Ex. 23 Appraisal Report
WOODLANDS AT REDONDO CREEK
30231 20TH AVE S
FEDERAL WAY, WASHINGTON 98003
CBRE GROUP, INC. FILE NO. 20-224NW-2252-1
RMJ HOLDINGS LLC
APPRAISAL
REPORT
CBRE VALUATION & ADVISORY SERVICES
RESUBMITTED
Apr 24 2020
CITY OF FEDERAL WAY
COMMUNITY DEVELOPMENT
Exhibit 23
VALUATION & ADVISORY SERVICES
1420 Fifth Ave. Ste. 1700
Seattle, WA 98101
T 206-292-6122
F 206-292-1601
www.cbre.com
April 6, 2020
Mr. Dmitriy Mayzlin
Director of Land A&D
RMJ HOLDINGS LLC
9675 SE 36th Street, Suite 105
Mercer Island, Washington 98040
RE: Appraisal of: Woodlands at Redondo Creek
30231 20th Ave S
Federal Way, King County, Washington
CBRE, Inc. File No. 20-224NW-2252-1
Dear Mr. Mayzlin:
At your request and authorization, CBRE, Inc. has prepared an appraisal of the market value of
the referenced property. Our analysis is presented in the following Appraisal Report.
The subject is a 21.90-acre (953,963 sq. ft.) tract of vacant land (residential subdivision) located
at 30231 20th Ave S in Federal Way, Washington. It consists of two tax parcels and has
approximately 2,369 linear feet of frontage on three sides. The terrain is rolling, with wetlands
that require buffers, resulting in a net buildable site of approximately 60% or roughly 13.14
acres. The owner proposes a subdivision with 68 residential lots averaging approximately 6,047
square feet each.
Based on the analysis contained in the following report, the market value of the subject is
concluded as follows:
MARKET VALUE CONCLUSION
Appraisal Premise Interest Appraised Date of Value Value Conclusion
As Is Fee Simple Estate April 2, 2020 $2,400,000
Compiled by CBRE
The report, in its entirety, including all assumptions and limiting conditions, is an integral part of,
and inseparable from, this letter.
As of the date of value and the date of this report, the nation, region, and market area are
impacted by the COVID-19 pandemic. This could have a prolonged effect on macroeconomic
conditions, though at this time the length of duration is unknown. The perceived impact on real
Exhibit 23
Mr. Dmitriy Mayzlin
April 6, 2020
Page 2
estate varies on several factors including asset class, use, tenancy, and location. Our analysis
considers available information as of the effective date.
The following appraisal sets forth the most pertinent data gathered, the techniques employed,
and the reasoning leading to the opinion of value. The analyses, opinions and conclusions were
developed based on, and this report has been prepared in conformance with, the guidelines and
recommendations set forth in the Uniform Standards of Professional Appraisal Practice (USPAP),
and the requirements of the Code of Professional Ethics and Standards of Professional Appraisal
Practice of the Appraisal Institute.
The intended use and user of our report are specifically identified in our report as agreed upon in
our contract for services and/or reliance language found in the report. As a condition to being
granted the status of an intended user, any intended user who has not entered into a written
agreement with CBRE in connection with its use of our report agrees to be bound by the terms
and conditions of the agreement between CBRE and the client who ordered the report. No other
use or user of the report is permitted by any other party for any other purpose. Dissemination of
this report by any party to any non-intended users does not extend reliance to any such party,
and CBRE will not be responsible for any unauthorized use of or reliance upon the report, its
conclusions or contents (or any portion thereof).
It has been a pleasure to assist you in this assignment. If you have any questions concerning the
analysis, or if CBRE can be of further service, please contact us.
Respectfully submitted,
CBRE - VALUATION & ADVISORY SERVICES
Robert Mangino Whitney Haucke, MAI, CPA, MRICS
Senior Appraiser Managing Director
State Certified General Real Estate Appraiser State Certified General Real Estate Appraiser
Washington Certification No. 1101669 Washington Certification No. 1101005
Expiration Date: 10/15/2020 Expiration Date: 05/17/2020
Phone: 206-292-6164 Phone: 206-292-6006
Fax: 206-292-1601 Fax: 206-292-1601
Email: robert.mangino@cbre.com Email: whitney.haucke@cbre.com
Exhibit 23
Certification
i
Woodlands at Redondo Creek, Federal Way, Washington
Certification
We certify to the best of our knowledge and belief:
1. The statements of fact contained in this report are true and correct.
2. The reported analyses, opinions, and conclusions are limited only by the reported assumptions and
limiting conditions and are our personal, impartial and unbiased professional analyses, opinions, and
conclusions.
3. We have no present or prospective interest in or bias with respect to the property that is the subject of
this report and have no personal interest in or bias with respect to the parties involved with this
assignment.
4. Our engagement in this assignment was not contingent upon developing or reporting predetermined
results.
5. Our compensation for completing this assignment is not contingent upon the development or reporting
of a predetermined value or direction in value that favors the cause of the client, the amount of the
value opinion, the attainment of a stipulated result, or the occurrence of a subsequent event directly
related to the intended use of this appraisal.
6. This appraisal assignment was not based upon a requested minimum valuation, a specific valuation, or
the approval of a loan.
7. Our analyses, opinions, and conclusions were developed, and this report has been prepared, in
conformity with the Uniform Standards of Professional Appraisal Practice, as well as the requirements
of the State of Washington.
8. The reported analyses, opinions, and conclusions were developed, and this report has been prepared,
in conformity with the requirements of the Code of Professional Ethics and Standards of Professional
Appraisal Practice of the Appraisal Institute.
9. The use of this report is subject to the requirements of the Appraisal Institute relating to review by its
duly authorized representatives.
10. As of the date of this report, Whitney Haucke has completed the continuing education program for
Designated Members of the Appraisal Institute.
11. As of the date of this report, Robert Mangino has completed the Standards and Ethics Education
Requirements for Candidates/Practicing Affiliates of the Appraisal Institute.
12. Robert Mangino has and Whitney Haucke has not made a personal inspection of the property that is
the subject of this report.
13. No one provided significant real property appraisal assistance to the persons signing this report.
14. Valuation & Advisory Services operates as an independent economic entity within CBRE, Inc. Although
employees of other CBRE, Inc. divisions may be contacted as a part of our routine market research
investigations, absolute client confidentiality and privacy were maintained at all times with regard to
this assignment without conflict of interest.
15. Robert Mangino has not and Whitney Haucke has not provided any services, as an appraiser or in any
other capacity, regarding the property that is the subject of this report within the three-year period
immediately preceding acceptance of this assignment.
Robert Mangino Whitney Haucke, MAI, CPA, MRICS
Senior Appraiser Managing Director
State Certified General Real Estate Appraiser State Certified General Real Estate Appraiser
Washington Certification No. 1101669 Washington Certification No. 1101005
Expiration Date: 10/15/2020 Expiration Date: 05/17/2020
Exhibit 23
Subject Photographs
ii
Woodlands at Redondo Creek, Federal Way, Washington
Subject Photographs
Aerial View
Exhibit 23
Subject Photographs
iii
Woodlands at Redondo Creek, Federal Way, Washington
Subject from southeast Subject from northeast
Subject from southwest Subject from south
Subject from west Subject interior near south end
Exhibit 23
Subject Photographs
iv
Woodlands at Redondo Creek, Federal Way, Washington
Subject interior near middle View north on 20th Ave
View west on 304th Street View east on 304th Street
View north on Highway 99 Intersection of Highway 99 and 304th St
Exhibit 23
Subject Photographs
v
Woodlands at Redondo Creek, Federal Way, Washington
Properties east of subject Properties southeast of subject
Property south of subject Property southwest of subject
Properties west of subject across Hwy 99 Properties west of subject across Hwy 99
Exhibit 23
Executive Summary
vi
Woodlands at Redondo Creek, Federal Way, Washington
Executive Summary
Property Name
Location
Parcel Number(s)
Client
Highest and Best Use
As Improved
Property Rights Appraised
Date of Inspection
Estimated Exposure Time
Estimated Marketing Time
Primary Land Area 21.90 AC 953,963 SF
Net Land Area (Estimated)13.14 AC 572,378 SF
Zoning
Buyer Profile Developer
Woodlands at Redondo Creek
April 2, 2020
Fee Simple Estate
Land
30231 20th Ave S
Federal Way, King County, WA 98003
RMJ HOLDINGS LLC
042104-9012 & 042104-9221
6 - 12 Months
6 - 12 Months
RS 5.0
VALUATION Total Per SF
Land Value $2,400,000 $2.52
CONCLUDED MARKET VALUE
Appraisal Premise Interest Appraised Value
As Is Fee Simple Estate $2,400,000
Compiled by CBRE
Date of Value
April 2, 2020
STRENGTHS, WEAKNESSES, OPPORTUNITIES AND THREATS (SWOT)
Strengths/ Opportunities
• The subject is well located with exposure to and access from multiple streets.
• The subject is convenient to Highway 99, a major commercial and commuting arterial.
• There is a significant retail concentration of greater than 1 million square feet approximately
one mile south of the subject.
• The subject is a medium-sized subdivision site, large enough to attract the widest range of
developers—not so large that only national developers could afford to develop it, and not so
small that only local builders would be interested.
• The local population and job expansion has created a well-documented housing crunch in
the Seattle area, with high housing costs in the core markets forcing potential home-buyers to
suburbs like Federal Way.
Weaknesses/ Threats
• The average and median income levels in the subject’s immediate area are below the MSA
income levels.
Exhibit 23
Executive Summary
vii
Woodlands at Redondo Creek, Federal Way, Washington
• The subject’s topography includes slopes and wetlands that are more expensive to develop
than a flatter site would be; some of the site is not developable at all.
• Increased uncertainty and risk associated with COVID-19 (see discussion below). Most
participants anticipate with the greatest impact felt in the next 3-9 months.
EXTRAORDINARY ASSUMPTIONS
An extraordinary assumption is defined as “an assignment-specific assumption as of the effective
date regarding uncertain information used in an analysis which, if found to be false, could alter
the appraiser’s opinions or conclusions.” 1
• The value derived herein assumes the development will be able to be fully entitled and
permitted for the construction of the proposed improvements. It is assumed there will be no
delays in acquiring necessary permits and approvals for government agencies. Further, it is
assumed the project will be completed on time and within budget, in accordance with the
plans provided, commensurate with competing properties in the area.
HYPOTHETICAL CONDITIONS
A hypothetical condition is defined as “a condition, directly related to a specific assignment,
which is contrary to what is known by the appraiser to exist on the effective date of the
assignment results, but is used for the purposes of analysis.” 2
• None noted
OWNERSHIP AND PROPERTY HISTORY
OWNERSHIP SUMMARY
Item Current
Current Ownership
Owner:RMJ Holdings, LLC
Seller:Tatiana Spoerry, Olga Danilchik, et al
Purchase Price:$2,256,000
Transaction Date:May 20, 2019
Legal Reference:20190520000974
County/Locality Name:King
Arm's Length:Yes
At / Above / Below Market:At Market
Comments:On market nine months at $2.5
million
Compiled by CBRE
Title to the property is currently vested in the name of RMJ Holdings LLC, which acquired title to
the property in May 2019 for $2,256,000, as recorded in King County online deed records. This
most recent sale transaction of the subject appears to have been arm’s length and reasonable
1 The Appraisal Foundation, USPAP, 2018-2019
2 The Appraisal Foundation, USPAP, 2018-2019
Exhibit 23
Executive Summary
viii
Woodlands at Redondo Creek, Federal Way, Washington
based upon the subject’s exposure on the open market for nearly nine months, as listed by the
local brokerage Paragon Real Estate Advisors, at a price of $2,500,000.
To the best of our knowledge, there were two quit claim ownership name changes in the year
prior to the sale, apparently consolidating ownership among family members, but the same
names were associated with ownership of the subject as far back as 1996.
EXPOSURE/MARKETING TIME
Current appraisal guidelines require an estimate of a reasonable time period in which the subject
could be brought to market and sold. This reasonable time frame can either be examined
historically or prospectively. In a historical analysis, this is referred to as exposure time. Exposure
time always precedes the date of value, with the underlying premise being the time a property
would have been on the market prior to the date of value, such that it would sell at its appraised
value as of the date of value. On a prospective basis, the term marketing time is most often
used. The exposure/marketing time is a function of price, time, and use. It is not an isolated
estimate of time alone. In consideration of these factors, we have analyzed the following:
• exposure periods for comparable sales used in this appraisal;
• the opinions of market participants.
In light of the COVID-19 pandemic, we would anticipate a slightly longer marketing period
relative to the exposure period. The following table presents information derived from various
sources and our conclusion.
The following table presents the information derived from these sources.
EXPOSURE/MARKETING TIME DATA
Exposure/Mktg. (Months)
Investment Type Range Average
Comparable Sales Data 9.0 -18.0 12.3
Local Market Professionals 6.0 -36.0 12.0
CBRE Exposure Time Estimate
CBRE Marketing Period Estimate
Source: Comparable Sales and Local Market Professionals
6 - 12 Months
6 - 12 Months
Exhibit 23
Table of Contents
ix
Woodlands at Redondo Creek, Federal Way, Washington
Table of Contents
Certification ....................................................................................................................... i
Subject Photographs ...........................................................................................................ii
Executive Summary ........................................................................................................... vi
Table of Contents .............................................................................................................. ix
Scope of Work .................................................................................................................. 1
Area Analysis .................................................................................................................... 5
Neighborhood Analysis ..................................................................................................... 7
Site Analysis .................................................................................................................... 15
Zoning ............................................................................................................................ 20
Tax and Assessment Data ................................................................................................ 21
Market Analysis ............................................................................................................... 22
Highest and Best Use ...................................................................................................... 36
Land Value ..................................................................................................................... 38
Assumptions and Limiting Conditions ............................................................................... 47
ADDENDA
A Land Sale Data Sheets
B Title Report/Legal Description
C Deed
D Client Contract Information
E Qualifications
Exhibit 23
Scope of Work
1
Woodlands at Redondo Creek, Federal Way, Washington
Scope of Work
This Appraisal Report is intended to comply with the reporting requirements set forth under
Standards Rule 2 of USPAP. The scope of the assignment relates to the extent and manner in
which research is conducted, data is gathered and analysis is applied.
INTENDED USE OF REPORT
This appraisal is to be used for determination of a potential fee-in-lieu of open space dedication
as part of the development of the subject, and no other use is permitted.
CLIENT
The client is RMJ Holdings LLC.
INTENDED USER OF REPORT
This appraisal is to be used by RMJ Holdings LLC and the City of Federal Way and no other user
may rely on our report unless as specifically indicated in the report.
Intended Users - the intended user is the person (or entity) who the appraiser intends
will use the results of the appraisal. The client may provide the appraiser with
information about other potential users of the appraisal, but the appraiser ultimately
determines who the appropriate users are given the appraisal problem to be solved.
Identifying the intended users is necessary so that the appraiser can report the
opinions and conclusions developed in the appraisal in a manner that is clear and
understandable to the intended users. Parties who receive or might receive a copy of
the appraisal are not necessarily intended users. The appraiser’s responsibility is to
the intended users identified in the report, not to all readers of the appraisal report. 3
PURPOSE OF THE APPRAISAL
The purpose of this appraisal is to estimate the market value of the subject property.
DEFINITION OF VALUE
The current economic definition of market value agreed upon by agencies that regulate federal
financial institutions in the U.S. (and used herein) is as follows:
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;
3 Appraisal Institute, The Appraisal of Real Estate, 14th ed. (Chicago: Appraisal Institute, 2013), 50.
Exhibit 23
Scope of Work
2
Woodlands at Redondo Creek, Federal Way, Washington
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 U.S. dollars or in terms of financial arrangements
comparable thereto; and
5. the price represents the normal consideration for the property sold unaffected by special
or creative financing or sales concessions granted by anyone associated with the sale. 4
INTEREST APPRAISED
The value estimated represents Fee Simple Estate as defined below:
Fee Simple Estate - Absolute ownership unencumbered by any other interest or estate,
subject only to the limitations imposed by the governmental powers of taxation,
eminent domain, police power and escheat. 5
Extent to Which the Property is Identified
The property is identified through the following sources:
• postal address
• assessor’s records
Extent to Which the Property is Inspected
CBRE inspected the subject site as well as its surrounding environs on the inspection date of the
appraisal. Our inspection included viewing the site from public roads and sidewalks, as well as
inspection of the subject interior via trails. We were able to observe the majority of the site from
multiple angles. This inspection was considered an adequate representation of the subject
property and is the basis for our findings.
Type and Extent of the Data Researched
CBRE reviewed the following:
• applicable tax data
• zoning requirements
• flood zone status
• demographics
• comparable data
Type and Extent of Analysis Applied
CBRE, Inc. analyzed the data gathered through the use of appropriate and accepted appraisal
methodology to arrive at a probable value indication via each applicable approach to value. For
vacant land, the sales comparison approach has been employed for this assignment.
4 Interagency Appraisal and Evaluation Guidelines; December 10, 2010, Federal Register, Volume 75 Number 237,
Page 77472.
5 Appraisal Institute, The Dictionary of Real Estate Appraisal, 6th ed. (Chicago: Appraisal Institute, 2015), 90.
Exhibit 23
Scope of Work
3
Woodlands at Redondo Creek, Federal Way, Washington
Data Resources Utilized in the Analysis
DATA SOURCES
Item:Source(s):
Site Data
Size King County assessor, CoStar, offering memorandum
Other
Title Report Client
Survey Client
Data Not Provided
Soils report, Phase 1 ESA
Compiled by CBRE
APPRAISAL METHODOLOGY
In appraisal practice, an approach to value is included or omitted based on its applicability to the
property type being valued and the quality and quantity of information available. Depending on
a specific appraisal assignment, any of the following four methods may be used to determine the
market value of the fee simple interest of land:
• Sales Comparison Approach;
• Income Capitalization Procedures;
• Allocation; and
• Extraction.
The following summaries of each method are paraphrased from the text.
The first is the sales comparison approach. This is a process of analyzing sales of similar,
recently sold parcels in order to derive an indication of the most probable sales price (or value) of
the property being appraised. The reliability of this approach is dependent upon (a) the
availability of comparable sales data, (b) the verification of the sales data regarding size, price,
terms of sale, etc., (c) the degree of comparability or extent of adjustment necessary for
differences between the subject and the comparables, and (d) the absence of nontypical
conditions affecting the sales price. This is the primary and most reliable method used to value
land (if adequate data exists).
The income capitalization procedures include three methods: land residual technique, ground
rent capitalization, and Subdivision Development Analysis. A discussion of each of these three
techniques is presented in the following paragraphs.
The land residual method may be used to estimate land value when sales data on
similar parcels of vacant land are lacking. This technique is based on the principle of
balance and the related concept of contribution, which are concerned with equilibrium
among the agents of production--i.e. labor, capital, coordination, and land. The land
residual technique can be used to estimate land value when: 1) building value is
known or can be accurately estimated, 2) stabilized, annual net operating income to
the property is known or estimable, and 3) both building and land capitalization rates
can be extracted from the market. Building value can be estimated for new or
Exhibit 23
Scope of Work
4
Woodlands at Redondo Creek, Federal Way, Washington
proposed buildings that represent the highest and best use of the property and have
not yet incurred physical deterioration or functional obsolescence.
The subdivision development method is used to value land when subdivision and
development represent the highest and best use of the appraised parcel. In this
method, an appraiser determines the number and size of lots that can be created
from the appraised land physically, legally, and economically. The value of the
underlying land is then estimated through a discounted cash flow analysis with
revenues based on the achievable sale price of the finished product and expenses
based on all costs required to complete and sell the finished product.
