Appraisal of 96 Lots The Landing at Crooked River Kingsland

Appraisal of
96 Lots
The Landing at Crooked River
Kingsland, Camden County, Georgia
July 10, 2007
Sigman Appraisal Company 116 Follins Lane
St. Simons Island, Ga 31522
July 10, 2007
Gary Samuel
497 Barber Road
Woodbine, Georgia 31569
RE: Appraisal of 96 Lots, The Landing at Crooked River, Kingsland,
Camden County, Georgia.
Dear Mr. Samuel:
In accordance with your request, I have inspected the above referenced property
for the purpose of estimating the market value of the fee simple ownership.
Based on all of the facts and data found in this report, and at my disposal, it is my
opinion that the estimated market values for the fee simple interest are as follows:
Present Market Value Estimate as of 7/10/2007
(96 lots)
$6,296,000
Total Gross Retail Sellout Value Estimate as of 7/10/2007
(96 lots)
$9,457,000
Present Value Estimate of Projected Net Cash Flow
From House Sales (96 Homes)
$2,227,000
This appraisal was made considering the property to be free and clear of all liens
and encumbrances. No consideration was given to the title or legal matters.
The above value estimate is subject to the assumptions and limiting conditions
contained in the attached report and to completion of the amenities as proposed.
I certify to the best of my knowledge and belief that the data used in this appraisal
is true and correct and that I have no undisclosed interest, present or future, in the
subject property.
It has been a pleasure to be of service to you in this matter. If you have any
questions concerning my appraisal, please do not hesitate to contact me.
Sincerely,
H. Hal Sigman, Georgia Certified Real Estate Appraiser 3232
TABLE OF CONTENTS
PURPOSE AND DATE OF APPRAISAL................................................................................................................. 1
Client, Intended User & Intended Use......................................................................................................................... 1
APPRAISAL TYPE........................................................................................................................................................ 1
PROPERTY RIGHTS APPRAISED ........................................................................................................................... 1
DEFINITION OF MARKET VALUE......................................................................................................................... 2
DEFINITION OF GROSS RETAIL SELLOUT ....................................................................................................... 2
APPRAISAL PROCESS................................................................................................................................................ 3
AREA DATA ................................................................................................................................................................... 4
NEIGHBORHOOD DATA ......................................................................................................................................... 17
LEGAL DESCRIPTION.............................................................................................................................................. 19
PROPERTY HISTORY................................................................................................................................................ 19
SITE DESCRIPTION ................................................................................................................................................... 19
ZONING.......................................................................................................................................................................... 21
HIGHEST AND BEST USE....................................................................................................................................... 21
SINGLE-FAMILY SUBDIVISION LOTS............................................................................................................... 23
DESCRIPTION OF IMPROVEM ENTS................................................................................................................... 23
SUBDIVISION VALUATION - SALES COMPARISON APPROACH........................................................... 23
INDIVIDUAL SUBDIVISION LOT SALES ANALYSIS................................................................................... 24
SUBDIVISION VALUATION - DISCOUNTED CASH FLOW ........................................................................ 33
Verticle Development ................................................................................................................................................... 37
RECONCILIATION..................................................................................................................................................... 40
Addenda
Subject Photos
Subdivision Plat
Location Map
Regional Maps
Environmental Disclaimer
Certifications and Appraiser Qualifications
PURPOSE AND DATE OF APPRAISAL
The purpose of this appraisal is to estimate the market value of the fee
simple interest of the property legally described in this report as follows:
The first purpose of this appraisal is to estimate the present market value
of the completed ninety-six lots. This involves a discounted cash flow analysis of
the value of the ninety-six lots to a single purchaser.
The second purpose of this appraisal is to estimate the present value of the
cash flow generated from the net profits on house sales. This invo lves a
discounted cash flow analysis of the profit opportunity from house construction
and sales. The date of the appraisal is July 10, 2007.
Client, Intended User & Intended Use
The client and intended user is Gary Samuel. The intended use
is for marketing purposes. The appraisal is not intended for any other use
or user.
APPRAISAL TYPE
This appraisal report is intended to be a full narrative self- contained
appraisal document.
PROPERTY RIGHTS APPRAISED
The property rights appraised are the fee simple estate. Fee simple estate
is defined on Page 137 of The Appraisal of Real Estate, Eleventh Edition
published by the Appraisal Institute as "absolute ownership unencumbered by any
other interest or estate, subject only to limitations imposed by the governmental
powers of taxation, eminent domain, police power, and escheat."
1
DEFINITION OF MARKET VALUE
The most probable price which a property should bring in a competitive
and open market under all conditions requisite to a fair sale, the buyer and seller,
each acting prudently, knowledgeably and assuming the price is not affected by
undue stimulus.
Implicit in this definition is 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 each acting in
what he considers his own best interest.
3.
A reasonable time is allowed for exposure in the open market.
4.
Payment is made in terms of cash in U.S. dollars, or in terms of
financing arrangements comparable thereto.
5.
The price represents the normal consideration for the property sold
unaffected by special or creative financing or sales concessions
granted by anyone associated with the sale.
DEFINITION OF GROSS RETAIL SELLOUT
The second edition of “The Dictionary of Real Estate Appraisal”
published by the American Institute of Real Estate Appraisers in 1993 defined
Gross Retail Value as follows:
“The aggregate sum of the probable sale prices of all of the individual parts, with
no allowance for carrying costs such as taxes, insurance, interest charges, or other
costs of production, marketing costs, sales commissions, financing, or profit. The
gross retail value is not discounted to reflect the time value of money.
2
APPRAISAL PROCESS
The three commonly used approaches to value are:
1. The Cost Approach which considers the cost of reproducing a property less
depreciation.
2. The Market Data Approach which considers the value indicated by recent sales
of comparable properties.
3. The Income Approach which is based on a value supported by the net earning
power of a property as determined by the capitalization of the net operating
income.
In the Cost Approach, a preliminary indication of value is obtained by
adding to the estimate of the land's value, the estimated depreciated reproduction
cost of the building and other improvements. This approach is based on the
assumption that the reproduction cost is the upper limit of value.
In the Market Data Approach an estimate of value of a property is
determined by comparing it with similar properties of the same type and class
which have recently sold or are currently offered for sale. The sales prices of
those properties considered most comparable tend to set the range in which the
value of the subject property will fall.
In the Income Approach the present value of the future potential benefits
of a property is determined as measured by the net income which a fully informed
person is warranted in assuming the property will produce during its remaining
useful life. This net income is capitalized into a value estimate after comparison
with investments of similar type and style.
3
AREA DATA
Location
Camden County is located in the most southeasternly part of the State of Georgia.
Its northern boundary is formed by the Satilla River (and Glynn County), Brantley and
Charlton Counties on the west, St. Mary’s River on the south which is also the state
border between Georgia and Florida, and the Atlantic Ocean on the east. As a favorable
consequence of its geology, the County has the Kings Bay Submarine Base which has
been of immence economic benefits to the citizens of Camden County.
By roadway, Kingsland is located 53 miles from Jacksonville, 104 miles from
Savannah, and 26 miles from Brunswick.
Camden County lies between the small regional center of Brunswick and the
major metropolitan area of Jacksonville. Yet more people come to work in Camden
County from surrounding counties than workers from Camden County commute to other
counties. The following table shows the commuting patterns of residents of Camden
County and workers from other counties coming to Camden County to work in 2000.
