\n SUMMARY OF SALIENT FACTS AND CONCLUSIONS<\/p>\n
\nGENERAL DATA<\/p>\nEffective Date of Value: January 1, 1994<\/p>\n
Last Date of Inspection: November 27, 1994<\/p>\n
Property Identification: GOODYEAR CLINIC, 851 Goodyear Avenue, Gadsden, Alabama
\n HAMITER BUILDING, 100 Medical Center Drive, Gadsden, Alabama
\n BAPTIST MEDICAL BUILDING II, 300 Medical Center Drive, Gadsden, Alabama<\/p>\n
Interest Appraised: Leased Fee Estate<\/p>\n
Building Area: Goodyear Clinic: 13,998 Gross SF\/13,998 Leasable SF
\n Hamiter Building: 51,000 Gross SF\/38,154 Leasable SF
\n Baptist Medical Building II: 62,500 Gross SF\/50,589 Leasable SF<\/p>\n
Subject Land Size: Goodyear Clinic: 1.19 acres\/51,836 SF
\n Hamiter Building: 1.30 acres\/56,628 SF
\n Baptist Medical Building II: 0.65 acres\/28,314 SF<\/p>\n
Improvements
\n Description: GOODYEAR CLINIC: A one-story, Class C, structure constructed in 1977.<\/p>\n
HAMITER BUILDING: A four-story, Class B, structure constructed in 1979.<\/p>\n
BAPTIST MEDICAL BUILDING II: A five-story, Class B, structure constructed in 1993.<\/p>\n
Significant Assumption: All parking easements will be granted to allow for full utilization.<\/p>\n
CONCLUSIONS<\/p>\n
Cost Approach: $13,650,000
\nSales Comparison Approach: $12,750,000
\nIncome Approach: $12,600,000<\/p>\n
Final Value Estimate: $12,600,000
\n ===========
\n<\/c><\/s><\/caption>\n<\/table>\n
11<\/p>\n
\n\n TABLE OF CONTENTS<\/p>\n Page
\n —-
\n
\nTransmittal Letter
\nAppraiser Certifications
\nStatement of Facts and Limiting Conditions
\nSummary of Salient Facts and Conclusions<\/p>\nINTRODUCTION 1
\n Property Identification 1
\n Purpose and Effective Date of the Appraisal 1
\n Function of the Appraisal 1
\n Scope of the Appraisal 1
\n Property Rights Appraised 2
\n Definition of Value 2
\n History of the Property 3
\n History and Nature of the Business Environment 3<\/p>\n
DESCRIPTIVE DATA 6
\n Regional Data 6
\n Neighborhood Data 9
\n Real Estate Taxes and Assessments 9
\n Zoning 10
\n Site Analysis 10
\n Buildings and Site Improvements 13<\/p>\n
HIGHEST AND BEST USE 16<\/p>\n
VALUATION SECTION 19
\n Valuation Methodology 19
\n Cost Approach 20
\n Sales Comparison Approach 34
\n Income Approach 41<\/p>\n
CORRELATION AND CONCLUSION 43
\n<\/c><\/s><\/caption>\n<\/table>\n
12
\n TABLE OF CONTENTS
\n —————–<\/p>\n
EXHIBIT SECTION
\n– —————<\/p>\n
Exhibit A – Professional Qualifications
\nExhibit B – Legal Description
\nExhibit C – Area Map
\nExhibit D – Neighborhood Map
\nExhibit E – Comparable Land Sale Location Map
\nExhibit F – Tax Map
\nExhibit G – Building Descriptions
\nExhibit H – Rent Comparables Summary
\nExhibit I – Subject Photographs
\n 13
\n INTRODUCTION<\/p>\n
PROPERTY IDENTIFICATION<\/p>\n
The subject of this appraisal is three professional office buildings located in
\nGadsden, Alabama. The Goodyear Clinic, located at 851 Goodyear Avenue, is a
\none-story, 13,988 square foot building constructed in 1977 with a leasable area
\nof 13,998 square feet. This building is currently 100 percent occupied. The
\nHamiter Building, located at 100 Medical Center Drive, is a four-story, 51,000
\nsquare foot building constructed in 1979 with a leasable area of 38,154 square
\nfeet. This building is currently 100 percent occupied. The Baptist Medical
\nBuilding II, located at 300 Medical Center Drive is a five-story, 62,500 square
\nfoot building constructed in 1993 with a leasable area of 50,589 square feet.
\nThis building is currently 43.3 percent occupied.<\/p>\n
PURPOSE AND EFFECTIVE DATE OF THE APPRAISAL<\/p>\n
The purpose of this appraisal is to estimate the market value of the real
\nproperty identified above. The effective date of valuation is January 1, 1994.<\/p>\n
FUNCTION OF THE APPRAISAL<\/p>\n
The report is to be used for internal financial valuation purposes. The owner,
\nQuorum Health Group, Inc. is considering the sale of four professional office
\nbuildings to Crescent Capital Trust, Inc. The subject properties would be
\nincluded in that sale.<\/p>\n
SCOPE OF THE APPRAISAL<\/p>\n
This appraisal engagement includes all three of the standard valuation
\napproaches and is in conformity with the requirements of the Code of
\nProfessional Ethics and Standards of Professional Practice of the Appraisal
\nInstitute and Society of Real Estate Appraisers. The scope of our assignment
\nincluded collecting, verifying and analyzing market and property data
\napplicable to the three approaches and consistent with the property’s highest
\nand best use. The results of the three approaches are then reconciled into a
\nfinal value conclusion considering the relevancy and quality of data presented
\nin each of the approaches.<\/p>\n
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\n 14
\nPROPERTY RIGHTS APPRAISED<\/p>\n
The property right appraised herein is the Leased Fee Estate.<\/p>\n
“Leased Fee Estate” is:<\/p>\n
“an ownership held by the landlord with the right of use and occupancy
\n conveyed by lease to others; the rights of lessor (the leased fee
\n owner) and leased fee are specified by contract terms contained within
\n the lease.”<\/p>\n
[The Appraisal of Real Estate, p. 123, 10th Ed., published by The
\n Appraisal Institute.]<\/p>\n
DEFINITION OF VALUE<\/p>\n
For the purpose of this valuation, “market value” is defined as follows:<\/p>\n
“The most probable price which a property should bring in a
\n competitive and open market under all conditions requisite to a fair
\n sale, the buyer and seller each acting prudently and knowledgeably,
\n and assuming the price is not affected by undue stimulus. Implicit in
\n this definition is the consummation of a sale as of a specified date
\n and the passing of title from seller to buyer under conditions
\n whereby:<\/p>\n
o Buyer and seller are typically motivated;<\/p>\n
o Both parties are well informed or well advised, and acting in
\n what they consider their own best interests;<\/p>\n
o A reasonable time is allowed for exposure in the open market;<\/p>\n
o Payment is made in terms of cash in U.S. dollars or in terms
\n of financial arrangements comparable thereto; and<\/p>\n
o The price represents the normal consideration for the property
\n sold unaffected by special or creative financing or sales
\n concessions granted by anyone associated with the sale.”<\/p>\n
[The Appraisal of Real Estate, p. 21, 10th Ed., published by The
\n Appraisal Institute.]<\/p>\n
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\n 15
\nHISTORY OF THE PROPERTY<\/p>\n
The subject professional buildings were all constructed by and on the Baptist
\nHospital campus. Quorum Health Group, Inc. acquired these buildings on
\nDecember 31, 1993 in conjunction with their acquisition of the hospital. An
\nindividual allocation to these buildings was not conducted.<\/p>\n
It is our understanding, as confirmed with Crescent Capital Trust, these three
\nbuildings will be acquired by the REIT at an agreed upon purchase price of
\n$11,800,000.<\/p>\n
HISTORY AND NATURE OF THE BUSINESS ENVIRONMENT<\/p>\n
United States Economic Performance and Outlook<\/p>\n
The value of the business enterprise is influenced by potential returns
\navailable from alternative investments. These return expectations are affected
\nby economic conditions as they impact the ability of a business enterprise to
\ngenerate a return on its invested capital. Perhaps the most important economic
\nindicator affecting potential investor returns is the aggregate demand for
\ngoods and services. Aggregate demand is measured by a country’s Gross Domestic
\nProduct (GDP), which is the sum of all domestic expenditures for consumption,
\ngovernment services, and net exports.<\/p>\n
The United States economy has been in a period of slow economic growth, but the
\nrate of growth appears to have increased in recent months. Gross Domestic
\nProduct (GDP) increased at a 2.1 percent annual rate during 1992 after
\ndeclining (1.2%) during 1991. The GDP was 0.7 percent and 1.6 percent,
\nrespectively, for the first and second quarters of 1993, and an estimated 4.0
\npercent for the fourth quarter of 1993.<\/p>\n
The components of GDP indicate that the economic recovery is affecting many
\nsectors of the economy. Personal consumption expenditures, which account for
\napproximately two-thirds of GDP, rose only 1.3 percent during the first half of
\n1993. Non-Residential Fixed Investment advanced 2.2 percent and Residential
\nFixed Investment grew 1.7 percent. Federal Government Purchases declined
\n(0.6%) over the same period. Federal Government Purchases account for 7.2
\npercent of the total GDP, and this decline is limited to the rate of overall
\nGDP growth.<\/p>\n
-3-
\n 16
\nThe value of the business enterprise is also affected by the current and
\nexpected levels of inflation and interest rates. Inflation creates uncertainty
\nin the mind of investors as they attempt to estimate future investment returns.
