HomeMy WebLinkAboutAppraisal MDOT Rouse Ave 11-13AN AP P R AI SAL O F
T H E M D O T M AI N T EN AN C E SI T E
AD D R ESSE D AT
907 N O R T H R O U SE AVE N U E
B O Z E M AN , M O N T AN A
P R O J EC T I D ST P P 86-1(44)0
P R O J EC T N O : 4805-044
D ESI GN AT I O N : R O U SE AVE -B O Z E M AN
P AR C E LS: 80, 140, 141
D AT E O F VALU AT I O N
N O VE M B ER 12, 2013
F O R
P AU L B R O WN , AP P R AI SAL SU P E R VI SO R
R I GH T O F WAY D I VI SI O N
M O N T AN A D E P AR T M E N T O F T R AN SP O R T AT I O N
ST AT E O F M O N T AN A
B Y
J . M I C H AEL J O K I , M AI , SR A
H E LEN A, M O N T AN A
J . M I C H AE L J O K I , M AI , SR A
P.O. BOX 281
HELENA, MONTANA 59624
Phone (406) 442-2159
November 25, 2013 FAX (406) 442-6196
Paul M. Brown, Appraisal Supervisor
Right of Way Division
Montana Department of Transportation
State of Montana
P.O. Box 201001
Helena, Montana 59620
RE:An Appraisal of the MDOT maintenance site addressed 907 North Rouse Avenue in Bozeman,
Montana. Project ID STPP 86-1(44)0, Project No. 4805-044, Designation: Rouse Ave-Bozeman,
Parcels: 80, 140, 141
Dear Mr. Brown:
In accordance with your Appraisal Services Agreement dated September 20, 2013 I have made the
necessary inspection and analysis to appraise the above referenced property. The attached report provides
the essential data and detailed reasoning employed in estimating my final value estimate. The report contains
46 pages.
I have appraised the property as a whole, owned in fee simple and unencumbered. I assume no
responsibility for matters that are legal in nature nor do I render any opinion as to title.
The property being appraised is an 8.088 acre site that is located on the west side of North Rouse
Avenue and between Oak Street and Tamarack Street near the northeastern edge of the Bozeman city limits.
This site is improved with 13 buildings that are of various quality, condition, age and use.
The value reported is qualified by certain definitions, assumptions and limiting conditions, and
certification which are set forth within the attached report. The analysis contained herein is considered to be
a summary appraisal report. . This appraisal report is intended to conform with the Uniform Standards of
Professional Appraisal Practice.
Based on my analysis, the market value of the subject property, as set forth, documented and qualified
in the attached report under conditions prevailing on November 12, 2013 was:
O n e M i l l i o n T h i r t y T h r e e T h o u s a n d D o l l a r s
$1,0 3 3 ,0 0 0 *
*Subject to the Hypothetical and Extraordinary Conditions as shown on page 7.
M E M B E R A P P R A IS A L I N S T I T U T E
I direct your attention to the data, discussions and conclusions which follow.
Respectfully submitted,
J. Michael Joki, MAI, SRA
Montana State Certified
General Real Estate Appraiser #152
M E M B E R A P P R A IS A L I N S T I T U T E
T AB LE O F C O N T EN T S
INTRODUCTION Page
Letter of Transmittal
Subject Property Photographs
Summary of Important Facts and Conclusions 4
Assumptions and Limiting Conditions 5
Hypothetical Condition 8
Extraordinary Assumption and Limiting Condition 8
DESCRIPTION, ANALYSIS AND CONCLUSION:
Scope of Appraisal 10
Definition of Market Value 12
Purpose of Appraisal 12
Intended Use of the Appraisal and Intended Client 13
Property Rights Appraised 13
Identification of Property and Legal Description 13
Purported Owner 14
History of the Property 14
Regional Map 15
Regional and City Analysis 16
Neighborhood Analysis 21
Plot Plan 23
Site and Data Analysis 24
Zoning 29
Highest and Best Use 30
Highest and Best Use of Land as Vacant 30
Highest and Best Use of the Property as Improved 33
The Valuation Process 36
Site Valuation 36
Land Sale Location Map 39
Land Sale Adjustment Grid 40
Value Estimate and Certification 45
ADDENDA:
Zoning Ordinance
Contractor Estimate to Raze Buildings
Comparable Land Sale Sheets with Photographs
Qualifications of the Appraiser
State License
J. Michael Joki, MAI, SRA
HELENA, MONTANA
I N T R O D U C T I O N
J. Michael Joki, MAI, SRA
HELENA, MONTANA
SU B J EC T P R O P E R T Y P H O T O GR AP H
Aerial view of the subject property.
Approximate location of the property boundaries are highlighted in red.
J. Michael Joki, MAI, SRA
HELENA, MONTANA
4
SU M M AR Y O F I M P O R T AN T F AC T S AN D C O N C LU SI O N S
PURPORTED OWNER:Montana Department of Transportation/State of
Montana.
PROPERTY TYPE:Maintenance site for the Montana Department of
Transportation.
LOCATION OF PROPERTY:907 North Rouse Avenue in Bozeman, Montana.
This property is located near the northeastern edge of
the Bozeman city limits.
SITE:8.088 acres
IMPROVEMENTS:13 buildings of various age, quality, condition and use
that all serve the MDOT maintenance operation. In
general these buildings are cold storage/garage,
mechanical shops and office building.
PROPERTY RIGHTS APPRAISED:Fee Simple
ZONING:PLI (Public Land and Institutions District)
PRESENT USE:Maintenance site for the Montana Department of
Transportation
HIGHEST AND BEST USE:Redevelopment with a high density residential or light
industrial use.
DATE OF VALUATION:November 12, 2013
PROPERTY VALUE:
CONCLUDED ESTIMATE
OF MARKET VALUE:$1,033,000 *
Subject to the Hypothetical and Extraordinary Conditions as shown on page 7.
J. Michael Joki, MAI, SRA
HELENA, MONTANA
5
ASSU M P T I O N S AN D LI M I T I N G C O N D I T I O N S
This is to certify that the appraiser in submitting this statement and opinion of value of subject property acted
in accordance with and was bound by the following principles, limiting conditions and assumptions.
Unauthorized use of this report is set forth below.
1. No responsibility is assumed for matters that are legal in nature nor is any opinion rendered on title
of property appraised.
2.Unless otherwise noted, the property has been appraised as though free and clear of all
encumbrances.
3.Where the values of the land and the improvements are shown separately, the value of each is
segregated only as an aid to better estimate the value which it lends to the whole parcel, rather than
value of that particular item if it were by itself.
4.All maps, areas, plans, specifications, and other data furnished your appraiser were assumed to be
correct. No survey of the property was made by this firm. Furthermore, all numerical references to
linear measurements, area, volume or angular measurements should be assumed to be "more or less"
(+/-) and are accurate to a degree consistent with their use for valuation purposes.
5.This appraisal considers only surface rights to the property with consideration of current zoning and
land use controls. The estimate of highest and best use will form the basis for the value estimate. This
appraisal does not consider mineral, gas, oil or other natural resource rights that may be inherent in
the ownership of the property.
6.In this appraisal assignment any potentially hazardous material found on the land or used in the
construction of the building, such as urea formaldehyde foam insulation, petroleum residue, asbestos
and/or existence of toxic waste or gases, which may or may not be present on the property, has not
been considered. The appraiser is not qualified to detect such substances. Any interested party is
urged to retain an expert in this field if there is any question regarding such potentially hazardous
material. If such material or substance is present it could adversely effect the value reported.
7.The Americans with Disabilities Act (ADA) became effective January 26, 1992. I have not made a
specific compliance survey and analysis of this property to determine whether or not it is in
conformity with the various detailed requirements of the ADA. It is possible that a compliance
survey of the property together with a detailed analysis of the requirements of the ADA could reveal
that the property is not in compliance with one or more of the requirements of the act. If so, this fact
could have a negative effect upon the value of the property. Since I have no direct evidence relating
to this issue, I did not consider the possible noncompliance with the requirements of ADA in
estimating the value of the property.
8.The appraiser is not a seismologist. This appraisal should not be relied upon as to whether a seismic
problem exists, or does not actually exist on the property. The property which is the subject of this
appraisal is within a geographic area where earthquakes and other seismic disturbances have
previously occurred and where they may occur again. Except as specifically indicated in the report,
no seismic or geologic studies have been provided to the appraiser concerning the geologic and/or
seismic condition of the property. The appraiser assumes no responsibility for the possible affect
J. Michael Joki, MAI, SRA
HELENA, MONTANA
6
on subject property on seismic activity and/or earthquakes. I have not made a specific compliance
survey and analysis of this property to determine whether or not it is in conformity with the various
detailed seismic requirements by the City or County. It is possible that a survey of the property
could reveal that the property does not meet the required seismic requirements. If so, this fact could
have a negative effect upon the value of the property. Since I have no direct evidence relating to
this issue, I did not consider possible noncompliance requirements in estimating the value of the
property.
9.All data contained in this report and in the appraiser's files, as obtained from other sources, upon
which to any degree the opinions and conclusions were based, are considered reliable and believed
to be true and correct. However, the appraiser does not assume responsibility for the accuracy of
such items that were obtained from other parties.
10.There shall be no obligation to give testimony or attendance in court by reason of this appraisal with
reference to the property in question unless arrangements have been previously made and at an
additional fee.
11.Disclosure of the contents of this appraisal report is governed by the by-laws and regulations of the
Appraisal Institute.
Neither all nor any part of the contents of this report especially the conclusions as to value, the
identity of the appraiser, or the firm with which he is connected, or to the MAI and SRA
designation, shall be disseminated to the public through advertising media, news media, public
relations media, sales media, or any other public means of communication without the prior written
consent of the appraiser.
12.J. Michael Joki, MAI, SRA, specifically does not authorize the out-of-context quoting from or partial
reprinting of this appraisal report.
13.The liability of J. Michael Joki, MAI, SRA and employees is limited to the client and to the fee
collected. Further, there is no accountability, obligations or liability to any third party. If this report
is placed in the hands of anyone other than client, the client shall make such party aware of all
limiting conditions and assumptions of the assignment and related discussions. The appraiser
assumes no responsibility for any costs incurred to discover or correct any deficiencies of any type
present in the property; physically, financially, or of a legal nature.
14.The fee for this appraisal report is for the service rendered and not for time spent on the physical
report or for the physical report itself.
15.This appraisal report is prepared for the sole and exclusive use of the appraisers’ client the Montana
Department of Transportation. I am aware that the subject property is part of a potential land swap
with the City of Bozeman for a site that is located at the intersection of Frontage Road and Nelson
Road in Bozeman. Officials at the City of Bozeman may view this appraisal report in order to
complete this land swap. No third parties are authorized to rely upon this report without the
express written consent of the appraiser.
