AN APPRAISAL REPORT OF€¦ · An appraisal report setting forth the findings and conclusions...

THOMPSON APPRAISAL SERVICE Commercial & Rural Valuation Services

AN APPRAISAL REPORT OF

The Seven Points Professional Center A mixed use property located at 606 South Seven Points Blvd.,

Seven Points, Henderson Co., Texas

PREPARED FOR: Mr. Kyle Rutherford

Associate Vice President CHRISTUS Trinity Mother Frances Health System

Construction Division 800 East Dawson Tyler, TX 75701

EFFECTIVE DATE OF VALUE: PREPARED BY:

August 10, 2016 THOMPSON APPRAISAL SERVICE, INC. EFFECTIVE DATE OF REPORT: Joe Bill Thompson, MAI

SCGREA#: TX-1320294-G August 30, 2016 Expires: 03/31/17

THOMPSON APPRAISAL SERVICE, INC. REAL ESTATE VALUATION SERVICES

PO Box 125 Pho: 903.881.2233 Lindale, TX 75771 www.thompsonappraisal.net Fax: 903.881.2234

August 30, 2016

Mr. Kyle Rutherford Associate Vice President CHRISTUS Trinity Mother Frances Health System Construction Division 800 East Dawson Tyler, TX 75701

Subject: An appraisal report of the Seven Points Professional Center and excess land

located at 606 South Seven Points Blvd. in Seven Points, Smith County,

Texas.

Dear Mr. Rutherford:

In accordance with your request and written authorization, we have appraised the above described

property for the purpose of estimating the Market Value “As Is” of the subject’s fee simple estate.

The subject is a mixed use property consisting of a multi-tenant office building, a storage warehouse

and two excess land tracts. The existing improvements were constructed in the late 1970’s and are

operating below market stabilization. We have considered the Sales Comparison Approach and the

Income Capitalization Approach to be the most applicable approaches to value regarding the subject

property. When considering the original year of construction and the various amount of accrued

depreciation we have the Cost Approach is considered the least applicable and has been omitted in

this appraisal. The intended use of this appraisal report is for internal asset management decisions

of the client, and the intended user of this report is the report addressee representing the client of

this assignment, CHRISTUS Trinity Mother Frances Health System, and no other users are

permitted.

In addition to examining the subject property, we have investigated other matters which appeared

pertinent to and indicative of the value of the subject property. Such matters concern location,

trends, market data, highest and best use, demand, return on investments, and other elements of

value. An appraisal report setting forth the findings and conclusions derived there from, together

with maps, plats, and photographs considered essential and pertinent to explain the processes

followed in making the appraisal and conclusions, is enclosed.

It is my opinion that the market value “As Is” of the fee simple estate of the subject property, as of

August 10, 2016, subject to all the Assumptions and Limiting Conditions, is:

$570,000

(FIVE HUNDRED SEVENTY THOUSAND DOLLARS)

Mr. Kyle Rutherford 8/30/2016 Page 2

The previous market value estimate is based upon a 12 month exposure time. The local real estate

market in the Seven Points area is best described as cautiously stable. Marketing times for most

real estate segments had been lengthening due to the national recession. However, recent sales of

comparable facilities appear on the upswing, and as evidenced by the improved sales included in

this appraisal, marketing times are shortening. Thus, the apparent increase in demand coupled with

the availability of mortgage funds in the local area should enhance the subject's marketability and

allow a sale within 12 months.

The undersigned appraisers, including principals, employees and associates, has no present or

prospective interest in the property appraised and compensation is not contingent upon the

valuation.

It is certified that the previous value estimate is not based upon any type of minimum, maximum or

specific valuation instructions from the client. Acceptance of and/or use of this report constitutes

acceptance of all the assumptions and limiting conditions contained in this report.

The undersigned appraiser/s, including principals, employees and associates, has no present or

prospective interest in the property appraised and compensation is not contingent upon the

valuation.

This appraisal has been prepared in accordance with the Uniform Standards of Professional

Appraisal Practice (USPAP) of the Appraisal Foundation, and the Code of Ethics and Standards of

Professional Practice of the Appraisal Institute. Additionally, it is deemed to comply with FIRREA (as

required for federally related transactions), as well as any supplemental guidelines of the client if

provided.

Respectfully Submitted,

THOMPSON APPRAISAL SERVICE, INC.

Joe Bill Thompson, MAI Jack Wheeler President Staff Appraiser SCGREA TX-1320294-G Trainee: #1340522 Expires: 03/31/2017 Expires: 07/31/2017

TABLE OF CONTENTS SUMMARY OF IMPORTANT FACTS AND CONCLUSIONS ......................................... 1 SCOPE OF THE APPRAISAL ........................................................................................ 4

EXTENT TO WHICH THE PROPERTY WAS IDENTIFIED ............................................... 4 EXTENT TO WHICH THE TANGIBLE PROPERTY WAS OBSERVED ............................ 4 TYPE AND EXTENT OF DATA RESEARCHED ................................................................ 4 TYPE AND EXTENT OF ANALYSIS APPLIED ................................................................. 5 COMPETENCY OF APPRAISER....................................................................................... 5 SIGNIFICANT REAL PROPERTY APPRAISAL ASSISTANCE PROVIDED..................... 5 GENERAL ........................................................................................................................... 6

DEFINITIONS AND ABBREVIATIONS ........................................................................... 6 ASSUMPTIONS AND LIMITING CONDITIONS ........................................................... 10

EXTRAORDINARY ASSUMPTIONS ............................................................................... 11 HYPOTHETICAL CONDITIONS ...................................................................................... 11

AUTHORIZATION ......................................................................................................... 12 INTENDED USE/USER OF THE APPRAISAL ............................................................. 12 PROPERTY RIGHTS APPRAISED .............................................................................. 12 LEGAL DESCRIPTION ................................................................................................. 12 USE OF PROPERTY .................................................................................................... 12 HISTORY OF THE SUBJECT PROPERTY .................................................................. 13 MARKETABILITY OF THE SUBJECT PROPERTY...................................................... 13 AREA & NEIGHBORHOOD ANALYSIS ....................................................................... 14 SUBJECT PROPERTY ANALYSIS .............................................................................. 16 PHOTOGRAPHS OF THE SUBJECT PROPERTY ...................................................... 31 HIGHEST AND BEST USE ........................................................................................... 34 THE VALUATION PROCESS ....................................................................................... 37 VALUATION SECTION - SEVEN POINTS PROFESSIONAL CENTER ....................... 39

INCOME CAPITALIZATION APPROACH ........................................................................ 40 Lease Up Discount Analysis ............................................................................................. 54 SALES COMPARISON APPROACH ............................................................................... 56

VALUATION SECTION – STORAGE WAREHOUSE ................................................... 69 SALES COMPARISON APPROACH ............................................................................... 70

SALES COMPARISON APPROACH ............................................................................ 70 Storage Warehouse Income Capitalization Analysis........................................................ 82

VALUATION SECTION – EXCESS LAND PARCELS .................................................. 84 Excess Land 1 Analysis .................................................................................................... 85 Excess Land 2 Analysis .................................................................................................... 97

RECONCILIATION OF FINAL VALUE ESTIMATE ..................................................... 109 CERTIFICATE OF APPRAISAL .................................................................................. 110 ADDENDA .................................................................................................................. 112

ENGAGEMENT LETTER ................................................................................................... A STATE CERTIFICATION ................................................................................................... B

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1 THOMPSON APPRAISAL SERVICE

SUMMARY OF IMPORTANT FACTS AND CONCLUSIONS

Property Type: Mixed use property that includes a professional office/retail complex, a warehouse building and 2 excess land tracts.

The subject is comprised of a multi-tenant office building

known as the Seven Points Professional Center, a storage warehouse and two excess land tracts.

Location: The subject has a physical address of 606 South Seven

Points Blvd., Seven Points, Henderson County, Texas. This location is along the E/L of Seven Points Blvd. (State Hwy 274) near the southern edge of the Seven Points city limits.

Legal Description: Being 4 contiguous tracts of land having a combined

acreage of ±18.109 acres out of the David Muckleroy Survey, A-503, Henderson County, Texas. Tract 1 being 0.96 acres; Tract 2 being 0.79 acres; Tract 3 being 1.819 acres & Tract 4 being 14.54 acres.

Land Area: ±18.109 acres. The subject site supports a multi-tenant

office building, a storage warehouse and also includes 2 excess land tracts. Located below is an outline of the land area allocations.

Land Area Pro. Center Warehouse Excess Land 1 Excess Land 2 TotalAcres 1.7500 Ac. 0.8000 Ac. 1.8190 Ac. 13.7400 Ac. 18.1090 Ac.SF 76,230 SF 34,848 SF 79,236 SF 598,514 SF 788,828 SF Site Characteristics: ±18.109 acre site located near the southern city limits of

Seven Points, Henderson County, Texas. Interior site with frontage along Seven Points Blvd. along the western boundary as well as additional frontage along Wood Road at the eastern boundary. Overall this is considered an open tract with a level to gently sloping topography. Drainage appears adequate and no portion of the subject site appears to lie within the 100 year flood plain. The subject site is located within the Seven Points city limits and receives all municipal utilities including sanitary sewer. The subject site is zoned B-2; General Business. No survey was made available though based on physical inspection only typical perimeter easements appear to encumber the subject, none of which are considered adverse.

The subject site is comprised of ±18.109 acres that have

been allocated into 4 components as depicted in the previously shown land area chart. The subject includes a ±1.75 acre site which supports the Seven Points Professional Center, a ±0.8 acre site which supports a storage warehouse along the eastern boundary, a ±1.819 acres excess land tract and a ±13.74 acre excess land tract.

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Professional Center Site - The ±1.75 acre professional center site is located along the W/L of Seven Points Blvd. in the southern portion of the Seven Points city limits. This site is slightly irregular in shape though functional with good frontage along a primary thoroughfare. The site is mostly level with an open terrain. Drainage appears adequate and no potion of the site appears to be within the 100 year flood plain.

Storage Warehouse Site - The storage warehouse site is a ±0.8 acre site located at the

subject’s SEC along Wood Road. This is a secondary street with limited exposure. The site is generally level with no adverse physical limitations. Drainage appears adequate and no portion of this site appears to be within the 100 year flood plain.

Excess Land 1 - Excess Land 1 is a ±1.819 acre commercial site located just

north of the professional center site along Seven Points Blvd. This is a rectangular site with considerably more frontage than depth. The site is open and has a level topography. Drainage appears adequate and no portion of the site appears to be within the 100 year flood plain.

Excess Land 2 - Excess land 2 is a ±13.74 acre future development tract of

land located just off Seven Points Blvd. Though the Excess Land 2 tract has partial visibility from Seven Points Blvd. the only access along the eastern boundary at Wood Road. Similar to the other land tracts this too is a generally level site with an open terrain.

Improvements: Professional Center - The subject is improved with a ±11,420 SF multi-tenant

office building known as the Seven Points Professional Center. This is a class C building constructed in 1979. The building is of average quality similar to many multi-tenant buildings from the same generation with brick exterior and flat; built up roof. The building has been partitioned into 5 suites with only 2 currently occupied. Each of the occupied suites are operating as medical offices. The interior of the subject features typical office finish in average condition.

Warehouse - The subject is also improved with a ±6,415 SF storage

warehouse which is located along the eastern boundary near Wood Road. This is a class S storage warehouse building with typical warehouse design and appeal. This building was constructed circa 1980 and is of both average quality and condition.

Site Layout and Excess Land: The professional center is located near the SWC of the site

along Seven Points Blvd. and only occupies ±1.75 acres. The warehouse building is situated near the SEC of the site along Wood Road and only occupies ±0.8 acres. In analyzing the highest and best use of the subject it is evident that the warehouse is not necessary to support the professional center nor does it placement so far away benefit

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the professional center either. We have considered each of these buildings as independent structures and will be valued individually in the following appraisal report.

With regards to the large land area, we have considered

excess land to exist. Since the professional center and the warehouse building only occupy ±1.75 acres and ±0.8 acres the remaining ±15.559 acres is considered to be excess land. However, the excess land is further divided into two categories. We have considered ±1.819 acres (described as WD Vol. 1539 Pg. 221) that fronts along Seven Points Blvd. to have all the necessary site characteristics to be marketed as a standalone commercial tract. From this point on this tract will be known as Excess Land 1. The remaining acreage of ±13.74 acres is considered future development land is will be referred to as Excess Land 2.

Valuation Data - Effective Date of Value: August 10, 2016 Date of Report: August 30, 2016 VALUE CONCLUSIONS:

Allocation of Market Value "As Is"Professional Office $335,000Warehouse Building $105,000Excess Land 1 $65,000Excess Land 2 $95,000

Total Estimated Value "As Is" $600,000

Overall Value ConsclusionCombined MV indicaitons $600,000Less Bulk Disc. 5% ($30,000)Final Market Value Conclusion $570,000

SAY $570,000 As Is Market Value Estimate: $570,000

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SCOPE OF THE APPRAISAL

The scope of the appraisal relates to the nature of the appraisal assignment and the extent of the

process of collecting, confirming, and reporting the data which provide the basis for the valuation

estimate. The scope of the appraisal assignment is summarized below.

EXTENT TO WHICH THE PROPERTY WAS IDENTIFIED

• We were provided with an address of the subject property.

• We relied on metes and bounds descriptions of the subject in determining the overall site

size and road frontage of the subject.

• We did not perform a title search or a survey of the subject.

EXTENT TO WHICH TANGIBLE PROPERTY WAS OBSERVED

• Observed the subject property on August 10, 2016.

• Photographed the site and building improvements on August 10, 2016.

• In addition to the information obtained from the on-site observation, information from the

Henderson County Appraisal District was relied upon for details regarding the subject

property.

TYPE AND EXTENT OF DATA RESEARCHED

• Sales of similar multi-tenant buildings that have sold over the past few years in the East

Texas area were researched for comparison to the professional center. We have also

applied analysis of storage warehouse sales from the East Texas area that have been

applied to the subject’s storage warehouse. The primary sources for this data were other

appraisers, brokers, LoopNet Recent Sales, CoStar data services, MLS, and the data

files of Thompson Appraisal Service, Inc. These comparable sales were sufficient in

quantity and quality to provide a reasonable indication of the subject’s fee simple market

value from the Sales Comparison Approach, as well as indications for comparable overall

capitalization rate indications to be used in the Income Capitalization Approach.

• Comparable rental information was researched from similar multi-tenant properties in the

East Texas area. The information was sufficient to identify an appropriate estimate of

market rent, as well as stabilized occupancy.

• Sales of comparable vacant land sites were researched for comparison to the subject’s

two excess land tracts. Adequate land sales were uncovered in the Cedar Creek Lake

market area (Seven Points, Gun Barrel City and Mabank). The primary sources for this

data were developers, appraisal districts, other appraisers, real estate agents, MLS, as

well as the data files of Thompson Appraisal Service, Inc. These comparable land sales

were sufficient in quantity and quality to provide a reasonable indication of the subject’s

land value.

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• Texas is a non-disclosure state. It is important that the intended users of this appraisal

understand that in Texas there is no legal requirement for grantors or grantees to

disclose any information relative to a transfer of real property, other than the recordation

of the deed itself. In Texas, the deed contains no information about the transaction

details, including the purchase price. As a result, no data source provides absolute

coverage of all transactions. It is possible that there are sales of which we are unaware.

Our data sources provide all the data typically available to appraisers in the normal

course of business.

TYPE AND EXTENT OF ANALYSIS APPLIED

• The subject property is a mixed use property consisting of a multi-tenant office building, a

storage warehouse and two excess land tracts. The existing improvements were

constructed in the late 1970’s and have various amount of accrued depreciation. For

these reasons the Cost Approach is the least applicable and has been omitted from this

appraisal report. We have considered the Sales Comparison Approach and the Income

Capitalization Approach to be the most applicable approaches to value regarding the

subject property. Though the subject includes a multi-tenant office building, this building

is currently 53% occupied with the only two tenants being co-owners of the real estate.

The following Sales Comparison and Income Capitalization Approaches are

representative of the subject “As Stabilized”. However, this appraisal report is to conclude

the market value “As Is”. Therefore a lease up discount has been performed and will be

applied to both approaches to determine the value of the subject’s “As Is” estate.

• This is an Appraisal Report as defined by USPAP and has been presented in a format

similar to a complete summary appraisal report defined by the prior editions of USPAP.

COMPETENCY OF APPRAISER

• The nature of the appraisal assignment relating to the subject property is somewhat

difficult. However, the appraiser is knowledgeable of the property type, as well as all

applicable appraisal methodology that may be required to determine the subject's market

value. The experience level of the undersigned is strong, with some of that background

being in the valuation of mixed use properties. Therefore, in regard to the "Competency

Provision" of USPAP, it is assured that the appraiser has the knowledge and experience

to do the assignment competently.

SIGNIFICANT REAL PROPERTY APPRAISAL ASSISTANCE PROVIDED No one other than the undersigned (Joe Bill Thompson, #1320294G; and Jack Wheeler,

trainee: #1340522), provided any significant real property appraisal assistance to the person

signing this report.

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GENERAL It is my intention that this appraisal be prepared in accordance with the Uniform Standards of

Professional Appraisal Practice (USPAP) of the Appraisal Foundation, and the Code of Ethics

and Standards of Professional Practice of the Appraisal Institute. This appraisal has been

prepared in accordance with the supplemental guidelines of the client, CHRISTUS Trinity

Mother Frances Health System, a copy of which is shown in the addenda of this report.

DEFINITIONS AND ABBREVIATIONS 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 and

knowledgeably and assuming the price is not affected by undue stimulus. Implicit in this definition

is the consummation of a sale as of a specified date, and the passing of title from seller to buyer

under conditions whereby:

a. buyer and seller are typically motivated; b. both parties are well informed or well advised, and acting in what they consider their own

best interests; c. a reasonable time is allowed for exposure in the open market; d. payment is made in terms of cash in U.S dollars or in terms of financial arrangements

comparable thereto; and e. 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. (Source: Code of Federal Regulations; 12CFR564.1; FIRREA)

DISPOSITION VALUE

“Disposition Value is the most probable price which a specified interest in real property is likely to

bring under all of the following conditions:

1. Consummation of a sale within a limited future marketing period specified by the client [Disposition Value generally assumes a marketing period approximately one-half of the market-derived marketing period (not to exceed a marketing period of six months) concluded for the Market Value estimate.)]

2. Current actual market conditions for the property interest appraised. 3. Buyer and seller each acting prudently and knowledgeably. 4. Seller under compulsion to sell. 5. Buyer typically motivated. 6. Both parties acting in what they consider their best interests. 7. Adequate marketing effort made for the limited time allowed for the completion of the

sale. 8. Payment made in cash in U.S. dollars or in terms of financial arrangements comparable

thereto. 9. 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.”

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MARKET VALUE “AS IS”

This value estimate represents the opinion of market value (defined above) as of the effective

date of value and considers all elements impacting the market value such as current economic

factors (supply & demand), the current condition (may include deduction for deferred

maintenance if applicable), and at its present occupancy and actual rent levels (if leased fee

interest applies).

