Eugene D. Lanier, Inc. - Page 17

                                       - 17 -                                         
          improvements to be $521,111 using the Marshall and Swift Cost               
          Manual.  To that figure he added certain indirect costs of                  
          $14,106 and an "entrepreneurial fee" of $114,500.  (Lambert                 
          described an entrepreneurial fee as a "soft cost" charged by the            
          coordinator/developer of a project for the time and risk involved           
          in bringing it to fruition.)  Thus, Lambert's estimate of the               
          replacement cost new for the improvements was $649,717.  Lambert            
          then estimated total depreciation, including physical                       
          depreciation and external obsolescence, to be $259,887.  Adding             
          together the value of the land and the estimated depreciated cost           
          of improvements, Lambert valued the Property at $702,800.                   
               For the market-data approach, Lambert chose 5 sales of                 
          improved properties (improved sale), all of which were automobile           
          dealerships, as comparables.  The unit of comparison was the                
          price paid per square foot of gross building area, including                
          land.  He made adjustments for such factors as location, age and            
          condition of the improvements, and size.  Under this method,                
          Lambert estimated the value of the Property at $636,300, rounded.           
               Under the capitalization-of-earnings approach, Lambert                 
          examined the lease rates for 9 properties (lease comparable).               
          He estimated a rental rate for the Property of $6 per square foot           
          and a gross building area of 13,980 square feet which, after                
          expenses, yielded a net annual operating income for the Property            
          of $76,295.  Lambert then used the mortgage-equity band of                  
          investment technique to estimate a capitalization rate of 12.45             

Page:  Previous  7  8  9  10  11  12  13  14  15  16  17  18  19  20  21  22  23  24  25  26  Next

Last modified: May 25, 2011