phase 11 ESA identifies the presence of hazardous materials on the property, the COUNTY shall, within the sixty (60) day period, notify Seller in writing of such findings and it shall with such notice provide a copy of ESA to Seller. .2 b. The Seller will have the right, but not the obligation to, within sixty (60) days from 0 receipt of such notice at Seller's sole cost and expense, assess and clean-tip 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 X 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 0 U) one another of all further obligations under this Agreement except for those which expressly survive the termination hereof. d. It shall be an absolute condition of the COUNTY'S obligation to close on the purchase that Seller terminate the current condominium known as "Marathon Professional Center" and restore the property to an unencumbered, single real. estate parcel, no longer subject to the Declaration of Condominium filed at Official Record Book 221.5 Page 89, as amended. Proof of termination shall be provided to COUNTY within ten (10) business days E following the expiration of the COUNTY inspection period, or receipt of written notification 0 from the COUNTY that it accepts the property condition, whichever is the earlier to occur. W W e. COUNTY shall provide reasonable notice to Seller when any inspection or > W examination of the Seller's property requires access. Seller agrees to cooperate in providing access that does not unreasonably impair Seller's use of the property during business hours, and Z to make the property available after 5pm and on weekends if necessary to conduct or complete 0 U W examination or inspections. Further, Seller agrees to provide information upon request of County's consultants as to matters of the building history and condition when such information is integral to the evaluation(s) being performed. This does not require Seller to acquire E 31 P Packet Pg. 2160 M information not within the personal knowledge of Seller. f. Seller shall cooperate with COUNTY and covenants that Seller will provide the required disclosure set forth in Florida Statutes Section 286.23 not later than ten (10) days prior U) to closing. Said disclosure shall be made under oath and subject to penalties for perjury as set forth in Section 286.23 (2). 0 Z: 21 9. Closing shall take place on or before January 10, 2020 (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 LL allow for the cure of defect(s) in title or the remediation of environmental conditions on the 0 property, each as above set forth. In the event that the Closing Date is extended to account for 3: 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 co contingencies in this Agreement have been met and both parties agree in writing to an earlier 0 .2 date for closing. 0 10. In consideration whereof, COUNTY agrees that it will purchase all of said lands, improvements and other interests of Seller therein at the closing at the purchase price of $1,500,000.00. 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 federal wire transfer of-funds as directed by the designated Settlement Agent to the real X estate escrow account not less than 24 hours prior to closing. U) 11. The COUNTY shall pay the following expenses associated with the conveyance of the property: deed recording fees, survey fee, the COUNTY's attorney's fees, all costs of conducting its inspections of the property, including the ESA. 12. The Seller shall pay the expenses of documentary stamps to be affixed to the deed, 2 real estate commissions, if any, to Seller's broker only, title examination fee, Owner's Title 0 Policy Insurance premium. Seller shall be responsible for the removal and disposal of all personal property, trash and debris from the property, if any. Full rights of possession and E occupancy of the premises shall pass to the COUNTY as of the date payment is made to the Seller subject only to a potential short- to leaseback to Wolfe Family 'Holdings, Inc., of a portion of the property currently no as Unit "B" comprised of approximately 1786.5 sf of W (n improved office space on terms, rates and conditions to be negotiated, as well reservations > W and exceptions stated in this Agreement. z 0 U W 13. Seller will pay (i) the full amount of assessment liens that are certified, confirmed and M 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 be-fore E 4 111 a Packet Pg. 2161 M closing. 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 September 20, 2019, byemail addressed to the Seller at the U) following address; CMW Office Building, I..I..0 c/o Robert Miller rpmRiLlIer )floridakeyslaw.com and Wolfe Family Holdings, Inc., c/o John Wolfe wol I e6&,,marathonlaw.com -6 Z: delivered also by USPS as soon as practicable thereafter to: E cu U- CMW Office Buildin , LLC and Wolfe Family Holdings,Inc., 40- 9 0 2945-2975 Overseas Highway 3: Marathon, Florida 33050 and shall be effective upon date executed 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. 0 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 Board of County 2 Commissioners by or before the Effective Date. X 17. The following additional provisions ("additional provisions") shall be deemed to be an U) 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 Inspection Period and at its option and at its expense, may p 2 have the property surveyed at COUNTY's expense. The survey will conform to the minimum 0 requirements for ALTA land surveys as developed and adopted by the Florida Board of Land Surveyors of the Florida Department of Professional Regulation. If the survey, certified by a E 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 W Paragraph 5(a) and (b) above. Seller will deliver to COUNTY a copy of the survey if existing > W presently in its possession within ten(10) days of the Effective Date. z 0 b. Within thirty (30) days from the Effective Date, SELLER shall provide COUNTY U W with a title insurance commitment issued by 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 E 5 1 P u Packet Pg. 2162 M insurance policy in the amount of the purchase price, insuring the fee simple title in and tothe property in the COUNTY, subject only to the exceptions set forth in Exhibit"A" and those other 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 an U) expense of the Seller and Seller shall designate the settlement agent and issuer of title insurance. 0 C. Except as otherwise provided herein, the closing of title shall take place on the Z: Closing Date, provided that COUNTY has not elected to cancel this Agreement on or before the 21 expiration of the Inspection Period. The closing of title shall take place at 2755 Overseas Highway Marathon, Monroe County, Florida or at such other place in Monroe County as U- COUNTY and Seller may agree upon not later than seven (7) days prior to the Closing Date. The 0 closing of title shall be accomplished "in escrow", in accordance with the customs and practices 3: 06 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 through such recording, and if no lien or encumbrance or other matter(other than those subject to which COUNTY has agreed to .2 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 0 encumbrance or other matters (other than those subject to which COUNTY has agreed to accept the property) shall be shown, to promptly notify COUNTY and Seller and await her 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 fimds disbursed on the Closing Date. X d. If COUNTY defaults in its performance hereunder, the Seller shall have the right to U) 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. e. Seller agrees, from time to time and at any time, including but not limited to the Closing Date, following a reasonable request therefore by COUNTY or the Title Insurance 2 Company, to execute and deliver to COUNTY such her documents and instruments in form 0 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 E 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 W such further documents and instruments in form and substance reasonably satisfactory to Seller or > the Title Insurance Company, or applicable, as may be necessary to confirm and/or effectuate the W obligations of County hereunder and the consummation of the transactions contemplated hereby. a z The provisions of this Article shall survive the closing of title. 0 U W 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 ninety (90) days subsequent to the Effective Date ("Inspection Period"). During such E 61 f, ap c Packet Pg. 2163 C) Inspection Period, COUNTY shall have the right to inspect the property and all aspects thereof to determine ifsame 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 U) 0 cancel this Agreement to Seller and Escrow Agent on or before 5:00 p.m. on the last day of the S M Inspection Period, then, in that event and except as otherwise provided for in this Agreement, 0 COUNTY shall be deemed to have waived the right of cancellation set forth in this paragraph and Z: 21 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 U_ Agreement shall be deemed cancelled and of no further force or effect whatsoever except for 40- those provisions hereof which expressly survive the cancellation or termination hereof. 0 COUNTY's failure or refusal to cancel this Agreement by the expiration of the Inspection Period 06 shall be deemed to her evidence the approval hereof and the sale and purchase provided for herein by the MONROE COUNTY BOARD OF COUNTY COMMISSIONERS. g. 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. Except as expressly provided for herein, no waiver of any rights or obligations hereunder shall be deemed to 0 have occurred unless in writing signed by the parties against who such waiver is asserted and no 3: waiver shall be deemed a waiver of any other or subsequent rights or obligations. h. Words used herein in the singular shall include the lural and words in the p masculine shall include words in the feminine or neutral gender where the text of this Agreement so requires. X U) i. 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 a. assignable without the prior written consent of the other party hereto, which may be granted or withheld in such other party's reasonable discretion. j. In connection with any litigation arising out of this Agreement, the prevailing party 0 shall be entitled to recover all costs incurred, including reasonable attorney's fees and costs at all levels of proceedings. E k. 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 W Date" hereof W i. This Agreement shall be governed by and construed in accordance with the laws of z 0 the State of Florida. U W (n M. 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 E 71 V Packet Pg. 2164 terms or provisions hereof n. This Agreement shall not be construed more strongly against either party regardless of who is responsible for its preparation. 0 U) 0. All Exhibits attached hereto are incorporated herein by reference and made a part 6 hereof as if fully rewritten or reproduced herein, including but not limited to Exhibits A, attached Z: hereto, E cu IN WITNESS WHEREOF, the Seller has hereunto signed this Agreement as of the date U- below written and the Seller for and in consideration of the Ten Dollars ($10.00) 40- 0 hereinabove acknowledged as received, has and does hereby grant unto the COUNTY or its 3: authorized representative, or any other office or agent of the COUNTY authorized to 06 purchase said lands, the right to enter into this Agreement as of the date(s) od Seller execution, and to purchase said lands as herein provided. Execution hereof by the COUNTY by or before September 20, 2019, shall be deemed to evidence approval hereof by the MONROE COUNTY BOARD OF COUNTY COMMISSIONERS. THIS IS TO BE A LEGALLY BINDING CONTRACT. IF NOT FULLY UNDERSTOOD, SEEK THE ADVICE OF AN ATTORNEY PRIOR TO SIGNING. 0 SELLER: CmW OFFIC UV4 G, ;LC WOLFE FAMILY HOLDINGS, INC. By: By: X W Authorized 5ignature Authorized Signature -C; U) Print Name Print Name Print Title Print Title 0 0 - Cy Date Date E W PURCHASER/COUNTY: MONROE COUNTY, FLORIDA W KEVIN MADOK,CPA, Clerk By: Z 0 Deputy Clerk Mayor Sylvia F. Murphy U W (n Date: E U:1AgreenientForSale&Pui-clisise.Monroe('ounty- 8 g Packet Pg. 2165 C) terms or provisions hereof T- n. This Agreement shall not be construed more strongly against either party regardless a of who is responsible for its preparation. U) 0. 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 Exhibits A, attached 0 hereto. Z: 21 IN WITNESS WHEREOF the Seller has hereunto signed this Agreement as of the date 9 LL below written and the Seller for and in consideration of the Ten Dollars ($10.00) 40- hereinabove acknowledged as received, has and does hereby grant unto the COUNTY or its 0 authorized representative, or any other office or agent of the COUNTY authorized to 06 purchase said lands, the right to enter into this Agreement as of the date(s) od Seller execution, and to purchase said lands as herein provided. Execution hereof by the COUNTY by or before September 20, 2019, shall be deemed to evidence approval hereof by the MONROE COUNTY BOARD OF COUNTY COMMISSIONERS. THIS IS TO BE A LEGALLY BINDING CONTRACT. IF NOT FULLY UNDERSTOOD, SEEK THE ADVICE OF AN ATTORNEY PR10R TO SIGNING. SELLER: CMW OFFICE BUILDING, LLC WOLFE FAMI Y HOLDINGS INC. I Y .......... By: X W Authorized Signature A ; ut ized Signature U) ", ........- ------ Print Name Print Name (L ............................ ...................... ............ ............. . ............................... ...... Print`Title Print Title ............................ ............ Date Date E W PURCHASER/COUNTY: MONROE COUNTY, FLORIDA W KEVIN MADOK,CPA, Clerk By:__,.,_ ---------- Z 0 Deputy Clerk Mayor Sylvia F. Murphy U W (n Date: ............ E U:\AgreementForSale&Purchase.MonroeCounty- 8 1 11 a u c Packet Pg. 2166 M No,r FINAL UNTIL CUR ENT 'TITLE commi' TENT HAS BEEN PROVIDED EXHIBIT "A" U) ffixceptions to Titlej 0 1 Defects, liens, encumbrances, adverse claims or other matters, if any, created, first appearing in Z: the public records or attaching subsequent to the effective date hereof but prior to the date the 21 proposed insured acquires for value of record the estate or interest or mortgage thereon covered by this Commitment. LL 40- 0 2. Taxes and assessments for the year 2020 and subsequent years, which are not yet due and 3: 06 payable. 3. Standard Exceptions: A. Any encroachment, encumbrance, violation, variation, or adverse circumstance affecting the Title that would be disclosed by an accurate and complete land survey of the Land. .2 tt: B. Rights or claims of parties in possession not shown by the public records. 0 C. Any lien, or right to a lien, for services, labor, or materials heretofore or hereafter furnished, imposed by law and not shown by the public records. D. Taxes or assessments which are not shown as existing liens in the public records. X 4. Any claim that any portion of the insured land is sovereign lands of the State of Florida, U) including submerged, filled or artificially exposed lands accreted to such land. 5. Any lien provided by County Ordinance or by Chapter 159, Florida Statutes, in favor of any city,town, village or port authority for unpaid service charges for service by any water, sewer or gas system supplying the insured land. 2 NOTE: The Title Insurance Company reserves the right to make further requirements and/or 0 exceptions upon its review of the proposed documents creating the estate or interest to be insured or otherwise ascertaining details of the transaction. E NOTE: If the proceeds of the to to be secured by the insured mortgage are deposited with the Title Insurance Company or its authorized agent, Item I above shall be deemed deleted as of the W time such funds are disbursed to or for the account of the borrower. Neither the Title Insurance (n W Company nor its agent shall, however, be under any duty to disburse any sum except upon a determination that no such adverse intervening matters have appeared of record or occurred. Z 0 U NOTES ON STANDARD EXCEPTIONS: W (n Item 3A will be deleted from the policy(ies) upon receipt of an accurate survey of the Land E acceptable to the Title Insurance Company. Exception will be made for any encroachment, 9111 Packet Pg. 2167 C) setback line violation, overlap,boundary line dispute or other adverse matter disclosed by the survey. Items 3B, 3C, and 3D will be deleted from the policy(ies)upon receipt of an affidavit acceptable to the Title Insurance Company, affirming that, except as disclosed therein(i)no U) parties in possession of the Land exist other than the record owner(s); (ii)no improvements have been made to the Land within 90 days prior to closing which have not have been paid 0 for in full; and(iii)no unpaid taxes or assessments are against the Land which are not shown as existing liens in the public records. Exception will be made for matters disclosed in the E affidavit. LL 40- 6. and 7. RESERVED 0 3: 06 8. State Law under Chapter 76-190 and Chapter 22F-8.02, of the Florida Administrative Code for Land Planning for the Florida Keys Area of Critical State Concern as recorded in Official Records Book 668, Page 43. 9. RESERVED .2 10. County Ordinance No. 10-1977 for the collection of waste in the County of Monroe, State of 0 Florida, and amendment thereof, County Ordinance No. 13-1978. NOTE: All recording references in this commitment/policy shall refer to the public records of Monroe County, Florida, unless otherwise noted. X E W W z 0 U W (n E 10 fla 'g Packet Pg. 2168 0.4.b Marathon Professional Center Keynoter Building Land: 11,020 Square Feet 10,000.00 Square Feet Building: 5,722 Square Feet(finished) 3850 Square Feet(unfinished) Parking: 26 lined parking spaces (2 handicap) 8 lined parking spaces (1 handicap) 0 Waterfront: canal cap finished dockage none Sale price: (counter-offer$1,500,000.00) $750,000.00 ° Monroe County paid $750,000.00 for the poorly constructed shell of the Keynoter building. On top of the$750,000.00 purchase price the structure had to be gutted because of the existence of asbestos.The building will then need to be configured for use, and the electrical, plumbing, air conditioning and fire safety systems all will have to be upgraded to current codes. As the result of a fire all electrical, plumbing and air conditioning system in Units "A" and "B"were upgraded to current code in 2006. 1 am uncertain as to what degree Unit"C" was impacted by the fire; however,that unit was built around 1982. All units are turn-key ready for immediate occupancy I haven't seen any appraisals; however, I would bet you a case of beer that If 10 buyers were looking to .� purchase office space for immediate use and had a choice between the Keynoter building or my Unit A for$750,000.00, 1 believe 10 out of 10 would take my unit over the Keynoter. I was prepared to list the unit for$800,000.00; however,with no real estate commission I will take$750,000.00.John pretty much > feels the same about his units; therefore, we counter with $1,500,000.00.What do we need to do to get you there? 0 Bob 0 0 0 0 U Packet Pg. 2169 (uoypjoVq ui 6uippnq a;loM-jail!W aseyoind) aseyoind pasodOJd JO uoi1e30'1:Juaw43eAtl o c+ � N E N W 3 , E y - U — o Z > R o a C V w 2 C C s V Y a > y I I I 11 ..],❑ 0 •� ppx. f l D N U � 1 p m rz + V U O 1 N U Y z � w 0 m LL o U C 5 O n O N O U� U - U 0 O U) 0 v 0 - 5 n LL U � ' COL D �o v� ' f e p 3 U <tCg w5Co S k •; �I � . Co 0.4.d SLACK JOHNSTON MA ENHEIMER REAL ESTATE APPRAISERS&CONSULTANTS 7245 S.W.87TH AVENUE,SUITE 300 MIAIMI, FLORIDA 33173 a APPRAISAL OF REAL PROPERTY a UNITS A, B AND C OF MARATHON PROFESSIONAL CENTER, A CONDOMINIUM 2945.2975 OVERSEAS HIGHWAY MARATHON, MONROE COUNTY, FLORIDA 33050 U) APPRAISAL REPORT SJM FILE: 19623.3 Lo PREPARED FOR MR. KEVIN G. WILSON, P.E. ASSISTANT COUNTY ADMINISTRATOR MONROE COUNTY 102050 OVERSEAS HIGHWAY KEY LARGO, FL 33037 1 Packet Pg. 2171 0.4.d SLACK JOHNSTON MAGENHEIMER REAL ESTATE APPRAISERS CONSULTANTS ANDREW H.MAGENHEIMER,MAI THEODORE W.SLACK,MAI CERT.GEN.RZ1073 (1902-1992) THEODORE C.SLACK,MAI (1931-2015) SUE BARRETT SLACK,MAI (RETIRED) May 31, 2019 Mr. Kevin G. Wilson, P.E. Assistant County Administrator 0 Monroe County 102050 Overseas Highway Key Largo, Florida 33037 RE: Appraisal of Real Property, Marathon Professional Center a 2945-2975 Overseas Highway, Marathon, Monroe County, Florida 33050 SJM File: 19623.3 0 Dear Mr. Wilson: At your request, we have prepared an appraisal of the above referenced property. The U) purpose of the appraisal is to provide an estimate of the market value of the fee simple interest in the subject property in its "as is" condition as of April 24, 2019, the effective date of the appraisal and visit to the subject property. �s The subject property consists of the Marathon Professional Center located at 2945-2975 U) Overseas Highway in Marathon, Monroe County, Florida. Marathon Professional Center is comprised of a two-story office building with surface parking. The building was constructed in 1973 and converted to 3 condominium units in 2006. The scope of this assignment is based on the hypothetical condition the condominium has been dissolvedLO and the property is being appraised in its entirety. The building contains a total of approximately 5,722 square feet. It is divided into three "! units, A, B and C. The building is 100% occupied. Marathon Professional Center is situated on a mostly rectangular site that has a future land use designation of Mixed Use Commercial and a zoning classification of MU (Mixed Use). The site contains approximately 16,000 square feet or 0.37 acre. Site improvements include asphalt-paved surface parking and minimal landscaping. The site has approximately 60 feet of frontage on a navigable canal. The condominium appears to have adequate, unassigned parking. The scope of this appraisal is to estimate the fee simple market value of the subject property and we did not review or consider any leases. 2 SLACK,JOHNSTON&MAGENHEIMER,INC. 7245 S.W.87TH AVENUE,SUITE 300,MIAMI,FLORIDA 33173 TELEPHONE(305)670.21 1 1 • EMAIL: SJMIAMI@AOL.COM Packet Pg. 2172 0.4.d Mr. Kevin Wilson May 31, 2019 The appraisal report states our opinion of market value, subject to various assumptions and limiting conditions contained in this report. The property visit and analyses forming the basis of our valuation have been performed by the undersigned. The appraisal has been prepared in accordance with the Uniform Standards of Professional Appraisal Practice (USPAP), as adopted by the Appraisal Standards Board of the Appraisal 0 Foundation. As mentioned previously, the subject property was converted to three condominium units 2006. The condominium units comprising the property are held under two separate ownerships. This appraisal is based on the hypothetical condition the condominium is dissolved. The value stated herein does not represent the value of the individual condominium units, which includes a only percentage interest in the common elements of 0 the condominium (i.e. underlying site, parking, boat dock/seawall). Based on our investigation and analysis, we have formed the opinion that the market value of the fee simple interest in the subject property in its "as is" condition, as of April U) 24, 2019, was as follows: ONE MILLION THREE HUNDRED FIFTY THOUSAND DOLLARS ($1,350,000). ce U) The following report summarizes the results of our investigation and the explanation of the approaches to value. Additional support is retained in the appraisers' file. Respectfully submitted, LO SLACK, JOHNSTON & MAGENHEIMER, INC. Andrew H. Magenheimer, MAI CERT.GEN.RZ1073 3 SLACK JOHNSTON Packet Pg. 2173 0.4.d Table of Contents SUMMARY OF SALIENT FACTS AND CONCLUSIONS ............................................5 CERTIFICATION...............................................................................................................7 ASSUMPTIONS AND LIMITING CONDITIONS........................................................... 8 IDENTIFICATION OF THE PROPERTY....................................................................... 11 LEGAL DESCRIPTION................................................................................................... 13 OWNERSHIP AND HISTORY OF THE PROPERTY ................................................... 13 PURPOSE, INTENDED USE AND DATE OF THE APPRAISAL................................ 14 SCOPE OF THE APPRAISAL......................................................................................... 14 DEFINITION OF VALUE AND INTEREST APPRAISED ........................................... 16 EXPOSURE AND MARKETING TIME......................................................................... 17 NEIGHBORHOOD ANALYSIS ...................................................................................... 18 DESCRIPTION OF THE SITE.........................................................................................26 DESCRIPTION OF THE IMPROVEMENTS..................................................................29 REAL ESTATE TAX ANALYSIS...................................................................................32 LANDUSE AND ZONING .............................................................................................33 HIGHEST AND BEST USE.............................................................................................36 SUMMARY OF VALUATION AND ANALYSIS .........................................................39 SALES COMPARISON APPROACH .............................................................................47 RECONCILIATION AND FINAL VALUE ESTIMATE ...............................................54 ADDENDUM A— Photographs of the Subject Property..................................................55 Photographs of the Subject Property.................................................................................56 ADDENDUM B —Comparable Sales................................................................................64 ADDENDUM C — Qualifications of the Appraiser ..........................................................76 LO 0 4 SLACK JOHNSTON Packet Pg. 2174 0.4.d SUMMARY OF SALIENT FACTS AND CONCLUSIONS Property Appraised: Marathon Professional Center 2945-2975 Overseas Highway Marathon, Florida 33050 Property Type: Office condominium units (assumed dissolved) Folio Number: 0 Unit A: 00321661-000100 Unit B: 00321661-000200 Unit C: 00321661-000300 � 2018 Assessment Information: Total Market Value: $689,780 Real Estate Taxes: $8,297.61 Ownership: Unit A: CMW Office Building, LLC 2975 Overseas Highway Marathon, FL 33050 Units B and C: Wolff Family Holdings, Inc. 2955 Overseas Highway Marathon, FL 33050 a Interest Appraised: Fee Simple Improvements: The subject building is one and two stories and contains rentable area of 5,722 square feet. Unit A `O contains 2,875 square feet. The unit is built out with good quality office finishes. Unit B contains 1,786 square feet. Approximately 1,332 square feet is located on the ground floor and 454 square feet is located on the second floor. The unit is built out with good quality office finishes. Unit C contains 1,061 square feet. Approximately 960 square feet is leased and used for professional office space. The unit is built out with good to average quality office finishes. Approximately 101 square feet is used for storage. 5 SLACK JOHNSTON Packet Pg. 2175 0.4.d Land Use: Mixed Use Commercial; City of Marathon Zoning: MU (Mixed Use); City of Marathon Date of Valuation: April 24, 2019 Date of Report: May 31, 2019 0 Market Value Indications: (1) Sales Comparison Approach: $1,350,000 Income Approach: $1,315,000 Final Value Estimate: $1,350,000 a Note 1: The scope of this assignment is based on the hypothetical condition the condominium has been dissolved and the property is being appraised in its entirety. AERIAL PHOTOGRAPH OF SUBJECT CONDOMINIUM U) r% JY//�I ,•ril �o „r /D r IitVlNoor, A„k7nn"�'( III VUVUDIVIV n,;,, "Po!Mrv'++ ^1 J% LO ��/, r a ✓ i N� i / ° � �ri Oj ij ilr r r� � r C'el u �I Vi r/r i r U � ��i,✓r '�„� �s � �1r �... ,,,,r �';, lrr� ��io'1 ���j, i"1,., t ,a � �r For illustrative purposes, not to scale. 6 SLACK JOHNSTON. Packet Pg. 2176 0.4.d CERTIFICATION 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. 0 - we have no present or prospective interest in the properties that are the subject of this report and no personal interest with respect to the parties involved. - we have no bias with respect to the properties that are 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 opinion, the attainment of a stipulated result, or the occurrence of a subsequent event directly related to the intended use of this appraisal. - the reported analyses, opinions, and conclusions were developed, and this report has been P Y � P � P � P prepared, in conformity with the requirements of the Code of Professional Ethics and Standards of Professional Appraisal Practice of the Appraisal Institute, which include the Uniform t3 Standards of Professional Appraisal Practice (USPAP). ce U) - the undersigned has made a visit to the property that is the subject of this report. - Kimberly Magenheimer, CERT. GEN. RZ1386,provided significant real property appraisal assistance to the person signing this certification. LO - the use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representatives. cv - we have not performed any services regarding the subject property within the prior three years. - as of the date of this report, Andrew H. Magenheimer, has completed the continuing education program of Designated Members of the Appraisal Institute. SLACK, JOHNSTON& MAGENHEIMER, INC. 490WIV— Andrew H. Magenheimer, MAI CERT.GEN.RZ1073 7 SLACK JOHNSTON. Packet Pg. 2177 0.4.d ASSUMPTIONS AND LIMITING CONDITIONS The appraisal is subject to the following assumptions and limiting conditions: 1. No responsibility is assumed for the legal description or for matters including legal or title considerations. Title to the property is assumed to be good and marketable unless otherwise stated. 2. No legal opinion related to a title search was provided and all existing liens and encumbrances, including deed restrictions and developers' agreements, have not been investigated unless otherwise stated. The property is appraised as though free and clear. 3. Responsible ownership and competent property management are assumed. 4. The information furnished by others has been gathered from sources deemed to be reliable, however, no warranty is given for its accuracy. 0 5. All engineering and surveying is assumed to be correct. Any sketches, plats, or drawings included in this report are included to assist the reader in visualizing the property. We have made no survey of the property, and assume no responsibility in connection with such matters. a� U) 6. It is assumed that there are no hidden or inapparent conditions of the property, subsoil, or structures that render it more or less valuable. No responsibility is assumed for unusual soil conditions and no opinion as to these matters is to be inferred or construed from the attached report other than those specifically stated in the report. Unless stated otherwise, C the soil conditions of the subject property are assumed to be adequate to support U) development utilizing conventional construction techniques. We recommend the client obtain an opinion from a competent engineering firm. 7. It is assumed that there is full compliance with all applicable federal, state, and local , environmental regulations and laws unless noncompliance is stated, defined, and LO considered in the appraisal report. N 8. It is assumed that all applicable zoning and use regulations and restrictions have been complied with, unless a nonconformity has been stated, defined, and considered in the E appraisal report. 9. It is assumed that all required licenses, certificates of occupancy, consents, or other legislative or administrative authority from any local, state, or national government or private entity or organization have been or can be obtained or renewed for any use on which the value estimate contained in this report is based. 10. It is assumed that the utilization of the land and any improvements is within the boundaries or property lines of the property described and that there is no encroachment or trespass unless noted in the report. 8 SLACK JOHNSTON. Packet Pg. 2178 0.4.d 11. Any proposed or partially completed improvements included in this report are assumed to be completed in accordance with approved plans and specifications and in a workmanlike manner. 12. Our estimates of future values were formulated based upon market conditions as of the date of appraisal, considerate of future projections concerning supply and demand. The appraiser has no responsibility for significant events that alter market conditions subsequent to the effective date or dates of appraisal. 0 13. This study is to be used in whole and not in part. No part of it shall be used in conjunction with any other appraisal. Publication of this report or any portion thereof without the written consent of the appraiser is not permitted. 14. The appraiser, by reason of this report, is not required to give further consultation, :2 a� testimony, or be in attendance in court with reference to the property in question unless arrangements have been previously made. 0 15. Neither all, nor any part of the contents of this report (especially any conclusions as to value, the identity of the appraiser, or the firm with which the appraiser is connected), shall be disseminated to the public through advertising, public relations, news, sales, or other media without the written consent and approval of the appraiser. The use of this report in any public offering or syndication document is specifically prohibited. 16. Unless otherwise stated in this report, the existence of hazardous substances, including without limitation asbestos, polychlorinated biphenyls, petroleum leakage, or agricultural C chemicals, which may or may not be present on the property, or other environmental c conditions, were not called to the attention of, 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 such substances or conditions. If the presence of such substances such as asbestos, urea formaldehyde foam insulation, or other hazardous substances or LO environmental conditions, may affect the value of the property, the value estimated is predicated on the assumption that there is no such condition on or in the property or in such proximity thereto that it would cause a loss in value. No responsibility is assumed for any such conditions, nor for any expertise or engineering knowledge required to discover them. It is recommended that the client retain an expert in this field, if needed. 17. Section 404.056(8) of the Florida Statutes requires that prior to or at the time a rental agreement or contract for any building is executed, the following disclosure statement must be issued: "RADON GAS: is a naturally occurring gas that, when it is has accumulated in a building in sufficient quantities, may present risk to persons who are exposed to it over time. Levels of radon that exceed federal and state guidelines have been found in building in 9 SLACK JOHNSTON. Packet Pg. 2179 O.4.d Florida. Additional information regarding radon and radon testing may be obtained from your public health unit." It is assumed that sellers will comply with this law. 18. Disclosure of the contents of this report by the appraiser is controlled by the Appraisal Institute of which one or more signatures of this report is a MAI member and by the Florida Department of Professional Regulation, Division of Appraisal State Certification. The analysis and value conclusions, as well as non-public information about the subject property, are confidential matters and cannot be divulged to any persons other than the party for whom the report is prepared. Exceptions to this confidentiality provision are requests by committees of the Appraisal Institute or the Florida Department of Professional Regulations for peer review, and subpoenas by any court having jurisdiction to request production of the report. 19. Appraisal Assumption: The subject property was converted to three condominium units 0 2006. The condominium units comprising the property are held under two separate ownerships. This appraisal is based on the hypothetical condition the condominium is dissolved. The value stated herein does not represent the value of the individual condominium units, which includes a percentage interest in the common elements of the condominium (i.e. underlying site, parking, boat dock/seawall). c� 20. For valuation purposes, we have used our building area calculations. As noted, we are not architects or surveyors and it is strongly recommended a complete survey of the property be undertaken. As such, this appraisal is subject to revision if the surveyed C building areas differ from our calculations. c U) a Acceptance or use of this report constitutes acceptance of the preceding conditions. LO cv 10 SLACK JOHNSTON. Packet Pg. 2180 0.4.d IDENTIFICATION OF THE PROPERTY The subject property consists of the Marathon Professional Center located at 2945-2975 Overseas Highway in Marathon, Monroe County, Florida. Marathon Professional Center is comprised of a two-story office building with surface parking. The building was constructed in 1973 and converted to 3 condominium units in 2006. The scope of this assignment is based on the hypothetical condition the condominium has been dissolved and the property is being appraised in its entirety. 0 The building contains a total of approximately 5,722 square feet. It is divided into three units, A, B and C. The building is 100% occupied. Marathon Professional Center is situated on a mostly rectangular site that has a future land use designation of Mixed Used Commercial and a zoning classification of MU (Mixed Use). The site contains approximately 16,000 square feet or 0.37 acre. Site improvements include asphalt-paved surface parking and minimal landscaping. The site has approximately 60 feet of frontage on a navigable canal. The condominium appears to have adequate, unassigned parking. The scope of this appraisal is to estimate the fee simple market value of the subject property and we did not review or consider any leases. Unit A, contains approximately 2,875 square feet and is located on the ground floor of the condominium building. Unit A is currently occupied by a law firm and built out as professional office space. It is built out with good quality office finishes. The condominium appears to have adequate, unassigned parking. Ownership of the unit is held by CMW Office Building, LLC. ce U) Unit B contains 1,786 square feet. Approximately 1,332 square feet is located on the ground floor and 454 square feet is located on the second floor. The unit is built out with good quality office finishes. Unit C contains 1,061 square feet. Approximately 960 �s square feet is leased and used for professional office space. The unit is built out with LO good to average quality office finishes. Approximately 101 square feet is used for storage. Ownership of Units B and C is held by Wolffe Family Holdings, Inc. N Based on a review of information in the public records, there seems to be discrepancies concerning the size of the units that comprise the Marathon Professional Center. As such, we recommend a complete survey of the property be undertaken to include both the ground and second floors. The following is a summary of the building areas based on the Marathon Professional Center Condominium Documents (MPCCD), Monroe County Property Appraiser (MCPA) and our building area calculations. 