17.This Summary Appraisal Report is intended to comply with the reporting requirements set forth
under Standard Rule 2-2(b) of the Uniform Standards of Professional Appraisal Practice for a
J. Michael Joki, MAI, SRA
HELENA, MONTANA
7
Summary Appraisal Report. As such, it presents only summary discussions of the data, reasoning,
and analysis that were used in the appraisal process to develop the appraiser’s opinion of value.
Supporting documentation concerning the data, reasoning and analysis is contained in the
appraiser’s file.. No third parties are authorized to rely upon this report without the express written
consent of the appraiser.
H YP O T H E T I C AL C O N D I T I O N
A hypothetical condition is a condition that is contrary to what exists but is supposed for the
purpose of the analysis. Hypothetical conditions assume conditions contrary to known facts about physical,
legal, or economic characteristics of the subject property; or about conditions external to the subject
property, such as conditions or trends; or about the integrity of data used in an analysis.
1.As shown on the plat map on page 23 Juniper Street, Hemlock Street and Montana Avenue and the
public alleys are still public roadways in the city of Bozeman. Block 14, 15 and 28 is comprised of
72 city lots. It is my understanding a certificate of survey is going to be completed that will
acknowledge all city streets and alleys within the property boundary plus Montana Avenue are going
to be discontinued in fee to the Montana Department of Transportation. This will consolidate this
8.25 acre site into one tract of land. However MDOT will reserve its necessary right of way along
North Rouse Avenue for the Rouse Avenue-Bozeman Right of Way Project. After reserving the
.202 acres this will create a tract of land that is 8.088 acres in size. Therefore, my value estimate in
this appraisal report is subject to the hypothetical condition that all city streets and alleys have been
discontinued, the necessary right of way along North Rouse Avenue has been reserved, and the
subject site is an 8.088 acre tract of land. This is a hypothetical condition because this is contrary
to what currently exists.
EXT R AO R D I N AR Y ASSU M P T I O N & LI M I T I N G C O N D I T I O N
An extraordinary assumption is an assumption that is directly related to a specific assignment, which,
if found to be false, could alter the appraiser’s opinions or conclusions. Extraordinary assumptions assume
as fact otherwise uncertain information about physical, legal or economic characteristics of the subject
property, or about conditions external to the property, such as market conditions or trends or about the
integrity of data used in an analysis.
1.The current zoning for the subject property is PLI (Public Land and Institutions). I spoke with
Doug Reilly at the City of Bozeman Planning Department concerning the current zoning and the
potential of a zoning change if the subject property were in private ownership. I have been asked
to estimate the market value of the subject property which is based on the highest and best use of
this site, and is explained in the Highest and Best Use Analysis the highest and best use of this site
J. Michael Joki, MAI, SRA
HELENA, MONTANA
8
is for conversion to a zoning ordinance that would accommodate high density residential or light
industrial development. In order to be consistent with the highest and best use analysis sales with
the same use or potential use are analyzed in this appraisal report. If the information provided by
Doug Reilly is found to be false it could change my conclusion to value in this appraisal report.
J. Michael Joki, MAI, SRA
HELENA, MONTANA
9
D E SC R I P T I O N , AN ALYSI S AN D C O N C LU SI O N S
J. Michael Joki, MAI, SRA
HELENA, MONTANA
SC O P E O F T H E AP P R AI SAL
All known, available, relevant market data considered to have an impact on the estimation of market
value of the subject property has been considered. As identified under Assumptions and Limiting
Conditions and as explained under Property Rights Appraised, the title is assumed to be free and clear of
liens and encumbrances.
The Scope of Work defines and appraiser’s conclusions as to what is deemed necessary to provide
a credible appraisal report. The client is identified as the Montana Department of Transportation/State of
Montana and/or the City of Bozeman, Montana. The intended user is the client, and the intended use will
be to assist the Montana Department of Transportation and the City of Bozeman in a potential land swap.
The effective date of this appraisal report is November 12, 2013. I met Kyle Demars, MDOT maintenance
facility manager, on site and he provided me access to the individual buildings. I completed my property
inspection on November 12, 2013 and this is also the date all photographs of the subject property were
taken.
Information pertaining to the subject property was obtained from the Gallatin County Courthouse.
The neighborhood and surrounding competitive market areas were researched to find comparable land sales
and lease information regarding light industrial buildings. Real Estate agents, real estate appraisers and
developers active in this market were interviewed in an attempt to find relevant market data. Market data
has been confirmed by personal contact with the buyer, seller, or real estate agent involved in the
transaction. Market data was obtained from the following resources:
•Gallatin County Clerk and Record’s Office
•City of Bozeman Planning Department
•Keith O’Reilly, MAI, Appraiser
•Ed Jackson, Appraiser
•Mike McKenna, Realtor
•Scott Dehlendorf, Developer
•H&H Excavation
•Montana Crane Service
•Martell Construction
•Jason Leep, Realtor
•Sue Frye, Realtor
•Lloyd Mandeville, Realtor
•Jason Basye, Realtor
J. Michael Joki, MAI, SRA
HELENA, MONTANA
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E x p o s u r e T i m e :
Exposure time is defined by the Appraisal Standards Board of the Appraisal Foundation as follows:
"The estimated length of time the property interest being appraised would have been offered on the market
prior to the hypothetical consummation of the 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".
Exposure time is typically based on historical data found in the market place. As shown on the
comparable sales sheets in the addenda the sales used in the following Land Sale Analysis were on the
market from 1 month to nearly 36 months. The sale that was on the market for 36 months is an out-layer
and the other sales were on the market 1 month, 4 months and 5 months. Because the subject site is well
located and there appears to be a lack of good development land in Bozeman it is my opinion a reasonable
exposure time for the subject property is between 3 and 9 months.
E f f e c t i v e D a t e :
The effective date of this appraisal is November 12, 2013. This is the date of valuation and was the
actual date of the property inspection. It is also the date all enclosed photographs of the subject property
were taken. This appraisal report was completed on November 25, 2013. Market conditions have remained
effectively unchanged between the effective date of appraisal and the completion date of the written report.
M a r k e t i n g T i m e :
Marketing time is defined as "the estimated time it takes an interest in real property to sell on the
market subsequent to the date of appraisal". Exposure time has previously been estimated at 3 to 9 months.
Marketing time differs from exposure time if at the date of appraisal market conditions are changing or are
expected to change in the near future. Bozeman is again experiencing strong market conditions and it is
expected values will remain stable or show slight appreciation in the foreseeable future. Therefore,
marketing time is estimated at 3 to 9 months and the concluded estimate of market value is based upon that
time period.
J. Michael Joki, MAI, SRA
HELENA, MONTANA
11
D E F I N I T I O N O F M AR K ET VALU E
Market value, as used in this report is defined as follows:
“The most probable price, as of a specified date, in cash, or in terms equivalent to cash, or in other
precisely revealed terms, for which the specified property rights should sell after reasonable exposure in a
competitive market under all conditions requisite to a fair sale, with the buyer and seller each acting
prudently, knowledgeably, and for self interest, and assuming that neither is under undue duress.”1
Implicit in this definition is the consummation of a sale as of a specified date and the passing of title
from seller to buyer under conditions whereby:
1.Buyer and seller are typically motivated;
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 US dollars or in terms of financial arrangements
comparable thereto; and
5.The price represents the normal consideration of the property sold unaffected by special or
creative financing or sales concessions granted by anyone associated with this sale.
The above definition is given in consideration for the economic bases for market value. The
definition required in the Montana Department of Transportation Right of Way Manual and the legal
definition of current fair market value which has been developed and refined by the State of Montana and
found in the state statute, MCA 70-30-313 is as follows:
“Current fair market value is the price that would be agreed to by a willing and informed seller and
buyer, taking into consideration, but not limited to the following factors:
1) The highest and best reasonably available use and its value for such use, provided current
use may not be presumed to be the highest and best use;
2) The machinery, equipment, and fixtures for the part of the real estate taken;
3)Any other relevant factors as to which evidence is offered.”
T h e A p p r a i s a l o f R e a l E s t a t e , 1 2 E d i t i o n , (A p p r a i s a l I n s t i t u t e , 2 0 0 6 ),t h1
p . 2 2 .
J. Michael Joki, MAI, SRA
HELENA, MONTANA
12
P U R P O SE O F T H E AP P R AI SAL
The purpose of this appraisal report is to arrive at a supportable estimation of the market value.
I N T E N D E D U SE O F T H E AP P R AI SAL AN D I N T E N D E D C LI EN T
It is understood that the intended use of this appraisal report is to assist the Montana Department
of Transportation/State of Montana in a potential land swap for the site that is located at the intersection
of Frontage Road and Nelson Road in Bozeman, Montana. That site is currently owned by the City of
Bozeman. The user of the appraisal report is the Montana Department of Transportation/State of Montana
and the City of Bozeman.
P R O P ER T Y R I GH T S AP P R AI SE D
This appraisal is made with the understanding and assumption that present ownership of the subject
property includes all rights that may be lawfully owned, and is therefore, title in fee simple as of November
12, 2013. A fee simple estate is subject only to the limitations imposed by the governmental powers of
taxation, eminent domain, police power and escheat.
I D E N T I F I C AT I O N O F P R O P ER T Y AN D LEGAL D E SC R I P T I O N
The property which is the subject matter of this appraisal report is an 8.088 acre site that is located
on the west side of North Rouse Avenue and between Oak Street and Tamarack Street in Bozeman,
Montana. This property is addressed at 907 North Rouse Avenue.
The legal description of the land involved is as follows:
"A n 8 .08 8 ac re tra c t lo c a ted in th e Im e s A d d itio n to th e C ity of B o z e m a n , B lo ck s 14 , 15 a n d 28 , S e c tio n 6 ,
T o w nsh ip 2 S o u th , R a n ge 6 E a st, G a lla tin C o u nty , M o n ta n a ."
J. Michael Joki, MAI, SRA
HELENA, MONTANA
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P U R P O R T E D O WN E R
An investigation was made at the Gallatin County Courthouse Clerk and Recorder's Office, State
of Montana. Records within that Office indicate that the Montana Department of Transportation/State of
Montana is the current owner of record. It is my understanding the Montana Department of
Transportation/State of Montana has owned this site since 1938.
SALE S H I ST O R Y O F T H E P R O P ER T Y
There have been no reported sales of subject property in over three years. It appears that the owner
of record, as previously cited under "Purported Owner", has maintained exclusive ownership since 1938.
To the best of my knowledge this property is not currently listed for sale.
J. Michael Joki, MAI, SRA
HELENA, MONTANA
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R EGI O N AL M AP
J. Michael Joki, MAI, SRA
HELENA, MONTANA
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R E GI O N AL AN D C I T Y AN ALYSI S
Bozeman is the county seat of Gallatin County and is one of 56 counties in the State of Montana.