MARKET VALUE “AS STABILIZED”

Also known as and could be labeled as “Upon Stabilization”. This value estimate represents the

opinion of prospective future market value as of the prospective future date of value of projected

stabilization. This value type applies to properties that are presently operating at below stabilized

occupancy or income levels. This value conclusion can also apply to proposed properties that

will require lease up to reach stabilization. Stabilization is level occupancy and income that is

prevalent in the current market for the particular subject property type. As a prospective value

estimate an extraordinary assumption is required.

In some instances it may be the request of the client to estimate the market value “As Stabilized”

as of the current effective date of value. In this case, it is assumed (under a hypothetical

condition rather than an extraordinary assumption) that the subject is operating at stabilized

occupancy and income levels of the current date. As it is a hypothetical scenario a hypothetical

condition is required.

MARKET VALUE “AS COMPLETE”

Also known as and could be labeled as “Upon Completion” or “As Proposed”. This value

estimate represents the opinion of prospective future market value as of the prospective future

date of value of projected completion of proposed improvements. It may or may not assume that

the property will be operating at below stabilized occupancy or income levels. This value

conclusion typically applies proposed properties that require some form of construction or

renovation to be complete as described in the appraisal. As a prospective value estimate an

extraordinary assumption is required.

In some instances it may be the request of the client to estimate the market value “As Complete”

as of the current effective date of value. In this case, it is assumed (under a hypothetical

condition rather than an extraordinary assumption) that the proposed subject has been completed

as of the current date. As it is a hypothetical scenario a hypothetical condition is required.

COST TO CURE

The cost to cure is the dollar estimate or financial measure of estimated cost to repair or cure a

form of curable physical deterioration (deferred maintenance) or curable functional obsolescence.

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FEE SIMPLE ESTATE

The complete bundle of rights associated with real property. However, it is typical that the fee

simple only refers to the surface estate for most instances as it is common that most mineral

estates have been reserved from the fee simple estate during prior ownership conveyances. The

sticks in the bundle of rights each have some type of value. For example, the owner of the fee

simple estate (i.e., the holder of the complete set of sticks in the bundle) can trade the rights to

occupy a certain amount of space within an existing building on the land in exchange for rent. In

this way, the familiar relationship of landlord to tenant can be thought of as an exchange of

property rights, and the appraiser can develop an opinion of the market value of the right to use

and occupy the leased premises. This right does not cease to exist when the owner of the fee

simple estate separates it from the complete bundle of rights. Rather, it is held by someone else,

in this case the tenant. Source: The Appraisal of Real Estate, 14th Edition; Page 69.

LEASED FEE INTEREST

The ownership interest held by the lessor, which includes the right to the contract rent specified in

the lease plus the reversionary right when the lease expires.

LEASEHOLD INTEREST

The right held by the lessee to use and occupy real estate for a stated term and under the

conditions specified in the lease.

SUBLEASE An agreement in which the lessee in a prior lease conveys the right of use and occupancy of a

property to another, the sublessee, for a specific period of time, which may or may not be

coterminous with the underlying lease term. Source: The Appraisal of Real Estate, 13th Edition;

Page 115

SANDWICH LEASE

A lease in which an intermediate, or sandwich, leaseholder is the lessee of one party and the

lessor of another. The owner of the sandwich lease is neither the fee owner nor the user of the

property. Source: The Appraisal of Real Estate, 13th Edition; Page 115

SANDWICH LEASEHOLD ESTATE

The leasehold estate or rights created when the lessee of the original lease (ground lease)

subleased the property to another tenant.

EXPOSURE TIME

The concept of exposure time is important to understand. The Dictionary of Real Estate

Appraisal, 5th edition, defines it as follows:

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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 on an analysis of past events assuming a

competitive and open market. If the subject property is competing with properties that sold with

limited exposure times in a market in which those sales are prevalent, these sales may

constitute the “market.” The value of the subject property must be estimated in recognition of

such a market.

Guide Note 14 of the Standards of Professional Appraisal Practice of the Appraisal Institute:

Concept of Exposure Time notes that exposure time is not an opinion of the appraiser when it is

specified by the client. Rather, the exposure time is a condition of the assignment. The guide

note further points out that the definition of disposition value includes the idea of “future exposure

time,” which is often interpreted as a contradiction in terms. Suppose an appraiser is developing

an opinion of value subject to the condition that a sale would occur within, say, five months from

now as defined by the client. The appraisal assignment would be a prospective valuation, and the

exposure time would be in the future relative to the date of the appraisal report. The opinion of

value is in the future relative to the date of the report but still predates the effective date of value

as described in the definition of exposure time. Source: The Appraisal of Real Estate, 14th

Edition; Page 66.

ABBREVIATIONS

SF = Square Foot sf = Square Foot /SF = Per Square Foot /sf = Per Square Foot /Year = Per Year GI = Gross Income FF = Front Foot NI = Net Income /FF = Per Front Foot /Acre = Per Acre LF = Linear Foot GIM = Gross Income Multiplier /LF = Per Linear Foot EGIM = Effective Gross Income Multiplier RR = Railroad ROW = Right of Way IH = Interstate Highway SH = State Highway US = United States CR = County Road FM = Farm-to-Market Road GBA = Gross Building Area NRA = Net Rentable Area NUA = Net Useable Area.

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ASSUMPTIONS AND LIMITING CONDITIONS It is assumed that title to the property or properties herein appraised is good and merchantable, and in fee

simple, unless otherwise specified. Where property rights other than fee title are the subject of the

appraisal, the rights appraised will be specifically outlined in the transmittal letter.

The appraiser assumes no responsibility for matters of legal character. The value is reported without

regard to questions of title, boundaries, encumbrances or encroachments.

The valuation is reported in dollars of currency prevailing as of the date of appraisal. The allocation of

value between land and building is applicable only under the current program of utilization, and is invalid if

used in making a summation appraisal in conjunction with the figures prepared by other persons.

All information, comments and conclusions appertaining to the subject and other properties represent the

personal opinion of the appraiser formed after examination of the property or properties. While it is

believed that the information, estimates, analyses and conclusions drawn there from are correct, the

appraiser does not guarantee them and assumes no liability for errors in facts, analysis or judgment.

All information contained in this report, if confidential, is submitted solely for the use of the addressee of

the letter of transmittal. The appraiser will not be required to give testimony or attendance in court or

before any other legal authority by reason of this appraisal without prior agreement and arrangement

between the employer and the appraiser.

Possession of this report, or a copy thereof, does not carry with it the right of publication or use. 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 consent and approval of the author, particularly as to

valuation conclusions.

Unless referencing an update letter or addendum report, this appraisal and its separate sections are

meant to be used as a whole, not individually or in conjunction with another appraisal report. If the

individual sections in this report are separated from the whole report, the final value estimate is

considered invalid.

Unless stated in this report, the existence of hazardous substances or other adverse environmental

conditions were not brought to the attention of the appraiser. This includes, without limitation, any test

being performed to identify such substances or environmental hazards after the inspection of the subject

property. As real estate appraisers, this company and its employees are not qualified to judge

environmental hazards. The appraiser has no knowledge of the existence of such materials on or in the

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property unless otherwise stated. The value estimated in this report is based on the assumption that

there is no such condition existent. No responsibility is assumed for any such conditions, or for any

expertise or engineering knowledge required to discover these conditions.

It is assumed that the information furnished to us - by the representative of the client, CHRISTUS Trinity

Mother Frances Health System, is correct. This information includes, but is not restricted to, legal

descriptions, size estimates, plats, and historical statements regarding the subject property.

Unless, otherwise stated within the report, it is assumed that all mechanical fixtures including, but not

limited to, electrical, structural, HVAC, and plumbing items are in working order and not subject to

significant deferred maintenance. It is assumed that all plumbing and electrical work complies with all

applicable rules, regulations, codes, and standards.

There has not been a soil or subsoil study supplied to this firm or its employees regarding the subject

property. It will be assumed that no adverse soil or subsoil conditions exist that would affect the long term

investment potential of the property.

There has not been an engineering study of the structural stability of the improvements supplied to this

firm or its employees regarding the subject property. It is assumed that there are no significant problems

associated with the structure that will detract from the investment potential of the property.

In addition to these assumptions and limiting conditions there may or may not be additional extraordinary

assumptions or hypothetical conditions that may impact the appraisal process. An extraordinary

assumption is an assumption, directly related to a specific assignment, as of the effective date of the

assignment results, which, if found to be false, could alter the appraiser’s opinions.1 A hypothetical

condition is contrary to what exists but is supposed for the purpose of the analysis.2

EXTRAORDINARY ASSUMPTIONS

• We have concluded that there are two excess land tracts. Excess Land 1 is based on a metes and

bounds descriptions found in Henderson County Deed Vol. 1539 Pg. 221. Excess Land 2 is based off

the residual land area from previous deed references. This appraisal is based on the extraordinary

assumption that the excess land calculations are correct and representative of the subject property.

HYPOTHETICAL CONDITIONS ● There are no hypothetical conditions for this appraisal.

1 The Dictionary of Real Estate Appraisal, 5th Edition, Page 73 2 The Dictionary of Real Estate Appraisal, 5th Edition, Page 97

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AUTHORIZATION Authorization for this appraisal was given by Mr. Kyle Rutherford representing the client, CHRISTUS

Trinity Mother Frances Health System.

INTENDED USE/USER OF THE APPRAISAL

To our understanding, the intended use of the appraisal is for internal asset management decisions of the

client, CHRISTUS Trinity Mother Frances Health System (intended user) regarding the subject property.

The intended user of this appraisal report is CHRISTUS Trinity Mother Frances Health System. Use of

this report by others is not intended by the appraiser.

PROPERTY RIGHTS APPRAISED

The subject property is a mixed use property with excess land. The existing improvements include the

Seven Points Professional Center and a storage warehouse. The subject also includes two excess land

tracts. The Seven Points Professional Center is a multi-tenant office building that is currently 53%

occupied. Only 2 of the professional center’s 5 suites are occupied. Furthermore, the two tenants are co-

owners of the real estate and do not provide an income stream to the building. The storage warehouse is

currently leased to a local family who is currently traveling the nation for a year and using the building for

storage purposes. After considering the lack of market leases and duration of the storage warehouse

lease we are assuming ownership of the property is vested in fee simple estate.

LEGAL DESCRIPTION

The subject is legally described as being 4 contiguous tracts of land having a combined acreage of ±18.109

acres out of the David Muckleroy Survey, A-503, Henderson County, Texas. Tract 1 being 0.96 acres; Tract 2

being 0.79 acres; Tract 3 being 1.819 acres & Tract 4 being 14.54 acres.

USE OF PROPERTY The existing use of the subject property is a mixed use property with excess land. The use of the real

estate as appraised is the same as a mixed use property which is similar to the concluded highest & best

use of the subject property.

JOB #16-252


HISTORY OF THE SUBJECT PROPERTY

This section is made in accordance with the Uniform Standards of Professional Appraisal Practice

(USPAP), which requires a three-year sales history reported on the subject property. A recent search, as

of the effective date of this appraisal, was conducted of the Henderson County Deed Records, and the

following transaction involving the subject property was revealed. The subject is currently under the

ownership of Starlor Corporation. The subject has been owned by this entity for many years preceding

this appraisal report.

To our knowledge, the subject is not presently listed for sale, and there are no pending contracts for the

subject property.

MARKETABILITY OF THE SUBJECT PROPERTY

The marketability of the subject property is based upon a 12 - 18 month exposure time. The

marketability is based upon broker’s opinions as well as current market activity such as the sale of similar

properties. While activity in the market had slowed due to the national economy, some growth is

becoming apparent. Therefore, based on this information, it is my opinion that the estimated "As Is"

market value of the subject indicated in this report is reasonable for the sale of the property within a 12 -

18 month time frame based upon an aggressive and reasonable marketing plan and assuming that clear

title is possible.

JOB #16-252


AREA & NEIGHBORHOOD ANALYSIS Area Analysis

The City of Athens is the seat of government for Henderson County in the northeastern region of Texas.

It is situated at the interchange of State Hwy 31 with State Hwy 19 and US Highway 175, approximately

75 miles southeast of Dallas and roughly 30 miles west of Tyler, the primary metro area for East Texas.

Access to Athens is considered to be relatively good, although there is no Interstate Highway influence.

US Hwy 175 does provide ready access to the D/FW metroplex and Athens does have a growing number

of commuters that work in the Dallas area. State Hwy 31 provides direct access to Tyler/Longview to the

east and Corsicana/Waco to the west. State Hwy 19 runs north/south through the East Texas region and

provides ready access to many other small Texas communities including Palestine to the south and

Canton (IH-20) to the north. Athens is geographically located within a region which is abundant in natural

resources (principally oil/gas and timber) and these, with related industry, constitute the foundation of the

economy.

The City of Seven Points is located adjacent to Cedar Creek Lake, northwest of Athens in northwestern

Henderson County just south of Kaufman and Van Zandt Counties. It is situated along State Highway

275 just west of the towns of Gun Barrel City and Mabank. The subject is approximately 60 miles

southeast of Dallas, Texas. Seven Points is geographically located within a region which is abundant in

natural resources (principally oil/gas and timber) and these, with related industry, constitute the

foundation of the economy. Despite a prolonged business downturn, originally resulting from the collapse

of international energy prices in the early part of the decade, both the city of Athens and Henderson

County have gained population since the 1990 U.S. Census. As the recreation opportunities around

Cedar Creek Lake became better known, the areas surrounding the lake became more heavily populated.

AREA POPULATION TRENDS

The labor force in the Henderson County area has generally been typical and for the most part has

followed the overall trend of the State. The current (July 2016) unemployment rate for Henderson County

is 5.8% just above the State rate of 5.1%. Please see the following chart below outlining the East Texas

Workforce (including Henderson County) historical unemployment rates.

Year Henderson % ∆ Athens % ∆1990 52,220 -- 10,967 --2000 71,313 36.6% 11,297 3.0%2010 103,350 44.9% 12,710 12.5%

JOB #16-252


The area near the subject has all municipal utility services such as electricity, city water and sewer,

electricity and telephone services. Other municipal services such as garbage collection, fire protection,

and police protection are adequate.

Neighborhood Analysis

The subject property is located in Seven Points and the neighborhood boundaries are described as the

City of Seven Points. The neighborhood has seen some growth with a 2000 population of 1,145 and a

2010 population of 1,455. Most of the development has been scattered single-family residential, though

some commercial development has occurred. The main roadways are State Highway 275 with nearby

State Hwy 198.

Despite the recent downturn in the economy, land value trends within the neighborhood are believed to

be stable as has the overall northwestern Henderson County economy. In summary, the subject

neighborhood consists of a wide variety of land uses including residential, commercial and light industrial.

It is classified as a stable neighborhood.

JOB #16-252


SUBJECT PROPERTY ANALYSIS

The subject property is a mixed use property that includes 2 different improved property types, as well as

two excess land tracts. The existing improvements are comprised of a multi-tenant office building known

as the Seven Points Professional Center and a storage warehouse. The professional center is situated at

the SWC of the subject site and occupies ±1.75 acres while the storage warehouse is situated at the SEC

of the subject site and occupies ±0.8 acres. We have considered the remaining ±15.559 acres to be

excess land; which is further allocated into two categories. We have considered ±1.819 acres (described

as WD Vol. 1539 Pg. 221) that fronts along Seven Points Blvd. to have all the necessary site

characteristics to be marketed as a standalone commercial tract. This tract is identified as Excess Land 1.

The remaining acreage of ±13.74 acres is considered future development land is referred to as Excess

Land 2.

The following analysis will address each portion of the subject property individually. First we will describe

the multi-tenant office building followed by a description of storage warehouse and then each excess land

tract will be detailed.

Multi-tenant Office Building; Seven Points Professional Center Site Analysis Physical Address: 606 South Seven Points Blvd., Seven Points, Henderson County,

Texas. Land Area: ±1.75 acres or ±76,230 SF Frontage: ±296 LF of frontage along the E/L of Seven Points Blvd. Street Improvements: At the subject Seven Points Blvd. is a two lane, asphalt paved,

thoroughfare with open ditch drainage. Configuration: Slightly irregular though functional. Site Influence: Interior tract that is at street grade Zoning/Restrictions: B-2; General Business. This is a relatively broad commercial zoning

in Seven Points allowing for most retail and commercial uses. Access/Visibility: Both access and visibility are considered to be average. Terrain: The subject is primarily open. Topography: Level to gently sloping east. Drainage: Appears adequate. Flood Plain: According to the current flood maps in print, no portion of the subject

property appears to be within the 100-year flood plain. This is evidenced by FEMA flood maps for Seven Points, Texas; Panel # 4821C 0075E being dated 4/5/2010.

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Soil Conditions: The site's soil exhibits characteristics that appear adequate for improvements, which is supported by improvements to the subject as well as properties in the immediate vicinity of the subject. We have not been provided with a soil or subsoil study and assume that no adverse soil or subsoil conditions exist that would affect the long-term investment potential of the property.

Utilities: The subject site is located in the City of Seven Points and has

access to all municipal utilities including sanitary sewer. Easements: Only perimeter utility easements that are typical for the area, not

adverse.

Adjacent Properties (Improvements)

North Vacant commercial land

South Vacant commercial land

East Pasture land

West Used auto and boat sales

Improvement Analysis The Seven Points Professional Center is a class C multi-tenant office building constructed in 1979. The

building offers 5 suites with 2 being occupied by family medical practices. The following summary of the

construction details is provided.

General Building Characteristics Gross Building Area: ±11,420 SF allocated as follows:

GBA BreakdownBuilding SF % of Total

Dental Office 2,956 25.9%Vacant Suite 1 1,642 14.4%Vacant Suite 2 1,296 11.3%

Family Practice 3,104 27.2%Vacant Suite 3 2,422 21.2%

Total GBA 11,420 100.0% Year Built: 1979 Effective Age: 30 years Construction Quality: Average Condition: Average Basic Construction Details Foundation: Concrete Slab

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Frame: Class "C" masonry frame construction. Exterior: Painted brick veneer. Roof: Flat; built up. Roof Cover: Built up tar & gravel. HVAC: Each of the suites are centrally heated and cooled by ground

mounded condensing units. Plumbing: Assumed to be adequate by local, state, & national code. Interior Finish: The interior finish of the respective suites vary though all are

generally similar. There is a combination of carpet and vinyl tile with wood panel and sheetrock walls. The ceilings are a painted sheetrock with mounted fluorescent lighting. Overall the interior of the professional center is average given its advanced age.

Concrete Paving: There is an estimated ±17,425 SF of concrete paving for employee

and patron parking. Approximately 38 parking spaces with 7 being ADA handicap.

Storage Warehouse Site: The storage warehouse is situated on a ±0.8 acre site near the SEC

of the subject site along Wood Road. Wood Road is a secondary street with limited traffic flow and open ditch drainage. This is an open level site with adequate drainage and no flood.

