appraisal report · our analysis is presented in the following appraisal report. the subject is a...

KECHTER ROAD LAND BANK PROPERTY 3620 KECHTER ROAD, FORT COLLINS, COLORADO 80528 CBRE GROUP, INC. FILE NO. 18-271PH-0921-1 C ITY OF FORT COLL INS

APPRAISAL REPORT

CBRE VALUATION & ADVISORY SERVICES

VALUATION & ADVISORY SERVICES

2850 McClelland Drive, Suite 3500 Fort Collins, CO 80525

T 970.223.4378 F 970.223.4393

www.cbre.com

June 14, 2018 Ms. Kerri Allison Real Estate Specialist II CITY OF FORT COLLINS 300 Laporte Avenue,Building B Fort Collins, Colorado 80521 RE: Appraisal of: Kechter Road Land Bank Property 3620 Kechter Road, Fort Collins, Larimer County, Colorado CBRE, Inc. File No. 18-271PH-0921-1 Client Reference No.

Dear Ms. Allison:

At your request and authorization, CBRE, Inc. has prepared an appraisal of the market value of the referenced property. Our analysis is presented in the following Appraisal Report.

The subject is a 5.00-acre (217,800 sq. ft.) tract of land located at 3620 Kechter Road, in Fort Collins, Colorado. Although the property is improved with a single-family residence and some outbuildings, it is located in an area that is ripe for residential development. The City of Fort Collins holds title to the property, which was acquired for the affordable housing land banking program. Therefore, the property will be appraised under two valuation premises: First the property will be appraised As Is. Second, the property will be appraised as though the City has placed a deed restriction on the property requiring a developer to build affordable housing.

Based on the analysis contained in the following report, the market value of the subject is concluded as follows:

MARKET VALUE CONCLUSION

Appraisal Premise Interest Appraised Date of Value Value Conclusion

As Is Fee Simple Estate June 5, 2018 $1,200,000

As Deed Restricted Fee Simple Estate June 5, 2018 $700,000

Compiled by CBRE

The report, in its entirety, including all assumptions and limiting conditions, is an integral part of, and inseparable from, this letter.

Ms. Kerri Allison June 14, 2018 Page 2

The following appraisal sets forth the most pertinent data gathered, the techniques employed, and the reasoning leading to the opinion of value. The analyses, opinions and conclusions were developed based on, and this report has been prepared in conformance with, the guidelines and recommendations set forth in the Uniform Standards of Professional Appraisal Practice (USPAP), and the requirements of the Code of Professional Ethics and Standards of Professional Appraisal Practice of the Appraisal Institute. It also conforms to Title XI Regulations and the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA) updated in 1994 and further updated by the Interagency Appraisal and Evaluation Guidelines promulgated in 2010.

The intended use and user of our report are specifically identified in our report as agreed upon in our contract for services and/or reliance language found in the report. As a condition to being granted the status of an intended user, any intended user who has not entered into a written agreement with CBRE in connection with its use of our report agrees to be bound by the terms and conditions of the agreement between CBRE and the client who ordered the report. No other use or user of the report is permitted by any other party for any other purpose. Dissemination of this report by any party to any non-intended users does not extend reliance to any such party, and CBRE will not be responsible for any unauthorized use of or reliance upon the report, its conclusions or contents (or any portion thereof).

It has been a pleasure to assist you in this assignment. If you have any questions concerning the analysis, or if CBRE can be of further service, please contact us.

Respectfully submitted, CBRE - VALUATION & ADVISORY SERVICES Jon Vaughan, MAI, SR/WA Director CG# 100000631 www.cbre.com/jon.vaughan Phone: 970 223 4378 Mobile: 970 310 1339 Email: [email protected]

Certification

i Kechter Road Land Bank Property, Fort Collins, Colorado

Certification

We certify to the best of our knowledge and belief:

1. The statements of fact contained in this report are true and correct. 2. The reported analyses, opinions, and conclusions are limited only by the reported

assumptions and limiting conditions and are our personal, impartial and unbiased professional analyses, opinions, and conclusions.

3. We have no present or prospective interest in or bias with respect to the property that is the subject of this report and have no personal interest in or bias with respect to the parties involved with this assignment.

4. Our engagement in this assignment was not contingent upon developing or reporting predetermined results.

5. Our 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.

6. This appraisal assignment was not based upon a requested minimum valuation, a specific valuation, or the approval of a loan.

7. Our analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the Uniform Standards of Professional Appraisal Practice, as well as the requirements of the State of Colorado.

8. 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 and Standards of Professional Appraisal Practice of the Appraisal Institute.

9. The use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representatives.

10. As of the date of this report, Jon Vaughan has completed the continuing education program for Designated Members of the Appraisal Institute.

11. Jon Vaughan has made a personal inspection of the property that is the subject of this report. 12. No one provided significant real property appraisal assistance to the persons signing this

report. 13. Valuation & Advisory Services operates as an independent economic entity within CBRE, Inc.

Although employees of other CBRE, Inc. divisions may be contacted as a part of our routine market research investigations, absolute client confidentiality and privacy were maintained at all times with regard to this assignment without conflict of interest.

14. Jon Vaughan previously appraised the subject property in 2014. Jon Vaughan, MAI, SRWA CO CG#100000631 _

Subject Photographs

ii Kechter Road Land Bank Property, Fort Collins, Colorado

Subject Photographs

Aerial View

Subject Photographs

iii Kechter Road Land Bank Property, Fort Collins, Colorado

Northeasterly view from Kechter Road Northwesterly view from Kechter Road

Northeasterly view across the northern portion of the property

Southwesterly view across the western portion of the property

Northwesterly view across Kechter Road House on the property

Executive Summary

iv Kechter Road Land Bank Property, Fort Collins, Colorado

Executive Summary

Property Name

Location

Client

Highest and Best Use

As If Vacant

Property Rights Appraised

Date of Report

Date of Inspection

Estimated Exposure Time

Estimated Marketing Time

Land Area 5.00 AC 217,800 SF

Zoning

Buyer Profile Developer

Kechter Road Land Bank Property

May 28, 2018

Fee Simple Estate

Multifamily Residential Development

3620 Kechter Road, Fort Collins, Larimer County, CO 80528

June 13, 2018

City of Fort Collins

6 - 12 Months

6 - 12 Months

LMN (Low Density Mixed-Use Neighborhood) by the City of Fort Collins

VALUATION Total Per SF

Land Value As Is $1,200,000 $5.51

As Deed Restricted June 5, 2018Sales Comparison Approach $630,000 $2.89

Income Capitalization Approach $770,000 $3.54

CONCLUDED MARKET VALUE

Appraisal Premise Interest Appraised Value

As Is Fee Simple Estate $1,200,000

As Deed Restricted Fee Simple Estate $700,000

Compiled by CBRE

June 5, 2018

Date of Value

June 5, 2018

STRENGTHS, WEAKNESSES, OPPORTUNITIES AND THREATS (SWOT)

Strengths/ Opportunities

The subject is situated in a desirable neighborhood in the southeastern portion of the City of Fort Collins

Fossil Creek Reservoir and political boundaries create substantial barriers to entry for future greenfield development in the neighborhood

The subject is adjacent to parks to the west and south, which will protect the mountain views from the west edge of the property, in addition to providing excellent recreational amenities

Weaknesses/ Threats

The property is one-half mile from the closest bus stop There are several large cottonwood trees on the property, which must be preserved or

mitigated

Executive Summary

v Kechter Road Land Bank Property, Fort Collins, Colorado

EXTRAORDINARY ASSUMPTIONS

An extraordinary assumption is defined as “an assignment-specific assumption as of the effective

date regarding uncertain information used in an analysis which, if found to be false, could alter

the appraiser’s opinions or conclusions.” 1

None noted

HYPOTHETICAL CONDITIONS

A hypothetical condition is defined as “a condition, directly related to a specific assignment,

which is contrary to what is known by the appraiser to exist on the effective date of the

assignment results, but is used for the purposes of analysis.” 2

The subject is owned by the City of Fort Collins Affordable Housing Land Bank, but is not currently deed restricted to affordable housing. However, in addition to estimating the as is value, the property will be analyzed as though the property is deed restricted.

OWNERSHIP AND PROPERTY HISTORY

OWNERSHIP SUMMARY

CurrentOwner: City of Fort CollinsDate Purchased: Apr 30, 2002Purchase Price: $566,735Legal Reference 20020050960County/Locality Name: LarimerPending Sale: NoChange of Ownership - Past 3 Years No

Compiled by CBRE

EXPOSURE/MARKETING TIME

Current appraisal guidelines require an estimate of a reasonable time period in which the subject

could be brought to market and sold. This reasonable time frame can either be examined

historically or prospectively. In a historical analysis, this is referred to as exposure time. Exposure

time always precedes the date of value, with the underlying premise being the time a property

would have been on the market prior to the date of value, such that it would sell at its appraised

value as of the date of value. On a prospective basis, the term marketing time is most often

used. The exposure/marketing time is a function of price, time, and use. It is not an isolated

estimate of time alone. In consideration of these factors, we have analyzed the following:

exposure/marketing time information from the CBRE, Inc. National Investor Survey

The following table presents the information derived from these sources.

1 The Appraisal Foundation, USPAP, 2018-2019

2 The Appraisal Foundation, USPAP, 2018-2019

Executive Summary

vi Kechter Road Land Bank Property, Fort Collins, Colorado

EXPOSURE/MARKETING TIME DATA

Exposure/Mktg. (Months)Investment Type Range Average

CBRE Exposure Time EstimateCBRE Marketing Period Estimate

Source: CBRE National Investor Survey, RealtyRates.com Survey & PwC Real Estate Survey

6 - 12 Months

6 - 12 Months

Table of Contents

vii Kechter Road Land Bank Property, Fort Collins, Colorado

Table of Contents

Certification ......................................................................................................................... i

Subject Photographs ............................................................................................................ ii

Executive Summary ............................................................................................................. iv

Table of Contents ............................................................................................................... vii

Scope of Work ..................................................................................................................... 1

Area Analysis ...................................................................................................................... 5

Neighborhood Analysis ....................................................................................................... 8

Site Analysis ...................................................................................................................... 14

Zoning .............................................................................................................................. 17

Tax and Assessment Data .................................................................................................. 18

Highest and Best Use ........................................................................................................ 19

Land Value ........................................................................................................................ 21

Valuation As Deed Restricted to Affordable Housing .......................................................... 25

Reconciliation of Value ...................................................................................................... 33

Assumptions and Limiting Conditions ................................................................................ 34

ADDENDA A Land Sale Data Sheets B Legal Description C Client Contract Information D Qualifications E Additional Addendum 1 F Additional Addendum 2

Scope of Work

1 Kechter Road Land Bank Property, Fort Collins, Colorado

Scope of Work

This Appraisal Report is intended to comply with the reporting requirements set forth under

Standards Rule 2 of USPAP. The scope of the assignment relates to the extent and manner in

which research is conducted, data is gathered and analysis is applied.