11 SLACK JOHNSTON Packet Pg. 2181 0.4.d Marathon Professional Center- Unit Area Reconcilation Unit MCPA SF MPCCD SF SJM SF A 2,670 2,402 2,875 B 1st Flr 1,332 B 2nd Flr 454 B Total 1,332 2,896 1,786 C 1,061 0 1,061 Total 1 5,0631 5,298 5,722 MCPA - Monroe County Property Appraiser MPCCD - Marathon Professional Center Condominium Documents SJM - Slack, Johnston & Magenheimer For purposes of this appraisal, we reviewed the building plans included in the condominium documents, verified many of the measurements during our site visit and calculated the building areas accordingly. Based on a review of the MCPA information, our measurements for 1) Unit A are slightly greater than theirs and 2) we concur with the ground floor areas of Unit B and Unit C. It appears the MCPA does not include the second floor of Unit B. Based on a review of the MPCCD, they only identify two units ("Unit A & B") and appears to transpose the numbering as compared to the other information in the public record. The MPCCD identifies "Unit A" as containing 1,364 square feet, plus 1,038 SF which appears to be the ground floor of what we believe to be Units B and C, respectively and "Unit B" as containing 2,896 square feet which appears to be what we believe to be Unit A. Cs For valuation purposes, we have used our building area calculations. As noted, we are not architects or surveyors and it is strongly recommended a complete survey of the property be undertaken. As such, this appraisal is subject to revision if the surveyed building areas differ from our calculations. LO 12 SLACK JOHNSTON. Packet Pg. 2182 0.4.d LEGAL DESCRIPTION According to the condominium documents, the subject site is described as: Lots A-2, B-2 and C, SOMBRERO SUBDIVISION NO 6, as recorded in Plat Book 2, at Page 93 of the Public Records of Monroe County, Florida. The condominium units are described as follows: 0 Units A, B and C of MARATHON PROFESSIONAL CENTER, A CONDOMINIUM, according to the Declaration of Condominium thereof, as recorded in Official Records Book 2215, Page 389 of the Public Records of Monroe County, Florida, and any amendments thereto, together with an undivided interest in the common elements appurtenant thereto. 0 OWNERSHIP AND HISTORY OF THE PROPERTY The subject property, the Marathon Professional Center, was originally constructed in 1973 and converted to condominium ownership in 2006. There are three units. U) According to the Monroe County tax roll, ownership of Unit A is currently held by CMW Office Building, LLC, 2975 Overseas Highway, Marathon, Florida 33050. The current property owner was one of the original condominium developers. In September, 2006 a warranty deed was recorded indicating a purchase price of 281,900; however, it is our understanding this transaction was between related parties. a According to the Monroe County tax roll, ownership of Units B and C is currently held by Wolfe Family Holdings, Inc., 2955 Overseas Highway, Marathon, Florida 33050. As �s noted, the subject's project (Marathon Professional Center) was originally constructed in LO 1973 and the property was converted to condominium ownership in 2006 by the current property owners. In September, 2006 warranty deeds were recorded in ORB 2239 at Page 1622 and ORB 2239 at Page 1644 indicating a total purchase price of $563,800; N however, it is our understanding these transactions were between related parties. The subject property is not currently listed for sale. Units A and B, as well as a portion of Unit C are owner occupied. Based on discussion with the owner, about 90% of Unit C is rented on a month-to-month basis for $16.88 per square foot. The tenant in Unit C reportedly leased the space in 2014 for a one-year term and subsequently continued to occupy monthly. The current condominium association fees are $22,086 per year or $3.86 per square foot. Based on discussion with the condominium association representative, there are no special assessments expected in the near future. 13 SLACK JOHNSTON Packet Pg. 2183 0.4.d PURPOSE, INTENDED USE AND DATE OF THE APPRAISAL The purpose of this appraisal is to develop and report an opinion of the market value of the fee simple interest in the subject property in its "as is" condition, as of April 24, 2019. This appraisal is based on the hypothetical condition the condominium is dissolved. The date of the report is May 31, 2019. The intended user of this report is Monroe County. The intended use of the appraisal is to establish a basis for the potential purchase of the property by Monroe County from willing sellers. There are no other intended users or intended uses of this appraisal. SCOPE OF THE APPRAISAL The scope of this appraisal report is defined by the purpose, which is to develop and report an opinion of the "as is" market value of the fee simple interest in the subject property as of April 24, 2019, the date of valuation based on the hypothetical condition the condominium is dissolved. The client did not provide any information for review. Subsequent to our visit, an estimation of the highest and best use, as of the date of valuation, was made. The highest and best use analysis considers all physically possible, legally permissible and economically feasible uses to which the property can be put, as though vacant, as well as improved. �s The appraisal process includes three basic approaches to value. These are the income, ce sales comparison, and cost approaches. The application of these approaches is U) determined by the type of property being appraised, as well as the scope of the valuation assignment. Research indicated that buyers and sellers rely most on the cost approach when the LO improvements are newly constructed and represent the highest and best use of the site. They place little, if any, reliance on the cost approach, for properties already existing. For this reason, the cost approach was not considered a reliable indicator of value and has N been omitted. In this assignment, the sales comparison and income approaches have been utilized in estimating the market value of the fee simple interest of the property, as improved. Our research for comparable commercial/office building sales initially concentrated on sales located within the subject's market area (Marathon) for purposes of comparison to the subject property. Due to the limited number of sales found in the Marathon area, the search was expanded to include sales within comparable areas of Monroe County. The sales included in this report are considered of good quality and representative of the best available market data. Analysis of the selected sales included a visual inspection, 14 SLACK JOHNSTON. Packet Pg. 2184 0.4.d reviewing the deed and confirming sale details with one or more of the parties to the transaction, or their representatives. A market survey of comparable office buildings and space within larger buildings within the subject's market area, or competitive areas, was also conducted to ascertain rental rates and occupancies to aid in estimating a market rent and occupancy for the property, as of the date of value. This data was obtained through interviews with leasing agents, property managers and owners. 0 The final step in our analysis is a reconciliation of the appraisal methods used. The quantity and quality of the data used, and the reliability of their value indications, are the basis for the final conclusion of value. a �s a LO CD CD 0 15 SLACK JOHNSTON. Packet Pg. 2185 0.4.d DEFINITION OF VALUE AND INTEREST APPRAISED The Uniform Standards of Professional Appraisal Practice (USPAP 2018-19) defines Market Value as "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 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." We have relied on the Dictionary of Real Estate Appraisal, Sixth Edition, definition of 0 Market Value 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 and knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: 1. buyer and seller are typically motivated; 2. both parties are well informed or well advised, and acting in what they consider their best interests; 3. a reasonable time is allowed for exposure in the open market; 4. payment is made in cash in United States dollars or in terms of financial arrangements comparable thereto; and o® 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. �s (Federal Register 77472,Volume 75,No.237,December 10,2010) Ls Other pertinent definitions from the Dictionary of Real Estate Appraisal, Sixth Edition, as C14 follows: Fee Simple Estate is the "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." Exposure Time is "the estimated length of time to property interest being appraised would have been offered in the market prior to the hypothetical consummation of a sale at market value on the effective date of the appraisal." 16 SLACK JOHNSTON Packet Pg. 2186 0.4.d 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 the appraisals." Condominium is a "multiunit structure, or a unit within such a structure, with a condominium form of ownership." Hypothetical Condition is "1) a condition that is presumed to be true when it is known to be false. (SVP); 2) a condition, directly related to a specific assignment, which is contrary to what is known by the appraiser to exist on the effective date of the assignment results, but is used for the purpose of analysis. Comment: Hypothetical conditions are 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 about the integrity of data used in an analysis." 0 EXPOSURE AND MARKETING TIME The normal exposure period is considered to be the most probable amount of time necessary to expose and actively market the subject property on the open market to U) achieve a sale at a price consistent with the market value estimate and on terms consistent with the definition of market value recited herein. The length of the exposure time is a function of several factors including price, terms, investment quality and exposure to a given market. U) A review of current market activity for office buildings within Monroe County, as well as conversations with broker's active within this market, was performed in order to estimate an exposure time for the subject property. Most brokers indicated that �s exposure/marketing times are typically less than one year, if the property is priced realistically. `O Investor and market surveys typically do not cover Key West or the Florida Keys N (Monroe County, Florida). The PWC Real Estate Investor Survey — 1st Quarter 2019 reflects a marketing time for the Southeast Florida office market in the range of 1.0 to 6.0 months with an average of 3.3 months. Based on the marketing periods reflected by this survey and from the sales presented in this report, a typical exposure period for the subject property was estimated to be up to 12 months. We have further estimated a marketing time of up to 12 months. 17 SLACK JOHNSTON. Packet Pg. 2187 0.4.d NEIGHBORHOOD ANALYSIS The subject property is located in the Middle Keys region of Monroe County. Key West is the southernmost island in the archipelago known as the Florida Keys, a chain of over 800 subtropical islands off the southern tip of Florida's mainland. The Keys primarily consist of a network of 30 inhabited coral islands covered with tropical vegetation arching southward between the shallows of Florida Bay on the north side and a barrier reef of living coral lying in the Atlantic Ocean to the south. The islands span a distance of over 100 miles. The climate is warm year-round. 0 Monroe County covers a total of 1,034 square miles of land area, and comprises two geographically distinct areas. The northern part of the county is at the southwestern end of the mainland of Florida, and consists primarily of a portion of the Everglades with a few inhabitable areas. The second area is the true Keys, a series of islands beginning with North Key Largo and extending southwesterly 115 miles. Key West, the end of the island chain, is located approximately 160 miles southwest of Miami, 90 miles north of Cuba, and is the southernmost point in the continental United States. Key West is also the county seat for Monroe County. A map of Monroe County is provided below. U) r Cuthbert '9F - LakeLO'kafn won, I'Tavernier LO wry@hoo E "pya, - :a, WtlC!tli .N ,/A lir 18 SLACK JOHNSTON Packet Pg. 2188 0.4.d As of 2018, Monroe County was populated with an estimated 73,940 residents. The majority of the population is divided among the various areas of unincorporated Monroe County, with the largest population group in the Key West census division. The City of Key West proper comprises approximately 30% of Monroe County with a population of 24,509 in 2018. The City of Marathon had a population of 8,235 and the Village of Islamorada had a population of 5,990. The overall population in the Florida Keys has historically increased slightly each year since the 1940's; however, the 2010 census figures showed a slight decrease. The decrease is likely due to the exit of permanent residents, who were replaced by second home owners and transient residents. A decrease from 2017 to 2018 was also noted, likely due to the displacement of many residents due to Hurricane Irma in 2017. Overseas Highway, (U.S. Highway 1) is the only access from the mainland, by car, to all S destinations in the Keys. It is the dominant commercial corridor throughout the county. Development along the highway includes a mixture of commercial, residential, industrial and tourist-related uses. While significant portions are zoned for commercial use, there are also many untouched tracts which have been purchased or targeted for purchase for natural preservation. As a result of the difficulties in gaining approvals for new development, the demand for U) large undeveloped tracts of land is almost non-existent in the private sector. Most new development takes place on already scarified sites or in the form of replacement of pre- existing structures. Most purchases of large tracts of land are made by governmental or conservation groups for preservation. Additional statistical information obtained from the Florida Legislature Office of Economic and Demographic Research is provided on the following pages. LO 19 SLACK JOHNSTON Packet Pg. 2189 0.4.d IOnOle Colunty Florida's 38ttu most psopaWoaa's county I+a12alYRaartwtGVC;9 with 0.4%of Florida"s population 4l 4tVrabRl, Kerry Wp'st. � 0 a- Popy'ualat oin,, Houasufta' Cemsus.Papulxki.a,n Monroe Cawnbr FRarid.a Houaahng Counts Ma'nroe Couurrty F9orldm. °® I,91in 4 r 93ii iR 9,7,15 ArA FP',r q r f ,`[Iflk] ,nn u,. 1:l ry F if,;r49'7 1990.o r, 713,024 12 YM,Q 71 r:X.a'-p,iw :S°i3ON n,o 7,9 � hrvrpw�'I IACaff,Fir) 'Jlt .b -1 fa'v. m +.r'enl'3in,-P �,F'N':i 441,1,751rn 20117d Census 79 5G.o 5 9,D2014 rprmerai:u(pied 1�3.8G::R t09617G ®_ %ch�am,we i5.96-DO 2 fl'!f, 2;5% 'Vacant 16,531 96.5,13 R f1 AM( ,.. lB,IJ!1R) Id W7 l!2 l'S1JI.1'AI )w L 2A'IU ,,u-, u..d'd4 W Iii 5 i I 1V1YIfb Y(I A 2% Y 7 E1% C f R CI:li%h 7 lnil f)? r raw .mmno-rr"r,apn8 ik.i0i 4 a,9 !i'FI %lalnda d yeal3,7,Y aagir, 75'1°4� 2Y 2%, h t onrrnal'd"t 44.,i'SFE '�1, S 2 0 t it Years d age artd vier R7.1% 17.3/,, ',t'ac:ranr M 135 9 5GPf,7Tf3 Rice a r_idnl n %'All,,I,aln- pit fa 01, l9nhts.lPennitted. 1r,FAach or'alnrwr Arr p,.,nr rl:ane 57% I(r% i?u[I 7ffi I 'IM a- P Iti-,parl.,3r Larm of aignroaa "n GRt, .7,% 2GOD DUI U 271 A Esrlmr arwi and Pnujoctloni 20 6I Q: 42,360 7171 Ergirnaiw 76 309 20,44 142 2ut';r 221 CIO, 0 � 'sJIV-'I b-i!5b 9A 11 ?il't'I "dN, oil r`,52 U) f➢,ti[=r,le.tinn fr i nTg.�,i.!tl'I' .Cil'r1:fi0 T`•;Sl1A,E i ,Y'i'17' 20 14 Nf µ,I f175 P 'ispA.'All',7Ra 2'1% .a 1% 2015 "l'l Yf d P,14 t1,!5[" artinn h dr.;lCI17 rr.4 curate 75 fl, 17'f IM VIY4 G ?"Irl i Ir,:•e1.0 o.hanGa,20210-H Gr% 71% NIf 2147 h 77R9 a- f l3l MI r.-gin mxrhn aF3� •1t Rll oenalty Iveyp'aablifiran Cficlanaat¢i Lingrual3ir p frn rlhnnr r,athel rl an er an per srry,,are ii, p"41,1 M G." Florida .JGu4 ,G?AS '1.96 4 F r n7nd rr',leweu' C3.m P.144•fi AI'J%afr IY1% AU CM 4.' '31tUH fhre 8I th 117 7h','` ifl i 0 Foreir born 1 iu+r.9,i'!'m IRA% r 0,'1^tE, �i' _ Ho u'2'LN"old"m'rs71rYd1'F,r5111ily Holus!GI71olds.»' Cuiliarl,psarpulrarien'I'D and mi, 17 .fY I Y5 � Houa4ftlda MunmeCountry Florida Re.idenucetrem,ragla I A I I c "Id"MIJ R W ,u, �5 13f2i3 r,7"If 07;5 Paeaons aged.I and ow FiaaPV luanfrrhd ?iMCnrr as 2,lI,Ju5 4,7U`dU •. inli Ip,d,.,f.f.6% e'd-:P% .I,X-19%. r with vorr hddren under Ifl Ysl.A% u'r 2M, !Affluent housi,n the fl r 17 / F t,e1 i r,I.,h r f l 1 IMIJ h„a's'htlids 2D 10,cersrlS 32 G;14A ,I,+n ACk:r -o,r R u'id.n m r9r +; 9 3r, M'C'3''r a ft'I', F�rruPyf�uaf�.rl e.,rill Ut':I:;rvvi., Yfl„aYIl 4VY1,.475 nNnIrent r:nazwn,n Fhdn I Alt,,r-137'U, 111n u`..R 11% L0 ro asw vrx rn III v.rrvJ%rr'Is 132'7% 40.D% V 7Yerenr atel.rrm n'arrodi vanre 5 B31 A.1091% 1Y.0'/,,^r 01% Al,,,ap,Hxe:°ra al ri,,u.:.r.,'A 1iJ.0 ,, 2 N) 240 ,Abratad t fla t..0419, 1 G'"I.xf•a I% � 1R rrle rertt;t2 m,W1 111,Cm, 2-Y2 1U1 4=-,gan if rrurb 9 ra10% o4tlen-e I—I T— rt rvJxP .au.:,wi'x.lua. rrr.o r+u.uDw .urvu,nxtiu xarxw,a.ry r,. umF 0.rc:v�.n.un n•'q.v,x..ry'm u. rrc.xr'nm-a,.rr,row.�..ro�wxxuq, .:. tw,w .+A.rxa myw .n..n wunnex.+�r.x+u 04 r ,w,u ev lw.w uW u,2u r.sc .d,cnoW I e°pl ERYIpAl:Gu"yYGN1Enk I7�y IIPflaMI".$r'y � Mu mu har of E'atablis hmr mits Perc anrt of khl Earablish7mr Mara 20IG prefanehumaay Monroe County Ill 2016 prelalei-ni Mon—Country F1oddm. All uv.9ucarries 4;G4` Fto lift +V irlduaRrlen 4,kril"',, F17FUJAI Rda ir'al Riesourae&Minfrid ri,l Rr2 Y3aaharal l e a arre 6 Miniii t 215ix II rM � Ua"rud. 544 k316 377' (.0:,ir..gran I2.l% 9 kl,,6 N✓ ti Puu y G7 all 594 Rd au,R g 11.% t I 4, Ion un,,pr lute`.'-d lAgdrrv; 967 1141 rA::O to.7. 1 u,.y,,,, l eau UN'b" 21 511, 21.Md in hir,'I hd 4U 9`.'_+ Inc} aripn Y i','4h 1 IN% I Irian:(."alArpi 1110 7'IAN, Firianu,Y AciwlaeR 1 IfE 71tr G'rnf.�rcvranal�.I�a.nt.:;.:Services tdF, I (WL'd,sne-r-,Ser,ie:a'�. IT7%,, 2141''a6 f ,od,ix K11 ni K2 N 152 , ;3% 14,G'6l, ,,,urr,n¢r PSI' bb 43r g.,,e er-1;aptahiry ill J%, '8,:f:'94 7T5 i4,912 S.YI 0 Y,3 , i).t;';,�,... r,I... ieu',t ':b'3 15,7tf Ci, nnC' 2.i fm 20 SLACK JOHNSTON. Packet Pg. 2190 Monroe Countyralrrzl Eimployment hy hduOry A var.g.A nn..l Ealpl.ymient, Average Annual Wage %of All Mdustries,2018 preflininemy Monroe County Florida 2016 preiiiininar; M.-to C.-ty Florida At I Indu stne rr 4 1.110 1 p"309 Q`9 All nau,.,Iflp; "41 $47'rinn Nlatunr &ajrjjr',,3 -14SM It R% Niv.,,ril Fc,,soume&Mming S 7,4f15 $111,5111 arn- U blQ, 5 i T" Cn,V,,1.n Minuiactunp,a 0 tm d 3wn M anutactv Ind 131R AA $1117824 C: rfade,Transpogation ard UIllmes 17 M" -1fl 5% Trade Tran�Cpoilation and Utikjet, $Ulflrl"l VU129 0 infer lar'nn I U11111 d% ?btl Fml-"l 4'fva""a �q 9%, L 5% 1"--,al Amr,, f4T,070 ;456,7OI rrofe.mcnal&Bimmem.,ermuzs 7?-/11 t 5"1 9fi Flrdassi Dnat 1-1 alvicens Vir'-41"A $511"FlOrt a- 5&-,nnn A I M11 14 8% rfln,m-fl,HeArh $4 g d I U ,-, ,Wild,plt.hry X 7% 14 V3r In-p1mty 124395 3 Other'�Frmcu., n 994 12 U, -1 11511 111,1 S52 022 Labor Force Aged 1�and Older mornmelcounty Florida.. Unarm ploymont Rate Monroe,County Florida I U[JU Jj uItt, 64"Ph 701911 2�'O' U"I, 2DO9 60 5% 637% 2HI),) 2 9% '17% 2011r 67 9% 20 10 T 019, 1 M(I I JU Ptv U AII N 2i,`% 4 21Y4 ego liniouirriv.arld Financial Heahh l$Ow.j' Mon..C-1y Florida Per Capital P....n.t I-... Man'..C unw Florida 1990 S`,D20 114 1,260 F-J3,560 1990 S23,2.64 S�9 95r1 a- -dllM 7i,?T7,3,T-,' $4 7 7,,115 W98 "'Ant-I P1 1"24 n $21H,7 %J'-p 11j,dU-rjUAI rin 1 015 "'% � U UIAIIi-lju 77 d A rlv, 20,0 S4 565 102 7,72C,016,�,fjU 26 10 yG 7s59 SDO 626 %,charge NOD-10 39 T�11 S<t1% 7u-charge 2000�l 0 51 111.113% 20 1 1A 7 75 95-1 T 7 7 1,315,2N46 2011 364 11,16 ZO'194 U) d,�nq,,20 11)11 4 J"t", b 2?t, %,Crl Je 2r11$P,ri ,'4 14 4 H% I Tb Vug'ltm.tIw N 1'<: Vu'e4l) 141 JUL[ %-1...Y'v X I r-1Y 7a 71%, 2 Fill(, r"0 u"qv 1U I I-I-1 9 6% 1 2% a- zu I trt'8 7 6'm alu,V5'mm AI 13 db 0',1 Jb 141J N I %13nge"RI I I"i '?.% ii t 1`11 r,,A,-,rqm,n I ,i lb U% U 11'g111 (L 21D 14 715,5VI 971; $061134.0 9113 2014 374630 TA3 D64 -9,20 13.14 Y 2'Yv 7 2T, %O.,,,g,20 1 D,14 U'11%, U15 $tl Iw"m 0b Vl�(Al $4 441 Fd yv w'Ill 14-11, 3 9% 7 4% %A w"p,,'U 1 4-1 b 5 5% A)16 95 uUj luli 1194(zu P 14 U Allb 'Ir m JU $4 jtl %d...UC 211',-1 1 11/11 71 IJIG %,Jh,wg,2U lh.-% n 71%, 1 M& U) Earnings by Pl...of Work fWOQs� Median Incense qA(I V11312,11111A Ir I@ I"j,I T'321j [Ad-H lnid ln-- E'I,d6P f,48,900"$200 'RI,E7?207 I,,U,54,'A,' M udhor,i,jri ily hxp;it- e cd"UA 3W,UJ 1P,$2T, j t Ipe N T4 141% Y-=-rqin ofivuIr -d WN,corfole,-level 2nJw t?C98LO57 $4,37,Q 4,4h hJ trcxla MIN) 0 h 49, '?U 1,31% Percent in Pavoirl,20 16 1 $2 141j,bIJA 1144i 7'tll0 All vjc,,,wmk� 11 14 % 'Alt 11 11 24% 1 hd,r aq,N,,pn-ltv I '1-1`9' T- 2UU tlNU1,J4?JIA "Y-, I SNll pn 17 6 71m, 3 3'?!' LO 210 13 12 279,752 7,479,490,070 Educabon dhinge 14j,2,IJ I rw" 3119(. Publi.Ed-floin 5theuft Monroe County 21)14 T2404,721 Tradition.]:Setting t2017.101) 9.h..E Di"net Florida %changta 201 C)-I'l 5 F41111 Tmal 1,14 fl,,d-sp d,ml,aol Y 7 16 17 VQ i l'9?nfqEi I FI,n,,,nlx,, 04 lli rfi-n,.N1 In V, 1,14% 1:3 01114 laliddla 11 r $2 fAR'801F, $56'104L'�M 7 .......H,' 6 11 %<rige 20 15 16 10 1 r I R", .Honor. 7 5d7 Parional Bankmptcy FlUng Rate Ediucadonall atn5rimmt E (p of 1 XO pop will it]on) Monroe County Florida. Persons M944 25 and older Monroat County Florida 12 Mir Uh I......1-d,,,M Ma,0,J I A)I U 1TV 21 1 U %,I It,ij-'J.A ur lnyhrur 91 UIN" I U U"N' V 21% U 11, t ,d,,,y, hit i 1 'L! I U 1 11 %Mfl,kr&,dpqrpp or hqher 1 7136'/,14 V 91%" U 21T, Ittate'Rank. 46 NA ,n level 7 rra:hryle.r D Quahty of We Grlime Monroe County Florida Work-Aged 18 and Over Monroe County Florida O�nrp,rate,2M7 Iindex rr t�,me pa, A0.0011 twit,I',iirrm'1) 6 Ph,,of r7 I, n Fl,-,rd, rn 4�%��Q'Vi� �--nn,f,, -F,?ff 16 17 1 10 2R 83 h� 'Mrl rd-,,I�rn,,IV M rl,ne,, 17 Ie 0 irto,tirin T a uel Tiimn m Wod, p"pulAw"F"'Tj J,I f 247 1 M4Lr.la M1,m Kw,l a ,l urv, 78 4 f,1.1 'xN U:I "e'9"M e"i),U-1 m e T)%mhdw' I-I 21 SLACK JOHNSTON Packet Pg. 2191 0.4.d IMonroe County. r«ge3 Reported County Government Revenues es and Expenditures Revenue 2015-16 Monroe County Florida' Expenditures 2015-16 Monroe County Florida' Total-All Revenue Account Codes Total-All Expenditure Account Codes ($000c) $420503.6 $40,323,6127 ($000s) $421,662.55 $38,724,729.62 Per Capita$ $5,634.72 $2,097 46 Per Capita$ $5,544.76 $2,014.29 %ofTotal 100.0% 100.0% %ofTotal 904% 96.0% Taxes General Government Services"* ($000s) $141,160.6 $12,836034.6 ($000s) $56,092.96 $7,520,34277 Per Capita$ $1,856.23 $667.62 Per Capita$ $740.13 $391.10 %ofTotal 32.9% 31.0% %ofTotal 13.3% 10.6% Permits,Fee,and Special Assessments Public Safety ($000s) $19,409.0 $1,732,457.6 ($000s) $10040972 $9,077,106.65 Per Capita$ $25522 $90.11 Per Capita$ $1,425.56 $472.15 °® %ofLocal 4.5% 4.3% %ofTotal 25.3% 22.5% �S Intergovernmental Revenues Physical Environment ($000s) $52,473.1 $4,079,466.6 ($000s) $67,120.13 $4,450,50104 Per Capita$ $69001 $212.20 Per Capita$ $882.72 $23150 %ofTotal 12.2% 10.1% %ofTotal 157% 11.0% � Charges for Services Transportation ($000s) $75,376.6 $12,526,050.9 ($000s) $25,554.64 $4,573,520.57 Per Capita$ $991.18 $651 55 Per Capita$ $336.04 $237.29 %ofTotal 17.6% 31.1% %ofTotal 0.0% 11.3% 0 Judgments,Fines,and Forfeits Economic Environment ($000s) $3,403.6 $202,607.1 ($000s) $35,331.69 $1,451,92679 Per Capita$ $44.76 $10.54 Per Capita$ $464.60 $75.52 %ofTotal 0.6% 0.5% %ofTotal 8.2% 3.6% Miscellaneous Revenues Human Services ($000s) $5,841.0 $908,143.1 ($000s) $30,166 00 $3,212,191.93 Per Capita$ $76.81 $47.24 Per Capita$ $396.69 $167.00 %ofTotal 14% 2.3% %ofTotal 7.0% 0.0% Other Sources Culture/Recreation ($000s) $130,839.6 $8,030852.7 ($000s) $5713.05 $1,496,601.01 Per Capita$ $1 720 51 $410.20 Per Capita$ $75.14 $77.05 %ofTotal 30.5% 19.9% %ofTotal 1.3% 3.7% Other Uses and N on-Operating � ($066s) $83,751.76 $6,041,997.10 IL 'All County Govern menu Eampt Duva l-The on snlidated City of Jadcsaovlllel Duval County Per Capita$ $1,101 32 $314.28 figures are Included In municipal totals rathe r than county gove rnment totals. %ofTotal 19.5% 15.0% p� Court RelatedExpenditures 6! "(Not Court-Related) ($000s) $0713.00 $900,372.95 Per Capita$ $114.57 $46.03 %ofTotal 2.0% 2.2% V) State Wrastru cture State and ILocM 1faxatdoru Transportation Monroe County Florida 2017 Ad Valorem Millage Rates Monroe County Slate Highway County-Wide Not County-Wide" Centerline Miles 119.2 12,109.9 County 26957 07177 Lane Miles 301.2 43,819.1 School 3.3560 State Bridges Municipal 1.3260 Number 50 6,783 Special Districts 0.4646 0.4362 L0 "MSTIJ Included In Not County-Wide"County"category State Facilities BuildingslFacilities(min.300 Square Feet) Number 144 9.319 Square Footage 305.093 63,971.060 C14 State Owned Lands ,y�g State Lands Conservation Lands Parcels 2.062 38.326 E Acreage 58,032.0 3,140,422.9 Non-Conservation Lands Parcels 106 5,660 Acreage 561 5 160,352 7 Prepared by Flo is L g lat Off ff -,-dnernographcRe-h r�lSk 111 W-Mad mn Street Su to 574 Tallah--FL 32399 6588 (850)48]-1402 httic//edrstate Fl us June 2018 22 SLACK JOHNSTON. Packet Pg. 2192 O.4.d By definition, a neighborhood is a group of complimentary land uses. Typically, its boundaries can be fairly easily defined, be they physical, social, economic or governmental in nature. The unique geographical aspect of the Florida Keys creates land uses and neighborhood characteristics throughout the archipelago which are generally atypical. As mentioned previously, Monroe County is made up of a chain of small islands that sweep about 115 miles in a southwesterly direction from the southern tip of Florida's mainland, ending at Key West. Land uses are somewhat limited by the geography of Monroe County, and many uses take advantage of the natural resources, with tourism and commercial/sport fishing dominating the local economy. The concept of complimentary land uses are often overruled by constraints resulting from the odd configuration or limited availability of developable land. For these reasons, neighborhood boundaries are lesser defined, with incongruent uses existing throughout much of the county's developed areas. a The subject property is located on Vaca Key in the City of Marathon. The City of Marathon was incorporated in 1999. Its boundaries extend from the east end of the Seven Mile Bridge (approximately Mile Marker 47) to the west end of Tom's Harbor Bridge (approximately Mile Marker 60). The City includes the islands of Boot Key, Knight Key, Hog Key, Vacca Key, Stirrup Key, Crawl and Little Crawl Keys, East and West Sister's Island, Deer Key and Fat Deer Key, Long Pine Key and Grassy Key. U) Marathon is one of the more populated areas of the Keys and has a higher concentration of commercial development than many other areas of the Keys. Commercial development includes a wide variety of motels, restaurants, shopping centers, drug stores, 16 supermarkets, as well as a Home Depot center. According to the 2010 U.S. Census, there U) were 6,187 housing units within the City of Marathon representing approximately 13% of the total housing units in Monroe County. Marathon Airport is a mostly general aviation airport, and one of only two in the Florida LO Keys. Although there are other air strips in the Keys, Marathon and Key West are the only two airports providing commercial flights in and out of the Keys. Boating, fishing and water sports are a big part of the economy in the Florida Keys. According to statistics published by the Department of Motor Vehicles, there are approximately 29,000 registered vessels in Monroe County. This indicates almost 40% of the total population of Monroe County have a registered vessel. In all likelihood, there are probably significantly more vessels in Monroe County than registered due to the number of second home owners from neighboring counties to the north who register their vessels in Miami-Dade or Broward Counties. 23 SLACK JOHNSTON Packet Pg. 2193 O.4.d Marathon " I a® me u.1-1 IL LO r� I ; vl J a CD CD Omi 1 2 3 4 5 24 SLACK JOHNSTON. Packet Pg. 2194 O.4.d The Florida Keys were hit by Hurricane Irma in September, 2017. Irma was a very destructive storm and properties were affected in all of Monroe County from Key Largo south to Key West. The Lower and Middle Keys, Marathon to Big Pine had the most damage. According to Coldwell Banker Schmitt's Real Estate Report, "As 2018 progressed, the Florida Keys real estate market returned to a more normal market cycle." Statistics for the first quarter of 2019, indicated the market continues to track in accordance with historic market cycles showing typical levels of listings and sales, though the year started with fewer pending sales than in 2018 and 2017. The total number of sales in the Upper Keys real estate market increased by 4% in 2018 as 0 compared to 2017 to 2018 and the average sale price rose by 18%. The real estate market is projected to be stable for 2019 notwithstanding any significant natural or economic events. Based on our visit to the area, there appears to be significantly more new construction taking place than in years prior. New construction includes both commercial and residential components. 0 U) �s a LO N 25 SLACK JOHNSTON. Packet Pg. 2195 0.4.d DESCRIPTION OF THE SITE ietlP'MRIN Stltl11ALY Wa'11 IL li%k !pYBNE I'dNC OT7 • —..�„ oEG'9d�.mie"q Wiw1^'fl k ,.. '�H1fW'G� �. W GN — 2s"l V � R 8 SaWfAf er�gg++.� ' IT"8" / []f d xI 1Mor . ....... „ Y'r1 . r UNIT ALOT 8 as.�r WIT ICI I� ���MT3���� (SEE MT TMS)I� 21,54' LOT C. xa A T 7LLJ �, k 4545 LOW+a�ea^ •. � PCf CNtuml YACHT BASI N LOT CHANNEL. � ARY SU Location: Marathon Professional Center, 2945-2975 Overseas Highway, Marathon, Monroe County, Florida. U) a Shape: Rectangular Site Area: 16,000 Square FeetLO 0.37 Acre Frontage/Dimensions: The site has approximately 160 feet of frontage along Overseas Highway, 100 feet of frontage on 29th Street and 100 feet of frontage on 30th Street. There is also 60 feet of frontage on a navigable waterway/canal. The site's dimensions are approximately 100 feet by 160 feet. Access: Access to the subject condominium site is via Overseas Highway to 29th and 30th Streets. Topography: Level and at, or near, street grade. 26 SLACK JOHNSTON Packet Pg. 2196 O.4.d Soil Conditions: No soil report of the subject property was provided. It is assumed that the soil is of sufficient load bearing capacity to support the construction of permanent structures. No evidence of any adverse soil conditions at the site was observed upon our physical visit of the property. The fact the site is currently improved with an office building is proof that it is suitable for development. Utilities: All public utilities are available to the area. 0 Land Use Restrictions: No authoritative report of title has been provided or reviewed. There do not appear to be any easements or restrictions that would adversely affect the utilization of the site. ° Flood Insurance: The subject property falls within Zone AE-8. Zone AE is determined to be special flood hazard areas subject to inundation by the 1% annual chance flood. Base elevations of 8 feet determined. National Flood Insurance Community Panel Number 12087C1378K, effective date February 18, 2005. A copy of the flood map is presented on the following page. Environmental Study: An environmental study was not provided. This appraisal report is based on the assumption that no conditions exist that would adversely affect the utilization or marketability of the property. LO 27 SLACK JOHNSTON Packet Pg. 2197 0.4.d Flood Map qmp p�t5 r ng 5L� �$ e�j a2 a 4. `� 3�3'•��^m a E m W S3p y j $S S E d m a M'8 4 E 4 4 a w 1 gsE m EQ �Em�� o °E' `4 ,x;E ����e _ rNE F .4,'-a•E E oEm$ z_Wi� v�E p m W q m a E F as Q a w W J N max, oLL 81 T29.44'W f r 1 n(c N / i / oz MINOR", 40— � Q W vy„f„�,„ye; 1 K W I ; Y"�i�d�VY�"" ➢% �fll� �� � rN�11,ro, f/ i �j o �. LL LO �j tp Pa$ �P W l/' �d�Nw lllJJflflY aJ �Ormcma � �e �y�/////1 CN '�1 I,,� �)r, E SEW I . {yJ'� i%/'� r/�1�� ��� �f f �F��!! ,,✓f, ��l f �j vrr rl J i ✓ `,� l�;�, ,��," Ill,', � �Jr IJ ���'��� / LL mal r/lIi lr�f ❑ / f9�119�1 r //y %%%/ �tiGI�Ely11)9�1"ll ry � � � �rl?'� ���I„' (��i�,,J�l✓'i�� o�,i%�rll"` ,,%%1'/l1i�rr$% I� '�K�lfAi /��� �I��J � o M°AB'9G�L 8 28 SLACK JOHNSTON Packet Pg. 2198 0.4.d DESCRIPTION OF THE IMPROVEMENTS The subject property consists of the Marathon Professional Center Building located at 2945-2975 Overseas Highway, Marathon, Monroe County, Florida. Marathon Professional Center is comprised of a two-story office building with surface parking. The building was constructed in 1973 and converted to 3 condominium units in 2006; however, this appraisal is based on the hypothetical condition the condominium has been dissolved. The building contains a total of approximately 5,722 square feet. The building is of concrete construction with a flat roof. The subject building is considered to 0 be in good condition, commensurate with its age and level of maintenance. Unit A, is located on the ground floor and contains approximately 2,875 square feet. Unit A is currently owner-occupied and used for professional offices (law firm). This unit is built out with good quality office finishes. The unit includes a reception area, one large office/conference room area, five executive offices, bull pen area, file storage area, small kitchenette and one restroom. Finishes include a combination of commercial grade carpet and tile flooring, painted drywall, and acoustical ceiling tiles with a combination of recessed and fluorescent lighting. Unit B includes both ground floor and second floor space. The ground floor area is approximately 1,332 square feet and the second floor is 454 square feet for a total area of 1,786 square feet. Unit B is currently owner-occupied and used for professional offices 16 (law firm). This ground floor is built out with good quality office finishes. This portion U) of the unit includes a reception area, one large office/conference room area, four executive offices, copy room, file storage area, small kitchenette and two restrooms. Finishes include a combination of commercial grade carpet and tile flooring, painted drywall, and acoustical ceiling tiles with a combination of recessed and fluorescent LO lighting. The second floor space is divided into two rooms and has one restroom. Finishes include laminate flooring and fluorescent lighting. The second floor is accessible via an exterior staircase. Unit C contains a total of 1,061 square feet. Approximately 960 square feet is occupied by a tenant and utilized as professional offices. This unit includes a reception area, conference room, one office, a small bull pen area and kitchenette. There is one restroom. Unit C includes approximately 100 square feet of storage space currently utilized by one of the property owners. 29 SLACK JOHNSTON Packet Pg. 2199 0.4.d Parking for the condominium building is unassigned, surface parking. There appear to be about 28 spaces available. It should be noted, some of the spaces are poorly marked and may be located in the right-of-way of Overseas Highway. The subject project was constructed in 1973 with an actual age of 46 years. The building is considered to be in good condition. We have estimated an effective age of 20 years, commensurate with the level of maintenance at the property. The subject unit's interior is also in good condition. The unit was damaged by water during Hurricane in September, 2017. It appears that most repairs have been made with just a few minor items remaining. The condominium representatives also stated that there are not any special assessments anticipated in the near future. a �s a LO CD CD 30 SLACK JOHNSTON Packet Pg. 2200 0.4.d 5acp 1586105 6ktt 22.15 Pgtt 422 (Mld),CIS-001 3 OP AC CIS M co 1a._ — ru �l (f) rTl r yy, CD' 1 ^ � ^rn"�w r"c slz� t �ry 7 y C CdYl JN e6F.Bi.54N —i �, "•S I"�1 F. MWASiS LO �.. Wd),00'001 X.OVIOCAIN (M/d,Ob)'IS HIOC C 31 SLACK JOHNSTON. Packet Pg. 2201 0.4.d REAL ESTATE TAX ANALYSIS The subject property is located within the City of Marathon, a municipality of Monroe County, Florida, and is subject to city and county ad valorem taxes on real property. The Florida Statutes provide for assessment and collection of ad valorem taxes on real property; however, the taxes are assessed, collected, and used on the local county level. The assessment for the property is established each year as of January 1 st by the Monroe County Property Appraiser's Office at 100% of "Just Value". The tax due is computed according to annual millage rates established by Monroe County. Millage rates are the 0 amount paid to each taxing body for every $1,000 of assessed value. Taxes are payable cu in November with a 4% discount and become delinquent on April 1st. According to the Monroe County tax rolls, the 2018 real estate taxes and assessments for the subject property are as follows: Unit A: Folio Number: 00321661-000100 2018 Total Market Value: $381,996 2018 Total Assessed Value: $381,996 Real Estate Taxes: $4,194.23 U) Unit B: Folio Number: 00321661-000200 2018 Total Market Value: $171,320 0® 2018 Total Assessed Value: $171,320 Real Estate Taxes: $2,215.38 Unit C: �s Folio Number: 00321661-000300 2018 Total Market Value: $136,464 `O 2018 Total Assessed Value: $136,464 Real Estate Taxes: $1,888.00 N Totals: 2018 Total Market Value: $689,780 2018 Total Assessed Value: $689,780 Real Estate Taxes: $8,297.61 The above real estate taxes do not reflect a 4% discount for prompt payment. The County total market value for the subject property equates to $120.55 per square foot, based on 5,722 square feet. 32 SLACK JOHNSTON Packet Pn 2202 0.4.d Based on this analysis, a significant increase in the assessed value of the subject property could be expected if the property were to sell. It should be noted, the taxes stated above include non-ad valorem assessments for Marathon Stormwater and Wastewater in the amount of$1,818.65. LAND USE AND ZONING Future Land Use According to the City of Marathon Future Land Use Map, the subject property has a land use designation of Mixed Use Commercial. A copy of the land use map is presented on the following page. According to the Marathon Comprehensive Plan: ° Mixed Use Commercid The principal purpose of the Mix ed Use C ommercial future land use category is to provide far the establishment of mixed use development patterns and to recognize established mixed use development patterns within the City. This land use category is intended to provide far the 0 commercial zoning districts where various types of comet ofcial, retail, and office uses may be permitted at intensities which are consistent with the community character and the natural 0 errfirormert and to provide for various types of residential uses, including em pl oye e housing and commercial apartments. Whenever and wherever possible, the maintenance and enhancement of commercial fishing and related traditional uses such as retail, storage, and repair and .