Appraisal Report

APPRAISAL REPORT
PROPERTY: COLLEGE COURTYARD APARTMENTS & RAIDER HOUSING

A 62 UNIT MULTI-FAMILY RESIDENTIAL PROPERTY
28 & 30 GARDEN LANE
NICEVILLE, OKALOOSA COUNTY, FL 32578
CLIENT: NORTHWEST FLORIDA STATE COLLEGE FOUNDATION
EQUIVALUE APPRAISAL LLC

PROFESSIONAL APPRAISAL AND VALUATION SERVICES
PO BOX 5326
DESTIN, FLORIDA 32540
PHONE (850) 424-6119
Jason P. Shirey, MAI, CCIM, CPM Josette D. Jackson, CCIM

State Certified General Real Estate Appraiser RZ3186 State Certified General Real Estate Appraiser RZ3275
Direct Phone (850) 543-5953 (Mobile)
EquiValue Appraisal No. 190416
APPRAISAL REPORT
Of Existing Multi-Family Property
College Courtyard Apartments & Raider Housing
a 62 Unit Multi-Family Property
Location
28 & 30 Garden Lane
Niceville, Okaloosa County, FL 32578
Effective Date
December 13, 2019
Report Date
January 10, 2020
Client / Intended User

Ms. Cristie Kedroski
Vice President of College Advancement
Northwest Florida State College Foundation
100 College Boulevard
Niceville, FL 32578
Tel: 850.729.5210
Prepared by:
Jason P. Shirey, MAI, CCIM State Certified General Real Estate Appraiser RZ3186
Josette D. Jackson, CCIM State Certified General Real Estate Appraiser RZ3275
Phone 850 424 6119 Fax 866 897 5975
EquiValue Appraisal LLC File #: EQ 190416

© Copyright 2020 by Jason Shirey, MAI, CCIM and EquiValue Appraisal LLC. All rights reserved. No part of this publication may be
reproduced, modified, rewritten, redistributed, either electronically or by any other means, without express, written permission.
January 10, 2020
Ms. Cristie Kedroski

Vice President of College Advancement
Northwest Florida State College Foundation
100 College Boulevard
Niceville, FL 32578
Re: Appraisal of College Courtyard Apartments & Raider Housing, an

existing 62 Unit Multi-Family Residential Property, whose postal address
is 28 & 30 Garden Lane, Niceville, Okaloosa County, FL 32578.
EquiValue Appraisal LLC File No. EQ 190416.
Dear Client:
At your request and authorization, we have prepared an appraisal for the above-referenced multi-
family property. A copy of the pertinent engagement document has been included in the
addenda to this report if applicable.
This letter of transmittal is not an appraisal report, but merely serves to transmit the attached
appraisal report and convey the final conclusion of value. The accompanying research, analyses
and conclusions, and appraisal report following this letter of transmittal is an Appraisal Report
compiled in accordance with Standard 2-2(a) of USPAP.
The purpose of this appraisal is to derive an opinion of the Current Market Value of the Fee
Simple interest in the subject property, in ‘As Is’ condition, as of December 13, 2019.
The intended use of this appraisal is for internal decision making by the Client, Northwest
Florida State College Foundation. The intended user of this report is Northwest Florida State
College Foundation.
The values reported are predicated upon market conditions prevailing as of the effective date of
the appraisal. In the context of the scope of work, the appraisal is considered to render a credible
opinion of value, specific to the client, intended use and intended user.
We have completed the requisite inspections, research, and analyses necessary to appraise the fee
simple interest in the subject property, ‘As Is’, as of December 13, 2019.
Please reference the Scope section of this report for information regarding the scope of research
and analysis for this appraisal, including property identification, inspection, highest and best use
analysis and valuation methodology.
We certify that we have no present or contemplated future interest in the property beyond this
opinion of value. The reported value(s) in this appraisal have not been based on a requested
minimum valuation, a specific valuation, or the approval of a loan, and have been prepared in
compliance with the Uniform Standards of Professional Appraisal Practice.
January 10, 2020
Page 2
Your attention is directed to the Limiting Conditions and Assumptions section following the
reconciliation and appraisal certification in this report. Acceptance of this report constitutes an
agreement with these conditions and assumptions.
This appraisal is subject to the following Hypothetical Condition(s):

• None.
This appraisal is subject to the following Extraordinary Assumption(s):

• None.
Market value, fee simple interest, highest and best use, and other pertinent terms are defined in
the following report.
Our opinion of value was formed based on our experience in the field of real property valuation,
as well as the research and analysis set forth in this appraisal.
Our concluded opinion of value for the subject property, as of December 13, 2019, subject to the
attached assumptions, limiting conditions and certification, is as follows:
Current Market Value of the Fee Simple Interest

In the Subject Property, In ‘As Is’ Condition,
As of December 13, 2019:
Five Million Dollars

($5,000,000)
The estimated market exposure period necessary for the subject to have achieved this value is
estimated to be 9-12 months.
It was a pleasure assisting you with this matter. If you have any questions concerning the
following analysis, or if we can be of further assistance, please do not hesitate to call.
Respectfully submitted,
EquiValue Appraisal, LLC.
Jason P. Shirey, MAI, CCIM Josette D. Jackson, CCIM

Cert Gen RZ3186 Candidate for Designation, Appraisal Institute
Cert Gen RZ3275
INTRODUCTION
QUALIFICATIONS OF THE APPRAISER
Qualifications of
Jason P. Shirey, MAI, CCIM, MS-RECM
State-Certified General Real Estate Appraiser No. RZ 3186 (FL)
State-Certified General Contractor No. CGC 062478 (FL)
Licensed Real Estate Broker No. BK 3168469 (FL)
MAI : Designated Member of the Appraisal Institute

Appraisal Insitute, Chicago, Illinois.
CCIM : Designated Certified Commercial Investment Member

CCIM Institute, Chicago, Illinois.
M.S. RECM : Master of Science, Real Estate and Construction Management

University of Denver - Denver, Colorado.
B.S. BCN : Bachelor of Science, Building Construction Management

University of Florida – Gainesville, Florida.
Business Affiliations and Work Experience, Past / Present
EquiValue Appraisal and Consulting Services

Principal and Founder; Real Estate Appraiser, Real Estate Broker, Certified General Contractor
Marsh Appraisal Corporation - Real Estate Appraisal and Valuation Services, Fort Walton Beach, Florida
Registered Trainee Appraiser / State Certified Real Estate Appraiser
Plantation Coast Properties, LLC – Fort Walton Beach, Florida

Principal; Real Estate Investments and Property Management
Alcon Associates, Inc. – Commercial General Contractors / Construction Managers; Pensacola, Florida
Florida Division Manager
National Construction Enterprises, LLC – General Contractor / Construction Managers; Savannah, Georgia
Vice President of Operations, Savannah-Hilton Head Division
Acoustics and Specialties, Inc. – General Contractors; Memphis, Tennessee

Senior Estimator / Project Manager of Healthcare Construction
Brasfield and Gorrie General Contractor Inc. – General Contractors and Construction Managers; Orlando, Florida
Construction Estimator / Project Manager
United States Air Force Reserve

Reserve Pilot, Boeing C-17 Globemaster III
Jason P. Shirey, MAI, CCIM, MS-RECM (Continued)
Professional / Continuing Education
Litigation Appraising - Specialized Topics and Applications Income Property Management

Appraisal Institute Institute of Real Estate Management / University of Denver
Uniform Standards of Professinal Appraisal Practice Certified Commercial Investment Member Core Concepts
7 Hour Update, Appraisal Institute CCIM Insitute Comprehensive Exam
Advanced Income Capitalization Appraising from Blueprints and Specifications

Appraisal Institute Appraisal Institute
Advanced Sales Comparison Approach Florida Building Code Update

and Principles In Highest and Best Use Florida Workplace Safety and OSHA Update
Appraisal Institute Universal Inspection Service
User Decision Analysis for Commercial Real Estate Uniform Standards of Professional Appraisal Practice
CCIM Institute Course CI-103 15 Hour Update, Appraisal Institute
Advanced Cost Approach Business Practices and Ethics for Appraisers

Appraisal Institue Appraisal Institute Course #420
Real Estate Taxation, Planning and Consequences Basic Income Capitalization

University of Denver, Burns School of Real Estate Appraisal Institute
Advanced Real Estate Feasibility Analysis Advanced Valuation and Report Writing
Urban Land Institute / University of Denver Appraisal Institute Course #540
Real Estate Securities and Syndications Real Estate Investment Finance

University of Denver, Burns School of Real Estate University of Denver, Burns School of Real Estate
Legal Issues In Real Estate and Construction Management Computer Applications for Real Estate Analysis
University of Denver, Burns School of Real Estate University of Denver, Burns School of Real Estate
Income Property Investment Risk Management and Insurance for Investment Real Estate
Urban Land Institute / University of Denver University of Denver, Burns School of Real Estate
Argus Financial Analysis Indoor Air Quality and Mold Contamination Remediation
University of Denver, Burns School of Real Estate National Association of Mold Professionals, 2004
Residential Real Estate Appraiser Course ABII Real Estate Trainee Appraiser Course ABI
Ed Klopfer Schools of Real Estate Ed klopfer Schools of Real Estate
Real Estate Salesperson Pre-Licensing Course Uniform Standards of Professional Appraisal Practice
Ed Klopfer Schools of Real Estate 15 Hour Update, Appraisal Institute
Appraiser Experience - Property Types Previous Client List (Partial)
Affordable Housing Access Bank and Mortgage

Agricultural Land Alternative Funding Corporation
Aircraft Hangars BanCorp South
Antenna Towers Bank of America
Apartments Bank of Bonifay
Automobile Dealerships Bank of Pensacola
Hotels and Motels BankTrust
Bank Buildings Beach Community Bank
Bowling Alleys CB Richard Ellis
Broadcast Facilities CCB Community Bank
Campgrounds / Recreational Vehicle Parks Colonial Bank
Car Washes Community Bank
Churches Compass Bank
Coastal Land Cotton and Gates
Condominium Units: Crystal Beach Development
Assemblages, Complexes, Conversions DestinFirst Bank
Condominium Projects: First Capital Bank
Pre-development, Insurable Replacement Cost First City Bank
Convenience Stores First Gulf Bank
Day Care Centers First National Bank and Trust
Development Appraisals Florida Coastal Mortgage
Distribution Facilities Guaranty Federal Bank
Golf Clubs and Country Clubs GulfSouth Private Bank
Health Clubs Jay Odom
High-End Residential Kevin Helmich, P.A.
Hobby Farms Legendary, Inc.
Home Sites (Lots) LNK Development
Home Sites (Land - Large Tracts) M & F Bank
Hotel - Resorts People's First Community Bank
Industrial Land Premier Community Bank
Indstrial Improvements Regions Bank
Light Industrial Properties Renasant Bank
Manufacturing Facilities Sunbird Condominium Owner's Association
Marinas / Docks / Boat Storage Facilities Suntrust Bank
Medical Offices The Plaza Owner's Association
Mixed Use Developments Tranquil Harbor Owner's Association
Mobile Home Parks Trustmark National Bank
Multifamily Land Vanguard Bank
Multifamily Developments Villas on the Gulf Condominium Onwer's Association
Nurseries Vision Bank
Office Buildings Wachovia Bank
Office Condominiums Whitney Bank
Office-Warehouse Facilities
Outdoor Signs
Parking Facilities Assignment Purposes
Replacement Cost Appraisals
Retail Stores (Anchor Tenant / Owner Occupied) Acquisition
Retail Strip Centers (Multiple Tenant) Disposition
Restaurants (All types) Assessment Appeal
Self-Storage Facilities Development Feasibility
Subdivisions (Commercial) Estate Planning
Subdivisions (Residential) Financing (Institutional and Private)
Single Family Residences Investment Analysis
Sustainable Development (Green Buildings) Portfolio Analysis
Urban Land (Vacant and Interim Use) Marital Dissolution
Warehouses Relocation
Yacht Clubs Mediation, Arbitration, Dispute Resolution
Assignment Types Primary Market Area
Appraisal Review Okaloosa County

Buyer Brokerage Destin
Complex Valuation Fort Walton Beach
Construction Progress / Draw Request Inspection Crestview
Demographic Analysis Mary Esther
Detrimental Conditions Valuation and Consulting Niceville
Eminent Domain Valuation and Consulting Bluewater Bay
Estate Valuation
Feasibility Studies Walton County
Fee Appraisals Including Full and Fractional Interests Miramar Beach
Foreclosure / REO Appraisal - Assessment Panama City Beach
Highest and Best Use Analysis Rosemary Beach
Insurance Santa Rosa Beach
Litigation Support Blue Mountain Beach
Market Studies Freeport
Portfolio Valuation and Analysis Defuniak Springs
Relocation Appraisal Inlet Beach
Rent Analysis / Studies Seacrest Beach
Retrospective Valuation
Site Location Services Santa Rosa County
Valuation and Consultation for Financial Reporting Navarre
Navarre Beach
Gulf Breeze
Bay County
Panama City
Panama City Beach
Springfield
EQ 190416 – College Courtyard Apartments/Raider Housing – NWF State College Foundation Pg. 10
Table of Contents
Letter of Transmittal
Qualifications of the Appraiser
INTRODUCTION
Subject Photograph ........................................................................................................ 11
Summary of Salient Facts and Conclusions................................................................... 12
Definition of Value, Property Rights Appraised, and Intended Use.............................. 19
FACTUAL DESCRIPTIONS ........................................................................................... 24
Property Description ...................................................................................................... 25
Aerial Photographs......................................................................................................... 32
FEMA Flood Map .......................................................................................................... 34
College Courtyard Floor Plans....................................................................................... 48
Zoning Description ........................................................................................................ 49
Zoning Map.................................................................................................................... 50
Assessment and Taxes ................................................................................................... 51
ANALYSIS OF DATA AND OPINIONS OF THE APPRAISER .................................. 55
Market Area Summary ................................................................................................... 56
Highest and Best Use ‘As If Vacant’ ............................................................................. 70
Highest and Best Use ‘As Is’ ......................................................................................... 72
Valuation Methodology Utilized in this Assignment .................................................... 78
Improved Sales Comparison Approach ......................................................................... 79
Income Approach ........................................................................................................... 94
Income Projection ........................................................................................................ 103
Income and Expense Statement ................................................................................... 105
Income Approach Conclusion...................................................................................... 111
Final Reconciliation ..................................................................................................... 112
Value Conclusion ......................................................................................................... 112
Value Conclusion ......................................................................................................... 114
Certification ................................................................................................................. 115
Limiting Conditions and Assumptions ........................................................................ 117
ADDENDA ..................................................................................................................... 121
Most Recent Deed(s) of Conveyance .......................................................................... 122
Utility Easement - Telephone ...................................................................................... 124
Ingress/Egress Easement .............................................................................................. 125
Soils Map and Descriptions ......................................................................................... 138
City of Niceville Land Development Code Excerpt .................................................... 144
Insurable Replacement Cost Estimate – Building Improvements Only ...................... 146
October 2019 Rent Roll and Management Statement Provided .................................. 152
2019 Fiscal Year Expenses Provided ........................................................................... 157
Subject Photograph
Additional photographs can be referenced in the Property Description Section of the

Appraisal Report.
Typical College Courtyard Apartments
Typical Raider Housing

Summary of Salient Facts and Conclusions
GENERAL
EquiValue File No: EQ 190416
Subject: College Courtyard Apartments & Raider Housing,

A 62 Unit Multi-family Property
28 & 30 Garden Lane, Niceville,
Okaloosa County, FL 32578
The subject property ‘As Is’ consists of three parcels of

multi-family residential zoned land containing an
aggregate of 4.84 acres, improved with an existing
apartment complex comprised of eight apartment
buildings with a total of 62 units plus an
office/laundry/maintenance building. This is the use
reflected in this appraisal report.
The subject property is being appraised ‘As Is’, Fee

Simple interest.
Owner: Okaloosa-Walton Community College Foundation, Inc.

100 College Blvd
Niceville, FL 32578
Legal Description: Metes and Bounds. The reader is referred to the addenda
for the complete legal description.
Tax Identification: 05-1S-22-256C-0004-0010

05-1S-22-256C-0009-0010
05-1S-22-256C-0003-0010
Date of Report: January 10, 2020
Date of Inspection/Photos: December 13, 2019
Date of Value: December 13, 2019
Property Rights Appraised: Fee Simple
Intended Use: The intended use of this appraisal is for internal decision
making by the Client, Northwest Florida State College
Foundation.
Intended User(s): The intended user of this report is Northwest Florida

State College Foundation only.
Appraisal Purpose: Current Market Value, ‘As Is’, as of December 13, 2019
Assessed Value: $2,730,415 (2019, Aggregate)

It is the appraiser’s opinion that assessed value has no
direct correlation to Current Market Value in the subject
market area.
Taxes: $20,343.20 (2019, Aggregate), which is fully attributable

to the College Apartments at Parcel 05-1S-22-256C-
0003-0010. Parcels 05-1S-22-256C-0004-0010 and 05-
1S-22-256C-0009-0010 (Raider Housing) hold an
educational exemption from property taxes.
According to the County Tax Collector website, the 2019

taxes have been paid in full as of the effective date of this
appraisal. No prior year taxes are reported delinquent.
Sale History: Per Okaloosa County Public Records ORB/P 2056/1595,

the subject parcels were purchased by Okaloosa-Walton
Community College Foundation, Inc. from the grantor,
Ramonde R. Williams on March 1, 1997 for a reported
consideration of $785,000. This appears to have been an
arm’s length transfer, at least nominally consistent with
then-current market value.
Parcels 05-1S-22-256C-0009-0010 and 05-1S-22-256C-

0004-0010 were improved at time of purchase with the
Raider Housing improvements. Parcel 05-1S-22-256C-
0003-0010 (1.44 ac), was subsequently developed in
2007 with the College Courtyard Apartments.
No transfers of the subject property have occurred within

the three years prior to the effective date of this appraisal.
Current Contracts/Listing: The subject property is not currently listed for sale nor
has it been in the 12 months prior to the effective date of
this appraisal.
Per rent roll provided, the 30 Raider Housing units are

100% occupied by students of the ownership entity
college (non-income producing). The 32 College
Courtyard Apartment units are 100% occupied via short-
term residential lease agreements (typical term of 12
months or less). The per unit rent rates are discussed in
greater detail in the Income Approach section of this
report.
Hypothetical Condition(s): None
Extraordinary
Assumption(s): None.
PROPERTY
Land Area: Total: 4.84 acres
Usable: 4.84 acres
Excess: 0.00 Acres
Zoning: R-3, Multi-Family Residential District, by the City of

Niceville
Highest and Best Use Development of multi-family improvements is estimated

‘As If Vacant’: to be the highest and best use for the subject property,
‘As If Vacant’, as this use provides a higher return to the
underlying land than any other use analyzed.
Highest and Best Use Continued use of the subject improvements as a multi-
‘As Is’: family property with ongoing maintenance and continued
replacement of major components as necessary is
considered to be the maximally productive use of the
property ‘As Is’ as this use provides a higher return to
the owner / investor than any other option analyzed.
VALUE CONCLUSIONS
Land Value: Not Utilized
Cost Approach: Not Utilized
Insurable Replacement Building #1 - $455,000