INTENDED USE OF REPORT

This appraisal is to be used for internal decisions related to the potential sale of the subject

property, and no other use is permitted.

CLIENT

The client is City of Fort Collins.

INTENDED USER OF REPORT

This appraisal is to be used by officials of the City of Fort Collins, and no other user may rely on

our report unless as specifically indicated in the report.

Intended Users - the intended user is the person (or entity) who the appraiser intends will use the results of the appraisal. The client may provide the appraiser with information about other potential users of the appraisal, but the appraiser ultimately determines who the appropriate users are given the appraisal problem to be solved. Identifying the intended users is necessary so that the appraiser can report the opinions and conclusions developed in the appraisal in a manner that is clear and understandable to the intended users. Parties who receive or might receive a copy of the appraisal are not necessarily intended users. The appraiser’s responsibility is to the intended users identified in the report, not to all readers of the appraisal report. 3

PURPOSE OF THE APPRAISAL

The purpose of this appraisal is to estimate the market value of the subject property.

DEFINITION OF VALUE

The current economic definition of market value agreed upon by agencies that regulate federal

financial institutions in the U.S. (and used herein) is as follows:

The most probable price which a property should bring in a competitive and open market under

all conditions requisite to a fair sale, the buyer and seller each acting prudently and

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

definition is the consummation of a sale as of a specified date and the passing of title from seller

to buyer under conditions whereby:

1. buyer and seller are typically motivated;

3 Appraisal Institute, The Appraisal of Real Estate, 14th ed. (Chicago: Appraisal Institute, 2013), 50.

Scope of Work


2. both parties are well informed or well advised, and acting in what they consider their own best interests;

3. a reasonable time is allowed for exposure in the open market; 4. payment is made in terms of cash in U.S. dollars or in terms of financial arrangements

comparable thereto; and 5. the price represents the normal consideration for the property sold unaffected by special

or creative financing or sales concessions granted by anyone associated with the sale. 4

INTEREST APPRAISED

The value estimated represents Fee Simple Estate as defined below:

Fee Simple Estate - 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. 5

Extent to Which the Property is Identified

The property is identified through the following sources:

postal address assessor’s records legal description

Extent to Which the Property is Inspected

The property was inspected with officials from the City of Fort Collins on June 5, 2018. No

interior inspections of the structures on the property were conducted because the structures would

be razed upon development.

Type and Extent of the Data Researched

CBRE reviewed the following:

applicable tax data zoning requirements flood zone status demographics comparable data

Type and Extent of Analysis Applied

CBRE, Inc. analyzed the data gathered through the use of appropriate and accepted appraisal

methodology to arrive at a probable value indication via each applicable approach to value. For

vacant land, the sales comparison approach has been employed for this assignment.

4 Interagency Appraisal and Evaluation Guidelines; December 10, 2010, Federal Register, Volume 75 Number 237, Page 77472.

5 Appraisal Institute, The Dictionary of Real Estate Appraisal, 6th ed. (Chicago: Appraisal Institute, 2015), 90.

Scope of Work


Data Resources Utilized in the Analysis

DATA SOURCES

Item: Source(s):

Site DataSize Assessor's records

Improved DataBuilding Area Assessor's recordsNo. Bldgs. Physical inspectionYear Built/Developed Assessor's records

Economic DataBuilding Costs: Marshall Valuation Service, Local Homebuilders

OtherFlood Maps FEMA

Compiled by CBRE

APPRAISAL METHODOLOGY

In appraisal practice, an approach to value is included or omitted based on its applicability to the

property type being valued and the quality and quantity of information available. Depending on

a specific appraisal assignment, any of the following four methods may be used to determine the

market value of the fee simple interest of land:

Sales Comparison Approach; Income Capitalization Procedures; Allocation; and Extraction.

The following summaries of each method are paraphrased from the text.

The first is the sales comparison approach. This is a process of analyzing sales of similar,

recently sold parcels in order to derive an indication of the most probable sales price (or value) of

the property being appraised. The reliability of this approach is dependent upon (a) the

availability of comparable sales data, (b) the verification of the sales data regarding size, price,

terms of sale, etc., (c) the degree of comparability or extent of adjustment necessary for

differences between the subject and the comparables, and (d) the absence of nontypical

conditions affecting the sales price. This is the primary and most reliable method used to value

land (if adequate data exists).

The income capitalization procedures include three methods: land residual technique, ground

rent capitalization, and Subdivision Development Analysis. A discussion of each of these three

techniques is presented in the following paragraphs.

The land residual method may be used to estimate land value when sales data on similar parcels of vacant land are lacking. This technique is based on the principle of balance and the related concept of contribution, which are concerned with equilibrium among the agents of production--i.e. labor, capital, coordination, and land. The land residual technique can be used to estimate land value when: 1) building value is

Scope of Work


known or can be accurately estimated, 2) stabilized, annual net operating income to the property is known or estimable, and 3) both building and land capitalization rates can be extracted from the market. Building value can be estimated for new or proposed buildings that represent the highest and best use of the property and have not yet incurred physical deterioration or functional obsolescence.

The subdivision development method is used to value land when subdivision and development represent the highest and best use of the appraised parcel. In this method, an appraiser determines the number and size of lots that can be created from the appraised land physically, legally, and economically. The value of the underlying land is then estimated through a discounted cash flow analysis with revenues based on the achievable sale price of the finished product and expenses based on all costs required to complete and sell the finished product.

The ground rent capitalization procedure is predicated upon the assumption that ground rents can be capitalized at an appropriate rate to indicate the market value of a site. Ground rent is paid for the right to use and occupy the land according to the terms of the ground lease; it corresponds to the value of the landowner's interest in the land. Market-derived capitalization rates are used to convert ground rent into market value. This procedure is useful when an analysis of comparable sales of leased land indicates a range of rents and reasonable support for capitalization rates can be obtained.

The allocation method is typically used when sales are so rare that the value cannot be estimated

by direct comparison. This method is based on the principle of balance and the related concept

of contribution, which affirm that there is a normal or typical ratio of land value to property value

for specific categories of real estate in specific locations. This ratio is generally more reliable

when the subject property includes relatively new improvements. The allocation method does not

produce conclusive value indications, but it can be used to establish land value when the number

of vacant land sales is inadequate.

The extraction method is a variant of the allocation method in which land value is extracted from

the sale price of an improved property by deducting the contribution of the improvements, which

is estimated from their depreciated costs. The remaining value represents the value of the land.

Value indications derived in this way are generally unpersuasive because the assessment ratios

may be unreliable and the extraction method does not reflect market considerations.

For the purposes of this analysis, the sales comparison approach is employed to estimate the

market value of the property in its as is condition. With respect to the valuation as deed

restricted, sales data are limited. Therefore, in addition to the sales comparison approach, the

income capitalization/subdivision development approach is applied to estimate what a developer

could afford to pay for the land if it is developed for affordable housing.

Area Analysis


Area Analysis

Moody’s Economy.com provides the following Fort Collins, CO metro area economic summary

as of March 2018.

Subject

Area Analysis


FORT COLLINS, CO - ECONOMIC INDICATORSIndicators 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Gross Metro Product (C09$ Bil) 13.9 14.4 15.1 15.7 16.2 16.8 17.4 17.9 18.1 18.7 19.4 19.9

% Change 2.4 4.2 4.2 4.5 3.2 3.7 3.5 2.9 1.1 3.2 3.6 2.8

Total Employment (Ths) 140.0 144.5 149.6 155.5 161.2 165.8 170.1 172.1 172.4 172.8 175.0 176.5

% Change 2.7 3.2 3.5 4.0 3.7 2.9 2.6 1.2 0.1 0.3 1.2 0.9

Unemployment Rate (%) 6.7 5.6 4.2 3.2 2.8 2.2 2.2 1.8 2.4 3.0 3.0 3.0

Personal Income Growth (%) 6.3 5.7 8.1 6.6 4.0 5.4 4.7 4.8 3.9 4.1 4.7 4.2

Median Household Income ($ Ths) 57.2 57.8 60.7 63.7 66.5 69.3 72.0 74.1 75.3 76.8 78.8 80.7

Population (Ths) 310.8 316.3 324.3 333.4 339.4 343.7 347.8 351.9 356.3 360.7 365.4 370.0

% Change 1.8 1.8 2.5 2.8 1.8 1.3 1.2 1.2 1.2 1.2 1.3 1.3

Net Migration (Ths) 4.0 4.1 6.2 7.5 4.5 2.8 2.6 2.7 2.9 3.0 3.3 3.3

Single-Family Permits (#) 1,139.0 1,489.0 1,627.0 1,720.0 1,622.0 2,046.4 2,845.2 3,453.8 3,155.6 3,297.7 3,448.1 3,384.8

Multifamily Permits (#) 729.0 888.0 871.0 714.0 1,910.0 841.5 719.0 1,304.7 1,443.2 1,768.9 2,037.5 2,011.0

Fhfa House Price (1995Q1=100) 177.6 188.4 203.4 225.3 250.6 277.9 287.2 282.4 277.8 276.4 278.9 286.3

Source: Moody's Economy.com

RECENT PERFORMANCE

Fort Collins' expansion is moderating, but the metro area remains a top performer in the West.

Job growth is firmly above the Colorado and U.S. averages, and additions are widespread across

industries. Manufacturing is a standout-factory payrolls are the highest since 2002 and rising at

twice the state and U.S. rates. However, job creation in private industries has slowed over the past

few years as the labor market has become extraordinarily tight. Although up modestly since mid-

2015, the jobless rate, at 2.5%, is still the lowest in the state and consistent with a labor market at

or beyond full employment. Firms are hiking pay, and average hourly earnings in Fort Collins

exceed those nationally for the first time since 2008. Despite above-average income growth,

home sales and construction have moderated the past two quarters.

HIGH TECH

High-tech employment will rise this year and next, but more slowly than earlier in the expansion.

Although bountiful research opportunities and employers will encourage graduates from

Colorado State University to remain in Fort Collins, tech manufacturers such as Broadcom and

Hewlett Packard increasingly are able to raise output without adding workers thanks to heady

productivity gains and increased automation. Instead, tech job gains will be driven by consumer

systems design, which accounts for about one-fifth of tech positions, and scientific, research and

development and other professional and technical services, which together account for an

additional quarter of employment. Software publishers, responsible for just 5% of local tech jobs,

arguably are the best positioned as industries such as healthcare, finance and professional

services clamor to upgrade software in an effort to maximize profits and protect and grow market

share.