The ground rent capitalization procedure is predicated upon the assumption that
ground rents can be capitalized at an appropriate rate to indicate the market value of
a site. Ground rent is paid for the right to use and occupy the land according to the
terms of the ground lease; it corresponds to the value of the landowner's interest in the
land. Market-derived capitalization rates are used to convert ground rent into market
value. This procedure is useful when an analysis of comparable sales of leased land
indicates a range of rents and reasonable support for capitalization rates can be
obtained.
The allocation method is typically used when sales are so rare that the value cannot be estimated
by direct comparison. This method is based on the principle of balance and the related concept
of contribution, which affirm that there is a normal or typical ratio of land value to property value
for specific categories of real estate in specific locations. This ratio is generally more reliable
when the subject property includes relatively new improvements. The allocation method does not
produce conclusive value indications, but it can be used to establish land value when the number
of vacant land sales is inadequate.
The extraction method is a variant of the allocation method in which land value is extracted from
the sale price of an improved property by deducting the contribution of the improvements, which
is estimated from their depreciated costs. The remaining value represents the value of the land.
Value indications derived in this way are generally unpersuasive because the assessment ratios
may be unreliable and the extraction method does not reflect market considerations.
For the purposes of this analysis, we have utilized the sales comparison approach as this
methodology is typically used for development sites that are feasible for development in the short
term. The other methodologies are used primarily when comparable land sales data is non-
existent. Therefore, these approaches have not been used.
Exhibit 23
Area Analysis
5
Woodlands at Redondo Creek, Federal Way, Washington
Area Analysis
POPULATION
The subject is located in the Seattle-Tacoma-Bellevue,WA Metropolitan Statistical Area.Key
information about the area is provided in the following tables.
The area has a population of 3,962,957 and
a median age of 38,with the largest
population group in the 30-39 age range and
the smallest population in 80+ age range.
Population has increased by 523,148 since
2010,reflecting an annual increase of 1.6%.
Population is projected to increase by an
additional 298,521 by 2024,reflecting 1.5%
annual population growth.
3,439,809 3,962,957 4,261,478
0
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
2010 2019 2024
POPULATION BY YEAR
0
200,000
400,000
600,000
800,000
0-9 10-19 20-29 30-39 40-49 50-59 60-69 70-79 80+
AREA POPULATION BY AGE
Source: Esri
Source: Esri
Subject
Exhibit 23
Area Analysis
6
Woodlands at Redondo Creek, Federal Way, Washington
INCOME
EDUCATION
EMPLOYMENT
The area includes a total of 2,103,920 employees and has a 4.6%unemployment rate.The
top three industries within the area are Health Care/Social Assistance,Prof/Scientific/Tech
Services and Retail Trade, which represent a combined total of 37% of the population.
The area features an average household
income of $116,745 and a median household
income of $86,376.Over the next five years,
median household income is expected to
increase by 17.9%, or $3,088 per annum.
A total of 42.8%of individuals over the age of
24 have a college degree,with 26.5%holding
a bachelor's degree and 16.3%holding a
graduate degree.
$86,376
$101,814
$0
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
2019 2024
MEDIAN INCOME BY YEAR
26.5%
16.3%57.2%
POPULATION BY DEGREE
Bachelor's Degree
Graduate Degree
Other
0%2%4%6%8%10%12%14%
Public Administration
Transportation/Warehousing
Other Services (excl Publ Adm)
Accommodation/Food Services
Construction
Educational Services
Manufacturing
Retail Trade
Prof/Scientific/Tech Services
Health Care/Social Assistance
Source: Esri
Source: Esri
Source: Esri
In summary, the area is forecast to experience an increase in population, an increase in
household income, and an increase in household values. This bodes well for residential
development.
Exhibit 23
Neighborhood Analysis
7
Woodlands at Redondo Creek, Federal Way, Washington
Neighborhood Analysis
LOCATION
The subject is in the city of Federal Way and is considered a suburban location. The city of
Federal Way is situated in southwest King County, about 17 miles south of the Seattle Central
Business District and nine miles northeast of the Tacoma CBD. Federal Way is generally
considered a bedroom community with most land utilized for residential use and the secondary
use being retail. Office and industrial occupy considerably smaller segments of the city.
BOUNDARIES
The neighborhood boundaries are detailed as follows:
North: 288th Street
South: 320th Street
East: Interstate 5
West: 1st Ave South
Land uses within the subject neighborhood consist of primarily residential uses, with commercial
and retail uses along main arterial roads. The primary commercial developments in the subject’s
immediate neighborhood are Pavillions Centre I and II, on the west side of Highway 99 about ten
blocks south of the subject, featuring anchors such as H-Mart and Best Buy. These lead into one
Subject
Exhibit 23
Neighborhood Analysis
8
Woodlands at Redondo Creek, Federal Way, Washington
of Federal Way’s two primary retail districts—the northerly one located along 320th Street (with
the southerly one at the junction of 348th Street, SR 18, and Interstate 5). The immediate area
surrounding the subject (north, south, and east) consists primarily of single-family residential uses
with much of the development being built between the 1960s and 1980s. The majority of the
single-family residential development within the 1-, 3-, and 5-mile radii of the subject may be
described as tract homes in the $350,000 price range for older homes, the $550,000 range for
homes built in the last two decades, with homes in new subdivisions in the $750,000 range. To
the west lies Highway 99, which is a primary commercial arterial.
Weyerhaeuser
The most predominant use by a single entity within Federal Way is the former Weyerhaeuser
Corporate Campus, which sits on more than 430 acres. In August of 2014, the Weyerhaeuser
Company announced that it would be moving into a new location in downtown Seattle, where a
smaller build-to-suit office facility was completed and occupied in 2018. Weyerhaeuser
previously accounted for approximately 920 jobs within Federal Way. A Los Angeles based real
estate developer, Industrial Realty Group (IRG), purchased the 343,534-sf former corporate
headquarters building and the 461,673-sf Weyerhaeuser Technology Center and has leased and
sold portions of the corporate headquarters buildings.
GROWTH PATTERNS
Growth patterns have occurred primarily along main commercial thoroughfares such as S. 320th
Street (west of Interstate 5) and Pacific Highway South (Highway 99). The major retail
development in the extended neighborhood is the 620,000-sf Commons at Federal Way,
formerly known as the SeaTac Mall. The subject neighborhood is best characterized as a
suburban community, with most residents working in the Seattle and Tacoma areas. There are
also several anchored retail shopping centers located in the subject’s expanded area, which were
primarily constructed from the 1980’s through the early 2000’s. As noted, the former
Weyerhaeuser Corporate Campus is in transition.
There has been a significant amount of residential and mixed-use developments occurring in the
city which will increase demand for existing commercial uses. An example of a recently completed
residential subdivision is Retreat Meadows by Lennar Homes, approximately 3.6 miles southwest
of the subject in Federal Way, although regional and national home-builders have also been
active developing smaller subdivisions in neighboring towns of Des Moines to the north and
Auburn to the east.
ACCESS
Primary access to the subject neighborhood is provided by Interstate 5. Interstate Highway 5 is
the major north-south road bisecting the entire Puget Sound region. Within the Puget Sound
region, it connects Tacoma, to the south, through Seattle and Everett to the north. The commute
Exhibit 23
Neighborhood Analysis
9
Woodlands at Redondo Creek, Federal Way, Washington
to the Seattle Central Business District is about 40 minutes, and the commute to the Tacoma
Central Business District is about 20 minutes. Both travel times are traffic-dependent and can be
much longer depending on the time of day and traffic congestion.
The Federal Way Transit Center and Federal Way Park and Ride are located one mile southeast
of the subject, just west of Interstate 5 and contain 2,067 parking spaces as well as bike lockers
and are serviced by King County Metro, Pierce Transit, and Sound Transit. Overall, access to the
subject neighborhood is generally good.
As part of the approved Sound Transit Light Rail project, Federal Way will benefit from a light rail
station located adjacent to the Transit Center and Park and Ride in the retail core near The
Commons mall. However, this light rail project will not likely be completed until 2024.
DEMOGRAPHICS
Selected neighborhood demographics in 1-, 3- and 5-mile radius from the subject are shown in
the following table:
30231 20th Ave S
Federal Way, WA 98003
Population
2024 Total Population 18,322 108,965 244,651 4,261,478
2019 Total Population 17,278 102,960 230,010 3,962,957
2010 Total Population 15,458 92,281 204,813 3,439,809
2000 Total Population 14,589 85,245 192,796 3,043,878
Annual Growth 2019 - 2024 1.18%1.14%1.24%1.46%
Annual Growth 2010 - 2019 1.24%1.22%1.30%1.59%
Annual Growth 2000 - 2010 0.58%0.80%0.61%1.23%
Households
2024 Total Households 6,478 39,297 89,887 1,667,906
2019 Total Households 6,153 37,388 85,044 1,552,319
2010 Total Households 5,624 34,035 76,924 1,357,475
2000 Total Households 5,637 32,344 74,388 1,196,568
Annual Growth 2019 - 2024 1.03%1.00%1.11%1.45%
Annual Growth 2010 - 2019 1.00%1.05%1.12%1.50%
Annual Growth 2000 - 2010 -0.02%0.51%0.34%1.27%
Income
2019 Median Household Income $58,206 $69,140 $69,069 $86,376
2019 Average Household Income $77,458 $92,305 $90,467 $116,745
2019 Per Capita Income $28,270 $33,624 $33,522 $45,850
2019 Pop 25+ College Graduates 2,616 19,121 41,285 1,185,804
Age 25+ Pct. College Graduates - 2019 22.5%27.2%26.2%42.8%
Source: ESRI
SELECTED NEIGHBORHOOD DEMOGRAPHICS
Seattle-Tacoma-
Bellevue, WA 1 Mile Radius 3 Mile Radius 5 Mile Radius
Exhibit 23
Neighborhood Analysis
10
Woodlands at Redondo Creek, Federal Way, Washington
CONCLUSION
As shown above, the population within the subject neighborhood has shown average growth over
the past nine years with annual growth of 1.22% to 1.30%. Anticipated growth is strongest within
a five-mile radius with 1.24% annual growth expected between 2019 and 2024. Household
income shows a lower-middle income demographic. The relocation of the Weyerhaeuser
Corporation had a negative effect overall on the local economy but the drawn-out timeframe of
that move to Seattle lessened the blow. Local retailers and the residential sectors have been
slightly affected.
Considering all factors, demand for existing developments is expected to continue to show signs
of growth in the short-term, with the rate of growth moderated by changes in the current
economic marketplace which are expected to show stronger signs of improvement going forward.
Further, the subject will benefit from its location near the intersection of and with frontage on two
arterials (304th Street and Highway 99), with convenient close proximity to Interstate 5 and access
to both the Tacoma and Seattle CBDs. As area local populations grow, and as housing costs in
core markets like Seattle increase, more residents will seek out Federal Way’s modest-priced
homes.
Exhibit 23
Site Analysis
11
Woodlands at Redondo Creek, Federal Way, Washington
PLAT MAP
Subject
Exhibit 23
Site Analysis
12
Woodlands at Redondo Creek, Federal Way, Washington
FLOOD PLAIN MAP
Subject
Exhibit 23
Site Analysis
13
Woodlands at Redondo Creek, Federal Way, Washington
SURVEY MAP
Exhibit 23
Site Analysis
14
Woodlands at Redondo Creek, Federal Way, Washington
PROPOSED SITE PLAN
Exhibit 23
Site Analysis
15
Woodlands at Redondo Creek, Federal Way, Washington
Site Analysis
The following chart summarizes the salient characteristics of the subject site.
SITE SUMMARY AND ANALYSIS
Physical Description
Gross Site Area 21.90 Acres 953,963 Sq. Ft.
Net Site Area (Estimated)13.14 Acres 572,378 Sq. Ft.
Primary Road Frontage 20th Ave 1,100 Feet
Secondary Road Frontage 304th St 610 Feet
Additional Road Frontage Hwy 99 659 Feet
Average Depth n/a
Excess Land Area None n/a
Surplus Land Area None n/a
Shape
Topography
Parcel Number(s)
Zoning District
Flood Map Panel No. & Date 53033C1235F May 16, 1995
Flood Zone Zone X (Unshaded)
Adjacent Land Uses
Earthquake Zone
Comparative Analysis
Visibility
Functional Utility
Traffic Volume
Adequacy of Utilities
Landscaping
Drainage
Utilities Availability
Water Y
Sewer Y
Natural Gas Y
Electricity Y
Telephone Y
Mass Transit Y
Other Yes No Unknown
Detrimental Easements X
Encroachments X
Deed Restrictions X
Reciprocal Parking Rights X
Source: Various sources compiled by CBRE
Rating
Average
Average
Good
Irregular
Rolling, with wetlands
RS 5.0
High risk
Commercial and residential uses
042104-9012 & 042104-9221
Assumed adequate
n/a
Provider
City of Federal Way
Assumed adequate
King County Metro
City of Federal Way
Puget Sound Energy
Puget Sound Energy
Various
Exhibit 23
Site Analysis
16
Woodlands at Redondo Creek, Federal Way, Washington
LOCATION
The subject is in west-central Federal Way, on the north side of S 304th Street, west of 20th Ave S,
and on the east side of Highway 99 (Pacific Highway).
LAND AREA
The gross land area of 21.9 acres was obtained from King County and the listing broker’s
marketing materials. The net size of 13.14 acres was estimated using the proposed site plan and
the topographical survey. The site is considered adequate in terms of size and utility. There is
unusable land area due to the existence of wetlands and slopes.
SHAPE AND FRONTAGE
The site is moderately irregular in shape, and has good frontage along three facing roads within
the neighborhood, one of which is a high-traffic state highway.
INGRESS/EGRESS
Ingress and egress is currently available to the site only via trails in the forest from the east, south,
and west sides. Potential vehicular access is available from 20th Ave S on the east side and S
304th Street on the south. Given the terrain, it appears less likely that there would be direct
access from Highway 99 to the west. The owner’s proposed site plan includes access from the
existing 20th Ave and via a proposed easement from another portion of 20th Ave S northeast of
the subject.
20th Ave S, at the subject, is technically a city easement that is partially part of the subject site. It
is a north/south residential street that is just one block long and terminates in an L-shaped cul-
de-sac. It is improved with one lane of traffic in each direction. Street improvements include
asphalt paving and concrete curbs on the east side. Street parking is permitted. The segment
northeast of the subject from which the proposed easement would access the subject is similar,
but several blocks long and not a dead end.
S 304th Street, at the subject, is an east/west secondary arterial street that is improved with one
lane of traffic in each direction. It mirrors the subject’s slopes with a significant dip in elevation.
Street parking is permitted.
Highway 99 (Pacific Highway), at the subject, is a north/south state highway that has three lanes
of traffic in each direction and is lined with numerous commercial improvements. Street
improvements include asphalt paving and concrete curbs, gutters and sidewalks, and street
lighting. Street parking is not permitted.
TOPOGRAPHY AND DRAINAGE
The site is approximately at street grade along the eastern edge, but the terrain is rolling with a
significant dip as one heads westward before rising up again near the western extremity. The
Exhibit 23
Site Analysis
17
Woodlands at Redondo Creek, Federal Way, Washington
topographical survey indicates a maximum height differential of 82 feet on the subject site, and
at the lowest points there are wetlands. In addition, we note that the subject is heavily wooded.
The topography of the site is seen as an impediment to the development of the entire property;
approximately 40% of the site appears undevelopable and is not likely to be improved. During
our inspection of the site, we observed ponds at the lowest parts of the site.
SOILS
A soils analysis for the site has not been provided for the preparation of this appraisal. In the
absence of a soils report, it is a specific assumption that the site has adequate soils to support the
highest and best use.
EASEMENTS AND ENCROACHMENTS
There are no known easements or encroachments impacting the site that are considered to affect
the marketability or highest and best use. As noted, 20th Ave appears to be built on an easement
granted to the City. It is recommended that the client/reader review the current title policy
included in the Addenda, which outlines all easements and encroachments on the property, prior
to making a business decision.
COVENANTS, CONDITIONS AND RESTRICTIONS
There are no known covenants, conditions or restrictions impacting the site that are considered to
affect the marketability or highest and best use. It is recommended that the client/reader obtain
a copy of the current covenants, conditions and restrictions, if any, prior to making a business
decision.
UTILITIES AND SERVICES
The site includes all municipal services, including police, fire and refuse garbage collection. All
utilities are available to the roads surrounding the site in adequate quality and quantity to service
the highest and best use.
ENVIRONMENTAL ISSUES
The appraiser is not qualified to detect the existence of potentially hazardous material or
underground storage tanks which may be present on or near the site. The existence of
hazardous materials or underground storage tanks may affect the value of the property. For this
appraisal, CBRE, Inc. has specifically assumed that the property is not affected by any hazardous
materials that may be present on or near the property.
Exhibit 23
Site Analysis
18
Woodlands at Redondo Creek, Federal Way, Washington
ADJACENT PROPERTIES
The adjacent land uses are summarized as follows:
North: Lakehaven Water & Sewer District and an area of single-family
residences
South: Unimproved land
East: Single-family residences
West: Small commercial development to the southwest and Pacific Highway
to the west. West of Pacific Highway is a church and unimproved
land.
CONCLUSION
The site is well located geographically and fairly well suited physically for residential subdivision
use. The topographical challenges are not ideal, but also are not unusual for local subdivision
sites.
Exhibit 23
Zoning
19
Woodlands at Redondo Creek, Federal Way, Washington
ZONING MAP
Subject
Exhibit 23
Zoning
20
Woodlands at Redondo Creek, Federal Way, Washington
Zoning
The following chart summarizes the subject’s zoning requirements.
ZONING SUMMARY
Current Zoning RS 5.0
Legally Conforming Yes
Uses Permitted Primarily single-family residences, with
related used such as cottages, townhomes,
etc with additional review process
Zoning Change Not likely
Category Zoning Requirement
Minimum Lot Size 5,000 Sq. Ft.
Minimum Lot Width None
Maximum Height 30 Feet
Minimum Setbacks
Front Yard 20 Feet
Street Side Yard 10 Feet
Interior Side Yard 10 Feet
Rear Yard 10 Feet
Maximum Bldg. Coverage 60%
Parking Requirements 2 per DU
Source: Federal Way Municipal Code
We note that the subject encompasses parts of three zoning areas, RS 5.0, RS 7.2, and RM 1800,
but the primary developable portion of the subject is RS 5.0, or Residential Single-Family with a
5,000-sf minimum lot size. The portion that is zoned RM 1800 for multifamily use is the part with
the greatest slopes and wetlands. In the proposed plat layout, this area is not developed, nor is
the small parcel to the north that is zoned for 7,200 square foot minimum lots. Any zoning
analysis of the subject is based on the predominant RS 5.0 zoning.
ANALYSIS AND CONCLUSION
The subject property is primarily zoned RS 5.0 by the City of Federal Way. This zone allows for a
narrow range of single-family residential uses, along with typical related uses such as places of
worship or schools, with a special review process. Based on our interpretation of the zoning
regulations, the proposed 68-lot residential subdivision as indicated by the owner appears to be
allowed under the zoning regulations and is relatively typical in the local area.
Exhibit 23
Tax and Assessment Data
21
Woodlands at Redondo Creek, Federal Way, Washington
Tax and Assessment Data
AD VALOREM TAX INFORMATION
Parcel Assessor's Parcel No.Parcel Description 2019 2020
1 042104-9012 Parcel A, 21.54 Ac.3,014 3,058
2 042104-9221 Parcel B, 0.36 Ac.77,000 80,000
Subtotal $80,014 $83,058
Assessed Value @ 100%100%
80,014 83,058
General Tax Rate (per $100 A.V.)1.131052 1.172675
Total Taxes $905 $974
Source: King County Assessor's Office
It is important to note that real estate tax assessments are maintained by the King County
Department of Assessments. In the State of Washington, real estate is assessed at 100% of the
assessor’s fee simple estimate of “fair market value.” The 2020 assessed values are reflective of
the assessor’s value as of January 1, 2019 for the 2020 tax year. In addition to property taxes,
there are additional fees (special assessments) that must also be paid, which includes a noxious
weed charge.