Employed Residents of Camden County
County Where Employed
Camden
Florida
Glynn
Other
Number
14,264
659
502
284
15,709
Percent of Total
90.8
4.2
3.2
4.5
100.0
Number
14,264
1,907
551
333
155
81
268
504
18,063
Percent of Total
79.0
10.6
3.1
1.8
.9
.5
1.5
2.8
100.0
Persons Working in Camden County
County of Residence
Camden
Florida
Charlton
Glynn
Brantley
Pierce
South Carolina
Other
4
Climate and Annual Precipitation
Camden County lies near the middle of the humid subtropical climatic zone. The
zone has its average temperature of the coldest month above 32 degrees F. and below
64.4 degrees F. The warmest month has its temperature above 71.6 degrees F. The area is
constantly moist with rainfall all year.
In the twenty- year period between 1981 and 2001, average annual temperatures
ranged from 66.5 degrees F. to 71.2 degrees F. - a narrow range of temperatures. Average
annual precipitation ranged from 24.64 to 67.21 inches in the same time period. While
these are extremes, most of the time the precipitation was in the 40-49 inch range.
Summers are warm, humid, and long. The highest afternoon temperatures are in
the high 80's and 90's most of the time from May through September. Unusually high
temperatures are rare because of the moderating effect of the Atlantic Ocean.
Winters are usually mild and short. Cold spells usually last only a few days
interspersed with periods of mild temperatures. The ocean exerts an even greater
influence on temperatures in winter than in summer.
Of the normal amount of rain falling each year, about half falls in the
thunderstorm season of June 15 through September 15. The remainder, produced
principally by squall line and frontal showers, is spread over the other nine months.
Sunshine is adequate at all seasons and seldom are there two or more days in
succession without it. Sea and land breeze effect is usually not felt inland, though it is a
daily feature on the coastal islands.
Air pollution in the Camden County area does not seem to be a problem according
to records of the Georgia Department of Natural Resources based on the suspended
particulant reading.
5
Topography
Camden County lies within the Lower Coastal Plain Physiographic Province and
the topography typical of this province is of very gently rolling uplands interspersed with
low lying swampy area. Elevations range from sea level along the coast to forty five feet
in the western part of Camden County.
Soil
According to the Coil Conservation Service, a unit of the United States
Department of Agriculture, there are eight general soil associations in Camden County.
Two of them consist of poorly drained soils on flood plains adjacent to major streams.
These soils are located mainly along the Little Satilla, Satilla, and St. Mary’s Rivers. The
major use for these groups is habitats for wildlife. They comprise about seven percent of
Camden County.
The next two soil associations are nearly level or gently slopy soils on ridges and
flats and in depressions and drainageways. They are located in the east central and
extremely west parts of Camden County and on the coastal islands. Their main uses are
woodland, recreation, and urban. These soils make up to twenty seven percent of the
County.
Two soil associations are nearly level soils on flats, flood plains, and terraces and
in depressions and drainageways. They are located in the central and west central part of
the County. These soils are used mainly for woodland. They comprise about forth-three
percent of the County.
The seventh general soil association is level to rolling soils on dunes and flats and
in depressions and nearly level beaches. This soil association is on Cumberland Island.
This soil association is mainly in live oak, brush, and grasses. It covers about one percent
of the County.
The eighth general soil association is level soils and tidal marshes. It is located
mainly along Cumberland Sound, Satilla River, and the ir tributaries. The main use is
wetlands for wildlife. It covers about twenty percent of the County.
A summary of these soil groups is shown in the following table.
6
Soil Associations and Their Use
Name of Soil Association
Group 1
Satilla
Kingsland
Percent of County
Main Use
5
4
Habitat for wildlife
Habitat for wildlife
Group 2
Mandarin-Rutledge
Pottsburg-Cainhoy
24
3
Woodland
Recreation and Urban
Group 3
Bladen-Brookman-Megget
Pelham-Sapelo
22
22
Woodland
Woodland
Group 4
Fripp-Duckston-Beaches
1
Cumberland Island – live oak
Brush, grasses
Group 5
Bohicket-Capers
20
Wetland Wildlife
Source: Soil Survey of Camden and Glynn Counties
Of the 415,654 acres of land in Camden County, it is estimated that about 12,000
acres or three percent are developed. About 8,000 acres are developed for residential
usage.
Since Camden County is part of Coastal Georgia, questions often arise about
coastal marshlands and flood plain. Coastal marshlands are managed by the Georgia
Department of Natural Resources and flood plains by Corps of Engineers. The latter are
part of navigable bodies of water under federal laws and regulations. "Coastal
marshlands" or "marshlands" mean any marshland inter tidal area, mud flat, tidal waters
bottom, or salt marsh in the state of Georgia within the estuarine area of the state whether
or not the tidewaters reach the littoral areas through the natural or artificial water
courses..." Georgia Code 12-5-282(3).
If someone wants to alter the natural topography or vegetation at a proposed
project site, then, "No person shall remove, fill, dredge, drain, or otherwise alter any
marshlands or construct or locate any structure on or over marshlands in this state within
the estuarine area thereof without first obtaining a permit from the committee or, in the
case of minor alteration of marshlands, the commissioner.
7
A permit may authorize the construction or maintenance of the project proposed
in an application. After construction pursuant to a permit, a project may be maintained
without a permit so long as it does not further alter-the natural topography.or vegetation
at the project site." Georgia Code 12-5-286 (a).
Flood plain management is one of the responsibilities of the Corps of Engineers.
There are two kinds of flood plain maps, 100 and 500 year. The 100-year flood plain
maps are based on the highest amount of rainfall in selected years and are based on
mathematical equations. The flood plains are designated on the maps.
When there is a one percent change occurrence for the 100-year map, then
changes are made on the maps. The 500-year map has revisions when there is a .2 percent
change occurrence. Both maps are used for flood insurance designated areas.
Water Supply
Almost all of the water supplies come from wells. The major source of the
municipalities’ deep wells is the Upper Floridan Aquifer. A number of manufacturing
plants using large quantities of water have their own deep water supplies. The biggest
users are Rhone Poulenc Agricultural Corporation. They are regulated for the amount of
water they can withdraw by the Georgia Department of Natural Resources.
In Camden County, there are four major water systems. They are the Cities of
Kingsland, St. Marys, Woodbine, and Kings Bay Submarine Base.
Kingsland’s water supply system serves the City of Kingsland and also areas
outside the City. It has three wells and a pumping capacity of 8.6 million gallons per day
(MGD). The system actually pumps 1.8 million gallons per day (MGD). They have a
permit from the Georgia Department of Natural Resources to pump 2.5 million gallons
per day (MGD). It has 5,000 customers.
St. Marys’ water system has four wells, but only three are used. The three have a
pumping capacity of 4.5 million gallons per day (MGD). They are permitted by the
Georgia Department of Natural Resources to pump 2.1 million gallons per day (MGD)
8
and they are pumping at their authorized withdrawal rate. The system has between 4,400
– 4,500 customers.
Woodbine’s water system has two wells with a pumping capacity of 500,000
gallons per day. It has a permit from the Georgia Department of Natural Resources to
pump 100,000 gallons per day and it is pumping at its authorized withdrawal rate. The
system has 504 customers.
Kings Bay Navel Base has five wells. The base is permitted by the Georgia
Department of Natural Resources to pump 2.5 million gallons per day (MGD). It is
currently pumping 1.5 million gallons per day (MGD).
The unincorporated part of Camden County has no county water authority. New
single houses can sink their own well without authorization. New subdivisions must
follow the regulations from the Georgia Department of Human Resources on water
supply systems.
Economic/Financial Factors
Population
In the 2000 Census, Camden County ranked forty- fifth in the State. In the period
1990-2000, Camden County had a net natural increase of 5,845 persons (7,441 births
minus 1,566 deaths). By adding the 5,845 persons to the 1990 population would have
given an estimated population of 36,012. Since the estimated population in 2000 is
43,644, there was an estimated immigration of 7,652. The population of the counties
adjacent to Camden as well as Camden County itself are shown in the following table.