BREWERIES

Steady tech manufacturing payrolls will leave the door open for other parts of manufacturing and

specifically food and beverage, which will grow in importance in Fort Collins as craft brewers

Area Analysis


expand and help preserve above-average factory job growth. Fort Collins has one of the highest

concentrations of brewery manufacturing jobs in the U.S. Food and beverage manufacturing in

the area has doubled since 2010, now comprising about one-fifth of all factory jobs. With U.S.

wages rising, consumers will spend more on recreation, including alcoholic beverages.

Consumer tastes are shifting toward craft beers, increasing local brewery demand. At the end of

2017 there were 22 breweries in Fort Collins, and five more plan to open in 2018. Additionally,

multiple breweries are expanding, including Maxline Brewing, which will hire more workers once

it completes an investment that will double production capacity.

HELP WANTED

An unduly tight labor market will cap job gains as the expansion matures. Even with Fort Collins

sporting population growth that slightly exceeds the Colorado average and one of the fastest-

growing labor forces in the country, labor supply cannot keep up with demand. Fort Collins's

jobless rate is among the 15 lowest in the U.S. Population growth will need to accelerate to

achieve bigger job gains, but this is not expected because of low and eroding housing

affordability. Single-family housing in the area is 25% overvalued relative to fundamentals, an

ominous sign for net migration, which has already fallen from near 8,000 in 2015 to half that

last year.

CONCLUSION

Fort Collins' expansion will decelerate as supply constraints bite. Even with gains in tech services

and brewery expansions, job and income growth will fall in line with the U.S. average as worker

shortages grow more pronounced. Longer term, lower costs than in Denver and Boulder as well

as favorable demographics, including a high-skilled workforce, will help ensure Fort Collins is an

above-average performer.

Neighborhood Analysis



LOCATION

The subject is in the city of Fort Collins and is a suburban location. The city of Fort Collins is

situated in Larimer County, about 60 miles north of the Denver Central Business District.

Subject



NEIGHBORHOOD CHARACTERISTICS

Location: (urban, suburban, rural) Suburban

Built-Up: (>75%, 25-50%, <25%) 25% - 75%

Growth Rate / Change: (rapid, stable, slow) Stable

Change in Present Land Use: (not likely, likely*, taking place*) Likely *(*) From: Single-family estate to Multifamily

Neighborhood Boundaries

North:

South:

East:

West:

Source: CBRE

Harmony Road Corridor

Fort Collins Growth Management Area Limit

Fort Collins Growth Management Area Limit

College Avenue Corridor

LAND USE

Excluding the commercial corridors along College Avenue and Harmony Road, land uses in the

neighborhood are almost exclusively focused on residential uses, as illustrated in the following

table.

NEIGHBORHOOD LAND USE

Present Land Use %

Single Unit Residential: 40% Industrial: 5%

Multi-Housing: 20% Agricultural: 5%

Commercial: 5% Other: 25%

Commercial Land Use Patterns

Primary Commercial Thoroughfares:

Major Commercial Developments:

Source: CBRE

Harmony Technology Park/Harmony Commons

College Avenue, Harmony Road, Carpenter Road

The existing residential uses include a broad variety in quality and cost, from the Pleasant Grove

mobile home park on Trilby Road to the luxury estates in Homestead, Kechter Farm, and Fossil

Lake Ranch. The majority of homes within the neighborhood were constructed within the past

twenty years, and to date in 2018, the median sale price of detached single-family properties in

the neighborhood is $489,425, which is significantly above the City of Fort Collins' median home

price of $414,289. Recreational amenities in the neighborhood include Fossil Creek Reservoir,

which is primarily protected for wildlife habitat, Southridge Greens municipal golf course, and

two regional parks.



GROWTH PATTERNS

The subject neighborhood is within the primary path of growth in the City of Fort Collins, and is

in the growth stage of the neighborhood life cycle. However, there is a limited amount of land

available for future development. Ongoing residential developments within the neighborhood

include Kechter Farm and Mail Creek Crossing. Kechter Farm is a 415 estate-sized single-family

residential subdivision developed by Toll Brothers to the west of Zeigler Road, south of Kechter

Road. To the west of Kechter Farm, Richmond American Homes is finishing out the last few lots

in Mail Creek Crossing, a single-family residential subdivision with base prices ranging from

$432,000 to $475,000.

In addition to single-family residential development, attached dwellings and apartment

developments are under construction. A 36-unit townhome project is under construction on the

west side of Zeigler Road, just north of Kechter Road. Units in this development feature listing

prices in the range from $350,000 to $385,000. Townhome-style condominium units are under

construction in Morningside Village, north of Rock Creek Drive. Two- and three-bedroom units in

this development are offered at asking prices from $373,000 to $433,500. To the north of

Morningside Village, The 276-unit Vibe Apartments development is under construction on the

east side of Lady Moon Drive, south of Harmony Road. Finally, horizontal development has

commenced for a 366-unit apartment project in the southwest corner of Harmony and Strauss

Cabin Roads.

Commercial development is primarily situated in the Harmony Road corridor. The Harmony

Technology Park is situated in the southeast quadrant of Harmony and Zeigler Roads. This

project includes a wide variety of commercial and light industrial uses, including a limited service

motel, medical and professional offices, an assisted-living facility, several restaurants, and the

Banner Fort Collins Medical Center. To the south of the commercial uses, the 276-unit Vibe

Apartments development is under construction.

ACCESS

Access is via a grid system with the main east-west arterials being Harmony and Carpenter

Roads. College Avenue, Lemay Avenue, Timberline Road, and Interstate 25 form the primary

north-south routes. The neighborhood features good accessibility throughout, and convenient

access to other parts of the City.



DEMOGRAPHICS

Selected neighborhood demographics in from the subject are shown in the following table:

3620 Kechter Road,Fort Collins, CO 80528

Population

2022 Total Population 7,958 45,364 114,940




Annual Growth 2017 - 2022 2.59% 2.44% 2.25%

Annual Growth 2010 - 2017 4.58% 2.38% 2.33%

Annual Growth 2000 - 2010 14.01% 5.04% 3.10%

Households

2022 Total Households 2,691 16,941 45,055



2000 Total Households 453 7,490 24,809

Annual Growth 2017 - 2022 2.69% 2.40% 2.17%

Annual Growth 2010 - 2017 4.06% 2.18% 2.16%

Annual Growth 2000 - 2010 14.68% 5.61% 3.45%

Income

2017 Median Household Income $93,502 $89,345 $77,909

2017 Average Household Income $124,033 $116,509 $103,858

2017 Per Capita Income $43,516 $44,435 $41,816

2017 Pop 25+ College Graduates 1,605 9,862 23,544

Age 25+ Percent College Graduates - 2017 22.9% 24.5% 22.9%

Source: ESRI

SELECTED NEIGHBORHOOD DEMOGRAPHICS

1 Mile Radius 3 Mile Radius 5 Mile Radius

CONCLUSION

The subject neighborhood has experienced strong development in recent years, and is in the

growth stage of the neighborhood lifecycle. Land area available for additional development is

becoming scarce due to natural and political constraints. This scarcity has driven land prices up

within the neighborhood, which is anticipated to continue as the remaining sites are absorbed

over the coming years. The forces of value in the neighborhood exert a generally positive

influence on the subject property.

Site Analysis


PLAT MAP

Site Analysis


FLOOD PLAIN MAP

Site Analysis


Site Analysis

The following chart summarizes the salient characteristics of the subject site.

SITE SUMMARY AND ANALYSIS

Physical DescriptionGross Site Area 5.00 Acres 217,800 Sq. Ft.Net Site Area 5.00 Acres 217,800 Sq. Ft.Primary Road Frontage Kechter Road 349 FeetAverage Depth 0 FeetExcess Land Area None n/aSurplus Land Area None n/aShapeTopographyZoning DistrictFlood Map Panel No. & Date 08069C0994F 19-Dec-06Flood Zone Zone X (Unshaded)Adjacent Land UsesEarthquake Zone

Comparative AnalysisVisibilityFunctional UtilityTraffic VolumeAdequacy of UtilitiesLandscapingDrainage

Utilities AvailabilityWater YesSewer YesNatural Gas YesElectricity YesTelephone YesMass Transit 1/2 mile from stop

Other Yes No UnknownDetrimental Easements xEncroachments xDeed Restrictions PoposedReciprocal Parking Rights x

Source: Various sources compiled by CBRE

Assumed adequateAverage

ProviderFort Collins-Loveland Water

Assumed adequate

TransFort

South Fort Collins SanitationXcelCity of Fort CollinsCenturyLink

RatingAverageAverageAverage

RectangularGenerally LevelLMN (Low Density Mixed-Use Neighborhoo

N/ACommercial and residential uses

LOCATION

The subject is on the north side of Kechter Road, about one-half mile east of Zeigler Road.

Site Analysis


INGRESS/EGRESS

The site is accessed by Kechter Road, which extends along the southern edge of the site. Kechter

Road connects to Ziegler Road, which is a north-south corridor that extends between Trilby to

Drake Roads, approximately one-half of a mile to the west of the subject site. This provides good

accessibility.

TOPOGRAPHY AND DRAINAGE

The site features a relatively level topography at an elevation of approximately 4,890 feet.

Surface drainage is adequate.

SOILS

A soils analysis for the site has not been provided for the preparation of this appraisal. In the

absence of a soils report, it is a specific assumption that the site has adequate soils to support the

highest and best use.

EASEMENTS AND ENCROACHMENTS

There are no known easements or encroachments impacting the site that are considered to affect

the marketability or highest and best use. It is recommended that the client/reader obtain a

current title policy outlining all easements and encroachments on the property, if any, prior to

making a business decision.

COVENANTS, CONDITIONS AND RESTRICTIONS

There are no known covenants, conditions or restrictions impacting the site on the date of value.

However, the property owner is considering encumbering the site with a deed restriction that

would restrict future uses of the site to affordable housing. This would reduce the potential pool

of buyers and the potential profitability of development, which would negatively impact the value

of the property.

UTILITIES AND SERVICES

The site includes all municipal services, including police, and fire services. Refuse garbage

collection is a privately contracted service available from several providers. All utilities are

available to the site in adequate quality and quantity to service the highest and best use.

ENVIRONMENTAL ISSUES

The appraiser is not qualified to detect the existence of potentially hazardous material or

underground storage tanks which may be present on or near the site. The existence of

hazardous materials or underground storage tanks may affect the value of the property. For this

appraisal, CBRE, Inc. has specifically assumed that the property is not affected by any hazardous

materials that may be present on or near the property.

