a future development parcel
TRANSCRIPT
An Appraisal Report
A Future Development Parcel
Located at
4475-95 Inca Street Denver, Colorado 80211
PREPARED FOR
FirstBank Loan Center - Appraisals
12345 West Colfax Avenue Lakewood, Colorado 80215
EFFECTIVE DATE:
March 29, 2019
DATE OF THE REPORT
April 3, 2019
PREPARED BY: James Derr, Commercial Appraisal Services
6655 W. Jewell Ave., #217, Lakewood, CO 80232
File # 19-113
James Derr Commercial Appraisal Services
6655 W. Jewell Ave., #217 Lakewood, CO 80232
303-462-3299
April 3, 2019
Ms. Celene Lesley Senior Appraisal Analyst FirstBank Loan Center - Appraisals 12345 West Colfax Avenue Lakewood, Colorado 80215
Re: An Appraisal Report, File #: 19-113
A Future Development Site Located at – 4475-95 Inca Street, Denver, Colorado 80211 Property Contact – Brian Lucas, 4475 Inca, LLC
Dear Ms. Lesley:
Enclosed is a complete copy of my appraisal report for a development parcel located at
4475-95 Inca Street in Denver. The appraisal provides my opinion of market value for the
leased fee property interest, reflecting the property as is, effective March 29, 2019. Pages
1 through 4 of the report provide summary information about the property and conclusions
from my analysis.
The 9,100-square foot parcel zoned I-A, for industrial, office and related development and
used for storage and parking. The parcel is improved with two garage/storage structures in
fair condition, concrete paving, gravel-covered areas and perimeter fencing. A short-term
lease, set to expire on June 30, 2019, encumbers the property. The ownership entity is
marketing the parcel for sale, though there is no set asking price.
The parcel is in reasonable walking distance to a light rail station at W. 41st Avenue and Fox
Street. After an extended delay, the station is scheduled to open on April 26, 2019, when
service along the G-line commences. Proximity to the station has prompted residential and
mixed-use redevelopment in the immediate neighborhood. Once rail and bus service is in
place from the station, the pace of redevelopment could increase. The city has adopted a
Station Area Plan to guide redevelopment in the area; the subject is within an area dedicated
for ‘urban’ residential development.
Redevelopment with a residential use would require rezoning the property. In March 2019,
the property owner completed a pre-application meeting with city planning officials exploring
rezoning the parcel to a C-MX-5 or C-MX-8 designation, though a formal application to
request the zone change has not been submitted.
Ms. Lesley Page 2 – April 3, 2019
The subject’s market value is tied to its potential for future residential/mixed-use development,
either directly or via assembly with one or more adjacent parcels for a larger project. Seeking
rezoning and holding the property for future development is considered the highest and best
use. There is precedent in the immediate area for city officials approving requests to rezone
properties from an I-A designation to a C-RX-8 designation allowing high-density residential
and mixed-use development.
This appraisal report is prepared in accordance with FirstBank’s appraisal engagement
letter, a copy of which is included as an exhibit in the appendix. This appraisal report
conforms with FIRREA guidelines as well as adhering to the current version of the Uniform
Standards of Professional Appraisal Practice (USPAP). It is subject to the Certification
Statement, as well as the Statement of Contingent and Limiting Conditions and the definition
of market value contained within the report.
The purpose of the appraisal is to develop an opinion of:
market value, as is, of the leased fee property interest.
Opinion of Value for the Real Property
Value Type Interest Appraised Effective Date Final Value Opinion
As Is Leased Fee 29-March-2019 $635,000
Thank you for the assignment. If I can be of further assistance, please feel free to call.
Respectfully submitted,
James Derr Colorado Certified General Appraiser Lic. #CG01315282, exp. 12/31/20
TABLE OF CONTENTS
Summary Information & Premises of the Appraisal
Property Identification .................................................................................................................... 1 Context of the Valuation Assignment ............................................................................................. 1 Ownership Information & Marketing History .................................................................................. 2 Summary Property Details & Description ...................................................................................... 3 Opinion of Value Summary ............................................................................................................ 4 Premises of the Appraisal Assignment .......................................................................................... 5 Scope of the Appraisal ................................................................................................................... 6 Extraordinary Assumptions & Hypothetical Condition ................................................................... 6 Definitions and Terminology ........................................................................................................ 11
Property Context - Market Analysis
Neighborhood Description ........................................................................................................... 13 Demographic Data ...................................................................................................................... 22 Denver County Housing Market Conditions ............................................................................... 27
Summary Description of the Subject Property
General Information ..................................................................................................................... 31 Parcel Description ...................................................................................................................... 31 Zoning Information ...................................................................................................................... 35
Assessment & Property Tax Data ................................................................................................ 37 Site Photographs ......................................................................................................................... 37 Highest and Best Use Analysis .................................................................................................... 39
Valuation Section Valuation Procedures & Methodology ......................................................................................... 43 Sales Comparison Analysis ......................................................................................................... 45 Adjustment for Demolition Expense ............................................................................................. 57 Reconciliation & Final Opinion of the As Is Fee Simple Market Value ....................................... 62 Estimated Exposure & Marketing Period ..................................................................................... 64 Certification Statement................................................................................................................. 66
Appendix Items
Engagement Letter; Property ILC, Contingent and Limiting Conditions; and Qualifications of Appraiser .......................................................................................................... 67
An Appraisal Report A Future Development Parcel
4475-95 Inca Street, Denver Page 1
SUMMARY INFORMATION & PREMISES OF THE APPRAISAL
Property Identification
Property Type: A Future Development Site
Property Location: 4475-95 Inca Street (West Side of Inca Street, approximately 90 feet south of W. 45
th Av.)
Denver, Colorado 80211
Legal Description: The North Half of Lot 42, the South Half of Lot 45 and all of Lots 43 and 44, Block 31, Henrich & Wallace Addition, City and County of Denver, State of Colorado
Source: Denver County Assessor records
Context of the Valuation Assignment
Client: FirstBank
Intended User: FirstBank, its affiliates and/or participants
The use of this appraisal report by any other person or party is not intended by the appraiser and is not appropriate.
The Intended Use: The intended use of the appraisal report is to assist the
Intended User’s evaluation of the subject property as collateral for a mortgage loan.
Effective Date: March 29, 2019
Date of the Report: April 3, 2019
Type of Value: This appraisal report provides an opinion of market value
for the property as is.
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4475-95 Inca Street, Denver Page 2
Property Rights Appraised: Leased Fee
A lease agreement with RDT Transport, LLC encumbers the property. The lease term extends through June 30, 2019. Monthly rent is $1,500 with the tenant responsible for utilities and maintaining a liability insurance policy.
Ownership Information & Marketing History
Owner of Record: 4475 Inca, LLC Source: Denver County Assessor records.
Marketing History:
As indicated in Denver County records, the subject property sold twice in the past three years,
with both sales closing on the same day. First, 4475 Inca Trust (Jason Nickle, Trustee)
purchased the property for $300,000 from Norman F. Legler on December 5, 2016; title was
transferred via a Warranty Deed recorded at Reception No. 2016171312. This appears to be
a normal arm’s length transaction; the purchaser paid cash.
The property resold the same day from 4475 Inca Trust to 4475 Inca, LLC (Anthony P.
Zangoglia, Manager); title was transferred from via a Warranty Deed, filed at Reception No.
2016171390 with a stated price of $374,000. The seller received cash, with the buyer
obtaining a $261,800 bank loan, paying cash for the balance. An associate of the property
contact indicated that the original intent was to redevelop the site with a residential use,
though owner has opted to focus on other projects, so the parcel has not been redeveloped.
There has been no other sale or transfer of the property in the three-year period prior to the
effective date of this appraisal.
The seller is now marketing the property for sale, placing a “for sale” sign on the front fence.
An associate of the property contact indicated that there is not a set price and that he has
fielded a few calls from the sign, though, to date, no offers have been made.
An Appraisal Report A Future Development Parcel
4475-95 Inca Street, Denver Page 3
Summary Property Details
Site Area: 9,100 square feet [+/-]
[0.209 acres (+/-)]
Source: Calculated from parcel dimensions referenced on the ILC provided.
Floodplain Status: Based on FEMA Community Map No. 080046, Panel 0088H,
effective November 20, 2013, the subject property is not in a recognized flood hazard area.
Site Attributes: Rectangular parcel on west side of Inca St., approximately 90 ft. south of W. 45
th Ave.
Parcel has approximately 73 feet of frontage to Inca Street;
Depth of approximately 125 feet to a paved alley;
Adequate depth-to-frontage for size;
Generally level terrain;
Combination of chain link and wood fencing along boundaries;
Two wood frame garages in fair condition;
Concrete slab with removable aluminum-frame structure with nylon canvass covering;
Utilities available to support development.
Zoning: I-A / UO-2 (Light Industrial District)
Intended to accommodate offices & light industrial uses, enclosed within a structure, that are compatible with adjacent/nearby residential and mixed-use commercial districts. The UO-2 overlay allows for billboard signs within the district.
Summary Description - The subject property is a future development lot within Denver’s
Sunnyside neighborhood. The immediate area is in transition with industrial and older
residential land uses slowly being replaced by higher-density residential and mixed-use
projects. Currently, there are two large residential/mixed-use development projects ongoing in
the immediate neighborhood, along Inca Street, at West 41st and West 40th Avenues.
Additional projects are active to the west. The subject property is within reasonable walking
distance to a light rail station at W. 41st Avenue and Fox Street. After an extended delay, the
station is scheduled to open on April 26, 2019.
In 2009, the city adopted a plan to guide development around the station; the plan encourages
moderate density residential and mixed uses within the subject’s immediate area. The city is
also in the process of updating the long-range development plan—Blueprint Denver. The
current draft indicates that the subject’s immediate locale is an area of change, moving
towards residential and mixed -use development.
Current zoning in place (I-A) limits potential development to office, light industrial, flex and
related uses; new residential development is not allowed under this zoning designation, son
any future development consistent with the goals of the station plan and Blueprint Denver
would require rezoning. There is a trend in the immediate neighborhood to rezone parcels
from an industrial use to a higher density residential/mixed-use designation. The property
An Appraisal Report A Future Development Parcel
4475-95 Inca Street, Denver Page 4
owner has had a pre-application meeting with city planning staff regarding rezoning the parcel
to a higher density, mixed-use designation, though a formal request to rezone the property
has not been submitted.
The parcel is currently improved with two wood-frame garage/storage structures in fair
condition. There is also an aluminum-framed, nylon canvas-covered temporary storage
structure over a concrete slab. Most of the open site is gravel-covered and there is a mix of
chain link and wood fencing along the perimeter, including a gate off the Inca frontage to
control access.
The property is leased to a concrete company for storage and truck parking; the lease expires
on June 30, 2019.
Opinion of Value Summary
The purpose of the appraisal is to develop an opinion of:
market value, as is, of the leased fee property interest.
Opinion of Value for the Real Property
Value Type Interest Appraised Effective Date Final Value Opinion
As Is Leased Fee 29-March-2019 $635,000
An Appraisal Report A Future Development Parcel
4475-95 Inca Street, Denver Page 5
PREMISES of the APPRAISAL ASSIGNMENT The Assignment, Type of Value, Effective Date, Scope of Work; & Definitions
The Assignment - The subject property is a future development lot currently zoned for
industrial/office uses, though in an area transitioning to moderate- and higher-density
residential and mixed-use development. A short-term lease, expiring June 30, 2019,
encumbers the property. The Client has indicated that the purpose of this assignment is to
obtain an appraisal report for the subject property, providing an opinion of market value of the
property as is, with respect to the leased fee property interest.
The Intended User of the report is FirstBank, its affiliates and/or participants. There are
no other intended users of this appraisal and the use of this appraisal by any other
person/entity for any other purpose is not intended by the appraiser and is not appropriate.
The Intended Use of the report is to aid in or support decisions by FirstBank, its affiliates
and/or participants personnel regarding the evaluation of the property as collateral for
lending purposes and management decisions.
The appraisal report complies with the minimum standards of the most recent promulgation of
the Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA) of 1989, and with
the Uniform Standards of Professional Appraisal Practice.
Type of Value – This appraisal provides an opinion of the market value for the subject
property consistent with the definition of this term found in the engagement letter and included
at the end of this section of the report.
Effective Date - The effective date of the value opinion is March 29, 2019, the date of the
property inspection. Establishing the effective date of the appraisal is a universal practice,
and it is important for an investor to consider this because value is subject to change over
time. Aside from physical changes to the property, the value of real estate is subject to the
influence of changing economic conditions under which value may remain static, increase, or
decrease. Additionally, changing views of governing authorities may restrict future
development.
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4475-95 Inca Street, Denver Page 6
Scope of Work
Scope of Work considers the type and extent of research and analyses in an appraisal
assignment. As identified in the Uniform Standards of Professional Practice (USPAP) “Scope
of Work Rule” for each appraisal assignment an appraiser must:
Identify the problem to be solved;
Determine and perform the scope of work necessary to develop credible assignment results, and
Disclose the scope of work in the report.
Problem identification includes identifying the following assignment elements:
Client and any other intended users;
Intended use of the appraiser’s opinions and conclusions;
Type and definition of value;
Effective date of the appraiser’s opinions and conclusions;
Subject of the assignment and its relevant characteristics; and
Assignment conditions.
Assignment Conditions - As identified in the USPAP Scope of Work Rule, assignment
conditions include assumptions, extraordinary assumptions, hypothetical conditions, laws and
regulations, jurisdictional exceptions, and other conditions that affect the scope of work.
Hypothetical Conditions – USPAP defines a Hypothetical Condition as ”a condition, directly
related to a specific assignment, which is contrary to what is known by the appraiser to exist on the effective date of the assignment results, but is used for the purpose of analysis.”
No hypothetical conditions are invoked for this assignment.
Extraordinary Assumptions – USPAP defines an Extraordinary Assumption as “an
assumption, directly related to a specific assignment, as of the effective date of the assignment results, which, if found to be false, could alter the appraiser’s opinions or conclusions1.
No extraordinary assumptions are invoked for this assignment.
