HomeMy WebLinkAboutCost Analysis CAPE COD & ISLANDS APPRAISAL GROUP LLP
Heather I.Ross,SRA,RA 4a ud infoOcapecodrnx
aeisel corn Jacob C.Ross,SRA 4
MA Cert Gen RE Appr Lic#1434 www caoecodaooraisal cool MA Cert Rn RE Appr Lie#70585
001
P.O.Box 545,Barnstable,MA 02630 ->^
Barnstable 508-362-9050 — Orleans 508-255-9269 — Fax 508-375-0154
February 13,2018
Randal Henderson
Taylor Building&Remodeling
PO Box 87
Centerville, MA 02632 •
thmade@vahoo.com
FOR PROFESSIONAL SERVICES
CC&IAG Tax ID: 04-344-7185
Order Number: AG011922C18
Service: Cost Analysis
Property Address: 711 Route 28
South Yarmouth,MA 02664
Prepared by: Jacob C.Ross,SRA
•
Fee: $1,000
PAID: $1,000 (1/25/2018—Check#4727)
Amount Due: $0
Thank you
l
CAPE COD & ISLANDS APPRAISAL GROUP LLP
• Heather J.Ross,SRA,RA A:. ' u k tin info@canccodanpraisal.com Jacob C.Ross,SRA A.
MA Cen Gen RE Appr Lie#1434 www.canecodauaxaisal.com MA Ceit Res RE Appr Lie#70585
P.O. Box 545,Barnstable,MA 02630
Barnstable 508-362-9050 — Orleans 508-255-9269 — Fax 508-375-0154
February 13,2018
Randal Henderson
Taylor Building&Remodeling
PO Box 87
Centerville, MA 02632
thmade@yahoo.com
711 Route 28,South Yarmouth,MA 02664
(Replacement Cost of the Building Only)
Dear Mr.Henderson,
In accordance with your authorization,I have prepared an estimate of the replacement cost of the Pier
7 Condominiums (building only) located at 711 Route 28, South Yarmouth, MA 02664. Site improvements
(parking lot, septic system, landscaping, etc.) and land value are not included in the analysis. The "market
value" of the real estate has not been appraised. Jacob C. Ross, SRA inspected the property on January 26,
2018.
The intended use of this cost estimate is to assist the client, Randal Henderson, with National Flood
Insurance Program (NFIP)regulation compliance("50%Rule"),by providing an opinion of the replacement cost
'of the 'existing improvements, as of the date of value. Intended users of the report are the client, Mr.
Henderson, and the Yarmouth Building Commissioner, for the stated purpose. The appraiser has no duty to
any parties not specifically identified as intended users of the report.
Although,the NFIP "50% Rule" regulations use the term "market value," it is better described as the
replacement cost of the existing structure on the subject property. "Market value"is not specifically defined by
the NFIP,but the regulations do state 2 specific requirements:
• "Only the market value of the structure is pertinent. The value of the land and site improvements
(landscaping, driveway, detached accessory structures, etc) and the value of the use and occupancy
(business income) are not included. Any value associated with the location of the property should be
attributed to the land,not the building."
• "Market value must always be based on the condition of the structure before the improvement (sic) is
undertaken or before the damage occurred."
The market value of the real estate has not been appraised,as defined by the most common definition
of"market value" used in real estate appraisal. The Appraisal Institute definition of market value is, "The most
probable price, as of a specified date, in cash, or in terms equivalent to cash, or in other precisely revealed
terms,for which the specified property rights should sell after reasonable exposure in a competitive market
under all conditions requisite to a fair sale, with the buyer and seller each acting prudently,knowledgeably,and
•
Cape Cod&Islands Appraisal Group,LIP 1
• for self-interest, and assuming that neither is under undue duress."1 This definition includes the land, building,
site improvements, outbuildings, and other man-made structures. Only the building is included in this cost
analysis. Site improvements (landscaping, septic system, utility connections, etc.) and land value are not
included.