Site Analysis


ADJACENT PROPERTIES

The adjacent land uses are summarized as follows:

North: Single-family residences in the Observatory Village subdivision South: Radiant Park and Zach Elementary School East: Storm water detention area and single-family residences in Observatory Village West: Twin Silo Community Park and Fossil Ridge High School

The adjacent properties well maintained. Furthermore, the parkland to the west of the subject

property provides protected mountain and pond views, which significantly enhance the appeal of

the subject property.

CONCLUSION

The site is well located in a desirable neighborhood with excellent community amenities. Overall,

the site is well suited for a wide variety of potential uses.

Zoning


Zoning

The following chart summarizes the subject’s zoning requirements.

ZONING SUMMARYCurrent Zoning LMN (Low Density Mixed-Use Neighborhood)

by the City of Fort CollinsLegally Conforming YesUses Permitted Low density residential and limited

complementary commercial uses

Zoning Change Not likely

Category Zoning Requirement

Maximum Height 3 StoriesMaximum Density 12 Dwelling Units/AcreSubject's Actual Density 0.2 Units/Acre

Source: Planning & Zoning Dept.

ANALYSIS AND CONCLUSION

The current zoning would allow development of up to 9 dwelling units per acre. However, if a

development is phased or includes affordable housing, the allowable density increases to 12

dwelling units per acre. Additional information may be obtained from the appropriate

governmental authority. For purposes of this appraisal, CBRE has assumed the information

obtained is correct.

Tax and Assessment Data


Tax and Assessment Data

AD VALOREM TAX INFORMATION

Parcel Assessor's Parcel No. Parcel Description 2017 20181 8604000924 125,500 123,600

Subtotal $125,500 123,600

Assessed Value @ 29% 29%36,395 35,844

General Tax Rate (per $1,000 A.V.) 9.232800 9.232800

Source: Assessor's Office

The property is owned by the City of Fort Collins and is not being taxed.




In appraisal practice, the concept of highest and best use represents the premise upon which

value is based. The four criteria the highest and best use must meet are:

legally permissible; physically possible; financially feasible; and maximally productive.

The highest and best use analysis of the subject is discussed below.

AS VACANT

Legal Permissibility

The legally permissible uses were discussed in the Site Analysis and Zoning Sections. The zoning

allows a maximum density of nine dwelling units per acre, which calculates to a total of 45

dwelling units on the subject site. However, the zoning standards allow up to twelve dwelling

units per acre, if the site is developed in phases or includes affordable housing, which would

allow a total of 60 affordable dwelling units.

Physical Possibility

Site dimensions and relatively level topography allow for efficient land utilization. Access is good

via asphalt-paved neighborhood streets. The site is enhanced by its proximity to supporting

services, such as shopping, schools, houses of worship, and so forth. All utilities necessary have

been extended to the site, and they are adequate. Overall, it appears that, physically, there are

several possible uses for the site.

Financial Feasibility

The determination of financial feasibility is primarily dependent on the relationship of supply and

demand for the legally probable land uses versus the cost to create the uses. Nearby townhome

and condominium developments include Morningside Village and the Park Townhomes at Fossil

Ridge. Through the first few months of 2018, Landmark Homes has closed on 10 units at prices

ranging from $271,834 to $387,275 in Morningside Village. The Park Townhomes at Fossil

Ridge began selling units in May of 2018 and has closed on 10 units at prices ranging from

$337,500 to $380,597. Units in both of these projects are selling as soon as they are finished.

With respect to multifamily development, the Colorado Division of Housing reported that

the vacancy rate for multifamily rental units in the City of Fort Collins was 3% in the 4th quarter of

2017, and the average rental rate increased to $1,301 per month from $1,221 per month in the

4th quarter of 2016, which calculates to a year-over-year escalation of 6.6 percent. Persistent low

vacancy and strong rent growth has led to construction of several new apartment communities in

the City of Fort Collins, which have added more than one thousand units to the market over the

past few years. These projects are generally focused on a few areas within the City, including the



neighborhood around Colorado State University, Downtown, and the Southeast neighborhood.

With continued population growth that is anticipated over the coming years, multifamily

development for tenant occupancy is anticipated to continue, and represents a financially feasible

use of the site. Overall, multifamily residential development appears to be financially feasible for

the subject site.

Maximum Productivity - Conclusion

The final test of highest and best use of the site as if vacant is that the use be maximally

productive, yielding the highest return to the land. Based on the information presented above

multifamily residential development at a density of 12 dwelling units per acre represents the

maximally productive use of the site.

Land Value


Land Value

The following map and table summarize the comparable data used in the valuation of the subject

site. A detailed description of each transaction is included in the addenda.

Land Value


SUMMARY OF COMPARABLE LAND SALESActual Sale Adjusted Sale Size Size Density Allowable Price Price Per

No. Property Location Type Date Proposed Use Price Price 1 (Acres) (SF) (UPA) Units Per SF Bldg Unit

1 Osiander StreetFort Collins, CO 80524

Sale Jul-16 Multifamily Residential

$1,075,600 $1,075,600 5.84 254,227 12.68 74 $4.23 $14,535

2 416 East Horsetooth RoadFort Collins, CO 80525

Sale Jan-17 Multifamily residential

$1,000,000 $1,000,000 2.73 118,936 19.04 52 $8.41 $19,231

3 5305 S Zeigler RoadFort Collins, CO 80528

Sale Apr-17 Multifamily residential

$991,500 $991,500 3.08 134,009 11.70 36 $7.40 $27,542

4 TBD Harmony RoadFort Collins, CO 80525

Sale May-17 Multifamily residential

$2,000,000 $2,000,000 2.79 121,623 41.55 116 $16.44 $17,241

5 East of College Avenue between Conifer Street and Suniga RoadFort Collins, CO 80524

Sale Nov-17 Multifamily residential

$3,420,655 $3,420,655 13.77 599,949 22.07 304 $5.70 $11,252

Subject 3620 Kechter Road,Fort Collins, Colorado

--- --- Multifamily Residential

Development

--- --- 5.00 217,800 12.00 60.00 --- ---

1 Adjusted sale price for cash equivalency and/or development costs (where applicable)Compiled by CBRE

Transaction

The sales utilized represent the best data available for comparison with the subject and were

selected from the Fort Collins area within a 9-mile radius of the subject.

ELEMENTS OF COMPARISON

The sales have been compared to the subject and, where necessary, have been adjusted for

transactional elements, such as expenditures made immediately after purchase, property rights

conveyed, financing terms, conditions of sale, and market conditions. The following discussion focuses

exclusively on the elements that require adjustment.

Market Conditions

Economic conditions may change between the sale date of the comparables and the effective

date of value provided. These changes in supply and demand characteristics tend to exert some

impact on real estate prices. The adjustment for this factor is not a function of time, but of

differences in economic conditions, if any, between time periods. Thus, it is possible a period of

time could elapse with no material change in market conditions having occurred.

Sale and resale data from Comparable Two suggest a price escalation of 12%. However,

one data point is not adequate to support a broad trend. Overall, the pace of multifamily

rent growth has slowed, while construction costs continue to rise. As a result, the market

escalation rate for multifamily residential land should be lower than the rate indicated by

Comparable Two. Overall, an escalation rate of 5% is being applied.

Size

An adjustment for size typically recognizes the concept of economies of scale, in that all other

things being equal, a larger property will sell for less per measurable unit than a smaller

property, and vice versa.

Negative adjustments to Comparables Two, Three, and Four, are necessary to account for

their smaller sizes.

Land Value


A positive adjustment has been applied to Comparable Five, which is significantly larger

than the subject property.

Shape

The shape of a property impacts its functional utility and desirability. Triangular parcels or

narrow parcels tend to be discounted for their reduced utility compared to typical, rectangular

lots.

A positive adjustment is applied to Comparable Two, which tapers to a narrow point at

the east end of the property.

Location

An analysis of location takes into account differences in the comparables relative to their

surrounding environs. Linkages to complementary land uses exert positive influences on value,

while proximity to undesirable land uses exert negative influences.

Comparables One and Five are situated in the North College Avenue corridor, which

features light industrial influences that are inferior to the subject property. Therefore,

positive adjustments are being applied.

Zoning/Density

All other things being equal, investors will typically pay less on a per-dwelling unit basis for

developments with higher densities.

Comparables Two, Four, and Five feature higher development densities that are inferior

to the subject property. Therefore, positive adjustments are being applied.

SUMMARY OF ADJUSTMENTS

Based on our comparative analysis, the following chart summarizes the adjustments warranted to

each comparable.

Land Value


LAND SALES ADJUSTMENT GRID

Comparable Number 1 2 3 4 5 SubjectTransaction Type Sale Sale Sale Sale Sale ---Transaction Date Jul-16 Jan-17 Apr-17 May-17 Nov-17 ---Proposed Use Multifamily

ResidentialMultifamily residential

Multifamily residential



Multifamily Residential

DevelopmentActual Sale Price $1,075,600 $1,000,000 $991,500 $2,000,000 $3,420,655 ---

Adjusted Sale Price 1 $1,075,600 $1,000,000 $991,500 $2,000,000 $3,420,655 ---Size (Acres) 5.84 2.73 3.08 2.79 13.77 5.00Size (SF) 254,227 118,936 134,009 121,623 599,949 217,800Density (UPA) 12.68 19.04 11.70 41.55 22.07 12.00Allowable Units 74.00 52.00 36.00 116.00 304.00 60.00Price Per Unit $14,535 $19,231 $27,542 $17,241 $11,252 ---Price ($ Per Unit) $14,535 $19,231 $27,542 $17,241 $11,252Property Rights Conveyed 0% 0% 0% 0% 0%Financing Terms 1 0% 0% 0% 0% 0%Conditions of Sale 0% 0% 0% 0% 0%Market Conditions (Time) 10% 7% 6% 5% 3%Subtotal $15,989 $20,577 $29,194 $18,103 $11,590Size 0% -5% -5% -5% 20%Shape 0% 5% 0% 0% 0%Access 0% 0% 0% 0% 0%Frontage 5% 10% 0% 10% 10%Topography 0% 0% 0% 0% 0%Location 10% 0% 0% 0% 10%Zoning/Density 0% 5% 0% 10% 5%Utilities 0% 0% 0% 0% 0%Highest & Best Use 0% 0% 0% 0% 0%Total Other Adjustments 15% 15% -5% 15% 45%Value Indication for Subject $18,387 $23,663 $27,734 $20,819 $16,805Absolute Adjustment 25% 32% 11% 30% 48%1 Adjusted sale price for cash equivalency and/or development costs (where applicable)Compiled by CBRE

CONCLUSION

Based on the preceding analysis, Comparables One and Three required the least amount of

adjustment and were given greatest consideration. In conclusion, the comparables bracket and

support a value of $20,000 per dwelling unit in the as is condition, without any affordable

housing restriction. The following table presents the valuation conclusion:

CONCLUDED LAND VALUE

$ Per Unit Subject Units Total

$20,000 x 60 = $1,200,000Indicated Value: $1,200,000

(Rounded $ Per Unit) $20,000

Compiled by CBRE

Valuation As Deed Restricted


Valuation As Deed Restricted to Affordable Housing

INCOME APPROACH – DISCOUNT CASH FLOW ANALYSIS

The land residual technique backs into the land value by analyzing the value of a property as

proposed to be improved and deducting the cost new of the improvements. Although the site is

currently vacant, under the affordability constraints, only affordable apartments or owner-

occupied residential units are permissible. Therefore, this analysis will be used to test the

feasibility of developing affordable dwellings on the subject site. The value of the property upon

completion of affordable units that exceeds the cost to construct the improvements and

entrepreneurial incentive is attributable to the land.

