RockSpringCluB-Hendricks Appraisal.pdf

n interim or temporary highest and best use of the property. In view of the recent closure of the facility (December 2018) as well as the depleted status of membership, it is my opinion that as of the date of valuation, continued private country club use of the subject is not the highest and best use of Rock Spring Club. REAL ESTATE APPRAISALS a & RESEARCH - 65 -

THE COMPARATIVE APPROACH — AS A VALUATION INDICATOR As utilized in this report, the subject has been compared with similar properties recently sold. The Comparative Approach is based on the principle of substitution which implies that a prudent purchaser will not pay more to buy a property than it will cost to acquire a comparable substitute property. The price a typical purchaser pays is usually the result of a shopping survey in which available alternative properties have been compared. It is assumed, therefore, that the purchaser has an understanding of the real estate market. The sales comparison approach is defined as: “A set of procedures in which a value indication is derived by comparing the property being appraised to similar properties that have been sold recently, applying appropriate units of comparison, and making adjustments to the sale prices of the comparables based on the elements of comparison. The sale comparison approach may be used to value improved properties, vacant land, or land being considered as though vacant.” Source: The Appraisal of Real Estate — Twelfth (12") Edition, Published by the Appraisal institute - 2001 The comparable sales included in the report are sufficiently competitive with the subject of the appraisal so as to provide a basis for the valuation estimate. The extent of the research program and the scope of geographic investigation is considered appropriate for the type of property being appraised. The time frame is of adequate duration to provide a test for any temporary shift in supply and demand. The mechanics of the comparative adjustment can be accomplished in several ways. The most commonly used methods are: Whole Property Adjustments - Wherein a single lump sum adjustment is made in the comparative process. Dollar Adjustments - Wherein a table or grid of multiple adjustments in the form of dollar estimates is made in the comparative process. Percentage Adjustments - Wherein a table or grid of multiple adjustments in the form of percentages is made in the comparative process. In this appraisal | have employed a percentage adjustment. The major categories of adjustment has considered time, location and differences in physical characteristics with the adjustments being converted to a dollar conclusion. On the following pages will be found several transactions involving residential single

location and differences in physical characteristics with the adjustments being converted to a dollar conclusion. On the following pages will be found several transactions involving residential single family subdivisions located within the subject's general Northern New Jersey market area. These sales have been analyzed on a price per approved residential building lot and the concluded unit value has been applied to the subject's estimated sixty-six (66) potential residential building lots. It is readily acknowledged that while no single transaction can be considered conclusive evidence of Market Value, the combined weight of all of the sales data offers persuasive support for the valuation estimate contained herein. REAt ESTATE [ | APPRAISALS - 66 - a & RESEARCH

THE COMPARATIVE APPROACH — AS A VALUATION INDICATOR Sale__- 10 Piersons Hill Road, Randolph, Morris County, New Jers: The Ridge at Randolph, LLC to Toil NJ VI, LP Date: July 14, 2011 Sale Price: $4,921,000.00 Block: 146 Lot: 72 Zone: R-R Book: 21835 Page: 0643 Acres: 79,555 Approvals: Approved/Unimproved 25 Lot Subdivision Topography: | Wooded-Rolling Analysis: Sale reflects $196,840.00 per approved residential building site, unadjusted. Comment: The parcel was conveyed with approvals for a twenty-five (25) lot residential subdivision known as Randolph Ridge. The individual building lots will be 2% acres in size and will feature custom built single family dwellings ranging in size from 3,702 to 6,500 square feet. Base prices will range from $823,995.00 to $1,899,999.00. 7) eee “se = a & RESEARCH

THE COMPARATIVE APPROACH — AS A VALUATION INDICATOR Sale _-_ 364 Burnt Mill Road, Branchbur me County, New J Branchburg Builders, LLC to Toll Brothers NJ IV, LP Date: July 18, 2013 Sale Price: —$13,000,000.00 Block: 2 Lot: 8.01 Zone: A-R - Agric. & Residential Book: 6654 Page: 1624 Acres: 65.2923 Subdivision: Fifty (60) Residential Building Lots Analysis: Sale reflects $260,000.00 per residential building lot, unadjusted. Comment: The property was conveyed with development approvals for a fifty (50) lot residential subdivision. The development is known as Toll Brothers Steeplechase at Branchburg which will feature estate type custom building residences on parcels of approximately 1.00 to 1.50 acres. There are four model types available with base prices starting at $1,100,000.00, ret a: FT] ses - 68 - B & RESEARCH

THE COMPARATIVE APPROACH — AS A VALUATION INDICATOR Sale_- Carlough Road, Mahwah & Upper Saddle River, Bergen County, N. J. Apple Ridge, Mahwah, LLC to Toll NJ IV, LLC Apple Ridge USR, LLC to Toll NJIV, LLC Date: December 15, 2016 Sale Price: $30,750,000.00 Block: 127 Lots: 1,3,4,.5,6,7 Zone: R-40 (Mahwah) Block: 401 Lot 284 Zon R-1 (Upper Saddle River) Book: 2517 Page: 191 & 1497 Acres: 111.31 Approvals: 78 Single Family Residential Sites Analysis: Sale reflects $394,231.00 per residential building lot, unadjusted. Comment: The property was conveyed with approvals for a seventy-eight (78) lot residential subdivision with each lot having an average size of approximately 1.00 acre. The former Apple Ridge Country Club closed in 2015 and 2015 and all improvements will be demolished by the purchaser. In addition, environmental contamination including arsenic and lead will also be remediated by the purchaser. The development will be known as The Preserve at Upper Saddle River and Orchard Ridge at Mahwah. Base prices will range from $1,449,995.00 to $1,689,995.00. ae en wg Seressaeaae nee { u Fs - 69 - a & RESEARCH