Cost New: Building #2 - $455,000
Building #3 - $455,000
Building #4 - $455,000
Building #5 - $50,000
Building #6 - $470,000
Building #7 - $470,000
Building #8 - $435,000
Building #9 - $325,000
Improved Sales
Comparison Approach: $4,650,000
Income Approach: $5,220,000
Reconciled Opinion of Premise: Current Market Value ‘As Is’

Value (Rounded): Estate: Fee Simple
Existing Multi-Family Property
Value Conclusion: $5,000,000
PERTINENT DATES OF MARKETING AND EXPOSURE TIME

Estimated Marketing Time: 9-12 months
Estimated Exposure
Period: 9-12 months
Appraisal Scope of Work
In accordance with the 2020-2021 Uniform Standards of Professional Appraisal Practice,

it is the appraiser’s responsibility to develop and report a scope of work that results in
credible results that are appropriate for the appraisal problem and intended user(s).
This process should meet the expectations of parties who are regularly intended users for
similar assignments and be consistent with what an appraiser’s peers’ actions would be in
performing the same or a similar assignment.
Therefore, the appraiser must identify and consider:
● the client and intended users;

● the intended use of the report;
● the type and definition of value;
● the effective date of value;
● assignment conditions;
● typical client expectations; and
● typical appraisal work by peers for similar assignments.
This appraisal is prepared for the client, Northwest Florida State College Foundation.
The intended use of this appraisal is for internal decision making by the Client. The
intended user of this report is Northwest Florida State College Foundation only. The
appraisers are not responsible for the unauthorized use of this appraisal report.
SCOPE OF WORK
Report Type: This is an Appraisal Report, which is intended to
comply with the reporting requirements set forth under
Standards Rule 2-2(a) of the Uniform Standards of
Professional Appraisal Practice for an Appraisal
Report. It presents summary discussions of
the data, reasoning, and analyses that were used in the
appraisal process to develop the appraisers' opinion of
value.
Supporting documentation that is not provided with

the report concerning the data, reasoning, and analyses
is retained in the appraisers' file. The depth of
discussion contained in this report is specific to the
needs of the client and for the intended use stated in
the report. The appraisers are not responsible for the
unauthorized use of this report.
Property Identification: The subject has been identified by the site inspection,
legal description, and the assessors' parcel
identification numbers.
Inspection: An inspection of the subject property has been made,

and photographs taken.
Market Area and Analysis of An analysis of market conditions was made. The
Market Conditions: appraisers physically inspected the micro and/or macro
market environments which influence the subject
property.
Highest and Best Use Analysis: An analysis of highest and best use, for the subject
development in ‘As If Vacant’ and ‘As Is’ conditions
was made.
Valuation Analyses
Land Valuation: An opinion of value for the subject underlying land

has not been developed in this appraisal assignment in
conjunction with non-application of the cost approach
per reasoning below.
Cost Approach: The Cost Approach to value has not been developed in
this appraisal assignment. In consideration of the
current actions of market participants in the local
market, as well as the actual age of the building
improvements, the Cost Approach to value is not
considered necessary to the derivation of a credible
value opinion for the subject property ‘As Is’.
Omission of this approach to value is not considered to
negatively affect the credibility of the final value
opinion contained herein.
At the request of the Client, we have provided an

estimate of Insurable Replacement Cost New for the
building improvements. This data is located in the
addenda.
Improved Sales Comparison The Sales Comparison approach has been utilized in
Approach: this appraisal assignment for the subject property in
'As Is' condition. This valuation considers the Fee
Simple interest.
Income Approach: The Income approach has been utilized in this

appraisal assignment for the subject property in 'As Is'
condition, via direct capitalization method. This
valuation considers the Fee Simple interest.
Exposure Time: Exposure Time may be defined as: the estimated

length of time the property interest being appraised
would have been offered on the market prior to the
hypothetical consummation of a sale at market value
on the effective date of the appraisal; a retrospective
opinion based on an analysis of past events assuming a
competitive and open market.
The estimate of exposure time is presented in

consideration of the exposure periods for comparable
sales utilized in this appraisal, marketing time
information available from nationally published
sources including the CB Richard Ellis National
Market Survey and the opinions of market
participants.
It is estimated that the exposure time necessary for

the subject to have achieved the opinion of value is 9-
12 months.
Definition of Value, Property Rights Appraised, and Intended Use
Purpose of the Appraisal:

The purpose of an appraisal is the stated reason and scope of the appraisal assignment. It
is established by the client, and points to the information that the client needs to answer
specific questions pertaining to real property. The purpose of the appraisal establishes
the foundation for the final value conclusion, which does not change to accommodate the
use of the appraisal.1
The purpose of the appraisal analysis was to develop an opinion of the current market
value of the subject multi-family property 'As Is’, as of the date of inspection,
December 13, 2019.
Intended Use of the Appraisal and Intended User:

The intended use of an appraisal is the manner in which a client will employ the
information contained in the appraisal report. The intended use or function of an
appraisal is determined by the client’s needs. Because an appraisal may provide a basis
for a decision concerning real property, the intended use of the appraisal depends on the
decision that the client wishes to make.2
The intended use of this appraisal is for internal decision making by the Client,
Northwest Florida State College Foundation. The intended user of this report is
Northwest Florida State College Foundation only.
Property Rights Appraised

Real property is said to have value as a result of the ‘bundle of rights' that are inherent to
property ownership. Regardless of the type of ownership, the owner of real property is
said to have an interest in that property. The following definitions are for the three most
commonly valuated interests as defined by the Dictionary of Real Estate Appraisal,
Fourth Edition.
Fee Simple Interest:

Absolute ownership unencumbered by any other interest or estate, subject only to the
limitations imposed by the governmental powers of taxation, eminent domain, police
power, and escheat.
Leased Fee Interest:

An ownership interest held by a landlord with the rights of use and occupancy conveyed
by lease to others. The rights of the lessor (the leased fee owner) and the lessee are
specified by contract terms contained within the lease.
1
The Appraisal of Real Estate, Fourteenth Edition
2
Leasehold Interest:
The interest held by the lessee (the tenant or renter) through a lease transferring the rights
of use and occupancy for a stated term under certain conditions. See also negative
leasehold; positive leasehold.
The subject property is being appraised in fee simple, subject to typical residential lease
agreements (typically one year or less) as is standard in the residential rental market
over the College Courtyard Apartments. The Raider Housing units are provided as a
benefit to students at the discretion of the education facility and are not subject to lease
agreements. Therefore, fee simple basis is considered to be the appropriate valuation
standard.
Date of Value Opinion

Value opinions are presented as of a specific date, December 13, 2019 (effective date)
‘As Is’, taking into account market conditions at that time. The effective date of an
appraisal is the date at which the analyses, opinions, and advice in an appraisal, review,
or consulting service apply. (USPAP, 2020-2021 edition.)
The date of the value opinion can be current, in the past (retrospective), or forecast into
the future (prospective).
The following presents definitions regarding the date of the opinion of value, as provided
by the text The Appraisal of Real Estate, Fourteenth Edition:
Date of Value Opinion:

The date for which an opinion of value is valid.
Current Value:
In accounting, synonymous with market value.
Retrospective Value Opinion:

An opinion of value that is likely to have applied as of a specified historic date. A
retrospective value opinion is most frequently sought in connection with
appraisals for estate tax, condemnation, inheritance tax, and similar purposes.
Prospective Value Opinion:

A forecast of the value expected at a specified future date. A prospective value
opinion is most frequently sought in connection with real estate projects that are
proposed, under construction, or under conversion to a new use, or those that have
not achieved sellout or a stabilized level of long-term occupancy at the time the
appraisal report is written.
In a prospective appraisal, the appraiser analyzes market trends to provide support

for forecasted income and expense or sell-out opinions, absorption periods,
capitalization rates, and discount rates as of the effective date of the appraisal.
This appraisal report was prepared taking into account market conditions present
as of the date of the report. The appraiser(s) cannot be held responsible for
unforeseen events that alter market conditions prior to the effective date of the
appraisal.
The following graph presents a graphical depiction of the above-described date of

value opinions and their associated position within a potential overall
development time scenario.
Value Creation Continuum1
The preceding exhibit graphically displays the creation of value in a real estate
development project over time, assuming a zero-inflation environment for clarity
of presentation.
1
Code of Federal Regulations, Title 12, as amended by the Federal Home Loan Bank Board.
Basis of the Subject Value Opinion

The four-time differential values on the preceding graph which may be considered in the
appraisal of proposed developments are defined as follows:
(1) ‘As Is’ means an estimate of the market value of a property in the condition
observed upon inspection and as it physically and legally exists without
hypothetical conditions, assumptions, or qualifications as of the date of appraisal.
(2) ‘Value as Complete’ or ‘Value Upon Completion’ means the market value of
a property with all proposed construction, conversion, or rehabilitation
hypothetically completed, or under other specified hypothetical conditions as of the
date of appraisal. With regard to properties wherein anticipated market conditions
indicate that stabilized occupancy is not likely as of the date of completion, this
estimate of value shall reflect the market value of the property as if complete and
prepared for occupancy by tenants.
(3) ‘Prospective Future Value Upon Completion’ means the prospective future
value of a property on the date that construction is completed, based upon market
conditions forecast to exist as of that completion date.
(4) ‘Prospective Future Value Upon Achievement of Stabilized Occupancy’

means the prospective future value of a property at a point in time when all
improvements have been physically constructed and the property has been leased
to its optimum level of long-term occupancy.
The purpose of the appraisal analysis was to develop an opinion of the Current Market
Value of the Fee Simple interest in the subject property 'As Is’, as of the effective date,
December 13, 2019.
The following are the pertinent dates to the valuation, viewing, and appraisal reporting of
the subject property:
Effective Date of Value Opinion: December 13, 2019
Date of Viewing: December 13, 2019
Date of Appraisal Report: January 10, 2020
Date of Photographs: December 13, 2019

Definition of Value
The definition of ‘Market Value’, as defined by the Office of the Comptroller of
Currency (OCC) under 12 CFR, Part 34, Subpart C-Appraisals, 34.42 Definitions, the
Board of Governors of the Federal Reserve System (FRS) and the Federal Deposit
Insurance Corporation in compliance with Title XI of FIRREA, as well as by the
Uniform Standards of Appraisal Practice as promulgated by the Appraisal Foundation, is
as follows.
Market value means 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 and knowledgeably, and assuming the
price is not affected by undue stimulus. 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 acting in what
they consider their own best interest;
3. A reasonable time is allowed for exposure in the open market;
4. Payment is made in terms of cash in U.S. 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.
Policy Statement of the Appraisal Institute

It is improper to base a conclusion or opinion of value upon the premise the racial, ethnic,
or religious homogeneity of the inhabitants of an area or of a property is necessary for
maximum value.
Racial, religious, and ethnic factors are deemed unreliable predictors of value trends or
price variance.
It is improper to base a conclusion or opinion of value, or a conclusion with respect to

neighborhood trends, upon stereotyped, biased presumptions relating to the effective age
or remaining life of the property being appraised or the life expectancy of the
neighborhood in which it is located.
FACTUAL DESCRIPTIONS
Property Description
Summary of Site Characteristics and Improvements

SITE
Information Sources: Deed, assessment records, site plan, Okaloosa County Property
Appraiser, City of Niceville, Client-provided income and
expense data, and appraiser inspection.
Total Site Size: 4.84 acres
Usable Site Size: 4.84 acres
Excess Land: 0.00 acres
Corner Lot: The subject property is a corner lot. It is located at the

southwest corner of the intersection of College Boulevard, a
secondary commercial roadway in the Niceville area, and
Garden Lane, a residential roadway.
Visibility: The subject has visibility from both College Boulevard and
Garden Lane, which is considered average for the market.
Shape: The subject land area is rectangular in shape and features

average overall utility. The reader is referred to the aerial of
the subject site located in the exhibits section of this report for
overview of the site shape.
Road Frontage/Access: The subject site features approximately 250’ at the north
boundary along College Boulevard and approximately 400’
along the east boundary along Garden Lane per site plan. The
site is accessible from one point of asphalt paved ingress /
egress from Garden Lane.
Topography: The subject property appears level and is depicted as 0 to 5%

slopes in the Soil Survey. Although a topographic survey was
not provided for our review, review of topographic maps of the
general area as well as the viewing of the subject property
indicates that the subject site is generally level and poses no
atypical challenges for development.
Drainage: Drainage appears adequate for the subject property. Drainage

on the subject site is currently achieved by natural run-off and
storm water drainage infrastructure. The subject property is
considered typical with regard to other existing, older multi-
family properties in the subject market area and is one of many

that have these characteristics.
Soils: The soil survey produced by the United States Department of

Agriculture Soil Conservation Service, indicates that 100% of
the subject property is comprised of Lakeland Sand, 0 to 5%
slopes. Lakeland Sand is described by this source as
excessively drained, with no frequency of flooding or ponding.
This soil type is typical of the surrounding area. Existing

development within the surrounding area, as well as within the
subject development, indicates that this soil type does not
present unreasonable limitations to typical multi-family
residential development.
Wetlands: Per Okaloosa County GIS Mapping, the subject property is

comprised entirely of uplands area, with no wetlands present.
Potential for The appraisers have not observed, nor are qualified to detect,
Environmental the existence of potentially hazardous material or underground
Contamination: storage tanks which may be present on or near the subject site.
The appraisers recommend that an environmental survey be
attained to assure the environmental stability of the subject
property. This appraisal assumes no subsoil contamination of
the subject site.
Utilities: Electricity: Electricity is on site.
Sewer: Municipal Sewer is on site.
Water: Municipal Water is on site.
Natural Gas: Natural Gas is on site.
Underground Utilities: None.
Adequacy: Utility service is considered adequate for the subject

improvements and is at least standard for the subject market
area.
Site Improvements: Site improvements on the subject property consist of asphalt

paved parking, paved ingress/egress, concrete paved dumpster
pads, site lighting and landscaping.
Landscaping: Landscaping consists of mature trees and shrubbery and is

considered average for the subject market area.
Site Utility: The subject site is rectangular in shape and exhibits

topographical characteristics that are typical of the market,
indicating overall average site utility, access and frontage.
Flood Zone: The subject is located in an area mapped by the Federal

Emergency Management Agency (FEMA). The subject property
appears to be located entirely in Flood Zone ‘X’ as noted by the
following:
FEMA Map Number: 12091C0390H, dated December 6, 2002.
Easements: We were provided a copy of a boundary survey site plan of the

subject property. Our review of the boundary survey, as well as
the appropriate maps, and public records for the subject property
revealed two easements, as recorded by Okaloosa County Clerk
of Courts. Central Telephone Company of Florida has a 250'
easement in place along the north boundary and 585' along the
west boundary, as recorded in ORB/PG 1191/652. S. E. Streets
holds a 12' wide ingress/egress easement along the southwest
boundary at a distance of 53.25', as recorded in ORB/PG
1212/763. In consideration of the property and the physical
location, this type of easement would not adversely affect the
value opinion of the subject contained herein.
This appraisal assumes no other easements, encroachments, or

private deed restrictions which would adversely affect the value
of the subject property.
Encroachments: We were provided a copy of a boundary survey and site plan for
the subject property. Our review of these documents, as well as
the appropriate maps, and public records for the subject property
did not reveal any encroachments on the subject site. Our
personal viewing of the site did not indicate any encroachments
that would adversely affect the value opinion of the subject
contained herein.
This appraisal assumes no easements, encroachments, or private

deed restrictions which would adversely affect the value of the
subject property.
IMPROVEMENTS
Building Type: Buildings #1-4 - Four 2.0 Story Multi-Family Quadplex
buildings
Building #5 - General Commercial Building

Buildings #6-9 - Four 2.0 Story Multi-Family Quadplex

buildings
Construction: Buildings #1-4 – Vinyl Siding over Wood and Concrete

Frame on Concrete Slab
Building #5-9 - Vinyl Siding over Wood and Concrete Frame

on Concrete Slab
Quality: Average
Year Built: Blended Actual 1996 / Blended Effective 2000
Actual Dates of Construction Range from 1984 to 2007.

