CHIMNEY HILL APARTMENTS
LAND VALUE
2000-2855 WINDY HILL ROAD
MARIETTA, GEORGIA
MARKET VALUE -
FEE SIMPLE ESTATE
AS OF JUNE 23, 2003
PREPARED FOR:
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
(AIMCO)
C/O LINER YANKELEVITZ SUNSHINE & REGENSTREIF LLP
&
LIEFF CABRASER HEIMANN & BERNSTEIN
ON BEHALF OF NUANES, ET. AL.
[AMERICAN APPRAISAL ASSOCIATES(R) LOGO]
[AMERICAN APPRAISAL ASSOCIATES(R) LOGO]
[AMERICAN APPRAISAL ASSOCIATES(R) LETTERHEAD]
Apartment Investment and Management
Company ("AIMCO") c/o
Mr. Steven A. Velkei, Esq.
Liner Yankelevitz Sunshine & Regenstreif LLP
1100 Glendon Avenue, 14th Floor
Los Angeles, California 90024-3503
Nuanes, et al.( "Plaintiffs ") c/o
Ms. Joy Kruse
Lieff Cabraser Heimann & Bernstein
Embarcadero Center West
275 Battery Street, 30th Floor
San Francisco, California 94111
RE: CHIMNEY HILL APARTMENT LAND VALUE
2000-2855 WINDY HILL ROAD
MARIETTA, COBB COUNTY, GEORGIA
In accordance with your authorization, we have completed the appraisal of the
above-referenced property. This complete appraisal is intended to report our
analysis and conclusions in a summary format.
The subject property consists of 26.301 acres of land, currently improved with a
vacant apartment complex. It is our understanding that the property is
contaminated with mold and scheduled to be razed. This appraisal assumes the
land is vacant and available for development.
It is our understanding the appraisal will be used by the clients to assist the
San Mateo Superior Court in the settlement of litigation between the above
mentioned clients. The appraisal is intended to conform to the Uniform Standards
of Professional Appraisal Practice ("USPAP") as promulgated by the Appraisal
Standards Board of the Appraisal Foundation and the Code of Professional Ethics
and Standards of Professional Practice of the Appraisal Institute. The appraisal
is presented in a summary report, and the Departure Provision of USPAP has not
been invoked in this appraisal. It is entirely inappropriate to use this value
conclusion or the report for any purpose other than the one stated.
AMERICAN APPRAISAL ASSOCIATES, INC. LETTER OF TRANSMITTAL PAGE 2
CHIMNEY HILL APARTMENTS LAND VALUE, MARIETTA, GEORGIA
The opinions expressed in this appraisal cover letter can only be completely
understood by reading the narrative report, addenda, and other data, which is
attached. The appraisal is subject to the attached general assumptions and
limiting conditions and general service conditions.
As a result of our investigation, it is our opinion that the fee simple market
value of the subject, effective June 23, 2003 is:
($2,900,000 )
It is assumed the property's improvements have been razed and the land is vacant
and available.
Respectfully submitted,
AMERICAN APPRAISAL ASSOCIATES, INC.
/s/ Frank Fehribach
July 18, 2003 Frank Fehribach, MAI
#053272 Managing Principal, Real Estate Group
State of Georgia Certified General Real Property
Appraiser #218487
Investigation and Report By:
Phillip McGinnis
AMERICAN APPRAISAL ASSOCIATES, INC. TABLE OF CONTENTS PAGE 3
CHIMNEY HILL APARTMENTS LAND VALUE, MARIETTA, GEORGIA
TABLE OF CONTENTS
Cover
Letter of Transmittal
Table of Contents
APPRAISAL DATA
Executive Summary..................................................... 4
Introduction.......................................................... 8
Area Analysis......................................................... 10
Market Analysis....................................................... 13
Site Analysis......................................................... 14
Improvement Analysis.................................................. 14
Highest and Best Use.................................................. 14
VALUATION
Valuation Procedure................................................... 15
Sales Comparison Approach............................................. 17
Reconciliation and Conclusion......................................... 20
ADDENDA
Exhibit A - Photographs of Subject Property
Exhibit B - Summary of Rent Comparables and Photograph of Comparables
Exhibit C - Assumptions and Limiting Conditions
Exhibit D - Certificate of Appraiser
Exhibit E - Qualifications
General Service Conditions
AMERICAN APPRAISAL ASSOCIATES, INC. EXECUTIVE SUMMARY PAGE 4
CHIMNEY HILL APARTMENTS LAND VALUE, MARIETTA, GEORGIA
EXECUTIVE SUMMARY
PART ONE - PROPERTY DESCRIPTION
PROPERTY NAME: Chimney Hill Apartments - Land Only
LOCATION: 2000-2855 Windy Hill Road
Marietta, Georgia
PURPOSE OF ASSIGNMENT: Court Settlement
PREMISE OF VALUE: "As Is" Market Value of the Fee Simple Estate
INTEREST APPRAISED: Fee simple estate
DATE OF VALUE: June 23, 2003
DATE OF REPORT: July 18, 2003
PHYSICAL DESCRIPTION - SITE & IMPROVEMENTS:
SITE:
Size: 26.301 acres, or 1,145,672 square feet
Assessor Parcel No.: 17-0874-0-002-2
Floodplain: Community Panel No. 13005200075 F, (August 18,
1992)
Flood Zone X, an area outside the floodplain.