Properties selling for prices significantly greater than assessed value will often trigger an
adjustment upon the following re-assessment when the sale price is considered to reasonably
reflect market value. Prudent investors will consider the potential for a real estate tax adjustment
if market value or sales price significantly differs from the existing assessed value.
Assessed ratios for King County will typically range from 60% and 100% of market value.
Typically, the sale of a property will trigger a reassessment and that reassessment is typically 70%
to 90% of a recent sales price. Further within a market where there is a significant amount of
sales, as currently being witnessed in King County, the following year tax assessment will be
based upon the most recent sales data.
CONCLUSION
Based on the foregoing information, the subject’s current assessment is 3.5% of our estimate of
market value, indicating that it is likely to be reassessed after the sale with an increase in the
assessed value likely.
Exhibit 23
Market Analysis
22
Woodlands at Redondo Creek, Federal Way, Washington
Market Analysis
The market analysis is a process for examining demand for and supply of a property type and the
geographic market area for that property type. Since any property has the potential for multiple
uses, market analysis is necessary to determine which use is to be appraised, the timing of that
use, and the market participants for that use. The goal of market analysis is to identify the
relationship between demand and competitive supply in the subject property’s real estate market,
both now and in the future. The four factors that create value in real property are utility, desire
(i.e. demand), effective buying power, and lastly, scarcity (i.e. the interaction of supply and
demand). The interaction of the four factors is the foundation of real estate market analysis and
operates through the principles of supply and demand.
The Savings and Loan crisis of the late 1980s and the subprime crisis in the 2000s are examples
of markets driven by capital-fed growth; that is, the growth in supply was unrelated to actual
demand. Rather, in both cases, it was due to the abundance of investment funds, as the market-
driven reduction in underwriting criteria resulted in an increase in artificial demand. In both
cases, the increase in artificial demand was a temporal condition however, as a return to
ostensibly conservative underwriting standards caused a strong reduction in capital-fed growth.
With 2008 and 2009 firmly implanted on commercial real estate market participants minds,
growth in supply over the past decade tended to track reasonably well with underlying demand.
While some larger format retail centers have suffered in the “age of Amazon”, other sectors have
been supported by what had been a reasonably strong economy prior to a heighted awareness
of the outbreak of the Coronavirus (COVID-19). Awareness of the virus seemed to reach a
feverish pitch in March, when the fastest stock market correction on record was replaced by the
fastest bear market on record as many major equity markets breached the -20% decline
threshold during the second week of March. Whereas, it was just three weeks prior that, the North
American markets were at all-time highs.
The bull market in stocks that started in March 2009 has now ended. For years folks have warned
that the bull would end because of issues like lackluster earnings or sales growth, tepid economic
growth, or excessive central bank meddling, or even some big policy mistakes by governments –
none of those did it. Instead it was a virus. The market is attempting to quantify a pile of
unknowns. How will the virus pandemic play out in other countries such as the U.S. and Canada?
With more and more people working from home, cancelling travel and other plans, and stocking
up on toilet paper, how much will economic growth contract? It is safe to say we are looking at
growth dissipating and potentially contracting for a period.
It remains to be seen whether the fastest bear market in history leads to a recession in the U.S.;
and, while development activity continues as a result of projects in the pipeline prior to the
outbreak of the Coronavirus, the current lending environment is best characterized by uncertainty,
as lenders and market participants await greater clarity as to the fallout from the Coronavirus.
Exhibit 23
Market Analysis
23
Woodlands at Redondo Creek, Federal Way, Washington
Market participants report that a majority of industrial, office, and multifamily deals that had
been in the pipeline leading into March remain on track; however, retailers have pressed paused
on major expansions, leasing decisions, etc., as a majority of communities are seeing
restaurants, bars, and some retailers shutter for what is expected to be thirty to sixty days.
With the foregoing in mind, we have undertaken the following market analysis analyzing the four
factors that create value in real property which are utility, desire (i.e. demand), effective buying
power, and lastly, scarcity (i.e. the interaction of supply and demand). Primary data sources
utilized for this analysis include CBRE Econometric Advisors, the IBISWorld Industry Report,
CoStar, and other local MLS, among others, cited if necessary.
MACROECONOMIC ENVIRONMENT
U.S. Economy
Prior to the outbreak of the Coronavirus, national GDP growth continued to follow its trend and
slow in Q3 2019. Its annual rate of 1.9% was down slightly from Q2’s 2% and down significantly
from Q1’s 3.1%. Consumer spending growth remained high at 2.9%, which was led by gains in
durable goods such as autos and furnishings. However, after the impacts of the Coronavirus
economic crisis have been felt across the world, GDP growth for 2020 is projected by CBRE to
only reach 1.3% for the full year. Leading some of the decline will be consumer spending, though
it remains to be seen if the decline in spending is transitory or not.
Despite softened market conditions for much of Q2 2020, many market participants have
suggested pent-up consumer demand will translate into atypical expenditures in the third and
fourth quarters of this year. In the short-run, notable declines in travel, accommodations, and
related industries are expected, although longer lasting impacts on the cruise industry may
manifest. Softened economic conditions in the U.S. and other countries could lead to a global
recession, though few are categorizing the current environment a financial crisis. The consensus
starting to emerge is that this “feels more like 9/11, than 08-09”. Notably, outside of some major
metro markets, and despite the significant loss of life on 9/11, commercial property markets saw
very little downside pressure on pricing as a result of the terrorist attacks in 2001.
Even prior to the outbreak of the Coronavirus, recent production and survey data had indicated
an economic slowdown, likely related to the lingering impact of the trade war and an aging
economic expansion. As a result of the Coronavirus outbreak and economic impact and
weakness in APAC and EMEA however, the Federal Open Market Committee (FOMC) was
motivated to lower the federal funds rate to a target range between 0-0.25 percent on March
15th, after having reduced it 50 basis points on March 3rd. The March 15th cut is the largest
emergency reduction in the Fed’s more than 100-year history, and it is the first time the U.S.
central bank had reduced rates at an unscheduled meeting within 13 days of each other.
In addition to cutting rates, the Fed also introduced a massive program where it is expected to
buy Treasury debt and mortgage-backed securities at a pace of $500 billion and $200 billion
Exhibit 23
Market Analysis
24
Woodlands at Redondo Creek, Federal Way, Washington
respectively “over coming months.” The move is designed to cushion the U.S. economy even
more by ensuring money markets operate smoothly.
The outbreak of the Coronavirus along with subdued economic growth would have historically
pointed to higher inflation created by government stimulus and an extended period of low interest
rates. However, this inflation may show up again in financial assets and real estate pricing as
massive amounts of liquidity seek out yield, which may be mostly supportive of current real estate
pricing in general, though some sectors may feel a temporal impact from the Coronavirus.
Closer inspection of trends underlying the U.S. economy is helpful, particularly in light of
heighted volatility. Our inspection considers broader macroeconomic trends pre- and post-
Coronavirus and then focuses that inspection into an outlook for the remainder of the year.
Output Gap
Prior to the outbreak of the Coronavirus, the economy had been in its 10th year of expansion, as
the labor market was near full employment. The output gap had been running positive for six
consecutive quarters, prior to the outbreak of the Coronavirus. A positive output gap occurs when
actual output in an economy is greater than potential output. This occurs when economic growth
is above the long run trend (e.g. during strong economic times).
Consumer Sentiment
After a notable deterioration in January (2019) due to the partial government shutdown, and in
August due to trade tensions, U.S. consumer sentiment rebounded sharply in October and
November of 2019. Final figures for January and February 2020 are not yet available but are
likely to tell the story of a consumer with positive sentiment. More recently however, given a
higher degree of uncertainty – be it from monetary authorities, national security or questions
surrounding industry-specific proposals, or now from the Coronavirus – consumer sentiment is
expected to remain somewhat volatile in 2020.
Exhibit 23
Market Analysis
25
Woodlands at Redondo Creek, Federal Way, Washington
Labor Market
Unemployment at the start of 2020 was at its lowest rate since 1969, as the U.S. economy added
a moderate number of jobs, averaging 167,000 per month, in 2019. Wages climbed 3% over
the past year. The gain in wages was consistent with a tightening labor market and represented a
significant improvement over earlier periods of the expansion. However, it is still not historically
commensurate with the current level of unemployment.
February 2020’s jobs report showed the U.S. labor market was in an extremely strong position
heading into a period of heightened uncertainty over the Coronavirus outbreak. Strong gains
were widespread across sectors, with office-using jobs rising the most. Although economic growth
is expected to be impacted by the current drop in confidence relative to the Coronavirus, a
historically tight labor market should make companies hesitant to reduce payrolls. If the
Exhibit 23
Market Analysis
26
Woodlands at Redondo Creek, Federal Way, Washington
Coronavirus outbreak eases before the end of Q2, only a small non-recessionary impact on the
labor market is expected.
Recent uncertainty caused by the Coronavirus comes on the heels of what been an otherwise
strong labor market, as Nonfarm payrolls grew far more than expected in February as companies
continued to hire leading into a growing Coronavirus scare. The Labor Department reported
Friday March 6th that the U.S. economy added 273,000 new jobs during the month of February,
while the unemployment rate was 3.5%, matching its lowest level in more than 50 years. An
alternative measure of joblessness that counts those not looking for work and holding part-time
jobs for economic reasons edged higher to 7%. The January and February gains tied for best
month since May 2018.
Economists surveyed by Dow Jones had been looking for payroll growth of 175,000 and a 3.5%
jobless level. Average hourly earnings grew by 3% over the past year, in line with estimates, while
the average work week, considered a key measure of productivity, nudged up to 34.4 hours.
What is more, there was yet further good news for the jobs market, as the previous two months’
estimates were revised higher by a total of 85,000. December moved up from 147,000 to
184,000, while January went from 225,000 to 273,000. Those revisions brought the three-
month average up to a robust 243,000 while the average monthly gain in 2019 was 178,000.
In light of what is regarded as dishonesty from China as to the magnitude of the Coronavirus, as
some believe the outbreak in Wuhan could be traced to perhaps six months prior to December,
when China first reported the pandemic, many U.S. lawmakers are advocating for incentives to
relocation of manufacturing concerns back in the U.S. from China. China’s threat to withhold
critical medical supplies during the pandemic has heightened the awareness of the U.S.’ reliance
on the communist regime’s delivery of not only critical medical supplies, but technological
components and other parts important to a functioning economy.
While disruption in the labor market is likely in the near-term, displacement in the labor market
as a result of the Coronavirus may result in a sectoral shift, leaving less pressure on some
employment sectors as the unemployed seek different, perhaps better employment opportunities
in manufacturing, earning higher wages than what are typical of service sector employment
opportunities.
Credit Growth
At the end of 2019, credit data had showed a slight reversal in the recent trend of slowing
growth, while commercial and industrial/real estate loans continued to see a slide in their growth
rates. There had also been broad-based deterioration in the OECD’s business confidence and
leading indicator indices for the U.S. economy, owing to the uncertainties created by lingering
impacts of the trade tensions, which are expected be exacerbated by the Coronavirus pandemic
in the short-term, as well.
Exhibit 23
Market Analysis
27
Woodlands at Redondo Creek, Federal Way, Washington
10-YEAR TREASURIES EXPERIENCE A LOW
Some of the slowing credit growth had initially been caused by a tightening regime by the Federal
Reserve, who had hoped to reduce their balance sheet while the U.S. economy was on firmer
footing. This began to change, especially towards the end of last year however, as the Federal
Reserve cut the Fed Funds rate in July, in what they had called at the time a “mid-cycle
adjustment”. The mid-cycle adjustment lead to another adjustment, and yet another, and,
ultimately the Federal Reserve had cut rates three times throughout 2019 by the end of the year.
Whereas, monetary policy throughout part of 2019 could be described as tightening, the Federal
Reserve has moved swiftly beyond accommodative to outright stimulative. In a matter of weeks,
Global Central Banks have collectively turned from tightening or accommodative regimes to
stimulative ones. In the U.S., the Federal Reserve is now working feverishly to ease liquidity issues
in the funding markets.
As noted, prior to the outbreak of the Coronavirus, the Federal Reserve had cut interest rates
three times in 2019; however, since then, the Federal Open Market Committee (FOMC) was
motivated to lower the federal funds rate to a target range between 0-0.25 percent on March
15th, after having reduced it 50 basis points on March 3rd. The March 15th cut is the largest
emergency reduction in the Fed’s more than 100-year history, and it is the first time the U.S.
central bank had reduced rates at an unscheduled meeting within 13 days of each other.
As the Coronavirus fueled demand for U.S. debt, the 10-year Treasury note fell to an all-time low
on Thursday March 5th, as rekindled Coronavirus angst sparked fresh bids for U.S. debt at the
Exhibit 23
Market Analysis
28
Woodlands at Redondo Creek, Federal Way, Washington
expense of riskier assets like stocks. The yield on the benchmark 10-year sank to a new record low of
0.899%, below its former all-time low of 0.906%, hit only earlier in the week. The yield on U.S.
Treasuries, now 1.15%, has moved up while some investors begin deploying investment capital
into riskier assets; however, it is forecast to remain below 2% at least until H2 2021.
INFLATIONARY PRESSURES
Consumer prices were up just 1.8% in October 2019, up from 1.7% in September, with increases
in energy products, healthcare, food and a range of other goods. Core CPI (energy and food
components excluded) grew a touch faster, at 2.3%. Consumer prices in 2020, are expected to
fall due to the economic crisis triggered by the Coronavirus, as well as the monumental decline in
the price of crude oil.
However, in addition to rate cuts and various other measures, such as purchasing Treasury debt
and mortgage-backed securities at a pace of $500 billion and $200 billion respectively over the
coming months, fiscal policy is being coordinated around monetary policy, as lawmakers and the
FOMC hope that enough stimulus will prevent a severe recession in the U.S. in the wake of the
virus’ outbreak.
It remains to be seen whether economic impact from the Coronavirus’ government injections give
rise to inflationary pressures. With greater certainty around the virus’ impact, and, as the labor
market tightens, a further uptick in wages and a corresponding increase in consumer spending
could fan inflationary pressure, though the recent slippage in medium-and long-term inflation
expectations, and the steep decline in the U.S. 10-year might suggest otherwise.
Exhibit 23
Market Analysis
29
Woodlands at Redondo Creek, Federal Way, Washington
OUTLOOK FOR 2020
Against the backdrop of significant uncertainty, we have explored supply and demand
determinants, and how they relate to commercial real estate, as we forecast the trajectory of the
commercial real estate market through the end of the year. Useful in our exploration is a March
13th analysis published by Moody’s Analytics: Panic, Volatility, and CRE Financing & Transaction
Markets. Much of this section borrowers from the Moody’s analysis.
The rout in financial markets precipitated by the spread of the Coronavirus, though now afflicting
broad-based indices like the Dow Jones Industrial Average, first exerted its immediate effect on
specific companies and industries. Airlines (and as of the week of March 9th, energy companies)
experienced a severe pullback in business because of cancellations and various forms of delays.
Banks, therefore, became subject to higher demands for lines of credit, even as the most affected
institutions began implementing staggered schedules and selectively shedding jobs to control
costs.
When the Federal Reserve cut the overnight borrowing rate by 50 basis points on March 3rd,
deals previously predicated on a specific financing package became subject to renegotiation as
borrowers clamored for lower interest rates. The launch of additional liquidity measures such as
the announcement of repurchase financing on March 12th are likely to stimulate similar effects.
The immediate effects of volatility in interest rates are expected to be at least two-fold: first, a
pause for some transactions, as the near-term future of deals are reassessed. Second, a spike in
refinancing requests, given historically low interest rates.
Transaction Activity
Beyond implications of volatility in interest rates, are the implications of market participants’
behavior in light of heightened market uncertainty. Moody’s Analytics REIS has almost twenty
years of reliable data to assess how transaction volumes and prices have behaved relative to the
TSY10, which covers at least two business cycles – dating from the end of the recession in 2001
through the end of 2019.
The following graphic shows transaction volume for the apartment, office, retail, and industrial
sectors, the traditional core four property types in multifamily and commercial real estate
investing. Notably, there was an increase in overall transaction volume following the recession of
2001, which peaked in mid-2007 right before experiencing a massive decline driven by the
Great Recession from December 2007 to June 2009.
Exhibit 23
Market Analysis
30
Woodlands at Redondo Creek, Federal Way, Washington
Throughout the study period, the TSY10 had, in general, followed a declining trend. This was
consistent with an overall environment in the United States – and many parts of the world – where
interest rates as a whole had been falling. Over the same period, pricing trends were decidedly
more stable than transaction volume patterns.
The reason why pricing trends tend to be more stable than transaction volume patterns is
because of selection bias peculiar to an income-generating asset like commercial real estate.
During the 2008-2009 recession, transaction volumes fell by about 90%. That means deals that
were clearing likely involved a select few transactions where buyers and sellers actually agreed. In
commercial real estate, this tends to act as a floor on price declines, because sellers who are not
in distress can simply wait out the downturn and collect income on their real assets.
While transaction volumes reflect near-term sentiment, the consistent rise in commercial real
estate prices per square foot over the past two decades (with the exception of a small decline
during the Great Recession) reflects the long-term demand for income-generating assets.
Exhibit 23
Market Analysis
31
Woodlands at Redondo Creek, Federal Way, Washington
Although pricing tends to remain stable, transaction volume can be widely impacted by volatility.
According to Moody’s, standard levels of volatility do not appear to correlate with discernible
changes in transaction volume. Higher levels of volatility, however, represent a dynamic where
some market participants are hurt and others benefit, as market participants pause and reassess
deal viability, and transaction volume drops.
There are three specific periods of high volatility in the TSY10 that led to identifiable declines in
transaction volume. The chart below shows the spikes during the fourth quarter of 2008, the third
quarter of 2011, and the fourth quarter of 2016. On a relative scale basis, these spikes in
volatility represent an increase of anywhere from 2x to 4x the average level. Each period
represented unique events that lead to a decline in transaction volume: the late 2008 collapse of
Lehman Brothers; the crescendo of the Greek debt crisis and broader troubles in the European
Union in 2011; and, heightened uncertainty around what is already an uncertain political process
in the US with the 2016 election of Donald Trump.
As observed above, short-run economic disruption that leads to a spike in the TSY10 volatility
manifests in a decline in transaction volume, on the order of anywhere from 20 to 40%, but a collapse
in pricing does not necessarily ensue. Pricing is unlikely to show much of an effect if solely driven by
market volatility; however, if we enter into a recession, that is when price declines may become more
evident.
If the Great Recession is excluded from the study, however, note that the recovery in transaction
activity tends to be appreciable as well, if the disruption is truly limited to the short run. The US did not
enter into a recession in late 2011 because of the debt crisis in the European Union; neither did the
economy contract in 2017, after the initial period of uncertainty following the Presidential elections.
Exhibit 23
Market Analysis
32
Woodlands at Redondo Creek, Federal Way, Washington
Pricing
Because of the heightened uncertainty related to the Coronavirus, there is a range of possible
outcomes for the commercial real estate market through the end of the year. Those range of
outcomes reflect an optimistic scenario, a recessionary scenario, and, a doomsday scenario. The
optimistic scenario reflects the realization that the virus had spread throughout the population a
lot sooner than many had realized; alternatively, the virus burns out in warmer weather, and its
further spread across the global population is slowed by social distancing efforts.
