Martin Jeff Heppler.pdf
Martin Jeff Heppler, Petitioner Vs. Township Of Emmett, Respondent · 25-003019-TT
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RECEIVED JN 28 2025 fy ey N ol MICHIGAN Tax A pz STATE OF MICHIGAN GRETCHEN WHITMER DEPARTMENT OF LICENSING AND REGULATORY AFFAIRS MARLON |. BROWN, DPA GOVERNOR LANSING DIRECTOR Mortpg Jei¥ Hepuloo MICHIGAN TAX TRIBUNAL Petitioner(s’ \% MTT Docket No. Fret? py Ss 7 Lodged Fpwgr 7 Respondent(s) ENTIRE TRIBUNAL PROPERTY TAX PETITION 1. Property Parcel No: _ 0 - mp @ - ps” pp (If more than one parcel is at issue, attach a completed Multiple Parcel Petition Form addressing all other parcels at issue.) 2. The property identified above is real ___personal. 3. If more than one parcel of real property is under appeal, are the properties contiguous? ___Yes ___ No. (If no, separate Petitions are required for each non- contiguous parcel.) 4. Are all of the parcels of personal property located on a parcel of real property under appeal? ___Yes____No. (If no, separate Petitions are required for each parcel of personal property not located on a parcel of real property under appeal.) 5. If parcels of personal property are under appeal, when were the personal property statements filed by parcel number (attach additional page if necessary): 6. The property identified above is classified as Comm cpvit nt
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MTT Docket No. Page 2 of 4 8. 10. 11. 12. 13. If a protest was required and no protest was made, list the separate and specific facts upon which Petitioner relies to invoke the Tribunal's authority over the assessment or assessments at issue (attach additional page if necessary). If the appeal was not submitted by the deadline for the filing of an appeal for the classification or classifications of the properties at issue (i.e., May 31 or July 31 of the tax year involved), list the separate and specific facts upon which Petitioner relies to invoke the Tribunal's authority over the assessment or assessments at issue (attach additional page if necessary): The property or properties at issue are located in Calton County. The property or properties’ address is: A AA aE E rs pga 7 The assessment or assessments at issue were established by the (applicable local governmental unit): OE AN EE er Petitioner's legal residence or principal office address is: Plast Tx 7 et fe cs EY This appeal involves issues relating to the (check all that are applicable): 1. the property or properties’ true cash and taxable values L the property or properties’ taxable value only If the property or properties’ taxable value is at issye, is there a dispute as to the value of an addition or loss? _ Yes No uniformity of
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augustapd@tds.net From: Fowler, Will <Will.Fowler@colliers.com> Sent: Thursday, April 17, 2025 3:38 PM To: Augustapd@tds.net Subject: Appraisal Quote 2000 E. Columbia Hi Jeff, After looking over the property, the fee would be $3,500 with a valuation date of 12/31/2024. If you are able to appeal the 2024 taxes to (valuation date of 12/31/2023), | could add a second value in the single report for an additional $750 or a total of $4,250. 1 can complete this appraisal in 15 business days from engagement and payment of a retainer. Again, here was my quick and dirty analysis. My as-is estimate of your pay 2025 taxes is $14,434 Based on your purchase price of $300k, and increased by 6% per year, your modified taxes would be $9,613. This is probably a best case scenario. The savings would be $4,821 for pay 2025. Again, there are no guarantees that 1). | will appraise the property for any particular dollar amount and 2) that you will win. if you were going to hire me to testify that would be an additional fee charged hourly (doesn’t usually happen). Thanks and let me know if you have any questions! Best, Will Fowler, MAI Valuation Services Director | Grand Rapids Valuation & Advisory Services will. fowler@colliers.com Direct: +1 616 988 5843 | Mobile: +1 616 970 8040 We've Moved New Address: 333 Bridge St. NW, Suite 1010 | Grand Rapids, MI 49504 | United States Lid & 3 © of) colliers.com | View Privacy Policy
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MTT Docket No. Page 3 of 4 15. If more than the current tax year is being appealed, list the separate and specific facts upon which Petitioner relies to invoke the Tribunal’s authority over the prior tax vear or years (attach additional page if necessary): 16. The values for the property identified above as established by Respondent's Board of Review are: Tax Year True Cash Value Assessed Value Taxable Value 262.3 ] 237 £re 20 vf gE ans” naz, S00 17. Petitioner contends that the values for the property identified above are: Tax Year True Cash Value State Equalized Value Taxable Value dod ER RT) JIL, sos id 2 15% sens 18. The values in dispute for the property identified above are: Tax Year True Cash Value State Equalized Value Taxable Value 19. Petitioner requests the following relief (attach additional page if necessary): FF 7 pv “ va + - Redisone pp add Vo lee wod red Foie Sr
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MTT Docket No. Page 4 of 4 Signature o Petitioner's Authorized Representative or, if none, Petitioner: yz LY Hd 7 ’ id Morb, Jedd oy a Email Address: ,,,, os oot ad 7 7 Mailing Address: 20. Date: A EZ
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Colliers INTERNATIONAL FORMER RECREATIONAL CENTER 2000 East Columbia Ave. Battle Creek, Michigan 49014 APPRAISAL REPORT Date of Report: May 29, 2025 Colliers File #: GRR250041
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COLLIERS INTERNATIONAL . LETTER OF TRANSMITTAL vawationaaovisorvservices | Colliers INTERNATIONAL 333 Bridge Street NW, Suite 1010 Grand Rapids, MI 49504 USA MAIN+1 616 774 3500 FAX +1616 242 0612 wes www.colliers.com/valuationadvisory May 29, 2025 Martin Jeffrey Heppler Owner P.O. Box 281 Richland, MI 49083 RE: Former Recreational Center 2000 East Columbia Ave. Battle Creek, Michigan 49014 Colliers File #: GRR250041 Mr. Heppler: Pursuant with our engagement, the above captioned property was appraised utilizing best practice appraisal principles for this property type. This appraisal report satisfies the scope of work and requirements agreed upon by Martin Jeffrey Heppler and Colliers International Valuation & Advisory Services. At the request of the client, this appraisal is presented in an Appraisal Report format as defined by USPAP Standards Rule 2-2(a). My appraisal format provides a detailed description of the appraisal process, subject and market data and valuation analyses. The purpose of this appraisal is to develop opinions of the Retrospective Market Value (True Cash Value) of the subject property's fee simple interest. For purposes of this report, the terms True Cash Value (TCV) and market value will be considered synonymous and will be used interchangeably. This will be further explained in the forthcoming report. As will be seen, the valuation date are retrospective dates. The valuation dates in this report are for Tax Year 2024 (valuation date of December 31, 2023) and Tax Year 2025 (valuation date of December 31, 2024). The following table conveys the final opinions of market value of the subject property that are developed within
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TABLE OF CONTENTS GRR250041 LETTER OF TRANSMITTAL INTRODUCTION 1 Executive Summary 1 Aerial Photograph 3 Subject Property Photographs 4 Identification of Appraisal Assignment 9 Scope of Work 12 DESCRIPTIONS & EXHIBITS 14 Regional Map 14 Regional Analysis 15 Local Area Map 20 Local Area Analysis 21 Site Description 29 GIS Aerial Map 31 Zoning Map 32 Flood Map 33 Wetland Map 34 Estimated Usable Land Area 35 Estimated Usable And Surplus Land Area 36 Assessor’s Sketch 37 Improvement Description 38 Assessment & Taxation 41 Zoning Analysis 43 Market Analysis 44 Highest & Best Use 53 VALUATION 55 Valuation Methods 55 Income Approach 57 Market Rent Analysis 57 Lease Summation Table 59 Comparable Lease Map 60 Comparable Rent Data Sheets 63 Potential Gross Rent 68 Income & Expense Analysis 68 Rental Income Analysis 69 Vacancy & Credit Loss 69 Expense Comparable Table 69 Conclusion of Operating Expenses 70 Development of Capitalization Rate 71 Direct Capitalization Conclusion 74 Adjustments to Value 74 2024 Warehouse Rent Lease Summation Table 75 Comparable 2024 Warehouse Rent Lease Map 76
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TABLE OF CONTENTS CONTINUED GRR250041 Land Valuation 107 Land Sale Summation Table 108 Land Sales Location Map 109 Land Sales Data Sheets 110 Land Sales Valuation Conclusion 114 Reconciliation of Value Conclusions 116 CERTIFICATION ASSUMPTIONS & LIMITING CONDITIONS ADDENDA Engagement Letter Valuation Glossary Qualifications of Appraiser Qualifications of Colliers International Valuation & Advisory Services
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EXECUTIVE SUMMARY GENERAL INFORMATION GRR250041 Property Name Property Type Address City State Zip Code County Core Based Statistical Area (CBSA) Market Submarket Latitude Longitude Number Of Parcels Assessor Parcel Total Sev Value Census Tract Number SITE INFORMATION Former Recreational Center Industrial - Other Industrial 2000 East Columbia Ave. Battle Creek Michigan 49014 Calhoun Battle Creek, Ml West Michigan Battle Creek / West Calhoun County 42.307400 -85.148300 1 10 008 005 00 $245,850 19.00 Land Area Usable Unusable Excess Surplus Total Topography Shape Access Exposure Current Zoning Flood Zone Seismic Zone IMPROVEMENT INFORMATION Acres Square Feet 3.25 141,570 28.26 1,230,987 0.00 0 6.75 294,030 38.26 1,666,587 Sloping below street grade Irregular Average Fair/Average Light Industrial (LI) Zone X (Unshaded) & Zone AE Low Risk Gross Building Area SF (GBA) Net Rentable Area (NRA) Total Number Of Buildings Total Number Of Stories Year Built Quality Condition Type Of Construction Land To Building Ratio Site Coverage Ratio Parking Type 6,320 SF 5,840 SF 3 1 1987 Average Average Class S 22.4: 1 4.5% Surface
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EXECUTIVE SUMMARY CONTINUED GRR250041 HIGHEST & BEST USE Development Of An Industrial Property As Market AsVacant Conditions Warrant As Improved Continued Use As An Industrial / Senice Use Property EXPOSURE TIME & MARKETING PERIOD Exposure Time 12 Months or Less Marketing Period 12 Months or Less TENANCY INFORMATION Tenancy Vacant RETROSPECTIVE RETROSPECTIVE VALUATION INDIGES VALUE AS-IS VALUE AS-IS INTEREST APPRAISED FEE SIMPLE FEE SIMPLE DATE OF VALUE DECEMBER 31, 2023 DECEMBER 31, 2024 Direct Capitalization $280,000 $290,000 Direct Capitalization $/SF $48/SF $50/SF NOI Proforma $26,736 $27,831 NOI $/SF $4.58/SF $4.77/SF Capitalization Rate 11.91% 11.91% INCOME CONCLUSION $280,000 $290,000 Income Conclusion $/SF $48/SF $50/SF SALES CONCLUSION $300,000 $310,000 Sales Conclusion $/SF $51/SF $53/SF FINAL VALUE $300,000 $310,000 $/SF $51/SF $53/SF
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AERIAL PHOTOGRAPH GRR250041 lop /AutolSales i Used;car/dealer Riverview Excavating 4
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SUBJECT PROPERTY PHOTOGRAPHS GRR250041 SUBJECT EXTERIOR SUBJECT EXTERIOR SUBJECT EXTERIOR
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SUBJECT PROPERTY PHOTOGRAPHS CONTINUED GRR250041 STE SUBJECT EXTERIOR SUBJECT EXTERIOR SITE PHOTO
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SUBJECT PROPERTY PHOTOGRAPHS ! CONTINUED GRR250041 BE SITE PHOTO INTERIOR PHOTO INTERIOR PHOTO
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SUBJECT PROPERTY PHOTOGRAPHS CONTINUED GRR250041 INTERIOR PHOTO
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SUBJECT PROPERTY PHOTOGRAPHS CONTINUED GRR250041 INTERIOR PHOTO INTERIOR PHOTO INTERIOR PHOTO
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IDENTIFICATION OF APPRAISAL ASSIGNMENT GRR250041 PROPERTY IDENTIFICATION The subject is Former Recreational Center, a single-tenant other industrial property totaling 5,360 SF NRA located on a 38.26-acre site at 2000 East Columbia Ave. in Battle Creek, Calhoun County, Michigan. The assessor's parcel number is: 10 008 005 00. The legal description of the subject property is as follows: EMMETT TWP/T25 R7TW, PART SE1/4 SEC.8 & PART NE1/4 SEC.17 DESCAS COM ON N & § 1/4 LINE 660 FT § OF § LINE CLIFF ST. TO POE THENCE E 112.86 FT NOODEG 27°48"W 132 FT TO SOUTHEASTERLY LINE EAST COLUMBIA AVE TH NE'LY ALONG § LINE COLUMBIA AVE 1400 FT+/- TO W LINE SOUTH RAYOND RD S00DEG 20°46"E 330.24 FT S89DEG 39'14"W 233 FT S00DEG 20°46"E 600 FT NB9DEG 39"14"E 91.30 FT TO WEST BANK KALAMAZOO RIVER SW'LY ALONG RIVER 2360 FT+/- TO N/S 1/4 LINE SEC 8 NORTH ALONG N/S 1/4 LINE 1071 FT +- TO POB. CLIENT IDENTIFICATION The client of this specific assignment is Martin Jeffrey Heppler. PURPOSE The purpose of this appraisal is to develop opinions of the Retrospective Market Value and As-Is Market Value of the subject property’s fee simple interest. INTENDED USE The intended use of this appraisal is for use in: to estimate the true cash value (as defined in MCL 211.27) of the real property as of December 31, 2023, for the 2024 tax year and as of December 31, 2024 for the 2025 tax year to be used for pending tax appeals before the Michigan Tax Tribunal. An existing leased fee ownership interest may exist for the property. Because the appraisal is for ad valorem property tax purposes, a fee simple interest is to be appraised subject to market occupancy and market rent. The report is not intended for any other use. INTENDED USERS Intended users of this report include Martin Jeffrey Heppler and the Michigan Tax Tribunal. Use of this report by third parties and other unintended users is not permitted. This report must be used in its entirety. Reliance on any portion of the report independent of others, may lead the reader to erroneous conclusions regarding the property values. Unless approval is provided by the authors no portion of the report stands alone. ASSIGNMENT DATES Date of Report May 29, 2025 Date of Inspection May 12, 2025 Valuation Date - Retrospective December 31, 2023 Valuation Date - Retrospective December 31, 2024 PERSONAL INTANGIBLE PROPERTY
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| IDENTIFICATION OF APPRAISAL ASSIGNMENT CONTINUED GRR250041 indicate they purchased the property for $300,000 on June 8, 2023. No other transactions were noted to have occurred in the last three years other than a name change (QCD. It is noted that the property (along with another parcel) sold for $1.0 MM on 9/2/2019 with the speculative use of the property for Cannabis Use at that time. Since then, the market for cannabis properties has become oversaturated and market values have returned to typical levels. The concluded as-is market value as of 12/31/2023 is consistent with the purchase price in June of 2023. Subject Sale Status Research of the applicable public records, private data services and an interview of the current owner and/or broker revealed that the subject property is not under a current agreement of sale or option and is not currently offered for sale on the open market. DEFINITIONS This section summarizes the definitions of value, property rights appraised, and value scenarios that are applicable for this appraisal assignment. All other applicable definitions for this assignment are located in the Valuation Glossary section of the Addenda. DEFINITIONS OF VALUE Given the scope and intended use of this assignment, the following definitions of value is applicable: True Cash Value/Market Value Definitions Michigan Law utilizes and defines true cash value as follows. "'Cash value' means the usual selling price at the place where the property to which the term is applied is at the time of assessment, being the price that could be obtained for the property at private sale, and not at auction sale except as otherwise provided in this section, or at forced sale. The usual selling price may include sales at public auction held by a nongovernmental agency or person when those sales have become a common method of acquisition in the jurisdiction for the class of property being valued. The usual selling price does not include sales at public auction where the sale is part of a liquidation of the seller's assets in a bankruptcy proceeding or where the seller is unable to use common marketing techniques to obtain the usual selling price for the property. A sale or other disposition by the state or an agency or political subdivision of the state of land acquired for delinquent taxes or an appraisal made in connection with the sale or other disposition or the value attributed to the property of regulated public utilities by a governmental regulatory agency for rate-making purposes shall not be considered controlling evidence of true cash value for assessment purposes." Based on the interpretation of Michigan Tax Law, through various rulings and precedents coming from the Michigan Tax Tribunal and the Michigan courts, the courts have held that true cash value is synonymous with fair market value. For purposes of this report, the terms True Cash Value (TCV) and market value will be considered synonymous
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IDENTIFICATION OF APPRAISAL ASSIGNMENT CONTINUED GRR250041 Market Value 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; Both parties are well informed or well advised, and acting in what they consider their own best interests; A reasonable time is allowed for exposure in the open market; Payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and The price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale. 2 PROPERTY RIGHTS APPRAISED ah wON = The property rights appraised constitute the fee simple interest. Fee Simple Estate Absolute ownership unencumbered by any other interest or estate, subject only to the limitations imposed by the governmental powers of taxation, eminent domain, police power and escheat.? VALUE SCENARIOS Retrospective Value A value opinion effective as of a specified historical date. The term retrospective does not define a type of value. Instead, it identifies a value opinion as being effective at some specific prior date. Value as of a historical date is frequently sought in connection with property tax appeals, damage models, lease renegotiation, deficiency judgments, estate tax, and condemnation. Inclusion of the type of value with this term is appropriate, e.g., “retrospective market value opinion.”
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SCOPE OF WORK GRR250041 INTRODUCTION The appraisal development and reporting processes requires gathering and analyzing information about those assignment elements necessary to properly identify the appraisal problem to be solved. The scope of work decision must include the research and analyses that are necessary to develop credible assignment results given the intended use of the appraisal. Sufficient information includes disclosure of research and analyses performed and might also include disclosure of research and analyses not performed. The scope of work for this appraisal assignment is outlined below: > The appraiser analyzed the regional and local area economic profiles including employment, population, household income, and real estate trends. The local area was further studied to assess the general quality and condition, and emerging development trends for the real estate market. The immediate market area was inspected and examined to consider external influences on the subject. » The appraiser confirmed and analyzed legal and physical features of the subject property including sizes of the site and improvements, flood plain data, seismic zone, zoning, easements and encumbrances, access and exposure of the site, and construction materials and condition of the improvements. This process also included estimating the remaining economic life of the improvements, analysis of the subject's site coverage and parking ratios compared to market standards, a process to identify deferred maintenance and a conclusion of the subject's overall functional utility. » The appraiser completed an industrial market analysis that included market and sub-market overviews. The West Michigan market and Battle Creek / West Calhoun County sub-market overviews analyzed supply/demand conditions using vacancy, absorption, supply change and rent change statistics. Conclusions were drawn regarding the subject property’s competitive position given its physical and locational characteristics, the prevailing economic conditions and external influences. » The appraiser conducted a Highest and Best Use analysis, determining the highest and best use of the subject property As-Vacant and As-Improved. The analysis considered legal, locational, physical and financial feasibility characteristics of the subject property. Development of the Highest and Best Use As- Improved explored potential alternative treatments of the property including demolition, expansion, renovation, conversion, and continued use "as-is." > The appraiser confirmed and analyzed financial features of the subject property including tax and assessment records. This information as well as trends established by confirmed market indicators was used to forecast performance of the subject property. > Selection of the valuation methods was based on the identifications required in USPAP relating to the intended use, intended users, definition and date of value, relevant property characteristics and assignment conditions. As a result, this appraisal developed the Income (Direct Capitalization) and Sales Comparison approaches to value. The resulting value indicators were reconciled within the Analysis of Value Conclusions section. The appraisal develops opinions of the Retrospective Market Value and As-Is Market Value of the subject property's fee simple interest. The reasoning for including or excluding traditional approaches to value
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SCOPE OF WORK CONTINUED GRR250041 SOURCES OF INFORMATION The following sources were contacted to obtain relevant information: SOURCES OF INFORMATION ITEM SOURCE Tax Information Emmett Charter Tow nship Tax Assessor Zoning Information Emmett Charter Tow nship Zoning Code Site Size Information Emmett Charter Tow nship Tax Assessor Building Size Information Emmett Charter Tow nship Tax Assessor Flood Map InterFlood Demographics Pitney Bow es/Gadberry Group - GroundView ® Comparable Information See Comparable Datasheets for details Legal Description Emmett Charter Tow nship Tax Assessor General Property Data Public Records, Property Contact, Property Inspection SUBJECT PROPERTY INSPECTION The following table illustrates the Colliers International professionals involved with this appraisal report and their status related to the property inspection. SUBJECT PROPERTY INSPECTION APPRAISER INSPECTED EXTENT DATE OF INSPECTION William Fow ler, MAI Yes Interior/Exterior May 12, 2025
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REGIONAL ANALYSIS GRR250041 INTRODUCTION The Battle Creek, MI Metropolitan Statistical Area (MSA) comprises Calhoun County. According to the 2020 census, the population was 134,310. Calhoun County is in southern Michigan, equidistant between Chicago and Detroit, at the junction of Interstate 69. Its three largest cities are Albion, Marshall, and Battle Creek in the northwest corner. The city of Battle Creek is the most densely populated area in the county. There are 19 townships, four incorporated cities and four villages within the boundaries of Calhoun County. Battle Creek serves as headquarters for the Defense Logistics Information Services program in conjunction with the Department of Defense in Washington. The county is home to the world headquarters of the Kellogg Company and its food manufacturing facilities. The MSA is a U.S. Customs Port of Entry and has a Foreign Trade Zone. A group of business clusters including automotive and plastic parts manufacturers, insurance companies, iron foundries, farms and related agricultural businesses provide a variety of employment opportunities in the region. Dairy farming accounts for approximately one third of the county's total agricultural income. The principal crops raised in Calhoun County are corn, hay and wheat. The U.S. Veterans Hospital in Battle Creek, along with regional hospitals in Battle Creek and Marshall provide healthcare services and remain as key employment providers. DEMOGRAPHIC ANALYSIS The following is a demographic study of the region sourced by Esri ArcGIS®, an on-line resource center that provides information used to analyze and compare the past, present, and future trends of geographical areas. Demographic changes are often highly correlated to changes in the underlying economic climate. Periods of economic uncertainty necessarily make demographic projections somewhat less reliable than projections in more stable periods. These projections are used as a starting point, but we also consider current and localized market knowledge in interpreting them within this analysis. Please note that our demographics provider sets forth income projections in constant dollars which, by definition, reflect projections after adjustment for inflation. We are aware of other prominent demographic data providers that project income in current dollars, which do not account for inflation. A simple comparison of projections for a similar market area made under the constant and current dollar methodologies can and likely will produce data points that vary, in some cases, widely. Further, all forecasts, regardless of demographer methodology, are subjective in the sense that the reliability of the forecast is subject to modeling and definitional assumptions and procedures. Population According to Esri ArcGIS®, a Geographic Information System (GIS) Company, the Battle Creek metropolitan area had a 2024 population of 133,307 and experienced an annual growth rate of -0.2%, which was lower than the Michigan annual growth rate of 0.0%. The metropolitan area accounted for 1.3% of the total Michigan population (10,070,141). Within the metropolitan area the population density was 188.8 people per square mile compared to the lower Michigan population density of 177.9 people per square mile and the lower United States
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REGIONAL ANALY CONTINUED GRR250041 POPULATION DENSITY YEAR us Mi CBSA 2024 Per Square Mile 95.8 177.9 188.8 2029 Per Square Mile 97.6 177.1 186.8 Source: Esri ArcGIS® Education The Battle Creek, MI MSA is served by a group of higher education institutions offering undergraduate and graduate programs. Kellogg Community College (KCC) is a public college providing academic, occupational, general and lifelong learning opportunities at its main campus in Battle Creek, Michigan. KCC has an annual enrollment of approximately 14,000 students. Household Trends The 2024 Households number of households in the metropolitan area was 54,350. The number of households in the metropolitan area is projected to grow by 0.0% annually, increasing the number of households to 54,363 by 2029 Households. The 2024 average household size for the metropolitan area was 2.40, which was -5.14% smaller than the United States average household size of 2.53 for 2024. The average household size in the metropolitan area is anticipated to retract by 0.25% annually, reducing the average household size to 2.37 by 2029. YEAR us Mi CBSA 2024 Households 130,716,571 4,095,143 54,350 2029 Households 134,930,577 4,151,689 54,363 2024-2029 CAGR 0.6% 0.3% 0.0% Source: Esri ArcGIS® AVERAGE HOUSEHOLD SIZE YEAR us Mi CBSA 2024 2.53 2.41 2.40 2029 2.50 2.36 2.37 2024-2029 CAGR (0.24%) (0.42%) (0.25%) Source: Esri ArcGIS® The Battle Creek metropolitan area had 27.36% renter occupied units, compared to the lower 27.25% in Michigan and the higher 35.64% in the United States. HOUSING UNITS us Mi CBSA Ow ner Occupied 64.36% 72.75% 72.64% Renter Occupied 35.64% 27.25% 27.36% Source: Esri ArcGIS® The 2024 median household income for the metropolitan area was $59,656, which was -24.55% lower than the
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REGIONAL ANALYSIS CONTINUED GRR250041 YEAR us Ml CBSA 2024 $79,068 $71,476 $59,656 2029 $91,442 $82,229 $67,582 2024-2029 CAGR 2.95% 2.84% 2.53% Source: Esri ArcGIS® Consumer Spending Battle Creek Health Care, 26.87% Food atHome, 23.70% Furnishings, 10.17% Auto Maint, 0.42% Apparel, 7.53% Computers, 0.81% Education, 5.20% Entertainment, 13.1% Eating Out, 12.11% Consumer Spending Comparison Average Household [ — inl 1 [LB | © S$ SS > & i F&F NERS & Ww & FF F&F NF» & & CF Ew # United States # Michigan u Battle Creek EMPLOYMENT Total employment has increased annually over the past decade in the state of Michigan by 0.7% and decreased annually by 0.1% in the area. From 2023 to 2024 unemployment increased in Michigan by 0.8% and increased by 0.8% in the area.
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EGIONAL ANALYSIS CONTINUED GRR250041 EMPLOYMENT & UNEMPLOYMENT STATISTICS 2015 - 2024 TOTAL EMPLOYMENT UNEMPLOYMENT RATE Michigan Battle Creek, MI Hetropoltan Statistical Battle Creek, MI United States* Michigan Metropolitan Year Total % A Yr Ago Total % AYr Ago Statistical Area 2015 4,517,872 2.1% 61,192 1.7% 5.3% 5.4% 5.1% 2016 4,628,148 2.4% 61,674 0.8% 4.9% 5.0% 4.8% 2017 4,684,777 1.2% 60,288 (2.2%) 4.4% 4.6% 4.8% 2018 4,735,249 1.1% 59,838 (0.7%) 3.9% 4.2% 4.3% 2019 4,771,493 0.8% 59,329 (0.9%) 3.7% 4.1% 4.2% 2020 4,375,760 (8.3%) 55,357 (6.7%) 8.1% 10.0% 10.1% 2021 4,492,824 2.7% 54,894 (0.8%) 5.3% 5.7% 6.4% 2022 4,652,961 3.6% 56,867 3.6% 3.6% 4.2% 4.7% 2023 4,802,002 3.2% 59,403 4.5% 3.6% 3.9% 4.4% 2024 4,823,716 0.5% 60,769 2.3% 4.0% 4.7% 5.2% CAGR 0.7% - (0.1%) - - - < Source: U.S. Bureau of Labor Statistics The preceding chart depicts unemployment trends in the 7.0% 6.5% 6.0% 5.5% 5.0% 4.5% 4.0% 3.5% 3.0% USA Area Jun May 2024 37% Michigan 4.4% 49% UNEMPLOYMENT RATES Jul | Aug 2024 | 2024 45% | 4.4% 57% | 4.9% 65% | 58% *Unadjusted Non-Seasonal Rate Oct 2024 39% 48% 50% Nov 2024 4.0% 4.8% 50% Sep 2024 39% 46% 52% Dec 2024 38% 50% 57% Feb 2025 4.5% 6.0% 6.6% Jan 2025 44% 59% 6.2% Mar 2025 4.2% 5.7% 6.2% Apr 2025 39% 47% 57% region, Michigan, and the U.S. The unemployment rates have seen fluctuations in the last twelve months, and are a bit above the levels of twelve months ago. In the state of Michigan unemployment has decreased over the previous month by 1.0% and decreased by 0.5% in the area.