Gallatin County is located in a mountainous area of Montana north of the Montana/Wyoming border and
Yellowstone National Park. Bozeman primarily lies on the south side of Interstate 90 and is located
approximately 140 miles west of Billings, Montana and 80 miles east of Butte, Montana.
Gallatin County has grown faster than any other county in the State of Montana over the past
decade according to the Census Bureau. Gallatin County includes almost 2,500 square miles of
mountainous lands that offer a variety of topography and climate. Nearly half of Gallatin County is under
public ownership by the Gallatin National Forest, State of Montana, Bureau of Land Management or the
National Park Service.
F o r c e s I n f l u e n c i n g P r o p e r t y Va l u e s
The value of real estate is influenced by the interaction of four major forces. Social considerations,
economic considerations, government and environmental considerations. The four forces are discussed as
follows:
S o c i a l C o n s i d e r a t i o n s
Social forces are exerted largely by population characteristics, including population growth, density,
and age distribution. According to the U. S. Census Bureau the population of the City of Bozeman increased
from 27,509 in 2000 to 37,280 as of April, 2010 and increase of nearly 9,800 people. This represents an
increase in population of approximately 35.5% over this 10 year period, or an average rate of growth of about
3.55%/year. From April, 2010 to April, 2012 the population increased from 37,280 to 38,695, an increase
of nearly 1,415 people which equated to a growth of 3.8% over this time frame.
Gallatin County’s population increased from 67,831 in 2000 to 89,513 in 2010 or approximately
21,700 people. This represents an increase in population of approximately 32% over a 10 year period or an
average growth rate of 3.2%/year. Between April, 2010 and April, 2012 the population increased from
89,513 to 92,614 people or 3,101people which equates to a growth rate of about 3.5% over this time period.
Comparatively, the State of Montana grew from 989,417 people in April 2010 to 1,005,140 people in 2012
or 15,724 people which equates to a growth rate of 1.6% over that time frame.
In addition to population growth the City of Bozeman continues to see growth in its geographic size.
In 1990 the City of Bozeman was approximately 6,420 acres (± 10 square miles) and by the end of 2009 it
had expanded to 12,300 acres (±19.25 square miles) resulting in an increase of ±92% over this 19 year period.
J. Michael Joki, MAI, SRA
HELENA, MONTANA
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This growth was to accommodate the increasing population which required new land for residential,
commercial and industrial development. This growth significantly slowed in 2009 and 2010 which was being
seen all throughout this region as the national economic recession took effect.
Bozeman has a significantly lower home ownership rate than most other communities in the county
primarily due to the student body of Montana State University. Bozeman also has a smaller average
household size and a smaller portion of families than other areas of Gallatin County. Bozeman has an
average household size of 2.27 people while the average household size for Gallatin County is 2.49 people.
Just over half of the Bozeman households are families compared to ±63% countywide. The population of
Bozeman is considerably younger than Gallatin County as a whole, and even more so, in comparison to the
State of Montana. Again this emphasizes the significance of Montana State University being located in
Bozeman. Bozeman and Gallatin County has transformed over the past decade from a primarily agricultural
based community to a tourism related community. Bozeman and Gallatin County offers a high quality of
life due to its low crime rate, offering of many cultural experiences, the presence of Montana State University
and its education offerings. An abundance of outdoor activities that include excellent downhill snow skiing,
world class fly fishing rivers, streams and access to numerous state and federally owned lands are all nearby.
E c o n o m i c C o n s i d e r a t i o n s
Bozeman, like many communities in Montana experienced significant growth in population and economy for
a number of years. This area was affected by the national recession just like many other areas in the country
however new growth and development has begun again and the outlook for Bozeman and the vicinity is quit
positive based on a number of factors.
C County seat of Gallatin County.
C Wide range of skills in the labor force.
C Home of Montana State University.
•Well located in southwestern Montana.
•Numerous recreational opportunities
Bozeman is somewhat unique when compared to other communities in Montana because there are few
employers who employ a large amount of the population. Missoula, Montana, as an example was very
dependent on the lumber and timber industry and Butte, Montana had always relied heavily on the mining
industry. When those industries slowed those communities were very heavily impacted. The primary employer
in Bozeman is Montana State University. Other major sectors of the economy that provide employment are
construction, local and state government, manufacturing, technology, agricultural and retail service. Montana
State University currently employs about 3,500 people as permanent faculty/staff and they also employ over
J. Michael Joki, MAI, SRA
HELENA, MONTANA
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2,000 students in part time work. In the fall of 2,013 the student enrollment at MSU was slightly over 15,000
people which certainly has a significant affect on the local economy. Other major employers in Gallatin
County include the State of Montana, Gallatin County, the City of Bozeman, Bozeman Deaconess Hospital,
Right Now Technologies. With such a diverse employment base the local economy tends to be sheltered from
a downturn in any of the Country’s key employment industries.
In 2010 Bozeman was declared as the most expensive place to live in Montana based upon a report
by Propera Business Network. This report stated that Bozeman’s 2009 cost of living was 4.4% above the
national average. The other Montana cities that showed an overall cost of living above the national average
were Missoula at 1.8% and Kalispell at 1.5%. Residential rent levels in Gallatin County have remained stable
primarily due to the presence of Montana State University. Rents in this community will periodically show a
slight decline however they tend to stabilize or even increase rather quickly due to the continued growth of
Montana State University.
Overall the economic growth has been much stronger in Bozeman and Gallatin County than what is
being seen statewide. Historically the sectors in Bozeman and Gallatin County that show the most substantial
growth are agricultural services, construction, manufacturing, finance, insurance, real estate and lodging.
Currently the unemployment rate in Montana is 6.4% and Gallatin County recorded a slightly lower
unemployment rate at 5.8%. Gallatin County’s labor force is currently estimated at 52,070 employees, the third
largest labor force in Montana’s 56 counties.
Over the past ±10 years residential building permit activity in the City of Bozeman was on the rise and
reached its peak in 2005 and then began to decline over the next 5 years, and most significantly in 2008 and
2009. Residential building permits began to increase again in 2010 and have been on a steady incline.
Bozeman has been experiencing new growth in several areas of town but no area has provided as much
commercial real estate development at the 19th Avenue corridor. Recent stores and restaurants developed
along 19th Avenue include Sportsman’s Warehouse, Lowes, IHOP, Bed Bath and Beyond, Staples, World
Market and REI. Most recently a new Safeway grocery store (±58,000 SF) was completed in December, 2011
and a Kohls department store (±55,300 SF) was completed in October, 2011.
The City of Bozeman facilities over the past 5 years have seen significant development and/or
renovation which includes the fire stations, police station, waste water treatment facilities, the completion of
a downtown parking garage, City of Bozeman Library, construction of the Gallatin County Detention Center,
an expansion of the landfill building etc. Montana State University has also seen significant expansion and
renovation which include a significant remodel of the football stadium, addition of the Molecular Biology
Center, renovations to the Health and Physical Education Center, addition of the Black Box Theater,
renovation of Gaines Hall etc.
Tourism brings a significant number of visitors to the Bozeman area. Yellowstone National Park, the
first national park in the United States, is located approximately 65 miles south of Bozeman. Big Sky Ski
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Resort is located approximately 45 miles south of Bozeman and has recently been listed as the 7th best ski
resort in the United States. This ski area averages over 300" of annual snowfall with skiing available November
through April. The Yellowstone Club lies adjacent to Big Sky Ski Resort and is an exclusive
vacation/residential development that includes both private skiing and golfing. This exclusive, private
development had filed for bankruptcy in 2008 and in 2010 was purchased by Cross Harbor Capital and for
several years saw significant decline in sales and values. However the private development has begun to
rebound again as sales are starting to climb again. Other ski resorts in Gallatin County include Moonlight
Basin which is also adjacent to Big Sky and Bridger Bowl which lies approximately 15 miles to the north of
Bozeman.
E n v i r o n m e n t a l C o n s i d e r a t i o n s
Environmental and physical forces, both natural and man made, can influence property values. These
forces include climatic conditions, topography and natural barriers, and transportation systems.
Bozeman’s climate clearly reflects its mountain valley location. Bozeman truly has four seasons with
its short summers being pleasant which are typically characterized by warm to hot days and cool nights. The
average high temperature in the summer is in the upper 80°’s and the average low in the winter is the mid to
lower 30°’s. Spring tends to come late in the Gallatin Valley as a of its annual precipitation ±19" falls during
May and June. The average annual snowfall in Bozeman is ±72" and the average length of the growing season
is about 107 days. The climate of the county varies according to elevation but is generally characterized by
relatively cold winters and warm summers. Snow removal is a common operating cost that will affect real
estate in the winter months. In contrast air conditioning costs are less during the fairly temperate summer
months however heating bills can be quite high during the cold winter months.
Bozeman is located on the south side of Interstate 90. Access to the south towards Yellowstone Park
is via U.S. Highway 91. There are numerous other state highways and Gallatin County maintained roads that
provide access throughout this region. Commercial air service, truck and rail transportation are considered
to be adequate. Gallatin Field which is located in the adjacent community of Belgrade is the second busiest
airport in the state and provides air service for this area.
G o v e r n m e n t a l C o n s i d e r a t i o n s
The City of Bozeman is a City Commission/City Manager form of government with an elected
municipal judge. There are five commissioners elected with no party affiliation and are elected to a four year
term which are overlapping. The City Commissioner elections are held every two years and the terms of the
commissioners are staggered and the candidate who receives the most votes in an election becomes the mayor
the last two years of their term.
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The City of Bozeman has approximately 40 police officers and the fire department has approximately
18 firefighters plus the Fire Chief, Deputy Chief/Marshall, and seven captains. There are three fire stations
in the City of Bozeman and overall the fire and police protection services are considered to be good.
The Department of Planning and Community Development processes applications for new
development in the city limits. This department enforces the zoning regulations within the city limits of
Bozeman. Gallatin County administers all zoning for properties outside the city limits and within the “zoning
donut”. The Gallatin County Comprehensive Plan encourages development near the existing city limits
and/or services and discourages development in more remote locations. In general the planning and zoning
regulations in this area are considered stringent.
C o n c l u s i o n
Bozeman and Gallatin County has population and overall growth trends that are continuing upward.
This area offers a wide variety of outdoor recreational opportunities, cultural resources, tourism, and coupled
with the presence of Montana State University this area is poised for continued growth. Bozeman has a young
and very well educated work force and coupled with its diverse economy the general outlook for Bozeman,
Belgrade and the surrounding small communities is good.
