MRC Meadowbrook LLC.pdf

Mrc Meadowbrook LLC, Petitioner V City Of Novi, Respondent · 24-003367-TT

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TranInfo:4606 

 257399%3-1 

Chic: 

160 

Ant: $250.00 

1D: 

MRC MEADDWEROOK LLC 

STATE OF MICHIGAN 

06/28/24 Za 

GRETCHEN WHITMER 

DEPARTMENT OF LICENSING AND REGULATORY AFFAIRS 

MARLON 

I. BROWN, DPA 

DIRECTOR 

GOVERNOR 

LANSING 

PROPERTY TAX APPEAL PETITION FORM 

VALUATION / EXEMPTION / CLASSIFICATION APPEAL 

Do not use this form to appeal Principal Residence Exemption, Qualified Agricultural Exemption, Special Assessment, or 

Non-Property tax disputes. 

Pursuant to Michigan Tax Tribunal Rule (TTR) 277(3), you MUST submit a copy of the notice giving rise to the appeal 

(e.g. Board of Review Decision or Notice of Uncapping) with this Small Claims Petition, if applicable. 

If you do not 

submit this document, you may be held in default. 

Section 1: Petitioner’s Contact Information 

Last Name/Company Name 

MRC Meadowbrook LLC 

First Name 

M.I 

Mailing Address (No., Street, P.O. Box or Rural Route) 

5333 McAuley Drive ,Rm 1018 

City or Town 

State 

ZIP Code 

Ypsilanti 

MI 

48197-1093 

Fax Number 

Telephone Number 

313-717-4446 

E-mail Address (do not enter unless you want MTT to send all correspondence via e-mail) 

atewari@michretina.com 

First Name 

Last Name 

Dan 

Stewart 

Section 2: Petitioner’s Attorney/Authorized Representative’s Contact Information 

M.1 

Firm Name (if any) 

Address (No., Street, P.O. Box or Rural Route) 

1310 S. Main Street, Suite 12 

City or Town 

State 

ZIP Code 

Ann Arbor 

MI 

48104 

Telephone Number 

Fax Number 

734-649-5064 

E-mail Address (do not enter unless you want MTT to send all correspondence via e-mail) 

dan.stewart@svn.com 

Section 3: Subject Property Information 

How many 

If you are appealing more than one parcel, are they contiguous or adjoining?

STATE OF MICHIGAN 

GRETCHEN WHITMER 

DEPARTMENT OF LICENSING AND REGULATORY AFFAIRS 

MARLON I. BROWN, DPA 

GOVERNOR 

LANSING 

DIRECTOR 

Section 4: Issues Being Appealed (eneck 

ai that apply) 

True Cash and Taxable Value 

[J poverty Exemption 

[J Taxable Value Only (calculation) 

{J Disabled Veterans Exemption 

Uncapping of Taxable Value 

[J Eligible Manufacturing Personal Property (ESA) 

[1 Exemption from Taxation (other than the denial of a 

[1 Classification 

Principal Residence or Qualified Agricultural Exemption} 

Section 5: Explain the Reason for this Appeal 

The Subject Property was listed for sale in 2022 and heavily marketed to prospective buyers 

by Friedman Real Estate, a respected local commercial real estate brokerage. Friedman 

received numerous purchase offers on behalf of the owner, however none were satisfactory 

until our offer of $630,000 was accepted in 2023 after being on market for many months. Our 

contention is that market forces have accurately established the "true cash value" to be 

$630,000. 

Further, we obtained an appraisal (enclosed) from a MAI appraiser with 

Professional Valuation Services LLC prior to our purchase which further established the 

market value to be $630,000. 

Lastly, with appropriate disclosure from the owner that the highest paying tenant was 

scheduled to vacate, the projected Net Operating Income at time of purchase was 

appropriately $27,000, further dampening buyer demand and property value. 

We respectively request that the 2024 Taxable and Assessed Value be established at 

$315,000. 

| 

Section 6: Jurisdictional Issues 

Year(s) you are appealing: 

2024 

Did you protest the assessment at a Board of Review (BOR)? 

