Restricted Use Appraisal Report - Auburn · Appraised Real Estate: “Raw Land” and “Improved...
Transcript of Restricted Use Appraisal Report - Auburn · Appraised Real Estate: “Raw Land” and “Improved...
Allen Brackett Shedd
14-0131DC – Copyright © 2010
Restricted Use Appraisal Report
Auburn Municipal Airport Leased Land Properties
Between 16th
and 30th
Streets NE
Auburn, WA 98002
FOR
Airport Management Group, LLC
Mr. Jamelle R. Garcia
Auburn Municipal Airport
400 23rd
Street NE
Auburn, WA 98002
Valbridge Property Advisors |
Allen Brackett Shedd
Smith Tower
206 Second Avenue, Suite 1001
Seattle, WA 98104
206-209-3016
Valbridge Job # 14-0131
valbridge.com
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September 24, 2014
Mr. Jamelle R. Garcia
Airport Management Group, LLC
Auburn Municipal Airport
400 23rd
Street NE
Auburn, WA 98002
RE: APPRAISAL OF LEASED LAND PROPERTIES LOCATED AT THE AUBURN MUNICIPAL
AIRPORT IN KING COUNTY, WASHINGTON (Our File #14-0131)
Dear Mr. Garcia:
In response to your request, we have completed an appraisal of leased land properties
at Auburn Municipal Airport, in various locations on the east side of the runway between
16th
and 30th
Streets NE, in Auburn, Washington. The purpose of this appraisal is to
provide an opinion of the market rent values for “Raw Land” and “Improved Land”
leased areas, intended to assist the client in lease renegotiations.
This report is authorized for use by Airport Management Group, LLC, the client, and its
agents and/ or representatives, including Jamelle R. Garcia. The appraisers do not
intend use of this report by others.
This appraisal values the market rent of fee simple interest of the subject properties. As
agreed, this is a Restricted Use Appraisal Report, intended to comply with the reporting
requirements of the Code of Ethics and Standards of Professional Appraisal Practice,
which include Uniform Standards of Professional Appraisal Practice (USPAP) of the
Appraisal Institute. The value conclusions herein are given subject to the specific
assumptions and limiting conditions stated immediately following this transmittal letter,
as well as others identified in the report.
Based on investigation and analysis of all relevant data, it is our opinion that the market
rent of the subject properties, as of August 25, 2014, are as follows:
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Concluded Rental Rates
Annual
Rental/sf
Aviation - Improved Land $0.55
Aviation - Raw Land $0.36
If you have further questions not answered in the accompanying report, please do not
hesitate to call.
Sincerely,
VALBRIDGE PROPERTY ADVISORS | ALLEN BRACKETT SHEDD
S. Murray Brackett, MAI
David Coleman, Senior Associate
Kr, cf
Enclosures
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ASSUMPTIONS AND LIMITING CONDITIONS
This appraisal report was made after personal inspection of the property identified in this report. The
conclusions in the report have been arrived at and are predicated upon the following conditions:
a) No responsibility is assumed for matters, which are legal in nature, nor is any opinion rendered on
title of land appraised. Title to the property is assumed to be good and marketable unless
otherwise stated in this report.
b) Unless otherwise noted, the property has been appraised as though free and clear of all liens,
encumbrances, encroachments, and trespasses.
c) All maps, areas, and other data furnished your appraiser have been assumed to be correct;
however, no warranty is given for its accuracy. If any error or omissions are found to exist, the
appraiser reserves the right to modify the conclusions. Any plot plans and illustrative material in
this report are included only to assist the reader in visualizing the property.
d) It is assumed there is full compliance with all applicable federal, state, and local environmental
regulations and laws unless otherwise stated in this report.
e) It is assumed all applicable zoning and use regulations and restrictions have been complied with,
unless a nonconformity has been stated, defined, and considered in this appraisal report.
f) The appraiser has no interest, present or contemplated, in the subject properties or parties
involved.
g) Neither the employment to make the appraisal nor the compensation is contingent upon the
amount of the valuation report.
h) To the best of the appraiser’s knowledge and belief, all statements and information in this report
are true and correct, and no important facts have been withheld or overlooked.
i) Possession of this report, a copy, or any part thereof, does not carry with it the right of
publication, nor shall the report or any part thereof be conveyed to the public through
advertising, public relations, news, sales, or other media valuation conclusions, identity of the
appraiser, or firm, and any reference made to the Appraisal Institute or any professional
designation.
j) There shall be no obligation required to give testimony or attendance in court by reason of this
appraisal, with reference to the property in question, unless satisfactory arrangements are made in
advance.
k) This appraisal has been made in accordance with rules of professional ethics of the Appraisal
Institute.
l) The Valbridge Property Advisors office responsible for the preparation of this report is
independently owned and operated by Allen Brackett Shedd. Neither Valbridge Property Advisors,
Inc., nor any of its affiliates, has been engaged to provide this report. Valbridge Property Advisors,
Inc., does not provide valuation services and has taken no part in the preparation of this report.
m) No one other than the appraiser prepared the analysis, conclusions, and opinions concerning real
estate that are set forth in the appraisal report.
n) Statements or conclusion offered by the appraiser are based solely upon visual examination of
exposed areas of the property. Areas of the structure and/or property, which are not exposed to
the naked eye, cannot be inspected; and no conclusions, representations, or statements offered by
the appraiser are intended to relate to areas not exposed to view. No obligation is assumed to
discover hidden defects.
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o) Unless otherwise stated in this report, the existence of pollution and/or hazardous waste material,
which may or may not be present on the property, was not observed by the appraiser. The
appraiser has no knowledge of the existence of such materials on or in the property. The
appraiser, however, is not qualified to detect such substances. The presence of substances such as
asbestos, urea-formaldehyde foam insulation, or other potentially hazardous materials or
pollution may affect the value of the property. The value estimate is predicated on the
assumption that there is no such material on or in the property that would cause a loss in value.
No responsibility is assumed for any such conditions or for any expertise or engineering
knowledge required to discover them. The client is urged to retain an expert in this field, if
desired.
p) Statements, representations, or conclusions offered by the appraiser do not constitute an express
or implied warranty of any kind.
q) Neither appraiser nor Allen Brackett Shedd shall be liable for any direct, special, incidental, or
consequential damages whatever, whether arising in tort, negligence, or contract, nor for any loss,
claim, expense, or damage caused by or arising out of its inspection of a property and/or
structure.
r) The Americans with Disabilities Act (ADA) became effective January 26, 1992. We have not made a
specific compliance survey and analysis of this property to determine whether or not it is in
conformity with the various detailed requirements of the ADA. It is possible that a compliance
survey of the property, together with a detailed analysis of the requirements of the ADA, could
reveal that the property is not in compliance with one or more of the requirements of the Act. If
so, this fact could have a negative effect upon the value of the property. Since we have no direct
evidence relating to this issue, we did not consider possible non-compliance with the
requirements of ADA in estimating the value of the property.
s) With regard to prospective value opinions, future changes in market conditions necessitate an
assumption that the appraiser cannot be held responsible for unforeseeable events that alter
market conditions prior to the effective date of the appraisal or date of value.
t) This report and any associated work files may be subject to evaluation by Valbridge Property
Advisors, Inc., or its affiliates, for quality control purposes.