Estimated Popula tion 1990 – 2000
1990 population plus
4/1/90 – 3/31/00 births
4/1/90 – 3/31/00 deaths
4/1/00 population
Actual 4/1/00 population
Net immigration
Percent immigration
Population change4/90 – 4/00
% population change 4/90-4/00
Camden
30,167
7,411
1,566
36,012
47,833
11,714
32,43
17,666
44.74
Brantley
11,077
1,396
995
11,478
14,629
3,151
27.45
3,552
32.07
Glynn
62,496
9,242
6,357
65,381
67,568
2,187
3.34
5,072
8.11
9
Camden County has three incorporated municipalities, Kingsland, St. Marys, and
Woodbine. It also has one area recognized by the Bureau of the Census as a Census
Designated Place. It is Kings Bay. A census designated place is a densely settled
concentration of population that is identifiable by name, but is not a legally incorporated
place. Its boundary which usually coincides with visible features or an adjacent
incorporated place have no legal status, but is designated as a statistical counterpart of
incorporated places. The populatio n for the four places is shown in the following table.
Population in Places in Camden County
Kingsland
1970 1980 1990 2001 2004
1,831 2,008 4,669 10,719 11,588
St.Marys
3,408 3,596 8,187 15,081 16,187
Woodbine
1,002
Kings Bay
-
910 1,212 1,202 1,283
-
3,463
Percent Change
1970 – 80
1980 – 90
1990-2004
Kingsland
9.67
34.01
148.2
St. Marys
5.52
127.67
97.7
Woodbine
-9.18
33.19
5.9
Kings Bay
-
100.00+
Source: Bureau of the Census
In 1998, the military population was 5,598 or twelve percent of the estimated
population. Military personnel and their dependents were 13,211 persons. This is about
twenty-eight percent of the population.
Household Composition
During the 1980’s, the number of households increased while at the same time the
average population per household decreased. Divorce, delayed marriages, and fewer
10
children per household are the major causes. If a divorce occurs, two households are
created, thus contributing to the increase in the number of households. A delayed
marriage could mean less children since the female is older and less births can occur.
These reasons help contribute to a smaller population per household. The following table
shows the average population per household for Camden County for selected years.
Employment
Employment in Camden County is somewhat diversified. The number of
employees and the percent distribution in each economic division is shown for Camden
County and the State of Georgia in the following table.
Camden County
Division
Agriculture, Forestry, &
Fisheries
State of Georgia
Number
Percent
38
.25
40,579
1.14
468
3.57
168,402
4.73
2,094
15.95
587,504
16.49
178
1.36
233,713
6.28
122
.92
243,092
6.82
2,799
21.32
668,240
18.76
293
2.23
184,772
5.18
Services & Mining
2,417
18.41
873,087
24.50
Government
4,717
35.93
568,269
15.95
Construction
Manufacturing
Transportation & Public
Utilities
Wholesale Trade
6.82
Retail Trade
Finance, Insurance, Real
Estate
Other
1
13,127
Source: Georgia Department of Labor
.00
100.00
Number
51,448
3,563,237
Percent
0.15
100.00
In the Government Division, Camden County’s percent distribution is more than
double that of the State of Georgia. The reason is the employment at Kings Bay.
11
Civilian employment at military bases are part of the Government Division. The number
of military personnel are not included in the above table’s total. For a truer employment,
the number of military personnel, 5,598, should be added to the 13,127 civilian jobs to
give a total of 18,725 jobs in Camden County. Of the 4,717 jobs in the Government’s
division, 2,549 civilian jobs are at Kings Bay.
In 1976, the former U.S. Army Ocean Terminal near St. Marys was to become the
future site of the East Coast Refit Facility to cater to fleet ballistic submarines. In 1980,
Kings Bay was selected to become the only East Coast Base for Ohio-class Trident
submarines.
Kings Bay consists of seven major commands. The Commander of Submarine
Group 10 is the senior commander at Kings Bay. He is responsible for all activities at the
base.
The Commander of Submarine Base - Kings Bay is responsible for the day-to-day
operation of the base itself. The mission of the base is to provide support to the
submarine launched ballistic missile system and the operation of the facilities which
provide that support.
Submarine Squadron 20 provides operations support for all East Coast based
Trident submarines. The Trident Refit Facility is a major repair and refit facility
designed to support Trident submarines. Trident Training Facility is a technical education
center which teaches Trident sailors every skill for the safe, reliable operation of the
Trident submarine. Strategic Weapons Facility provides strategic missiles and strategic
weapons support to the fleet.
Submarine Squadron 16 is newly recommissioned. The personnel in this
organization are responsible for the training of all Kings Bay submarines and their crews.
Currently there are ten Trident submarines at the base. This is the base’s full complement
of Trident submarines.
Besides the seven major commands, there are a number of smaller ones providing
support at the base. They include: military security, operational support, personnel,
medial and dental support as well as other services necessary to operate and maintain the
base.
12
Major businesses within an area are important as they comprise the economic
base of the area. They employ large numbers of local residents and they pay large
amounts of property taxes to the local economy. Since these large businesses are the
major customers of goods and services in the local economy, they have a major influence
on the local economic multiplier. The following is a listing of the ten largest employers
in Camden County and their estimated number of employees.
Company Name
Estimated Number of Employees
Kings Bay - military
4,922
Civilian
2,549
Contract employees
1,465
Camden County Board of Education
1,700
Camden County Government
315
Camden Medical Center
250
Walmart
425
Publix
85
Bayer Crop Science
130
Winn Dixie
85
Express Scripts
480
Although a diversified economy of a community would allow it to withstand economic
disruptions better than those areas which are dependent on only one or two major
employers, Camden County does not have a well diversified economy since over half of
jobs (including military personnel) are with Kings Bay. However, since the long-range
outlook for Kings Bay is that it is a permanent installation, an economy with only one
major employer like the Federal Go vernment in this instance is the exception.
Unemployment
Camden County’s unemployment rates have been lower than either the United
States or Georgia’s rates. Because of the permanent base at Kings Bay, any downtown in
the national economy will not have that much effect on the local economy.
Financial Institution
In Camden County there is not a close relationship between population and bank
deposits. Since a large segment of Camden County’s population is military personnel
stationed at Kings Bay, their pay comes directly from the Department of Defense by
electronic funds transfer. Military payroll is credited to wherever the military individual
13
wants it. Although a military person may be stationed at Kings Bay, he could, for
example, have his pay credited to a bank in Colorado or North Carolina. The county in
either Colorado or North Carolina in which that bank is located will have the bank
deposit credited to that county and not in Camden County.
Political/Governmental Factors
Legislative
One of the major legislative actions affecting not only the Camden County area,
but the entire nation was the deregulation of the savings and loan institutions in the early
1980’s. Congress passed legislation that allowed savings and loans to issue high interest
bearing certificates of deposit as well as the power to make higher risk commercial real
estate loans that commanded higher interest rates than the fixed thirty year home
mortgage.
While this deregulation was underway, the Federal Home Loan Bank Board was
easing the entry requirements for savings and loans charters and new ownership. Large
developers and other real estate entities began buying savings and loans for the purpose
of funding their own projects. Therefore, underwriting procedures were less than
desirable coupled with an increasing supply of institutional lenders. Competition for
loans grew intense. Consequently, large real estate loans were made on a speculative
basis with the idea that the real estate loaned on could be resold at a higher price in the
near future.
