APPRAISAL OF REAL PROPERTY

Transcription

APPRAISAL OF REAL PROPERTY
Deerhurst Resort – Development Lands
1235 Deerhurst Drive
Huntsville, Ontario P1H 2E8
Prepared For:
Skyline International Developments Inc.
800 – 90 Eglinton Avenue East
Toronto, Ontario M4P 2A5
Prepared By:
Cushman & Wakefield Ltd.
Valuation & Advisory
33 Yonge Street, Suite 1000
Toronto, ON M5E 1S9
C&W File ID: 14-445-900040
CONFIDENTIAL
Cushman & Wakefield Ltd.
33 Yonge St., Suite 1000
Toronto, ON M5E 1S9
(416) 862 0611 Tel
(416) 359 2613 Fax
www.cushmanwakefield.com
May 12, 2014
Mr. Vadim Shub
Chief Financial Officer
Skyline International Developments Inc.
800 – 90 Eglinton Avenue East
Toronto, Ontario M4P 2A5
Re:
Appraisal of Real Property
In a Narrative Appraisal Report
Deerhurst Resort – Development Lands
1235 Deerhurst Drive
Huntsville, Ontario P1H 2E8
C&W File ID:
14-445-900040
Dear Mr. Shub:
In fulfillment of our agreement as outlined in the Letter of Engagement, we are pleased to transmit our appraisal
of the above-captioned property in a narrative report. The effective date of value is March 31, 2014.
This appraisal report has been prepared in accordance with our interpretation of your institution’s guidelines and
the Canadian Uniform Standards of Professional Appraisal Practice (CUSPAP) as adopted by the Appraisal
Institute of Canada.
It is understood that the intended use of this report is for: a) In order to substantiate the value of the assets for
financial reporting in compliance with IFRS requirements; b) Assistance in the decision making process relating to
financing, accounting and / or auditing matters; c) To support Skyline’s auditors; d) For regulatory compliance; e)
For financing purposes; and f) in conformity with the requirements of IFRS 13 and IAS 40.
The undersigned acknowledges that enclosed appraisal, may be used by Vadim Shub of Skyline International
Development Inc., Mishorim Development Group Ltd. And Schwartz Levitsky Feldman LLP Gai, Goffer, Yanev,
Guilman, Udem and Co., as part of their audit procedure, and as such, we give our consent that the said
appraisal may be attached to any report and / or prospectus which, pursuant to the laws and regulations of the
State of Israel, must be publically filed with said financial statements.
The purpose of this report is to assist the client in the decision making process relating to financial accounting and
or auditing matters, including reporting the value of the subject properties in accordance with IFRS and financing
purposes. Our mandate is to provide an opinion of current market value of the ‘development lands’. These lands
are comprised of different parcels, with different attributes and characteristics. We have, therefore, appraised the
lands in different components: the waterfront lands, the non-waterfront lands, the unsold residential development
lots and the waterfront lands for condominium development. Our previous appraisal for the subject property was
effective for December 31, 2013. This valuation is an update from the December 31, 2013 appraisal report. Since
this time, the Client has submitted a complete planning application to the Town and Region with regards to the
Village Centre component of the lands. Consequently, this area is the only component that has seen an increase
in value.
CUSHMAN & WAKEFIELD LTD.
SKYLINE INTERNATIONAL DEVELOPMENTS INC.
MR. VADIM SHUB
MAY 12, 2014
PAGE 2
MARKET VALUE AS IS – WATERFRONT LANDS
Based on the agreed to Scope of Work, and as a result of our analysis, we have developed an opinion that the
value of the Fee Simple estate of the approximately 77.04 acres of excess lands associated with the Deerhurst
Resort (commonly referred to as the ‘Lakeside Golf Course Lands, Crozier and Contact, Callacott / Lindsay /
Turnbull Stable Lands’), subject to the assumptions and limiting conditions, certifications, extraordinary and
hypothetical conditions, if any, and definitions, March 31, 2014, is:
TWO MILLION SEVEN HUNDRED THOUSAND DOLLARS
$2,700,000 or $35,000 (rounded) per acre
MARKET VALUE AS IS – NON-WATERFRONT LANDS
value of the Fee Simple estate of the approximately 360.58 acres of excess lands associated with the Deerhurst
Resort (lands comprised of 193.99 acres of excess land referred to as the ‘Running Bear and Nissan Lands’,
21.25 acres of future commercial land situated within the Running Bear and Nissan Land Area, 100.01 acres
referred to as the ‘Deerhurst Highlands Lands1’ and 38.02 acres referred to as Deerhurst Highlands 2 and the
11.31 acres referred to as the ‘Turnbull Lands’, subject to the assumptions and limiting conditions, certifications,
extraordinary and hypothetical conditions, if any, and definitions, on March 31, 2014 is:
FIVE MILLION FIVE HUNDRED AND SEVENTY THOUSAND DOLLARS
$5,570,000
$7,000 per acre for Excess Lands (339.33 acres) & $150,000 per acre for Commercial Lands (21.25 acres)
MARKET VALUE AS IS – UNSOLD RESIDENTIAL DEVELOPMENT LOTS
value of the Fee Simple estate of the 71 un-sold development lots associated with the Deerhurst Resort, subject
to the assumptions and limiting conditions, certifications, extraordinary and hypothetical conditions, if any, and
definitions, on March 31, 2014, is:
ELEVEN MILLION ONE HUNDRED EIGHTY-FIVE THOUSAND DOLLARS
$11,185,000 or $158,000 (rounded) per lot
The opinions of value include the land and any associated services.
MR. VADIM SHUB
MAY 12, 2014
PAGE 3
MARKET VALUE AS IS – WATERFRONT LANDS FOR CONDOMINIUM
DEVELOPMENT
value of the Fee Simple estate of the approximately 8.60 acres of lands - of which 173 residential condominium
units can be developed - associated with the Deerhurst Resort (lands that are part of a larger parcel located on a
peninsula, in the southeastern sector of the property, and which currently bear several underutilized or vacant
buildings), subject to the assumptions and limiting conditions, certifications, extraordinary and hypothetical
conditions, if any, and definitions, on March 31, 2014, is:
SEVEN MILLION THREE HUNDRED AND FIFTY THOUSAND DOLLARS
$7,350,000 or $42,500 per developable condominium unit
The opinions of value include the land and any associated services.
MARKET VALUE AS IS – DEERHURST
SANCTUARY/WOODLAND HEIGHTS
value of the Fee Simple estate of the approximately 30 un-sold lots associated with the Deerhurst Resort subject
to the assumptions and limiting conditions, certifications, extraordinary and hypothetical conditions, if any, and
definitions, on March 31,2014, is:
FOUR MILLION TWO HUNDRED AND NINETY THOUSAND DOLLARS
$4,290,000 or $143,000 per lot
MARKET VALUE AS IS – DEERHURST RESORT VILLAGE CENTRE
In the September 31, 2013 report, the Deerhurst Resort Village Centre Lands were considered rural lands and
valued as such. At that time the owners had applied to Town officials to rezone the said the lands (referred to as
Resort Village Centre lands – 51.3 acres) to permit a mixed-use residential and commercial development
consisting of 791 residential units and 46,758 square feet of commercial space. On November 29, 2013, the
owners applied for approval of a plan of subdivision regarding the Village Centre lands. In that submission,
extensive studies (planning, environmental, traffic, servicing, geotechnical) were submitted. However, as of
December 31, 2013, the application was deemed incomplete and required further preparation to complete the
application.
Consequently, the value of the Village Centre Lands, in the December 31, 2013 report, reflected that the lands
are in transition and are no longer considered “rural lands” and likely to be approved for a mixed use commercial
residential development as proposed, however have still not received acknowledgment from the Town or Region.
The said lands were previously valued in the September 2013 report at $6,600 per acre reflecting their rural
zoning and size.
Similar to the waterfront land component, the Village Centre lands have excellent views of the water. In
December 2013 to reflect the reduced size of the parcel, the site plan application process and potential approval,
MR. VADIM SHUB
MAY 12, 2014
PAGE 4
the lands have been valued at $35,000 per acre. Since December 31, 2013, Skyline and its consultants have met
with staff at the Town of Huntsville and The District of Muskoka to review planning applications, held a public
open House at Deerhurst, revised a submission of the Official Plan Amendment., responded to questions from the
Peninsula Lake Association, received planning approval for the Road allowance closing near Canal Road and
deemed to have a complete application by the Town of Huntsville Director of Planning and Sustainability.
On March 20, 2014, the application was considered “complete” but there are still outstanding issues that need to
resolved such as what the Village Centre will look like, the mix of uses ( be it permanent or tourist
accommodation), servicing issues, urban design issues, and the protection of environmentally sensitive areas.
The approval process depends on how timely Skyline can address the above issues. Chris Marshall, Director of
Planning and Sustainability indicated that subject to the above conditions being met approval is to be expected in
less than six months.
However, as of March 31 2014, the said lands had not yet received approval. We understand that they have
been received favorably by the Town and the Region on March 20, 2014. Therefore, a higher rate is anticipated
based on the future development potential and support from the Town and Region.
Although not yet approved, the Village Centre Area of the Subject property is envisioned for a mixed-use
residential and commercial development. The development is envisioned for 791 residential units and
approximately 46,758 square feet of commercial gross floor area (equates to approximately 4.29 acres of
commercial land required for said development). However, based on the planning status as of March 31, 2014
and based on the agreed to Scope of Work, and as a result of our analysis, we have developed an opinion that
the value of the Fee Simple estate of the 47.13 acres associated with the Deerhurst Resort subject to the
assumptions and limiting conditions, certifications, extraordinary and hypothetical conditions, if any, and
definitions, on March 31, 2014, was:
SIX MILLION NINE HUNDRED AND FIFTY THOUSAND DOLLARS
$6,950,000
The analysis contained in this appraisal is based upon assumptions and estimates that are subject to uncertainty
and variation. These estimates are often based on data obtained in interviews with third parties, and such data
are not always completely reliable. In addition, we make assumptions as to the future behavior of consumers and
the general economy, which are highly uncertain. However, it is inevitable that some assumptions will not
materialize and unanticipated events may occur that will cause actual achieved operating results to differ from the
financial analyses contained in this report and these differences may be material. Therefore, while our analysis
was conscientiously prepared on the basis of our experience and the data available, we make no warranty that
the conclusions presented will, in fact, be achieved. Additionally, we have not been engaged to evaluate the
effectiveness of management and we are not responsible for future marketing efforts and other management
actions upon which actual results may depend.
We did not ascertain the legal, engineering, and regulatory requirements applicable to the property, including
zoning and other provincial and local government regulations, permits and licenses. No effort has been made to
determine the possible impact on the property of present or future federal, provincial or local legislation, including
any environmental or ecological matters or interpretations thereof. With respect to the demand analysis, our work
did not include analysis of the potential impact of any significant rise or decline in local or general economic
conditions.
MR. VADIM SHUB
MAY 12, 2014
PAGE 5
We believe, based on the assumptions employed, as well as our selection of investment parameters for the
subject, that the value conclusions represent market prices achievable within 8 to 12 months exposure prior to the
date of value.
We take no responsibility for any events, conditions, or circumstances affecting the market that exists subsequent
to the last day of our fieldwork, March 31, 2014.
The value opinion in this report is qualified by certain assumptions, limiting conditions, certifications, and
definitions. We particularly call your attention to the extraordinary assumptions and hypothetical conditions listed
below.
The property was inspected on March 29, 2014.
