Loading...
Glenwood Drive and Two Mile Drive Parking LotSUMMARYAPPRAISAL REPORT OF: A 1.795 ACRE SITE IMPROVED WITH A PARKING LOT AT THE CORNER OF GLENWOOD DRIVE AND TWO MILE DRIVE KALISPELL, MONTANA PREPARED FOR: Mr. Charles A. Harball, City Attorney City of Kalispell 201 1" Avenue East Kalispell, Montana 59901 Flathead County Economic Development Authority MARKET VALUES AS OF. - December 19, 2011 PREPARED BY.- Elliott M. Clark, MAI Clark Real Estate Appraisal 6477 US Highway 93 South, Suite 509 Whitefish, Montana 59937 Clark heal Estate Appraisal, Inc. 6477 US Highway 93 South, Suite 509 Whitefish, Montana 59937 December 27, 2011 Mr. Charles A. Harball, City Attorney City of Kalispell 201 1st Avenue East Kalispell, Montana 59901 Re: 1.795 Acre Site Improved with a Parking Lot and Located at the Corner of Glenwood Drive and Two Mile Drive, Kalispell, Montana Dear Mr. Harball: In compliance with your request, Elliott M. Clark, MAI made a visual inspection of the above referenced property on December 19, 2011. Applicable information regarding zoning was reviewed and trends in real estate activity in the area was researched and analyzed. This visual inspection, review and analysis were made in order to prepare the attached summary appraisal report. There is a deed restriction in place for the subject property. This restriction limits the use of the subject property to a parking lot. It is my understanding that the clients may use this appraisal report to allocate a value to the subject property for a potential land swap. For this reason it was necessary to determine the impact on value of the deed restriction. Consequently two opinions of value are included in this report. Section 1 includes the opinion of value based upon the Hypothetical Condition that there is no deed restriction in place. Section 2 includes the opinion of value for the subject property with the existing deed restriction. Both values were developed to assist the clients in making decisions about the subject property. There are three approaches to value in the appraisal of real property. They are the Cost, Sales Comparison and Income Approaches. All three approaches and their applicability will be discussed in greater detail in the Scope of the Appraisal section of this report. The value of the fee simple interests in the subject property are estimated in this report. These estimates were made after thorough study of available market data and other data felt to be pertinent to this appraisal. The attached summary appraisal report exhibits the factual data found and reasoning used in forming my opinions of value. The estimates of value are based on the assumptions that all necessary governmental approvals have been obtained and will be maintained and that the property owners will exhibit sound management and sales practices. Telephone (406) 862-8151 e www.clarkappraisal.us e FAX (406) 862-8394 Clark Real Estate Appraisal (I1-128e) (12/19/2011) 2 Mr. Harball December 27, 2011 Page 2 I was not provided with soil studies for the subject property. I assume that the soils are capable of supporting construction similar to that in the neighborhood without unusual soil preparation. I am also unaware of the presence of any hazardous material, groundwater contamination, or toxic materials that may be on or in the subject property. Should any of these conditions be present, the values stated in this report could be affected. I certify that, to the best of my knowledge and belief, the statements and opinions contained in this appraisal report are full true and correct. I certify that I have no interest in the subject property and that neither the employment to make this appraisal nor the compensation is contingent upon the value estimates of the property. This appraisal assignment was not made nor was the appraisal rendered on the basis of requested minimum valuations or specific valuations. This appraisal is subject to the attached Certification of Appraisal and Statement of Limiting Conditions. I further certify that this appraisal was made in conformity with the requirements of the Code of Professional Ethics of the Appraisal Institute and the Uniform Standards of Professional Appraisal Practice of the Appraisal Foundation (USPAP). Respectfully submitted, �-Wct�- fv�-' Elliott M. Clark, MAI Montana Certified General Appraiser #683 11-128e Telephone (406) 862-8151 • www.clarkappraisal.us e FAX (406) 862-8394 Clark Real Estate Appraisal (I 1-128e) (12/19/2011) IN ` 1 0 OKI]+ _. SUMMARY OF SALIENT DATA AND CONCLUSIONS................................................................. 6 CERTIFICATION OF APPRAISAL ...................................................................................................7 GENERAL ASSUMPTIONS AND LIMITING CONDITIONS.........................................................8 SCOPE OF THE APPRAISAL...........................................................................................................10 IDENTIFICATION OF THE SUBJECT PROPERTY.....................................................................12 DATEOF INSPECTION....................................................................................................................12 EFFECTIVE DATE OF MARKET VALUE.....................................................................................12 PROPERTY RIGHTS APPRAISED..................................................................................................12 PURPOSE OF THE APPRAISAL......................................................................................................13 DEFINITION OF MARKET VALUE................................................................................................13 INTENDED USE OF THE APPRAISAL...........................................................................................13 HISTORY OF SUBJECT PROPERTY & STATEMENT OF OWNERSHIP ..................................14 NATIONAL ECONOMIC DATA......................................................................................................15 STATEECONOMIC DATA..............................................................................................................16 COUNTYECONOMIC DATA..........................................................................................................18 KALISPELL ECONOMIC DATA.....................................................................................................22 PROPERTY DESCRIPTION.............................................................................................................27 A. GENERAL SITE DESCRIPTION.................................................................................................................27 B. ACCESS......................................................................................................................................................31 C. ZONING......................................................................................................................................................31 D. IMPROVEMENTS......................................................................................................................................32 E. EASEMENTS, BUFFERS AND RESTRICTIONS........................................................................................32 F. TOPOGRAPHY, VEGETATION, WETLANDS, SOILS, DRAINAGE AND ENVIRONMENTAL CONSIDERATIONS........................................................................................................................................33 G. UTILITIES...................................................................................................................................................33 H. PUBLIC SAFETY AND SERVICES............................................................................................................33 I. SITE SUITABILITY......................................................................................................................................33 SUBJECTPHOTOGRAPHS ..............................................................................................................35 ASSESSMENT/PROPERTY TAXES .................................................................................................37 SUBJECTMARKET ANALYSIS ......................................................................................................38 HIGHESTAND BEST USE................................................................................................................42 THE APPRAISAL PROCESS............................................................................................................ 45 SECTION1.........................................................................................................................................46 SALES COMPARISON APPROACH............................................................................................... 47 RECONCILIATION OF VALUE INDICATIONS............................................................................58 SECTION2.........................................................................................................................................59 INCOMEAPPROACH.......................................................................................................................60 RECONCILIATION OF VALUE INDICATIONS............................................................................63 MARKETINGT.......................................................................................................................... 64 QUALIFICATIONS OF THE APPRAISER ...................................................................................... 65 ADDENDUM....................................................................................................................................... 67 APPRAISER'S LICENSE...............................................................................................:.................................68 Clark Real Estate Appraisal (I 1-128e) (12/19/2011) 4 ENGAGEMENT LETTER................................................................................................................................ 69 SUBJECTDEED..............................................................................................................................................75 Clark Real Estate Appraisal (I 1-128e) (12/19/2011) Client/Intended User City of Kalispell & Flathead County Economic Development Authority Purpose/Intended Use Estimate Market Value/Potential Land Swap Property Owner City of Kalispell & Flathead County Economic Development Authority Aii t'_ _% Property Address Not Available (Property at the Corner of Glenwood Drive & Two Mile Drive Site Size 1.795 Acres or 78,190 Square Feet Description of Improvements Asphalt Paved Parking Lot Assessor Number E001057 Census Tract 30-029-0009.00 Flood Zone Zone X (Map Panel 30029C 1805G- Dated September 28, 2007) Zoning B-2, General Business HIGHEST AND BEST USE(S) Property as if Vacant Use as a Parking Lot (Without the Hypothetical Condition) Property as Improved Continued Use as a Parking Lot (Without the Hypothetical Condition) DATES, • AND ASSIGNMENT CONDITION(S) Report Date December 27, 2011 Inspection Date December 19, 2011 Effective Date of Value December 19, 2011 Property Rights Appraised Fee Simple Estimates of Market Value Fee Simple Interest $390,000 (Based upon Referenced Hypothetical Condition) Fee Simple Interest $175,000 (As Is) Extraordinary Assumption(s) None Hypothetical Condition(s) See Scope of the Appraisal MARKETING TIME The appraised values are based upon a 12 month or less marketing time. Estimated marketing time is addressed in detail in the Subject Market Analysis portion of this report. APPRAISER INFORMATION Appraiser Elliott M. Clark, MAI Clark Real Estate Appraisal (11-128e) (12/19/2011) I certify that, to the best of my knowledge and belief, The statements of fact contained in this report are true and correct. The reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions, and are the appraiser's unbiased professional analyses, opinions, and conclusions. - Elliott M. Clark, MAI has no present or prospective interest in the property that is the subject of this report, nor any personal interest or bias with respect to the parties involved. The 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 opinions, the attainment of a stipulated result, or the occurrence of a subsequent event directly related to the intended use of this appraisal. The analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the requirements of the Code of Professional Ethics and the Uniform Standards of Professional Appraisal Practice of The Appraisal Institute. The use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representatives. Elliott M. Clark, MAI made a personal inspection of the subject property. As of the date of the report, Elliott M. Clark, MAI has completed the requirements of the continuing education program of the Appraisal Institute. The appraiser has not performed a service relative to the subject property (appraisal or otherwise) in the three years prior to the engagement to prepare this report. - December 27 2011 Elliott M. Clark, MAI Date Montana Certified General Appraiser # 683 Expires March 31, 2012 Clark Real Estate Appraisal (11-128e) (12/19/2011) 7 The appraisal is subject to the following conditions and to such other specific and limiting conditions as are set forth in the appraisal report. 1. The legal description(s) from the most recently recorded deed(s) or plat(s) are assumed to be correct. 2. The appraiser assumes no responsibility for matters legal in character, nor does she render any opinion as to title, which is assumed to be marketable. All existing liens, encumbrances and assessments have been disregarded and the property is appraised, as though free and clear, under responsible ownership and competent management. 3. Any sketches in this report indicate approximate dimensions and are included to assist the reader in visualizing the property. The appraiser has not made a survey, engineering studies or soil and analysis of the property and assumes no responsibility in connection with such matters or for engineering, which might be required to discover such factors. 4. Unless otherwise noted herein, it is assumed that there are no encroachments, zoning or restriction violations existing in the subject property. 