Zoning: RM-12 (Multi-family Residential District)
SUBJECT PHOTOGRAPHS AND LOCATION MAP:
SUBJECT PHOTOGRAPHS
[PICTURE] [PICTURE]
VIEW OF SUBJECT ACROSS WINDY HILL ROAD EXTERIOR LAND VIEW
AMERICAN APPRAISAL ASSOCIATES, INC. EXECUTIVE SUMMARY PAGE 5
CHIMNEY HILL APARTMENTS LAND VALUE, MARIETTA, GEORGIA
AREA MAP
[MAP]
NEIGHBORHOOD MAP
[MAP]
AMERICAN APPRAISAL ASSOCIATES, INC. EXECUTIVE SUMMARY PAGE 6
CHIMNEY HILL APARTMENTS LAND VALUE, MARIETTA, GEORGIA
HIGHEST AND BEST USE:
As Vacant: Multifamily development to the highest density
possible, subject to feasibility
As Improved: N/A
METHOD OF VALUATION: In this instance, the Sales Comparison Approach to
value was utilized.
AMERICAN APPRAISAL ASSOCIATES, INC. EXECUTIVE SUMMARY PAGE 7
CHIMNEY HILL APARTMENTS LAND VALUE, MARIETTA, GEORGIA
PART TWO - ECONOMIC INDICATORS
SALES COMPARISON APPROACH
PRICE PER ACRE:
Range of Sales $/Acre (Unadjusted) $98,560 to $140,271
Range of Sales $/Acre (Adjusted) $84,268 to $119,932
VALUE INDICATION - PRICE PER ACRE $2,900,000 $110,000 / ACRE
It is assumed the property's improvements have been razed and the land is vacant
and available.
AMERICAN APPRAISAL ASSOCIATES, INC. INTRODUCTION PAGE 8
CHIMNEY HILL APARTMENTS LAND VALUE, MARIETTA, GEORGIA
INTRODUCTION
IDENTIFICATION OF THE SUBJECT
The subject property is located at 2000-2855 Windy Hill Road, Marietta, Cobb
County, Georgia. Cobb County Tax Assessor identifies it as 17-0874-0-002-2.
SCOPE OF THE ASSIGNMENT
The property, neighborhood, and comparables were inspected by Phillip McGinnis
on June 23, 2003. Frank Fehribach, MAI has not made a personal inspection of the
subject property. Both, Frank Fehribach, MAI and Phillip McGinnis have extensive
experience in appraising similar properties and meet the USPAP competency
provision.
The scope of this investigation comprises the inspection of the property and the
collection, verification, and analysis of general and specific data pertinent to
the subject property. We have researched land sales of similar properties,
analyzing them as to their comparability, and adjusting them accordingly. We
completed the Sales Comparison Approach to value. From this approach to value, a
concluded overall value was made.
DATE OF VALUE AND REPORT
This appraisal was made to express the opinion of value as of June 23, 2003. The
date of the report is July 18, 2003.
PURPOSE AND USE OF APPRAISAL
The purpose of the appraisal is to estimate the market value of the fee simple
interest in the subject property. It is understood that the appraisal is
intended to assist the clients in litigation settlement proceedings. The
appraisal was not based on a request minimum valuation, a specific valuation, or
the approval of a loan.
PROPERTY RIGHTS APPRAISED
We have appraised the Fee Simple Estate in the subject property (as applied in
the Sales Comparison Approach). A Fee Simple Estate is defined in The Dictionary
of Real Estate Appraisal, 4th ed. (Chicago: Appraisal Institute, 2002), as:
"Absolute ownership unencumbered by any other interest or estate,
subject only
AMERICAN APPRAISAL ASSOCIATES, INC. INTRODUCTION PAGE 9
CHIMNEY HILL APARTMENTS LAND VALUE, MARIETTA, GEORGIA
to the limitations imposed by the governmental powers of taxation,
eminent domain, police power, and escheat."
MARKETING/EXPOSURE PERIOD
MARKETING PERIOD: 6 to 12 months
EXPOSURE PERIOD: 6 to 12 months
HISTORY OF THE PROPERTY
Ownership in the subject property is currently vested in Capital Properties IV
as indicated by Warranty Deed filed September 23, 1991 in Deed Book 6279 Page 8.