\nThis uncertainty is incorporated into both the required return on equity and
\ndebt capital. The Federal Reserve has warned, however, that interest rates
\nwill be pushed higher if inflation begins to show signs of “heating up”.<\/p>\n
The economic downturn in the early 1990s resulted in sharply lower inflation.
\nThe Consumer Price Index (CPI) ended 1992 with a 3.0 percent increase compared
\nto a 4.2 percent increase during 1991. The CPI for 1993 is currently estimated
\nat 3.3 percent. The GDP Deflator, a much broader price level index, ended 1992
\nwith a 2.6 percent annual increase compared to a 4.0 percent increase during
\n1991. The GDP Deflator is currently estimated at 2.5 percent for 1993.<\/p>\n
The Federal Reserve Bank has adopted a relatively easier monetary policy as a
\nresult of the recession. Interest rates, as represented by long-term Treasury
\nbond yields, declined approximately ten basis points compared to rates existing
\na year earlier. Long-term corporate bond rates have also decreased and the
\nFederal Reserve’s discount rate reductions have prompted commercial banks to
\nlower their prime lending rate to 6.0 percent. Selected monetary statistics
\nare presented in the following table.<\/p>\n
INTEREST RATES AND SELECTED STATISTICS<\/p>\n
JANUARY 6, 1994 JANUARY 2, 1992<\/p>\n
Federal Fund Rate 3.0% 3.9%<\/p>\n
90-Day Treasury Bill Rate 3.1% 3.9%<\/p>\n
30-Year Treasury Bond 6.4% 7.5%<\/p>\n
Aaa Bond Yield 6.9% 8.2%<\/p>\n
Prime Rate 6.0% 6.5%<\/p>\n
Economic Outlook<\/p>\n
According to Value Line’s Quarterly Economic Review, dated December 24, 1993,
\nthe economic recovery is now 2.5 years old, but shows much slower growth than
\nnormal for a mature recovery. Among factors cited by Value Line for
\ncontributing to the recent<\/p>\n
-4-
\n 17
\nslow growth are “high debt, stagnant personal income, low consumer confidence
\nand a troubling unemployment rate”. Recent improvements have focussed on the
\nauto, machinery, steel, housing and specialty retailer market segments. Value
\nLine cautions, however, that the recent improvements in the economy are being
\nlimited by a slow job growth base. Value Line’s Quarterly Economic Review
\nidentified the following estimates for selected economic statistics from 1993
\nto 1995.<\/p>\n
\n\n 1993 1994 1995
\n
\n Real GDP 2.6% 3.3% 3.3%<\/p>\n Personal Consumption Expenditures 3.0% 2.7% 2.3%<\/p>\n
Federal Government Purchases (4.8%) (5.8%) (4.0%)<\/p>\n
30-Year Treasury Bond Yields 6.6% 6.6% 6.8%<\/p>\n
Prime Rate 6.0% 6.2% 6.4%<\/p>\n
Consumer Price Index 3.1% 3.2% 3.3%<\/p>\n
<\/c><\/c><\/c><\/s><\/caption>\n<\/table>\n
In summary, these factors play an important part in determining the supply and
\ndemand for real property, and, indirectly, the value of properties. Most of
\nthe forces discussed above are indicating an on-going soft demand for many
\ntypes of commercial real estate. This soft demand has caused some property
\nvalues to remain flat and some to decline. The lower interest rates in recent
\nperiods, however, are serving to stabilize commercial property values.<\/p>\n
-5-
\n 18
\n DESCRIPTIVE DATA<\/p>\n
REGIONAL DATA<\/p>\n
GADSDEN\/ETOWAH COUNTY<\/p>\n
Etowah County, Alabama lies in the lower region of the Appalachians,
\nincorporating the southern terminus of Lookout Mountain. Gadsden, the county
\nseat, was developed along the Coosa River which flows through the heart of
\nEtowah and surrounding communities. The county was carved out from her sister
\ncounties of Blount, Calhoun, Cherokee, DeKalb, Marshall and St. Clair.<\/p>\n
The county’s nearest major city is Birmingham which is 55 miles south. The
\nnearest interstates are Interstate 59 and Interstate 20. Atlanta, Georgia is
\nlocated approximately 110 miles to the east, and Memphis, Tennessee is located
\napproximately 275 miles to the north.<\/p>\n
Population<\/p>\n
The total population within a 30-mile radius is estimated at 342,000. The
\npopulation of Gadsden alone is 42,523, which represents 42.6 percent of the
\ntotal county population. Based upon the 1990 Census, the population of the
\ncounty was 99,840. The population can be further described by the following
\nstatistics:<\/p>\n
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\n 19
\n POPULATION<\/p>\n
GADSDEN, ETOWAH COUNTY, ALABAMA<\/p>\n
Population within 30-mile radius 342,000<\/p>\n
Gadsden population 42,523<\/p>\n
Metro population 71,044<\/p>\n
County population 99,840<\/p>\n
Male 47.3%<\/p>\n
Female 52.7%<\/p>\n
White 85.4%<\/p>\n
Black 13.8%<\/p>\n
Under 18 24.6%<\/p>\n
18 to 39 31.3%<\/p>\n
40 to 64 28.2%<\/p>\n
65 and over 15.9%<\/p>\n
Transportation<\/p>\n
Air transport into the county of Etowah is provided by the Gadsden Municipal
\nAirport. The nearest passenger airport is in Birmingham. Ground transport is
\nprovided by Greyhound bus services. There are a number of truck carriers
\nincluding Roadway, Yellow Freight, and Consolidated Freightways. Rail services
\nare provided by CSX and Norfolk Southern.<\/p>\n
Healthcare<\/p>\n
Baptist Memorial Hospital, with 1,233 employees (346 beds), is the county’s
\nfourth largest employer. Riverview Regional Medical Center, with 570 employees
\n(281 beds), is the fourth largest property taxpayer in the county. Both
\nfacilities are owned by publicly-held companies.<\/p>\n
-7-
\n 20
\nGadsden\/Etowah County also supports Mountain View, which is devoted to
\naddictive, behavioral, and emotional problems. It has 120 employees and 68
\nbeds. This community is also home to more than 160 physicians and surgeons and
\n60 doctors of dentistry. Gadsden is recognized as the hub for the surrounding
\ncounties, because of the unusually large number of physicians in the area.
\nThis is partly due to its location because Alabama’s University Hospital in
\nBirmingham has become national and internationally famous. The University of
\nAlabama Hospital is approximately 60 miles from downtown Gadsden.<\/p>\n
Area Industries<\/p>\n
The largest employer in Etowah County is the Goodyear Tire & Rubber Company,
\nwhich manufactures tires. It is estimated that Goodyear employs approximately
\n2,300 persons. The following chart identifies the top ten employers in the
\narea.<\/p>\n
AREA INDUSTRIES<\/p>\n
\n\n NUMBER OF
\n TEN LARGEST INDUSTRIES PRODUCT EMPLOYEES
\n
\n Goodyear Tire & Rubber Company Tires 2,300<\/p>\n Gulf States Steel, Inc. Coils and Plates 1,950<\/p>\n
Mid-South Industries Appliances\/Machining 1,340<\/p>\n
Tyson Foods Poultry Processing 1,300<\/p>\n
Equity Group of Alabama Processed Poultry 350<\/p>\n
Liberty Trousers Trouser Sewing 193<\/p>\n
Center Star Manufacturing T-Shirt Sewing 193<\/p>\n
South Central Bell Telephone Service 189<\/p>\n
Dixie Pacific Manufacturing Wooden Columns 174<\/p>\n
AAA Plumbing Pottery Plumbing Fixtures 165<\/p>\n
<\/c><\/c><\/s><\/caption>\n<\/table>\n
Overall, the community is a growing and viable area with a growing population.
