HomeMy WebLinkAboutExhibit AA MERIDIA
APPRAISAL GROUP
AN APPRAISAL REPORT OF
THE PROPOSED RESIDENCES AT DR. KING BOULEVARD
APARTMENTS, A RENT AND INCOME RESTRICTED COMPLEX
TO BE LOCATED AT DR. KING BOULEVARD AND NW
15TH AVENUE, MIAMI, FLORIDA 33147
PREPARED FOR
SELTZER MANAGEMENT GROUP, INC.
AS AGENT FOR THE FLORIDA HOUSING FINANCE CORPORATION
17633 ASHELY DRIVE
PANAMA CITY BEACH, FLORIDA 32413
ATTN: MR. JUSTIN COLES
LOCATION COORDINATES
LONGITUDE: -80.248385
LATITUDE: 25.845509
DATE OF VALUATION
SEPTEMBER 10, 2019
DATE OF REPORT
SEPTEMBER 11, 2019
PREPARED BY
MERIDIAN APPRAISAL GROUP, INC.
ROBERT VON, PRESIDENT
STATE -CERTIFIED GENERAL REAL ESTATE APPRAISER RZ 1604
MARK S. DAVIS, SENIOR APPRAISER
STATE -CERTIFIED GENERAL REAL ESTATE APPRAISER RZ 1229
AA M APPRAISAL GROUP
September 11, 2019
1331 SUNDIAL POINT
WINTER SPRINGS, FLORIDA 32708
TEL 407.875.6933
FAX 407.875.1061
Mr. Justin Coles
Seltzer Management Group, Inc., as agent for the Florida Housing Finance Corporation
17633 Ashely Drive
Panama City Beach, Florida 32413
Re: Appraisal of the 120 unit, rent and income restricted apartment complex, located at Dr. King
Boulevard and NW 15t' Avenue, Miami, Miami -Dade County, Florida 33147.
Meridian File No: 19-PIP
Dear Mr. Coles:
As requested, we have made the necessary investigations and analyses to appraise the proposed Residences at
Dr. King Boulevard apartment complex. The property is currently vacant land. The improvements will consist
of a 120 unit complex situated on two sites divided by Dr. King Boulevard totaling 1.006 acres. The seven -story
building on the northern parcel will contain 60 units and the five -story building on the southern portion will
also contain 60 units. The property will be considered a Class B improvement in the local area. The subject will
set aside 20% (24) of the units for households earning 30% or less of the Area Median Income (AMI), 63% (75)
of the units for households earning 60% or less of AMI, 8% (nine) of the units for households earning 80% or
less of AMI and 10% (12) of the units at market rates. The subject will be restricted by the Housing Credit,
HOME, SURTAX and Tax -Exempt Bond programs. The rent and income restrictions remain for at least 50
years from the placed in service date.
The purpose of this appraisal was to estimate the market value of the leased fee interest in the subject property
as restricted by the Housing Credit, HOME, SURTAX and Tax -Exempt Bond programs and the hypothetical
values as if an un-restricted market rate property. We have provided the values of the property as is, as if
complete and as if stabilized. The date of valuation is September 10, 2019. The date of completion is estimated
at December 10, 2020, and the dates of stabilization are estimated to be March 10, 2021 (market) and March
10, 2021 (restricted).
The intended use of this appraisal is for loan underwriting and/or credit decisions. The intended user of this
report is Seltzer Management Group, Inc., as agent for the Florida Housing Finance Corporation, and CitiBank
N.A., Freddie Mac, Miami -Dade County and the City of Miami. No other use or users are intended.
"This report is for the use and benefit of and may be relied upon by,
a. the Seller/Servicer, Freddie Mac and any successors and assigns ("Lender");
b. independent auditors, accountants, attorneys and other professionals acting on behalf of Lender;
c. governmental agencies having regulatory authority over Lender;
d. designated persons pursuant to an order or legal process of any court or governmental agency;
e. prospective purchases of the Mortgage; and
f. with respect to any debt (or portion thereof) and/or securities secured, directly or indirectly, by the
Property which is the subject of this report, the following parties and their respective successors and
assigns;
any placement agent or broker/dealer and any of their respective affiliates, agents and advisors;
any initial purchaser or subsequent hold of such debt and/or securities;
MR. JUSTIN COLES
SEPTEMBER 11, 2019
PAGE 2
AVA ME,,,R-1.171-6N
any Servicer or other agent acting on behalf of the holders of such debt and/or securities;
any indenture trustee;
any rating agency; and
— any institutional provider from time to time of any liquidity facility or credit support for such
financings
In addition, this report, or reference to this report, may be included or quoted in any offering circular,
information circular, offering memorandum, registration statement, private placement memorandum,
prospects or sales brochure (in either electronic or hard copy format) in connection with securitization or
transaction involving such debt (or portion thereof) and/or securities."
The subject property is further described and identified by both legal and narrative descriptions within the text
of the following appraisal report. Market value, fee simple interest, leased fee interest and other appraisal terms
are defined within the text of the following appraisal report. General Assumptions and Limiting Conditions
concerning the valuation of the subject property can be found following this section of the report. This is an
Appraisal Report prepared under Standards Rule 2-2(a) and performed under Standard Rule 1 of the Uniform
Standards of Professional Appraisal Practice (USPAP).
We have formed the opinion that the market value of the fee simple interest in the subject site, as is, as vacant
land, based on market conditions prevailing on September 10, 2019, was:
ONE MILLION EIGHT HUNDRED THOUSAND DOLLARS
($1,800,000)*
We have formed the opinion that the hypothetical market value of the leased fee interest in the subject property
as an un-restricted market rent property, as if complete, including $240,000 in personal property, based on
market conditions prevailing on September 10, 2019, was:
FOURTEEN MILLION ONE HUNDRED TWENTY THOUSAND DOLLARS
($14,120,000)*
We have formed the opinion that the hypothetical market value of the leased fee interest in the subject property
as an un-restricted market rent property, as if stabilized, including $240,000 in personal property based on
market conditions prevailing on September 10, 2019, was:
FOURTEEN MILLION THREE HUNDRED TEN THOUSAND DOLLARS
We have formed the opinion that the hypothetical market value of the leased fee interest in the subject property,
as restricted by the Housing Credit, HOME, SURTAX and Tax -Exempt Bond programs, as if complete,
including $240,000 in personal property, and with market financing, based on market conditions prevailing on
September 10, 2019, was:
SEVEN MILLION EIGHT HUNDRED SIXTY THOUSAND DOLLARS
($7,860,000)*
We have formed the opinion that the hypothetical market value of the leased fee interest in the subject property,
as restricted by the Housing Credit, HOME, SURTAX and Tax -Exempt Bond programs, as if stabilized,
including $240,000 in personal property, and with market financing, based on market conditions prevailing on
September 10, 2019, was:
MR. JUSTIN COLES
SEPTEMBER 11, 2019
PAGE 3
AMA MEF;.IPlAN
EIGHT MILLION DOLLARS
($8,000,000)*
* Please see the Extraordinary Assumptions and Hypothetical Conditions.
The following report was prepared in conformity with the Code of Professional Ethics and Standards of
Professional Practice of the Appraisal Institute. As such, it conforms to the Uniform Standards of Professional
Appraisal Practice (USPAP) that became effective January 1, 2018. This report meets or exceeds the guidelines
of Federal, Financial Institutions Reform, Recovery and Enforcement Act of 1989 (Title XI of FIRREA), as
amended, as issued by the Office of the Comptroller of Currency, CitiBank, FreddieMac and Seltzer
Management Group, Inc. appraisal guidelines.
Based upon the steps and investigations taken to appraise the subject property, we are of the opinion we have
complied with the Competency Provision of USPAP, as required by the FIRREA Act of 1989 and subsequent
updates. This letter of transmittal precedes the appraisal report, further describing the subject property and
containing the reasoning and pertinent data leading to the fmal value estimates.
Respectfully submitted,
Meridian Appraisal Group, Inc.
Digitally signed by Robert
Von, President
Date: 2019.09.11 14:34:21
-04'00'
Robert Von, President
State -Certified General Real Estate Appraiser RZ 1604
Digitally signed by Mark S.
Davis
�-s Date: 2019.09.11 14:35:22
-04'00'
Mark S. Davis, Senior Appraiser
State -Certified General Real Estate Appraiser RZ 1229
RV:MSD:dmh
TABLE OF CONTENTS
CERTIFICATION 1
EXECUTIVE SUMMARY 3
GENERAL ASSUMPTIONS AND LIMITING CONDITIONS 5
DEFINITION OF IMPORTANT TERMS 7
SUBJECT EXHIBITS 9
SUBJECT PHOTOGRAPHS 12
SUBJECT PROPERTY DATA 14
REGIONAL OVERVIEW 19
APARTMENT MARKET OVERVIEW 29
NEIGHBORHOOD ANALYSIS 66
SITE EXHIBITS 68
SITE ANALYSIS 72
IMPROVEMENTS EXHIBITS 74
IMPROVEMENT ANALYSIS 87
HIGHEST AND BEST USE ANALYSIS 89
MARKETABILITY AND EXPOSURE PERIODS 91
VALUATION PROCEDURE 92
COST APPROACH 94
SALES COMPARISON APPROACH 110
INCOME CAPITALIZATION APPROACH 123
RECONCILIATION AND FINAL VALUE ESTIMATE (AS A MARKET RENTAL PROPERTY) 148
SALES COMPARISON APPROACH 151
INCOME CAPITALIZATION ANALYSIS 166
RECONCILIATION AND FINAL VALUE ESTIMATE (AS A RESTRICTED PROPERTY) 191
FAVORABLE FINANCING 193
VALUATION OF SUBJECT'S HOUSING CREDITS 196
ADDENDA
APPRAISERS' QUALIFICATIONS
ENGAGEMENT LETTER
RENT AND INCOME LIMITS
UTILITY ALLOWANCES
DEVELOPER'S PRO -FORMA
TAX CREDIT EQUITY SYNDICATION LETTER
ACTUAL CASH VALUE
19-PIP MERIDIAN APPRAISAL GROUP, INC.
CERTIFICATION
The undersigned appraisers hereby certify that to the best of their knowledge and belief:
• the statements of fact contained in this appraisal report (upon which the analyses, opinion and conclusions
expressed herein are based) are true and correct.
• the analysis, opinions and conclusion in the report are limited only by the assumptions and limiting
conditions and any extraordinary assumptions if any, set forth, and are the personal, unbiased professional
analyses, opinions and conclusions of the appraisers.
• the appraisers have no present or prospective interest in the subject property and have no personal bias with
respect to the parties involved.
• the appraisers' compensation is not contingent upon the reporting of a predetermined value or direction in
value that favors the cause of the client, the amount of the value estimate, the attainment of a stipulated
result, or the occurrence of a subsequent event.
• the reported analyses, opinions and conclusions were developed and this appraisal report has been prepared
in conformity with the requirements of the Code of Professional Ethics & Standards of Professional
Appraisal Practice of the Appraisal Institute, which include the Uniform Standards of Professional
Appraisal Practice, as promulgated by the Appraisal Standards Board of the Appraisal Foundation. The use
of this report is subject to all regulations issued by the appropriate regulatory entities regarding the
enactment of Title XI of the Financial Institution Reform, Recovery and Enforcement Act of 1989
(FIRREA).
• we do not authorize the out -of -context quoting from or partial reprinting of this appraisal report and neither
all nor part of this appraisal report shall be disseminated to the general public by the use of any public
communications media without the prior written consent of the undersigned appraisers.
• use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly
authorized representatives.
• the undersigned President and Senior Appraiser certify that they have personally inspected the subject
property and the comparables used within this report.
• no one other than the undersigned prepared the personal unbiased professional analyses, conclusions and
opinions concerning real estate that are set forth in this appraisal report unless and except as acknowledged
in this report.
• the appraisers have performed within the context of the competency provision of the Uniform Standards of
Professional Appraisal Practice.
• this appraisal assignment was not made, nor was the appraisal rendered, on the basis of a requested
minimum valuation, specific valuation or an amount which would result in approval of a loan.
• Robert Von, President, and Mark S. Davis, Senior Appraiser, have recently completed a market study for
the subject property as the only services involving the subject property of this report within the three year
period immediately preceding the acceptance of this assignment.
Property Location
The subject is located on the north and south sides of Dr. King Boulevard (NW 62nd Street) and the west side
of NW 15th Avenue in Miami, Miami -Dade County Florida.
Date of Valuation and Date of Report
The date of valuation for the subject is as of September 10, 2019, our most recent date of inspection of the
subject property. The date of this report is September 11, 2019.
19-PIP MERIDIAN APPRAISAL GROUP, INC. 1
CERTIFICATION (CONT'D)
Final Value Conclusions
Value Estimated
Interest Appraised
Date of Value
Estimated Value*
Market Value of Subject Site, As Though Vacant
Fee Simple
September 10, 2019
$1,800,000*
Hypothetical Market Value, As If Complete, Market
Leased Fee
September 10, 2019
$14,120,000*
Hypothetical Market Value, As If Stabilized, Market
Leased Fee
September 10, 2019
$14,310,000*
Hypothetical Market Value, As If Complete, As
Restricted
Leased Fee
September 10, 2019
$7,860,000*
Hypothetical Market Value, As If Stabilized, As
Restricted
Leased Fee
September 10, 2019
$8,000,000*
* Please see the Extraordinary Assumptions and Hypothetical Conditions.
Certified by
Meridian Appraisal Group, Inc.
Digitally signed by
Robert Von, President
Date: 2019.09.11 14:34:50
- 04'00'
Robert Von, President
State -Certified General Real Estate Appraiser RZ 1604
Digitally signed by Mark S.
//qf
-S Date: 2019.09.1 1 14:35:51
Davis
- 04'00'
Mark S. Davis, Senior Appraiser
State -Certified General Real Estate Appraiser RZ 1229
19-PIP MERIDIAN APPRAISAL GROUP, INC. 2
EXECUTIVE SUMMARY
Location
The subject is located on the north and south sides of Dr. King Boulevard (NW 62"d Street) and the west side
of NW 15' Avenue in Miami, Miami -Dade County Florida.
Type of Property
The subject is a proposed 120 unit apartment complex. The subject will set aside 20% (24) of the units for
households earning 30% or less of the Area Median Income (AMI), 63% (75) of the units for households earning
60% or less of AMI, 8% (nine) of the units for households earning 80% or less of AMI and 10% (12) of the units
at market rates.
Highest & Best Use
The highest and best use "as vacant" is multi -family development. The proposed improvements consist of multi-
family housing that is generally consistent with the ideal improvements.
Site Description
The subject site is irregular in shape being divided by Dr. King Boulevard and contains a total of 1.006 acres.
The northern parcel will contain 0.531 acre or 23,146 square feet (after vacation and dedication of a portion of
a 15' wide alleyway) and the southern parcel the southern parcel contains 0.475 acre or 20,675 square feet. The
subject has frontage of 245' along the south side of Dr. King Boulevard (NW 62'd Street) and 100' along the
west side of NW 15t' Street for the South Parcel and the North Parcel has 260' along the north side of Dr. King
Boulevard and 140' of frontage along the west side of NW 15t' Avenue; the North Parcel is also divided by a
15' wide alleyway formerly known as NW 14t' Court that will be vacated and dedicated to the subject site. Note
that Dr. King Boulevard (NW 62'd Street) is a four -lane, divided highway with landscaped medians and center
turn lanes. The subject will have one access point to the North Parcel along the north side of Dr. King Boulevard
at the alleyway and one access point to the South Parcel from the west side of NW 15t' Avenue. We observed
no apparent drainage problems when we inspected the subject, which appears to be located within Zone "X".
Zone "X" is an area outside the 100 year flood plain; mandatory flood insurance purchase requirements do not
appear to apply. It is zoned T6-8-O & T4-L, Suburban Transect Zone - Open and General Urban Transect Zone -
Limited, by the City of Miami. The future land use designation is Mixed -Use. Based on these investigations,
we are of the opinion that the subject site is suitable for multi -family development.
Qualified Census Tract (QCT): Yes (15.01 & 19.03)
Difficult to Develop Area (DDA): No (33147)
Improvement Analysis
The subject will consist of 120 apartment units within two, five and seven -story apartment buildings with 60
units in each building.
The subject will set aside 20% (24) of the units for households earning 30% or less of the Area Median Income
(AMI), 63% (75) of the units for households earning 60% or less of AMI, 8% (nine) of the units for households
earning 80% or less of AMI and 10% (12) of the units at market rates. The subject will be restricted by the
Housing Credit, HOME, SURTAX and Tax -Exempt Bond programs. The following is the subject's proposed
unit mix.
Unit Mix with Set Asides
Unit Type
Set Aside
# Of Units
Unit Size (S.F.)
Total S.F.
1/1
30% AMI
24
563
13,512
1/1
60%AMI
75
563
42,225
1 /1
80% AMI
9
563
5,067
1/1
Market
12
563
6,756
Total/Avg.
120
563
67,560
19-PIP MERIDIAN APPRAISAL GROUP, INC. 3
EXECUTIVE SUMMARY (CONT'D)
The total area within the units is 67,560
indicated density is 119.29 units per acre.
Unit amenities will include refrigerator,
washer -dryer hook-ups. The common
community room and fitness center.
Interest Appraised
Fee Simple & Leased fee
Estimated Exposure Period
12 months
square feet, resulting in an average unit size of 563 square feet. The
range/oven, garbage disposal, dishwasher, ceiling fans, blinds, and
amenities will include leasing offices, laundry in each building,
Date of Valuation and Date of Report
The date of valuation for the subject is as of September 10, 2019, our most recent date of inspection of the
subject property. The date of this report is September 11, 2019.
Final Value Conclusions
Value Estimated
Interest Appraised
Date of Value
Estimated Value*
Market Value of Subject Site, As Though Vacant
Fee Simple
September 10, 2019
$1,800,000*
Hypothetical Market Value, As If Complete, Market
Leased Fee
September 10, 2019
$14,120,000*
Hypothetical Market Value, As If Stabilized, Market
Leased Fee
September 10, 2019
$14,310,000*
Hypothetical Market Value, As If Complete, As
Restricted
Leased Fee
September 10, 2019
$7,860,000*
Hypothetical Market Value, As If Stabilized, As
Restricted
Leased Fee
September 10, 2019
$8,000,000*
* Please see the Extraordinary Assumptions and Hypothetical Conditions.
19-PIP MERIDIAN APPRAISAL GROUP, INC. 4
GENERAL ASSUMPTIONS AND LIMITING CONDITIONS
This appraisal report has been made with the following general assumptions:
1. The legal description used in this report is assumed to be correct.
2. The appraisers have made no survey of the property and no responsibility is assumed in connection with
such matters. Sketches in this report are included only to assist the reader in visualizing the property.
3. No responsibility is assumed for matters of legal nature affecting title to the property nor is an opinion of
title rendered. The title is assumed to be good and merchantable.
4. Information and data furnished by others is usually assumed to be true, correct and reliable. When such
information and data appears to be dubious and when it is critical to the appraisal, a reasonable effort has
been made to verify all such information; however, the appraiser assumes no responsibility for its accuracy.
5. All mortgages, liens, encumbrances, leases and servitude have been disregarded unless so specified within
the report. The property is appraised as though under responsible ownership and competent management.
6. It is assumed that there are no hidden or unapparent conditions of the property, subsoil, or structures
rendering it more or less valuable. No responsibility is assumed for such conditions or for engineering that
may be required to discover them.
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 considered in the appraisal report.
8. It is assumed that all applicable zoning and use regulations and restrictions have been complied with, unless
nonconformity has been stated, defined and considered in the appraisal report.
9. It is assumed that all required licenses, consents or other legislative or administrative authority from any
local, state or national governmental 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 improvements will be within the boundaries or property
lines or the property described and that there will be no encroachments or trespass unless noted within the
report.
11. The dates of value to which the opinions in this report apply are reported herein. The appraiser assumes no
responsibility for economic or physical factors occurring at some later dates that may affect the opinions
stated herein.
12. Unless otherwise stated in the report, the existence of hazardous material, which may or may not be present
on the property, was not observed by the appraisers. The appraisers have no knowledge of the existence of
such materials on or in the property. The appraisers, however, are not qualified to detect such substances.
The presence of substances such as asbestos, urea -formaldehyde foam insulation, or potentially hazardous
materials may affect the value of the property. The value estimate is predicated on the assumption that there
is no such material on or in the property that would cause a loss in value. No responsibility is assumed for
any such conditions, of for any expertise or engineering knowledge required to discover them. The reader
is urged to retain an expert in this field, if desired.
This appraisal report has been made with the following general limiting conditions:
1. The appraisers will not be required to give testimony or appear in court because of having made this
appraisal, with reference to the property in question, unless arrangements have been previously made
thereof.
2. Possession of the report, or copy thereof, does not carry with it the right of publication. It may not be used
for any purposes by any person other than the party to whom it is addressed without written consent of the
appraiser, and in any event only with proper written qualification and only in its entirety.
19-PIP MERIDIAN APPRAISAL GROUP, INC. 5
GENERAL ASSUMPTIONS AND LIMITING CONDITIONS (CONT'D)
3. The distribution of the total valuation in this report between land and improvements applies only under the
reported highest and best use of the property. The allocations of value for the land and improvements must
not be used in conjunction with any other appraisal and are invalid if so used.
4. No environmental impact studies were requested or made in conjunction with this appraisal, and the
appraiser hereby reserves the right to alter, amend, revise, or rescind any of the value opinions based upon
any subsequent environmental impact studies, research or investigation.
5. Neither all nor any part of the contents of this report, or copy thereof, shall be conveyed to the public
through advertising, public relations, news, sales or any other media without written consent and approval
of the appraisers. Nor shall the appraiser, firm or professional organization of which the appraiser is a
member be identified without written consent of the appraisers.
6. Acceptance of and/or use of this appraisal report constitutes acceptance of the foregoing General
Assumptions and General Limiting Conditions.
Extraordinary Assumptions and Hypothetical Limiting Conditions
This report has been made with the following Extraordinary Assumptions:
1. We have assumed and our conclusions are based upon the assumption that the improvements will be
constructed as presented in this report with completion in or about December 10, 2020.
2. We have assumed that the subject's site plan will be approved as discussed in this report.
3. The proposed unit sizes and unit mix in this report are based on the plans provided by the developer and
contained in the report. Some slight differences in unit sizes for the only unit type apparently due to the
building designs; however, the layouts and sizes are fairly similar. With the information provided we were
able to determine an overall unit mix by calculating the average unit sizes for use in this report. There are
23 different one -bedroom unit sizes ranging between 493 and 704 square feet with most between 536 and
582 square feet. The average size of the one -bedroom units is 563.49 square feet that we have rounded to
563 square feet. Due to rounding, the reported total square feet (67,560) is slightly lower than the actual
figure (67,619). We have assumed that the unit mix and sizes in the summary, based on the plans provided
by the developer, are accurate for the purposes of this report.
4. The subject site is in the legal process of obtaining abandoned right-of-way that will be part of the subject
property and include easements for ground level use. The legal description on the survey provided and used
in this report does not include this small strip of land and, further, it will reportedly have a ground level
access easement for public use. We have included this area in the subject site for the purposes of this report
and assume that it will be incorporated into the subject site legal description.
This report has been made with the following Hypothetical Conditions:
1. The subject will be restricted by Housing Credit, HOME, SURTAX and Tax -Exempt Bond programs.
Therefore, operation solely as a market rate project is a hypothetical condition.
2. The subject is proposed, therefore, the as if complete and stabilized values are hypothetical conditions.
Please be advised that use of the Extraordinary Assumptions and Hypothetical Conditions in this report
might have affected the assignment results and the final opinions of value may have been affected by their
use.
19-PIP MERIDIAN APPRAISAL GROUP, INC. 6
DEFINITION OF IMPORTANT TERMS
Market Value'
The most probable price which a property should bring in a competitive and open market under all conditions
requisite to a fair sale, the buyer and seller each acting prudently, knowledgeably and assuming the price is not
affected by undue stimulus. Implicit in this definition is consummation of a sale as of a specified date and
passing of title from seller to buyer under conditions whereby:
• Buyer and seller are typically motivated;
• Both parties are well informed or well advised and each acting in what they consider their own best
interests;
• A reasonable time is allowed for exposure in the open market;
• Payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable
thereto; and
• The price represents the normal consideration for the property sold unaffected by special or creative
financing or sales concessions granted by anyone associated with the sale.
Highest and Best Use2
The reasonably probable and legal use of vacant land or an improved property that is physically possible,
appropriately supported, financially feasible and that results in the highest value. The four criteria the highest
and best use must meet are legal permissibility, physical possibility, financial feasibility and maximum
profitability. Alternatively, the probable use of land or improved property — specific with respect to the user and
timing of the use — that is adequately supported and results in the highest present value.
Fee Simple Interest'
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.
Leased Fee Interest4
An ownership interest held by a landlord with the rights of use and occupancy conveyed by lease to others. The
rights of the lessor (the fee simple owner) and the lessee are specified by contract terms contained within the
lease.
Leasehold Interests
The interest held by the lessee (the tenant or renter) through a lease transferring the rights of use and occupancy
for a stated term under certain conditions.
Going -Concern Valueb
The market value of all the tangible and intangible assets of an established and operating business with an
indefinite life, as if sold in aggregate; more accurately termed the market value of the going concern.
The value of an operating business enterprise. Goodwill may be separately measured but is an integral
component of going -concern value when it exists and is recognizable.
"Bulk" Market Value'
The value of multiple units, subdivided lots, or properties in a portfolio as though sold to a single buyer in one
transaction. Sometimes called bulk sale value.
In some appraisal circles, this value estimate is known as "Bulk" value — the value of a property sold in bulk to
one investor who intends to undertake the sellout of the individual units to those who will ultimately use them.
"Bulk" value appears to comply with the value requisites in the former Federal Home Loan Bank Board
(FHLBB) Memorandum R-41c, Subtitle 15, Page 7.
19-PIP MERIDIAN APPRAISAL GROUP, INC. 7
DEFINITION OF IMPORTANT TERMS (CONT'D)
"Report the market value to a single purchaser, as of the date of completion, for all properties, wherein
a portion of the overall real property rights for physical assets would typically be sold to its ultimate
users over some future period. Valuations involving such properties must fully reflect all appropriate
deductions and discounts, as well as the anticipated cash flows to be derived from the disposition of the
assets over time. Appropriate deductions and discounts are considered to be those which reflect all
expenses associated with the disposition of the realty, as of the date of completion, as well as the cost of
capital and entrepreneurial profit."
The topic of "bulk" value is also consistent with the Interagency Appraisal and Evaluation Guidelines
(December 2, 2010) requirement that an appraisal "must analyze and report appropriate deductions and
discounts for proposed construction or renovation, partially leased buildings, non -market lease terms, and tract
developments with unsold units".
Liquidation Values
The most probable price that a specified interest in real property is likely to bring under the following conditions:
• Consummation of a sale within a short time period (we would add: "within a severely limited future
marketing period specified by the client").
• The property is subjected to market conditions prevailing as of the date of valuation.
• Both the buyer and seller are acting prudently and knowledgeably.
• The seller is under extreme compulsion to sell.
• The buyer is typically motivated.
• Both parties are acting in what they consider to be their best interests.
• A normal marketing effort is not possible due to the brief exposure time.
• Payment will be made in cash in U.S. dollars or in terms of financial arrangements comparable
thereto.
• 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.
Definition Sources
1 Title XI - Financial Institutions Reform, Recovery and Enforcement Act of 1989 ("FIRREA"), (Pub.L.No.101-73, Title XI, 103 Stat. 511(1989);
12 U.S.C. 3310, 3331-3351, as subsequently amended; Interagency Appraisal and Evaluation Guidelines dated December 2, 2010; The
Appraisal of Real Estate, Appraisal Institute, 14th Edition, 2013, Page 59
2 The Appraisal of Real Estate, Appraisal Institute, 14th Edition, 2013, Page 333
3 The Dictionary of Real Estate Appraisal, Appraisal Institute, 5th Edition, 2010, Page 78
4 The Dictionary of Real Estate Appraisal, Appraisal Institute, 4th Edition, 2002, Page 161. The Dictionary's 5th Edition definition of fee simple
interest (Page 111) is "A freehold (ownership interest) where the possessory interest has been granted to another party by creation of a landlord -
tenant relationship (i.e. a lease)." While both are accurate, we consider the Dictionary's 4th Edition definition to be more descriptive and easily
understood.
5 The Dictionary of Real Estate Appraisal, Appraisal Institute, 4th Edition, 2002, Page 162. The Dictionary's 5th Edition definition of leasehold
interest (Page 111) is "The tenant's possessory interest created by a lease." While both are accurate, we consider the Dictionary's 4th Edition
definition to be more descriptive and easily understood.
6 The Dictionary of Real Estate Appraisal, Appraisal Institute, 5th Edition, 2010, Page 88
7 The Dictionary of Real Estate Appraisal, Appraisal Institute, 5th Edition, 2010, Page 24
8 The Dictionary of Real Estate Appraisal, Appraisal Institute, 5th Edition, 2010, Pages 115-116
19-PIP MERIDIAN APPRAISAL GROUP, INC. 8
LOCATION MAP
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19-PIP MERIDIAN APPRAISAL GROUP, INC.
9
AERIAL TAX MAP
-_=
19-PIP MERIDIAN APPRAISAL GROUP, INC. 10
FLOOD MAP
19-PIP MERIDIAN APPRAISAL GROUP, INC.
11
SUBJECT PHOTOGRAPHS
NW 62ND STREET LOOKING WEST FROM NW 15TH NW 62ND STREET LOOKING EAST FROM NW 15TH
AVENUE - SUBJECT ON LEFT AND RIGHT AVENUE
NW 1 5TH AVENUE LOOKING NORTH FROM NW
62ND STREET - SUBJECT ON LEFT
NW 15TH AVENUE LOOKING SOUTH FROM NW
62ND STREET - SUBJECT ON RIGHT
NORTHERN PARCEL LOOKING WEST FROM NW SOUTHERN PARCEL LOOKING WEST FROM NW
62ND STREET 15TH AVENUE
19-PIP MERIDIAN APPRAISAL GROUP, INC.
12
SUBJECT PHOTOGRAPHS (CONT'D)
15' ALLEY ON NORTHERN PARCEL LOOKING
NORTH FROM NW 62ND STREET
SOUTHERN PARCEL LOOKING SOUTH FROM
NW 62ND STREET
NORTHERN PARCEL LOOKING NORTH FROM
NW 62ND STREET
NORTHERN PARCEL LOOKING NORTHWEST
FROM NW 62ND STREET
19-PIP MERIDIAN APPRAISAL GROUP, INC. 13
SUBJECT PROPERTY DATA
Purpose and Date of Appraisal
The purpose of this appraisal was to estimate the market value of the leased fee interest in the subject property.
We have provided the value of the property as is, as if complete and as if stabilized. We have provided these
values as restricted, and under the hypothetical condition as an un-restricted market property. The date of
valuation is September 10, 2019. The projected date of completion is on or about December 10, 2020, the dates
of stabilization are estimated to be in or about March 10, 2021 (market) and March 10, 2021 (restricted). The
date of the appraisal is September 11, 2019.
Intended Use and Users of Appraisal
The intended use of this appraisal is for loan underwriting and/or credit decisions; this valuation assignment
was developed consistent with the scope specified by Seltzer Management Group, Inc. The intended user of
this report is Seltzer Management Group, Inc., as agent for the Florida Housing Finance Corporation, and
CitiBank N.A., Freddie Mac, Miami -Dade County and the City of Miami. No other use or users are intended.
Type
The Residences at Dr. King Boulevard apartments will consist of 120 rental units. The subject will set aside
20% (24) of the units for households earning 30% or less of the Area Median Income (AMI), 63% (75) of the
units for households earning 60% or less of AMI, 8% (nine) of the units for households earning 80% or less of
AMI and 10% (12) of the units at market rates. The subject will be restricted by the Housing Credit, HOME,
SURTAX and Tax -Exempt Bond programs.
Location
The subject is located on the north and south sides of Dr. King Boulevard (NW 62nd Street) and the west side
of NW 15th Avenue in Miami, Miami -Dade County Florida.
Scope of the Appraisal
The scope of this appraisal included the analysis of market conditions for multi -family apartment buildings in
the subject market. This analysis included investigations of existing and proposed developments that would
impact upon the rental income/expenses of the subject property, as well as an analysis of comparable properties'
income and expense histories. Comparable rental data was gathered from personal property inspections and
telephone interviews. Additionally, we have analyzed data gathered from comparable apartment building sales
that were obtained from the county tax rolls and from other Florida markets with sales of similar apartment
projects. We also compiled data from local planning and zoning departments, county property appraisers'
records, and other government departments.
We have utilized the Sales Comparison Approach to value the land "as though vacant." We utilized the Sales
Comparison and Income Approaches to value the subject as restricted and under the hypothetical condition as
an un-restricted market property. The Cost Approach was only used under the hypothetical condition and was
not applicable as restricted.
Legal Description
The legal description is as follows (see Extraordinary Assumptions):
19-PIP MERIDIAN APPRAISAL GROUP, INC. 14
SUBJECT PROPERTY DATA (CONT'D)
South Parcel:
North Parcel:
PARCEL 7
LOTS 19 AND 20 IN BLOCK 11. ORANGE HEIGHTS, ACCORDING TO THE PLAT THEREOF, A5
RECORDED IN PLOT BOOK 14, PAGE 62. OF THE PUBLIC RECORDS OF MIAMI-DUDE COUNTY,
FLORIDA, LESS THE NORTH 30 I-ELI; TOGETHER WIT? 771E NORTH 1/2 OF ALLEY LYING SOUTH
AND ADJACENT TO LOTS 79 AND 20, SAID ALLEY CLOSED PER ORDINANCE 13492.
PARCEL 8
LOTS 21 THROUGH 25 AND THE WEST 16 PEET OF LOT 26 LESS TiIf NORTH 30 FEED OF ALL
LOTS IN BLOCK 11, OF ORANGE HE7GHTS, ACCORD1NG TO THE FLAT THEREOF AS RECORDED IN
PLAT BOOK 14, AT PAGE 62, OF THE PUBLIC RECORDS OF MIAMI-DADE COUNTY, FLORIDA;
TOGETHER W1T1-i THE NORTH 1/2 OF ALLEY LYING SOUTH AND ADJACENT TO LOTS 79 AND 20,
SAID ALLEY CLOSED PER ORDINANCE 1349.2.
PARCEL 9
LOTS 27 AND 28 AND THE EAST 9 FEET OF LOT 25, LESS THE NORTH 30 FEET OF ALL LOTS,
IN BLOCK 11 OF ORANGE HEIGHTS, ACCORDING TO THE PLAT THEREOF AS RECORDED IN PLAT
BOOK 14, PAGE 62 OF THE PUBLIC RECORDS OF MIAMI-DADE COUNTY, FLORIDA, LESS THAT
PORTION OF SAID LOT 28 WHICH LIES WITHIN THE EXTERNAL AREA FORMED BY A 25.00 FOOT
RADIUS ARC CONCAVE TO THE SOUTHWEST, TANGENT TO THE EAST LINE OF LOT 28, AND
TANGENT TO THE SOUTH LINE OF THE NORTH 30.00 FEET OF SAID BLOCK 1 1; TOGETHER WITH
THE NORTH 1/2 OF ALLEY LYING SOUTH AND ADJACENT TO LOTS 27, 28 AND 26, SAID ALLEY
CLOSED PER ORDINANCE 13492.
THE ABOVE DESCRIBED LANDS FORM A SINGLE CONTIGUOUS FAI?CEL, WITHOUT GAP, GORE
HIATUS OR OVERLAP.
PARCEL 1
LOT 15, BLOCK 6, OF _EAST LIBERTY CITY SECTION A, ACCORDING TO THE PLAT THEREOF, AS
RECORDED IN PLAT BOOK 39 PAGE 19 OF THE PUBLIC RECORDS OF MJAMI-LADE COUNT];
FLORrOA.
PARCEL 2
LOTS 11, 12, 13, AND 14, OF BLOCK 6, OF EAST LIBERTY CITY SECTION A. ACCORDING TO THE
PLAT THEREOF, AS RECORDED IN PLAT BOOK 39, AT PAGE 19. OF THE PUBLIC RECORDS OF
MIAMI-DADE COUNTY FLORIDA,
PARCEL 3
LOT 9, IN BLOCK 6, OF EAST LIBERTY CITY SECTION A, ACCORDING TO THE PLAT THEREOF, AS
RECORDED IN FLAT BOOK 39, AT PAGE 19, OF THE -USLIC RECORDS OF MMMI-DADE COUNTY
FLORIDA, A./K/A 1$15 N.W. 52ND ST., MIAMI, FLORIDA.
PARCEL 4
LOT 8, BLOCK 6, OF EAST LIBERTY CITY SECTION A, ACCORDING TO THE PLAT THEREOF,, AS
RECORDED 1N PLAT BOOK 39, AT PAGE 19, OF TT-IE PUBLIC RECORDS OF M6AM1-DARE COUNTY
FLORIDA.
PARCEL 5
LOT 7. BLOCK 6, OF EAST LIBERTY CITY SECTION A, ACCORDING TO THE PLAT THEREOF, AS
RECORDED IN PLAT BOOK 39, AT PAGE 79, OF THE PUBLIC RECORDS OF MIAMI-DADE COUNTY,
FLORIDA.
PARCEL 5
LOT 6, BLOCK 6, OF EAST LIBERTY CITY SECTION A, ACCORDING TO THE PLAT THEREOF, A5
RECORDED IN PLAT ROOK 39, AT PAGE Ts, of THE PUBLIC REC0 0s OF M1AMI-DARE COUNTY,
FLORIOA.
Property Rights Appraised
The interest appraised in the property is the leased fee interest. The future leases on the subject property will
not result in a leasehold value, so the value of the leased fee interest is estimated to be similar to the fee simple
value estimate.
Ownership and Three -Year History of Subject
According to the Miami -Dade County Tax Rolls, the subject property is currently owned by City of Miami.
The subject is currently under contract to Residences at Dr. King Boulevard, Ltd. via assignment from Atlantic
19-PIP MERIDIAN APPRAISAL GROUP, INC. 15
SUBJECT PROPERTY DATA (CONT'D)
Pacific Communities for a consideration of $155,621.12 plus some closing costs and extension fees to close on
or by December 31, 2019; this contract is not considered to be at market levels. There have been no other
transfers of the property within the last three years.
Flood Zone
According to the FEMA Flood Hazard Boundary Map, Community Panel 12086C-0303L dated September 11,
2009, the subject property appears to be located within Zone "X". Zone "X" is an area outside the 100 year
flood plain; mandatory flood insurance purchase requirements do not appear to apply.
Zoning/Future Land Use
The subject property is zoned T6-8-O & T4-L, Suburban Transect Zone - Open and General Urban Transect
Zone -Limited, by the City of Miami. The future land use designation is Mixed -Use. The subject appears to
conform to the zoning requirements.
Assessment and Taxes
Current Taxes
The subject's 2018 taxes are calculated as follows.
Subject Property Real Estate Taxes
01-3114-035-2000;
2020 & 2030; 01-
3114-035- 027-1210,
1220, 1230, 1240,
1250 & 1290
Parcel #
Total Assessment
$408,174
Exemption
$408,174
Taxable Assessed Value
$0
Current Year Millage Rate
0.0209454
Current Year Gross Ad Valorem Taxes
$0
Non Ad Valorem Taxes
$0
Total Gross Taxes
$0
Net Taxes w/4% Discount for payment in November
$0
Net Taxes Per Unit
$0
Up to a 4% discount is available if taxes are paid in November, decreasing 1% per month. The current and
previous years' taxes are paid; there are no delinquent taxes.
Estimated Taxes as a Market Property
All appraisals start with the definition of market value. The following definition of market value is from the
Uniform Standards of Professional Appraisal Practice (USPAP):
Market Value: a type of value, stated as an opinion, that presumes the transfer of a property (i.e., a right of
ownership or a bundle of such rights), as of a certain date, under specific conditions set forth in the definition
of the term identified by the appraiser as applicable in an appraisal.
From 2018 Florida Statutes 193.1555
Beginning in the year following the year the property becomes eligible for assessment pursuant to this section,
the property shall be reassessed annually on January 1. Any change resulting from such reassessment may not
exceed 10 percent of the assessed value of the property for the prior year. Except as provided in this subsection,
property assessed under this section shall be assessed at just value as of January 1 of the year following a
qualifying improvement or change of ownership or control.
In other words, properties that have a change in ownership or control can be assessed at full just value, while
those that have not had a change in ownership or control are limited to a 10 percent increase.
19-PIP MERIDIAN APPRAISAL GROUP, INC. 16
SUBJECT PROPERTY DATA (CONT'D)
Real Estate Tax Comparables
Market value appraisals presume the transfer of the property appraised, therefore, real estate tax comparables
are properties that sold in the year previous to the assessment. Properties that did not sell in the previous year
are not real estate tax comparables for market value appraisals. In addition, there is no statutory reason that
Property Appraisers should treat affordable housing projects any differently than market rate projects when it
comes to real estate tax assessment following a sale. In Florida, real estate tax increases are capped at 10%
annually for commercial properties. The one exception is if a property is sold in the previous tax year. The
following chart summarizes the tax comparables:
Market
Tax Comparables
No.
Project Name
County
Year
No. of
2018 Total
2017 Sale
Assessed/
Built
Units
Assessment
Price
Sale Price
1
Rio Apartments
Miami -Dade
1971
294
$33,193,000
$42,000,000
79%
2
Berkshire Coral Gable
Miami -Dade
2015
276
$77,421,000
$100,000,000
77%
3
Milagro Coral Gables
Miami -Dade
2013
237
$60,002,000
$78,150,000
77%
4
Lago Paradiso/Hamm
Miami
1987
424
$49,075,538
$61,240,000
80%
-Dade
5
Club Prado
Miami -Dade
2016
196
$48,140,000
$61,000,000
79%
Averages
2000
285
$53,566,308
$68,478,000
78%
The assessed value is allowed to reflect full market value in the tax year following a sale. The chart above
indicates a range of assessments following a sale of 77% to 80% and average 78%. Since we are valuing the
subject in exchange, we have assumed a sale of the property at our appraised value. We have reconciled a ratio
of about 78% for the subject property. This results in an estimated assessment of $93,000 per unit. The resulting
tax estimate is shown below, including personal property.
Subject's Estimated Taxes - Market
Number of Units
120
Reconciled Assessment per Unit
$93,000
Total Assessment
$11,160,000
Millage Rate
0.0209454
Estimated Ad Valorem Taxes
$233,751
Estimated Non Ad Valorem Taxes
$0
Total Gross Taxes
$233,751
Less: 4% Early Payment Discount
$9,350
Plus: Personal Property Taxes
$4,503
Total Real Estate and Personal Property Taxes
$228,904
Total Real Estate and Personal Property Taxes/Unit
$1,908
Estimated Taxes as a Restricted Property
Since we are valuing the subject in exchange, we have assumed a sale of the property at our appraised value.
We have reconciled a ratio of about 78% for the subject property. We reconcile an assessment for the subject at
$52,000 per unit. The resulting tax estimate is shown below, including personal property.
Subject's Estimated Taxes - Restricted
Number of Units
120
Reconciled Assessment per Unit
$52,000
Total Assessment
$6,240,000
Millage Rate
0.0209454
Estimated Ad Valorem Taxes
$130,699
Estimated Non Ad Valorem Taxes
$0
Total Gross Taxes
$130,699
Less: 4% Early Payment Discount
$5,228
Plus: Personal Property Taxes
$4,503
Total Real Estate and Personal Property Taxes
$129,975
Total Real Estate and Personal Property Taxes/Unit
$1,083
19-PIP MERIDIAN APPRAISAL GROUP, INC. 17
REGIONAL AREA MAP
1
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Port Charlotte
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Harbor
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palm City_ Port Salerno
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Canal Point
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Clarke Shores
Bo nton Beach
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Bo a Raton
eld Beach
no Beach
BD9
Coral Springs
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BROW/sit-Etc-COT-NTYFo Lauderdale
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Islam ora des
19-PIP MERIDIAN APPRAISAL GROUP, INC. 18
REGIONAL OVERVIEW
The subject property is located in Miami -Dade County in what we have defined as the South Florida Regional
Area (region) in the southern portion of Florida. For purposes of our discussion, the South Florida Regional
Area is defined to contain the Miami -Fort Lauderdale -Palm Beach CBSA (Broward County, Miami -Dade
County and Palm Beach County) as defined by the US Census Bureau and also includes the Key West
Micropolitan Statistics Area (Monroe County).
Palm Beach County was created in 1909 and was named after its first settled community which was named
Palm Beach due to the palm trees and beaches. Broward County was created in 1915 and was named after
Napoleon Bonaparte Broward, Governor of Florida from 1905 to 1909. Dade County was created in 1836
under the Territorial Act of the United States and was named after Major Francis L. Dade, a soldier killed in
1835 in the Second Seminole War. When created it included Dade, Broward and Palm Beach Counties. It was
renamed to Miami -Dade County in November 1997. Monroe County was created in 1823 and was named after
James Monroe, the fifth President of the United States. These four counties encompass about 10,055 square
miles of which 3,757 square miles are made up of water (37.36%) and 6,298 square miles are land area (83.51%).
Palm Beach County encompasses 2,386 total square miles with 412 square miles of water (17.27%); Broward
County encompasses 1,320 square miles with 114 square miles of water (8.66%); Miami -Dade County
encompasses 2,431 square miles with 485 square miles of water (19.96%); and Monroe County encompasses
3,738 square miles with 2,745 square miles of water (73.43%) and the Florida Everglades National Park makes
up a large majority of the county total land area.
Demographics
The South Florida Regional Area's total population increased 10.14% to 6,209,305 people over the last seven
years. It is expected increase 6.68% to reach 6,623,809 people by 2022. The subject property is located in Miami -
Dade County where the current population increased 10.26% to 2,752,656 over the last seven years and is
expected to increase 6.71% over the next five years. The Miami -Dade County population growth rate (10.26%)
exceeded the regional rate (10.14%), lagged the state rate (10.36%), and exceeded the national rate (5.31%) over
the last seven years. The county's population growth rate (6.71%) is expected to exceed the regional rate
(6.68%), exceed the state rate (6.65%), and exceed the national rate (3.77%) over the next five years.
7,000,000
6,000,000
5,000,000
4,000,000
3,000,000
2,000,000
1,000,000
0
• 2010 Census
■ 2017 Estimate
2022 Projection
Broward
County
1,748,066
1,927,988
2,057,925
POPULATION
Miami -Dade
County
2,496,435
2,752,656
2,937,399
Mo nroe
County
Palm Beach
County
73,090 1,320,134
78,073 1,450,588
82,262 1,546,223
Region
5,637,725
6,209,305
6,623,809
The South Florida Regional Area total households increased 9.63% to 2,335,462 over the last seven years. It is
expected to increase 6.61% to reach 2,489,786 households by 2022. The subject property is located in Miami -
Dade County where the total households increased 10.56% to 958,906 over the last seven years and are expected
to increase 6.94% over the next five years. The Miami -Dade County total households growth rate (10.56%)
exceeded the regional rate (9.63%), exceeded the state rate (10.14%), and exceeded the national rate (5.69%)
19-PIP MERIDIAN APPRAISAL GROUP, INC. 19
REGIONAL OVERVIEW (CONT'D)
over the last seven years. The Miami -Dade County total households growth rate (6.94%) is expected to exceed
the regional rate (6.61%), exceed the state rate (6.67%), and exceed the national rate (3.96%) over the next five
years.
3,000,000
2,500,000
2,000,000
1,500,000
1,000,000
500,000
0
• 2010 Census
■ 2017 Estimate
2022 Projection
HOUSEHOLDS
■ II
Broward
County
686,047
747,887
Miami -Dade
County
795,628
867,352
958,906
1,025,486
Monroe
County
32,629
35,293
37,419
Palm Beach
County
544,227
593,376
631,253
R eg o
2,130,255
2,335,462
2,489,786
The South Florida Regional Area's average household size increased 0.38% to 2.62 people over the last seven
years from 2.61 people in 2010. The region's average household size is expected to increase 0.38% to 2.63
persons per household over the next five years. Miami -Dade County has an average household size of 2.83
people which is higher the regional area (2.62), higher the State (2.49) and higher the National average (2.57).
The average household size is expected to decline 0.35% over the next five years which is at slightly less pace
than the regional area (-0.33%), and at a more rapid pace than the State (remain similar) and the Nation (0.00%).
3.00
2.50
2.00
1.50
1.00
0.50
0.00
■ 2010 Census
■ 2017 Estimate
2022 Projection
AVERAGE HOUSEHOLD SIZE
I. i
Broward County
2.52
2.56
2.57
Miami -Dade
County
2.83
2.83
2.82
Monroe County
2.18
2.15
2.14
Palm Beach
County
2.39
2.41
2.42
Region
2.61
2.62
2.63
Employment
The unemployment rate for the South Florida Regional Area as of June 2018 was 3.9%. The statewide
unemployment rate was 3.9% while the national unemployment rate was 4.2%. The subject is located in Miami -
Dade County and the June 2018 countywide unemployment rate was 4.1%. The tables below summarize 10
year unemployment rate trends and the one year unemployment trends for the counties making up the region,
19-PIP MERIDIAN APPRAISAL GROUP, INC. 20
REGIONAL OVERVIEW (CONT'D)
the region, the state and the nation. Miami -Dade County's unemployment rate is the second highest compared
to the other counties in the region, is higher than the overall region, higher than the state, and lower than
national unemployment rates.
10 YEAR UNEMPLOYMENT RATE TRENDS
14
2
Jul Jul Jul Jul Jul
Jul
Jul
Jul
Jul
Jul
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Broward County Miami -Dade County Monroe County Palm Beach County
Region
Florida -United States
PERCENT UNEMPLOYED
5.5
5
4.5
4
3.5
3
2.5
1 YEAR UNEMPLOYMENT RATE TRENDS
Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun
2017 2017 2017 2017 2017 2017 2017 2018 2018 2018 2018 2018 2018
Broward County 4.1 4.1 3.9 3.3 3.3 3.6 3.4 3.8 3.5 3.5 3.2 3.2 3.7
Miami -Dade County
Monroe County
5.0 4.8 4.9 4.7 4.6 4.6 4.7 4.7 4.6 5.0 4.2 4.0 4.1
2.8 2.8 2.7 3.6 3.3 3.2 3.4 3.7 3.3 3.1 2.8 2.7 3.2
Palm Beach County 4.4 4.5 4.4 3.7 3.6 3.8 3.5 4.0 3.7 3.6 3.3 3.3 3.9
Region 4.5 4.5 4.4 4.0 3.9 4.1 4.0 4.3 4.0 4.1 3.7 3.5 3.9
Florida 4.4 4.4 4.3 3.7 3.6 3.8 3.7 4.1 3.8 3.8 3.4 3.4 3.9
United States 4.5 4.6 4.5 4.1 3.9 3.9 3.9 4.5 4.4 4.1 3.7 3.6 4.2
Employment had generally kept pace with population (labor force) growth from January 2004 to March of
2007, gradually bringing the unemployment rate down to around 3.3% which was a 10 year low for the region.
Concurrent with the nationwide Great Recession commencing 4Q2007, however, the local unemployment rate
rapidly increased to a 10 year high of 11.2% in August 2009. Since this point, the unemployment rate has since
gradually declined dropping below 10% in February 2011, below 9% in November 2011, below 8% in October
2012, below 7% in October 2013, below 6% in October 2014, below 5% in February 2016 and finally below 4%
in September 2017. The current unemployment rate for the region is 3.9% and for Miami -Dade County it is
4.1 %. The following table shows total labor force (the darker blue background), employment or the total number
of employed people (light blue area in foreground). The light blue employed area covers the dark blue total
labor force and the dark blue area that shows represents unemployed persons in the MSA.
19-PIP MERIDIAN APPRAISAL GROUP, INC. 21
REGIONAL OVERVIEW (CONT'D)
LABOR FORCE AND EMPLOYED
3,300,000
3,200,000
3,100,000
3,000,000
2,900,000
2,800,000
2,700,000
2,600,000
2,500,000
2,400,000
2,300,000
JUL JUL JUL JUL JUL JUL JUL JUL JUL JUL
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Labor Force DEmployed
The US Bureau of Labor Statistics shows that the South Florida Regional Area employment had grown from
2,518,711 jobs (January 2004) to 2,798,121 jobs (January 2008), for an average of about 69,853 new jobs per
year over the four year period. The peak number of jobs was 2,812,854 in November 2007. During the following
two years, from January 2008 to January 2010, 301,941 jobs were lost or about 150,971,300 jobs per year. It
then took almost four years (to December 2013) to recover the number of jobs lost during the recession. Year -
over -year job growth for the past 12 years has averaged 79,558 jobs per year and comparing June 2018 labor
force reflects 38,827 more jobs than June 2017.
130,000
80,000
30,000
-20,000
-70,000
-120,000
-170,000
-220,000
Jun Jun Jun Jun Jun Jun Jun Jun Jun Jun Jun
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
JOBS GAINED/LOST FOR METRO AREA
12 Month Rolling Average
Building Permits
Multi family Permits
The table below summarizes multi -family building permits issued by county for the South Florida Regional
Area for the last 10 years. Multi -family permits peaked in 2005 and declined significantly through 2009. They
19-PIP MERIDIAN APPRAISAL GROUP, INC. 22
REGIONAL OVERVIEW (CONT'D)
have been on a gradual upward trend since 2009 with 2013 levels significantly higher than 2007 levels. However,
2014 saw decline but 2015 has recovered and exceeded the 2014 levels only to decline again in 2016.
MULTI FAMILY BUILDING PERMITS -ANNUALLY
18,000
16,000
14,000
12,000
10,000
8,000
6,000
4,000
2,000
0
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Region 8,054 4,594 1,588 2,852 3,265 8,261 13,588 9,504 16,367 12,049 13,124
�Broward County 2,179 1,256 486 189 998 2,533 3,036 1,281 3,958 2,570 3,286
Miami -Dade County 4,836 2,388 771 2,262 1,656 3,250 8,050 5,654 9,817 6,444 8,269
Monroe County 10 45 2 146 36 89 36 36 59 12 56
-Paim Beach County 1,029 905 329 255 575 2,389 2,466 2,533 2,533 3,023 1,513
The following table summarizes multi -family building permits pulled for the South Florida Regional Area and
for each county over the last 12 months. Note the trend line in black showing a peak in April for the region in
terms of multi -family building permits over the last 12 months and Miami -Dade had the largest share of permits
pulled. Miami -Dade County is the most active county in the region in multi -family building permits with an
average of 998 units permitted per month over the past six months and 741 multi -family units permitted per
month during the last year. The county's multi -family building permit activity represents approximately 91.8%
of the region's total in the most recent month, and the most recent six month average was 26% higher compared
to the last 12 month average.
2000
1800
1600
1400
1200
1000
800
600
400
200
0
MULTI FAMILY BUI LDI NG PERMITS - Monthly
iiLill_ I LA, _hill, _b
Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun
2017 2017 2017 2017 2017 2017 2017 2018 2018 2018 2018 2018 2018
■ Region 1147 1166 942 829 1659 267 577 1899 366 1473 1618 770 1950
Broward County 451 251 124 105 861 63 63 464 22 156 294 118 60
• Miami -Dade County 583 913 422 664 598 19 283 1390 170 856 1259 523 1790
Monroe County 0 2 0 0 0 0 0 0 0 0 5 0 0
Palm Beach County 113 0 396 60 200 185 231 45 174 461 60 129 100
Single Family Permits
The table below summarizes single family building permits issued by county for the South Florida Regional
Area for the last 10 years. Single family permits peaked in 2004 and declined significantly through 2009 reaching
a 10 year low. They have been on a very gradual upward trend since 2009 with 2013 levels slightly lower than
2007 levels. In 2014 single family permits pulled declined only to go up in 2016 exceeding 2007 levels only to
declined slightly again in 2016.
19-PIP MERIDIAN APPRAISAL GROUP, INC. 23
REGIONAL OVERVIEW (CONT'D)
8,000
7,000
6,000
5,000
4,000
3,000
2,000
1,000
0
SINGLE FAMI LY BUI LDING PERMITS -ANNUALLY
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Region 7,360 3,487 2,403 3,296 4,402 5,221 6,512 5,943 7,345 6,913 6,846
Broward County 1,754 908 563 979 1,446 1,023 1,434 1,181 1,494 1,535 1,748
Miami -Dade County 3,246 1,086 624 941 962 1,819 2,266 2,077 2,800 2,873 2,285
Monroe County 259 215 114 125 99 132 143 152 203 208 191
Palm Beach County 2,101 1,278 1,102 1,251 1,895 2,247 2,669 2,533 2,848 2,297 2,622
The following table summarizes single family building permits pulled for the South Florida Regional Area and
for each county over the last 12 months. Note the trend line in black showing a 12 month peak in June of 2017
for the region in terms of single family building permits. Miami -Dade County is the second most active county
in the region in single family building permits with an average of 231 units permitted per month over the past
six months and 192 single family units permitted per month during the last year. The county's single family
building permit activity represents approximately 40.2% of the region's total in the most recent month, and the
most recent six month average was 17% higher compared to the last 12 month average.