Yes 

O Neo 

{£ Yes, check which BOR you attendad AND attach the BOR decision; 

[14 Maret 

[1 auty 

[J December 

if No, check the applicable reason(s): 

Not required to attend 

[| Assessment Change Notice was not received by Petitioner 

[Hl] Appealing a purported Clerical Error or Mutual Mistake of Fact (if yes, Include explanation in Section 65)

STATE OF MICHIGAN 

GRETCHEN WHITMER 

DEPARTMENT OF LICENSING AND REGULATORY AFFAIRS 

MARLON |. BROWN, DPA 

GOVERNOR 

LANSING 

DIRECTOR 

*Use the multiple parcel form for additional, contiguous parcels. 

Section 7: Valuation Information 

Parcet identification Number: 

50-22-24-351-001 

Trassification of Property: 

Real 

Personal 

(check one) 

Agricultural 

Commercial 

Industrial 

Residential 

Timber-Cutover 

Developmental 

Utility 

{check one) 

Gurrent Assessed Value (also known as State Equalized Value) as estanlished by the BOR: 

$374,050 

Current Taxable Value as established by the BOR: 

$374,050 

What do you believe isthe fair mar ket value {also known as True Cash Value)? 

$630,000 

Multiply the True Cash Value by .6 and enter here. This is your contention of Assessed Value. 

$315,000 

If you belleve the Taxable Value differs from your con 

enter your contention of Taxable Value. 

tention of Assessed Value, 

t of Treasury may appeal this issue to the Tribunal* 

Section 8: Classification Information *only the ti Dep’ 

Parcel Identification Number: 

50-22-24-351-001 

Current Classification of Property as established by Board of Review: 

Real 

Personal 

(check one) 

O 

Industrial 

Residential 

Timber-Cutover 

Developmental 

Utility 

{check one) 

Agricultural 

Commercial 

What do you believe Is the property’s classification? 

Real 

Personal 

(check one) 

Agricultural 

Commercial 

Industrial 

Residentlat 

 Timber-Cutover 

Developmental 

Utility 

{check one) 

if improved property, how is tl 

Office 

It improved property, for What use was the property designed? 

{Office 

he property currently being used?

STATE OF MICHIGAN 

GRETCHEN WHITMER 

DEPARTMENT OF LICENSING AND REGULATORY AFFAIRS 

MARLON |. BROWN, DPA 

GOVERNOR 

LANSING 

DIRECTOR 

Fee Information 

Does the subject property have a Principal Residence Exemption of at toast 50% as of the date of the filing of this petition? 

a Yas 

No 

Are you appealing ONLY the dental of a Poverty Exemption or Disabled Veterans Exemption? 

0 Yes 

No 

1f you answered yes to either or both of the above questions, you are not required to pay any filing fees. 

The filing fee is based on the greater of the State Equalized Value or Taxable Vaiue in contention. 

{f you are appealing more than one 

parcel, the parcel with the highest State Equalized Value or Taxable Value in contention will be used to determine your filing fee, plus 

$25.00 will be added for each additional parcel being appealed, not to exceed a totai filing fee of $1,000. 

if your property is residential property (see MCL 205.762) and 

the State Equalized Value or Taxable Value in contention is. 

Filing Fee Is: 

$100,000.00 and under 

$125.00 

$100,000.01 to $600,000.00 

$200.00 

$Over $500,000.00 

$300.00 

If your property is NOT residential property (see MCL. 205.762) and 

the State Equalized Value or Taxable Value in contention is: 

Filing Fee is: 

$100,000.00 and under 

$250.00 

* plus $25.00 for each additional parcel, as indicated above. 

If your property is NOT residential property and the State Equalized Value or Taxable Value in contention is $100,000.01 or greater the 

| eee does not qualify for small Claims. Therefore, an Entire Tribunat petition must be filed. 

Signature “required 

Petitioner or AttorneyfAuthorized Repr esentative’s Signature: 

1s!

2024 BOARD OF REVIEW DECISTON 

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The Novi Board of Review Ts reviewed vour appeal Tor 2024 and has made the 

{ 

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—————— 

2024 

POST BOARD OF REVIEW ASSESSED VALUE 

124 POST BOARD OF REVIEW TAXABLE VALUE 

———— 

PRINCIPAL RY 

IMPTION QUALIFIED AG 

NC 

Ruason 

: 

AT MARKET VALUE-NO CHANGE 

ed value, fu 

if you disagree with the decision of the Board of Roview regarding the 2024 as 

he Michigan Tax Tripunal by filing a petition thal can be obtained at www michigan govitaxtib 

mated 

to 

P.O. 