\nThe location of major industries in the area have contributed positively to the
\narea and should continue to do so in the future.<\/p>\n
-8-
\n 21
\nNEIGHBORHOOD DATA<\/p>\n
The subject properties are located on the Baptist Hospital medical campus which
\nis located in the eastern portion of Gadsden on the south side of Goodyear
\nAvenue. The campus is located adjacent (north) to the Goodyear Tire & Rubber
\nCompany and east of Alabama Power Company. Located to the south of the subject
\nproperty are single-family dwellings.<\/p>\n
Access to the subject site is provided by Meighan Boulevard (State Road 431\/1)
\nwhich is a major north-south thoroughfare in Gadsden. Meighan Boulevard is
\nlocated southwest of the subject property.<\/p>\n
The single-family dwellings located south of the subject site are older homes
\napproximately 15 to 30 years of age. The average price of a three-bedroom,
\n2,000 square foot home is $65,000. Overall, the community has developed in
\nrelationship to the existing employers in the area; the hospital, the Goodyear
\nplant, and the power company.<\/p>\n
The subject property’s neighborhood is located in the zip codes 35901, 35903
\nand 35904. The estimated population in these areas has decreased approximately
\n6.8 percent from the 1980 Census data. As of 1993, the population has remained
\nrelatively stable. Based upon 1993 data, median household income is estimated
\nto be $23,077. The median age is 37.5.<\/p>\n
REAL ESTATE TAXES AND ASSESSMENTS<\/p>\n
The subject property is located in Etowah County and within the city limit of
\nGadsden. Because the subject property is currently owned by a not-for-profit
\nentity they are not taxed or assessed by the county. The parcel numbers are
\npresented below:<\/p>\n
The Goodyear Clinic 31-15-01-11-0-001-002.050
\n The Hamiter Building 31-15-01-11-0-001-002.060
\n Baptist Medical Building II 31-15-01-12-0-001-064
\n 31-15-01-12-0-001-065<\/p>\n
If the property was acquired by a for profit entity, the county would be
\nrequired to assess and tax the parcels. The millage rate for the 1993 tax year
\nwas $4.90 per $100.<\/p>\n
-9-
\n 22
\nZONING<\/p>\n
The subject parcels are zoned “O-I” by the Gadsden Planning Department. This
\nzoning district is designed to provide suitable sites for the development of
\noffice, retail and service uses of a convenience nature which satisfy the
\nessential and frequent needs of adjacent residential neighborhoods in areas
\nconsistent with the city’s comprehensive plan.<\/p>\n
Permitted uses includes banks and financial institutions, medical offices,
\ninstitutions such as schools and churches and retail and service
\nestablishments. The subject properties are considered legal conforming uses
\nand in accordance with the current zoning ordinance.<\/p>\n
A letter of zoning compliance from the Etowah County is recommended for an
\nofficial determination regarding any zoning conformity in regards to parking
\nrequirements.<\/p>\n
SITE ANALYSIS<\/p>\n
THE GOODYEAR CLINIC, 851 GOODYEAR AVENUE<\/p>\n
The Goodyear Clinic parcel is irregularly-shaped and fronts Goodyear Avenue on
\nthe south side. The entire parcel contains a total of 1.19 acres or 51,836
\nsquare feet. A legal description is included in the Exhibit section of this
\nreport. A master survey was prepared for the acquisition of the entire Baptist
\nHospital campus, inclusive of the subject site. The parcel size has been
\ndetermined by the dimensions on a tax plat map and public record. We reserve
\nthe right to modify our report if the actual acreage is found to vary
\nsignificantly from the tax plat acreage.<\/p>\n
The topography of the site slopes slightly upward from Goodyear Avenue to the
\nfront of the clinic. Located to the south of this building is a mental health
\ncenter and the Baptist Hospital. West of the parcel is a softball field and
\nparking area. Located east of the parcel is a parking area. The site does not
\ncontain any flood plain.<\/p>\n
Utilities serving the site include water, sewer, telephone, gas and
\nelectricity. Police services and fire protection are located in the
\nneighborhood.<\/p>\n
-10-
\n 23
\nOther site improvements consist of general landscaping, asphalt paving,
\nconcrete paving and curbing, some shrubs and general signage. The parking lot
\nfor the subject parcel appears to be adequate.<\/p>\n
We are not aware of any detrimental easements or encroachments encumbering the
\nsite. Further, we assume that the subject site is not encumbered with
\ndetrimental easements or encroachments. A copy of a Etowah tax plat map is
\nincluded in the Exhibit section. <\/p>\n
To our knowledge, no environmental study has been conducted on the
\nsubject site. As appraisers, we are not qualified to detect hazardous
\nmaterials. Consequently, our report assumes that there are no environmentally
\nhazardous materials in the site or building that would adversely affect the
\nsubject property’s value.<\/p>\n
THE HAMITER BUILDING, 100 MEDICAL CENTER DRIVE<\/p>\n
The Hamiter Building parcel is irregularly-shaped and fronts Old Goodyear
\nAvenue on the east side and Medical Center Drive along its southern borders.
\nThe entire parcel contains a total of 1.30 acres or 56,628 square feet. A
\nlegal description is included in the Exhibit section of this report. A master
\nsurvey was prepared for the acquisition of the entire Baptist Hospital campus,
\ninclusive of the subject site. The parcel size has been determined by the
\ndimensions on a tax plat map and public record. We reserve the right to modify
\nour report if the actual acreage is found to vary significantly from the tax
\nplat acreage.<\/p>\n
The topography of the site slopes slightly upward from Old Goodyear Avenue to
\nthe front of the building. Located east of the building is a parking lot and
\nMedical Center Drive. Located west of the building is the Baptist Hospital and
\nto the south the Baptist Medical Building II and the Cancer Center. Immediate
\nnorth of the parcel is Old Goodyear Avenue and single-family dwellings. The
\nsubject does not contain any flood plain.<\/p>\n
Utilities serving the site include water, sewer, telephone, gas and
\nelectricity. Police services and fire protection are located in the
\nneighborhood.<\/p>\n
-11-
\n 24
\nOther site improvements consist of general landscaping, exterior lighting,
\nasphalt paving, concrete paving and curbing, some shrubs and general signage.
\nThe parking lot for the subject appears to be adequate.<\/p>\n
We are not aware of any detrimental easements or encroachments encumbering the
\nsite. Further, we assume that the subject site is not encumbered with
\ndetrimental easements or encroachments. A copy of a Etowah tax plat map is
\nincluded in the Exhibit section. <\/p>\n
To our knowledge, no environmental study has been conducted on the
\nsubject site. As appraisers, we are not qualified to detect hazardous
\nmaterials. Consequently, our report assumes that there are no environmentally
\nhazardous materials in the site or building that would adversely affect the
\nsubject property’s value.<\/p>\n
BAPTIST MEDICAL BUILDING II, 300 MEDICAL CENTER DRIVE<\/p>\n
The Baptist Medical Building II parcel is rectangular-shaped and fronts Medical
\nCenter Drive on the west side. It is located just south of Old Goodyear
\nAvenue. The entire parcel contains a total of 0.65 acres or 28,314 square
\nfeet. A separate legal description for the subject parcel was not made
\navailable to us. We have included a legal description, which encompasses the
\nentire Baptist Hospital campus in the Exhibit section of this report. This
\ndescription is inclusive of the subject parcel. A master survey was prepared
\nfor the acquisition of the entire Baptist Hospital campus, inclusive of the
\nsubject site. The parcel size has been determined by the dimensions on a tax
\nplat map and public record. We reserve the right to modify our report if the
\nactual acreage is found to vary significantly from the tax plat acreage.<\/p>\n
The topography of the site is level throughout. Located east of the building
\nis Medical Center Drive, a ravine, and medical office buildings. Located
\nfurther east are single-family dwellings. Located west of the parcel is
\nBaptist Hospital. North of the parcel is Old Goodyear Avenue and single-family
\ndwellings. South of the subject parcel is the parking area for the hospital
\nand single-family dwellings. The subject site is level throughout and does
\nnot contain any flood plain.<\/p>\n
Utilities serving the site include water, sewer, telephone, gas and
\nelectricity. Police services and fire protection are located in the
\nneighborhood.<\/p>\n
-12-
\n 25
\nOther site improvements consist of general landscaping, exterior lighting,
\nasphalt paving, concrete paving and curbing, some shrubs and general signage.
\nThe subject parcel does not provide parking, but an arrangement has been made
\nwith the hospital for parking for approximately 175 vehicles.<\/p>\n
We are not aware of any detrimental easements or encroachments encumbering the
\nsite. Further, we assume that the subject site is not encumbered with
\ndetrimental easements or encroachments. A copy of a Etowah tax plat map is
\nincluded in the Exhibit section. <\/p>\n
To our knowledge, no environmental study has been conducted on the
\nsubject site. As appraisers, we are not qualified to detect hazardous
\nmaterials. Consequently, our report assumes that there are no environmentally
\nhazardous materials in the site or building that would adversely affect the
\nsubject property’s value.<\/p>\n
BUILDINGS AND SITE IMPROVEMENTS<\/p>\n
THE GOODYEAR CLINIC, 851 GOODYEAR AVENUE<\/p>\n
The Goodyear Clinic is located at 851 Goodyear Avenue. It is a one-story
\nbuilding constructed in 1977 containing 13,998 gross square feet with a
\nleasable area of 13,998 square feet.<\/p>\n
The building is a one-story structure with wood framing supported on attic
\nbeams with lightweight concrete cover and a brick veneer exterior. The
\nbuilding has a flat metal deck. Ceiling finishes consist of acoustical ceiling
\ntiles and recessed fluorescent lighting. The interior walls are gypsum board
\non metal framing. Most of the hallways and office areas have vinyl tile and
\ncarpet and pad. Windows and doors are metal-framed, and interior doors are
\nsolid-core wood.<\/p>\n
Heating and air conditioning is supplied via Trane package units located
\nadjacent to the subject. Heat is supplied by a RayPak boiler. One 38-gallon
\nwater heater is part of the plumbing system. The building is 100 percent
\nsprinklered.<\/p>\n
More detail descriptions of the building and site improvements are included in
\nthe Exhibit section of this report.<\/p>\n
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\n 26
\nCONDITION OF IMPROVEMENTS AND OBSOLESCENCE<\/p>\n
The building is in good overall condition. It appears to have been adequately
\nmaintained. No significant deferred maintenance was indicated from the
\nappraiser’s inspection of the property. There does not appear to be any
\nfunctional or economic obsolescence.<\/p>\n
THE HAMITER BUILDING, 100 MEDICAL CENTER DRIVE<\/p>\n
The Hamiter Building is located at 100 Medical Center Drive. It is a
\nfour-story building constructed in 1979 containing 51,000 gross square feet
\nwith a leasable area of 38,154 square feet.<\/p>\n
The building is a four-story structure with reinforced concrete post and beam
\nframe and stucco over fiberglass exterior panels. The building has a flat,
\nconcrete deck roof structure, with a waterproof membrane and large-stone gravel
\ncovering. Ceiling finishes consist of acoustical ceiling tiles and recessed
\nfluorescent lighting. The interior walls are gypsum board on metal framing.