Blended Effective year built estimate of 2000 represents a
weighted average based on size of improvements and
associated effective year built.
It is our understanding that routine maintenance has been

performed on an ongoing basis, thereby extending the
economic lifespan of the building improvements. The
estimate of effective age takes into account both the Marshall
Swift depreciation matrix, as well as the age/life method.
Architectural Style: Buildings #1-4 - Traditional Garden Apartments, Class C,

Average
Building #5 - General Commercial Building, Class D,

Average
Buildings #6-9 - Traditional Garden Apartments, Class D,

Average
Building classes above are based on Marshall Valuation

Service Construction categories.
Condition: Average, Evidence of Sufficient Ongoing Maintenance
Effective Age: Blended 19 years (as of the effective date of this appraisal)
The subject property as a whole has undergone routine

maintenance, as well as renovation of buildings #1-4 in
2007-08
Remaining Economic Blended 33 years (Per Marshall Swift Cost Reporting Data)
Life:
Areas & Ratios:
FOUNDATION, FRAME & EXTERIOR

Foundation: Concrete Slab
Basement/Lower
Level: None
Frame: Buildings #1-4 – Concrete Frame
Buildings #5-9 - Wood Frame
Exterior: Vinyl Siding
Roof/Cover: Asphalt Shingle over Wood Frame
Column Spacing: No Significant Interior Column Restrictions
Elevators: None. Each second floor unit is accessible by front elevation

exterior stairs.
Service / Access/ One service door at south side of office/maintenance/laundry

Overhead Doors: building
INTERIOR
Interior Finish: Average Residential Apartment Finishes including carpet and
laminate flooring. Average Kitchen Finishes and Appliances
including refrigerator, stove/range and dishwasher.
College Courtyard units include garbage disposals and

refrigerators with icemakers. Stackable washers and dryers
are included in some two bedroom units and standard
washers and dryers included in the three bedroom units.
MECHANICAL SYSTEMS
Heating: Electric Heat
Cooling: Central A/C individual system per residential unit, and for
the office / laundry / maintenance building.
Hot Water: Electric - Adequate for Subject Improvements
Electrical: Adequate for Subject Improvements
Plumbing: Adequate for Subject Improvements.
SITE IMPROVEMENTS
Parking Type and Adequate for Subject Improvements. Condition: Average
Condition of Spaces: Type: 101 asphalt paved and striped parking spaces,
including 5 ADA compliant handicap designated spaces
Additional Amenities: Coin laundry in Office Building
PROPERTY ANALYSIS
Functional Utility: Average
Design & Appeal: Average. Design, functional utility and appeal rated as
average as compared to most competing properties in the
market.
Occupancy: Per the current rent roll provided by the Client, all 30 of the
College Courtyard Apartment units are currently occupied.
The 32 Raider Housing are occupied by student athletes on a
seasonal school year basis.
Regional / Neighborhood Aerial Maps

Aerial Photographs
Boundaries of Subject Site Outlined in Red

FEMA Flood Map
Approximate Boundaries of Subject Site Outlined in Red

Flood Zone Descriptions
“A 100-year flood is a flood that has a 1-percent chance of being equaled or exceeded in
any given year. A base flood may also be referred to as a 100-year storm and the area
inundated during the base flood is sometimes called the 100-year flood plain.
The term "100-year flood" is misleading. It is not the flood that will occur once every 100
years. Rather, it is the flood elevation that has a 1- percent chance of being equaled or
exceeded each year. Thus, the 100-year flood could occur more than once in a relatively
short period of time. The 100-year flood, which is the standard used by most Federal and
state agencies, is used by the National Flood Insurance Program (NFIP) as the standard
for floodplain management and to determine the need for flood insurance. A structure
located within a special flood hazard area shown on an NFIP map has a 26 percent
chance of suffering flood damage during the term of a 30-year mortgage.
Zone AE and A1-A30

Zones AE and A1-A30 are the flood insurance rate zones that correspond
to the 100-year floodplains that are determined in the Flood Insurance
Study by detailed methods. In most instances, Base Flood Elevations
derived from the detailed hydraulic analyses are shown at selected
intervals within this zone. Mandatory flood insurance purchase
requirements apply.
Zone VE
Zone VE is the flood insurance rate zone that corresponds to the 100-year
coastal floodplains that have additional hazards associated with storm
waves. BFEs derived from the detailed hydraulic analyses are shown at
selected intervals within this zone. Mandatory flood insurance purchase
requirements apply.
Zones B, C, and X are the flood insurance rate zones that correspond to
areas outside the 100-year floodplains, areas of 100-year sheet flow
flooding where average depths are less than 1 foot, areas of 100-year
stream flooding where the contributing drainage area is less than 1
square mile, or areas protected from the 100-year flood by levees. No
BFEs or depths are shown within this zone.”
Subject Photographs
View of typical Raider Housing Building and Site Improvements
Front View of College Apartments Rental Housing

Additional View of College Apartments Rental Housing
View of Laundry/Office/Maintenance Building

View of Amenities
Additional View of Amenities

Kitchen Interior – Finishes and Appliances Typical of All Units
Additional Example of Typical Kitchen Interior

Living Room Interior – Finishes Typical of all Units
Additional Example of Typical Living Room

Typical Stackable Washer/Dryer Unit
Example of Typical Bedroom Finishes


Unit Full Bathroom – Finishes Typical of All Units
Additional Example of Typical Bathroom Interior

View of College Apartment Buildings

from College Boulevard East, Facing South
View Facing East along College Boulevard East, Subject on Right

View Facing West along College Boulevard East, Subject on Left
College Apartments - View of Rear / East Elevations

from Garden Lane, Facing North
College Apartments Site Plan Inset

Raider Housing Survey Inset

College Courtyard Floor Plans

Zoning Description
The subject property is zoned R-3, Multi-Family Residential District by the City of
Niceville.
The R-3 district is a cumulative zoning district established to provide locations for
multiple family dwelling units and mobile home parks. Any use permitted within the R-2
(one and multiple family dwelling district) is also permitted. Permissible uses include
multiple family dwellings up to 15 dwelling units per acre, including apartment buildings,
boarding houses and tourist homes.
Allowable non-residential uses include hospitals, professional offices for medical and
dental clinics, attorneys, engineers & architects, nursing and convalescent homes, nursery
schools, child care centers and churches.
Based on the allowable density of 15 dwelling units per acre, the subject 4.84 acre site
‘As If Vacant’ would allow a maximum of 72 units. The subject property consists of 62
residential attached units, therefore the property is within the allowable density per
zoning.
Thus, use of the subject property as a multi-family residential property appears to be a

legally conforming use of the subject property ‘As Is’.
An excerpt of the code of ordinances as pertains to the subject zoning designation is

located in the addenda of this report for the reader’s review.
Zoning Map
Subject Parcels Outlined in Red

Assessment and Taxes
Tax Structure, Overview

Florida Law requires that the just value of all property be determined each year. The
Supreme Court of Florida has declared ‘just value’ to be legally synonymous to ‘full cash
value’ and ‘fair market value.’ The fair market value of real property is the amount for
which it could sell on the open market, and assumes the present use is the highest and
best use. The property appraiser analyzes these market transactions annually to determine
fair market value as of January 1 of each year.
The property appraiser is responsible for identifying, locating, and fairly valuing all
property, both real and personal, within the county for tax purposes. The ‘market’ value
of real property is based on the current real estate market, and is determined by market
participants. The property appraiser has the legal responsibility to study the transactions
of market participants and appraise real property accordingly.
At least once every three years, the county property appraiser or a staff appraiser will
visit and inspect each property. Additionally, individual property values may be
adjusted between visits in light of sales activity or other factors affecting real estate
values in the subject neighborhood. Sales of similar properties are typically used as
strong indicators of value in the real estate market.
Each August, the Property Appraiser sends a "Notice of Proposed Taxes," to all property
owners to notify them of the taxable value of their property. Taxable value is the
assessed value less any exemptions. The TRIM notice also gives information on
proposed millage rates and taxes as estimated by community taxing authorities, and when
and where these taxing authorities will hold public meetings to discuss tentative budgets
to set your millage tax rates.
The property appraiser only assesses all property in the county and is neither a taxing
authority nor a tax collector. Three separate government entities, each having unique and
distinct roles, determine the tax bill of any property in their jurisdiction.
The following is a summary of the process:
First the property appraiser annually appraises all property in their respective
county at the market value as of January 1 each year.
Second, each taxing authority within the county sets their own millage rate based
on the amount of tax dollars necessary to fund their annual budget.
Finally, the tax collector takes the amount of taxes due in order to bill and collect
all taxes levied within the county.
Tax Collector Bills

ANALYSIS OF DATA AND OPINIONS

OF THE APPRAISER
Market Area Summary
Overview
Okaloosa County, FL
Location:
Okaloosa County is located in the Florida panhandle west of Walton County and east of
Santa Rosa County. It contains an area of approximately 936 square miles, or 5100,000
acres, of which 267,000 acres (45%) are held by the federal government and 61,000 acres
(10%) are held by the State of Florida. As depicted by the darker beige color on the
above map, a large proportion of the land area of Okaloosa County is encompassed by
Eglin Air Force Base.
This large military–controlled land area essentially bisects Okaloosa County into two
sections; the southern section is comprised of the greater Fort Walton Beach area, and the
cities of Niceville and Destin, while the northern section is comprised of the city of
Crestview and surrounding areas. In general, development in the southern end of the
county is of a higher density than in the northern part of the county, where the abundance
of land allows for lower densities. The county seat is Crestview.
Geography
Elevations range from sea level to 235 feet above sea level. According to the U.S.
Census Bureau, the county has a total area of 2,802 km² (1,082 mi²). 2,423 km² (936 mi²)
of it is land and 379 km² (146 mi²) of it (13.53%) is water. Fort Walton Beach and two
United States Air Force bases (Eglin AFB and Hurlburt Field) are located in the south.
Okaloosa County is the sole county in the Fort Walton Beach-Crestview-Destin
Metropolitan Statistical Area.
History
Okaloosa County was created in 1915. It took the Legislature several years to approve
the creation of Okaloosa County from parts of Santa Rosa and Walton Counties. On
September 7, 1915 the issue was settled. Credit was given to state representative, W.H.
Mapoles from Laurel Hill, later known as the ‘Daddy of Okaloosa County.’ Milligan was
made the temporary county seat and on March 6, 1917 a county election made Crestview
the permanent county seat. Crestview was named because it is located on the crest of a
high ridge on the forks of the Shoal and Yellow Rivers. The 1920 census of the county
gave a county population of 9,360 persons. Okaloosa reaches from the Alabama state
line to the Gulf of Mexico. The county was formed by taking 12 miles in width from
Santa Rosa and Walton counties and is 24 miles wide and 40 miles long and contains 998
square miles.3
Prior to World War II the county was oriented around rural endeavors. Timber, farming,
and isolated fishing camps were the main economic forces (excluding Prohibition era
stills, alcohol import, and carry-over gambling). The varied exigencies of the war
resulted in the federal forests being consumed by military needs and expanded. This has
continued to the present, and spawned the initial growth and development of the southern
portion of the county. Today, the south part of the county is a mosaic of military land,
unincorporated communities and incorporated entities. Most of the growth in Okaloosa
County has been in the southeastern end of the county along the beaches and in
Crestview in the north end. Areas such as Fort Walton Beach have very little vacant land
available for development.
3
Wikipedia, Okaloosa County, http://en.wikipedia.org/wiki/Okaloosa_County,_Florida#History
SOCIAL FORCES
Annual Growth Rates 2017-2022
Population Increases 2010-2022
In 2010, the Census count in Okaloosa County was 180,822. Currently there are an
estimated 198,210 persons in Okaloosa County, indicating a 1.27% annual increase. The
five-year projection is 212,703 persons, or a projected increase of 1.42% annually. 4
4
www.STDB.com
Based on age, the largest percentage of a single age group is 5-19 years, for 2017 (17.4%)
followed by 65 and over (16.8%). The 2022 projection estimates indicate that the largest
age group will be 65 and over (18.9%) followed by those ages 25-34 years old (14.2%).
The median age for Okaloosa County is 39.2 compared to the United States as a whole of
38.2.
Households 2010-2022
The household count in this area has changed from 72,379 in 2010 to 78,913 in the
current year (2017), a change of 1.20% annually. The five year projection of households
is 84,419, a change of 1.36% annually from the current year (2017) total.
Average household size is currently 2.46, compared to 2.43 in the year 2010. The
number of families in 2017 is 52,484 in the specified area.
Household Income 2017-2022

Current (2017) median household income for Okaloosa County is $55,858, compared to
$56,124 for all U.S. households. The 2022 projection is expected to be $62,528 compared
to $62,316 for all U.S. households. The current (2017) average household income for
Okaloosa County is $77,747, compared to $80,675 for all U.S. households. The 2022
projection is expected to be $88,207, compared to $91,585 for all U.S. households.
Current per capita income is $31,602 in the area, compared to the U.S. per capita income
of $30,820. The per capita income is projected to be $35,613 in five years, compared to
$34,828 for all U.S. households.
Housing 2000-2022
Currently (2017), 47.5% of the 100,850 housing units in the area are owner occupied;
30.80%, renter occupied; and 21.8% are vacant. In the U.S., 55.6% of the housing units
are owner occupied; 33.1% are renter occupied; and 11.3% are vacant.
Home Value 2017-2022
The 2017 median home value in Okaloosa County is $209,515, compared to a median
home value of $207,344 or the U.S. The 2022 median value is projected to change by
5.32% annually to $271,539.
ECONOMIC FORCES
Employment 2017
Overall the unemployment rate for Okaloosa County as of October 2017 is reported as
2.7%. The graph below shows the overall downward trend for Unemployment Claims in
Okaloosa County.5
2017 employement fields (%)
The bulk of employers in Okaloosa County are in service related fields, which include
6
hotel and lodging, health service and automotive service related fields.
5
www.fred.stlouisfed.org
6
http://www.santarosaedo.com
Business Expansion and New Development 2017

The main commercial corridors for Okaloosa County are Highway 90 (east to west)
through Crestview, Highway 85 (north to south) from Highway 90 south to Duke Field
Air Force Base and Highway 85 (north to south) south of Duke Field into Niceville, and
all the areas along Highway 98 (east to west) along the beaches. Much new and
expanding commercial development is taking place in the form of retail and service jobs,
especially in the areas along the beaches.
A November 2017 article in the Northwest Florida Daily News7 describes a 52 acre
mixed use parcel at 1900 Lewis Turner Boulevard currently going through the approval
process with the City Council of Ft. Walton Beach. The project’s rendering, known as
“Freedom Beacon Park” depicts about 300 multi-family units, a 102-room hotel, 55,000
SF of retail/commercial space, 160,000 SF of office space and a 4-acre central commons
area. The site is located on an acreage parcel leased from Eglin Air Force Base on a 50-
year ground lease.
New developments8 in the Destin, Florida area include “1900-Ninety-Eight,” a luxury 16-
unit condo complex constructed in 2017 on Scenic Highway 98 in Destin, and a Whole
Foods grocery store added in 2016 to Destin Commons. Landmark Center developed and
opened a 112 room Hilton hotel called Hilton Garden Inns in 2017, which also contains
commercial and recreational spaces, as well as 24 loft -style apartments at 223 Miracle
Strip Parkway in Ft. Walton Beach, Florida. The Jay Odom Group9 has constructed an
80,000 SF, multi-story Class A office and retail building known as JG Plaza in Ft. Walton
Beach and added many national franchises to their recently acquired and renovated
255,000 SF Uptown Station Shopping Center of Ft. Walton Beach in 2016 and 2017,
including a Starbucks, Zaxby’s and Baskin Robbins as built-to-suit outparcels.
The uses in North Okaloosa County are primarily residential with a trend toward large
homesteads with farming and agricultural use. Additionally, much of North Okaloosa
County is within the boundary of the Blackwater River State Forest, as area set aside for
recreation and conservation, where development will not be occurring.
GOVERNMENTAL FORCES
Public Services
Okaloosa County and the smaller municipalities within the County have all necessary
public services including local fire departments, local police and County sheriff
departments and local utility providers. Power, telephone, and internet are available.
Utilities available include a range of services including water, sewer, natural gas,
recycling stations and sanitation pick up. Local providers include Okaloosa Gas,
Okaloosa County Water and Sewer, Niceville Water, Crestview Water, South Walton
Utilities, Choctawhatchee Electric, Destin Water and Mossyhead Water.
7
http://www.nwfdailynews.com/news/20171117/major-development-proposed-for-fwb
8
http://nathanabbottteam.com/2016-new-construction-development-along-the-emerald-coast/
9
http://www.thejayodomgroup.com/commercial-development/
Governance and Zoning

The County Administrator is the chief administrative officer for the County. Okaloosa
County is governed by five elected County Commissioners and houses a County Jail in
Crestview. The Planning and Zoning Department of Okaloosa County govern
commercial and residential development for the County. Commercial development is
contained primarily to the major arterial roadways and thoroughfares that cross Okaloosa
County. Axially off these roadways, we see secondary commercial uses and residential
developments. The towns and cities of Cinco Bayou, Crestview, Destin, Ft. Walton
Beach, Laurel Hill, Mary Esther, Niceville, Shalimar, and Valparaiso each have their own
zoning codes which are enforced locally by town and city officials.
Homestead Exemption Laws

The entire state of Florida, inclusive of Okaloosa County, offers residents a homestead
exemption up to $50,000 for their primary residence. A $25,000 exemption is allowed
for all property taxes includes school taxes and an additional $25,000 is available for
homes assessed of from $50,000 to $75,000 which is applicable for non-school taxes.10
ENVIRONMENTAL FORCES
Climate
As previously mentioned, Crestview is the County Seat of Okaloosa County and is
representative of the County. The illustration below shows the annual average
temperature of climate conditions in Crestview are generally mild and warm with
temperatures ranging from an average overnight low in January of 37 degrees to 92
degrees in July11. Average rainfall ranges from a low of 3.90” in October to a high in the
month of July when the average rainfall is about 7.17”.
10
http://floridarevenue.com
11
www.usclimatedata.com
Transportation Systems
Okaloosa County is traversed by Interstate 10 which runs east to west. State Highways
include Highway 4, Highway 90, Highway 98 (east / west) as well as Highway 85 (north
/ south).
Airports in Okaloosa County include Destin-Fort Walton Beach Airport and Bob Sikes
Airport. There are no train stops in Okaloosa County, although there is discussion of
reinstating Amtrak train service, which had a stop in Crestview before Hurricane Katrina
interrupted service in 2005.
Navigable waterways in Okaloosa County including Choctawhatchee Bay and Santa

Rosa Sound along the south. Bayous include Rocky Bayou, Tom’s Bayou and Boggy
Bayou along with numerous smaller bayous and inlets suitable for watercraft and
recreation. The primary rivers are Yellow River and Juniper Creek, which run from the
Alabama State Line south to the Gulf of Mexico as well as a multitude of smaller creeks
and streams which cross Okaloosa County.
Immediate Area
Like most coastal counties in the panhandle of Florida, Okaloosa County development is
driven by tourism and its proximity to military bases. Tourist attractions are limited to
the beaches of Destin and Ft. Walton Beach along the Gulf of Mexico. Military
installations in Okaloosa County include Hulbert Field, Eglin Air Force Base and Duke
Field.
Summary of Projected Trends 2017-2022
In summary, it appears that Okaloosa County is ahead of the rest of the state of Florida
for projected growth in Population, Households, Families, and Owner Housing Units.
The following data extracted from the CCIM Site to Do Business outlines the projected
and present demographics and market area information for the 1-3-5 mile rings from
the subject location.
Highest and Best Use
The definition of ‘highest and best use’ is presented unabridged in the definitions section
of this report. However, in brief, highest and best use refers to the reasonably probable
and legal use of vacant land or an improved property, which is legally permissible,
physically possible, appropriately supported, financially feasible, and that results in the
highest value, i.e. maximally productive.12
Objective analysis and interpretation of market data leads to an informed opinion of that
use. However, the estimate of highest and best use should not be interpreted as a
provable fact. A typical highest and best analysis evaluation process and pertinent
questions which aid in the elimination of possible alternatives are presented below.
1. Permissible Use. What uses are permitted by zoning and other legal restrictions?
What are the land use controls that will govern the site? Uses that are legally
permissible are those allowed under current or likely zoning and those that could
meet building codes. In addition, local communities may have restrictions on
public utility loads, traffic creation, access restrictions, and so on, all of which
must be considered when selecting legally permissible uses
2. Physically Possible Use. To what use is the site physically adaptable? What is an
appropriate improvement given architectural / engineer study? Unless prohibited
by soil or subsoil problems or land size constraints, it is physically possible to
place most potential improvements on the site. Usually this test, if performed first
or second, will not significantly reduce the number of potential uses.
3. Feasible Use. Which possible and permissible use will produce any net return to
the owner of the site? Should the land be developed, and if so, what kind of
improvement should be built? If an improvement should be constructed, what is
the type and characteristics of an ideal improvement?
Uses that are considered economically or financially feasible are those that
potentially would logically produce net operating income and net resale price
levels high enough to adequately support construction of the potential
improvement and provide the investor with a reasonable profit. Implicit to this
analysis is that riskier projects require higher profit levels to induce potential
developers to undertake the burden of coordination of land, labor and capital.
4. Maximally Productive Use. The final test is to determine of the financially

