Board of Review Petition Package - 11-54-0016-0302-09-9 (2026).pdf
Bh Market LLC Petitioner Vs. City Of Benton Harbor Respondent · 26-001186-TT
Text extracted from the reviewed PDF, organized by page. OCR and reading order may contain errors; confirm details in the PDF below.
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Michigan Department of Treasury 618 (Rev. 12-25) Petition to Board of Review L-4035 This form is issued under the authority of P.A. 206 of 1893, as amended. Filing is voluntary; however, you may not appeal to the Michigan Tax Tribunal unless you first protest to the Board of Review, except when the property is classified as commercial real, industrial real, or developmental real. You may not appeal property classification to the State Tax Commission unless you first protest to the Board of Review. TO BE COMPLETED BY OWNER OR OWNER’S AGENT Owner's Name (Please Print or Type) Petitioner's Name (If Other than Owner. Please Print or Type) BH Market, LLC Sally A. Taylor, Attorney for Owner Township or City County Year of Appeal City of Benton Harbor Berrien 2026 The undersigned protests the assessed value and/or the tentative taxable value and/or the property classification and/or the qualified agricultural property exemption of the following described property: Property Identified (Parcel code required. Property address and legal description optional.) 11-54-0016-0302-09-9 Protested Item: IX] Assessed Value Tentative O Taxable Status O Classification OJ Qualified Agricultural Taxable Value (exemption) Property Exemption 1, PROTEST OF ASSESSMENT Complete this section for a protest of assessed value, including assessed value changes associated with exempt status and denied or late filed personal property forms. Assessed Value Owner's Estimate of True Cash Value (Market Value) $882,400 $550,000 2. PROTEST OF TAXABLE VALUE Complete this section for a protest of Taxable Value. Reason: J] Value of Losses ] Value of Additions | Poverty Exemption Uncapping % 3. PROTEST OF CLASSIFICATION Complete this section for a request to change the classification. The Board of Review must make their decision regarding classification in accordance with Section 211.34c of the Michigan Compiled Laws. The Board of Review shall not be influenced by the effect that a particular classification has on that property's status as a homeowner's principal residence or qualified agricultural property.) Classification of property on this year's assessment roll Classification should be (check one of the following): Agricultural J Industrial ] Timber Cutover ] Utility (Personal Property Only) OJ Commercial [! Residential l Developmental 4. PROTEST OF EXEMPTION FOR QUALIFIED AGRICULTURAL PROPERTY If the assessor has denied or changed the percentage of the exemption from the 18 mills of local school operating tax for qualified agricultural proper- ty, the owner may appeal this action to the March Board of Review. THE BOARD OF REVIEW HAS NO AUTHORITY TO CONSIDER OR ACT UPON THE EXEMPTION FROM THE 18 SCHOOL OPERATING MILLS FOR HOMEOWNER'S PRINCIPAL RESIDENCE PROPERTIES.) Percent qualified agricultural exemption granted by assessor (Enter 0 if exemption Percent qualified agricultural exemption requested by owner (Enter 100 if full denied) exemption requested) REASON FOR PROTEST State reason(s) for protest of assessed value and/or the tentative taxable value and/or taxable status and/or classification and/or qualified agricultural property exemption On May 27, 2025, Owner purchased parcel 11-54-0016-0302-09-9 through a third party, long-arm transaction. While
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618, Page 2 FOR BOARD OF REVIEW USE ONLY INSTRUCTIONS: Incorporate a copy of this form and the assigned number in the Board of Review minutes Petition Number Parcel Code 1. ASSESSED VALUE Disposition by Board of Review. The Board of Review must state the reason for its action below. ] Denied [l Assessed Value Changed From [ | to [ | Record of Vote — Board or three-member committee of board Chairperson: ] Yes 0 No Member: J Yes No Member: 1 Yes No Initials Initials Initials Reason for Board Action If you disagree with the decision of the Board of Review regarding tentative assessed value, you may appeal that decision by filing a petition with the Michigan Tax Tribunal at PO Box 30232, Lansing, MI 48309. Commercial Real, Industrial Real, Developmental Real, Commercial Personal, Industrial Personal and Utility Personal Property may be appealed by May 31. Agricultural Real, Residential Real, Timber-Cutover Real and Agricultural Personal Property may be appealed by July 31. The petition must be filed on a Michigan Tax Tribunal form or a form approved by the Michigan Tax Tribunal. Michigan Tax Tribunal forms are available at www. michiaan.gov/taxtrib. 2. TENTATIVE TAXABLE VALUE Disposition by Board of Review. The Board of Review must state the reason for its action below J Denied O Tentative Taxable Value Changed From to (See attached L-4035A) Record of Vote — Board or three-member committee of board Chairperson: O Yes No Member: Od Yes OJ No Member: OJ Yes O No Initials Initials Initials Reason for Board Action If you disagree with the decision of the Board of Review regarding tentative taxable value, you may appeal that decision by filing a petition with the Michigan Tax Tribunal at PO Box 30232, Lansing MI 48909. Commercial Real, Industrial Real, Developmental Real, Commercial Personal, Industrial Personal and Utility Personal Property may be appealed by May 31. Agricultural Real, Residential Real, Timber-Cutover Real and Agricultural Personal Property may be appealed by July 31. The petition must be filed on a Michigan Tax Tribunal form or a form approved by the Michigan Tax Tribunal. Michigan Tax Tribunal forms are available at www.michigan.govitaxtri 3. CLASSIFICATION Disposition by Board of Review. The Board of Review must state the reason for its action below. Hl] Denied Classification Changed From to Record of Vote — Board or three-member committee of board Chairperson: Yes O No Member: J Yes | No Member: Yes 1] No Initials Initials Initials Reason for Board Action If you disagree with the decision of the Board of Review regarding classification, you may appeal by sending Form 2167 to the State Tax Commission at PO Box 30471, Lansing MI 48909, by June 30. 4. QUALIFIED AGRICULTURAL PROPERTY EXEMPTION Disposition by Board of Review. The Board of Review must state the reason for its action below. | Exemption Request Denied [] Exemption percent modified from % to % Record of Vote — Board or three-member committee of board Chairperson: ] Yes 1] No Member: l! Yes O No Member: 1 Yes lH No
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This form is issued under the authority of P.A. 206 of 1893, Sec. 211.24c and Sec. 211.34c, as amended. L-4400 Notice of Assessment, Taxable ay 200.927.8400 Valuation, and Property Classification p X . 964 — ol 4 THIS IS NOT A TAX BILL BENTON HARBOR 200 wall suet Fort of Opportunities Benton, Harbor MI 48022 Parcel Code: 11-54-0016-0302-09-9 Property Address: 1891 TERRITORIAL RD NAME AND ADDRESS OF OWNER OR PERSON NAMED ON ASSESSMENT ROLL: School District Code: 11010 PRINCIPAL RESIDENCE EXEMPTION TEMP - RETURN SERVICE REQUESTED 7 26% % Exempt As "Homeowners Principal Residence”: 0.00% EE TEU CR TAU TP 1 TLR A ER TTA A EIU % Exempt As "Qualified Agricultural Property": 0.00% BH MARKET LLC % Exempt As "MBT Industrial Personal’: 0.00% 3960 RED ARROW HWY n : wv, BENTON HARBOR MI 49022-9552 % Exempt As "MBT Commercial Personal”: 0.00% Exempt As "Qualified Forest Property": O Yes No Exempt As "Development Property”: [ves [X]No ACCORDING TO MCL 211.34c THIS PROPERTY IS CLASSIFIED AS: 201 COMMERCIAL PRIOR YEAR'S CLASSIFICATION: 201 COMMERCIAL LEGAL DESCRIPTION: BEG 271.00' SO0ODEG05'08"E OF TH NE COR OF SW1/4 OF NW1/4 SEC 16 T4S R18W TH N8SDEG26'08"W 935.74’ TH S 838.52" TH N86DEG37'11"E 599.45' TH SOODEG05'30"E 264’ TO C/L TERRITORIAL RD TH N86DG37'11"E ON RD G/L 339" TH NOODEGO05'08™W 1037.96’ TO POB SEE L 2032 P 1010 FOR ABANDOMENT OF ROAD . There WAS or WAS NOT a transfer of ownership on this property in 2025: Was . ASSESSOR CHANGE REASON: Market Adjustment CURRENT CHANGE FROM PRIOR AMOUNT | TENTATIVE AMOUNT | PRIOR YEAR TO YEAR: 2025 YEAR: 2026 | CURRENT YEAR 1. TAXABLE VALUE: 287,936 882,400 594.464 2. ASSESSED VALUE: 796,100 882,400 86,300 3. TENTATIVE EQUALIZATION FACTOR: 1.00000 : ; RE a 4. STATE EQUALIZED VALUE (SEV): 796,100 86,300 5. 8 This change in taxable value will increase/decrease your 2026 tax bill by approximately $36,857. The 2026 Inflation Rate Multiplier is: 1.027 Questions regarding the Notice of Assessment, Taxable Valuation, and Property Classification may be directed to the following: Contact Name Phone Email ANGIE J. STORY (269) 207-2590 ASTORY@BHCITY.US March Board of Review Appeal information: THE MARCH BOARD OF REVIEW WILL HEAR APPEALS OF THE 2026 ASSESSMENTS ON: TUESDAY, MARCH 17,2026 FROM 2 PM - 5 PM AND 6 PM - 9 PM WEDNESDAY, MARCH 18, 2026 FROM 8:30- 11:30 AM AND 1:30 PM - 4:30 PM WRITTEN APPEALS MUST BE RECEIVED BY 1:30PM WEDNESDAY, MARCH 18, 2026 **PLEASE
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LETTER OF AUTHORIZATION BH Market LLC as the owner(s) of real estate as identified by parcel number(s) 11-54-0016-0302-09-9, hereby authorize SALLY A. TAYLOR to sign any necessary Board of Review tax appeal documents, and to represent me/us in person at Board meetings, or via letter, email, or other written communications, regarding the appeal of property values regarding the above referenced parcel(s). 03/13/2026 Wink Dndeng Dated: Dated:
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First Ametican Title Insurance Company
500 Renaissance Drive, Suite 103A +St. Joseph, MI 49085
Office Phone:(269)983-7777 Office Fax:(877)534-0064
Buyer's Final Settlement Statement
Property Address:
1891 Terrilorial Rd, Benton
File No:
1030257
Harbor, MI 49022
Officer:
Janice Gundry/JMG
Settlement Date:
05/27/2025
Disbursement Date:
05/27/2025
Print Date:
05/23/2025, 9:39 AM
BH Market, LLC
3960 Red Arrow Hwy, Benton Harbor, MI 49022
Benton Harbor Fruit Marke, Inc.
PO Box 127. Benton Harbor, MI 49022
Charge Description
Buyer Charge
| Buyer Credit
t
"550,000 04
i
Deposits in Escrow:
I
‘Receipt No, 282668271
on 05/01/2025
by Paw Paw Lake Properties, inc.