To the best of our knowledge, no transfers of ownership or offers to purchase
the subject are known to have occurred during the past three years.
AMERICAN APPRAISAL ASSOCIATES, INC. AREA ANALYSIS PAGE 10
CHIMNEY HILL APARTMENTS LAND VALUE, MARIETTA, GEORGIA
AREA / NEIGHBORHOOD ANALYSIS
NEIGHBORHOOD ANALYSIS
A neighborhood is a group of complementary land uses. The function of the
neighborhood analysis is to describe the immediate surrounding environs. The
subject is located in unincorporated Marietta, Cobb County, Georgia. Overall,
the neighborhood is characterized as a suburban setting with the predominant
land use being commercial in nature. The subject's neighborhood is generally
defined by the following boundaries.
NEIGHBORHOOD BOUNDARIES
East - Powers Ferry Road
West - Atlanta Road
South - I-285
North - Delk Road
MAJOR EMPLOYERS
Major employers in the subject's area include Lockheed-Martin, Dobbins Air
Reserve Base, IBM, Cobb County Government and the City of Marietta. The overall
economic outlook for the area is considered favorable.
AMERICAN APPRAISAL ASSOCIATES, INC. AREA ANALYSIS PAGE 11
CHIMNEY HILL APARTMENTS LAND VALUE, MARIETTA, GEORGIA
DEMOGRAPHICS
We have reviewed demographic data within the neighborhood. The following table
summarizes the key data points.
NEIGHBORHOOD DEMOGRAPHICS
AREA
----------------------------------------------------
CATEGORY 1-MILE RADIUS 3-MILE RADIUS 5-MILE RADIUS
-------- ------------- ------------- -------------
POPULATION TRENDS
1990 Census 12,725 66,251 165,066
2000 Census 16,751 77,249 194,896
2003 Estimate 17,978 81,435 205,144
2008 Projection 19,977 88,246 222,013
Growth 1990 - 2000 31.64% 16.60% 18.07%
Growth 2000 - 2008 19.26% 14.24% 13.91%
HOUSEHOLDS
1990 Census 6,373 31,475 72,321
2000 Census 7,653 34,507 82,432
2003 Estimate 8,147 36,132 86,459
2008 Projection 8,957 38,778 93,133
Growth 1990 - 2000 20.08% 9.63% 13.98%
Growth 2000 - 2008 17.04% 12.38% 12.98%
INCOME TRENDS
2000 Median Household Income $46,163 $47,419 $50,621
Per Capita Income $24,323 $28,117 $32,060
Average Household Income $52,669 $62,306 $74,888
Source: Claritas
The subject neighborhood's population is expected to show an approximate 15%
increase in the next five years. The immediate market offers inferior income
levels as compared to the broader market.
AMERICAN APPRAISAL ASSOCIATES, INC. AREA ANALYSIS PAGE 12
CHIMNEY HILL APARTMENTS LAND VALUE, MARIETTA, GEORGIA
The following table illustrates the housing statistics in the subject's
immediate area, as well as the MSA region.
HOUSING TRENDS
AREA
--------------------------------------------------------
CATEGORY 1-MILE RADIUS 3-MILE RADIUS 5-MILE RADIUS
-------- ------------- ------------- -------------
HOUSING TRENDS
Owner Occupied 2,102(27.47%) 11,861 (34.37%) 28,770 (47.03%)
Renter Occupied 5,551(72.53%) 22,646 (65.63%) 43,662 (52.97%)
Source: Claritas
SURROUNDING IMPROVEMENTS
The following uses surround the subject property:
North - Commercial/Industrial
South - Commercial (Restaurant)
East - Commercial (Hotel/Office)
West - Commercial (Hotel/Gas Station)
CONCLUSIONS
The subject is well located just southeast of the city of Marietta, and north of
the city of Atlanta. The neighborhood is characterized as being mostly suburban
in nature and is currently in the stable stage of development. The economic
outlook for the neighborhood is judged to be favorable with a good economic
base.
AMERICAN APPRAISAL ASSOCIATES, INC. MARKET ANALYSIS PAGE 13
CHIMNEY HILL APARTMENTS LAND VALUE, MARIETTA, GEORGIA
MARKET ANALYSIS
The subject property is located in an unincorporated area near Marietta in Cobb
County. The overall pace of development in the subject's market is more or less
stable. New construction in the immediate area is limited. Development is
categorized as highway commercial due to the close proximity of the interchange
with Windy Hill Road and Interstate 75. None of the apartment complexes in the
area appear to be newer than 15 years old. There appears to have been no recent
multiple-family residential construction in the subject neighborhood.