1 The Appraisal Foundation, Uniform Standards of Professional Appraisal Practice, 2016-2017 Edition, Washington, D.C., ©2015,
s.v. “extraordinary assumption” & “hypothetical condition”, page 3
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4475-95 Inca Street, Denver Page 7
The Scope of the Appraisal – An appraisal is a supported opinion of market value and the
appraisal process behind this report is a form of research. Specifically, it is about the real
estate market, the balance of supply and demand, information processing, terms, pricing, and
values. The objective of this appraisal is to provide an opinion of market value (as defined),
for the property as is with consideration to the leased fee property interest.
The report is intended to comply with the Uniform Standards of Appraisal Practice ("USPAP"),
as adopted by the Appraisal Standards Board of the Appraisal Foundation. The report is also
prepared in compliance with the requirements of the Code of Professional Ethics of the
Appraisal Institute. The appraisal is subject to the Definition of Market Value, Certification
Statement, Contingent and Limiting Conditions, and Special Conditions, set forth in this report.
The scope of work used in preparing this appraisal is included throughout this report in the
various descriptions and analysis. The following points give a general overview of the scope of
work, while descriptions that are more detailed are included in the appropriate sections of the
report. The general scope is shown below.
1) Competency Rule - Prior to acceptance of the assignment, the Appraiser has made a
determination that he complies with the Competency Rule of USPAP. Based on the
background and experience with this and other similar property types, as well as the research
and analysis which was performed for this and other assignments, and considering the
familiarity with the market area in which the subject is located, the appraiser who prepared this
appraisal analysis is competent to complete this assignment in an appropriate manner.
The appraiser, however, has no expertise in the identification or assessment of environmental
hazards, and the property is appraised as if none is present, while this may or may not be the
case. This aspect is beyond the scope of the appraisal.
2) Scope of Physical Property Inspection - The appraiser has personally inspected the site
on March 29, 2019, reporting pertinent data within this appraisal. The scope of the subject
property inspection is to ascertain the general quality and condition of the property; to note
any special features; any unusual conditions; and other circumstances that may affect the
opinion of value.
The lot size is calculated from parcel dimensions as referenced on the Improvement Location
Certificate provided by an associate of the property contact.
The square footage for the comparable properties presented in the appraisal report was
obtained from recorded plats, assessor records or other sources as available to the appraiser.
Parcel sizes are utilized as a tool for comparison only; the appraiser believes the data
available is reasonably correct, though he does not have the expertise to certify the accuracy
of the information or independently measure the parcels.
An Appraisal Report A Future Development Parcel
4475-95 Inca Street, Denver Page 8
The history of the area is unknown and the user of this appraisal is cautioned that soils
contamination from off-site or on-site sources is always a possibility. The appraiser has made
only a visual, ‘surface’ inspection of the property. The appraiser assumes that there are no
hidden or unapparent on-site or off-site conditions of the property or subsoil that would render
the property less valuable, or affect the health and/or safety of the occupants. Unless
otherwise stated, the existence of hazardous materials was not observed by the appraiser and
the value conclusion of this report is based on the assumption that there is not asbestos, urea-
formaldehyde foam insulation, nor any other potentially hazardous materials, within the
building or soils, which may affect the value of the property. The appraiser has no expertise in
the identification of hazardous materials and does not warrant that the subject property is free
from environmental contamination or potentially destructive subsoil conditions. The appraiser
assumes no responsibility for such conditions, or for the engineering that might be required to
discover such factors.
The intended user and purchaser are encouraged to obtain appropriate environmental site
assessments and soils reports from qualified experts if this is a matter of concern.
Inspection of comparable properties cited in this report is typically limited to visual off-site
inspections. The size of the comparable sites were obtained from County Assessor’s records
unless more reliable information was obtained from other sources such as data providers,
buyers, sellers, the occupant, brokers or from appraiser files.
3) Scope of investigation as to marketability and such legal matters – A title
commitment was not available to the appraiser. The appraiser is not aware of any adverse
deed restrictions or other unusual restrictions on title. The appraiser is not an expert in these
matters, and the client is encouraged to obtain and review a title commitment for the property.
The appraiser is not aware of any adverse easements encroachments, or other conditions
affecting the property. The appraiser assumes marketability with no “clouds” or adverse
influences to value such as encroachments, liens, easements, deed restrictions, or exclusions
(including but not limited to a reservation of mineral or water rights). Legal investigation as to
clouds on title and marketability are not in the scope of this appraisal.
4) Scope of the valuation process – The valuation methods followed addresses the cost,
sales comparison and income approaches to estimating value, reconciles those approaches,
and explains the elimination of each approach not used.
As a development lot that is part of a larger subdivision, the cost approach is not considered
applicable to deriving an opinion of market value given the difficulties of determining the cost
and contribution to value of shared common infrastructure improvements that the parcel
shares with adjacent and nearby sites.
The income approach is also not used in this analysis as development parcels the scale and
utility of the subject are nearly always sold for development, rather than being leased for
development.
An Appraisal Report A Future Development Parcel
4475-95 Inca Street, Denver Page 9
The highest and best use of the property is for multifamily residential development; given the
property is appraised as a development parcel, only the sales comparison approach is
deemed relevant. This approach includes research and review of finished development lot
sales similar to the subject property. After appropriate confirmation and adjustments for
amenity and physical differences are made, the sales data is utilized to develop the indication
of value based in sales comparison analysis.
Market sales data has been collected from public records and trade sources, those being
recorded deed transfers, and metro area Board of Realtors published data as appropriate.
Additional sources of data include the appraiser’s files, published data from CoStar Comps®
and published data in the multiple listing service database, REcolorado.
This body of data is greater than is indicated in the appraisal, and the appraiser has used
discretion in providing only pertinent data in a format that will allow the reader to follow the
appraiser's path to arriving the opinion of market value.
To the extent possible, the appraiser has reviewed and confirmed market data with public
records, sellers, buyers, agents, and/or other related parties. It should be recognized by the
user of the report that detailed data are not a matter of public record, and that parties
concerned are under no compulsion to reveal any information to the appraiser. Most often,
these data are only offered verbally and the quality and extent of available data will vary
depending on the source. Information, estimates and opinions furnished to the appraiser were
obtained from sources considered reliable and believed to be true and correct; however, the
appraiser can assume no responsibility for the accuracy of such data.
The State of Colorado does not require disclosure of sales prices, the terms of sale, or
mortgage details in public records. Moreover, privacy legislation precludes lenders from
revealing the mortgage terms without the written permission of the borrower. The appraiser
has accumulated the sales and data contained in this report over a period of several years
from a variety of sources considered reliable.
The approaches to value applied are reconciled to reach a final value opinion of the market
value for the subject property.
In economic terms, the real estate market is an imperfect, inefficient market. Each property is
unique and its location fixed, there are few buyers and sellers and they are not always well
informed--often making decisions based on anticipation. Moreover, while supply is relatively
inflexible, demand is volatile and change is inevitable. The reasoning, judgment and
estimations that are necessary to the appraisal process result in analysis statements and
conclusions that are statements of the individual appraiser's opinion only. These opinions do
not necessarily represent the only indication of value that may be obtained on the property--
value opinions of qualified appraisers can differ.
An Appraisal Report A Future Development Parcel
4475-95 Inca Street, Denver Page 10
5) The Scope of the Appraisal Relative to the Subject Property: The appraisal of this
property is specifically limited to the value in exchange of the real estate, and does not include
the valuation of interests associated with the operation of any business, particularly those
relative to inventory, personal property, furnishings, fixtures, equipment, going concern
business value, or other intangibles.
Regional, neighborhood and property data was collected from various public and private
sources considered reliable. Sources for the neighborhood and property data include City and
County of Denver records. The property occupant provided information; additional data was
collected from the on-site inspection.
The appraiser completed a highest and best use analysis of the property that includes a
discussion of potential alternative uses, financial feasibility, and a determination of the ideal
improvements.
6) Consideration of the Market Value As Is: The opinion of "market value" provided
considers the subject property as it physically exists, with consideration to its condition and
quality, without reliance on hypothetical conditions or extraordinary assumptions as of the
effective date, unless otherwise noted within the report. The as is valuation considers the
An Appraisal Report A Future Development Parcel
4475-95 Inca Street, Denver Page 11
Market Value Definition
"Market Value" is the most probable price which a property should bring in 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 are 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 each acting in what they
consider their own best interests;
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 a normal consideration for the property sold unaffected
by special or creative financing or sales concessions granted by anyone
associated with the sale.2
With respect to any unpaid property taxes, under a “market value" assignment, past due taxes
are not deducted from the opinion of value. The definition of market value states "the price
represents normal consideration" which excludes all liens and encumbrances that may exist.
The property is appraised as though it is free and clear of any such impediments.
Additionally, no reduction to the opinion of value provided is made for commissions on a
current sale.
2 Rules and Regulations, Federal Register, Vol. 55, No. 129, Page 27771
An Appraisal Report A Future Development Parcel
4475-95 Inca Street, Denver Page 12
Property Rights Appraised
A short-term lease, expiring June 30, 2019, currently encumbers the property; the opinion of
value provided considers the leased fee property interest.
The property rights of any particular property are recognized as being separable. The
ownership of property in fee simple estate indicates that the property is appraised without
significant separation of the property rights, such as the presence of an encumbrance due to a
lease, and that there are no significant restrictions on the use of the property by the owner
other than normal government restrictions. Fee simple ownership implies the benefits and
encumbrances of a lease on the property. The varied related property rights are defined as
follows:
Leasehold interest (estate) – The tenant’s possessory interest created by a lease.
A possessory interest is the right to the use and occupancy of real estate, as distinguished
from any interest in title. Positive leasehold is created when the market rent is greater than
the contract rent. Negative leasehold is a lease situation where the market rent is less than
the contract rent.
Fee simple estate – Absolute ownership unencumbered by any other interest or estate,
subject only to only to the limitations imposed by the governmental powers of taxation,
eminent domain, police power, and escheat.
Leased fee interest (estate) – A freehold (ownership interest) where the possessory interest
has been granted to another party by creation of a contractual landlord-tenant relationship
(i.e., a lease).3
3 The Dictionary of Real Estate Appraisal, 5
th ed. (Chicago: Appraisal Institute, 2010), s.v. “leasehold estate”, “fee simple estate”, &
“fee simple estate”, p. 78 & 111.
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4475-95 Inca Street, Denver Page 13
Property Context – Market Analysis Area & Neighborhood Information, Demographic Data & Residential Market Conditions
Location Synopsis and Linkage Attributes -
The subject property is located in northwest Denver, part of a neighborhood historically referred
to as Sunnyside. The neighborhood extends northeast from the West 38th Avenue/Federal
Boulevard intersection, both primary arterials for the area.
Northwest Denver is a broad area with several defined neighborhoods, typically separated by
local arterials. Federal Boulevard serves as the primary east-west dividing line;
neighborhoods to the west of Federal and south of I-70 include Berkeley, West Highland,
Sloan Lake and West Colfax. Neighborhoods extending east from Federal include Sunnyside,
Highland and Jefferson Park.
Sunnyside is a mixed-use neighborhood with retail and service commercial uses typically
found along local arterial and collector streets and a significant light industrial enclave in the
north and east sections. The neighborhood has an array of residential uses including mid-
century bungalows and duplexes; the Quigg Newton Homes, Denver's largest public housing
project; and newly constructed duplex and townhouse-styled rowhouses built for individual
sale. Redevelopment and renovating existing properties remains active in the neighborhood,
following a trend that started in the adjacent Highland neighborhood to the south.
The subject’s immediate area includes the west portion of Globeville, west of Interstate 25.
Land uses in this section of Globeville are primarily light industrial in character, though also
include retail and service commercial uses, as well as limited residential development.
Inca Street serves as the east boundary of the Sunnyside neighborhood; the west side of the
street is developed, including the subject site. Terrain on the east side drops down to multiple
rail lines, including the rail line dedicated for future light rail service (G-line). The “open” area to
the east provides city/downtown views to the southeast from the subject parcel.
The neighborhood’s industrial enclave is part of a larger industrial submarket centered on the
Interstate 25 / Interstate 70 interchange and extending east along the I-70 corridor to Colorado
Boulevard. Access to Interstate 70 is provided via interchanges at Pecos Street (about one
mile from the subject parcel) and Federal Boulevard. Access to Interstate 25 is provided by an
interchange off West 38th Avenue, approximately 1.25 miles (by road) southeast of the subject
site.
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4475-95 Inca Street, Denver Page 14
Boundaries for Sunnyside are considered as follows:
Neighborhood Boundary Delineation
North Interstate 70
East Inca Street and the adjacent rail yard
South West 38th Avenue
West Federal Boulevard
Northwest Denver Neighborhoods
Development Patterns –
Sunnyside is a neighborhood in transition, supporting new residential construction, as well as
new and renovated commercial uses. Recent commercial development includes a
freestanding bank building at the northeast corner of Tejon Street and West 38th Avenue, built
in 2016.
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4475-95 Inca Street, Denver Page 15
A strip retail complex on the south side of West 38th Avenue, between, Lipan and Kalamath
Streets, was finished in two phases (late 2015 and 2017). The two-building complex provides
approximately 11,000sf of retail and restaurant space.
Cobbler’s Corner, at the southeast corner of W. 44th Avenue and Alcott Street opened in 2016.
This project represents an adaptive reuse of a former theater building, renovating the 5,200sf
structure for restaurant and retail occupancy, while constructing two new structures totaling
approximately 9,000sf providing additional retail space and live/work units.
A second renovation project at the northeast corner of 44th and Umatilla Street was completed
in 2018. An existing 4,150sf building was remodeled and expanded for mixed-use (retail
office, medical office) occupancy.
Finally, the former Catholic Charities office building at 4045 Pecos Street was renovated in
2017, providing a mix of office and co-working space. The balance of the 2.62-acre parcel is
being developed with an attached residential project.
New Commercial Development in Neighborhood
Retail Development at West 38th Ave. & Kalamath and Lipan Streets
Cobbler’s Corner
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4475-95 Inca Street, Denver Page 16
44th & Umatilla 4045 Pecos Street
Residential Development – Recent residential construction has mostly been for-sale duplex
and attached housing product. In 2015, the pace of new construction in the neighborhood
increased, a trend that remains today.