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TABLE OF CONTENTS
Page
Letter of Transmittal Assumptions and Limiting Conditions Executive Summary
Restricted Use Appraisal Report
Summary of the Appraisal Problem ................................................................................................ 2 Legal Description .................................................................................................................................... 2 History/Delineation of Title ................................................................................................................ 2 Property Rights Appraised .................................................................................................................. 2 Scope of Assignment ............................................................................................................................ 3 Hypothetical Conditions/Extraordinary Assumptions .............................................................. 4 Marketing and Exposure Periods ..................................................................................................... 5 Personal Property ................................................................................................................................... 5 Area/ Neighborhood Description .................................................................................................... 5
Immediate Neighborhood ................................................................................................... 5 Northwest Airports.................................................................................................................. 6 Industrial Market ...................................................................................................................... 7
Description of the Subject Properties .......................................................................................... 10 General Description: .................................................................................................................... 10
Highest and Best Use ......................................................................................................................... 11 Valuation Methodology .................................................................................................................... 12
Method 1 - Direct Comparison - Comparable Airports ......................................... 12 Method 2 - Sales Comparison Approach - Surrounding Off-Airport Land .... 12 Correlation and Application of Rental Rates .............................................................. 12
Method 1 - Direct Airport Comparison ....................................................................................... 13 Rate Conclusions - Direct Airport Comparison Approach .................................... 14
Method 2 - Off-Airport Land Analysis ......................................................................................... 16 Summary of Data and Valuation Conclusions ........................................................... 17 Aviation Land Lease Adjustment .................................................................................... 17 Aviation Use ................................................................................................................................... 18
Rental Rate Analysis – Fair Rental (Land).................................................................................... 19 Correlation and Conclusion of Rental Rates ............................................................................. 22 Certification of Value ................................................................ Error! Bookmark not defined. Certification of Value .......................................................................................................................... 24
Addenda
Aerial Map Qualifications of Appraisers
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1) Auburn Airport - AFS Galvin Site
2) Auburn Airport - AFS Galvin Site, looking northeast
SUBJECT PROPERTY PHOTOGRAPHS
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3) Auburn Airport - AFC 3 Site, looking east
4) Auburn Airport - AFC 1 Site, looking east
SUBJECT PROPERTY PHOTOGRAPHS
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5) View showing Westside Acreage, looking west
6) View looking northeast, showing ACHA Site
SUBJECT PROPERTY PHOTOGRAPHS
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7) Additional view of ACHA Site, looking east
8) View of ACHA Site, looking southeast
SUBJECT PROPERTY PHOTOGRAPHS
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9) View of JJ Site, looking northeast
10) View looking northeast, showing JJ and AHOA Sites
SUBJECT PROPERTY PHOTOGRAPHS
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11) View looking east showing AHOA Site
12) View showing JJ and AFC2 Sites, looking east
SUBJECT PROPERTY PHOTOGRAPHS
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13) Additional view looking east across AHOA Site
SUBJECT PROPERTY PHOTOGRAPHS
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Aerial Map
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RESTRICTED USE APPRAISAL REPORT
This is a Restricted Use Appraisal Report which is intended to comply with the reporting requirements set
forth under Standards Rule 2-2(c) of the Uniform Standards of Professional Appraisal Practice (USPAP) for a
Restricted Use Appraisal. As such, it presents nominal discussion of the data, reasoning, and analyses that
were used in the appraisal process to develop the appraisers’ opinion of value. Supporting documentation
concerning the data, reasoning, and analyses is retained in the appraisers’ file. The depth of discussion
contained in this report is specific to the needs of the client and for the intended use previously stated. The
appraisers are not responsible for unauthorized use of this report.
Client: Jamelle R. Garcia
Airport Management Group, LLC
Appraisers: S. Murray Brackett, MAI David Coleman, Senior Associate Valbridge / Allen Brackett Shedd
Appraised Real Estate: “Raw Land” and “Improved Land” leased land properties at Auburn Municipal Airport, in various locations on the east side of the runway between 16
th and 30
th Streets NE, in Auburn, King County,
Washington. The individual leased sites range in size from 8,892 to 147,766 square feet. The properties are improved with a number of hangars, other aircraft facilities, taxiways, and site improvements, which are excluded from the appraised values, except as discussed further in this report.
Purpose of the Appraisal: To form an opinion of market rent.
Property Rights Appraised: Fee simple and leased fee interests, subject to known title conditions.
Intended Use/Users: The intended use of this appraisal is to assist the client in decision-making, regarding lease renegotiations. The client is Airport Management Group, LLC, and its agents and/ or representatives, including Jamelle R. Garcia. The appraisers do not intend use of this report by others.
Date of Inspection/ Value: The subject properties were inspected on August 25, 2014. The effective date of this appraisal is August 25, 2014.
Date of Report: September 23, 2014
File ID: 14-0131
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Summary of the Appraisal Problem The purpose of this appraisal is to provide an opinion of market rent for “Raw Land” and
“Improved Land” sites at Auburn Municipal Airport. Auburn periodically utilizes an
appraisal of its properties to support land lease rate adjustments. This report reflects
two distinct methodologies, which are reconciled into our opinion of market rent.
Legal Description No legal descriptions were provided. We have relied on maps provided by airport staff
for general identification. The properties are contained within a number of King County
Tax Parcels. A title commitment was not provided for our review. Current Leases reflect
uses restricted to fixed-base aircraft operation, maintenance and repair; construction,
management, and maintenance of aircraft hangar buildings and aircraft storage. Aside
from the above noted conditions, our assumption is there are no other adverse
conditions which would affect the value of the properties. The following chart
summarizes the land parcels currently leased at Auburn Airport along with the current
lease rates.
Auburn Municipal Airport Leased Land - Property and Lease Summary (CURRENT Rates)
Lease 5 Yr. Adj. Lease Lease Bldg. Year $/sf/Yr.
No. Propety Name Location Start Term Starting Land (sf) $/Mo.* (sf) Built Land Comments
1 Auburn Flight Services 1725 E. Street NE 02/27/78 40 06/01/83 120,580 $3,285.81 2,622 1978 $0.327 Portion of tax parcel; "Raw Land"
2 Auburn Flyers Condo III 1775 E. Street NE 08/15/05 50 01/01/11 26,765 $1,199.74 23,157 2006 $0.538 Building 9, 9 condo hangars
3 Auburn Flyers Condo I 1801 E. Street NE 06/17/02 50 01/01/09 12,164 $545.25 11,807 2003 $0.538 Building 8, 10 condo hangars
4 Auburn Condo Hangars Assoc. 2131 E. Street NE 05/31/01 50 01/01/07 147,766 $4,026.62 60,110 2003-'06 $0.327 7 buildings, 46 condo hangars;
Portion of tax parcel; "Raw Land"
5 Jacobsen's Hangar S. of 30th Street NE 06/03/02 50 01/01/09 8,892 $398.58 5,760 2003 $0.538 Portion of tax parcel; letter 7/25/03
decreased size from 10,296 sf
6 Auburn Flyers Condo II 412 NE 30th Street 01/20/04 50 01/01/04 24,948 $1,118.29 14,448 2004 $0.538 Buildings G (4 condo) and H (3
condo) hangars; letter 7/25/03
increased land from 23,544 sf
7 Auburn Hangar Owners Assoc. S. of 30th Street NE 08/01/01 50 01/01/08 98,326 $4,407.46 44,652 2003-'07 $0.538 6 buildings, 30 condo hangars
Conversations with Airport officials indicate that the airport has been increasing rates
annually based on CPI in August of each year for the following year, except every fifth
year an MAI appraisal will be completed to establish the rate.
History/Delineation of Title The Auburn Municipal Airport is a well-established general aviation airport that offers a
wide range of flight-related services. The airport has been owned for many years by the
City of Auburn and is currently operated by Airport Management Group, LLC. Leasing
activity is discussed further in this report.
Property Rights Appraised As a rental study, this appraisal reflects an opinion of the market rental rate for the fee
simple interest.
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This appraisal sets forth an opinion regarding a fee simple interest (subject to existing
easements and encumbrances). Fee simple interest is defined as:1
Absolute ownership unencumbered by any other interest or estate, subject only to the
limitations imposed by the governmental powers of taxation, eminent domain, police power,
and escheat.
Market rent is defined as:2
Market rent is the most probable rent that a property should bring in a competitive and
open market reflecting all conditions and restrictions of the lease agreement including
permitted uses, use restrictions, expense obligations; term, concessions, renewal and
purchase options and tenant improvements (TIs).