There is little vacant land available for development in the immediate area. The
surrounding neighborhood is primarily commercial in nature with adjoining land
uses being a convenience/gas station and hotel to the west, industrial to the
north, office and hotel to the east and restaurants located across Windy Hill
Road to the south. Developments range in age from 5 to 30 years old, with most
being in fair to good condition. The primary east/west corridor is Windy Hill
Road with four westbound lanes, three eastbound lanes and a center turn lane in
front of the subject's entrance. On the west side of I-75, the road narrows to a
four lane road with a center turn lane. Leland Drive is a two lane dead-end road
on the north side of Windy Hill Road. The intersection of Windy Hill Road and
Leland Drive is controlled by a traffic light. Dense development along Windy
Hill Road and close proximity to the I-75 interchange combine to form heavy
traffic volumes during rush hour.
AMERICAN APPRAISAL ASSOCIATES, INC. PROPERTY DESCRIPTION PAGE 14
CHIMNEY HILL APARTMENTS LAND VALUE, MARIETTA, GEORGIA
PROPERTY DESCRIPTION
SITE ANALYSIS
Site Area 26.301 acres, or 1,145,672 square feet
Shape Irregular
Topography Rolling
Utilities All necessary utilities are available to the site
Soil Conditions Stable
Easements Affecting Site None other than typical utility easements
Overall Site Appeal Fair
Flood Zone:
Community Panel 1300520075 F, dated August 18, 1992
Flood Zone Zone X
Zoning RM-12, multi-family residential district
REAL ESTATE TAXES
ASSESSED VALUE - 2003
-------------------------------------------- TAX RATE / PROPERTY
PARCEL NUMBER LAND BUILDING TOTAL MILL RATE TAXES
------------- ---- -------- ----- --------- -----
17-0874-0-002-2 $4,529,720 $13,993,150 $18,522,870 0.02987 $221,311
IMPROVEMENT ANALYSIS
For the purposes of this valuation the site is assumed to be vacant and
available for development. Therefore, the improvements have not been considered.
HIGHEST AND BEST USE ANALYSIS
In accordance with the definition of highest and best use, an analysis of the
site relating to its legal uses, physical possibilities, and financial
feasibility is appropriate. The highest and best use as vacant is for
multifamily development to the highest density possible. The highest and best
use as improved is for an apartment complex, subject to a feasibility analysis.
AMERICAN APPRAISAL ASSOCIATES, INC. VALUATION PROCEDURE PAGE 15
CHIMNEY HILL APARTMENTS LAND VALUE, MARIETTA, GEORGIA
THE VALUATION PROCEDURE
There are three traditional approaches, which can be employed in establishing
the market value of the subject property. These approaches and their
applicability to the valuation of the subject are summarized as follows:
THE COST APPROACH
The application of the Cost Approach is based on the principle of substitution.
This principle may be stated as follows: no one is justified in paying more for
a property than that amount by which he or she can obtain, by purchase of a site
and construction of a building, without undue delay, a property of equal
desirability and utility. In the case of a new building, no deficiencies in the
building should exist.
In the case of income-producing real estate, the cost of construction plays a
minor and relatively insignificant role in determining market value. The Cost
Approach is typically only a reliable indicator of value for: (a) new
properties; (b) special use properties; and (c) where the cost of reproducing
the improvements is easily and accurately quantified and there is no economic
obsolescence. In all instances, the issue of an appropriate entrepreneurial
profit - the reward for undertaking the risk of construction, remains a highly
subjective factor especially in a market lacking significant speculative
development.
THE SALES COMPARISON APPROACH
The Sales Comparison Approach is an estimate of value based upon a process of
comparing recent sales of similar properties in the surrounding or competing
areas to the subject property. Inherent in this approach is the principle of
substitution.
The application of this approach consists of comparing the subject property with
similar properties of the same general type which have been sold recently or
currently are available for sale in competing areas. This comparative process
involves judgment as to the similarity of the subject property and the
comparable sale with respect to many value factors such as location, contract
rent levels, quality of construction, reputation and prestige, age and
condition, among others. The estimated value through this approach represents
the probable price at which a willing seller would sell the subject property to
a willing and knowledgeable buyer as of the date of value.
AMERICAN APPRAISAL ASSOCIATES, INC. VALUATION PROCEDURE PAGE 16
CHIMNEY HILL APARTMENTS LAND VALUE, MARIETTA, GEORGIA
THE INCOME CAPITALIZATION APPROACH
The theory of the Income Capitalization Approach is based on the premise that
present value is the value of the cash flow and reversionary value the property
will produce over a reasonable holding (ownership) period.
The Discounted Cash Flow Analysis will convert equity cash flows (including cash
flows and equity reversion) into a present value utilizing an internal rate of
return (or discount rate). The Internal Rate of Return (IRR) will be derived
from a comparison of alternate investments, a comparative analysis of IRR's used
by recent buyers of similar properties, and a review of published industry
surveys.
The Direct Capitalization Analysis converts one year of income into an overall
value using overall capitalization rates from similar sales. The overall rates
take into consideration buyers assumptions of the market over the long-term.