In the optimistic scenario, broad economic activity returns to normal by mid-April, and a massive
bounce back in markets occurs, though, because of longer lasting dislocations in the travel and
accommodations sectors, the U.S. performs below its full potential. In hindsight, calls for a
recession were premature as economic contraction lasts barely six weeks, but does not lead to a
recession. If this scenario prevails, the recovery will look like what happened in early 2012 and
early 2017, when transaction volume ramped back up in the next one or two quarters as deals
put on hold are consummated.
Exhibit 23
Market Analysis
33
Woodlands at Redondo Creek, Federal Way, Washington
Setting aside a doomsday scenario, wherein, global behavior radically changes with hysteria, a
plausible scenario is that, the virus is warm weather resistant and continues to spread despite
efforts to “flatten the curve”. The death toll rises, and panic continues to freeze global activity, as
Global economies, the U.S.’ included goes into recession. Recovery ensues in late 2020 or 2021
when a credible treatment and vaccination protocol becomes widely available.
If the pandemic scenario prevails, then pricing will suffer until the economy begins recovering.
Transaction volume will begin creeping up once the treatment and vaccination protocol
reinvigorates market confidence, and the recovery in both transaction volume and pricing will
look more like late 2009 through early 2012 – though it might proceed at a faster pace if the
recession does not last as long as the last downturn (18 months). Quantifying the impact on real
estate values can perhaps best be done through inspection of overall capitalization rates –
historically as well as with an eye towards the future.
DIRECTION OF CAP RATES
As had historically been the case, a rising interest rate environment tends to upward pressure on
cap rates as the cost of capital rises. The Federal Reserve’s monetary policy throughout much of
the past decade however had been accommodative. It was until the past year that they shifted
from an accommodative policy stance to a tightening one, and the increase in interest rates was
mostly negated by decline in cap rate-to-interest rate spreads. As risk premiums are reassessed
on account of the Coronavirus, cap rates may see some upward pressure – particularly for retail-
related assets – despite lower interest rates though massive adjustments to overall capitalization
rates does not appear to be the market consensus.
Exhibit 23
Market Analysis
34
Woodlands at Redondo Creek, Federal Way, Washington
The foregoing exhibit, though from the third quarter of 2018, which represented a modeling of
cap rates based on solid GDP through 2019 with a mild recession in 2020, still seems relevant
despite the current feverish pitch associated with the Coronavirus. That is to say that, overall
capitalization rates may see an increase of 25 to 50, perhaps 75-100 basis points over the next
two to three years.
SPECIFIC REAL ESTATE IMPLICATIONS
Prior to the Coronavirus outbreak, lending markets had been deep and liquid. But as conditions
have worsened, spreads have widened, and some lenders and borrowers are pausing their
activity. These measures are helpful, but it is unlikely that real estate lending conditions will ease
until the extent of the virus outbreak is clearer and relatively under control.
The Coronavirus outbreak represents a serious shock to the U.S. economy as it affects both
supply and demand. There may be a sharp drop-in economic activity in Q2. As early as Q3
2020, as the virus begins to peak, transaction activity and values should be supported by broader
economic trends, as a recovery is expected to be underway by Q4, but the impact on the
economy and corresponding property values in some sectors will last well into 2021. As such, we
have explored practical implications for the subject’s relevant property type in the following.
• Residential: Overall, structural shifts in demand remain favorable for the sector. However,
issues of affordability and reduced household formation are likely to weigh on demand
in the next six months. During the near term, shortage of labor may continue to hamper
construction of new units and, in some cases, add costs to new development. However,
some of this may be mitigated by entrants to the construction labor force from the oil and
gas sector, which may lead to some downward pressure on construction wages. For
development sites with build-out timelines extending past 12 months, the negative
economic effects are likely to be mitigated.
TOTAL RETURNS
In 2019, cap rates remained mostly stable; some markets experienced a downward trend as the
Fed shifted to an accommodative monetary policy towards the end of the year however, while
virtually all markets continue to enjoy historically low levels. However, falling bond yields and
cyclical high corporate debt levels, as well as the outbreak of the Coronavirus, add complexity for
real estate investment, as investors are expected to reevaluate their portfolios’ return-to-risk.
Rising cap rates could temporarily halt asset value growth — until the economy gets back on
firmer footing – as negative dynamics in appreciation influence total returns lower, and in some
cases negative.
Provided the Coronavirus pandemic is short-lived, asset values could stabilize and return to
growth, perhaps in the third or fourth quarter of this year. Even with what may be a temporary
adjustment in value, commercial real estate is poised to generate income returns, making it an
attractive investment in the long run.
Exhibit 23
Market Analysis
35
Woodlands at Redondo Creek, Federal Way, Washington
Anticipated by investors, cap rates’ upward movement in the coming years may cause more
caution; however, commercial real estate has so far shown its resilience, and the sheer volume of
debt and equity capital that is likely to become available as greater clarity around the
Coronavirus situation unfolds should mitigate any longer term impact to property values. It is
noted in spite of investment opportunities in 2020 looking appealing, ownership, especially of
retail and hotels, may be destined for a rocky two to three years, however.
CONCLUSION
There is a high degree of risk right now in the market, which comes from the uncertainty created
by a global pandemic, making the economy more vulnerable to unexpected shocks, such as
geopolitical conflict, which could cause a broader disruption of commerce. Due to this level of
uncertainty, businesses are expected to generally remain defensive throughout 2020, particularly
for industries that are vulnerable to any policy changes after the 2020 election. However, the use
of monetary policy and upcoming fiscal policy along with other government policies and
stimulative measures should help to combat the negative impact on the economy. Additionally,
historically low interest rates are likely to have a stimulative effect on real estate, which could
mostly support transaction activity along with prices. What remains to be seen is whether an
economic slowdown becomes a recession, which tend to be accompanied by significant layoffs.
Unless market conditions deteriorate significantly from here, despite heightened current market
uncertainty, because of what is historically unprecedented monetary and fiscal stimulus, paired
with perhaps a “flattening of the curve”, a rebound in economic growth in the later part of 2020
remains the general consensus, which should translate into continued demand for real estate
thereby mostly supporting pricing.
Exhibit 23
Highest and Best Use
36
Woodlands at Redondo Creek, Federal Way, Washington
Highest and Best Use
In appraisal practice, the concept of highest and best use represents the premise upon which
value is based. The four criteria the highest and best use must meet are:
• legally permissible;
• physically possible;
• financially feasible; and
• maximally productive.
The highest and best use analysis of the subject is discussed below.
AS VACANT
Legal Permissibility
The legally permissible uses were discussed in the Site Analysis and Zoning Sections.
Physical Possibility
The subject is adequately served by utilities, and has an adequate shape and size, sufficient
access, etc., to be a separately developable site. There are no known physical reasons why the
subject site would not support any legally probable development (i.e. it appears adequate for
development).
Existing structures on similar sites provides additional evidence for the physical possibility of
development.
Financial Feasibility
Potential uses of the site include primarily detached single-family residences. The determination
of financial feasibility is dependent primarily on the relationship of supply and demand for the
legally probable land uses versus the cost to create the uses. With respect to the legal uses for
the subject site, the local housing market is generally stabilized, having reached a bit of a plateau
after years of increasing values, although it is generally in a growth stage. Development of new
residential properties has occurred in the recent past and continues to this day, including Retreat
Meadows by Lennar Homes, approximately 3.6 miles southwest of the subject in Federal Way,
Pacific Heights by DR Horton in Des Moines (1.3 miles north of the subject), Havenwood in Des
Moines (1.8 miles north), Huntington Woods (2.1 miles east in Auburn), and Pepper Hill (4.1
miles southeast in Auburn).
Maximum Productivity - Conclusion
The final test of highest and best use of the site as if vacant is that the use be maximally
productive, yielding the highest return to the land.
Based on the information presented above and upon information contained in the market and
neighborhood analysis, we conclude that the highest and best use of the subject as vacant would
be the development of a residential subdivision property. More specifically, the subject would be
Exhibit 23
Highest and Best Use
37
Woodlands at Redondo Creek, Federal Way, Washington
developed at a density of approximately 3.1 units per gross acre, which is typical of similar
projects in this market. The design would be characterized as single-family detached. Our
analysis of the subject and its respective market characteristics indicate the most likely buyer, as
vacant, would be an investor (land speculation) or a developer.
Exhibit 23
Land Value
38
Woodlands at Redondo Creek, Federal Way, Washington
Land Value
The following map and table summarize the comparable data used in the valuation of the subject
site. A detailed description of each transaction is included in the addenda.
Exhibit 23
Land Value
39
Woodlands at Redondo Creek, Federal Way, Washington
SUMMARY OF COMPARABLE SUBDIVISION LAND SALES
Adjusted Sale Size Size Proposed Price Price
No.Property Location Type Date Zoning Price 1 (Acres) (SF) Lots Per SF Per Lot
1 30231 20th Ave S
Federal Way, WA 98003
Sale May-19 RS 5.0 $2,256,000 21.90 953,963 68 $2.36 $33,176
2 1701 3rd Ave
Bremerton, WA 98312
Sale/
Allocated
Price
Apr-19 R-10 $3,094,776 35.10 1,528,956 110 $2.02 $28,134
3 9922 Burnham Dr NW
Gig Harbor, WA 98332
Sale Jun-18 R2
Residential
$3,500,000 32.00 1,393,920 80 $2.51 $43,750
4 NW Ridgetop Blvd
Silverdale, WA 98383
Sale Oct-17 UL, Urban Low
Residential
$1,900,000 21.65 943,074 103 $2.01 $18,447
5 1614 19th Ave SE
Puyallup, WA 98372
Listing Apr-20 R-10
Residential
$1,875,000 24.51 1,067,656 68 $1.76 $27,574
6 4437 Ridgemont Dr
Everett, WA 98203
Listing Apr-20 R-1
Residential
$1,250,000 10.04 437,342 77 $2.86 $16,339
Subj.30231 20th Ave S
Federal Way, WA 98003
------RS 5.0 ---21.90 953,963 68 ------
1 Adjusted sale price for cash equivalency and/or development costs (where applicable)
Compiled by CBRE
Transaction
The sales utilized represent the best data available for comparison with the subject and were
selected from the greater Puget Sound. These sales were chosen based upon location, zoning,
site size, and date of sale.
DISCUSSION/ANALYSIS OF LAND SALES
Land Sale One
This comparable represents the May 2019 sale of the subject, a raw 21.9-acre parcel located in
Federal Way, Washington. The land is primarily zoned for residential single-family development
and was purchased without any entitlements or preliminary plans. The site topography is rolling
with some steep slopes and wetlands, resulting in about 60% being buildable. It has frontage to
the east on 20th Ave, to the south on 304th Street, and to the west on Highway 99. It was sold
with a preliminary layout for 60 single-family homes on the site, but the buyer intends to build 68
homes, or 3.1 lots per acre overall and approximately 5.2 lots per net acre. The land was
marketed for just under nine months with a listing price of $2.5 million, before selling for
$2,256,000, or $2.36/sf and $37,600 per lot as proposed by seller and $33,176 per lot in the
buyer's plans. The sale price per estimated buildable square foot is $3.94.
Exhibit 23
Land Value
40
Woodlands at Redondo Creek, Federal Way, Washington
Land Sale Two
This comparable represents the April 2019 sale of a 35.10-acre development parcel (with a net
size of 23.0-acres) located at 1701 3rd Ave W just west of Bremerton, Washington. The parcel is
in unincorporated Kitsap County in an area of residential development and undeveloped State
Agency lands. The rolling parcel has residential R-10 zoning. There are some wetlands on the
site, which accounts for the size differences, but maximum development is based on the gross
size. The proposed Wright Creek is a 110-unit master planned community, but no entitlements
were in place at the time of purchase. We were unable to reach the parties involved and this
data was sourced from Kitsap County records and Costar. The sale price was allocated from a
multi-property sale as $3,094,776, or $2.02 per square foot based on the gross size, or
$28,134 per proposed lot.
Land Sale Three
This comparable represents the June 2018 sale of a raw 32-acre parcel located in Gig Harbor,
Washington. The land is zoned for residential single-family development and was purchased
without any entitlements but there was a preliminary plat plan on file from a 2016 sale that fell
through due to non-payment of a promissory note. The site's shape is irregular and its
topography is described as rolling. The sale involved 75% seller financing. The buyer intended
to build 80 single-family homes on the site, or 2.5/acre, and work has already begun. The land
sold for $3,500,000, or $2.51/sf and $43,750 per proposed lot.
Land Sale Four
This is the sale of a 21.65-acre development land site located along NW Ridgetop Boulevard in
Silverdale, Washington. The land sold in October 2017 for $1,900,000, or $2.01 per square
foot. The site's shape is irregular and its topography includes some steep slopes. The proposed
use was for 103 rental duplexes and single-family residences for seniors. The property is zoned
UL which is low density residential.
Land Sale Five
This comparable represents the current listing (as of April 2020) of five parcels located northeast
of Wildwood Park at 1614 19th Ave SE in Puyallup, Washington. The five parcels form an
irregularly-shaped cluster and total 24.51 acres of unimproved land that is zoned for residential
development (R-10). The forested site's shape is irregular and its topography is described as
rolling. The sellers are in the process of getting preliminary designs for a 68-lot cottage-style
planned residential development to add value. The current listing price is $1,875,000, or $1.76
per square foot, or $27,574 per proposed lot.
Land Sale Six
This comparable represents the current listing (as of April 2020) of three residential development
parcels in Everett, Washington. The site lies southwest of the CBD and north of the industrial
area centered around Boeing's massive aircraft factories, in a fairly quiet suburban part of the
Exhibit 23
Land Value
41
Woodlands at Redondo Creek, Federal Way, Washington
city. The three parcels form an irregular shape with minimal frontage on Ridgemont Drive,
although there may also be access from Olympia Blvd to the north over City-owned land. The
site is forested and irregular in shape, with rolling topography. The total acreage is 10.04 acres
and zoning allows for up to 77 residential lots. The listing price is $1,250,000, or $2.86 per
square foot and $13,339 per lot at maximum density.
SUMMARY OF ADJUSTMENTS
As commercial real estate markets often are imperfect in nature, the comparable sales are
analyzed based on qualitative comparison. The adjustments are subjective, but are based on
market evidence as well as the appraiser’s judgment, experience, and research. The adjustments
are not derived through quantitative analysis techniques, such as paired sale or regression
analysis, as the data does not exist in a manner that would provide reliable results. As such, the
adjustments made on a percentage basis are conveying the applied degree of subjective
adjustments and are not the result of quantitative analysis.
Property Rights Conveyed
Real estate carries with it a bundle of property rights, which can be transferred in whole or in
part. The most common property rights are the fee simple estate, leased fee interest, leasehold
interest, and partial interests. Selling prices may be impacted by the specific property rights
included in the transfer. Thus, any differences in property rights among the comparable sales
must be identified, and may require adjustment to account for differences in property rights
compared with the property rights appraised for the subject.
All of the sales reflect a fee simple interest, and therefore no adjustments are warranted.
Financing
Financing terms provided by the seller can affect the sale price if they differ from terms available
from third party lenders. The value estimate in this appraisal is based on an all cash payment to
the seller, with buyers typically using institutional financing based on an appropriate loan-to-
value ratio, debt-coverage ratio, and market interest rate. Seller financing may have an upward
influence on the sale price, if favorable terms are provided. Conversely, existing assumable
financing that has a higher than market interest rate and loan-to-value ratio tend to have a
downward influence on sale price.
Comparable 3 was purchased with seller financing and receives a downward adjustment
accordingly. The remaining comparables sold for cash or at market terms, and no adjustments
are given.
Conditions of Sale
Typically, adjustments for conditions of sale usually reflect the motivations of the buyer and the
seller in the transfer of real property. Examples of unusual motivations include related parties,
assemblage (plottage) value, forced sale, tax considerations, and lack of sufficient exposure on
Exhibit 23
Land Value
42
Woodlands at Redondo Creek, Federal Way, Washington
the market. These circumstances may result in the following: manipulation of the price by buyer
or seller, distress prices that do not reflect typical exposure or marketing time, or premiums (or
discounts) associated with unusual motivations.
None of the sold comparables had any special conditions affecting the sale price, and no
additional adjustments are given for the four closed sales. We note that Comparables 5 and 6
are listings that are likely to close for less than the asking prices and therefore downward
adjustments are warranted.
Market Conditions
This adjustment accounts for the change in market conditions as it relates to investor demand,
rental rates, and occupancy. The local residential development market is considered to be strong.
The comparables receive upward adjustments at a rate of 3.0% annually, based on their dates of
sale, ranging 3% for the May 2019 sales of Comparable to 8% for the October 2017 sale of
Comparable 4. The current listings are not adjusted.
Size
This adjustment accounts for the economy of scale attributed to size in relation to the allowable or
likely improvements to be built. Typically, properties with a smaller square footage have a much
wider investor pool as compared to a property with a greater square footage. Properties with
more potential investors typically have higher per square foot sales prices, although the total
dollar amount is much lower. In our analysis, we use the gross size of the subject and
comparables for two reasons: (1) we know the gross size of all properties and have less specific
information about any deductions that would reduce the net size (including at the subject, which
we have estimated); and (2) development capacity is generally determined by the gross size of a
site.
Comparables 1 and 2 are significantly larger than the subject and therefore receive upward
adjustments, while Comparable 6 is significantly smaller than the subject and receives a
downward adjustment. The remaining comparables are similar in size and receive no
adjustments.
Shape
The shape of a building site can benefit or adversely affect the final product, with square or
rectangular parcels generally preferred, although irregular parcels are not necessarily ill suited
for development so long as they are large enough for typical improvements and don’t have very
acute angles or unusable flag portions.
The subject’s site is moderately irregular with no hard to develop skinny sections or flag portions,
as are, for the most part, the comparables. Comparable 3 is nearly rectangular and receives a
downward adjustment while Comparables 4 and 5 are highly irregular and receive upward
adjustments. The remaining comparables receive no adjustments for shape.
Exhibit 23
Land Value
43
Woodlands at Redondo Creek, Federal Way, Washington
Corner
A corner location can greatly benefit many types of properties, but retail, multifamily, and
hospitality tend to benefit the most from the convenient exposure and access afforded by corner
positioning. A corner benefits a residential subdivision the most by providing access from
multiple roads. The subject site has a corner where 20th Ave and 304th Street meet, as well as
exposure on three roads. Its access is considered to be above average.
Comparables 1, 2, 3, and 4 have at least one corner and therefore receive no adjustments, while
Comparables 5 and 6 are somewhat isolated from roads and have no corners, indicating that
upward adjustments are warranted.
Frontage
As with corner positioning, greater frontage generally benefits a property because it allows for
greater visibility and potentially multiple curb cuts; for a subdivision, multiple access points can
improve interior traffic flow and ease ingress/egress at peak traffic times. The subject has very
good frontage and exposure along its three facing streets, although the topography abutting
Highway 99 would make access from that side difficult and expensive.
Comparables 4, 5, and 6 have inferior frontage to varying degrees and as a result they receive
upward adjustments. The remaining comparables have roughly similar frontage and receive no
adjustments.
Topography
This adjustment is based primarily on the extent to which topography impinges on construction
and eventual use of the subject site. Level sites are generally the most sought after—which is why
very few remain—but sloped sites can offer some benefits such as ease of excavating basements,
or an elevation that affords good views. This category also addresses wetlands, streams, or other
topographical features that would affect development and development time and costs. The
subject is approximately at street grade along the eastern edge, but the terrain is rolling with a
significant dip as one heads westward before rising up again near the western extremity. The
topographical survey indicates a maximum height differential of 82 feet on the subject site, and
at the lowest points there are wetlands. In addition, we note that the subject is heavily wooded,
which brings the added cost of clearing (one estimate was for $8,500 per acre) as well as the
benefit of timber sales (one offer was for $35,000).