Box 

40232, 

Lansing. 

M! 

48909. 

Filing 

deadline 

of May 

31 

for Commerca 

Developmental Real Commercial Personal, Industrial Personal and Utility personal Propedy. 

| 

residential Real, Agricultural Real, Timper - Cul Over Real, and Agricultural Personal Property. 

2685 

he internet may 

call (248) 347-0485 

of slop by the Assessmy office 

to eblaw 

a 

© 

roperty Classifica appeals CINDY may be appeated io fie State Fax Commission

Seller's Settlement Statement 

Birmingham Title Agency 

26000 W, 12 Mile Rd. 

Southfield, Mi 48034 

Phone: (248)633-2737 

Fax (248)268-8168 

Date: 04/1323 

Time: 4:16:14PM 

Escrow no.; BT-10792 

Clase of escrow: 04/14/23 

Escrow officer: Jamie Blosser 

Borrower: MRC Meadowbrook, ne 

Saller: H & S Properties, Le 

Property location: 24520 Meadowbrook Road 

Novi, Mi 48375 

Financial Consideration 

Contract sales price 

I 

oo 

Prorations/Adjustments 

Chitown taxes 

_0414i23-0T0Y28 

County taxes 

0414123 - 12/01/23 

Security Depo 

Rent Prorafions 

Commissions 

oo 

Commission pald at settlement 

EE 

DE 

37,800.00 

Listing agent commission to Friedman Real Estate -Famnington Hills 630,000.00 @ 

3,00% = 18,800.00 

7 Tile Agency 

Owners Policy 

Coverage: 630,000.00 

2,250.00 

Version: ALTA Owners Policy {06/17/06} 

Recording Charges 

_ 

oo 

EiyiCoury 

tastaings 

10 Birmingham 

Tile Agency... 

—— 

69300 

State tax/stamps to Birmingham TileAgenoy 

472600 

Mortgage 

Payoff 

ees 

118,182.43 

i 

Water Escrow to Birmingham Tile Agency 

500,00 

Subtotals 

290,269.03 

834,587.22 

Balance Due TO Seller 

344,328.19 

634,587.22 

834,587.22

Evaluation Report 

Report Prepared For (Clien ): 

Ms. Dana Chambers 

Report Prepared 

By: 

Daniel F. Essa, MAIL LL.M, J.D. 

Property 

24520 Meadowbrook Rd. 

Novi, MI 48375 

Professional Valuation Services, LLC | JPMorgan Chase Bank, N.A. 

Oakland County 

2152 Commons Parkway 

TX1-2678 

Tax Parcel ID: 50.-22-24-351-001 

Okemos, Mi 48846 

2200 Ross Avenue 6th Floor 

2023 Tax Assessment: $361,760 

(517) 333-9900 

Dallas, TX 75201 

(Implied True Cash Value: $723,529) 

dessa@pas-el.com 

dana lchambers@chase.com 

Delinquent Taxes: $0.00 

Owner: H & S Properties, LLC 

Project No.; 0B-23-000800-0001 

Date of the Report: March 30, 2023 

This evaluation report is presented in a RESTRICTED APPRAISAL format. The significant elements of scope included the following: This 

evaluation is intended to comply with all applicable standards of the Uniform Standards of Professional Appraisal Practice (USPAP) as 

promulgated by the Appraisal Board of the Appraisal Foundation and adopted by the Appraisal Institute, FIRR.EA, the 0.CC., and the 

appraisal standards of JPMorgan Chase Bank, N.A. Michael 

L. Hendricks, Certified General Real Estate Appraiser No. 1205068457, 

physically inspected the subject property, gathered and analyzed the necessary data, and compiled said appraisal. Daniel 

F. Essa 

reviewed said rough draft, and concurred with the final value estimate. 

There are three traditional approaches to value that are utilized to derive value opinions in real estate. These are the Sales Comparison 

Approach, the income Approach, and the Cost Approach. The Cost Approach was not considered reliable in determining market value 

given the 

difficulty presented 

in determining 

a meaningful depreciation estimate. 