The results of the Income Capitalization Analysis are usually the primary value
indicator for income producing properties. Investors expect a reasonable rate of
return on their equity investment based on the ownership risks involved; this
approach closely parallels the investment decision process.
RECONCILIATION
In this instance, we have completed only the Sales Comparison Approach to value.
As a vacant parcel of land, the Cost Approach is not applicable and with no
income producing property, the income approach is not applicable. Therefore, the
Sales Comparison Approach is considered the only reliable approach as investors
are buying similar vacant land parcels in the market.
AMERICAN APPRAISAL ASSOCIATES, INC. SALES COMPARISON APPROACH PAGE 17
CHIMNEY HILL APARTMENTS LAND VALUE, MARIETTA, GEORGIA
SALES COMPARISON APPROACH
Use of market or comparable sales requires the collection and analysis of
comparable sales data. Similar properties recently sold are compared to the
subject and adjusted based on any perceived differences. This method is based on
the premise that the costs of acquiring a substitute property would tend to
establish a value for the subject property. The premise suggests that if a
substitute is unavailable in the market, the reliability of the approach may be
subordinate to the other approaches.
The standard unit of comparison for vacant land is the sales price per acre or
price per square foot for smaller parcels. In examining the comparable sales, we
have applied a subjective adjustment analysis, which includes specific
adjustments derived from our experience and consulting with the market
participants.
SALES COMPARISON ANALYSIS
Detailed on the following pages are sales transactions involving properties
located in the subject's competitive investment market. Following the summary of
sales is an adjustment grid that is used to arrive at a value.
LAND SALES SUMMARY
SALE NUMBER SALE
AAA ID LOCATION DATE PRICE LAND AREA UNIT PRICE
------ -------- ---- ----- --------- ----------
L-1 N. COBB PKWY. 01-NOV-00 $2,600,000 26.38 ACRES $ 98,560 /ACRE
COBB COUNTY 1,149,113 SQ.FT. $ 2.26 /SQ.FT.
KENNESAW GA
L-2 1599 N. COBB PKWY. 01-FEB-01 $2,381,472 19.85 ACRES $119,973 /ACRE
COBB COUNTY 864,666 SQ.FT. $ 2.75 /SQ.FT.
KENNESAW GA
L-3 7671 COVINGTON HWY. 01-JUN-01 $2,170,000 15.47 ACRES $140,271 /ACRE
DEKALB COUNTY 673,873 SQ.FT. $ 3.22 /SQ.FT.
LITHONIA GA
SUBJECT 2855 WINDY HILL ROAD 26.30 ACRES
COBB COUNTY 1,145,672 SQ.FT.
MARIETTA GA
AMERICAN APPRAISAL ASSOCIATES, INC. SALES COMPARISON APPROACH PAGE 18
CHIMNEY HILL APARTMENTS LAND VALUE, MARIETTA, GEORGIA
VACANT LAND SALES MAP
[MAP]
LAND SALES ANALYSIS
The land sales indicate a sales price range from $98,560 to $140,271 per acre.
Adjustments have been made to the sales to reflect differences in overall
location, access, visibility, topography, shape, size, zoning and availability
of utilities. Generally speaking, larger properties typically have a lower price
per acre when compared to smaller properties, all else being equal. After
appropriate adjustments are made, the land sales demonstrate an adjusted range
from for the subject between $84,268 to $119,932 per acre with a mean or average
adjusted price of $102,259 per acre. Based on the preceding analysis, we have
concluded to a value of $110,000 per acre, which results in an "as is" value of
$2,900,000 (rounded).
Sales Comparison Conclusion $2,900,000
It is assumed the property's improvements have been razed and the land is vacant
and available.
AMERICAN APPRAISAL ASSOCIATES, INC. SALES COMPARISON APPROACH PAGE 19
CHIMNEY HILL APARTMENTS LAND VALUE, MARIETTA, GEORGIA
LAND SALES ADJUSTMENT GRID
CLIENT: AIMCO CONTRACT #: 053272
PROPERTY: CHIMNEY HILLS APARTMENTS (CLOSED) APP. DATE: 23-JUN-03
COMPARABLE SALES
- --------------------------------------------------------------------------------------------------------------------------------
COMPARABLE NUMBER SUBJECT L-1 L-2 L-3
LOCATION 2855 Windy Hill Road N. Cobb Pkwy. 1599 N. Cobb Pkwy. 7671 Covington Hwy.