EXTRAORDINARY ASSUMPTIONS
For a definition of Extraordinary Assumptions please see the Glossary of Terms & Definitions.
This appraisal does not employ any extraordinary assumptions.
HYPOTHETICAL CONDITIONS
For a definition of Hypothetical Conditions please see the Glossary of Terms & Definitions.
This appraisal does not employ any hypothetical conditions.
This letter is invalid as an opinion of value if detached from the report, which contains the text, exhibits, and
Addenda.
Respectfully submitted,
Chris Vardon, AACI
Vice President
chris.vardon@ca.cushwake.com
Phone Office 416.359.2505
Fax 416.359.2602
DEERHURST RESORT – DEVELOPMENT LANDS
TABLE OF CONTENTS
TABLE OF CONTENTS
EXECUTIVE SUMMARY ----------------------------------------------------------------------------------------------------------------------------------------- I
TERMS OF REFERENCE --------------------------------------------------------------------------------------------------------------------------------------- 1
MARKET ANALYSIS --------------------------------------------------------------------------------------------------------------------------------------------- 5
PROPERTY OVERVIEW -------------------------------------------------------------------------------------------------------------------------------------- 18
DEERHURST SANCTUARY SITE PLAN-------------------------------------------------------------------------------------------------------------- 25
HIGHEST AND BEST USE ----------------------------------------------------------------------------------------------------------------------------------- 29
PROPERTY VALUATION ------------------------------------------------------------------------------------------------------------------------------------- 31
RECONCILIATION AND FINAL VALUE OPINION ---------------------------------------------------------------------------------------------- 70
ADDENDA CONTENTS --------------------------------------------------------------------------------------------------------------------------------------- 71
ASSUMPTIONS AND LIMITING CONDITIONS -------------------------------------------------------------------------------------------------- 72
CERTIFICATION OF APPRAISAL ----------------------------------------------------------------------------------------------------------------------- 75
GLOSSARY OF TERMS & DEFINITIONS ----------------------------------------------------------------------------------------------------------- 77
SUBJECT PROPERTY PHOTOGRAPHS ------------------------------------------------------------------------------------------------------------- 81
SUMMARY OF CHANGES IN APPRAISAL FROM DECEMBER 2013 ------------------------------------------------------------- 82
EXECUTIVE SUMMARY
REGIONAL MAP
EXECUTIVE SUMMARY
I
LOCAL AREA MAP
EXECUTIVE SUMMARY
II
MAP OF SUBJECT LANDS
EXECUTIVE SUMMARY
III
EXECUTIVE SUMMARY
IV
EXECUTIVE SUMMARY
V
TERMS OF REFERENCE
1
TERMS OF REFERENCE
PURPOSE AND INTENDED USE OF THE APPRAISAL
The purpose of this appraisal is to estimate the current market value of the fee simple estate of the development
lands associated with the Deerhurst Resort. The intended user is Skyline International Development Inc.,),
Mishorim Development Group Ltd. Schwartz Levitsky Feldman LLP, Gai, Goffer, Yanev, Guilman, Udem and Co.,
as part of their audit procedure.
The subject lands include a mix of non-waterfront lands comprising of the 498.40 acres located to the north of
Highway 60 known as the Running Bear and Nissan Lands as well as the Turnbull Lands and the Deerhurst
Highlands Lands. The waterfront development lands (77.04 acres) comprise of three parcels known as the
Crozier and Contant Lands (55.95 gross acres / 11 net developable acres) and the Lakeside Golf Course Lands
(48.23 net acres) and Callacott/Lindsay/Turnbull Stable Lands (64.94 net acres) less 51.26 acres of Resort
Village lands - Driving Range, Plateau, West Riverfront. To the northwest of the subject, there are 71 unsold
residential development lots (each ranging from 0.31 acre to 0.94 acre in size). Additionally, there are 8.60 acres
of waterfront lands for condominium development, which are part of a larger parcel located on a peninsula in the
southeastern part of the property. We understand that the current improvements of a lodge, terrace, and cottages,
currently being vacant or underutilized, are planned to be demolished. In addition, Woodland Heights, now known
as Deerhurst Sanctuary comprises 32 estate residential lots was acquired in August 2012 will be valued. Of the
initial 32 lots, 2 have recently sold in mid-2013; resulting in the valuation of the remaining 30 residential lots.
The Deerhurst Resort Village Centre lands comprise four parcels totalling 51.26 net acres. There is a current
zoning amendment and official plan amendment application (December 2, 2013) before the Town of Huntsville for
639 residential accommodation units, 8 townhomes and 144 hotel suites for a total of 791 units reflecting a
density of 15.43 units per acre. The Village Centre will also include 46,758 square feet of potential retail space.
The purpose of this report is to assist the client in the decision making process relating to financial accounting
and or auditing matters, including reporting the value of the subject properties in accordance with IFRS and
financing purposes
DEFINITION OF MARKET VALUE
For the purposes of this valuation, market value is defined as:
The most probable price which a property should bring in a competitive and open market under all conditions
requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is
not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of the specific date and
the passing of title from seller to buyer under conditions whereby:
•
Buyer and seller are typically motivated;
•
Both parties are well informed or well advised, and acting in what they consider to be in their best
interests;
•
A reasonable time is allowed for exposure in the open market;
TERMS OF REFERENCE
2
•
Payment is made in terms of cash in Canadian Dollars or in financial arrangements comparable
thereto; and
•
The price represents the normal consideration for the property sold unaffected by special or creative
financing or sales concessions granted by anyone associated with the sale.
REASONABLE EXPOSURE TIME ESTIMATE
Exposure time is always presumed to precede the effective date of the appraisal. It may be defined as:
"The estimated length of time the property interest being appraised would have been offered on
the market prior to the hypothetical consummation of a sale at market value on the effective date
of the appraisal. It is a retrospective estimate based upon an analysis of past events assuming a
competitive and open market."
Reasonable exposure time is always presumed to precede the effective date of the appraisal. The estimates of
value reported in this Appraisal are based on an exposure time of about approximately 8 to 12 months.
EFFECTIVE VALUATION DATE
The effective date of this valuation is March 31, 2014.
DATE OF INSPECTION
The subject properties were inspected by Chris Vardon on March 29, 2014.
INTENDED USER
The intended user of this report is Vadim Shub of Skyline International Development and Mishorim Development
Group Ltd. And Schwartz Levitsky Feldman LLP Gai, Goffer, Yanev, Guilman, Udem and Co. as part of their audit
procedure.
DATE OF THE REPORT
April 16, 2014
TERMS OF REFERENCE
3
REPORTING STANDARDS
The valuation analysis and the appraisal conveying the estimates of value have been prepared to comply with
Appraisal Standard Rules and Appraisal Standard Comments of the Canadian Uniform Standards of Professional
Appraisal Practice.
As such, the report is in conformity with IFRS 13 and IAS 40, and includes the discussion of appropriate data,
reasoning, and analyses that were used in the appraisal process to develop the opinion of value. Additional
supporting documentation concerning the data, reasoning, and analyses used is retained in the Appraiser’s file.
The depth of discussion contained in this report is specific to the needs of the client and for the intended uses
stated. The appraiser is not responsible for unauthorized use of this report.
ASSUMPTIONS AND LIMITING CONDITIONS
Certain assumptions and limiting conditions have been made with respect to the appraisal of the subject sites.
These are included in the latter part of this report.
EXTRAORDINARY LIMITING CONDITIONS
An Extraordinary Limiting Condition refers to a necessary modification or exclusion of an Appraisal Institute
Standard Rule. Such special circumstances include the inability to complete a property inspection, the purposeful
exclusion of relevant valuation technique, etc.
•
A physical inspection of the comparable sales used in our analysis was not completed.
EXTRAORDINARY ASSUMPTIONS & HYPOTHETICAL CONDITIONS
An Extraordinary Limiting Condition refers to a necessary modification or exclusion of an Appraisal Institute
Standard Rule. Such special circumstances include the inability to complete a property inspection, the purposeful
exclusion of a relevant valuation technique, etc.
•
If not noted by third party sources, topographical constraints were considered to be typical of the general
area.
•
If not noted by third party sources, site access was considered to be generally typical for properties in that
general area.
•
All properties were valued as if vacant – improvements, if any, were not included in this analysis.
•
If not noted, the overall utility of the site is considered typical for other such properties in the area. Note:
Given the class of properties under valuation, site specific features may have a significant impact upon
property value.
•
TERMS OF REFERENCE
4
It is assumed that no environmental contamination exists on the surface or in the soil of the subject
property. The subject’s estimated value is predicated on the assumption that there is no such material
on, in, under, or adjacent to the property that would cause a loss in value.
SCOPE OF THE REPORT
During the course of preparing this valuation:
•
Property-specific information such as relevant land use controls was assembled and analyzed for the
subject property, surrounding area and comparable sales.
•
Aerial photographs were reviewed with regard to lake frontage and possible signs of site access.
•
Pertinent economic data and market data were assembled, analyzed and concluded with a
discussion of overall economic trends.
•
Recent property sales and current offerings within the subject’s market area were researched from
various data sources including MLS and Geowarehouse.
•
Appraisal methodologies and procedures were reviewed for their applicability in the analysis and
processing of the collected market data into an indication of market value for the subject property, as
at the effective date of appraisal.
Additional supporting documentation concerning the data, reasoning, and analyses is retained in the appraiser’s
file. The depth of discussion contained in this report is specific to the needs of the client and for the intended
uses stated.
MARKET ANALYSIS
5
MARKET ANALYSIS
INTRODUCTION
The short and long-term value of real estate is influenced by a variety of factors and forces that interact within a
given region. Regional analysis serves to identify those forces that affect property value and the role they play
within the region. The four primary forces that influence real property value include environmental characteristics,
governmental forces, social factors, and economic trends. These forces determine the supply and demand for
real property which, in turn, affects market value.
The intent of the regional analysis is to review all relevant historical and projected demographic data to determine
whether the subject market area and neighbourhood are likely to experience economic growth, stability, or decline
in the future. These trends are correlated based on their propensity to reflect demand variations.
The subject property is located within the District Municipality of Muskoka, which includes the Town of Huntsville.
An overview of demographic, economic characteristics and trends follow.
MARKET ANALYSIS
6
CANADA - ECONOMIC OVERVIEW
T HE C ANADIAN E CONOMY
With a population of 34.8 million and an annual population growth rate
estimated at 1.1 percent, the Canadian economy is the 8th largest in
the world. Geographically, Canada is the second largest country in the
world at almost 10.0 million km2 (or 3.9 million square miles) and has
the longest coastline and longest border with another country, the
United States.
Known to be rich in natural resources, Canada has vast stores of iron
ore, nickel, zinc, copper, gold, lead, diamonds, silver, coal, petroleum,
natural gas, and is a leading producer of hydropower. Notably, with
180.0 billion barrels of proven oil reserves, Canada has the second
largest reserve in the world, next to Saudi Arabia.
O VERALL T RENDS
Canada’s economy rebounded in July, growing at 0.6 percent, the
fastest monthly pace in two years. The recovery was primarily driven by
improvements in the construction, manufacturing and energy sectors,
according to Statistics Canada. Strong economic growth in July is set to
raise the annualized GDP growth rate to 2.0 percent in the third quarter
of 2013, up from 1.7 percent in the second quarter. Housing markets
also strengthened in the third quarter, and consumer and business
confidence picked up. While exports of consumer goods posted solid
gains, exports of motor vehicles and parts were losing strength.
Moreover, the recent U.S. government shutdown may have a negative
impact on the Canadian economy in the near term.