900
800
700
600
500
400
300
200
100
0
• Region
SINGLE FAMILY BUILDING PERMITS- MONTHLY
Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun
2017 2017 2017 2017 2017 2017 2017 2018 2018 2018 2018 2018 2018
706 712 606 406 502 380 435 577 601 625 588 606 781
■ Brow ard County 221
• Miami -Dade County 239
217 153
178 186
59 119 113
133 145 138
66 99 151
139 179 222
89 83
200 221
118 159
248 314
• Monroe County 13 16 19 13 19 15 15 14 17 28 17 23 36
■ Palm Beach County 233 301 248 201 219 114 215 285 211 308 267 217 272
Financial Indices
The tables on the following page summarize five year trends in certain national tracked financial indices which
tend to impact real estate and real estate investments. Many commercial lending institutions look at LIBOR
and 10 Year Treasury Constant Maturity Rate returns in their underwriting. CPI trends can be important for
commercial properties and lease structures. The 15 year and 30 year fixed rate mortgage rates have significant
impact on residential development. And the health of the stock market also has significant impact on
investments of all types. All of these factors can influence real estate investors, owners and lenders.
19-PIP MERIDIAN APPRAISAL GROUP, INC. 24
REGIONAL OVERVIEW (CONT'D)
FRED
4,2
4.0
38
3.6
a
� 3.4
ro
3.2
3.0
2.8
2.6
— 15-Year FIrod qMP pia Veg. Analog. In itl. Vnlled Stol.r
2014
2015
2016
Source:Freddie Mn.:
2017
20t8
15 Year Fixed Rate Mortgage
FRED— , a-Y..r Tn. stay Canamnl Mara ray' fiale
32
3A
2.8
24
24
u 2.2
2.0
1.8
ib
14
1.2
2014
2015
2016
2017
Source: Board of Gone rhors of !he Fedefdl Resetre 5y 51e m (Gal
10-Year Treasure Rate
FREDCbrvinmer Prlc. Inelibn tar All artian Caneamare. AA llarn
252.5
250.0
247-5
245.0
242-5
240.0
237.5
235.0
232.5
Index 1982-I984•I0u
230.0
2014 2015 2016 2017 2018
Some : li S. Buteou at Labor 5l0t1llic5
Consumer Price Index Change
FRED— 30-Year Fined REY Marlin. km/alp In Ito UMW. Stop.
4.8
14
44
E 4.2
0
38
34
34
2014 2015 2016 2017 2018
5owce: Freddie M. '
30 Year Fixed Rate Mortgage
FRED— 1-4onth Landon Int.rbank Otta,M nat. (LJ1110A , baren an V.S. Dollar
22
20
1.8
16
14
1.2
u
a 10
0A
04
0.4
0.2
0.0
. / s
2014
2015
2016
2017 2018
Sautes: iCE Berk hmdtk AdrmhMrallen /enlled (IBA)
One Month Libor
FRED
28,000
m
to
26,000
24,000
22,000
20,000
18,000
16,000
Da. Jo ma lyd,arrlal AY/rap.
2014
2015
20 r6
2017
5ourc e: 5&P dew }ones lhdk:es LLC
Dow Jones Industrial Average - Five Year
The current 15 year fixed mortgage rate is 4%; the 30 year fixed mortgage rate is 4.6%; LIBOR is 2.10%; the
current 30 Year Treasury Constant is 2.9%; CPI is currently at 0.429; and the Dow Jones Industrial Average is
currently at 25,188.
19-PIP MERIDIAN APPRAISAL GROUP, INC.
25
REGIONAL OVERVIEW (CONT'D)
Transportation
The region is served by three international airports, the Palm Beach International Airport located in Palm Beach
County, Fort Lauderdale/Hollywood International Airport in Broward County and Miami International
Airport in Miami -Dade County. The region also has three ports including the Port of Miami, the Port of Palm
Beach and Port Everglades next to the Fort Lauderdale/Hollywood International Airport. Below is a brief
description of each facility.
Miami International Airport (MIA) is a 3,230 acre facility and is the second most active international passenger
airport in the United States, the loth most active airport in total passengers and the 3rd most active airport in
cargo (mail and freight). MIA has four runways, a 8,600 foot grooved asphalt small aircraft runway, a 9,355
foot grooved asphalt runway for medium service commercial aircraft, a 10,500 foot grooved asphalt runway
capable of handling any type of aircraft and a second 13,000 foot grooved asphalt runway also capable of
handling any type of aircraft. Miami International Airport has three terminals totaling more than 7,000,000
square feet of space with more than 123 gates for international and domestic airlines. The facility has more than
3,400,000 square feet of warehouse and support space, parking for more than 9,000 cars and has 16 car rental
agencies. The airport creates more than 50,800 direct jobs and an estimated 200,000 indirect jobs for the local
economy and has an economic impact in excess of $6 billion dollars annually.
Palm Beach International Airport (PBI) is a 2,120 acre facility serving the greater Palm Beach County
Metropolitan area. The facility has one main terminal for domestic and international travel, totaling about
600,000 square feet of area under roof. The facility has three main runways, a 6,900 foot grooved asphalt
runway, a 10,000 foot grooved asphalt runway and a 3,200 foot grooved asphalt runway. The airport handles
about 5,600,000 domestic and international passengers per year and more than 5,000,000 pounds of cargo per
year. The airport employs more than 3,000 direct and indirect jobs and creates more than $500,000,000 in
annual revenue to the Palm Beach County area. The airport has been voted the third best airport in the US and
the sixth best in the world by readers of Conde Nast.
Fort Lauderdale/Hollywood International Airport (FLL) is a 1,380 acre facility serving the Broward County
Metropolitan area. The facility has three terminals for domestic and/or international travel, totaling about
1,525,000 square feet of area under roof. The facility has three main runways, a 9,000 foot grooved asphalt
runway, a 8,000 foot grooved asphalt runway and a 6,930 foot grooved asphalt runway. The airport handles
about 24,000,000 domestic and international passengers per year and more than 171,890,000 pounds of cargo
per year. The airport employs more than 28,100 direct and indirect jobs and creates more than $2.7 billion in
annual revenue to the Broward County area. The airport is immediately adjacent to Port Everglades making it
easy to fly into Fort Lauderdale and immediately embark one of the many cruise ships operating out of this
port. The 8,000 ft. runway was completed in September 2014. There are planned renovations to three of its
terminals scheduled to be completed in 2017. Five international gates are being built in Concourse A.
Port Everglades is located on the eastern boundary of Broward County just east of the Fort
Lauderdale/Hollywood International Airport and along the shoreline of the Atlantic Ocean. The facility
encompasses about 2,190 total acres of which 1,742 acres are uplands and 448 acres are submerged lands. The
port handles more than 4,000 ship calls per year, 3,500,000 cruise passengers per year and more than 23,000,000
tons of cargo annually. There are 12 cruise terminals with 250,000 square feet of terminal space and more than
8,000 feet of docking space for up to 10 cruise ships at one time. Port Everglade is one of the most active
passenger ports in the county. More than 150 businesses operate out of the port and it is home for more than
10,000 port workers (individuals who have access to job sites within port gates). The port is estimated to have
a $25 billion impact on the Miami -Fort Lauderdale -Pompano Beach area and it is estimated that the port
impacts more than 50,000 jobs in the four surrounding counties.
Port of Palm Beach is located on the eastern boundary of Palm Beach County along the shoreline of the Atlantic
Ocean. The facility encompasses about 970 total acres of which 800 acres are uplands and 170 acres are
submerged lands. The port handles more than 2,450 ship calls per year, 341,000 cruise passengers per year and
more than 2,000,000 tons of cargo annually. There are two cruise terminals with more than 100,000 square feet
of terminal space and more than 2,500 feet of docking space for up to four ships at one time. More than 45
businesses operate out of the port and it is home for more than 3,500 port workers (individuals who have access
19-PIP MERIDIAN APPRAISAL GROUP, INC. 26
REGIONAL OVERVIEW (CONT'D)
to job sites within port gates). The port is estimated to have more than a $5 billion impact on the Miami -Fort
Lauderdale -Pompano Beach area and it is estimated that the port impacts more than 10,000 jobs in the four
surrounding counties.
Port of Miami is located in Biscayne Bay in southeastern Miami -Dade County along the shoreline of the
Atlantic Ocean on Dodge Island. The facility encompasses about 970 total acres of which 520 acres are uplands
and 450 acres are submerged lands. The port handles more than 5,000 ship calls per year, 4,000,000 cruise
passengers per year and more than 7,400,000 tons of cargo annually. There are eight cruise terminals with more
than 350,000 square feet of terminal space and more than 10,000 feet of docking space for up to 10 cruise ships
at one time. The Port of Miami Everglade is one of the most active passenger ports in the world. More than 250
businesses operate out of the port and it is home for more than 12,000 port workers (individuals who have
access to job sites within port gates). The port is estimated to have more than a $25 billion impact on the Miami -
Fort Lauderdale -Pompano Beach area and it is estimated that the port impacts more than 50,000 jobs in the
four surrounding counties.
Interstate-95 is a limited -access highway that travels 1,900 miles and is the longest north/south interstate
highway in the country. It merges from US 1 in Miami and continues 1,900 miles and ends in Maine. The
average daily traffic count for the highway is about 72,000 vehicles per day and can reach up to 300,000 per
day. There is a three phase project currently under construction that will add two express toll lanes in each
direction from the Golden Glades Interchange in Miami -Dade County to Broward Boulevard in Broward
County. The tolls are determined by congestion pricing, which mean the toll changes based on how many
people are in the lanes. The construction for phase one is done and phase two is scheduled to be finished in
spring 2015. Phase three is scheduled to start in early 2016.
Interstate 75 is a limited -access highway that travels 1,700 miles and is the second longest interstate highway in
the country. It originates at the Hialeah -Miami Lakes border a few miles northwest of Miami and runs westward
to the west coast of and then turns northward and continues to the Upper Peninsula of Michigan. There is
planned construction to build two express toll lanes in each direction from just south of State Road 836 in
Miami -Dade County to Interstate 595 in Broward County. The tolls are determined by congestion pricing,
which mean the toll changes based on how many people are in the lanes. The construction began in early 2014
and is scheduled to be complete in 2019.
Florida Turnpike is a limited -access toll road that travels 264 miles from the southern portion of Miami to the
city of Wildwood in Sumter County. On average, 1.8 million people use the Florida Turnpike annually. There
are several construction projects in the South Florida area. The first will be to implement all -electronic tolling
at the Hollywood/Pines Boulevard exit and Griffin Road exit. There is also planned improvements to
intersections at Northwest 199th Street/Dolphin Center and County Line Road. The Turnpike will be widened
from six lanes to ten, sound walls will be constructed and express lanes will be added in Miami -Dade County
from north of Sunset Drive to north of Bird Road. This is scheduled to be complete in 2018 and will cost $54.4
million. The Turnpike will also be widened from six lanes to ten, sound walls will be constructed and express
lanes will be added from SW 216th St. to Eureka Dr. This is scheduled to be complete in summer of 2016 and
will cost $40.9 million. Turnpike widening, express lanes and interchange improvements are also scheduled
from north of Eureka Dr. to south of SW 104th Street. This is scheduled to be complete in late 2016 and will
cost approximately $145.3 million.
Summary
The subject property is located in Miami -Dade County in what is considered the South Florida Regional Area
(region) in the southern portion of Florida. The region has a total population of 6,209,305 people, 2,335,462
total households and has an average household size of 2.62 people. The unemployment rate for the region as
of June 2018 was 3.9%, the statewide unemployment rate was 3.9% while the national unemployment rate was
4.2%. Multi -family permits were at a 10-year low in 2009, but have been on a gradual upward trend since this
point, in the last 12 months permits pulled have declined over the previous 12 months. Single family permits
were also at a 10-year low in 2009 but have been on an upward trend since this point and in the last 12 months
permits pulled were slightly below the same period a year prior. The current 15 year fixed mortgage rate is 4%;
the 30 year fixed mortgage rate is 4.6%; the current 30 Year Treasury Constant is 2.9%; LIBOR is 2.10%; CPI
19-PIP MERIDIAN APPRAISAL GROUP, INC. 27
REGIONAL OVERVIEW (CONT'D)
is currently at 0.429; and the Dow Jones Industrial Average is currently at 25,188. The region is served by three
international airports, the Miami International Airport located in Miami/Dade County, the Palm Beach
International Airport located in Palm Beach County and the Fort Lauderdale/Hollywood International Airport
located in Broward County. The region is also served by three deep water ports and a very good network of
major highways providing easy access to and from the region.
Conclusion
Miami -Dade County is a fast growing area that has attracted numerous retirees and a large working age
population. Transportation needs are provided by road, air, rail and water. In addition, the area has a strong
cultural community. Housing development is present in both the single family and multi -family segments in
response to increases in the population. Overall, the economic outlook for the region appears favorable into the
foreseeable future and we anticipate that real estate values will remain stable, with increasing tendencies.
19-PIP MERIDIAN APPRAISAL GROUP, INC. 28
APARTMENT MARKET OVERVIEW MAP
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19-PIP MERIDIAN APPRAISAL GROUP, INC.
29
Overview
12 Mo. Delivered Units 12 Mo. Absorption Units
Miami Multi -Family
Vacancy Rate 12 Mo. Asking Rent Growth
6,854 6,072 5.7% 2.4%
Apartment rents in the Miami metro increased by 2.4% year over year, and have posted an average annual gain of 2.3%
over the past three years. Vacancies are currently at 5.7% and were above the cycle average. They have trended upwards
and increased by over the past four quarters.
There are 16,000 units currently underway, representing a 10% expansion of the existing inventory. Over the past three
years, 15,980 units have delivered, or a cumulative inventory expansion of 12%.
Sales activity was healthy over the past four quarters, registering at $$949,800,000, prolonging a multi -year stretch of
limited investment. The average annual sales volume over the past five years has been $1.5 billion.
Over the past year, employment gains were essentially in line with the five-year average: Total employment increased by
2.4%, or about 28,700 jobs. Over the past five years, employment has increased by 2.6% annually on average, compared
to a 1.7% average increase nationally
KEY INDICATORS
Current Quarter
4 & 5 Star
3 Star
1 & 2 Star
Market
Annual Trends
Vacancy Change (YOY)
Absorption Units
Delivered Units
Demolished Units
Units Vacancy Rate Asking Rent Effective Rent
Asking Rent Growth (YOY)
Effective Rent Growth (YOY)
Sales Volume
Absorption
Units
Delivered Units
Under Constr
Units
41,162 11.7% $2,120 $2,087 834 0 14,215
33,115 3.9% $1,520 $1,509 60 0 1,675
79,859 115
154,136 16,005
3.4%
5.7%
12 Month = Historical
Average
0.2% 5.2%
6,072 1,660
6,854 1,933
114 274
2.4% 2.0%
2.0%
$622.8M
2.8%
$911 M
i
$1,125
$1,625
Forecast
Average
8.1%
3,164
4,415
303
0.8%
0.9%
N/A
$1,116
$1,606
(23)
871
0
0
Peak When Trough iiii When
7.3% 2000 Q1 3.2% 2006 Q2
6,391 2019 Q2 (1,015) I 2007 Q2
8,222 2019 Q2 48 2002 Q4
1,082 2012 Q2 0 I 2002 Q4
7.3% 2007 Q1 -6.0% 2009 Q2
7.3% 2007 Q1 _ -6.0% ! 2009 Q2
$1.7B 2016 Q4 $135.8M 2008 Q4
Copyrighted report licensed to Meridian Appraisal Group, Inc. - 59871.
41f1, CoStar..
8/23/2019
Page 30
Vacancy
Miami Multi -Family
The vacancy rate is currently at 6.1%, and it has been on the rise since the beginning of the year. It is expected to continue
rising at least until 2021.
While demand has continued to be strong, the supply side is delivering more than the market can readily absorb, even in
a good economy. As a result, vacancy rates are rising. Both construction and absorption are at the highest levels on record.
Demand has been stronger than expected. The Miami apartment market absorbed close to 6,500 units over the past year,
one of the strongest demand years on record. The second quarter of this year saw the strongest level of apartment absorption
on record, with 31 move -ins per day, almost double those of the same quarter last year.
The supply pipeline is very strong, with close to 100 apartment projects under construction, totaling close to 15,000 units.
That is equivalent to 10% of current inventory, making Miami one of the top three most heavily supplied markets in the
country. Another 250 proposed projects could break ground, as well, a prospect captured in our forecasting models for
supply.
Greater Downtown Miami, Miami Springs/Doral, and Coral Gables lead the activity with 5,500, 2,500, and 2,000 units
under construction, respectively. These areas will likely face the largest shock in terms of vacancy rates. Based on the
current construction pipeline, the two-year delivery cycle is forecast to reach peak in 20Q1. The peak will be close to four
times the pre -crisis peak and 30% higher than the most recent peak reached in 17Q1.
While demand is expected to remain strong, the rapid supply buildup will push the vacancy rate up. The forecast is calling
for the vacancy rate to rise to 7.3% over the next year. Deliveries are expected to total 5,300 units over the next four
quarters, while absorption is expected to reach 4,000 units over the same period.
ABSORPTION, NET DELIVERIES & VACANCY
Absorption & Net Delivered Units
4,000
3.500
3.000
2,500
2,000
1,500
1,000
500
0
Forecast
2014 2015 2016 2017 2015 2019 2020 2021 2022 2023
• Absorption • Net Deliveries Vacancy United States Vacancy
Copyrighted report licensed to Meridian Appraisal Group, Inc. - 59871.
•
CoStar
8/23/2019
Page 31
Vacancy
VACANCY RATE
20 %
18 %
16%
14 %
12 %
10 %
8%
6%
4 ova
2%
Forecast
0% 1 1 1 1 1 1 1 1 f 1 1 1 1 1 1 1 i 1 1 1 1 L r. 1 t 1
2014 2015 2016 2017 2018 2019
VACANCY BY BEDROOM
2014
I 1 1
2020
Miami Multi -Family
IJI
2021
Miami 3 Star • Miami 4-5 Star in Miami United States
2015
' I
2016 2017
' Studio ■ 1 Bed ■ 2 Bed 3 Bed
2018
2022
2023
2019
Copyrighted report licensed to Meridian Appraisal Group, Inc. - 59871.
to; CoStar
8/23/2019
Page 32
Rent
Miami Multi -Family
The strong supply pipeline build up has caused Miami rent growth to decelerate consistently since early 2016. Annual rent
growth declined from the high of 4% in 2013 and currently stands at 2.4%. This marks a positive change from the prior
year. U.S. inflation is currently close to 2%.
Miami rental rates currently stand at $1,630/unit. They face a continued downward tilt as more supply hits the market.
Not every submarket in the metro saw slow rent growth. South Beach, Miami Gardens/Opa Locka, and Hialeah/Miami
Lakes saw healthy rent growth in the range of 4% to 6%. These submarkets have seen low deliveries over the past year;
however, they face construction pipelines that range between 3% and 7% of their respective inventory.
Despite having the heaviest construction pipeline at 30% relative to its existing inventory, Downtown Miami saw its rent
growth accelerate over the second quarter of the year and register at 3%. Construction in this submarket is heavily skewed
towards higher end units, a factor that is pushing its rent growth up.
Coral Gables and Miami Springs/Doral saw the weakest rent growth. Coral Gables has close to 2,000 units under
construction, marking a 15% rise in its inventory. This drove rent growth into negative territory in the range of 1.5%.
Miami Springs/Doral is also a heavily supplied submarket, with 750 units delivered over the past year and close to 2,500
units under construction. This dynamic has pushed rent growth close to zero in this submarket.
In addition to supply pressure, rent growth in the Miami metro is hindered by lower incomes that make much of the new
construction unaffordable to a large part of the population.
Miami is the most expensive metro in Florida and one of the most expensive metros in the Southeast, a fact that further
limits residents' buying power. Median household income for the Miami -Dade County is 20% below that of the U.S.
average, while rents are 20% higher than the national average. This dynamic has resulted in Miami residents having the
highest rent to income ratio in the country, at 31 %, more than 10% higher than the rest of the country. This tight spending
buffer makes the supply pressure more pronounced on rent growth prospects, as residents have less disposable income to
absorb rent rises.
The good news is that Miami's median household income is rising faster than the rest of the country. In addition, rent rises
in Miami now are slower than household income rises. This essentially translates into a gradual increase in buying power
for Miami residents.
However, even if the economy continues to perform at current levels, it will take another two decades to close the rent -to -
income ratio with the rest of the country.
Concessions have been steadily increasing over the past year, especially in areas with high levels of construction such as
Downtown Miami. This situation, together with decelerating rent growth, will persist and get worse over the next three
years as more supply hits the market.
The forecast calls for rent growth of 1.8% over the next year. This marks another year of rent growth deceleration for the
Miami apartment market. The longer term horizon forecast is grimmer, calling for a 0.5% rent growth by 2020, when much
of the current under- construction product delivers.
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Rent
Miami Multi -Family
DAILY ASKING RENT PER SF
$1.90
$1.85
$1.80
$1.75
$1.70
$1_65-1 1 1 1 1
2015
MARKET RENT PER UNIT & RENT GROWTH
2016
Rent Per Unit
$1,700
$1,600
$1,500
$1,400
$1,300
$1,200
$1,100
1 1 1 l L I 1 1 1 Ji -1 1 1 I.1 1 1- 1.1 1 I` 1 I_!. 11 1 1
2017
• Miami
2018
2019
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
6%
• Market Rent Growth Y/Y • Market Rent Per Unit • Effective Rent Per Unit United States Market Rent
Per Unit
Ienuuy
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Rent
Miami Multi -Family
MARKET RENT PER UNIT BY BEDROOM
$2,400
$2,200
$2,000
$1,800
$1,600
$1,400
$1.200
$1,000
-I
1.
2014
4 & 5 STAR EXPENSES PER SF (ANNUAL)
2015
2016
2017
g Studio • 1 Bed • 2 Bed 3 Bed
2018
2019
Market / Cluster
Miami
Operating Expenses
Capital Expenditures
Mgmt. Admin. Payroll Water Utilities Maint. Insurance Taxes Appliance Structural Other Total
$0.79 $ $ $ $ $ $ $ $ $ $
0.62
0.66
0.43
0.83
0.86
0.88
2.18
0.10
0.22
0.85
Aventura
$0.63
$0.64 $0.61
$0.42
$0.66
$0.82 $1.00
$1.58
$0.10
$0.22
$0.E
Coral Gables
$0.70
$0.52
$0.55
$0.43
$0.81
$0.80
$0.79
$1.94
$0.10
$0.19
$0.E
Downtown Miami
$1.00
$0.46
$0.67
$0.41
$0.89
$0.24
$0.80
$2.81
$0.10
$0.22
$0.E
Hialeah/Miami Lakes
$0.79
$0.53
$0.70
$0.44
$0.88
$0.82
$0.87
$2.22
$0.10
$0.22
$0.E
Homestead/South D...
$0.79
$0.86
$0.70
$0.44
$0.88
$1.78
$0.87
$2.22
$0.10
$0.22
$0.E
Kendall
$0.79
$0.99
$0.70
$0.44
$0.88
$1.66
$0.87
$2.22
$0.10
$0.22
$0.E
Little Havana
$0.71
$0.60
$0.62
$0.42
$0.71
$0.69
$0.96
$1.85
$0.10
$0.22
$0.E
Miami Gardens/Opa...
$0.63
$0.64
$0.61
$0.42
$0.66
$0.82
$1.00
$1.58
$0.10
$0.22
$0.E
Miami Springs/Doral
$0.76
$0.55
$0.68
$0.44
$0.83
$0.82
$0.90
$2.09
$0.10
$0.22
$0.E
North Beach
$0.79
$0.53
$0.70
$0.44
$0.88
$0.82
$0.87
$2.22
$0.10
$0.22
$0.E
North Miami Beach
$0.63
$0.64
$0.61
$0.42
$0.66
$0.82
$1.00
$1.58
$0.10
$0.22
$0.E
South Beach
$0.79
$0.53
$0.70
$0.44
$0.88
$0.82
$0.87
$2.22
$0.10
$0.22
$0.E
Expenses are estimated using NCREIF, IREM, and CoStar data using the narrowest poss'ble geographical definition from Zip Code to region.
5
3
5
5
5
5 $9.72
5 $7.73
5 $7.53
5 $8.24
5 $8.42
5 $7.53
5 $8.42
$8.42
$7.53
$7.66
$8.45
$8.42
$9.71
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Rent
Miami Multi -Family
3 STAR EXPENSES PER SF (ANNUAL)
Market / Cluster
Mgmt.
Miami
$0.54
$0.58
$0.33
$0.40
$0.66
$0.82
$0.65
$1.46
$0.09
$0.15
$0.7
Aventura
$0.60
$0.63
$0.49
$0.42
$0.64
$0.80
$0.87
$1.55
$0.10
$0.19
$0.E
Coconut Grove
$0.55
$0.51
$0.32
$0.42
$0.71
$0.77
$0.68
$1.52
$0.09
$0.15
$0.E
Coral Gables
$0.55
$0.51
$0.32
$0.42
$0.71
$0.77
$0.68
$1.52
$0.09
$0.15
$0.E
Downtown Miami
$0.54
$0.44
$0.32
$0.38
$0.71
$0.23
$0.65
$1.51
$0.09
$0.14
$0.7
Hialeah/Miami Lakes
$0.54
$0.50
$0.32
$0.42
$0.70
$0.77
$0.65
$1.50
$0.09
$0.14
$0.7
Homestead/South D...
$0.48
$0.82
$0.33
$0.37
$0.57
$1.70
$0.59
$1.06
$0.09
$0.15
$0.E
Kendall
$0.52
$0.95
$0.32
$0.31
$0.52
$1.60
$0.64
$1.25
$0.09
$0.15
$0.E
Little Havana
$0.55
$0.48
$0.32
$0.39
$0.69
$0.36
$0.68
$1.52
$0.09
$0.15
$0.E
Miami Gardens/Opa...
$0.55
$0.59
$0.32
$0.42
$0.64
$0.75
$0.68
$1.52
$0.09
$0.15
$0.E
Miami Springs/Doral
$0.55
$0.52
$0.34
$0.42
$0.70
$0.77
$0.65
$1.53
$0.09
$0.14
$0.7
Mid -Beach
$0.52
$0.50
$0.32
$0.42
$0.70
$0.77
$0.62
$1.47
$0.09
$0.13
$0.7
North Beach
$0.53
$0.50
$0.32
$0.42
$0.70
$0.77
$0.64
$1.49
$0.09
$0.14
$0.7
North Miami Beach
$0.55
$0.61
$0.32
$0.42
$0.62
$0.76
$0.67
$1.52
$0.09
$0.15
$0.E
Outlying Miami -Dad...
$0.47
$0.82
$0.32
$0.37
$0.56
$1.70
$0.58
$1.03
$0.09
$0.15
$0.E
South Beach
$0.53
$0.50
$0.32
$0.42
$0.70
$0.77
$0.63
$1.48
$0.09
$0.14
$0.7
Westchester/Tamiami
$0.55
$0.51
$0.32
$0.42
$0.71
$0.77
$0.68
$1.52
$0.09
$0.15
$0.E
Expenses are estimated using NCREIF, IREM, and CoStar data using the narrowest possible geographical definition from Zip Code to region.
1 & 2 STAR EXPENSES PER SF (ANNUAL)
I Capital Expenditures
Operating Expenses
Admin, Payroll Water Utilities Maint. Insurance Taxes Appliance Structural Other Total
9
3
1
1
8
8
1
1
1
1
8
5
7
0
1
7
1
$6.47
$7.12
$6.53
$6.53
$5.79
$6.41
$6.97
$7.16
$6.04
$6.52
$6.49
$6.29
$6.37
$6.51
$6.90
$6.35
$6.53
Market / Cluster
Mgmt.
Operating Expenses
Admin. Payroll Water Utilities Maint. Insurance Taxes Appliance Structural Other Total
Capital Expenditures
Miami
$0.44
$0.51
$0.31
$0.39
$0.64 $0.70
$0.43
$1.30
$0.07
$0.08
$0.,
Aventura
$0.44
$0.60
$0.31
$0.40
$0.59
$0.74
$0.43
$1.33
$0.07
$0.08
$0.°
Coconut Grove
$0.44
$0.48
$0.31
$0.40
$0.67
$0.73
$0.43
$1.33
$0.07
$0.08
$0.,
Coral Gables
$0.44
$0.48
$0.31
$0.40
$0.67
$0.74
$0.43
$1.33
$0.07
$0.08
$0.°
Downtown Miami
$0.44
$0.42
$0.31
$0.37
$0.67
$0.22
$0.43
$1.33
$0.07
$0.08
$0.°
Hialeah/Miami Lakes
$0.44
$0.48
$0.31
$0.40
$0.67
$0.74
$0.43
$1.33
$0.07
$0.08
$0.°
Homestead/South D...
$0.44
$0.60
$0.31
$0.35
$0.53
$1.04
$0.43
$0.98
$0.07
$0.08
$0.°
Kendall
$0.45
$0.62
$0.31
$0.31
$0.52
$1.04
$0.45
$1.20
$0.07
$0.09
$0.E
Little Havana
$0.44
$0.43
$0.31
$0.37
$0.66
$0.26
$0.43
$1.33
$0.07
$0.08
$0.°
Miami Gardens/Opa...
$0.44
$0.59
$0.31
$0.40
$0.60
$0.73
$0.44
$1.33
$0.07
$0.08
$0.°
Miami Springs/Doral
$0.45
$0.49
$0.31
$0.40
$0.67
$0.72
$0.46
$1.35
$0.07
$0.09
$0.E
Mid -Beach
$0.44
$0.48
$0.31
$0.40
$0.67
$0.74
$0.43
$1.33
$0.07
$0.08
$0.°
North Beach
$0.44
$0.48
$0.31
$0.40
$0.67
$0.74
$0.43
$1.33
$0.07
$0.08
$0.°
North Miami Beach
$0.44
$0.60
$0.31
$0.40
$0.59
$0.73
$0.43
$1.33
$0.07
$0.08
$0.°
South Beach
$0.44
$0.48
$0.31
$0.40
$0.67
$0.74
$0.43
$1.33
$0.07
$0.08
$0.°
Westchester/Tamiami
$0.44
$0.50
$0.31
$0.38
$0.64
$0.78
$0.43
$1.30
$0.07
$0.08
$0.°
Expenses are estimated using NCREIF, IREM, and CoStar data using the narrowest possble geographical definition from Zip Code to region.
8
7
7
7
7
7
7
0
7
8
0
7
7
7
7
7
$5.45
$5.56
$5.51
$5.52
$4.91
$5.52
$5.40
$5.66
$4.95
$5.57
$5.61
$5.52
$5.52
$5.55
$5.52
$5.50
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Construction
Miami Multi -Family
The current level of apartment construction is the highest in the metro's history. There are currently close to 100 apartment
projects under construction and 250 proposed projects in Miami.
The total amount of apartments currently under construction is at 15,000 units, marking a 10% rise in the metro's inventory.
This is one of the strongest construction pipelines in the country, relative to inventory.
The bulk of the construction is concentrated in a handful of Miami's submarkets. The Greater Downtown Miami, Coral
Gables, and Miami Springs/Doral submarkets account for two thirds of the construction activity.
The Greater Downtown Miami area is the epicenter of the metro's apartment construction activity. This submarket is
looking at a 30% rise in its existing inventory, with 5,600 apartments in the works. The Greater Downtown Miami
submarket, including Midtown and the Wynwood, is popular with both younger high- earning professionals and foreign
investors. Almost all of the development activity is this area involves higher -end product.
The Coral Gables Submarket, located Southwest of Downtown Miami, is looking at a 25% increase in its inventory, with
close to 2,000 apartments in the works. This is an area that is entirely driven by domestic demand and has income levels
that are close to the metro's average.
The Miami Springs/Doral Submarket, located Northwest of Downtown Miami, is looking at a 12.5% inventory increase,
with 2,200 apartments in the works. This is also an area that is driven by domestic demand, and income levels are below
the metro average. Two projects that are representative of Downtown Miami's transformation are Park Line and Luma.
They will deliver a combined 1,250 apartments to this area.
Park Line Miami, located in Downtown Miami, is the largest under -construction project in the metro. It is comprised of
two residential towers and is scheduled to deliver 816 units in late 2019. MiamiCentral is a major transit oriented mixed -
use project. A big part of the project, including the train station and the office component, delivered in 2018. The Park
Line towers sit directly over the Virgin MiamiCentral train station, home to Brightline, a fast train service that connects
the central business districts of South Florida's three counties.
Luma is part of Miami Worldcenter, another major mixed- use development. It will deliver 434 units in 2021.
Another residential tower, Caoba, is also part of the Miami Worldcenter development. It delivered 444 apartments in late
2018.
Miami Worldcenter is located in the heart of Downtown Miami. Parts of it are currently under construction. Once
completed, it will comprise six buildings that will take six full city blocks. In addition to the two residential towers, Luma
and Caoba, the development also includes a 45- story, 600,000 SF office tower that will break ground later in 2019. It also
includes an open air retail development, an 1,800 room Marriot Marquis hotel, and a full-sized convention center.
Current construction starts point to the Miami metro supply pipeline remaining heavy for at least two more years. The
current two year delivery cycle should peak in 20Q1. The peak will likely be close to four times higher than the pre -credit
crisis peak and 30% higher than the most recent peak reached in 17Q1.
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Construction
Miami Multi -Family
DELIVERIES & DEMOLITIONS
Deliveries In Units
5,000
4,000
3,000
2,000
1,000
0
Forecast
-1,000'' L 4
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
in Deliveries • Demolished • Net Deliveries
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8/23/2019
Page 38
Under Construction Properties
Properties
Units
Percent of Inventory
Miami Multi -Family
Avg. No. Units
65 15,746 10.2% 242
UNDER CONSTRUCTION PROPERTIES
UNDER CONSTRUCTION
Property Name/Address
1
2
3
4
Park Line Miami
600 NW 1st Ave
Miami River Walk
1001 NW 7th St
Chiquita North
3000 NE 2nd Ave
Lantower River Landing
1400 NW North River Dr
Rating
* * * * *
Units Stories Start Complete
816 24 Oct-2017 Oct-2019
698 8 May-2019 Jan-2021
511 14 May-2018 Jan-2020
507 5 Jul-2017 Jan-2020
5
Legion Park
6445 NE 7th Ave
6 1 The Line
8704 SW 72nd St
Gio Midtown
3101 NE 1st Ave
* * * * *
500 - Sep-2018 Sep-2019
*****
449 22 Jun-2019 Jun-2021
*****
447 32 Sep-2017 Dec-2019
Developer/Owner
Florida East Coast Industries, Inc.
Flagler Real Estate Services, LLC
Mast Capital
Mast Capital
AMLI Residential Properties, LP
AMLI Management Company
UrbanX Group
Hellinger Penabad Companies
Global City Development
American Legion Post 29
Rilea Group, LLC
Dadeland Apartments LLC
Magellan Development Group, Ltd.
Magellan Development Group, Ltd.
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Page 39
Under Construction Properties
UNDER CONSTRUCTION
Miami Multi -Family
Property Name/Address
8
9
10
11
12
Palmera
8560 NW 102th Ave
Miami Plaza
1502 NE Miami PI
Gables Station
251 S Dixie Hwy
LUMA
150 SW 7th St
Modera Metro Dadeland...
8215 SW 72nd Ave
13 1
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
Seventh Street Apartme...
697 N Miami Ave
Mareas at Botanica
15520 SW 127th Ave
Midtown 7
3001 NE 1st Ave
The Elan at Downtown D.
8500 NW 41 st St
6600 Main
6600 Main St
Avalon Dora!
7905 NW 36th St
Soleste Twenty2
2201 Ludlam Rd
Soleste Blue Lagoon
5375 NW 7th St
The Wave
659-737 Alton Rd
Soleste Alameda
6290-6320 SW 8th St
Grand Station
240 N Miami Ave
Modera Biscayne Bay
411 NE21stSt
Maizon at Brickell
221 SW 12th St
Capri Tower
13899 Biscayne Blvd
Wynwood Square
2201 N Miami Ave
16975 NW 97th Ave
Rating
* * * * *
* * * * *
*****
* * * * *
* * * *
* * *
* * * * *
*****
* * * *
* * * * *
* * * * *
* * * * *
*****
*****
*****
*****
* * * *
* * * *
* * * * *
* * * *
Units
440
435
434
434
422
413
408
391
385
361
350
338
330
321
306
300
296
262
259
257
245
Stories Start Complete Developer/Owner
35
13
44
25
40
1
3
8
50
33
28
19
16
12
Mar-2018
Feb-2019
Jun-2018
Apr-2019
Dec-2017
Aug-2018
Mar-2019
Aug-2018
Sep-2018
Aug-2017
Jun-2018
Jun-2018
Jan-2018
Mar-2017
Nov-2018
Jul-2019
Jul-2019
Jun-2017
Aug-2019
May-2019
Oct-2018
Sep-2019
May-2020
Jul-2020
Feb-2022
Oct-2019
Jun-2020
Jun-2020
Feb-2020
Sep-2019
Oct-2019
Apr-2020
Oct-2019
Sep-2019
Nov-2019
Jan-2020
Jul-2020
Jul-2020
Sep-2019
Dec-2020
May-2020
Dec-2019
Lennar Multi -family Investors LLC
Lennar
Melo Group
Melo Group
NP International
NP International
ZOM Living
Zom Holding Inc
Mill Creek Residential Trust LLC
Mill Creek Residential Trust LLC
Falcone Group
Falcone Group
Ram Realty
Magellan Development Group, Ltd.
Magellan Development Group, Ltd.
G reysta r
The Graham Companies
The Graham Companies
Trammell Crow Residential Comp...
AvalonBay Communities, Inc.
Estate Investments Group
Estate Investments Group
Estate Investments Group
Estate Investments Group
Crescent Heights
Crescent Heights
Estate Investments Group
Ro Ma Holdings No 2 LIc
Grand Station Partners
City Of Miami
Mill Creek Residential Trust LLC
Mill Creek Residential Trust LLC
ZRS Management
ZRS Management
Blue B Properties LLC
Blue B Properties LLC
One Real Estate Investment
CIM Group LP
FCI Residential Corporation
FCI Residential Corporation
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Sales
Miami Multi -Family
Deal volume over the past year totaled $911,100,000. While it remains at a healthy level, it has declined by 50% from the
prior year and 35% from the five-year annual average. Miami sales volume over the past year was the lowest out of South
Florida's three counties. Broward and Palm Beach, despite being smaller markets than Miami, saw sales volume of $910
million and $1.6 billion, respectively.
Market rent growth has decelerated, and vacancy rates crept up over the past year, causing buyers to become much more
selective. They went after deals in submarkets that offer above -average rent growth and not much construction activity.
Over the past couple of quarters, deal volume was more pronounced in lower income areas offering good next cycle
development potential. Luxury asset sales dropped off notably over the same period. Many of these assets traded earlier in
the cycle, and investors are wary of the heavy supply, which is heavily weighted toward higher quality product, on the
way. While sales volume has declined, prices continue to rise. Overall metro prices per unit are currently at $210,000,
marking a rise of 2% over the past year. This rounds up a 40% rise over the past five years. Appreciating prices continue to
push cap rates to historic lows. Current cap rates are hovering around the 5.5% mark, remaining flat from the same time
last year.
The largest transaction of 2019 was the portfolio sale of two properties in Doral, Doral View and Town Fontainebleau
Lakes. The seller, a venture between The Related Companies and Rockpoint Group LLC, sold two apartment communities
totaling 720 units to The Blackstone Group L.P. for $210 million, or $290,000/unit. The median household income within
a mile radius from the properties is $47,000, 15% below the Miami average.
Private investors make up two-thirds of the activity, and they were mainly buyers over the past year, increasing their
exposure by close to 10%. Institutional and private equity investors were net sellers, reducing their combined exposure by
20%. REITs were net buyers, increasing their exposure to the market by 10%. The forecast is calling for prices to rise by
2% over the next year and for cap rates to remain flat over the same period.
SALES VOLUME & MARKET SALE PRICE PER UNTT
Market Sale Price/Unit
$240,000
$220,000
$200,000
$180 000
$160,000
$140.000
$120,000
$100.000
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
• Sales Volume • Miami Price Unit • United States Price/Unit
$700
$600
$500
$400
$300
$200
$100
$o
suoI1911 u! 3uJnoA sales
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Page 41
Sales Past 12 Months
Sale Comparables Avg. Price/Unit (thous.)
Miami Multi -Family
Average Price (mil.) Average Vacancy at Sale
399 $175 $3.1 5.4%
SALE COMPARABLE LOCATIONS
ral'f ' b e hy/ lV.ilrr
Ylflr4P'f IO.'R+�'E &R.d
SALE COMPARABLES SUMMARY STATISTICS
Sales Attributes
Sale Price
Price Per Unit
Cap Rate
Vacancy Rate at Sale
Time Since Sale in Months
Property Attributes
Low
$140,000
$5,979
1.9%
0%
0.3
Low
Average
$3,070,777
$174,870
6.1%
5.4%
6.6
Average
Median
$910,000
$128,641
5.7%
0%
6.5
Median
High
$104,375,000
$862,500
16.8%
54.5%
12.0
High
Property Size in Units
1
18
8
550
Number of Floors
1
1
2
22
Average Unit SF
0
465
534
2,468
Year Built
1922
1958
1957
2018
Star Rating
* * * *
*
*****2.2
*****
*****
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Sales Past 12 Months
Miami Multi -Family
RECENT SIGNIFICANT SALES
Property Name/Address
O
9
9
9
9
9
9
9
Doral View
901 NW 97th Ave
Town Fontainebleau Lakes
1062 NW 87th
Altis at Bonterra
3545 W 98th St
Latitudes at the Moors
6200 NW 173rd St
Pier 19
1951 NW South River Dr
Green Briar West
9615 SW 24th St
Modera Skylar
1444 NW 14th Ave
Parc Place Apartments
17600 NW 5th Ave
New Castle Lake
1401 NW 103rd St
Summer Grove Apartments
10331 SW 24th St
143 SW 9th St
Prestige Biscayne
12501-12525 NE 13th Ave
Red Road Apartments
501 NW 57th Ave
St. George Apartments
5200 NW 26th Ave
Oleander House Apartments
406 NW 22nd Ave
Rio y Mar Apartments
419-439 NW 8th St
Waterview Apartments
7745 Harding Ave
Aurora Apartments
900 SW 7th St
6905 Rue Vendome
6905-6921 Rue Vendome
Green Tree Apartments
1755 NE 164th St
Rating
.*.*.**,* 2013
****
* * * * *
* * * * *
* * * * *
*****
* * * * *
*****
* * * * *
* *
*****
*****
*****
.**.,**.*
*****
*****
* * * * *
*****
*****
Property Information
Yr Built Units
360
2016 360
2018 314
1989 358
2011 199
1971 332
2014 167
1972 234
1964 239
1973 116
1968 39
1969 91
1965 54
1958 84
2007 42
1949 72
1958 26
2015 21
1958 30
1971 32
Vacancy Sale Date
Sale Information
Price
Price/Unit Price/SF
4.2% 5/21/2019 $104,375,000 $289,930 $244
5.6%
4.1%
5.6%
10.6%
0%
9.7%
4.3%
0.8%
1.7%
5.1%
26.4%
5.6%
6.0%
2.4%
3.3%
3.9%
0%
6.7%
0%
5/21/2019
8/15/2019
8/31/2018
9/12/2018
7/30/2019
11/13/2018
10/19/2018
4/12/2019
8/1/2019
9/20/2018
6/3/2019
4/26/2019
7/31/2019
12/14/2018
5/9/2019
7/3/2019
3/15/2019
12/5/2018
4/1/2019
$104,375,000
$90,000,000
$71,300,000
$56,000,000
$55,000,000
$47,450,000
$33,400,000
$23,311,000
$22,450,000
$14,500,000
$10,035,000
$7,830,000
$7,560,000
$7,481,514
$5,830,000
$5,677,011
$5,500,000
$5,250,000
$4,900,000
$289,930
$286,624
$199,162
$281,407
$165,662
$284,131
$142,735
$97,535
$193,534
$371,794
$110,274
$145,000
$90,000
$178,131
$80,972
$218,346
$261,904
$175,000
$153,125
$238
$225
$233
$135
$193
$281
$175
$108
$211
$511
$88
$170
$150
$105
$210
$378
$127
$208
$184
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Economy
Miami Multi -Family
Miami -Dade is Florida's most populous county and also has the state's biggest economy. It has experienced favorable
demographic and economic conditions over the past five years. Local economic, job, and demographic growth outpaced
those of the U.S. across the board. The county's population has grown by more than 11% over the past decade, and it
currently stands at 2,800,000. Miami's population growth over the past decade has been entirely driven by international
immigration. Domestic migration has been negative, with one domestic migrant leaving Miami for every two international
immigrants arriving in the metro. Miami has the highest natural increase rate for the period among South Florida Counties
at close to 3%.
Because of the reliance on international arrivals, Miami's County's population growth is at risk if any shifts in the current
U.S. immigration policy occur. Miami's 1,200,000 person strong labor market is heavily weighted towards services, with
just over 80% of the county's labor force in private service provision. Trade and transportation is by far the largest sector,
with a quarter of the county's jobs. Business services and healthcare and education comprise 15% and 16% of the labor
force respectively.
The county's labor market grew by 12% over the past five years. The current unemployment rate for Miami is at 3%, more
than a percent below the same time last year. Household income is one of the weakest links in Miami's economy. The
region's median household income currently stands close to $53,000. This is the lowest out of South Florida's three counties
and close to 20% below the average for the country.
Miami's household income growth, though, is faster than the U.S. average. Incomes here have grown by close to 30% over
the past five years and are forecast to increase by a further 25% over the next five years. However, with all other things
being equal, it would take two more decades for Miami to catch up to the rest of the U.S. Strong population growth drove
Miami's healthy household formation numbers. Households grew by close to 5%, the fastest growth rate out of the South
Florida tri-county area over the past five years. This growth was also 1% above the average for the country.
Much of what drove Miami's economy a decade ago came from links to Latin America. However, strong demographic
growth, driven by international migration and favorable economic conditions, has shifted Miami's economic engine
towards domestic growth.
The challenge that Miami currently faces is to continue attracting investors, employers, and higher paying jobs to the area.
So far, the city has shied away from offering economic incentives to companies relocating to Miami. This has put Miami
at a disadvantage when competing with other cities in the Southeast.
Attracting more high paid jobs to the area will help not only increase the size of the region's economy but also bridge its
residents' income inequality gap. This is sorely needed and will be key in supporting commercial real estate growth
prospects. More diverse and larger employers will improve Miami's economic base as well as help accelerate household
income growth.
The forecast calls for continued population growth for Miami -Dade County in the region of 1% per year over the next
couple of years. This just below historical average population growth rates, and it accounts for a possible slowdown in
international migration.
Miami -Dade County's labor market is also forecast to grow at close to 3% over the next five years. This is four times lower
than the growth the market experienced over the past five years. The decline in job growth does not necessarily spell bad
economic news: It is more a reflection of the current labor market tight conditions as well as an increasingly aging
population base.
Fueled by population growth, household formation is forecast to remain strong over the next five years and match the 5%
growth rate of the prior five-year period.
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Page 44
Economy
MIAMI EMPLOYMENT BY INDUSTRY IN THOUSANDS
Miami Multi -Family
NAICS Industry
Current Jobs
Jobs
LQ
Current Growth
Market
US
10 Yr Historical
Market
US
5 Yr Forecast
Market
US
Manufacturing
41
0.4
-1.19%
1.30%
1.02%
0.93%
-0.66%
0.57%
-0.02%
Trade, Transportation and Utilities
304
1.3
1.62%
0.91%
2.09%
1.19%
0.46%
Retail Trade
149
1.2
-0.17%
-0.06%
2.25%
0.87%
0.63%
0.37%
Financial Activities
82
1.2
0.28%
0.95%
2.03%
1.03%
0.55%
0.34%
Government
141
0.8
0.87%
0.45%
-0.67%
0.01%
0.56%
0.76%
Natural Resources, Mining and Construction
55
0.8
3.43%
2.96%
3.81%
2.24%
0.96%
0.22%
Education and Health Services
193
1.0
3.18%
2.16%
2.19%
2.11%
0.35%
0.54%
Professional and Business Services
188
1.1
3.85%
2.23%
4.07%
2.67%
1.19%
0.96%
Information
20
0.9
0.42%
-0.81%
0.81%
0.06%
0.43%
0.56%
Leisure and Hospitality
148
1.1
1.83%
2.49%
3.53%
2.52%
0.50%
0.59%
Other Services
55
1.1
3.86%
1.30%
2.30%
1.00%
0.61%
0.28%
Total Employment
YEAR OVER YEAR JOB GROWTH
1.0
2.11%
4.0 %fl
3.5 %
3.0 %
2.5 %
2.0 %
1.5 %
1.0 %
0.5 %
1.53%
Forecast
2.18%
1.47%
0.60%
0.54%
Source: Oxford Economics
LQ = Location Quotient
2013 1 2014 2015 2016 2017 2016 2019 2020 2021 2022 2023
• Miami • United States
Source: Oxford Economics
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Page 45
Economy
DEMOGRAPHIC TRENDS
Miami Multi -Family
Demographic Category
Current Level
Metro U.S.
Current Change
Metro U.S.
10-Year Change
Metro U.S.
Forecast Change (5 Yrs)
Metro U.S.
Population j_
Households
2,783,125
882,200
329,306,688
121,263,141
0.8%
0.6%
1.2%
0.7%
1.0%
0.7%
0.6%
0.5%
1.0%
0.6%
0.9%
0.6%
Median Household Income
$53,305
$63,800
3.6%
3.3%
2.3%
2.3%
4.2%
4.4%
Labor Force
1,423,661
163,471,281
2.9%
1.0%
1.5%
0.6%
0.9%
0.6%
Unemployment
3.3%
3.6%
-0.4%
-0.3%
-0.8%
-0.6%
-
-
POPULATION GROWTH
1.5 I ...,
1.0 %
0.5%•
10-Year 1-Year Forecast
(5 Yrs)
LABOR FORCE GROWTH
1111
Forecast
(5 Yrs}
Source: Oxford Economics
INCOME GROWTH
6%
4 °la .. _.. ..
a �o
0 %.
10-Year 1-Year Forecast
(5 Yrs)
Source: Oxford Economics
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Page 46
Submarkets
Miami Multi -Family
MIAMI SUBMARKETS
East Coast
Francis Buffer Water
S. Taylor Preserve Area
Wildlife...
Home
Flari r
Southern 0
Glades
rgiade
real P€
Googie
North Key
Largo
}
Key Largo
Key,[, -ayne
Biscay
National ark
la
eacl
eacl
Map data 0291g Google
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Submarkets
Miami Multi -Family
SUBMARKET INVENTORY
No. Submarket
Inventory
12 Month Deliveries
Bldgs Units % Market Rank Bldgs Units Percent Rank
1A01 13
CIOL
Under Construction
Bldgs Units Percent Rank
I
f1VCI ILUI4
IV
L, IYV
0
V
V 0
- V
V
V/0
-
2
Coconut Grove
106
1,781
1.2%
14
1
10
0.6%
11
2
153
8.6%
12
3
Coral Gables
319
7,283
4.7%
11
0
0
0%
-
8
1,854
25.5%
3
4
Downtown Miami
512
20,844
13.5%
®
8
3,660
17.6%
®
18
5,518
26.5%
5
Hialeah/Miami Lakes
704
18,439
12.0%
2
1
39
0.2%
8
5
802
4.3%
8
6
Homestead/South Dade
183
8,449
5.5%
8
4
742
8.8%
4
6
1,050
12.4%
4
7
Kendall
84
14,074
9.1%
6
1
294
2.1%
6
3
1,046
7.4%
5
8
Little Havana
1,273
13,989
9.1%
7
3
423
3.0%
5
5
872
6.2%
7
9
Miami Gardens/Opa-Locka
495
14,770
9.6%
5
2
34
0.2%
9
4
970
6.6%
6
10
Miami Springs/Doral
334
17,078
11.1%
3
3
753
4.4%
2
9
2,143
12.5%
2
11
Mid -Beach
44
783
0.5%
15
0
0
0%
-
0
0
0%
-
12
North Beach
470
7,303
4.7%
10
1
6
0.1%
12
1
5
0.1%
13
13
North Miami Beach
742
16,577
10.8%
4
2
746
4.5%
3
3
781
4.7%
9
14
Outlying Miami -Dade Co...
2
530
0.3%
16
1
130
24.5%
7
2
490
92.5%
10
15
South Beach
369
7,365
4.8%
9
(2)
19
0.3%
10
1
321
4.4%
11
16
Westchester/Tamiami
38
2,617
1.7%
12
0
0
0%
-
0
0
0%
-
SUBMARKET RENT
No. Submarket
Asking Rents
Per Unit
Effective Rents
Per SF Rank Yr. Growth Per Unit Per SF Rank
Yr. Growth Concession Rank
15
I
PIVCI ILUIG sp 1,J 1 J 4)1.04 V 4.1 70 %p1,UVJ
yI .VJ V L..7%0 V.470
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Page 48
Submarkets
Miami Multi -Family
SUBMARKET VACANCY & ABSORPTION
No. Submarket
Units
Vacancy
Percent
Rank
Units
12 Month Absorption
% of Inv Rank Construct. Ratio
l
HVeniura
148
15.70
14
lU
U.470
l3
-
1.0
2
Coconut Grove
116
6.5%
11
10
0.5%
12
3
Coral Gables
485
6.7%
13
175
2.4%
8
-
4
Downtown Miami
2,402
11.5%
16
3,180
15.3%
0.9
5
Hialeah/Miami Lakes
431
2.3%
(29)
-0.2%
16
-
6
Homestead/South Dade
729
8.6%
15
351
4.1%
5
2.1
7
Kendall
797
5.7%
10
314
2.2%
6
0.9
8
Little Havana
422
3.0%
4
412
2.9%
4
1.0
9
Miami Gardens/Opa-Locka
466
3.2%
5
280
1.9%
7
0.1
10
Miami Springs/Doral
1,126
6.6%
12
540
3.2%
3
1.4
11
Mid -Beach
23
2.9%
3
0
0%
-
-
12
North Beach
288
3.9%
7
12
0.2%
11
0.5
13
North Miami Beach
930
5.6%
9
651
3.9%
2
1.1
14
Outlying Miami -Dade Co...
20
3.8%
6
151
28.5%
9
-
15
South Beach
336
4.6%
8
3
0%
14
-
19-PIP MERIDIAN APPRAISAL GROUP, INC. 49
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APARTMENT SUBMARKET OVERVIEW MAP
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Andover
Mimi-Obo
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Airport
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Hialeah
Miarni Sp.! ,w
Miami
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19-PIP MERIDIAN APPRAISAL GROUP, INC. 50
Overview
12 Mo. Delivered Units 12 Mo. Absorption Units
Miami Gardens/Opa-Locka Multi -Family
Vacancy Rate
12 Mo. Asking Rent Growth
31 271 3.2% 4.1%
Apartment rents in the Miami Gardens/Opa-Locka submarket increased by 4.1% year -over -year, and have posted an
average annual gain of 4.4% over the past three years.
Vacancies were below the five-year cycle average of 4.6%, they currently register at 3.2%, declining by 2% over the past
four quarters.
There are about 970 units currently underway, representing a close to 10% expansion of the existing inventory. Over the
past three years, 1,200 units have delivered, or a cumulative inventory expansion of 8%.
Sales activity was very strong over the past four quarters, registering at $133,700,000, prolonging a multi -year stretch of
good investment. The average annual sales volume over the past five years has been $80 million.
Over the past year, employment gains were essentially in line with the five-year average. Total employment increased by
2.4%, or about 28,700 jobs. Over the past five years, employment has increased by 2.6% annually on average, compared
to a 1.7% average increase nationally.
KEY INDICATORS
Current Quarter
Units Vacancy Rate Asking Rent Effective Rent
Absorption
Units
Delivered Units
Under Constr
Units
4 & 5 Star 1,310 5.3% $1,705 $1,618 10 0 862
3 Star 4,280 3.0% $1,434 $1,429 4 0 108
1 & 2 Star 9,180 2.9% $1,026 $1,021 (8) 0 0
Submarket 14,770 3.2% _ $1,261 $1,246 6 0 970
Annual Trends
...1117111
12 Month
Historicali
Forecast Peak When Trough When
Average III Average
Vacancy Change (YOY) -1.6% 6.2% 6.2% 10.3% 2011 Q2 3.1 % 2019 Q1
Absorption Units 271 102 137 795 2017 Q3 (554) 2011 Q2
i Delivered Units 31 118 227 768 2017 Q3 0 2015 Q3
Demolished Units 0 49 16 811 2012 Q1 0 2019 Q2
Asking Rent Growth (YOY) 1 4.1% 2.4% 1.5% 9.0% 2006 Q4 -3.9% 2008 Q4
Effective Rent Growth (YOY) 4.0% 2.4% 1.6% 9.0% 2006 Q4 -4.0% 2008 Q4
Sales Volume $130 M $47.3M N/A $155.8M 2017 Q2 $2.4M 2010 Q3
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Page 51
Vacancy
Miami Gardens/Opa-Locka Multi -Family
Fundamentals have recently recovered after a slowdown in new deliveries. The vacancy rate in this submarket is currently
at 5.3%, flat from the prior year.
