75R - PH - RESO NECESSITY 2223 S BRISTOL

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Summary of the Basis for Just Compensation (Continued) Income Capitalization Approach: The Income Capitalization Approach is based on the capitalization of net income generated, or capable of being generated, by the subject property. The net operating income is the product of the estimated gross rental income, less allowances for long term vacancy/credit loss and various expense charges. The income/expense pro forma set forth herein is intended to reflect a typical stabilized holding period. Following is the income and expense schedule considered applicable to the subject property. Main building: 1,194 SF @ $2.60 = $3,104, Total gross annual income: $3,104 x 12 = $37,248. Vacancy and credit loss (3,0%): - 1,117. Effective gross annual income: $36,131. Annual expenses: , /SF %EG1 Real estate taxes (by tenant): $0.00 0.0% $ 00. Insurance (by tenant): 0.00 0.0% 00. Management (3%): 0,90 3.0% 1,080. Legal and accounting: 0.29 1.0% 350. Maintenance/repairs: 067 2.2% g00. $1.86 6.2% Total annual expenses: - 2,230. Net annual operating income: $33,901. ------------------- Capitalization of net income: $33,901 capitalized at 5.25% _ $645,733. Adjusted: $645,000. .Reconciliation: Value indicated by Sales Comparison Approach: $655,000. Value indicated by Cost -Summation Approach: Not applicable, Value indicated by Income Capitalization Approach: $645,000. Final Estimate of Market Value: Based on the foregoing, as well as the valuation analysis set forth in the appraiser's file, the market value of the tmencumbered fee simple interest in the subject property, in as -is condition, exclusive of non -realty fixture/equipment items, is estimated at $650,000. 75R-21