Sample Appraisal


 The property being appraised has a street address of 1 Main Street, in “Your Town”, Connecticut. It is specifically identified on Lot #177 as depicted on “Your Town” Assessor’s Map 8-5.  (See Site Plan in addendum of this report).


The purpose of this report is to estimate the “as-is” Market Value of the subject.  The effective date of this report is December 3, 2013, the date of our most recent limited exterior inspection of the property.  (Note: The subject photos accompanying this report were taken at the time of an earlier limited exterior inspection on November 19, 2013).

It is our understanding that this appraisal is to be utilized in possible eminent domain proceeding by the City of “Your Town”.  The intended user(s) of this report are the Corporation Counsel of the City of “Your Town” as well as other City Officials.

Note:  Based upon the client’s request that we not inspect the interior of the property, the value estimate is based upon an Extraordinary Assumption (defined below) that the interior layout of the subject is as described in the Assessor’s records and in discussions with the City’s Building Inspector and Fire Marshall.  Furthermore, this estimate of Market Value is with the Hypothetical Condition (defined below) that there are no detrimental environmental “issues” at the site.



Market Value Definition

The following definition of Market Value is taken from Title XI of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA).

The most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus.  Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby:

1.  buyer and seller are typically motivated;

2.  both parties are well informed or well advised, and acting in what they consider their own best interests;

3.  a reasonable time is allowed for exposure in the open market;

4.  payment is made in terms of cash in United States dollars or in terms of financial arrangements comparable thereto; and

5.  the price represents a normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale.


Extraordinary Assumption

An assumption, directly related to a specific assignment, which, if found to be false, could alter the appraiser’s opinions or conclusions.

The following definition of Hypothetical Condition is taken from the 2008 – 2013 Edition of Uniform Standards of Professional Appraisal Practice as promulgated by The Appraisal Standards Board of the Appraisal Foundation.

Hypothetical Condition

That which is contrary to what exists but is supposed for the purpose of analysis.


 In our Market Value Definition section, Market Value has been defined as having a willing buyer and a willing seller and a reasonable time allowed for exposure in the open market.  Our analysis of the subject property as well as a review of market conditions which would effect the sale of this property indicate that, if the subject were placed on the market for sale, it is believed that a sale can be completed in a twelve (12) month period, or less.


We have reviewed the appraisal assignment and we have identified the appraisal problem as stated in the Purpose of Appraisal Section of this report, and we confirm that we have the required knowledge and experience to complete this assignment competently.



We have not made a specific compliance survey analysis of this property to determine whether or not it is in conformity with the various detailed requirements of Americans with Disabilities Act (ADA), nor have we considered possible non-compliance with the requirements of ADA in estimating the value of the property.


This appraisal, including its contents and methods of valuation, has been prepared in accordance with the Uniform Standards of Professional Appraisal Practice of the Appraisal Foundation and is in conformity with current federal regulations.

In arriving at our estimate of the “as-is” Market Value of the subject, all three recognized approaches to value were considered.  The Cost Approach, while considered, has not been developed because of the age and condition of the subject, which would necessitate very subjective estimates of physical depreciation as well as functional and economic obsolescence.  Furthermore, there is insufficient recent sales data for similarly located, similarly sized vacant parcels, necessary to estimate site value as an integral part of the Cost Approach.

The Sales Comparison Approach has been fully developed in this report.  This method has us research the broader market area and find recent sales of similar properties which have allowed for a meaningful comparison analysis.  Those comparable sales, adjusted to reflect measurable difference relative to the subject, provide the basis for an estimate of value by the Sales Comparison Approach.

In addition we have considered the income producing potential of the subject, if it were on the market for rental at this time. That estimated net income, capitalized at an appropriate rate, has resulted in an estimate of value by the Income Approach.

A correlation of the data provided by these analyses has provided us with an estimate of Market Value of the subject as of December 3, 2013.

In our opinion, the utilization of the Sales Comparison Approach and the Income Approach provide for credible results which are not misleading to the client and/or the intended user(s).


The property being appraised is currently held in ownership in the name of “Property Owner”, following the recording of a Warranty Deed on September 16, 1985 in Volume 192, Page 882 of the “Your Town” Land Records (see addendum).


 The City of “Your Town” assesses all real property at 70% of its estimated Market Value, determined as of the last city-wide revaluation, in 2005.  The current (2008 Grand List) assessment of the subject is as follows.

Land:                                                                          $     299,740.00

Building:                                                                    $  1,328,950.00

Total Assessment:                                                      $    1,628,61.00



The total current (2008 Grand List) assessment on the subject is $1,628,61.00.  Based upon the most recent (2008 tax year) tax rate of 26.4 mils, the annual real property tax burden on the subject is $42,997.42.




The City of “Your Town” is located in the Valley Region (VR), a four town area located in the southwestern portion of the State.  The member towns ‑ Ansonia, “Your Town”, Seymour, and Shelton – form one of the fifteen planning areas in Connecticut.  Three of these towns are located in New Haven County while Shelton, which is found on the west side of the Housatonic River, is located in Fairfield County.   All four towns are also part of the Bridgeport Labor Market Area and the Valley Economic Development Region

The information, statistics and data contained within this portion of the report have been extracted from the Town Profile, a publication of the State of Connecticut Department of Economic and Community Development, the State of Connecticut Department of Economic and Community Development, Public and Government Relations division, Research Section, the 2000 Census, and the State of Connecticut Department of Labor.


Population Growth

According to 2000 Census, the 2000 population of the Valley Region was 84,500 persons, up 5.22% or 4,192 persons since 191.  During this period, the State as a whole grew 3.60%.

Between 191 and 2000, Seymour grew the most rapidly at 8.16% and Ansonia the slowest at 0.82%.  No towns declined in population during the 191‑2000 period.

The Town Profiles estimated the 2003 Region population to be 86,053.

Population Projections

According to projections made by the Connecticut Department of Economic Development, the Region is expected to grow more rapidly than the State as a whole.  The Region is projected to grow from a total population of 86,053 persons in 2003 to 88,502 persons by the year 2008, representing an estimated 2.8% growth rate for that time period, lower than that expected for the state (3.5%).


Seymour (3.9%) is anticipated to be the Region’s fastest growing community.  “Your Town” is projected to have the least growth with 0.9% while Ansonia and Shelton have 2.6% and 3.2%, respectively.