| Receipt No. 262669272 on 05/01/2025 by Paw Paw Lake Proparties
i
90
rican Tite Insurance Company
ing Fee to First A
Title
Insurance Company
Berdan County Register of Deeds
Bermien
County, Treasurer
Cash (X From} { To) Buyer
443,130.51
Totals
600,585.00
600,585.00
BUYER(S):
BH Market, LLC
, a Michigan limited liability
company
Title: President
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Beacon" Berrien County, Ml Overview == Interstate Major Arterial Minor Arterial Roads — <all other values> O Parcels ~~ Drains Wetlands TORIALRDBTE RRITORIALRD, | : ; .) is Emergent Wetland — Freshwater | Freshwater Forested/Shrub Wetland Freshwater Pond Lake Other Riverine [1] Lake Michigan Parcel ID 11-54-0016-0302-09-9 Alternate ID n/a Owner Address BH MARKET LLC Sec/Twp/Rng n/a Class 201 3960 RED ARROW HWY Property Address 1891 TERRITORIAL RD Acreage 19.41 BENTON HARBOR, MI 49022 BENTON HARBOR District 11010 Brief Tax Description BEG 271.00' SOODEG05'08"E OF TH NE COR OF SW1/4 OF NW1/4 SEC 16 T4S R18W TH N89DEG26'08"W 935.74" THS838.52' TH N86DEG37'11"E 599.45' TH SOODEGO05'30"E 264' TO C/L TERRITORIAL RD TH N86DG37'11"E ON RD C/L 339' TH NOODEG05'08"W 1037.96' TO POB SEE L 2032 P 1010 FOR ABANDOMENT OF ROAD (Note: Not to be used on legal documents) Date created: 3/16/2026 Last Data Uploaded: 3/16/2026 4:24:02 AM
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a J. Carnine & Co. REAL ESTATE APPRAISAL REPORT 1891 Territorial Road, Benton Harbor, MI 49022 PREPARED FOR Honor Credit Union 8385 Edgewood Road Berrien Springs, Ml 49013 INSPECTION DATE 8/26/2025 REPORT DATE
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J. Carnine & Co. 9/10/2025 Honor Credit Union 8385 Edgewood Road Berrien Springs, Ml 49013 Re: Real Estate Appraisal, 1891 Territorial Road, Benton Harbor, MI 49022 We have prepared an appraisal for the above referenced property. The estimate of value is bound by the scope of work section of the attached report. Please reference the scope of work section of this report for important information regarding the extent of research and analysis for this appraisal, including property identification, inspection, highest and best use analysis and valuation methodology. The following appraisal sets forth the most pertinent data gathered, the techniques employed, and the reasoning leading to the opinion of value. The analyses, opinions and conclusions were developed based on, and this report has been prepared in conformance with, our interpretation of the guidelines and recommendations set forth in the Uniform Standards of Professional Appraisal Practice (USPAP), the requirements of the Code of Professional Ethics and Standards of Professional Appraisal Practice of the Appraisal Institute, The Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA), Title XI Regulations. The report 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 connection with loan underwriting or securitization efforts. Appraiser is not required to explain or testify as to appraisal results other than to respond to the client for routine and customary questions. Please note that consent to allow an appraisal report prepared by J. Carnine & Co., or portions of such report, to become part of or be referenced in any public offering, the granting of such consent will be at our sole discretion and, if given, will be on condition that we will be provided with an Indemnification Agreement and/or Non-Reliance letter, in a form and content satisfactory to us, by a party satisfactory to us. We do 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 us with an Indemnification Agreement
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Honor Credit Union 9/10/2025 Page 2 We certify that we have no present or contemplated future interest in the property beyond this estimate of value. The appraiser has not performed any prior services regarding the subject within the previous three years of the appraisal date.. Your attention is directed to the Limiting Conditions and Assumptions section of this report. Acceptance of this report constitutes an agreement with these conditions and assumptions. In particular, please note the following: Hypothetical Conditions: = There are no hypothetical conditions for this appraisal. Extraordinary Assumptions: = There are no Extraordinary Assumptions for this appraisal. Based on the appraisal described in the accompanying report, subject to the Limiting Conditions and Assumptions, Extraordinary Assumptions and Hypothetical Conditions (if any), we have made the following value conclusion(s): Current As Is Market Value: The As Is Market Value of the Fee Simple estate of the property, as of 8/26/2025, is $625,000 Six Hundred Twenty-five Thousand Dollars The market exposure time preceding 8/26/2025 would have been 12 Months and the estimated marketing period as of 8/26/2025 is 12 Months. Respectfully submitted, J. Carnine & Co. Wa : Glennon flnkapank
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Real Estate Appraisal Report 1891 Territorial Road, Benton Harbor, MI Page |1 Table of Contents SUMMARY OF IMPORTANT FACTS AND CONCLUSIONS 3 SUBJECT PHOTOGRAPHS 6 LIMITING CONDITIONS AND ASSUMPTIONS 24 SCOPE OF WORK 30 CLIENT 30 PURPOSE OF THE APPRAISAL 30 INTENDED USE 30 INTENDED USERS 30 PROPERTY IDENTIFICATION 30 PROPERTY INSPECTION 30 DATA RESEARCHED 32 SALES HISTORY 32 CURRENT LISTING CONTRACTS 32 MARKET AREA AND MARKET CONDITIONS 32 EXTRAORDINARY ASSUMPTIONS 32 HYPOTHETICAL CONDITIONS 32 DEVELOPMENT OF HIGHEST AND BEST USE 33 SUPPLEMENTAL STANDARDS 33 JURISDICTIONAL EXCEPTIONS 33 VALUATION ANALYSIS 34 REPORT TYPE 34 MARKET VALUE DEFINITION 35 REGIONAL MARKET 37 NEIGHBORHOOD ANALYSIS 45 PROPERTY DESCRIPTION 51 SITE 51
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Real Estate Appraisal Report 1891 Territorial Road, Benton Harbor, MI Page |2 DEPRECIATION OF IMPROVEMENTS 60 ASSESSMENT AND TAXES 62 HIGHEST AND BEST USE 63 HIGHEST AND BEST USE CONCLUSION 64 VALUATION METHODOLOGY 65 ANALYSES APPLIED 66 COST APPROACH 67 SALES COMPARISON APPROACH — LAND VALUATION 68 LAND COMPARABLES 68 SALES COMPARISON APPROACH CONCLUSION — LAND VALUATION 78 COST ANALYSIS 79 DEPRECIATION ACCRUED TO THE SUBJECT 83 COST APPROACH CONCLUSION 83 INCOME APPROACH 85 DIRECT CAPITALIZATION ANALYSIS 85 POTENTIAL GROSS INCOME (PGI) 85 RENT ROLL 85 VACANCY AND COLLECTION LOSS 87 EXPENSES 87 CAPITALIZATION RATE 90 CAPITALIZATION RATE CONCLUSION 92 CAPITALIZATION TO VALUE 93 DIRECT CAPITALIZATION ANALYSIS CONCLUSION 93 FINAL RECONCILIATION 94 VALUE CONCLUSION 95
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Real Estate Appraisal Report 1891 Territorial Road, Benton Harbor, MI Page |3 Summary of Important Facts and Conclusions Property Identification Owner Address City State Property Major Type Property Type Site Characteristics BH Market LLC 1891 Territorial Road Benton Harbor Mi Retail Agricultural Market Acres Number of Parcels Overall Tract Shape Overall Topography Zoning 19.41 1 Irregular The subject has level topography at grade and no areas of wetlands. IL, Light Industrial Improvement Characteristics Number of Buildings Total GBA Overall Condition Overall Effective Age Overall Economic Life Overall Remaining Life 22 78,640 Fair 20.46 Years 26.51 Years 6.06 Years
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Real Estate Appraisal Report 1891 Territorial Road, Benton Harbor, Mi Report Date Page | 4 Report Date Inspection Date Inspected by John Carnine Inspected by Jennifer Pinkepank As Is Effective Date of Value Intended Use and Users 9/10/2025 8/26/2025 Yes No 8/26/2025 Intended Use mortgage financing Intended User the client Highest and Best Use Highest and Best Use As Vacant Industrial Highest and Best Use As Improved Market
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Real Estate Appraisal Report 1891 Territorial Road, Benton Harbor, MI As Is Value Indications Page |5 Value Effective Date Value Perspective Value Type Property Rights Marketing Time Exposure Time Land Value Indication Cost Approach Indication Sales Approach Indicated Value Income Approach Indicated Value Final Value Conclusion 8/26/2025 Current Market Value Fee Simple 12 Months 12 Months $250,000 $625,000 Not Conducted $625,000 $625,000
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Real Estate Appraisal Report 1891 Territorial Road, Benton Harbor, MI Page | 6 Subject Photographs Building 1
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Real Estate Appraisal Report 1891 Territorial Road, Benton Harbor, Ml Page |7 Building 2 Interior
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Real Estate Appraisal Report 1891 Territorial Road, Benton Harbor, MI Page | 8
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Real Estate Appraisal Report 1891 Territorial Road, Benton Harbor, MI Page |9 Building 3 Interior
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Real Estate Appraisal Report 1891 Territorial Road, Benton Harbor, MI Page |10
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Real Estate Appraisal Report 1891 Territorial Road, Benton Harbor, MI Page |11
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Real Estate Appraisal Report 1891 Territorial Road, Benton Harbor, MI Page |12 Dock 1 & Bldgs 5,6,7
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Real Estate Appraisal Report 1891 Territorial Road, Benton Harbor, MI Page [13
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Real Estate Appraisal Report 1891 Territorial Road, Benton Harbor, MI Page |14 Dock 2 Bldgs 11,12,13
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Real Estate Appraisal Report 1891 Territorial Road, Benton Harbor, MI Page | 15
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Real Estate Appraisal Report 1891 Territorial Road, Benton Harbor, MI Page | 16
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Real Estate Appraisal Report 1891 Territorial Road, Benton Harbor, MI Page | 17 Building 14 & 15
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Real Estate Appraisal Report 1891 Territorial Road, Benton Harbor, MI Page |18
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Real Estate Appraisal Report 1891 Territorial Road, Benton Harbor, MI Page |19 Building 21
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Real Estate Appraisal Report 1891 Territorial Road, Benton Harbor, MI Building 21 Interior Page |20
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Real Estate Appraisal Report 1891 Territorial Road, Benton Harbor, MI Page |21 Dock 5 Bldg 20
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Real Estate Appraisal Report 1891 Territorial Road, Benton Harbor, MI Page | 22 Buildings 16 & 15
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Real Estate Appraisal Report 1891 Territorial Road, Benton Harbor, MI Page |23 Dock 8 Bldgs 8 & 9
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Real Estate Appraisal Report 1891 Territorial Road, Benton Harbor, MI Page | 24 Limiting Conditions and Assumptions By this notice, all persons and firms using or relying on this report in any manner bind themselves to accept these contingent and limiting conditions, and all other contingent and limiting conditions contained elsewhere in this report. Do not use any portion of this report unless you fully accept all contingent and limiting conditions contained herein. These conditions are an integral part of this appraisal report, and are a preface to any certification, definition, description, fact, or analysis. This appraisal is to be used only for the purpose stated herein. While distribution of this appraisal in its entirety is at the discretion of the client, individual sections shall not be distributed; this report is intended to be used in whole and not in part. No part of this appraisal, its value estimates or the identity of the firm or the appraiser(s) may be communicated to the public through advertising, public relations, media sales, or other media. The liability of the appraiser is limited solely to the client. There is no accountability, obligation, or liability to any other third party. The appraisers’ maximum liability relating to services rendered under this engagement (regardless of form of action, whether in contract, negligence or otherwise) shall be limited to monies paid the appraiser for that portion of their services, or work product giving rise to liability. In no event shall the appraiser be liable for consequential, special, incidental or punitive loss, damage or expense (including without limitation, lost profits, opportunity costs, etc.) even if advised of their possible existence. If this report is placed in the hands of anyone other than the client, the client shall make such party aware of all contingent and limiting conditions, assumptions, discloses, and related discussions. Use of this report by third parties shall be solely at the risk of the third party. While the opinion of value rendered in this appraisal belongs to the client, all files, work papers and documents developed in connection with this assignment are the property of J. Carnine & Co. Information, estimates and opinions are verified where possible, but cannot be guaranteed. Plans provided are intended to assist the client in visualizing the property; no other use of these plans is intended or permitted. The appraiser assumes no responsibility for the inability of the client, or any other party to achieve their desired results based upon the appraised value.
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Real Estate Appraisal Report 1891 Territorial Road, Benton Harbor, MI VIL. VIII. Page |25 Acceptance of, and/or use of this report by the client, or any third party is prima facie evidence that the user understands, and agrees to all these conditions. Some of the assumptions or projections made herein can vary depending upon evolving events. We realize some assumptions may never occur and unexpected events or circumstances may occur. Therefore, actual results achieved during the projection period may vary from those set forth in this report. Compensation for appraisal services is dependent solely on the delivery of this report, and no other event or occurrence. The Appraisers assume a purchaser of the subject is aware of the following. a. This appraisal of the subject property does not serve as a warranty on the condition of the property. b. It is the responsibility of the purchaser to examine the property carefully, and to take all necessary precautions before signing a purchase contract. ¢. Any opinion for repairs is a non-warranted opinion of the appraiser. The appraiser is not required to give testimony or appear in court because of having prepared this report unless arrangements have been previously made. If the appraiser is subpoenaed pursuant to court order, the client agrees to compensate the appraiser for their court appearance time, court preparation time, and travel time at their regular hourly rate, in effect at the time of said appearance, preparation and travel time, plus expenses. In the event the real property appraised is, or becomes the subject of litigation, a condemnation, or other legal proceeding, it is assumed the appraiser will be given reasonable advanced notice, and reasonable additional time for court preparation. The physical condition of the improvements described herein was based only on visual observation. Electric, heating, cooling, plumbing, water supply, sewer or septic, mechanical equipment, and other systems were not tested. No determinations were made regarding the operability, capacity, or remaining useful life of any component of the real estate appraised. All building components are assumed adequate and in good working order unless stated otherwise. Private water wells and private septic systems are assumed sufficient to comply with federal, state, or local health safety standards. No liability is assumed for the soundness of structural members since structural elements were not tested or studied to determine their structural integrity. The roof(s) of the structure(s) is(are) assumed to be watertight unless otherwise noted. Comments regarding physical condition are included to familiarize the reader with the property. This document is not an
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Real Estate Appraisal Report 1891 Territorial Road, Benton Harbor, MI XL. XII. XII. XIV. Page | 26 The work prepared and reported in this appraisal report is not to be interpreted or construed as the equivalent to an engineering, construction, legal, or architectural study. It is not an examination or survey of any kind. Expertise in these areas is not implied. The appraiser is in no way responsible for any costs incurred to discover, or correct any deficiency in the property. The appraiser has no expertise in the field of insect, termite, or pest infestation and is not qualified to detect the presence of these or any other unfavorable infestation. The appraiser has no knowledge of the existence of any infestation on, under, above, or within the subject real estate. No overt evidence of infestation is apparent to the untrained eye. However, no assertion is made or implied that the subject is inspected or tested to determine the presence of any infestation. No effort was made to dismantle or probe the structure. No effort was exerted to observe enclosed, encased, or otherwise concealed evidence of infestation. The presence of any infestation would likely diminish the property's value. The value opinion in this communication assumes there is no infestation of any type affecting the subject real estate. No responsibility is assumed by the appraiser or J. Carnine & Co. for any infestation damage or for any expertise required to discover or remediate any infestation. Our client is urged to retain an expert in this field, if desired. For appraisals of multifamily property, only a portion of all dwellings was observed. It is assumed, in reaching a value conclusion, that the functionality, condition, and finish of the remaining units are similar to the functionality, condition, and finish of the observed units. If it is determined that the remaining units differ from the viewed units in functionality, condition, or finish, the appraiser reserves the right to amend the analysis and/or value conclusion(s). No liability is assumed for matters of legal nature that affect the value of the subject property. Unless a clear statement to the contrary is made in this report, the value opinion(s) herein are predicated upon the following assumptions. a. The real property is appraised as though and assumed free from all value impairments including yet not limited to title defects, liens, encumbrances, title claims, boundary discrepancies, encroachments, adverse easements, environmental hazards, pest infestation, adverse leases, and atypical physical deficiencies. All real estate taxes and assessments, of any type, are assumed fully paid.
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Real Estate Appraisal Report 1891 Territorial Road, Benton Harbor, Mi XV. XVI. XVII. Page | 27 f. The subject real estate fully complies with all applicable federal, state, and local environmental regulations and laws. g. The subject fully complies with all applicable zoning ordinances, building codes, use regulations, and restrictions of all types. h. All licenses, consents, permits, or other documentation required by any relevant legislative or governmental authority, private entity, or organization have been obtained, or can easily be renewed for a nominal fee. Unless specifically stated herein, we are unaware of any engineering study made to determine the bearing capacity of the subject land, or nearby lands. It is assumed soil and subsoil conditions are stable and free from features, which would cause site work costs to arise beyond that which is considered typical. It is also assumed existing soil conditions of the subject land have proper load bearing qualities to support the existing improvements, or proposed improvements appropriate for the site. No investigations for potential seismic hazards were made. This appraisal assumes there are no conditions of the site, subsoil, or structures, whether latent, patent, or concealed that would render it less valuable. Unless specifically stated otherwise within this appraisal report, no earthquake compliance report, engineering report, flood zone analysis, hazardous waste, or asbestos analysis was made, or ordered in conjunction with this appraisal report. The client is strongly urged to retain experts in these fields, if so desired. Unless stated herein, the property is assumed to be outside of areas where flood hazard insurance is mandatory. Maps used by public and private agencies to determine these areas are limited with respect to accuracy. Due diligence has been exercised in interpreting these maps, but no responsibility is assumed for misinterpretation. Unless otherwise stated in this report, the existence of hazardous substances, including without limitation asbestos, polychlorinated biphenyl, petroleum leakage, or agricultural chemicals, which may or may not be present on the property, was not called to the attention of the appraiser nor did the appraiser become aware of such during the appraiser’s inspection. The appraiser has no knowledge of the existence of such materials on or in the property unless otherwise stated. The appraiser, however, is not qualified to test for such substances. The presence of such hazardous substances may affect the value of the property. The value opinion developed herein is predicated on the assumption that no such hazardous substances exist on or in the property or in such proximity thereto, which would cause a loss in value. No responsibility is assumed for any such hazardous substances, or for any expertise or knowledge required to discover them.
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Real Estate Appraisal Report 1891 Territorial Road, Benton Harbor, MI XIX. XX. XXI. XXII. XXHI. Page | 28 assumed all planned, in-progress, or recently completed construction complies with the zoning ordinance, and all applicable building codes. In a prospective valuation, it is understood and agreed the appraiser is not responsible for the impact on value, caused by unforeseeable events, before completion of the project. Any exhibits in the report are intended to assist the reader in visualizing the subject property and its surroundings. No responsibility is assumed for cartographic accuracy. Drawings are not intended to be exact in size, scale, or detail. Effective January 26, 1992, the Americans with Disabilities Act (ADA) - a national law, affects all non-residential real estate or the portion of any property, which is non-residential. The appraiser makes no assertion that the subject conforms to the requirements of the ADA. It is possible a compliance survey, together with a detailed analysis of ADA requirements, could reveal the subject is not fully compliant. If such a determination was made, the subject's value may or may not be adversely affected. Since the appraiser has no direct evidence, or knowledge pertaining to the subject's compliance or lack of compliance, this appraisal does not consider possible noncompliance or its affect on the subject's value. Any value opinion herein is based on observations of the subject by the appraiser, a gathering of market information, and an analysis of the gathered information as of the effective value date. Information about the subject property, neighborhood, comparables, or other topics discussed in this report was obtained from sensible sources. In accordance with the extent of research disclosed in the Scope of Work, this information was examined for accuracy, is believed to be reliable, and is assumed reasonably accurate. However, no guaranties or warranties are made for this information. No liability or responsibility is assumed for any inaccuracy which is outside the control of the appraiser, beyond the scope of work, or outside reasonable due diligence of the appraiser. An appraisal report that involves a valuation that is less than the entire fee simple estate is subject to the following limitations. The value reported for such an estate relates only to the fractional interest that constitutes the real property appraised. Moreover, the value of the fractional interest appraised plus the value of all other fractional interests may or may not equal the value of the entire fee simple estate that constitutes the whole. An appraised value that relates to a geographic portion of a large parcel or tract of real estate is subject to the following limitations. The value reported for such geographic portion relates to such portion only, and should not be construed as applying with equal
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Real Estate Appraisal Report 1891 Territorial Road, Benton Harbor, Mi XXV. Page | 29 if the improvements are removed, substantially altered, or the land is utilized for another purpose. Our value opinion involves only the real estate and normal building components, if improvements are involved. No consideration was given to personal property or special equipment, unless specifically stated otherwise.