The comparables are generally rolling in topography as well and are uniformly covered in trees
in addition, so despite the subject’s problematic topography, it is fairly typical of many subdivision
sites in the region. Comparable 4, located on the aptly named Ridgetop Blvd, has some steep
slope issues that exceed the subject’s slopes, and as a result receives an upward adjustment.
Location
This adjustment is based primarily on neighborhood characteristics, location desirability,
proximity/access to complimentary commercial development, and access to major roadways, all
Exhibit 23
Land Value
44
Woodlands at Redondo Creek, Federal Way, Washington
of which have an effect on the final selling prices of homes. All other elements of comparison
being equal, sites with superior locations will sell for a higher price per unit of comparison as
compared to sites within less desirable locations.
Comparables 2, 3, 4, and 5 are all slightly inferior to the subject to varying degrees and receive
upward adjustments. Comparable 6, within the city limits of Everett but in a quiet suburban
location that is convenient to both the CBD and Boeing, is superior and receives a downward
adjustment. Comparable 1 has a similar location and receives no adjustment.
Zoning/Density/Restrictions
The zoning/density adjustment accounts for the potential final build-out of a site, and generally
speaking, sites that allow for greater density, flexibility, or development intensity are considered
more valuable than similar sites with lower development potential. All comparables, like the
subject, are zoned and were purchased either exclusively or primarily for single-family detached
development. The densities vary somewhat, but are generally similar, and when available, we
use the buyers’ or sellers’ suggested density. Comparable 6 is the only one for which we have no
suggested density by the selling agent, and therefore assume the maximum allowable density.
Comparables 4 and 6 are both likely to be developed to higher densities than the subject and
receive downward adjustments accordingly. The remaining comparables are generally similar in
development density and therefore receive no adjustments.
Utilities
Convenient access to utilities such as electrical power, gas, water, and sewer is crucial to
subdivision development. Properties that have utilities on-site save a developer time and money
and therefore garner higher prices than raw land.
The subject and the comparables are all raw land with access to utilities in the adjacent streets,
and therefore no adjustments are warranted.
Highest and Best Use
The highest and best use of a development site has a great impact on its value, as well as
potential buyers which may specialize in one type of product or another. In the case of the
subject and the comparables presented, all have as their highest and best use, the development
of detached single-family housing. As a result, no adjustments are warranted.
TABLE OF ADJUSTMENTS
Based on our comparative analysis, the following chart summarizes the adjustments warranted to
each comparable.
Exhibit 23
Land Value
45
Woodlands at Redondo Creek, Federal Way, Washington
LAND SALES ADJUSTMENT GRID
Comparable Number 1 2 3 4 5 6 Subject
Transaction Type Sale Sale Sale Sale Listing Listing ---
Transaction Date May-19 Apr-19 Jun-18 Oct-17 Apr-20 Apr-20 ---
Zoning RS 5.0 R-10 R-2 UL R-10 R-1 RS 5.0
Adjusted Sale Price 1 $2,256,000 $3,094,776 $3,500,000 $1,900,000 $1,875,000 $1,250,000 ---
Size (Gross Acres)21.90 35.10 32.00 21.65 24.51 10.04 21.90
Size (SF)953,963 1,528,956 1,393,920 943,074 1,067,656 437,342 953,963
Price Per SF $2.36 $2.02 $2.51 $2.01 $1.76 $2.86 ---
Price ($ PSF)$2.36 $2.02 $2.51 $2.01 $1.76 $2.86
Property Rts. Conveyed 0%0%0%0%0%0%
Financing Terms 1 0%0%-10%0%0%0%
Conditions of Sale 0%0%0%0%-5%-5%
Market Conditions (Time)3%3%5%7%0%0%
Subtotal $2.44 $2.08 $2.37 $2.15 $1.67 $2.72
Size 0%10%10%0%0%-10%
Shape 0%0%-5%5%5%0%
Corner 0%0%0%0%5%5%
Frontage 0%0%0%5%5%10%
Topography 0%0%0%5%0%0%
Location 0%10%5%5%10%-5%
Zoning/Density 0%0%0%-5%0%-10%
Utilities 0%0%0%0%0%0%
Highest & Best Use 0%0%0%0%0%0%
Total Other Adjustments 0%20%10%15%25%-10%
Value Indication $2.44 $2.50 $2.61 $2.47 $2.09 $2.45
Absolute Adjustment 3%23%35%32%30%45%
1 Adjusted sale price for cash equivalency and/or development costs (where applicable)
Compiled by CBRE
ADDITIONAL MARKET SALES NEARBY
There is one more recent subdivision land sale in Federal Way that was not deemed
appropriately comparable because of its zoning, but it bears mentioning. In December 2019, a
10.18-acre site located at 1802 S 333rd Street in Federal Way sold for $3,500,000, or $7.89 per
square foot. Benefitting from greater density allowed in the multifamily RM 3600 zoning, the
buyer plans to build 96 attached apartment or condominium units on 10.18 acres at a density of
9.2 units per gross acre, nearly three times the density of the subject’s 3.1 lots per gross acre.
The zoning/density adjustment alone would be larger than any of the absolute adjustment factors
above, making that comparable less reliable. There would also be adjustments for size and
highest and best use, resulting in an extremely high level of adjustments. As a result, we opted to
not include it in our analysis matrix, relying on just comparables with similar proposed densities
and either exclusively or primarily single-family expectations.
Exhibit 23
Land Value
46
Woodlands at Redondo Creek, Federal Way, Washington
PRICE PER LOT SUMMARY
An additional measure of a site’s market value often discussed and used when zoning restricts
density is price per lot. While generally it refers to the maximum allowable number of lots
permitted by zoning, there are often mitigating factors that affect the maximum, including
minimum lot sizes and topographical challenges. As a result, we have used the buyers’ or sellers’
proposed lot count where available, relying on the maximum density when a proposed unit count
is not available. As a result, the comparables ranged from $16,339 per lot to $43,750 per lot,
with an average of $27,903 per lot. Comparable 4 plans include a mix of duplexes and SFRs,
which artificially increases unit count more than just detached SFRs would, explaining it’s low per
lot price. Comparable 6 is the clear outlier in this group, and the only comparable for which we
used the maximum allowable density. The subject’s value below corresponds to $35,294 per lot,
which falls just above the middle portion of the range of the comparables.
SALE PRICE PER SQUARE FOOT CONCLUSION
The unadjusted per square foot price range was from $1.76 to $2.86, with an average of
$2.25/sf. After adjustments, the range narrowed to $2.09 to $2.61, averaging $2.43/sf.
With the exception of Comparable 1, which is the subject, all comparables received multiple
adjustments. Comparables 1, 3, and 6 have the lowest net adjustments, with adjusted prices of
$2.44, $2.61, and $2.45/sf, averaging $2.50/sf. These adjusted comparables represent a
reasonable range for the subject. The following table presents the valuation conclusion:
CONCLUDED LAND VALUE
$ PSF Subject SF Total
$2.44 x 953,963 =$2,323,680
$2.61 x 953,963 =$2,489,028
Indicated Value:$2,400,000
(Rounded $ PSF)$2.52
Compiled by CBRE
MARKET VALUE CONCLUSION
Appraisal Premise Interest Appraised Date of Value Value Conclusion
As Is Fee Simple Estate April 2, 2020 $2,400,000
Compiled by CBRE
Exhibit 23
Assumptions and Limiting Conditions
47
Woodlands at Redondo Creek, Federal Way, Washington
Assumptions and Limiting Conditions
1. CBRE, Inc. through its appraiser (collectively, “CBRE”) has inspected through reasonable observation the subject
property. However, it is not possible or reasonably practicable to personally inspect conditions beneath the soil
and the entire interior and exterior of the improvements on the subject property. Therefore, no representation is
made as to such matters.
2. The report, including its conclusions and any portion of such report (the “Report”), is as of the date set forth in the
letter of transmittal and based upon the information, market, economic, and property conditions and projected
levels of operation existing as of such date. The dollar amount of any conclusion as to value in the Report is based
upon the purchasing power of the U.S. Dollar on such date. The Report is subject to change as a result of
fluctuations in any of the foregoing. CBRE has no obligation to revise the Report to reflect any such fluctuations or
other events or conditions which occur subsequent to such date.
3. Unless otherwise expressly noted in the Report, CBRE has assumed that:
(i) Title to the subject property is clear and marketable and that there are no recorded or unrecorded matters or
exceptions to title that would adversely affect marketability or value. CBRE has not examined title records
(including without limitation liens, encumbrances, easements, deed restrictions, and other conditions that may
affect the title or use of the subject property) and makes no representations regarding title or its limitations on
the use of the subject property. Insurance against financial loss that may arise out of defects in title should be
sought from a qualified title insurance company.
(ii) Existing improvements on the subject property conform to applicable local, state, and federal building codes
and ordinances, are structurally sound and seismically safe, and have been built and repaired in a workmanlike
manner according to standard practices; all building systems (mechanical/electrical, HVAC, elevator, plumbing,
etc.) are in good working order with no major deferred maintenance or repair required; and the roof and
exterior are in good condition and free from intrusion by the elements. CBRE has not retained independent
structural, mechanical, electrical, or civil engineers in connection with this appraisal and, therefore, makes no
representations relative to the condition of improvements. CBRE appraisers are not engineers and are not
qualified to judge matters of an engineering nature, and furthermore structural problems or building system
problems may not be visible. It is expressly assumed that any purchaser would, as a precondition to closing a
sale, obtain a satisfactory engineering report relative to the structural integrity of the property and the integrity
of building systems.
(iii) Any proposed improvements, on or off-site, as well as any alterations or repairs considered will be completed in
a workmanlike manner according to standard practices.
(iv) Hazardous materials are not present on the subject property. CBRE is not qualified to detect such substances.
The presence of substances such as asbestos, urea formaldehyde foam insulation, contaminated groundwater,
mold, or other potentially hazardous materials may affect the value of the property.
(v) No mineral deposit or subsurface rights of value exist with respect to the subject property, whether gas, liquid,
or solid, and no air or development rights of value may be transferred. CBRE has not considered any rights
associated with extraction or exploration of any resources, unless otherwise expressly noted in the Report.
(vi) There are no contemplated public initiatives, governmental development controls, rent controls, or changes in
the present zoning ordinances or regulations governing use, density, or shape that would significantly affect the
value of the subject property.
(vii) All required licenses, certificates of occupancy, consents, or other legislative or administrative authority from any
local, state, nor national government or private entity or organization have been or can be readily obtained or
renewed for any use on which the Report is based.
(viii) The subject property is managed and operated in a prudent and competent manner, neither inefficiently or
super-efficiently.
(ix) The subject property and its use, management, and operation are in full compliance with all applicable federal,
state, and local regulations, laws, and restrictions, including without limitation environmental laws, seismic
hazards, flight patterns, decibel levels/noise envelopes, fire hazards, hillside ordinances, density, allowable
uses, building codes, permits, and licenses.
(x) The subject property is in full compliance with the Americans with Disabilities Act (ADA). CBRE is not qualified
to assess the subject property’s compliance with the ADA, notwithstanding any discussion of possible readily
achievable barrier removal construction items in the Report.
Exhibit 23
Assumptions and Limiting Conditions
48
Woodlands at Redondo Creek, Federal Way, Washington
(xi) All information regarding the areas and dimensions of the subject property furnished to CBRE are correct, and
no encroachments exist. CBRE has neither undertaken any survey of the boundaries of the subject property nor
reviewed or confirmed the accuracy of any legal description of the subject property.
Unless otherwise expressly noted in the Report, no issues regarding the foregoing were brought to CBRE’s
attention, and CBRE has no knowledge of any such facts affecting the subject property. If any information
inconsistent with any of the foregoing assumptions is discovered, such information could have a substantial
negative impact on the Report. Accordingly, if any such information is subsequently made known to CBRE, CBRE
reserves the right to amend the Report, which may include the conclusions of the Report. CBRE assumes no
responsibility for any conditions regarding the foregoing, or for any expertise or knowledge required to discover
them. Any user of the Report is urged to retain an expert in the applicable field(s) for information regarding such
conditions.
4. CBRE has assumed that all documents, data and information furnished by or behalf of the client, property owner,
or owner’s representative are accurate and correct, unless otherwise expressly noted in the Report. Such data and
information include, without limitation, numerical street addresses, lot and block numbers, Assessor’s Parcel
Numbers, land dimensions, square footage area of the land, dimensions of the improvements, gross building
areas, net rentable areas, usable areas, unit count, room count, rent schedules, income data, historical operating
expenses, budgets, and related data. Any error in any of the above could have a substantial impact on the Report.
Accordingly, if any such errors are subsequently made known to CBRE, CBRE reserves the right to amend the
Report, which may include the conclusions of the Report. The client and intended user should carefully review all
assumptions, data, relevant calculations, and conclusions of the Report and should immediately notify CBRE of any
questions or errors within 30 days after the date of delivery of the Report.
5. CBRE assumes no responsibility (including any obligation to procure the same) for any documents, data or
information not provided to CBRE, including without limitation any termite inspection, survey or occupancy permit.
6. All furnishings, equipment and business operations have been disregarded with only real property being
considered in the Report, except as otherwise expressly stated and typically considered part of real property.
7. Any cash flows included in the analysis are forecasts of estimated future operating characteristics based upon the
information and assumptions contained within the Report. Any projections of income, expenses and economic
conditions utilized in the Report, including such cash flows, should be considered as only estimates of the
expectations of future income and expenses as of the date of the Report and not predictions of the future. Actual
results are affected by a number of factors outside the control of CBRE, including without limitation fluctuating
economic, market, and property conditions. Actual results may ultimately differ from these projections, and CBRE
does not warrant any such projections.
8. The Report contains professional opinions and is expressly not intended to serve as any warranty, assurance or
guarantee of any particular value of the subject property. Other appraisers may reach different conclusions as to
the value of the subject property. Furthermore, market value is highly related to exposure time, promotion effort,
terms, motivation, and conclusions surrounding the offering of the subject property. The Report is for the sole
purpose of providing the intended user with CBRE’s independent professional opinion of the value of the subject
property as of the date of the Report. Accordingly, CBRE shall not be liable for any losses that arise from any
investment or lending decisions based upon the Report that the client, intended user, or any buyer, seller, investor,
or lending institution may undertake related to the subject property, and CBRE has not been compensated to
assume any of these risks. Nothing contained in the Report shall be construed as any direct or indirect
recommendation of CBRE to buy, sell, hold, or finance the subject property.
9. No opinion is expressed on matters which may require legal expertise or specialized investigation or knowledge
beyond that customarily employed by real estate appraisers. Any user of the Report is advised to retain experts in
areas that fall outside the scope of the real estate appraisal profession for such matters.
10. CBRE assumes no responsibility for any costs or consequences arising due to the need, or the lack of need, for
flood hazard insurance. An agent for the Federal Flood Insurance Program should be contacted to determine the
actual need for Flood Hazard Insurance.
11. Acceptance or use of the Report constitutes full acceptance of these Assumptions and Limiting Conditions and any
special assumptions set forth in the Report. It is the responsibility of the user of the Report to read in full,
comprehend and thus become aware of all such assumptions and limiting conditions. CBRE assumes no
responsibility for any situation arising out of the user’s failure to become familiar with and understand the same.
12. The Report applies to the property as a whole only, and any pro ration or division of the title into fractional
interests will invalidate such conclusions, unless the Report expressly assumes such pro ration or division of
interests.
Exhibit 23
Assumptions and Limiting Conditions
49
Woodlands at Redondo Creek, Federal Way, Washington
13. The allocations of the total value estimate in the Report between land and improvements apply only to the existing
use of the subject property. The allocations of values for each of the land and improvements are not intended to
be used with any other property or appraisal and are not valid for any such use.
14. The maps, plats, sketches, graphs, photographs, and exhibits included in this Report are for illustration purposes
only and shall be utilized only to assist in visualizing matters discussed in the Report. No such items shall be
removed, reproduced, or used apart from the Report.
15. The Report shall not be duplicated or provided to any unintended users in whole or in part without the written
consent of CBRE, which consent CBRE may withhold in its sole discretion. Exempt from this restriction is
duplication for the internal use of the intended user and its attorneys, accountants, or advisors for the sole benefit
of the intended user. Also exempt from this restriction is transmission of the Report pursuant to any requirement of
any court, governmental authority, or regulatory agency having jurisdiction over the intended user, provided that
the Report and its contents shall not be published, in whole or in part, in any public document without the written
consent of CBRE, which consent CBRE may withhold in its sole discretion. Finally, the Report shall not be made
available to the public or otherwise used in any offering of the property or any security, as defined by applicable
law. Any unintended user who may possess the Report is advised that it shall not rely upon the Report or its
conclusions and that it should rely on its own appraisers, advisors and other consultants for any decision in
connection with the subject property. CBRE shall have no liability or responsibility to any such unintended user.
Exhibit 23
Addenda
ADDENDA
Exhibit 23
Addenda
Addendum A
LAND SALE DATA SHEETS
Exhibit 23
Sale Land - Residential Subdivision No. 1
Property Name 20th Ave Subdivision Land
Address 30231 20th Ave S
Federal Way, WA 98003
County King
Govt./Tax ID 042104-9012
Land Area Net N/A/ N/A
Land Area Gross 21.900 ac/ 953,963 sf
Site Development Status Raw
Utilities All In Street
Maximum FAR N/A
Min Land Bldg Ratio N/A
Shape Irregular
Topography Rolling
Flood Zone Class Zone X (Unshaded)
Flood Panel No./ Date N/A
Zoning RS 5.0
Entitlement Status None
Transaction Details
Type Sale Primary Verification Buyer, Costar
Interest Transferred Fee Simple Transaction Date 05/20/2019
Condition of Sale None Recording Date 05/20/2019
Recorded Buyer RMJ Holdings LLC Sale Price $2,256,000
Buyer Type Developer Financing All Cash
Recorded Seller Tatiana Spoerry & Olga Danilchik Cash Equivalent $2,256,000
Marketing Time 9 Month(s)Capital Adjustment $0
Listing Broker Chad Martini, Paragon Advisors 206-812-
9137
Adjusted Price $2,256,000
Doc #201905200974 Adjusted Price / ac and
/ sf
N/A / N/A
Adjusted Price/ FAR N/A
Adjusted Price/ Unit N/A
Comments
This comparable represents the May 2019 sale of a raw 21.9-acre parcel located in Federal Way, Washington. The land is zoned for residential
single-family development and was purchased without any entitlements or preliminary plans. The site is rolling with some steep slopes and
wetlands, resulting in about 60% being buildable. It has frontage to the east on 20th Ave, to the south on 304th Street, and to the west on
Highway 99. It was sold with a preliminary layout for 60 single-family homes on the site, but the buyer intends to build 68 homes, or 3.1 lots per
acre overall and approximately 5.2 lots per net acre. The land was marketed for just under nine months with a listing price of $2.5 million, before
selling for $2,256,000, or $2.36/sf and $37,600 per lot as proposed by seller and $33,176 per lot in the buyer's plans. The sale price per
estimated buildable square foot is $3.94.
