HomeMy WebLinkAbout014.03 - Appendix P - Appraisal report
Appraisal Report of:
Vacant Land
North 19th Ave
Bozeman, MT 59718
Prepared By:
North Coast Appraisal
PO Box 1371
Three Forks, MT 59752
Dominique M Savoie
Prepared For:
S2K/Miller Babcock LLC
Miller Properties Group LLC
4643 South Ulster St, Suite 1500
Denver, CO 80237
Attn: Mr. Kerry Nickerson
Effective Date:
April 23, 2024
Date of Report:
April 29, 2024
NCA# 20240423
April 29, 2024
NCA Ref. No. 20240423
Client: S2K/Miller Babcock LLC
c/o Miller Properties Group LLC
4643 South Ulster, Suite 1500
Denver, CO 80237
Attn: Mr. Kerry Nickerson
RE: Appraisal Report:
North 19th Land Appraisal Report
Lots 19 & 20, N 19th Ave
Bozeman, MT 59718
Dear Mr. Nickerson:
In accordance with your request, a real estate appraisal has been prepared for the vacant land currently
in two parcels zoned R-O (Residential/Office). The current zoning is scheduled to be updated by the
City of Bozeman, however, the timeline for change is not currently available. The scheduled new
zoning district is identified as B-1. A review of the proposed zoning district (B1) shows little to no
change from current zoning standards.
The purpose of this report is to provide an opinion of the market value for these two adjacent lots. The
purchasers (S2K/Miller Babcock LLC) have entered into a purchase agreement with Babcock
Downtown LLC, the sellers. There are preliminary plans included in this transaction which would
add up to 42 residential units, scheduled to be affordable housing units. The intent of the purchaser is
to “trade” this lot with plans to the City of Bozeman in exchange for additional development rights for
a project located in downtown Bozeman.
This appraisal report is for the subject site as vacant and is an acquisition loan only.
Per directions, the appraisal is limited to the AS IS market value, that is vacant site. The appraiser has
analyzed current pending projects within the immediate area and recent vacant land sales with potential
to be used for residential development.
The appraiser has obtained adequate information to complete this report in a manner that is credible
and not misleading. The accompanying appraisal report identifies the subject property and presents
the specific market data and analyses leading to the opinion of market value. The report has been
prepared with the intent to comply with the Uniform Standards of Professional Appraisal Practice of
the Appraisal Foundation.
The depth of discussion contained in this report is specific to the needs of the client and for the intended
use. The appraiser is not responsible for unauthorized use of this report.
Based upon research and analysis, subject to the assumptions and limiting conditions contained within
this report, the opinion of market value for the Subject vacant site AS IS as of April 23, 2024, is as
follows:
Market Value Effective Date Market Value
Fee Simple April 23, 2024 $1,000,000
Thank you for the opportunity to work with you on this assignment.
Sincerely,
North Coast Appraisal
Dominique M. Savoie
General Certified Appraiser
REA-RAG-LIC-690
Valid through 10/31/2025
CLIENT: S2K/Miller Properties
c/o: Miller Properties Group LLC
4643 South Ulster St, Suite 1500
Denver, CO 80237
Attn: Kerry Nickerson
INTENDED USERS: S2K/Miller Properties
APPRAISER: Dominique M Savoie
General Certified Appraiser
North Coast Appraisal
PO Box 1371
Three Forks, MT 59752
SUBJECT: Lots 19 and 20, Maple Terrace Subdivision, less highway ROW
Bozeman, MT 59718
TABLE OF CONTENTS
SUMMARY OF IMPORTANT FACTS AND CONCLUSIONS ................................................. 1
REGULATORY COMPLIANCE AND PREMISES OF APPRAISAL .................................... 10
REGIONAL ANALYSIS: SOUTHWEST MONTANA ............................................................. 18
MARKET OVERVIEW .............................................................................................................. 25
GALLATIN COUNTY APARTMENT MARKET .................................................................... 29
NEIGHBORHOOD DESCRIPTION .......................................................................................... 32
HIGHEST AND BEST USE ........................................................................................................ 35
VALUATION ANALYSIS........................................................................................................... 38
RECONCILIATION ESTIMATE OF MARKET VALUE ....................................................... 65
ADDENDA ................................................................................................................................... 66
CERTIFICATION...................................................................................................................... 67
ASSUMPTIONS AND LIMITING CONDITIONS .................................................................... 68
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SUMMARY OF IMPORTANT FACTS AND CONCLUSIONS
Property Identification Lots 19 and 20, Maple Terrace Subdivision less Hwy ROW
S01, T02S, R05E
Client:
S2K/Miller Properties
c/o: Miller Properties Group LLC
4643 South Ulster St, Suite 1500
Denver, CO 80237
Attn: Kerry Nickerson
Site Description
Address: NHN N 19th Ave
Bozeman, MT 59718
Tax Parcel #’s: RGG5850 and RGG3510
Topography: The street side is level to the street elevation. Site slopes
downward on the easterly boundary.
Utilities: All utilities are readily available in this location.
Flood Map: FEMA 30031C01816E, Zone X, April 21, 2021
Zoning: R-O (Residential Office/Mixed Use permitted).
Existing Easements: There exist public utility easements along lot boundaries.
Latitude Longitude 45.87480, -111.061740
Highest and Best Use: Residential Development land acreage sites.
Market Value
Effective Date Market Value
Fee Simple AS IS April 23, 2024 $1,000,000
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SUBJECT MAP
Regional
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SUBJECT MAP
Neighborhood
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SUBJECT MAP
Aerial
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SUBJECT PHOTOGRAPHS
Site
Street Scene
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SUBJECT PHOTOGRAPHS
Street Scene
Site
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FLOOD MAP
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SUBJECT PLAT
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SUBJECT ZONING MAP
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REGULATORY COMPLIANCE AND PREMISES OF APPRAISAL
Regulatory Requirements:
This appraisal conforms to the current Uniform Standards of Professional Appraisal Practice
(USPAP) as promulgated by the Appraisal Standards Board of the Appraisal Foundation. These
standards are addressed specifically and individually in the next subsection and Premises of the
Appraisal.
Appraisals shall conform to Title XI of the Financial Institution Reform, Recovery, and
Enforcement Act of 1989 (FIRREA) and Interagency and Evaluation Guidelines (IAEG) of Dec
2010.
Appraisals shall be written and contain sufficient information and analysis to
support the institution’s decision to engage in the transaction.
An appraisal may contain an income, cost, and/or sales approach to value. The scope of work
determines which approaches to value are appropriate. The appraisal report may be a restricted
report or appraisal report. The standard format is an appraisal report that describes the appraisal
process, and which may reference outside information or documentation. A restricted format is
an appraisal, which contains virtually no descriptions, reasoning, or analyses and is typically
prepared for a single user.
Appraisals shall analyze and report appropriate deductions and discounts for
proposed construction or renovation, partially leased buildings, non-market lease
terms, and tract developments with unsold units.
The appraisal report has been prepared for the vacant site which is an assemblage of two
adjacent legally platted lots within an approved existing subdivision. Therefore, there are no
leases to consider, no proposed construction and is not an unsold tract development. Therefore,
no discounting or deductions are applicable to this assignment.
Purpose of the Appraisal
Intended Use and Intended Users:
The intended use of this report is to determine the market value of the vacant land AS IS, vacant
raw land slated for future development. This is not a development loan but is limited to the
acquisition of the site only. The Intended User is S2K/Miller Properties LLC.
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Definition of Market Value as set forth below.
Market value means the most probable price which a property should bring in a competitive and
open market under conditions requisite to a fair sale, the buyer and seller each acting prudently
and knowledgably, and assuming the price is not affected by undue stimulus. Implicit in this
definition if the consummation of a sale as of a specific date and passing of title from seller to
buyer under conditions whereby:
1. Buyer and seller are typically motivated.
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 reflects the normal consideration for the property sold unaffected by special
or creative financing or sales concessions granted by anyone associated with the sale.
[Title 12- Coded of Federal Regulations (CFR) – Subpart C – 34.42(g);1 Jan 2005]
A certified appraiser shall perform appraisals.
Dominique M Savoie is a General Certified real estate appraiser in the state of Montana
Certification No REA-RAG-LIC-690 (expires March 31, 2025).
USPAP Compliance
The appraisal report has been prepared utilizing sound appraisal practice and adheres to and is
compliant to Uniform Standards of Professional Appraisal Practice.
Prohibited Influence (Ethics Provision)
This appraisal was prepared without pressure or undue influence in establishing a fair market
value.
Disclosure of Competency (Competency Provision)
The appraiser has appraised numerous commercial, residential, high-end residential properties,
special use buildings, partial interests, and industrial properties throughout Southwest Montana
as well as Western and Eastern Washington State. Assignments have spanned over the past thirty
years and therefore has the knowledge and experience to complete the appraisal assignment in
accordance with the Competency Provision of the Uniform Standards of Professional Appraisal
Practice of the Appraisal Foundation.
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Certification
The appraiser’s certification is found following the Reconciliation and Final Value Estimate
section of this report.
Premises of the Appraisal
Highest and Best Use
A Highest and Best Use analysis was performed on the subject property. Typically, this analysis
would be done both “As Vacant” and “As Improved”. Discussions concerning physical
possibilities, legal permissible uses, and financially feasible uses are presented to indicate the
maximally productive use of the subject property.
The subject site Highest and Best Use of the subject site is for future development. This is the
use that meets the four tenets of Highest and Best Use analysis. The most probable buyer would
be a developer for eventual resale at conclusion of site development.
At client’s direction, this appraisal report is confined and restricted to development of a market
value opinion for the acquisition of the vacant site.
Appraisal Procedures
The introductory page to each of the approaches to value outlines the general appraisal procedures
followed in each of the approaches.
Marketing Period
The subject site marketing period as reported by the listing broker was 100 days. The probable buyer
is an investor seeking to build out the lot with income producing property. Zoning provides for a
myriad variety of allowed uses inclusive of mixed use office and residential.
Exposure Time
Exposure time is concerned with market conditions in the past. Exposure time is defined within
the USPAP statement #6 as:
“The estimated length of time the property interest being appraised would have been offered on
the market prior to the hypothetical consummation of a sale at market value on the effective date
of the appraisal; a retrospective estimate based upon an analysis of past events assuming a
competitive and open market.”
The current market is currently in transition from a sellers’ market to one which is now in balance
but trending to a buyers’ market. There has been a significant increase in the inventory of
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commercial development properties. According to commercial property agents, vacant land
inventory is increasing and asking prices are being adjusted downward due to the new
subdivisions having recently been developed and approved. These new developments are located
within peripheral areas of Bozeman toward the west and northerly City of Bozeman
neighborhoods. The subject’s immediate neighborhood (core area of Bozeman) has limited to
no new lots and development of new commercial or residential units is due to development of
infill lots and/or the razing of older improvements creating available development sites.
The opinion of exposure time based upon market indicators is concluded to be 90 to 180 days.
Scope of Work (or Exclusion of Valuation Approaches)
The Sales Comparison Approach is the only applicable approach to value for this assignment and
has been utilized in valuing the subject. Neither the Cost nor the Income Approach to value is
considered applicable.