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Real Estate Appraisal Report 1891 Territorial Road, Benton Harbor, MI Page | 30 Scope of Work According to the Uniform Standards of Professional Appraisal Practice, it is the appraiser's responsibility to develop and report a scope of work that results in credible results that are appropriate for the appraisal problem and intended user(s). Client This appraisal is prepared for the client, Honor Credit Union. Purpose of the Appraisal A statement of the purpose of the appraisal establishes the precise question or problem to be solved for the client and other intended users. The problem to be solved is to estimate the current as is market value. Intended Use Intended use references the manner in which the client and other intended users will utilize the information presented within the appraisal report. It is critical that the intended use is consistent with the purpose of the appraisal. The intended use of this appraisal is for mortgage financing. Intended Users The client may provide the appraiser with additional users of the report, but the appraiser ultimately decides who the intended users are based upon the purpose of the appraisal. A party that receives or might receive a copy of the appraisal report are not necessarily intended users. The appraiser is responsible only to the identified intended users and not all parties that may consider themselves users. This appraisal is intended for the use of the client. No other use or users are intended. Other readers may not use, or rely on any portion of this report without the expressed written consent of J. Carnine & Co. Unauthorized users of this report do so at their own risk. No liability is assumed, expressed, or implied by the appraiser for unauthorized use of this report. Property Identification The subject has been identified by the assessors’ parcel number. Property Inspection The inspection of the property was conducted on 8/26/2025. Observation of the subject
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Real Estate Appraisal Report 1891 Territorial Road, Benton Harbor, Mi Page |31 and building. Ordinarily, appraisers do not determine operability, or the remaining useful life of building systems. An appraiser typically views or observes real estate to determine only general attributes like physical condition of the building as a whole, site topography and access, building size, construction quality, floor plan, and functionality of the property as a whole. No probes, investigations, or studies were made to discover unapparent, adverse physical features. Environmental Risks The appraiser is not an expert in the identification or detection of environmental hazards. | am not qualified to detect the presence of any harmful substances or gases. Unless specifically stated to the contrary, the appraiser has no knowledge about the existence of any environmental hazard on, under, above, or within the subject real estate. No overt evidence of any environmental hazard is apparent to the untrained eye. Additionally, | have not specifically inspected the subject property to determine the presence of any environmental hazard. No effort was made to dismantle or probe the structure to observe enclosed, encased, or otherwise concealed elements for environmental hazards including but not limited to: = Evidence of chemical spills or soil contamination = Settlement or soil subsidence = Underground storage tanks = Nearby off-site uses that pose a hazard = Potential for friable asbestos = Toxic mold = Use of urea-formaldehyde insulation = Fire resistant treated plywood (FRTP) = Radon = Flaking and potentially lead based paint = Presence of Polychlorinated biphenyl (PCB) Flood hazards conditions are detailed elsewhere in this appraisal. Except as enumerated herein, the appraiser was not given the results of any environmental testing on or near the subject property, if any. Neither the inspection nor other normal research suggested any apparent presence of hazardous substances or detrimental environmental conditions. There were no visually apparent signs of unknown substances or environmental hazards observed by the appraiser at the time the subject property was inspected. The presence of any hazard would likely diminish the subject's value. The value estimate in this report assumes there is no hazard of any type affecting the subject real estate. No responsibility is assumed by the
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Real Estate Appraisal Report 1891 Territorial Road, Benton Harbor, MI Page |32 Data Researched Data sources included, yet were not limited to the Internet, governmental agencies, demographic service companies, persons involved with the subject or comparables, appraiser files, other real estate professionals, and/or Multiple Listing Services. All information used herein was obtained from seemingly sensible sources. This information was examined for accuracy, is believed reliable, and assumed reasonably accurate. However, no guaranties or warranties for the information are expressed or implied. No liability or responsibility is assumed by the appraiser(s) for any inaccuracy from any seemingly credible information source. Sales History The subject transferred from Benton harbor Fruit Market Inc May 29, 2025 for a reported price of $550,000. No other recorded arm’s length conveyance of the subject was discovered during the three years preceding this report's effective value date. Current Listing Contracts The subject was not found to be listed in the local or other major data reporting services. No sale or option agreements are now known to be pending. Market Area and Market Conditions A complete analysis of market conditions has been made. The appraiser maintains and has access to comprehensive databases for this market area and has reviewed the market for sales and listings relevant to this analysis. Extraordinary Assumptions USPAP defines an Extraordinary Assumption to be “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 opinion or conclusions”. Extraordinary assumptions presume as fact otherwise uncertain information. In other words, this type assumption involves uncertainty about an underlying premise. An example is a survey that displays a lot size. If the lot size is found to be much smaller, then the value conclusion may be negatively affected. There are no Extraordinary Assumptions for this appraisal. Hypothetical Conditions USPAP defines a hypothetical condition as “a condition, directly related to 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 assume
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Real Estate Appraisal Report 1891 Territorial Road, Benton Harbor, Mi Page |33 is not involved with a hypothetical condition. An essential premise underlying the valuation is known not to exist on the date of value. There are no hypothetical conditions for this appraisal. Development of Highest and Best Use Highest and best use analyses can be categorized into two groups - inferred and fundamental. A fundamental analysis is quantified from broad demographic and economic data such as population and income. Supply is inventoried. Subject specific characteristics are considered. Then, the relationship between supply and demand is weighed to determine a specific highest and best use for the subject. An inferred analysis uses trends and patterns to infer a general highest and best use for the subject. Market dynamics that might be considered are prices, marketing times, rents, vacancy, and listings of similar real estate. Subject specific studies were not made during the appraisal development process. An inferred analysis for the as vacant highest and best use of the subject has been made. Physically possible, legally permissible and financially feasible uses were considered, and the maximally productive use was concluded.. Supplemental Standards Paraphrasing USPAP, Supplemental Standards are requirements issued by governmental agencies, governmental sponsored enterprises, or other entities that establish public policy. These requirements always add to, and do not detract from the RULES and Standard Rules. There are no supplemental standards applicable in this appraisal. Jurisdictional Exceptions A Jurisdictional Exception is an assignment condition, which voids a portion of USPAP that is contrary to law or public policy. When a Jurisdictional Exception applies, only the contrary portion is void. The remainder of USPAP remains in full force and effect. Jurisdiction Exceptions always shrink USPAP, not expand it. There are no jurisdictional exceptions applicable in this appraisal.
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Real Estate Appraisal Report 1891 Territorial Road, Benton Harbor, Mi Page | 34 Valuation Analysis Three basic approaches may be used to arrive at an estimate of market value. They are: 1. The Cost Approach 2. The Income Approach 3. The Sales Comparison Approach Cost Approach The Cost Approach is summarized as follows: Cost New — Depreciation + Land Value = Value Sales Comparison Approach The Sales Comparison Approach compares sales of similar properties with the subject property. Each comparable sale is adjusted for its inferior or superior characteristics. The values derived from the adjusted comparable sales form a range of value for the subject. By process of correlation and analysis, a final indicated value is derived. Income Approach The Income Approach converts the anticipated flow of future benefits (income) to a present value estimate through capitalization and or a discounting process. Approaches Utilized The cost approach was applied as The subject is a unique special use property and this approach can be useful.. The sales approach was not applied as there is inadequate market data to develop a value estimate for this approach.. The income approach was applied as the subject is an income producing property and there is adequate data to develop a value estimate with this approach.. Report Type This is an Appraisal Report as defined by Uniform Standards of Professional Appraisal Practice under Standards Rule 2-2(a). This format provides a summary description of the appraisal process, the subject, and market data and valuation analysis.
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Real Estate Appraisal Report 1891 Territorial Road, Benton Harbor, Mi Page |35 Market Value Definition Forming an opinion of market value is the purpose of many real property appraisal assignments, particularly when the client’s intended use includes more than one intended user. The conditions included in market value definitions establish market perspectives for development of the opinion. These conditions may vary from definition to definition but generally fall into three categories: 1. the relationship, knowledge, and motivation of the parties (i.e., seller and buyer); 2. the terms of sale (e.g., cash, cash equivalent, or other terms); and 3. the conditions of sale (e.g., exposure in a competitive market for a reasonable time prior to sale). Market value is described in the Uniform Standards of Professional Appraisal Practice (USPAP) as follows: A type of value, stated as an opinion, that presumes the transfer of a property (i.e., a right of ownership or a bundle of such rights), as of a certain date, under specific conditions set forth in the value definition that is identified by the appraiser as applicable in an appraisal. (USPAP, 2020-21 ed.) USPAP also requires that certain items be included in every appraisal report. Among these items, the following are directly related to the definition of market value: = |dentification of the specific property rights to be appraised. = Statement of the effective date of the value opinion. = Specification as to whether cash, terms equivalent to cash, or other precisely described financing terms are assumed as the basis of the appraisal. If the appraisal is conditioned upon financing or other terms, specification as to whether the financing or terms are at, below, or above market interest rates and/or contain unusual conditions or incentives. The terms of above—or below—market interest rates and/or other special incentives must be clearly set forth; their contribution to, or negative influence on, value must be described and estimated; and the market data supporting the opinion of value must be described and explained.
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Real Estate Appraisal Report 1891 Territorial Road, Benton Harbor, MI Page | 36 Thus, the following definition of market value is used by agencies that regulate federally insured financial institutions in the United States: The most probable price that a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and the 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 best interests; = Areasonable 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. (12 C.F.R. Part 34.42(g); 55 Federal Register 34696, August 24, 1990, as amended at 57 Federal Register 12202, April 9, 1992; 59 Federal Register 29499, June 7, 1994)
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Real Estate Appraisal Report 1891 Territorial Road, Benton Harbor, MI Page |37 Regional Market The geographic characteristics of real estate markets differentiate them from more efficient financial markets. The goods or services in an efficient market area are essentially homogenous and readily substituted for one another. Real estate is not homogenous, but rather heterogenous, since no two parcels are physically identical. This underscores the importance of delineating the market for real estate. The applicable economy can be divided into two major components: households and businesses. Households account for the productive resources of land, labor, capital, and entrepreneurship, which are sold to the business community in return for income. The business sector employs these resources to produce goods and services. The economic base of a community strongly influences the land use activities of the area. The local economy is key to understanding real estate markets and the source data supply and demand projections for property uses. Determination of direction and strength of market forces such as supply and demand, in addition to prices, costs, and values begin with the economic base indicators. Determining the boundaries for the region, while identified by geography, was made with additional and considerable interest in linkages and trade expectations. The regional market for this appraisal includes the Indiana counties of St. Joseph, Elkhart, LaGrange, Marshall, Kosciusko, and the Michigan Counties of Berrien, Cass and St. Joseph. This area encompasses 3,491 square miles and is comprised of 19 Cities, approximately 50 towns, and 120 townships. The following demographics are derived from various sources and represent the most up to date information, but certain elements may have lagging indicators. Additionally, there are periods of economic decline, uncertainty or rapid expansion that the demographic information may not capture readily. This following information is relied upon and
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Real Estate Appraisal Report 1891 Territorial Road, Benton Harbor, MI Page | 38 POPULATION The economic base consists of the industries and economic activities that generate employmentand income for the area. Generally, population growth and decline in an area is directly linked to employment opportunities. As jobs increase, the area attracts more residents, which further fuels demand for housing, services, and infrastructure. Conversely, a decline in employment opportunities can lead to population shrinkage as people move elsewhere in search of work. The total market population is currently estimated to be approximately 914,796. Based upon a growth rate of - 0.13% the population is expected to decrease to 908,921 by 2028. If the market population falls to 908,921 by 2028, it reflects an ongoing challenge that could impact various sectors such as the local economy, housing market and public services. This area continues to lag behind Indiana (0.16%) and Michigan (-0.05%). And the overall US growth rate of 0.30% highlights a stark contrast to what is happening locally. Population 2023 Total Population 914,796 2023 Household Population 893,778 2023 Family Population 722,077 2028 Total Population 908,921 2028 Household Population 887,903 2028 Family Population 715,372 Population Change £20,000 810,000 500,800 890,000 880,500 870,600