� m airtenanc e whi ch support the c oam m erci al fishing industry shall b e enc our age d within thi s land t 3 use category. Heavy industrial uses and similarly incompatible uses shall be prohibited. Lawfully e stabli she d RV parks where the majority of the RV s spaces are maintained and rented as transient spaces are also allowed within the Mix ed Use C omm ercial future land use category. The minimum lot sizefdensityhritensity identified in Table 1-1 shall not preclude the continued use or redevelopm ent of existing commercial or residential uses on a smaller lot where such lot of parcel was platted or otherwise of record prior to the adoption of this Plan. Additionally, the LO application of the height and lot coverage limitations contained in the Plan and the Land Development Regulations shall not preclude the repair or reconstruction of any structure or portion thereof which is damaged by any natural disaster or other casualty as provided for in cv Obj ective 1-3.4 and P olicies therein. §163.3177(6)(a)3.h F.S. 33 SLACK JOHNSTON Packet Pg. 2203 0.4.d Future Land Use Map PIE a 888 ca Zoning a The subject property is located within the jurisdictional boundaries of the City of Marathon and is zoned MU (Mixed Use). According to the Marathon Land Development Code, MU is as follows: LO 0, °ed-t,�se (1 ) 47onin District: The Yw�tnU zor�;4iig district is clesrgned to accor�rnr��r�vaLlate a iel'e variety of Ir- Lornmercn l a;fib) retail) sactiVales that �M ll result ir� the most eff dent and „ ttraclt';i°" e arse of the it 's Q historic bLlSiness cblistirict and the US I con r n'rior, in Lin effort to ir°ecogNu';�e the role of !_tS°P as tide ntYC 4) M airathd ,n's "Main Sty reet" Specifucail m thrs„ riistruct provides for burl uses that have a strong. pedestri„n-orlented character, Wth � r1 r drtLAre i�ri concentration of sl�er.ialt�� sl rol�l�ir�g„ trarr 7ler�t lodging,, reta l„. personal ser ice„. irestcqui, ,,ant„ CLnitLrr-ail, frsNng industry, affordable housung;„ curl entert in,mellt L,OseS in the Old Town area,, The MI.,) d rstrnct also provides, for large-,scale retail and rornrnerc[a ),.eras ner ss o pc,rtai.rn ties in otheir areas includirig-larger,_shoplDing,ceinters deed a ty S,hCdlD iirg centers, ind vi&4� rrrultt-tenant rorrnrrrer'neial buildings, Luton cIAe services and ":,ales„ rest foal rest,aurarits, affordabie housing Ines dentr„salll uses, transient lo'rigiog and ather retail establtshrnents that serve thie comrnItnity at IIairge. The,( lfll_)� district is riesigin aterl Veifthin the ?,,aIl ed- Use CornrnerdaI (M'UC) future loner`) iu se category an the FLrture li_ancl Use Map(F[e JIM). 34 SLACK JOHNSTON. Packet Pg. 2204 0.4.d Zoning Map r 1 M 1 r y� UN), ti a Based on the above information, the existing improvements are considered a legal and CO conforming use. a U) LO CD CD 35 SLACK JOHNSTON. Packet Pg. 2205 0.4.d HIGHEST AND BEST USE The following definitions are from The Dictionary of Real Estate Appraisal (Sixth Edition)published by the Appraisal Institute: Highest and Best Use is "the reasonably probable use of property that results in the highest value. The four criteria that highest and best use must meet are legal permissibility, physical possibility, financial feasibility and maximum productivity." 0 In estimating highest and best use, there are four stages of analysis: 1. Possible Use - normally dictated by physical constraints. 2. Permissible Use - what use would be permitted in consideration of existing zoning and other applicable laws governing the use of the property, as well as any deed restrictions that may exist. 3. Feasible Use - which possible and permissible uses will produce a net return to the owner of the site. 4. Maximally Productive - among feasible uses, which use will produce the highest net return to the land. To meet the tests of highest and best use, the use cannot be speculative or conjectural. It must be legal and probable. There must be a profitable demand for such use and it must return to the land the highest net return for the longest period of time. These tests have been applied to the subject property. This appraisal is based on the hypothetical condition the condominium is dissolved. In arriving at the estimate of highest and best use, the subject property was analyzed as vacant, as well as improved. As Vacant �s The highest and best use, as vacant, considers among all reasonable alternative uses, the `O 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 N vacant or can be made vacant by demolishing any improvements. Physically Possible: The site is rectangular and contains approximately 16,000 square feet. The site is level and at, or near, street grade. Although no soil report for the subject has been provided, a visit to the property, as well as existing developments in the area revealed no problems associated with the physical aspects of developing the site. The area has good access and availability to public utilities. The site has a dual corner location with frontage on Overseas Highway. The physical characteristics of the subject site support a number of possible uses within the confines of its configuration, size and location. 36 SLACK JOHNSTON Packet Pg. 2206 0.4.d Legally Permissible: Permissible or legal uses are those permitted by zoning and land use regulations. No recent title search was provided to the appraisers. It is assumed that there are no covenants, restrictions or easements that would adversely affect the use of the site to such an extent that it would negatively impact its value. The subject property has a land use designation of Mixed Use Commercial and a zoning classification of MU (Mixed Use), both permitting a variety of commercial uses. Offices and retail uses are permitted use under its current zoning classification. Feasible or Maximally Productive Use: It has been established that the subject property is of adequate size and shape to permit development. It has further been established that existing development in the area provides for potential development of commercial uses. ° In this area, commercial developments are concentrated along Overseas Highway. Based on the subject's location, its frontage along Overseas Highway and surrounding uses, the highest and best use of the subject site would be for development with an optimum size commercial development. Conclusion: Considering the location, physical characteristics and permissible uses of the property, and based upon an analysis of the site, the surrounding neighborhood, land uses and the real estate market in general, it is our opinion that the highest and best use of the subject property, as vacant, would likely be for a commercial use, likely retail or office in nature, within the constraints of zoning and market demand. U) As Improved Highest and best use, as improved considers the use that should be made of a property as it exists. An existing property should be renovated or retained, as is, so long as it LO 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. The subject site is improved with a multi-tenant office building containing approximately 5,722 square feet. The building was originally constructed in 1973 and appears to be in average condition commensurate with its age. The building is of sufficient size to meet the needs of a number of type of users and, could be easily adapted. The subject building is most suitable for occupancy by three to four tenants. Since the existing improvements have been constructed on the site, the property becomes an integral unit consisting of both land and improvements. The integration of land and buildings relates to the concept of the marginal dollar. This theory implies that the 37 SLACK JOHNSTON Packet Pg. 2207 0.4.d existing use will continue as long as the property, as improved, has a market value exceeding the market value of the site, as vacant. The highest and best use, as improved, considers the use that should be made of a property as it exists. Existing improvements should be renovated or retained as long as they contribute to the total value of the property, or until the return from the new improvement would more than offset the costs of demolishing those existing. The existing improvements are considered a legal and conforming use under existing land use and zoning. Given the building's floor plan and the quality of construction, any number of commercial uses would be considered feasible. Based upon the foregoing analysis, the current highest and best use of the property, as S improved, is for continued use of the existing improvements until such time as they no longer generate sufficient income to support a total value over and above the land, plus the cost to remove the improvements. 0 �s a LO CD CD 0 38 SLACK JOHNSTON. Packet Pg. 2208 0.4.d SUMMARY OF VALUATION AND ANALYSIS There are three generally recognized approaches considered in the valuation of real property. They include the income, sales comparison, and cost approaches. It should be noted that the appropriateness and reliability of each approach depends on the type of property being appraised, the age and condition of the improvements, if any, and the availability and quality of market data available for analysis. The income approach provides an indication of value of a property based on a conversion of anticipated benefits (net income). The method of conversion is called capitalization and is either based on a single year's income (direct capitalization), or several years' income (discounted cash flow). The sales comparison approach provides an indication of value based on sales of properties considered similar. The cost approach provides an indication of the value of a property represented by the reproduction cost of the existing improvements, less accrued depreciation, to which is added the land value. Based on the age of the subject building and the difficulty in estimating accrued depreciation„ the cost approach was not considered applicable. The appraisal process is concluded by a review and re-examination of each of the approaches to value employed. Consideration is given to the type and reliability of data used and the applicability of each approach. These factors are reconciled and a final value estimate is made. In this instance, the sales comparison and income approaches were considered applicable in the valuation of the subject property. The income approach will be followed by the sales comparison approach. ce U) INCOME APPROACH The income approach is a procedure where anticipated economic benefits to be derived from property ownership are converted into a value estimate through a capitalization LO process. The principle of "anticipation" underlying this approach acknowledges that an investor recognizes a relationship between income and asset value. The process of estimating the anticipated economic benefits from a particular property requires the N estimation of potential income, expense and net operating income, as well as the selection of the most appropriate capitalization method. The two most commonly utilized methods of processing net income into value are direct capitalization, where, if possible, an overall rate is extracted directly from market sales in which the net income is known or can be closely approximated, and the discounted cash flow method, whereby anticipated future income streams and a reversionary value are discounted to a net present value estimate. The income approach is most reliable when estimates of rental income and operating expenses, as well as the selection of the capitalization technique, are based on market 39 SLACK JOHNSTON Packet Pg. 2209 0.4.d conditions. The method of capitalization is either based on a single year's income (direct capitalization) or several years' income (discounted cash flow). In this procedure, the potential gross income (PGI) is estimated, as well as vacancy and collection loss, operating expenses, and net operating income (NOI), as well as the determination of the appropriate capitalization rate. The vacancy and collection loss is deducted from the PGI and results in effective gross income (EGI). Operating expenses are deducted from the effective gross income resulting in net operating income before debt service. The net operating income is then divided by the capitalization rate to 0 produce a value estimate by the direct capitalization method. Based on our property visit, the subject property is mostly owner-occupied. Based on our property visit, Units A and B, and a portion of Unit C, are owner-occupied. A portion of S Unit C (960 sq.ft.) is currently rented for $16.88 per square foot. According to the owner, the tenant is on a month-to-month basis. Our analysis of the subject property via application of the income approach is based on the hypothetical condition the subject property is rented at market levels. Potential Gross Income a� U) We have surveyed competitive office space within the subject area to estimate the current market rent for the subject property. Based on a review of other units rented and for rent in the subject's project, the subject property would likely be leased on a net of electric basis, if leased. Leases that are net of electric provide for the landlord to pay a majority of the unit expenses (real estate taxes, condominium fees, etc.) and the tenants to pay the electric. A summary of the rentals is presented on the next page along with a map showing their location in relation to the subject. Photographs of the rentals are presented in the addenda. �s LO CD CD 40 SLACK JOHNSTON Packet Pg. 2210 0.4.d SUMMARY OF BUILDING RENTALS YEAR UNIT SIZE! ASKING PROPERTY NO. LOCATION BUILT RENTABLE SF RENTISQ.FT. EXPENSES 1 8085 Overseas Highway 1949 750 $16.80 Net of Utilities Marathon 2 6803 Overseas Highway 1968 1,500 $15.00 NNN ($8.00) Marathon 3 6400 Overseas Highway 1981 565 $22.83 Net of Utilities Marathon 4 10005-95 Overseas Highway 1993 Varies $30.00-$34.00 Net of Utilities cm Marathon Typically 800 SF a 0 Office Rentals G8 U) CY 6 � Opppdww+,M*iw`�A �u.. s , ( LO 1 u� f jp1 01UI�I II"IIII�II fll U � �.: C14 NI Wdtk hu°p ,,, 931 E �ariapMa4.N„ ; .� 41 SLACK JOHNSTON. Packet Pn 221'1 0.4.d Discussion of Comparable Rentals Rental 1 is a one-story office building located at 8085 Overseas Highway in Marathon. The building was originally constructed in 1949 but appears to be in good condition. The building contains 2,024 square feet. The property owner recently leased 750 square feet at a rate of$16.80 per square foot, net of utilities. He indicated lease terms are negotiable on new leases. Rental 2 is a one-story office building located at 6803 Overseas Highway in Marathon. The 6,280 square foot building is currently 100% occupied. The newer rental rates in the building are in the range of $15.00 per square foot, triple net. According to the leasing agent, the pass throughs are approximately $8.00 per square foot. The effective rent equates to approximately $22.00 per square foot inclusive of utilities. The building was constructed in 1968 and is in good condition. Lease terms are typically negotiable. Rental 3 is located at 6400 Overseas Highway in Marathon. This is a two-story, multi- tenant building in good condition. According to the owner, he recently leased approximately 565 square feet at a rate of$22.83 per square foot, net of utilities. Rental 4 is located at 10095 Overseas Highway in Marathon and is known as the 100th Street Center. This is a two-story, multi-tenant building in good condition. According to the leasing agent, the property is currently 100% occupied. He stated the lease rates range from $30.00 to $34.00 per square foot, net of utilities. The units average 800 U square feet, more or less. Lease terms are typically negotiable. d ce U) Estimate of Market Rent and Potential Gross Income Based on discussion with realtors active in the Middle and Lower Keys area, demand for office space in Marathon is affected in part by the physical constraints of the island which limits the overall population and thus potential users. There is significantly more demand `O by retail and service-oriented users than users of typical office space due to the tourism- oriented nature of the island. Often times, commercial space can be used by either retail, service or office users with little or no alterations. The typical tenant and landlord in Marathon are small-scale users and owners and, as a result, lease terms are fairly straight- forward and simple. Most new leases are described as lateral moves of existing tenants within the market area. The comparable rentals provide a range of annual rent from $15.00 to $34.00 per square foot, net of utilities, gross. Based on a review of the market conditions, we have estimated the current market rent for the subject property of $25.00 per square foot for units A and B and $20.00 per square foot for Unit C. The units are individually metered for electric and the estimated rent assumes the tenant will pay the electricity. The potential gross income (PGI) for the subject property is estimated as follows: 42 SLACK JOHNSTON Packet Pg. 2212 0.4.d Potential Gross Income: Unit A: 2,875 sq.ft. X $25.00 per sq.ft. = $ 71,875 Unit B: 1,786 sq.ft. X $25.00 per sq.ft. = $ 44,650 Unit C: 1,061 sq.ft. X $20.00 per sq.ft. = $ 21,220 Total: $137,745 Rounded to: $137,750 Vacancy & Collection Loss 0 The investor is primarily interested in the cash revenues that an income property is likely to produce annually over a specified period of time, rather than what it could produce if its were always 100% occupied and all the tenants were actually paying their rent and expense reimbursement in full and on time. It is normally a prudent practice to expect some income loss, either in the form of actual vacancy, turnover, non-payment or slow payment of rent by tenants. 0 Based on discussion with realtors in the Marathon area, the market for office space is stable. Typically, units do not remain vacant for extended periods unless they are in poor condition, large spaces or overpriced. Based on this information, the subject area U) represents a stable market, with overall vacancy rates historically near 5.0%. Based on our analysis, we have estimated a stabilized vacancy rate and collection loss of 5.0% for the subject property. 16 Effective Gross Income U) a Effective gross income is equal to potential gross income less vacancy and collection loss. We have estimated the stabilized effective gross income as follows: �s Potential Gross Income: $137,750 `O Less Vacancy & Collection Loss (5%): ($ 6 890 Effective Gross Income: $130,860 Operating Expenses In our analysis of the fee simple valuation of the subject property under stabilized operations, we reviewed available expense information for the subject property and estimated other operating expenses based on industry standards, as well as conversations with realtors, unit owners and property managers. The comparable operating expenses are summarized as follows: Real Estate Taxes: As discussed in the real estate tax section of this report, we have estimated the real estate taxes, including a 4% discount for prompt payment, would be $7,970. 43 SLACK JOHNSTON Packet Pg. 2213 0.4.d Insurance: Based on the budget provided by the property owners, the insurance expense for the building is $16,900 (rounded) annually. Management/General Administrative: Based on our analysis and given the size of the property and complexity of management, we have estimated a management fee of 3.0% of effective gross income, or $3,930 ($0.69 per square foot). Repairs & Maintenance: This expense item includes charges for the maintenance of the 0 repairs and maintenance. We have estimated repairs and maintenance at $8,580 ($1.50 per square foot). Miscellaneous Expenses: The stabilized miscellaneous expense has been estimated at S $1,430 or $0.25 per square foot. Total Operating Expenses Based on the above information, the subject's operating expenses have been estimated at $38,810, or $6.78 per square foot. The operating expenses reflect an expense ratio of 29.7% of effective gross income. U) Net Operating Income (NOI) �s The net operating income is the anticipated net income that remains after all operating expenses are deducted from effective gross income (potential gross income less vacancy and collection loss). We have estimated the stabilized net operating income for the subject property as follows: Effective Gross Income: $130,860 Less Operating Expenses: - $ 38,810 `O Net Operating Income: $ 92,050 44 SLACK JOHNSTON Packet Pg. 2214 0.4.d Stabilized Income/Expense Statement 2945-2975 Overseas Highway 5,722 Sq.Ft. Total $/RSF Potential Gross Income $137,750 $24.07 Vacancy&Collection Loss 5.0% $6,890 $1.20 Effective Gross Income $130,860 $22.87 Operating Expenses % EGI Real Estate Taxes 6.1% $7,970 $1.39 Insurance 12.9% $16,900 $2.95 Management/Administrative 3.0% $3,930 $0.69 Repairs/Maintenance 6.6% $8,580 $1.50 Miscellaneous 1.1% $1,430 $0.25 cm Total Operating Expenses 29.7% $38,810 $6.78 Net Operating Income $92,050 $16.09 Direct Capitalization Method 0 Direct capitalization converts stabilized anticipated net operating income into an indicated value by the use of an overall rate of return. Capitalization rates are a relationship between the property's net income and value. The process of capitalization converts a property's income into a single value. The direct capitalization formula is as follows: .� Income /Rate = Value U The capitalization rate used in this report was obtained from a review of investment surveys for similar properties, as well as from an analysis of the comparable improved sales for which the income and expense information was provided and from which capitalization rates could be estimated. LO An overall rate of return (going-in capitalization rate) is best derived from an analysis of actual sales; however, the sales analyzed herein were purchased by owner/users and capitalization rates are not available. A survey of investor criteria reflected the following: E Source Property Type Overall Cap Rate PwC — Pt SE Florida Office Market 5.00% - 9.50%; 6.93% Average Quarter 2019 National Suburban Office Market 5.00% - 10.00%; 6.64% Average CBRE Cap Rate North America Suburban Office 6.71%; Average Survey 2nd Half 2018 45 SLACK JOHNSTON. Packet Pn 2215 0.4.d Income Approach Analysis and Conclusion — In estimating a capitalization rate for the subject property, the location of the subject property within a stable market in Marathon was taken into consideration. Based on our analysis, we have estimated an overall capitalization rate (OAR) of 7.0% in the application of the direct capitalization method. The overall rate has been applied to the estimated net operating income (NOI) which was estimated in the preceding section. Based on our analysis, the market value of the subject property has been estimated using the income approach as follows: 0 $92,050 NOI / 7.0% OAR= $1,315,000 a �s a LO N 46 SLACK JOHNSTON. Packet Pg. 2216 0.4.d SALES COMPARISON APPROACH The sales comparison approach produces an estimate of value for real estate by comparing recent sales of similar properties in the subject's surrounding or competing area. Inherent in this approach is the principle of substitution, which states that when a property is replaceable in the market, its value tends to be set at the cost of acquiring an equally desirable substitute property, assuming that no costly delay is encountered in making the substitution. 0 By analyzing sales which qualify as arm's-length transactions between willing, knowledgeable buyers and sellers, price trends can be identified from which value parameters may be extracted. Comparability in physical, locational, and economic characteristics are important criteria in evaluating the sales in relation to the subject property. The sales comparison approach begins with researching recent relevant property sales and current offerings throughout the competitive area and selecting those properties considered most similar to the subject. The sales and offerings are then analyzed, taking into consideration relevant factors of a physical, functional, or locational nature, as well as the time of sale and any change in economic conditions which may have occurred as of U) the date of valuation. The sales are then put into a meaningful unit of comparison, (i.e., price per unit or price per square foot) and adjustments to the comparable properties are made based on comparison to the subject and a conclusion of value is made. The validity of this approach is dependent upon the availability and relevancy of the data. : Based on the hypothetical condition the subject property is an office building and the condominium has been dissolved, our sales research included the collection and analysis of sales of office buildings having characteristics similar to the subject property. �s Typically, office properties sell based on units of comparison particular to the property type (e.g., price per square foot, price per unit, etc.). In this analysis, the unit of `O comparison is the sales price per square foot of building area. N The subject property is located at 2945-2975 Overseas Highway in Marathon, Florida. The building was constructed in 1973 and converted to a condominium in 2006. As stated, this analysis is based on the hypothetical condition the condominium is dissolved. The building is in good condition. It contains a total rentable area of 5,722 square feet. The site contains 16,000 square feet and is zoned for commercial uses. The land-to- building ratio is 2.80:1. 47 SLACK JOHNSTON Packet Pg. 2217 0.4.d Our research concentrated on recent sales of office buildings in the Florida Keys. Our research extended from January, 2017 to the date of value (April, 2019). A summary chart and location map are included on the following pages. Detailed information of the sales is presented in the addenda. Presented herein are five sales of office properties that occurred between December, 2017 and October, 2018. All of the sales included in our analysis are considered to represent the best available data as of the date of valuation. The buildings of the sales range in size from 2,060 square feet to 6,017 square feet, compared to the subject's building area of 0 5,722 square feet. They were originally built between 1955 and 1994, compared to the subject's year built of 1973. The sales reflected unadjusted per square foot prices from $194.81 to $558.25 of building area. a �s a LO 48 SLACK JOHNSTON. Packet Pg. 2218 LLJ Lo "IT cr) I— Co CN CD 17r �r cc CD r-- C) m cl� Lo IL CN Lo LLI C) CD C) CD C) C) C) ui C) CD C) C) CD Ci. C) Cy u) IC) CD C) C) L u) IL CD co LO cc Co I— bl� 0 ui CO cc Co Go LLI I < e- 93 3 LL W w CD m m CD m m 0 z a 6 2 z 0 1-- C'I CN Co Co Co _j Lo r- (N N LL 0 CD C) T) (D CIA Or C) m clJ CC) CD I— (D N NT (9 N U) IL z CD 0 C)C) CD 0 LO 0 0- 0 0 U) m cv C6 7 0) -El 0) IE I-- LO IE o z Ne YE2 �e E LO C14 o -0 cc G) 0 G) CA -C CO C- co m n cc m Lr� M Cc M CO M CN �r 0 b ces 7 r-- F [- d: C) m E 0) L Go L Co m tv (Y) z Cl) 49 SLACK JOHNSTON Packet Pg. 2219 0.4.d Sales Map F L 0 R, p D A MONROE I'i Flamkngo� �ck, a1, ;G gu9wlN�kid y k 0 q°"ik kk haw` 014 iii �W!v MOO/, nl"��f3�,�i�i ���ra,YuasX-kl+"oirpkd k��y. � �Y��mwn� arm;�>Lki �un��i find ,y ; rl'ksM, u^I° ow �roary�iult:l"ay" CD illaixkd N��y �_ laall � S zan, l IM l;�q alNriun�w�lr�r� f4i ati I l�ab��u,°m?�!&�kmpmra>,to��kpb��Ga��,a ,�R�'ukk�alakA- �r� 4� 9 LayIT '„,, *as DluCl KE3y w 160 ���.u, � kppfiCPfh�Mef�'b�l�l�"4`,�!' T, "c(P cc LO CD CD Cd 0 MI 5 10 15 CopyrightOantl(P}198 2012Mimmeaft Corporation androrlssuppliem Allrightsreservetl.httip ffi^Namlcrosoft.corrdsireetar Cerrtai n mapping and direction data©2012 NAVTEQ.All rights reserved.The Data for areas of Canada includes information taken with permission from Canadian authorities including:O Her M ajesty the Queen in Right of Canada,©0 user's Prir-ter for Ontario.NAVTEQ and NAVTEQ ON BOARD are trademarks of NAVTEQ.©2012 Tele Atlas NorthAmerica,Inc.All rights reserved.Tele Atlas and Tele Atlas North America are trademarks of TeleAtlas,Inc.©2012 by Applied G eogrsphic 6olu0orm All rights reservetl.Portions©Copyright 2012 py W oodall Puhlica0ons Corp.All rights reserved. 50 SLACK JOHNSTON. Packet Pg. 2220 0.4.d Discussion of the Building Sales Sale 1 is located at 90184 Overseas Highway on Plantation Key in the Village of Islamorada. This property has a corner location with frontage on three streets. This freestanding building is two stories, contains approximately 6,017 square feet and was originally built in 1973. The building is situated on a 31,500 square foot site. The land to building ratio is 5.24:1. The building was vacant at the time of sale and was previously utilized as a bank branch and was in average condition. The building is currently being converted to a restaurant use (Mangrove Mike's). 0 This property was on the market for approximately 4 months. The original asking price was $1,495,500 which was reduced to $1,250,000. The building sold in June, 2018 for $1,200,000, or $199.43 per square foot of building area. a Sale 2 is located at 87889 Overseas Highway on Plantation Key in the Village of Islamorada. This property has an interior location with frontage on two streets. This building is two stories, contains approximately 2,910 square feet and was originally built in 1994. The building is situated on a 21,000 square foot site. The land to building ratio is 7.22:1. A portion of the site is wooded. The building was previously occupied by a law firm. According to the real estate agent, at the time of sale the building was in good U) condition at the time of sale. This property was on the market for approximately six months. The original asking price was $999,000. The building sold in February, 2018 for $800,000 or $274.91 per square foot of building area. : U) a Sale 3 is located at 87899 Overseas Highway on Plantation Key in the Village of Islamorada. This property has a corner location with frontage on three streets. This building is one story, contains approximately 4,200 square feet and was originally built inLO 1985. The building is situated on a 12,000 square foot site. The land to building ratio is 2.86:1. The building was previously occupied by medical equipment supplier and is currently occupied by a roofing company. According to the real estate agent, at the time of sale the building was in average condition. This property was on the market for less than a month. The original asking price was $980,000. The building sold in December, 2017 for $860,000 or $204.76 per square foot of building area. Sale 4 is located at 3015 Overseas Highway in Marathon. This building is located adjacent to the subject property. This property has a corner location with frontage on two streets. This building is one story, contains approximately 3,850 square feet and was originally built in 1963. The building is situated on a 8,700 square foot site. The land to building ratio is 2.26:1. The building was previously occupied by a local newspaper and 51 SLACK JOHNSTON. Packet Pg. 2221 0.4.d was purchased by Monroe County. At the time of sale, the building was in average condition. The building sold in October, 2018 for $750,000 or $194.81 per square foot of building area. Sale 5 is located at 11287 Overseas Highway in Marathon. This property has an interior location with frontage on one street; however, it has approximately 50 feet of frontage on a navigable canal. The building is one story and contains 2,060 square feet. It was originally constructed in 1955. The building is situated on a 10,000 square foot site. The land to building ratio is 4.85:1. The building was reported to be in good condition at the 0 time of sale. This property sold in August, 2018 for $1,150,000 or $558.25 per square foot of building area. Adjustment Factors a Property characteristics and sale terms considered in our analysis are financing, changes in market conditions, conditions of sale, size, location, topography, zoning and size. Each of these items has been analyzed and compared to the subject property and are discussed on the following paragraphs. Financing: The sales were cash to the seller transactions, with typical terms of purchase U) for the subject market and no adjustments for financing are warranted. Terms of Sale: All of the properties were considered sold as arm's length transactions; U therefore, no adjustments are required. U) Time/Market Conditions: As noted, our research for comparable building sales extended from January, 2017 to the date of valuation (April, 2019). The sales presented herein transpired between December, 2017 and October, 2018. The sales are reflective of market conditions and no adjustments are required for changes in market condition/time. LO Building Size: The subject building contains approximately 5,722 square feet of rentable area. The sales presented herein contain from 2,060 square feet to 6,017 square feet of rentable area. The sales do not reflect a difference in price based on size; therefore, no adjustments are considered to be required. Building Age/Condition: The subject building was originally constructed in 1973. building is in overall good condition. The buildings of the comparable sales were originally built between 1955 and 1994. The overall age/condition of Sales 1, 3 and 4 are considered generally inferior to the subject's and warrant upward adjustment. Sales 2 and 5 are considered similar in condition and are not considered to require adjustment for this factor. Land-to-Building Ratio: A site's land-to-building ratio indicates the quantity of land area relative to the area of the building improvement on the site. Within normal market 52 SLACK JOHNSTON Packet Pg. 2222 0.4.d parameters, a higher land-to-building ratio indicates more available land for parking or other requirements and the possibility of future building expansion on the site. The subject's land-to-building ratio is 2.80:1, based on a building area of 5,722 square feet. The sales reflect land-to-building ratios from 2.26:1 to 7.22:1. The land-to-building ratios of Sales 3 and 4 are considered generally similar to the subject's ratio; therefore, no adjustment is considered to be required. Sales 1, 2 and 5 with larger land-to-building ratios, warrant downward adjustments for their higher land-to-building ratios. Location: The subject property is located in the Florida Keys in the City of Marathon, a municipality of Monroe County. The overall locations of the sales are considered generally similar to the subject's location; therefore, no adjustments are required. The subject property does front on a canal. Sales 1 through 4 do not have waterfrontage and warrant upward adjustment. Sale 5 has similar water frontage. Analysis and Conclusions Based on the above, the sales reflected the following adjustments: No. 1 2 3 4 5 Sale Date Jun-18 Feb-18 Dec-17 Oct-18 Aug-18 Price/Sq.Ft. $199.43 $274.91 $204.76 $194.81 $558.25 Financing — _ _ _ _ Terms of Sale — _ _ _ _ Time — — — — — Size — _ _ _ _ Age/Condition + _ + + _ L/B - - — — - Ratio/Parking `O Location + + + + _ N Overall + - + + - Equal reliance has been placed on the six sales. We have estimated the market value of the subject property to be within the range of$225.00 to $250.00 per square foot, which is calculated as follows: 5,722 Square Feet x $225.00 Per Square Foot= $1,287,450 5,722 Square Feet x $250.00 Per Square Foot= $1,430,500 Rounded: $1,350,000 53 SLACK JOHNSTON Packet Pg. 2223 0.4.d RECONCILIATION AND FINAL VALUE ESTIMATE The purpose of this appraisal is to provide an estimate of the market value of the fee simple interest in the subject property, in its as is" condition, as of the date of valuation. The building was constructed in 1973 and converted to 3 condominium units in 2006. The scope of this assignment is based on the hypothetical condition the condominium has been dissolved and the property is being appraised in its entirety. In this analysis, we have used the income and sales comparison approaches to value to estimate the market value of the property. Based on the age of the subject building and the difficulty in estimating accrued depreciation, the cost approach was not considered applicable. In the preceding sections of this report, indications of value for the property, based on the two appraisal approaches indicated the following values: a Income Approach: $1,315,000 Sales Comparison: $1,350,000 The income is based on the principle of anticipation concerning market rent and net operating income. Within the income approach, the income and expense estimates utilized were supported by a recent survey of competitive buildings in the subject market area. Based on the scope of this appraisal, we utilized the direct capitalization method. The conclusions made concerning market rent, occupancy, expenses, capitalization rates, etc., are considered realistic in view of current market conditions. C The sales comparison approach tends to be relied upon more heavily by purchasers of U) owner/user properties. The reliability of this approach is good when there are recent sales of similar properties on which to base a comparison. Several recent sales involving similar office properties were researched for use in the sales comparison approach. Our analysis required consideration of differing property characteristics, as compared with LO those of the property being appraised. Most of the comparable sales are owner users. Based on our research, owner users place most reliance on comparable sales when making purchase decisions. Given the quality of the data applied, this approach is considered a reliable indicator of the subject's market value. In determining final value estimate, most reliance was placed on the sales comparison approach to arrive at our estimate of market value. Based on our investigation and analysis, we have formed the opinion that the market value of the fee simple interest in the subject property in its "as is" condition, as of April 24, 2019, was as follows: ONE MILLION THREE HUNDRED FIFTY THOUSAND DOLLARS ($1,350,000). 