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REGIONAL ANALYSIS CONTINUED GRR250041 EMPLOYER NAME EMPLOYEES INDUSTRY Denso International America, Inc. 2,817 Manufacturing Kellogg Company 2,279 Manufacturing Firekeepers Casino 1,680 Arts/Entertainment/Recreation Veterans Administration Medical Cen 1,581 Healthcare/Social Assistance Hart-Dole-Inouye Federal Center 1,500 Public Administration Michigan Air National Guard 1,488 Public Administration Bronson Battle Creek Hospital 1,352 Healthcare/Social Assistance Battle Creek Public School District 1,089 Education Oaklaw n Hospital 1,000 Healthcare/Social Assistance Meijer, Inc. 927 Wholesale/Retail Trade Source: hitps://cms5.revize.conV The preceding chart depicts the top employers in Calhoun County. Principal employers are spread throughout diverse sectors, including manufacturing and arts/entertainment/recreation. Denso International America Inc., a global automotive components manufacturer, is the largest employer in Calhoun County with 2,817 workers. Headquartered in Battle Creek, the Kellogg Company is the second largest employer in the region with 2,279 workers. The multinational food manufacturing company produces convenience food and cereal under several brands including Corn Flakes, Pringles, Cheez-It and Eggo. The third largest employer is Firekeepers Casino, which features a hotel, casino, restaurants, and event center in Battle Creek. AIRPORT STATISTICS The following chart summarizes the local airport statistics. KALAMAZOO/BATTLE CREEK INTERNATIONAL AIRPORT (AZO) YEAR ENPLANED PASSENGERS % CHG 2013 129,211 BE 2014 134,832 4.4% 2015 122,081 (9.5%) 2016 154,242 26.3% 2017 146,314 (5.1%) 2018 152,845 4.5% 2019 151,254 (1.0%) 2020 52,559 (65.3%) 2021 79,542 51.3% 2022 72,551 (8.8%) 2023 87,626 20.8% Source: U.S. Department of Transportation SUMMARY The Battle Creek, MI MSA region benefits from the presence of the multinational Kellogg Company, providing jobs and tax revenues to the local economy. Industries such as manufacturing, healthcare and agriculture are
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LOCAL AREA MAP rownlee'Park i J/ | nds go JED) Lucky/Rooster Kitchen: &iCocktails xd @ \ & A NY ; Great fakes Holistics fey's py'puow
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LOCAL AREA ANALYSIS GRR250041 INTRODUCTION In this section of the report, | provide details about the local area and describe the influences that bear on the real estate market as well as the subject property. A map of the local area is presented on the prior page. Below are insights into the local area based on fieldwork, interviews, demographic data and experience working in this market. LOCAL AREA PROFILE The subject property is located in Battle Creek, Michigan, within Calhoun County. DEMOGRAPHIC PROFILE Following is a demographic study of the area, sourced by Esri ArcGIS®, an on-line resource center that provides information used to analyze and compare the past, present, and future trends of properties and geographical areas. Please note that our demographics provider sets forth income projections in constant dollars which, by definition, reflect projections after adjustment for inflation. We are aware of other prominent demographic data providers that project income in current dollars, which do not account for inflation. A simple comparison of projections for a similar market area made under the constant and current dollar methodologies can and likely will produce data points that vary, in some cases, widely. Further, all forecasts, regardless of demographer methodology(ies), are subjective in the sense that the reliability of the forecast is subject to modeling and definitional assumptions and procedures.
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OCAL AREA ANALYSIS CONTINUED GRR250041 DESCRIPTION 1 MILE 3 MILES 5 MILES DESCRIPTION 1 MILE 3 MILES 5 MILES POPULATION AVERAGE HOUSEHOLD INCOME 2010 Population 4,243 37,125 70,628 2024 $53,115 $77,830 $83,053 2020 Population 3,874 36,494 70,468 2029 $60,549 $89,889 $95,819 2024 Population 3,895 36,289 70,033 Change 2024-2029 14.00% 15.49% 15.37% 2029 Population 3,854 35,818 69,264 MEDIAN HOUSEHOLD INCOME Change 2010-2020 (8.70%) (1.70%) (0.23%) 2024 $43,150 $55,283 $56,173 Change 2020-2024 0.54% (0.56%) (0.62%) 2029 $48,872 $60,810 $62,498 Change 2024-2029 (1.05%) (1.30%) (1.10%) Change 2024-2029 13.26% 10.00% 11.26% NUMBER OF HOUSEHOLDS PER CAPITA INCOME 2010 Households 1,528 14,560 28,597 2024 $19,242 $31,096 $34,105 2020 Households 1,498 14,579 28,848 2029 $22,057 $36,243 $39,743 2024 Households 1,492 14,522 28,815 Change 2024-2029 14.63% 16.55% 16.53% 2029 Households 1,483 14,468 28,789 HOUSEHOLDS BY INCOME (2022) Change 2010-2020 (1.96%) 0.13% 0.88% Less than $15,000 21.21% 10.24% 10.02% Change 2020-2024 (0.40%) (0.39%) (0.11%) $15,000 - $24,999 11.56% 9.39% 9.88% Change 2024-2029 (060%) (0.37%) (0.09%) $25,000 - $34,999 1567% 1151% 11.76% HOUSING UNITS $35,000 - $49,999 13.83% 13.94% 14.41% Ow ner Occupied 943 9,588 19,265 $50,000 - $74,999 20.14% 21.10% 19.41% Renter Occupied 549 4,934 9,550 $75,000 - $99,999 8.37% 14.34% 13.61% HOUSING UNITS BY YEAR BUILT $100,000 - $149,999 7.73% 10.37% 10.85% Built 2020 or Later 0 0 11 $150,000 - $199,999 0.99% 5.81% 5.85% Built 2010 to 2019 4 115 523 $200,000 or More 0.50% 3.30% 4.23% Built 2000 to 2009 34 658 1,715 HOUSING BY UNITS IN STRUCTURE Built 1990 to 1999 41 1,331 3,043 1, Detached 1,433 11,493 22,295 Built 1980 to 1989 32 727 1,835 1, Attached 9 101 275 Built 1970 to 1979 136 2,077 4,222 2 50 687 1,165 Built 1960 to 1969 90 1,630 3,460 3or4 22 378 986 Built 1950 to 1959 232 2,666 5,979 5t09 26 505 1,084 Built 1940 to 1949 298 1,280 2,864 10to 19 67 784 1,509 Built 1939 or Earlier 894 5,748 8,336 20to 49 37 1,148 2,224 HOME VALUES 50 or More 10 832 1,715 Average $112,129 $164,135 $179,623 Mobile Home 106 303 737 Median $75,599 $137,909 $151,474 Boat, RV, Van, efc. 0 0 0 Source: Esri ArcGIS® Transportation Routes Major traffic arteries are shown in the chart below: MAJOR ROADWAYS & THOROUGHFARES HIGHWAY DIRECTION FUNCTION DISTANCE FROM SUBJECT M-96 / East Columbia Avenue east-west Local Highw ay The subject property fronts this street. M-294 north-south Local Highw ay This is within 2 miles of the subject property. +94 east-west Interstate Highw ay This is within 4 miles of the subject property. +194 north-south Interstate Highw ay This is within 3 miles of the subject property.
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LOCAL AREA ANALYSIS CONTINUED GRR250041 Economic Factors Battle Creek is a regional hub for the metropolitan area. The Fort Custer Industrial Park enhances Battle Creek’s core competencies in national defense, aviation, agriculture, manufacturing, and logistics. It is home to approximately 90 companies, including 25 international companies. The business park is anchored by Battle Creek Executive Airport at Kellogg Field, the U.S. Port of Entry and Foreign Trade Zone 43. The airport is home to Western Michigan University College of Aviation and the Duncan Aviation maintenance facility. Battle Creek's commercial activities are focused on its downtown area, with the Kellogg Company world headquarters and the W.K. Kellogg Foundation. The area includes commercial and retail spaces such as convenience stores, restaurants, entertainment venues, and locally owned businesses. Community Services Community services and facilities are readily available in the surrounding area. These include public services such as fire stations, hospitals, police stations, and schools (all ages). IMMEDIATE AREA PROFILE This section discusses uses and development trends in the immediate area that directly impact the performance and appeal of the subject property. Predominant Land Uses Significant development in the immediate area consists of various commercial uses along Columbia Avenue. Uses are mostly residential north of the Columbian Ave. corridor and lightly developed south of Kalamazoo River. The local area has a mix of commercial uses nearby and the composition is shown in the following graph. COMMERCIAL AREA COMPOSITION WRETAIL mOF FICE “INDUSTRIAL mMULTIFAMILY
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LOCAL AREA ANALYSIS
RSSSSS
SL SEE
CONTINUED
GRR250041
Multi-Family Development
The following chart shows a summary of multi-family data by type in the immediate area from CoStar.
»
-
’
-
VIUL LIT
L
J
[
a
"
CLASS
PROPERTIES |
NRA (SF)
AVG YRBLT |
A
1
153,171
2020
B
3
174,766
1982
c
19
1,280,465
1951
TOTAL
23
1,608,402
1958
Source: CoStar
The three largest multi-family properties are at 115 Pine Knoll Drive, 25 Michigan Avenue and 1103 East Michigan
Avenue with an NRA of 607,104 SF, 153,171 SF and 148,162 SF that were built in 1992, 2020 and 1989,
respectively. The closest large multi-family property in proximity to the subject is at 1975 Columbia Avenue East
with an NRA of 131,730 SF that was built in 1970. The majority of properties were constructed before 2000. The
following chart and map show the subject property and its location relative to the largest multi-family properties
in the immediate area from CoStar.
‘NAME
DISTANCE
MAP PIN
CLASS
NRA (SF)
STORES YEARBUILT
Pine Knoll Apartments
1.2 Miles
A
[e]
607,104
3
1992
The Milton
2.0 Miles
B
A
153,171
18
2020
Lakeside Apartments
0.8 Miles
[of
B
148,162
2
1989
Georgetow n Estates
0.3 Miles
D
[83
131,730
3
1970
Multifamily Building
1.3 Mies
E
[¢]
131,250
1
1960
North Branch Apartments
1.6 Miles
F
[¢3
131,126
3
1977
Harper Commons Mobile Homes
0.3 Miles
G
[3
100,000
1
1980
Williamsburg Apartments
1.5 Miles
H
Cc
52,123
3
1970
Queensw ood Apartments
1.5 Miles
I
[of
23,000
2
1984
Riverw alk Apartments
1.2 Miles
J
C
20,415
3
1972
Source: CoStar
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LOCAL AREA ANALYSIS rel) CONTINUED GRR250041 Retail Development The following chart shows a summary of retail data by type in the immediate area from CoStar. TYPE PROPERTIES NRA (SF) AVGYRBLT OCCUPANCY AVG RENT | General Retail 165 888,264 1962 99.2 $12.50 TOTAL 155 888,264 1962 99.2 $12.50 Source: CoStar The three largest retail properties are at 17 West Michigan Avenue, 50 West Michigan Avenue and 540 Main Street with an NRA of 46,044 SF, 34,499 SF and 24,487 SF that were built in 1920, 1930 and 1950, respectively. The closest large retail property in proximity to the subject is at 41 2nd Street with an NRA of 16,265 SF that was built in 1970. The majority of properties were constructed before 2000. The following chart and map show the subject property and its location relative to the largest retail properties in the immediate area from CoStar. NAME DISTANCE MAPPIN TYPE NRA (SF) % LEASED YEARBUILT Seventeen West 2.0 Miles A General Retail 46,044 100.0 1920 Retail Building 2.0 Miles B General Retail 34,499 100.0 1930 Main Street Market 1.4 Miles Cc Strip Center 24,487 100.0 1950 Architecture + Design 1.9 Miles D General Retail 22,676 100.0 1880 Family Dollar 1.2 Miles E General Retail 19,849 100.0 1980 People's Choice 1.9 Miles F General Retail 17,833 100.0 1910 Wills Auto Service 1.3 Miles G General Retail 17,5612 100.0 1960 Team Active 2.0 Miles H General Retail 16,816 100.0 1950 Retail Building 2.1 Miles | General Retail 16,800 100.0 2001 Kellog Community Bank 0.8 Miles J General Retail 16,265 100.0 1970 Source: CoStar bh } JsSeelye Kiafof 1 EENDOICEN /#The Cake House
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CONTINUED GRR250041 Office Development The following chart shows a summary of office data by class in the immediate area from CoStar. : ) E MMAR , CLASS PROPERTIES NRA (SF) AVGYRBLT OCCUPANCY AVG RENT B 15 475,680 1964 99.4 $18.48 © 29 245211 1953 95.7 $11.26 TOTAL 24 720,891 1956 97.0 $13.72 Source: CoStar The three largest office properties are at 25 West Michigan Avenue, 1 Michigan Avenue East and 190 East Michigan Avenue with an NRA of 122,937 SF, 115,530 SF and 78,282 SF that were built in 1891, 2013 and 1976, respectively. The closest large office property in proximity to the subject is at 340 Cliff Street with an NRA of 29,000 SF that was built in 1935. The majority of properties were constructed before 2000. The following chart and map show the subject property and its location relative to the largest office properties in the immediate area from CoStar. NAME oo DISTANCE MAP PIN CLASS NRA (SF) %LEASED YEARBUILT AVG RENT The Milton 2.0 Miles A B 122,937 90.6 1891 $18.48 Office Building 2.0 Miles B B 115,530 100.0 2013 NAv George W Toeller Professional Building 1.6 Miles Cc B 78,282 100.0 1976 NAv Hillard Lyon G 1.9 Miles D [03 41,000 100.0 1990 NAv Office Building 0.6 Miles E B 29,000 100.0 1935 NAv Commerce Point 1.8 Miles F [3 26,015 100.0 1909 $9.61 Office Building 9.8 Miles G B 25212 100.0 1970 NAv Riverw alk Centre 2.1 Miles H Cc 21,904 100.0 1970 NAv Office Building 2.0 Miles | B 21,771 100.0 1878 NAv Office Building 2.0 Miles J C 21,690 100.0 1940 N/Av Source: CoStar Ceresco iil
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LOCAL AREA ANA CONTINUED GRR250041 Industrial Development The following chart shows a summary of industrial data by type in the immediate area from CoStar. INDUSTRIAL SUMMARY TYPE PROPERTIES NRA (SF) AVG YRBLT OCCUPANCY AVG RENT Industrial 80 3,923,956 1957 97.9 $5.62 Flex 1 950,000 1970 100.0 - TOTAL 81 4,873,956 1957 98.0 $5.62 Source: CoStar The three largest industrial properties are at 235 Porter Street, 425 Porter Street and 425 Porter Street with an NRA of 950,000 SF, 760,000 SF and 475,000 SF that were built in 1970, 1950 and 1970, respectively. The closest large industrial property in proximity to the subject is at 235 Porter Street. All of the properties were constructed before 2000. The following chart and map show the subject property and its location relative to the largest industrial properties in the immediate area from CoStar. LARGEST INDUSTRIAL PROPERTIES NAME DISTANCE MAP PIN TYPE NRA (SF) % LEASED YEARBUILT AVG RENT Kelloggs Bldg 1 0.5 Miles A Flex 950,000 100.0 1970 NAv Kelloggs Bldg 1 0.7 Miles B Industrial 760,000 100.0 1950 NAv Kelloggs Bldg 2 0.7 Miles Cc Industrial 475,000 100.0 1970 NAv Kelloggs Institute 2.0 Miles D Industrial 380,000 100.0 1970 NAv Industrial Building 2.0 Miles E Industrial 323,230 100.0 1928 NAv Kraft Foods 0.7 Miles F Industrial 285,000 100.0 1920 NAv Industrial Building 0.8 Miles G Industrial 150,792 87.4 1907 $9.90 Behnke 0.9 Miles H Industrial 131,847 100.0 1940 N/Av Consumer Energy 1.4 Miles | Industrial 90,951 100.0 1960 NAv Industrial Building 1.8 Miles J Industrial 89,117 100.0 1910 NAV Source: CoStar
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LOCAL AREA ANALYSIS CONTINUED GRR250041 SUBJECT PROPERTY ANALYSIS The following discussion draws context and analysis on how the subject property is influenced by the local and immediate areas. Subject Property Analysis The uses adjacent to the property are noted below: > North - Various Commercial » South - Kalamazoo River / Vacant Land / Residential » East - Kalamazoo River / Vacant Land / Residential > West - Commercial Access The subject site has frontage on an arterial. Based on my field work, the subject's access is rated average compared to other properties with which it competes. Visibility The subject has limited visibility along East Columbia Avenue as the property list situated well below the Columbia Avenue corridor. The visibility of the property is not hampered by adjacent properties, trees or other obstructions. In comparison to competitive properties, the subject property has inferior visibility. Subject Conclusion Trends in the local and immediate areas, adjacent uses and the property's specific location features indicate an overall typical external influence for the subject, which is concluded to have a below average position in context of competing properties due to its limited visibility, high level of unusable area (topography, flood zone, wetlands, and easements. SUMMARY Battle Creek’s economy is influenced by the presence of the Kellogg Company world headquarters and Denso International America, Inc. The city’s industrial park and its downtown business district are key engines for the city’s economic development and employment base. Battle Creek has a strategic location near notable economic hubs, with convenient connections to well-traveled transportation networks.
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SITE DESCRIPTION General Description Assessor Parcel Number Of Parcels Land Area Primary Parcel Unusable Land Excess Land Surplus Land Total Land Area Shape Topography Drainage Utilities Street Improvements East Columbia Ave. South Raymond Road Frontage GRR250041 The subject site consists of 1 parcel. As noted below, the subject site has 1,666,587 SF (38.26 AC) of land area. The area is estimated based on the records of the Emmett Charter Township Tax Assessor and may change if a professional survey determines more precise measurements. As will be shown in graphics later in this section, a significant portion of the subject site is not considered usable. This includes the following approximations (most estimated utilizing the Calhoun County GIS mapping application). SITE AREA ALLOCATIONS AREA ACREAGE Usable Acres 3.25 Surplus Acres 6.75 Flood Way / Flood Hazard Area 1.97 Wetlands 22.37 Communication Tow er Easement 0.23 Heavily Sloped/ Access Easement 3.69 TOTAL GROSS ACRES 38.26 10 008 005 00 1 Acres Square Feet 3.25 141,570 28.26 1,230,987 0.00 0 6.76 294,030 38.26 1,666,587 Irregular - See Plat Map For Exact Shape Sloping below street grade Assumed Adequate All available to the site & Street Direction No. Lanes Street Type [$) Primary Street two-way four-lane major arterial Vv Secondary Street two-way two-lane connector street v* The subject has adequate frontgage along East Columbia Avenue and South Raymond Road.
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SITE DESCRIPTION CONTINUED GRR250041 Seismic The subject is in a low risk zone. Flood Zone Majority Of The Site Zone X (Unshaded). This is referenced by Community Number 260561, Panel Number 26025C0192C, dated April 04, 2011. Zone X (unshaded) is a moderate and minimal risk area. Areas of moderate or minimal hazard are studied based upon the principal source of flood in the area. However, buildings in these zones could be flooded by severe, concentrated rainfall coupled with inadequate local drainage systems. Local stormwater drainage systems are not normally considered in a community’s flood insurance study. The failure of a local drainage system can create areas of high flood risk within these zones. Flood insurance is available in participating communities, but is not required by regulation in these zones. Nearly 25-percent of all flood claims filed are for structures located within these zones. Minimal risk areas outside the 1-percent and .2-percent-annual- chance floodplains. No BFEs or base flood depths are shown within these zones. (Zone X (unshaded) is used on new and revised maps in place of Zone C.) Along The River Zone AE. This is referenced by Community Number 260561, Panel Number 26025C0192C, dated April 04, 2011. Zone AE is a High Risk Special Flood Hazard Area (SFHA). Special Flood Hazard Areas represent the area subject to inundation by 1-percent-annual chance flood. Structures located within the SFHA have a 26- percent chance of flooding during the life of a standard 30-year mortgage. Federal floodplain management regulations and mandatory flood insurance purchase requirements apply in these zones. Areas subject to inundation by the 1-percent- annual-chance flood event determined by detailed methods. BFEs are shown within these zones. (Zone AE is used on new and revised maps in place of Zones A1-A30.) Site Rating Overall, the subject site is considered a below average industrial site in terms of its location, exposure, and physical characteristics (flood zone, easements and wetlands), despite its location along a major arterial. Easements A preliminary title report was not available for review. During the on-site inspection, no adverse easements or encumbrances were noted. This appraisal assumes that there is no negative value impact on the subject improvements. If questions arise regarding easements, encroachments, or other encumbrances, further research is advised. Soils A detailed soils analysis was not available for review. Based on the development of the subject, it appears the soils are stable and suitable for the existing improvements.
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EXHIBITS GRR250041 GIS AERIAL MAP 10-008°005-00 HEPPLER MARTIN J & JUDITH M 2000 E COLUMBIA AVE #192, BATTLE CREEK |
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EXHIBITS CONTINUED GRR250041 ZONING MAP ARTESIAN CT MICHIGAN Ave—l A 7 bi LOURM CT m CLIFF ST i Fl | Al AGRICULTURAL BUSINESS DISTRICT GC GENERAL COMMERCIAL DISTRICT RR - RURAL RESIDENTIAL DISTRICT RC - REGIONAL COMMERCIAL DISTRICT [7] RA-LOWDENSITY RESIDENTIAL DISTRICT LI- LIGHT INDUSTRIAL DISTRICT [1 RB-MEDIUM DENSITY RESIDENTIAL DISTRICT [7] 1. INDUSTRIAL PARK DISTRICT
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EXHIBITS CONTINUED FLOOD MAP Flood Map Report Ne For Properly Located At 4 RealQuest CorelLogic 2000 COLUMBIA AVE E 192, BATTLE CREEK, MI 49014-6300 Report Date: 0528/2025 County: CALHOUN, MI Flood Zone Code Flood Zone Panel Panel Date AE 260561 - 26025C0192C 04/04/2011 Special Flood Hazard Area (SFHA) Within 250 ft. of multiple flood zones? Community Name In Yes (AE,X,X500) EMMETT Flood Zone Description: Zone AE-An area inundated by 100-year flooding GRR250041
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EXHIBITS CONTINUED GRR250041 WETLAND MAP etlands Estuarine and Ma 0 Deepwater [OJ Estuarine and Marine Wetland [OJ Freshwater Emergent Wetland Freshwater Forested/Shrub = Wetland Freshwater Pond Lake Other [I Riverine Riparian [| Forested/Shrub [] Herbaceous River Rd E
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EXHIBITS CONTINUED GRR250041 ESTIMATED USABLE LAND AREA J) HEPPLER MARTIN J] & JUDITH M 2000 E COLUMBIA AVE #192, BATTLE CREEK f Show Details 70 ES | It
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EXHIBITS CONTINUED ESTIMATED USABLE AND SURPLUS LAND AREA HEPPLER MARTIN J & JUDITH M = a oe 2000 E COLUMBIA AVE #192, BATTLE CREEK 4 | [ Show Details = (ER
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EXHIBI CONTINUED ASSESSOR'S SKETCH 28" canopy for go carts 560.00 sf 20 28" gocart track 1/2 mile x 16 ft pool for kiddie boats 75'x75" wd shed 10x12 120sf wd shed 10x12 120sf wd shed 10x14 140sf 18 hole mini golf Sketch by Apex Sketch 20 80" storage 3200.00 sf 12 ft sty ht 12 36! 40' office area 480.00 sf 8' Hgt 12' GRR250041 40' pole 2160.00 sf avg sty ht 13'
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IMPROVEMENT DESCRIPTION GRR250041 INTRODUCTION The information presented below is a basic description of the existing improvements. This information is used in the valuation of the property. Reliance has been placed upon information provided by sources deemed dependable for this analysis. It is assumed that there are no hidden defects, and that all structural components are functional and operational, unless otherwise noted. If questions arise regarding the integrity of the improvements or their operational components, it may be necessary to consult additional professional resources. MULTIPLE BUILDING DESCRIPTION GRID % YEAR EFF. ECON. REM. CLEAR DOORS BULDING GBA NRA OFFICE BUILT AGE LIFE LIFE HEGHT DOCK GRADE QUALITY CONDITION Building 1 3200 3200 3% 1988 20 45 25 12FT 0 1 Average Average Buiding2 ~~ 2,640 2,640 18% 1987 20 45 25 12-13 0 1 Average Average Canopy 480 0 10% 1988 20 45 25 12-13" 0 0 Average Average TOTAL 6,320 580 10% 0 2 Property Type Industrial - Other Industrial Design Single or Multi-Tenant Vacant - 1 Tenant Spaces Number of Buildings 3 (See Multiple Building Chart For Breakdown) Number of Stories 1 Net Rentable Area (NRA) 5,840 SF Gross Building Area (GBA) 6,320 SF Clear Height 12-13" Grade Level Doors 2 Site Coverage Ratio 4.5% Land to Building Ratio 224:1 Year Built 1987 AgelLife Analysis Actual Age 38 Years Effective Age 20 Years Economic Life 45 Years Remaining Life 25 Years Quality Average Condition Average Functional Design The subject is a former family recreation property with putt putt, a Go-Kart course, a bumper boat pool, battling cages and the like. The property closed some time
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IMPROVEMENT DESCRIPTION CONTINUED GRR250041 and a substantial investment would be required to get the property to usable condition. Adeduction to raze and / or fill in the dilapidated site improvements could be made, but since further development is not currently feasible, it is likely a potential buyer would leave the site improvement as-is until such time when use of the land could be developed economically. So no deduction is applied. Basic Construction Class S Foundation Concrete Slab With Footers Framing Steel Frame Exterior Walls Metal Roof Metal Seam Insulation Assumed to be standard and to code for both walls and ceilings Heating Forced Air Air Conditioning Sleeve Units Lighting Fluorescent and LED Interior Walls Drywall and exposed construction materials Electrical Assumed adequate and to-code. Ceilings Acoustical tile and exposed construction materials Windows Standard windows; glass in aluminum frames Doors Glass in metal frame Flooring Sealed concrete, ceramic tile, VCT Plumbing Standard plumbing for an industrial building Fire Protection The subject has smoke alarms but does not have a fire sprinkler system. Landscaping Asphalt paving, concrete sidewalks, concrete curbing, pole mounted lights and low maintenance landscaping Signage There is a monument style sign in front of the subject. Parking The subject property has ample, but an unstriped asphalt parking area that is in fair condition (spalling noted). The subject's parking lot provides more than adequate parking for industrial use. Deferred Maintenance The subject property has an ongoing maintenance program in place. Based on my interview with the property contact and the onsite inspection by the field appraiser,
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IMPROVEMENT DESCRIPTION CONTINUED GRR250041 Please refer to the Assumptions and Limiting Conditions section regarding this issue. ADA Compliance This analysis assumes that the subject complies with all ADA requirements. Please refer to the Assumptions and Limiting Conditions section regarding this issue.
