APPRAISAL REPORT OF: CREEKSIDE GOLF COURSE LAND 701

Transcription

APPRAISAL REPORT OF:
CREEKSIDE GOLF COURSE LAND
701 LINCOLN AVE
MODESTO, CALIFORNIA 95357
STANISLAUS COUNTY
APNS: PORTIONS OF 033-047-025, 033-027-013,
033-027-003, 068-017-001, 067-034-006, 033-025-003,
AND 033-028-008 AND ENTIRETY OF 033-027-004
FOR:
MS. CYNTHIA BIRDSILL
DIRECTOR
COMMUNITY & ECONOMIC DEVELOPMENT
CITY OF MODESTO
1010 TENTH STREET, SUITE 3300
MODESTO, CALIFORNIA 95353
DATE OF VALUE:
JANUARY 7, 2016
BRI 15-193
January 27, 2016
Ms. Cynthia Birdsill
Director
Community & Economic Development
City of Modesto
1010 Tenth Street, Suite 3300
Modesto, California 95353
Re:
Appraisal of Creekside Golf Course Land
701 Lincoln Avenue
Portions of APNs: 033-047-025, 033-027-013, 033-027-003, 068-017-001, 067034-006, 033-025-003, 033-028-008, and the entirety of 033-027-004.
Dear Ms. Birdsill:
As per the contract, we have appraised the above identified property. The subject consists of
portions of multiple city-owned parcels currently developed and utilized as a golf course. We have
been directed by the client to appraise the property as though vacant and available for development
to the highest and best use, therefore the inspection of the property was limited to the land areas
only. This appraisal assumes no value for the existing ground leases for the cellular towers on the
property and that these areas of the property are available for development with the rest of the
property. The area appraised consists of 143± net acres of residential zoned land with Dry Creek
and a developed open space trail along the northern boundary and existing single family residential
neighborhoods to the south, east and west. The purpose of the appraisal assignment is to establish
market value of the fee simple interest of the land only for internal planning regarding the future
potential of the property by the City. The appraisal assumes that the area appraised is a separately
saleable property. The subject has a concluded highest and best use for future residential
development. No costs to convert or subdivide the property have been included in the analysis.
Based upon discussions with the City Planner the property would require a General Plan
amendment to change the open space designation to a residential designation; we assume that this
amendment would eventually be approved. The protracted timeline to development reflects the
lengthy, expensive process of obtaining a General Plan amendment and also the potential
opposition or impact to neighboring properties as a result of converting the golf course to its
highest and best use as speculative development land.
The client and intended user of this report is the City of Modesto. The appraisal constitutes a
narrative Appraisal Report of that property. The following appraisal report contains the scope of
the assignment, required investigation, data and analyses upon which our opinion of market value
is based. The appraisal is subject to the hypothetical condition, extraordinary assumptions, general
assumptions and limiting conditions and certification included in the report.
__________________________ BENDER ROSENTHAL, INC. _________________________
City of Modesto
Ms. Birdsill
Page 2
We have prepared this report in conformance with and subject to the requirements of the Code of
Professional Ethics and the Standards of Professional Practice of the Appraisal Institute, which
fully incorporate the Uniform Standards of Professional Appraisal Practice (USPAP) of the
Appraisal Foundation.
We are pleased to have this opportunity to provide you with professional appraisal services.
BENDER ROSENTHAL, INC.
___________________________
David B. Wraa, MAI, ARA
California Certified General
Real Estate Appraiser
Certificate No. AG023713
____________________________
Amy J. Woodward
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____________________________ BENDER ROSENTHAL, INC. ____________________________
Creekside Golf Course Land
Modesto, California
TABLE OF CONTENTS
TITLE PAGE ................................................................................................................................... i
LETTER OF TRANSMITTAL ...................................................................................................... ii
TABLE OF CONTENTS ............................................................................................................... iv
PROPERTY IDENTIFICATION AND SUMMARY OF SALIENT FACTS.............................. vi
APPRAISAL EXHIBIT ................................................................................................................ vii
AERIAL PHOTOGRAPH ...............................................................................................................x
SUBJECT PROPERTY PHOTOGRAPHS ................................................................................... xi
SECTION
I.
INTRODUCTION ...................................................................................................1
Subject Property
Client and Intended User of the Appraisal
Purpose of the Appraisal; Property Rights Appraised
Scope of the Appraisal
Type of Report
Definitions Used in the Report
Value Premises
Date of Valuation and Date of the Report
Extraordinary Assumptions & Hypothetical Conditions
General Assumptions and / or Limiting Conditions
II.
STANISLAUS COUNTY REGIONAL OVERVIEW ............................................7
Regional Map
Population
Cities / Communities
Transportation
Education
Healthcare
Retail / Shopping Centers
Cultural / Recreational
Industry Employment
Unemployment Rates
Major Employers
Household Income
Housing Tenure / Values
Regional Analysis Conclusions
III.
NEIGHBORHOOD DESCRIPTION / IMMEDIATE ENVIRONS ....................15
Neighborhood Map
Demographic Analysis
Conclusion
Table of Contents, continued
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IV.
RESIDENTIAL MARKET OVERVIEW .............................................................22
National Home Value Trends
Northern Central Valley Region Housing Market Analysis
New Home Housing Trends
Modesto New Home Residential Market Conditions
Discussions with Market-Participants
V.
PROPERTY DESCRIPTION ................................................................................28
General
Site Attributes
Assessor’s Parcel Maps
Other Property Matters
VI.
HIGHEST AND BEST USE ANALYSIS .............................................................35
Highest and Best Use of the Site, As Vacant
Highest and Best Use of the Property, As Improved
VII.
VALUATION ANALYSIS ...................................................................................37
Valuation Method and Considerations
Sales Comparison Approach
VIII.
APPRAISER’S CERTIFICATION .......................................................................46
ADDENDA
ITEM 1
PROFESSIONAL QUALIFICATIONS
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PROPERTY IDENTIFICATION AND SUMMARY OF SALIENT FACTS
Appraisal Assignment:
Per the request of the client, the appraisal assignment
is to establish the market value of the fee simple
interest of the land only for internal planning
regarding the future potential of the property by the
City.
Property Location:
701 Lincoln Avenue
(Stanislaus County)
The property is located at the northern terminus of
Lincoln Avenue.
PROPERTY DATA
Assessor’s Parcel Number:
Portions of 033-047-025, 033-027-013, 033-027003, 068-017-001, 067-034-006, 033-025-003, 033028-008 and the entirety of 033-027-004.
Ownership:
City of Modesto
Sales History:
Based on review of public records, there have been
no transactions noted involving the subject property
within the last 3 years. To the best of our knowledge,
the subject property is not currently in contract or
listed for sale.
Site Area:
143± acres based on an appraisal exhibit provided by
the city identifying the boundaries of the property to
be appraised. See the exhibit on the following page.
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APPRAISAL EXHIBIT
(The land area appraised is identified by the black outline)
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Zoning:
R-1 (Low Density Residential) – City of Modesto
General Plan Designation:
OS – (Open Space) – City of Modesto. Based upon
discussions with the City Planner the property would
require a General Plan amendment to change the
open space designation to a residential designation;
we assume that this amendment would be approved.
Flood Zone:
The majority of the property is located in Flood Zone
X (unshaded); areas of minimal flood hazard.
However, a portion of the property (the portion lying
in Dry Creek) is located in Flood Zone AE; the base
floodplain where base flood elevations are provided.
This information was obtained from the Federal
Emergency Management Agency (FEMA) flood
insurance rate maps, Community Panel No.
06099C0340E, dated September 26, 2008.
The aerial below indicates a shaded area where the
subject is designated to be within the defined flood
area.
Seismic Information:
BRI 15-193
Earthquake risk is low; the properties are not located
in an Alquist-Priolo Special Studies earthquake zone.
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Toxic Hazards Information:
We have not been provided with a Phase I
assessment for the subject property. No evidence of
contamination was noted upon inspection of the
property. However, the appraiser is not an expert in
this field and is not qualified to detect or advise on
similar matters. This appraisal therefore assumes that
there is no toxic contamination on the subject
property. Please refer to General Limiting Condition
Number 15 regarding hazardous materials.
Wetlands:
No studies provided and none known to exist. There
are three small ponds/water features near the center
of the property; these ponds are considered an
amenity rather than a negative impact to the property.
Current Use:
143± acres of government owned Open Space land
used for municipal Golf Course.
Highest and Best Use:
Future single family residential development.
Market Value, as if Vacant and
not Improved with a Municipal
Golf Course, As of January 7, 2016:
$4,300,000
Date of Report:
January 27, 2016
Date of Value:
January 7, 2016
Exposure Period:
Relatively few recent bulk sales of residential lots
and raw residential land were identified in the
market. However, discussions with market
participants and analysis of the few data points
available, indicated marketing times ranging from
about 2 months to several years. Given historical and
current market conditions, an estimated exposure
period of 9 to 12 months is considered appropriate
for the subject property.
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AERIAL PHOTOGRAPH
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SUBJECT PROPERTY PHOTOGRAPHS
View of subject property facing west from Lincoln Avenue
Street view from the subject entrance facing south on Lincoln Avenue
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View facing west along Dry Creek Drive from Lincoln Avenue
View facing south towards Capistrano Drive
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View facing west towards the park near El Pasado Drive
View facing east from northwest end of the property
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View of northwest end of property within the flood zone
View of creek and open space/bike path area north of the subject
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Views along northern boundary of property
View of driving range
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View of ponds
View of golf course structural improvements
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View of parking lot
View facing east in the northeast portion of the property
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View facing south near North McClure Road
View facing west near the corner of North McClure Road and Dry Creek Drive
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I.
INTRODUCTION
SUBJECT PROPERTY
The property appraised consists of portions of multiple city-owned parcels totaling 143± net acres
of residential zoned land with Dry Creek and a developed open space trail along the northern
boundary and existing single family residential neighborhoods to the south, east and west. The
subject site is located within the eastern portion of the city of Modesto at the northern terminus of
Lincoln Avenue, north of Yosemite Boulevard. The subject’s neighborhood consists mostly of
older residential homes built in the mid-1970s to the southwest, mid-1980s to the south and early
1990’s to the southeast. The neighborhood homes are of average quality and condition. Over the
past six months homes have been selling from approximately $150,000 to $200,000 in the
neighborhood southwest of the subject and moving towards the southeast as the homes are newer,
prices have been from approximately $250,000 to $300,000. Homes located north of the creek
(south of Scenic Drive) are selling for higher prices from typically $400,000 to $600,000.
CLIENT AND INTENDED USER OF THE APPRAISAL
The client and intended user of this report is the City of Modesto.
PURPOSE OF THE APPRAISAL; PROPERTY RIGHTS APPRAISED
The purpose (intended use) of the appraisal assignment is to determine the market value of the fee
simple interest of the land for internal planning regarding the future potential of the property by
the City. Other uses of the appraisal may be inappropriate. Limiting Condition No. 10 applies to
subsequent additional use of the appraisal (see General Assumptions and Limiting Conditions).
SCOPE OF THE APPRAISAL
This appraisal is intended to determine the market value of the fee simple interest of the land only.
The property was inspected on January 7, 2016 by Amy Woodward of Bender Rosenthal, Inc.,
accompanied by the golf course manager, Kelly Smith. David Wraa inspected the property
subsequently.
The purpose of the appraisal assignment is to establish market value of the fee simple interest of
the land only for internal planning regarding the future potential of the property by the City. The
appraisal assumes that the area appraised is a separately saleable property. We have been directed
by the client to appraise the property as though vacant and available for development to the highest
and best use, therefore the inspection of the property was limited to the land areas only. This
appraisal assumes no value for the existing ground leases for the cellular towers on the property
and that these areas of the property are available for development with the rest of the property.
The subject has a concluded highest and best use for future residential development. No costs to
convert or subdivide the property have been included in the analysis. Based upon discussions with
the City Planner the property would require a General Plan amendment to change the open space
designation to a residential designation; we assume that this amendment would eventually be
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______________________________ BENDER ROSENTHAL, INC. ___________________________
Modesto, California
approved. The protracted timeline to development reflects the lengthy, expensive process of
obtaining a General Plan amendment and also the potential opposition or impact to neighboring
properties as a result of converting the golf course to its highest and best use as speculative
development land.
The appraisal assignment involved an inspection of the subject property by the appraiser,
interviews with government departments having jurisdiction over the property, and collection of
data pertaining to the subject property and the relevant market. Information was obtained from the
client, the owner, public records, publications, appraisal office files, developers, builders, real
estate agents, and/or knowledgeable persons. Sales data were confirmed with parties directly
involved in the transactions, unless otherwise stipulated. Opinions were sought from
knowledgeable persons. Professional experts in such fields as site engineering, etc., were not hired,
as this would have been beyond the scope of the assignment.
The valuation process also involved an investigation and analysis of regional area demographic
and economic trends, and the Stanislaus County regional housing markets. Neighborhood
attributes such as amenities, services, facilities, and other factors that could influence value were
identified. The highest and best use of the property has been considered in light of these trends and
factors, the degree of marketing success for the existing use, and the economic virtues and
consequences of changing the property’s use.
Information considered relevant to the appraisal assignment has been summarized in the appraisal,
and data pertaining to value have been analyzed using the Sales Comparison Approach. The steps
taken to estimate the market value of the property include the following:

Overview of the current real estate market;

Overview of regional and neighborhood data;

Inspection of the subject property (land only) and data pertaining to the subject property;

Research of comparable properties through sources including Co-Star, MLS, and Loopnet;

Discussions with real estate agents and/or buyers/sellers in the area;

Analysis of this data and calculations; and

Preparation of the report. The appraisal is reported in a narrative Appraisal Report format
(contains a summary of information significant to the solution of the appraisal problem)
We have been directed by the client to appraise the property as though vacant and available for
development to the highest and best use, therefore the inspection of the property was limited to the
land areas only. This appraisal assumes no value for the existing ground leases for the cellular
towers on the property and that these areas of the property are available for development with the
rest of the property.
TYPE OF REPORT
Utilizing USPAP nomenclature, this appraisal is presented in a narrative “Appraisal Report”
format.
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DEFINITIONS USED IN THE REPORT
Market Value1 means the most probable price that a property should bring in a competitive and
open market under all conditions requisite to a fair sale, the buyer and 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; and
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 creatisive financing or sales concessions granted by anyone associated
with the sale.
Fee Simple Estate2 is the absolute ownership of real property unencumbered by any other interest,
subject only to the limitations imposed by the governmental powers of taxation, eminent domain,
police power, and escheat.
Reasonable Exposure Time3 is the estimated length of time the property interest being appraised
would have been offered on the market prior to the hypothetical consummation of a sale at market
value on the effective date of the appraisal; a retrospective estimate based upon an analysis of past
events assuming a competitive and open market. We estimate an exposure period of 9 to 12 months
based upon the market data gathered for this report.
VALUE PREMISES
The property is appraised under the premise that the property is separately saleable as opposed to
its current combined use as a golf course and open space land along the creek. The market value
estimate is stated in terms of cash.
DATE OF VALUATION AND DATE OF THE REPORT
The effective date of the valuation is the date of inspection on January 7, 2016. The date of the
report is the date of the letter of transmittal on January 27, 2016.
Office of the Comptroller of the Currency under 12 CFR, Part 34, Subpart C – Appraisals, 34.42 Definitions [f].
The Dictionary of Real Estate Appraisal (Fifth Edition), Appraisal Institute, Chicago, Illinois, 2010, Pg. 78.
3 Source: Uniform Standards of Professional Appraisal Practice 2010 Edition; Statement 6.
1
2
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EXTRAORDINARY ASSUMPTIONS & HYPOTHETICAL CONDITIONS
Note to Reader: The subject property is subject to the following extraordinary assumptions and/or
hypothetical conditions, which might have affected the assignment results.4
EXTRAORDINARY ASSUMPTIONS
1.
A current preliminary title report was not provided for review. This report is based
upon the extraordinary assumption that there are no conditions associated with title
that adversely affect the value of the property.
2.
Based upon discussions with the City Planner the property would require a General
Plan amendment to change the open space designation to a residential designation;
we assume that this amendment would be approved.
3.
The appraisal of the subject assumes that the area appraised is a separately saleable
property. No costs to convert or subdivide the property have been included in the
analysis.
4.
The subject property has multiple cellular phone towers on the property which are
privately owned, with the ground area leased from the city to these owners. We
have been directed by the client to appraise the fee simple value of the land without
consideration given to the existing leases. This appraisal assumes no value for the
existing ground leases on the property and that these areas of the property are
available for development with the rest of the property.
HYPOTHETICAL CONDITION
1.
4 Source:
The subject property consists of an improved golf course with associated buildings
and improvements. We have been directed by the client to appraise the property as
though vacant and available for development to the highest and best use.
Uniform Standards of Professional Appraisal Practice 2014-2015 Edition, Pg. U-25.
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GENERAL ASSUMPTIONS AND / OR LIMITING CONDITIONS
This appraisal report and the value estimates it contains are expressly subject to the following
assumptions and/or limiting conditions.
1.
Title to the property is marketable.
2.
The proposed property lines as they appear on the ground or on maps are assumed
to be correct; the appraisers have not in any way surveyed the property.
3.
Data, maps, and descriptive data furnished by the client or his representatives are
accurate and correct.
4.
No responsibility is assumed for matters of law or legal interpretation.
5.
No conditions exist that would affect the use and value of the property that are not
discoverable through normal, diligent investigation.
6.
The valuation is based on information from sources believed reliable, and that such
information is correct and accurately reported.
7.
The value estimates are made subject to the purpose, date, and definition of value.
8.
The report is to be considered in its entirety and use of only a portion will invalidate
the appraisal.
9.
This appraisal was made on the premise that there are no encumbrances prohibiting
utilization of the property under the appraiser's estimate of highest and best use.
10.
Possession of this report or a copy does not carry with it the right of publication,
nor may it be used for any purpose or function other than those stated in the report,
nor may it be used by anyone other than the client without the previous written
consent of the appraiser and the appraisal firm, and then only with proper
qualifications and arrangements, possibly including the payment of an additional
fee to the appraisal firm. No part of this narrative report may be reproduced by any
means nor disseminated to the public in any way without the prior written consent
of the appraiser.
11.
This report is subject to review by duly authorized representatives of the Appraisal
Institute.
12.
The liability of the appraiser, the appraisal firm and its employees and associates is
limited to the client only. 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 appraiser nor the
appraisal firm are 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
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party, the client will hold the appraiser and the appraisal firm completely harmless
in such action with respect to any and all awards or settlements of any type in such
lawsuits.
13.
Any person or entity who obtains or reads this report, or a copy, other than the client
specified in this report, expressly assumes all risk of damages to himself or third
persons arising out of reliance on this report and waives the right to bring any action
based on the appraisal, and neither the appraiser nor Bender Rosenthal, Inc. shall
have any liability to any such person or entity.
14.
The appraiser shall not be required to give testimony or appear in court by reason
of this appraisal with reference to the property described in this report unless prior
arrangements have been made.
15.
No responsibility is assumed for building permits, zone changes, engineering, or
any other services or duty connected with legally utilizing the subject property.
16.
Unless otherwise stated in this report, the existence of hazardous material, which
may or may not be present on the property, was not observed by the appraiser. The
appraiser has no knowledge of the existence of such materials on or in the property,
except as discussed in the report. The appraiser, however, is not qualified to detect
such substances. The presence of such substances as asbestos, urea-formaldehyde
foam insulation, or other potentially hazardous materials may affect the value of
the property. The value estimate is predicated on the assumption that there is no
such material on or in the property that would cause a loss in value. No
responsibility is assumed for any such conditions, or for any expertise or
engineering knowledge required to discover them. The client is urged to retain an
expert in this field, if desired.
17.
The property appraised may or may not be subject to the Americans with
Disabilities Act of 1990 (ADA). Title III of this act provides for penalties for
discrimination in failing ". . . to remove architectural barriers. . . in existing
facilities [unless] an entity can demonstrate that the removal. . . is not readily
achievable. . ." Unless otherwise noted in this appraisal, it is assumed that the
property appraised is not substantially impacted by this law. However, no detailed
compliance review has been undertaken by the appraiser, nor is the appraiser an
expert in ADA matters.
18.
It is assumed that the property receives competent management and marketing.
19.
We may or may not have reviewed a title report for this valuation. Unless stated
otherwise, we assume that there are no title matters that would adversely influence
value.
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II.
STANISLAUS COUNTY REGIONAL OVERVIEW
The subject is located in the City of Modesto in Stanislaus County, California. Modesto is a part
of the Modesto Metropolitan Statistical Area (MSA). A regional map is shown below.
REGIONAL MAP
Stanislaus County is located in the north San Joaquin Valley in Central California encompassing
1,515 square miles of land bound by Santa Clara County to the west, San Joaquin County to the
north, Calaveras and Tuolumne Counties to the east, and Merced County to the south. The county
has nine incorporated cities within its boundaries: Modesto, Ceres, Turlock, Riverbank, Hughson,
Oakdale, Waterford, Patterson, and Newman.
Population. As of January of 2015, Stanislaus County had an estimated population of 532,297, an
increase of 0.8 percent over the 2014 population. The rate of growth of Stanislaus County is
generally similar to the State as a whole over the same time period. It is noted, however, that many
of the cities in Stanislaus County have experienced relatively high population growth rates with
Oakdale, Hughson and Turlock leading the way from 2014 to 2015. The table below contains the
2010 Census data through January of 2015 populations for the state, county, cities, and the
unincorporated county area.
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Area
(State/County/City)
14-15
%
Change
0.9
4/1/2010
1/1/2011
1/1/2012
1/1/2013
1/1/2014
1/1/2015
37,253,956
37,427,946
37,680,593
38,030,609
38,357,121
38,714,725
514,453
516,244
519,105
523,707
528,157
532,297
0.8
45,417
45,534
45,764
46,251
46,596
46,989
0.8
Hughson
6,640
6,687
6,785
6,969
7,137
7,222
1.2
Modesto
201,165
201,730
202,834
205,972
207,878
209,186
0.6
Newman
10,224
10,474
10,546
10,626
10,695
10,753
0.5
Oakdale
20,675
20,776
20,904
21,200
21,499
21,773
1.3
Patterson
20,413
20,500
20,593
20,814
20,979
21,094
0.5
Riverbank
22,678
22,773
22,879
23,113
23,305
23,485
0.8
Turlock
68,549
68,809
69,244
69,803
70,362
71,043
1.0
8,456
8,477
8,515
8,582
8,639
8,686
0.5
111,041
110,377
111,067
112,066
0.9
California
Stanislaus County
Ceres
Waterford
Balance Of County
110,236
110,484
Source: Department of Finance Population Estimates
Future Populations: As shown in the table below, population projections indicate that Stanislaus
County is expected to increase by 2.6% between 2015 and 2020, or approximately 0.5% per year.
It is noted there is a slight variance between the Stanislaus County population estimate reported
below by STDB Data and the California Department of Finance, presented in the prior table.
Stanislaus County Historical and Projected
Population Growth
Population
City Total
2020 Projection
2015 Estimate
2010 Population
537,367
523,965
514,453
2000 Population
446,997
Growth 2015-2020
Growth 2000-2015
2.6%
17.2%
Cities / Communities. Stanislaus County contains nine incorporated cities and 14 unincorporated
communities. The four largest urban areas of the county are Modesto, Ceres, Turlock, and Oakdale.
Modesto is one of the largest cities in northern San Joaquin Valley. Modesto is the county seat of
Stanislaus County and has an established commercial downtown area surrounded by older