In this analysis, we have given consideration to the restrictive (special) use of an airport
property, as well as similar uses at comparable facilities. The rental opinions are based,
in part, on current rents being received or asked for on comparable properties. In
providing an opinion of the economic rent for the subject land, we have: 1) generated a
land value opinion; and 2) determined an appropriate periodic rate of return based on
similar facilities and real estate investments. For the selected airport buildings, various
methodologies are employed to provide an opinion of the market rent for those
structures. The concluded rental rate does not include the leasehold excise tax
applicable to all leases on airport property. This leasehold tax is 12.84% and is
essentially in lieu of real property taxes. The typical rental term is between 20 and 50
years, with 3- to 5-year fixed rates and negotiated renewal rates.
Scope of Assignment The scope of this appraisal considered the standard approaches to value: Cost
Approach, Income Approach, and Sales Comparison Approach. As discussed in the
Summary of the Appraisal Problem section, the properties are analyzed as leased land
only. We surveyed a variety of airports in the region and analyzed the comparable rates
for properties with similar use potential. We also considered land values in the
surrounding airport vicinity which have similar characteristics to the subject properties,
utilizing the Sales Comparison Approach. The format of this appraisal is a Restricted Use
Appraisal Report.
The client provided the appraisers with relevant subject property information.
Additional information was obtained from County and City records, and on-site
inspections. In appraising the subject properties, the appraisers did the following:
1 From The Appraisal of Real Estate, Fourteenth Edition, 2013,Appraisal Institute, page 5 2From The Dictionary of Real Estate Appraisal, Fifth Edition, 2010 (Dictionary), the Uniform Standards of Professional Appraisal
Practice (USPAP) and Building Owners and Managers Association International (BOMA).
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Inspected the subject properties.
Discussed pertinent information on regional airports with airport managers.
Analyzed historical and current information from the subject neighborhood and
competitive neighborhoods in Auburn.
Researched CoStar, Metroscan, CIBA, and King County databases.
Researched Valbridge/Allen Brackett Shedd’s existing database.
Confirmed all comparable land sales with buyers, selling agents, and/or public
records.
Inspected all comparable sales and airports/rentals.
The first approach includes an analysis of surrounding airports with respect to the
subject property. We review the respective land classifications, methods of valuation,
trends, and actual rental rates at Auburn, and our conclusions consider the actual usage
of the airport and the various market forces present in surrounding airport properties.
The second approach involves the analysis of land values in the subject’s immediate
vicinity, concentrating on sites with similar allowed uses. These sales are compared to
the subject, with adjustments of specific factors leading to a conclusion of value. A
market rate of return is then applied to generate an opinion of market rent by this
approach.
Our reconciliation of these two approaches reflects consideration of existing rental rate
levels at competing facilities, surrounding land values as well as market rates of return.
Hypothetical Conditions/Extraordinary Assumptions
Hazardous Waste: We have no information regarding the presence or absence of
hazardous waste on the subject property. This appraisal
assumes the absence of any and all hazardous waste on the
subject property. If hazardous waste is found to be present on
the subject property, we reserve the right to change the
valuation contained in this report.
Title Conditions: No title commitment/ report was provided for review. Other
than conditions noted in the Legal Description section of this
report, we assume any other special exceptions are typical, and
that there is no adverse impact on value. We reserve the right
to modify our valuation upon review of current title conditions.
Site Conditions: The appraisal assumes all sites are vacant, with access and
utilities extended to each site. Site improvements are
considered in this analysis as discussed for “Improved Land”
areas.
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Neighborhood Map
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Marketing and Exposure Periods This is an analysis of market rents for individual land parcels at a municipal airport. The
airport will in all likelihood never be sold, and thus no marketing period estimate is
necessary. The individual parcels are leased on a long-term basis, but are not sold in fee
simple.
Personal Property There is no personal property reflected in the concluded rental rates. For assessment
purposes, however, the privately owned buildings may be classified as personal property
since they occupy leased land.
Area/ Neighborhood Description Demographic, economic, and growth data on the Puget Sound metropolitan area and
city of Auburn are widely available and well known to the client. This information can be
furnished on request.
Immediate Neighborhood
The immediate neighborhood of the subject property is bounded by West Valley
Highway (SR-167) on the west and Auburn Way N. on the east, extending from 37th
Street NE/NW on the north to 15th
Street NE/NW on the south. West Valley Highway
(SR-167) is located west of the subject and is accessed via 15th
Street NW. Emerald
Downs racetrack is located west of the subject on the east side of SR-167.
The subject properties are within Auburn Municipal Airport, also known as Dick Scobee
Field, located directly east of the racetrack and west of Auburn Way N. Facilities include
tie downs for approximately 130 aircraft and 150 open and closed hangars. There are an
additional 90± private small aircraft hangars. The airport includes a paved and lighted
runway 3,400 feet long, 75 feet wide, with GPS approach.
The airport neighborhood is characterized primarily by light industrial and
warehouse/office uses. Uses along “C” Street north of the airport are primarily
warehouse/offices built in the 1970s of metal construction. Newer concrete tilt-up
industrial development has occurred along 37th
Street, “B” Street, and throughout the
area. Auburn Way N., one block to the east of the airport, is a major north-south
arterial, leading north to Kent and south to Pacific, Sumner, and Pierce County. This
portion of Auburn Way N. has been developed with a number of new and used car
dealerships interspersed with auto repair and tire stores. It also includes some retail
services (gas stations and fast food restaurants, etc.). South of the airport along 15th
Avenue are a variety of retail and service-oriented users including fast-food restaurants,
gas stations, automobile, and other auto-related retail.
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Comparable Airport Map
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The area’s mixed development pattern is typical of Kent Valley/Auburn development in
general. Overall, the subject area is considered relatively stable.
Northwest Airports
We have conducted a survey of Northwest airports in the region, including analysis of
operations, land uses and values. The airports in our survey vary according to size,
location, surrounding land values, and type of aircraft typically handled. The subject
property is a general aviation facility located within a smaller suburban city, with
industrial and commercial land surrounding it. The following chart identifies the airports
considered in our survey:
Summary of Select Regional Airports
Proximity to Size
Airport Location Auburn (ac.)
Arlington Airport Arlington 71 miles north 1,137
Auburn Auburn Subject 110
Bellingham Bellingham 115 miles north 2,055
Boeing Field Seattle 25 miles northwest 594
Bremerton Bremerton 46 miles west 1,100
Olympia Olympia 42 miles south 1,632
Paine Field Everett 51 miles northwest 1,300
Renton Municipal Renton 15 miles north 170
Skagit/Bayview Burlington 85 miles northwest 1,835
Thun Field Puyallup 12 miles south 185
Tacoma Narrows Tacoma 15 miles west 568
Troutdale Airport Oregon 163 miles south 300
Hillsboro Airport Oregon 171 miles south 900
Most of the above airports are within 100 miles of Auburn Municipal Airport, in the
relatively busy Puget Sound area. In addition to these, Seattle-Tacoma International
Airport is the major commercial service airport in the region. The following summarizes
some specifics regarding runway and navigational aid characteristics at the competing
airports:
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Summary of Runway/Navigational Characteristics
Airport Lighting Tower Approach
Arlington Airport PAPI;MALSR No NonPrec. Instr.
Auburn Municipal VASI;REIL No NonPrec. Instr.
Bellingham HIRL;MALSR Yes Precision
Boeing Field PAPI; VASI Yes Precision
Bremerton VASI;MALSR No Precision
Olympia VASI;MALSR Yes Precision
Paine Field PAPI;VASI Yes Precision
Renton Municipal PAPI Yes NonPrec. Instr.
Skagit/Bayview VASI No NonPrec. Instr.
Thun Field PAPI No NonPrec. Instr.
Tacoma Narrows PAPI;MALSR Yes Precision
Hillsboro (OR) PAPI;VASI Yes Precision
Troutdale (OR) PAPI;VASI Yes Precision
Thun Field and Renton Municipal are the closest to the subject geographically. The
subject is the smallest in terms of land size. The airport has limited expansion capacity
in terms of land. The use of the airport in the future is expected to continue to support
general aviation and small corporate users.