The value opinions reported in this appraisal have been derived through a review of land sales
within the greater submarket area defined as Bozeman, Montana. Land sales were reviewed,
terms of the sales were investigated, and details were confirmed. This process uses an analysis
whereby features and amenities of each sale are compared to those of the subject property.
Adjustments to the comparable sales are then applied resulting in a range of value for the vacant
subject site.
Montana is a Non-Disclosure State
Montana is a non-disclosure state meaning that there is no central clearing house for review of
closed sales. This results in many sales not being transparent, that is sale prices etc. are not
available to market participants for review. All sale data is controlled by the State Revenue
Department via a Real Estate Transfer Form. The data contained within this form is available
only to State of Montana Department of Revenue and is not available to appraisers in the normal
course of business.
Therefore, while there may well exist additional closed sales, due to not being able to
independently confirm the sale details, these were not included in this appraisal report. Only those
sales which were advertised for sale using the available multiple listing services in Montana were
depended upon to provide this opinion of market value.
Identification and Description of the Real Estate Appraised
The subject is comprised of two side-by-side individual lots, zoned RO (Residential/Office)
situated along North 19th Ave, a major gateway from the interstate to downtown Bozeman.
Zoning is slated to be updated to B1 (Neighborhood Mixed Use). The imminent change in zoning
timeline is not available due to revisions being made to the city-wide zoning code updating. After
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reviewing and comparing the existing zoning (RO) and the proposed zoning (B1), the
development standards overlap with marginal differences noted.
The two lots were offered for sale together and included preliminary plans for a 42-unit apartment
building .
The site is rectangular and is served by North 19th Ave on the westerly boundary.
Legal Description
The subject’s abbreviated legal description is as follows:
Maple Terrace Subdivision, S01, T02S, R05E, Block A, Lots 19 and 20, less Hwy ROW.
Current Ownership and Property History
The current offering (MLS#388084) was placed on the market for $1,100,000 and was on market
for 100 days. This offering includes both lots together as an assemblage. The offering also
includes preliminary plans for up to 42 residential units designed for either transitional or
affordable housing (a mix of studios and one-bedroom units). The contract to purchase is a
Purchase Option Agreement with a pending option price of $1,000,000. The Optionee shall pay
the owner $5,000 deposits monthly which shall apply to the purchase price if purchased. The term
of the option agreement is 12 months but can be extended up to 18 months if an extension is
necessary.
The two lots were previously purchased by Babcock Downtown LLC on August 1, 2022
WD#2782299 bundled together for one purchase from Altaya Properties LLC. They were
however, originally listed for sale individually as follows:
Lot 19 was placed on market on 09/20/2021 for $589,000 with a price reduction noted to
$499,000. Big Sky Country MLS#362538 as a commercial lot offering and was cross listed as a
residential development site Big Sky County MLS #361772. The sale required 208 days on the
market before being placed under contract and sold for $462,500.
Lot 20 was also placed on market on 09/20/2021 for $589,000 with a similar price reduction to
$499,000 and was cross-listed commercial/residential. (Big Sky Country MLS #362450 and Big
Sky Country MLS #361770. The sale required 206 days on the market and sold for $462,500.
A single contract was negotiated on 03/08/2022 for $875,000 for both lots together with a closing
scheduled by September 1, 2022. The purchase price was amended upwards to $925,000 for both
lots ($462,500 each) with the down payment becoming non-refundable after May 15, 2022.
There was also an additional previous transfer noted for both lots, each having separate closing
dates, contract price and listings.
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Lot 19 was placed on market on 02/28/2020 for $250,000 which resulted in an offer to purchase
on 09/04/2020. The negotiated purchase price was $222,500 with a closing noted on 11/10/2020.
WD# 27089138/Big Sky Country MLS #342580.
Lot 20 was also offered for sale on 02/28/2020 for $250,000 going off market on 06/26/2020
closing on 08/31/2020 for $220,000, WD# 2697906/Big Sky Country MLS #342572, 119 DOM.
These two lots were purchased from the same seller/Carolyn Hubbard and were purchased by
Altaya Properties LLC. The total price paid for both lots was $442,500. Travis Ballenger, the
buyer’s agent, was interviewed and asked why the lots were being resold soon after acquisition.
The agent responded that the purchasers had changed their investment model and had other
projects that they wanted to concentrate efforts on.
These were pre-covid purchases.
No other prior sales were noted over the previous thirty-six months.
Real Estate Taxes & Assessments
Lot 19, Maple Terrace Sub 2023 Real Estate Taxes $4,241.04 on an assessed value of
TPN# RGG3510 $454,751.
Lot 20, Maple Terrace Sub 2023 Real Estate Taxes $4,241.04 on an assessed value of
TPN# RGG5850 $454,751.
Real estate taxes may be estimated (billed out in November) by use of the following formula:
Market/Productivity Value x Tax Rate = Taxable Value
Taxable Value x 2023 Mill Levy = 2023 Property Tax Amount
These real estate tax assessments are both for vacant land only.
Copies of the tax bills for each of these two lots have been included as an addendum. It is noted
that both tax bills show a tax liability of $4,094.07. The higher tax liability noted above reflects
the State of Montana requiring additional real estate tax payment for state school levies. The tax
bills do not reflect this recent increase.
Last year was the scheduled bi-annual tax assessment period for residential and commercial
properties across the state. Most properties experienced increases in tax liability of 30 to 40%
which reflected the high appreciations in market value noted during and following Covid-19 in-
migration to state.
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Date of Values/Date of Report
The effective date of this report is April 23, 2024 while the date of the report is April 29, 2024.
Scope of the Appraisal
The value opinions reported in this appraisal were arrived first through analysis of the regional
market that encompasses the subject. This view discusses the regional economic and
demographic forces that influence real estate values. Current and historical employment levels
and migration data are analyzed to evaluate population growth, household income levels, and the
overall economic condition of the region.
A neighborhood analysis has been included which conveys locational influences, including
districts and access to and from them, local zoning ordinances, and surrounding land uses.
The subject property was visually observed for the purposes of determining site considerations.
A site analysis of the subject property is described to offer a conclusion of the physical utility of
the site for possible redevelopment. There was no Phase 1 environmental report forwarded to the
appraiser.
A Highest and Best Use analysis was performed on the subject property. Typically, this analysis
is applied to both “As Vacant” and “As Improved”. Discussions concerning physical
possibilities, legal permissible uses, and financially feasible uses are presented to indicate the
maximally productive use of the subject property. The appraisal report has been prepared with
the subject in the current “as is” basis which for purposes of analysis has been concluded to being
the subject’s highest and best use.
The Income Approach to value is not considered applicable to this assignment.
In the Cost Approach to value, the replacement value if improved of the subject with the aid of
Marshall & Swift, a nationally recognized publication, for our hard costs, which is then added to
the cost of acquiring land has been utilized. Since this is a vacant land appraisal, the Cost
Approach to value is not applicable to this assignment and has also not been included or prepared.
In the Sales Comparison Approach, the analysis has reflected the actual price purchasers in this
marketplace are paying for vacant undeveloped sites to indicate what the subject should sell for.
Vacant sites ready for vertical construction were utilized as comparable properties.
Those sale comparison properties were visually inspected, and all data confirmed with buyers,
and/or sellers (or their representatives) of each property by Dominique M. Savoie, appraiser of
record.
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Prior Services
The appraiser has provided services as appraiser regarding the property that is the subject of this
report within the three-year period immediately preceding acceptance of this assignment. The
client was made aware of this previous assignment prior to the appraiser accepting the
assignment.
Assumptions and Limiting Conditions
See Addendum.
Personal Property
No value for any personal property has been included in this valuation.
Reconciliation
The reconciliation process places weight on the appropriate approach to value to provide a market
value opinion for the subject property. Since there is only one approach applicable to this
assignment, reconciliation is not applicable.
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REGIONAL ANALYSIS: SOUTHWEST MONTANA
Overview
The Regional Analysis studies pertinent economic and demographic forces that shape the
marketplace. Historical, current, and anticipated economic and demographic trends are
discussed. This analysis provides a foundation from which market forecasts can be made.
No discussion of the region would be complete without understanding that Montana is one of the
least populated states ranking 44th but is ranked 4th in size. This results in a population density
ranking of 46th in the nation. Therefore, most of the state is rural with vast areas separating the
state’s major metropolitan areas. Most of the state’s population is concentrated in five cities:
Billings, Missoula, Great Falls, Butte and Bozeman.
The Southwest Regional area is comprised of 8 counties.
This analysis begins with a determination of the boundaries that encompass those homogenous
geographic and economic factors that distinguish the subject region from any others. For the
purposes of this analysis, the whole of Gallatin County is considered applicable.
The subject is located within Bozeman, Gallatin County, Montana city limits. Gallatin County
is comprised of 2,606 square miles and includes four mountain ranges and 82 miles of “blue
ribbon” rivers. Gallatin County includes only five incorporated city/town areas: Belgrade,
Bozeman, Manhattan, Three Forks, and West Yellowstone. The incorporated area of Gallatin
County accounts for upwards of 64% of the population with the remainder located in rural
neighborhoods. The county population is currently reported as being 111,876 of which 46,596
reside within the city of Bozeman.
The City of Bozeman is the commercial, financial, and cultural center for the county, is the county
seat and also is home to Montana State University. Bozeman is located in what is known as
Southwest Montana and is located approximately 90 miles north of Yellowstone National Park,
with four ski areas notably Big Sky and Moonlight Basin, “blue ribbon” trout fishing, rafting, and
other activities. Agriculture still plays a dominant role in the Gallatin County economy with the
County Sq Miles Population Growth Since 2010 Density Unemployment
Gallatin 2,634 111,876 24.79% 42.47 2.40%
Park 2,813 16,736 7.28% 5.95 4.00%
Jeffeson 1,659 12,097 6.04% 7.29 3.70%
Beaverhead 9,404 5,543 1.61% 0.59 3.30%
Madison 8,768 3,603 13.91% 0.41 3.40%
Meagher 1,866 2,395 -0.64% 1.28 3.30%
Sweetgrass 3,710 1,862 2.49% 0.50 2.90%
Broadwater 6,085 1,238 8.04% 0.20 4.00%
Total 36,939 155,350 7.94% 7.34 3.38%
Southwest Montana Regional Characteristics
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area surrounding Manhattan/Amsterdam reportedly the largest supplier of seed potatoes in the
nation.
The Bozeman Yellowstone International Airport provides direct access to the area with non-stop
travel available from most airline hubs throughout the nation. Non-stop flights are available from
Seattle, San Francisco, Los Angeles, Salt Lake City, Denver, Houston, Atlanta, New York,
Chicago, and Minneapolis.
The purpose of this section is to review and discuss the various regional forces that influence real
estate values. These forces relate primarily to demographic and economic trends.
Economic Trends
Economic trends are among the most critical determinates of real estate values because
they have a direct impact on population growth and general economic wellbeing.
Principal economic criteria include the economic base of an area and the distribution of
the work force in the various economic sectors.