residential neighborhoods. Modesto’s boundaries have spread over time, with residential,
commercial, and industrial development typical of growth in the latter half of the 20 th century.
Ceres has developed as a suburb of the City of Modesto. Turlock has a similar development pattern
to Modesto, but is less densely populated. Turlock is also home to California State University,
Stanislaus. Oakdale has a small historic district surrounded by recent growth, and has retained a
greater degree of agricultural use than Modesto. These four cities also contain higher density
commercial and industrial uses, and are supported by multi-lane arterial roadways. The towns of
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Riverbank, Hughson, Patterson, Waterford, and Newman are smaller suburban areas that maintain
agricultural uses. These cities contain small downtown areas with established neighborhoods, and
relatively new subdivisions having been developed within these communities in the last decade.
Transportation. State Route 99 bisects Stanislaus County with the majority of development found
along it. Interstate 5 also runs through the county, along the southwest portion with less intense
development. Route 108, also known as McHenry Avenue, runs north and south through the center
of Modesto and intersects major streets, as well as State Route 219. State Route 132 runs east and
west through Modesto and is the direct access to Interstate 5.
Amtrak provides passenger train service to the County via the Parker Road Station in Modesto.
Routes from Modesto connect passengers to other locations including Bakersfield, Sacramento,
San Francisco, and the Sierra Foothill communities. Union Pacific Railroad provides commercial
rail service to Modesto via a vast rail system throughout the western and Midwestern regions of
the United States. Burlington Northern Santa Fe operates in the western two-thirds of the United
States including Mexico and Canada. Modesto and Empire Traction Company (M & ET) operates
a short-line railroad situated in a 2,000 acre industrial park known as the Beard Industrial District.
The Beard Industrial District is located in the heart of California’s agricultural San Joaquin Valley
and is fully developed and zoned for the construction and operation of industrial plants and
processors, distributors and warehouses, and business offices. A large number of industries are
situated in this industrial area, several of which are food related.
The local airport is located two miles southeast of downtown Modesto at 700 Tioga Drive off
South Santa Rosa Avenue and State Route 132, with direct access from Interstate 5. The Modesto
City-County Airport has daily flights to San Francisco through United Airlines under their
SkyWest brand.
Education. Modesto Junior College has two campuses: the east campus is the older campus
located on College Avenue off Tully Road, northwest of the downtown business district, and the
west campus on Blue Gem and Carpenter. The west campus is the newer campus with more
buildings and additional development plans. Stanislaus State University, CSU Stanislaus, is
located on West Monte Vista Avenue in the City of Turlock.
Healthcare. The region is served by three hospitals in the Modesto area: Doctors Medical Center
and Memorial Hospital, and the recently completed Kaiser Permanente facility. Doctors Medical
Center is located north of the central downtown area on Florida Avenue off State Route 108. A
$22 million expansion allows the 465-bed multi-specialty hospital to meet the growing health care
needs of the region. Memorial Medical Center opened as a 72,000 square foot, 99-bed facility in
1970. Affiliated with Sutter Health System, it has grown with the needs of the community to a
311-bed acute care facility.
Retail / Shopping Centers. Vintage Fair Mall is located northeast from the downtown area of
Modesto off State Route 99 and has been a part of Modesto since 1977. Vintage Fair Mall is an
approximately 1.1 million square foot mall with over 120 specialty stores and five major
department stores. The North Pointe Shopping Center, located near Highway 99 at Pelandale
Avenue, is one of the most recent retail development areas and is home to large anchors such as
Lowe’s, Costco, Save Mart, Cost Plus World Market, and Pier 1 Imports. This area is a mix of
freestanding and strip retail structures with a strong mix of national, regional, and local tenants.
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Modesto, California
Cultural / Recreational. The region offers a number of cultural and recreational activities, and
is within close proximity to state parks that offer opportunities for hiking, mountain biking, fishing
and water sports. Presently, there are a number of local golf courses of which Creekside (the
subject of this appraisal), Dryden and Modesto Municipal are among the most popular. Fishing
and water sports can be found within the county.
Industry Employment. The economy of the Modesto MSA provides a desirable mix of jobs for
those migrating to the area. The Modesto MSA is an increasingly diverse economy and its
geography has attracted a number of employers and residents to the area in recent years. Per the
November 2015 statistics provided by the California Employment Development Department, trade
transportation, utilities is the County’s leading employer, followed by educational services and
health care. Shown on the following page are the leading industries and their respective percentage
of Modesto MSA’s total employment.
2015 Employment by Industry
Mining,
Total FarmLogging, and
8%
Construction
5%
Government
15%
Other Services
3%
Manufacturing
11%
Leisure &
Hospitality
10%
Educational
& Health…
Professional &
Business Services
8%
Financial
Activities
3%
Trade,
Transportation &
Utilities
20%
Information
0%
Looking ahead through 2022, the California Employment Development Department (EDD)
projects that the most significant job growth will continue to be the Mining, Logging and
Construction trade.
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Unemployment Rates. The following table presents the civilian labor force, employment, and the
unemployment rate for The Modesto MSA for 2006 to November 2015, the most current data
available.
Modesto MSA Labor Force & Employment (2006 to Current)
Area
Modesto MSA
Year
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015 Nov
Labor Force
224,300
226,900
231,700
234,500
242,900
242,000
242,300
241,700
241,400
241,400
Employment
206,400
207,200
206,000
198,100
201,800
202,100
206,100
210,400
214,400
220,100
Unemployment
17,800
19,700
25,700
36,400
41,100
39,900
36,100
31,200
27,100
21,400
Unemployment
Rate
8.0%
8.7%
11.1%
15.5%
16.9%
16.5%
14.9%
12.9%
11.2%
8.8%
Source: California Employment Development Department (EDD)
According to the Employment Development Department, the most current unemployment
statistics indicate an unemployment rate of 8.8% for the Modesto MSA. The unemployment rate
spiked in the 2008, 2009 and 2010 years in accordance with the depressed economic conditions.
Since that time, the unemployment rate has been steadily declining. The average unemployment
rate for the State of California is 5.7%.
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Modesto, California
Major Employers. Shown below are the major employers within the region (Stanislaus County).
Employer Name
Location
California State University
Turlock
Carlo Rossi Winery
Community Services Agency
Con Agra Foods Inc
Copperidge Winery
CVS Caremark Distribution Ctr
Modesto
Not Available
Oakdale
Modesto
Patterson
Del Monte Foods Inc
Modesto
Doctors Medical Ctr of Modesto
E & J Gallo Winery
Ecco Domani Winery
Fairbanks Cellars
Modesto
Modesto
Modesto
Not Available
Foster Farms
Turlock
Frito-Lay Inc
Hornsby's Pub Draft Cider Ltd
Macdonald Group
Memorial Medical Ctr
Modesto Bee
Oak Valley Hospital District
Peter Vella Winery
Stanislaus County Community Svc
Stanislaus County Community
Modesto
Not Available
Modesto
Modesto
Modesto
Oakdale
Modesto
Turlock
Modesto
Stanislaus County Welfare Dept
Modesto
Andre Champagne Cellars
Modesto
Women Infants Child Prgm-W I C
Modesto
Zabaco Winery
Modesto
Source: State of California Employment Development Department
Industry
Wineries (mfrs)
Schools-Universities &
Colleges Academic
Wineries (mfrs)
Government Offices-County
Canning (mfrs)
Beverages (whls)
Distribution Centers (whls)
Food Products &
Manufacturers
Hospitals
Wineries (mfrs)
Wineries (mfrs)
Wineries (mfrs)
Poultry Processing Plants
(mfrs)
Potato Chips (whls)
Beverages (whls)
Real Estate
Hospitals
Newspapers (publishers/Mfrs)
Hospitals
Wineries (mfrs)
County GovernmentSocial/Human Resources
Health Services
Wineries (mfrs)
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Modesto, California
Household Income. As of 2015, approximately 49% of the County’s households generated
income greater than $50,000 per year. From 2015 through 2020, income levels are estimated to
increase by 13%. The following table is presented summarizing the 2015 estimated and 2020
projected household income levels for Stanislaus County:
Stanislaus County Household Income Distribution
2015
Income Cohort
2020
Number
Percentage
Number
Percentage
<$15,000
21,006
12.5%
20,632
12.0%
$15,000 - $24,999
19,325
11.5%
15,130
8.8%
$25,000 - $34,999
19,493
11.6%
16,506
9.6%
$35,000 - $49,999
25,543
15.2%
24,587
14.3%
$50,000 - $74,999
30,752
18.3%
31,120
18.1%
$75,000 - $99,999
$100,000 - $149,999
20,166
20,838
12.0%
12.4%
25,618
23,727
14.9%
13.8%
$150,000 - $199,999
6,554
3.9%
8,941
5.2%
$200,000+
4,537
2.7%
5,502
3.2%
Total
Avg. Household Income
168,046
$65,092
100%
171,936
$73,650
100%
Est. M edian Household Income
$48,989
$55,398
As can be seen from the table presented previously, the estimated 2015 average household income
is $65,092 and the median income is estimated at $48,989. Current average household income for
all U.S. households is $72,641, with a median household income of $51,939 (per 2014 U.S. Census
Bureau).
Housing Tenure / Values. Of the total number of housing units in the County, it is estimated that
nearly 54% are owner occupied. The balance is renter occupied or vacant as summarized in the
following table:
County 2015 Tenure of Occupied Housing Units
Tenure
Owner-Occupied
Renter-Occupied
Vacant
Total Units
County Total
Percent
53.7%
38.6%
7.6%
99.9%
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Modesto, California
As of 2015, the estimated median owner-occupied housing value was $200,688. As shown in the
following table, 41% of owner-occupied homes have housing values between $100,000 and
$200,000, and 50% of the owner-occupied homes have estimated values over $200,000.
Stanislaus County Estimate of Owner-Occupied
Housing Values
Value
County Total
Number
Percentage
<$50,000
977
1.0%
$50,000 - $99,999
$100,000 - $149,999
7,722
15,542
7.9%
15.9%
$150,000 - $199,999
$200,000 - $249,999
24,339
18,865
24.9%
19.3%
$250,000 - $299,999
$300,000 - $399,999
10,948
9,872
11.2%
10.1%
$400,000 - $499,999
$500,000 - $749,999
3,714
3,030
3.8%
3.1%
$750,000 - $999,999
$1,000,000 +
977
1,759
1.0%
1.8%
Total
97,746
Estimated Median Housing Value
100%
$200,688
Regional Analysis Conclusion. Stanislaus County offers its residences and visitors a variety of
amenities. It offers a diverse work force and the County experienced significant gains in both
residential and commercial growth during 2003-2005. However, after 2006, residential growth in
the County began to slow significantly in accordance with the downturn in the markets. In addition,
significant increases in unemployment were observed over the course of the 2008, 2009 and 2010
years. That being said, general macroeconomic conditions have been improving over the course
of the past 2-3 years through observed decreases in unemployment, albeit at a slow pace. Although
there are still uncertainties with regard to future market conditions, continued stabilization of the
markets are anticipated over the course of the next several years. Further, as will be discussed in
the sections that follow, some new residential development has begun in the Region as well.
Although a full recovery has not yet been achieved, general trends suggest an overall stabilization
of the markets.
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III.
NEIGHBORHOOD DESCRIPTION / IMMEDIATE ENVIRONS
The property appraised is located in the City of Modesto. More specifically, at 701 Lincoln
Avenue, Modesto California. The property is located south of Dry Creek, east of North Riverside
Drive and West of McClure Road. A map of the subject’s neighborhood location is seen below:
NEIGHBORHOOD MAP
The City of Modesto is located in Stanislaus County, in the northern section of the San Joaquin
Valley. The Central Pacific Railroad founded the original Modesto community in 1870, on a site
