Sales Comparison Approach
The following map and table summarize the comparable data used in the valuation of the subject. A detailed description of each transaction is included in the addenda.
SUMMARY OF COMPARABLE OFFICE SALES
Land YOC / NRA Actual Sale Adjusted Sale Price No. Property Name Type Date (Acres) Reno'd (SF) Price Price 1 Per SF 1 Occ.
1 Old Post Office & Courthouse, 100 NE 1st Avenue Miami, FL 33132
Sale Jun-14 0.21 1914 / 2003
25,500 $11,000,000 $6,500,000 $254.90 39%
2 Power Studios, 55-57 N.E. 1st Street Miami, FL 33132
Sale Sep-14 0.30 1950 22,341 $7,300,000 $7,300,000 $326.75 50%
3 140 Building, 140 N Miami Avenue Miami, FL 33128
Sale Jan-15 0.34 1925 25,375 $7,750,000 $7,750,000 $305.42 89%
4 Dade Commonwealth Building, 139 NE 1st Street, Miami, FL 33132
Sale Nov-15 0.17 1927 / 2004
38,122 $9,200,000 $9,200,000 $241.33 39%
5 Wynwood Treehouse, 2210 NW Miami Court Miami, FL 33127
Sale Jun-16 0.31 1946 / 1995
7,806 $3,850,000 $3,850,000 $493.21 0%
Subj. Historic Citizen Bank Building, 1367 North Miami Avenue Miami, FL 33132
Contract Mar-17 0.24 1924 14,820 $5,500,000 $5,500,000 $371.12 0%
1 Adjusted sale price for cash equivalency, lease-up and/or deferred maintenance (where applicable) Compiled by CBRE
Transaction
The sales utilized represent the best data available for comparison with the subject. They were selected from our research of comparable improved sales within a 1-to-15 block radius of the subject. These sales were chosen based upon location, age/condition, size and physical characteristics.
DISCUSSION/ANALYSIS OF IMPROVED SALES
We have considered similarities and differences for each of the comparable improved sales in direct comparison to the subject property at stabilization. We have considered adjustments to the comparable sales for differences and improving market conditions (time), condition of sale, i.e.
premium for assemblage to an abutting property of same owner/buyer, location, size/value, age/condition, off-street parking and land-to-building ratios when compared to the subject property As Is.
In addition, we are valuing the subject property As Is, including any contributory value of the TDRs. This is consistent with the majority of comparable sales analyzed that have local or national historic landmark potential and have all traded with the TDRs intact.
Improved Sale One
According to historic accounts and official references, this comparable sale property was constructed over three years, between 1912–14, and was designed by Kiehnel and Elliott and Oscar Wenderoth. In January 1989, the subject property was added to the U.S. National Register of Historic Places. More recently, the 1st & 2nd floor of the property was tenant leased to Office Depot in 1991 and then to the Miami Center for Architecture & Design in 2012, and still occupies the 1st & 2nd floors based on a five (5) and six (6) month lease term with an effective date of June 12, 2012, plus one (1), five (5) year option to extend.
The underlying site zoning is a high density, T6-80, Urban Core classification and the historic status makes the ownership of the property eligible for the sell-off of approximately 188,920-SF of Transfer of Development Rights (TDRs), i.e. the spread between the existing building square footage and the “as of right” zoning FAR/FLR (floor-area-ratio/floor-lot-ratio), subject to approval and issuance of a Certificate of TDRs from the City of Miami.
The prior owner acquired the property in 2000 and was considering a condo conversion plan.