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ASSESSMENT & TAXATION GRR250041 INTRODUCTION In 1994, Michigan passed Proposal A, a constitutional amendment that states that the taxable value of any residence or business cannot increase by more than 5.0% or the rate of inflation, whichever is less. In Michigan, the local assessor estimates the State Equalized Value (SEV), which is 50% of the “market value” of the property. Real estate taxes are based on the Taxable Value, which after a sale is set equal to the SEV. The assessor multiplies the previous year’s taxable value by the CPI (capped at a maximum increase of 5.0%) to calculate the Taxable Value. The Taxable Value will never be higher than the SEV, but can be much lower if property values are annually increasing faster than 5.0% and the property has not sold in a long time. Upon transfer of ownership, the new taxable value is set equal to the assessor's in-place estimate of SEV, and the old “capped” taxable value no longer applies. The subject property is located within Emmett Charter Township. The following assessed value and property tax based on the 2024 SEV and 2024 actual tax rates are summarized in the following table. ASSESSMENT & TAXES - TAX YEAR 2024 Tax Year 2024 Tax Rate 5.812780% Tax Rate Area Emmett Charter Tow nship Taxes Current Yes Taxes SF Basis Net Rentable Area APN TRUECASHVALUE TAXABLEVALUE EXEMPTIONS SEV BASETAX 10 008 005 00 $485,200 $242,600 $0 $242,600 $14,102 Totals $485,200 $242,600 $0 $242,600 $14,102 Total/SF $83.08 $41.54 $0 $41.54 $2.41 Additional Tax Charges Administrative Fee (upcharge on base taxes) 1.00% $141 Total Additional Tax Charges $141 Total Base Tax & Additional Tax Charges $14,243 Total Base Tax & Additional Tax Charges Per SF $2.44 Source: Emmett Charter Tow nship Assessment & Taxation Similarly, the following table illustrates the assessed value and property tax based on the 2025 SEV and 2024 tax rates (since the 2025 tax rates have not yet been published). This is summarized in the following table. ASSESSMENT & TAXES - TAX YEAR 2025 Tax Year 2025 Tax Rate 5.812780% Tax Rate Area Emmett Charter Tow nship Taxes Current Yes Taxes SF Basis Net Rentable Area APN TRUE CASH VALUE TAXABLEVALUE EXEMPTIONS SEV BASETAX 10 008 005 00 $491,700 $245,850 $0 $245,850 $14,291 Totals $491,700 $245,850 $0 $245,850 $14,291 Total/SF $84.20 $42.10 $0 $42.10 $2.45
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ASSESSMENT & TAXATION CONTINUED GRR250041 SUBJECT PROPERTY ANALYSIS The State Equalized Value (SEV) for the subject property is $242,600 (or $41.54/SF) in 2024 with a tax burden of $14,243 (or $2.44 PSF) in 2024. Similarly, State Equalized Value (SEV) for the subject property is $245,850 (or $42.10/SF) in 2025 with an estimated tax burden of $14,434 (or $2.47 PSF) in 2025. There are no exemptions in place. Total taxes for the property are $14,434 or $2.47/SF. According to the online records maintained by the Emmett Charter Township Assessor's Office, real estate taxes for the subject property are current as of the date of this report. CONCLUSION Ordinarily, property taxes would be calculated and deducted from the operating expenses of the property. In this instance, however, the appropriate tax amount is not known since it is the purpose of this report to determine what the appropriate value on which taxes are to be based. In such cases, the valuation applies a tax loaded capitalization rate. This is achieved by adding the effective tax rate to the capitalization rates and the result is the rate applied in the income approach. This will be shown in the forthcoming report.
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ZONING ANALYSIS GRR250041 INTRODUCTION Zoning requirements typically establish permitted and prohibited uses, building height, lot coverage, setbacks, parking and other factors that control the size and location of improvements on a site. The zoning characteristics for the subject property are summarized below: ZONING SUMMARY Municipality Governing Zoning Emmett Charter Township Planning & Zoning Department Current Zoning Light Industrial (LI) Permitted Uses Permitted uses within this zoning district primarily include self- storage, various senice use, various light industiral and wholesale warehousing / material distribution, office, auto senice, outdoor display / storage and amusment / recreation facilities. Current Use Light Industrial Is Current Use Legally Permitted? Yes Zoning Change Not Likely ZONING REQUIREMENTS Conforming Use The subject's improvements represent a legal, conforming use. Minimum Site Area (SF) 43,560 SF (Since the property lacks public sewer) Minimum Site Width (Feet) 150 Feet Minimum Yard Setbacks Front (Feet) 35 Feet Side (Feet) 20 Feet Side Road Fronting (Feet) 35 Feet Rear (Feet) 35 Feet Maximum Site Coverage 60% Maximum Building Height 35 Feet Parking Requirement Spaces Required (Industrial) Based on employment characteristics Spaces Provided Ample (Unstriped) Source: Emmett Charter Tow nship Planning & Zoning Department ZONING CONCLUSIONS Based on the interpretation of the zoning ordinance, the subject property is an outright permitted use that could be rebuilt if unintentionally destroyed. Detailed zoning studies are typically performed by a zoning or land use expert, including attorneys, land use planners, or architects. The depth of my analysis correlates directly with the scope of this assignment, and it considers all pertinent issues that have been discovered through my due diligence. Please note that this appraisal is not intended to be a detailed determination of compliance, as that determination is beyond the scope of this real estate appraisal assignment.
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MARKET ANALYSIS GRR250041 INTRODUCTION The market analysis section provides a comprehensive study of supply/demand conditions, examines transaction trends, and interprets ground level information conveyed by market participants. Based on these findings and an analysis of the subject property, conclusions are drawn with regard to the subject's competitive position within the marketplace. Below is a list of the various sections covered in the following Industrial Market Analysis: > West Michigan Industrial Market > Battle Creek / W. Calhoun County Industrial Submarket » Transaction Trends > Subject Property Analysis WEST MICHIGAN INDUSTRIAL MARKET The following is an analysis of supply/demand trends in the West Michigan Industrial market using information provided by CoStar, widely recognized as a credible source for tracking market statistics. The table below presents historical data for key market indicators. WEST MICHIGAN HISTORICAL STATISTICS (LAST TEN YEARS) PERIOD SUPPLY NEW CONSTRUCTION NET ABSORPTION ~~ VACANCY ASKING RENT 2015 ~~ 345,655,121 SF 2,029,841 SF 5,454,658 SF 3.7% $3.21/SF 2016 ~~ 347,212,654 SF 2,179,950 SF 4,437,658 SF 2.7% $3.43/SF 2017 ~~ 349,306,713 SF 2,209,810 SF 3,953,394 SF 1.7% $3.57/SF 2018 351,349,056 SF 2,413,569 SF 1,644,516 SF 1.7% $4.05/SF 2019 353,360,811 SF 2,825,782 SF (1,180,868) SF 2.3% $4.13/SF 2020 357,207,291 SF 4,544,646 SF 2,768,481 SF 3.2% $4.30/SF 2021 359,370,634 SF 2,542,776 SF 4,623,775 SF 2.6% $4.79/SF 2022 363,277,237 SF 3,914,288 SF 2,797,988 SF 2.6% $5.37/SF 2023 365,682,518 SF 2,661,371 SF 3,757,390 SF 2.3% $5.54/SF 2024 367,907,983 SF 2,323,743 SF 1,086,314 SF 2.4% $6.06/SF CAGR 0.6% = - = 6.6% “Supply numbers based on information w hich is amended/updated on an on-going basis by Costar Source: Costar® Over the past ten years the West Michigan Industrial market was strong where there was strength in prevailing Industrial supply/demand conditions. Over this time period the market inventory increased by 8.0%. Further there was positive absorption (8.5% change), moderate decrease in the vacancy rate (-1.3% change) and considerable increase of the asking average rent (88.8% change). Analysis of the data indicates the West Michigan Industrial market has gone through three distinctive trends over the past ten years. TEN YEAR HISTORICAL TREND ANALYSIS PERIOD ADDED SUPPLY NET ABSORPTION VACANCY ASKING RENT
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MARKET ANALYSIS CONTINUED GRR250041 The three year period from 2015 to 2017 was highlighted with increased supply, significant positive absorption, decrease of vacancy rates and considerable increase of asking rent in the market. The next three year period from 2018 to 2020 featured increased supply, slight positive absorption, moderate increase of vacancy rates and considerable increase of asking rent levels. The most recent four year period from 2021 to 2024 featured increased supply, positive absorption, moderate decrease of vacancy rates and considerable increase of asking rent levels. Over the past ten years the market had a compound annual growth rate (CAGR) of 0.6% per year. Vacancy has ranged from 1.7% to 3.7% with an average of 2.5%. Vacancy decreased from 3.7% in 2015 to 1.7% in 2017, increased from 1.7% in 2018 to 3.2% in 2020 and decreased from 2.6% in 2021 to 2.4% in 2024. WEST MICHIGAN VACANCY & SUPPLY (SF) 4% 370,000,000 4% 365,000,000 3% 360,000,000 3% 355,000,000 2% 350,000,000 2% 345,000,000 1% 340,000,000 1% 335,000,000 0% 330,000,000 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 SUPPLY VACANCY ©CoStar Over the past ten years asking rent has experienced a CAGR of 6.6%. Asking rent hit a low of $3.21/SF in 2015 and a high in 2024 at $6.06/SF. ASKING RENT 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 ASKING RENT ©CoStar In the past ten years a total of 27,645,776 SF were added to the supply with 29,343,306 SF of net absorption achieved during the same period. CONSTRUCTION/ABSORPTION & VACANCY. 6,000,000 4,000,000
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MARKET ANALYSIS CONTINUED WEST MICHIGAN TRAILING FOUR QUARTER PERFORMANCE PERIOD SUPPLY NEW CONSTRUCTION NET ABSORPTION ~~ VACANCY ASKING RENT 2024 Q2 366,285,682 SF 531,881 SF 281,724 SF 2.4% $6.01/SF 2024 Q3 366,447,055 SF 161,373 SF (303,822) SF 2.5% $6.11/SF 2024 Q4 367,907,983 SF 1,460,928 SF 1,416,038 SF 2.5% $6.09/SF 2025Q1 368,792,183 SF 884,200 SF (927,586) SF 3.0% $6.02/SF Source: Costar® GRR250041 As of Q1 2025 the West Michigan market has a total Industrial inventory of 368,792,183 SF with 11,078,197 SF vacant indicating a current vacancy rate of 3.0%. There was 884,200 SF completed last quarter, whereas there was 3,038,382 SF added in the last year. Over the past four quarters the West Michigan industrial market has experienced a moderate increase of supply. These key factors have resulted in positive net absorption, increase of vacancy rates and nominal increase of asking rent in the marketplace. 3.5% 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% WEST MICHIGAN VACANCY & ASKING RENTAL RATE (LAST FOUR QUARTERS) Rif 2024Q2 2024Q3 2024Q4 2025Q1 ASKING RENT VACANCY $6.12 $6.10 $6.08 $6.06 $6.04 $6.02 $6.00 $5.98 $5.96 ©CoStar Key supply/demand statistics for the most recent quarter, last year and historical averages are summarized below. Q1 2025 2024 Last 10 Total SF 368,792,183 367,907,983 356,033,002 Vacant SF 11,078,197 8,940,164 9,011,195 Market Vacancy 3.0% 2.4% 2.5% Construction Grow th Rate 0.2% 0.6% 0.6% Absorption Rate (0.3%) 0.3% 0.8% Average Asking Rent/SF $6.02 $6.06 $4.45 Source; Costar® Vacancy The Q1 2025 vacancy rate (3.0%) is slightly higher than last year (2.4%) and consistent with the average vacancy over the past ten years (2.5%). The historic vacancy trend indicates strong long-term demand for industrial space in the West Michigan market. The most recent vacancy trends demonstrate slightly inferior market conditions in
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MARKET ANALYSIS CONTINUED GRR250041 WEST MICHIGAN INDUSTRIAL CONSTRUCTION ACTIVITY SUMMARY STATUS NO. OF PROJECTS SIZE (SF) % OF SUPPLY Under Construction 29 9,404,693 2.5% Source: Costar® Absorption During Q1 2025 net absorption was -0.3% and net absorption was 0.3% over the last year. The West Michigan industrial market has established an overall trend of strong absorption (0.8%) over the past ten years. The historic absorption trend indicates strong long-term demand for industrial space in the West Michigan market. The most recent absorption trends demonstrate inferior market conditions in comparison to the historic trend and suggest continued stability moving forward. West Michigan Market Conclusion Based on the preceding analysis, the West Michigan Industrial market demonstrates sound fundamentals. Analysis of supply and demand factors indicate the market is currently stable with no evidence to prove this will change any time soon. The greatest strength of the market appears to be its low vacancy rates. There are no observed weaknesses of the market that stand out. BATTLE CREEK / W. CALHOUN COUNTY INDUSTRIAL SUBMARKET OVERVIEW The following is an analysis of supply/demand trends in the Battle Creek / W. Calhoun County Industrial submarket using information provided by CoStar. The table below presents historical data for key market indicators. BATTLE CREEK / W. CALHOUN COUNTY HISTORICAL STATISTICS (LAST TEN YEARS PERIOD SUPPLY NEW CONSTRUCTION NET ABSORPTION VACANCY ASKING RENT 2015 19,037,616 SF 0 SF 97,813 SF 1.2% $2.61/SF 2016 19,023,928 SF 0 SF 87,718 SF 1.6% $3.13/SF 2017 19,023,928 SF 0 SF (175,175) SF 1.8% $3.29/SF 2018 19,002,480 SF 0 SF 193,458 SF 1.4% $3.60/SF 2019 19,114,247 SF 120,000 SF 125,864 SF 0.9% $3.92/SF 2020 19,414,515 SF 305,310 SF 36,242 SF 1.8% $3.18/SF 2021 19,414,515 SF 0 SF 127,616 SF 2.4% $4.34/SF 2022 19,414,515 SF 0 SF (657,678) SF 4.1% $4.85/SF 2023 19,458,244 SF 43,729 SF 694,348 SF 2.3% $3.79/SF 2024 19,458,244 SF 0 SF 136,355 SF 1.7% $5.25/SF CAGR 0.2% - = - 7.2% "Supply numbers based on information w hich is amended/updated on an on-going basis by Costar Source: Costar® Over the past ten years the Battle Creek / W. Calhoun County Industrial submarket was strong where there was strength in prevailing Industrial supply/demand conditions. Over this time period the submarket inventory slightly increased by 2.5%. Further there was slight positive absorption (3.5% change), moderate increase in the vacancy rate (0.5% change) and considerable increase of the asking average rent (101.1% change).
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CONTINUED GRR250041 TEN YEAR HISTORICAL TREND ANALYSIS PERIOD ADDED SUPPLY NET ABSORPTION ~~ VACANCY ASKING RENT MARKET ANALYSIS 2015-2024 469,039 SF 666,561 SF 1.2%—1.7% $2.61—$5.25 10 Yrs 2.5% 3.5% 0.5% 101.1% 2015-2017 0 SF 10,356 SF 1.2%—1.8% $2.61—-$3.29 3 Yrs 0.0% 0.1% 0.6% 26.1% 2018-2019 120,000 SF 319,322 SF 1.4%—0.9% $3.60—-$3.92 | 2Yrs 0.6% 1.7% -0.5% 8.9% 2020-2024 349,039 SF 336,883 SF 1.8%—1.7% $3.18—-$5.25 5Yrs 1.8% 1.7% -0.1% 65.1% The three year period from 2015 to 2017 was highlighted with stable supply, slight positive absorption, moderate increase of vacancy rates and considerable increase of asking rent in the submarket. The next two year period from 2018 to 2019 featured slightly increased supply, positive absorption, moderate decrease of vacancy rates and considerable increase of asking rent levels. The most recent five year period from 2020 to 2024 featured slightly increased supply, slight positive absorption, moderate decrease of vacancy rates and considerable increase of asking rent levels. Over the past ten years the submarket had a compound annual growth rate (CAGR) of 0.2% per year. Vacancy has ranged from 0.9% to 4.1% with an average of 1.9%. Vacancy increased from 1.2% in 2015 to 1.8% in 2017, decreased from 1.4% in 2018 to 0.9% in 2019 and decreased from 1.8% in 2020 to 1.7% in 2024. BATTLE CREEK / W. CALHOUN COUNTY VACANCY & SUPPLY 5% 19,500,000 4% 3 19,400,000 4% 19,300,000 > 19,200,000 oh 19,100,000 o% 19,000,000 1% 18,900,000 1% | | I ] | | | 18,800,000 0% 18,700,000 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 SUPPLY VACANCY ©CoStar Over the past ten years asking rent has experienced a CAGR of 7.2%. Asking rent hit a low of $2.61/SF in 2015 and a high in 2024 at $5.25/SF. ASKING RENT
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MARKET ANALYSIS CONTINUED GRR250041 CONSTRUCTION/ABSORPTION & VACANCY 1,000,000 500,000 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 NEW CONSTRUCTION NET ABSORPTION ©CoStar The following table summarizes the trailing four quarter performance of the Battle Creek / W. Calhoun County submarket. BATTLE CREEK / W. CALHOUN COUNTY TRAILING FOUR QUARTER PERFORMANCE PERIOD SUPPLY NEW CONSTRUCTION NET ABSORPTION VACANCY ASKING RENT 2024 Q2 19,458,244 SF 0 SF (34,415) SF 22% $5.13/SF 2024 Q3 19,458,244 SF 0 SF 157,178 SF 1.4% $5.53/SF 2024 Q4 19,458,244 SF 0 SF 64,167 SF 1.1% $5.31/SF 2025Q1 19,710,244 SF 252,000 SF (29,462) SF 2.5% $6.21/SF Source: Costar® As of Q1 2025 the Battle Creek / W. Calhoun County submarket has a total Industrial inventory of 19,710,244 SF with 488,209 SF vacant indicating a current vacancy rate of 2.5%. There was 252,000 SF completed last quarter, whereas there was 252,000 SF added in the last year. Over the past four quarters the Battle Creek / W. Calhoun County industrial submarket has experienced an increase of supply. There was also positive net absorption, increase in vacancy rates and increase of asking rent in the marketplace. BATTLE CREEK /W.CALHOUN COUNTY VACANCY & ASKING RENTAL RATE (LAST FOUR QUARTERS) $6.00 $5.00 $4.00 $3.00 $2.00 $1.00 $0.00 2024Q2 2024Q3 2024 Q4 2025Q1 ASKING RENT VACANCY ©CoStar Key supply/demand statistics for the most recent quarter, last year and historical averages are summarized below.
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MARKET ANALYSIS CONTINUED GRR250041 Vacancy The Q1 2025 vacancy rate (2.5%) is slightly higher than last year (1.7%) and slightly higher than the average vacancy over the past ten years (1.9%). The historic vacancy trend indicates strong long-term demand for industrial space in the Battle Creek / W. Calhoun County submarket. The most recent vacancy trends demonstrate slightly inferior market conditions in comparison to the historic trend and suggest continued stability moving forward. Supply The inventory grew by 1.3% during Q1 2025, nor were there any new deliveries in the last year. BATTLE CREEK / W. CALHOUN COUNTY INDUSTRIAL CONSTRUCTION ACTIVITY SUMMARY STATUS NO. OF PROJECTS SIZE (SF) % OF SUPPLY Under Construction 1 2,500,000 11.3% Source: Costar® Absorption During Q1 2025 net absorption was -0.1% and net absorption was 0.7% over the last year. The Battle Creek / W. Calhoun County industrial market has established an overall trend of stable absorption (0.3%) over the past ten years. The historic absorption trend indicates stable long-term demand for industrial space in the Battle Creek / W. Calhoun County submarket. The most recent absorption trends demonstrate inferior market conditions in comparison to the historic trend and suggest continued stability moving forward. Battle Creek / W. Calhoun County Submarket Conclusion Based on the preceding analysis, the Battle Creek / W. Calhoun County Industrial submarket demonstrates sound fundamentals. Analysis of supply and demand factors indicate the market is currently stable with no evidence to prove this will change any time soon. The greatest strength of the submarket appears to be its low vacancy rates. There are no observed weaknesses of the submarket that stand out. TRANSACTION TRENDS Sales Volume The volume of sale transactions for similar assets has been steady over the past six months within the marketplace. This assertion is supported by the comparable sales that were selected for the Sales Comparison Approach. These sales are somewhat recent transactions, which provides support for the reported market sales activity. Sales volume is directly impacted by the activity levels of sellers and buyers of this property type. Seller Activity Based on research completed on various listing sources including CoStar and LoopNet, properties similar to the subject in terms of pricing and overall investment appeal have general availability, with numerous listings offered within the marketplace.FALSE Most Probable Buyer Profile/Activity
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MARKET ANALYSIS CONTINUED GRR250041 conditions are in equilibrium in regard to negotiating sale terms. One of the greatest observed strengths of this asset type is the particularly sound fundamentals compared to other commercial real estate sectors. SUBJECT PROPERTY ANALYSIS This market analysis has examined historical and current supply/demand trends for the subject property type on market and submarket levels. Next, transaction trends were researched and analyzed. The final step will be to draw conclusions from the market data and analyses based on their perceived influence on the subject property. The subject is a former recreational center that has most recently been utilized for light industrial / service use by way of leasing the two primary improvements. The property has a total net rentable area of 5,840 SF, which does not include the various sheds and canopy.. The market generally classifies the subject as owner-user property, but it could be leased. The most notable physical strength of the subject is its appealing construction quality of the two light industrial buildings. Tenant Appeal Conclusion Based on my analysis of the subject property and investigation of comparable properties in the marketplace, the subject is considered to have average overall tenant appeal if it were leased. Buyer Appeal Conclusion Based on my analysis of the subject property and investigation of substitute properties in the marketplace, the subject is considered to have average overall buyer appeal with an average competitive position if the asset was exposed to the open market. General Vacancy Conclusion As summarized in the table below this market analysis relied on various published data sources and field research for assessing how supply/demand conditions influence the long-term vacancy estimate of the subject property. CoStar 2025 Q1 LAST YR 10 YRAVG West Michigan Market 3.0% 2.4% 2.5% Battle Creek / West Calhoun County Sul 2.5% 1.7% 1.9% Subject 0.0% - - GENERAL VACANCY RATE CONCLUSIONS 4.0% Based on the subject's size, location and appeal, the submarket analysis findings warrant primary consideration. The 1st quarter 2025 submarket level analysis indicated a CoStar vacancy rate of 2.5%, 1.7% in 2024 and an average vacancy rate of 1.9% over the past ten years. The market level analysis indicated a CoStar vacancy rate of 3.0% in the 1¢t quarter of 2025, 2.4% in 2024, and an average vacancy rate of 2.5% over the past ten years. Based on my analysis of supply/demand trends and considering the subject's potential for multi-tenant, a general vacancy rate of 4.0% is concluded for both valuation dates. EXPOSURE TIME & MARKETING PERIOD
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MARKET ANALYSIS CONTINUED GRR250041 The following information was taken into consideration to develop estimates of exposure time and marketing period for the subject property: EXPOSURE TIME & MARKETING PERIOD SOURCE QUARTER RANGE AVG LASTQ LASTYR PriceWaterhouse Coopers National Warehouse 4Q24 0 to 12 4 4 4 East North Central (ENC) Region Warehouse ~~ 4Q 24 2 to 6 4 4 4 Comparable Sales Dataset 1 to 18 7 AVERAGE 1 to 12 5 4 4 The availability of acquisition financing factors into exposure time. In recent quarters, financing has been available for well-positioned commercial real estate, particularly for stabilized assets within core MSAs and owner/user deals. For second tier or marginal properties, financing has been available but subject to more stringent requirements. Based on review of the local capital market, we conclude that adequate financing options would have been available to consummate a sale of the property on the date of value. Exposure Time Conclusion The preceding information generally supports an exposure time range from 1 to 12 months for relatively similar industrial properties. The subject property is of average quality and is in average condition. Based on its overall physical and locational characteristics, the subject has average overall appeal to partial owner/users and/or owner/users. Considering these factors, a reasonable estimate of exposure time for the subject property is 12 months or less. Marketing Period Conclusion Marketing period is very similar to exposure time, but reflects a projected time period to sell the property, rather than a retrospective estimate. We have reviewed open listings and discussed the market with local participants, and given the nature of the subject property, we feel that a time period of 12 months or less is supported for the subject's marketing period.
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HIGHEST & BEST USE ANALYSIS GRR250041 INTRODUCTION The highest and best use of an improved property is defined as that reasonable and most probable use that will support its highest present value. The highest and best use, or most probable use, must be legally permissible, physically possible, financially feasible, and maximally productive. This section develops the highest and best use of the subject property As-Vacant and As-Improved. AS-VACANT ANALYSIS Legal Factors The legal factors that possibly influence the highest and best use of the subject site are discussed in this section. Private restrictions, zoning, building codes, historic district controls, and environmental regulations are considered, if applicable to the subject site. Permitted uses of the subject's LI (Light Industrial) zoning were listed in the Zoning Analysis section and include commercial development. The potential use that meets the requirements of the legal permissibility test is industrial development. Physical & Locational Factors Regarding physical characteristics, the subject site is irregular in shape and has sloping topography with average access and fair/average exposure. The subject is surrounded by commercial development and vacant land. Given the subject's location and surrounding uses, the subject site is desirable for industrial development. Of the outright permitted uses, physical and locational features best support development of an industrial property as market conditions warrant for the site’s highest and best use as-vacant. Feasibility Factors The financial feasibility of those uses that meet the legal and physical tests discussed is analyzed further in this section. Supply and demand conditions affect the financial feasibility of possible uses. Indicators of feasibility, which typically indicate favorable or non-favorable supply and demand conditions, include construction financing and proposed projects. There has been a lack of new commercial construction throughout the subject's area. This is evidence that new commercial construction is not feasible at this time. Financial feasibility factors generally support a three to five-year hold prior to development. As-Vacant Conclusion Based on the previous discussion, the subject's highest and best use as-vacant is concluded to be development of an industrial property as market conditions warrant. AS-IMPROVED ANALYSIS Legal Factors The subject property, as-improved, is an industrial other industrial project that is zoned LI (Light Industrial). The subject's improvements represent a legal, conforming use. The legal factors influencing the highest and best use of the property support the subject's use as-improved and in use for service use / industrial use. Physical & Locational Factors
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HIGHEST & BEST USE ANALYSIS CONTINUED GRR250041 Alternative Uses & Feasibility Factors In addition to legal and physical considerations, analysis of the subject property as-improved requires the treatment of two important issues: 1) consideration of alternative uses for the property; and 2) the marketability of the most probable use. The five possible alternative treatments of the property are demolition, expansion, renovation, conversion, and the subject's use as-improved. » Demolition The subject improvements contribute significant value above the current land value. Therefore, demolition is not applicable in this case. > Expansion The subject property comprises approximately 38.26 acres (1,666,587 SF), although | have estimated that only 10-acres is suitable for use / development. [| have estimated that the two industrial buildings require about 3.25-acres to operate, while the remaining 6.75-acres are considered surplus land (balance is unusable for a myriad of reasons noted previously. Therefore, expansion of the subject is an option, however, not considered a viable option at the current time (except for a build to suit scenario. » Renovation The subject property is approximately 38 years old and is in average condition. Renovating the subject is an option. However, the feasibility of said renovation would depend on the scope of work and the associated costs. Based on the scope of work agreed upon for this assignment, we have valued the subject in its as-is condition. » Conversion Conversion is neither appropriate nor applicable to this property. » Continued Use “As-Is” The final option is the continued use of the property "As-Is." This is legal, physically possible, financially feasible, and maximally productive. Therefore, continued use as an industrial / service use property is considered appropriate. Among the five alternative uses, the subject's use as-improved is supported to be its Highest and Best Use. Marketability Factors In general supply/demand conditions and immediate market area trends support viable short and long-term operations of the subject's use as-improved. Based on my analysis of the subject property and investigation of comparable properties in the marketplace, the subject is considered to have average overall tenant appeal if it were leased. Based on my analysis of the subject property and investigation of substitute properties in the marketplace, the subject is considered to have average overall buyer appeal with an average competitive position if the asset was exposed to the open market. As-Improved Conclusion Based on the previous discussion, the highest and best use of the subject property as-improved is concluded to be continued use as an industrial / service use property.
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VALUATION METHODS GRR250041 INTRODUCTION The following presentation of the appraisal process deals directly with the valuation of the subject property. The following paragraphs describe the standard approaches to value that were considered for this analysis. INCOME APPROACH The Income Approach is based on the premise that properties are purchased for their income producing potential. It considers both the annual return on the invested principal and the return of the invested principal. This valuation technique entails careful consideration of contract rents currently in place, projected market rents, other income sources, vacancy allowances, and projected expenses associated with the efficient operation and management of the property. The relationship of these income estimates to property value, either as a single stream or a series of projected streams, is the essence of the income approach. The two fundamental methods of this valuation technique include Discounted Cash Flow and Direct Capitalization. » Discounted Cash Flow (DCF) The DCF analysis models a property's performance over a buyer's investment horizon from the date of acquisition through the projected sale of the property at the end of the holding period. Net cash flows from property operations and the reversion are discounted at a rate reflective of the property’s economic and physical risk profile. > Direct Capitalization This method analyzes the relationship of one year’s stabilized net operating income to total property value. The stabilized net operating income is capitalized at a rate that implicitly considers expected growth in cash flow and growth in property value over a buyer’s investment horizon. The implied value may be adjusted to account for non-stabilized conditions or required capital expenditures to reflect an as is value. Characteristics specific to the subject property warrant that this valuation technique is developed. Development of the Income Approach is a specific scope requirement of this assignment. The subject is an investment property; therefore, the Income Approach represents the decision making process of knowledgeable buyers and sellers of this property type. The Direct Capitalization method is used in this analysis. Discounted Cash Flow analysis does not contribute substantially to estimating value beyond the direct capitalization method and is not used in this analysis. SALES COMPARISON APPROACH The Sales Comparison Approach is based on the principle of substitution, which asserts that no one would pay more for a property than the value of similar properties in the market. This approach analyzes comparable sales by applying transactional and property adjustments in order to bracket the subject property on an appropriate unit value comparison. The sales comparison approach is applicable when sufficient data on recent market transactions is available. Alternatively, this approach may offer limited reliability because many properties have unique characteristics that cannot be accounted for in the adjustment process.