J. Michael Joki, MAI, SRA
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N EI GH B O R H O O D D AT A AN D T R EN D S
The subject property is located near the northeast end of the Bozeman city limits. The subject
property is located on the west side of North Rouse Avenue between Oak Street and Tamarack Street. The
south end of this neighborhood is defined by Bozeman’s central business district or East Main Street. The
southern end of the neighborhood is developed with commercial properties which transitions into residential
properties moving to the north. Starting at Tamarack Street this neighborhood transitions into a mix of
commercial and light industrial development which is consistent to Interstate 90 which lies just north of Oak
Street. Then north of Interstate 90 properties are a mix of commercial and residential development.
The southern end of this neighborhood and most residential development along North Rouse Avenue
has been developed for many years with little vacant land available for new development. Some of the older
building improvements in this neighborhood have been razed to make way for new development. Hawthorn
Elementary School, middle schools and Bozeman High School are within the neighborhood or at a reasonable
distance. Proximity to the central business district, shopping, churches etc. are key elements to the good
marketability this neighborhood has experienced over the years.
The main north/south arterial in this neighborhood is North Rouse Avenue. The east/west arterials
are East Main Street, East Mendenhall Street and West Oak Street. Montana Rail Link Railroad has a crossing
just north of the East Oak Street and North Rouse Avenue intersection and just below the Interstate 90
overpass. Interstate 90 can easily be accessed from North 7th Avenue approximately ½ mile to the northwest.
City water and sewer service are readily available throughout this neighborhood. Natural gas and
electrical service are provided by Northwester Energy. This neighborhood is served by a variation of overhead
and underground telephone and power lines.
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This neighborhood has historically shown good demand because of its location, close proximity to
the CBD and is considered to be one of the more affordable neighborhoods in Bozeman. Currently the
average price of a single family residence in this neighborhood is about $260,000 which is far less than any
single family residence in one of the new developments at the south or west end of the city limits. This
neighborhood for the most part has been developed for a number of years and has a number of city parks,
tree lined streets and Bozeman Creek parallels a good portion of North Rouse Avenue just to the south of the
subject property. I expect this neighborhood will see limited new growth because it lacks vacant, developable
land. The demand is expected to remain good and as market conditions continue to get stronger in the
Bozeman market most likely market values will appreciate accordingly. This is consistent with what other
neighborhoods are experiencing in Bozeman.
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P LO T P LAN
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P R O P E R T Y D ESC R I P T I O N
S i t e
Size:The plat map on the facing page outlines the boundaries of the subject
property which includes those lots in Block 14, 15 and 28, Hemlock Street,
Juniper Street, Montana Avenue and the public alleys. As of the writing of
this appraisal report a certificate of survey that acknowledges all of the city
streets and alleys within the property boundary plus Montana Avenue being
discontinued in fee to MDOT has not been completed. As explained in the
Hypothetical Condition on page 7 of this appraisal report for purposes of this
analysis the subject property is assumed to be 8.088 acres in size.
Shape:Rectangular
Topography:Generally level
Soil Conditions:No soils test was provided to your appraiser and therefore the soil conditions
are unknown. The subject property has served as the MDOT maintenance
site in some capacity since 1938 and has been used to maintain and store
heavy equipment and has a diesel/gasoline fuel island near the NEC. I have
not been made aware of any hazardous materials and therefore it is assumed
this site is free of any potentially hazardous materials.
Easements:No title policy was provided to your appraiser. A title policy should be used
for the final determination of easements and encroachments.
Access:There are three points of ingress/egress to this site. One point of access is
at the south end of the site off of Tamarack Street and another is from North
Rouse Avenue near the NEC. Both of these accesses are controlled by an
electronic security gate. There is another point of access at the north property
boundary off of Oak Street which is secured with a manually operated chain
link gate.
J. Michael Joki, MAI, SRA
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Utilities:City of Bozeman water and sewer service is extended on site. Northwestern
Energy provides natural gas and electrical service.
Location in Block:The subject site encumbers the entire block between Tamarack Street and
Oak Street and on the west side of North Rouse Avenue.
Functional Adequacy:It was reported to me that this site has served very well as the MDOT
maintenance site or essentially as a light industrial use over the years.
Flood Plain:The subject property is not located in a Flood Hazard Zone. The FEMA
Map number i1 30031 C 0808 D. This map is dated September 2, 2011.
Nuisances or Hazards:Directly to the south of the subject property is another light industrial site
owned by the City of Bozeman which is consistent to the other light industrial
properties to the north and east along North Rouse Avenue. Just to the north
of Oak Street just beyond the light industrial and retail uses is a Montana Rail
Link Railroad crossing and the Interstate 90 overpass. To the west of the
subject property is the Gallatin County Fairgrounds. These uses are typical
to the north end of this neighborhood and none of the uses adversely affect
the market value of the subject site.
Si t e I m p r o v e m e n t s :This site is enclosed with 8' single rail chain link fencing and gates at the three
points of access. There is a small amount of landscaping in the SEC of the
subject site at the entrance to the main office building. Most of the site is
covered with asphalt paving and it is obvious the pavement was laid a number
of years ago as most of this pavement is very worn and in poor condition.
These site improvements provide little to no contributory value to the subject
property.
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All photographs were taken November 12, 2013 by J. Michael Joki, MAI, SRA.
Access at the south property boundary Looking west on Tamarack Street.
from Tamarack Street. Photograph taken Subject property is to the right.
Looking northwest at the subject property Looking north on N. Rouse Ave.
from the intersection of N. Rouse Ave. and Subject property is to the left.
and Tamarack Street.
Access from N. Rouse Ave. Access from Oak Street
Photograph taken November 12, 2012 Photograph taken November 12, 2012
J. Michael Joki, MAI, SRA
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All photographs were taken November 12, 2013 by J. Michael Joki, MAI, SRA.
Looking southwest at the subject property Looking south over the subject site
from the intersection of N. Rouse Ave. and from near the north property boundary.
and Oak Street
North end of the subject site. Fuel island near the NEC.
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B u i l d i n g I m p ro v e m e n t s :This site is improved with 13 buildings that are of various age, quality,
condition, size and use. It was reported to me that the first buildings
constructed on site was in 1938 and the older buildings have seen enough
maintenance for continued use as cold storage, shop or office building but
most of the buildings have little or no remaining economic life. On my initial
site inspection with several personnel from MDOT and the City of Bozeman
it was decided that demolition costs would be obtained for the buildings that
have limited economic life and I would try to obtain relocation costs for the
mechanic's shop that was constructed in 1995 and one of the storage
buildings. I spoke with three local contractors and each explained that these
pre-manufactured buildings (mechanic shop and storage building) could not
reasonably be disassembled and reconstructed on another site because they
will never reassemble like they were intended to. None of the contractors
would provide me a cost estimate because they said it was just not feasible.
This was reaffirmed with the District Manager for Varco Pruden Buildings
which is the brand name of the mechanic’s shop building.
A brief description and photographs of all buildings are included in the
addenda.
J. Michael Joki, MAI, SRA
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Z O N I N G
I spoke with Doug Reilly at the City of Bozeman Planning Department and he confirmed that the
subject site is currently zoned PLI (Public Lands and Institutions District). This district is intended to provide
for and apply to public and quasi public institutional uses and lands, and recreational and public service
activities for the general benefits of the citizens of the city.
The typical uses in a PLI zoning district are open areas, parks, museums, historic or cultural exhibits,
water conservation, flood control, drainage area, natural conservation and preservation area. Institutions
including schools, colleges and universities, hospitals, rehabilitation centers, etc. are permitted. Public
buildings, cemeteries, memorial stadia are permitted as well. Recreational uses including golf courses, tennis
courses, softball fields, swimming pools etc. are also a common use.
Currently the subject property is in all respects compatible with the existing zoning. Doug Reilly
explained to me that the subject property has a B-2 Commercial Zoning Overlay which is an Entry Corridor
Overlay that requires properties located along major arterials (North Rouse Street and Oak Avenue) have
higher design standards concerning their aesthetics. Further discussion with Doug Reilly indicated if the
subject property transferred to private ownership (nonpublic agency) and it was not going to be utilized for
the general benefit of the public then a zone change would be required. Mr. Reilly indicated the most likely
zoning ordinance for this site would be M-1 (Light Manufacturing), B-2 (Community Business) or R-4 (High
Density Residential Development). This zone change would be based on existing uses in the immediate
vicinity of the subject property and the general lack of multi-family land in Bozeman. It will be discussed in
the following Highest and Best Use Analysis that the historical use of this site as the MDOT maintenance site
is no longer the highest and best use of this property.
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H I GH E ST AN D B E ST U SE
"The reasonably probable and legal use of vacant land or an improved property that is
physically possible, appropriately supported, financially feasible and that results in the highest
value."2
The definition above applies to the highest and best use of vacant land or improved property. It is
to be recognized that in cases where a site has existing improvements on it, the highest and best use may very
well be determined to be different from the existing use. 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.
Quite often in estimating the highest and best use of land, the appraiser is controlled by governmental
regulations. These controls are generally zoning ordinances, parking requirements and building codes. Also,
in the estimate of highest and best use, one must recognize the attitude of typical investors in the
marketplace.
Real estate will usually fall into certain definite development patterns, and their uses can be classified
as: residential, agricultural, recreational, industrial, commercial and public use. In valuing the highest and best
use of the land both as if vacant and improved, the following criteria must be met. 1) legally permissible, 2)
physically possible, 3) financially feasible, and 4) maximally productive.
H i g h e s t & B e s t U s e o f La n d a s Va c a n t
L e g a l l y P e r m i s s i b l e
The subject property is currently zoned PLI (Public Lands and Institutions District) which allows for
a wide range of uses. A number of the allowed uses were previously described in the zoning section and a
copy of the zoning ordinance is included in the addenda. These uses are allowed as long as the property is
being used for the benefit of the public. Because I have been asked to estimate the current market value of
the subject property which is based on its highest and best use I will not value this property as public lands
and institutions ground. Not only is the PLI not the highest and best use of this property but PLI zoned land
sales are not available as PLI land does not typically sell on the open market.
I have been asked to estimate the current market value of the subject property and it will be shown
T h e A p p ra is a l o f R e a l E sta te, 1 2 E d itio n , (A p p ra isa l I n stitu te , 2 0 0 6 ), p . 3 0 5 .th2
J. Michael Joki, MAI, SRA
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in the following Sales Analysis that the historical use of this site in support of the MDOT maintenance and
office buildings with the PLI zoning is no longer the highest and best use of this property. I spoke at length
with Dough Reilly from the City of Bozeman Planning Department and because of the location and
surrounding uses several of the development classifications can be eliminated from consideration. The first
check when requesting a zoning change is to consider the twenty year land use plan for a property. In the
twenty year land use plan for the City of Bozeman this site is still earmarked to have the PLI zoning.