The current owner/buyer paid $11,000,000 for the Post Office and a 15,000-SF surface parking lot fronting NE 2nd Street. We have abstracted the surface lot from the acquisition of the Post Office by allocating $300.00-PSF to the site area based on market conditions at time of sale in June 2014. The current owner/developer is proposing a $6,336,000 construction cost budget to renovate and repurpose the property into a food hall with market and artisan retail & restaurant vendors and has gutted the basement (6,000-SF for back-of-house), and the 3rd floor & the 4th floor (3,500-SF attic) in preparation of that plan. The difference between the gross building area and the net rentable area presented is the basement & attic areas are in As Is condition at time of
sale. Attachment: 2100 Backup Document (2100 : Resolution Authorizing the Purchase of Property Located at 1367 North Miami Avenue)
Sales Comparison Approach We adjusted Sale 1 upwards for improving market conditions between sale transaction date and the effective date of this appraisal. We also adjusted Sale 1 upwards for larger size/value relationship, downwards for superior age/condition and downwards for superior zoning/density
& potential for TDRs when compared to the subject property.
Improved Sale Two
This comparable sale is a mixed-use retail/office building that abuts & wraps around the Old Post Office & Courthouse at the corner of NE 1st Street & NE 1st Avenue and was built in the 1950’s-built as an addition to the Historic Post Office. The current buyer is assembling multiple properties within the downtown CBD submarket. The tenant base is comprised mostly of ground floor retail Chrono Sky Inc. Watch Shop, Yaffa & Sons Jewelry, Precious and Hippiechic. Seconed floor tenants comprise George Kovacs Investments, H & S Jewelry, Inter Arms Trading, JNS Jewelry Repair and Mario's Casting Jewelry. The transaction was facilitated with a short term,
$4,000,000 purchase money mortgage. We also noted the seller previously acquired the property in March 2012 for $2,200,000.
We adjusted Sale 2 downwards for superior property rights conveyed, i.e. leased fee interest with tenant revenue and upwards for improving market conditions between sale transaction date and effective date of the appraisal. We also adjusted Sale 2 upwards for larger size/value relationship, downwards for superior age/condition and downwards for superior retail tenancy when compared to the subject property.
Improved Sale Three
This is the sale of a multi-tenant building located at the southwest corner of NW 2nd Street and North Miami Avenue, within the CBD of Miami, Miami-Dade County, Florida. The property consists of a two-story building with 25,375 SF situated on a 0.34-acre site. The property was built during 1925 and was in fair condition at time of sale. The property was under contract for 30 to 45 days and closed January 2015 for $7,750,000 ($305.42/SF of building area). The buyer purchased the property with the intent to remodel & re-lease with retail and office tenants.
This was an "arm’s length" transaction.
We adjusted Sale 3 downwards for superior property rights conveyed, i.e. leased fee interest with tenant revenue and upwards for improving market conditions between sale transaction date and effective date of the appraisal. We also adjusted Sale 3 upwards for larger size/value relationship and downwards for superior zoning/density & potential for TDRs when compared to the subject property.
Improved Sale Four
This comparable sale property is a 27,911-square foot (usable and 38,122-square feet of rentable area, including common areas), seven-story, urban office building located at 139 N.E.
1st Street in the downtown Miami central business district (CBD). The improvements were
core zoned site. Currently, the property is 39% leased. We also noted, that the property was originally developed to 17-stories and severely damaged in the Hurricane of 1926 forcing the removal of the top 10-floors. Also notable, is the property was added to the U.S. National Register of Historic Places in January 1989 based on the neo-classicism architectural style that represents the opulence of the 1920's economic boom. The purchase contract is dated September 2014 at a purchase price of $9,200,000 with the closing date revised several times and ultimately closing in November 2015. The buyer intends on adding 7-floors stacked on top of the existing roof and converting the subject property into a 122-room boutique hotel including retail/restaurant space and a sundeck with spa on the existing roof/future 8th floor.
We adjusted Sale 4 downwards for superior property rights conveyed, i.e. leased fee interest with tenant revenue and upwards for improving market conditions between sale transaction date and effective date of the appraisal. We also adjusted Sale 4 upwards for larger size/value relationship, downwards for superior age/condition and downwards for superior zoning/density
& potential for TDRs when compared to the subject property.
Improved Sale Five
This comparable sale is a vacant 7,806-SF office/warehouse property with fenced yard located at the northwest corner of NW 22nd Street and NW Miami Court within the Wynwood Arts District.