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VALUATION METHODS CONTINUED GRR250041 LAND VALUATION Development land in the subject marketplace is most often valued utilizing the Sales Comparison Approach. Characteristics specific to the subject property warrant that a site value is developed. Development of the subject site value is a specific scope requirement of this assignment. The subject site has surplus land that is not separately marketable from the economic site that requires valuation. Within the Site Valuation section, only the subject's surplus land is valued. COST APPROACH The Cost Approach is a set of procedures through which a value indication is derived for the fee simple estate by estimating the current cost to construct a reproduction of (or replacement for) the existing structure, including an entrepreneurial incentive or profit; deducting depreciation from the total cost; and adding the estimated land value. Adjustments may then be made to the indicated value of the fee simple estate in the subject property to reflect the value of the property interest being appraised. For investment properties, this valuation technique is most often relied upon as a test of financial feasibility for proposed construction. Characteristics specific to the subject property do not warrant that this valuation technique is developed. Development of the Cost Approach is not a specific scope requirement of this assignment. The Cost Approach has limited applicability due to the age of the improvements and lack of market based data to support an estimate of accrued depreciation. Based on the preceding information, the Cost Approach will not be presented. RECONCILIATION OF VALUE CONCLUSIONS The Income (Direct Capitalization) and Sales Comparison approaches are used to value the subject property. The surplus land value will be developed separately and added to the Income and Sales Comparison approach value indicators. After which, the as-is market value, inclusive of the contributory value of the surplus land, will be reconciled into the final opinion of market value in the Analysis of Value Conclusions section.
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INCOME APPROACH GRR250041 INTRODUCTION The Income Approach is based on the premise that properties are purchased for their income producing potential. It considers both the annual return on the invested principal and the return of the invested principal. This valuation technique entails careful consideration of contract rents currently in place, projected market rents, other income sources, vacancy allowances, and projected expenses associated with the efficient operation and management of the property. The relationship of these income estimates to property value, either as a single stream or a series of projected streams, is the essence of the income approach. As previously discussed within the Valuation Methods section, the Direct Capitalization method is used in this analysis, and Discounted Cash Flow analysis is not developed. Direct Capitalization This method analyzes the relationship of one year’s stabilized net operating income to total property value. The stabilized net operating income is capitalized at a rate that implicitly considers expected growth in cash flow and growth in property value over a buyer's investment horizon. The first step in the direct capitalization method is to estimate the subject's durable rental income through reconciliation of the subject's in-place lease terms and market rent analysis. Next, | analyze other income items including reimbursements and miscellaneous revenue. Then, vacancy allowance and operating expenses are estimated based on analysis of the subject and market indicators. Finally, the resulting net operating income is capitalized at an appropriate supported rate. The implied value may be adjusted to account for non-stabilized conditions or required capital expenditures to reflect an as is value. Given the appraisal problem and defined scope of work, the following table summarizes the value scenarios and Income Approach methods developed within this appraisal report: INCOME APPROACH VALUE SCENARIOS VALUE METHODS USED SCENARIO DCF DIRECT CAP Retrospective Value (December 31, 2023) Vv Retrospective Value (December 31, 2024) Vv Income Approach Framework The following identifies the primary sections and order in which the Income Approach is developed. e Subject Lease Analysis e Market Rent Analysis e Contract Income Risk Analysis e Income & Expense Analysis o Capitalization Rate Analysis e Direct Capitalization e Adjustments to Value
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INCOME APPROACH CONTINUED GRR250041 | have assumed Modified Gross terms, where the tenant pays suite utilities, interior maintenance and janitorial in addition to rent, and the owner pays for real estate taxes, property insurance, repairs and maintenance, in addition to management and administration expenses. Adjustment Process Quantitative adjustments are made to the comparable leases. The following adjustments or general market trends were considered for the basis of market rent analysis. Transactional Adjustments If warranted, the comparable leases were adjusted for varying lease structures, atypical concessions and market conditions. The adjustment for rent concession equivalency quantifies the differences between market standard free rent and tenant improvement allowances compared to those of the lease transaction, which were divided by the comparable’s lease term, and applied to the beginning “face” rent of the comparable lease. The market conditions adjustment is explained at the end of this section. Concession Adjustment The differences between free rent and tenant improvements (+/-) is divided by the comparable’s lease term, and applied to the beginning base rent of the comparable lease. This methodology does not take into account amortization of rental increases over the lease term. The rent concession adjustment calculation is outlined below: CONCESSION ADJUSTMENT SUMMARY FREE RENT ADJUSTMENT Tl ADJUSTMENT Comparable Free Rent Comparable TI Less: Market Standard Less: Market Standard Equals: Free Rent Adjustment Equals: TI Adjustment Divided by Comparable Monthly Lease Term Divided by Comparable Lease Term Times: Beginning Base Rent Equals: Adjustment Equals: Adjustment Property Adjustments Quantitative percentage adjustments were made for location and physical characteristics such as size, age, condition, exposure and parking ratio. Where possible the adjustments applied are based on paired data or other statistical analysis. It should be stressed that the adjustments are subjective in nature and are meant to illustrate my logic in deriving a value opinion for the subject site. Tenant Space Adjustments The lease comparables were further adjusted to the subject to account for tenant space specific characteristics such as size and space functionality. Transactional market conditions adjustment was based on a review of historical sale data, market participant interviews and review of current versus historical pricing. Based on my research, the following table summarizes the market conditions adjustment applied in this analysis.
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INCOME APPROACH CONTINUED GRR250041 ANALYSIS OF COMPARABLE WAREHOUSE LEASES The Warehouse lease analysis is used to derive an opinion of market rent and correlating leasing assumptions for the Warehouse MLA category. The following table includes a summary of the comparables selected for this analysis, including relevant listings and actual leases at competing properties. Following the table is an adjustment grid, analysis and my conclusion. Datasheets containing more details of the comparables are presented later in this section. WAREHO LEASE SUMMATION TABL [COMPARABLE | [suBscT EE [LEase2. |] EE [Leases | Leases. | EvPRRE LL peer Tu Recreational iene Building RETR Building EXT Building MET ve Building peers Si Center Manufacturing Address 2000 East Columbia Ave. 927 Industrial 904 Hotop Avenue ~~ 692 South 8th Street 1338 Branch Street 2015 Schippers Ln Parkw ay City Battle Creek Plainw ell Kalamazoo Kalamazoo Kalamazoo Kalamazoo Sate Mi Mi Mi Mi Mm Mi 49014 49080 49048 49009 49001 49048 Property Type Industrial Industrial Industrial Industrial Industrial Industrial NRA 5,840 14,700 20,075 15,600 36,300 17.440 Occupancy 100.0% 100.0% 42.0% 100.0% 20.0% 100.0% Location Average Average/Good Average Average/Good Average Average Quality Average Average Average Average/Good Average Average Condition Average Average/Good Fair/Average Average/Good Average Average Exposure Fair/Average Average Average Average Average Average Access Average Average Average Average Average Average Year Built 1987 1991 1970 2001 1988 1920 Clear Height 12-13" 13 Feet 35 Feet 17-26 Feet 18 Feet 12 Feet Tenant Name Industrial Tenant Pro Turf Move Up Jetech Inc Commencement Date 12/10/2023 9/26/2023 9/24/2023 oe 17/2023 5/7/2023 Lease Type New New New New New Lease Status Signed Signed Signed Signed Signed Rate Type MG MG NNN MG NNN Size (SF) 4,100 8,900 15,600 8,800 17,440 % Office 22.0% 15.0% 12.8% 15.1% 13.4% Rent ($/SF/Yr.) $8.00 $4.95 $5.75 $6.50 $4.00 Avg. Escalation/Yr - - - - 2.0%
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INCOME APPROACH CONTINUED GRR250041 WAREHOUSE LEASE ADJUSTMENT TABLE COMPARABLE SUBJECT LEASE 1 LEASE2 LEASE 3 LEASE4 LEASES Name Former Recreational Industrial Building Industrial Building Industrial Building Industrial Building Industrial Center . Manufacturing Address 2000 East Columbia 927 Industrial 904 Hotop Avenue ~~ 692 South 8th Street 1338 Branch Street 2015 Schippers Ln Ave. Parkw ay City Battle Creek Painw ell Kalamazoo Kalamazoo Kalamazoo Kalamazoo NRA 5,840 14,700 20,075 15,600 36,300 17,440 Year Built 1987 1991 1970 2001 1988 1920 Tenant Name Industrial Tenant Pro Turf Move Up NA Jetech Inc Commencement Date 12/10/2023 9/26/2023 9/24/2023 8/17/2023 5/7/2023 Lease Type New New New New New Lease Status Signed Signed Signed Signed Signed Rate Type MG MG NNN MG NNN Size (SF) 4,100 8,900 15,600 8,800 17,440 Rent ($/SF/Yr.) $8.00 $4.95 $5.75 $6.50 $4.00 Avg. Escalation/Yr = - = - 2.0% Lease Type $0.00 $0.00 $3.00 $0.00 $3.00 Concessions $0.00 $0.00 $0.00 $0.00 $0.00 Market Conditions’ 0% 1% 1% 1% 1% Subtotal Eff Rent $8.01 $4.98 $8.80 $6.55 $7.09 Location Average Average/Good Average Average/Good Average Average Adjustment -10% 0% -10% 0% 0% Size (Property) 5,840 14,700 20,075 15,600 36,300 17,440 Adjustment 0% 0% 0% 0% 0% Quality Average Average Average Average/Good Average Average Adjustment 0% 0% -10% 0% 0% Condition Average Average/Good Fair/Average Average/Good Average Average Adjustment -10% 10% -10% 0% 0% Exposure Fair/Average Average Average Average Average Average Adjustment 0% 0% 0% 0% 0% Access Average Average Average Average Average Average Adjustment 0% 0% 0% 0% 0% Age 1987 1991 1970 2001 1988 1920 Adjustment 0% 0% 0% 0% 0% Clear Height 12-13" 13 Feet 35 Feet 17-26 Feet 18 Feet 12 Feet Adjustment 0% -10% -5% -3% 0% Subtotal Property Adj -20% 0% -35% -3% 0% Size (Tenant) 5,840 4,100 8,900 15,600 8,800 17,440 Adjustment 0% 0% 5% 0% 5% Subtotal Tenant Adj 0% 0% 5% 0% 5% TOTAL ADJUSTED RENT $6.41 $4.98 $6.16 $6.38 $7.45 STATISTICS UNADJUSTED ADJUSTED MARKET CONCESSIONS! Low $4.00 $4.98 Lease Type Modified Gross HIGH $8.00 $7.45 MEDIAN $5.75 $6.38
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INCOME APPROACH CONTINUED GRR250041 Warehouse Lease Analysis The comparables indicate an adjusted lease rate range from $4.98 to $7.45/SF, with a median of $6.38/SF and an average of $6.27/SF. The range of total gross adjustment applied to the comparables was from 3% to 41%, with an average gross adjustment across all comparables of 18%. The level of total adjustment applied to the comparables is considered to be moderate. Overall, the availability of market data and extent of analysis was adequate to develop a reasonably credible lease rate conclusion. The adjustment process for each comparable is discussed in the following paragraphs. Discussion of Adjustments Comparable 1 ($6.41/SF adjusted) required a total upward transaction adjustment of $0.01. This comparable required a total downward adjustment of -20% for property characteristics. The total gross adjustment applied to this comparable was 20%. The moderate level of gross adjustments required for this comparable indicates that it can be adequately relied upon for valuation of the subject. This comparable is given primary consideration as a value indicator for the subject. Comparable 2 ($4.98/SF adjusted) required a total upward transaction adjustment of $0.03. This comparable required adjustments for property characteristics, however these resulted in a net adjustment of 0%. The total gross adjustment applied to this comparable was 21%. The moderate level of gross adjustments required for this comparable indicates that it can be adequately relied upon for valuation of the subject. This comparable is given secondary consideration as a value indicator for the subject. Comparable 3 ($6.16/SF adjusted) required a total upward transaction adjustment of $3.05. This comparable required a total downward adjustment of -30% for property characteristics. The total gross adjustment applied to this comparable was 41%. The substantial level of gross adjustments required for this comparable was justified due to the comparable's varying attributes. Considering these factors, this comparable is given secondary consideration as a value indicator for the subject. Comparable 4 ($6.38/SF adjusted) required a total upward transaction adjustment of $0.05. This comparable required a total downward adjustment of -3% for property characteristics. The total gross adjustment applied to this comparable was 3%. The minimal amount of gross adjustments required for this comparable suggests it is similar to the subject, increasing its applicability for this analysis. Overall this comparable warrants primary consideration as a value indicator for the subject. Comparable 5 ($7.45/SF adjusted) required a total upward transaction adjustment of $3.09. This comparable required a total upward adjustment of 5% for property characteristics. The total gross adjustment applied to this comparable was 6%. The minimal amount of gross adjustments required for this comparable suggests it is similar to the subject, increasing its applicability for this analysis. Overall this comparable warrants secondary consideration as a value indicator for the subject.
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INCOME APPROACH CONTINUED GRR250041 WAREHOUSE SPACE MARKET RENT CONCLUSION — DECEMBER 31, 2023 The comparables indicate an adjusted lease rate range from $4.98 to $7.45/SF, with a median of $6.38/SF and an average of $6.27/SF. Based on the results of the preceding analysis, Comparable 1 ($6.41/SF adjusted) and Comparable 4 ($6.38/SF adjusted) are given primary consideration for the lease rate conclusion. The following table summarizes the analysis of the comparable leases and the Warehouse market rent conclusion. WAREHOUSE LEASE CONCLUSION TABLE LEASE ADJUSTMENT NET GROSS OVERALL LEASE RATE TRANSACTIONAL' ADJUSTED PROPERTY? FINAL ADJ % ADJ % COMPARISON 1 $8.00 $0.01 $8.01 -20% $6.41 -20% 20% PRIMARY 2 $4.95 $0.03 $4.98 0% $4.98 1% 21% SECONDARY 3 $5.75 $3.05 $8.80 -30% $6.16 7% 41% SECONDARY 4 $6.50 $0.05 $6.55 -3% $6.38 2% 3% PRIMARY 5 $4.00 $3.09 $7.09 5% $7.45 86% 6% SECONDARY Low $4.98 AVERAGE $6.27 HIGH $7.45 MEDIAN $6.38 ACHIEVABLE MRKT RANGE CONCLUSION Warehouse $4.98 - $7.45 $6.50 "Cumulative ?Additive (Includes Tenant Adjustments) Comparable Rent Data Sheets The following pages present the rent comparable data sheets that were used in the prior analysis.
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INCOME APPROACH CONTINUED GRR250041 COMPARABLE 1 PHYSICAL INFORMATION Name Industrial Building Address 927 Industrial Parkw ay City, State, Zip Code Plainw ell, M,, 49080 MSA Kalamazoo-Portage, Ml Net Rentable Area (NRA) 14,700 Year Built 1991 Occupancy 100.0% Site Size 70,131 SF Site Coverage 21% Parking Spaces 10 Parking Ratio 0.70 Clear Height 13 Feet % Office 18.4% Grade Doors 5 Dock Doors 3 Name Jodi Milks Cross Docked No Source Leasing Broker Date / Phone Number 01/04/2024 Confidential REMARKS This comparable represents a multi-tenant industrial building located in the City of Fainw ell. The building has municipal utilities, central air, and 3 phase, 480V pow er. Suite Cw as marketed for lease at $8.00 PSF, MG, for 3 months before a lease w as signed in December 2023. Suite C has 2 overhead doors. The tenant pays utilities, trash, janitorial, phone and data. TENANT NAME RATE TYPE SIZE START DATE TERM LEASERATE ADJ LEASERATE Industrial Tenant MG 4,100 12/10/2023 24 $8.00 $6.41
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INCOME APPROACH CONTINUED GRR250041 COMPARABLE 2 PHYSICAL INFORMATION Name Industrial Building Address 904 Hotop Avenue City, State, Zip Code Kalamazoo, Mi, 49048 Net Rentable Area (NRA) 20,075 Year Built 1970 Occupancy 42.0% Site Size 101,930 SF Site Coverage 20% Construction Steel Clear Height 35 Feet % Office 14.1% ! 2 Grade Doors 2 4 2 Cross Docked No INDUSTRIAL BUILDING Name Jeff Chrystal Source Leasing Broker Date / Phone Number 01/16/2024 +1 269-207-5431 REMARKS This subject property is an industrial building w ith 20,075 square feet of net rentable area. Built in 1970, there are 2 grade level doors and 0 dock doors, a 35 feet clearance, and sits on 2.34 acres. The space w as leased on September 26, 2023 at the rate of $4.35 MG per year to Pro Turf. The lease termw as not disclosed. TENANT NAME RATE TYPE SIZE START DATE TERM LEASERATE ADJ LEASE RATE Pro Turf MG 8,900 09/26/2023 $4.95 $4.98
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INCOME APPROACH CONTINUED GRR250041 COMPARABLE 3 PHYSICAL INFORMATION Name Industrial Building ZI 4 Address 692 South 8th Street 5 City, State, Zip Code Kalamazoo, M, 49009 MSA Kalamazoo-Fortage, M Net Rentable Area (NRA) 15,600 Year Built 2001 Occupancy 100.0% Site Size 381,585 SF Site Coverage 4% Construction Metal/Masonry Parking Spaces 33 == : 2 Parking Ratio 2.10 - - = = Building Class S INDUSTRIAL BUILDING EY % Office 12.8% Name David Keyte Grade Doors 2 Source Leasing Broker Dock Doors 1 Date / Phone Number 02/09/2024 +1269 373 8104 Cross Docked No REMARKS This comparable represents an industrial building located in Oshtemo Tow nship. This freestanding building sits on a parcel of land containing 2 other industrial buildings. The building is accessed via a shared drive, and is not visible from any main roadw ays. The space w as marketed for lease at $5.75 PSF, NNN, for a 3 year term, for one month before the tenant signed a lease at full asking price. TENANT NAME RATE TYPE SIZE START DATE TERM LEASERATE ADJ LEASE RATE Move Up NNN 15,600 09/24/2023 36 $5.75 $6.16
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INCOME APPROACH CONTINUED GRR250041 COMPARABLE 4 PHYSICAL INFORMATION Name Industrial Building Address 1338 Branch Street City, State, Zip Code Kalamazoo, Mi, 49001 Net Rentable Area (NRA) 36,300 Year Built 1988 Occupancy 20.0% Site Size 103,237 SF Site Coverage 35% Construction Masonry Clear Height 18 Feet Grade Doors 8 Dock Doors 0 Cross Docks to Name Confidential Source CoStar Date / Phone Number 05/21/2025 Confidential This subject property is an industrial building w ith 8,800 square feet of net rentable area. Built in 1988, there are 8 grade level doors and 0 dock doors, a 18 feet clearance, and sits on 2.37 acres. The space w as leased on August 17, 2023 at the rate of $6.50 MG per year. The lease term and tenant's name w as not disclosed. TENANT NAME RATE TYPE SIZE START DATE TERM LEASERATE ADJ LEASE RATE NA MG 8,800 08/17/2023 $6.50 $6.38
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INCOME APPROACH CONTINUED GRR250041 COMPARABLE 5 PHYSICAL INFORMATION Name Industrial Manufacturing Address 2015 Schippers Ln City, State, Zip Code Kalamazoo, Mi, 49048 MSA Kalamazoo-Portage, Mi Net Rentable Area (NRA) 17,440 Year Built 1920 Year Renovated 1970 Occupancy 100.0% Site Size 95,832 SF Site Coverage 18% Construction Masonry Parking Spaces 30 Lh Parking Ratio 1.70 INDUSTRIAL MANUFACTURIN! Clear Height 12 Feet Name Trent Wieringa % Office 13.4% Source Leasing Broker Grade Doors 1 Date / Phone Number 01/16/2024 +1616 481 3868 eo ors ) Cross Docked No The property located at 2015 Schippers Lane is a standalone industrial building on 2.25 acres. The property is located just East of Dow ntow n Kalamazoo and has nearby access to I-94 and US-131 highw ays. The industrial portion of the building features access to 3 docks, 1 drive-in door and 1,200 amps of 480v/3-phase pow er. Public records did not have a year built, so it has been estimated to partially been constructed in the early 1900's and expanded in the 1970's. An initial term of five-years w as estimated by the appraiser. TENANT NAME RATETYPE SIZE START DATE TERM LEASERATE ADJ LEASERATE Jetech Inc NNN 17,440 05/07/2023 60 $4.00 $7.45 POTENTIAL GROSS RENT My analysis and conclusions of the subject's potential gross rent are detailed as follows: POTENTIAL GROSS RENT SF Leased 5,360 Market Rent $6.50 Expense Structure Modified Gross Contract or Market Market
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INCOME APPROACH CONTINUED GRR250041 OTHER INCOME In the following section, | analyzed and made conclusions for the other income items of the subject property. The individual income items were then segregated into Expense Reimbursements and Miscellaneous Income for further analysis. Expense Reimbursements Based on my analysis of the subject lease and historical operations, there are no expense reimbursements present. The base lease payments are inclusive of all operating expenses except those noted previously paid or completed directly by the tenant. Additional Revenue Based on my analysis of the subject's historical operations, there are no additional revenue generators present. VACANCY AND CREDIT LOSS General vacancy was discussed in depth in the market analysis section of this report. Please reference that discussion for a full analysis. Regarding credit loss, non-sophisticated investors often lump this allocation within the general vacancy loss factor when using direct capitalization. Whereas, sophisticated investors generally apply credit loss in a range from none to 2% depending on the quality of tenant mix and current economic conditions. My general vacancy and credit loss conclusions are summarized in the following table and are intended to mirror behavior of typical purchasers of the subject. VACANCY & CREDIT LOSS General Vacancy Rate 4.0% Credit Loss Conclusion 1.0% Total 5.0% ANALYSIS OF OPERATING EXPENSES The following chart summarizes comparable expenses. EXPENSE COMPARABLES EE CO. CZ City Westland Westland Madison Heights State Mi Mi Mi Ml - - - Expense Year 2024 2023 2024 2024 2023 2024 2024 Actual/Budget Actual Proforma Proforma Proforma - - - Net Rentable Area 12,041 20,000 31,503 13,500 12,041 31,503 19,261 Year Built 2000 1986 1983 1959 1959 2000 1982 EFFECTIVE GROSS INCOME $23.51 $8.43 $9.50 $17.29 $8.43 $23.51 $14.68 EXPENSE ITEMS $ISF %EGI $/SF %EGI $/SF %EGI $ISF %EGI Low HIGH AVG Real Estate Taxes $2.04 87% $1.44 17.1% $1.08 11.4% $0.96 5.6% $0.96 $2.04 $1.38 Property Insurance $0.15 0.6% $0.18 21% $0.23 2.4% $0.67 3.9% $0.15 $0.67 $0.31
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NCOME APPROACH CONTINUED GRR250041 CONCLUSION OF OPERATING EXPENSES In the following section | discuss the individual expense conclusions for the subject property. EXPENSE ANALYSIS & CONCLUSIONS ANALYSIS SUBJECT EXPENSECOMPS A discussion of the subject's real estate tax burden was included YEAR TOTAL $/SF %EGI COMP $/SF %EGI in an earlier section of this report. Ordinarily, property taxes would 1 $2.04 8.7% be calculated and deducted from the operating expenses of the 2 $1.44 17.1% Property. In this instance, how ever, the appropriate tax amount is 3 $1.08 11.4% not known since itis the purpose of this report to determine w hat 4 $096 56% the appropriate value on which taxes are to be based. In such cases, the valuation applies a tax loaded capitalization rate. This is achieved by adding the tax rate to the capitalization rates and the result is the rate applied in this approach. This will be show n later CONCLUSION - - - AVG $1.38 10.7% in this section. PROPERTY INSURANCE ANALYSIS SUBJECT EXPENSECOMPS This expense includes all premiums and costs incurred for YEAR TOTAL $ISF %EGI COMP $/SF %EGI insurance covering structures, public liability, rental value, 1 $0.15 0.6% equipment and bonding of employees. The conclusion is based on 2 $0.18 2.1% the expense comparable information. 3 $0.23 24% 4 $067 3.9% CONCLUSION $1,460 $0.25 4.0% AVG $0.31 23% COMMON AREA MAINTENANCE ANALYSIS SUBJECT EXPENSECOMPS This consists of all expenses related to the common area YEAR TOTAL $/SF %EGI COMP $/SF %EGI maintenance of the subject including the costs of payroll, employee 1 $5.60 24.2% benefits, service contracts, and maintenance materials and 2 $1.44 17.0% supplies purchased for the subject. The conclusion is based on the 3 $0.04 04% expense comparable information. 4 $0.74 4.3% CONCLUSION $5,840 $1.00 16.2% AVG $1.98 11.5% MANAGEMENT FEES ANALYSIS SUBJECT EXPENSE COMPS This expense reflects the professional management service for the YEAR “TOTAL $ISF %EGI COMP $/SF %EGI subject. The conclusion is based on the expense comparable 1 $1.33 5.7% information. 2 $0.28 3.3% 3 $030 3.1% 4 $0.87 5.1% CONCLUSION $1,442 $0.25 4.0% AVG $0.69 4.3% ADMINISTRATIVE FEES ANALYSIS SUBJECT EXPENSECOMPS This expense covers all expenses related to the management of YEAR "TOTAL $ISF %EGI COMP $/SF %EGI the subject, including staff, office supplies, office equipment rental 1 $0.38 1.6% expenses, management fees, and professional services. The 2 $0.08 1.0% conclusion is based on the expense comparable information. 3 $0.00 0.0% 4 $0.00 0.0% CONCLUSION $584 $0.10 16% AVG $0.12 0.7%
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INCOME APPROACH CONTINUED GRR250041 Reserves Although the owner is also responsible for capital expenses, deductions have only been made to arrive at an NOI before capital expenses. To ensure consistency in the analysis, the direct capitalization analysis will be based on market-extracted capitalization rates that have similarly been based on NOIs before capital expenses. DEVELOPMENT OF CAPITALIZATION RATE The going-in capitalization rate, also known as overall rate (OAR), can be determined using several sources and methods. In developing my opinion of OAR, the following techniques were used: » Comparable Sales (Sales Comparison Approach) > Supplemental Comparable Sales (Competitive Market) > Investor Surveys > Band of Investment Technique Comparable Sales The primary sales utilized in this analysis are either fee simple sales or the income / expense information is unknown, so no OAR’s were extracted from these comparables. Therefore, | have included additional sales (Comparables AC1 thru AC21) to support capitalization rate trends for the subject property. CAPITALIZATION RATE COMPARABLES (O AC1 Ferguson Supply Muskegon Heights M January 11,2024 1987 8,250 $47 $3.91 8.38% AC2 Industrial Warehouse Lansing Mi June 30, 2023 1967 24,000 $81 $6.51 8.01% AC3 Multi-Tenant Flex/Office Troy Ml May 22, 2023 1983 29,518 $75 $6.06 8.13% AC4 Single-Tenant Industrial Taylor Mi April 4,2023 1967 21,575 $39 $3.55 9.00% AC5 United Safety Grand Rapids Ml November 4,2022 1990 22292 $103 $8.77 8.50% AC6 Single-Tenant Industrial Troy Ml October 12,2022 1970 13,975 $89 $7.68 8.58% AC7 Light Industrial Commerce Charter Tow nship Ml August 29,2022 1985 8,448 $95 $8.14 8.59% AC8 Single-Tenant Industrial Taylor Ml April 14, 2022 1990 14,868 $64 $5.25 8.23% ACY Industrial Flex Building Ann Arbor Mi April 13, 2022 1994 19,600 $125 $11.54 9.26% AC10 Single-Tenant Industrial Gaylord Ml December 27,2024 1980 10,800 $81 $6.58 8.13% AC11 Light Industrial Property Kentw ood Ml December 20, 2024 1986 30,000 $117 $9.06 7.72% AC12 Industrial Manufacturing Grand Rapids Ml December 20,2024 1984 30,033 $69 $5.49 7.94% AC13 Single-Tenant Industrial Troy Ml September 9,2024 1980 9,500 $89 $7.37 8.23% AC14 Single-Tenant Industrial (Flex) Ann Arbor [Y] July 24, 2024 1991 37,266 $140 $10.85 7.77% AC15 Show room & Warehouse Kentw ood Ml June 13, 2024 1988 28,061 $72 $5.31 7.36% AC16 Single-Tenant Industrial Troy Mi May 28, 2024 1968 13,595 $121 $9.76 8.09% AC17 Single-Tenant Industrial Troy Mi May 9, 2024 1966 10,400 $142 $11.30 7.97% AC18 Single-Tenant Industrial Washington Mi May 2, 2024 1982 40,000 $71 $5.32 7.51% AC19 Single-Tenant Industrial Novi Mi May 1, 2024 2000 12,041 $168 $1322 7.86% AC20 Single-Tenant Industrial Troy Ml April 1, 2024 1969 18,052 $83 $5.85 7.01% AC21 Ferguson Supply Muskegon Heights M January 11,2024 1987 8,250 $47 $3.91 8.38% Low April 13, 2022 7.01%
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INCOME APPROACH CONTINUED GRR250041 Investor Surveys The potential investor pool for the subject asset includes national, regional and local investors. While all of these groups place emphasis on local cap rates, regional and national investors would also strongly consider national cap rate trends from investor surveys due to the potential to invest in other regions that are offering competitive rates of return. The following graph provides a historical illustration of capitalization rate statistics as surveyed by investors that | considered to be relevant to the subject property. CAPITALIZATIONRATE (OAR) 10.50% 9.50% 8.50% 7.50% 6.50% 5.50% 4.50% 3.50% ©PriceWaterhouse Coopers, ©Realty Rates.com, ©Real Capital Analy tics .50% 4Q15 4Q16 4Q17 4Q18 4Q19 4Q20 4Q21 4Q22 4Q23 4Q24 == PWC National Warehouse = PWC East North Central (ENC) Region Warehouse = RR Industrial RR Warehouse/Distribution = RCA Single Tenant ~~ RCA Tertiary Midwest The following table provides the most recent survey results from investors and My independent market participant interview. CAPITALIZATION RATE SURVEYS (OAR) SOURCE QUARTER RANGE AVG LASTQ LASTYR PriceWaterhouse Coopers National Warehouse 4Q24 4.00% to 7.50% 5.27% 5.55% 5.23% East North Central (ENC) Region Warehouse ~~ 4Q 24 475% to 5.75% 5.19% 5.06% 5.06% RealtyRates.com Industrial 4Q24 581% to 13.14% 9.47% 9.25% 9.56% Warehouse/Distribution 4Q24 5.81% to 11.50% 8.52% 8.29% 8.61% Real Capital Analytics Single Tenant Industrial 4Q24 6.46% 6.37% 6.24% Tertiary Midw est Industrial 4Q24 8.48% 7.74% 6.94% AVERAGE 5.09% to 9.47% 7.23% 7.04% 6.94% The PWC indicators provide the lower end of the range, but these surveys are based on properties in larger markets with higher appreciation, so a rate above the averages provided by these surveys seems reasonable.