5. Information, estimates and opinions contained in this report are obtained from sources considered reliable and believed to be true and correct; however, no liability for them can be assumed by the appraiser. 6. The appraiser is not required to give testimony or attendance in court by reason of this appraisal, with reference to the property in question, unless arrangements have been made previously therefore. 7. The division of the land and improvements (if applicable) as valued herein is applicable only under the program of utilization shown. These separate valuations are invalidated by any other application. On all appraisals, subject to satisfactory completion, repairs or alterations, the appraisal report and value conclusion(s) are contingent upon completion of the improvements in a workmanlike manner. 8. Disclosure of the contents of this appraisal report is governed by the By -Laws and Regulations of the Appraisal Institute. Except as hereinafter provided, the party for whom this appraisal report was prepared may distribute copies of this report, in its entirety, to such third parties as may be selected by the party for whom this appraisal report was prepared; however, selected portions of this appraisal report shall not be given to third parties without prior written consent of the signatory of this appraisal report. Further, neither all nor any part of this appraisal report shall be disseminated to the general public by the use of advertising media, public relations media, sales media or other media for public communication without the prior written consent of the signatory of this appraisal report. Clark Real Estate Appraisal (11-128e) (12/19/2011) 8 9. The Americans with Disabilities Act (ADA) became effective January 26, 1992. The appraiser has not made a specific compliance survey and analysis of this property to determine whether or not it is in conformity with the various detailed requirements of the ADA. It is possible that a compliance survey of the property together with a detailed analysis of the requirements of the ADA could reveal that the property is not in compliance with one or more of the requirements of the act. If so, this fact could have a negative effect upon the value of the property. Since the appraisers have no direct evidence relating to this issue, we did not consider possible noncompliance with the requirements of ADA in estimating the value of the property. 10. This appraisal assignment was not made nor was the appraisal rendered on the basis of a requested minimum valuations, specific valuations, or amounts, which would result in approval of a loan. 11. The appraiser is not a building inspector and this report is not a building inspection. Any obvious defects are noted; however, this report is not to be relied upon for detection of unseen defects. 12. This appraisal report was prepared for the client who is the only intended use. The analysis and conclusions included in the report are based upon a specific Scope of Work determined by the client and the appraiser and are not valid for any other purpose or for any other user. Clark Real Estate Appraisal (11-128e) (12/19/2011) 9 The subject property consists of a 1.795 acre site improved with an asphalt paved parking lot at the corner of Glenwood Drive and Two Mile Drive in the city limits of Kalispell, in Flathead County, Montana. I was asked to estimate the market value of the subject for possible land swap purposes. There is a deed restriction in place which stipulates that the subject property can only be used as a parking lot. In order to understand the impact on value of this restriction it was necessary to provide the value of the subject property based upon the Hypothetical Condition that this restriction did not exist. For this reason, two values are estimated in this report. A narrative appraisal report for the subject property has been prepared. Information about the subject property has been collected and analyzed in this report. The scope of the appraisal requires compliance with the Uniform Standards of Professional Appraisal Practice promulgated by the Appraisal Standards Board of the Appraisal Foundation and the Guide Notes to the Standards of Professional Appraisal Practice adopted by the Appraisal Institute. The standards contain binding requirements and specific guidelines that deal with the procedures to be followed in developing an appraisal, analysis, or opinion. The Uniform Standards set the requirements to communicate the appraiser's analyses, opinions and conclusions in a manner that will be meaningful and not misleading in the marketplace. Hypothetical Condition The value for the subject property included in Section 1 of this report is based upon the Hypothetical Condition that the above referenced deed restriction is removed. Extraordinary Assumption None Scope of Property Viewing Elliott M. Clark, MAI viewed the subject property on December 19, 2011. Scope of Research The history of ownership, historical uses and current intended uses were researched via Flathead County Records and the subject property owner. Area trends in development were researched based upon information from the Flathead County Planning and Zoning Department and the City of Kalispell Planning Department; inspections of surrounding properties by the appraiser; interviews with area developers, property owners and property managers; and research regarding current and projected demographics in the immediate and greater subject market area. Comparable market data was obtained through a combination of public record and area realtors, developers and property owners. All comparable data was verified with a party involved in the transaction. Clark Real Estate Appraisal (11-128e) (12/19/2011) 10 Highest & Best Use My opinions of the highest and best uses for the subject property were developed using the research collected relative to the subject property, area development trends and demographics. The information collected is considered comprehensive and provided a credible basis for a carefully considered analysis. The appraisal process presented was based upon the highest and best use conclusions for the subject property. Appraisal Process The initial portions of this appraisal report include descriptions of the subject property and information about market conditions. The final portions of this report are divided into two sections. Section 1 includes the analysis and valuation for the subject property based upon the Hypothetical Condition that the referenced deed restriction is not in place. Section 2 includes the analysis and valuation for the subject in As Is condition. Section 1 There are three recognized approaches in the valuation of real property. They are: the Cost Approach, the Sales Comparison and Income Approaches. The Sales Comparison Approach provides the most credible indication of value for vacant land or land as if vacant when there are comparable sales available. Based upon my analysis there were sufficient comparables and sufficient additional market data available to prepare a credible Sales Comparison Analysis for the subject site as if vacant and based upon the referenced Hypothetical Condition. The Cost and Income Approaches were not considered applicable for the valuation of the subject property based upon the referenced Hypothetical Condition. Section 2 The Income Approach is considered the only applicable approach to value for the subject property in As Is condition. For this reason this is the only approach developed in Section 2 of this report. Conclusion The appraiser lacks the knowledge and experience with respect to the detection and measurement of hazardous substances, unstable soils, or freshwater wetlands. Therefore, this assignment does not cover the presence or absence of such substances as discussed in the Limiting Conditions section of this report. However, any visual or obviously known problems affecting the property will be reported and their impact on the value will be discussed. Individuals and offices contacted in order to complete this appraisal include the following: ® City of Kalispell Planning Department ® Flathead County Planning & Zoning Office ® Montana Department of Revenue; ® Various Other Departments of Flathead County; ® Various Area Real Estate Agents, Real Estate Appraisers, Property Managers, Property Owners, Tenants and Builders Clark Real Estate Appraisal (11-128e) (12/19/2011) 11 1 .. The subject property is located at the corner of Glenwood Drive and Two Mile Drive in the city limits of Kalispell, in Flathead County, Montana. The assessor number is included in the Summary of Salient Data and Conclusions portion of this report. The current legal description for the subject property is Lot 1 of the Amended Plat of the Northeast Portion of Gateway West Addition No. 34, City of Kalispell, and Flathead County, Montana. December 19, 2011 1, • December 19, 2011 The values indicated in this report are for the fee simple interests in the subject property. The fee simple interest is full, complete, and unencumbered ownership subject only to the governmental rights of taxation, police power, eminent domain and escheat. This is the greatest right and title, which an individual can hold in real property. The leased fee interest is an ownership interest held by a landlord with the rights of use and occupancy conveyed by lease to others. An Income Approach (based on monthly lease rates for the subject parking places) was developed in Section 2 of this report. According to my research, there are no leases in place for the subject property. Additionally the Income Approach developed in this report is based on potential short term leases. For these reasons it was not applicable to determine the value of a leased fee interest in the subject property. Clark Real Estate Appraisal (11-128e) (12/19/2011) 12 ;III ;► i i c ► ► 'a r The purpose of this appraisal is to estimate the market value of the fee simple interests in the subject property, based upon the referenced Hypothetical Condition and in As Is Condition, as of December 19, 2011. 1,, Market value is defined in the following manner: "The most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeably and assuming the price is not affected by undue stimulus. "l Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: (1) buyer and seller are typically motivated; (2) both parties are well informed or well advised, and each acting in what he considers his own best interest; (3) a reasonable time is allowed for exposure in the open market; (4) payment is made in terms of cash in US 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. It is understood that the intended use of this appraisal is for a potential land swap. This report was prepared for the City of Kalispell and Flathead County Economic Development Authority, the clients, and is their exclusive property. No third parties can rely upon this report without the express written consent from both the appraiser and the clients. 1 Office of the Comptroller of the Currency - Comptrollers Manual for National Banks, March 1990, 12CFR, parts 34. Clark Real Estate Appraisal (i 1-128e) (12/19/2011) 13 Ownership History The subject property is owned by the City of Kalispell and Flathead County Economic Development Authority The property most recently transferred from ACG-Kalispell Investors, LLC to the City of Kalispell and Flathead County Economic Development Authority via a Grant Deed recorded on August 24, 2005. This deed is recorded as Document #200523615340 at the Flathead County Clerk and Recorder's Office. According to the Settlement Statement provided, the consideration was $312,760.80. Each purchaser was responsible for half of this amount. A copy of the most recently recorded deed is included in the Addendum of this report. Use History The subject property was created via a Certificate of Plat recorded on April 20, 2005 as Document #200511012330 at the Flathead County Clerk and Recorder's Office. According to my research the subject property was specifically created to be utilized as a parking lot for the portion of the Gateway West Shopping Center that is owned by the City of Kalispell and the Flathead County Economic Development Authority. The subject property owners constructed the existing asphalt paved parking lot on the subject property after the 2005 purchase. I counted 191 parking spaces using aerial photographs from the Flathead County GIS mapping and ESRI mapping. Other site improvements include drainage, curbing and street lights. Clark Real Estate Appraisal (I 1-128e) (12/19/2011) 14 The National Bureau of Economic Research or NBER (a private group of leading economists charged with dating the start and end of national economic downturns) announced September 20, 2010 that the recession ended in June of 2009. This decision was based upon analyses of changes in real Gross Domestic Product (GDP) and - — _ _ __ Gross Domestic Income (GDI). The committee forecasted an annual economic growth of 2.6% in 2010 and 2011. (Source: National Bureau of Economic Research website htt-o://www.nber.orp-/cvcics) Real GDP increased 1.3% in the second quarter of 2011 after increasing 0.4% in the first quarter. The growth was attributed to slowdown on imports, increased federal government spending and increases in business investments. - - However, there was a slowdown in consumer spending. (Source: US Bureau of Economic Analysis) After a period of somewhat stabilized trade, the financial markets are again volatile after the announcement on August 5, 2011 by Standard and Poor's regarding a downgrade for the United States long-term AAA credit rating to AA+. The downgrade reportedly reflects Standard and Poor's view that the effectiveness, stability, and predictability of American policymaking and political institutions have weakened at a time of ongoing fiscal and economic challenges to a degree more than they envisioned when they assigned a negative outlook to the rating on April 18, 2011. The national unemployment remains relatively high. Without substantial job creation, it is unlikely that the economy will stabilize in the near future. The economic health of the United States is guarded. Clark Real Estate Appraisal (11-128e) (12/19/2011) 15 STATE ECONOMIC DATA Montana is the 441h most populous state in the US. The preliminary 2010 Census data estimates a population of 989,415 for 2010 indicating a percentage of