However the Planning Department has to entertain amendments to their growth policy on a regular basis.
We discussed the reasonableness of this property being developed with single family residential home sites
with the R-1 or R-2 zoning ordinance and Mr. Reilly explained this type of development is very unlikely at
this location. The subject site is in direct proximity to M-1 (Light Manufacturing), lies adjacent to the Gallatin
County Fairgrounds on the west and is located at the intersection of two arterial streets, North Rouse Avenue
and Oak Street. Also there is a historical Conservation Overlay District in this neighborhood that would
allow a residential use however this overlay does not extend north of Tamarack Street which is the south
boundary of the subject property. For these reasons development of this site with single family residential
home sites can be eliminated from consideration.
Agricultural use can also be eliminated from consideration based upon the size and the location of
this property. The City of Bozeman has public tennis courts, softball fields, swimming pools and other
recreational facilities dispersed throughout the city limits. Even though the subject site may be used for a
“public use” if the land swap occurs with the City of Bozeman it will shown this is no longer the highest and
best use of this land.
In the immediate vicinity of the subject property there is a mix of light and heavy industrial properties
and commercial properties. Even though the subject property is currently zoned PLI there is a B-2 Zoning
Overlay which is an entry corridor overlay for properties that are located on the designated major arterial
streets. These properties have higher design standards concerning their aesthetics. As discussed with Doug
Reilly if a zoning change were to occur on the subject property it would most likely be to an M-1 or B-2
zoning, or potentially an R-4 zoning for higher density residential development.
A commercial use, particularly retail, typically requires good exposure and access to the major traffic
routes and highways. Although North Rouse Street and Oak Avenue are considered to be major arterial
streets in the City of Bozeman there are higher traffic locations i.e. North 7th Avenue, Main Street, North
19th Avenue etc. that offer a better location for this type of use.
Mr. Reilly explained to me even though single family residential development is not a reasonable use
for the subject property the likelihood of a zoning change to an R-4 zone which allows for a higher
residential development i.e., apartments, is much more likely. This zoning change would only be considered
because there is such a lack of multi-family zoned land currently available in Bozeman. This leaves the legally
J. Michael Joki, MAI, SRA
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permissible and most likely use of this land “as if” vacant and ready for development with a light industrial
or high density residential use.
P h y s i c a l l y P o s s i b l e
Properties in this neighborhood are improved with a mix of residential, light and heavy industrial,
and commercial uses. Most sites are improved to the maximum density permitted by zoning while
considering parking regulations and other restrictions.
The subject site is 8.088 acres and has good frontage along North Rouse Avenue and Oak Street.
This site has level topography and is rectangular in its shape which eliminates higher development costs
associated with sloping, irregular shaped sites. There are three points of ingress/egress to the subject
property and all public utilities are available. Soil conditions in this neighborhood have proven adequate for
development of all property types. Based upon the physical characteristics of the subject site and the existing
properties in this neighborhood, the most reasonable and legally permissible uses of the subject property with
an M-1 or R-4 zoning ordinance would be physically possible.
F i n a n c i a l l y F e a s i b l e
Since the local and national recession has slowed the Bozeman real estate market over the past two
years is again experiencing growth. The subject site is well located at the intersection of two arterial streets,
is approximately ¼ mile east of North 7th Avenue which provides access to Interstate 90, and is located in
a neighborhood that is development with a mix of light industrial, commercial and older residential
properties. Properties in this neighborhood historically are very marketable and well received in this
community.
To develop the subject site into numerous light industrial lots that would be improved with
warehouse, shop or garage facilities may be financially difficult. Finished light industrial lots in this
neighborhood are typically selling from $3.00 to $4.00 per square foot and after considering development
costs and the impact fees imposed by the City of Bozeman (which can be significant) the financial feasibility
of this type of development is not very likely. A developer could consider a project with a higher number
of light industrial lots however if the lots become too small it will be difficult to support adequate size
warehouse, shop or garage buildings that would be built on site.
More likely development of this site with a high density residential development i.e. apartments, that
can absorb more development costs and impact fees is financially a more feasible use of this site.
J. Michael Joki, MAI, SRA
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M a x i m a l l y P r o d u c t i v e
The use that conforms with the requirements of the first three tests and would provide the maximally
productive use of the subject site is most likely for development with a high density residential use or
potentially a light industrial development. In my opinion because of this site’s location adjacent to other light
industrial use and the shear lack of multi-family zoned land ready for development there would be demand
for either of these uses at the subject property.
H i g h e s t a n d B e s t U s e o f t h e P r o p e r t y a s I m p r o v e d
L e g a l l y P e r m i s s i b l e
The subject property appears to meet all PLI Zoning Ordinance requirements. It was confirmed with
Doug Reilly that the current use which supports the MDOT maintenance facility is a legally permitted use
in the PLI Zoning Ordinance. Therefore the current use of the subject site is a legally permissible use as it
conforms to the current zoning ordinance.
P h y s i c a l l y P o s s i b l e
The current use of the site as the MDOT maintenance facility is obviously physically possible and
as I understand this site has well served this use for many years.
F i n a n c i a l l y F e a s i b l e
The subject site supports 13 buildings that are used in some manner to support the MDOT
maintenance facility. I have investigated this neighborhood to determine market rent for the shops, garages,
cold storage and office buildings on the subject site. I have spoken with several realtors, real estate appraisers
and developers who are very familiar with this neighborhood. In general cold storage, garage and low quality
shop space rents from $3.00 to $6.00/SF and good quality warehouse or shop space that is well located can
rent from $6.00 to $8.00/SF. Most office space in this neighborhood is low quality space and rent will
generally range from $5.00 to $8.00/SF. Rents are typically configured on a net basis wherein the tenant is
responsible for all of the operating expenses. Of the 13 buildings on the subject site five are either too small
or in too poor of condition to rent in the open market. Photographs and descriptions of these five buildings
are included in the addenda and include the small storage building, utility shed, tire shed, the manufactured
field office building and the paint shop.
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I have estimated the market rent for the remaining eight buildings on the subject site. The mechanic
shop is the newest and best quality building on the subject site and as previously explained I found these
buildings typically rent from $6.00 to $8.00/SF in this neighborhood. However the comparable rentals are
located on its own lot with direct ingress and egress to the adjoining street. The mechanic shop at the subject
property is located squarely in the middle of the site and I believe rent could be at the low end of the range
or $6.00/SF. The garage/storage buildings on the subject site are generally in average or less condition and
I found a reasonable market rent for these buildings is at the low end of the range or $3.00/SF. I have
estimated the market rent for the construction office (modular unit) at $4.00/SF because of its dated, below
average condition. The estimated market rent for the main office building is $3.50/SF because this is a
configuration of shop/welding space, garage, and office use which in my opinion would be difficult to rent
in the market. A recap of the estimated market rent for these buildings is a follows.
Mechanic Shop: 8,000 SF x $6.00/SF =$ 48,000
Trapezoidal Shaped Storage Building:3,600 SF x $3.00/SF =$ 10,800
Cold Storage/Chemical Building:4,350 SF x $3.00/SF =$ 13,050
6-Bay Garage:2,784 SF x $3.00/SF = $ 8,352
Carpenter/Maintenance Building:1,216 SF x $3.00/SF =$ 3,648
Field Office with 11 Bays:8,100 SF x $3.00/SF =$ 24,300
Construction Office:1,440 SF x $4.00/SF =$ 5,760
Main Office Building:10,108 SF x $3.50/SF =$ 35,378
Potential Gross Income:$149,288
Next a vacancy and credit loss factor needs to be estimated. Most of these buildings are shop/garage
or cold storage buildings and several are in below average condition. The manner in which some of these
buildings are configured on this site is not ideal as a rental. I believe a vacancy factor of 10% is reasonable
for this property.
Lease terms in this neighborhood are configured on a net basis wherein the tenant is responsible for
all operating expenses. However a property management expense needs to be accounted for which I found
in this market to be 5%-7% of the effective gross income. Other properties in this neighborhood are
managed at an expense of 5% of the effective gross income however with eight buildings on the subject
property I believe a prudent property manager would expect a management fee at the upper end of the range
or 7%.
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HELENA, MONTANA
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Because there is such a wide variety of building configurations, uses, quality and condition these
buildings may be difficult to rent in this market. Most of these buildings have little remaining economic life
and all of this equates to more risk associated with this property. I found overall capitalization rates for this
property type in this market ranges from 5% to 10% however for the reasons previously stated I believe an
overall capitalization rate that would reflect the risk associated with the subject property is at the upper end
of the range or 10%. The following is a summary of the indication of value via the Income Approach for
the subject property.
Potential Gross Income: $149,288
Vacancy and Credit Loss (10%)($ 14,929)
Effective Gross Income $134,359
Operating Expenses (7%)($ 9,405)
Net Operating Income $124,954
Net income $124,954 ÷ .1000 = $1,249,540
$1,250,000 (R)
As noted in the Scope of the Appraisal and the Intended Use of this appraisal report I have been
asked to arrive at a supportable estimation of this property’s current market value. The value “as improved”
was just shown at $1,250,000. It will be shown in the following land valuation analysis the value of the site
“as if” vacant is concluded at $1,233,000. Even though the value estimate as improved is slightly higher,
approximately $17,000, most of the buildings on the subject site have little remaining economic life and
would be hard pressed to secure a long term lease agreement. It is my opinion demolition of the existing
buildings to make way for new development is a higher and better use of this land in the long term.
M a x i m a l l y P r o d u c t i v e
Ultimately the highest and best use of this site is no longer to support the MDOT maintenance
buildings. The highest and best use is to raze the existing building improvements and make way for a new
use that is most likely for a high density residential development or potentially a light industrial development.
J. Michael Joki, MAI, SRA
HELENA, MONTANA
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P R O P E R T Y VALU AT I O N
M e t h o d s a n d /o r T e c h n i q u e s E m p l o y e d :
Whenever possible, all three basic approaches to value are utilized. The resulting indications of value
are then correlated into a final estimate of market value. I estimated the market value of the subject property
in its current use which supports the maintenance facilities for MDOT and concluded to a value of
$1,250,000.
In the following land valuation analysis I will utilize the Sales Comparison Approach. In the Sales
Comparison Approach an indication of value is derived by comparing the relative utility and desirability of
the subject property with comparable properties that have recently sold. Basic to this approach is the
principal of substitution which states “when a property is replaceable in the market, its value tends to be set
by the price required to acquire an equally desirable substitute property”. In the following analysis I will
value the land as if vacant and then the demolition costs will be applied.
SI T E VALU AT I O N
The method employed to value the site as if vacant and available for sale is the Sales Comparison
Approach. An investigation of the market revealed several sales and listings indicative of what a well-
informed buyer or seller would consider in forming an opinion of value. Four current sales and one listing
of vacant land were chosen as being most appropriate to compare against the subject land. Descriptive data
and photographs of these sales are contained in the Addenda.