The last major project was in early 2018, when the delivery of a new mid -rise, Modera Riverhouse delivered and brought
292 new units online. A steady wave of new deliveries through 2019 are expected to increase the vacancy rate, albeit it
should remain at or below the metro average. A large portion of demand in this area comes from blue collar workers
renting some of the cheapest units in the metro. Many of the people who make up the workforce in Miami proper live here
for its central location and low rents. The median household income is the lowest in the metro, and the submarket also has
the lowest percentage of people with bachelor's degrees, fewer than 10%, a percentage stagnant for the past five years.
ABSORPTION, NET DELIVERIES & VACANCY
Absorption & Net Delivered Units
1;000
800
600
400
200
0
- 200
- 400
10%
9%
3 %
_6001 1 1 i I t 1 I 9 1 J I I. l J. I 1 I 1 I I 1 1 t 11 1 l 1 I I 1 k I. 1 I. 1 i 1 [ Y 1 I� [ 2 0`O
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
■ Absorption ■ Net Deliveries ■ Vacancy Miami Vacancy
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Page 52
Vacancy
VACANCY RATE
Miami Gardens/Opa-Locka Multi -Family
40
35 %
30 To
25
20 %
15%
10 %
5%
Forecast
h
0°I°
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Miami Gardens/Opa-Locka 3 Miami Gardens/Opa-Locka 4-5 • Miami Gardens/Opa-Lacka
•
Star ▪ Star
VACANCY BY BEDROOM
Miami
30 %
0 % '
1 I J
2014
f
2015 2016
I
2017
Studio is 1 Bed ■ 2 Bed 3 Bed
2018
i
2019E
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Page 53
Rent
Miami Gardens/Opa-Locka Multi -Family
Asking rents in Miami Gardens/Opa-Locka are some of the lowest in Miami, at around $1,260/ month. While Miami
Gardens/Opa-Locka has a larger than average portion of 1 & 2 Star properties, the area's affordability is consistent across
all star ratings. This submarket has some of the most affordable 4 & 5 Star units in the metro, averaging less than
$1,600/month, compared to the metro's average of over $2,000/month.
Rent growth in Miami Gardens/Opa-Locka has been solid and exceeds the Miami metro average, at roughly 4.1%.
However, stagnant, below average income could stunt rent growth despite generally low vacancies.
DAILY ASKING RENT PER SF
$1.60
$1.55
$1-50
$1-45
$1.40
$1.35
$1.30
$1.25 1
I. 1. 1 l 1 L 1. 1 1 I
1 1 11 1. 1 1 1.... J..j 1 1 1. 1
„ecliw4%-wILF4'"
1 1 1 1 1 1 1 I 1 1 1 1 1 1 1 1 1 1 1 1 1
2015 2016 2017 2018 2019
Miami Gardens/Opa-Locka
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Page 54
Rent
MARKET RENT PER UNIT & RENT GROWTH
Rent Per Uni
$1,700
$1,600
$1,500
$1,400
$1,300
$1,200
$1,100
$1,000
$900
Miami Gardens/Opa-Locka Multi -Family
Forecast
7%
6%
5%
4%
3%
2 %
1%
0%
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
■ Market Rent Growth Y/Y • Market Rent Per Unit • Effective Rent Per Unit Miami Market Rent Per Unit
MARKET RENT PER UNIT BY BEDROOM
$1,800
$1,600
$1,400
$1,200
$1,000
$800
$600 '
II
I �
2014
I I
2015 2016
I I �
2017
a Studio • 1 Bed ■ 2 Bed 3 Bed
2018
2019
,0,10 luo8lerluuv
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Construction
Miami Gardens/Opa-Locka Multi -Family
Miami Gardens/Opa Locka has quickly become an active area for apartment construction. Close to 1,200 units have hit
the submarket since 2015, and another 970 units are under construction. The last major delivery was in the first quarter of
2018 when the submarket delivered a mid -rise building called Modera River House with 292 units. The project is in
Allapattah along the Miami River, near the Civic Center Metrorail stop. The River Landing project, one of the submarket's
largest proposed properties, finally broke ground in late 2017 after contending with some legal issues that delayed the
project. River landing will be a mixed -use property with over 500 apartments and 420,000 SF of retail, including an AMC
theater. It will be near Miami's Health district, and should bring housing and retail to an area where many hospital
employees work.
DELIVERIES & DEMOLITIONS
Deliveries In Units
800
700
600
500
400
300
200
100
0
Forecast
-100' 1 t if! t, 1 t t_ 1 E t 1 1, ! I tl! 1 1 I 1 1 1 1 1 t I I ti 1 1 f
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
• Deliveries • Demolished • Net Deliveries
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Construction
Ail -Time Annual Avg. Units Delivered Units Past 4 Qars
so
Miami Gardens/Opa-Locka Multi -Family
Delivered Units Next 4 Qtrs Proposed Units Next 4 Cars
PAST 4 QUARTERS DELIVERIES, UNDER CONSTRUCTION, & PROPOSED
970 900
cS§
NW :AIh St
Miramar
tO Couplry CSub
PaIm $prinnc
N6ri't
war ?ash sr Medley
Ooral
MN Alu it kW 364194-
Smretwa ter
l rnr.
Teat
Hialeah
0 I
jj��� ✓iSil
lam]
Mraml Spring;
&tank
In terns tl0 nal
A lrpaa
41
Pembroke ase
s UV"' Park park Hallandale
Beach
Golden Beach
rtsentura
Oius
cio
Nerirr IN lam
Brscnyne Park
t
Mani ShOreS
El Portal
Sunny
Isles Beach
N0IjI a rer Park
BnI Harbour
U
SurfSKle
Fr!)
Nerth Bay
Vi11ap9
Ccdne Is 4: rlcl
Compdc Yea Pesti Quarters • undcI COesNuc atoll Proposed Nell Quarters
t4
Miami Beach
PAST & FUTURE DELIVERIES IN UNITS
1,000
500
0
Forecast
1
1
IMF TOD
2017 2018 2019 2020
■ Historical Deliveries Completed Past 4 Quarters • Underway Now • Proposed All -Time Average
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Construction
Miami Gardens/Opa-Locka Multi -Family
RECENT DELIVERIES
Property Name/Address
1
2
2301 NW 24th Ave
Enclave at Amelia
231 W 79th PI
UNDER CONSTRUCTION
Rating
* *
*****
Units
24
22
Stories Start Complete Developer/Owner
3
Mar-2017
Mar-2017
Jun-2019
Jul-2018
Coinco Investment Co., Inc.
Jmt Family Holdings LIc
Property Name/Address
1
3
4
Lantower River Landing
1400 NW North River Dr
Northside Transit Village..
3100 NW 77th St
•
Las Vistas at Amelia
7925 W 2nd Ct
Sweet River Apartments
3623 NW 36th St
PROPOSED
Rating
* * * * *
*****
* * * * *
Units
507
180
175
Stories Start Complete Developer/Owner
5
8
3
****'
108
5
Jul-2017
Jun-2018
Aug-2018
Aug-2018
Jan-2020
Sep-2019
Sep-2019
Sep-2019
UrbanX Group
Hellinger Penabad Companies
Atlantic I Pacific Companies
Miami -Dade Public Housing & Co...
Prestige Builders Partners LLC
Prestige Builders Partners LLC
Oxford Partners
Oxford Partners
Property Name/Address
1 Center at Miami Gardens
19371 NW 27th Ave
2 1 Soleste Uptown
1033 Spring Garden Rd
3
4
5
6
1490 NW 20th St
Mosiac Apartments
13800 NW 22nd Ave
Villages of Miami Garde
3400 NW 191st St
3616 NW 20th Ave
7 2101 NW 36th St
Rating
Units
Stories Start
* * * * *
272
-
*****
250
11
*****
150
-
*****
104
4
s
*****
51
-
*****
43
5
*****
30
-
Sep-2019
Sep-2019
Aug-2019
Aug-2019
Sep-2019
Sep-2019
Aug-2019
Complete Developer/Owner
Sep-2020
Sep-2020
Aug-2020
Aug-2020
Sep-2020
Sep-2020
Aug-2020
The Latigo Group
The Latigo Group
Estate Investments Group
CFH Group
CFH Group
VRM Companies
VRM Companies
Y & T Management, Inc.
Y & T Management, Inc.
Phillip Sylvester
Phillip Sylvester
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Sales
Miami Gardens/Opa-Locka Multi -Family
Sales activity peaked in 2018, with sales volume and pricing reaching new highs. As prices continue to rise in Miami, many
investors seem to be looking to less expensive submarkets such as Miami Gardens/Opa-Locka for entry into the market.
Most of the investor interest has been driven by smaller, local buyers. Almost half of 2018 sales volume came from the sale
of the 167 unit Modera Skyler, which traded to Rockwood Capital for $47.5 million, or about $280,769/unit. Another
transaction occurred in October when the 234 unit Park Plaza Apartments sold for $33.4 million.
SALES VOLUME & MARKET SALE PRICE PER UNIT
Market Sale Price/Unit
$220,000
$200,000
$180,000
$160,000
$140,000
$120,000
$100,000
$80,000
Forecast
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
• Sales Volume • Miami Gardens/Opa-Locka Price/Unit
II Miami Price/Unit
$140
$120
$100
$80
$60
$40
$20
$0
sun!1114 ul $uanlOA sales
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Sales Past 12 Months
Sale Comparables
Avg. PriceJUnit (thous.)
Miami Gardens/Opa-Locka Multi -Family
Average Price (mil.)
66 $127 $2.6
SALE COMPARABLE LOCATIONS
Average Vacancy at Sale
3.5%
Rerj-anal Parc
:. NW rain sr
Miramar
ems;
Counley Grub
CI
Miami Lnrr-
n-yr Men 5r Medley
Borol
rrri41sr5r'ir
SweMwatar
ox
rontainebleara
0
Miami Springs
Miomi
International
Airport Q
Sale Comparabl es
Golden Beach
Aventom
OjuS
isles Beach
Honh Miam,
8sach Ole1a pryer
tiro. Scare Park
o
I
NOM) Mara
Biscayne Pork
Many Shores
El Purl al
CD
Haul over Park
• Berl Harbour
North Bay
Vrilope
Padge 16;
Surlarde
na•i
{rd.
air Miami Hearn
on
aj
Mrami Beach
SALE COMPARABLES SUMMARY STATISTICS
Sales Attributes
Sale Price
Price Per Unit
Cap Rate
Vacancy Rate at Sale
Time Since Sale in Months
Property Attributes
Property Size in Units
Number of Floors
Average Unit SF
Year Built
Star Rating
Low
$150,000
$12,500
4.5%
0%
1.0
Average
$2,649,971
$126,747
8.6%
3.5%
7.4
Low Average
2
1
0
1925
****;
21
2
437
1965
Median
$520,000
$85,625
7.4%
0%
7.6
Median
7
2
580
1960
* * * * *
High
$47,450,000
$470,000
16.8%
9.7%
12.0
High
239
20
1,055
2018
*****
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Page 60
Sales Past 12 Months
Miami Gardens/Opa-Locks Multi -Family
RECENT SIGNIFICANT SALES
Property Name/Address
v
9
0
9
9
9
9
9
Modera Skylar
1444 NW 14th Ave
Parc Place Apartments
17600 NW 5th Ave
New Castle Lake
1401 NW 103rd St
St. George Apartments
5200 NW 26th Ave
700 NW North River Dr
5101-5131 NW 24th Ave
7920-7945 NW 36th Ct
720 NW 61st St
745 NW 58th St
1033-1057 Spring Garden Rd
ALSO Includes 3475 NW 35t...
3525 NW 35th Ave
1530 NW 35th St
825 NW 70th St
2930 NW 22nd Ave
6820 NW 17th Ave
746 NW 61st St
1331 Sharazad Blvd, Opa Lo...
1301-1331 Sharazad Blvd
1867 NW 35th St
Liberty City - 12th St
6040 NW 12th Ave
1961 NW 24th Ct
Property Information
Rating Yr Built Units Vacancy Sale Date
,*.*.*** 2014 167
1972 234
1964 239
*****
* * * * *
*****
* * * * *
*****
* * * *
*****
*****
* * * * *
* * * * *
* * * * *
* * * *
7f' * *i * *
* * * * *
* * * * *
1958 84
1949 4
1953 16
1956 16
2007 22
1966 17
1956 11
1958 13
1974 10
1957 14
1984 6
1958 22
1960 12
1952 8
1972
6
1957
22
1925
6
Sale Information
Price
Price/Unit Price/SF
9.7% 11/13/2018 $47,450,000 $284,131 $281
4.3% 10/19/2018 $33,400,000 $142,735 $175
0.8% 4/12/2019 $23,311,000 $97,535 $108
6.0% 7/31/2019 $7,560,000
3/27/2019 $1,880,000
12/31/2018 $1,665,000
6/20/2019 $1,504,000
6/7/2019 $1,500,000
5/14/2019 $1,325,000
1/31/2019 $1,231,714
4/30/2019 $1,225,000
3/12/2019 $1,150,000
4/30/2019 $1,100,000
2/14/2019 $1,050,000
12/3/2018 $1,000,000
10/26/2018 $920,000
12/14/2018 $765,000
8/31/2018 $750,000
11/2/2018 $740,700
0%
6.3%
0%
4.6%
0%
4.6%
0%
0%
0%
0%
9.1%
0%
0%
0%
0%
0%
2/8/2019
$700,000
$90,000 $150
$470,000 $414
$104,062 $258
$94,000 $231
$68,181 $91
$77,941 $100
$111,974 $164
$94,230 $178
$115,000 $151
$78,571 $189
$175,000 $166
$45,454 $107
$76,666 $128
$95,625 $227
$125,000 $127
$33,668 $71
$116,666
$122
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APARTMENT MARKET OVERVIEW (CONT'D)
Planned and New Apartment Development
Florida Housing Finance Corporation
We have also considered the applications submitted to the Florida Housing Finance Corporation for funding.
While there have been many more applications submitted for funding, we have only reported the projects
approved for funding.
RFA #
Name of Development
Development Location Street
Address
Demographic
Commitment
Total
Units
New /
Ren
2017-107
Edison Gardens
Scattered Site 1: 5900 NW 6th Ave,
Miami, FL 33127; 651 NW 58' St,
Miami, FL 33127; On NW 60' St,
southwest of the intersection of NW
60' St and NW 6th Ave, Miami, FL
33127. Scattered Site 2: 670 NW 58'
St, Miami, FL 33127.
Family
2017-107
Ambar Key
NE 3rd Ave, SE of the intersection of
NE 3rd Ave and NE 4th St., Florida
City, FL; NE 3rd Ave, SE of the
intersection of NE 3rd Ave. and NE
2'Terr, Florida City, FL; and NE 3rd
Ave, SE of the intersection of NE 3'
Ave and NE 2' St, Florida City, FL.
Family
94
New
2017-108
Sierra Bay
South side of SW 214th St, southwest
of the intersection of SW 214th St and
SW 117" Ct, Miami -Dade County
Elderly
140
New
2017-108
Water's Edge
Apartments
Northwest Corner of SW 109" Ave
& SW 214' St, Miami -Dade County
Family
128
New
2017-108
Brisas del Rio
Apartments
Approx. 700' north of NW 7th St and
400' west of NW 13th Ave, Miami,
Florida
Elderly
167
New
2017-108
Citadelle Village
181 NE 82nd St Miami, FL 33138
Family
96
New
2017-108
Woodland Grove
NE corner of SW 268th Stand 142nd
Ave, Miami -Dade, FL 33032
Family
190
New
2017-108
Harbour Springs
NE corner of SW 267' St and 142nd
Ave, Miami -Dade, FL 33032
Family
190
New
2017-109
Sunset Pointe
1170 NW 79th St and adjacent land
approximately 150' southeast of the
intersection of NW 79th St and NW
12" Ave, Miami -Dade County
Family
136
New
2017-112
Residences at Dr. King
Boulevard
On NW 62nd St, at the intersection of
NW 62nd St and NW 15th Ave; on
NW 62nd St, approx. 170' west of the
intersection of NW 62' St and NW
15' Ave; on NW 15' Ave, at the
intersection of NW 62nd St and NW
15' Ave, Miami
Family
120
New
2017-112
Cordova Estates
321 East Davis Pkwy, Florida City,
FL 33034
Family
160
New
2017-112
Paradise Lakes
Apartments
SW 88' St, SW 88' St and SW 169'
Ct, Miami -Dade County
Family
76
New
2018-102
Father Marquess -Barry
Apartments
NW 3' Ave, NW 3' Ave and NW
17' St, Miami
Elderly
50
New
2018-104
Casa Juarez
On SW 193' Ave, northeast of the
intersection of SW 193rd Ave and SW
382nd Terr, Miami -Dade County, FL
Farmworker
32
New
2018-107
Platform 3750 at Frankie
Shannon Rolle Center
3750 South Dixie Hwy, Miami
Family
96
New
19-PIP MERIDIAN APPRAISAL GROUP, INC.
62
APARTMENT MARKET OVERVIEW (CONT'D)
RFA #
Name of Development
Development Location Street
Address
Demographic
Commitment
Total
Units
New /
Ren
2018-108
Northside Commons
8301 NW 27th Ave, Miami -Dade
County
Disability
80
New
2018-111
Lucida
15800 NW 77th Ct, Miami Lakes
Family
108
New
2018-111
Cannery Row at
Redlands Crossing
On the North side of SW 264th St,
approximately 200' west of the
intersection of SW 264th St and Old
Dixie Hwy, Miami -Dade County,
Elderly
112
New
FL
2018-111
Las Brisas Trace
On NW 55th St, northwest of the
intersection of NW 55th St and NW
27th Ave, unincorporated Miami-
Dade County; and on NW 54th St,
northeast of the intersection of NW
54th St and NW 25th Ave,
unincorporated Miami -Dade County
Elderly
119
New
2018-114
Brisas del Este Phase
Two
NW 18th Ave, intersection of NW
29th St and NW 18th Ave, Miami,
Florida
Family
120
New
2018-114
Liberty Square Phase
Three
1201 NW 65th St, Miami, Florida
33147
Family
192
New
2018-114
Solimar
NW 5th Ave, southeast of the
intersection of NW 5th Ave and NW
12th St, Florida City
Family
180
New
2018-116
Sunset Pointe II
1177 NW 76th St, Miami -Dade
Family
96
New
County
The projects were approved under the following RFA's.
RFA #
Description
2017-107
SAIL Financing for the Construction of Workforce Housing
2017-108
SAIL Financing of Affordable Multi -family Housing Developments to be used in conjunction with Tax-
Exempt Bonds and Non -Competitive Housing Credits
2017-109
Development Viability Loan Funding
2017-112
Housing Credit Financing for Affordable Housing Developments Located in Miami -Dade County
2018-102
Housing Credit Financing to Provide Affordable Multi -family Rental Housing that is a Part of Local
Revitalization Initiatives
2018-104
SAIL Financing to Preserve Farmworker and Commercial Fishing Worker Housing
2018-107
Housing Credit and SAIL Financing for Affordable Housing for Hurricane Recovery in Monroe County
2018-108
SAIL Financing of Affordable Multi -family Housing Developments to be used in conjunction with Tax-
Exempt Bonds and Non -Competitive Housing Credits
2018-111
Housing Credit Financing for Affordable Housing Developments Located in Miami -Dade County
2018-114
SAIL Financing for the Construction of Workforce Housing
2018-116
SAIL Financing of Affordable Multi -family Housing Developments to be Used in Conjunction with
Tax -Exempt Bonds and Non -Competitive Housing Credits
Conclusion
The apartment market within Miami -Dade County consists of a wide variety of unit types ranging from older
subsidized housing, older market rate projects, newer affordable projects and new luxury market rate projects.
The subject is located in the Miami Gardens/Opa-Locka submarket which is one of 16 submarkets in Miami -
Dade County. Vacancy rates in Miami -Dade County are slightly higher than the average of the past five years
due to the high number of recent completions, however, the Miami Gardens/Opa-Locka sub -market has added
a limited number of new units come on-line in the past year. Rental rates in the county and sub -market have
steadily increased over the past five years. The Miami Gardens/Opa-Locka submarket has the 5th largest
inventory in Miami -Dade County, the 9th highest number of deliveries in the past 12 months, the 5th most units
under construction, the 5t' lowest vacancy rates, the 7t' highest average absorption rate and the 15th highest (2'
19-PIP MERIDIAN APPRAISAL GROUP, INC. 63
APARTMENT MARKET OVERVIEW (CONT'D)
lowest) average rental rates. Overall, the Miami Gardens/Opa-Locka submarket is a secondary apartment
location in Miami -Dade County that is currently experiencing slow but positive growth.
19-PIP MERIDIAN APPRAISAL GROUP, INC. 64
NEIGHBORHOOD MAP
2
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19-PIP MERIDIAN APPRAISAL GROUP, INC.
65
NEIGHBORHOOD ANALYSIS
Introduction
A neighborhood is defined in terms of common characteristics, trends and groupings of similar or
complementary land uses. For the purposes of this report, we have considered the subject neighborhood to be
the area delineated by the following boundaries:
Northern Boundary
NW 103' Street (State Road 932)
Southern Boundary
Airport Expressway (State Road 112)
Western Boundary
NW 27' Avenue
Eastern Boundary
U.S. Highway 1
General
The defined neighborhood is located in the city of Miami and the subject's immediate neighborhood is identified
as Liberty City to the west of Interstate 95 and Little Haiti to the east of Interstate 95. Liberty City (or Model
City) is predominately an established low income residential area with commercial uses along major roadways.
The Little Haiti neighborhood is a growing Haitian community that is characterized by a large number of
churches and historic sites. Given the older age of the general improvements in the area, there is a push towards
maintaining the existing structures.
The neighborhood is heavily developed with industrial and commercial uses, as well as support facilities such
as Miami Dade Community College. There are several elementary schools in the neighborhood, two middle
schools and Edison Senior High. Employment opportunities are generally limited to the surrounding
neighborhood uses, local commercial businesses, national businesses along U.S. Highway 1 and NW 7t'
Avenue (U.S. Highway 441). The subject's proximity to an Interstate 95 interchange also allows for easy access
to many other employment opportunities outside the neighborhood.
The heart of Little Haiti is a commercial stretch of NE 2nd Avenue that extends north of NE 54t' Street to NE
62' Street. This area is improved with a variety of supporting neighborhood uses, primarily local businesses
such as food, variety and hair and beauty supply stores. There are several transportation arterials in the
neighborhood, including Interstate 95, State Road 826 and State Road 836, which help to provide easy access
to almost all areas of Miami -Dade County. The neighborhood is within 15 minute drive of the Miami
International Airport to the southwest and Miami Beaches to the east and Downtown Miami/Brickell area to
the southeast. The Brickell Avenue area of Miami is a leading hub of international banking and commerce,
with branch offices or regional headquarters for many of the world's leading financial institutions.
Portions of the subject neighborhood are within the Florida East Coast (FEC) Corridor Strategic
Redevelopment Plan. This plan has focused on facilitating economic revitalization opportunities within the
corridor and its surrounding neighborhoods. Within the Little Haiti area, the focus is to create an authentic
mixed -use neighborhood incorporating retail development, light manufacturing, housing and active recreation
within the context of the existing Haitian community. Particular concentration would be given to NE 2'
Avenue between NE 58t' Street and 62'd Street.
Access
Primary roadways servicing this neighborhood are Interstate 95, State Road 826, State Road 836 and 79t' Street.
Interstate 95 is a limited access highway that begins just south of the subject neighborhood and extends north
through the state of Florida along the east coast. This is an eight -lane roadway through Miami and often
becomes heavily congested during business hours. There is an interchange at 69t' Street, about two blocks east
of the subject.
State Road 836 is a limited access toll road that extends west from the intersection of Interstate 95 and Interstate
395 to the Florida Turnpike, approximately 13 miles to the west. This is a heavily traveled toll road that is a
primary access route to Miami International Airport and the Florida Turnpike. The Palmetto Expressway (State
Road 826) is also accessed from this arterial, which helps to provide quick access to the North Miami -Dade
County neighborhoods.
19-PIP MERIDIAN APPRAISAL GROUP, INC. 66
NEIGHBORHOOD ANALYSIS (CONT'D)
State Road 826 (Palmetto Expressway) is a limited access road that extends north from Kendall to the north side
of Miami Lakes. At this point, the expressway turns due east and terminates at the Florida Turnpike. State
Road 826, east of the turnpike, is a regular arterial known as NE 163' Street, which continues east and
terminates at the Florida Coastline. This is a heavily traveled expressway that provides access to many areas of
Miami -Dade County.
79'h Street is a six -lane divided east/west roadway that extends west from Biscayne Bay to the Hialeah Race
Track. This road is also known as State Road 934 in the subject neighborhood. West of the Hialeah Race Track,
State Road 934 is identified as W 21st Street and terminates at the Palmetto Expressway. In the subject
neighborhood, this road is developed with several commercial uses, primarily local businesses with a few
national users.
Surrounding Uses
As mentioned, the subject neighborhood is an older area of Miami and is heavily built-up. Employment centers
in the neighborhood include the local commercial business owners and industrial users in the neighborhood.
This area is heavily developed and the surrounding uses are as follows:
Adjacent East West North South
Subject
Commercial/Retail/
Small Office/Single family
Water Treatment Facility/
Schools/ Single family
Single family/ Industrial/
Small Office
Office/Single
family
Visibility
The subject is located on the south side of NW 69t' Street, west of U.S. Highway 441 and Interstate 95 in the
Liberty City/Little Haiti area of the city of Miami. Access is from NW 69t' Street and NW 67t' Street. Visibility
is average to good.
Conclusion
The subject neighborhood is an older area of Miami and is significantly built-up. The neighborhood is the
Liberty City/Little Haiti area, which is one of the lower income areas in the County. There are many necessary
supporting commercial services for residential development and several employment centers are within
proximity to the subject. There is minimal multi -family development (excluding public housing) in the
neighborhood, but demand for affordable housing in the area is high, suggesting that the subject project should
receive market acceptance as a multi -family location.
19-PIP MERIDIAN APPRAISAL GROUP, INC. 67
NORTH PARCEL SURVEY
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19-PIP MERIDIAN APPRAISAL GROUP, INC.
69
NORTH BUILDING SITE PLAN
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19-PIP MERIDIAN APPRAISAL GROUP, INC.
70
SOUTH BUILDING SITE PLAN
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19-PIP MERIDIAN APPRAISAL GROUP, INC. 71
SITE ANALYSIS
Location
The subject is located on the north and south sides of Dr. King Boulevard (NW 62nd Street) and the west side
of NW 15th Avenue in Miami, Miami -Dade County Florida.
Access/Exposure
The site has one access point to the North Parcel along the north side of Dr. King Boulevard at the alleyway
and one access point to the South Parcel from the west side of NW 15th Avenue. No other access is available or
necessary. The site has average to good exposure.
Area and Dimensions
According to the survey provided, the subject site contains about 43,821 square feet, or 1.006 acres. The
northern parcel will contain 0.531 acre or 23,146 square feet (after vacation and dedication of a portion of a 15'
wide alleyway) and the southern parcel the southern parcel contains 0.475 acre or 20,675 square feet. The site
is irregular in shape with frontage of 245' along the south side of Dr. King Boulevard (NW 62nd Street) and 100'
along the west side of NW 15t' Street for the South Parcel and the North Parcel has 260' along the north side of
Dr. King Boulevard and 140' of frontage along the west side of NW 15th Avenue; the North Parcel is also
divided by a 15' wide alleyway formerly known as NW 14t' Court that will be vacated and dedicated to the
subject site. Note that Dr. King Boulevard (NW 62' Street) is a four -lane, divided highway with landscaped
medians and center turn lanes.
Topography and Drainage
The subject's topography appears to be near road grade of adjacent roadways. Drainage appears to be adequate.
We observed no apparent drainage problems when we inspected the subject site. However, we assume no
responsibility for hidden or unapparent conditions beyond our expertise as appraisers.
Soil Conditions/Types
A visual inspection by the appraisers of the soil revealed no apparent adverse conditions. We assume no
responsibility for hidden or unapparent conditions beyond our expertise as appraisers.
Utilities and Services
The following utilities providers serve the subject site. Water and sewer are extended to the site.
Water
Miami -Dade County
Sewer
Miami -Dade County
Electricity
Florida Power & Light
Telephone
BellSouth
Police
City of Miami
Fire/Rescue
City of Miami
Easements and Encroachments
We are not aware of any atypical easements or encroachments encumbering the subject that would impede
development. The survey indicates drainage, public utility, and sanitary sewer easements. We reserve the right
to revise our report accordingly should it be found that any atypical easements or encroachments exist on the
subject site.
Hazardous or Toxic Materials
No hazardous or toxic materials were observed and none came to our attention during our physical property
inspection. Please refer to Item 12 of the "General Assumptions" of this report for a full disclaimer. We were
provided with Phase I and Phase II Environmental Site Assessments for the subject site prepared by Hydrolic
Associates USA, Inc. dated April 11 and 23, 2018, respectively. The assessments revealed no evidence of
recognized environmental conditions in connection with the property.
Surrounding Land Uses
To the north is single family, to the south is multi -family, to the east is multi -family and to the west is single
family and multi -family.
19-PIP MERIDIAN APPRAISAL GROUP, INC. 72
SITE ANALYSIS (CONT'D)
Conclusion
The subject site is of a size and configuration that appears to be suited for a variety of developments, including
rental apartments. However, the project has a four -lane, divided highway running between the two building
sites. Overall, exposure and access were considered average to good for multi -family purposes and the location
of the site is central to neighborhood shopping, employment and educational facilities. All necessary utilities
and services are available to the site to support the proposed development. Based on these investigations, we
are of the opinion that the subject site is adequate for apartment development.
19-PIP MERIDIAN APPRAISAL GROUP, INC. 73
NORTH BUILDING GROUND FLOOR PLAN
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19-PIP MERIDIAN APPRAISAL GROUP, INC.
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NORTH BUILDING SECOND FLOOR PLAN
19-PIP MERIDIAN APPRAISAL GROUP, INC.
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NORTH BUILDING FOURTH & FIFTH FLOOR PLAN
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19-PIP MERIDIAN APPRAISAL GROUP, INC. 79
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19-PIP MERIDIAN APPRAISAL GROUP, INC.
80
NORTH BUILDING SOUTH ELEVATION RENDERING
19-PIP MERIDIAN APPRAISAL GROUP, INC. 81
NORTH BUILDING NORTH ELEVATION RENDERING
19-PIP MERIDIAN APPRAISAL GROUP, INC. 82
NORTH BUILDING EAST ELEVATION RENDERING
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19-PIP MERIDIAN APPRAISAL GROUP, INC.
83
SOUTH BUILDING NORTH ELEVATION RENDERING
19-PIP MERIDIAN APPRAISAL GROUP, INC.
84
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19-PIP MERIDIAN APPRAISAL GROUP, INC. 85
SOUTH BUILDING SOUTH ELEVATION RENDERING
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19-PIP MERIDIAN APPRAISAL GROUP, INC.
86
IMPROVEMENT ANALYSIS
The following data is based on the preceding site plan and floor plans, and information provided by the
developer.
Type and Size
The subject will consist of 120 apartment units within two, five and seven -story apartment buildings with garage
parking. The seven -story building on the northern parcel will contain 60 units and the five -story building on the
southern portion will also contain 60 units. The two parcels are separated by a four -lane, divided highway with
most of the parking contained in the northern building and the amenities contained in the southern building.
The subject will set aside 20% (24) of the units for households earning 30% or less of the Area Median Income
(AMI), 63% (75) of the units for households earning 60% or less of AMI, 8% (nine) of the units for households
earning 80% or less of AMI and 10% (12) of the units at market rates. The subject will be restricted by the
Housing Credit, HOME, SURTAX and Tax -Exempt Bond programs. The following is the subject's unit mix.
Unit Mix with Set Asides
Unit Type
Set Aside
# Of Units
Unit Size (S.F.)
Total S.F.
1/1
30% AMI
24
563
13,512
1/1
60%AMI
75
563
42,225
1/1
80%AMI
9
563
5,067
1/1
Market
12
563
6,756
Total/Avg.
120
563
67,560
The total rentable area within the units is 67,560 square feet, resulting in an average unit size of 563 square feet.
The indicated density is 119.29 units per acre.
Common amenities will include leasing offices, laundry in each building, community room and fitness center.
Unit amenities will include refrigerator, range/oven, garbage disposal, dishwasher, ceiling fans, blinds, and
washer -dryer hook-ups.
Construction Details
Based upon information provided by the subject developer and typical apartment projects, the subject's
construction details are as follows:
Exterior Walls:
Windows:
Roof:
Partitions:
Party Wall:
Lighting:
Heat & Air Conditioning:
Flooring:
Laundry:
Other:
Concrete Block with Stucco
Aluminum Sash Single Pane
Steel Trusses
Gypsum Board
Gypsum Board
Compact Fluorescent
Package Heating and Cooling System
Ceramic Tile
Common Laundry Room(s)
Wired for cable/internet
General Layout and Efficiency
The subject's design is fair but inconsistent with other properties with family (general population) demographic
commitments. This is not a typical layout due to the improvements being separated by a four -lane road. The
northern parcel will have 112 parking spaces on the lower three floors while the southern parcel will have 20
parking spaces on the ground floor which is not adequate for that building; this condition will require a large
number of tenants to cross a major street (there is a lighted intersection) every day. Further, the amenities are
all located in the southern building including the leasing offices except there will be a laundry in both buildings.
Again, this is an inconvenience to some tenants. The subject's unit mix is also not typical of family properties,
19-PIP MERIDIAN APPRAISAL GROUP, INC. 87
IMPROVEMENT ANALYSIS (CONT'D)
as it includes only one -bedroom unit types. The subject's parking meets zoning requirements. The subject's
general design is fair and inconsistent with newer affordable properties in the county.
Age and General Condition
The physical condition of the improvements will be new upon completion. The economic life of the
improvements is estimated at 55 years.
Construction Quality
We estimate that the subject apartment buildings will be of average to good quality, Class C multi -family
buildings per the Marshall Valuation Service definition. Interior finish will be of average to good quality.
Site Improvements
The property will have concrete curbs, gutters and sidewalks, asphalt paved parking and interior streets,
landscaping with irrigation, site lighting and signage. All utility services are extended to the site and should
adequately service the subject. A total of 132 parking spaces (about 1.10 spaces per unit) will be provided. A
total of 132 parking spaces (about 1.10 spaces per unit) will be provided. Parking is not convenient to all tenants
(see the General Layout and Efficiency discussion above). Zoning requires 131 spaces for the subject with a
general population demographic. The subject meets this requirement, but is less than market standards. We
have assumed that the subject's site plan will be approved.
Personal Property
Personal property typically included in apartment projects consists of the appliances in each unit, mini -blinds
and/or vertical blinds in each unit, clubhouse/common area furnishings and equipment, and other similar
items. We estimate a contributory value of the personal property of $240,000.
Resident Programs
The following resident programs have been committed to by the developer:
1. Employment Assistance
2. Financial Management Program
3. Homeownership Opportunity
Conclusion
Based on discussions with the developer (see Extraordinary Assumptions), we are of the opinion that the
proposed improvements are adequately suited for their proposed use as apartments. However, the uneven
parking and amenities arrangements will cause some inconveniences for tenants. However, based on our review
of the area and interviews with leasing agents and potential tenants, the property should be accepted within the
market.
19-PIP MERIDIAN APPRAISAL GROUP, INC. 88
HIGHEST AND BEST USE ANALYSIS
In order for a property to be at its highest and best use, it must be reasonably probable, legally permissible,
physically possible, financially feasible and maximally productive. Consideration must be given to the
individual characteristics of the land such as size, shape, accessibility, location and availability of necessary
utilities. Specific attention must be directed toward the legal and permissible use and any probable modifications
of that use. Finally, consideration must be given to the surrounding land uses and the current and future demand
for property in the real estate market.
An analysis of the highest and best use of any property actually involves two separate studies:
1. an analysis of the site as if vacant and ready to be put to its highest and best use and,
2. an analysis of the property as proposed to be improved.
As Vacant
Legally Permissible Uses
The first step in the highest and best use is to determine the legally permissible land uses considering the present
zoning. The subject property is zoned T6-8-O & T4-L, Suburban Transect Zone - Open and General Urban
Transect Zone -Limited, by the City of Miami. The future land use designation is Mixed -Use. The zoning and
future land use allows a variety of uses including multi -family. Considering the surrounding uses, multi -family
is the most compatible use.
Physically Possible Uses
The subject site is of a size and configuration that appears to be suited for a variety of developments, including
rental apartments. However, the project has a four -lane, divided highway running between the two building
sites. Overall, exposure and access were considered average to good for multi -family purposes and the location
of the site is central to neighborhood shopping, employment and educational facilities. All necessary utilities
and services are available to the site to support the proposed development. Based on these investigations, we
are of the opinion that the subject site is adequate for apartment development.
Based on these investigations, we are of the opinion that the subject site is suitable for apartment development.
Logical and Economically Feasible Uses
Based on development costs for currently proposed apartment projects and attainable rents, new construction
would likely be possible at the subject location. Given the previous information, and relying upon data presented
in the Neighborhood Data, Apartment Market Overview and Income Capitalization Approach sections of this
report, we are of the opinion that the highest and best economic use of the subject property would be for
development of a rental community of average to good quality.
Miami -Dade County is a fast growing area that has attracted numerous retirees and a large working age
population. Transportation needs are provided by road, air, rail and water. In addition, the area has a strong
cultural community. Housing development is present in both the single family and multi -family segments in
response to increases in the population. Overall, the economic outlook for the region appears favorable into the
foreseeable future and we anticipate that real estate values will remain stable, with increasing tendencies.
The apartment market within Miami -Dade County consists of a wide variety of unit types ranging from older
subsidized housing, older market rate projects, newer affordable projects and new luxury market rate projects.
The subject is located in the Miami Gardens/Opa-Locka submarket which is one of 16 submarkets in Miami -
Dade County. Vacancy rates in Miami -Dade County are slightly higher than the average of the past five years
due to the high number of recent completions, however, the Miami Gardens/Opa-Locka sub -market has added
a limited number of new units come on-line in the past year. Rental rates in the county and sub -market have
steadily increased over the past five years. The Miami Gardens/Opa-Locka submarket has the 5th largest
inventory in Miami -Dade County, the 9th highest number of deliveries in the past 12 months, the 5th most units
under construction, the 5th lowest vacancy rates, the 7th highest average absorption rate and the 15th highest (2nd
19-PIP MERIDIAN APPRAISAL GROUP, INC. 89
HIGHEST AND BEST USE ANALYSIS (CONT'D)
lowest) average rental rates. Overall, the Miami Gardens/Opa-Locka submarket is a secondary apartment
location in Miami -Dade County that is currently experiencing slow but positive growth.
The subject neighborhood is an older area of Miami and is significantly built-up. The neighborhood is the
Liberty City/Little Haiti area, which is one of the lower income areas in the County. There are many necessary
supporting commercial services for residential development and several employment centers are within
proximity to the subject. There is minimal multi -family development (excluding public housing) in the
neighborhood, but demand for affordable housing in the area is high, suggesting that the subject project should
receive market acceptance as a multi -family location.
Occupancy rates in the projects are strong and the subject property is well located for an average to good quality
project, due to the character of the neighborhood, transportation linkages and employment opportunities in the
region. Alternative uses are for -sale single family product and for -sale multi -family product. However, multi-
family rental is the most likely.
Conclusion — "As Vacant"
The highest and best use as vacant is for multi -family rental development in conformance with zoning and
future land use regulations.
Highest and Best Use — As Proposed
As discussed in the Improvement Data section, the subject improvements will consist of a 120 unit rental
community with a mix of all one -bedroom units.
Based on discussions with the developer (see Extraordinary Assumptions), we are of the opinion that the
proposed improvements are adequately suited for their proposed use as apartments. However, the uneven
parking and amenities arrangements will cause some inconveniences for tenants. However, based on our review
of the area and interviews with leasing agents and potential tenants, the property should be accepted within the
market. The subject will offer typical unit features of similar quality finish as compared to the other market rate
and restricted comparables. The subject will have similar project amenities compared to the competition.
However, the parking and amenities arrangements will inconvenience some tenants due to having a major
roadway between the two buildings. The subject will set aside 20% (24) of the units for households earning 30%
or less of the Area Median Income (AMI), 63% (75) of the units for households earning 60% or less of AMI,
8% (nine) of the units for households earning 80% or less of AMI and 10% (12) of the units at market rates.
The proposed improvements are physically well -suited for their intended use. The improvements appear to
comply with zoning. We have assumed that the site and building plans will be approved as described herein.
As discussed on the preceding page, the affordable apartment market in Miami -Dade County appears to be
stabilized. Over the long-term, market conditions in Miami -Dade County and the subject's market area are
expected to be good. The subject is expected to generate a positive net operating income. Therefore, we
conclude that the subject improvements are generally consistent with the highest and best use of the site as if
vacant.
Conclusion — Highest and Best Use As Proposed
The highest and best use as proposed is for use as a multi -family rental community. The subject as proposed to
be improved has an atypical unit mix but should be well accepted in the market.
19-PIP MERIDIAN APPRAISAL GROUP, INC. 90
MARKETABILITY AND EXPOSURE PERIODS
Introduction
During the course of our research for this appraisal assignment we spoke with several real estate professionals
involved in marketing and sales of rental projects similar to the subject improvements in order to understand
the marketability of the subject property. We also surveyed representatives of various financial institutions to
obtain their current lending criteria for properties similar to the subject structure. The information gained from
these conversations is summarized below:
1. Who would be the typical purchaser of a property like the subject property?
The most likely purchasers of the subject as developed would be a regional or national investor.
2. What would be a typical selling commission?
A typical commission for this type of property would be between 2% to 4%. As the dollar
amount of the transaction increases, the commission would decrease correspondingly.
3. What would be the expected marketing and exposure periods?
An exposure period of 12 months from open to close would be typical. A marketing period of
six to 12 months would be typical.
4. What type of lending criteria would be typical for the subject property?
Typical permanent loan parameters for good quality projects are: an interest rate ranging from
200 to 350+ basis points above five to 10 year treasuries, a loan to value ratio of 80% to 90%;
a 15-18 year balloon and a 30 to 35 year amortization period.
19-PIP MERIDIAN APPRAISAL GROUP, INC. 91
VALUATION PROCEDURE
The valuation of real estate lends itself to the application of the three traditional approaches to value: the Cost
Approach, the Income Approach and the Sales Comparison Approach.
The Cost Approach analyzes the relationship between value and cost as perceived by the investor. By applying
this technique, the appraiser tends to estimate the difference in worth to a buyer between the property being
appraised and a newly constructed site with similar utility. The application of this approach involves estimating
a number of individual components such as land value, reproduction or replacement costs, entrepreneurial
profit, and accrued depreciation. This technique is most applicable when appraising relatively new construction
with a limited amount of accrued depreciation; however, it is also useful (but less effective) when appraising
older structures. The Cost Approach is applied, as the subject is proposed.
The Sales Comparison Approach involves a detailed analysis and comparison of similar properties that recently
sold in a similar or competitive market. When reduced to an appropriate unit of comparison, these transactions
can be adjusted for pertinent differences such as time, market conditions, financing, location and/or physical
characteristics. If a sufficient number of sales are available, the resulting value indication is a reflection of the
price a buyer is willing to pay for a property exhibiting characteristics similar to the subject. The interpretation
of a number of indications of market price should lead to a logical estimate of market value.
The Income Approach is based on the premise that a prudent investor would pay no more for the subject
property than for another investment with similar risk and return characteristics. Since the value of an
investment can be considered equal to the present worth of anticipated future benefits in the form of dollar
income or amenities, this approach estimates the present value of the net income that the property is capable of
producing. This amount is capitalized at a rate reflecting risk to the investor and the amount of income necessary
to support debt service for the mortgage requirement.
The Cost Approach, Sales Comparison and Income approaches to value were used to value the subject as a
market rental project. As restricted, the Cost Approach is unreliable and was not developed. We have provided
a value of the subject site as is.
19-PIP MERIDIAN APPRAISAL GROUP, INC. 92
VALUATION AS A MARKET RENTAL PROPERTY
COST APPROACH
The Cost Approach is based upon the principle of substitution, in that an investor would not pay more for an
improved property than to purchase a site and construct similar improvements on it. It involves the estimation
of the reproduction or replacement cost new of the improvements to which is added an estimate of land value.
In this instance, the improvements are efficiently designed and we have used the reproduction cost.
Reproduction cost is the cost to produce an exact replica of the subject property while the replacement cost
model is an estimate of the cost to produce a substitute property with comparable utility. Reproduction cost is
most valid when analyzing newer improvements that have experienced little loss in value through normal wear
and tear and other forms of depreciation.
Therefore, the Cost Approach to value attempts to estimate the current market value of property through a
process in which the appraiser estimates the reproduction costs of all improvements and then deducts the total
estimated loss in value (depreciation) for the improvements. The steps in this approach are outlined below:
Step 1 Estimate the current market value of the site. The site is valued as if vacant and free to be utilized in a
capacity representing its Highest and Best Use. This step is accomplished through the analysis of recent
sales and listings of comparable sites.
Step 2 Estimate the reproduction cost new of the subject improvements. This step results in the appraisers'
estimate of the total cost of replacing a structure similar to the subject improvements. The reproduction
cost estimate associated with this appraisal utilizes the estimated cost per square foot. This method of
estimating a cost factor is fully described later in this report.
Step 3 Estimate the total accrued depreciation or loss in value that the subject improvements may have
incurred due to physical, functional, or economic factors, which would negatively influence the value
of the property.
Step 4 Deduct the total estimated depreciation (Step 3) from the reproduction cost estimate (Step 2) and add
the current value estimate from the site (Step 1). The resulting figure represents the appraisers' estimate
of the current market value of the subject improvements via the Cost Approach.
Land Value Estimate
In order to estimate the value of the subject site, we have used the Sales Comparison Approach, which directly
compares the subject site to sales of similar sites that have occurred within the subject region. The reliability of
this technique is dependent upon the degree of comparability of each sale to the subject, market conditions at
the time of sale, verification of pertinent data and the absence of unusual conditions that influence the sale. A
detailed discussion of each comparable sale is presented on the following pages, along with a location map
indicating their proximity to the subject site.
19-PIP MERIDIAN APPRAISAL GROUP, INC. 94
+ +TheTCrossings
LAND SALES MAP
Pennsuco
Land Sale No. 2
Mia�miSpnngs-
••
Virginia Garden's
r
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•
Fou nta i n blew u
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ral Terrae
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trivia Heights ■ { •Sunset
N KENDALL DR_.
Kendale Lakes
The Hammocks
•
Country Walk
Mac's Fiekl
Land Sale Fie. 4
,Three Lakes
South and Heights a
Burrs Str
121.
nnceton
a Naranja
• Leisure City
LLIAN DR
Pinecrest
Richmond Heights
Dade
County-H amestead
Regional
Land Sale Ne
J1e
Bat Harbour
-NorthrMtami=
I1.1
+ Biscayne Park
7/1
Su rtside
-.Pinewood—1
Mianii Shores
Portal
Gladeview
�Brownsvitle
a
Ludlam BIRD Ram
The Barnacle
Historic State Park
Palmetto Bay
tier Ridge
South Miami
Lakes by the Bay
Biscayne
Bay
Subject Pro
■
a
North Bay Village.
Miami Beach
rginia Key
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Park
``I
19-PIP MERIDIAN APPRAISAL GROUP, INC.
95
LAND SALE 1
LOCATION DATA
Record Number:
Property Name:
Address:
Long/Lat:
MSA:
Location:
Tax Parcel No.:
SALES DATA
Sale Date:
Sale Price
Grantor:
Grantee:
OR Book/Page:
Property Rights:
Conditions of Sale:
Financing:
Verification:
Three Year History:
SITE DATA
Property Use:
Specific Use:
Primary Frontage:
Second Frontage:
Amenity Frontage:
Access/Exposure:
Topography:
Shape:
Zoning:
ANALYSIS
Price/Gross Acre:
Price/ Usable Acre:
Price/ Unit:
1377
Westview
12300 Block of NW 27th Avenue
(SR 9/SR 817)
Miami, Miami -Dade County
FL 33032
W80.242622/N25.886861
Miami -Fort Lauderdale -Pompano
Beach
NE/C NW 27th Ave. & NW
123rd St.
30-2127-025-0011
July 12, 2019
$1,350,000
Zeus 1 LLC
Group 10 OPZ Miramar, LLC
31544/1190
Fee Simple
Typical
Cash
Public Records and Evan Kristol Broker w/M & M (954-463-2400) by Mark Davis, September 5,
2019.
No recorded arm's length sales over the previous three years.
Multi -family Land
Workforce Housing Apartments
290' NW 27th Avenue
273' NW 123rd Street
None
Average/Good
Level
Rectangular
NCUAD-MC, Mixed Use
$738,957
$738,955
$12,736
Gross Acres:
Gross SF:
Usable Acres:
Usable SF:
Units:
Density:
Utilities:
Retention:
Price/ Gross SF:
Price/ Usable SF:
1.827
79,580
1.827
79,580
106
58.02 per gross acre
To site
Off -site
$16.96
$16.96
COMMENTS:
The site is proposed for a 106 unit affordable/workforce housing apartment project that is the maximum number of units
allowed by zoning. The site has frontage along the east side of NW 27th Ave. (SR 9/SR 817) just north of Gratigny
Parkway (SR 924). The asking price was $1,500,000.
19-PIP MERIDIAN APPRAISAL GROUP, INC. 96
LAND SALE 2
LOCATION DATA
Record Number:
Property Name:
Address:
Long/Lat:
MSA:
Location:
Tax Parcel No.:
SALES DATA
Sale Date:
Sale Price
Adjusted Sale Price:
Grantor:
Grantee:
OR Book/Page:
Property Rights:
Conditions of Sale:
Financing:
Verification:
Three Year History:
SITE DATA
Property Use:
Specific Use:
Primary Frontage:
Second Frontage:
Amenity Frontage:
Access/Exposure:
Topography:
Shape:
Zoning:
ANALYSIS
Price/Gross Acre:
Price/ Usable Acre:
Adj. Price/Gross AC:
Adj. Price/ Usable:
Price/ Unit:
Adj. Price/ Unit:
1011
Bridge Crossings site
2701/2765 E. l lth Avenue
Hialeah, Miami -Dade County
FL 33013
W80.260025 /N25.847517
Miami -Fort Lauderdale -Pompano
Beach
NE/C E. l lth Ave & E. 27th St.
04-3108-001-9890
August 04, 2017
$1,275,000
$1,275,000
A & B 2701 Investment, LLC
MBM Developments Group, Corp.
30647/3530
Fee Simple
Market Typical
Cash to Seller
Public Records, CoStar, and Sales Brochure by Mark Davis, December 22, 2017.
No prior arm's length transactions over last five years.
Mixed Use
Mixed Use
220' East l lth Ave.
100' East 27th St.
None
Average/Average
Level, at road grade
Rectangular
TOD- Transit Oriented Development, Mixed Use
$2,488,533
$2,488,529
$2,488,533
$2,488,529
$17,230
$17,230
Gross Acres:
Gross SF:
Usable Acres:
Usable SF:
Units:
Density:
Utilities:
Retention:
Price/ Gross SF:
Price/ Usable SF:
Adj. Price/Gross SF:
Adj. Price/ Usable SF:
0.512
22,318
0.512
22,318
74
144.43 per gross acre
All available
On -site
$57.13
$57.13
$57.13
$57.13
COMMENTS:
The Bridge Crossings market rate apartment project is proposed for the site. This project will have 74 units in one, seven -
story building including 51 one -BR units, 23 two -bedroom units, structured parking with 94 spaces and 1,100 SF of retail
space on the ground floor. The site is located in an industrial area that is located near a train station and being transitioned
to a residential area. The older warehouse improvements did not contribute value to the site and will be razed.
19-PIP MERIDIAN APPRAISAL GROUP, INC. 97
LAND SALE 3
LOCATION DATA
Record Number:
Property Name:
Address:
Long/Lat:
MSA:
Location:
Tax Parcel No.:
SALES DATA
Sale Date:
Sale Price
Adjusted Sale Price:
Grantor:
Grantee:
OR Book/Page:
Property Rights:
Conditions of Sale:
Financing:
Verification:
Three Year History:
SITE DATA
Property Use:
Specific Use:
Primary Frontage:
Second Frontage:
Amenity Frontage:
Access/Exposure:
Topography:
Shape:
Zoning:
ANALYSIS
Price/ Gross Acre:
Price/ Usable Acre:
Adj. Price/Gross AC:
Adj. Price/Usable:
Price/ Unit:
Adj. Price/Unit:
1204
Silver Creek
11855 SW 216th Street
Goulds, Miami -Dade County
FL 33177
W80.383410/N25.567175
Miami -Fort Lauderdale -Pompano
Beach
N/S SW 216th Street just west of
US Hwy. 1
30-6912-000-0260
November 30, 2018
$1,500,000
$1,500,000
Samjack Blackstone, LLC
GM Silver Creek, Ltd (Green
Mills)
31243/723
Fee Simple
Typical
Cash
Public Records and Mitch Rosenstein for grantee by Mark Davis, September 12, 2018.
No recorded sales over the previous three years.
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11
Multi -family Land
Affordable Apartments
135' SW 216th Street
135' SW 214th Street
None
Average/Good
Level
Irregular
GCUC, Mixed Use
$721,154
$721,152
$721,154
$721,152
$16,667
$16,667
Gross Acres:
Gross SF:
Usable Acres:
Usable SF:
Units:
Density:
Utilities:
Retention:
Price/ Gross SF:
Price/Usable SF:
Adj. Price/Gross SF:
Adj. Price/Usable SF:
2.080
90,605
2.080
90,605
90
43.27 per gross acre
To site
Off -site
$16.56
$16.56
$16.56
$16.56
COMMENTS:
The site is proposed for a 90 unit affordable apartment project for the general population (families) to be known as Fair
Oaks. The contract was contingent upon obtaining tax credits.
19-PIP MERIDIAN APPRAISAL GROUP, INC. 98
LAND SALE 4
LOCATION DATA
Record Number: 938
Property Name: Verbena
Address: 28140 South Dixie Highway
Naranja, Miami -Dade County
FL 33033
Long/Lat: W80.442239/N25.504202
MSA: Miami -Fort Lauderdale -Pompano
Beach
Location: NW/S U.S. Highway 1 and SE/S
South Miami -Dade Busway/Old
Dixie Highway
Tax Parcel No.: 30-7904-000-0231
SALES DATA
Sale Date: September 27, 2018
Sale Price $1, 750,000
Adjusted Sale Price: $1,750,000
Grantor: Bushhog Homestead, LLC
Grantee: Verbena, LLC
OR Book/Page: 31159/738
Property Rights: Fee simple
Conditions of Sale: Typical
Financing: Cash to seller 3 mile Med Home Value $171,844
Verification: Public Records and David Deutch for grantee; contract (305-854-7100) by Mark Davis, August
25, 2017.
Three Year History: No arm's length sales over previous three years.
SITE DATA
Property Use: Multi -family Land Gross Acres: 2.400
Specific Use: Affordable Apartment Gross SF: 104,544
Primary Frontage: 429' US Hwy. 1 Usable Acres: 2.400
Second Frontage: 429' Busway Usable SF: 104,544
Amenity Frontage: None Units: 110
Access/Exposure: Average/Good Density: 45.83 per gross acre
Topography: Flat Utilities: To site
Shape: Rectangular Retention: Off -site
Zoning: UC-MC, Mixed Use
ANALYSIS
Price/Gross Acre: $729,167 Price/ Gross SF: $16.74
Price/ Usable Acre: $729,167 Price/ Usable SF: $16.74
Adj. Price/Gross AC: $729,167 Adj. Price/Gross SF: $16.74
Adj. Price/ Usable: $729,167 Adj. Price/ Usable SF: $16.74
Price/Unit: $15,909
Adj. Price/Unit: $15,909
COMMENTS:
This site is proposed for the 110 unit affordable apartment project to be known as Verbena. The contract was originally
scheduled to close by September 30, 2017 but was extended several times.
19-PIP MERIDIAN APPRAISAL GROUP, INC. 99
LAND LISTING 5
LOCATION DATA
Record Number:
Property Name:
Address:
Long/Lat:
MSA:
Location:
Tax Parcel No.:
SALES DATA
Survey Date:
Asking Price
Adjusted Sale Price:
Grantor:
Grantee:
OR Book/Page:
Property Rights:
Conditions of Sale:
Financing:
Verification:
Three Year History:
SITE DATA
Property Use:
Specific Use:
Primary Frontage:
Second Frontage:
Amenity Frontage:
Access/Exposure:
Topography:
Shape:
Zoning:
ANALYSIS
Price/Gross Acre:
Price/ Usable Acre:
Adj. Price/Gross AC:
Adj. Price/ Usable:
Price/ Unit:
Adj. Price/ Unit:
1378
2479 NW 36th Street Site
2479 NW 36th St., 3460 NW 37th
St. & 2480 NW 38th St
Miami, Miami -Dade County
FL 33032
W80.237800/N25.809861
Miami -Fort Lauderdale -Pompano
Beach
E/S NW 27th Ave. & NW 123rd
St.