These lending practices continued through the early 1980’s until the economy
began to soften which decreased the value of these real estate projects and in turn made
these same institutions insolvent. It cost the country many billions of dollars to repay the
depositors of these institutions.
Taxes
Georgia has personal and corporate income taxes along with property and sales
taxes. Personal, corporate and sales tax rates are set by the State. Property taxes are the
major source of revenue for local governments. The tax rates are set by county, city, and
school districts.
14
Local Government
The City of Kingsland has a Mayor-Council form of government. The mayor and
the four councilmen run-at- large. The terms are staggered so that two councilmen run at
one election and the mayor and two councilmen run two years later. There is no city
manager/administrator for the city. The mayor is the chief executive officer.
The city of St. Marys has the Mayor-City Manager form of government. The
mayor and four councilmen run-at-large. The city has an administrator who runs the
daily activities of Woodbine. Along with water, sanitation and sewer services, the city
governments provide police and fire protection, and street maintenance.
Camden County has the Mayor-City Manager form of government. The five
commissioners run-at- large. The chairman of the commission is elected by the other
members of the commission. The county administrator runs the daily activities of the
unincorporated portion of the county and those functions for which the county
commission are responsible such as emergency management.
Local government provides for the health and safety for all its citizens. Air
pollution, odor, and solid waste controls are established and monitored by the State of
Georgia.
Education
The Camden County School District consists of the whole county. Total
enrollment is approximately 9,600 students. The Board of Education operates one high
school, two middle schools, nine elementary schools, and an alternative school.
While there are no colleges in Camden County, several collages do offer courses.
Coastal Georgia Community College opened its Camden Center in Kingsland in 1993,
Valdosta State, Brenau College, Troy State offer courses at Kings Bay.
Several colleges and universities in Jacksonville are within driving distance of
Camden County. They are Jacksonville University, University of North Florida, and
Florida Community College.
Health Care
Camden Medical Center is a part of the Southeast Georgia Health System. It
offers inpatient, outpatient, and 24 hour emergency services to the area residents and
military personnel.
15
Sociological Factors
Sociological factors are considered the people-oriented amenities of the area.
There are numerous cultural and recreational facilities in Kingsland, St. Marys,
Woodbine, and Camden County which provide a wide variety of activities for the area
population.
Since St. Marys is one of Georgia’s oldest cities, the City has a National Historic
District. Walking tours promote the older homes and churches. It is also the home of the
Tonnerville Trolley. Charter boats are available for river and sound cruises. St. Marys is
the gateway to Cumberland Island National Seashore where a ferry boat brings
passengers to it. Only 300 persons each day are allowed on the island. Woodbine is
located on the Satilla River. The river provides excellent fishing and canoeing on it.
Many public and private golf courses, public parks, bike trails, tennis courts, and
softball courts are available for visitors and area residents. Many activities in St. Marys,
Woodbine, Kingsland, and Camden County for all ages provide residents and visitors
with a large variety of athletic and cultural events.
Locational Factors
As mentioned previously, Camden County is located in the southeasternly part of
the State of Georgia with its eastern boundary the Atlantic Ocean. Because of this, Kings
Bay Submarine Base is located in the County. Also, there are fishing and charter boats
operating from St. Marys.
Transportation
Camden County is easily accessible, as Interstate 95, Highway 17, and Highway
40 all run through its borders. Jacksonville International Airport is the nearest
commercial air transport facility, located 45 minutes south off of I-95. Interstate 95 is
being widened to six lanes from Glynn County to the Florida border. St. Marys owns and
operates St. Marys Municipal Airport.
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NEIGHBORHOOD DATA
Property Location
The subject property is located in Kingsland, north of Harriets Bluff Road
and west of Interstate 95.
General Description and Boundaries
The subject is located east of Highway 17 and west of Interstate 95 in
southern Camden County which is bounded on the east by marsh, on the south by
St. Marys River, on the west by Highway 17, and on the north by Satilla River.
Access
Accessibility to the subject is considered good. The subject is accessed
Old Still Road. Old Still Road runs parallel to Interstate 95 and is a two- lane
paved road connecting Harriets Bluff Road to the north to Colrain Road to the
south.
Development and use patterns
The subject neighborhood is primarily residential in use. There is a
Camden County recycling center across Old Still Road, an RV park on the north
side of the subject, County property on the south side, and Crooked River on the
east side. There is an industrial park within ½ mile west of subject. Several new
single family residential subdivisions are located west of the subject including
Fiddlers Cove and Winding River. An elementary school is located 1 mile north
off of Harrietts Bluff Road.
Amenities
The subject is convenient to shopping, schools, and employment in St.
Marys and Kingsland, and to the Kings Bay Naval Base.
17
Conclusion
The subject property is located in southern Camden County in a primarily
residential area. Access is good to schools, employment, and shopping. The
demand for single family homes is good and is expected to increase as new
subdivisions and housing are planned for this area. The long-term growth
prospects are good.
18
LEGAL DESCRIPTION
The subject property is described as lots 1 thru 80, lots 82 thru 94, and
parcels 1, 2, & 3, Landing at Crooked River Subdivision. They are located on the
east side of Old Still Road, west of Interstate 95, Kingsland, Camden County,
Georgia. For further identification of the subject property refer to the subdivision
plat included in the addendum.
PROPERTY HISTORY
Recent History
There was a prior sale of the undeveloped land consisting of 35.8 acres in
in July, 2005 for $710,000. There have been no other sales of the subject property
in the past five years.
Current offerings, contracts or options
There are 96 vacant lots. No individual lots are offered for sale at the
present time.
SITE DESCRIPTION
Location
The subject subdivision property consists of 96 subdivision lots on a 35.8
acre tract located on the east side of Old Still Road. It is located in the northern
end of Kingsland, Georgia.
Size, Shape, and Frontage
The subject property is irregular in shape with frontage on Old Still Road
and the Crooked River. It consists of approximately 35.8 acres which has been
developed with a total of 96 lots.
19
Topography, Flood Zone, and Soil Conditions
The subject site is level. According to Flood Map 130262 358C dated
September, 1988, a portion of the subject property is in a flood zone AE13. There
are no drainage or apparent adverse soil conditions, and it is assumed soil
conditions are adequate for development with the highest and best use. It is
assumed that there are no wetlands which would adversely affect the development
as proposed.
Ingress and Egress
Ingress and egress to the subject is good from Old Still Road.
Easements and Encroachments
There are no adverse easements or encroachments noted which would
affect the value of the subject.
Environmental Hazards
It is assumed that the subject property is not negatively affected by the
existence of hazardous substances or detrimental environmental conditions. The
appraiser is not an expert in the identification of hazardous substances or
detrimental conditions. The physical inspection of the property did not reveal any
apparent evidence of detrimental environmental conditions, which would affect
the property negatively. It is possible that tests and inspections made by a
qualified hazardous substance and environmental expert would reveal the
existence of hazardous materials and environmental conditions on or around the
property that would affect its value.
Utilities and Services
All normal public utilities are available to the property including City of
Kingsland water and sewer.
20
Conclusion
Considering the sites physical configuration, usable topography,
availability of utilities, good accessibility and exposure, it is considered to have
good overall physical utility for residential development.
ZONING
According to City of Kingsland zoning plats, the subject property is zoned
Planned Development- Single-Family Residential. This zoning provides for
single- family development. All rights-of-way will be dedicated to the City of
Kingsland.
HIGHEST AND BEST USE
Highest and Best Use as defined in "The Dictionary of Real Estate
Appraisal", is the reasonable and probable use that supports the highest present
value of vacant land or improved property, as defined, as of the date of the
appraisal.