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INCOME APPROACH CONTINUED GRR250041 Lenders also require that the principal amount of the loan be repaid through amortization payments. Similarly, equity investors must anticipate receiving a competitive equity cash return commensurate with the perceived risk or they will invest their funds elsewhere. To analyze the capitalization rate from a financial position, the Band of Investment Technique is used. Available financing information indicates the following terms: BAND OF INVESTMENT ASSUMPTIONS Loan Amortization Period 30 Years Interest Rate 7.00% Loan-to-Value (LTV) Ratio 70% Mortgage Constant 7.98% Equity dividend rates vary depending upon motivations of buyers and financing terms. The previous terms and an appropriate equity dividend rate are used in the Band of Investments calculations, which are presented on the following chart. BAND OF INVESTMENT CALCULATION Mortgage Component 70% X 7.98% 5.589% Equity Component 30% x 12.00% = 3.600% Indicated Capitalization Rate TT 0189% INDICATED CAPITALIZATION RATE 9.19% Capitalization Rate Conclusion — December 31, 2023 Valuation Taking all factors into consideration, the following table summarizes the various capitalization rate indicators and provides the final capitalization rate conclusion. CAPITALIZATION RATE CONCLUSION (OAR) SOURCE QUARTER RANGE AVG LASTQ LASTYR Supplemental Comparable Sales 7.01% to 9.26% 8.13% E - Investor Surveys 4Q24 509% to 9.47% 7.23% 7.04% 6.94% Band of Investment Technique 9.19% - - AVERAGE 6.05% to 9.37% 8.18% 7.04% 6.94% CAPITALIZATION CONCLUSION (FEE SIMPLE) 9.00% The upper end of the range of the sales were given greatest consideration in this analysis and supported by the RealtyRates.com survey. As a result, an OAR of 9.00% is supported and concluded in this analysis, prior to loading the capitalization rate for the real estate tax burden. Tax Loaded Capitalization Rate Ordinarily, property taxes would be calculated and deducted from the operating expenses of the property. In this instance, however, the appropriate tax amount is not known since it is the purpose of this report to determine what the appropriate value on which taxes are to be based. In such cases, the valuation applies a tax loaded capitalization rate. This is achieved by adding the tax rate to the capitalization rate. The following calculation
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INCOME APPROACH CONTINUED DIRECT CAPITALIZATION CONCLUSION —- DECEMBER 31, 2023 GRR250041 This method analyzes the relationship of one year’s stabilized net operating income to total property value. The stabilized net operating income is capitalized at a rate that implicitly considers expected growth in cash flow and growth in property value over a buyer's investment horizon. The implied value may be adjusted to account for non-stabilized conditions or required capital expenditures to reflect an as is value. The pro-forma reflecting the subject's stabilized operations is presented in the following table. DIRECT CAPITALIZATION SUMMATION TABLE - AS OF DECEMBER 31, 2023 INCOMEITEMS %PGI YEG] $/SF(MO.) $/SF(YR.) TOTAL Base Contract Income $0.54 $6.50 $37,960 TOTAL RENTAL INCOME $0.54 $6.50 $37,960 POTENTIAL GROSS INCOME (PGI) 100.0% 105.3% $0.54 $6.50 $37,960 VACANCY & CREDIT LOSS General Vacancy (4.0%) ($0.02) ($0.26) ($1,518) Credit & Collection Loss (1.0%) (80.01) ($0.07) ($380) TOTAL VACANCY & CREDIT LOSS (5.0%) ($0.03) ($0.33) ($1,898) EFFECTIVE GROSS INCOME (EG) 95.0% 100.0% $0.51 $6.18 $36,062 EXPENSE ITEMS Real Estate Taxes - - - - - Property Insurance (3.8%) (4.0%) ($0.02) ($0.25) ($1,460) Common Area Maintenance (15.4%) (16.2%) ($0.08) ($1.00) ($5,840) Management Fees (3.8%) (4.0%) (30.02) ($0.25) ($1,442) Administrative Fees (1.5%) (1.6%) ($0.01) ($0.10) ($584) TOTAL EXPENSES (24.6%) (25.9%) ($0.13) ($1.60) ($9,326) NET OPERATING INCOME (NOI) 70.4% 741% $0.38 $4.58 $26,736 Capitalization Rate 11.91% Capitalized Value $224,548 INDICATED VALUE $38/SF $220,000 CONTRIBUTORY VALUE OF THE SURPLUS LAND 158.1% 166.4% $0.86 $10.27 $60,000 RETROSPECTIVE VALUE AS-IS (12/31/2023) $48/SF $280,000 ADJUSTMENTS TO VALUE Rounded to nearest $10,000 To reflect conditions in effect at the subject property as the date of value, adjustments to the capitalized value were necessary for the contributory value of the surplus land which is not intrinsically considered in the income approach. Contributory Value of the Surplus Land As will be shown in the land valuation portion of this appraisal, the contributory value of the surplus land is concluded to be $60,000 as of 12/31/2023. Due to a lack of new development in the submarket, no change in
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INCOME APPROACH CONTINUED GRR250041 INCOME APPROACH - RETROSPECTIVE VALUE — AS-IS (DECEMBER 31, 2024 The income approach essentially mirrors the December 31, 2023 approach with the following adjustments: o Market rent is calculated for the 2" valuation date (December 31, 2024) e Market vacancy and collection loss remains at 4.0% and 1.0% respectfully; e Expenses were inflated from the 12/31/2023 conclusions; and, e The OAR for 12/31/2024 is reviewed for any potential changes. ANALYSIS OF COMPARABLE 2024 WAREHOUSE RENT LEASES The 2024 Warehouse Rent lease analysis is used to derive an opinion of market rent and correlating leasing assumptions for the 2024 Warehouse Rent MLA category. The following table includes a summary of the comparables selected for this analysis, including relevant listings and actual leases at competing properties. Following the table is an adjustment grid, analysis and my conclusion. Datasheets containing more details of the comparables are presented later in this section. 2024 WAREHO! ENT LEASE SUMMATION TABLE [COMPARABLE | EEE [EASE | [LEasEz |] [ceases] CE EST EET e Former pre EXER peer as Building EET Building [eee Building Eero Building Center Address 2000 East Columbia 400 Business centre 927 Industrial 904 Hotop Avenue 692 South 8th Street 1338 Branch Street Ave, Drive Parkw ay City Battle Creek Lansing Plainw ell Kalamazoo Kalamazoo Kalamazoo mM Ml Mi Mi Mi Mi 49014 48917 49080 49048 49009 49001 Property Type Industrial Industrial Industrial Industrial Industrial Industrial NRA 5,840 6,096 14,700 20,075 15,600 36,300 Occupancy 100.0% 100.0% 100.0% 42.0% 100.0% 20.0% Location Average Average/Good Average/Good Average Average/Good Average Quality Average Average Average Average Average/Good Average Condition Average Good Average/Good Fair/Average Average/Good Average Exposure Fair/Average Average Average Average Average Average Access Average Average Average Average Average Average Year Built 1987 1993 1991 1970 2001 1988 Clear Height 12-13" 12 Feet 13 Feet 35 Feet 17-26 Feet 18 Feet Tenant Name Flex Tenant Industrial Tenant Pro Turf Move Up Commencement Date 2/1/2024 12/10/2023 9/26/2023 9/24/2023 ot 7/2023 Lease Type New New New New New Lease Status Signed Signed Signed Signed Signed Rate Type MG MG MG NNN MG Size (SF) 2,000 4,100 8,900 15,600 8,800 % Office 10.0% 22.0% 15.0% 12.8% 15.1% Term (Yrs) 5.0 2.0 - 3.0 - Rent ($/SF/Yr.) $11.00 $8.00 $4.95 $5.75 $6.50
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GRR250041
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COMPARABLE KEY
COMP
DISTANCE
ADDRESS
LEASEDATE
SF
$ISF
SUBJECT
-
2000 East Colunbia Ave., Battle Creek, Mi
-
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No. 1
40.7 Miles
400 Business centre Drive, Lansing, MI
2/1/2024
2,000
$11.00
No. 2
26.4 Miles
927 Industrial Parkw ay, Plainw ell, MI
12/10/2023
4,100
$8.00Page 86
INCOME APPROACH CONTINUED GRR250041 E ADJUSTMENT TABLE N HS s > x m = (@] m A m 4 = | m > Name Former Recreational Flex Industrial Building Industrial Building Industrial Building Industrial Building Center Address 2000 East Columbia 400 Business 927 Industrial 904 Hotop Avenue 692 South 8th Street 1338 Branch Street Ave. centre Drive Parkw ay City Battle Creek Lansing Plainw ell Kalamazoo Kalamazoo Kalamazoo NRA 5,840 6,096 14,700 20,075 15,600 36,300 Year Built 1987 1993 1991 1970 2001 1988 Tenant Name Flex Tenant Industrial Tenant Pro Turf Move Up NA Commencement Date 2/1/2024 12/10/2023 9/26/2023 9/24/2023 8/17/2023 Lease Type New New New New New Lease Status Signed Signed Signed Signed Signed Rate Type MG MG MG NNN MG Size (SF) 2,000 4,100 8,900 15,600 8,800 Rent ($/SF/Yr.) $11.00 $8.00 $4.95 $5.75 $6.50 Lease Type $0.00 $0.00 $0.00 $3.00 $0.00 Concessions $0.00 $0.00 $0.00 $0.00 $0.00 Market Conditions’ 2% 2% 3% 3% 3% Subtotal Eff Rent $11.20 $8.17 $5.08 $8.97 $6.68 Location Average Average/Good Average/Good Average Average/Good Average Adjustment -10% -10% 0% -10% 0% Size (Property) 5,840 6,096 14,700 20,075 15,600 36,300 Adjustment 0% 0% 0% 0% 0% Quality Average Average Average Average Average/Good Average Adjustment 0% 0% 0% -10% 0% Condition Average Good Average/Good Fair/Average Average/Good Average Adjustment -20% -10% 10% -10% 0% Exposure Fair/Average Average Average Average Average Average Adjustment 0% 0% 0% 0% 0% Access Average Average Average Average Average Average Adjustment 0% 0% 0% 0% 0% Age 1987 1993 1991 1970 2001 1988 Adjustment 0% 0% 0% 0% 0% Clear Height 12-13" 12 Feet 13 Feet 35 Feet 17-26 Feet 18 Feet Adjustment 0% 0% -10% -5% -3% Subtotal Property Adj -30% -20% 0% -35% -3% Size (Tenant) 5,840 2,000 4,100 8,900 15,600 8,800 Adjustment -5% 0% 0% 5% 0% Subtotal Tenant Adj -5% 0% 0% 5% 0% TOTAL ADJUSTED RENT $7.28 $6.54 $5.08 $6.28 $6.51 STATISTICS UNADJUSTED ADJUSTED MARKET CONCESSIONS! Low $4.95 $5.08 Lease Type Modified Gross HIGH $11.00 $7.28 Free Rent
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INCOME APPROACH CONTINUED GRR250041 2024 Warehouse Rent Lease Analysis The comparables indicate an adjusted lease rate range from $5.08 to $7.28/SF, with a median of $6.51/SF and an average of $6.34/SF. The range of total gross adjustment applied to the comparables was from 5% to 43%, with an average gross adjustment across all comparables of 26%. The level of total adjustment applied to the comparables is considered to be moderate. Overall, the availability of market data and extent of analysis was adequate to develop a reasonably credible lease rate conclusion. The adjustment process for each comparable is discussed in the following paragraphs. Discussion of Adjustments Comparable 1 ($7.28/SF adjusted) required a total upward transaction adjustment of $0.20. This comparable required a total downward adjustment of -35% for property characteristics. The total gross adjustment applied to this comparable was 37%. The substantial level of gross adjustments required for this comparable was justified due to the comparable's varying attributes. Considering these factors, this comparable is given primary consideration as a value indicator for the subject. Comparable 2 ($6.54/SF adjusted) required a total upward transaction adjustment of $0.17. This comparable required a total downward adjustment of -20% for property characteristics. The total gross adjustment applied to this comparable was 22%. The moderate level of gross adjustments required for this comparable indicates that it can be adequately relied upon for valuation of the subject. This comparable is given primary consideration as a value indicator for the subject. Comparable 3 ($5.08/SF adjusted) required a total upward transaction adjustment of $0.13. This comparable required adjustments for property characteristics, however these resulted in a net adjustment of 0%. The total gross adjustment applied to this comparable was 23%. The moderate level of gross adjustments required for this comparable indicates that it can be adequately relied upon for valuation of the subject. This comparable is given secondary consideration as a value indicator for the subject. Comparable 4 ($6.28/SF adjusted) required a total upward transaction adjustment of $3.22. This comparable required a total downward adjustment of -30% for property characteristics. The total gross adjustment applied to this comparable was 43%. The substantial level of gross adjustments required for this comparable was justified due to the comparables varying attributes. Considering these factors, this comparable is given primary consideration as a value indicator for the subject. Comparable 5 (36.51/SF adjusted) required a total upward transaction adjustment of $0.18. This comparable required a total downward adjustment of -3% for property characteristics. The total gross adjustment applied to this comparable was 5%. The minimal amount of gross adjustments required for this comparable suggests it is similar to the subject, increasing its applicability for this analysis. Overall this comparable warrants primary consideration as a value indicator for the subject.
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INCOME APPROACH CONTINUED GRR250041 2024 WAREHOUSE RENT SPACE MARKET RENT CONCLUSION The comparables indicate an adjusted lease rate range from $5.08 to $7.28/SF, with a median of $6.51/SF and an average of $6.34/SF. Based on the results of the preceding analysis, Comparable 1 ($7.28/SF adjusted), Comparable 2 ($6.54/SF adjusted), Comparable 4 ($6.28/SF adjusted) and Comparable 5 ($6.51/SF adjusted) are given primary consideration for the lease rate conclusion. The following table summarizes the analysis of the comparable leases and the 2024 Warehouse Rent market rent conclusion. 2024 WAREHOUSE RENT LEASE CONCLUSION TABLE LEASE ADJUSTMENT NET GROSS OVERALL LEASE RATE TRANSACTIONAL' ADJUSTED PROPERTY? FINAL ADJ % ADJ % COMPARISON 1 $11.00 $0.20 $11.20 35% $7.28 -34% 37% PRIMARY 2 $8.00 $0.17 $8.17 20% $6.54 -18% 22% PRIMARY 3 $4.95 $0.13 $5.08 0% $5.08 3% 23% SECONDARY 4 $5.75 $3.22 $8.97 -30% $6.28 9% 43% PRIMARY 5 $6.50 $0.18 $6.68 -3% $6.51 0% 5% PRIMARY LOW $5.08 AVERAGE $6.34 HIGH $7.28 MEDIAN $6.51 ACHIEVABLE MRKT RANGE CONCLUSION 2024 Warehouse Rent $5.08 - $7.28 $6.75 "Cumulative *Additive (Includes Tenant Adjustments) Comparable Rent Data Sheets The following pages present the rent comparable data sheets that were used in the prior analysis.
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INCOME APPROACH CONTINUED GRR250041 COMPARABLE 1 PHYSICAL INFORMATION Name Flex Address 400 Business centre Drive City, State, Zip Code Lansing, MI, 48917 MSA Lansing-East Lansing, Ml Net Rentable Area (NRA) 6,096 Year Built 1993 Year Renovated 2019 Occupancy 100.0% Site Size 20,037 SF Site Coverage 30% Construction Block/Siding Building Class [o] Grade Doors 6 Name Matthew Wisniew ski Cross Docked No Source Leasing Broker Date / Phone Number 11/29/2024 +1517 321 2800 This is a small multi-tenant flex/office w ith six tenant spaces. This is a lease on modified gross (rent plus utilities) terms. TENANT NAME RATE TYPE SIZE START DATE TERM LEASE RATE ADJ LEASERATE Flex Tenant MG 2,000 02/01/2024 60 $11.00 $7.28
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INCOME APPROACH CONTINUED GRR250041 COMPARABLE 2 PHYSICAL INFORMATION Name Industrial Building Address 927 Industrial Parkw ay City, State, Zip Code Plainw ell, MI, 49080 MSA Kalamazoo-Portage, Mi Net Rentable Area (NRA) 14,700 Y ear Built 1991 Occupancy 100.0% Site Size 70,131 SF Site Coverage 21% Parking Spaces 10 Parking Ratio 0.70 Clear Height 13 Feet % Office 18.4% Grade Doors 5 CONFIRMATION Dock Doors 3 Name Jodi Milks Cross Docked No Source Leasing Broker Date / Phone Number 01/04/2024 Confidential REMARKS This comparable represents a multi-tenant industrial building located in the City of Fainw ell. The building has municipal utilities, central air, and 3 phase, 480V pow er. Suite Cw as marketed for lease at $8.00 PSF, MG, for 3 months before a lease w as signed in December 2023. Suite C has 2 overhead doors. The tenant pays utilities, trash, janitorial, phone and data. TENANT NAME RATE TYPE SIZE START DATE LEASE RATE ADJ LEASERATE Industrial Tenant MG 4,100 12/10/2023 24 $8.00 $6.54
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INCOME APPROACH CONTINUED COMPARABLE 3 Name Address City, State, Zip Code Net Rentable Area (NRA) Year Built Occupancy Site Size Site Coverage Construction Clear Height % Office Grade Doors Cross Docked TENANT NAME Pro Turf PHYSICAL INFORMATION 20,075 1970 42.0% 101,930 SF 20% Steel 35 Feet 14.1% 2 No RATE TYPE Industrial Building 904 Hotop Avenue Kalamazoo, M, 49048 GRR250041 INDUSTRIAL BUILDING CONFIRMATION Name Jeff Chrystal Source Leasing Broker Date / Phone Number 01/16/2024 +1 269-207-5431 REMARKS This subject property is an industrial building w ith 20,075 square feet of net rentable area. Built in 1970, there are 2 grade level doors and 0 dock doors, a 35 feet clearance, and sits on 2.34 acres. The space w as leased on September 26, 2023 at the rate of $4.35 MG per year to Pro Turf. The lease termw as not disclosed. START DATE TERM LEASERATE ADJ LEASERATE 09/26/2023 $4.95 $5.08
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INCOME APPROACH CONTINUED GRR250041 COMPARABLE 4 PHYSICAL INFORMATION Name Industrial Building Address 692 South 8th Street City, State, Zip Code Kalamazoo, MI, 49009 MSA Kalamazoo-Portage, M Net Rentable Area (NRA) 15,600 Year Built 2001 Occupancy 100.0% Site Size 381,585 SF Site Coverage 4% Construction Metal/Masonry Parking Spaces 33 Parking Ratio 2.10 . = Buiding Class s INDUSTRIAL BUILDING 3 % Office 12.8% Name David Keyte Grade Doors 2 Source Leasing Broker Dock Doors 1 Date / Phone Number 02/09/2024 +1269 373 8104 Cross Docked No REMARKS This comparable represents an industrial building located in Oshtemo Tow nship. This freestanding building sits on a parcel of land containing 2 other industrial buildings. The building is accessed via a shared drive, and is not visible from any main roadw ays. The space w as marketed for lease at $5.75 PSF, NNN, for a 3 year term, for one month before the tenant signed a lease at full asking price. TENANT NAME RATETYPE SIZE START DATE TERM LEASERATE ADJ LEASERATE Move Up NNN 15,600 09/24/2023 36 $5.75 $6.28
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INCOME APPROACH CONTINUED GRR250041 COMPARABLE 5 PHYSICAL INFORMATION Name Industrial Building Address 1338 Branch Street City, State, Zip Code Kalamazoo, MI, 49001 Net Rentable Area (NRA) 36,300 Year Built 1988 Occupancy 20.0% Site Size 103,237 SF Site Coverage 35% Construction Masonry Clear Height 18 Feet Grade Doors 8 Dock Doors 0 Cross Docked No INDUSTRIAL BUILDING CONFIRMATION Name Confidential Source CoStar Date / Phone Number 05/21/2025 Confidential This subject property is an industrial building w ith 8,800 square feet of net rentable area. Built in 1988, there are 8 grade level doors and 0 dock doors, a 18 feet clearance, and sits on 2.37 acres. The space w as leased on August 17, 2023 at the rate of $6.50 MG per year. The lease term and tenant's name w as not disclosed. TENANT NAME RATE TYPE SIZE START DATE TERM LEASERATE ADJ LEASERATE NA MG 8,800 08/17/2023 $6.50 $6.51 VACANCY & CREDIT LOSS VACANCY & CREDIT LOSS General Vacancy Rate 4.0% Credit Loss Conclusion 1.0% Total 5.0% CONCLUSION OF OPERATING EXPENSES Operating expenses are the similar to the previous conclusions with noted adjustments below: o Real estate taxes will be calculated using a loaded capitalization rate as previously; e Property insurance, common area maintenance have been escalated by 3.0%.over the 12/31/2023
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INCOME APPROACH CONTINUED GRR250041 DIRECT CAPITALIZATION CONCLUSION This method analyzes the relationship of one year’s stabilized net operating income to total property value. The stabilized net operating income is capitalized at a rate that implicitly considers expected growth in cash flow and growth in property value over a buyer's investment horizon. The implied value may be adjusted to account for non-stabilized conditions or required capital expenditures to reflect an as is value. The pro-forma reflecting the subject's stabilized operations is presented in the following table. DIRECT CAPITALIZATION SUMMATION TABLE - AS OF DECEMBER 31, 2024 MLA MARKET CONCLUDED SFINMLA $/SF TOTAL RENT $/YR Warehouse $6.75 Market 5,840 $6.75 $39,420 INCOME ITEMS %PGl %EGI $ISF TOTAL Base Contract Income $6.75 $39,420 TOTAL RENTAL INCOME $6.75 $39,420 POTENTIAL GROSS INCOME (PGI) 100.0% 105.3% $6.75 $39,420 VACANCY & CREDIT LOSS General Vacancy (4.0%) ($0.27) ($1,577) Credit & Collection Loss (1.0%) (80.07) ($394) TOTAL VACANCY & CREDIT LOSS (5.0%) ($0.34) (81,971) EFFECTIVE GROSS INCOME (EGI) 95.0% 100.0% $6.41 $37,449 EXPENSE ITEMS Real Estate Taxes - - - - Property Insurance (3.8%) (4.0%) ($0.26) ($1,504) Common Area Maintenance (15.3%) (16.1%) ($1.03) ($6,015) Management Fees (3.8%) (4.0%) ($0.26) ($1,498) Administrative Fees (1.5%) (1.6%) ($0.10) ($602) TOTAL EXPENSES (24.4%) (25.7%) ($1.65) (89,618) NET OPERATING INCOME (NOI) 70.6% 74.3% $4.77 $27,831 Capitalization Rate 11.91% Capitalized Value $233,744 INDICATED VALUE $39/SF $230,000 CONTRIBUTORY VALUE OF THE SURPLUS LAND $60,000 RETROSPECTIVE VALUE AS-IS (12/31/2024) $50/SF $290,000 Rounded to nearest $10,000 INCOME APPROACH CONCLUSION The following table summarizes the opinions of market value that were developed by the direct capitalization method of the income approach. RETROSPECTIVE RETROSPECTIVE VALUATION INDICES VALUE AS-IS VALUE AS-IS INTEREST APPRAISED FEE SIMPLE FEE SIMPLE DATE OF VALUE DECEMBER 31, 2023 DECEMBER 31, 2024
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SALES APPROACH INTRODUCTION GRR250041 The Sales Comparison Approach is based on the principle of substitution, which asserts that a buyer would not pay more for a property than the value of similar properties in the market. This approach analyzes comparable sales by applying transactional and property adjustments to bracket the subject property within an appropriate unit value comparison. UNIT OF COMPARISON The most relevant unit of comparison is the price per square foot of NRA. This indicator best reflects the analysis used by buyers and sellers in this market for improved properties with similar design and utility. SALES APPROACH VALUATION - 12/31/2023 COMPARABLE SELECTION | completed a thorough search for similar improved sales in terms of property type, location, physical characteristics, and date of sale. In selecting comparables, emphasis was placed on confirming recent improved sales of properties that match the highest and best use, and buyer/seller profile of the subject property. Overall, the sales selected represent the best comparables available for this analysis. ADJUSTMENT PROCESS Quantitative adjustments are made to the comparable sales. The following adjustments or general market trends were considered for the basis of valuation. Transactional Adjustments Dollar adjustments to the comparable sales were considered and made when warranted for transactional adjustments in the sequence shown below: Property Rights Transferred Financing Terms Conditions of Sale Expenditures After Purchase Market Conditions The valuation of the subject was completed on a fee simple basis. If warranted, leased fee, leasehold and/or partial interest sales were adjusted accordingly. The subject property was valued on a cash equivalent basis. Adjustments were made to the comparables involving financing terms atypical of the marketplace. This adjustment accounts for extraordinary motivation on the part of the buyer or seller often associated with distressed sales. Adjustments were applied if physical conditions warranted expenditures on the part of the buyer to bring the comparable up to functional standards. Most often this adjustment accounts for costs associated with deferred maintenance. Market conditions adjustments were based on a review of historical sale data, market participant interviews and review of current versus historical pricing. Based on my research, the following table summarizes the market conditions adjustment applied in this analysis.
