HomeMy WebLinkAboutWells Fargo appeal continuation
Appeal:
Wells Fargo 251770010 16817 Duluth Avenue SE
Subject Property:
PID: 251770010 & 259020211
Address: 16817 Duluth Avenue SE, Prior Lake
Zoning: C-2, General Business District
Building Size: 17,964 square feet (gross building area)
Age: 1983
251770010 259020211 Total Value
2012 Assessed Value: $1,775,000 $120,000 $1,895,000 or $105.49/per sf
2013 Assessed Value: $1,775,000 $120,000 $1,895,000 or $105.49/per sf
The subject property is the Wells Fargo Bank on the corner of Highway 13 and Duluth Avenue SE. The
improvements were constructed in 1983 and are in average to good condition. During our last inspection
in November 2012, there was no deferred maintence indicated or observed. The current assessed value
for both parcels combined is is $1,895,000 which equates to $105.49 per square foot of gross buidling
area2 comparable rentals for consideration and a Net
Operating Income Proforma as a basis for a reduction in market value. There information is included
with their application. It should be noted that a request for a rent roll, lease information operating history
was made for the property as required by the application, however, as of the date of submission, we have
not received any of the requested data. Additional information on the following pages is also included for
your consideration.
Savage Crossings
is a 1-story building with a partial basement in Savage that was constructed in 2004.
This is also one of the two comparables submitted by the appellant. This property has a gross building
area of 16,946 square feet and sold in April 2011 for $2,560,000. The sale price equates to $146.35 per
square foot. This property had been vacant since construction until 2011 when Associated Bank leased a
majority of the building. The rental rate was $20.00 net per square foot. A map of this property is shown
below.
Merchants Bank
is located in Rosemont and consists of 1-story building plus partial basement that sold
November 2011 for $1,335,000. This property has a gross building area of 11,310 and the sale price
equates to $118.04 per square foot. A map of this property is shown below.
Riverland Bank
is a 2-story on grade building in Jordan with a gross building area of approximately
12,870 square feet. Riverland Bank was leasing space in the building until August 2012 when they
purchased the building. When they were leasing, the rental rate was $20.00 net per square foot. They
purchased the building for $1,825,000. The sale price equates to $141.80 per square foot. A map of this
property is shown below.
identity is
confidential, however, this bank just signed a lease agreement for $16.00 net per square foot.
There are several office buildings in the area which are leasing office space which ranges from $8.00 to
$16.00 net per square foot depending on location. A summary of the sale and lease information is shown
below.
This survey shows that the sale price per square on the comparable properties that sold ranges from
$118.04 to $146.35. This range is higher the market value per square foot of the subject property which is
$105.49. This survey also shows that spaces leased to banks generally lease at a higher rate than standard
office space. As a result, the main level bank space of the subject property should have a higher rate than
the remaining space at the subject. Shown on the next page is a reconstructed NOI proforma that is
similar to the appellants with the exception of the rental rate of the bank space. I have estimated the main
level bank space at $16.00 net per square foot which is at the low end of the rental comparables. For the
remaining office space of the subject, I have used the appellants $10.00 net per square foot which is
reasonable.
NOI Proforma Analysis
Based on the income analysis above, the estimated value using the income appoach is $1,940,000 which
supports the current assessed value of the subject property which is $1,895,000.
Based on all of the available information, it is my opinion that there is no basis for a reduction in market
value.
Recommendation:
We recommend that the board affirm the value of $1,775,000 for parcel 251770010 and affirm the value
of $120,000 for parcel 259020211 for a total market value of $1,895,000.