Ad j u s t m e n t s
All comparables differ somewhat from each other, and from the subject in various ways. The usual
differences are for cash equivalency, market conditions, location, and a number of physical characteristics.
Many of these factors, in varying degrees, are applicable in the appraisal of the subject property. When
dissimilarities are found in comparable properties, they are adjusted for by adding to the comparable price
when the dissimilar factor is inferior to the same factor found in the subject property. Likewise, a minus
adjustment should be made when the comparable sale has a factor which is superior to that found in the
subject property. The sale properties, then, are adjusted to the subject property.
However, in the market it is often difficult and sometimes impossible to accurately isolate a given
factor. In short, one very seldom finds sales which are identical in all respects but one, and thus is able to
J. Michael Joki, MAI, SRA
HELENA, MONTANA
36
prove conclusively the value, or lack of it, for any one factor due to a difference in sale price. Often, there
are plus and minus factors which offset each other. Thus, the use of professional subjective judgment, to
some degree, may be exercised.
Nevertheless, the differences in values are real and adjustments based on as much fact as can be
found, will be made. Then, the appraiser may call upon his experience to make professional subjective
judgments.
P r o p e r t y R i g h t s
Each of the sales involve fee simple property rights. As a result, no property rights adjustments were
warranted.
F i n a n c i n g :
All sales were cash to the seller or on terms considered cash equivalent, and no adjustments were
required.
C o n d i t i o n s o f S a l e :
No non-market conditions motivating the buyer or seller involved in the transactions are known,
therefore no adjustments are required.
E x p e n d i t u r e s I m m e d i a t e l y Af t e r S a l e :
None of the sales required expenditures immediately after sale, and therefore no adjustments are
required.
M a r k e t C o n d i t i o n s :
A market conditions (time adjustment) is required to bring all comparables up to the effective date
of the appraisal report. Bozeman was experiencing significant decline in real estate values when the local and
national recession was in effect. Since 2011 real estate values have rebounded in this market and new
projects are being developed again and demand for unimproved land is beginning to outweigh its upply. I
will utilize five comparables in the following analysis with one sale closing in November, 2012, two sales
closing in August, 2013, one sale scheduled to close on December 6, 2013 and one current listing. In my
opinion these comparables are all indicative of current market value. I cannot find enough conclusive market
evidence (i.e. paired sales analysis) to extract a monthly rate of appreciation. Each of the developers, real
estate agents and real estate appraisers I interviewed in this market were of the opinion that market
conditions are currently strong in Bozeman and with more demand than supply of vacant land values will
J. Michael Joki, MAI, SRA
HELENA, MONTANA
37
at least remain stable and most likely appreciate in the following months. Because all of the comparables
used in the following analysis occurred within the past 12 months I have not adjusted these comparables for
market conditions.
R e m a i n i n g Ad j u s t m e n t s :
The remaining adjustments will be explained in a qualitative analysis which is an effective technique
that recognizes the inefficiencies of a real estate market and the difficulty in expressing the adjustments with
mathematical precision. The adjustments included in the qualitative analysis are location, size, access,
topography, shape, utilities and use. The land sales adjustment grid can be seen on the following page.
J. Michael Joki, MAI, SRA
HELENA, MONTANA
38
LAN D SALE LO C AT I O N M AP
J. Michael Joki, MAI, SRA
HELENA, MONTANA
39
LAN D SALE AD J U ST M EN T GR I D
S U B JE C T S A L E 1 SA L E 2 S A L E 3 S A L E 4 S A L E 5
Sale Price $1,175,000 $1,100,000 $800,000 $700,000 $499,500
Size (SF)352,313 195,585 686,026 533,784 185,340 120,661
Price/SF $6.01 $1.60 $1.50 $3.78 $4.14
Date of Sale 8/16/13 11/9/12 12/6/13 Closing 8/2/13 Listing
Market Adjustment -0--0--0--0--0-
Adjusted Price $1,175,000 $1,100,000 $800,000 $700,000 $499,500
Adjusted Price/SF $6.01 $1.60 $1.50 $3.78 $4.14
Location SWC of N. Rouse and Oak St.Oak St. and Manzanita Dr Sacco Dr. 1 block east
of N. 19th Fowler Ave.Mause Lane E. Griffin Rd.
Comparability Slightly Superior Superior Inferior Inferior Inferior
Size (SF) 352,313 195,585 686,026 533,784 185,340 120,661
Comparability Superior Inferior Inferior Superior Superior
Access Good Good Good Good Average Good
Comparability Similar Similar Similar Inferior Similar
Topography Level Level Level Level Uneven Level
Comparability Similar Similar Similar Inferior Similar
Shape Rectangular Rectangular Generally Rectangular Slightly Irregular Irregular Irregular
Comparability Similar Similar Similar Inferior Inferior
Utilities All City Services All City Services All City Services None None None
Comparability Similar Similar Inferior Inferior Inferior
Highest & Best Use
High Density Residential
Development or Light
Industrial
High Density Residential
Development
Commercial
Development
High Density Residential
Development Light Industrial Light Industrial
Comparability Similar Superior Similar Inferior Inferior
Overall Comparability Superior Inferior Inferior Similar Similar
J. Michael Joki, MAI, SRA
HELENA, MONTANA
40
S a l e s An a l y s i s
The subject property is located near the northeastern edge of the Bozeman city limits and at the SWC
of North Rouse Avenue and Oak Street. The subject site has good access, level topography and this
rectangular shaped site is 8.088 acres or 352,313 SF. This site has all utilities including city water and sewer
service, and its highest and best use is for development with a higher density residential or light industrial
development.
Comparable No. 1 is the recent sale of the 4.49 acre site located south of Oak Street and between
North 7th Avenue and North 19th Avenue. This site sold for $1,175,000 on August 16, 2013 at $6.01/SF.
As compared to the subject property Comparable No. 1 has similar access, topography, shape, utilities and
use. However this comparable is located between North 7th Avenue and North 19th Avenue which are two
of the north/south main thoroughfares through Bozeman and this is also a smaller site which is a superior
aspect. In addition the listing agent confirmed this site is platted for 20 duplex town home lots and 10
detached single family residential lots and therefore was sold as a fully entitled parcel of land. It was estimated
that the entitlements are worth $2.00 to $3.00/SF for this parcel of land. For these reasons Comparable No.
1 is considered to be superior when compared to the subject property.
On the north side of Comparable No. 1 and adjacent to Oak Street there is a 6.93 acre parcel of land
that is currently under contract for $1,700,000 which equates to a value of $5.63/SF. One of the
contingencies in the buy-sell agreement are that this site obtains a zoning change to B-2 so it can be developed
with commercial improvements. This comparable is also considered to be superior to the subject property
because of its location and pending commercial zoning change.
Comparable No. 2 is the sale of the 15.749 acre or 686,026 SF site that sold on November 9, 2012 for
$1,100,000 or $1.60/SF. Comparable No. 2 is located approximately 1 block east of North 19th Avenue and
has good exposure to Interstate 90 which is a superior location when compared to the subject property.
Comparable No. 2 has similar access, topography, shape and city services when compared to the subject
property. This comparable is zoned B-2 and is best suited for commercial development. The one inferior
aspect of this comparable when compared to the subject property is its much larger size.
Comparable No. 3 is 12.25 acre or 533,784 SF site that is scheduled to close on December 6, 2013
at $800,000 or $1.50/SF. This site is located near the western edge of the Bozeman city limits on Fowler
Avenue and approximately ¼ north of Main Street which is an inferior location when compared to the subject
property. This is a larger site than the subject property and city services are not extended on to this property
which are both inferior aspects when compared to the subject property. Even though this site is zoned with
a combination of R-3 and R-4 and its highest and best use is for a high density residential development the
cost to improve Fowler Avenue as a requirement to develop this property had created concerns about its
J. Michael Joki, MAI, SRA
HELENA, MONTANA
41
financial feasibility. Overall Comparable No. 3 is considered to be inferior when compared to the subject
property.
Comparable No. 4 is a sale of a light industrial property located directly north of the subject property
on Maus Lane. This site is 4.254 acres or 185,304 SF that sold on August 2, 2013 at $700,000 or $3.78/SF.
Comparable No. 4 is located approximately 1 block north of East Griffin Lane which is an inferior location
when compared to the subject property. Comparable No. 4 has uneven topography, an irregular shape, no
city services and is limited to a light industrial use which are all inferior aspects when compared to the subject
property. This comparable’s only superior aspect is its smaller size.
Comparable No. 5 is a current listing of a 2.77 acre site that is available at $499,500 or $4.14/SF. This
comparable is located on the north side of East Griffin Road and several blocks east of North 7th Avenue.
This is an inferior location when compared to the subject property. Comparable No. 5 has similar access and
topography when compared to the subject property. However there are no city services available to this
property and upon development this site will be zoned M-1 which will limit this property to a light industrial
use. The only superior aspect of Comparable No. 5 when compared to the subject property is its smaller size.
Comparable No. 1 is similar to the subject property in many of its aspects however this property sold
as a platted, fully entitled parcel of land. The selling agent contributes $2.00 to $3.00/SF for entitlement value
and adjusts this sale down to $3.00 to $4.00/SF when compared to the subject property. As previously
discussed there is a 6.93 acre parcel just north of Comparable No. 1 that is currently under contract for
$1,700,000 or $5.63/SF. This buy-sell agreement is subject to a change in the zoning to B-2 which is for
commercial development. Clearly this property is superior to the subject property. Comparables No. 2 and
No. 3 are considered to be inferior to the subject property for the previously discussed reasons and they range
from $1.50/SF to $1.60/SF. Even though comparables No. 4 and 5 both have inferior locations they are
smaller sites and on an overall basis are considered to be similar to the subject property.
There are several other sales and listings that have occurred and I would be remiss without referencing
these comparables in this analysis. There was a listing located at the NWC of East Griffin Road and Manely
Lane which is located directly north of the subject property and across Interstate 90. This 9.8 acre site was
listed for sale at $1,200,000 or $2.81/SF. This site is zoned M-1 and potentially has access to the adjoining
railroad spur line. It is my understanding this property was under contract however this sale fell through.
At the northwestern fringe of the Bozeman city limits and just west of North 19th Avenue a 53.77
acre site recently sold for $1,345,000 or $ .57/SF. This site is located along East Valley Center Road and has
good exposure to Interstate 90. This site was purchased with the intent to develop with a residential
subdivision however city water and sewer had to be extended on site.