54 SLACK JOHNSTON. Packet Pg. 2224 0.4.d ADDENDUM A— Photographs of the Subject Property i d rd� v � 4 ri �✓/uall!!,��i�(rlw! roir u� F err �� ;% �S ��ry emu;., i rr ...., i View of subject property from Overseas Highway. M Intl r ,X tO // �f✓,i / vij i� /i// ivi/ � �%�i�""v��r4da✓a✓FN, efi� irrK vvv��l��� /% � mu; �w View of waterfrontage on southern boundary of subject site. 55 SLACK JOHNSTON. Packet Pg. 2225 0.4.d Photographs of the Subject Property a r i% l � //,�r�0/ � i,., �rig„ ,,,,/„✓r , .�� //���i� � ,,/�� i �/� f��i�rr-,v/ al�i it �� �r, ,�>�� �r�f ✓ � �. ��1 ��Y, i, it%/�♦' � of,�f,i /!������ 7 View of western elevation of subject property from Overseas Highway. LO , m re CD i M W w CHI �Ao � ,i)r�fyyyl! my�i71 CD , CD �� %/ %�///��///,i ,,,�i /rr�/r/�f/1/sir!/(//��r uw✓1��r,�l r' � i � ��������� /lV/f�iGr�� i�������II,Y t �r,.✓n,,, �u�„ ate` E View of eastern elevation of subject property. 56 SLACK JOHNSTON. Packet Pg. 2226 0.4.d Photographs of the Subject Property ff , j, II I I I �I Unit A reception area. �s LO CD CD J I N r 0 s � Unit A conference room. 57 SLACK JOHNSTON. Packet Pg. 2227 0.4.d Photographs of the Subject Property u as Unit A bull pen area. �s CD CD era CD I uuuiVi N 0 Unit A executive office. 58 SLACK JOHNSTON. Packet Pg. 2228 0.4.d Photographs of the Subject Property I umul 11��Iil,mlu�V�VI�IY�� IIY4 � � iououuum 'i lull i uuu I �W a Unit B reception area. �i�II�V ma' j99�Jd(f0Y � �����l�lfl(Iflr � ,rV � r'V ill� I IiVI l i I i i LC8 CD CD ���II YI a pl����po� quuull N I E e y � 1 i Unit B conference room. 59 SLACK JOHNSTON. Packet Pg. 2229 O.4.d Photographs of the Subject Property � i rid i Unit B kitchenette. u�`I �Ud°EdI+VM+dVrrr, ��/ �(11J1I n�"////l r(l0/1���eilU(I, fIIA % % r ; 0 /i CD CD Unit B executive office. 60 SLACK JOHNSTON. Packet Pg. 2230 0.4.d Photographs of the Subject Property 1 i a® a Unit B second floor space. 0 I / LO CD CD /t Unit B second floor space. 61 SLACK JOHNSTON Packet Pg. 2231 0.4.d Photographs of the Subject Property ME m. uuuu uu rr r Il/ � ri�1y �rr%Jffj�1Y F f �I I�Girri r QS u U Gg Unit C exterior entrance. ° CD �ar rCD N f% 0 Unit C typical office finishes. 62 SLACK JOHNSTON. Packet Pg. 2232 0.4.d Photographs of the Subject Property Unit C conference room. U) a cas era CD CD �II r 0 Unit C office. 63 SLACK JOHNSTON. Packet Pg. 2233 0.4.d ADDENDUM B—Comparable Sales BUILDING SALE 1 i 431490 11 i a u � �/i �l it f /N/ i a 0 16 43 15'00 f. 2 uu, %f ���� r 30 �µ 16 Type: Freestanding Commercial Building a U) Location: 90184 Overseas Highway, Plantation Key, Islamorada, Florida Legal Description: a bats 1„2,3,26,77„.and 28 in Block 17 ol'PLAN T A T ION 1'Y C'CILC7N'Y,G'lRST � AT717T`1"QQ')N,according to the flat thercof,as recorded in Plat Book 4,on page 4, C14 of the Ta aalatic Records of Mt)"NRO (..',0.N T Y, "lcarial.a• 1`t)OFT"HER W1114 as perpetual easement for drainage over and ~across the faaltowwing described property: ca Lots 4 in Block 17 of PLANTATION K F" (,',O1,(")N Y, FIRST r'wDD1'f"TC1'N, according to the Plat khercof,as recorded in Plat Book 4,on page 4,of the Public Records of MC)NROE C,OUtJ`11Y,1,'lerriri a. Parcel ID: 00431870-000000 Sales Information: Grantor Branch Banking and Trust Company Grantee Rentals, LLC 64 SLACK JOHNSTON Packet Pg. 2234 0.4.d Date of Sale June, 2018 ORB/Page 2913/270 Sales Price $1,200,000 Terms of Sale Cash to Seller. Unit Price: $199.43 Per Square Foot of Building Area Marketing Time 4 months Prior Sale None five years prior Physical Description: Land Area 31,500 Square Feet Building Area 6,017 Square Feet Land-to-Building Ratio 5.24:1 � Year Built 1973 No. Stories 2 Condition Average Parking 30 spaces, more or less Zoning: VC (Village Center); Islamorada Comments: a� U) This building was previously a bank branch and is in the process of being renovated for use as a restaurant and bar. �s era i p ff 65 SLACK JOHNSTON Packet Pg. 2235 0.4.d BUILDING SALE 2 7 7 V,I h�wWt ✓lid,+/ ��/ I �� ��// ��m e Type: Freestanding Commercial Building a U) Location: 87889 Overseas Highway, Plantation Key, Islamorada, Florida Legal Description: Lots 12, 13, 14 and the North 1/2 of Lot 15, Block 3, LO PLANTATION BEACH, according to the Plat thereof, as recorded in Plat Book 2, at Page 76, of the N Public Records of Monroe County, Florida. Parcel ID: 00413140-000000 Sales Information: Grantor Silver Paws of the Keys, LLC Grantee CBT Construction and Development, Inc. Date of Sale February, 2018 ORB/Page 2891/770 Sales Price $800,000 Terms of Sale Cash to Seller. 66 SLACK JOHNSTON Packet Pg. 2236 O.4.d Unit Price: $274.91 Per Square Foot of Building Area Marketing Time Approximately 6 months Prior Sale None five years prior Physical Description: Land Area 21,000 Square Feet Building Area 2,910 Square Feet Land-to-Building Ratio 7.22:1 Year Built 1994 0 No. Stories 2 Condition Good Parking Adequate Zoning: HC (Highway Commercial); Islamorada a Comments: 0 This is a metal building with stucco exterior. The building was occupied by a law office at the time of sale. This property includes adjacent, wooded lots. U) i a LO 67 SLACK JOHNSTON Packet Pg. 2237 0.4.d BUILDING SALE 3 l � Oor i ✓��/i,n �1,� o,. j /, r ,� r , Type: Freestanding Commercial Building �s Location: 87899 Overseas Highway, Plantation Key, Islamorada, Florida Legal Description: Lots 1 and 2, Block 3, PLANTATION BEACH, according to the Plat thereof, as recorded in Plat Book 2, at Page 76, of the Public Records of Monroe LO County, Florida. N Parcel ID: 00413060-000000 Sales Information: Grantor Coral Medical Equipment& Supply, Inc. Grantee Lindholm Enterprises, LLC Date of Sale December, 2017 ORB/Page 2883/672 Sales Price $860,000 Terms of Sale Cash to Seller. Unit Price: $204.76 Per Square Foot of Building Area Marketing Time Approximately 1 month 68 SLACK JOHNSTON Packet Pg. 2238 O.4.d Prior Sale August 2013; $630,000 Physical Description: Land Area 12,000 Square Feet Building Area 4,200 Square Feet Land-to-Building Ratio 2.86:1 Year Built 1985 No. Stories 1 Condition Average 0 Parking Adequate Zoning: HC (Highway Commercial); Islamorada Comments: a This was purchased for an owner/user. 0 U) 1%1; C ii/ate 4 U) LO N 69 SLACK JOHNSTON. M Packet Pn 9939 0.4.d BUILDING SALE 4 ' ul � �✓ip�iiii /i//i�r� � ' �;oiia �idfuxrwr„. , t;,, : U. dVI!�m�uwlM..- ��lIN1'�'%�%%%�"' Aj IN s i dll I as Type: Freestanding Office Building Location: 3015 Overseas Highway, Marathon, Florida �s Legal Description: The northerly 87 feet of Lot A-1 and the northerly 87 feet of Lot B-1 of SOMBRERO SUBDIVISION #6, as recorded in Plat Book 2, Page 93, of the public records of Monroe County, Florida. Parcel ID: 00321700-000000 LO Sales Information: N Grantor Keynoter Publishing Co. Inc. Grantee Monroe County E Date of Sale October, 2018 ORB/Page 2933/1983 Sales Price $750,000 Terms of Sale Cash to Seller. Unit Price: $194.81 Per Square Foot of Building Area Marketing Time Approximately 5 to 6 months Prior Sale None three years prior 70 SLACK JOHNSTON. Packet Pg. 2240 O.4.d Physical Description: Land Area 8,700 Square Feet Building Area 3,850 Square Feet Land-to-Building Ratio 2.26:1 Year Built 1963 No. Stories 1 Condition Average Parking Adequate Zoning: MU (Mixed Use); Marathon Comments: This was purchased by Monroe County for establishment of new County offices. m � I II �rVll a /iir//,;,,, iii s ��� ,,,,. i.<��/ ,.o/ /.•, ii,/ii/,�...� i�aii//%�//// „/r/i� ///, /L y/�i � r% � /� LO �r/ � �% �l� � �/aia / �.. /iii/�i,,,, �,,,, //// a/ i. ✓.�� �i��' �i // ��� �/, � r/ � ✓ iii , � e, � ,y �71 SLACK JOHNSTON Packet Pg. 2241 0.4.d BUILDING SALE 5 W V000, e, uuuuuuuu° ' III 9 rrf r M //,io/ / arKNinryowui�iwN�lnrf� SJ %//, �,//iimrdw 4 dry " h a _� V � 4 r /G IN Type: Freestanding Office Building Location: 11287 Overseas Highway, Marathon, Florida Legal Description: Lots 100, 101, 102 and 103, Little Venice, according LO to the plat thereof as recorded in Plat Book 3, Page 7, Public Records of Monroe County, Florida. Parcel ID: 00345120-000000 E Sales Information: Grantor Claude Halioua Grantee Florida Keys Real Estate Company, LLC Date of Sale October, 2018 ORB/Page 2933/1983 Sales Price $1,150,000 Terms of Sale Cash to Seller. Unit Price: $558.25 Per Square Foot of Building Area 72 SLACK JOHNSTON Packet Pg. 2242 O.4.d Marketing Time Purchased by tenant Prior Sale None three years prior Physical Description: Land Area 10,000 Square Feet Building Area 2,060 Square Feet Land-to-Building Ratio 4.85:1 Year Built 1955 No. Stories 1 0 Condition Good Parking Adequate Zoning: MU (Mixed Use); Marathon Comments: This was purchased by a tenant. The building was flooded by Hurricane Irma and the buyer redid the interior. a® e. rr% f ,- � , CIO LO J �/d9INX+WG"'`��`���eRO%l!&fir l��;U1J)kri�7rrJr� ri`^N/1`i aaKr r✓lrrJlJY�r 1���l�i io / rlr,i ,�/„�i �rl /'�%/% U/17�� �"""s+1'�"Y'"7�M� hrp rn,��mr,�,'.. w/ a''is '7'� �` /j �/i6y�r%/%o�,rRl�ey/,iN � /�rf �1 xe S/� „,%ib r� �1rf/�a C'el _.. ... ..... ,,,✓.� „„�I��YG�(%!�Ytl,4�@W➢6;J�V'fNiiilNNGS96'N69hiY�A'PoK9�2D' i'f�Ni�, 'lIN7NJ��I,,S'W:fiorPl7SKP,�9UNVGN%1NfON1�17�hE'�iN�N7�NP', Jr,7�%1fiwENW '9N��%59�J^�;7VjyiY� 73 SLACK JOHNSTON Packet Pn 2243 0.4.d RENTAL 1 — 8085 Overseas Highway W ran%vl �ll, � ✓ �,� i � r yan as RENTAL 2 — 6803 Overseas Highway Lo CD CD f( N � l 1 74 SLACK JOHNSTON. Packet Pn 2244 0.4.d RENTAL 3 — 6400 Overseas Highway RENTAL 4 — 10005-95 Overseas Highway Lo CD CD 1, E r /O/ 75 SLACK JOHNSTON. Packet Pg. 2245 0.4.d ADDENDUM C — Qualifications of the Appraiser ANDREW H. MAGENHEIMER, MAI EDUCATION: Bachelor's Degree, The University of the South, Sewanee, Tennessee, 1986 EXPERIENCE: Over thirty years in the field of real estate, involved in various forms of consultation, appraisal, economic research and market analysis. June, 1997 to Present, Principal, Slack, Johnston & Magenheimer, Inc. August, 1991 to May, 1997, Senior Appraiser, Slack& Johnston, Inc. February, 1987 to July, 1991, Staff Appraiser, Dixon&Friedman, Inc. 0 GENERAL APPRAISAL EXPERIENCE: Appraisals - Vacant land, environmentally sensitive land, aviation facilities, industrial facilities, shopping centers, office buildings, apartment buildings, residential developments and single-family residences. Consulting - Economic research, market analysis, feasibility analysis and ad valorem real estate tax assessment appeals pertaining to industrial, commercial and residential properties. �s Litigation Support — Appraisals and consulting, including expert testimony, concerning various property types. AFFILIATIONS: (n Licensed Florida Real Estate Broker , LO Florida State-Certified General Real Estate Appraiser, Certification No. RZ 1073 N Appraisal Institute Member, MAI, Certificate Number 10133, Continuing Education Completed E 2002 President of the South Florida Chapter of the Appraisal Institute Member of the Miami Board of Realtors Member of the Florida Keys Board of Realtors Corporate Member of Florida Airport Council (FAC) 76 SLACK JOHNSTON. Packet Pg. 2246 0.4.e SLACK JOHNSTON MA ENHEIMER REAL ESTATE APPRAISERS&CONSULTANTS 7245 S.W.87TH AVENUE,SUITE 300 Mum,FLORIDA 33173 a APPRAISAL OF REAL PROPERTY UNIT A OF MARATHON PROFESSIONAL CENTER, A CONDOMINIUM 2975 OVERSEAS HIGHWAY MARATHON, MONROE COUNTY, FLORIDA 33050 as U) APPRAISAL REPORT SJM FILE: 19623. 1 �s Lo N PREPARED FOR MR. KEVIN G. WILSON, P.E. ASSISTANT COUNTY ADMINISTRATOR MONROE COUNTY 102050 OVERSEAS HIGHWAY KEY LARGO, FL 33037 1 Packet Pg. 2247 0.4.e SLACK JOHNSTON MAGENHEIMER REAL EST^TE APPRAISERS CONSULTANTS ANDREW H.MAGENHEIMER,MAI THEODORE W.SLACK,MAI CERT.GEN.RZ1073 (1902-1992) THEODORE C.SLACK,MAI (1931-2015) SUE BARRETT SLACK,MAI (RE-nRED) May 31, 2019 Mr. Kevin G. Wilson, P.E. Assistant County Administrator Monroe County 0 102050 Overseas Highway Key Largo, Florida 33037 RE: Appraisal of Real Property, Unit A of Marathon Professional Center, A Condominium, 2975 Overseas Highway, Marathon, Monroe County, Florida 33050 SJM File: 19623-A 0 Dear Mr. Wilson: At your request, we have prepared an appraisal of the above referenced property. The U) purpose of the appraisal is to provide an estimate of the market value of the fee simple 2- interest in the subject property in its "as is" condition as of April 24, 2019, the effective IL date of the appraisal and visit to the subject property. a The subject property is an office condominium unit located within the Marathon Professional Center, a Condominium, at 2975 Overseas Highway in Marathon, Monroe County, Florida. Marathon Professional Center is comprised of a two-story office , building with surface parking. The building was constructed in 1973 and converted to 3 condominium units in 2006. The building contains a total of approximately 5,722 square feet. Marathon Professional Center is situated on a mostly rectangular site that has a C14 future land use designation of Mixed Use Commercial and a zoning classification of MU (Mixed Use). The site contains approximately 16,000 square feet or 0.37 acre. Site E improvements include asphalt-paved surface parking and minimal landscaping. The site has approximately 60 feet of frontage on a navigable canal. The subject, Unit A, contains approximately 2,875 square feet and is located on the ground floor of the condominium building. Unit A is currently occupied by a law firm and built out as professional office space. It is built out with good quality office finishes. The condominium appears to have adequate, unassigned parking. Ownership of the unit is held by CMW Office Building, LLC. The scope of this appraisal is to estimate the fee simple market value of the subject property and we did not review or consider any leases. 2 SLACK,JOHNSTON&MAGENHEIMER,INC. 7245 S.W.87TH AVENUE,SUITE 300,MIAMI,FLORIDA 33173 TELEPHONE(305)670.21 1 1 • EMAIL: SJMIAMI@AOL.COM Packet Pg. 2248 0.4.e Mr. Kevin Wilson May 31, 2019 The appraisal report states our opinion of market value, subject to various assumptions and limiting conditions contained in this report. The property visit and analyses forming the basis of our valuation have been performed by the undersigned. The appraisal has been prepared in accordance with the Uniform Standards of Professional Appraisal Practice (USPAP), as adopted by the Appraisal Standards Board of the Appraisal Foundation. Based on our investigation and analysis, we have formed the opinion that the market value of the fee simple interest in the subject property in its "as is" condition, as of April 24, 2019, was as follows: SEVEN HUNDRED THOUSAND DOLLARS ($700,000). 0 The following report summarizes the results of our investigation and the explanation of the approaches to value. Additional support is retained in the appraisers' file. a� U) Respectfully submitted, 2- SLACK, JOHNSTON & MAGENHEIMER, INC. 490WIV— Vd Andrew H. Magenheimer, MAI , CERT.GEN.RZ1073 LO cv 3 SLACR JOHNSTON Packet Pg. 2249 0.4.e Table of Contents SUMMARY OF SALIENT FACTS AND CONCLUSIONS ............................................5 CERTIFICATION...............................................................................................................7 ASSUMPTIONS AND LIMITING CONDITIONS...........................................................8 IDENTIFICATION OF THE PROPERTY....................................................................... I I LEGAL DESCRIPTION................................................................................................... 12 OWNERSHIP AND HISTORY OF THE PROPERTY ................................................... 12 PURPOSE, INTENDED USE AND DATE OF THE APPRAISAL................................ 13 SCOPE OF THE APPRAISAL......................................................................................... 13 DEFINITION OF VALUE AND INTEREST APPRAISED ........................................... 15 EXPOSURE AND MARKETING TIME......................................................................... 16 NEIGHBORHOOD ANALYSIS ...................................................................................... 17 DESCRIPTION OF THE SITE.........................................................................................25 DESCRIPTION OF THE IMPROVEMENTS..................................................................28 REAL ESTATE TAX ANALYSIS...................................................................................30 LANDUSE AND ZONING .............................................................................................31 HIGHEST AND BEST USE.............................................................................................34 SUMMARY OF VALUATION AND ANALYSIS .........................................................36 SALES COMPARISON APPROACH .............................................................................44 RECONCILIATION AND FINAL VALUE ESTIMATE ...............................................49 ADDENDUM A — Photographs of the Subject Property..................................................50 ADDENDUM B —Photographs of the Comparable Sales and Rentals............................54 ADDENDUM C — Qualifications of the Appraiser ..........................................................59 LO 4 SLACR JOHNSTON Packet Pg. 2250 0.4.e SUMMARY OF SALIENT FACTS AND CONCLUSIONS Property Appraised: Unit A Marathon Professional Center, a Condominium 2975 Overseas Highway Marathon, Florida 33050 Property Type: Office condominium unit Folio Number: 00321661-000100 2018 Assessment Information: Total Market Value: $381,996 Real Estate Taxes: $4,194.23 Ownership: CMW Office Building, LLC 2975 Overseas Highway Marathon, FL 33050 Interest Appraised: Fee Simple U) Improvements: Unit A contains 2,875 square feet. The unit is built out 2- with good quality office finishes. Land Use: Mixed Use Commercial; City of Marathon Zoning: MU (Mixed Use); City of Marathon �s Date of Valuation: April 24, 2019 `O Date of Report: May 31, 2019 "! Market Value Indications: Sales Comparison Approach: $700,000 Income Approach: $689,000 Final Value Estimate: $700,000 5 SLACK ,JOHNSTON Nd Packet Pa. 2251 -- i 0.4.e AERIAL PHOTOGRAPH OF SUBJECT CONDOMINIUM '� h49YiNl✓fi ,n;� ro a � �� �t �, %��f//��j'��%/ri/!rii,� 7 ��% a %///�i i/ail i /' N uulululupuplulull ills a i.i, / IIII IIIIL, li luillillillillillill iuimoillllllllllllllllll -„�i ✓ .` ii �r,�/// /p� /� � � r%�%i / � TSB r- / / 4 For illustrative purposes, not to scale. e e qb E 6 SLACK ,JOHNSTON Nd Packet Pa. 2252 -- i 0.4.e CERTIFICATION 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 interest in the properties that are the subject of this report and 0 no personal interest with respect to the parties involved. we have no bias with respect to the properties that are the subject of this report or to the parties involved with this assignment. CD our engagement in this assignment was not contingent upon developing or reporting 22 a� predetermined results. our compensation for completing this assignment is not contingent upon the development or c reporting of a predetermined value or direction in value that favors the cause of the client, the amount of the value opinion, the attainment of a stipulated result, or the occurrence of a subsequent event directly related to the intended use of this appraisal. as the reported analyses, opinions, and conclusions were developed, and this report has been in conformity requirements of the Code of Professional Ethics and Standards prepared, Y with the re u q � of Professional Appraisal Practice of the Appraisal Institute, which include the Uniform Standards of Professional Appraisal Practice (USPAP). a the undersigned has made a visit to the property that is the subject of this report. Kimberly Magenheimer, CERT. GEN.RZ1386,provided significant real property appraisal assistance to the person signing this certification. LO the use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representatives. we have not performed any services regarding the subject property within the prior three years. E as of the date of this report, Andrew H. Magenheimer, has completed the continuing education program of Designated Members of the Appraisal Institute. SLACK, JOHNSTON& MAGENHEIMER, INC. 44W41� -.. Andrew H. Magenheimer, MAI CERT.GEN.RZ1073 7 SLACK .JOHNSTON Nd Packet Pa. 2253 -- i 0.4.e ASSUMPTIONS AND LIMITING CONDITIONS The appraisal is subject to the following assumptions and limiting conditions: 1. No responsibility is assumed for the legal description or for matters including legal or title considerations. Title to the property is assumed to be good and marketable unless otherwise stated. 2. No legal opinion related to a title search was provided and all existing liens and encumbrances, including deed restrictions and developers' agreements, have not been investigated unless otherwise stated. The property is appraised as though free and clear. 3. Responsible ownership and competent property management are assumed. 4. The information furnished by others has been gathered from sources deemed to be reliable, however, no warranty is given for its accuracy. 5. All engineering and surveying is assumed to be correct. Any sketches, plats, or drawings 0 included in this report are included to assist the reader in visualizing the property. We have made no survey of the property, and assume no responsibility in connection with such matters. as 6. It is assumed that there are no hidden or inapparent conditions of the property, subsoil, or structures that render it more or less valuable. No responsibility is assumed for unusual soil conditions and no opinion as to these matters is to be inferred or construed from the attached report other than those specifically stated in the report. Unless stated otherwise, the soil conditions of the subject property are assumed to be adequate to support development utilizing conventional construction techniques. We recommend the client obtain an opinion from a competent engineering firm. 7. It is assumed that there is full compliance with all applicable federal, state, and local LO environmental regulations and laws unless noncompliance is stated, defined, and considered in the appraisal report. N 8. It is assumed that all applicable zoning and use regulations and restrictions have been complied with, unless a nonconformity has been stated, defined, and considered in the appraisal report. 9. It is assumed that all required licenses, certificates of occupancy, consents, or other legislative or administrative authority from any local, state, or national government or private entity or organization have been or can be obtained or renewed for any use on which the value estimate contained in this report is based. 10. It is assumed that the utilization of the land and any improvements is within the boundaries or property lines of the property described and that there is no encroachment or trespass unless noted in the report. 8 SLACK ,JOHNSTON Nd Packet Pa. 2254 -- i 0.4.e 11. Any proposed or partially completed improvements included in this report are assumed to be completed in accordance with approved plans and specifications and in a workmanlike manner. 12. Our estimates of future values were formulated based upon market conditions as of the date of appraisal, considerate of future projections concerning supply and demand. The appraiser has no responsibility for significant events that alter market conditions subsequent to the effective date or dates of appraisal. 13. This study is to be used in whole and not in part. No part of it shall be used in c conjunction with any other appraisal. Publication of this report or any portion thereof without the written consent of the appraiser is not permitted. 14. The appraiser, by reason of this report, is not required to give further consultation, S testimony, or be in attendance in court with reference to the property in question unless arrangements have been previously made. 0 15. Neither all, nor any part of the contents of this report (especially any conclusions as to value, the identity of the appraiser, or the firm with which the appraiser is connected), shall be disseminated to the public through advertising, public relations, news, sales, or other media without the written consent and approval of the appraiser. The use of this a� report in any public offering or syndication document is specifically prohibited. c� 16. Unless otherwise stated in this report, the existence of hazardous substances, including without limitation asbestos, polychlorinated biphenyls, petroleum leakage, or agricultural chemicals, which may or may not be present on the property, or other environmental conditions, were not called to the attention of, 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 such substances or conditions. If the presence of such substances, LO such as asbestos, urea formaldehyde foam insulation, or other hazardous substances or M environmental conditions, may affect the value of the property, the value estimated is CD predicated on the assumption that there is no such condition on or in the property or in such proximity thereto that it would cause a loss in value. No responsibility is assumed 0 E for any such conditions, nor for any expertise or engineering knowledge required to discover them. It is recommended that the client retain an expert in this field, if needed. 17. Section 404.056(8) of the Florida Statutes requires that prior to or at the time a rental agreement or contract for any building is executed, the following disclosure statement must be issued: "RADON GAS: is a naturally occurring gas that, when it is has accumulated in a building in sufficient quantities, may present risk to persons who are exposed to it over time. Levels of radon that exceed federal and state guidelines have been found in building in 9 SLACK ,JOHNSTON Md Packet Pa. 2255 -- i O.4.e Florida. Additional information regarding radon and radon testing may be obtained from your public health unit." It is assumed that sellers will comply with this law. 18. Disclosure of the contents of this report by the appraiser is controlled by the Appraisal Institute of which one or more signatures of this report is an MAI member and by the Florida Department of Professional Regulation, Division of Appraisal State Certification. The analysis and value conclusions, as well as non-public information about the subject property, are confidential matters and cannot be divulged to any persons other than the party for whom the report is prepared. Exceptions to this confidentiality provision are requests by committees of the Appraisal Institute or the Florida Department of Professional Regulations for peer review, and subpoenas by any court having jurisdiction to request production of the report. a 19. For valuation purposes, we have used our building area calculations. As noted, we are not architects or surveyors and it is strongly recommended a complete survey of the property be undertaken. As such, this appraisal is subject to revision if the surveyed building areas differ from our calculations. Acceptance or use of this report constitutes acceptance of the preceding conditions. U) a LO cv 0 10 SLACK ,JOHNSTON Nd Packet Pa. 2256 -- i 0.4.e IDENTIFICATION OF THE PROPERTY The subject property is an office condominium unit located within the Marathon Professional Center, a Condominium, at 2975 Overseas Highway in Marathon, Monroe County, Florida. Marathon Professional Center is comprised of a two-story office building with surface parking. The building was constructed in 1973 and converted to 3 condominium units in 2006. The building contains a total of approximately 5,722 square feet. Marathon Professional Center is situated on a mostly rectangular site that has a future land use designation of Mixed Use Commercial and a zoning classification of MU (Mixed Use). The site contains approximately 16,000 square feet or 0.37 acre. Site improvements include asphalt-paved surface parking and minimal landscaping. The site has approximately 50 feet of frontage on a navigable canal. The subject, Unit A, contains approximately 2,875 square feet and is located on the ground floor of the condominium building. Unit A is currently occupied by a law firm and built out as professional office space. It is built out with good quality office finishes. The condominium appears to have adequate, unassigned parking. The scope of this 0 appraisal is to estimate the fee simple market value of the subject property and we did not review or consider any leases. Based on a review of information in the public records, there seems to be discrepancies U) concerning the size of the units that comprise the Marathon Professional Center. As 2- such, we recommend a complete survey of the property be undertaken to include both the a. ground and second floors. The following is a summary of the building areas based on the Marathon Professional Center Condominium Documents (MPCCD), Monroe County Property Appraiser (MCPA) and our building area calculations. Marathon Professional Center- Unit Area Reconcilation LO Unit MCPA SF MPCCD SF SJM SF A 2,670 2,402 2,875 B 1st Flr 1,332 `d B 2nd Flr 454 B Total 1,332 2,896 1,786 C 1 1,061 0 1,061 Total 5,063 5,298 5,7221 MCPA - Monroe County Property Appraiser MPCCD - Marathon Professional Center Condominium Documents SJM - Slack, Johnston & Magenheimer For purposes of this appraisal, we reviewed the building plans included in the condominium documents, verified many of the measurements during our site visit and calculated the building areas accordingly. Based on a review of the MCPA information, our measurements for 1) Unit A are slightly greater than theirs and 2) we concur with the 11 SLACK .JOHNSTON Md Packet Pa. 2257 -- i 0.4.e ground floor areas of Unit B and Unit C. It appears the MCPA does not include the second floor of Unit B. Based on a review of the MPCCD, they only identify two units ("Unit A & B") and appears to transpose the numbering as compared to the other information in the public record. The MPCCD identifies "Unit A" as containing 1,364 square feet, plus 1,038 SF which appears to be the ground floor of what we believe to be Units B and C, respectively and "Unit B" as containing 2,896 square feet which appears to be what we believe to be Unit A. For valuation purposes, we have used our building area calculations. As noted, we are not architects or surveyors and it is strongly recommended a complete survey of the property be undertaken. As such, this appraisal is subject to revision if the surveyed building areas differ from our calculations. LEGAL DESCRIPTION The following legal description has been taken from a September, 2006, warranty deed recorded in ORB 2239, at Page 1664: Unit A, of MARATHON PROFESSIONAL CENTER, A CONDOMINIUM, according to the Declaration of Condominium thereof, as recorded in Official Records Book 2215, Page 389 of the Public Records of Monroe County, Florida, 2- and any amendments thereto, together with an undivided interest in the common IL elements appurtenant thereto. ° OWNERSHIP AND HISTORY OF THE PROPERTY According to the Monroe County tax roll, ownership of the subject property is currently `O held by CMW Office Building, LLC, 2975 Overseas Highway, Marathon, Florida 33050. As noted, the subject's project, Marathon Professional Center, was originally constructed "! in 1973. The property was converted to condominium ownership in 2006 by the current owners. In September, 2006 a warranty deed was recorded in ORB 2239 at Page 1664, indicating a purchase price of$281,900; however, it is our understanding this transaction was between related parties. The subject property is not currently listed for sale and we were not provided any leases encumbering the subject property. The annual condominium association fees are $11,043 or $3.84 per square foot. Based on discussion with the condominium association representative, there are no special assessments expected in the near future. 12 SLACK ,JOHNSTON Nd Packet Pa. 2258 -- i 0.4.e PURPOSE, INTENDED USE AND DATE OF THE APPRAISAL The purpose of this appraisal is to develop and report an opinion of the market value of the fee simple interest in the subject property in its "as is" condition, as of April 24, 2019. The date of the report is May 31, 2019. The intended user of this report is Monroe County. The intended use of the appraisal is to establish a basis for the potential purchase of the property by Monroe County from a willing seller. There are no other intended users or intended uses of this appraisal. 0 SCOPE OF THE APPRAISAL The scope of this appraisal report is defined by the purpose, which is to estimate the current market value of the fee simple interest in the subject property in its "as is" condition as of a current date of value. We have inspected the neighborhood and have made a recent visit to the property. Subsequent to our site visit, research was conducted in support of an estimation of the highest and best use, as of the date of valuation. The highest and best use analysis considers all physically possible, legally permissible and economically feasible uses to which the property can be put as improved. After concluding the highest and best use, the valuation methods were considered. The appraisal process can include three basic approaches to value. These are the income, sales comparison, and cost approaches. The application of these approaches is determined by the type of property being appraised, as well as the scope of the valuation assignment. The sales comparison and income approaches to value have been utilized in �s the valuation of the fee simple interest in the subject property. As the subject propertyLO consists of one single unit within a larger condominium project, with shared common elements, the cost approach is not an applicable approach to value. In the sales comparison approach, we researched comparable condominium unit sales and listings used for professional office uses. As stated, the subject property represents a single, 2,875 square foot unit within a 3-unit office condominium project. The subject unit is currently owner-occupied and used as professional offices (law firm). Our sales research focused on office condominium units in the subject's market area, Monroe County, for purposes of comparison to the subject property. The sales included in this report are considered of good quality and representative of the of the best available market data. Analysis of the selected sales included reviewing the deed and confirming sale details with one or more of the parties to the transaction, or other reliable sources, as stated herein. 13 SLACK ,JOHNSTON Nd Packet Pa. 2259 -- i O.4.e In the income approach, we researched similar rental properties concerning income and expense information. A market survey of comparable professional office spaces available for lease within the subject area was also conducted to ascertain rental rates. The data was obtained through interviews with leasing agents and property managers. The final step in our analysis is a reconciliation of the appraisal methods used. The quantity and quality of data used, and the reliability to their value indications, are the basis for the final conclusion of value. 0 a a LO CD CD 4i C 0 0 14 SLACK ,JOHNSTON Nd Packet Pa. 2260 -- i 0.4.e DEFINITION OF VALUE AND INTEREST APPRAISED The Uniform Standards of Professional Appraisal Practice (USPAP 2018-19) defines Market Value as "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 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." We have relied on the Dictionary of Real Estate Appraisal, Sixth Edition, definition of C Market Value as "the most probable price which a property should bring in a 0 competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: a 1. buyer and seller are typically motivated; 0 2. both parties are well informed or well advised, and acting in what they consider their best interests; 3. a reasonable time is allowed for exposure in the open market; U) 4. payment is made in cash in United States dollars or in terms of financial C arrangements comparable thereto; and C 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. , LO (Federal Register 77472,Volume 75,No.237,December 10,2010) cv Other pertinent definitions from the Dictionary of Real Estate Appraisal, Sixth Edition, as follows: E Fee Simple Estate is the "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." Exposure Time is "the estimated length of time to property interest being appraised would have been offered in the market prior to the hypothetical consummation of a sale at market value on the effective date of the appraisal." 15 SLACK ,JOHNSTON Nd Packet Pa. 2261 -- i 0.4.e 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 the appraisals." Condominium is a "multiunit structure, or a unit within such a structure, with a condominium form of ownership." EXPOSURE AND MARKETING TIME The normal exposure period is considered to be the most probable amount of time necessary to expose and actively market the subject property on the open market to achieve a sale at a price consistent with the market value estimate and on terms consistent with the definition of market value recited herein. The length of the exposure time is a function of several factors including price, terms, investment quality and exposure to a given market. A review of current market activity for office condominiums within Monroe County, as well as conversations with broker's active within this market, was performed in order to estimate an exposure time for the subject property. Most brokers indicated that exposure/marketing times are typically less than one year, if the property is priced realistically. 2- Investor and market surveys typically do not cover Key West or the Florida Keys (Monroe County, Florida). The PWC Real Estate Investor Survey — 1st Quarter 2019 reflects a marketing time for the Southeast Florida office market in the range of 1.0 to 6.0 months with an average of 3.3 months. Based on the marketing periods reflected by this �s survey and from the sales presented in this report, a typical exposure period for theLO subject property was estimated to be up to 12 months. We have further estimated a marketing time of up to 12 months. 