In cases where a site has existing improvements, the highest and best use
may be different from the existing use. However, the existing use will continue
unless and until the land value, in its highest and best use, represents the premise
upon which value is based.
Also implied within this definition is that the determination of highest and
best use results from the appraisers judgment and the analytical skill; i.e., that the
highest and best use determined from analysis represents an opinion, not a fact to
be found. The use of a property must be physically possible, legally permissible,
financially feasible, and maximally productive to represent the highest and best
use.
21
As though Vacant
The size, shape, area and terrain of the subject property as described in the
Site Description section indicate that development of the subject land is
physically possible. Development of the subject property into residential lots as
described in the Zoning section would meet the legally permissible criteria.
Several new subdivisions have been developed in recent years in Camden County.
They have generated positive net incomes and demonstrated a demand for
residential subdivisions. Based on this evident demand, development of the
subject site with a residential subdivision is considered financially feasible.
It is my opinion that the highest and best use of the land is for a residential
subdivision.
As Improved
The subject property is a planned development designed for residential
usage. A continuation of the development as scheduled is legally permissible.
All normal utilities are available to the site so the scheduled use is physically
possible. Single family home sales are expected to continue, therefore, the
subjects use as a residential subdivision is considered financially feasible.
After considering all the factors with respect to location, accessibility to
commercial areas, and availability of utilities, it is my opinion that the highest and
best use for the subject property is the existing residential subdivision.
22
SINGLE-FAMILY SUBDIVISION LOTS
Ninety-Six Lots
The lot sizes range from 6,600 to 30,295 square feet and the typical lot
size is 6,600 square feet with dimensions of 60 by 110 feet. There are 17 dockable
marsh front lots and 79 interior lots.
DESCRIPTION OF IMPROVEMENTS
The subdivision consist of a total of 96 single-family lots. Access is over
public paved roads with concrete curbing. City water and sewer serves each lot.
The proposed amenity center to be developed on a 0.80 acre site on the north end
of the subject includes pool, clubhouse, tennis, and playground. There is a vinyl
fence running along the Old Still Road frontage. The entrance is highly
landscaped and includes a distinguishable entry sign and is well lighted.
SUBDIVISION VALUATION - SALES COMPARISON APPROACH
Completed subdivisions seldom sell to a single purchaser as lots are
typically sold to individuals or builders over a period of time. Therefore, due to
the lack of meaningful data, the Sales Comparison Approach for the subject
subdivision lots is omitted from this report. However, the retail prices of the lots
are estimated by a sales comparison analysis of similar lot sales.
23
INDIVIDUAL SUBDIVISION LOT SALES ANALYSIS
Land Valuation
The Market Data Approach is used to estimate land value. This involves
an analysis of comparable subdivision lot sales. I have researched lot sales in
competitive new subdivisions in the subject market area. As a result of my
research, I have determined that the following subdivisions are most competitive
with the subject.
Winding River
Winding River is a new development by LandMar and is located north of
Laurel Island Parkway on the west side of Winding Road, approximately 3 miles
east of the subject. It fronts on both the marsh and Winding Road. Lot types
include marsh front, lagoon/wetland front and interior. The interior lot sales
range from $62,000 to $65,000 and in size from 7,475 sf to 16,000 sf. The
lagoon/wetland lot sales range from $62,900 to $110,100 and in size from
7,475 sf to 17,200 sf. The marsh lot sales range from $149,900 to $196,100 and
in size from 15,000 sf to 30,000 sf. Community amenities include a clubhouse
with fitness center, pool, playground, and nature preserve. Associate membership
in Osprey Cove Golf Course is available to Winding River property owners. The
$10,000 initiation fee is waived for each property owner. There were 98 lot sales
in 2006 and have been 30 lot sales to date in 2007. A review of available lots
shows forty- five 65 foot wide lots available ranging from $37,900 to $80,900.
They include 8 lots priced from $37,900 to $49,900, 28 lots priced from $50,900
to $65,000, and 6 lots priced from $71,900 to $80,900. The lower price lots are
across the street from or back up to Winding Road. The higher price lots are
larger lake/preserve front. The typical 65 foot lot contains approximately 7,500
square feet. There are fifty-two 80 foot lots available ranging from $63,900 to
24
$79,900. The typical 80 foot wide lot contains approximately 12,000 square feet.
A summary of lot sales follows on the next page.
25
Lake/Wetland/Interior Lots
Marsh Lots
Lot Price
Type
Lot Price
406
$106,100
Lake
354
149,900
405
82,100
Lake
362
186,100
404
75,900
Lake
361
169,900
402
72,100
Lake
364
196,100
401
62,900
Lake
352
159,900
400
62,900
Lake
363
189,900
399
88,900
Lake
357
165,900
403
70,900
Lake
408
86,100
Lake
411
83,900
Lake
163
65,000
Lake
159
65,000
Lake
378
74,900
Wetland
252
62,000
Wetland
218
62,000
Wetland
413
110,100
Wetland
412
89,900
Wetland
367
96,100
Wetland
368
96,100
Wetland
211
69,000
Wetland
414
103,900
Wetland
415
100,900
Wetland
373
69,900
Wetland
172
65,000
Interior
26
Fiddlers Cove
Fiddlers Cove is a gated subdivision located in the Laurel Island Country
Club neighborhood approximately 2 miles east of the subject. In addition to the
Fiddlers Cove clubhouse/pool/playground amenity, the property owners have
access to the Laurel Island Country Club amenities. Lot types include interior,
lake and marsh. The interior lot sales range from 62,500 to $85,000 with a
typical lot size of 14,000 sf. The lake lot sales range from $87,500 to $110,000
with a typical lot size of 14,000 sf. The most recent marsh front lot sale was
$186,000. The marsh lot listings range from $290,000 to $320,000. There were
10 lot sales in 2006 and 3 sales to date in 2007. They recently conducted a special
sales promotion offering a discount of 10% on lot prices in phase 2 which
produced approximately 25 sales contracts according to the developer. A review
of available lots indicates lake/preserve lot prices from $75,000 to $118,000.
These prices reflect the superior amenities and large lot sizes compared to the
subject. A summary of lot sales follows on the next page.
27
Fiddlers Cove
Lot Price
Type
59
85,000
Interior
95
105,000
Lake
98
104,500
Lake
94
87,500
Lake
3
81,500
Interior
17
75,000
Interior
60
80,000
Interior
92
102,000
Lake
104
108,000
Lake
55
62,500
Interior
102
110,000
Lake
21
64,000
Interior
52
68,500
Interior
43
95,000
Wetland
50
66,500
Interior
54
62,500
Interior
46
68,000
Interior
33
186,000
Marsh
28
Riverfront Lot Sales
Lot Location
Price
16
Satilla River Landing
$342,000 103
28
River Place Plantation 299,000
100
22,000 sf
31
Red Bluff
121
24,400 sf
295,000
Frontage Size
15,191 sf
Summary of estimated lot values:
Fiddlers Cove is a superior location featuring a gated entry, larger lots,
superior amenities including access & proximity to Laurel Links Golf Course.
Winding River is considered most similar and competitive to the subject. It
features similar sized lots, however, it has superior amenities with access to
Osprey Cove Golf Course. The interior lots sales range from $62,000 to $65,000
per lot. There are 97 lots currently offered for sale ranging from $37,900 to
$79,900. Of these lots, 28 lots priced from $50,900 to $65,000 are considered
most similar to the subject interior lots.
A study of river front lot sales indicates a range of $269,00 to $469,000.