The subject improvements consist of a 25,735 square foot (SF), wood-frame, motel-condominium
building with 52 units and 81 bathrooms, originally constructed in 1975. Each unit has hot-water baseboard
heat by gas fuel, and a direct vent AC unit. The foundation is a full unfinished basement with 6'± poured
concrete walls, an earth floor and exterior bulkhead access. The attached pool-house is 2,388 SF with an in-
ground swimming pool, hot-tub,sauna,2 half baths,and a game room. Various updates to the buildings were
done in 2009, 2010 and 2016. Overall, the improvements are of average quality construction, but in good
condition, as of the date of value. Construction quality and condition ratings are based on an interior
inspection of a representative sample of 5 units,the reception office,basement,laundry room,pool-house and
an exterior inspection of the entire property. The GLA is based on the dimensions reported in the property
record card,and verified in the field by the appraiser.
This estimate of the replacement cost of the existing structure is a restricted report, intended to
comply with the requirements of Standards Rules 1 and 2 of the Uniform Standards of Professional Appraisal
Practice (USPAP), as promulgated by the Appraisal Standards Board of the Appraisal Foundation, 2018-2019
Edition,and all applicable guidelines and regulations.
The attached report includes an analysis of the depreciated replacement cost of the building only. It
does not include the land value or site improvements (shed, landscaping, parking lot, septic system, utility
connections,etc.). The scope of work included a physical inspection of the interior and exterior of the building
and development of an appropriate cost analysis. Cost data are based on the Marshall Valuation Service
manual, supported by local builders' estimates. The sales comparison and income approaches are not
applicable to the assignment and were not developed. No opinion of the market value of the real estate, site
value, or site improvements has been developed or provided. In this regard, the limited scope of the
assignment is fully disclosed and should be clear to all readers. Additional supporting documentation for the
factual data,reasoning and analysis is retained in the work file.
Based on the attached analysis, the estimated replacement cost of the subject improvements, as of
January 26,2018,is:
THREE MILLION TWO HUNDRED TWENTY THOUSAND DOLLARS($3,220,000)
The opinion of the depreciated replacement cost of the subject improvements reported in this letter is
intended solely for use by the client, cannot be fully understood by others who are not familiar with the
property or the intended use of the report, and is invalid with out the entire report attached. Thank you for
allowing us to be of service in this matter. Please contact us should you require any additional assistance.
Sincerely,
Pee Cats.
Jacob C.Ross,SRA
MA Certified Residential Real Estate Appraiser License#70585
1 The Appraisal of Real Estate,l4"'Edition,Appraisal Institute,2013,page 58
Cope Cod&Islands Appraisal Group,LLP 2
• COST ANALYSIS
Cost data are based on the Marshall Valuation Service Manual,supported by local builders' estimates.
The costs used are for average quality Class D "Motels," section 12, page 9 of the Marshall Valuation Service
manual. Class D refers to wood-frame construction. A description of the quality rating is included below.
Appropriate multipliers are applied to the base cost for the number of stories, story height and the "area"of
the building, which is based on the ratio of total square footage to number of units. The basement, porches,
balconies, and pool-house are included as separate line items, as they are not part of the "base cost." The
pool-house contains the pool, hot-tub, sauna, 2 half baths, and a game room. Finally, current and local cost
multipliers are applied to adjust for the higher cost of construction in the regional (eastern) and local (Cape
Cod) markets, as well as builder's profit and architect's fees. This is standard methodology when using the
Marshall Valuation Service manual.
Ratings and definitions from the Marshall Valuation Service manual:
• "Motels are multiple sleeping units of 3 or fewer stories, with or without individual kitchen facilities, and
designed for transient occupancy."
• "Class D Buildings are characterized by combustible construction.The exterior walls may be made up of
closely spaced wood or steel studs, as in the case of a typical frame house, with an exterior covering of
wood siding, shingle, stucco, brick or stone veneer, or other materials. Floors and roofs are supported on
wood or steel joists or trusses or the floor may be a concrete slab on the ground. Upper floors or roofs
may consist of wood or metal deck,prefabricated panels or sheathing."
• Average Quality: "Average-quality buildings constitute the largest group of buildings constructed,
approximately 50% of all buildings. These are generally buildings designed for maximum economic
potential without some of the pride of ownership or prestige amenities of higher-quality construction.
They are of good standard code construction with simple ornamentation and finishes. The basic costs,
which are listed,are national averages and in the case of any particular locality may not represent the local
average quality."
• Class D Exterior:"Good stucco and siding,little ornamentation,commercial style."