Gross Building Area: ±6,415 SF Year Built: Circa 1980 Effective Age: 30 years Construction Quality: Average Condition: Average Basic Construction Details Foundation: Concrete Slab Frame: Class "S" steel frame construction. Exterior: Metal exterior. Roof: Double pitch roof with metal covering. HVAC: The storage warehouse does not have HVAC. Plumbing: Assumed to be adequate by local, state, & national code. Interior Finish: Typical warehouse finish with exposed concrete floor and insulated

metal walls and ceilings.

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Storage Shed: There is a ±200 SF wood frame storage shed located on the site for

additional storage purposes.

Excess Land 1 Location: Excess Land 1 is situated along the Seven Points Blvd. road

frontage just north of the Seven Points Professional Center. Prominent well located commercial location.

Land Area: ±1.819 acres or ±79,236 SF. Frontage: ±387.78 LF of frontage along the E/L of Seven Points Blvd. Street Improvements: At Excess Land 1, Seven Points Blvd. is a two lane, asphalt paved,

thoroughfare with open ditch drainage. Configuration: Rectangular in shape with more frontage than depth. Site has a

frontage to depth ration of 1.92:1. Site Influence: Interior tract that is at street grade Zoning/Restrictions: B-2; General Business. This is a relatively broad commercial zoning

in Seven Points allowing for most retail and commercial uses. Access/Visibility: Both access and visibility are considered to be average. Terrain: The Excess Land 1 tract is primarily open. Topography: Level to gently sloping east. Drainage: Appears adequate. Flood Plain: According to the current flood maps in print, no portion of the subject


Soil Conditions: The site's soil exhibits characteristics that appear adequate for

improvements, which is supported by improvements to the subject as well as properties in the immediate vicinity of the subject. We have not been provided with a soil or subsoil study and assume that no adverse soil or subsoil conditions exist that would affect the long-term investment potential of the property.

Utilities: The Excess Land 1 tract is located in the City of Seven Points and

has access to all municipal utilities including sanitary sewer. Easements: Only perimeter utility easements that are typical for the area, not

adverse.



South Seven Points Professional Center

East Excess Land 2

West Used auto and boat sales

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Excess Land 2 Location: Excess Land 2 is situated along the W/L of Wood Road. Wood Road

is a secondary street with limited traffic flow and open ditch drainage. Land Area: ±13.74 acres. Frontage: Excess Land 2 has approximately ±630 LF of frontage along the W/L

of Wood Road. Street Improvements: Wood Road is a two lane, secondary, residential street with open

ditch drainage. Configuration: Irregular in shape though functional. Site Influence: Interior tract that is at street grade Zoning/Restrictions: B-2; General Business. This is a relatively broad commercial zoning

in Seven Points allowing for most retail and commercial uses. Access/Visibility: Both access and visibility are considered to be average. Terrain: The Excess Land 2 tract is primarily open. Topography: Level to gently sloping east. Drainage: Appears adequate. Flood Plain: According to the current flood maps in print, no portion of the subject


Soil Conditions: The site's soil exhibits characteristics that appear adequate for

improvements, which is supported by improvements to the subject as well as properties in the immediate vicinity of the subject. We have not been provided with a soil or subsoil study and assume that no adverse soil or subsoil conditions exist that would affect the long-term investment potential of the property.

Utilities: The Excess Land 2 tract is located in the City of Seven Points and

has access to all municipal utilities including sanitary sewer. Easements: Only perimeter utility easements that are typical for the area, not

adverse.



South Storage warehouse

East Excess Land 1

West Vacant pasture land

JOB #16-252


Functional Utility The overall design and layout of the improvements is considered to be functional for

a mixed use property. The improvements are constructed of fairly modern construction, design and

materials.

In my opinion, there is no functional obsolescence in the subject building. No compliance survey was

prepared in regard to ADA requirements, thus it is only assumed that no major alterations would be

required in the event of non-compliance in regard to ADA.

Economic Life of Improvements There was no information given regarding the structural stability of

the site. The Marshall Swift Cost Manual indicates typical useful lives of improvements similar to the

subject property to be 40 to 50 years. We estimate the subject's useful life to be a medium-range 45

years.

Effective Age of Improvements As mentioned, the existing improvements were constructed in the late

1970’s. The building is estimated to have an overall estimated effective age of approximately 30 years.

Therefore, the remaining economic life is calculated to 15 years.

Ad Valorem Tax Analysis The following information was obtained from the Henderson County Appraisal District. The tax rates for

the applicable taxing entities are shown below, in addition to the summary of the subject account.

Current Tax Rates 2015Rate/$100

$1.365000$0.404917$0.073067$0.126740$1.969724

Taxing EntityMabank ISD

Henderson County

Trinity Valley Comm.Total Tax Rate

Henderson Co. FM-FC

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Henderson County Appraisal District InformationOwner of Record Starlor CorporationLand Area: 18.198 Ac. Equates to Actual? No

Improvement GBA: 15,720 SF Equates to Actual? No

Current Tax Assessment 2016 %

Account # Land Improvements Production Market Ag Loss Assessment#C000000606 $46,460 $315,210 $0 $0 $361,670#C000000607 $1,680 $47,380 $25,120 $24,410 $49,770#C000002920 $56,450 $0 $0 $0 $56,450#C000002921 $106,970 $0 $0 $0 $106,970#R000014191 $0 $0 $14,360 $13,960 $400#R000014193 $0 $0 $21,370 $20,770 $600Total Assessment $211,560 $362,590 $575,860Current Tax Rate/$100 $1.96972

Ad Valorem Taxes for 2016 $11,343Taxes/SF $0.99 /SF

Assessed Value $0.27 /SF $31.75 /SF $50.43 /SF The current 2016 assessment of $609,880 (land and building before ag loss) is in line with the concluded

market value found in this appraisal report (before bulk discount).

Please refer to the following pages for maps, plats, and photographs that provide an adequate visual

representation of the subject property.

AREA MAP JOB #16-252

LOCATION MAP JOB #16-252

AERIAL MAP JOB #16-252

FLOOD MAP JOB #16-252

TOPO MAP JOB #16-252

PLAT MAP JOB #16-252

BUILDING SKETCH OFFICE SUITES JOB #16-252

BUILDING SKETCH STG. BUILDING JOB #16-252

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PHOTOGRAPHS OF THE SUBJECT PROPERTY

PHOTOGRAPHS OF SUBJECT PROPERTY

VIEW OF EXAM ROOM IN PROFESSIONAL

CENTERVIEW OF PROFESSIONAL CENTER SIGNAGE

FRONT VIEW OF SEVEN POINTS PROFESSIONAL

CENTER

INTERIOR VIEW OF EXAM ROOM IN

PROFESSIONAL CENTER

VIEW OF VACANT SUITE AT PROFESSIONAL

CENTERVIEW OF LAB AREA IN PROFESSIONAL CENTER

SUBJECT PHOTO PAGE 1

PHOTOGRAPHS OF SUBJECT PROPERTY

VIEW OF EXCESS LAND 2 FROM WOOD ROADSTREET SCENE LOOKING SOUTH ALONG WOOD

ROAD

STREET SCENE LOOKING NORTH ALONG SEVEN

POINTS BLVD.

STREET SCENE LOOKING SOUTH ALONG SEVEN

POINTS BLVD.

VIEW OF STORAGE BUILDING ALONG WOOD

ROAD

VIEW OF EXCESS LAND 1 FROM SEVEN POINTS

BLVD.

SUBJECT PHOTO PAGE 2

JOB #16-252


HIGHEST AND BEST USE

A fundamental proposition in land economics and an essential requirement to the valuation of real estate

property is the assessment of a property's highest and best use. Subject to the constraints imposed by

law, prevailing market conditions and the overall character of the property itself, highest and best use may

be defined as the optimum or most probable use/development of a property which yields the highest land

value or net return to an owner/investor. The American Institute of Real Estate Appraiser's terminology

handbook states further:

That reasonable or probable use that will support the highest present value of the land, as of the effective date of the appraisal;...that available use and program of future utilization/development which will maximize the potential net return of an investment over a given period of time....

Therefore, income property acquires value if it is capable of rendering services and/or producing income.

It must be able to satisfy a desire of a buyer in the marketplace. The income of a property depends upon

its utility and whether or not the improvement is an adequate property improvement, an over-

improvement, or an under-improvement. In other words, the property will not command a price unless

there is a demand for it.

The highest and best use conclusion provides the basis for an appraiser's value analysis. The remainder

of the valuation process is conducted in relation to these conclusions. Therefore, it is essential that the

highest and best use conclusion relate to the motivations of the market for the subject property.

The application of the test of highest and best use implies that the use must be legally permissible,

physically possible, financially feasible, and maximally productive. There are two distinct analyses in this

property: the highest and best use analysis of the site as if it was vacant, and the highest and best use

analysis of the site as it is improved. Two analyses are made because of the improvements. Each

analysis requires a separate discussion; therefore, the subject's highest and best use as improved will be

concluded. These two analyses are demonstrated on the following pages.

As If Vacant

Physically Possible The first step in the analysis of the site as if vacant includes determining the possible

utilizations of the site. These possible uses relate primarily to the physical aspects of the site and include

factors such as size, shape, location and utility capacity. These physical aspects are important

considerations in order to determine those uses compatible with the site.

The subject is located along Seven Points Blvd. in the southern portion of the Seven Points city limits.

Development around the subject includes older commercial and retail development. The subject is

comprised of an urban site containing ±18.109 acres. It is slightly irregular in shape with frontage along

JOB #16-252


both the eastern and western boundaries. The subject is generally level with a slight slope east.

Drainage appears adequate and no portion of the subject appears to be within the 100 year flood plain.

The subject is located within Seven Point city limits and receives all municipal utilities including sanitary

sewer.

The analysis of the site with regard to its physical aspects indicates that it could lend itself to commercial

or light industrial usage. Being located in the southern portion of Seven Points, there is adequate back-

up neighborhoods to support commercial use. Given its shape, size, topography, as well as nature of

adjacent properties, a commercial development seems the most likely use. Therefore, it is my opinion

that the highest and best use of the subject as if vacant, from a physically possible standpoint, is as a

commercial development.

Legally Permissible Legal limitations of use such as private restrictions, zoning building codes, historic

district controls, and environmental regulations which may preclude some highest and best uses. The

property is located inside of the City of Seven Points and according to the local officials, the site is zoned

B-2: General Business. The general business district is a relatively broad zoning classification and allow

for most retail and commercial uses. Thus, the subject does not appear to be adversely limited from a

legal standpoint.

Financially Feasible Based upon the established residential back up neighborhoods and location near

Cedar Creek Lake, commercial development is considered financially feasible in the immediate future. It

is my opinion that the highest and best use of the subject site, as vacant, is for commercial development.

Maximally Productive For a property to be utilized to its highest and best use, the use should produce

the highest value consistent with the market warranted rate of return for that use. The most maximally

productive use of the subject property based upon its legal, physical and financial ramifications would be

for commercial development.

Highest and Best Use as Vacant The subject neighborhood is stable with both commercial development

and single family residence in secondary neighborhoods. The land size, situs and zoning indicate a

commercial use is the most likely use of the property. More specifically, when considering the subject

location near Cedar Creek Lake, a commercial use would be the most probable use, as vacant.

Therefore, considering this information, it is my conclusion that the highest and best use of the subject

site, as vacant, is for commercial development.

JOB #16-252


As Improved

The subject is currently improved with a multi-tenant office building known as the Seven Points

Professional Center as well as a storage warehouse. The professional center is located near the SWC of

the subject site along Seven Points Blvd. The storage warehouse is located near the SEC of the site

along Wood Road. Each of these improvements were constructed in the late 1970’s/ early 80’s and are in

average condition with an adequate remaining economic life. However, when considering the highest and

best use of the overall subject it is evident that the storage warehouse is not necessary to support the day

to day use of the office building nor is the storage warehouse dependent of the office building. Each

structure is situated on opposite ends of the ±18.109 acre subject site. Therefore we have considered

each building to be an individual property.

The professional center occupied ±1.75 acres while the storage warehouse occupies ±0.8 acres. The

remaining ±15.559 acres is considered excess land. Furthermore, the excess land is divided into two

categories. We have considered ±1.819 acres (described as WD Vol. 1539 Pg. 221) that fronts along

Seven Points Blvd. to have all the necessary site characteristics to be marketed as a standalone

commercial tract. This tract is referred to as Excess Land 1. The remaining acreage of ±13.74 acres is

considered future development land is referred to as Excess Land 2. Therefore, after recognizing the

layout of the existing improvements and the large site area, we have considered the highest and best

use, as improved, is as it is improved – a mixed use development with excess land.

JOB #16-252


THE VALUATION PROCESS

Modern appraisal practice requires that an appraiser make a preliminary survey of the neighborhood and

property to:

1. Define the problem by identifying the real estate, the property rights to be valued, the date of

value, the use of the appraisal, the definition of the value and other related limiting conditions.

2. Conduct a preliminary analysis, data selection and collection of general and specific information.

The general information encompasses such matters as social, economic, government and

environmental details. The specific information involves the subject and its comparables, and

more specifically site data, improvement details, sales, listings, costs, depreciation,

income/expenses, and capitalization rates.

3. Conduct a highest and best use analysis for the land as if vacant and for the property as if

improved, if necessary.

4. Estimate the land value as it is related to its highest and best use.

5. Estimate the property value via the three traditional approaches: Sales Comparison, Income and

Cost Approaches. The subject is a free-standing office warehouse that was constructed in the

1960’s and has an estimated effective age of 20 years. It is our opinion that the Cost Approach is

the least applicable to the valuation of the subject; thus, the Sales Comparison and Income

Capitalization Approaches are most relevant for this analysis.

6. Perform a reconciliation of value indications and a final value estimate.

7. Report the defined value estimate.

The previous concepts are fundamental to appraisal procedures and also serve as rationale for the

actions appraisers perform when confronting an appraisal problem.

JOB #16-252


Analysis Breakdown

The subject is a mixed use property with excess land. The following analysis will detail a market value

conclusion for the Seven Points Professional Center, the storage warehouse and each excess land tract.

First we will present an Income Capitalization Approach as well as a Sales Comparison Approach for the

Seven Points Professional Center. Each of these approaches will be reconciled to arrive at an overall

value conclusion for the professional center. Second we will present a Sales Comparison Approach for

the storage warehouse. Following the Sales Comparison Approach will be a brief Income Capitalization

Approach based on the current rental which will support the value conclusion. Finally, there will be an

analysis of each excess land tract. We have utilized both commercial land sales as well as future

development land sales from the Cedar Creek Lake are that will be applied to each applicable excess

land tract.

The final value conclusions from each facet of the subject will be combined to arrive at an overall value

conclusion. However, in an effort to arrive at the most accurate market value “As Is” we will apply a bulk

discount that will be applied to overall value conclusion. The bulk discount is necessary to recognize the

unique factor of the subject encompassing so many property types and uses. A typical buyer of a

professional center such as the Seven Points Professional Center likely is not in need of a storage

warehouse and additional future development land. Therefore a discount is warranted. The final

discounted value will be my opinion of the market value of the subject property “As Is”.

Located on the following pages are the respective valuation analysis and conclusions for each of the

respective segment of the subject property: Seven Points Professional Center; Storage Warehouse;

Excess Land Tract 1; and Excess Land Tract 2.

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VALUATION SECTION - SEVEN POINTS PROFESSIONAL CENTER

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INCOME CAPITALIZATION APPROACH – SEVEN POINTS PROFESSIONAL CENTER

A reliable indication of value may be estimated by capitalizing the net income potential which the property

is capable of producing over its economic life, or during a typical ownership period. This approach to

value recognizes the relationship between value and a return on and of the investment, as indicated by

the market. Important factors of considerations include an assessment of overall market supply/demand

conditions, an estimate of prevailing lease rates, expense levels, and investor rate of return requirements.

A pro forma analysis has been made to estimate a reasonable potential net income for the subject

property investment. This analysis entailed estimates of the gross income which the property should

command in the marketplace under stabilized occupancy levels. Deductions for applicable operating

expenses are then made, which result in estimates of net income. Based on the results of these

projections, the applicable income attributable to real estate is selected. An indication of value is derived

by process of capitalization, as taken from the market. The overall capitalization rate utilized for

converting the net income stream into a value indication was derived from the Mortgage Equity

Technique.

The Seven Points Professional Center is a multi-tenant office building constructed in 1979 and is of both

average quality and condition. Out of the 5 suites only 2 of the suites are occupied. Furthermore, each of

these suites are occupied by co-owners of the real estate and do not provide an income stream to the

subject. Nonetheless, the subject is operating at below market occupancy levels. In an effort to determine

an applicable market rent and occupancy rates we have surveyed the local Cedar Creek Lake market as

well as similar small East Texas towns to find what available office/ retail space is leased for what type of

vacancies the subject can expect under typical conditions.

Please refer to the comparable rent data located on the following pages that represents the most

comparable data for the subject property.

COMPARABLE RENTAL # 1

FACILITY:

LOCATION: 1111 E. Tyler StreetCity: AthensCounty: HendersonState: Texas

Property Info:

Situs: InteriorNet Rentable Area 98,882 SFYear Built: 1983Effective Age: 20 YrsBuilding Description:

Condition: Average Quality: AverageLease/Rent Info $/SF/Yr $/SF/Mo

Rental $6.21 /SF $0.52 /SF

Occupancy 86.0% Space Available: 13,095 SFLease Type: Triple Net Absorption Trend: Positive

Lessor Expenses: Major structuralLessee Expenses: Taxes, insurance and CAM

CAM Charge: NonePercentage Rental: No Finish Out Allowance: NoTenant Quality: Average; Regional

Lessor:Verification: Previous Appraisal

Remarks:

Athens Village

Class C; multi-tenant shopping center.

DBRA Athens Property Management, LLC

This is the Athens Village shopping center located just east of downtown Athens. Facility includes 14suites featuring local and regional tenants Payless Shoes, Game X Change and H&R Block. Leases varyfrom $4.55/SF/Yr. to $15.30/SF/Yr. Majority of the leases are triple net with a few being modified gross.$6.21/SF/Yr. is overall average of facility.

Rent 1 16-252 - Rent Comps


FACILITY:

LOCATION: 488 W. Main StreetCity: Van County: Van Zandt State: Texas

Property Info:



Rental $4.68 /SF $0.39 /SF

Occupancy 85.0% Space Available: 0 SFLease Type: Modified Gross Absorption Trend: Stable

Lessor Expenses: Taxes, insurance & major structuralLessee Expenses: Rent and CAM

CAM Charge: VariesPercentage Rental: No Finish Out Allowance: NoTenant Quality: Average; localTerm: 2 - 5 yearsLessor:Verification: Previous Appriasal

Remarks:

Van Plaza

Class C; multi-tenant retail building.