013122-038-0120 & 0010
September 5, 2019
$7,500,000
$7,500,000
Zeus 1 LLC
Group 10 OPZ Miramar, LLC
31544/1190
Fee Simple
Typical
Cash
Public Records and Markos Bertolotti Broker w/Faust Comm. Realty (305-961-1179) by Mark
Davis, September 5, 2019.
No recorded arm's length sales over the previous three years.
Mixed -Use Land
Multi -family
640' NW 36th Street
560' NW 25th Ave.
None
Average/Good
Level
Irregular
T6-8-O, Mixed Use
$1,837,785
$1,837,785
$1,837,785
$1,837,785
$16,667
$16,667
Gross Acres:
Gross SF:
Usable Acres:
Usable SF:
Units:
Density:
Utilities:
Retention:
Price/ Gross SF:
Price/ Usable SF:
Adj. Price/Gross SF:
Adj. Price/ Usable SF:
4.081
177,777
4.081
177,777
450
110.26 per gross acre
To site
Off -site
$42.19
$42.19
$42.19
$42.19
COMMENTS:
This property contains two sites located along the east side of NW 25th Ave. and separated by NW 37th St.; the southern
site has frontage along the north side of NW 36th St. The zoning allows for a wide range of uses including up to 450
multi -family units (110 units/acre); the site is being marketed primarily as a multi -family site. The sites are currently
improved with some small older building used for automotive repair and vehicle storage with minimal projected
demolition costs. The site was on the market for $6,600,000 in 2018, but was increased to $7,500,000 late last year. Also,
an offer of $6,500,000 was reportedly not accepted in 2018.
19-PIP MERIDIAN APPRAISAL GROUP, INC. 100
LAND SALE SUMMARY
Subject Property
Residences at Dr. King
Boulevard
Land Sale 1
Westview
Land Sale 2
Bridge Crossings
Land Sale 3
Silver Creek
Land Sale 4
Verbena
Land Listing 5
NW 36th Street Site
Miami
Miami
Hialeah
Goulds
Naranja
Miami
Sale Date
currrent contract
Jul-19
Aug-17
Nov-18
Sep-18
Sep-19
Sale Price
$55,621
$1,350,000
$1,275,000
$1,500,000
$1,750,000
$7,500,000
Land Size (Gross Acres)
1.01
1.83
0.51
2.08
2.40
4.08
No. of Units
120
106
74
90
110
450
Zoning
T6-8-O & T4-L
NCUAD-MC
TOD
GCUC
UC-MC
T6-8-O
Frontage/Exposure
Average/Good
Average/Good
Average/Average
Average/Good
Average/Good
Average/Good
Sale Price/Acre
n/a
$738,916
$2,490,234
$721,154
$729,167
$1,837,785
Sale Price/Unit
n/a
$12,736
$17,230
$16,667
$15,909
$16,667
Property Rights Conveyed
Fee Simple
Fee Simple
Fee Simple
Fee Simple
Fee Simple
Fee Simple
Financing
Cash
Cash
Cash
Cash
Cash
Cash
Conditions of Sale
Typical
Typical
Typical
Typical
Typical
Typical
Market Conditions
0%
0%
0%
0%
0%
-5%
Adjusted Price/Unit
$0
$12,736
$17,230
$16,667
$15,909
$15,833
Location
0%
-5%
-5%
-5%
-5%
Physical
0%
0%
0%
0%
0%
Size
0%
0%
0%
0%
0%
Zoning
0%
0%
0%
0%
0%
Other
0%
0%
0%
0%
0%
Net Adjustment
0%
-5%
-5%
-5%
-5%
Indicated Price /Unit
$12,736
$16,368
$15,833
$15,114
$15,042
Conclusion: 120 Subject Units @ $15,000 $1,800,000
Value As Is $1,800,000
19-PIP MERIDIAN APPRAISAL GROUP, INC.
101
COST APPROACH (CONT'D)
Adjustments
Typically, land sales adjustments are based on direct, paired sales analysis where possible. However, exact
mathematically extracted adjustments are not readily available due to the variety of differences between the
sales. Therefore, the following adjustments were based primarily on the experience and judgment of the
appraiser.
Property Rights Conveyed
All of the transactions involved the sale of the fee simple interest; therefore, no adjustments are required for
property rights conveyed.
Financing
All of the sales involved direct payment of cash to seller, or cash equivalent mortgage terms, so no adjustments
are applied for financing.
Condition of Sale
Land Sale Nos. 1 through 4 reportedly involved typically motivated buyers and sellers, so no adjustments are
necessary. Land Listing No. 5 was adjusted downward 5% to reflect its condition as a listing and recognizing
the tendency of listings to sell for less than the asking price.
Market Conditions
This adjustment is often necessary to older sales in order to reflect current market conditions. In most Florida
markets demand spiked for multi -family land about six to seven years ago. After this time period demand
moderated due to saturation in the multi -family for -sale market and the economic recession. Market conditions
have improved for apartments and demand has improved for multi -family land. In order to recognize current
market trends we have only used recent sales and contracts. The closed sales we used for this analysis range in
age from August 2017 to September 2019. Demand and sale prices have been relatively stable over the time
frame of the sales and are reflective of current market conditions; therefore, no adjustments are applied.
Location
Location adjustments take into consideration road frontage (visibility/exposure), access and surrounding
developments, etc. The subject is located in a mixed -use area with close proximity to commercial services and
transportation linkages. The subject site has average exposure for multi -family use. The subject is located in
Miami.
In addition, we have looked at median household incomes within a three-mile ring of each of the land sales and
the subject property. The subject's three-mile median income is $29,634. The average median income for the
land sales is $36,424. The subject's three-mile median home value is $207,332. The average three-mile median
home value for the land sales is $206,675.
Sale No.
Project
Median Income
Med. Home Value
Subject
Residences at Dr. King Boulevard
$29,634
$207,332
1
Westview
$34,220
$192,421
2
Bridge Crossings
$28,993
$212,825
3
Silver Creek
$49,050
$224,017
4
Verbena
$42,709
$195,434
5
2479 NW 36th Street Site
$27,148
$208,680
Land Sale No. 1 is located in the Westview area just north of the subject neighborhood with is similar to the
subject's location and did not require and adjustment. Land Sale No. 2 is located in Hialeah just west of the
subject neighborhood in a lightly superior area and has been adjusted downward. Land Sale No. 3 is located
in Goulds which is a more remote location but is a new growth area with similar exposure, and is considered a
slightly superior location overall and was adjusted downward. Land Sale No. 4 is located in Naranja which is
a more remote location but is a new growth area with similar exposure, and is considered a slightly superior
location overall and was adjusted downward. Land Sale No. 5 is located in Miami just south of the subject
19-PIP MERIDIAN APPRAISAL GROUP, INC. 102
COST APPROACH (CONT'D)
neighborhood with better exposure, and overall is considered to be superior to the subject and was adjusted
downward.
Physical
The comparable sites are considered reasonably similar physically as compared to the subject. Since we have
analyzed the land sales on a per unit basis, the developable area of the site is primarily considered. Thus,
deductions for wetlands, etc. are not necessary. The subject and the comparables are reasonably similar
requiring no adjustment.
Size (Number of Units)
The subject property is proposed to be developed with 120 units. The sales ranged from 74 to 450 units and
average 166 units. There does not appear to be a correlation with the number of units and price per unit. We
have made no adjustment for number of units.
Zoning
All of the sales either had zoning designations that allowed multi -family development at the time of contract or
were contingent upon rezoning approval. Therefore, all of the sales are considered to be similar to the subject
in regards to zoning.
Other
The subject does not have amenity frontage or access to shared amenities. Land Sale #3 has frontage on Lake
Shadows and was adjusted downward. The other comparable sites do not have lake -frontage or access to
amenities; therefore, are similar to the subject in this regard and are not adjusted.
Other Land Contracts
Several projects, including the subject, applied for funding in Miami -Dade County for Housing Credits or
funding from the Florida Housing Finance Corporation. The following chart summarizes the land contracts
from Miami -Dade County as well as a few from neighboring or similar Counties:
Project Name
County
Demo
Units
Price
Price/Unit
Northside Commons
Miami -Dade
Disabled
80
$2,000,000
$25,000
Casa Juarez
Miami -Dade
Farmworkers
32
$540,000
$16,875
Healthcare Sr. Housing
Miami -Dade
Elderly
76
$1,900,000
$25,000
Paradise Lakes
Miami -Dade
Family
76
$2,800,000
$36,842
Casaluna
Miami -Dade
Family
79
$2,500,000
$31,646
Cordova Estates
Miami -Dade
Family
160
$1,300,000
$8,125
Las Brisas Estates
Miami -Dade
Family
110
$4,200,000
$38,182
Redland Oaks
Miami -Dade
Family
110
$3,960,000
$36,000
Average
90
$27,209
Value Conclusion of Subject Site as Vacant Land
The sales reflect adjusted value indications of $12,736 to $16,368 per unit with an average of $15,019 per unit.
We have reconciled at $15,000 per unit, or $1,800,000* (rd.).
* Please see the Extraordinary Assumptions and Hypothetical Conditions.
Reproduction Cost New Estimate
In order to estimate the reproduction cost of the improvements, we have considered the subject's actual
development costs, the cost of similar projects and the cost indicated using the Marshall Valuation Service cost
manual.
Cost Estimate via Marshall Valuation Service
The subject's apartment buildings are Class C, average to good quality, High Rise Apartments, as classified by
the cost manual. According to Section 11, Page 18 of the Marshall Valuation Service (MVS) cost manual, the
base reproduction cost new estimate for average and good quality multiple residence construction is $98.50 and
19-PIP MERIDIAN APPRAISAL GROUP, INC. 103
COST APPROACH (CONT'D)
$129.00 per square foot Taking into account the subject's characteristics, we have reconciled at a base cost of
$113.75 per square foot for the subject property. We estimate interior corridor space at $45.00 per square foot.
The refinements applied and resulting cost estimate are shown in the following table.
Calculator Cost Form
For the Marshall Valuation Service Calculator Cost Method
Square Foot Costs
Subscriber:
Name of Project:
Climate:
Meridian Appraisal Group Date: Sep-19
Residences at Dr. King Boulev: Location Miami -Dade
Mild Region: Eastern
Occupancy
Buildings Class and Quality
Number of Stories
Height Per Story
Average Floor Area (SF) (NRA)
Number of units
Multiple Residences
Class C Average To Good
five and seven
8
67,560
120
Base SF Cost
Square Foot Refinements:
Heating, Ventilation and Cooling
Sprinklers
Miscellaneous
Subtotal
Marshall Valuation Service
Section - Page
$113.75 11 - 18
$0.00 12 - 18
$2.25 12 - 30
$0.00
$116.00
Height and Size Refinements:
Number of Stories Multiplier
Height Per Story Multiplier
Floor Area - Units Multiplier
Combined Multipliers
1.010 12-16
1.000
1.000
1.010
Refined Square Foot Cost
Current Cost Multiplier
Local Cost Multiplier
Subtotal Square Foot Cost
Total Square Footage
Cost Subtotal
Elevators
Interior Corridors, BOH
Cost Subtotal
Rounded
$117.16
1.03 99 - 3
0.95 99 - 7
$114.64
67,560
$7,745,150 SF - Other Cost/SF
Included
$438,750 9,750 $45.00
$8,183,900
$8,180,000
The indicated apartment buildings cost is $8,180,000 (rd.).
According to Section 11, Page 30 of the Marshall Valuation Service cost manual, the base reproduction cost
new estimate for average and good quality clubhouse construction is $105.00 and $146.00 per square foot.
Taking into account the subject's characteristics, we have reconciled at a base cost of $125.50 per square foot
for the subject property. The refinements applied and resulting cost estimate for the clubhouse space are shown
in the following table.
19-PIP MERIDIAN APPRAISAL GROUP, INC. 104
COST APPROACH (CONT'D)
Calculator Cost Form
For the Marshall Valuation Service Calculator Cost Method
Square Foot Costs
Subscriber: Meridian Appraisal Group Date: Sep-19
Name of Project: Residences at Dr. King Boulevar Location: Miami -Dade
Climate: Mild Region: Eastern
Occupancy Clubhouse
Buildings Class and Quality Class C average to good
Number of Stories 1
Height Per Story 8
Average Floor Area (SF) (HVAC area) 6,361
Average Perimer (LF) Typical
Marshall Valuation Service
Section - Page
Base SF Cost $125.50 11 - 30
Square Foot Refinements:
Heating, Ventilation and Cooling $0.00
Sprinklers $2.25 12 - 30
Miscellaneous $0.00
Subtotal $127.75
Height and Size Refinements:
Number of Stories Multiplier 1.000 12 - 10
Height Per Story Multiplier 1.000
Floor Area - Units Multiplier 1.000
Combined Multipliers 1.000
Refined Square Foot Cost $127.75
Current Cost Multiplier 1.03 99 - 3
Local Cost Multiplier 0.95 99 - 7
Subtotal Square Foot Cost $125.00
Total Square Footage 6,361
Cost Subtotal $795,146
$93.75
Plus: Non -A/C area $0.00 0 SF
Cost Subtotal $795,146
Rounded $800,000
We have also estimated the cost of site improvements, which will consist of 132 surface parking spaces,
recreational amenities, interior roadways, sidewalks, landscaping and signage.
Site Improvements
Parking Spaces 132 $12,500 $1,650,000
Interior roads $100,000
Recreation $0
Sidewalks, signage, landscaping $150,000
Total $1,900,000
Impact fees are estimated at $1,020,000. In the Improvement Data section we estimated the cost new FF&E for
the units and common areas at $240,000. Indirect costs are estimated as follows:
19-PIP MERIDIAN APPRAISAL GROUP, INC. 105
COST APPROACH (CONT'D)
Indirect Costs
Real Estate Taxes/Insurance
Professional Fees
Marketing/Advertising
Finance Charges
Impact Fees
Contingency
Indirect Costs Total
$150,000
$250,000
$50,000
$200,000
$1,020,000
$200,000
$1,870,000
Next we considered the developer's profit as if the subject were a market rate development. This incentive is
defined as "a market derived figure that represents the amount an entrepreneur expects to receive in addition
to cost." For investment properties, the entrepreneurial profit is usually measured from the time the conceptual
plans originate through the site's acquisition and construction of the project to a point at which the developer
is relieved of his market obligation. Past experience with properties like the subject and discussions with market
participants indicated profit targets typically range from 6% to 15% with smaller projects typically falling toward
the high end of the range. We have estimated an entrepreneur's incentive of 10% of the reconciled cost for the
subject property, or $2,180,000.
Summing the cost estimates of the apartment building, clubhouse, site improvements, FF&E, indirect costs,
and entrepreneurial profit indicates a cost to construct via the (MVS) as summarized below:
Development Cost Summary MVS
Item
Cost Estimate
Apartment Building
Clubhouse
Site Improvements
Furniture, Fixtures and Equipment
Indirect Costs
Development Cost Subtotal
Add Reconciled Profit(includes land)
Indicated Cost Marshall Valuation Service
Indicated Cost Per Unit
Indicated Cost Per S.F.
67,560 SF (NRA)
$8,180,000
$800,000
$1,900,000
$240,000
$1,870,000
$12,990,000
$2,180,000
$15,170,000
$126,417
$224.54
Cost Comparables
In addition to the costs indicated by the Marshall Valuation Service, we have considered the overall costs of
similar projects, as summarized below. The cost comparables are two or three-story garden -style buildings
without elevators and mid to high-rise projects with elevators and exclude land costs, any fees associated with
Housing Credit or Bond Financed properties and include developer profit.
The MVS cost estimate was $126,417 per unit or $224.54 per square foot. The cost comparables range from
$126,441 to $263,753, with an average of $184,830 per unit. The higher end of the range is set by townhouse
and high-rise projects. Per square foot costs range from $117.12 to $263.67, with an average of $183.80. The
cost estimate prepared with the Marshall Valuation Service falls within the range of the cost comparables.
19-PIP MERIDIAN APPRAISAL GROUP, INC. 106
COST APPROACH (CONT'D)
COST
COMPARABLES
Project Location
Cost
Unit Mix
Cost/Unit
Cost/SF (NRA)
Orange County
Garden
3-story
Stair Access
$23,266,249
2/2
3/2
3/2
72
24
18
$204,089.90
$117.12
Total
114
Orange County
Garden
3-story
Stair Access
$32,492,997
1/1
2/1
2/2
3/2
4/3
18
11
12
126
11
$182,545
$163.56
Total
178
Manatee County
Mid -rise
4-story
Elevator Access
$15,462,761
1/1
2/2
36
36
$214,761
$263.67
Total
72
Orange County
Garden
3-story
Stair Access
$13,483,495
1/1
2/2
3/2
4/3
6
18
35
11
$192,621
$167.83
Total
70
Bay County
Garden
3-story
Stair Access
$12,183,744
2/2
3/2
4/2
46
26
6
$156,202
$141.30
Total
78
Bay County
Garden
3-story
Stair Access
$13,171,934
1/1
2/2
3/2
14
60
18
$143,173
$132.56
Total
92
Polk County
Garden
4-story
Elevator Access
$15,805,792
1/1
2/2
3/2
32
52
12
$164,644
$185.92
Total
96
Hardee County
Garden
2-story
$9,360,771
1/1
2/2
3/2
16
32
16
$146,262
$168.31
Total
64
Sumter County
TH
2-story
$4,927,115
2/1.5
3/2
14
6
$246,356
$217.05
Total
20
Dade County
Mid -rise
4-story
Elevator Access
$15,931,512
1/1
2/2
3/2
4/2
27
61
35
3
$126,441
$152.41
Total
126
Dade County
Mid -Rise
6-story
Elevator Access
$22,155,233
1/1
2/2
3/2
10
53
21
$263,753
$262.05
Total
84
Dade County
High-rise
13-story
$23,909,764
1/1
2/2
3/2
25
98
12
$177,109
$233.79
Total
135
Note: Costs indicated include entrepreneur's profit of 10% to 15%.
Developer's Adjusted Pro forma
The Developer Pro forma indicates total costs of $36,604,585 (including land). We have deducted the land
costs, FHFC specific costs, profit differential, and operating costs or reserves from the developer's budget to
arrive at a cost estimate as a market rate development as presented below:
19-PIP MERIDIAN APPRAISAL GROUP, INC. 107
COST APPROACH (CONT'D)
Subject Development Cost Pro Forma
Adjusted to Exclude Land, Acquisitions, FHFC and Profit Differentia]
Total Cost Including Land and Acquisitions
Less: Land Cost
Less: FHFC Fees
Less: Profit Differential
Developer Fee (Subject -Affordable) $4,861,939
Developer Fee (Market Estimate) $2,180,000
Total as a Market Rate Project
$36,604,585
- $155,621
- $346,778
$2,681,939 -$2,681,939
$33,420,247
120 Per Unit $278,502
67,560 Per SF $494.68
Based on the pro forma costs minus the costs associated with a project with Housing Credits, the total
reproduction cost new is $33,420,247 or $278,502 per unit, which is significantly higher than the cost indicated
using the Marshall Valuation Service. We have given consideration to the Marshall Valuation Service estimate,
the cost comparables, and the developer's cost estimate.
Total Construction Cost New — Reconciled
We have reconciled at a total construction cost new of $20,000,000 or $166,667 per unit.
Total Reproduction Cost New
We have added the developer's profit. This incentive is defined as "a market derived figure that represents the
amount an entrepreneur expects to receive in addition to cost." For investment properties, the entrepreneurial
profit is usually measured from the time the conceptual plans originate through the site's acquisition and
construction of the project to a point at which the developer is relieved of his market obligation. Past experience
with properties like the subject and discussions with market participants indicated profit targets typically range
from 6% to 15% with smaller projects typically falling toward the high end of the range. We have estimated an
entrepreneur's incentive of 10% for the subject property. Adding a developer's profit of $2,180,000 indicates
total Reproduction Cost New of $22,180,000 or $184,833 per unit.
Accrued Depreciation
The next step was to estimate accrued depreciation, separated into three basic forms: physical, functional and
external obsolescence. Physical depreciation could be further divided into two sub -categories, physical curable
(deferred maintenance) and physical incurable depreciation. First, we will consider all forms of curable
depreciation that must be accomplished before accurately measuring incurable depreciation.
Physical Curable depreciation (deferred maintenance) includes all items of maintenance that should be
accomplished on the date of appraisal to maximize profits or minimize losses that would result if the property
were sold. The measure of this element of accrued depreciation is the cost of restoring an item to new or nearly
new condition, i.e., the cost to cure. The subject improvements will be in new condition; we have estimated
that no deferred maintenance is present.
Incurable Short -Lived depreciation includes all natural aging and wear and tear of the components of the
improvements, which if repaired as of the date of appraisal, would not add greater value than the cost to repair
or replace the item. A short-lived item is a component that is expected to have a remaining economic life that
is shorter than the remaining economic life of the structure. Such items include parking areas, roof covers, floor
coverings, appliances, HVAC, etc. The subject will be new and we estimate no accrued depreciation for
incurable short-lived items.
Incurable Long -Lived depreciation is generally regarded as the bone structure of the buildings and includes all
items not treated as short-lived.
Functional Obsolescence can result from poor building design, apartment floor plan or inadequate building
construction/materials. Functional obsolescence can be curable or incurable. To be curable, the cost of
19-PIP MERIDIAN APPRAISAL GROUP, INC. 108
COST APPROACH (CONT'D)
replacing the outmoded or unacceptable aspect must be the same as or less than the anticipated increase in
value. The subject's improvements will be efficient and functional for their intended purpose. Therefore, no
functional obsolescence is indicated.
External Obsolescence results from forces outside the property boundaries affecting its value at any given time.
These forces may include a depressed market, oversupply, general economic conditions, etc. Comparison of
the subject's value by the Cost Approach ($23,980,000) to that of the Income ($14,120,000) and Sales
Comparison Approaches ($14,090,000) indicates that development of the subject complex (as a market rate
project without government subsidies) does not offer sufficient profit to the developer, suggesting that external
obsolescence is present in the amount of $9,860,000.
Total Accrued Depreciation
The subject has accrued depreciation in the form of external obsolescence.
Value Conclusion — As If Complete
The contributory value for the improvements has been estimated at $12,320,000. To this amount is added the
land value estimate of $1,800,000 to arrive at the hypothetical market value estimate as if complete by the Cost
Approach of $14,120,000*.
Value Conclusion — As If Stabilized
The value attributable to the lease -up was estimated in the Income Capitalization Approach to be $190,000.
We have added the estimated value of the lease -up to the as if complete estimate indicating a hypothetical
market value estimate as if stabilized by the Cost Approach of $14,310,000*.
* Please see the Extraordinary Assumptions and Hypothetical Conditions.
COST APPROACH SUMMARY
Stabilized
TOTAL CONSTRUCTION COSTS -RECONCILED
Entrepreneurial Profit (includes land)
TOTAL REPRODUCTION COST NEW
ACCRUED DEPRECIATION
Deferred Maintenance
Physical Short Lived
Physical Long Lived
Functional Obsolescence
External Obsolescence
Total Depreciation
CONTRIBUTORY VALUE OF IMPROVEMENTS
LAND VALUE
ESTIMATED VALUE AS IF COMPLETE
ESTIMATED LEASE -UP COSTS
ESTIMATED VALUE AS IF STABILIZED
10%
Total
$20,000,000
$2,180,000
$22,180,000
$0
$0
$0
$0
$9,860,000
$9,860,000
$12,320,000
$1,800,000
$14,120,000
$190,000
$14,310,000
$ /UNIT
$166,667
$18,167
$184,833
$82,167
$82,167
$102,667
$15,000
$117,667
$1,583
$119,250
19-PIP MERIDIAN APPRAISAL GROUP, INC. 109
SALES COMPARISON APPROACH
The Sales Comparison Approach is a technique wherein a property is valued by comparison to similar
properties that have recently sold in the marketplace. The Sales Comparison Approach is based upon the
principle of substitution, which states that the value of a property tends to be fixed to the cost of acquiring an
equally desirable substitute property with the same or similar utility.
The Sales Comparison Approach begins with a search for sales of similar properties in the area. We reviewed
recent sales in the Miami -Fort Lauderdale -Pompano Beach MSA. As will be discussed in the Income
Capitalization Approach, capitalization rates have been stable over the time period covered by the sales.
Factors of comparison considered during the search are project type, quality of construction, age, condition,
location, rental rates and any other physical or economic characteristics that may affect the property's value.
Because like units must be compared, each transaction should be analyzed in terms of appropriate units of
comparison. The units of comparison selected depend on the individual appraisal problem. The sale properties
have been compared to the subject by allocating the sale price to the price per unit. The market gives most
consideration to this unit of comparison. The dates of sale range from June 2018 to May 2019.
Adjustments have been made to each property, in order to make comparisons between the sales and the subject.
In the following section, we briefly discuss each sale and explain the adjustment process. Detailed descriptions
of each sale follow, along with an explanation of the adjustments and a summary chart.
19-PIP MERIDIAN APPRAISAL GROUP, INC. 110
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19-PIP MERIDIAN APPRAISAL GROUP, INC.
111
IMPROVED MARKET SALE 1
LOCATION DATA
Record Number:
Market Type:
Property Name:
Address:
Long/Lat:
MSA:
Location:
Tax Parcel No.:
SALES DATA
Sale Date
Sale Price:
Grantor:
Grantee:
OR Book/Page:
Property Rights:
Conditions of Sale:
Financing:
Verification:
Three Year History:
SITE DATA
Acres:
Square Feet:
Main Frontage:
Amenity Frontage:
Zoning:
Land Use:
Density:
Utilities Included in
Rent:
Project Amenities:
588
Market
Sunny Lake
2360 NW 56th Avenue
Lauderhill, Broward County
FL 33313
W80.264560/N26.175600
Miami -Fort Lauderdale -
Pompano Beach
SE/C NW 56th Ave. & NW
25th St.
49-41-26-15-0010
May 3, 2019
$59,000,000
TMIF Glen, LLC
The Glen Apartments
Holdings, LLC
115791332
Leased Fee
Market Typical
Cash to Seller
Public Records and Jo Rousseau Broker w/HFF (305-532-2352) by Mark Davis June 21, 2019.
No sales over previous three years.
26.470
1,153,033
2,400' NW 56th Ave.
None
RM-18
Multi -family
15.30 units per gross acre
Trash Collection, Pest Control
Outdoor Tennis, Laundry,
Clubhouse, Exercise Fitness,
Outdoor Pools (1), Business
Center, Car Wash, Playground
IMPROVEMENT DATA
Number of Units: 405
Year Built: 1988
Apartment Type: Garden
Ave. Unit Size: 976 SF
No. of Stories: 2
No. of Buildings: 26
Parking: 900 surface spaces
Construction: Wood Frame/Vinyl Siding &
Stucco
Unit Amenities: Washer/Dryer, Ceiling Fans,
Icemakers, Patios/Balconies,
Dishwasher, Disposal
UNIT MIX
Unit Type
Number of Units
Size (SF)
Rent per Month
Monthly Rent/SF
1/1
96
719
$1,225
$1.70
2/1
52
954
$1,350
$1.42
2/2
208
1,065
$1,520
$1.43
3/2
49
1,129
$1,600
$1.42
FINANCIAL DATA
NOI: $2,950,000
Price/Unit:
$145,679
ANALYSIS
Occupancy at Sale:
Capitalization Rate:
NOI per Unit:
Price/Net SF:
97%o
5.00%
$7,284
$149.19
19-PIP MERIDIAN APPRAISAL GROUP, INC. 112
IMPROVED MARKET SALE 1 (CONT'D)
COMMENTS
The property was built in 1989 and was renovated in 2009; the project was in average to good condition at the time of
sale. Project formerly known as the Villas at Lauderhill.
19-PIP MERIDIAN APPRAISAL GROUP, INC. 113
IMPROVED MARKET SALE 2
LOCATION DATA
Record Number:
Market Type:
Property Name:
Address:
Long/Lat:
MSA:
Location:
Tax Parcel No.:
SALES DATA
Sale Date
Sale Price:
Grantor:
Grantee:
OR Book/Page:
Property Rights:
Conditions of Sale:
Financing:
Verification:
Three Year History:
SITE DATA
Acres:
Square Feet:
Main Frontage:
Amenity Frontage:
Zoning:
Land Use:
Density:
Utilities Included in
Rent:
Project Amenities:
595
Market
Edge Apartments
1850-1870 SW 68th Avenue
Miramar, Broward County
FL 33314
W80.223700/N25.994160
Miami -Fort Lauderdale -
Pompano Beach
NW/C SW 67th Ave. & SW
41st Ct.
50-41-27-01-0191 & 50-41-27-
01-0210
February 22, 2019
$9,000,000
Megacow, LLC
Edge Apartments, LLC
115633630
Leased Fee
Market Typical
Cash to Seller
Public Records and Derek Gibbs Broker w/Marcus & Millichap (954-245-3448) by Mark
Davis September 5, 2019.
No sales over previous three years.
2.200
95,832
650' SW 67th Ave.
None
RAC-TC
Multi -family
54.9 units per gross acre
Trash Collection, Pest Control
Laundry, Clubhouse, Outdoor
Pools (1)
IMPROVEMENT DATA
Number of Units:
Year Built:
Apartment Type:
Ave. Unit Size:
No. of Stories:
No. of Buildings:
Parking:
Construction:
Unit Amenities:
76
1970
Garden
674 SF
2
4
109 surface spaces
CBS
Microwaves, Patios/Balconies,
Range/Oven, Refrigerator
UNIT MIX
Unit Type
Number of Units
Size (SF)
Rent per Month
Monthly Rent/SF
Studio
2
500
$913
$1.83
1/1
57
630
$1,025
$1.63
2/1
17
840
$1,300
$1.55
FINANCIAL DATA
PGI:
Vacancy:
EGI:
Expenses:
NOI:
Price/ Unit:
Adj. Price/ Unit:
$1,005,507
$49,404
$956,103
$436,803
$519,300
$118,421
$118,421
ANALYSIS
Occupancy at Sale:
Capitalization Rate:
NOI per Unit:
Expenses per Unit:
EGIM:
Price/Net SF:
Adj. Price/ Net SF:
96%
5.77%
$6,833
$5,747
9.41
$175.82
$175.82
19-PIP MERIDIAN APPRAISAL GROUP, INC. 114
IMPROVED MARKET SALE 2 (CONT'D)
COMMENTS
The property was built in 1973 and 1975 and was in average to good condition; the sellers had completed renovations
on 68 units, painted the exterior, put on a new roof and mansard and new perimeter/security fence before the sale.
Interior unit renovations included new tile flooring, paint, cabinets, countertops and appliances. Project formerly
known as Bentley Apartments and Willowbrook Apartments; is now known as Edge Apartments.
19-PIP MERIDIAN APPRAISAL GROUP, INC. 115
IMPROVED MARKET SALE 3
LOCATION DATA
Record Number:
Market Type:
Property Name:
Address:
Long/Lat:
MSA:
Location:
Tax Parcel No.:
SALES DATA
Sale Date
Sale Price:
Grantor:
Grantee:
OR Book/Page:
Property Rights:
Conditions of Sale:
Financing:
Verification:
Three Year History:
SITE DATA
Acres:
Square Feet:
Main Frontage:
Amenity Frontage:
Zoning:
Land Use:
Density:
Utilities Included in
Rent:
Project Amenities:
594
Market
Vue on 67th
4199 SW 67th Avenue
Davie, Broward County
FL 33314
W80.237220/N26.070200
Miami -Fort Lauderdale -
Pompano Beach
NW/C SW 67th Ave. & SW
41st Ct.
50-41-27-01-0191 & 50-41-27-
01-0210
October 31, 2018
$20,000,000
Scadia Enterprises N.V.
Bala Scandia, LLC
115419511 & 11549509
Leased Fee
Market Typical
Cash to Seller
Public Records and Derek Gibbs Boker w/ Marcus & Millichap (954-245-3448) by Mark Davis
September 5, 2019.
No sales over previous three years.
3.240
141,134
650'SW 67th Ave.
RAC-TC
Multi -family
54.9 units per gross acre
Trash Collection, Pest Control
IMPROVEMENT DATA
Number of Units: 178
Year Built: 1973
Apartment Type: Garden
Ave. Unit Size: 1,049 SF
No. of Stories: 2
No. of Buildings: 6
Parking: 160 surface spaces
Construction: CBS
Laundry, Clubhouse, Outdoor Unit Amenities:
Pools (1)
Microwaves, Patios/Balconies,
Range/Oven, Refrigerator
UNIT MIX
Unit Type
Number of Units
Size (SF)
Rent per Month
Monthly Rent/SF
1/1
45
700
$975
$1.39
2/2
133
950
$1,375
$1.45
FINANCIAL DATA
NOI: $1,050,000
Price/ Unit:
$112,360
ANALYSIS
Occupancy at Sale:
Capitalization Rate:
NOI per Unit:
Price/Net SF:
96%
5.25%
$5,899
$107.07
COMMENTS
The property was built in 1973 and 1975 and was in fair to average condition; the new owners are renovating the
property. Project formerly known as Bala Gardens and Marlboro Estates.
19-PIP MERIDIAN APPRAISAL GROUP, INC. 116
IMPROVED MARKET SALE 4
LOCATION DATA
Record Number:
Market Type:
Property Name:
Address:
Long/Lat:
MSA:
Location:
Tax Parcel No.:
SALES DATA
Sale Date
Days on Market:
Sale Price:
Grantor:
Grantee:
OR Book/Page:
Property Rights:
Conditions of Sale:
Financing:
Verification:
Three Year History:
SITE DATA
Acres:
Square Feet:
Main Frontage:
Amenity Frontage:
Zoning:
Land Use:
Density:
Utilities Included in
Rent:
Project Amenities:
519
Market
Park Plaza
17600 NW 5th Avenue
Miami Gardens, Miami -Dade
County
FL 33169
W80.209890/N25.935870
Miami -Fort Lauderdale -
Pompano Beach
SW/C NW 177th St. & NW 5th
Ave.
34-2112-029-0010
111
A►.:ter
October 19, 2018
60 days
$33,400,000
Park Plaza Apartment Holdings
LLC
EB Park Plaza LP
31193-3456
Fee Simple
Arm's Length
Cash to Seller
Public Records and Tal Frydman Broker w/Berkadia (561-609-4015)
November 19, 2018.
No other transactions occurred over the previous three years.
8.000
348,480
610' NW 177th Street
None
Multi -family
Multi -family
29.3 units per gross acre
Water, Trash Collection, Sewer,
Pest
Laundry, Clubhouse, Exercise
Fitness, Business Center, Picnic
Area, Elevators
IMPROVEMENT
Number of Units:
Year Built:
Apartment Type:
Ave. Unit Size:
No. of Stories:
No. of Buildings:
Parking:
Construction:
Unit Amenities:
by Mark Davis
DATA
234
1972
Mid -rise
738 SF
3
13
300 surface spaces; 1.3 sp/unit
CCB
Microwaves, Ceiling Fans,
Icemakers, Dishwasher, Blinds
UNIT MIX
Unit Type
Number of Units
Size (SF)
Rent per Month
Monthly Rent/SF
1/1
126
625
$1,199
$1.92
2/1
89
800
$1,399
$1.75
3/2
19
1,200
$1,699
$1.42
FINANCIAL DATA
NOI: $1,870,400
Price/Unit:
$142,735
ANALYSIS
Occupancy at Sale:
Capitalization Rate:
NOI per Unit:
Price/Net SF:
95%
5.60%
$7,993
$193.34
19-PIP MERIDIAN APPRAISAL GROUP, INC. 117
IMPROVED MARKET SALE 4 (CONT'D)
COMMENTS
Project purchased for continued use as rental apartments. Financials based on actual Trailing-3 months annualized
income/expenses adjusted for increased real estate taxes and reserves ($250/unit). Project was renovated in 2011 and
partially upgraded in 2017/2018 including granite countertops, ceramic tile floors and new appliances. The buyer is
proposing to complete renovations and upgrades.
19-PIP MERIDIAN APPRAISAL GROUP, INC. 118
IMPROVED MARKET SALE 5
LOCATION DATA
Record Number:
Market Type:
Property Name:
Address:
Long/Lat:
MSA:
Location:
Tax Parcel No.:
SALES DATA
Sale Date
Sale Price:
Grantor:
Grantee:
OR Book/Page:
Property Rights:
Conditions of Sale:
Financing:
Verification:
Three Year History:
SITE DATA
Acres:
Square Feet:
Main Frontage:
Amenity Frontage:
Zoning:
Land Use:
Density:
Utilities in Rent:
Project Amenities:
515
Market
Lombardy
2110 SW 3rd Avenue
Miami, Miami -Dade County
FL 33129
W80.204555/N25.758310
Miami -Fort Lauderdale -
Pompano Beach
SW/C SW 3rd Ave. & SW 21st
Road
01-4138-001-1260
June 21, 2018
$12,825,000
Dalton Properties, Inc.
TMC Apartments, LLC
31037/4059
Leased fee
Typical, Arm's Length
Cash to seller
Public Records and CoStar by Mark Davis October 15, 2018.
No transfers in the three years prior to this sale.
0.810
35,284
280' SW 3rd Avenue
None
T6-8 0
Multi -family
108.6 units per gross acre
Trash Collection
Elevator, Gated Entry
IMPROVEMENT DATA
Number of Units:
Year Built:
Apartment Type:
Ave. Unit Size:
No. of Stories:
No. of Buildings:
Parking:
Construction:
Unit Amenities:
88
1994
Mid -rise
908 SF
8
1
Adequate; some covered
Concrete Block
Microwaves, Washer/Dryer,
Patios/Balconies, Blinds,
Dishwasher
UNIT MIX
Unit Type
Number of Units
Size (SF)
Rent per Month
Monthly Rent/SF
1/1
2
633
$1,450
$2.29
2/2
86
914
$1,818
$1.99
FINANCIAL DATA
NOI: $769,500
Price/ Unit:
$145,739
ANALYSIS
Occupancy at Sale:
Capitalization Rate:
NOl per Unit:
Price/Net SF:
94%
6.00%
$8,744
$160.57
COMMENTS
The above financial information was provided by CoStar via reported contact with the buyer. we were unable to reach
either the seller or the buyer for further confirmation
19-PIP MERIDIAN APPRAISAL GROUP, INC. 119
IMPROVED
SALES ANALYSIS -MARKET
Subject
Improved Sale 1
Improved Sale 2
Improved Sale 3
Improved Sale 4
Improved Sale 5
Property
Residences at Dr. King
Boulevard
Sunny Lake
Edge Apartments
Vue on 67th
Park Plaza
Lombardy
City
County
Date
Adjusted Price
Size: Units
Rentable SF
Avg. Unit Size (SF)
Year Built
Unit Mix
Miami
Miami -Dade
N/A
N/A
120
67,560
563
2020
1BR
Lauderhill
Broward
May-19
$59,000,000
405
395,473
976
1988
1,2&3BR
Miramar
Broward
Feb-19
$9,000,000
76
51,190
674
1970
0,1&2BR
Davie
Broward
Oct-18
$20,000,000
178
186,800
1,049
1973
1&2BR
Miami Gardens
Miami -Dade
Oct-18
$33,400,000
234
172,750
738
1972
1,2&3BR
Miami
Miami -Dade
Jun-18
$12,825,000
88
79,870
908
1994
1&2BR
0
Net Income Multiplier (NIM)
NOI/Unit
NOI/SF
Occupancy at Sale
Capitalization Rate
Price/SF
Price/Unit
19.96
$5,961
$10.59
94%
5.00%
N/A
N/A
20.00
$7,284
$7.46
97%
5.00%
$149.19
$145,679
17.33
$6,833
$10.14
96%
5.77%
$175.82
$118,421
19.05
$5,899
$5.62
96%
5.25%
$107.07
$112,360
17.86
$7,993
$10.83
95%
5.60%
$193.34
$142,735
16.67
$8,744
$9.63
94%
6.00%
$160.57
$145,739
Adjustments - Transaction Characteristics IF
Property Rights
Financing
Conditions of Sale
Market Conditions
Leased Fee
Conventional
Arm's Length
Current
Leased Fee
Conventional
Arm's Length
Current
Leased Fee
Conventional
Arm's Length
Current
Leased Fee
Conventional
Arm's Length
Current
Leased Fee
Conventional
Arm's Length
Current
Leased Fee
Conventional
Arm's Length
Current
Adjusted $/Unit
N/A
$145,679
$118,421
$112,360
$142,735
$145,739
Adjustments - Property Characteristics
Location
No. of Units
Age/Quality/Cond.
Avg. Unit Size (SF)
Unit Mix
Fair
120
$2,020
563
1 BR
-5%
0%
5%
-10%
-10%
-5%
0%
10%
0%
-5%
-5%
0%
20%
-10%
-5%
-5%
0%
5%
-5%
-10%
-10%
0%
5%
-10%
-5%
Concluded Adj./Unit
Adjusted $/Unit
-20%
$116,543
0%
$118,421
0%
$112,360
-15%
$121,325
-20%
$116,591
Indicated Value Range/Unit Minimum $112,360 Maximum $121,325 Average $117,048
Conclusion
Per Dwelling Unit 120 $119,000 $14,280,000
Implied Value/SF $211.37
Value Conclusion As If Stabilized Rounded to
Less: Lease -Up Cost
Value Conclusion As If Complete
$14,280,000
$190,000
$14,090,000
19-PIP MERIDIAN APPRAISAL GROUP, INC.
120
SALES COMPARISON APPROACH (CONT'D)
ADJUSTMENTS
Typically, sales adjustments are based on direct, paired sales analysis where possible. However, exact
mathematically extracted adjustments are not readily available due to the variety of differences between the
sales. Therefore, the following adjustments were based primarily on the experience and judgment of the
appraisers.
Property Rights Conveyed
All of the transactions involved the sale of the leased fee interest, subject to short-term leases; therefore, no
adjustments are required for property rights conveyed.
Financing
All of the sales involved direct payment of cash to seller, or cash equivalent mortgage terms, so no adjustments
are applied for financing.
Condition of Sale
All of the sales reportedly involved typically motivated buyers and sellers, so no adjustments are necessary.
Market Conditions
This adjustment is often necessary to older sales in order to reflect current market conditions. All of the sales
occurred since June 2018, over which time market conditions have been stable. No adjustment is considered
necessary.
Location
The subject neighborhood is an older area of Miami and is significantly built-up. The neighborhood is the
Liberty City/Little Haiti area, which is one of the lower income areas in the County. There are many necessary
supporting commercial services for residential development and several employment centers are within
proximity to the subject. There is minimal multi -family development (excluding public housing) in the
neighborhood, but demand for affordable housing in the area is high, suggesting that the subject project should
receive market acceptance as a multi -family location.
All of the sales have superior locations and are adjusted downward.
Size/Number of Units
Typically, a unit price of a smaller property tends to be higher than the unit price of a larger one due to the
greater ability of a purchaser to afford the smaller property. The subject has 120 units. The sales range in size
from 76 to 405 and average 196 units. We have made upward adjustments to the sales which are significantly
larger than the subject and downward adjustments to the projects that are significantly smaller than the subject.
Age/Quality/Condition
The subject is an average to good quality property, built in 2020 and in average condition. The sales range in
year built from 1970 to 1994 and have an average year built of 1979. We have made positive adjustment for the
older projects and negative adjustments to the newer projects.
Average Unit Size
The subject's average unit size is 563 square feet. The sales range in average unit size from 674 to 1,049 square
feet and average 869 square feet. We have made positive adjustment to the projects with small average unit
sizes and negative adjustments to the projects with larger average unit sizes.
Unit Mix
The subject offers a mix of only one -bedroom units. Larger unit types can command higher rents and more
diverse unit types typically maintain higher occupancy rates; we also considered the affect on rental income by
the number of units allocated to each unit type. Most apartments offer predominantly one and two -bedroom
units, and typically some three -bedroom units with occasional studio units. All of the sales have superior unit
mixes and are adjusted downward.
19-PIP MERIDIAN APPRAISAL GROUP, INC. 121
SALES COMPARISON APPROACH (CONT'D)
Hypothetical Value Conclusion As If Stabilized
After applying adjustments, the improved sales reflect values of $112,360 to $121,325 per unit, with an average
of $117,048. We conclude a value of $119,000 per unit for the subject. The subject has 120 units, so the
hypothetical market value estimate, as if stabilized, is $14,280,000* (rd.).
The data provided for the comparable sales offers net income multipliers ranging from 16.67 to 20.00. The
implied NIM for the subject's value conclusion on a dwelling unit basis is 19.96, which is within the range
indicated by the sales.
Hypothetical Value Conclusion As If Complete
We have estimated the rent loss at $190,000; subtracting the rent loss from the as if stabilized value conclusion
results in a hypothetical market value estimate as if complete of $14,090,000.
* Please see the Extraordinary Assumptions and Hypothetical Conditions.
19-PIP MERIDIAN APPRAISAL GROUP, INC. 122
INCOME CAPITALIZATION APPROACH
The Income Capitalization Approach is based upon the premise that a prudent investor would pay no more for
the subject property than for another investment with similar risk and return characteristics. The value of an
investment is considered equal to the present worth of anticipated future benefits. The methodology of this
approach is to estimate the gross income a property is capable of producing in the current market and then
subtract all vacancy and operating expenses. The resulting net operating income is then translated into value
using either direct capitalization or yield capitalization (Discounted Cash Flow Analysis). In the case of the
subject property, only direct capitalization is applied.
Direct capitalization of a projected net operating income stream is applied to estimate the market value of the
subject property as though stabilized. The annual stabilized net operating income is divided by a market derived
overall capitalization rate to indicate a value estimate.
Market Rental Rate Estimate
The subject's location in Miami has an ample supply of market rate apartments. We included six properties that
are in the Competitive Market Area.
Occupancy - Market Comps
City
Apartment Project
Type
# Units Year Built
Occupancy
# Occupied
Stabilized Projects
Miami
Biscayne Apartments
Market
402
1985
97%
390
Miami Gardens
Parc Place
Market
234
1972
98%
229
Miami Gardens
Spring Lake Club
Market
108
1971
100%
108
Miami
Park Place by the Bay
Market
463
1990
97%
449
Miami
Horizons North
Market
276
1984
93%
257
Miami
Blue Riviera
Market
310
1986
100%
310
Projects in Tease up, Under Construction, Confidential or Unwilling to Participatein Survey
N/A
Total Units 1,793
1,743
Less: Confidential Occupancy or Unstabilized Occupancies
0
0
Total Stabilized Units Responding to Survey
1,793
1,743
Overall Occupancy Rate (Stabilized Projects) 1,793 97%
1,743
Average Project Size 299
Average Year Built 1981
Source: Meridian Appraisal Group, Inc. field survey Sep-19
Note: The year built for projects with multiple phases is the date of the first phase. The date of rehabilitated projects is
the original year built.
All of comparables are operating at stabilized occupancy ranging from 93% to 100%, with a weighted average
of 97%. The comparables listed above are analyzed in the following estimation of the subject's market rents.
19-PIP MERIDIAN APPRAISAL GROUP, INC. 123
FLORIG3n.'S TPKE
Country iYub
PALM Ef-TOEKP_Y
Spring Lake CIub
GRAII,GNY PI)"
Hialeah_Gardens
Med ley
■
West Miami
W hester
•
■
Coral Terr
�4BIROR —
MARKET RENT COMPARABLES MAP WITH FIVE AND EIGHT -MILE RINGS
■ Foun al
Olympia Heights
Opa Locke
Gratign
Miami Springs
■ Andover
Miami Gardens
Horizons Borth
Scott Lake
■ North Miami Bea
{ I
Carol Clty I I ■ UfeYa
��SUNNYYrI'S - _BLVE
Coral Gables
■
West Little River
Subject Property
Brownsville
CORAL WAY
The Barnacle
Historic State Park
Gold • n Glades
01eta
River
Oleta
River SP
Biscayne Apartments
Miami Shores
Biscal ne
Bm'
Virginia Key
irginia Beach
... Linty Pa
n PA
19-PIP MERIDIAN APPRAISAL GROUP, INC.
124
SUBJECT PROPERTY — MARKET RENTS
LOCATION DATA
Record Number:
Market Type:
Property Name:
Address:
Long/Lat:
MSA:
Tax Parcel No.:
PROPERTY DATA
Apartment Type:
Construction Type:
Year Built:
Number of Units:
Condition:
Date Surveyed:
Surveyed by:
Number of Stories:
Number of Buildings:
Parking:
Garages:
Occupancy
Concessions:
Rental Premiums:
Utilities Included:
Project Amenities:
2080
Mixed Income
Residences at Dr. King Blvd.
Dr. King Boulevard
Miami, Miami -Dade County
FL 33147
W80.483850/N25.845510
Miami -Fort Lauderdale -
Pompano Beach
01-3114-035-2000; 2020 & 2030;
01-3114-035- 027-1210, 1220,
1230, 1240, 1250 & 1290
Mid -rise
CCB
2020
120
Good
September 5, 2019
Mark Davis
5&7
2
132 spaces
None
Proposed
None
None
Trash Collection, Pest Control
Exercise Fitness, Clubhouse, Unit Features: Ceiling Fans, Blinds, Dishwasher,
Laundry
Disposal, W/d Hook-ups
Unit Type
Number of Units
Size (SF)
Rent per Month
Monthly Rent Per SF
11/1
1201
5631
si,iool
$1.95
Averages
120
563
$1,100
$1.95
COMMENTS
This is a proposed affordable apartment project for the general population (family) with income and rent restrictions on 108
units and the remaining 12 units being un-restricted. The above rental rates were estimated by the appraisers. The above
unit size reflects an average for the 23 similar one -bedroom floor plans
19-PIP MERIDIAN APPRAISAL GROUP, INC. 125
MARKET RENT COMPARABLE 1
LOCATION DATA
Record Number: 196
Market Type: Market
Property Name: Biscayne Apartments
Address: 1550 NE 123rd Street
Miami, Miami -Dade County
FL 33161
Long/Lat: W80.167590/N25.888710
MSA: Miami -Fort Lauderdale -
Pompano Beach
Tax Parcel No.: 06-2229-083-0050 et al
Phone No. 786-217-6719
PROPERTY DATA
Apartment Type: Mid -rise
Construction Type: CCB
Year Built:: 1985
Number of Units: 402
Condition: Good
Date Surveyed: August 30, 2019 (786-217-6719)
Surveyed by: Mark Davis
Number of Stories: 5
Number of Buildings: 6
Parking: Adequate
Garages: None
Occupancy 97%
Concessions: 396 units for taxes
Rental Premiums: None
Utilities Included: Trash Collection, Pest Control
Project Amenities: Outdoor Pools (2), Exercise Unit Features: Patios/balconies, Ceiling Fans,
Fitness, Clubhouse, Laundry,
Outdoor Tennis, Spa,
Racquetball, Picnic Area
Dishwasher, Blinds
UNIT MIX
Unit Type
Number of Units
Size (SF)
Rent per Month
Monthly Rent Per SF
Studio
6
550
$1,171
$2.13
1/1
118
750
$1,170
$1.56
1/1
118
775
$1,270
$1.64
2/2
80
949
$1,663
$1.75
2/2
80
951
$1,691
$1.78
Averages
402
834
$1,401
$1.68
COMMENTS
This property has an agreement with a condominium building to share some amenities. There is a laundry on every
floor. The project was renovating unit interiors as they turnover from late 2017 when the clubhouse and building
exteriors were renovated to mid-2019 when the last units were renovated. Rates change daily using the YieldStar
program. Property previously known as Watermarke at Biscayne and Avesta Biscayne.
19-PIP MERIDIAN APPRAISAL GROUP, INC. 126
MARKET RENT COMPARABLE 2
LOCATION DATA
Record Number: 207
Market Type: Market
Property Name: Parc Place
Address: 17600 NW 5th Ave.
Miami Gardens, Miami -Dade
County
FL 33169
Long/Lat: W80.209810/N25.935970
MSA: Miami -Fort Lauderdale -
Pompano Beach
Tax Parcel No.: 34-2112-029-0010
Phone No. 305-652-7858
PROPERTY DATA
Apartment Type:
Construction Type:
Year Built:
Number of Units:
Condition:
Date Surveyed:
Surveyed by:
Number of Stories:
Number of Buildings:
Parking:
Garages:
Occupancy
Concessions:
Rental Premiums:
Utilities Included:
Project Amenities:
Mid -rise
CCB
1972
234
Average to Good
August 30, 2019 (305-652-7858)
Mark Davis
3
13
Adequate
None
98%
None
None
Water, Trash Collection, Sewer, Pest Control
Exercise Fitness, Clubhouse, Unit Features:
Laundry, Picnic Area
Ceiling Fans, Blinds
UNIT MIX
Unit Type
Number of Units
Size (SF)
Rent per Month
Monthly Rent Per SF
1/1
126
625
$1,299
$2.08
2/1
89
800
$1,499
$1.87
3/2
19
1,200
$1,699
$1.42
Averages
234 738
$1,408
$1.91
COMMENTS
This is an older project that was renovated in 2018 including unit interiors, building exterior and amenities. One elevator
per building. Formerly known as Park Plaza.
19-PIP MERIDIAN APPRAISAL GROUP, INC. 127
MARKET RENT COMPARABLE 3
LOCATION DATA
Record Number: 208
Market Type: Market
Property Name: Spring Lake Club
Address: 5400 NW 159th St.
Miami Gardens, Miami -Dade
County
FL 33014
Long/Lat: W80.289470/N25.917230
MSA: Miami -Fort Lauderdale -
Pompano Beach
Tax Parcel No.: 34-2118-003-0010
Phone No. 305-624-3095
PROPERTY DATA
Apartment Type: Mid -rise
Construction Type: CCB
Year Built: 1971
Number of Units: 108
Condition: Fair to Average
Date Surveyed: August 30, 2019 (305-624-3095)
Surveyed by: Mark Davis
Number of Stories: 4
Number of Buildings: 1
Parking: Adequate
Garages: None
Occupancy 100%
Concessions: None
Rental Premiums: None
Utilities Included: Water, Trash Collection, Sewer, Pest Control
Project Amenities: Outdoor Pools (1), Laundry, Unit Features:
Lake Front, Boat Ramp
Dishwasher, Blinds
UNIT MIX
Unit Type
Number of Units
Size (SF)
Rent per Month
Monthly Rent Per SF
'Studio
8
550
$950
$1.73
1/1
28
750
$1,150
$1.53
2/1
40
766
$1,250
$1.63
2/2
8
845
$1,350
$1.60
2/2
8
946
$1,350
$1.43
2/2
8
1,046
$1,350
$1.29
2/2
2
1,083
$1,500
$1.39
3/2
6
1,200
$1,600
$1.33
Averages
108
816
$1,248
$1.53
COMMENTS
This is an older project that has been adequately maintained and is in fair to average condition. There are two elevators
at each end of the building.
19-PIP MERIDIAN APPRAISAL GROUP, INC. 128
MARKET RENT COMPARABLE 4
LOCATION DATA
Record Number: 27
Market Type: Market
Property Name: Park Place by the Bay
Address: 915 NW 1st Avenue
Miami, Miami -Dade County
FL 33136
Long/Lat: W80.195450/N25.783340
MSA: Miami -Fort Lauderdale -
Pompano Beach
Tax Parcel No.: 01-0102-040-1020
Phone No. 305-530-1646
PROPERTY DATA
Apartment Type: High-rise
Construction Type: Concrete
Year Built:: 1990
Number of Units: 463
Condition: Average
Date Surveyed: August 30, 2019 (305-530-1646)
Surveyed by: Mark Davis
Number of Stories: 30
Number of Buildings: 1
Parking: Adequate
Garages: None
Occupancy 97%
Concessions: None
Rental Premiums: None
Utilities Included: Water, Trash Collection, Sewer, Pest Control
Project Amenities: Outdoor Pool, Exercise Fitness, Unit Features:
Clubhouse, Laundry, Spa, Picnic
Area
Patios/balconies
UNIT MIX
Unit Type
Number of Units
Size (SF)
Rent per Month
Monthly Rent Per SF
1/1
154
657
$1,325
$2.02
2/2
284
827
$1,560
$1.89
3/2
25
1,230
$2,155
$1.75
Averages
463 792
$1,514
$1.91
COMMENTS
Units on 17th floor and above receive a $150 premium. This project has 10 different floor plans that are similar in size
and the above unit sizes are averages for each unit type; a specific unit mix was not available, except by unit type. Rental
rates are also quoted by unit type.