\nMost of the hallways and office areas have vinyl tile and carpet and pad.
\nWindows and doors are metal-framed, and interior doors are solid-core wood.<\/p>\n
Air conditioning is supplied via a centrifugal chiller system with perimeter
\nheat along windows provided by steam condensers with steam provided by the
\nhospital central plant. Additional air handlers are located on the roof of the
\nbuilding. One 125-gallon water heater is part of the plumbing system. The
\nelectrical system is comprised of a 1500 amp system consisting of ample
\noutlets, and incandescent and fluorescent light fixtures. There are a total of
\ntwo elevators; one four-stop and one five-stop to the penthouse area.<\/p>\n
More detail descriptions of the building and site improvements are included in
\nthe Exhibit Section of this report.<\/p>\n
CONDITION OF IMPROVEMENTS AND OBSOLESCENCE<\/p>\n
The building is in good overall condition. It appears to have been adequately
\nmaintained. No significant deferred maintenance was indicated from the
\nappraiser’s<\/p>\n
-14-
\n 27
\ninspection of the property. There does not appear to be any functional or
\neconomic obsolescence.<\/p>\n
BAPTIST MEDICAL BUILDING II, 300 MEDICAL CENTER DRIVE<\/p>\n
The Baptist Medical Building II is located at 300 Medical Center Drive. It is
\na five-story building constructed in 1993, containing 62,500 gross square feet
\nwith a leasable area of 50,589 square feet.<\/p>\n
The building is a five-story structure with reinforced concrete post and beam
\nframe and a brick veneer exterior. The building has a flat concrete deck roof
\nstructure with a waterproofed tar and gravel covering. Ceiling finishes
\nconsist of acoustical ceiling tiles and recessed fluorescent lighting. The
\ninterior walls are high quality finishes including gypsum board on metal
\nframing. The hallways and offices contain high quality vinyl tile and carpet
\nand pad. Windows and doors are metal-framed, and interior doors are solid-core
\nwood. At the time of our site inspection the first floor was approximately 100
\npercent complete, the second floor was approximately 50 percent complete, the
\nthird floor was a shell, the fourth floor was approximately 50 percent
\ncomplete, and the fifth floor was completely built-out. Our valuation does
\nconsider the structure as complete and ready for occupancy.<\/p>\n
Heating and air conditioning is supplied via a hot and cold water system
\ncomprised of a York chiller, a cooling tower located on the Baptist Hospital
\ncampus and a Lochinvar boiler. The electrical system is comprised of an 800
\namp system consisting of ample outlets and incandescent and fluorescent light
\nfixtures. There are a total of two elevators. The building is 100 percent
\nsprinklered.<\/p>\n
More detail descriptions of the building and site improvements are included in
\nthe Exhibit Section of this report.<\/p>\n
CONDITION OF IMPROVEMENTS AND OBSOLESCENCE<\/p>\n
The building is in excellent overall condition. It appears to have been
\nadequately maintained. No significant deferred maintenance was indicated from
\nthe appraiser’s inspection of the property. There does not appear to be any
\nfunctional or economic obsolescence.<\/p>\n
-15-
\n 28
\n HIGHEST AND BEST USE<\/p>\n
The Appraisal Institute defines “highest and best use” as follows:<\/p>\n
“The reasonably probable and legal use of vacant land or an improved
\n property, which is physically possible, appropriately supported,
\n financially feasible, and that results in the highest value”<\/p>\n
[The Appraisal of Real Estate, p. 45, 10th Ed. published by The
\n Appraisal Institute.]<\/p>\n
The four categories of highest and best use analysis are:<\/p>\n
1. Physically Possible – Uses which are physically possible for
\n the site and improvements being analyzed.<\/p>\n
2. Legally Permissible – Uses permitted by zoning and deed
\n restrictions applicable to the site and improvements being
\n analyzed.<\/p>\n
3. Financially Feasible – This step identifies if the physically
\n possible and legally permitted alternatives produce a net
\n income equal to or greater than the amount needed to satisfy
\n operating expenses.<\/p>\n
4. Maximally Productive – This step clarifies which of the
\n financially feasible alternatives provides the highest value
\n consistent with the rate of return warranted by the market for
\n a particular use.<\/p>\n
There are two types of highest and best use: THE HIGHEST AND BEST USE OF LAND
\nAS VACANT and THE HIGHEST AND BEST USE OF A PROPERTY AS IMPROVED. Both types
\nare discussed as follows using the four categories of highest and best use.<\/p>\n
As Vacant<\/p>\n
The purpose of this analysis, given the site is vacant or can easily be made
\nvacant, is to determine if something should be constructed on the site, and, if
\nso, what should be constructed on the site.<\/p>\n
-16-
\n 29
\nPHYSICALLY POSSIBLE<\/p>\n
The size and shape of the subject site is adequate for the development of a
\nnumber of alternative uses including small residential, commercial,
\noffice\/institutional, industrial and special-purpose properties. The site
\npossesses good access and visibility. The size of the parcel would preclude
\nany large developments.<\/p>\n
LEGALLY PERMISSIBLE<\/p>\n
As stated earlier in the Zoning section of this report, the property is
\ncurrently zoned “O-I”, Office-Institutional. Permitted uses in this general
\nzoning category vary widely. Potential legal uses would include some retail,
\nrestaurants, office\/institutional, hotels, hospitals and other medical-oriented
\nuses.<\/p>\n
Surrounding uses include the hospital, other professional office uses, some
\napartments and some older single-family residential properties. These use
\npatterns would likely preclude industrial, retail or future single-family
\ndevelopment on the site.<\/p>\n
FINANCIALLY FEASIBLE<\/p>\n
Having established that the site is physically suited for and legally
\nrestricted to office\/institutional development, the next consideration is
\neconomic feasibility. Financially feasible uses for the site, if vacant, are
\nthose uses that would generate an economic return to the land. New
\nmedical-related development on the south side of the building indicates that
\nnew development is financially feasible. Local physicians have opened a
\ndiagnostic medical office along Goodyear Avenue.<\/p>\n
MAXIMALLY PRODUCTIVE<\/p>\n
The maximally productive use is a financially feasible use that would produce
\nthe greatest land value. Office\/institutional use is physically possible and
\nlegally permissible, and new development is financially feasible. Based on
\nthis analysis, the current highest and best use of the land, if vacant, would
\nbe for office\/institutional development.<\/p>\n
-17-
\n 30
\nAs Improved<\/p>\n
The subject site is currently improved with a rentable square footage office
\nbuilding, with an adjacent parking deck and associated site improvements. The
\npurpose of this discussion is to determine whether to leave the improvements as
\nthey are, to modify the improvements or to remove the improvements.<\/p>\n
PHYSICALLY POSSIBLE<\/p>\n
It would obviously be physically possible to leave the improvements as they
\nare, to demolish the existing improvements and replace them with new
\nimprovements, or to make minor repairs to the deferred maintenance items on the
\nproperty. The improvements are considered functional.<\/p>\n
LEGALLY PERMISSIBLE<\/p>\n
The improvements, as improved, are a legal conforming use according to the City
\nof Gadsden zoning guidelines. Under the zoning, the property could remain as
\nit is, be torn down or renovated.<\/p>\n
FINANCIALLY FEASIBLE<\/p>\n
The highest and best use of the land, if vacant, was to develop with an
\noffice\/institutional use based on the adjacent hospital’s growth needs. Of the
\nphysically possible and legally permissible changes that could be made to the
\nexisting facility, demolishing the building would significantly reduce the
\ncurrent asset value, and would not be financially feasible. It would, however,
\nbe financially feasible to correct any deferred maintenance.<\/p>\n
MAXIMALLY PRODUCTIVE<\/p>\n
The maximally productive use for the existing property is the financially
\nfeasible use that produces the greatest property value. The highest and best
\nuse, as improved, is to not make any major changes to the current asset use.
\nThe improvements represent the current highest and best use of the property.<\/p>\n
-18-
\n 31
\n VALUATION SECTION<\/p>\n
VALUATION METHODOLOGY<\/p>\n
There are three principal methods to estimate the market value of the assets of
\nthe subject property. These are summarized as follows:<\/p>\n
COST APPROACH: This method is based on the principle of substitution,
\n whereby no investor would prudently pay more for a property than it
\n costs to buy land and build a comparable new building. The market
\n value is estimated by calculating the replacement costs of a new
\n building and subtracting all forms of depreciation and obsolescence
\n present in the existing facility. This provides a depreciated value
\n of the subject improvements if replaced new. The estimate of the
\n current value of the subject land is then added to provide a market
\n value of the property.<\/p>\n
SALES COMPARISON APPROACH: The principle of substitution also says
\n that market value can be estimated as the cost of acquiring an equally
\n desirable substitute property, assuming no costly delay in making the
\n substitution. This method analyses the sales of other comparable
\n improved properties. Since two properties are rarely identical, the
\n necessary adjustments for differences in quality, location, size,
\n services and market appeal are a function of appraisal experience and
\n judgment.<\/p>\n
INCOME APPROACH: This method is based on the principle of
\n anticipation, which recognizes that underlying value of the subject
\n property can be estimated by its cash flow or stream of earnings.