The property will be restricted by a City of Fort Collins ordinance to be used for development of

residential units that are affordable to owner-occupants who earn 80% or less of the area median

income (AMI). The zoning allows a density of twelve dwelling units per acre for affordable

housing products, which calculates to a maximum of 60 dwelling units (5.000 acres x 12 dwelling

units per acre).

The first step is to analyze the value of the improvements based on the rental income or sale

prices of the affordable units that could be constructed on the subject site. The following table

illustrates the potential project pricing, which is based on the number of occupants in a unit. The

table is followed by a description of the assumptions used to develop the rental rates and sales

prices.

Income % of AMI

Household Members 1 2 3 4 5 6 7 8

100% $59,600 $68,100 $76,600 $85,100 $92,000 $98,800 $105,600 $112,400 80% $47,700 $54,500 $61,300 $68,100 $73,550 $79,000 $84,450 $89,900 60% $35,760 $40,860 $45,960 $51,060 $55,200 $59,280 $63,360 $67,440 50% $29,800 $34,050 $38,300 $42,550 $46,000 $49,400 $52,800 $56,200 30% $17,900 $20,450 $23,000 $25,550 $29,420 $33,740 $38,060 $42,380

The affordable sale price is based on Federal Housing Administration (FHA) standards. These

lending standards limit housing payments to 38 percent of gross income and allow a 96.5

percent loan-to-value. The loan is assumed to carry a 30-year term and an interest rate of 4.5%.

This analysis also assumes taxes and insurance costs comprise 15% of the monthly principle,

interest, taxes, and insurance (PITI) payment. The FHA also charges an upfront premium of

1.75% of the loan amount and ongoing premium payments of 0.85% of the loan balance per

year.



Income 3 4 5 6 7 8

AMI $76,600 $85,100 $92,000 $98,800 $105,600 $112,400

80% $61,300 $68,100 $73,600 $79,000 $84,500 $89,900 Maximum Housing

Payment$1,941 $2,157 $2,331 $2,502 $2,676 $2,847

Utilities & HOA $290 $320 $350 $380 $410 $440

PITI $1,651 $1,837 $1,981 $2,122 $2,266 $2,407

Principle and Interest $1,238 $1,377 $1,486 $1,591 $1,699 $1,805

Maximum Mortgage $244,407 $271,840 $293,180 $314,051 $335,391 $356,262

Maximum Sale Price $253,272 $281,700 $303,813 $325,441 $347,555 $369,183

Household Members

The remainder of this analysis will focus on households of 4, which should not significantly

impact the results because larger households require larger dwelling units that carry

commensurately higher construction costs. The maximum affordable sale price for a family of 4

is approximately $280,000, based on the assumptions in the preceding table. An efficient floor

plan, similar to those in the Provincetowne development, can accommodate 3 bedrooms and 2½

bathrooms in approximately 1,200 square feet. The following cost estimate was developed using

the Marshall Valuation Service Cost Manual.



MARSHALL VALUATION SERVICE COST SCHEDULE

Primary Building Type: Height per Story: 10'Effective Age: Number of Buildings: 10Condition: Gross Building Area: 72,000 SFNumber of Units: Average Unit Size: 1,200 SFNumber of Stories: Average Floor Area: 36,000 SF

MVS Sec/Page 12/31/401Quality/Bldg. Class Good/D Masonry VeneerBuilding Component TownhomeComponent Sq. Ft. 72,000 SFBase Square Foot Cost $109.98

Square Foot RefinementsHeating and Cooling $4.38Sprinklers $2.63Appliance Package $3.75Subtotal $120.74

Height and Size RefinementsNumber of Stories Multiplier 1.000Height per Story Multiplier 1.060Floor Area Multiplier 1.029Subtotal $131.70

Cost MultipliersCurrent Cost Multiplier 1.06Local Multiplier 0.98

Final Square Foot Cost $136.81

Base Component Cost $9,850,014

Base Building Cost (via Marshall Valuation Service cost data) $9,850,014Additions

Signage, Landscaping & Misc. Site Improvements (not included above) $30,000Parking/Walks (not included above) $500,000Other $0

Direct Building Cost $10,380,014

Indirect Costs 10.0% of Direct Building Cost $1,038,001Direct and Indirect Building Cost $11,418,015Rounded $11,418,000

Compiled by CBRE

602

Townhomes0 YRSNew



Based on this estimate, the direct construction costs calculate to $144.17 per square foot

($10,380,014 ÷ 72,000 square feet). Adding indirect costs and fees to the direct costs results in

a total cost per unit of $214,605, as follows:

HOME CONSTRUCTION COST BY PHASE

Average Direct Cost Indirect Cost GovernmentPhase Home Size Per SF Per Sf Fees Model/Other Total

I 1,200 SF 144.17$ 14.42$ $24,301 $0 $214,605Source: CBRE

Based on the preceding analysis, the following discounted cash flow analysis is structured to

model the potential development.

3620 Kechter RoadCondominium Development Approach"As Deed Restricted" Land Value

General AssumptionsNumber of Lots 60 Discount Rate 12.00%Annual Home Price Appreciation Rate 3.0% Frequency Period QuartersAnnual Home Cost Appreciation Rate 5.0% Absorption/Period 8.0Annual Tax Appreciation Rate 2.0% No. of Phases 1

Period (Quarters) 1 2 3 4 5 6 7 8

Development ForecastTotal Homes Constructed 8.0 8.0 8.0 8.0 8.0 8.0 8.0 4.0Total Homes Sold 8.0 8.0 8.0 8.0 8.0 8.0 8.0 4.0Units Built and Unsold 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0Number of Unsold Units 52 44 36 28 20 12 4 0

Sales Revenue

Sales - Phase I 8.00 8.00 8.00 8.00 8.00 8.00 8.00 4.00Average Sale Price - Phase I $280,000 $282,100 $284,216 $286,347 $288,495 $290,659 $292,839 $295,035

Total Sales Revenue Per Period $2,240,000 $2,256,800 $2,273,726 $2,290,779 $2,307,960 $2,325,269 $2,342,709 $1,180,140

Construction Forecast

Home Construction 8.00 8.00 8.00 8.00 8.00 8.00 8.00 4.00Average Cost Per Home $214,605 $217,288 $220,004 $222,754 $225,538 $228,358 $231,212 $234,102

Total Construction Cost Per Period ($1,716,842) ($1,738,303) ($1,760,032) ($1,782,032) ($1,804,307) ($1,826,861) ($1,849,697) ($936,409)

Holding ExpensesProperty Tax/Remaining Lot/Period 1,200,000$ $36 $36 $37 $37 $38 $39 $40 $41Total Property Tax/Remaining Lot/Period 0.72% $1,872 $1,592 $1,316 $1,039 $757 $466 $160 $0

Holding Expense Per Period ($1,872) ($1,592) ($1,316) ($1,039) ($757) ($466) ($160) $0

Sales Expense

Marketing & Sales 6.00% $134,400 $135,408 $136,424 $137,447 $138,478 $139,516 $140,563 $70,808General Admin. Expense 3.00% $67,200 $67,704 $68,212 $68,723 $69,239 $69,758 $70,281 $35,404Entrepreneurial Profit 8.00% $179,200 $180,544 $181,898 $183,262 $184,637 $186,022 $187,417 $94,411

Sales Expense Per Period ($380,800) ($383,656) ($386,533) ($389,432) ($392,353) ($395,296) ($398,261) ($200,624)

Net Revenue $140,486 $133,249 $125,846 $118,276 $110,542 $102,647 $94,592 $43,107

Discount Factor 0.970874 0.942596 0.915142 0.888487 0.862609 0.837484 0.813092 0.789409

Present Value $136,394 $125,600 $115,166 $105,087 $95,355 $85,965 $76,912 $34,029

$774,508 Indicated Market Value$770,000 Rounded$12,833 /Lot

Format

The land residual technique indicates a market value, as restricted, of $770,000, or $12,833 per

dwelling unit.



SALES COMPARISON APPROACH

The following map and table summarize the comparable data used in the valuation of the subject

site. A detailed description of each transaction is included in the addenda.



SUMMARY OF COMPARABLE LAND SALES - AS RESTRICTED TO AFFORDABLE HOUSINGActual Sale Adjusted Sale Size Size Density Allowable Price Price Per

No. Property Location Type Date Proposed Use Price Price 1 (Acres) (SF) (UPA) Units Per SF Unit

9 6403 Eden Garden DriveLoveland, CO 80538

Sale Jun-14 Affordable multifamily residential

$1,900,000 $1,900,000 17.61 766,961 12.72 224.00 $2.48 $8,482

10 510 South Saint Louis AvenueLoveland, CO 80537

Sale Jun-16 Affordable multifamily residential

$600,000 $600,000 5.00 217,800 14.00 70.00 $2.75 $8,571

11 1506 West Horsetooth RoadFort Collins, CO 80526

Sale Jul-17 Affordable multifamily residential

$996,300 $966,300 7.96 346,737 12.06 96.00 $2.79 $10,066

Subject 3620 Kechter Road,Fort Collins, Colorado

--- --- Affordable Multifamily residential

--- --- 0.00 217,800 12.00 60.00 --- ---

1 Adjusted sale price for cash equivalency and/or development costs (where applicable)Compiled by CBRE

Transaction

The sales utilized represent the best data available for comparison with the subject and were

selected from the Fort Collins area within a 9-mile radius of the subject.

ELEMENTS OF COMPARISON

The sales have been compared to the subject and, where necessary, have been adjusted for

transactional elements, such as expenditures made immediately after purchase, property rights

conveyed, financing terms, conditions of sale, and market conditions. The following discussion focuses

exclusively on the elements that require adjustment.