Population Density

As in the past, the Valley has a higher concentration of population than the State.  In 2000, the Region had an average of 1,505 persons per square mile, compared to 680 persons for the State as a whole.  Ansonia had the highest concentration of population in the Region.  In 2000, Ansonia had 3,077 persons per square mile, followed by “Your Town” with 2,488 persons per square mile, Shelton with 1,247 persons and Seymour with 1,061 persons per square mile.


Using the estimated 2003 population, the density for the region was 1,510 persons per square mile, as compared to the state’s population density of 696 persons per square mile.  Ansonia is the most concentrated with 3,129 persons per square mile.  Seymour had only 1,088 persons per square mile, the lowest.  Shelton and “Your Town” had 1,272 and 2,502 persons per square mile, respectively.



Age Distribution


The Age Distribution data was gathered from the Town Profiles and is based on the estimated 2003 populations.


The Region’s age distribution remained fairly constant when compared to the age distribution within the State.  The under 5 age group represents 6% of the area’s population and 7% of that of the state. Ansonia held the high for the Region with 7% of its population in this age group, while in the remaining towns, 6% of their populations were under 5 years of age.


The 5-17 age group represented 17% of the area’s population and 18% of the state’s population.  Ansonia, Seymour and Shelton had the highest percentage of their populations between the ages of 5 and 17 (17%).  “Your Town”, however, had only 15% of its population in this age group.


The 18-24 year age group, represented 8% of the area’s population in 2003, and 9% of the state’s population.  In the Valley Region, Ansonia with 9% of it’s population in this age group, represented the high, while Shelton and Seymour with 7%, represented the low for the Region.  “Your Town”’s population between the ages of 18 and 24 was 8% of its total population.


The largest age group, the 25-49 year olds, represented 37% of the area’s population in 2003, and 36% for the state.  Seymour, with 39% of its population in this age group represented the high for the Region, while Shelton, with the low, had 35% of its population within this age group.


The 50-64 year age group and the 65 and over age group represent 18% and 15% of the area’s population, respectively.  While the 50-64 age group was 17% of the population for the state, the 65 and over age group was only 14% of the state’s population.  Shelton, with 20% of it’s population in the 50-64 year age category, represented the high for the Region, while Ansonia, with 16% of it’s population in this age group, represented the low for the Region.  “Your Town”, with 16% of it’s population in the 65 and over age group, represented the high for the Region, while Seymour, with 14% of it’s population in this age category, represented the low for the region.





Per Capita Income


Per capita income consists of the aggregate income of the population divided by the population.  In 2001, the Region had a per capita income of $28,527.  On a per capita basis, Shelton was the most well-to-do community with an income of $32,301 in 2001 based on State of Connecticut Department of Economic and Community Development.  The low in the Region was evidenced in Ansonia where 2001 income data indicates a per capita income of $22,434.



Educational Attainment


According to the 2000 Census data, the percent of the population for the state of people age 25 or older that have attended at least some post-secondary education was 55.53%.  For the Valley Region, Shelton had the highest with 58.09%, while Ansonia had the lowest percentage at 40.00%.  The remaining towns in the Region were 43.71% in “Your Town” and 50.70% in Seymour.





Information in this section comes primarily from the State of Connecticut Department of Labor, Employment Security Division, Office of Research and Information.


The Region’s labor force averaged a total of 44,444 persons in 2003, with 5.2% of the labor force unemployed.  Unemployment for the Region at that time was highest in Ansonia (6.7%), followed by “Your Town” (5.4%), Seymour (4.9%) and Shelton (4.6%).


In May of 2005, the Region’s labor force totaled 47,403 persons, with an unemployment rate of 5.1%.  Ansonia, with an unemployment rate of 6.5% represented the highest rate of unemployment in the towns of the Region.  The town of Shelton had the lowest rate of unemployment at 4.4%.  The remaining towns of “Your Town” and Seymour had unemployment rates of 6.0% and 4.8%, respectively.  At the time, the State had a seasonally adjusted unemployment rate of 5.3%.





Housing Stock in the VR


According to the Town Profiles, the Region’s housing stock totaled 35,045 units in 2002.  The total new permits authorized in 2001 numbered 213 and were 0.62% compared to the existing units in the Region.  As was the case during the 1970’s, the major contributing factor was most likely the growth in the adult age group, persons born during the Post World War II baby boom.  Other contributing factors are the increase in single person households due to increases in the elderly population and young adults postponing marriage.


The highest percentage of new permits as compared to existing units in the Region in 2001occurred in Shelton (0.81%), while Ansonia (0.28%) had the lowest rates of housing growth in the Region.  Shelton also experienced the largest numerical increase in new permits (119 permits) authorized for 2001 with Ansonia issuing the least new permits (22 permits).


According to the Town Profiles, single-unit homes numbered 22,747 and constituted 64.9% of the Region’s housing units, similar to that for the state (64.4%).  Shelton with 78.2% had the highest number of detached single-family homes in 2002, while “Your Town” with 47.1% had the lowest.


Cost of Housing


Two measures of housing costs are presented in this section: number of residential sales and median sales price. The following figures are for 2003.


Residential Sales


A total of 2,005 residential sales occurred in the Region in 2003.  The town of Shelton had the highest number (15 sales) of residential sales, while “Your Town” with 313 sales had the lowest.  The remaining towns in the Region showed 356 sales in Ansonia and 431 sales in Seymour.


Median Sales Price


The highest median sales price in the Valley Region was $280,000 in the town of Shelton, while the lowest was $162,000 in “Your Town”.  The remaining towns in the Region had median sales prices of $172,250 in Ansonia and $175,000 in Seymour.  The State’s median sales price was $198,10.






The City of “Your Town” is geographically situated in the southwest quadrant of the State of Connecticut, west of Connecticut Route 8, south of Waterbury, and north of Bridgeport.  The town has a total land area of 5.0 square miles, and is located in the Lower Naugatuck Valley, the area around the junction of the Naugatuck and Housatonic Rivers.  This confluence is at the head of the tidewaters, 12 miles north of Long Island Sound.  “Your Town” is part of New Haven County, and has a Mayor and Board of Aldermen form of government.