A river front lot (lot 16) recently sold in Satilla River Landing for $342,000. It
has direct frontage on the Satilla River with frontage of 103 feet. Satilla River
Landing is located north of the subject in Woodbine, west of Interstate 95. River
Place Plantation recently listed 16 river front and river access lots ranging from
$269,000 to $469,000. The lower price lots are dockable marsh front lots with
300 to 700 feet of marsh to the Little Satilla River. These lots range from
$269,000 to $379,000 and in size from 25,000 sf to 43,000 sf. River Place
Plantation is located north of the subject at the northern end of Camden County on
the west side of Highway 17, west of Interstate 95. The subject property offers a
29
proposed amenity center including clubhouse, pool, tennis, and playground,
however, it is inferior to the total amenity package offered by the competitive
subdivisions. There are 79 interior lots and 17 dockable marsh front lots. Lot 80
includes a new 400 linear foot dock with floating dock. The dockable marsh front
lots have access to Crooked River across approximately 400 to 700 linear feet of
marsh. Three of these lots (39, 40, 41) are proposed to share a dock and two of
these lots (71 & 72) are proposed to share a dock. All other dockable marsh front
lots are proposed for individual docks. The lots range in size from 6,600 sf to
30,295 sf with the typical lot size of 6,600 sf with front age of 60 feet. Individual
lot values are weighted by size, view, location. Some lots back up to Old Still
Road, and some back up to the County owned property on the south, and some
back up to the RV Park on the north. These lots are valued at the lower end of the
price range. Based on the above analysis the estimated lot values for the subject
interior lots is $55,000 to $68,000 and for the dockable marsh lots is $250,000 to
$375,000. The total estimated gross retail sellout value of the 96 lots is
$9,457,000 or $98,510 per lot. A summary of estimated lot values follows on the
next page.
30
The Landing at Crooked River
Lot # Type
Size SF
Est. Value
Lot # Type
Size SF Est. Value
1
Interior
10,458
$
58,000
50
Interior
7,145
$
55,000
2
Interior
8,242
$
55,000
51
Interior
12,196
$
55,000
3
Interior
8,242
$
55,000
52
Interior
14,330
$
55,000
4
Interior
8,175
$
55,000
53
Interior
14,330
$
55,000
5
Interior
8,100
$
55,000
54
Interior
15,838
$
55,000
6
Interior
8,100
$
55,000
55
Interior
6,584
$
55,000
7
Interior
8,100
$
55,000
56
Interior
6,600
$
55,000
8
Interior
8,100
$
55,000
57
Interior
6,600
$
55,000
9
Interior
8,100
$
55,000
58
Interior
6,600
$
55,000
10
Interior
8,014
$
58,000
59
Interior
8,191
$
58,000
11
Interior
8,250
$
58,000
60
Interior
11,736
$
60,000
12
Interior
6,600
$
55,000
61
Interior
10,829
$
60,000
13
Interior
6,567
$
55,000
62
Interior
8,126
$
58,000
14
Interior
6,567
$
55,000
63
Interior
6,600
$
55,000
15
Interior
9,844
$
62,000
64
Interior
6,600
$
55,000
16
Interior
20,908
$
68,000
65
Interior
6,600
$
55,000
17
Interior
24,905
$
68,000
66
Interior
6,600
$
55,000
18
Interior
9,583
$
62,000
67
Interior
6,600
$
55,000
19
Interior
6,610
$
55,000
68
Interior
6,600
$
55,000
20
Interior
9,148
$
55,000
69
Interior
6,600
$
55,000
21
Interior
8,774
$
60,000
70
Interior
8,227
$
58,000
22
Interior
14,959
$
60,000
71
Marsh
10,890
$
260,000
23
Interior
15,341
$
60,000
72
River
7,405
$
280,000
24
Interior
8,567
$
55,000
73
River
7,405
$
280,000
25
Interior
8,567
$
55,000
74
River
7,840
$
280,000
26
Interior
8,242
$
55,000
75
River
8,712
$
280,000
27
Interior
10,458
$
58,000
76
River
9,583
$
300,000
28
Interior
7,490
$
55,000
77
River
11,325
$
300,000
29
Interior
7,045
$
55,000
78
River
13,939
$
325,000
30
Interior
8,392
$
55,000
79
River
15,246
$
325,000
31
Interior
9,760
$
55,000
80
River/Dock
14,810
$
375,000
32
Interior
7,437
$
55,000
81
Common Area
33
Interior
7,953
$
55,000
82
Interior
6,589
$
55,000
34
Interior
7,200
$
55,000
83
Interior
6,600
$
55,000
35
Interior
7,560
$
55,000
84
Interior
6,600
$
55,000
36
Interior
7,416
$
55,000
85
Interior
6,600
$
55,000
37
Interior
11,329
$
62,000
86
Interior
6,600
$
55,000
38
Interior
30,295
$
68,000
87
Interior
6,600
$
55,000
39
Marsh
9,583
$
325,000
88
Interior
6,600
$
55,000
40
Marsh
9,583
$
295,000
89
Interior
6,600
$
55,000
41
Marsh
11,761
$
270,000
90
Interior
6,600
$
55,000
42
Marsh
17,860
$
250,000
91
Interior
8,031
$
55,000
31
43
Interior
6,639
$
55,000
92
Interior
12,195
$
60,000
44
Interior
6,600
$
55,000
93
Interior
13,540
$
60,000
45
Interior
6,600
$
55,000
94
Interior
9,379
$
56,000
46
Interior
7,029
$
55,000
Phase 2
47
Interior
6,600
$
55,000
1
River
9,583
$
300,000
48
Interior
6,600
$
55,000
2
River
11,325
$
275,000
49
Interior
6,566
$
55,000
3
River
16,117
$
275,000
32
SUBDIVISION VALUATION - DISCOUNTED CASH FLOW
Methodology
The value of the subject 96 lots has been estimated by a Discounted Cash
Flow Analysis. This valuation technique determines the value for the 96 lots by
estimating the gross retail sales income from the individual lots, allowing for an
absorption period, and deducting the holding costs and profit motive. The
resulting cash flows are discounted to a present value and added to produce the
indicated Market Value of the subdivision lots.
Gross Sales Income
Absorption
The projected lot absorption rate of the subject property is based upon an
analysis of the sales history of comparable lots in the subject market area.
The subject is located in southern Camden County. Lots are marketed for
primary residences. As Camden County's population and employment continues
to grow at a steady pace, demand for housing remains strong. The subject’s
central location is appealing.
To estimate the absorption of the subject lots, the appraiser has analyzed
comparable lot sales in the subject market area and has discussed the development
with Realtors knowledgeable of local real estate. Lot sales in Winding River have
averaged 7.5 lots per month beginning January, 2006. Lot sales in Fiddlers Cove
have average 1.4 lots per month for the same time period. Consideration is given
to the inventory of similar single- family lots in the subject market area and the
current slowdown in lot sales. Based on this analysis, it is my opinion that the
subject 96 lots will sell at a rate of 1.7 lots per month indicating a 5 year
absorption period. An increase in individual lot values is typical in the subject
market area and is estimated to be 5% per year indicating an average lot sales
33
price of $98,510 in year 1 and $103,000 in year 2, $108,000 in year 3, $113,000
in year 4, and $118,000 in year 5. For purposes of this analysis it is assumed that
there will be 20 lot sales per year in years 1 thru 4, and the remaining 16 lots in
year 5.
Expenses During Lot Sellout
To estimate the expenses during the absorption period, expenses incurred
at similar developments in the area were considered.
Sales and Marketing
Sales and marketing expenses are estimated at 10% of gross sales income.
These costs include items directly related to lot sales, including advertising and
promotion. It is assumed that the subject lots will be listed for sale with a real
estate company, which is typical. These expenses are projected over the sellout
period.
