two properties - Reno-Tahoe International Airport

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two properties - Reno-Tahoe International Airport
A SUMMARY APPRAISAL
OF
TWO PROPERTIES
LOCATED ON
THE RENO-STEAD AIRPORT
AT
THE NORTHEAST AND NORTHWEST CORNERS OF
ARMY AVIATION DRIVE AND ALPHA AVENUE,
RENO, WASHOE COUNTY, NEVADA
OWNED BY
THE RENO-TAHOE AIRPORT AUTHORITY
PREPARED FOR
THE RENO-TAHOE AIRPORT AUTHORITY
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JOHNSON PERKINS & ASSOCIATES, INC.
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A Summary Appraisal
Of
Two Properties
Located On
The Reno-Stead Airport
At
The Northeast and Northwest Corners Of
Army Aviation Drive and Alpha Avenue,
Reno, Washoe County, Nevada
Owned By
The Reno-Tahoe Airport Authority
Prepared For
The Reno-Tahoe Airport Authority
For the Purpose of
Estimating Market Value
As of
January 6, 2014
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JOHNSON PERKINS & ASSOCIATES, INC.
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Main Office: 295 Holcomb Avenue, Suite 1 ■ Reno, Nevada 89502 ■ Telephone (775) 322-1155
Lake Tahoe Office: P.O. Box 11430 ■ Zephyr Cove, Nevada 89448 ■ Telephone (775) 588-4787
FAX: Main Office (775) 322-1156 ■ Lake Tahoe Office (775) 588-8295
E-mail: [email protected][email protected]
Stephen R. Johnson, MAI, SREA
Karen K. Sanders
Reese Perkins, MAI, SRA
Gregory D. Ruzzine
Cynthia Johnson, SRA
Chad Gerken
Cindy Lund Fogel, MAI
Scott Q. Griffin, MAI
Daniel B. Oaks, MAI
Benjamin Q. Johnson, MAI
January 27, 2014
Mr. David Mieding
Real Estate Supervisor
Reno-Tahoe Airport Authority
P.O. Box 12490
Reno, Nevada 89510-2490
Re:
Two Parcels of Land at the Reno-Stead Airport, Reno, Washoe County, Nevada
Dear Mr. Mieding:
This is in response to your request for an appraisal report of two properties located at
the Reno-Stead Airport, situated in the Reno-Stead area of Washoe County, Nevada.
Subject Property 1 is located on the northwest corner of Army Aviation Drive and
Alpha Avenue and contains 90± acres. Subject Property 1 is currently vacant and
unimproved. Subject Property 2 is located on the northeast corner of Army Aviation Drive
and Alpha Avenue and contains 3.57± acres of net usable land area. Subject Property 2 is
improved with asphalt paved interior taxiways, as it had been planned to be developed with a
hangar project for cold storage of small aircraft. The subject properties are identified as
portions of Washoe County Assessor's Parcel Number 086-240-11. The subject properties are
owned by the Reno-Tahoe Airport Authority. The subject properties are more completely
described in the following report.
The appraisal report has been prepared for the purpose of estimating the fee simple
Market Value of each of the subject properties as of a current date of value. We have also
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been requested to provide an analysis addressing the Market Ground Rent of each of the
subject properties. The intended users of the appraisal report include the Reno-Tahoe Airport
Authority and their representatives. The intended use of the appraisal report is to assist the
client in negotiations to lease the subject properties. Any other use of the appraisal report
requires the prior written authorization of these appraisers.
This is an Appraisal Report and adheres to the reporting requirements set forth under
Standards Rule 2-2(a) of the Uniform Standards of Professional Appraisal Practice for an
Appraisal Report. As such, it presents summary discussions of the data, reasoning and
analyses that are used in the appraisal process to develop the appraisers’ opinion of value.
Supporting documentation concerning the data, reasoning and analyses is retained in these
appraisers’ files. The depth of the discussion contained in the report is specific to the needs of
the client and for the intended use as stated herein. This appraisal firm is not responsible for
unauthorized use of the report.
The appraisal has been prepared based upon the following Extraordinary Assumption:

As per the client’s instructions, this analysis has been prepared under the
assumptions that the subject will be leased on a long-term, NNN, basis.
The appraisal has been prepared based upon the following hypothetical condition:

The land areas for the subject properties were provided by the Reno-Tahoe
Airport Authority and are assumed to be correct.
After careful consideration of all data available, and upon thorough personal
investigation of the subject properties and the comparable properties analyzed, the Market
Value and Market Land Rent of the subject properties, under the special assumptions set forth
herein, as of January 6, 2014, are as follows:
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MARKET VALUE AND MARKET LAND RENT CONCLUSIONS
SUBJECT PROPERTY 1 - 90± ACRE SITE
LAND VALUE CONCLUSION – PER SQUARE FOOT
$2.00/SF
FINAL MARKET VALUE CONCLUSION
(Fee Simple Interest, as of January 6, 2014)
MARKET LAND RENT CONCLUSION
(Subject Property 1 – 90± Acres)
$7,850,000
$.16 Per S.F. Per YEAR
MARKET VALUE AND MARKET LAND RENT CONCLUSIONS
SUBJECT PROPERTY 2 - 3.57± ACRE SITE
LAND VALUE CONCLUSION – PER SQUARE FOOT
$3.00/SF
FINAL MARKET VALUE CONCLUSION
(Fee Simple Interest, as of January 6, 2014)
$465,000
MARKET LAND RENT CONCLUSION
$0.24 Per S.F. Per YEAR
(Subject Property 2 – 3.57± Acres – Net Useable Land Area)
Respectfully submitted,
______________________________
Stephen R. Johnson, MAI, SREA
Nevada Certified General Appraiser
License Number A.0000003-CG
Cindy Lund Fogel, MAI
Nevada Certified General Appraiser
License Number A.0002312-CG
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TABLE OF CONTENTS
Cover
Title Page
Letter of Transmittal
Table of Contents
Page
Summary of Salient Facts and Important Conclusions
Property Rights Appraised
Market Values Defined
Scope of Appraisal
Reno-Sparks/North Valley Area Map
Neighborhood Map
Neighborhood Description
Industrial Market Analysis
Subject Aerial Photograph
Subject Photographs
Subject Plot Map
Subject Parcel Map
Subject Zoning Map
Subject Master Plan Map
Subject Flood Zone Map
Property Identification and Site Description
Highest and Best Use Analysis
Introduction to Valuation Analysis
1
3
4
6
8
9
10
17
22
23
29
30
31
32
33
34
43
48
Subject Property 1
Sales Comparison Approach
Comparable Industrial Land Sales Chart
Comparable Land Sales Map
Comparable Land Sale Aerial Map and Discussions
Comparable Land Sales Discussion And Comparison
49
50
51
52
60
Subject Property 2
Sales Comparison Approach
Comparable Industrial Land Sales Chart
Comparable Land Sale Aerial Map and Discussions
Comparable Land Sales Discussion And Comparison
67
68
69
74
Market Rental Analysis
Appraiser’s Certification
Standard Assumptions and Limiting Conditions
Qualifications of Appraisers
81
86
88
95
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SUMMARY OF SALIENT FACTS AND IMPORTANT CONCLUSIONS
Assessor’s Parcel Number
Location
Subject Property One
Subject Property Two
Portions of 086-240-11
Industrial Land at the Reno-Stead Airport
Northwest corner of Army Aviation Drive and
Alpha Avenue, Reno, Washoe County, Nevada
Aeronautical Land at the Reno-Stead Airport
Northeast corner of Army Aviation Drive and
Alpha Avenue, Reno, Washoe County, Nevada
Legal Description
Portions of Parcel 4 of Parcel Map No. 5018, as
shown on that certain map entitled “Parcel Map
for Reno-Tahoe Airport Authority” as filed on
December 14, 2009 as File No. 3829772, in the
office of the County Recorder of Washoe
County, Nevada.
Owner of Record
Reno-Tahoe Airport Authority
Shape
Subject Property One
Subject Property Two
Land Area
Subject Property One
Subject Property Two
Rectangular
Rectangular
90± Acres (3,920,400± Square Feet)
3.57± Acres (155,509± Square Feet)-Net Usable
Land Area
The land areas for the subject properties were
provided by the Reno-Tahoe Airport Authority
and are assumed to be correct.
Current Use
Vacant Industrial and Aeronautical Land
City of Reno Zoning
(MURS) Mixed Use Reno Stead Airport
City of Reno Land Use
SPD-Reno-Stead Airport Regional Center
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Highest and Best Use
As Vacant
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Future development with airport related
utilizations such as commercial aviation or other
airport support uses and/or commercial or
industrial uses as allowed under the current
zoning. Due to the large size of Subject Property
1, it is our expectation that development would
most likely occur in phases over an extended
time period.
Property Rights Appraised
Fee Simple Market Value and Market Rent
Type of Report
Appraisal Report
Effective Date of Valuation
January 6, 2014
Date of Report
January 27, 2014
MARKET VALUE AND MARKET LAND RENT CONCLUSIONS
SUBJECT PROPERTY 1 - 90± ACRE SITE
LAND VALUE CONCLUSION – PER SQUARE FOOT
FINAL MARKET VALUE CONCLUSION
(Fee Simple Interest, as of January 6, 2014)
MARKET LAND RENT CONCLUSION
(Subject Property 1 – 90± Acres)
$2.00/SF
$7,850,000
$.16 Per S.F. Per YEAR
MARKET VALUE AND MARKET LAND RENT CONCLUSIONS
SUBJECT PROPERTY 2 - 3.57± ACRE SITE
LAND VALUE CONCLUSION – PER SQUARE FOOT
$3.00/SF
FINAL MARKET VALUE CONCLUSION
(Fee Simple Interest, as of January 6, 2014)
$465,000
MARKET LAND RENT CONCLUSION
$0.24 Per S.F. Per YEAR
(Subject Property 2 – 3.57± Acres – Net Useable Land Area)
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PROPERTY RIGHTS APPRAISED
The property rights being appraised are the fee simple Market Value and the Market
Ground Rent of each of the subject properties.
INTENDED USE OF APPRAISAL
It is our understanding that the Market Value and Market Rent will be utilized by the
client, the Reno-Tahoe Airport Authority, in negotiations in regards to potential land leases of
the subject sites. Any other use of this appraisal report requires the prior written authorization
of these appraisers.
INTENDED USERS OF APPRAISAL
The intended users of this appraisal include the Reno-Tahoe Airport Authority and
their representatives.
DATE OF INSPECTION
The subject property was inspected on January 6, 2014.
EFFECTIVE DATE OF VALUATION
The opinions of value, as set forth in this report, apply as of January 6, 2014.
COMPLETION DATE OF REPORT
This report was completed on January 27, 2014.
FEE SIMPLE ESTATE DEFINED
Fee simple estate is defined as “Absolute ownership unencumbered by any other
interest or estate, subject only to the limitations imposed by the governmental powers of
taxation, eminent domain, police power, and escheat.”1
1
Source: The Dictionary of Real Estate Appraisal, Fifth Edition, Appraisal Institute, 2010, page 78.
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MARKET VALUE DEFINED
Market Value means the most probable price which a property should bring in a
competitive and open market under all conditions requisite to a fair sale, the buyer and seller
each acting prudently and knowledgeably, and assuming the price is not affected by undue
stimulus. Implicit in this definition is the consummation of a sale as of a specified date and
the passing of title from seller to buyer under conditions whereby:
1)
Buyer and seller are typically motivated;
2)
Both parties are well informed or well advised, and acting in what they
consider their own best interests;
3)
A reasonable time is allowed for exposure in the open market;
4)
Payment is made in terms of cash in U.S. dollars or in terms of financial
arrangements comparable thereto; and
5)
The price represents the normal consideration for the property sold unaffected
by special or creative financing or sales concessions granted by anyone
associated with the sale.2
2
Rules and Regulations, Federal Register, Vol. 55, No. 165, Page 34696, 12CFR Part 34.42(f)
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MARKET RENT DEFINED
Market Rent is defined as the most probable rent that a property should bring in a
competitive and open market, reflecting all conditions and restrictions of the lease agreement,
including a term, permitted uses, use restrictions, expense obligations, term, concessions,
renewal and purchase options, and tenant improvements.3
This definition is predicated on the lessee and lessor each acting prudently and
knowledgably, and assuming consummation of a lease contract as of a specified date, and the
passing of the leasehold from lessor to lessee under conditions whereby:
1.
Lessee and lessor are typically motivated.
2.
Both parties are well informed or well advised, and acting in what they
consider their best interest.
3.
A reasonable time is allowed for exposure in the open market.
4.
The rent payment is made in terms of cash in United States dollars, and is
expressed as an amount per time period consistent with the payment schedule
of the lease contract.
5.
The rental amount represents the normal consideration of the property leased
unaffected by special fees or concessions granted by anyone associated with
the transaction.
3
The Dictionary of Real Estate Appraisal, Fifth Edition; Appraisal Institute; 2010.
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SCOPE OF APPRAISAL
The preparation of this appraisal included:

Identification, inspection and analysis of the subject properties;

Identification and analysis of the subject neighborhood;

Completion of a Highest and Best Use Analysis;

Research, verification, inspection and analysis of comparable land sales;

Completion of a Sales Comparison Approach to Land Value Analysis for each
of the subject properties;

An analysis and determination of an appropriate rate of return, which will be
applied to the fee simple land value to arrive at an indication of the Market
Land Rent which would be applicable to each of the subject properties;

Completion of Reconciliations and Final Market Land Rent Conclusions;

Preparation of the appraisal report.
TYPE OF REPORT
This is an Appraisal Report and adheres to the reporting requirements set forth under
Standards Rule 2-2(a) of the Uniform Standards of Professional Appraisal Practice for an
Appraisal Report. As such, it presents summary discussions of the data, reasoning and
analyses that are used in the appraisal process to develop the appraisers’ opinion of value.
Supporting documentation concerning the data, reasoning and analyses is retained in these
appraisers’ files. The depth of the discussion contained in the report is specific to the needs of
the client and for the intended use as stated herein. This appraisal firm is not responsible for
unauthorized use of the report.
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EXTRAORDINARY ASSUMPTIONS
This report, and the value conclusions set forth herein, is subject to extraordinary
assumptions. An extraordinary assumption is defined as “An assumption, directly related to a
specific assignment, which, if found to be false, could alter the appraiser’s opinions or
conclusions.”4 This appraisal has been prepared subject to the following extraordinary
assumptions:
The appraisal has been prepared based upon the following Extraordinary
Assumptions:

As per the client’s instructions, this analysis has been prepared under the
assumptions that the subject will be leased on a long-term, NNN, basis.
HYPOTHETICAL CONDITIONS
A hypothetical assumption is defined as “That which is contrary to what exists but is
supposed for the purpose of analysis. Hypothetical conditions assume conditions contrary to
known facts about physical, legal, or economic characteristics of the subject property; or
about conditions external to the property, such as market conditions or trends; or about the
integrity of data used in an analysis.”5
This appraisal report has been prepared subject to the following Hypothetical
Conditions:

The land areas for the subject properties of 90± acres for Subject 1 and 3.57± acres
of net useable land area for Subject 2 were provided by the Reno-Tahoe Airport
Authority and are assumed to be correct.
4
5
Source: USPAP 2010-2011 Edition, Definitions; The Appraisal Foundation, Page U-3.
Source: The Dictionary of Real Estate Appraisal, Fifth Edition, Appraisal Institute, 2010, page 97.
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RENO-SPARKS/NORTH VALLEY AREA MAP
SUBJECT 2
SUBJECT 1
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NEIGHBORHOOD MAP
SUBJECT 1
SUBJECT 2
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NEIGHBORHOOD DESCRIPTION
The subject properties are located in the Stead area of the City of Reno which is
situated in a region known as the North Valleys Area. The Stead area is located
approximately ten miles northwest of the downtown Reno core area and approximately
thirteen miles northwest of the downtown Sparks core area. Commute time to Stead from the
Reno-Sparks area is approximately 10 to 15 minutes. The major roadway between RenoSparks and the Stead area is Interstate 580 (U.S. 395).
Interstate 580 is a four-lane, two-way, limited access freeway. There are full
interchanges from Interstate 580 into the subject neighborhood at the Golden Valley, Lemmon
Valley, Stead, and Red Rock exits. Interstate 580 also provides good access from the subject
neighborhood to northern and southern California. As it intersects with Interstate 80, a major
east-west freeway, the subject neighborhood has good access to the Reno-Sparks area as well
as other portions of the western United States.
Stead is a former Air Force Base that was deactivated in 1966. Upon closure, the Air
Force Base was deeded by the United States Government to the City of Reno and the
University of Nevada. The Stead area was subsequently incorporated into the Reno city
limits. The Stead area can be separated into two areas. The first area is the old Stead Air
Force Base which includes former military housing and older industrial utilizations. The
newer portion of the Stead area can be distinguished by newer housing subdivisions, such as
Sky Vista, and the Silver Lake Business Center, which has been developed with modern,
industrial facilities.
The Reno-Stead Airport is a 5,000 acre general aviation facility that serves as a
reliever airport for Reno-Tahoe International Airport. The Reno-Stead Airport has been
adequately maintained over the years and is presently utilized for general aviation purposes.
The Reno-Tahoe Airport Authority indicates that long range plans involve using the RenoStead Airport for the majority of the general aviation traffic in the area. The airport also hosts
the Reno National Championship Air Races, one of the Reno area's largest tourist events.
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Approximately 200 aircraft are based at the Reno-Stead Airport. The airfield earned
an Airport Safety Award in 2006 from the Federal Aviation Administration in recognition of
its safety enhancements, tenant relations and community outreach. Located approximately 15
miles north of Reno, Reno-Stead Airport is working to develop itself as a major economic hub
in the North Valleys. Recent improvements have included a new air tanker facility opened by
the Bureau of Land Management, as well as 9,000 feet of new runway and upgrades to
runway lighting. Several on-airport road reconstructions have improved access and security.
Construction of the new Reno-Stead Airport terminal building was recently completed, the
new two-story, 12,000± square foot terminal building includes an emergency operation
center, administrative offices, community conference room and a pilot’s lounge.
The Federal Aviation Administration has recently announced that the State of Nevada
has been approved as a national test site for commercial drones. Two airport sites in Southern
Nevada will participate and two in the north including Reno-Stead Airport and the Fallon
Naval Air Station located 60 miles east of Reno-Sparks. The designation means the State will
serve as one of only six sites in the United States where manufacturers of drones can test their
products and potential users can try them out for applications such as fire fighting, search and
rescue or delivering retail products. The State will also be working with the FAA on testing
how to integrate commercial drones into NextGen, the FAA’s evolving air traffic control
system. Rod Hooper, Executive Director, Common Northern Nevada Development
Authority, says “Northern Nevada has a head start because the area’s manufacturing base
already has many businesses working with the Aerospace and Defense Industry connected to
Military UAV’s (Unmanned Aerial Vehicles). Overall, it is felt that the Reno-Stead Airport is
well positioned for incoming drone business. The Reno-Stead Airport comes with a number
of advantages including existing infrastructure; aviation experience as the decades long
location for the annual Reno National Championship Air Races, it has an identified air space
corridor because of the air races and it is far from military air space which demands much
stricter security.” Steven Hill, Executive Director of the Governor’s Office of Economic
Development, says “he believes the real boom to the economy will be landing more
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permanent businesses with manufacturing, research and development and other operations
and bringing permanent jobs with them.”6
The portion of the old Air Force Base facility deeded to the University of Nevada is
primarily used for the Sierra Nevada Job Corps Training Center facility. Many of the old
military barracks house students who attend the training center and a number of the other
buildings are used for a variety of vocational training purposes. Additionally, the Nevada
Terawatt Facility of the University of Nevada is located in the subject neighborhood.
The Stead area is primarily a suburban bedroom community for the Reno-Sparks area.
Residential development in the Stead area is primarily average quality single family and
multi-family uses. Since the mid-1970s, several large subdivisions have been developed
including Sierra Sage, Granite Hills, Eldorado Villas, the Silver Lake Subdivision, Leareno
Estates and most recently, Sky Vista. The Sky Vista master plan community is located in the
most southeasterly portion of Stead. In addition to single family residential development, the
Stead area has experienced apartment development. The development of Sky Vista is
anticipated to increase the market acceptance of multi-family housing in the Stead area. The
installation of Sky Vista Parkway between Lemmon Drive and Stead Boulevard through Sky
Vista subdivision has increased the linkage with the Lemmon Valley area.
The Stead area has historically experienced limited commercial development. The
Stead Boulevard corridor near Interstate 580 includes low intensity residential, office, school
and older retail uses. There is limited availability of land for commercial development along
Stead Boulevard near Interstate 580. The train tracks to the west of Stead Boulevard limit the
developable depth of parcels along the west side of Stead Boulevard. The competing
commercial sites on Lemmon Drive and Golden Valley Drive have more extensive existing
retail development. In addition, these competing developments have anchor stores with
national tenants and generally have superior curb appeal as compared to the retail
developments on Stead Boulevard near U.S. 395.
6
Source: Northern Nevada Business Weekly – January 6, 2014, Reno Gazette Journal (January 5, 2014).
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There is an 89,265 square foot shopping center located at the Lemmon Drive/
Highway 395 interchange, just outside of the Stead neighborhood. The Lemmon Drive
interchange shopping area is also experiencing further development at the intersection of
Lemmon Drive and Sky Vista Parkway with a service station, a Walgreen’s and a Smith’s
Grocery Store, a Smith’s gas station, a Bank of America Bank branch, Starbuck’s Coffee,
Jack-in-the Box and McDonald’s fast food restaurants and various in-line retailers. A new
super Wal-Mart was constructed at this intersection. A new O’Reilly’s Auto Parts is located
on Lemmon Drive across the street from the Jack-in-the Box. Further to the south on North
Hills Boulevard near Golden Valley Drive is the North Hills Shopping Center, an 114,515
square foot neighborhood commercial shopping center, which is anchored by a Raley’s store.
The Stead Plaza Shopping Center is located on the west side of Stead Boulevard. This
small neighborhood shopping center contains approximately 30,000 square feet of gross
building area. Located immediately to the north of the Stead Plaza Shopping Center is a
Terrible’s convenience store, and self-service gas facility located on the southeast corner of
Stead Boulevard and Lear Boulevard. Also located on this corner is the Stead Marketplace
shopping center. Further to the north, at the northwest corner of Stead Boulevard and Silver
Lake Boulevard, is the Silver Lake Center, an unanchored 11,506 square foot shopping
center.
The Sky Vista Planned Unit Development also has 15 acres of undeveloped
commercial land located on Sky Vista Boulevard in the central portion of the Sky Vista
subdivision.
Although the subject neighborhood has experienced limited commercial development,
Stead has experienced significant industrial development. The majority of the industrial
development in the Stead area has occurred subsequent to the deeding of the Air Force Base
facility to the City of Reno and the University of Nevada. The late William Lear, a prominent
aviation entrepreneur, purchased a large portion of the facility and began to renovate a
number of the old military buildings for his aviation-related business. Mr. Lear also
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purchased the southern portion of Stead for industrial and single family residential
development.
In 1968, J.C. Penney Company purchased a 203 acre site from Mr. Lear and
developed a 1.6 million square foot catalog distribution center. Craftsman West Press
developed a 170,000 square foot facility in 1997 immediately south of J. C. Penney. In late
1984, the R.R. Donnelley Company purchased a 119 acre site located north of the J.C.
Penney catalog distribution center. R.R. Donnelley Company is one of the world's largest
printing companies.
The Union Pacific Land Company purchased 393 acres located west and northwest
of the J. C. Penney Company site. This industrial park was subsequently purchased by
Dermody Properties. This development is known as the Silver Lake Business Center.
Several companies have constructed facilities in the Silver Lake Business Center, including
the Spirolite Company, Freightliner Mercedes Benz Corporation, Hidden Valley Ranch
Company and Kleerdex. Additionally, General Motors, V.E.K.A., B-Line Systems, Sally
Beauty and Barnes Industries have built facilities adjacent to the Silver Lake Business Center.
The Lear Industrial Center contains 100± acres located at the west terminus of Echo
Avenue, southwest of the Reno Stead Airport property. The Lear Industrial Center has been
developed with a 390,000± square foot multi-tenant industrial building and has enough land
to build up to 1.8 million square feet. The LogistiCourt development is proximate to the Lear
Industrial Center and involves over 500,000 square feet of multi-tenant industrial space.
Trammel Crow purchased 17.097± acres on Echo Avenue, proximate to the Lear Industrial
Center, and has constructed a speculative 334,500± square foot distribution warehouse on the
site.
DP Partners developed the Sage Point Business Park, which is anchored by the
Sherwin Williams Distribution Center located on Military Road in Lemmon Valley. The Red
Rock Business Center is located near Red Rock Road on Moya Boulevard. Just to the south
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of the Red Rock Business Center, is a Centex Homes high density single family residential
subdivision.
One of the primary problems hindering development in the Reno-Stead area is a
limited water supply. The Truckee Meadows Water Authority services properties within
incorporated Reno-Stead. The Truckee Meadows Water Authority will not accept new
annexations to the service area until the water supply infrastructure is upgraded.
Vidler Water Company completed the North Valley’s Water Importation project,
which is capable of delivering approximately 8,000 acre feet of water from the Fish Springs
Ranch, approximately 32 miles north of Reno. The Washoe County Commission has
accepted the water rights, wells and pipeline system, as well as easements donated by Vidler
Water Company. Initially, water service will be provided to residential properties in Lemmon
Valley.
The Reno-Stead Sewer Treatment plant provides sewer service to Stead. Natural gas
service and electricity are provided by NV Energy. Telephone service is provided by various
carriers.
Recreation facilities in the Stead area include the Sierra Sage Golf Course, Mayor's
Park, and the 85± acre North Valley Regional Park. Other public facilities located in RenoStead include a small branch library, operated by the Washoe County Library System, and a
branch of the U.S. Post Office.
There are three elementary schools and one middle school located in the subject
neighborhood. The new North Valleys High School is located on Golden Valley Road,
southeast of the subject neighborhood.
The City of Reno furnishes public services to the Stead area. The Reno City Police
Department provides police protection and fire protection. The Regional Transportation
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Commission provides bus service to Stead. Public services in the subject neighborhood are
considered to be adequate.
In summary, the Stead area is located approximately ten miles northwest of the
downtown Reno core area and driving time to the employment centers in Reno and Sparks is
approximately 10 to 15 minutes. Access to the area is provided by the U.S. 395 Freeway and
is considered to be good. Primary land uses in the Stead area are industrial and residential
developments. Secondary land uses include commercial, public and recreational uses.
Utilities are generally immediately available to the subject neighborhood. In recent years, the
Stead area has experienced a reasonably strong industrial market, with several companies
having constructed medium to large size facilities in the area.
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INDUSTRIAL MARKET ANALYSIS
In an effort to diversify the economic base of the area, community leaders have
focused upon the expansion of the industrial segment of the economy. The industrial industry
has experienced substantial growth over the past decade as a result of the region’s central
location, good transportation, infrastructure and liberal tax laws. At the present time, over
500 major U.S. and foreign corporations have headquarters or have located large facilities in
the area, including Amazon.com, International Gaming Technology (IGT), Barnes and Noble,
Patagonia, Sherwin Williams, Wal-Mart Distribution Center, PetSmart Distribution Center,
J.C. Penney’s Catalog Distribution Center, and R.R. Donnelley, one of the nation’s largest
publishers. A new 472,720± square foot distribution facility for Urban Outfitters was
constructed in Reno-Stead in 2011. A new 130,000± square foot light manufacturing
distribution facility was constructed for NOW Health Foods in 2012 in east Sparks.
As most major cities in the western portion of the United States are located within
relatively close proximity and driving time to Northern Nevada, the Reno-Sparks area is a
major distribution warehousing center. This development is further being enhanced by the
favorable tax environment in the state of Nevada.
The NAI Alliance 4th Quarter 2013 Industrial Market Survey reports, “strong activity
carried into the 4th Quarter resulting in high absorption numbers and another significant drop
in vacancy. Our market is viewed as balanced when vacancy is in the 8% to 10% range. This
provides enough vacancy to accommodate demand, but not too high forcing rent discounts.
Through the “great recession”, like other markets around the country, the Northern Nevada
Industrial Market was well in excess of 10% vacancy. As of the 4th Quarter, the vacancy rate
dropped below 10% for the first time since the 1st Quarter of 2008. The industrial market is
considered in the healthy range finishing the year at 9.1% (excluding sublease space, vacancy
is 8%). For the year, 15 transactions were completed with users in excess of 100,000 square
feet, which was significantly higher than prior years. We are now concerned about not having
a product available to capture the demand should activity continue. The area has a number of
developers who own land and are ready to act, however few are willing to build on
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speculation. Only one developer is currently grading for a new 399,000 square foot
speculative product. Lack of options will result in a tightening market throughout 2014 and
possible transaction loss to other markets due to tenant inability to wait for ground up
development. Rental rates have firmed and are now increasing for most all product types.
There remains plenty of options for seekers of Class B and C product, as well as smaller 5,000
to 20,000 square feet spaces. Rents for these spaces are increasing but are not high enough to
justify new development. Today’s need is for large bulk warehouse buildings.”
NAI Alliance projects lower vacancy, higher rents and more construction over the
coming year. Industrial land sales will see increasing activity as both users and developers
recognize the need to build.
The following charts summarize the overall and submarket industrial markets, and
include data related to rental rates and vacancies. The data is from the NAI Alliance 4th
Quarter 2013 Reno Industrial Report.
INDUSTRIAL GROSS AND NET ABSORPTION
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VACANCY
MEDIAN ASKING RATES
Q4 2013 MARKET AT A GLANCE
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Leases for industrial users in the Reno-Sparks market are typically based upon triple
net lease terms, in which tenants are responsible for a majority of all operating costs
associated with the property.
In regards to land and construction NAI Alliance notes that this sector has been very
quiet over the last five years, however, between existing building expansions, new build-tosuits and possible speculative construction of Class A product, they anticipate increased
construction activity in 2014.
No new construction was reported for 2012 and it is our understanding that
construction in 2013 was primarily build-to-suit projects. There is a 525,000± square foot
speculative building currently under construction in the Tahoe Reno Industrial Center in
Storey County east of Reno-Sparks. A 66± acre site was recently purchased in the Spanish
Springs Business Center, north of Sparks and is planned to be ultimately developed with 1.5
million square feet of distribution warehouse space. The buyer has indicated that they are in
negotiations with a potential tenant in its first building which will contain 600,000± square
feet. Dermody Properties purchased a bank-owned 90± acre residential subdivision site in the
North Valleys area which they plan to development with a 1.23 million square foot industrial
park. The first structure is planned to be a 624,000± square foot speculative Class A
industrial building with a 36 foot clear height which is in demand by e-commerce companies
that utilize three tiered mezzanine storage.
Market optimism is increasing as corporate earnings; housing, business investment
and unemployment are all trending in the right direction helping the economy. NAI Alliance
projects industrial rental rates increasing, build-to-suit interest increasing and strong
investment sales activity.
Northern Nevada offers significant tax and geographic incentives, making the area
attractive to distribution and online order fulfillment industries. The primary employment
centers for the industrial market include South Sparks, Reno-Stead, which is north of Reno,
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the Airport market located east of the Reno-Tahoe International Airport and the South
Meadows Business Park, which is located in South Reno. Secondary industrial areas include
the Reno West Business Park, the Parr Boulevard area, and the Spanish Springs Business
Center. The Tahoe Reno Industrial Center (TRIC) is located approximately 15 miles east of
Sparks and is a major industrial park having direct access from Interstate 80 at USA Parkway.
In recent years, there has been an emphasis on attracting hi-tech and back office
industry to the area. The area offers a sophisticated telecommunications infrastructure that
can accommodate these types of uses. Nevada Bell (now AT&T) has installed a state-of-theart telecommunications infrastructure including fiber optics and digital switching equipment.
The Reno-Sparks industrial market remains an attractive area for distributors.
Shipping has become more efficient, sophisticated and competitive in today’s market.
Demand for shipping has increased due, in part, to the growth of e-commerce as well as mailorder. The central location of the Reno-Sparks in the western United States is expected to
continue to attract the warehousing and shipping industries.
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SUBJECT PROPERTIES AERIAL PHOTOGRAPH
Subject
1
Assessor’s Parcel Numbers
086-240-011 (Portion)
2
086-240-011 (Portion)
Land Areas
90± Acres – Gross
Land Area
3.57± Acres – Net
Usable Land Area
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SUBJECT STREET PHOTOGRAPHS
VIEW LOOKING NORTHWESTERLY ALONG ARMY AVIATION DRIVE
ADJACENT TO THE SUBJECT
VIEW LOOKING WESTERLY ALONG ALPHA AVENUE IN THE
VICINITY OF THE SUBJECT
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SUBJECT PROPERTY ONE PHOTOGRAPHS
VIEW LOOKING WESTERLY TOWARD SUBJECT PROPERTY 1 FROM
ARMY AVIATION DRIVE
VIEW LOOKING SOUTHWESTERLY TOWARD SUBJECT PROPERTY 1
FROM NEAR ARMY AVIATION DRIVE
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SUBJECT PROPERTY ONE PHOTOGRAPHS
VIEW LOOKING SOUTHEASTERLY TOWARD THE SUBJECT FROM NEAR ITS
SOUTHWEST CORNER
VIEW LOOKING NORTHEASTERLY TOWARD THE SUBJECT
PROPERTY 1 SITE
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SUBJECT PROPERTY TWO PHOTOGRAPHS
VIEW LOOKING SOUTHWESTERLY TOWARD SUBJECT PROPERTY 2
FROM THE TAXIWAY
VIEW LOOKING SOUTHERLY TOWARD THE WEST PORTION OF
SUBJECT PROPERTY 2
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SUBJECT PROPERTY TWO PHOTOGRAPHS
VIEW LOOKING SOUTHEASTERLY TOWARD THE CENTRAL PORTION OF
SUBJECT PROPERTY 2
VIEW LOOKING NORTHWESTERLY TOWARD THE
SUBJECT PROPERTY 2 SITE
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SUBJECT PROPERTY TWO PHOTOGRAPHS
VIEW LOOKING EASTERLY ALONG THE TAXIWAY ADJACENT TO
SUBJECT PROPERTY 2
VIEW OF ONE OF THE DETENTION PONDS LOCATED ON
SUBJECT PROPERTY 2
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SUBJECT PROPERTIES PLOT MAP
Portions of A.P.N. 086-240-11
Subject
1
2
Land Areas:
90± Acres (Gross Land Area)
3.57± Acres (Net Usable Land Area
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SUBJECT PROPERTIES RECORDED PARCEL MAP
Portions of Parcel 4 of Parcel Map No. 5018A
Recorded December 14, 2009
Document No. 3829772
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SUBJECT ZONING MAP
(City Of Reno Zoning: MU/RSARC)
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SUBJECT PROPERTIES MASTER PLAN MAP
(City Of Reno Land Use: Reno-Stead Airport Regional Plan)
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SUBJECT FLOOD ZONE MAP
Federal Emergency Management Agency’s Flood Insurance Rate Map
Community Panel Number 32031C2825H
Effective Date: June 18, 2013
Flood Zone “X”
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PROPERTY IDENTIFICATION AND SITE DESCRIPTION
Assessor’s Parcel Number
Location
Subject Property One
Subject Property Two
Portions of 086-240-11
Industrial Land at the Reno-Stead Airport
Northwest corner of Army Aviation Drive and
Alpha Avenue, Reno, Washoe County, Nevada
Aeronautical Land at the Reno-Stead Airport
Northeast corner of Army Aviation Drive and
Alpha Avenue, Reno, Washoe County, Nevada
Legal Description
Portions of Parcel 4 of Parcel Map No. 5018, as
shown on that certain map entitled “Parcel Map
for Reno-Tahoe Airport Authority” as filed on
December 14, 2009 as File No. 3829772, in the
office of the County Recorder of Washoe
County, Nevada.
Owner of Record
Reno-Tahoe Airport Authority
Shape
Subject Property One
Subject Property Two
Land Area
Subject Property One
Subject Property Two
City of Reno Zoning
Rectangular
Rectangular
90± Acres (3,920,400± SF) – Gross Land Area
3.57± Acres (155,509± SF) – Net Usable Land
Area
The land areas for the subject properties were
provided by the Reno-Tahoe Airport Authority
and are assumed to be correct.
(MURS) Mixed Use Reno-Stead Airport
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City of Reno Land Use
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SPD - Reno-Stead Airport Regional Center
This Regional Center Plan covers the Reno-Stead Airport, including adjacent
properties owned by the Airport Authority.