The land was originally a trading post, with the first year-round houses not built until 1654.  Though “Your Town” was recognized by the New Haven Colony as a town, Milford objected vehemently and the two merged. “Your Town” was named in May of 1675.  The town was incorporated on May 13, 1775, and the incorporation of the city occurred on June 7, 1893, along with the consolidation of the city and town.


The community had a population of 12,391 persons in 2000.  The population density for 2000 was 2,488 persons per square mile.  The State of Connecticut’s Department of Economic Development estimated the population in 2003 to be 12,458 persons with a population density of 2,502; it projects a population of 12,570 for the year 2008, an expected increase of 0.9% from 2003.


The per capita income for the town in 2001 was $25,780.  In May of 2005, “Your Town”’s labor force totaled 6,784 persons, with 6.0% unemployed, a rate higher than the seasonally adjusted rate for the State as a whole of 5.3%.


The existing housing stock totaled 5,603 units in 2002.  In 2003 there were 313 residential sales with  a median sales price of $162,000.


The Naugatuck Valley, which was the birthplace of the brass and rubber industries, is one of New England’s most highly diversified industrial areas, with over 175 manufacturing firms.  Principal industries in “Your Town” include metal processing and the manufacture of metal products, plastics, electronic products and printing and research and development centers.  Freight is served by Conrail and numerous motor common carriers.


The town is serviced by a police department, three fire stations, and a post office.  There are also three elementary schools, one high school and one Catholic school in the town.


Passenger transportation is served by Metro North Commuter Railroad Company, buses of Connecticut Transit from Bridgeport and New Haven, Valley Transportation Company from Bridgeport and Waterbury, and by Empire Bus Lines, Incorporated.  “Your Town” has its own postal service.





The subject property is situated in the southernmost section of the City of “Your Town”, Connecticut.  It is located along Main Street.


The immediate neighborhood can be defined as that which lies on or to the south of Main Street, with a full interchange of CT Route 8 one block to the west and parallel to the Naugatuck River which flows just east of Route 8. The area is also approximately three blocks north of the Housatonic River and approximately ¼ mile west of Bridge Street which provides access to the City of Shelton located on the other side of the Housatonic River.


Main Street, starting with the subject property and heading west to Bridge Street is primarily improved with a mix of similar design, mix-use improvements supporting business and professional space. This roadway also includes the relocated City Hall now located at the corner of Main Street and Elizabeth Street, approximately three blocks west.


Other landmarked properties include the local water treatment plant approximately 2 blocks south and the police facility and valley transport facility located across Main Street from the subject along Water Street.


Note: As previously stated, the subject is being considered by the City of “Your Town” for possible eminent domain proceedings. The subject and several adjacent properties are being considered in an overall redevelopment plan for the immediate subject area.  This area, which includes the subject property, has been underutilized for several years, with a majority of the properties either closed or struggling to exist. As a result, the City of “Your Town” is considering a plan for redevelopment.





The subject is located in a Center Design Development (CDD) district zone.  The purposes and intent of the Center Design Development regulations are to


  1. Encourage rehabilitation and redevelopment in the downtown area of “Your Town” and provide flexibility  of uses and design therein;


  1. Provide, whenever possible, for the preservation of meaningful historic buildings; promote appropriate architectural and site design; and provide amenities which will encourage pedestrian use and enjoyment of the city center;


  1. Encourage concentration in the existing downtown of businesses providing goods and services needed by the population and preserving this area of the city as the prime retail and service area;


  1. Permit development of residential and office uses to support and be served by such businesses;


  1. Prevent intrusion of business uses on nearby residential neighborhoods;


  1. Protect and enhance development in downtown against congestion, offensive noise, hazards or objectionable influences by restricting the types of development;


  1. Provide appropriate space to satisfy the needs of modern local retail development, including the need for off-street parking and loading facilities, and encourage local retail development to the mutual advantage of both consumers and merchants;


  1. Promote the most desirable use of land and direction of building development in accord with a well-considered plan, to promote stability of commercial development, to strengthen the economic base, to protect the character of downtown  and its particular suitability for specific uses, to conserve the value of land and buildings, and to protect the community’s tax revenues;


  1. Promote an improvement to the vehicular circulation patterns, reduce curb cuts on main arterials and provide safer pedestrian, bicycle and handicapped access ways separate, wherever possible, from vehicular drives and streets;


  1. Maintain the integrity and quality of design and appearance by providing uniform and appropriate architectural themes for the downtown through strict architectural and site design review as well as strict sign controls;


  1. Promote a density distribution which promotes reduction in traffic congestion;


  1. Promote redevelopment in accordance with the intent of these regulations.


B.    General requirements and provisions.  The following general requirements and provisions shall apply to center design developments:


  1. Provisions should be made for the integration of pedestrian, bicycle and handicapped access ways and vehicular circulation with adjacent sites;


  1. The inclusion of garaged parking and facilities offered for public use such as landscaped courts, sitting areas and pedestrian bridges over arterial or railroad lines is encouraged.


C.                           Following is a detailed list of the permitted use within this zoning district.


  1. The uses which will be considered in center design developments shall include but not be limited to the following:  retail, personal, business and financial services; professional and general offices; restaurants (excluding fast food); public and semipublic institutions; hotels, motels, conference centers, residential uses and clubs;


  1. Any use considered by the Commission shall be found to be harmonious with the goals and objectives of the Plan of Zoning, harmonious with center-type uses not disruptive of the general retail, service and residential character and function of the center and its pedestrian orientation; not of a quasi-industrial or highway-oriented character or overly dependent on truck or auto traffic as a primary means of conducting business;


D.    Location and site standards. Center design developments shall comply with the following location standards:  Center design developments shall be considered only within the center design zone as shown on the 1999 adopted Zoning Map.


  1. Bulk requirements.  Yard, setback, lot size, height, frontage requirement and use restrictions hereby are waived, provided that the spirit and intent of this section are complied with in the development plans as determined by the Commission.  The Commission may determine that certain setbacks be required within all or a portion of the perimeter of the site and shall exercise ultimate discretion as to whether the development plan does comply with the spirit and intent of this section.


  1. Parking requirements. The Commission may reduce the parking requirements up to twenty percent if it finds that the proposed uses, location of the site and the related facilities existing or proposed by the applicant will result in the generation of pedestrian, bicycle and mass transit trips in sufficient volumes to warrant the parking reduction.  Parking or vehicular access shall be avoided in front of the main building.  All required parking is to be located within the Center Design Development Zone.