Economic Base
The economic base of an area may be viewed both by a summary of its major employers and by
an analysis of the various kinds of employment in the area. Because the economic impact on this
market is most linked to the Gallatin County economic base, these tabulations reflect Gallatin
County only.
According to the U.S. Census Bureau, the following table lists the types of employment by
percentage of the areas Gross Domestic Product.
Type %
Agriculture 6
Mining 7
Federal Government 9
Manufacturing 9
Construction 14
Accommodation and Food Services 16
Trade Center-Retail 19
Montana State University 20
The economic base of an area may be viewed both by a summary of its major employers
and by an analysis of the various kinds of employment in the area.
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The following table lists the major employers in Gallatin County. This table illustrates
the importance of Montana State University as well as other government institutions as
being the main source of employment within the county.
Since Montana State University is a driving force in the Gallatin area employment, the fate of the
local economy is strongly influenced by the performance of the university. Montana State
University is a land grant university which was established in 1893. Undergraduate enrollment
for 2022-2023 is forecast to be 16,841 with Montana residents making up 53% of the freshman
class. MSU is recognized for its research with well over $121 million available and spent per year
which represents a 21% increase over the prior year. Major Fields of research are immunology,
chemistry, optical technology and biochemistry, physics, transportation, land resources and
environmental sciences.
Noteworthy employment characteristics for Bozeman and surrounding Gallatin County are the
number of start-up companies. Bozeman is credited as being ranked first in the nation in terms of
start-ups per capita.
Major Employers Employees
Montana State University 3,500
Bozeman Health 2,400
Bozeman Public Schools 1500
Oracle 250
Gallatin County 640
City of Bozeman 550
Wal-Mart 440
Martel Construction 325
Anchor Gaming 300
Black Hawk Accessories 300
Zoot Enterprises 300
McDonalds 256
Costco 200
Kenyon Noble 170
Simms Fishing Equipment 150
Mystery Ranch Backpacks 140
Universal Athletic 140
Murdochs 120
Capitol Opportunity 110
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There is also a strong manufacturing sector with Simm’s Fishing Equipment leading the pack
followed closely by Mystery Ranch Backpacks, West Paw, to name but a few. Statewide, the
manufacturing sector has added 3,500 jobs from 2010 through 2019, a 21% growth rate as
compared to the national growth rate in manufacturing jobs of 6%.
There is also a strong High-Tech sector which began in 1990 with the creation of Zoot
Enterprises, an international leading provider of credit decision making and loan origination
solutions for large financial institutions. Like many high-tech startups, its origins were in a
basement where founder Chris Nelson created products that could access through dial-up
connections with major credit bureau data bases and created a standardized credit report for
lenders. Now located in Bozeman, founder Chris Nelson reports that attracting top talent is easy
due to lifestyle and recreational amenities available in the Gallatin Valley.
In 2000 RightNow Technologies moved to Bozeman from the East Coast for the enhanced
lifestyle Bozeman offers. RightNow Technologies provided cloud-based customer service and
was a privately held corporation grossing $248 million a year. In October of 2011, RightNow
Technologies was acquired by Oracle reportedly for upwards of $1.5 Billion.
Since this corporation was privately held with employees owning stock options this sale produced
overnight millionaires not unlike the early Microsoft days. Several former RightNow
Technologies employees have since created additional high-tech start-ups in Gallatin Valley.
Oracle has continued to expand the local 480-person workforce.
In addition to these two notable tech companies, there are over two dozen laser-optics firms
located in the Gallatin Valley, many of which are innovative research and manufacturing firms.
The dominance of this photo-laser industry in Gallatin Valley is a direct offshoot of graduate
programs at MSU.
Pharmaceutical firms such as Takeda (vaccine producers for norovirus) and Microbion
Biosciences (leader in combating MERSA) each have a strong presence in the valley.
An arms accessory company, Black Hawk is located in nearby Manhattan and with a work force
of over 110 persons, manufacture weapons accessories sold world-wide.
No discussion regarding Gallatin County is complete without mention of Yellowstone National
Park. Yellowstone National Park (YNP) was established and signed into law by Ulysses S Grant
in 1872 and is located 90 miles south of Bozeman. The park is a primary tourist attraction to the
area with over 3,513,483 visitors in 2014 with overall spending of $421,003,800. Gateways to
YNP are located in Gallatin County (West Yellowstone), Park County (Gardner) and in Wyoming
(Cook City). Thus, the economic impact is shared between all three areas. However, due to ready
access to Yellowstone National Park from Gallatin Yellowstone International Airport, many
visitors travel to and from the park via Bozeman adding to the accommodations and
restaurant/retail income. There are 6,662 jobs directly attributed to YNP and total economic
NORTH COAST APPRAISAL NCA 20242423 22
output is estimated at $543,732,500. This is a driving force to the region’s economy and health
of the accommodations sector.
The following table details employment growth patterns in the Gallatin County area from 2000
to 2021.
As shown above, the region has experienced strong employment since 2000 and experienced
much lower unemployment rates than the national average. A review of data by employment
sector follows:
Year Population # Employed New Jobs New Persons Persons/Job Marginal New
2021 122,713 72,116 5,218 3,753 1.70 0.72
2020 118,960 66,898 (856) 4,526 1.78 -5.29
2019 114,434 67,754 2,569 2,558 1.69 1.00
2018 111,876 65,185 2,451 4,066 1.72 1.66
2017 107,810 62,734 2,489 3,738 1.72 1.50
2016 104,072 60,245 2,623 3,738 1.73 1.43
2015 100,334 57,622 2,760 3,026 1.74 1.10
2014 97,308 54,862 3,444 2,614 1.77 0.76
2013 94,694 51,418 3,213 2,080 1.84 0.65
2012 92,614 48,205 1,727 1,237 1.92 0.72
2011 91,377 46,478 1,161 1,864 1.97 1.61
2010 89,513 45,317 (46) (155) 1.98 3.37
2009 89,668 45,363 (3,938) (156) 1.98 0.04
2008 89,824 49,301 164 2,581 1.82 15.74
2007 87,243 49,137 1,038 2,873 1.78 2.77
2006 84,370 48,099 2,955 3,699 1.75 1.25
2005 80,671 45,144 2,149 3,263 1.79 1.52
2004 77,408 42,995 1,550 2,719 1.80 1.75
2003 74,689 41,445 948 2,722 1.80 2.87
2002 71,967 40,497 127 1,797 1.78 14.15
2001 70,170 40,370 256 2,339 1.74 9.14
2000 67,831 40,114 - 67,831 1.69
Bureau of Labor Statistics, US Census
NORTH COAST APPRAISAL NCA 20242423 23
There is a dependence on the construction and real estate market which renders Gallatin County
especially vulnerable to availability of funds, interest rate fluctuations or changes in demand and
buying patterns in real estate. Real estate markets are historically volatile with buying patterns often
affected by national trends, long term mortgage interest rates and during the Great Recession and
periods following, funds un-availability. Current increases in employment can be directly linked to
an increased in-migration rate. New construction starts are now well above 2007 levels throughout
the region with pending sales activity up, low inventory especially in existing homes and multiple
offers on homes becoming more common.
Description 2014 2015 2016 2017 2018 2019 2020
Employment by place of work
Total employment (number of jobs) 75084 78596 82161 85768 89219 91356 89376
By type
Wage and salary employment 53299 55997 58537 60939 63264 65819 64393
Proprietors employment 21785 22599 23624 24829 25955 25537 24983
Farm proprietors employment 980 985 980 965 961 958 959
Nonfarm proprietors employment 2/ 20805 21614 22644 23864 24994 24579 24024
By industry
Farm employment 1308 1334 1333 1345 1303 1318 1296
Nonfarm employment 73776 77262 80828 84423 87916 90038 88080
Private nonfarm employment 63755 67255 70591 73993 77326 78957 77237
Forestry, fishing, and related activities 678 637 650 650 638 645 687
Mining, quarrying, and oil and gas extraction 647 605 568 587 477 505 454
Utilities 107 118 122 127
Construction 6811 7351 8100 8574 8960 9157 9508
Manufacturing 3421
3660 3983 4126 4124 4234 4226
Wholesale trade 1978 2142 2070 2156 2263 2236 2245
Retail trade 8985 9421 9724 9826 10123 10230 10068
Transportation and warehousing 1648 1715 2028 2288
Information 859 932 1040 1109 1183 1155 1129
Finance and insurance 2513 2648 2715 2795 3076 3109 3176
Real estate and rental and leasing 5488 5826 6227 6609 7018 6777 6705
Professional, scientific, and technical services 6612 7081 7350 7801 8230 8447 8709
Management of companies and enterprises 280 316 340 322 374 388 379
Administrative and support and waste management and remediation services26702827 3116 3384 3554 3826 3718
Educational services 1435 1427 1421 1537 1612 1654 1674
Health care and social assistance 5807 6146 6429 6808 7026 7186 7162
Arts, entertainment, and recreation 2898 2836 2942 2925 3185 3321 2953
Accommodation and food services 7341 7762 8070 8533 8755 9021 7681
Other services (except government and government enterprises)3577 3805 3945 4101 4425 4532 4348
Government and government enterprises 10021 10007 10237 10430 10590 11081 10843
Federal civilian 602 578 587 578 574 587 635
Military 475 483 492 495 487 495 497
State and local 8944 8946 9158 9357 9529 9999 9711
State government 5925 5867 5979 6123 6207 6654 6400
Local government 3019 3079 3179 3234 3322 3345 3311
Employment by Sector Gallatin County
NORTH COAST APPRAISAL NCA 20242423 24
Demographic Trends
Demographic trends pertain to changes in population size as well as changes in the
characteristics of a population.
To follow, we will review the recent population growth for Gallatin County.
Population Trends
Gallatin County has experienced positive population growth for the past 20 years with two
years of declining population following the Great Recession of 2008.
Modest job growth patterns following the Dot Com bust of 2000 and 2001 which were
coupled with more modest population gains, once again demonstrate the strong correlation
between job growth and population growth.
Population is measured as of July 1st of the respective year.
The annual rate of population growth has been demonstrated to be highly linked to the rate of job
formation in the region. Since 2000, the region’s population has expanded from 67,831 to 122,713
at an average annual rate of 2.78%.
Regional Analysis Conclusion
As discussed on the previous pages, the Gallatin County market is strongly influenced by its
predominant public sector employment which has tended to produce relatively stable economic
conditions. In recent years, the market's reliance on in-migration has led to an expanding
population and the emergence of a strong Residential and Retail Trade sector.
NORTH COAST APPRAISAL NCA 20242423 25
MARKET OVERVIEW
The Bozeman and Belgrade market area are the primary urban centers in Southwestern Montana.
There are no reliable data sources with which to develop an in-depth market size analysis or retail
vacancy rates. Local brokers and market participants were interviewed, and vacancy rates
discussed with area landlords in developing this analysis.
Bozeman is one of the nation’s leading small urban centers in the nation and has enjoyed an
annual growth rate of 3.7% over the past twenty years.
Due to a diverse economy, the area was not as highly impacted by the effects of the Great
Recession, however, the demand for office and retail space softened noticeably. This was further
impacted by recently added space that was not absorbed during the national economic downturn
which translated to an over-supply.