16 SLACK ,JOHNSTON Nd Packet Pa. 2262 -- i 0.4.e NEIGHBORHOOD ANALYSIS The subject property is located in the Middle Keys region of Monroe County. Key West is the southernmost island in the archipelago known as the Florida Keys, a chain of over 800 subtropical islands off the southern tip of Florida's mainland. The Keys primarily consist of a network of 30 inhabited coral islands covered with tropical vegetation arching southward between the shallows of Florida Bay on the north side and a barrier reef of living coral lying in the Atlantic Ocean to the south. The islands span a distance of over 100 miles. The climate is warm year-round. Monroe County covers a total of 1,034 square miles of land area, and comprises two geographically distinct areas. The northern part of the county is at the southwestern end of the mainland of Florida, and consists primarily of a portion of the Everglades with a few inhabitable areas. The second area is the true Keys, a series of islands beginning with North Key Largo and extending southwesterly 115 miles. Key West, the end of the island chain, is located approximately 160 miles southwest of Miami, 90 miles north of Cuba, and is the southernmost point in the continental United States. Key West is also the county seat for Monroe County. a� A map of Monroe County is provided below. U) fwd U ' CL an wg 'Oddle Fox,take Sh&aides J i e Ln e „e `d N CD '! E uea� . awl -. "k Fast „ a�aaz 17 SLACK ,JOHNSTON Nd Packet Pa. 2263 -- i 0.4.e As of 2018, Monroe County was populated with an estimated 73,940 residents. The majority of the population is divided among the various areas of unincorporated Monroe County, with the largest population group in the Key West census division. The City of Key West proper comprises approximately 30% of Monroe County with a population of 24,509 in 2018. The City of Marathon had a population of 8,235 and the Village of Islamorada had a population of 5,990. The overall population in the Florida Keys has historically increased slightly each year since the 1940's; however, the 2010 census figures showed a slight decrease. The decrease is likely due to the exit of permanent residents, who were replaced by second home owners and transient residents. A decrease from 2017 to 2018 was also noted, likely due to the displacement of many residents due to Hurricane Irma in 2017. Overseas Highway, (U.S. Highway 1) is the only access from the mainland, by car, to all destinations in the Keys. It is the dominant commercial corridor throughout the county. Development along the highway includes a mixture of commercial, residential, industrial and tourist-related uses. While significant portions are zoned for commercial use, there are also many untouched tracts which have been purchased or targeted for purchase for natural preservation. a� As a result of the difficulties in gaining approvals for new development, the demand for large undeveloped tracts of land is almost non-existent in the private sector. Most new development takes place on already scarified sites or in the form of replacement of pre- 2- existing structures. Most purchases of large tracts of land are made by governmental or a. conservation groups for preservation. a Additional statistical information obtained from the Florida Legislature Office of Economic and Demographic Research is provided on the following pages. �s LO N 18 SLACK ,JOHNSTON Nd Packet Pa. 2264 -- i 0.4.e Monroe County Florida's 38th most populous county Irvla¢rlarraf�a with 0.4%of Florida's population Marathon, Key West 0 M IPopyuulatporn Housing � Census Population Monroe County Florida Housing Counts Monroe County Florida 1900 Census 63.100 9,746,961 Housing units,2000 Census 51,617 7,302,947 1990 Census 70.024 12,930 071 Occupied 35,006 6,337,929 °® %change 1900-90 23.5% 32.7% Owner-occupied 21,893 4,441,799 2000 Census 79580 15,982,824 Border occupied13,193 1,B96,130 %change 1990-00 20% 23.5% Vacant 16,531 965 018 2010 Census 73.090 18,801,332 Housing units,2010 Census 52,764 3,909,500 ®_ %change 2000-10 -82% 17.6% Occupied 32,629 7,420,802 Age Owner-occupied 18,661 4,908,979 Under 18 years of age 15.1% 21.3% Renter-occupied 14,12E 2,421,023 %65 years of age and over 17.1% 17.3% Vacant 20,135 1,560778 Race&Ethnicity 0 %VVhite alone 09.5% 75.0% Units Permitted Black or African American alone 57% 16.0% 1990 791 126,384 Hispanic or Latino(of any race) 206% 22.5% 2000 203 156,269 2010 271 38,679 Estimates and Projections 2011 135 42,360 2017 Estimate 76.880 20,484,142 2012 221 64,810 %change 2010-17 52% 9.0% 2013 179 06,752 2020 Projection based on 2017 estimate 75.300 21,526,547 2014 188 04,075 %change 2011-10 -2.1% 5.1% 2015 262 109,924 2025 Projection based on 2017 estimate 75.055 23,061,892 2016 220 116,240 %chaone 2020-25 07% 7 I% 2017 247 122719 2016 Median Age 48.0 41.6 Density Population Charactenastic• CL Language spoken at home other than Persons per square mile English Monroe County Florida 2000 711 2964 Persons aged 5 and over 23.2%+/-14% 283%+f-0.1% ate+ 2010 74.3 350.6 Place of birth 2017 782 3820 Foreign born 17.8%+/-13% 1091/.+f-0.1% Veteran status Households and FarripHouuseWds Civilian population 10 and over 114%+f-08% 941/.+f-01% � Households Monroe County Florida Residence 1 Year Ago Total households,2000 Census 35.086 6 338,075 Persons aged 1 and over Familyhouseholds,2000 Census 20307 4,210,760 Same house 812%+I-16% 039%+1_g.1% M with own children under 18 35.9% 42.3% Different house in the U.3_ 17.5%+I-1.5% 15.1%+1-0.1% LO Total households,2010 Census 32.629 7,420,802 Same county in Florida 8.9%+/-13% 929/.+f-0.1 Fami ly househol ds,2010 Census 10.219 4,835,475 Different county in Florida 3.6%+I-07% 3.1%+1-0.1% %with own children under 18 327% 40.0% Different county in another state 5.1%+/-00% 281/.+f-0.1% Average Household Size %,2010 Census 2.18 248 Abroad 14%+/-04% 19 +f-0.1% Average Family Size,2010 Census 2.70 3.01 N-=marginofe rror based on a 90%nonadenne leve1. e� h- h Io o eareav:ao,-ar:a o,L-hare ii 1-1,�iwe:a morea furz�:�ro°�m�:v.,°�:own.,�tlmA.a rea4a mv�b°,ebu v �° �. Emp lioymDnt by industry Num bar of Establishm ants Percent of All Establishments 2016 preliminary Monroe County Florida 2016 preliminary Monroe County Florida All industries 4.502 670,061 All industries 4,502 670,061 Natural Resource&Mining 44 5,368 Natural Resource&Mining 1 9% 0.8% Construction 544 66 377 Construction 12.1% 9.9% Manufacturing 87 20,514 Manufacturing 1 9% 3.1% Trade,Transportation and Utilities B. 141,843 Trade,Transponad %on and Utilities 21 5 21 1% Information 56 10,923 Information 120/. 1.6% Financial Activities 510 71,930 Financial Activities 11.3% 10.7% Professional&Business Services 796 1""' Professional&Business Services 177% 23.1 Education&Health Services 282 71,153 Education&Health Services 6.3% 10.6% Leisure and Hospitality 735 65 %,411 Leisure and Hospitality 163 8.3% Other Services 375 64,912 Other Services 83% 8.2% Government 93 6137 Government 2.1% 0.9% 19 SLACK .JOHNSTON Nd Packet Pa. 2265 -- i 0.4.e Monroe County Page? Enri loyf6u enk by industry Average Annual Employment, Average Annual Wage of All lndustries,2016 preliminary Monroe County Florida 2016 prelim inary Monroe County Florida All industries 41.621 0 309,000 All industries $39.120 $47,060 Natural Resource&Mining 04% 0.91/. Natural Resource&Mining $37365 $31 501 Construction 6.61/6 5.71A Construction $41,719 $47,342 Manufacturing 00% 4.31/. Manufacturing $39598 $57,824 Trade,Transportation and Utilities 170% 20.6% Trade,Transportation and Utilities $23002 $41,929 Information 10% 1.651. Information $51.857 $77,256 Financial ActiviI es 40% 6.51/. Fin ancial Activitr es $47576 $69701 0 Professional&Business Services 7.2% 15.51A Professional&Business Services $46.969 $56,930 Education&Health Services 7 0% 14.81/. Education&Health Services $47005 $48,616 Leisure and Hospitality 367% 14.11/. Leisure and Hospitality $30.690 $24,309 L- Other Services 3.5% 3.31A Other Services $35.005 $33,996 Government 13.9% 12.61A Government $56.451 $52,022 Labor Force .� Labor Force as Percent of Population Aged 18 and Older Monroe County Florida Unem ployment Rate Monroe County Florida 1990 638% 64.31/. 1990 27% 6.1% 2000 fi35% 63.71/. 2000 29% 3.7% 2010 670% 6221/. 2010 78% 11.1% � 2017 687% 6201/. 2017 33% 4.2% incolope and Financial Heafth Personal lncome($OOOs) Monroe County Florida Per Capita Personal Income Monroe County Florida 1990 $1,920.134 $280,002569 1900 $23264 $10966 2000 $3,277332 $477,315,998 2000 $41240 $29744 %change 1990-2000 80.1% 83.51/. %change 1990-00 773% 49.0% 2010 $4,565 292 $720 062 952 2010 $62 250 $30 626 %change 2000-10 393% 52.51/. %change 2000-10 512% 29.9% 2011 $4,775953 $773,315,940 2011 $64.456 $40,494 %change 2010-11 46% 6.21/. %change 2010-11 34% 4.8% 2012 $5,298236 $793,102992 2012 $70.640 $41,000 U) %change 2011-12 107% 2.6% %change 2011-12 96% 1.2% 2013 $5,115921 $798,885,ago 2013 $67.135 $40797 .� %change 2012-13 -32% 071/. %change 2012-13 -50% -0.5% 2 2014 $5,585.979 $056,491,910 2014 $72.630 $43,064 %change 2013-14 9.21/6 7.21A %change 2012-14 8.21/6 5.6% IL 2015 $5,004.521 $919,957,906 2015 $73729 $45,441 .s %change 2014-15 30% 741/. %change 2014-15 15% 5.5% 2016 $5,069.090 $947,207,472 2016 $74.230 $45,953 %change 2015-16 1.1% 3.01/. %change 2015-16 07% 1.1% Earnings by Place of Work($000s) Median Income 1990 $933,568 $161317,329 Median Household Income $60,303+1-$1,862 $48,900+I-$200 2000 $1,672,967 $313,054,047 Median Family Income $73,383+1-$2727 $59,139+/-$205 %change 1990.2000 792% 94.11/. id=margin oferror based on a 90%confidence level. 2010 $2,099.697 $437,064,465 %change 2000-10 25 4% 39.61/. Percent in Poverty,2016 T- 2011 $2,145.664 $447,731,540 All ages in poverty 11.5% 14.0% M %change 2010-11 22% 24% Under age 18 in poverty is0% 213% LC8 2012 $2,256.641 $465,347,164 Ages 5-17 in families in poverty 17.9% 20.1% %change 2011-12 52% 3.91/. 2013 $2279752 $479400,070 Education T- %change 2012-13 1 0% 3.01/. Public Education Schools Monroe County CD 2014 $2404791 $607,929140 Traditional Setting(2017-16) School District Florida %change 2013-14 5.51/1 5.91A Total(state coral indudesspedaldistrirt) 17 3,206 2015 $2,586017 $541,836,991 Elementary 5 1,906 %change 2014-15 13.4% 13.0% Middle 0 566 2016 $2,648.806 $564,243,047 Senior High 5 114 %change 2015-16 10.1% 11.11/. Combination 7 507 E Personal Bankruptcy Filing Rate Educational attainment L� (per 1,000 population) Monroe County Florida Persons aged 25 and older Monroe County Florida 12-Month Period Ending March 31,2017 0.99 210 %HS graduate or higher 91 0%+/-08% 87.2%+1-0.1% 12-Month Period Ending March 31,2010 1.03 1.91 %bachelor's degree or higher 311%+/-1.4% 27.9%+1-0.2% State Rank 46 NA 4-margin ferror based on e 90%confidence level. chaptc r7 a chapter 13 Qu afty of Life Crime Monroe County Florida Workers Aged 16 and Over Monroe County Florida Cr me rate,2017(index climes per 100,000 population) 2 771 5 2,989.E Place of Work in Florida Admissions to prison FY 2016-17 190 28,783 Worked outside county of residence 4.3%+/-0.6% 17.5%+!-0.1% Admissions to prison per 100,000 Travel Time to Work population FY 2016-17 247.1 140.E Mean travel time to vork(minutes) 104+1 07 26.7+1-0.1 +i-margin ferror based ona 90%confidence Ieve1. 20 SLACK .JOHNSTON Nd Packet Pa. 2266 -- i 0.4.e Monroe ou n Reported County Government Revenues es and Expenditures Revenue2015-16 Monroe County Florida' Expenditures 2015-16 Monroe County Florida' Total-All Revenue Account Codes Total-All Expenditure Account Codes ($000s) $420 503 6 $40,323,612 7 ($000s) $421,662.55 $38.724,720 62 Far Capita$ $5,634.72 $2,09746 Per Capita$ $5,54476 $2,01429 %ofTotal 100.0% 100.0% %ofTotal 98.4% 96.0% Taxes General Government Services- ($000s) $141,160.6 $12,835,034.6 ($000s) $56,092.96 $7.520,34277 0 Per Capita$ $1.056 23 $667.62 Per Capita$ $748.13 $301.18 %ofTotal 22.9% 31.0% %ofTotal 13.3% 18.6% Permits,Fee,and Special Assessments Public Safety ($000s) $19,409.0 $1,732,457.6 ($000s) $10040972 $9077,106.65 Per Capita$ $25522 $90.11 Per Capita$ $1,425.56 $472.15 %ofTotal 4.5% 4.3% %ofTotal 25.3% 22.5% Intergovernmental Revenues Physical Environment °® ($000s) $52,473.1 $4,070,466.6 ($000s) $67,12013 $4450,501.04 �S Far Capita$ $690.01 $212.20 Per Capita$ $00272 $231.50 %ofTotal 12.2% 10.1% %ofTotal 15.7% 11.0% Charges for Services Transportation ($000s) $75,376.6 $12,526,050.9 ($000s) $25,554.64 $4.573,52057 � Far Capita$ $99110 $651.55 Per Capita$ $336.04 $237.89 %ofTotal 17.6% 31.1% %ofTotal 6.0% 11.3% Judgments,Fines,and Forfeits Economic Environment ($000s) $3,403.6 $202,607.1 ($000s) $35,331.69 $1451,92679 0 Per Capita$ $44 76 $10.54 Per Capita$ $464.60 $75.52 %ofTotal 0.8% 0.51/6 %of Total 8.2% 3.6% Miscellaneous Revenues Human Services ($000s) $5,0410 $900 142 1 ($000s) $30,166.80 $3,212,191.93 Far Capita$ $7601 $47.24 Per Capita$ $306.69 $167.08 %ofTotal 14% 2.3% %ofTotal 7.0% 8.0% Other Sources Culture l Recreation ($000s) $130,0396 $0039,0527 ($000s) $5713.05 $1496,601.01 Per Capita$ $172051 $410.20 Per Capita$ $75.14 $77.85 U) %ofTotal 30.5% 19.9% %ofTotal 1.3% 3.7% Other Uses and N an-Op erating ($000s) $03,751.76 $6041,997.10 2 All County Governments Except Duval-The consolidated City of Jacksonville/Duval County Per Capita$ $1,101.32 $31420 agures on,lncludedlnmunlcipelmtalsratherthencountygovemmenttntals. %ofTotal 19.5% 15.0% IL Court-Related Expenditures "(Not Court-Related) ($000s) $0713.OF $900,372.95 Per Capita$ $114.57 $46.83 %ofTotal 2.0% 2.2% d® State Infrastructure State and Il ocM Taxation Transportation Monroe County Florida 2017 Ad Valorem Millage Rates Monroe County State Highway County-Wide Not County-Wide` T- Centerline Miles 119.2 12,109.9 County 2.6957 07177 M Laos Miles 301.3 43,819.1 School 3.3560 NO State Bridges Municipal 1 3260 Number 50 6.783 Special Districts 04646 0.4362 -M-Included In Not County-Wide"County"category T- State Facilities BuildingsfFacilities(min.300 Square Feet) Cd Number 144 9.319 ate` Square Footage 305.093 63.971.060 State Owned Lands State Lands Conservati on Lands ^� Parcels 2.062 30.326 Acreage 60,032.0 3,140422.9 Non-Conservation Lands Parcels 100 5.000 Acreage 5615 160,352 7 Prep d by Flo d Ld-ir, rr Off f Ell-on,and-graphic Research dp D�; 111 vv.Mad-son Street,Eo to 110 41, Tallahassee,FL 32399-6586 (850)48}1402 hop.//edr.state.Fl.us June 2o18 21 SLACK .JOHNSTON Nd Packet Pa. 2267 -- d O.4.e By definition, a neighborhood is a group of complimentary land uses. Typically, its boundaries can be fairly easily defined, be they physical, social, economic or governmental in nature. The unique geographical aspect of the Florida Keys creates land uses and neighborhood characteristics throughout the archipelago which are generally atypical. As mentioned previously, Monroe County is made up of a chain of small islands that sweep about 115 miles in a southwesterly direction from the southern tip of Florida's mainland, ending at Key West. Land uses are somewhat limited by the geography of Monroe County, and many uses take advantage of the natural resources, with tourism and commercial/sport fishing dominating the local economy. The concept of complimentary land uses are often overruled by constraints resulting from the odd configuration or limited availability of developable land. For these reasons, neighborhood boundaries are lesser defined, with incongruent uses existing throughout much of the county's developed areas. The subject property is located on Vaca Key in the City of Marathon. The City of Marathon was incorporated in 1999. Its boundaries extend from the east end of the Seven Mile Bridge (approximately Mile Marker 47) to the west end of Tom's Harbor Bridge (approximately Mile Marker 60). The City includes the islands of Boot Key, Knight Key, Hog Key, Vacca Key, Stirrup Key, Crawl and Little Crawl Keys, East and West Sister's Island, Deer Key and Fat Deer Key, Long Pine Key and Grassy Key. a� U) Marathon is one of the more populated areas of the Keys and has a higher concentration 2- of commercial development than many other areas of the Keys. Commercial a. development includes a wide variety of motels, restaurants, shopping centers, drug stores, supermarkets, as well as a Home Depot center. According to the 2010 U.S. Census, there were 6,187 housing units within the City of Marathon representing approximately 13% of the total housing units in Monroe County. �s Marathon Airport is a mostly general aviation airport, and one of only two in the Florida `O Keys. Although there are other air strips in the Keys, Marathon and Key West are the only two airports providing commercial flights in and out of the Keys. "! Boating, fishing and water sports are a big part of the economy in the Florida Keys. According to statistics published by the Department of Motor Vehicles, there are approximately 29,000 registered vessels in Monroe County. This indicates almost 40% of the total population of Monroe County have a registered vessel. In all likelihood, there are probably significantly more vessels in Monroe County than registered due to the number of second home owners from neighboring counties to the north who register their vessels in Miami-Dade or Broward Counties. 22 SLACK ,JOHNSTON Nd Packet Pa. 2268 -- i 0.4.e Marathon C as (�rf e (D R p Qb Mamthon k , Myth C CD A 4 CD ° 504 C (D E 0mi 1 2 3 4 5 23 SLACK ,JOHNSTON Nd Packet Pa. 2269 -- i O.4.e The Florida Keys were hit by Hurricane Irma in September, 2017. Irma was a very destructive storm and properties were affected in all of Monroe County from Key Largo south to Key West. The Lower and Middle Keys, Marathon to Big Pine had the most damage. According to Coldwell Banker Schmitt's Real Estate Report, "As 2018 progressed, the Florida Keys real estate market returned to a more normal market cycle." Statistics for the first quarter of 2019, indicated the market continues to track in accordance with historic market cycles showing typical levels of listings and sales, though the year started with fewer pending sales than in 2018 and 2017. The total number of sales in the Upper Keys real estate market increased by 4% in 2018 as compared to 2017 to 2018 and the average sale price rose by 18%. The real estate market is projected to be stable for 2019 notwithstanding any significant natural or economic events. Based on our visit to the area, there appears to be significantly more new construction taking place than in years prior. New construction includes both commercial and residential components. 0 a LO 24 SLACK ,JOHNSTON Nd Packet Pa. 2270 -- i 0.4.e DESCRIPTION OF THE SITE The subject unit is part of a larger condominium project and includes an interest in the common elements of the condominium, including the underlying site for the subject condominium. The following is a description of the site. NN. S. HIGHWAY NO. i (10NT°A/W) s„ rr mwwrg�wrt 7112t'24"W ice.OW( ., PWIT IV 14 u� •�` i. J '..� C 6� kT . LOT A2. oa amwra�ri�a aka ;�,_v.mm�. d� �P�" N 74 (D U) YACHT A NN4 & LOT Ft. � CHANNEL "f SU Location: Marathon Professional Center, 2945-2975 Overseas Highway, Marathon, Monroe County, Florida. e Shape: Rectangular 04 Site Area: 16,000 Square Feet 0.37 Acre E Frontage/Dimensions: The site has approximately 160 feet of frontage along Overseas Highway, 100 feet of frontage on 29th Street and 100 feet of frontage on 30th Street. There is also 60 feet of frontage on a navigable waterway/canal. The site's dimensions are approximately 100 feet by 160 feet. Access: Access to the subject condominium site is via Overseas Highway to 29th and 30th Streets. 25 SLACK ,JOHNSTON Nd Packet Pa. 2271 -- i O.4.e Topography: Level and at, or near, street grade. Soil Conditions: No soil report of the subject property was provided. It is assumed that the soil is of sufficient load bearing capacity to support the construction of permanent structures. No evidence of any adverse soil conditions at the site was observed upon our physical visit of the property. The fact the site is currently improved with an office building is proof that it is suitable for development. Utilities: All public utilities are available to the area. Land Use Restrictions: No authoritative report of title has been provided or reviewed. There do not appear to be any easements or restrictions that would adversely affect the utilization of the site. Flood Insurance: The subject property falls within Zone AE-8. Zone AE is determined to be special flood hazard areas subject to inundation by the 1% annual chance flood. Base elevations of 8 feet determined. National Flood Insurance Community Panel Number 12087C1378K, effective date February 18, 2- 2005. A copy of the flood map is presented on the following page. a Environmental Study: An environmental study was not provided. This appraisal report is based on the assumption that no conditions exist that �s would adversely affect the utilization or marketability of theLO property. 26 SLACK ,JOHNSTON Md Packet Pa. 2272 -- i 0.4.e Flood Map m 4m� T m a ' iz v r � c mug , W t5 a ui, E .i ii - = %r a � � a . 1 ° oaf V E, 18 `w n E E0 "j r ri InXuh, r irr rii',,,, A 1 / e / /l J r // 1 / t/r k �h r/ / 1 r r r/ r � /G All,0 ti/ �� ,///i/r Lff 42 L<, CL LL CD JJJ�IV r U� llr / l�l U�� X /mgf CD �% it 04 w / ,18 a JW I,II D%r r llDffl j �Y/'l 191f� �Jy! er may. j „mm r e rrt tlX%/" co,, � Amfh lP rr,zS'9 C�»)7A>'Yl1�i�I1J'Iy77JI1lQIYHu';I11�01 f%" /�ICt � Yi W"j 7A �i ro I 27 SLACK ,JOHNSTON Nd Packet Pa. 2273 -- i 0.4.e DESCRIPTION OF THE IMPROVEMENTS The subject property is Unit A of the Marathon Professional Center, a Condominium, located at 2975 Overseas Highway, Marathon, Monroe County, Florida. Marathon Professional Center is comprised of a two-story office building with surface parking. The building was constructed in 1973 and converted to 3 condominium units in 2006. The building contains a total of approximately 5,722 square feet. The building is of concrete construction with a flat roof. The subject building is considered to be in good condition, commensurate with its age and level of maintenance. 0 The subject, Unit A, is located on the ground floor and contains approximately 2,875 square feet. Unit A is currently owner-occupied and used for professional offices (law firm). This unit is built out with good quality office finishes. The unit includes a reception area, one large office/conference room area, five executive offices, bull pen area, file storage area, small kitchenette and one restroom. Finishes include a combination of commercial grade carpet and tile flooring, painted drywall, and acoustical ceiling tiles with a combination of recessed and fluorescent lighting. Parking for the condominium building is unassigned, surface parking. There appear to be U) about 28 spaces available. It should be noted, the spaces are poorly marked and may be 2- located in the right-of-way of Overseas Highway. The subject project was constructed in 1973 with an actual age of 46 years. The building is considered to be in good condition. We have estimated an effective age of 20 years, commensurate with the level of maintenance at the property. The subject unit's interior is �s also in good condition. The unit was damaged by water during Hurricane in September, LO 2017. It appears that most repairs have been made with just a few minor items remaining. The condominium representatives also stated that there are not any special assessments anticipated in the near future. "! 28 SLACK ,JOHNSTON Nd Packet Pa. 2274 -- i 0.4.e SOUTWXY PIN U 74 2il2ww taw W MA) ti pp 50, Via) OWNIT s, wr S70AY AMA tl � � m twca MU,— "m ... SEE SNNjlsllx�;f CE a �wr C a f, a� i0.A'*111111 �I� t USN N T ' � f SEE SHEET P _ LOT C. tl LOT NLOT 8Z S#E �37, u 2 kSNkl,T PAVEMENT II i shr jr Iry 16"We CE (D WIN (D '4'2 11 20 16 t . " N"ICr'Ml .... ' U C CD CD e T- 04 CD (D E 29 SLACK .JOHNSTON Md Packet Pa. 2275 -- i 0.4.e REAL ESTATE TAX ANALYSIS The subject property is located within the City of Marathon, a municipality of Monroe County, Florida, and is subject to city and county ad valorem taxes on real property. The Florida Statutes provide for assessment and collection of ad valorem taxes on real property; however, the taxes are assessed, collected, and used on the local county level. The assessment for the property is established each year as of January 1st by the Monroe County Property Appraiser's Office at 100% of "Just Value". The tax due is computed according to annual millage rates established by Monroe County. Millage rates are the amount paid to each taxing body for every $1,000 of assessed value. Taxes are payable in November with a 4% discount and become delinquent on April 1st. According to the Monroe County tax rolls, the 2018 real estate taxes and assessments for the subject property are as follows: a Folio Number: 00321661-000100 2018 Total Market Value: $381,996 2018 Total Assessed Value: $381,996 Real Estate Taxes: $4,194.23 The above real estate taxes do not reflect a 4% discount for prompt payment. The County total market value for the subject unit equates to $132.87 per square foot, based 2- on 2,875 square feet. Based on an analysis of the sales of condominium units utilized in this report, a significant increase in the assessed value of the subject unit is could be expected if the unit were to sell. It should be noted, the taxes stated above include non-ad valorem assessments for Marathon Stormwater and Wastewater in the amount of$606.22. , LO 30 SLACK ,JOHNSTON Nd Packet Pa. 2276 -- i 0.4.e LAND USE AND ZONING Future Land Use According to the City of Marathon Future Land Use Map, the subject property has a land use designation of Mixed Use Commercial. A copy of the land use map is presented on the following page. According to the Marathon Comprehensive Plan: Mixed Uze Comyn rcigi � The principal purpose, of the Mxed Use Commercial fuutuure land use category is to provide for the establishment of mixed use deg elopmerA, patterns and t o recogrize established blrshed mixed use � development patterns within the City Thus land use category is it .ended to provide for the commercial zoning, district where various types of coruorrcaercull, retail, and office uses may be permitted at intensities which are consistent with the community character and the natural erwioroa mru erat and to pros e de for varioustyTses of residential uses, incluclingemployee hoouuussin and 22 ccoruo rue erci al apartments. Whenever and wherever po c lb�le, time maintenance and enhancement oaf couuumercial fishing, and related traditional uses .uch as retail, storage, and repair and mairrter ante which suupport the commercial fishi , irAuustry shall be encouraged within tkAs land we category. Heavy indu.ustrial uses and similarly incompatible uses r4,ial be prohibited Lawfully established RV parks inhere the rroajority of the RV s spaces are maintained and reruted � as transient spaces are also alI owe d wit n the Mix ed lase C iomm ercial fu.utuure land,us category: oa The rainimuum lost size/density/intensity identified in"fable 1-1 shall not preclude the continued � us or, redewloapoat�nt of existing c cat mercral or residential use mi a smaller lot whet°e such lot rc parcel was platted or otheruurise of recoord prior to the a.doaptio In oaf'tluis flare. Ad+ itionally, the .� application of the height and lot coverage limitations contained in the Plan and the Land Development eguulatio s shall not Preclude the repair or reconstvaction of any str uctuure o portion thereof which is damaged by aW naftwil disaster or other casualty as provided for in Objective 1-3'.4 and P olicies ffiereiru 1 3.3177(6)(ou)3 hp. . LO o cv 0 31 SLACK ,JOHNSTON Nd Packet Pa. 2277 -- i 0.4.e Future Land Use Map uuuuuuuuuuuuuu IIIIIIIII II I I� 14ili,llil , ^" ° "• et I I puuumuumuuuu ,� a Zoning The subject property is located within the jurisdictional boundaries of the City of Marathon and is zoned MU (Mixed Use). According to the Marathon Land Development Code, MU is as follows: e H'. e -use(N,r)Zot7in Dil, ktr" tw The MU zirnOn;Ig d, strict Irs d'es�gn d to acco1r rnodu. te a w de 'aInett , it,31 ciorrrrnerc al, and retaR acb,vfties that idiIH resr_dt rrI the r ost ettlbe"'nt and Use t'the Cit"("s histlsrrc Ibk.rsrness rtrstrristM and the US t sear ,a ld or, un are effort to rer rgrQe the role of US1 as the City ic EQ Marat"&on"s "Miainl mtlPeet". Spec, is dI"fs'tri t provildes for land t.j"see that Iiu J,e a st`IP'oIf g �3 pedestr`Valn- rieint d character, with a n'Oliiire anid ,concentratilon of spec011t"' ' �ahio�"�'t�IV�11 ,� trarrsVent; loidging, r etuail tier sorWrall servicis, rest mraintx Uflt Ur a9. fisha g Industry, affordable hiou us" ng send erstermta nrnient t,rses in the Old Town area. The MU dis,tr9ct also pro�(idess for l rge-s rile r. t:aO and rwsrmrr rer,W� bUsrrress agportLln t. es in other creas, fi`1 JUding far Ner" sl�iiolsphng �,.e nIer"sn specWy shsrppfing centers, Iirmrr:i'Vidual Irmrrsrllti-tenant. comirnercial Ib uGldirrg°s, autc)rnobile serve cerrm and sae es, tact. Is,srrt restaUran ts, affoirlwJable tious ing r°esiderrtuall nitres, transrer"Irt lodg,Wrg anilrI other r etaiill estabbshrrients that sersre t1he ccrnirnunk." y at large, The (MU) dIrstfrlfct ls desIl pr rted v"w9thin the It h 4 d- u.rse COITrrsrer`s 5lI t tt.tQ fUtl.drre land r.rse c,ategory on the Riture IL.wsr`rd (.use Map( G..4Jtrwt) 32 SLACK .JOHNSTON Nd Packet Pa. 2278 -- i 0.4.e Zoning Map C f h r I I r r "�..,.�NVVh ®_ 1 ww� ' irY "' IYl r �,���✓�i ���it�(iPpl��r h � 4.!!V"",u Ib�i V �v �.��. ,rtiraj�.� V1� �u� 4 Based on the above information, the existing improvements are considered a legal and conforming use. 04 e C CD E U 33 SLACK ,JOHNSTON Nd Packet Pa. 2279 -- i O.4.e HIGHEST AND BEST USE According to The Dictionary of Real Estate Appraisal (Sixth Edition) published by the Appraisal Institute, the pertinent terms relating to highest and best use may be defined as follows: Highest and Best Use is "the reasonably probable use of property that results in the highest value. The four criteria that highest and best use must meet are legal permissibility, physical possibility, financial feasibility and maximum productivity." In estimating highest and best use, there are four stages of analysis: 1. Possible Use - normally dictated by physical constraints. 2. Permissible Use - what use would be permitted in consideration of existing zoning and other applicable laws governing the use of the property, as well as any deed restrictions that may exist. 3. Feasible Use - which possible and permissible uses will produce a net return to the owner of the site. 4. Maximally Productive - among feasible uses, which use will produce the highest net return to the land. U) To meet the tests of highest and best use, the use cannot be speculative or conjectural. It 2- must be legal and probable. There must be a profitable demand for such use and it must CL return to the land the highest net return for the longest period of time. These tests have been applied to the subject property. In arriving at the estimate of highest and best use, C the subject property was analyzed as improved. As Vacant , LO The highest and best use, as vacant, considers 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 E vacant or can be made vacant by demolishing any improvements. As Improved Highest and best use, as improved considers the use that should be made of a property as it exists. An existing property 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. 34 SLACK ,JOHNSTON Nd Packet Pa. 2280 -- i 0.4.e As the subject property represents a single office condominium unit within the larger Marathon Professional Center condominium building, only the highest and best use as improved was analyzed. Marathon Professional Center was constructed in 1973 and appears to be in good condition. Based on our research, the property is well located for professional office users. Based on our research, the market for office condominium units in this area is primarily owner-user. In addition, the level of achievable rents for office space in this market is typically not sufficient to render ownership of office condominium units for investment purposes economically feasible. Based on our analysis, the highest and best use for the subject unit is for its continued office condominium use. a a LO 0 35 SLACK ,JOHNSTON Nd Packet Pa. 2281 -- i 0.4.e SUMMARY OF VALUATION AND ANALYSIS There are three generally recognized approaches considered in the valuation of real property. They include the income, sales comparison, and cost approaches. It should be noted that the appropriateness and reliability of each approach depends on the type of property being appraised, the age and condition of the improvements, if any, and the availability and quality of market data available for analysis. The income approach provides an indication of value of a property based on a conversion of anticipated benefits (net income). The method of conversion is called capitalization and is either based on a single year's income (direct capitalization), or several years' income (discounted cash flow). The sales comparison approach provides an indication of value based on sales of properties considered similar. The cost approach provides an indication of the value of a property represented by the reproduction cost of the existing improvements, less accrued depreciation, to which is added the land value. The appraisal process is concluded by a review and re-examination of each of the approaches to value employed. Consideration is given to the type and reliability of data used and the applicability of each approach. These factors are reconciled and a final value estimate is made. In this instance, the sales comparison and income approaches were considered applicable in the valuation of the subject property. As the subject unit is a single unit and a portion of the common areas, the cost approach was not considered 2- applicable. The income approach will be followed by the sales comparison approach. a. INCOME APPROACH The income approach is a procedure where anticipated economic benefits to be derived �s from property ownership are converted into a value estimate through a capitalizationLO process. The principle of "anticipation" underlying this approach acknowledges that an investor recognizes a relationship between income and asset value. The process of estimating the anticipated economic benefits from a particular property requires the estimation of potential income, expense and net operating income, as well as the selection of the most appropriate capitalization method. The two most commonly utilized methods of processing net income into value are direct capitalization, where, if possible, an overall rate is extracted directly from market sales in which the net income is known or can be closely approximated, and the discounted cash flow method, whereby anticipated future income streams and a reversionary value are discounted to a net present value estimate. The income approach is most reliable when estimates of rental income and operating expenses, as well as the selection of the capitalization technique, are based on market 36 SLACK ,JOHNSTON Nd Packet Pa. 2282 -- i 0.4.e conditions. The method of capitalization is either based on a single year's income (direct capitalization) or several years' income (discounted cash flow). In this procedure, the potential gross income (PGI) is estimated, as well as vacancy and collection loss, operating expenses, and net operating income (NOI), as well as the determination of the appropriate capitalization rate. The vacancy and collection loss is deducted from the PGI and results in effective gross income (EGI). Operating expenses are deducted from the effective gross income resulting in net operating income before debt service. The net operating income is then divided by the capitalization rate to produce a value estimate by the direct capitalization method. Based on our property visit, the subject unit owner occupied. Our analysis of the subject unit via application of the income approach is based on the hypothetical condition the subject unit is rented at market levels. Potential Gross Income 0 We have surveyed competitive office space within the subject area to estimate the current market rent for the subject property. If leased, the subject unit would likely be leased on a net of electric basis. Leases that are net of electric provide for the landlord to pay a majority of the unit expenses (real estate taxes, condominium fees, etc.) and the tenants to pay the electric. A summary of the rentals is presented on the next page along with a 2- map showing their location in relation to the subject. Photographs of the rentals are CL presented in the addenda. C LO 4i C 0 0 37 SLACK ,JOHNSTON Nd Packet Pa. 2283 -- i 0.4.e SUMMARY OF BUILDING RENTALS YEAR UNIT SIZE! ASKING PROPERTY NO. LOCATION BUILT RENTABLE SF RENTISQ.FT. EXPENSES 1 8085 Overseas Highway 1949 750 $16.80 Net of Utilities Marathon 2 6803 Overseas Highway 1968 1,500 $15.00 NNN ($8.00) Marathon 3 6400 Overseas Highway 1981 565 $22.83 Net of Utilities Marathon 4 10005-95 Overseas Highway 1993 Varies $30.00-$34.00 Net of Utilities Marathon Typically 800 SF+I- a 0 Office Rentals e " 9, a t � "bdbrmkl klol) Qy U) U s vt,ad i r�tae�'Ax radhi�' Mratun AlrPa," 1. t a1 . r b scsr�gd�ru�ra;.., ;,; ass A f F"d rr R I c" 0m1 OS 1 15 2 25 38 SLACK ,JOHNSTON Mid Packet Pa. 2284 -- i 0.4.e Discussion of Comparable Rentals Rental I is a one-story office building located at 8085 Overseas Highway in Marathon. The building was originally constructed in 1949 but appears to be in good condition. The building contains 2,024 square feet. The property owner recently leased 750 square feet at a rate of$16.80 per square foot, net of utilities. He indicated lease terms are negotiable on new leases. Rental 2 is a one-story office building located at 6803 Overseas Highway in Marathon. The 6,280 square foot building is currently 100% occupied. The newer rental rates in the building are in the range of $15.00 per square foot, triple net. According to the leasing agent, the pass throughs are approximately $8.00 per square foot. The effective rent equates to approximately $22.00 per square foot inclusive of utilities. The building was constructed in 1968 and is in good condition. Lease terms are typically negotiable. Rental 3 is located at 6400 Overseas Highway in Marathon. This is a two-story, multi- tenant building in good condition. According to the