change of 9.7% from 2000 to 2010. By 2015 the population for the State of Montana is projected to be 1,030,229. (US Bureau of the Census, ESRI forecasts for 2015) The state economy is diverse with a wide variety of industries such as; agriculture, mining, manufacturing, healthcare, recreation and tourism. According to the Bureau of Economic Analysis (US Department of = = Commerce), Montana real GDP grew approximately 0.3 percent from 2008 to _ T 2009. Nondurable goods manufacturing contributed the largest growth to the real s GDP growth followed by the finance and insurance industry. In 2009, government was the largest industry in Montana followed by real estate, rental and leasing. The chart below depicts the historical trend in per capita personal income on the national and state level. Per Capita Personal Income $50,000 E 0 c c 0 `u $25,000 r a m r a m u a $0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Period (Quarters) —0 -US Per Capita Personal Income--i—MTPer Capita Personal Income Sources: Wntana Departmentoftabor& Industry ResearchandAnclysis Bureau, Valuation Magazinepreparedbythe AppraisalInstitute Clark Real Estate Appraisal (11-128e) (12/19/2011) 16 The national and state unemployment rates for the past ten years are provided on the chart below. m 12.00% E $ 10.00% c c 8.00% 0 a m 'a 4.00% R v w 2.00% a 0.00% Unemployment Rates 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Period (Quarters) -u5 Montana Sources: Montana Department of tabor & Industry Research and Analysis Bureau, Valuation Magazine pmpored bytheAppraBoll nsb'tute The long term outlook for the state is for continued growth as economic activity accelerates in most areas of the state. Clark Real Estate Appraisal (I1-128e) (12/19/2011) 17 COUNTY ECONOMIC DATA The subject property is located in Flathead County. The general area is known as the Flathead Valley. The Flathead Valley is surrounded by various ranges of the Rocky Mountains. The three incorporated cities in Flathead County are Kalispell, the county seat, Whitefish and Columbia Falls. There are also unincorporated communities in the county which include; Evergreen, Bigfork, Lakeside, Somers, Hungry Horse and Martin City. Geographical Information Flathead County is located in northwest Montana and is 5,098 square miles in size. Approximately 94% of this area is national or state forest land, designated wilderness, agricultural or timberland. Flathead Lake is a significant geographical feature of the Flathead Valley. Glacier National Park is located in the Flathead Valley area. It is a major area tourist attraction. Additional attractions include; Bob Marshall Wilderness, Hungry Horse Dam, Whitefish Mountain Resort, Blacktail Mountain Resort, Whitefish Lake and numerous golf courses. There are many area lakes and rivers that provide year round recreation for residents and visitors. Population According to 2010 Census estimates Flathead County is now the third most populous county in the state. The population of the county was estimated to be 90,928 which is a 22.1 % increase from 2000. Income The median annual household income was estimated to be $45,258 according to the 2005-2009 American Community Survey. The chart on the following page depicts the per capita personal income for the county compared with the state and national numbers. Clark Real Estate Appraisal (I 1-129e) (12/19/2011) 18 Per Capita Personal Income $50,000 ,. _ ... ... ... _. _. _ _. ..... _. . e a $25,000 A a m u a $0 '. .. _ ... .... ........ _..._ 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Period (Quarters) - US Per Capita Personal Income MT Per Capita Personal Income ,:..Flathead County Per Capita Personal Income Sources: Montana DepartmentofLobm& Industry ResearchandAnalysis Burea,y Val-6-Maw inepreparedbytheAppraisallnstilute Employment The retail trade industry represents approximately 15% of employment in Flathead County. Approximately 13% of the workforce is employed in the accommodation and food services industries and the healthcare and social assistance industries represents 12% of employment in Flathead County. Some of the largest private employers in Flathead County include; Northwest Healthcare (Kalispell Regional Medical Center), Plum Creek Timber Company, Teletech, Allied Materials (formerly Semitool) and BNSF Railway. Unemployment Update The unemployment rates for the past 10 years for Flathead County are provided on the chart below along with the national and state unemployment rates. Unemployment Rates W E 0 0 v a Period (Quarters) US Montana Flathead Sources: Montana Departrumt of Labor & Industry Research ondAnolysis Bureau, Vol uatim Magazlneprepved by the Approisallnsdtute The preliminary unemployment rate for June 2011 for Flathead County is 11.4% which is substantially higher than the preliminary unemployment rate of 7.8% for the state of Montana. Clark Real Estate Appraisal (11-128e) (12/19/2011) 19 Construction & Development Building permits issued for residential construction of all types in the three municipalities of Flathead County in 2009 compared to the prior eight years are illustrated on the following table. The number of residential building permits began decreasing in all three cities in 2007. Kalispell 143 278 193 480 378 349 242 186 103 92 -11% Whitefish 85 179 149 142 292 131 80 35 14 21 501YG Columbia Falls 10 23 50 99 81 97 59 60 6 6 0% Total 1 238 480 392 721 751 577 381 281 12-3 119 -3% There were reportedly 251 new lots in subdivisions awarded final approval in 2008 in Flathead County. This is down approximately 64% from the 699 approved in 2007. There were 420 new lots in subdivisions awarded final approval in 2006 and 512 new lots in subdivisions awarded final approval in 2005 in Flathead County. The five year high for Flathead County was 824 lots in 2004. There are additional subdivisions with final plat approval in the municipal areas of Flathead County. Supply and demand of residential properties are not in balance in Flathead County. The oversupply of residential properties combined with increasing unemployment in Flathead County has resulted in foreclosures and price decreases for many area residential properties. RetaiVOffice/W arehouse Major shopping is located primarily in Kalispell which includes big box stores and smaller shopping centers. There is commercial office space throughout the Flathead Valley. There have been several new multi -tenant office buildings constructed over the past few years. Many older commercial buildings have been renovated and/or replaced with new buildings. There has been increased development of warehouse and office warehouse space in the past few years concentrated south of Kalispell along US Highway 93 and northeast of Kalispell along US Highway 2. There are older warehouse buildings throughout each of the municipalities. New commercial construction has slowed dramatically in recent months compared to prior years. Vacancy rates for retail, office and office/warehouse properties have increased throughout the valley over the last year. Education & Healthcare There are elementary, middle and high schools servicing various areas of Flathead County. Flathead Valley Community College, a two-year college, is located on US Highway 93 in Kalispell. There are two primary hospitals located in the Flathead Valley. Kalispell Regional Medical Center is a 174 bed hospital located on the medical campus in Kalispell. North Valley Hospital is a 31 bed hospital located in Whitefish. Clark Real Estate Appraisal (11-128e) (12/19/2011) 20 Tourism The nonresident travel industry accounts for approximately 7% of the state of Montana's total employment. There were 10.67 million visitors to the State of Montana in 2007 which represents a 20% increase since 1997. Glacier National Park and Yellowstone National Park are the top attractions to Montana. Glacier National Park experienced 2.2 million visitors in 2010 and was the Park's busiest year since 1983. This indicates an increase of approximately 14% from 2009. (Source: The Daily Interlake Newspaper December 2010) Linkages & Transportation Various state highways connect the three Flathead County cities. US Highway 93 is considered the most significant corridor in the Flathead Valley. All cities are within an easy commute of each other. The Canadian border is within a one to two hour drive from most portions of Flathead County. There is a port of entry just north of Flathead County in Eureka, Montana and another border crossing at the line dividing Glacier National Park of the United States and Waterton National Park of Canada. Glacier Park International Airport is serviced by Delta Airlines, Allegiant Air, Horizon Airlines and United Airlines. There is a train depot in Whitefish that is a stop for Amtrak. The Burlington Northern Santa Fe Railroad freight trains run through Whitefish, Columbia Falls and Kalispell. City and Communities The table below provides a summary of the larger cities and communities in Flathead County. Po ulation I %Change 2000 - 2020 Market Overview 20oo Census 2010 Census Kalispell P 14,223 1 2 County Seat. Regional Business Center including Medical Center, Retail Hub & Community College. 9 9 7 40.1% Centrally located with convenient access to many recreational opportunities. Columbia Falls 3,645 4,688 28 6% Gatewayto Glacier National Park. Located along Flathead River. Close proximity to many outdoor recreational opportunities. Historically industrial in nature. Whitefish 6,357 26.34b Resort community located nearWhitefish Lake, Whitefish River and Whitefish Mountain Ski Resort. S,o32 Po ulation increases in summer due to numerous vacation and second home owners. Evergreen 6,215 7,616 22.5% Unincorporated area adjacent to the city limits of Kalispell. Area consists of residential, retail and li ht industrial type properties. Communities located along Flathead Lake primarily bedroom communities for Kalispell. Population Somers and Lakeside Area 2,235 3,778 69.o% increased in summer due to numerous vacation and second homeowners. Close proximity to many outdoor recreational oortunities. Bigfork Area 1,421 200.5% Resort community located along Flathead Lake featuring numerous restaurants, specialty shops, art 4,270 alleries and a theater. Main economic base is tourism. County Economic Data Conclusion Attractions such as Glacier National Park, Flathead Lake and Whitefish Mountain Ski Resort will continue to be a draw for second home buyers, nonresident travelers and Montana residents to the Flathead Valley. The short term outlook for the area is guarded and will likely remain so for the next few years due to the higher unemployment rates and weak housing market in Flathead County. The long term outlook for the area is positive due to the abundance of natural resources and the potential to diversify the employment. Clark Real Estate Appraisal (11-128e) (12/19/2011) 21 KALISPELL ECONOMIC DATA The subject property is located in the northwest portion of the city limits of Kalispell. The city of Kalispell is the county seat for Flathead County and it is the major economic and business center for the area. Services available in Kalispell include a thriving medical center and an expanding community college. Population & Income Based on the 2010 Census the population of the city of Kalispell was 19,927 compared with 14,223 in 2000 which indicates a 40% increase in 10 years. The average household income was estimated to be $48,360 in 2008. This is lower than the estimated average household income for Flathead County of $52,474. Employment ----------- - Approximately 47.3% of the employed population in Kalispell is in service type industries, 15.7% is in retail trade, 8.1 % is in construction, 6.5% is in finance/insurance/real estate and 5.1 % is in public administration. The remaining employment categories in Kalispell are; agriculture/mining, manufacturing, wholesale trade, transportation/utilities and information. Each of these categories includes 5% or less of the employed population. Linkages &Transportation US Highway 93 runs north to south through the city of Kalispell and is labeled as the "Main Street" of the central business district. US Highway 93 provides access to Flathead Lake to the south of Kalispell and Whitefish to the north of Kalispell. There is a by-pass for US Highway 93 that is west of the city. The southern portion is complete and the northern portion is slated for completion in 2012. US Highway 2 is an east to west arterial road through Kalispell and provides access to Columbia Falls and Glacier National Park. There is some public transportation in Kalispell. There is a municipal airport in Kalispell which can accommodate small airplanes. Commercial Real Estate Properties improved with medical and/or general offices and retail spaces are located throughout the Kalispell area. Most of the growth in the past 4 years has been concentrated in the area north of Kalispell on US Highway 93 at Reserve Drive. This area has become the retail hub for the greater Flathead Valley area with the development of 3 neighborhood shopping centers. Additionally, the expansion of US Highway 93 to 4 lanes on the southern portion of Kalispell helped spur commercial development in that area over the past 4 years. There is a relatively large supply of vacant commercial sites and improved commercial properties available for sale in Kalispell. Vacancy rates in most commercial sectors for improved properties are high in comparison to recent years. Clark Real Estate Appraisal (11-128e) (12/192011) 22 Based on the research of Clark Real Estate Appraisal, there have been 233 commercial building permits issued in the city of Kalispell since 2000. The rate of commercial new construction was relatively steady from 2000 through 2007 and dropped significantly beginning in 2008. Commercial construction permits issued from 2000 through 2010 in Kalispell are indicated on the table below. TYPE 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 TOTAL %Change f 2009-2010: Offices, Banks, R&D and Professional 16 10 2 11 8 9 9 5 4 0 1 75 100% Retail, Wholesale, Dining& Personal Care 10 8 8 7 16 6 6 14 3 3 5 86 67% Mixed Use 0 0 0 0 0 1 0 0 0 0 0 1 0% Motels, Hotels and RV Parks 1 1 0 01 01 5 1 11 0 0 0 9 0% Hospitals, Other Institutions 0 0 0 0 1 1 3 1 2 0 0 0 7 0% Industrial, Manufacturingand Transportation 6 5 5 5 2 5 2 0 0 1 0 31 -100% Religious Buildings 0 1 1 0 0 0 0 0 0 0 0 2 0% Public