CANADIAN ECONOMIC
INDICATORS
2013 f
Real GDP
1.6%
Unemployment
7.1%
Employment
Growth
1.2%
Retail
Sales
Y/Y
Change
2.3%
Growth
Employment in Canada was up 1.2 percent in September 2013
compared with 12 months ago. Employment gains were led by the
Housing
Starts
185
construction (+6.5 percent), natural resources (+4.7 percent), and
(000’s)
professional, scientific and technical services (+4.0 percent) industries.
On the other hand, the manufacturing and public administration industries posted year-over-year losses of 4.1
and 3.6 percent, respectively. Next, the housing market rebounded in September, driven by a surge in multifamily starts. Total housing starts in Canada were trending at 194,000 units in September on an annualized basis,
up by 5.3 percent over August. Lastly, the latest retail sales stats showed a 2.7 percent year-over-year increase in
August. TD Economics expect the annualized retail sales growth rate to trend at 2.3 percent in the third quarter,
slightly below the 3.8 percent annualized rate recorded in the second quarter.
F UTURE C ONSIDERATIONS
The recent U.S. government shutdown is expected to have a knock-on effect on the Canadian economy in the
near term. Accordingly, a downgrade in the U.S. economic outlook will likely translate into weaker export gains
than previously expected. BMO Nesbitt Burns project “modest upward revisions” in late 2014 and early 2015. On
the other hand, resurgence in consumer spending and residential investment sets the overall economic growth on
par with the previous forecast – at 1.6 percent. TD Economics expect a moderate improvement in the exports
sector starting in 2014 with growing momentum in 2015.
MARKET ANALYSIS
Real GDP Comparison
Canada Housing Starts
6%
250
4%
200
2%
150
0%
100
-2%
Canada
7
USA
(000’s)
50
-4%
0
2003
2005
2007
2009
2011
2013f
2003
Source: Statistics Canada
*Forecasts – BMO Capital Markets
2005
2007
2009
2011
2013f
Source: Conference Board of Canada
• Real GDP in Canada is likely to maintain its slow
growth pace from last year growing 1.6 percent in
2013, before improving to 2.2 percent in 2014.
According to TD Economics, net exports were a
drag on the overall economic growth in the second
quarter, and could continue to weigh on growth in
the third quarter.
• Exports of motor vehicles and parts were losing
strength over the first half of 2013, as investment
from south of border remained weak. The Canadian
auto sector faced several headwinds including
growing vehicle manufacturing in Mexico.
• According to BMO Capital Markets, housing starts in
Canada averaged 191,000 units (annualized rate) in
the third quarter of 2013, on par with the 190,000
units in the second quarter but significantly higher
than the 175,000 units in the first quarter. The gain
is consistent with increasing sales of existing homes,
which have trended higher since February 2013.
• BMO Capital Markets forecast Canadian housing
starts to soften to 186,000 units in the last quarter of
2013, leading to an annual average rate of 185,000
units in 2013, down 14.0 percent over the peak time
in 2012.
Labour Market – Employment & Unemployment Rate
3%
Employment Growth
Unemployment Rate
Retail Sales Growth
10%
8%
2%
8%
1%
6%
0%
4%
-1%
2%
0%
0%
-2%
6%
4%
-2%
2003
2005
2007
2009
2011
2%
2013f
-4%
2003
2005
2007
2009
2011
2013f
*Forecasts – TD Economics
•
•
About 12,000 new jobs were created in September, • Retail sales in Canada rose 0.2 percent in August,
with the unemployment rate edging down to a 5the fourth monthly gain in the past five months,
year low at 6.9 percent. BMO Capital Markets
according to TD Economics. On a year-over-year
expect employment growth in Canada to average
basis, retail sales were up 2.7 percent in August.
1.2 percent in 2013 while slightly improve to 1.3
• The rebound in consumer spending can be partly
percent in 2014.
attributed to the resurgence in the housing market.
The unemployment rate is forecast to average 7.1
However, with housing activity likely to subside by
percent in 2013, and further drop to 6.8 percent in
the end of the year, along with modest job creation
2014.
and elevated debt levels, TD Economics forecast a
2.6 percent annual average growth rate for 2013, a
slight improvement from 2.5 percent in 2012.
MARKET ANALYSIS
8
THE ONTARIO ECONOMY
Ontario is the most populous province in Canada, with a population of 13.5 million
in 2013, and accounting for roughly 38.5 percent of the national total. The
Conference Board of Canada forecasts that the population in Ontario will continue
to grow, reaching 14.4 million by 2018.
While roughly 77.0 percent of Ontario’s GDP is generated by service sectors, the
province is also Canada's leading manufacturing centre. The top five
manufacturing industries include: transportation equipment, metal products, food
processing, chemical & by-products, and electrical & electronic products.
Ontario is home to the Toronto Stock Exchange - the largest stock exchange in
Canada, the third largest in North America and the seventh largest in the world by market capitalization. Toronto,
with a population of 6.0 million in 2013, passed Chicago to become the fourth most populous city in North
America.
O VERALL T RENDS
Ontario experienced two years of subpar growth during 2012 and 2013
at 1.3 percent and 1.4 percent, respectively. The Ontario government
is dealing with one of the biggest challenges among other Canadian
provinces with more than an $11.0 million deficit. It is expected to
balance the books by 2017-2018.
Ontario’s labour market is undergoing a shift from full time to part time
jobs. According to a report issued in March 2014 by the Canadian
Centre for Policy Alternatives, part time jobs in Ontario rose by 25.0
percent while full time jobs increased only by 16.0 percent. Further,
involuntary part time work has risen 43.0 percent since 2000 and that
number accounts for 32.0 percent of the total part time workers in
2013. Ontario housing market is a bit sluggish since the past few
years. According to Canada Mortgage and Housing Corporation, single
detached housing starts in Ontario in March 2014 are down by 24.0
percent on a year-over-year basis. Modest job growth, a better supplied resale market, and high levels of
apartment units under construction were among the major factors causing the lower housing activity so far this
year. Retail sales in Ontario rose only by 1.8 percent in 2013, and have been dampened by slow income growth
and high levels of household debt.
F UTURE C ONSIDERATIONS
Since the U.S. market accounts for nearly 80.0 percent of Ontario’s total merchandise exports, demand from
south of the border is critical to economic growth in Ontario. Therefore, in the next two years, Ontario is set to
benefit from a weaker Canadian dollar, and strong economic growth in the United States. The machinery,
chemical and primary metal manufacturing industries are expected to reap the most export gains under these
economic conditions. The potential execution of the Ring of Fire project – a massive Chromite mining
development project in Northern Ontario - will have major effects on Ontario economy including job creation,
infrastructure developments, and government revenue. It is estimated that in the short term (the first ten years)
the Ring of Fire will generate up to $9.4 billion in GDP, and $2.0 billion in government revenue. Execution of the
project will, however, depend on rights of the First Nations in that territory, environmental assessments, and lack
of adequate infrastructure in the North.
MARKET ANALYSIS
Real GDP Comparison
9
Ontario Housing Starts
Year-to-Year Change
90
4%
(000’s)
75
2%
60
45
0%
30
-2%
Canada
Ontario
15
0
-4%
2003
2005
2007
2009
2011
2013f
2015f
2003
2005
• Ontario’s GDP growth is expected to stay on par
with the national average during 2014 and 2015 at
2.3 percent and 2.5 percent, respectively.
• In 2013, Ontario auto industry recorded a significant
3.4 percent drop in output. TD Economics projects
further decline in output over the 2014-2015 period,
and auto assembly industry will continue to lose the
market share to lower cost regions in the U.S. and
Mexico. Economic recovery in U.S. auto sales will
support auto producers in Ontario, and in addition
the phasing out of an assembly line at GM Oshawa
will offset part of the projected output decrease.
6%
3%
9%
4%
2%
8%
3%
1%
7%
2%
0%
6%
-1%
5%
-2%
4%
-2%
-3%
3%
-3%
2009
2013
2015f
Ontario Retail Sales Growth
10%
2007
2011
• The downward trend in housing starts in Ontario is
evidenced by the projected 55,000 units for 2014
compared to 60,700 units in 2013.
4%
2005
2009
• Total housing starts in Ontario are down by 4.0
percent during the first quarter of 2014. The biggest
drop in starts came from single-detached homes at
16.0 percent decrease.
Employment & Unemployment Rate - Ontario
2003
2007
2011
2013
2015f
• After cutting down 290,000 jobs throughout the past
thirteen years, the manufacturing sector now
accounts for only 11.0 percent of the overall job
market in Ontario as of year-end 2013.
• Overall job growth in Ontario is expected grow at 0.7
percent by the end of 2014, only half of the rate
posted in 2013. Job growth will pick up again in
2015, pushing the unemployment rate to 7.0
percent, the lowest since 2012.
(% Change)
5%
1%
0%
-1%
2003
2005
2007
2009
2011
2013
2015f
*Forecasts – TD Economics
• TD Economics expects retail sales in Ontario to
grow at 3.1 percent and 4.1 percent in 2014 and
2015, respectively. Projected economic growth in
Ontario should increase confidence and encourage
consumers to spend more.
• The weakening Canadian dollar will discourage
Canadians from cross boarder shopping and will
tend to spend that extra money in Canada.
THE DISTRICT
OF
MARKET ANALYSIS
10
MUSKOKA
The District Municipality of Muskoka was established by Provincial legislation and commenced operations on
January 1, 1971. Muskoka comprises of the following six area municipalities:
•
Town of Bracebridge
•
Town of Huntsville
•
Township of Georgian Bay
•
Township of Lake of Bays
•
Town of Gravenhurst
•
Township of Muskoka Lakes
Muskoka is located just two hours north of Toronto and has been a vacation area of choice in Ontario for well
over 100 years. The District of Muskoka covers an area of approximately 3,890 square kilometers that extends
northerly from Lake Simcoe to the District of Parry Sound, and easterly from Georgian Bay to Algonquin
Provincial Park.
A CCESS
Access to the heart of Muskoka is gained via Highway 11, linking the region with Barrie and Toronto in the south
and North Bay in the north. The recently expanded Highway 400 and Highway 69 provide links to the scenic
Georgian Bay area within the District. Both highways also provide access to Barrie and Toronto in the south and
Sudbury in the north. A series of District roads link the urban centres to the communities and any lakes and
resorts. Muskoka has its own full-service airport and the Pearson International Airport in Toronto is 120 minutes
by car or 45 minutes by air.
The subject property is favourably located off the intersection of Highway 60 and Deerhurst Highlands Drive and
roughly 240 km from Toronto.
Highway 60:
Highway 60 is a provincially maintained west-east highway in Ontario. Travelling
west to east it begins at Highway 11 in Huntsville and ends at Highway
17 in Renfrew. The section between Highway 35 and Highway 41 is part of
the Algonquin Trail Tourist Route. The subject is accessed off Highway 60 at
Deerhurst Highlands Drive.
MARKET ANALYSIS
11
M USKOKA ’ S E MPLOYMENT L ANDS
Employment in Muskoka is supported by a number of different land types, in both urban and rural settings. The
District’s urban-centred municipalities have employment concentrated in downtown core and suburban
commercial nodes, and in industrial areas. Employment in the rural Townships is more varied and dispersed,
linked more directly to the natural resource base than with access to a labour pool, customers and built
infrastructure.
Given the importance of tourism, recreation and cottaging to all the District’s municipalities, it is evident that a
substantial proportion of employment occurs in waterfront resorts, and at such tourist and recreation facilities or
support infrastructure as attractions, golf courses and marinas. Similarly, the importance of construction and its
weighting to smaller employers indicates the role of contractors’ yards or shops in both urban and rural areas.