owner, he recently leased approximately 565 square feet at a rate of$22.83 per square foot, net of utilities. Rental 4 is located at 10095 Overseas Highway in Marathon and is known as the 100' Street Center. This is a two-story, multi-tenant building in good condition. According to the leasing agent, the property is currently 100% occupied. He stated the lease rates 2- range from $30.00 to $34.00 per square foot, net of utilities. The units average 800 a. square feet, more or less. Lease terms are typically negotiable. a In addition to the above, a portion of Unit C of the subject condominium (960 square feet) is currently rented on a month-to-month basis for $16.88 per square foot. The �s quality of the finishes in Unit C is considered inferior to the subject unit. , LO Estimate of Market Rent and Potential Gross Income Based on discussion with realtors active in the Middle and Lower Keys area, demand for office space in Marathon is affected in part by the physical constraints of the island which limits the overall population and thus potential users. There is significantly more demand by retail and service-oriented users than users of typical office space due to the tourism- oriented nature of the island. Often times, commercial space can be used by either retail, service or office users with little or no alterations. The typical tenant and landlord in Marathon are small-scale users and owners and, as a result, lease terms are fairly straight- forward and simple. Most new leases are described as lateral moves of existing tenants within the market area. The comparable rentals provide a range of annual rent from $16.80 to $34.00 per square foot, net of utilities, gross. Based on a review of the market conditions, we have 39 SLACK ,JOHNSTON Nd Packet Pa. 2285 -- i 0.4.e estimated the current market rent for the subject condominium unit at $25.00 per square foot. The unit is individually metered for electric and the estimated rent assumes the tenant will pay the electricity. The potential gross income (PGI) for the subject property is estimated as follows: Potential Gross Income: 2,875 rentable sq. ft. X $25.00 per sq. ft. = $71,880 (Rounded) Vacancy & Collection Loss The investor is primarily interested in the cash revenues that an income property is likely to produce annually over a specified period of time, rather than what it could produce if it were always 100% occupied and all the tenants were actually paying their rent and expense reimbursement in full and on time. It is normally a prudent practice to expect some income loss, either in the form of actual vacancy, turnover, non-payment or slow payment of rent by tenants. Based on discussion with realtors in the Marathon area, the market for office space is stable. Typically, units do not remain vacant for extended periods unless they are in poor condition, large spaces or overpriced. Based on this information, the subject area represents a stable market, with overall vacancy rates historically near 5.0%. Based on our analysis, we have estimated a stabilized vacancy rate and collection loss of 5.0% for 2- the subject unit. IL Effective Gross Income Effective gross income is equal to potential gross income less vacancy and collection �s loss. We have estimated the stabilized effective gross income as follows: , LO Potential Gross Income: $71,880 Less Vacancy & Collection Loss (5%): ($3 590) "! Effective Gross Income: $68,290 E Operating Expenses In our analysis of the fee simple valuation of the subject property under stabilized operations, we reviewed available expense information for the subject property and estimated other operating expenses based on industry standards, as well as conversations with realtors, unit owners and property managers. The comparable operating expenses are summarized as follows: 40 SLACK ,JOHNSTON Nd Packet Pa. 2286 -- i 0.4.e Real Estate Taxes: As discussed in the real estate tax section of this report, we have estimated the real estate taxes, including a 4% discount for prompt payment, would be $4,030. Condominium Fees: As discussed, the subject property is under a condominium form of ownership. Owners of the unit are required to pay association fees which include expenses such as utilities, repairs and maintenance, management and administrative, insurance and reserves for replacement. The subject association fees were reported to be $920.33 per month or approximately $11,100 annually, rounded. Management/General Administrative: Based on our analysis and given the size of the property and complexity of management, we have estimated a management fee of 3.0% of effective gross income, or $2,050 ($0.71 per square foot). Repairs & Maintenance: This expense item includes charges for the maintenance of the repairs and maintenance not included in the condominium association fees. We have estimated repairs and maintenance at $2,160 ($0.75 per square foot). Miscellaneous Expenses: The stabilized miscellaneous expense has been estimated at $720 or $0.25 per square foot. a� Total Operating Expenses 2- Based on the above information, the subject's operating expenses have been estimated at $20,060, or $6.98 per square foot. The operating expenses reflect an expense ratio of 29.4% of effective gross income. Net Operating Income (NOI) , LO The net operating income is the anticipated net income that remains after all operating expenses are deducted from effective gross income (potential gross income less vacancy "! and collection loss). We have estimated the stabilized net operating income for the subject property as follows: Effective Gross Income: $68,290 Less Operating Expenses: - $20,060 Net Operating Income: $48,230 41 SLACK ,JOHNSTON Nd Packet Pa. 2287 -- i 0.4.e Stabilized Income/Expense Statement 2975 Overseas Highway(Unit Ay 2,875 Sq.Ft. Total $/RSF Potential Gross Income $71,880 $25.00 Vacancy&Collection Loss 5.0% $3,590 $1.25 Effective Gross Income $68,290 $23.75 Operating Expenses %EGI Real Estate Taxes 5.9% $4,030 $1.40 Condominium Association 16.3% $11,100 $3.86 Management/Administrative 3.0% $2,050 $0.71 Repairs/Maintenance 3.2% $2,160 $0.75 Miscellaneous 1.1% $720 $0.25 Total Operating Expenses 29.4% $20,060 $6.98 Net Operating Income $48,230 $16.78 Direct Capitalization Method a� Direct capitalization converts stabilized anticipated net operating income into an 0 indicated value by the use of an overall rate of return. Capitalization rates are a relationship between the property's net income and value. The process of capitalization converts a property's income into a single value. The direct capitalization formula is as follows: U) Income/ Rate = Value The capitalization rate used in this report was obtained from a review of investment surveys for similar properties, as well as from an analysis of the comparable improved sales for which the income and expense information was provided and from which capitalization rates could be estimated. �s An overall rate of return (going-in capitalization rate) is best derived from an analysis of LO actual sales; however, the sales analyzed herein were purchased by owner/users and capitalization rates are not available. A survey of investor criteria reflected the following: Source Property Type Overall Cap Rate PwC — l SE Florida Office Market 5.00% - 9.50%; 6.93% Average Quarter 2019 National Suburban Office Market 5.00% - 10.00%; 6.64% Average CBRE Cap Rate North America Suburban Office 6.71%; Average Survey 2nd Half 2018 42 SLACK ,JOHNSTON Nd Packet Pa. 2288 -- i 0.4.e Income Approach Analysis and Conclusion In estimating a capitalization rate for the subject property, the location of the subject property within a stable market in Marathon was taken into consideration. Based on our analysis, we have estimated an overall capitalization rate (OAR) of 7.0% in the application of the direct capitalization method. The overall rate has been applied to the estimated net operating income (NOI) which was estimated in the preceding section. Based on our analysis, the market value of the subject property has been estimated using the income approach as follows: 0 $48,230 NOI / 7.0% OAR= $689,000 a a LO N 43 SLACK ,JOHNSTON Nd Packet Pa. 2289 -- i 0.4.e SALES COMPARISON APPROACH The sales comparison approach produces an estimate of value for real estate by comparing recent sales of similar properties in the subject's surrounding or competing area. Inherent in this approach is the principle of substitution, which states that when a property is replaceable in the market, its value tends to be set at the cost of acquiring an equally desirable substitute property, assuming that no costly delay is encountered in making the substitution. By analyzing sales which qualify as arm's-length transactions between willing, 0 knowledgeable buyers and sellers, price trends can be identified from which value parameters may be extracted. Comparability in physical, locational, and economic characteristics are important criteria in evaluating the sales in relation to the subject property. a The sales comparison approach begins with researching recent relevant property sales and current offerings throughout the competitive area and selecting those properties 0 considered most similar to the subject. The sales and offerings are then analyzed, taking into consideration relevant factors of a physical, functional, or locational nature, as well as the time of sale and any change in economic conditions which may have occurred as of the date of valuation. The sales are then put into a meaningful unit of comparison, (i.e., U) price per unit or price per square foot) and adjustments to the comparable properties are 2- made based on comparison to the subject and a conclusion of value is made. The validity of this approach is dependent upon the availability and relevancy of the data. Recent sales of properties having characteristics similar as the subject property have been collected and analyzed. The most widely used and most market-oriented unit of comparison for office condominium units like the subject property is the sales price perLO square foot of useable area. In this analysis, the research concentrated on office condominium units located within the C14 subject market area. It was noted, there are no recent sales within the subject project. Sales within six complexes have been presented in this report. As will be discussed, due to a lack of office condominium sales in Marathon, our search area included all of the Florida Keys. The sale transactions occurred from March, 2017 through May, 2019 and represent the most recent market activity for office condominium units in this market. The comparable sales range in unit size from 897 to 2,800 square feet and were built between 1978 and 1991. The sales prices reflect a range from $193.53 to $393.21 per square foot. A summary of the sales are presented on the following page. A map showing their location in relation to the subject follows. Photographs of the sales and listings are presented in the addenda. 44 SLACK ,JOHNSTON Nd Packet Pa. 2290 -- i 0.4.e N U V) J N J 11;5O N U N U J (D a > J N J O U U I N J O a) N LCo = J a m am �_ wm U Cd U N (� a�i 2 0 U) aTi Y- r Y in w s Y Co m o o Co C r m 0 E Z C 01 N ro F -cc U a _ m > Co T a Uj LL O E (i C O d Co 13)� O N 1017 W' a) cc)0 L ,� C (D O Q Q 0 7 0 W Co N 'V W O .0 � UL (n WQ F W O W O m O m O �D 61 N m O (g m � N Co Z5 QI LL Ol W N 61 N N m m N O1 u N N N N O W LL Lm lm I O ro Cq N O l37 CO U CY (o C0 LO LO N 00 Co LO N W a O N 00 00 m N m Cq LL W V-T fA V3 V3 V3 fA V3 V3 V3 fA a (n w o 0 0 0 0 0 0 0 0 0 J V C 0 C C C 0 C C C 0 ui(ri LO o v o LO m LO r ¢ � titir- �o00 f- N (n LL N N LO LO N ti V N (h N G$ V3 fA V3 V3 V3 fA V3 V3 V3 fA W J � N J W LL N N O LO O O r (h N V V Cq q N � O to D to F- LU r r N N N r r LL Z Z w w 00 1-Co 00 rn CO ti Co 00 Or r r r r r T r J13 < F j i oI T 0 0 Q LLZ U F W m V Co (h LL LL O LL O LO CD F V (D _ r2 Z O C9"OO O T CD (� T- Z (0 N Co = CD O Co CN v y m 0 U o > m > 2 ip 2 N 0 aNi > U 0 QU c O° c (D � �ra M Co N7 Z a U) oU c Oa 0 o °aa0A3 � -C Viz N o � Cn O OU O OD N 00 C) � J (DLO5 TL'5 Y ' YN ta Tn 0Co O r N Co It LO m Z 45 SLACK .JOHNSTON Nd Packet Pa. 2291 -- i 0.4.e COMPARABLE SALES MAP Condominium Sales kf a a4r Hart;as�A ttr�m!VrPrttxtrsttt �(N'u%£UtttBNk�ti tl�diadt�np Vinsry', .�. i;4ttYt T"i aad a^t, 4�Ml�tr4NpYyykk�A'f�' � �aLti4r,�'kuw�:„ i^.y MI�Nr�rt�on�� � �4rrrNYt�iry, � � o00000 � o Uis i ftredAero W Rader s NwN ��`ftlNmS�"�.wN, CD � � w,.,. mo��rw+Nti^a� a^� � � trN Yd r t�V ry, ' MONR OEFLA 1J111NL1Flfl s ,. ® his Tt,wry, Perky 4", S and T6 hyC T taon,n a t 5u9ad ,w,ratmus. a ',..,' �� �;N4�ar4rtrFti'�,ty 6hure�,; ,,. ,- (W1frtAk�tuat�U,�➢dtltrid�„ ; ;:ntVP4'N`y "a; eY;F'aink, 0 t�av�1✓tdr $�etaY�� , e M � Tturnda'o'iti qy 44er qs W t f, r t 1,,, , a 0mi 5 10 15 e CD E 0 46 SLACK .JOHNSTON Nd Packet Pa. 2292 -- i 0.4.e Discussion of Comparable Sales Condominium 1 is the Gulfside Village located at 5800 Overseas Highway in Marathon. Gulfside Village is an office/commercial project constructed in 1987. The building is one story. There is surface parking. Since January, 2017, three sales of units have taken place. The units sold ranged in size from 1,421 to 2,800 square feet. The larger of the sales included two adjacent units. The sales took place in March, 2017, May, 2018 and August, 2018. The sales prices ranged from $275,000 to $575,000 or from $193.53 to $205.36 per square foot. Condominium 2 is the 1st Professional Centre located at 5701 Overseas Highway in Marathon. There has been only one recent sale of a unit in this project. 1st Professional Center is an office project constructed in 1979. The building is one story. There is surface parking. The unit sold contains 2,556 square feet and is utilized as medical space. The sale took place in May, 2019. The sales price was $580,000; however, approximately $30,000 was allocated to equipment resulting in an adjusted price of $550,000 for the real estate only. The adjusted sale price equates to $215.18 per square foot. Condominium 3 is the Key West Professional Plaza Condominium located at 1111 12' Street in the New Town section of Key West. Key West Professional Plaza is an office U) condominium building constructed in 1985. The building is 4 stories and contains a total 2- square footage of 60,583. There is surface parking. There have been two recent sales of units in this property. The first sales took place in June, 2018. This unit contains 936 square feet and is located on the first floor. The sales price was $264,000 or $282.05 per square foot. The second sale took place in February, 2019. The sales price was $780,000 or $388.83 per square foot. This unit is also located on the first floor. �s Condominium 4 is the Kennedy Center Condominium located in the New Town section `O of Key West at 1010 Kennedy Drive. There have been two recent sales of units in this building. Unit 201 sold in January, 2018. This unit contains 1,208 square feet and the sales price was $475,000 or $393.21 per square foot. According to the realtor, the unit was purchased by an owner/user for a real estate office. Unit 306 sold in July, 2017. This unit contains 897 square feet and the sales price was $229,000 or $255.30 per square foot. According to the realtor, this unit was purchased by an adjacent unit owner for expansion. Condominium 5 is the Roosevelt Suites Condominium. There has been only one unit sold in this project in recent years. This is a two-story building constructed in 1983. Unit G sold in May, 2018 for $365,000. The unit contains 1,133 square feet. The sales price per square foot was $322.15. 47 SLACK ,JOHNSTON Nd Packet Pa. 2293 -- i 0.4.e Condominium 6 is Offices at Northside Condominium located in the New Town section of Key West at 3144 Northside Drive. This property was constructed in 1991. There has been one recent sale of a unit in this project. Unit H(a) sold in November, 2018. This unit contains 1,025 square feet and the sales price was $297,000 or $289.76 per square foot. According to the realtor, the unit was purchased by an owner/user for an accounting office. Adjustment Factors Property characteristics and sale terms considered in our analysis are location, time, age and condition of the property. These items have been analyzed and compared to the subject property as is summarized in the preceding section. The location of Condominiums 1 and 2 sales are considered similar to the subject and do not require adjustment for overall location. Condominiums 3, 4, 5 and 6 are located in Key West and considered slightly superior in location. a� All of the comparable sale condominium projects are similar in age and condition and do not require any adjustments. The sales took place between March, 2017 and May, 2019. Based on our research and conversations with broker's familiar with the subject's market, we have determined that the market has been relatively stable over the past two years for office space. U) The sales range in price from $193.53 to $393.21 per square foot. Gulfside Village I (Condo 1) and 1st Professional Center (Condo 2) are most similar to the subject being � located in Marathon; however, the units sold in this project are considered inferior in terms of condition and frontage to the subject unit. Based on this analysis, we have estimated the market value for the subject property as follows: �s 2,875 Square Feet x $225 Per Square Foot= $646,875 `O 2,875 Square Feet x $250 Per Square Foot= $718,750 Concluded: $700,000 48 SLACK ,JOHNSTON Nd Packet Pa. 2294 -- i 0.4.e RECONCILIATION AND FINAL VALUE ESTIMATE The purpose of this appraisal is to provide an estimate of the market value of the fee simple interest in the subject property, in its "as is" condition, as of the date of valuation. The subject property is comprised of two office condominium units within the Marathon Professional Center. In this analysis, we have used the income and sales comparison approaches to value to estimate the market value of the property. As the subject unit is a single unit and a portion of the common areas, the cost approach was not considered applicable. In the preceding sections of this report, indications of value for the property, based on the two appraisal approaches indicated the following values: Income Approach: $689,000 Sales Comparison: $700,000 The income is based on the principle of anticipation concerning market rent and net operating income. Within the income approach, the income and expense estimates utilized were supported by a recent survey of competitive buildings in the subject market area. Based on the scope of this appraisal, we utilized the direct capitalization method. The conclusions made concerning market rent, occupancy, expenses, capitalization rates, etc., are considered realistic in view of current market conditions. U) The sales comparison approach tends to be relied upon more heavily by purchasers of 2- owner/user properties. The reliability of this approach is good when there are recent sales of similar properties on which to base a comparison. Several recent sales involving similar office condominium properties were researched for use in the sales comparison approach. Our analysis required consideration of differing property characteristics, as compared with those of the property being appraised. Most of the comparable sales are �s owner users. Based on our research, owner users place most reliance on comparableLO sales when making purchase decisions. Given the quality of the data applied, this approach is considered a reliable indicator of the subject's market value. In determining final value estimate, most reliance was placed on the sales comparison 4) approach to arrive at our estimate of market value. Based on our investigation and analysis, we have formed the opinion that the market value of the fee simple interest in the subject property in its "as is" condition, as of April 24, 2019, was as follows: SEVEN HUNDRED THOUSAND DOLLARS ($700,000). 49 SLACK ,JOHNSTON Nd Packet Pa. 2295 -- i 0.4.e ADDENDUM A—Photographs of the Subject Property a Y I ✓/�l/,/./.W ri�yG4+fia i / ri ..�,...,�„ », . r� .„....��... .. ........ �.....„ h,�rsuvii � �1� �S i View of subject condominium project from Overseas Highway. 2- Vd ��St LO M C E r' / r View of waterfrontage on southern boundary of subject site. 50 SLACK ,JOHNSTON Nd Packet Pa. 2296 -- i 0.4.e Photographs of the Subject Property r�il% 0 i r ! srir,f� I��%✓F bi///O/„�'/��11��), / rli,,,.,..1����� ( / � '11 � „ � View of western elevation of subject condominium project from Overseas Highway. �,' " tt Ijoy � r� CD� CD NN i % ,�i////l/�ii�� � ii /,iiii �'iif�,l✓ ii�%%/�i � o�%%i/�����f���/�% 'll�IplglllJllll�����(/� °a�' 1 View of eastern elevation of subject condominium project. 51 SLACK ,JOHNSTON Nd Packet Pa. 2297 -- i 0.4.e Photographs of the Subject Property ill,vgPdi arr/ieP J HIM �j �� � Reception area. U) 2 i Vu V ers i cv �� . ca M „oo Conference room. 52 SLACK ,JOHNSTON Packet Q. 2298 -- i 0.4.e A� 1 r �u Virnmrry � l � r Bull pen area. LO a CD C) It- CD cv 4i C 4) Executive office. 53 SLACK ,JOHNSTON Nd Packet Pa. 2299 -- i O.4.e ADDENDUM B — Photographs of the Comparable Sales and Rentals SALE 1 — Gulfside Village rr,;, r rrr�io 6 � r SALE 2 — 1st Professional Centre ------------------ ✓, LO w r E i : i 54 SLACK ,JOHNSTON Nd Packet Pa. 2300 -- i O.4.e SALE 3 - Key West Professional Plaza N r j I l i SALE 4 - Kennedy Center IY�j1111,.� r i c'el a E r rg� 55 SLACK ,JOHNSTON Xd Packet Pa. 2301 -- i 0.4.e SALE 5 - Roosevelt Suites o / €_�it//iii,'/ 1;8.::..II i ����o, ,,,,,////�r IPI���� �111 iu+, �iVVV�u4� i ���or✓,i%Ll r a SALE 6 — Offices at Northside E I �)✓��I �! i ��U�f �, rl l� " �,i �i t r � a �� '%/%/�//1� �%///l0 �//' ///i 1/�� ate+ i 56 SLACK ,JOHNSTON Nd Packet Pa. 2302 -- i 0.4.e RENTAL 1 — 8085 Overseas Highway w w t 'qov �I Y n, a f 1,6� P PAY. aQ, _ RENTAL 2 — 6803 Overseas Highway 1 N - 57 SLACK .JOHNSTON Nd Packet Pa. 2303 -- i 0.4.e RENTAL 3 — 6400 Overseas Highway I RENTAL 4 — 10005-95 Overseas Highway -------------- Lo CD ay CD CD . 1 ' f E 58 SLACK .JOHNSTON Md Packet Pa. 2304 -- i 0.4.e ADDENDUM C — Qualifications of the Appraiser ANDREW H. MAGENHEIMER, MAI EDUCATION: Bachelor's Degree, The University of the South, Sewanee, Tennessee, 1986 EXPERIENCE: Over thirty years in the field of real estate, involved in various forms of consultation, appraisal, economic research and market analysis. June, 1997 to Present, Principal, Slack, Johnston & Magenheimer, Inc. August, 1991 to May, 1997, Senior Appraiser, Slack& Johnston, Inc. 22 February, 1987 to July, 1991, Staff Appraiser, Dixon & Friedman, Inc. GENERAL APPRAISAL EXPERIENCE: 0 Appraisals - Vacant land, environmentally sensitive land, aviation facilities, industrial facilities, shopping centers, office buildings, apartment buildings, residential developments and single-family residences. Consulting - Economic research, market analysis, feasibility analysis and ad valorem real estate tax assessment appeals pertaining to industrial, commercial and residential properties. Litigation Support — Appraisals and consulting, including expert testimony, concerning various property types. AFFILIATIONS: Licensed Florida Real Estate Broker LO Florida State-Certified General Real Estate Appraiser, Certification No. RZ1073 N Appraisal Institute Member, MAI, Certificate Number 10133, Continuing Education Completed 2002 President of the South Florida Chapter of the Appraisal Institute Member of the Miami Board of Realtors Member of the Florida Keys Board of Realtors Corporate Member of Florida Airport Council (FAC) 59 SLACK ,JOHNSTON Nd Packet Pa. 2305 -- i 0.4.f SLACK JOHNSTON IVIAC>~NHEIMER REAL.ESTATE APPRAISERS&CONSULTANTS 7245 S.W.87TH AVENUE,SUITE 300 Mum,FLORIDA 33173 a APPRAISAL OF REAL PROPERTY a UNITS B AND C OF MARATHON PROFESSIONAL CENTER, A CONDOMINIUM 2945.2955 OVERSEAS HIGHWAY MARATHON, MONROE COUNTY, FLORIDA 33050 U) 06 co APPRAISAL REPORT U) SJM FILE: 19623.2 Lo PREPARED FOR E MR. KEVIN G. WILSON, P.E. ASSISTANT COUNTY ADMINISTRATOR MONROE COUNTY 102050 OVERSEAS HIGHWAY KEY LARGO, FL 33037 1 Packet Pg. 2306 0.4.f SLACK JOHNSTON MAGENHEIMER REAL EST^TE APPRAISERS CONSULTANTS ANDREW H.MAGENHEIMER,MAI THEODORE W.SLACK,MAI CERT.GEN.RZ1073 (1902-1992) THEODORE C.SLACK,MAI (1931-2015) SUE BARRETT SLACK,MAI (RE-nRED) May 31, 2019 Mr. Kevin G. Wilson, P.E. Assistant County Administrator Monroe County 102050 Overseas Highway Key Largo, Florida 33037 RE: Appraisal of Real Property, Units B and C of Marathon Professional Center, A Condominium, 2945-2955 Overseas Highway, Marathon, Monroe County, Florida 33050 O SJM File: 19623.2 Dear Mr. Wilson: a� U) At your request, we have prepared an appraisal of the above referenced property. The purpose of the appraisal is to provide an estimate of the market value of the fee simple interest in the subject property in its "as is" condition as of April 24, 2019, the effective date of the appraisal and visit to the subject property. U) The subject property consists of two office condominium units located within the Marathon Professional Center, a Condominium, at 2945-2955 Overseas Highway in Marathon, Monroe County, Florida. Marathon Professional Center is comprised of a two-story office building with surface parking. The building was constructed in 1973 and converted to 3 condominium units in 2006. The building contains a total of approximately 5,722 square feet. Marathon Professional Center is situated on a mostly rectangular site that has a future land use designation of Mixed Use Commercial and a zoning classification of MU (Mixed Use). The site contains approximately 16,000 square feet or 0.37 acre. Site improvements include asphalt-paved surface parking and minimal landscaping. The site has approximately 60 feet of frontage on a navigable canal. The subject, Units B and C, contain approximately 2,847 square feet. Unit B contains 1,786 square feet and is comprised of ground floor (1,332 sq.ft.) and second floor (454 sq.ft.) space. The ground floor space is occupied by the owner's law firm and built out as professional office space. It is built out with good quality office finishes. The second for is used for work space and storage. Unit C contains 1,061 square feet and is located at the rear of the property. It is built out as professional space and rented to a tenant. There is also 100 square feet of storage space used by the property owner. 2 SLACK,JOHNSTON&MAGENHEIMER,INC. 7245 S.W.87TH AVENUE,SUITE 300,MIAMI,FLORIDA 33173 TELEPHONE(305)670.21 1 1 • EMAIL: SJMIAMI@AOL.COM Packet Pg. 2307 0.4.f Mr. Kevin Wilson May 31, 2019 The condominium appears to have adequate, unassigned parking. Ownership of Units B and C is held by Wolffe Family Holdings, Inc. The scope of this appraisal is to estimate the fee simple market value of the subject property and we did not review or consider any leases. The appraisal report states our opinion of market value, subject to various assumptions and limiting conditions contained in this report. The property visit and analyses forming the basis of our valuation have been performed by the undersigned. The appraisal has been prepared in accordance with the Uniform Standards of Professional Appraisal Practice (USPAP), as adopted by the Appraisal Standards Board of the Appraisal Foundation. Based on our investigation and analysis, we have formed the opinion that the market value of the fee simple interest in the subject property in its "as is" condition, as of April 24, 2019, was as follows: SIX HUNDRED TWENTY THOUSAND DOLLARS U) ($620,000). The following report summarizes the results of our investigation and the explanation of the approaches to value. Additional support is retained in the appraisers' file. 06 U) Respectfully submitted, SLACK, JOHNSTON & MAGENHEIMER, INC. LO 44W/de— C14 Andrew H. Magenheimer, MAI CERT.GEN.RZ1073 3 SLACR JOHNSTON Packet Pg. 2308 0.4.f Table of Contents SUMMARY OF SALIENT FACTS AND CONCLUSIONS ............................................5 CERTIFICATION...............................................................................................................7 ASSUMPTIONS AND LIMITING CONDITIONS ...........................................................8 IDENTIFICATION OF THE PROPERTY....................................................................... I I LEGAL DESCRIPTION................................................................................................... 12 OWNERSHIP AND HISTORY OF THE PROPERTY ................................................... 12 PURPOSE, INTENDED USE AND DATE OF THE APPRAISAL................................ 13 SCOPE OF THE APPRAISAL......................................................................................... 13 DEFINITION OF VALUE AND INTEREST APPRAISED ........................................... 15 EXPOSURE AND MARKETING TIME......................................................................... 16 NEIGHBORHOOD ANALYSIS ...................................................................................... 17 DESCRIPTION OF THE SITE.........................................................................................25 DESCRIPTION OF THE IMPROVEMENTS..................................................................28 REAL ESTATE TAX ANALYSIS...................................................................................30 LANDUSE AND ZONING .............................................................................................31 HIGHEST AND BEST USE.............................................................................................34 SUMMARY OF VALUATION AND ANALYSIS .........................................................36 SALES COMPARISON APPROACH .............................................................................44 2- RECONCILIATION AND FINAL VALUE ESTIMATE ...............................................49 ADDENDUM A — Photographs of the Subject Property..................................................50 ADDENDUM B —Photographs of the Comparable Sales and Rentals............................57 06 ADDENDUM C — Qualifications of the Appraiser ..........................................................62 U) LO 4 SLACR JOHNSTON Packet Pg. 2309 0.4.f SUMMARY OF SALIENT FACTS AND CONCLUSIONS Property Appraised: Units B and C Marathon Professional Center, a Condominium 2945-2955 Overseas Highway Marathon, Florida 33050 Property Type: Office condominium units 0 Folio Number: Unit B: 00321661-000200 Unit C: 00321661-000300 2018 Assessment Information: a� Total Market Value: $307,784 Real Estate Taxes: $4,103.38 Ownership: Wolff Family Holdings, Inc. a� 2955 Overseas Highway Marathon, FL 33050 Interest Appraised: Fee Simple Improvements: Unit B contains 1,786 square feet. Approximately 1,332 square feet is located on the ground floor and 454 square feet is located on the second floor. The unit is built out with good quality office finishes. �s Unit C contains 1,061 square feet. Approximately 960 LO square feet is leased and used for professional office space. The unit is built out with good to average quality office finishes. Approximately 101 square feet is used for storage. Land Use: Mixed Use Commercial; City of Marathon Zoning: MU (Mixed Use); City of Marathon Date of Valuation: April 24, 2019 Date of Report: May 31, 2019 5 SLACK ,JOHNSTON Nd Packet Pa. 2310 -- i 0.4.f Market Value Indications: Sales Comparison Approach: $620,000 Income Approach: $615,000 Final Value Estimate: $620,000 AERIAL PHOTOGRAPH OF SUBJECT CONDOMINIUM �91Y CL I �'�Y�I 8116hg1�'�l i p ul lil� I� w„ h r For illustrative purposes, not to scale. as E 6 SLACK ,JOHNSTON Nd Packet Pa. 2311 -- i 0.4.f CERTIFICATION 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. 0 we have no present or prospective interest in the properties that are the subject of this report and no personal interest with respect to the parties involved. we have no bias with respect to the properties that are the subject of this report or to the parties involved with this assignment. C 22 our engagement in this assignment was not contingent upon developing or reporting 0 predetermined results. 4T 0 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 a� 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. 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 (L of Professional Appraisal Practice of the Appraisal Institute, which include the Uniform U Standards of Professional Appraisal Practice (USPAP). 06 co U) the undersigned has made a visit to the property that is the subject of this report. Kimberly Magenheimer, CERT. GEN.RZ1386,provided significant real property appraisal assistance to the person signing this certification. LO the use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representatives. we have not performed any services regarding the subject property within the prior three years. as as of the date of this report, Andrew H. Magenheimer, has completed the continuing education program of Designated Members of the Appraisal Institute. SLACK, JOHNSTON & MAGENHEIMER, INC. 440W/de— Andrew H. Magenheimer, MAI CERT.GEN.RZ1073 7 SLACK ,JOHNSTON Nd Packet Pa. 2312 -- i 0.4.f ASSUMPTIONS AND LIMITING CONDITIONS The appraisal is subject to the following assumptions and limiting conditions: 1. No responsibility is assumed for the legal description or for matters including legal or title considerations. Title to the property is assumed to be good and marketable unless otherwise stated. 2. No legal opinion related to a title search was provided and all existing liens and encumbrances, including deed restrictions and developers' agreements, have not been investigated unless otherwise stated. The property is appraised as though free and clear. 3. Responsible ownership and competent property management are assumed. 4. The information furnished by others has been gathered from sources deemed to be reliable, however, no warranty is given for its accuracy. 5. All engineering and surveying is assumed to be correct. Any sketches, plats, or drawings 0 included in this report are included to assist the reader in visualizing the property. We have made no survey of the property, and assume no responsibility in connection with such matters. as U) 6. It is assumed that there are no hidden or inapparent conditions of the property, subsoil, or 2- structures that render it more or less valuable. No responsibility is assumed for unusual soil conditions and no opinion as to these matters is to be inferred or construed from the attached report other than those specifically stated in the report. Unless stated otherwise 06 the soil conditions of the subject property are assumed to be adequate to support development utilizing conventional construction techniques. We recommend the client obtain an opinion from a competent engineering firm. 7. It is assumed that there is full compliance with all applicable federal, state, and local LO environmental regulations and laws unless noncompliance is stated, defined, and considered in the appraisal report. N 8. It is assumed that all applicable zoning and use regulations and restrictions have been complied with, unless a nonconformity has been stated, defined, and considered in the E appraisal report. 9. It is assumed that all required licenses, certificates of occupancy, consents, or other legislative or administrative authority from any local, state, or national government or private entity or organization have been or can be obtained or renewed for any use on which the value estimate contained in this report is based. 10. It is assumed that the utilization of the land and any improvements is within the boundaries or property lines of the property described and that there is no encroachment or trespass unless noted in the report. 8 SLACK ,JOHNSTON Nd Packet Pa. 2313 -- i 0.4.f 11. Any proposed or partially completed improvements included in this report are assumed to be completed in accordance with approved plans and specifications and in a workmanlike manner. 12. Our estimates of future values were formulated based upon market conditions as of the date of appraisal, considerate of future projections concerning supply and demand. The appraiser has no responsibility for significant events that alter market conditions subsequent to the effective date or dates of appraisal. 0 13. This study is to be used in whole and not in part. No part of it shall be used in conjunction with any other appraisal. Publication of this report or any portion thereof without the written consent of the appraiser is not permitted. 14. The appraiser, by reason of this report, is not required to give further consultation, testimony, or be in attendance in court with reference to the property in question unless arrangements have been previously made. 0 15. Neither all, nor any part of the contents of this report (especially any conclusions as to value, the identity of the appraiser, or the firm with which the appraiser is connected), shall be disseminated to the public through advertising, public relations, news, sales, or a� other media without the written consent and approval of the appraiser. The use of this U) report in any public offering or syndication document is specifically prohibited. 2- 16. Unless otherwise stated in this report, the existence of hazardous substances, including without limitation asbestos, polychlorinated biphenyls, petroleum leakage, or agricultural Co chemicals, which may or may not be present on the property, or other environmental conditions, were not called to the attention of, 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, (s is not qualified to test such substances or conditions. If the presence of such substances, LO such as asbestos, urea formaldehyde foam insulation, or other hazardous substances or environmental conditions, may affect the value of the property, the value estimated is predicated on the assumption that there is no such condition on or in the property or in such proximity thereto that it would cause a loss in value. No responsibility is assumed a for any such conditions, nor for any expertise or engineering knowledge required to E discover them. It is recommended that the client retain an expert in this field, if needed. 