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ES APPROACH CONTINUED GRR250041 Property Adjustments Quantitative percentage adjustments are also made for location and physical characteristics such as size, age, site and parking ratios, access, exposure, quality and condition, as well as other applicable elements of comparison. Where possible the adjustments applied are based on paired data or other statistical analysis. It should be stressed that the adjustments are subjective in nature and are meant to illustrate my logic in deriving a value opinion for the subject property. PRESENTATION The following Sales Summation Table, Location Map and datasheets summarize the improved sales data. Following these items, the comparable sales are adjusted for applicable elements of comparison and the opinion of value by the Sales Comparison Approach is concluded. IMPROVED SALES SUMMATION TABLE COMPARABLE SUBJECT COMPARABLE 1 COMPARABLE 2 COMPARABLE 3 [covpaRABLES | 4 [covPARABLES | RABLES Name Former Recreational Light Industrial Former Cannabis Light Industrial [prmraneat Industrial [poset Industrial Center Property Dispensary Property Property Property Address 2000 East Columbia 12248 East Michigan 1193 East Michigan ~~ 2600 West Dickman 2257 West Columbia 2205 West Dickman Ave. Avenue Avenue Road Avenue Road City Battle Creek Battle Creek Battle Creek Springfield Battle Creek Springfield State Mi mM Mi Mi Mi Mi Zip 49014 49014 49014 49037 49015 49037 County Calhoun Calhoun Calhoun Calhoun Calhoun Calhoun Property Type Industrial Industrial Industrial Industrial Industrial Industrial NRA (SF) 5,840 7,348 5,488 10,875 7,302 5,694 Land Area (AC) 33 26 04 07 40 04 L:B Ratio 224 16.5 3.2 27 23.9 27 Location Average Average Average Average Average Average Quality Average Average Average/Good Average Average Average Condition Average Fair/Average Good Fair Good Average/Good Exposure Fair/Average Average Average Average Average Average Access Average Average Average Average Average Average Year Built 1987 1950 1950 1960 195 1960 3/31/2021 10/18/2023 6/27/2023 8/5/2022 7/6/2022 status Recorded Recorded Recorded Recorded Recorded Marketing Period 14 Mos. 4 Mos. 3 Mos. 1 Mos. 18 Mos. Rights Transferred Fee Simple Fee Simple Fee Simple Fee Simple Fee Simple Transaction Price $250,000 $299,900 $300,000 $360,000 $248,600 Analysis Price $250,000 $299,900 $300,000 $360,000 $248,600 $/SF NRA $34 $55 $28 $49 $44
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SALES APPROACH GRR250041 CONTINUED SALES LOCATION MAP A f level § iL ~Rark-Oak:Rark | ¥ Ceresco! | | | | [ | Westil-eroy— 8 / (7 PR ee le i Map data ©2025 COMPARABLE KEY comp DISTANCE v SALEDATE OAR SUBJECT Battle Creek, MI Miles I , Battle Creek, MI 3/31/2021
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SA APPROACH CONTINUED GRR250041 COMPARABLE 1 Light Industrial Property Address 12248 East Michigan Avenue City, State, Zip Code Battle Creek, MI, 49014 County Calhoun MSA Battle Creek, MI SALE INFORMATION 53-192-012-00 Buyer Al Vanzandt Seller Ray Leonard Trust Transaction Date 03/31/2021 Transaction Status Recorded Transaction Price $250,000 Analysis Price $250,000 Recording Number 4526/0621 NN ] Rights Transferred Fee Simple Financing Seller Conditions of Sale Arms-Length Marketing Time 14 Months Leasable Area (NRA) 7,348 Number of Buildings 2 Year Built 1950 % of Office Build-out 3% . Clear Height 12-14 Feet Go Map data ©2025 Imagery ©2025 Maxar Technologies Grade Doors 5 Price per SF $34 Dock Doors 0 Adjusted Price per SF $41 Quality Average Capitalization Rate Site Size 2.6 Acres (114,127 SF) Name Ryan Leonard Zoning | Company EXP Realty Access Average Source Seller's Broker Exposure Average Date / Phone Number 05/20/2025 +1269 420 7608 Site Coverage 6% REMARKS 2-building industrial property constructed circa 1950. The broker reported there was a small office / restroom area, estimated to be about 200 SF. About half of the space lacked heat. The property was listed in excess of 14-months and sold at full list price.
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SALES APPROACH CONTINUED GRR250041 COMPARABLE 2 LOCATION INFORMATION Name Former Cannabis Dispensary Address 1193 East Michigan Avenue City, State, Zip Code Battle Creek, MI, 49014 County Calhoun MSA Battle Creek, MI APN 10-290-025-00 SALE INFORMATION Buyer Waterbury 1193, LLC Seller 1193 Michigan, LLC Transaction Date 10/18/2023 Transaction Status Recorded ; Z oe fe; " Transaction Price $299,900 ee ARERR : SH Analysis Price $209,900 Recording Number 4786/0115 - "8 — Rie Rights Transferred Fee Simple Financing Conventional Conditions of Sale Arms-Length Marketing Time 4 Months PHYSICAL INFORMATION Leasable Area (NRA) 5,488 Number of Buildings i Year Built 1950 Parking Spaces / Ratio 25 (4.6/1,000 SF NRA) nn [1d % of Office Build-out 61% N 70 Map data ©2025 Imagery ©2025 Maxar Te Clear Height 10 Feet ANALYSIS INFORMATION Grade Doors 2 Price per SF $55 Dock Doors 0 Adjusted Price per SF $40 Quality Average/Good Capitalization Rate Condition Good CONFIRMATION Building Structure Wood Name Dustin Damon Site Size 0.4 Acres (17,685 SF) Company RE/MAX Perrett Zoning Local Commercial Source Seller's Broker Access Average Date / Phone Number 05/20/2025 +1269 317 0988 Site Coverage 31% Industrial property w hich was renovated for cannabis dispensary use in 2020, but ultimately closed and repurposed for use by a contractor. The property was listed for $450,000 in 2023, later reduced and sold for $299,900 after about a 4- month marketing period.
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LES APPROACH CONTINUED GRR250041 COMPARABLE 3 [LOCATIONINFORMATION | INFORMATION EE — Light Industrial Property Address 2600 West Dickman Road City, State, Zip Code County MSA APN SALEINFORMATION Next Generation Law n Care, LLC A&G Construction, LLC Buyer Seller Transaction Date Transaction Status Transaction Price Analysis Price Recording Number Rights Transferred Financing Conditions of Sale Marketing Time PHYSICAL INFORMATION Leasable Area (NRA) Number of Buildings Year Built Parking Spaces / Ratio % of Office Build-out Clear Height Class Grade Doors Dock Doors Quality Condition Building Structure Site Size Zoning Access Exposure Site Coverage Springfield, MI, 49037 Calhoun Battle Creek, MI 54-100-024-00 06/27/2023 Recorded $300,000 $300,000 4758/0063 Fee Simple Cash at Settlement Arms-Length 3 Months 10,875 1 1960 8 (0.7/1,000 SF NRA) 26% 10-12 Feet Ss 3 1 Average Fair Metal 0.7 Acres (29,707 SF) Ho Average Average 37% LIGHT INDUSTRIAL PROPERTY NV) 47 mong di B dget Drain P too Shop ANALYSIS INFORMATION Price per SF $28 Adjusted Price per SF $36 Capitalization Rate CONFIRMATION Name Rahjah Stahlhood Company Coldw ell Banker Morehart Realty Source Seller's Broker Date / Phone Number 05/20/2025 +1269 986 3780 REMARKS Light industrial property constructed in stages from 1960 to 1995 with renovations in 1991 and 2006. The property was listed for $339,000, was on the market for about 3-months and sold for $300,000.
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SALES APPROACH CONTINUED COMPARABLE 4 LOCATION INFORMATION Name Address City, State, Zip Code County MSA APN SALE INFORMATION | Buyer Seller Transaction Date Transaction Status Transaction Price Analysis Price Recording Number Rights Transferred Financing Conditions of Sale Marketing Time PHYSICAL INFORMATION Leasable Area (NRA) Number of Buildings Year Built % of Office Build-out Clear Height Class Grade Doors Dock Doors Quality Condition Building Structure Site Size Zoning Access Exposure Site Coverage GRR250041 Light Industrial Property 2257 West Columbia Avenue Battle Creek, Ml, 49015 Calhoun Battle Creek, MI 52-0066-00-540-0 Jeremy Harris Ted E Goff Trust 08/5/2022 Recorded $360,000 $360,000 4686/0502 Fee Simple All Cash Arms-Length 1 Months 7,302 1 195 39% : \ m 10-14 Feet Go Mapp data ©2025 Imagery ©2025 Maxar Technologies s 3 Price per SF $49 0 Adjusted Price per SF $41 Average Capitalization Rate od Frame/Siding : Name Al Morehart 4.0 Acres (174,706 SF) Company Coldw ell Banker Morehart Realty B-1 Source Seller's Broker Average Date / Phone Number 05/20/2025 +1269 441 8184 Average REMARKS 4% Former residential property converted to commercial use with additions of garages and metal buildings. The property was listed for $385k and sold for $360k per public records after a 1-month marketing period.
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CONTINUED COMPARABLE 5 Address City, State, Zip Code County MSA SALE INFORMATION Buyer Seller Transaction Date Transaction Status Transaction Price Analysis Price Rights Transferred Financing Conditions of Sale Marketing Time PHYSICAL INFORMATION Leasable Area (NRA) Number of Buildings Year Built Parking Spaces / Ratio % of Office Build-out Clear Height Grade Doors Dock Doors Quality Condition Building Structure Site Size Zoning Access Exposure Site Coverage SALES APPROACH GRR250041 f Light Industrial Property 2205 West Dickman Road Springfield, Mi, 49037 Calhoun Battle Creek, Ml 54-060-008-01 Revolve States, LLC Mangw n Properties, Inc. 07/6/2022 Recorded $248,600 $248,600 Fee Simple Conventional Arms-Length 18 Months 5,604 1 1960 10 (1.8/1,000 SF NRA) 32% 12 Feet € p 2 1 Price per SF Average Adjusted Price per SF wo Average/Good Capitalization Rate 0.4 Acres (15,507 SF) 1 Average Average 37% Confidential Soman Scott Harrington - Harrington Real Estate Source Seller's Broker Date / Phone Number 05/20/2025 Confidential REMARKS Light industrial property constructed circa 1960 and later nicely renovated. The property was listed for $349,900, noting that an adjacent property w as for sale too, but could be purchased singularly. The list price was later reduced to $299,900 and sold for $248,600 after an 18-month marketing period.
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m (2) CONTINUED GRR250041 IMPROVED SALES MENT TABLE COMPARABLE 1 COMPARABLE? COMPARABLE 3 COMPARABLE4 COMPARABLE 5 Name Former Recreational Light Industrial Property Former Cannabis Light Industrial Property Light Industrial Property Light Industrial Property Center Dispensary Address 2000 East Columbia 12248 East Michigan ~~ 1193 East Michigan 2600 West Dickman 2257 West Columbia ~~ 2205 West Dickman Ave. Avenue Avenue Road Avenue Road City, State Battle Creek, MI Battle Creek, MI Battle Creek, MI Springfield, MI Battle Creek, MI Springfield, MI Zip 49014 49014 49014 49037 49015 49037 NRA (SF) 5,840 7,348 5,488 10,875 7,302 5,604 Land Area (AC) 33 26 0.4 0.7 4.0 0.4 Year Built 1987 1950 1950 1960 195 1960 Date 3/31/2021 10/18/2023 6/27/2023 8/5/2022 7016/2022 Status Recorded Recorded Recorded Recorded Recorded Rights Transferred Fee Simple Fee Simple Fee Simple Fee Simple Fee Simple Analysis Price $250,000 $299,900 $300,000 $360,000 $248,600 $/SF NRA $34 $55 $28 $49 $44 Property Rights 0% 0% 0% 0% 0% Financing 0% 0% 0% 0% 0% Conditions of Sale 0% 0% 0% 0% 0% Expenditures After the Sale 0% 0% 0% 0% 0% Market Conditions’ 8% 1% 2% 4% 4% Subtotal Transactional Adj Price $37 $55 $28 $51 $46 Location Average Average Average Average Average Average Adjustment 0% 0% 0% 0% 0% Size 5,840 7,348 5,488 10,875 7,302 5,694 Adjustment 0% 0% 5% 0% 0% Quality Average Average Average/Good Average Average Average Adjustment 0% -10% 0% 0% 0% Condition Average Fair/Average Good Fair Good Average/Good Adjustment 10% -20% 20% -20% -10% Exposure Fair/Average Average Average Average Average Average Adjustment 0% 0% 0% 0% 0% Access Average Average Average Average Average Average Adjustment 0% 0% 0% 0% 0% Age 1987 1950 1950 1960 195 1960 Adjustment 0% 0% 0% 0% 0% Clear Height 12-13" 12-14 Feet 10 Feet 10-12 Feet 10-14 Feet 12 Feet Adjustment 0% 0% 0% 0% 0% L:B Ratio 22.4 15.5 3.2 27 23.9 2.7 Adjustment 0% 3% 3% 0% 3% Subtotal Property Adjustment 10% -28% 28% -20% -8% TOTAL ADJUSTED PRICE $41 $40 $36 $41 $42 STATISTICS UNADJUSTED ADJUSTED Low $28 $36 HIGH $55 $42 MEDIAN $44 $41 AVERAGE $42 $40 * Market Conditions Adjustment: 3% Date of Value (for adjustment calculations): 12/31/23
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SALES APPROACH CONTINUED GRR250041 SALES COMPARABLE ANALYSIS Introduction The comparable sales indicate an adjusted value range from $36 to $42/SF, with a median of $41/SF and an average of $40/SF. The range of total gross adjustment applied to the comparables was from 17% to 33%, with an average gross adjustment across all comparables of 24%. The level of total adjustment applied to the comparables is considered to be moderate. Overall, the availability of market data and extent of analysis was adequate to develop the subject property's total value. The adjustment process for each comparable sale is discussed in the following paragraphs. Discussion of Adjustments Comparable 1 ($41/SF adjusted) required a total upward transaction adjustment of 8%. This comparable is adjusted upward for improving market conditions. This comparable required a total upward adjustment of 10% for property characteristics. This comparable was adjusted upward for its inferior condition. The total gross adjustment applied to this comparable was 18%. The moderate level of gross adjustments required for this comparable indicates that it can be adequately relied upon for valuation of the subject. This comparable is given primary consideration as a value indicator for the subject. Comparable 2 ($40/SF adjusted) required a total upward transaction adjustment of 1%. This comparable is adjusted upward for improving market conditions. This comparable required a total downward adjustment of -28% for property characteristics. This comparable was adjusted downward for its superior quality and condition, and upward for its inferior land-to-building ratio. The total gross adjustment applied to this comparable was 33%. The substantial level of gross adjustments required for this comparable was justified due to the comparable's varying attributes. Considering these factors, this comparable is given secondary consideration as a value indicator for the subject. Comparable 3 ($36/SF adjusted) required a total upward transaction adjustment of 2%. This comparable is adjusted upward for improving market conditions. This comparable required a total upward adjustment of 28% for property characteristics. This comparable was adjusted upward for its larger size and inferior condition and land-to-building ratio. The total gross adjustment applied to this comparable was 29%. The substantial level of gross adjustments required for this comparable was justified due to the comparable's varying attributes. Considering these factors, this comparable is given secondary consideration as a value indicator for the subject. Comparable 4 ($41/SF adjusted) required a total upward transaction adjustment of 4%. This comparable is adjusted upward for improving market conditions. This comparable required a total downward adjustment of -20% for property characteristics. This comparable was adjusted downward for its superior condition. The total gross adjustment applied to this comparable was 24%. The moderate level of gross adjustments required for this comparable indicates that it can be adequately relied upon for valuation of the subject. This comparable is given primary consideration as a value indicator for the subject. Comparable 5 ($42/SF adjusted) required a total upward transaction adjustment of 4%. This comparable is
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SALES APPROACH CONTINUED GRR250041 SALES COMPARISON APPROACH CONCLUSION The comparable sales indicate an adjusted value range from $36 to $42/SF, with a median of $41/SF and an average of $40/SF. Based on the results of the preceding analysis, Comparable 1 ($41/SF adjusted), Comparable 4 ($41/SF adjusted) and Comparable 5 ($42/SF adjusted) are given primary consideration for the subject’s opinion of value. The following table summarizes the analysis of the comparables, reports the reconciled price per NRA value conclusion, and presents the concluded value of the subject property. SALES COMPARISON APPROACH CONCLUSION (NRA) ANALYSIS ADJUSTMENT NET GROSS OVERALL COMP PRICE TRANSACTIONAL' ADJUSTED PROPERTY? FINAL ADJ % ADJ % COMPARISON 1 $34 8% $37 10% $41 19% 18% PRIMARY 2 $55 1% $55 -28% $40 -27% 33% SECONDARY 3 $28 2% $28 28% $36 29% 29% SECONDARY 4 $49 4% $51 -20% $41 17% 24% PRIMARY 5 $44 4% $46 -8% $42 3% 17% PRIMARY Low $36 AVERAGE $40 HIGH $42 MEDIAN $41 SUBJECT SF $/SF CONCLUSION VALUE INDICATED VALUE 5,840 x $41/SF = $240,000 CONTRIBUTORY VALUE OF THE SURPLUS LAND $60,000 RETROSPECTIVE VALUE AS-IS (12/31/2023) $51/SF $300,000 "Cumulative Additive Rounded to nearest $10,000 SALES COMPARISON APPROACH 12/31/2024 Due to the change in market conditions, a second sales comparison approach is applied for the 12/31/2024 valuation. ADJUSTMENT PROCESS Quantitative adjustments are made to the comparable sales. The following adjustments or general market trends were considered for the basis of valuation. Transactional Adjustments Dollar adjustments to the comparable sales were considered and made when warranted for transitional adjustments in the sequence shown below: Property Rights Transferred ~The valuation of the subject site was completed on a fee simple basis. If warranted, leased fee, leasehold and/or partial interest sales were adjusted accordingly.
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SALES APPROACH CONTINUED GRR250041 Market Conditions Market conditions adjustments were based on a review of historical sale data, market participant interviews and review of current versus historical pricing. on my research, the following table summarizes the market conditions adjustment applied in this analysis. MARKET CONDITIONS ADJUSTMENT Per Year As Of December 2024 (Retrospective) 3% The analysis applies an upward market conditions adjustment of 3% annually reflecting the conditions between the oldest comparable sale date up through the effective valuation date. Property Adjustments Quantitative percentage adjustments are also made for location and physical characteristics such as size, age, site and parking ratios, access, exposure, quality and condition, as well as other applicable elements of comparison. Where possible the adjustments applied are based on paired data or other statistical analysis. It should be stressed that the adjustments are subjective in nature and are meant to illustrate my logic in deriving a value opinion for the subject property. PRESENTATION The following Sales Summation Table, Location Map and datasheets summarize the improved sales data. Following these items, the comparable sales are adjusted for applicable elements of comparison and the opinion of value by the Sales Comparison Approach is concluded. i IMPROVED SALES SUMMATION TABLE SUBJECT COMPARABLE 1 COMPARABLE 2 COMPARABLE 3 COMPARABLES Name Former Recreational Light Industrial Property Former Cannabis Light Industrial Property Light Industrial Property Light Industrial Property Center Dispensary Address 2000 East Columbia 221 North 30th Street 1193 East Michigan 2600 West Dickman 2257 West Columbia ~~ 2205 West Dickman Ave. Avenue Road Avenue Road City Battle Creek Springfield Battle Creek Springfield Battle Creek Springfield State Mi M Mi Mi Mi Mi Zip 49014 49037 49014 49037 49015 49037 County Calhoun Calhoun Calhoun Calhoun Calhoun Calhoun Property Type Industrial Industrial Industrial Industrial Industrial Industrial NRA (SF) 5,840 5,120 5,488 10,875 7,302 5,694 Land Area (AC) 33 0.9 0.4 0.7 4.0 0.4 L:B Ratio 224 74 3.2 2.7 23.9 2.7 Location Average Average Average Average Average Average Quality Average Average Average/Good Average Average Average Condition Average Average/Good Good Fair Good Average/Good Exposure Fair/Average Average Average Average Average Average Access Average Average Average Average Average Average Year Built 1987 1990 1950 1960 195 1960 Clear Height 12-13' 12 Feet 10 Feet 10-12 Feet 10-14 Feet 12 Feet Date 2/29/2024 10/18/2023 6/27/2023 8/5/2022 7/6/2022
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SALES APPROACH CONTINUED GRR250041 SALES LOCATION MAP (Leila, Arboretlim Sou ints] olen @) ; 5 / 4 tl Goo glesurse i 1) 4d Lf Map data ©2025 DISTANCE ADDRESS . SALEDATE OAR - 2000 East Col Former Recreational Center - - 4.3 Mies 221 North 30th Street, Springfield, MI 2/29/2024
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SALES APPROACH CONTINUED COMPARABLE 1 ; CE Light Industrial Property Address 221 North 30th Street City, State, Zip Code Springfield, MI, 49037 County Calhoun MSA Battle Creek, MI 54-080-049-28 SALEINFORMATION ~ [ Buyer Lantinga real Estate Holdings, LLC Seller Challo Properties, LLC Transaction Date 02/29/2024 Transaction Status Recorded Transaction Price $260,000 Analysis Price $260,000 Recording Number 4807/0803 Rights Transferred Fee Simple Financing Cash at Settlement Conditions of Sale Arms-Length PHYSICAL INFORMATION Leasable Area (NRA) 5,120 Number of Buildings 1 Year Built 1990 Parking Spaces / Ratio % of Office Build-out 2/(0.4/1,000 SF NRA) 4% Clear Height 12 Feet Class Ss Grade Doors 1 Dock Doors 0 Quality Average Condition Average/Good Building Structure Metal Site Size 0.9 Acres (37,766 SF) Zoning 1 Access Average Exposure Average Site Coverage 14% GRR250041 2 ke LIGHT INDUSTRIAL PROPERTY. & Quantum (©) 2 axar Tec gies ANALYSIS INFORMATION Price per SF $51 Adjusted Price per SF $48 Capitalization Rate CONFIRMATION Name Confidential Company Assessor / Public Records Source Assessor Date / Phone Number 05/20/2025 Confidential REMARKS Light industrial property w ith minimal office constructed circa 1990 The property sold in an off-market transaction for $260,000 per public records.
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SALES APPROACH CONTINUED GRR250041 COMPARABLE 2 LOCATIONINFORMATION Former Cannabis Dispensary frill 1193 East Michigan Avenue City, State, Zip Code Battle Creek, MI, 49014 County Calhoun MSA Battle Creek, MI SALE INFORMATION 10-290-025-00 Buyer Waterbury 1193, LLC Seller 1193 Michigan, LLC Transaction Date 10/18/2023 Transaction Status Recorded Transaction Price $299,900 Analysis Price $299,900 Recording Number 4786/0115 Rights Transferred Fee Simple Financing Conventional Conditions of Sale Arms-Length Marketing Time 4 Months PHYSICAL INFORMATION Leasable Area (NRA) 5,488 Number of Buildings 1 Year Built 1950 Parking Spaces / Ratio 25 (4.6/1,000 SF NRA) % of Office Build-out 61% Go, Map data ©2025 Imagery ©2025 Maxar Technologies Clear Height 10 Feet ANALYSIS INFORMATION Grade Doors 2 Price per SF Dock Doors 0 Adjusted Price per SF $41 Quality Average/Good Capitalization Rate conan coos Building Structure Wood Name Dustin Damon Site Size 0.4 Acres (17,685 SF) Company RE/MAX Perrett Zoning Local Commercial Source Seller's Broker Access Average Date / Phone Number 05/20/2025 +1269 317 0988 Exposure Average REMARKS Site Coverage 31% Industrial property w hich w as renovated for cannabis dispensary use in 2020, but ultimately closed and repurposed for use by a contractor. The property was listed for $450,000 in 2023, later reduced and sold for $299,900 after about a 4- month marketing period.
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SALES APPROACH CONTINUED GRR250041 COMPARABLE 3 Light Industrial Property Address 2600 West Dickman Road City, State, Zip Code County MSA SALEINFORMATION fe Next Generation Law n Care, LLC A&G Construction, LLC Buyer Seller Springfield, MI, 49037 Calhoun Battle Creek, MI 54-100-024-00 Transaction Date 06/27/2023 Transaction Status Recorded Transaction Price $300,000 Analysis Price $300,000 Recording Number 4758/0063 Rights Transferred Fee Simple Financing Cash at Settlement Conditions of Sale Arms-Length Marketing Time 3 Months f PHYSICAL INFORMATION Budget Drain £5 Leasable Area (NRA) 10,875 Number of Buildings 1 : Cleaning 23 Ho Year Built 1960 Parking Spaces / Ratio 8(0.7/1,000 SF NRA) % of Office Build-out 26% 2 Gear Height 10-12 Feet Class Ss Price per SF $28 Grade Doors 3 Adjusted Price per SF $37 Dock Doors 1 Capitalization Rate ual Average Condition Fair Name Rahjah Stahlhood Building Structure Metal Company Coldw ell Banker Morehart Realty Site Size 0.7 Acres (29,707 SF) Source Seller's Broker Zoning [3] Date / Phone Number 05/20/2025 +1 269 986 3780 Access Average REMARKS Exposure Average Light industrial property constructed in stages from 1960 to 1995 with Site Coverage 37% renovations in 1991 and 2006. The property was listed for $339,000, was on the market for about 3-months and sold for $300,000.
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SALES APPROACH CONTINUED COMPARABLE 4 mess City, State, Zip Code County MSA TE 7 Buyer Seller Transaction Date Transaction Status Transaction Price Analysis Price Recording Number Rights Transferred Financing Conditions of Sale Marketing Time PHYSICAL INFORMATION Leasable Area (NRA) Number of Buildings Year Built % of Office Build-out Clear Height Class Grade Doors Dock Doors Quality Condition Building Structure Site Size Zoning Access Exposure Site Coverage GRR250041 Light Industrial Property 2257 West Columbia Avenue Battle Creek, MI, 49015 Calhoun Battle Creek, MI 52-0066-00-540-0 Jeremy Harris Ted E Goff Trust 08/5/2022 Recorded $360,000 $360,000 4686/0502 Fee Simple All Cash | akeyic wo fo - . oo A — Arms-Length 5 > Ne) @ 1 Months 7,302 1 195 39% 10-14 Feet Ss ANALYSIS INFORMATION 3 Price per SF $49 [4 Adjusted Price per SF $42 Average Capitalization Rate Good CONFIRMATION Frame/Siding Name Al Morehart 4.0 Acres (174,706 SF) Company Coldw ell Banker Morehart Realty B-1 Source Seller's Broker Average Date / Phone Number 05/20/2025 +1269 441 8184 Average REMARKS 4% Former residential property converted to commercial use with additions of garages and metal buildings. The property was listed for $385k and sold for $360k per public records after a 1-month marketing period.
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CONTINUED COMPARABLE 5 LOCATION INFORMATION & Address City, State, Zip Code County MSA SALE INFORMATION Buyer Seller Transaction Date Transaction Status Transaction Price Analysis Price Rights Transferred Financing Conditions of Sale Marketing Time PHYSICAL INFORMATION ! Leasable Area (NRA) Number of Buildings Year Built Parking Spaces / Ratio % of Office Build-out Clear Height Grade Doors Dock Doors Quality Condition Building Structure Site Size Zoning Access Exposure Site Coverage LES APPROACH GRR250041 5 Light Industrial Property 2205 West Dickman Road Springfield, MI, 49037 Calhoun Battle Creek, MI 54-060-008-01 Revolve States, LLC Mangw n Properties, Inc. 07/6/2022 Recorded $248,600 $248,600 Fee Simple Conventional Arms-Length 18 Months LIGHT INDUS TRIAL ERORERLY 5,694 1 1960 10 (1.8/1,000 SF NRA) 32% A 0. - 12 Feet Go Map data ©2025 Imagery ©2025 Maxar Techriologies 2 ANALYSIS INFORMATION 1 Price per SF Average Adjusted Price per SF $43 Average/Good Capitalization Rate Metal CONFIRMATION 0.4 Acres (15,507 SF) Name Confidential [3] Company Scott Harrington - Harrington Real Estate Average Source Seller's Broker Average Date / Phone Number 05/20/2025 Confidential 37% REMARKS Light industrial property constructed circa 1960 and later nicely renovated. The property was listed for $349,900, noting that an adjacent property w as for sale too, but could be purchased singularly. The list price was later reduced to $299,900 and sold for $248,600 after an 18-month marketing period.