Market Conditions

Economic conditions may change between the sale date of the comparables and the effective

date of value provided. These changes in supply and demand characteristics tend to exert some

impact on real estate prices. The adjustment for this factor is not a function of time, but of

differences in economic conditions, if any, between time periods. Thus, it is possible a period of

time could elapse with no material change in market conditions having occurred.

An escalation rate of 5% is being applied.

Size

An adjustment for size typically recognizes the concept of economies of scale, in that all other

things being equal, a larger property will sell for less per measurable unit than a smaller

property, and vice versa.

A positive adjustment has been applied to Comparable One, which is significantly larger

than the subject property.



SUMMARY OF ADJUSTMENTS

Based on our comparative analysis, the following chart summarizes the adjustments warranted to

each comparable.

LAND SALES ADJUSTMENT GRID - AS RESTRICTED TO AFFORDABLE HOUSING

Comparable Number 1 2 3 SubjectTransaction Type Sale Sale Sale ---Transaction Date Jun-14 Jun-16 Jul-17 ---Proposed Use Affordable

multifamily residential

Affordable multifamily residential

Affordable multifamily residential

Affordable Multifamily residential

Actual Sale Price $1,900,000 $600,000 $996,300 ---

Adjusted Sale Price 1 $1,900,000 $600,000 $966,300 ---Size (SF) 766,961 217,800 346,737 217,800Density (UPA) 12.72 14.00 12.06 12.00Allowable Units 224.00 70.00 96.00 60.00Price Per Unit $8,482 $8,571 $10,066 ---Price ($ Per Unit) $8,482 $8,571 $10,066Property Rights Conveyed 0% 0% 0%Financing Terms 1 0% 0% 0%Conditions of Sale 0% 0% 0%Market Conditions 20% 10% 4%Subtotal $10,179 $9,429 $10,468Size 5% 0% 0%Shape 0% 0% 0%Corner 0% 0% 0%Frontage 0% 0% 0%Topography 0% 0% 0%Location 0% 0% 0%Zoning/Density 0% 0% 0%Utilities 0% 0% 0%Highest & Best Use 0% 0% 0%Total Other Adjustments 5% 0% 0%Value Indication for Subje $10,687 $9,429 $10,468Absolute Adjustment 25% 10% 4%1 Adjusted sale price for cash equivalency and/or development costs (where applicable)Compiled by CBRE



CONCLUSION

Based on the preceding analysis, Comparable Three required the least amount of adjustment

and was given greatest consideration. In conclusion, the comparables bracket and support a

value of $10,5000 per dwelling unit as subject to an affordable housing deed restriction. The

following table presents the valuation conclusion:

CONCLUDED LAND VALUE - AS DEED RESTRICTED

$ Per Unit Subject Units Total$10,500 x 60 = $630,000

Indicated Value: $630,000

(Rounded $ Per Unit) $10,500

Compiled by CBRE

Reconciliation of Value


Reconciliation of Value

The income approach, using the discounted cash flow analysis is one of the primary methods

used by developers to analyze potential projects and estimate an appropriate price for the land

based on the anticipated revenue and expenses. However, this approach is more reliable once

construction bids are available. The use of costs estimated from data in the Marshall Valuation

Service Cost Manual reduces the precision of this approach.

In the sales comparison approach, the subject is compared to similar properties that have been

acquired for development of affordable housing. Although limited data were available, the sales

used in this analysis are considered reasonably comparable to the subject, and few adjustments

were required. Therefore, the sales comparison approach is considered to provide a reliable

value indication.

SUMMARY OF VALUE CONCLUSIONS - AS DEED RESTRICTEDSales Comparison Approach $630,000

Income Capitalization Approach $770,000

Reconciled Value $700,000

Compiled by CBRE

Based on the foregoing, the market value of the subject has been concluded as follows:

MARKET VALUE CONCLUSION

Appraisal Premise Interest Appraised Date of Value Value Conclusion

As Is Fee Simple Estate June 5, 2018 $1,200,000

As Deed Restricted Fee Simple Estate June 5, 2018 $700,000

Compiled by CBRE

Assumptions and Limiting Conditions



1. CBRE, Inc. through its appraiser (collectively, “CBRE”) has inspected through reasonable observation the subject property. However, it is not possible or reasonably practicable to personally inspect conditions beneath the soil and the entire interior and exterior of the improvements on the subject property. Therefore, no representation is made as to such matters.

2. The report, including its conclusions and any portion of such report (the “Report”), is as of the date set forth in the letter of transmittal and based upon the information, market, economic, and property conditions and projected levels of operation existing as of such date. The dollar amount of any conclusion as to value in the Report is based upon the purchasing power of the U.S. Dollar on such date. The Report is subject to change as a result of fluctuations in any of the foregoing. CBRE has no obligation to revise the Report to reflect any such fluctuations or other events or conditions which occur subsequent to such date.

3. Unless otherwise expressly noted in the Report, CBRE has assumed that:

(i) Title to the subject property is clear and marketable and that there are no recorded or unrecorded matters or exceptions to title that would adversely affect marketability or value. CBRE has not examined title records (including without limitation liens, encumbrances, easements, deed restrictions, and other conditions that may affect the title or use of the subject property) and makes no representations regarding title or its limitations on the use of the subject property. Insurance against financial loss that may arise out of defects in title should be sought from a qualified title insurance company.

(ii) Existing improvements on the subject property conform to applicable local, state, and federal building codes and ordinances, are structurally sound and seismically safe, and have been built and repaired in a workmanlike manner according to standard practices; all building systems (mechanical/electrical, HVAC, elevator, plumbing, etc.) are in good working order with no major deferred maintenance or repair required; and the roof and exterior are in good condition and free from intrusion by the elements. CBRE has not retained independent structural, mechanical, electrical, or civil engineers in connection with this appraisal and, therefore, makes no representations relative to the condition of improvements. CBRE appraisers are not engineers and are not qualified to judge matters of an engineering nature, and furthermore structural problems or building system problems may not be visible. It is expressly assumed that any purchaser would, as a precondition to closing a sale, obtain a satisfactory engineering report relative to the structural integrity of the property and the integrity of building systems.

(iii) Any proposed improvements, on or off-site, as well as any alterations or repairs considered will be completed in a workmanlike manner according to standard practices.

(iv) Hazardous materials are not present on the subject property. CBRE is not qualified to detect such substances. The presence of substances such as asbestos, urea formaldehyde foam insulation, contaminated groundwater, mold, or other potentially hazardous materials may affect the value of the property.

(v) No mineral deposit or subsurface rights of value exist with respect to the subject property, whether gas, liquid, or solid, and no air or development rights of value may be transferred. CBRE has not considered any rights associated with extraction or exploration of any resources, unless otherwise expressly noted in the Report.

(vi) There are no contemplated public initiatives, governmental development controls, rent controls, or changes in the present zoning ordinances or regulations governing use, density, or shape that would significantly affect the value of the subject property.

(vii) All required licenses, certificates of occupancy, consents, or other legislative or administrative authority from any local, state, nor national government or private entity or organization have been or can be readily obtained or renewed for any use on which the Report is based.

(viii) The subject property is managed and operated in a prudent and competent manner, neither inefficiently or super-efficiently.

(ix) The subject property and its use, management, and operation are in full compliance with all applicable federal, state, and local regulations, laws, and restrictions, including without limitation environmental laws, seismic hazards, flight patterns, decibel levels/noise envelopes, fire hazards, hillside ordinances, density, allowable uses, building codes, permits, and licenses.

(x) The subject property is in full compliance with the Americans with Disabilities Act (ADA). CBRE is not qualified to assess the subject property’s compliance with the ADA, notwithstanding any discussion of possible readily achievable barrier removal construction items in the Report.



(xi) All information regarding the areas and dimensions of the subject property furnished to CBRE are correct, and no encroachments exist. CBRE has neither undertaken any survey of the boundaries of the subject property nor reviewed or confirmed the accuracy of any legal description of the subject property.

Unless otherwise expressly noted in the Report, no issues regarding the foregoing were brought to CBRE’s attention, and CBRE has no knowledge of any such facts affecting the subject property. If any information inconsistent with any of the foregoing assumptions is discovered, such information could have a substantial negative impact on the Report. Accordingly, if any such information is subsequently made known to CBRE, CBRE reserves the right to amend the Report, which may include the conclusions of the Report. CBRE assumes no responsibility for any conditions regarding the foregoing, or for any expertise or knowledge required to discover them. Any user of the Report is urged to retain an expert in the applicable field(s) for information regarding such conditions.

4. CBRE has assumed that all documents, data and information furnished by or behalf of the client, property owner, or owner’s representative are accurate and correct, unless otherwise expressly noted in the Report. Such data and information include, without limitation, numerical street addresses, lot and block numbers, Assessor’s Parcel Numbers, land dimensions, square footage area of the land, dimensions of the improvements, gross building areas, net rentable areas, usable areas, unit count, room count, rent schedules, income data, historical operating expenses, budgets, and related data. Any error in any of the above could have a substantial impact on the Report. Accordingly, if any such errors are subsequently made known to CBRE, CBRE reserves the right to amend the Report, which may include the conclusions of the Report. The client and intended user should carefully review all assumptions, data, relevant calculations, and conclusions of the Report and should immediately notify CBRE of any questions or errors within 30 days after the date of delivery of the Report.

5. CBRE assumes no responsibility (including any obligation to procure the same) for any documents, data or information not provided to CBRE, including without limitation any termite inspection, survey or occupancy permit.

6. All furnishings, equipment and business operations have been disregarded with only real property being considered in the Report, except as otherwise expressly stated and typically considered part of real property.

7. Any cash flows included in the analysis are forecasts of estimated future operating characteristics based upon the information and assumptions contained within the Report. Any projections of income, expenses and economic conditions utilized in the Report, including such cash flows, should be considered as only estimates of the expectations of future income and expenses as of the date of the Report and not predictions of the future. Actual results are affected by a number of factors outside the control of CBRE, including without limitation fluctuating economic, market, and property conditions. Actual results may ultimately differ from these projections, and CBRE does not warrant any such projections.

8. The Report contains professional opinions and is expressly not intended to serve as any warranty, assurance or guarantee of any particular value of the subject property. Other appraisers may reach different conclusions as to the value of the subject property. Furthermore, market value is highly related to exposure time, promotion effort, terms, motivation, and conclusions surrounding the offering of the subject property. The Report is for the sole purpose of providing the intended user with CBRE’s independent professional opinion of the value of the subject property as of the date of the Report. Accordingly, CBRE shall not be liable for any losses that arise from any investment or lending decisions based upon the Report that the client, intended user, or any buyer, seller, investor, or lending institution may undertake related to the subject property, and CBRE has not been compensated to assume any of these risks. Nothing contained in the Report shall be construed as any direct or indirect recommendation of CBRE to buy, sell, hold, or finance the subject property.