Big and Rich Company, LLC

This is a multi-tenant retail building in Van. Largest multi-tenant building in Van with tenants including,pizza restaurant, nail salon, mattress retailer and 24 hour gym. Stabilized occupancy is 85%. Leasesrange from $4.08/SF/Yr. to $5.05/SF/Yr. Modified gross leases with each tenant reimbursing for CAMand water.



FACILITY:

LOCATION: 1120 s. Trade Days Blvd.City: CantonCounty: Van Zandt Co.State: Texas

Property Info:



Rental $4.89 /SF $0.41 /SF

Occupancy 97.0% Space Available: 0 SFLease Type: Gross Absorption Trend: Stable

Lessor Expenses: Taxes, insurance and CAM Lessee Expenses: Rent and utilities

CAM Charge: UnknownPercentage Rental: No Finish Out Allowance: NoTenant Quality: Local; regionalTerm: 2 year avg.Lessor:Verification: Previous Appraisal

Remarks:

Canton Reail Center

Class C; masonry and metal frame.

DJDJM LP

This is a multi-tenant retail center located at the NE quadrant of Trade Days Blvd and SH 243 in Canton.5 suites total with 3 largest suites occupied by Sears, a fitness center and a home goods store. 2 smallersuites are local tenants. Leases are all gross with rental rates ranging from $2.83/SF/Yr. to $7.59/SF/Yr.Overall average lease rate is $4.89/SF/YR.



FACILITY:

LOCATION: 405 South Palestine St.City: AthensCounty: HendersonState: Texas

Property Info:

Situs: Interior; dual frontageNet Rentable Area 14,703 SFYear Built: 1965Effective Age: 25 YrsBuilding Description:

Condition: Below average Quality: AverageLease/Rent Info $/SF/Yr $/SF/Mo

Rental $4.26 /SF $0.36 /SF

Occupancy 100.0% Space Available: 0 SFLease Type: Gross Absorption Trend: Stable

Lessor Expenses: Taxes, insurance, & repairs & maintenanceLessee Expenses: Rent and utilities

CAM Charge: NonePercentage Rental: No Finish Out Allowance: NoTenant Quality: LocalTerm: VariesLessor:Tenant: Confidential

Remarks:

Athens Multi-tenant

Three buildings. Varies from wood to metal frame construction. Adequate asphalt parking.

WR & Donna Maberry

This is a multi tenant commercial property that consists of three separate buildings and six tenants.Rental rate is based on overall average. Tenants include Fabricare, Stover Insurance, Prissy Pony,Holiday Cleaners, California Girl and Hank's Barber Shop. These are all local tenants. Assumed to begross lease structures.

4 16-252 - Rent Comps

RENTAL COMP MAP JOB #16-252

JOB #16-252


RENTAL LOCATION NRA (SF)YEAR BUILT

Lease StructureOCCUPANCY

RENT / SF / YEAR

Athens 1983 86.0%

1111 E. Tyler Street Triple Net

Van 1976 85.0%

488 W. Main Street Modified Gross

Canton 1975 97.0%

1120 s. Trade Days Blvd. Gross

Athens 1965 100.0%

405 South Palestine St. Gross

Min 85.0% $4.26Statistical Data Mean 92.0% $5.01

Max 100.0% $6.21

SUMMARY OF COMPARABLE RENTALS

1 98,882 SF

$4.6817,474 SF

$6.21

2

3 24,986 SF $4.89

4 14,703 SF $4.26

Market Rent Analysis and Conclusion The comparable rentals range in rent rates from $4.26/SF/Year to $6.21/SF/Year averaging

$5.01/SF/Year. This set of data is considered to be comparable to the subject property.

In comparison to the subject property, there were differences in the comparable rental properties, mostly

for size and age/condition. We have interviewed multiple commercial brokerages both from the Cedar

Creek Lake area as well as larger corporate brokerage firms from DFW active in the Cedar Creek Lake

area market regarding the leasing potential of the subject and similar facilities. Both local and large

brokerage firms confirmed leasing smaller local tenant centers such as the subject are hindered by the

income and spending power of the local participant. It was reported that outside of national net leased

facilities, lease rates above $700/month of $6.00/SF/Year. are generally tops for this market. After

considering these words as well as the market comparables, we have selected the general market

average of $5.00/SF/Year to be applicable for the valuation of the subject property.

Vacancy & Collection Loss Analysis Vacancy and collection loss is subtracted from the potential gross income in order to allow for typical

losses due to problems in collection, as well as market vacancies. As stated above, only 2 of the 5 suites

the subject offers are occupied. Each of these suites are occupied by local family medical practices.

Furthermore, each of these tenants are co-owners of the subject property and do not provide an income

stream to the subject. After driving the neighborhood, interview local market participants and conversing

with the subject ownership, it is evident that the subject’s 53% occupancy is not representative of the

overall Seven Points and Cedar Creek Lake market. It was reported by the subject ownership that even

JOB #16-252


though 3 of the 5 suites are vacant, efforts to obtain tenants has been limited with no active brokerage

firm representing the subject nor is there an online or media marketing presence.

After analyzing the market comparables as well as surveying the immediate market, it appears that there

is adequate demand in the current market, and that if priced accordingly the subject would incur typical

market vacancy. Assuming a slightly lengthened vacancy of 6 – 12 months for each 3 year term, a 10

year holding period would likely see 18 – 36 months vacancy, or generally 20%. It is our opinion that a 20 percent deduction for vacancy loss is appropriate over a 10-year ownership period.

Reimbursements from Tenants

The subject analysis of the professional center is based on gross lease structure. Thus, the subject

ownership would be responsible for all real estate expenses such as taxes, insurance and CAM.

Therefore no reimbursements from the tenants are expected.

Expense Analysis Expenses for the subject property must be determined in order to arrive at a net operating income

estimate for the subject. No actual expenses were provided for the subject. Thus, emphasis will be

placed on experience with similar properties and industry standards. Each of the applicable subject

expense categories are discussed as follows:

Taxes: This fixed expense is based on the ad valorem taxes to be incurred by the subject property each

year and was shown in the Tax Analysis discussion of the Subject Property Analysis section of this

appraisal. The subject property has an annual tax expense (professional center site only) of $7,124 per

year. This equates to $0.62/SF for the subject.

Insurance: The premium charge for the subject's insurance is estimated to be approximately $0.20/SF

of the NRA or $2,284 per year.

Management: Management fees are typically based on a percentage of the effective gross income that

a property produces. These fees include personnel (off-site) for handling expenses and debt services

payments and professional general supervision for the handling of everyday problems associated with

project operations. Based upon estimates from professional management firms, the fee can range from

2.0 percent to 7 percent of effective gross income. The subject is an older multi-tenant office building,

thus it is probable that only a minimal management effort will be required. It is our conclusion that a

stabilized management expense estimate of 3.0 percent of the effective gross income is applicable.

JOB #16-252


Common Area Maintenance: There are expenses associated with this category such as parking lot

upkeep and common utilities (water & wastewater) that should be considered. We have estimated this

expense to be $0.10/SF or $1,142 per year.

Repairs & Maintenance: This category is recognized to account for the repairs and maintenance of

everyday operation. Give the subject's original year of construction this expense is estimated to be

$0.20/SF of NRA or a total annual expense of approximately $2,284.

General & Administrative: This category is recognized to account for the typical legal and accounting

costs that are typical for real estate ownership. This expense is estimated to be $0.05/SF of NRA or a

total annual expense of approximately $571.

Reserve for Replacement: This category is recognized to account for the major short-lived construction

elements that will likely wear out or need major repair during the ownership period. Such items include

the HVAC system and parking lot. An applicable estimate of a reserve allowance is calculated by

estimating the annual average cost of the replaceable portion of the item in question. Given the

advanced age of the subject, typical repairs are likely replaced on an as needed basis, therefore, no

amount for reserves will be set aside.

Summary of Expenses: The above expenses total $16,488 per year for the subject. This equates to

$1.29/SF/Year or 32.3% of the total effective income. The total expense estimate for the subject is

considered to be reasonable and well-supported.

Capitalization Rate Development The final value indication from the Income Capitalization Approach is derived by capitalizing the subject's

net operating income into a value utilizing a capitalization rate. There are several methods available to

the appraiser in developing a capitalization rate. The amount of available data is a determining factor in

which these approaches are utilized. The following discussion addresses the direct capitalization

method.

Direct Capitalization

This method involves abstracting or developing the relationship between net operating income and price

and the sales of improved properties. Actual market transactions are confirmed and a capitalization rate

is established by interactions in the marketplace. Being one of the most recognized approaches in the

capitalization process, it is generally accurate when transactions involve properties similar to the subject.

Included in the Sales Comparison Approach section of this report is the market search, and the following

are the overall rates derived from the market data.

JOB #16-252


Sale Date OAR1 8/10/2016 6.98%2 7/1/2014 11.76%3 12/12/2013 10.04%4 7/26/2013 12.56%5 4/13/2010 13.32%

AVG 10.93%

Direct Cap Indications from Comps

These overall rates range from 6.98% to 13.32% and average 10.93%. Much of the income data in the

sales are appraiser pro-forma estimates which lessens the reliability. Thus, additional support from the

mortgage-equity technique and the debt coverage ratio will be utilized.

The Mortgage-Equity Technique

An alternative method for deriving an overall capitalization rate for this property is by use of the mortgage-

equity technique. This technique recognizes that most real estate investors do not pay cash for property

and that financing is a necessary part of real estate investments. Typical investors utilize the best

mortgage financing available to them in order to obtain a maximum yield on a rate that will provide for

debt service and a return on the equity investment sufficient to attract investment capital over a projected

term of ownership. The development of the overall rate is the weighted average of the required annual

mortgage debt service rate and the equity yield rate, adjusted to account for any equity buildup through

mortgage amortization and the possibility of depreciation or appreciation in the overall property value

during the projected investment period.

This technique is basically formed on the value of a dollar premise and the rates shown are actually

percentages. In order to complete the formula in the Akerson Format the annual constant, percent of the

loan paid-off, and the sinking fund factor must be calculated from the assumed market criteria. The

annual constant is the ratio of the annual payment to the principal amount of the mortgage loan. This can

be calculated as the annual payment required for one dollar given the stated mortgage terms.

The percent of the loan paid-off is actually the amortization of the mortgage and the pay-off of the

principle in the debt service. Given a shorter ownership period than the mortgage term only a portion of

the principle will be retired. This can be calculated by determining the amount of the remaining loan

balance at the end of the ownership and subtracting from one dollar.

The sinking fund factor is the amount that must be deposited periodically to accumulate a total fund of

one dollar in the future. It can be calculated as the monthly payment of one dollar in the future. It can be

calculated as the monthly payment required to reach a future value of one dollar at stated yield rates

times 12.

JOB #16-252


These three calculated figures are utilized in the mortgage-equity technique to determine the credit for

equity buildup and the present value of future appreciation or depreciation. The credit for equity buildup

entails the multiplication of the sinking fund factor times the percent of the loan paid-off times the loan-to-

value ratio. This is then deducted from the weighted rate because the rate earned on the equity is higher

than the rate paid on the mortgage.

The credit for appreciation must also be deducted because an investor is willing to pay more today for an

investment that is expected to increase in value in the future. This is determined by multiplying the

amount of appreciation expected over the holding period by the sinking fund factor.

The amount of anticipated appreciation is estimated by the appraiser and is based on the property type,

current market levels, overall area trends, and past market performances. The likelihood of appreciation

over the holding period is good as the subject market is showing signs of absorption and is growing

toward stabilization. There has been little growth or new construction to add to the supply; therefore, as

demand gradually increases with population trends, upward value trends should be established for the

local market. It is the appraiser's opinion that a minimal to zero appreciation rate is applicable to the

subject given its advanced age and small town market.

The equity yield requirement of 17.7 percent is estimated by adding the estimated property appreciation

plus added risk factors involved with real estate investment indications from the market, as well as

consideration to the added risks with the local office/ retail market. This is supported by loading an

annual appreciation and risk factor to the return on current investment yields in the financial markets.

From the range of investment rates, we believe that a 12.0 percent equity rate is appropriate for

properties like the subject. By deducting the credit for equity build-up and appreciation estimates, an

overall capitalization rate of 8.86 percent is derived from the mortgage-equity technique.

Debt-Coverage Ratio Method

This is an alternative method of estimating an overall capitalization rate for particular properties given

specific mortgage requirements. This is the predominant method utilized by area mortgage lenders in

generalization of cap rate selection. The debt coverage ratio is a constraining factor that is imposed by a

lender to establish the required margin between the current or estimated cash flows and the projected

annual debt service.

Debt coverage ratios are quoted by lending institutions and typically vary, as do all mortgage

components, based upon the quality and durability of the property in question, as well as the potential

borrower's financial strength. From the RealtyRates.com, an average debt coverage ratio that is

appropriate for the subject was concluded to be 1.60. The weighted average mortgage terms were

shown in the survey to have a 6.00% interest rate. The amortization period was 25 years and the loan-to-

value ratio was 80.0%. The equity yield rate was 12.0%. These criteria combine to indicate an 1.00

JOB #16-252


percent overall capitalization rate from the debt-coverage ratio method.

Please refer to the following summary of the mortgage-equity technique, as well as the debt coverage

ratio method.

Mortgage Loan to Value Ratio: 80%Mortgage Interest Rate: 6.00%Mortgage Term: 20Investment Ownership Period: 10Estimated Property Appreciation / Depreciation: 0.0%Equity Rate: 12.0%Equity Yield Requirement: (Y E ) Equals (Equity Rate (Y R ) Plus SFF) 17.70%

Debt Coverage Ratio 1.60

Annual Constant: 0.085972Percent Loan Paid-Off: 0.342328Sinking Fund Factor: 0.056984

PORTION RATE WEIGHTED RATEMortgage Loan 80% X 0.085972 0.068777Equity 20% X 0.176984 0.035397WEIGHTED RATE 0.104174

Less Credit for Equity Build-up -0.015606Basic Rate (r) 0.088568

0.000000OVERALL RATE 0.088568

ROUNDED TO: 8.86%

DCR ANNUAL CONSTANT L to V RATIO OVERALL RATE

1.60 X 0.085972 X 80% = 0.110044

ROUNDED TO: 11.00%

DEVELOPMENT OF CAPITALIZATION RATE

*** Mortgage-Equity Technique ***

Less Appreciation / Depreciation

*** Debt Coverage Ratio ***

JOB #16-252


In summary, the overall rates presented are considered indicative of the investment market for the subject

property, with a small difference between the mortgage-equity and debt coverage ratio techniques. The

capitalization rate of 8.86 percent derived from the Mortgage-Equity and 11.00 percent derived from the

debt coverage ratio technique using market rates are considered a reasonable and probable conclusion

of an overall rate for economic conditions and risk level associated with investment properties similar to

the subject. These conclusions, as well as the average indications from the RealtyRates.com report are

shown on the following tabular summary.

Summary of Overall Capitalization Rate IndicationsCap Rate Cap Rate

Market Comps - Mean 10.93% DCR Technique 8.87%Mortgage Equity 8.86% Band of Investment 9.71%Debt Coverage 11.00% Surveyed Rates 11.00%MEAN INDICATION 10.26% MEAN INDICATION 9.86%

SAY 10.00%

OAR METHOD RealtyRates.com Indications

OAR CONCLUSION

The concluded OAR conclusion of 10.00 percent for the subject is at the higher end of these indications,

though given the advanced age of the subject as well as the small town market, a conclusion from the

higher end of the range is considered justified.

For a synopsis of the Income Capitalization Approach as it applies to the subject “As Is”, the processes

utilized and the resulting value indication, please refer below:

JOB #16-252


Property Seven Points Professional Center Market Rental $5.00GBA1 11,420 SF Vac. & Collection 20.0%

Potential Gross IncomeRent Income 11,420 SF @ $5.00 /SF/Year $57,100Vacancy & Collection Loss 20.0% ($11,420)Effective Gross Income $45,680Plus:Reimbursements 11,420 SF @ $0.00 /SF/Year $0Total Annual Income $45,680

Less Expenses Taxes $0.62 /SF $7,124 Insurance $0.20 /SF $2,284 Management 3.0% $1,370 Common Area $0.10 /SF $1,142 Rep. & Maint. $0.20 /SF $2,284 Gen. & Admin $0.05 /SF $571 Reserves $0.00 /SF $0Total Expenses ($14,775)

Net Operating Income $30,905Per SF $2.71 /SF

OER 32.3%

CAPITALIZATION PROCESSCapped @ 10.00% OAR

NOI ÷ OAR = Total Value$30,905 ÷ 10.00% = $309,046

PLUS EXCESS PAD SITE Less Lease Up Discount: ($22,500)

$286,546SAY $285,000

$5,000 $24.96 /SFrounded to nearest:

Income Approach Summary

JOB #16-252


Lease Up Discount Analysis

The prior value indication “As Stabilized” is representative of the subject property as fully stabilized with

and operating at stabilized occupancy. However, we are appraising the market value “As Is” which

includes 3 vacant suites or 47% vacancy. It was reported by the current ownership that marketing effort to

achieve stabilized occupancy (80%) has been minimal. After visiting with local and regional brokerage

firms it is my opinion that will a strong marketing campaign the subject could reach stabilized occupancy

in less than two years. Given the large SF of each available space this would only need to be one unit in

year one and a second by the end of year two. Thus a lease up discount is necessary.

We have determined the subject to have a stabilized occupancy of 80% indicating 4 units will need to be

leased prior to achieving stabilized occupancy. We have applied a lease up discount assuming 2 units will

be leased within two years. The following LUD will be deducted from the “As Stabilization” indication to

arrive at a market value “As Is”.

The Lease Up Discount is summarized as follows:

SUM OF CASH FLOWS -$23,715 Deferred Maintenance $0

TOTAL LEASE UP DISCOUNT DEDUCTION -$23,715

ROUNDED TO: Nearest $2,500

SUMMARY OF LEASE UP DISCOUNT

-$22,500

Please see the LUD located on the following page.

JOB #16-252


YEAR (beginning) 1 2Ends Month of Lease 12 24SF OCCUPIED - BEG. 6,060 7,702SF ABSORBED 1,642 1,296SF OCCUPIED - END 7,702 8,998OCCUPANCY @ YEAR END 67.4% 78.8%

0 0EXPIRING SF 0 0SF @ MARKET RATE 1,642 2,938MARKET RATE $5.00 $5.10

CONTRACT RENTAL $30,300 $38,510PERCENTAGE RENTAL $0 $0RECAPTURE INCOME $0 $0MARKET RENTAL $0 $0POTENTIAL GROSS INCOME $30,300 $38,510LESS: VACANCY & COLLECTION 20.0% $0 $0EFFECTIVE GROSS INCOME $30,300 $38,510EXPENSES:Taxes $7,124 $7,338Insurance $0.20 $2,284 $2,353Management 3.0% $909 $1,155Common Area Maintenance $0.10 $1,142 $1,176Repairs & Maintenance $0.20 $2,284 $2,353General & Administrative $0.05 $571 $588Replacement Reserves $0.00 $0 $0TOTAL EXPENSES 47.2% ($14,314) ($14,962)

Net Operating Income $1.40 $15,986 $23,548Less Finish Out Cost ($2,874) ($2,287)NET CASH FLOW $13,113 $21,260LESS STABILIZED NOI ($30,905) ($30,905)NOI LOSS/PERIOD ($17,792) ($9,644)

DISCOUNT FACTOR @ 11.50% 0.896861 0.804360

PV OF FORECASTED CASH FLOWS LOSS/GAIN (15,957)$ (7,758)$

JOB #16-252


SALES COMPARISON APPROACH – SEVEN POINTS PROFESSIONAL CENTER

The Sales Comparison Approach to value is a process of comparing the prices paid for similar properties

which have sold to the property appraised. Good evidence of market value is produced by this valuation

technique as it reflects the attitudes of users and investors. The degree of comparability is measured by

the appraiser with consideration being given to such factors as time of sale, age and condition, physical

factors and financing terms.