• Class D Interior:"Drywall or plaster,few extras,carpet,vinyl comp.,breakfast/hospitality room."
• lighting and Plumbing: "Adequate lighting and plumbing,TV circuits,some good fixtures."
• Appropriate adjustments (cost multipliers) for the shape of the footprint, stories, and ceiling height have
been applied. Basements, porches, balconies, pool house, pool, hot-tub, sauna, and deck are not
incorporated in the base cost estimate and are added as separate line items. Finally,an adjustment for the
Current and Local cost multipliers,as well as architect and builder margins are applied to account for higher
construction costs in the Eastern region and Cape Cod in particular.
• Depreciation of 19%is based on the Marshall Valuation Service depreciation table for motels,with 35 years
to full economic life and an effective age of 12 years.
Cape Cod&Islands Appraisal Group,UP 3
•
COST ANALYSIS
711 Route 28,South Yarmouth,MA 02664
PROPERTY TYPE MOTELS(343)
Building Class&Quality D/Average
Exterior Wall Vinyl Clapboard
Roof Covering Architectural Shingle
Foundation Full Bsmnt/Pref Conc Walls/Earth Fir
Number of Stories 2 Story
Total GLA 25,735 SF
Year Built&Age 1975/43 years
Condition&Eff Age Good-Updated/Eff 10-12 years
Region Eastern
Climate Moderate •
Sec 12,Pg 9-Class D
BASE SQUARE FOOT COST $85.82
Height&Size Refinements
Number of Stories-Multiplier 1.000
Story Height-Multiplier 1.000
Area Multiplier 0.941
Combined Height&Size Multiplier 0.941
Refined SF Cost $80.76
GLA 25,735 SF
SUB-TOTAL $2,078,354
Plus:Lump Sum Adjustments
Unfinished Basement 12,848 SF @ $25.50 /SF $327,624
Porch 2,654 SF @ $6.23 /SF $16,534
Balcony 2,588 SF @ $37.70 /SF $97,568
Pool House 2,388 SF @ $47.75 /SF $114,027
In-ground Pool 1 @ $25,000 $25,000 •
Hot Tub 1 @ $7,500 $7,500
Sauna 60 SF @ $180 /SF $10,800
Deck 1,152 SF @ $12.24 /SF $14,100
Lump Sum Total $613,153
SUB-TOTAL $2,691,512
Current&Local Cost Multipliers
Current Cost Multiplier 1.070
Local Cost Multiplier 1.200
SUB-TOTAL $3,455,901
Builder 10%
Architect 5%
TOTAL COST NEW OF IMPROVEMENTS $3,974,286
Depreciation Eff Age: 12 Yrs 19% $755,114
DEPRECIATED COST OF THE IMPROVEMENTS $3,219,172
ROUNDED TO $3,220,000
Based on the Marshall Valuation Service manual
Cape Cod&Islands Appraisal Group,LLP 4
SKETCH
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SKETCH CALCULATIONS
FIRST FLOOR
TOra.Sloth by a b neve.ax. Area Calculations Summary
Living Area Cakulatlon Details
Rrst Floor 12887 Sq ft 87 x 13 a 1131
46 x 250 11500
31 x 7 a 217
13x3 a 39
Total Living Area(Rounded), 12887 Sq R
Non-hying Are
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Porch 96 Sq ft 16 x 6 a 96
In-Door Pod House 2388 Sq ft 38 x 56 a 2128
20 x 13 a 260
Carport 520 Sq ft 20 x 26 a 520
Porch 1250 Sq ft 5 x 250 a 1250
Deck 1152 5q ft 48 x 24 a 1152
Porch 154 Sq ft 22 x 7 a 154
Porch 1250 Sq ft 250 x 5 a 1250
SECOND FLOOR
TOTN.Sketch by a b made.ax. Area Cala:latlona Summary
living Area Calculation Details
Second Floor 12848 Sq ft 46 x 250 a 11500
13x87 a 1131
7x31 a 217
Total Living Area(Rounded), 12848 Sq ft
Non-living Area .
Balcony 1250 Sq ft 250 x 5 a 1250
Balcony 1338 Sq ft 4 x 22 88
250 x 5 a 1250
Cape Cod&Islands Appraisal Group,LLP 7
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CERTIFICATION STATEMENT
I certify,to the best of my knowledge and belief:
• The statements of fact Included In this report are true and correct.