Industrial Market
Most of the major commercial brokerage companies publish semi-annual surveys of
rent levels and vacancy rates. The data considered in each survey varies, as do the
boundaries of each submarket; so while there is some inconsistency in reporting, the
surveys do provide a broad overview of current conditions. According to reports
published by CoStar, we can look at the period between 2nd
Quarter 2009 and 2nd
Quarter 2014 for the Auburn/Kent Valley/Renton Industrial markets. The following
charts summarize some of the market statistics in these market areas:
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Industrial Lease Rates
Auburn/Kent Valley/Renton
2nd Qtr 2nd Qtr 2nd Qtr 2nd Qtr 2nd Qtr 2nd Qtr %
2009 2010 2011 2012 2013 2014 Change
Auburn
Flex Ind. N/A $13.20 $9.60 N/A $9.13 $7.52 N/A
Warehouse $5.15 $5.67 $5.21 $5.60 $5.21 $5.37 4.27%
Total Industrial $5.15 $5.70 $5.23 $5.60 $5.22 $5.40 4.85%
Kent Valley (North)
Flex Ind. $11.45 $10.91 $5.91 $10.55 $9.78 $12.34 7.77%
Warehouse $5.13 $4.46 $4.62 $4.95 $5.32 $5.16 0.58%
Total Industrial $5.36 $4.57 $4.65 $4.99 $5.53 $5.22 -2.61%
Kent Valley (South)
Flex Ind. $9.95 $10.38 $8.89 $7.85 $7.70 $9.84 -1.11%
Warehouse $5.96 $5.56 $5.65 $5.39 $5.62 $5.68 -4.70%
Total Industrial $6.11 $5.69 $5.74 $5.52 $5.69 $5.87 -3.93%
Renton
Flex Ind. $14.31 $9.93 $10.27 $10.39 $9.61 $11.34 -20.75%
Warehouse $5.61 $5.01 $4.88 $5.23 $5.49 $6.13 9.27%
Total Industrial $5.81 $5.41 $5.11 $5.34 $5.66 $6.44 10.84%
As can be seen, lease rates are up in every category in the subject’s marketplace
(Auburn) with the exception of Flex space, for which there is limited data available. They
are also up sectors of the Kent Valley (North), as well as Renton. The following graph
illustrates the above figures:
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The following chart shows vacancies for these same areas:
Vacancies
Auburn/Kent Valley/Renton
2nd Qtr 2nd Qtr 2nd Qtr 2nd Qtr 2nd Qtr 2nd Qtr %
2009 2010 2011 2012 2013 2014 Change
Auburn
Flex Ind. 3.7% 2.8% 3.3% 1.2% 1.8% 5.7% 54.05%
Warehouse 2.7% 7.8% 5.2% 3.6% 3.8% 3.4% 25.93%
Total Industrial 2.7% 7.6% 5.2% 3.6% 3.8% 3.5% 29.63%
Kent Valley (North)
Flex Ind. 6.9% 9.1% 23.9% 8.1% 7.9% 3.4% -50.72%
Warehouse 5.5% 12.3% 13.1% 8.8% 7.6% 7.5% 36.36%
Total Industrial 5.6% 12.2% 13.4% 8.8% 7.6% 7.4% 32.14%
Kent Valley (South)
Flex Ind. 5.0% 7.8% 9.2% 11.1% 7.8% 7.6% 52.00%
Warehouse 2.0% 5.6% 4.6% 5.8% 5.2% 5.3% 165.00%
Total Industrial 2.1% 5.7% 4.8% 6.1% 5.3% 5.4% 157.14%
Renton
Flex Ind. 39.7% 20.2% 15.7% 12.9% 5.3% 9.8% -75.31%
Warehouse 0.7% 7.7% 7.0% 5.5% 5.7% 3.7% 428.57%
Total Industrial 1.6% 8.0% 7.2% 5.7% 5.7% 3.8% 137.50%
The total industrial vacancy rate is up for the Auburn marketplace, as well as most
segments within the Kent Valley and Renton areas since the 2009 timeframe.
Net Absorption
Auburn/Kent Valley/Renton
2nd Qtr 2nd Qtr %
2013 2014 Change
Auburn
Warehouse -174,783 -57,040 67.37%
Total Industrial -174,783 -60,121 65.60%
Kent Valley (North)
Warehouse 337,133 178,858 -46.95%
Total Industrial 342,033 194,946 -43.00%
Kent Valley (South)
Warehouse 292,637 586,318 100.36%
Total Industrial 294,920 584,566 98.21%
Renton
Warehouse -93,952 -229,497 -144.27%
Total Industrial -93,952 -210,856 -124.43%
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The dramatic swings in the absorption figures above is explained by the uncertainty that
remains with regard to the overall economic conditions that continue to exist.
Description of the Subject Properties Pertinent information regarding the subject properties are summarized as follows:
Location: The properties are a portion of Auburn Municipal Airport. They
are in various locations on the east side of the runway between
16th
and 30th
Streets NE, in Auburn, King County, Washington.
See details in the Property Summary in this report.
General Description:
“Raw Land” Auburn Flight Services, and Auburn Condo Hangars are the two
“Raw Land” leases, with 120,580 and 147,766 square feet,
respectively. Generally these larger sites have been delivered to
the lessee with nominal improvements, with the lessee making
significant site improvements, such as excavation, grading,
wetlands mitigation, drainage, extension of utilities, and paving
and striping of aircraft taxiways between building sites or other
aviation improvements. The sites are generally rectangular, with
sufficient width and depth for the construction of multiple
buildings and/or other aviation improvements. The lessees are
responsible for maintenance of their sites and facilities within
the lease areas.
“Improved Land” The balance of the leases are generally smaller airport sites, with
the buildings occupying the majority of the site areas except for
small ingress/ egress areas adjacent to the building elevations.
Sites range in size from 8,892 to 98,326 square feet. The airport,
or lessor, made the site improvements up to the lease areas,
with the sites “ready-to-build” for the lessees’ buildings. This
included excavation, grading, drainage, utilities and taxiways and
other aviation improvements, which are also maintained by the
airport.
Site Areas: The individual leased sites range in size from 8,892 to 147,766
square feet.
Topography: Level and at grade with streets and runway/taxiway
improvements.
Access: Access is via secured gates through airport fencing, generally
from “E” Street NE or 30th
Street NE, depending on the site
locations. Runway access is via taxiways to the west.
Utilities: All utilities are available, with electrical extended to all sites, and
sewer extended.
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Zoning Map
C2 Central Business District
C3 Heavy Commercial District
LF Airport Landing Field District
M1 Light Industrial District
M2 Heavy Industrial District
Public Use District
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Sensitive Areas: We have not been provided with any sensitive area studies
relating to the properties. We are aware of wetlands areas to
the west of the runway, but our assumption is there are none
affecting the properties.
Soils: We have not been provided with a specific soils study relating to
the subject properties. Based on the improved status of the
properties both surrounding and along the periphery of the
airport, we assume the soils do not prohibit typical
development.
Zoning: The subject property is zoned LF, Airport Landing Field District,
under the City of Auburn Zoning Code. The LF classification is
intended primarily to accommodate airport and related uses.
Permitted uses include aircraft operations and businesses
necessary or convenient for airport operations, including offices,
cafés, hangars, etc. The entire zoning ordinance is lengthy, and
is retained in the appraisers’ file. Surrounding the airport are
light and heavy industrial zones, as well as a heavy commercial
zone along Auburn Way N.
Improvements: No building improvements are appraised in this assignment but
are summarized for the reader. Auburn Flight was improved in
the late 1970s with a 7,600-square-foot maintenance hangar,
including offices, parts, and shop areas. There are additional
other storage improvements attached to the main building, and
30 aircraft tie-down areas. Other site improvements include
vehicle parking, concrete aprons, taxiways, utilities, lighting,
fencing, and landscaping. Site improvements include taxiways,
utilities, lighting, fencing, and nominal landscaping. The
“Improved Land” sites are improved with a variety of
condominium hangars constructed from 2003 to 2007.
Assessed Value/Taxes: The subject properties (land only) are within a portion of a larger
municipally-owned property and, therefore, no taxes are
collected. The airport lessees pay a 12.84% leasehold excise tax
for the land lease areas, plus property taxes on privately owned
improvements.
