LTC 20-2002
~
CITY OF MIAMI BEACH
Office of the City Manager
Letter to Commission No. 02t/ - 02{)tJ..2-"
m
.,
,
To: Mayor David Dermer and Date: January 24, 2002
Members of the City Commission
From: Jorge M. GOnZalezJ -- ~
City Manager ~
Subject: EQUITY ONE B LDING AT 1701 MERIDIAN - LETTER UPDATE APPRAISAL
Pursuant to the Mayor and City Commission's request at the January 10, 2002 public
workshop to discuss the proposed acquisition ofthe office building and parking lot at 1701
and 1721 Meridian Avenue, the "Equity One" Building; attached please find the updated
appraisal letter provided by J. Mark Quinlivan dated January 24, 2002, reflecting no
change in the $6,050,0000 valuation.
Said letter will be included with the comprehensive analysis for your consideration with the
January 30,2002 agenda item. In the meantime, if you have any questions, I am available
to meet with you to review this transaction in more detail. Please contact me at your
convenience.
JMG\CMC\rar
F:\CMGR\$ALLIRAR\L TClEqultyOne LetlerUpdateApprelsal.doc
attachment
c: Murray H. Dubbin, City Attorney
Christina M. Cuervo, Assistant City Manager
Patricia Walker, Chief Financial Officer
~
01/24/02 09:21 FAX 3056654921
iii 002
.
.
h-
.J
OUINLIV AN APPRAISAL
A PBOPE8SIONAX. .Assoc::%Anolf
RBAL ESTATB APPa.uSE:RS Be COnut.T..uoTS
5130 S.W. 14TH SS.....~. SlnTZ 300
SoUTn MLua. Fr.oJUDA. 33143
TELBPIlONE (30:\) 663~611
FAX (3051 665-4921
T:a:01>1AS F. MAoli:N....-..... MAl
Sr~CJtB'IIPDJD GBR'ZJI.U. ~._
DZ 0000553
J. MAmr {)unrLtv..ur. MAl
SrodlOoCIamPIBD a......... _
HZ oooolla
January 24, 2002
Debora J. Turner, First Assistant City Attorney
Office of the City Attorney
City of Miami Beach
1700 Convention Center Drive
Miami Beach, Florida 33139
. Dear Ms. Turner:
In accordance with your request and authorization, I have prepared this Letter Update Appraisal
covering the following described property:
Equity One Building located at 1101 Meridian
Avenue, Miami Beach, Florida.
The purpose of this Letter Update Appraisal is to estimate the Market Value of the Leased Fee
Interest of the described property as of January 23. 2002, being the date of most recent inspection.
The original report, as referenced by our file number 01.173, had a valuation date of October 8,
2001. This Letter Update is not intended to be a stand-alone document and incorporates by reference
the original report and should only be used in conjunction with said original report. The original
report should be referred to for a description and identification of the property; definitions of value
and property interest appraised. pertinent facts about the area and the subject property; comparable
data and the results of the investigations and analyses undertaken; as well as the assumptions and
limiting conditions set forth in the valuation of the subject property.
The scope of ~s assignment entailed an updated income analysis and a sales search of the subject
market area for any new comparable land and building sales which would be pertinent to tbe
valuation of the subject property, as well as a review of the previously submitted appraisal report and
reinspection of the subject property and surrounding neighborhood to ascertain any conditions which
would alter the appraisal problem, applicable approacbes to value, the description of improvements
or the highest and best use of the subject property.
01/24/02 09:21 FAX 3056654921
IaJ 003
Debora J. Turner, First Assistant City Attorney
City of Miami Beach
January 24, 2002
Page 2
An investigation and inspection of the subject property revealed no changes in ownership or physical
condition of the building improvements. After a review of the subject neighborhood, current market
conditions and the original appraisal. the appraisal problem, approaches to value and highest and best
use analysis in the original report are still applicable.
From an extensive sale search in the area for both commercial land and office building sales, no new
sales considered comparable the subject property were located.
Related to the rental income from the subject property, the appraiser has reviewed a rent roll dated
January 8, 2002. A copy of the rent roll is attached. The rent roll indicates the following current
income and occupancy.
Anticipated Monthly Rental Income
CAM
$ 28,859.40
$ 14.977.48
Total Monthly Income
$ 43,836.88
x 12 Months
Total Annual Income
$526,042.56
Total Rentable Area
28,780 Square Feet
Occupied Area
22,189 Square Feet
Vacant
151 Floor - Retail
2nd Floor - Offices
1,350 Square Feet
5,242 Square Feet
VacaIicy Rate
22.9%
The total monthly income as of the date of the previous appraisal (October 8, 2001) was $45,469.25.