17. Section 404.056(8) of the Florida Statutes requires that prior to or at the time a rental agreement or contract for any building is executed, the following disclosure statement must be issued: "RADON GAS: is a naturally occurring gas that, when it is has accumulated in a building in sufficient quantities, may present risk to persons who are exposed to it over time. Levels of radon that exceed federal and state guidelines have been found in building in 9 SLACK ,JOHNSTON Md Packet Pa. 2314 -- i O.4.f Florida. Additional information regarding radon and radon testing may be obtained from your public health unit." It is assumed that sellers will comply with this law. 18. Disclosure of the contents of this report by the appraiser is controlled by the Appraisal Institute of which one or more signatures of this report is an MAI member and by the Florida Department of Professional Regulation, Division of Appraisal State Certification. The analysis and value conclusions, as well as non-public information about the subject property, are confidential matters and cannot be divulged to any persons other than the 0 party for whom the report is prepared. Exceptions to this confidentiality provision are requests by committees of the Appraisal Institute or the Florida Department of Professional Regulations for peer review, and subpoenas by any court having jurisdiction to request production of the report. 19. For valuation purposes, we have used our building area calculations. As noted, we are not architects or surveyors and it is strongly recommended a complete survey of the property be undertaken. As such, this appraisal is subject to revision if the surveyed building areas differ from our calculations. Acceptance or use of this report constitutes acceptance of the preceding conditions. U) 06 �s CO a U) LO cv 10 SLACK ,JOHNSTON Nd Packet Pa. 2315 -- i 0.4.f IDENTIFICATION OF THE PROPERTY The subject property consists of two office condominium units located within the Marathon Professional Center, a Condominium, at 2945-2955 Overseas Highway in Marathon, Monroe County, Florida. Marathon Professional Center is comprised of a two-story office building with surface parking. The building was constructed in 1973 and converted to 3 condominium units in 2006. The building contains a total of approximately 5,722 square feet. Marathon Professional Center is situated on a mostly rectangular site that has a future land use designation of Mixed Use Commercial and a zoning classification of MU (Mixed Use). The site contains approximately 16,000 square feet or 0.37 acre. Site improvements include asphalt-paved surface parking and minimal landscaping. The site has approximately 60 feet of frontage on a navigable canal. The subject, Units B and C, contain approximately 2,847 square feet. Unit B contains a� 1,786 square feet and is comprised of ground floor (1,332 sq.ft.) and second floor (454 sq.ft.) space. The ground floor space is occupied by the owner's law firm and built out as professional office space. It is built out with good quality office finishes. The second for is used for work space and storage. Unit C contains 1,061 square feet and is located at the rear of the property. It is built out as professional space and rented to a tenant. There is also 100 square feet of storage space used by the property owner. The condominium appears to have adequate, unassigned parking. Ownership of Units B and C is held by Wolffe Family Holdings, Inc. The scope of this appraisal is to estimate the fee simple market value of the subject property and we did not review or consider any leases. Based on a review of information in the public records, there seems to be discrepancies concerning the size of the units that comprise the Marathon Professional Center. As such, we recommend a complete survey of the property be undertaken to include both the ground and second floors. The following is a summary of the building areas based on the Marathon Professional Center Condominium Documents (MPCCD), Monroe County LO Property Appraiser (MCPA) and our building area calculations. Marathon Professional Center- Unit Area Reconcilation Unit MCPA SF MPCCD SF SJM SF A 2,670 2,402 2,875 B 1st Flr 1,332 B 2nd Flr 454 B Total 1,332 2,896 1,786 C 1,061 0 1,061 Total 5,063 5,298 5,722 MCPA - Monroe County Property Appraiser MPCCD - Marathon Professional Center Condominium Documents SJM - Slack, Johnston & Magenheimer ll SLACK .JOHNSTON Md Packet Pa. 2316 -- i 0.4.f For purposes of this appraisal, we reviewed the building plans included in the condominium documents, verified many of the measurements during our site visit and calculated the building areas accordingly. Based on a review of the MCPA information, our measurements for 1) Unit A are slightly greater than theirs and 2) we concur with the ground floor areas of Unit B and Unit C. It appears the MCPA does not include the second floor of Unit B. Based on a review of the MPCCD, they only identify two units ("Unit A & B") and appears to transpose the numbering as compared to the other information in the public record. The MPCCD identifies "Unit A" as containing 1,364 square feet, plus 1,038 SF which appears to be the ground floor of what we believe to be Units B and C, respectively and "Unit B" as containing 2,896 square feet which appears to be what we believe to be Unit A. For valuation purposes, we have used our building area calculations. As noted, we are not architects or surveyors and it is strongly recommended a complete survey of the property be undertaken. As such, this appraisal is subject to revision if the surveyed building areas differ from our calculations. LEGAL DESCRIPTION U) The following legal description has been taken from a September, 2006, warranty deed recorded in ORB 2239, at Page 1622: Unit B and Unit C, of MARATHON PROFESSIONAL CENTER, A CONDOMINIUM, according to the Declaration of Condominium thereof, as recorded in Official Records Book 2215, Page 389 of the Public Records of � Monroe County, Florida, and any amendments thereto, together with an undivided interest in the common elements appurtenant thereto. LO OWNERSHIP AND HISTORY OF THE PROPERTY N According to the Monroe County tax roll, ownership of the subject property is currently held by Wolfe Family Holdings, Inc., 2955 Overseas Highway, Marathon, Florida 33050. As noted, the subject's project (Marathon Professional Center) was originally constructed in 1973. The property was converted to condominium ownership in 2006 by the current owners. In September, 2006 a warranty deed was recorded in ORB 2239 at Page 1622, indicating a purchase price of$281,900; however, it is our understanding this transaction was between related parties. The subject property is not currently listed for sale. Based on discussion with the owner, a portion of Unit C (960 sq.ft.) is rented on a month-to- month basis for $16.88 per square foot. The tenant reported leased the space in 2014 for one year and subsequently continued to occupy monthly. 12 SLACK ,JOHNSTON Nd Packet Pa. 2317 -- i 0.4.f The annual condominium association fees are $11,043 or $3.88 per square foot. Based on discussion with the condominium association representative, there are no special assessments expected in the near future. PURPOSE, INTENDED USE AND DATE OF THE APPRAISAL The purpose of this appraisal is to develop and report an opinion of the market value of the fee simple interest in the subject property in its "as is" condition, as of April 24, 2019. The date of the report is May 31, 2019. The intended user of this report is Monroe County. The intended use of the appraisal is to establish a basis for the potential purchase of the property by Monroe County from a willing seller. There are no other intended users or intended uses of this appraisal. a SCOPE OF THE APPRAISAL The scope of this appraisal report is defined by the purpose, which is to estimate the current market value of the fee simple interest in the subject property in its "as is" condition as of a current date of value. We have inspected the neighborhood and have made a recent visit to the property. Subsequent to our site visit, research was conducted in support of an estimation of the highest and best use, as of the date of valuation. The highest and best use analysis 06 considers all physically possible, legally permissible and economically feasible uses to which the property can be put as improved. After concluding the highest and best use, the valuation methods were considered. The appraisal process can include three basic approaches to value. These are the income, LO sales comparison, and cost approaches. The application of these approaches is determined by the type of property being appraised, as well as the scope of the valuation assignment. The sales comparison and income approaches to value have been utilized in the valuation of the fee simple interest in the subject property. As the subject property E consists of one single unit within a larger condominium project, with shared common cu elements, the cost approach is not an applicable approach to value. Z In the sales comparison approach, we researched comparable condominium unit sales and listings used for professional office uses. As stated, the subject property represents two units within a 3-unit office condominium project. The subject unit is partially owner- occupied and mostly used as professional offices. Our sales research focused on office condominium units in the subject's market area, Monroe County, for purposes of comparison to the subject property. The sales included in this report are considered of good quality and representative of the of the best available market data. Analysis of the 13 SLACK ,JOHNSTON Nd Packet Pa. 2318 -- i 0.4.f selected sales included reviewing the deed and confirming sale details with one or more of the parties to the transaction, or other reliable sources, as stated herein. In the income approach, we researched similar rental properties concerning income and expense information. A market survey of comparable professional office spaces available for lease within the subject area was also conducted to ascertain rental rates. The data was obtained through interviews with leasing agents and property managers. The final step in our analysis is a reconciliation of the appraisal methods used. The quantity and quality of data used, and the reliability to their value indications, are the basis for the final conclusion of value. 06 CO �s U) C LO CD CD 4i C 0 14 SLACK ,JOHNSTON Nd Packet Pa. 2319 -- i 0.4.f DEFINITION OF VALUE AND INTEREST APPRAISED The Uniform Standards of Professional Appraisal Practice (USPAP 2018-19) defines Market Value as "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 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." We have relied on the Dictionary of Real Estate Appraisal, Sixth Edition, definition of Market Value 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 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 C 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 best interests; U) 3. a reasonable time is allowed for exposure in the open market; 4. payment is made in cash in United States dollars or in terms of financial arrangements comparable thereto; and U) 5. the price represents the normal consideration for the property sold unaffected by C special or creative financing or sales concessions granted by anyone associated with the sale. (Federal Register 77472,Volume 75,No.237,December 10,2010) `O Other pertinent definitions from the Dictionary of Real Estate Appraisal, Sixth Edition, as C14 follows: C Fee Simple Estate is the "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." Exposure Time is "the estimated length of time to property interest being appraised would have been offered in the market prior to the hypothetical consummation of a sale at market value on the effective date of the appraisal." 15 SLACK ,JOHNSTON Nd Packet Pa. 2320 -- i 0.4.f 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 the appraisals." Condominium is a "multiunit structure, or a unit within such a structure, with a condominium form of ownership." EXPOSURE AND MARKETING TIME The normal exposure period is considered to be the most probable amount of time necessary to expose and actively market the subject property on the open market to achieve a sale at a price consistent with the market value estimate and on terms consistent with the definition of market value recited herein. The length of the exposure time is a function of several factors including price, terms, investment quality and exposure to a given market. A review of current market activity for office condominiums within Monroe County, as well as conversations with broker's active within this market, was performed in order to estimate an exposure time for the subject property. Most brokers indicated that exposure/marketing times are typically less than one year, if the property is priced realistically. Investor and market surveys typically do not cover Key West or the Florida Keys (Monroe County, Florida). The PWC Real Estate Investor Survey — 1st Quarter 2019 reflects a marketing time for the Southeast Florida office market in the range of 1.0 to 6.0 � months with an average of 3.3 months. Based on the marketing periods reflected by this survey and from the sales presented in this report, a typical exposure period for the subject property was estimated to be up to 12 months. We have further estimated a LO marketing time of up to 12 months. 16 SLACK ,JOHNSTON Nd Packet Pa. 2321 -- i 0.4.f NEIGHBORHOOD ANALYSIS The subject property is located in the Middle Keys region of Monroe County. Key West is the southernmost island in the archipelago known as the Florida Keys, a chain of over 800 subtropical islands off the southern tip of Florida's mainland. The Keys primarily consist of a network of 30 inhabited coral islands covered with tropical vegetation arching southward between the shallows of Florida Bay on the north side and a barrier reef of living coral lying in the Atlantic Ocean to the south. The islands span a distance of over 100 miles. The climate is warm year-round. Monroe County covers a total of 1,034 square miles of land area, and comprises two geographically distinct areas. The northern part of the county is at the southwestern end S of the mainland of Florida, and consists primarily of a portion of the Everglades with a few inhabitable areas. The second area is the true Keys, a series of islands beginning with North Key Largo and extending southwesterly 115 miles. Key West, the end of the a� island chain, is located approximately 160 miles southwest of Miami, 90 miles north of Cuba, and is the southernmost point in the continental United States. Key West is also e the county seat for Monroe County. a, A map of Monroe County is provided below. U) U Sharku �s 1, t) 1 � � kw Lq dq '40640 X, CD CD 1, f Gle N 1 ' V (D GrHdroat why;, �s " Mk Ftli; Ilk 17 SLACK ,JOHNSTON Nd Packet Pa. 2322 -- i 0.4.f As of 2018, Monroe County was populated with an estimated 73,940 residents. The majority of the population is divided among the various areas of unincorporated Monroe County, with the largest population group in the Key West census division. The City of Key West proper comprises approximately 30% of Monroe County with a population of 24,509 in 2018. The City of Marathon had a population of 8,235 and the Village of Islamorada had a population of 5,990. The overall population in the Florida Keys has historically increased slightly each year since the 1940's; however, the 2010 census figures showed a slight decrease. The decrease is likely due to the exit of permanent residents, who were replaced by second home owners and transient residents. A decrease from 2017 to 2018 was also noted, likely due to the displacement of many residents due to Hurricane Irma in 2017. Overseas Highway, (U.S. Highway 1) is the only access from the mainland, by car, to all destinations in the Keys. It is the dominant commercial corridor throughout the county. Development along the highway includes a mixture of commercial, residential, industrial and tourist-related uses. While significant portions are zoned for commercial use, there are also many untouched tracts which have been purchased or targeted for purchase for natural preservation. a� As a result of the difficulties in gaining approvals for new development, the demand for large undeveloped tracts of land is almost non-existent in the private sector. Most new development takes place on already scarified sites or in the form of replacement of pre- existing structures. Most purchases of large tracts of land are made by governmental or conservation groups for preservation. Additional statistical information obtained from the Florida Legislature Office of � Economic and Demographic Research is provided on the following pages. �s LO N 18 SLACK ,JOHNSTON Nd Packet Pa. 2323 -- i 0.4.f Monroe unt Florida's 38th most populous county A�I�r rr1 crrrtria with 0.4%of Florida's population Marathon Key West � 0 Popuiabroldl Housing Census Population Monroe County Florida Housing Counts Monroe County Florida a 1900 Census 63.100 9,746,961 Housing units,2000 Census 51,617 7,302,947 1990 Census 70.024 12,930 071 Occupied 35,006 6,337,929 %change 1980-00 235% 32.7% Owner-occupied 21,893 4,441,709 2000Cer- 79509 15,902,024 Reroer-occupied 13,193 1,096,130 22 change 1990-00 2.0% 23.5% Vacant 16,531 965,018 2010 Census 73.090 18,801,332 Housing units,2010 Census 52,764 8,989,580 %change 2000-10 -02% 17.6% Occupied 32,629 7420,002 Age Owner-occupied 10,501 4,990,979 1� Under 10 years of age 15-1% 21.3% Border occupied14,128 2,421,823 %65 years of age and over 17.1% 17.3% Vacant 20,135 1,560,778 0 Race&Ethnicity %White alone 995% 75.0% Units Permitted %Black cr African American alone 57% 160% 1990 791 126,304 %Hispanic or Lati e(of any race) 206% 22.5% 2000 203 155,269 2010 271 38,679 ®_ Estimates and Projections 2011 135 42,360 2017 Estimate 76.009 20,404,142 2012 221 64,010 change 2010-17 52% 9.0% 2013 179 86 752 2020 Projection based on 2017 estimate 75.300 21,526,547 2014 189 04,075 U) %change 2017-20 -2.1% 5.1% 2015 282 109,924 2025 Projection based an 2017 estimate 75.055 23,061,892 2016 220 116,240 %change 2020-25 07% 7.1% 2017 247 122,719 2016 Median Age 480 416 Density PopWation Characteristics U 06�nguage spoken at home omerthan Persons per square mile English Monroe County Florida 2000 711 296 4 Persons aged 5 and over 23.2%+/-1 4% 28 3%+f-0.1% 100 2010 74.3 151.6 Place of btrth U) 2017 782 3820 Foreign born 17.8%+/-13% 199%Tf-0.1% Veteran status 4oNi and Farorelliy HousehoWs Civilian population 19 and over 11.41/,+f-0.6% 9.4'A+1-01 � Households Monroe County Florida Residence 1 Year Ago Total households,2000 Census 35.006 6,330 075 Persons aged 1 and over Family households,2000 Census 20387 4,210760 Same house 812%+/-181/. 8391/.+f-0.1% T- B, ith own children under 18 35.9% 42.3% Different house in the U.3- 17.5%+I-1.5% 15.1%+1-0.1 Total households,2010 Census 32.629 7,420,002 Same county in Florida 0.9%+/1 2% 92%+1_0.1% Familyhouseholds,2010 Census 18210 4,936476 Different county in Florida 3.6%+/-071% 0 V4.+1-0.1% %with own children under 18 327% 40.0% Different county in another state 5.1%+/-091 281%+1-0.1% Average Household S5ze,2010 Census 2.10 240 Abroad 14%+/-04% 10%+f-0.1% Average Family Size,2010 Census 270 3.01 d-=margin oferror based on e 90/conridence level. T ,I 1-1., B m a1 - m no,n.rei av .rs.e v IErgptloyercl by Vndustryq � Number of Establishments Percent of All Establishments 2016 preliminary Monroe County Florida 2016 preliminary Monroe County Florida All industries 4502 670,061 All industries 4,502 670,061 0 Natural Resource&Mining 44 5,360 Natural Resource&Mining 1 01 0.0% Construction 544 66,377 Construction 12.11/. 9.9% Manufacturing 87 20,504 Manufacturing 191% 31% Trade,Transportation and Utilities 967 141,643 Trade,Transportation and Utilities 21.5% 21.1% Information 56 10,921 Information 11% 1.6% Financial Activities 1. 71,938 Flnanoal Activities 11.3% 10.7% Professional&Business Services 796 154,679 Professional&Business Services 177% 23.1% Education&Health Services 202 71,153 Education&Health Services 6.3% 10.6% Leisure and Hospitality 735 55,437 Leisure and Hospitality 1631 0.3% Other Services 375 54,912 Other Services 031 0.2% Government 93 6,137 Government 2.1% 0.9% .aa ro rhrom ia rssir.d- 1 l SLACK .JOHNSTON Mid Packet Pa. 2324 -- i 0.4.f Monroe County Pnyei Enri loyf6u enk by industry Average Annual Employment, Average Annual Wage of All lndustries,2016 preliminary Monroe County Florida 2016 prelim inary Monroe County Florida All industries 41.621 0 309,000 All industries $39.120 $47,060 Natural Resource&Mining 04% 0.91/. Natural Resource&Mining $37365 $31 501 Construction 6.61/6 5.71A Construction $41,719 $47,342 Manufacturing 00% 4.31/. Manufacturing $39598 $57,824 Trade,Transportation and Utilities 170% 20.6% Trade,Transportation and Utilities $23002 $41,929 Information 10% 1.651. Information $51.857 $77,256 Financial ActiviI es 40% 6.51/. Fin ancial Activiti es $47576 $69701 Professional&Business Services 7.2% 15.51A Professional&Business Services $46.969 $56,930 Education&Health Services 7 0% 14.81/. Education&Health Services $47005 $48,616 Leisure and Hospitality 367% 14.11/. Leisure and Hospitality $30.690 $24,309 Other Services 3.5% 3.31A Other Services $35.005 $33,996 Government 13.9% 12.61A Government $56.451 $52,022 ,® Labor Force � Labor Force as Percent of Population Aged 18 and Older Monroe County Florida Unem ployment Rate Monroe County Florida 1990 638% 64.31/. 1990 27% 6.1% 2000 fi35% 63.71/. 2000 29% 3.7% 2010 670% 6221/. 2010 78% 11.1% 2017 687% 6201/. 2017 33% 4.2% Income and Financial Heafth Personal Income($000s) Monroe County Florida Per Capita Personal Income Monroe County Florida 1990 $1,920.134 $280,002569 1900 $23264 $10966 2000 $3,277332 $477,315,998 2000 $41240 $29744 %change 1990-2000 80.1% 83.51/. %change 1990-00 773% 49.0% 2010 $4,565 292 $720 062 952 2010 $62 250 $30 626 %change 2000-10 393% 52.51/. %change 2000-10 512% 29.9% 2011 $4,775953 $773,315,940 2011 $64.456 $40,494 %change 2010-11 46% 6.21/. %change 2010-11 34% 4.8% U) 2012 $5,286.235 $793,103,092 2012 $70.640 $41,000 %change 2011-12 107% 2.61/. %change 2011-12 96% 1.2% (� 2012 $5,115021 $790905,990 2013 $67.136 $40707 %change 2012-13 -3.21/, 0.71A %change 2012-13 -5.01/1 -0.5% 2014 $5,585070 $856401,910 2014 $72.630 $43,064 IL %change 2013-14 92% 7.21/. %change 2013-14 02% 5.8% v 2015 $5,904.521 $919,957,986 2015 $73.729 $45,441 ,,yt %change 2014-15 30% 74% %change 2014-15 15% 5.5% W 2016 $5,869.690 $947,207,472 2016 $74.230 $45,953 %change 2015-16 1.1% 3.01/. %change 2015-16 07% 1.1% CIO U) Earnings by Place of Work($OOOs) Median Income ° 1990 $933,568 $161317,329 Median Household Income $60,303+1-$1,862 $48,900+I-$200 2000 $1,672,967 $313,054,047 Median Family Income $73,383+1-$2727 $59,139+/-$205 %change 1990.2000 792% 94.11/. id=margin oferror based on a 90%confidence level. 2010 $2,099.697 $437,064,465 %change 2000-10 25 4% 39.61/. Percent in Poverty,2016 (� 2011 $2,145.664 $447,731,540 All ages in poverty 11.5% 14.0% %change 2010-11 22% 24% Under age 18 in poverty is0% 213% T- 2012 $2,256.641 $465,347,164 Ages 5-17 in families in poverty 17.9% 20.1% L 1 %change 2011-12 52% 3.9% 2013 $2279752 $479400,070 Education Cs %change 2012-13 1 0% 3.01/. Public Education Schools Monroe County 2014 $2404791 $607,929140 Traditional Setting(2017-16) School District Florida %change 2013-14 CD 5.51/1 5.91A Total(statetotal includesspedaldistrin) 17 3,206 N 2015 $2,586017 $541,836,991 Elementary 5 1,906 %change 2014-16 13.4% 13.01A Middle 0 506 2016 $2,648.806 $564,243,047 Senior High 5 114 %change 2015-16 10.1% 11.11/. Combination 7 507 Personal Bankruptcy Filing Rate Educational attainment (per 1,000 population) Monroe County Florida Persons aged 25 and older Monroe County Florida 12-Month Period Ending March 31,2017 0.99 210 %HS graduate or higher 91 0%+/-08% 87.2%+1-0.1% 12-Month Period Ending March 31,2010 1.03 1.91 %bachelor's degree or higher 311%+/-1.4% 27.9%+1-0.2% State Rank 46 NA 4-margin of.rror based one 90%confidence level. Inapt-a cn,-is QurI of Life Crime Monroe County Florida Workers Aged 16 and Over Monroe County Florida Cr me rate,2017(index climes per 100,000 population) 2 771 5 2,989.E Place of Work in Florida Admissions to prison FY 2016-17 190 28,783 Worked outside county of residence 4.3%+/-0.6% 17.5%+!-0.1% Admissions to prison per 100,000 Travel Time to Work population FY 2016-17 247.1 140.E Mean travel time to vork(minutes) 104+1 07 26.7+1-0.1 margin of error based on a 90%confidence Ieve1. 20 SLACK .JOHNSTON Nd Packet Pa. 2325 -- i 0.4.f Moil County Reported County Government Revenues es and Expenditures Revenue2015-16 Monroe County Florida' Expenditures 2015-16 Monroe County Florida' Total-All Revenue Account Codes Total-All Expenditure Account Codes ($000s) $420 503 6 $40,323,612 7 ($000s) $421,662.55 $38.724,720 62 Per Capita$ $5,634.72 $2,09746 Per Capita$ $5,54476 $2,01429 %ofTotal 100.0% 100.0% %ofTotal 98.4% 96.0% Taxes General Government Services- ($000s) $141,160.6 $12,835,034.6 ($000s) $56,092.96 $7.520,34277 Per Capita$ $1.056 23 $667.62 Per Capita$ $748.13 $301.18 %ofTotal 22.9% 31.0% %ofTotal 13.3% 18.6% Permits,Fee,and Special Assessments Public Safety ($000s) $19,409.0 $1,732,457.6 ($000s) $10040972 $9077,106.65 Per Capita$ $25522 $90.11 Per Capita$ $1,425.56 $472.15 ,® %ofTotal 4.5% 4.3% %ofTotal 25.3% 22.5% Intergovernmental Revenues Physical Environment ($000s) $52,473.1 $4,070,466.6 ($000s) $67,12013 $4450,501.04 Per Capita$ $690.01 $212.20 Per Capita$ $00272 $231.50 22 %ofTotal 12.2% 10.1% %ofTotal 15.7% 11.0% Charges for Services Transportation ($000s) $75,376.6 $12,526,050.9 ($000s) $25,554.64 $4.573,52057 Far Capita$ $99110 $651.55 Per Capita$ $336.04 $237.89 1� %ofTotal 17.6% 31.1% %ofTotal 6.0% 11.3% Judgments,Fines,and Forfeits Economic Environment ($000s) $3,403.6 $202,607.1 ($000s) $35,331.69 $1451,92679 Per Capita$ $44 76 $10.54 Per Capita$ $464.60 $75.52 %ofTotal 0.8% 0.5% %ofTotal 8.2% 3.6% Miscellaneous Revenues Human Services ($000s) $5,0410 $900 142 1 ($000s) $30,166.80 $3.212,101.93 Per Capita$ $76.81 $47.24 Per Capita$ $396.69 $167.00 %ofTotal 1.4% 2.3% %ofTotal 7.0% 8.0% Other Sources Culture f Recreation ($000s) $130,839.6 $8,039,852.7 ($000s) $5713.05 $1496,601.01 Per Capita$ $1.720.51 $418.20 Per Capita$ $75.14 $77.05 of Total 30.5% 19.9% %ofTotal 13% 37% Other Uses and N on-Op crating ($000s) $02 751.76 $6 041,997.10 All County Governments Except Duval-The consolidate d City of Jacksonville/D oval County Per Capita$ $1,101.32 $31420 I" agures on,lncludedlnmunlcipelmtalsratherthencountygovemmenttntals. %ofTotal 19.5% 15.0% Court-Related Expenditures U "(Not Court-Related) ($000s) $0713.OF $900,372.95 06 Per Capita$ $114.57 $46.83 CIO %ofTotal 2.0% 2.2% U) a State infrastructure State and t,ocA Taxation Transportation Monroe County Florida 2017 Ad Valorem Millage Rates Monroe County State Highway County-Wide Not County-Wide" (� Centerline Mlles 119.2 12,109.9 County 2.6957 07177 T- Lane Miles 301.3 43,019.1 School 3.3560 State Bridges Municipal 1 3260 Number 56 6783 Special Districts 04646 04362 LC8 "'MSTIJ Included In Not County-Wide"County"category State Facilities BuildingsrFaciliti es(min.300 Square Feet) Number 144 9.319 C14 Square Footage 305.093 63.971.060 State Owned Lands d® State Lands 4) Conservation Lands Parcels 2.062 30.326 Acreage 60032.0 3,140422.9 0 Non-Conservation Lands 4� Parcels 108 5,880 ++ Acreage 5615 160,352 7 Prep d by Flo d Ld-ir, rr Off f Ell-on,and-graphic Fesear:h dp D 111 W Mad-son Street,Elite 110 41, Tallahassee,FL 32399-6586 (850)487-1402 top ffedr.Rate.fl.us June 2018 21 SLACK .JOHNSTON Nd Packet Pa. 2326 -- d O.4.f By definition, a neighborhood is a group of complimentary land uses. Typically, its boundaries can be fairly easily defined, be they physical, social, economic or governmental in nature. The unique geographical aspect of the Florida Keys creates land uses and neighborhood characteristics throughout the archipelago which are generally atypical. As mentioned previously, Monroe County is made up of a chain of small islands that sweep about 115 miles in a southwesterly direction from the southern tip of Florida's mainland, ending at Key West. Land uses are somewhat limited by the geography of Monroe County, and many uses take advantage of the natural resources, with tourism and commercial/sport fishing dominating the local economy. The concept 0 of complimentary land uses are often overruled by constraints resulting from the odd configuration or limited availability of developable land. For these reasons, neighborhood boundaries are lesser defined, with incongruent uses existing throughout much of the county's developed areas. a The subject property is located on Vacca Key in the City of Marathon. The City of Marathon was incorporated in 1999. Its boundaries extend from the east end of the Seven Mile Bridge (approximately Mile Marker 47) to the west end of Tom's Harbor Bridge (approximately Mile Marker 60). The City includes the islands of Boot Key, Knight Key, Hog Key, Vacca Key, Stirrup Key, Crawl and Little Crawl Keys, East and West Sister's Island, Deer Key and Fat Deer Key, Long Pine Key and Grassy Key. Marathon is one of the more populated areas of the Keys and has a higher concentration of commercial development than many other areas of the Keys. Commercial development includes a wide variety of motels, restaurants, shopping centers, drug stores, supermarkets, as well as a Home Depot center. According to the 2010 U.S. Census, there were 6,187 housing units within the City of Marathon representing approximately 13% of � the total housing units in Monroe County. �s Marathon Airport is a mostly general aviation airport, and one of only two in the Florida LO Keys. Although there are other air strips in the Keys, Marathon and Key West are the only two airports providing commercial flights in and out of the Keys. Boating, fishing and water sports are a big part of the economy in the Florida Keys. According to statistics published by the Department of Motor Vehicles, there are approximately 29,000 registered vessels in Monroe County. This indicates almost 40% of the total population of Monroe County have a registered vessel. In all likelihood, there are probably significantly more vessels in Monroe County than registered due to the number of second home owners from neighboring counties to the north who register their vessels in Miami-Dade or Broward Counties. 22 SLACK ,JOHNSTON Nd Packet Pa. 2327 -- i O.4.f Marathon erg Z_ mow. as qb q � f d bon F� CL C LO a e e N (D E �b �UluVllUlul lug. 0mi 1 2 3 4 5 23 SLACK ,JOHNSTON Nd Packet Pa. 2328 -- i O.4.f The Florida Keys were hit by Hurricane Irma in September, 2017. Irma was a very destructive storm and properties were affected in all of Monroe County from Key Largo south to Key West. The Lower and Middle Keys, Marathon to Big Pine had the most damage. According to Coldwell Banker Schmitt's Real Estate Report, "As 2018 progressed, the Florida Keys real estate market returned to a more normal market cycle." Statistics for the first quarter of 2019, indicated the market continues to track in accordance with historic market cycles showing typical levels of listings and sales, though the year started with fewer pending sales than in 2018 and 2017. The total number of sales in the Upper Keys real estate market increased by 4% in 2018 as compared to 2017 to 2018 and the average sale price rose by 18%. The real estate market is projected to be stable for 2019 notwithstanding any significant natural or economic events. Based on our visit to the area, there appears to be significantly more new construction a� taking place than in years prior. New construction includes both commercial and residential components. �s 06 CO a U) LO 24 SLACK ,JOHNSTON Nd Packet Pa. 2329 -- i 0.4.f DESCRIPTION OF THE SITE The subject units are part of a larger condominium project and includes an interest in the common elements of the condominium, including the underlying site for the subject condominium. The following is a description of the site. V S. H 16H AY NO, l ( 00`A .,w*WWII,FW'FE'WIW7 rwIww ��r a 4 rdw�olrµ rt�rc9 ' a �0 tam,i "d Fd k w 9'm 7m NN7r pip ,. .. 4,YWJ" T � 11T 12 MT - ..... SIC 19 ICE Ar r. I 14, uam " T AlLOT C ` ' ONKKIAL BILII11w� FIT OAR mNI WIT V Nam' � ,W LO�� ,A MT 5)IS , � LOT . �� �, a rWWr aKAV LE iiwul La Wa , a GIW&Wi ucc �M Wlaara dr Wn o a. a 1p�Fk amp u v ramW a W6WF$�1 mr WTI w " p. 74 FIN I 4m ILikWPi U CM YACHT BASIN G LOT Fi ,. CHANNEL Y SU a Location: Marathon Professional Center, 2945-2975 Overseas Highway, Marathon, Monroe County, Florida. i e Shape: Rectangular Site Area: 16,000 Square Feet 04 0.37 Acre a E Frontage/Dimensions: The site has approximately 160 feet of frontage along Overseas Highway, 100 feet of frontage on 29th Street and 100 feet of frontage on 30th Street. There is also 60 feet of frontage on a navigable waterway/canal. The site's dimensions are approximately 100 feet by 160 feet. Access: Access to the subject condominium site is via Overseas Highway to 29th and 30th Streets. 25 SLACK ,JOHNSTON Nd Packet Pa. 2330 -- i O.4.f Topography: Level and at, or near, street grade. Soil Conditions: No soil report of the subject property was provided. It is assumed that the soil is of sufficient load bearing capacity to support the construction of permanent structures. No evidence of any adverse soil conditions at the site was observed upon our physical visit of the property. The fact the site is currently improved with an office building is proof that it is suitable for development. Utilities: All public utilities are available to the area. Land Use Restrictions: No authoritative report of title has been provided or reviewed. There do not appear to be any easements or restrictions that would adversely affect the utilization of the site. Flood Insurance: The subject property falls within Zone AE-8. Zone AE is determined to be special flood hazard areas subject to inundation by the 1% annual chance flood. Base elevations of 8 feet determined. National Flood Insurance Community Panel Number 12087C1378K, effective date February 18, 2005. A copy of the flood map is presented on the following page. Environmental Study: An environmental study was not provided. This appraisal report is based on the assumption that no conditions exist that would adversely affect the utilization or marketability of the property. LO 26 SLACK ,JOHNSTON Md Packet Pa. 2331 -- i 0.4.f Flood Map ,J E L �v m m ' - E I r m m u 41 { �� ,�. ,, + E „+ w . m � atititi_ _ _ a.. ... ......tititi z mz of mr E,[ x .,42 mm CO m, C �v 9'7 T'29 441V CD / � r / n /A / ✓ /F f i;� r 7@IW�A � Ni�///l% � /� ��j�N,�(V!fjIf/ �J i�% 'i �� ^+S91Wy Ir pi✓ i Iau 1�;' °qb CL ,.., _ U— *wL' r 17/Ar/�yN✓i/'.;k��� la �� 1�4 y%���jj'7�ff>ilfllil)��J ly//// I. r" , CO CO e ��''rr �r Sin INT N Aifkl � 1' y ��Irrr l�lffl�r9l d9 NI�IIrJI! �... �rG Moor 44� ,� egm ����� o �� U�!���� ''1(� ➢J�'W%y...:... �n1Ai '"IM1d I� f���S�Ati '/ ��� �. dllM1adrlfG Fy,�.M,4'k� 27 SLACK ,JOHNSTON Nd Packet Pa. 2332 -- i 0.4.f DESCRIPTION OF THE IMPROVEMENTS The subject property is comprised of Units B and C of the Marathon Professional Center, a Condominium, located at 2945-2955 Overseas Highway, Marathon, Monroe County, Florida. Marathon Professional Center is comprised of a two-story office building with surface parking. The building was constructed in 1973 and converted to 3 condominium units in 2006. The building contains a total of approximately 5,722 square feet. The building is of concrete construction with a flat roof. The subject building is considered to be in good condition, commensurate with its age and level of maintenance. Unit B includes both ground floor and second floor space. The ground floor area is approximately 1,332 square feet and the second floor is 454 square feet for a total area of 1,786 square feet. Unit B is currently owner-occupied and used for professional offices (law firm). This ground floor is built out with good quality office finishes. This portion of the unit includes a reception area, one large office/conference room area, four executive offices, copy room, file storage area, small kitchenette and two restrooms. Finishes include a combination of commercial grade carpet and tile flooring, painted drywall, and acoustical ceiling tiles with a combination of recessed and fluorescent lighting. U) The second floor space is divided into two rooms and has one restroom. Finishes include laminate flooring and fluorescent lighting. The second floor is accessible via an exterior staircase. �s Unit C contains a total of 1,061 square feet. Approximately 960 square feet is occupied by a tenant and utilized as professional offices. This unit includes a reception area, conference room, one office, a small bull pen area and kitchenette. There is one restroom. Unit C includes approximately 100 square feet of storage space currently utilized by the property owner. LO Parking for the condominium building is unassigned, surface parking. There appear to be about 28 spaces available. It should be noted, the spaces are poorly marked and some may be located in the right-of--way of Overseas Highway. The subject project was constructed in 1973 with an actual age of 46 years. The building is considered to be in good condition. We have estimated an effective age of 20 years, commensurate with the level of maintenance at the property. The subject unit's interior is also in good condition. The unit was damaged by water during Hurricane in September, 2017. It appears that most repairs have been made with just a few minor items remaining. The condominium representatives also stated that there are not any special assessments anticipated in the near future. 28 SLACK ,JOHNSTON Nd Packet Pa. 2333 -- 0.4.f MNd � Ups P —z m wo*vimi a �ha ' No . i " n LAI lip0 � tilo W M... " 0 .. ...., .