Highest and Best Use Highest and best use is defined as: 3
The reasonably probable use of property that results in the highest value…….. To be
reasonably probable, a use must meet certain conditions.
3 From The Appraisal of Real Estate, Fourteenth Edition, 2013, Appraisal Institute, page 332
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A determination of highest and best use is guided by the following parameters: 1)
physically possible; 2) legally permissible; 3) financially feasible; and 4) maximally
productive. Highest and best use is analyzed both on an as vacant and as improved
basis.
As Vacant: Aviation related uses and/or supporting industrial and
commercial uses consistent with surrounding airport areas and
zoning.
As Improved: The subject improvements are not included in this appraisal, as
previously discussed.
Valuation Methodology Developing an opinion of market rent value requires an analysis of the subject
properties, as well as rates from other airports which offer similar services. In addition,
we have analyzed land sales that have occurred in the area surrounding the Auburn
Municipal Airport. These two methodologies are summarized as follows:
Method 1 - Direct Comparison - Comparable Airports
The first method of valuation is a direct comparison of rates at surrounding airport
properties. While we recognize that all airports are unique and, therefore, not “directly”
comparable, an analysis of pricing for similar services is certainly appropriate. Specific
lease information and valuation techniques were derived from several airports.
Method 2 - Sales Comparison Approach - Surrounding Off-Airport Land
The analysis of off-airport land sales is a widely used method of airport valuation. A
series of adjustments must be made which require subjective interpretation on the part
of the appraisers. We have applied specific adjustments for a series of identifiable
factors rather than a single lump sum adjustment. These are discussed within the Sales
Comparison Approach section of this report. It is important to note that the types of
uses surrounding the airport are typically industrial and commercial in nature and,
therefore, are suitable for this type of comparative analysis.
Once an appropriate land value is concluded, a rate of return is applied. This is derived
from the aviation market.
Correlation and Application of Rental Rates
Once the two methods are correlated, a final recommended rental rate is concluded
based on the relative merits of each. The application of rental rates is discussed relative
to the type of property, in this case for “Raw Land” and “Improved Land,” for aviation
purposes.
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Method 1 - Direct Airport Comparison We have conducted a study of Northwest airports. They range from smaller community
airfields to larger regional airports. The subject property falls in the General Aviation
classification, with characteristics typical of medium sized airports. This is a broad
category, but common characteristics include tie down and T-Hangar aircraft storage,
FBO facility, and a variety of aviation-oriented manufacturing or service companies. In
this analysis, we directly compare the subject property to other airports, with our
conclusion reflecting market rental rates for Auburn Municipal Airport lands.
The airports in our survey vary according to size, location, surrounding land values,
volume of operations, and type of aircraft that is typically handled. The subject property
is a general aviation facility located within a smaller suburban city, with industrial and
commercial land surrounding it. The chart previously provided in this report
summarizes the airports considered, their location (distance) relative to the subject
property, sizes, and other characteristics.
Actual rates obtained by the competing airports are summarized in the chart below.
This includes rates for both aviation and non-aviation lands, when applicable.
Airport Rental Rate Trends
1996 - 2014
1996 1999 2002 2009 Current % Change
Airport Rate Rate Rate Rate Rate ('09-current)
Arlington Airport $0.09 $0.14 $0.18 $0.22 - $0.25 $0.24 - $0.31 9.09% - 24%
Auburn Municipal N/A N/A N/A $0.26 - $0.49 $0.33 - $0.54 10.20% - 26.92%
Bellingham $0.20 - $0.37 $0.45 $0.23 - $0.45 $0.50 - $0.54 $0.585 8.33%
Boeing Field $0.33 - $0.67 $0.38 - $0.76 $0.44 - $0.88 $1.12 - $1.60 $1.12 - $1.60 0%
Bremerton N/A $0.14 $0.14 $0.14 - $0.28 $0.14 - $0.28 0%
Olympia $0.15 - $0.21 $0.17 - $0.18 $0.16 - $0.18 $0.27 $0.29 7.41%
Paine Field $0.26 - $0.38 $0.30 - $0.41 $0.30 - $0.41 $0.48 $0.52 8.33%
Renton Municipal $0.30 $0.26 - $0.30 $0.30 $0.57 $0.66 15.79%
Skagit/Bayview $0.34 $0.36 5.88%
Thun Field $0.31
Tacoma Narrows $0.31
Troutdale Airport (OR) N/A N/A N/A N/A $0.27 # N/A
Hillsboro Airport (OR) N/A N/A N/A N/A $0.38 # N/A
1) # Rates for these 2 OR airports were last documented in 2013, reflects no change since that timeframe.
2) Auburn Municipal: Indicates range due to Improved (Storm Water, Asphalt paving) vs. unimproved sites.
3) Bremerton: Rate range is for Airside vs. Non-Airside land. Rates have been same since 2006 per Airport Manager.
4) Rates for Paine Field Airport vary due to step increases. Excludes BOMARC/Commercial & West/NW Commercial.
Established land rates at other regional airports range between roughly $0.14 and $1.60
per square foot per year. Boeing Field, as expected, reflects the highest rate. The
remaining airports indicate a range from $0.14 to $0.66 per square foot for airport lands,
and the subject’s current rates fall within this range. We have considered the
breakdown of rates by use among the various airports, and have found inconclusive
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data to support differing land values among the various aviation uses. For the most part,
the same rate is charged for aviation (runway accessible) land regardless of use or
location on the airport. While there are some exceptions to this, the main adjustment is
due to lack of taxiway access, and even this is not universal. Bremerton Airport
continues this practice, with the lowest rate indicated in the above chart not having
direct apron or taxiway access.
The following graph charts the information provided above. It should be noted that for
those airports reporting a range, the upper end of the range was utilized in the graphs
below to avoid averaging of the categories.
$0.05
$0.20
$0.35
$0.50
$0.65
$0.80
$0.95
$1.10
$1.25
$1.40
$1.55
$1.70
1996 1999 2002 2006 2009 Current
Re
nta
l R
ate
/SF/
Yr.
Year
Airport Rental Rate Trends: 1996-Current (Approx.)
Arlington
Bellingham
Boeing Field
Olympia
Paine Field
Renton
Troutsdale
Hillsboro
Auburn
Skagit
Bremerton
Thun Field
Tacoma Narrows
Linear (Auburn)
As can be seen, there has generally been an upward trend in land lease rates since the
1996 timeframe. In terms of the subject, Auburn Airport is physically amongst one of
the smaller airports in the survey of comparable facilities. Historically at Auburn, rate
increases have been routinely applied in 5-year intervals. Rates at Bremerton have
essentially been held static since 2006 according to the Airport Manager as of June
2014.
Rate Conclusions - Direct Airport Comparison Approach
The various airports indicate rental rates between $0.14 and $1.60 per square foot per
year for aviation land. Based on our recent survey of comparable airports, although the
climate for general aviation has been uncertain due to the current economic conditions
that exist, several airports are in the process of increasing rates if they have not already
done so. Rate increases are generally moderate, and often based on appraisals that
have some basis in surrounding property values. Conversations with Mr. Rudolph at
Olympia Airport indicate that operations are up year-to-date from the previous year. In
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2012-13, they had 14 straight months of increases, with equal to or greater than
projected fuel flowage.
Paine Field currently has very little vacancy, with close to 99% occupancy, although there
is land available for development along the west side. Demand in and around the
airport appears to continue, with several market based transactions of both commercial
and industrial land sales in the vicinity of Paine Field. Paine Field has historically
demonstrated stepped increases, similar to other airports in the region; however, in
terms of rates, it has generally been below airports such as Renton and Bellingham.
Unlike the subject, Renton has a relatively limited supply of surrounding land for
development. Renton is currently a general aviation airport that supports small aviation
oriented businesses, T-Hangars, and the proximity to downtown Seattle makes it
attractive location for the growing light jet and turbo prop market.
Thun Field and Tacoma Narrows have a combination of ground leases based on a per
square foot basis, as well as those that are not. Airport staff did not report to us how
the other ground leases are determined. The rates at these airports are increased based
on CPI.