There has been a slight decline in income and a decrease in the occupancy rate since the previous
appraisal. The occupancy rate has decreased from 82% to 77.1%. While the occupancy rate has
decreased slightly in the subject building over this time period, the building owner has indicated that
he has not intentionally leased space, especially the ground floor retail space, since the City of Miami
Beach was interested in acquiring the building and eventually occupying space in the building.
01/24/02 09:22 FAX 3056654921
~004
If
\
Debora J. Turner, First Assistant City Attorney
City of Miami Beach
January 24, 2002
Page 3
According the RealData Information Services, the office vacancy rate in Miami Beach as of year end
200 I, was approximately 22% - slightly higher in older buildings. The increase in vacancy rate has
been due to the collapse of the tech companies, the events of September 11, 200 I and its aftermath
and the contraction of entertainment companies on South Beach. Vacancy rates are expected to
continue to rise as new office buildings become completed. However. the rental rates in new
buildings will be considerably higher, making Class C buildings as the subject building more
affordable.
On the positive side, interest rates are at their lowest level in two decades creating higher cash flows.
Based on the above data. it is my opinion that there has been no significant change in value from the
previous appraisal report. Accordingly, it is my opinion that, as of January 23, 2002, the subject
property has a Market Value as follows:
OFFICE BUILDING
PARKING LOT
TOTAL
$3,850,000
$2.200.000
$6,050,000
Respectfully submitted,
JMQ/vw
(Ol-173U)
,.
01/24/02 09:22 FAX 3056654921
IaJ 005
t
,
CERTIFICATION OF VALUE
~..,'""i:"~-",,,, -. .;t_,~~rr_. .,.,~.,. ,_._ ,... .' .~.. " " " ,.." ,.,,-' '" _.. . .". _;" ,'.' _ _" '. ~ . - i';':+~i~DX,._~.i:,4.-.:~,~,,;',~~_::.','..,:',':,:.':.::.:::;H:~~.';.).'~._..,~....'.:::ii::~:.'::.;':;.;:.~:.
;':t;~:;:~~;;l::~jY~;~l:.i~~:~{;?~~~~:.~~';'i~:U::;:~\;/.~:;)\,::~:j~:~;"';:,'..",; . .-.. . :. - " --.' -~ _ ._
The undersigned hereby certifies that, to the best of my knowledge and belief:
. - - '. : >~~~,~;::~~.i :-~~;,~~~,~;~~: ~~
(A) The statements offact contained in the report are true and correct.
(B) The reported analyses, opinions and conclusions are limited only by the
assumptions and limiting conditions set forth, and are my personal, unbiased
professional analyses, opinions and conclusions.
(c) I have no present or prospective interest in the property that is the subject of
this report., and 1 have no personal interest or bias with respect to the parties
involved.
(D) 1 have no bias with respect to the property that is the subject of this report
or to the parties involved with this assignment.
(E) My engagement in this assignment was not contingent. upon developing or
reporting predetermined results.
(F) The appraiser's compensation for completing this assignment is not
contingent upon the reporting of a predetennined value or direction in value
that favors the cause of the client, the amount of the value estimate, the
attainment of a stipulated result, or the occurrence of a subsequent event
directly related to the intended use of this appraisal. Furthermore, the
appraisal assignment was not based on a requested minimum valuation, a
specific valuation or the approval of a loan.
( G) The appraiser's analyses, opinions and conclusions were developed, and this
report has been prepared, in conformity with the Uniform Standards of
Professional Appraisal Practice, and the requirements of the State of Florida
for state-certified appraisers.
(H) Use of this report is subject to the requirements of the State of Florida
relating to review by the Real Estate Appraisal Subcommittee of the Florida
Real Estate Commission.
(I) J. Mark Quinlivan has made a personal inspection of the property that is the
subject of this report.
(1) No one provided significant professional assistance to the person signing
this report.
QUINLIVAN APPRAISAL
1
..
01/24/02 09:23 FAX 3056654921
IaI 006
.
(K) The reported analyses, opinions, and conclusions were developed, and this
report bas been prepared, in conformity with the requirements of the Code
of Professional Ethics and the Standards of Professional Appraisal Practice
of the Appraisal Institute.
(L) The use oftbis report is subject to the requirements of the Appraisal Institute
relating to review by its duly authorized representatives.
As of the date of this report, J. Mark Quinlivan has completed the requirements under the continuing
education program for The Appraisal Institute.
Based on the inspection of the property and the investigation and analyses undertaken, subject to the
assumptions and limiting conditions set forth in the Addendum of this report, I have formed the
opinion, as of January 23,2002, the subject property has a Market Value of:
OmCE BUJLDING
PARKING LOT
TOTAL
53,850,000
52.200.000
56,050,000
QUINLIVAN APPRAISAL
2