feasible options, which of these would result in the highest land value or values as
improved. Among the feasible uses which use will produce the highest net return,
12
(i.e., the highest present worth)? If there are existing improvements on the
property should they be maintained in their current state or should they be altered
to more closely resemble the ideal improvement?
Although these criteria are generally evaluated sequentially, the resulting conclusion of
highest and best use should be identical regardless of the order of application of the
above tests.
Implied within this definition is that the estimation of the highest and best use for a
particular property results from the appraisers' judgment and analytical skill with respect
to the market for that particular property.
However, the highest and best use of a specific parcel of land is not just a matter of
subjective opinion; rather, highest and best use is indicated by supply and demand forces
within the market where the property is located, availability of capital, supply of
alternative investments, need for additional products or services within a community, and
other factors.
Highest and Best Use ‘As If Vacant’
The highest and best use ‘As If Vacant’ recognizes among all reasonable, alternative
uses, the use that yields the highest present land value after payments are made for labor,
capital, and entrepreneurial coordination.13
We have evaluated the most probable uses for the subject parcel, ‘As If Vacant’ given the
current market for residential medium density land and recent development activity in the
subject market area.
Legally Permissible
The subject property is zoned R-3, Multi-Family Residential Zoning District by the City
of Niceville. Allowable non-residential uses include hospitals, professional offices for
medical & dental clinics, attorneys, engineers & architects, nursing and convalescent
homes, nursery schools and child care centers, churches.
The maximum allowable density by current zoning is 15 dwelling units per acre allowing
a maximum of 72 dwelling units on the subject 4.84 acre site ‘As If Vacant’ (4.84 acres x
15 allowable units per acre = 72.6).
We are unaware of any private deed restrictions which would further limit use of the
subject parcel(s) beyond those uses restricted by the current zoning designation.
Thus, use of the subject property for a variety multi-family residential and commercial
development is considered legally permissible.
Physically Possible
The subject property is essentially level, well drained, and at road grade. Soil and subsoil
conditions nearby appear compatible with residential commercial development. All
utilities required for commercial and residential use are presently at the site.
The size and dimensions of the site are sufficient to allow a wide variety of legally
permissible uses. The shape of the site is rectangular and the dimensions are adequate to
support commercial/residential development and the shape does not limit utility.
Transportation of construction materials or labor to the site is estimated to be relatively
simple due to the central location of the site within the overall market. Access and
visibility to the site is good from College Boulevard.
Therefore, all legal uses are physically possible to some extent.
13
Financially Feasible
Multifamily residential development is legally permissible and physically possible for the
subject site, and the proximity of the state college makes complementary uses in support
of this institution the most likely use of the subject property.
This characteristic of the subject combined with the subject’s location on a secondary
arterial roadway in an area of surrounding predominantly residential improvements
provides an inherent market for multifamily residential development, as this would be a
complimentary transitional use in support of neighboring properties. Market conditions
are stable in the subject market area.
Therefore, it is the opinion of the appraiser that the most financially feasible use of the
subject property ‘As if Vacant’ is for medium density residential development to a
configuration which utilizes the site to its maximum potential.
Maximally Productive
Considering the legally permissible, physically possible, and financially feasible uses for
the subject site, we consider multi-family development on the subject 4.84 acre site to be
the maximally productive use of the land.
CONCLUSION OF HIGHEST AND BEST USE, ‘AS IF VACANT’

Multi-family development is considered to be the highest and best use of the subject site
‘As If Vacant’ as this use provides a higher return to the underlying land than any
other use analyzed.
Highest and Best Use ‘As Is’
The Dictionary of Real Estate Appraisal, Fourth Edition defines the highest and best use
‘As Is’ is the use that should be made of a property as it exists. An existing improvement
should be renovated or retained as is so long as it continues to contribute to the total
market value of the property, or until the return from a new improvement would more
than offset the cost of demolishing the existing building and constructing a new one.
The existing improvement should be compared to the ideal improvement as developed in

the analysis of the highest and best use ‘As If Vacant’, and the differences analyzed to
determine the depreciation suffered by the existing improvements. The ideal
improvement should a) take maximum advantage of the site’s potential given market
demand; b) conform to current market standards and the character of the market area; c)
contain the most suitably priced components.14
Legally Permissible
The subject property is zoned R-3, Multi-Family Residential Zoning District by the City
of Niceville. Allowable non-residential uses include hospitals, professional offices for
medical & dental clinics, attorneys, engineers & architects, nursing and convalescent
homes, nursery schools and child care centers, churches.
The maximum allowable density by current zoning is 15 dwelling units per acre allowing
a maximum of 72 dwelling units on the subject 4.84 acre site ‘As If Vacant’
(4.84x15=72.6); therefore, the subject 62 units are within the allowable threshold.
We are unaware of any private deed restrictions which would further limit use of the
subject parcel(s) beyond those uses restricted by the current zoning designation.
Thus, use of the subject property as a multi-family property appears to be a legally

permissible use of the subject property ‘As Is’.
Physically Possible
The subject improvements consist of eight multi-family apartment buildings which house
62 residential units, plus one additional support structure: an office with coin-operated
laundry facility/office/maintenance building. All utilities required for multifamily use are
on site. The property features surface parking sufficient for the current use. All
improvements are adequately situated on the site and, thus, are considered to be
physically possible.
Thus, continued use of the subject in the current configuration as a multi-family property
is physically possible 'As Is', with ongoing maintenance and updating of the residential
units as necessary.
14
Financially Feasible
Demand for multi-family improvements in the market area is considered to be stable to
appreciating, with the potential for increased financial return as market conditions are
anticipated to improve alongside improvement in the residential and commercial sectors
of the market.
According to the rent roll provided by the Client, approximately 100% of the rental
housing was occupied in October 2019 and the student athlete housing is typically
occupied on a seasonal/school year basis providing definitive evidence of the financial
feasibility of the subject ‘As Is’ at this location for residential rental use.
Overall occupancy in the market for apartments is good, and population and job growth
in the area is anticipated to create stable demand for such properties in the future. As
such, continued use of the improvements as an apartment complex is deemed financially
feasible.
The value opinion derived from the Sales Comparison and Income approaches to value
each indicate that the existing building improvements 'As Is' contribute significant value
to the underlying land, and the return on investment at the appraised value meets the
threshold for financial feasibility for income-generating investment property.
Therefore, continued use of the subject as a multi-family property for third party tenant
occupancy is deemed financially feasible 'As Is'.
Maximally Productive
The alternatives of addition, demolition, expansion, modernization, or conversion to
alternate uses have been considered within the legal, physical, and financially feasible
parameters. Several alternatives exist, but the alternative of continuing to utilize the
present improvements with continued preventative maintenance is considered to be the
most appropriate option.
Alternatives for use of improvements:

Expansion
The improvements consist of 62 residential units housed in 8 two-story quadplex
buildings, and requisite site improvements. The site is 4.84 acres in size, and
indicates a land to building ratio of 4.21. Current zoning allows for a maximum
density of 15 dwelling units per acre, which equates to 72 units on the subject site.
Thus it would appear that the size of the subject site will not allow expansion
from physically possible criteria, due to the necessary increase in parking likely
with a new building and added units. Thus, expansion is not viewed as viable.
Renovation
Recent updating to the subject building improvements was performed in 2007-
2008, with additional updates in the form of exterior building paint and porch
railing repairs in 2019. Appraiser viewing of the interior and exterior of the
improvements revealed overall average condition with no items of deferred
maintenance observed at time of inspection. The interior finishes are modern in

appearance and functional. The property is 100% occupied as of the effective
date of this appraisal. Thus, extensive renovation is not considered necessary at
this time.
Downsizing
Downsizing is another option available to a potential purchaser of the subject
property. However, the subject improvements have substantial remaining
economic life and downsizing would diminish current value. We also consider
that the current occupancy of the subject is 100%, ‘As Is’, which is considered
good for the local market, and indicates that the current number of units are being
readily absorbed for occupancy by the local market. Thus, downsizing is not a
viable option for the subject property.
Subdividing
The subject buildings are specifically designed and configured on the subject site
area so as to provide for logical ingress / egress and traffic flow, as well as
adequate unit parking and grassy common areas. The residential units are 1/2/3
bedroom, 1 and 2 bathroom units, with typical kitchen appliances, and washer /
dryer hookup or washer / dryer in unit. Thus, subdividing is not considered to be
a viable option, without extensive renovation / addition of new bathrooms. This
would diminish the unit size below what is typical of the local market.
Demolition
Demolition would extinguish the existing value attributable to the improvements
as indicated in the sales comparison and income approaches to value and no other
use is considered to have the capacity to generate a return high enough to justify
new development and construction at this time.
CONCLUSION OF HIGHEST AND BEST USE ‘AS IS’

Analysis of recent trends and current market supply and demand strongly indicate the
highest and best use of the subject property, ‘As Is’ is continued use as multi-family
property for rental to third party tenants, with ongoing periodic maintenance to the
residential units as necessary.
Valuation Methodology - Overview
The appraisal analysis is based on analytical techniques that may encompass anticipation
of costs to be incurred, and benefits to be derived in the future; however, the subject is
appraised as described in this report, including only those assumptions also described in
this report.
This appraisal analysis has been conducted, and the appraisal report was prepared in
conformance with the requirements of Title XI of the Financial Institutions Reform,
Recovery, and Enforcement Act of 1989 (FIRREA).
The valuation process is a systematic procedure an appraiser follows to provide answers

to a client’s questions about real property value.1 Three basic approaches may be used to
arrive at an estimate of market value. They are:
1. The Cost Approach

2. The Income Approach
3. The Sales Comparison Approach
Land Valuation Methodology

Land Valuation is generally a component of the Cost Approach in appraisal of an
improved property. In most appraisal analyses, separate land valuation is conducted
utilizing the Sales Comparison Approach.
Cost Approach Methodology

The cost approach is a reliable methodology for new, nearly new or special-use buildings.
In the cost approach, value is estimated as the current cost of reproducing or replacing the
existing or proposed improvements and site improvements (including direct and indirect
costs as well as an appropriate entrepreneurial incentive or profit), and then deducting the
loss in value from depreciation due to physical, functional, and external sources.15
The depreciated replacement or reproduction cost of the improvements is then added to the
value of the site resulting in a value indication of the fee simple interest in the property.
The Cost Approach is summarized as follows:
Cost New
- Depreciation
+ Entrepreneurial Incentive
+ Land Value
= Value
15
Sales Comparison Approach Methodology

The sales comparison approach is premised on the ‘Principle of Substitution’ which
indicates an informed purchaser would pay no more for a property than the cost of
acquiring an equally desirable substitute property possessing the same or similar utility.
This approach is applicable when an active market provides sufficient quantities of

reliable data which can be verified from authoritative sources. The Sales Comparison
Approach is most reliable in an active market or if an opinion of value is related to
properties for which there are comparable sales available- and heavy emphasis is
generally placed on this sales comparison approach when these market conditions are
present.
The Sales Comparison Approach compares sales of similar properties with the subject
property. Each comparable sale is adjusted for its inferior or superior characteristics. The
values derived from the adjusted comparable sales form a range of value for the subject.
By process of correlation and analysis, a final indicated value is derived.
Income Approach Methodology

The Income Approach converts the anticipated flow of future benefits (income) to a
present value estimate through a capitalization and/or a discounting process.
The income approach is recognized as a reliable approach for estimating the value of
‘income producing’ property to an investor. The income approach consists of methods,
techniques, and mathematical procedures that an appraiser utilizes to analyze a property’s
capacity to generate income and convert income into an indication of present value either
by capitalizing the current income at a market capitalization rate, or discounting the
future cash flows into a present value estimate using an appropriate yield (discount) rate.
The appraisal process emulates the actions of the market, and the income approach is
most applicable when the probable buyer would be an investor or prospective owner
occupant. Two techniques associated with the income approach are direct capitalization
and discounted cash flow analysis.
Final Reconciliation Process

In the appraisal process for improved property, typically more than one approach to value
is applied, resulting in two or more value indications that must be evaluated for
relevancy, applicability and reliability, and a final point value or range of value is chosen.
Resolving the differences among various value indications is called reconciliation.16
The appraisal process concludes with the Final Reconciliation of the values derived from
the approaches applied to arrive at a single estimate or range of market value opinions.
Different properties require different means of analysis and lend themselves to one
16
approach over the others. As such, in the reconciliation appropriate weight is given to the
most applicable and/or reliable indications of value to arrive at a conclusion.
Reconciliation is not a mathematical process. Rather, at this point in the valuation

process the appraiser must reevaluate all pertinent data in the analysis for
appropriateness, accuracy, and quality of evidence.
The appraiser then weighs the relative significance, applicability, and defensibility of
each value indication and relies most heavily on the approach that is most appropriate to
the nature of the appraisal problem.
Valuation Methodology Utilized in this Assignment
Valuation Analyses
Land Valuation: An opinion of value for the subject underlying land

has not been developed in this appraisal assignment in
conjunction with non-application of the cost approach
per reasoning below.
Cost Approach: The cost approach to value has not been developed in
this appraisal assignment. In consideration of the
current actions of market participants in the local
market, as well as the actual age of the building
improvements, the Cost approach to value is not
considered necessary to the derivation of a credible
value opinion for the subject property ‘As Is’.
Omission of this approach to value is not considered to
negatively affect the credibility of the final value
opinion contained herein.
At the request of the Client, we have provided an

estimate of Insurable Replacement Cost New for the
building improvements. This data is located in the
addenda.
Improved Sales Comparison The Sales Comparison approach has been utilized in
Approach: this appraisal assignment for the subject property in
'As Is' condition. This valuation considers the Fee
Simple interest.
Income Approach: The Income approach has been utilized in this

appraisal assignment for the subject property in 'As Is'
condition, via direct capitalization method. This
valuation considers the Fee Simple interest.
Improved Sales Comparison Approach
The Sales Comparison Approach is based on the premise that a buyer would pay no more
for a specific property than the cost of obtaining a property with the same quality, utility,
and perceived benefits of ownership. Integral to the sales comparison approach are the
principals of supply and demand, balance, substitution and externalities. The following
steps describe the applied process of the Sales Comparison Approach.
• The market in which the subject property competes is investigated; comparable

sales, contracts for sale and current offerings are reviewed.
• The most pertinent data is further analyzed and the quality of the transaction is
determined.
• The most meaningful unit of value for the subject property is determined.
• Each comparable sale is analyzed and, where appropriate, adjusted to equate with
the subject property.
• The value indication of each comparable sale is analyzed and the data reconciled
for a final indication of value via the Sales Comparison Approach.
The Sales Comparison Approach was employed to derive an opinion of the of the subject
property, in ‘As Is’ condition as of December 13, 2019.
Ideally, the subject would be compared to sales of similar properties in the subject market
area which are of the same approximate size, location, utility, and quality as the subject
property. Sales were discovered which were similar to the subject property in these
respects but are not necessarily exactly identical to the subject property. Those
comparables chosen were deemed to be the best available in terms of commonly
compared property characteristics.
Typically, comparable sales are reduced to a unit of comparison. The unit of comparison
represents the unit which is consistently used in the market to derive pricing decisions.
Analysis of sales throughout the subject market area indicate many possible units of
comparison, however, the predominant unit of comparison utilized by market participants
when purchasing property similar to the subject is ‘price per residential unit’.
The unit of comparison utilized in this sales comparison analysis is ‘price per
residential unit’, inclusive of land.
Comparable Sales
The market in which the subject property competes has been investigated, and the
following three closed sales and one active listing extracted which are considered
comparable to the subject.
The table below summarizes comparables researched and considered for this analysis.
No. of Transaction
Comparable Address Date Price Price per Unit Units Type
1 86 Forsman Circle 3/9/18 $3,650,000 $43,452 84 Closed
2 166 N Fox Ave 2/23/18 $4,900,000 $68,056 72 Closed
3 211 Evans Street 2/2/18 $840,000 $84,000 10 Closed
4 27-31 Alder Ave 1/20/17 $1,660,000 $75,455 22 Closed
5 1940 Bluewater Blvd. 11/23/16 $1,400,000 $58,333 24 Closed
The above 5 closed sale comparables have been selected for detailed analysis.
These comparables; as well as, a location map which depicts the location of the subject
and all comparable sales, are documented on the following pages.
Comparable 1
Transaction and Sale Data