The table below provides a price/sale trends for attached housing in the Sunnyside
neighborhood, including active listings and a summary of sales activity over the past three
years. Of the 34 active listings, 20 are under contract. New construction dominated the sales
activity over the past three years; the number of closed sales spiked three years ago, related
to the increase in construction. Prices also spiked up over this period and continued to climb
the following year. Market conditions stabilized over the past year, with a relative balance in
supply and demand. The average price paid for attached units closing over the past year was
just 1.7% higher than the prior year, while the median price increased by 4.8%.
Townhouse-Styled Attached Housing Trends
Sunnyside Neighborhood
Current Listings & Sales over Past 3 years
Active & Under Contract
Sales over Past Year
(1 – 365 days)
Sales 2
Years Ago
(366–730 days)
Sales 3
Years Ago
(731–1,095 days)
Number 34 81 sales 118 sales 44 sales
Low Price $349,900 $175,000 $239,000 $250,000
High Price $899,900 $900,000 $879,900 $785,000
Avg. Price $592,468 $591,654 $581,856 $506,655
Change +1.7% +14.8% +24.7%
Median Price $562,000 $575,000 $548,463 $507,365
Change +4.8% +8.1% +45%
Avg. DOM 75 days 95 days 394 days 71 days
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The table below provides a summary of recently completed attached housing projects in the
Sunnyside neighborhood. Each sold out within one to three months following completion.
Providing an indication of demand for new housing in the area. Prices for active projects in
the area range from approximately $500,000 to $900,000.
Sample of Recently Completed Townhouse Projects in Sunnyside
Project Units Comments
Zuni 44 Southwest Corner W.
44th Av. & Zuni
11 Units $500,000 to
$669,000
- Recently completed in October 2018;
- 11 units closed from October 2018 through mid- January 2019;
- Median price of $607,500.
Sunnyside 12 N/S W. 46
th Ave., west
of Shoshone St.
12 Units $449,900 to $483,250
- Recently completed in January 2018;
- 12 units closed from Feb., 2018 through mid-March 2018
- Median price of $464,000.
Pecos ROW Northeast Corner
W. 44th & Pecos St.
14 Units $407,599 to $524,599
- Recently completed in December 2017;
- 14 units closed from Dec. 2017 through mid-April 2018;
- Median price of $504,225.
Federal 5 3770-78 Federal Blvd.
5 Units $424,900 to $575,000
- Recently completed in February 2019;
- 5 units closed from Feb. 21st, to March 15, 2019;
- Median price of $449,000.
Kalamath 4 4301-07 Kalamath
4 Units $499,000 to $515,900
- Recently completed in July 2018;
- 4 units closed from July through September 2018;
- Median price of $507,400.
Shoshone 4 4601-11 Shoshone
4 Units $538,000 to $559,000
- Recently completed in November 2017;
- 4 units closed from November 2017 through February 2018
- Median price of $554,000.
Active Projects – There are three large active projects in the neighborhood, summarized below.
Railhouse Denver, a 29-unit townhouse project, is under construction at the southeast corner
of Inca Street and W. 40th Avenue, about 4.5 blocks south of the subject site. Most units
range from 1,217sf to 1,304sf and are priced from $494,000 to $549,000. Twelve of the 29
units are under contract.
4045 Row is a 33-unit, for-rent rowhouse project under construction at the southeast corner of
W. 41st and Quivas Street. Units will range from about 1,638sf to 1,810sf in size and are
being marketed for rent at $3,030 to $3,349 per month. The project is anticipated to be
finished by summer 2019.
The largest active project is Zia Sunnyside, a mixed-use development under construction at
W. 41st and Inca Street, about 3.5 blocks south of the subject lot. The full-block project will
feature 314 for-rent apartment units and 120 for-sale condominiums when complete, as well
as 8,500 square feet of ground floor retail space facing Inca and 41st. The project will include
paired six-story and eight-story towers constructed over below grade parking. The site is
adjacent to the RTD pedestrian bridge that spans the rail yard to the east, extending to light
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4475-95 Inca Street, Denver Page 18
rail station platform. Zia Sunnyside will be a mixed-income project, with 66 apartments being
deed-restricted as affordable rental units with occupancy limited for families making 80% or
less of the area’s average median income (AMI). As for the condominiums, 12 will be
dedicated for sale to families at or below the 80% AMI requirement and 13 will be restricted for
sale to families/individuals earning 95% or less of the AMI.
Aerial Image for Immediate Area
Light Rail Station and Station Area Development Plan – The subject site is within
reasonable walking distance to the light rail station at West 41st Avenue and Fox Street,
accessible via a pedestrian bridge that extends from W. 41st and Inca, over the adjacent rail
yard, to the station platform. Vehicle access is off Fox Street, via West 38th Avenue. This is a
park-and-ride station that that will also accommodate bus service. Long-range transportation
plans call for extending either 44th or 46th Avenue over the rail yard to improve access to Fox
Street from the Sunnyside neighborhood.
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Rail operations on the G-Line have been delayed due to technical issues related to the at-
grade crossing gate technology. RTD is now projecting an April 26, 2019 opening for the G-
Line, which serves the 41st and Fox station, being the first stop after trains leave Union
Station. The 11.2-mile line extends through northwest Denver, terminating in Wheat Ridge.
RTD – G-Line Map
In 2009, the City adopted the 41st and Fox Station Area Plan to help guide future development
around the light rail station. Key elements of the plan include development of a high-intensity
activity node on the east side of the station. As indicated in the Land Use Map published in
the Station Area Plan, the area west of the station is intended for higher intensity residential
and mixed land uses. The subject property is just over four blocks north from the pedestrian
bridge at Inca and W. 41st Avenue. This area is dedicated for future urban residential uses,
defined as a transition area. The area is intended to support single-family homes, duplexes,
townhouses and small apartment/condominium buildings providing a range of housing options
for residents living near the transit station.
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4475-95 Inca Street, Denver Page 20
41st & Fox Station Land Use Plan
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Consistent with the Station Area’s long-range land use goals, some property owners in the
neighborhood have sought, or are seeking, a rezone of their parcels to allow higher density
development. The table below provides a summary of four rezoning requests in the subject’s
immediate neighborhood; three have been granted. The fourth request was made in February
2019 and is under consideration.
Address Parcel Size Legacy Zoning
Change
4211 Inca St.
NW Corner Inca St. & W. 42
nd Ave.
18,750 sq. ft. I-A Rezoned to a C-RX-8
designation in 2017
4232 Jason St. 6,250 sq. ft. I-A Rezoned to a C-RX-8
designation in 2017
4000-90 Jason St. & 4001 Inca St.
NW Corner Jason St. & W. 42
nd Ave.
90,740 sq. ft. I-A Rezoned to a C-RX-8
designation in 2017
4001 Jason St. NW Corner Jason St.
& W. 42nd
Ave. 20,875 sq. ft. I-MX-3
Owner is seeking a zoning change to a C-MX-5 designation.
Blueprint Denver – The City of Denver is in the process of updating the city’s primary long-
range plan—Blueprint Denver. The most recent draft was issued on March 28, 2019 and
various City Council hearings will be held in April 2019. Any future rezoning of the subject
would need to be consistent with this plan once adopted (which is anticipated following the
hearing process).
The draft version of the plan identifies the subject’s immediate area as General Neighborhood
Context, designated for future low- to medium scale-scale multiple-unit residential uses, mixed
with one- and two-unit residential properties, and allowing-higher intensity residential uses to
be mixed through the area.
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4475-95 Inca Street, Denver Page 22
Area Demographic Data –
As estimated by the state demographer, Denver’s population increased by approximately
9,300 from July 2016 to July 2017, eclipsing the 700,000-mark in 2017. County’s population
totaled 705,651 residents by July 2017, or 16.7% higher than the July 2010 estimate of
604,879 residents. Over this same period, the number of occupied housing units
(households) increased by about 45,200, or 17%. As estimated by the state demographer,
about 34,900 new housing units were created in Denver County over this period, so the
housing vacancy rate declined from 7.5% in 2010 to 3.4% in July 2017. The table below summarizes basic demographic data for Denver County as compiled by the state demographer.
Denver County Demographic Trends
All figures reflect July of the given
year.
Total Pop.
% Change
Household Population
Avg. Household
Size
Total Housing
Units
% Change
Occupied Housing
Units (Households)
% Change
Housing Unit
Vacancy Rate
2017
Denver County 705,651 +16.7% 689,269 2.22 321,513 +12.2% 310,439 +17.0% 3.4%
2010
Denver County 604,879 588,898 2.22 286,635 265,233 7.5%
Source – Colorado Department of Local Affairs, Demography Section
Neighborhood Demographic Data – Demographic data for the subject’s market area is
summarized in the table below. CoStar Property compiles the demographic data to include
2010 census results, a 2019 estimate, and a forecast for 2024. Data is provided for both a
one- and two-mile radius from the approximate center of the Sunnyside neighborhood.
Although the immediate neighborhood is well established, the demographic data indicates the
area experienced rapid growth in both population and household counts from 2010 to 2019.
The population in the one-mile radius increased by about 6,300 over the period, or about 3%
on average annually from 2010 to 2019. Over the same period, the area’s household count
expanded by more than 2,500, or nearly 30% over the 2010 census count. Steady growth in
both population and household counts is forecast through 2023, with nearly 1,100 new
households anticipated over the 2019 estimate.
Population and household counts increased at a faster rate over the past nine years in the
two-mile radius; the population increased by 4.6% per year on average and household counts
increased by 4.9% annually. Looking forward, both population and household counts are
forecast to increase 2.2% per year on average through 2023. About 5,700 new households
are anticipated in the broader neighborhood over the next five years. Owner-occupied housing is more common in the immediate (one-mile) neighborhood compared to the two-mile radius. Within the immediate area, about 52% of households reside in owner-occupied housing compared to 44% in the two-mile radius.
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Average household incomes in the immediate area increased 58% from 2010 ($59,545) to 2019 ($94,312); over the same period, the median household income increased nearly 70% (from $41,861 to $71,088). Smaller annual increases in household incomes are anticipated through 2024.
Conclusion – Although the immediate neighborhood is well established, it continues to grow
at a rapid pace with active redevelopment projects, typically replacing low-density housing and
industrial properties with higher density residential projects. Forecasts for future population
and household growth point to the need for of new residential construction, including a mix of
owner-occupied and renter-occupied units, in the area.
Demographic Estimates and Projections
Radius from Subject One Mile Two Mile
Population:
2024 Projection 29,096 113,813
Growth 2019 - 2024 +10.0% +11.5%
Average Annual Rate +1.9%/yr. +2.2%/yr.
2019 Estimate 26,446 102,088
Growth 2010 - 2019 +31.3% +49.8%
Average Annual Rate +3.1%/yr. +4.6%/yr.
2010 Census 20,150 68,144
Households:
2024 Projection 12,260 54,158
Growth 2019 - 2024 +9.8% +11.8%
Average Annual Rate +1.9%/yr. +2.2%/yr.
2019 Estimate 11,165 48,458
2019 Owner-Occupied 52% 44%
2019 Renter-Occupied 48% 56%
2019 Average HH Size 2.30 2.00
Growth 2010 - 2019 +29.2% +53.9%
Average Annual Rate +2.9%/yr. +4.9%/yr.
2010 Census 8,644 31,488
2019 Avg. Household Income $94,312 $98,822
2019 Median Household Income $71,088 $72,997
2019 Housing Stock
Built 2010+ 20.3% 32.1%
Built 1990 – 2009 9.7% 17.8%
Built 1960 – 1990 10.7% 12.0%
Built <1959 59.3% 38.1%
2019 Median Year Built 1951 1989
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Neighborhood Map
Denver-Area Employment - Metropolitan Denver has recorded positive job growth each
quarter from mid-2010 through the current period. Annual employment growth peaked at 4%
in 2014; the pace of growth steadily declined from early 2015 through mid-2017. Employment
growth accelerated from mid-2017 through mid-2018 though has been on a declining trend
over the last eight months, in part due to renewed weakness in oil prices.
The area’s labor force expanded rapidly over the past two years, jumping by 60,000 in 2017,
and again by near 41,000 in 2018, resulting in an increase in the unemployment rate over the
period. Metropolitan Denver continues to be an attractive destination for job seekers, though
higher housing costs and slower employment growth dampened the in-migration over the past
two years.
Employment in the mining, logging, and construction sector, related to the rising oil prices and
the expansion in conventional energy industries, provided part of the underlying support for
metro area’s employment growth over the period. Employment in this sector grew at a 6%
annual rate midway through 2018, though fell to a roughly 2% year-over-year pace by year-
end of the year, following downward pressure on oil prices.
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Education and Healthcare services remains a major growth sector and is anticipated to
support the highest employment growth of any sector over the next five years. The sector has
benefitted from recent large public and private investments, including the completion of the
$1.8 billion VA hospital in Aurora, the Denver Health Administration’s new headquarters in
South Midtown, and Catalyst’s 300,000 SF digital health facility in the River North (RiNo)
neighborhood.
As indicated in the table below, the total number employed in the Denver-Aurora MSA
increased by approximately 161,000 from December 2014 to December 2018. Over this
same period, the MSA’s labor force increased by approximately 163,000 to 1,648,629 by
December 2018.
The metro area’s unemployment rate steadily declined from 2014 (4.8% average) to 2.7%
average in 2017. Employment growth declined to about 26,300 in 2018 compared to near
54,300 in 2017. The metro area’s labor force increased at a faster rate, growing by
approximately 41,400 in 2018, resulting in an increase in the area’s unemployment rate,
closing 2018 at 3.7%, the highest monthly rate since June 2015 (3.9%). ‘
The table below displays historical employment trends for the Denver-Aurora MSA reported by
the Colorado Department of Labor and Employment (CDLE).
Denver-Aurora MSA Employment Trends Year-end 2014 – 2018
(Not Seasonally Adjusted)
Year-End Employed at
Year End/ Period
New Employed Over the
Year
Annual Change
Year End Unemployment
Rate
Average Annual Unemployment
Rate
2014 1,426,231 +46,469 +3.4% 4.0% 4.8%
2015 1,461,733 +35,502 +2.5% 3.1% 3.7%
2016 1,507,045 +45,312 +3.1% 2.6% 3.1%
2017 1,561,361 +54,316 +3.6% 2.9% 2.7%
2018 1,587,640 +26,279
(over Dec. 2017 +1.7% 3.7%
3.0% Avg. over past yr.