The Sales Comparison Approach is not the only approach which utilizes comparative data. Both the Cost

and Income Capitalization approaches are predicated on market data. Building costs, rental rates,

vacancies and capitalization rates are derived from the market. Actually all three approaches are, to a

degree, interdependent. Some data from one approach may carry over to another, such as the use of a

gross income multiplier or overall rate for measurement of depreciation in the Cost Approach and the

processing of gross annual income estimated in the Income Capitalization Approach to estimate value in

the Sales Comparison Approach. In the appraisal of commercial properties, contemporary appraisal

practitioners have found that two units of comparison produce meaningful value estimates. These two

units of comparison are as follows:

Effective Gross Income Multiplier: This is the ratio relationship between the sale price of the property and

its effective gross annual income. Care must be exercised in this method as the gross income multiplier

is sensitive and errors in estimating either the multiplier or the income can distort the value estimates.

Additionally, the appraiser must know if the income reported is the potential gross income or the effective

gross income in order to apply this method properly. The EGIM has not been utilized in this appraisal.

Direct Comparison: In this method, the overall building value is estimated by comparing the price per

square foot of gross building area of the comparable properties with the subject property. Adjustments

are then made to recognize differences in time of sale, location, and physical characteristics.

Listed on the following pages are five sales of comparable retail properties. These are considered the

most comparable data available and most reflective of the subject property, "As Is".

Improved Sale No. 1

Transaction

Name Van Plaza Date of Sale 08-10-2016 Address 488 West Main Street Adjusted Sale Price $550,000 City Van Price Per SF $31.48 State Texas Zip Code 75790 Sale Status In-Contract Seller Big and Rich Company, LLC Sale Conditions Typical Buyer R & H Realty Rights Conveyed Leased Fee Tax Parcel ID # R000020213; R000020214 &

R000021576 SP/LP Ratio

Legal Description Being 2.419 acres consisting of three tracts, two tracts in the Mund Gross Survey, A-299, and the third tract being Lots 4 and 5, Block 1, Van West Addition, City of Van, Van Zandt County, Texas

Site

Land Acres 2.41900 Topography Level to Gently Sloping Land Sq Ft 105,372 Zoning C-1; Commercial Situs Interior In Flood Plain? No; 0.00% Location

Improvements and Financial Data GBA 17,474 Actual Pro-Forma NRA 17,474 Occupancy Tenancy Multi-Tenant PGI $80,834 # Stories PGI/SF $4.63 $.00 Parking Adequate; asphalt EGI $72,751 Year Built 1976 EGI/SF $4.16 $.00 Effective Age 20 Expense Ratio 47.25% Quality Average NOI $38,378 Construction Type C - Masonry NOI/SF $2.20 Building Condition Average OAR 6.98% Add’l Bldg Info EGIM 7.560

Remarks This is a contract for a multi-tenant retail building in Van. Most leases range from 3 - 5 years. Modified gross terms with average rent at $4.63/SF/Yr. Property is being purchased by an investor. Gross income is actual with expenses based on historical data as well as pro-forma estimates.

Improved Sale No. 2

Transaction

Name Habitat for Humanity Restore Date of Sale 07-01-2014 Address 2219 South Street Adjusted Sale Price $300,000 City Nacogdoches Price Per SF $20.41 State Texas Zip Code 75964 Sale Status Closed Seller Larry L. & Monica J. Ledbetter Sale Conditions Typical Buyer Habitat For Humanity Of

Nacogdoches, Inc. Rights Conveyed Fee Simple

Recording Data Vol. 4112 Pg. 200 Days on Market Tax Parcel ID 33273 SP/LP Ratio

Site Land Acres 0.82700 Topography Level to Gently Sloping Land Sq Ft 36,024 Zoning B-2; General Business Situs Double Corner In Flood Plain? No; 0.00% Location

Improvements and Financial Data GBA 14,700 Actual Pro-Forma NRA 14,700 Occupancy Tenancy Single-Tenant PGI $88,200 # Stories 1 PGI/SF $.00 $6.00 Parking open asphalt EGI $70,560 Year Built EGI/SF $.00 $4.80 Effective Age 25 Expense Ratio 50.00% Quality Average NOI $35,280 Construction Type S - Steel Frame NOI/SF $2.40 Building Condition Average OAR 11.76% Add’l Bldg Info EGIM 4.252

Remarks This is the sale of a former mattress retailer that was converted into a Habitat for Humanity restore. The property sold for $300,000 or $20.41 per SF. Operating data, vacancy and expenses are appraiser pro-forma.

Improved Sale No. 3

Transaction

Name Chandler Multi-tenant Date of Sale 12-12-2013 Address 858 State Hwy 31 East Adjusted Sale Price $148,000 City Chandler Price Per SF $48.05 State Texas Zip Code 75758 Sale Status Closed Seller Don O. Faubus and Pam Faubus Sale Conditions Typical Buyer Michael's Mark, LLC Rights Conveyed Fee Simple Recording Data Doc. #201300017708 Days on Market Tax Parcel ID #C000001695 SP/LP Ratio Legal Description Lot 2, Block 1 of the E.B. Hardee Subdivision, City of Chandler, Henderson County, Texas

Site Land Acres 0.36700 Topography Level to Gently Sloping Land Sq Ft 15,987 Zoning B-1; Commercial Situs Interior In Flood Plain? Yes; 5.00% Location

Improvements and Financial Data GBA 3,080 Actual Pro-Forma NRA 3,080 Occupancy Tenancy Multi-Tenant PGI $21,591 # Stories PGI/SF $7.01 $.00 Parking Adequate; concrete EGI $19,432 Year Built 1978 EGI/SF $6.31 $.00 Effective Age 20 Expense Ratio 23.50% Quality Average NOI $14,866 Construction Type D - Wood Frame NOI/SF $4.83 Building Condition Average OAR 10.04% Add’l Bldg Info EGIM 7.616

Remarks This is a multi-tenant commercial building that is partitioned into three equal suites; one of which is owner occupied. The two tenants are on a short term lease. The owner operates his space as a vet clinic and the property is under contract to convey to another veterinarian. Property was listed for sale by owner at the time of contract and was never aggressively marketed. All FF&E and business assets were reportedly purchased separately and this represents a real estate only transaction. Income is based on actual rental rates at time of sale and expenses are appraiser pro-forma.

Improved Sale No. 4

Transaction

Name Hope Center Date of Sale 07-26-2013 Address 1115 W. 2nd Avenue Adjusted Sale Price $245,000 City Corsicana Price Per SF $61.25 State Texas Zip Code 75109 Sale Status Closed Seller Dr. James G. Price Sale Conditions Typical Buyer Pro-Life of Navarro County Rights Conveyed Fee Simple Recording Data Doc. #6231 Days on Market Tax Parcel ID #35496 SP/LP Ratio Legal Description Lot A, Block 401, Corsicana, Navarro County, Texas

Site Land Acres 0.31300 Topography Level Land Sq Ft 13,634 Zoning GR; General Retail Situs Corner In Flood Plain? No; 0.00% Location

Improvements and Financial Data GBA 4,000 Actual Pro-Forma NRA 4,000 Occupancy Tenancy Single-Tenant PGI $36,000 # Stories PGI/SF $.00 $9.00 Parking Adequate; asphalt EGI $32,400 Year Built 1992 EGI/SF $.00 $8.10 Effective Age 15 Expense Ratio 5.00% Quality Average NOI $30,780 Construction Type C - Masonry NOI/SF $7.70 Building Condition Average OAR 12.56% Add’l Bldg Info EGIM 7.562

Remarks This is a medical office building located just west of downtown Corsicana at the SEC of 2nd Avenue and 21st Street. Property has historically operated as a urology medical office and purchased to be occupied by the Hope Center of Navarro County, a pre-natural and parenting office. Fee simple purchase, financial operating data is appraiser pro-forma.

Improved Sale No. 5

Transaction

Name Seven Points Center Date of Sale 04-13-2010 Address 430 S. Seven Points Drive Adjusted Sale Price $110,000 City Seven Points Price Per SF $18.02 State Texas Zip Code 75143 Sale Status Closed Seller Bayview Loan Servicing, LLC Sale Conditions Typical Buyer Ali Jafar Rights Conveyed Fee Simple Recording Data Doc. #2010-00005957 Days on Market Tax Parcel ID #C000000594 SP/LP Ratio Legal Description 0.81 acres out of the D. Muckleroy Survey, A-503.

Site Land Acres 0.81000 Topography Level Land Sq Ft 35,284 Zoning Commercial; Situs Interior In Flood Plain? No; 0.00% Location

Improvements and Financial Data GBA 6,104 Actual Pro-Forma NRA 6,104 Occupancy Tenancy Multi-Tenant PGI $24,416 # Stories PGI/SF $.00 $4.00 Parking Adequate; asphalt EGI $19,533 Year Built 1970 EGI/SF $.00 $3.20 Effective Age 35 Expense Ratio 25.00% Quality Average NOI $14,650 Construction Type C - Masonry NOI/SF $2.40 Building Condition Below Average OAR 13.32% Add’l Bldg Info EGIM 5.632

Remarks This is the purchase of a multi-tenant retail center in Seven Points. Tenants include a local cleaners and a book store. Property appeared to be in below average condition. No income was provided. Financial operating data is appraiser pro-forma.

IMPROVED SALES MAP JOB #16-252

JOB #16-252


SALE #

FACILITY DATE # ACRES GBA (SF) Yr. Blt. Eff. Age

OAR PRICE/SF

Van Plaza 1976

Van 20 Yrs

Habitat for Humanity Restore

Circa 1980

Nacogdoches 25 Yrs

Chandler Multi-tenant 1978

Chandler 20 Yrs

Hope Center 1992

Corsicana 15 Yrs

Seven Points Center 1970

Seven Points 35 YrsMIN. 7.0% $18.02MEAN 11.9% $36.93MAX 13.3% $61.25

7.0%

11.8%

10.0%

12.6%

13.3%

17,474 SF

6,104 SF

4,000 SF

3,080 SF

14,700 SF

Statistical Indicators

$18.02

$61.254 7/26/2013

0.8105 4/13/2010

0.313

SUMMARY OF COMPARABLE SALES

$31.48

$20.410.827

$48.053

2

0.36712/12/2013

1 2.4198/10/2016

7/1/2014

The sales presented above are considered the best market data available in determining a value

indication for the subject property. Facilities similar to the subject are purchased for both owner

occupancy and investment, as represented by the comparables which represent both types of ownership.

In most cases, either actual income & expense data or pro-forma estimates based on current market data

have been reported for each of the comparables to determine the necessary financial indicators.

Price Per S.F. Analysis

There were five improved sales included in this section of the report. These comparables are considered

to be the best comparisons for the subject, based primarily on age, size, date of sale, and quality criteria.

They ranged in sale price per square foot from $18.02 to $61.25. There were differences among the

properties that must be accounted for when direct comparisons are made to the subject property. These

categories are summarized as follows:

Property Rights - This adjustment category is required to account for factors such as leased fee rights as

opposed to fee simple property rights. Properties that are purchased as investment, especially long term

single tenant leases have different motivating factors than traditional fee simple interest. Each of the

comparable sales are small town retail centers with local tenants typically ranging from 1 – 3 year leases.

Given the lack of strength in the local tenancy no adjustments for property rights has been made.

Conditions of Sale - Conditions of sale refers to seller/buyer motivation, and/or abnormal circumstances

surrounding the transaction which influenced the sales price. Examples of such conditions might include

a forced sale, a sale between related parties, or a sale resulting from the exercise of an option. Each of

JOB #16-252


the comparable sales appears to represent an arm’s length market transaction and no adjustments for

conditions of sale have been made.

Financing Terms - This element of comparison allows the appraiser to adjust a sale for any financing

concession which may have affected the sale price. All of the sales were considered cash equivalent,

therefore no adjustments were required.

Market Conditions - The date of sale is considered applicable in order to assess the overall trend and

changes in price levels in the area caused by a lapse in time. The market activity in the subject area was

strong in the 2005 to 2008 market period, but tapered off in the recessionary period between 2009 and

2012. After stabilizing in 2013 it does appear that land value appreciation trends are slightly increasing at

the present time. The following graph depicts our concluded market condition trends and the

corresponding annual percentage adjustments:

-2.5%

0.0% 0.0%

2.5% 2.5%

-3.0%

-2.0%

-1.0%

0.0%

1.0%

2.0%

3.0%

% Adj/Yr - Priorto

% Adj/Yr - Priorto

% Adj/Yr - Priorto

% Adj/Yr - Priorto

% Adj/Yr - Since

1-Jan-12 1-Jan-14 1-Jan-15 1-Jan-16 1-Jan-16

Market Condition Adjustments


Please refer to the following tabular calculation summary of the market conditions adjustments that apply

to this analysis.

JOB #16-252


Comp 1 2 3 4 5

Date 8/10/2016 7/1/2014 12/12/2013 7/26/2013 4/13/2010Current 8/10/2016 8/10/2016 8/10/2016 8/10/2016 8/10/2016#Days 0 759 958 1094 2277

Days allocated as follow s:

% Adj/Yr - Prior t 1-Jan-12 -2.5% 0 0 0 0 618

% Adj/Yr - Prior t 1-Jan-14 0.0% 0 0 19 155 720

% Adj/Yr - Prior t 1-Jan-15 0.0% 0 180 360 360 360

% Adj/Yr - Prior t 1-Jan-16 2.5% 0 360 360 360 360

% Adj/Yr - Since 1-Jan-16 2.5% 0 219 219 219 219

Net Time Adj. 0.0% 4.0% 4.0% 4.0% -0.3%

Time Adjustment

Location - Location is an important element to value. Major locational considerations include the general

character and trend of surrounding land usage in the neighborhood area. As previously discussed, the

subject is located in a small town just off Cedar Creek Lake. Comparable Sales 2 & 4 are located in

Nacogdoches and Corsicana. These are both larger towns with larger population centers, stronger

residential back up neighborhoods and greater investment appeal. In an effort to recognize the superior

location we have applied a downward adjustment of 10 percent to Comparable Sales 2 & 4.

Size The size adjustment is based on the fact that larger properties require larger total dollar amounts

than smaller size properties, assuming an equal price per unit. This larger dollar amount usually requires

larger down payments and therefore, limits the demand which might be available for the larger properties.

The comparables range in size from 3,080 SF to 17,474 SF while the subject has a GBA of ±11,420 SF.

The following table depicts our concluded size break categories and the corresponding percentage

adjustments that apply for each in comparison to the subject size category (between 7,500 SF and

15,000 SF):

Subject Size

Size Adjustments - Less Than Greater Than

Size Category 7,500 SF 7,500 SF 15,000 SF 15,000 SF 30,000 SF 30,000 SF

Percentage Adj. -10.0% 20.0%

▼

10.0%

11,420 SF

Betw een Betw een

0.0%

Age/ Condition – The Seven Points Professional Center was constructed in 1979 and has an estimated

effective age of 30 years. Each of the comparable sales were constructed in the same time period with

the exception of Comparable Sale 4. Comparable Sale 4 is a medical office building constructed in 1992.

This building has the highest unadjusted sales price/SF likely due to its superior age/ condition. For this

reason we have applied a downward adjustment of 15 percent to Comparable Sale 4.

JOB #16-252


Economics – The economics adjustments is reserved to recognized occupancy levels, market rents,

tenant quality or any other income factors typically associated with office/ retail center properties.

Comparable Sale 5 is located just north of the subject in Seven Points. This center is very comparable to

the subject though the analysis is based on the subject being stabilized. At the time of sale this property

was reported 50% occupied. Therefore we have applied a slight upward adjustment of 20 percent to

recognize the below market occupancy level of Comparable Sale 5.

Other - The other adjustment category is applicable to account for any unusual or atypical factors that

have yet to be considered. No other adjustments have been made.

Please refer to the following tabular summary of the office/ retail center sales, and the applicable

adjustment grid applying the previously discussed adjustments.

JOB #16-252


Comp # 1 2 3 4 5Date of Sale 8/10/2016 7/1/2014 12/12/2013 7/26/2013 4/13/2010Location Van Nacogdoches Chandler Corsicana Seven PointsYear Built 1976 Circa 1980 1978 1992 1970Land Area: 2.419 Ac. 0.827 Ac. 0.367 Ac. 0.313 Ac. 0.810 Ac.Size (SF) 17,474 SF 14,700 SF 3,080 SF 4,000 SF 6,104 SFEff. Age: 30 Yrs 20 Yrs 25 Yrs 20 Yrs 15 Yrs 35 Yrs$/SF $31.48 $20.41 $48.05 $61.25 $18.02Adjusted For:

Property RightsConditions of SaleFinancing Term

Market Conditions 4.0% 4.0% 4.0% -0.3%

Adjusted $/SF $31.48 $21.23 $49.98 $63.71 $17.97Location -10.0% -10.0%

Size 10.0% -10.0% -10.0% -10.0%Age/Condition -15.0%Quality

Economics 20.0%

OtherNet Adjustment 10.0% -10.0% -10.0% -35.0% 10.0%

Adjusted $/SF $34.63 $19.11 $44.98 $41.41 $19.77Comparability Ratio 25% 15% 20% 20% 20%

STATISTICAL INDICATORS OF ADJUSTED VALUE INDICATIONSRange $19.11 to $44.98Mean $31.98Weighted Average Indication $32.76

$/SF $32.00

VALUE COMPUTATION# SF x $/SF = Total Value

11,420 x $32.00 = $365,440($22,500)$342,940

$5,000 $345,000

IMPROVED SALES ADJUSTMENT GRID

ROUNDED TO NEAREST:

VALUE CONCLUSION

This data is considered to be good indicators for the subject’s current market. The adjusted indicated

values ranged from $19.11/SF to $44.98/SF and offered a mean indication of $31.98/SF. Referencing

the comparability ratio it can be seen that most emphasis has been placed on Comparable Sale 1. The

JOB #16-252


weighted overall average indication of $32.72/SF is slightly higher than the overall mean indication,

though is reasonable.