The property was broker listed at $4,100,000 and contracted "all cash" at $3,850,000. The property was marketed as a renovation investment and the buyer finalized the approvals to demolish 4,608-SF of warehouse area and redevelop /renovate a total of 7,750-SF for multi-tenant retail showroom with open floor plans, mezzanines, glass storefronts, vanilla shell condition, polished concrete floors, exposed duct work and on-site parking. Rental rates for renovated retail space is $45.00-PSF, triple net for 1,028 & 2,095 square foot bays.
We adjusted Sale 5 downwards for smaller size/value relationship, downwards for superior age/condition, downwards for superior off-site parking and downwards for superior one-story retail re-purpose versus multi-story when compared to the subject property.
SUMMARY OF ADJUSTMENTS
Based on our comparative analysis, the following chart summarizes the adjustments warranted to each comparable.
Attachment: 2100 Backup Document (2100 : Resolution Authorizing the Purchase of Property Located at 1367 North Miami Avenue)
Sales Comparison Approach
OFFICE SALES ADJUSTMENT GRID
Comparable Number 1 2 3 4 5 Subject
Transaction Type Sale Sale Sale Sale Sale Contract
Transaction Date Jun-14 Sep-14 Jan-15 Nov-15 Jun-16 Mar-17
Year Built/Renovated 1914 / 2003 1950 1925 1927 / 2004 1946 / 1995 1924
NRA (SF) 25,500 22,341 25,375 38,122 7,806 14,820
Actual Sale Price $11,000,000 $7,300,000 $7,750,000 $9,200,000 $3,850,000 $5,500,000 Adjusted Sale Price 1 $6,500,000 $7,300,000 $7,750,000 $9,200,000 $3,850,000 $5,500,000
Price Per SF 1 $254.90 $326.75 $305.42 $241.33 $493.21 $371.12
Occupancy 39% 50% 89% 39% 0% 0%
Adj. Price Per SF $254.90 $326.75 $305.42 $241.33 $493.21 $371.12
Property Rights Conveyed 0% -5% -5% -5% 0% 0%
Financing Terms 1 0% 0% 0% 0% 0% 0%
Conditions of Sale 0% 0% 0% 0% 0% 0%
Market Conditions (Time) 10% 10% 5% 5% 0% 0%
Subtotal - Price Per SF $280.39 $341.45 $304.66 $240.73 $493.21 $371.12
Location 0% 0% 0% 0% 0% 0%
Size 10% 10% 10% 20% -10% 0%
Age/Condition -5% -10% -10% -5% -5% 0%
Quality of Construction 0% 0% 0% 0% 0% 0%
Parking 0% 0% 0% 0% -10% 0%
Tenancy 0% -5% 0% 0% 0% 0%
Multi-Story vs. 1-Story 0% 0% 0% 0% -10% 0%
Zoning/Density/TDRs -5% 0% -5% -5% 0% 0%
Total Other Adjustments 0% -5% -5% 10% -35% 0%
Indicated Value Per SF $280.39 $324.38 $289.42 $264.80 $320.59 $371.12
1 Adjusted for cash equivalency, lease-up and/or deferred maintenance (where applicable) Compiled by CBRE
SALE PRICE PER SQUARE FOOT CONCLUSION
Overall, Comparables 1, 3 & 5 were the most representative of the subject, and warranted greatest consideration because of location and physical characteristics. In addition, we have also considered the contract purchase price reported for the subject property. The following chart presents the valuation conclusion:
SALES COMPARISON APPROACH
NRA (SF) X Value Per SF = Value
14,820 X $280.00 = $4,149,600
14,820 X $320.00 = $4,742,400
VALUE CONCLUSION
Indicated Value $4,500,000
Deferred Maintenance $0
Lease-Up Discount $0
Indicated As Is Value $4,500,000
Rounded $4,500,000
Value Per SF $303.64
Compiled by CBRE