Source: Colorado Department of Labor & Employment
National and local employment growth is summarized in the graph below. Locally, the
employment growth rate has exceeded the national average, though it has been on a
declining trend from mid-2015 to the current period.
As forecast by Moody’s Analytics, both the national and local the year-over-year employment
growth rate is projected to decline each year through 2021, falling into negative territory in 2020
and 2021, prior to rebounding by the end of 2021.
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As indicated in the table below, according to the Manpower Employment Outlook Survey,
about 22% of area employers are anticipating adding staff in the first quarter of 2019, down
from 25% in the fourth quarter 2018 survey and 23% in the first quarter of 2018. The number
of firms planning layoffs is 6%, down from 7% posted in the prior quarter; though up
significantly from the 1st quarter 2018 figure of 2%. The long-term decline in companies hiring
and increase in companies planning layoffs suggest slower employment growth in 2019 and
2020.
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Denver County Housing Market Conditions
The broader neighborhood has supported considerable new residential development over the
past several years, and development is active at present, including a mix of for-sale units and
apartments. As indicated in the prior section, demographic projections indicate the area’s
population and household count will continue to increase at a relatively rapid rate through
2022, prompting the need for additional housing.
Denver County Residential Permit Activity The table below provides annual residential
permit activity in Denver County from 2014 through 2018, as well as year-to-date activity
through February. The data is compiled by the Home Builder’s Association of Metro Denver
(HBA).
As noted from the table, permits issued for single-family housing in Denver County increased
each year since 2014. Nearly 11,500 single-family units were permitted over the period
including 387 in the first two months of 2019, following 2,591 units permitted in 2018.
Permit activity for attached single-family housing surpassed the number issued for detached
housing for the first time in 2016, and this trend has continued through the current period.
Permits issued for attached single-family housing accounted for 64% of the total single-family
permit activity in 2019, following 60% in 2018 and 58% in 2017.
New apartment and condominium permit activity accounted for the lion share of new housing
constructed in the city over the period examined. Since 2014, over 31,000 new multifamily
units have been permitted in the city, or about 73% of the total activity over the five-year
period.
Single-Family Units Permitted by Type and Year for
Denver County – Residential Permit Activity for New Housing Units
Annual for 2014 –2018 & 2019 YTD (February)
Type / Period 2019
(Jan./Feb.) 2018 2017 2016 2015 2014
Single Family Detached 141 1,042 1,015 942 1,066 1,022
% Change Over Prior Period -14.5% +2.7% +7.7% -11.6% +4.3% +24.5%
Single-Family Attached 246 1,549 1,426 1,287 886 847
% Change Over Prior Period -0.4% +8.6% +10.8% +45.3% +4.6% +27.4%
Multi-Family/
Apts. & Condos 926 6,241 7,784 5,567 6,334 4,197
% Change Over Prior Period +88.2% -19.8% +39.8% -12.1% +50.9% +100%
Total 1,313 8,832 10,225 7,796 8,286 6,066
% Change Over Prior Period +45.2% -13.6% +31.2% -5.9% +36.6% +308%
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Denver County Home Sales Activity & Prices – Conditions in Denver County generally
mirrored the overall market for both 2017 and 2018. The number of closings over the past
year was down 3.6% from 14,195 in 2017 to 13,677 in 2018; however, new listings jumped
2% over the year providing more choice for buyers.
Denver County – 2017 vs. 2018
Both average and median sales prices have increased each of the past two years. The
median price paid in 2018 was $425,000, 10.4% higher than the median price paid in 2017
($385,000); the 2017 price was 5.5% higher than the 2016 median price of $365,000.
The average price paid in 2018 was about 9% higher than the 2017 average, surpassing $500,000 for the first time last year. Average prices increased about 6% from 2016 to 2017. Average days on market remained stable at 25 in 2018, unchanged from 2017, indicating an active market.
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Denver County - Year-to-Date Data – As indicated in the graphs below, through February
2019, year-to-date new listings jumped 17%, though closed sales declined 3.7% to 835 units.
The average marketing period increased to 39 days, up from 34 days over the same period in
2018. The median price paid was $405,000, off 4.7% from 2018, though the average price
increased by 2.4% to $506,649.
The graph below shows the six-month trailing average for median sold prices for properties in
Denver County and the overall MLS Area. Generally, Denver County has experienced wider
swings in prices over the period, though price changes were more stable over the past three
years. The pace of appreciation has declined since peaking in the first quarter of 2018.
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SUMMARY DESCRIPTION of the SUBJECT PROPERTY
General Information - This appraisal considers the market value of the property as is. The
appraiser has inspected the subject parcel and photographs taken at this time are included
below. An associate of the property contact provided a copy of an Improvement Location
Certificate (ILC) completed in November 2016 and a Phase 1 Environmental Site Assessment
completed in October 2016. Additional information was gathered from Denver County
records. Items not available to the appraiser include a title commitment, current property
survey and a current environmental site assessment.
Parcel Description – The subject parcel is a rectangular tract, on the west side of Inca
Street, approximately 90 feet south of the intersection with West 45th Avenue. It backs to a
paved alley along its west boundary. As indicated from lot dimensions referenced on the
ILC, the parcel measures approximately 9,100 square feet (78.2 feet wide by 125.0 feet
deep).
Terrain is generally level across the parcel. There is a mix of chain link and wood fencing
along the perimeter, including a chain link gate off the Inca frontage. Most of the open area
is gravel-covered, though there is some concrete paving towards the rear of the parcel.
There is a 20’ by 30’ (+/-) concrete pad near the center-rear of the parcel that supports an
aluminum-framed, nylon canvas-covered storage area. The framing is bolted to the pad so
could be removed.
There are two garage/storage structures at the rear of the parcel. The smaller structure,
approximately 397 square feet, is positioned near the southwest corner of the parcel. It is a
wood framed structure, with painted siding, constructed over a concrete slab. The roof is
slanted to promote drainage and there is a single metal garage door.
The larger structure is approximately 691 square feet, positioned near the northwest corner
of the lot. It is also of wood frame construction, with painted siding and trim and slanted roof.
The structure is built over a concrete slab; there is a single metal garage door and a man
door. This structure appears to have electrical service. Both garages are only in fair
condition, though appear to provide reasonable covered storage.
Public utility services are available to support development including water and sanitary
sewer service.
Lease - The property is leased through June 30, 2019. The tenant, RDT Transport, LLC,
uses the property for storage and parking. The rent is set at $1,500 per month and the
tenant pays electricity charges directly to the utility provider. The tenant is required to
maintain a liability insurance policy and to maintain the property. All other expenses,
including taxes, are borne by the property owner.
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Environmental and Soil Conditions - No current environmental studies or soils reports for
the subject parcel were available to the appraiser. An associate of the property contact
provided a copy of a Phase 1 Environmental Site Assessment completed in October 2016. As
stated in the document: “this assessment revealed no recognized environment conditions
(RECs) in connection with the Property.”
The tenant uses the site to park trucks and appears to also being doing ‘light’ vehicle
maintenance. There are various ‘containers’ on site, the contents of which (if any) are
unknown.
To the best of the appraiser’s knowledge, there are no soil or sub-soil conditions, potentially
hazardous materials, or toxic waste problems affecting the parcel; however, testing for and
discovery of such material and/or conditions goes beyond the scope of this appraisal and
requires specialized equipment and technical expertise in environmental analysis. The value
conclusion of this report assumes that the soil and subsurface conditions are adequate to
support the existing construction. The Client and purchaser are encouraged to obtain an
update to the Phase 1 Assessment if this is a matter of concern.
SUBJECT PHOTOGRAPHS
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Floodplain Status: Based on FEMA Community Map No. 080046, Panel 0088H, effective November 20, 2013, the subject property is not in a recognized flood hazard area.
Partial Copy of Floor Map
Easements/Encroachments/Restrictions: The ILC provided does not reference any
easements or encroachments affecting the property. No obvious adverse easements or
encroachments were observed during the property inspection.
The appraiser is aware of no deed restrictions or other limitations by title; however, the
appraiser cannot guarantee that no such restrictions exist. It would be prudent for the
purchaser and client to obtain a title commitment and current property survey for review.
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Partial Copy of Improvement Location Certificate Provided
Aerial Image of Parcel
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4475-95 Inca Street, Denver Page 35
Zoning: I-A UO-2 (Light Industrial District) Employment area intended to contain office, business, warehousing, and light industrial uses that are generally
The intent of the I-A district is to accommodate employment areas developed with offices,
service properties, warehousing and related light industrial uses that are compatible with
adjacent residential or mixed-use zone districts. Accordingly, I-A zoned areas serve as a land
use buffer between residential uses and more intensive industrial land uses. Allowed uses in
the district must be enclosed within a structure, unless specifically allowed to operate out of
doors; outside storage is not permitted.
The district allows a variety of light industrial uses, including warehousing, assembly, light
manufacturing, distribution, and related uses that have no significant detrimental effect on
neighboring land uses. The regulations allow for a medium intensity of development to achieve
compatibility with adjacent improved parcels. New residential use is not allowed in the district.
The area is also covered by a use overlay (UO-2) that allows billboard signs.
Zoning Requirements – I-A
Zoning Standard Requirement Subject Property Conforms?
Allowed Uses
Includes office, office/flex, warehousing, assembly, & light manufacturing industrial uses
Storage Garages Yes
Minimum Lot Size None 9,100 sq. ft. Yes
Maximum Building Height No Limit 12 feet +/-. Yes
Maximum Floor Area Ratio 2.0-to-1 < 2.0-to-1 Yes
Setbacks
Front – 20 feet
Side – 0 feet
Rear – 0 feet
Front – > 20 feet
Side – > 0 feet
Rear – > 0 feet
Yes
Yes
Yes
Minimum Lot Frontage None 73 feet +/- Yes
On-Site Parking 0.3 (+/-) per 1,000sf Ample Yes
Zoning Analysis - The subject property has appropriate zoning in place for the existing use
as storage and parking. The existing use/improvements appear to be a legal and conforming.
The zoning is compatible with the surrounding environment, providing for similar and
complementary land uses in the subject’s immediate neighborhood.
The existing use/improvements appear to be a legal and conforming.
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As noted previously, development in the immediate area will be guided by the 41st and Fox
Station Area Plan as well as the update to the Blueprint Denver plan, anticipated to be
adopted this year. The draft copy of the Blueprint Denver update identifies the subject’s
immediate area as designated for future low- to medium scale-scale multiple-unit residential
uses, mixed with one- and two-unit residential properties, and allowing-higher intensity
residential uses to be mixed through the area.
The Land Use Map published in the Station Area Plan, identifies the subject’s immediate area
as dedicated for future urban residential uses, being a transition from more intense
development to the south and established residential uses in the Sunnyside neighborhood to
the west. The area is intended to support moderate density housing options (up to 3 stories),
including townhouses and small apartment/condominium buildings for residents wising to live
near the transit station.
There is precedent for rezoning properties from the I-A designation to a more intense mixed
residential designation, consistent with the Station Area’s long-range land use goals. The
property owner has completed a pre-application meeting with city zoning personnel regarding
potentially seeking a change in zoning to C-MX5 or C-MX-8. There is reasonable prospect
that the parcel could be rezoned to a residential mixed-use designation given the Station Area
Plan and other rezoning in the area, though potentially at a lower density (i.e. C-MX-3 or
similar).
Partial Copy County Zoning Map
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Assessment and Property Tax Data
The table below summarizes property assessment and tax data for both properties combined.
The assessor’s combined 2018 valuation for the property is $138,500; with a 29% assessment rate, the combined 2018 assessed value is $40,170. The 2018 mill levy was set at 77.365
mills (7.7365%), providing a combined 2018 tax liability of $3,107.75, payable in 2019. Prior
year property taxes were billed at $3,098.47 and reported as paid, with no delinquencies.
2018 Assessment, 2018 taxes due in 2019 and 2017 taxes paid in 2018
Schedule Numbers: 02211-22-027-000 02211-22-028-000
2018 Assessor’s Actual Value $138,500
2018 Assessed Value (29%) $40,170
2018 Mill Levy 77.365 (7.7365%)
2018 Property Taxes Payable in 2019 $3,107.75
2017 Property Taxes Paid in 2018 $3,098.47
SUBJECT PHOTOGRAPHS
Parcel viewed from Inca Street
Looking West across Parcel Garage Improvements
An Appraisal Report A Future Development Parcel
4475-95 Inca Street, Denver Page 38
SUBJECT PHOTOGRAPHS
Looking East across the Parcel Larger Garage
Looking East along the North Boundary Smaller Garage
Looking West across the Parcel
An Appraisal Report A Future Development Parcel
4475-95 Inca Street, Denver Page 39
HIGHEST AND BEST USE ANALYSIS
Highest and best use may be defined as:
Highest and best use. The reasonably probable and legal use of vacant land or an improved
property, which is physically possible, appropriately supported, financially feasible, and that
results in the highest value.4
In the analysis of pertinent data, four criteria are applied in the following order to develop
adequate support for the appraiser’s highest and best use determination:
1. Legally permissible
2. Physically possible
3. Financially feasible
4. Maximally productive
These criteria are generally considered sequentially; however, the tests of physical possibility
and legal permissibility can be applied in either order, but they both must be applied before
the tests of financial feasibility and maximum productivity.
The process for determining the highest and best use of a property has four main steps. The
first two are applied in the analysis of highest and best use of the land or site as though
vacant; the third and fourth steps are applied in the analysis of the highest and best use of the
property as improved.
1. Determine the highest and best use as of the site as though vacant.
2. Determine the ideal improvement for development of the site.
3. Compare the ideal improvement and the existing improvement.
4. Conclude whether the improvements should be maintained as is or be
renovated, converted, or demolished.