As shown in the previous Income Capitalization Approach, the value indication above is representative of

the subject “As Stabilized”. In an effort to recognize the current below market occupancy we will use the

same lease up discount of approximately $22,500 to arrive at the value indication of the subject “As Is”.

Therefore, it is my opinion that a value indication of $345,000, as rounded, is appropriate for the subject

Seven Point Professional Center portion of the subject property, “As Is”.

JOB #16-252


VALUATION SECTION – STORAGE WAREHOUSE

JOB #16-252


SALES COMPARISON APPROACH – STORAGE WAREHOUSE

The following is a Sales Comparison analysis of the subject’s storage warehouse located at the SEC of

the subject site. It was determined in the Highest and Best Use analysis that the storage warehouse is not

necessary to support the professional center nor is the professional center dependent on the storage

warehouse. The storage warehouse site has all the necessary characteristics to operate as a standalone

site and has been value separately.

Listed on the following pages are five sales of similar comparable storage warehouse properties. These

are considered the most comparable data available and most reflective of the storage warehouse, "As Is".

Improved Sale No. 1

Transaction

Name R&B Metal Structures Date of Sale 01-12-2016 Address 13046 CR 3311 Adjusted Sale Price $230,000 City Tyler Price Per SF $25.56 State Texas Zip Code 75708 Sale Status Closed Seller R & B Properties Of Central GA,

LLC Sale Conditions Typical

Buyer G4 Enterprise, LTD Rights Conveyed Fee Simple Recording Data 20160100008246 Days on Market 334 Tax Parcel ID 105861; 107855 SP/LP Ratio 92%

Site Land Acres 6.18200 Topography Level to Gently Sloping Land Sq Ft 269,288 Zoning None; Not Zoned Situs Interior In Flood Plain? No; 0.00% Location E/L; just N of I-20

Improvements and Financial Data GBA 9,000 Actual Pro-Forma NRA 9,000 Occupancy Tenancy Single-Tenant PGI $45,000 # Stories 1 PGI/SF $.00 $5.00 Parking Gravel Paved EGI $40,500 Year Built 1970 EGI/SF $.00 $4.50 Effective Age 15 Expense Ratio 35.00% Quality Average NOI $26,325 Construction Type S - Steel Frame NOI/SF $2.92 Building Condition Average OAR 11.45% Add’l Bldg Info EGIM 5.679

Remarks This is a 9,000 SF light industrial building located at 13046 CR 3311 (Lawhorn Ave.), just north of I-20 northeast of Tyler. There are two tracts that make up a combined 6.182 acres that are bisected by the railroad near the southeast corner of the property. It had been owner occupied as R&B Metal Structures which manufactured portable carport structures. The property recently had $50,000 of new electrical put in as well as new siding on the building. Had a small office of unknown size, estimated at 500 SF. It sold for 92% of asking price after 334 DOM. Purchased for owner occupancy. Income & expense info is appraiser pro-forma based on $5.00/SF, gross.

Improved Sale No. 2

Transaction

Name N. Main Office Warehouse Date of Sale 09-02-2015 Address 2612 N Main Adjusted Sale Price $140,000 City Lindale Price Per SF $25.45 State Texas Zip Code 75771 Sale Status Closed Seller Citizens 1st Bank Sale Conditions Typical Buyer Lindale A & A Investments Rights Conveyed Fee Simple Recording Data #20150100043845 Days on Market 106 Tax Parcel ID 110161, 114035 SP/LP Ratio

Site Land Acres 1.04900 Topography Level to Sloping Land Sq Ft 45,694 Zoning C; Commercial Situs Interior In Flood Plain? No; 0.00% Location

Improvements and Financial Data GBA 5,500 Actual Pro-Forma NRA 5,500 Occupancy Tenancy Single-Tenant PGI $27,500 # Stories 1 PGI/SF $.00 $5.00 Parking Gravel Paved EGI $24,750 Year Built 1995 EGI/SF $.00 $4.50 Effective Age Expense Ratio 30.00% Quality Average NOI $17,325 Construction Type S - Steel Frame NOI/SF $3.15 Building Condition Average OAR 12.37% Add’l Bldg Info EGIM 5.657

Remarks This is 5,500 SF office warehouse located at 2612 N Main Street in Lindale. The building is a class S metal exterior with metal double pitch roof. The office area is 4,200 SF and is completely heated and cooled. The remaining 1,300 SF is used as storage. The site does not have perimeter fencing. The property sold for $140,000 after 106 DOM.

Improved Sale No. 3

Transaction

Name Park Row Office Warehouse Date of Sale 06-02-2015 Address 159 Park Row Adjusted Sale Price $143,000 City Van Price Per SF $31.78 State Texas Zip Code 75790 Sale Status Closed Seller Ray & Judy Glasscock Sale Conditions Typical Buyer Verona I20 Van, LLC Rights Conveyed Fee Simple Recording Data #005037 Days on Market 85 Tax Parcel ID 000055042 SP/LP Ratio

Site Land Acres 1.00000 Topography Level to Sloping Land Sq Ft 43,560 Zoning None; Not Zoned Situs Interior In Flood Plain? No; 0.00% Location

Improvements and Financial Data GBA 4,500 Actual Pro-Forma NRA 4,500 Occupancy Tenancy Single-Tenant PGI $22,500 # Stories 1 PGI/SF $.00 $5.00 Parking Gravel Paved EGI $18,000 Year Built 2002 EGI/SF $.00 $4.00 Effective Age 14 Expense Ratio 35.00% Quality Fair NOI $11,700 Construction Type S - Steel Frame NOI/SF $2.60 Building Condition Average OAR 8.18% Add’l Bldg Info EGIM 7.944

Remarks This is 4,500 SF office warehouse building located at 159 Park Row in Van. The building is a class S with metal exterior and metal double pitch roof. The building has 500 SF of partitioned office space that is heated and cooled by a window unit. The property does not have any perimeter fencing. The property sold for $143,000 after 85 DOM.

Improved Sale No. 4

Transaction

Name Gladewater Office Warehouse Date of Sale 08-08-2014 Address 124 S. Loop 485 Adjusted Sale Price $85,000 City Gladewater Price Per SF $25.00 State Texas Zip Code 75647 Sale Status Closed Seller SKP Investments, LLC Sale Conditions Typical Buyer Big Sandy Land & Cattle, LLC Rights Conveyed Fee Simple Recording Data #201413257 Days on Market 22 Tax Parcel ID 15083 SP/LP Ratio 86%

Site Land Acres 2.26000 Topography Level Land Sq Ft 98,446 Zoning SF-5; Single Family- 5 Situs Interior In Flood Plain? Yes; 0.00% Location

Improvements and Financial Data GBA 3,400 Actual Pro-Forma NRA 3,400 Occupancy Tenancy Single-Tenant PGI $12,800 # Stories 1 PGI/SF $.00 $3.76 Parking Open concrete EGI $10,240 Year Built 1990 EGI/SF $.00 $3.01 Effective Age 15 Expense Ratio 35.00% Quality Average NOI $6,656 Construction Type S - Steel Frame NOI/SF $1.96 Building Condition Average OAR 7.83% Add’l Bldg Info EGIM 8.301

Remarks This is a single tenant office warehouse located along the N/L of Loop 485 just east of US Hwy 271 in the southern portion of Gladewater. According to the listing agent, property was reported to have 200 SF (6% of GBA) of good office finish. The property is currently zoned 'Single Family - 5'. According to a rep of the City of Gladewater, the site was zoned prior to the loop being added (thus grandfathered) and a change in zoning would likely be granted if needed. The entire site appears to be located within the floodway. The site has chain link perimeter fencing. Original list price of $99,000 indicates a SP/LP of 86%. DOM = 22.

Improved Sale No. 5

Transaction

Name Greenbriar Road Warehouse Date of Sale 01-14-2014 Address 12225 CR 1125 Adjusted Sale Price $80,000 City Tyler Price Per SF $33.33 State Texas Zip Code 75709 Sale Status Closed Seller Manuel Macias Hernandez Sale Conditions Typical Buyer Raymond & Jessica Reilly Rights Conveyed Fee Simple Recording Data #2014-00003444 Days on Market 120 Tax Parcel ID 194293 SP/LP Ratio 80%

Site Land Acres 0.96300 Topography Level to Sloping Land Sq Ft 41,948 Zoning None; Not Zoned Situs Interior In Flood Plain? No; 0.00% Location

Improvements and Financial Data GBA 2,400 Actual Pro-Forma NRA 2,400 Occupancy Tenancy Single-Tenant PGI $10,800 # Stories 1 PGI/SF $.00 $4.50 Parking Gravel Paved EGI $9,720 Year Built 2010 EGI/SF $.00 $4.05 Effective Age 2 Expense Ratio 20.00% Quality Average NOI $7,776 Construction Type S - Steel Frame NOI/SF $3.24 Building Condition Above Average OAR 9.72% Add’l Bldg Info EGIM 8.230

Remarks This is a vacant warehouse building located along the SE/L of CR 1125 (Greenbriar Road) southwest of Tyler. Property was on the market for 120 days and had an original list price of $99,900 which was the asking price at the time of sale. Property was vacant at the time of sale and income and expense information are appraiser pro-forma estimates. The office SF is estimated at 20%.

WAREHOUSE SALES MAP JOB #16-252

JOB #16-252


SALE #

FACILITY DATE # ACRES GBA (SF) Yr. Blt. Eff. Age

OAR PRICE/SF

R&B Metal Structures 1970

Tyler 15 Yrs

N. Main Office Warehouse Circa 1980

Lindale

Park Row Office Warehouse

2002

Van 14 Yrs

Gladewater Office Warehouse

1990

Gladewater 15 Yrs

Greenbriar Road Warehouse

2010

Tyler 2 YrsMIN. 7.8% $25.00MEAN 9.5% $28.89MAX 12.4% $33.33

11.5%

12.4%

8.2%

7.8%

9.7%

9,000 SF

2,400 SF

3,400 SF

4,500 SF

5,500 SF


$33.33

$25.004 8/8/2014

0.9635 1/14/2014

2.260

SUMMARY OF COMPARABLE SALES

$25.56

$25.451.049

$31.783

2

1.0006/2/2015

1 6.1821/12/2016

9/2/2015

The sales presented above are considered the best market data available in determining a value

indication for the subject property. Facilities similar to the subject are purchased for both owner

occupancy and investment, as represented by the comparables which represent both types of ownership.

In most cases, either actual income & expense data or pro-forma estimates based on current market data

have been reported for each of the comparables to determine the necessary financial indicators.

Price Per S.F. Analysis

There were five improved sales included in this section of the report. These comparables are considered

to be the best comparisons for the subject, based primarily on age, size, date of sale, and quality criteria.

They ranged in sale price per square foot from $25.00 to $33.33. There were differences among the

properties that must be accounted for when direct comparisons are made to the subject property. These

categories are summarized as follows:

Property Rights - This adjustment category is required to account for factors such as leased fee rights as

opposed to fee simple property rights. Properties that are purchased as investment, especially long term

single tenant leases have different motivating factors than traditional fee simple interest. Each of the

comparable sales appears to represent fee simple ownership and no adjustments have been made.

Conditions of Sale - Conditions of sale refers to seller/buyer motivation, and/or abnormal circumstances

surrounding the transaction which influenced the sales price. Examples of such conditions might include

a forced sale, a sale between related parties, or a sale resulting from the exercise of an option. Each of

JOB #16-252


the comparable sales appears to represent an arm’s length market transaction and no adjustments for

conditions of sale have been made.

Financing Terms - This element of comparison allows the appraiser to adjust a sale for any financing

concession which may have affected the sale price. All of the sales were considered cash equivalent,

therefore no adjustments were required.

Market Conditions - The date of sale is considered applicable in order to assess the overall trend and






-2.5%

0.0% 0.0%

2.5% 2.5%

-3.0%

-2.0%

-1.0%

0.0%

1.0%

2.0%

3.0%

% Adj/Yr - Priorto

% Adj/Yr - Priorto

% Adj/Yr - Priorto

% Adj/Yr - Priorto

% Adj/Yr - Since

1-Jan-13 1-Jan-14 1-Jan-15 1-Jan-16 1-Jan-16




to this analysis.

JOB #16-252


Comp 1 2 3 4 5

Date 1/12/2016 9/2/2015 6/2/2015 8/8/2014 1/14/2014Current 8/10/2016 8/10/2016 8/10/2016 8/10/2016 8/10/2016#Days 208 338 428 722 926


% Adj/Yr - Prior t 1-Jan-13 -2.5% 0 0 0 0 0

% Adj/Yr - Prior t 1-Jan-14 0.0% 0 0 0 0 0

% Adj/Yr - Prior t 1-Jan-15 0.0% 0 0 0 143 347

% Adj/Yr - Prior t 1-Jan-16 2.5% 0 119 209 360 360

% Adj/Yr - Since 1-Jan-16 2.5% 208 219 219 219 219

Net Time Adj. 1.4% 2.3% 3.0% 4.0% 4.0%

Time Adjustment

Location - Location is an important element to value. Major locational considerations include the general

character and trend of surrounding land usage in the neighborhood area. As previously discussed, the

subject is located in a small town just off Cedar Creek Lake. Furthermore, the storage warehouse is a

secondary location off the main highway with the only exposure being along a secondary street. Each of

the comparable sales are located in larger markets along well-traveled thoroughfares. The inferior

location of the subject is considered to be the most significant adverse characteristics of the storage

warehouse. In an effort to recognize the inferior location of the storage warehouse we have applied a

considerable downward adjustment of 15 percent to each comparable sale.

Size The size adjustment is based on the fact that larger properties require larger total dollar amounts

than smaller size properties, assuming an equal price per unit. This larger dollar amount usually requires

larger down payments and therefore, limits the demand which might be available for the larger properties.

The comparables range in size from 2,400 SF to 9,000 SF while the subject’s storage warehouse has a

GBA of ±6,415 SF. The following table depicts our concluded size break categories and the

corresponding percentage adjustments that apply for each in comparison to the subject size category

(between 4,000 SF and 8,000 SF):

Subject Size


Size Category 2,000 SF 2,000 SF 4,000 SF 4,000 SF 8,000 SF 8,000 SF


▼

6,415 SF

Betw een Betw een

-10.0% 0.0%

Age/ Condition – The subject’s storage building was constructed circa 1980 and has an estimate effective

age of 30 years. Comparable sales 3 & 5 were constructed in 2002 & 2010. Each of these sales have

been adjusted downwards for superior age and condition accordingly.

JOB #16-252


Quality – The quality adjustment is reserved for any outstanding building or site characteristics that may

be either an enhancement or detriment to the subject or comparable sales. The subject is 100%

warehouse area with no HVAC. Typically, storage warehouses can command a higher price per unit

when they feature office space or greater amount of HVAC. Each of the comparable sales has HVAC

office area and have been adjusted downwards 10 percent. Comparable Sales 1 & 2 have a greater

amount of %GBA being HVAC office space that most properties and have further been adjusted

downwards a total of 15 percent.

Land to Building Ratio – The land to building ratio adjustment recognizes properties that have larger

acreage allowing for increased outdoor storage, future expansion or even selling the excess land. The

subject’s storage warehouse is situated on a ±0.8 acre site which is fairly small though supportive my

most of the market comparables. However, Comparable Sales 1 & 4 have considerably larger sites and

benefit from the added land area. In an effort to recognize the superior LB ratios we have applied a 15

percent downward adjustment to Comparable Sale 1 and a 5 percent downward adjustment to

Comparable Sale 4.

Other - The other adjustment category is applicable to account for any unusual or atypical factors that

have yet to be considered. No other adjustments have been made.

Please refer to the following tabular summary of the storage warehouse sales, and the applicable

adjustment grid applying the previously discussed adjustments.

JOB #16-252


Comp # 1 2 3 4 5Date of Sale 1/12/2016 9/2/2015 6/2/2015 8/8/2014 1/14/2014Location Tyler Lindale Van Gladewater TylerYear Built 1970 Circa 1980 2002 1990 2010Land Area: 6.182 Ac. 1.049 Ac. 1.000 Ac. 2.260 Ac. 0.963 Ac.Size (SF) 9,000 SF 5,500 SF 4,500 SF 3,400 SF 2,400 SFEff. Age: 30 Yrs 15 Yrs 20 Yrs 14 Yrs 15 Yrs 2 Yrs$/SF $25.56 $25.45 $31.78 $25.00 $33.33Adjusted For:

Property RightsConditions of SaleFinancing Term

Market Conditions 1.4% 2.3% 3.0% 4.0% 4.0%

Adjusted $/SF $25.93 $26.05 $32.72 $26.01 $34.67Location -15.0% -15.0% -15.0% -15.0% -15.0%

Size 10.0% -10.0% -10.0%Age/Condition -15.0% -25.0%Quality -15.0% -15.0% -10.0% -10.0% -10.0%

LB Ratio -15.0% -5.0%

OtherNet Adjustment -35.0% -30.0% -40.0% -40.0% -60.0%

Adjusted $/SF $16.85 $18.23 $19.63 $15.60 $13.87Comparability Ratio 15% 25% 10% 25% 25%

STATISTICAL INDICATORS OF ADJUSTED VALUE INDICATIONSRange $13.87 to $19.63Mean $16.84Weighted Average Indication $16.42

$/SF $16.50

VALUE COMPUTATION# SF x $/SF = Total Value6,415 x $16.50 = $105,848

$5,000 $105,000

IMPROVED SALES ADJUSTMENT GRID

VALUE CONCLUSION

ROUNDED TO NEAREST:

This data is considered to be good indicators for the subject’s current market. The adjusted indicated

values ranged from $13.87/SF to $19.63/SF and offered a mean indication of $16.84/SF. Referencing

the comparability ratio it can be seen that most emphasis has been placed on Comparable Sales 2, 4 & 5.

The weighted overall average indication of $16.42/SF is slightly lower than the overall mean indication,

JOB #16-252


though is reasonable. Therefore, it is my opinion that a value indication of $16.50/SF or $105,000, as

rounded, is appropriate for the subject storage warehouse, “As Is”.

Storage Warehouse Income Capitalization Analysis In an effort to support the above indicated Sales Comparison value conclusion we have analyzed the

current income of the subject’s storage warehouse. Currently the storage warehouse is leased to a family

that is traveling the nation for a year and using the warehouse for temporary storage. It was reported by

the subject ownership that the warehouse building leases for $1,200/month or $2.25/SF/Year. The rent

level provided is similar to most warehouse facilities in smaller markets and will be used in the following

analysis.

We have estimated an effective gross income by deducing a slight amount of vacancy from the gross

income provided. Expense estimates will be deducted from the effective gross income to arrive at a net

operating income (NOI). The expense estimates shown are based historical knowledge of similar

facilities. The NOI will be divided by an overall rate that has been determined by the above referenced

market comparables as well as national and market averages. Please see the following Income

Capitalization schedule below outlining the supportive value indication of the storage warehouse.