The main focus of the Reno-Stead Airport Regional Center Plan is to further the
development of the Reno-Stead Airport and to promote non-residential
development in appropriate locations. The Reno-Stead Airport Regional Center
Plan recognizes and plans for the unique land use compatibility issues associated
with development near a large airport. The plan also helps to implement the
desired regional development pattern of infill development within designated
centers and corridors.

The Development Concept for the Reno-Stead Airport Regional Center Plan is
categorized into 2 districts - the Mixed-Use District and the Residential Buffer
District. The Development Concept anticipates the Reno-Stead Airport becoming
an increasingly important regional employment center in the next 20-years. The
planned increase in employment capacity will provide additional opportunities for
Stead residents to work near their home. Over time, new employment
opportunities in Stead should help address traffic congestion during the rush hour
commute to and from central Reno.

The Mixed-Use District will contain facilities directly associated with airport
operations (i.e., runways, airplane hangars, terminal buildings, etc.). Other airport
compatible developments may also be located within the Mixed-Use District.
Appropriate land uses include industrial, office, commercial and public facility
developments. Residential development, and other airport incompatible land uses
(schools, churches, etc.), are not allowed within the Reno-Stead Airport Regional
Center Plan. In addition, the minimum non-residential intensities that are identified
in the Regional Plan (1.5 floor-area ratio) do not apply within this Regional Center
Plan because safety and noise concerns generally make high occupancy land uses
incompatible with airport operations. The airport critical zone requires low
occupancy land uses and sound-attenuating construction methods in key overflight areas.
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The Residential Buffer District is intended to provide an open space area between
nonresidential development within this Regional Center Plan and nearby
residential areas. Properties in the Residential Buffer District will be retained as
open space. Small scale developments, such as recreational and utility facilities
may also be appropriate in the Residential Buffer District, subject to limitations of
the City's Open Space zoning district.