The subject has historically demonstrated lower rates than Renton and Boeing Field. We
believe that airports such as Boeing Field and Renton remain better positioned due to
the scarcity of land available for on-airport development, and continue to be considered
superior, particularly in terms of location.
Land rates at other airports have shown only modest increases in recent years. It should
also be noted that Renton Airport demonstrated below-market rates that remained
unadjusted for several years. After obtaining an MAI appraisal in 2007, the airport
adjusted rates to market. Bremerton has essentially remained unadjusted since 2006.
The subject property facilities are improved for GPS approach, and it has a desirable
close-in urban location near Seattle, as well as Tacoma. Considering Auburn’s location
and services, and the trend at comparable airport, we conclude a rental rate of $0.55
per square foot per year is indicated for the subject’s “Improved Land.”
For the subject’s larger aviation sites or “Raw Land,” there is no direct support from
comparable data among the general aviation airports as to a rate discount (or
off-airport land sales data), other than Paine Field, which grants roughly a 10% discount
on its market value of parcels larger than 15 acres. In addition, it should be noted that
given the characteristics of Boeing Field and the high demand at this airport, their
methodology has transitioned to discounts for size (Boeing parcels demonstrate a 20%
discount for occupying 100+ acres) and height restrictions near the Southeast corner of
the airport. Discussions with other airports in the Puget Sound Region also indicate
waiting lists for T-Hangar development, and generally improving conditions for General
Aviation relative to the Great Recession period of the late 2000’s.
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Generally, larger sites require less infrastructure by the airport and also result in more
leasable land than smaller sites developed. The majority of smaller airports do not have
large users. We believe that a discount of 35% is warranted for the subject’s larger
parcels relative to small sites, particularly given the site development requirements for
lessees under Auburn’s “Raw Land” leases. We conclude a rental rate in the range of
$0.36 per square foot per year is indicated for the subject’s “Raw Land.”
The concluded rates by the Direct Airport Comparison methodology are summarized as
follows:
Concluded Rates
Land Use Conclusion
Aviation - Improved Land $0.55
Aviation - Raw Land $0.36
Method 2 - Off-Airport Land Analysis This method of analysis requires a study of off-airport land values surrounding the
Auburn Municipal Airport. This study considers of lands with similar uses, which are not
actually on-airport property. It is not uncommon for airport land to be valued at a
discount from off-airport properties due to the aviation-related restrictions. Whether
such a discount is appropriate, and to what extent, depends on the characteristics of
both the surrounding land, as well as the airport facilities.
In this analysis, industrial and commercial zoned land has been considered. These
property types closely reflect the uses and characteristics of airport-related users in
Auburn. It should be noted that increasing off-airport land values may or may not
translate directly into airport land rates due to the different market dynamics for
aviation property.
A chart in this section summarizes land sales considered relevant and comparable. Full
details regarding each transaction are retained in the appraisers’ files.
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Comparable Land Sales Map
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Comparable Land Sales Chart
Sale Sale Gross Net Gross Net
Sale Identification Date Price Size (ac.) Size (ac.) Price/SF Price/SF Zoning
Auburn Sales
1 1401 W. Valley Hwy 01/2014 $740,000 2.09 2.09 $8.13 $8.13 M1
2 Industrial Site; N. side of 44th Street NW 08/2013 $954,310 2.50 2.50 $8.76 $8.76 M1
3 1580 A Street NE 01/2013 $2,766,500 6.56 5.86 $9.68 $10.84 C3
4 1600 M Street NW 08/2012 $2,350,000 9.60 6.81 $5.62 $7.92 C3
5 3136 B Street NW - Probuild Site 02/2012 $2,600,000 6.23 6.23 $9.58 $9.58 M2
Kent Sales
6 22201 W. Valley Hwy; Kent 02/2014 $1,400,000 1.61 1.61 $19.96 $19.96 M1
7 8800 S. 222nd Street; Kent 09/2013 $790,000 2.03 2.03 $8.93 $8.93 CM1
8 1061 Central Avenue S.; Kent 04/2013 $600,000 1.46 1.46 $9.43 $9.43 CM2
9 6906 S. 204th Street 08/2011 $2,531,616 5.88 5.88 $9.88 $9.88 M1
Summary of Data and Valuation Conclusions
The sales considered reflect an unadjusted value range of between $7.92 and $19.96 per
square foot. Excluding Sale 6, the sales demonstrate a much narrower range of between
$7.92 and $10.84 per square foot. The sales do not necessarily demonstrate a difference
in price due to size based on the above data. Roughly half of the comparables found
were between 1.46 and 2.5 acres in size, with 4 of the sales greater than 5 acres in size.
Considering the comparable sales, the characteristics of the typical Auburn “Improved
Land” parcels, and current market conditions, an off-airport base land value of $10.00
per square foot is concluded for these smaller, ready to develop sites.
Similar to the discount shown by the comparables for larger versus smaller sites, an
off-airport base land value of $6.50 per square foot is considered supportable for the
subject’s “Raw Land” parcels, giving primary weight to the industrial sales or commercial
sales adjacent to the airport or without major arterial exposure.
The off-airport base land values for the various categories are, therefore, summarized as
follows:
Base Land
Category Value/sf
Aviation - Improved Land $10.00
Aviation - Raw Land $6.50
Aviation Land Lease Adjustment
This report is primarily intended to provide a market rental rate opinion for aviation
land. As such, we have considered the effects of lease conditions and aviation use
restrictions on the value of on-airport property in comparison to off-airport land values.
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Summarized below are the various factors we have considered and their relative impacts
on value.
Lease Conditions: -10%. This adjustment considers that airport land is leased only.
Thus, a user does not enjoy the same unrestricted use and
benefits of fee simple ownership of the land.
Aviation Use
Restrictions: -10%. Several adjustments are considered under this category,
including Nature of Use, Density, and Demand.
Nature of Use considers that use of airport land is limited to
those uses either dependent, supportive, or complimentary to
aviation activities, considered as a more restrictive zoning
compared to off-airport land.
Density addresses the fact that aviation dependent uses typically
require a higher land-to-building ratio than otherwise similar
off-airport uses, although this is considered a relatively minor
issue for the subject properties.
Demand considers that while airport land is in limited supply,
most continue to have land available for development. It is also
recognized that the pool of potential users of airport land is
more limited than for off-airport land. We have also considered
the airport runway/navigational characteristics and other related
airport facilities.
Due to the subject’s smaller size and close-in urban location, supply is not considered a
significant factor for the subject properties, although demand for airport land is
considered more limited. The subject’s more limited facilities compared to other
airports are also a factor.
The total downward adjustment of all factors is 20%. Based on these adjustments the
effective land values are calculated as follows:
Effective Land Value Calculation
Adjustment Criteria
Base Lease Aviation Use Total Effective
Land Category Land Conditions Adjustment Adj. Base
Aviation - Improved Land $10.00 -10% -10% -20% $8.00
Aviation - Raw Land $6.50 -10% -10% -20% $5.20
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Rental Rate Analysis – Fair Rental (Land) In order to obtain a rate that can be compared with our first approach, we must derive a
rate from the airport land values concluded above. In developing a fair rental rate we
have considered methods utilized at other airports. Typical lease terms are 30 to 50
years, with rate negotiations every three to five years. These leases are exclusive of the
leasehold excise tax.
A review of the required rate for other airports can be found in the comparable airport
data chart presented. The majority of airports surveyed utilize a rate of return based on
appraised land value. Most airports presented rates between 7.5% and 10.0% of
appraised land value. The following chart breaks down the most recent rates, per our
survey of other airports:
Required Rates of Return
Required
Airport Rate
Arlington 7.50%
Auburn 8.00%
Bellingham 9.00%
Boeing Field 8.00%
Hillsboro Airport (OR) 10.00%
Olympia 8.50%
Paine Field 7.50%
Renton 8.00%
Skagit/Bayview 7.50%
Troutdale Airport (OR) 10.00%
Several of the airports surveyed utilize a rate of return based on appraised land value.