9. No opinion is expressed on matters which may require legal expertise or specialized investigation or knowledge beyond that customarily employed by real estate appraisers. Any user of the Report is advised to retain experts in areas that fall outside the scope of the real estate appraisal profession for such matters.

10. CBRE assumes no responsibility for any costs or consequences arising due to the need, or the lack of need, for flood hazard insurance. An agent for the Federal Flood Insurance Program should be contacted to determine the actual need for Flood Hazard Insurance.

11. Acceptance or use of the Report constitutes full acceptance of these Assumptions and Limiting Conditions and any special assumptions set forth in the Report. It is the responsibility of the user of the Report to read in full, comprehend and thus become aware of all such assumptions and limiting conditions. CBRE assumes no responsibility for any situation arising out of the user’s failure to become familiar with and understand the same.

12. The Report applies to the property as a whole only, and any pro ration or division of the title into fractional interests will invalidate such conclusions, unless the Report expressly assumes such pro ration or division of interests.



13. The allocations of the total value estimate in the Report between land and improvements apply only to the existing use of the subject property. The allocations of values for each of the land and improvements are not intended to be used with any other property or appraisal and are not valid for any such use.

14. The maps, plats, sketches, graphs, photographs, and exhibits included in this Report are for illustration purposes only and shall be utilized only to assist in visualizing matters discussed in the Report. No such items shall be removed, reproduced, or used apart from the Report.

15. The Report shall not be duplicated or provided to any unintended users in whole or in part without the written consent of CBRE, which consent CBRE may withhold in its sole discretion. Exempt from this restriction is duplication for the internal use of the intended user and its attorneys, accountants, or advisors for the sole benefit of the intended user. Also exempt from this restriction is transmission of the Report pursuant to any requirement of any court, governmental authority, or regulatory agency having jurisdiction over the intended user, provided that the Report and its contents shall not be published, in whole or in part, in any public document without the written consent of CBRE, which consent CBRE may withhold in its sole discretion. Finally, the Report shall not be made available to the public or otherwise used in any offering of the property or any security, as defined by applicable law. Any unintended user who may possess the Report is advised that it shall not rely upon the Report or its conclusions and that it should rely on its own appraisers, advisors and other consultants for any decision in connection with the subject property. CBRE shall have no liability or responsibility to any such unintended user.

Addenda

ADDENDA

Addenda

Addendum A

LAND SALE DATA SHEETS AS IS

Sale Land - Multi Unit Residential No. 1Property Name Old Town North Tract JJ, KK and Block 6

Address Osiander StreetFort Collins, CO 80524United States

Government Tax Agency Larimer

Govt./Tax ID N/A

Site/Government Regulations

Acres Square feetLand Area Net 5.836 254,227

Land Area Gross 5.836 254,227

Site Development Status PlattedShape IrregularTopography N/AUtilities All typical municipal utilities adjacent to the site

Maximum FAR N/AMin Land to Bldg Ratio N/A

Maximum Density 12.68 per ac

Frontage Distance/Street N/A Osiander StreetFrontage Distance/Street N/A Suniga Street

General Plan N/ASpecific Plan N/AZoning CCN (Community Commercial North College) by the City

of Fort CollinsEntitlement Status N/A

Sale Summary

Recorded Buyer OTN FC, LLC Marketing Time N/ATrue Buyer N/A Buyer Type DeveloperRecorded Seller Jerome St. LLC Seller Type Private InvestorTrue Seller N/A Primary Verification Public Records, seller

Interest Transferred Fee Simple/Freehold Type SaleCurrent Use N/A Date 7/7/2016Proposed Use Multifamily Residential Sale Price $1,075,600Listing Broker N/A Financing Market Rate FinancingSelling Broker N/A Cash Equivalent $1,075,600Doc # N/A Capital Adjustment $0

Adjusted Price $1,075,600

Transaction Summary plus Five-Year CBRE View HistoryTransaction Date Transaction Type Buyer Seller Price Price/ac and /sf

07/2016 Sale OTN FC, LLC Jerome St. LLC $1,075,600 $184,298 / $4.23

Sale Land - Multi Unit Residential No. 1Units of Comparison

$4.23 / sf $14,535 / Unit

$184,298.00 / ac $14,535 / Allowable Bldg. Units

N/A / Building Area

Financial

No information recorded

Map & Comments

This property is situated along the northern edge of the Old Town North development, just south of the Aspen Heights student housing development. The property currently exists as three lots, but the lots were originally designed to accommodate the Dry Creek Floodplain, which was substantially reduced by a recent mitigation project. As a result, only 24,465 square feet (10%) of the site remain encumbered by the floodplain. However, this also requires the developer to re-plat the site. The purchaser plans to develop a total of 74 dwelling units, including 26 single-family homes and 48 attached dwellings. This calculates to an overall density of 12.7 dwelling units per acre.

Sale Land - Multi Unit Residential No. 2Property Name Village Cooperative

Address 416 East Horsetooth RoadFort Collins, CO 80525United States


Govt./Tax ID 9725329001




Site Development Status PlattedShape IrregularTopography Moderate SlopeUtilities At the site



Frontage Distance/Street N/A Horsetooth RoadFrontage Distance/Street N/A Stanford Road

General Plan N/ASpecific Plan N/AZoning MMN (Medium-Density Mixed-Use Neighborhood) by the

City of Fort CollinsEntitlement Status N/A

Sale Summary

Recorded Buyer Village Cooperative of Fort Collins Marketing Time 1 Month(s)True Buyer N/A Buyer Type DeveloperRecorded Seller Cornerstone Associates, LLC Seller Type Private InvestorTrue Seller N/A Primary Verification Public records, Listing broker

Interest Transferred Fee Simple/Freehold Type SaleCurrent Use N/A Date 1/31/2017Proposed Use Multifamily residential Sale Price $1,000,000Listing Broker Brian Mannlein Financing Market Rate FinancingSelling Broker Jason Ells Cash Equivalent $1,000,000Doc # 20170007415 Capital Adjustment $0



01/2017 Sale Village Cooperative of Fort Collins

Cornerstone Associates, LLC

$1,000,000 $366,247 / $8.41


$8.41 / sf $19,231 / Unit


N/A / Building Area

Financial


Map & Comments

This site is situated on the northeast corner of Horsetooth and Stanford Roads, just southeast of the recently redeveloped Foothills Mall. The purchaser subsequently commenced construction on a 52-unit cooperative senior housing development, which will feature three-story multifamily buildings above a concrete parking structure. The site features a moderate slope downward to the south, which would have required substantial earthwork if not for the concrete parking structure. The units will be age-restricted to seniors 62 and older, but no supportive medical services will be provided. The facility is nearly sold out, several months before construction is scheduled to be completed. The seller had received multiple offers within a month of the property being listed.

Sale Land - Multi Unit Residential No. 3Property Name Park Townhomes at Fossil Ridge

Address 5305 S Zeigler RoadFort Collins, CO 80528United States


Govt./Tax ID N/A




Site Development Status RawShape IrregularTopography Generally LevelUtilities At the site



Frontage Distance/Street N/A Zeigler RoadFrontage Distance/Street N/A County Fair Lane

General Plan N/ASpecific Plan N/AZoning LMN (Low-Density Mixed-Use Neighborhood) by the City of

Fort CollinsEntitlement Status N/A

Sale Summary

Recorded Buyer The Park at Fossil Ridge, LLC Marketing Time N/ATrue Buyer Russell Baker Buyer Type DeveloperRecorded Seller DP Investment Group, LLC Seller Type Private InvestorTrue Seller Jamie Devries Primary Verification Public records, buyer

Interest Transferred N/A Type SaleCurrent Use N/A Date 4/11/2017Proposed Use Multifamily residential Sale Price $991,500Listing Broker Jerry Chilson Financing N/ASelling Broker Russell Baker Cash Equivalent $991,500Doc # 20170023798 Capital Adjustment $0

Adjusted Price $991,500


04/2017 Sale The Park at Fossil Ridge, LLC

DP Investment Group, LLC

$991,500 $322,292 / $7.40


$7.40 / sf $27,542 / Unit


N/A / Building Area

Financial


Map & Comments

This site is situated on the west side of Zeigler Road, just west of the Twin Silos Park and Fossil Ridge High School. The purchaser platted the site for 36 townhome units with a parking ratio of 2.1 spaces per unit. The site was previously improved with an older house, but only the foundation remained on the date of sale, which the purchaser removed to facilitate construction. The sale included credit for a water and sewer tap. The contributory value of the water tap is generally offset by the cost to remove the foundation.

Sale Land - Multi Unit Residential No. 4Property Name Brick Stone Apartments on Harmony Land

Address TBD Harmony RoadFort Collins, CO 80525United States


Govt./Tax ID 96012-15-001




Site Development Status FinishedShape IrregularTopography Generally LevelUtilities All to site



Frontage Distance/Street N/A Harmony Road

General Plan ApprovedSpecific Plan ApprovedZoning HC (Harmony Corridor) by the City of Fort Collins

Entitlement Status N/A

Sale Summary

Recorded Buyer Brick Stone Apartments on Harmony, LLC Marketing Time 10 Month(s)True Buyer SEEC Enterprises, LLC Buyer Type DeveloperRecorded Seller JAC, LLC Seller Type Private InvestorTrue Seller JAC, LLC Primary Verification Broker by Holiday Watson, CBRE;

Assessor's records

Interest Transferred Fee Simple/Freehold Type SaleCurrent Use Vacant land Date 5/10/2017Proposed Use Multifamily residential Sale Price $2,000,000Listing Broker Russell Baker, Cushman & Wakefield

(970.776.3900)Financing Cash to Seller

Selling Broker N/A Cash Equivalent $2,000,000Doc # 2017-031066 Capital Adjustment $0



05/2017 Sale Brick Stone Apartments on Harmony, LLC

JAC, LLC $2,000,000 $716,307 / $16.44


$16.44 / sf $17,241 / Unit


N/A / Building Area

Financial


Map & Comments

This comparable represents the sale of vacant parcel of land in Fort Collins, CO. The property is situated along the south side of East Harmony Road, a short distance south of its four-way, signalized intersection with South College Avenue in the southern sector of the city. Notably, both South College Avenue and East Harmony Road are both considered to be major arterial roads and, moreover are considered to be the foremost north-south and east-west linkages within the city, respectively. The property is zoned HC and although the property had already been approved for multi-family residential development, the developer was desirous of achieving a greater density and went through the approval process to do so (contemplated four story, 240,0000 mixed use building with 166 units and 9,700 sf of commercial space). Ultimately, they were unsuccessful however, and have proceeded with plans for an all residential development, with only 116 units.