near the Tuolumne River. Incorporated in 1884, the City of Modesto is the county seat of Stanislaus
County (County), and has traditionally served as the regional center for the County and the
surrounding areas.
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Modesto, California
The city is going through a time of economic growth which is demonstrated by the growth strategy
diagram, which shows the city incorporating the northern areas surrounding the city as well as the
western areas outside of the city are seen as next to be incorporated. These areas are shown as
planned urban areas. Immediately east of the subject is a planned urbanizing area (Johansen CPD).
See map below for additional details.
SUBJECT
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Modesto, California
The subject is located on the eastern portion of the city of Modesto. The neighborhood is bordered
by the Dry Creek to the north, which can only be crossed by Clause Road, a north/south
thoroughfare bordering the neighborhood to the east, and El Vista Avenue, a north/south
thoroughfare bordering the neighborhood to the west. Yosemite Boulevard/Highway 132 borders
the southern end of the neighborhood.
The subject property is adjacent to single-family residential neighborhoods to the south, east and
west, and beyond the creek to the north. A multi-family complex is located just south of the subject
on Lincoln Avenue; this complex consists of condominiums with some owned and some rented
units. At the southwest corner of the subject is Riverside Park. At the northeast corner of the
property the subject is adjacent to open space land owned by the city and beyond this is an 80-acre
orchard and homestead owned by the Gallo family.
The subject’s neighborhood consists mostly of older residential homes. The immediate
surrounding area is comprised of homes built in the mid-1970s to the southwest, mid-1980s to the
south and early 1990’s to the southeast. Over the past six months homes have been selling from
approximately $150,000 to $200,000 in the neighborhood southwest of the subject and moving
towards the southeast as the homes are newer prices have been from approximately $250,000 to
$300,000. The majority of homes average 1,950 square feet in size and are of average quality and
condition. Homes located north of the creek (south of Scenic Drive) are selling for higher prices
from typically $400,000 to $600,000.
Neighborhood commercial amenities and services are located at the southern end of the
neighborhood boundary and border the north side of Yosemite Boulevard/Highway 132, with
heavy industrial uses further south.
East of Clause Road (east of the subject), is the Johansen Comprehensive Planning District. This
area consists of transitional agricultural lands with some new infrastructure installed and two new
schools for the planned area already built; the Peter Johansen High School and the Alice Stroud
Elementary. Several of the parcels within this area are currently being farmed in the interim until
development becomes more eminent.
The subject property is located within the Dry Creek Comprehensive Planning District area which
encompasses approximately 510 acres, and a large portion of the land is publicly owned by the
City of Modesto and also along the Dry Creek flood plain. The land use designation as of currently
for these 510 acres are open space to account for existing residences and the limited potential for
additional dwelling units. The limited potential of additional dwelling units in this area would
account for one unit per 10 acres. The result would encompass a development potential of
approximately 50 dwelling units over 510 acres. The general intention for this specific planning
district is to provide recreational opportunities that accommodate multiple purposes and changes
in recreational preferences over time, expand park and trail systems as land becomes available,
create active and passive recreational areas with universal access, develop adequate facilities for
recreational activities and also consider the natural forces influencing the development of
recreational areas, including potential flooding, prevailing winds, sun orientation and topography.
As previously discussed and identified in the Extraordinary Assumptions, the appraisal assumes
that the area appraised is a separately saleable property. Based upon discussions with the City
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Modesto, California
Planner the property would require a General Plan amendment to change the open space
designation to a residential designation; we assume that this amendment would eventually be
approved. The density restrictions on the property would thereby be changed to reflect the densities
allowed under a residential designation.
DEMOGRAPHIC ANALYSIS
In order to further describe the subject’s immediate neighborhood, statistical information was
obtained from the online Site To Do Business (STDB). A demographic survey was performed
within 1, 3 and 5-mile radii rings around the property appraised. The following is a presentation
of the map and defined areas and a brief discussion of the relevant neighborhood statistics. The
most recent statistical information provided by STDB is as of 2015.
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Modesto, California
Population Growth. Within a 1-mile radius, the survey indicates a population of 16,824 people
as of 2015. By 2020, the population within 1-mile of the subject is expected to grow by 1.8%, or
0.36% per year. Within 3 miles of the subject, the projected population growth between 2015 and
2020 is the same as the 1-mile expected growth (1.8%). This is slightly less than the 5-mile radius
ring over the same time frame.
Historical and Projected Population Growth
Population
1-Mile Radius
3-Mile Radius
5-Mile Radius
2020 Projection
2015 Estimate
2010 Population
17,130
16,824
16,740
91,298
89,666
88,933
216,593
212,266
209,702
2000 Population
17,628
78,775
186,830
Growth 2015-2020
Growth 2000-2015
Source: STDB Data
1.8%
-4.6%
1.8%
13.8%
2.0%
13.6%
Employment. The largest employment industry within 1, 3 and 5 miles of the subject is the
Service Industry at about 50% of the employment base. A distant second and third is the Retail
Trade and Manufacturing Industry.
2015 Estimate of Employment
1-Mile Radius
Business Description
Agriculture/Mining
Construction
Manufacturing
Wholesale Trade
Retail Trade
Transportation/Utilities
Information
Finance/Insurance/Real Estate
Services
Public Administration
Total
Source: STDB Data
Total
Employees
Percent of Total
301
397
3-Mile Radius
5-Mile Radius
Total
Employees
Percent of Total
Total
Employees
Percent of Total
4.4%
923
2.5%
2,488
3.0%
5.8%
1,772
4.8%
5,473
6.6%
931
322
13.6%
4.7%
4,135
1,698
11.2%
4.6%
9,702
3,234
11.7%
3.9%
780
11.4%
4,578
12.4%
11,112
13.4%
315
55
4.6%
0.8%
1,698
406
4.6%
1.1%
4,312
995
5.2%
1.2%
233
3.4%
1,477
4.0%
3,649
4.4%
3,306
48.3%
18,682
50.6%
38,725
46.7%
212
6,845
3.1%
100%
1,551
36,920
4.2%
100%
3,317
82,922
4.0%
100%
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Modesto, California
Household Income. As of 2015, STDB estimates average household incomes within 1-mile of
the property appraised is $76,176. By 2020, the average household income is expected to increase
by approximately 15.3%. The average household income within a 3-mile radius is estimated at
$67,767, which is projected to increase 12.8% by 2020.
Household Income Distribution within a 1-Mile Radius
Income Cohort
2015
2020
Number
Percentage
Number
Percentage
<$15,000
$15,000 - $24,999
$25,000 - $34,999
$35,000 - $49,999
$50,000 - $74,999
$75,000 - $99,999
$100,000 - $149,999
$150,000 - $199,999
$200,000+
Total
406
594
743
937
994
703
674
383
286
5,714
$76,176
7.1%
10.4%
13.0%
16.4%
17.4%
12.3%
11.8%
6.7%
5.0%
100%
389
447
598
894
958
877
761
534
354
5,808
$87,801
6.7%
7.7%
10.3%
15.4%
16.5%
15.1%
13.1%
9.2%
6.1%
100%
$53,186
$62,805
Household Income Distribution within a 3-Mile Radius
Income Cohort
<$15,000
$15,000 - $24,999
$25,000 - $34,999
$35,000 - $49,999
$50,000 - $74,999
$75,000 - $99,999
$100,000 - $149,999
$150,000 - $199,999
$200,000+
Total
2015
2020
Number
Percentage
Number
Percentage
3,557
3,189
3,496
4,600
5,581
3,802
4,201
1,380
859
30,665
$67,767
$51,418
11.6%
10.4%
11.4%
15.0%
18.2%
12.4%
13.7%
4.5%
2.8%
100%
3,459
2,493
2,961
4,332
5,516
4,830
4,706
1,839
1,028
31,164
$76,455
$58,290
11.1%
8.0%
9.5%
13.9%
17.7%
15.5%
15.1%
5.9%
3.3%
100%
Source: STDB Data
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Modesto, California
Estimated Housing Values. The subject’s immediate area is largely characterized as being older
single-family developments. As can be seen from the following table, over 50% of homes within
1-mile of the subject’s area have estimated values between $150,000 and $250,000 and very few
homes greater than $400,000. The high end of the value range are being attained in the area north
of the creek in the neighborhoods along Scenic Drive.
2015 Estimate of Owner-Occupied Housing Values
Value
1-Mile Radius
Number
Percentage
3-Mile Radius
Number
Percentage
5-Mile Radius
Number
Percentage
<$50,000
7
0.2%
90
0.5%
359
0.9%
$50,000 - $99,999
$100,000 - $149,999
165
749
4.5%
20.4%
1,256
2,835
7.0%
15.8%
3,585
7,011
9.0%
17.6%
$150,000 - $199,999
1,190
32.4%
4,664
26.0%
10,358
26.0%
$200,000 - $249,999
746
20.3%
3,785
21.1%
7,649
19.2%
$250,000 - $299,999
$300,000 - $399,999
345
272
9.4%
7.4%
2,368
1,973
13.2%
11.0%
4,661
3,984
11.7%
10.0%
$400,000 - $499,999
92
2.5%
502
2.8%
1,036
2.6%
$500,000 - $749,999
$750,000 - $999,999
55
15
1.5%
0.4%
251
54
1.4%
0.3%
518
159
1.3%
0.4%
$1,000,000 +
40
1.1%
197
1.1%
518
1.3%
Total
3,673
100%
17,940
100%
39,838
100%
Source: STDB Data
CONCLUSION
The subject is located the City of Modesto and is within the Dry Creek Comprehensive Planning
District Area. The immediate area benefits from relatively strong household income levels, a good
school system, proximity to commercial amenities, and has adequate access. Projected growth
coupled with strong demographics should assist in maintaining demand for new home
construction.
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Modesto, California
IV.
RESIDENTIAL MARKET OVERVIEW
Given that the property appraised is slated for residential use, a discussion of the residential market
is merited. Data was obtained from multiple sources including The Gregory Group and Standard
& Poors. The following is a discussion of the national housing trends, as well as the trends
observed in the North-Central Valley market areas specifically.
NATIONAL HOME VALUE TRENDS
The S&P/Case-Shiller Home Price Indices measures the residential housing market, tracking
changes in the value of the residential real estate market in 20 metropolitan regions across the
United States and the US as a whole. These indices use the repeat sales pricing technique to
measure housing markets. First developed by Karl Case and Robert Shiller, this methodology
collects data on single-family home re-sales, capturing re-sold sale prices to form sale pairs. The
following is a summary of National housing information and trends contained in the latest S&P
Press Release, dated November 24, 2015.
The chart above depicts the annual returns of the U.S. National, 10-City and the 20-City Composite
Home Price Indices. The S&P/Case-Shiller U.S. National Home Price Index covers all nine U.S.
census divisions. Over the last 12 months, prices rose 5.0% and 5.5% as measured by the 10 and
20 City Composites respectively in March 2015.
“Home prices and housing continue to show strength with home prices rising at more than double
the rate of inflation,” says David M. Blitzer, Managing Director and Chairman of the Index
Committee at S&P Dow Jones Indices. “The general economy appeared to slow slightly earlier in
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Modesto, California
the fall, but is now showing renewed strength. With unemployment at 5% and hints of higher
inflation in the CPI, most analysts expect the Federal Reserve to raise its Fed Funds target range
to 25 to 50 basis points, the first increase since 2006. While this will make news, it is not likely to
push mortgage rates far above the recent level of 4% on 30 year conventional loans. In the last
year, mortgage rates have moved in a narrow range as home prices have risen; it will take much
more from the Fed to slow home price gains. “The strength seen in home prices since the bottom
in 2012 led some to wonder if we’re entering a new bubble. While bubbles can only be reliably
identified in hindsight, one useful measure compares the increase in home prices to the change in
rents. The first chart below shows the year-over-year change in the S&P/Case-Shiller National