Buildings & Projects 0 0 11 2 0 5 1 5 1 3 4 22 33% TOTALS 33 25 17 25 27 F 34 20 27,777t 7 10 233 43% Source: Construction Monitor& City of Kalispell;2007-2010,CityofKalispell The chart provided depicts the inferred demand based upon historical sales activity for commercial properties in the Kalispell market since 2001. The source for this data is the Northwest Montana Multiple Listing Service (MLS). The sale volume for improved commercial properties has averaged approximately 30 sales per year since 2001 with sales activity peaking in 2004 with a total of 40 sales. Based upon our analysis of current market conditions there is an oversupply of improved commercial properties available for sale in the Kalispell area. The current inventory of properties available for sale represents more than a 3 year supply based upon the trend in the number of annual sales from the past 10 years. ,gyp? 2002 2W 2001, 00 2006 -tool 208 Zoo apt° Sales of Improved Commercial Properties ----Sales of Vacant Commercial Properties The number of sales for all types of vacant commercial properties has averaged approximately 15 sales per year over the past 10 years. There were only 2 sales in 2010 which is the lowest level since 2001. Additionally, there is an abundance of vacant commercial sites available for sale suggesting more than a 5 year supply based upon the trend analysis since 2001. On average, the active listings for commercial properties have been available for sale beyond the typical marketing time from recent prior years. Recent sales information indicates continued downward pressure on lease rates and sales prices. Clark Real Estate Appraisal (I 1-128e) (12/19/2011) 23 Residential Development & absorption There were numerous new residential subdivisions developed in various portions of the city limits but concentrated in the areas west and north of Kalispell over the past several years creating an oversupply of residential parcels. The current economic conditions have resulted in stalled lot sales in residential developments and have worsened the imbalance of supply and demand. The annual volume of new parcels created in Kalispell over the past ten years is included on the table below. 2000 2001 2002 2003 2004 200S 2006 2007 2008 2009 2010 TOTAL TOTAL#OF NEW LOTS 41 86 121 245 510 419 582 319 252 240 0 2815 ACRES IN NEW LOTS 17.4 22.3 48.7 125.1 136.4 110.0 304.2 100.0 209.2 109.0 0 1182 ACRES IN OPEN SPACE N/A N/A N/A N/A N/A N/A 34.1 6.08 26.56 11.7 0 78 AVEAGE LOTSIZE INCLUDING OPEN SPACE 0.42 0.26 0.40 0.51 0.27 0.26 0.52 0.31 0.83 0.45 0.00 Source: CityofKalispell In 2010, for the first time since 1973 when this information was reported by the City of Kalispell, there were no new lots created. Also, there are over 890 vacant lots that were created since 2004 (this number does not include vacant lots created prior to 2004). In addition, there are 967 single family residential lots and over 350 multi -family lots that have preliminary plat approval in Kalispell at the end of 2010. (Source: Kalispell Construction, Subdivision and Annexation Report date January 11, 2011). Demand has remained low in 2010 and it not predicted to change significantly in the next few years. For this reason there is projected to be an abundant supply of subdivision lots for the foreseeable future in Kalispell. The chart provided illustrates the trend in residential parcels sales over the past 10 years in the Kalispell market. The statistics are based upon information from MLS and include single family and multifamily lots up to 1 acre in size in the Kalispell market. The p GREATER KALISPELL AREA number of sales for residential sites HISTORICAL SALES ANALYSIS-RESIDENTAIL LAND SALES RESIDENTIAL & MULTIFAMILY VACANT SITES has averaged approximately 110 lots UP TO 1 ACRE IN SIZE per year since 2000. As the data SOURCE: MULTIPLE LISTING SERVICE indicates the peak in the market 300 - - - 250 - occurred in 2004 and 2005. The 200 sales volume for 2009 was the 150 - lowest level in the past 10 years with 100 - - -- 2010 only a slight improvement (17 So - - - sales in 2010 Versus 15 sales m 2009). Additionally, there is an 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 abundance of residential sites Total Number of Sales available for sale in the Kalispell market area that have been listed beyond the typical historical marketing time based upon the trend analysis. Clark Real Estate Appraisal (I 1-128e) (12/19/2011) 24 The table below depicts residential construction by type based upon construction permits in the city of Kalispell for the past 11 years. TYPE 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 TOTAL %Change 2009-2010 SFR*-Single Family Residential 97 106 135 110 192 233 170 146 78 46 50 1363 9% DUP-Duplex 28 36 36 14 30 25 23 14 21 8 3 238 -63% TH-Townhouse 0 0 0 54 127 86 128 67 54 16 10 542 -38% MF-Multifamily 21 0 103 12 130 34 28 95 33 33 29 518 -12% MH-Manufactured/Mobile Home 1 1 4 3 1 0 0 0 0 0 0 10 0% TOTALS 147 143 278 193 480 378 349 322 186 103 92 2671 -11% * Included TH Prior to 2002; Source: City of Kalispell Construction of single family residences in Kalispell increased relatively steadily from 2000 through 2005 and then began a decline through 2009, increasing only slightly in 2010. The number of new lots created has exceeded the number of building permits issued until 2010 when no new lots were created. This also indicates an oversupply of residential lots. Absorption of new residential lots has become a problem and this problem will likely continue into the foreseeable future due to potential increases in competition as economic conditions improve. The historical sales activity for finished residential units in the Kalispell market area is provided on the following chart. The data is based upon information collected from MLS for sales of finished single family residences, condominiums and townhouses located on a 1 acre or less site. The sales volume for KALISPELL MARKET AREA Single family H ISTORICALSALES ANALYSIS- IMPROVED RESIDENTIAL PROPERTIES residences was the SOURCE: MULTIPLE LISTINGSERVICE Criteria: Lot Size Less than 0.50 Acre lowest m the past __ _ _ 450 400 decade. On average, 350 the marketing time for - 300 single family 250 200 residences has -- - - - 150 continued to increase "` 100 50 since 2005. The - __.___ _ _ __ __ .�. 0 statistics from the 7!P1 Z°0Z TO' 20�A 200S 2006 T&' TOOS 2°°9 2010 Q Sales of SF Residences QSale s of Con dos/Townhomes 2010 sales indicates an average sales price lower than recent years (2006-2009). The current supply of single family residences available for sale on MLS indicates less than a 1 year supply based upon the 10 year average number of sales. However, there are indications of a "shadow inventory" which are homes in or close to foreclosure and also include homes that owners want to sell but are waiting to put on the market when it improves. Sales of condominium or townhouse units represent a relatively low percentage of the overall residential market. There were 56 sales in 2010 which is slightly less than the 10 year average of 63 sales per year. The inventory for condominium and townhouse units available for sale represents an approximately 1.2 year supply. This segment of the market is likely to also have a shadow inventory. Clark Real Estate Appraisal (I1-128e) (12/19/2011) 25 Conclusion The general market for commercial properties in the area is considered guarded due to the local economic situation and the relatively large supply of available inventory. Sales of commercial properties have slowed down over the past 2 to 3 years and vacancies have increased in most sectors of the commercial real estate market. There is likely to be limited economic growth in the immediate future as population increases at a much slower pace than exhibited from 2006- 2008. There is an oversupply of residential lots in greater Kalispell area. It will take some time for the existing supply to be absorbed. Additionally, new residential construction has slowed and will not likely increase until general market conditions improve. Future growth and expansion for the greater Kalispell area is considered likely in the long term. Kalispell Area Map :_:.. 0 1 Clark Real Estate Appraisal (I 1-128e) (12/ 19/201 1) 26 PROPERTY DESCRIPTION LOCATION SW Corner of Glenwood Drive & Two Mile Drive, City of Kalispell, Montana ACCESS` Vehicular access via Adjacent Gateway West Mall Property EASEMENTS See Discussion ENCROACHMENTS None Evident FLOOD ZONE Flood Zone Fl MA Map Number 30029C 1 05G Map Dated September 28, 2007 ZONING 13-2, General Business TOPOGRAPHY Generally Level IMPROVEMENTS See Discussion UTILITIES See Discussion A. GENERAL SITE DESCRIPTION The subject site consists of one legal parcel identified as Lot 1 of the Amended Plat of the Northeast Portion of Gateway West Addition No. 34, City of Kalispell, and Flathead County, Montana. The site has a rectangular shape. The lot dimensions are 230.00 feet along Glenwood Drive, 340.07 feet along Two Mile Drive, 230.00 feet along the west side lot line, and 339.92 feet along the south side lot line. The subject property was created via a Certificate of Plat recorded on April 20, 2005 as Document #200511012330 at the Flathead County Clerk and Recorder's Office. Views of the subject plat and addition exhibits are on the following pages. Clark Real Estate Appraisal (11-128e) (12/192011) 27 Subject Plat AMENDED PLAT OF NORTHEAST PORTION GATEWAY NEST ADDITION No. 34 RV THE 11E11451W4 SEC t4 r26k R.22W: F41, M- FLATWAO C&WTY, UUMANA LOT I 1795 AC Enlarged View of Subject from Plat 7*WO MILE DRIVE LOT (C 0 S 7�a76) Z 795 AC.yk LU cr, .V Clark Real Estate Appraisal (I 1-128e) (12/19/2011) 28 View of Subject Portion of Flathead County GIS Map �,NEST ADD 34 I GA Aerial View of Subject Property from Flathead County GIS Map Clark Real Estate Appraisal (I 1-128e) (12/19/2011) 29 Zoomed in Aerial View — ESRI Mapping Zoomed Out Aerial View — ESRI Mapping Clark Real Estate Appraisal (I1-128e) (12/19/2011) 30 B. ACCESS The subject property has vehicular access via the mall property to the south The mall property has a driveway from Glenwood Drive just south of the subject property. The mall property has additional vehicular access from US Highway 2 and Financial Drive as well. C. ZONING The subject property is in the B-2, General Business Zoning District. The intent of this district is; "A district which provides for a variety of sales and service establishments to serve both the residents of the area and the traveling public. This district depends on the proximity to major streets and arterials and should be located in business corridors or in islands. This zoning district would typically be found in areas designated as commercial and urban mixed use on the Kalispell Growth Policy Future Land Use Map. " Permitted uses in this zoning district include; athletic club, assembly — light, auctions, auto parking — surface, auto (RV, boats, motorcycles) sales and/or repair, auto rental, limo, shuttle (taxi) services, auto service station, bakery, banks and financial institutions, barber and beauty services, bed and breakfast, bus station, car wash, auto detailing shop, catering establishments, church, community center, day care - home (12 or fewer), dwelling - single family, food bank, funeral homes and crematoriums, greenhouses, nursery centers and landscaping materials, home occupations, hotel, motel, HVAC/electrical/plumbing, sales/service, janitor services, laboratories, tech research, development and testing, Laundromats or dry cleaners, libraries, museums and similar cultural facilities, lumber/building material sales (with outdoor display/storage), media (newspaper, radio, TV), media, towers and facilities, microbreweries, office - pro fessional/governmental, medical (with limited overnight stay), pack and ship shops, parks, photographic studio, police and fire stations, print and copy shops, post office, recreation area, indoor, rental service stores and yards, repair shops — appliance, clothing/electronics, restaurants, retail business, safe houses, schools — commercial, small engine sales, service and repair, tattoo parlor, theaters, and veterinary clinic - small animals There minimum lot area in the B-2, General Business District is 7,000 square feet. The minimum lot width is 70 feet. The yard setbacks are 15 feet along the front and side corner, 5 feet along the sides, and 10 feet along the rear. The maximum building height is 40 feet. There is no maximum permitted lot coverage area. Off street parking is required in this zoning district and varies according to use. The subject property appears to conform to current zoning requirements. An area zoning map which includes the subject property is included on the following page. Clark Real Estate Appraisal (11-128e) (12/19/2011) 31 D. IMPROVEMENTS The subject property is improved with an asphalt paved parking lot constructed in 2005 or later. There are approximately 191 parking spaces. The lot includes storm drains, concrete curbing along the perimeter, and street lights. E. EASEMENTS, BUFFERS AND RESTRICTIONS There are a number of easements and restrictions noted in the recorded Certificate of Plat that created the subject property. These include a number of utility easements as well the Declarations of Restrictions and Establishment of Easements Affecting Land for the Gateway West Shopping Center. This document indicates that there will be shared foot and vehicular access across the shopping center or mall property. This document also indicates that the owner of the subject property is responsible for payment of the annual pro-rata share of common area expenses or CAM charges for the shopping center. I was not provided with details regarding the mandatory CAM charges. For that reason I have not determined any affect on value of the subject property due to this requirement. If the charges are significant, the value of the subject property could be adversely impacted. There is a restriction in the most recently recorded deed for the subject property. This restriction states "that the land herein described shall be held and maintained by the Grantees and their successors and assigns, for parking lot purposes only, unless and until the Grantor, or its successors or assigns of the adjoining Gateway West Mall, agree to the removal of this deed restriction." Two valuations are included in this report in order to