Further, market participants would typically make 

decisions based on the property's economic potential and/or what similar properties are trading for 

in the market, At the time 

of 

inspection, the subject was approximately 70.4% leased to multiple tenants, and 29.6% vacant, indicating 

a Leased Fee interest. 

However, upon completion of the pending sale whereby the new owner will ocoupy the vacant space, as well as the spaces of multiple 

MTM and expired tenants, the subject will be approximately 43.3% leased to a single tenant, with the remainder (approximately 56.7%) 

owner-occupied. Given the Leased Fee interest, the Income Approach was considered to be an appropriate measure 

of economic 

potential. 

As such, the 

most applicable approaches to value 

are 

the Income Approach and the Sales Comparison Approach 

in 

determining the market value of the Leased Fee Interest. 

Lease and sale comparable data from the competing area of the subject was 

ufilized 

to 

help establish the market value 

of the subject property. 

Qualitative adjustments were applied 

to each comparable 

to 

commensurate them to the subject. The value is predicated on the general assumptions stated later in this report. 

Neither Daniel 

F. Essa, nor Michael L. Hendricks, have performed services, as an appraiser or in any other capacity, regarding the 

property that is the subject of this report within the three-year period immediately preceding acceptance of this assignment. 

The subject site is located at 24520 Meadowbrook Rd., Novi, Oakland County, Michigan. 

The facility is located along the east line of 

Meadowbrook Read, just north of 10 Mite Rd., in an area surrounded by numerous retail and office facilities. The city of Novi is located in 

the Metro Detroit Region. The Metro Detroit Region includes the primary counties of Wayne, Oakland, and Macomb, with Detroit being 

the principal and largest city in the region. 

The city of Novi can be described as being bound by the cities of Wixom and Walled Lake and Commerce Township on the north; the city 

of Northvilie and Northville Township on the south; the city of Farmington Hills on the east; and Lyon Township on the west. The 

immediate neighborhood can be defined as being bound by 12 Mile Road on the north; 8 Mite Road on the south; Haggerty Road on the 

east; and Novi Road on the west. 

population of approximately of

tects 5 

2.8M 

Avatlabilisy 

Inventory 

oe 

ASG 

SRE CTE 

$154 GE 

8.8% & 

IE 

Demand 

firsentony 

Key Performance Indicators 

nfistion Austad 

fre 

Cont 

EFS 

rations 

nce ivigs 

aganey 

6.26% 

1 Mpsorgtion GF 

§ Hes. 

mn 

gn 

opp 

ootsen; 

12 40 Nes Dewees) $F 

0] 

as 

$21.48 

{ 

Bast 

$2 Mah 5 

red fl tne] 

Time Range 

1¥ 

3Y 

SY 

HY 

af 

5155 

[3 

S194 

A review of sales data provided by CoStar Analytics, indicated that th 

subject property averaged $154/sf whichis an increase over th 

radius averaged $22.59/sf which is a slight increase over the 5 

are currently averaging 11.9% of the available space currently 

vacancy according to CoStar. 

e avel 

-year average of $22.11/sf on mi 

being vacant showing an increase over the 5-year average 

e average sale price of off 

rage of $135/sf over the past 5 years. 

xed expel 

ice properties within a 2-mile radius of the 

Rental rates within that same 

nse structures. Vacancy rates 

of 10.2%

Bldg Area (SF) 

5,512 sf 

Occupancy 

Upon purchase, 56. 

occupied and 43.3% leased to a 

single tenant 

Yr. Built 

1985, with subsequent renovations 

Zoning 

"R-4" One-Family Residential 

Rem. Econ. Life 

20 years 

Conformance to Zoning 

Legal and None-Conforming 

(“Grandfathered”) 

Site Size 

0.78 ac (33,794 sf) 

Property Type 

Office Facility 

Seismic Hazards | None 

Current Use 

Office Facility 

Condition 

Average 

Source of Bldg Area 

City of Novi / Oakland County 

Quality 

Average 

Date of Inspection 

March 21, 2023 

FEMA Flood 

Zone X, Oakland County 

Property Inspected by 

Michael L. Hendricks 

Zone 

Map #26125C0827F; September 29, 2006 

The subject was inspected (interior and exterior) on March 21, 2023. Physical information regarding the subject property was gathered at 

this inspection, as well as from the Novi Assessor's Office. The subject was considered to be in overall average condition at the time of 

inspection. Reliance was placed on the subject's legal descriptions and other recordings as provided by the municipal documents 

supplied 

by 

Novi, 

in 

order 

to 

determine 

the 

presence 

and whereabouts 

of 

any 

easements, 

restrictions, 

covenants, 

or 

other 

encroachments that may encumber the subject property. The presence of such items was not researched independently. 