Prior to build-out of land uses identified in this Reno-Stead Airport Regional
Center Plan, increased quantities of potable water will be needed in the Stead area.
The Regional Water Planning Commission is exploring water supply options for
the Stead area. Water importation, effluent re-use and/or new water conservation
measures will likely be necessary.
It is noted that the very westerly portion of Subject 1 is designated as Open Space
which is intended to provide a buffer between non-residential development within the
Regional Center Plan and nearby residential areas.
Based upon discussions with Mr. David Mieding, of the Reno-Tahoe Airport
Authority, it is our understanding that the subject properties lie outside of the Airport Critical
Zone.
Roadway Frontage/Access
Subject Property 1 is generally located on the northwest corner of Army Aviation
Drive and Alpha Avenue. Subject Property 2 is generally located on the northeast corner of
Army Aviation Drive and Alpha Avenue. Both Army Aviation Drive and Alpha Avenue are
interior airport roadways. Each of these streets is a two-way, asphalt paved roadway that is in
average condition.
Access to the Reno-Stead Airport is provided by the airport’s main entry as well as by
the west entry gate located along the north side of Alpha Avenue at its intersection with Mt.
Anderson Street. This west entry provides access onto the Reno-Stead Airport property and is
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located a short distance east of the subject. Although the subject parcels do not have direct
access from the city street, they are accessed by way of the interior roadway system on the
airport property. For the purposes of this analysis, it is assumed that the subject properties do
have adequate access.
Flood Zone
According to the Federal Emergency Management Agency's Flood Insurance Map
Community Panel Number 32031C2825H, with an effective date of June 18, 2013, the subject
properties are located in a Flood Zone “X”. Areas within a Flood Zone “X” are determined to
be areas outside the 500-year flood plain. Federal flood insurance is not required in areas
located in a Flood Zone “X”.
Earthquake Zone
In 2005, the City of Reno adopted the International Building Code. The International
Building Code does not directly address earthquake hazards by geologic regions. However, it
requires that all building plans be reviewed by a structural engineer to assess earthquake
issues. Prior to 2005, the City of Reno utilized the Uniform Building Code. According to the
1997 edition of the Uniform Building Code, the Reno-Sparks area is located in a Seismic Risk
Zone 3. This zone encompasses areas which have a number of local faults and where there is
a relatively strong probability of moderate to strong seismic activity. The Uniform Building
Code does require special construction techniques as a result of earthquake hazards.
Additionally, a structural engineer typically reviews plans for residential and commercial
buildings in order to assess earthquake hazards.
As a result, for the purposes of this analysis, it is being assumed that the subject
properties are not impacted by earthquake hazards to a greater degree than is typical for the
North Valleys area.
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Utilities
Utility Service
Electricity
Natural Gas
Telephone
Water
Sewer
Waste Disposal
Cable
Internet
Provider
NV Energy
NV Energy
Various Carriers
Truckee Meadows Water Authority (TMWA)
City of Reno
Waste Management
Various Carriers
Various Carriers
Utility services, including electricity, natural gas service, water and sewer service, as
well as cable and phone service are available to the perimeter of Subject Property 1. It is
noted that development of Subject Property 1 will require extension of utilities to the interior
portions of the site. As Subject Property 2 had been planned to be developed with a hangar
project, water hydrants had been installed throughout the property, electric service was
extended to the southwest corner of the site and a drainage system was completed, including
two detention basins. In discussions with Mr. David Mieding, of the Reno-Tahoe Airport
Authority, it was indicated that natural gas has not yet been extended to Subject Property 2.
He also indicated that there is adequate water and sewer capacity for development of the
subject properties.
Public Services
The subject property has adequate access to all public services. Fire protection for the
subject is provided by the Reno Fire Department. Police protection is provided by the Reno
Police Department. Public transportation is provided by Citifare, a regional mass
transportation system. Citifare does maintain a number of bus stops along Alpha Avenue in
the vicinity of the subject.
Easements
A Preliminary Title Report was not provided to us prior to completion of the appraisal
report. Based upon a review of Parcel Map 5818, recorded with the Washoe County
Recorder’s Office as File Number’s 3829772 on December 14, 2009, the subject sites are
encumbered by the following easements:
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An access easement (Army Aviation Drive), it is our understanding that this
easement is relocateable and appears to effect Subject 1 and 2;
A public utility easement encumbers the east portion of Subject 1 in a northsouth direction;
Development requiring new or expanded utility services will require an
easement, 10 feet in width, to be granted to the public utility (sewer, electric
power, natural gas) and 20 feet in width for Truckee Meadows Water
Authority for development operations, and maintenance of the utility services.
The location to be mutually agreed upon considering future development and
consistent with airport operations. Cable television systems under franchise to
the City of Reno are included as a utility service.
Sewage disposal shall be by connection to a public sewer system unless
otherwise approved at the time of development.
If an existing easement does not already exist, then an underground gas and
electric easement 10 feet in width and a Truckee Meadows Water Authority
easements 20 feet in width, centered on all existing underground electric, gas
and water lines is hereby granted.
The owner, at their expense, has the right to relocated existing utility lines and
easements to alignments mutually agreed upon by the owner of record at time
of realignment and the utility company.
Our physical inspection of the subject properties revealed no overt signs of any
easements which would impact their development potential. For the purposes of this
appraisal report, it is assumed that the subject sites are not subject to any easements which
would limit development on the sites, or detract from the Market Value of the properties.
Topography
Subject Property 1 has generally level to gently undulating topography. It is noted
that development of the site will in all likelihood require drainage improvements.
Subject Property 2 has been graded and has level topography. It is noted that there is a
detention basin in the southeast corner and one in the southwest corner of Subject Property 2.
Overall, Subject Property 2 is considered to have adequate topography for development and
provides adequate drainage.
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Environmental and Soils Data
An environmental site assessment was not provided to these appraisers by our client.
However, based upon the surrounding improvements, it is our expectation that the subject
properties have adequate soils to allow for normal development. This appraisal report
assumes that the subjects’ soils are sufficient for development on the subject sites.
Hazardous Substances
Our standard on-site inspection of the subject properties did not reveal any readily
apparent evidence suggesting the presence of contaminants or hazardous wastes on any
portion of the subject sites. It is noted that the Reno-Stead Airport was a former US Air Force
Base. As a result, remediation of contaminated soils has been conducted in the past. As we
have not been provided with an Environmental Assessment on the sites, this appraisal report
assumes that the subject sites are free and clear of contamination. For the purposes of this
appraisal, it is assumed that the value of the subject properties is not negatively impacted by
the existence of toxic materials or hazardous waste.
Surrounding Utilizations
The subject properties are located in the southwest corner of the Reno-Stead Airport
property. The property to the west of the subject is the Silver Knolls single family residential
subdivision. The property to the north of the subject includes large tracts of additional vacant
airport land. The Army National Guard facility is located a short distance northeast of the
subject, also on airport property. The development to the east of the subject involves a series
of individual hangars which are utilized for cold storage of small aircraft. This includes the
Reno-Stead Airport West End Flightline Development. The main runway for the airport is
located directly northeast of the subject properties and, as a result, the subject neighborhood
does experience periods of aircraft noise.
Those properties located to the south of the subject site, across Alpha Avenue, are
developed with a variety of industrial utilizations. The 394,400± square foot General Motors
Service & Parts distribution warehouse is located on the northwest corner of Moya Boulevard
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and Echo Avenue. The Lear Industrial Center contains 100± acres located at the west
terminus of Echo Avenue, southwest of the Reno-Stead Airport property. The LogistiCourt
development is proximate to the Lear Industrial Center and involves over 500,000 square feet
of multi-tenant industrial space.
Current Improvements
Subject Property 1 is currently vacant and unimproved. Subject Property 2 is
improved with asphalt paved interior taxiways, as it had been planned to be developed with a
hangar project for cold storage of small aircraft. Development of the Subject 2 property
included site preparation. As Subject Property 2 had been planned to be developed with the
hangar project, water hydrants had been installed throughout the property, electric service was
extended to the southwest corner of the site and a drainage system was completed including
two detention basins. Other than the infrastructure, the proposed project was never
developed.
Subject Sales History
There have been no arms length sales with respect to the subject property within the
last five years.
Tax Data
At the present time, the subject property is owned by the Reno-Tahoe Airport
Authority and has been declared exempt from taxation by the Washoe County Assessor’s
office.
Special Assessments
According to the Washoe County Treasurer's office, there are no special assessments
owing against the subject property.
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Summary
To summarize, the subject properties are situated on the Reno-Stead Airport property
which is located in the Reno-Stead area of Washoe County, Nevada. Subject Property 1 is
located on the northwest corner of Army Aviation Drive and Alpha Avenue and contains 90±
acres. Subject Property 1 is currently vacant and unimproved. Subject Property 2 is located
on the northeast corner of Army Aviation Drive and Alpha Avenue and contains 3.57± acres
of useable land area. Subject Property 2 is improved with asphalt paved interior taxiways, a
drainage system, as it had been planned to be developed with a hangar project for cold storage
of small aircraft. The subject properties are identified as portions of Washoe County
Assessor's Parcel Number 086-240-11.
Reference is made to photographs and a plot plan of the subject properties contained
elsewhere in this appraisal report which will enable the reader to better visualize the subject
sites.
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HIGHEST AND BEST USE ANALYSIS
Highest and best use is defined in the 5th Edition of The Dictionary of Real Estate
Appraisal (Appraisal Institute, Chicago, 2010) as “The reasonably probable and legal use of
vacant land or an improved property, which is physically possible, appropriately supported,
financially feasible, and that results in the highest value. The four criteria the highest and best
use must meet are legal permissibility, physical possibility, financial feasibility, and
maximum productivity.”
Highest and best use is typically a three-step process. The first step is to determine the
highest and best use of the subject site as vacant and available to be developed to its highest
and best use. The determination must be made to leave the site vacant or to improve it. If the
conclusion is to improve the site, the second step is to determine the ideal improvement.
Highest And Best Use As Though Vacant
Physically Possible
The subject properties are situated within the southwest corner of the Reno-Stead
Airport property, located in the Reno-Stead area of Washoe County, Nevada. Subject
Property 1 is located on the northwest corner of Army Aviation Drive and Alpha Avenue and
contains 90± acres. Subject Property 2 is located on the useable northeast corner of Army
Aviation Drive and Alpha Avenue and contains 3.57± acres of net useable land area. Both
Army Aviation Drive and Alpha Avenue are interior airport roadways. The subject properties
have adequate access. The subject properties are considered to have adequate topography for
development.
The subject properties have reasonable access to all utilities, including water service,
gas service, electric service, telephone service and sewer service. However, it is noted that for
any intensive development of Subject Property 1, that utilities services will need to be
extended to the interior portions of the site. As fire hydrants have been installed throughout
Subject Property 2, water service is available. It is our understanding that electric service was
extended to the southwest corner of Subject Property 2 and a drainage system was completed.
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The subject sites are of sufficient size to support a variety of utilizations. Overall, the subject
properties’ size, shape, topography, access and availability of utilities are not considered to be
physically limiting to the development potential of the properties. We are not aware of any
earthquake hazards or soil conditions that impact the subjects to a greater degree than would
be typical for the subject neighborhood.
Legally Permissible
According to the City of Reno Community Development Department, the subject
properties are zoned Mixed Use/Reno-Stead Airport. The properties are master planned SPD
and lie within the Reno-Stead Airport Regional Center Plan district. The main focus of the
Reno-Stead Airport Regional Center Plan is to further the development of the Reno-Stead
Airport and to promote non-residential development in appropriate locations. This RenoStead Airport Regional Center Plan recognizes and plans for the unique land use
compatibility issues associated with development near a large airport. The Mixed-Use
District will contain facilities directly associated with airport operations (i.e., runways,
airplane hangars, terminal buildings, etc.). Other airport compatible developments may also
be located within the Mixed-Use District. Appropriate land uses include industrial, office,
commercial and public facility developments. Residential development, and other airport
incompatible land uses (schools, churches, etc.), are not allowed within the Reno-Stead
Airport Regional Center Plan.
Based upon the subjects’ current zoning and master plan designation, the subjects’
legally permissible uses include a variety of airport related utilizations as well as industrial
and industrial-commercial uses.
Financially Feasible
The highest and best use of the subject sites must be financially feasible. To be
financially feasible, there must be adequate demand to support the highest and best use of the
subject properties.
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The land uses surrounding the subject sites include the Reno-Stead Airport, a variety
of industrial and residential utilizations and large tracts of vacant land. Single family
residential utilizations are located the west of the subject sites. Industrial utilizations are
located south of the subject sites. The Reno-Stead area has experienced significant industrial
development including the Silver Lake Business Center, the Lear Industrial Center and the
LogistiCourt development, all of which have met with adequate to good market acceptance.
The Federal Aviation Administration has recently announced that the State of Nevada
has been approved as a national test site for commercial drones. The designation means the
State will serve as one of only six sites in the United States where manufacturers and potential
users of drones can test their products. The State will also be working with the FAA on
testing how to integrate commercial drones into NextGen, the FAA’s evolving air traffic
control system. Rod Hooper, Executive Director, Common Northern Nevada Development
Authority, says “Northern Nevada has a head start because the area’s manufacturing base
already has many businesses working with the Aerospace and Defense Industry connected to
Military UAV’s (Unmanned Aerial Vehicles). Overall, it is felt that the Reno-Stead Airport is
well positioned for incoming drone business. The Reno-Stead Airport comes with a number
of advantages including existing infrastructure; aviation experience as the decades long
location for the annual Reno National Championship Air Races, it has an identified air space
corridor because of the air races and it is far from military air space which demands much
stricter security.” Steven Hill, Executive Director of the Governor’s Office of Economic
Development, says he “believes the real boom to the economy will be landing more
permanent businesses with manufacturing, research and development and other operations
and bringing permanent jobs with them.”
The NAI Alliance 4th Quarter 2013 Industrial Market Survey reports, “strong activity
carried into the 4th Quarter resulting in high absorption numbers and another significant drop
in vacancy. Our market is viewed as balanced when vacancy is in the 8% to 10% range. This
provides enough vacancy to accommodate demand, but not too high forcing rent discounts.
Through the “great recession”, like other markets around the country, the Northern Nevada
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Industrial Market was well in excess of 10% vacancy. As of the 4th Quarter, the vacancy rate
dropped below 10% for the first time since the 1st Quarter of 2008. The industrial market is
considered in the healthy range finishing the year at 9.1% (excluding sublease space, vacancy
is 8%). NAI Alliance projects lower vacancy, higher rents and more construction over the
coming years. Industrial land sales will see increasing activity as both users and developers
recognize the need to build.”
The subject properties are situated on airport property at Reno-Stead Airport. For the
most part, utilizations within the immediate subject neighborhood include airport related uses
and industrial warehouse and distribution uses. With consideration given to the types of
utilizations which have experienced success in the subject neighborhood, it is our opinion that
airport related uses and/or industrial or industrial commercial utilizations on the subject sites
would be financially feasible.
Maximally Productive
To be maximally productive, the highest and best use of the subject properties must be
the most intense use to which the sites, as if vacant, could be developed and remain
financially feasible.
With consideration given to the physical, legal, financial and maximally productive
characteristics of the subject properties, and as the subject does have direct access to the
Reno-Stead Airport, it is our opinion that the highest and best use of the subject sites, as
vacant, is for development with airport related uses and/or industrial or industrial commercial
utilizations.
Highest And Best Use As Improved
Subject Property 1 is currently vacant and unimproved.
Subject Property 2 had been planned to be developed with a hangar project for cold
storage of small aircraft. Development of the property included site preparation, asphalt
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paved interior taxiways, water hydrants had been installed for fire protection, and electric
service was extended to the southwest corner of the site and drainage improvements for the
proposed project.
In determining the highest and best use of the subject, as improved, consideration is
given to its location on airport at the Reno Stead Airport, its net useable land area, existing
infrastructure and improvements. Consideration is also given to its access and other physical
characteristics. It is recognized that the subject has access to the airport facilities and
amenities. It is also recognized that, in its current configuration, the utilization of the site is,
in all likelihood, limited to a hangar project.
The subject property is felt to benefit from its direct access to the Reno-Stead Airport
property. Overall, it is our opinion that Subject Property 2’s current on-site improvements
may help to facilitate the development of the subject site at a future date. With consideration
given to the subject's existing improvements, and as the subject does have direct access to the
Reno Stead Airport, the highest and best use of the subject site would involve development
with an airport hangar project.
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INTRODUCTION TO VALUATION ANALYSIS
MARKET VALUE AND MARKET LAND RENT ANALYSIS
The purpose of this report is to estimate the Market Value and the Market Rent of the
subjects’ land. This valuation analysis will include two distinct steps. The first step is to
estimate the Market Value of the underlying land area for each of the subject properties.
Typically, when valuing vacant land, the Sales Comparison is the most reliable approach to
value. The Sales Comparison Approach is based on the principal of substitution, which holds
that the value of the subject property tends to be set by the price that would be paid to acquire
a substitute property of similar utility and desirability.
Once the unencumbered fee simple value of each of the subject sites has been
estimated, the next step in the Market Land Rent Analysis is to derive an appropriate rate of
return applicable to the subject. The selected rate of return will then be applied to the