  1. Signs.  The Commission may impose stricter requirements when, in its judgment, the specific proposal and site so necessitates.  All exterior lighting and signs shall be shown on plans, and detailed design (e.g., material, illumination, etc.) shall also be provided.


  1. Residential density.  Residential density may be approved up to 12 dwelling units per acre, provided that all requirements and standards for the proposed residential use and for other proposed uses are met.  The parking requirements shall be 1.5 per dwelling unit.


Based on the subject’s current design and mix-use, it is considered to be legal and in conformance with current zoning regulations.



SITE DESCRIPTION – The reader is directed to the site plan accompanying this report for a clearer understanding of the description which follows.


The subject site is an irregularly shaped parcel of CDD zoned land consisting of 1.19± acres along the south side of Main Street, just west of the on-ramp to CT Route 8 southbound, in the southernmost portion of the City of “Your Town”, Connecticut.  The site is at grade along its frontage and generally level throughout.  It is accessed from Main Street via a curb cut just west of the traffic signal at the intersection with Main Street and the on/off ramps of CT Route 8.


All public utilities are available to the subject site to include electric, telephone and cable service; natural gas; public water; as well as sanitary and storm sewers.


Reference to the City of “Your Town” Flood Insurance Rate Maps, specifically panel #01075-0002B, last revised July 16, 1991 indicates the subject to be in an area designated as Zone C (unshaded), defined as an area  of minimal flooding.


Based upon our discussions with City Officials, there is the possibility the subject is impacted by detrimental environmental “issues.”  However, at the client’s request, this value estimate is based upon the Hypothetical Condition (defined previously) that the site is free and clear of such “issues”.


This appraisal report and the value estimates contained herein, assume no potential liability resulting from any soil contamination due to the storage of hazardous waste materials and/or chemical spills, which may have occurred on the property over the years.  No evidence of contamination or hazardous material was observed on the site as of the date of our inspection.  The appraiser, however, is not qualified to detect various forms of potential hazardous waste material that may have an effect on the value of the property.




BUILDING DESCRIPTION – (Note:  Our description of the subject building is based upon our limited exterior inspection, Assessor’s Records, and our discussions with the “Your Town” Building Inspector and “Your Town” Fire Marshall).


The site described in the previous section is improved with an older (“Your Town” Assessor’s Records indicate that the original building dates back to circa 110), one-story, concrete block industrial building with a gross area of approximately 39,661 square feet, including approximately 11,544± square feet of lower level industrial space which is fully heated, fully sprinklered and full air-conditioned. According to the building inspector, through the years, the subject had previously been utilized as a bus depot and as bowling alleys.


The most recent occupant (Lifetouch) utilized the building as a photo center, used for processing and developing film and creating prints.  According to our sources, approximately the front one-fourth (1/4) of the main level is finished office space which is “dated.”  This area has primarily carpeted and tiled flooring, with drywall and modular partitioning and acoustical tile drop ceilings and recessed lighting.  There are separate men’s and lady’s bathroom facilities which are “dated” and, according to City officials, substandard as to a number of fixtures relative to the size of the building and potential number of employees.


The remainder of the main level is unfinished industrial work area for the photo center.  Here, there are concrete floors and open ceilings.  There are several small production offices and a lunchroom/cafeteria.  In addition there are several partitioned “darkrooms.”


The rear one-third (1/3±) of the building has a lower level (basement) which supported additional production area for the photo center, as well as storage space and some small offices. It is also accessible via a 4,000 pound freight elevator from the overhead door area (shipping/receiving) along the north side of the building, on the main level.


The entire building, including the lower level, has gas-fired hot-air heating and central air-conditioning.  Also, both levels are served with a wet sprinkler system.


Based upon our limited exterior inspection and discussions with “Your Town” City Officials (Building Inspector, Fire Marshall and Assessor), we consider the subject to be in generally average/good condition. However, it appears that the office areas are in need of renovation and updating.


Note: Our discussions with the “Your Town” Officials also found that the subject building is non-conforming to zoning because of insufficient on-site parking.  Therefore, whomever would buy and/or occupy the building would need to get a variance for parking depending upon the proposed use.






Real estate is valued in terms of its “Highest and Best Use”.  The highest and best use of the land or site, if vacant and available for use, may be different from the highest and best use of the improved property.  This will be true when the improvement is not an appropriate use and yet makes a contribution to total property value in excess of the value of the site.


“Highest and Best Use” may be defined as that reasonable and probable use which will support the highest present value as of the date of appraisal.  Alternatively, it is the most profitable, likely use to which a property can be put; it may be measured in terms of the present worth of the highest net return that the property can be expected to produce over a stipulated long‑run period of time.


The “Highest and Best Use” is that use from among one or more proposed uses that has been found to be legally permissible, physically possible, appropriately supported and financially feasible, and that results in the highest present land value.


When a property is improved, the highest, best and most probable use of the property with its existing improvements must be considered.  In addition, alteration, replacement or demolition of existing improvements is considered when it appears that there is a clear economic advantage in taking one of these actions.



As Improved


The subject property contains 1.19± acres of site area which is improved with an older  industrial building which is currently unoccupied.  The most recent use (Photo Center) is clearly physically possible and predates current zoning. The building is in average/good condition and, as described, is fully heated, sprinklered and air-conditioned.  Considering these factors, it is our opinion that the Highest and Best Use of the property “as improved” would be for its continued use as an industrial facility or conversion to some use allowed under present zoning.


Note: Any new occupant would need to have zoning permission for its intended use, which most likely would also include obtaining a variance for the amount of on-site parking.


As Vacant


If the site were vacant, it would necessarily need to conform with current zoning (CDD).  Based upon the subject’s site size (1.19 acres), in our opinion the Highest and Best Use of the site would be for eventual development according to the requirements of the CDD zone, when warranted by demand.  In our opinion, this could be either a stand-alone development of the site or a combining of this site with abutting properties, for a large scale development.





There are three generally recognized approaches to value, which may be used in estimating the value of real estate.