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Real Estate Appraisal Report 1891 Territorial Road, Benton Harbor, MI Page | 39 EDUCATION The market has excellent secondary educational opportunities as it is home to over 20 universities, colleges and technical. Having a wide array of post-secondary institutions can significantly bolster a region’s economic and social development. The following represents the diversity of upper education within the region and proximate to the region. Enrollment Tuition Tuition Change from 2023 Western Michigan University 13,860 $15,928 13% University of Notre Dame 8,968 $62,693 1% Indiana University South Bend 3,915 $8,179 4% Lake Michigan College 2,127 $7,500 10% Andrews University 1,586 $33,710 15% Southwestern Michigan College 1,807 $7,510 21% Grace College 1,382 $28,942 -1% Saint Mary's College 1,459 $51,430 -8% Kalamazoo College 1,210 $58,614 7% Bethel University 1,181 $33,320 2% Goshen College 718 $38,890 0% Marian University-Ancilla 227 $19,850 6% Holy Cross College 434 $35,500 15% Undergraduate in-state The education attainment of a workforce plays a significant role in determining the types of employees available for job diversity. This includes the range of skills, qualifications and knowledge workers bring to the table, therefore influencing the overall capability and resourcefulness within the labor market. Education Levels
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Real Estate Appraisal Report 1891 Territorial Road, Benton Harbor, MI Page | 40 INCOME The median household income for the market is at $66,205 which represents approximately 76% of the national median household income of $82,410. This discrepancy highlights the differences in cost-of-living, economic opportunities and industrialization levels. The per capita income of $35,530, which is considerably lower than the US rate of $47,525. However, despite the lag in median household and per capita income, the market boasts a stronger median net worth. The median net worth is $214,642, which surpasses the national average of $192,900. Market Indiana Michigan us. Median Household Income ~~ $66,205 $70,604 $71,476 $82,410 Per Capita Income $35,530 $37,705 $40,752 $47,525 Median Net Worth $214,642 $215,448 $245,783 $192,900 When comparing income distribution between the market and the state, the market area demonstrates a distinct trend. The market exhibits a higher concentration of residents in the lower income brackets, indicating that a large proportion of its population earns less than the state average. Conversely, the market has fewer residents in the higher income brackets compared to the rest of Indiana. This implies that there are not as many high- income earners which may impact the overall economic dynamic and consumer spending with the area. Household income is distributed for the market area as follows. HOUSEHOLD INCOME 5200,000+¢ 200,00 $150,00 $100,00 575,00 550,00 $35.0 3250 «515,00 00% 10 20 30 40 58 60 70 80 90 100 110 120 130 140 150 160 17.0 180%
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Real Estate Appraisal Report 1891 Territorial Road, Benton Harbor, MI HOUSING STATS In assessing the cost of living, the median home value in the market area stands at $242,627. Although this figure is substantial, it remains significantly lower than the national median home value of $338,100. The annual average expenditure on mortgage payments and basic living necessities for the market is $10,813, which is around 80% of the $12,922 annual average spending at the national level. Similarly, the average contract rent is $940, which is lower than the national average contract rent of $1,430. These indications all point to a favorable cost of living for the market area. Market Indiana Michigan us Median Home Cost $242,627 $221,600 $218,700 $338,100 Average Rent $940 $980 $1,100 $1,430 Overall 83.6 83.7 91.5 100.0 Grocery 93.1 92.9 934 100.0 Health 93.5 94.4 84.8 100.0 Housing 68.9 63.8 71.2 100.0 Utilities 93.1 97.2 100.1 100.0 Transporation 82.2 85.4 1154, 100.0 Misc 86.7 102.0 95.9 100.0 Another indication of economic strength and population wealth is the ratio of owner occupation to renter occupation. Traditionally home-ownership has correlated to disposable income, creation of wealth, and lower crime rates. Homeownership is also a function of many factors to include interest rates, construction costs, types of employment opportunities, and job security. The market area housing is approximately 27% renter occupied which is below the national rate of 35%. For the rental market and multifamily housing in general the amount of rent achievable dictates the supply of product particularly when it comes to new construction. RENT DISTRIBUTION 16 Page |41
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Real Estate Appraisal Report 1891 Territorial Road, Benton Harbor, MI LABOR FORCE The market area boasts a dynamic economic landscape with over 30,000 businesses operating within its boundaries. These businesses collectively employ approximately 460,000 individuals, reflecting a robust job market and diverse employment opportunities for residents. Currently, the unemployment rate within the market is 4.1%, which is slightly lower than the national unemployment rate of 4.3%. This marginally lower unemployment rate suggests a relatively healthier local economy with more job opportunities compared to the national average. Within the market, the manufacturing industry represents the highest level of employment with mostly driven by the Elkhart market. EMPLOYEMENT BY OCCUPATION 0,01 50,01 40,0! 30,0 20,01 10,01 0 & oF JE oF & & 5 # & & F ry & ra & FF * R & + & Er ry & « & & FS & & & & OF LABOR FORCE COMMUTING TRENDS A portion of the work population commutes into the market area as demonstrated by the difference in daytime population previously presented. Likewise, a certain segment ofthe employee population leaves the market for employment. The data below provides insight into the travel time employees travel for employment. AVERAGE TRAVEL TIME TO WORK 90+ min 60-83 min 20-24 min 15-19 min 10-14 min somin. Page | 42
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Real Estate Appraisal Report 1891 Territorial Road, Benton Harbor, MI TRANSPORTATION The connectivity of air, rail and highway connects the region to various regional and national markets allowing the market to be second in the nation for distribution. Companies that need quick delivery can reach 14.3 % of the nation, or 40.2 million people, in one day. South Bend Airport The area is served by the South Bend Regional Airport which is the second busiest airport in the state of Indiana, in terms of commercial traffic. The SBA is one of the few multi-madel transportation facilities in the U.S. that provides air, bus and rail service at one terminal. The multi-model terminal services over one million air, rail and bus passengers each year. The commercial airlines are currently Allegiant Air, American Airlines, Delta and United. Cargo airlines include FedEx Express, FedEx Feeder and UPS Airlines. Average Airline Enplanements 85,000 30,000 25,000 20,000 15,000 Page |43
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Real Estate Appraisal Report 1891 Territorial Road, Benton Harbor, MI Page | 44 Rail Rail service is abundant in the region as there are three class 1 railroads running within it. Canadian National services run from Canada through the region and on to the Gulf of Mexico. CSX runs Chicago to the eastern United State. Norfolk Southern links New York with Chicago. Elkhartis home to Robert Young Rail Yard which is the second largest freight classification yard in the world. The South Shore Railroad provides daily transportation and connects with the Metra to provide additional service. Amtrak provides two daily trips to New York, Boston and Washington, and service to other destinations nationwide. The South Bend Public Transportation Corporation, Coach USA, Greyhound, Hoosier Ride and Interurban Trolley provide local and nationwide bus service. Ports The Port of Indiana at Burns International Harbor nearby to the east provides continual barge access to the Midwest. Port of Chicago is located 80 miles west of South Bend and allows deep-draft commercial vessels. These ports connect Norfolk Southern rail and the highways to the Atlantic Ocean via Lake Michigan. Highways There are several major highways through the region, the largest being Indiana Toll Road (I- 80 / 1-90) which runs 157 miles across Northern Indiana. US Highway 31 links the area to Michigan and Indianapolis and also connects to I-94, a direct route to Chicago and Detroit.
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Real Estate Appraisal Report 1891 Territorial Road, Benton Harbor, MI Page | 45 Neighborhood Analysis The immediate market area has been identified by, and presented in the following map which measures, drive times of five, ten, and fifteen minutes from the subject. The following trends are specifically taken from the fifteen-minute drive time but all three are considered in estimating supply and demand. Rgw Paw Lake Harford ! wheel re ari, |
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Real Estate Appraisal Report 1891 Territorial Road, Benton Harbor, MI Page | 46 15 minutes -0.32% Median Age 2024-2029 Population Growth Rate Average Household Size $64,261 20,019 8,926 Median Household Income 2023 Owner Occupied Housing 2023 Renter Occupied Housing Units (Esri) Units (Esri) , Population es 10 minutes minutes 2023 Total Population 7,063 30,826 67,325 2023 Household Population 7,012 30,584 66,764 2023 Family Population 5611 23,268 52,085 2028 Total Population 6,947 30,338 66,254 2028 Household Population 6,896 30,095 65,694 2028 Family Population 5494 22,770 50,991 Population Change 74,486
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Real Estate Appraisal Report
1891 Territorial Road, Benton Harbor, MI
Page
| 47
5 minutes
nutes
15 minutes
ume 16a, od
2023 Per Capita Income
$15,608
$30,367
$40,804
$41,134
$45,360
2023 Median Household Income
$33,255
$43,392
$64,261
$72,645
$81,624
2023 Average Household Income
$40,597
$71,608
$94,921
$99,765
$116,179
2028 Per Capita Income
$16,970
$34,078
$45,939
$46,149
$50,744
2028 Median Household Income
$35,150
$49,466
$70,193
$80,812
$92,476
2028 Average Household Income
$43,763
$79,265
$105,511
$110,214
$128,612
HOUSEHOLD INCOME
24%
5 minutes
10 minutes
15 minutes
® <$15,000
$25,000
$35,000
$50,000
@$75000
@ $100,000
@ $150,000
© $200,000
$200,000+
ANNUAL SPENDING
TraveH
Health Care
Education
Entertainment/Re{
Meals at Restaurants/Othpr
Personal Care Prods
Retail Goods]Page 57
Real Estate Appraisal Report 1891 Territorial Road, Benton Harbor, MI Page |48 HOUSEHOLDS 5 minutes 10 minutes 15 minutes 2000 Total Households 3,461 14,139 29,372 31% 2010 Total Households 2,948 13,264 28,778 69% 2023 Total Households 2,717 13,160 28,945 Owner Occupied HUs 2028 Total Households 2,697 13,128 28,853 @ Renter Occupied HUs HOUSING STATS (S| HES = $263,393 £10 $720 Median Home Value Average Spent on Mortgage & Median Contract Rent Basics RENT DISTRIBUTION 20% 181 16 14
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Real Estate Appraisal Report 1891 Territorial Road, Benton Harbor, Mi EDUCATION 5 minutes 10 minutes Page | 49 No High School Diploma 22.8% High School Graduate 40.2% Some College 27.0% Bachelors/Grad/Prof Degree 10.0% WORKFORCE hhh WHITE COLLAR BLUE COLLAR SERVICES TRANSPORTATION TO WORK 12.5% 32.3% 33.1% 22.2% 65% 22% 13% 0.4% 2.5% PUBLIC TRANSPORTATION ~~ WALKED TO WORK AVERAGE TRAVEL TIME TO WORK 60-89 min 45-59 min 40-44 min 35-39 min 30-34 min, 2529 min, 20-24 min, 15-19 min, | | | | | 6.9% CARPOOLED States A Michigan urfifag/Eaed 8.0% 7.4% 9.3% 26.6% 28.2% 26.5% 325% 30.9% 27.0% 32.9% 33.5% 37.2% UNEMPLOYMENT RATE 0.2% BIKE TO WORK 15 minutes
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Real Estate Appraisal Report 1891 Territorial Road, Benton Harbor, MI Page | 50 (# 12: 73,435 53% 3,033 TOTAL DAYTIME POPULATION pAYTIME WORKER % TOTAL BUSINESSES MEDIAN AGE EMPLOYEMENT BY OCCUPATION Managemen) Office/Admi Sale: Productiol Health Practice Transportation/Movil Education/Libra Food Preparatio Business/Financi Construction/Extracti Computer/Mathematiq Architecture/Engine Health Suppo Building Maintenan Maintenance/Repa Social Servi Arts/Entertainment/R al) FarmiFish/Fors 0 200 400 600 800 1,000 1,200 1,4001,600 1,800 2,0002,200 2,400 2,6002,800 3,000 3,2003,400 3,600 3,800 OCCUPATION BY INDUSTRY 5 minutes 10 minutes 15 minutes Ag/Forestry/Fishing 34 109 301 Mining/Oil & Gas 0 3 52 Construction 215 664 1910 Manufacturing 462 2,879 6,721 Wholesale Trade 46 133 403 Retail Trade 266 1,782 3,483 Transportation & Warehousing 139 481 844 Utilities 41 370 1,150 Information 14 175 425 Finance & Insurance 140 523 1211 Real Estate & Leasing 4 159 535 Prof & Tech Services 110 479 1,719 Management of Companies 17 48 113 Admin & Waste Mgmt 48 503 1,180 Educational Services 92 1,003 2,781
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Real Estate Appraisal Report 1891 Territorial Road, Benton Harbor, MI Page | 51 Property Description Site The appraiser has not been provided a survey or title work and therefore the following information is taken from observations at the time of inspection. Additional information was derived from public records such as deeds, assessor records, zoning maps, FEMA maps, topography maps and GIS systems, all of which may not be as accurate as more professional services. For this report the following working definitions apply to how the site has been measured Usable Land: The land area available to be utilized for development. This area includes satisfactory soil conditions, vertical separation, and horizontal separation(s). Unusable Land: Land not beneficial to development or highest and best use due to a feature such as drainage ditches, steep slopes, environmental damage, or soil conditions. 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. 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. Easement: The right to use another's land for a stated purpose.
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Real Estate Appraisal Report 1891 Territorial Road, Benton Harbor, MI Site Description Page | 52 Number of Parcels Total Acreage Useable Acreage Excess Land Acreage Surplus Land Acreage View Access Visibility Topography Shape Soil Conditions Utilities Electric Water Sewer Gas Zoning Classification Zoning Compliance 0.00 Typical Typical Typical The subject has level topography at grade and no areas of wetlands. Irregular The soil conditions observed at the subject appear to be typical of the region and adequate to support development. Public Municipal water Municipal sewer Public Natural Gas IL, Light Industrial Yes
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Real Estate Appraisal Report 1891 Territorial Road, Benton Harbor, MI Flood Map Panel Number Map Date Classification Flood Statement Easement / Encumbrance Environmental Statement Legal Description The subject has been identified by Page |53 26021C0106C 4/17/2006 X The subject is outside the 500 year flood plain. The appraiser is not an expert in this matter and is reporting data from FEMA maps. There are no known adverse encumbrances or easements. Please reference Limiting Conditions and Assumptions. There are no known adverse environmental conditions on the subject site. Please reference Limiting Conditions and Assumptions. the assessors’ parcel number.
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Real Estate Appraisal Report 1891 Territorial Road, Benton Harbor, MI Page | 54 Location Map Subject Location Map Millburg Culby;s Landscape (a) 7 Vd Supplies | ye ( Ld Fair Plain i k Meijer && jer © / #
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Real Estate Appraisal Report 1891 Territorial Road, Benton Harbor, MI Page |55 Plat Map
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Real Estate Appraisal Report 1891 Territorial Road, Benton Harbor, MI Page | 56 Flood Hazard Map CoreLogic | RiskMeter 1891 TERRITORIAL RD BENTON HARBOR, MI 49022-8035 LOCATION ACCURACY: @EETIETD Flood Zone Determination Report: Flood Zone Determination: OUT COMMUNITY 260031 PANEL 0106C PANEL DATE April 17, 2006 MAP NUMBER 26021C0106C © X5000rB Zone I AZone = V Zone | DZone 24; Floodway
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Real Estate Appraisal Report 1891 Territorial Road, Benton Harbor, Mi Page | 57 Improvements Description Number of Buildings 22 Total GBA 78,640 SF Land To Building Ratio 10.75 The following graphic lays out the buildings as numbered by the appraiser with the description and estimates to follow.