4 The Dictionary of Real Estate Appraisal, 5
th ed. (Chicago: Appraisal Institute, 2010), s.v. “highest and best use”, p.93
An Appraisal Report A Future Development Parcel
4475-95 Inca Street, Denver Page 40
Highest and Best Use as Vacant
Legally Permissible – Public and private restrictions in place affect land use of both vacant
and improved properties. Zoning and other land use restrictions are considered in testing
legal permissibility, along with building codes and any private restrictions that may be in place.
Consideration is also given to the potential for modifications or changes to current restrictions.
With respect to the subject property, there are no know private restrictions, deed restrictions
or other limitations on use or title. The appraiser is not aware of any atypical building code
issues that affect the property.
Zoning and city-produced development plans for the immediate area are the primary attributes
that affects legally permissible uses on the subject parcel. The property’s current zoning was
discussed in detail in the “Zoning/Land Use” section of the report. As noted, the parcel
carries a light industrial (I-A) zoning designation that limits development to light industrial, flex,
office and related land uses.
As noted previously, proximity to the light rail station is driving development in the immediate
area. The station area plan in place as well as the Blueprint Denver plan will guide
development on the parcel. Land use plans in place identify the subject’s immediate area as
dedicated for future urban residential uses, up to 3 stories, including townhouses and small
apartment/condominium buildings for residents wising to live near the transit station.
There is precedent for rezoning properties from the I-A designation to a more intense mixed
residential designation, consistent with the Station Area’s long-range land use goals. The
property owner has completed a pre-application meeting with city zoning personnel regarding
potentially seeking a change in zoning to C-MX5 or C-MX-8. There is reasonable prospect
that the parcel could be rezoned to a residential mixed-use designation given the Station Area
Plan and other rezoning in the area, though potentially at a lower density (i.e. C-MX-3 or
similar).
Physically Possible - The next test of highest and best use is that of physically possible
potential uses. As discussed in the site description section of the report, there are no
significant physical limitations that would affect development of the subject site with the
exception of its size. At approximately 9,100 square feet, the site is large enough to support a
moderate-scale multiple unit residential project. Terrain is generally level and provides no
significant impediment to development. The site has access to utility services to support
development. The parcel is not in a recognized flood hazard area and there is no known
adverse drainage or subsurface soil issues. There are no hazardous substances or other
adverse physical conditions that would affect its development.
An Appraisal Report A Future Development Parcel
4475-95 Inca Street, Denver Page 41
Financially Feasible – Financial feasibility is defined as
Financial feasibility. …the ability of a property to generate sufficient income to support
the use for which it was designed.5
Financially feasible uses are those that are physically possible, legally permissible, and that
produce a positive return to the land after considering risk and all cost to create and maintain
the use; in short, any use that result in a positive land value. The test of financially feasibility
provides evidence whether market conditions are adequate to justify use of the property in a
legally permissible and physically possible manner.
In short, for a use to be financially feasible there must be an active market that values that use
sufficiently to cover the cost of providing it, including providing appropriate entrepreneurial
profit—effectively providing appropriate support. Financial feasibility can be inferred through
market activity, as well as measured through financial analysis.
The subject is with in an area of mixed light to medium-intensity industrial land uses,
intermixed with service-commercial uses and both new and existing residential development.
Access to primary arterials (W. 38th Avenue, I-25 and I-70) is convenient from the subject’s
immediate area. Additionally, the property is in close proximity to a light rail station.
Supportive retail services are close by, typically found along 38th Avenue and Federal to the
west.
Although zoning allows industrial and related uses, the subject’s immediate area is in a state
of transition, supporting new residential development, consistent with the broader
Sunnyside/Northwest Denver market area. Given the surrounding development and lack of
exposure to a busier street, the parcel is best suited to multifamily residential development.
As discussed previously in the report, the neighborhood remains in a growth phase,
supporting new residential construction and supportive commercial/retail projects along
arterial streets. New development includes a mix of duplex style projects as well as
townhouse and apartment forms. The area is expected to continue to support redevelopment
of older, lower-density uses with higher density, multiple-unit residential uses, especially
proximal to light rail stations.
Demographic forecasts indicate annual increases anticipated for both population and
household counts within the community and the subject’s general market area. Approximately
1,100 new households are anticipated in the immediate area by 2024.
Anticipated growth in households will necessitate the need for new residential construction in
the community over the period. Given the current mix of renter-occupied housing to owner-
occupied housing, the general market area will accommodate both new owner-occupied
housing units and rental properties.
5 The Dictionary of Real Estate Appraisal, 5
th ed. (Chicago: Appraisal Institute, 2010),.s.v. “financial feasibility”, page 79
An Appraisal Report A Future Development Parcel
4475-95 Inca Street, Denver Page 42
Household incomes in the area are sufficient to support new residential construction. Based
on 2019 figures, nearly 50% of households in the one-mile area have incomes above $75,000.
New residential construction is serving to draw more affluent households into the area and
there is ample demand for attached units ranging in price from approximately $450,000 to
$800,000.
Demographic projections suggest that there will be sufficient demand to the area to support
additional apartment and multi-unit residential development. The demand for new housing is
expected to continue over the immediate to mid-term so the financial feasibility of new multi-
unit residential development at the subject site is considered supportable.
The parcel is sufficient in size for an allowed multiple unit project. Rezoning the property for
residential use and holding for future development of a multiple unit residential use is
considered a financially feasible use under current market conditions.
Maximally Productive - The maximally productive use of the subject site considers all of
the available development alternatives. Interest rates are anticipated to remain reasonably
stable over the near to mid-term and financing finished residential properties is reasonably
available to qualified buyers. The recent history of the area, anticipated future need for
additional housing to accommodate growth, as well as improving market conditions support
construction of new multiple-unit housing in the area. The neighborhood has supportive retail
services in immediate proximity, as well as established schools, recreational amenities, and
access to employment centers.
Development of a multi-unit residential complex is considered the maximally productive use of
the parcel, generating the highest residual land value. The property has a suitable location for
this type of development, which would be compatible with adjacent and nearby land uses. As
indicated in the prior neighborhood analysis, residential development is active in the
immediate neighborhood and more projects are planned.
Conclusion: The maximally productive and ideal improvement would be rezoning the
property and holding for future residential development with a multiple unit project.
An Appraisal Report A Future Development Parcel
4475-95 Inca Street, Denver Page 43
VALUATION PROCEDURES AND METHODOLOGY
The estimation of a real property's market value involves a systematic process in which the
problem is defined; the work necessary to solve the problem is planned; and the data required
are acquired, classified, analyzed and interpreted as an estimate of value. In this process, the
appraiser considers three approaches to value: Cost, Sales Comparison, and Income.
Cost Analysis - In the Cost Analysis, the appraiser first estimates the value of the subject,
under its highest and best use, site by comparing it to similar sites that recently have sold.
The reproduction or replacement cost new of the improvements is estimated; appropriate
deductions for depreciation are estimated and deducted from the estimated cost to derive a
present value. The present value of the improvements combined with the opinion of value for
the land provides the resultant opinion of value derived through the Cost Analysis.
Sales Comparison Analysis - Sales Comparison Analysis involves the comparison of the
subject property to similar properties that have recently sold. The sales prices of these
properties are adjusted to reflect the respective differences of each from the subject to
indicate a value range. The value range indicated by the adjusted comparable properties is
then used to establish an indicated value for the subject property.
Income Analysis - Income Analysis involves a process in which the anticipated future
benefits are reduced to a present value figure. The appraiser is primarily concerned with the
benefits from net income and reversionary proceeds. This approach involves estimating
potential gross income by comparison with competing properties, and estimating expenses
(derived from historical and/or market experience), to determine a projected net income
stream. Under direct capitalization, the income stream is capitalized into an indication of
present value—with an appropriate capitalization rate extracted from competitive properties in
the market, and/or by using other techniques when applicable. Alternatively, the income
stream, as well as the reversion of the property, is converted into an estimate of value by use
of a discounted cash flow analysis.
Reconciliation of Value - The final analytical step in the valuation process is reconciliation of
the value indications obtained from the different approaches to value. The appraiser must
consider the reliability and applicability of each approach relative to the individual
characteristics of the subject. The final value opinion reflects the degree of strength of each
approach.
An Appraisal Report A Future Development Parcel
4475-95 Inca Street, Denver Page 44
Methodology Specific to Analysis of the Subject - Three approaches are considered
in estimating the market value of the subject property. Given the highest and best use of the
property is to hold for future residential redevelopment, the parcel is appraised as a
development lot. Only the sales comparison approach is deemed relevant to this analysis. As
a single development lots in a residential area, the cost approach is not considered applicable
to deriving an opinion of market value given the difficulties of determining the cost and
contribution to value of shared common infrastructure improvements that the parcel shares
with adjacent and nearby sites. The income approach is also not used in this analysis as
development parcels the scale and utility of the subject are nearly always sold for
development, rather than being leased for development.
Completion of the cost and income approaches are not deemed necessary to provide a
credible pinion of market value for the subject property and elimination of these approaches
is not considered to result in a misleading conclusion of value.
An Appraisal Report A Future Development Parcel
4475-95 Inca Street, Denver Page 45
SALES COMPARISON ANALYSIS – Land Value Analysis
The Sales Comparison Approach, also termed the Market Approach, involves the comparison
of the subject property to similar properties which have already sold, or which are currently
offered for sale, with consideration given to their respective differences from the subject. This
process tends to form a pattern of indicators from which the appraiser can estimate the value
of the subject property.
The sales comparison approach is defined as:
Sales comparison approach. The process of deriving a value indication for the
subject property by comparing similar properties that have recently sold with the
property being appraised, identifying appropriate units of comparison, and making
adjustments to the sale prices (or unit prices, as appropriate) of the comparable
properties based on relevant, market-derived elements of comparison. The sales
comparison approach may be used to value improved properties, vacant land, or
land being considered as though vacant when an adequate supply of comparable
sales is available.6
The elements of comparison are defined as:
Elements of comparison. The characteristics or attributes of properties and
transactions that cause the prices of real property to vary; include real property
rights conveyed, financing terms, conditions of sale, expenditures made
immediately after purchase, market conditions, location, physical characteristics,
and other characteristics such as economic characteristics, use, and non-realty
components of value.7
A market value indication is developed for the subject through the sales comparison approach
by comparing it to similar properties that have recently sold or are being offered for sale. By
analyzing the motivations of buyers and sellers of competing/similar properties, a value
indication can be derived through comparative analysis that considers the similarities and
differences that affect value between the comparables and the subject. Similarities and
differences refer to elements of comparison. There are two categories of elements of
comparison—transactional elements and property elements. Transactional elements are
considered in a specific sequence shown below:
property rights,
financing terms,
conditions of sale,
consideration of any expenditures after purchase required of the purchaser;
and consideration of market conditions.
6 The Appraisal of Real Estate, 14
th ed. (Chicago: Appraisal Institute, 2013), page 377.
7 The Dictionary of Real Estate Appraisal, 5
th ed. (Chicago: Appraisal Institute, 2010), s.v. “elements of comparison”, page 66.
An Appraisal Report A Future Development Parcel
4475-95 Inca Street, Denver Page 46
Property elements consider location and physical differences between the subject and the
comparable property. Legal characteristics are also considered including zoning and building
codes. Finally, consideration is given to any non-realty components included in the sale or the
contributory value of any intangible elements. The sales comparison approach is grounded in
the principles of supply and demand, substitution, balance, and externalities.
The interaction of buyers and sellers, negotiating in their best interest, set prices in active
markets; buyers provide the market demand and properties for sale, or to be offered for sale
in the foreseeable future provide the supply. Demand factors are analyzed through
consideration of potential users of a particular property type, their tastes and preferences, and
their purchasing power. The analysis of supply considers properties being offered for sale in
the market, properties being constructed, and those being planned for construction.
Every property is unique, though for nearly all properties there are reasonable substitutes or
alternatives in the market. The principle of substitution holds that the value of a property is
generally set by the cost of acquiring a reasonable substitute, providing similar utility, in a
reasonable timeframe. The process of applying the sales comparison approach includes:
Researching the competitive market for properties that are similar to the subject that
have recently sold, are listed for sale, or under contract;
Verify the comparable sales and property data through research and confirmation to
determine its accuracy, buyer motivations, economic characteristics, and other
significant factors to ensure the credibility of the comparison;
Select the relevant unit of comparison that best matches buyer / seller thinking and
develop a comparative analysis for each section;
Analyze the sales for differences with the subject using appropriate elements of
comparison;
Reconcile the various value indications produced from the comparative analysis into a
value indication for the subject property.8
Selection of Comparables - The appraiser has researched sales of other parcels with
industrial zoning in place, though by virtue of their location are suited for future
residential/mixed-use redevelopment. The focus of the search was for parcels located in
north Denver, proximal to light rail stations. Parcels ranging in size from approximately
6,250sf to 20,000sf. Sales closing over approximately the past 27 months were considered,
with a preference for the most current and similar in terms of scale.
Sales selected are considered representative of the market and the best available from
a limited number of potential sales. Within the metro Denver market area, buyers and
sellers rely on price per square foot of lot area as a means of comparison; likewise, in the
analysis below, adjustments to a sale to account for differences with the subject are applied to
the price paid per square foot for that sale.
8 Summarized from The Appraisal of Real Estate, 14
th ed. (Chicago: Appraisal Institute, 2013), page 381-382.
An Appraisal Report A Future Development Parcel
4475-95 Inca Street, Denver Page 47
COMPARABLE LAND SALES SUMMARY (1 of 2)
#
Location
Neighborhood
(Legal)
Site Area
Zoning in Place (Land Use Plan
Potential)
Attributes Seller/ Buyer
Financing
Sales Date/
Price
$ Per Sq. Ft.
1
4149 Jackson St. Denver, 80216
(Eyria/Swansea)
(Lots 23 & 24, the Union Pacific Employe’s Land
Company’s Re-Subdivision of Block 7
Swansea Heights)
8,333 sq. ft. Rectangular (125’ x 66’ +/-) lot;
Corner lot with level terrain;
Across from light rail station at
Colorado Blvd. & E. 40th Av.;
Improved with 1,050sf +/- garage;
Purchased for future residential
redevelopment which will require
rezoning;
Neighborhood plan identifies area
for 2-8 story residential/mixed-use
development.
3joe, LLC Seller
04-Feb.-2019
$800,000
$96.00/sq. ft.