The subject features a 5,512 square foot Office Facility which was constructed in 1985, with subsequent renovations. The 

subject is 

situated on 

a single parcel of land which contains a total of approximately 0.78 acres of land (33,794 sf) which equates to a land-to- 

building ratio of 6.13t0 1 on a building footprint of 5,512 square feet. The subject is considered to have an average location with average 

frontage and visibility located in an area surrounded by commercial and office properties in the immediate area along both Meadowbrook 

Rd., and 10 Mile Rd., to the south. The facility is located along the east line of Meadowbrook Road, just north of 10 Mite Rd. 

The subject 

features approximately 1528 of frontage along the east line of Meadowbrook Road, with one curb cut. 

The building consists of wood-frame construction, with brick veneer and a gabled, asphalt shingled roof. The facility featured multiple 

various sized office space 

(currently configured for 5 tenants) consist of a general open and private office spaces, storage rooms wo (2) 

2 p.c. restrooms, As reported, the prospective owner intends to consolidate and reconfigure the majority of the interior spaces (with the 

exception of the 2,386 sf chiropractic suite) into one jarger office for the owner's use. 

The interior of the office spaces varied somewhat depending on the occupants needs, but generally consist of lay-in acoustical tiled 

ceilings with recessed LED lighting, and painted drywall walls. The flooring consists of a mix of ceramic tite and commercial grade carpet. 

The spaces are heated/cooled by gas-forced air HVAC systems. The the facility features adequate on-site parking for an estimated 34 

vehicles (est.). 

The subject improvements are considered to be in average overall condition and consist of average quality construction, demonstrating 

an estimated effective age of 25 years, with an estimated remaining economic life span of 20 years based on economic life estimates 

provided by the Marshall Valuation Service. 

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«ps Vacant”: The highest and best use would be to hold the land for future residential, or other approved development, in accordance 

with the zoning, until such time that sufficient demand becomes present. 

“As Improved”: The highest and best use “as improved” is for continued use as an office facility. 

The Income Capitalization Approach is pased on the premise that there is a relationship between the amount of income that a property is 

capable of producing and its value, This approach considers the ability of a property to produce income and recognizes that value is the 

present worth 

of future benefits resulting from ownership 

of the property. Listed 

in the Addenda of this report are rents of similar 

properties together with a location map. In order to obtain appropriate adjustments, the rents were compared with each other. A summary 

of the comparables is listed in the following table: 

RENT COMPARABLE SUMMARY 

Supgect 

. 

CompaRABLE 1 

COMPARABLE 2 

WR 

| 24520 Meadowbrook Rd, 

51-255 N. Main St. 

14435 Merriman Rd 

5022 W. Maple Rd. 

Novi, Mi 

Plymouth, Mi 

Livonia, Ml 

W. Bloomfield, Mt 

GBA / NRA (SF) 

551215512 

21,000 

21,000 

6,240 76,240 

i 

7,937 /7,937 

i 

Tenant Area (SF) 

- 

2,000 

- 

1,816 

Lease Date 

- 

June, 2018 

January, 2021 

June, 2018 

tease Term 

- 

5 Years 

H 

5 years 

! 

7 years 

Lease Rent/SF 

: 

- 

$14.95 

: 

$17.12 

| 

$14.00 

Expenses 

ES 

Triple Net 

Triple Net 

: 

Triple Net 

Year Built 

1985 

2002 

1977. Renovated 2015 

| 

1986 

Condition 

Average 

Average 

: 

Average 

! 

Average 

Parking 

Asphalt / Adequate 

Asphalt / Adequate 

i 

Asphalt 7 Adequate 

: 

Asphait / Adequate 

{c) Copyright 2023, Professional Valuation Services, Inc. - Information Deemed Reliable but Not Guaranteed 

Analysis of Units of Comparison: In the analysis of the market data, elements of comparison considered include: conditions of lease, 

market conditions, location, and physical characteristics. Based on an analysis of the data, adjustments have been considered for the 

following factors: 

is 

t Co 

ables: 

Location: All presented comparables were consi 

applied. 

dered to be located in superior locations and downward adjustments were 

 and 3 were smaller leasable areas (superior) and downward adjustments were applied. Comparable No.