determine any impact on value due to this deed restriction. These valuations are made in two separate sections of this report. Section 1 includes the opinion of value based upon the hypothetical condition that there is no deed restriction in place. Section 2 includes the opinion of value for the subject property with the existing deed Clark Real Estate Appraisal (11-128e) (12/192011) 32 restriction. Both values were developed to assist the clients in making decisions about the subject property. There are overhead power lines. If additional easements or encroachments are present that appraiser is not aware of, the value indicated in this report could be adversely impacted. F. TOPOGRAPHY, VEGETATION, WETLANDS, SOILS, DRAINAGE AND ENVIRONMENTAL CONSIDERATIONS The subject property slopes down slightly from the street grade along Two Mile Drive and then is generally level. I have not been provided with an environmental audit for the subject property and assume there are no toxic materials or groundwater contamination of the property. Should any of these conditions be present, the value estimate included in this report may be affected. I assume that drainage has been adequately engineered for the site and improvements I have not been provided with a soil study for the subject site. I assume the soil can accommodate the type of construction, which is typically seen in the subject area. According to the Federal Emergency Management Flood Zone Map the subject property is located predominantly in Zone X. Zone X is an area of minimal flood hazard. This is shown on flood map 30029 1805G dated September 28, 2007. A copy of a portion of this snap is included in this section of this report. G. UTILITIES The subject site has access to electricity, natural gas, telephone, cable television and internet service. There is also access to a municipal water and sewer system. H. PUBLIC SAFETY AND SERVICES Police, fire protection, and other services are provided by the City of Kalispell. The subject site is suitable for the existing improvements. The subject site has a rectangular shape with frontage along two streets. The site has adequate size and shape for many commercial uses; however, the deed restriction prohibits any other use than as a parking lot. Specific subject site suitability is addressed further in the Subject Market Analysis portion of this report. Additional property exhibits are included on the following pages. Clark Real Estate Appraisal (I 1-128e) (12/19/2011) 33 FLOOD MAP f y JSMBUN LI N E.com � 4� �.�.+r F100058URGE �`, PROPERTY ADDRESS: Lat 61140370.028424, Lon: -9272 M.742137 ' Nolh of dE T4 Rat. r _ ' c i f .il FLOOD3CAPE , y 4 "1 — — y V IIIII _ Fhrxi Hwarrt N-tip EE 71, �E.r1a3=xE" imp mxmw 30029C1805G t]I�C41YY f1�Y xSepMfftW28,2007 1 . HOW t.apoM EiO NXd rM r IAooefale 1100 tt6k 1 - r LOW tf" risk E El 4%574.1234 d! E .S' y U^. 1: '(7 11Y,: _...- 2,M) L u 7 ' �� KENa%A' y ' har..ar�FboSusw O 1999-2Q11 8otrrM"W= C WPXaid;. AR fWft msavft PMkC!d Oy U.B. Pa1C;E NWb= 601326, 667861S., 684226A MW 7rr386G1, Clark Real Estate Appraisal (I 1-128e) (12/19/2011) 34 SUBJECT PHOTOGRAPHS Subject Parking Lot Looking NW from SE Comer East Parking Lot Boundary Looking North Glenwood Drive Looking North Parking Lot Looking West along South Boundary Glenwood Drive Looking South Parking Lot Interior Looking West Clark Real Estate Appraisal (11-128e) (12l19/2011) 35 ADDITIONAL PHOTOGRAPHS Lot Imerior Looking South toward Gateway West Mal I Lot Interior Looking SE from NW Comer Two Mile Drive Looking West Parking Lot Interior from NE Comer Looking SW West Parking Lot Boundary Looking South Two Mile Drive Looking East Clark Real Estate Appraisal (11-12Re) ( [2/19/2011) 36 Real property taxes in Flathead County are based upon the fair market value of each property. The subject property is tax exempt and there is no current tax bill. The value in this report is based upon the property as if owned and operated by the typical market participant which would not be a tax exempt entity. For this reason it was necessary to estimate likely real property taxes for the subject property. The tax mill levy for subject portion of the City of Kalispell is applied to the taxable value for an estimate of a current tax bill. The calculations are included on the table below; Real Property Tax Estimate Assessor # E[101057 Estimated Market Value (for Tax Purposes) $175, Taxable Value (2.72%of Market Value) $4, 2011 Mill Levy 0.686440 Base Tax Estimate $3,267.45 Plus 2011 Special Taxes & Fees $500.00 Total Tax Estimate $3,767.45 Costs for governmental services are constantly increasing. Real property taxes for the subject property if it were taxable would likely increase in the future. Clark Real Estate Appraisal (11-128e) (12/19/201 i) 37 Subject Productivity .Analysis General Property Description: The subject property is an approximately 1.7985 acre site improved with an asphalt paved parking lot suitable for approximately 191 vehicles. There is a deed restriction in place which states that the subject property can only be used as a parking lot. Area Land Use Trends: The subject property is adjacent to a 16.48 acre site improved with a privately owned portion of the Gateway West Shopping Center. This portion of the Gateway West Shopping Center building totals approximately 140,766 square feet. An approximately 63,101 square foot portion of the shopping center building on a 1.45 acre site is owned jointly by the City of Kalispell and Flathead County Economic Development Authority. Gateway West Shopping Center has not been fully occupied for a number of years. The City of Kalispell purchased the portion of the mall indicated above in 2000. This portion of the mall was purchased to house an office for a telecommunications company known as Stream International. This area of the mall is occupied by a telecommunications company known as TeleTeeh. The original tenant did not remain in the facility. The subject property was purchased to provide parking for employees housed in this portion of the mall. The portion of the mall not owned and occupied by the City of Kalispell and Flathead County Economic Development Authority is being leased for use as a campus for area nonprofit agencies. The food court area is being operated by a local chef Other area improvements include two multi -tenant office buildings, vacant commercial sites, a 3.126 acre site improved with a movie theater building constructed in 1976 and a 0.86 acre site improved with a free-standing retail building constructed in 2006. There is a day care center across Glenwood Drive to the east of the subject property. There is an assisted living facility located across Two Mile Drive to the northeast of the subject property. Most properties along the north and south sides of Two Mile Drive across from the subject and to the west are residential single and/or multi -family properties. Potential Users of Subject Property Potential purchasers of the subject property with the existing deed restriction in place would be investors seeking ownership of a parking lot. Potential purchasers of the subject property based upon the Hypothetical Condition that the deed restriction was not in place would be investors and or developers interested in a relatively large sized site in a commercial zoning district of the City of Kalispell. Demand Analysis The demand for the subject property with the existing deed restriction in place would be tied to the income producing ability of the subject property as a parking lot. The potential income for the subject property as it is currently improved is addressed in Section 2 of this report. Clark Beal Estate Appraisal (I 1-128e) (I2/ I91201 1) 38 The demand for the subject property based upon the Hypothetical Condition that the deed restriction does not exist would be similar to that for other commercial sites with proximity to the central business district of Kalispell. Historical demand can shed light on future demand. I have prepared a historical demand analysis for vacant commercial sites in business zoning districts only in the greater Kalispell area using the area Multiple Listing Service (MLS). Not all properties transfer through this service; however, it provides the only succinct source of price data due to the non -disclosure status of the State of Montana. Data from the area MLS does provide a good indication of general trends. The table below represents the Inferred Demand which is the historical demand for similar properties in prior years. Kalispell Commerical Site Sales Business Zoning Districts Only Source: Multiple Listing Service Year #of Sales Median Price/SF Median Site SF Average Percentage Sale to List Price Average DOM 2002 12 $7.75 20,038 96% 419 2003 10 $5.00 26,136 84% 571 2004 9 $6.99 20,038 91 % 414 2005 10 $7.01 35,501 95% 339 2006 8 $10.62 23,522 98% 209 2007 7 $13.45 21,344 93% 200 2008 2 $9.31 34,195 81% 193 2009 0 - - - - 2010 1 $8.78 23,348 64% 668 2011 1 $4.17 44,170 46% 682 Averages B There has been an historical demand for vacant sites in business zoning districts in the greater Kalispell area over the past 10 years. The sales volume for such sites for the decade peaked in 2002 with 12 sales. The median price per square foot peaked in 2007 at $13.451SF. The sales volume has declined dramatically since 2007. The average annual demand for vacant sites in business zoning districts in the area is indicated to be 6 per year. Based upon the average annual sales volume for the decade, there is an approximate 3 year inventory available of such properties. Forecast of Competitive Supply As stated there is an approximate 3 year supply of sites similar to the subject property available for sale. Clark Real Estate Appraisal( I I-128c) (12/19/2011) 39 Interaction of Supply and Demand The current available supply exceeds demand noted in prior years. Properties are starting to be sold; however, purchasers still expect bargains. There will likely be downward price pressure for the active listings in the future. Forecast of Capture Rate Based upon my analysis demand may be returning for properties such as the subject; however, prices are relatively low compared to prior years and recent marketing times have exceeded 1 year. Based upon my analysis of supply and demand, a competitive price would be required in order for the subject property to sell within 1 year or less. The values indicated in this report for the subject property are considered competitive. If the subject property was priced competitively and actively marketed at the appraised values, the marketing times would not likely exceed 12 months. Analysis of Changes in Market Conditions Based upon my research, there were few recent sales of vacant commercial sites in the subject market area to use as direct comparables in the sales comparison analysis for the subject. Therefore, it was necessary to expand the search to include sales that closed prior to 2011. Due to the time lapse and the current economic climate, adjustments were made for changes in market conditions from the date of sale of the comparable data to the effective date of this report. These adjustments for changes in market conditions are based on paired sales or sale/relist analyses. The tables below depict relevant market data supporting the need for market conditions adjustments. Gross Annual Address City Sale Year Safes Price Year list Price %Change 217 2nd St W Whitefish IrrWoved 2007 $565,000 2011 $460,000 -4.65% 110 Westview Park Place Karispell Vacant 2006 $165,000 2011 $155,000 -1,21 % 1730 W How ay 35 Kalispell Vacant 2007 $325,000 2011 $279,000 -2.83% 1335 US Hmy 93 Kalispell Vacant 2006 $155,000 2011 $128,500 -3.42% 120 Westview Park Race Kalispell Vacant 2005 $175,000 2011 $140,000 -3.33% 1005 Baker Ave Whitefish Woved 2007 $2,162,501 2011 $1,600,000 -6.50% The first table presented depicts sales and re -sales of commercial (vacant & improved) properties in the greater Flathead Valley. Clark Real Fstate Appraisal (1 t-12&e) (12/191201 t) 40 The second table depicting sales and active listings suggests an annual decline as much as 6.5% over the past 5 to 6 years based upon re -listings for previously sold properties. Additionally, it is likely the active listings will sell for an amount at or below current list price due to continued downward price pressure in the market because of low demand and oversupply. Based upon the paired sales and sale/re-list analyses, downward market conditions adjustments of 5% per year for sales that closed between 2006 and 2009 are reasonable and necessary. Clark Real Fstate Appraisal (] 1-128e) (12/ 191201 1) 41 The four basic economic principles of supply and demand, substitution, balance and conformity are considered to be the basic tools of analyzing the relationship between economic trends and an appraisal. Market forces create market value. For this reason, the analysis of highest and best use is very important. When the purpose of an appraisal is to estimate market value, a highest and best use analysis identifies the most profitable, competitive use to which a property can be used. According to The Appraisal of Real Estate - Thirteenth Edition by the Appraisal institute, Highest and Rest Use is defined as follows: "Highest and best use is the reasonably probable and legal use of vacant land or an improved property that is legally permissible, physically possible, appropriately supported, and financially feasible and that results in the highest value." The analysis for Highest and Best Use considers first the reasonably probable uses of a site that can be legally undertaken. The final Highest and Best Use determination is based on the following four criteria: • Legally Permissible: The availability of land for a particular use in terms of existing regulations and restrictions, deed restrictions, lease encumbrances, or any other legally binding codes, restrictions, regulations, or interests. • Physically Possible: The physical adaptability of the site for a particular use. ■ Financially Feasible: All uses that are legally permissible and physically possible that are likely to produce an income, or return, equal or greater than the amount needed to satisfy operating expenses, financial obligations, and capital amortization are considered to be financially feasible. • Maximally Productive: Of the financially feasible uses, the use that produces the highest net return or the highest present