�,..: ..e�„ J MI: m 4 1411*W" CE f » SEE SH " 1 uw " # tl M t 2 LOT LOT � I L 2, " JE IV CE Q U) �p & Nab V � pp � � My query w1r CE Ln CD 04 as �a CE " e" lift MAL All "A, r_ "w6u " ,�°"F" ��" as i"�' iV �4 " � it d LOT FIZ tl Curd* r N ro� � IIPI V AMr C "a"uNTWwT q �U9 "rC "I Cr � �.. I&M SAY n V) ����. Sir r) 29 SLACK .JOHNSTON Md Packet Pa. 2334 I 0.4.f REAL ESTATE TAX ANALYSIS The subject property is located within the City of Marathon, a municipality of Monroe County, Florida, and is subject to city and county ad valorem taxes on real property. The Florida Statutes provide for assessment and collection of ad valorem taxes on real property; however, the taxes are assessed, collected, and used on the local county level. The assessment for the property is established each year as of January 1st by the Monroe County Property Appraiser's Office at 100% of "Just Value". The tax due is computed according to annual millage rates established by Monroe County. Millage rates are the amount paid to each taxing body for every $1,000 of assessed value. Taxes are payable in November with a 4% discount and become delinquent on April 1 st. According to the Monroe County tax rolls, the 2018 real estate taxes and assessments for the subject property are as follows: Unit B: c Folio Number: 00321661-000200 2018 Total Market Value: $171,320 2018 Total Assessed Value: $171,320 Real Estate Taxes: $2,215.38 Unit C: Folio Number: 00321661-000300 2018 Total Market Value: $136,464 2018 Total Assessed Value: $136,464 Real Estate Taxes: $1,888.00 � Totals: 2018 Total Market Value: $307,784 ' LO 2018 Total Assessed Value: $307,784 Real Estate Taxes: $4,103.88 The above real estate taxes do not reflect a 4% discount for prompt payment. The County total market value for the subject units equates to $108.11 per square foot, based on 2,847 square feet. Based on an analysis of the sales of condominium units utilized in this report, a significant increase in the assessed value of the subject unit is could be expected if the unit were to sell. It should be noted, the taxes stated above include non-ad valorem assessments for Marathon Stormwater and Wastewater in the amount of$1,212.44. 30 SLACK ,JOHNSTON Nd Packet Pa. 2335 -- 0.4.f LAND USE AND ZONING Future Land Use According to the City of Marathon Future Land Use Map, the subject property has a land use designation of Mixed Use Commercial. A copy of the land use map is presented on the following page. According to the Marathon Comprehensive Plan: Mixed Use Commercial The principal purpose of the Nlixed Use Commercial future land use category is to pro rde for the establishment of mixed use de eloprrrerrt. patterns and to recognize established mixed use � development patterns within the City, This land use category is intended to provide for the corarrrercial zoning districts where vauoaus types of corrrrru air cial, retail„ and offtce ruses rimy be permitted at intensities which are consistent with the cor mutiity* character and the natrurall 22 erffiromn ert and to pr o�A de for various tWms of residential uses, including employee housing and corrcrrrrercial apartments. Whewver and wherever possible, the rrrain enance and enhancement of commercial fishing and related traditional ruses such as retail, stma ,e, and repair and mairlenance whichsupport the commercial fishing industry shall be encomage.4 within this land ruse category, Heavy incla.rstrial ruses and similarly incompatible ruses shall be prohibited 2 Lawfrally established RV parks where the majority of the RV s spaces are mainWned cardreried as transient spaces are also allowed ix ithn the Mix ed Use C omm,ercral figure Iand ruse category, U) The minimum lot s :e/densit,30inten ity identified in Table 1-1 shall riot preclude the contimed ruse or' redevelopm,ent of existing c om m,ercial of residential ruses on a sm all er° lot where suchIot or parcel was platted or other ise oft ec oxd prior to the adoption of this f lair. A dditionally, the applicatim of the hei kat and lot, coverage limitations contained in the Plan and the Land. 06 Development Regulations shall not preclude the repair or recon traction of any struucti. °e or portion thereof which is damaged by airy natural disaster or otlier casualty as provided for in b1ectve 1-3.4 and Policies therein 63 3I° ' )(4)3.hF,& a cv 31 SLACK ,JOHNSTON Nd Packet Pa. 2336 -- i 0.4.f Future Land Use Map NIINI�'llll� uu PuuP � UPI III a® r e qb �.b a, Zoning a The subject property is located within the jurisdictional boundaries of the City of Marathon and is zoned MU (Mixed Use). According to the Marathon Land Development Code, MU is as follows: e dater st muse(APIU)Zoning,,t;tustr "umt. The ttil..d s'rsr`rrrrg d1strict rs des�,gned to w;,µc.cuuuOud " het, r: r;lisrusirr-wsu,-u1, arid ueta4 activities that wN lh result rr-r tll-ue rrrost eftrder-rt arr d attractive Use o the City";,s hrr,tsrr ur bLisiness distrust and the t J S 1 corr dor, liar an effort to reciogtillze the role of Ulslf,, as the City lic Mar thoti' "Maki Stir l t", Spedficia�HCy,, this district Ipu~utii es foi�I �pw u-Id Uses that have a str rig per:destrflelsr orielrited character, with a rru i� tl ru.e arild il.r-uui er'Aratiorn of st:ue na by Shopping, trains elrlt �orMd,gir ig, retail, per"srrlina� saer'vice, r,.estiarllUrant, CUI',trrr aI,, filshif-q Urrr"„ustr , affor°r'da Ne "OLJfrr"ig our-rr'd errte tairmfllusrlt Uses ir"II the OIld Towlr-r il The PAU istlr� t isr�� prolvil es Leer lam-ge.ruca�e rlet O arid aof"r"rirner°4aOw l bi,.r'slniess opp!'irtunitiles gn othier" areas, ulnld,duw6ng larger shicip kin �:eraters, spei4. a ty, shopping centers, liru6vi druaull rrru.ulltir t.erriarit si;slrrrrrnerrw a Ib ulA'dulri"tds, a un.ori'mble services aurld sialle , tasL floodrestaUriants�" affordable !�u�.ur�u4>uln residentu�sll r-uses", transient l:l anid outer" r"etwsii� estiabl i shnierits that serve the soar-ulr-uwnity at Varr gre, mthe (MU) diistr list is sdesigirs tersd vv, h(ur-u the INftei µ. ruse r"rsr rMerr.li:al (MU)tdr.rtr-ure Il rsiy uuse category ors the ' r.utsure Land li',)'se Map(FIA.t t),, 32 SLACK .JOHNSTON Nd Packet Pa. 2337 -- i 0.4.f Zoning Map �w. I lk �r 4 mIw O r9U w u I, y � TO k R/ 'r,�I �� °�h� "' �IPIYIYi� ..� � r f CL Based on the above information, the existing improvements are considered a legal and conforming use. a e e CD (D E 33 SLACK ,JOHNSTON Xd Packet Pa. 2338 -- 0.4.f HIGHEST AND BEST USE According to The Dictionary of Real Estate Appraisal (Sixth Edition) published by the Appraisal Institute, the pertinent terms relating to highest and best use may be defined as follows: Highest and Best Use is "the reasonably probable use of property that results in the highest value. The four criteria that highest and best use must meet are legal permissibility, physical possibility, financial feasibility and maximum productivity." In estimating highest and best use, there are four stages of analysis: 1. Possible Use - normally dictated by physical constraints. C 2. Permissible Use - what use would be permitted in consideration of existing zoning and other applicable laws governing the use of the property, as well as any deed restrictions that may exist. 0 3. Feasible Use - which possible and permissible uses will produce a net return to the 3: owner of the site. 4. Maximally Productive - among feasible uses, which use will produce the highest net return to the land. U) To meet the tests of highest and best use, the use cannot be speculative or conjectural. It must be legal and probable. There must be a profitable demand for such use and it must return to the land the highest net return for the longest period of time. These tests have 06 been applied to the subject property. In arriving at the estimate of highest and best use, the subject property was analyzed as improved. As Vacant LO The highest and best use, as vacant, considers 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. E As Improved Highest and best use, as improved considers the use that should be made of a property as it exists. An existing property 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. 34 SLACK ,JOHNSTON Nd Packet Pa. 2339 -- i O.4.f As the subject property represents two office condominium units within the larger Marathon Professional Center condominium building, only the highest and best use as improved was analyzed. Marathon Professional Center was constructed in 1973 and appears to be in good condition. Based on our research, the property is well located for professional office users. Based on our research, the market for office condominium units in this area is primarily owner-user. In addition, the level of achievable rents for office space in this market is typically not sufficient to render ownership of office condominium units for investment purposes economically feasible. Based on our analysis, the highest and best use for the subject unit is for its continued office condominium use. 06 CO �s a U) LO 35 SLACK ,JOHNSTON Nd Packet Pa. 2340 -- i 0.4.f SUMMARY OF VALUATION AND ANALYSIS There are three generally recognized approaches considered in the valuation of real property. They include the income, sales comparison, and cost approaches. It should be noted that the appropriateness and reliability of each approach depends on the type of property being appraised, the age and condition of the improvements, if any, and the availability and quality of market data available for analysis. The income approach provides an indication of value of a property based on a conversion of anticipated benefits (net income). The method of conversion is called capitalization and is either based on a single year's income (direct capitalization), or several years' income (discounted cash flow). The sales comparison approach provides an indication of S value based on sales of properties considered similar. The cost approach provides an indication of the value of a property represented by the reproduction cost of the existing improvements, less accrued depreciation, to which is added the land value. 0 The appraisal process is concluded by a review and re-examination of each of the approaches to value employed. Consideration is given to the type and reliability of data used and the applicability of each approach. These factors are reconciled and a final value estimate is made. In this instance, the sales comparison and income approaches were considered applicable in the valuation of the subject property. As the subject property represents two units and a portion of the common areas, the cost approach was not considered applicable. The income approach will be followed by the sales comparison approach. U) INCOME APPROACH The income approach is a procedure where anticipated economic benefits to be derived from property ownership are converted into a value estimate through a capitalization LO process. The principle of "anticipation" underlying this approach acknowledges that an investor recognizes a relationship between income and asset value. The process of estimating the anticipated economic benefits from a particular property requires the estimation of potential income, expense and net operating income, as well as the selection of the most appropriate capitalization method. The two most commonly utilized methods of processing net income into value are direct capitalization, where, if possible, an overall rate is extracted directly from market sales in which the net income is known or can be closely approximated, and the discounted cash flow method, whereby anticipated future income streams and a reversionary value are discounted to a net present value estimate. The income approach is most reliable when estimates of rental income and operating expenses, as well as the selection of the capitalization technique, are based on market 36 SLACK ,JOHNSTON Nd Packet Pa. 2341 -- i 0.4.f conditions. The method of capitalization is either based on a single year's income (direct capitalization) or several years' income (discounted cash flow). In this procedure, the potential gross income (PGI) is estimated, as well as vacancy and collection loss, operating expenses, and net operating income (NOI), as well as the determination of the appropriate capitalization rate. The vacancy and collection loss is deducted from the PGI and results in effective gross income (EGI). Operating expenses are deducted from the effective gross income resulting in net operating income before debt service. The net operating income is then divided by the capitalization rate to 0 produce a value estimate by the direct capitalization method. Based on our property visit, Unit B is owner occupied and a portion of Unit C (960 sq.ft.) is currently rented to a tenant on a month-to-month bases for $16.88 per square foot. C According to the property owner, the tenant is on a month-to-month basis. Our analysis of the subject unit via application of the income approach is based on the hypothetical condition the subject units are rented at market levels. 0 Potential Gross Income We have surveyed competitive office space within the subject area to estimate the current market rent for the subject property. Based on a review of other units rented and for rent in the subject's project, the subject unit would likely be leased on a net of electric basis, if leased. Leases that are net of electric provide for the landlord to pay a majority of the unit expenses (real estate taxes, condominium fees, etc.) and the tenants to pay the electric. A summary of the rentals is presented on the next page along with a map showing their location in relation to the subject. Photographs of the rentals are presented in the addenda. �s LO CD CD 0 37 SLACK ,JOHNSTON Nd Packet Pa. 2342 -- i 0.4.f SUMMARY OF BUILDING RENTALS YEAR UNIT SIZE/ ASKING PROPERTY NO. LOCATION BUILT RENTABLE SF RENT/SQ.FT. EXPENSES 1 8085 Overseas Highway 1949 750 $16.80 Net of Utilities Marathon 2 6803 Overseas Highway 1968 1,500 $15.00 NNN ($8.00) Marathon 0 3 6400 Overseas Highway 1981 565 $22.83 Net of Utilities Marathon 4 10005-95 Overseas Highway 1993 Varies $30.00-$34.00 Net of Utilities Marathon Typically _ 800 SF+/- ° as Office Rentals (1,- 1 t as as U) U CL ,� Y�ta�e�'Ax�a 3akhgTy , 2i�lrr/1 ,t„ 06 @,9�r3dh�i��' M�rat�ea IrPa,}) 1. �Key Ga�onyy77 e 931 � f N How Ke 7 931 6� A I' V� ✓r E d c � omi OS 1 15 2 25 38 SLACK .JOHNSTON Nd Packet Pa. 2343 -- i 0.4.f Discussion of Comparable Rentals Rental 1 is a one-story office building located at 8085 Overseas Highway in Marathon. The building was originally constructed in 1949 but appears to be in good condition. The building contains 2,024 square feet. The property owner recently leased 750 square feet at a rate of$16.80 per square foot, net of utilities. He indicated lease terms are negotiable on new leases. Rental 2 is a one-story office building located at 6803 Overseas Highway in Marathon. The 6,280 square foot building is currently 100% occupied. The newer rental rates in the building are in the range of $15.00 per square foot, triple net. According to the leasing agent, the pass throughs are approximately $8.00 per square foot. The effective rent equates to approximately $22.00 per square foot inclusive of utilities. The building was constructed in 1968 and is in good condition. Lease terms are typically negotiable. Rental 3 is located at 6400 Overseas Highway in Marathon. This is a two-story, multi- tenant building in good condition. According to the owner, he recently leased approximately 565 square feet at a rate of$22.83 per square foot, net of utilities. Rental 4 is located at 10095 Overseas Highway in Marathon and is known as the 100' � Street Center. This is a two-story, multi-tenant building in good condition. According to the leasing agent, the property is currently 100% occupied. He stated the lease rates range from $30.00 to $34.00 per square foot, net of utilities. The units average 800 square feet, more or less. Lease terms are typically negotiable. 06 U) Estimate of Market Rent and Potential Gross Income Based on discussion with realtors active in the Middle and Lower Keys area, demand for office space in Marathon is affected in part by the physical constraints of the island which LO limits the overall population and thus potential users. There is significantly more demand by retail and service-oriented users than users of typical office space due to the tourism- oriented nature of the island. Often times, commercial space can be used by either retail, 4i service or office users with little or no alterations. The typical tenant and landlord in Marathon are small-scale users and owners and, as a result, lease terms are fairly straight- forward and simple. Most new leases are described as lateral moves of existing tenants within the market area. The comparable rentals provide a range of annual rent from $15.00 to $34.00 per square foot, net of utilities, gross. Based on a review of the market conditions, we have estimated the current market rent for the subject condominium unit at $25.00 per square foot for Unit B and $20.00 per square foot for Unit C. The units are individually metered for electric and the estimated rent assumes the tenant will pay the electricity. The potential gross income (PGI) for the subject property is estimated as follows: 39 SLACK ,JOHNSTON Nd Packet Pa. 2344 -- i 0.4.f Potential Gross Income: Unit B: 1,786 sq.ft. X $25.00 per sq.ft. = $44,650 Unit C: 1,061 sq.ft. X $20.00 per sq.ft. = $21,220 Total: $65,870 Vacancy & Collection Loss The investor is primarily interested in the cash revenues that an income property is likely to produce annually over a specified period of time, rather than what it could produce if it were always 100% occupied and all the tenants were actually paying their rent and expense reimbursement in full and on time. It is normally a prudent practice to expect some income loss, either in the form of actual vacancy, turnover, non-payment or slow payment of rent by tenants. a Based on discussion with realtors in the Marathon area, the market for office space is stable. Typically, units do not remain vacant for extended periods unless they are in poor condition, large spaces or overpriced. Based on this information, the subject area represents a stable market, with overall vacancy rates historically near 5.0%. Based on our analysis, we have estimated a stabilized vacancy rate and collection loss of 5.0% for the subject units. Effective Gross Income Effective gross income is equal to potential gross income less vacancy and collection loss. We have estimated the stabilized effective gross income as follows: Potential Gross Income: $65,870 Less Vacancy & Collection Loss (5%): ($3 290 Effective Gross Income: $62,580 LO Operating Expenses In our analysis of the fee simple valuation of the subject property under stabilized operations, we reviewed available expense information for the subject property and estimated other operating expenses based on industry standards, as well as conversations Z with realtors, unit owners and property managers. The comparable operating expenses are summarized as follows: Real Estate Taxes: As discussed in the real estate tax section of this report, we have estimated the real estate taxes, including a 4% discount for prompt payment, would be $3,940. 40 SLACK ,JOHNSTON Nd Packet Pa. 2345 -- i 0.4.f Condominium Fees: As discussed, the subject property is under a condominium form of ownership. Owners of the unit are required to pay association fees which include expenses such as utilities, repairs and maintenance, management and administrative, insurance and reserves for replacement. The subject association fees were reported to be $920.33 per month or approximately $11,100 annually, rounded. Management/General Administrative: Based on our analysis and given the size of the property and complexity of management, we have estimated a management fee of 3.0% of effective gross income, or $1,880 ($0.66 per square foot). Repairs & Maintenance: This expense item includes charges for the maintenance of the repairs and maintenance not included in the condominium association fees. We have estimated repairs and maintenance at $2,140 ($0.75 per square foot). a Miscellaneous Expenses: The stabilized miscellaneous expense has been estimated at $710 or $0.25 per square foot. 0 Total Operating Expenses Based on the above information, the subject's operating expenses have been estimated at $19,770, or $6.94 per square foot. The operating expenses reflect an expense ratio of 31.6% of effective gross income. Net Operating Income (NOI) U) The net operating income is the anticipated net income that remains after all operating expenses are deducted from effective gross income (potential gross income less vacancy and collection loss). We have estimated the stabilized net operating income for the subject property as follows: LO Effective Gross Income: $62,580 Less Operating Expenses: -$19,770 Net Operating Income: $42,810 41 SLACK ,JOHNSTON Nd Packet Pa. 2346 -- i 0.4.f Stabilized Income/Expense Statement 2945-55 Overseas Highway (Units B and C) 2,847 Sq.Ft. Total $/RSF Potential Gross Income $65,870 $23.14 Vacancy&Collection Loss 5.0% $3,290 $1.16 Effective Gross Income $62,580 $21.98 Operating Expenses % EGI Real Estate Taxes 6.3% $3,940 $1.38 Condominium Association 17.7% $11,100 $3.90 Management/Administrative 3.0% $1,880 $0.66 Repairs/Maintenance 3.4% $2,140 $0.75 Miscellaneous 1.1% $710 $0.25 Total Operating Expenses 31.6% $19,770 $6.94 CD Net Operating Income $42,810 $15.04 a Direct Capitalization Method 0 Direct capitalization converts stabilized anticipated net operating income into an indicated value by the use of an overall rate of return. Capitalization rates are a relationship between the property's net income and value. The process of capitalization converts a property's income into a single value. The direct capitalization formula is as follows: Income/ Rate = Value 06 �s The capitalization rate used in this report was obtained from a review of investment Cc surveys for similar properties, as well as from an analysis of the comparable improved sales for which the income and expense information was provided and from which capitalization rates could be estimated. �s An overall rate of return (going-in capitalization rate) is best derived from an analysis of `O actual sales; however, the sales analyzed herein were purchased by owner/users and capitalization rates are not available. A survey of investor criteria reflected the following: Source Property Type Overall Cap Rate PwC — l SE Florida Office Market 5.00% - 9.50%; 6.93% Average Quarter 2019 National Suburban Office Market 5.00% - 10.00%; 6.64% Average CBRE Cap Rate North America Suburban Office 6.71%; Average Survey 2nd Half 2018 42 SLACK .JOHNSTON Nd Packet Pa. 2347 -- i 0.4.f Income Approach Analysis and Conclusion — In estimating a capitalization rate for the subject property, the location of the subject property within a stable market in Marathon was taken into consideration. Based on our analysis, we have estimated an overall capitalization rate (OAR) of 7.0% in the application of the direct capitalization method. The overall rate has been applied to the estimated net operating income (NOI) which was estimated in the preceding section. Based on our analysis, the market value of the subject property has been estimated using the income approach as follows: 0 $42,810 NOI /7.0% OAR= $611,600, Rounded to $615,000 a �s a LO 43 SLACK ,JOHNSTON Nd Packet Pa. 2348 -- i 0.4.f SALES COMPARISON APPROACH The sales comparison approach produces an estimate of value for real estate by comparing recent sales of similar properties in the subject's surrounding or competing area. Inherent in this approach is the principle of substitution, which states that when a property is replaceable in the market, its value tends to be set at the cost of acquiring an equally desirable substitute property, assuming that no costly delay is encountered in making the substitution. By analyzing sales which qualify as arm's-length transactions between willing, knowledgeable buyers and sellers, price trends can be identified from which value parameters may be extracted. Comparability in physical, locational, and economic characteristics are important criteria in evaluating the sales in relation to the subject property. The sales comparison approach begins with researching recent relevant property sales and current offerings throughout the competitive area and selecting those properties 3: considered most similar to the subject. The sales and offerings are then analyzed, taking into consideration relevant factors of a physical, functional, or locational nature, as well as the time of sale and any change in economic conditions which may have occurred as of the date of valuation. The sales are then put into a meaningful unit of comparison, (i.e., price per unit or price per square foot) and adjustments to the comparable properties are made based on comparison to the subject and a conclusion of value is made. �s The validity of this approach is dependent upon the availability and relevancy of the data. Recent sales of properties having characteristics similar as the subject property have been collected and analyzed. The most widely used and most market-oriented unit of comparison for office condominium units like the subject property is the sales price per square foot of useable area. LO In this analysis, the research concentrated on office condominium units located within the subject market area. It was noted, there are no recent sales within the subject project. Sales within six complexes have been presented in this report. As will be discussed, due to a lack of office condominium sales in Marathon, our search area included all of the Florida Keys. The sale transactions occurred from March, 2017 through May, 2019 and represent the most recent market activity for office condominium units in this market. The comparable sales range in unit size from 897 to 2,800 square feet and were built between 1978 and 1991. The sales prices reflect a range from $193.53 to $393.21 per square foot. A summary of the sales are presented on the following page. A map showing their location in relation to the subject follows. Photographs of the sales and listings are presented in the addenda. 44 SLACK ,JOHNSTON Nd Packet Pa. 2349 -- i 0.4.f w U o c U N Uz c 7 > y J N— J a O (� J J U I N ai a) 2 J d O a a) '> m a)m U U > 3 E �_ 0 (J D-- o Y s Y a m Co ro 0 Z c u) (i a � E ro Co m > _ a_ _ m_ o ° U Q o IL Co J Co 0 ID � a3 a N Q dS o6 Y Co J = O > c 9 Q U (� wE a� � � � (7 iL U) Lu LU S 0 O W o O� T N N ma amM m � a ai a m ago ry m N �+ N N N m N N N N O F W LL Cr) CO(D � O CO N CD lC1 (D a 0 LO U N CIO Cl)rn rn 0 lid 04 0000 Co m LO N Crno a O 000 0 00 00 0 0 (n w 0 0 0 0 0 0 0 (D 0 0 W U 000 0 00 00 0 0 ¢ � titiO o (DCo r-N O 0 (n a N N LO LO N f-- V N ro N ffl fA K3 ffl fA K3 EA K3 K3 fA W U)J J W LLL N N 0 L W 0 0 ti (2 N U fA co Lo COCV W N r CoIL r O W Z v Z_ w w Co r,Co m Co m CO Co Co 06 O -1 T� T ZCo (Z Co Z� Co Co o O yo ALL z U UQ J Co w Coh Co Co w w :3 m rn m m m m LL m O LL O F V O LO M = Z m lb W 0 Co U) Cd U > 4� a) 0 3 a) 3 o 6, C)o o > 04 > a) IS � ai -I-- a) T Zo � N pU} > ° O > a-0O 0 F; a) i z(V) z O V) Coo r aa) o °o oQ > `v a> O N m V LO (D Z 45 SLACK .JOHNSTON Nd Packet Pa. 2350 -- i 0.4.f COMPARABLE SALES MAP Condominium Sales 'Itl�wj�o4r;Adea�faaaur;titia'gr" V6wVs, Pr a t! ti e u�a%V tag eK tl£r,Ty' , tirlgtyr'�rmu�r-ft��;. � " 4�Mr�MM1NpM1WdP'�k,MS', � WrWhdnr�, was f4 o d.�erm Z(Rader site N'f V"da mw ,Keyj,,,,,, go� a^ r,� '✓bS f?9 h5C11*IROE FLU ynlmdrl wxad Perk S and Tor "1ey y . r„ „r., �P�reS58 auk, kCey i V"euorAu;la;f✓W` ,�ugadur , G4rar4�ufC'b 6fut� 0 e tav1dr4 tf i Trumdci'Posrfi�»u N�viflifaiarr " f d" d"""g" sy l k (D " x a" CL " 06 U) 0 mi 5 10 15 a e 04 (D E 46 SLACK .JOHNSTON Nd Packet Pa. 2351 -- i 0.4.f Discussion of Comparable Sales Condominium 1 is the Gulfside Village located at 5800 Overseas Highway in Marathon. Gulfside Village is an office/commercial project constructed in 1987. The building is one story. There is surface parking. Since January, 2017, three sales of units have taken place. The units sold ranged in size from 1,421 to 2,800 square feet. The larger of the sales included two adjacent units. The sales took place in March, 2017, May, 2018 and August, 2018. The sales prices ranged from $275,000 to $575,000 or from $193.53 to $205.36 per square foot. Condominium 2 is the 1st Professional Centre located at 5701 Overseas Highway in Marathon. There has been only one recent sale of a unit in this project. 1st Professional Center is an office project constructed in 1979. The building is one story. There is surface parking. The unit sold contains 2,556 square feet and is utilized as medical space. The sale took place in May, 2019. The sales price was $580,000; however, approximately $30,000 was allocated to equipment resulting in an adjusted price of $550,000 for the real estate only. The adjusted sale price equates to $215.18 per square foot. Condominium 3 is the Key West Professional Plaza Condominium located at 1111 12' Street in the New Town section of Key West. Key West Professional Plaza is an office condominium building constructed in 1985. The building is 4 stories and contains a total square footage of 60,583. There is surface parking. There have been two recent sales of units in this property. The first sales took place in June, 2018. This unit contains 936 square feet and is located on the first floor. The sales price was $264,000 or $282.05 per square foot. The second sale took place in February, 2019. The sales price was $780,000 � or $388.83 per square foot. This unit is also located on the first floor. �s Condominium 4 is the Kennedy Center Condominium located in the New Town section LO of Key West at 1010 Kennedy Drive. There have been two recent sales of units in this building. Unit 201 sold in January, 2018. This unit contains 1,208 square feet and the sales price was $475,000 or $393.21 per square foot. According to the realtor, the unit was purchased by an owner/user for a real estate office. Unit 306 sold in July, 2017. This unit contains 897 square feet and the sales price was $229,000 or $255.30 per square foot. According to the realtor, this unit was purchased by an adjacent unit owner for expansion. Condominium 5 is the Roosevelt Suites Condominium. There has been only one unit sold in this project in recent years. This is a two-story building constructed in 1983. Unit G sold in May, 2018 for $365,000. The unit contains 1,133 square feet. The sales price per square foot was $322.15. 47 SLACK ,JOHNSTON Nd Packet Pa. 2352 -- i 0.4.f Condominium 6 is Offices at Northside Condominium located in the New Town section of Key West at 3144 Northside Drive. This property was constructed in 1991. There has been one recent sale of a unit in this project. Unit H(a) sold in November, 2018. This unit contains 1,025 square feet and the sales price was $297,000 or $289.76 per square foot. According to the realtor, the unit was purchased by an owner/user for an accounting office. Adjustment Factors 0 Property characteristics and sale terms considered in our analysis are location, time, age and condition of the property. These items have been analyzed and compared to the subject property as is summarized in the preceding section. The location of Condominiums 1 and 2 sales are considered similar to the subject and do not require adjustment for overall location. Condominiums 3, 4, 5 and 6 are located in Key West and considered slightly superior in location. 0 All of the comparable sale condominium projects are similar in age and condition and do not require any adjustments. The sales took place between March, 2017 and May, 2019. Based on our research and conversations with broker's familiar with the subject's market, we have determined that the market has been relatively stable over the past two years for office space. The sales range in price from $193.53 to $393.21 per square foot. Gulfside Village (Condo 1) and 1st Professional Center (Condo 2) are most similar to the subject being � located in Marathon; however, the units sold in this project are considered inferior in terms of condition and frontage to the subject units. Based on this analysis, we have estimated the market value for the subject property as follows: �s 2,847 Square Feet x $200 Per Square Foot= $569,400 LO 2,847 Square Feet x $225 Per Square Foot= $640,575 Concluded: $620,000 48 SLACK ,JOHNSTON Nd Packet Pa. 2353 -- 0.4.f RECONCILIATION AND FINAL VALUE ESTIMATE The purpose of this appraisal is to provide an estimate of the market value of the fee simple interest in the subject property, in its "as is" condition, as of the date of valuation. The subject property consists of two office condominium units within the Marathon Professional Center. In this analysis, we have used the income and sales comparison approaches to value to estimate the market value of the property. As the subject units include a portion of the common areas, the cost approach was not considered applicable. In the preceding sections of this report, indications of value for the property, based on the 0 two appraisal approaches indicated the following values: Income Approach: $615,000 Sales Comparison: $620,000 a The income is based on the principle of anticipation concerning market rent and net operating income. Within the income approach, the income and expense estimates utilized were supported by a recent survey of competitive buildings in the subject market 3: area. Based on the scope of this appraisal, we utilized the direct capitalization method. The conclusions made concerning market rent, occupancy, expenses, capitalization rates, etc., are considered realistic in view of current market conditions. U) The sales comparison approach tends to be relied upon more heavily by purchasers of owner/user properties. The reliability of this approach is good when there are recent sales of similar properties on which to base a comparison. Several recent sales involving similar office condominium properties were researched for use in the sales comparison approach. Our analysis required consideration of differing property characteristics, as compared with those of the property being appraised. Most of the comparable sales are owner users. Based on our research, owner users place most reliance on comparable sales when making purchase decisions. Given the quality of the data applied, this LO approach is considered a reliable indicator of the subject's market value. In determining final value estimate, most reliance was placed on the sales comparison approach to arrive at our estimate of market value. Based on our investigation and E analysis, we have formed the opinion that the market value of the fee simple interest in the subject property in its "as is" condition, as of April 24, 2019, was as follows: Z SIX HUNDRED TWENTY THOUSAND DOLLARS ($620,000). 49 SLACK ,JOHNSTON Nd Packet Pa. 2354 -- i 0.4.f ADDENDUM A—Photographs of the Subject Property mnnmr�lr �.,,,.., .. ram, '> rr / View of subject condominium project from Overseas Highway. 06 Co f81 LO Cd View of waterfrontage on southern boundary of subject site. 50 SLACK ,JOHNSTON Nd Packet Pa. 2355 -- 0.4.f Photographs of the Subject Property i� 22 iirraiiii l r w r;rrr //,� r/%, i�... / � � � / �✓` � ,�'/i r ri;r� rl� „r/✓jr�r� %r/ � r,'����� !%l1i%��i a����� � � �. � � r I e �r �,J/ I�Iii/��w✓� ��i'/� r/ ray i/l°FY % r �r � f� � I I � ,�� , f aiV,��IU�� rOC1, l�f������1�'(%/%,/,%��i�r%%r��rc�/rep�i!,/li yl4i��`�����i�����11�r✓"s������h/!r✓/f%///����1� A � View of western elevation of subject condominium project from Overseas Highway. 06 Co LO CD CD / r// ii/� / ir, riiii /,ir i�l✓ ii/%%�r i o�%%i/���G�/, �� C'N 1 View of eastern elevation of subject condominium project. 51 SLACK ,JOHNSTON Nd Packet Pa. 2356 -- i 0.4.f Photographs of the Subject Property J � a Unit B reception area. 1 " r IMF . r 1 I Unit B conference room. 52 SLACK ,JOHNSTON Nd Packet Pa. 2357 -- i 0.4.f Photographs of the Subject Property � ire r t, / 4 a Unit B kitchenette. II 1i �Ids v� �wM�ua, i� y / E i Unit B executive office. 53 SLACK ,JOHNSTON Xd Packet Pa. 2358 -- 0.4.f Photographs of the Subject Property a / Unit B second floor space. Cu �III��1�!e � 'V f✓ rr �//�,"'V ! � �Y�)���//1l///' %/%%%/%%/iiiiiii; � If ��OVVVVVVV I C C8 w� 0 / Unit B second floor space. 54 SLACK ,JOHNSTON Xd Packet Pa. 2359 -- i O.4.f Photographs of the Subject Property M vior�%/�iti oil �il��f/�J➢ � ' Unit C exterior entrance. U) C LCD O CD � IIIIIIIIIIII '6 , a N .. C 0 m 0 Unit C typical office finishes. 55 SLACK ,JOHNSTON Md Packet Pa. 2360 -- i 0.4.f Photographs of the Subject Property Unit C conference room. CO U) C LO I LO CD CD 4i E Unit C office. 56 SLACK ,JOHNSTON Md Packet Pa. 2361 -- i 0.4.f ADDENDUM B — Photographs of the Comparable Sales and Rentals SALE 1 — Gulfside Village All u i «r riiir / ry ���riiarri ri��r CY SALE 2 — 1st Professional Centre 06 �s CO LO r r uN * C14 R' y, III'Idh;F 1,�,!'!r, 1)b�"�+'�Yv '%rLUAlY7��al�ODJ19L'1�111W9G„u�a _ 57 SLACK ,JOHNSTON Nd Packet Pa. 2362 -- i 0.4.f SALE 3 - Key West Professional Plaza i i 4 SALE 4 - Kennedy Center M 2 /%iCO IYYI��j11j111,.� r i I'll y U �i c r , 1�1�1/l 1� �� ,m 'flPl NiDD r ;,// 58 SLACK ,JOHNSTON Xd Packet Pa. 2363 -- i 0.4.f SALE 5 - Roosevelt Suites lf, m SALE 6 — Offices at Northside IL E 59 SLACK ,JOHNSTON Nd Packet Pa. 2364 -- i 0.4.f RENTAL 1 — 8085 Overseas Highway or- cm d ,✓ sip � 9 J � � I r, A loll� ri/rii —go r oil ............�¢����IIIIIIIIIIIIIII�II���/�����G%i%�% as RENTAL 2 — 6803 Overseas Highway IL (s err Ifs <,„,„,,, � �"'"'"cs.*r�,�ymr✓ay��„,y� �. �,,,�U,,,,<"F�� '.,, ",-,,,, I�'' � ,'. Cd 60 SLACK .JOHNSTON Nd Packet Pa. 2365 -- i 0.4.f RENTAL 3 — 6400 Overseas Highway 1 , / a / r %//iij ����r/i,,,,,.. "">,riviir/////,�/ii %/%jii ,,,,,,,,,,,�„✓rai/7///%/O%%���//O��O��������((((((��IIIIIIIIIIIIII((YIIff11f�IIrl1/7WNxUliG1(I�M 888 RENTAL 4 — 10005-95 Overseas Highway IL A Co,. t) w �+ Lo CD CCN C E f � CY r ,,, ///i�rrl ll 61 SLACK .JOHNSTON Nd Packet Pa. 2366 -- i 0.4.f ADDENDUM C — Qualifications of the Appraiser ANDREW H. MAGENHEIMER, MAI EDUCATION: Bachelor's Degree, The University of the South, Sewanee, Tennessee, 1986 EXPERIENCE: Over thirty years in the field of real estate, involved in various forms of consultation appraisal, economic research and market analysis. June, 1997 to Present, Principal, Slack, Johnston & Magenheimer, Inc. August, 1991 to May, 1997, Senior Appraiser, Slack& Johnston, Inc. 22 February, 1987 to July, 1991, Staff Appraiser, Dixon & Friedman, Inc. GENERAL APPRAISAL EXPERIENCE: c Appraisals - Vacant land, environmentally sensitive land, aviation facilities, industrial facilities, shopping centers, office buildings, apartment buildings, residential developments and single-family residences. U) Consulting - Economic research, market analysis, feasibility analysis and ad valorem real 2- estate tax assessment appeals pertaining to industrial, commercial and residential properties. 06 co Litigation Support — Appraisals and consulting, including expert testimony, concerning various property types. AFFILIATIONS: Licensed Florida Real Estate Broker LO Florida State-Certified General Real Estate Appraiser, Certification No. RZ1073 N Appraisal Institute Member, MAI, Certificate Number 10133, Continuing Education Completed E 2002 President of the South Florida Chapter of the Appraisal Institute Member of the Miami Board of Realtors Member of the Florida Keys Board of Realtors Corporate Member of Florida Airport Council (FAC) 62 SLACK ,JOHNSTON Nd Packet Pa. 2367 -- i