“COST APPROACH ‑ A method in which the value of a property is derived by estimating the replacement or reproduction cost of the improvements; deducting therefrom the estimated depreciation; and then adding the Market Value of the land.  This approach is based upon the assumption that the reproduction cost new normally sets the upper limit of building value provided that the improvement represents the Highest and Best Use of the land.”


“SALES COMPARISON APPROACH ‑ An appraisal technique in which the Market Value estimate is predicated based upon prices paid in actual market transactions and current listings, the former fixing the lower limit of value in a static or advancing market (price wise), and fixing the higher limit of value in a declining market; and the latter fixing the higher limit in any market.  It is a process of correlation and analysis of similar recently sold properties.  The reliability of this technique is dependent upon: (a) the degree of comparability of each property with the property under appraisal; (b) the time of the sale; (c) the verification of the sale data, and; (d) the absence of unusual conditions affecting the sale.”


“INCOME APPROACH ‑ An appraisal technique in which the anticipated net income is processed to indicate the capital amount of the investment which produces the net income.  The capital amount, called the capitalized value, is, in effect, the sum of the anticipated annual rents less the loss of interest until the time of collection.  The reliability of this technique is dependent upon four conditions:  (a) The reasonableness of the estimate of the anticipated net annual incomes; (b) the duration of the net annual income, usually the economic life of the building; (c) the capitalization (discount rate); and (d) the method of conversion (income to capital).”


                                              Appraisal Terminology and Handbook

                                              Fifth Edition

                                              American Institute of Real Estate




In developing the estimate of the Market Value of the property, all three recognized approaches to value have been considered within this report. The Cost Approach typically estimates the value of the subject land which is then added to the depreciated replacement value of the structure and site improvements.  In the case of the subject, which was originally built circa 110, estimating the accrued depreciation and/or functional obsolescence would be too subjective, therefore, unreliable.  Also, there is insufficient sales activity for similarly located, similarly zoned land with which to value the subject site, an integral component for this approach.  As a result, the Cost Approach to value was not developed.


The Sales Comparison Approach is an appraisal technique in which the Market Value estimate is predicated upon prices paid in actual market transactions and then current listings.  It is a process of valuing the property being appraised by comparing it with other then recently sold properties. Because no two properties are ever exactly alike, the terms and conditions of each sale often vary from property to property, requiring adjustments to be made for these differences.  All relevant sales have been considered, with adjustments being made for measurable differences, which are discussed in detail in that segment of the report.


The Income Approach involves an analysis of future benefits to the property in terms of it’s ability to provide a net annual income in dollars.  This estimated net return has then been capitalized at a rate commensurate with the risk inherent in the ownership of a property relative to the rate of return offered by alternative investments.  Based on the fact that the subject is currently vacant, the Income Approach utilizes an analysis of lease rates being incurred at similar industrial/warehouse structures which have been compared to the subject.  This correlation forms the basis for establishing estimated market rents for the subject building.  That rental income which would be achieved by the property has been analyzed and correlated to arrive at an indication of value by the Income Approach.


The final reconciliation is the application of the process of evaluating alternative conclusions and determining a final estimate of value based upon the indications derived from each of the approaches utilized in the appraisal.  That correlation results in a Market Value estimate of the Fee Simple Interest in the property being appraised as of December 3, 2013.  The estimate of Market Value is developed under the Hypothetical Condition that the property is free and clear of any on-site contamination and, further, this appraisal is made with the Extraordinary Assumption that the interior is in average/good condition, but somewhat dated.






The Sales Comparison Approach gives consideration to actual sales in the current real estate market for other similar properties, with adjustments made to reflect variations between the subject property and each sale.  These adjusted sales prices are then reduced to a sales price per square foot of building, and applied to the subject property so as to be indicative of the value for the subject.  In preparing the sales comparison analysis, significant consideration and emphasis has been placed on such factors as locational advantage or disadvantage, building size, date of sale and the condition of the property at the time of sale.


The following are industrial/warehouse sales which have been investigated and used as a basis for valuing the subject property.


Comparable Sale Number One:


This is a recent sale (August 18, 2013) of an older (Assessor’s Records indicate it was built circa 1945), one-story, concrete block industrial building situated on 1.69± acres of Industrial (IPD) zoned land at 149.5 Front Avenue, in West Haven, Connecticut.  This 6,001 square foot building, in poor condition at the time of sale, sold for $242,500, indicating a sales price per square foot of $40.41.  This transaction is evidenced by a Warranty Deed recorded in Volume 1600, Page 429 of the West Haven Land Records.


There was no financing recorded with this sale.


Comparable Sale Number Two:


This is a recent sale (August 19, 2013) of two older (Assessor’s Records indicate the first building was built circa 1981, with the second building being built circa 2002), one-story, metal sided, industrial warehouse buildings situated on 2.33± acres of Industrial (I-40) zoned land at 106 North Plains Industrial Road in Wallingford, CT.  These two buildings have a combined 35,077 square feet which sold for $1,120,000, indicating a sales price per square foot of $31.93.  This transaction is evidenced by a Warranty Deed recorded in Volume 1366, Page 575 of the Wallingford Land Records.


Wachovia Bank N.A. provided a $784,000, 6.1% loan for 5 years, with a balloon payment at the end.


Comparable Sale Number Three:


This is a recent sale (August 13, 2013) of the former Housatonic Lumber Company complex across the street from the subject.  Based upon our research of this property at “Your Town” City Hall, we have found that there are three main structures and several large open wood storage sheds.  According to Assessor’s Records, the majority of the buildings were built circa 1988, and most are one-story, metal-sided warehouse type buildings situated on combined 2.92± acres of CDD (Center Design Development) land at 23 Factory Street, “Your Town”, Connecticut.  These buildings have combined 38,083 square foot which sold for $1,042,508, indicating a sales price per square foot of $27.37.  This transaction is evidenced by a Quit Claim Deed recorded in Volume 587, Page 277 of the West Haven Land Records.


There was no financing recorded with this sale.


Comparable Sale Number Four:


This is a recent sale (April 20, 2013) of an older (Assessor’s Records indicate it was built circa 1989), one-story, concrete block and steel, industrial/warehouse building situated on 7.0± acres of Industrial (I-40) zoned land at 55 Pent Highway, in Wallingford, Connecticut.  This 34,800 square foot building, in good condition at the time of sale, sold for $1,596,000, indicating a sales price per square foot of $45.86.  This transaction is evidenced by a Warranty Deed recorded in Volume 1355, Page 579 of the Wallingford Land Records.