The designated employment land supply is described in terms of gross and net land areas, where gross refers to
total designated area or the sum of individual parcel total areas. Net vacant land areas are defined by excluding
lands subject to environmental constraints from gross vacant parcel areas. Occupied land areas are calculated as
the difference between total designated land areas and gross vacant lands.
The following summary characterizes the employment land inventories for each municipality.
B RACEBRIDGE
Bracebridge has the District’s largest supply of designated and vacant employment lands. Supply is divided
among seven employment nodes, with the Ecclestone Industrial Area comprising 912 acres of designated
employment land. The E.P. Lee/Robert Dollar Drive Business Area contains 224 acres of designated employment
land; the remaining five small-to-medium business areas range from 25 acres to 99 acres.
There are roughly 358 acres of vacant employment land, concentrated in the Ecclestone Industrial Area (68%,
245 acres), the South Bracebridge Business Area (43 acres), and the E.P. Lee/Robert Dollar Drive Business Area
(40 acres).
G EORGIAN B AY
The employment land inventory in Georgian Bay is primarily concentrated within the village of Mactier (88 acres),
with significantly smaller designated areas within Honey Harbour (7.1 acres) and Port Severn (3.2 acres). Among
the three villages, only Mactier contains vacant designated employment lands with 28 acres adjacent to Stewart
Lake. The need for employment area expansions will be considered in the District of Muskoka’s growth strategy.
G RAVENHURST
Gravenhurst’s employment land inventory is split among three employment areas: the Airport Industrial Area (584
acres), the Gravenhurst Business Area (166 acres), and the smaller Commercial Area (73 acres). The Airport
Industrial Area contains a moderate proportion of designated net vacant employment land in the Town with 16
acres (17%). The centrally located Gravenhurst Business Area is significantly less built-out, containing 77 acres
of net vacant employment land (80%); the smaller Commercial Area contains only 2.7 acres (3%) of such land.
H UNTSVILLE
Huntsville is host to the District’s next largest employment lands supply, totaling roughly 910 acres. Three areas
comprise the majority of Huntsville’s inventory: the Bickley Drive Light Industrial Area (275 acres), the Muskoka
Commerce Park (233 acres), and the Special Policy Industrial Area (176 acres). The South of Williamsport
MARKET ANALYSIS
12
Industrial Area is also noteworthy in size, with 232.5 acres of designated employment lands, 156 acres of which is
net vacant area and presents a clear opportunity to accommodate future growth.
Among the main three designated employment districts, the centrally located Muskoka Commerce Park contains
the most net vacant land with 160 acres, followed by the Special Policy Industrial Area with 65 acres, and the
Bickley Drive Light Industrial with 58 acres. Net Vacant Employment Land in Huntsville totals 293 acres.
L AKE OF B AYS
Designated Employment Lands in Lake of Bays are contained within the four small villages of Baysville, Dorset,
Dwight and Hillside. Baysville and Dorset are the largest with 26 acres and 25 acres of total designated
Employment Lands, respectively. Among the four villages, only Baysville contains vacant designated Employment
Lands, with 20 acres. Again, the need for expansions of these areas will be considered in the District of
Muskoka’s growth strategy.
M USKOKA L A KES
The villages of Bala and Port Carling are home to the Township’s designated employment lands, each with its
own Industrial Area. Designated employment land in the Bala Industrial Area totals 110 acres, with Port Carling
having 18 acres. With 66 acres of net vacant employment land, Bala contains 91% of Muskoka Lakes’ vacant
designated employment lands.
S UMMARY OF THE R EGIONA L L OCA TION
The District of Muskoka covers a significant area within the Province of Ontario, with unparalleled bodies of water
that have broad appeal for many recreational opportunities and uses. The District was situated within a
reasonable traveling distance to the Greater Golden Horseshoe Region (GGHR), a significant area representing
approximately 66% of Ontario’s 13.4 million people. The wealth of natural resources and close proximity to the
GGHR has enabled this area to maintain its status as the premier cottage destination in Ontario for the past
century. It is expected that the District of Muskoka will continue to experience an increase in its regional
population, with the continued migration of residents and visitors from urban areas to the north.
POPULATION
According to the 2012 Financial Post, the permanent population in the District consisted of approximately 62,200
people which is up 4.25% from 2006 figures.
The change in population since the 2001 Census represents an 8.4% growth in the permanent population during
the five-year period. During same period, the Ontario and Canada populations grew by 6.6% and 5.4%,
respectively. Historical details for the permanent population are depicted below. Historical data were not available
for the seasonal population.
MUNICIPALITY
MARKET ANALYSIS
13
PERMANENT PERMANENT POPULATION PERMANENT SEASONAL LAND AREA
POPULATION POPULATION
DWELLINGS DWELLINGS
2001
2006
% CHANGE
2001
2001
KM2
Bracebridge
13,751
15,652
13.8%
6,231
2,334
617.42
Georgian Bay
1,991
2,340
17.5%
1,018
3,501
535.48
Gravenhurst
10,899
11,046
1.3%
4,425
3,810
517.99
Huntsville
17,338
18,280
5.4%
7,190
2,501
703.23
Lake of Bays
2,900
3,570
23.1%
1,540
2,798
671.46
Muskoka Lakes
6,042
6,467
7.0%
2,679
6,532
781.55
District of Muskoka
53,106
57,563
8.4%
23,151
21,483
3,890.24
Source: Statistics Canada, Census 2001, 2006, District of Muskoka Assessment Information Revised March 2007
The chart below compares permanent population with seasonal population for all Muskoka municipalities. As
demonstrated, Muskoka Lakes, Lake of Bays and Georgian Bay had a much greater seasonal population.
MUNICIPALITY
Bracebridge
Georgian Bay
Gravenhurst
Huntsville
Lake of Bays
Muskoka Lakes
District of Muskoka
MUSKOKA POPULATION
ESTIMATED
PERMANENT
SEASONAL
RESIDENCE
POPULATION
15,652
2,340
11,046
18,280
3,570
6,467
57,355
7,065
14,684
10,930
6,227
11,439
24,946
75,291
TOTAL
POPULATION
22,717
17,024
21,976
24,507
15,009
31,413
132,646
* Muskoka – Demographics Profile (2006 Census)
The District’s Growth Strategy has projected permanent population for the District covering up to 2031, shown
below. The projected increase of 22,485 people by 2031 compared to 2006 represents a 1.5% yearly growth.
Georgian Bay is projected to lead growth (2.4% yearly increase) followed by Bracebridge (1.8%).
MARKET ANALYSIS
14
PERMANENT POPULATION PROJECTION
2006
(ACTUAL)
2011
2016
2021
2026
2031
Bracebridge
16,309
17,412
18,762
2,0335
22,080
23,785
Georgian Bay
2,438
2,617
3,064
3,391
3,729
3,903
Gravenhurst
11,510
11,805
12,108
12,721
13,325
14,615
Huntsville
19,048
20,302
21,818
23,533
25,192
26,416
Lake of Bays
3,720
3,852
4,053
4,335
4,414
4,482
Muskoka Lakes
6,739
7,169
7,719
8,452
8,800
9,048
District of Muskoka
59,980
63,372
63,372
72,984
77,755
82,465
MUNICIPALITY
Source: Muskoka Growth Strategy, Phase 1 (2008)
LABOUR FORCE
In December 2008, employment in the Muskoka-Kawartha's
Economic Region increased by 6,100 since December 2007.
Employment expanded at a faster rate than the population,
increasing the employment rate by 1.6% to 57.7%.
Unemployment decreased from 12,200 to 9,300, reducing the
unemployment rate from 6.5% to 4.9%, well below the
provincial rate of 6.4% at the time.
Labour Force by Industry Sector in Muskoka
1%
15%
Tourism and Service
43%
16%
Public Sector
Manufacturing
Trades
Natural Resources
Muskoka’s economy includes an active tourism and service
25%
sector, a growing public service sector, several international
manufacturing firms, and a significant forestry and extraction
industry. Traditionally, Muskoka is thought of as a tourist destination with a large component of the population
being seasonal residents with cottages on the many lakes and rivers. While the tourism and service industries are
important to the local economy, Muskoka’s economy has expanded into different sectors. A four season economy
has attracted new investments and a growing, trained, and educated workforce (Statistics Canada, 2001).
MARKET ANALYSIS
15
MAJOR EMPLOYERS
The following tables list the major employers in Huntsville and the rest of the District of Muskoka:
EMPLOYER
SECTOR
Deerhurst Resort
Accommodation & Food Services
Huntsville District Memorial Hospital
Education & Health Services
Trillium Lakelands District School Board
Education & Health Services
Panolam Industries
Manufacturing
Tembec Forest Products
Manufacturing
Kimberly-Clark
Manufacturing
Robinson’s Independent Grocer
Food Services
Source: Town of Huntsville (May 2011)
C O T T A G E M A R K E T O V E R V I E W - J A N U A R Y T O D E C E M B E R 2013
During the first quarter of 2013, both sales and inventory were off by 20 per cent. Market conditions improved in
the second quarter, with continued improvement throughout the summer months. At the end of the year, annual
results were similar to the results achieved in 2012.
By December inventory levels were almost identical to 2012. In 2013, 9630 listings were processed by the local
Association, a mere 0.5 per cent less than the 9,687 listings processed in 2012.
By year end, 797 properties had been reported sold, a decline of 2.5 per cent compared to 818 that were reported
sold in 2012 for the entire region (Muskoka, Haliburton and Orillia).
The Lake of Bays area saw 51 sales sold in 2013 versus 47 sales in 2012.
There was no noticeable price increase on the Muskoka Lakes in 2013 but urban centres saw price increases
approaching 8-10 per cent according to Chestnut Park Real Estate. Urban area demand is primarily out of
necessity, while purchasing a cottage or recreational property is discretionary.
For the year 2014, there is expected to be more moderate increases in both prices and sales volume. Canada’s
economy has not fully recovered and all indications are that growth will be sporadic and modest.
MARKET ANALYSIS
16
MARKET ANALYSIS
17
CONCLUSION
The subject local market area benefits from its close proximity and access to major source markets such as
Toronto, Barrie and Ottawa, along with its proximity to Highway 60 and Algonquin National Park. The District of
Muskoka and the Town of Huntsville remain economically vibrant and continue to attract both visitors and
seasonal residents that are willing to pay premium prices for quality real estate.
PROPERTY OVERVIEW
18
PROPERTY OVERVIEW
ADDRESS/ LOCATION
W ATERFRONT L ANDS
Lakeside Golf Course Lands (48.23 gross / net acres): 401 Canal Road, Huntsville, ON
Crozier & Contant Lands (55.95 gross acres / 11 net acres): Along Canal Road, Huntsville, ON. Approximately
44.95 acres is considered non-developable due an Official Plan designation of Environmental Protection.
Callacott/Lindsay/ Turnbull Stable: (64.94 gross / net acres) South side of Deerhurst Drive, east of Canal Road.
Total Waterfront lands: 128.30 net developable acres
Less Resort Village lands
Less Driving Range: 14.06 acres
Less Plateau: 22.07 acres
Less West Riverfront: 11.00 acres
Less Commercial Village: 4.13 acres
Remaining Waterfront lands: 77.04 net developable acres
N ON -W ATERFRONT L ANDS
Running Bear & Nissan Lands (215.24 gross acres): 1180 Highway 60, Huntsville, ON.
Within this area of the non-waterfront lands, approximately 193.99 acre is deemed excess lands; while
approximately 21.25 net acres is zoned for commercial uses.