estimated Market Value of the subject land to arrive at an estimate of the appropriate Market
Land Rent applicable to the subject property on an annual basis.
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SALES COMPARISON APPROACH TO LAND VALUE
SUBJECT PROPERTY 1 – 90± ACRE SITE
To establish an estimate of the Market Value of Subject Property 1, the Official
Records of Washoe County were searched for sales of similar larger acreage parcels in the
Reno-Sparks area. All land sales found were investigated, analyzed and compared to the
subject property. Research for current larger acreage land listings considered similar to the
subject property was also conducted. The sales and listings set forth on the following chart
were considered to be indicative of the Market Value of the subject site. The sales and
listings utilized will be compared to Subject Property 1 on a price per square foot of land area
basis.
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COMPARABLE INDUSTRIAL LAND SALES CHART
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COMPARABLE LAND SALES MAP
SUBJECT
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COMPARABLE LAND SALE AERIAL MAP AND DISCUSSION
SALE LS-1
Stead (Reno)
Washoe
Nevada
Zone “X”, Minimal Risk Areas
Available
Generally Rectangular
Urban Outfitters Warehouse
$2.04
Cash to Seller
Urban Outfitters, Inc.
Seller’s Representative; Public
Records
This is the May 2011 sale of a 38.34± acre parcel located within the Dermody Properties Silver Lake Business Park in Stead
(Reno), Nevada. In discussions with a representative of DP Partners the seller, it was indicated that this site was sold as raw
land. Utilities and access needed to be extended and the site had not been graded. This parcel was subsequently improved
with a 462,000± square foot warehouse, which will be expandable to almost twice that size. The property does not have
direct street frontage, but is accessed from Moya Boulevard via a non-exclusive 40 foot wide access road.
Property Type:
Address/Location:
A.P.N.:
Topography:
Zoning:
Parcel Acreage:
Parcel Square Feet:
Recording Date:
Sale Price:
Grantor:
Document Number:
Vacant Land
12055 Moya Boulevard
090-040-43
Level
I (Industrial)
38.34± Acres
1,670,090± Square Feet
May 13, 2011
$3,404,432
DP Partners Stead I, LLC
4002688
City:
County:
State:
Flood Zone:
Utilities:
Shape:
Proposed Use:
Price/Square Foot:
Terms Of Sale:
Grantee:
Verification:
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COMPARABLE LAND SALE AERIAL MAP AND DISCUSSION
SALE LS-2
Property Type:
Address/Location:
A.P.N.:
Topography:
Vacant Land
Kiley Ranch North , NEC Pyramid
Highway and Sparks Boulevard
083-024-18 (Was 083-024-01, &
083-024-02 Portion)
Level to Gentle, Partially Below
Grade
NUD (Commercial)
40.564± Acres
1,766,968± Square Feet
City:
County:
Sparks, Spanish Springs
Washoe
State:
Nevada
Flood Zone:
Zone “X”, Minimal Risk Areas
All Reasonably Available
Slightly Irregular
Future Medical Facility
Development
March 7, 2013
$4.44
Recording Date:
Price/Square Foot:
$7,840,800
Cash to Seller
Sale Price:
Terms Of Sale:
KM2 Development, Inc.
Renown Health
Grantor:
Grantee:
4212424
Steve Tapogna, Renown Health
Document No.:
Verification:
October 31, 2013
and Public Records
Date of Inspection:
This comparable is located on the Pyramid Highway in the Spanish Springs area of Sparks. This comparable is a corner site,
having additional frontage on Sparks Boulevard and David Allen Parkway. This comparable is part of the Kiley Ranch North
Development and has Handbook approvals for arterial-commercial development. It is our understanding that under the Kiley
Ranch PUD Handbook, that this site is entitled for development with an 180,000± square foot, eight story, 300 bed medical
facility. The property has reasonable access to all utilities. The site does have good roadway exposure from the Pyramid
Highway, a major arterial. This sale was verified and confirmed by Mr. Steve Tapogna, Director of Real Estate with Renown
Health, the buyer.
Zoning:
Parcel Acreage:
Parcel Square Feet:
Utilities:
Shape:
Proposed Use:
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COMPARABLE LAND SALE AERIAL MAP AND DISCUSSION
SALE LS-3
Property Type:
Address/Location:
Vacant Land
Tahoe Reno Industrial Center on
the NW side of West Sydney
Drive, 750±’ east of USA Parkway
005-071-40 & 41
Level to Gentle
I-2 (Heavy Industrial)
68.27± Acres
2,973,841± Square Feet
September 4, 2013
$3,395,920
PCCP Reno Industrial
119214
City:
County:
McCarran
Storey
Nevada
Zone X, Minimal Risk Areas
All Reasonably Available
Slightly Irregular
Future Industrial Development
$1.14
Cash
Gonsalves & Santucci Inc.
Tobi Whitten, Storey County
Assessor’s Office and Public
Records
This comparable is the September 2013 sale of an industrial site located within the Reno Tahoe Industrial Center (TRIC).
The sale included two adjoining parcels, both of which are vacant and unimproved. The sale property has level to gently
undulating topography and all utilities were reasonably available. The property has extensive frontage on West Sydney
Drive, which is a connector street within the Tahoe Reno Industrial Center. At the time of inspection, it was noted that there
is a drainage ditch along the sale property’s street frontage; as a result access to the site will require a culvert. This
comparable was verified with Ms. Tobi Whitten, Personal Property Appraiser III with the Storey County Assessor’s office,
Storey County, Nevada.
A.P.N.:
Topography:
Zoning:
Parcel Acreage:
Parcel Square Feet:
Recording Date:
Sale Price:
Grantor:
Document No.:
State:
Flood Zone:
Utilities:
Shape:
Proposed Use:
Price/Square Foot:
Terms Of Sale:
Grantee:
Verification:
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COMPARABLE LAND SALE AERIAL MAP AND DISCUSSION
SALE LS-4
Property Type:
Address/Location:
A.P.N.:
Topography:
Zoning:
Parcel Acreage:
Parcel Square Feet:
Recording Date:
Vacant Land
E/S of Lemmon Drive, between
US 395 and North Virginia Street
570-081-Various; 570-12 thru 19
All
Level to Gentle, Graded
Mixed Use/North Valleys
90.36± Acres
3,936,162± Square Feet
City:
County:
Reno
Washoe
State:
Nevada
Flood Zone:
Utilities:
Shape:
Proposed Use:
September 18, 2013 and September
24, 2013 (Re-recorded)
$3,750,000
Sterns Bank National Association
4281038/4283177
Price/Square Foot:
X, Minimal Risk Areas
All Reasonably Available
Slightly Irregular
Future LogistiCenter 395
Industrial Park
$.95
Cash
DP-Clark North Valleys, LLC
Northern Nevada Business
Weekly and the Washoe
County Assessor’s Office and
Public Records
This comparable is located in the North Valleys area of Reno-Sparks. The property consists of the partially completed
Miravalle Subdivision. The property was purchased by Dermody Property’s, who plan to develop the site with a industrial
park. Dermody Property plans to ultimately improve the site with 1.23 million square feet of industrial space. The first
building will include 624,000± square feet and will be a spec building. This sale was featured in the September 30, 2013
issue of the Northern Nevada Business Weekly and was also verified by the Washoe County Assessor’s Office. It is noted
that this property did involve a bank sale.
Sale Price:
Grantor:
Document No.:
Terms Of Sale:
Grantee:
Verification:
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COMPARABLE LAND SALE AERIAL MAP AND DISCUSSION
SALE LS-5
Property Type:
Address/Location:
Vacant Land
Just NE/S of Sha Neva Road, at the
North terminus of Ingenuity
Avenue
538-010-03
Level to Gentle
I (Industrial)
66.00± Acres
2,874,960± Square Feet
City:
County:
Sparks, Spanish Springs
Washoe
Nevada
Zone “X”, Minimal Risk Areas
All Available
Slightly Irregular
Distribution-Warehouse
Development
October 16, 2013
$2.27
Recording Date:
Price/Square Foot:
$6,532,258
Cash
Sale Price:
Terms Of Sale:
Spanish Springs Associates LP
J & J Spanish Springs, LLC
Grantor:
Grantee:
4289896
Jesse Haw, Seller’s
Document No.:
Verification:
Representative and Public
Records
This comparable is the October 2013 sale of 66± acres in the Spanish Springs Business Park in north Sparks. The Spanish
Springs Business Center is a 411± acre master planned Business Park located along the west side of Pyramid Highway, north
of West Calle de la Plata. This Business Park includes manufacturing and distribution uses including Leviton, Wurth USA,
and Silver State Liquor and Wine. The buyer plans to ultimately improve the site with 1.5 million square feet of distribution
space. The buyer is reportedly in negotiations with a potential tenant in its first 600,000 square foot building to be
constructed in 2014. Site work is currently underway on the property. This sale was confirmed by Mr. Jesse Haw of the
Spanish Springs Associates LP, the seller. Mr. Haw is the President of Hawco Properties, the developers of the Spanish
Springs Business Park.
A.P.N.:
Topography:
Zoning:
Parcel Acreage:
Parcel Square Feet:
State:
Flood Zone:
Utilities:
Shape:
Proposed Use:
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COMPARABLE LAND SALE MAP AND DISCUSSION
SALE LS-6
Property Name:
Location:
A.P.N.:
Topography:
Zoning:
Parcel Acreage:
Parcel Square Feet:
Sale Date:
Sale Price:
Grantor:
Vacant Land
East Terminus of Ampere
Drive, 640’ South of Mill
Street
012-282-07 & 13
012-283-01,02,03&08
(Portion)
Level
IC (Industrial Commercial)
18.8477± Acres
821,005± Square Feet
December 13, 2013
$3,750,690
George Avanzino Family
Limited Partnership
4308000
City:
County:
Reno (South Meadows)
Washoe
State:
Nevada
Flood Zone:
Utilities:
Shape:
Proposed Use:
Price Per Square Foot:
Terms Of Sale:
Grantee:
“X”, Minimal Risk Areas
Available
Slightly Irregular
Acquisition by NV Energy
$4.57
Cash to Seller
NV Energy
Kathy Renfrow, NV
Energy
The sale property is a portion of the original Avanzino Ranch, which contains approximately 29± acres. The entire
property had been listed for sale for in excess of three years with the most recent asking price of $7,750,000, or $6.00
per square foot. The sale property has access from the east terminus of Ampere Drive via South Rock Boulevard to the
west and from the west terminus of Ampere Drive via Edison Way to the east. The sale property has adequate access, but
limited street exposure. The property is being purchased by NV Energy, an adjoining property owner.
Document Number:
Verification:
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COMPARABLE LAND LISTING AERIAL MAP
LISTING LL-7
COMPARABLE LAND SALE AERIAL MAP
LISTING LL-8
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COMPARABLE LAND LISTING AERIAL MAP
LISTING LL-9
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COMPARABLE LAND SALES DISCUSSION AND COMPARISON
(Subject Property 1)
The comparable land sales utilized in this analysis range in date of sale from May of
2011 to December of 2013. We have also included three current land listings. The
comparables range in land area from 18.9477± acres to 104± acres, as compared to Subject
Property 1 which contains 90± acres. The comparables illustrate prices ranging from $.95 to
$4.44 per square foot.
Discussion of Adjustments
The comparable properties utilized in this analysis will be compared and correlated to
the subject property based upon several adjustment criteria. These include property rights
conveyed, financing terms, conditions of sale, market conditions, development potential,
location and other physical characteristics. The sales will be analyzed based upon a sale price
per square foot basis.
Due to a lack of paired sales, qualitative adjustments will be made to the sales for the
adjustment criteria. An upward adjustment is made to the comparable’s price per square foot
when the subject is superior to the sale or listing for a specific criteria; likewise, a downward
adjustment is made to the comparable’s price per square foot when the subject is inferior to
the sale or listing for a specific criteria.
Property Rights Conveyed
In this appraisal, the fee simple Market Value of the subject site is being estimated.
As each of the sales utilized in this analysis involve the sale of the fee simple interest of the
property, no adjustment for property rights is required.
Financing-Terms of Sale (Cash Equivalency)
All of the sales utilized in this analysis were cash to seller or cash equivalent
transactions; therefore, no adjustment for cash equivalency is required to the sales.
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Conditions of Sale
Based upon a review of the public records and/or interviews with the persons involved
with each of the sales utilized in this analysis, adjustments for conditions of sales are required
for Sales LS-4 and LS-6. Sale LS-4 involved a bank sale, requiring upward adjustment. Sale
LS-6 was purchased by NV Energy, an adjoining property owner, as plottage, requiring a
downward adjustment.
None of the other sales require adjustments for this criteria, as there were no known
conditions of sale, other than typical buyer and seller motivations, which impacted the sale
prices.
Market Conditions (Date of Sale)
In analyzing 2011/2013 market conditions, we have interviewed a number of real
estate brokers considered knowledgeable in the land submarket. It was the sense of the
interviewees that the real estate market is showing signs of recovery and although there is
increasing interest in industrial land, there remains limited consummated land sales activity to
date. In reviewing the sales data, there is no market evidence to suggest a market conditions
adjustment to the sales at the present time. Therefore, the sales utilized are felt to represent
market conditions as of the subject’s current date of valuation. As Listings LL-7 through LL9 involve asking prices, each of these comparables requires downward adjustment due to their
listing status.
Topography
The subject property has level to gentle topography as does each of the comparables,
therefore, no adjustments for topography are required.
Availability of Utilities
Utility services, including electrical, natural gas, water and sewer services, as well as
cable and phone service, are available to the perimeter of Subject Property 1. It is noted that
development of Subject Property 1 will require extension of utilities to the interior portions of
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the site. Each of the comparables had immediate or reasonable access to utilities. As a result,
no adjustment for availability of utilities is indicated.
Zoning
The subject property is zoned Mixed Use and is located in the Reno-Stead Airport
Regional Center Planning Area Overlay District. The Mixed-Use District will contain
facilities directly associated with airport operations. Other compatible developments may
also be located in the Mixed-Use District. Appropriate land uses include commercial, office,
industrial, and public facility developments.
Sale LS-2 is part of the Kiley Ranch North Development and has Handbook approvals
for arterial-commercial development. Overall, this comparable is considered superior to the
subject in regards to development potential.
None of the other sales require adjustments for this criteria, as they were considered to
have similar zoning and development potential as the subject.
Frontage/Access
The subject property has access from Alpha Avenue and Army Aviation Drive, both
of which are interior airport roadways. The subject does not have direct frontage on a public
street, but is felt to have adequate access.
Sale LS-1 is in an interior parcel, having access from an ingress and egress easement.
Sale LS-5 has access from the north terminus of Ingenuity Avenue. Sale LS-6 has no direct
street frontage and is accessed from the terminus of Ampere Drive. As a result, each of these
comparables is considered similar to the subject in regards to street frontage and access.
Each of the other comparables have superior street frontage and access as compared to
the subject requiring downward adjustments.
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Size
The comparable sales range in land area from 18.9477± acres to 104± acres, as
compared to the subject site, which contains 90± acres. Generally a relationship exists
between the size of the parcel and the per unit price paid. For those sales which are smaller
than the subject property, a downward adjustment will be made to the price per square foot.
Conversely, for those sales which are larger than the subject property, an upward adjustment
will be made to the price per square foot.
Adjustments to Sales
Sale LS-1 is located in the Silver Lake Business Park in the subject neighborhood. In
comparison with the subject, this comparables requires a large downward adjustment due to
its smaller size at 38.34± acres as compared to the subject at 90± acres. On the other hand,
upward adjustments to the comparable are necessary due to its lack of infrastructure and due
to the subject’s location on Airport property. Overall, Sale LS-1, at $2.04 per square foot, is
considered to be a reasonable indicator of an appropriate per unit land value for Subject
Property 1.
Sale LS-2 is located in the Spanish Springs Valley area of Sparks in the Kiley Ranch
North planned development. In comparison with the subject, this comparable requires large
downward adjustments due to its smaller size and its corner situs at two arterial roadways. A
downward adjustment is required due to this comparable’s superior general location. A
downward adjustment is necessary as this property has Handbook approvals for arterial
commercial development. On the other hand, an upward adjustment is necessary due to the
subject’s location on Airport property. Overall, Sale LS-2, at $4.44 per square foot, is
considered to be a very high indicator of an appropriate per unit land value for Subject
Property 1.
Sale LS-3 is located in the Tahoe Reno Industrial Center east of Sparks. In
comparison with the subject, this comparables requires downward adjustments due to its
smaller size and its superior street frontage. On the other hand, a large upward adjustment is
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required due to the subject’s superior general location. An upward adjustment is necessary
due to the subject’s location on Airport property. Overall, Sale LS-3, at $1.14 per square foot,
is considered to be a low indicator of an appropriate per unit land value for Subject
Property 1.
Sale LS-4 is located in the North Valleys area on the east side of Lemmon Drive,
between U.S. 395 and North Virginia Street. In comparison with the subject, this comparable
requires downward adjustments due to its superior street frontage and freeway visibility. On
the other hand, a large upward adjustment is required as this comparable involved a distressed
sale. An upward adjustment is necessary due to the subject’s superior general location in an
established Industrial neighborhood. Further upward adjustment is necessary as the subject is
located on Airport property. Overall, Sale LS-4, at $.95 per square foot, is felt to be a very
low indication of an appropriate per unit land value for Subject Property 1.
Sale LS-5 is a 66± acre site located in the Spanish Springs Business Center in north
Sparks. In comparison with the subject, this comparable requires a large downward
adjustment due to its smaller size. On the other hand, an upward adjustment is necessary due
to the subject’s superior general location and its location on Airport property. This
comparable is similar to the subject in regards to street frontage. Overall, Sale LS-2, at $2.27
per square foot, is considered to be a slightly high indicator of an appropriate per unit land
value for Subject Property 1.
Sale LS-6 is located south of Mill Street and east of South Rock Boulevard in
southeast Reno. In comparison with the subject, this comparable requires a large downward
adjustment due to its superior closer-in location. A large downward adjustment is necessary
due to this comparable’s much smaller size. A downward adjustment is necessary due to this
comparable’s plottage considerations. On the other hand, an upward adjustment is necessary
as the subject is located on Airport property. Overall, Sale LS-6, at $4.57 per square foot, is
felt to be a very high indication of an appropriate per unit land value for Subject Property 1.
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Listing LL-7 includes five adjoining parcels that are currently available for sale
within the subject neighborhood. The site is located on the east side of Stead Boulevard at the
west terminus of Silver Dollar Lane. The site is situated just north of the U.S. 395/Stead
Boulevard interchange. In comparison with the subject, this comparable requires a downward
adjustment due to its superior freeway visibility. A downward adjustment is necessary due to
this comparable’s listing status. A large downward adjustment is necessary due to this
comparable’s smaller land area. On the other hand, an upward adjustment is necessary as this
comparable is an REO property. Further upward adjustment is necessary as the subject is
located on Airport property. Overall, Listing LL-7, at $2.19 per square foot, is considered to
be a slightly high indication of an appropriate per unit land value for Subject Property 1.
Listing LL-8 includes various parcels that are currently available for sale in the
Spanish Springs Business Center in north Sparks. In comparison with the subject, this
comparable requires downward adjustments as it does involve an asking price and generally
much smaller land areas that the subject’s 90± acre site. On the other hand, upward
adjustments are necessary due to the subject’s superior general location and its location on
Airport property. Overall, Listing LL-8, at $2.95 per square foot, is considered to be a high
indication of an appropriate per unit land value for Subject Property 1.
Listing LL-9 includes two adjoining parcels that are currently available for sale in the
Tahoe Reno Industrial Center east of Sparks. In comparison with the subject, this comparable
requires downward adjustments as it involves an asking price and due to its superior street
frontage. On the other hand, a large upward adjustment is required due to the subject’s
superior general location. An upward adjustment is necessary due to the subject’s location on
Airport property. Overall, Listing LL-9, at $1.45 per square foot, is considered to be a low
indication of an appropriate per unit land value for Subject Property 1.
In summary Sales LS-2 and LS-6, at $4.44 and $4.57 per square foot, were considered
to be very high indicators of an appropriate per unit land value for the subject. Listing LL-8,
at $2.95 per square foot, was considered to be a high indicator. Sale LS-3, LS-4 and Listing