19-PIP MERIDIAN APPRAISAL GROUP, INC. 129
MARKET RENT COMPARABLE 5
LOCATION DATA
Record Number: 530
Market Type: Market
Property Name: Horizons North
Address: 665 Ives Dairy Road
Miami, Miami -Dade County
FL 33179
Long/Lat: W80.188880/N25.961300
MSA: Miami -Fort Lauderdale -
Pompano Beach
Tax Parcel No.: 30-1231-014-0010
Phone No. 305-652-1258
PROPERTY DATA
Apartment Type: Mid -rise
Construction Type: CCB
Year Built: 1984
Number of Units: 276
Condition: Average
Date Surveyed: August 30, 2019 (305-652-1258)
Surveyed by: Mark Davis
Number of Stories: 4
Number of Buildings: 3
Parking: Adequate
Garages: None
Occupancy 93%
Concessions: None
Rental Premiums: None
Utilities Included: Trash Collection, Pest Control
Project Amenities: Outdoor Pools (1), Exercise Unit Features: Patios/balconies, Ceiling Fans,
Fitness, Clubhouse, Laundry,
Picnic Area, Spa, Sauna
Blinds
UNIT MIX
Unit Type
Number of Units
Size (SF)
Rent per Month
Monthly Rent Per SF
1 / 1.5
24
690
$1,290
$1.87
2/2
108
955
$1,424
$1.49
2/2/den
100
1,015
$1,424
$1.40
3/2
32
1,015
$1,474
$1.45
'Penthouse 1/1
4
1,222
$1,530
$1.25
'Penthouse 2/2
4
1,476
$1,799
$1.22
'Penthouse 3/2
4
1,482
$1,875
$1.27
Averages
276
980
$1,432
COMMENTS
The trash is $25 per month and included above. The Penthouse units include washer/dryers and fireplaces. Two
elevators per building.
19-PIP MERIDIAN APPRAISAL GROUP, INC. 130
MARKET RENT COMPARABLE 6
LOCATION DATA
Record Number: 423
Market Type: Market
Property Name: Blue Riviera
Address: 111 NW 97th Avenue
Miami, Miami -Dade County
FL 33130
Long/Lat: W80.351930/N25.771340
MSA: Miami -Fort Lauderdale -
Pompano Beach
Tax Parcel No.: 30-4004-009-0020
Phone No. 305-559-8920
PROPERTY DATA
Apartment Type: Low -Rise
Construction Type: CCB
Year Built:: 1986
Number of Units: 310
Condition: Average to Good
Date Surveyed: August 30, 2019 (305-559-8920)
Surveyed by: Mark Davis
Number of Stories: 4
Number of Buildings: 4
Parking: unknown
Garages: None
Occupancy 100%
Concessions: None
Rental Premiums: None
Utilities Included: Trash Collection, Pest Control
Project Amenities: Outdoor Pools (1), Exercise Unit Features: Patios/balconies, Ceiling Fans,
Fitness, Clubhouse, Laundry
Dishwasher
UNIT MIX
Unit Type
Number of Units
Size (SF)
Rent per Month
Monthly Rent Per SF
1/1
113
671
$1,090
$1.62
2/1
102
819
$1,290
$1.58
2/2
95
838
$1,360
$1.62
Averages
310 771
$1,239
COMMENTS
This project has been adequately maintained and is in average to good condition. On -site parking.
19-PIP MERIDIAN APPRAISAL GROUP, INC. 131
INCOME CAPITALIZATION APPROACH (CONT'D)
Rental Rate Analysis
The following market rate analysis assumes that all of the units in the complex are leased at market rates without
maximum income restrictions (exclusively market rate project). The comparables were adjusted for the utilities
and services provided in the rental rates and we have also considered adjustments for
location/quality/amenities in our rental rate conclusions. We have also taken into consideration the market
trend of smaller units leasing for a higher per square foot rate than their larger counterparts.
Adjustments
We have compared each of the comparables to the subject and have made quantitative adjustments for
utilities/services included in the rental rates, unit sizes and the number of bathrooms. Adjustments for water,
sewer and trash expenses were obtained from the local Housing Authority's utility allowance chart.
Washer/dryer, number of baths, and square foot adjustments were derived from appraisers' experience and
judgment.
Utilities/Services Adjustments
water (w) 1 BR $5
sewer (s) 1 BR $8
washer/dryer $45
square foot (sf) $0.75
alarm (a) $20
cable (basic) (c) $60
trash (t) $37
Adjustments were also applied for concessions based on the actual dollar amount, if offered. Qualitative
adjustments for location, quality, condition and amenities were considered in our rental rate conclusions.
Biscayne Apartments was built in 1985 but fairly recently renovated, is located in North Miami, in a slightly
superior area, and was in slightly inferior condition; it was considered similar overall and not adjusted. Parc
Place was built in 1972 but fairly recently renovated, is located in Miami Gardens, in a similar area, is older
with superior amenities and considered overall similar; it was not adjusted. Spring Lake Club was built in 1971
is located in Miami Gardens, a slightly superior area and was of similar quality with superior amenities, but
inferior location; it was similar overall and not adjusted. Park Place by the Bay was built in 1990 is located just
northwest of Downtown Miami, a slightly superior area with superior amenities but inferior condition; it was
similar overall and not adjusted. Horizons North was built in 1984 is located in North Miami, a slightly superior
area, was older and in inferior condition with similar amenities; it was similar overall and not adjusted. Blue
Riviera was built in 1986 is located in West Miami, a superior location, of similar quality and in inferior
condition with similar amenities; it was similar overall and not adjusted.
One -Bedroom Analysis
The comparables indicate adjusted rents (after deducting for concessions) of $997 to $1,242, with an average of
$1,132. The comparable units analyzed range in size from 625 square feet to 775 square feet with an average
unit size of 695. The subject's unit size of 563 square is below the range of the comparables, and below the
average.
19-PIP MERIDIAN APPRAISAL GROUP, INC. 132
INCOME CAPITALIZATION APPROACH (CONT'D)
One -Bedroom Market Rent Comparables Summary
#
Complex Name
Unit Type
Street Rent Util./Services
Net Adj.
Adj. Rent
Size/SF Adj. Rent/SF St. Rent/SF
1
Biscayne Apartments
1/1
$1,270
t,p
-$159
$1,111
775
$1.43
$1.64
2
Parc Place
1/1
$1,299
w,s,t,p
-$60
$1,240
625
$1.98
$2.08
3
Spring Lake Club
1/1
$1,150
w,s,t,p
-$153
$997
750
$1.33
$1.53
4
Park Place by the Bay
1/1
$1,325
w,s,t,p
-$84
$1,242
657
$1.89
$2.02
5
Horizons North
1/1.5
$1,290
t,p
-$95
$1,195
690
$1.73
$1.87
6
Blue Riviera
1/1
$1,090
t,p
-$81
$1,009
671
$1.50
$1.62
Average
$1,237
-$105
$1,132
695
$1.65
$1.79
Residences Dr. King Boulev
$1,100
$1.95
at
1/1
t,.
563
Adjustment Summary (1 BR)
Lo cation
W/D/Cable
/Quality
#
Complex Name
Util./Services
Water
Sewer
Trash
/ Alarm
/Other
SF
Total
1
Biscayne Apartments
t,p
$0
$0
$0
$0
$0
-$159
-$159
2
Parc Place
w,s,t,p
-$5
-$8
$0
$0
$0
-$47
-$60
3
Spring Lake Club
w,s,t,p
-$5
-$8
$0
$0
$0
-$140
-$153
4
Park Place by the Bay
w,s,t,p
-$5
-$8
$0
$0
$0
-$71
-$84
5
Horizons North
t,p
$0
$0
$0
$0
$0
-$95
-$95
6
Blue Riviera
t,p
$0
$0
$0
$0
$0
-$81
-$81
Average
---
-$5
-$8
$0
$0
$0
-$99
-$105
Based upon this analysis, we estimate a current market rent for the subject's one -bedroom units as follows:
One -Bedroom Rent Conclusion
Floor Plan
Unit Size
Rental Rate
Rental Rate/SF
1/1
5631
$1,100I
$1.951
Market Rental Rate Conclusions
The market rent estimates are summarized in the following table:
Potential
Base Rental Income
- Market Rate
Unit Type
No. Units
Unit Size
$/Month
Total Annual Rent
1/1
120
563
$1,100
$1,584,000
Total/Avg.
120
563
$1,100
$1,584,000
Therefore, the subject's potential gross income as an exclusively market rate project, excluding rent premiums,
is estimated at $1,584,000.
Other Income
Washer/Dryer Income
The subject developer offers washer/dryer appliances to rent to tenants. We project a participation rate of 20%
and a monthly premium of $45.00, or $12,960 annually.
Rental Premiums
At many apartments and rental projects, rental premiums are paid tenants for features such as top floor,
conservation area frontage, water frontage, etc. At the estimated market rents, we expect no additional
premiums.
Ancillary Income
Apartments typically earn additional income in the form of vending income, late charges, pet deposits, forfeited
security deposits, etc. Market data indicates a typical ancillary income range of about 2% to 5% of the gross
rental income. Actual ancillary income was estimated in the developer pro forma at $22,344 ($15.52 per unit).
We estimate ancillary income at $20.00 per unit per month, or $28,800 annually. This is about 1.8% of the
potential gross rental income.
Subtotal
The total for all of the Other Income categories is $41,760.
19-PIP MERIDIAN APPRAISAL GROUP, INC. 133
INCOME CAPITALIZATION APPROACH (CONT'D)
Potential Gross Income
Potential gross income is the sum of the gross rental income, washer and dryer income, cable television income,
rental premiums and ancillary income, or $1,625,760.
Vacancy and Collection Loss
Potential gross income considers that the property is 100% occupied and assumes all rents are actually collected.
However, almost all income producing properties experience some tenant turnover and collection loss. The
following chart summarizes the occupancy rate for the comparable projects.
Occupancy - Market Comps
City Apartment Project Type # Units Year Built Occupancy # Occupied
Stabilized Projects
Miami
Biscayne Apartments
Market
402
1985
97%
390
Miami Gardens
Parc Place
Market
234
1972
98%
229
Miami Gardens
Spring Lake Club
Market
108
1971
100%
108
Miami
Park Place by the Bay
Market
463
1990
97%
449
Miami
Horizons North
Market
276
1984
93%
257
Miami
Blue Riviera
Market
310
1986
100%
310
Projects in Lease -up, Under Construction, Confidential or Unwilling to Participatein Survey
N/A
Total Units 1,793 1,743
Less: Confidential Occupancy or Unstabilized Occupancies
0
0
Total Stabilized Units Responding to Survey
1,793
1,743
Overall Occupancy Rate (Stabilized Projects) 1,793 97% 1,743
Average Project Size 299
Average Year Built 1981
Source: Meridian Appraisal Group, Inc. field survey Sep-19
Note: The year built for projects with multiple phases is the date of the first phase. The date of rehabilitated projects is
the original year built.
At the projected rental rates, we estimate an average vacancy rate for the subject of 5.00%. There will also be
some collection loss and occasional concessions, estimated at 1.00%. We, therefore, estimate the vacancy and
collection loss at 6.00% of the potential gross income, or $97,546.
Effective Gross Income
Subtracting the vacancy and collection loss from the potential gross income estimate results in an effective gross
income of $1,528,214.
Operating Expenses
Operating expenses are deducted from the effective gross income, resulting in a stabilized net operating income.
The subject's operating expenses are based on expenses for apartment complexes in Florida (summarized at the
end of this section) and the Developer Pro forma. We also considered expenses from the Institute of Real Estate
Management (IREM). The subject's stabilized operating expenses are estimated as follows.
Real Estate and Personal Property Taxes
As discussed in the Assessment and Taxes section, the real estate taxes are estimated at $1,908 per unit, or
$228,904 annually, which includes personal property taxes.
Insurance
The indications we have relied upon are summarized as follows:
19-PIP MERIDIAN APPRAISAL GROUP, INC. 134
INCOME CAPITALIZATION APPROACH (CONT'D)
Insurance
Source
Low
High
Average
Market Rate Comps
$423
$566
$476
Restricted Comps
$374
$642
$497
IREM (Miami - High Rise — Built 1978 to present)
$786
Developer Pro forma
$538
We have given weight to all of the data and have concluded on an expense of $500 per unit, or $60,000 annually.
Water and Sewer
The subject includes trash and pest control in the base rent. The indications we have relied upon are summarized
as follows:
Water and Sewer
Source
Low
High
Average
Market Rate Comps
$145
$853
$441
Restricted Comps
$172
$604
$328
IREM (Miami - High Rise — Built 1978 to present)
$0
Developer Pro forma
$565
The IREM indication includes water and sewer costs for all common area and all units. The Developer Pro
forma does not break-out the individual utilities' expenses to make the same comparison. We have concluded
on an expense of $150 per unit, or $18,000 annually.
Electric and Gas
The subject has landlord -paid electric for the common areas. Tenants pay electric and gas expenses for the
occupied apartments. Similarly, the expense comparables include these expenses for common areas only. The
indications we have relied upon are summarized as follows:
Electric and Gas
Source
Low
High
Average
Market Rate Comps
$124
$372
$217
Restricted Comps
$189
$358
$238
IREM (Miami - High Rise — Built 1978 to present)
$536
Developer Pro forma
Incl. Above
The IREM expense includes electrical and gas cost for common area only and does not include any units. The
Developer Pro forma does not break out the electric and gas expense from total utilities. We have given weight
to all of the data and have concluded on an expense of $250 per unit, or $30,000 annually.
Garbage Service
The subject has landlord -paid trash removal expenses. The indications we have relied upon are summarized as
follows:
Garbage
Source
Low
High
Average
Market Rate Comps
$109
$265
$176
Restricted Comps
$72
$690
$259
IREM (Miami - High Rise — Built 1978 to present)
N/A
Developer Pro forma
Incl. Above
19-PIP MERIDIAN APPRAISAL GROUP, INC.
135
INCOME CAPITALIZATION APPROACH (CONT'D)
The Developer Pro forma does not break out the garbage service expense from total utilities. Note that one of
the restricted expense comparables had an exceptionally high garbage service expense ($690 per unit) last year
that skewed the average somewhat and was not considered typical. We have concluded on an expense of $125
per unit, or $15,000 annually.
The developer pro forma estimates total utilities at $565 per unit and our estimate for total utilities is $525 per
unit.
Cable Service
The subject will not offer bulk cable to the tenants.
Repairs and Maintenance
The subject will experience repairs and maintenance expenses for basic upkeep. Items such as appliance repairs
are not refurbishment expenses, but are normal maintenance for an operating apartment complex. The property
will also experience replacement expenses for items such as air conditioners, appliances, and carpeting, but
these expenses are considered separately. The repairs and maintenance category does not include grounds
maintenance, or maintenance payroll, but does include turnover costs of painting and decorating. The
indications we have relied upon are summarized as follows:
Repairs and Maintenance
Source
Low
High
Average
Market Rate Comps
$196
$574
$396
Restricted Comps
$282
$642
$440
IREM (Miami - High Rise — Built 1978 to present)
$355
Developer Pro forma
$777
The Developer Pro forma includes grounds maintenance and contract services in the repairs and maintenance
category that we have considered separately below. We have given consideration to all of the data and
concluded on an expense of $400 per unit, or $48,000 annually.
Grounds Maintenance
Some of the comparables combine contract services such as pest control with the grounds maintenance. The
indications we have relied upon are summarized as follows:
Grounds Maintenance
Source
Low
High
Average
Market Rate Comps
$409
$728
$518
Restricted Comps
$113
$289
$172
IREM (Miami - High Rise — Built 1978 to present)
$66
Developer Pro forma
Incl. Above
We have concluded on an expense of $150 per unit, or $18,000 annually.
Contract Services
Some of the comparables combine contract services such as pest control with the grounds maintenance. The
indications we have relied upon are summarized as follows:
Contract Services
Source
Low
High
Average
Market Rate Comps
Incl. Above
Incl. Above
Incl. Above
Restricted Comps
$189
$574
$400
IREM (Miami - High Rise — Built 1978 to present)
$1,108
Developer Pro forma
Incl. Above
19-PIP MERIDIAN APPRAISAL GROUP, INC.
136
INCOME CAPITALIZATION APPROACH (CONT'D)
This expense includes pest control, fire protection and occasional repairs and maintenance items such as air-
conditioning maintenance service, appliance repairs, pressure washing and carpet cleaning We have given
weight to all of the data and have concluded on an expense of $250 per unit, or $30,000 annually.
The Developer Pro forma estimates total repairs and maintenance including grounds maintenance and contract
services at $777 per unit. We have estimated total repairs and maintenance including grounds maintenance and
contract services at $800 per unit.
Security
The subject will have manned security. The indications we have relied upon are summarized as follows:
Security
Source
Low
High
Average
Market Rate Comps
Incl. Above
Incl. Above
Incl. Above
Restricted Comps
$207
$237
$222
IREM (Miami - High Rise — Built 1978 to present)
$49
Developer Pro forma
$483
We place most weight on the pro forma and have concluded on an expense of $450 per unit, or $54,000
annually.
Reserves (Allowance for Replacement of Short -Lived Items)
This expense category is a sinking fund used to annualize expenses for periodic replacement of appliances, air
conditioning units, carpeting, resealing of parking areas, etc. Items related to tenant turnover, such as
repainting, have already been accounted for. In actual practice, few apartment owners maintain reserve
accounts; however, it is prudent appraisal and underwriting practice to consider the replacement allowance.
Reserve requirements range from $100 to as high as $400 per unit annually, although most are between $200
and $300 per unit. The market rate expense comparables indicate $0 to $507 per unit. The Developer Pro forma
estimate was $300 per unit. We conclude an expense of $300 per unit, or $36,000.
Management Fee
The management fee estimate is an allocation of a fee to the management company and does not include salaries
and commissions for on -site office personnel. Management fees are typically considered on a percentage of the
effective gross income basis. Based on our conversation with several management companies, larger projects
tend to cost less on a percentage basis than smaller projects, with a typical range of 3% to 6% of the effective
gross income. The indications we have relied upon are summarized in the following chart.
Management Fee
Source
Low
High
Average
Market Rate Comps
$246
$619
$460
Restricted Comps
$351
$719
$561
IREM (Miami - High Rise — Built 1978 to present)
$739
Developer Pro forma
$559
Considering the subject's projected income level, we conclude an expense of 4.25% of EGI, or $64,949 annually,
which equates to $541 per unit.
Salaries and Payroll (On -Site Staff)
This expense category includes the salaries for both office (management and leasing) and maintenance
personnel, along with payroll expenses such as FICA, unemployment tax, workers' compensation, and health
insurance. The indications we have relied upon are summarized in the following chart.
19-PIP MERIDIAN APPRAISAL GROUP, INC. 137
INCOME CAPITALIZATION APPROACH (CONT'D)
Salaries and Payroll
Source
Low
High
Average
Market Rate Comps
$961
$1,526
$1,226
Restricted Comps
$942
$1,823
$1,294
IREM (Miami - High Rise — Built 1978 to present)
$892
Developer Pro forma
$1,250
We have given weight to all of the data and conclude an expense at $1,250 per unit, or $150,000 annually.
Administrative and Office Expenses
This expense includes office supplies, telephone service for the office, postage, licenses, permits, etc. We
included professional service fees such as legal and accounting fees in this category. The indications we have
relied upon are summarized in the following chart.
Administrative and Office
Source
Low
High
Average
Market Rate Comps
$125
$713
$335
Restricted Comps
$241
$895
$554
IREM (Miami - High Rise — Built 1978 to present)
$433
Developer Pro forma
$450
IREM includes marketing within this category. Market rent properties typically have lower administrative costs
than restricted properties. We place most weight on the expense comparables and conclude an administrative
expense of $300 per unit, or $36,000 annually.
Advertising and Promotion
The indications we have relied upon are summarized in the chart which follows.
Advertising and Promotion
Source
Low
High
Average
Market Rate Comps
$117
$425
$232
Restricted Comps
$7
$86
$40
IREM (Miami - High Rise — Built 1978 to present)
N/A
Developer Pro forma
$0
Market rent properties typically have higher advertising cost than restricted properties. The subject is located in
a competitive neighborhood and needs a marketing effort to maintain stabilized occupancy. We place most
weight on the expense comparables and estimate an expense of $200 per unit annually or $24,000.
Total Expenses
Total operating expenses are estimated at $812,853, which equates to $6,774 per unit and $12.03 per square
foot annually.
Total Expenses
Source
Low
High
Average
Market Rate Comps
$5,159
$8,212
$6,903
Restricted Comps
$4,659
$6,294
$5,671
IREM (Miami - High Rise — Built 1978 to present)
$9,268
Developer Pro forma
$5,722
The subject's estimated expenses are within the range of the comparable properties and supportive of the
Developer Pro forma, adjusted for real estate taxes.
19-PIP MERIDIAN APPRAISAL GROUP, INC.
138
INCOME CAPITALIZATION APPROACH (CONT'D)
All five market rate expense comparables provide expense ratios; they are 45%, 32%, 45%, 73% and 38%; the
subject's ratio of 54% is within the range.
Excluding taxes and reserves, the expense comparables indicate a range of $3,494 to $5,552 with an average of
$4,477 per unit; the subject's estimated expenses excluding these items are $4,566 per unit, which is within the
range. The expense comparables indicate expense ratios of 22% and 46% with an average of 30% excluding
taxes and reserves; the subject's ratio of 36% is within the range and considered reasonable.
Net Operating Income
The estimated expenses are deducted from the effective gross income, resulting in a net operating income of
$715,361.
19-PIP MERIDIAN APPRAISAL GROUP, INC. 139
Y9111111xu6worm 1Divaeliiam' meta of.•
Developer Pro Forma.
Rental Income
$1,138,932 $9,491
Ancillary Income
$22,344 $186 $15.52
W/D Income
$12,996 $108
Vac/Coll. Loss
-$56,947 -$475
Total Income
$1,117,325 $9,311
OPERATING EXPENSES
$/UNIT
$/S.F.
R.E. & Personal Prop. Taxes
$96,000
$800
$1.42
Insurance
$64,560
$538
$0.96
Water and Sewer (Utilities)
$67,800
$565
$1.00
Electric and Gas
Incl. Above.
Incl. Above
Incl. Above
Garbage
Incl. Above.
Incl. Above
Incl. Above
Cable
$0
$0
$0.00
Repairs and Maintenance
$93,240
$777
$1.38
Grounds Maintenance
Incl. Above.
Incl. Above
Incl. Above
Contract Services
Incl. Above.
Incl. Above
Incl. Above
Security
$57,960
$483
$0.86
Reserves
$36,000
$300
$0.53
Management
$67,040
$559
$0.99
6.00%
of EGI
Salaries and Payroll
$150,000
$1,250
$2.22
Administrative
$54,000
$450
$0.80
Advertising
$0
$0
$0.00
TOTAL EXPENSES
$686,600
$5,722
$10.16
19-PIP MERIDIAN APPRAISAL GROUP, INC. 140
EXPENSE COMPARABLES - MARKET PROPERTIES
Comparable 1
Comparable 2
Comparable 3
Comparable 4
Comparable 5
LOCATION (County)
Broward
Miami -Dade
Palm Beach
Orange
Broward
YEAR BUILT
1986
2018
2004
2017
1985
NUMBER OF UNITS
280
216
214
272
300
AVERAGE UNIT SIZE
837
910
1,190
1,066
761
12-MONTH TRAILING DATA
August 2019 (T12)
June 19 (T-6 Annualized)
March 2019 (T-12)
March 2019 (T-12)
February 2019 (T-12)
OPERATING EXPENSES
S/UNIT
$/S.F.
S/UNIT
$/S.F.
S/UNIT
$/S.F.
S/UNIT
$/S.F.
S/UNIT
$/S.F.
R.E. & Personal Prop. Taxes
$720,200
$2,572
$3.07
$250,200
$1,158
$1.27
$504,921
$2,359
$1.98
$681,648
$2,506
$2.35
$757,933
$2,526
$3.32
Insurance
$126,469
$452
$0.54
$91,437
$423
$0.47
$121,132
$566
$0.48
$133,844
$492
$0.46
$134,425
$448
$0.59
Water and Sewer
$238,917
$853
$1.02
$31,297
$145
$0.16
$164,078
$767
$0.64
$80,260
$295
$0.28
$43,372
$145
$0.19
Electric and Gas
$43,692
$156
$0.19
$26,872
$124
$0.14
$54,227
$253
$0.21
$101,050
$372
$0.35
$53,395
$178
$0.23
Garbage
$74,335
$265
$0.32
$23,450
$109
$0.12
$29,431
$138
$0.12
$48,268
$177
$0.17
$57,398
$191
$0.25
Cable
$0
$0.00
$0
$0
$0.00
$0
$0
$0.00
$0
$0
$0.00
$0
$0
$0.00
Repairs and Maintenance
(includes redecoration)
$111,132
$397
$0.47
$42,426
$196
$0.22
$122,747
$574
$0.48
$90,889
$334
$0.31
$143,541
$478
$0.63
Grounds and Contract Services
$203,975
$728
$0.87
$117,581
$544
$0.60
$101,321
$473
$0.40
$118,096
$434
$0.41
$122,726
$409
$0.54
Reserves
$0
$0.00
$109,514
$507
$0.56
$64,200
$300
$0.25
$54,400
$200
$0.19
$0
$0.00
Management
$131,425
$469
$0.56
$103,933
$481
$0.53
$132,561
$619
$0.52
$66,778
$246
$0.23
$144,640
$482
$0.63
2.78%
ofEGI
2.99%
ofEGI
3.41%
ofEGI
2.45%
ofEGI
3.01%
ofEGI
Salaries and Payroll
$350,283
$1,251
$1.49
$265,563
$1,229
$1.35
$326,570
$1,526
$1.28
$316,650
$1,164
$1.09
$288,358
$961
$1.26
Administrative
$88,627
$317
$0.38
$26,988
$125
$0.14
$70,845
$331
$0.28
$194,065
$713
$0.67
$57,267
$191
$0.25
Advertising
$46,926
$168
$0.20
$25,166
$117
$0.13
$65,302
$305
$0.26
$115,478
$425
$0.40
$44,130
$147
$0.19
TOTAL EXPENSES
$2,135,981
$7,629
$9.12
$1,114,427
$5,159
$5.67
$1,757,335
$8212
$6.90
$2,001,426
$7,358
$6.90
$1,847,185
$6157
$8.09
Operating Expense Ratio
30%
22%
31 %
46%
23 %
Utilities Included
Water, Sewer, Trash, Pest Control
Trash, Pest Control
Water, Sewer, Trash, Pest Control
Trash, Pest Control
Trash, Pest Control
19-PIP MERIDIAN APPRAISAL GROUP, INC.
141
INCOME CAPITALIZATION APPROACH (CONT'D)
Capitalization
The final step in the direct capitalization technique is to divide the net operating income estimate by a market
derived overall rate of return (OAR), or capitalization rate. The overall capitalization rate is estimated by several
methods. The best method is by analysis of rates reflected by comparable sale properties.
Extraction From Sales
The comparable improved sales included in this appraisal provide good indications of an overall capitalization
rate for the subject property. The capitalization rate indications reflect deductions for an allowance for
replacement of short-lived items (reserves for replacement), so the rate indications are consistent with the
analysis of the subject property. The capitalization rate indications are as follows:
Sale #
Property County Sale Date OAR
1
Sunny Lake
Broward
May-19
5.00%
2
Edge Apartments
Broward
Feb-19
5.77%
3
Vue on 67th
Broward
Oct-18
5.25%
4
Park Plaza
Miami -Dade
Oct-18
5.60%
5
Lombardy
Miami -Dade
Jun-18
6.00%
Average Overall Rate 5.52%
The sales reflect overall capitalization rates of 5.00% to 6.00% with an average of 5.52%. All of the comparables
were purchased for continued apartment use (no condominium conversion sales or fractured condominiums).
We estimate that the subject's rate should be within the range. The data used for the extraction of the rates from
the sales is considered reliable and the best overall rate indications available. Therefore, the comparable
improved sales provide a reliable indication of an overall capitalization rate for the subject.
Investor Surveys
PwC Real Estate Investor Survey
The 2019Q2 PwC Real Estate Investor Survey for the national apartment market indicated a 11 basis point
increase in the overall average cap rate to 5.14% from the prior survey indication of 5.03% and is lower than
the 5.26% indication from the same quarter in the prior year.
8.82%
Overall Cap Rate Trends — National Apartment Market
1{1
8.03%
9.50%
9.00%
8.50%
8.00%a;
7.50%
7.00%u
6.50% To
hil14111.
5.39% 6.00%
°J
H+FFH+fffItFI1TtiI1iTiTj0TTtr1ii4!:
0%
o-ti o-ti o-ti o-ti 0- 0- 0- 0- 0- 0- 0- 0- 0- 0- 0- 0- 0- 0- 0- 0- 0- 0- 0- 0- O-
N,
0, 0� 0� 01 0° 00 y0 y0 �y titi titi titi y5 y� yb yb y5 ti� 10 C� 1 yA yb yb �
1, LO y0 1, ti0 ti0 1, '1, le 1, y0 ti0 1, .ti0 1, 1, 1, .y 1, 1, 1, 1, 1, .1,0
Source: PwC Real Estate Investor Survey
The survey indicated that national apartment market had discount rates that ranged from 5.25% to 10.00% with
an average of 7.11% which is the same compared to the prior quarter and down nine basis points compared to
7.38% in the same quarter in the prior year.
The survey indicated that the national apartment market rental rates changed by a 0.0% to a 4.00% increase
with an average of a 2.50% increase. While operating expenses changed with a range of 2.00% to 4.00% with
an average of 2.90% which is 10 basis points which is the same as the previous quarter.
19-PIP MERIDIAN APPRAISAL GROUP, INC. 142
INCOME CAPITALIZATION APPROACH (CONT'D)
ARA Newmark
The ARA US Multihousing Market Overview for 2019Q2 indicated that capitalization rates nationally dropped
to 5.39% over the previous quarter, which is nine basis points over the prior year. Capitalization rates in major
markets were 67 basis points lower than the national average at 4.7% which is two basis points higher than the
prior quarter.
10%
8%
5%
4%
2%
0%
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
United States — Major Markets Nan -Major Markets
Realty Rates
The Realty Rates 2019Q2 Investor Survey indicated Surveyed Rates for Garden/Suburban Townhouses
nationally of 4.51% to 11.60% with an average of 7.75%. The Equity Dividend Rate ranged from 6.29% to
13.94% with an average of 9.73%. The Debt Coverage Ratio ranged from 1.10 to 1.61 with an average of 1.31.
IRR Annual Multi family Report
The IRR 2018 Annual Multi -family Report for the national apartment market indicated overall average cap
rates for Class A Urban projects of 5.27%, Class B Urban projects of 6.14%, Class A Suburban projects of 5.45%,
and Class B Suburban projects of 6.31%. The South Region apartment market that includes the states in the
southeastern portion of the country indicated overall average cap rates for Class A Urban projects of 5.41%,
Class B Urban projects of 6.27%, Class A Suburban projects of 5.61%, and Class B Suburban projects of 6.50%.
Band of Investment
A third method of extracting an overall capitalization rate is by application of the Band of Investment technique.
This method involves the calculation of a weighted average capitalization rate based on the mortgage constant
(mortgage capitalization rate) and the equity dividend rate (equity capitalization rate). The application of this
technique requires the estimation of certain rates and ratios applicable to the mortgage and equity positions.
We have estimated the subject's permanent financing rate based on our conversations with Barry Krinsky with
Citibank, Tammy Haylock-Moore with JPMorgan Chase and Mike Marra with Wells Fargo. The typical term
is five to 10 years, with the rate tied to the corresponding T-Bill rate. The spread between the T-Bill rate and the
interest rate ranges from 300 to 400 basis points for Class "A" and 350 to 450+ for Class "B" and lower. The
key variables are the location and quality of the product and the financial strength of the developer. The 10 year
T-Bill rate is around 1.5%. The typical loan -to -value ratio is 75%, with about one point charged for loan
origination. Loan amortization periods for properties like the subject have typically been about 25 years, with
balloon payments in five to 10 years.
We conclude a mortgage interest rate of 4.75%, a loan -to -value ratio (M) of 80%, amortization period of 30
years and a balloon payment in five years. These conclusions result in a mortgage constant (Rm) of 6.26%.
19-PIP MERIDIAN APPRAISAL GROUP, INC. 143
INCOME CAPITALIZATION APPROACH (CONT'D)
The second component of the Band of Investment analysis is the estimation of the equity dividend rate for the
subject. Primary consideration was given to an investor survey for the estimation of the equity dividend rate.
Recent investor surveys indicate equity capitalization rates ranging from 7.50% to 10.50%. We have concluded
an equity capitalization rate (Re) of 7.00% for the 20% equity position.
CAPITALIZATION RATE CALCULATION INPUTS
Variables:
- Interest Rate (i )
4 75%
- Loan Ratio (M) 80%
- Equity Ratio (M-1) 20%
- Loan Amortization . . 30
- Term (Balloon Payment) 5
- Points Paid 1
- Payments per Year
- Mortgage Constant Factor (Rm)
- Debt Coverage Ratio 1 (DCR1)
- Equity Return Requirement (Re)
12
6 26%
1.20
7 00%
The mortgage and equity position conclusions for the subject property are considered to be reasonable estimates.
An investor's financial position can substantially influence financing terms and investors have varying yield
expectations.
Based on the parameters concluded above, we calculated an indication of an overall capitalization rate by the
Band of Investment technique as follows:
BAND OF INVESTMENT METHOD
Loan / Equity Ratio
Rate of Return
Weighted Rate
Mortgage Requirement
Equity Requirement
Overall Capitalization Rate Indication
(M) 0.80 x (Rm) 6.26% =
(M-1) 0.20 x (Re) 7.00% =
5.01 %
1.40%
6.41
Debt Coverage Ratio
Another indication of a capitalization rate is derived by application of the Debt Coverage Ratio Formula.
Market data indicates lenders typically require debt coverage ratios ranging from 1.10 to 1.35 for a property like
the subject. The lenders surveyed by the Appraisal Institute Research Department indicate an average debt
coverage ratio of 1.35 for loans of $5 million to $9.999 million. Loans for older properties are typically higher
than the average; therefore, we conclude a debt coverage ratio of 1.20.
An overall capitalization rate by the Debt Coverage Ratio Formula is calculated as follows:
DEBT COVERAGE RATIO METHOD
DCR
Loan Ratio
Mortgage Constant Overall Rate
Debt Coverage Ratio
1.20 x (M)
0.80 x (Rm) 6.26% =
6.01%
Conclusion of Overall Capitalization Rate
The sales reflect overall capitalization rates of 5.00% to 6.00% with an average of 5.52%. The comparable
improved sales provide the most meaningful capitalization rate indications for the subject property. The Band
of Investment analysis indicates a capitalization rate of 6.41%, while the Debt Coverage Formula indicates
6.01%. These mathematically derived rates provide only fair indications of an overall capitalization rate for the
subject property. The investor surveys indicate a range of average rates from 4.70% to 5.39% and provide
support for the rate indications by the comparable improved sales. We conclude an overall capitalization rate
for the stabilized income of 5.00% for the subject property.
19-PIP MERIDIAN APPRAISAL GROUP, INC. 144
INCOME CAPITALIZATION APPROACH (CONT'D)
Value Conclusion Via Income Approach — As If Stabilized
Dividing the subject property's estimated net operating income of $715,361 by the estimated overall
capitalization rate results in a hypothetical market value estimate as if stabilized by the Income Approach of
$14,310,000* (rd.).
Value Conclusion Via Income Approach — As If Complete
As discussed in the apartment Market Overview section of this report, the demand for apartment units in
Miami -Dade County appears to be strong at this time based on the increasing rental rates and low vacancy
rates. We spoke with leasing agents and reviewed CoStar occupancy reports to obtain absorption rate
comparables summarized as follows.
Average Monthly Absorption in Profiled Properties (Miami
-Dade County)
Complex Name
Complex
Type
Avg. # of Units
Absorbed Per
Month
Units Remaining to be Leased to Reach
Stabilized Occupancy (Includes Units
Under Construction and Complete)
Altis at Bonterra
Market
17
Stabilized
Casa Vera Phase II
Market
38
Stabilized
Heights at Coral Town Park
Market
19
Stabilized
Alcazar Village Phase I
Market
34
Stabilized
South Pointe
Market
29
Stabilized
Village at Princeton Groves
Market
216
Stabilized
Red Road Commons
Market
25
Stabilized
Brickell First
Market
33
Stabilized
Modera Miramar
Market
25
Stabilized
Atlantic Doral
Market
21
Stabilized
Park at Kendall
Market
30
Stabilized
Landings at Coral Town Park
Market
26
Stabilized
Source: Field Survey by Meridian Appraisal Group, Inc.
Altis at Bonterra has 314 units located just southwest of Miami Lakes in Hialeah which began delivering its
first buildings in October 2017 and then delivered one or two buildings per month over the next several months
with some delays; this project achieved stabilized occupancy (95% - 298 units) in April 2019 (18 months)
indicating an average absorption rate of 16.6 units per month. Casa Vera Phase II is a recently built market rate
property located in the Kendall area that began delivering units in October 2017 and was completed in January
2018 achieving 100% (150 units) by February 2018 indicating an average absorption rate of 38 units per month.
Alcazar Village Phase I is another recently built market rate property located in south Miami -Dade County that
began delivering units in April 2018 achieving stabilized occupancy of 95% (205 units) by October 15, 2018
indicating an average absorption rate of 34 units per month. Phase II with 72 units is under construction and
will be completed in July 2019 and is projected to be 100% pre -leased upon completion based on the current
waiting list. The Heights at Coral Town Park is a rent comparable that began delivering units in January 2018,
was completed in May 2018 and achieved 93% occupancy (167 units) in September 2018 indicating and average
absorption rate of 18.6 units per month.
In garden and villa -style projects absorption occurs over the course of construction and tenants move into
individual buildings as they are completed. The construction schedule for this product type and any delays
between buildings impacts the absorption rate. Again, typically, a leasing office is opened up on site or a phone
number is advertised approximately three months before the first units are available. The pre -leasing thus
provides enough tenants to occupy the first building when completed and this continues as buildings are
completed; individual buildings receive Certificates of Occupancy (COs) and tenants are moved into individual
buildings as they are completed. With garden and villa -style products, a significant number of units are typically
leased by completion. Low-rise, mid -rise and high-rise projects typically receive one CO for the entire building
or project and absorption does not start until all units are complete.
19-PIP MERIDIAN APPRAISAL GROUP, INC. 145
INCOME CAPITALIZATION APPROACH (CONT'D)
The subject will have two buildings. The first units are expected to be complete in or about December 10, 2020
and all buildings are expected to be complete in or about December 10, 2020. The market rate comparables
indicate a range of 19 to 216 units per month.
The subject property has 120 proposed units for the general population (families). Due to the limited number
of new projects coming on line at the same time and the relatively small size of the subject, we project that the
subject will likely be at or near 100% pre -leased upon completion of construction. Since the subject has only
two proposed buildings that will come on-line at approximately the same time, we project that it will take
approximately three months to get everybody moved -in. Therefore, we estimate an average absorption rate of
approximately 40 units per month to achieve stabilized occupancy upon completion.
The stabilized occupancy for the subject is estimated at 95% (114 units) and since all of the units are contained
in two buildings projected to be delivered at approximately the same time, the occupancy upon completion is
estimated at 0% indicating that approximately 114 units will need to be occupied upon completion in order to
achieve stabilized occupancy; this is projected to require approximately three months. The average market
rental rate is $1,100 per unit. Assuming a straight-line lease -up, we have estimated the rent loss using the
following calculation: ((114 x $1,100) x 3)/2 = $188,100 which we have rounded to $190,000.
We have estimated the rent loss at $190,000. Subtracting the rent loss from the as if stabilized value conclusion
results in a hypothetical market value estimate as if complete by the Income Approach of $14,120,000*.
* Please see the Extraordinary Assumptions and Hypothetical Conditions.
19-PIP MERIDIAN APPRAISAL GROUP, INC. 146
INCOME APPROACH SUMMARY
Market Rate
PROPERTY ID: # Of Units
Unit Type
Unit Size
Rent
Total Rent
Residences at Dr. King Boulevard 120
1/1
563
$1,100
$1,584,000
Miami TOTAL 120
67,560
$1,100
$1,584,000
GROSS POTENTIAL RENTS
$1,584,000
AVG. UNIT SIZE:
563
OTHER INCOME
AVG. INC PER UNIT
$1,100
Washer/Dryer 20% $45.00 per month
$12,960
Cable Income 0% $0.00 per month
$0
Valet Trash 0% $0.00 per month
$0
Water/Sewer Reimbursement 0% $0.00 per month
$0
Ancillary Income 100% $20.00 per month
$28,800
TOTAL OTHER INCOME
$41,760
GROSS ANNUAL INCOME
$1,625,760
LESS COLLECTION LOSS 1.00%
$16,258
LESS VACANCY LOSS 5.00%
$81,288
% OF
$ PER
$ PER
TOTAL VACANCY & COLL. LOSS 6.00%
$97,546
EGI
UNIT
S.F.
EFFECTIVE GROSS INCOME
$1,528,214
100.00%
$12,735
$22.62
LESS OPERATING EXPENSES
FIXED EXPENSES
R.E. & Personal Property Taxes $1,908 PER UNIT
$228,904
14.98%
$1,908
$3.39
Insurance $500 PER UNIT
$60,000
3.93%
$500
$0.89
SUBTOTAL - FIXED EXPENSES $2,408 PER UNIT
$288,904
18.90%
$2,408
$4.28
Water and Sewer $150 PER UNIT
$18,000
1.18%
$150
$0.27
Electric and Gas $250 PER UNIT
$30,000
1.96%
$250
$0.44
Garbage $125 PER UNIT
$15,000
0.98%
$125
$0.22
Cable $0 PER UNIT
$0
0.00%
$0
$0.00
SUBTOTAL - UTILITIES $525 PER UNIT
$63,000
4.12%
$525
$0.93
Repairs and Maintenance $400 PER UNIT
$48,000
3.14%
$400
$0.71
Grounds Maintenance $150 PER UNIT
$18,000
1.18%
$150
$0.27
Contract Services $250 PER UNIT
$30,000
1.96%
$250
$0.44
Security $450 PER UNIT
$54,000
3.53%
$450
$0.80
Reserves for Replacements $300 PER UNIT
$36,000
2.36%
$300
$0.53
SUBTOTAL - MAINTENANCE $1,550 PER UNIT
$186,000
12.17%
$1,550
$2.75
Management 4.25% OF EGI
$64,949
4.25%
$541
$0.96
Salaries and Payroll $1,250 PER UNIT
$150,000
9.82%
$1,250
$2.22
Administrative $300 PER UNIT
$36,000
2.36%
$300
$0.53
Advertising $200 PER UNIT
$24,000
1.57%
$200
$0.36
SUBTOTAL - MANAGEMENT/OFFICE $2,291 PER UNIT
$274,949
17.99%
$2,291
$4.07
TOTAL EXPENSES
$812,853
53.19%
$6,774
$12.03
NET OPERATING INCOME
$715,361
46.81%
$5,961
$10.59
CAPITALIZED AT 5.00%
$14,307,220
AS IF STABILIZED VALUE BY INCOME APPROACH
$14,310,000
$119,250
$211.81
LESS RENT LOSS DURING LEASE -UP
$190,000
AS IF COMPLETE VALUE BY INCOME APPROACH
$14,120,000
19-PIP MERIDIAN APPRAISAL GROUP, INC.
147
RECONCILIATION AND FINAL VALUE ESTIMATE
(AS A MARKET RENTAL PROPERTY)
The purpose of this appraisal was to estimate the hypothetical market value of the leased fee interest in the
subject property as of the effective date of appraisal in the as if complete and as if stabilized conditions. The
value indications by the three traditional approaches to value are as follows:
As If Complete As If Stabilized
Cost Approach
$14,120,000*
$14,310,000*
Sales Comparison Approach
$14,090,000*
$14,280,000*
Income Capitalization Approach $14,120,000*
$14,310,000*
The Cost Approach is not considered to provide a meaningful indication of the market value of the subject
property. Due to the current costs of construction and land costs, and the attainable market rate rental rates in
the market, it may not be financially feasible to construct an apartment project of a similar quality in the subject
location. This approach has been given no weight in our conclusions.
The Income Approach reflects the value of the subject property based upon its estimated income producing
capabilities, with consideration given to current investment requirements. The data applied in this approach,
including rental rates, occupancy levels, operating expenses, and rates of return, was adequately supported from
market data. Rental properties are developed and purchased to serve as income investment properties. An
investor who would purchase the subject property would perform direct capitalization and yield capitalization
analyses, if lease -up were involved. Market participants make decisions to buy and sell based on these
capitalization analyses. Therefore, the Income Approach is based on reliable market data, and this approach is
the most market -oriented approach to value. The Income Approach is considered to provide the best indication
of market value for the subject property, so this approach is given the most emphasis in the reconciliation of the
final value estimate.
The Sales Comparison Approach is a process by which recent sales of similar properties are compared to the
subject property and adjusted for conditions of sale and differences in property characteristics. Adequate
comparable improved sale properties were found and applied to the valuation of the subject property. An
investor considering the purchase of a rental project complex would research the market for similar properties
available for sale and would compare the properties based primarily upon their income producing capabilities.
Therefore, the Sales Comparison Approach mirrors the activities of market participants, and there was sufficient
data available for use as comparable sales. However, the comparisons and the final decision to purchase would
primarily be based on analysis of the economics of leasing the properties. The Sales Comparison Approach is
an important source of overall capitalization rate data applied to the Income Capitalization Approach. The
Sales Comparison Approach is estimated to provide meaningful indications of the market value of the subject
property and is given secondary consideration in the reconciliation of the final value estimate.
In conclusion, we have given the most consideration to the value indications reflected by the Income
Capitalization Approach. The Sales Comparison Approach provides good support for the Income
Capitalization Approach. The Cost Approach was not applicable. The Sales Comparison Approach was the
only relevant approach for the valuation of the vacant land.
We have formed the opinion that the market value of the fee simple interest in the subject site, as is, as vacant
land, based on market conditions prevailing on September 10, 2019, was:
ONE MILLION EIGHT HUNDRED THOUSAND DOLLARS
($1,800,000)*
We have formed the opinion that the hypothetical market value of the leased fee interest in the subject property
as an un-restricted market rent property, as if complete, including $240,000 in personal property, based on
market conditions prevailing on September 10, 2019, was:
19-PIP MERIDIAN APPRAISAL GROUP, INC. 148
RECONCILIATION AND FINAL VALUE ESTIMATE (CONT'D)
FOURTEEN MILLION ONE HUNDRED TWENTY THOUSAND DOLLARS
($14,120,000)*
We have formed the opinion that the hypothetical market value of the leased fee interest in the subject property
as an un-restricted market rent property, as if stabilized, including $240,000 in personal property based on
market conditions prevailing on September 10, 2019, was:
FOURTEEN MILLION THREE HUNDRED TEN THOUSAND DOLLARS
$14,310,000
* Please see the Extraordinary Assumptions and Hypothetical Conditions.
19-PIP MERIDIAN APPRAISAL GROUP, INC. 149
VALUATION SUBJECT TO INCOME AND RENT
RESTRICTIONS
SALES COMPARISON APPROACH
The Sales Comparison Approach is a technique wherein a property is valued by comparison to similar
properties that have recently sold in the marketplace. The Sales Comparison Approach is based upon the
principle of substitution, which states that the value of a property tends to be fixed to the cost of acquiring an
equally desirable substitute property with the same or similar utility.
The Sales Comparison Approach begins with a search for sales of similar properties in the area. We reviewed
recent sales of affordable properties throughout Florida. As will be discussed in the Income Capitalization
Approach, capitalization rates have been stable over the time period covered by the sales.
Factors of comparison considered during the search are project type, quality of construction, age, condition,
location, rental rates and any other physical or economic characteristics that may affect the property's value.
Because like units must be compared, each transaction should be analyzed in terms of appropriate units of
comparison. The units of comparison selected depend on the individual appraisal problem. The sale properties
have been compared to the subject by allocating the sale price to the price per unit. The market gives most
consideration to this unit of comparison. The dates of sale range from December 2017 to April 2019.
Adjustments have been made to each property, in order to make comparisons between the sales and the subject.
In the following section, we briefly discuss each sale and explain the adjustment process. Detailed descriptions
of each sale follow, along with an explanation of the adjustments and a summary chart.
19-PIP MERIDIAN APPRAISAL GROUP, INC. 151
IMPROVED SALES MAP
- La Bei
Fort Myers Lehigh Acres
Big Cypress Natio-nal
Preserve
Everglades-Cty
Port,Salerno
Hobe�Sound�
tilndiantown
Pori Mayaca
fl
Fla m ingo - ..
Boynton Beach
■r
ME In AI
Pam+ . no -Beach
r Lauderdale ' jI
Fort Lauderdale l
Melrose, Park,!i:
rt,W�.aa�
Hallyw�Q d
Pembroli Pines. �s = 0
FI 1::
Richmond Heights
South Miami Heights -
Key Biscayne
��Pzr't'i t i e
Cutler Ridge
Goulds
19-PIP MERIDIAN APPRAISAL GROUP, INC.
152
IMPROVED RESTRICTED SALE 1
LOCATION DATA
Record Number:
Market Type:
Property Name:
Address:
Long/Lat:
MSA:
Location:
Tax Parcel No.:
SALES DATA
Sale Date
Sale Price:
Adjusted Sale Price:
Grantor:
Grantee:
OR Book/Page:
Property Rights:
Conditions of Sale:
Financing:
Verification:
Three Year History:
SITE DATA
Acres:
Square Feet:
Main Frontage:
Amenity Frontage:
Zoning:
Land Use:
Density:
Utilities Included in
Rent:
Project Amenities:
576
Affordable
Riverwalk II
301 SE 6th Avenue
Homestead, Miami -Dade
County
FL 33030
W80.468190/N25.467290
Miami -Fort Lauderdale -
Pompano Beach
E/S SE 6th Ave. at SE 3rd St.
10-7918-001-0130
April 10, 2019
$12,000,000
$12,000,000
YTech-112 Units Homestead
Investments, LLC
Riverwalk II LLC
31407/4741
Leased Fee
Arm's Length
Cash to Seller
Public Records and Deme Mekras, Broker w/MSP Group (756-671-0149) by Mark Davis. June
21, 2019.
No sales previous three years
8.190
96,800
660' SE 6th Avenue
None
R-3
Low -Medium Density Residential
Irregular
Water, Trash Collection, Sewer,
pest control
Laundry, Exercise Fitness,
Outdoor Pools (1), Playground
IMPROVEMENT
Number of Units:
Year Built:
Apartment Type:
Ave. Unit Size:
No. of Stories:
No. of Buildings:
Parking:
Construction:
Unit Amenities:
DATA
112
1995
Garden
864 SF
2
7
Adequate
Concrete Block
Patios/Balconies, Blinds,
Disposal, Dishwasher
UNIT MIX
Unit Type
Number of Units
Size (SF)
Rent per Month
Monthly Rent/SF
1/1 - 60%
28
650
2/2 - 60%
48
850
3/2 - 60%
36
1,050
FINANCIAL DATA
PGI:
Vacancy:
EGI:
Expenses:
NOI:
Price/Unit:
Adj. Price/Unit:
$1,347,805
$37,554
$1,310,251
$521,830
$788,421
$107,143
$107,143
ANALYSIS
Occupancy at Sale:
Capitalization Rate:
NOI per Unit:
Expenses per Unit:
EGIM:
Price/Net SF:
Adj. Price/ Net SF:
97%
6.57%
$7,039
$4,659
9.16
$36.11
$36.11
19-PIP MERIDIAN APPRAISAL GROUP, INC. 153
IMPROVED RESTRICTED SALE 1 (CONT'D)
COMMENTS
Project purchased for continued use as an affordable apartment project. Financial information based on actual 2018
year-end income and expenses adjusted for increase in real estate taxes and includes reserves of $250 per unit.
19-PIP MERIDIAN APPRAISAL GROUP, INC. 154
IMPROVED RESTRICTED SALE 2
LOCATION DATA
Record Number:
Market Type:
Property Name:
Address:
Long/Lat:
MSA:
Location:
Tax Parcel No.:
SALES DATA
Sale Date
Sale Price:
Adjusted Sale Price:
Grantor:
Grantee:
OR Book/Page:
Property Rights:
Conditions of Sale:
Financing:
Verification:
Three Year History:
SITE DATA
Acres:
Square Feet:
Main Frontage:
Amenity Frontage:
Zoning:
Land Use:
Density:
Utilities Included in
Rent:
Project Amenities:
577
Affordable
Santa Clara II
1250 NW 21st Street
Miami, Miami -Dade County
FL 33142
W 8 0.2165 90 /N2 5.795660
Miami -Fort Lauderdale -
Pompano Beach
01-0100-000-0026 & 01-3126-
085-0010
February 5, 2018
$18,200,000
$18,200,000
Santa Clara Apartments, Ltd.
Santa Clara Apartments I, LLC
31274/4560
Leased Fee
Arm's Length Transferred ground lease
Cash to Seller
Public Records and Evan Kristol, Broker w/Marcus & Millichap (954-463-2400) by Mark
Davis. June 21, 2019.
No sales previous three years.
3.290
143,312
300' NW 13th Avenue
None
T6-8-O
Institutional
Irregular
Trash Collection, pest control
Laundry, Exercise Fitness,
Playground, Business Center
IMPROVEMENT DATA
Number of Units: 204
Year Built: 2005
Apartment Type: High-rise
Ave. Unit Size:
No. of Stories:
No. of Buildings:
Parking:
Construction:
Unit Amenities:
832 SF
16
1
Adequate
Concrete Block
Ceiling Fans, Blinds, Disposal,
Dishwasher, Washer/Dryer
Hook-ups
UNIT MIX
Unit Type
Number of Units
Size (SF)
Rent per Month
Monthly Rent/SF
1/1 - 30%
6
608
1/1 - 60%
42
608
2/2 - 30%
19
888
2/2 - 60%
125
888
3/2 - 30%
2
1,057
3/2 - 60%
10
1,057
FINANCIAL DATA
NOI: $1,175,720
Price/ Unit:
Adj. Price/Unit:
$89,216
$89,216
ANALYSIS
Occupancy at Sale:
Capitalization Rate:
NOI per Unit:
Price/Net SF:
Adj. Price/ Net SF:
98%
6.46%
$5,763
$107.22
$107.22
19-PIP MERIDIAN APPRAISAL GROUP, INC. 155
IMPROVED RESTRICTED SALE 2 (CONT'D)
COMMENTS
Project purchased for continued use as an affordable apartment project. Financial information based on 12 month -
trailing income and expenses adjusted for increase in real estate taxes and includes reserves of $250 per unit. Property
was not exposed to the market and sold to the owner of Phase I; both properties are subject to a ground lease on a
Metro Dade Transit site adjoining a train station. Bottom four floors are a parking garage and upper 12 floors are
apartments.
19-PIP MERIDIAN APPRAISAL GROUP, INC. 156
IMPROVED RESTRICTED SALE 3
LOCATION DATA
Record Number:
Market Type:
Property Name:
Address:
Long/Lat:
MSA:
Location:
Tax Parcel No.:
SALES DATA
Sale Date
Sale Price:
Adjusted Sale Price:
Grantor:
Grantee:
OR Book/Page:
Property Rights:
Conditions of Sale:
Financing:
Verification:
Three Year History:
SITE DATA
Acres:
Square Feet:
Main Frontage:
Amenity Frontage:
Zoning:
Land Use:
Density:
Utilities Included in
Rent:
Project Amenities:
573
Affordable
Grand Court North Port
5203 Greenwood Ave
North Port, Sarasota County
FL 34287
W82.222323/N27.041888
North Port -Bradenton -Sarasota
South side of Greenwood
Avenue, west of South Sumter
Boulevard
0999001040
August 15, 2018 Closed
$11,000,000
$11,000,000
Grand Port North Port
Associates, Ltd.
FF North Port, LLC
2018109869
Leased Fee
Arm's Length
Cash to Seller
Public Records and Kevin I. Morris (954-652-4626) by Ken Terrell. June 20, 2019
No other transactions in prior three years.
8.584
373,934
1,397' Greenwood Avenue
Cocoplum Waterway (Canal -
150ft Wide)
RMF
High Density Residential
14.9
Water, Trash Collection, Sewer,
Pest Control
Clubhouse, Exercise Fitness,
Outdoor Pools (1), Playground,
Car Wash, Business Center
IMPROVEMENT DATA
Number of Units: 128
2005
Garden
890 SF
Year Built:
Apartment Type:
Ave. Unit Size:
No. of Stories:
No. of Buildings:
Parking:
Construction:
Unit Amenities:
3
5
248 Spaces, 1.94 Spaces/Unit
Wood Frame with Stucco/Siding
Ceiling Fans, Vaulted Ceilings,
Washer/Dryer Connections,
Dishwasher, Disposal
UNIT MIX
Unit Type
Number of Units
Size (SF)
Rent per Month
Monthly Rent/SF
1/1 - 60%
12
676
$735
$1.09
1/1 - 60%
24
685
$735
$1.07
2/2 - 60%
60
918
$881
$0.96
3/2 - 60%
32
1,073
$1,020
$0.95
FINANCIAL DATA
NOI: $635,800
Price/ Unit:
Adj. Price/Unit:
$85,938
$85,938
ANALYSIS
Occupancy at Sale:
Capitalization Rate:
NOI per Unit:
Price/Net SF:
Adj. Price/ Net SF:
98%
5.78%
$4,967
$96.52
$96.52
19-PIP MERIDIAN APPRAISAL GROUP, INC. 157
IMPROVED RESTRICTED SALE 3 (CONT'D)
COMMENTS
100% at 60% AMI. Additional amenities include a wading pool. Units have outside storage and ceramic tile flooring
in the kitchens, bathrooms and foyers.