JOB #16-252


Property Warehouse Building Market Rental $2.25GBA1 6,415 SF Vac. & Collection 10.0%

Potential Gross IncomeRent Income 6,415 SF @ $2.25 /SF/Year $14,434Vacancy & Collection Loss 10.0% ($1,443)Effective Gross Income $12,990Plus:Reimbursements 6,415 SF @ $0.00 /SF/Year $0Total Annual Income $12,990

Less Expenses Taxes $0.15 /SF $966 Insurance $0.10 /SF $642 Management 0.0% $0 Common Area $0.05 /SF $321 Rep. & Maint. $0.10 /SF $642 Gen. & Admin $0.05 /SF $321 Reserves $0.00 /SF $0Total Expenses ($2,891)

Net Operating Income $10,100Per SF $1.57 /SF

OER 22.3%

CAPITALIZATION PROCESSCapped @ 9.50% OAR

NOI ÷ OAR = Total Value$10,100 ÷ 9.50% = $106,311

PLUS EXCESS PAD SITE $0

$106,311SAY $105,000

$5,000 $16.37 /SF

Income Approach Summary

rounded to nearest:

JOB #16-252


VALUATION SECTION – EXCESS LAND PARCELS

JOB #16-252


Excess Land 1 Analysis

As stated in the subject analysis, the subject is a mixed use property with excess land. We have

previously detailed the existing improvements and their respective support sites. However, the subject

also includes ±15.559 acres of excess land. The excess land has been divided into two units. We have

determined that an area of ±1.819 acres along Seven Points Blvd. encompasses all the necessary

attributes to be marketed as a standalone commercial site. This site will be analyzed using comparable

commercial land sales from the Cedar Creek Lake area. The remaining ±13.74 acres is considered future

development land and will be analyzed using comparable larger acreage future development land tracts.

Located on the following pages is a write up of comparable land sales utilized in analyzing the ±1.819

acre Excess Land 1 tract.

LAND SALE NO. 1

PROPERTY IDENTIFICATION Address 1701 South 3rd Street County Kaufman City Mabank State Texas Tax Parcel No. #C000123088 Legal Description 4.0 acres out of the G.T. Walters Survey A-794. TRANSACTION DATA Date of Sale 03-10-2015 DOM Sale Status Closed SP/LP Ratio Seller Susan Wheat Buyer JW Mabank, XIII Ltd. Recording Info Doc. #201500003174 Conditions of Sale Typical Consideration ‘ Sale Price $335,000 Adjustments $ $0 Adjusted Sale Price $335,000 Per Unit Price

$/SF $/Acre

‘ $1.92 $83,750

PHYSICAL DATA # Acres 4.00000 # SF 174,240

Access Average Situs Interior Shape Rectangular Topography Level In Flood Plain? No 0.00% Zoning Code Commercial PROPERTY REMARKS This is the purchase of a commercial site located along the E/L of South 3rd Street (SH 198) in between Mabank and Gun Barrel City. Tract was purchased to be improved with a Tractor Supply.

LAND SALE NO. 2

PROPERTY IDENTIFICATION Address 1510 S 3rd Street County Henderson City Mabank State Texas Tax Parcel No. 000000916 TRANSACTION DATA Date of Sale 01-22-2015 DOM 195 Sale Status Closed SP/LP Ratio 90% Seller Charles M. Ladd Buyer Jerry & Darlyn Boyd Recording Info #00001026 Conditions of Sale Typical Consideration ‘ Sale Price $85,000 Adjustments $ $0 Adjusted Sale Price $85,000 Per Unit Price

$/SF $/Acre

‘ $.95 $41,463


Access Average Situs Interior Shape Irregular Topography Level to Gently Sloping In Flood Plain? No 0.00% Zoning Code C Commercial PROPERTY REMARKS This is a 2.05 acre property located on the W/L of Hwy 198 S of Mabank. The property had two older frame buildings with no contributory value to the property that were razed after the sale. The property has level to gently sloping topography. The property sold for $85,000 after 195 DOM with an original list price of $94,500 with a SP/LP ratio of 90%.

LAND SALE NO. 3

PROPERTY IDENTIFICATION Address 834 East Main Street County Henderson City Gun Barrel City State Texas Tax Parcel No. #R000045779 Legal Description Lot 1 & 2, Block A of the Clyde Hammer Subdivision. TRANSACTION DATA Date of Sale 08-27-2014 DOM Sale Status Closed SP/LP Ratio Seller Celebration Community Church Buyer Celebration on the Lake Church Recording Info Doc. #201400011465 Conditions of Sale Typical Consideration ‘ Sale Price $20,000 Adjustments $ $0 Adjusted Sale Price $20,000 Per Unit Price

$/SF $/Acre

‘ $.23 $10,000


Access Average Situs Interior Shape Rectangular Topography Level to Sloping In Flood Plain? No 0.00% Zoning Code Commercial PROPERTY REMARKS This is a vacant commercial tract of land located along the N/L of East Main Street just Paddock Drive in the eastern portion of Gun Barrel City. Site is adjacent to a religious facility and single family residential development. Property was listed on the open market for 171 days at $25,000 before an offer of $20,000 was made and accepted.

LAND SALE NO. 4

PROPERTY IDENTIFICATION Address 1904 South 3rd Street County Kaufman City Mabank State Texas Tax Parcel No. R000020652 Legal Description 3.608 acres out of the G.T. Walters Survey, A-794. TRANSACTION DATA Date of Sale 03-11-2014 DOM Sale Status Closed SP/LP Ratio Seller Carol S. Lyon Living Trust Buyer 4 For 1, Ltd Recording Info Doc. #201400003129 Conditions of Sale Typical Consideration ‘ Sale Price $125,000 Adjustments $ $0 Adjusted Sale Price $125,000 Per Unit Price

$/SF $/Acre

‘ $.80 $34,645


Access Average Situs Interior Topography Level In Flood Plain? No 0.00% Zoning Code Commercial PROPERTY REMARKS This is a commercial tract of land located along the W/L of South 3rd Street (SH 198) just north of Paschall Blvd. Rectangular site with open terrain. Adjacent development includes office warehouse development. Property was originally listed for $219,000 indicating a SP/LP ratio of 57%. DOM = 524.

LAND SALE NO. 5

PROPERTY IDENTIFICATION Address 5230 State Hwy 198 County Henderson City Log Cabin State Texas Legal Description 0.683 acres out of the T. Carro Survey, A-133. TRANSACTION DATA Date of Sale 10-15-2012 DOM Sale Status Closed SP/LP Ratio Seller Debbie Barch Buyer Jody and Kacey Watson Recording Info Doc. #00013547 Conditions of Sale Typical Consideration ‘ Sale Price $15,000 Adjustments $ $0 Adjusted Sale Price $15,000 Per Unit Price

$/SF $/Acre

‘ $.50 $21,962


Access Average Situs Interior Shape Rectangular Topography Level In Flood Plain? No 0.00% Zoning Code Commercial PROPERTY REMARKS This is a vacant commercial site located along the E/L of State Hwy 198 in the City of Log Cabin which is between Malakoff and Payne Springs. The site is located in a lake side community with adjacent development being Dollar General, self-storage and a c-store. Site has good frontage along State Hwy 198 with additional frontage along the rear boundary from a secondary residential street.

EXCESS LAND 1 SALES MAP JOB #16-252

JOB #16-252


SUMMARY OF COMPARABLE LAND SALES

SALE # FACILITYDATE /

DOM# ACRES

UTILITIES / FLOODPLAIN?

Situs / Zoning PRICE/SF

1701 South 3rd Street 3/10/2015 4.000 All available Interior

Mabank No Commercial

1510 S 3rd Street 1/22/2015 2.050 All available Interior

Mabank No C

834 East Main Street 8/27/2014 2.000 Water and electric only

Interior

Gun Barrel City No Commercial

1904 South 3rd Street 3/11/2014 3.608 All available Interior


5230 State Hwy 198 10/15/2012 0.683 Water and electric only

Interior

Log Cabin No Commercial

MIN $0.23MEAN $0.88MAX $1.92

1 $1.92

2 $0.95


5 $0.50

3 $0.23

4 $0.80

Adjustments were made to the prices of the comparable land sales to compensate for differences

between each comparable sale and the subject tract. The following factors were given the most

emphasis in the adjustment process.

Conditions of Sale Conditions of sale refers to seller/buyer motivation, special terms or arrangements,

and/or abnormal circumstances surrounding the transaction which influenced the sale price. Examples of

such conditions might include a forced sale, a sale between related parties, or a sale resulting from the

exercise of an option. Each of the comparable sales appear to represent an arm’s length transaction and

no adjustments were made.

Financing The adjustment category is required since the market value definition is based on a cash or

cash equivalent sales price comparison. Therefore, if the comparable data is influenced by

advantageous financing terms that are not readily in the market then such data must be adjusted

accordingly to reflect a cash equivalent sales price. According to the confirming sources of each of the

comparable sales data, each of the respective comparable land sales were sold on a cash or typical

conventional loan basis, thus no adjustment has been made in this category.

Market Conditions The date of sale is considered applicable in order to assess the overall trend and



JOB #16-252





-2.5%

0.0% 0.0%

2.5% 2.5%

-3.0%

-2.0%

-1.0%

0.0%

1.0%

2.0%

3.0%

% Adj/Yr - Priorto

% Adj/Yr - Priorto

% Adj/Yr - Priorto

% Adj/Yr - Priorto

% Adj/Yr - Since

Jan-13 Jan-14 Jan-15 Jan-16 Jan-16




to this analysis.

Comp 1 2 3 4 5

Date 3/10/2015 1/22/2015 8/27/2014 3/11/2014 10/15/2012Current 8/10/2016 8/10/2016 8/10/2016 8/10/2016 8/10/2016

#Days 510 558 703 869 1375


% Adj/Yr - Prior to 1-Jan-13 -2.5% 0 0 0 0 76

% Adj/Yr - Prior to 1-Jan-14 0.0% 0 0 0 0 360



% Adj/Yr - Since 1-Jan-16 2.5% 219 219 219 219 219

Net Time Adj. 3.5% 3.9% 4.0% 4.0% 3.5%

Time Adjustment

Location is an important element to land value. Major locational considerations include the general

character and trend of surrounding land usage in the neighborhood area as well as overall access and

exposure and the type of access.

JOB #16-252


Excess Land 1 is located in the southern portion of Seven Points. Each of the comparable sales are

located in the Cedar Creek Lake area and benefit from most of the same population centers, back up

neighborhoods and retail centers. However, the majority of the comparable sale was taken from either

Gun Barrel City or Mabank. We searched many sources to uncover commercial land sales actually within

Seven Points though no comparable sales within a recent time frame (5 – 7 years) were found. There is

considerable available land in close proximity, thus as there have been limited sales transactions it would

appear that demand for the subject location is somewhat limited. This is evident that though proximity is

close, the Mabank and Gun Barrel City markets are slightly superior to the subject. Therefore each of the

comparable sales have been given a slight downward adjustment of 10 percent to recognize superior

location.

Physical/Utility The overall physical/utility characteristics of land have a direct bearing upon its potential

uses and, therefore, land value. Physical elements which must be considered include terrain,

topography, soil conditions, availability of utility services, overall size, shape, access, and overall pasture

quality. These sub-categories, as applicable to the comparable data, are summarized as follows:

Size The size adjustments applicable in this analysis are based on the fact that there are generally a

larger number of buyers available for the smaller tracts. The total dollar amounts involved in the larger

tract sales limit the purchasing ability of a significant portion of the buyers. For the same reasons, smaller

tracts tend to sell for more per acre than larger tracts and vice versa. This adjustment usually does not

occur incrementally, but in ranges of size. The difficulty in evaluating this adjustment is identifying the

breaks in those ranges and when to make the adjustments. In an active, viable market with many

comparable sales, this range of breaks is often discernable. In a market such as the subject's, the break

is not as noticeable.

The Excess Land 1 tract is ±1.819 acres in size which is similar to the comparable land sales which

ranged from ±0.683 acres to ±4.00 acres. Please refer to the following chart which summarizes the

applicable size categories and the applicable size adjustments required when compared to the subject

site size.

Subject Site


Size Category 1.0 Ac. 1.0 Ac. 2.0 Ac. 2.0 Ac. 4.0 Ac. 4.0 Ac.


▼

1.819 Ac.

Betw een Betw een

10.0%0.0%

Utilities As previously mentioned the subject site is located inside the Seven Points city limits and

receives all municipal utilities including sanitary sewer. This is a considerable beneficial characteristics

which investors/ developers will pay a premium for. We interviewed several market participants regarding

JOB #16-252


the differences for listings that benefited from utilities vs property outside the city. All market participants

reported the desirability for land inside the city with utilities was considerably higher and therefore an

upward adjustment is warranted. We have applied an upward adjustment of 15 percent to Comparable

Sales 4 & 5 for not having municipal utilities.

Conclusion It is my opinion that no other adjustment categories are considered to be relevant for this

analysis. All factors influencing the each of the subject land values are considered to be recognized.

Following is an adjustment grid showing the previous discussed adjustments and resulting value

indication.

JOB #16-252


Comp # 1 2 3 4 5Date of Sale 3/10/2015 1/22/2015 8/27/2014 3/11/2014 10/15/2012

1701 South 3rd Street 1510 S 3rd Street 834 East Main Street

1904 South 3rd Street

5230 State Hw y 198

Mabank Mabank Gun Barrel City Mabank Log Cabin

Zoning Commercial Commercial Commercial Commercial Commercial

Size (Acres) 4.000 2.050 2.000 3.608 0.683$/SF $1.92/SF $0.95/SF $0.23/SF $0.80/SF $0.50/SFAdjusted For:

Property RightsConditions of SaleFinancing TermMarket Conditions 3.5% 3.9% 4.0% 4.0% 3.5%

Adjusted $/SF $1.99/SF $0.99/SF $0.24/SF $0.83/SF $0.52/SFLocation -10.0% -10.0% -10.0% -10.0%

Size 10.0% 10.0% -10.0%SitusFlood

Topo

Utilities 15.0% 15.0%OtherNet Adjustment -10.0% 0.0% 5.0% 0.0% 5.0%

Adjusted $/SF $1.79/SF $0.99/SF $0.25/SF $0.83/SF $0.54/SF

Comparability Ratio 20% 20% 30% 20% 10%

STATISTICAL INDICATORS OF ADJUSTED VALUE INDICATIONSRange $0.25/SF to $1.79/SFMean $0.88/SFWeighted Average Indication $0.85/SF

$/SF Conclusion $0.85/SF

VALUE COMPUTATION - Excess Land 1Excess Land 1 # SF x Value/SF = Total Value

1.819 79,236 x $0.85 = $67,350

ROUNDED TO NEAREST: $5,000 $65,000

LAND SALES ADJUSTMENT GRID - Excess Land 1

Location

The final adjusted sale prices range from $0.25/SF to $1.79/SF with a mean indication of $0.88/SF. As

indicated by the comparability ratios, most emphasis is placed on Comparable Land Sale 3 being the

most similar overall, our concluded value of $0.85/SF or $65,000 as rounded, is deemed to be justified

and well supported for the Excess Land 1 tract.

JOB #16-252


Excess Land 2 Analysis

Finally we will address the remaining ±13.74 acres that is considered future development land. We will be

analyzing similar comparable larger acreage future development land tracts from the Cedar Creek Lake

area.

Located on the following pages is a write up of comparable land sale utilized in analyzing the ±13.74 acre

Excess Land 2 tract.

LAND SALE NO. 1

PROPERTY IDENTIFICATION Address Paschall Blvd County Kaufman City Mabank State Texas Legal Description 8.911 acres out of the GT Walters Survey, A-794 TRANSACTION DATA Date of Sale 08-22-2016 DOM Sale Status Closed SP/LP Ratio Seller Estate of William Manning & Anna E Paschall Buyer Undisclosed Recording Info Not yet recorded Conditions of Sale Typical Consideration ‘ Sale Price $38,500 Adjustments $ $0 Adjusted Sale Price $38,500 Per Unit Price

$/SF $/Acre

‘ $.10 $4,321


Access Average Situs Interior Shape Rectangular Topography Level to Sloping In Flood Plain? No 0.00% Zoning Code Commercial PROPERTY REMARKS This is a future development tract of land located at the end of Paschall Blvd in Mabank. Property has good proximity to Mabank ISD. Marketed as future development tract for multifamily or subdivision development. Tract has sloping topography though no flood. Site was originally listed for $44,500 indicating a SP/LP ratio of 87%. DOM = 174.

LAND SALE NO. 2

PROPERTY IDENTIFICATION Address 19075 U.S. Hwy 175 County Kaufman City Mabank State Texas Tax Parcel No. 50164, 50165 TRANSACTION DATA Date of Sale 08-17-2016 DOM 239 Sale Status In-Contract SP/LP Ratio 88% Seller Napps Properties, Inc Buyer Undisclosed Recording Info Conditions of Sale Typical Consideration ‘ Sale Price $300,000 Adjustments $ $0 Adjusted Sale Price $300,000 Per Unit Price

$/SF $/Acre

‘ $.36 $15,527


Access Average Situs Interior Shape Irregular Topography Level to Gently Sloping In Flood Plain? No 0.00% Zoning Code C Commercial PROPERTY REMARKS This is the contract for a 19.321 acre property located on the S/L of U.S. Hwy 175 just east of Hwy 198 in Mabank. The property has level to gently sloping topography with a few scattered trees mostly along the south boundary. The property is under contract for $300,000 after 239 DOM and being listed at $339,800. The property will reportedly be utilized for a church.

LAND SALE NO. 3

PROPERTY IDENTIFICATION Address 15285 Hwy 198 County Kaufman City Mabank State Texas Tax Parcel No. 79445, 8456, 8446 TRANSACTION DATA Date of Sale 03-12-2013 DOM 51 Sale Status Closed SP/LP Ratio 100% Seller Riley & Lori Morgan Buyer Jets Ranch, LLC Recording Info #0003178 Conditions of Sale Typical Consideration ‘ Sale Price $65,000 Adjustments $ $0 Adjusted Sale Price $65,000 Per Unit Price

$/SF $/Acre

‘ $.15 $6,522


Access Average Situs Interior Shape Irregular Topography Level to Gently Sloping In Flood Plain? No 0.00% Zoning Code None Not Zoned PROPERTY REMARKS This is the sale of 9.967 acres located on the W/L of Hwy 198 north of Mabank. The property has level to gently sloping topography with a few scattered trees and a small pond. The property sold for the list price of $65,000 after 51 DOM.

LAND SALE NO. 4

PROPERTY IDENTIFICATION Address Hwy 198 County Kaufman City Mabank State Texas Tax Parcel No. 182615 TRANSACTION DATA Date of Sale 02-20-2013 DOM 164 Sale Status Closed SP/LP Ratio 77% Seller J. I. T. Manufacturing, Inc, Buyer Jets Ranch, LLC Recording Info #0003277 Conditions of Sale Typical Consideration ‘ Sale Price $140,000 Adjustments $ $0 Adjusted Sale Price $140,000 Per Unit Price

$/SF $/Acre

‘ $.27 $11,589


Access Average Situs Corner Shape Irregular Topography Level to Gently Sloping In Flood Plain? No 0.00% Zoning Code None Not Zoned PROPERTY REMARKS This is the sale of 12.08 acres located at the NWC of Hwy 198 and CR 4004 just north of Hwy 175. The property has good frontage with 1,100 LF of frontage. The property has level to gently sloping topography with open terrain and a small pond. The property sold for $140,000 after 164 DOM with an SP/LP ratio of 77%.