Home Price Index and the year-overyear change in the rent of primary residence series reported as
part of the Consumer Price Index. Home prices are far more volatile. At the same time, the most
recent data do not show a huge spread between the two series.”
The chart above shows the index levels for the U.S. National, 10-City and 20-City Composite
Indices. As of September 2015, average home prices for the MSAs within the 10-City and 20-City
Composites are back to their winter 2007 levels. Measured from their June/July 2006 peaks, the
peak-to-current decline for both Composites is approximately 11-13%. The recovery from the
March 2012 lows is 35.1% and 36.4% for the 10-City and 20-City Composites.
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NORTHERN CENTRAL VALLEY REGION HOUSING MARKET ANALYSIS
The following sections discuss in more detail building permits, new home sales, new home pricing
and new home inventory in the Northern Central Valley, the subject’s market area. The NorthernCentral Valley market area is comprised of San Joaquin and Stanislaus Counties. The following
information was published by the Gregory Group and details statistics as of the end of 3rd Quarter
2015, the most recent information available as of this writing. The cities discussed in this Northern
Central Valley Market Area are; Escalon, Lathrop, Lodi, Manteca, Mountain House, Stockton,
Tracy, Modesto, Oakdale, Patterson and Turlock.
Building Permits. A total of 992 building permits for single-family residential construction were
issued in the first 9 months of 2015, compared to 1,231 units permitted during the first 9 months
of 2014. As such, the first 3 Quarters 2015 is set slower than the first 3 quarters of 2014. Since the
peak in 2004, building permit issuance declined dramatically on an annual basis until 2011. In
general, 2012 demonstrated positive trends in building permit issuance. However, the number of
permits issued in 2015 was nearly 31% lower than the previous year. The following table is
presented detailing the historical residential building permit activity in the region:
North Central Valley Region- Single Family Building Permits
1st Qtr
2nd Qtr
Single-Family Permits
2005
2,585
2,577
2006
1,648
1,789
2007
1,141
1,057
2008
342
393
2009
140
341
2010
239
261
2011
195
255
2012
181
359
2013
392
435
2014
327
578
2015 Est.
311
297
Percent Change
-4.89%
Source: State of Cities Data System (SOCDS)
3rd Qtr
2,345
1,047
637
286
279
259
234
296
235
326
384
4th Qtr
1,603
1,057
452
187
231
192
166
319
233
314
75
YTD
1,067
Year
9,110
5,541
3,287
1,208
991
951
850
1,155
1,295
1,545
1,067
% Change
-39.18%
-40.68%
-63.25%
-17.96%
-4.04%
-10.62%
35.88%
12.12%
19.31%
-30.93%
--
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Modesto, California
NEW HOME HOUSING TRENDS
In the following sections we will further detail housing trends for new construction subdivisions
in the North Central Valley based on data provided by The Gregory Group. The most recent data
(3rd Quarter 2015) is summarized on the following table for the North Central Valley Region.
Average Price
Median Price
Average Home
Size
Average Pr/Sq Ft
Ttl Wkly Sales
Rate
Quarter Sold
Qtr Wkly Sales
Rate
Unsold Inventory
Weeks of
Inventory
1st Qtr
2nd Qtr
3rd Qtr
4th Qtr
1st Qtr
2nd Qtr
3rd Qtr
Qtr %
2014
$403,254
$395,880
$407,475
$400,495
$406,330
$398,490
$409,256
$398,490
2015
$400,782
$399,990
$411,192
$401,990
$423,444
$414,990
Change
3.0%
3.2%
Year
Ago %
Change
4.2%
4.1%
2,408
2,481
2,470
2,477
2,434
2,447
2,477
1.2%
0.3%
$171.04
$166.89
$167.10
$167.88
$167.63
$170.92
$173.47
1.5%
3.8%
0.80
0.96
0.83
0.81
0.87
1.06
1.20
13.2%
44.6%
243
253
346
281
432
545
390
-28.4%
12.7%
0.75
0.78
0.74
0.60
0.95
1.27
0.77
-39.4%
4.1%
171
222
327
215
432
298
275
-7.7%
-15.9%
9
9
11
7
6
9
6
-33.3%
-45.5%
Source: The Gregory Group
New Home Sales (Absorption) Data. Based on the Gregory Group data, home sales have
fluctuated on a quarterly basis over the course of the last year and a half. From the first quarter of
2014 to the third quarter of 2014, sales activity was steadily increasing. In the 4th Quarter of 2014,
new home sales declined somewhat relative to the prior quarter, but still overall strong relative to
the 4th Quarter of 2013 at 163 new homes sold. The 1st Quarter of 2015 observed a significant
spike in new home sales with reportedly 432 units sold in that quarter. This rise continued through
the second quarter of 2015, which saw another spike at 545 new homes sold during that time. The
third quarter in2015 saw a decrease in new homes sold, however, the overall trend throughout the
last two years has been a positive climb. As of the third quarter in 2015 the new homes sold equates
to an average weekly sales rate of 1.20 homes or about 4.8 units per month.
New Home Base Pricing. The average detached new-home price in the two-county North-Central
Valley Region was at $423,444 at the end of 3rd Quarter 2015, which equated to an increase of
4.21% from the prior year and an increase of 2.49% from the prior quarter.
Most of the actively marketing subdivisions in the Fresno/Clovis area experienced increases of
base pricing over the course of the 2013 and 2014 year. More recent surveys of the 2015 year
indicate that absorption of product has been increasing which has prompted additional base price
increases. The base pricing does not reflect buyer incentives, which are prevalent in this market
area. Incentives ranging from $0-$15,000 range are common in this market. The price increases
are often offset by incentives in order to entice buyers and increase absorption.
New-Home Inventory. At the end of the 3rd Quarter 2015 the total unsold new-home inventory
for the North-Central Valley Region was 275 units. Given current absorption rates, this results in
6 weeks of available inventory, representing a decrease from 9 weeks of unsold inventory
remaining at the end of 2nd Quarter 2015.
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Modesto, California
MODESTO NEW HOME RESIDENTIAL MARKET CONDITIONS
The property appraised is located in the City of Modesto. As such, a brief overview of the current
new home prices and other statistics within the City of Modesto is merited. As of the beginning of
the 4th quarter of 2015 the Gregory Group surveyed that there were no subdivisions actively selling
homes. Discussions with the City of Modesto’s building department has illustrated that there was
a strong decline in building permits which is one factor that affects the soft residential market. It
is noted that the number of permits issued in 2015 more than tripled that of 2014, but is still
significantly lower than historical data.
Year
SF
Building
Permits
2005
2006
2007
2008
2009
2010
2011
2012
398
261
289
139
42
16
13
20
2013 2014 2015
11
12
38
SF Building Permits
450
400
350
300
250
200
150
100
50
0
1
2
3
4
5
6
7
8
9
10
SF Building Permits
According to discussions with market participants and City officials, there were many tentative
maps issued and approved pre-recession, however, some of those products were never built due to
economic conditions. As of currently, those previously approved tentative maps are being moved
to final status. These lots approved pre-recession were reported to be 505 lots. Recently submitted
and approved maps contribute 173 additional lots, 29 of which are currently heading towards
construction, meaning that there is a total of 649 vacant and approved lots that would need to be
absorbed before new product would be needed in the market. Given this supply, it will likely be
some number of years before demand, and new home price points, spur additional development of
paper lots and raw residential land.
DISCUSSIONS WITH MARKET-PARTICIPANTS
Prior to the downturn in the markets observed in the 2006 through 2008 years, the City of Modesto
was rapidly expanding with regard to residential development. Development was spurred by
spillover demand created from business people and families who commuted to the Bay Area for
employment. At that time, price points of homes in the Bay Area were significantly higher than
BRI 15-193
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Modesto, California
those in the Central Valley and the cost savings for home ownership made economic sense despite
extensive commute times. However, as of the 2008 year, demand for new homes in the Modesto
area declined significantly with the collapse of the
residential markets. As time progressed, bank owned resale product saturated the market and price
points for homes fell given lack of demand. Gradually, however, resale product was absorbed with
the stabilization of the markets.
More recently, price points of homes in the Bay Area have been increasing, most significantly
during the course of the 2012 through 2014 years. Consequently, as of the 2014/2015 years,
markets closer to the Bay Area such as Manteca have begun to see market conditions shift
positively toward new home sales activity given increased demand once again spurred from
relatively high housing prices in the Bay Area. This demand has not yet spread to the Modesto
market.
Information provided the City Planning Department revealed an increasing trend in single family
building permits being pulled. By December of 2015, it was reported that a total of 38 permits
were pulled, which is the highest number of permits since 2009 but still significantly lower than
pre-recession levels.
Discussions with residential land brokers with PMZ Real Estate, who are actively marketing land
in the Modesto and surrounding markets, indicate little to no demand being received from
residential developers in the Modesto area. One reason indicated was the difficulties and protracted
timeline for processing and obtaining entitlements through the city. Another reason indicated was
that there was no demand currently from the commuter market, as there are adequate affordable
and more desirable locations currently developing, which are much closer to the Bay Area. There
is also a substantial amount of land that is available for residential development, which is currently
not listed and being held for improvement in the market.
The limited number of land sales in the area confirm this lack of current demand. Land located in
areas currently developing, such as west of Manteca are selling for $150,000 to $200,000 per acre
for land with entitlements. Speculative land sales with protracted development timelines as seen
in the valuation section are selling from $24,000 to $50,000 per acre with the highest prices being
attained for properties with shorter holding periods.
Conclusion. The subject property consists of a 143 acre municipal golf course located within the
City of Modesto with long term speculative residential development potential. Residential market
conditions have been strengthening over the course of the last several years which in turn has been
applying upward pressure on prices of transitional land similar to the property appraised. However
there is a significant amount of potential residential lots further along in the development process
available on the market which exacerbates the timeline for development of properties similar to
the subject. There are several other potential development sites with no entitlements that would
likely be considered for development before the subject. Based on the supply of lots further along
the entitlement process and the demand present in the market development of the subject as a
subdivision is at least 5 to 10 years based on current on market conditions.
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Modesto, California
V.
PROPERTY DESCRIPTION
GENERAL
The property appraised consists of portions of multiple city-owned parcels totaling 143± net acres
of residential zoned land with Dry Creek and a developed open space trail along the northern
boundary and existing single family residential neighborhoods to the south, east and west. The
site is located within the eastern portion of the city of Modesto at the northern terminus of Lincoln
Avenue, north of Yosemite Boulevard. The site has good access, with several street frontages on
the south, east and western boundaries of the property. Municipal utilities are readily available to
the property.
SITE ATTRIBUTES
APNs:
Portions of 033-047-025, 033-027-013, 033-027003, 068-017-001, 067-034-006, 033-025-003, 033028-008 and the entirety of 033-027-004.
Size:
143± net acres based on an appraisal exhibit provided
by the city identifying the boundaries of the property
to be appraised.
Census Tract:
Census Tract No.: 20.04
Zoning:
R-1, Low Density Residential. The R-1 zoning
designation is a low density single family residential
designation with a minimum lot size of 5,000 square
feet.
General Plan:
OS – (Open Space) – City of Modesto
Surrounding Land Uses:
The immediate surrounding properties consist of
residential properties to the north and west, orchards
to the and east, single and multi-family residences to
the south.
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Modesto, California
ASSESSOR’S PARCEL MAPS
BRI 15-193
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Modesto, California
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Modesto, California
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Modesto, California
Shape:
The subject property is irregular in shape but
functional for residential development.
Frontage/Access:
The property appraised has primary access from
Lincoln Avenue, which generally bisects the
property. Lincoln Avenue is a two-lane, north/south
residential roadway from Yosemite Boulevard (a
four-lane, east/west thoroughfare to the south). The
subject also has approximately 535 linear feet of
frontage on North McClure Road along the
easternmost edge, 2,550 linear feet along Dry Creek
Drive at the southeast boundary, and in the western
portion of the property approximately 700 linear feet
along Capistrano Drive, 750 linear feet along El
Pasadoro Drive and 365 linear feet on North
Riverside Drive.
Exposure:
The property has localized exposure along all the
previously described street frontages.
Topography:
The golf course has gently rolling topography with
some lower lying areas near the creek at the
northwest area of the property. The topography of the
site does not appear to inhibit future development.
Soil Conditions:
No specific soil or subsoil survey was provided to the
appraiser for the subject property. There are no
known major problems with building structures due
to the soil conditions.
Utilities:
Municipal utilities are located within close proximity
to the property appraised.
Flood Zone:
The majority of the property is located in Flood Zone
X (unshaded); areas of minimal flood hazard.
However, the northwest portion of the property is
located in Flood Zone AE; the base floodplain where
base flood elevations are provided.
The entire northern boundary of the subject is
adjacent to the Dry Creek trail area which is all AE
flood zone. The trail area and creek are carved out of
the parcel areas as shown in the exhibit provided by
the client. See page ix for appraisal exhibit detailing
the subject appraised areas.
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Modesto, California
This information was obtained from the Federal
Emergency Management Agency (FEMA) flood
insurance rate maps, Community Panel No.
06099C0340E, dated September 26, 2008.
Site Improvements:
The subject property is improved as a municipal golf
course and has several accessory structures. The site
consists primarily of manicured grass, trees, three
ponds, concrete and asphalt paved walkways, and
fencing around the driving range. As per the
appraisal assignment requested by the client, this
appraisal is of the underlying land only.
Current Entitlement Status:
None
Estimated Timeline to Development: The unentitled land will require a general plan update
and map approvals prior to developing. While the
location is desirable for single family residences
given proximity to the bike trail and creek, the
market is not currently exhibiting high demand for
new single family residential homes as evidenced by
the 38 permits issued last year for single family
residential construction. There are several other
prospective single family residential development
properties farther along the entitlement path and
there will likely be public opposition to the change
of use to the property from a golf course to
speculative development, all of which results in the
timeline for development of the subject being
protracted. There is not sufficient demand in the
market at this time for speculative development and
it is estimated that development of the subject would
not be realized for at least 5 but more likely 10 years.
OTHER PROPERTY MATTERS
Easements:
A preliminary title report was not provided for this
analysis. This report assumes that there are no
significant easements present that could have a
negative impact on value.
Seismic Information:
The subject property is not within an Alquist-Priolo
Special Studies Zone.
Cultural, Recreational,
Historical Significance:
The property was developed as a golf course in the
early 1990’s at the same time the adjacent residential
subdivisions to the south and southeast were being
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Modesto, California
developed. The golf course adds appeal to the
surrounding homes given the desirable views
provided to the homes fronting the golf course. The
recreational use of the property is also appealing to
the nearby residences.
Property Tax Data:
The subject is owned by the City of Modesto and
therefore is exempt from property taxes.
Overall Comments:
The subject property consists of 143± net acres of
residential zoned land with Dry Creek and a
developed open space trail along the northern
boundary and existing single family residential
neighborhoods to the south, east and west. The site
is located within the eastern portion of the city of
Modesto and has good access, with several street
frontages on the south, east and western boundaries
of the property. The surrounding residential
neighborhoods are of average quality and condition.
The subject property has several positive features
and amenities for the potential development of the
property to residential development as it is located
within city limits, is adjacent to the open space trail
and creek, has several onsite ponds, good street
frontages and access as well as proximity to
municipal utilities.
Negative attributes of the property and market
include the fact that the property is an infill site with
rolling topography surrounded by older homes; a
portion of the property is located within a flood zone;
the market is exhibiting little to no demand for
speculative development land; the property would
require a General Plan amendment allowing
residential development; the conversion of the
property from a golf course to speculative
development land could potentially receive
significant opposition from neighboring owners,
causing an even longer timeline to development.
Current market conditions coupled with a current
oversupply of entitled land contribute to lengthening
the timeline of such development. The estimated
development timeline is long term being at least 5 but
more likely 10 years before realization.
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Modesto, California
VI.
HIGHEST AND BEST USE ANALYSIS
Highest and best use may be defined 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 value5.
There are four criteria used in the highest and best use analysis process. These are:
1.
Legally Permissible Use. What uses are permitted legally under existing zoning,
building codes, historic district controls, environmental regulations, deed (private)
restrictions, and long-term lease provisions on the site in question?
2.
Physically Possible Use. What uses of the site are physically possible, given its
size, shape, area, terrain, soils composition, accessibility, assembly potential, and
risk potential from natural disasters?
3.
Financially Feasible Use. Which possible and permissible uses will produce a
positive net return to the owner of the property?
4.
Maximally Productive Use. Among the feasible uses, which use will produce the
highest residual land value consistent with the rate of return warranted by the
market for that use?
HIGHEST AND BEST USE OF THE SITE, AS VACANT
Legally Permissible Uses. Possible uses are constrained by legal restrictions on a property both
private and public. The subject of this appraisal is zoned R-1, a residential zoning designation.
However, the City of Modesto general plan designation is for open space. Discussions with the
City indicate that a residential use would likely be approved for the subject, with a general plan
update taking 3 to 6 months to complete. If the property was not under City ownership a residential
use would be legally permitted once the general plan was updated.
Physically Possible Uses. The size, topography, and location of the subject are important factors
in determining the use of the property. The size of the site can significantly affect the type of
development that is possible, as the “economies of scale” notion often comes into play. The site
area appraised is considered sufficient to support the legally permitted use for future residential
development. The subject property is irregular in shape and has a generally rolling topography,
excepting the area which slopes down near the creek bed and is located in a flood zone. While
these issues somewhat inhibit development they do not wholly preclude it. They serve instead to
limit the potential number of lots that could be realized on the subject property. A single-family
residential development of the subject would be in conformance with the surrounding proposed
projects. Based upon surrounding developments, the soil appears to adequately support residential
development. Municipal utilities are in reasonably close proximity to the site. Discussions with
the planning department indicated that a residential use is physically possible and would be
allowed after a General Plan amendment from an open space designation to residential.
5
The Appraisal of Real Estate (Twelfth Edition), Appraisal Institute, Chicago, Illinois, 2001, Pg. 275.
BRI 15-193
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Modesto, California
Development of a single family residential use of the site appraised is considered to be physically
possible.
Financially Feasible Uses. A proposed property improvement must be able to deliver an income
return that, in turn, generates a market value sufficient to pay for the developmental costs, the
undertaking of the risks involved, and a profit appropriate for the development.
Discussions with brokers in the market area and representatives of the City of Modesto indicate
that demand for new residential product is relatively low, with only 38 residential building permits
issued last year. Observations of the subject’s market area indicates that the demand for new
construction is relatively low. This coupled with the supply of residential development sites closer
to development than the subject further inhibit development, making it unfeasible at this time.
Considering the current and anticipated demand and the supply of potential lots the timeline for
development of the subject property is at least 5 but more likely 10 years out.
Maximally Productive Use - Conclusion. Considering the preceding factors, the maximally
productive use for the subject property, as vacant, is to hold for future development of a residential
subdivision at such a time as it is warranted by market conditions. It is noted that, based upon the
development momentum associated with nearby parcels the property appraised would be viewed
by a typical buyer as mid to long term development land with a timeline to development at least 5
to 10 years out.
Highest and Best Use of the Site As If Vacant. Considering all the preceding factors, it is my
conclusion that the highest and best use of this site is to hold for residential development until
market conditions dictate development is feasible, estimated to be at least 5 to 10 years out.
HIGHEST AND BEST USE OF THE PROPERTY, AS IMPROVED
As per the appraisal assignment requested by the client, this appraisal is of the underlying land
only therefore no consideration is given to the improvements of the property.
BRI 15-193
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Modesto, California
VII.
VALUATION ANALYSIS
VALUATION METHOD AND CONSIDERATIONS
The appraisal assignment involves the valuation of the subject property land only. The initial stages
of the appraisal process include the investigation, organization, and analysis of relevant market
data and other information that relate to the market value of the subject property. Factors discussed
previously that influence value include the Modesto region demographics and economic
conditions, neighborhood characteristics and features, the market for residential land, and subject
property attributes. All of these need to be considered when rendering the highest and best use
conclusion. After a highest and best use conclusion has been made, the possibilities for the property
have been sufficiently narrowed so that a proper valuation process can be pursued. This section of
the report contains the comparable data, the interpretation, analysis, and processing of these data
and the conclusions reached about the property’s market value.
An appraisal of an improved property typically utilizes up to three valuation approaches:

The Cost Approach to value.

The Sales Comparison Approach to value.

The Income Capitalization Approach to value.
The Cost Approach to value usually involves estimation of the land value through the sales
comparison approach. Then, we estimate the replacement cost of the improvements as if they were
new, less a deduction for depreciation, which is computed after analyzing the deficiencies or
disadvantages of the existing building compared to a new building. This approach can be a reliable
indicator of value when the improvements are new or relatively new and are proper improvements
for the site, and estimated depreciation is not an issue. The subject consists primarily of raw
residential land, therefore the Cost Approach is not applicable to this analysis.
The Sales Comparison Approach to value involves the accumulation of sales data of comparable
properties, the analysis of each sale, and the adjustment to each sale for conditions such as
favorable seller financing, changes in market conditions, and dissimilar physical or other
characteristics. Several relevant land sales were identified and considered. This approach is
applicable to this assignment.
The Income Approach to value is based on the assumption that there is a relationship between
the amount of income a property will produce and its value. Usually, we estimate the annual net
income the property will earn and convert it into value by a capitalization process. This process
is accomplished by dividing the net income, before payment of debt service, by a capitalization
rate determined from the market. This rate will vary as a result of such factors as risk, time, interest
or capital investment, and recapture of the depreciating asset. Although a discounted cash flow
analysis can be relevant to the analysis of subdivisions, in this case, given the current condition of
the site and uncertainty of the development configuration, analysis of the property appraised using
a DCF is not considered to provide a credible opinion of value.
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Modesto, California
For this assignment, the analysis will use a direct comparison of other residential development
land purchases to value the subject land.
SALES COMPARISON APPROACH
The Sales Comparison Approach involves direct comparison of the appraised property with other
properties that have sold or have been offered for sale in the open, competitive market. This
approach is based upon the principle that a prudent investor would pay no more for real property
than the cost of acquiring an equally desirable substitute property of similar utility. While buyers
of income-producing properties typically focus on a property’s economic characteristics, sales of
similar properties are analyzed from a physical viewpoint (i.e., based on price per acre or per lot)
can indicate value patterns and trends in the market.
The Sales Comparison Approach requires several steps. They include:

Researching the market for information on sales transactions, listings, and offers to
purchase or sell involving properties that are similar to the subject property.

Verifying the information by confirming that the data are factually accurate and that the
transactions reflect arm’s-length, market considerations.

Selecting the relevant units of comparison and develop a comparative analysis for each.

Comparing sale properties with the subject property using the elements of comparison and
adjust the price of each relative to the subject property.

