URS was asked to appraise the as-is market value of the fee simple and leased fee estates of a 66,000 square foot office building in central Pinellas County.
The subject neighborhood was a mix of predominantly office and industrial uses located near the primary traffic corridors of U.S. Highway 19, Ulmerton Road, Roosevelt Boulevard and Interstate 275. Most of the areas to the west and south had been incorporated by the city of Pinellas Park, while those areas to the east had been incorporated into the city of St. Petersburg. The subject site was heavily influenced by the St. Petersburg/ Clearwater International Airport on the north side of Ulmerton Road, Feather Sound and Carillon Developments to the east, and heavy traffic volume along Ulmerton Road.
The subject property contained a total of 220,924 square feet or approximately 5.119 gross acres. Approximately 4.47 acres of the site was considered useable upland areas. The northeast boundary of the site contained a small lake. The property’s primary frontage was along the south boundary. Overall, the parcel was in a highly visible location and convenient to traffic linkages. Some general commercial uses were located west of the subject near. In the immediate vicinity and south of the subject, commercial, retail and light industrial uses were more typical.
The subject site was improved with a three story professional office facility containing a total of 66,000 gross square feet. The interior had been built-out with good quality office areas throughout the glass and steel frame structure, originally built in 1987. Each floor was accessible via a central elevator and open lobby area and typical other common areas such as break room, rest rooms, mechanical and electrical rooms. The building had been well maintained in recent years, had an effective age of approximately 10 years and remaining economic life of 40 years.
The building, at the time of appraisal, was occupied by a variety of tenants. The primary tenant was a large mortgage funding corporation. This tenant had a contract to purchase the facility and, as existing tenant leases expired, they would expand their operations and expected to eventually occupy the facility as a 100 percent owner-occupied regional corporate office headquarters.
The highest and best use as if vacant was for development to a single or multi-tenant professional office. As improved, the existing office facility was representative of highest and best use.
As a good quality office facility in a popular east central Pinellas location, the property could have been utilized by a number of participants in the market and easily converted for their desired use
rental RV park and wet slips in as-is condition, as well as the prospective retail value and bulk sale value of the proposed (RV) lots and wet slips upon completion, expected to be approximately one year from date of appraisal. The subject land was permitted for 112 individual lots as an RV park, and the proposed configuration was for approximately 102 condominium RV lots, plus approximately 20 condominiumized wet slips, all with a membership requirement in the homeowner’s association. The gross deeded land was 8.81 acres and the net useable upland is approximately 7 acres. Typical riparian rights were assumed to be applicable to the subject submerged land as a navigable canal and also to the westerly adjoining submerged lands leading to open bay waters.
The subject property had been operated as the rental RV resort for many years, and was proposed for renovation to condominium RV lots and wet slips, with continued rental during renovation and marketing of lots and wet slips. The subject property consisted of 8.81 gross acres including approximately 1.66 acres submerged land as a navigable canal along the rear boundary. The subject property was, at the date of appraisal, permitted for 112 RV lots plus approximately 20 docks.
The existing lot design added two lots for a total of 114 lots per park rental map. Some lots may not have been available for rent, such as the laundry lot, and other lots may have been combined for accommodation of the largest Class A motor homes. For the purpose of the appraisal we estimated 112 rental lots for the as-is market value and 102 for-sale lots for the prospective bulk sale market value.
The subject site had adequate frontage along a major traffic artery servicing a bridge to a barrier island and gulf coast beaches. The onsite canal terminated at the northeast corner of the subject site, but continued westerly over other private submerged land and beneath a road bridge to the Intra Coastal Waterway. A deep water pass, just to the south, led to the open waters of the Gulf of Mexico. This present road bridge was to be redesigned to a higher elevation of approximately 11 feet passage from mean tide level to bridge height. To the north of the subject on the same peninsula were waterfront low rise condominium buildings and waterfront single family residences in excess of $600,000 values.
Although there had been a slowing in the traditional single-family and condominium residential markets, it was our opinion that the market pricing of the proposed subject RV lots and wet slips as condo ownership would be generally well accepted in the marketplace and be individually absorbed over approximately two years.
The Uniform Appraisal Standards for FederalLand Acquisitions (The Yellow Book). The uniform standards have guided the appraisal process in federal land acquisitions since they were first published by the Interagency Land Acquisition Conference in 1973. They have earned a prestigious position among legislators and valuers and are frequently cited by Congress. URS has work diligently to stay abreast of the vast changes that have recently characterized the real estate appraisal profession and up to date on case law and the expanded treatment of novel and difficult valuation questions.
We recently completed an island project for a federal government agency that had several underlying issues affecting the value. The appraisal problem was to determine the before value of the parent tract of approximately 204.903 acres, and the after valuation of the remainder 112.113 acres following sale of 92.79 acres to the federal government.
Before that, the property had been in an estate with eleven heirs. We provided appraisals of several parcels and undivided interests in the property and testified in federal court as to value. This helped result in a final agreement among the parties, and acquisition of majority of the property by the government and a conservation group.
About 2/3 of the island is occupied by a national park. The remainder was under private ownership and being developed, mostly with upscale single family housing, at a steady pace. The government had worked over the years to acquire parcels adjacent to or within the general boundaries of the park, the goal being to provide areas and vistas not encumbered by development.
The largest single parcel in the market area, identified by the government for acquisition, was the subject property. Going back a few years, the property had been under the ownership and control of eleven heirs for a number of years, a few who wanted to sell and a few who would never sell. The government and a private conservation group working in conjunction with the government had acquired partial interests from several heirs, but the remaining heirs would not sell, eventually resulting in a partitioning action with our testimony in federal courts in 2007. The private group helped facilitate the partitioning action by payment to the remaining heirs of cash and an approximate six acre portion of the land. The private group acquired title to the subject parent tract and other sites with the intent to convey the property to the government in two phases at its approximate cost.
The purpose of the most recent appraisal was to estimate value of the parcel government was acquiring, as well as a parcel which would be acquired at a latter date. The unique problem was that there had been no sales of parcels near the size of the subject in recent years, making the bracketing of the subject by comparable sales not possible, so the search was extended to other markets. A search of surrounding markets revealed several sales, but land values within the less populated and much larger surrounding markets were somewhat lower than the subject market.
We extended the search to other islands, including Puerto Rico and St. Croix. These sales were helpful but had a wide variety in pricing. We therefore prepared a brief developmental model, as utilized by most developers. Due to many factors, we knew a developmental model would not be allowed for direct valuation, so it was included under the highest and best use analysis to provide additional support for our value estimates. The appraisal was accepted by the government and became the basis for current and future funding.