worth. It is important to recognize the possibility that the Highest and Best Use of the land could differ from the Highest and Best Use of the property. This occurs when a site has existing improvements and the Highest and Best Use of the land differs from the current use. Often, the current property use will continue until the value of the land, under its Highest and Best Use, less existing improvement demolition costs, exceeds the total value of the property in its present use. The Highest and Best Use analyses and conclusions are included on the following page. Clark heal Estate Appraisal (II-128e)(12/1912011) 42 BASED UPON HYPOTHETICAL CONDITION AS VACANT Legally Permissible The subject property is in the B-2, General Business zoning district of the City of Kalispell. There are a wide variety of legally permissible uses for the subject site as if vacant based upon the Hypothetical Condition referenced. The allowable uses are included in the Zoning portion of the Property Description portion of this report. Physically Possible The subject site at 1.795 acres is a relatively large commercial site for the area. The subject site has approximately 340 feet of frontage along Glenwood Drive and 230 feet of frontage along Two Mile Drive. There is vehicular access to the site via the adjacent shopping center property. There is adequate area for many types of commercial improvements. Services such as electricity, telephone, natural gas, water and sewer are either connected to the subject property or are available in the immediate area. Financially Feasible As discussed in the Subject Market Analysis portion of this report, the most significant area property is the Gateway West Mall. The mall has not been fully occupied by retail tenants for a number of years. The majority of the mall is being utilized as a campus for area nonprofit agencies with the remainder occupied by Teletech. There are two multi -tenant office buildings, several vacant commercial sites, a former movie theater and a free-standing retail building all located south and west of the subject property. Most properties in the few blocks north of the subject and along Two Mile Drive are residential single and/or multi -family. The subject property is in a commercial area but along secondary traffic arteries. A commercial use that does not require visibility from or frontage along a significant area traffic artery would be financially feasible. The market for most commercial properties is not in balance in the Kalispell area. For these reasons, the current financially feasible use for the subject site as if vacant is to hold for commercial use when residual demand is identified. Maximally Productive Based upon this analysis of the legally permissible, physically possible and financially feasible uses of the subject site as if vacant and based on the referenced Hypothetical Condition, the maximally productive highest and best use of the subject site as if vacant is to hold for future commercial use. AS IMPROVED The subject property is improved for use as a parking lot. The value of the subject property as a parking lot is estimated in Section 2 of this report. The value of the subject site as if vacant (based upon the hypothetical Condition that there is no deed restriction regarding use in place) exceeds the value for the subject property as a parking lot. For this reason, the highest and best use as improved is for eventual demolition of all or a portion of the parking lot and construction of some type of commercial improvements when residual demand is identified. Clark Real [:state Appraisal (11-128e) (12/19/7011) 43 If there were no deed restriction in place use of the subject site as a parking Iot would likely continue as an interim use until residual demand for some type of commercial development was indentified. AS IS AS VACANT Legally Permissible Due to the deed restriction in place the only legally permissible use for the subject property is as a parking lot. Physically Possible It is not necessary to address physically possible uses as the only legally permissible use is as a parking lot. Financially Feasible It is not necessary to address financially feasible uses as the only legally permissible use is as a parking lot. Maximally Productive Since use of the subject property is the only legally permissible use, this is also the maximally productive highest and best use. AS IMPROVED The subject property is improved for use as a parking lot. Continued use as such is the only legally permissible use and is the highest and best for the subject property as improved. Clark Real Estate Appraisal (1 1-128e) (12! 19/2011) 44 I l ,1911W_\ �� f In the foregoing sections of this report, I have examined and discussed the subject property. To arrive at estimates of market value for the subject property, it is necessary to collect and analyze all available data in the market, which might tend to indicate the values of the property. The subject property must be compared to similar properties that can be constructed, purchased, or from which a similar monetary return may be received. APPROACHES IN THE VALUATION OF REAL PROPERTY The three recognized approaches in the valuation of real property are Sales Comparison, Cost Approach and Income Capitalization. According to The Appraisal of Real Estate - Thirteenth Edition by the Appraisal Institute, the approaches are defined as follows: Cost Approach A set of procedures through which a value indication is derived for the fee simple interest in a property by estimating the current cost to construct a reproduction of (or replacement for) the existing structure, including an entrepreneurial incentive; deducting depreciation from the total cost; and adding the estimated land value. Adjustments may then be made to the indicated fee simple value of the subject property to reflect the value of the property interest being appraised. Sales_ Comparison Approach The process of deriving a value conclusion for the subject property by comparing similar properties that have recently sold; identifying appropriate units of comparison and making adjustments to the sales prices (or unit prices) of the comparables based on the relevant, market - derived elements of comparison. The Sales Comparison Approach may be used to value improved properties, vacant land or land being considered as though vacant when an adequate supply of comparables sales is available. Income Capitalization Approach An appraiser analyzes a property's capacity to generate future benefits and capitalizes the income into an indication of present value. The principal of anticipation is fundamental to the approach. Techniques and procedures from this approach are used to analyze comparable sales data and to measure obsolescence in the Cost Approach. Each of the three approaches to value requires data collection from the market and each are governed equally by the principle of substitution. This principle holds "when several similar or commensurate commodities, goods or services are available, the one with the lowest price will attract the greatest demand and widest distribution". (Source: The Appraisal of Real Estate — Thirteenth Edition by the Appraisal institute) Section 1 of this report includes the analysis and estimate of value for the subject property based upon the Hypothetical Condition that there is no deed restriction regarding use of the property in place. The Sales Comparison Approach is developed in Section 1. Section 2 of this report provides the value estimate for the subject property as currently improved and with the deed restriction in place. This value opinion was developed using the Income Approach. Clark Real Estate Appraisal (I 1-128e) (12119/2011) 45 SECTION 1 (Based Upon Hypothetical Condition that Deed Restriction Does Not Exist) Clark Real Estate Appraisal(i1-128e)(12/19/2011) 46 We located 4 closed sales and 2 active listings of vacant commercial sites that are similar enough in location and utility to prepare a credible Sales Comparison Analysis for the subject property as if vacant based upon the Hypothetical Condition that there is no deed restriction in place. The unit of comparison selected is the price per square foot. This is the unit of comparison used by most market participants for purchases of similar sites. Land Corn parables Land Sale # Address Ciiy Sale Gate Sales Price List Price Square Feet PriceISF 1 2034 US Highway 2 E Kalispell Oct-11 $184,000 44,170 $4.17 2 101 Westview Park Place Kalispell Dec-10 $205,000 23,348 $8.78 3 1121 US Highway 2 W Kalispell Jul-05 $225,000 37,479 $6.00 4 11355 US Highway 2 W Kalispell Sep-06 $165.000 17,424 $8.90 Active 1 191 Financial Dive Kalispell NIA I S170,0001 20,0381 $8.48 Active 2 195 Financial Dive Kalispell I A 1$180,000 17,8601 $10.08 A complete description of each sale is included in the comparable land sale write-ups provided in this section of this report. A map depicting the locations of the comparables relative to the subject property is below; 4€ (� 3 F s» i �y f_ mm bra. Y ,* 1 a a� 8- 3 Clark Real Estate Appraisal (II-128e)(t2/191'2011) 47 LAND SALE 1 COMPARABLE SALE INFORMATION _ " Location 2034 US Highway 2 East City/State Kalis Ii, Montana County Flathead Assessor Number o656100 Geocode 07396604318060000 Zoning B-3, Community Business Site Size: Acres 1.01 Square Feet 44,170 Gross or Net Gross Date of Sale October 28, 2011 Sales Price $184,000 Less Cost of Improvements $0 Sales Price Adjusted $184,000 MLS # 294322 ANALYSIS OF SALE Price per A cre 1$182,178 Price per Square Foot $4.17 Price per Front Foot $1,373 TRANSFER INFORMATION Grantor John Preston King, Gary Steven King & Shannon Patrick Nally Grantee Bert E. Amiund Family Limited Partnership Type of Instrument Warranty Deed Document # O-1100023308 Marketing Time 682 Days on Market Financing/Conditions Cash/Market Veri£ed By/Phone # Shannon Nalty, Agentl(406) 249- 4028 Legal Description SecGon/Township/Range Tract 3BE also known as Parcel A of Certificate of Surety ##16944, Flathead County, Montana 4128-21 Intended Use/Comments This property was listed from 9/1812007 to 12115/2009 with an original list price of $463,783 that was lowered to $417,958 during the listing period. It was re -fisted on 12/15/2009 for $399,500. The price was lowered to $298,146 on 4/20/21311 PROPERTY DETAILS Access US Highway 2 E Traffic Count 22140 Topography Level at Highway Grade Lot Dimensions Various Shape Irre ular Rectangle Highest & Best Use Commercial Use Flood Plain _W No Improvements None Frontage (Feet) 134 Value of improvements NIA View Commercial Properties utilities Electricity, gas, telephone, Evergreen sewer & water Miscellaneous Report File # 1 t-093ec Clark Real Estate Appraisal (I 1-128c) (12,'IT2011) 48 LAND SALE 2 COMPARABLE SALE INFORMATION �� -- 16 i 3A { 'a 1/ 3, " � 2g t } - iGross I (�� = 3 �' Location 101 WesbAew Park Place city/state Kalispell, Montana County Flathead Assessor Number 0500352 Geocode 07396606317150000 Zoning B-2, General Business Site Size: Acres 0.54 Square Feet 23,348 or Net Gross Date of Safe December 30, 2010 Sales Price $205,04D Less Cost of irnprovements $o Sales Price Adjusted $205,000 MLS # 1286830 ANALYSIS OF SALE Price per Acre $382,463 Price per Square Foot Price per Front Foot $1,708 TRANSFER INFORMATION _ Grantor HFAM,LLC Grantee____ GregoryD.Eller Type of krstrument Warranty Deed Document # _ _ _ _ 1000030551_ Marketing Time 682 Days on Market FinancinglConditions Conventional/Market Verified By/Phone # Rich Thomas, Agent (406) 862- 2333 Legal Description Lot 2A of ResubdhAsion of Lots 2 and 3 of West -view Business Center, City of Kalispell, Flathead County, Montana Intended UselComments Hold for future construction of a dental office building. SectionlTownshiplRange 6-28-21 P ROPERTY DETAt LS Access Meridian Road I Traffic Count Unkown Topography Level at Street Grade with Upward Slope Lot Dimensions Various Shape Irregular Highest & Best Use Commercial Use Flood Plain No Improvements None Frontage (Feet) 120 Value ofimprovements N/A View lCommercial Properties Utilities Access to Municipal Services Miscellaneous Report Fife # 11-051b Clark Real Estate Appraisal (1 I-128e) (12/ 19/201 1) 49 LAND SALE 3 COMPARABLE SALE INFORMATION Location 1121 US Highway 2 West City/state Kalispell, Montana g raam s x r - -- ....`.° County Flathead Assessor Number 0500460 Geocode 07396512407150000 Zoning B-3, Community Business Site Size: Acres 0.86 Square Feet 37,479 Gross or Net Gross Date of Sale July 8, 2045 Sales Price $225,000 Less Cost of Improvements* $0 Sales Price Adjusted $225,000 MLS # 247860 ANALYSIS OF SALE Price per Acre J$261,628 Price per Square Foot $6.00 Price per Front Foot $1,160 TRANSFER INFORMATION Grantor ACG - Kalispell Investors, LLC Grantee Robert L. Ross & Kay L. Ross Type of Instrument Warranty Deed Document# 200518716060 Marketing Time 201 Days on Market Financing/Conditions Conventional/Market Verified By/Phone # Ted Schlegel, Agent Legal Description Lot 2 of Gateway West Subdivision Unit 2, Flathead County, Montana Intended Use Hold for future use or re -sale. Section/Township/Range 12-28-22 PROPERTY DETAILS Access Via Acess Easement from Highw ay 2W Traffic Count 16,490 Topography Lewl Lot Dimensions Various Shape Triangular Highest & Best Use Commercial Use Flood Plain No Improvements None Frontage (Feet) 194 Value of Improvements N/A View Commercial Properties Utilities Access to all Municipal Services Miscellaneous 'Appraisers Estivate Report File # 08-020e 8 08-097el Clark Real Estate Appraisal (I 1-12 Se) (I2/ 19i2011) 50 LAND SALE 4 COMPARABLE SALE INFORMATION - ... - ...� f.. :-_......