RENT ADJUSTMENT GRAPH 

AND 

GR 

} 

Rent 1 

Rent 2 

Rentper 

SF 

7 

$14.95 

$1712 

Conditions of Lease 

0% 

0% 

0% 

Market Conditions 

0% 

0% 

0% 

Adjusted Rent per SF 

$14.95 

$17.12 

$14.00 

Location 

-3% 

2% 

-3% 

Size 

2% 

2% 

2% 

Quality & Appeal 

-3% 

-3% 

5% 

Age & Condition 

-3% 

7% 

0% 

Net Percentage Adjustments: 

41% 

HERHO% 

10% 

Adjusted Rent/SF 

$13.31 

$15.41 

$12.60 

Ee 

Unadjus 

Adjusted 

$17.12 

High 

High 

$15.41 

$14.00 

Low 

Low 

$12.60 

$15.36 

Mean 

Mean 

$13.77 

After these adjustments, the comparables ranged from $12.60 to $15.41 with a mean of $13.77/sf on Triple-Net expense structures. In 

this instance, a rental rate toward the lower mean of the indicated range of $13.00 per square foot was considered to be reasonable. 

Subject 

Lease Discussion: The first step in valuing the lease fee estate is to analyze the subject's contract rent to determine 

if it is 

consistent with the market. As previously detailed, 

at the time of inspection, the subject was approximately 70.4% leased to multiple 

tenants, and 29.6% vacant, indicating a Leased Fee interest. However, upon completion of the pending sale whereby the new owner wilk 

occupy the vacant space, as well as the spaces of multiple MTM and expired tenants, the subject will be approximately 43.3% leased to a 

single tenant, with the remainder (approximately 56.7%) owner-occupied. 

in this instance, considering the larger owner-occupied space, 

the subject will be analyzed on NNN expense structures. As such, the subject's contract rent for the single leased space are set forth as 

follows: 

Doinidis Chiropractic health Center, Plic.: This tenant currently leases approximately 2,386 square feet (43.3%) of net 

rentable area. The current lease was renewed on July 

1, 2019, for a 5-year term, ending July 31, 2024, with oneoptions for 

renewal. The current rental rate is $2,600 per month, which equates to approximately $13.08 per square foot on modified-gross 

expense structures, with the tenant responsible for all expenses except for real estate taxes and insurance. 

The tenants modified-gross rental rate needs to be adjusted to 

a triple net expense structure for comparison to the typical 

market rental rate. Expenses were estimated based on $2.53/sf based on historic taxes; $0.25/sf for insurance. When deducting 

a final estimated of $2.78 from the tenant's rental rate to allow for landlord paid expenses, this equates to a tripie-net rental rate 

of $10.30 per square foot. The tenant's rental rate fell below the range of the estimated market rental rate of the adjusted 

comparables. In this instance, the tenant was considered to be below market rental rate. As such, a market rental rate of $13.00 

per square foot on triple-net expense structures will be utilized, and a deduction for below-market rent will be applied later in this 

report. 

: 

Potential Gross Rental Income 

is the amount that the subject can potentially generate 

if 

it were 

t's annual potential gross rental income can be calculated as follows:

Vacancy and Collection Loss: 

This figure represents the portion of the subject that would not be rented during the year. tis 

a 

percentage subtracted from the gross annual income. This figure also includes failure to collect rent for any reason. 

As previously 

reported, current office vacancy rates within the subject area indicate an average of 11.9% which is an increase over the 5-year average 

of 10.2% vacancy according to CoStar. 

In this instance, considering the subject market and historical vacancy trends, 

a long-term 

vacancy and collection loss estimate of 10% was considered to be reasonable and appropriate for the subject property. 

Effective Gross incomes 

This figure is the amount that the subject will actually generate after reflecting vacancy and collection loss. In 

this instance, the subject's effective annual income was estimated at $64,490. 