Deerhurst Highlands Lands 1 (100.01 net acres): 233 Cookson Bay Crescent, Huntsville, ON
Deerhurst Highlands Lands 2 (38.02 net acres): n/a
Approximately 138.03 acres located throughout the Deerhurst Highlands Lands are being used for golf course
uses, therefore are not included within this valuation.
Turnbull Lands (11.31 acres): 412 Canal Road, Huntsville, ON
Total non- waterfront lands: 364.58 net acres
Less Golf Club: 4.20 acres
Remaining Non Waterfront lands: 360.58 acres - 339.33 acres of excess lands and 21.25 acres of commercially
zoned lands.
95 R ESIDENTIAL D EVELOPMENT L OTS / 71 L OT S U NSOLD
A total of 41.34 acres along Deerhurst Highlands Drive, St. Andrews Circle, Glen Eagle Court, and St. Georges
Court in Huntsville, ON.
Discussions with the Client, indicate that 24 residential lots have been purchased within this development, leaving
71 residential lots unsold.
PROPERTY OVERVIEW
19
W ATERFRONT L ANDS FOR C ONDOMINIUM D EVELOPMENT
A total of 8.60 acres along Peninsula Lake Point Road in Huntsville, ON.
R ESORT V ILLAGE CENT RE
A total of 51.33 acres made up of four parcels.
Plateau- 22.07 acres-Located on the east side of Canal Road between the 5th hole of Deerhurst Lakeside golf
Course and abuts the Muskoka River/ Canal to the south and presently occupied by the Deerhurst horse stables.
West Riverfront- 11.0 acres- Located on the west side of Canal Road between the 5th hole of the Deerhurst
Highlands Golf club and the Muskoka River/Canal.
Driving range- 14.06 acres-Located between Deerhurst Drive and Sunset Bay.
Golf Club - 4.20 acres- Located north of Canal Road at the intersection of Canal Road and Deerhurst Highlands
Road.
LAND USE ANALYSIS
Land use in Ontario may be controlled or directed by provincial restrictions through legislation such as the
Planning Act, the Planning and Development Act, etc. Land use is also controlled by municipal restrictions such
as Official Plans and Zoning By-Laws and/or other restrictive By-Laws.
O FFICIAL P LAN
The subject lands are located within the Hidden Valley Settlement Area and the subject lands are located within
Special Policy Area 1 (SP1) Special Policy Area 2 (SPA2) and Special Policy Area 3 (SPA3).
Section 2.5 of the Official Plan sets out the growth strategy for the Town of Huntsville stating:
Hidden Valley will continue to develop as a resort commercial and recreational residential destination.
Z ONING
Zoning for the subject lands is provided under Zoning By-Law 2008-66P by the Town of Huntsville. There
appears to be no conflict between the current use of the property and the current Zoning By-Law.
The original zoning of the Deerhurst lands dates back to the early 1980’s when a comprehensive development
plan for the resort was created. Zoning categories were created for Deerhurst Resort with standards and
permitted uses specific to the development plan.
PROPERTY OVERVIEW
20
PROPOSED DEERHURST VILLAGE CENTRE DEVELOPMENT LANDS
The zoning By-law 2008-66P zones the subject lands O3 Open Space Golf Course and O3 Open Space Golf
Course with certain exception of the Golf Course lands a rezoning is required to permit the Village Centre
development. It is proposed to use the existing C4-Tourist Commercial zone with certain exceptions as required.
The C4 zone permits buildings with a maximum height of 11 meters (approx. 3 storeys). The development plan
proposes buildings that range from 2 to 5 stories in height and site specific exceptions are required.
On April 3, 2012, the owners had a public design meeting with residents and Town officials to receive feedback
regarding their development intentions.
On September 18, 2012, further feedback was received after a public open house.
On April 3, 2013, the owners and their consultants met with staff at the Town of Huntsville and the District of
Muskoka to refine the development proposal.
On December 2, 2013, a zoning and official plan amendment was submitted for a total of 639 residential
accommodation units, 8 townhomes, and 144 hotel suites for a total of 791 units reflecting a density of 15.4 units
per acre. In addition, there is 46,758 square feet of retail being proposed. On January 30, 2014, the owners met
with staff and held a public open house forum and gain more feedback prior to the Statutory Public Meeting which
is expected to be the Town has a complete application.
The proposed uses are permitted by the District of Muskoka and the Town of Huntsville Official Plan without
amendment. The expansion is occurring within an established settlement area on full municipal services.
PROPERTY OVERVIEW
21
SITE DESCRIPTION
GENERAL DES CRIP TION (WATERFRONT AND NON-WATERFRONT LANDS )
Configuration:
Irregularly shaped
Frontage:
Approximately 13,000 feet of water frontage
Site Area:
Waterfront Lands: 77.04 net developable acres
Non-Waterfront Lands: 339.33 acres of excess lands
21.25 acres of commercially zoned lands
Easements:
An authoritative report of title was not provided or reviewed. To the appraiser's knowledge, there are no easements,
encroachments or restrictions that would adversely affect the utilization of the site. However, a title search is
recommended for final determination of any such adverse conditions.
Services:
All services are available within the Resort lands
Access:
Access is provided via Canal Road and Deerhurst Drive
Landscaping:
Significant landscaping due to association with Deerhurst Resort operations
Floodplain/ Wetlands:
Portions of the subject lands are within a known floodplain, We were not given a Wetlands survey to review. If
subsequent engineering data reveal the presence of regulated wetlands, it could materially affect property value. We
recommend a wetlands survey by a professional engineer with expertise in this field.
Environmental:
We observed no evidence of toxic or hazardous substances during our inspection of the site. However, we are not
trained to perform technical environmental inspections and recommend the hiring of a professional engineer with
expertise in this field
Summary
The subject lands enjoy waterfront views (77.04 acres) and standard views (360 acres), and provide very good utility
and access overall. The various parts are improved with a golf course, driving course, barn, airstrip runway, small
ancillary use buildings, and a variety of other uses. All public utilities are available.
PROPERTY OVERVIEW
22
GENERAL DES CRIP TION (95 RES IDENTIAL DEVELOP MENT LOTS / 71 UNS OLD)
Configuration:
Irregularly shaped
Frontage:
Approximately 8,352 feet of frontage
Site Area:
41.34 total acres / 28.99 acres unsold
No. of Lots Sold:
Discussions with the Client indicate that 24 lots have sold within this development area - leaving 71 residential lots
remaining.
Easements:
Services:
All services are available within the Resort lands.
Access:
Access is provided via Deerhurst Highlands Drive.
Environmental:
expertise in this field.
Summary
The subject lots enjoy standard views (40 lots) and golf views (55 lots), and provide very good utility and good access
overall. They range from 0.31 to 0.94 acre in size, and are all fully serviced.
PROPERTY OVERVIEW
23
GENERAL DES CRIP TION (WATERFRONT LANDS FOR CONDOMINIUM DEVELOP MENT)
Configuration:
Irregularly shaped
Frontage:
Approximately 663 feet of water frontage
Site Area:
8.60 acres
Easements:
Services:
All services are available within the Resort lands.
Access:
Access is provided via Peninsula Lake Point Road.
Landscaping:
Significant landscaping due to association with Deerhurst Resort operations.
Environmental:
expertise in this field.
Summary
The subject lands enjoy extensive prime waterfront views and provide very good utility and access overall. Currently
improved with a lodge, terrace, and cottages, they are being underutilized or unused. Management plans to demolish
these improvements and build 172 condominium units (consisting of Phase1 of 82 units and Phase 2 of 90 units in a
single building of 5 storeys). The zoning allows up to 173 units but the site plan application is based on 172.
PROPERTY OVERVIEW
24
GENERAL DES CRIP TION (DEERHURS T S ANCTUARY) ( FORMERLY WOODLAND HEIGHTS )
Configuration:
Rectangular shaped Lots (32)
No. of Lots Sold:
Discussions with the Client indicate that 2 lots have sold within the Sanctuary. Lot No.’s 13 and 25 both sold in mid2013 for a total price of $175,000 and $250,000, respectively.
Consequently, there are 30 lots that remain unsold.
Frontage:
198 to 325 feet frontage
Site Area:
72.8 acres ( aggregate total)
Easements:
Services:
Rural services are available within the lands
Access:
Access is provided via North Portage Road
Landscaping:
Portions of the subject lands are near a nature sanctuary. We were not given a Wetlands survey to review. If
Environmental:
History
The 32 lots were acquired by Skyline Executive Acquisitions Inc. for $3,900,000 dated August 16, 2012 from Woodland
Alliance Inc. as described in Pin # 480991120.
Summary
The subject comprises 32 estate residential lots - 30 of which remain unsold - in a quiet nature sanctuary environment.
DEERHURST SANCTUARY SITE PLAN
25
26
GENERAL DES CRIP TION RES ORT VILLAGE CENTRE
Configuration:
Irregular shape
Frontage:
1,302 feet frontage
Site Area:
Plateau- 22.07 acres
West River Front- 11.0 acres
Driving Range- 14.06 acres
Golf Club- 4.20 acres
51.3 acres (total net developable acres)
Easements:
Services:
There is an existing 300 mm municipal water main on Canal Road and Deerhurst Drive that currently services
Deerhurst Resort and Hidden Valley area. A network of 150 mm water mains will provide potable and water distribution
within the Village Centre development. It is anticipated that initial phases of the Village Centre can be developed
without the need for additional water storage.
A network of standalone sanitary sewers and force mains will service the development.
Access:
Access is provided via Canal Road.
Landscaping:
None
Environmental:
History
A rezoning amendment and official plan amendment and a plan of subdivision was submitted to the Town of Huntsville
and the District of Muskoka on December 2, 2013. The application conforms to the Official Plan. As of March 20,2014, the application was deemed complete subject to some minor issues. Therefore, the future development is
considered to be in the nearing the approval stage.
Summary
The subject is proposing 791 residential units reflecting a density of 15.43 units per acre. In addition, 46,758 square
feet of retail space is proposed.
SITE PLAN - VILLAGE CENTRE
27
DEVELOPMENT OVERVIEW - VILLAGE CENTRE
28
HIGHEST AND BEST USE
29
INTRODUCTION
The principal of the “Highest and Best Use” of a property is fundamental to the concept of market value. Highest
and best use is defined by the Appraisal Institute of Canada as:
“The reasonably probable and legal use of vacant land or an improved property; which is physically
possible, appropriately supported, financially feasible, and that results in the highest value. The four
criteria the highest and best use must meet are legal permissibility, physical possibility, financial
feasibility, and maximum profitability.”
PHYSICALLY POSSIBLE
The pertinent physical factors affecting the highest and best use of the subject site fall under two categories: site
characteristics and location characteristics. The site characteristics include size, dimensions, topography, soil
conditions, and the availability of adequate utilities. Location factors include access to transportation, availability
of labor and materials, proximity to markets, the impact of the surrounding neighborhood, and conditions of the
market within which the property will operate.
The subject’s physical features and site configuration would support a rural residential and/or recreational use.
The 32 lot subdivision is ready for development.
LEGALLY PERMISSIBLE
Legal factors influencing the highest and best use of the subject site are primarily related to governmental
restrictions in the form of official plan regulations and zoning by-laws.
The subject site is currently designated as a Settlement Area in the zoning by-law. This designation would permit
a range of residential and recreational uses.
The 8.60 acre parcel received site plan approval in 2013.