The vacancy rates are estimated to be 8% in the office sector and 7% in the retail sector. Market
rental rates are in the $30 to $40 per square foot per year for Class A office space but have
softened noticeably to $15 to $25 for Class B space.
Warehouse demand had weakened dramatically from 2008 through 2012 due largely to the
decline in new housing construction. Much of the warehouse space had been occupied by small
local contractors and sub-contractors related to the construction industry. During the period
between 2003 to 2008 new warehouse space (warehouse condominiums) was added at a high rate
and sold to small contractors who were willing to buy a space to ensure a relatively stable cost
vs. face increasing rental rates. Prior to this period, small warehouse space was relatively rare,
and many contractors viewed this lack of inventory as an opportunity to expand and become
landlords or space owners. When demand for housing dissipated in 2008/2009, these small
contractor/landlords went out of business and relinquished these spaces to area banks. This
market segment has recently absorbed most if not all REO inventory and has for all intents and
purposes rebounded, recapturing most if not all losses incurred during the Great Recession. The
area is now showing marked increases in rental rates with a low inventory of available products
and higher demand. Most if not all lessor concessions (free rent, limited escalation clauses, short
lease terms) are negligible to non-existent.
Development land in all sectors has also improved.
Low/SF High/SF
Office $19.51 $35.00
Retail/Commercial $6.50 $38.29
Residential Development $12.00 $46.00
Downtown Area $43.50 $189.00
Development Land
NORTH COAST APPRAISAL NCA 20242423 26
The figures below include residential starts reported through HUD. This data may not reflect all
new residential development as there are no building permits required in un-incorporated Gallatin
County. However, the area does require electrical permits and this data is dependent upon the
state issued electrical permits. There has been a noted surge in multi-family development within
this area during the past three years when compared to the prior seventeen years. Notable and
likely due to low single family residential supply.
Readily apparent is the decline in new home construction from the high noted in 2006 vs. 2011
during the Great Recession and the recent resurgence in the new home market to near the pre-
boom (2005) levels. In 2005, there were 905 new units added to the market while in 2020, 945
units added. Again, the data above is as reported by HUD, and one must recognize that these
permit numbers may not include all new construction in the area due to no countywide permit
process. Despite this, the data does provide a positive trend through mid-2022.
A review of property sales of average quality/medium sized homes in the City of Bozeman
between 1,200 sf and 2,000 sf without basements, built between 2018 and 2024, the median sales
prices have increased 104%. On a per square foot basis, the median sale price paid went from
Year Total SFR All MF 2 Unit 3 to 4 Unit 5+ Units
2022 1868 978 890 68 141 681
2021 2116 920 1196 116 131 949
2020 945 211 724 64 106 564
2019 834 254 92 50 18 24
2018 838 261 577 70 160 347
2017 822 403 419 112 105 202
2016 738 373 365 72 72 221
2015 780 287 493 62 40 391
2014 671 295 376 70 43 263
2013 952 432 520 14 47 459
2012 439 285 154 22 11 121
2011 197 164 33 8 8 17
2010 208 164 44 4 4 36
2009 178 82 96 2 30 64
2008 261 132 129 28 56 45
2007 786 289 497 86 90 321
2006 651 303 348 66 147 135
2005 903 341 562 136 215 211
2004 843 328 515 118 162 235
2003 606 344 262 90 53 119
Housing HUD Permits- Gallatin County
NORTH COAST APPRAISAL NCA 20242423 27
$215.84 in 2018 to $404.22 per square foot in 2024. Most noteworthy was market activity during
2021 and 2022; years impacted by the global Covid-19 pandemic.
The local markets were heavily impacted by Covid Refugees escaping mandates and wanting
naturally occurring social distancing as well as limited local governmental involvement in private
life.
Evident is the abatement of the high annual appreciation rates observed during the height of
Covid-19 refugee in-migration to current modest gains 2024 year to date.
Examining the most recent three-month period from the beginning of January 2024 to present
exclusive of luxury homes, the average quality home has appreciated by 0.59% over 4 months or
1.77%. annually, far below current inflation rates.
Interest rate increases now mirror those experienced during the early years of the oil embargoes
(1973-1975). The current average 30-year conventional mortgage rate of 7.31% is up slightly
from February of 2024. A review of average 30-year mortgage rates since 1971 is 7.76%.
Year #Sales Median SP DOM Price/SF
2018 222 404,950$ 39 215.84
2019 186 435,000$ 26 232.45
2020 195 485,000$ 15 256.05
2021 118 650,000$ 5 342.12
2022 82 757,000$ 6 403.59
2023 83 737,770$ 7 401.85
2024* 16 740,984$ 18 404.22
* YTD
Data Extracted from Big Sky Country MLS City of Bozeman
33.61%
17.97%
-0.43%
0.59%
Single Household Residential Appreciation Rates
Annual App Rate
8.77%
7.70%
10.15%
NORTH COAST APPRAISAL NCA 20242423 28
Conclusion
As discussed on the previous pages, the Gallatin County market is strongly influenced by its
predominant public sector employment which has tended to produce relatively stable economic
conditions. In recent years, the market's reliance on in-migration has led to an expanding
population and the emergence of a strong Residential and Retail Trade sector.
There has been a noted downturn in transaction rates reflecting the rising interest rates and
continuing issues with inflation rates which have functioned as a deterrent to entry into the real
estate market. This will likely continue until such times as the inflation rates abate at which time
funding or mortgage rates may improve. In recent years, the market's reliance on in-migration
has led to expanding population and the emergence of a strong local economy. Covid-19 has
certainly impacted on our local markets, which prior to Covid-19 were expanding and
appreciating at a 0.5% per month rate.
In closing, the general area appears to have entered a period of market adjustment with some
pockets of the market starting to show declines in asking prices and correlating declines in sale
prices. Seller concessions are beginning to become more common with interest rate buydowns
being most common. The area’s high end sub-market is dependent upon national economic trends
and is not dependent upon local market trends since the dominant buyer is a non-Montana resident.
Year Infl Rate Mtg Rate
2012 2.07 3.66
2013 1.46 3.98
2014 1.62 4.17
2015 0.12 3.85
2016 1.26 3.65
2017 2.13 3.99
2018 2.44 4.54
2019 1.81 3.94
2020 1.23 2.95
2021 7.00 6.71
2022 6.50 7.95
2023 3.40 7.32
2024 3.40 7.31
*FreddieMac Data
NORTH COAST APPRAISAL NCA 20242423 29
GALLATIN COUNTY APARTMENT MARKET
Overview
The subject is located in the city of Bozeman, the county seat and prime economic center of
Gallatin County and surrounding Southwest Montana (Gallatin, Park, Madison, and Jefferson
Counties).
Recent History
The apartment market appears to be turning positive after the economic downturn that negatively
impacted the single-family housing market in the Gallatin County Market. Vacancy rates overall,
are at an all-time low since recovery in the local real estate market began in early 2013.
New apartment development which had been limited by the difficulty of obtaining financing has
improved greatly with private financing taking the place of larger lenders. Since the market shift
in late 2007, lending institutions had tightened their underwriting guidelines while equity
requirements had also increased. Private equity firms have become very selective but are willing
with higher equity participation to extend credit in high demand neighborhoods. Because there
were relatively few new apartment buildings built during the market collapse (between 2007 and
2013), there exists a pent-up demand for rental housing. Several property managers report
vacancy rates nearing 0% with new inventory quickly meeting or exceeding stabilization. Older
developments still report vacancy rates of under 2%.
In the next six months, market participants believe that vacancies should continue to decline,
rental rates will also continue to increase at rates estimated to be +5% annually. Rent concessions
which are presently negligible will continue to be a non-factor, and hopefully, the restraints on
lending will continue to improve. Affordability of the apartment market is questionable with
many renters moving to Belgrade where rental rates are lower. However, this may well be a
short-term strategy as rental rates in Belgrade (once considered a sub-par rental market area) have
increased to the point of being quite similar to the Bozeman submarket area.
Vacancy
Historical Vacancy
There is limited data available from which to develop a reliable historical vacancy rate in the
broader market area of Gallatin County. During the course of our interviews with area apartment
managers, the appraiser was unable to find a reliable published source that could provide us with
a historical vacancy rate for any part of Gallatin County. We investigated the 2000 Census, the
2010 Census, the 2020 Census, and the American Community Service etc. These reported
vacancy rates in relation to all rentals which included single family homes as well as duplexes,
two-to-four-unit housing and apartment dwellings. The median vacancy rate for renter occupied
housing was 5.3% while the owner-occupied median rate was reported to be 2.8%. On a year-
by-year basis, these rates fluctuated in excess of 6% from a low of 2.4% to a high of 8.4%.
NORTH COAST APPRAISAL NCA 20242423 30
We could not extract a meaningful or reliable historical data from these sources. Instead, we
relied upon interviews with a number of area managers who were willing to report their vacancy
rates during the previous five-year cycle. Each firm reported that the rates fluctuated throughout
the year but that apartment vacancies had declined over the past two years in response to
increasing demand from those who had recently entered the rental market due to foreclosure or
due to not being able to meet the more stringent qualification guidelines for home ownership.
Rising market values for single family homes which have increased +20% over the past year has
also hampered home ownership entry due to higher down payment requirements and lack of
affordability.
Our office then conducted a current vacancy survey applicable only to market rate apartments in
Bozeman area during April of 2024. This market rental survey indicated an apartment vacancy
rate for Bozeman of 3.0%. This rate is slightly higher than past years reflecting the availability
of new apartments located in the peripheral Bozeman and Belgrade submarket areas.
During the past nineteen years, there were 6,206 multi-family units added to this market vs. 4,948
new single-family dwellings. Most of these units entered the market as five plus units as opposed
to small income properties (2 to 4 units). The multi-family development rate in the over five
units per complex segment represented 61% of new multi-family development.
Historical Apartment Demand Analysis
Historical demand for apartment housing can be evaluated on the basis of three separate
indicators: a) new unit absorption, b) the incremental change in occupied units (or direct
demand), and c) through the estimation of demand implied indirectly through market balance.
The following discussion details a review each of these indicators.
New Unit Absorption: This indicator of demand reflects historical absorption data for newly
built apartments in the market. Due to the anticipated growth at Montana State University in a
market which is already displaying low inventory and high demand, new unit absorption of 500
units appears supportable.
New unit absorption for all new multi-unit projects completed from 2003 to 2020 has averaged
446 units annually or 37 units per month. Based on the current vacancy and absorption rates of
projects in the Gallatin County market, absorption rates of between 30 and 40 units per month of
new apartment units is realistic.
Direct & Implied Demand: The second and third methods of demand estimation provide a
more theoretical perspective on the market's changing need for rental housing. These methods
are useful in that they tend to ignore the short-term influence that new construction activity has
on absorption patterns and, instead, estimates the market's requirements on the basis of a)
changes in overall occupancy (Direct Demand) and b) as necessary to produce "balanced" market
conditions of 5% vacancy (Implied Demand). Since the subject project is an existing project that
is at stabilized occupancy, this portion of the analysis is not considered applicable.