Operating Expenses: These are expenses necessary to maintain the subject and include such items as ad valorem taxes, insurance, 

maintenance & repairs, utilities, and reserves for replacement. To estimate the net income to be generated by the subject, the expenses 

incurred in producing this income must be deducted. In this instance, the subject is being analyzed on a triple-net basis with the tenant 

responsible for all expenses outside of management and reserves for replacements. 

included within the management function is the responsibility of complete supervision of the subject property. The subject 

property is an industrial facility which is analyzed on a triple-net basis. As such management of the property is considered non-intensive 

and a management fee equal to 4% of the effective gross income has been estimated. 

Reserve Allowance; The reserve allowance is an expense allowance for the periodic replacement of building components which have a 

shorter economic life than the structure as a whole. After considering the physical characteristics of the subject property, 

a reserve 

allowance of $0.20 per square foot was estimated for the subject property. 

Net Operating Income: This is the amount of income left after expenses have been paid, but before debt service and depreciation. This 

figure will be utilized in a Direct Capitalization analysis. The following table reconstructs the previously detailed income and expenses to 

arrive at the estimated net operating income for the subject property. 

STABILIZED OPERATING STATEMENT 

Income 

Office Space (2,386 @ $13.00/sf) 

$31,018 

Owner-Occupied Space (3,126 @ $13.00/sf) 

$40,638 

Potential Gross Income 

$71,686 

Less Vacancy & Collection Loss (10%) 

($7,166) 

Effective Gross Income 

$64,490 

Expenses 

Per SF 

Amount 

Fixed 

Ad Valorem Taxes” 

$2.53 

$1,393 

Insurance” 

$0.25 

$138 

Variable 

Management (4%) 

$0.47 

$2,580 

CAM*™ 

$2.00 

$276 

Utilities** 

$1.75 

$276 

Reserves 

$0.20 

$1,102 

Total Expenses 

$7.20 

$5,764 

($5,764) 

Net Operating Income 

$58,726 

penses attributable to vacancy

et 

t Re 

e 

Deductions must be considered for rental income loss associated with the below market rental rates of the 2,000 sf of tenant space. The 

total remaining contract rent for the tenant space is subtracted from the total market rate to arrive at the loss of rental income. This rental 

income is then discounted back to the present value utilizing a “safe” rate of 6%. 

Doinidis Chiropractic health Center, Plc leases approximately 2,386 sf of space at a rental rate of $10.30/sf on NNN (adjusted) 

expense structures. This lease expires in July, 2024. The rent loss for the remaining 1.25 years of the subject lease is calculated as 

follows: 

Rent Loss Valuation 

Yrl 

Yr2 

Market Rent 

$31,018 

$7,755 

Contract Rent 

$24,576 

$6,144 

Difference 

$6,442 

$1,811 

Discount Factor (6%) 

0.943396 

0.889996 

Present Value 

$6,077 

$1,434 

Total 

$7,511 

Therefore, the final “As Is” Market Value is estimated as follows: 

Estimated “As Stabilized” Value 

$652,511 

Rent Loss Deduction 

$ 

7.511> 

Final “As Is” Market Value 

$645,000 

Say 

= $645,000 

As noted, the Sales Comparison Approach was considered the most applicable approach to determine market value 

of the subject 

property. The following comparables were considered most similar to the subject. 

SALE COMPARABLE SUMMARY 

Sunset 

CotparaBLE 1 

COMPARABLE 2 

COMPARABL 

COMPARABL 

PPPTPRNN 

54500 Meadowbrook Ad, 

14841 Keel St. 

33476 Lyndon Si. 

E300 W. 

X 

2185 & Milford id, 

Novi, Mi 

Plymouth Twhr., MI 

Livorna, MI 

Novi, M3 

© 

wilioroMiitors Twp. i 

i 

GBA /NRA (SF) 

5512/5512 

7.2007 7.200 

4,520 74,520 

7485717495 

: 

5,775/5,775 

Date of Sale 

= 

July 1.2021 

Qctober 27, 2020 

Marsch 15, 2022 

: 

February 24, 2023 

$987 500 

: 

$700,000

Analysis 

of Sales Comparables: 

Market Conditions: Up until the recent COViD-19 pandemic, market conditions had generally improved in recent years. As such, 

a “Pre-COVID" Market Condition adjustment was applied for generally improving market conditions. 

However, although some office facilities were initially forced to close early in the pandemic, they are now open and generally 

operating at full capacity with necessary health and safety protocols in place. As such, pandemic related downward adjustments 

typical for other commercial developments were not considered to be applicable. 