Overhead and Management
Costs for overhead and management include accounting and legal fees,
landscaping, monitoring of architectural control standards, maintenance of
common areas and unsold portions of the development. This expense is estimated
at 5% of gross sales income.
Real Estate Taxes
For purposes of this analysis, property taxes are estimated at 1% of gross
sales income.
Profit
In order to accurately reflect market value from the Discounted Cash
Flow, some indication of entrepreneurial profit should be included.
Entrepreneurial profit represents the amount an ent repreneur receives over and
above cost incurred. This represents the reward and incentive to an entrepreneur
to undertake the project and its associated risk. The amount of profit an
34
entrepreneur should reasonably expect to receive varies with the specific factors
affecting the risk of a project. The subject is a completed subdivision, therefor the
developer profit will be considered in the discount rate.
Annual Discount Rate
A discount rate is defined in "The Appraisal of Real Estate", published by
the Appraisal Institute as " a yield rate used to convert future payments or receipts
into present value". The resulting present value represents the amount of capital
to be invested to yield the specified discount rate.
There is no historical market data available relative to discount rates for
single family subdivisions. Most investors relate the value of money to the more
traditional properties associated with long term income streams. All investments
are in competition with one another for capital. The investor has the choice
securities such as bonds and stocks, other enterprises or real estate investments,
all of which yield various rates of return.
A subdivision development does not have similar investment
characteristics to typical income producing properties, however, these rates are
considered in the subjective process of choosing an appropriate discount rate for
the subject subdivision.
Consideration is also given to the locational and
development characteristics of the subject subdivision, as well as market
conditions prevailing in the area. Consideration of risk, burden of management,
degree of liquidity, and other factors affect the rate of return acceptable to an
individual investor.
After considering the foregoing, it is my opinion that the appropriate
discount rate for the subject subdivision is estimated at 12%. The Value by
Discounted Cash Flow of the 96 lots is as follows on the next page.
35
Subdivision Valuation By Discounted Cash Flow
96 Lots
Year
1
2
3
4
5
Lot Sales
20
20
20
20
16
Average Lot Sales $
$98,510
$103,000
$108,000
$113,000
$118,000
Gross Sales
$1,970,200
$2,060,000
$2,160,000
$2,260,000
$1,888,000
Less Expenses @ 16%
$315,232
$329,600
$345,600
$361,600
$302,080
Net Income
$1,654,968
$1,730,400
$1,814,400
$1,898,400
$1,585,920
.89286
.79719
$1,477,654
$1,379,458
Present Value Factor @
.71178
.63552
.59345
$1,206,471
$941,164
12%
Present Value of Cash
$1,291,453
Flows
Total Present Value of Cash Flows
Rounded To
$6,296,200
$6,296,000
36
Verticle Development
The verticle development will consider potential net profit from the construction
of houses on each of the 96 lots. To determine size houses and price range, I have
studied house sales in Winding River and Fiddlers Cove, as well as, riverfront house sales
along the Georgia coast. The following table summarizes new homes that are currently
listed for sale (L) or have recently sold (S).
Location
Address
View
Size SF Price
$/SF
Fiddlers Cove (L)
140 Bryce Ryan Cir
Marsh
2,663
$505,000
$189
Fiddlers Cove (L)
136 Bryce Ryan Cir
Marsh
3,177
$642,000
$202
Fiddlers Cove (L)
104 Cameron Owen Dr Lake
2,662
$484,000
$181
Fiddlers Cove (L)
147 Bryce Ryan Cir
Lake
2,704
$485,300
$179
Winding River (L)
111 Oarsman Crossing
Lake
1,900
$325,000
$171
Winding River (L)
124 Oarsman Crossing
Preserve 1,850
$325,500
$175
Winding River (L)
210 Ebbtide Crossing
Preserve 1,510
$255,000
$168
Winding River (L)
217 Ebbtide Crossing
Lake
1,604
$279,900
$174
Winding River (L)
201 Edgewater Drive
Lake
2,800
$499,990
$178
Winding River (L)
118 Boatsman Way
Lake
1,918
$279,990
$146
Winding River (L)
127 Rindle Trace
Preserve 2,195
$369,500
$168
Oak Grove Island (S) 114 Mariners Walk
River
3,161
$677,000
$214
Royal Oaks (S)
180 Royal Oaks Dr
River
3,500
$1,200,000 $342
Blythe Island (S)
212 Beachside Dr
River
3,116
$800,000
$256
Blythe Island (S)
228 Midway Cir
River
2,729
$879,900
$322
Waverly (L)
715 Frazier Road
River
2,600
$769,000
$295
The marsh/river house sales range in size from 2,600 to 3,500 square feet and in
price from $677,000 to $1,200,000. An average size of 2,800 square feet and sales price
of $875,000 is considered in line with market values for the subject river lots.
37
The lake/preserve house sales range in size from 1,510 to 2,800 square feet and in
price from $255,000 to $642,000. A typical house size is 1,800 with a sales price of
$275,000 for the interior lots.
To estimate the potential net profit from house sales, I have researched and
reviewed building cost estimates from several local builders. Building cost includes a
reasonable profit for the contractor which is typically in the range of 10% to 15%. In
addition to the building cost, there is an expense for developers marketing cost, overhead
and profit. The net profit is typically in the range of 15%. This will be used to estimate
the net profit from the 96 proposed house sales. The interior lot houses should sell for an
average of $275,000. Based on an average cost to build including builders profit of $95
per square foot plus average lot cost of $56,000, the 15% net profit margin would yield
approximately $34,000 net profit per house. The river lot houses should sell for an
average of $875,000. The river houses would typically be 2 or 3 story designs with builtin garage/storage area on the ground floor. This type elevated construction plus the
upgraded interior finishes including elevators that the market would expect would be
more expensive to build. Based on an average cost to build including builders profit of
$150 per square foot plus average lot cost of $293,000, the 15% net profit margin would
yield approximately $106,000 net profit per house.
The total estimated net profit from the 79 interior lot houses at $34,000 each totals
$2,686,000. The total estimate net profit from the 17 river lot houses at $106,000 each
totals $1,802,000. The overall estimated net profit from the 96 house would be
$4,488,000 or an average of $46,750 per house. This will be used to estimate the present
value of the cash flows from house sales. The discounted cash flow analysis will use a
discount rate of 30%. This rate reflects the additional risk associated with speculative
building and is in line with what a typical developer would expect. The absorption is in
line with absorption for the individual lot sales as discussed in this report. This is in line
with new home sales and building permits in Winding River as shown in the following
table.