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Real Estate Appraisal Report 1891 Territorial Road, Benton Harbor, Mi Page | 60 Property Analysis Depreciation of Improvements Depreciation may be defined as any loss of value from any cause. There are three general areas of depreciation: physical deterioration, functional obsolescence and external obsolescence. Depreciation may be curable or incurable, the test being that money spent to cure the depreciation be gained in value. If the depreciation costs more to fix than will be gained in value, then the depreciation is considered incurable. Physical Deterioration This results from deterioration from aging and use. This type of depreciation may be curable or incurable. For this appraisal the economic age-life method has been utilized. In this method depreciation is estimated by calculating the ratio of effective age of the property to the economic life and applying this ratio to the property’s cost new. Effectiveage X Total Cost = Depreciation Economic life Economic Life Economic life is the period in which improvements contribute to property value. Several things can happen at the end of economic life to include improvements can be razed for the highest and best use of the land, converted for adaptive reuse, or rehabilitated to market standards. The estimate of economic life recognizes that buildings are remodeled, converted to new use, or torn down before they physically wear out. In the case of much older structures the quality of construction may result in the cost to raze exceeding the resultant value in doing so. Quality and method of construction, original intended utility, and current use are all factored into the estimate of economic life. Tables for economic life from Marshal & Swift Valuation Service may have been utilized in this estimate. For the subject an overall estimated economic life of 26.51 years has been estimated based upon weighted average of the improvements. Actual Age versus Effective Age Effective age is the age indicated by the condition and utility of the subject and is estimated by the appraiser. The quality of original materials, building design, and maintenance and
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Real Estate Appraisal Report 1891 Territorial Road, Benton Harbor, Mi Page | 61 It is important to note that repairs, replacements and maintenance to the subject can not only serve to reduce the effective age but by doing so extends the economic life as well. The overall effective age is comprised of three categories: deferred maintenance, short lived items, and long-lived items. Deferred maintenance encompasses items that can be immediately addressed and are considered curable. For most properties deferred maintenance involves relatively minor items that can be readily fixed like broken gutters, roof leaks, wall repairs or painting needed, flooring that needs replaced, or HVAC needing repaired. These items need to be replaced for the building to continue to function and maintain value. Short lived items are items that don’t necessarily need to be repaired on the effective date but will need attention in the near future. An HVAC that is operating but is near the end of its service life, or a 20-year-old roof that doesn’t necessarily leak but shows wear are a couple examples of this component. Long lived items are items that are not usually replaced in the life of the structure like framing, roof structure, foundation, and underground piping. These things may need repair during the life of the building and in that event may or may not be feasible to cure. All three of these elements are considered for the subject when estimating the effective age. The improvements have several issues of deferred maintenance and need significant repairs. The features of the building are outmoded and functional utility is somewhat diminished due to the condition. For the subject an overall estimated effective age of 20.46 years has been estimated based upon weighted average of the improvements. Remaining Economic Life Remaining economic life is the estimated period over which the existing improvements are expected to contribute to the value of the subject with no intervention of repair, remodel, maintenance or other previously described intervention to reduce effective age and extend economic life. It is most simply measured by deducting the effective age from the economic life. For the subject an overall estimated remaining economic life of 6.06 years has been estimated based upon weighted average of the improvements. Functional Obsolescence This results from a lack of utility or desirability due to design or market perception of the
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Real Estate Appraisal Report 1891 Territorial Road, Benton Harbor, Mi age | 62 Assessment and Taxes Real estate taxes are a primary mechanism used by local government to gather the monies needed to fund operations. The primary method of determining assessed value remains the cost approach which may estimate values the market cannot bear. Therefore it is important to make a comparison of the assessed value to the estimate of value in this report. If the assessed value is considerably lower there is an immediate enhancement of value yet this could be offset by the perceived risk of an increased liability that may occur in the future. If the assessed value is too high the property value may be diminished for operating costs over comparable properties. The subject's assessed value and corresponding taxes are summarized below. These figures do not include any furniture, fixtures or equipment, nor do they consider personal property or inventory. Taxing Authority Berrien County Assessment Year 2023 pay 2024 Tax Parcel ID Total AV Tax Rate Taxes 11-54-0016-0302-09-9 $796,100 $22.62 $18,011.05
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Real Estate Appraisal Report 1891 Territorial Road, Benton Harbor, MI Page | 63 Highest and Best Use Highest and best use may be defined as "The reasonably probable and legal use of vacant land or an improved property, which is physically possible, appropriately supported, financially feasible, and results in the highest value. The four criteria the highest and best use must meet are legally permissible, physically possible, financially feasible, and maximum productivity." In appraisal practice, there are potentially two types of highest and best use. The first is highest and best use of land as though vacant. If a building already exists, the highest and best use as improved is analyzed. Determining an opinion of whether the existing building should be retained as it is, demolished, remodeled, renovated, or converted to alternate use are all appropriate questions for the analysis of highest and best use as improved. Current usage may or may not be different from the property's long term, highest and best use. This appraisal employs an inferred market analysis, not a fundamental analysis to determine the highest and best use for the subject. A fundamental analysis forecasts demand from broad demographic and economic data like population and income. Existing supply is inventoried and a relationship of supply and demand is weighed to determine net demand. An inferred analysis is based on local trends and patterns from which inferences are made. Sales, listings, marketing intervals, and/or price change for other similar land infer there is adequate demand for the subject parcel at a price level congruous with this data. For the subject, no fundamental analysis or specific supply and demand studies have been made. The concept of Highest and Best Use is based upon four major criteria, which are summarized below: Legally Permissible The use must be legal or probable. That is, the use must conform to existing zoning restrictions, or there must be a reasonable likelihood a rezoning or variance may be granted. Physically Possible Land may be developed with different uses. Only those uses, which produce a positive net return over time, are deemed financially viable. This use must not depress surrounding property values.
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Real Estate Appraisal Report 1891 Territorial Road, Benton Harbor, MI Page | 64 Financially Feasible Land may be developed with different uses. Only those uses, which produce a positive net return over time, are deemed financially viable. This use must not depress surrounding property values. Maximally Productive Of all the uses that fulfill the first three tests, there is only one use, which produces the greatest return. This single use represents the property's Highest and Best Use. Supply and demand are constantly fluctuating, so it is common for a property’s Highest and Best Use to change. Highest and Best Use Conclusion Highest and Best Use As Though Vacant The subject is zoned for industrial use. Nearby lands are used for industrial, neighborhood service businesses, public and residential uses. In this vicinity, industrial land prices customarily rival prices for other commercial land. Based upon these facts and other economic factors, the subject’s highest and best use as though vacant is industrial usage consistent with zoning and neighboring uses. Highest and Best Use as Improved Two questions must be answered in this analysis. When the value of land, as though vacant, exceeds the value of the land and building together, then the structure should be razed. Should the subject building be retained or demolished? If the structure should be kept, is it economically viable to remodel, alter in size, renovate, or convert it to an alternate use? Demand for vacant land is very slim. Data herein proves the improvements still contribute to the property’s total worth. The cost of demolishing the structures could greatly reduce the underlying land value that would be recovered. As such, there is no economic incentive to raze the building thus making the land ready for redevelopment. The existing improvements are compatible with nearby uses. Local prices and rents do not justify major building alterations. Therefore, the existing improvements contribute to the property's market worth. Hence, the highest and best use of subject property “as improved’ is continuation of its present use.
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Real Estate Appraisal Report 1891 Territorial Road, Benton Harbor, MI Page | 65 Valuation Methodology In appraisal practice, an approach to value is included or omitted based on its applicability to the property type being valued and the quality and quantity of information available. Cost Approach The Cost Approach is based upon the proposition that the informed purchaser would pay no more for the subject than the cost to produce a substitute property with equivalent utility. This approach is particularly applicable when the property being appraised involves relatively new improvements which represent the highest and best use of the land or when relatively unique or specialized improvements are located on the site and for which there exist few sales or leases of comparable properties. Sales Comparison Approach The Sales Comparison Approach utilizes sales of comparable properties, adjusted for differences, to indicate a value for the subject. Valuation is typically accomplished using physical units of comparison, such as price per square foot, or economic units of comparison such as gross rent multiplier. Adjustments are applied to the physical units of comparison derived from the comparable sale. The unit of comparison chosen for the subject is then used to yield a total value. Income Capitalization Approach The Income Capitalization Approach reflects the subject’s income-producing capabilities. This approach assumes that value is created by the expectation of benefits to be derived in the future. Specifically, the amount an investor would be willing to pay to receive an income stream plus reversion value from a property over a period of time is estimated. The two common valuation techniques associated with the Income Capitalization Approach are direct capitalization and the discounted cash flow (DCF) analysis. Capitalization is the process of converting income into a capital sum. Often this is accomplished with direct capitalization where a single year’s net income is translated into a value indication via an overall cap rate. The cap rate reflects risk - the greater the risk, the greater the rate. Implicit within the rate are all investor expectations about all investment aspects including income generation, value growth, taxation, and general market risk. A single year’s net income does not depict change. When risk significantly changes during the ownership period or the income pattern is unusual, it is best to consider a series of cash flows. The Principle of Anticipation holds a real estate acquisition is, in effect, a trading of present
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Real Estate Appraisal Report 1891 Territorial Road, Benton Harbor, Ml Page | 66 Analyses Applied The cost approach was applied as The subject is a unique special use property and this approach can be useful.. The sales approach was not applied as there is inadequate market data to develop a value estimate for this approach.. The income approach was applied as the subject is an income producing property and there is adequate data to develop a value estimate with this approach.. Final Reconciliation The appraisal process concludes with the Final Reconciliation of the values derived from the approaches applied for a single estimate of market value. Different properties require different means of analysis and lend themselves to one approach over the others. The three approaches are both independent and interdependent. Each approach is independently processed, yet many of the same variables, like building size, are used throughout all three methods; hence the interdependence.
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Real Estate Appraisal Report 1891 Territorial Road, Benton Harbor, Ml Page | 67 Cost Approach The Cost Approach is based on the principle of substitution - that a prudent and rational person would pay no more for a property than the cost to construct a similar and competitive property, assuming no undue delay in the process. The Cost Approach tends to set the upper limit of value before depreciation is considered. The applied process is as follows: = Estimate the land value according to its Highest and Best Use = Estimate the replacement cost of the building and site improvements. = Estimate the physical, functional and/or external depreciation accrued to the improvements. = Sum the depreciated value of the improvements with the value of the land for an indication of value. Land Value Six basic approaches may be used to arrive at an estimate of land value. They are: 1. Sales Comparison Approach This approach compares sales of similar properties with the subject property. Each comparable sale is adjusted for its inferior or superior characteristics. The values derived from the adjusted comparable sales form a range of value for the subject. By process of correlation and analysis, a final indicated value is derived. 2. Market Extraction Estimates land values from sales of improved properties by deducting an estimated depreciated cost of the improvements from the total sales price to indicate a residual land value. Least subjective when the contributing value of the improvements is small. 3. Allocation Ratios of land value to total value is extracted from comparable sales and applied to the subject property total estimated value to estimate the subjects land value. This is most commonly utilized in residential valuation but can be used in commercial applications when land values are scarce and some estimate needs to be made.
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Real Estate Appraisal Report 1891 Territorial Road, Benton Harbor, Mi Page | 68 5. Ground Rent Capitalization Market derived capitalization rate is applied to subject ground rent. Subject’s ground rent would need to be compared to market ground rent and property rights differences accounted for. 6. Subdivision Development Direct and indirect development costs are deducted from estimated lot sale revenues over an estimated absorption period. These net proceeds are discounted to present value at a discount rate. Thisis only applicable to land that either is divided into, or the highest and best use suggests that it be divided into, lots for sale. To estimate the subject land value the sales comparison approach was utilized. Sales Comparison Approach — Land Valuation The Sales Comparison Approach is based on the premise that a buyer would pay no more for a specific property than the cost of obtaining a property with the same quality, utility, and perceived benefits of ownership. It is based on the principles of supply and demand, balance, substitution, and externalities. The following steps describe the applied process of the Sales Comparison Approach. The market in which the subject property competes is investigated; comparable sales, contracts for sale and current offerings are reviewed. The most pertinent data is further analyzed and the quality of the transaction is determined. The most meaningful unit of value for the subject property is determined. Each comparable sale is analyzed and where appropriate, adjusted to equate with the subject property. The value indication of each comparable sale is analyzed and the data reconciled for a final indication of value via the Sales Comparison Approach. Land Comparables We have researched numerous land sales and have selected 5 comparables for this analysis; these are documented on the following pages followed by a location map and analysis grid. All
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Real Estate Appraisal Report 1891 Territorial Road, Benton Harbor, MI Page | 69 Land Sale Comparable 1 Property Type Industrial Sale Date February 26, 2025 Address 1829 Territorial Road Sale Price $29,900 County Berrien Price / Acre $14,950 City, State Benton Harbor, MI Latitude 42.124 Longitude -86.414 Site Sale Data Acres 2.000 Grantor Vacant Land Now, LLC Shape Rectangle Grantee Bladimir Pedroza Topography Level Sale Conditions Normal Utilities Municipal Financing Conv Zoning Industrial Property Rights Fee Simple Tax ID 11-03-0016-0017-11-1 Comments Transferred 2/12/2025 for $10,000 from Betty Scheeringa to Vacant Land Now, LLC Record Number 1046
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Real Estate Appraisal Report 1891 Territorial Road, Benton Harbor, Ml Page | 70 Land Sale Comparable 2 Property Type Commercial Sale Date August 28,2024 Address 1950 Oak Street Sale Price $420,500 County Berrien Price / Acre $10,000 City, State Niles, MI Latitude 41.830 Longitude -86.226 Site Sale Data Acres 42.050 Grantor ML Developers, LLC Shape Irregular Grantee City of Niles Topography Level Sale Conditions Normal Utilities Municipal Financing Conv Zoning Commercial Property Rights Fee Simple Tax ID 11-14-0025-0003-06-0 Comments Zoned commercial with the land use as business. There is municipal water and sewer at the road to connect. Record Number 912
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Real Estate Appraisal Report 1891 Territorial Road, Benton Harbor, MI Page |71 Land Sale Comparable 3 Property Type Agricultural-Undeveloped Sale Date April 17, 2025 Address 3510 Emman Road Sale Price $182,000 County Berrien Price / Acre $10,139 City, State Benton Harbor, Ml Latitude 42.175 Longitude -86.420 Site Sale Data Acres 17.950 Grantor Timbul & Ellen Tambunan Shape Irregular Grantee Aaron Baker Topography Level Sale Conditions Normal Utilities None Financing Conv Zoning Agriculture Property Rights Fee Simple Tax ID 11-10-0029-0002-00-1 Comments Record Number 1089
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Real Estate Appraisal Report 1891 Territorial Road, Benton Harbor, MI Page |72 Land Sale Comparable 4 Property Type Agricultural-Undeveloped Sale Date June 25,2025 Address 777 Biastock Road Sale Price $295,000 County Berrien Price / Acre $15,617 City, State Benton Harbor, MI Latitude 42.127 Longitude -86.304 Site Sale Data Acres 18.890 Grantor Daniel & Carla Lafond Shape Irregular Grantee Anne Marie McCormack Topography Level Sale Conditions Normal Utilities Municipal Financing Conv Zoning Agriculture Property Rights Fee Simple Tax ID 11-01-0017-0022-08-0 Comments Record Number 1088
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Real Estate Appraisal Report 1891 Territorial Road, Benton Harbor, MI Page |73 Land Sale Comparable 5 Property Type Commercial Sale Date June 10,2024 Address 1713 Winn Road Sale Price $72,000 County Berrien Price / Acre $10,860 City, State Niles, MI Latitude 41.871 Longitude -86.284 Site Sale Data Acres 6.630 Grantor David Flock Shape Irregular Grantee Saim Burcin Kaplanglu Topography Level Sale Conditions Normal Utilities Well/Septic Financing Conv Zoning Commercial Property Rights Fee Simple Tax ID 11-14-0009-0020-07-0 Comments Access on both Old US 31 and East Winn Road Record Number 913
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Real Estate Appraisal Report 1891 Territorial Road, Benton Harbor, Mi Page |75 Analysis Grid Ideally if all comparable properties are identical to the subject no adjustments would be required. However, this is rarely the case, especially for non-residential properties. After the applicable sales information has been collected and confirmed it can be organized in a variety of ways. The most convenient and commonly used method is to arrange the data in a market data grid like the one on the following page. Each important difference between the comparable and the subject considered to affect property value is considered an element of comparison. Each element is adjusted using qualitative or quantitative techniques. Adjustments for property rights, financing, conditions of sale, expenditures post sale and market conditions are made first to derive an estimated fair price for each comparable. Then adjustments to differences of location, physical and dissimilarity are made for a final adjusted indicated price per unit. Property Rights Agreements or laws create partial interests in real estate. If the interest conveyed for a comparable sale is different from the interest being appraised, then a property rights adjustment is necessary. A common adjustment of this type compensates for a lease that disfavors ownership, and negatively affects value. Unless stated otherwise, property rights are virtually the same for the subject and all cited conveyances and thus no adjustments are necessary for this element of comparison. Financing Non-market financing is a common technique used to finance the acquisition of real estate for various reasons. When non-market financing is used, the financing is typically favorable to the buyer and the sale price is usually inflated. The escalated price can be envisioned as a composite of real estate, and advantageous financing terms. Since value created by financing is not real property, the contribution of the advantageous financing must be deducted from total sale price to derive a true price for just the realty. Unless a statement is made to the contrary, non-market financing was not used to acquire any comparable sale cited in this report. Therefore, no compensations are needed for financing. Conditions of Sale An adjustment for conditions of sale compensates for unusual buyer or seller motivations that impact sale price. For instance, when a seller gives the buyer an atypical rebate, discount, credit, or something of value to induce a conveyance, it is logical to deduct the worth of the giveback
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Real Estate Appraisal Report 1891 Territorial Road, Benton Harbor, Mi Page | 76 Expenditures Post Sale This is a situation when a buyer must invest monies in a property immediately after acquisition for some atypical reason. Post-sale invested sums are customarily added to a comparable’s sale price, which produces an adjusted sale price. Examples are demolition costs or building code compliance costs. Unless a contrary statement is made, no adjustments are necessary for post sale expenditures. Market Conditions This is an adjustment for change in value due to change in market conditions. It is commonly referred to as a time adjustment, but this is misleading. Value does not change simply due to the passage of time. Values fluctuate due to changes in market conditions, so this adjustment compensates for change in market conditions between a sale’s transaction and current conditions. All analyzed comparables conveyed between 2024 and this report's effective value date. The selected sales are considered recent enough to not warrant an adjustment for market conditions. Location Each property was rated to the subject for locational aspects such as value growth potential, access, and general desirability. Those transactions with superior locations were adjusted downward and vice versa. Physical Attributes A myriad of physical characteristics can affect value. View, topography, zoning and utilities are just some of these elements. Items of superior difference were adjusted downward and items of inferiority are adjusted upward.