Cobb County Cobb County Cobb County DeKalb County
Marietta Kennesaw Kennesaw Lithonia
GA GA GA GA
SALE PRICE - $2,600,000 $2,381,472 $ 2,170,000
LAND AREA IN ACRES 26.30 26.38 19.85 15.47
SALE PRICE/ACRE - $ 98,560 $ 119,973 $ 140,271
PROPERTY RIGHTS CONVEYED $ 98,560 N/A $ 119,973 N/A $ 140,271 N/A
Adjusted Price per Acre/Adjustment
FINANCING TERMS
Adjusted Price per Acre/Adjustment $ 98,560 N/A $ 119,973 N/A $ 140,271 N/A
CONDITIONS OF SALE
Adjusted Price per Acre/Adjustment $ 98,560 N/A $ 119,973 N/A $ 140,271 N/A
MARKET CONDITIONS Nov-00 Feb-01 Jun-01
Adjustment -10.0% -10.0% -10.0%
--------- -------- ----------
Adjusted Price per Acre $ 88,704 $ 107,976 $ 126,244
LOCATIONAL & PHYSICAL CHARACTERISTICS
OVERALL LOCATION Good Comparable 0% Comparable 0% Inferior 5%
ACCESS Good Superior -5% Superior -5% Superior -5%
TOPOGRAPHY Rolling Comparable 0% Comparable 0% Comparable 0%
SHAPE Irregular Comparable 0% Comparable 0% Comparable 0%
SIZE (ACRES) 26.30 Comparable 0% Comparable 0% Superior -5%
ZONING RM-12 Comparable 0% Comparable 0% Comparable 0%
UTILITIES All Comparable 0% Comparable 0% Comparable 0%
ADJ. SALES PRICE PER ACRE $ 84,268 $ 102,577 $ 119,932
Range of Adjusted Sale Price $ 84,268 to $ 119,932
CONCLUDED VALUE PER ACRE $ 110,000
CONCLUDED VALUE Rounded $ 2,900,000
AMERICAN APPRAISAL ASSOCIATES, INC. RECONCILIATION AND CONCLUSION PAGE 20
CHIMNEY HILL APARTMENTS LAND VALUE, MARIETTA, GEORGIA
RECONCILIATION AND CONCLUSION
This appraisal was made to express an opinion as of the Market Value of the fee
simple estate in the 26.301 acres of land, located at 2000-2855 Windy Hill,
Marietta, Cobb County, Georgia.
AS IS MARKET VALUE OF THE FEE SIMPLE ESTATE
Cost Approach Not Utilized
Sales Comparison Approach $2,900,000
Income Approach Not Utilized
Reconciled Value $2,900,000
FINAL VALUE - FEE SIMPLE ESTATE
Based on the investigation and premise outlined, it is our opinion that as of
June 23, 2003 the market value of the fee simple estate in the property is:
$2,900,000
It is assumed the property's improvements have been razed and the land is vacant
and available.
AMERICAN APPRAISAL ASSOCIATES, INC. ADDENDA
CHIMNEY HILL APARTMENTS LAND VALUE, MARIETTA, GEORGIA
ADDENDA
AMERICAN APPRAISAL ASSOCIATES, INC. EXHIBIT A
CHIMNEY HILL APARTMENTS LAND VALUE, MARIETTA, GEORGIA
EXHIBIT A
SUBJECT PHOTOGRAPHS
AMERICAN APPRAISAL ASSOCIATES, INC. EXHIBIT A
CHIMNEY HILL APARTMENTS LAND VALUE, MARIETTA, GEORGIA
SUBJECT PHOTOGRAPHS
[PICTURE] [PICTURE]
VIEW OF SUBJECT ACROSS WINDY HILL ROAD EXTERIOR LAND VIEW
[PICTURE] [PICTURE]
EXTERIOR VIEW OF REAR ENTRANCE EXTERIOR VIEW OF CONDEMNED BUILDING
AMERICAN APPRAISAL ASSOCIATES, INC. EXHIBIT B
CHIMNEY HILL APARTMENTS LAND VALUE, MARIETTA, GEORGIA
EXHIBIT B
ASSUMPTIONS AND LIMITING CONDITIONS
(3 PAGES)
AMERICAN APPRAISAL ASSOCIATES, INC. EXHIBIT B
CHIMNEY HILL APARTMENTS LAND VALUE, MARIETTA, GEORGIA
No responsibility is assumed for matters legal in nature. No investigation has
been made of the title to or any liabilities against the property appraised. In
this appraisal, it is presumed that, unless otherwise noted, the owner's claim
is valid, the property rights are good and marketable, and there are no
encumbrances which cannot be cleared through normal processes.
To the best of our knowledge, all data set forth in this report are true and
accurate. Although gathered from reliable sources, no guarantee is made nor
liability assumed for the accuracy of any data, opinions, or estimates
identified as being furnished by others which have been used in formulating this
analysis.
Land areas and descriptions used in this appraisal were obtained from public
records and have not been verified by legal counsel or a licensed surveyor.
No soil analysis or geological studies were ordered or made in conjunction with
this report, nor were any water, oil, gas, or other subsurface mineral and use
rights or conditions investigated.