Exhibit 23
Sale/Allocated Price Land - Residential Subdivision No. 2
Property Name Wright Creek Prelim. Plat
Address 1701 3rd Ave
Bremerton, WA 98312
County Kitsap
Govt./Tax ID 282401-1-086-2000
Land Area Net 23.000 ac/ 1,001,880 sf
Land Area Gross 35.100 ac/ 1,528,956 sf
Site Development Status Raw
Utilities In Street
Maximum FAR N/A
Min Land Bldg Ratio N/A
Shape Irregular
Topography Rolling
Flood Zone Class N/A
Flood Panel No./ Date N/A
Zoning R-10
Entitlement Status None
Transaction Details
Type Sale/Allocated Price Primary Verification Costar, public records
Interest Transferred Fee Simple Transaction Date 04/02/2019
Condition of Sale Part of master-planned Dev.Recording Date 04/02/2019
Recorded Buyer WC Dev 360 LLC Sale Price $3,094,776
Buyer Type Developer Financing Not Available
Recorded Seller JWJ Group, LLC Cash Equivalent $3,094,776
Marketing Time N/A Capital Adjustment $0
Listing Broker None Adjusted Price $3,094,776
Doc #201904020197 Adjusted Price / ac and
/ sf
$134,555 / $3.09
Adjusted Price/ FAR N/A
Adjusted Price/ Unit N/A
Comments
This comparable represents the April 2019 sale of a 35.10-acre (gross) and 23.0-acre (net) development parcel located at 1701 3rd Ave W just
west of Bremerton, Washington. The parcel is in unincorporated Kitsap County in an area of residential development and undeveloped State
Agency lands. The parcel has residential R-10 zoning. There are some wetlands on the site, which accounts for the size differences, but
development is based on the gross size. The proposed Wright Creek is a 110-unit master planned community, but no entitlements were in place
at the time of purchase. We were unable to reach the parties involved and this data was sourced from Kitsap County records and Costar. The
sale price was allocated from a multi-property sale as $3,094,776, or $2.02 per square foot, or $28,134 per proposed lot.
Exhibit 23
Sale Land - Residential Subdivision No. 3
Property Name North Creek at Gig Hbr
Address 9922 Burnham Dr NW
Gig Harbor, WA 98332
County Pierce
Govt./Tax ID 022231-3062
Land Area Net 32.000 ac/ 1,393,920 sf
Land Area Gross N/A/ N/A
Site Development Status Raw
Utilities All available in street
Maximum FAR N/A
Min Land Bldg Ratio N/A
Shape Irregular
Topography Rolling
Flood Zone Class Zone X (Unshaded)
Flood Panel No./ Date N/A
Zoning R2 Residential
Entitlement Status Tentative Tract
Transaction Details
Type Sale Primary Verification Seller, Costar
Interest Transferred Fee Simple Transaction Date 06/22/2018
Condition of Sale 75% seller financing Recording Date 06/22/2018
Recorded Buyer North Creek Estates LLC Sale Price $3,500,000
Buyer Type Developer Financing Other(See Comments)
Recorded Seller North Creek Gig Harbor LLC Cash Equivalent $3,500,000
Marketing Time 10 Month(s)Capital Adjustment $0
Listing Broker None Adjusted Price $3,500,000
Doc #201806220670 Adjusted Price / ac and
/ sf
$109,375 / $2.51
Adjusted Price/ FAR N/A
Adjusted Price/ Unit N/A
Comments
This comparable represents the June 2018 sale of a raw 32-acre parcel located in Gig Harbor, Washington. The land is zoned for residential
single-family development and was purchased without any entitlements but there was a preliminary plat plan on file from a 2016 sale that fell
through due to non-payment of a promissory note. The buyer intends to build 80 single-family homes on the site, or 2.5/acre and work has
already begun . The land sold for $3,500,000, or $2.51/sf and $43,750 per proposed lot.
Exhibit 23
Sale Land - Single Unit Residential No. 4
Property Name NW Ridgetop Blvd
Address NW Ridgetop Blvd
Silverdale, WA 98383
County Kitsap
Govt./Tax ID N/A
Land Area Net 21.650 ac/ 943,074 sf
Land Area Gross N/A/ N/A
Site Development Status Raw
Utilities N/A
Maximum FAR N/A
Min Land Bldg Ratio N/A
Shape Irregular
Topography Steep Slope
Flood Zone Class N/A
Flood Panel No./ Date N/A
Zoning UL, Urban Low Residential
Entitlement Status None
Transaction Details
Type Sale Primary Verification CoStar, Listing Broker, and Public
Records
Interest Transferred Fee Simple Transaction Date 10/30/2017
Condition of Sale None Recording Date N/A
Recorded Buyer Cottages on the Ridge LLC Sale Price $1,900,000
Buyer Type N/A Financing Market Rate Financing
Recorded Seller Ridgetop Homes LLC Cash Equivalent $1,900,000
Marketing Time N/A Capital Adjustment $0
Listing Broker Rick Cadwell - 206.682.0666 Adjusted Price $1,900,000
Doc #201710300153 Adjusted Price / ac and
/ sf
$87,760 / $2.01
Adjusted Price/ FAR N/A
Adjusted Price/ Unit $18,447
Comments
This is the sale of a 21.65-acre land property located along NW Ridgetop Boulevard in Silverdale, Washington. The land sold in October 2017 for
$1,900,000. The proposed use was for 103 rental duplexes and single-family residences for seniors. The property is zoned UL which is low density
residential.
Exhibit 23
Available/Listing Land - Residential Subdivision No. 5
Property Name 1614 19th Ave SE
Address 1614 19th Ave SE
Puyallup, WA 98372
County Pierce
Govt./Tax ID Multiple
Land Area Net 24.510 ac/ 1,067,656 sf
Land Area Gross N/A/ N/A
Site Development Status Raw
Utilities In Street
Maximum FAR N/A
Min Land Bldg Ratio N/A
Shape Irregular
Topography Rolling
Flood Zone Class N/A
Flood Panel No./ Date N/A
Zoning R-10, Residential
Entitlement Status None
Transaction Details
Type Available/Listing Primary Verification Brokers, Costar
Interest Transferred Fee Simple Transaction Date 04/01/2020
Condition of Sale Parcels can be sold separately Recording Date N/A
Recorded Buyer n/a Sale Price $1,875,000
Buyer Type N/A Financing Not Available
Recorded Seller Multicare Health System Cash Equivalent $1,875,000
Marketing Time N/A Capital Adjustment $0
Listing Broker Don Moody, CBRE, 253-569-0045 Adjusted Price $1,875,000
Doc #Listing Adjusted Price / ac and
/ sf
$76,499 / $1.76
Adjusted Price/ FAR N/A
Adjusted Price/ Unit N/A
Comments
This comparable represents the current listing (as of April 2020) of five parcels located northeast of Wildwood Park in Puyallup, Washington. The
five parcels form an irregularly-shaped cluster and total 24.51 acres on unimproved land that is zoned for residential development (R-10). The
sellers are in the process of getting preliminary designs for a 68-lot cottage-style planned residential development to add value. The current
listing price is $1,875,000, or $1.76 per square foot, or $27,574 per proposed lot.
Exhibit 23
Available/Listing Land - Residential Subdivision No. 6
Property Name Everett Residential Acreage
Address 4437 Ridgemont Dr
Everett, WA 98203
County Snohomish
Govt./Tax ID Multiple
Land Area Net 10.040 ac/ 437,342 sf
Land Area Gross N/A/ N/A
Site Development Status Raw
Utilities In Street
Maximum FAR N/A
Min Land Bldg Ratio N/A
Shape Irregular
Topography Rolling
Flood Zone Class N/A
Flood Panel No./ Date N/A
Zoning R-1, Residential
Entitlement Status None
Transaction Details
Type Available/Listing Primary Verification Brokers, Costar
Interest Transferred Fee Simple Transaction Date 04/01/2020
Condition of Sale None Recording Date N/A
Recorded Buyer N/A Sale Price $1,250,000
Buyer Type N/A Financing Not Available
Recorded Seller Cadman Materials, Inc.Cash Equivalent $1,250,000
Marketing Time N/A Capital Adjustment $0
Listing Broker Teresa Patton, CBRE, 253-596-0043 Adjusted Price $1,250,000
Doc #Listing Adjusted Price / ac and
/ sf
$124,502 / $2.86
Adjusted Price/ FAR N/A
Adjusted Price/ Unit N/A
Comments
This comparable represents the current listing (as of April 2020) of three residential development parcels in Everett, Washington. The site lies
southwest of the CBD and north of the industrial area centered around Boeing's massive aircraft factories, in a fairly quiet suburban part of the
city. The three parcels form an irregular shape with minimal frontage on Ridgemont Drive, although there may also be access from Olympia
Blvd to the north over City-owned land. The total acreage is 10.04 acres and zoning allows for up to 77 residential lots. The listing price is
$1,250,000, or $2.86 per square foot and $16,339 per lot at maximum density.
Exhibit 23
Addenda
Addendum B
TITLE REPORT/LEGAL DESCRIPTION
Exhibit 23
Form 5003353 (7-1-14) Page 1 of 10 Guarantee Number: 3324793 CLTA #14 Subdivision Guarantee (4-10-75)
Washington
First American Title Insurance Company
920 5th Avenue, Suite 1250
Seattle, WA 98104
September 26, 2019
Dmitriy Mayzlin
ACH Homes, LLC
9675 SE 36th Street, Suite 105
Mercer Island, WA 98040
Phone: (206)588-1147x114
Fax: (206)588-0954
Title Officer: Kristi Stevenson
Phone: (206)615-3206
Fax No.: (866)859-0429
E-Mail: teamkristi@firstam.com
Order Number: 3324793
Escrow Number: 3324793
Buyer:
Owner:
Property: Vacant Land
Federal Way, Washington 98003
Attached please find the following item(s):
Guarantee
Thank You for your confidence and support. We at First American Title Insurance Company maintain the
fundamental principle:
Customer First!
Exhibit 23
Form 5003353 (7-1-14) Page 2 of 10 Guarantee Number: 3324793 CLTA #14 Subdivision Guarantee (4-10-75)
Washington
Guarantee
Subdivision Guarantee
ISSUED BY
First American Title Insurance Company
GUARANTEE NUMBER
5003353-3324793
SUBJECT TO THE EXCLUSIONS FROM COVERAGE, THE LIMITS OF LIABILITY AND THE CONDITIONS AND STIPULATIONS OF THIS
GUARANTEE,
FIRST AMERICAN TITLE INSURANCE COMPANY
a Nebraska corporation, herein called the Company
GUARANTEES
ACH Homes, LLC
the Assured named in Schedule A against actual monetary loss or damage not exceeding the liability stated in Schedule A, which the Assured shall sustain by reason of any incorrectness in the assurances set forth in Schedule A.
This jacket was created electronically and constitutes an original document
Exhibit 23
Form 5003353 (7-1-14) Page 3 of 10 Guarantee Number: 3324793 CLTA #14 Subdivision Guarantee (4-10-75)
Washington
SCHEDULE OF EXCLUSIONS FROM COVERAGE OF THIS GUARANTEE
1. Except to the extent that specific assurances are provided in
Schedule A of this Guarantee, the Company assumes no
liability for loss or damage by reason of the following:
(a) Defects, liens, encumbrances, adverse claims or other
matters against the title, whether or not shown by the
public records.
(b) (1) Taxes or assessments of any taxing authority that
levies taxes or assessments on real property; or, (2)
Proceedings by a public agency which may result in taxes
or assessments, or notices of such proceedings, whether
or not the matters excluded under (1) or (2) are shown
by the records of the taxing authority or by the public
records.
(c) (1) Unpatented mining claims; (2) reservations or
exceptions in patents or in Acts authorizing the issuance
thereof; (3) water rights, claims or title to water, whether
or not the matters excluded under (1), (2) or (3) are
shown by the public records.
2. Notwithstanding any specific assurances which are provided in
Schedule A of this Guarantee, the Company assumes no
liability for loss or damage by reason of the following:
(a) Defects, liens, encumbrances, adverse claims or other matters
affecting the title to any property beyond the lines of the land
expressly described in the description set forth in Schedule (A),
(C) or in Part 2 of this Guarantee, or title to streets, roads,
avenues, lanes, ways or waterways to which such land abuts,
or the right to maintain therein vaults, tunnels, ramps or any
structure or improvements; or any rights or easements therein,
unless such property, rights or easements are expressly and
specifically set forth in said description.
(b) Defects, liens, encumbrances, adverse claims or other matters,
whether or not shown by the public records; (1) which are
created, suffered, assumed or agreed to by one or more of the
Assureds; (2) which result in no loss to the Assured; or (3)
which do not result in the invalidity or potential invalidity of any
judicial or non-judicial proceeding which is within the scope
and purpose of the assurances provided.
(c) The identity of any party shown or referred to in Schedule A.
(d) The validity, legal effect or priority of any matter shown or
referred to in this Guarantee.
GUARANTEE CONDITIONS AND STIPULATIONS
1. Definition of Terms.
The following terms when used in the Guarantee mean:
(a) the "Assured": the party or parties named as the
Assured in this Guarantee, or on a supplemental writing
executed by the Company.
(b) "land": the land described or referred to in Schedule
(A)(C) or in Part 2, and improvements affixed thereto
which by law constitute real property. The term "land"
does not include any property beyond the lines of the
area described or referred to in Schedule (A)(C) or in
Part 2, nor any right, title, interest, estate or easement in
abutting streets, roads, avenues, alleys, lanes, ways or
waterways.
(c) "mortgage": mortgage, deed of trust, trust deed, or
other security instrument.
(d) "public records": records established under state
statutes at Date of Guarantee for the purpose of
imparting constructive notice of matters relating to real
property to purchasers for value and without knowledge.
(e) "date": the effective date.
2. Notice of Claim to be Given by Assured Claimant.
An Assured shall notify the Company promptly in writing in
case knowledge shall come to an Assured hereunder of any
claim of title or interest which is adverse to the title t o the
estate or interest, as stated herein, and which might cause
loss or damage for which the Company may be liable by
virtue of this Guarantee. If prompt notice shall not be given
to the Company, then all liability of the Company shall
terminate with regard to the matter or matters for which
prompt notice is required; provided, however, that failure to
notify the Company shall in no case prejudice the rights of
any Assured unless the Company shall be prejudiced by the
failure and then only to the extent of the prejudice.
3. No Duty to Defend or Prosecute.
The Company shall have no duty to defend or prosecute any
action or proceeding to which the Assured is a party,
notwithstanding the nature of any allegation in such action or
proceeding.
4. Company's Option to Defend or Prosecute Actions; Duty of
Assured Claimant to Cooperate.
Even though the Company has no duty to defend or prosecute as
set forth in Paragraph 3 above:
(a) The Company shall have the right, at its sole option and cost,
to institute and prosecute any action or proceeding, interpose a
defense, as limited in (b), or to do any other act which in its
opinion may be necessary or desirable to establish the title to
the estate or interest as stated herein, or to establish the lien
rights of the Assured, or to prevent or reduce loss or damage
to the Assured. The Company may take any appropriate action
under the terms of this Guarantee, whether or not it shall be
liable hereunder, and shall not thereby concede liability or
waive any provision of this Guarantee. If the Company shall
exercise its rights under this paragraph, it shall do so diligently.
(b) If the Company elects to exercise its options as stated in
Paragraph 4(a) the Company shall have the right to select
counsel of its choice (subject to the right of such Assured to
object for reasonable cause) to represent the Assured and shall
not be liable for and will not pay the fees of any other counsel,
nor will the Company pay any fees, costs or expenses incurred
by an Assured in the defense of those causes of action which
allege matters not covered by this Guarantee.
(c) Whenever the Company shall have brought an action or
interposed a defense as permitted by the provisions of this
Guarantee, the Company may pursue any litigation to final
determination by a court of competent jurisdiction and
expressly reserves the right, in its sole discretion, to appeal
from an adverse judgment or order.
(d) In all cases where this Guarantee permits the Company to
prosecute or provide for the defense of any action or
proceeding, an Assured shall secure to the Company the right
to so prosecute or provide for the defense of any action or
proceeding, and all appeals therein, and permit the Company
to use, at its option, the name of such Assured for this
purpose. Whenever requested by the Company, an Assured, at
the Company's expense, shall give the Company all
Exhibit 23
Form 5003353 (7-1-14) Page 4 of 10 Guarantee Number: 3324793 CLTA #14 Subdivision Guarantee (4-10-75)
Washington
GUARANTEE CONDITIONS AND STIPULATIONS (Continued)
reasonable aid in any action or proceeding, securing
evidence, obtaining witnesses, prosecuting or defending
the action or lawful act which in the opinion of the
Company may be necessary or desirable to establish the
title to the estate or interest as stated herein, or to
establish the lien rights of the Assured. If the Company
is prejudiced by the failure of the Assured to furnish the
required cooperation, the Company's obligations to the
Assured under the Guarantee shall terminate.
5. Proof of Loss or Damage.
In addition to and after the notices required under Section 2
of these Conditions and Stipulations have been provided to
the Company, a proof of loss or damage signed and sworn to
by the Assured shall be furnished to the Company within
ninety (90) days after the Assured shall ascertain the facts
giving rise to the loss or damage. The proof of loss or
damage shall describe the matters covered by this Guarantee
which constitute the basis of loss or damage and shall state,
to the extent possible, the basis of calculating the amount of
the loss or damage. If the Company is prejudiced by the
failure of the Assured to provide the required proof of loss or
damage, the Company's obligation to such assured under the
Guarantee shall terminate. In addition, the Assured may
reasonably be required to submit to examination under oath
by any authorized representative of the Company and shall
produce for examination, inspection and copying, at such
reasonable times and places as may be designated by any
authorized representative of the Company, all records, books,
ledgers, checks, correspondence and memoranda, whether
bearing a date before or after Date of Guarantee, which
reasonably pertain to the loss or damage. Further, if
requested by any authorized representative of the Company,
the Assured shall grant its permission, in writing, for any
authorized representative of the Company to examine, inspect
and copy all records, books, ledgers, checks, correspondence
and memoranda in the custody or control of a third party,
which reasonably pertain to the loss or damage. All
information designated as confidential by the Assured
provided to the Company pursuant to this Section shall not be
disclosed to others unless, in the reasonable judgment of the
Company, it is necessary in the administration of the claim.
Failure of the Assured to submit for examination under oath,
produce other reasonably requested information or grant
permission to secure reasonably necessary information from
third parties as required in the above paragraph, unless
prohibited by law or governmental regulation, shall terminate
any liability of the Company under this Guarantee to the
Assured for that claim.
6. Options to Pay or Otherwise Settle Claims:
Termination of Liability.
In case of a claim under this Guarantee, the Company shall
have the following additional options:
(a) To Pay or Tender Payment of the Amount of Liability or
to Purchase the Indebtedness.
The Company shall have the option to pay or settle or
compromise for or in the name of the Assured any claim
which could result in loss to the Assured within the
coverage of this Guarantee, or to pay the full amount of
this Guarantee or, if this Guarantee is issued for the
benefit of a holder of a mortgage or a lienholder, the
Company shall have the option to purchase the
indebtedness secured by said mortgage or said lien for the
amount owing thereon, together with any costs, reasonable
attorneys' fees and expenses incurred by the Assured claimant
which were authorized by the Company up to the time of
purchase.
Such purchase, payment or tender of payment of the full
amount of the Guarantee shall terminate all liability of the
Company hereunder. In the event after notice of claim has
been given to the Company by the Assured the Company offers
to purchase said indebtedness, the owner of such indebtedness
shall transfer and assign said indebtedness, together with any
collateral security, to the Company upon payment of the
purchase price.
Upon the exercise by the Company of the option provided for
in Paragraph (a) the Company's obligation to the Assured
under this Guarantee for the claimed loss or damage, other
than to make the payment required in that paragraph, shall
terminate, including any obligation to continue the defense or
prosecution of any litigation for which the Company has
exercised its options under Paragraph 4, and the Guarantee
shall be surrendered to the Company for cancellation.
(b) To Pay or Otherwise Settle With Parties Other Than the
Assured or With the Assured Claimant.