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Real Estate Appraisal Report 1891 Territorial Road, Benton Harbor, MI Page | 78 Sales Comparison Approach Conclusion — Land Valuation The adjusted values of the comparable properties range from $10,000 to $15,617; the average is $12,733. Usually there is an inverse relationship between parcel size and rate per acre. That is to say the larger the parcel the smaller the rate per acre. The sales were graphed to demonstrate this effect, if any, and assist in selecting an applicable rate. The sales were not adjusted to account for this difference, but rather the rate selected was with this factor in mind. The forecasted rate by regression analysis is $12,556. The data is considered to be normalized and indicates a clear trend. Therefore, based upon that trend our selected rate per unit of comparison of $12,500 is applied below. LAND VALUE RANGES & AS IS RECONCILED VALUE Number of Comparables 5 Unadjusted Adjusted % 0 Low: $10,000 $10,000 0.0% High: $15,617 $15,617 0.0% Average: $12,313 $12,733 3.4% Median: $10,860 $11,946 10.0% Forecast: $12,158 $12,556 3.3% Reconciled Value / Unit: $12,500 Subject Size: 19.41 Indicated Value: $242,625 ROUNDED FINAL AS IS VALUE $250,000 $18,000 $16,000 I] un $14,000 Wrevsisug, $12,000 5 zz em @...... CR ———— . pt ° pa TE erie, £ $10,000 [| a 2 £ $8,000 oc $6,000 $4,000 $2,000
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Real Estate Appraisal Report 1891 Territorial Road, Benton Harbor, Mi Page | 79 Cost Analysis The next step in the Cost Approach is to estimate the replacement cost of the buildings and site improvements. The replacement cost of the subject site and building improvements are based on Marshall & Swift, a nationally recognized cost service. The published base costs, for the most part, represent completely finished buildings in the physical or hard construction sense, but not necessarily completely finished projects, which could include consideration for a variety of developmental and/or site improvement costs. WHAT THE COSTS CONTAIN = If the Calculator Method is utilized, the actual costs used are final costs to the owner and will include average architects’ and engineers’ fees. These, in turn, include plans, plan check and nominal building permits, and surveying to establish building lines and grades. = If Segregated method or Unit-in-Place Cost Sections are utilized, except as noted, the architects ‘fees are separated and identified separately. However, each listed item will have its pro rata share of the other miscellaneous costs included in the construction of the whole building or other improvement. = Normal interest on only the actual building funds during period of construction and processing fee or service charge is included. Typically, this will average half of the going rate over the time period plus the service fee. = All material and labor costs include all appropriate local, state and federal sales or GST taxes, etc. = Normal site preparation including finish, grading and excavation for foundation and backfill for the structure only. = Utilities from structure to lot line figured for typical setback except where noted in some Unit in-Place Cost sections (e.g., mobile homes). = Contractors’ overhead and profit including job supervision, workmen's compensation, fire and liability insurance, unemployment insurance, equipment, temporary facilities, security, etc., are included.
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Real Estate Appraisal Report 1891 Territorial Road, Benton Harbor, Mi Page | 80 WHAT THEY DO NOT CONTAIN = Costs of buying or assembling land such as escrow fees, legal fees, property taxes, right of way costs, demolition, storm drains, or rough grading, are considered costs of doing business or land improvement costs. = Pilings or hillside foundations are priced separately in the manual and are considered an improvement to the land. This also refers to soil compaction and vibration, terracing, etc. = Costs of land planning or preliminary concept and layout for large developments inclusive of entrepreneurial incentives or developer's overhead and profit are not included, nor is interest or taxes on the land, feasibility studies, certificate of need, environmental impact reports, hazardous material testing, appraisal or consulting fees, etc. = Discounts or bonuses paid for financing are considered a cost of doing business, as are funds for operating startup, negative cashflow during development, project bond issues, permanent financing, developmental overhead or fixture and equipment purchases, etc. ® Yard improvements including septic systems, signs, landscaping, paving, walls, yard lighting, pools or other recreation facilities, etc., which can be priced separately from Unit-in-Place Sections. = Off-site costs including roads, utilities, park fees, jurisdictional hookup, tap-in, impact or entitlement fees and assessments, etc. = Furnishings and fixtures, usually not found in the general contract, that are peculiar to a definite tenant, such as seating or kitchen equipment, etc. = Marketing costs to create first occupancy including model or advertising expenses, leasing or brokers’ commissions, temporary operation of property owners’ associations, fill-up or membership sales costs and fees. ® General contingency reserve where a percentage of the total cost is set aside for some unknown future event, such as labor strikes, anticipated labor and material increases, etc.
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Real Estate Appraisal Report 1891 Territorial Road, Benton Harbor, MI COST ESTIMATE Subject Total GBA 78,647 Area Source Cost Data Source Marshall & Swift Appraiser Measurement Current Multiplier 0.96 Building Structure Class Local Multiplier 1.00 Perimeter Multiplier 0.98 Construction Quality Height Multiplier 1.00 Total 0.94 Condition Multipler for Building Improvements 0.94 Multiplier for Site Improvements 0.96 BUILDING IMPROVEMENTS Description Unit Type Cost Quantity Total Building 1 SF $43.50 9,800 $401,063 Building 2 SF $106.00 2,380 $237,345 Building 3 SF $29.50 15,725 $436,425 Building 4 SF $22.05 26 $539 Building 5 SF $12.70 1,850 $22,104 Building 6 SF $40.75 1,580 $60,573 Building 7 SF $40.75 4,580 $175,586 Building 8 SF $40.75 600 $23,003 Building 9 SF $40.75 1,575 $60,382 Building 10 SF $45.00 308 $13,039 Building 11 SF $6.44 360 $2,181 Building 12 SF $95.00 480 $42,900 Building 13 SF $45.00 352 $14,902 Building 14 SF $12.70 9,250 $110,520 Building 15 SF $12.70 7,600 $90,806 Building 16 SF $22.05 144 $2,987 Building 17 SF $40.75 1,400 $53,673 Building 18 SF $40.75 2,200 $84,343 Building 19 SF $40.75 2,770 $106,195 Building 20 SF $73.50 5,530 $382,393 Building 21 SF $73.50 9,650 $667,286 Building 22 SF $22.05 480 $9,957 Loading Dock 20*200 Unit $95,000 3 $268,128 Loading Dock 20*300 Unit $150,000 3 $423,360 Loading Dock Enclosed 20*200 Unit $200,000 1 $188,160 Total Building Improvement Cost $3,877,853 $49.31 SITE IMPROVEMENTS Description Unit Type Cost Quantity Total Paving SF $3.50 752000 $2,632,000 Fencing w gate LF $27.50 3,700 $97,680 Total Site Improvement Cost $2,729,680 Page | 81
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Real Estate Appraisal Report 1891 Territorial Road, Benton Harbor, MI Page | 82 Where appropriate, we have included the following soft costs: Engineering This cost is included in the calculator method and only in instances where this cost would exceed typical would an adjustment be made. In this case, additional engineering has been applied at 0.0%. Architectural This cost is included in the calculator method and only in instances where this cost would exceed typical would an adjustment be made. In this case, additional architectural has been applied at 0.0%. Permits and Legal Permitting and legal costs have been estimated at $20,000 and applied. Marketing & Leasing Commissions It is often appropriate to add marketing expenses and leasing commissions necessary to bring an income producing property to stabilized occupancy to the cost schedule. In this case, these costs have been estimated at $0. Developer's Profit This factor reflects the profit necessary for the developer to undertake the management, responsibility and risks of construction associated with the subject property. Current valuation theory states that the four components that create value are land, labor, capital and coordination. Developer's profit as used in the Cost Approach reflects the coordination component of value. Typically, developer's profit runs 10% to 20% and that is considered within the cost figures when the calculator method is utilized. In certain market instances the profit may be below or exceed this normal range and this would need to be accounted for to reflect the market impact to this approach. The current standard appears to be within this range so we have computed developer's profit at 0.0% of construction costs. SOFT COSTS & PROFIT Engineering % of Building & Site Cost 0.0% so Architectural % of Building Cost 0.0% $0 Permits & Legal $20,000 Leasing $0
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Real Estate Appraisal Report 1891 Territorial Road, Benton Harbor, MI Page | 83 Depreciation Analysis Depreciation may be defined as any loss of value from any cause. There are three general areas of depreciation: physical deterioration, functional obsolescence and external obsolescence. Depreciation may be curable or incurable, the test being that money spent to cure the depreciation be gained in value. If the depreciation costs more to fix than will be gained in value, then the depreciation is considered incurable. Depreciation was discussed in more detail as it relates to the subject in the improvements section of this report. Physical Deterioration This results from deterioration from aging and use. This type of depreciation may be curable or incurable. Functional Obsolescence This results from a lack of utility or desirability due to design or market perception of the improvements. This type of depreciation may be curable or incurable. External Obsolescence This is due to circumstances outside the property itself, such as industry, demographic and economic conditions or an undesirable proximate use. This type of depreciation is rarely curable. Depreciation Accrued to the Subject DEPRECIATION Effective Economic Percentage Age Life Adjustment Total Physical Depreciation Building 20.46 26.51 77.2% -$2,992,108 Site 20 20 100.0% -$2,729,680 Functional Obsolescence 8.0% -$528,603 External Obsolescence 0.0% $0 Total Depreciation -$6,250,391 Cost Approach Conclusion Based on the analysis detailed on the following page we have reconciled to a cost approach value of:
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Real Estate Appraisal Report 1891 Territorial Road, Benton Harbor, MI Page | 84 COST APPROACH VALUE INDICATION Total Building Improvement Cost $3,877,853 Total Site Improvement Cost $2,729,680 Total Soft Cost & Dev Profit $20,000 Total Depreciation -$6,250,391 - Total Depreciated Cost $377,142 Add Land Value $250,000 Indicated Subject Value $627,142 Rounded $625,000 Indicated Value / SF $7.95 Insurable Value $3,900,000
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Real Estate Appraisal Report 1891 Territorial Road, Benton Harbor, MI Page | 85 Income Approach The Income Approach to value is based on the present worth of the future rights to income. This type of analysis considers the property from an investor's point of view, the basic premise being that the amount and quality of the income stream are the basis for value of the property. Direct Capitalization Analysis The steps involved in capitalizing the subject's net operating income are as follows: = Develop the subject's Potential Gross Income (PGI) through analysis of the subject’s actual historic income and an analysis of competitive current market income rates. = Estimate and deduct vacancy and collection losses to develop the Effective Gross Income (EGI). = Develop and subtract operating expenses to derive Net Operating Income (NOI). = Develop the appropriate capitalization rate (Ro). = Divide the net operating income by the capitalization rate for an estimate of value through the income approach. Potential Gross Income (PGl) Rent Roll The following rent roll details the current occupancy and rent status on a unit by unit basis as presented to the appraiser and is considered to be at market.
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98 | 23eg4 ver'eets dwiodu] judy |ejoL 61 000°0¥$ EEOIVS 000°0Y$ $5019 | 000'sZ$ 1BIA/S 000'52$ ss0i9 0v9$ 1eaA/$ 00°0%9$ $5049 PON 1 86L$ LOVES 00°'86L$ $019 PON 1 09s JedA/s 00°0t9% $0.9 PON 1 swJeq 09s Jeap/S 00°0t9$ $019 PON 1 20npo.d 0v9$ Jeap/$ 00°0%9$ SS0J9 PON T Ja H3W 0v93$ 1e3A/$ 00°0¥9$ $5019 pop 1 orTS Jeap/$ 00°0vTS $5019 POA T SpJRYII ov9$ JedA/$ 00°0%9$ $5019 PON 1 s 000'SES JedA/S 000'S€$S $5019 PON 1 SuiSexa 922'sTS 1B9A/S 9ZT'STS $5019 pon T 0v9$ Jeap/s 0v9$ $5019 PON 1 0r9$ JedA/S or9$ $5019 PON T s 0v9$ JedA/s ov9$ $5019 PO 1 A 0%9$ Jeap/$ 09s $5019 PON T 079% Jeap/$ 0v9$ $5019 PON 1 0%9$ JedA/$ 0v9$ $5019 POA T 079% JedA/$ ov9$ $5019 PON 1 0007S 1eap/$ 000'7$ $S019 po T 9 0%9$ Jeap/s 0v9$ $5019 PON 1 s juay poylaN uay adAL suun aweN |enuuy uay 12RIU0) asea] 30 JaquinN jueus IN ‘Joqu
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Real Estate Appraisal Report 1891 Territorial Road, Benton Harbor, MI Page | 87 Vacancy and Collection Loss Vacancy and collection loss is a factor, typically expressed as a percentage, applied to the potential gross income to account for the risk to ownership for physical vacancy, tenant turnover, and any other nonpayment of rent. Based on a review of market conditions and the subject’s operating history we have projected vacancy and collection loss at 5.0%. Expenses Some income and expense information contained in this report may have been attained from former appraisals of similar properties or other industry-accepted data sources. Other expenses were obtained from the property contact. All this information is assumed reasonably correct. Buyers of real estate are most concerned about income and expenses they expect during their tenure of ownership. In an appraisal, expenses should reflect upfront expectations of likely buyers during an ordinary ownership period, not the entire life cycle of the property. Management & Leasing In this case, the subject is considered an owner type investment with little management required. Any deduction here would simply bifurcate the profit (NOI and Management) rather than just NOI to the owner. Therefore, no deduction has been made. Repairs & Maintenance Maintenance is a planned, scheduled task like those required by an elevator. A repair is a sporadic item that needs attention now like an inoperative heating plant in the mid of winter. Reserves for Replacements In concept, funds are deducted from income and deposited into a safe, interest bearing account so monies will be reserved for future component replacement. Reserves are controversial because few owners actually set the funds aside. Moreover, the IRS only recognizes expenses in the year expended; not the year when funds are deposited into a reserve account. Whether funds are, or are not, deducted should not impact value. If funds are not deducted, then risk climbs because there is greater chance ownership will not have the money when needed. In compensation of increased risk, an appropriate overall cap rate should be higher.