There was no financing recorded with this sale.


Comparable Sale Number Five:


This is a recent sale (December 5, 2008) of an older (Assessor’s Records indicate it was built circa 1925), one-story, steel and brick industrial building, situated on 1.0 acres of Industrial (IP) zoned land at 302 Platts Mill Road, in Waterbury, Connecticut.  This 13,147 square foot building sold for $375,000.00, indicating a sales price per square foot of $28.52.  This transaction is evidenced by an Executrix’s Deed recorded in Volume 6463, Page 250 of the Waterbury Land Records.


There was no financing recorded with this sale.


Comparable Sale Number Six:


This is a recent sale (December 24, 2008) of an older (Assessor’s Records indicate it was built circa 1974), one-story, concrete block industrial building situated on 1.29± acres of Industrial (IND) zoned land at 25 Gramar Avenue, in Prospect, Connecticut.  This 13,120 square foot building sold for $400,000, indicating a sales price per square foot of $30.49.  This transaction is evidenced by a Warranty Deed recorded in Volume 623, Page 250 of the Prospect Land Records.


The seller provided financing of $350,000 at 3.5% interest for 12 years.



Analysis of Sales Data


The six (6) comparable sales considered indicate an unadjusted sales price range of  between $242,500.00 and $1,596,000.00 and an unadjusted sales price per square foot range of between $27.37 and $45.86.


Each of the six (6) sales has been adjusted appropriately downward for changes in market conditions, reflecting the general downward trend in values over the last year.  We have utilized an annualized adjustment rate of 6% (0.5% per month) to reflect this trend.


In our opinion, the comparables are in similar industrial locations to that of the subject, with no need for adjustment.


Comparables #2, #3 and #4 are similar in size to the subject with no adjustment necessary for that factor.  The remaining three (3) sales (#1, #5 and #6) are smaller than the subject, in varying degrees.  Each has been adjusted appropriately downward for size, reflecting the generally held principle that buildings smaller than the subject typically sell at a higher per square foot sales price.


Finally, we have considered an adjustment for condition, intended to reflect any significant differences in physical condition and/or any atypical conditions associated with any of the comparable sales.  In that regard, comparables #1, #2, #4, #5 and #6 required some upward adjustment for overall inferior physical condition.  All six (6) comparables required upward adjustment for not having full air-conditioning, like the subject. In addition, comparables #1, #2 and #6 required upward adjustment for no sprinkler systems.   Comparable #6 required some downward adjustment, reflecting the advantage of seller financing.


The adjustments described above area summarized in the following table.



The adjustments listed above result in an adjusted sales price for each of the sales as shown on the following table.




Following adjustments, the six (6) comparable sales used as a basis for establishing value of the property, indicate a sales price per square foot range of $26.83 to $46.32.  This is a relatively close range of unit prices and considering the number of sales used and their general similarity to the subject, in our opinion, they form a good basis for estimating the Market Value of the subject by this approach.


Statistically, a closer range of value is developed.  Following appropriate adjustments, the six (6) sales considered develop a mean value of $34.96 per square foot and a median value of $32.37 per square foot of building.  While these indicators have not been considered exclusively in developing our opinion of value of the property by this approach, they, along with the results of the analysis of each of the sales, support our value estimate.  As a result, it is our opinion that the land and improvements being valued have a value as indicated by the Sales Comparison Approach of approximately $34.00 per square foot.


Then: 39,661 s.f. @ $34.00/s.f. =                                            $1,348,474.00

Rounded to:                                                                  $1,350,000.00









This approach estimates the Value of the subject as an investment property with the entire space offered for rent at current market rates.  This analysis considers the income that can be generated by the property if it were not owner occupied.  Adjusting that potential income for vacancy and operating expenses results in net operating income. It is this net operating income that has been capitalized at an appropriate rate to arrive at an opinion of the Value of the property by the Income Approach.




To determine the Potential Gross Income that the building could generate if offered for lease at the present time, we considered leasing and occupancy factors for industrial buildings in the market area.  The subject is vacant at the present time.


Our review of the marketplace discloses that this type of space typically rents to a single user on a net basis with the tenant responsible for operating expenses associated with the building and the landlord responsible for major repairs or capital improvements.  Recent activity has disclosed rentals on this basis ranging from a low of $3.00 per square foot to a high of $5.50 per square foot, based on size, location, condition and overall fit-up.  The subject property is a functioning industrial facility with several means of access into the building. Further, the building has adequate size and utilities to support industrial use and is located with relatively easy access to support services and the highway network.  Considering these factors, the condition of the building, its size, fit-up and general location, we consider that if the building were offered for rent at the present time it could achieve a rental rate of approximately $5.00 per square foot on a net basis.


Note: This projected rent is near the high end of the rental range based upon its being fully air-conditioned and fully sprinklered. However, in our opinion, it is most likely any tenant would only pay rent for the main level space, at that rate.




The subject building is currently vacant. If it were on the market for lease, there could be an extended rent-up period.  The subject’s positive aspects include its air-conditioning and sprinkler system and location (just off full interchange with CT Rte. 8).  Its negatives, in addition to the very slow economy, are its “dated” condition and insufficient on-site parking, which may limit the amount of useable space.


In estimating a vacancy/rent loss allowance, we have estimated that, once rented, the tenant would likely remain for an extended period. In order to allow for lost revenue during the marketing process, any eventual tenant turnover, and/or for some uncollected rent, we have estimated an average annual vacancy/rent loss allowance of 15% of the Potential Gross Income.




Conditions in the marketplace are such that industrial leases for similar properties have been established on a net basis with the tenant responsible for operating expenses.  Even in such a net lease arrangement, some expenses are incurred by the owner and should be considered.


Two expenses are included which may not typically show up on a financial statement but in fact represent a real expense to the owner.  The first is an expense for management (5% of Effective Gross Income) that includes the cost of rent collection, lease negotiations and tenant relations.  The second expense is the establishment of a reserve for replacement (5% of Effective Gross Income) which is a sinking fund to accumulate a reserve for future capital improvements or major repairs.


Each of those expenses, along with income and vacancy assumptions, is shown on the following operating statement, resulting in an estimate of net operating income for the property of $107,548.00.