• I have performed no other services regarding the subject property within 3 years prior to the date of report and
date of value,as an appraiser or in any other capacity.
• The reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting
conditions and are my personal,impartial,and unbiased analyses,opinions,and conclusions.
• I have no present or prospective interest in the property that is the subject of this report and no personal interest
with respect to the parties involved.
• I have no bias with respect to the property that is the subject of this report or to the parties Involved with the
assignment.
• Engagement Is this assignment is not contingent on developing or reporting predetermined results.
• Compensation for completing this assignment is not contingent upon the development or reporting of a
predetermined value or direction in value that favors the cause of the Client,the amount of the value opinion,or
the occurrence of a subsequent event directly related to the Intended use of this appraisal.
• The reported analyses,opinions and conclusions in this cost analysis were developed and prepared in compliance
with the requirements of the Code of Professional Ethics and Standards of Professional Appraisal Practice of the
Appraisal Institute.
• Use of till's rebort is subjeft to the requiretents of the Appraisal InstitUte relating t6 teView by it!duly authorized
representatives.
• Jacob C.Ross,SRA Inspected the property January 26,2018.
• No one provided significant real property appraisal assistance in this assignment.
• This cost analysis Is not Intended to be used to establish tht{nsurable value of the property.
• I certify I am appropriately licensed and qualified to appraise real estate In the Commonwealth of Massachusetts,
and that my education and experience in preparing similar assignments satisfies the competency provision of
USPAP.
• The appraiser is not a construction expert or certified home/building inspector. The property inspection and this
report should not be relied upon to reveal any potential Issues with the construction, condition of the
Improvements, or mechanical systems. Any issues reported to the appraiser or observed in the course of the
property inspection are disclosed. The appraiser certifies the property inspection was commensurate with
Industry standards and all known Issues pertaining to the condition of Improvements and mechanical systems,
quality of construction, safety, soundness, and/or pest issues have been reported,to the best of the appraiser's
knowledge.
• As of the date of the report,I,Jacob C. Ross,SRA, have completed the requirements of the continuing education
program for Designated Members of the Appraisal Institute.
Pao C211. Date: January 26.2018
Jacob C Ross,SRA
Certified Residential Real Estate Appraiser,MA Lic#70585
Cape Cod&Islands Appraisal Group,LLP 14
•
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Format:Restricted Report—Cost Analysis
This cost analysis in restricted report format is developed and reported in compliance with the
requirements of Standards 1 and 2 of the Uniform Standards of Professional Appraisal Practice of the
Appraisal Standards Board,2018-2019 Edition,and all applicable laws,guidelines,and regulations.
The opinion of value developed is an estimate of the replacement cost of the existing improvements only,
as of the date of value. The opinion of the replacement cost is based solely on a cost analysis. The
available data are adequate to develop credible assignment results, based on the property inspection and
the Marshall Valuation Service manual. The sales comparison approach and income approach are not
applicable to the assignment and were not developed. No opinion of market value has been developed or
provided.
General Assumptions
It is assumed that:
• Public records are correct/accurate.
• Data provided by the client, and 3rd parties are accurate and reliable.
• There are no adverse easements or encroachments.
• No contamination on the property from any source.
• Clear title and fee simple ownership.
• The septic system conforms to current Board of Health regulations and would pass inspection.
• The property complies with all applicable public land use regulations, including appropriate permitting of
the improvements.
• The subject can be rebuilt on the existing footprint if destroyed by natural causes,such as storms or fire.
Extraordinary Assumptions& Hypothetical Conditions
Extraordinary Assumptions: None
Extraordinary Assumption: "An assignment-specific assumption, as of the effective date, regarding
uncertain information used in the analysis which,if found to be false,could alter the appraiser's opinions
or conclusions.i2
Comment: "Uncertain information might include physical, legal or economic characteristics of the subject
property; or conditions external to the property, such as market conditions or trends; or the integrity of
data used in an analysis."
Hypothetical Conditions:None
Hypothetical Condition: 1'A condition, directly related to a specific assignment, which is contrary to what is
known by the appraiser to exist on the effective date of the assignment results, but is used for the purpose
of the analysis."3
Comment: "Hypothetical conditions are contrary to known facts about physical, legal, or economic
characteristics of the subject property; or about conditions external to the property, such as market
conditions or trends;or about the integrity of data use in an analysis."