Substances such as asbestos, urea-formaldehyde foam insulation, other chemicals,
toxic wastes, or other potentially hazardous materials could, if present,
adversely affect the value of the property. Unless otherwise stated in this
report, the existence of hazardous substance, which may or may not be present on
or in the property, was not considered by the appraiser in the development of
the conclusion of value. The stated value estimate is predicated on the
assumption that there is no material on or in the property that would cause such
a loss in value. No responsibility is assumed for any such conditions, and the
client has been advised that the appraiser is not qualified to detect such
substances, quantify the impact on values, or develop the remedial cost.
No environmental impact study has been ordered or made. Full compliance with
applicable federal, state, and local environmental regulations and laws is
assumed unless otherwise stated, defined, and considered in the report. It is
also assumed that all required licenses, consents, or other legislative or
administrative authority from any local, state, or national government or
private entity organization either have been or can be obtained or renewed for
any use which the report covers.
AMERICAN APPRAISAL ASSOCIATES, INC. EXHIBIT B
CHIMNEY HILL APARTMENTS LAND VALUE, MARIETTA, GEORGIA
It is assumed that all applicable zoning and use regulations and restrictions
have been complied with unless a nonconformity has been stated, defined, and
considered in the appraisal report. Further, it is assumed that the utilization
of the land and improvements is within the boundaries of the property described
and that no encroachment or trespass exists unless noted in the report.
The Americans with Disabilities Act ("ADA") became effective January 26, 1992.
We have not made a specific compliance survey and analysis of this property to
determine whether or not it is in conformity with the various detailed
requirements of the ADA. It is possible that a compliance survey of the property
together with a detailed analysis of the requirements of the ADA could reveal
that the property is not in compliance with one or more of the requirements of
the act. If so, this fact could have a negative effect on the value of the
property. Since we have no direct evidence relating to this issue, we did not
consider the possible noncompliance with the requirements of ADA in estimating
the value of the property.
We have made a physical inspection of the property and noted visible physical
defects, if any, in our report. This inspection was made by individuals
generally familiar with real estate and building construction. However, these
individuals are not architectural or structural engineers who would have
detailed knowledge of building design and structural integrity. Accordingly, we
do not opine on, nor are we responsible for, the structural integrity of the
property including its conformity to specific governmental code requirements,
such as fire, building and safety, earthquake, and occupancy, or any physical
defects which were not readily apparent to the appraiser during the inspection.
The value or values presented in this report are based upon the premises
outlined herein and are valid only for the purpose or purposes stated.
The date of value to which the conclusions and opinions expressed apply is set
forth in this report. The value opinion herein rendered is based on the status
of the national business economy and the purchasing power of the U.S. dollar as
of that date.
Testimony or attendance in court or at any other hearing is not required by
reason of this appraisal unless arrangements are previously made within a
reasonable time in advance for
AMERICAN APPRAISAL ASSOCIATES, INC. EXHIBIT B
CHIMNEY HILL APARTMENTS LAND VALUE, MARIETTA, GEORGIA
such testimony, and then such testimony shall be at American Appraisal
Associates, Inc.'s, prevailing per diem for the individuals involved.
Possession of this report or any copy thereof does not carry with it the right
of publication. No portion of this report (especially any conclusion to use, the
identity of the appraiser or the firm with which the appraiser is connected, or
any reference to the Appraisal Institute or the designations awarded by this
organization) shall be disseminated to the public through prospectus,
advertising, public relations, news, or any other means of communication without
the written consent and approval of American Appraisal Associates, Inc.
AMERICAN APPRAISAL ASSOCIATES, INC. EXHIBIT D
CHIMNEY HILL APARTMENTS LAND VALUE, MARIETTA, GEORGIA
EXHIBIT D
CERTIFICATE OF APPRAISER
(1 PAGE)
AMERICAN APPRAISAL ASSOCIATES, INC. EXHIBIT D
CHIMNEY HILL APARTMENTS LAND VALUE, MARIETTA, GEORGIA
CERTIFICATE OF APPRAISER
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 represent the
unbiased professional analyses, opinions, and conclusions of American
Appraisal Associates, Inc.
American Appraisal Associates, Inc. and I personally, have no present
or prospective interest in the property that is the subject of this
report and have no personal interest or bias with respect to the
parties involved.
Compensation for American Appraisal Associates, Inc. is not contingent
on an action or event resulting from the analyses, opinions, or
conclusions in, or the use of, this report.
The analyses, opinions, and conclusions were developed, and this report
has been prepared, in conformity with the requirements of the Uniform
Standards of Professional Appraisal Practice and the Code of
Professional Ethics and the Standards of Professional 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.
I personally did not inspect the subject property. Phillip McGinnis
provided significant real property assistance in the preparation of
this report.
I am currently in compliance with the Appraisal Institute's continuing
education requirements.