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LL-9, at $.95 to $1.45 per square foot, were considered to be low to very low indicators.
Sales LS-1, LS-5 and Listing LL-8 at $2.19 and $2.27 per square foot, were felt to be slightly
high indicators. Sale LS-1, at $2.04 per square foot, was considered to be a reasonable
indicator of an appropriate per unit land value for Subject Property 1.
In estimating an appropriate per square foot land value for the subject, consideration is
given to its general location, its location on airport at the Reno Stead Airport, development
potential, its size, accessibility and other physical characteristics. Consideration is also given
to this comparable’s gently undulating topography, as development will require the extension
of utilities to the interior portions of the site and will also require drainage improvements.
Based upon a careful review of the available data, it is our opinion that an appropriate
per square foot land value applicable to the subject, as of January 6, 2014, is $2.00 per square
foot. Applying the selected per square foot value to the subject property’s 3,920,400± square
feet indicates a Market Value of $7,840,800, which is rounded to $7,850,000.
FINAL MARKET VALUE CONCLUSION
(Subject’s 90± Acre Site, as of January 6, 2014)
$7,850,000
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SALES COMPARISON APPROACH TO LAND VALUE
SUBJECT PROPERTY 2 – 3.57± ACRE SITE
To establish an estimate of the Market Value of Subject Property 2, the Official
Records of Washoe County were searched for sales of similar parcels in the Reno-Sparks
area. All land sales found were investigated, analyzed and compared to the subject property.
Research for current land listings considered similar to the subject property was also
conducted. The sales and listings set forth on the following chart were considered to be
indicative of the Market Value of the subject site. The sales and listings utilized will be
compared to Subject Property 2 on a price per square foot of land area basis.
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COMPARABLE LAND SALES CHART
(Subject Property 2)
Sale
Number
LS-1
LS-2
LS-3
LS-4
LS-5
A.P.N.
Address or Location
082-492-17
NEC of North End of Security Circle,
Reno (North Valleys)
212-050-12
SWC of Woodland Avenue & White Fir Street
Reno West Business Park, West Reno
538-161-03 (Portion)
SEC of Ingenuity Ave. & Hawco Ct.
Sparks (Spanish Springs)
082-492-21
Near The SEC of Old N. Virginia St. & Security Cir.
Reno (North Valleys)
163-090-15
South Meadows Business Park
NE/S Technology Way, 870± Ft. N. of Double
Diamond Parkway, Reno
LL-6
090-051-10 & 090-052-01 & 02
SEC and SWC of Moya Boulevard and Echo
Avenue, Reno (Stead)
LL-7
086-149-07
NWC Mt. Bismark St. & Mt. Anderson St.
Reno (Stead)
Subject
Property
2
086-240-11 (Portion)
NEC Army Aviation Way and Alpha Avenue
Reno-Stead Airport
Sale Date
Sale Price
CLOSED SALES
11/23/2011
$538,500
07/5/2012
$256,000
07/27/2012
$169,876
08/02/2012
$170,000
10/16/2012
$1,295,400
CURRENT LISTINGS
Current Listing
01/06/2014
Various
Current Listing
01/06/2014
$849,420
SUBJECT PROPERTY
Date of Value
01/06/2014
Zoning
Topography
Flood Zone
MUNV
Level
“X”
MUW4
Level
"X"
I
Level
"X"
MUNV
Level
“X”
PUD
Level to Moderate
“X”
I
Level
“X”
I
Level
"X"
MURS
Graded, Level
"X"
Price
Per S.F.
Land Area
2.989
130,201
AC
SF
$4.14
1.02
44,431
AC
SF
$5.76
1.238
53,928
AC
SF
$3.15
1.636
71,264
AC
SF
$2.39
9.576
417,131
AC
SF
$3.10
3.875±
168,795±
5.18±
225,641±
6.847±
298,255±
4.875
212,355
AC
SF
AC
SF
AC
SF
AC
SF
$2.50
3.57
155,509
AC
SF
---
$4.00
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COMPARABLE LAND SALE MAP AND DISCUSSION
SALE LS-1
Vacant Land
Reno
Property Type:
City:
Northeast Corner Security Circle
Washoe
Location:
County:
082-492-17
Nevada
A.P.N.:
State:
Level
Zone “X”
Topography:
Flood Zone:
MUNV (Mixed Use/North Valleys)
Available
Zoning:
Utilities:
2.989 Acres
Irregular
Parcel Acreage:
Shape:
130,201 Square Feet
Investment/Expansion
Parcel Square Feet:
Proposed Use:
November 23, 2011
$180,161
Recording Date:
Price Per Acre:
$538,500
$4.14
Sale Price:
Price/Square Foot:
The Lee M. Steinberg Family Trust
Cash to Seller
Grantor:
Terms Of Sale:
Kappes, Cassiday & Associates
Plottage
Grantee:
Conditions of Sale:
4061062
Terry Albert
Document No.:
Verification:
This parcel was purchased by an adjoining property owner. The site is level, at street grade and has rail access. Access is
available from Security Circle. The surrounding uses include a number of industrial uses. Kappes, Cassiday purchased the
site as a long term investment and possible expansion, but had no immediate plans for development when the sale closed.
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COMPARABLE LAND SALE MAP AND DISCUSSION
SALE LS-2
Vacant Land
Reno
Property Type:
City:
SEC Woodland Ave. & White Fir St.
Washoe
Location:
County:
212-050-12
Nevada
A.P.N.:
State:
Level
Zone “X”
Topography:
Flood Zone:
MUW4
Available
Zoning:
Utilities:
1.02 Acres
Generally Rectangular
Parcel Acreage:
Shape:
44,431 Square Feet
Landscape Business
Parcel Square Feet:
Proposed Use:
July 5, 2012
$250,982
Recording Date:
Price Per Acre:
$256,000
$5.76
Sale Price:
Price/Square Foot:
Messenger Molding, Inc.
Cash to Seller
Grantor:
Terms Of Sale:
Rocking O, LLC
None
Grantee:
Conditions of Sale:
4128787
Scott Owen
Document No.:
Verification:
This is a level site located at the entrance of the Reno/West Business Park. In the years prior to the sale, the property had
been offered for lease at $0.10/ per square foot per month. The buyer owns Reno Green Landscaping and had tried to
purchase the property in the past. The site has level topography and access to all public utilities. Surrounding properties
include a multi-tenant industrial and warehouse/distribution buildings. The Union Pacific Railroad right-of-way is located
across White Fir Street from this parcel, and there is a rail crossing at Woodland Avenue just north of the site.
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COMPARABLE LAND SALE AERIAL MAP AND DISCUSSION
SALE LS-3
Reno, North Valleys
Washoe
Nevada
Zone “X”
All Available
Rectangle
Future Expansion-Plottage
$3.15
Cash to Seller
Silverado Land Management
LLC
4136983
Jesse Haw, Spanish Springs
Document No.:
Verification:
Associates
This comparable sale is located in the Spanish Springs Business Center. This property is a portion of a larger parcel which is
in the process of a boundary line adjustment to create the 1.238± acre sale site. The property was purchased by the adjoining
property owner, Silverado Land Management, LLC.
Property Type:
Address/Location:
A.P.N.:
Topography:
Zoning:
Parcel Acreage:
Parcel Square Feet:
Recording Date:
Sale Price:
Grantor:
Vacant Land
Spanish Springs Business Center
538-161-03 (Ptn.)
Level
I (Industrial)
1.238± Acres
53,928± Square Feet
July 27, 2012
$169,873
Spanish Springs Associates, LP
City:
County:
State:
Flood Zone:
Utilities:
Shape:
Proposed Use:
Price/Square Foot:
Terms Of Sale:
Grantee:
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COMPARABLE LAND SALE AERIAL MAP AND DISCUSSION
SALE LS-4
Property Type:
Address/Location:
A.P.N.:
Topography:
Zoning:
Parcel Acreage:
Parcel Square Feet:
Recording Date:
Sale Price:
Grantor:
Grantee:
Vacant Land
145±’ South of Security Circle, 225±’
East of Old N. Virginia Street
082-492-21
Generally Level
MUNV(Mixed Use North Valleys)
1.636± Acres
71,264± Square Feet
August 2, 2012
$170,000
Teresa M. Rietz, Successor Trustee of
the Johnson Family Trust
City:
County:
Reno
Washoe
State:
Flood Zone:
Utilities:
Shape:
Proposed Use:
Price Per Acre:
Price/Square Foot:
Terms Of Sale:
Ghumman Trucking, Inc. and Cool
Express, Inc.
4138000
Transfer Tax:
Nevada
Zone “X”
All Available
L Shaped
N/A
$100,856
$2.39
$50,000 Down Payment, Seller
Financing, Remainder Balance
at Undisclosed Terms
$697.00
Brian Armon, Commercial Real
Estate Solutions and Public
Records
This comparable is a recent sale of 1.636± acres located off Old North Virginia Street and Security Circle in the North
Valleys area of Reno. This parcel is an interior site having level topography. This property has no public street frontage and
is accessed via a 30 foot wide access easement via Security Circle. The southwest corner and a portion of the property’s
westerly boundary are encumbered with a 20 foot wide emergency access easement. Mr. Brian Armon of Commercial Real
Estate Solutions (Cushman & Wakefield) did indicate that the sale price includes two acre feet of water rights and all utilities
are at the site.
Document No.:
Verification:
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COMPARABLE LAND SALE AERIAL MAP AND DISCUSSION
SALE LS-5
Vacant Land
Reno
City:
Northeast Side of Technology
Washoe
County:
Way, 870± Feet North of
Double Diamond Parkway
163-090-15
Nevada
A.P.N.:
State:
Level to moderate with up
Zone “X” (LOMR Case No. 96Topography:
Flood Zone:
sloping topography to the north
09-652P)
PUD (Planned Unit
Immediately Available
Zoning:
Utilities:
Development)
9.576± Ac
Irregular
Parcel Acreage:
Shape:
417,131±SF
Future Development
Parcel Square Feet:
Proposed Use:
October 16, 2012
$135,276
Recording Date:
Price Per Acre:
$1,295,400
$3.10
Sale Price:
Price/Square Foot:
Prologis Land, LLC
Cash
Grantor:
Terms of Sale:
LSPI Exchange
$5,313.60
Grantee:
Transfer Tax:
Corp./McKenzie Properties
Michael Hoeck, SIOR, NAI
Verification:
4163445
Alliance & Public Records
Document Number:
This comparable is located in the South Meadows Business Park. The property is situated on Technology Way, generally
between Double Diamond Parkway and Double R Boulevard. The property is approximately 870± feet north of Double
Diamond Parkway and 900± feet east of Double R on the northeast side of Technology Way. The property is surrounded by
office-warehouse buildings to the south and west, along with a moderately steep hill to the northeast. In discussions with the
listing broker, Mr. Hoeck, it was indicated that this parcel, as well as, two others were purchased by McKenzie Properties
from Prologis Land, LLC. The sales closed on October 16, 2012 and the total sale price was $2,000,000.
Property Type:
Location:
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COMPARABLE LAND SALES DISCUSSION AND COMPARISON
(Subject Property 2)
Subject Property 2 is generally located at the northeast corner of Army Aviation Way
and Alpha Avenue and contains 3.57± acres of net usable land area. As Subject Property 2
had been planned to be developed with a hangar project, water hydrants had been installed
throughout the property, electric service was extended to the southwest corner of the site and
a drainage system was completed, including two detention basins.
In estimating an appropriate per square foot land value for the subject, consideration is
given to its general location, its location on airport at the Reno Stead Airport, its net useable
land area, existing infrastructure and improvements. Consideration is also given to its access
and other physical characteristics. It is recognized that the subject has access to the airport
facilities and amenities. On the other hand, it is recognized that, in its current configuration,
the utilization of the site is, in all likelihood, limited to a hangar project.
The comparable land sales utilized in this analysis range in date of sale from
November of 2011 to October of 2012. The two listings are current as of the date of
valuation. The comparables range in land area from 1.02± acres to 9.576± acres, as compared
to Subject Property 2 which contains 3.57± acres. The comparables illustrate prices ranging
from $2.50 to $4.14 per square foot.
Discussion of Adjustments
The comparable properties utilized in this analysis will be compared and correlated to
the subject property based upon several adjustment criteria. These include property rights
conveyed, financing terms, conditions of sale, market conditions, development potential,
location and other physical characteristics. The sales will be analyzed based upon a sale price
per square foot basis.
Due to a lack of paired sales, qualitative adjustments will be made to the sales for the
adjustment criteria. An upward adjustment is made to the comparable’s price per square foot
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when the subject is superior to the sale or listing for a specific criteria; likewise, a downward
adjustment is made to the comparable’s price per square foot when the subject is inferior to
the sale or listing for a specific criteria.
Property Rights Conveyed
In this portion of the appraisal, the fee simple Market Value of the subject site is being
estimated. As each of the sales utilized in this analysis involve the sale of the fee simple
interest of the property, no adjustment for property rights is required.
Financing-Terms of Sale (Cash Equivalency)
All of the sales utilized in this analysis were cash to seller or cash equivalent
transactions; therefore, no adjustment for cash equivalency is required to the sales.
Conditions of Sale
Based upon a review of the public records and/or interviews with the persons involved
with each of the sales utilized in this analysis, adjustments for conditions of sales are required
for Sales LS-1, LS-3 and LS-5. Sales LS-1 and LS-3 were each purchased by an adjoining
property owner as plottage, requiring downward adjustment. Sale LS-5 was purchased as part
of a larger portfolio and as a result was discounted, requiring an upward adjustment.
None of the other sales require adjustments for this criteria, as there were no known
conditions of sale, other than typical buyer and seller motivations, which impacted the sale
prices.
Market Conditions (Date of Sale)
In analyzing 2011/2013 market conditions, we have interviewed a number of real
estate brokers considered knowledgeable in the land submarket. It was the sense of the
interviewees that the real estate market is showing signs of recovery and although there is
increasing interest in industrial land, there remains limited consummated land sales activity to
date. In reviewing the sales data, there is no market evidence to suggest a market conditions
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adjustment to the sales at the present time. Therefore, the sales utilized are felt to represent
market conditions as of the subject’s current date of valuation. As Listings LL-6 and LL-7
involve asking prices, each of these comparables requires downward adjustment due to their
listing status.
Topography
The subject property has level to gentle topography as do all of the comparables, with
the exception of Sale LS-5 which has level to moderate topography, requiring an upward
adjustment for topography.
Availability of Utilities
The subject property has reasonable access to all necessary utilities. Each of the
comparables had immediate or reasonable access to utilities. As a result, no adjustment for
availability of utilities is indicated.
Zoning
The subject property is zoned Mixed Use and is located in the Reno-Stead Airport
Regional Center Planning Area Overlay District. The Mixed-Use District will contain
facilities directly associated with airport operations. Other compatible developments may
also be located in the Mixed-Use District. Appropriate land uses include commercial, office,
industrial, and public facility developments.
None of the comparables require adjustments for this criteria, as they were considered
to have similar zoning and development potential as the subject.
Frontage/Access
The subject property has access from Alpha Avenue and Army Aviation Drive, both
of which are interior airport roadways. The subject does not have direct frontage on a public
street, but is felt to have adequate access.
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Sale LS-4 is in an interior parcel, having access from an ingress and egress easement,
which is considered inferior to the subject’s access and frontage on the airport interior
roadways.
Each of the other comparables has public street frontage and access as compared to the
subject requiring downward adjustments.
Size
The comparable sales range in land area from 1.02± acres to 9.576± acres, as
compared to Subject Property 2 which is assumed to contain 3.57± acres of net usable land
area. Generally a relationship exists between the size of the parcel and the per unit price paid.
For those sales which are smaller than the subject property, a downward adjustment will be
made to the price per square foot. Conversely, for those sales which are larger than the
subject property, an upward adjustment will be made to the price per square foot.
Adjustments to Sales
Sale LS-1 is located on Security Circle in the North Valleys area of Reno. In
comparison with the subject, this comparable requires a downward adjustment due to its
public street frontage and access. A downward adjustment is necessary due to this
comparable’s superior development potential as development of the subject will most likely
be limited to a hangar project. A downward adjustment is necessary due to this comparable’s
plottage considerations. On the other hand, upward adjustments are required due to the
subject’s location on Airport property and its existing infrastructure. This comparable is
similar in size to the subject. Overall, Sale LS-1, at $4.14 per square foot, is considered to be
a high indicator of an appropriate per unit land value for Subject Property 2.
Sale LS-2 is located in the Reno West Business Park, which involves a secondary
industrial submarket within the Reno-Sparks area. This business park is generally situated
between Old Highway 40 and the Truckee River in West Reno. In comparison with the
subject, this comparable requires a large downward adjustment due to its smaller size. A
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downward adjustment is required due to this comparable’s public street frontage and access
from two roadways. Downward adjustments are required due to this comparable’s proximity
to the Truckee River greenbelt, an amenity which is considered to enhance the desirability of
the Reno West Business Park. A downward adjustment is required due to this comparable’s
superior development potential. On the other hand, upward adjustments are necessary due to
the subject’s location within the Reno-Stead industrial submarket and due to its location on
Airport property and its existing infrastructure. Overall, Sale LS-2, at $5.76 per square foot,
is considered to be a very high indicator of an appropriate per unit land value for Subject
Property 2.
Sale LS-3 is located in the Spanish Springs Business Center in north Sparks. In
comparison with the subject, this comparable requires downward adjustments due to its
smaller size and its superior public street frontage. A downward adjustment is necessary due
to this comparable’s plottage considerations. A downward adjustment is required due to this
comparable’s superior development potential. On the other hand, an upward adjustment is
required due to the subject’s superior general location. An upward adjustment is necessary
due to the subject’s location on Airport property and due to its existing infrastructure.
Overall, Sale LS-3, at $3.15 per square foot, is considered to be a slightly high indicator of an
appropriate per unit land value for Subject Property 2.
Sale LS-4 is an interior parcel located east of North Virginia Street and south of
Security Circle in the North Valleys area. In comparison with the subject, this comparable
requires a downward adjustment due to its smaller size. A downward adjustment is required
due to this comparable’s superior development potential. On the other hand, an upward
adjustment is required due to this comparable’s inferior accessibility. Further upward
adjustment is necessary as the subject is located on Airport property and due to its existing
infrastructure. Overall, Sale LS-4, at $2.39 per square foot, is felt to be a very low indication
of an appropriate per unit land value for Subject Property 2.
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Sale LS-5 is a 9.576± acre site located in the South Meadows Business Park in
southeast Reno. In comparison with the subject, this comparable requires a large downward
adjustment due to its superior location in the premier business park in the Reno-Sparks area.
A downward adjustment is necessary due to this comparable’s superior public street frontage.
A downward adjustment is required due to this comparable’s superior development potential.
On the other hand, this comparable requires an upward adjustment due to conditions of sale.
Upward adjustments are required due to this comparable’s larger land area and inferior
topography as compared to the subject. An upward adjustment is necessary due to the
subject’s location on Airport property and due to its existing infrastructure. Overall, Sale LS5, at $3.10 per square foot, is considered to be a slightly high indicator of an appropriate per
unit land value for Subject Property 2.
Listing LL-6 includes three individual parcels that are currently available for sale
within the subject neighborhood. The parcels are located on the southeast and southwest
corners of Moya Boulevard and Echo Avenue. In comparison with the subject, these
comparable parcels require downward adjustments due to their public street frontage and
access from two roadways. A large downward adjustment is necessary due to this
comparable’s listing status. A downward adjustment is required due to this comparable’s
superior development potential. On the other hand, a minor upward adjustment is necessary
as this comparable is located in a floodplain. An upward adjustment is necessary as the two
parcels located on the southwest corner of Moya Boulevard and Echo Avenue are encumbered
with a 100 foot wide drainage easement. Further upward adjustment is necessary as the
subject is located on Airport property and due to its existing infrastructure. Overall, Listing
LL-6, at $2.50 per square foot, is considered to be a low indication of an appropriate per unit
land value for Subject Property 2.
Listing LL-7 is a 4.875± acre parcel that is currently available for sale within the
subject neighborhood. The parcel is located on the northwest corner of Mt. Anderson and Mt.
Bismark Streets. In comparison with the subject, this comparable requires a downward
adjustment due to its public street frontage and access. A downward adjustment is required
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due to this comparable’s superior development potential. A large downward adjustment is
necessary due to this comparable’s listing status. On the other hand, an upward adjustment is
necessary due to this comparable’s larger size. Further upward adjustment is necessary as the
subject is located on Airport property and due to its existing infrastructure. Overall, Listing