Approximately two years after closing, the buyer intends to apply for LIHTC to make renovations and add value to
the property. The sale was not listed. The broker presented it to the buyer.
19-PIP MERIDIAN APPRAISAL GROUP, INC. 158
IMPROVED RESTRICTED SALE 4
LOCATION DATA
Record Number:
Market Type:
Property Name:
Address:
Long/Lat:
MSA:
Location:
Tax Parcel No.:
SALES DATA
Sale Date
Sale Price:
Adjusted Sale Price:
Grantor:
Grantee:
OR Book/Page:
Property Rights:
Conditions of Sale:
Financing:
Verification:
Three Year History:
SITE DATA
Acres:
Square Feet:
Main Frontage:
Amenity Frontage:
Zoning:
Land Use:
Density:
Utilities Included in
Rent:
Project Amenities:
506
Affordable
Noah's Landing
10555 Noah's Circle
Naples, Collier County
FL 34116
W81.690624/N26.166689
Naples -Fort Myers -Punta
Gorda
Northwest quadrant of Collier
Boulevard and Magnolia Pond
Drive
63935000028, -329, and -345
September 29, 2018
$25,000,000
$25,000,000
Vestcor Fund XV, Ltd.
SREIT Noah's Landing, L.L.C.
5561/2184
Leased Fee
Arm's Length
Cash to Seller
Public Records and Steve Moore, Grantor (904 288-7779) by Robert Von. September 20, 2018
No sales previous three years.
15.450
673,002
Noah's Way
None
PUD
Apartments
17.1 units/acre
Water, Trash Collection, Sewer,
Pest Control
Laundry, Clubhouse, Exercise
Fitness, Outdoor Pools (1), Tot
Lot, Car Wash, Business Center
IMPROVEMENT DATA
Number of Units: 264
Year Built: 2002
Apartment Type: Garden
Ave. Unit Size: 826 SF
No. of Stories: 3
No. of Buildings: 11
Parking: 387 open spaces, 1.5/unit
Construction: Concrete Block
Unit Amenities:
Ceiling Fans, Patios/Balconies,
Washer/Dryer Hookups, Storage,
Tile Throughout
UNIT MIX
Unit Type
Number of Units
Size (SF)
Rent per Month
Monthly Rent/SF
1 / 1-60%
158
704
$783
$1.11
2/2-60%
70
925
$936
$1.01
3/2-60%
36
1,167
$1,072
$0.92
FINANCIAL DATA
NOI: $1,316,935
Price/ Unit:
Adj. Price/ Unit:
$94,697
$94,697
ANALYSIS
Occupancy at Sale:
Capitalization Rate:
NOI per Unit:
Price/Net SF:
Adj. Price/ Net SF:
100%
5.27%
$4,988
$114.68
$114.68
19-PIP MERIDIAN APPRAISAL GROUP, INC. 159
IMPROVED RESTRICTED SALE 4 (CONT'D)
COMMENTS
Seller is Vestcor and buyer is Starwood. Sale was part of a portfolio of four properties, two in Jacksonville and two in
Naples, with a total of 1,150 units for a total of $99,625,000. All are operating under Land Use Restriction Agreements.
We were provided with an allocated purchase price for this property. The documentary stamps for the transaction
indicate a sale price of $30,000,000, which is likely due to a re -allocation of the overall sale price among the portfolio
properties. We relied on the price provided by the verifying source.
The real estate taxes were adjusted based on an assumed assessment at 60% of the sale price and a 50% real estate tax
abatement per recent statute. The bulk purchase precludes the property appraiser from using the allocated purchase
price in the re -assessment. The buyer purchased "in -place" income which included some Section 8 voucher holders
paying rents above Housing Credit maximum rents.
19-PIP MERIDIAN APPRAISAL GROUP, INC. 160
IMPROVED RESTRICTED SALE 5
LOCATION DATA
Record Number:
Market Type:
Property Name:
Address:
Long/Lat:
MSA:
Location:
Tax Parcel No.:
SALES DATA
Sale Date
Days on Market:
Sale Price:
Adjusted Sale Price:
Grantor:
Grantee:
OR Book/Page:
Property Rights:
Conditions of Sale:
Financing:
Verification:
Three Year History:
SITE DATA
Acres:
Square Feet:
Main Frontage:
Amenity Frontage:
Zoning:
Land Use:
Density:
Utilities Included in
Rent:
Project Amenities:
445
Affordable
Homestead Colony
800 East Mowry Drive
Homestead, Miami -Dade
County
FL 33030
W80.464900/N25.469130
Miami -Fort Lauderdale -
Pompano Beach
10-7918-001-0100
December 28, 2017
$36,642,600
$36,642,600
Homestead Colony, Ltd.
Partnership
SPT Dolphin Homestead
Colony LLC
30822-1331
Leased Fee
Arm's Length
Cash to Seller
Public Records and Andres Panza, Grantee (202 470-1548) by Robert Von. November 9, 2017.
No sales previous three years.
19.940
868,586
1,354' East Mowry Drive
None
R-3
Low -Medium Density
Residential
Mostly rectangular
Trash Collection, pest control
Sports Court, Laundry,
Clubhouse, Exercise Fitness,
Outdoor Pools (1), picnic tables,
grills
IMPROVEMENT DATA
Number of Units: 312
Year Built: 1995
Apartment Type:
Ave. Unit Size:
No. of Stories:
No. of Buildings:
Parking:
Construction:
Unit Amenities:
Garden
1,065 SF
3
13
634 open spaces, 2.0/unit
Concrete Block
Icemakers, Patios/Balconies,
Washer/Dryer hook-ups, blinds,
outside storage
UNIT MIX
Unit Type
Number of Units
Size (SF)
Rent per Month
Monthly Rent/SF
2/2 - 50%
63
931
$722
$0.78
2/2 - 60%
93
931
$892
$0.96
3/2 - 50%
62
1,199
$833
$0.69
3/2 - 60%
94
1,199
$1,030
$0.86
19-PIP MERIDIAN APPRAISAL GROUP, INC. 161
IMPROVED RESTRICTED SALE 5 (CONT'D)
FINANCIAL DATA ANALYSIS
EGI: $3,224,201 Occupancy at Sale: 99%
Expenses: $1,328,335 Capitalization Rate: 5.17%
NOI: $1,895,866 NOI per Unit: $6,076
Expenses per Unit: $4,257
Price/Unit: $117,444 EGIM: 11.36
Adj. Price/Unit: $117,444 Price/ Net SF: $110.28
Adj. Price/ Net SF: $110.28
COMMENTS
Homestead Colony is under contract as part of a 27 project portfolio. The reported sale price for the portfolio is
$577,000,000. We were provided with the allocated purchase price for the subject, which is shown above. The recorded
sale price was $34,347,800; the price was changed to facilitate financing. Twenty-six of the projects are located in
Florida and one in Texas. All, like the subject are operating under Land Use Restriction Agreements. Actual buyer is
Starwood.
The real estate taxes were adjusted based on an assumed 60% of sale price assessment and a 50% real estate tax
abatement per recent statute. The bulk purchase precludes the property appraiser from using the allocated purchase
price in the re -assessment. The buy purchased "in -place" income which included 36 section 8 vouchers.
19-PIP MERIDIAN APPRAISAL GROUP, INC. 162
IMPROVED
Subject
SALES
Improved Sale 1
ANALYSIS -RESTRICTED
Improved Sale 2
Improved Sale 3
Improved Sale 4
Improved Sale 5
Property
Residences at Dr. King
Boulevard
Riverwalk II
Santa Clara II3rand
Court North Port
Noah's Landing
Homestead Colony
City
County
HUD Median Income
Date
Adjusted Price
Size: Units
Rentable SF
Avg. Unit Size (SF)
Year Built
Unit Mix
Set Asides
Miami
Miami -Dade
$54,900
N/A
N/A
120
67,560
563
2020
1BR
30%, 60%, 80% & Market
Homestead
Miami -Dade
$54,900
Apr-19
$12,000,000
112
96,800
864
1995
1,2&3BR
60%
Miami
Miami -Dade
$54,900
Feb-18
$18,200,000
204
169,740
832
2005
1,2&3BR
30% & 60%
North Port
Sarasota
$70,900
Aug-18
$11,000,000
128
113,968
890
2005
1&2BR
60%
Naples
Collier
$78,300
Sep-18
$25,000,000
264
217,994
826
2002
1,2&3BR
60%
Homestead
Miami -Dade
$54,900
Dec-17
$36,642,600
312
332,280
1,065
1995
2&3BR
50% & 60%
Net Income Multiplier (NIM/
NOI/Unit
NOI/SF
Occupancy at Sale
Capitalization Rate
Price/SF
Price/Unit
18.27
$3,667
$6.51
96%
5.50%
N/A
N/A
15.22
$7,039
$8.14
97%
6.57%
$123.97
$107,143
15.48
$5,763
$6.93
98%
6.46%
$107.22
$89,216
17.30
$4,967
$5.58
98%
5.78%
$96.52
$85,938
18.98
$4,988
$6.04
100%
5.27%
$114.68
$94,697
19.33
$6,076
$5.71
99%
5.17%
$110.28
$117,444
Adjustments - Transaction Characteristics
Property Rights
Financing
Conditions of Sale
Market Conditions
Leased Fee
Conventional
Arm's Length
Current
Leased Fee
Conventional
Arm's Length
Current
Leased Fee
Conventional
Arm's Length
Current
Leased Fee
Conventional
Arm's Length
Current
Leased Fee
Conventional
Arm's Length
Current
Leased Fee
Conventional
Arm's Length
Current
Adjusted $/Unit
N/A
$107,143
$89,216
$85,938
$94,697
$117,444
Adjustments - Property Characteristics
Location
No. of Units
Age/Quality/Cond.
Avg. Unit Size (SF)
Unit Mix
Set Asides
Fair
120
$2,020
563
1 BR
0%
0%
10%
-10%
-35%
0%
0%
0%
5%
-10%
-30%
5%
-5%
0%
5%
-10%
-20%
0%
-5%
0%
5%
-10%
-25%
0%
0%
0%
10%
-15%
-40%
0%
ConcludedAdj./Unit
Adjusted$/Unit
-35%
$69,643
-30%
$62,451
-30%
$60,156
-35%
$61,553
-45%
$64,594
Indicated Value Range/Unit Minimum $60,156 Maximum $69,643 Average $63,679
Conclusion
Per Dwelling Unit 120 $67,000 $8,040,000
Implied Value/S.F. $119.01
Value Conclusion As If Stabilized Rounded to
Less: Lease -Up Cost
Value Conclusion As If Complete
$8,040,000
$140,000
$7,900,000
19-PIP MERIDIAN APPRAISAL GROUP, INC. 163
SALES COMPARISON APPROACH (CONT'D)
ADJUSTMENTS
Typically, sales adjustments are based on direct, paired sales analysis where possible. However, exact
mathematically extracted adjustments are not readily available due to the variety of differences between the
sales. Therefore, the following adjustments were based primarily on the experience and judgment of the
appraisers.
Property Rights Conveyed
All of the transactions involved the sale of the leased fee interest, subject to short-term leases; therefore, no
adjustments are required for property rights conveyed.
Financing
All of the sales involved direct payment of cash to seller, or cash equivalent mortgage terms, so no adjustments
are applied for financing.
Condition of Sale
All of the sales reportedly involved typically motivated buyers and sellers, so no adjustments are necessary.
Market Conditions
This adjustment is often necessary to older sales in order to reflect current market conditions. All of the sales
occurred since December 2017, over which time market conditions have been stable. No adjustment is
considered necessary.
Location
The subject neighborhood is an older area of Miami and is significantly built-up. The neighborhood is the
Liberty City/Little Haiti area, which is one of the lower income areas in the County. There are many necessary
supporting commercial services for residential development and several employment centers are within
proximity to the subject. There is minimal multi -family development (excluding public housing) in the
neighborhood, but demand for affordable housing in the area is high, suggesting that the subject project should
receive market acceptance as a multi -family location.
We have also considered the median incomes in addition to the physical location factors.
Property
HUD Median Income
Subject
$54,900
Riverwalk II
$54,900
Santa Clara II
$54,900
Grand Court North Port
$70,900
Noah's Landing
$78,300
Homestead Colony
$54,900
The HUD median incomes range from $54,900 to $78,300 and average $62,780.
Size/Number of Units
Typically, a unit price of a smaller property tends to be higher than the unit price of a larger one due to the
greater ability of a purchaser to afford the smaller property. The subject has 120 units. The sales range in size
from 112 to 312 and average 204. We have made negative adjustments to the smaller projects and positive
adjustments to the larger projects.
Age/Quality/Condition
The subject is an average to good quality property, built in 2020 and in average condition. The sales range in
year built from 1995 to 2005 and average 2000. The quality of all of the comparables are similar and the
condition of all the comparables are inferior and they were adjusted upward.
Average Unit Size
The subject's average unit size is 563 square feet. The sales range in average unit size from 826 to 1,065 and
average 895. We have adjusted the projects with smaller average unit sizes upwards and adjusted the projects
with larger average unit sizes downward.
19-PIP MERIDIAN APPRAISAL GROUP, INC. 164
SALES COMPARISON APPROACH (CONT'D)
Unit Mix
The subject offers a mix of only one -bedroom units. Larger unit types can command higher rents and more
diverse unit types typically maintain higher occupancy rates; we also considered the affect on rental income by
the number of units allocated to each unit type. Most apartments offer predominantly one and two -bedroom
units, and typically some three -bedroom units with occasional studio units. All of the sales have superior unit
mixes and are adjusted downward.
Set Asides
The subject will set aside 20% (24) of the units for households earning 30% or less of the Area Median Income
(AMI), 63% (75) of the units for households earning 60% or less of AMI, 8% (nine) of the units for households
earning 80% or less of AMI and 10% (12) of the units at market rates. Improved Sale No. 2 had an inferior set -
aside structure compared to the subject and was adjusted upward. The other sales had similar overall average
set -asides and did not require an adjustment.
Value Conclusion — As If Stabilized
After applying adjustments, the improved sales reflect values of to $60,156 to $69,643 per unit, with an average
of $63,679. We conclude a value of $67,000 per unit for the subject. The subject has 120 units, so the market
value estimate as is/stabilized by the dwelling unit analysis is $8,040,000* (rd.).
The comparable sales have NOI multipliers of 15.22 to 19.33. The implied NIM based on the subject's value
conclusion is 18.27, which is within the range indicated by the sales.
Value Conclusion — As If Complete
In the Income Approach we estimated a rent loss of $140,000 prior to reaching stabilized occupancy.
Subtracting the estimated rent loss from the as if stabilized value conclusion results in a hypothetical market
value estimate as if complete via the Sales Comparison Approach of $7,900,000*.
* Please see the Extraordinary Assumptions and Hypothetical Conditions.
19-PIP MERIDIAN APPRAISAL GROUP, INC. 165
INCOME CAPITALIZATION ANALYSIS
We have estimated the value of the subject property as an affordable project with rent and income restrictions.
The subject will set aside 20% (24) of the units for households earning 30% or less of the Area Median Income
(AMI), 63% (75) of the units for households earning 60% or less of AMI, 8% (nine) of the units for households
earning 80% or less of AMI and 10% (12) of the units at market rates.
Direct capitalization of a projected net operating income stream is applied to estimate the market value of the
subject property as though stabilized. The annual stabilized net operating income is divided by a market derived
overall capitalization rate to indicate a value estimate.
For this analysis, we considered both seasonal and cyclical influences on income and expenses.
Restricted Rental Rate Analysis
We have chosen the following comparable properties for the estimation of attainable restricted rents.
Occupancy - Restricted Comps
City
Apartment Project
Type
# Units
Year Built
Occupancy
# Occupied
Stabilized Projects
Miami
Miami
Miami
Miami
Miami
Miami
The Villages I
Audrey M. Edmonson Transit Village
Seventh Avenue Transit Village II
Northpark at Scott Carver
Corinthian
Hibiscus Pointe
Restricted
Restricted
Restricted
Restricted
Restricted
Restricted
150
76
100
177
126
212
2017
2015
2017
2012
2007
2004
100%
100%
100%
96%
100%
99%
150
76
100
170
126
210
Projects in Lease -up, Under Construction, Confidential, or Unwilling to Participate in Survey
N/A
Total Units 841
832
Less: Confidential Occupancy or Unstabilized Occupancies
0
0
Total Stabilized Units Responding to Survey
841
832
Overall Occupancy Rate (Stabilized Projects) 841 99%
832
Average Project Size 140
Average Year Built 2012
Source: Meridian Appraisal Group, Inc. field survey Sep-19
Note: The year built for projects with multiple phases is the date of the first phase. The date of rehabilitated projects is the original
ear built.
The restricted rate projects are 96% to 100% occupied, with a weighted average of 99%; all are stabilized.
Detailed write-ups of the comparable restricted rate rental projects used in the analyses follow.
19-PIP MERIDIAN APPRAISAL GROUP, INC. 166
RESTRICTED RENT COMPARABLES MAP WITH ONE -MILE RING
II II u
88THLST
V 833IT
N 82N D ST�-- o n'
'-
—1 N
_I zW BC,ST
- L_ NW 79T HH E
Cmhian
w>nt
NW 77TH TE lIMII
'Ln F H
58 wl w I ry
I -
171ST ST
817
=NW
u P4EI 68TH .T
NW 55TH T
M'V 5TH ST
52ND ST
p
NV SOTH ST
WV 47TH ST
46TH ST
NW 4 5T ST I
A'I REPO TR XP'Y
No 49TH ST
NW 488T�
NW 88TH ST
ST
TH TER
NW PITH ST
4
1-
11 z
NWI�
78TH 1 f
77TH ST u
F• 2 F-
N' 76TH II 1 ER1TI ,. ~�i- �
76TH ST�� r - r 1F;
z{f „JI =�x{2 0 L.
= l a J—� p �� — t L n a c r
,17_ I- 1 ern
w-1—_� w w
4
iTr L VV4IL
NW 83RD ST
87TH ST II' ---
NW 85T� STREET RD -
12'�C
N N
2
a, L•
1 n=
NW 83RD TER
tI
NW 71 ST
=EMI NW 69T
NW
N1N 16TH A
Hibiscus Pointe
Subject Property
■
.NW 589-HST
2
NW 69Tj-lid
NW 4
AllepatLafi ■
39TH-ST
MN 69TH ST Th. Villages
UbertySglrare
SSTH TER
fr1L I
Pay V= Park
ft
0 600 1200 1800 2400 3000
19-PIP MERIDIAN APPRAISAL GROUP, INC.
167
SUBJECT PROPERTY - RESTRICTED
LOCATION DATA
Record Number:
Market Type:
Property Name:
Address:
Long/Lat:
MSA:
Tax Parcel No.:
PROPERTY DATA
Apartment Type:
Construction Type:
Year Built:
Number of Units:
Condition:
Date Surveyed:
Surveyed by:
Number of Stories:
Number of Buildings:
Parking:
Garages:
Occupancy
Concessions:
Rental Premiums:
Utilities Included:
Project Amenities:
2080
Mixed Income
Residences at Dr. King Blvd.
Dr. King Boulevard
Miami, Miami -Dade County
FL 33147
W80.483850/N25.845510
Miami -Fort Lauderdale -
Pompano Beach
01-3114-035-2000; 2020 & 2030;
01-3114-035- 027-1210, 1220,
1230, 1240, 1250 & 1290
Mid -rise
CCB
2020
120
Good
September 5, 2019
Mark Davis
5&7
2
132 spaces
None
Proposed
None
None
Trash Collection, Pest Control
Exercise Fitness, Clubhouse, Unit Features: Ceiling Fans, Blinds, Dishwasher,
Laundry
Disposal, W/d Hook-ups
UNIT MIX
(Unit Type
Number of Units
Size (SF)
Rent per Month
Monthly Rent Per SF
Utilities Allowance
1/1 - 30%
24
563
$394
$0.70
$82
1/1 - 60%
75
563
$871
$1.55
$82
1/1 - 80%
9
563
$1,100
$1.95
$82
1/1 - Market
12
563
$1,100
$1.95
$82
Averages
120
563
$816
$1.45
COMMENTS
This is a proposed affordable apai tiuent project for the general population (family) with income and rent restrictions on 108
units and the remaining 12 units being un-restricted. The above rental rates were estimated by the appraisers at the
maximum 2019 levels. The above unit size reflects an average for the 23 similar one -bedroom floor plans.
19-PIP MERIDIAN APPRAISAL GROUP, INC. 168
RESTRICTED RENT COMPARABLE 1
LOCATION DATA
Record Number: 536
Market Type: Affordable
Property Name: The Villages I
Address: 773 NW 67th Street
Miami, Miami -Dade County
FL 33150
Long/Lat: W80.209400/N25.836100
MSA: Miami -Fort Lauderdale -
Pompano Beach
Tax Parcel No.: 01-3114-010-0020
PROPERTY DATA
Apartment Type: Mid -rise
Construction Type: CCB
Year Built: 2017
Number of Units: 150
Condition: Good
Date Surveyed: August 30, 2019 (786-310-7281)
Surveyed by: Mark Davis
Number of Stories: 8
Number of Buildings: 2
Parking: Good
Garages: None
Occupancy 100%
Concessions: None
Rental Premiums: None
Utilities Included: Water, Trash Collection, Sewer, Pest Control
Project Amenities: Outdoor Pools (1), Exercise Unit Features: Patios/balconies, Ceiling Fans,
Fitness, Clubhouse, Laundry, Microwaves, Washer/dryer Hook -
Playground, Picnic Area, Library ups, Dishwasher, Blinds
UNIT MIX
Unit Type
Number of Units
Size (SF)
Rent per Month
Monthly Rent Per SF
Utilities Allowance
1/1 - 33%
1
723
$465
$0.64
$57
1/1 - 50%
1
723
$735
$1.02
$57
1/1 - 60%
2
723
$894
$1.24
$57
2/2 - 33%
5
1,076
$560
$0.52
$67
2/2 - 50%
4
1,076
$884
$0.82
$67
2/2 - 60%
79
1,076
$1,075
$1.00
$67
3/2 - 33%
2
1,196
$648
$0.54
$75
3/2 - 50%
4
1,196
$1,023
$0.86
$75
3/2 - 60%
52
1,196
$1,243
$1.04
$75
Averages
150
1,113
$1,095
$0.98
COMMENTS
The above rental rates are at the 2019 maximum rates. The above unit sizes are averages for each unit type.
19-PIP MERIDIAN APPRAISAL GROUP, INC. 169
RESTRICTED RENT COMPARABLE 2
LOCATION DATA
Record Number: 1261
Market Type: Affordable
Property Name: Audrey M. Edmonson Transit
Village
Address: 6175 NW 6th Court
Miami, Miami -Dade County
FL 33127
Long/Lat: W80.207700/N25.831530
MSA: Miami -Fort Lauderdale -
Pompano Beach
Tax Parcel No.: 01-3113-040-0730; 0770; 0790;
0800 & 0880
PROPERTY DATA
Apartment Type: High-rise
Construction Type: CCB
Year Built: 2015
Number of Units: 76
Condition: Good
Date Surveyed: August 28, 2019 (305-783-3768)
Surveyed by: Mark Davis
Number of Stories: 9
Number of Buildings: 1
Parking: 81 spaces
Garages: Parking Garage
Occupancy 100%
Concessions: None
Rental Premiums: None
Utilities Included: Water, Trash Collection, Sewer, Pest Control
Project Amenities: Outdoor Pools (1), Exercise Unit Features:
Fitness, Clubhouse, Laundry,
Computer Room/library
Patios/balconies, Ceiling Fans,
Microwaves, Washer/dryer Hook-
ups, Blinds, Dishwasher, Disposal
UNIT MIX
Unit Type
Number of Units
Size (SF)
Rent per Month
Monthly Rent Per SF
Utilities Allowance
1/1 - 30%
2
720
$405
$0.56
$71
1/1 - 60%
9
720
$882
$1.23
$71
2/2 - 30%
6
957
$485
$0.51
$87
2/2 - 60%
35
957
$1,057
$1.10
$87
3/2 - 30%
4
1,057
$559
$0.53
$101
3/2 - 60%
20
1,057
$1,220
$1.15
$101
Averages
76
954
$991
$1.04
COMMENTS
This is an affordable general population apartment project with income and rent restrictions. The above affordable rental
rates are at the 2019 maximum rates. This project is formerly known as Seventh Avenue Transit Village I. This is the first
of two phases.
19-PIP MERIDIAN APPRAISAL GROUP, INC. 170
RESTRICTED RENT COMPARABLE 3
LOCATION DATA
Record Number: 1220
Market Type: Affordable
Property Name: Seventh Avenue Transit Village
II
Address: 668 NW 62nd Street
Miami, Miami -Dade County
FL 33127
Long/Lat: W80.208080/N25.831980
MSA: Miami -Fort Lauderdale -
Pompano Beach
Tax Parcel No.: 01-3113-106-0010
PROPERTY DATA
Apartment Type: High-rise
Construction Type: CCB
Year Built: 2017
Number of Units: 100
Condition: Good
Date Surveyed: August 28, 2019 (305-783-3768)
Surveyed by: Mark Davis
Number of Stories: 9
Number of Buildings: 1
Parking: 120 spaces
Garages: Parking garage
Occupancy 100%
Concessions: None
Rental Premiums: Washer/Dryer - $40
Utilities Included: Trash Collection, Pest Control
Project Amenities: Outdoor Pools (1), Exercise
Fitness, Clubhouse, Laundry,
Computer Room/library
Unit Features:
Patios/balconies, Ceiling Fans,
Microwaves, Washer/dryer Hook-
ups, Blinds, Dishwasher, Disposal
UNIT MIX
(Unit Type
Number of Units
Size (SF)
Rent per Month
Monthly Rent Per SF
Utilities Allowance
1/1 - 33%
10
652
$457
$0.70
$67
1/1 - 60%
90
652
$886
$1.36
$67
Averages 100 652 $843 $1.29
COMMENTS
This is an affordable apartment project with income and rent restrictions. The project opened at the end of August 2017
and was 100% preleased getting everybody moved in within one month. The above rental rates are at the 2019 maximum
levels.
19-PIP MERIDIAN APPRAISAL GROUP, INC. 171
RESTRICTED RENT COMPARABLE 4
LOCATION DATA
Record Number:
Market Type:
Property Name:
Address:
Long/Lat:
MSA:
Tax Parcel No.:
PROPERTY DATA
Apartment Type:
Construction Type:
Year Built:
Number of Units:
Condition:
Date Surveyed:
Surveyed by:
Number of Stories:
Number of Buildings:
Parking:
Garages:
Occupancy
Concessions:
Rental Premiums:
Utilities Included:
Project Amenities:
1686
Affordable
Northpark at Scott Carver
2341 NW 74th Street
Miami, Miami -Dade County
FL 33147
W80.235680/N25.842030
Miami -Fort Lauderdale -
Pompano Beach
30-3110-079-0010 et al
Garden
CCB
2012
177
Average to good
August 28, 2019 (305-826-9160)
Mark Davis
1,2 &3
29
Adequate
None
96%
None
None
Water, Trash Collection, Sewer, Pest Control
Outdoor Pools (1), Exercise Unit Features:
Fitness, Clubhouse, Laundry,
Sports Court, Tot Lot, Picnic,
WiFi, Business Center
Patios/balconies, Ceiling Fans,
Washer/dryer, Microwaves, W/D
Hook-ups, Dishwasher, Blinds,
Disposal
UNIT MIX
(Unit Type
Number of Units
Size (SF)
Rent per Month
Monthly Rent Per SF
Utilities Allowance
1/1 - Mkt.
8
684
$1,372
$2.01
$76
1/1 - 60%
25
684
$877
$1.28
$76
2/1 - Mkt.
31
890
$1,497
$1.68
$108
2/1 - 60%
50
890
$1,036
$1.16
$108
2/1.5 - Mkt.
15
976
$1,497
$1.53
$108
2/1.5 - 60%
23
976
$1,036
$1.06
$108
3/2 - Mkt.
2
1,224
$1,809
$1.48
$145
3/2 - 60%
1
1,224
$1,176
$0.96
$145
3/2.5 - Mkt.
14
1,298
$1,809
$1.39
$145
3/2.5 - 60%
8
1,298
$1,176
$0.91
$145
Averages
177
926
$1,226
$1.32
COMMENTS
Project has a total of 354 units including 177 Public Housing units, 107 affordable units (60% AMI) and 70 market rate
units. The Public Housing units have rental rates based on 30% of the tenant's income with the rest being subsidized.
The 60% units are currently 96% occupied (100% pre -leased) and the market rate units are at 97% occupied. The above
rates are at the 2019 max rates.
19-PIP MERIDIAN APPRAISAL GROUP, INC. 172
RESTRICTED RENT COMPARABLE 5
LOCATION DATA
Record Number: 753
Market Type: Affordable
Property Name: Corinthian
Address: 7705 NW 22nd Avenue
Miami, Miami -Dade County
FL 33147
Long/Lat: W80.232590/N25.845110
MSA: Miami -Fort Lauderdale -
Pompano Beach
Tax Parcel No.: 30-3110-077-0010
PROPERTY DATA
Apartment Type: Garden
Construction Type: CCB
Year Built: 2007
Number of Units: 126
Condition: Average
Date Surveyed: August 28, 2019 (305-693-0088)
Surveyed by: Mark Davis
Number of Stories: 3
Number of Buildings: 3
Parking: Adequate
Garages: None
Occupancy 100%
Concessions: None
Rental Premiums: Washer/Dryer - $65
Utilities Included: Water, Trash Collection, Sewer, Pest Control
Project Amenities: Outdoor Pools (1), Exercise Unit Features: Patios/balconies, Ceiling Fans,
Fitness, Clubhouse, Laundry, Washer/dryer Hook-ups,
Playground, Picnic Area, Gated Dishwasher, Blinds, Disposal
UNIT MIX
Unit Type
Number of Units
Size (SF)
Rent per Month
Monthly Rent Per SF
Utilities Allowance
1/1 - 30%
4
630
$412
$0.65
$64
1/1 - 60%
23
630
$889
$1.41
$64
2/2 - 30%
9
784
$502
$0.64
$70
2/2 - 60%
52
784
$1,074
$1.37
$70
3/2 - 30%
5
1,037
$588
$0.57
$72
3/2 - 60%
30
1,037
$1,249
$1.20
$72
4/2 - 30%
1
1,155
$659
$0.57
$78
4/2 - 60%
2
1,155
$1,396
$1.21
$78
Averages
126
830
$1,003
$1.21
COMMENTS
85% of the total units are restricted at the 60% AMI. The above current rental rates are at the 2019 maximum levels.
19-PIP MERIDIAN APPRAISAL GROUP, INC. 173
RESTRICTED RENT COMPARABLE 6
LOCATION DATA
Record Number: 1046
Market Type: Affordable
Property Name: Hibiscus Pointe
Address: 1320 NW 79th Street
Miami, Miami -Dade County
FL 33147
Long/Lat: W80.218750/N25.845520
MSA: Miami -Fort Lauderdale -
Pompano Beach
Tax Parcel No.: 30-3111-064-0010
PROPERTY DATA
Apartment Type: Garden
Construction Type: CCB
Year Built: 2004
Number of Units: 212
Condition: Average
Date Surveyed: August 28, 2019 (305-835-9627)
Surveyed by: Mark Davis
Number of Stories: 3
Number of Buildings: 9
Parking: Adequate
Garages: None
Occupancy 99%
Concessions: None
Rental Premiums: Washer/Dryer - $39 (1/1) & $45
Utilities Included: Water, Trash Collection, Sewer, Pest Control
Project Amenities: Outdoor Pools (1), Exercise Unit Features: Patios/balconies, Ceiling Fans,
Fitness, Clubhouse, Laundry, Washer/dryer Hook-ups,
Playground, Gated Dishwasher, Blinds, Disposal
UNIT MIX
Unit Type
Number of Units
Size (SF)
Rent per Month
Monthly Rent Per SF
Utilities Allowance
1/1 - 60%
66
700
$893
$1.28
$60
2/2 - 60%
80
924
$1,074
$1.16
$70
3/2 - 60%
66
1,154
$1,241
$1.08
$80
Averages 212 926 $1,070 $1.16
COMMENTS
100% of the total units are restricted at the 60% AMI. The above current rental rates are all at the 2019 maximum levels.
19-PIP MERIDIAN APPRAISAL GROUP, INC. 174
INCOME CAPITALIZATION ANALYSIS (CONT'D)
Rental Rate Analysis
Area Median Income (AMI)
The Housing Credit maximum rental rates are based on the area's median income and are gross rental rates,
thus including an allowance for utilities. The 2019 Area Median Income for the subject's MSA is $54,900. This
level is higher than the prior year's indication of $52,300, resulting in an increase in the maximum allowable
rental rates for 2019.
The 2018 Area Median Income for the subject's MSA ($52,300) was higher than the 2016 AMI of $48,100, the
2015 AMI of $49,900, the 2014 AMI of $48,400, the 2013 AMI of $49,000 and the 2012 level of $52,600. Note
that although the 2016 AMI decreased from 2015, the 2016 maximum allowable rental rates increased slightly
from 2015. These are adjusted figures subject to annual caps and other factors as determined and calculated by
HUD.
The maximum allowable rental rates peaked in 2010 and then steadily decreased in 2011, 2012 and 2013 before
increasing in 2014 (but not back up to the 2010 levels) before decreasing slightly in 2015. The 2016 maximum
allowable rental rates increased for the first time to levels slightly higher than the 2010 maximum rates. The
2017 AMI was higher than the 2016 AMI and resulted in an increase in the rental rates. All six comparable
projects have increased their rental rates to the new 2019 maximum allowable rents.
Maximum Gross Restricted Rental Rates
The 2019 Housing Credit Maximum Restricted Rental Rates for the subject's set asides are summarized as
follows:
2019 Miami -Dade County
Maximum Gross Restricted Rental Rates
Non-HERA
30% AMI
60% AMI
80% AMI
Studio
$444
$889
$1 186
1 BR
$476
$953
$1 271
2 BR
$5 72
$1 144
$1 526
3 BR
$660
$1 321
$1 762
4 BR
$73 7
$1 474
$1 966
5 BR
$813
$1 627
$2 170
The maximum rental rates are gross rental rates, thus include an allowance for utilities.
Utilities Allowances
The subject will include trash and pest control expenses in the rental rates.
We have calculated the utilities allowances for the subject property using a chart from the local Housing
Authority, included in the Addenda.
The utilities allowances are deducted from the maximum gross rental rates in order to determine the maximum
net rental rates as restricted by the Housing Credit program.
Maximum Allowable Net Rent Calculations
The following chart illustrates the 2019 maximum net rent calculations for the subject property.
Maximum Allowed Net Rent Calculations
�
Unit Type
Set Aside
# Of Units
Gross Rent
U/A
Net Rent
1 / 1
30%AMI
24
$476
$82
$394
1/1
60% AMI
75
$953
$82
$871
1/1
80%AMI
9
$1,271
$82
$1,189
1/1
Market
12
$1,100
$1,100
Total/Avg.
120
$896
$74
$822
Adjustments
The impact of utilities included in the rents is inherent in the utilities allowances, which are added to the net
rents of the comparables.
19-PIP MERIDIAN APPRAISAL GROUP, INC. 175
INCOME CAPITALIZATION ANALYSIS (CONT'D)
Within restricted rate projects, we have found that rental rates are less sensitive to the size of the units than they
are to the overall appeal of the complex. Thus, no adjustment is made for size and less consideration has been
given to the rental rate per square foot. However, we have found that projects with larger units in similar areas
typically are more capable of commanding the maximum rental rates and have higher occupancy rates.
Similarly, the number of bathrooms in the units is not typically an adjustment, but can impact marketability
and occupancy.
In the analysis, we considered the occupancy rates in the comparable complexes in order to assess the market's
acceptance of the project's rental rates.
One -Bedroom Analysis — 60% AMI
# Complex Name
One -Bedroom Restricted Comparables Summary
Unit T ype Set Aside Net Rent U/A Gross Rent U/Services Size/SF Net Rent/SF
1 The Villages I 1/1 - 60% 60% AMI $894 $57 $951 w,s,t,p 723 $1.24
2 Audrey M. Edmonson Transit Vii 1/1 - 60% 60% AMI $882 $71 $953 w,s,t,p 720 $1.23
3 Seventh Avenue Transit Village11 1/1 - 60% 60% AMI $886 $67 $953 t,p 652 $1.36
4 Northpark at Scott Carver 1/1 - 60% 60% AMI $877 $76 $953 w,s,t,p,w/d 684 $1.28
5 Corinthian 1/1 - 60% 60%AMI $889 $64 $953 w,s,t,p 630 $1.41
6 Hibiscus Pointe 1/1 - 60% 60% AMI $893 $60 $953 w,s,t,p 700 $1.28
Average
2019 Max 60% AMI Gross Rent
$887 $66 $953 685 $1.30
$953
Residences at Dr. King Boulevat 1/1 30% AMI $394 $82 $476 t,p 563 $0.70
Residences at Dr. King Boulevat 1/1 60% AMI $871 $82 $953 t,p 563 $1.55
Based upon this analysis, we estimate that the subject will attain a gross rent of $953; deducting $82 for the
utilities allowance results in a restricted rent for the subject's one -bedroom units as follows:
One -Bedroom Rent Conclusion - Restricted
Unit Type
Set Aside
Unit Size Rental Rate Rental Rate/SF
1/1
30% AMI
563
$394
$0.70
1/1
60% AMI
563
$871
$1.55
Our estimate is equal to the 2019 maximum allowable rent.
Subject Units Set Aside for Tenants with Incomes Below 60% AMI
The subject will have 20% of its units (24 units) set aside for tenants with incomes at or below 60% of the Area
Median Income (AMI). Some of the comparables offer units at set asides below the 50% AMI level; all are
reported to have rents at the maximum set aside rates. We estimate that the subject's units will achieve the
maximum allowable rents, also.
Subject Units Set Aside for Tenants with Incomes Above 60% AMI
The subject will have nine units set aside for tenants with incomes above 60% of the AMI. We estimated the
market rents for the subject in a previous section. The subject will utilize one set asides above 60% AMI at the
80% AMI. As the set aside increases, the variance between the affordable rents and market rents decreases and
at some point, market rents may be less than the affordable rental rate. The following analysis compares the
market rental rates to the affordable rental rates for the set aside above 60%.
Market vs. 80% AMI
The subject will have 7.5% of its units (nine) set aside for tenants with incomes at or below 70% of the AMI.
The following chart compares the market rent and the maximum allowable net 80% AMI rent for the subject
property:
Unit Type
Market vs 80% AMI Comparison
Market Rent
80% AMI Difference
1/1
$1,100
$1,189 -8%
19-PIP MERIDIAN APPRAISAL GROUP, INC. 176
INCOME CAPITALIZATION ANALYSIS (CONT'D)
The maximum net (gross rent less utility allowance) 80% AMI rents are 8% below the estimated attainable
market rents at the maximum allowed 80% AMI level. However, the 80% income band has a favorable
demographic profile making affordable units available to potential tenants that were previously over qualified
at the higher AMI levels. Therefore, we estimate that the subject will not be able to attain the maximum 80%
AMI rents.
Potential Gross Rental Income As Restricted
Therefore the subject's estimated potential gross income as restricted is estimated at $1,174,572.
ViTIMNIV7iirlirWirrIRI
Unit Type
Set Aside
No. Units $/Month Total Annual Rent
1/1
30% AMI
24
$394
$113,472
1/1
60% AMI
75
$871
$783,900
1/1
80%AMI
9
$1,100
$118,800
1/1
Market
12
$1,100
$158,400
Total/Avg.
120
$816
$1,174,572
Other Income
Washer/Dryer Income
The subject developer will offer full-size washer/dryer appliances to rent to tenants. We project a participation
rate of 20% and a monthly premium of $45.00, or $12,960 annually.
Rental Premiums
At many apartments and rental projects, rental premiums are paid tenants for features such as top floor,
conservation area frontage, water frontage, etc. As restricted, we expect no additional premiums.
Ancillary Income
Apartments typically earn additional income in the form of vending income, late charges, pet deposits, forfeited
security deposits, etc. Market data indicates a typical ancillary income range of about 2% to 5% of the gross
rental income. We estimate ancillary income at $20.00 per unit per month, or $28,800 annually. This is about
2.5% of the potential gross rental income.
Subtotal of Other Income
The total for all of the Other Income categories is $41,760.
Potential Gross Income
Potential gross income is estimated at $1,216,332.
Vacancy and Collection Loss
The following summarizes the occupancy data for the comparables.
19-PIP MERIDIAN APPRAISAL GROUP, INC. 177
INCOME CAPITALIZATION ANALYSIS (CONT'D)
Occupancy - Restricted Comps
City
Apartment Project
Type
# Units
Year Built
Occupancy
# Occupied
Stabilized Projects
Miami
The Villages I
Restricted
150
2017
100%
150
Miami
Audrey M. Edmonson Transit Village
Restricted
76
2015
100%
76
Miami
Seventh Avenue Transit Village II
Restricted
100
2017
100%
100
Miami
Northpark at Scott Carver
Restricted
177
2012
96%
170
Miami
Corinthian
Restricted
126
2007
100%
126
Miami
Hibiscus Pointe
Restricted
212
2004
99%
210
Projects in Lease -up, Under Construction, Confidential, or Unwilling to Participate in Survey
N/A
Total Units
Less: Confidential Occupancy or Unstabilized Occupancies
Total Stabilized Units Responding to Survey
Overall Occupancy Rate (Stabilized Projects)
Average Project Size
Average Year Built
841
0
841
841
140
2012
99%
832
0
832
832
Source: Meridian Appraisal Group, Inc. field survey Sep-19
Note: The year built for projects with multiple phases is the date of the first phase. The date of rehabilitated projects is the original
year built.
The restricted rate projects are 96% to 100% occupied, with a weighted average of 99%; all are stabilized.
We estimate an average occupancy rate for the subject over the holding period, at the projected attainable rents,
of 96.0%. We estimate vacancy at 4.00% and collection loss at 1.00%. Total vacancy and collection is estimated
at $60,817.
Effective Gross Income
Subtracting the vacancy and collection loss from the potential gross income estimate results in an effective gross
income of$1,155,515.
Operating Expenses
Operating expenses are deducted from the effective gross income, resulting in a stabilized net operating income.
Some expenses will change from our estimates based upon the subject's operation as a market rental property,
as explained below. We have also relied on operating information from other restricted rent projects (presented
at the end of this section) and IREM's indications for affordable apartments.
Real Estate and Personal Property Taxes
As discussed in the "Assessment and Taxes" section, we estimate taxes, as a restricted project, at $1,083 per
unit, or $129,975 annually.
Insurance
The indications we have relied upon are summarized as follows:
Insurance
Source
Low
High
Average
Restricted Comps
$374
$642
$497
IREM (Section 42 — Region 4)
$254
Developer Pro forma
$538
We have considered all of the data and have concluded on an expense of $500 per unit, or $60,000 annually.
Water and Sewer
The subject will include trash and pest control in the base rent. The indications we have relied upon are
summarized as follows:
19-PIP MERIDIAN APPRAISAL GROUP, INC.
178
INCOME CAPITALIZATION ANALYSIS (CONT'D)
Water and Sewer
Source
Low
High
Average
Restricted Comps
$172
$604
$328
IREM (Section 42 — Region 4)
$499
Developer Pro forma
$565
The IREM indication includes water and sewer costs for all common area and all units. The pro forma includes
all utilities. The Developer Pro forma does not break-out the individual utilities' expense categories. We have
considered all of the data and have concluded on an expense of $150 per unit, or $18,000 annually.
Electric and Gas
The subject has landlord -paid electric for the common areas. Tenants pay electric and gas expenses for the
occupied apartments. Similarly, the expense comparables include these expenses for common areas only. The
indications we have relied upon are summarized as follows:
Electric and Gas
Source
Low
High
Average
Restricted Comps
$189
$358
$238
IREM (Section 42 — Region 4)
$186
Developer Pro forma
Incl. Above
The IREM expense includes electrical and gas cost for common area only and does not include any units. The
Developer Pro forma does not break out the electric and gas expense from total utilities. We have considered
all of the data and have concluded on an expense of $250 per unit, or $30,000 annually.
Garbage Service
The subject will have landlord -paid trash removal expenses. The indications we have relied upon are
summarized as follows:
Garbage
Source
Low
High
Average
Restricted Comps
$72
$690
$259
IREM (Section 42 — Region 4)
N/A
Developer Pro forma
Incl. Above
The Developer Pro forma does not break out the garbage service expense from total utilities. Note that one of
the restricted expense comparables had an exceptionally high garbage service expense ($690 per unit) last year
that skewed the average somewhat and was not considered typical. We have considered all of the data and have
concluded on an expense of $125 per unit, or $15,000 annually.
The developer pro forma estimates total utilities at $565 per unit and our estimate for total utilities is $525 per
unit.
Cable Service
The subject will not offer bulk cable to the tenants.
Repairs and Maintenance
The subject will experience repairs and maintenance expenses for basic upkeep. Items such as appliance repairs
are not refurbishment expenses, but are normal maintenance for an operating apartment complex. The property
will also experience replacement expenses for items such as air conditioners, appliances, and carpeting, but
these expenses are considered separately. The repairs and maintenance category does not include grounds
maintenance, or maintenance payroll, but does include turnover costs of painting and decorating. The
indications we have relied upon are summarized as follows:
19-PIP MERIDIAN APPRAISAL GROUP, INC. 179
INCOME CAPITALIZATION ANALYSIS (CONT'D)
Repairs and Maintenance
Source
Low
High
Average
Restricted Comps
$282
$642
$440
IREM (Section 42 — Region 4)
$606
Developer Pro forma
$777
The Developer Pro forma includes grounds maintenance and contract services in the repairs and maintenance
category that we have considered separately below. We have given consideration to all of the data and
concluded on an expense of $400 per unit, or $48,000 annually.
Grounds Maintenance
Some of the comparables combine contract services such as pest control with the grounds maintenance. The
indications we have relied upon are summarized as follows:
Grounds Maintenance
Source
Low
High
Average
Restricted Comps
$113
$289
$172
IREM (Section 42 — Region 4)
$264
Developer Pro forma
Incl. Above
We have considered all of the data and have concluded on an expense of $150 per unit, or $18,000 annually.
Contract Services
Some of the comparables combine contract services such as pest control with the grounds maintenance. The
indications we have relied upon are summarized as follows:
Contract Services
Source
Low
High
Average
Restricted Comps
$189
$574
$400
IREM (Section 42 — Region 4)
$223
Developer Pro forma
Incl. Above
This expense includes pest control, fire protection and occasional repairs and maintenance items such as air-
conditioning maintenance service, appliance repairs, pressure washing and carpet cleaning We have considered
all of the data and have concluded on an expense of $250 per unit, or $30,000 annually.
The Developer Pro forma estimates total repairs and maintenance including grounds maintenance and contract
services at $777 per unit. We have estimated total repairs and maintenance including grounds maintenance and
contract services at $800 per unit.
Security
The subject will have manned security. The indications we have relied upon are summarized as follows:
Security
Source
Low
High
Average
Restricted Comps
$207
$237
$222
IREM (Section 42 — Region 4)
$50
Developer Pro forma
$483
We have considered all of the data and have concluded on an expense of $450 per unit, or $54,000 annually.
Reserves (Allowance for Replacement of Short -Lived Items)
This expense category is a sinking fund used to annualize expenses for periodic replacement of appliances, air
conditioning units, carpeting, resealing of parking areas, etc. Items related to tenant turnover, such as
19-PIP MERIDIAN APPRAISAL GROUP, INC.
180
INCOME CAPITALIZATION ANALYSIS (CONT'D)
repainting, have already been accounted for. In actual practice, few apartment owners maintain reserve
accounts; however, it is prudent appraisal and underwriting practice to consider the replacement allowance.
Reserve requirements range from $100 to as high as $400 per unit annually, although most are between $200
and $300 per unit. The market rate expense comparables indicate $0 to $507. The restricted expense
comparables indicate $0, $507, $300, $200, and $0 per unit. The Developer's Pro forma estimate is for $300 per
unit. We conclude an expense of $300 per unit, or $36,000 annually.
Management Fee
The management fee estimate is an allocation of a fee to the management company and does not include salaries
and commissions for on -site office personnel. Management fees are typically considered on a percentage of the
effective gross income basis. Based on our conversation with several management companies, larger projects
tend to cost less on a percentage basis than smaller projects, with a typical range of 3% to 6% of the effective
gross income. The indications we have relied upon are summarized in the following chart.
Management Fee
Source
Low
High
Average
Restricted Comps
$351
$719
$561
IREM (Section 42 — Region 4)
$429
Developer Pro forma
$559
Considering the subject's projected income level, we conclude an expense of 5.75% of EGI, or $66,442 annually,
which equates to $554 per unit.
Salaries and Payroll (On -Site Staff)
This expense category includes the salaries for both office (management and leasing) and maintenance
personnel, along with payroll expenses such as FICA, unemployment tax, workers' compensation, and health
insurance. The indications we have relied upon are summarized in the following chart.
Salaries and Payroll
Source
Low
High
Average
Restricted Comps
$942
$1,823
$1,294
IREM (Section 42 — Region 4)
$1,183
Developer Pro forma
$1,250
We have considered all of the data and conclude an expense at $1,250 per unit, or $150,000 annually.
Administrative and Office Expenses
This expense includes office supplies, telephone service for the office, postage, licenses, permits, etc. We
included professional service fees such as legal and accounting fees in this category. The indications we have
relied upon are summarized in the following chart.
Administrative and Office
Source
Low
High
Average
Restricted Comps
$241
$895
$554
IREM (Section 42 — Region 4)
$521
Developer Pro forma
$450
IREM includes marketing within this category. Restricted properties typically have higher administrative costs
than market properties. We have considered all of the data and conclude an administrative expense of $450 per
unit, or $54,000 annually.
Advertising and Promotion
The indications we have relied upon are summarized in the chart which follows.
19-PIP MERIDIAN APPRAISAL GROUP, INC. 181
INCOME CAPITALIZATION ANALYSIS (CONT'D)
Advertising and Promotion
Source
Low
High
Average
Restricted Comps
$7
$86
$40
IREM (Section 42 — Region 4)
Included Above
Developer Pro forma
$0
The subject is located in a competitive neighborhood and needs a marketing effort to maintain stabilized
occupancy. We have considered all of the data and estimate an expense of $50 per unit annually or $6,000.
Total Expenses
Total operating expenses are estimated at $715,417, which equates to $5,962 per unit and $10.59 per square
foot annually.
Total Expenses
Source
Low
High
Average
Restricted Comps
$4,659
$6,294
$5,671
IREM (Section 42 — Region 4)
$5,116
Developer Pro forma
$5,722
The subject's estimated expenses are within the range of the comparable properties and supportive of the
Developer Pro forma adjusted for real estate taxes.
All five market rate expense comparables provide expense ratios; they are 40%, 46%, 61%, 51% and 61%; the
subject's ratio of 64% is just above the range due to the unit mix having only one -bedroom units.
Excluding taxes and reserves, the expense comparables indicate a range of $3,818 to $5,404 with an average of
$4,629 per unit; the subject's estimated expenses excluding these items are $4,579 per unit, which is within the
range. The expense comparables indicate expense ratios of 33% and 52% with an average of 42% excluding
taxes and reserves; the subject's ratio based on appraisers' estimates of 48% is within the range, and considered
reasonable.
Net Operating Income
The expense estimate was deducted from the effective gross income, resulting in a net operating income of
$440,099.
19-PIP MERIDIAN APPRAISAL GROUP, INC. 182
SUBJECT INCOME AND EXPENSES
Developer Pro Forma.
Rental Income
Ancillary Income
W/D Income
Vac/Coll. Loss
Total Income
$1,138,932 $9,491
$22,344 $186
$12,996 $108
-$56,947 -$475
$15.52
$1,117,325 $9,311
OPERATING EXPENSES
SIUNIT
$/S.F.
R.E. & Personal Prop. Taxes
Insurance
Water and Sewer (Utilities)
Electric and Gas
Garbage
Cable
Repairs and Maintenance
Grounds Maintenance
Contract Services
Security
Reserves
Management
Salaries and Payroll
Administrative
Advertising
$96,000
$64,560
$67,800
Incl. Above.
Incl. Above.
$0
$93,240
Incl. Above.
Incl. Above.
$57,960
$36,000
$67,040
6.00%
$150,000
$54,000
$0
$800
$538
$565
Incl. Above
Incl. Above
$0
$777
Incl. Above
Incl. Above
$483
$300
$559
of EGI
$1,250
$450
$0
$1.42
$0.96
$1.00
Incl. Above
Incl. Above
$0.00
$1.38
Incl. Above
Incl. Above
$0.86
$0.53
$0.99
$2.22
$0.80
$0.00
TOTAL EXPENSES
$686,600
$5,722
$10.16
19-PIP MERIDIAN APPRAISAL GROUP, INC. 183
EXPENSE COMPARABLES RESTRICTED
PROPERTIES
Comparable
1
Comparable 2
Comparable
3
Comparable 4
Comparable 5
LOCATION (County)
Miami -Dade
Miami -Dade
Miami -Dade
Miami -Dade
Miami -Dade
YEAR BUILT
1994
2016
2009
2009
2017
NUMBER OF UNITS
112
84
55
132
100
AVERAGE UNIT SIZE
857
1,007
618
818
652
YEAR ENDING
Mar-19 T-12
Dec-18
Dec-18
Dec-18
Dec-18
OPERATING EXPENSES
8/UNIT
$/S.F.
8/UNIT
$/S.F.
8/UNIT
$/S.F.
8/UNIT
$/S.F.
8/UNIT
$/S.F.
R.E. & Personal Prop. Taxes
$66,184
$591
$0.69
$93,045
$1,108
$1.10
$32,444
$590
$0.96
$100,040
$758
$0.93
$66,202
$662
$1.02
Insurance
$64,081
$572
$0.67
$42,901
$511
$0.51
$20,550
$374
$0.60
$51,114
$387
$0.47
$64,184
$642
$0.98
Water and Sewer
$19,268
$172
$0.20
$20,671
$246
$0.24
$11,326
$206
$0.33
$54,497
$413
$0.51
$60,418
$604
$0.93
Electric and Gas
$21,178
$189
$0.22
$30,039
$358
$0.36
$10,856
$197
$0.32
$27,595
$209
$0.26
$0
$0.00
Garbage
$77,277
$690
$0.80
$11,226
$134
$0.13
$3,982
$72
$0.12
$18,213
$138
$0.17
$0
$0.00
Cable
$0
$0.00
$0
$0.00
$0
$0.00
$0
$0
$0.00
$0
$0.00
Redecoration
$7,545
$67
$0
$0
$0
$0
$0
$0
$0
$0
$0
Repairs and Maintenance
$35,839
$320
$0.37
$23,705
$282
$0.28
$27,667
$503
$0.81
$59,766
$453
$0.55
$64,178
$642
$0.98
Grounds Maintenance
$0
$0
$0.00
$9,600
$114
$0.11
$15,890
$289
$0.47
$14,956
$113
$0.14
$0
$0.00
Contract Services
$21,182
$189
$0.22
$31,452
$374
$0.37
$25,437
$462
$0.75
$75,720
$574
$0.70
$0
$0.00
Security
$0
$0
$0.00
$0
$0.00
$0
$0
$0.00
$31,322
$237
$0.29
$20,672
$207
$0.32
Reserves
$28,000
$250
$0.29
$0
$0.00
$16,500
$300
$0.49
$86,400
$655
$0.80
$30,000
$300
$0.46
Management
$39,308
$351
$0.41
$60,406
$719
$0.71
$30,000
$545
$0.88
$83,159
$630
$0.77
$55,710
$557
$0.85
3.0 %
of EGI
5.72 %
of EGI
5.28 %
of EGI
5.35 %
of EGI
6.00 %
of EGI
Salaries and Payroll
$114,960
$1,026
$1.20
$122,156
$1,454
$1.44
$100,258
$1,823
$2.95
$124,349
$942
$1.15
$122,500
$1,225
$1.88
Administrative
$27,008
$241
$0.28
$38,080
$453
$0.45
$49,225
$895
$1.45
$56,165
$425
$0.52
$75,465
$755
$1.16
Advertising
$0
$0
$0.00
$626
$7
$0.01
$2,016
$37
$0.06
$4,003
$30
$0.04
$8,608
$86
$0.13
TOTAL EXPENSES
$521,830
$4,659
$5.44
$483,906
$5,761
$5.72
$346,152
$6,294
$10.19
$787,298
$5,964
$7.30
$567,937
$5,679
$8.71
Operating Expense Ratio
33 %
37 %
52 %
39 %
51
Water/Sewer Included?