-s- FRANK FEHRIBACH
----------------------------
FRANK FEHRIBACH, MAI
MANAGING PRINCIPAL
STATE OF GEORGIA CERTIFIED GENERAL
REAL PROPERTY APPRAISER #218487
AMERICAN APPRAISAL ASSOCIATES, INC. EXHIBIT E
CHIMNEY HILL APARTMENTS LAND VALUE, MARIETTA, GEORGIA
EXHIBIT E
QUALIFICATIONS OF APPRAISER
(2 PAGES)
AMERICAN APPRAISAL ASSOCIATES, INC. EXHIBIT E
CHIMNEY HILL APARTMENTS LAND VALUE, MARIETTA, GEORGIA
FRANK A. FEHRIBACH, MAI
MANAGING PRINCIPAL, REAL ESTATE GROUP
POSITION Frank A. Fehribach is a Managing Principal for the Dallas
Real Estate Group of American Appraisal Associates, Inc.
("AAA").
EXPERIENCE
Valuation Mr. Fehribach has experience in valuations for resort
hotels; Class A office buildings; Class A multifamily
complexes; industrial buildings and distribution
warehousing; multitract mixed-use vacant land; regional
malls; residential subdivision development; and
special-purpose properties such as athletic clubs, golf
courses, manufacturing facilities, nursing homes, and
medical buildings. Consulting assignments include
development and feasibility studies, economic model
creation and maintenance, and market studies.
Mr. Fehribach also has been involved in overseeing
appraisal and consulting assignments in Mexico and South
America.
Business Mr. Fehribach joined AAA as an engagement director in
1998. He was promoted to his current position in 1999.
Prior to that, he was a manager at Arthur Andersen LLP.
Mr. Fehribach has been in the business of real estate
appraisal for over ten years.
EDUCATION University of Texas - Arlington
Master of Science - Real Estate
University of Dallas
Master of Business Administration - Industrial Management
Bachelor of Arts - Economics
STATE State of Arizona
CERTIFICATIONS Certified General Real Estate Appraiser, #30828
State of Arkansas
State Certified General Appraiser, #CG1387N
State of Colorado
Certified General Appraiser, #CG40000445
State of Georgia
Certified General Real Property Appraiser, #218487
State of Michigan
Certified General Appraiser, #1201008081
State of Texas
Real Estate Salesman License, #407158 (Inactive)
State of Texas
State Certified General Real Estate Appraiser,
#TX-1323954-G
AMERICAN APPRAISAL ASSOCIATES, INC. EXHIBIT E
CHIMNEY HILL APARTMENTS LAND VALUE, MARIETTA, GEORGIA
PROFESSIONAL Appraisal Institute, MAI Designated Member
AFFILIATIONS Candidate Member of the CCIM Institute pursuing Certified
Commercial Investment Member (CCIM) designation
PUBLICATIONS "An Analysis of the Determinants of Industrial Property
-authored with Dr. Ronald C. Rutherford and Dr.
Mark Eakin, The Journal of Real Estate Research, Vol. 8,
No. 3, Summer 1993, p. 365.
AMERICAN APPRAISAL ASSOCIATES, INC.
CHIMNEY HILL APARTMENTS LAND VALUE, MARIETTA, GEORGIA
GENERAL SERVICE CONDITIONS
AMERICAN APPRAISAL ASSOCIATES, INC.
CHIMNEY HILL APARTMENTS LAND VALUE, MARIETTA, GEORGIA
GENERAL SERVICE CONDITIONS
The services(s) provided by AAA will be performed in accordance with
professional appraisal standards. Our compensation is not contingent in any way
upon our conclusions of value. We assume, without independent verification, the
accuracy of all data provided to us. We will act as an independent contractor
and reserve the right to use subcontractors. All files, workpapers or documents
developed by us during the course of the engagement will be our property. We
will retain this data for at least five years.
Our report is to be used only for the specific purpose stated herein; and any
other use is invalid. No reliance may be made by any third party without our
prior written consent. You may show our report in its entirety to those third
parties who need to review the information contained herein. No one should rely
on our report as a substitute for their own due diligence. We understand that
our reports will be described in public tender offer documents distributed to
limited partners. We reserve the right to review the public tender offer
documents prior to their issuance to confirm that disclosures of facts from the
current appraisals are accurate. No reference to our name or our report, in
whole or in part, in any other SEC filing or private placement memorandum you
prepare and/or distribute to third parties may be made without our prior written
consent.
The Tender Offer Partnerships, as that term is defined in the Settlement
Agreement, agree to indemnify and hold us harmless against and from any and all
losses, claims, actions, damages, expenses or liabilities, including reasonable
attorneys' fees, to which we may become subject in connection with this
engagement except where such losses, claims, actions, damages, expenses or
liabilities, including reasonable attorney's fees, arise or result from AAA's
misconduct, bad faith or negligence. Co-Clients will not be liable for any of
our acts or omissions.
AAA is an equal opportunity employer.