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Real Estate Appraisal Report 1891 Territorial Road, Benton Harbor, MI Page | 88 Taxes, Insurance and Utilities These items with the exception of utilities are covered by the landlord. Utilities are shown as reimbursements in the following analysis. However, during vacancy these expense burdens would shift to ownership. Therefore, the reimbursable expenses are added to the total rental income prior to the vacancy and collection factor is applied in the following proforma. The cap rate selected for this analysis is predicated on this form of risk being accounted for here. If these were not deducted in this way, the cap rate would be higher in the analysis. These items are estimated based upon actual expenses and estimates taken from the comparables, competing and neighboring properties, and from ownership reports through respected services like BOMA and IREM. EXPENSE REIMBURSEMENTS Expense Reimbursed % Amount Notes RE Tax No Insurance No Management No Utilities Yes $55,000 Repairs & Maintenance No General & Administrative No $55,000 EXPENSES $0 $10,000 $20,000 $30,000 $40,000 $50,000 $60,000 RE Tax Insurance ees EE AEC NR TT Repairs & Maintenance
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Real Estate Appraisal Report 1891 Territorial Road, Benton Harbor, MI Page | 89 CASH FLOW PROFILE $200,000 $180,000 $160,000 $140,000 $120,000 $100,000 $80,000 $60,000 $40,000 $20,000 $0 PGI EGI Expenses NOI Cash Flow PGI EGIL Expenses NOI Amount $184,124 $174,918 $115,370 $59,548
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Real Estate Appraisal Report 1891 Territorial Road, Benton Harbor, MI Page | 90 Capitalization Rate The capitalization rate is the factor that converts the stabilized net operating income (NOI) to a present value. It is the ratio of net income to value or sale price. NOI + Sale Price = Capitalization Rate For example, if a property sells for $500,000, and has a stabilized NOI of $50,000, the indicated capitalization rate is 10%. Band of Investment This technique utilizes lender and real estate investor investment criteria to develop, or synthesize a capitalization rate. There are four key inputs necessary for this method: * The loan-to-value ratio (M) »* The mortgage interest rate (i) ®= The loan term (n) = The equity cap rate or equity dividend rate (Re) The mortgage variables are used to build the mortgage constant (Rm), which is the total amount of the payments made in one year, expressed as a percentage of the original loan amount. Payments x 12 / Original Loan Amount = Mortgage Constant (Rm) The equity cap rate is the annual return to the investor, expressed as a percent of the original amount invested. The annual return to the investor is also known as the equity dividend rate; it is the profit remaining after debt service and all other expenses. After Debt Service Profit / Equity Investment = Equity Cap Rate (Re) Note that the equity cap rate is not the same (usually, that is) as the equity yield rate. The equity yield rate reflects the total return to the investor over the life of the investment. Factors such as appreciation and mortgage pay down affect and usually increase this return to a point higher than the equity dividend rate. In markets where substantial appreciation is expected, investors will often accept a low or even negative equity dividend rate, anticipating a compensating payoff when the property is eventually sold. In markets where little appreciation is expected, much
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Real Estate Appraisal Report 1891 Territorial Road, Benton Harbor, Mi Page |91 Debt Coverage Ratio Analysis This technique develops a capitalization rate based on typical mortgage terms. There are four variables necessary for this method: * The loan-to-value ratio (M) = The mortgage interest rate (i) ®= The loan term (n) = The debt coverage ratio (DCR) Items 1 through 3 are discussed above under the Band of Investment section. In this method it is also used to develop the mortgage constant (Rm). The debt coverage ratio is the factor by which income exceeds debt on an annual basis. Formula: Debt Coverage Ratio x Loan to Value Ratio x Mortgage Constant = Ro or: DCRxM x Rm = Ro
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Real Estate Appraisal Report 1891 Territorial Road, Benton Harbor, Mi Page |92 CAPITALIZATION CALC Capitalization Rate Variables Mortgage Interest Rate 7.00% Loan Termin Years 25 Loan to Value Ratio 75% Debt Coverage Ratio 1.55 Equity Dividend Rate 12.00% Band of Investment Analysis Mortgage Constant Loan Ratio Contributions 0.0848135 X 0.75 = 6.36% Equity Dividend Rate Equity Ratio 12.00% X 0.25 = 3.00% 9.36% Debt Coverage Ratio Debt Coverage Ratio x LTV x Mortgage Constant 9.86% Capitalization Rate Conclusion Based upon the foregoing information, and considering the elements of risk applicable to the subject that are already accounted for, the rate selected for this analysis is considered to represent average risk and therefore the rate utilized is 9.50%.
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Real Estate Appraisal Report 1891 Territorial Road, Benton Harbor, MI Page | 93 Capitalization to Value DIRECT CAPITALIZATION ANALYSIS Unit / Space Type Income Method Units / SF Annual % of PGI Subject $129,124 $/Year $129,124 70.1% Total Rental Income $129,124 70.1% Expense Reimbursement $55,000 29.9% Other Income 1) 0.0% Potential Gross Income $184,124 Vacancy & Collection Loss -$9,206 5.0% Effective Gross Income $174,918 95.0% Expense Amount Method Annual %0fEGI RE Tax $18,370 $/Year $18,370 10.5% Insurance $10,500 $/Year $10,500 6.0% Management 0.0% %0fEGI $0 0.0% Utilities $55,000 $/Year $55,000 31.4% Repairs & Maintenance $30,000 $/Year $30,000 17.2% General & Administrative $1,500 $/Year $1,500 0.9% Total Expenses $115,370 0.00% Expense Ratio 66.0% Net Operating Income $59,548 0.00% Capitalization Rate 9.50% Indicated Value $626,819 0.00% Rounded $625,000 0.00% Direct Capitalization Analysis Conclusion Based on the above analysis, we have reconciled to a direct capitalization approach value of: $625,000
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Real Estate Appraisal Report 1891 Territorial Road, Benton Harbor, MI Page | 94 Final Reconciliation The reconciliation constitutes the final step in the process of analysis and interpretation of data contained within the report. The process of reconciliation involves the analysis of each approach to value. The quality of data applied, the significance of each approach as it relates to market behavior and defensibility of each approach are considered and weighed. Finally, each is considered separately and comparatively with each other. A cost approach provides an approximation of the depreciated reconstruction cost of the improvements. Added thereto is the worth of the land as though vacant. This approach is most applicable for new, or like new structures due to less uncertainty when estimating reconstruction cost or depreciation, if any. The subject is a unique property so this approach can be useful in estimating the value. In the Sales Comparison Approach, sales of similar properties are compared to the property being appraised. This approach is very significant because it directly reflects the actions of buyers and sellers in a competitive market. It also reflects economic conditions; acceptance or rejection of various features; and trends of general desirability. The subject is a unique property with very few other properties like it and no sales data to help estimate the value so this approach was not condicted in this appraisal. The Income Approach is most appropriate when the primary acquisition criterion is a flow of income dollars. This methodology forecasts income, which is then converted into value via capitalization. The subject rents spaces so this approach was conducted to estimate the value.
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Real Estate Appraisal Report 1891 Territorial Road, Benton Harbor, MI Value Conclusion Page | 95 Based on the data and analyses developed in this appraisal, we have reconciled to the following value conclusion(s), as of the applicable effective date(s) of this report, subject to the Limiting Conditions and Assumptions of this appraisal. As Is Value Indications Value Effective Date Value Perspective Value Type Property Rights Marketing Time Exposure Time Land Value Indication Cost Approach Indication Sales Approach Indicated Value Income Approach Indicated Value Final Value Conclusion 8/26/2025 Current Market Value Fee Simple 12 Months 12 Months $250,000 $625,000 Not Conducted $625,000 $625,000
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Real Estate Appraisal Report 1891 Territorial Road, Benton Harbor, MI Page | 96 Certification Statement We certify that, to the best of knowledge and belief: The statements of fact contained in this report are true and correct. The reported analyses, opinions and conclusions are limited only by the reported assumptions and limiting conditions, and is our personal, impartial, and unbiased professional analyses, opinions and conclusions. We have no present or prospective future interest in the property that is the subject of this report, and have no personal interest with respect to the parties involved. We have no bias with respect to the property that is the subject of this report, or to the parties involved with this assignment. Our engagement in this assignment was not contingent upon developing or reporting predetermined results. Our 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 estimate, the attainment of a stipulated result, or the occurrence of a subsequent event directly related to the intended use of this appraisal. Our analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the Uniform Standards of Professional Appraisal Practice (USPAP). No one provided significant real property appraisal assistance to the person(s) signing this certification. We certify sufficient competence to appraise this property through education and experience, in addition to the internal resources of the appraisal firm. The appraiser has not performed any prior services regarding the subject within the previous three years of the appraisal date. We have made an inspection of the subject property. Appraisers are required to be licensed and are regulated by the Michigan Department of Labor and Economic Growth, P.O. Box 30018, Lansing, Michigan 48909. pl Qonsfon Prnkigoant
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Real Estate Appraisal Report 1891 Territorial Road, Benton Harbor, MI Page |97 Addenda
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Real Estate Appraisal Report 1891 Territorial Road, Benton Harbor, MI Page | 98 ] HONOR a COMMERCIAL | | APPRAISAL ORDER [SIRTREICRVTINE § Date: 8/19/2025 Cost: _ $2,800 To: John Carnine Due Date: 3 Weeks 79.10.2025 From: Jennifer Hernandez E-mail: jhernandez @honorcu.com PROPERTY INFORMATION: Borrower: BH Market, LLC Owner: Benton Harbor Fruit Market Inc Address: 1881 Territorial Road Benton Harbor, M1 48022 Contact Name & No: Mark Vanderboegh (269) 208-0227 Property Type: Property Is: Value Type: 0 spartment (24 wits) 0 Vacant Land 0 tnoccupied [239 OQ Aparoment (5+ units) 0) few Const 0 Over Occupied [J 4s Complete. 0 Retail 00 Renovation Tenant Cecupied 0 fs sable LI Industrial O office Other Property Tax No: 11.54.0016.0302.09.9 Property Desc/ Fruit Market with 19 acres: 4 enclosed storage buildings: 8 covered storage areas; Additional Info: TYPE OF APPRAISAL/REPORT: Lease Fee Value Appraisal (if property leased to a third party) Fee Simple Value Appraisal (can be owner occupied, but not subject to owner's lease) Appraisal Report: Omits non-essential information/as applicable Restricted Appraisalt: Provides only an estimate of value with no supporting documentation (Ali report types to include photos and any supporting information used to form opinion of value) Type of appraisal ordered: QO Lease Fee Value Appraisal Report 00 Lease Fee Value Reslricted Appraisal X Fee Simple Value Appraisal Report O Fee Simple Vale Restricted Appraisal NOTICE: Honor Credit Union requests an appraisal be conducted that conforms to the Uniform Standards of Professional Appraisal Practice (USPAP) and that all items addressed in the appraisal process be included in the final appraisal. By accepting this request and agreeing to complete this appraisal, you also affirm that you have no direct or indirect interest in the property or transaction related to this appraisal. H Digitally signed by John Carnine wees. JONN CANINE Doeirasprs ames ovo
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Real Estate Appraisal Report 1891 Territorial Road, Benton Harbor, Mi Page | 99 (TERRITORIAL RD BENTON HARBOR, MI 49022 (Property Address) Parcel Number: 54-0016-03(2-09-9 Property Owner: BENTON HARBOR FRUIT MARKET INC Summary Information > Ce ial Building ty > d Value: $793500 | Table Vale: $279,279 i Built 1965 # of Buildings: 11 Total SqFL 40316 > Property Tax information found tem 1022 13 Images /9 Sketches Owner and Taxpayer Information Owner BENTON HARBOR FRUIT Taxpayer SEE OWNER INFORMATION MARKET INC PO BOX 127 BENTON HARBOR, MI 49023 General Information for Tax Year 2024 Property Class 201 COMMERCIAL-IMPROVED Unit 50 City of Benton Harbor School District DENTON HAROR AREA Assessed Value $794,600 SCHOOLS Map # 016-1 Taxable Value $219,279 User Number Index 0 State Equalized Value $794,600 FIELD Not Avadable Date of Last Name Change 10/22/2019 User Alpha 3 Not Avaluble Notes Not Available Historical District Not Available Census Block Group Not Available: NOTE Not Available Exemption No Duta to Display Principal Residence Exemption Information Homestead Date No Data to Display Principal Residence Exemption 2024 | 2023 00000 % | Previous Year Information MBOR Assessed | Final SEV | Final Taxable 203 $719,700 719700 $265,980 2022 $645,300 $615300 $253315 2021 617800 $617.800 $245223 Land Information Zoning Cade DISTRICT Total Acres 19.410 Land Value $121454 Land Improvements $193.998 Renaissance Zone No Renaissance Zone Expiration No Date to Display Date ECF Neighborhood COM RES OF CITY. Mortgage Code No Data to Display Lot Dimensions/ Comments No Data 10 Display Neighborhood Enterprise No Zone Lots) | Frontage | Depth No lots found. Total Frontage: 0.00 ft Average Depth: 0.00 ft
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Real Estate Appraisal Report 1891 Territorial Road, Benton Harbor, MI ROAD Land Division Act Information Page | 100 Grantee Liber/Page Date of Last Split/Combine No Data to Display Number of Spiits Left 999 Date Form Filed No Data to Display Unallocated Div.s of Parent 0 Date Created 12222010 Unallocated Div.s Transferred 0 Acreage of Parent 000 Rights Were Transferred Not Avadble Split Number 10 Courtesy Split Not Available Parent Parcel No Duta to Display Sale History Sale Date | Sale Price | Instrument | Grantor [terms of sate No sales history found. Building Information - 900 sq ft Warehouses - Storage (Commercial) Floor Area Occupancy Stories Above Ground Basement Wall Height Year Built Percent Complete Physical Percent Good Economic Percent Good 9.8005q ft Warehouses - Storage 1) of 1968 100% 3% 100% Building Information - 2380 sq ft Office Buildings (Commercial) | Floor Area Occupancy Stories Above Ground Basement Wall Height Year Built Percent Complete Physical Percent Good Economic Percent Good 23805q ft Office Buildings 1 oft 1968, 100% 25% 100% Building Information - 10528 sq ft Warehouses - Storage (Commercial) 1 Floor Area Occupancy Stories Above Ground Basement Wall Height Year Built Percent Complete Physical Percent Good Economic Percent Good 10528 sq ft Warehouses - Storage 1 oft 197 100% 44% 100% Building Information - 6348 sq ft Warehouses - Storage (Commercial) 1 Floor Area Occupancy Stories Above Ground Basement Wall Height Year Built Percent Complete Physical Percent Good Economic Percent Good 6318 5q1t Warehouses - Storage 1 oft 1997 100% aa% 100% Estimated TCV Not Available Class. [) Average Story Height 2ft Identical Units Not Avaitable Year Remodeled No Data to Display Heat Space Heaters, Gas with Fan Functional Percent Good 100% Effective Age Byrs Estimated TCV. Not Available Class. c Average Story Height 101 Identical Units Not Available Year Remodeled No Data to Display Heat Forced Air Fumace Functional Percent Good 100% Effective Age a0yrs Estimated TCV. Not Avadable Class. 0 Average Story Height 2 Identical Units Net Available Year Remodeled Na Data fo Display Heat Space Heaters, Gas vith Fan Functional Percent Good ~~ 100% Effective Age 32915 Estimated TCV Not Available Class [ Average Story Height 161 Identical Units Not Available Year Remodeled Heat Functional Percent Good Effective Age Building Information - 7704 sq ft Warehouses - Storage (Commercial) Floor Area Occupancy Stories Above Ground 7304 5q ft Warehouses - Storage 1 No Data to Display Space Heaters, Gas with Fan 100% 32yrs Estimated TCV Class Average Story Height Not Available 3 201 ot Avaleble