ID 5078 Price $3,650,000
Nam e Hurlburt Arms Apartment Conditions of Sale Normal
Sale
Date 3/9/2018 Price per Unit $43,452
Tax ID 16-2S-24-1270-0001-0000 Grantor GDN No. 1 LLC; Hurlburt
Homes, Inc.
Market Fort Walton Beach Grantee New port Square Apartments
LLC
Address 86 Forsman Circle Property Rights Fee Simple
City Ft. Walton Beach Transaction Type Closed
County Okaloosa Financing Conventional
State FL ORB/P 3340/3490
Site
Acres 4.70 Topography Level, Dry
Land SF 204,732 Zoning R-2
Road Frontage 590' +/- Forsman Cir NW Zoning Type Multi Family Residential, City
(dual); 380' Fleet St NW of Ft. w alton Beach
Shape Irregular, but Functional Flood Zone X
Utilities Typical, all available View Residential, Minor Corner
Latitude 30.420014 Longitude -86.655797
Improvements & Financial Data
GBA 81,533 No. of Buildings 16
No. of Units 84 No. of Stories 2
Year Built A 1953 / Eff.1980 Roof Type Demin shingle
Renovations Periodic Updating Parking Surface
Construction Vinyl siding over w ood Sale History None in previous 3 years
Land to Building Ratio frame
1:3.80 Verification Source Loopnet# 10906181; Public
records, Craig Barrett, LA,
NBI Properties
Notes
This is the March 2018 sale of an 84 unit apartment complex located just w est of Mary Esther Cutoff NW and south of
Anchors Street NW in Ft. Walton Beach. This property features 2 each 1 BR / 1 BA apartments, 82 each 2 BR / 1 BA
apartments. The units range in size of from 750-1,100 SF. AS of 2017, approximately 69 of the units have been
renovated, and several of the buildings have new roof coverings.
Comparable 2
Transaction
ID 5701 Price $4,900,000
Nam e Tyndall Pointe Apartment Conditions of Sale Normal
Date Sale
2/23/2018 Price per Unit $68,056
Tax ID 06479-040-000;-000-000 Grantor STSM&C Law LLC; STSM&C
Law 2 LLC
Market PCB East Grantee FKHJ Tw o LLC
Address 166 N Fox Ave Property Rights Fee Simple
City Callaw ay Transaction Type Closed
County Bay Financing Conventional
Site
Land SF 251341 Zoning R-MF
Road Frontage 675' +/- N. Fox Ave;415' +/- Zoning Type Residential-Multi Family, City
Lois St. of Callaw ay
Shape Rectangular Flood Zone X
Utilities Typical, all available View Residential, Minor Corner
GBA 79806 No. of Buildings 21
Year Built A 1984 / Eff.1990 Roof Type Asphalt Shingle over Wood
Renovations Extensive post purchase Parking Truss
Surface
09/2019 $695,000
Construction Brick over w ood frame on Sale History None in previous 3 years
Land to Building Ratio CC
3.15slab Verification Source Public records
Notes
This is the March 2018 sale of a 72 unit apartment complex located in Callaw ay, Bay County, FL. This property w as in
overall average condition at time of purchase. The unit mix includes 8 each 1BR/1BA 800 SF units w hich rent for
$675/mo; 32 each 2BR/1BA 960 SF units w hich rent for $850/month and 32 each 2BR/1.5BA 944 SF units that rent for
$825/month (due to older interior finishes). This indicates an average unit size of 935 SF, and 1.22 baths. No W/D
hookups in the units, but there is an on site laundry building. There are 21 buildings total, of w hich 18 house residential
units, one is the leasing office, one is the laundry / clubhouse building, and one is the maintenance / storage building.
Comparable 3
Transaction
ID 5417 Price $840,000
Nam e Evans Street Multifamily Conditions of Sale Normal
Date 2/2/2018 Price per Unit $84,000
Tax ID 01-1S-23-1730-0000-019C Grantor Banga Investments IV LLC
Market (13) Niceville Grantee R & G Properties 2 LLC
Address 211 Evans Street Property Rights Fee Simple
City Niceville Transaction Type Closed
County Okaloosa Financing Cash or Equiv
Site
Acres 0.77 Topography Level
Land SF 33541 Zoning R-3
Road Frontage 265' Zoning Type Residential
Shape Irregular Flood Zone Zone X
Utilities All Available or Proximate View Residential
Year Built 1988 Roof Type Shingle
Renovations Periodic Parking Surface
Construction Class D Sale History None in previous 3 years
Land to Building Ratio 6.90:1 Verification Source Public Records,
MLS#790982
Notes
This is the sale of +/-0.77-acre parcel of land improved w ith 5 multifamily improvements configured to provide a total of
10 residential units, each being approximately +/-972 SF in size.
Comparable 4
Transaction
ID 5702 Price $1,660,000
Nam e The Hammocks Apartments Conditions of Sale Normal
Date Sale
1/20/2017 Price per Unit $75,455
Tax ID 13-2S-24-1910-0166-0010; - Grantor Windw ard Properties, LLC
0167-0000; -0168-0000
Market Fort Walton Beach Grantee R&G Properties 3, LLC
Address 27-31 Alder Ave Property Rights Fee Simple
City Fort Walton Beach Transaction Type Closed
Site
Land SF 36590 Zoning R-2
Road Frontage 150' Alder Ave SE Zoning Type Multi-Family Residential, Fort
Walton Beach
Shape Rectangular Flood Zone X
Utilities Typical, all available View Residential, Interior
Year Built A 1994 / Eff.2003 (Blended) Roof Type Asphalt Shingle over Wood
Truss
Renovations Yes Parking Surface
Construction Brick/Vinyl over w ood frame Sale History None in previous 12 months
on CC slab
Land to Building Ratio 1.75 Verification Source ECARMLS#767600; Public
records
Notes
This is the January 2017 sale of a 2-building, 22 unit apartment property located in Fort Walton Beach, Okaloosa
County, FL. This property exhibits a blended actual year built of 1994 and blended effective year built of 2003 due to
renovations. Each unit is 2-story, 2BR/1.5BA and ranges in size from 1,000 to 1,100 SF. Rent rates are currently
$925/month.
Comparable 5
Transaction
ID 4922 Price $1,400,000
Nam e Bluew ater Golf Villas Conditions of Sale Normal
Date Apartment
11/23/2016Sale Price per Unit $58,333
Tax ID 22-1S-22-0000-0001-0070 Grantor Bluew ater Bay Resort, LLC
Market 13-08 Bluew ater Bay Grantee Driftw ood Beach LLC
Address 1940 Bluew ater Blvd. Property Rights Fee Simple
City Niceville Transaction Type Closed
Site
Acres 7.29 (5.43 apts) Topography Level, Dry
Land SF 173,369 Zoning Mu1 - DRI
Road Frontage 365' +/- Bluew ater Blvd. Zoning Type Mixed-Use 1, Development
of Regional Impact, Okaloosa
Shape Mostly Rectangular Flood Zone County
X
Utilities Typical, all available View Secondary, Minor Corner
GBA 29,784 No. of Buildings 2
Year Built A / Eff. 1994 Roof Type Asphalt Shingle
Renovations Periodic Updating Parking Surface
Construction Stucco over Wood Frame Sale History None in previous 3 years
Land to Building Ratio 1:2.04 Verification Source ECARMLS #759356, Public
Records
Notes
This is the November 2016 sale of a 24 unit apartment complex located along Bluew ater Boulevard in Niceville. This
property feautures 24 1 BR / 1 BA units. At time of sale, 22 of the units had only kitchenettes, w ithout any range /
oven, and the units w ere not seperately metered for utilities. The appraiser is aw are that the purchaser spent
approximately $65,000 to update the property to have full kitchens in each unit immediately after purchase. A 1.10 acre
portion of the underlying land w as excess land, and w as valued at approximately $180,000 at time of sale. Thus, the
net negative adjustment to this property for immediate expenditures / items not included in the sale is -$115,000.
Improved Comparable Sales Location Map – Multi-Family

Analysis Grid, Improved Comparable Sales – Multi-Family
Elements of Comparison
The following ten basic elements of comparison should be considered in sales
comparison analysis:
1.) Real property rights conveyed: fee simple, leased fee, leasehold, fractional
interest, etc.
2.) Financing terms: Cash, cash equivalent, seller financing, financing

concessions by seller, etc.
3.) Conditions of Sale: Seller concessions, personal property included in sale,

parties related, etc.
4.) Expenditures made immediately upon purchase: deferred maintenance

repairs, rehabilitation, renovation, upgrades.
5.) Market Conditions: Appreciation, depreciation, stagnation in real estate

prices since the time of sale.
6.) Location: corner, major traffic artery, city/county, interior lot, etc.
7.) Physical characteristics: Size, topography, access to utilities, construction

quality, condition, etc.
8.) Economic characteristics: rents, operating expenses, vacancy rates, lease

provisions, management competence, etc.
9.) Use: zoning, future land use, building codes, government control, etc.
10.) Non-realty components of value: furniture, fixtures, and equipment.
On the following page is a sales comparison grid displaying the subject property, the
comparables and the adjustments applied.
Analysis Grid Comp 1 Comp 2 Comp 3 Comp 4 Comp 5

ID Subject 5078 5701 5417 5702 4922
Name Raider Housing and College Hurlburt Arms Apartment Tyndall Pointe Apartment Evans Street Multifamily The Hammocks Apartments Bluewater Golf Villas
Courtyard Apartments Sale Sale Sale Apartment Sale
Address 28 & 30 Garden Ln 86 Forsman Circle 166 N Fox Ave 211 Evans Street 27-31 Alder Ave 1940 Bluewater Blvd.
City Niceville Ft. Walton Beach Callaway Niceville Fort Walton Beach Niceville
County Okaloosa Okaloosa Bay Okaloosa Okaloosa Okaloosa
Market Niceville Ft. Walton Beach SE Bay County (13) Niceville Fort Walton Beach 13-08 Bluewater Bay
State FL FL FL FL FL FL
Property Type 62 Unit Multi-Family Multifamily Multifamily Multifamily Multifamily Multifamily
Tax ID 05-1S-22-256C-0004-0010; - 16-2S-24-1270-0001-0000 06479-040-000;-000-000 01-1S-23-1730-0000-019C 13-2S-24-1910-0166-0010; -0167- 22-1S-22-0000-0001-0070
0000; -0168-0000
0009-0010; -0003-0010
Price $0 $3,650,000 $4,900,000 $840,000 $1,660,000 $1,400,000
Price Adjustment $0 $0 $0 $0 $0 -$115,000
Adjustment None None None None None Excess Land
Description
Adjusted Price $0 $3,650,000 $4,900,000 $840,000 $1,660,000 $1,285,000
Date 12/13/2019 3/9/2018 2/23/2018 2/2/2018 1/20/2017 11/23/2016
Price $0 $3,650,000 $4,900,000 $840,000 $1,660,000 $1,285,000
No. of Units 62 84 72 10 22 24
Price per Unit $0 $43,452 $68,056 $84,000 $75,455 $53,542
Transaction Adjustments
Property Rights Fee Simple Fee Simple 0% Fee Simple 0% Fee Simple 0% Fee Simple 0% Fee Simple 0%
Financing Conventional Conventional 0% Conventional 0% Cash or Equiv 0% Conventional 0% Conventional 0%
Conditions of Sale Normal Normal 0.0% Normal 0% Normal 0% Normal 0% Normal 0%
Adjusted Price per Unit $43,452 $68,056 $84,000 $75,455 $53,542
Market Trends Through 1/1/18 6% 0% 0% 0% 6% 7%
Location Good Inferior Similar Similar Slightly Inferior Similar
% Adjustment 15% 0% 0% 10% 0%
$ Adjustment $6,518 $0 $0 $7,974 $0
No. of Units 62 84 72 10 22 24
% Adjustment 0% 0% -12.5% -10.0% -10.0%
$ Adjustment $0 $0 -$10,500 -$7,974 -$5,711
Year Built A 1996 / Eff.2000 (blended) A 1953 / Eff.1980 A 1984 / Eff.1990 1988 A 1994 / Eff.2003 (Blended) A / Eff. 1994
% Adjustment 20.0% 10% 12% -3% 6%
$ Adjustment $8,690 $6,806 $10,080 -$2,392 $3,427
Construction Vinyl Siding over Concrete Vinyl siding over wood Brick over wood frame on Class D Brick/Vinyl over wood frame Stucco over Wood Frame
and Wood Frame on CC frame CC slab on CC slab
% Adjustment Slab 0% 0% 0% 0% 0%
$ Adjustment $0 $0 $0 $0 $0
Condition Average Inferior Similar Inferior Similar Inferior
% Adjustment 10% 0% 10% 0% 10%
$ Adjustment $4,345 $0 $8,400 $0 $5,711
Zoning R-3 R-2 R-MF R-3 R-2 Mu1 - DRI
% Adjustment 0% 0% 0% 0% 0%
$ Adjustment $0 $0 $0 $0 $0
Functional Utility Average Similar Similar Superior Similar Inferior
% Adjustment 0% 0% -7.5% 0% 10.0%
$ Adjustment $0 $0 -$6,300 $0 $5,711
Avg Unit Size 792 SF 822 935 972 1075 850
% Adjustment 0.0% -2.5% -2.5% -5.0% 0.0%
$ Adjustment $0 -$1,701 -$2,100 -$3,987 $0
Avg # Bathrooms 1.16 / Unit 1.00 1.22 1.50 1.50 1.00
% Adjustment 2.0% 0.0% -2.5% -2.5% 2.0%
$ Adjustment $869 $0 -$2,100 -$1,993 $1,142
View Residential, Interior Residential, Minor Corner Residential, Minor Corner Residential Residential, Interior Secondary, Minor Corner
% Adjustment 0% 0% 0% 0% 0%
$ Adjustment $0 $0 $0 $0 $0
Amenities / Features Kitchen Appliances, Some Similar Similar Similar Similar Similar
in-unit Washer/Dryer,
common area Laundry
% Adjustment 0.0% 0.0% 0.0% 0.0% 0.0%
$ Adjustment $0 $0 $0 $0 $0
Net Adjustments 47% 8% -3% -5% 26%
Gross Adjustments 47% 13% 47% 38% 47%
EXPLANATION OF COMPARABLE SALE ADJUSTMENTS
Explanation of Adjustments to Comparable Improved Sales

Adjustments were made to the comparable improved sales to account for differences
between the subject property in ‘As Is’ condition, and each comparable improved sale.
An analysis of each of the elements of comparison and adjustments applied to the
comparable improved sales to account for the differences is presented below.
Price Adjustment / Immediate Expenditures

Comparable #2 included excess land with the sale, and also needed immediate
expenditures in the amount of approximately $65,000 in order to install oven /
range appliances in each unit. Thus, we have deducted the value of the excess
land offset by the expenditure for kitchen work required. No other adjustment is
necessary to this category of comparison.
Property Rights
This analysis considers the fee simple property rights of the subject. Each
property was conveyed or is anticipated to convey in fee simple ownership by
Warranty Deed instruments. No private deed restrictions have been imposed on
the subject or comparable sales which would limit their utility for use similar to
the subject. As such, no adjustment is necessary to this category of comparison.
Financing
All comparable sales reportedly sold or are anticipated to sell with cash to the
seller and/or cash equivalent financing at market rates. Therefore, no adjustment
for financing was required for these comparables.
Conditions of Sale
All comparable improved sales were arm’s length, ‘normal’ transactions, with no
undue pressure or duress on the part of the seller or purchaser involved in the
comparable sale transaction. No adjustments are necessary to this category of
comparison.
Economic Trends/Market Conditions

All comparables are relatively recent transactions. The residential market has
stabilized with an increase in purchases and new construction over the past 2-3
years. We have applied a very nominal 6% appreciation to the sales which sold
prior to 2018 in consideration of positive market conditions during this time
period.
Location
The location of each comparable sale relative to the subject was considered with
respect to proximity to typical neighborhood amenities and major thoroughfares.
Comparables 1 and 4 were deemed inferior and were adjusted upward
accordingly. All remaining comparables are considered to have similar location
characteristics as compared to the subject and no adjustment is necessary.
Number of Units (Economy of Scale in Purchase)

Data in our files indicate that when considering the overall number of units within
a complex, those properties with a greater number of overall units tend to sell for
lower per unit, all factors being equal. This is a direct representation of economy
of scale in the market; the more units purchased, the lower the unit price.
Adjustments were made accordingly.
Year Built / Effective Age

The subject apartments exhibit a blended actual year built of 1996 and blended
effective year built of 2000, due to updating in 2007-2008 and ongoing
maintenance. Comparables were adjusted at a rate of 1.0% per year of effective
age, with older properties being considered inferior and adjusted upward, while
newer properties were adjusted downward as market participants associate age
with negative connotation.
Construction
The subject complex features two story wood and concrete frame with vinyl
siding exterior duplex buildings. Each comparable is considered similar to the
subject regarding quality of construction, and as such no adjustment is necessary
to this category of comparison.
Condition
The subject and all comparable sales were contrasted for condition of the
improvements. This line item adjustment is primarily being utilized to account
for differences in condition not directly attributable to long-lived incurable
deterioration, which was adjusted for previously in the age category.
Comparables 1, 3 and 5 were considered inferior with regard to condition and
were adjusted upward. Each remaining comparable is in similar overall condition
as compared to the subject, and no adjustment is necessary to this category of
comparison.
Zoning
The subject property carries a commercial zoning designation which allows for a
wide variety of commercial and residential uses. Each comparable features a
zoning designation which similarly allows for multi-family residential uses, and
as such no adjustment is necessary to this category of comparison.
Functional Utility
The subject property exhibits average overall functional utility for use as a multi-
family residential development. Comparable #3 has superior functional utility
being comprised of 10 each townhome units which are legally saleable to
independent owners. Comparable #5 has inferior functional utility being a
master-metered project without independent power and water metering and was
adjusted upward. Each remaining comparable project is considered similar to the
subject regarding functional utility, and as such no adjustment is necessary to this
category of comparison.
Average Unit Size

The average subject apartment unit size is approximately 792 leasable SF. When
considering the size in comparable units, the market would consider larger units
as more valuable, and generate more commensurate rent, however not at a direct
correlation to price per SF. As such, properties which featured larger unit sizes
were adjusted downward. Units that were generally the same with regard to size
were not adjusted. We note that this adjustment incorporates an increment of
adjustment for bedroom count as well.
Average Number of Bathrooms per Unit

The average subject bathroom count per unit is 1.16 bathroom per unit. When
considering the value of bathrooms in comparable units, the market would
consider more bathrooms per unit as being more valuable, and generate more
commensurate rent. As such, Comparables #3 and #4, which featured an average
1.5 bathroom count per unit, are considered superior as compared to the subject
and were adjusted downward accordingly. Conversely, comparables 1 and 5 were
adjusted upward for inferior bathroom count.
View / Access
The subject and each of the comparables exhibit average access and visibility
characteristics for a residential development, thus no adjustment is necessary to
this category of comparison.
Amenities
The subject property ‘As Is’ features limited amenities such as typical kitchen
appliances, washer / dryer in unit, or use of the on-site laundry facility, and
central air conditioning units in each unit. Each comparable property is
considered to have similar amenities as compared to the subject, and no
adjustment is necessary to this category of comparison.
Sales Comparison Conclusion

We consider the quantity and quality of comparable sales to be adequate to render a credible
opinion of value for the subject property in ‘As Is’ condition.
Refined Range
Eliminating One
Highest and One
Full Range of Value Lowest Most Similar
Sale #1 $ 63,875 Sale #1 Sale #1

Sale #2 $ 73,160 Sale #2 $ 73,160 Sale #2 $ 73,160
Sale #3 $ 81,480 Sale #3 Sale #3 $ 81,480
Sale #4 $ 71,367 Sale #4 $ 71,367 Sale #4 $ 71,367
Sale #5 $ 67,388 Sale #5 $ 67,388 Sale #5
Lowest $ 63,875 Lowest $ 67,388 Lowest $ 71,367

Highest $ 81,480 Highest $ 73,160 Highest $ 81,480
Average $ 71,454 Average $ 70,638 Average $ 75,336
Median $ 71,367 Median $ 71,367 Median $ 73,160
Std Dev $ 6,660 Std Dev $ 2,954 Std Dev $ 4,406
The sales comparison analysis indicated a full range of value per unit of the subject property
of between $63,875 and $81,480, with an average of $71,454, and median of $71,367. The
standard deviation for the full range of adjusted sale data was $6,660.
If we refine the range by eliminating the one highest and one lowest adjusted per unit value,
the resulting indicated range of adjusted value per unit is $67,388 to $73,160, with an average
of $70,638 and a median of $71,367. The standard deviation for the refined range was
$2,954.
We consider each comparable analyzed to be a good substitute for the subject property.
Comparables #2, #3 and #4 are considered the most similar as sale #3 is in the Niceville
market and sales 2 and 4 required the lowest gross adjustments of the array, and are therefore
considered the most similar to the subject. The average adjusted per unit value for these most
similar comparables indicates a central tendency of value of approximately $75,000 per unit.
Thus, the final per unit value opinion for the subject property ‘As Is’, as of the effective date
of this appraisal is $75,000 per unit. This is based on the rounded average indicated by the
full and refined range of comparables, with additional weight given to the average of Closed
Comparables #2 and #4, the most similar comparables.
The following chart summarizes the reconciled value for the subject property ‘As Is’ from
our preceding analyses.
Ranges & Reconciled Values

Low: $63,875
High: $81,480
Average: $71,454
Reconciled Value/Unit Value: $75,000
Subject Size: 62 1 or number of units
Type of Unit Value: unit lower case
Indicated Value: $4,650,000
Reconciled Final Value: $4,650,000 << Hand Enter
Indicated Current Market Value of the Fee Simple Interest