To pay or otherwise settle with other parties for or in the name
of an Assured claimant any claim assured against under this
Guarantee, together with any costs, attorneys' fees and
expenses incurred by the Assured claimant which were
authorized by the Company up to the time of payment and
which the Company is obligated to pay.
Upon the exercise by the Company of the option provided for
in Paragraph (b) the Company's obligation to the Assured
under this Guarantee for the claimed loss or damage, other
than to make the payment required in that paragraph, shall
terminate, including any obligation to continue the defense or
prosection of any litigation for which the Company has
exercised its options under Paragraph 4.
7. Determination and Extent of Liability.
This Guarantee is a contract of Indemnity against actual monetary
loss or damage sustained or incurred by the Assured claimant who
has suffered loss or damage by reason of reliance upon the
assurances set forth in this Guarantee and only to the extent herein
described, and subject to the Exclusions From Coverage of This
Guarantee.
The liability of the Company under this Guarantee to the Assured
shall not exceed the least of:
(a) the amount of liability stated in Schedule A or in Part 2;
(b) the amount of the unpaid principal indebtedness secured by
the mortgage of an Assured mortgagee, as limited or provided
under Section 6 of these Conditions and Stipulations or as
reduced under Section 9 of these Conditions and Stipulations,
at the time the loss or damage assured against by this
Guarantee occurs, together with interest thereon; or
(c) the difference between the value of the estate or interest
covered hereby as stated herein and the value of the estate or
interest subject to any defect, lien or encumbrance assured
against by this Guarantee.
8. Limitation of Liability.
(a) If the Company establishes the title, or removes the alleged
defect, lien or encumbrance, or cures any other matter assured
against by this Guarantee in a reasonably diligent manner by
Exhibit 23
Form 5003353 (7-1-14) Page 5 of 10 Guarantee Number: 3324793 CLTA #14 Subdivision Guarantee (4-10-75)
Washington
GUARANTEE CONDITIONS AND STIPULATIONS (Continued)
any method, including litigation and the completion of
any appeals therefrom, it shall have fully performed its
obligations with respect to that matter and shall not be
liable for any loss or damage caused thereby.
(b) In the event of any litigation by the Company or with the
Company's consent, the Company shall have no liability
for loss or damage until there has been a final
determination by a court of competent jurisdiction, and
disposition of all appeals therefrom, adverse to the title,
as stated herein.
(c) The Company shall not be liable for loss or damage to
any Assured for liability voluntarily assumed by the
Assured in settling any claim or suit without the prior
written consent of the Company.
9. Reduction of Liability or Termination of Liability.
All payments under this Guarantee, except payments made
for costs, attorneys' fees and expenses pursuant to Paragraph
4 shall reduce the amount of liability pro tanto.
10. Payment of Loss.
(a) No payment shall be made without producing this
Guarantee for endorsement of the payment unless the
Guarantee has been lost or destroyed, in which case
proof of loss or destruction shall be furnished to the
satisfaction of the Company.
(b) When liability and the extent of loss or damage has been
definitely fixed in accordance with these Conditions and
Stipulations, the loss or damage shall be payable within
thirty (30) days thereafter.
11. Subrogation Upon Payment or Settlement.
Whenever the Company shall have settled and paid a claim
under this Guarantee, all right of subrogation shall vest in the
Company unaffected by any act of the Assured claimant.
The Company shall be subrogated to and be entitled to all
rights and remedies which the Assured would have had
against any person or property in respect to the claim had this
Guarantee not been issued. If requested by the Company,
the Assured shall transfer to the Company all rights and
remedies against any person or property necessary in order to
perfect this right of subrogation. The Assured shall permit the
Company to sue, compromise or settle in the name of the
Assured and to use the name of the Assured in any
transaction or litigation involving these rights or remedies.
If a payment on account of a claim does not fully cover the
loss of the Assured the Company shall be subrogated to all
rights and remedies of the Assured after the Assured shall
have recovered its principal, interest, and costs of collection.
12. Arbitration.
Unless prohibited by applicable law, either the Company or the
Assured may demand arbitration pursuant to the Title Insurance
Arbitration Rules of the American Land Title Association. Arbitrable
matters may include, but are not limited to, any controversy or
claim between the Company and the Assured arising out of or
relating to this Guarantee, any service of the Company in
connection with its issuance or the breach of a Guarantee provision
or other obligation. All arbitrable matters when the Amount of
Liability is $2,000,000 or less shall be arbitrated at the option of
either the Company or the Assured. All arbitrable matters when the
amount of liability is in excess of $2,000,000 shall be arbitrated only
when agreed to by both the Company and the Assured. The Rules
in effect at Date of Guarantee shall be binding upon the parties.
The award may include attorneys' fees only if the laws of the state
in which the land is located permits a court to award attorneys' fees
to a prevailing party. Judgment upon the award rendered by the
Arbitrator(s) may be entered in any court having jurisdicti on
thereof.
The law of the situs of the land shall apply to an arbitration under
the Title Insurance Arbitration Rules.
A copy of the Rules may be obtained from the Company upon
request.
13. Liability Limited to This Guarantee; Guarantee Entire
Contract.
(a) This Guarantee together with all endorsements, if any,
attached hereto by the Company is the entire Guarantee and
contract between the Assured and the Company. In
interpreting any provision of this Guarantee, this Guarantee
shall be construed as a whole.
(b) Any claim of loss or damage, whether or not based on
negligence, or any action asserting such claim, shall be
restricted to this Guarantee.
(c) No amendment of or endorsement to this Guarantee can be
made except by a writing endorsed hereon or attached hereto
signed by either the President, a Vice President, the Secretary,
an Assistant Secretary, or validating officer or authorized
signatory of the Company.
14. Notices, Where Sent.
All notices required to be given the Company and any statement in
writing required to be furnished the Company shall include the
number of this Guarantee and shall be addressed to the Company
at First American Title Insurance Company, Attn: Claims
National Intake Center, 1 First American Way, Santa Ana,
California 92707 Claims.NIC@firstam.com Phone: 888-632-
1642 Fax: 877-804-7606
Exhibit 23
Form 5003353 (7-1-14) Page 6 of 10 Guarantee Number: 3324793 CLTA #14 Subdivision Guarantee (4-10-75)
Washington
Schedule A
Subdivision Guarantee
ISSUED BY
First American Title Insurance Company
GUARANTEE NUMBER
3324793
Order No.: 3324793 Liability: $2,000.00 Fee: $350.00
Tax: $35.35
Name of Assured: ACH Homes, LLC
Date of Guarantee: September 12, 2019
The assurances referred to on the face page hereof are:
1. Title is vested in:
RMJ Holdings, LLC, a Washington limited liability company
2. That, according to the public records relative to the land described in Schedule C attached hereto
(including those records maintained and indexed by name), there are no other documents affecting
title to said land or any portion thereof, other than those shown under Record Matters in Schedule B.
3. The following matters are excluded from the coverage of this Guarantee
A. Unpatented Mining Claims, reservations or exceptions in patents or in acts authorizing the issuance
thereof.
B. Water rights, claims or title to water.
C. Tax Deeds to the State of Washington.
D. Documents pertaining to mineral estates.
4. No guarantee is given nor liability assumed with respect to the validity, legal effect or priority of any
matter shown herein.
5. This Guarantee is restricted to the use of the Assured for the purpose of providing title evidence as
may be required when subdividing land pursuant to the provisions of Chapter 58.17, R.C.W., and the
local regulations and ordinances adopted pursuant to said statute. It is not to be used as a basis for
closing any transaction affecting title to said property.
6. Any sketch attached hereto is done so as a courtesy only and is not part of any title commitment,
guarantee or policy. It is furnished solely for the purpose of assisting in locating the premises and
First American expressly disclaims any liability which may result from reliance made upon it.
Exhibit 23
Form 5003353 (7-1-14) Page 7 of 10 Guarantee Number: 3324793 CLTA #14 Subdivision Guarantee (4-10-75)
Washington
Schedule B
Subdivision Guarantee
ISSUED BY
First American Title Insurance Company
GUARANTEE NUMBER
3324793
RECORD MATTERS
1. Easement, including terms and provisions contained therein:
Recording Information: 1333341
For: Pipeline
Affects: Parcel A
2. Easement, including terms and provisions contained therein:
Recording Information: 2279404
In Favor of: Pacific Telephone and Telegraph Company
For: Poles with necessary appurtenances
Affects: Parcel B
3. Easement, including terms and provisions contained therein:
Recording Information: 6382268
In Favor of: Lakehaven Sewer District, a municipal corporation
For: Sewer mains
Affects: Parcel A
4. Easement, including terms and provisions contained therein:
Recording Information: 6500949
In Favor of: Water District No. 64, a municipal corporation
For: Water main and a reservoir drain line
Affects: Parcel A
5. Easement, including terms and provisions contained therein:
Recording Information: 7807060855
In Favor of: Lakehaven Sewer District, a municipal corporation
For: Sewer mains
Affects: Parcel A
6. Easement, including terms and provisions contained therein:
Recording Information: 8703020711
In Favor of: Adjacent property owners
For: Ingress, egress and utilities
Affects: Parcel A
Exhibit 23
Form 5003353 (7-1-14) Page 8 of 10 Guarantee Number: 3324793 CLTA #14 Subdivision Guarantee (4-10-75)
Washington
7. Easement, including terms and provisions contained therein:
Recording Information: 8901200501
In Favor of: Adjacent property owners
For: Roadway for vehicular and pedestrian ingress and egress and for
underground utilities
Affects: Parcel A
8. Easement, including terms and provisions contained therein:
Recording Information: 8901200502
In Favor of: Adjacent property owners
For: Roadway for vehicular and pedestrian ingress and egress and for
underground utilities
Affects: Parcel A
9. Conditions, notes, easements, provisions and/or encroachments contained or delineated on the face
of the Survey recorded under Recording No. 9507129006.
10. Easement, including terms and provisions contained therein:
Recording Information: 20091209000857
In Favor of: The City of Federal Way
For: Storm water system
Affects: Parcel A
Re-recorded under Recording Number 20100310000599.
Informational Notes, if any
A. General taxes for the year 2019, which have been paid.
Tax Account No.: 042104901204
Code Area: 1205
Amount: $ 34.42
Assessed Land Value: $ 3,014.00
Assessed Improvement Value: $ 0.00
Affects: Parcel A
B. General taxes for the year 2019, which have been paid.
Tax Account No.: 042104922101
Code Area: 1205
Amount: $ 871.15
Assessed Land Value: $ 77,000.00
Assessed Improvement Value: $ 0.00
Affects: Parcel B
Exhibit 23
Form 5003353 (7-1-14) Page 9 of 10 Guarantee Number: 3324793 CLTA #14 Subdivision Guarantee (4-10-75)
Washington
C. We don't find any voluntary liens of record affecting subject property. Inquire as to the existence of
any unrecorded lien or other indebtedness which could give rise to any security interest in the subject
property.
Exhibit 23
Form 5003353 (7-1-14) Page 10 of 10 Guarantee Number: 3324793 CLTA #14 Subdivision Guarantee (4-10-75)
Washington
Schedule C
Subdivision Guarantee
ISSUED BY
First American Title Insurance Company
GUARANTEE NUMBER
3324793
The land in the County of King, State of Washington, described as follows:
PARCEL A:
THAT PORTION OF THE SOUTHWEST QUARTER OF THE SOUTHWEST QUARTER OF SECTION 4,
TOWNSHIP 21 NORTH, RANGE 4 EAST, W.M., IN KING COUNTY, WASHINGTON, LYING EAST OF
PACIFIC HIGHWAY SOUTH.
EXCEPT THE SOUTH HALF THEREOF LYING WEST OF THE EAST 610 FEET THEREOF.
AND EXCEPT THE EAST 330 FEET OF THE NORTH 183 FEET THEREOF.
AND EXCEPT THE SOUTH 30 FEET THEREOF FOR SOUTH 304TH STREET.
AND EXCEPT THAT PORTION CONVEYED TO THE CITY OF FEDERAL WAY BY SPECIAL WARRANTY DEED
RECORDED DECEMBER 9, 2009 AS RECORDING NO. 20091209000856.
PARCEL B:
THE WEST 135 FEET OF THE EAST 465 FEET OF THE SOUTH 117 FEET OF THE NORTHWEST QUARTER
OF THE SOUTHWEST QUARTER OF SECTION 4, TOWNSHIP 21 NORTH, RANGE 4 EAST, W.M., IN KING
COUNTY, WASHINGTON.
Exhibit 23
Addenda
Addendum C
DEED
Exhibit 23
Exhibit 23
Exhibit 23
Exhibit 23
Exhibit 23
Exhibit 23
Exhibit 23
Addenda
Addendum D
CLIENT CONTRACT INFORMATION
Exhibit 23
VALUATION & ADVISORY SERVICES
Proposal and Contract for Services
CBRE, Inc.
1420 Fifth Avenue, Suite 1700
Seattle, WA 98101
www.cbre.us/valuation
April 2, 2020
Whitney Haucke, MAI, CPA, MRICS
Managing Director
Dmitriy Mayzlin
RMJ HOLDINGS LLC
9675 SE 36th Street, Suite 105
Mercer Island, WA 98040
Phone: 206.588.1147 ext. 114
Email: dmitriy@americanclassichomes.com
RE: Assignment Agreement - Land
20th Ave Subdivision Site, 30231 20th Ave S
Federal Way, WA 98003
Dear Mr. Mayzlin:
We are pleased to submit this proposal and our Terms and Conditions for this assignment.
PROPOSAL SPECIFICATIONS
Purpose: To estimate the Fair Market Value of the referenced real estate
Premise: As Is
Rights Appraised: Fee Simple
Intended Use: Internal Decision Making purposes
Intended User: The intended user is RMJ HOLDINGS LLC (“Client”), The City of
Federal Way, and such other parties and entities (if any) expressly
recognized by CBRE as “Intended Users” (as further defined
herein).
Reliance: Reliance on any reports produced by CBRE under this Agreement
is extended solely to parties and entities expressly acknowledged
in a signed writing by CBRE as Intended Users of the respective
reports, provided that any conditions to such acknowledgement
required by CBRE or hereunder have been satisfied. Parties or
entities other than Intended Users who obtain a copy of the report
or any portion thereof (including Client if it is not named as an
Intended User), whether as a result of its direct dissemination or
by any other means, may not rely upon any opinions or
conclusions contained in the report or such portions thereof, and
CBRE will not be responsible for any unpermitted use of the
report, its conclusions or contents or have any liability in
connection therewith.
Inspection: CBRE will conduct a physical inspection of the exterior of the
subject property, and its surrounding environs on the effective
date of appraisal.
Exhibit 23
RMJ HOLDINGS LLC
Assignment Agreement
Page 2 of 7
April 2, 2020
www.cbre.us/valuation
VALUATION & ADVISORY SERVICES
Valuation Approaches: Only the Sales Comparison Approach will be completed.
Report Type: Standard Appraisal Report
Appraisal Standards: USPAP
Appraisal Fee: $3,500
Expenses: Fee includes all associated expenses
Retainer: A retainer is not required for this assignment
Payment Terms: Final payment is due upon delivery of the final report or within
thirty (30) days of your receipt of the draft report, whichever is
sooner. The fee is considered earned upon delivery of the draft
report.
We will invoice you for the assignment in its entirety at the
completion of the assignment.
Delivery Instructions: CBRE encourages our clients to join in our environmental
sustainability efforts by accepting an electronic copy of the report.
An Adobe PDF file via email will be delivered to
dmitriy@americanclassichomes.com.
Delivery Schedule:
Preliminary Value: 5 business days after the Start Date
Draft Report: Not Required
Final Report: 10 business days after the Start Date
Start Date: The appraisal process will start upon receipt of your signed
agreement and the property specific data.
Acceptance Date: These specifications are subject to modification if this proposal is
not accepted within 3 business days from the date of this letter.
When executed and delivered by all parties, this letter, together with the Terms and Conditions and the
Specific Property Data Request attached hereto and incorporated herein, will serve as the Agreement for
appraisal services by and between CBRE and Client. Each person signing below represents that it is
authorized to enter into this Agreement and to bind the respective parties hereto.
We appreciate this opportunity to be of service to you on this assignment. If you have additional
questions, please contact us.
Sincerely,
CBRE, Inc.
Valuation & Advisory Services
Whitney Haucke, MAI, CPA, MRICS
Managing Director
As Agent for CBRE, Inc.
T 206.292.6006
whitney.haucke@cbre.com
Exhibit 23
RMJ HOLDINGS LLC
Assignment Agreement
Page 3 of 7
April 2, 2020
www.cbre.us/valuation
VALUATION & ADVISORY SERVICES
AGREED AND ACCEPTED
FOR RMJ HOLDINGS LLC (“CLIENT”):
Signature Date
Dmitriy Mayzlin
Name Title
206.588.1147 dmitriy@americanclassichomes.com
Phone Number E-Mail Address
ADDITIONAL OPTIONAL SERVICES
Assessment & Consulting Services: CBRE’s Assessment & Consulting Services group has the
capability of providing a wide array of solution-oriented due diligence services in the form of
property condition and environmental site assessment reports and other necessary due diligence
services (seismic risk analysis, zoning compliance services, construction risk management, annual
inspections, etc.). CBRE provides our clients the full complement of due diligence services with
over 260 employees in the U.S. that are local subject matter experts.
Initial below if you desire CBRE to contact you to discuss a proposal for any part or the full
complement of consulting services, or you may reach out to us at
WhitePlainsProposals@cbre.com. We will route your request to the appropriate manager. For
more information, please visit www.cbre.com/assessment.
________ Initial Here
4/2/2020
Director of Land A&D
DM
Exhibit 23
RMJ HOLDINGS LLC
Assignment Agreement
Page 4 of 7
April 2, 2020
Revised July 5, 2016
VALUATION & ADVISORY SERVICES
TERMS AND CONDITIONS
1. The Terms and Conditions herein are part of an agreement for appraisal services (the “Agreement” ) between
CBRE, Inc. (the “Appraiser”) and the client signing this Agreement, and for whom the appraisal services will be
performed (the “Client”), and shall be deemed a part of such Agreement as though set forth in full therein. The
Agreement shall be governed by the laws of the state where the appraisal office is located for the Appraiser
executing this Agreement.
2. Client shall be responsible for the payment of all fees stipulated in the Agreement. Payment of the appraisal fee
and preparation of an appraisal report (the “Appraisal Report, or the “report”) are not contingent upon any
predetermined value or on an action or event resulting from the analyses, opinions, conclusions, or use of the
Appraisal Report. Final payment is due as provided in the Proposal Specifications Section of this Agreement. If a
draft report is requested, the fee is considered earned upon delivery of the draft report. It is understood that the
Client may cancel this assignment in writing at any time prior to delivery of the completed report. In such event,
the Client is obligated only for the prorated share of the fee based upon the work completed and expenses
incurred (including travel expenses to and from the job site), with a minimum charge of $00. Additional copies of
the Appraisal Reports are available at a cost of $250 per original color copy and $100 per photocopy (black and
white), plus shipping fees of $30 per report.
3. If Appraiser is subpoenaed or ordered to give testimony, produce documents or information, or otherwise required
or requested by Client or a third party to participate in meetings, phone calls, conferences, litigation or other legal
proceedings (including preparation for such proceedings) because of, connected with or in any way pertaining to
this engagement, the Appraisal Report, the Appraiser’s expertise, or the Property, Client shall pay Appraiser’s
additional costs and expenses, including but not limited to Appraiser’s attorneys’ fees, and additional time incurred
by Appraiser based on Appraiser’s then-prevailing hourly rates and related fees. Such charges include and
pertain to, but are not limited to, time spent in preparing for and providing court room testimony, depositions,
travel time, mileage and related travel expenses, waiting time, document review and production, and preparation
time (excluding preparation of the Appraisal Report), meeting participation, and Appraiser’s other related
commitment of time and expertise. Hourly charges and other fees for such participation will be provided upon
request. In the event Client requests additional appraisal services beyond the scope and purpose stated in the
Agreement, Client agrees to pay additional fees for such services and to reimburse related expenses, whether or
not the completed report has been delivered to Client at the time of such request.