The rates provided by regional airports, were between 7.5% and 10% of appraised land
value. Many of the close-in airports are currently demonstrating rates between 7.5%
and 8.0%. Bellingham, located in the more remote Whatcom County area, recently
adjusted to a 9.0% rate of return on their land. The required rate of return has largely
been influenced by the overall economy which has shown some signs of stabilization
since the subprime mortgage collapse in the 2008-09 timeframe. Interest rates have
been held at bay due to the national recession that occurred.
Rates required in the private sector have long been in the 9% to 11% range for industrial
buildings, offices, and retail facilities. This supports the rates required by public
institutions, school districts, and municipalities.
As additional insight to the overall interest rate picture, we have examined both the
Overall Rates of Returns and Yield Rates for the period 2000 to 1st Quarter of 2014
(primarily improved properties). We have researched PwC (formerly Korpacz), which is a
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nationally recognized Investor Survey Publication on a variety of real estate types. The
following charts summarize both categories:
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
1998 2000 2002 2004 2006 2008 2010 2012 2014 2016
Ra
te (
%)
Year
Summary of Overall Rates (PwC Composite)
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
14.00%
1998 2000 2002 2004 2006 2008 2010 2012 2014 2016
Ra
te (
%)
Year
Summary of Yield Rates (PwC Composite)
As can be seen by the above charts, both the Overall Rates of Return and Yield Rates
experienced a brief rise, before showing a steady decrease after 2008.
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The chart below shows the same data with an additional overlay reflecting the typical
yield on 10-year treasury notes, as well as land development IRR’s:
As shown, the spread between the safe rate as indicated by the US Treasury notes, and
the composite of market yield rates widened after the recession, and has slightly
decreased since. Real estate, being relatively illiquid, tends to react more gradually to
periodic economic fluctuations; however, severe or prolonged downturns justify
additional analysis. When land sales activity slows in response to weak market
conditions, the result is little empirical data to support value conclusions reflecting
actual current conditions.
These rates reflect broad categories of real estate and changes in rates among aviation
facilities tend to occur more slowly, as demonstrated by regional airports over the past
several years. Considering the other airports in the above survey, and the proximity of
the other airports to the close-in markets relative to the subject, we believe that 7.5% is
considered supportable. Therefore, the following rental rate is concluded:
Concluded Land Rental Rates
Base Land Total Effective Base Annual Rate Annual Lease
Land Category Value/sf Adjustment Land Value/sf of Return Rate/sf
Aviation - Improved Land $10.00 -20% $8.00 7.50% $0.60
Aviation - Raw Land $6.50 -20% $5.20 7.50% $0.39
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Correlation and Conclusion of Rental Rates The two approaches indicate the following conclusions for aviation land value:
Approach Conclusions
Direct Comparison Off-Airport Analysis
Aviation - Improved Land $0.55/sf/yr $0.60/sf/yr
Aviation - Raw Land $0.36/sf/yr $0.39/sf/yr
The direct airport comparison indicated an aviation land lease rate for Auburn of $0.55
per square foot per year for “Improved” land, and $0.36 per square foot per year for
“Raw” sites. There is little empirical evidence to suggest differentiation among use
(corporate vs. general) or size. Our off-airport land analysis indicated a slightly higher
rate.
Most airports in the study have a high degree of uniformity among airport uses and
facilities, and a very clear indication of the facilities’ intended focus: i.e. general aviation
versus reliever or primary service airport. In arriving at a final conclusion, consideration
must be given to the subject’s location and built-out nature of the market surrounding
Auburn, as well as demand for aviation facilities in close proximity to the Seattle
marketplace and other nearby markets. We believe, however, that the Direct Airport
comparison is more valid in the current environment, as it provides some degree of
comparison with specific alternative facilities available to the typical tenant. Based on
our analysis of all relevant data, it is our opinion the market rent values of the subject
properties are as follows:
Concluded Rental Rates
Annual
Rental/sf
Aviation - Improved Land $0.55
Aviation - Raw Land $0.36
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CERTIFICATION OF VALUE
I, the undersigned, do hereby certify that, to the best of my knowledge and belief:
The statements of fact contained in this report and upon which the opinions herein
are based are true and correct.
The reported analyses, opinions, and conclusions are limited only by the reported
assumptions and limiting conditions, and are my personal, impartial, and unbiased
professional analyses, opinions, and conclusions
I have no interest, either present or prospective in the property 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 subject property, or to the parties involved.
My engagement in this assignment was in no way contingent upon developing or
reporting predetermined results, nor was it based on a requested minimum
valuation, a specific value, or the approval of a loan.
My compensation for completing this assignment is not contingent upon the
development or reporting of a predetermined value or direction in value that favors
the cause of the client, the amount of the value opinion, the attainment of a
stipulated result, or the occurrence of a subsequent event directly related to the
intended use of this appraisal.
The reported analyses, opinions, and conclusions were developed, and this report
has been prepared, in conformity with the requirements of the Code of Professional
Ethics & Standards of Professional Appraisal Practice of the Appraisal Institute, which
include the Uniform Standards of Professional Appraisal Practice.
I have not performed valuation or consulting services on this property in the past
three years.
I have made a personal inspection of the subject property.
No one provided significant real property appraisal assistance to the person signing
this certification, with the exception of the person(s) shown on additional
certification(s), if enclosed.
The use of this report is subject to the requirements of the Appraisal Institute
relating to review by its duly authorized representatives.
As of the date of this report, I have completed the continuing education program for
Designated member of the Appraisal Institute.
Murray S. Brackett, MAI
State Cert. #27011-1100853
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CERTIFICATION OF VALUE I, the undersigned, do hereby certify that, to the best of my knowledge and belief:
The statements of fact contained in this report and upon which the opinions herein are based are true and correct.
The reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions, and are my personal, impartial, and unbiased professional analyses, opinions, and conclusions
I have no interest, either present or prospective in the property 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 subject property, or to the parties involved.
My engagement in this assignment was in no way contingent upon developing or reporting predetermined results, nor was it based on a requested minimum valuation, a specific value, or the approval of a loan.
My compensation for completing this assignment is not contingent upon the development or reporting of a predetermined value or direction in value that favors the cause of the client, the amount of the value opinion, the attainment of a stipulated result, or the occurrence of a subsequent event directly related to the intended use of this appraisal.
The reported analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the requirements of the Code of Professional Ethics & Standards of Professional Appraisal Practice of the Appraisal Institute, which include the Uniform Standards of Professional Appraisal Practice.
I have not performed valuation or consulting services on this property in the past three years.
I have made a personal inspection of the subject property.
No one provided significant real property appraisal assistance to the person signing this certification, with the exception of the person(s) shown on additional certification(s), if enclosed.
The use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representatives.
As of the date of this report, I have completed the Standards and Ethics Education Requirements for Candidates/Practicing Affiliates of the Appraisal Institute.
David Coleman, Senior Appraiser State Cert. #27011-1101543
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Addenda
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Qualifications of Appraisers
Valbridge Property Advisors Allen Brackett Shedd
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Qualifications of S. Murray Brackett, MAI Senior Managing Director Valbridge Property Advisors Allen Brackett Shedd
Education
Bachelor of Arts in Business Administration, Western Washington University, 1985, with an emphasis on real estate.
Professional Education
Appraisal Courses: All appraisal courses required for MAI designation.