In the Q3 2013 report, a portion of the subject property was considered rural lands and valued as such. At that
time the owners had applied to Town officials to rezone the said the lands (referred to as Resort Village Centre
lands -51.3 acres) to permit a residential commercial development consisting of 791 residential units and 46,758
square feet of commercial space.
The Resort Village Centre Lands (51.33 acres) have a zoning amendment and official plan amendment before the
Town and the Region of Muskoka. The application conforms to the official plan. The proposal does not have
approval and therefore is not a legal and permitted use. However, the feedback from the town and rate payers
group has been favorable. The application is expected to receive approval and is expected to be less than a year.
30
The commercial component could be ground floor retail space below the residential or injunction with the hotel
component. For valuation purposes, we have assumed that the commercial component would be stand alone and
have a site coverage of 25% resulting in an site area of 4.29 acres.
The value of the Village Centre Lands in the Q4-2013 report reflected that the lands are in transition and are no
longer considered “rural lands” but likely to be approved for a mixed use commercial residential development as
proposed. In the Q1-2014 report, the lands are still in transition and have submitted a complete application and
received favorable feedback from the Town and the Region planning officials.
FINANCIALLY FEASIBLE
Of the permitted and conditional uses, a rural residential and/or recreational use would support a financially viable
use.
MAXIMALLY PRODUCTIVE
The final determination in the highest and best use analysis is the maximally productive use of the site. Based
upon immediate area uses, it is reasonable to conclude that a residential and/or recreational use would support a
maximally productive use for the Subject Property.
HIGHEST
AND
BEST USE CONCLUSION
The highest and best use of the site as though vacant is considered to be that of a residential and/or recreational
use.
As improved, the subject has a number of recreational type improvements such as stables that do not contribute
to the overall value of the property. The said lands have greater utility to be redeveloped for residential use. The
highest and best use is to be developed with residential and/ or recreation use.
PROPERTY VALUATION
31
PROPERTY VALUATION
VALUATION APPROACHES
The market value of the subject property is contingent upon a number of factors such as location, replacement
cost, physical condition and utility of the improvements, the market climate and general economic conditions. In
the valuation process, these factors are incorporated into several approaches to value. The selection of the
relevant methodology depends on the characteristics of the real estate being analyzed.
Traditionally, the three most common approaches to the valuation of real property are:
•
The Cost Approach to value is based on the economic principle of substitution, which states that the
value of a property should not be more than the amount by which one can develop (by purchase of a site
and construction of a building without undue delay) a property of equal desirability and utility.
•
The Direct Comparison Approach considers the cost of acquiring equally desirable and valuable
substitute properties, indicated by transactions of comparable properties, within the market area. The
characteristics of the sale properties are compared to the subject property on the basis of time and such
features as location, size and quality of improvements, design features and income generating potential
of the property.
•
The Income Approach to value is used to estimate real estate value based on property income
generating capabilities using the Direct Capitalization Method or the Discounted Cash Flow method.
There are two traditional methods to income valuations.
•
Direct Capitalization Method - division of a required yield (inverse of a required income multiple)
into Net Operating Income to yield a value.
•
Discounted Cash Flow Method is a method that accounts for the anticipated growth or decline
in income over the term of a prescribed holding period.
S ELECTION O F V ALUATION A PPROA CHES
The subject properties are being valued as vacant rural residential/recreational lands located in the Deerhurst
Resort, in the Town of Huntsville and the Regional District Municipality of Muskoka. The Direct Comparison
Approach is considered the most reasonable methodology in this instance as it best represents a potential
purchaser’s decision making process. Both the Income Approach and Cost Approach are not considered
applicable in this instance and thereby not developed in this report.
PROPERTY VALUATION
DIRECT COMPARISON APPROACH – WATERFRONT
32
LANDS
I NTRODUCT ION
The Direct Comparison Approach is based on the principle of substitution, which maintains that a prudent
purchaser would not pay more for a property than the cost to purchase a suitable alternative property which
exhibits similar physical characteristics, tenancy, location, etc. Within this approach, the property being valued is
compared to properties that have sold recently or are currently listed and are considered to be relatively similar to
the subject property. Typically, a unit of comparison is used to facilitate the analysis. In the case of properties
similar to the subject, the sale price per acre is the most commonly used unit of comparison.
S UBJECT L ANDS
Waterfront lands within the subject property consist of approximately 77.04 acres comprised of 11 net acres of the
Crozier and Constant Lands, 64.94 net acres of Callacott / Lindsay / Turnbull Stable Lands and 48.23 net acres of
the Lakeside Golf Course Lands. The total is 124.17 acres but approximately 47.13 acres are deducted from this
total area for the future Resort Village Centre lands. At present, the lands are improved with a variety of small
ancillary use buildings, golf course and a variety of other uses. We have assumed that the lands are vacant for
the purpose of this appraisal.
S ELECTION OF C OMPA RA BLE S ALES
As one sale is not necessarily indicative of market value, an appraiser examines a number of market transactions.
When properly reconciled, trends emerge, leading to the estimate of market value of the lands being appraised.
To that end, the sales selected are considered to be similar to the subject and deemed to provide the most
reliable evidence of value. A search of comparable sales yielded 6 sales which were considered to be similar to
the subject lands. The sale prices ranged from $525,000 to $2,150,000. When converted to price per acre, the
prices ranged from $13,333 per acre to $97,500 per acre.
SUMMARY OF LAND SALES
No.
Subject
S1
S2
S3
S4
S5
S6
Address
Waterfront lands
3617 South Portage Road
1086 North Deer Lake Road
1076 Lake of Bay Lane
85 Vernon Beach Road
Williamsport Road
673 & 683 Gryffin Lodge Road
City & Province Sale Date Sale Price Size (Acre) Price per Acre
Huntsville, ON
121.99
Huntsville, ON
May-08
$600,000
24.62
$24,370
Huntsville, ON
July/1/08
$800,000
38.30
$20,888
Huntsville, ON
Sep-08 $2,150,000
72.24
$29,762
Huntsville, ON
Jun-08
$525,000
34.99
$15,004
Huntsville, ON
Jan-13
$800,000
60.00
$13,333
Huntsville, ON
Aug-13 $1,813,500
18.60
$97,500
ADJUSTMENTS
No.
Address
Sale Date Price per Acre
Time
%
Location
%
Size
%
Other
%
Total %
Adjustment
Comparability Adjusted Sale
Price
Subject Waterfront lands (77.04 ac)
S1
3617 South Portage Road, Huntsville
S2
1086 North Deer Lake Road, Huntsville
May-08
S3
1076 Lake of Bay Lane, Huntsville
Sep-08
S4
85 Vernon Beach Road, Huntsville
Jun-08
S5
Williamsport Road, Huntsville
S6
673 & 683 Gryffin Lodge Road, Huntsville
Jul-08
$24,370 Upward 11.0% Upward
5.0%
Downward
-10.0%
Nil
0.0%
6.0%
Inferior
$25,833
5.0%
Downward
-10.0%
Nil
0.0%
6.0%
Inferior
$22,141
$34,226
5.0%
Downward
0.0%
Nil
0.0%
15.0%
Inferior
5.0%
Downward
-10.0%
Nil
0.0%
6.0%
Inferior
$15,905
Jan-13
$13,333 Upward 2.0% upward
5.0%
Downward
0.0%
Nil
0.0%
7.0%
Inferior
$14,267
Aug-13
$97,500 Upward
5.0%
Downward
-28.0%
Superior
$70,200
2.0%
Upward
-10.0% Downward -25.0%
PROPERTY VALUATION
33
A DJUSTMENT C RITERIA
In valuing the subject lands, a comparison was made to each of the index sales. The bases for comparison
included consideration of the following items:
MARKET CONDITIONS
Where the market is changing, it may be necessary to adjust prices to reflect the time difference between the date
of the sale of a comparable land and the date of valuation. The sales included in this analysis occurred between
May 2008 to August 2013. Our sales indicated a range of between $15,004 and $97,500 per acre. Index No. 6
which indicated the highest rate per acre is improved with an existing 21 room resort with an existing building of
17,000 square feet. If we eliminate this sale due to the improvements, our range tightens to $13,333 to $29,762
per acre.
We have adjusted our sales upwards based on a 2.05% annual increase based on the rate of inflation.
PROPERTY RIGHTS CONVEYED
When real property rights are sold, they may be the sole subject of the contract or the contract may include other
rights. In the sales comparison analysis, it is pertinent that the property rights of the comparable sales be similar
to the property rights of the subject lands. All the sales considered were fee simple transfers, thus no adjustments
were necessary.
FINANCING TERMS
The transaction price of one land may differ from that of a similar land due to different financing arrangements.
Financing arrangements may include existing mortgages at favourable interest rates or paying cash to a lender so
that a mortgage with a below-market interest rate could be offered. To the best of our knowledge, all of the sales
used in this analysis were accomplished with cash or market-oriented financing. Therefore, no adjustments were
required.
CONDITIONS OF SALE
Adjustments for conditions of sale usually reflect the motivations of the purchaser and vendor. In some cases,
the conditions of sale significantly affect transaction prices. Sales that reflect unusual situations require an
appropriate adjustment for motivation or sale condition. For example, power-of-sale conditions involve a certain
degree of urgency on the part of the lender - leading to a somewhat lower sale price than what would otherwise
be expected. All the sales considered were normal market transactions with no undue motivation, thus no
adjustments were necessary.
SIZE
The sales range in size from 18 acres to 73 acres. The Subject property comprises a net developable area of
approximately 77.04 acres. The appropriate size adjustment has been undertaken. All of the comparables refer
to the net developable land.
LOCATION
An adjustment for location within a market area may be required when the locational characteristics of a
comparable land are different from those of the subject lands. Excessive locational differences may disqualify a
property from being used as a comparable. Although no location is inherently desirable or undesirable, the market
recognizes that one location is better than, similar to, or worse than another. Any locational adjustments were
based on both regional and neighbourhood location.
PROPERTY VALUATION
34
ACCESS
Overall ease of access to the site was also considered. This included both regional and immediate area access
off local roads and such.
OTHER
In some cases, other variables will have an impact on the price of a land transaction. Examples include soil or
slope conditions, restrictive zoning, easements, wetlands and external influences. In our analysis of the
comparables, we found that no unusual conditions existed at the time of sale.
The sales (except for Index No.6) are zoned for one single family residential dwelling and have inferior
development potential compared to the subject.
Index No. 3 is to be improved with two dwellings (existing one is to be demolished) and improved with a sleeping
cabin, tennis court and boathouse.
Index No. 6 is improved with an existing 21 room resort and requires a downward adjustment for the
improvements.
NOTE: The Appraisal Institute of Canada recommends the use of "paired sales analysis" in the derivation of
adjustments. This involves locating two very similar sales that sell in a similar time period. If the two sales differ in
only one key feature, then the difference in sale price can be used as the "market indicator" for the adjustment for
that feature. In practice, this concept usually only applies to newer homes in the subdivision. Rural, commercial
and industrial properties tend to be unique, and therefore in practice it is not usually possible to find paired sales
to derive adjustments. In the absence of paired sales, it is the appraisers' experience and judgment (based on
observation) which is used for adjustments.
S ALES A NA LYSIS
A descriptive analysis of the sales is outlined below.
COMPARABLE SALE 1
This 24.62 acre parcel has approximately 398 feet of water frontage along the Lake of Bays. The property
transferred in May 2008 for a total consideration of $600,000 or $24,370 per acre.
COMPARABLE SALE 2
This 38.30 acre parcel enjoys excellent frontage (approximately 3,325 feet) along the Divine Lake. The property
transferred in July 2008 for a total consideration of $800,000 or $20,888 per acre.