Yes
Yes
Yes
Yes
No
19-PIP MERIDIAN APPRAISAL GROUP, INC.
184
INCOME CAPITALIZATION ANALYSIS (CONT'D)
Capitalization
The final step in the direct capitalization technique is to divide the net operating income estimate by a market
derived overall rate of return (OAR), or capitalization rate. The overall capitalization rate is estimated by several
methods. The best method is by analysis of rates reflected by comparable sale properties.
Extraction From Sales
The comparable improved sales included in this appraisal provide good indications of an overall capitalization
rate for the subject property. The capitalization rate indications reflect deductions for an allowance for
replacement of short-lived items (reserves for replacement), so the rate indications are consistent with the
analysis of the subject property. The capitalization rate indications are as follows:
Sale # Property County Sale Date OAR
1
Riverwalk II
Miami -Dade
Apr-19
6.57%
2
Santa Clara II
Miami -Dade
Feb-18
6.46%
3
Grand Court North Port
Sarasota
Aug-18
5.78%
4
Noah's Landing
Collier
Sep-18
5.27%
5
Homestead Colony
Miami -Dade
Dec-17
5.17%
Average Overall Rate 5.85%
The sales reflect overall capitalization rates of 5.17% to 6.57% with an average of 5.85%. All of the comparables
were purchased for continued apartment use (no condominium conversion sales or fractured condominiums).
We estimate that the subject's rate should be within the range. The data used for the extraction of the rates from
the sales is considered reliable and the best overall rate indications available. All of the sales had significant
amounts of time remaining on the Land Use Restriction Agreements. Therefore, the comparable improved sales
provide a reliable indication of an overall capitalization rate for the subject.
Investor Surveys
PwC Real Estate Investor Survey
The 2019Q2 PwC Real Estate Investor Survey for the national apartment market indicated a 11 basis point
increase in the overall average cap rate to 5.14% from the prior survey indication of 5.03% and is lower than
the 5.26% indication from the same quarter in the prior year.
8.82%
Overall Cap Rate Trends — National Apartment Market
8.03%
9.50%
9.00%
8.50%
8.00% a;
7.50%
7.00% Q
6.50%
5 83°�••. 5.73% iftlf141-1.11.1.11.1il
5.39% 6.00%
5.
5.33% 5.14%5.50% Q
� 4.00/
4.00%
o-ti o-ti o-ti o-ti 0- 0- 0- 0- 0- 0- 0- 0- 0- 0- 0- 0- 0- 0- 0- 0- 0- 0- 0- 0- O-
N,
0, 0� 0� 01 0° 0� y0 y0 �y titi titi titi yS '•' C. yb y5 ti� '•/ '•C yA .', 'y'b yW �
LO LO ,y0 ,y0 ,ti0 ti0 ti0 ti0 LO , , ,L, ,y0 ,ti0 ,ti0 ,ti0 ,LO ,ti0 . , ,y0 ,ti0 ,ti0 ,', ,LO ,ti0 '1,
Source: PwC Real Estate Investor Survey
The survey indicated that national apartment market had discount rates that ranged from 5.25% to 10.00% with
an average of 7.11% which is the same compared to the prior quarter and down nine basis points compared to
7.38% in the same quarter in the prior year.
19-PIP MERIDIAN APPRAISAL GROUP, INC. 185
INCOME CAPITALIZATION ANALYSIS (CONT'D)
The survey indicated that the national apartment market rental rates changed by a 0.0% to a 4.00% increase
with an average of a 2.50% increase. While operating expenses changed with a range of 2.00% to 4.00% with
an average of 2.90% which is 10 basis points which is the same as the previous quarter.
ARA Newmark
The ARA US Multihousing Market Overview for 2019Q2 indicated that capitalization rates nationally dropped
to 5.39% over the previous quarter, which is nine basis points over the prior year. Capitalization rates in major
markets were 67 basis points lower than the national average at 4.7% which is two basis points higher than the
prior quarter.
10%
8
6%
4
2%
0%
5.50 %
5.39%
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
United States — Major Markets — Non -Major Markets
Realty Rates
The Realty Rates 2019Q2 Investor Survey indicated Surveyed Rates for Garden/Suburban Townhouses
nationally of 4.51% to 11.60% with an average of 7.75%. The Equity Dividend Rate ranged from 6.29% to
13.94% with an average of 9.73%. The Debt Coverage Ratio ranged from 1.10 to 1.61 with an average of 1.31.
IRR Annual Multi family Report
The IRR 2018 Annual Multi -family Report for the national apartment market indicated overall average cap
rates for Class A Urban projects of 5.27%, Class B Urban projects of 6.14%, Class A Suburban projects of 5.45%,
and Class B Suburban projects of 6.31%. The South Region apartment market that includes the states in the
southeastern portion of the country indicated overall average cap rates for Class A Urban projects of 5.41%,
Class B Urban projects of 6.27%, Class A Suburban projects of 5.61%, and Class B Suburban projects of 6.50%.
Band of Investment
A third method of extracting an overall capitalization rate is by application of the Band of Investment technique.
This method involves the calculation of a weighted average capitalization rate based on the mortgage constant
(mortgage capitalization rate) and the equity dividend rate (equity capitalization rate). The application of this
technique requires the estimation of certain rates and ratios applicable to the mortgage and equity positions.
We have estimated the subject's permanent financing rate based on our conversations with Barry Krinsky with
Citibank, Tammy Haylock-Moore with JPMorgan Chase and Mike Marra with Wells Fargo. The typical term
is five to 10 years, with the rate tied to the corresponding T-Bill rate. The spread between the T-Bill rate and the
interest rate ranges from 300 to 400 basis points for Class "A" and 350 to 450+ for Class "B" and lower. The
key variables are the location and quality of the product and the financial strength of the developer. The 10 year
T-Bill rate is around 1.5%. The typical loan -to -value ratio is 75%, with about one point charged for loan
origination. Loan amortization periods for properties like the subject have typically been about 25 years, with
balloon payments in five to 10 years.
19-PIP MERIDIAN APPRAISAL GROUP, INC. 186
INCOME CAPITALIZATION ANALYSIS (CONT'D)
We conclude a mortgage interest rate of 4.75%, a loan -to -value ratio (M) of 80%, amortization period of 30
years and a balloon payment in five years. These conclusions result in a mortgage constant (Rm) of 6.26%.
The second component of the Band of Investment analysis is the estimation of the equity dividend rate for the
subject. Primary consideration was given to an investor survey for the estimation of the equity dividend rate.
Recent investor surveys indicate equity capitalization rates ranging from 7.50% to 10.50%. We have concluded
an equity capitalization rate (Re) of 7.00%% for the 20% equity position.
CAPITALIZATION RATE CALCULATION INPUTS
Variables:
- Interest Rate (i )
4 75%
- Loan Ratio (M) 80%
- Equity Ratio (M-1) 20%
- Loan Amortization . . 30
- Term (Balloon Payment) 5
- Points Paid 1
- Payments per Year
- Mortgage Constant Factor (Rm)
- Debt Coverage Ratio 1 (DCR1)
- Equity Return Requirement (Re)
12
6 26%
1.20
7 00%
The mortgage and equity position conclusions for the subject property are considered to be reasonable estimates.
An investor's financial position can substantially influence financing terms and investors have varying yield
expectations.
Based on the parameters concluded above, we calculated an indication of an overall capitalization rate by the
Band of Investment technique as follows:
BAND OF INVESTMENT METHOD
Loan / Equity Ratio
Rate of Return
Weighted Rate
Mortgage Requirement
Equity Requirement
Overall Capitalization Rate Indication
(M) 0.80 x (Rm) 6.26% =
(M-1) 0.20 x (Re) 7.00% =
5.01 %
1.40%
6.41%
Debt Coverage Ratio
Another indication of a capitalization rate is derived by application of the Debt Coverage Ratio Formula.
Market data indicates lenders typically require debt coverage ratios ranging from 1.10 to 1.35 for a property like
the subject. The lenders surveyed by the Appraisal Institute Research Department indicate an average debt
coverage ratio of 1.35 for loans of $5 million to $9.999 million. Loans for older properties are typically higher
than the average; therefore, we conclude a debt coverage ratio of 1.20.
An overall capitalization rate by the Debt Coverage Ratio Formula is calculated as follows:
DEBT COVERAGE RATIO METHOD
DCR
Loan Ratio
Mortgage Constant Overall Rate
Debt Coverage Ratio
1.20 x (M)
0.80 x (Rm) 6.26% =
6.01%
Conclusion of Overall Capitalization Rate
The sales reflect overall capitalization rates of 5.17% to 6.57% with an average of 5.85%. The comparable
improved sales provide the most meaningful capitalization rate indications for the subject property. The Band
of Investment analysis indicates a capitalization rate of 6.41%, while the Debt Coverage Formula indicates
6.01%. These mathematically derived rates provide only fair indications of an overall capitalization rate for the
subject property. The investor surveys indicate a range of overall rates from 4.70% to 5.39% and provide support
for the rate indications by the comparable improved sales.
19-PIP MERIDIAN APPRAISAL GROUP, INC. 187
INCOME CAPITALIZATION ANALYSIS (CONT'D)
We concluded an overall rate for the subject as a market rate property of 5.00%. Restricted properties typically
have higher overall rates due to the increased risk from limitations on cash flow. The spread between market
and restricted rate properties is dependent on factors such as the amount of time remaining on the restrictions
and the suitability of the location of the property for a market rate development. The subject will have 50 years
remaining on its restrictions when placed in service, and it has a secondary location for new market rate
development.
We conclude an overall capitalization rate for the stabilized income of 5.50% for the subject property.
Value Conclusion Via Income Approach —As If Stabilized
Dividing the subject property's estimated net operating income by the estimated overall capitalization rate
results in a hypothetical market value estimate as if stabilized as a restricted project by Direct Income
Capitalization of $8,000,000* (rd.).
Value Conclusion Via Income Approach — As If Complete
As discussed in the apartment Market Overview section of this report, the demand for apartment units in
Miami -Dade County appears to be strong at this time based on the increasing rental rates and low vacancy
rates. We spoke with leasing agents and reviewed FHFC occupancy reports to obtain absorption rate
comparables summarized as follows.
Average Monthly Absorption in Profiled Properties (Miami
-Dade County)
Complex Name
Complex
Type
Avg. # of Units
Absorbed Per
Month
Units Remaining to be Leased to Reach
Stabilized Occupancy (Includes Units
Under Construction and Complete)
Marcia Gardens
Affordable
45
Stabilized
Martin Fine Villas
Affordable
52
Stabilized
7th Avenue Transit Village II
Affordable
100
Stabilized
Audrey M. Edmonson Transit Village
Affordable
76
Stabilized
Pinnacle Heights
Affordable
107
Stabilized
Courtside
Affordable
84
Stabilized
Plaza at the Lyric
Affordable
79
Stabilized
Northside Transit Village I
Affordable
50
Stabilized
Keys Crossing
Affordable
50
Stabilized
Coquina Place
Affordable
22
Stabilized
Orchid Estates
Affordable
35
Stabilized
Villa Capri
Affordable
72
Stabilized
Magnolia Landing
Affordable
50
Stabilized
Woodside Oaks
Affordable
33
Stabilized
Circle Creek
Affordable
33
Stabilized
HR= High Rise
Source: Field Survey by Meridian Appraisal Group, Inc.
These projects have recently leased up at rates ranging between 22 and 107 units per month. Marcia Gardens
is the most recently completed elderly project located in south Miami -Dade County; this project delivered both
buildings in mid -July 2018 and was 100% occupied by mid -October 2018 indicating an average absorption rate
of 44.6 units per month. Martin Fine Villas, another similar new elderly project located next to the subject near
downtown Miami, is an affordable project that was 100% pre -leased and had everybody moved in within about
eight weeks. Northside Transit Village I is an affordable project that was 100% pre -leased and had everybody
moved in within about six weeks. Pinnacle Heights is located northwest of downtown Miami on NW 36th
Street; this affordable project came on line in January 2018, was 100% pre -leased and had everybody moved in
within four weeks. Courtside is located just north of downtown Miami, is a recent (October 2016) affordable
project that was 100% pre -leased and had everybody moved in within three weeks. Plaza at the Lyric is also
located just north of downtown Miami, near Courtside, is an affordable project that was nearly 100% pre -leased
when it opened in mid -April 2016 and had everybody moved by early May 2016. 7t' Avenue Transit Village II
has 100 units completed in September 2017, is located just north of Downtown Miami and was 100% pre -leased
with all the tenants moving in within about one month; note that this project has a general population (family)
demographic, but has a large number of elderly tenants.
19-PIP MERIDIAN APPRAISAL GROUP, INC. 188
INCOME CAPITALIZATION ANALYSIS (CONT'D)
The subject will be facing limited new affordable competition during lease -up within three miles. Further, the
nearest existing projects are at or near 100% occupied.
In garden and villa -style projects absorption occurs over the course of construction and tenants move into
individual buildings as they are completed. The construction schedule for this product type and any delays
between buildings impacts the absorption rate. Again, typically, a leasing office is opened up on site or a phone
number is advertised approximately three months before the first units are available. The pre -leasing thus
provides enough tenants to occupy the first building when completed and this continues as buildings are
completed; individual buildings receive Certificates of Occupancy (COs) and tenants are moved into individual
buildings as they are completed. With garden and villa -style products, a significant number of units are typically
leased by completion. Low-rise, mid -rise and high-rise projects typically receive one CO for the entire building
or project and absorption does not start until all units are complete.
The subject property has 120 proposed units for the general population (families). Due to the limited number
of new projects coming on line at the same time and the relatively small size of the subject, we project that the
subject will likely be at or near 100% pre -leased upon completion of construction. Since the subject has only
two proposed buildings that will come on-line at approximately the same time, we project that it will take
approximately three months to get everybody moved -in. Therefore, we estimate an average absorption rate of
approximately 40 units per month to achieve stabilized occupancy upon completion.
The stabilized occupancy for the subject is estimated at 96% (115 units) and since all of the units are contained
in one -building to be delivered at once, the occupancy upon completion is estimated at 0% indicating that
approximately 115 units will need to be occupied upon completion in order to achieve stabilized occupancy;
this is projected to require approximately three months. The average market rental rate is $816 per unit.
Assuming a straight-line lease -up, we have estimated the rent loss using the following calculation: ((115 x $816)
x 3)/2 = $140,760 which we have rounded to $140,000.
Subtracting the estimated rent loss from the as if stabilized value indicates a hypothetical market value estimate
as if complete as a restricted project by Direct Income Capitalization of $7,860,000*.
* Please see the Extraordinary Assumptions and Hypothetical Conditions.
19-PIP MERIDIAN APPRAISAL GROUP, INC. 189
INCOME APPROACH SUMMARY
Restricted
PROPERTY ID:
Residences at Dr. King Boulevard
Miami
# Of Units
Unit Type
Set Aside Unit Size
Rent Total Ren
24
75
9
12
1/1
1/1
1/1
1/1
30%AMI 563 $394 $113,472
60%AMI 563 $871 $783,900
80%AMI 563 $1,100 $118,800
Market 563 $1,100 $158,400
TOTAL 120
67,560 $816 $1,174,572
GROSS POTENTIAL RENTS
OTHER INCOME
Washer/Dryer 20% $45.00 per month $12,960
Cable Income 0% $0.00 per month $0
Valet Trash 0% $0.00 per month $0
Water/Sewer Reimbursement 0% $0.00 per month $0
Ancillary Income 100% $20.00 per month $28,800
TOTAL OTHER INCOME $41,760
$1,174,572
GROSS ANNUAL INCOME $1,216,332
AVG. UNIT SIZE: 563
AVG. INC PER UNIT $816
LESS COLLECTION LOSS 1.00% $12,163
LESS VACANCY LOSS 4.00% $48,653 % OF $ PER $ PER
TOTAL VACANCY & COLL. LOSS 5.00% $60,817 EGI UNIT S.F.
EFFECTIVE GROSS INCOME
$1,155,515 100.00%
$9,629 $17.10
LESS OPERATING EXPENSES
FIXED EXPENSES
R.E. & Personal Property Taxes $1,083 PER UNIT $129,975 11.25% $1,083 $1.92
Insurance $500 PER UNIT $60,000 5.19% $500 $0.89
SUBTOTAL - FIXED EXPENSES $1,583 PER UNIT $189,975 16.44% $1,583 $2.81
Water and Sewer $150 PER UNIT $18,000 1.56% $150 $0.27
Electric and Gas $250 PER UNIT $30,000 2.60% $250 $0.44
Garbage $125 PERUNIT $15,000 1.30% $125 $0.22
Cable $0 PER UNIT $0 0.00% $0 $0.00
SUBTOTAL -UTILITIES $525 PERUNIT $63,000 5.45% $525 $0.93
Repairs and Maintenance $400 PER UNIT $48,000 4.15% $400 $0.71
Grounds Maintenance $150 PER UNIT $18,000 1.56% $150 $0.27
Contract Services $250 PER UNIT $30,000 2.60% $250 $0.44
Security $450 PER UNIT $54,000 4.67% $450 $0.80
Reserves for Replacements $300 PER UNIT $36,000 3.12% $300 $0.53
SUBTOTAL -MAINTENANCE $1,550 PER UNIT $186,000 16.10% $1,550 $2.75
Management 5.75% OF EGI $66,442 5.75% $554 $0.98
Salaries and Payroll $1,250 PER UNIT $150,000 12.98% $1,250 $2.22
Administrative $450 PER UNIT $54,000 4.67% $450 $0.80
Advertising $50 PER UNIT $6,000 0.52% $50 $0.09
SUBTOTAL - MANAGEMENT/OFFICE $2,304 PER UNIT $276,442 23.92% $2,304 $4.09
TOTAL EXPENSES
NET OPERATING INCOME
CAPITALIZED AT 5.50%
$715,417 61.91% $5,962 $10.59
$440,099 38.09% $3,667 $6.51
$8,001,794
AS IF STABILIZED VALUE BY INCOME APPROACH $8,000,000
LESS RENT LOSS DURING LEASE -UP $140,000
AS IF COMPLETE VALUE BY INCOME APPROACH $7,860,000
$66,667 $118.41
19-PIP MERIDIAN APPRAISAL GROUP, INC. 190
RECONCILIATION AND FINAL VALUE ESTIMATE
(AS A RESTRICTED PROPERTY)
The purpose of this appraisal was to estimate the hypothetical market value of the leased fee interest in the
subject property as of the effective date of appraisal as if complete, as if stabilized, upon completion and upon
stabilization. The value indications are as follows:
As If Complete
As If Stabilized
Cost Approach
N/A
N/A
Sales Comparison Approach
$7,900,000*
$8,040,000*
Income Capitalization Approach
$7,860,000*
$8,000,000*
The Cost Approach was not applied to the subject property as restricted.
The Income Approach reflects the value of the subject property based upon its estimated income producing
capabilities, with consideration given to current investment requirements. The data applied in this approach,
including rental rates, occupancy levels, operating expenses, and rates of return, was adequately supported from
market data. Rental properties are developed and purchased to serve as income investment properties. An
investor who would purchase the subject property would perform direct capitalization and yield capitalization
analyses, if lease -up were involved. Market participants make decisions to buy and sell based on these
capitalization analyses. Therefore, the Income Approach is based on reliable market data, and this approach is
the most market -oriented approach to value. The Income Approach is considered to provide the best indication
of market value for the subject property, so this approach is given the most emphasis in the reconciliation of the
final value estimate.
The Sales Comparison Approach is a process by which recent sales of similar properties are compared to the
subject property and adjusted for conditions of sale and differences in property characteristics. Adequate
comparable improved sale properties were found and applied to the valuation of the subject property. An
investor considering the purchase of a rental project complex would research the market for similar properties
available for sale and would compare the properties based primarily upon their income producing capabilities.
Therefore, the Sales Comparison Approach mirrors the activities of market participants, and there was sufficient
data available for use as comparable sales. However, the comparisons and the final decision to purchase would
primarily be based on analysis of the economics of leasing the properties. The Sales Comparison Approach is
an important source of overall capitalization rate data applied to the Income Capitalization Approach. The
Sales Comparison Approach is estimated to provide meaningful indications of the market value of the subject
property and is given secondary consideration in the reconciliation of the final value estimate.
In conclusion, we have given the most consideration to the value indications reflected by the Income
Capitalization Approach. The Sales Comparison Approach provides good support for the Income
Capitalization Approach. The Cost Approach was not applicable.
We have formed the opinion that the hypothetical market value of the leased fee interest in the subject property,
as restricted by the Housing Credit, HOME, SURTAX and Tax -Exempt Bond programs, as if complete,
including $240,000 in personal property, and with market financing, based on market conditions prevailing on
September 10, 2019, was:
SEVEN MILLION EIGHT HUNDRED SIXTY THOUSAND DOLLARS
($7,860,000)*
We have formed the opinion that the hypothetical market value of the leased fee interest in the subject property,
as restricted by the Housing Credit, HOME, SURTAX and Tax -Exempt Bond programs, as if stabilized,
including $240,000 in personal property, and with market financing, based on market conditions prevailing on
September 10, 2019, was:
19-PIP MERIDIAN APPRAISAL GROUP, INC. 191
RECONCILIATION AND FINAL VALUE ESTIMATE (CONT'D)
EIGHT MILLION DOLLARS
($8,000,000)*
19-PIP MERIDIAN APPRAISAL GROUP, INC. 192
FAVORABLE FINANCING
Favorable (below market) financing has been made available to this specific property in the form of a SAIL
loan from the Florida Housing Finance Corporation. The State Apartment Incentive Loan program (SAIL)
provides low -interest loans on a competitive basis to affordable housing developers each year. This money often
serves to bridge the gap between the development's primary financing and the total cost of the development.
Developments that use housing credits in conjunction with this program may use a minimum set -aside of 40%
of the units for residents earning 60% of the area median income. Loan interest rates are set at zero percent for
those developments that maintain 80% of their occupancy for farmworkers, commercial fishing workers or
homeless people. The interest rates are set at one percent for all other developments. Loans are issued for a
maximum of 15 years unless housing credit syndication requirements or FannieMae requirements dictate longer
terms or if the Corporation's encumbrance is subordinate to the lien of another mortgage, in which case the
term may be made coterminous with the longest term of the superior loan. In most cases, the SAIL loan cannot
exceed 25% of the total development cost and can be used in conjunction with other state and federal programs.
As requested by the client, the value of this favorable, property specific financing has been estimated using a
present value calculation, which quantifies the difference between the favorable rate being provided to the
developer and the market rate presently available from conventional sources. This analysis assumes that the
favorable financing, as described herein and as provided by the client, is available to remain with the property
for the full term stated below and that, if necessary, the mortgagee will allow the property to be transferred
subject to the mortgage.
The amount and terms of the favorable financing are as follows. Although the property may have additional
financing, as directed by the client, only the favorable financing is considered in the analysis.
Source Amount Rate Term
1
Tax -Exempt Bonds
$2,000,000
1.50%
30 Year Term, 30 Year -amortizing, interest only
2
SURTAX
$2,053,447
1.50%
30 Year Term, 30 Year -amortizing, interest only
3
HOME
$1,790,057
1.50%
30 Year Term, 30, interest only
Tax -Exempt Bonds Loan
Presently, conventional financing would be available to this property at approximately 4.75% or a fixed rate
mortgage, with a loan to value ratio of 80%, payments based on a 30 year amortization schedule and a balloon
payment in five years. The market financing is amortized over 30 years but is only for a five year term before
the loan comes due or has to be refinanced. The subject favorable financing is for 30 years, so we need to make
the interest rates comparable. To do this we have compared the five year treasury rates (this are currently 1.35%)
with 20 year treasury rates (which are currently 1.77%) which reflects a 0.42% difference for the 15 year
difference in the reported treasury terms. Since the proposed terms is 30 years and the current market terms are
five years, there is a difference of 25 years. The market rate was adjusted by 0.75%. This reflects an equivalent
30 year rate for the market financing of 5.50%
For the conventional financing, the mortgage constant at 5.50% amortized over 30 years is 0.068135 reflecting
annual debt service on $2,000,000 of $136,269 or a monthly payment of $11,356. For the subject we have
assumed that the loan is also amortized over 30 years so we can compare the subject favorable financing to the
market typical financing. The mortgage constant at 1.50% amortized over 30 years is 0.041414 reflecting annual
debt service on $2,000,000 of $82,829 or a monthly payment of $6,902.
When comparing two properties, which are otherwise comparable, and one has favorable financing and the
other does not, the measure between the two would be represented by discounting the debt service difference
using the market financing rate as compared to the favorable financing rate. The value of the subject's favorable
financing associated with the Tax -Exempt Bonds loan is calculated as follows:
Present Value of monthly debt service payments discounted to yield based on 4.75% for 30 year term (the length
of the first mortgage) at a monthly saving of $4,453 is $853,714. The present value of the remaining balance at
the end of the term is $0. Therefore the present value of the favorable financing from the Tax -Exempt Bonds
loan is $853,714.
19-PIP MERIDIAN APPRAISAL GROUP, INC. 193
FAVORABLE FINANCING (CONT'D)
SURTAX Loan
Presently, conventional financing would be available to this property at approximately 4.75% or a fixed rate
mortgage, with a loan to value ratio of 80%, payments based on a 30 year amortization schedule and a balloon
payment in five years. The market financing is amortized over 30 years but is only for a five year term before
the loan comes due or has to be refinanced. The subject favorable financing is for 30 years, so we need to make
the interest rates comparable. To do this we have compared the five year treasury rates (this are currently 1.35%)
with 20 year treasury rates (which are currently 1.77%) which reflects a 0.42% difference for the 15 year
difference in the reported treasury terms. Since the proposed terms is 30 years and the current market terms are
five years, there is a difference of 25 years. The market rate was adjusted by 0.75%. This reflects an equivalent
30 year rate for the market financing of 5.50%
For the conventional financing, the mortgage constant at 5.50% amortized over 30 years is 0.068135 reflecting
annual debt service on $2,053,447 of $139,911 or a monthly payment of $11,659. For the subject we have
assumed that the loan is also amortized over 30 years so we can compare the subject favorable financing to the
market typical financing. The mortgage constant at 1.50% amortized over 30 years is 0.041414 reflecting annual
debt service on $2,053,447 of $85,042 or a monthly payment of $7,087.
When comparing two properties, which are otherwise comparable, and one has favorable financing and the
other does not, the measure between the two would be represented by discounting the debt service difference
using the market financing rate as compared to the favorable financing rate. The value of the subject's favorable
financing associated with the SURTAX loan is calculated as follows:
Present Value of monthly debt service payments discounted to yield based on 4.75% for 30 year term (the length
of the first mortgage) at a monthly saving of $4,572 is $876,528. The present value of the remaining balance at
the end of the term is $0. Therefore, the present value of the SURTAX loan is $876,528.
HOME Loan
We have utilized the same methodology above for this loan as well. The present value of the HOME Loan is
$764,098.
Conclusion
The following chart summarizes the value of the favorable financing:
Investment Value Calculations
Loan 1
Loan Source
Loan Amount
Market Mortgage Constant
Annual Debt Service
Monthly Debt Service
Loan Amount
Favorable Mortgage Constant
Annual Debt Service
Monthly Debt Service
Monthly Savings
Present Value of Monthly Savings
PV Rem. Balance Difference
Tax -Exempt Bonds
$2,000,000
0.068135
$136,269
$11,356
$2,000,000
0.041414
$82,829
$6,902
$4,453
$853,714
$0
Loan 2 Loan 3
SURTAX
$2,053,447
0.068135
$139,911
$11,659
$2,053,447
0.041414
$85,042
$7,087
$4,572
$876,528
$0
HOME
$1,790,057
0.068135
$121,965
$10,164
$1,790,057
0.041414
$74,134
$6,178
$3,986
$764,098
$0
Total
$853,714
$876,528
$764,098
Loan 1
Loan 2
Loan 3
Subtotal
Rounded
$853,714
$876,528
$764,098
$2,494,340
$2,490,000
19-PIP MERIDIAN APPRAISAL GROUP, INC. 194
FAVORABLE FINANCING (CONT'D)
Summary
The present value of the favorable financing from the mortgages is added together to reflect a total benefit of
$2,490,000 (rd.) to the subject due to favorable financing. The stabilized restricted value is $8,000,000, adding
the value of the favorable financing results in a stabilized value, as restricted with favorable financing of
$10,490,000.
19-PIP MERIDIAN APPRAISAL GROUP, INC. 195
VALUATION OF SUBJECT'S HOUSING CREDITS
Details regarding the subject's Housing Credits are from a commitment letter from Wells Fargo Community
Lending and Investment.
Project
Total Housing Credits Commitment Date Syndication Rate
I Residences at Dr. King Boulevard I
$24,480,055 I
August 13, 2019 I
100.5% II
The total tax credits available of $24,360,700 multiplied by 99.99% indicates available tax credits of
$24,358,264; multiplying this figure by $1.005 per dollar (100.5%) indicates a net capital contribution of
$24,480,055.
We have estimated the subject's syndication rate as if negotiated in the current environment.
The table below summarizes the ratios of Housing Credit syndication rates for properties that applied in recent
years.
Project
County
Commitment Date
Syndication Rate
Woodland Grove
Miami -Dade
August 19, 2019
94.75%
Lucida
Miami -Dade
July 12, 2019
94.75%
Colonnade Park
Citrus
May 21, 2019
94.725%
Regency Gardens (Rehab)
Broward
March 20, 2019
91.0%
Lofts at Brooklyn
Duval
March 18, 2019
96.0%
Sabal Park (Homeless)
Hillsborough
February 20, 2019
92.0%
Fair Oaks
Miami -Dade
November 15, 2018
98.5%
Cathedral Townhouse (Elderly, HAP, Rehab)
Duval
November 15, 2018
97.0%
Eagle Ridge
Pinellas
November 8, 2018
95.5%
Verbena
Miami -Dade
September 27, 2018
98.0%
Pendana at West Lake Senior Residences
Orange
September 24, 2018
100.0%
Mary Bethune (Elderly, HAP, Rehab)
Hillsborough
September 6, 2018
100.0%
Silver Creek
Miami -Dade
July 10, 2018
98.0%
Providence Reserve Seniors (Elderly)
Polk
June 22, 2018
100.0%
Suncrest Court
Broward
June 18, 2018
97.5%
Lofts at Jefferson Station
Duval
June 14, 2018
96.0%
Osprey Pointe (HAP, Rehab)
Brevard
April 18, 2018
93.0%
Saratoga Crossings I
Broward
March 2, 2018
99.0%
Saratoga Crossings II
Broward
March 2, 2018
98.0%
Lake Pointe
Miami -Dade
February 7, 2018
99.5%
Marian Towers
Miami -Dade
February 7, 2018
101%
We place most weight on the subject's agreement and conclude a rate for the subject of 100.5%, however, we
are not experts in this matter.
19-PIP MERIDIAN APPRAISAL GROUP, INC. 196
ADDENDA
APPRAISERS' QUALIFICATIONS
AVA MERIDIAN
QUALIFICATIONS OF
ROBERT VON, PRESIDENT
BUSINESS ADDRESS
Meridian Appraisal Group, Inc.
1331 Sundial Point
Winter Springs, Florida 32708
Phone: 407.637.8705 Fax: 407.875.1061
E-mail: rvon@meridianag.com
FORMAL EDUCATION California State University, Northridge
May 1986, Bachelor of Science in Business Administration, Real Estate Finance
REAL ESTATE EDUCATION Has completed course work for admission to the Appraisal Institute and all
necessary for State -Certification and continuing education. A partial list of
course work is as follows:
EXPERIENCE
2007 — Present
Course/Seminars/Continuing Education
• Real Estate Appraisal Principles
• Basic Valuation Procedures
• Standards of Professional Practice — Part A
• Standards of Professional Practice — Part B
• Capitalization Theory and Techniques — Part A
• Capitalization Theory and Techniques — Part B
• Highest and Best Use and Market Analysis
• Appraising Troubled Properties
• Advanced Applications
• USPAP Update
• MAP Valuation Training for Third Party Appraisers
Meridian Appraisal Group, Inc.
President and Principal
Responsible for the acquisition, co-ordination and review of appraisal
assignments on real property. Also responsible for the preparation of appraisal
assignments on various real property with specialization in multi -family
apartments and A&D projects throughout Florida. Have completed over 1,000
affordable apartment projects for all demographic categories throughout the
state of Florida.
January 2004 - 2007 Realvest Appraisal Services, Inc.
President and Principal
June 1998 - 2003
1994 - 1998
Realvest Appraisal Services, Inc.
Vice President and Principal
Responsible for the acquisition, co-ordination and review of appraisal
assignments on real property. Also responsible for the preparation of appraisal
assignments on various real property with specialization in multi -family
apartments and A&D projects throughout Florida.
Pardue, Heid, Church, Smith & Waller, Inc.
Commercial Manager and Commercial Real Estate Analyst
Responsible for the preparation and review of appraisal assignments on various
real property including vacant land, subdivisions, retail centers, office buildings,
apartments, industrial properties and special use properties.
QUALIFICATIONS OF ROBERT VON, PRESIDENT
(CONT'D)
1993 —1994
1986 —1993
Barnett Banks, Inc.
Review Appraiser
Responsible for reviewing reports for Special Assets and Corporate and
Commercial Real Estate Department. Performed all appraisal reviews for the
CFCRC, a consortium of 12 lending institutions.
HomeFed Bank, FSB
Senior Review Appraiser
Responsible for the ordering and review of full narrative appraisal reports for the
entire east coast portfolio. Assignments completed in 14 states and the District
of Columbia
CERTIFICATIONS & LICENSES State -Certified General Real Estate Appraiser RZ 1604
Orlando Chamber of Commerce — Member
Downtown Orlando Partnership — Member
PROFESSIONAL AFFILIATIONS Board of Directors — Florida Housing Coalition
MCI< SCOTT, GOVERNOR JONATHAN ZACHEM, SECRETARY
dLpr
STATE OF FLORIDA
DEPARTMENT OF BUSINESS AND PROFESSIONAL REGULATION
FLORIDA REAL ESTATE APPRAISAL BD
THE CERTIFIED GENERAL APPRAISER HEREIN IS CERTIFIED UNDER THE
PROVISIONS OF CHAPTER 475, FLORIDA STATUTES
RDER, ROBERT
1331 SUNDIAL POINT _
WINTER SPRINGS FL 32705
EXPIRATIQN D ►VEMB R 30,2020
Always verify licenses online at MyFloridaLicense.com
Do not alter this document in any form.
This is your license. it is unlawful for anyone other than the licensee to use this document.
-I- MERIDIAN
QUALIFICATIONS OF
MARK S. DAVIS, SENIOR APPRAISER
BUSINESS ADDRESS
Meridian Appraisal Group, Inc.
1331 Sundial Point
Winter Springs, Florida 32708
Phone: 407.637.8706 Fax: 407.875.1061
E-mail: mdavis@meridianag.com
FORMAL EDUCATION University of Florida, July 1982
Bachelor of Science in Business Administration, Risk Management
REAL ESTATE EDUCATION Has completed all courses necessary for State -Certification and continuing
education. A partial list of course work is as follows:
EXPERIENCE
2007 — Present
1991— 2007
1983 —1990
1982 —1983
Course/Seminars/Continuing Education
• Basic Appraisal Principles, Methods and Techniques
• Standards of Professional Practice — Part A
• Standards of Professional Practice — Part B
• Capitalization A & B
• Case Studies in Real Estate Valuation
• Report Writing and Analysis
• Federal Home Loan Bank Board — R-41C
• USPAP Update
• MAP Valuation Training for Third Party Appraisers
Meridian Appraisal Group, Inc.
Senior Appraiser
Responsible for the preparation of appraisal assignments on various real
property including vacant land, subdivisions, retail centers, office buildings,
apartments, industrial properties, mobile and recreational vehicle parks and
special use properties. Have completed over 500 affordable apartment projects
for all demographic categories throughout the state of Florida.
Realvest Appraisal Services, Inc.
Senior Appraiser
Responsible for the preparation of appraisal assignments on various real
property including vacant land, subdivisions, retail centers, office buildings,
apartments, industrial properties, mobile and recreational vehicle parks and
special use properties.
Pardue, Heid, Church, Smith and Waller, Inc.
Commercial Appraiser
Responsible for the preparation of appraisal assignments for the firm on various
real property.
Stanfield and Associates, Inc.
Commercial Appraiser
Responsible for the preparation of appraisal assignments for the firm on various
real property.
QUALIFICATIONS OF MARK S. DAVIS, SENIOR APPRAISER
(CONT'D)
CERTIFICATIONS & LICENSES State -Certified General Real Estate Appraiser RZ 1229
RfCK SCOTT, GOVERNOR JONATHAN ZACHEM, SECRETARY
dbr
STATE OF FLORIDA
DEPARTMENT OF BUSINESS AND PROFESSIONAL REGULATION
FLORIDA REAL ESTATE APPRAISAL BD
THE CERTIFIED GENERAL APPRAISER HEREIN IS CERTIFIED UNDER THE
PROVISIONS OF CHAPTER 475, FLORIDA STATUTES
DAVIS, MARKS
1331 SUNDIAL POINT
WINTER SPRINGS FL 32708 ;1
E
EXPIRATION DATE: NOVEMBER 30, 2020
Always verify licenses online at MyFloridaLicense.com
Do not alter this document in any form.
This is your license. it is unlawful for anyone other than the licensee to use this document.
ENGAGEMENT LETTER
SELTZER MANAGEMENT GROUP, INC.
17633 ASHLEY DRIVE
PANAMA CITY BEACH, FL 32413
TEL: (850) 233-3616
FAX: (850) 233-1429
August 21, 2019
VIA E- MAIL
Mr. Robert Von
Meridian Appraisal Group, Inc.
1331 Sundial Point
Winter Springs, FL 32708
Re Residences at Dr. King Boulevard
RFA 2017-112 / 2018-088C (9% Housing Credits)
Dear Mr. Von:
Please prepare a fully documented narrative appraisal for the above -referenced property. I have attached
to this letter information regarding the Low -Income Housing Tax Credits Program (HC) Funding for this
property and the associated rent restrictions. Please contact me if there is any additional information you
require for this appraisal.
Please add Seltzer Management Group, Inc. as agent for Florida Housing Finance Authority and Seltzer
Management Group, Inc. as an intended user of the appraisal.
Please be advised that Seltzer Management Group, Inc. will rely upon this appraisal in rendering a
decision on financing. Please adhere to the following requirements for the appraisal:
1 _ The objective is to record your opinion of the estimated "market value" of the property in a sufficiently
descriptive manner to enable the reader to understand the estimate and the rationale for the estimate.
The definition of "market value" is the most probable price which a property should bring in a
competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each
acting prudently, knowledgeably, and assuming that the price is not affected by undue stimulus.
Implicit in this assumption is the consummation of the sale of a specified date and the passing of title
from seller to buyer under conditions whereby:
a) Buyer and seller are typically motivated;
b) Both parties are well informed or well-advised, and each is acting in what he considers his own
best interest;
c) A reasonable time is allowed for exposure in the open market;
d) Payment is made in terms of cash and U.S. dollars, or in terms of financial arrangements
comparable thereto;
e) The price represents the normal consideration for the property sold, unaffected by special or
creative financing or sales concessions granted by anyone not associated with the sale.
2. The appraisal should estimate the appraised value of the property based on the following:
Mr. Robert Von, Meridian
August 21, 2019
Page 2
a) The "as is" value of the proposed development site with a separate value for the land, if
applicable.
b)
The value of the development as completed using the income, rent, demographic, and occupancy
restrictions required under the State Apartment Incentive Loan and the Low Income Housing Tax
Credit Program ("HC" or "Housing Credit") utilizing a capitalization rate equal to the mortgage
constant for the MMRB loan, if any. The value of the Housing Credits should be calculated
separately, and should not be added to this value of the property.
c) The value of the development as stabilized using the income, rent, demographic, and occupancy
restrictions required under the HC Program utilizing a capitalization rate equal to the mortgage
constant for the MMRB loan. The value of the Housing Credits should be calculated separately,
and should not be added to this value of the property.
d) The value as completed, using market rents for all units, as if there were no income, rent or
occupancy restrictions on the development, utilizing a market capitalization rate.
e) The value as stabilized, using market rents for all units, as if there were no income, rent or
occupancy restrictions on the development, utilizing a market capitalization rate.
Note: There may be no difference in rents between income restricted units and market rate units.
3. The appraisal should follow a reasonable valuation method, which addresses all recognized
approaches to market value, unless the appraiser fully explains and documents the elimination of an
approach.
4. The appraisal must conform to the Uniform Standards of Professional Appraisal Practice ("USPAP")
adopted by the Appraisal Standards Board of the Appraisal Foundation, except that the Departure
Provision, permitting an appraiser to deviate from the USPAP Standards, shall not apply.
5. The appraisal must disclose steps, if any, that were taken to comply with the Competency Provision
of the USPAP.
6. The appraisal should include a market study prepared by the appraiser to cover, at a minimum, a
discussion of the following items:
a) Comments on historic and current occupancy levels, trends and rental rates for the subject
primary market area ("PMA") and sub -market and whether or not the occupancy levels are
expected to change.
b) Status, extent, and impact of present competition in the market, including any properties under
construction or rehabilitation, properties for which permits have been issued, and properties in the
planning stages in the market area, if they are likely to impact the subject property_
c) Marketability of the subject to the target population (low income, elderly) and appropriateness of
the development's demographic, size and design for the subject market.
7. The appraisal must report and analyze sales data on previous sales of other properties in the market
area for the three years preceding the date on which the appraisal was prepared. Comparable sales
should utilize time periods no longer than these, and, if possible, should reflect sales within the
previous six months.
Mr. Robert Von, Meridian
August 21, 2019
Page 3
8. Under the income approach, the appraisal should analyze comparable operating expenses in
determining operating expenses. Operating expenses should be detailed and address, at a minimum,
the following:
a) Real estate taxes and other taxes
b) Insurance
c) Licenses
d) Operations expenses (fuel, water, sewer, electricity, and trash removal for the complex)
e) Building maintenance
f) Interior and exterior decorating (cleaning and painting of apartments and buildings)
g) Supplies
h) Pool maintenance
i) Parking area maintenance
j) Grounds keeping
k) Non-resident management fees
I) Office payroll
m) Maintenance payroll
n) Leasing and advertising
o) Telephone
p) Legal and audit fees
q) Leased equipment
r) General and administrative
s) Replacement reserves
The appraiser should also estimate an initial deposit and an annual deposit to the replacement reserve,
based upon the consideration given to deterioration of the property during the mortgage term. The
minimum annual reserve for replacement is $300 per unit per year, and must be increased if determined
necessary.
Additionally, when estimating the value of the development in each of the "income and rent restrictions"
scenarios, the appraiser must include the ongoing cost of the required resident programs in the property's
operating expenses. The appraiser should contact the underwriter to verify the required resident
programs and discuss the estimated costs of these programs.
9. Analyze and report a reasonable marketing period for the subject property.
10. Analyze and report on current market conditions and trends that will affect projected income to the
extent that they affect the value of the subject property.
11 Analyze and report appropriate deductions and discounts for any proposed construction, or any
completed properties that are partially leased or leased at other than market rents at the date of the
appraisal.
12. Potential comparable developments that were investigated but excluded must be listed with
information indicating why they were excluded from the analysis. Additionally, information must be
provided on any development that is included in the analysis that is geographically outside of the
subject's PMA or sub -market.
13. In addition to the certification required by the USPAP, an additional statement must be included as
follows:
"This appraisal was not made, nor was the appraisal rendered on the basis of a requested minimum
valuation, specific valuation, or an amount which would result in approval of a loan."
Mr. Robert Von, Meridian
August 21, 2019
Page 4
14. The appraisal must include sufficient supporting documentation with all pertinent information reported
so that the appraiser's logic, reasoning, judgment, and analysis in arriving at a conclusion will indicate
to the reader the reasonableness of the value reported.
15. The appraisal must include a legal description of the real estate being appraised, in addition to the
description required by the USPAP.
16. The appraisal must identify and separately value any personal property, fixtures, or intangible items
that are not real property but are included in the appraisal, and discuss the impact of their inclusion or
exclusion on the estimate of the market value.
17. The appraisal must follow a reasonable valuation method that addresses the direct sales comparison,
the income, and the cost approaches to market value, and reconcile those approaches.
18. If information required or deemed pertinent to the completion of the appraisal is unavailable, that fact
shall be disclosed and explained in the appraisal
19. All assumptions and projections should be supported and should conform to current market
conditions. In the case of income property, the capitalization rate, discount rate, revenues, expenses,
vacancy rates, financing terms, and absorption rate should be reasonable and well documented.
Absorption rate for the subject necessary to reach 92% occupancy beginning with the first certificate
of occupancy. If the primary method to achieve an occupancy rate of at least 92% is by providing
rent concessions, then the expected occupancy rate without rent concessions must be indicated.
Absorption should be itemized in the table of contents, with the projected stabilization date made
clear in the discussion.
20. The appraisal should document and explain how discount and capitalization rates are used in
generating present value estimates, where derived.
21. The appraisal should take into consideration and make provisions for all appropriate deductions and
discounts for any development type property.
22. The complete narrative appraisal should be signed, dated, and returned to:
Keith Whitaker
Credit Underwriter
Seltzer Management Group, Inc., as Agent for Florida Housing Finance Corporation
You may contact the developer for development specific information such as descriptions of the property,
plans, specifications, proposed rents, etc. Any information regarding the terms and restrictions of the
proposed financing or the scope of the appraisal must come from my office.
Your contact with the developer should be limited to gathering information necessary for the appraisal.
This arrangement is solely to expedite your information -gathering process, and is not intended to
authorize any relationship, contractual or otherwise, between your firm and the developer regarding this
development.
This engagement letter does not authorize you to certify the appraisal to the developer, or to provide the
developer with a copy of all or any part of this appraisal without my express written consent.
It is understood and agreed by you, SMG, and the borrower that the requested appraisal is being ordered
by, and shall be provided to SMG.
It is our understanding that the assignment will be completed and delivered no later than 4 weeks
assuming that all requested information is received by you in a timely manner, and that the fee for this
appraisal will be $5,500. This fee will be paid by SMG upon completion and satisfactory review of the
appraisal with respect to compliance with the requirements requested by SMG in this agreement.
Mr. Robert Von, Meridian
August 21, 2019
Page 5
Time is of the essence for this assignment. If the completed appraisal is not delivered to SMG by the
deadline date above, a $50 per business day late penalty will be deducted from the appraisal fee.
Extensions of the deadline may be obtained by requesting an extension in writing prior to the deadline.
Extensions will be granted for circumstances beyond your control (such as failure by the borrower or SMG
to provide information required for the appraisal).
Please forward one electronic copy via e-mail or on disk of the appraisal to my attention at SMG, along
with a copy of this letter signed by you. My e-mail address is frank@seltzermanagement.com. I look
forward to working with you.
Sincerely,
SELTZER MANAGEMENT GROUP, INC.
Justin Coles
Associate Credit Underwriter
Enclosures
The terms of this engagement letter for the appraisal of Residences at Dr. King Boulevard are agreed and
acknowledged by:
Name:/v—
Typed Name: /e9b0 r:t Vcft-‘
Title:
Date: D 2 ' (
RENT & INCOME LIMITS
Note: The general hold harmless provisions of IRC
for newly -released limits use whichever limits
HUD release: 4/24/2019
Implement on or before 6/7/2019
Effective: 4/24/2019
FHFC Posted: 5/2/2019
Section 142(d)(2)(E) mean that projects with at least one building placed in service on or before the end of the 45-day transition period
are greater, the current -year limits or the limits in use the preceding year.
2019 Income Limits and Rent Limits
Florida Housing Finance Corporation
Multifamily Rental Programs (except HOME and SHIP) and CWHIP Homeownership Program
County (Metro)
Percentage
Category
Income Limit by Number of Persons in Household
Rent Limit by Number of Bedrooms in Unit
1
2
3
4
5
6 i
7
8
9
10
0
1
2
3
4
5
Martin County 1
20%
9,020
10,320
11,600
12,880
13,920
14,960
15,980
17,020
18,032
19,062
225
241
290
335
374
412
(Port Saint Lucie MSA)
25%
11,275
12,900
14,500
16,100
17,400
18,700
19,975
21,275
22,540
23,828
281
302
362
418
467
515
28%
12,628
14,448
16,240
18,032
19,488
20,944
22,372
23,828
25,245
26,687
315
338
406
469
523 '
577
30%
13,530
15,480
17,400
19,320
20,880
22,440
23,970
25,530
27,048
28,594
338
362
435
502
561
618
33%
14,883
17,028
19,140
21,252
22,968
24,684
26,367
28,083
29,753
31,453
372
398
478
552
617
680
35%
15,785
18,060
20,300
22,540
24,360
26,180
27,965
29,785
31,556
33,359
394
423
507
586
654
721
40%
18,040
20,640
23,200
25,760
27,840
29,920
31,960
34,040
36,064
38,125
451
483
580
670
748
825
45%
20,295
23,220
26,100
28,980
31,320
33,660
35,955
38,295
40,572
42,890
507
543
652
753
841
928
50%
22,550
25,800
29,000
32,200
34,800
37,400
39,950
42,550
45,080
47,656
563
604
725
837
935
1,031
60%
27,060
30,960
34,800
38,640
41,760
44,880
47,940
51,060
54,096
57,187
676
725
870
1,005
1,122
1,237
70%
31,570
36,120
40,600
45,080
48,720
52,360
55,930
59,570
63,112
66,718
789
846
1,015
1,172
1,309
1,443
Median: 59,500
80%
36,080
41,280
46,400
51,520
55,680
59,840
63,920
68,080
72,128
76,250
902
967
1,160
1,340
1,496
1,650
120%
54,120
61,920
69,600
77,280
83,520
89,760
95,880
102,120
108,192
114,374
1,353
1,450
1,740
2,010
2,244
2,475
140%
63,140
72,240
81,200
90,160
97,440
104,720
111,860
119,140
126,224
133,437
1,578
1,692
2,030
2,345
2,618 ,
2,887
Miami -Dade County
20%
11,860
13,560
15,260
16,940
18,300
19,660
21,020
22,380
23,716
25,071
296
317
381
440
491
542
(Miami -Miami Beach-
25%
14,825
16,950
19,075
21,175
22,875
24,575
26,275
27,975
29,645
31,339
370
397
476
550
614
678
Kendall HMFA;
28%
16,604
18,984
21,364
23,716
25,620
27,524
29,428
31,332
33,202
35,100
415
444
534
616
688
759
Miami -Fort Lauderdale-
30%
17,790
20,340
22,890
25,410
27,450
29,490
31,530
33,570
35,574
37,607
444
476
572
660
737
813
West Palm Beach MSA)
33%
19,569
22,374
25,179
27,951
30,195
32,439
34,683
36,927
39,131
41,367
489
524
629
726
810
895
35%
20,755
23,730
26,705
29,645
32,025
34,405
36,785
39,165
41,503
43,875
518
556
667
770
860
949
40%
23,720
27,120
30,520
33,880
36,600
39,320
42,040
44,760
47,432
50,142
593
635
763
881
983
1,085
45%
26,685
30,510
34,335
38,115
41,175
44,235
47,295
50,355
53,361
56,410
667
714
858
991
1,105
1,220
50%
29,650
33,900
38,150
42,350
45,750
49,150
52,550
55,950
59,290
62,678
741
794
953
1,101
1,228
1,356
60%
35,580
40,680
45,780
50,820
54,900
58,980
63,060
67,140
71,148
75,214
889
953
1,144
1,321
1,474
1,627
70%
41,510
47,460
53,410
59,290
64,050
68,810
73,570
78,330
83,006
87,749
1,037
1,112
1,335
1,541
1,720
1,898
Median: 54,900
80%
47,440
54,240
61,040
67,760
73,200
78,640
84,080
89,520
94,864
100,285
1,186
1,271
1,526
1,762
1,966
2,170
120%
71,160
81,360
91,560
101,640
109,800
117,960
126,120
134,280
142,296
150,427
1,779
1,906
2,289
2,643
2,949
3,255
140%
83,020
94,920
106,820
118,580
128,100
137,620
147,140
156,660
166,012
175,498
2,075
2,224
2,670
3,083
3,440
3,797
Florida Housing Finance Corporation (FHFC) income and rent limits are based upon figures provided by the United States Department of Housing and Urban Development (HUD) and are
subject to change. Updated schedules will be provided when changes occur.
UTILITY ALLOWANCES
Allowances for Tenant -Furnished Utilities And
Other Services
U.S. Department of Housing
and Urban Development
Office of Public and Indian Housing
Locality:
Miami -Dade County. FL (Exc. Homestead)
Date:
Apartment With 5 or More Units; High Rise (1 or 2 exposed walls)
1/1/2019
Utility or Service
Monthly Dollar Allowances; Number of Bedrooms
0 BR
1 BR
2 BR
3 BR
4 BR
5 BR
6 BR
7 BR
8 BR
Heating a Natural Gas
$1
$1
$1
$1
$2
$2
$2
$3
$3
b Electric Resistance
$1
S
$1
$1
$2
$3
$3
$4
$4
c. Heat Pump
$0
$0
$0
$1
$1
$1
$1
$1
d Propane/LPG
$1
$2
$3
$3
$4
$5
$6
$6
$7
Cooking a. Natural Gas
$5
///$6
$8
$10
_
$11
_
$13
$15
$16
_
$18
b Electric
$5
(pp
$10
$11
$13
$15
$16
$18
c Propane/LPG
$11
3 14
$18
$21
$25
$28
$31
$35
$39
Other Electric/Lighting
$24
$31
$38
$45
$52
$59
$66
$74
$83
Air Conditioning
$7
1
$40
$55
$70
$78
$88
$98
Water Heating a Natural Gas
$8
15
$23
$30
$38
$46
$52
W
$58
$64
b. Electric
$6
$13
520
$27
$34
$41
$46
$51
$57
c Propane/LPG
$17
$33
$50
$67
$83
$100
$112
$125
$140
Water a. Miami
$4
S5
S11
$24
$37
$51
$57
$64
$71
b. Hialeah
$11
14
$19
$27
$35
$44
$49
$55
$62
c Opa Locka
$13
$17
$24
$37
$50
$93
$104
$116
$130
d. Other (average)
$9
$12
$18
$29
$41
$63
$71
$79
$88
Sewer a Miami
$7
($8
$44
$67
$90
$101
$113
$126
b Hialeah
$18
05
$37
$56
$75
$96
$108
$120
$134
c Opa Locka
$33
$39
$50
$72
$95
$147
$165
$184
$206
Range/Microwave _
$7
$7
$7
$7
$7
$7
$8
$9
$10
Refrigerator
$7
$7
$7
$7
$7
$7
$8
$9
$10
Gas Fixed Charge Add for any use of natural gas
$14
$14
$14
_ $14
$14
$14
$16
$18
$20_
Trash al Miami City
$32
$32
$32
$32
$32
$32
$36
$40
$45
a2. Unincorporated Dade County
$39
$39
$39
$39
$39
$39
$44
$49
$55
b Hialeah
$30
$30
$30
$30
$30
$30
$34
$38
$42
c Opa Locka
$0
10
$0
i
50
$0
$0
$0
$0
$0
1.Actual Family Allowances To be used by the family to compute allowance.
Complete below for the actual unit rented
Utility or Service
Monthly
Cost
Name of Family
Heating
Cooking
Other Electric
Air Conditioninng
Water Heating
Water & Sewer
Trash Collection
Range/Microwave
Rerigeralor
Gas fixed charge
Total
Address of Unit
Number of Bedrooms
Note 1
Note 2
using septic sewer system, substract charge found in sheet 6_Water Sewer
I using gas for any purpose, add gas fixed charge
DEVELOPER'S PRO -FORMA
Residences at Dr. King Boulevard - Miami, FL
Project Setup
Project Name
aty
County, State
State
Ownership Entity
Development Manager
Development Accountant
Bond Deal No
Credit Rate 9.00%
Building Type High Rise
Project Type New Construction
Qualifying Program 40% @ 60%
Residences at Dr. King Boulevard
Miami
Miami -Dade County, FL
FL
Residences at Dr. King Boulevard, Ltd.
Greg Griffith
Janelle Brennen
of Affordable Housing Units
90.0%
Utility Allowance
Amount
Sq. Ft.
1 Bedroom
77.00
566
Timing
Date (MM/YY) Elapsed Cumulative
Prederelopment Start Date
Closing Date
First Unit Occupied
Last Unit Occupied
Permanent Loan Closing Date
Jun-18
Oct-19
Dec-20
Apr-21
Aug-21
Months
Months
14
4
4
14
18
22
Credit Delivery Schedule
2020
2021
2022
$0
$2,232,641
$2,435,626
Lease -up Information
# of Occupancies upon initial C/O
# of Occupancies per Month
40
20
TYpe
% Units
% SF
% Income
ELI
20.0%
20%
10%
VLI
0.0%
0%
0%
LI
70.0%
70%
78
WKFC
0.0%
0%
0%
MKT
10.0%
10%
12%
Total
100.0%
100.0%
100.0%
Rent Schedule
# of Units
Unit type
VLI/LI/MKT
Unit Sq. Ft.