Seminars and Continuing Education (abbreviated summary of coursework):
Easement Valuation
UASFLA Seminar (Yellow Book) Real Estate Law Appraising From Blueprints Complexities of Predevelopment Land The Appraiser as Expert Witness Litigation Skills for the Appraiser The New Frontier of Takings Law Partial Acquisitions Workshop Condemnation Appraisal & Mock Trial Conservation Easement Appraisal - Certificate Course
Professional Affiliation
Member, Appraisal Institute. Received MAI Designation May 2, 1997 (Member No. 11,258)
Past President (2003), Seattle Chapter of the Appraisal Institute
Member, International Right-of-Way Association
Associate Member, Washington Airport Manager’s Association
Appraisal Experience Principal with Allen Brackett Shedd. Responsibilities include the full range of residential, commercial and industrial real estate valuation. Appraisals have been prepared on such diverse properties such as airports and airport-related facilities, park lands, subdivisions and golf courses, as well as typical commercial and industrial improved property. Airport work has included valuation of entire airports to assist in determining lease rates, valuation of adjacent properties for airport expansion, aviation related improved properties and avigation easements. Improved and Unimproved valuations have been performed for acquisitions in fee, leased fee and leasehold interests, partial takings, as well as various partial interests including the following: conservation easements, utility easements, subsurface easements, air-rights/avigation easements, and minority interests. Numerous Appraisals have been prepared for use in litigation, including eminent domain dispute resolution, condemnation and inverse condemnations. UASFLA-compliant Appraisals have been prepared for a wide variety of agencies on a wide range of property types.
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S. MURRAY BRACKETT, MAI (cont.) Qualified as an expert witness in King, Kitsap and Pierce County Superior Courts, US District Court, and Federal Bankruptcy Court. Geographic experience includes assignments in Washington, California, Oregon, Idaho, Nebraska, Iowa, Kansas, South Dakota, Alaska, and British Columbia.
Other Experience Instructor: Instructor, Income Property Appraisal, Lk Wa. Voc-Tec. Qualified Level 3 Facilitator, IRWA
Presentations: October 2003 - WPMA Conference – “The Valuation of Non-Water Dependent Properties.”
September, 2009 - Valuation of Airport Properties, WAMA
December 9, 2010 - AI-Seattle Fall R.E. Conference – Panelist/presenter for Appraisal Issues relating to Partial Acquisitions in Eminent Domain cases.
Representative Client List
Cities/Counties
Cities of Bellevue, Burien, Kirkland, Seattle, Kent, Everett, Renton, Auburn, Arlington, Anacortes, Tacoma, North Bend, Snoqualmie, Lake Forest Park, Kenmore, Bothell, Lynnwood, Port Angeles, Maple Valley, Puyallup, Woodinville and SeaTac. Counties of King, Snohomish, Pierce, Kitsap, Thurston, and Skagit. Government
Ports of Seattle, Everett, Olympia, Grays Harbor, Bremerton, Port Angeles, and Friday Harbor. Washington State Parks, WSDOT (Approved Appraiser List), DNR, Federal Aviation Administration, Internal Revenue Service, King County DNR, GSA, U.S. Navy, San Juan County Land Bank, Northshore School District, Snohomish School District, Sound Transit, USACE. Financial Institutions
Bank of America, U.S. Bancorp, Key Bank, Wells Fargo Trust, Commerce Bank, Homestreet Bank, Banner Bank, Charter Bank, Union Bank. Airports
Sea-Tac International Airport, Renton Municipal, Auburn Municipal, Snohomish County Airport (Paine Field), Arlington Municipal, Bellingham International, Olympia Airport, William Fairchild (Port Angeles), Spokane Int’l, Centralia/Chehalis, Bremerton National, Pullman Airport, and Friday Harbor Airport. Corporations and Non Profits
Weyerhaeuser Company, WRECO, Tramco, Plum Creek, McDonalds Corporation, Gull Industries, Puget Sound Energy, Development Services of America (DSA), FSA, Winmar Company, Jr. Achievement, Lowe Enterprises, PACCAR, Inc., The Trust for Public Land, Cascade Land Conservancy, Fletcher General Construction, Manke Lumber Company, Simpson Timber Company, New Ventures Group, OTAK, American Forest Resources, HDR, Inc., Hancock Natural Resources Group, Sierra Pacific Industries, Quadrant, Port Blakely Communities, Lowe Enterprises, Parsons Brinckerhoff, CH2M-Hill.
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S. MURRAY BRACKETT, MAI (cont.)
Attorneys
Hillis, Clark, Martin & Peterson; Kenyon Disend; Perkins Coie; Tousley Brain; Inslee Best; Graham and Dunn; Chmelik, Sitkin & Davis; Foster Pepper; Short Cressman; Davis Wright & Tremaine; Betts Patterson; Karr Tuttle Campbell; Anderson Hunter; Riddell Williams; Williams Kastner; Krutch Lindell; Curran Mendoza; Williams and Williams; and King County Prosecuting Attorney.
State Certification Number - General: 27011-1100853 Expiration: 11/21/15
(Revised 11/22/13)
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Qualifications of David Coleman Senior Appraiser Valbridge Property Advisors Allen Brackett Shedd
Education
Bachelor of Arts in Economic/Urban Geography with a focus in real estate development processes and project financial feasibility analysis, University of Washington, 1995.
Professional Education
Appraisal Courses: Highest and Best Use and Market Analysis (Appraisal Institute Course 520,
September 2006) Business Practices and Ethics (Appraisal Institute Course 420, April 2005) USPAP (Appraisal Institute, March 2005) Report Writing and Valuation Analysis (Appraisal Institute Course 540, August 2003) Residential Appraisal (Mykut Real Estate School, January 2003) What’s It Worth (Mykut Real Estate School, January 2003) USPAP (Bellevue Community College, Fall 2000) Income Capitalization (Appraisal Institute Course 310, March 2000) Foundations of Real Estate Appraisal (North Seattle Community College, March 2000) Real Estate Appraisal Procedures (Bellevue Community College, Fall 1999)
Appraisal Experience
Associate Appraiser with Allen Brackett Shedd. Responsibilities have included a variety of commercial, residential, and industrial real estate valuations. Appraisals have been prepared on such diverse properties such as park lands, airport property, subdivisions, sensitive areas, and easements. Undeveloped land valuations have been performed for acquisitions in fee, as well as, various partial interests including the following: conservation easements, utility easements, and right-of-way.
Associate Appraiser with Pacific Appraisal Associates. Responsibilities included a variety of commercial, rural residential, and agricultural valuations. Undeveloped land valuations primarily consisted of partial interests for right-of-way and conservation easements.
Summary of Real Estate Experience
Past: 05/98 – 01/02 & 11/02 to Current: Associate Appraiser with Allen Brackett Shedd (formerly Bruce C. Allen & Associates, Inc.)
2002: Pacific Appraisal Associates (Dennis Johnson, MAI - Wenatchee). Associate Commercial Appraiser concentrating on a variety of right-of-way projects, as well as commercial land valuations (including agricultural).
1996-1998: Martin Smith Real Estate Services. Included a variety of duties and departments that comprised of Lease Administration and Assistant Operations/Property manager. Responsibilities included the daily operations of implementing new leases, rent increases, tenant reimbursements and lease renewals for over 20 Martin Smith managed properties. Other duties included the responsibility for overseeing repairs and maintenance requests for over 6 million square feet of office space and the renovation of the company’s communications system with building engineers.
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DAVID COLEMAN (cont.)
1995-1996: Sarkowsky/Loebisser/Fagerholm (SLF) Management Company. Assistant Property Manager for The Plaza at Yarrow Bay, a Class A office building in Kirkland, Washington, and home to many prominent tenants such as AT&T Wireless, McDonald’s Corp. and Novell. Responsibilities included the day-to-day management of the project and it’s tenants, which included the coordination of cost estimates and contract work on the project.
Representative Client List Cities Counties
Arlington King County Bellevue King County Office of Open Space Kenmore Snohomish County Kirkland Maple Valley Seattle Sammamish SeaTac Public Agencies Private Agencies
Attorney General of Washington Bogle & Gates Puget Sound Energy Butcher, Willis, & Ratliff Corp. Trust for Public Land Jack McCann Company United States Navy Jones & Stokes Engineering Washington State Department of Transportation JRCO Partnership Land & Associates Airports Lang, Sly, Conner Development Arlington Municipal OTAK Chehalis-Centralia Pharos Port of Olympia Stinson Lane Vineyards Port of Port Angeles Weyerhaeuser Company Renton Municipal WRECO Snohomish County (Paine Field) Banks
Banner Bank Charter Bank Commerce Bank Frontier Bank State Certification Number – General: 27011-1101543 Expiration: 05/02/15
(Revised 11/13/13)