COMPARABLE SALE 3
Featuring significant water frontage along the Lake of Bays, this 72.24 acre property sold in September 2008 for a
total consideration of $2,150,000 or $29,762 per acre.
COMPARABLE SALE 4
This 34.99 acre parcel is located on Vernon Beach Road. The property features approximately 276 feet of
frontage along Lake Vernon and was transferred for a total consideration of $525,000 or $15,004 per acre.
PROPERTY VALUATION
35
COMPARABLE SALE 5
This 60 acre parcel is on Little Arrowhead Lake and is surrounded by 240 acres of hardwood forest. The site has
year round access. The survey indicates 37 waterfront lots but for planning purposes is considered one lot.
COMPARABLE SALE 6
This 18 acre parcel is located on Mary Lake and features approximately 1,510 feet of frontage. The property is
known as Gryffin Lodge Resort with 21 rooms, an existing building of 17,000 square feet and four guest buildings.
CONCLUSION
The comparable sales sold for between $13,333 per acre and $29,762 per acre (if we disregard No. 6) – an
average of $20,671 per acre. After adjustments, the sales range in price from $14,267 to $34,226 (removing No.
6), with an average rate of $22,474.
In addition to the above sales, we aware of a 6.3 acre site at 1841 District Road 118 West on Lake Muskoka that
sold In August 2013 for $1,398,000 or $221,202 per acre. Touchstone on Lake Muskoka Inc. sold to Villas of
Lake Muskoka Ltd. The vacant site was acquired for development of a fractional ownership condominium resort.
This sale was not included in our comparable sales given the size of the parcel. However, it does indicate the
waterfront premium that is paid for waterfront resort land.
W ATERFRONT L AND C OMPONENT
In arriving at our conclusion, we note that the subject has significantly more water frontage, unique access to a
variety of services from Deerhurst Resort, and significant landscaping from the Resort operations. Consequently,
we can anticipate a 50% to 60% premium higher than the average of the comparable transactions. Therefore, a
rate of $33,711 to $35,958 per acre was indicated. Our range is significantly less than the Lake Muskoka sale at
$221,202 per acre which is to be expected given the large size adjustment and the superior zoning at the time of
sale.
It is our opinion that the current market value of the Waterfront Lands via the Direct Comparison Approach, as at
March 31, 2014 was:
77.04 acres @ $35,000 per acre = $2,696,400
Rounded to $2,700,000
TWO MILLION SEVEN HUNDRED THOUSAND DOLLARS
V ILLAGE C ENT RE C OMPONENT
On November 29, 2013, the owners applied for approval of a plan of subdivision regarding the Village Centre
lands. In that submission, extensive studies (planning, environmental, traffic, servicing, geotechnical) were
submitted. Although the application was in compliance with the Official Plan, as of December 2013, the
application was deemed incomplete. As of March 31, 2014, the application was considered complete with some
outstanding issues to be resolved) and under consideration from the Town and the Region.
Therefore, the value of the Village Centre Lands in the December 2013 report reflected that the lands were in
transition and are no longer considered “rural lands” but likely to be approved for a mixed use commercial
residential development as proposed. The said lands were previously valued in the September-2013 report at
$6,600 per acre reflecting their rural zoning and size. The Village Centre lands have excellent views of the water
PROPERTY VALUATION
36
and were valued at $35,000 per acre in December 2013 to reflect the reduced size of the parcel, the site plan
application process and potential approval. The said lands have yet to be approved but have been received
favorably by the Town and the Region. As of March 20, 2014, the Town of Huntsville had declared the submission
to be a complete application (with some outstanding issues to be resolved regarding design, unit mix, servicing
issues, and environment issues) from the Director of Planning and Sustainability.
PROPOSED RESORT VILLAGE CENTRE LANDS
Since the Highest and Best Use of the Subject property is for a future mixed-use residential and commercial
development, we have analyzed sales purchased for a similar residential and retail / commercial use within the
immediate and surrounding areas. Since there were a limited number of transactions within the Huntsville area,
we have expanded our search area. We have focused our search on areas throughout the Kawartha Lakes
Region and Muskoka Region and similar small communities throughout Ontario. Throughout the report we have
stated that the Subject site, under the existing Official Plan and Zoning By-Law, has the potential to be developed
with 791 residential units (on the 47.04 acre residential component) and approximately 46,758 square feet of
commercial gross floor area (on 4.29 acre commercial component based on 25% coverage).
For this approach the sales have been analyzed on the following basis:
Residential Lands: Price Per Buildable Unit
Commercial Lands: Price Per Acre of Land
Consideration has also been given to the size of the development, the location of the real estate and the planning
policy in place.
METHODOLOGY
In estimating the market value of the Subject property we have utilized the Direct Comparison Approach to value.
We have undertaken the following approach:
-i- Using the Direct Comparison Approach, concluded at a current market value estimate for the 47.04 acre
residential land (townhouse, hotel and residential accommodation) component of the Subject property.
-ii- Using the Direct Comparison Approach, concluded at a current market value estimate for the 4.29 acre
commercial component of the Subject property; and,
A summary of the relevant sales we have researched is presented in the tables on the following pages:
-I- R ESIDENTIAL C OMPONENT : 47.1 A CRES
As previously mentioned, the Subject property has a current proposal before the Town to be developed with a
maximum of 791 residential units and reflects a density of 15.42 units per acre. The proposal has not yet been
approved by Town or the Region. However, the owners have been very active in the public process and the initial
feedback has been positive.
PROPERTY VALUATION
37
The absorption of these units is the key to the success of this development. On the positive side, Deerhurst
Summit Lodges sold out 120 units in two days of refurbished condominium units. The attractive feature of these
units were the low prices and the ability to put the units back in the rental pool. The proposed development lands
will have the benefit of enjoying all the amenities of the Deerhurst resort.
On the cautious side, an average of 50 sales per year have occurred for the last four years on Lake of Bays with
the majority selling for less than $800,000. Similar sales figures are for the Huntsville Lakes (Peninsula, Fairy,
Vernon) with an average of 39 sales per year over the last four years.
Sales at the Treetops residential development outside the Deerhurst resort have been slow. Condominium units
range in size from 1,023 square feet to 1,592 square feet and priced from $279,900. Occupancy is expected in
2015.
PROPERTY VALUATION
38
C ONDOMINIUM & R ESIDENT IAL C OMPONENT
Comparable Condominium & Residential Land Transactions
Index
No.
1
2
Address
94 Francis Street
City
Fenelon
Falls
18 Logie Street
Lindsay
3
Adelaide Street North
Kawartha
Lakes
4
Kawartha
45 Victoria Avenue South
Lakes
5
Kawartha
Lakes
84 Adelaide Street S
Date of
Sale
Sale Price
Site Area
(Net Acres)
No. of
Units
Units Per
Acre
Motivation
$ / Acre
$ / Buildable
Unit
Purchaser
8-Mar-12
$555,000
1.200
24
20.00
Condominium
Development
$462,500
$23,125
1802367 Ontario Inc.
At the time of sale was vacant land. Purchaser has
since built 24 unit condominium building (Lock 34).
Services were available at the time of sale.
3.20
Condominium
Development
Monty Homes Inc.
Large, vacant mixed-use site - not serviced. Site is
approved for 116 unit residential building and has
approximately 3.0 acres of retail lands. Previously
sold in Sept 2010 under Power of Sale for
$2,200,000.
n/a
Retirement
Residential
Development
50.00
Affordable Housing
Development
21.74
Retirement
Residential
Development
19-Dec-11
31-Mar-11
30-Jul-09
$1,750,000
$820,000
36.300
2.800
2.000
$1,350,000
5.750
Minimum
$555,000
1.200
Maximum
$2,900,000
Average
$1,475,000
Subject: Resort Village Centre,
3-Mar-09
$2,900,000
Huntsville
* Total site are is 51.33 acres less 4.29 acres for commercial land based on 25% coverage.
116
n/a
100
$625,000
$410,000
$25,000
n/a
Serviced, ready to develop residential land.
Purchaser intends to build a seniors residence on
Lindsay Seniors Residences
the site. However, re-zoning will be required before
Inc.
development can begin (currently zoned for low and
medium density residential uses).
$8,200
Vacant residential land within established area of
Lindsay. At the time of the sale, the property was
Community Care Village
serviced and available for development. Purchaser
Housing Kawartha Lakes Inc.
has since built a 100 unit affordable housing
development.
$234,783
$10,800
3.20
$79,890
$8,200
36.300
50.00
$625,000
$25,000
9.610
23.73
$362,434
$16,781
47.13
125
$79,890
791
16.78
Hotel & Residential
Development
Comment
Serviced, ready to develop residential land.
Purchaser intends to build a 4-storey, 125 unit
Lindsay Retirement Home GP
retirement residence on the lands. Development has
Ltd.
yet to commence and a time frame remains
unknown.
PROPERTY VALUATION
SALES SUMMARY for the Apartment / Residential Component of the Mixed-Use Development, Huntsville ON
Subject
Land Sale No. 1
Land Sale No. 2
Land Sale No. 3
Land Sale No. 4
Land Sale No. 5
Address
Resort Village Centre,
94 Francis Street
18 Logie Street
Adelaide Street North
45 Victoria Avenue
South
84 Adelaide Street S
City
Sale Date
Huntsville
n/a
Fenelon Falls
08-Mar-12
Lindsay
19-Dec-11
Kawartha Lakes
31-Mar-11
Kawartha Lakes
30-Jul-09
Kawartha Lakes
03-Mar-09
Sale Price
Land Area (Acres)
n/a
47.132
$555,000
1.200
$2,900,000
36.300
$1,750,000
2.800
$820,000
2.000
$1,350,000
5.750
No. of Units
Units Per Acre
791
16.78
24
20.00
116
3.20
n/a
n/a
100
50.00
125
21.74
Unadjusted Price Per Acre of Land
$462,500
$79,890
$625,000
$410,000
$234,783
Unadjusted Price Per Buildable Unit
$23,125
$25,000
n/a
$8,200
$10,800
ADJUSTMENT GRID
Property Rights Conveyed
Financing Terms
Conditions of Sale
Time/Market Conditions
Appraisal Date:
Compound Annual Growth Rate:
Fee Simple
Market
Similar
Fee Simple
Market
Similar
Fee Simple
Superior
Similar
Fee Simple
Market
Similar
Fee Simple
Market
Similar
Inferior
4.30%
$24,119
Inferior
4.70%
$26,175
Inferior
6.30%
n/a
Inferior
9.90%
$9,012
Inferior
10.90%
$11,977
Location
Similar
Similar
Superior
Similar
Similar
Adjustment
Land Area (Acres)
0%
Superior
0%
Superior
-10%
Superior
0%
Superior
0%
Superior
Adjustment
Site Utility
-10%
Similar
-10%
Similar
-10%
Similar
-10%
Similar
-10%
Similar
0%
Superior
-30%
Superior
-5%
-45.0%
$13,266
0%
Superior
-20%
Inferior
5%
-25.0%
$19,631
0%
Similar
0%
Similar
0%
-20.0%
n/a
0%
Superior
-20%
Superior
-15%
-45.0%
$4,956
0%
Superior
-20%
Superior
-5%
-35.0%
$7,785
Mar-14
2.05%
Percent Adjustment
Time/Market Adjusted Price/$ per Buildable Unit
Adjustment
Type / Scale of Development
Adjustment
Achievable Density / Development Potential
Adjustment
%age Change
Adjusted Rate / Unit
39
COMPARABLE SALES MAP
PROPERTY VALUATION
40
ANALYSIS
OF
PROPERTY VALUATION
41
COMPARABLE SALES
Since no two properties are completely alike, adjustments must be made to compensate for differences between
the comparable sales and the Subject property. The major elements of comparison for an analysis of the Subject
type of property include:
•
Date of Sale - changes in market conditions since the sale
•
Property rights conveyed
•
Financial terms of the transaction
•
Conditions or motivations surrounding the sale
•
Location of the real estate
•
Size of site area (Acres)
•
Site utility
•
Frontage / Visibility
•
Type of Development
•
Achievable Density / Development Potential
Downward adjustments will be made to those comparables considered superior to the Subject. Conversely,
upward adjustment will be made to those comparables considered to be inferior.
of sale of a comparable property and the date of valuation. In consideration of the financial market economy, all
real estate asset classes realized some sort of stress in late 2008. In 2009, we saw very little market activity.