_,_ 4. ( 9 i =� - Location City/State County Assessor Number Geocode ZoningB-3, Site Size. Acres Square Feet Gross or Net Date of Sale Safes Price Less Cost of Improvements* Safes Price Adjusted hfLS 1335 US Highway 2 West Kalispell, Montana Flathead 0977405 07396512402090000 Community Business 0.40 17,424 Gross 5eptembar 18, 2006 $155, 000 $0 $155, O00 262886 ANALYSIS OF SALE Price per Acre $387,500 Price per Square Foot Price per Front Foot NIA TRANSFER INFORMATION Grantor Lloyd S. Barrie & Travis J. Steindorf Grantee Theodore W illich, Ill Type offnskument Warranty teed Document # 200626110430 Markefing Time - 38 Bays on Market Financing/Conditions Cash/Market Verified By/Phone # Lloyd S. Barrie, Grantee)(406) 257 B921 Legal Description Lot 7 of ResubdMsion of Lots 1 and 3 of G€bson Addition No. 41, Flathead County, Montana Intended Use Future commerical use. This property was listed on the area MLS from September 2010 to September 2011. The original list price in 2010 and 2011 was $148,000. The price was lowered to $128.500. This listing expired on September 30, 2011. Section/Township/Raj 12-28-22 PROPERTY DETAILS Access Easement from US Highway 2 W Traffic Count NIA - not on main road Topography Level Lot Dimensions 113' X 154' Shape Rectangular Highest & Best Use Commercial Use Flood Plain No Improvements None Frontage (Feet) NIA Value of improvements NIA View Commercial Properties Utilftfes iAccess to all Municipal Services I miscellaneous Report File # 08-097e1 & 11 -1 PSe Clark Real Estate Appraisal (l 1-128e)(i2/19/2e1 1) 51 ACTIVE LISTING I COMPARABLE LISTING INFORMATION ------------------ ....... ... . .. H! i L IFJ Location .91 Financial Drive City/State Kalispell, Montana County Flathead A ssessor Number 0501968 Geocode 07396512411010000 Zoning B-2, General Business Site Size: Acres 0.46 Square Feet 20,038 Gross or Net Gross Date of Sale NIA ACTIVE LI STING List Price $170,000 Less Cost of linprovemente $0 List Price Adjusted $170,000 IMLS # 276847 ANALYSIS OF SALE Price per Acre $369,565 Price per Square Foot $8,48 Price per Front Foot $1,339 TRANSFER INFORMATION Grantor Cascade Professional Park, LLC Grantee NIA -ACTIVE. LISTING Type ofinstrument N/A -.ACTIVE LISTING:. Document # N/A. -ACTIVE LISTING Marketing Time ..... ... .... ..... Original List Date 2104/2008 Financing/Conditions NIA - ACTIVE -LISTING: ... Verified By/Phone # Fred Ricketts, Listing Agent (406) 751.5600 Legal Description Lot I of the Amended Plat of Lot I of the Amended Plat of a Portion of Gateway West Addition N. 34, City of Kalispell, Flathead County, Montana Intended Use/Comments This property is being marketed for commercial use, S. -_2 PROPERTY DETAILS Access Financial Dive Traffic Count Unknown Topography Level —Level with Street Grade___ Lot Dimensions 127'X 157'- Approximate Shape RKtan2ular Highest & Best Use Commercial Use Flood Plain No Improvements None Frontage {Feed 127 Value ofIrnprovements WA View Commercial Properties Utilities Access to Municipal Services Miscellaneous ... ... . . . . .... . ...... .. . Report File # 11 .1 28e(, Clark Rn I Emaic AppFaisal (11-128e)(12"19/201 1) 52 ACTIVE LISTING 2 COMPARABLE LISTING INFORMATION "a kl 5',r' S 111 i i Location95 Financial Drive City/state Kalispell, Montana County Flathead Assessor Number D501969 Geocode 07396512414030000 t I E r S f . Zoning B-2, General Business Site Size: Acres 0.41 Square Feet 17,860 Gross orNet Gross Date of Safe NIA -.ACTIVE LISTING List Price $180,000 Less Cost of improvements $0 List Price Adjusted $180,000 MLS # 276849 ANALYSIS OF SALE Price per Acre $439,024 PriceperSquare Foot I $10,08 Price per Front Foot $667 TRANSFER INFORMATION ; Grantor Cascade Professional Park, LLC Grantee NIA=ACTIVE LISTING Type of instrument NIA ACTIVE LISTING': Document # NIA ACTIVE LISTING Marketing Time Original List Date 2/4/2008 Financing/Conditions NIA'- ACTIVE LISTING Verified Sy/Phone 9 Fred Ricketts, Listing Agent (406) 751-5600 Legal Description Lot 2 of the Amended Plat of Lot 1 of the Amended Plat of a Portion of Gateway West Addition N. 34, City of Kalispell, Flathead County, Montana Intended Use/Comments This property is being marketed for commercial use. Section/Township/Range 12-26-22 PROPERTY DETAILS Access Financial Drixe Traffic Count Unknown Topography Level with Street Grade Lot Dimensions _ 113X 157' - Approximate Shape Rectangular Highest & Best Use Commercial Use Flood Plain No Improvements None Frontage (Feet) 270 Value of Improvements NIA View Commercial Pro rties Utilities Access to Municipal Services Miscellaneous Report File # 11-128ec Clark Real Estate Appraisal (I 1-128c) (12/ 19/241 1) 53 Sales Comparison Analysis Grid for Subject Site as if Vacant Adjustments have been made to these sales for differences between the sales and this subject site. These adjustments are noted on the spreadsheet below; COMPARABLE SALES ANALYSIS FOR - S=ECT SATE AS IF VACANT LOT 1 OF THE AMENDED PLAT OF THE NE PORTION OF GATEWAY WEST ACTION N0. 34 CITY OF KALISPELL, MONTANA DESCFWWN St&1ECT SALE1 SALE2 SALES SALE4 ACTNEI ACTIVE2 IDENTIMATION 2034 US HIGIwaY2 E 1)1wmtvAewParkP1 tWv$H14wv2w '635uSH1gwav2w 91FWnC1a1Dr 95F9'BnC131Dr c4TY Kal6pe€1 KaKsmo Kati pm KallsWl ga%vell KaIISPS4 SALES PRCE $194,000 $205,000 $225.000 $155.000 $170,000 $1801000 ADJUSTIVEPTTFORLISTPRC-E -$17,000 -$181000 ARJUSTNENT FOR IM'ROVEvIENTS HLrYERE7(P6 XLJW-S DEMOLITION ENV IROI NTAL OTHER L WALIZONING AD1U5?IDPPJCE $184,000 $2D6,©DD $225,000 $155,000 $153,000 $16Z000 PROPERTY R GHTS Fee Simple Fee Simple Fee Simple Fee Sirrpe Fee Srrple Fee S"le Fee Simple PROPERTY RIGHTS ADJUSINENT ADJUSTEDFRICE $1&4,000 $205,000 $225,000 $155.000 $153,000 $162,000 FINAN )NG Market Market Market Markel Market Market Market RNA NC€NG ADJUSTKAM AOJ1.1.41EDPR10E $184,000 $205,000 $225,000 S155,000 $153,000 $162.000 f,(}tDWN8OFSALEAD1i.6TIVENT Market Market Market Market Abrket Market Nlarket ADJUSTMENT ADJU57EDPWE $184,000 $205.000 $225,000 $155.000 $153,000 $162,00D DATEOFSALE 10128111 12130110 07105l05 09/18/06 ACTNE ACTVE MARKET CONDITIONS FACTOR 1.00 i xe 1.00 0.74� 1.C6 1.06 ADJUSTEDPRIOE $184,000 $205,000 $225,000 $114,275 $153,000 $162,000 ZONING 9-2 5-3:< P.-2 :;r:: B-2 B-2 S2 B-2 SITE SIZFJSRUAREFEEr. 78,190 44i170: 23,348 'r 37,479 17,424 20,038 17,860 AWL STHI SALF5 PRCE PERSF : $4.17 $6.78 $6.00 $6.56 S7.64 $9.07 ADQIUSTMENT FOR LOCATION 1.00 1.00 1.00 1.00 1.00 1.00 SHAPE 1.00 1.00 1.00 1.00 1.00 1.00 TOPOGRAPHY 1.00 1.00 1.00 1.00 1.00 1.00 FRONTAGE 1 A0 1.00 1.00 1.00 1.00 1,00 ZONNGfOOV ENA NTS 1.00 IX 1.00 1.00 1.00 1.00 ACCESS 1.00 t M 1.00 1.00 1.00 1.00 UPLITIES 1.00 1.00 1.00 1.00 1.00 1.00 SIZE 0.85 0.75 0.85 0.75 0.75 0.75 TOTAL ADJUSTMENT 0.85 0.75 0.85 0.75 0.75 0.75 ADJUSTED PRIDE PER SF $3,54 $6.59 $5.10 $4.92 $5.73 $6.80 Clark Real Estate Appraisal (I 1-128e) (1211 W2 011) 54 The unit of comparison selected is the price per square foot. The price per front foot was considered but not utilized. Based upon my analysis of the actions of area market participants relative to vacant commercial sites, frontage is an important feature but the price per square foot is the most widely recognized unit of comparison for properties such as the subject. Discussion of Adjustments Adjustment for List Price: Active Listings 1 and 2 are not closed sales. Similar properties typically sell for prices lower than list prices. Please refer to the Subject Market Analysis portion of this report for support for this conclusion. Downward adjustments of 10% for Active Listings 1 and 2 in this category are considered reasonable and appropriate. Buyer Expenditures: There were no buyer expenditures noted for any of the comparable sales so no adjustment was necessary in this category. Property Rights: The ownership interest in this report for the subject property and for all of the land comparables is the fee simple interest consequently no adjustments were necessary in this category. Financing: All sales were cash or cash equivalent; therefore, no adjustments were necessary in this category. Conditions of Sale: All sales were arms length (or at market) and no adjustments were necessary. Market Conditions: Land Sales 1 and 2 closed in 2011 and 2010 respectively. Land Sale 3 closed in 2005 prior to the onset of the real estate bubble for such properties in the subject market area. The market conditions when these sales closed were similar enough to current market conditions that no adjustment was necessary. A downward adjustment of 5% per year was made in this category to Land Sale 4. This downward adjustment percentage was discussed in the Subject Market Analysis portion of this report. Location: The locations of the comparables are similar enough that no adjustment is necessary in this category. Shape: The subject and comparables all have shapes that are suitable for commercial development. No adjustments were considered necessary for shape. Topography: The buildable area of the subject site and the comparables are similar enough in topography that no adjustment was necessary in this category. Frontage: The subject property does not have frontage along a major thoroughfare and some of the comparable sales have highway frontage. There is little current market evidence available on which to base a credible adjustment for lack of highway frontage. For this reason, no adjustment was made. Clark Real estate Appraisal( I 1-128a) (12119,-201 1) 55 Zoning/Covenants: The subject and all of the comparables are in business zoning districts for Flathead County. No adjustment was necessary for zoning. The subject property is governed by Declarations of Restrictions and Establishment of Easements Affecting Land. Owners of the subject property are required to pay a pro-rata share of CAM expenses for the neighboring shopping mall property. I was not provided with the details of this expense and assume that it is reasonable. No adjustment was made for this expense; however, this expense could negatively impact the value of the subject property if it is excessive or unreasonable. Access: Access to and from the subject and the comparable sales are similar enough that no adjustment was considered necessary. Utilities: The subject property and comparables all have similar access to all necessary utilities. No adjustment is necessary in this category. Size: All of the comparables are smaller than the subject property. Based upon my analysis size adjustments were necessary for all of the comparables As noted in the Subject Market Analysis portion of this report there are currently 20 active listings of vacant commercial sites in business zoning districts in the Kalispell area. The prices per square foot for these active listings were placed on a power curve type trend line. This trend line illustrates the general list price variance relative to size. This graph and trend line is below; LISTINGS ZONINGACTIVE BUSINESS DISTRICTS OF POWER CURVE - PRICE PER SF ' • 11 irr�x�wwMw�wnw..w�aww.�aw�r��e�r � IM..11� $12.i 1•"""�""""iw�:w.ww ■M�M�..INNNMII/NNIIYy11MW� ww.:. Sedesi W wYw4'I�wW.w�wwW ww�M� w W NMk MF t w11111w1k �lwlwn� 1. W WWIYY fir`: rrr�rrr� $2.00�s�ww ��II�Af 111�lAlAl �w� ww� �w� rrrrrrW rrrrrrrr ��� wiww ww��Mw�.w�rrrrr�rrrrrr� /iiR i WOO i�iA�I1111111AA� IAAMAMMI:MwME� i 100000 200000 Square Feet "Two of the Active Listing were in Flood Plain Areas and were Adjusted Upward for this Characteristic By graphing the list prices it is clear that market participants who wish to sell properties similar to the subject have the perception that prices vary according to site size. The size adjustments made to the comparables sales were based upon this analysis of this trend line. Clark Real Estate Appraisal (I 1-128c) (12/19i201 t) 56 Reconciliation of Sales Comparison Approach for Subject Site as if Vacant The closed sales provide adjusted indications of $3.54, $6.59, $5.10, and $4.92 per square foot respectively. The lowest indication is from the most recently closed sale. The average of all of the indications from the closed sales is approximately $5.00 per square foot. A price at or near the average of all the indications is considered reasonable and appropriate based upon available market data. This adjusted indications for the two active listings at $5.73 and $6.80 per square foot provide good indications of what the subject property is likely not worth. These listings have been marketed at the indicated prices since early 2008. A market value of $5.00 per square foot for the subject site is reasonable and well supported by the comparable data. Consequently; 78,190 Square Feet X $5.00/Square Foot $390,950 Rounded To $390,000 This value opinion is based upon the Hypothetical Condition that there is no deed restriction stipulating that the subject property can only be utilized as a parking lot. Clark Real Estate Appraisal (I I-128e) (12/19i2011) S7 The value indications for the fee simple interest in the subject property based upon the Hypothetical Condition referenced are indicated below; Fee Simple Interest Cost A roach. Not Develo ed Saks Cb*pA*U64ApOranch $390,000 Incoirie Ca itlizatiQn A r®$ch Not Developed Cost Approach The subject property is improved with an asphalt paved parking lot. Although there was a cost involved in the construction of this parking lot it does not contribute value to the property. The value ofthe subject property as if vacant is greater than the value of the subject property with the parking lot. For this reason, the Cost Approach was not applicable for determination of value for the subject property based upon the Hypothetical Condition that the deed restriction regarding use does not exist. Sales Comparison Approach The Sales Comparison Approach was developed using the best and most recent coparables available. The sales and listings utilized provide insight into the actions of market participants relative to purchases of similar vacant commercial sites. Additionally this was only the approach developed in this section of this report. For this reason, this approach is accorded all weight. Income Approach The Income Approach not was developed in this section of this report. An Income Approach based upon the use of the subject property as a parking lot was developed in Section 2 of this report. The Income Approach is not considered applicable since the improvements contribute no value to the subject property - Conclusion The Sales Comparison Approach was the only approach developed in this section of this report. This approach is typically considered the most appropriate analysis for vacant land or land as if vacant. After carefully considering all the factors influencing the subject property, it is my conclusion that the value of the fee simple interest in the subject real property, based upon the Hypothetical Condition that there is no deed restriction stipulating that the subject property can only be used as a parking lot, as of December 19, 2011, is: $390,000 Clark Real Estate Appraisal (I 1-12'3e) (12,,19l201 I) 59 Section 2 (As Is — With Deed Restriction Regarding Property Use) Clark Real Estate Appraisal (11-128e) (12/ 191201 1) 59 The analysis and resulting opinion of value included in this section of this report is based upon the subject property in as is