RockSpringCluB-Hendricks Appraisal.pdf

THE COMPARATIVE APPROACH - AS A VALUATION INDICATOR Discussion of Adjustments No. Potential Building Lots: As previously discussed, in this appraisal | have considered the inverse relationship between size and price. The foregoing is commonly known as the principal of economies of scale which is generally based on the premise that when a smaller (sale) property is compared with a significantly 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. As previously discussed, based on the analysis of highest and best use included elsewhere in this report, | have concluded that the highest and best use of the subject property is for single family residential subdivision and development in accordance with R-1 zoning. Therefore, based on the subject's combined area of 139.9755 acres, with an area deduction for Cable Lake as well as an allocation of ten (10%) percent for roadways, detention areas, areas, setbacks, etc., the total land area potentially available for development would be approximately 5,276,800 square feet. In view of the minimum lot size requirement of 80,000 square feet, | have estimated that the property could be subdivided into sixty-six (66) residential building lots. The sale properties range from twenty-five (25) to seventy-eight (78) individual residential building lots. In my opinion, only sale one which had twenty-five (25) proposed residential building lots warranted downward adjustment. The remaining sales are considered to be generally similar to the subject and the disparities in the number of lots would not typically be recognized in the market. Therefore, no adjustments for the number of lots has been applied to sales two, three or four. Topography: The subject property features level to rolling topography. In each instance, the sale properties also featured similar topography and no adjustments were required. Average Lot Size: In view of the minimum lot size required under current R-1 zoning (80,000 square feet - 1.83 acres) | have utilized an average lot size for the subject individual building lots of 1.83 acres. It has been noted that sale one has a minimum (average) lot size of 2.54 acres and

square feet - 1.83 acres) | have utilized an average lot size for the subject individual building lots of 1.83 acres. It has been noted that sale one has a minimum (average) lot size of 2.54 acres and is superior to the subject in this regard. A downward adjustment has been applied. It has also been noted that sales two and three are inferior to the subject as they have average lot sizes of 1.00 acres to 1.25 acres and nominal upward adjustments have been ascribed to these transactions. Comparable sale four features half-acre average lot sizes which is substantially inferior to that of the subject. Therefore a greater adjustment then that applied to sales two and three is warranted. [ | es Lt t | & RESEARCH