2 USPAP 2018-2019 Edition,The Appraisal Foundation,2018,Page 4
3 USPAP 2018-2019 Edition,The Appraisal Foundation,2018,Page 4
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Intended User(s)
Definition: "The client and other party as identified, by name or type, as users of the appraisal or appraisal
review report by the appraiser on the basis of communication with the client at the time of the
assignment." Intended users are the client and the town Building Commissioner, for the stated intended
use. The appraiser has no duty to any parties not specifically identified as intended users.
Intended Use
Definition: "The use or use(s) of an appraiser's report or appraisal review assignment results, as identified
by the appraiser based on communication with the client at the time of the assignment."5
The intended use is to develop an opinion of the replacement cost of the existing subject improvements
only,as of the date of value,to assist the client with building code compliance, subject to the stated Scope
of Work, purpose of the appraisal, reporting requirements of the appraisal form, and Definition of Market
Value. The cost analysis is not intended for any other use/purpose.
Property Rights Appraised:Fee Simple
N/Ap.An opinion of market value was not developed. See cover letter.
Value Appraised:Market Value
N/Ap.An opinion of market value was not developed. See cover letter.
Highest&Best Use
N/Ap. A highest and best use analysis is not applicable to the assignment. Definition: "The reasonably
probable use of property that results in the highest value. To be reasonably probable, a use must meet
certain conditions:the use must be physically possible (or it is reasonably probable to render it so);the use
must be legally permissible (or it is reasonably probable to render it so); the use must be financially
feasible." Uses that meet the three criteria of reasonably probable uses are tested for economic
productivity, and the reasonable probable use with the highest value is the highest and best use. (The
Appraisal of Real Estate, 14th Edition,Appraisal Institute,2013, page 332)
Warranties
The appraiser(s) who prepared this report and/or associate appraisers, if any, are not guarantors of value,
utility,condition, or feasibility.The values or range of values reported herein (where applicable) are opinion
and are not warranted as,or representations of,fact In the event that this appraisal is used as a basis to set
a market price, no responsibility is assumed for the seller's inability to obtain a purchaser at the value
reported herein.
Compensation is Not Contingent
Compensation is not contingent upon the reporting of a predetermined value or direction in value that
favors the cause of the client, the amount of the value estimate, the attainment of a stipulated result, or
the occurrence of a subsequent event.
"USPAP 2018-2019 Edition,The Appraisal Foundation,2018,Page 5
USPAP 2018-2019 Edition,The Appraisal Foundation,2018,Page 5
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Testimony
The appraisers,by reason of this appraisal,are not required to give further consultation or testimony or be
in attendance in court with reference to the property in question unless arrangements have been
previously made.The report is not intended for bankruptcy proceedings and the summary reporting format
is not sufficient for court purposes.
Third Parties Excluded-Unauthorized Use
The appraisers have undertaken this assignment with the specific understanding that there is no third party
beneficiary to the contract between the client and the appraisers.This report is for the exclusive use of the
client who is the intended user of the appraisal,for the purpose stated in the report.
Possession of this report, or a copy thereof, does not carry with it the right of publication, nor may it be used
for any purpose by anyone but the client or his assigns and then only with proper qualifications.
Unauthorized transmittal of the report or its conclusions to third parties invalidates this report.
This assignment was undertaken for the client specified herein. The appraisers do not recognize or assume
any duty to persons other than that client in the formulation of this report and its conclusions. The client
may make such reasonable use of this report as is consistent with the function of the report, but any third
or other party Into whose possession the report may come, should not assume that its rationales or
conclusions will serve any other client or function unless specifically authorized in writing by the appraisers.
Value Allocations(where applicable)
Any allocation of the total value estimated in this report between the land and the improvements, if any,
applies only under the stated program of utilization.The separate values allocated to the land and buildings
must not be used in conjunction with any other appraisal and are invalid if so used. Any value estimates
provided In the report apply to the entire property,and any pro-ration or division of the total into fractional
interests will invalidate the value estimate, unless such pro-ration or division of interest has been set forth
in the report.