LAND SALE NO. 5

PROPERTY IDENTIFICATION Address 15285 Hwy 198 County Kaufman City Mabank State Texas Tax Parcel No. 79445, 8456, 8446 TRANSACTION DATA Date of Sale 02-07-2012 DOM 230 Sale Status Closed SP/LP Ratio 46% Seller Rose Acceptance, Inc. Buyer Riley & Lori Morgan Recording Info #0002249 Conditions of Sale Typical Consideration ‘ Sale Price $40,000 Adjustments $ $0 Adjusted Sale Price $40,000 Per Unit Price

$/SF $/Acre

‘ $.09 $4,028


Access Average Situs Interior Shape Irregular Topography Level to Gently Sloping In Flood Plain? No 0.00% Zoning Code None Not Zoned PROPERTY REMARKS This is the sale 9.93 acres located on the W/L of Hwy 198 just north of Hwy 175 in Mabank. The property has level to gently sloping topography with a few scattered trees and a pond. The property sold for $40,000 after 230 DOM and was originally listed for $86,900 with a SP/LP ratio of 46%.

EXCESS LAND 2 SALES MAP JOB #16-252

JOB #16-252


SUMMARY OF COMPARABLE LAND SALES

SALE # FACILITYDATE /

DOM# ACRES

UTILITIES / FLOODPLAIN?

Situs / Zoning PRICE/Ac.

Paschall Blvd 8/22/2016 8.911 Water and electric only

Interior


19075 U.S. Hwy 175 8/17/2016 19.321 All available Interior


15285 Hwy 198 3/12/2013 9.967 All available Interior

Mabank No None

Hwy 198 2/20/2013 12.080 All available Corner

Mabank No None

15285 Hwy 198 2/7/2012 9.930 All available Interior

Mabank No None

MIN $4,028MEAN $8,397MAX $15,527

1 $4,321

2 $15,527


5 $4,028

3 $6,522

4 $11,589

Adjustments were made to the prices of the comparable land sales to compensate for differences

between each comparable sale and the subject tract. The following factors were given the most

emphasis in the adjustment process.

Conditions of Sale Conditions of sale refers to seller/buyer motivation, special terms or arrangements,

and/or abnormal circumstances surrounding the transaction which influenced the sale price. Examples of

such conditions might include a forced sale, a sale between related parties, or a sale resulting from the

exercise of an option. Comparable Sale 5 was a bank owned property at the time of sale. Typically REO

properties will receive a discount in an effort to entice a quick sale. In an effort to recognize the adverse

conditions of sale we have applied a 15 percent downward adjustment to Comparable Sale 5.

Financing The adjustment category is required since the market value definition is based on a cash or

cash equivalent sales price comparison. Therefore, if the comparable data is influenced by

advantageous financing terms that are not readily in the market then such data must be adjusted

accordingly to reflect a cash equivalent sales price. According to the confirming sources of each of the

comparable sales data, each of the respective comparable land sales were sold on a cash or typical

conventional loan basis, thus no adjustment has been made in this category.

Market Conditions The date of sale is considered applicable in order to assess the overall trend and


JOB #16-252






-2.5%

0.0% 0.0%

2.5% 2.5%

-3.0%

-2.0%

-1.0%

0.0%

1.0%

2.0%

3.0%

% Adj/Yr - Priorto

% Adj/Yr - Priorto

% Adj/Yr - Priorto

% Adj/Yr - Priorto

% Adj/Yr - Since

Jan-13 Jan-14 Jan-15 Jan-16 Jan-16




to this analysis.

Comp 1 2 3 4 5

Date 8/22/2016 8/17/2016 3/12/2013 2/20/2013 2/7/2012

Current 8/10/2016 8/10/2016 8/10/2016 8/10/2016 8/10/2016

#Days -12 -7 1228 1250 1623


% Adj/Yr - Prior to 1-Jan-13 -2.5% 0 0 0 0 324




% Adj/Yr - Since 1-Jan-16 2.5% 0 0 219 219 219

Net Time Adj. 0.0% 0.0% 4.0% 4.0% 1.8%

Time Adjustment

Location is an important element to land value. Major locational considerations include the general

character and trend of surrounding land usage in the neighborhood area as well as overall access and

exposure and the type of access.

JOB #16-252


Excess Land 2 is located in the southern portion of Seven Points. Each of the comparable sales are

located in the Cedar Creek Lake area and benefit from most of the same population centers, back up

neighborhoods and retail centers. However, each of the comparable sale was taken from either Gun

Barrel City or Mabank. We searched many sources to uncovered commercial land sales actually within

Seven Points though no comparable sales within a recent time frame (5 – 7 years) was found. This is

evident that though proximity is close, the Mabank and Gun Barrel City markets are slightly superior to

the subject. However, Comparable Sale 1 is a secondary tract with limited access and exposure. Each

comparable sales has been given a slightly downward adjustment of 10 percent with the exception of

Comparable Sale 1 given its inferior exposure.

Physical/Utility The overall physical/utility characteristics of land have a direct bearing upon its potential

uses and, therefore, land value. Physical elements which must be considered include terrain,

topography, soil conditions, availability of utility services, overall size, shape, access, and overall pasture

quality. These sub-categories, as applicable to the comparable data, are summarized as follows:

Size The size adjustments applicable in this analysis are based on the fact that there are generally a

larger number of buyers available for the smaller tracts. The total dollar amounts involved in the larger

tract sales limit the purchasing ability of a significant portion of the buyers. For the same reasons, smaller

tracts tend to sell for more per acre than larger tracts and vice versa. This adjustment usually does not

occur incrementally, but in ranges of size. The difficulty in evaluating this adjustment is identifying the

breaks in those ranges and when to make the adjustments. In an active, viable market with many

comparable sales, this range of breaks is often discernable. In a market such as the subject's, the break

is not as noticeable.

The Excess Land 2 tract is ±13.74 acres in size which is similar to the comparable land sales which

ranged from ±8.911 acres to ±19.321 acres. Please refer to the following chart which summarizes the

applicable size categories and the applicable size adjustments required when compared to the subject

site size.

Subject Site


Size Category 5.0 Ac. 5.0 Ac. 10.0 Ac. 10.0 Ac. 20.0 Ac. 20.0 Ac.


▼

13.74 Ac.

Betw een Betw een

-10.0% 0.0%

Utilities As previously mentioned the subject site is located inside the Seven Points city limits and

receives all municipal utilities including sanitary sewer. This is a considerable beneficial characteristics

which investors/ developers will pay a premium for. We interviewed several market participants regarding

the differences for listings that benefited from utilities vs property outside the city. All market participants

JOB #16-252


reported the desirability for land inside the city with utilities was considerably higher and therefore an

upward adjustment is warranted. We have applied an upward adjustment of 15 percent to Comparable

Sale 1 for not having municipal utilities.

Conclusion It is my opinion that no other adjustment categories are considered to be relevant for this

analysis. All factors influencing the each of the subject land values are considered to be recognized.

Following is an adjustment grid showing the previous discussed adjustments and resulting value

indication.

JOB #16-252


Comp # 1 2 3 4 5Date of Sale 8/22/2016 8/17/2016 3/12/2013 2/20/2013 2/7/2012

Paschall Blvd 19075 U.S. Hw y 175

15285 Hw y 198 Hw y 198 15285 Hw y 198

Mabank Mabank Mabank Mabank Mabank

Situs Interior Interior Interior Corner Interior

Size (Acres) 8.911 19.321 9.967 12.080 9.930$/Ac. $4,321/Ac $15,527/Ac $6,522/Ac $11,589/Ac $4,028/AcAdjusted For:

Property RightsConditions of Sale 15.0%Financing TermMarket Conditions 4.0% 4.0% 1.8%

Adjusted $/Ac. $4,321/Ac $15,527/Ac $6,784/Ac $12,055/Ac $4,714/AcLocation -10.0% -10.0% -10.0% -10.0%

Size -10.0% -10.0% -10.0%SitusFlood

Topo 15.0%

UtilitiesOtherNet Adjustment 5.0% -10.0% -20.0% -10.0% -20.0%

Adjusted $/Ac. $4,537/Ac $13,974/Ac $5,427/Ac $10,849/Ac $3,771/Ac

Comparability Ratio 25% 10% 25% 20% 20%

STATISTICAL INDICATORS OF ADJUSTED VALUE INDICATIONSRange $3,771/Ac to $13,974/AcMean $7,712/AcWeighted Average Indication $6,813/Ac

$/Ac. Conclusion $7,000/Ac

VALUE COMPUTATION - Excess Land 2Excess Land 2 # Acres x Value/Acre = Total Value

13.740 13.740 x $7,000 = $96,180

ROUNDED TO NEAREST: $5,000 $95,000

LAND SALES ADJUSTMENT GRID - Excess Land 2

Location

The final adjusted sale prices range from $3,771/Acre to $13,974/Acre with a mean indication of

$7,712/Acre. As indicated by the comparability ratios, most emphasis is placed on Comparable Land

Sale 3 being the most similar overall, our concluded value of $7,000/Acre or $95,000 as rounded, is

deemed to be justified and well supported for the Excess Land 2 tract.

JOB #16-252


RECONCILIATION OF FINAL VALUE ESTIMATE

The subject is mixed use property with two excess land tracts. The existing improvements include a multi-

tenant office building known as the Seven Points Professional Center as well as a storage warehouse.

The professional center and storage warehouse are situated on opposite ends of the subject site and

have been valued individually. Each excess land tract has also been given a value indication based on

similar commercial and future development land tracts from the area. Located below is a summary of

each component’s value indication. Please see the chart below for an outline of the overall value

conclusion.

Allocation of Market Value "As Is"Professional Office $335,000Warehouse Building $105,000Excess Land 1 $65,000Excess Land 2 $95,000

Total Estimated Value "As Is" $600,000

The above referenced estimated market value “As Is” is a combination of all facets of the subject

property. This does not however represent the final value conclusion as a whole. Typically an investor for

a multi-tenant office building does not have a need or desire for a storage warehouse or two excess land

tracts. The same can be said for a buyer of a commercial site likely does not need an office building also.

Mixed use properties such as the subject typically are discounted in bulk when exposed on the open

market for these reasons.

We have estimated a general discount of 5% that will be applied to the sum of all value conclusions to

arrive at a final market value “As Is”. Please see the chart below outlining the applied discount and final

market value conclusion.

Overall Value ConsclusionCombined MV indicaitons $600,000Less Bulk Disc. 5% ($30,000)Final Market Value Conclusion $570,000

SAY $570,000

Based on the previous analysis of the data contained in this report, it is my opinion that the subject has a

Market Value “As Is” of the fee simple estate, as of August 10, 2016 to be:

FIVE HUNDRED SEVENTY DOLLARS $570,000

JOB #16-252


CERTIFICATE OF APPRAISAL The undersigned does hereby certify as follows:

• The statements of fact contained in this report are true and correct. • The reported analysis, opinions, and conclusions are limited only by the reported assumptions and

limiting conditions and is my personal, impartial, and unbiased professional analyses, opinions, and conclusions.

• I have no present or contemplated future interest in the real estate that is the subject of this report

and no personal interest with respect to the parties involved. • I have no bias with respect to the property that is the subject of this report or to the parties involved

with this assignment. • My engagement in this assignment was not contingent upon developing or reporting predetermined

results. • The amount of the Appraiser's fee is not contingent upon the reporting of a predetermined value or

direction in value that favors the cause of the client, the amount of the value estimate, the attainment of a stipulated result, or the occurrence of a subsequent event related to the intended use of this appraisal.

• To the best of my knowledge and belief the statements of fact contained in this appraisal report, upon

which the analyses, opinions, and conclusions expressed herein are based, are true and correct. • This appraisal report sets forth all the limiting conditions and special conditions (imposed by the terms

of my assignment or by the undersigned) which may affect the analyses, opinions and conclusions contained in this report.

• This appraisal has been made in accordance with the Uniform Standards of Professional Appraisal

Practice (USPAP) as adopted by the Appraisal Standards Board of the Appraisal Foundation. This report is further prepared in order to comply with the Code of Professional Ethics and Standards of Professional Appraisal Practice of the Appraisal Institute.

• The values within this report are certified not to be based upon any requested minimum, maximum or

specific valuation instructions from the client, or for the favorable consideration toward a loan. • One (or more) of the signatories of this appraisal report is a member (or candidate) of the Appraisal

Institute. The Bylaws and Regulations of the Institute require each member and candidate to control the use and distribution of each appraisal report signed by such member or candidate. Therefore, except as hereinafter provided, the party for whom this appraisal report was prepared may distribute copies of this appraisal report, in its entirety, to such third parties as may be selected by the party for whom this appraisal report was prepared; however, portions of this appraisal report shall not be given to third parties without prior written consent of the signatories of this appraisal report. Further, neither all nor any part of this appraisal report shall be disseminated to the general public by the use of advertising media, public relations media, news media, sales media or other media for public communication without the prior written consent of the signatories of this appraisal report.

JOB #16-252


• No one other than the undersigned provided significant professional analytical assistance in determining the conclusions reported herein, which includes preparation of any analysis, derivation of conclusions, and/or opinions set forth in the appraisal.

• The undersigned Joe Bill Thompson, MAI personally made an exterior inspection on August 10, 2016.

The undersigned is knowledgeable of the property type, as well as all applicable appraisal methodology that may be required to determine the subject’s market value. The experience level of the undersigned is strong, with a significant amount of that experience being in the valuation of office warehouse properties. Therefore, it is certified that the appraiser has the knowledge and experience to complete the appraisal assignment in a competent manner.

• The real property which is the subject of this appraisal report is valued as of August 10, 2016, as if

unaffected by environmental contamination and subject to all the assumptions and limiting conditions contained in this report, for a market value “As Is” of $570,000. This value estimate is representative of the market conditions existing as of the effective date, and takes into consideration all factors influencing the value of the property described as the mixed use property currently operating as Seven Points Professional Center located at 606 South Seven Points Blvd., Seven Points, Henderson County, Texas.

• I certify that the use of this report is subject to the requirements of the Appraisal Institute relating to

review by its duly authorized representatives.

• The Appraisal Institute conducts a voluntary program of continuing professional education for its designated members. Designated members who meet the minimum standards of this program are awarded periodic educational certification.

• As of the date of this report, Joe Bill Thompson, MAI has completed the requirements of the

continuing education program of the Appraisal Institute. • I have performed no services, as an appraiser or in any other capacity, regarding the property that is

the subject of this report within the three-year period immediately preceding acceptance of this assignment.

This report was signed on the 30th day of August, 2016

Joe Bill Thompson, MAI Jack Wheeler President Staff Appraiser SCGREA TX-1320294-G Trainee: #1340522 Expires: 03/31/2017 Expires: 07/31/2017

JOB #16-252


ADDENDA

JOB #16-252

THOMPSON APPRAISAL SERVICE A

ENGAGEMENT LETTER

JOB #16-252

THOMPSON APPRAISAL SERVICE B

STATE CERTIFICATION

Douglas E. OldmixonCommissioner

Texas Appraiser Licensing and Certification BoardTexas Appraiser Licensing and Certification BoardTexas Appraiser Licensing and Certification BoardTexas Appraiser Licensing and Certification BoardP.O. Box 12188 Austin, Texas 78711-2188

Certified General Real Estate Appraiser

Having provided satisfactory evidence of the qualifications required by theTexas Appraiser Licensing and Certification Act, Texas Occupations Code,Chapter 1103, is authorized to use this title, Certified General Real EstateAppraiser.

Number:

Issued:

1320294

Expires: 03/31/2017

JOE BILL THOMPSON

PO BOX 125

LINDALE, TX 75771

Appraiser:

03/19/2015

JOE BILL THOMPSON

TX G

You may wish to laminate the pocket identification card to preserve it.

Inquiry as to the status of this license may be made to:

Texas Appraiser Licensing and Certification BoardP.O. Box 12188

Austin, Tx 78711-2188www.talcb.texas.gov

(512) 936-3001Fax:(512) 936-3899


The person named on the reverse is licensed by the Texas Appraiser Licensing and Certification Board.


Certified General Real Estate Appraiser

Having provided satisfactory evidence of the qualifications required by the Texas Appraiser Licensing and Certification Act, Texas OccupationsCode, Chapter 1103, is authorized to use this title, Certified General Real Estate Appraiser.

Number#:

Issued: Expires:

1320294

03/31/2017

Appraiser:

03/19/2015

JOE BILL THOMPSON

TX G



Appraiser Trainee

The Texas Appraiser Licensing and Certification Board authorizes thenamed person to act as an Appraiser Trainee under the sponsorship of thecertified appraiser noted above, pursuant to Texas Occ. Code, Chapter1103.An Appraiser Trainee may perform appraisals only under the directsupervision of the Trainee’s sponsoring appraiser(s) who signs the reportand is responsible for the conduct of the Appraiser Trainee.

An Appraiser Trainee may be sponsored by one or more certifiedappraisers.

Authorization#:

Issued:

1340522

07/21/2015

Trainee: JACK D WHEELER

999976214TX Trainee

JACK D WHEELER

16919 SENTINEL LN

LINDALE, TX 75771

I. D. Number:

Expires:

Sponsor: Certification #:JOE BILL THOMPSON C

I. D. Number:

TX

07/31/2017

1320294

880339549

You may wish to laminate the pocket identification card to preserve it.

Inquiry as to the status of this license may be made to:

Texas Appraiser Licensing and Certification BoardP.O. Box 12188

Austin, Tx 78711-2188www.talcb.texas.gov(512) 936-3001

Fax:(512) 936-3899


The person named on the reverse is authorized to conduct appraisals under direct supervision of the sponsoring appraiser(s) by the Texas Appraiser Licensing and Certification Board.


Appraiser Trainee

The Texas Appraiser Licensing and Certification Board authorizes the named person to act as an Appraiser Trainee under the sponsorship of the certified appraiser noted above, pursuant to Texas Occ. Code, Chapter 1103.

An Appraiser Trainee may perform appraisals only under the direct supervision of the Trainee’s sponsoring appraiser(s) who signs the report and is responsible for the conduct of the Appraiser Trainee.

An Appraiser Trainee may be sponsored by one or more certified appraisers.

Authorization#:

Issued:

1340522 I. D. Number:

Expires:

Trainee:

TX Trainee

07/21/2015

JOE BILL THOMPSON

Sponsor: Certification #: 1320294 CTX

I. D. Number: 880339549

999976214

07/31/2017

JACK D WHEELER

AN APPRAISAL REPORT OF€¦ · An appraisal report setting forth the findings and conclusions...

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