LL-7, at $4.00 per square foot, is considered to be a high indication of an appropriate per unit
land value for Subject Property 2.
In summary Sale LS-1 and Listing LL-7, at $4.14 and $4.00 per square foot, were
considered to be high indicators of an appropriate per unit land value for the subject. Sale LS2, at $5.76 per square foot, was considered to be a very high indicator. Sale LS-3 and LS-5, at
$3.10 to $3.15 per square foot, were considered to be slightly high indicators. Sale LS-4 and
Listing LL-6, at $2.39 and $2.50 per square foot, were considered to be a low to very low
indicators of an appropriate per unit land value for Subject Property 2.
In estimating an appropriate per square foot land value for the subject, consideration is
given to its general location, its location on airport at the Reno Stead Airport, its net useable
land area, existing infrastructure and improvements. Consideration is also given to its access
and other physical characteristics. It is recognized that the subject has access to the airport
facilities and amenities. On the other hand, it is recognized that, in its current configuration,
the utilization of the site is in all likelihood, limited to a hangar project.
Based upon a careful review of the available data, it is our opinion that an appropriate
per square foot land value applicable to the subject, as of January 6, 2014, is $3.00 per square
foot. Applying the selected per square foot value to the subject property’s 155,509± square
feet of net usable land area indicates a Market Value of $466,527, which is rounded to
$465,000.
FINAL MARKET VALUE CONCLUSION
(Subject’s 3.57± Acre Site, as of January 6, 2014)
$465,000
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MARKET LAND RENTAL ANALYSIS
In order to arrive at an estimate of the Market Rent which would be applicable to the
subject sites, a rate of return must be selected. The selected rate of return will then be applied
to the estimated Market Value of the subject sites to arrive at an estimate of the appropriate
market rent applicable to the subject sites on an annual basis.
In order to estimate an appropriate rate of return, we interviewed several brokers and
property owners active in the Northern Nevada and Northern California real estate markets.
In discussions with officials of the Reno-Tahoe Airport Authority, it was indicated
that the Airport Authority has leased several acres on the east side of the Reno airport which
is referred to as the Airport East Property. Federal Express Ground and R Supply currently
occupy two sites in the Airport East Property. It was indicated that both of these sites have
each been leased for a 50 year period based upon NNN terms. The rental rates are adjusted
every five years based on the Consumer Price Index (CPI). It was further indicated that these
properties were leased at an 8% rate of return applied to the value of the land.
The Reno-Tahoe Airport Authority also negotiated a long-term land lease in 2005 for
the new Hyatt Place hotel located on the west side of the airport. This lease involves a
favorable commercial location near the freeway, and at the entrance to the airport. The
appraised value in 2005 was $18.00 per square foot of land area. It is our understanding that
the site area is 2.60± acres. The initial lease rate for the first two years was at a reduced rate
of $125,000 per year, while the project was under construction, equating to a rate of return of
6.13%. The current rental rate is $176,462.28 per year, which based upon the 2005 value,
equates to a rate of return of 8.66%.
In an interview with officials of the Reno-Tahoe Airport Authority, they also reported
that they are currently negotiating several potential leases of land located to the south of the
Reno airport on McCarran Boulevard. They explained that there have been recent
negotiations involving an 8% rate of return on the land.
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These appraisers also spoke with Mr. Drew Mickel of Reynolds & Brown, a
commercial real estate development and management company with offices in Concord and
San Leandro, California. Reynolds & Brown owns an approximately seven acre parcel on the
northwest corner of Brockway Road and Palisades Drive in Truckee. They are currently in
the process of negotiating a long term land lease for a portion of their parcel to Grocery
Outlet. Mr. Mickel stated that he could not divulge the terms of the lease, but did state that an
appropriate rate of return in the current market is 8%. Reynolds & Brown does a number of
ground leases, primarily in the East Bay area.
In discussions with Mr. Don Welsh of Trammel Crow Company, it was indicated that
his company typically bases land leases on a rate of return from 8% to 9% on a NNN basis.
Mr. Frank Gallagher of Commercial Partners of Nevada has indicated that the land
leases with which he has been involved have been based upon a rate of return in the range of
10%. He also pointed out that these leases generally involve retail-commercial properties and
typically have a CPI adjustment every one to three years for long-term leases.
This firm interviewed Bruce D. Storey, Director, Investment Committee & CFO
Emeritus of Dermody Properties of Reno, Nevada. Mr. Storey indicated that Dermody
Properties entered into a long term land lease, as the Lessee, for a site in Allentown,
Pennsylvania during the first week of 2006. The rate of return which Dermody Properties
was willing to pay for the long term land lease was based upon 7.50% of the market value of
the property. Mr. Storey indicated that the land rent will be adjusted every 5 years during the
50 year term of the lease.
Mr. Storey also stated that Dermody Properties negotiated potential land leases in
2013 on two different properties for two different clients. One property involved a potential
land lease in North Las Vegas. A prospective tenant of a Dermody warehouse building
needed additional parking. They approached the adjacent land owner and negotiated a long
term land lease based upon a rate of return of 8%. The prospective tenant subsequently
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decided that the warehouse space did not suit their needs and therefore the ground lease was
never executed.
The second potential land lease involved a prospective tenant who wanted Dermody
Properties to build them a building in the Harry Reid Research Park, which is operated by the
University of Nevada Las Vegas. Dermody Properties entered into negotiations with UNLV
to lease the land. Both parties then agreed to a rate of return of 8% for the long term ground
lease. The prospective tenant subsequently determined that the cost to construct their desired
improvements was too high and they therefore abandoned the project.
Mr. John Pinjuv, SIOR of Avison Young, indicated that the land leases which he has
negotiated have been based on a rate of return of approximately 9% to 10%. Mr. Pinjuv did
note that the properties he has been involved with are commercial sites and the lease terms are
typically 30 years with options to extend the term. He further noted that rates of return may
have softened due to the weakening economy and lower interest rates.
Mr. Bruce Robertson with Sperry Van Ness in Carson City stated that he was involved
with a ground lease in Carson City. This ground lease was for an Auto Zone store on S.
Carson Street. The ground lease was executed in November of 2011 with an initial term of 15
years, with four five-year options to renew. The lease stipulates that the rate for the first three
years is $37,200 per year. The rate increases to $42,000 per year for years 4 and 5. In years 6
through 10, the lease rate will be $46,200 per year. The lease rate for the remaining five years
of the initial lease term will be $50,820 per year. The total land area of the site is 36,155±
square feet. Based upon a land value of $12.50 per square foot, the initial lease rate equates to
a rate of return of 8.23%.
Finally, a long term ground lease was negotiated for a new McDonald’s restaurant to
be located in Spanish Springs Valley, northeast of Reno, based upon a 7.5% rate of return.
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In summary, our interviews indicate that long term land leases are typically based on
rates of return generally ranging from 7.5% to 9.0% applied to the value of the land. The
majority of the data supports a rate of return on long term land leases of 8.0%. Based upon
the interviews and investigations completed by these appraisers, it is our opinion that an
appropriate rate of return applicable to the subject’s proposed long term leases would be
8.0%.
Applying the selected 8% rate of return to the land value estimate of $2.00 per square
foot for Subject Property 1 results in an annual rental rate for Subject Property 1, as of
January 6, 2014, of $.16 per square foot per year.
MARKET LAND RENT INDICATION
90± ACRE SITE
Per Square Foot Land Value
Rate of Return
Indicated Market Land Rent
Land Area
Market Land Rent Indication
$2.00
8.0%
$.16/SF/Year
3,920,400± SF
$627,264
MARKET LAND RENT CONCLUSION (RD)
(3,920,400± SF Site @ $.16/SF/Year)
MARKET LAND RENT CONCLUSION
(Subject Property 1 – 90± Acres)
$630,000/YEAR
$.16 Per S.F. Per YEAR
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Applying the selected 8% rate of return to the land value estimate of $3.00 per square
foot for Subject Property 2 results in an annual rental rate for Subject Property 2, as of
January 6, 2014, of $.24 per square foot per year.
MARKET LAND RENT INDICATION
3.57± ACRE SITE
Per Square Foot Land Value
Rate of Return
Indicated Market Land Rent
Land Area
Market Land Rent Indication
$3.00
8.0%
$.24/SF/Year
155,509± SF
$37,322
MARKET LAND RENT CONCLUSION (RD)
(155,509± SF Site @ $.24/SF/Year)
$40,000/YEAR
MARKET LAND RENT CONCLUSION
$0.24 Per S.F. Per YEAR
(Subject Property 2 – 3.57± Acres – Net Useable Land Area)
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APPRAISERS’ CERTIFICATION
Each of the undersigned does hereby certify that, unless otherwise noted in this
appraisal report:
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I made a personal inspection of the property that is the subject of this report.
The statements of fact contained in this report are true and correct.
The reported analyses, opinions and conclusions are limited only by the reported
assumptions and limiting conditions and are my personal, impartial and unbiased
professional analyses, opinions and conclusions.
I have no present or prospective interest in the property that is the subject of this
report and no personal interest with respect to the parties involved.
I have not performed services, as an appraiser, regarding the property that is the
subject of this report within the three-year period immediately preceding
acceptance of this assignment.
I have no bias with respect to the property that is the subject of this report or to the
parties involved with this assignment.
My engagement in this assignment was not contingent upon developing or
reporting predetermined results.
My compensation for completing this assignment is not contingent upon the
development or reporting of a predetermined value or direction in value that favors
the cause of the client, the amount of the value opinion, the attainment of a
stipulated result, or the occurrence of a subsequent event directly related to the
intended use of this appraisal.
My analyses, opinions and conclusions were developed, and this report has been
prepared, in conformity with the Uniform Standards of Professional Appraisal
Practice.
No one provided significant real property appraisal assistance to the person signing
this certificate.
The appraisal was not based upon a requested minimum valuation, a specific
valuation, or the approval of a loan.
The appraiser’s state registration/certification has not been revoked, suspended,
canceled or restricted.
The Appraisal Institute conducts a mandatory program of continuing
education for its designated members. As of the date of this report,
Stephen R. Johnson and Cindy Lund Fogel have completed the
requirements under the continuing education program of the Appraisal
Institute.
The use of this report is subject to the requirements of the Appraisal
Institute relating to review by its duly authorized representatives.
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After careful consideration of all data available, and upon thorough personal
investigation of the subject properties and comparable properties analyzed, it is our opinion
that the Market Value of the subject properties is set out as follows:
MARKET VALUE AND MARKET LAND RENT CONCLUSIONS
SUBJECT PROPERTY 1 - 90± ACRE SITE
LAND VALUE CONCLUSION – PER SQUARE FOOT
$2.00/SF
FINAL MARKET VALUE CONCLUSION
(Fee Simple Interest, as of January 6, 2014)
MARKET LAND RENT CONCLUSION
(Subject Property 1 – 90± Acres)
$7,850,000
$.16 Per S.F. Per YEAR
MARKET VALUE AND MARKET LAND RENT CONCLUSIONS
SUBJECT PROPERTY 2 - 3.57± ACRE SITE
LAND VALUE CONCLUSION – PER SQUARE FOOT
$3.00/SF
FINAL MARKET VALUE CONCLUSION
(Fee Simple Interest, as of January 6, 2014)
$465,000
MARKET LAND RENT CONCLUSION
$0.24 Per S.F. Per YEAR
(Subject Property 2 – 3.57± Acres – Net Useable Land Area)
Respectfully submitted,
______________________________
Stephen R. Johnson, MAI, SREA
Nevada Certified General Appraiser
License Number A.0000003-CG
Cindy Lund Fogel, MAI
Nevada Certified General Appraiser
License Number A.0002312-CG
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STANDARD ASSUMPTIONS AND LIMITING CONDITIONS
The acceptance of this appraisal assignment and the completion of the appraisal report
submitted herewith are contingent upon the following assumptions and limiting conditions.
LIMITS OF LIABILITY
This report was prepared by Johnson-Perkins and Associates, Inc. All opinions, recommendations,
and conclusions expressed during the course of this assignment are rendered by the staff of JohnsonPerkins and Associates, as employees, not as individuals. The liability of Johnson-Perkins &
Associates, Inc. and its employees and associates is limited to the client only and to the fee actually
received by the appraisal firm. There is no accountability, obligation, or liability to any third party. If
the appraisal report is disseminated to anyone other than the client, the client shall make such party or
parties aware of all limiting conditions and assumptions affecting the appraisal assignment. Neither the
appraisers nor the appraisal firm is in any way to be responsible for any costs incurred to discover or
correct any physical, financial and/or legal deficiencies of any type present in the subject property. In
the case of limited partnerships or syndication offerings or stock offerings in real estate, the client
agrees that in the event of a lawsuit brought by a lender, a partner or part owner in any form of
ownership, a tenant or any other party, the client will hold the appraiser(s) and the appraisal firm
completely harmless in such action with respect to any and all awards or settlements of any type in such
lawsuits.
COPIES, PUBLICATION, DISTRIBUTION AND USE OF REPORT
Possession of this report or any copy thereof does not carry with it the right of publication,
nor may it be used for any purpose or any function other than its intended use, as stated in the
body of the report. The appraisal fee represents compensation only for the analytical services
provided by the appraiser(s). The appraisal report remains the property of the appraisal firm,
though it may be used by the client in accord with these assumptions and limiting conditions.
This appraisal is to be used only in its entirety, and no part is to be used without the whole
report. All conclusions and opinions concerning the analysis as set forth in the report were
prepared by the appraiser(s) whose signature(s) appears on the appraisal report, unless it is
indicated that one or more of the appraisers was acting as "Review Appraiser." No change of
any item in the report shall be made by anyone other than the appraiser(s). The appraiser(s)
and the appraisal firm shall bear no responsibility for any such unauthorized changes.
CONFIDENTIALITY
Except as provided for subsequently, neither the appraiser(s) nor the appraisal firm may
divulge the analyses, opinions or conclusions developed in the appraisal report, nor may they
give a copy of the report to anyone other than the client or his designee as specified in writing.
However, this condition does not apply to any requests made by the Appraisal Institute for
purposes of confidential ethics enforcement. Also, this condition does not apply to any order
or request issued by a court of law or any other body with the power of subpoena.
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INFORMATION SUPPLIED BY OTHERS
Information (including projections of income and expenses) provided by informed local
sources, such as government agencies, financial institutions, Realtors, buyers, sellers, property
owners, bookkeepers, accountants, attorneys, and others is assumed to be true, correct and
reliable. No responsibility for the accuracy of such information is assumed by the appraiser(s).
Neither the appraiser(s) nor the appraisal firm is liable for any information or the work product
provided by subcontractors. The client and others utilizing the appraisal report are advised that
some of the individuals associated with Johnson-Perkins & Associates, Inc. are independent
contractors and may sign the appraisal report in that capacity. The comparable data relied
upon in this report has been confirmed with one or more parties familiar with the transaction or
from affidavit or other sources thought reasonable. To the best of our judgment and
knowledge, all such information is considered appropriate for inclusion. In some instances, an
impractical and uneconomic expenditure of time would be required in attempting to furnish
absolutely unimpeachable verification. The value conclusions set forth in the appraisal report
are subject to the accuracy of said data. It is suggested that the client consider independent
verification as a prerequisite to any transaction involving a sale, a lease or any other
commitment of funds with respect to the subject property.
TESTIMONY, CONSULTATION, COMPLETION OF CONTRACT FOR APPRAISAL SERVICE
The contract for each appraisal, consultation or analytical service is fulfilled and the total
fee is payable upon completion of the report. The appraisers(s) or those assisting in the
preparation of the report will not be asked or required to give testimony in court or in any other
hearing as a result of having prepared the appraisal, either in full or in part, except under
separate and special arrangements at an additional fee. If testimony or a deposition is required,
the client shall be responsible for any additional time, fees and charges, regardless of the
issuing party. Neither the appraiser(s) nor those assisting in the preparation of the report is
required to engage in post- appraisal consultation with the client or other third parties, except
under a separate and special arrangement and at an additional fee.
EXHIBITS AND PHYSICAL DESCRIPTIONS
It is assumed that the improvements and the utilization of the land are within the boundaries of the
property lines of the property described in the report and that there is no encroachment or trespass
unless noted otherwise within the report. No survey of the property has been made by the appraiser(s)
and no responsibility is assumed in connection with such matters. Any maps, plats, or drawings
reproduced and included in the report are there to assist the reader in visualizing the property and are
not necessarily drawn to scale. They should not be considered as surveys or relied upon for any other
purpose, nor should they be removed from, reproduced or used apart from the report.
TITLE, LEGAL DESCRIPTIONS, AND OTHER LEGAL MATTERS
No responsibility is assumed by the appraiser(s) or the appraisal firm for matters legal in
character or nature. No opinion is rendered as to the status of title to any property. The title is
presumed to be good and merchantable. The property is appraised as if free and clear, unless
otherwise stated in the appraisal report. The legal description, as furnished by the client, his
designee or as derived by the appraiser(s), is assumed to be correct as reported. The appraisal
is not to be construed as giving advice concerning liens, title status, or legal marketability of
the subject property.
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ENGINEERING, STRUCTURAL, MECHANICAL, ARCHITECTURAL CONDITIONS
This appraisal should not be construed as a report on the physical items that are a part of
any property described in the appraisal report. Although the appraisal may contain information
about these physical items (including their adequacy and/or condition), it should be clearly
understood that this information is only to be used as a general guide for property valuation
and not as a complete or detailed report on these physical items. The appraiser(s) is not a
construction, engineering, or architectural expert, and any opinion given on these matters in
this report should be considered tentative in nature and is subject to modification upon receipt
of additional information from appropriate experts. The client is advised to seek appropriate
expert opinion before committing any funds to the property described in the appraisal report.
Any statement in the appraisal regarding the observed condition of the foundation, roof,
exterior walls, interior walls, floors, heating system, plumbing, insulation, electrical service, all
mechanicals, and all matters relating to construction is based on a casual inspection only.
Unless otherwise noted in the appraisal report, no detailed inspection was made. For instance,
the appraiser is not an expert on heating systems, and no attempt was made to inspect the
interior of the furnace. The structures were not investigated for building code violations, and it
is assumed that all buildings meet the applicable building code requirements unless stated
otherwise in the report.
Such items as conditions behind walls, above ceilings, behind locked doors, under the floor, or
under the ground are not exposed to casual view and, therefore, were not inspected, unless specifically
so stated in the appraisal. The existence of insulation, if any is mentioned, was discovered through
conversations with others and/or circumstantial evidence. Since it is not exposed to view, the accuracy
of any statements regarding insulation cannot be guaranteed.
Because no detailed inspection was made, and because such knowledge goes beyond the scope of