The overall site area is 176,258, or 4.046 gross-acres, but about 30% of the site cannot be developed due to sloping topography a creek that runs along the western and southern portions of the site. The usable or effective site area (per the architectural plans) is 121,623 square feet, or 2.79 acres. Developer intends to break ground in 2018.

Sale Land - Multi Unit Residential No. 5Property Name Crowne at Old Town North

Address East of College Avenue between Conifer Street and Suniga RoadFort Collins, CO 80524United States


Govt./Tax ID 9701300003




Site Development Status RawShape L ShapedTopography Generally LevelUtilities At the site



Frontage Distance/Street N/A Conifer Street

General Plan N/ASpecific Plan N/AZoning CCN (Community Commercial North College) by the City

of Fort CollinsEntitlement Status N/A

Sale Summary

Recorded Buyer Crowne at Old Town North, LP Marketing Time N/ATrue Buyer N/A Buyer Type DeveloperRecorded Seller Ali Akbary, Moe Kamandy, and Fahima

KamandySeller Type Private Investor

True Seller N/A Primary Verification Public records

Interest Transferred Fee Simple/Freehold Type SaleCurrent Use Vacant land Date 11/21/2017Proposed Use Multifamily residential Sale Price $3,420,655Listing Broker N/A Financing Market Rate FinancingSelling Broker N/A Cash Equivalent $3,420,655Doc # 20170079386 Capital Adjustment $0



11/2017 Sale Crowne at Old Town North, LP

Ali Akbary, Moe Kamandy, and Fahima Kamandy

$3,420,655 $248,361 / $5.70


$5.70 / sf $11,252 / Unit


N/A / Building Area

Financial


Map & Comments

This site is adjacent to the north of the Old Town North development west of North College Avenue and south of Suniga Road. The purchaser dedicated 1.94 acres of public road right of way for Suniga Road to facilitate development of the site. The buyer has submitted plans to the City of Fort Collins to develop a 304-unit apartment community on the site. The site benefits from off-site storm water detention in a regional pond owned by the City of Fort Collins, but the developer must pay a pro rata share of the detention pond development costs.

Addenda

Addendum B

LAND SALE DATA SHEETS AS DEED RESTRICTED

Sale Land - Multi Unit Residential No. 9Property Name Ashley Estates

Address 6403 Eden Garden DriveLoveland, CO 80538United States


Govt./Tax ID 9626414003



Land Area Gross N/A N/A

Site Development Status PlattedShape IrregularTopography Generally LevelUtilities All utilities adjacent



General Plan N/ASpecific Plan N/AZoning N/A


Sale Summary

Recorded Buyer Pedcor Investments, LLC Marketing Time 24 Month(s)True Buyer N/A Buyer Type DeveloperRecorded Seller SDC-Loveland, LLC Seller Type DeveloperTrue Seller N/A Primary Verification Public Records, MLS, Listing Broker,

Buyer

Interest Transferred Fee Simple/Freehold Type SaleCurrent Use N/A Date 6/26/2014Proposed Use Affordable multifamily residential Sale Price $1,900,000Listing Broker Chrisland - Jake Hallauer Financing Market Rate FinancingSelling Broker N/A Cash Equivalent $1,900,000Doc # 20140034456 Capital Adjustment $0



06/2014 Sale Pedcor Investments, LLC SDC-Loveland, LLC $1,900,000 $107,912 / $2.48


$2.48 / sf $8,482 / Unit


N/A / Building Area

Financial


Map & Comments

This multifamily site is situated west of U.S. Highway 287 in the northern portion of Loveland, behind the Walmart Supercenter. Officials from the Indiana-based development firm, Pedcor Investments, LLC, built 224 affordable apartments, referred to as Ashley Estates. The property had been listed for several years, most recently at a price of $2,262,920. There were no additional offsite costs necessary to develop the site.

Sale Land - Multi Unit Residential No. 10Property Name Mirasol Phase III

Address 510 South Saint Louis AvenueLoveland, CO 80537United States


Govt./Tax ID 9524126901 and 9524127901



Land Area Gross N/A N/A

Site Development Status RawShape RectangularTopography Generally LevelUtilities All typical municipal utilities are in service at the site



Frontage Distance/Street N/A Saint Louis Avenue

General Plan N/ASpecific Plan N/AZoning FA (Farming) by Larimer County


Sale Summary

Recorded Buyer Housing Authority of the City of Loveland Marketing Time 24 Month(s)True Buyer N/A Buyer Type DeveloperRecorded Seller Gary Cleveland Seller Type End UserTrue Seller N/A Primary Verification Public Records, MLS, Listing Broker

Interest Transferred Fee Simple/Freehold Type SaleCurrent Use N/A Date 6/13/2016Proposed Use Affordable multifamily residential Sale Price $600,000Listing Broker Larry Melton, Realtec Financing Cash to SellerSelling Broker N/A Cash Equivalent $600,000Doc # 20160037334 Capital Adjustment $0



06/2016 Sale Housing Authority of the City of Loveland

Gary Cleveland $600,000 $120,000 / $2.75


$2.75 / sf $8,571 / Unit


N/A / Building Area

Financial


Map & Comments

Although the property featured an older house and a few outbuildings on the date of sale, the purchaser intends to raze the structures and construct affordable housing for senior citizens on the site, which will be connected to the Mirasol Senior Living development to the south. The seller has a right to occupy the house for nine months at no rent in exchange for maintaining the property until the buyer is ready to build. The Loveland Housing Authority plans to build 70 affordable units on the site, including a larger apartment building and several duplexes.

Sale Land - Multi Unit Residential No. 11Property Name Village on Horsetooth

Address 1506 West Horsetooth RoadFort Collins, CO 80526United States


Govt./Tax ID 9727426901




Site Development Status RawShape IrregularTopography Generally LevelUtilities All typical municipal utilities adjacent



Frontage Distance/Street N/A Horsetooth Road

General Plan N/ASpecific Plan N/AZoning LMN (Low Density Mixed-Use Neighborhood) by the City of

Fort CollinsEntitlement Status N/A

Sale Summary

Recorded Buyer Village on Horsetooth, LLLP Marketing Time N/ATrue Buyer Housing Catalyst Buyer Type OtherRecorded Seller City of Fort Collins Seller Type OtherTrue Seller N/A Primary Verification Public Records, Seller, Buyer

Interest Transferred Fee Simple/Freehold Type SaleCurrent Use N/A Date 7/31/2017Proposed Use Affordable multifamily residential Sale Price $996,300Listing Broker N/A Financing Market Rate FinancingSelling Broker N/A Cash Equivalent $996,300Doc # 20170050844 Capital Adjustment $-30,000



07/2017 Sale Village on Horsetooth, LLLP

City of Fort Collins $996,300 $121,394 / $2.79


$2.79 / sf $10,066 / Unit


N/A / Building Area

Financial


Map & Comments

The purchaser is developing the Village on Horsetooth, an affordable, 96-unit apartment development. The property featured residential and agricultural structures that were approaching the end of their economic lives on the date of sale, which had to be razed to facilitate the apartment development. This property was in the City of Fort Collins' affordable housing land bank program, and was deed restricted to development of units that would be affordable to residents earning 50% of the area median income. The City of Fort Collins purchased the property in February of 2003 at a price of $750,000.

Addenda

Addendum C

LEGAL DESCRIPTION

Addenda

Addendum D

CLIENT CONTRACT INFORMATION

Addenda

Addendum E

QUALIFICATIONS

Jon Vaughan

Experience

Jon brings 15 years of experience preparing real estate appraisals, feasibility studies and

consulting. His expertise covers a broad spectrum of property types, including commercial and

residential development land, mixed-use projects, as well as farm and ranch properties. His

background in improved properties includes office, retail and industrial facilities, as well as

special purpose facilities, such as automobile dealerships, breweries, churches and schools.

Prior to joining CBRE, Mr. Vaughan worked as an appraiser with Foster Valuation in Greeley,

where he honed his focus on eminent domain. He has worked on property valuations related to

some of Colorado’s most-notable infrastructure projects including the I-25 widening and the

addition of express lanes from north Denver to Northern Colorado.

Professional Affiliations / Accreditations

• Appraisal Institute: Designated Member (MAI)

– 2017 Colorado Chapter President

– 2015-2016 Colorado Chapter Officer

– 2013-2014 Colorado Chapter Board of Directors

• International Right of Way Association: Senior Right of Way Professional (SR/WA)

– 2014-Present IR/WA Instructor – Appraisal Courses

– 2015-2018 Colorado Chapter Education Chair

• Certified General Real Estate Appraiser: State of Colorado, #CG100000631

• Accepted Expert Witness, Weld County District Court

Education

• Colorado State University, Bachelor of Science; Business Administration

• Appraisal Institute

– General Courses Covering Highest and Best Use, Market Analysis, Quantitative Analysis,

Income Capitalization, Sales Comparison, and Cost Approach, Business Practices and Ethics

– Valuation of Conservation Easements

– Uniform Appraisal Standards for Federal Land Acquisitions

• International Right of Way Association

– General: Principles, Uniform Relocation Act, Ethics and the Right of Way Profession

– Negotiations: Principles, Bargaining Negotiations, and Conflict Management

– Appraisal: Principles, Easement Valuation, Appraisal Review, and Valuation of

Environmentally Contaminated Real Estate

– Environmental: Understanding Environmental Contamination in Real Estate

– Property Management: Leasing

– Real Estate Law: Principles, Legal Aspects of Easements, Eminent Domain Law Basics

– Engineering: Engineering Plan Development, Property Descriptions

• American Society of Farm Managers and Rural Appraisers

– Appraising Conservation Easements and Case Studies

• Colorado Division of Real Estate: Conservation Easement Appraiser Update Course

T + 970 223 4378 M +970 310 1339 [email protected] 2850 McClelland Drive Suite 3500 Fort Collins, CO 80525

• City of Fort Collins • City of Greeley • City of Loveland • City of Aurora • Weld County • Xcel Energy • Western States Land

Services • Tri-State Generation

and Transmission • Atkins Global • CDOT • Guaranty Bank & Trust • First National Bank • Farmers and Merchants

Bank

Clients Represented

Addenda

JON VAUGHAN Valuation & Advisory Services +1 9702234378 [email protected] TOM BAROCH Valuation & Advisory Services 303-628-7474 www.cbre.com

CBRE VALUATION & ADVISORY SERVICES

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