Location: Comparables No. 1, 2 and 4 were considered to have inferior locations and upward adjustments were applied. 

Size: Comparable No. 2 was a smaller facility (superior) and a downward adjustment was applied. Comparables No. 

1 and 3 were 

larger facilities (inferior) and upward adjustments were applied. 

Quality & Appeal: Comparables No. 

1 and 3 were considered to be superior in quality & appeal and downward adjustments were 

applied. Comparable No. 4 was considered to be inferior in this regard and an upward adjustment was applied. 

Age & Condition: Comparables No. 2 and 4 were considered to be superior in this regard and downward adjustments were 

applied. 

Land to Building: Comparable No. 4 featured greater land area (superior) and a downward adjustment was applied. Comparable 

No. 3 was considered to be inferior in this regard and an upward adjustment was applied. 

Other: Comparable No. 4 featured approximately 26% of the space located on a lower walkout level with a lower quality of 

puildout (inferior) and an upward adjustment was applied. 

Your attention is directed to the following Sales Adjustment Grid and Graph, which outlines the application of our adjustments. 

SALE ADJUSTMENT GRAPH AND GR 

Sale 1 

Sale 2 

© 

Saled 

Sale 4 

Gash Equivalent Price/SF 

$105.56 

$140.62 

$431.75 

g12121 

Date of Sale 

71 

10/27/20 

3/15/22 

2124123 

Pre-COViID Market Conditions 

2% 

2% 

1% 

0% 

Post-COVID Market Conditions 

0% 

0% 

0% 

0% 

Adjusted Cash Equivalent 

$107.67: 

$112.83 

$133.07: 

iBr2n2t 

Location 

3% 

3% 

0% 

3% 

Size 

3% 

2% 

3% 

0% 

Quality & Appeal 

-3% 

0% 

-10% 

3% 

Age & Condition 

0% 

2% 

0% 

2% 

Land to Building 

0% 

0% 

2% 

3% 

Other 

0% 

0% 

0% 

5% 

Nef Percentage Adjustments 

3% 

Heise 

ew 

Adjusted Sale Price/SF 

$110.90 

$111.70 

$126.41 

$128.48 

Unadjusted 

Adjusted 

$131.75 

High 

High 

$128.48 

Low 

$110.90

“As Is" Market Value As previously discussed, the tenant (Doinidis Chiropractic health Center, Pllc) currently leases their space at, what 

was considered to be, a below market rental rate. Therefore, the final "As Is” Market Value is estimated as follows: 

Estimated “As Stabilized” Vaiue 

$661,440 

t 

Loss 

Deduct 

< 

> 

Final “As Is” Market Value 

$653,929 

Therefore, the final “As Is” Market Vaiue vis the Sales Comparison Approach is estimated as follows: 

Say 

= $654,000 

Effective Date of Value 

Interest Appraised 

“As Is” Market Values 

March 21, 2023 

Leased Fee 

$650,000 

Marketing Time Opinion: 

12 Months {1 Year) 

Reasonable Exposure Time: 

12 Months (1 Year) 

Extraordinary Assumptions and Limiting Conditions: 

American Disabilities Act. Recent interpretations of the American Disabilities Act (ADA) may result in judicial statues which require that 

commercial properties comply with design specifications for disabled persons. The American Disabilities Act could have a negative effect 

on the value of a property. 

Due to the various political and legal issues involved with the American Disabilities Act, the appraiser is not 

qualified to render an opinion regarding any impact on the subject property value attributed to ADA compliance and 

it is recommended 

that an attorney or professional with expertise in such matters be contacted. 

ition. We are not structural engineers and are not qualified to determine the structural soundness of the subject. 

The 

value conclusion contained herein is subject to the subject building and foundations being structurally sound. 

. The cost to cure the noted deferred maintenance, 

if any, was estimated by the appraiser based on costs 

obtained from the Marshall and Swift publication. 

Should actual contractor's cost vary significantly, the appraiser reserves the right to 

amend the value conclusion accordingly. 

Market value means the most probable price which 

a property should bring 

in 

a competitive and open market under all conditions 

requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue 

stimulus, Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under 

conditions whereby: 

Buyer and seller are typically motivated; 

to be their own best interests;

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