this appraisal, any comments on observed conditions given in this appraisal report should not be taken
as a guarantee that a problem does not exist. Specifically, no guarantee is given as to the adequacy or
condition of the foundation, roof, exterior walls, interior walls, floors, heating systems, air conditioning
systems, plumbing, electrical service, insulation, or any other detailed construction matters. If any
interested party is concerned about the existence, condition, or adequacy of any particular item, we
would strongly suggest that a mechanical and/or structural inspection be made by a qualified and
licensed contractor, a civil or structural engineer, an architect or other experts. This appraisal report is
based on the assumption that there are no hidden, unapparent or apparent conditions on the property or
improvements which would materially alter the value as reported. No responsibility is assumed for any
such conditions or for any expertise or engineering to discover them. All mechanical components are
assumed to be in operable condition and standard for the properties of the subject type. Conditions of
heating, cooling, ventilating, electrical and plumbing equipment are considered to be commensurate
with the condition of the balance of the improvements unless otherwise stated. No judgment is made in
the appraisal as to the adequacy of insulation, the type of insulation, or the energy efficiency of the
improvements or equipment which is assumed to be standard for the subject's age, type and condition.
TOXIC MATERIALS AND HAZARDS
Unless otherwise stated in the appraisal report, no attempt has been made to identify or
report the presence of any potentially toxic materials and/or condition such as asbestos, urea
formaldehyde foam insulation, PCBs, any form of toxic waste, polychlorinated biphenyl,
pesticides, lead-based paints or soils or ground water contamination on any land or
improvements described in the appraisal report. Before committing funds to any property, it is
strongly advised that appropriate experts be employed to inspect both land and improvements
for the existence of such potentially toxic materials and/or conditions. If any potentially toxic
materials and/or conditions are present on the property, the value of the property may be
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adversely affected and a re-appraisal at an additional cost may be necessary to estimate the
effects of such circumstances.
SOILS, SUB-SOILS, AND POTENTIAL HAZARDS
It is assumed that there are no hidden or unapparent conditions of the soils or sub-soil
which would render the subject property more or less valuable than reported in the appraisal.
No engineering or percolation tests were made and no liability is assumed for soil conditions.
Unless otherwise noted, the land and the soil in the area being appraised appeared to be firm,
but no investigation has been made to determine whether or not any detrimental sub-soil
conditions exist. Neither the appraiser(s) nor the appraisal firm is liable for any problems
arising from soil conditions. These appraisers strongly advise that, before any funds are
committed to a property, the advice of appropriate experts be sought.
If the appraiser(s) has not been supplied with a termite inspection report, survey or
occupancy permit, no responsibility is assumed and no representation is made for any costs
associated with obtaining same or for any deficiencies discovered before or after they are
obtained.
Neither the appraiser(s) nor the appraisal firm assumes responsibility for any costs or for
any consequences arising from the need or lack of need for flood hazard insurance. An Agent
for the Federal Flood Insurance Program should be contacted to determine the actual need for
flood hazard insurance.
ARCHEOLOGICAL SIGNIFICANCE
No investigation has been made by the appraiser and no information has been provided to the
appraiser regarding potential archeological significance of the subject property or any portion thereof.
This report assumes no portion of the subject property has archeological significance.
LEGALITY OF USE
This appraisal report assumes that there is full compliance with all applicable federal, state and
local environmental regulations and laws, unless non-compliance is stated, defined and considered in
the appraisal report. It is assumed that all applicable zoning and use regulations and restrictions have
been complied with, unless a non-conformity has been stated, defined and considered in the appraisal
report. It is assumed that all required licenses, consents, or other legislative or administrative authority
from any local, state or national government, 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.
COMPONENT VALUES
Any distribution of the total value between the land and improvements, between partial ownership
interests or any other partition of total value applies only under the stated use. Moreover, separate
allocations between components are not valid if this report is used in conjunction with any other
analysis.
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COMPLIANCE WITH THE AMERICANS WITH DISABILITIES ACT
The Americans with Disabilities Act ("ADA") became effective January 26, 1992. It is assumed
that the property is in direct compliance with the various detailed requirements of the ADA.
AUXILIARY AND RELATED STUDIES
No environmental or impact studies, special market studies or analyses, special highest
and best use studies or feasibility studies have been requested or made by the appraiser(s)
unless otherwise specified in an agreement for services and so stated in the appraisal report.
DOLLAR VALUES AND PURCHASING POWER
The estimated market value set forth in the appraisal report and any cost figures utilized
are applicable only as of the date of valuation of the appraisal report. All dollar amounts are
based on the purchasing power and price of the dollar as of the date of value estimates.
ROUNDING
Some figures presented in this report were generated using computer models that make calculations
based on numbers carried out to three or more decimal places. In the interest of simplicity, most
numbers have been rounded. Thus, these figures may be subject to small rounding errors.
QUANTITATIVE ANALYSIS
Although this analysis employs various mathematical calculations to provide value indications, the
final estimate is subjective and may be influenced by our experience and other factors not specifically
set forth in this report.
VALUE CHANGE, DYNAMIC MARKET, ALTERATION OF ESTIMATE BY APPRAISER
All values shown in the appraisal report are projections based on our analysis as of the date of
valuation of the appraisal. These values may not be valid in other time periods or as conditions change.
Projected mathematical models set forth in the appraisal are based on estimates and assumptions which
are inherently subject to uncertainty and variations related to exposure, time, promotional effort, terms,
motivation, and other conditions. The appraiser(s) does not represent these models as indicative of
results that will actually be achieved. The value estimates consider the productivity and relative
attractiveness of a property only as of the date of valuation set forth in the report.
In cases of appraisals involving the capitalization of income benefits, the estimate of market value,
investment value or value in use is a reflection of such benefits and of the appraiser's interpretation of
income, yields and other factors derived from general and specific client and market information. Such
estimates are as of the date of valuation of the report, and are subject to change as market conditions
change.
This appraisal is an estimate of value based on analysis of information known to us at the time the
appraisal was made. The appraiser(s) does not assume any responsibility for incorrect analysis because
of incorrect or incomplete information. If new information of significance comes to light, the value
given in this report is subject to change without notice. The appraisal report itself and the value
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estimates set forth therein are subject to change if either the physical or legal entity or the terms of
financing are different from what is set forth in the report.
ECONOMIC AND SOCIAL TRENDS
The appraiser assumes no responsibility for economic, physical or demographic factors which may
affect or alter the opinions in this report if said economic, physical or demographic factors were not
present as of the date of value of this appraisal. The appraiser is not obligated to predict future political,
economic or social trends.
EXCLUSIONS
Furnishings, equipment, other personal property and value associated with a specific
business operation are excluded from the value estimate set forth in the report unless otherwise
indicated. Only the real estate is included in the value estimates set forth in the report unless
otherwise stated.
SUBSURFACE RIGHTS
No opinion is expressed as to the value of subsurface oil, gas or mineral rights or whether the
property is subject to surface entry for the exploration or removal of such materials, except as is
expressly stated.
PROPOSED IMPROVEMENTS, CONDITIONED VALUE
It is assumed in the appraisal report that all proposed improvements and/or repairs, either
on-site or off-site, are completed in an excellent workmanlike manner in accord with plans,
specifications or other information supplied to these appraisers and set forth in the appraisal
report, unless otherwise explicitly stated in the appraisal. In the case of proposed construction,
the appraisal is subject to change upon inspection of the property after construction is
completed. The estimate of market value is as of the date specified in the report. Unless
otherwise stated, the assumption is made that all improvements and/or repairs have been
completed according to the plans and that the property is operating at levels projected in the
report.
MANAGEMENT OF PROPERTY
It is assumed that the property which is the subject of the appraisal report will be under
typically prudent and competent management which is neither inefficient nor superefficient.
FEE
The fee for any appraisal report, consultation, feasibility or other study is for services rendered and,
unless otherwise stated in the service agreement, is not solely based upon the time spent on any
assignment.
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LEGAL EXPENSES
Any legal expenses incurred in defending or representing ourselves concerning this assignment will
be the responsibility of the client.
CHANGES AND MODIFICATIONS
The appraiser(s) reserves the right, at the cost of the client, to alter statements, analyses,
conclusions, or any value estimates in the appraisal if any new facts pertinent to the appraisal
process are discovered which were unknown on the date of valuation of this report.
DISSEMINATION OF MATERIAL
Neither all nor any part of the contents of this report shall be disseminated to the general public
through advertising or sales media, public relations media, new media or other public means of
communication without the prior written consent and approval of the appraiser(s).
The acceptance and/or use of the Appraisal Report by the client or any third party
constitutes acceptance of the Assumptions and Limiting Conditions set forth in the preceding
paragraphs. The appraiser’s liability extends only to the specified client, not to subsequent
parties or users. The appraiser’s liability is limited to the amount of the fee received for the
services rendered.
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QUALIFICATIONS OF APPRAISER
STEPHEN R. JOHNSON
Professional Designations
MAI - Member Appraisal Institute
SREA - Senior Real Estate Analyst; Society of Real Estate Appraisers
State Licensing and Certification
Certified General Appraiser-State of Nevada
License #A.0000003-CG
(Certified through 04/30/2015)
Certified General Appraiser-State of California
License #AG007038
(Certified through 06/18/2015)
Association Memberships and Affiliations
Member Reno Board of Realtors
Member Nevada Association of Realtors
International Right-of-Way Association
Member Nevada State Board of Equalization (Appointed by Governor Richard Bryan, January 1984 & 1988)
(Appointed by Governor Kenny C. Guinn, March 2000 & 2004)
Member Nevada Commission of Appraisers of Real Estate (Appointed by Governor Bob Miller, August 7, 1989)
Commissioner, Nevada Commission of Appraisers of Real Estate
(Appointed by Governor Jim Gibbons, 2009)
(Appointed by Governor Sandoval, 2012)
President, Nevada Commission of Appraisers of Real Estate
Offices Held
Chairman, National Ethics Administration Division
Vice Chairman, National Ethics Commission
Regional Member, Ethics Administration
Appraisal Institute, Region 1
President, Sierra-Nevada Chapter #60, AIREA Vice President, Sierra-Nevada Chapter #60, AIREA Secretary, Sierra-Nevada Chapter #60, AIREA Vice Governor District 3 (Northern California & Nevada)
Society of Real Estate Appraisers (SREA) Past President & Membership Chairman Reno/Carson/Tahoe Chapter #189
Member 1976 Young Men's Council, SREA, Atlanta, Georgia
1976
1984
1991
1992
1984-1991
2000-2008
1989-1994
2009-Present
2012-2013
1995
1993/94
1989-1992
1989
1988
1987
1980-1981
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QUALIFICATIONS OF APPRAISER
STEPHEN R. JOHNSON
Offices Held (continued)
Discussion Leader 1977 Young Men's Council, SREA,
Las Vegas, Nevada
Elected 1 of 2 National Representatives to the InterNational Board of Governors of the SREA, representing
the Young Men's Council International Professional Practice Committee, SREA International Conference Committee, SREA National Candidates Guidance Committee of the American
Institute of Real Estate Appraisers (AIREA) Chairman National Division of Member and Chapter
Services, AIREA Board of Directors Northern California Chapter #11, AIREA -1
Admissions Committee, Sierra-Nevada Chapter #60, AIREA
Board of Directors, Sierra-Nevada Chapter #60, AIREA
Board of Directors, Reno-Carson-Tahoe Chapter
Appraisal Experience
Independent Fee Appraiser
President, Stephen R. Johnson & Associates
President, Johnson - Wright & Associates
President, Johnson - Perkins & Associates
(Staff of 11 Appraisers)
Alves Appraisal Associates
Alves-Kent Appraisal Associates
1977
1978-1981
1978 & 1979
1978-1981
1981
1980
1984-1986
1976 to present
1976-1992
1994 to present
1972-1976
1970-1972
Qualified as an Expert Witness
Nevada District Courts:
Washoe County, Carson City, Douglas County,
and Elko County
U.S. Bankruptcy Courts:
Reno, Las Vegas, Sacramento, and Los Angeles
U.S. District Court, San Francisco, California
United States Tax Court
Arizona Superior Court, Maricopa County, Phoenix
Douglas County Board of Equalization
Washoe County Board of Equalization
Nevada State Board of Equalization
King County Superior Court, Seattle, Washington
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QUALIFICATIONS OF APPRAISER
STEPHEN R. JOHNSON
Formal Education
Reno High School Graduate Bachelor of Science Degree in Business Administration
Majoring in Real Estate, from the University of
Nevada, Reno Appraisal Education
University of Nevada:
B.A. 430 Real Estate Evaluation
B.A. 432 Real Estate Appraisal Problems
American Institute of Real Estate Appraisers:
Course 1A Basic Appraisal Principles, Methods
& Techniques, San Francisco, CA
Course 1B Capitalization Theory & Techniques,
San Francisco, California
Course 2 Urban Properties,
San Francisco, California
Course 6 Investment Analysis,
Memphis, Tennessee
Society of Real Estate Appraisers:
Course 301 Special Applications of Appraisal
Analysis, Pomona, California
1966
1972
1970
1971
1972
1973
1976
1974
Numerous Continuing Education Seminars and Courses
Appraisal Instructor
Nevada Association of Realtors
Department of Commerce, Real Estate Division, State of Nevada
Appraisal "A" Residential Appraising
Appraisal "B" Apartment and Commercial Property Appraising
Western Nevada Community College
R.E. 206 Real Estate Appraising
Northern Nevada Real Estate School
Real Estate Appraisal
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QUALIFICATIONS OF APPRAISER
STEPHEN R. JOHNSON
REPRESENTATIVE APPRAISAL CLIENTS AND PROPERTIES
BARTON MEMORIAL HOSPITAL
CITY OF RENO
CITY OF SPARKS
COLONIAL BANK
R.J.B. DEVELOPMENT COMPANYCARSON CITY
DOUGLAS COUNTY
LINCOLN COUNTY
LYON COUNTY
WASHOE COUNTY
MINERAL COUNTY
EMERALD BAY POST OFFICE
NEVADA STATE PARK SYSTEM
NEVADA STATE DEPT. OF TRANSPORTATION
NEVADA STATE DIVISION OF LANDS
NEVADA ATTORNEY GENERAL'S OFFICE
U.S. DEPARTMENT OF NAVY
U.S. FOREST SERVICE
FNMA - REGIONAL OFFICE
INTERNAL REVENUE SERVICE
FEDERAL TRADE COMMISSION
WASHOE COUNTY REGIONAL TRANS.
RENO TAHOE AIRPORT AUTHORITY
TAHOE REGIONAL PLANNING AGENCY
CALIFORNIA ATTY GENERAL'S OFFICE
CALIFORNIA TAHOE CONSERVANCY
CITY OF SOUTH LAKE TAHOE
PLACER COUNTY REDEVELOPMENT AGENCY
NEW HAMPSHIRE DEPARTMENT OF JUSTICE
MISSOURI HWY AND TRANS. DEPT COMMISSION
IDAHO TRANSPORTATION DEPARTMENT
COLONIAL BANK
PLUMAS BANK
SECURITY BANK OF NEVADA
LIBERTY BANK
FIRST INDEPENDENT BANK OF NV
NORTHERN NEVADA BUSINESS BANK
NEVADA STATE BANK
UNION BANK
VALLEY BANK OF NEVADA
BANK OF AMERICA
THE BANK OF CALIFORNIA
CROCKER NATIONAL BANK
WELLS FARGO BANK
B OF A TRUST DEPARTMENT
FIRST FEDERAL SAVINGS & LOAN
FIRST WESTERN SAVINGS & LOAN
AMERICAN SAVINGS AND LOAN
NEVADA SAVINGS & LOAN
DILORETO CONST. & DEVELOPMENT
DERMODY PROPERTIES
TRAMMELL CROW CO.
MCKENZIE PROPERTIES
HOMEWOOD HIGH & DRY MARINA
TAHOE KEYS MARINA
TAHOE CITY MARINA
WASHOE MEDICAL CENTER
PLAZA RESORT CLUB
ROYAL BANK OF SCOTLAND
CARSON-TAHOE HOSPITAL
JOHNNY RIBEIRO BUILDER
KEEVER CONSTRUCTION COMPANY
SIERRA PACIFIC POWER COMPANY
SOUTH LAKE TAHOE PUBLIC UTILITY DIST.
TAHOE DOUGLAS SEWER DISTRICT
GLENBROOK WATER COMPANY
TAHOE PARK WATER COMPANY
NORTH FOOTHILL APARTMENTS
MEADOWOOD APARTMENTS
WOODSIDE VILLAGE APARTMENTS
SIERRA WOODS APARTMENTS
AMESBURY PLACE APARTMENTS
SUNDANCE APARTMENTS
KEYSTONE SQUARE SHOPPING CTR.
POZZI MOTORS
CARSON CITY DATSUN-AMC-JEEP
LEMMON VALLEY LAND COMPANY
CONSOLIDATED FREIGHTWAYS
RINGSBY UNITED
SYSTEMS 99
EASTMAN KODAK
HALLMARK CARDS
OSCAR MEYER AND COMPANY
GENERAL ELECTRIC
CHEMETRO
CITY SERVICES MINERAL CO.
SUPERIOR OIL COMPANY
TRAVELERS INSURANCE
FARMERS INSURANCE COMPANY
FIRST AMERICAN TITLE CO. OF NV.
FIDELITY TITLE INSURANCE CO
MERRILL LYNCH RELOCATION
YOUNG ELECTRIC SIGN COMPANY
THE TRUST FOR PUBLIC LANDS
THE TRUCKEE DONNER LAND TRUST
THE CONSERVATION FUND
THE NATURE CONSERVANCY
SUGAR BOWL SKI RESORT
THE FEATHER RIVER LAND TRUST
SKI INCLINE RESORT
KIRKWOOD ASSOCIATES
NORTHSTAR
SQUAW VALLEY U.S.A.
LEWIS HOMES OF NEVADA
SYNCON HOMES
MGM GRAND HOTEL CASINO & THEME PARK
EL DORADO HOTEL - CASINO
COMSTOCK HOTEL – CASINO
LAKESIDE INN HOTEL - CASINO
RAMADA EXPRESS HOTEL - CASINO
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QUALIFICATIONS OF APPRAISER
CINDY LUND FOGEL
Professional Designations
MAI – Member of the Appraisal Institute
2000
State Licensing and Certification
Nevada Certified General Appraiser
License #A.0002312-CG (Certified through 5/31/14)
1996
Offices Held
Board of Directors, Reno/Carson/Tahoe Chapter Appraisal Institute
President, Reno/Carson/Tahoe Chapter Appraisal Institute
Vice President, Reno/Carson/Tahoe Chapter Appraisal Institute
Education Chair, Reno/Carson/Tahoe Chapter Appraisal Institute
President, Reno/Carson/Tahoe Chapter Appraisal Institute
Vice President, Reno/Carson/Tahoe Chapter Appraisal Institute
Treasurer, Reno/Carson/Tahoe Chapter Appraisal Institute
Secretary, Reno/Carson/Tahoe Chapter Appraisal Institute
Occupational History
Johnson - Perkins & Associates
Real Estate Appraiser
2011/2012
2009/2010
2008
2002 to Present
2001
2000
1999
1998
1994 - Present
Johnson - Wright & Associates
Real Estate Appraiser
1992 - 1994
Stephen R. Johnson & Associates
Real Estate Appraiser
1990 - 1992
Admitted as Expert Witness
Washoe County Board of Equalization
Nevada State Board of Equalization
Appraisal Education & Technical Training
Real Estate 103 and 202
Real Estate Financing
American Institute of Real Estate Appraisers
Course 1A-1 "Real Estate Appraisal Principles"
Course 1A-2 "Basic Valuation Procedures"
Course 1BA "Cap Theory & Tech, Part A"
Course 1BB "Cap Theory & Tech, Part B"
Nevada Law (NRS 645C)
Standards of Professional Practice Parts A & B
1986
1986
1991
1992
1993
1993
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QUALIFICATIONS OF APPRAISER
CINDY LUND FOGEL
Appraisal Education & Technical Training (Continued)
Advanced Applications
1993
Report Writing and Valuation Analysis
1995
Case Studies in Law and Ethics
1998
Standards of Professional Practice, Part C
1998
Advanced Income Capitalization
1999
Standards of Professional Practice, Part C
2000 & 2002
7-Hour National USPAP Update Course
2004
2006
7-Hour National USPAP Update Course
Cost Approach to Commercial Appraising
2006
Uniform Appraisal Standards/Federal Land Acquisitions
2007
7-Hour National USPAP Update Course
2007
7-Hour National USPAP Update Course
2008
Business Practices and Ethics
2008
Uniform Appraisal Standards for Federal Land Acquisitions (Yellow Book)
2009
7-Hour National USPAP Update Course
2010
Business Practices and Ethics
2010
Corridor Valuation & Yellow Book Issues and Divided Partial Interests
2010
7-Hour National USPAP Update Course
2012
State of Nevada Economic Overview, Brian Bonnenfant
2013
Appraisal Seminars
Effective Rent and Seller Concessions in Market Value Appraisals
Appraisal Curriculum Overview
Diminution of Value and Severance Damages
Qualitative Analysis: How and Why it is Important
The Lending World in Crisis-What Clients Need
Forecasting Revenue/Appraising Distressed Commercial Real Estate
Valuation of Easements and Other Partial Interests
Construction Defects and Cost Trends & Feasibility Analysis
Valuation of Detrimental Conditions
Spotlight on Common Errors & Confidentiality USPAP Issues
The Essentials, Current Issues & Misconceptions in Appraising
Attacking & Defending an Appraisal in Litigation
Market Analysis and Site to do Business
Analyzing Distressed Properties
Appraising From Blueprints and Specifications
Appraisal Valuation Modeling
Subdivision Valuation
The Road Less Traveled: Special Purpose Properties
Scope of Work Seminar
Appraisal Consulting: A Solutions Approach for Professionals
2013
2011
2011
2011
2011
2009
2009
2008
2008
2008
2007
2007
2006
2005
2005
2004
2004
2004
2003
2002
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QUALIFICATIONS OF APPRAISER
CINDY LUND FOGEL
Formal Education
University of Nevada-Reno: Bachelor of Arts, College of Arts and Science
Truckee Meadows Community College, Associate in Arts
Sparks High School, Sparks, Nevada
1989
1984
1975
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