Reconciling the various value indications produced from the analysis of comparables into
a single value indication or a range of values.
Analysis of the market revealed limited sales occurring in the Region during the course of the last
several years. Of the sales observed, the most relevant comparables were selected for analysis.
Some of the land sales have agricultural zoning, but are still considered applicable given that they
are located within the path of growth and were purchased for speculative future development. Data
on these land sales have been obtained for this analysis and are summarized in the table on the
following page. The relevant unit of comparison is the price per acre, which is consistent with the
market.
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Modesto, California
COMPARABLE RESIDENTIAL SPECULATIVE DEVELOPMENT
LAND SALES TABLE
Sale #
BRI #
LS-1
976
LS-2
602
LS-3
603
LS-4
934
LS-5
604
Subject
Location
APN
673 Walnut Avenue
Patterson, CA
APN: 047-031-047
3340 E Whitmore
Avenue
Ceres, CA
APN: 069-017-008
Bloss Road
Hilmar-Irwin, CA
APN: 017-110-050
Frazine Road, Gomes
Road, Santa Fe Avenue
Modesto, CA
APNs: 009-001-011,
014-037-010 and -012
4424 Santa Fe Street
Riverbank, CA
APNs: 062-020-010,
019, 025
701 Lincoln Avenue
Modesto, CA
Portions of APNs: 033047-025, 033-027-013,
033-027-003, 068-017001, 067-034-006, 033025-003, 033-028-008,
and entirety of 033-027004
Sale
Date
Doc. No.
Zoning
Total
Sale
Price
Parcel
Size
(Acres)
Est.
Timeline to Price/AC
Development
08/14/15
64669
MDR
$1,231,500
30.78±
acres
Near to Midterm
$ 40,010
08/01/14
49980
A-2-10
$950,000
19.7± acres
Midterm
$ 48,223
04/15/14
11140
R-1
$459,000
13.6± acres
Midterm
$ 33,750
12/12/13
0102061
A-2-40
$2,175,000
89.0± acres
Long term
$ 24,410
12/24/12
116444
R-1
$375,000
23.73±
acres
Long term
$ 15,803
-----
R-1
-----
143± acres
Mid to Long
term
-----
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Modesto, California
COMPARABLE RESIDENTIAL SPECULATIVE DEVELOPMENT
LAND SALES MAP
Land Sale Discussion/Comparison to Subject Property. The subject consists of a 143± acre,
irregular shaped site with gently rolling topography located within the City Limits of Modesto.
The site is surrounded by primarily residential properties and is determined to have a highest and
best use for future residential development.
Comparison to the sales is considered for property rights transferred, market conditions, additional
buyer expenditures, financing, conditions of sale, zoning and the physical characteristics and locale
of each comparable. In addition, it is noted that several of the comparables sold with tentatively
approved subdivision maps in place. The contributory value of these entitlements is considered in
the final valuation analysis. The sales consist of fee simple transfers, no significant adjustments
are merited for this category. The comparables vary with regard to date of sale from the 2012 thru
the 2015 years.
There was no market evidence to suggest that property size was a driving factor for value, but
rather the timeline to development that influenced prices. Given the current market and required
General Plan amendment needed for development the timeline is considered mid to long term
speculative development.
Discussions with market participants and analysis of the data indicate that market conditions for
transitional land in the subject’s market area are very soft with many projects that started the
entitlement process before the recession resuming the process with previous approvals.
Consideration for changes in market conditions since the date of the comparable sales is given in
the final valuation analysis. Further, unless otherwise noted, there were no significant issues
observed with financing or conditions of sale that merit further adjustments or special
consideration.
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40
Modesto, California
Additional adjustment considerations are discussed with the individual sale write-ups on the
following pages.
Comparable No. 1. This is the sale of
30.78 acres of land located north of
Walnut Avenue in Patterson,
California. The property sold in
August of 2015 for $1,231,500 or
$40,010 per acre. This parcel is
located in a newly developing area of
Patterson, in the Villages of Patterson
Master Development Plan Area. The
parcel is zoned and planned for
medium
density
residential
development. The property is mostly
L-shaped with frontage on Walnut
Avenue and Hartley Street. The lot is
adjacent to the recently constructed Stanislaus Office of Education and the Walnut Grove
Elementary School. Municipal utilities are available nearby. The topography is level and none of
the property is located in a flood plain. The site is located in close proximity to existing and planned
residential development and is in the path of growth. According to the city planner, there is one
home builder that is submitting plans for development and plans to start construction this year
within the plan area.
This comparable is considered to be superior with regard to future potential use as residential land
given the shorter timeline (near to midterm) to development and restricted supply of entitled land
in the Patterson area. The property is also superior with regards to flood zone, with none of the
property being within a flood plain. This property has superior level topography. Overall, this sale
is considered superior to the subject property.
19.7 acres of land located south of E.
Whitmore Avenue and East of Moore
Road in Ceres. The property sold in
August of 2014 for $950,000 or
$48,223 per acre. At the time of sale
the property owner was in the process
of getting the property annexed into
the City, the incoming buyer
purchased it mid process. The sale
involved seller financing, however
the terms were reported to be at
market and the listing agent
commented that the seller financing
had no impact on the sales price. The listing agent commented that the developers were planning
on medium density residential with a mixed use commercial element integrated into the design.
BRI 15-193
41
Modesto, California
The sale included a use planning map for this design which contributed value. The site is located
in close proximity to existing and planned residential development and is in the path of growth. It
is noted this property appears in commercial data sources to have sold in October of 2014 to the
City of Ceres. A primary party to this transaction indicated that this was not a transfer of the entire
property, but only a small sliver of the property fronting E. Whitmore Avenue dedicated to the
City for offsite improvements as part of the development process.
This property is considered to have midterm development potential, superior to the subject, and is
superior in shape, access, and topography and flood zone. Ceres is an inferior area relative to the
subject for residential development. East Whitmore Avenue is a primary thoroughfare providing
access for the existing residential neighborhoods to the north and is planned for expansion to four
lanes. The location on a busy thoroughfare is superior. Overall this sale is superior to the subject
property and indicates a value well below $48,223 per acre.
13.6 acres of land located south of
Bloss Road in Hilmar. The property
sold in April of 2014 for $459,000 or
$33,750 per acre. The sale included
an approved tentative map from
before
the
recession
which
contributed some value, though the
incoming buyers were reportedly
planning on changing some of the
design elements. The property did
have a single family residence located
on the eastern border, but was
structure was planned to be
demolished pending subdivision development. The listing agent indicated the buyers were
developers and were seeking to develop in the near term, as such the single family residence had
relatively minor contributing value. The site is located in close proximity to existing and planned
residential development and is in the path of growth. This property subsequently sold in September
2015 through a trustee’s deed upon sale after the property went into default, in the amount of
$534,824. This is not determined to be a market transaction.
This property is significantly farther along in the development process compared to the subject
and has superior topography and flood zone. Hilmar is an inferior area relative to the subject for
residential development. Overall this sale is considered slightly superior to the subject property.
BRI 15-193
42
Modesto, California
an 89 acre MDR zoned property
located in Modesto, The property is
situated over three seperate parcels,
all located at the eastern border of the
city of Modesto. Two of the parcels
have frontage on Frazine Road, the
third parcel is located off of Gomes
Road, and only has access to the street
on one corner of the land. The
property is located in the approved
Johansen Comprehensive Planning
District in the City of Modesto’s
sphere of influence and has a general
plan
designation
for
village
residential. Sewer and water have
been extended to this plan area and
some of the major infrastructure has
been completed. A high school and
elementary school were recently
constructed in anticipation for the
future growth. At the time of sale the
property had two peach orchards and
two single family residences which
were in disrepair. The residences were
to be removed and the owner was
going to continue farming the peaches
as an interim use until development
became more eminent. The property was purchased in December of 2013 for $2,175,500, or
$24,410 per acre.
This comparable is the closest in proximity to the subject, being just east of the subject. Utilities
are similar. This property is not located in a flood zone and also has level topography which are
slightly superior qualities. The timeline for development is long term for this property due to the
annexation required and lack of zoning. The property also has inferior access. Market conditions
at the time of this transaction were also slightly inferior. Overall, this comparable is considered
inferior.
BRI 15-193
43
Modesto, California
23.73 acres of land located south of
Santa Fe Street in Riverbank. The
property sold in December of 2012 for
$375,000 or 15,803 per acre. This sale
was a bank owned sale, however it was
openly marketed for four months
before selling with multiple price
reductions. The sale is of three parcels
one of which is nonconsecutive. The
property is located within city limits
and has traditionally been used for
agricultural uses, but carries an R-1
zoning. The property previously had
an approved map, however it was expired at the time of sale. The site is located in close proximity
to existing large lot residential developments. The parcels are located within the North Bruinville
Master Plan area and at the time of sale the sewer and water lines had not yet been extended to the
area for development.
This sale is generally level and not located in a flood zone, which is slightly superior. The
availability and proximity of utilities are inferior. Market conditions have improved for residential
development since 2012 and overall this comparable is considered an inferior indicator of value
for the subject property.
Land Value Conclusion. The sales comparables present an overall range from $15,803 to $48,223
per acre and based on the discussion just presented, the range is narrowed from $24,410 to $33,750
per acre as follows:
Sale #
LS-2
LS-1
LS-3
LS-4
LS-5
Subject Value
Less Than/
Greater Than
<
<
<
Sale
Price
Sale
Date
Parcel Size
(Acres)
Price/Acre
$950,000
$1,231,500
$459,000
Aug-14
Aug-15
Apr-14
19.7±
30.78±
13.6±
$ 48,223
$ 40,010
$ 33,750
Indicated Value Range for the Subject Property
$24,410 to $33,750 per acre
>
>
$2,175,000
$375,000
Dec-13
Dec-12
89.0±
23.7±
$ 24,410
$ 15,803
BRI 15-193
44
Modesto, California
Sales 1, 2 and 3 set the high end of the range indicating $33,750 to $48,223 per acre and are
superior to the subject property, being farther along in the development timeline. Sales 4 and 5
ranging from $15,803 to $24,410 per acre are inferior and set the lower end of the subject range,
and consist of properties with long term development timelines. Sale 4 is the closest to the subject
in terms of proximity but transacted during slightly inferior market conditions and has inferior
access to a portion of the property and a longer timeline to development given the annexation
requirements. Giving consideration to the subject’s mid to long term timeframe for speculative
development, but also considering the amenities of the creek frontage and the onsite ponds, a value
slightly above the middle of the range is concluded at $30,000 per acre.
143± acres X $30,000/per acre = $4,290,000
Rounded
$4,300,000
This concludes the report.
BRI 15-193
45
Modesto, California
VIII. APPRAISER'S CERTIFICATION
I certify that, to the best of my knowledge and belief:
1.
The statements of fact contained in this report are true and correct.
2.
The analyses, opinions, and conclusions are limited only by the reported
assumptions and limiting conditions and are my personal, impartial and unbiased
and professional analyses, opinions and conclusions.
3.
I have no present or prospective interest in the property that is the subject of this
report, and I have no personal interest with respect to the parties involved.
4.
I have no bias with respect to the property that is the subject of this report or to the
parties involved with this assignment.
5.
My engagement in this assignment was not contingent upon developing or
reporting predetermined results.
6.
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.
7.
The reported analyses, opinions, and conclusions were developed, and this report
has been prepared, in conformity with the Uniform Standards of Professional
Appraisal Practice (USPAP).
8.
has been prepared, in conformity with the requirements of the Code of Professional
Ethics & Standards of Professional Appraisal Practice of the Appraisal Institute,
which include the Uniform Standards of Professional Appraisal Practice.
9.
The use of this report is subject to the requirements of the Appraisal Institute
relating to review by its duly authorized representatives.
10.
As of the date of this report, I have completed the continuing education program of
the Appraisal Institute.
11.
I have made a personal inspection of the property that is the subject of this report.
12.
I have not revealed the findings and results of this appraisal to anyone other than
the proper officials of the client and I will not do so unless and until authorized by
the client, or until I am required to do so by due process of law, or until I am released
from this obligation by having publicly testified as to such findings.
13.
Such appraisal has been made in conformity with the appropriate California laws,
Title VI of the 1964 Civil Rights Act, and regulations, policies, and procedures
applicable to appraisal of right of way.
14.
To the best of my knowledge, no portion of the value of the property appraised
consists of items which are non-compensable under the established laws of
California.
BRI 15-193
46
Modesto, California
15.
My opinion of the total market value of the appraised property identified in this
report was derived without collusion, coercion or direction as to value.
16.
We have not provided any services on this property within the last three years.
__________________________
David B. Wraa, MAI, ARA
BRI 15-193
47
Modesto, California
APPRAISER'S CERTIFICATION
I certify that, to the best of my knowledge and belief:
The statements of fact contained in this report are true and correct.
1.
The analyses, opinions, and conclusions are limited only by the reported
assumptions and limiting conditions and are my personal, impartial and unbiased
and professional analyses, opinions and conclusions.
2.
I have no present or prospective interest in the property that is the subject of this
report, and I have no personal interest with respect to the parties involved.
3.
I have no bias with respect to the property that is the subject of this report or to the
parties involved with this assignment.
4.
My engagement in this assignment was not contingent upon developing or
reporting predetermined results.
5.
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 attaiillnment of a
stipulated result, or the occurrence of a subsequent event directly related to the
intended use of this appraisal.
6.
has been prepared, in conformity with the Uniform Standards of Professional
Appraisal Practice (USPAP).
7.
has been prepared, in conformity with the requirements of the Code of Professional
Ethics & Standards of Professional Appraisal Practice of the Appraisal Institute,
which include the Uniform Standards of Professional Appraisal Practice.
8.
The use of this report is subject to the requirements of the Appraisal Institute
relating to review by its duly authorized representatives.
9.
As of the date of this report, I have completed the continuing education program of
the Appraisal Institute.
10.
I have made a personal inspection of the property that is the subject of this report.
11.
I have not revealed the findings and results of this appraisal to anyone other than
the proper officials of the client and I will not do so unless and until authorized by
the client, or until I am required to do so by due process of law, or until I am released
from this obligation by having publicly testified as to such findings.
12.
Such appraisal has been made in conformity with the appropriate California laws,
Title VI of the 1964 Civil Rights Act, and regulations, policies, and procedures
applicable to appraisal of right of way.
13.
To the best of my knowledge, no portion of the value of the property appraised
consists of items which are non-compensable under the established laws of
California.
BRI 15-193
48
Modesto, California
14.
My opinion of the total market value of the appraised property identified in this
report was derived without collusion, coercion or direction as to value.
15.
We have not provided any services on this property within the last three years.
__________________________
Amy J. Woodward
BRI 15-193
49
Modesto, California
ADDENDA
BRI 15-193
______________________________ BENDER ROSENTHAL, INC. ____________________________
Modesto, California
ITEM 1
PROFESSIONAL QUALIFICATIONS
BRI 15-193
______________________________ BENDER ROSENTHAL, INC. ____________________________
Modesto, California
PROFESSIONAL QUALIFICATIONS OF
DAVID B. WRAA, MAI, ARA
(Principal in the firm of Bender Rosenthal, Inc.)
PROFESSIONAL EXPERIENCE
David B. Wraa, MAI, ARA has been involved in real estate appraising and consulting since 1989. His
professional experience in real estate appraisal encompasses a broad range of property types that include
industrial, office, retail, multi-family, mobile home parks, self-storage facilities, elderly housing, condemnation,
right-of-way, residential subdivisions, theaters, schools, marinas, and various agricultural/rural residential
property types. He is a member of the Appraisal Institute with the MAI designation, a member of the American
Society of Farm Managers and Rural Appraiser, Inc. with the designation of ARA, a Certified General Real
Estate Appraiser in the State of California, and a member of the Sacramento Estate Planning Council.
Mr. Wraa is the President of the Sacramento-Sierra Chapter of the Appraisal Institute, current Regional
Representative, as well as the past Vice President, Education Chair and Secretary Treasurer for the chapter.
Prior to his career in real estate, Mr. Wraa attended UC Davis, majoring in Agricultural Science and Management
(Bachelor of Science degree). Upon graduation, he immediately entered the appraisal field with a specialty in
wineries and vineyards (1989-1995). Mr. Wraa also has a diverse commercial background appraising various
property types throughout the Bay Area and Sacramento regions since 1995.
REPRESENTATIVE VALUATIONS INCLUDE
Industrial - Existing and proposed industrial properties including distribution warehouses, storage warehouses,
light industrial/manufacturing and research and development properties.
Office - Existing and proposed office developments for lending institutions and owners.
Retail - Proposed and existing shopping centers, free standing buildings, mixed-use buildings, and restaurants.
Multi-Family Residential - Existing and proposed apartment complexes, condominiums, and loft projects in the
Sacramento Metropolitan Area and Bay Area.
Medical - Existing and proposed medical clinics and dental offices.
Elderly Housing - Existing and proposed congregate care and residential care facilities throughout the Bay Area
and Central Valley.
Residential Developments - Proposed and existing residential subdivisions throughout the Bay Area and Central
Valley.
Agricultural - Vineyards, wineries, orchards, field/row crop land, and rural residential properties.
Special Use Properties - Special use properties include theaters throughout Northern California, schools in the
Bay Area and Sacramento regions, marinas in the Sacramento MSA and Delta region.
Land - Various types of land appraised such as commercial land, retail pad sites, residential land, transitional
land, and agricultural/rural residential land.
Eminent Domain - Improved and unimproved properties involving full and partial takings for municipalities,
quasi-public companies, developers, and property owners.
Litigation - Valuations performed on various property types for eminent domain, arbitration, and divorce cases.
PROFESSIONAL AFFILIATIONS
Appraisal Institute (MAI, #11903), Current Member, Past President of Sacramento-Sierra Chapter
Sacramento Estate Planning Council, Current Member
American Society of Farm Managers and Rural Appraisers (ASFMRA), Current Member
BRI 15-193
_____________________________ BENDER ROSENTHAL, INC. _____________________________
Modesto, California
PROFESSIONAL QUALIFICATIONS OF
AMY J. WOODWARD
Certified General Real Estate Appraiser CL# AG044210
PROFESSIONAL EXPERIENCE
Amy J. Woodward has been involved in real estate appraising and consulting since 2004. Her
professional experience in real estate appraisal encompasses a broad range of property types.
REPRESENTATIVE VALUATIONS INCLUDE
Industrial – Existing and proposed industrial properties including distribution warehouses, storage
warehouses, light industrial/manufacturing and research and development properties.
Office - Existing and proposed office developments for lending institutions and owners.
Medical - Existing and proposed medical, dental, and veterinary clinics.
Retail - Proposed and existing shopping centers, free standing buildings, mixed-use buildings, and
restaurants.
Residential Developments - Proposed and existing residential subdivisions.
Multi-Family Residential - Existing and proposed apartment complexes, condominiums, and
mobile home parks.
Agricultural – Vineyards, orchards, field/row crop land, and rural residential properties.
Land - Various types of land appraised such as commercial land, retail pad sites, residential land,
transitional land, and agricultural/rural residential land.
Special Use- Alternative energy/Solar land leases, schools, churches, railroad corridors
Mobile Homes - Existing mobile home parks.
Eminent Domain - Improved and unimproved properties of partial takings representing
municipalities, conservancies, and property owners.
REAL ESTATE APPRAISAL EXPERIENCE
Bender Rosenthal, Inc., Sacramento, CA
Certified General Real Estate Appraiser
11/2004-Present
EDUCATION
Appraisal Institute Courses
Condemnation Appraising; Basic Income Capitalization; General Report Writing & Case Studies;
General Applications, Business Practice and Ethics; Analyzing Operating Expenses; Feasibility,
Market Value, Investment Timing: Option Value; Advanced Highest & Best Use; USPAP
International Right of Way Course
Valuation of Partial Acquisitions
BRI 15-193
_____________________________ BENDER ROSENTHAL, INC. _____________________________

APPRAISAL REPORT OF: CREEKSIDE GOLF COURSE LAND 701

Transcription

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