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SALES APPROACH CONTINUED IMPROVED SALES ADJUSTMENT TABLE GRR250041 SUBJ COMPARABLE 1 COMPARABLE 4 COMPARABLES Name Former Recreational Light Industrial Property ~~ Former Cannabis Light Industrial Property ~~ Light Industrial Property ~~ Light Industrial Property Center Dispensary Address 2000 East Columbia Ave. 221 North 30th Street 1193 East Mchigan 2600 West Dickman Road 2257 West Columbia 2205 West Dickman Road Avenue Avenue City, State Battle Creek, Mi Springfield, Ml Battle Creek, MI Springfield, MI Battle Creek, MI Springfield, MI Zip 49014 49037 49014 49037 49015 49037 NRA (SF) 5,840 5120 5,488 10,875 7,302 5,694 Land Area (AC) 33 0.9 0.4 0.7 4.0 0.4 Year Built 1987 1990 1950 1960 195 1960 Date 2/29/2024 10/18/2023 6/27/2023 8/5/2022 71612022 Status Recorded Recorded Recorded Recorded Recorded Rights Transferred Fee Simple Fee Simple Fee Simple Fee Simple Fee Simple Analysis Price $260,000 $299,900 $300,000 $360,000 $248,600 $/SF NRA $51 $55 $28 $49 $44 Property Rights 0% 0% 0% 0% 0% Financing 0% 0% 0% 0% 0% Conditions of Sale 0% 0% 0% 0% 0% Expenditures After the Sale 0% 0% 0% 0% 0% Market Conditions* 3% 4% 5% 7% 8% Subtotal Transactional Adj Price $52 $57 $29 $53 $47 Location Average Average Average Average Average Average Adjustment 0% 0% 0% 0% 0% Size 5,840 5,120 5,488 10,875 7,302 5,694 Adjustment 0% 0% 5% 0% 0% Quality Average Average Average/Good Average Average Average Adjustment 0% -10% 0% 0% 0% Condition Average Average/Good Good Fair Good Average/Good Adjustment -10% -20% 20% -20% -10% Exposure Fair/Average Average Average Average Average Average Adjustment 0% 0% 0% 0% 0% Access Average Average Average Average Average Average Adjustment 0% 0% 0% 0% 0% Age 1987 1990 1950 1960 195 1960 Adjustment 0% 0% 0% 0% 0% Clear Height 12-13" 12 Feet 10 Feet 10-12 Feet 10-14 Feet 12 Feet Adjustment 0% 0% 0% 0% 0% L:B Ratio 224 74 32 27 239 27 Adjustment 3% 3% 3% 0% 3% Subtotal Property Adjustment -8% -28% 28% -20% -8% TOTAL ADJUSTED PRICE $48 $41 $37. $42 $43 STATISTICS UNADJUSTED ADJUSTED Low $28 $37 HIGH $55 $48 MEDIAN $49 $42 AVERAGE $45 $42 * Market Conditions Adjustment: 3% Date of Value (for adjustment calculations); 12/31/24
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SALES APPROACH CONTINUED GRR250041 SALES COMPARABLE ANALYSIS Introduction The comparable sales indicate an adjusted value range from $37 to $48/SF, with a median of $42/SF and an average of $42/SF. The range of total gross adjustment applied to the comparables was from 15% to 36%, with an average gross adjustment across all comparables of 26%. The level of total adjustment applied to the comparables is considered to be moderate. Overall, the availability of market data and extent of analysis was adequate to develop the subject property’s total value. The adjustment process for each comparable sale is discussed in the following paragraphs. Discussion of Adjustments Comparable 1 ($48/SF adjusted) required a total upward transaction adjustment of 3%. This comparable is adjusted upward for improving market conditions. This comparable required a total downward adjustment of -8% for property characteristics. This comparable was adjusted downward for its superior condition, and upward for its inferior land-to-building ratio. The total gross adjustment applied to this comparable was 15%. The moderate level of gross adjustments required for this comparable indicates that it can be adequately relied upon for valuation of the subject. This comparable is given secondary consideration as a value indicator for the subject. Comparable 2 ($41/SF adjusted) required a total upward transaction adjustment of 4%. This comparable is adjusted upward for improving market conditions. This comparable required a total downward adjustment of -28% for property characteristics. This comparable was adjusted downward for its superior quality and condition, and upward for its inferior land-to-building ratio. The total gross adjustment applied to this comparable was 36%. The substantial level of gross adjustments required for this comparable was justified due to the comparable's varying attributes. Considering these factors, this comparable is given primary consideration as a value indicator for the subject. Comparable 3 ($37/SF adjusted) required a total upward transaction adjustment of 5%. This comparable is adjusted upward for improving market conditions. This comparable required a total upward adjustment of 28% for property characteristics. This comparable was adjusted upward for its larger size and inferior condition and land-to-building ratio. The total gross adjustment applied to this comparable was 32%. The substantial level of gross adjustments required for this comparable was justified due to the comparable's varying attributes. Considering these factors, this comparable is given secondary consideration as a value indicator for the subject. Comparable 4 ($42/SF adjusted) required a total upward transaction adjustment of 7%. This comparable is adjusted upward for improving market conditions. This comparable required a total downward adjustment of -20% for property characteristics. This comparable was adjusted downward for its superior condition. The total gross adjustment applied to this comparable was 27%. The substantial level of gross adjustments required for this comparable was justified due to the comparable's varying attributes. Considering these factors, this comparable is given primary consideration as a value indicator for the subject. Comparable 5 ($43/SF adjusted) required a total upward transaction adjustment of 8%. This comparable is
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SALES APPROACH CONTINUED GRR250041 SALES COMPARISON APPROACH CONCLUSION — 12/31/2024The comparable sales indicate an adjusted value range from $37 to $48/SF, with a median of $42/SF and an average of $42/SF. Based on the results of the preceding analysis, Comparable 2 ($41/SF adjusted), Comparable 4 ($42/SF adjusted) and Comparable 5 ($43/SF adjusted) are given primary consideration for the subject's opinion of value. The following table summarizes the analysis of the comparables, reports the reconciled price per NRA value conclusion, and presents the concluded value of the subject property. SALES COMPARISON APPROACH CONCLUSION (NRA) ANALYSIS ADJUSTMENT NET GROSS OVERALL COMP PRICE TRANSACTIONAL' ADJUSTED PROPERTY? FINAL ADJ % ADJ% COMPARISON 1 $51 3% $52 -8% $48 -5% 15% SECONDARY 2 $55 4% $57 -28% $41 -25% 36% PRIMARY 3 $28 5% $29 28% $37 33% 32% SECONDARY 4 $49 7% $53 -20% $42 -14% 27% PRIMARY 5 $44 8% $47 -8% $43 -0% 20% PRIMARY Low $37 AVERAGE $42 HIGH $48 MEDIAN $42 SUBJECT SF $/SF CONCLUSION VALUE INDICATED VALUE 5,840 x $42/SF = $250,000 CONTRIBUTORY VALUE OF THE SURPLUS LAND $60,000 RETROSPECTIVE VALUE AS-IS (12/31/2024) $53/SF $310,000 "Cumulative Additive Rounded to nearest $10,000
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LAND VALUATION GRR250041 INTRODUCTION As previously discussed within the Valuation Methods section, the subject is valued as one marketable economic site in this appraisal. Land value is influenced by a number of factors; most prominent of which is development and use potential. These factors, as well as others, are considered in the following analysis. UNIT OF COMPARISON The most relevant unit of comparison is the price per acre. This indicator best reflects the analysis used by buyers and sellers in this market for land with similar utility and zoning in this marketplace. COMPARABLE SELECTION A thorough search was made for similar land sales in terms of proximity to the subject, size, location, development potential, and date of sale. In selecting comparables, emphasis was placed on confirming recent sales of commercial sites that are similar to the subject property in terms of location and physical characteristics. Overall, the sales selected represent the best comparables available for this analysis. ADJUSTMENT PROCESS Quantitative adjustments are made to the comparable sales. The following adjustments or general market trends were considered for the basis of valuation. Transactional Adjustments Dollar adjustments to the comparable sales were considered and made when warranted for transactional adjustments in the sequence shown below: Property Rights Transferred ~~ The valuation of the subject site was completed on a fee simple basis. If warranted, leased fee, leasehold and/or partial interest land sales were adjusted accordingly. Financing Terms The subject site was valued on a cash equivalent basis. Adjustments were made to the comparables involving financing terms atypical of the marketplace. Conditions of Sale This adjustment accounts for extraordinary motivation on the part of the buyer or seller often associated with distressed sales and/or assemblages. Expenditures After Purchase Adjustments were applied if site conditions warranted expenditures on the part of the buyer to create a buildable site. Examples include costs for razing pre- existing structures, general site clearing and/or mitigation of environmental issues. Market Conditions Market conditions adjustments were based on a review of historical sale data, market participant interviews and review of current versus historical pricing. Based on my research, the following table summarizes the market conditions adjustment applied in this analysis.
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LAND VALUATION CONTINUED GRR250041 Property Adjustments Quantitative percentage adjustments are also made for location and physical characteristics such as size, shape, access, exposure, topography, zoning and overall utility. Where possible the adjustments applied are based on paired data or other statistical analysis. For example, location adjustments are based primarily on review of land values in the market areas for the comparables relative to the subject. It should be stressed that the adjustments are subjective in nature and are meant to illustrate my logic in deriving a value opinion for the subject site. PRESENTATION The following Land Sales Summation Table, Location Map and datasheets summarize the sales data used in this analysis. Following these items, the comparable land sales are adjusted for applicable elements of comparison and the opinion of site value is concluded. LAND SALES SUMMATION TABLE COMPARABLE SUBJECT COMPARABLE 1 COMPARABLE 2 COMPARABLE 3 Name Former Recreational Vacant Land Vacant Land Vacant Land Center Address 2000 East Columbia Ave. 4421 West Columbia Avenue 550 General Avenue 15074 6 1/2 Mile Road City Battle Creek Battle Creek Battle Creek Battle Creek State Mi Mi Mi Mi Zip 49014 49015 49037 49014 County Calhoun Calhoun Calhoun Calhoun PHYSICAL INFORMATION Acres 6.75 1.24 2.19 7.51 Location Average Average Fair Average Exposure Fair/Average Average Average Average Access Average Average Average Average Shape Irregular Irregular Rectangular Rectangular Site Utility Rating Average Average Average Average SALE INFORMATION Date 8/4/2023 9/6/2022 1/13/2022 Status Recorded Recorded Recorded Rights Transferred Fee Simple Fee Simple Fee Simple Transaction Price $25,000 $21,000 $130,000 Analysis Price $25,000 $21,000 $130,000 IAcre $20,129 $9,589 $17,310
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ND VALUATIO CONTINUED COMPARABLE 1 Vacant Land Address 4421 West Columbia Avenue City, State, Zip Code Battle Creek, MI, 49015 County Calhoun MSA Battle Creek, MI 0069-00-220-0 SALE INFORMATION Buyer David Whitaker SR Seller 4421 Columbia, LLC Transaction Date 08/4/2023 Transaction Status Recorded Transaction Price $25,000 Analysis Price $25,000 Recording Number 4786/993 Rights Transferred Fee Simple Financing All Cash Conditions of Sale Arms-Length Marketing Time 10 Months Intended Use Commercial Location Average Site Size (Net) 1.24 Acres (54,101 SF) Site Size (Gross) 1.24 Acres (54,101 SF) Zoning C2 Shape Irregular Topography Generally Level Access Average Exposure Average Corner No Utilities Yes GRR250041 VACANT LAND Price $/Acre $/SF Gross $20,129 $0.46 $20,129 $0.46 Dustin Damon ei RE/MAX Perrett Source Seller's Broker Date / Phone Number ~~ 05/20/2025 +1269 317 0988 REMARKS Two contiguous tax parcels zoned C-2 that were previously improved with a building that was razed prior to the sale. The property was listed for about 10- months with an initial asking price of $95,000 and sold for $25,000.
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AND VAL 10 CONTINUED GRR250041 COMPARABLE 2 Vacant Land Address 550 General Avenue City, State, Zip Code Battle Creek, MI, 49037 County Calhoun MSA Battle Creek, MI 13-54-215-008-00 SALE INFORMATION Buyer Erasmo Hernandez Seller CARE Management, LLC Transaction Date 09/6/2022 Transaction Status Recorded Transaction Price $21,000 Analysis Price $21,000 VACANT LAND Rights Transferred Fee Simple ANALYSIS INFORMATION Financing All Cash Price $/Acre $ISF Conditions of Sale Arms-Length Gross $9,589 $0.22 Marketing Time 7 Months $9,589 $0.22 Intended Use Commercial Paul Schw allier Location Fair _— Great Lakes Signature Properties, LLC Site Size (Net) 2.19 Acres (95,396 SF) Source Seller's Broker Site Size (Gross) 2.19 Acres (95,396 SF) Date / Phone Number #VALUE! +1616 490 0932 Shape Rectangular 2.19-acre site zoned IRT in the back of a commercial development with a mix of Topography Level industrial and office type developments. The property was listed for $24,900 and Acssss Average sold for $21k after a 7-month marketing period. Exposure Average Corner No Utilities Yes
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LAND VAL ON CONTINUED GRR250041 COMPARABLE 3 Name Vacant Land Address 15074 6 1/2 Mile Road City, State, Zip Code Battle Creek, MI, 49014 County Calhoun MSA Battle Creek, MI 10018 033 01 Buyer Thomas F Gunning Trust Seller James & Janice Hsman Transaction Date 01/13/2022 Transaction Status Recorded Transaction Price $130,000 Analysis Price $130,000 VACANT LAND Recording Number 4626/0029 ANALYSIS INFORMATION Rights Transferred Fee Simple Price $/Acre $/SF Financing Conventional Gross $17,310 $0.40 Conditions of Sale Arms-Length $17,310 $0.40 Marketing Time 2 Months CONFIRMATION PHYSICAL INFORMATION Sandy Edw ards Location Average —— Callander Commercial Site Size (Net) 7.51 Acres (327,135 SF) Source Seller's Broker Site Size (Gross) 7.51 Acres (327,135 SF) Date / Phone Number ~~ 05/20/2025 +1269 373 8102 Shape Rectangular Former AM radio station with a small office onsite and 4 radio tow ers, how ever Topography Generally Level broker indicated value is in the land. The property was listed for $149k and sold Access Average for $130k after a 2-month marketing period. Exposure Average Corner No Utilities Yes
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LAND VALUATION CONTINUED GRR250041 COMPARABLE SUBJECT COMPARABLE 1 COMPARABLE 2 COMPARABLE 3 Name Former Recreational Center ~~ Vacant Land Vacant Land Vacant Land Address 2000 East Columbia Ave. 4421 West Columbia Avenue 550 General Avenue 15074 6 1/2 Mile Road City Battle Creek Battle Creek Battle Creek Battle Creek Acres 6.75 1.24 2.19 7.51 Date 8/4/2023 9/6/2022 1/13/2022 Status Recorded Recorded Recorded Rights Transferred Fee Simple Fee Simple Fee Simple Analysis Price $25,000 $21,000 $130,000 Price/Acre $20,129 $9,589 $17,310 Property Rights 0% 0% 0% Financing 0% 0% 0% Conditions of Sale 0% 0% 0% Expenditures After the Sale 0% 0% 0% Market Conditions 0% 0% 0% Subtotal Transactional Adj Price $20,129 $9,589 $17,310 Location Average Average Fair Average Adjustment 0% 20% 0% Size 6.75 1.24 2.19 7.51 Adjustment -10% -5% 0% Exposure Fair/Average Average Average Average Adjustment 0% 0% 0% Access Average Average Average Average Adjustment 0% 0% 0% Shape Irregular Irregular Rectangular Rectangular Adjustment 0% 0% 0% Site Utility Rating Average Average Average Average Adjustment 0% 0% 0% Zoning LI C2 RT LI Adjustment 0% 0% 0% Topography Sloping Generally Level Level Generally Level Adjustment 0% 0% 0% Utilities Yes Yes Yes Yes Adjustment 0% 0% 0% Subtotal Property Adjustment -10% 15% 0% TOTAL ADJUSTED PRICE $11,027 $17,310 STATISTICS UNADJUSTED ADJUSTED Low $9,589 $11,027 HIGH $20,129 $18,116 MEDIAN $17,310 $17,310 AVERAGE $15,676 $15,485 Market Conditions Adjustment: 0%
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LAND VALUATION CONTINUED GRR250041 LAND SALES ANALYSIS Introduction The comparable land sales indicate an adjusted value range from $11,027 to $18,116/Acre, with a median of $17,310/Acre and an average of $15,485/Acre. The range of total gross adjustment applied to the comparables was from 0% to 25%, with an average gross adjustment across all comparables of 12%. The level of total adjustment applied to the comparables is considered to be moderate. Overall, the availability of market data and extent of analysis was adequate to develop a reasonably credible opinion of land value. The adjustment process for each comparable land sale is discussed in the following paragraphs. Discussion of Adjustments Comparable 1 ($18,116/Acre adjusted) did not require any transaction adjustments. This comparable required a total downward adjustment of -10% for property characteristics. The total gross adjustment applied to this comparable was 10%. The moderate level of gross adjustments required for this comparable indicates that it can be adequately relied upon for valuation of the subject. This comparable is given primary consideration as a value indicator for the subject. Comparable 2 ($11,027/Acre adjusted) did not require any transaction adjustments. This comparable required a total upward adjustment of 15% for property characteristics. The total gross adjustment applied to this comparable was 25%. The substantial level of gross adjustments required for this comparable was justified due to the comparable's varying attributes. Considering these factors, this comparable is given secondary consideration as a value indicator for the subject. Comparable 3 ($17,310/Acre adjusted) did not require any transaction adjustments. This comparable did not require any property characteristic adjustments. The total gross adjustment applied to this comparable was 0%. With no adjustments required, this comparable is viewed as a good substitute for the subject. For this analysis, this comparable commands primary consideration as a value indicator for the subject. LAND VALUE CONCLUSION The comparable land sales indicate an adjusted value range from $11,027 to $18,116/Acre, with a median of $17,310/Acre and an average of $15,485/Acre. Based on the results of the preceding analysis, Comparable 1 ($18,116/Acre adjusted) and Comparable 3 ($17,310/Acre adjusted) are given primary consideration for the subject’s opinion of land value. This is under the assumption that the surplus land could be sold / developed separately.
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LAND VALUATION CONTINUED GRR250041 The following table summarizes the analysis of the comparables, reports the reconciled price per acre value conclusion, and presents the concluded value of the subject site. CALCULATION OF LAND VALUE ANALYSIS ADJUSTMENT NET GROSS OVERALL COMP PRICE TRANSACTIONAL' ADJUSTED PROPERTY? FINAL ADJ % ADJ % COMPARISON 1 $20,129 0% $20,129 -10% $18,116 -10% 10% PRIMARY 2 $9,589 0% $9,589 16% $11,027 15% 25% SECONDARY 3 $17,310 0% $17,310 0% $17,310 0% 0% PRIMARY Low $11,027 AVERAGE $15,485 HIGH $18,116 MEDIAN $17,310 COMPONENT SUBJECT ACRES $/ACRE CONCLUSION VALUE Surplus 6.75 x $17,500 = $120,000 TOTAL PROPERTY 6.75 x $17,778 = $120,000 Deduction For Surplus (50%) ($60,000) TOTAL ADJUSTED VALUE $60,000 "Cumulative Additive Rounded to nearest $10,000 ADJUSTMENTS TO VALUE In speaking with brokers and market participants as it relates to the contributory value of surplus land, there are several factors that effect the likeliness that a buyer would pay full market value (as if excess land). Some of these factors include: e Size, shape and location of the surplus land; e Quality or usefulness of the surplus land; and, o Likeliness in the local market that the surplus land would be developed or utilized; In this market, it is noted that a number of properties along Columbia Avenue have some surplus land in the rear of the property (particularly on the south side of Columbia). Some of the sites are long and narrow, and others are wider and could more easily be utilized in conjunction with vertical or site improvement. Some of the land is located within an area prone to flooding (near the Kalamazoo River) and some is attached to properties that are more or less likely to see the surplus land utilized (as opposed to remaining unused land). In the case of the subject, the surplus land area is somewhat irregular in shape, has a developable size (6.75- acres) and the area prone to flooding and other non-usable areas have not been included. Thus, the subject's surplus land has more positives than negatives. In speaking with local brokers and market participants, contributory value of surplus land can range from almost nothing (not likely to be ever used / developed) to full excess land value (market conditions support immediate expansion). Most land falls in the 25% to 75% range. For the subject, the market wouldn't support immediate expansion or development of the surplus land. Further, the site is located off of Columbia Ave. and has limited visibility. Overall, we have concluded that the subject's surplus land contributes about half of excess land value, which is applied as an adjustment. Thus results in a
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RECONCILIATION OF VALUE CONCLUSIONS GRR250041 INTRODUCTION The Reconciliation of Value Conclusions is the final step in the appraisal process and involves the weighing of the individual valuation techniques in relationship to their substantiation by market data, and the reliability and applicability of each valuation technique to the subject property. Understanding the profiles of potential buyers and their typical reliance on each approach to value strongly influences the weighting process. In the open market, the subject property type would command most interest from regional and local buyers that are actively pursuing similar owner-user properties. There is currently steady buyer demand for substitute properties of the subject based on the volume of sale transactions and reports by buyers, sellers and other market participants during confirmation of market transactions. The most probable buyer is an owner user. The sales comparison approach was consistent with the findings of the income approach. It was reliable in that it used similar nearby properties and has comparisons that required limited adjustments. It is also the approach most often utilized by owner/users. The income approach, on the other hand, provided a value conclusion based on the income and expense dynamics specific to the subject property. The subject's income and expenses were closely corroborated by market evidence and the capitalization rate indicators were extracted from the market and were consistent. This approach, however, is typically not given as much weight by the typical buyer of the subject. Overall, each approach has areas of reliability and limitations. Based on the overall quality of the data and analyses, and considering the decision-making process of the typical buyer profile of the subject asset, primary emphasis was placed on the sales comparison approach, which is reflected in my final opinions of market value below. PRESENTATION OF VALUE CONCLUSIONS My opinion of value reflects current conditions and the likely actions of market participants as of the date of value. It is based on the available information gathered and provided to us, as presented in this report, and does not predict future performance. Changing market or property conditions can and likely will have an effect on the subject's value. The following table summarizes my final opinions of the Retrospective Market Value and As-Is Market Value of the subject property's fee simple interest. ANALYSIS OF VALUE CONCLUSIONS RETROSPECTIVE RETROSPECTIVE VALUATIONINDIGES VALUE AS-IS VALUE AS-IS INTEREST APPRAISED FEE SIMPLE FEE SIMPLE DATE OF VALUE DECEMBER 31, 2023 DECEMBER 31, 2024 Sales Comparison Approach $300,000 $310,000 Income Approach $280,000 $290,000 FINAL VALUE CONCLUSION $300,000 $310,000 $/SF $51/SF $53/SF
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CERTIFICATION GRR250041 | 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 of the signer are limited only by the reported assumptions and limiting conditions, and are my personal, impartial, and unbiased professional analyses, opinions, and conclusions. » The signer of this report have no present or prospective interest in the property that is the subject of this report, and no personal interest with respect to the parties involved. > William Fowler, MAI has performed no 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 signer is not biased with respect to the property that is the subject of this report or to the parties involved with this assignment. » The engagement in this assignment was not contingent upon developing or reporting predetermined results. » The compensation for completing this assignment is not contingent upon the development or reporting of a predetermined value or direction in value that favors the cause of the client, the amount of the value opinion, the attainment of a stipulated result, or the occurrence of a subsequent event directly related to the intended use of this appraisal. » The reported analysis, opinions, and conclusions were developed, and this report has been prepared, in conformity with the Uniform Standards of Professional Appraisal Practice and the Code of Professional Ethics and Standards of Professional Appraisal Practice of the Appraisal Institute. » William Fowler, MAI inspected the property that is the subject of this report. » No one provided significant real property appraisal assistance to appraiser 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 William Fowler, MAI completed the continuing education program for Designated Members of the Appraisal Institute. In Michigan, appraisers are required to be licensed and are regulated by the Michigan Department of Licensing and Regulatory Affairs, P.O. Box 30018, Lansing, Michigan 48909. [Jun / “Jor May 29, 2025 William Fowler, MAI Date Valuation Services Director Certified General Real Estate Appraiser
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ASSUMPTIONS & LIMITING CONDITIONS GRR250041 This appraisal is subject to the following assumptions and limiting conditions: » The appraiser may or may not have been provided with a survey of the subject property. If further verification is required, a survey by a registered surveyor is advised. » | assume no responsibility for matters legal in character, nor do we render any opinion as to title, which is assumed to be marketable. All existing liens, encumbrances, and assessments have been disregarded, unless otherwise noted, and the property is appraised as though free and clear, under responsible ownership, and competent management. >» The exhibits in this report are included to assist the reader in visualizing the property. | have made no survey of the property and assume no responsibility in connection with such matters. » Unless otherwise noted herein, it is assumed that there are no encroachments, zoning, or restrictive violations existing in the subject property. > The appraiser assumes no responsibility for determining if the property requires environmental approval by the appropriate governing agencies, nor if it is in violation thereof, unless otherwise noted herein. >» Information presented in this report has been obtained from reliable sources, and it is assumed that the information is accurate. » This report shall be used for its intended purpose only, and by the party to whom it is addressed. Possession of this report does not include the right of publication. > The appraiser may not be required to give testimony or to appear in court by reason of this appraisal, with reference to the property in question, unless prior arrangements have been made therefore. » The statements of value and all conclusions shall apply as of the dates shown herein. > There is no present or contemplated future interest in the property by the appraiser which is not specifically disclosed in this report. >» Without the written consent or approval of the author neither all, nor any part of, the contents of this report shall be conveyed to the public through advertising, public relations, news, sales, or other media. This applies particularly to value conclusions and to the identity of the appraiser and the firm with which the appraiser is connected. » This report must be used in its entirety. Reliance on any portion of the report independent of others, may lead the reader to erroneous conclusions regarding the property values. Unless approval is provided by the author no portion of the report stands alone. > The valuation stated herein assumes professional management and operation of the buildings throughout the lifetime of the improvements, with an adequate maintenance and repair program. » The liability of Colliers International Valuation & Advisory Services, its principals, agents, and employees is limited to the client. Further, there is no accountability, obligation, or liability to any third party. If this report is
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ASSUMPTIONS & LIMITING CONDITIONS CONTINUED GRR250041 injury (including death) resulting from or otherwise attributable to toxic or hazardous substances or materials, including without limitation hazardous waste, asbestos material, formaldehyde, or any smoke, vapors, soot, fumes, acids, alkalis, toxic chemicals, liquids, solids or gasses, waste materials or other irritants, contaminants or pollutants. » The appraiser assumes no responsibility for determining if the subject property complies with the Americans with Disabilities Act (ADA). Colliers International Valuation & Advisory Services, its principals, agents, and employees, shall not be liable for any costs, expenses, assessments, penalties or diminution in value resulting from non-compliance. This appraisal assumes that the subject meets an acceptable level of compliance with ADA standards; if the subject is not in compliance, the eventual renovation costs and/or penalties would negatively impact the present value of the subject. If the magnitude and time of the cost were known today, they would be reduced from the reported value conclusion. > An on-site inspection of the subject property was conducted. No evidence of asbestos materials on-site was noted. A Phase 1 Environmental Assessment was not provided for this analysis. This analysis assumes that no asbestos or other hazardous materials are stored or found in or on the subject property. If evidence of hazardous materials of any kind occurs, the reader should seek qualified professional assistance. If hazardous materials are discovered and if future market conditions indicate an impact on value and increased perceived risk, a revision of the concluded values may be necessary. > A detailed soils study was not provided for this analysis. The subject's soils and sub-soil conditions are assumed to be suitable based upon a visual inspection, which did not indicate evidence of excessive settling or unstable soils. No certification is made regarding the stability or suitability of the soil or sub-soil conditions. » This analysis assumes that the financial information provided for this appraisal, including rent rolls and historical income and expense statements; accurately reflect the current and historical operations of the subject property.