Capitalization Rate


In arriving at an appropriate capitalization rate for the property, consideration has been given to those factors, which typically motivate an investor.  Since the real estate is one investment opportunity among many which exist in the capital markets, the relative risks and rewards of such an investment must be considered.  The two primary factors which influence investor decisions and therefore influence the capitalization rate, are the amount of equity required and the return on that equity, and the mortgage rate and terms available for property similar to the real estate being considered.  This approach, known as the Mortgage‑Equity Capitalization Technique, considers those two factors and further considers an estimated holding period for such property, and the rate at which the property might appreciate in value over that holding period.


Holding Period – Because of the condition, quality, and location of the building and further because of the occupancy, it is anticipated that an investor would acquire this property and anticipate holding it for a reasonably long period of time.  For this reason, we have used a ten year holding period which reflects an appropriate amount of time to benefit from cash flow and tax shelters, to reduce the principal amount of the mortgage through debt service payments, and to allow for some appreciation in value.



Equity Yield Rate – A review of the national statistical data from the third quarter 2013, as provided in the Real Estate Investors Survey by Peter F. Korpacz Associates, Inc. of Smithtown, New York, the National Warehouse Market shows equity internal rates of return ranging from approximately 7.5% to 12.5%, with the average rate being approximately 9.35%.  Considering the size, location and occupancy of the subject, this investment is somewhat more risky than some suburban industrial investment, and, for these reasons, we have used a 10% equity yield rate.



Mortgage Rate and Term – Our survey of local banks and real estate lenders indicates that mortgages for industrial properties were being offered during December 2013 in the range of 6% to 8% for terms ranging from 10 to 30 years.  Based on this data, we have estimated an applicable mortgage rate of 7% and a mortgage term of 15 years for the subject property.  Likewise, we have surveyed lenders to determine an appropriate loan to value ratio and find a range of 70% to 75% would have applied.  For these reasons, we have applied a 70% loan to value ratio to the financing for the subject.



Appreciation of Value – Because of the current trends in the overall economy, and the  uncertainty for the near future, we have not projected any appreciation.



a 10 year holding period;

a 10 % equity yield rate;

a 7 % mortgage rate;

a 15 year mortgage term;

a 70 % loan to value ratio; and

a 0 % appreciation in value.




Applying these factors to the Ellwood Formula for Mortgage‑Equity Capitalization results in the following:



               ELLWOOD FORMULA


Ro  =  Ye  ‑  M  (Ye  +  P * SFF  ‑  Rm)  ‑  Ù  o * SFF


Ro  =  0.081517


Rounded to:  0.082



$107,548.00 (net income) capitalized @ 0.082 =                    $1,311,561.00

Rounded to:                                                                             $1,312,000.00








The purpose of this report is to develop an opinion of Market Value of the property.  Considering the two approaches which have been used, the following value indications have been developed.


Value Indicated by Sales Comparison Approach:                               $1,350,000.00

Value Indicated by Income Approach:                                               $1,312,000.00


A relatively close range of value is developed from the two approaches.  The Sales Comparison Approach has relied upon a range of sales with sufficient similarity to the subject property to make the results of this approach reliable.  Further, because these sales are relatively recent, they reflect the current actions of buyers and investors in the marketplace for such property.


The Income Approach has relied upon potential performance for the subject if fully offered for lease.  The data developed is considered to be reliable, yet it is recognized that the subject property had a relatively long history of occupancy by the owner.  This can lead to a subjective conclusion of income potential for the property.


Since the objective is to arrive at the Market Value for the property, greater weight has been given to the results of the Sales Comparison Approach which reflects present actions within the marketplace.  The results of the Income Approach support our final value conclusion.


Based on the data contained within this report and the analyses which have been made of that data, it is our opinion that the value of the property has a Market Value, as of December 3, 2013, given the earlier stated Extraordinary Assumption and the Hypothetical Condition, of:









The undersigned does hereby certify that, to the best of my knowledge and belief, except as otherwise noted in this appraisal report:


1.        I have no present or prospective interest or bias with respect to the property that is the subject of this report, and I have no personal interest or bias with respect to the parties involved with the assignment.


2.        I will not reveal the confidential findings and results of this appraisal nor will I disclose confidential factual data obtained from the client or the results of an assignment prepared for a client to anyone other than: 1) the client and persons specifically authorized by the client; 2) such third parties as may be authorized by due process of law; and 3) a duly authorized professional peer review committee.


3.        That my opinion of the market value is based upon my independent appraisal and the exercise of my professional judgment without collaboration or direction as to said value.


4.        To the best of my knowledge and belief, the statements of fact contained in this appraisal report, upon which the analysis, opinions, and conclusions expressed herein are based, are true and correct.  No pertinent facts or information have been knowingly overlooked.


5.        My analyses, opinions and conclusions were developed, and this report has been prepared, in conformity with the UNIFORM STANDARDS OF PROFESSIONAL APPRAISAL PRACTICE, as promulgated by the APPRAISAL STANDARDS BOARD OF THE APPRAISAL FOUNDATION.


6.        The reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions, and are my personal, impartial and unbiased professional analyses, opinions, and conclusions.


7.        No one provided significant professional assistance to the person (or persons) signing this report except those, if any, who have been specifically acknowledged.


8.        My engagement in this assignment and/or my compensation for completing this assignment are not contingent upon the 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.


  1. The appraisal assignment was not based on a requested minimum valuation, a specific valuation, or the approval of a loan.


10.       James E. Dillon has made a limited, exterior inspection of the subject property.  Ronald M. Diorio has made a limited, exterior inspection of the subject property.





Disclosure of the contents of this appraisal report is governed by the Uniform Standards of Professional Appraisal Practice as promulgated by the Appraisal Standards Board of the Appraisal Foundation.


Neither all nor any part of the contents of this report (especially any conclusions as to the value, the identity of the appraiser or the firm with which he is connected) shall be disseminated to the public through advertising media, public relations media, news media, sales media, or any other public means of communication without the prior written consent and approval of the undersigned.