I-A Lt. Industrial
(TOD Mixed Use with potential for
2-8 stories)
Unbinding Word, LLC.
Buyer
Cash to Seller
2
3855 Inca Street Denver, 80211
(Sunnyside)
(Lots 25-30, Block 46, Viaduct Addition)
18,750 sq. ft. Rectangular (125’ x 150’ +/-) lot;
Corner lot with level terrain;
Walking distance to 41st/Fox light
rail station;
Improved with a 4,600sf off/whse.;
Purchased for future residential/
mixed-use redevelopment.
Zoning in place allows residential
uses up to 3 stories;
Station area plan identifies parcel
for urban residential up to 8
stories.
B-W Masonry, Inc. Seller
30-Jan-2019
$1,675,000
$89.33/sq. ft.
I-MX-3 Industrial/ Mixed-Use
(Urban Residential with potential for
2-8 stories)
East Hinsdale Office Park, Ltd.
Buyer
Cash to Seller
3
3832 Jason St. Denver, 80211
(Sunnyside)
(Lots 5-6, Block 46, Viaduct Addition)
6,250 sq. ft. Rectangular (50’ x 125’ +/-) lot;
Interior lot. mostly level terrain;
Walking distance to 41st/Fox light
rail station;
Improved with a 899sf house &
garage;
Purchased for future residential
redevelopment.
Zoning in place allows residential
uses up to 3 stories;
Station area plan identifies parcel
for urban residential up to 8
stories.
Onqu Realty, Inc. Seller
16-Nov-2018
$430,000
$68.80/sq. ft.
I-MX-3 Industrial/ Mixed-Use
(Urban Residential with potential for
2-8 stories)
Jason Street at Sunnyside, LLC
Buyer
Cash to Seller
An Appraisal Report A Future Development Parcel
4475-95 Inca Street, Denver Page 48
COMPARABLE LAND SALES SUMMARY (2 of 2)
# Location Site Area
Zoning Attributes
Seller/ Buyer
Financing
Sales Date/
Price
$Per Sq. Ft.
4
3725 Jason Street Denver, 80211
(Highland)
(Lots 18 - 23, Block 52, Viaduct Addition)
18,750 sq. ft. Rectangular (150’ x 125’ +/-) lot;
Interior lot with gentle slope;
Reasonable distance to 41st/Fox
light rail station;
Improved with a 5,760sf off/whse;
Purchased for future residential
redevelopment.
Zoning in place allows residential
uses up to 3 stories;
Station area plan identifies parcel
for urban residential up to 3 stories.
Ruby Irwin, LLC Seller
16-Nov-2018
$2,200,000
$117.33/sq. ft.
I-MX-3 Industrial/ Mixed-Use
(Urban Residential with
potential for 1-3 stories)
3725 Jason St, LLC
Buyer
Cash to Seller
$1,875,000 loan from private, third
party)
5
4255 Jason St. Denver, 80211
(Sunnyside)
(Lots 27-30, Block 15, Viaduct Addition)
12,500 sq. ft. Rectangular (125’ x 100’ +/-) lot;
Corner lot with level terrain;
Reasonable walking distance to
41st/Fox light rail station;
Improved with a 7,432sf off/whse.;
Purchased by adjacent property
owner for assembly into a larger
potential redevelopment property;
Zoning in place allows residential
uses up to 3 stories;
Station area plan identifies parcel
for urban residential up to 8 stories.
Corporate Source of Colorado, Inc.
Seller
05-March-2018
$1,250,000
$100.00/sq. ft.
I-MX-3 Industrial/ Mixed-Use
(Urban Residential with
potential for 2-8 stories)
Martinez Estates, LLC
Buyer
Cash to Seller
New $1,163,000 CNV bank loan
6
4232 Jason Street Denver, 80211
(Sunnyside)
(Lots 6 & 7, Block 14, Viaduct Addition)
6,250 sq. ft. Rectangular (50’ x 125’ +/-) lot;
Interior lot with level terrain;
Reasonable walking distance to
41st/Fox light rail station;
Improved with a 1,932sf house with
a 749sf unfinished basement;
Purchased for future residential
redevelopment.
Zoned I-A at time of sale;
subsequently rezoned to C-RX-8
after purchase;
Station area plan identifies parcel
for urban residential up to 8 stories.
Charles V. Fresquez
Seller
13-June-2017
$425,000
$68.00/sq. ft.
I-A Lt. Industrial
(Urban Residential with
potential for 2-8 stories)
Gearheart Moore Holdings, LLC
Buyer
Cash to Seller
New $319,000 CNV bank loan
An Appraisal Report A Future Development Parcel
4475-95 Inca Street, Denver Page 49
Elements of Comparison Considered:
Where necessary, adjustments are made to comparable sales to account for differences with
the subject for appropriate elements of comparison. There are two categories of
comparison—transactional adjustments and property adjustments. Adjustments for
transactional differences are made first, in a specific order as listed below.
Property Rights Conveyed – This adjustment considers the property interest transferred in
the sale. The adjustment grid provides an indication of the fee simple value for the subject
parcel; consideration of the lease in place will be addressed at the end of this section.
Sale #1 was purchased for future development potential; the parcel is improved with a 1,050sf
+/- warehouse that was vacant at closing. The purchaser acquired the fee simple property
interest.
Sale #2 was purchased for future development potential; the parcel is improved with 4,600sf
+/- of office/warehouse space. The seller vacated the property prior to closing and the
purchaser acquired the fee simple property interest.
Sale #3 was purchased for future development potential; the parcel is improved with an 899sf
+/- house and 546sf +/- detached garage. The property was vacant at the time of sale and the
purchaser acquired the fee simple property interest.
Sale #4 was purchased for future development potential; the parcel is improved with a 5,760sf
office warehouse. The seller vacated the property after closing and the purchaser acquired
the fee simple property interest.
Sale #5 was purchased for future development potential; the parcel is improved with a 7,432sf
+/- office/warehouse. The seller vacated the property after closing and the purchaser
acquired the fee simple property interest.
Sale #6 was purchased for future development potential; the parcel is improved with an 899sf
+/- house and 546sf +/- detached garage. The property was vacant at the time of sale and the
purchaser acquired the fee simple property interest.
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4475-95 Inca Street, Denver Page 50
Financing Terms – Differences in financing arrangements can affect the price paid for a comparable, warranting an adjustment for this factor. The subject is appraised to cash terms. For Sales #1, #2, and #3, purchasers paid cash directly and no adjustment is indicated. For Sales #4, #5, and #6, purchasers obtained financing from local banks or unrelated private
parties, paying cash for the balance; in each case, the sellers received cash so no
adjustments are warranted for this factor.
Conditions of Sale – This adjustment considers any unusual motivations of either the buyer
or seller that may have influenced the sales transaction, including concessions or credits paid
at closing by either party.
The purchaser for Sale #1 reported that the sellers were motivated to dispose of the property
quickly and accepted a discounted offer to achieve a quick closing. Based on a discussion
with the purchaser and other market data examined, the discount is estimated at 10%, serving
as the basis of the adjustment. The remaining sales sold without reported discounts, or concessions, so no adjustments are warranted.
Expenditures Made After Purchase – Prudent buyers account for known expenses anticipated after purchase to correct deficient items or to realize the full utility of the property.
Each sale examined was purchased for future redevelopment, which would require
demolishing improvements in place. This additional expense is considered expenditure after
purchase, warranting consideration of this additional cost. It is noted that the demolition
expense can be partially offset by a potential water tap credit, and potential rental income
during a holding period.
The table below provides an estimate of demolition expense and tap credits for the
comparable sales. Demolition expenses are estimated from appraiser file data, as well as
data published in the Marshall Valuation Service, and the National Repair and Remodeling
Estimator published by the Craftsman Book Company. Water tap credits were estimated
based on data provided by Denver Water. The demolition expense and potential water tap credit for the subject parcel is considered at the end of this section. Sale #1 sold with a small, unheated garage to be demolished; the parcel Is fenced, though otherwise unimproved.
Sale #2 includes a warehouse and separate office building, totaling approximately 4,600sf,
along with perimeter fencing. A water tap credit can offset part of the demolition expense.
The purchaser is marketing the property in hopes of finding a short-term tenant to provide
income over the holding period. Potential short-term (estimated at 18 months), net rental
An Appraisal Report A Future Development Parcel
4475-95 Inca Street, Denver Page 51
income exceeds the net of demolition and the water tap credit, so a small negative adjustment
is warranted.
Sale #3 sold with a small house (899sf +/-), that includes a partial basement and detached
garage; improvements are suited for short-term renter occupancy while a new project is
designed and entitlements are sought. Potential short-term (estimated at 18 months), net
rental income exceeds the net of demolition and the water tap credit, so a small negative
adjustment is warranted.
Sale #4 sold with a 5,760sf office/warehouse in place. The purchaser submitted a
redevelopment plan for approval to city officials while the property was under contract. The
site will be cleared for the planned 17-unit residential project. Demolition expense is partially
offset by the water tap credit.
Sale #5 sold with a 7,432sf office/warehouse in place. To date, the purchase has left the
building vacant, though it could potentially be leased on a short-term basis to offset holding
costs. Potential short-term (estimated at 18 months), net rental income exceeds the net of
demolition and the water tap credit, so a small negative adjustment is warranted.
Sale #6 sold with a house (1,932sf +/-), that includes a partial basement; improvements are
suited for short-term renter occupancy while a new project is designed and entitlements are
sought. Potential short-term (estimated at 18 months), net rental income exceeds the net of
demolition and the water tap credit, so a small negative adjustment is warranted.
Sale #1
4149 Jackson
Sale #2
3855 Inca
Sale #3
3832 Jason
Sale #4
3725 Jason
Sale #5
4255 Jason
Sale #6
4232 Jason
Demolition Estimate
$8,900 $39,600 $22,900 $53,500 $61,900 $26,900
Deduct Potential Water
Tap Credit N/A -$10,700 -$7,405 -$10,700 -$10,700 -$7,405
Difference $8,900 $28,900 $15,495 $42,800 $51,200 $19,495
Parcel Size 8,333sf 18,750sf 6,250sf 18,750sf 12,500sf 6,250sf
Net Per SF (adjustment)
$1.07/sf $1.54/sf $2.48/sf $2.28/sf $4.10/sf $3.12/sf
Adjustment for Rental Income
$0 -$3.65/sf -$3.85/sf $0 -$4.90/sf -$4.33/sf
Net Per SF (adjustment)
$1.07/sf -$2.11/sf -$1.37/sf $2.28/sf -0.80/sf -$1.21/sf
An Appraisal Report A Future Development Parcel
4475-95 Inca Street, Denver Page 52
Market Conditions – The sales closed over approximately the past two to 18 months.
Statistical data from the local MLS indicates prices paid for attached residential units have
increased over this period.
A review of statistical data in the REcolorado multiple listing database indicates average
prices paid for similar land parcels zoned for three-story multiple unit development in the
Northwest Denver market area increased approximately 6% over the past year and 13% over
the past two years (13% over 24 months).
Given the entirety of data, positive market condition adjustments are warranted to the
comparables, made at the average rate of 6% annually, or 0.5% per month, per month, to
account for appreciating prices over the period examined.
The grid for transactional adjustments is presented below. Transactional Adjustment Grid:
Comparable Subject Sale #1 Sale #2 Sale #3 Sale #4 Sale #5 Sale #6
Property 4475-95 Inca 4149 Jackson 3855 Inca St. 3832 Jason St. 3725 Jason St. 4255 Jason St. 4232 Jason St.
Market Area Sunnyside Elyria/ Swansea Sunnyside Sunnyside Highland Sunnyside Sunnyside
Lot Size 9,100 sf 8,333 sf 18,750 sf 6,250 sf 18,750 sf 12,500 sf 6,250 sf
$800,000 $1,675,000 $430,000 $2,200,000 $1,250,000 $425,000
$96.00 per sf $89.33 per sf $68.80 per sf $117.33 per sf $100.00 per sf $68.00 per sf
4-Feb-2019 30-Jan-2019 16-Nov-2018 16-Nov-2018 5-Mar-2018 30-Jun-2017
Fee Simple Fee Simple Fee Simple Fee Simple Fee Simple Fee Simple
$0 $0 $0 $0 $0 $0
Cash Cash Cash Cash to Seller Cash to Seller Cash to Seller
Purchase Purchase Purchase New Loan New Loan New Loan
Adjustment $0 $0 $0 $0 $0 $0
None Reported Motivated Seller None Reported None Reported None Reported None Reported
$0 $8.93 0% $0 $0 $0
$96.00 per sf $98.27 per sf $68.80 per sf $117.33 per sf $100.00 per sf $68.00 per sf
Demolition
Demolition/ Offset by
Water Tap Credit &
Potential Interim Rental
Income
Demolition/ Offset by
Water Tap Credit &
Potential Interim Rental
Income
Demolition/ Water
Tap Credit
Demolition/ Offset by
Water Tap Credit &
Potential Interim Rental
Income
Demolition/ Offset by
Water Tap Credit &
Potential Interim Rental
Income
Adjustment $1.07 -$2.11 -$1.37 $2.28 -$0.80 -$1.21
$97.07 per sf $96.16 per sf $67.43 per sf $119.61 per sf $99.20 per sf $66.79 per sf
2 Months Ago 2 Months Ago 4 Months Ago 4 Months Ago 13 Months Ago 20 Months Ago
1.0% 1.0% 2.0% 2.0% 6.5% 10.0%
$98.04 per sf $97.12 per sf $68.78 per sf $122.01 per sf $105.65 per sf $73.47 per sf
Adjusted Price Per Sq. Ft.
Adjustment Grid – Transactional Adjustments
Adjusted Price Per Sq. Ft.
Sale Date
Sale Price Per Sq. Ft.
Sale Price
Property Interest Conveyed
Adjustment
Financing Terms
Conditions of Sale,
Concessions or Discounts
Adjusted Price Per Sq. Ft.
Sale Date (rounded to nearest month)
Market Conditions Adjustment
Adjustment
Expenditures After Purchase
An Appraisal Report A Future Development Parcel
4475-95 Inca Street, Denver Page 53
Adjustments for property differences are discussed below.