NORTH COAST APPRAISAL NCA 20242423 31
The marginal tenure rate reflects that percentage of new households created that would choose to
rent rather than purchase. Considering the decline in new single-family development due to rising
values and unaffordability due to higher mortgage rates, the ratio of apartment or multi-unit
development in 2003 to 2022 increased to 42.46% of all new building permits.
New household creation in this market area would initially enter the rental market and later
transition to home ownership. Entry level purchasers (young professionals, new college
graduates etc.) are now entering the market hampered with increasing debts and declining
incentives for home ownership. Vacancy rates can and do vary but due to the lack of a published
vacancy rate, we believe that the most accurate survey is our own conducted through on-site field
interviews and telephone interviews. It must be noted that this market area is dominated by a
disproportionate number of smaller complexes, 24 units and under in size, thus, even a single
vacant unit per complex results in a higher vacancy rate.
NORTH COAST APPRAISAL NCA 20242423 32
NEIGHBORHOOD DESCRIPTION
Community Description
The subject property is located along the gateway access between I-90 and downtown Bozeman. The
19th Ave Exist off I-90 is a primary corridor and reports 24,000 Average Daily Traffic. This is a
prime development area.
Neighborhood Identification
The subject neighborhood is considered a prime commercial gateway corridor with high daily traffic
counts and high demand for commercial development. Any vacant sites within this corridor offer
multiple development opportunities with many vacant sites recently having been acquired and ready
for development.
Terrain throughout most of the neighborhood is considered level.
Access, Location, and Infrastructure
The City of Bozeman has been instrumental in and supportive of additional development within this
defined corridor as it will limit urban sprawl and concentrate retail, office, and commercial
development. .
Utility service includes electrical service and natural gas from North West Energy and public utilities
such as water, sewer and trash are available from the City of Bozeman.
Development History and Trends
See market trends analysis.
Immediate Vicinity
Neighborhood development is mixed with retail, office, professional medical/dental offices, mixed
use being predominant development with national chain box stores located in larger retail shopping
centers.
Conclusions
The subject neighborhood is expected to remain a desirable location for a myriad of users in this
market area based largely on projected population increases and a growing local economy. The long-
term value trend for the subject property and other properties throughout the neighborhood is positive.
NORTH COAST APPRAISAL NCA 20242423 33
SITE DESCRIPTION
Location
The subject site lies adjacent to North 19th Ave. The immediate surrounding neighborhood of the
subject consists of mixed retail, office, and residential development to the south and north of the
subject. The subject’s surrounding land uses consist of the following:
Adjacent Land Uses
North: Mixed use office on main level and residential on upper levels.
South: Medical offices/second level office development.
East: Residential Developments
West: Office/medical/veterinary/retail development.
Shape and Area
The site is considered rectangular. Measurements are:
200’ x 125’ = 25,000 sf
Access
The development of the two side-by-side lots will likely be a shared access cut into North 19th Ave due
to the location being within 200 feet of a major intersection. As such any future development will share
a single access.
Streets
The access road is a four-lane with turn lanes arterial avenue. Sidewalks, curbs, and gutters are currently
in place.
Topography
The subject development site is level on the westerly boundary and slopes away down to the back or
easterly boundary. This is reported to have been developed with fill.
Soils Conditions/Contaminants
No soils analysis was provided to the appraiser. It appears the site has adequate soils with normal drainage
patterns and sufficient soil-bearing qualities to support the improvements. This statement, however,
carries with it no expressed or implied warranty as to soils conditions or structure-supporting capabilities.
Any questions regarding soils conditions should be answered by a competent soils engineer.
NORTH COAST APPRAISAL NCA 20242423 34
Hazardous Waste
No environmental report was provided for review. The analysis reveals no environment hazardous
conditions. However, as appraisers, we have no expertise in the detection or identification of hazardous
waste, or in determining its impact on the property. This appraisal assumes there is no hazardous waste
contamination. If the site and/or improvement are found to be contaminated, our appraisal conclusions are
invalid.
Floodplain
The subject site lies outside flood hazard areas and is located in a Zone X area on map 30031C0861E
dated 04/21/2021.
Utilities
Available in the general area. Access to sewer and public water, electrical, phone and DSL is available to
the site.
Easements, Encroachments and Restrictions
A review of the title was undertaken. There were typical utility easements noted as well as one trail
easement which provides access to the areas’ city to mountain public foot trail system.
The purpose of this appraisal assignment is to provide a “market value” opinion of value for the subject.
Title to the subject is assumed to contain no undiscovered deed restrictions, adverse easements, or
encroachments and that the subject has a free and clear title.
Zoning
Most of the subject site is within the City of Bozeman. The site is zoned R-O, residential-office. The City
of Bozeman is currently revamping all zoning within city limits. The changes were slated to be adopted
in January of this year; however, public comments were negative, and the city planners have delayed
implementation of the new development standards. The subject zoning is slated to change from R-O to
B1, Neighborhood Mixed Use. The B1 zoning outright permits mixed use with professional offices, small
scale retail and apartment/residential use. The B1 standards are similar to the R-O standards. Objections
to the proposed zoning changes should not impact this zoning district B1 and are mostly directed toward
the proposed increases in residential density in single household neighborhoods without consideration for
off-site parking and impact on neighborhoods.
NORTH COAST APPRAISAL NCA 20242423 35
HIGHEST AND BEST USE
At client/end user request, this appraisal assignment is a Market Value assignment, thus, we have
considered the Highest and Best Use analysis. The subject’s current use is vacant agricultural lands
recently subdivided into one of five residential development sites.
The definition of Highest and Best Use is:
“Highest and Best Use is the reasonable and probable use that supports the highest present value
as of the effective date of appraisal.
Alternatively, that use from among reasonably probable and legal alternative uses, found to be
physically possible, appropriately supported, financially feasible and which results in the highest
land value.
The definition immediately above applies specifically to the highest and best use of the land. It
is to be recognized that in cases where a site has extensive improvements on it, the highest and
best use may very well be determined to be different from the existing one. The existing use
will continue, however, unless and until land value in its highest and best use exceeds the total
value of the property in its existing use."1
For a particular use of a piece of real property to be the highest and best use of that real property,
several requirements must be met:
1. The proposed use must be legally permissible or reasonably possible.
2. The proposed use must be physically possible on the site.
3. The proposed use must be economically and financially feasible under the projected
market conditions then existing.
4. The proposed use must be the most profitable among the alternatives that are legally
permissible, physically possible, and economically feasible.
The Highest and Best Use analysis involves two separate studies:
(1) The site as if vacant and ready to be put to its Highest and Best Use; and, if the
property is improved, then
(2) A study of the Highest and Best Use of the property as improved.
1Byrl N. Boyce, ed., Real Estate Appraisal Terminology, revised edition, Ballinger Publishing
Company, Cambridge, MA, 1983, page 126.
NORTH COAST APPRAISAL NCA 20242423 36
Physically Possible
The subject site is comprised of level to sloping topography and is accessed by arterial N 19th Ave.
The site presents no impediments to future development.
Legally Permissible
The site is zoned residential R-O and future B1 zoning. Future development is likely due to access to
infrastructure, road access, access to utilities and neighborhood compatibility.
Residential-office district (R-O). The intent of the R-O residential-office district is to provide for and encourage
the development of multi-household and apartment development and compatible professional offices and
businesses that would blend well with adjacent land uses. These purposes are accomplished by:
1. Providing for a mixture of housing types, including single and multi-household dwellings to serve the
varying needs of the community's residents.
2. Use of this zone is appropriate for areas characterized by office or multi-household development; and/or
areas along arterial corridors or transitional areas between residential neighborhoods and commercial
areas.
This is an AS IS market value opinion and does not consider the implication of future development,
but neighborhood influence supports defining the subject site as a development site.
The vacant subject site may be offered as trade to the City of Bozeman in exchange for increased
development density for an alternative residential project. The trade is based upon the City of
Bozeman Municipal Code Chapter 38.380.050 regarding Affordable Housing Land Donation
Alternative (see extracted Ordinance below).
Sec. 38.380.050. - Land donation alternative.
A. As an alternative to constructing some or all of the affordable homes required
by section 38.380.020, the developer may qualify for the incentives listed in section
38.380.040 by donating one or more parcels of land within the city limits. The land
donation must meet the standards in this section and be approved by the director as
providing equal or greater affordable housing benefit to the city.
B. The developer may donate undeveloped parcels of land or ready-to-build house lots,
provided the land is subject to a document recorded in the records of the Gallatin
County Clerk and Recorder requiring the land be used only for the construction of
affordable homes.
C. The value of the land donated must equal or exceed the remaining cost of designing,
obtaining land use and building approvals for, installing or upgrading infrastructure
for, and constructing the number of affordable homes the annexer, subdivider, or
developer would otherwise be required to provide in return for the requested
incentives listed in subsection 38.380.030, as established by an independent
NORTH COAST APPRAISAL NCA 20242423 37
valuation and economic study commissioned by and acceptable to the city and paid
for by the developer.
(Ord. No. 2105, § 12, 9-27-2022)
This alternative land donation represents this investor’s development plan and is not considered in the
Highest and Best Use analysis. The appraiser has been requested to provide an opinion of the market
value for the site as vacant and not necessarily for use as land available for affordable housing.
Financially Feasible
A review of closed land sales within the immediate area demonstrates that demand for commercial
and residential apartment development continues and market demand for rental properties continues.
Maximally Productive
See above.
Conclusion
The subject site Highest and Best Use of the subject site as development land for future development
with numerous development options available. This is the use that meets the four tenets of Highest
and Best Use analysis. The most probable buyer would be a developer for commercial and/or mixed-
use property development.
As Improved
Not applicable/not improved.
NORTH COAST APPRAISAL NCA 20242423 38
VALUATION ANALYSIS
Methodology
Valuation of real property typically considers three basic approaches to value, the Income Approach,
the Sales Approach, and the Cost Approach.
The Income Approach is based on the precept that income-producing property is usually purchased as
an investment, and therefore the earning power of the asset is critical to understanding the property’s
value. The subject is a vacant site, thus, there is no rental income generated by thus, the income
approach to value is not applicable to this assignment.
The second valuation approach is the Sales Comparison Approach. This approach provides an
indication of property value in what is perhaps the most direct manner possible: it measures what
someone is willing to pay for it. An essential premise of the Sales Comparison Approach is that the
market will determine the price of the property being appraised in the same manner it determines the
price for comparable, competitive properties. Essentially, the Sales Comparison Approach is a
systematic procedure for carrying out comparative shopping.
The last approach considered is the Cost Approach. This approach endeavors to estimate a property’s
value by measuring the cost to replace the property with a similar and equally suitable structure.
Analysis Discussion
The subject is a vacant site. The applicable unit of comparison for vacant raw development land is the
price paid per square foot. The derived market value per square foot was then applied. There are
markets where the price per door is commonly used as the unit of comparison for residential apartment
development, however, since the density of development depends largely upon product mix (studio
units vs. one-bedroom apartments or two-bedroom apartments) which may radically influence price
per door, the most appropriate unit of comparison applicable to this assignment is the price per square
foot of site.
The Cost Approach and the Income Approach have been excluded as these are not considered valid
approaches when considering the valuation of vacant land.