Illustrative Material
All engineering studies are assumed to be correct.The plot plans and illustrative material in this report are
included only to help the reader visualize the property.The exhibits included with this report are intended
to provide visual assistance to the reader and were prepared by the appraiser for illustrative purposes only.
Any sketch in the report may show approximate dimensions and is included to assist the reader in
visualizing the property. The appraiser(s)have made no independent survey of the property.
Legal
No responsibility is assumed for the legal description provided or for matters pertaining to legal or title
considerations. Title to the property is assumed to be good and marketable unless otherwise stated. The
property is appraised free and clear of any and all liens or encumbrances unless otherwise stated. It is
assumed that the use of the land and improvements are confined within the boundaries or property lines of
the property described and that there is no encroachment or trespass unless noted in the report.
Information Obtained From Others
The information furnished by others is believed to be reliable,but no warranty is given for its accuracy.
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Projections and Forecasts
The forecasts, projections, or operating statements contained herein are based upon current market
conditions, anticipated short-term supply and demand factors, and a continued stable economy. These
forecasts are,therefore,subject to changes with future conditions.
Publication
Possession of this report, or a copy thereof, does not carry with it the right of publication. Neither all, nor
any part of the contents of this report shall be disseminated to the public through advertising, public
relations, news, sales, or other media, particularly as to the value conclusion, identity of appraisers or firm
with which he is connected, or any references to the Appraisal Institute, MAI designation or SRA
designation, or Massachusetts Board of Real Estate Appraisers, MRA designation, or any other designation
or license without the written consents and approval of the appraisers.
Disclosure of the contents of the appraisal report is governed by the By-Laws and Regulations of the
Massachusetts Board of Registration of Real Estate Appraisers and by the professional organizations with
which the appraisers are affiliated. The client is advised and acknowledges that the appraisal is subject to
the requirements of the Code of Professional Ethics and Standards of Professional Practice of the Appraisal
Institute;that the Appraisal Institute has the right to review the report.
Hidden or Other Property Conditions
It is assumed that there are no hidden or unapparent conditions of the property, subsoil, or structures that
render it more or less valuable unless otherwise stated in the report. No responsibility is assumed for such
conditions or for obtaining the engineering studies that may be required to discover them.
Contamination-Hazardous Materials
Unless otherwise stated in this report, the existence of hazardous materials, which may or may not be
present on the property, was not observed by the appraisers. The appraisers have no knowledge of the
existence of such materials on or in the property. The appraisers, however,are not qualified to detect such
substances. The presence of substances such as asbestos, urea-formaldehyde foam Insulation, mold,
fungus, and other potentially hazardous materials or substances anywhere on the site or in the
improvements may affect the value of the property.
The value estimate is predicated on the assumption that there is no such material on or in the property that
would cause a loss in value. No responsibility is assumed for such conditions or for the expertise or
engineering knowledge required to discover them. The client is urged to retain an expert in this field, if
desired.The presence or condition of underground tanks is excluded as a consideration in this study. The
client is advised that the law may require owners of underground tanks which may contain petroleum or
hazardous substances to report their existence to state authorities for registration.
Compliance
It is assumed that the property conforms to all applicable zoning and land use regulations and restrictions
unless a non-conformity has been Identified, described, and considered in the appraisal report. It is
assumed that the property is in full compliance with all applicable federal, state, and local environmental
regulations and laws unless the lack of compliance is stated, described, and considered in the appraisal
report.
It is assumed that all required licenses, certificates of occupancy, consents, and other legislative or
administrative authority from any local,state,or national government or private entity or organization have
been or can be obtained or renewed for any use on which the value contained in the report is based.
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Violations
The appraisers assume no responsibility for detection of any violations related to conversion, pollution,
environmental protection, zoning, subdivision regulations, building codes, or any other regulatory statutes,
ordinances, by-laws,regulations,or other legal constraints.
Computer Generated Photographs&Property inspection
The appraiser(s) certify that any computer generated photographs included in this report have not been
• retouched or enhanced in any way. This is to certify that the signatory rya
appraiser(s) of this appraisal
" conducted the property inspection unless otherwise stated within the report.
PGAC tails
Date: January 26,2018
Jacob C. Ross,SRA
MA Certified Residential Real Estate Appraiser License#70585
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