\n This approach simulates the future earnings for the property, and
\n converts those earnings into a present market value estimate.<\/p>\n
Consideration has been given to each of the three methods to arrive at a final
\nopinion of value. The application of each approach to value is further
\ndiscussed in the appropriate sections which follow.<\/p>\n
-19-
\n 32
\n COST APPROACH<\/p>\n
In the Cost Approach, the subject property is valued based upon the market
\nvalue of the land, as if vacant, to which is added the depreciated replacement
\ncost of the improvements. The replacement cost new of the improvements is
\nadjusted for accrued depreciation resulting from physical deterioration,
\nfunctional obsolescence, and external (or economic) obsolescence.<\/p>\n
The cost analysis involves three basic steps:<\/p>\n
o Land value estimate.<\/p>\n
o Estimated replacement cost of the improvements.<\/p>\n
o Estimation of the accrued depreciation from all causes.<\/p>\n
The sum of the market value of the land and the depreciated replacement cost of
\nthe improvements and equipment is the estimated market value via the Cost
\nApproach.<\/p>\n
Land Valuation<\/p>\n
Land valuation, assuming the site is vacant, is based upon the following steps:<\/p>\n
o A comparison with recent sales and\/or asking prices for
\n similar land.<\/p>\n
o Interviews with reliable real estate brokers and other
\n informed sources who are familiar with local real estate
\n activity.<\/p>\n
o Our experience in estimating land values.<\/p>\n
The following sales are located within the general market area of the subject
\nproperty and are considered to be representative of market activity and
\nconditions as of the valuation date. Unless otherwise indicated, the sales
\ninvolved arm’s length transactions that conveyed a fee simple interest, and
\nonly real property was included in the transactions.<\/p>\n
-20-
\n 33
\nLand Comparable Number 1<\/p>\n
\n
\nParcel Number: 31-15-05-22-14<\/p>\nLocation: East side of Rainbow Drive, west of the river<\/p>\n
Size: 56,192 square feet<\/p>\n
Sale Date: January 12, 1993<\/p>\n
Deed Book\/Page: 1821\/301<\/p>\n
Grantor: Keeling and Loveman<\/p>\n
Grantee: Applebee’s of North Alabama, Inc.<\/p>\n
Sale Price: $200,000<\/p>\n
Price Per Square Foot: $3.56<\/p>\n
Terms of Sale: All Cash<\/p>\n
Shape: Irregular<\/p>\n
Zoning: Commercial<\/p>\n
Utilities: All utilities are available.<\/p>\n
Comments: This parcel was later improved with an Applebee’s restaurant. This location is along a
\n major roadway (Rainbow Drive), and in close proximity to a hotel and large shopping
\n center.
\n<\/c><\/s><\/table>\n
-21-
\n 34
\nLand Comparable Number 2<\/p>\n
\n
\nParcel Number: 31-15-02-04-03-304-20<\/p>\nLocation: East of Eighth Street, south side of Forrest Avenue<\/p>\n
Size: 10,400 square feet<\/p>\n
Sale Date: January 13, 1992<\/p>\n
Deed Book\/Page: 1772\/101<\/p>\n
Grantor: Mary E. Barlow Kidd, et al<\/p>\n
Grantee: Thomas and Diane Davis<\/p>\n
Sale Price: $15,000<\/p>\n
Price Per Square Foot: $1.44<\/p>\n
Terms of Sale: All Cash<\/p>\n
Shape: Rectangular<\/p>\n
Utilities: All utilities are available.<\/p>\n
Comments: This parcel was purchased for an office building, which is presently under construction.
\n It is located in proximity to the government center of Gadsden.<\/p>\n
<\/c><\/s><\/table>\n
-22-
\n 35
\nLand Comparable Number 3<\/p>\n
\n
\nParcel Number: 31-21-02-09-16<\/p>\nLocation: Southwest side of Pilgrim’s Rest Road (State Road 1073)<\/p>\n
Size: 39,600 square feet<\/p>\n
Sale Date: September 30, 1991<\/p>\n
Deed Book\/Page: 1752\/265<\/p>\n
Grantor: Jason B. Newton<\/p>\n
Grantee: Big B Food Systems, Ltd., an Alabama Partnership<\/p>\n
Sale Price: $60,000<\/p>\n
Price Per Square Foot: $1.52<\/p>\n
Terms of Sale: All Cash<\/p>\n
Shape: Rectangular<\/p>\n
Zoning: Commercial<\/p>\n
Utilities: All utilities are available.<\/p>\n
Comments: This parcel was an out-parcel to an existing shopping center. It will be improved
\n with a Big B Drugstore. The parcel does not have road frontage, although visual to the
\n roadway.<\/p>\n
<\/c><\/s><\/table>\n
-23-
\n 36
\nA summary of the land sales is shown as follows:<\/p>\n
SUMMARY OF LAND COMPARABLES<\/p>\n
\n\n LAND SALE SIZE PRICE
\nOMPARABLE LOCATION DATE (SF) PER SF
\n
\n 1 East side Rainbow Drive 1\/93 56,192 $3.56<\/p>\n 2 South side of Forrest Avenue 1\/92 10,400 $1.44<\/p>\n
3 Southwest side of Pilgrim’s Rest Road 9\/91 39,600 $1.52
\n (SR1073)<\/p>\n
SUBJECT 851 GOODYEAR AVENUE 51,836
\n 100 MEDICAL CENTER DRIVE 56,628
\n 300 MEDICAL CENTER DRIVE 28,314
\n<\/c><\/c><\/c><\/c><\/s><\/caption>\n<\/table>\n
Discussion of Land Comparables<\/p>\n
LAND COMPARABLE 1 is a parcel located on Rainbow Drive, later developed as a
\nrestaurant. Downward adjustments were indicated because of the level
\ntopography of this sale. An additional downward adjustment has been made for
\nits location because of the sale’s proximity to the river and its location
\nalong a major commercial road. The adjustments are shown on a Land Sale
\nAdjustment Grid at the end of this discussion. The adjusted price per square
\nfoot of this comparable is $1.42 per square foot.<\/p>\n
LAND COMPARABLE 2 was a significantly smaller parcel located in downtown
\nGadsden, later improved with an office. A slight downward adjustment has been
\nmade for its favorable location. An additional downward adjustment was made for
\nsize, since smaller tracts tend to sell for higher unit prices than larger
\ntracts. The parcel has similar topography as the subject parcels negating an
\nadjustment. The adjusted price per square foot of this comparable is $1.32.<\/p>\n
-24-
\n 37
\nLAND COMPARABLE 3 was a 39,600 square foot parcel located on Pilgrim Rest Road
\nwhich is west of the subject parcels. The parcel was later improved with a
\ndrugstore. An upward adjustment has been to this sale, because of its lack of
\nroad frontage. A downward adjustment has been made for its level topography as
\ncompared to the subject parcels. The adjusted price for this comparable is
\n$1.55 per square foot.<\/p>\n
The adjusted land prices ranged from $1.32 per square foot to $1.55 per square
\nfoot, with the prices of the most comparable sites being in the middle of this
\nrange. Based on our analysis of the subject versus these comparables, it is
\nour opinion that a land price of $1.45 per square is representative of the
\nsubject sites. The subject land value is estimated as follows:<\/p>\n
\n
\n The Goodyear Clinic 51,836 SF x $1.45\/SF = $ 75,162
\n The Hamiter Building 56,628 SF x $1.45\/SF = $ 82,111
\n Baptist Medical Building II 28,314 SF x $1.45\/SF = $ 41,055
\n ——-
\n Total $198,328<\/p>\n Rounded to: $198,000
\n ========
\n<\/c><\/c><\/c><\/s><\/table>\n
-25-
\n 38
\n L A N D S A L E A D J U S T M E N T G R I D
\n Goodyear Clinic
\n Hamiter Building
\n Baptist Medical Building II
\n Gadsden, Alabama<\/p>\n
\n\n Subject Land Comp Land Comp Land Comp
\n Element #1 #2 #3
\n
\nSale Price\/SF $3.56 $1.44 $1.52<\/p>\nProperty Rights Fee Simple Same Same Same
\n Adjustment
\n ——————————————–
\nAdjusted Price\/SF $3.56 $1.44 $1.52<\/p>\n
Financing Cash Cash Cash Cash
\n Adjustment
\n ——————————————–
\nAdjusted Price\/SF $3.56 $1.44 $1.52<\/p>\n
Conditions of Sale None None None
\n Adjustment
\n ——————————————–
\nAdjusted Price\/SF $3.56 $1.44 $1.52<\/p>\n
Market\/Time
\n Adjustment 0% 2% 2%
\n ——————————————–
\nAdjusted Price\/SF $3.56 $1.47 $1.55<\/p>\n
Other Adjustments:
\n Location Adjustment -50% -5% 10%
\n Topography Adjustment -10% 0% -10%
\n Size Adjustment 0% -5% 0%
\n Zoning Adjustment 0% 0% 0%
\n Net Other Adjustments -60% -10% 0%<\/p>\n
FINAL ADJUSTED PRICE PER SF $1.42 $1.32 $1.55
\n ============================================<\/p>\n
<\/c><\/c><\/c><\/c><\/s><\/caption>\n<\/table>\n
-26-
\n 39
\nBuilding and Site Improvements<\/p>\n
The building and site improvements have been valued on the basis of replacement
\ncost less accumulated depreciation. The cost new was estimated via the
\nsegregated cost method, with cost factors obtained from Marshall Valuation
\nServices, Inc., a national cost manual. The unit cost includes both direct and
\nindirect costs, with adjustments made for special building features,
\nconstruction quality, time and location. The composite unit cost has then been
\napplied to the gross square footage of the building to derive the replacement
\ncost new. An amount representing entrepreneurial profit has also been included
\nin this analysis. This profit is a necessary element in the motivation to
\nconstruct the improvements and represents an additional amount the develop
\nwould expect to receive for construction of the project. The amount of
\nentrepreneurial profit varies according to economic conditions and types of
\ndevelopments. For the purpose of this report, entrepreneurial profit was
\nestimated to comprise ten percent of the direct and indirect building costs.<\/p>\n
The total accumulated depreciation of a structure represents the loss in value
\ndue to physical deterioration, functional obsolescence, or external (or
\neconomic) obsolescence. Economic life of a structure or improvement is the
\nperiod over which they contribute to the value of the property. These terms
\nare defined as follows:<\/p>\n
Physical Deterioration: The loss in value due to deterioration or
\n ordinary wear and tear, i.e., natural forces taking their toll of the
\n improvements. This begins at the time the building is completed and
\n continues throughout its physical life.<\/p>\n
Functional Obsolescence: The loss in value due to poor plan,
\n functional inadequacy, or super-adequacy due to size, style, design, or
\n other items. This form of depreciation occurs in both curable or
\n incurable forms.<\/p>\n
External (or Economic) Obsolescence: The loss in value caused by
\n forces outside the property itself. It can take many forms such as
\n excessive noise levels, traffic congestion, abnormally high crime
\n rates, or any other factors which affect a property’s ability to
\n produce an economic income, thereby causing a decline in desirability.