In the Subject Property
In ‘As Is’ Condition, Via Sales Comparison Analysis as of December 13, 2019:
$4,650,000
Four Million Six Hundred Fifty Thousand Dollars
Income Approach
The Income Approach to value is based on the principle of anticipation, i.e. the value of
property correlates to the present worth of the future rights to benefits to be received by
the owner. Income approach analysis considers the property from an investor's point of
view, the basic premise being that the amount and quality of the income stream are the
basis for value of the property.
The income approach is applied by projecting a net income stream through analysis of the
subject historical data, comparable property’s income and expense information, and
historical income expense information for similar properties in the subject market area.
The estimated net income is then converted to a value indication utilizing either the
process of direct capitalization analysis, discounted cash flow (DCF) analysis (yield
capitalization), or a combination of these methods.
Discounted Cash Flow Analysis (Yield Analysis)

Discounted Cash Flow (DCF) analysis is the procedure in which a discount rate is
applied to a series of projected income streams and a reversion. The analyst
specifies the quantity, variability, timing, and duration of the income streams as
well as the quantity and timing of the reversion and discounts each to its present
value at a specified yield rate. DCF analysis can be applied with any yield
capitalization technique and may be performed on either a lease-by-lease or
aggregate basis.17
Applicability: DCF (Yield) analysis is generally used when the net income of the
property is forecast to be variable, when the property is of a sufficient size and
investment value to cause market participants to evaluate purchase decisions
based on DCF, or when specifically requested by the client in an assignment.
Given the nature of the subject property, a discounted cash flow analysis was not
employed in this appraisal analysis, as market participants typically do not utilize DCF
methodology when evaluating purchase decisions for properties such as the subject.
Direct Capitalization
Conversion of a net income to a present value dollar estimate is called
capitalization. Direct capitalization is a method used to convert an estimate of a
single year's income expectancy into an indication of value in one direct step,
either by dividing the income estimate by an appropriate rate or by multiplying
the income estimate by an appropriate factor. This technique employs
capitalization rates and multipliers extracted from sales. Only the first year's
income is considered. Yield and value change are implied, but not identified.
17
The Dictionary of Real Estate Appraisal, Fourth Edition
Applicability: Direct Capitalization analysis is generally appropriate for small to

medium sized income-producing properties, in stable markets, single tenant or
multi-user-oriented properties, or those with a forecast stable income stream.
Direct Capitalization is utilized in this appraisal given the subject market environment,
the small size of the subject property in the local market, and the tendency for market
participants to use direct capitalization analysis when evaluating purchase decisions
for similar property.
The steps involved in capitalizing the subject's net operating income are as follows:
• Develop the subject's Potential Gross Income (PGI) through analysis of the
subject’s actual historic income and an analysis of competitive current market
income rates.
• Estimate and deduct vacancy and collection losses to develop the Effective Gross
Income (EGI).
• Develop and subtract operating expenses to derive the Net Operating Income
(NOI).
• Develop the appropriate capitalization rate (Ro).
• Divide the net operating income by the capitalization rate for an estimate of value
through the income approach.
The reliability of a value found by this approach depends on an appraiser’s ability to

forecast and support income forecasts and to apply the appropriate income capitalization
technique to arrive at the value estimate. When estimating market value, the income
forecast must be considered by the appraiser to be typical and the income capitalization
techniques must reflect the way investors usually estimate value.
Valuation of a Fee Simple Interest by the Income Approach

When estimating the value of the fee simple interest by the income approach, the annual
operating income is forecast assuming market levels. The term “market levels” means
that the income and expenses are set at levels considered suitable for the subject property
after comparing it to similar properties under current market conditions. Rental rates are
projected based on expected market rents and vacancy, and collection loss is based on
what is typical in the market for properties renting at the market rate.
Valuation of a Leased Fee Interest by the Income Approach

When estimating the value of the leased fee interest by the income approach, the annual
operating income is forecast assuming contract levels, taking into consideration existing
lease terms in place for the subject property. Income and expenses are set at levels
consistent with the history of the subject property for the encumbering leases. Rental
rates are projected based on the existing leases and tenants.
Estimate of Potential Gross Income (PGI)

Potential Gross Income is the total income attributable to real property at full occupancy
before vacancy and operating expenses are deducted. Potential Gross Income includes
the sum of potential rental income, other income, and expense recoveries.
In this appraisal, as the interest being appraised is the fee simple interest (i.e. income
stream at market rents) we will primarily concentrate on the position of the currently
contracted income stream as compared to our market-derived estimate of rents and
expenses to the income approach. The income and expense history of the subject
property as provided by the property owner is discussed below.
Property Income / Use History:

Income Data Provided
We have been provided with a current rent roll for the 30 units of the subject property
known as College Courtyard Apartments. These units are subject to 12 month lease
terms, which are renewable on an annual basis.
A summary of the contracted residential unit rent rates is provided below:

Thus, per current rent roll, the total potential annual income from contracted apartment
units rental income equates to an annual income of approximately $335,520, and the
property is currently 100% occupied. Monthly rent ranges from $850 to $995, with an
average of $901.94 per month rounded to $902 per month.
A copy of the current rent roll provided is included in the addenda of the report.
Additional Income items such as Nonrefundable Deposits and Late Fees have not been
included in any documents provided. Thus, for purposes of our analysis, we will utilize
an estimated amount of 1.0% of gross rental income for these additional income items.
This is conservative and considers typical additional income items as observed by the
appraiser in the broader market, and the 100% occupancy of the subject.
For the subject 32 units that are student occupied as Raider Housing, we have not been
provided any income, as these units are provided rent free to students of the college.
Expense Data Provided

We have been provided with expense data for the entire 62 unit subject property for fiscal
years 2016 through 2019. A copy of the 2019 statement is located in the addenda.
We note that some of the expenses are higher than typical for the 62 units due to the
owner-paid expenses for Raider Housing which would typically be a tenant cost, such as
Cox Cable, and some of the Electric expenses. We will reduce this expense amount
accordingly.
The expense of Property Taxes is lower than typical, due to the tax-exempt status of the
college ownership entity, over the Raider Housing portion of the subject. We will
increase this expense amount accordingly.
Other expense items such as maintenance, legal and professional fees, and insurance
costs will remain the same.
The expense amount for Management is based on a percentage of gross sales, and
therefore will be self-adjusting in relation to the effective gross income.
We note that for appraisal purposes, the expense line items of Reserves for Replacement
will also be included in the analysis.
Market Rent as Compared to Contract Rent

Since the current residential income to the subject property is the result of multiple short
term lease agreements, typically for a 1 year term each, and the 32 Raider Housing units
are no subject to any rent agreements, the interest appraised is Fee Simple.
We have researched the local market for multi-family properties with unit size,
configuration, and amenities that are similar to the subject, in order to derive an estimated
market rent rate for the subject residential unit type, for comparison with the current rent
roll for the subject ‘As Is’.
We have also compared the reported expenses with those of comparable properties whose
data is located in our work files, whenever this information was made available, in order
to determine if the reported expenses are typical of the market, and indicative of adequate
management.
The Market Rent analysis is located below and on the following pages.
Market Rent
The appraiser has researched the local market area in order to derive potential subject
market rent. Rents for potential competing projects within the subject market area are
presented following. We have identified several rentals from which to derive market rent
in the general vicinity of the subject.
Residential Market Rent Comparable Summary
Market Rent Comparable Unit Style Unit SF Mo. Rent Included in Rent Amenities
1 Valparaiso Quad Units 2 BR 1.0 BA 750 $795
Tenant Pays all Utilities None
150-154 John Sims Pkwy S.
2 College Boulevard Units 2 BR 1.0 BA 800-817 $875 - $1,050 Landlord Pays Water, Swimming Pool, Laundry
201 E. College Blvd 1 BR 1.0 BA 600-700 $850 - $945 Sewer, Garbage Room, Grilling / Picnic
3 Hickory Ave Triplex Units 2 BR 1.0 BA 754 $895

Landlord Pays Sewer None
537-545 Hickory Ave.
4 46th Street Townhome Units 3 BR 2.0 BA 1230 $975 - $1,150 Fireplace, W/D
Tenant Pays all Utilities
1145 46th Street Connections
5 Chicago Avenue Quad Units Landlord Pays Water,

None
228 Chicago Ave. 1 BR 1.0 BA 450 $595 Sewer, Garbage
Rent Comparable #1
Rent Comparable #1 represents the contracted monthly rent rate for multiple 2 Bedroom
1 Bathroom units within a multi-building quadplex development located on John Sims
Parkway South in Valparaiso. These buildings were constructed in 1954, with a younger
effective age due to updating, and are two stories.
Each unit contains approximately 750 SF and are serviced by window air conditioning
units. Contract rent for these units is $795 per month, with the tenant responsible to pay
all utilities directly.
Rent Comparable #2
Rent Comparable #2 represents the contracted monthly rent rate for both 2 Bedroom 1
Bathroom and 1 Bedroom 1 Bathroom unit types within a larger apartment complex on
College Boulevard.
The 1 Bedroom units contain approximately 600 - 700 SF, and contract rent for these
units is $850 - $945 per month. The 2 Bedroom units contain approximately 800 - 817
SF, and contract rent for these units is $875 - $1,050 per month. This rent rate includes
landlord-paid water, sewer, and garbage pickup. This complex includes a swimming
pool, laundry building, and grilling / picnic areas.
Rent Comparable #3
1.0 Bathroom triplex units located on Hickory Avenue in Niceville.
Each unit contains approximately 754 SF and feature central heat and air conditioning.
Contract rent for these units is $895 per month, with the tenant responsible to pay all
utilities directly, while the landlord pays sewer.
Rent Comparable #4
2 Bathroom townhome units located on 46th Street in Niceville.
Each unit contains approximately 1,230 SF, and feature central heat and air conditioning,
as well as first floor fireplace and in-unit washer and dryer connections. Contract rent for
these units ranges $975 to $1,150 per month, with the tenant responsible to pay all
utilities directly.
Rent Comparable #5
1 Bathroom units located on Chicago Avenue in Niceville.
Each unit contains approximately 450 SF, and features central heat and air conditioning.
Contract rent for these units is $595 per month, with the landlord paying water, sewer,
and garbage pickup.
In summary, the contracted market rents for the 1 Bedroom units ranged from $595 to
$945 per month; those for the 2 Bedroom units ranged from $875 to $1,050 per month;
and market rent rates for the 3 Bedroom units ranged from $975 to $1,150 per month.
Unit Type Size Rent

RENT COMPARABLES Min Max Min Max
1BR / 1BA 450 SF - 700 SF $595 - $945
2BR / 1BA 754 SF - 817 SF $875 - $1,050
3BR / 2BA 1,230 SF $975 - $1,150
Per the current rent roll provided, contracted rent rates for the College Courtyard
Apartments containing 1/2/3 Bedroom units ranged from $850 to $975, with an average
rent of $902 per unit. Thus, it appears that the contracted rent rates for these units are
well within the range of currently attainable market rent rates as exhibited by the
comparables.
For the Raider Housing units, we anticipate that the 1 Bedroom units containing 550 SF
would likely command a rate at the low end of the range, due to lack of amenities, and
tendency for tenants to pay majority of utility expenses. Thus, we anticipate an
applicable market rent rate of $700 per month for these units.
The 2 Bedroom units containing 700 SF would likely command a rent rate slightly lower
than that of the College Courtyard apartments, due to the size, and thus we anticipate an
applicable market rent rate for these units of $850.
The 2 Bedroom 2 Bathroom units containing 850 SF are somewhat superior to the
College Courtyard counterparts of the same size due to the second full bathroom, though
inferior to the 3BR College Courtyard Apartments, and therefore we anticipate a rent rate
of approximately $875 per month.
The comparable set varies with regard to unit size and project amenities. However, the
appraisers have researched and analyzed sufficient data in the local market to
determine that the current contracted rent rates for the subject residential units are
typical of the local market, and therefore consistent with currently attainable market
rent.
As such, we will utilize the current average monthly rent rate per Residential Unit per
the provided rent roll for the 30 College Courtyard Apartment units, and our previously
developed opinion of currently attainable market rent rates for the 32 Raider Housing
units in our income projection.
Income Projection
Income Capitalization Analysis
Unit Average Monthly Income Method No. of Units Annual % of PGI
College Courtyard: 28 Garden Lane $902 $/Month 30 $324,720 50.9%
Raider Housing: 30 Garden Lane 1BR/1BA $700 $/Month 8 $67,200 10.5%
Potential Gross Income: $637,920 100%
Other Income, Late Fees, Non-refundables@ 1.50% $9,569
Vacancy @ 3.50% $22,662
Effective Gross Income (EGI): $624,827 97.9%
Other Income
As previously discussed, additional income items such as late fees and non-refundable
pet deposits are included in our analysis in the amount of 1.5% of PGI, noting that this
income is directly related to occupancy.
Vacancy and Collection Loss

Based on a review of market conditions and interviews with market participants
following, we have projected a weighted vacancy and collection for the subject property.
The property is currently 100% occupied, based on physical vacancy at time of

inspection. While we observe that all units are subject to short to mid-term leases typical
of residential apartment units, and we also note the recent updating to the interior of
approximately half of the units, which tends to increase demand.
Thus, for purposes of this appraisal, we will utilize an anticipated 3.5% vacancy and
collections loss for the subject, which takes into account that there is some rent loss
during turnover. We note that this rate is within the typical percentage indicated by the
local market for property similar to the subject.
Estimation of Operating Expenses
Management and Payroll

Management expenses vary in this area by size and complexity of properties. We have
utilized a total of 7.0% of EGI for this expense category. This is also consistent with the
rate charged for third party property management services by local realtors.
Repairs and Maintenance

We have been provided with a list of Maintenance expenses which indicated an annual
expense for 2019 of $88,779 for the subject units. We have included a maintenane
allocation of 10% of EGI, which although lower than the historical cost, is more in-line
with traditional norms for similar property.
Interior Utilities
Typically, each residential tenant pays the interior utilities of electricity, cable, internet,
and sometimes water, sewer, and garbage for that unit directly, thus this expense is
passed through to the tenant and does not pose an expense for the owner / landlord.
We have included an allocation of $6,000 annually for common area utilities and tenant
turnover electrical.
Taxes
The 2019 taxes for the subject property were reported as $20,343 (rounded) and we have
utilized the full amount here for the subject property, plus an estimate for the Raider
Housing parcels in the amount of $15,000, for a total of $35,000 (rounded).
Insurance
The insurance costs for the subject has been reported by the property owner as $27,049
for 2019. This is in-line with other similar properties in the market area, thus, we have
utilized this amount here rounded to $28,000.
Miscellaneous, Legal and Accounting

These costs are estimated at a nominal rate of $3,500 annually.
Reserves for Replacement

Replacement reserves are rarely used in a fully amortized and date weighted sinking fund
for investor owned, tenant occupied properties in the local market. Investors in income
producing properties similar to the subject sometimes use a partial sinking fund to help
defray major short-lived expense items. Whether the sinking fund is actually employed
or not, a typical investor would most likely estimate these costs and set aside a line item
expense in estimating the net operating income. The major items are roofing, HVAC,
and flooring.
We recognize that the subject has just been extensively renovated to a condition which
lowered the effective age. Therefore we have utilized a somewhat modest reserve
amount of 2.5%.
Income and Expense Statement

The table below recaps our projected income stream and breaks down each expense item.
Expenses are totaled, and the net operating income is displayed.

Vacancy @ 3.50% $22,662
Expense Amount (% or $) Method Annual $/Unit

Management 7.00% % of EGI $43,738 $705
Common Area Utilities / Tenant Turnover $6,000 $/Year $6,000 $97
Repairs and Maintenance 10.0% % of EGI $62,483 $1,008
Interior Utilities Pass Through $/Year $0 $0
Property Taxes $35,000 $/Year $35,000 $565
Insurance $28,000 $/Year $28,000 $452
Miscellaneous, Accounting and Legal $3,500 $/Year $3,500 $56
Reserves 2.5% % of EGI $15,621 $252
Total Expenses: $194,341 $3,135
Expense Ratio (Expenses/EGI): 31.10%
Net Operating Income (NOI): $430,485 $6,943
Capitalization Rate Derivation

The capitalization rate is the factor that coverts the stabilized net operating income (NOI)
to a present value. It is the ratio of net income to value or sale price.
NOI ÷ Sale Price = Capitalization Rate
For example, if a property sells for $500,000, and has a stabilized NOI of $50,000, the
indicated capitalization rate is 10%.
Four methods are generally recognized for estimating an appropriate capitalization rate
for use in direct capitalization analysis. These four methods are:
1. Market-Extracted Capitalization Rate Data

2. Band of Investment Method Calculation
3. Debt Coverage Method Calculation
4. Nationally-Published Capitalization Rate Data
Market Extracted Capitalization Rate Data

The market-extraction method of estimating capitalization rates involves finding
comparable sales of property similar to the subject, and extracting a market rate from the
net operating income and sales price of the comparable property.
We present the following examples of market-extracted capitalization rates for Multi-

Family properties, based on similar sales in the local and broader markets.
• A 22-unit townhome/apartment project located at 27-31 Alder Avenue in Fort

Walton Beach, sold in January of 2017 for $1,660,000. Per appraiser files, the
property exhibits a NOI of $147,126 and when applied to the contract price of
$1,660,000, results in an imputed capitalization rate of 8.86%. This property is of
inferior quality and location to the subject and we would therefore expect the rate
exhibited by sale to be higher than that applicable to the subject.
• A 72 unit apartment complex located on Fox Avenue in Callaway sold in

February of 2018 for $4,900,000. At time of sale, the PGI at 100% occupancy was
$708,000. After application of a 3.25% vacancy rate and 40% operating expense
ratio, the anticipated NOI is $409,932. When applied to the sale price of
$4,900,000, the result is an imputed capitalization rate of 8.37%.
• A 48 Unit apartment complex located at 859 Gibson Road in Fort Walton Beach
sold on October 1, 2018 for $3,650,000 which was just below the list price. The
gross income was reported to be $417,600. When deducting 5% for vacancy and
collection loss and 37.5% for operating expenses, the result is an NOI of
$256,000. When applying the NOI to sales price of $3,650,000, the result is a
computed overall capitalization rate of 7.02%,
• An 8-unit multifamily complex located on Four Mile Road in Freeport sold in

July 2016 for $449,000. The prior year reported effective gross income was
$59,588 (including associated vacancy). After applying an estimated operating
expense ratio of 35%, the resulting NOI is $38,732. When applied to the sale
price, the indicated overall capitalization rate was 8.63%.
• A 16-unit multifamily complex located on Westview Avenue in Valparaiso sold

in October 2019 for $750,000. The reported gross income was $96,300, and the
property was 100% occupied at time of sale. After applying market-derived
vacancy of 7.5%, and an estimated operating expense ratio of 25%, the resulting
NOI is $66,808. When applied to the sale price, the indicated overall
capitalization rate was 8.91%.
• A 17-unit multifamily complex located on 76 and 80 4th Avenue in Shalimar sold

in August of 2018 for $825,000. The reported net operating income was $68,259,
which when applied to the sale price, the indicated overall capitalization rate was
8.25%.
The market extracted capitalization rates of small multi-family properties in the

broader market indicated a high of 8.91%, a low of 7.02%, with an average of 8.34%.
Based on the above information, we consider that a market extracted rate of 8.25%
would be applicable.
Band of Investment Method Analysis