The Sales Comparison Approach has been used as the sole basis for development of an opinion of
market value.
NORTH COAST APPRAISAL NCA 20242423 39
INCOME APPROACH
Introduction
The Income Approach is based on the precept that income-producing property is usually purchased as an
investment, and therefore the earning power of the asset is critical to understanding the property’s value.
Real Estate Principles
This approach relates primarily to the real estate principle of anticipation, which holds that value is
affected by the expectation of future benefits. It also relates to the principle of substitution and
acknowledges that investors will consider alternative, or substitute uses of their capital in the
investment decision.
Procedures
The Income Approach is developed by analyzing the property’s income and expenses to forecast the
most probable net operating income; this estimated net operating income is then trended into the future.
In order to estimate net operating income for each year of the forecast period, projections are made
with respect to a holding period of the investment, real growth of rental rate over the holding period,
vacancy and uncollected income, and growth of expenses over the holding period. At the end of the
holding period, a reversion or sale of the property is hypothesized based on direct capitalization of the
following year’s income.
Data used in this approach are rental comparisons of similar properties, vacancy surveys, expense
information from similar properties, and finally, discount rates extracted from recent market
transactions.
This approach is not applicable to this assignment and has not been applied.
NORTH COAST APPRAISAL NCA 20242423 40
COST APPROACH
Introduction
The Cost Approach endeavors to estimate a property’s value by measuring the cost to replace the
property with a similar and equally suitable structure. In this way, the Cost Approach attempts to
reflect the market by asking the question: Would a buyer pay more for an existing property than the
cost to acquire a site and build a new building of equal desirability and utility?
Real Estate Principles
The real estate principle of substitution is basic to the Cost Approach, as is the principle of supply and
demand. The Cost Approach can demonstrate potential developer profit and can thereby show the
potential for future scarcity or oversupply.
Procedures
The procedures used in the Cost Approach are valuation of the land as though vacant, estimation of
the replacement cost new, and a measurement of accrued depreciation. In arriving at an estimate of
value by the Cost Approach, accrued depreciation is subtracted from the estimate of the replacement
cost new. The result is then added to the estimated value of the site together with a depreciated value
for site improvements.
This approach is not applicable to this assignment and has not been applied.
NORTH COAST APPRAISAL NCA 20242423 41
SALES COMPARISON APPROACH
Introduction
The Sales Comparison Approach provides an indication of property value in what is perhaps the most
direct manner possible: it measures what someone is willing to pay. An essential premise of the Sales
Comparison Approach is that the market will determine the price of the property being appraised in
the same manner it determines the price for comparable, competitive properties. Essentially, the Sales
Comparison Approach is a systematic procedure for carrying out comparative shopping.
Real Estate Principles
The Sales Comparison Approach reflects primarily the real estate principle of supply and demand.
This principle holds that prices, and hence values, are driven by the relative supply of property in the
marketplace, in relation to the demand for that type of property.
Procedures
The procedures used in the Sales Comparison Approach are to research the surrounding market to
obtain sales and listing information on comparable properties. Relevant measures of comparison are
then made between the sale comparables and the appraised property. These units of comparison are
then adjusted to the appraised property using market-derived adjustment data. The result of this
process is typically expressed as a value-per-square foot basis and is then used to derive an opinion of
market value for the property.
Section Outline
Comparable Sales Data
Comparable Analysis and Conclusion
NORTH COAST APPRAISAL NCA 20242423 42
Subject Site:
In selection of comparable sales, emphasis was placed on sales of commercial and multi-family
residential development tracts. Montana is a non-disclosure state where the sales prices and terms of
real estate transactions are not public information. There are no centralized sources of sales data, no
obligatory requirements for sale participants to release specific data and many sales are subject to
confidentiality agreements. Therefore, only those sales that were openly marketed for sale using the
local Multiple Listing Service were utilized.
Sales and market data gathered was confirmed with sources familiar with the transactions.
The following table summarizes the comparable properties:
NORTH COAST APPRAISAL NCA 20242423 43 Comp.Closing Date Analysis Usable Price/ FinancingNo. Location OMD/DOM Price Area (SF) SF Zoning Use1 Montana Woolen Land 1/19/2024 $2,000,000 43,996 $45.46Conventional B2 Community Business3100 W Main St 8/17/2023 OfficeBozeman, MT 4RetailBSC MLS#3766982 2350/2352 Vaquero Pkwy 3/3/2023 $635,000 18,382 $34.54Cash B2 Community BusinessLot 1, Block 16 1/6/2023 OfficeBozeman, MT 205 RetailBSC MLS#3732793 Annie Subdivision 12/15/2023 $3,000,000 98,446 $30.47 Conventional R5 Res/High Density1660 N 27th Ave 6/27/2023Apartments/CondoBozeman, MT 97 DOMIn process of rezoningBSC MLS#381023at time of sale4 Cattail Creek Sub Ph 3 12/12/2022 $899,000 24,178 $37.18 Conventional R3 ResidentialLot 3, Block 21 2/5/2022Medium DensityBozeman, MT 1DOM BSC MLS#3662435 Maple Terrace Land 10/13/2023 $1,100,000 25,746 $42.73Cash R-O Residential/OfficeN 19th Ave, Lots 15 and 16 7/6/2023 Mixed use allowedBozeman, MT 206 DOM BSC MLS#376107 &1086 Cattail Creek Sub Ph 1 Active Listing $845,000 19,602$43.11 Listing R-O Residential/OfficeNHN Warbler Way Active ListingMixed use allowedBozeman, MT 93 DOMCommercial/Resident.BSC MLS#3892777 Cattail Creek Sub Ph 2A&2B Active Listing $1,250,00033,977 $36.79 Active Listing R3 Residential3129/3143 Catron St Active ListingMedium DensityBozeman, MT 69 DOMBSC MLS#389761&3897628 Trakker Trail Land Active Listing $825,000 16,466 $50.10 Active Listing B2 Community BusinessLots 4,5,6 Trakker Trail Active ListingMixed use allowedBozeman, MT 400 DOMBSC MLS # 3892819 Thomas Street Apt Land Active Listing $1,200,000 39,640 $30.27 Active Listing R4 Res/High Density1242 Thomas Dr Active ListingApartments/CondoBozeman, MT 356 DOMincludes "shovel ready"BSC MLS#386806plans for 20 unit condo.Subj Maple Terrace Land Pending $1,000,000 25,000 $40.00Conventional R-O Residential/OfficeN 19th Ave, Lots 19 and 20 2/16/2024 Mixed use allowedBozeman, MT 101 DOMCommercial/Resident.BSC MLS#388084Land Sales Summary
NORTH COAST APPRAISAL NCA 20242423 44
Comparable Number 1
Property: Montana Woolen Mills Land
Location: 3100 W Main St
Bozeman, MT 59718
Tax Parcel #s: RGG7132
MLS File #: Big Sky Country MLS #376698
Contract Date: 08/17/2023
Closing Date: 01/19/2024
Asking Price: $2,000,000
Financing Terms: Conventional
Type of Sale: Arms-Length
Price Adjustments: None
Analysis Price: $2,000,000
Marketing Time: 4 days on market/original offer rescinded enabling this back-up offer.
Seller: Reiham, Thomas & Peggy Living Trust
Buyer: GFC Investment Company LLC
Confirmation: Tom Starner (406)539-0717
Warranty Deed#: 2818988
Present Use: Vacant Land with an older economically obsolete improvement.
Land Area: 1.009 acres/43,996 sf
Asking Price/SF: $2,000,000 ÷ 43,996 sf = $45.46
Prior Sale/Transfer: There are no prior transfers noted for this parcel during the prior three-year
period.
Sale Data: The property is being purchased with development in mind. This site is located
at the entry to Gallatin Mall and has a direct W Main Street frontage. The site
includes an older building which will most likely be removed prior to
redevelopment of the site. The lower sale price reflects negotiations required
with Gallatin Mall which regulates access to the site. This requirement resulted
in a lower sale price. The indicated market value per square foot is $53.00.
NORTH COAST APPRAISAL NCA 20242423 45
Comparable Number 2
Property: 2350/2352 Vaquero Parkway
Location: Lot 1, Block 16, Baxter Meadows Subdivision Phase 2A
Bozeman, MT 59718
Tax Parcel #s: RFG50238
MLS File #: Big Sky Country MLS #372279
Contract Date: 01/06/2023
Closing Date: 03/03/2023
Asking Price: $749,900
Financing Terms: Cash
Type of Sale: Arms-Length
Price Adjustments: None
Sale Price: $635,000
Marketing Time: 205 days on market
Seller: Four Fellows LLC
Buyer: ROI LLC
Confirmation: Nick Zimmer (406) 980-0128
Warranty Deed#: 2735485
Present Use: Vacant Land
Land Area: 0.422 acres/19,254 sf
Sale Price/SF: $635,000 ÷ 19,254 sf = $34.54
Prior Sale/Transfer: No prior sales during the previous twelve months. Subsequent sales post
construction of units that were built by this purchaser.
Sale Data: The property was purchased with development in mind. Sale included no
concessions and was sold cash. The sale included preliminary plans with
approvals pending finalization of fire suppression plans for 8 units in two side
by side buildings with mixed use allowed. . After all adjustments have been
applied, the indicated market value for the subject per square foot is $36.00.
NORTH COAST APPRAISAL NCA 20242423 46
Comparable Number 3
Property: Annie Subdivision Land
Location: 1660 N 27th Avenue
Bozeman, MT 59718
Tax Parcel #s: RGG69232
MLS File #: Big Sky Country MLS #381023
Contract Date: 06/27/2023
Closing Date: 12/16/2023
Asking Price: $3,495,000
Financing Terms: Cash
Type of Sale: Arms-Length
Price Adjustments: None
Sale Price: $3,000,000
Marketing Time: 97 days on market
Seller: Prowell II, LLC
Buyer: Bozeman Apartment Holdings LLC
Confirmation: Jason Zalac (406) 582-0250
Warranty Deed#: 2817144
Present Use: Vacant Land.
Land Area: 2.26 acres/98,446 sf
Sale Price/SF: $3,000,000 ÷ 98,446 = $30.47/sf
Prior Sale/Transfer: No prior transfer noted in past three years.
Sale Data: The property was purchased with development in mind. Sale included no
concessions and sold with conventional financing. Prior to being offered for
sale, the broker/owner received a zoning increase from R4 to R5 thereby
increasing density. A site size adjustment has been applied reflecting larger sites
selling for less per square foot than smaller sites. After all adjustments have
been applied, the indicated market value for the subject per square foot is
$39.00.
NORTH COAST APPRAISAL NCA 20242423 47
Comparable Number 4
Property: Cattail Street Land
Location: 3326 Warbler Way
Bozeman, MT 59718
Tax Parcel #s: RFG53064
MLS File #: Big Sky Country MLS #366243
Contract Date: 02/05/2022
Closing Date: 12/12/2022
Asking Price: $899,000
Financing Terms: Cash
Type of Sale: Arms-Length
Price Adjustments: None
Sale Price: $899,000
Marketing Time: 1 day on market
Seller: Susanne Bennett
Buyer: Delpark USA Warbler Inc
Confirmation: Jody Savage (406) 209-8884
Special WD#: 2792398
Present Use: Vacant Land
Land Area: 0.555 acres/24,178 sf
Sale Price/SF: $899,000 ÷ 24,178 sf = $37.18
Prior Sale/Transfer: None noted during previous 12 months.