\n Other forms of economic obsolescence may include governmental
\n restrictions, excessive taxes, or economic trends.<\/p>\n
Economic Life: The economic life of good quality medical office
\n buildings is typically 40 to 50 years. For the Goodyear Clinic and the
\n Hamiter Building, we have estimated an economic life of 45 years. The
\n Baptist Medical Building II has an economic life of 50 years.<\/p>\n
-27-
\n 40<\/p>\n
Remaining Economic Life: Remaining economic life can be defined as the
\n number of years remaining in the economic life of the structure or
\n structural components as of the date of the appraisal.<\/p>\n
Marshall Valuation Services, Inc., and the actual experience of other buildings
\nin the market, were use to estimate the overall economic life of the
\nimprovements. The assignment of economic lives assumed that, except for the
\nbuilding shell and foundation, building components would be replaced
\nperiodically over the life of the building.<\/p>\n
Physical Depreciation<\/p>\n
The amount of physical depreciation and obsolescence in the subject building is
\njudged normal for a building of this age. Observation of the subject property
\nindicated that the structure and related component parts have been adequately
\nmaintained through a continuous maintenance service program.<\/p>\n
THE GOODYEAR CLINIC<\/p>\n
The Goodyear Clinic was constructed in 1977, and is in average to good
\ncondition. After taking into consideration all significant physical factors
\naffecting the subject property, it is judged that the subject has an effective
\nage equal to 16 years. The remaining useful life is estimated to be 29 years.
\nThis translates into a physical depreciation estimate of 36 percent (16 years
\ndivided by 45 years). The amount of depreciation attributable to the property
\nhas been estimated on a straight-line basis, which is founded on the assumption
\nthat depreciation of a property occurs equally throughout its economic life.<\/p>\n
The elements which make up site improvements have shorter economic lives than
\nthe building. We have estimated the aggregate useful lives of these items to
\nbe 20 years with an effective age of five years and a remaining useful life of
\n15 years. Therefore, the depreciation rate attributable to the site
\nimprovements on a straight-line basis is estimated to be approximately 25
\npercent.<\/p>\n
The total depreciation for the building is estimated to be $652,507, and the
\ndepreciated value of the building replacement costs to be $1,160,013.<\/p>\n
-28-
\n 41
\nTHE HAMITER BUILDING<\/p>\n
The Hamiter Building was constructed in 1979, and it is in average to good
\ncondition. After taking into consideration all significant physical factors
\naffecting the subject property, it is judged that the subject has an effective
\nage equal to its actual age of fifteen years. The remaining useful life is
\nestimated to be 30 years. This translates into a physical depreciation
\nestimate of 33 percent (15 years divided by 45 years). The amount of
\ndepreciation attributable to the property has been estimated on a straight-line
\nbasis, which is founded on the assumption that depreciation of a property
\noccurs equally throughout its economic life.<\/p>\n
The elements which make up site improvements have shorter economic lives than
\nthe building. We have estimated the aggregate useful lives of these items to
\nbe 20 years with an effective age of five years and a remaining useful life of
\n15 years. Therefore, the depreciation rate attributable to the site
\nimprovements on a straight-line basis is estimated to be approximately 25
\npercent.<\/p>\n
The total depreciation for the building is estimated to be $1,713,815, and the
\ndepreciated value of the building replacement costs to be $3,479,637.<\/p>\n
BAPTIST MEDICAL BUILDING II<\/p>\n
The Baptist Medical Building II was constructed in 1993, and it is in excellent
\ncondition. After taking into consideration all significant physical factors
\naffecting the subject property, it is judged that the subject has an effective
\nage equal to one year. The remaining useful life is estimated to be 49 years.
\nThis translates into a physical depreciation estimate of two percent (1 year
\ndivided by 50 years). The amount of depreciation attributable to the property
\nhas been estimated on a straight-line basis, which is founded on the assumption
\nthat depreciation of a property occurs equally throughout its economic life.<\/p>\n
The elements which make up site improvements have shorter economic lives than
\nthe building. We have estimated the aggregate useful lives of these items to
\nbe 20 years with an effective age of one year and a remaining useful life of 19
\nyears. Therefore, the depreciation rate attributable to the site improvements
\non a straight-line basis is estimated to be approximately five percent.<\/p>\n
-29-
\n 42
\nThe total depreciation for the building is estimated to be $177,646, and the
\ndepreciated value of the building replacement costs to be $8,704,662.<\/p>\n
Cost Approach Conclusion<\/p>\n
The schedule on the following page is a summary of the estimated replacement
\ncost by category for the subject building plus estimates of all forms of
\ndepreciation.<\/p>\n
Based on the investigation as previously defined, the market value of the
\nsubject property by the Cost Approach, as of January 1, 1994, is:<\/p>\n
\n
\n The Goodyear Clinic $ 1,255,263
\n The Hamiter Building 3,606,637
\n Baptist Medical Building II 8,802,662
\n ———–
\n Total $13,664,562<\/p>\n Rounded to: $13,650,000
\n ===========
\n<\/c><\/c><\/s><\/table>\n
-30-
\n 43
\n SUMMARY OF VALUE VIA COST APPROACH
\n GOODYEAR CLINIC
\n GADSDEN, ALABAMA<\/p>\n
Replacement
\n Cost
\n ———–
\nSite Preparation 3,907
\nFoundation 35,018
\nFrame 16,778
\nExterior Walls 144,353
\nBasement Walls 0
\nFloors 48,993
\nRoof 137,525
\nRoof Cover 53,005
\nPartitioning & Built-In Items 344,815
\nCeilings 100,279
\nFloor Coverings 81,151
\nPlumbing 112,742
\nHVAC 202,706
\nElectrical 141,536
\nOther Features 17,743
\n ———-<\/p>\n
Total Replacement Cost 1,440,551<\/p>\n
Architect’s Fees Plans and Specs 3.9% 56,181
\nArchitect’s Fees, Supervision 3.0% 43,217
\nLegal, Accounting, Contingency 7.0% 107,796
\nEntrepreneurial Overhead, Profit, and Other
\n Miscellaneous Fees 10.0% 164,775
\n ———-
\nTotal of Other Costs 371,969<\/p>\n
Total Project Replacement Cost $1,812,520
\n ==========<\/p>\n
Accrued Depreciation<\/p>\n
Depreciation Factor 36% Straight Line 16\/45th (652,507)
\n ———-<\/p>\n
Depreciated Value of Building $1,160,013<\/p>\n
Site Improvements<\/p>\n
Replacement Cost $ 27,000
\n Depreciated Cost 25% Straight Line 5\/20ths (6,750)
\n ———-
\nDepreciated Value $ 20,250<\/p>\n
Plus Land Value (rounded) 1.19 acres $ 75,000
\n ———-<\/p>\n
COST APPROACH VALUE FOR ALL ASSETS $1,255,263
\n ==========<\/p>\n
-31-
\n 44
\n SUMMARY OF VALUE VIA COST APPROACH
\n HAMITER BUILDING
\n GADSDEN, ALABAMA<\/p>\n
Replacement
\n Cost
\n ———–<\/p>\n
Site Preparation 3,049
\nFoundation 100,323
\nFrame 484,194
\nExterior Walls 253,322
\nBasement Walls 0
\nFloors 274,231
\nRoof 107,773
\nRoof Cover 17,064
\nPartitioning & Built-In Items 1,100,025
\nCeilings 262,781
\nFloor Coverings 152,047
\nPlumbing 217,537
\nHVAC 495,857
\nElectrical 451,527
\nOther Features 207,940
\n ———-<\/p>\n
Total Replacement Cost 4,127,670<\/p>\n
Architect’s Fees Plans and Specs 3.9% 160,979
\nArchitect’s Fees, Supervision 3.0% 123,830
\nLegal, Accounting, Contingency 7.0% 308,874
\nEntrepreneurial Overhead, Profit, and Other
\n Miscellaneous Fees 10.0% 472,135
\n ———-
\nTotal of Other Costs 1,065,818<\/p>\n