This technique utilizes lender and real estate investor investment criteria to develop, or
synthesize a capitalization rate. As most income producing properties are purchased with
debt plus equity capital, the return on investment portion of the overall capitalization rate
must satisfy the market returns of both the investor and the lender. The lender must
receive a competitive interest rate, and the investor must anticipate receiving a
competitive equity yield.
There are four key inputs necessary for this method:
1. The loan-to-value ratio (M)

2. The mortgage interest rate (i)
3. The loan term (n)
4. The equity cap rate or equity dividend rate (RE)
The mortgage variables are used to build the mortgage constant (RM), which is the total
amount of the payments made in one year, expressed as a percentage of the original loan
amount.
Payments x 12 / Original Loan Amount = Mortgage Constant (RM)
The equity cap rate is the annual return to the investor, expressed as a percent of the
original amount invested. The annual return to the investor is also known as the equity
dividend rate; it is the profit remaining after debt service and all other expenses.
After Debt Service Profit / Equity Investment = Equity Cap Rate (RE)
Note that the equity cap rate is not the same (usually, that is) as the equity yield rate. The
equity yield rate reflects the total return to the investor over the life of the investment.
Factors such as appreciation and mortgage pay down affect and usually increase this
return to a point higher than the equity dividend rate. In markets where substantial
appreciation is expected, investors will often accept a low or even negative equity
dividend rate, anticipating a compensating payoff when the property is eventually sold. In
markets where little appreciation is expected, much more weight is given to the annual
equity dividend.
Formula:
RM x M = rate
RE x (1-M) = rate
= Cap Rate (Ro)
The prime rate as of the effective date of this evaluation was 4.75%. Competitive fixed
rate loans for properties similar to the subject are typically at prime plus 1/2 to 2 percent,
however, some commercial lenders are not willing to lend below floor rates of 5.00% to
6.00%. No local commercial lender will extend to long term amortization.
We typically utilize a rate that is applicable for an investment period of 5 years. Thus,
we will use a rate of 5.25% in our calculations, with a 75% loan to value and a 20 year
amortization term.
The debt capitalization rate (or mortgage constant) for a typical loan made at 5.25% for
20 years is 0.0808613.
Equity dividend (capitalization) rates in the local market range from 8-12%. We estimate
an equity dividend rate of 9.00% in the local market for property such as the subject.
Debt Coverage Ratio Method Analysis

This technique develops a capitalization rate based on typical mortgage terms. There are
four variables necessary for this method:
1. The loan-to-value ratio (M)

2. The mortgage interest rate (i)
3. The loan term (n)
4. The debt coverage ratio (DCR)
Items 1 through 3 are discussed above under the Band of Investment section. In this
method it is also used to develop the mortgage constant (RM). The debt coverage ratio is
the factor by which income exceeds debt on an annual basis.
Formula:
Debt Coverage Ratio x Loan to Value Ratio x Mortgage Constant = Ro
or: DCR x M x RM = Ro
We have researched mortgage rates and terms typical for the subject within the market
area as noted above. The table below details the Band of Investment and Debt Coverage
Ratio Analyses calculations.
Capitalization Rate Calculations
Capitalization Rate Variables

Mortgage Interest Rate 5.25%
Loan Term (Years) 20
Loan To Value Ratio 75.%
Debt Coverage Ratio 1.35
Equity Dividend Rate 9.00%
Band of Investment Analysis

Mortgage Constant Loan Ratio Contributions
0.0808613 x 75.% = 6.06%
Equity Dividend Rate Equity Ratio
9.00% x 25.% = 2.25%
Band of Investment Capitalization Rate 8.31%
Debt Coverage Ratio Analysis

Debt Coverage Ratio x Loan to Value Ratio x Mortgage Constant
1.35 x 0.75 x 0.0808612999614158 = 8.19%
Debt Coverage Ratio Capitalization Rate 8.19%
The Band of Investment capitalization rate analysis indicated an appropriate

capitalization rate per the preceding assumptions of 8.31%.
The Debt Coverage Ratio Analysis indicated an appropriate capitalization rate per the
preceding assumptions of 8.19%.
National Survey Data

RealtyRates.com Investor Survey
The Realty Rates Investor Survey, dated 3rd Quarter 2019, indicates going in
capitalization rates for Apartments – Garden/Suburban Townhouse ranged from 4.31% to
11.79% with an average of 7.79%.
In consideration of the condition and age of the subject multi-family property, we would
estimate an applicable capitalization rate above the national average indicated by the
survey data. It is noted that this survey includes a multitude of institutional-grade
multifamily properties which trade a capitalization rates at the low end of the range and
therefore skew the data as it relates to local, investor-oriented property such as the
subject.
Appraiser notes regarding national market indicators and their applicability in the
subject market area:
While national market indicators provide insight into the motivations of market
participants in major metropolitan areas, these indications of capitalization rates must be
counter-balanced with the indications of comparable-sale-based capitalization rate
indications, as well as traditional methods of capitalization rate estimation via the debt
coverage ratio and mortgage-equity analysis methods.
It is the opinion of the appraisers that these indications, while useful to trend broad
momentum in the real estate market for particular property types as a whole, are often
influenced by institutional investors whose weighed average cost of capital allows
investment at lower discount rates and internal rate of return thresholds than would be
acceptable to the individual investor.
Nevertheless, these indications are considered relevant to the valuation of the subject
property, and the derivation of an appropriate capitalization rate when analyzed in
concert with the other derivation methods presented in this appraisal analysis.
As such the appraisers will accord appropriate weight to these indications, noting that
their applicability may be somewhat macroeconomic in nature as compared to more local
indications of minimum investment parameters for property purchased by investors in the
local area.
Capitalization Rate Summary and Conclusion
The market extracted capitalization rates of multi-family properties in the broader market
indicated a market extracted rate of 8.25% would be applicable.
The Band of Investment capitalization rate analysis indicated an appropriate

capitalization rate per the preceding assumptions of 8.31%.
The Debt Coverage Ratio Analysis indicated an appropriate capitalization rate per the
preceding assumptions of 8.19%.
The Realty Rates Investor Survey, dated 3rd Quarter 2019, indicates going in
capitalization rates for Apartments – Garden/Suburban Townhouse ranged from 4.31% to
11.79% with an average of 7.79%.
Capitalization Rate Conclusion:

It is the opinion of the appraiser that an 8.25% capitalization rate should be employed
in this analysis.
Capitalization to Value
Vacancy @ 3.50% $22,662
Expense Amount (% or $) Method Annual $/Unit

Management 7.00% % of EGI $43,738 $705
Common Area Utilities / Tenant Turnover $6,000 $/Year $6,000 $97
Repairs and Maintenance 10.0% % of EGI $62,483 $1,008
Interior Utilities Pass Through $/Year $0 $0
Property Taxes $35,000 $/Year $35,000 $565
Insurance $28,000 $/Year $28,000 $452
Miscellaneous, Accounting and Legal $3,500 $/Year $3,500 $56
Reserves 2.5% % of EGI $15,621 $252
Total Expenses: $194,341 $3,135
Expense Ratio (Expenses/EGI): 31.10%
Net Operating Income (NOI): $430,485 $6,943
Capitalization Rate: 8.25%
Value (NOI/Cap Rate): $5,218,006
Indicated Value: $5,220,000 $84,194
Direct Capitalization of the estimated net operating income (NOI) generated by leasing
the subject property at market rental rates indicates a market value of $5,218,006 rounded
to $5,220,000.
Income Approach Conclusion

Based on the analysis detailed above, we have reconciled to an income approach value of
$5,220,000 as of December 13, 2019, subject to the Limiting Conditions and
Assumptions of this appraisal.
Indicated Current Market Value of the Fee Simple Interest

In The Subject Property
In ‘As Is’ Condition, Via Income Analysis as of December 13, 2019:
$5,220,000
Five Million Two Hundred Twenty Thousand Dollars
Final Reconciliation
The process of reconciliation involves the analysis of each approach to value. The quality
of data applied, the significance of each approach as it relates to market behavior and
defensibility of each approach are considered and weighed. Finally, each is considered
separately and comparatively with each other.
Value Conclusion
Land Value: Not Utilized
Cost Approach: Not Utilized
Sales Comparison Approach: $4,650,000
Income Approach: $5,220,000
Land Valuation
An opinion of value for the subject underlying land has not been developed in this
appraisal assignment in conjunction with non-application of the cost approach per
reasoning below.
Cost Approach
The cost approach to value has not been developed in this appraisal assignment. In
consideration of the current actions of market participants in the local market, the Cost
Approach to value is not considered necessary to the derivation of a credible value
opinion for the subject property ‘As Is’. Omission of this approach to value is not
considered to negatively affect the credibility of the final value opinion contained herein.
Sales Comparison Approach

The sales comparison analysis is generally regarded as a reliable method of estimating
value in the local market. The quantity and quality of data was adequate as there were
multiple closed sale comparables of similar-use properties from which to derive an
opinion of value for the Residential Units from the (improved) sales comparison analysis.
The unit of comparison was price per residential unit, and we have applied adjustments to
account for differences between the subject property 'As Is', and those characteristics of
the comparables.
We assign secondary weight to the value indication from the sales comparison analysis
as the field of comparable data is considered adequate to derive a credible opinion of
value, however, the subject is recently renovated and there is a relative shortage of
properties in the subject market area which are of a similar quality.
Income Approach
The income approach is based on the principal of anticipation. This is a positive for the
reliability of this approach as the forecast income and expenses for the subject are reliable
and supportable, based on actual contract rents in place and market rents and historical
operating expenses. We analyzed the subject property contracted rent rates and they were
deemed to be consistent with currently attainable market rents of similar type properties.
The history of operation of the subject facility as well as a provided spreadsheet of

historical expenses allowed for accurate estimation of operating expenses, and lends
additional credibility to the attainability of the income and expense forecasts in the
income approach. We utilized the direct capitalization methodology to derive an opinion
of value for the subject property 'As Is'.
The value indication derived from the income approach has received primary weight as
compared to that of the sales comparison approach in our reconciliation, noting the
recent renovations, increases in rent, and apparent demand for the subject apartment
units in the market.
Exposure Time
The opinion of value derived as a result of the analyses in this appraisal report revolves
largely around the time estimated necessary to sell the subject, given market conditions
and conditions / characteristics of the property leading up to the date of value.
Exposure time is retrospective from the effective date of value of the appraisal report.
While unique to every property, exposure time is universally dependent on satisfactory

effort being given by competent market participants in an effort to sell the subject
property. This requirement is parallel to the definition of market value utilized in this
appraisal which assumes competent and aggressive marketing assumed present in any
sale.
Based on the preponderance of market data and analyses presented preceding, it is

estimated that the exposure time necessary to have achieved the value opinion
subsequently stipulated is 9-12 months.
Value Conclusion
Based on the data and analyses developed in this appraisal, we have reconciled to the
following value conclusions, as of December 13, 2019, subject to the Limiting
Conditions and Assumptions of this appraisal.
Reconciled Value Premise: ‘As Is’

Interest: Fee Simple
Value Conclusion: $5,000,000
Current Market Value of the Fee Simple Interest In the Subject Property
In ‘As Is’ Condition, As of December 13, 2019:

($5,000,000)
Certification
The appraisers have no present or prospective interest in the subject property of this
appraisal and no personal interest of bias with respect to the parties involved in this
appraisal. We have the appropriate education and experience to conduct this appraisal.
The appraisers will not divulge the analytical findings or conclusions to anyone other
than the client or designee, except as may be required by the Appraisal Institute or by a
court of law with power of subpoena.
We certify, to the best of our 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 our personal, impartial, and unbiased
professional analyses, opinions and conclusions.
• We have no present or prospective interest in the property which is the subject of

this report and no personal interest with respect to the parties involved.
• We have no bias with respect to the property which is the subject of this report or
to the parties involved with this assignment.
• The engagement in this assignment was not contingent upon developing or

reporting predetermined results.
• 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 opinion, the attainment of a
stipulated result, or the occurrence of a subsequent event directly related to the
intended use of this appraisal.
• The reported analyses, opinions, and conclusions were developed, and this report
has been prepared, in conformity with the Code of Professional Ethics and
Standards of Professional Appraisal Practice of the Appraisal Institute, which
include the Uniform Standards of Professional Appraisal Practice.
• The use of this report is subject to the requirements of the Appraisal Institute
relating to review by its duly authorized representatives.
Certification
(Continued)
• Jason P. Shirey and Josette D. Jackson have made a personal inspection of the
property that is the subject of this report.
• As of the date of this report, I, Jason P. Shirey have completed the continuing
education program for Designated Members of the Appraisal Institute.
• As of the date of this report, I, Josette D. Jackson, have completed the Standards
and Ethics Education Requirements for Candidates of the Appraisal Institute.
• The signatory appraisers have not performed any services, as an appraiser or in

any other capacity, regarding the property that is the subject of work under review
within the three-year period immediately preceding acceptance of this appraisal
assignment.
• No one provided significant appraisal assistance to the person(s) signing this

certification.
This appraisal has been conducted, and the appraisal report prepared in conformance with
the requirements of Title XI of the Financial Institutions Reform, Recovery, and
Enforcement Act of 1989 (FIRREA, 12 U.S.C. 3331 et seq.). This appraisal assignment
was not based on a requested minimum valuation, a specific valuation, or the approval of
a loan.
Respectfully Submitted,
EquiValue Appraisal, LLC
Jason P. Shirey, MAI, CCIM, CPM Josette D. Jackson, CCIM

Cert Gen RZ3186 Candidate for Designation, Appraisal Institute
Cert Gen RZ3275
Limiting Conditions and Assumptions
1. Unless otherwise noted in the body of the report, we assumed that title to the property or
properties appraised is clear and marketable and that there are no recorded or unrecorded
matters or exceptions that would adversely affect marketability or value. We are not
aware of any title defects nor were we advised of any unless such is specifically noted in
the report. We did not examine a title report and make no representations relative to the
condition thereof. Documents dealing with liens, encumbrances, easements, deed
restrictions, clouds and other conditions that may affect the quality of title were not
reviewed. Insurance against financial loss resulting in claims that may arise out of
defects in the subject property’s title should be sought from a qualified title company that
issues or insures title to real property.
2. We assume that improvements are constructed or will be constructed according to

approved architectural plans and specifications and in conformance with
recommendations contained in or based upon any soils report(s).
3. Unless otherwise noted in the body of this report, we assumed: that any existing
improvements on the property or properties being appraised are structurally sound,
seismically safe and code conforming; that all building systems (mechanical/electrical,
HVAC, elevator, plumbing, etc.) are, or will be upon completion, in good working order
with no major deferred maintenance or repair required; that the roof and exterior are in
good condition and free from intrusion by the elements; that the property or properties
have been engineered in such a manner that it or they will withstand any known elements
such as windstorm, hurricane, tornado, flooding, earthquake, or similar natural
occurrences; and, that the improvements, as currently constituted, conform to all
applicable local, state, and federal building codes and ordinances. We are not engineers
and are not competent to judge matters of an engineering nature. We did not retain
independent structural, mechanical, electrical, or civil engineers in connection with this
appraisal and, therefore, make no representations relative to the condition of
improvements. Unless otherwise noted in the body of this report no problems were
brought to our attention by ownership or management. We were not furnished any
engineering studies by the owners or by the party requesting this appraisal. If questions
in these areas are critical to the decision process of the reader, the advice of competent
engineering consultants should be obtained and relied upon. It is specifically assumed
that any knowledgeable and prudent purchaser would, as a precondition to closing a sale,
obtain a satisfactory engineering report relative to the structural integrity of the property
and the integrity of the building systems. Structural problems and/or building system
problems may not be visually detectable. If engineering consultants retained should
report negative factors of a material nature, or if such are later discovered, relative to the
condition of the improvements, such information could have a substantial negative
impact on the conclusions reported in this appraisal. Accordingly, if engineering
consultants report negative findings, we reserve the right to amend the appraisal
conclusions reported herein.
4. All furnishings, equipment and business operations, except as specifically stated and
typically considered as part of real property, have been disregarded with only real
property being considered in the appraisal. Any existing or proposed improvements, on-
or off-site, as well as any alterations or repairs considered, are assumed to be completed
in a workmanlike manner according to standard practices based upon information
submitted. This report may be subject to amendment upon re-inspection of the subject
property subsequent to repairs, modifications, alterations and completed new

construction. Any estimate of Market Value is as of the date indicated; based upon the
information, conditions and projected levels of operation.
5. We assume that all factual data furnished by the client, property owner, owner’s
representative, or persons designated by the client or owner to supply said data are
accurate and correct unless otherwise noted in the appraisal report. We have no reason to
believe that any of the data furnished contain any material error. Information and data
referred to in this paragraph include, without being limited to, numerical street addresses,
lot and block numbers, Assessor’s Parcel Numbers, land dimensions, square footage area
of the land, dimensions of the improvements, gross building areas, net rentable areas,
usable areas, unit count, room count, rent schedules, income data, historical operating
expenses, budgets, and related data. Any material error in any of the above data could
have a substantial impact on the conclusions reported. Thus, we reserve the right to
amend our conclusions if errors are revealed. Accordingly, the client-addressee should
carefully review all assumptions, data, relevant calculations, and conclusions within 30
days after the date of delivery of this report and should immediately notify us of any
questions or errors.
6. The date of value to which any of the conclusions and opinions expressed in this report
apply, is set forth in the Letter of Transmittal. Further, that the dollar amount of any
value opinion herein rendered is based upon the purchasing power of the American
Dollar on that date. This appraisal is based on market conditions existing as of the date
of this appraisal. Under the terms of the engagement, we will have no obligation to
revise this report to reflect events or conditions which occur subsequent to the date of the
appraisal. However, we will be available to discuss the necessity for revision resulting
from changes in economics or market factors affecting the subject.
7. We assume no private deed restrictions, limiting the use of the subject property in any
way.
8. Unless otherwise noted in the body of the report, we assume that there are no mineral
deposits or subsurface rights of value involved in this appraisal, whether they be gas,
liquid, or solid. Nor are the rights associated with extraction or exploration of such
elements considered unless otherwise stated in this appraisal report. Unless otherwise
stated we also assumed that there are no air or development rights of value that may be
transferred.
9. We are not aware of any contemplated public initiatives, governmental development