38
New Home Sales & Building Permit Summary
Sales
Fiddlers Cove
Permits
2006
2007
2006
2007
10
3
28
4
22
12
2
Winding River 2
Source: Fax 1 Public Records for Camden County
Discounted Cash Flow Analysis – Net Profit from Home Sales
Year
1
2
3
4
5
Home Sales
20
20
20
20
16
Average Net Profit
$46,750
$46,750
$46,750
$46,750
$46,750
Total Net Profit
$935,000
$935,000
$935,000
$935,000
$748,000
Present Value Factor @ 30%
Present Value of Cash Flows
.76923
$719,230
.59172
$553,258
.45517
$425,583
.35017
$327,408
.26933
$201,458
Total Present Value $2,227,000 (rounded)
39
RECONCILIATION
Based on the forego ing analysis, it is my opinion that the estimated market
values are as follows:
Present Market Value Estimate
as of 7/10/2007 (96 lots)
$6,296,000.00
Total Gross Retail Sellout Value Estimate
as of 7/10/2007 (96 lots)
$9,457,000.00
Present Value Estimate of Projected Net Cash
Flow From House Sales (96 Houses)
$2,227,000.00
40
Addendum
Subject Photos
Entrance
Subject Photos
Interior Street View
Subject Photos
Typical Lots 1-9
Subject Photos
North Lots 82-89
Subject Photos
Typical Marsh Lot
Subject Photos
Lot 80 Dock
Subject Photos
Crooked River from Lot 80 Dock
Subject Photos – Amenity Area
Subject Photos
Marsh Lot
Subject Photos
South Lots 29-33
Photos – New Houses
140 Bryce Ryan
Fiddlers Cove
Marsh Front
111 Oarsman
Winding River
Lake Front
201 Edgewater
Winding River
Lake Front
136 Bryce Ryan
Fiddlers Cove
Marsh Front
217 Ebbtide
Winding River
Lake Front
127 Rindle
Winding River
Preserve Front
147 Bryce Ryan
Fiddlers Cove
Lake Front
210 Ebbtide
Winding River
Preserve Front
River House
Satilla River
Landing
Photos – River Front Houses
180 Royal Oaks Drive
228 Midway Circle
River Front Lot
Lot 16 Satilla River Landing
Winding River Photos
Main Entry
Clubhouse
Clubhouse/Pool
Lake
Preserve Front Lots
Interior Lots
Fiddlers Cove
Lake
Proposed Amenity Complex
Typical Lot
Entry
Subject Subdivision Plat
Location Map
ENVIRONMENTAL DISCLAIMER
The value estimated in this report is based on the assumption that the property is
not negatively affected by the existence of hazardous substances or detrimental
environmental conditions. The appraiser is not an expert in the identification of
hazardous substances or detrimental environmental conditions. The appraiser's
routine inspection of and inquires about the subject property did not develop any
information that indicated any apparent significant substances or detrimental
environmental conditions which would affect the property negatively. It is
possible that tests and inspections made by a qualified hazardous substance and
environmental expert would reveal the existence of hazardous materials and
environmental conditions on or around the property that would affect its value.
Date: July 10, 2007
Appraiser: H. Hal Sigman
APPRAISERS CERTIFICATION
The undersigned does hereby 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 reported analyses, opinions, and conclusions are limited only by the reported
assumptions and limiting conditions, and are personal, unbiased 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 or bias with respect to the parties involved.
4. My compensation is not contingent on an action or event resulting from the analyses,
opinions, or conclusions in, or the use of, this report. The appraisal assignment was not
based on a requested minimum valuation, a specific valuation, or the approval of a
loan.
5. My analyses, opinions, and conclusions were developed, and this report has been
prepared in conformity with the requirements of the Code of Professional Ethics and
the Uniform Standards of Professional Appraisal Practice of the Appraisal Institute as
well as with the requirements of the State of Georgia for Certified Real Estate
Appraisers.
6. No one provided significant professional assistance to the persons signing this report
unless otherwise noted herein.
7. I have made a personal inspection of the subject property.
8. As of the date of this report H. Hal Sigman has completed the requirements of the
continuing education program of the State of Georgia Real Estate Appraisers.
Date: July 10, 2007
H. Hal Sigman
LIMITING CONDITIONS AND ASSUMPTIONS
The appraisal is made subject to the following conditions and assumptions:
1. Any legal description or plats furnished are assumed to be accurate. Any sketches or
drawings included in this report are included to assist in visualizing the property. The
appraiser has not made a survey of the property and, therefor, assumes no
responsibility for their accuracy.
2. No responsibility is assumed for matters legal in nature. Title is assumed to be good
and marketable and in fee simple unless otherwise noted in the report. It is assumed
that the property is free and clear of existing liens, assessments and encumbrances,
except as noted in the attached report.
3. It is assumed that the property is under competent management.
4. The appraisers assume no liability for structural features not visible on ordinary
careful inspection, no do they assume any responsibility for sub-surface conditions.
5. Certain data used in this report was provided by sources which are considered
reliable, however, it can not be guaranteed.
6. The value estimate reported herein applies to the entire property, and any proration or
division of the total into fractional interests will invalidated the value estimate, unless
such proration or division of interests is set forth in the report.
7. The division of the land and improvements values estimated herein is applicable only
under the program of utilization shown. These separate valuations are invalidated by
any other application.
8. We are not required to give testimony or attendance in court by reason of this
appraisal, with reference to the subject property, unless arrangements have been
previously made therefore.
9. Neither all nor any part of the contents of this report shall be conveyed to the public
through advertising, public relations, news, sales, or other media, without the prior
written consent and approval of the author; this pertains particularly to the valuation
conclusion, the identity of the appraiser or firm with which he is associated.
10. No subsoil data based upon engineering core borings were furnished to the appraiser.
We have assumed there are no subsoil defects present that would impair development
of the land to its maximum permitted use, or would render it more or less valuable.
11. The subject property may or may not be located in or adjacent to a wetlands area. The
appraiser is not qualified in the area of engineering pertaining to the determination of
wetlands. Therefore, the appraiser is unable to determine the wetlands status of the
subject property. The appraiser assumes the appropriate permit, if required, can be or
has been obtained from the U.S. Army Corps of Engineers. It is also assumed that the
jurisdictional determination study and or permit regarding construction in a wetlands
area, if required, does not result in the alteration of the subject property description
contained in the appraisal report.
12. The American with Disabilities Act (ADA) became effective January 26, 1992. I have
not made a specific compliance survey and analysis of this property to determine
whether or not it is in conformity with the various detailed requirements of the ADA.
It is possible that a compliance survey of the property together with a detailed analysis
of the requirements of the ADA could reveal that the property is not in compliance
with one or more of the requirements of the act. If so, this fact could have a negative
effect upon the value of the property. Since I have no direct evidence relating to this
issue, I did not consider possible noncompliance with the requirements of ADA in
estimating the value of the property.
Resume
H. Hal Sigman
Georgia Certified Appraiser
P. O. Box 20558
116 Follins Lane
St. Simons Island, Georgia 31522
Office 912-638-0091
Fax 912-638-0093
Education:
BBA University of Georgia, 1972
Real Estate Courses:
Real Estate Finance
Real Estate Valuation
Georgia Real Estate Salesman License, 1974
Georgia Real Estate Brokers License, 1978
Commerical Real Estate Investment 100, 1976
Commerical Real Estate Investment 101, 1976
Commerical Real Estate Investment 102, 1976
Experience:
Real Estate Broker/Developer, 1978-1990
Real Estate Appraiser, 1990-Present
Clients:
Superior Financial Corporation
Marshland Credit Union
Coastal Bank of Georgia
Sunshine Mortgage
Suntrust Mortgage
Bank of America
United Community Bank
Branch Banking & Trust
Ameris Bank
Regions Bank
Liberty Mortgage
Pine State Mortgage
Wachovia
Sapelo National Bank
Synovous Mortgage
Associates Relocation Services
Fairfield Financial
Security Bank
Southeastern Bank
Properties Appraised: Motels
Restaurants
Golf Courses
Marinas
Residential & Commercial Subdivisions
Assisted Living Facilities
Multi-Family
Shopping Centers
Condominiums
Commercial Land
Mini-Warehouse Facilities – Office/Warehouse
Appraisal Organizations:
Affiliate Member Appraisal Institute
License:
Georgia Certified Appraiser License #3232
STATEMENT
July 10, 2007
H. Hal Sigman
Sigman Appraisal Company
116 Follins Lane
St. Simons Island, Georgia 31522
Tax id #:58-2321671
Bill To:
Gary Samuel
Appraisal of Landing at Crooked River Subdivision, Kingsland, Ga.
Total Due:
Thank You
$5,000.00