Location – Location attributes are typically an important factor in determining the
development potential and corresponding value of a residential-oriented development lots.
Consideration is given to quality and appeal of surrounding uses, accessibility and proximity to
highways, proximity to supportive retail services, and property values for attached residential
units. Adjustments for location are made based on the relative desirability of each property in
comparison with the subject. The comparables are located in areas of transition, from
industrial to residential; additionally each is proximal to a light rail station.
Sale #1 is located in Denver’s Elyria/Swansea neighborhood, directly across from the light rail
station near E. 40th Avenue and Colorado Boulevard. The area is in transition and there is a
development plan in place to promote transit-oriented/residential development. The location
is superior to the subject given the proximity to the rail station, warranting a negative
adjustment.
Sales #2, #3, #5, and #6 are located in the Sunnyside neighborhood and share similar
general location attributes with the subject. Specific locations vary based on proximity to the
light rail pedestrian bridge and surrounding uses. Sales #2, #5, and #6 are closer to light rail,
warranting a negative adjustment. Sale #3 is a similar distance to the light rail and no
adjustment is considered warranted.
Sale #4 is located in the adjacent Highland neighborhood, close enough to the light rail station
to be included in the Station Area Plan. The specific location in Highland is superior with
respect to the immediate area supporting higher residential values and apartment rents,
warranting a negative adjustment.
Site Attributes/Utility – The subject lot has typical site utility for an interior lot, being
rectangular, with generally level terrain. Off-site work is complete and the parcel is suited for
redevelopment. The Inca frontage provides the potential for city views from upper floors of a
future structure, though as an offsetting factor there is potential for negative noise influence
from the adjacent rail lines off the east side of the street.
Comparables are reasonably similar for shape and terrain attributes, though differ with respect
corner attributes and frontage. Corner lots, and those with substantially more street frontage,
provide superior appeal offering greater flexibility in design and the potential for more street-
facing units.
Sales #1, #2, and #5 are superior with respect to the corner attribute and superior frontage,
warranting negative adjustment.
Sale #4 is an interior lot, similar to the subject, though is superior with respect to greater
frontage, warranting negative adjustment.
An Appraisal Report A Future Development Parcel
4475-95 Inca Street, Denver Page 54
Sales #3 and #6 are similar interior lots, though with inferior frontage, warranting positive
adjustment.
Zoning/Entitlements/Potential Land Use – The subject is zoned under the I-A designation
with no specific entitlements in place. Under the current zoning, the only allowed
development is light industrial, flex, office and related uses. As noted previously, future
development on the parcel will be guided by the 41st and Fox Station Area Plan, as well as the
update to the Blueprint Denver plan, anticipated to be adopted this year. The draft copy of the
Blueprint Denver update identifies the subject’s immediate area as designated for future low-
to medium scale-scale multiple-unit residential uses, mixed with one- and two-unit residential
properties, and allowing-higher intensity residential uses to be mixed through the area. The
Land Use Map published in the Station Area Plan, identifies the subject’s immediate area as
dedicated for future urban residential uses, intended to support moderate density housing
options (up to 3 stories), including townhouses and small apartment/condominium buildings
for residents wising to live near the transit station.
Sale #1 sold with I-A zoning in place, similar to the subject. The local area plan guiding future
development in the immediate area calls for transit-oriented uses, including residential and
mixed-use projects up to eight stories in height, superior to the subject, warranting a negative
adjustment.
Sales #2, #3, #4 and #5 sold with I-MX-3 zoning in place, which is considered superior to the
subject’s I-A zoning in that residential use is allowed by right, so the parcels could potentially
be redeveloped with a residential or mixed use, up to three-stories, without the need to be
rezoned. Negative adjustments are indicated for this attribute. Furthermore, Sales #2, #3 and
#5 are closer to the station and within areas dedicated for higher density land uses (potentially
up to 8 stories) as identified in the station area plan. Sale #4 is similar to the subject in that
the station area plan calls for moderate density (up to three stories) future land uses.
Sale #6 sold with I-A zoning in place, similar to the subject. However, a negative adjustment
is warranted for potential land use, as the station area plan identifies the area for higher
density residential uses.
Utility Services – All utility services are available to the subject lot in sufficient capacity to
support new development. Comparables examined are similar to the subject for this factor so
no adjustments are indicated.
Parcel Size – Comparables are adjusted based on a price paid per square foot basis. Under
this analysis, it is typical to find that the market will discount larger parcels (i.e., a discount to
the price per square foot) compared to otherwise similar smaller parcels to account for
economy of scale considerations with respect to future development; alternatively stated,
smaller parcels generally sell for higher per-square-foot prices as fixed development costs are
borne by a smaller area so tend to be higher compared to larger properties.
An Appraisal Report A Future Development Parcel
4475-95 Inca Street, Denver Page 55
Sales #1 is reasonably similar in size and no adjustment is warranted. Sales #2, #3, and #5
are sufficiently larger to warrant small positive adjustment. Sales #3 and #6 are sufficiently
smaller to warrant small negative adjustment.
The adjustment grid below quantifies the relative differences in features as discussed above
for the subject property. If a comparable is inferior to the subject for a specific factor, an
upward adjustment is made; if it is superior, a downward (negative) adjustment is indicated.
Property Adjustment Grid:
Property Subject Sale #1 Sale #2 Sale #3 Sale #4 Sale #5 Sale #6
Address 4475-95 Inca 4149 Jackson 3855 Inca St. 3832 Jason St. 3725 Jason St. 4255 Jason St. 4232 Jason St.
E
Submarket Sunnyside Elyria/ Swansea Sunnyside Sunnyside Highland Sunnyside Sunnyside
Lot Size 9,100 sf 8,333 sf 18,750 sf 6,250 sf 18,750 sf 12,500 sf 6,250 sf
Sunnyside Walking Distance to
Light Rail
Elyria/Swansea across from
Light Rail Station
Sunnyside Closer to Light Rail
Sunnyside Similar distance to
Light Rail
Highland Farther
to Light Rail
Sunnyside Closer to Light Rail
Sunnyside Closer to Light Rail
Adjustment -15% -5% 0% -20% -5% -5%
Adjustment -8% -10% 10% -5% -8% 10%
Zoning/Potential
Land Use
I-A No
Entitlements
Urban Residential
1-3 story potential
I-A No Entitlements
Urban Residential
2-8 story potential
I-MX-3 No Entitlements
Urban Residential
2-8 story potential
I-MX-3 No Entitlements
Urban Residential
2-8 story potential
I-MX-3 No Entitlements
Urban Residential
1-3 story potential
I-MX-3 No Entitlements
Urban Residential
2-8 story potential
I-A No Entitlements
Urban Residential
2-8 story potential
Adjustment -10% -15% -15% -5% -15% -10%
Utility Services All Available Similar Similar Similar Similar Similar Similar
Adjustment 0% 0% 0% 0% 0% 0%
Scale 9,100 sf 8,333 sf 18,750 sf 6,250 sf 18,750 sf 12,500 sf 6,250 sf
Adjustment 0% 2% -2% 2% 2% -2%
-33% -28% -7% -28% -26% -7%
$65.69 per sf $69.93 per sf $63.96 per sf $87.84 per sf $78.18 per sf $68.33 per sf
33% 32% 27% 32% 30% 27%
Interior Lot
50' of frontage
Mostly level
Neighborhood View
Adjusted Price Per Sq. Ft.
From Transactional Adj. Grid
Location
$98.04 per sf $105.65 per sf
Corner Lot
Rectangular with
125' of frontage
Mostly Level
Neighborhood View
$73.47 per sf
Interior Lot
50' of frontage
Mostly level
Neighborhood View
$97.12 per sf $68.78 per sf
Interior Lot
150' of frontage
Gentle Slope
Neighborhood View
Net Adjustment
Gross Adj. from adjusted Price
Adjusted Value Indications
Site Attributes/
Utility
Interior Lot
Rectangular with
73' frontage
City View/
Rail Influence
Corner lot
125' +/- frontage
Mostly level
Neighborhood View
Corner Lot
Rectangular with
150' of frontage
Mostly Level
City View/
Rail Influence
Adjustment Grid – Property Adjustments
$122.01 per sf
An Appraisal Report A Future Development Parcel
4475-95 Inca Street, Denver Page 56
Conclusion of Value
After adjustments, the sales form a range from $63.96/sf to $87.84/sf with an average of $72.32 per square foot. The comparables warranted similar gross adjustment ranging from 27% to 33%. Comparables #3 and #6 are at the low end of this range and provide adjusted values below the overall average, indicating a value conclusion below the average as appropriate for the subject. Comparables #1 and #6 sold with the same zoning in place (I-A) and provide adjusted values below the overall average. Comparable #4 is most similar in land use potential (urban residential up to 3 stories) and provides an adjusted value above the overall average. Active Listings – The table below provides a summary of active listings in the immediate area. Asking prices range from $91/sf to $128/sf of land area, suggesting values are increasing in the immediate area.
Address Land Area Zoning/
Land Use Potential Attributes
Asking Price $ Per Sq. Ft. of
Land
4435 Inca St. 20,132sf Land
(7,128sf industrial building)
I-A Urban Residential 2
to 8 stories
Interior Lot 162’ frontage
$1,850,000 $91.08/sf
4001 Jason St. 20,875sf Land
(10,260sf industrial building)
I-MX-3 Urban Residential 2
to 8 stories (seeking zoning
change to C-MX-8)
Corner Lot 167’ frontage
$2,610,000 $125.03/sf
3830 Jason St. 12,500sf Land
(vacant)
I-MX-3 Urban Residential 2
to 8 stories
Interior Lot 100’ frontage
$1,600,000 $128.00/sf
Given the characteristics of the data examined, as well as the attributes of the subject
property, a value indication of $69.50 per square foot is concluded from the assembled sales.
An opinion of value of $69.50 per square foot multiplied by the subject's 9,100 square feet
produces a value indication of $632,450, prior to consideration of demolition expense, and
potential rental income.
VALUE INDICATION VIA SALES COMPARISON
Fee Simple Analysis
Price/sf x Sq. Ft. = Value
$69.50/sf x 9,100sf = $632,450
An Appraisal Report A Future Development Parcel
4475-95 Inca Street, Denver Page 57
Adjustments to the Value Indication – Consideration is given to the demolition expense to
clear the site for redevelopment, as well as the contributory value of rental income collected
prior to redevelopment.
Demolition Estimate – The subject parcel is improved with two garage structures, concrete
work and fencing that would be demolished when the parcel is redeveloped Demolition
expenses are estimated from appraiser file data, as well as data published in the Marshall
Valuation Service, and the National Repair and Remodeling Estimator published by the
Craftsman Book Company.
The existing improvements generate monthly rent of $1,500. The current lease will expire on
June 30, 2019; the owner is looking to sell the property so a new lease will not be signed,
though the tenant will be allowed to stay on month-to-month terms. Assuming a one-year
hold, potential income generated would total $18,000 less a vacancy allowance and deduction
for expenses.
Estimated Demolition Expense
Structures Size Cost Per Sq. Ft. Total Estimate
Garages 1,088 sq. ft. $5.50/sf $5,984
Concrete and Site Improvements
Lump Sum $1,900
Total (expense) ($7,884)
Annual Income Estimate
Rental Income $18,000
Vacancy at 20% -3,600
Effective Gross Income $14,400
Operating Expenses -5,000
Net Income $9,400
Net Adjustment
Demolition & Site Clearing -$7,884
Potential Net Income +$9,400
Net Adjustment $1,516
An Appraisal Report A Future Development Parcel
4475-95 Inca Street, Denver Page 58
Adding the net adjustment to the previously concluded land value, provides a modified value
indication of $635,000, rounded.
VALUE INDICATION VIA SALES COMPARISON
Leased Fee Analysis
Price/sf x Sq. Ft. = Value
$69.50/sf x 9,100sf = $632,450
Plus Net Adjustment +$1,516
Modified Indication $633,966
Rounded to $635,000
Value Indication of the Parcel via the
Sales Comparison Approach
$635,000
An Appraisal Report A Future Development Parcel
4475-95 Inca Street, Denver Page 59
Comparable Sales Maps
An Appraisal Report A Future Development Parcel
4475-95 Inca Street, Denver Page 60
Comparable Sales Maps
An Appraisal Report A Future Development Parcel
4475-95 Inca Street, Denver Page 61
COMPARABLE SALE PHOTOGRAPHS
Sale Comp #1 – 4149 Jackson Street Sale Comp #2 – 3855 Inca Street
Sale Comp #3 – 3832 Jason Street Sale Comp #4 – 3725 Jason Street
Sale Comp #5 – 4255 Jason Street Sale Comp #6 – 4232 Jason Street
An Appraisal Report A Future Development Parcel
4475-95 Inca Street, Denver Page 62
RECONCILIATION & FINAL OPINION of MARKET VALUE
VALUE ESTIMATION SUMMARY Per the various approaches to value, we find the following value estimations:
VALUATION ESTIMATION SUMMARY Fee Simple As Is
Cost Approach Not Applied Sales Comparison Approach $635,000 Income Approach N/A
VALUE CORRELATION
The land value is determined through use of the Sales Comparison approach. The cost
approach is not considered applicable to deriving an opinion of market value given the
difficulties of determining the cost and contribution to value of shared common infrastructure
improvements to any specific parcel. The income approach is also not used in this analysis as
development parcels in this market area are nearly always sold for development rather than
leased, resulting in a dearth of applicable data from which to derive market rental rates and
capitalization rates.
This leaves the Sales Comparison Approach as the sole methodology for valuing the subject
property. This methodology is believed to mirror the thinking of marketplace participants and
provides the most reliable method for estimating the subject’s market value. In this case, we
have six sales of similar parcels located in the subject’s general market area. Sales #3 and
#6 are particularly suited, being in the subject’s immediate neighborhood, with frontage to
South Delaware Street, and having the same zoning. Sales #1 and #4 provide solid
secondary support for the concluded value indication.
The listing data examined provide evidence of increasing land values in the area; the sales
comparison approach is considered to provide a reliable indication of the subject’s potential
market value.
An Appraisal Report A Future Development Parcel
4475-95 Inca Street, Denver Page 63
The value indication concluded via the sale comparison approach is considered adequately
supported and is given all weight in the analysis.