Total Project Replacement Cost $5,193,488
\n ==========<\/p>\n
Accrued Depreciation<\/p>\n
Depreciation Factor 33% Straight Line 15\/45th (1,713,851)
\n ———-<\/p>\n
Depreciated Value of Building $3,479,637<\/p>\n
Site Improvements<\/p>\n
Replacement Cost $ 60,000
\n Depreciated Cost 25% Straight Line 5\/20th (15,000)
\n ———-<\/p>\n
Depreciated Value $ 45,000<\/p>\n
Plus Land Value (rounded) 1.30 acres $ 82,000
\n ———-<\/p>\n
COST APPROACH VALUE FOR ALL ASSETS $3,606,637
\n ==========<\/p>\n
-32-<\/p>\n
45
\n SUMMARY OF VALUE VIA COST APPROACH
\n BAPTIST MEDICAL BUILDING II
\n GADSDEN, ALABAMA<\/p>\n
Replacement
\n Cost
\n ———–<\/p>\n
Site Preparation 3,049
\nFoundation 157,127
\nFrame 783,132
\nExterior Walls 890,444
\nBasement Walls 0
\nFloors 399,111
\nRoof 109,476
\nRoof Cover 42,194
\nPartitioning & Built-In Items 1,391,265
\nCeilings 274,554
\nFloor Coverings 248,542
\nPlumbing 688,986
\nHVAC 1,066,425
\nElectrical 571,072
\nOther Features 434,085
\n ———-<\/p>\n
Total Replacement Cost 7,059,462<\/p>\n
Architect’s Fees Plans and Specs 3.9% 275,319
\nArchitect’s Fees, Supervision 3.0% 211,784
\nLegal, Accounting, Contingency 7.0% 528,260
\nEntrepreneurial Overhead, Profit, and Other
\n Miscellaneous Fees 10.0% 807,483
\n ———-
\nTotal of Other Costs 1,822,846<\/p>\n
Total Project Replacement Cost $8,882,308
\n ==========<\/p>\n
Accrued Depreciation<\/p>\n
Depreciation Factor 2% Straight Line 1\/50ths (177,646)
\n ———-<\/p>\n
Depreciated Value of Building $8,704,662<\/p>\n
Site Improvements<\/p>\n
Replacement Cost $ 60,000
\n Depreciated Cost 5% Straight Line 1\/20ths (3,000)
\n ———-<\/p>\n
Depreciated Value $ 57,000<\/p>\n
Plus Land Value (rounded) .65 acres $ 41,000
\n ———-<\/p>\n
COST APPROACH VALUE FOR ALL ASSETS $8,802,662
\n ==========<\/p>\n
-33-
\n 46
\n SALES COMPARISON APPROACH<\/p>\n
The Sales Comparison Approach is based upon the principle of substitution; that
\nis, when a property is replaceable in the market, its value tends to be set at
\nthe cost of acquiring an equally desirable substitute property, assuming there
\nis no costly delay in making the substitution. Since two properties are rarely
\nidentical, the necessary adjustments for differences in quality, location,
\nsize, services and market appeal are a function of appraisal experience and
\njudgment.<\/p>\n
The Sales Comparison Approach gives consideration to actual sales of other
\nsimilar properties with adjustments as previously stated. The sales prices are
\nanalyzed in common denominators and applied to the subject property in
\nrespective categories to be indicative of market value.<\/p>\n
The unit of comparison used in this analysis is the price per square foot,
\nwhich is the gross purchase price of the building divided by the net leasable
\narea in the building. The following sales are considered to be representative
\nof market activity and conditions as of the valuation date. Unless otherwise
\nindicated, the sales involved arm’s length transactions that conveyed a fee
\nsimple interest, and only real property was included in the transactions.
\nAlso, all purchase prices quoted in this report represent all cash sales unless
\nseller financing is noted and the sale prices adjusted for cash equivalency.<\/p>\n
In our analysis, we obtained details on three professional office building
\nsales which have occurred over the past two years. The terms of the sale and
\nsignificant data was verified to the extent possible by county deed records and
\nwith parties to the transaction. Information on these sales is shown on the
\nfollowing pages:<\/p>\n
-34-
\n 47
\nIMPROVED SALE NUMBER 1<\/p>\n
\n
\nGENERAL SALE DATA<\/p>\nLocation: 1770 Independence Court, Homewood, Jefferson County, Alabama
\nDate of Sale: March 9, 1993
\nDeed Book\/Page: 4223\/115
\nGrantor: Brookwood Medical & Dental Group
\nGrantee: Proxy Land Development Corporation
\nSale Price: $850,000
\nTerms of Sale: All Cash<\/p>\n
PROPERTY DATA<\/p>\n
Land Size: 92,200 square feet
\nBuilding Size: 7,808 square feet – gross
\n 6,928 square feet – leasable
\nYear Built: 1984
\nOccupancy at Sale: 100%<\/p>\n
STABILIZED OPERATING DATA
\n Dollars Per SF
\n ——- ——
\nEstimated Gross Income: $100,456 $14.50
\nVacancy Allowance @ 5%: $5,023 $ 0.73
\n ——– ——
\nEffective Gross Income: $ 95,433 $13.77
\nEstimated Expenses @ $4.00: $ 27,712 $ 4.00
\n ——- ——
\nNet Operating Income: $ 67,721 $ 9.77<\/p>\n
MARKET VALUE INDICATORS<\/p>\n
Sale Price Per Gross Square Foot: $ 108.86
\nStabilized Overall Rate: 8.0%
\nEGIM: 8.91<\/p>\n
<\/c><\/s><\/table>\n
COMMENTS<\/p>\n
The Grantor was an affiliate of HealthSouth Medical Center. The hospital paid
\nmore than market value for the building, so the Grantee\/physician would move
\nhis surgical practice to the HealthSouth Medical Center. The location and
\nbuilding quality for this comparable are inferior to the subject property.<\/p>\n
-35-
\n 48
\nIMPROVED SALE NUMBER 2<\/p>\n
\n
\nGENERAL SALE DATA<\/p>\nLocation: West side of 20th Street South at the address 908 20th Street South in
\n Birmingham, Alabama
\nDate of Sale: December 20, 1991
\nDeed Book\/Page: 4166\/170
\nGrantor: The Byrd Company, Inc.
\nGrantee: Board of Trustees of the University of Alabama
\nSale Price: $3,750,000
\nTerms of Sale: All Cash<\/p>\n
PROPERTY DATA<\/p>\n
Land Size: 82,460 square feet
\nBuilding Size: 52,440 square feet – gross
\n 44,574 square feet – leasable
\nYear Built: 1964<\/p>\n
STABILIZED OPERATING DATA
\n Dollars Per SF
\n ——- ——
\nEstimated Gross Income: $624,036 $14.00
\nVacancy Allowance @ 10%: $ 62,404 $ 1.40
\n —–
\nEffective Gross Income: $561,632 $12.60
\nEstimated Expenses @ $6.00\/SF $222,870 $ 5.00
\n ——– —–
\nNet Operating Income: $338,762 $ 7.60<\/p>\n
MARKET VALUE INDICATORS<\/p>\n
Sale Price Per Gross Square Foot: $ 71.51
\nStabilized Overall Rate: 9.0%
\nEGIM: 6.68<\/p>\n
<\/c><\/s><\/table>\n
COMMENTS<\/p>\n
This three-story building was purchased by the UAB Medical Center. A Medical
\nGenetics Center now occupies the facility. The current land value near the UAB
\ncampus is estimated at 40% to 45% of the total purchase price.<\/p>\n
-36-
\n 49
\nIMPROVED SALE NUMBER 3<\/p>\n
\n
\nGENERAL SALE DATA<\/p>\nLocation: 1260 Upper Hembree Road in Roswell, Fulton County, Georgia
\nDate of Sale: November 20, 1991
\nDeed Book\/Page: 14752\/1-8
\nGrantor: Upper Hembree Associates II, Ltd.
\nGrantee: Medical Plaza, Inc.
\nSale Price: $4,525,000
\nTerms of Sale: All Cash<\/p>\n
PROPERTY DATA<\/p>\n
Land Size: 1.65 acres (approximate)
\nBuilding Size: 32,500 square feet
\nYear Built: 1991
\nOccupancy at Sale: 100%<\/p>\n
STABILIZED OPERATING DATA
\n Dollars Per SF
\n ——- ——
\nEstimated Gross Income*: $671,125 $20.65
\nVacancy Allowance @ 5%: $ 33,556 $ 1.03
\n ——- —–
\nEffective Gross Income: $637,569 $19.62
\nEstimated Expenses @ $6.00\/SF $178,750 $ 5.50
\n ——– —–
\nNet Operating Income: $458,819 $14.12<\/p>\n
MARKET VALUE INDICATORS<\/p>\n
Sale Price Per Gross Square Foot: $ 139.23
\nStabilized Overall Rate: 10.1%
\nEGIM: 7.10<\/p>\n
<\/c><\/s><\/table>\n
COMMENTS<\/p>\n
This property included three buildings containing 12,400 SF, 12,000 SF and
\n8,100 SF. The first two buildings were leased to North Fulton Hospital for
\nseven years. The first 12,400 SF was leased for $16.00\/SF net, and the other
\n12,000 SF was leased for $16.25\/SF net. The tenants were responsible for all
\ncosts but structural maintenance and management.<\/p>\n
* The rents were adjusted upward $4.50\/SF for gross comparison.<\/p>\n
-37-
\n 50
\nThese three sales are summarized as follows:<\/p>\n
SUMMARY OF IMPROVED SALES<\/p>\n
\n\n SALE RENTABLE PRICE PER
\n NUMBER ADDRESS SQ. FT. SALE PRICE SQ. FT.