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DEND GRR250041 Engagement Letter Valuation Glossary Qualifications of Appraiser Qualifications of Colliers International Valuation & Advisory Services
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al Valuation & Advisory Service 1t. Please sign one copy of the >d with this assignment and yo RMOFESSIONAL SERVICE AGREEME (“Agreement”)
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Rppraisal and One (1) Electronic Fin delivered to the client. Bo xf} prior to our proceeding. lation & Advisory Services
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1 PELE Yir Faure y bdget forward any additional materials yot vever, Client may provide only com wha shall review such reports in cor quits other than to respond to the Cli dred by CIVAS or portions of such A will be at our sole and absolute dis eement and/or Non-Reliance letter, bsly grants to client the right to copy
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Valuation Glossary 2024 Colliers Unless specified otherwise, these definitions were extracted or paraphrased from the following sources or publications: e The Dictionary of Real Estate Appraisal, Seventh Edition, Appraisal Institute, Chicago, Illinois, 2022 (Dictionary). « Uniform Standards of Professional Appraisal Practice, 2020-2023 Edition (USPAP). e The Appraisal of Real Estate, Fifteenth Edition, Appraisal Institute, Chicago, Illinois, 2020 (15th Edition). Absolute Net Lease A lease in which the tenant pays all expenses including structural maintenance, building reserves, and management; often a long-term lease to a credit tenant. (Dictionary) Ad Valorem Tax A real estate tax based on the assessed value of the property, which is not necessarily equivalent to its market value. (15th Edition) Arm’s-length Transaction A transaction between unrelated parties who are each acting in his or her own best interest. (Dictionary) As-Is Market Value The estimate of the market value of real property in its current physical condition, use, and zoning as of the appraisal date. (Dictionary) Assessed Value The value of a property according to the tax rolls in ad valorem taxation; may be higher or lower than market value, or based on an assessment ratio that is a percentage of market value. (Dictionary) Average Daily Room Rate (ADR) In the lodging industry, the net rooms revenue derived from the sale of guest rooms divided by the number of paid occupied rooms. (Dictionary) Band of Investment A technique in which the capitalization rates attributable to components of an investment are weighted and combined to derive a weighted-average rate attributable to the total investment. (Dictionary) Cash-Equivalent Price The sale price of a property that is equivalent to what a cash buyer would pay. (Dictionary) Common Area The total area within a property that is not designed for sale Cost Approach A set of procedures through which a value indication is derived for the fee simple estate by estimating the cost new as of the effective date of the appraisal to construct a reproduction of (or replacement for) the existing structure, including an entrepreneurial incentive; deducting depreciation from the total cost; and adding the estimated land value. The contributory value of any site improvements that have not already been considered in the total cost can be added on a depreciated-cost basis. Adjustments may then be made to the indicated value of the fee simple estate in the subject property to reflect the value of the property rights being appraised. (Dictionary) Curable Functional Obsolescence An element of depreciation; a curable defect caused by a flaw involving the structure, materials, or design, which can be practically and economically corrected. (Dictionary) Debt Coverage Ratio (DCR) The ratio of net operating income to annual debt service, which measures the relative ability of a property to meet its debt service out of net operating income; also called debt service coverage ratio (DSCR). (Dictionary) Deferred Maintenance Items of wear and tear on a property that should be fixed now to protect the value or income-producing ability of a property. (Dictionary) Depreciation In appraisal, a loss in the value of improvements from any cause; the difference between the cost of an improvement on the effective date of the appraisal and the value of the improvement on the same date. (Dictionary) Direct Costs Expenditures for the labor and materials used in the construction of improvements; also called hard costs. (Dictionary)
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Discount Rate A rate of return on capital used to convert future payments or receipts into present value. (Dictionary) Disposition Value The most probable price that a specified interest in property should bring under the following conditions: 1. Consummation of a sale within a specified time, which is shorter than the typical exposure time for such a property in that market. 2. The property is subjected to market conditions prevailing as of the date of valuation. 3. Both the buyer and seller are acting prudently and knowledgeably. 4. The seller is under compulsion to sell. 5. The buyer is typically motivated. 6. Both parties are acting in what they consider their best interests. 7. Anadequate marketing effort will be made during the exposure time. 8. Payment will be made in cash in U.S. dollars (or the local currency) or in terms of financial arrangements comparable thereto. 9. The price represents the normal consideration for the property sold, unaffected by special or creative financing or sales concessions granted by anyone associated with the sale. This definition can also be modified to provide for valuation with specified financing terms. (Dictionary) Easement The right to use another's land for a stated purpose. Access or right-of-way easements may be acquired by private parties or public utilities. Governments may be the beneficiaries of easements placed on privately owned land that is dedicated to conservation, open space, or preservation. (15th Edition) Economic Life The period over which improvements to real estate contribute to property value. (Dictionary) Effective Age The age of property that is based on the amount of observed deterioration and obsolescence it has sustained, which may be different from its chronological age. (Dictionary) Effective Date The date on which the appraisal or review opinion applies Colliers Effective Rent The total base rent, or minimum rent stipulated in a lease, over the specified lease term minus rent concessions - e.g. free rent, excessive tenant improvements, moving allowances, lease buyouts, cash allowances, and other lease incentives. (15th Edition) Eminent Domain The right of government to take private property for public use upon the payment of just compensation. The Fifth Amendment of the U.S. Constitution, also known as the takings clause, guarantees payment of just compensation upon appropriation of private property. (Dictionary) Entrepreneurial Incentive The amount an entrepreneur expects or wants to receive as compensation for providing coordination and expertise and assuming the risks associated with the development of a project. Entrepreneurial incentive is the expectation of future reward as opposed to the profit actually earned on the project. (Dictionary) Entrepreneurial Profit A market-derived figure that represents the amount an entrepreneur received for his or her contribution to a past project to compensate for his or her time, effort, knowledge, and risk; the difference between the total cost of a property (cost of development) and its market value (property value after completion), which represents the entrepreneur's compensation for the risk and expertise associated with development. An entrepreneur is motivated by the prospect of future value enhancement (i.e, the entrepreneurial incentive). An entrepreneur who successfully creates value through new development, expansion, renovation, or an innovative change of use is rewarded by entrepreneurial profit. Entrepreneurs may also fail and suffer losses. (Dictionary) Excess Land Land that is not needed to serve or support the existing use. The highest and best use of the excess land may or may not be the same as the highest and best use of the improved parcel. Excess land has the potential to be sold separately and is valued separately. (Dictionary) Excess Rent The amount by which contract rent exceeds market rent at the time of the appraisal; created by a lease favorable to the lessor
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Exposure Time An opinion, based on supporting market data, of the length of time that the property interest being appraised would have been offered on the market prior to the hypothetical consummation of a sale at market value on the effective date of the appraisal. (USPAP) Extraordinary Assumption An assignment-specific assumption as of the effective date regarding uncertain information used in an analysis which, if found to be false, could alter the appraiser's opinions or conclusions. Uncertain information might include physical, legal, or economic characteristics of the subject property; or conditions external to the property, such as market conditions or trends; or the integrity of data used in an analysis. An extraordinary assumption may be used in an assignment only if: e Its required to properly develop credible opinions and conclusions; eo The appraiser has a reasonable basis for the extraordinary assumption; e Use of the extraordinary assumption results in a credible analysis; and o The appraiser complies with the disclosure requirements set forth in USPAP for extraordinary assumptions. (USPAP) External Obsolescence A type of depreciation; a diminution in value caused by negative external influences and generally incurable on the part of the owner, landlord, or tenant. The external influence may be either temporary or permanent. There are two forms of external obsolescence: economic and locational. (Dictionary) Fair Market Value In nontechnical usage, a term that is equivalent to the contemporary usage of market value. As used in condemnation, litigation, income tax, and property tax situations, a term that is similar in concept to market value but may be defined explicitly by the relevant agency or interpreted differently by court precedent. (Dictionary) Feasibility Analysis A study of the cost-benefit relationship of an economic endeavor. (USPAP) Fee Simple Estate Absolute ownership unencumbered by any other interest or Colliers the permissible floor area of a building is twice the total land area. (Dictionary) Functional Obsolescence The impairment of functional capacity of improvements according to market tastes and standards. (Dictionary) Functional Utility The ability of a property or building to be useful and to perform the function for which it is intended according to current market tastes and standards; the efficiency of a building's use in terms of architectural style, design and layout, traffic patterns, and the size and type of rooms. (Dictionary) Furniture, Fixtures, and Equipment (FF&E) Business trade fixtures and personal property, exclusive of inventory. (Dictionary) Going-concern An established and operating business having an indefinite future life. (Dictionary) Going-concern Value An outdated label for the market value of all the tangible and intangible assets of an established and operating business with an indefinite life, as if sold in aggregate; more accurately termed the market value of the going concern or market value of the total assets of the business. (Dictionary) Gross Building Area (GBA) Total floor area of a building, excluding unenclosed areas, measured from the exterior of the walls of the above-grade area. This includes mezzanines and basements if and when typically included in the market area of the type of property involved. (Dictionary) Gross Leasable Area (GLA) Total floor area designed for the occupancy and exclusive use of tenants, including basements and mezzanines; measured from the center of joint partitioning to the outside wall surfaces. (Dictionary) Gross Living Area (GLA) Total area of finished, above-grade residential space area; calculated by measuring the outside perimeter of the structure and includes only finished, habitable, above-grade living space. (Finished basements and attic areas are not generally included in total gross living area. Local practices, however, may differ.) (Dictionary)
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participant would have in mind for the asset when formulating the price that it would be willing to bid (IVS). (Dictionary) Hypothetical Condition 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. Hypothetical conditions are contrary to known facts about physical, legal, or economic characteristics of the subject property; or about conditions external to the property, such as market conditions or trends; or about the integrity of data used in an analysis. (USPAP) Income Capitalization Approach In the income capitalization approach, an appraiser analyzes a property's capacity to generate future benefits and capitalizes the income into an indication of present value. The principle of anticipation is fundamental to this approach. Techniques and procedures from this approach are used to analyze comparable sales data and to measure obsolescence in the cost approach. (75th Edition) Incurable Functional Obsolescence An element of depreciation; a defect caused by a deficiency or superadequacy involving the structure, materials, or design that cannot be practically or economically corrected as of the effective date of the appraisal. (Dictionary) Indirect Costs Expenditures or allowances for items other than'labor and materials that are necessary for construction, but are not typically part of the construction contract. Indirect costs may include administrative costs, professional fees, financing costs and the interest paid on construction loans, taxes and the builder's or developer's all-risk insurance during construction, and marketing, sales, and lease-up costs incurred to achieve occupancy or sale. Also called soft costs. (Dictionary) Interim Use The use contemplated by the market participants that the subject real estate can be put to while waiting for certain subsequent factors to occur. (Dictionary) Investment Value The value of a property to a particular investor or class of investors based on the investor's specific requirements. Investment value may be different from market value because it depends on a set of investment criteria that are not necessarily typical of the market. (Dictionary) Legal Nonconforming Use A use that was lawfully established and maintained, but no longer conforms to the use regulations of its current zoning; sometimes known as a legally nonconforming use. (Dictionary) Liquidation Value The most probable price that a specified interest in property should bring under the following conditions: 1. Consummation of a sale within a short time period. 2. The property is subjected to market conditions prevailing as of the date of valuation. 3. Both the buyer and seller are acting prudently and knowledgeably. 4. The seller is under extreme compulsion to sell. 5. The buyer is typically motivated. 6. Both parties are acting in what they consider to be their best interests. 7. A normal marketing effort is not possible due to the brief exposure time. 8. Payment will be made in cash in U.S. dollars (or the local currency) or in terms of financial arrangements comparable thereto. 9. The price represents the normal consideration for the property sold, unaffected by special or creative financing or sales concessions granted by anyone associated with the sale. This definition can also be modified to provide for valuation with specified financing terms. (Dictionary) Market Area The geographic region from which a majority of demand comes and in which the majority of competition is located. Depending on the market, a market area may be further subdivided into components such as primary, secondary, and tertiary market areas, or the competitive market area may be distinguished from the general market area. (Dictionary) Market Rent The most probable rent that a property should bring in a competitive and open market under all conditions requisite to a fair lease transaction, the lessee and lessor each acting prudently and knowledgeably, and assuming the rent is not affected by undue stimulus. (Dictionary) Market Study An analysis of the market conditions of supply, demand, and pricing for a specific property type in a specific area. (Dictionary)
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Market Value (Interagency Guidelines) The most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: 1. buyer and seller are typically motivated; 2. both parties are well informed or well advised, and acting in what they consider their own best interests; 3. areasonable time is allowed for exposure in the open market; 4. payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and 5. the price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale. ( 72 CFR, Part 34, Subpart C - Appraisals, 34.42(h)). Marketability Analysis The study of how a specific property is expected to perform in a specific market. A marketability analysis expands on a market analysis by addressing a specific property. (Dictionary) Neighborhood Analysis The objective analysis of observable or quantifiable data indicating discernible patterns of urban growth, structure, and change that may detract from or enhance property values; focuses on four sets of considerations that influence value: social, economic, governmental, and environmental factors. (Dictionary) Net Net Net Lease An alternative term for a type of net lease. In some markets, a net net net lease is defined as a lease in which the tenant assumes all expenses (fixed and variable) of operating a property except that the landlord is responsible for structural maintenance, building reserves, and management. Also called NNN lease, triple net lease, or fully net lease. (Dictionary) Net Operating Income (NOI) The actual or anticipated net income that remains after all operating expenses are deducted from effective gross income but before mortgage debt service and book depreciation are deducted. Note: This definition mirrors the convention used in Colliers Off-site Costs Costs incurred in the development of a project excluding on- site costs such as grading and construction of the building and other improvements; also called common costs or off-site improvement costs. (Dictionary) On-site Costs Costs incurred for the actual construction of buildings and improvements on a particular site. (Dictionary) Overage Rent The percentage rent paid over and above the guaranteed minimum rent or base rent; calculated as a percentage of sales in excess of a specified breakeven sales volume. (15th Edition) Overall Capitalization Rate (OAR) The relationship between a single year’s net operating income expectancy and the total property price or value. (Dictionary) Parking Ratio The ratio of parking area or parking spaces to an economic or physical unit of comparison. Minimum required parking ratios for various land uses are often stated in zoning ordinances. (Dictionary) Potential Gross Income (PGI) The total income attributable to property at full occupancy before vacancy and operating expenses are deducted. (Dictionary) Potential Gross Income Multiplier (PGIM) The ratio between the sale price (or value) of a property and its annual potential gross income. (Dictionary) Present Value (PV) The value of a future payment or series of future payments discounted to the current date or to time period zero. (Dictionary) Prospective Opinion of Value A value opinion effective as of a specified future date. The term does not define a type of value. Instead, it identifies a value opinion as effective at some specific future date. An opinion of value as of a prospective date is frequently sought in connection with projects that are proposed, under construction, or under conversion to a new use, or those that have not achieved sellout or a stabilized level of long-term occupancy. (Dictionary) Qualitative Adjustment
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Quantitative Adjustment In the application of the sales comparison and income capitalization approaches, a numerical (dollar or percentage) adjustment to the sale price, rent, or expense amount of a comparable property to account for the effect on value of a difference between each comparable property and the subject property. (Dictionary) Rentable Area The amount of space on which the rent is based; calculated according to local practice. (Dictionary) Replacement Cost The estimated cost to construct, at current prices as of a specific date, a substitute for a building or other improvements, using modern materials and current standards, design, and layout. (Dictionary) Replacement Cost for Insurance Purposes The estimated cost, at current prices as of the effective date of valuation, of a substitute for the building being valued, using modern materials and current standards, design and layout for insurance coverage purposes guaranteeing that damaged property is replaced with a new property (i.e., depreciation is not deducted). (Dictionary) Reproduction Cost The estimated cost to construct, at current prices as of the effective date of the appraisal, an exact duplicate or replica of the building being appraised, using the same or similar materials, construction standards, design, layout, and quality of workmanship and embodying all the deficiencies, superadequacies, and obsolescence of the subject building. (Dictionary) Retrospective Value Opinion A value opinion effective as of a specified historical date. The term retrospective does not define a type of value. Instead, it identifies a value opinion as being effective at some specific prior date. Value as of a historical date is frequently sought in connection with property tax appeals, damage models, lease renegotiation, deficiency judgments, estate tax, and condemnation. Inclusion of the type of value with this term is appropriate, e.g, “retrospective market value opinion.” (Dictionary) Sales Comparison Approach The process of deriving a value indication for the subject property by comparing sales of similar properties to the Colliers Scope of Work The type and extent of research and analysis in an appraisal or appraisal review assignment. Scope of work includes, but is not limited to: The extent to which the property is identified; The extent to which tangible property is inspected; The type and extent of data researched; and The type and extent of analysis applied to arrive at opinions or conclusions. (USPAP) Shopping Center Types Neighborhood Shopping Center: The smallest type of shopping center, generally with a gross leasable area of between 30,000 and 100,000 square feet. Typical anchors include supermarkets. Neighborhood shopping centers offer convenience goods and personal services and usually depend on a market population support of 3,000 to 40,000 people. Community Shopping Center: A shopping center of 100,000 to 400,000 square feet that usually contains one junior department store, a variety store, discount or department store. Acommunity shopping center generally has between 20 and 70 retail tenants and a market population support of 40,000 to 150,000 people. Regional Shopping Center: A shopping center of 300,000 to 900,000 square feet that is built around one or two full-line department stores of approximately 200,000 square feet each plus small tenant spaces. This type of center is typically supported by a minimum population of 150,000 people. Super-Regional Center: A large center of 600,000 to 2.0 million square feet anchored by three or more full-line department stores. This type of center is typically supported by a population area of 300,000 people. (75th Edition) Sum of the Retail Values The sum of the separate and distinct market value opinions for each of the units in a condominium; subdivision development, or portfolio of properties, as of the date of valuation. The aggregate of retail values does not represent the value of all the units as sold together in a single transaction; it is simply the total of the individual market value conclusions. An appraisal has an effective date, but summing the sales prices of multiple units over an extended period of time will not be the value on that one day unless the prices are discounted to make the value equivalent to what another developer or investor would pay for the bulk purchase of the
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Surplus Land Land that is not currently needed to support the existing use but cannot be separated from the property and sold off for another use. Surplus land does not have an independent highest and best use and may or may not contribute value to the improved parcel. (Dictionary) Tenant Improvements (Ts) 1. Fixed improvements to the land or structures installed for use by a lessee. 2. The original installation of finished tenant space in a construction project; subject to periodic change for succeeding tenants. (Dictionary) Usable Area The area that is actually used by the tenants measured from the inside of the exterior walls to the inside of walls separating the space from hallways and common areas. (Dictionary) Useful Life The period of time over which a structure or a component of a property may reasonably be expected to perform the function for which it was designed. (Dictionary) Vacancy and Collection Loss A deduction from potential gross income (PG/) made to reflect income deductions due to vacancies, tenant turnover, and nonpayment of rent; also called vacancy and credit loss or vacancy and contingency loss. (Dictionary) Yield Capitalization A method used to convert future benefits into present value by (1) discounting each future benefit at an appropriate yield rate, or (2) developing an overall rate that explicitly reflects the investment's income pattern, holding period, value change, and yield rate. (Dictionary) Colliers
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Valuation Services Director Valuation & Advisory Services will.fowler@colliers.com Direct: +1 616 988 5843 Mobile: +1 616 970 8040 Fax: +1 616 242 0612 colliers.com 333 Bridge St NW Suite 1200 Grand Rapids, MI 49504 United States Education or Qualifications Ball State University State Certifications Michigan William Fowler, MAI Area of Expertise William P. Fowler, MAI serves as Valuation Services Director for Colliers International Valuation & Advisory Services in Grand Rapids, Michigan. Prior to joining the Colliers team, Will gained extensive real estate experience by heading offices for regional and national companies. Mr. Fowler has extensive experience in commercial real estate valuations on a variety of local, regional and national investment properties, focused on the Midwest including Michigan, Indiana, Ohio, Kentucky and West Virginia. His experience includes a wide array of owner-occupied, single and multi-tenant properties including retail, office and industrial use properties. Other real estate assignments include: multi-family residential, mobile home parks, automobile dealerships, self- storage facilities, various special use properties (ex. funeral home, proposed cemetery), developing subdivisions, hotels, and a resort, among commercial others. Client types serviced include: REIT's, insurance lenders, local municipalities, private corporations and law firms. companies, accountants, Professional Background Colliers Affiliations or Memberships Appraisal Institute, MAI Designation Great Lakes Chapter of the Appraisal Institute: e Board of Directors (current) Region Ill Representative (2018-2019) Hoosier State Chapter of the Appraisal Institute: o Finance Committee (2008-2013) o Nominating Committee (2008, 2015) Chair of the Associate Member Committee © (2010-2011) o LDAC (2009-2010) o Indianapolis Subchapter Chair (2008) o Newsletter Editor (2011-2013) Representative Projects Angie's List Campus, Indianapolis, IN (Multi-Building Office Campus) 17-Property Industrial Portfolio (Kojaian), Grand Rapids Area Custer Building, Grand Rapids, MI CBD (Office/Industrial Property) 5-Property Vision Collision Portfolio, Jackson and Lansing Areas Proposed FedEx, Portage, MI 5-Property, Planet Fitness Anchored Retail Centers (Southeast Michigan)
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DEPARTMENT OF LICENSING AND REGULATORY AFFAIRS BUREAU OF PROFESSIONAL LICENSING P.O. BOX 30670 LANSING, MI 48309 WILLIAM PATRICK FOWLER 7957 FINNAGEN DR MATTAWAN. MI 49071 GRETCHEN UHITHER STATE OF MICHIGAN - DEPARTMENT OF LICENSING AND REGULATORY AFFAIRS BUREAU OF PROFESSIONAL LICENSING CERTIFIED GENERAL REAL ESTATE APPRAISER LICENSE WILLIAM PATRICK FOULER LICENSE NO. EXPIRATION DATE COMPLAINT INFORMATION: THE ISSUANCE OF THIS LICENSE SHOULD NOT BE CONSTRUED AS A WAIVER, DISMISSAL OR ACQUIESCENCE TO ANY COMPLAINTS OR VIOLATIONS PENDING AGAINST THE LICENSEE, ITS AGENTS OR EMPLOYEES. FUTURE CONTACTS: YOU SHOULD DIRECT INQUIRIES REGARDING THIS LICENSE OR ADDRESS CHANGES TO THE DEPARTMENT OF LICENSING AND REGULATORY AFFAIRS BY EMAILING BPLHELP@MICHIGAN.GOV OR CALL (517) 241-0199 GOVERNOR STATE OF MICHIGAN DEPARTMENT OF LICENSING AND REGULATORY AFFAIRS BUREAU OF PROFESSIONAL LICENSING CERTIFIED GENERAL REAL ESTATE APPRAISER LICENSE WILLIAM PATRICK FOWLER
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LETTER OF TRANSMITTAL CONTINUED GRR250041 The subject is a Former Recreational Center, that has been used as an industrial property totaling 5,360 SF of NRA, split between two buildings, all located on a 38.26 gross acre site at 2000 East Columbia Ave. in Battle Creek, Michigan, within Emmett Township. The improvements were built in 1987 and 1988, are in average condition and have a remaining economic life of 25 years based on my estimate. The subject property originally had a single-tenant design that could be leased as two buildings so it could operate either as a single or two-tenant property. It is reported that the property was vacant or on short-term leases as of the effective dates of value. Regardless, the property is valued in its fee simple position in keeping with the method in which property assessments are calculated in the State of Michigan, so any existing leases are ignored. A long-term stabilized occupancy rate of 96.0% was developed in this appraisal for both valuation dates. The analyses, opinions and conclusions communicated within this appraisal report were developed based upon the requirements and guidelines of the current Uniform Standards of Professional Appraisal Practice (USPAP), the requirements of the Code of Professional Ethics and the Standards of Professional Appraisal Practice of the Appraisal Institute. The report is intended to conform to the appraisal guidelines set forth by the Michigan Tax Tribunal. The report, in its entirety, including all assumptions and limiting conditions, is an integral part of, and inseparable from, this letter. USPAP defines an Extraordinary Assumption as, “an assignment specific-assumption as of the effective date regarding uncertain information used in an analysis which, if found to be false, could alter the appraiser's opinions or conclusions”. USPAP defines a Hypothetical Condition as, “that 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”. The Extraordinary Assumptions and/or Hypothetical Conditions that were made during the appraisal process to arrive at my opinions of value are fully discussed below. | advise the client to consider these issues carefully given the intended use of this appraisal, as their use might have affected the assignment results. EXTRAORDINARY ASSUMPTIONS The retrospective market value estimate is based upon market participant attitudes and perceptions existing as of the effective date of our appraisal. | assume no material change in the physical characteristics and condition of the subject property between the date of inspection and effective dates of value, except for those identified within the report. HYPOTHETICAL CONDITIONS This Appraisal Report is not contingent on any hypothetical conditions. RELIANCE LANGUAGE The Appraisal is for the sole use of the Client; however, Client may provide only complete, final copies of the Appraisal report in its entirety (but not component parts) to third parties who shall review such reports in
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LETTER OF TRANSMITTAL CONTINUED GRR250041 Advisory Services. Colliers International Valuation & Advisory Services does consent to your submission of the reports to rating agencies, loan participants or your auditors in its entirety (but not component parts) without the need to provide Colliers International Valuation & Advisory Services with an Indemnification Agreement and/or Non-Reliance letter. Colliers International Valuation & Advisory Services hereby expressly grants to Client the right to copy the Appraisal and distribute it to other parties in the transaction for which the Appraisal has been prepared, including employees of Client, other lenders in the transaction, and the borrower, if any. My opinion of value reflects current conditions and the likely actions of market participants as of the date of value. It is based on the available information gathered and provided to us, as presented in this report, and does not predict future performance. Changing market or property conditions can and likely will have an effect on the subject's value. The signature below indicates my assurance to the client that the development process and extent of analysis for this assignment adhere to the scope requirements and intended use of the appraisal. If you have any specific questions or concerns regarding the attached appraisal report, or if Colliers International Valuation & Advisory Services can be of additional assistance, please contact the individuals listed below. Sincerely, COLLIERS INTERNATIONAL VALUATION & ADVISORY SERVICES William Fowler, MAI Valuation Services Director Certified General Real Estate Appraiser State of Michigan License #1205072943 +1616 988 5843 will.fowler@colliers.com
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Z _ g 7 | 7 Colliers , Valuation & Advisory Services
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Valuation & Advisory Services Real estate valuations play a pivotal role in today's business climate. An accurate and well supported opinion of property value can mean the difference between reaching a critical goal—securing a loan, closing a sale, reporting to investors, choosing the best asset—or failing to achieve it altogether. Colliers Valuation & Advisory Services’ reports are designed to deliver insight into a property's fundamentals, its competition and the overall market dynamics affecting value. A solid valuation report can be a strategic asset for investors, lenders and owners, provided that it addresses both a property's unique characteristics and the most current market conditions. Commitment to high-end client service, coupled with Colliers’ unparalleled market intelligence and resources, differentiates us as the firm of choice in the real estate industry. Professional Our professionals share a commitment to deliver the highest level of service and consistent results. We go the extra mile for our clients, whether this means meeting a tight deadline or working with a complex and challenging property. Technology Our unmatched report creation technology speeds appraisals through the pipeline. This secure, centralized production system generates a wide range of reports and high volume portfolio orders without delays. Information Today's business climate places valuation in a more pivotal position than ever before. All our appraisals are evaluated and approved by an experienced review team to ensure our clients receive concise and timely appraisals. With clear, prompt reporting and a comprehensive, big picture approach, Colliers’ valuation and advisory reports give our clients the information they need to make better business decisions.
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Real estate advisors in 501 offices in 65 countries. y, WORLD y/ SW) GREEN Eo” BUILDING NZ) Ccouncl Founding member of the World Green Building Council <IAOP Recognized and ranked 17 consecutive years, more than any other real estate firm Advisory Uopenjen3 ojjoj30d » £2 5 3 oi 8 > = 8 5% =2 2 FA i] 2 Lipsey Ranked in the top 3 most recognized global commercial real estate brands by The Lipsey Company Forbes Ranked in the world's top female-friendly companies. SL licensed appraisers and staff 30,000+ assignments completed annually Ii 69 o F + § © Valuation & Advisory Services market locations across the country
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Jeremy Walling, MAI, MRICS President | US Valuation & Advisory Services Jeremy.Walling@colliers.com +1312 371 4920 Jeff Shouse, MAI, CRE Executive Vice President Western US Jeff.Shouse@colliers.com +1916 724 5531 Bruce Nell, MAI, AI-GRS, MRICS Executive Managing Director Advisory Services Bruce.Nell@colliers.com +1614 437 4687 To learn more about our Regional and Market Valuation Experts, please click on or scan the QR code. Why work with Colliers? PJ Cusmano, MAI, MRICS Executive Vice President Eastern US PJ.Cusmano@colliers.com +1813 229 1599 Jerry Gisclair, MAI, MRICS Executive Vice President US Client Relations & Service Jerry.Gisclair@colliers.com +1813 871 8531 Anjanette “AJ” Hutson, MAI, Al-GRS Executive Managing Director Quality Assurance +1704 973 7202 aj.hutson@colliers.com We act as an extension of your team. Our approach is collaborative, nimble and informed by uncommon knowledge. By aligning with your core business needs, we develop and execute customized real estate solutions to support your growth strategy. We are both results and process-driven. From the first handshake to the last, we manage the valuation process to minimize disruption, mitigate risk and mediate competing perspectives so that you can focus on what you do best. You can count on us to stay focused on your priorities. cf 3