J. Michael Joki, MAI, SRA
HELENA, MONTANA
42
At the southern end of the subject’s neighborhood there is a 44,660 SF site that was purchased on May
1, 2013 for $950,000 or $21.27/SF. This is essentially a 1 acre site within Bozeman’s central business district
located at the corner of East Lamme Street and North Tracy Avenue. The buyer had to purchase four parcels
of land to assemble this tract, raze the building improvements, and is currently marketing three and four
bedroom town house units that will range in size from 2,400 SF to 3,500 SF. Upon completion this site will
be developed with 20 town home sites. Because of the high density development, its smaller size and location
on the edge of the CBD this site is far superior when compared to the subject property
It is my opinion the subject property has a current market value of $3.00 to $4.00/SF which is mostly
substantiated by Comparable No. 1 after adjustments were made for entitlements. The parcel of land that
lies directly north of Comparable No. 1 that is under contract at $5.63/SF is clearly superior to the subject
property. Comparables No. 2 and No. 3 provide support to my value estimate however they are larger sites
and as expected have sold at a lower price per square foot. Comparables No. 4 and No. 5 are both smaller
sites that have inferior locations, lack city services and their highest and best use is for light industrial use only.
It is my opinion the subject site has a value of $3.50/SF.
The following value conclusion assumes that the subject site is vacant (building improvements razed)
and more or less ready for development. After this value conclusion a discussion about demolition costs will
be provided and a final estimate of market value will be concluded.
$3.50 x 352,313 SF = $1,233,096
$1,233,000 (R)
D e m o l i t i o n C o s t s
As shown in the addenda I have obtained a cost estimate from H&H Earthworks to have the building
and site improvements razed and ready this site for development. Rob Smith, Estimator for H&H
Earthworks, provided me the cost estimate and shows the demolition cost for all 13 buildings and a category
for miscellaneous site work. The cost to raze this site is shown at $199,532.57 or essentially $200,000.
I was asked to determine if the mechanical shop and the trapezoidal shaped storage building could
be disassembled and relocated. I spoke to three local contractors to obtain bids and each contractor, including
H&H Earthworks, declined to give me a bid because they explained it would be difficult to disassemble,
relocate and rebuild these buildings on another site. Even though these are pre-manufactured buildings it has
been the contractor’s experience that the bulidings very rarely reassemble like they are supposed to.
I spoke with Ron Herman who is the District Manager for Varco Pruden Buildings which is the
manufacturer of the mechanic shop. Mr. Herman explained these buildings are difficult to take apart and
J. Michael Joki, MAI, SRA
HELENA, MONTANA
43
reassemble on another site and also any interior finish, i.e. insulation and sheet rock on the walls or interior
office finish will all be lost in the move. Another concern Mr. Herman had was this building was built in 1995
and most likely would not meet today’s building codes for this type of structure so there may be some issues
with the local building department concerning reconstruction of this building. For these reasons relocation
of either building does not appear to be reasonable.
R e c a p u l a t i o n
Estimated site value “as if” building improvements are razed:$1,233,000
Cost to raze the building and site improvements:$ 200,000
“As is” Market Value Estimate:$1,033,000
J. Michael Joki, MAI, SRA
HELENA, MONTANA
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VALU E EST I M AT E AN D C E R T I F I C AT I O N
The undersigned does hereby certify that, to the best of his knowledge and belief, except as otherwise
noted in this appraisal report:
1.the statements of fact contained in this report are true and correct.
2.the reported analysis, opinions, and conclusions are limited only by the reported assumptions and
limiting conditions and/or those found in the letter of engagement or appraisal consultation contract
authorizing this report and are my personal, impartial, and unbiased professional analysis, opinions,
and conclusions.
3.I have no present or prospective interest in the property that is the subject of this report, and I have
no personal interest or bias with respect to the parties involved.
4.I have performed no services, as an appraiser or in any other capacity, regarding the property that is
the subject of this report within the three year period immediately preceding acceptance of this
assignment.
5.I have no bias with respect to the property that is the subject of this report or to the parties involved
with this assignment.
6.my engagement in this assignment was not contingent upon developing or reporting predetermined
results.
7.my 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. This appraisal assignment was not based
on a requested minimum valuation, a specific valuation or the approval of a loan.
8.my analysis, opinions and conclusions were developed, and this report has been prepared, in
conformity with The Uniform Standards of Professional Appraisal Practice and with the
requirements of the Code of Professional Ethics and the Standards of Professional Practice of the
Appraisal Institute.
J. Michael Joki, MAI, SRA
HELENA, MONTANA
45
9.the use of this report is subject to the requirements of the Appraisal Institute relating to review by
its duly authorized representatives.
10.as of the date of this report, I, J. Michael Joki, have completed the requirements of the continuing
education program of the Appraisal Institute.
11.I have made a personal inspection of the properties that are the subject matter of this report.
12.no one provided significant real property appraisal assistance to the person signing this report.
13.I am currently licensed in the State of Montana (Certificate #152) as a Certified General Real Estate
Appraiser, and hold the MAI and SRA designations conferred by the Appraisal Institute. Regarding
the Competency Provision of USPAP I further attest that over the past 26 years I have had
substantial approved education and experience in the appraisal of residential and commercial
properties. Specifically I have appraised a variety of residential, light industrial and commercial land
parcels in western Montana.
Based upon all the elements of which I am aware and which could reasonably affect value, I have
estimated the “as is” market value of the subject property, as of November 12, 2013 , to be:
O N E M I L L I O N T H I R T Y -T H R E E T H O U S AN D D O L L AR S
$1,0 3 3 ,0 0 0 *
November 25, 2013
Date J. Michael Joki, MAI, SRA
*Subject to the Hypothetical and Extraordinary Conditions as shown on page 7.
J. Michael Joki, MAI, SRA
HELENA, MONTANA
46
AD D EN D A
J. Michael Joki, MAI, SRA
HELENA, MONTANA
B U I LD I N G D ESC R I P T I O N AN D P H O T O GR AP H S
Mechanics shop is a pre-manufactured (Varco Pruden) building that was constructed in 1995
and is 80' x 100' or 8,000 SF. This building has seven 16' overhead doors, is a steel frame building
wrapped in metal siding and roofing. The wall height is 20' and the reinforced concrete slab supports
two cranes that are mounted directly into the floor. The interior has two finished offices on the main
level, a stock or equipment room and a ½ bathroom On the mezzanine level there is a lunch room and
a storage room. All photographs were taken November 12, 2013 by J. Michael Joki, MAI, SRA.
Rear view. Front view.
Shop area. Shop area.
Mezzanine level lunch room
B U I LD I N G D ESC R I P T I O N AN D P H O T O GR AP H S
S to ra ge b u ild in g is a pre-manufactured “Star” building that is 40' x 90' or 3,600 SF. This
building has a concrete foundation which asphalt flooring. The steel frame building is wrapped with
metal walls and roofing and has a modified gambrel or trapezoidal shape. There is one 18' overhead
door. On the west side of the building there is a 12' high covered but opened end storage structure.
This building has no insulation and no heat. All photographs were taken November 12, 2013 by J.
Michael Joki, MAI, SRA.
Front view.Rear view.
Covered storage on the west side of building. Interior view.
B U I LD I N G D ESC R I P T I O N AN D P H O T O GR AP H S
Cold storage/chemical building is an old timber frame, low quality cold storage building that
is 4,350 SF. There are 5 overhead doors on the east side of the building. The north end of the building
has a finished room that is used to mix chemicals. All photographs were taken November 12, 2013 by
J. Michael Joki, MAI, SRA.
Six bay garage and commercial office is a 2,784 SF building that has six overhead doors. The
interior of the garage is sheet rocked, taped and painted and there are ceiling fans. One bay has been
finished as office space. All photographs were taken November 12, 2013 by J. Michael Joki, MAI, SRA.
B U I LD I N G D ESC R I P T I O N AN D P H O T O GR AP H S
Tire shed is a 1,232 SF steel frame building that is wrapped in metal walls and a metal roof
surface. There are two 12' overhead doors however there is no heat or electrical service to this building.
All photographs were taken November 12, 2013 by J. Michael Joki, MAI, SRA.
Carpenter/facilities maintenance shop is a 1,120 shop building plus a 96 SF office addition
that has one 10' overhead door. The interior of the shop is sheet rocked, taped and painted and has
overhead forced air heating. All photographs were taken November 12, 2013 by J. Michael Joki, MAI,
SRA.
B U I LD I N G D ESC R I P T I O N AN D P H O T O GR AP H S
The small storage building is 17' x 32' or 544 SF. This building has metal walls and roof
surface, and is in poor condition. All photographs were taken November 12, 2013 by J. Michael Joki,
MAI, SRA.
This utility shed is 10' x 19' or 190 SF. This building has a metal frame, wall and roof surface
and electrical service. There is one pedestrian door and the floor is a gravel surface. All photographs
were taken November 12, 2013 by J. Michael Joki, MAI, SRA.
The field office is 11' x 52' or 572 SF. This manufactured building has metal siding, metal
skirting around its base and has a dated interior finish. The interior is finished with one office, one
bathroom and then an open main office area. All photographs were taken November 12, 2013 by J.
Michael Joki, MAI, SRA.
B U I LD I N G D ESC R I P T I O N AN D P H O T O GR AP H S
The main field office is 45' x 180' or 8,100 SF. This building has eleven 10' overhead doors,
a concrete foundation, metal walls and roof surface. This wood frame building is low quality and in
average condition. The garage bays are sheet rocked, taped and painted and have overhead heating.
Near the middle of the building there is a finished office and lunch room. All photographs were taken
November 12, 2013 by J. Michael Joki, MAI, SRA.
The paint shop is 35' x 44' or 1,540 SF. This building has two 12' overhead doors and two
pedestrian doors. This building has a concrete foundation, metal walls and roof surface. This low
quality building is in below average condition. All photographs were taken November 12, 2013 by J.
Michael Joki, MAI, SRA.
B U I LD I N G D ESC R I P T I O N AN D P H O T O GR AP H S
The construction office is 24' x 60' or 1,440 SF. This wood frame building has wood siding
and asphalt shingle roof surface and an access at each end of the building. The interior of this building
is finished with two offices, a ½ bathroom and open span office area which has a dated finish. This
average quality building is in below average condition. All photographs were taken November 12, 2013
by J. Michael Joki, MAI, SRA.
The main office building has 9,100 SF on the main level and 1,008 SF on the upper level. It
appears this building has had several additions over the years as there are various roof lines and quality
of material used throughout this building. There is a concrete foundation, metal walls and roof surface
around this timber frame building. The interior is comprised of a shop/lab area, garage space,
conference room, offices, cubicle style office space area, a welding shop and restrooms. The second
level is finished with a ½ bathroom, two large office areas and unfinished storage space. All
photographs were taken November 12, 2013 by J. Michael Joki, MAI, SRA.