\n
\n 1 Independence Court 6,928 $ 850,000 $122.69
\n Birmingham, Alabama<\/p>\n 2 20th Street South 44,574 $3,750,000 $ 84.13
\n Birmingham, Alabama<\/p>\n
3 1260 Upper Hembree 32,500 $4,525,000 $139.23
\n Roswell, Georgia<\/p>\n
<\/c><\/c><\/c><\/c><\/s><\/caption>\n<\/table>\n
The unadjusted prices of these comparables range from $84.13 per square foot to
\n$139.23 per gross square foot. Each of the comparables will be discussed and
\nadjusted for comparisons with the subject property. An Improved Sales
\nAdjustment Matrix is shown at the end of this section.<\/p>\n
SALE NUMBER 1 is a Class C professional office building that is located near
\nthe Brookwood Medical Center. An affiliate of HealthSouth Medical Center
\npurchased this building to encourage its physician\/owner to move his practice
\nto their facility. This transaction was reportedly at a market value price.
\nHowever, a downward adjustment is still indicated because the building never
\nwas marketed as a vacant building due to this relationship. The building is
\nlocated at the end of a steep winding road, and has poor visibility. An upward
\nadjustment is indicated due to this inferior location compared to the subject.
\nAn offsetting downward adjustment to the price per square foot is indicated
\nbecause of the smaller size of this comparable. An upward adjustment to this
\ncomparable is indicated because of the subject’s superior construction quality.
\nThe adjusted price per square foot of this comparable is $103.42.<\/p>\n
SALE NUMBER 2 is the sale of a building purchased by UAB to use as a Medical
\nGenetics Center. An upward adjustment is warranted for time. The sale’s
\nlocation near a medical center is similar to the subject’s. The sale’s
\neffective age is significantly above the subject’s indicating an upward
\nadjustment. A downward adjustment for size would be warranted. The adjusted
\nprice for this comparable is $90.10 per square foot.<\/p>\n
-38-
\n 51
\nSALE NUMBER 3 was the sale of a three-building professional office facility
\nthat is located approximately one-quarter-mile from the North Fulton Medical
\nCenter in Roswell, Georgia. An upward adjustment for time has been applied.
\nDownward adjustments to the price per square foot of this comparable are
\nindicated because it is new and smaller than the subject facility. The
\nadjusted price per square foot of this comparable is $116.95.<\/p>\n
The adjusted prices per square foot range from $90.10 to $116.95. An adjusted
\nprice of $100.00 per square foot is representative of the subject property.
\nBased on this analysis, the market value of the subject property by the Sales
\nComparison Approach, as of January 1, 1994, the effective date of this report,
\nis calculated as follows:<\/p>\n
127,488 SF x $100.00\/SF = $12,448,800<\/p>\n
Rounded to: $12,750,000
\n ==========<\/p>\n
-39-
\n 52
\n I M P R O V E D S A L E A D J U S T M E N T G R I D
\n Goodyear Clinic
\n Hamiter Building
\n Baptist Medical Building II
\n Gadsden, Alabama<\/p>\n
Element Subject Bldg Comp Bldg Comp Bldg Comp
\n #1 #2 #3<\/p>\n
Sale Price\/SF $108.86 $71.51 $139.23<\/p>\n
Property Rights Fee Simple Same Same Same
\n Adjustment
\n ——————————–
\nAdjusted Price\/SF $108.86 $71.51 $139.23<\/p>\n
Financing Cash Cash Cash Cash
\n Adjustment
\n ——————————–
\nAdjusted Price\/SF $108.86 $71.51 $139.23<\/p>\n
Conditions of Sale None None
\n Adjustment -5% 0%
\n ——————————–
\nAdjusted Price\/SF $108.86 $71.51 $139.23<\/p>\n
Market\/Time
\n Adjustment 0% 5% 5%
\n ——————————–
\nAdjusted Price\/SF $103.42 $75.09 $146.19<\/p>\n
Other Adjustments:
\n Location Adjustment 5% 0% 0%
\n Building Condition 5% 25% -15%
\n Size Adjustment -10% -5% -5%
\n —— —— ——
\n Net Other Adjustments 0% 20% -20%<\/p>\n
FINAL ADJUSTED PRICE PER SF $103.42 $90.10 $116.95
\n ================================<\/p>\n
-40-
\n 53
\n INCOME APPROACH<\/p>\n
The Income Approach is based on the principle of anticipation, and has as its
\npremise that value is represented by the present worth of expected future
\nbenefits. The price that an investor will pay for an income property usually
\ndepends on the anticipated income stream. The Income Approach represents an
\nattempt to simulate the future cash flows for the property, and to quantify the
\nfuture benefits in present dollars.<\/p>\n
The subject properties consist of three of four professional office buildings
\nthat Quorum Health Group, Inc. is selling for the purpose of establishing a
\nreal estate investment trust (REIT). Quorum Health Group, Inc., the seller,
\nwill provide a net rental guarantee in the form of a master lease. The REIT,
\nas the new property owner, will receive an annual rental income regardless of
\nthe rental rates charged or received from the actual physician\/tenants.<\/p>\n
This master lease is a credit enhancement vehicle that will enable the REIT
\nissuer to sell the REIT shares. It will also allow leasing flexibility for the
\noffice space. Quorum can lease office space to various physicians at different
\nrates and terms, or they can use the office space for hospital purposes.<\/p>\n
The annual income stream guaranteed to the REIT is $1,327,501. Based upon the
\ntotal leasable square footage of the subject office buildings of 102,741, this
\nwould correlate to a net rental rate per square foot of $13.00 (rounded). This
\naverage rate per square foot appears to be reasonable based upon our market
\nresearch and rent comparables. There is little Class A space in the Gadsden
\narea, and as such, the subject property is viewed as premium office space. We
\nhave included these comparables in the Exhibit Section of this report.<\/p>\n
Valuation Counselors has received documentation of the guaranteed rental income
\nstream, but the actual master lease agreements for each property are not yet
\navailable. For the purpose of our Income Approach, the gross income will be
\nthe guaranteed annual income stream for all three of the professional office
\nbuildings of $1,327,501.<\/p>\n
The subject appraisal assumes that 100 percent of the income is guaranteed
\nthrough the master lease agreement. Since the leased fee interest is being
\nappraised, there is no deduction for vacancy or credit loss.<\/p>\n
-41-
\n 54<\/p>\n
Since the master lease provides for an income level to the REIT net of all
\noperating expenses, the only out-of-pocket expenses to the REIT will be
\naccounting, legal and internal administration or management expenses. These
\nmanagement expenses are estimated at five percent of effective gross income, or
\n$66,375, based on the management experience of other properties. The net
\noperating income for the property is $1,327,501 less $66,375, or $1,261,126.<\/p>\n
The estimated direct capitalization rates, or overall rates (OARs), for the
\nfour improved sale comparables presented in the Sales Comparison Approach
\nsection of this report are summarized as follows:<\/p>\n
\n\n Sale Number Property Location Sale Date OAR (%)
\n
\n 1 Independence Court March 1993 8.0%
\n Birmingham, Alabama<\/p>\n 2 20th Street South December 1992 9.0%
\n Birmingham, Alabama<\/p>\n
3 Upper Hembree November 1991 10.1%
\n Roswell, Georgia
\n<\/c><\/c><\/c><\/s><\/caption>\n<\/table>\n
The direct capitalization, or overall rates, for these comparables ranged from
\n8.0 percent to 10.1 percent.<\/p>\n
A capitalization rate at 10.0 percent is considered appropriate because of the
\nage of the subject.<\/p>\n
Therefore, it is our opinion that the market value of the subject property by
\nthe Income Approach is calculated and rounded as follows:<\/p>\n
Net Operating Income\/OAR = Estimated Value<\/p>\n
$1,261,126\/.10 = $12,611,260<\/p>\n
Rounded to: $12,600,000
\n ==========<\/p>\n
-42-
\n 55
\n CORRELATION AND CONCLUSION<\/p>\n
We have considered three approaches to value in order to estimate the value of
\nthe subject professional office buildings. The three approaches are summarized
\nas follows:<\/p>\n
\n
\n Cost Approach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $13,650,000
\n Sales Comparison Approach . . . . . . . . . . . . . . . . . . . . . . . . $12,750,000
\n Income Approach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $12,600,000
\n<\/c><\/s><\/table>\nThe Cost Approach involved a detailed analysis of the individual components of
\nthe property. These costs were estimated using sources which were considered
\nto be reliable. However, estimating the replacement cost and all forms of
\ndepreciation is difficult. For this reason, this approach is considered only a
\nfair indicator of value for the subject property.<\/p>\n
The Sales Comparison Approach is based on the price that investors and
\nowner-occupants have recently paid for comparable professional office
\nbuildings. The quantity and quality of data available in this approach was
\nconsidered good, but no comparable transactions were found directly in the
\nGadsden market. The appraisers only consider this approach to be a fair
\nindicator of value for the subject property.<\/p>\n
The Income Approach normally provides the most reliable value estimate for
\nprofessional office buildings such as the subject. Although many buyers of
\nprofessional office buildings are owner\/occupants, these buyers are generally
\naware of a property’s cash flow potential and its value from an investor’s
\nperspective. For this reason, the Income Approach is considered the best
\nindicator of value for the subject property.<\/p>\n
Based on this analysis, it is our opinion that the market value of the subject
\nprofessional office buildings, as of January 1, 1994, and based on the
\nassumptions and limiting conditions in this report, is:<\/p>\n
$12,600,000
\n ==========<\/p>\n
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