THE COMPARATIVE APPROACH — AS A VALUATION INDICATOR Sale_- Hilltop Drive, North Caldwell, Essex County, New Jersey K. Hovnanian @ North Caldwell to Pulte Homes of N.J., LLC Date: July 21, 2017 Sale Price: $12,710,000.00 Block: 101 Lot: 3.01 Zone: R-30 Book: 20170 Page: 71524 Acres: 31.01 Approvals: 62 Single Family Residences Analysis: Sale reflects $205,000.00 per residential building lot, unadjusted. Comment: The property was conveyed with development approvals in place for a sixty- two (62) lot single family development to be known as the Reserve at North Caldwell. The development will consist of six (6) basic models ranging in size from 2,794 square feet to 3,544 square feet on half-ace sites. The base prices start at $834,990.00. [ | ees ~ 70 - a & RESEARCH

THE COMPARATIVE APPROACH - AS A VALUATION INDICATOR Residential Single Family Subdivision Sales Number Topography LotSize Unadjusted Sale Date/Price BuildingLots _ Utilities Location Per Lot #4 7114/2014 25 Level-Rolling 79.555 Acres $ 4,921,000.00 Lots G,E,W,S Randolph $196,840.00 #2 7/18/2013 50 Level-Rolling 65.292 Acres $13,000,000.00 Lots G,E,wW,S Branchburg $260,000.00 #3 12/31/2016 78 Level-Rolling 111.31 Acres $30,000,000.00 Lots G,E,W,s Mahwah & USR $394,231.00 ca) 712112017 62 Level-Rolling 31.01 Acres $12,710,000,00 Lots G,E,W,S North Caldwell $205,000.00 The comparable sales tabulated above represent recent transactions of competitive single family residential subdivision sales available within the subject's immediate market as well as other similar areas of Northern New Jersey. In view of the paucity of transactions involving single family detached residential subdivisions, it was necessary to employ two older transactions - Sales one and two. These conveyances have been adjusted upwards for inferior time and market conditions as of the date of each sale to the date of valuation estimate. The comparable sales tabulated above have been directly compared with the subject of this appraisal. As previously noted | have utilized a percentage adjustment process in the comparison analysis. The percentage adjustments have been converted to a dollar conclusion based on a price per individual building lot. In the adjustment process, if a significant item or condition in the sale property is considered inferior to or less favorable than the subject property, a positive or upward percentage adjustment will be shown, i.e., +05%. Conversely, if a significant item or condition in the sale property is considered superior to, or more favorable than the subject property, a downward or negative percentage adjustment will be shown, i.e., -05%. In some instances during the comparison process a positive or negative element may be off-set by another positive or negative factor. In addition, | have also considered the principal of economies of scale which is based on the inverse relationship between size and price. For example, when a significantly smaller (sale) property is compared with a larger (subject) property, the individual price per lot may warrant downward adjustment as the smaller sale property would typically reflect a higher cost on a per lot

ale) property is compared with a larger (subject) property, the individual price per lot may warrant downward adjustment as the smaller sale property would typically reflect a higher cost on a per lot basis. Conversely, if the sale property is significantly larger than the subject, an upward adjustment may be necessary. The adjustment grid analysis has been included on the following page. A brief discussion of the comparative adjustments applied to each of the sales can be found on the pages immediately following the grid analysis. Continued . . . - 71- REAL ESTATE APPRAISALS & RESEARCH

THE COMPARATIVE APPROACH - AS A VALUATION INDICATOR Adjustment Grid Analysis Conditions of Sale: Market Conditions of Sate: Market Conditions of Sale Market Conditions of Sale. Market Adjusted Price Adjusted Price Per Lot: $291,200.00 Adjusted Price Per Lot $394,231.00 Adjusted Price No. Potential Lots: 66 Lots No. Proposed Lots: 25 Lots -10% ‘No. Proposed Lots: 50 Lots No, Proposed Lals 78 Lots No. Proposed Lots: 62 Lots Shape: Imegular Shape: Inegular Shape: Inegular ‘Shape: Inegular Topography, Level-Rolling Topography: Level-Rolling Topography: Level-Rolling Topography. Level-Rolling Topography: Level-Rolling Avg, Lot Size: 4.83 Acres Avg, Lot Size: 2.54 Acres. - 5% Avg. Lot Size: 1.25 Acres Avg. Lot Size: 1.00 Acres +5% Miscellaneous: ne) Development Is Miscellaneous: Development ovals 20% Miscellaneous: Miscellaneous: Development -20% Avg. Lot Size: 0.50 Acres Miscellaneous: +10% Development Approvals -20% The adjusted sales range from $147,138.00 to $335,096.00 per lot. Elimination of extremes reduces the range to $164,000.00 to $247,520.00 per lot. The mid-range or average of all sales is found at $223,438.00 per residential building lot. In my opinion, based on the adjusted sales data included above a value in the mid-range (rounded) or $225,000.00 per residential building lot has been accepted for each of the subject's potential sixty-six (66) residential building lots. 00.00 On the following pages will be found a brief discussion and rationale for the comparative adjustments applied. REALESTATE APPRAISALS a & RESEARCH