By reason of our investigation and by virtue of our experience, we have been able to form and have formed the opinion that, as of December 3, 2013, the subject property has a Market Value of:







James E. Dillon                                                                       Ronald M. Diorio




At the Request of
















As of

December 3, 2013

Prepared by




Prepared on

December 15, 2013




December 15, 2013

Joseph Smith

City of “Your Town”

1 Main Street

“Your Town”, Connecticut 06418


RE:      Appraisal of Property at

1 Main Street

“Your Town”, Connecticut


Dear Mr. Smith:


In accordance with your request, we have made a limited, exterior inspection of the subject for the purpose of estimating the “As-Is” market value of the property. The effective date of value is December 3, 2013, the date of our latest inspection of the property. (Note:  The subject photos were taken at the time of an earlier limited exterior inspection [November 19, 2013]).


The intended use of this report is possible eminent domain proceedings by the City of “Your Town”.  The intended users are the Corporation Counsel and other city officials of the City of “Your Town”.


Note: At the request of the client, we did a limited exterior inspection of the property.  Therefore, in determining the interior layout and condition of the subject, we have further relied on our discussions with City of “Your Town” officials (Assessor, Building Inspector and Fire Marshall).  Our representations as to the interior layout and condition of the subject are based upon Assessor’s Records and those discussions and are assumed to be accurate.  This is an Extraordinary Assumption (defined in the body of this report) which, if proven to be false, could affect our value estimate.


Furthermore, based upon our discussions with these City officials, it is likely that the subject property has some environmental “issues”.  However, at the request of the client, we are valuing the property under the Hypothetical Condition (defined in the body of this report) that the property is free and clear of any environmental “issues.”




The property being appraised is a 1.19± acre parcel of CDD (Center Design Development) zoned land along the south side of Main Street, just west of the on-ramp to Connecticut Route 8, southbound, in the southernmost portion of the City of “Your Town”.  The site is improved with an older (Assessor’s Records indicate it was originally built circa 110), one-story, concrete block industrial building with a gross area of approximately 39,661± square feet , including 11,544± square feet of lower level industrial space which is heated, sprinklered and air-conditioned.  Based upon our limited, exterior inspection and our discussions with City officials, we considered this subject to be in average/good overall condition.


According to the City Officials and the Assessor’s Land Records, the main level (28,117± s.f.) is approximately one- fourth (1/4) finished office space (average condition but somewhat dated), with the remaining three-fourths (3/4) being industrial production area, most recently used in the processing, developing and printing of film.  The lower level has a similar industrial finish and was used for film processing as well as for storage.  The entire building is heated, sprinklered and air-conditioned.


In estimating the “As-Is” Market Value of the subject, under the Extraordinary Assumption and Hypothetical Condition outlined above, we have researched the land records of the City of “Your Town” and the broader market area.  We have found and utilized recent sales of similar older industrial/warehouse facilities.  The result is an estimate of value by the Sales Comparison Approach.


In addition, we considered the income producing potential of this subject, if it were on the market for rental (it is currently vacant).  The result is an estimate of value by the Income Approach.


A correlation of the data from these analysis has provided our estimate of the “As-Is” Market Value, as of December 3, 2013.


Based upon the foregoing, it is our opinion that the “As-Is” Market Value of the subject, with the Extraordinary Assumption and Hypothetical Condition outlined above, as of December 3, 2013, is:








The analyses, opinions and conclusions which support this opinion of value are contained within this report and it is recommended that the entire report be considered in order to fully understand our value conclusion.


This report is intended for use only by the client, and for the intended purpose stated herein.  Use by others, for any purpose, is not authorized without the prior written consent and approval of Nocera, Dillon & Diorio LLC.



This report is prepared in conjunction with the attached Certification and is subject to the Assumptions and Limiting Conditions which are also attached.


Respectfully submitted,





James E. Dillon                                                                       Ronald M. Diorio


Certified General R. E. Appraiser                                                      Certified General R.E. Appraiser

License No.:  RCG. 168                                                                     License No.: RCG. 159

Expiration Date: April 30, 2010                                                         Expiration Date: April 30, 2010






Summary of Salient Facts and Conclusions




Property Location:                     1 Main Street

“Your Town”, Connecticut



Interest Appraised:                     “As-Is” Market Value subject to Extraordinary Assumption (as to interior layout and condition) and Hypothetical Condition (Valued as a “clean” site).



Legal Reference:                        Volume 192, Page 882



Date of Appraisal:                      December 3, 2013



Site:                                         1.19± acres


Building Size:                            39,661± s.f.


Zoning:                                     CDD – Center Design Development


Tax Data:                                 Current Assessment:   (2008 G.L.)   $1,628,61.00

Current Tax Rate: (2000 Tax Year)   26.4 Mils

Current Annual Tax Burden:            $42,997.42


Current Use:                             High-Bay Industrial Warehouse



Highest and Best Use:                 Current Use


 “As-Is” Market Value:……………………………………………………… $1,340,000.00





Table of Contents



                                                                                                                Page No.


Photographs of Subject Property…………………………………………………………………..     i


Identification of Property…………………………………………………………………………..     1

Purpose of Appraisal………………………………………………………………………………..    1

Definitions…………………………………………………………………………………………..     1

Marketing Time……………………………………………………………………………………….. 2

Disclosure of Competency………………………………………………………………………….    3

American with Disabilities Act………………………………………………………………………. 3

Scope of Work………………………………………………………………………………………… 3

Legal Description……………………………………………………………………………………    4

Assessment Data and Tax Burden………………………………………………………………..     4

Regional Characteristics……………………………………………………………………………     4

General Population Trends………………………………………………………………………     5

Labor Force and Employment…………………………………………………………………..     7

Housing…………………………………………………………………………………………….    7

Community Data…………………………………………………………………………………….    8

Neighborhood Data………………………………………………………………………………….    9

Zoning………………………………………………………………………………………………    10

Site Description…………………………………………………………………………………….    12

Building Description…………………………………………………………………………………. 13

Highest and Best Use………………………………………………………………………………    13

Valuation Premise………………………………………………………………………………………. 14

Sales Comparison Approach………………………………………………………………………… 16

Income Approach……………………………………………………………………………………. 20



Standard Form Restrictions Upon Disclosure and Use

Assumptions and Limited Conditions


Legal Document

Regional Characteristics Tables and Charts

Qualifications of Consultants

Partial List of Clients








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Diorio Real Estate Appraisal Services (203) 755-7965 525 Meriden Road, Waterbury, CT 06705

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