condition. The subject property is improved for use as a parking lot. The spaces are not currently available for lease due to a relationship with a tenant (Teletech) in a portion of the Gateway West Mall; however, if this relationship were not in place, the subject parking spaces could be leased. There are a number of parking lots in the city limits of Kalispell that include spaces that are available for lease on a monthly basis. The parking lots identified are included on the table below; Parking Lot Comparable Rental Rates Lot Name Location City Monthly Parking Rate Center Court NE Corner of 2nd Street & 2nd Avenue W Kalispell $20.00 Eagles 1 st Avenue W Kalispell $30.00 Central School 2nd Avenue E Kalispell $20.00 Keno SE Corner of 2nd Street & 2nd Avenue W Kalispell $20.00 Valley Bank SW Corner of Main Street & 3rd Street Kalispell $30.00 Methodist NE Corner of 3rd Street & 3rd Avenue E Kalispell $15.00 Skyline 2nd Avenue W Kalispell $13.00 O'Neil Lot Main Street Kalispell $20.00 Mountain Valley 1st Avenue E Kalispell $20.00 Northeast 1stSlreet Kalispell $15.00 County Lot J NE Corner of 10th Street W & Main Street Kalispell $20.00 These lots are all located on or within a few blocks of Main Street in the central business district of Kalispell. There is limited off street parking in and around the central business district of Kalispell. Additionally there is little vacant land in and around the central business district of Kalispell for development of new parking lots. There is vacant land near the subject property. There are 4 commercial sites totaling approximately 7.50 acres available for sale in the immediate subject area. Since there is abundant vacant commercial land available for sale in the immediate subject area that could be utilized for parking, it is my opinion that the subject parking spaces would command monthly rates at the low end of the comparable lots. A monthly per space rental rate of $13.00 is considered reasonable and appropriate for the subject parking spaces. VACANCY AND COLLECTION LOSS A vacancy and collection loss rate of S% is considered reasonable for the subject parking lot. EXPENSES The estimated market lease rates for the subject parking spaces are based upon the landlord paying expenses associated with property ownership. These expenses are detailed in the following paragraphs. MANAGEMENT Clark Real 1 state Appraisal (i 1-Mc) (12./ M2011) 60 REAL ESTATE TAXES Real estate taxes (as if the property were not tax exempt) were estimated to be $3,767,45 in the Assessment and Taxation portion of this report. A tax amount of $3,800 was utilized in this analysis. MAINTENANCEIREPAIRS An annual maintenance expense of approximately $5,500 was estimated based upon potential parking lot resurfacing every 12 years and other annual maintenance and repair costs. OVERALL CAPITALIZATION RATE Overall capitalization rates for various property categories derived from national investors' surveys prepared by RealtyRates.com for the second quarter of 2011 are included on the table below, I+M�h4�d VH�1eI'P4aP4�4! 4t4R4yp�a 114A14fC; ' ffa11M14Rars 4/ia�li4' 5+rtl4r MH S#If: 3t>e f� 41 e3riu ^ Jl�ks GO "0"1 0: AndulMhU. L.oduirHj R_ok 4flfC• RMii RAI10; 04101t 1olaldiars A916. op Ylit :Fait Clti : Rate. CI1y :- R1rt! . CAg Rat+..CM! Rat• 9 fix4t., Cly I`talc . C iy. llat# C&S Hatt. CAS Hate ;: Rit! C#y Rat g nIT 9.91 C4 2.97 Ur 1117 91.33 0.54 9.50 IN BS It n:32 IDA, 4t. QIf 331 W Q W 30 1. 7 12 =179 32 111, 0 3" 35 9.54 6 9.50 Q tl.il5 7& II.44 55 n.- 24 10.07 115 2010 o,r;3 4 1222 ; W 15 1E0 12 11.0r• 7 155 22 5 4 16 9.54 25 IIS4 t2 t072 21 1130 11 16.iti7 41 W361 tl.$4 5145 9a4 Ian 344 5.47 5_'.'S 7153 M53 1104 2009 S.a5 a 4217 15 9.47 1) 9.4E 10 tf U .7 921 1 9.4E 29 52± 21f 1172 !S 1a.;41 37 11- 0 t 9-a7 14 .]A9 11F7 -4 W)l 214 J.3i -15 3.1C M 1125 55 `!-YL 5 UA -1tr 91]? -11 101 �:3 VA14 .4 f1.22 - tWm -I 2047 8M -45 102 -21 MA 55 9.52 -26 IVM-J -26 3.37 .A 325 .47 9210 -U 11.8' 0 3113 ml4 9J, -25' 20US 34fi 12 qS1 4T 401$ IS 977 a 107'7 27 369 41 972 M 9?2 30 U.24 % 19N 27 11a3 _� '10.04 20 2u15 814 14 i146 0 WO, -16 14i .tea) 050 -N 5:2 41 7.46 6 9.0 t 11.6E 5 1064 13 3144 .3 1 i 577 W64 9.00 t9 h0t6 I.t zj, j7 7? 9 IJ71 .3 S0 .0 940 .4 B.S6 -Ti 1101 S :e51 -0 1174 41 9.75 F OZ 3t9 1k).;t -at K166 64 4KS la 159 55 $.71 .11 344 1 0C-s t8 11K 3 IkI04 �53 x:fi# k;F 9:$1 2(h2 921 i0 yI_TO P 592 ,g 92v 61 1117 :8 3tiz 4? 4�'. 3^ 9.33 ilOA 3 W57 12 1+v3 •47;' 2001 S-s1 61 4.52 sT2 .31 30 904 A 10.07 Ja Wx2 -14 9l0 4$ �,� 5a 11t1 47 t9L9 a V76 W 10 2000 e.97 9113 3.41 1U 963 k13Q p13 t6.8 1054 tf15S 1244 Wii MJ4Fji,c«f by ml+bodolopf" 8r4r1d'ot:4�e+rhrtilM:131:H i4[k;aQ1;4, S.Ms S�irr� ruf*o cx 1AQ-t.2oae4h The weighted composite overall capitalization rate for the period is indicated to be 10.07%. An overall capitalization rate of 10.00% is considered to be a reasonable return expectation for an investor interested in purchasing the subject parking lot. A reconstructed operating statement for the subject parking lot is included on the following page. Clark Real Estate Appraisal (I I-129e) (12! t90-01 1) 61 RECONSTRUCTED OPERATING STATEM ENT FOR 191 SPACE PARKIN LOT ON A 1.795 ACRE SITE AT TIME CORNER OF GLeAAJOOD DRIVE & TWO MILE LAVE KALISPELL, MONTANA Monthly Rental # Months 191 Parking Spaces @ $131Month Each $2,483 12 $29,796 POTENTIAL GROSS INCOME $29,796 NODME AS A % OF POTENTIAL GROSS INCOME 100.00% $29,796 Less Vacancy & Collection Loss 5.00% $1,490 TOTAL EFFECTIVE GROSS INCOME 95.00% $28,306 LESS EXPENSES EXPENSES ASA%OFEFF CROSS INCOME ESTIMATED EXPENSES Management 5.0% p $1,415 Real Estate Taxes 13.4% $3,800 Maintenance/Repairs 19.4% $5,500 TOTAL ESTIM ATED EXPENSES 37.9% $10,715 NET OPERATING INCOME 62.1 % $17,591 $17,591 CAP@10.00% ' $175,910 INCOME APPROACH INDICATION ROULADE D TO ...................... $175,000 INCOME APPROACH CONCLUSION The value indicated by the Income Approach in this section of this report is considered to represent the market value of for the subject property in As Is condition with the deed restriction stipulating use in place, as of December 19, 2011, is; Value Indicated Income Approach $175,909 Rounded To $175,000 Note: This analysis and resulting value conclusion is based upon a relatively rapid "lease -up" period for the subject parking lot The value for the subject property in as is condition would be severely impacted if there is little or no demand for the subject parking spaces. Clark Real Btale Appraisal (11-128e) (121191201 1) 62 RECONCILIATION OF VALUE INDICATIONS The value indications for the fee simple interest in the subject property in as is condition are indicated below; Leased Fee Interest Cost A prow- h Not Developed Sales'Co arison A' roach Not Developed Income Ca italizativh roach ; $175,000 Cost Approach This approach was not developed for determination of the as is value for the subject property. Sales Comparison Approach This approach was not developed for the determination of the as is value for the subject property. Income Approach The Income Approach was developed using estimated monthly rental rates for the subject parking spaces and estimated expenses that the owner of the subject parking lot would likely incur. Conclusion The Income Approach was the only approach developed for the analysis of value of the subject in as is condition. After carefully considering all the factors influencing the subject property, it is my conclusion that the value of the subject real property in as is condition, as of December 19, 2011, is: $175,000 Clark Real Estate Appraisal (11-126e) (12/192011) 63 A detailed supply and demand analysis is presented in the Subject Market Analysis section of this report. Based upon careful analysis, it is my opinion that a marketing time of no greater than 12 months would be appropriate if the subject property was marketed at the prices indicated in this appraisal. Clark Real Estate Appraisal(] 1-128c) (12/ 19/2 011) 64 ■ PROFESSIONAL DESIGNATIONS MAI — Member Appraisal Institute (2004) FORMAL EDUCATION College of Charleston, Charleston, SC Bachelor of Science ---- Geology (1985) REAL ESTATE EDUCATION AppraisalInstitute 1990 - Basic Valuation Procedures 1990 - Real Estate Principles 1992 - Capitalization Theory and Technique 1994 - Advanced Income Capitalization 2001 - Highest and Best Use and Market Analysis 2001 - Advanced Sales Comparison and Cost Approaches 2002 - Standards of Professional Practice, Part A 2002 - Standards of Professional Practice, Part B 2002 - Report Writing and Valuation Analysis 2002 - Advanced Applications 2003 - Comprehensive Exam 2003 - Separating Real & Personal Property from Intangible Business Assets 2004 - Demonstration Appraisal 2006 - 7 Hour National USPAP Update Course 2006 - Business Practices and Ethics 2008 - 7 Hour National USPAP Update Course 2010 - 7 Hour National USPAP Update Course Institute of Financial Education 1985 - Real Estate Law I 1986 - Real Estate Law II IAAO 1991 - Standards of Practice and Professional Ethics Citadel Evening CoReVe 1993 - Residential Appraisal Reports Using URAR Form William H. Sharp & Associates 1995 - The Home Inspection Trident Technical College 1997 - Uniform Standards of Appraisal Clark Real Estate Appraisal (11-128e) (12119/201 1) 65 Historic Preservation Consulting 1998 - Appraising Historic Property The Beekman Company 2004 - The Technical Inspection of Real Estate WORK EXPERIENCE 2003 - Present Clark Real Estate Appraisal — Owner/Commercial Real Estate Appraiser 1995 - 2003 Sass, Herrin & Associates, Inc. — Commercial Real Estate Appraiser 1990 - 1995 Charleston County Assessor's Office --- Sr. Staff Real Estate Appraiser 1986 - 1989 First Sun Capital Corporation - Mortgage Loan Officer 1985 - 1986 First National Bank of Atlanta - Mortgage Loan Processor 1984 - 1985 South Carolina Federal Savings Bank - Mortgage Loan Processor STATE LICENSES/CERTIFICATIONS Montana State Certified General Real Estate Appraiser - 683 APPRAISAL SEMINARS ATTENDED 2000 -- JT&T Seminars: Financial Calculator HP-12C 2000 — Appraisal Institute: Highest and Best Use Applications 2004 — Appraisal Institute: Evaluating Commercial Construction 2005 — Appraisal Institute: Scope of Work: Expanding Your Range of Services 2006 — Appraisal Institute: Subdivision Valuation 2006 — Appraisal Institute: Appraising from Blueprints and Specifications 2006 — Appraisal Institute: Uniform Appraisal Standards for Federal Land Acquisitions 2007 — Appraisal Institute: Analyzing Commercial Lease Clauses 2007 — Appraisal Institute: Condominiums, Co-ops, and PUDs 2008 — Appraisal Institute: Spotlight on USPAP 2008 — Appraisal Institute: Quality Assurance in Residential Appraisals: Risky Appraisals = Risky Loans 2008 — Appraisal Institute: Office Building Valuation: A Contemporary Perspective 2009 — Appraisal Institute: Appraisal Curriculum Overview (2-Day General) 2010 — Appraisal Institute: Hotel Appraising — New Techniques for Today's Uncertain Times 2010 — Appraisal Institute: The Discounted Cash Flow Model: Concepts, Issues & Applications 2011 --- Appraisal Institute: Understanding & Using Investor Surveys Effectively 2011 — Appraisal Institute: Advanced Spreadsheet Modeling for Valuation Applications PARTIAL LIST OF CLIENTS Glacier Bank Rocky Mountain Bank First Interstate Bank Wells Fargo Bank State of Montana Department of Natural Resources Montana Department of Transportation Glacier Park International Airport United Stated Department of Interior Clark Real Estate Appraisal (I 1-I28e) (12/ M201 l) 66 1 .i ;D c 1' U' Clark Real Estate Appraisal (1 I-I28e) (12/19/201 I) 67 APPRAISER'S LICENSE STATE OF rAO,,"47ANA sveclalty: Di?partm.enzof Labar and IrWustry REAL APPPk_QER %! EWH,,��R Uv,.wd,of Real Edits Appraisem Ms .wow we nday, rummoss awry mensed z; a Qmfwd GemrM Apo a sc, Locoss 4: 683 Acbw� Expmv UUMM12 F, nummWK WARk REAL ESTATE APPRAaK U77 US HVV; 03 S STE W yUsTF&IN NF %R:1,7 Clark Red Estate Appraisal (L IA2&) (MMM 1) 58 ENGAGEMENT LETTER j 19 5 x A A E A A L� W-EF, K. KJOHAS-0 -001-ml-I I AL I 4j�j c— rnd dun W do? of Xnavim, 2514 11 sh hm"n an QTV OY,KA1JSTPFU- MONTANA-,,, k-ml" %!6 2"A a waQwAnow has Aga sma,..s ji hn',Nlnm�r�h '�A,�v-�Was AUTMW CLARK REALMAU APPRAISAL M40 A a. .4TF_. 40, W&M, WE M.k v" b si J--fA ,x=r lt4c "I'va juAl Wi4 Jk uacE s..a4-eg,a: C"-i"aLu w- —J ikie ;t�s-ipl Wcjy jZMmaQndhjd to dm: S"gm Moske" A A" am;d b,, 11w, qNs ;md W& *own Ow 1 fmzmj: Coy YeTs mpy fvm:'u�ft: "CROl. vP'T JIKUNDP"I"Jo Aav" "Jlw�!Ug.'o vi &- wAvA fwUl dw YvaiRm! Wyk Am Anown my c 00 %AV [ems at I jKNY=xvW Ink femp; j a U A 1 an dr [u 11 i 7.�7,7, t y : 1 002min Qmmn cmmmm YA YOM sm-, thaw aw AM vmw� wl)Z Q on Immen, compennum on Tok It Wmv A Nwk so do mXqU." W." AM WOW TOC "'4 7"', MCA- Wd" for own; 14S pvAlmy's on nos "Am& 0 U�� 'p..uWtvJ hy Us, G-O&W YA hg"Y cg� too be OnNA a oaqm,j JA-.'D'W'h C't .._.fincd by d-�' city �'A art 6 Clark Real Fstate Appraisal (I 1-128e) (12f19/201 1) 69 in Qwowmz WXT" r"yov wK ON ASK not *0 box WON '"lowac" ruko Z., Myumsynn M Szk 'A UA Xwe 040, A DIML.MMAMAn MMMI 10 AYMAM XWOkkOVA hYV W! &UPLM 0 in MAD v IMIWO! Yka, A: in =00000 AlDnwly On opt TAWny Inly any hong to :NnQvjn f. AlAr PUM on A w Arm -n7 Mums bvc;.��; '-�l �Quix'q ly 4 can Mcd in dal a men Age BUELL am, 's '601AC Md or sAMN! VXMP4 A, w1mvp gwemm lh C' ""'f MMV w dwo, ZnAng sam"k WWI Q po f MMQ OC& Apwuw"� p. 11; Ciq Ay 00 cv, W, a a no v an Aw a% a v' ptA 1, i Mr, Oak Red Estas Appraisal 0 1 A 2% (MM gnO H) 70 11 , � 1 4 nF" �,L � g� Mo � d — � 1, !IVR,3 � D !,,: 4 -, & 9 3 IR"I': Clark Real Estate Appraisal (I 1-128e) (12/19/2011) 71 Uif 3 -' `- Y ..1,-:a 1 a�lt" r r 3_'igngusukp. _l? ,. �'k. �... L th .. `o. .,..-? :P_ Yi i a-" $ F; 'x,,;'e`�x'. Clark steal Estate Appraisal (t I-128e) (12AT2011) 72 Wand n0awy a eF=3 ! . ."g Vann .i.� u�i€i.,t ,8 - .d ,. ��:; ._�z.:..,..r� -. -�� � .�-: .�.�'-,�✓^- FLATWAV COMMY cwpw A d.?(y:os;°-:i lu-n. N.'=-: INA Clark Real EmmeAppAsal0142&) (U/WQO11) 73 FLATHVAC� COONMY CIS G r-, T L VIA r'YY S P'a" T C,,,JN ,7 ""f5 KiSlp ,,A -5 �Z, X, 4 snz-pl ew ,W�,taT A SvMvp Clark Real Estate Appraisal (I 1-128e) (12/ 19/201 1) 74 V. OPIWO,F40 14, —4� ILI, 11-.m-";.."��, W. SUBJECT DEED (Page I of 2) h—rl Clark Real Estate Appraisal (I 1-129c) (12!19/2011) 75 (Page 1 of 2) �]r L'sx a +�a sws"a--sz iOi ;I40t.', LMwy--wpm swav"T AW IAw# _ W-, M Am am m... -,.r. f. no .max 0" �tg 5A. ,.�.r�,•nv. .., ,.rvaws�_-u z_n� Clark Item Estate Appraisal0102&)(F /MQ011) 76