Sale Data: The property was purchased with development in mind. Sale included no
concessions and was sold cash/bank loan. No additional adjustments were
required. After all adjustments have been applied, the indicated market value
for the subject per square foot is $39.00.
NORTH COAST APPRAISAL NCA 20242423 48
Comparable Number 5
Property: Maple Terrace Land
Location: Lots 15 and 16, Maple Terrace Subdivision Block A
Bozeman, MT 59718
Tax Parcel #s: RGG5326 and RGG5325
MLS File #: Big Sky Country MLS #376107 and #376108
Contract Date: 07/06/2023
Closing Date: 10/13/2023
Asking Price: $1,290,000
Financing Terms: Private financing
Type of Sale: Arms-Length
Price Adjustments: None
Analysis Price: $1,100,000
Marketing Time: 334 days on market
Seller: Altaya Properties LLC
Buyer: S2K/Miller Babcock LLC
Confirmation: Travis Ballenger (406) 539-7653
Warranty Deed#: 2813118
Present Use: Vacant Land
Land Area: 0.592 acres/25,746 sf
Asking Price/SF: $1,100,000 ÷ 25746 = $42.73
Prior Sale/Transfer: None noted.
Sale Data: The property is being purchased with development in mind and included design
plans for mixed use buildings/one per site. The two lots were offered for sale
separately but were purchased as an assemblage. This purchaser is also the
subject purchaser. The appraiser attempted to contact the client but was unable
to confirm plans for the vacant lots after their acquisition. The indicated market
value per square foot is $43.00.
NORTH COAST APPRAISAL NCA 20242423 49
Comparable Number 6
Property: Cattail Creek Sub Ph 1
Location: NHN Warbler Way
Bozeman, MT 59718
Tax Parcel #s: RFG56547
MLS File #: Big Sky Country MLS #389277
Contract Date: Active Listing
Closing Date: Active Listing
Asking Price: $845,000
Financing Terms: Active Listing
Type of Sale: Arms-Length
Price Adjustments: -10%/reflecting market price adjustments and list price to eventual sale price
adjustments.
Analysis Price: $760,500
Marketing Time: 899 cumulative days on market
Seller: Hochstetler, Adam
Buyer: Active Listing
Confirmation: Sue Frye (406) 556-5056
Warranty Deed#: Active Listing
Present Use: Vacant Land
Land Area: 0.45 acres/19,602 sf
Analysis Price/SF: $760,500 ÷ 19,602 sf = $38.80
Prior Sale/Transfer: There are no prior transfers noted for this parcel during the prior three-year
period.
Sale Data: The property is being purchased with development in mind. This is a remainder
land purchase, that is this property includes a prior entitlement to complete unit
development without plans being provided with this purchase. After adjusting
for the interior street location, the indicated market value per square foot is
$41.00.
NORTH COAST APPRAISAL NCA 20242423 50
Comparable Number 7
Property: Cattail Creek Sub Ph 2A&2B
Location: 3129&3143 Catron St
Bozeman, MT 59718
Tax Parcel #s: RFG56547
MLS File #: Big Sky Country MLS #389761 and 389762
Contract Date: Active Listings
Closing Date: Active Listings
Asking Price: $1,250,000
Financing Terms: Active Listing
Type of Sale: Arms-Length
Price Adjustments: -10%/reflecting market price adjustments and list price to eventual sale price
adjustments.
Analysis Price: $1,125,000
Marketing Time: 69 cumulative days on market
Seller: Bjella, Karli
Buyer: Active Listings
Confirmation: Marcie Hahn-Knoff (406)599-3530
Warranty Deed#: Active Listings
Present Use: Vacant Land
Land Area: 0.78 acres/33,977 sf
Analysis Price/SF: $1,125,000 ÷33,977sf = $33.11
Prior Sale/Transfer: The two lots were purchased as an assemblage on
01/23/2023(BSCMLS#379433 and #379434. Each lot was purchased for
$432,500 each or $865,000 total. This was an arm’s length purchase with no
concessions to the sale price offered by the sellers.
Sale Data: The property is currently being offered for sale with eventual development in
mind. There are no plans included with this purchase. After adjusting for the
interior street location and larger site, the indicated market value per square foot
is $37.00 per square foot.
NORTH COAST APPRAISAL NCA 20242423 51
Comparable Number 8
Property: Trakker Trail Lots
Location: Lots 4, 5, and 6, Trakker Trail
Bozeman, MT 59718
Tax Parcel #s: RFG50176, RFG50177, and RFG50178
MLS File #: Big Sky Country MLS #389281
Contract Date: Active Listing
Closing Date: Active Listing
Asking Price: $825 ,000
Financing Terms: Active Listing
Type of Sale: Arms-Length
Price Adjustments: -10%/reflecting market price adjustments and list price to eventual sale price
adjustments.
Analysis Price: $742,500
Marketing Time: 400 cumulative days on market
Seller: Cover, Cynthia
Buyer: Active Listing
Confirmation: Nathan Dyk (406) 539-1155
Warranty Deed#: Active Listing
Present Use: Vacant Land
Land Area: 0.37 acres/15,493 sf
Analysis Price/SF: $742,500 ÷19,493 sf = $46.51/sf
Prior Sale/Transfer: There are no recent transfers noted for the lots.
Sale Data: The three adjacent lots are offered for sale individually or bundled either for
two adjacent lots or for all three lots together. This listing includes all three lots
due to limited individual size of the lots which limits development options. The
assemblage of three lots together conform to market expectations for B2 lot
development. The property is currently being offered for sale with eventual
development in mind. There are no plans included with this purchase. After
adjusting for the interior street location and smaller site, the indicated market
value per square foot is $47.00 per square foot.
NORTH COAST APPRAISAL NCA 20242423 52
Comparable Number 9
Property: Thomas Street Apartment Condo Land
Location: 1242 Thomas Dr
Bozeman, MT 59718
Tax Parcel #s: RFG8613
MLS File #: Big Sky Country MLS #386806
Contract Date: Active Listing
Closing Date: Active Listing
Asking Price: $1,200,000
Financing Terms: Active Listing
Type of Sale: Arms-Length
Price Adjustments: -10%/reflecting market price adjustments and list price to eventual sale price
adjustments.
Analysis Price: $1,080,000
Marketing Time: 356 cumulative days on market
Seller: ABS, LLC
Buyer: Active Listing
Confirmation: Jim Applebee (406) 579-0839
Warranty Deed#: Active Listing
Present Use: Vacant Land
Land Area: 0.91 acres/39,640 sf
Analysis Price/SF: $1,080,000 ÷39,640 sf = $27.25
Prior Sale/Transfer: None noted in the prior twelve months.
Sale Data: The property is currently being offered for sale with eventual development in
mind. This is advertised as a “shovel ready” development project with plans
and City of Bozeman approvals for 20 garden style single level condominium
apartment units. The plans include 7 studio apartments, 9 one-bedroom units
and 4 two-bedroom units. The subject also includes plans for apartment
development; however, these plans are preliminary in nature and are not yet
finalized with the City of Bozeman. After adjusting for the interior street
location and larger site as well as plans, the indicated market value per square
foot is $28.00 per square foot.
NORTH COAST APPRAISAL NCA 20242423 53
Comparable Analysis and Conclusion
The comparable range in sales price/asking price per square foot is from a low of $27.00 to a high of
$47.00. After all adjustments have been applied, the adjusted range in sale price/asking price narrowed
to $28.00 and $53.00 per square foot.
Overview: The comparable properties were analyzed for location, physical, and other conditions that
may have influence on the value of the comparable sale property.
Conclusion:
Property adjustments were made to accommodate for time of sale, location, and physical differences.
The median adjusted indicated market value is $39.00/sf while the average adjusted indicated market
value is $40.14/sf. The concluded opinion of market value for the subject site is $40.00 per square
foot which concurs with the pending purchase price of $1,000,000 or $40/sf for the 25,000 square foot
lot.
A means test of reliability of the indicated market value has been applied. This is a weighted average
with most weight awarded the most reliable market value indictors and lower weight awarded those
comparables with less consideration. These “merit” indicators are then applied to the adjusted
indicated market value of each comparable. These are then added up, building the indicated market
value. Closed sales #1 through 5 have been awarded greatest consideration in the final indicated
market value. The four active listings were awarded least consideration. A means test of reliability has
been completed which can provide us with a measure of reliability of the concluded opinion of market
value and is not depended upon to provide the appraiser with a market value opinion.
In consideration for the contributory for the location, the opinion of market value per square foot is
concluded to be $40.00 which is supported by the weighted average above.