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Real Estate Appraisal Report 1891 Territorial Road, Benton Harbor, Mi Percent Complete Physical Percent Good Economic Percent Good 100% aa 100% Building Information - 1364 sq t Office Buiklings (Commercial) | Floor Area Occupancy Stories Above Ground Basement Wall Height Year Built Percent Complete Physical Percent Good Economic Percent Good 1364 sqft Office Buiklings 1 oft 1597 100% A5% 100% Page [101 Heat Complete HVAC Functional Percent Good 100% Effective Age 321s. Estimated TCV Not Avail Class 0 Average Story Height 121 Identical Units. Not Available Year Remodeled No Data to Deploy Heat Forced Air Furnace. Functional Percent Good 100% Effective Age 351s Building Information - 368 sq ft Restroom Buildings (Commercial) | Floor Area Occupancy Stories Above Ground Basement Wall Height Year Built Percent Complete Physical Percent Good Economic Percent Good 368 sq ft Restroom Buildings 1 of 1966 100% A1% 100% Estimated TCV Class. Average Story Height Identical Units Year Remodeled Heat Functional Percent Good Effective Age Not Available c aft Not Available No Data to Display Mo Heating or Cooling 100% 22415 Building Information - 720 sq ft Shed - Uti Light Commercial building (Commercial) | Floor Area Occupancy Stories Above Ground Basement Wall Height Year Built Percent Complete Physical Percent Good Economic Percent Good 7205q ft Estimated TCV Shed - Utiity Light Commercial Class Building 1 oft 1968 100% a 100% Average Story Height Identical Units Year Remodeled Heat Functional Percent Good Effective Age Not Available 0 st Not Available No Data to Display Ho Heating or Cooling 100% 22y15 Building Information - 256 sq ft Shed - ily Light Commercial Building (Commercial) | Floor Area Occupancy Stories Above Ground Basement Wall Height Year Built Percent Complete Physical Percent Good Economic Percent Good 256 sq ft Estimated TCV Shed - Utiity Light Commercial Class Building 1 oft 1968 100% A1% 100% Average Story Height Identical Units Year Remodeled Heat Functional Percent Good Effective Age Building Information - 460 sq ft Garages - Storage (Commercial) 1 Floor Area Occupancy Stories Above Ground Basement Wall Height Year Built Percent Complete Physical Percent Good Economic Percent Good 4805q ft Garages - Storage 1 oft 198 100% an 100% Not Available D 10ft Not Availabe No Data to Display No Heating or Cooling 100% 2415 Estimated TCV Class Average Story Height tdentical Units Year Remodeled Heat Functional Percent Good Effective Age Building Information - 368 sq ft Restroom Buildings (Commercial) | Floor Area Occupancy Stories Above Ground 3685q ft Restroom Buildings 1 Estimated TCV. Class. Average Story Height © units By continuing to use this website you agree to the BSA Online Terms of Use X nodeled Not Available [] 9ft Not Available No Data to Display No Heating or Cooling 100% yrs Not Available [4 sft Not Available No Data to Display
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Real Estate Appraisal Report 1891 Territorial Road, Benton Harbor, Mi Page | 102 Physical Percent Good an Functional Percent Goad 100% Economic Percent Good 100% Effective Age 21s “Disclaimer: ESEA Softuiare provides BS&A Online a a vay for municipalities to display information onli and is not responsible for the content or accuracy af the data heicin This data is provided for reference only and WITHOUT WARRANTY of any kind expressed of inferred Please contact yout local municipality if you biefieve there are enors in the data. Copyiight © 2625 BSA Software, inc
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Real Estate Appraisal Report 1891 Territorial Road, Benton Harbor, MI Page |103 [TERRITORIAL RD BENTON HARBOR, MI 49022 (Property Address) Parcel Number: 54-0016-0302-09-9 Item 1 of 22 13 tmages / 9 Sketches Total SFL 40316 > Propeny Tat information found Summary Information > Commercialindustiial Building Summary i Built 1965 # of Buildings 11 Property Owner: BENTON HARBOR FRUIT MARKET INC > Assessed Value: $734,600 | Taxable Value: $279,279 Owner and Taxpayer Information Owner Legal Description BH MARKET LLC 3960 RED ARROW HWY BENTON HARBOR, MI 49022 Taxpayer SEE OWNER INFORMATION Amount Due Curent Taxes $17,345.63 Bay Now BEG 271.00 SCODEGOS'03"E OF TH NE COR OF SW1/4 OF NW 1/4 SEC 16 T4S R18W TH NBIDEG26'08"W 935.74° TH S 828.52 TH NEGDEG7'1 1"E 599.45 TH SOODEGO5'30°E 264° TO (/L TERRITORIAL RD TH N86DG37'11"E ON RD C/L 339" TH NOODEGOS'08"W 1037.96" TO POB SEE L 2032 P 1010 FOR ABANDOMENT OF ROAD Other Information Recalculate amounts using a different Payment Date You can change your anticipated payment date in order to recalculate amounts due as of the specified date for this property. Enter a Payment Date Tax History [ ear | season 2025 2024 2024 2023 2023 18/27/2025 Summer Winter Summer Winter Summer Winter Summer Winter Summer Winter Summer Total Amount $17.34563 $665.42 $16,845.80 £3.32570 $1347432 $608.85 $15,287.83 $589.40 $14,799.44 $562.38 $14,612.90 | - 000 $665.42 $16,845 80 £32570 $1347432 $603 85 $15,267.63 $589.40 $1799.44 $56238 $14,612.90 Toul oid | Last Paid 02/03/2025 09/11/2024 02/05/2024 09/11/2023 02/14/2023 09/13/2022 02/08/2022 09/13/2021 02/09/2021 09/11/2020 $17,345.63 $0.00 $0.00 $000 $0.00 $000 $000 $0.00 $0.00 $000 $0.00 Total Due | “*Disclaimer: BS&A Software provides BS&A Online as a vay for municipalities to display information online and is not responsible for the content or accuracy of the data herein This data icipaliy if you believe there are curs in the data is provided for reference only and WITHOUT WAPRANTY of any kind, expressed or inferred. Please contact your local
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Real Estate Appraisal Report 1891 Territorial Road, Benton Harbor, MI pitied Benton Harbor Fruit Market, Inc. Accrual Basis Profit & Loss January through December 2024 Jan - Dec 24 Ordinary Income/Expense Income 3101-01 - RENTAL FEES 36,588.00 3103-01 - ELECTRIC FEES 8,249.03 3103-02 - UTILITIES (WATER-SANIT-TELE.) -7.037.16 3103-03 - COOLER RENTAL 34,496.00 3106-02 - DIRECT SALES STALLS 4,070.50 3107-01 - INTEREST EARNED 9.26 3110-01 - MISCELLANEOUS INCOME 5,867.00 3110-02 - STORAGE- boathrv 21,237.60 3121-01 - LAND RENT 11,250.00 Total income 114,730.23 Expense 4200-02 - UTILITIES 5,200.96 4200-03 ELECTRIC 46,997.50 4200-04 - TRASH REMOVAL 4,620.55 4201-01 - OFFICE SUPPLIES 4201-02 - Postage 662.02 4201-03 + Printing Supplies 189.72 4201-04 + Equipment 215.31 4201-05 - Software 270.07 4201-01 - OFFICE SUPPLIES - Other 104.85 Total 4201-01 - OFFICE SUPPLIES 1,441.77 4202-01 - ADVERTISING 7121.72 4203-01 - INSURANCE 10,484.00 4204-01 - PROPERTY TAXES 27,203.97 4209-01 - PROFESSIONAL EXPENSE 14,470.00 4209-02 - LEGAL EXPENSES 120.00 4210-01 - REPAIRS & MAINT. 32,764.73 4212-01 - MISC. & MILEAGE 50.00 4214-01 - CONTRACT LABOR 23,873.00 4216-01 - DIRECTORS FEES 1,250.00 4217-01 - TRAVEL ALLOWANCE 800.00 4219-01 - ANNUAL MEETING EXPENSE 454.22 4222-01 - PRODUCE PURCHASES -92.00 4223-01 - MISCELLANEOUS TAX 75.00 4227-01 - SERVICE CHARGES 424.00 4231-01 - DEPRECIATION EXPENSE 20,474.00 Total Expense 197,833.42 Net Ordinary Income 83,103.19 Net Income EX Page | 104
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Real Estate Appraisal Report 1891 Territorial Road, Benton Harbor, Ml Page |105 9:51 AM BH Market, LLC 0827125 Sales by Customer Summary Accrual Basis May 27 through August 27, 2025 May 27 - Aug 27, 25 Barden Farms 640.00 Bill's Produce 4,000.00 Chris/Raman Franco 640.00 Daly Farms 640.00 Disterheft Family Farms LLC 640.00 Emily Solis 640.00 Eppie Family Farms 640.00 Hamer Farms LLC 640.00 K&K Farms 640.00 Mi Dad's Farm, LLC 15,226.03 Midwest Packaging 35,000.00 Molter Farms 640.00 New Leaf Orchards LLC 140.00 Ralph Lopez 640.00 Sandi Sommerfeldt 640.00 Schmucker Produce 640.00 Sleepy View Farms 640.00 Tara 797.99 Very Blue Farms 640.00 TOTAL 64,124.02
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Real Estate Appraisal Report 1891 Territorial Road, Benton Harbor, MI John Carnine Experience J. Carnine & Co. Owner, 2010 - Present Page | 106 Excellent record of providing comprehensive analysis of commercial real estate provided quickly in a concise manner for valuation services to include: = Appraisal = Appraisal Review = Consultation e-Valuate Commercial Director, 2004-2010 CBRE/ Bradley Director, 2004 - 2004 FM Stone Commercial Appraiser, 2000 - 2004 Education Western Illinois University BS 1995 Appraisal Courses to Include Ad Valorem Tax Consultation Analyzing Distressed Real Estate Appraisal Principles Appraisal Procedures Appraising Apartments Appraising Convenience Stores Appraising Hotels Business Practices & Ethics Commercial Appraisal Review Environmental Issues Highest & Best Use Income Capitalization Introduction to Expert Witness Land and Site Valuation Scope of Work Small Residential Income Subdivision Valuation Valuation of Detrimental Conditions
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Real Estate Appraisal Report 1891 Territorial Road, Benton Harbor, MI Jennifer Pinkepank Page | 107 Experience J. Carnine & Co. Certified General Appraiser & Research Specialist, 2013 - Present Excellent record of providing comprehensive analysis of commercial real estate provided quickly in a concise manner for valuation services to include: = Appraisal = Appraisal Review = Consultation Bradley Company Marketing & Research Manager, 2008 - 2013 Sears Holdings Inventory Analyst, 2007 - 2008 Education Indiana University Kelly School of Business BS 2007 Appraisal Courses to Include Appraisal Principles Appraisal Procedures Appraising Small Apartment Properties Commercial Appraisal Review Commercial Land Valuation Expert Witness for Commercial Appraisers Highest & Best Use Income Capitalization Market Analysis and Highest and Best Use The Basics of Expert Witness for Commercial Appraisers Uniform Standards of Professional Appraisal Practice Licenses
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Real Estate Appraisal Report 1891 Territorial Road, Benton Harbor, MI Page | 108 Glossary This glossary contains the definitions of common words and phrases, used throughout the appraisal industry, as applied within this document. Please refer to the publications listed in the Works Cited section below for more information. Works Cited: - Appraisal Institute. The Appraisal of Real Estate. 14th ed. Chicago: Appraisal Institute, 2013. Print. " Appraisal Institute. The Dictionary of Real Estate Appraisal. 7th ed. 2022. Print. 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 (i.e., debt and equity, land, and improvements). (Dictionary, 7t" Edition) Debt Coverage Ratio (DCR) The ratio of net operating income to annual debt service (DCR = NOI/Im), 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). A larger DCR typically indicates a greater ability for a property to withstand a reduction of income, providing an improved safety margin for a lender. (Dictionary, 7th Edition) Discount Rate A rate of return on capital used to convert future payments or receipts into present value. (Dictionary, 7th Edition) 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, 7t" Edition) Effective Date 1. The date on which the appraisal opinion applies. (SVP) 2. The date to which an appraiser’s analysis, opinions, and conclusions apply, also referred to as date of value. (USPAP, 2020-2021 ed.) 3. The date that a lease goes into effect. (Dictionary, 7t" Edition)
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Real Estate Appraisal Report 1891 Territorial Road, Benton Harbor, MI Page | 109 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, 7" Edition) 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 opinion 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 about the integrity of data used in an analysis. (USPAP, 2020-2021 ed) (Dictionary, 7*" Edition) 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. (Dictionary, 7t" Edition) Functional Obsolescence The impairment of functional capacity of improvements according to market tastes and standards. (Dictionary, 7th Edition) 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 buildings use in terms of architectural style, design and layout, traffic patterns, and the size and type of rooms. (Dictionary, 7th Edition) 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, 7th Edition) Highest & Best Use The reasonably probable use of property that results in the highest value. The four criteria that the highest and best use must meet are legal permissibility, physical possibility, financial
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Real Estate Appraisal Report 1891 Territorial Road, Benton Harbor, Mi Page | 110 assumption that the parcel of land is vacant or can be made vacant by demolishing any improvements. (Dictionary, 5* Edition) Highest and Best Use of Property as Improved The use that should be made of a property as it exists. An existing improvement should be renovated or retained as is so long as it continues to contribute to the total market value of the property, or until the return from a new improvement would more than offset the cost of demolishing the existing building and constructing a new one. (Dictionary, 5" Edition) 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 analysis. (USPAP, 2020-2021 ed.) (Dictionary, 7*" Edition) Leased Fee Interest The ownership interest held by the lessor, which includes the right to receive the contract rent specified in the lease plus reversionary right when the lease expires. (Dictionary, 7t" Edition) Market Area The geographic region from which a majority of demand comes and in which the majority of the competition is located. (Dictionary, 7th Edition) Market Rent The most probably rent that a property should bring is 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, 7th Edition) Marketing Time An opinion of the amount of time to sell a property interest at the concluded market value or at a benchmark price during the period immediately after the effective date of an appraisal. Marketing times differs from exposure time, which precedes the effective date of an appraisal. (Advisory Opinion 7 and Advisory Opinion 35 of the Appraisal Standards Board of The Appraisal Foundation address the determination of reasonable exposure and marketing time). (Dictionary,
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Real Estate Appraisal Report 1891 Territorial Road, Benton Harbor, Mi Page |111 Obsolescence One cause of depreciation; an impairment of desirability and usefulness caused by new inventions, changes in design, improved processes for production, or external factors that make a property less desirable and valuable for a continued use; may be either functional or external. (Dictionary, 7t" Edition) Parking Ratio A ratio of parking area or parking spaces to an economic or physical unit of comparison. Minimum required parking ratios of various land uses are often stated in zoning ordinances. (Dictionary, 7t Edition) Replacement Cost The estimated cost to construct, at current prices as of a specified date, a substitute for a building or other improvements, using modern materials and current standards, design, and layout. (Dictionary, 7th Edition) Scope of Work The type of data and the extent of research and analysis. (Dictionary, 7" Edition) Stabilized Occupancy The occupancy of a property that would be expected at a particular point in time, considering its relative competitive strength and supply and demand conditions at the time, and presuming it is priced at market rent and has had reasonable market exposure. (Dictionary, 7" Edition) Tenant Improvements (Tis) 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, 7t" Edition) Vacancy and Collection Loss A deduction from potential gross income (PGI) made to reflect income reductions due to vacancies, tenant turnover, and non-payment of rent; also called vacancy and credit loss or vacancy and contingency loss. (Dictionary, 7t" Edition)