B U I LD I N G D ESC R I P T I O N AN D P H O T O GR AP H S
All photographs were taken November 12, 2013 by J. Michael Joki, MAI, SRA.
COMPARABLE LAND SALE NO. 1
JOKI & ASSOCIATES REAL ESTATE APPRAISERS
PO Box 281, Helena, MT 59624, (406) 442-2159
Location: ½ block south of Oak Street and east side of Manzanita Drive in Bozeman, Montana.
Site Data:
1. Size : 4.49 acres of 195,584 SF
2. Zoning: R-3
Photo Data:
1. Date: November 20, 2013
2. Taken From: Manzanita Drive
3. Facing: North
4. Taken By: J. Michael Joki, MAI, SRA
5. Comp: Boz.007
Current Use: Platted Subdivision
Legal Description:
Lots 1 and 4 through 16, Block 1; Lots 1 through 4 and 7 through 14, Block 2; and Lots 2 through 14, Block
3 of Oak Meadows Subdivision, according to the official plat thereof on file and of record in the office of the County
Clark and Recorder of Gallatin County, Montana (Plat J-459).
Grantor: RES-MT Oak Meadows, LLC Grantee: Pierce Ironwood, LLC
Recorded Sales Price: $1,175,000 Confirmed Sales Price: $1,175,000
Instrument: Warranty Deed Confirming Party & Phone No.: Selling Agent - Kasey Harte
Recorded: August 16, 2013 (406) 570-9031
Recording Info.: 2459601 Confirmed By: J. Michael Joki, MAI, SRA
Financing: Cash to the Seller Confirmation Date: November 22, 2013
Property Description:
This 4.49 acre site is located ½ block south of Oak Avenue between North Nineteenth and North Seventh
Avenue. This site has level topography at road grade and all city services and utilities have been installed. This site
is platted for 20 duplex town-home lots and 10 detached single family residential lots and therefore sold as a fully
entitled parcel of land. It was the selling agent’s opinion the value of the entitlements was worth at least $2.00 or
$3.00/SF.
This property was listed for sale at $1,275,000 and sold for $1,175,000 after 135 days on the market.
Indication At Time Of Sale: $1,175,000 ÷ 195,584 SF = $6.01/SF.
COMPARABLE LAND SALE NO. 2
JOKI & ASSOCIATES REAL ESTATE APPRAISERS
PO Box 281, Helena, MT 59624, (406) 442-2159
Location: At the intersection of Sacco and Tschache Lane, approximately 1 block east of North 19th Avenue,
Bozeman, Montana.
Site Data:
1. Size : 15.749 acres or 686,026 SF
2. Zoning: B-2
Photo Data:
1. Date: November 20, 2013
2. Taken From: Sacco Drive
3. Facing: Northeast
4. Taken By: J. Michael Joki, MAI, SRA
5. Comp: Boz.006
Current Use: Undeveloped
Legal Description:
Lot 3A of Minor Subdivision No. 407A and Saccoccia Common Open Space of the Saccoccia Minor
Subdivision No. 407, City of Bozeman, Gallatin County, Montana.
Grantor: Bank of Bozeman Grantee: Christian Center First Assembly of God of Bozeman, Inc.
Recorded Sales Price: $1,100,000 Confirmed Sales Price: $1,100,000
Instrument: Warranty Deed Confirming Party & Phone No.: Listing Agent - Lindsey Dingman
Recorded: November 9, 2012 (406) 579-1915
Recording Info.: 2431688 Confirmed By: J. Michael Joki, MAI, SRA
Financing: Cash to the Seller Confirmation Date: November 22, 2013
Property Description:
This 15.749 acre site is located 1 block east of North 19th Avenue directly behind Lowe’s and has good
exposure to Interstate 90. The topography is generally level and city water and sewer service are available.
The listing agent confirmed there is a designated wetland area on this site and the usable area is more or less
12.36 acres.
The listing agent confirmed this property was listed for sale $1,500,000 and sold for $1,100,000 after 154 days
on the market. It was the listing agent’s opinion that this site may have sold slightly below its market value because
it was an REO property owned by the Bank of Bozeman and they were motivated to get this asset off their books
before year end. The listing agent explained in today’s market this site may have sold for approximately $ .20/SF
more.
Indication At Time Of Sale: $1,100,000 ÷ 686,026 SF = $1.60/SF.
C O M P A R A B L E L A N D S A L E N O . 3
JO K I & A S S O C IA T E S R E A L E S T A T E A P P R A IS E R S
P O B o x 28 1 , H elen a , M T 5 9 6 2 4 , (4 0 6 ) 4 4 2 -21 5 9
Location: East side of Fowler Avenue and approximately ¼ mile north of Main Street in Bozeman, Montana.
Site Data:
1. Size : 12.25 acres or 533,784 SF
2. Zoning: R-3 and R-4
Photo Data:
1. Date: November 20, 2013
2. Taken From: Fowler Avenue
3. Facing: East
4. Taken By: J. Michael Joki, MAI, SRA
5. Comp: Boz.004
Current Use: Unimproved
Legal Description:
Lot 3 and 4 of the Bozeman Interfaith Housing 2 Minor Subdivision No. 223 and Tract C of the Amended Subdivision
Plat of Tracts 2, 3 and 4 of the Van Horn Subdivision, located in the SW¼ of Section 11, Township 2 South, Range 5 East,
Gallatin County, Montana.
Grantor: First Baptist Church of Bozeman Grantee: Gallatin Valley Land Trust
Sales Price: $800,000 Confirmed Sales Price: $800,000
Instrument: N/A Confirming Party & Phone No.: Listing Agent - Lloyd Mandeville
Recorded: Closing December 6, 2013 (406) 580-9566
Recording Info.: N/A Confirmed By: J. Michael Joki, MAI, SRA
Financing: Will be cash to the seller Confirmation Date: November 21, 2013
Property Description:
This site is comprised of three parcels of land that total 12.35 acres. This site has level topography and is accessed
from Fowler Avenue along the west boundary or Pond Row Road from the north. City water and sewer services are available
but are not extended on to this site. The listing agent explained the high density residential zoning is what attracted buyers
to this property. This property has been under contract with three different buyers who had intent for multi-family
development but found the City of Bozeman requires improvement to Fowler Avenue that will cost approximately $450,000
plus city water and sewer service would have to be extended on site. In addition a creek crosses through the site and requires
a 50' set back on either side of the waterway which eliminates 100' of developable ground for the length of the creek.
Reportedly an engineer has estimated that 9.5 acres of this site is usable ground.
This property is located on the north side of a city park which supports a community fishing pond. The buyer of this
property is the Gallatin Valley Land Trust and reportedly after this transaction closes the western 7.56 acres will be sold to the
City of Bozeman and the eastern most parcel (4.69 acres) will be sold to a private party. The eastern 4.69 acres is zoned R-3
and can be accessed from Pond Row Road so upon development Fowler Avenue will not have to be improved.
This property was listed for sale at $895,000 and is currently under contract at $800,000 and is scheduled to
close on December 6, 2013. This property has been on the market for approximately one year and has been under contract
three times with different buyers during this time period. The listing agent explained the high density residential zoning was
certainly a positive attribute while marketing this property but the City of Bozeman requirement to improve was a limiting
factor and weakened the feasibility for the buyers who intended to develop this site with a multi-family development.
Indication At Time Of Sale: $800,000 ÷ 533,784 SF = $1.50/SF
COMPARABLE LAND SALE NO. 4
JOKI & ASSOCIATES REAL ESTATE APPRAISERS
PO Box 281, Helena, MT 59624, (406) 442-2159
Location: 133 Maus Lane in Bozeman, Montana.
Site Data:
1. Size : 4.254 acres or 185,304 SF
2. Zoning: M-2
Photo Data:
1. Date: November 20, 2013
2. Taken From: Maus Lane
3. Facing: North
4. Taken By: J. Michael Joki, MAI, SRA
5. Comp: Boz.005
Current Use: Improved with a concrete block warehouse building.
Legal Description:
Tract 20 of Gordon Mandeville State School Subdivision, Gallatin County, Montana.
Grantor: Powder River Company, LLC Grantee: KDFJ, Inc.
Recorded Sales Price: $700,000 Confirmed Sales Price: $700,000
Instrument: Warranty Deed Confirming Party & Phone No.: Listing Agent - Jason Leep
Recorded: August 2, 2013 (406) 556-5005
Recording Info.: 2458172 Confirmed By: J. Michael Joki, MAI, SRA
Financing: Cash to the seller Confirmation Date: November 22, 2013
Property Description:
This 4.254 acre site is located at the north end of Maus Lane. This site has some uneven topography and
city water and sewer services are available but have not been extended on site. This site is zoned M-2 and is
improved with a 4,400 SF concrete block warehouse building. The listing agent explained no contributory value was
given for the building improvements. A creek drainage crosses through the eastern portion of the site and its uneven
topography leaves some of this land as unusable
As shown on the multiple listing sheet this property had a cumulative days on the market of 1,236. This
property was eventually listed for sale at $700,000 and sold for $700,000.
Indication At Time Of Sale: $700,000 ÷ 185,340 SF = $3.78/SF
COMPARABLE LAND SALE NO. 5
JOKI & ASSOCIATES REAL ESTATE APPRAISERS
PO Box 281, Helena, MT 59624, (406) 442-2159
Location: North side of East Griffin Road and just east of Maus Lane in Bozeman, Montana.
Site Data:
1. Size : 2.77 acres or 120,661 SF
2. Zoning: None
Photo Data:
1. Date: November 21, 2013
2. Taken From: East Griffin Road
3. Facing: North
4. Taken By: J. Michael Joki, MAI, SRA
5. Comp: Boz.009
Current Use: Unimproved
Legal Description:
Tract 10, a 2.77 acre site located in the SW¼SW¼ of Section 31, Township 1 South, Range 6 East, Gallatin
County, Montana.
Grantor: Sebena Grantee: N/A
Listing Sales Price: $499,500 Confirmed Sales Price: N/A
Instrument: N/A Confirming Party & Phone No.: Listing Agent - Sue Frye
Recorded: N/A (406) 556-5056
Recording Info.: N/A Confirmed By: J. Michael Joki, MAI, SRA
Financing: Will be cash to the seller Confirmation Date: November 21, 2013
Property Description:
This 2.77 acre site is located on the north side of East Griffin Lane and is surrounded by properties that are
within the city limits of Bozeman however this site remains in the county. The listing agent explained that upon
development this site will be zoned M-1 and city water and sewer service will need to be extended on site. This site
has level topography, is at road grade, and lies adjacent to a railroad spur line.
This property has been available for sale at $499,500 for approximately 30 days and no offers have been
made.
Indication of Listing the Price: $499,500 ÷ 120,661 SF = $4.14/SF