Rent Limit
2019 Actual Rent
Net Rent
Total Rent Annual
Rent P.S.F.
1 Bedroom
24
ELI
566
30%
$476. 00
$399
114,912
$0.70
1 Bedroom
75
LI
566
60%
$953. 00
$876
788,400
$1.55
1 Bedroom
9
LI
566
80%
$1,012. 00
$935
100,980
$1.65
1 Bedroom
12
MKT
566
140%
$935.00
$935
134,640
$1. 65
Total/Average
120
67,915
94,911
1,138,932
$1.40
Operating Expenses Miami Dade
Administrative
Management Fee (% of EGI)
Utilities
Payroll, Taxes & Benefits
R&M
Insurance
Real Estate Taxes
Security
Replacement Reserves
Total
Total
54,000
67,040
67,800
150,000
93,240
64,560
96,000
57,960
36,000
Per Unit
450
559
565
1,250
777
536
800
483
300
686,600 5,722
Senior Debt Service Coverage 1.51x
Total Debt Service Coverage 1.14x
P.S.F.
(rentable)
$0.80
$0.99
$1.00
$2.21
$1.37
$0.95
$1.41
$0.65
$0.53
Other Income
Per Unit Per Annum
Laundry Income
Cable Income
Parking Income
Other Income
114
11
12,996
1,254
185 21 090
Total Other Income
310 35,340
Residences at Dr King_CUR
Debt
Debt Assumptions
Loan Type Lender Name Loan Amt Interest Rate Amortizing Amo Period Term Monthly Payment Annual Pmt Min DSC Yr 1 Max DSC Yr 1 Yf 1 Min DSC Yr 15 Max DSC Yr 15 Yr 15
Origination
Permanent First Mortgage Unspecified
Construction Loan Unspecified
Forever Bond City of Miami
SURTAX Miami -Dade County
County HOME (Reallocated) Miami -Dade County
County HOME (2019) Miami -Dade County
$5,250,000 4.15%
$24,050,000 5.22%
$2,000,000 1.50%
$2,053,447 1.50%
$938,963 1.50%
$851,094 1.50%
Yes
No
No
No
No
No
420 216 $23,720 $284,645 1.25x
360 30 $104,618 $1,255,410 1.15x
360 360 $2,500 $30,000 1.10x
360 360 $2,567 $30,802 1.10x
360 360 $1,174 $14,084 1.10x
360 360 $1,064 $12,766 1.10x
1.50x 1.51x 1.25x 1.25x 1.60x
1.50x
1.35x 1.37x 1.45x
1.60x 1.25x 1.10x 1.60x 1.32x
1.60x 1.20x 1.10x 1.60x 1.27x
1.60x 1.14x 1.10x 1.60x 1.20x
1.00%
0.75%
1.00%
0.00%
0.00%
0.00%
Perm Rate Buildup
10-Year Treasury bill yield
Spread
Underwriting Cushion
Rate
1.54%
2.41%
0.20%
4.15%
10-yr Treasury
Constr Rate Buildup
30-day LIBOR
Spread
Underwriting Cushion
2.17%
2.05%
0.00%
Interest Reserve 1.00%
Rate
5.22%
LIBOR
ils DDF before subordinate debt In waterfall?
Yes
8/30/201910:51 PM
2 of
Residences at Dr. King Boulevard - Miami, FL
Sources & Uses
Permanent Phase
Sources Ref. Total % Per Unit
Permanent First Mortgage
5,250,000
14.34%
43,750
Construction Loan
-
0.00%
-
Forever Bond
2,000,000
5.46%
16,667
SURTAX
2,053,447
5.61%
17,112
County HOME (Reallocated)
938,963
2.57%
7,825
County HOME (2019)
851,094
2.33%
7,092
Limited Partner Equity
24,480,055
66.88%
204,000
Deferred Developer Fee
1,031,026
2.82%
8,592
Total Sources
36,604,585 100.00% 305,038
Pe manent Phase
Uses Total % Per Unit
Hard Construction Costs
23,250,590
63.52%
193,755
Public Art Fee
353,770
0.97%
2,948
Recreational/Owner Items
310,500
0.85%
2,588
Hard Cost Contingency
5.0%
1,162,530
3.18%
9,688
Construction Interest Expense
1,655,495
4.52%
13,796
Permanent Loan Origination Fee
52,500
0.14%
438
Permanent Loan Closing Costs
53,000
0.14%
442
Construction Loan Origination Fee
180,375
0.49%
1,503
Construction Loan Closing Costs
82,500
0.23%
688
Other Loan Closing Costs
90,000
0.25%
750
Accounting Fees
40,000
0.11%
333
Appraisal
12,770
0.03%
106
Architect Fee - Design
845,000
2.31%
7,042
Architect Fee - Supervision
150,000
0.41%
1,250
Builder's Risk Insurance
70,000
0.19%
583
Building Permit
2.7%
632,816
1.73%
5,273
P&P Bond
171,589
0.47%
1,430
Credit Underwriting Fee
14,230
0.04%
119
Engineering Fee
15,500
0.04%
129
Environmental Report
6,225
0.02%
52
FHFC Administrative Fees
133,984
0.37%
1,117
FHFC Application Fees
3,000
0.01%
25
FHFC Compliance Mon. Fee
209,794
0.57%
1,748
Impact Fees
191,721
0.52%
1,598
Inspection Fees
453,600
1.24%
3,780
Insurance - Property/Liability
66,000
0.18%
550
Legal Fees - Partnership
250,000
0.68%
2,083
Legal Fees - Other
76,777
0.21%
640
Market Study
5,500
0.02%
46
Property Taxes
118,018
0.32%
983
Soil Test Report
12,700
0.03%
106
Survey (Including As -Built)
59,275
0.16%
494
Title Insurance & Recording
279,042
0.76%
2,325
Utility Connection Fee
129,771
0.35%
1,081
Soft Cost Contingency
5.0%
197,366
0.54%
1,645
Sub -Total
31,335,938
Miscellaneous Reserves
3 months
251,088
0.69%
2,092
Land, To Be Acquired
155,621
0.43%
1,297
Developer'sAdmin. & Overhead
4.0%
1,247,219
3.41%
10,393
Developer's Profit
11.5%
3,614,720
9.88%
30,123
Total Project Cost
36,604,585
100.00% 305,038
8/30/2019 10:51 PM 3 of 6
Residences at Dr. King Boulevard - Miami, FL
Eligible Basis/Tax Credit Calculation
Proforma
Eligible Costs Columnl
Enter
Eligible
Total Costs %
Eligible Eligible
Costs Costs
New/Rehab Acquisition
Ineligible
Costs
Hard Construction Costs
23,250,590
96%
22,320,566 -
930,024
Public Art Fee
353,770
100%
353,770 -
-
RecreationaVOwner Items
310,500
100%
310,500 -
-
Hard Cost Contingency
1,162,530
100%
1,162,530 -
-
Construction Interest Expense
1,655,495
62%
1,018,502 -
636,992
Permanent Loan Origination Fee
52,500
0%
- -
52,500
Permanent Loan Closing Costs
53,000
0%
- -
53,000
Construction Loan Origination Fee
180,375
100%
180,375 -
-
Construction Loan Closing Costs
82,500
100%
82,500 -
-
Other Loan Closing Costs
90,000
0%
- -
90,000
Accounting Fees
40,000
100%
40,000 -
-
Appraisal
12,770
100%
12,770 -
-
Architect Fee - Design
845,000
100%
845,000 -
-
Architect Fee - Supervision
150,000
100%
150,000 -
-
Builders Risk Insurance
70,000
100%
70,000 -
-
Building Permit
632,816
100%
632,816 -
-
P&P Bond
171,589
100%
171,589 -
-
Credit Underwriting Fee
14,230
0%
- -
14,230
Engineering Fee
15,500
100%
15,500 -
-
Environmental Report
6,225
100%
6,225 -
-
FHFC Administrative Fees
133,984
0%
- -
133,984
FHFC Application Fees
3,000
0%
- -
3,000
FHFC Compliance Mon. Fee
209,794
0%
- -
209,794
Impact Fees
191,721
100%
191,721 -
-
Inspection Fees
453,600
100%
453,600 -
-
Insurance - Property/Liability
66,000
50%
33,000 -
33,000
Legal Fees - Partnership
250,000
0%
- -
250,000
Legal Fees - Other
76,777
60%
46,066 -
30,711
Market Study
5,500
100%
5,500 -
-
Property Taxes
118,018
100%
118,018 -
-
Soil Test Report
12,700
100%
12,700 -
-
Survey (Including As -Built)
59,275
100%
59,275 -
-
Title Insurance & Recording
279,042
7%
19,932 -
259,110
Utility Connection Fee
129,771
100%
129,771 -
-
Soft Cost Contingency
197,366
75%
148,024 -
49,341
Sub -Total
31,335,938
91%
28,590,251 -
2,745,687
Miscellaneous Reserves
251,088
0%
- -
251,088
Land, To Be Acquired
155,621
0%
- -
155,621
Developers Admin. & Overhead
1,247,219
100%
1,247,219 -
-
Developers Profit
3,614,720
100%
3,614,720 -
-
Total Cost
36,604,585
91%
33,452,190 -
3,152,395
Residences at Dr. King Boulevard - Miami
Eligible Basis/Tax Credit Calculation
Tax Credit Calculation
County
DDA or QCT
Geographic Cap
Maximum Request per unit
Per Unit Cap
Applicable Cap
LI HTC 9% OR 4%
Mia
mi-Dade County, FL
Yes
2,436,070
500,000
60,000,000
2,436,070
9%
Eligible Basis (Rehab & New Construction)
Eligible Basis (Acquisition)
Applicable %
Qualified Basis (Rehab & New Construction)
Qualified Basis (Acquisition)
Credit % Rehab & New Construction (enter here)
Credit % Acquisition (enter here)
Annual Credits
Annual Credits @ Maximum
Annual Credits Per Unit Override
Aggregate Credits (10 Years)
% Syndicated To LP
Price Per Credit
Limited Partner Equity - Rounded
(Enter % -->)
33,452,190
90.00%
39,139,062
9.00%
3.20%
3,522,516
2,436,070
20,301 2,436,070
24,360,700
99.99%
1.005
$ 24,480,055
Tax -Exempt Bond Test (50% Test)
Excess Eligible Basis 10,317,622
Tax Credit Equity Pay -in
Enter %
% Pay -in
Equity in $
Payment Date
Elapsed Months
Cumulative
Months
Draw #
Closing Equity
0%
15.00%
3,670,904
10/01/19
Equity at 25.00%
25%
0.00%
-
02/01/20
4
4
5
Equity at 50.00%
50%
0.00%
-
05/01/20
3
7
8
Equity at 75.00%
75%
0.00%
-
07/01/20
2
9
10
Equity at 99.99%
100%
35.00%
8,568,019
11/01/20
4
13
14
Stabilization Equity & 8609
50.00%
12,241,132
08/01/21
9
22
23
Total
100%
24,480,055
8/30/2019 10:51 PM 4 of 6
Residences at Dr. King Boulevard - Miami, FL
U/W Operating Statement
Income:
Net Rental Income
Reserve For Vacancy
Laundry Income
Cable Income
Other Income
Total Income
Expenses:
Administrative
Management Fee (% of EGI)
Utilities
Payroll, Taxes & Benefits
R&M
Insurance
Real Estate Taxes**
Replacement Reserves
Security
Total Expenses
Net Operating Income
Year 1 Per Unit Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Year 12 Year 13 Year 14 Year 15
1,138, 932 9,491 1,161, 711 1,184, 945 1,208,644 1,232,817 1,257,473 1,282,622 1,308,275 1,334,440 1,361,129 1,388,352 1,416,119 1,444,441 1,473,330 1,502,797
5.0% (56,947) 475 (58,086) (59,247) (60,432) (61,641) (62,874) (64,131) (65,414) (66,722) (68,056) (69,418) (70,806) (72,222) (73,666) (75,140)
12,996 108 13,386 13,787 14,201 14,627 15,066 15,518 15,983 16,463 16,957 17,466 17,990 18,529 19,085 19,658
1,254 10 1,292 1,330 1,370 1,411 1,454 1,497 1,542 1,589 1,636 1,685 1,736 1,788 1,842 1,897
21,090 176 21,723 22,374 23,046 23,737 24,449 25,183 25,938 26,716 27,518 28,343 29,193 30,069 30,971 31,901
1,117, 325 9,311 1,140, 025 1,163,190 1,186, 829 1,210,951 1,235,568 1,260,689 1,286,325 1,312,486 1,339,183 1,366,428 1,394,232 1,422,605 1,451,561 1,481,112
Year 1 Per Unit Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Year 12 Year 13 Year 14 Year 15
54,000 450 55,620 57,289 59,007 60,777 62,601 64,479 66,413 68,406 70,458 72,571 74,749 76,991 79,301 81,680
6.0% 67,040 559 68,402 69,791 71,210 72,657 74,134 75,641 77,179 78,749 80,351 81,986 83,654 85,356 87,094 88,867
67,800 565 69,834 71,929 74,087 76,309 78,599 80,957 83,385 85,887 88,464 91,118 93,851 96,667 99,567 102,554
150,000 1,250 154,500 159,135 163,909 168,826 173,891 179,108 184,481 190,016 195,716 201,587 207,635 213,864 220,280 226,888
93,240 777 96,037 98,918 101,886 104,942 108,091 111,333 114,673 118,114 121,657 125,307 129,066 132,938 136,926 141,034
64,560 538 66,497 68,492 70,546 72,663 74,843 77,088 79,401 81,783 84,236 86,763 89,366 92,047 94,809 97,653
96,000 800 98,880 101,846 104,902 108,049 111,290 114,629 118,068 121,610 125,258 129,016 132,886 136,873 140,979 145,209
57,960 483 59,699 61,490 63,334 65,234 67,192 69,207 71,283 73,422 75,625 77,893 80,230 82,637 85,116 87,670
36,000 300 37,080 38,192 39,338 40,518 41,734 42,986 44,275 45,604 46,972 48,381 49,832 51,327 52,867 54,453
686,600 5,722 706,548 727,083 748,220 769,977 792,374 815,428 839,160 863,589 888,736 914,623 941,270 968,701 996,938 1,026,007
430,726 3,589 433,477 436,107 438,609 440,974 443,194 445,261 447,165 448,897 450,447 451,806 452,962 453,905 454,623 455,105
Debt Service: Year 1 Per Unit Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Year 12 Year 13 Year 14 Year 15
Permanent First Mortgage Service 284,645 2,372 284,645 284,645 284,645 284,645 284,645 284,645 284,645 284,645 284,645 284,645 284,645 284,645 284,645 284,645
Asset Management Fee 3% 5,000 42 5,150 5,305 5,464 5,628 5,796 5,970 6,149 6,334 6,524 6,720 6,921 7,129 7,343 7,563
Deferred Developer Fee 141,081 1,176 121,993 146,158 148,501 150,702 152,753 154,646 15,192 0 0 0 0 0 0 0
Forever Bond Service 30,000 250 30,000 30,000 30,000 30,000 30,000 30,000 30,000 30,000 30,000 30,000 30,000 30,000 30,000 30,000
SURTAX Service 30,802 257 30,802 30,802 30,802 30,802 30,802 30,802 30,802 30,802 30,802 30,802 30,802 30,802 30,802 30,802
County HOME (Reallocated) Service 14,084 117 14,084 14,084 14,084 14,084 14,084 14,084 14,084 14,084 14,084 14,084 14,084 14,084 14,084 14,084
Total Debt Service 518,378 4,320 499,440 523,760 526,261 528,627 530,847 532,913 393,639 378,631 378,821 379,017 379,218 379,426 379,640 379,860
Distributable Cashflow
0 0 0 0 0 0 0 0 80,377 97,117 98,477 99,640 100,594 101,330 101,834 102,096
Beginning DDF 0% 1,031,026 8,592 889,945 767,952 621,794 473,293 322,591 169,838 15,192 0 0 0 0 0 0 0
DDF Repayment 141,081 1,176 121,993 146,158 148,501 150,702 152,753 154,646 15,192 0 0 0 0 0 0 0
Ending DDF 889,945 7,416 767,952 621,794 473,293 322,591 169,838 15,192 0 0 0 0 0 0 0 0
Debt Service Coverage:
Permanent First Mortgage Service 1.51x 1.52x 1.53x 1.54x 1.55x 1.56x 1.56x 1.57x 1.58x 1.58x 1.59x 1.59x 1.59x 1.60x 1.60x
Forever Bond 1.37x 1.38x 1.39x 1.39x 1.40x 1.41x 1.42x 1.42x 1.43x 1.43x 1.44x 1.44x 1.44x 1.44x 1.45x
SURTAX 1.25x 1.25x 1.26x 1.27x 1.28x 1.28x 1.29x 1.29x 1.30x 1.30x 1.31x 1.31x 1.31x 1.32x 1.32x
County HOME (Reallocated) 1.20x 1.21x 1.21x 1.22x 1.23x 1.23x 1.24x 1.24x 1.25x 1.25x 1.26x 1.26x 1.26x 1.26x 1.27x
County HOME (2019) 1.14x 1.15x 1.15x 1.16x 1.17x 1.17x 1.18x 1.18x 1.19x 1.19x 1.19x 1.19x 1.20x 1.20x 1.20x
8/30/2019 10:51 PM 5 of 6
Residences at Dr. King Boulevard -- PROJECTIONS
Mt a Prole& Cost
Revised...
2,:k.°094
60,654,585
REDEVELOPMENT CONSTRUCT.
PROFORMA
551.10 Auo19 566.19
A/66120 (MOO
15 14 13 12 11 10
16
101,82 101,60 217070
Aug,
21 22 23
176g:0'2'96
1534640 211,010 00,062 00,062
r0,000
23,06,948
22:'91,73
60,011,534
36,604,606
0 5, 2 5, 8 5, 18 596 25,P, 36 5, 48 59D 00 5, 71 59D 81 FR 91 5, 96 5, 98,5, IMO, IMO, 1000, IMO, IWO% IMO% IMO% IMO% IWO%
114:2959 ""12 "'"" "'"7 2P'"' 2'5'565 '1.1'9,9790 21;74 2'7154g "rd°0591'9 42;129
• 5,13 23,251 69,752 93,02 104,626 127,78 139,504 139,504 127:678 116,53 116,53 58128 23,01 17,438
I 1 247,0
752781
10 346 12 724 19 421 28 30 0 021 48 07 54 514 67 944 80 399 84 018 95 622 101 820 101 820 101 820 101 820 101 820 101 820 101 820 99 052 99 052 99 052 99 052
9:959
10 00 10 000 10 00 10,000 10 000 10 000 10 00 10 000 10 000 10 00 10 Or 10000 1000
101,020 211,010 00,052 90,052
TAX CREDIT EQUITY SYNDICATION LETTER
Wells Fargo Community Lending and Investment
301 South College Street
Charlotte, NC 28288
Mail Code: D1053-170
704.383.9524
Wells Fargo Community
Lending and Investment
August 13, 2019
Mr. Kenneth Naylor
Atlantic Pacific Companies
1025 Kane Concourse, Suite 215
Bay Harbor, Florida 33154
CC: Howard Cohen
Greg Griffith
Re: The Residences at Dr. King Boulevard
Miami, FL
Dear Mr. Naylor:
Thank you for giving Wells Fargo Community Lending and Investment the opportunity to become your
partner in The Residences at Dr. King Boulevard and to continue to grow our relationship with you. This
term sheet is based upon our prior term sheets and specific transaction underwriting detailed in this term
sheet and in our corresponding financial projections. This term sheet does not limit the terms and
provisions that will be set forth in the Partnership Agreement.
Sincerely,
N
Neal C. Beaton
Senior Vice President
Region& LI41TC Equity Manager
Wells Fargo Community Lending & Investment
301 South College Street, 17th Floor
Charlotte, NC 28288 I MAC D1053-170
Office: 704-383-9524 I Mobile: 704-458-1633
neal.deaton@wellsfargo.com
The Residences at Dr. King Boulevard
August 13, 2019
Wells Fargo Community
Lending and investment
Investment Entity: Residences at Dr, King Boulevard, Ltd., a Florida Limited Partnership (the
"Partnership"), with APC Residences at Dr. King Boulevard, LLC, a single
purpose, bankruptcy remote entity, as Managing General Partner with a 0.0049%
ownership interest in the Partnership, with MLK 62"d Street Apartments, LLC as
Administrative General Partner with a 0.0051 %ownership interest in the Partnership,
and Wells Fargo Community Lending and Investment ("Wells Fargo"), its affiliate or
designee, as Limited Partner, with a 99.99% ownership interest in the Partnership.
Project Name/
Description: The Residences at Dr. King Boulevard is a new construction apartment
development consisting of two (2) buildings (BINS) that will provide 108 units of
affordable housing.
Project Based
Subsidies:
Tax Credits
Available
Net Credit Price
to Partnership:
Net Capital
Contribution:
The site is located at the 1500 &. 1501 NW 62nd Street, Miami, FL. The unit mix
consists of the following:
# Units
Sq. Ft.
Unit Type
% AMI
Rent
24
566
1 BD / 1 BA
30.00%
399
75
566
1 BD 1 1 BA
60.00%
876
9
566
1 BD / 1 BA
80.00%
935
12
566
1 BD I 1 BA - Workforce
Market
935
120
This term sheet assumes no project -based rental subsidies.
$24.358,264 ($24,360,700 x 99.99%)
$1.005
$24,480,055
Page 2 of 15
LEI I i r,
leA lit10
The Residences at Dr. King Boulevard
August 13, 2019
Wells Fargo Community
Lending and Investment
Net Investor Pay In:
Capital Contribution # 1: $3.706,467 (15.141310) at Partnership Closing, anticipated
November 01, 2019, advanced at closing based upon the approved closing draw
schedule, and any remaining funding to be advanced based on percentage of
completion under a construction loan format (approved draws), allocated as follows:
• $ 1,956,467 to pay Construction and other development costs,
▪ $ 1,750,000 to pay Developer Fees. (This Developer Fee payment will
not be released until the Miami Forever Bond Documents are approved by
Wells Fargo and executed.)
Capital Contribution #2: $8,679,834 (35.46%) provided that the construction loan is
not in default, these amounts will be paid upon the latter of(i) Temporary Certificate
of Occupancy for 100% of the units in the property, (ii) lien free construction
completion of the property, performed substantially in accordance with the plans and
specifications, in a workmanlike manner, and as approved by Wells Fargo, (iii)
receipt and approval of an As Built Survey, (iv) receipt and approval of As -Built
Plans, or (v) the subject is placed in service by 12/31/20 or FHFC refreshes the
credits, allocated as follows:
• $ 7,400,000 to pay down the construction loan,
• $ 1,279,834 to pay Developer Fees.
Capital Contribution #3: $11,743,755 (47.97%) upon the occurrence of, (i) Final
Certificate of Occupancy for 100% of the units in the property permanent loan
closing/conversion, (ii) the attainment of a Debt Service Coverage Ratio ("DSCR") of
not less than either (a) 1.15 to 1.00 at the time of conversion, or (b) projected to be
less than 1.15 to 1.00 in any year of the initial Compliance Period, based on the
underwriting parameters, and rates set forth in item #10 on page 11 of this term sheet,
(iii) 100% qualified occupancy, (iv) DraftCost Certification for the Property from the
Accountants setting forth the eligible basis and the total available Tax Credits, (v)
receipt of the tenant file audit from the Accountants, allocated as follows:
• $ 10,490,650 to pay-off the construction loan,
• $ 1,000,000 to pay Developer Fees,
• $ 253,105 to fund the budgeted Operating Reserve.
Capital Contribution ii4: $350,000 (1.43%) upon receipt of IRS Form(s) 8609, Final
Cost Certification, and (a) receipt of Investor K-1 and. Partnership Tax Return which
includes first year LIHTC delivery for each IRS Form(s) 8609 or (b) Accountant
certification of first year LI1-ITC delivery for each IRS Form(s) 8609 received
allocated as follows:
• $ 350,000 to pay Developer Fees.
Please note that all dates are fluid and will be adjusted proportionally (moved
forward or backward) based on the actual closing date provided there is sufficient
time (n Wells Fargo's sole discretion) to complete construction prior to the required
Placed -in -Service date.
Page 3 of 15
The Residences at Dr. king Boulevard
August 13, 2019
Wells Fargo Community
Lending and Investment
Developer Fees:
Guarantors:
Developer Fees are estimated at $4,915,909 of which $536,075 are projected to be
deferred. Deferred Developer Fees shall accrue interest at AFR and be paid as a
priority distribution from available cash flow as described in the "Cash Flow Split"
section of this term sheet. The Managing General Partner agrees to make a special
capital contribution to the Partnership, equal to any unpaid balance of the deferred
portion of the Developer Fees (to the extent required to preserve the L1HTC
allocation), if such portion has not been fully paid within 15 years from the date of
Certificate of Occupancy issuance.
Please note that up to $ 750, 000 of Developer Fee may be used for cost overruns
(increasing Deferred Developer Fee), however no Developer Fee will be advanced
earlier than described in this Term Sheet.
The obligations of the General Partners as set forth in the Partnership
Agreement, including but not limited to those described below, shall be
guaranteed by the entit(ies) receiving the Developer lee, Howard D. Cohen and
Howard D. Cohen Revocable Trust U/A/D 4/6/1993.
Obligations of the
Managing General Partner
and Guarantor(s) Development Completion Guaranty_ The Managing General Partner will guarantee
completion of construction of the Project substantially in accordance with plans and
specifications approved by Wells Fargo, which includes, without limitation, a
guaranty (i) to pay any amounts needed in excess of the construction loan and other
available proceeds (less up to $750,000 in Deferred Developer Fees) to complete the
improvements, (ii) of all amounts necessary to achieve permanent loan closing, and
(iii) to provide unlimited operating deficit loans to the Partnership until all conditions
of Capital Contribution #3 have been satisfied.
The Managing General Partner will provide copies of each draw request, change
orders and all supporting documentation to the Investor Limited Partner
simultaneously with submissions to the construction lender. The Investor Limited
Partner shall have the right to approve change orders in excess of $100,000
individually and $250,000 in the aggregate. The construction contract shall be a fixed
price contract, either a guaranteed rnaximurn contract or a stipulated sum. The
General Construction Contract shall be bonded, a Letter of Credit provided iialo 10%
of the General Construction Contract amount, or Major Subcontracts signed and
bonded on or before closing. The development budget will include adequate reserves
for construction contingencies, expected to be at least five percent (5%) of the
General Construction Contract held outside of the General Construction Contract
(including all hard costs, general requirements, overhead and profit).
Operating Deficit Guaranty: The Managing General Partner agrees to provide
unlimited operating deficit loans to the Partnership until the conditions of Capital
Contribution #3 have been satisfied.
Page 4 of 15
The Residences at Dr. King Boulevard
August 13, 2019
Wells Fargo Community
Lending and Investment
After the conditions of Capital Contribution #3 have been satisfied, (i) the Operating
Reserve may be used to fund Operating Deficits (operating expenses, debt service
obligations, or other expenses of the Partnership approved by the Partners), and (ii)
the operating deficit guarantee will be reduced to $560,000 for at least 36-months.
At the end of the 36-month period, the Operating Deficit Guaranty will be released,
provided (i) the Operating Reserve is fully funded in the amount of $253,105, and (ii)
the project averages 1.15 DSCR or better for the last 12 months of the 36-month
period, or any subsequent 12-month period, measured on an annual basis. The release
criteria will be attested to, and documented by the Partnership Accountants, based on
audited numbers, and delivered to Wells Fargo or its successors.
Tax Credit Adjusters: The Managing General Partner and the Guarantors will
indemnify the Investor Limited Partner for any reduction, recapture, or late delivery
of the Low Income Housing Tax Credits ("LIHTC") in amounts described below.
The Partnership Agreement contains Credit Adjuster provisions designed to preserve
the Investor Limited Partner's yield in the event any expected Credits are not
delivered as projected, as well as an upward credit adjusters for increased Credits for
additional basis capped at $1,000,000 and an upward credit adjuster for delivering
credits faster (leasing faster for example) capped at $350,000.
The projected aggregate LIHTC at equity closing will be determined by the projected
qualified basis of the Partnership multiplied by the published applicable percentage
for the 70% present value credit for the rehab costs and the 30% present value credit
for the acquisition costs or the credit lock rate with the Agency/Authority. This term
sheet assumes a fixed 9.0O% rate for the 70% present value tax credit rate.
If an event occurs which affects the delivery of Federal aggregate LIHTC (e.g.,
shortage in basis in accountants final cost certification, or shortage in amount of
LIHTC's allocated by the Agency/Authority in IRS Forms 8609), then the Partnership
Agreement will provide for a return of capital to the Investor Limited Partner in an
amount equal to the net credit price to the Partnership ($1.005) times the difference
between (i) the projected aggregate LIHTC's, less (ii) the adjusted aggregate
LIHTC's. The Partnership Agreement will provide a similar ea feu la(ion for any
increases to aggregate L1 HTC's.
If an event occurs, which affects the timing and delivery of Federal LIHTC (e.g.,
lease up slower than projected) allocable to the Investor Limited Partner in years
2021, then the Partnership Agreement will provide for a return of such capital, to the
Investor Limited Partner in an amount equal to the net credit price ($1.005) times the
difference between (i) the shortfall in projected current year LIHTC's less (ii) the net
present value of the shortfall in projected current year LIHTC's for a 10 year period
at a discount rate of 5.00%. The Partnership Agreement will provide a similar
calculation for any increases in LIHTC's delivered in years 2020 or 2021 over
amounts projected.
There may be adjustment events occurring during the compliance period not
considered or described in the aforementioned paragraphs. In the event that the
Page 5 of 15
The Residences at Or. King Boulevard
August 13, 2019
Wells Fargo Community
Lending and investment
actual amount of tax credits claimed by the Investor Limited Partner, is less than the
amount specified, then the Managing General Partner shall reimburse the Investor
Limited Partner, on a dollar for dollar basis, for each lost dollar of Credit's plus any
resulting penalties, taxes due, or tax consequences. Similarly, if there is a recapture
of Credit's (except from the sale or transfer of the Investor Limited Partner's interest
in the Partnership). the Managing General Partner shall indemnify the Investor
Limited Partner against any tax credit recapture liability incurred (including interest,
penalties, tax effects, or and any reasonable related legal or accounting costs).
In addition, to the extent any Tax Credit Adjuster owed to the Investor Limited
Partner is solely attributable to a Change in Law then such portion of the credit
adjuster distribution or credit adjuster payment shall only be payable to the
Investor Limited Partner from available Cash Flow and Net Proceeds upon sale or
refinancing, in each case as a first priority distribution.
Repurchase
Obligation. The Managing General Partner will be obligated to repurchase the Investor
Limited Partner's interest in the Partnership should the project fail to meet certain
legal and operational performance criteria as outlined in the Partnership
Agreement. The amount of the purchase price shall equal, as of the actual date of
purchase, the sum of:
a) the aggregate amount of Capital Contributions and advances made by the
Investor Limited Partner to the Partnership (less Credits previously
allocated to the Investor Limited Partner prior to such purchase, but only
to the extent that such Credits are not subject to recapture under the
Code), plus
b) an amount of interest equal to 8% per annum thereon from the date of any
Capital Contribution until the date of the investor Limited Partner's
receipt of the Buyout Price, plus
c) the legal, accounting and internal costs incurred by the Investor Limited
Partner in connection with its investment in the Partnership capped at
$ t OO,000, plus
d) the amount of any interest and penalties imposed on the Investor Limited
Partner as a result of such purchase or its prior claiming of Credits with
respect to the Partnership, plus
e) an amount that, on an After -Tax Basis, equals all transfer taxes or similar
assessments incurred by the Investor Limited Partner in connection with
its investment in the Partnership or the sale of its Interest pursuant to this
Agreement, such amounts representing the parties' good faith estimate of
damages incurred by the Investor Limited Partner.
Incentive Leasing Fee: From the Closing Date to the earlier of (1) Permanent Loan Conversion and (2) 36
months after the Closing Date, if no money is owed to the Limited Partner per the
LPA, Cash Flow shall be payable to the Administrative General Partner and
Managing General Partner(25%/75%) as an Incentive Leasing Fee.
LP Asset Fees: An annual cumulative fee of $5,000, increasing at 3% per annum, payable to Wells
Fargo, commencing on the date Capital Contribution #3 is funded.
Page 6 of 15
The Residences at Dr. Ding Boulevard
August 13, 2019
Wells Fargo Community
Lending and investment
Cush Flow Split: Cash Flow to the Partnership shall be distributed as follows:
A. To Limited Partner in payment of any amounts due as a result of any unpaid
Credit Adjuster Amount.
B. To Limited Partner in payment of LP Asset Management Fees or any unpaid
Asset Management Fees.
C. To the payment of any Loans provided by the Investor Limited Partner,
D. To repay the General Partner Development Loans, with any such payments to
be applied first to accrued but unpaid interest and then to principal and then
to repay any amounts then owed with respect to the Deferred. Developer Fee,
with any such payments to be applied first to accrued but unpaid interest and
then to principal;
E. To replenish operating reserves if below the budgeted $253,105.
F. To the payment of any Deferred Management Fees and then to General
Partner Operating Deficit Loans.
G. To repay Soft Debt, as required.
H. 10% to the Limited Partner.
L 75% to the Managing General Partner and 25% to the Administrative
General Partner,
Residual Split:
Any gain upon sale or refinancing shall be distributed as follows:
A. To Limited Partner in payment of any amounts due because the Actual Credit
is less than the Projected Credit, or there has been a recapture of Credit.
B. To Limited Partner for payment of any unpaid Asset Management Fees.
C. To the payment of any Loans provided by the Investor Limited Partner,
D. To the Limited Partner for payment of any exit taxes.
E. To repay the General Partner Development Loans, with any such payments to
be applied first to accrued but unpaid interest and then to principal and then
to repay any amounts then owed with respect to the Deferred Developer Fee,
with any such payments to be applied first to accrued but unpaid interest and
then to principal;
F. Unless the initial compliance period has expired, to the Operating Reserve
until the balance in the Operating Reserve equals $253,105.
G. To the payment of any Deferred Management Fees and then to Managing
General Partner Operating Deficit Loans.
H. To repay Soft Debt, as required.
1. Of the remaining balance, ten percent (10%) shall be distributed to the
Limited Partner.
J. Disposition Distribution to the Managing General Partner equal to 6% of
Gross Sales Proceeds less 3rd party brokerage or marketing fees.
K. 75% to the Managing General Partner and 25% to the Administrative
General Partner.
The Partners agree that liquidation distributions will be made in accordance with the
positive balances in their respective capital accounts, after taking into account all
adjustments to capital accounts for the year. The Partners further agree that (i) capital
profits will be allocated in a manner to achieve, to the maximum extent possible, the
Page 7 of 15
The Residences at Dr. King Boulevard
August 13, 2019
Wells Fargo Community
Lending and Investment
Right of First Refusal/
Purchase Option:
Partners' intended distributions of sale or refinancing proceeds as described above
and (ii) the allocation provisions in the partnership agreement will be amended, with
the Limited Partner's consent, which shall not be unreasonably withheld if the
General Partners has provided a tax opinion stating that the amended allocations will
comply with the Treasury Regulations, to the extent necessary and permissible to
achieve the Partners' intended distributions of sale or refinancing proceeds as
described above.
At any time beginning an the first day of the first year following the last year of the
Credit Period, and continuing until 24 months after the end of the initial compliance
period, (the "Put Option Period"), the Investor Limited Partner shall have the right to
require that, upon provision of 30 days' written notice, the Administrative General
Partner (or its designee) purchase the entire interest of the Investor Limited Partner
for a purchase price equal to $100 (the "Put Option').
If the Limited Partner does riot exercise the Put Option during the "Put Option
Period", then, at the end of the initial compliance period, and ending two years after
the expiration of the initial compliance period, the Administrative General Partner, if
it is a qualified purchaser, shall have the right, with Investor Limited Partner consent,
to purchase the apartment complex and all related assets and reserves consistent with
the terms of internal Revenue Service Code Section 42(i)(7), and for a price equal to
the sum of (i) all outstanding Partnership debt, including Limited Partner loans, (ii)
any taxes owed by the Investor Limited Partner from the sale, and (iii) any unpaid
portion of any Credit Adjuster payments plus interest due and owing to the Investor
Limited Partner.
Additionally, at the end of the initial compliance period, and ending two years after
the expiration of the initial compliance period, the Managing General Partner shall
have an option to purchase either the (i) Partnership's Assets, or (ii) the Investor
Limited Partner's interest in the Partnership (the "FMV Options") for an amount
equal to the sum of all amounts owed to the Investor Limited Partner under the
Partnership Agreement and associated documents, plus (A) in the case of a sale of the
Partnerships Assets, the greater of (i) the fair market value of the apartment complex
(fair market value to be determined by mutual agreement of the parties and by taking
into account any affordability restrictions applicable to the apartment complex) minus
ordinary and reasonable costs of sale actually incurred or (ii) one dollar $ l .00 plus (a)
the amount of outstanding Partnership debt plus (b) the amount which, if the
Partnership were liquidated, would be sufficient to distribute to the Investor Limited
Partner an after-tax amount equal to the transfer and other taxes incurred by the
Investor Limited Partner upon disposition, plus (c) any unpaid portion of any Credit
Adjuster payments phis interest due and owing to the Investor Limited Partner and
(B) in the case of a sale of the Investor Limited Partner's Interest, the fair market
value of such interest as determined by a qualified appraiser plus any amount owed to
in the Investor Limited Partner.
Note. The fair market value of the Apartment Complex or I LP interest, as applicable shall be determined
by mutual agreement of the parties or. in the absence of such agreement. the General Partner and Wells
Fargo shall select a mutually acceptable appraiser who shall determine the fair market value of the
Apartment Complex, In the event the parties are unable to agree upon an appraiser, each party shall
select an appraiser. if the difference between the two appraisals is within ten percent (10%) ofthe lower
Page 8 of 15
The Residences at Dr. King Boulevard
August 13, 2019
Wells Fargo Convmtutity
Lending and Investment
of the two appraisals, the fair market value shall be the average of the two appraisals. If the difference
between the two appraisals is greater than ten percent (10%) of the lower of the two appraisals, then the
two appraisers shall jointly select a third appraiser. if the two appraisers are unable to jointly select a
third appraiser, either the General Partner or Wells Fargo may, upon written notice to the other, request
that the appointment be made by the American Arbitration Association or its designee. The appraisals
shall take into account any title restrictions and the requirement that the Apartment Complex remain
dedicated for the use oflow-income households pursuant to any restrictions under any loan agreements
or regulatory agreements. i f the third appraisal is less than either of the first two, then fair market value
shall be the average of the two lowest appraisals. If the third appraisal is greater than the first two, then
fair market value shall be the average of the two highest appraisals. If the third appraisal falls between
the previous two appraisals, the fair market value shall be the value established by the third appraisal.
The General Partner and the Investor Limited Partner shall share the cost equally ofany appraiser jointly
selected or shall pay the costs of the appraiser they each select and shall share the cost equally of any
third appraiser. Any appraiser selected pursuant to this section shall be an MAI appraiser with at least
five years of experience in valuing income -restricted multifamily rental property.
Replacement
Reserves: The Partnership will establish a minimum reserve of $300 per unit per annum,
increasing 3% annually, and beginning at the earlier of, permanent loan conversion, or
36 months after equity closing to be held and administered by Wells Fargo,
Operating Reserves: The Partnership will fund an Operating Reserve of $253,105 to be held and
administered by Wells Fargo. Any withdrawal from the Wells Fargo Operating
Reserve shall require the signatures of both the General Partner and the Limited
Partner (not to unreasonably be withheld) and shall be made to pay only operating
expenses, debt service obligations. or other expenses of the Partnership as approved
by the Limited Partner, in the event that there are operating deficits- The funding will
occur at permanent loan conversion (Capital Contribution #3), as described in the
"Net Investor Pay In" section of this term sheet. The Wells Fargo Operating Reserve
shall be used to pay Operating Deficits prior to the General Partner's obligation to
fund Operating Deficits through Operating Deficit Loans
Reporting
Requirements: Among other reporting requirements to the Limited Partner (i) the Managing General
Partner will have at least 75 days, after the end of the Partnership taxable year, to
provide all Schedules K-1 for the Partnership, and (ii) during the lease -up period, the
Managing General Partner will have at least 30 days after the end of each month, to
provide (a) Partnership income and expenses for the month, and (b) copies of the rent
rolls.
Other Notes and
Conditions:
Wells Fargo reserves the right to adjust pricing andfor Capital Contributions herein
based on Wells Fargo's due diligence, which includes verification of the following
information:
1) The Managing General Partner must have firm comtnitment(s) for construction
and fixed-rate permanent financing with terms, conditions and lender(s)
acceptable to Wells Fargo. The amount(s) assumed for this term sheet are as
fol lows:
Page 9 of 15
The Residences at Dr. King Boulevard
August 13, 2019
Wells Fargo Community
Lending and Investment
• $20,750,000 Construction Loan from Wells Fargo, The loan will have a
variable rate of interest, an initial term of at least 30 months, one 6-month
extension option, and be repaid from equity and permanent proceeds.
[$5,250,000] Permanent Loan from Citi. This term sheet assumes that the
loan will bear a fixed interest rate of approximately [4.36%], with a [35]-year
amortization period, and a [16]-year maturity.
• [52,053,447] Surtax Construction/Permanent Loan. This term sheet
assumes that the loan will bear a fixed simple interest rate of approximately
[1.50%], with a [30]-year amortization period, and a [30]-year maturity, and
require payment from available cash flow only.
• [S938,9631 County HOME (Reallocation) Construction/Permanent
Loan. This term sheet assumes that the loan will bear a fixed simple interest
rate of approximately [1.50N, with a [30]-year amortization period, and a
[30]-year maturity, and require payment from available cash flow only.
• [$851,0941 County HOME 2019 Construction/Permanent Loan. This
term sheet assumes that the loan will bear a fixed simple interest rate of
approximately [ 1.50%], with a [30]-year amortization period, and a [30]-year
maturity, and require payment from available cash flow only.
• [S2,000,000j Miami Forever Construction/Permanent Loan. This term
sheet assumes that the loan will bear a fixed simple interest rate of
approximately [1.50%]. with a [30]-year amortization period, and a [30]-year
maturity, and require payment from available cash flow only.
2) Wells Fargo will request Development Team Profiles demonstrating the experience
and expertise of the General Partner(s), Guarantor(s), Contractor and Management
Agent, and information sufficient to perform a management Partnership review
(marketing plan, etc.). We will also request the personal and/or corporate financial
statements, tax returns, real estate schedules, cash flow schedules, and background
checks on the General Partner(s), general contractor, and guarantor(s). We will
require accurate construction and development budgets. An equity closing will also
be contingent upon receipt, review and approval of environmental, geotechnical,
structural, and geological reports, site inspection, appraisal, market study, Final Plans
& Specifications, fixed price construction contract, contractor bonding, cash flow
projections if applicable, and all leases. Wells Fargo shall also request such other
documents, instruments and certificates including, without limitation, opinions and
other assurances, as Wells Fargo or their respective counsel may reasonably require.
3) The Investor Limited Partner will engage an inspecting engineer to review the
project plans and specifications prior to Partnership close. Wells Fargo debt and
equity will rely on the same inspecting engineer to conduct their review. The cost of
this service will be paid by the Partnership. The costs of inspections on monthly
draws will also be paid by the Partnership, and will be capped at a TBn contracted
amount. Wells Fargo will pay for the plan and cost review_
4) The General Construction Contract shall be bonded, a Letter of Credit provided
ilalo 10°/0 of the General Construction Contract amount, or Major Subcontracts signed
and bonded on or before closing.
Page 0 of 15
The Residences at Dr. King Boulevard
August 13, 2019
Wells Fargo Community
Lending and Investment
5) The Development Budget will include hard cost construction contingencies of at
least 5% of the General Construction Contract, The aforementioned hard cost
construction contingency will be budgeted separate and apart from any amounts
included in the General Construction Contract.
6) Wells Fargo approves APCM as Management Company.
7) The Accountants for the Partnership shall be either CohnReznick, Novogradac,
Tidwell or another accounting firm approved by Wells Fargo, The Accountants shall
prepare tax and financial reports as set forth in the Partnership Agreement, including
the final cost certification.
8) The Capital Contributions are based on a projected Credit allocation to the Wells
Fargo Partner as follows:
Year
Federal Low Income
Housing Tax Credits
2020
0
2021
2,232,841
2022
2,435,826
2023
2,435,826
2024
2,435,826
2025
2,435,826
2026
2,435,826
2027
2,435,826
2028
2,435,826
2029
2,435,826
2030
2,435,826
2031
202,985
Totals
524„3S8,260
*Assumes 420)(1} election in 2020.
The credit allocations were derived based upon the following lease up schedule.
Month
Year
LIIITC
Units Rented
Market
Units Rented
TOTAL
UNITS
RENTED
December
2020
24
12
36
January
2021
24
0
24
February
2021
24
0
24
March
2021
24 _
0
24
April
2021
12
0
12
Total Units
108
12
120
9) The Partnership Agreement will contain provisions requiring Investor approval to
convert to permanent financing based on the following conditions:
Page 11 of 15
The Residences at Dr. King Boulevard
August 13, 2019
Wells Fargo Community
Lending and Investment
a) Subject to final underwriting:
i. The size of the permanent debt, which requires must -pay periodic
payments, may not be in excess of [$5,250,000].
ii, The annually required must -pay debt service on the property may
not be in excess of [$292,716].
ili. The annualized Debt Service Coverage Ratio must not be either (a)
less than 1.15 to 1.00 at the time of conversion, or (b) projected to
be less than 1.15 to 1.00 in any year of the initial Compliance
Period, based on the underwriting parameters, and rates of
escalation, as set forth below.
b) Subject to final underwriting, the loan terms for the permanent financing
described above, are expected to have the following terms:
i. [Citi Permanent Loanl — bear an interest rate of [4.36%] and loan
amortization of [420] months.
c) Subject to final underwriting, rents will assume to escalate at 2% per year,
d) Subject to final underwriting, at the time of conversion, the underwritten
rents will be based on actual rents received from tenants in occupancy under
signed leases, after giving effect to any rent concessions by spreading the
amount of such concessions evenly over the term of the lease,
e) Rents for units having rental subsidies of any kind will be assumed to be the
lesser of permissible rents under the subject subsidy and permissible rents
under Section 42 af the Code, however, Rents from rent subsidies received
from a HAP contract with a term of at least 15 years will be assumed to be
the Rents received from the HAP Contract,
f} Subject to final underwriting, Other Income will be the lesser of (i) $30,757
($32,376 less 5.0% vacancy)*, or (ii) actual other income,
g) Subject to final underwriting, vacancies will be assumed to be the greater of
(i) 5.0% or (ii) actual vacancy,
h) Subject to final underwriting, annual operating expenses will be underwritten
at the greater of (i) actual annual operating expenses (estimated at
conversion), or (ii) $6,000 per unit per annum ("PUPA"), inclusive of
replacement reserves of $300 PUPA,
i) Subject to final underwriting, expenses will assume to escalate at the rate of
3% per year.
10) If the project has soft debt financing, Wells Fargo will require a residual analysis
that shows that any soft debt financing will be repaid at the end ofthe respective soft
debt term.
11) Transactional structure, including cash flow allocations, residual splits, special
allocation of losses, economic substance and tax allocations are subject to approval
by legal counsel.
12) The following dates were assumed for this term sheet:
Partnership Closing 11 f0112019
Certificate of Occupancy 1 I /01 /2020
Start of lease up 11 /0112020
Perm Loan Conversion/Stabilization ..... 08/01/2021
Page 12of15
The Residences at Dr. King Boulevard
August 13, 2019
Wells Fargo Community
Lending and Investment
13) Prior to closing the equity transaction, Wells Fargo will receive, review. and
accept, a letter from the Partnership Accountants, or other acceptable third party,
stating which site work costs are includable in eligible basis.
14) To help fight the funding of terrorism and money laundering activities, Federal
law requires all financial institutions to obtain, verify and record information that
identifies each person or corporation who opens an account and/or enters into a
business relationship.
15) The General Partner will cause the Partnership to elect under Code Section
163(j)(7)(B) to be an "electing real property trade or business," with the result
that the Partnership will not be subject to the business interest deduction limit
under Code Section 163(j)(1), the project will be subject to the alternative
depreciation system (depreciation of each building over 30 years rather than
27.5 years), and the Administrative General Partner will NOT be required to
make Ian election to be treated as a corporation or] a Code Sec. 168(h)(6)(F)
elections to avoid treatment as a tax-exempt entity. No Bonus Depreciation will
be assumed for Sitework or Personal Property.
16) In the event of an impasse between the GP Members the decision of AP shall
control, subject to any right of the Investor Limited Partner to Consent.
17) The. AP Guarantors shall maintain minimum Liquidity of$2,500,000 and a
minimum Tangible Net Worth of $15,O0O,000 throughout the compliance
period.
18) The General Partner plans to elect the income averaging method for the
satisfaction of the minimum set -aside requirements of Section 42, as enacted by
the Consolidated Appropriations Act of 2018. The planned unit elections are
outlined in the Rent Table of this term sheet and must be approved by FL
Housing and Lenders before closing. The Limited Partner will require
modifications to the Project Documents to address risks associated with
compliance. Furthermore, it is required that AP remain as Compliance
Manager throughout the 15-year compliance period unless withdrawal or
replacement is approved by the Limited Partner.
Due Diligence
Process: When Wells Fargo has received an executed copy of their proposal, a Due Diligence
Period will begin. The Due Diligence Period will be the greater of (i) a period of 30
business days, or (ii) a period which allows Wells Fargo at least 30 days after receipt
of the last major/critical due diligence item to perform their review (as tracked by
Wells Fargo's Due Diligence Checklist), during which tirne the Limited Partner will
conduct a Due Diligence review and negotiate with the General Partner, in good faith,
the open terms. if any, of their proposal.
The Due Diligence review may include such matters as the verification of factual
representations made by the General Partner; a review of the Project documents; site
visit; and an evaluation of the General Partner's financial capacity to perform under
the terms and conditions of this proposal and the Partnership Agreement; the
experience and expertise of the General Partner, Guarantor(s), Contractor and
Page 13 of 15
The Residences at Dr. King Boulevard
August 13, 2019
Wells Fargo Community
Lending and Investment
Legal, Closing, and
other Expense:
Management Agent; the project area market; the construction schedule; the residual
potential of the property; and other relevant factors. The review will also include a
plan cost review. If the permanent lender does not require this, then cost of such
review will be the responsibility of the Partnership. In addition, the costs of
inspections on monthly draws will be the cost of the Partnership if not available from
the permanent lender.
Prior to the termination of the Due Diligence Period, Wells Fargo will approve
("Approval"), approve with conditions, or reject the terms and structure of the
proposed investment. Upon Approval, both parties will reaffirm their intent to enter
into the Partnership Agreement upon the terms specified in this proposal.
If Wells Fargo reaffirms their proposal prior to the termination of the Due Diligence
Period. but, the General Partner has offered the interest to another purchaser, the
General Partner will be responsible for reimbursing Wells Fargo for all third party
costs incurred in conducting the Due Diligence Review, including, but not limited to,
legal fees, a market study, an appraisal, a background investigation and site visits.
Not a Binding
Contract: The purpose of this Term Sheet is to generally describe an investment Wells Fargo is
considering. This Term Sheet is not a commitment to invest nor a commitment to be
bound by the terms proposed herein, and no commitment to invest will exist prior to
the negotiation and execution of a mutually satisfactory Operating Agreement or
Partnership Agreement. Except with respect to confidentiality provisions and
reimbursement obligations contained herein, it is expressly understood and the parties
expressly agree that this Term Sheet does not create a legally binding agreement as to
any of the parties. In addition, the terms contained herein are subject to change upon
the completion of the Bank's due diligence, and as may be required pursuant to the
Bank's applicable investment criteria, credit policies, or underwriting standards as
may be in effect from time to time, along with other factors relevant to making an
investment decision.
Confidentiality:
Pricing and other financial terms are based on the tax and other laws in effect as of
the date hereof. Thus, any proposed or actual modifications to federal or state
laws, including, but not limited to, changes to federal and state tax laws, rules and
regulations, may result in changes to the prices and terms reflected in this term
sheet.
Except with regard to the confidentiality obligations, this Term Sheet does not survive
Closing of the transaction. This Term Sheet shall not limit or modify in any way the
terms and conditions ultimately contained in a Partnership Agreement or related
agreements.
The recipient of this Term Sheet agrees to keep all terns of this Term Sheet
confidential, and shall not disclose the terms of this Term Sheet to any third party
other than their attorneys, accountants, lenders, State Agencies or tax advisors, who
must in turn treat that disclosure as confidential. Notwithstanding the foregoing,
nothing contained herein shall be deemed to limit, in any way, the disclosure of the
tax treatment or tax structure of the transaction to third parties.
Page 14 of 15
WrrL,1eN
PAfiOF)
The Residences at Dr. King Boulevard
August 13, 2019
Wells Fargo Community
Lending and Investment
Expiration:
This Term Sheet must be executed and returned no later than August 31, 2014 or the
proposal will expire.
Agreed and Accepted this
By:
Date:
The purpose of this Term Sheet is to generally describe an investment the investment Limited Partner is considering. These terms aresutrjeet to
change upon the completion of the investor Limited Partner's Due Diligence, and as may he required pursuant to the investor Limited
Pariner's applicable investment criteria, credit policies, or underwriting standards as may he in effect from time to time, along with other factors
relevant to making an investment decision. These terms may not be changed orntherwise modified orally. This 1gem Sheet does not survive
Closing of the transaction,
This correspondence is not a commitment to invest, and no commitment to invest will exist prior to the negotiation and execution ofa mutually
satisfactory Partnership Agreement,
Page 15 of 15
ACTUAL CASH VALUE
Actual Cash Value Calculation*
Property Name:
Residences at Dr. King Blvd. North Building
Street Address:
NW/C Dr. King Blvd. & NW 15th Ave.
City, County, State, Zip
Miami Miami -Dade Floirda
33147
BASE COST BUILDING
Main Structure
Sprinkler
Other
Adjustments and/or Multipliers
TOTAL BASE COST PER SQ. FT
Building Area Square Footage
$113.75 PSF
$2.25
$0.00
0.9883
$114.64
33,780 SF
REPLACEMENT COST NEW APARTMENT UNITS $3,872,539
OTHER COSTS
Elevators Included
Soft Costs $935,000
Personal Property/Appliances/Office FF & E $120,000
Balconies, Corridors, Common Areas, etc. (Multi -family only) $219,375
TOTAL OTHER COSTS $1,274,375
TOTAL BUILDING REPLACEMENT COST NEW
Total Replacement Cost New
Plus Other Costs
Total Building Replacement Cost New
$3,872,539
$1,274,375
$5,146,914
LESS DEPRECIATION
Total Accrued Depreciation (New) $0
ACTUAL CASH VALUE BUILDING $5,146,914 *
DIVIDED BY NUMBER OF FLOORS 7
ACV PER FLOOR $735,273
ROUNDED TO $740,000
1( Base Cost includes Contractor's overhead & profit- taken from Marshall & Swift)
*We are not experts in cost estimating. This appraisal report was prepared for the intended use of
financing purposes and the "actual cash value" should not be relied upon for insurance purposes.
We recommend that a qualified cost estimator be used for an accurate "actual cash value" estimate.
Actual Cash Value Calculation*
Property Name:
Residences at Dr. King Blvd. South Building
Street Address:
SW/C Dr. King Blvd. & NW 15th Ave.
City, County, State, Zip:
Miami Miami -Dade Floirda
33147
BASE COST BUILDING
Main Structure
Sprinkler
Other
Adjustments and/or Multipliers
TOTAL BASE COST PER SQ. FT
Building Area Square Footage
$113.75 PSF
$2.25
$0.00
0.9883
$114.64
33,780 SF
REPLACEMENT COST NEW APARTMENT UNITS $3,872,539
OTHER COSTS
Elevators Included
Soft Costs $935,000
Personal Property/Appliances/Office FF & E $120,000
Balconies, Corridors, Common Areas, etc. (Multi -family only) $1,019,375
TOTAL OTHER COSTS $2,074,375
TOTAL BUILDING REPLACEMENT COST NEW
Total Replacement Cost New
Plus Other Costs
Total Building Replacement Cost New
$3,872,539
$2,074,375
$5,946,914
LESS DEPRECIATION
Total Accrued Depreciation (New) $0
ACTUAL CASH VALUE BUILDING $5,946,914 *
DIVIDED BY NUMBER OF FLOORS 5
ACV PER FLOOR $1,189,383
ROUNDED TO $1,190,000
1( Base Cost includes Contractor's overhead & profit- taken from Marshall & Swift)
*We are not experts in cost estimating. This appraisal report was prepared for the intended use of
financing purposes and the "actual cash value" should not be relied upon for insurance purposes.
We recommend that a qualified cost estimator be used for an accurate "actual cash value" estimate.