controls, or rent controls that would significantly affect the value of the subject.
10. The estimate of Market Value, which may be defined within the body of this report, is
subject to change with market fluctuations over time. Market value is highly related to
exposure, time promotion effort, terms, motivation, and conclusions surrounding the
offering. The value estimate(s) consider the productivity and relative attractiveness of
the property, both physically and economically, on the open market.
11. Unless specifically set forth in the body of the report, nothing contained herein shall be
construed to represent any direct or indirect recommendation to buy, sell, or hold the
properties at the value stated. Such decisions involve substantial investment strategy
questions and must be specifically addressed in consultation form.
12. Unless otherwise noted in the body of this report, we assume that no changes in the
present zoning ordinances or regulations governing use, density, or shape are being
considered. The property is appraised assuming that all required licenses, certificates of
occupancy, consents, or 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 estimates contained in this report is based, unless
otherwise stated.
13. This study may not be duplicated in whole or in part without our written consent, nor
may this report or copies hereof be transmitted to third parties without said consent.
Exempt from this restriction is duplication for the internal use of the client-addressee
and/or transmission to attorneys, accountants, or advisors of the client-addressee. Also
exempt from this restriction is transmission of the report to any court, governmental
authority, or regulatory agency having jurisdiction over the party/parties for whom this
appraisal was prepared, provided that this report and/or its contents shall not be
published, in whole or in part, in any public document without our written consent.
Finally, this report shall not be advertised to the public or otherwise used to induce a third
party to purchase the property or to make a “sale” or “offer for sale” of any “security”, as
such terms are defined and used in this Securities Act of 1933, as amended. Any third
party, not covered by the exemptions herein, who may possess this report, is advised that
they should rely on their own independently secured advice for any decision in
connection with this property. We shall have no accountability or responsibility to any
such third party.
14. Any value estimate provided in the report applies to the entire property, and any pro
ration or division of the title into fractional interests will invalidate the value estimate,
unless such pro ration or division of interests has been set forth in the report.
15. Any distribution of the total valuation in this report between land and improvement
applies only under the existing program of utilization. Component values for land and/or
buildings are not intended to be used in conjunction with any other property or appraisal
and are invalid if so used.
16. The maps, plats, sketches, graphs, photographs, and exhibits included in this report are
for illustration purposes only and are to be used only to assist in visualizing matters
discussed within this report. Except as specifically stated, data relative to size or areas of
the subject and comparable properties was obtained from sources deemed accurate and
reliable. None of the exhibits are to be removed, reproduced, or used apart from this
report.
17. No opinion is intended to be expressed on matters that may require legal expertise or
specialized investigation or knowledge beyond that which is customarily employed by
real estate appraisers. Values and opinions expressed presume that environmental and
other governmental restrictions/conditions by applicable agencies have been met,
including but not limited to seismic hazards, flight patters, decibel levels/noise envelopes,
fire hazards, hillside ordinances, density, allowable uses, building codes, permits,
licenses, etc. No survey, engineering study or architectural analysis was provided to us
unless otherwise stated within the body of this report. If we were not supplied with a
termite inspection, survey or occupancy permit, no responsibility or representation is
assumed or made for any costs associated with obtaining same or for any deficiencies
discovered before or after they are obtained. No representation or warranty is made
concerning obtaining these items. We assume no responsibility for any costs or
consequences arising due to the need, or the lack of need, for flood hazard insurance. An
agent for the Federal Flood Insurance Program should be contacted to determine the
actual need for Flood Hazard Insurance.
18. Acceptance and/or use of this report constitutes full acceptance of the Assumptions and
Limiting Conditions and extraordinary assumptions set forth in this report. It is the
responsibility of the Client, or client’s designees, to read in full, comprehend and thus
become aware of the aforementioned assumptions and limiting conditions. We assume
no responsibility for any situation arising out of the Client’s failure to become familiar
with and understand the same. The Client is advised to retain experts in areas that fall
outside the scope of the real estate appraisal/consulting profession if so desired.
19. We assume that the subject property will be under prudent and competent management
and ownership; neither inefficient nor super-efficient.
20. We assume that there is full compliance with all applicable federal, state, and local
environmental regulations and laws unless noncompliance is stated, defined, and
considered in the appraisal reports.
21. No survey of the boundaries of the property was undertaken. All areas and dimensions
furnished are presumed correct. It is further assumed that no encroachments to the realty
exists.
22. All value opinions expressed herein are as of the date of value. In some cases, facts or
opinions are expressed in the present tense. All opinions are expressed as of the date of
value, unless specifically noted.
23. The Americans with Disabilities Act (ADA) became effective January 26, 1992.
Notwithstanding any discussion of possible readily achievable barrier removal
construction items in this report, we did not perform a specific compliance survey and
analysis of this property to determine wither it is in conformance 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 ADA. If so,
the fact could have a negative effect on the value estimated herein. Since we have no
specific information relating to this issue, nor are we qualified to make such an
assessment, the effect of any possible non-compliance was not considered in estimating
the value of the subject property.
24. The value estimate rendered in this report is predicated on the assumption that there is no
hazardous material on or in the property that would cause a loss of value. We were not
provided with an Environmental Assessment Report. Further, we are not qualified to
determine the existence or extent of environmental hazards. If there are any concerns
pertaining to environmental hazards for this property, we recommend that a qualified
engineer perform an assessment.
ADDENDA
Most Recent Deed(s) of Conveyance

Utility Easement - Telephone

Ingress/Egress Easement
Property Appraiser Data Cards

Soils Map and Descriptions

City of Niceville Land Development Code Excerpt

Insurable Replacement Cost Estimate – Building Improvements Only
“Insurable Value” is defined as: Value based on the replacement and/or reproduction costs of
physical items that are subject to loss from hazards excluding indestructible items such as
basement excavation, foundation, site work, land value, and indirect costs. Insurable value is
that portion of the value of an asset or asset group that is acknowledged or recognized under
the provisions of an acceptable loss insurance policy.
The following is a summary of our insurable value analysis performed utilizing data provided
by the Marshall Valuation Service:
Building #1
Cost Analysis - Section 1 of 1
Marshall & Swift

Cost Source: Marshall & Swift Section 12 Page 16, Residences and Motels
No. of Stories Multiplier: 1.000 Local Multiplier: 0.800
Height/Story Multiplier: 1.000 Current Cost Multiplier: 1.030
Perimeter Multiplier: 0.971 Combined Multipliers: 0.800
Building Improvements
Item Unit Type Cost Quantity Multiplier Rounded Total
Building #1 - Multi-Family Building, Class C Sq. Ft. $79.50 7,224 0.800 $459,506
Attached Exterior Porches Sq. Ft. $32.74 722 0.800 $18,913
Total Building Improvement Costs $478,419
Price per SF Gross Building Area $66.23
Site Improvements
Item Unit Type Cost Quantity Total
Site Preparation and Improvements Lump Sum $0 0 $0
Total Site Improvement Costs $0
Subtotal: Building & Site Costs $478,419
Total Cost For Site Improvements $0.00
Cost Approach Value Indication: $478,419

Deduct for Non-Insurable Items: -$23,921
Final Opinion of Insurable Replacement Cost: $454,498
Rounded: $455,000
Total Estimated Cost per SF: $62.98
Building #2
Marshall & Swift

Site Improvements

Rounded: $455,000
Building #3
Marshall & Swift

Site Improvements

Rounded: $455,000
Building #4
Marshall & Swift

Site Improvements

Rounded: $455,000
Building #5
Marshall & Swift

Building #5 - Laundry Building, Class D Sq. Ft. $65.24 930 0.845 $51,245
Site Improvements

Rounded: $50,000
Building #6
Marshall & Swift

Building #6 - Multi-Family Building, Class D Sq. Ft. $76.50 7,630 0.820 $478,692
Site Improvements

Rounded: $470,000
Building #7
Marshall & Swift

Site Improvements

Rounded: $470,000
Building #8
Marshall & Swift

Site Improvements

Rounded: $435,000
Building #9
Marshall & Swift

Site Improvements

Rounded: $325,000
October 2019 Rent Roll and Management Statement Provided

2019 Fiscal Year Expenses Provided
FISCAL YEAR 2019 General Ledger Detail Transact FGRGLTA

From 01-JUL-2018 To 30-JUN-2019
COAS: F NW FL State College Foundation

FUND: 115000 Rental Apartments/Raider Housing
DATE TYPE NUMBER DESCRIPTION ACCOUNT DEBITS

7/19/2018 INNI I0043806 Anderson's Cleaning & Restorat 80030 3,834.00
8/17/2018 INNI I0044467 Anderson's Cleaning & Restorat 80030 525.00
1/3/2019 INNI I0048333 Anderson's Cleaning & Restorat 80030 275.00
7/30/2018 INNI I0044029 City of Niceville 80030 2,642.87
7/30/2018 INNI I0044033 City of Niceville 80030 51.54
8/16/2018 INNI I0044433 Compass Bank 80030 65.22
EQ 190416 – College
6/25/2019 INNI Courtyard Apartments/Raider
I0053808 City of Niceville Housing – NWF State College
80030 Foundation
2,996.33 Pg. 158
6/30/2019 INNI I0054232 Compass Bank 80030 1,131.61
7/23/2018 INNI I0043833 Cox Communications 80030 544.67
4/25/2019 INNI I0052149 Department of Business and Pro 80030 140.00
1/16/2019 INNI I0048866 Destin Roofing, Inc. 80030 975.00
4/30/2019 FCR5 J0015027 ERA Professional Fees Apr 2019 80030 2,103.76
8/31/2018 FCR5 J0013118 ERA Professional Fees Aug2018 80030 1,631.02
12/31/2018 FCR5 J0013809 ERA Professional Fees Dec2018 80030 1,893.88
2/28/2019 FCR5 J0014328 ERA Professional Fees Feb2019 80030 1,954.00
1/31/2019 FCR5 J0014289 ERA Professional Fees Jan2019 80030 1,950.75
7/31/2018 FCR5 J0013075 ERA Professional Fees July2018 80030 1,621.36
6/30/2019 FCR5 J0015665 ERA Professional Fees June 201 80030 2,073.32
3/31/2019 FCR5 J0014755 ERA Professional Fees Mar2019 80030 1,926.72
5/31/2019 FCR5 J0015249 ERA Professional Fees May 2019 80030 2,141.17
11/30/2018 FCR5 J0013693 ERA Professional Fees Nov2018 80030 1,868.57
10/31/2018 FCR5 J0013539 ERA Professional Fees Oct2018 80030 1,899.80
9/30/2018 FCR5 J0013455 ERA Professional Fees Sep2018 80030 1,885.44
4/30/2019 FCR5 J0015027 ERA Repair/Maint Fees Apr 2019 80030 4,472.60
8/31/2018 FCR5 J0013118 ERA Repair/Maint Fees Aug2018 80030 7,991.21
12/31/2018 FCR5 J0013809 ERA Repair/Maint Fees Dec2018 80030 3,489.43
2/28/2019 FCR5 J0014328 ERA Repair/Maint Fees Feb2019 80030 1,949.66
1/31/2019 FCR5 J0014289 ERA Repair/Maint Fees Jan2019 80030 1,282.32
7/31/2018 FCR5 J0013075 ERA Repair/Maint Fees July2018 80030 6,474.01
6/30/2019 FCR5 J0015665 ERA Repair/Maint Fees June 201 80030 5,288.73
3/31/2019 FCR5 J0014755 ERA Repair/Maint Fees Mar2019 80030 1,754.74
5/31/2019 FCR5 J0015249 ERA Repair/Maint Fees May 2019 80030 4,358.15
11/30/2018 FCR5 J0013693 ERA Repair/Maint Fees Nov2018 80030 1,300.45
10/31/2018 FCR5 J0013539 ERA Repair/Maint Fees Oct2018 80030 2,339.40
9/30/2018 FCR5 J0013455 ERA Repair/Maint Fees Sep2018 80030 9,922.12
6/30/2019 FCR5 J0015665 ERA Utility Fee June 2019 80030 18.93
5/31/2019 FCR5 J0015249 ERA Utility Fee May 2019 80030 119.40
8/31/2018 FCR5 J0013118 ERA Utility Fees Aug2018 80030 566.13
7/31/2018 FCR5 J0013075 ERA Utility Fees July 2018 80030 180.67
10/31/2018 FCR5 J0013539 ERA Utility Fees Oct2018 80030 8.44
9/30/2018 FCR5 J0013455 ERA Utility Fees Sep2018 80030 39.26
3/15/2019 INNI I0051031 Fisher Brown Bottrell Insuranc 80030 11,063.77
1/31/2019 FCR5 J0014289 ERA Repair/Maint Fees Jan2019 80030 1,282.32
7/31/2018 FCR5 J0013075 ERA Repair/Maint Fees July2018 80030 6,474.01
6/30/2019 FCR5 J0015665 ERA Repair/Maint Fees June 201 80030 5,288.73
3/31/2019 FCR5 J0014755 ERA Repair/Maint Fees Mar2019 80030 1,754.74
EQ 190416 – College
5/31/2019 FCR5 Courtyard Apartments/Raider
J0015249 ERA Housing
Repair/Maint Fees May 2019 – NWF State College
80030 Foundation
4,358.15 Pg. 159
11/30/2018 FCR5 J0013693 ERA Repair/Maint Fees Nov2018 80030 1,300.45
10/31/2018 FCR5 J0013539 ERA Repair/Maint Fees Oct2018 80030 2,339.40
9/30/2018 FCR5 J0013455 ERA Repair/Maint Fees Sep2018 80030 9,922.12
6/30/2019 FCR5 J0015665 ERA Utility Fee June 2019 80030 18.93
5/31/2019 FCR5 J0015249 ERA Utility Fee May 2019 80030 119.40
8/31/2018 FCR5 J0013118 ERA Utility Fees Aug2018 80030 566.13
7/31/2018 FCR5 J0013075 ERA Utility Fees July 2018 80030 180.67
10/31/2018 FCR5 J0013539 ERA Utility Fees Oct2018 80030 8.44
9/30/2018 FCR5 J0013455 ERA Utility Fees Sep2018 80030 39.26
7/27/2018 INNI I0043962 GCA Education Services, Inc 80030 130.00
7/19/2018 INNI I0043810 Gulf Power Company 80030 59.80
7/27/2018 INNI I0043964 Gulf Power Company 80030 1,063.16
11/14/2018 INNI I0047236 Okaloosa County Tax Collector 80030 18,095.91
7/30/2018 INNI I0044019 Resort Air LLC 80030 1,684.00
8/28/2018 INNI I0044722 Resort Air LLC 80030 112.50
1/3/2019 INNI I0048334 Ripley's Appliance Repair, Inc 80030 297.74
5/29/2019 INNI I0053072 Ripley's Appliance Repair, Inc 80030 147.98
8/7/2018 INNI I0044186 Terminix 80030 121.00
8/7/2018 INNI I0044187 Terminix 80030 129.00
9/10/2018 INNI I0045082 Terminix 80030 126.00
9/10/2018 INNI I0045083 Terminix 80030 129.00
10/17/2018 INNI I0046276 Terminix 80030 126.00
10/17/2018 INNI I0046277 Terminix 80030 129.00
11/9/2018 INNI I0047121 Terminix 80030 126.00
11/9/2018 INNI I0047122 Terminix 80030 129.00
12/10/2018 INNI I0047959 Terminix 80030 126.00
12/10/2018 INNI I0047960 Terminix 80030 129.00
1/11/2019 INNI I0048719 Terminix 80030 126.00
1/11/2019 INNI I0048720 Terminix 80030 129.00
2/12/2019 INNI I0049734 Terminix 80030 126.00
2/12/2019 INNI I0049735 Terminix 80030 134.00
3/8/2019 INNI I0050744 Terminix 80030 126.00
3/8/2019 INNI I0050745 Terminix 80030 134.00
3/30/2019 INNI I0052502 Terminix 80030 134.00
3/30/2019 INNI I0052504 Terminix 80030 126.00
4/19/2019 INNI I0051944 Terminix 80030 649.00
4/20/2019 INNI I0052503 Terminix 80030 134.00
4/20/2019 INNI I0052505 Terminix 80030 126.00
5/9/2019 INNI I0052558 Terminix 80030 718.00
5/18/2019 INNI I0053275 Terminix 80030 134.00
5/18/2019 INNI I0053276 Terminix 80030 126.00
6/15/2019 INNI I0053965 Terminix 80030 126.00
6/15/2019 INNI I0053966 Terminix 80030 134.00
1/16/2019 INNI I0048858 The Hiller Companies, Inc. 80030 121.28
1/25/2019 INNI I0049175 Willingham Plumbing 80030 184.00
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APPRAISAL REPORT

PROPERTY: COLLEGE COURTYARD APARTMENTS & RAIDER HOUSING

CLIENT: NORTHWEST FLORIDA STATE COLLEGE FOUNDATION

EQUIVALUE APPRAISAL LLC

Jason P. Shirey, MAI, CCIM, CPM Josette D. Jackson, CCIM

Client / Intended User

Phone 850 424 6119 Fax 866 897 5975

EquiValue Appraisal LLC File #: EQ 190416

Ms. Cristie Kedroski

Re: Appraisal of College Courtyard Apartments & Raider Housing, an

This appraisal is subject to the following Hypothetical Condition(s):

This appraisal is subject to the following Extraordinary Assumption(s):

Current Market Value of the Fee Simple Interest

Five Million Dollars

Jason P. Shirey, MAI, CCIM Josette D. Jackson, CCIM

MAI : Designated Member of the Appraisal Institute

CCIM : Designated Certified Commercial Investment Member

M.S. RECM : Master of Science, Real Estate and Construction Management

B.S. BCN : Bachelor of Science, Building Construction Management

Business Affiliations and Work Experience, Past / Present

EquiValue Appraisal and Consulting Services

Plantation Coast Properties, LLC – Fort Walton Beach, Florida

Acoustics and Specialties, Inc. – General Contractors; Memphis, Tennessee

United States Air Force Reserve

Professional / Continuing Education

Litigation Appraising - Specialized Topics and Applications Income Property Management

Advanced Income Capitalization Appraising from Blueprints and Specifications

Advanced Sales Comparison Approach Florida Building Code Update

Advanced Cost Approach Business Practices and Ethics for Appraisers

Real Estate Taxation, Planning and Consequences Basic Income Capitalization

Real Estate Securities and Syndications Real Estate Investment Finance

Appraiser Experience - Property Types Previous Client List (Partial)

Affordable Housing Access Bank and Mortgage

Assignment Types Primary Market Area

Appraisal Review Okaloosa County

Additional photographs can be referenced in the Property Description Section of the

Typical College Courtyard Apartments

Typical Raider Housing

Summary of Salient Facts and Conclusions

Subject: College Courtyard Apartments & Raider Housing,

The subject property ‘As Is’ consists of three parcels of

The subject property is being appraised ‘As Is’, Fee

Owner: Okaloosa-Walton Community College Foundation, Inc.

Tax Identification: 05-1S-22-256C-0004-0010

Date of Report: January 10, 2020

Date of Inspection/Photos: December 13, 2019

Date of Value: December 13, 2019

Property Rights Appraised: Fee Simple

Intended User(s): The intended user of this report is Northwest Florida

Assessed Value: $2,730,415 (2019, Aggregate)

Taxes: $20,343.20 (2019, Aggregate), which is fully attributable

According to the County Tax Collector website, the 2019

Sale History: Per Okaloosa County Public Records ORB/P 2056/1595,

Parcels 05-1S-22-256C-0009-0010 and 05-1S-22-256C-

No transfers of the subject property have occurred within

Per rent roll provided, the 30 Raider Housing units are

Hypothetical Condition(s): None

Zoning: R-3, Multi-Family Residential District, by the City of

Highest and Best Use Development of multi-family improvements is estimated