4. Appraiser shall have the right to terminate this Agreement at any time for cause effective immediately upon written
notice to Client on the occurrence of fraud or the willful misconduct of Client, its employees or agents, or without
cause upon 5 days written notice.
5. In the event Client fails to make payments when due then, from the date due until paid, the amount due and
payable shall bear interest at the maximum rate permitted in the state where the office is located for the Appraiser
executing the Agreement. In the event either party institutes legal action against the other to enforce its rights
under this Agreement, the prevailing party shall be entitled to recover its reasonable attorney’s fees and expenses.
Each party waives the right to a trial by jury in any action arising under this Agreement.
6. Appraiser assumes there are no major or significant items or issues affecting the Property that would require the
expertise of a professional building contractor, engineer, or environmental consultant for Appraiser to prepare a
valid report. Client acknowledges that such additional expertise is not covered in the Appraisal fee and agrees
that, if such additional expertise is required, it shall be provided by others at the discretion and direction of the
Client, and solely at Client’s additional cost and expense.
7. In the event of any dispute between Client and Appraiser relating to this Agreement, or Appraiser's or Client's
performance hereunder, Appraiser and Client agree that such dispute shall be resolved by means of binding
arbitration in accordance with the commercial arbitration rules of the American Arbitration Association, and
judgment upon the award rendered by an arbitrator may be entered in any court of competent jurisdiction.
Depositions may be taken and other discovery obtained during such arbitration proceedings to the same extent as
authorized in civil judicial proceedings in the state where the office of the Appraiser executing this Agreement is
located. The arbitrator shall be limited to awarding compensatory damages and shall have no authority to award
punitive, exemplary or similar damages. The prevailing party in the arbitration proceeding shall be entitled to
recover its expenses from the losing party, including costs of the arbitration proceeding, and reasonable attorney's
fees. Client acknowledges that Appraiser is being retained hereunder as an independent contractor to perform the
services described herein and nothing in this Agreement shall be deemed to create any other relationship between
Exhibit 23
RMJ HOLDINGS LLC
Assignment Agreement
Page 5 of 7
April 2, 2020
Revised July 5, 2016
VALUATION & ADVISORY SERVICES
Client and Appraiser. This engagement shall be deemed concluded and the services hereunder completed upon
delivery to Client of the Appraisal Report discussed herein.
8. All statements of fact in the report which are used as the basis of the Appraiser's analyses, opinions, and
conclusions will be true and correct to Appraiser's actual knowledge and belief. Appraiser does not make any
representation or warranty, express or implied, as to the accuracy or completeness of the information or the
condition of the Property furnished to Appraiser by Client or others. TO THE FULLEST EXTENT PERMITTED BY
LAW, APPRAISER DISCLAIMS ANY GUARANTEE OR WARRANTY AS TO THE OPINIONS AND CONCLUSIONS
PRESENTED ORALLY OR IN ANY APPRAISAL REPORT, INCLUDING WITHOUT LIMITATION ANY WARRANTY OF
FITNESS FOR ANY PARTICULAR PURPOSE EVEN IF KNOWN TO APPRAISER. Furthermore, the conclusions and
any permitted reliance on and use of the Appraisal Report shall be subject to the assumptions, limitations, and
qualifying statements contained in the report.
9. Appraiser shall have no responsibility for legal matters, including zoning, or questions of survey or title, soil or
subsoil conditions, engineering, or other similar technical matters. The report will not constitute a survey of the
Property analyzed.
10. Client shall provide Appraiser with such materials with respect to the assignment as are requested by Appraiser
and in the possession or under the control of Client. Client shall provide Appraiser with sufficient access to the
Property to be analyzed, and hereby grants permission for entry unless discussed in advance to the contrary.
11. The data gathered in the course of the assignment (except data furnished by Client) and the report prepared
pursuant to the Agreement are, and will remain, the property of Appraiser. With respect to data provided by
Client, Appraiser shall not violate the confidential nature of the Appraiser-Client relationship by improperly
disclosing any proprietary information furnished to Appraiser. Notwithstanding the foregoing, Appraiser is
authorized by Client to disclose all or any portion of the report and related data as may be required by statute,
government regulation, legal process, or judicial decree, including to appropriate representatives of the Appraisal
Institute if such disclosure is required to enable Appraiser to comply with the Bylaws and Regulations of such
Institute as now or hereafter in effect.
12. Unless specifically noted, in preparing the Appraisal Report the Appraiser will not be considering the possible
existence of asbestos, PCB transformers, or other toxic, hazardous, or contaminated substances and/or
underground storage tanks (collectively, “Hazardous Material) on or affecting the Property, or the cost of
encapsulation or removal thereof. Further, Client represents that there is no major or significant deferred
maintenance of the Property that would require the expertise of a professional cost estimator or contractor. If such
repairs are needed, the estimates are to be prepared by others, at Client’s discretion and direction, and are not
covered as part of the Appraisal fee.
13. In the event Client intends to use the Appraisal Report in connection with a tax matter, Client acknowledges that
Appraiser provides no warranty, representation or prediction as to the outcome of such tax matter. Client
understands and acknowledges that any relevant taxing authority (whether the Internal Revenue Service or any
other federal, state or local taxing authority) may disagree with or reject the Appraisal Report or otherwise disagree
with Client’s tax position, and further understands and acknowledges that the taxing authority may seek to collect
additional taxes, interest, penalties or fees from Client beyond what may be suggested by the Appraisal Report.
Client agrees that Appraiser shall have no responsibility or liability to Client or any other party for any such taxes,
interest, penalties or fees and that Client will not seek damages or other compensation from Appraiser relating to
any such taxes, interest, penalties or fees imposed on Client, or for any attorneys’ fees, costs or other expenses
relating to Client’s tax matters.
14. Appraiser shall have no liability with respect to any loss, damage, claim or expense incurred by or asserted against
Client arising out of, based upon or resulting from Client’s failure to provide accurate or complete information or
documentation pertaining to an assignment ordered under or in connection with this Agreement, including Client’s
failure, or the failure of any of Client’s agents, to provide a complete copy of the Appraisal Report to any third
party.
15. LIMITATION OF LIABILITY. EXCEPT TO THE EXTENT ARISING FROM SECTION 16 BELOW, OR SECTION 17 IF
APPLICABLE, IN NO EVENT SHALL EITHER PARTY OR ANY OF ITS AFFILIATE, OFFICERS, DIRECTORS,
EMPLOYEES, AGENTS, OR CONTRACTORS BE LIABLE TO THE OTHER, WHETHER BASED IN CONTRACT,
WARRANTY, INDEMNITY, NEGLIGENCE, STRICT LIABILITY OR OTHER TORT OR OTHERWISE, FOR ANY SPECIAL,
CONSEQUENTIAL, PUNITIVE, INCIDENTAL OR INDIRECT DAMAGES, AND AGGREGATE DAMAGES IN
CONNECTION WITH THIS AGREEMENT FOR EITHER PARTY (EXCLUDING THE OBLIGATION TO PAY THE FEES
REQUIRED HEREUNDER) SHALL NOT EXCEED THE GREATER OF THE TOTAL FEES PAYABLE TO APPRAISER
UNDER THIS AGREEMENT OR TEN THOUSAND DOLLARS ($10,000). THIS LIABILITY LIMITATION SHALL NOT
Exhibit 23
RMJ HOLDINGS LLC
Assignment Agreement
Page 6 of 7
April 2, 2020
Revised July 5, 2016
VALUATION & ADVISORY SERVICES
APPLY IN THE EVENT OF A FINAL FINDING BY AN ARBITRATOR OR A COURT OF COMPETENT JURISDICTION
THAT SUCH LIABILITY IS THE RESULT OF A PARTY’S FRAUD OR WILLFUL MISCONDUCT.
16. Client shall not disseminate, distribute, make available or otherwise provide any Appraisal Report prepared
hereunder to any third party (including without limitation, incorporating or referencing the Appraisal Report , in
whole or in part, in any offering or other material intended for review by other parties) except to (i) any third party
expressly acknowledged in a signed writing by Appraiser as an “Intended User” of the Appraisal Report provided
that either Appraiser has received an acceptable release from such third party with respect to such Appraisal
Report or Client provides acceptable indemnity protections to Appraiser against any claims resulting from the
distribution of the Appraisal Report to such third party, (ii) any third party service provider (including rating
agencies and auditors) using the Appraisal Report in the course of providing services for the sole benefit of an
Intended User, or (iii) as required by statute, government regulation, legal process, or judicial decree. In the event
Appraiser consents, in writing, to Client incorporating or referencing the Appraisal Report in any offering or other
materials intended for review by other parties, Client shall not distribute, file, or otherwise make such materials
available to any such parties unless and until Client has provided Appraiser with complete copies of such materials
and Appraiser has approved all such materials in writing. Client shall not modify any such materials once
approved by Appraiser. In the absence of satisfying the conditions of this paragraph with respect to a party who is
not designated as an Intended User, in no event shall the receipt of an Appraisal Report by such party extend any
right to the party to use and rely on such report, and Appraiser shall have no liability for such unauthorized use
and reliance on any Appraisal Report. In the event Client breaches the provisions of this paragraph, Client shall
indemnify, defend and hold Appraiser, and its affiliates and their officers, directors, employees, contractors, agents
and other representatives (Appraiser and each of the foregoing an “Indemnified Party” and collectively the
“Indemnified Parties”), fully harmless from and against all losses, liabilities, damages and expenses (collectively,
“Damages”) claimed against, sustained or incurred by any Indemnified Party arising out of or in connection with
such breach, regardless of any negligence on the part of any Indemnified Party in preparing the Appraisal Report.
17. Furthermore, Client shall indemnify, defend and hold each of the Indemnified Parties harmless from and against
any Damages in connection with (i) any transaction contemplated by this Agreement or in connection with the
appraisal or the engagement of or performance of services by any Indemnified Party hereunder, (ii) any Damages
claimed by any user or recipient of the Appraisal Report, whether or not an Intended User, (iii) any actual or
alleged untrue statement of a material fact, or the actual or alleged failure to state a material fact necessary to
make a statement not misleading in light of the circumstances under which it was made with respect to all
information furnished to any Indemnified Party or made available to a prospective party to a transaction, or (iv) an
actual or alleged violation of applicable law by an Intended User (including, without limitation, securities laws) or
the negligent or intentional acts or omissions of an Intended User (including the failure to perform any duty
imposed by law); and will reimburse each Indemnified Party for all reasonable fees and expenses (including fees
and expenses of counsel) (collectively, “Expenses”) as incurred in connection with investigating, preparing,
pursuing or defending any threatened or pending claim, action, proceeding or investigation (collectively,
“Proceedings”) arising therefrom, and regardless of whether such Indemnified Party is a formal party to such
Proceeding. Client agrees not to enter into any waiver, release or settlement of any Proceeding (whether or not
any Indemnified Party is a formal party to such Proceeding) without the prior written consent of Appraiser (which
consent will not be unreasonably withheld or delayed) unless such waiver, release or settlement includes an
unconditional release of each Indemnified Party from all liability arising out of such Proceeding.
18. Time Period for Legal Action. Unless the time period is shorter under applicable law, except in connection with
paragraphs 16 and 17 above, Appraiser and Client agree that any legal action or lawsuit by one party against the
other party or its affiliates, officers, directors, employees, contractors, agents, or other representatives, whether
based in contract, warranty, indemnity, negligence, strict liability or other tort or otherwise, relating to (a) this
Agreement or the Appraisal Report, (b) any services or appraisals under this Agreement or (c) any acts or conduct
relating to such services or appraisals, shall be filed within two (2) years from the date of delivery to Client of the
Appraisal Report to which the claims or causes of action in the legal action or lawsuit relate. The time period
stated in this section shall not be extended by any incapacity of a party or any delay in the discovery or accrual of
the underlying claims, causes of action or damages.
Exhibit 23
VALUATION & ADVISORY SERVICES
Proposal and Contract for Services
www.cbre.us/valuation
SPECIFIC PROPERTY DATA REQUEST
In order to complete this assignment under the terms outlined, CBRE, Inc., Valuation & Advisory
Services, will require the following specific information for the property:
1. PLEASE NOTIFY US IMMEDIATELY IF ANY OTHER CBRE SERVICE LINE (INCLUDING CAPSTONE) IS
INVOLVED IN THE BROKERAGE, FINANCING, INVESTMENT OR MANAGEMENT OF THIS ASSET.
2. Current title report or title holder name
3. Legal description
4. Survey and/or plat map
5. Current county property tax assessment or tax bill and information on the projected effective tax rate
(including all potential special assessments)
6. Details on any sale, contract, or listing of the property within the past three years
7. Any other information that might be helpful in valuing this property
If any of the requested data and information is not available, CBRE, Inc., reserves the right to extend
the delivery date by the amount of time it takes to receive the requested information or make other
arrangements. Please have the requested information delivered to the following:
Bob Mangino
Robert.mangino@cbre.com
CBRE, Inc.
Valuation & Advisory Services
1420 Fifth Avenue, Suite 1700
Seattle, WA 98101
Exhibit 23
Addenda
Addendum E
QUALIFICATIONS
Exhibit 23
Bob Mangino
Senior Appraiser, Seattle
̶̶̶̶̶̶̶̶̶̶̶̶̶̶̶ Experience ̶̶̶̶̶̶̶̶̶̶̶̶̶̶̶
Mr. Mangino is a Senior Appraiser working in the Seattle’s Valuation and Advisory Services
group. He has been involved with real estate underwriting, appraisal, and counseling since
1999. Prior to working at CBRE he was the principal of Mangino Advisory Services, a firm
offering customized services involving the valuation of and investment strategies for commercial
real estate. Before that he was an appraiser at O’Connor Consulting Group in Seattle, where he
worked on appraisals and litigation support for multifamily, commercial, retail, medical office,
recreational, mixed-use, and hospitality properties. Prior to that, Mr. Mangino was an Associate
Director of Valuation Advisory Services at Cushman & Wakefield of Washington, Inc., where he
worked on appraisals of a wide variety of property types for 12 years.
Mr. Mangino has worked on consulting assignments that include vacant land, office buildings,
shopping centers, industrial buildings, commercial properties, mixed-use developments, and
residential properties in Alaska, British Columbia, Washington, and Oregon. He has performed
valuations of proposed, partially completed, renovated, and existing structures.
̶̶̶̶̶̶ Professional Affiliations / Accreditations ̶̶̶̶̶̶
•Affiliate Member, Appraisal Institute
•Duly Certified General Real Estate Appraiser in Washington State
̶ Washington License #1101669
̶̶̶̶̶̶̶̶̶̶̶̶̶̶̶̶ Education ̶̶̶̶̶̶̶̶̶̶̶̶̶̶̶̶
•University of Washington, Seattle, Washington, 1998
̶ Degree: Master of Business Administration (Real Estate and Finance)
•Sarah Lawrence College, Bronxville, New York, 1987
̶ Degree: Bachelor of Arts (English)
T + 01 206 292 6164
M +01 206 910 5934
robert.mangino@cbre.com
1420 5th Ave, Suite 1700
Seattle, WA 98101
www.cbre.com/robert.mangino
Exhibit 23
I
State of Washington
DEPARTMENT OF LICENSING
APPRAISER PROGRAM
PO Box 9021
Olympia, WA 98507
ADDRESS SERVICE REQUESTED
ROBERT MANGINO
3058 60TH A VE SE
MERCER ISLAND WA 98040
REAA 586
STATE OF WASHINGTON
CERTIFIED GENERAL REAL ESTATE APPRAISER
ROBERT MANGINO
3058 60TH A VE SE
MERCER ISLAND WA 98040
1101669 10/15/2020
License Number Expiration Date Pot Kohler, Director
STATE Q_f WASHINGTON DEPARTMENT OF LICENSrNG-BUSINESS AND PROFESSIONS DIVISION
THIS CERTIFIES THAT THE PERSON OR BUSINESS NAMED BELOW IS AUTHORIZED AS A
CERTIFIED GENERAL REAL ESTATE APPRAISER
ROBERT MANGINO
3058 60TH A VE SE
MERCER ISLAND WA 98040
1101669 04/28/2005 10/15/2020
License Number Issued Date Expiration Date
PL-630-159 (R/3/16)
Pat Kohler, Director
Exhibit 23
Whitney Haucke, MAI, CPA, MRICS
Managing Director, Pacific Northwest
̶̶̶̶̶̶̶̶̶̶̶̶̶̶̶ Experience ̶̶̶̶̶̶̶̶̶̶̶̶̶̶̶
Ms. Haucke has been involved with real estate counseling and appraisal for nearly 20 years. Her
family background is in real estate and her roots in the Pacific Northwest run deep, stemming
from the active family brokerage and development business in Eugene, Oregon (CW Walker &
Associates). She works with a wide variety of clients on diverse issues dealing with real estate.
She is the Managing Director of CBRE, managing the consulting and appraisal activities in the
Pacific Northwest (Oregon, Idaho, Washington and Alaska). She is also a Washington State
licensed Certified Public Accountant.
Her appraisal and consulting assignments have included area malls and shopping centers,
apartments, condominiums, vacant land, office buildings, industrial complexes, commercial
properties, residential properties, self-storage and other investment properties along the West
Coast. She has performed valuations of proposed, partially completed, renovated and existing
structures. She has served as arbiter in numerous real estate matters, including ground rent
redetermination, space lease renewal rent determination and property tax issues.
̶̶̶̶̶̶ Professional Affiliations / Accreditations ̶̶̶̶̶̶
•Designated Member (MAI), Appraisal Institute
Chapter President 2018 – Seattle Chapter
Chapter Vice President 2017 – Seattle Chapter
Chapter Treasurer 2016 – Seattle Chapter
Chapter Secretary 2015 – Seattle Chapter
Former Member, Board of Directors – Seattle Chapter
Former Seattle Chapter Finance Committee Member and Associate Member
Guidance Chair
•Royal Institution of Chartered Surveyors – Member (MRICS)
•Certified Public Accountant (CPA) – Washington State, license #20170
•Ms. Haucke is a Certified General Real Estate Appraiser in the following states:
̶ Washington #1101005
̶ Oregon #C001037
̶ Idaho #CGA-3142
̶ Alaska #866
̶̶̶̶̶̶̶̶̶̶̶̶̶̶̶̶ Education ̶̶̶̶̶̶̶̶̶̶̶̶̶̶̶̶
•Seattle Pacific University, Seattle, Washington
Bachelor of Arts (Majoring in Accounting)
•Appraisal Institute Professional Development Program Registry for Litigation
•Appraisal Institute Program Registry for Valuation of Sustainable Buildings
•“Yellow Book” course (Uniform Appraisal Standards for Federal Land Acquisition)
T + 1 206 292 6006
whitney.haucke@cbre.com
1420 5th Avenue, Suite 1700
Seattle, WA 98101
•Major National
Financial Institutions
•Regional Financial
Institutions
•Life Insurance
Companies
•Core Investors
•Non-Core Investors
•Private Investors
•REITS
•Attorneys
•Development
Companies
Clients
Represented
Exhibit 23
Exhibit 23
Addenda
ROBERT MANGINO
Valuation & Advisory Services
+1 2062926164
Robert.Mangino@cbre.com
WHITNEY HAUCKE
Valuation & Advisory Services
206-292-6122
www.cbre.com
CBRE VALUATION & ADVISORY SERVICES
Exhibit 23