Opinion of Value for the Real Property
Value Type Interest Appraised Effective Date Final Value Opinion
As Is Leased Fee 29-March-2019 $635,000
An Appraisal Report A Future Development Parcel
4475-95 Inca Street, Denver Page 64
Estimated Exposure Time/Marketing Time
Exposure Time – As referenced in the 2018-2019 edition of the Uniform Standards of
Professional Appraisal Practice (USPAP), Exposure Time is the estimated length of time it
would have taken to achieve a hypothetical sale of the property at the concluded market
value, with consideration to the property interest appraised, and consummated on the
effective date of the appraisal. It is a retrospective opinion based on analysis of past events
assuming an open and competitive market.
The exposure time for the subject is based on the reported marketing periods of a variety of
residential-zoned parcels in the subject’s market area. Marketing periods for eight sales of
are examined and the data is summarized in the table below.
Marketing times for the sales range from approximately one to 13 months; the average period
for the group is 9.7 months. Developers and land speculators are active in the market and
financing has been available to support acquisitions. This trend is anticipated to continue
through the near to mid-term.
Exposure times are typically influenced directly to a property’s pricing; over-priced properties
tend to languish on the market, while properties reasonably priced sell within a reasonable
period.
The estimated exposure time for the subject is tied directly to the concluded market value.
The opinion of value provided is within the range of recent sales, suggesting that if
appropriately priced and actively marketed, an exposure time within a six to nine-month
period is reasonable.
Estimated Exposure Time
6 to 9 months
An Appraisal Report A Future Development Parcel
4475-95 Inca Street, Denver Page 65
Property Sale Date
Marketing Period Property
Sale Date Marketing Period
4201 Jackson Street
Denver, 80216
February 2019
12 months
4230 Elati Street
Denver, 80211
August 2018
9 months
333 West Vassar St.
Denver, 80223
February 2019
13 month
3974 N. High St.
Denver, 80205
August 2018
1 month
2650 S. Delaware St.
Denver, 80223
November 2018
6 months
4255 Jason St.
Denver, 80211
March 2018
5 months
3832 Jason St.
Denver, 80211
November 2018
2 months
4211 Inca St.
Denver, 80205
January 2017
10 months
Range: 1 month to 13 months Average: 9.7 months
Marketing Time – Marketing time is the amount of time it might take to sell the property if put
on the market on the effective date of this report. The pace of development remains strong in
the area and both builders and land speculators are actively seeking future development
parcels in the north Denver market area in general. Development is anticipated to remain
active through 2019 and into 2020 and activity could increase was the light rail station near
the subject opens and ridership stabilizes.
The subject parcel has a competitive location for a future development parcel given its
proximity to the light rail station. The prospect for the subject lot to be “absorbed” for a new
development project is good over the short to mid-term. With respect to the subject property,
and with consideration to market conditions at present and anticipated for the immediate
future, the concluded opinions of value are the basis for estimated marketing period of six
to nine months.
Estimated Marketing Time
6 to 9 months
An Appraisal Report A Future Development Parcel
4475-95 Inca Street, Denver Page 66
CERTIFICATION STATEMENT
I certify that, to the best of my knowledge and belief:
The statements of fact contained in this report are true and correct.
The reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions, and are my personal and unbiased professional analyses, opinions, and conclusions.
I have no present or prospective interest in the property that is the subject of this report, and I have no personal interest with respect to the parties involved.
I have no bias with respect to the property that is subject of this report or to the parties involved with this assignment.
I have performed no service as an appraiser or in any other capacity, regarding the subject property within the three-year period immediately preceding acceptance of this assignment.
My engagement in this assignment was not contingent upon developing or reporting predetermined results.
The appraisal assignment was not based on a requested minimum valuation, a specific valuation, or the approval of a loan.
My 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.
My analyses, opinions and conclusions were developed, and this report has been prepared, in conformity with the Uniform Standards of Professional Appraisal Practice (USPAP).
The reported analysis, opinions and conclusions were developed, and this report has been prepared, in conformity with the Code of Professional Ethics and the Standards of Professional Appraisal Practice of the Appraisal Institute.
I have made a personal inspection of the property that is the subject of this report.
No one provided significant professional assistance to the person signing this certification
The use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representatives.
As of the date of this report, I have completed the continuing education program for Designated Members of the Appraisal Institute.
______________________________________
James Derr State of Colorado Certified Appraiser (CG01315282), exp. Dec. 31, 2020
An Appraisal Report A Future Development Parcel
4475-95 Inca Street, Denver Page 67
APPENDIX ITEMS
Engagement Letter
Copy of ILC
Contingent & Limiting Conditions
Appraiser’s Statement of Qualifications
An Appraisal Report A Future Development Parcel
4475-95 Inca Street, Denver Page 68
APPENDIX Engagement Letter - Page 1 of 4
An Appraisal Report A Future Development Parcel
4475-95 Inca Street, Denver Page 69
APPENDIX Engagement Letter - Page 2 of 4
An Appraisal Report A Future Development Parcel
4475-95 Inca Street, Denver Page 70
APPENDIX Engagement Letter - Page 3 of 4
An Appraisal Report A Future Development Parcel
4475-95 Inca Street, Denver Page 71
APPENDIX Engagement Letter - Page 4 of 4
An Appraisal Report A Future Development Parcel
4475-95 Inca Street, Denver Page 72
Improvement Location Certificate Completed November 2016
An Appraisal Report A Future Development Parcel
4475-95 Inca Street, Denver Page 73
CONTINGENT AND LIMITING CONDITIONS
This appraisal report, the letter of transmittal and the certification of value, are made expressly
subject to the following assumptions and limiting conditions, and any special assumptions and
limiting conditions contained elsewhere which are incorporated herein by reference.
GENERAL ASSUMPTIONS
1. Legal and Title Considerations Pertaining to the Property
- This appraisal is subject to the accuracy of the legal description furnished to the
appraiser. The Appraiser assumes no responsibility for the legal description provided or
for matters pertaining to title or legal considerations, or does the appraiser render any
opinion as to the title, which is assumed good and marketable, with ownership in fee
simple or fee simple interest, as stated.
Unless otherwise indicated, all liens and encumbrances, which may exist, have been
disregarded, and the property is appraised as though it were free and clear of any such
impediments that might affect value.
2. Illustrative Material and Information Provided by Others
- All engineering studies and architectural plans provided are assumed correct.
- Plans and illustrative material in this report may show approximate dimensions and are
included only to assist the reader in visualizing the property. The Appraiser has made no
survey of the property.
- Information, estimates, and opinions furnished to the Appraiser, and contained in the
report, were obtained from sources considered reliable and are believed to be true and
correct. However, the Appraiser assumes no responsibility for the accuracy of such
items, nor is warranty given for its accuracy.
3. Property Utilization
- Responsible ownership and competent management of the property are assumed.
- It is assumed that the utilization of the land and improvements is within the boundaries or
the property described in the report and that there is no encroachment or trespass,
unless noted in the report.
- Unless non-compliance is stated and considered, it is assumed that the property and its
operations are in full compliance with all applicable Federal, State, Local Government or
private entity regulations, laws, zoning requirements, covenants or other restrictions. It is
further assumed that all required licenses, regulations, certificates of occupancy, permits,
An Appraisal Report A Future Development Parcel
4475-95 Inca Street, Denver Page 74
or other consents have been or can be obtained or renewed for any use on which the
value estimate is based, unless non-conformity is identified, described and considered in
this report.
4. Scope of the Inspection, Property Conditions
- Only a visual, surface inspection of the property has been made by the Appraiser. The
Appraiser assumes that there are no hidden or unapparent on-site or off-site conditions of
the property or subsoil that would render it more or less valuable, or affect the health or
safety of the occupants.
- Unless otherwise stated and considered, the existence of hazardous materials, which
may or may not be present, was not observed by the Appraiser and the value estimate is
predicated on the assumption that there is not asbestos, urea-formaldehyde foam
insulation, nor any other potentially hazardous materials that may affect the value of the
property. The Appraiser has no expertise in identification of hazardous materials,
therefore we recommend that parties concerned obtain independent investigation by
qualified experts. The Appraiser assumes no responsibility for such conditions, or for the
engineering that might be required to discover such factors. The Client is urged to retain
an expert in this field, if desired.
- Nothing in this report should be deemed a certification or guaranty as to the structural
and/or mechanical soundness of the building(s) and systems that relate to the functions
and operations of the property. Rather the appraisal assumes functions, operations, and
energy efficiency levels are satisfactory and consistent with the age of the property,
unless otherwise noted. The Client is urged to retain experts in analysis of such systems,
if desired.
5. Personal Property
- All personal property, furnishings and equipment, except those specifically indicated,
have been disregarded by the appraiser, unless otherwise noted. Only the real estate
has been considered.
6. Appraisals Made Subject to Completion
- On all appraisals subject to satisfactory completion, repairs, or alterations, the appraisal
report and value conclusion are contingent upon completion of the improvements
according to specifications and as stated in the report, and in compliance with all laws,
regulations and other restrictions, in a workmanlike manner, and immediately.
Represented designs and engineering are assumed correct and adequate.
An Appraisal Report A Future Development Parcel
4475-95 Inca Street, Denver Page 75
GENERAL LIMITING CONDITIONS
1. Allocation of Value
- Any allocation of the total value estimated in this report between the land and
improvements applies only under the stated program of utilization. Separate values allocated
for land and improvements must not be used in conjunction with any other appraisal and are
invalid if so used.
2. Possession, Confidentiality, Distribution and Use of Report
- Possession of this report, or a copy thereof, does not carry with it the right of publication.
- Information contained in the appraisal may be utilized by the specified Client, but the
report remains the property of James Derr, Commercial Appraisal Services.
- This report shall not be used by anyone but the Client specified in the report without the
Appraiser's prior written approval, and then only in its entirety.
- Neither all nor any part of the contents of this report shall be used for any purposes by
anyone other than the Client specified in this report, or conveyed to the public through
advertising, public relations, news, sales, or other media, without the written consent and
approval of the Appraiser, particularly as to the value conclusions, identity or designation
of the Appraiser or reference to the firm or appraisal organization with which the
Appraiser is affiliated.
- All conclusions and opinions concerning the analysis, which are set forth in the report,
were prepared by the Appraisers whose signatures appear on the appraisal report. No
change of any item in the report shall be made by anyone other than the Appraisers, and
the Appraisers' firm shall have no responsibility if any such unauthorized change is made.
- Disclosure of the contents of the appraisal report is governed by the by-laws and
Regulations of the professional organizations with which the Appraiser is affiliated.
3. Limitations of the Appraisal Services
- The Appraiser is not required to give testimony or to appear in court due to this appraisal
with reference to the property in question, unless arrangements have previously been
made.
- The contract for appraisal, consultation or analytical service is fulfilled and the total fee
payable upon completion of the report. The Appraisers or those assisting in preparation
of the report will not be asked or required to engage in post-appraisal consultation with
the Client or third parties except under separated and special arrangement and at an
additional fee.
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- Liability of the Appraisers is limited to the elected fee for preparation of the appraisal.
James Derr, Commercial Appraisal Services, as well as any employee, agent or officer
thereof, shall be completely indemnified against all losses, claims, damages liabilities,
costs or expenses to which the recipient and/or third party user may become subject.
There is no accountability or liability to any third party.
- Opinions of value contained in this report are estimates. There is no guarantee, written or
implied, the subject property will sell or lease for the indicated amounts.
- Acceptance and use of information in this report in any manner or purpose is
acknowledgment that the entire report has been read by the user and that he agrees with
the conclusion and the data contained in this report.
- The Client agrees to notify the appraiser of any error, omissions or invalid data within 15
days of receipt of the appraisal and return the report along with all copies to the Appraiser
for correction prior to any use whatsoever.
4. Auxiliary Reports and Related Data by Others
- Unless stated otherwise, no auxiliary studies or reports related to the property, such as
surveys, environmental impact reports, special market studies, highest and best reports,
feasibility analysis, or reports regarding modifications to the property for either
compliance with the Americans with Disabilities Act, structural, or other reasons, have
been furnished or reported to the Appraiser by the Client. Data presented with respect to
the subject's ownership, marketing, and income history is as made available through the
Client or readily accessed public sources. The Appraiser assumes that pertinent data is
not being withheld by the Client, the Borrower, or related parties. Provision of such
auxiliary data, or the discovery of it by the appraiser, is beyond the scope of the appraisal
services contracted. The Appraisers reserve the unlimited right to alter, amend, revise or
rescind any of the statements, findings, opinions, values, estimates, or conclusions upon
any discovery or provision of such data or analysis, subsequent to it becoming known to
the Appraisers.
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APPENDIX Copy of Appraisal License
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JAMES J. DERR Certified General Appraiser Statement of Qualifications
PROFESSIONAL EXPERIENCE:
CURRENT: James J. Derr Commercial Appraisal Services 6655 West Jewell Ave., #217 Lakewood, CO 80232 Phone: 303-462-3299 Email: [email protected]
Term: August 1999 to Present
Services Offered: Commercial, industrial, residential, and land appraisals and consulting. Covering the Colorado Front Range, including metropolitan Denver, Boulder County, Weld and Larimer County.
PRIOR: Valuation Research Corporation
Position: Senior Commercial Appraiser
Term: September 1990 to August 1999
EDUCATIONAL BACKGROUND:
University of Colorado at Denver
B.S., Business Administration w/ an emphasis in Real Estate December 1985, magna cum laude
University of Colorado at Denver
Graduate School of Urban and Regional Planning Completed courses in Real Estate Market Analysis, Environmental Planning, and Urban Planning – 1994/1995
Appraisal Institute – Recently Completed Courses & Seminars
Advance Income Capitalization
Quantitative Analysis
Advanced Concepts and Case Studies Real Estate Finance & Statistics & Valuation Modeling 7-Hour National USPAP Update Course Advanced Market Analysis & Highest & Best Use General Appraiser Site Valuation and Cost Approach
APPRAISER LICENSE & MEMBERSHIP:
Certified General Appraiser License Colorado License No.: CG 1315282 Certified Through December 31, 2020 Designated Member of the Appraisal Institute, ID # 379272