25,000 x $40.00/SF = $1,000,000
Comparable Indicated MV Weight Contributory Value
Sale #1 $53 x 16.0% $8.40
Sale #2 $36 x 16.0% $5.80
Sale #3 $39 x 16.0% $6.20
Sale #4 $39 x 16.0% $6.24
Sale #5 $43 x 16.0% $6.84
Sale #6 $41 x 5.0% $2.04
Sale #7 $37 x 5.0% $1.83
Sale #8 $47 x 5.0% $2.33
Sale #9 $28 x 5.0% $1.41
Rounded $41.08
Weighted Average
NORTH COAST APPRAISAL NCA 20242423 54 The following table summarizes the adjustments: Subject Comp 1 Comp 2 Comp 3 Comp 4 Comp 5 Comp 6 Comp 7 Comp 8 Comp 9Property Maple Terrace Land Montana Woolen Land 2350/2352 Vaquero Pkwy Annie Subdivision Cattail Creek Sub Ph 3 Maple Terrace Land Cattail Creek Sub Ph 1 Cattail Creek Sub Ph 2A&2B Trakker Trail Land Thomas Street Apt LandN 19th Ave, Lots 19 and 20 3100 W Main St Lot 1, Block 16 1660 N 27th Ave Lot 3, Block 21 N 19th Ave, Lots 15 and 16 NHN Warbler Way 3129/3143 Catron St Lots 4,5,6 Trakker Trail 1242 Thomas DrBozeman, MT Bozeman, MT Bozeman, MT Bozeman, MT Bozeman, MT Bozeman, MT Bozeman, MT Bozeman, MT Bozeman, MT Bozeman, MT Sale Date:Pending 1/19/2024 3/3/2023 12/15/2023 12/12/2022 10/13/2023 Active Listing Active Listing Active Listing Active ListingOff-Market Date:2/16/2024 8/17/2023 1/6/2023 6/27/2023 2/5/2022 7/6/2023Active Listing Active Listing Active Listing Active ListingSale Price:$1,000,000 $2,000,000 $635,000 $3,000,000 $899,000 $1,100,000 $845,000 $1,250,000 $825,000 $1,200,000Adjustments:$0$0$0$0$0$0($84,500)($125,000)($82,500)($120,000)Analysis Price:$1,000,000 $2,000,000 $635,000 $3,000,000 $899,000 $1,100,000 $760,500 $1,125,000 $742,500 $1,080,000Zoning:R-O B2 B2 R5 R3 R-O R-O R3 B2 R4Site Size (SF)25,000 43,996 18,382 98,446 24,178 25,746 19,602 33,977 15,943 39,640Site Size (Acres)0.57 1.01 0.42 2.26 0.56 0.59 0.45 0.78 0.37 0.91Street FrontageNorth 19th Ave West Main Street Vaquero Pkway N 27th off Oak St Warbler Way North 19th Ave W Main St North 19th Ave Baxter Lane Area Baxter Lane AreaLocationEntry Corridor Entry Corridor NW Bozeman NW Bozeman NW Bozeman Entry Corridor NW Bozeman NW Bozeman NW BozemanNW BozemanPrice/SF (Site)$40 $45 $35 $30 $37 $43 $39 $33 $47 $27Age of SalePending Sale 9 Months 15 Months 11 Months 26 Months 16 Months Active Listing Active Listing Active Listing Active ListingAdjustment0% 0% 0% 0% 0% 0% 0% 0% 0%Adjusted Price/SF$45 $35 $30 $37 $43 $39 $33 $47 $27EncumbrancesFee Simple Fee Simple Fee Simple Fee Simple Fee Simple Fee Simple Fee Simple Fee Simple Fee Simple Fee SimpleAdjustment0% 0% 0% 0% 0% 0% 0% 0% 0%Adjusted Price/SF$45 $35 $30 $37 $43 $39 $33 $47 $27LocationArterial Arterial Interior Street Interior Street Interior Street Arterial Interior Street Interior Street Interior Street Interior StreetAdjustment 0% 5% 5% 5% 0% 5% 5% 5% 5%Adjusted Price/SF$45 $36 $32 $39 $43 $41 $35 $49 $29Site UtilityGood Good Good Good Good Good Good Good Good GoodAdjustment0% 0% 0% 0% 0% 0% 0% 0% 0%Adjusted Price/SF$45 $36 $32 $39 $43 $41 $35 $49 $29Additional ImprovementsNone Building needs to be razed None None None None None None None Plans includedAdjustment5% 0% 10% 0% 0% 0% 0% 0% -10%Adjusted Price/SF$48 $36 $35 $39 $43 $41 $35 $49 $26AccessAverage Average- Average Average Average Average Average Average Average AverageAdjustment5% 0% 0% 0% 0% 0% 0% 0% 0%Adjusted Price/SF$50 $36 $35 $39 $43 $41 $35 $49 $26Street FrontageAdequate Adequate Adequate Adequate Adequate Adequate Average Average Average AverageAdjustment0% 0% 0% 0% 0% 0% 0% 0% 0%Adjusted Price/SF$50 $36 $35 $39 $43 $41 $35 $49 $26Zoning:R-O B2 B2 R5 R3 R-O R-O R3 B2 R4Adjustment0% 0% 0% 0% 0% 0% 0% -5% 0%Adjusted Price/SF$50 $36 $35 $39 $43 $41 $35 $46 $26Size25,000 43,996 18,382 98,446 24,178 25,746 19,602 33,977 15,943 39,640Adjustment5% 0% 10% 0% 0% 0% 5% 0% 10%Adjusted Price/SF$53 $36 $39 $39 $43 $41 $37 $46.46 $28Adjusted Price/SF$53 $36 $39 $39 $43 $41 $37 $47 $28Indicated Value/SF (Rounded)$40.14 Indicated Value $1,003,472Rounded $1,000,000AdjustmentsPhysical DifferencesLand Sales ComparablesMarket Data GridComparable Information
NORTH COAST APPRAISAL NCA 20242423 55
Comparable Plat Maps
Comp 1
Montana Woolen
3100 W Main St
NORTH COAST APPRAISAL NCA 20242423 56
Comparable Plat Maps
Comp 2
Vaquero Parkway
2350/2352 Vaquero Parkway
NORTH COAST APPRAISAL NCA 20242423 57
Comparable Plat Maps
Comp 3
Annie Subdivision
1660 N 27th Ave
NORTH COAST APPRAISAL NCA 20242423 58
Comparable Plat Maps
Comp 4
Cattail Creek Sub Ph 3
3326 Warbler Way
NORTH COAST APPRAISAL NCA 20242423 59
Comparable Plat Maps
Comp 5
Maple Terrace Lots 15 and 16
808/812 N 19th Ave
NORTH COAST APPRAISAL NCA 20242423 60
Comparable Plat Maps
Comp 6
Cattail Creek Phase 1
2916/2918 Warbler Way
NORTH COAST APPRAISAL NCA 20242423 61
Comparable Plat Maps
Comp 7
Cattail Creek PH 2A&2B
3129 Catron St
NORTH COAST APPRAISAL NCA 20242423 62
Comparable Plat Maps
Comp 8
Lots 4, 5, and 6 Baxter Meadows Sub Ph 2A
NORTH COAST APPRAISAL NCA 20242423 63
Comparable Plat Maps
Comp 9
Baxter Lane Sub 1, Lot 4
NORTH COAST APPRAISAL NCA 20242423 64
Location Map
NORTH COAST APPRAISAL NCA 20242423 65
RECONCILIATION ESTIMATE OF MARKET VALUE
Based upon the results of this analysis, the opinion of market value for the subject is $940,000.
One valuation approach was used for the subject property and is summarized as follows:
Easement in Gross
Income Approach N/A
Cost Approach N/A
Sales Comparison Approach $1,000,000
The Income Approach to value is not considered a valid market value indicator and has not been
applied. The Cost Approach is also not considered a valid market value indicator for raw land sales.
The Sales Comparison Approach compared the subject to a selection of comparable sales. While
these sales reflected variations in physical characteristic and changing market conditions, the market
forces affecting each are similar enough to the subject to warrant comparison. Overall, the Sales
Comparison Approach provides a strong indication of market value.
The concluded opinion of market value falls at the pending purchase price.
The Sales Comparison Approach is considered the most valid market value indicator for this
assignment. The market value for the subject is concluded to be:
ONE MILLION DOLLARS
$1,000,000
NORTH COAST APPRAISAL NCA 20242423 66
ADDENDA
NORTH COAST APPRAISAL NCA 20242423 67
CERTIFICATION
I certify that, to the best of my knowledge and belief:
The statements of facts contained in this report are true and correct.
The reported analyses, opinions, and conclusions are limited only by the reported assumptions
and limiting conditions, and our personal, unbiased professional analyses, opinions, and
conclusions.
The appraisal assignment was not based on a requested minimum valuation, a specific valuation,
or the approval of a loan.
The appraiser has no present or prospective interest or bias in the property that is the subject of
this report, and no personal interest or bias with respect to the parties involved.
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.
The reported analyses, opinions, and conclusions were developed, and this report has been
prepared in conformity with the standards and reporting requirements of the Uniform Standards
of Professional Appraisal Practice.
Dominique Savoie has performed a physical visual inspection of the subject property and
comparable sales, performed all the pertinent research, and prepared this report. No other person
provided significant real property appraisal assistance to the appraiser.
The appraiser of record has not previously appraised this property or been engaged in any
capacity, consulting, appraisal or otherwise during the preceding three-year period immediately
preceding the engagement of this appraisal.
There is no appraisal management company associated with this appraisal assignment.
Appraiser
Dominique M Savoie
REA-RAG-LIC-690
Expires 03/31/2025
NORTH COAST APPRAISAL NCA 20242423 68
ASSUMPTIONS AND LIMITING CONDITIONS
The appraiser’s certification that appears in the appraisal report is subject to the following
conditions:
Acceptance of and use of this appraisal report constitutes acceptance of the following limiting
conditions and assumptions. This appraisal report is to be used for the purposes stated herein.
1.) The Appraiser shall not be responsible for any such conditions that do exist or for the engineering
or testing that might be required to discover whether such conditions exist. Because the appraiser
is not an expert in the field of environmental hazards, the appraisal report must not be considered
as an environmental assessment of the property.
2.) The appraiser obtained the information, estimates, and opinions that were expressed in the
appraisal report from sources that he/she considers to be reliable and believes them to be true
and correct.
3.) The appraiser does not assume responsibility for the accuracy of such items that were furnished
by other parties. The appraiser will not disclose the contents of the appraisal report except as
provided for in the Uniform Standards of Professional Appraisal Practice. (USPAP)
4.) The appraiser must provide his/her prior written consent before the lender/client, specified in the
appraisal report, can distribute the appraisal report (including conclusions about the property
value, the appraiser’s identity and professional designations, and references to any professional
appraisal organization or the firm with which the appraiser is associated) to anyone other than
the borrower, the mortgagee or its successors and assigns, the mortgage insurer, consultants,
professional appraisal organizations, any state or federally approved financial institution, or any
department, agency, or instrumentality of the United States, or any state, or the District of
Columbia, except that the lender/client may distribute the property description section of the
report only to data collection or reporting service(s) without having obtained the appraiser’s prior
written consent. The appraiser’s written consent and approval must also be obtained before the
appraisal can be conveyed by anyone to the public through advertising, public relations, news,
sales, or other media. The appraiser will not be responsible for matters of a legal nature that
affect either the property being appraised or the title to it. The appraiser assumes that the title is
good and marketable and, therefore, will not render opinions about the title. The property is
appraised on the basis of it being under responsible ownership.
5.) The appraiser has noted in the appraisal report any adverse conditions observed during the
inspection of the subject property or that he or she became aware of during the normal research
involved in performing the appraisal. Unless otherwise stated in the appraisal report, the
appraiser has no knowledge of any hidden or unapparent conditions of the property or adverse
conditions that would make the property more or less valuable and has assumed that there are no
such conditions and makes no guarantees or warranties, expressed or implied, regarding the
condition of the property.
6.) The appraiser is not required to give testimony or appear in court in regards the appraisal of the
property in question unless arrangements have been previously made.
NORTH COAST APPRAISAL NCA 20242423 69
7.) The property is assumed to be outside areas where flood hazard insurance is mandatory.
However, Flood Maps used are limited with respect to accuracy. Due diligence has been
exercised in interpreting these maps.
8.) It is assumed that there exist no zoning violations, encroachments, easements, or other
restrictions which would negatively affect the subject unless otherwise stated and that the
proposed improvements comply with all applicable federal, state, and local government
requirements, environmental regulations and laws unless otherwise stated in the report.
9.) The liability of North Coast Appraisal is limited to the users as defined therein. There is no
further liability, accountability, or obligation to any third party.
10.) The appraiser cannot predict or evaluate the possible effects of future economic events that may
affect the marketability, desirability, or value of the subject property.
11.) Montana is a non-disclosure state where the sales prices and terms of real estate transactions are
not public information. There are no centralized sources of sales data, no obligatory
requirements for sale participants to release specific date and many sales are subject to
confidentiality statements. Sales and market data gathered was confirmed with sources familiar
with the transactions to the best of this appraiser's ability. Attempts to discover past sales for the
comparables within the past thirty-six months yielded no additional information.
Appraiser
Dominique M Savoie
General Certified Appraiser
REA-RAG-LIC-690
Expires 03/31/2025
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