Market conditions have improved through 2010 until 2014.
Residential sales activity recorded through the MLS system of Muskoka Haliburton Orillia - The Lakelands
Association of Realtors numbered 204 units in March 2014. This was up 19 per cent from March 2013. Sales of
cottage properties rose 18 per cent from a year earlier to 39 units in March 2014. While year over year increases
for March 2014 look about the same, residential sales surged over 200 units in the month of March for just the
fourth time in history, while cottage sales were still running below the historical average for the month. The 77 per
cent month over month increase of residential transactions from February was the largest on record. This likely
reflects at least in part the release of some pent up demand following a harsh winter.
The median price for residential property sales was a record $225,000 in March 2014, up 13 per cent from a year
earlier.
The median price for cottage sales was $385,000 in March 2014, a decline of eight per cent compared to March
2013. The dollar value of all residential sales was $48.9 million, an increase of 35 per cent on a year over year
basis and the highest level of this month on record. The total value of cottage sales was $15.4 million which is up
20 per cent from a year earlier.
In addition, we have examined sales and re-sales within the Deerhurst Resort Summit Lodges as well as sales
and re-sales in the Greater Toronto area of vacant land.
PROPERTY VALUATION
42
Market Condition Adjustment Table
Address
Current Use
Resale Date
Resale Price
Sale Date
Sale Price
Price Difference
No of
Months
% Monthly
Change
% Annual
55-206 Deerhurst Drive, Huntsville
condo
30-May-14
$136,000
4-Apr-12
$164,900
-$28,900
25
-0.70%
-8.41%
condo
16-Sep-13
$151,000
5-Aug-11
$172,900
-$21,900
25
-0.51%
-6.08%
condo
31-Mar-14
$179,900
8-Feb-12
$199,900
-$20,000
25
-0.40%
-4.80%
vacant high demsity
residential land
16-Dec-13
$1,160,000
5-May-11
$950,000
$210,000
31
0.71%
8.56%
Automotive
5-Nov-13
$8,185,000
15-Apr-11
$4,950,000
$3,235,000
31
2.11%
25.30%
Vacant Commercial Land
15-Jan-14
$4,918,000
30-Aug-12
$3,975,000
$943,000
17
1.40%
16.75%
Commercial Building
28-Dec-13
$2,550,000
23-Mar-10
$1,125,508
$1,424,492
45
2.81%
33.75%
Single Family Dwelling
30-Jan-14
$5,250,000
14-Sep-10
$2,900,000
$2,350,000
40
2.03%
24.31%
17210 Leslie Street, Newmarket
7079 Yonge St, Markham
365 Hood Rd, Markham
693 Davis Drive, Newmarket
9064/9084/9100/9110 Woodbine
Ave, Markham
Minimum:
-$28,900
17
-0.70%
-8.41%
Maximum:
$3,235,000
45
2.81%
33.75%
Average:
$1,011,462
30
0.93%
11.17%
Time Adjustment Analysis Language
As shown within the above paired sales analysis chart, the transactions range in time adjustment from -70% to 2.81% per month, with an average rate of approximately 0.93% per month increase,
equating to an approximately 11.54% increase per annum. The first thee comparables refer to residential condominiums at the Deerhust Resort. The first two are sales and resales which suggest
an annual decline of between 6.08% to 8.41 per cent. Index No.3 originally sold for $199,900 and currently back on the market for $20,000 less suggesting a minimal decine of 4.80 percent. When
the sales are analyzed on a vacant land transaction basis only - which would be the most comparable transactions for the purpose of this analysis - a range from 0.71% to 1.40% per month increase
is evident. Although the property at 693 Davis Drive is envisioned for a future development use, the price difference is primarily due to the land use of the site - not the passing of time. The original
Agreement of Purchase & Sale was contracted on July 5th, 2012. However, both the vendor and purchaser agreed not to close the deal until the purchaser obtainted traction with the Town of
Newmarket for re-development of the site. Consequently, although included within the chart, this comparable is not a good indication of a time adjustment. The best comparable transaction to
analyze is 17210 Leslie Street, Newmarket.
This property initially transacted in May 2011 for a price of $950,000. In December 2013 the site transacted again, selling for $1,160,000. During this
time, no planning approvals or site improvements had been made - indicating that the property had remained the same from the prior sale. The transaction occurred 31 months subsequent to the
original sale date and sold for $210,000 more than the original price. This increase equates to a time adjustment of approximately 0.71% per month, or 8.56% per annum.
PROPERTY VALUATION
43
The market supported evidence illustrates that prices have declined in the immediate Deerhust area for
residential recreational condominiums. Market evidence also suggests that the majority of the activity is for
residential properties and not for recreational properties. In addition land prices for commercial land and
residential land appear to be strong indicating an annual increase of 8.56% in a superior market.
Recognizing that commercial and residential lands have been appreciating at a greater rate due to a combination
of scarcity, speculation and favourable interest rates but also aware of the decline of recreational residential
prices in the immediate area, we have utilized a conservative time adjustment rate of 2.05% similar to the
Consumer Price Index.
Therefore, consistent with the Greater Toronto Area and Inflation Rate, we have applied a 2.05% per year annual
growth rate to each comparable for the purpose of this report.
ANALYSIS
Sale Date
•
Where the market is changing, it may be necessary to adjust prices to reflect the time
difference between the date of sale of a comparable property and the date of valuation. In
consideration of the financial market economy, all real estate asset classes realized some
sort of stress in late 2008. In 2009, we saw very little market activity. Market conditions have
improved through 2010 until 2014. For the purpose of this appraisal report, our time
adjustment has been made as follows:
•
Unlike Toronto and large urban areas, recreational waterfront did not see a noticeable
increase in average sale prices. Urban area demand is primarily out of necessity, while
purchasing a cottage is discretionary.
•
By year-end the Haliburton Highlands saw sales increase by six percent compared to 2013,
from 237 last year to 251 this year. Lake of Bays was virtually unchanged in 2013. In 2012,
91 recreational properties were reported sold, and a similar amount sold in 2013.
•
In the Lake of Bays area, waterfront properties did not see a noticeable increase in average
sale prices. The sales have been inflated at the rate of inflation of 2.05% annually.
•
When real property rights are sold, they may be the sole subject of the contract or the
contract may include other rights. In the sales comparison analysis, it is pertinent that the
property rights of the comparable sale be similar to the property rights of the Subject
property. All the sales considered were fee simple transfers, therefore no adjustments were
deemed necessary.
Financing Terms
•
The transaction price of one property may differ from that of a similar property due to different
financing arrangements. For example, more favourable financing might include a VTB
(Vendor Take Back) mortgage at a lower than market interest rate, which tends to have a
positive influence on the price.
•
Index No. 3: Condo & Residential Component included VTB’s at below market rates –
therefore are considered superior. The remaining comparable sales researched were
acquired on either an “all cash” basis - without market based financing or contained a VTB
that was at market rates. Therefore, no adjustments were required.
Conditions of Sale
PROPERTY VALUATION
44
•
Adjustments for conditions of sale usually reflect the motivations of the purchaser and
vendor. In some cases the conditions of sale significantly affect transaction prices. Sales
that reflect unusual situations require an appropriate adjustment for motivation or sale
condition. For example, power-of-sale conditions involve a certain degree of urgency on part
of the lender - leading to a somewhat lower sale price than what would otherwise be
expected. On the other hand, transactions to create a land assembly may result in higher
motivation by the buyer which often leads to a higher sale price than would be expected.
•
All indicated sales are considered “arms length” and by typical motivated vendor(s) and
purchaser(s). As a result, no adjustments were necessary for the conditions of sale.
Location
•
An adjustment for location within a market area may be required when the locational
characteristics of a comparable property are different from those of the Subject property.
Excessive locational differences may disqualify a property from use as a comparable.
Although no location is inherently desirable or undesirable, the market recognizes that one
location is better than, similar to, or worse than another. Locational adjustments were based
on both geographic and neighbourhood location. Public transportation, proximity to amenities
and the surrounding area have all been factored into our final adjustment.
Site Area (Acres)
•
The price per acre of site area is expected to vary with the size of the site. Generally the
price per acre decreases as size increases where all other features are similar. This is
typically referred to as diminishing marginal utility.
Site Utility
•
A site’s utility is determined by its size, shape, accessibility and future development potential.
Larger and rectangular sites have higher site utility than smaller irregular sites; therefore
adjustments must be made to account for differences in site utility.
•
The Subject property contains good frontage along Canal Road. However, the location is
somewhat remote from the Town of Huntsville although located within a resort destination
setting. Comparables located along main arterials are considered superior to the Subject
lands.
Type / Scale of Development
•
The residential component is comprised of town home, residential/ accommodation units and
hotel residential development. If a comparable has a greater scale or type of development
(i.e. commercial uses also permitted) the sale is considered superior to the residential
component on the Subject lands. The appropriate adjustments have been made to the
comparables.
Achievable Density
Potential
•
The Subject property is achieving units per acre (UPA) rate of approximately 16.82 UPA
Properties containing a lower density are considered inferior.
/
Development
PROPERTY VALUATION
45
C OMPARABLE S A LES A NA LYSIS – R ESIDENTIAL C OMPONENT
-ii- Residential Component: 47.13 Acres
We have researched five comparable transactions acquired for a future higher density, or condominium /
residential development use. The transactions range in time adjusted prices from $9,012 per buildable unit to
$26,175 per buildable unit, with an average rate of approximately $17,821 per buildable unit.
The high end of the range is highlighted by Index Sale No. 2, priced at a time adjusted rate of $26,175 per
buildable unit and an unadjusted rate of $79,890 per acre. This comparable, is located within the Kawartha Lakes
area – however, is considered to be situated in a superior location in Lindsay. The site is similar in scale, at 36.30
acres, and because of this has significantly superior future development potential. Approximately 3.00 acres of
the site is situated within an area designated for commercial development. Consequently, primarily due to the
superior location of the comparable, a lower rate per buildable unit is anticipated for the Subject property.
The low end of the range is highlighted by Index No. 4, priced at a time adjusted rate of $9,012 per buildable
unit. This comparable, similar to the Subject lands, is located within the Kawartha Lakes area – however, is
considered to be situated in an inferior location in Lindsay – primarily due to the poor quality of the surrounding
uses and lack of amenities within the immediate area. The site is small in scale and contains a superior density
per acre than the Subject property (50.00 units per acre). However, the site received approval for an affordable
housing developing, an inferior development type when compared to the Subject property. Therefore, based
primarily on the inferior location and affordable housing development characteristic, a higher rate per buildable
unit is expected for the Subject site.
The best comparables are highlighted by Index Sale No.’s 1 and 5, priced at time adjusted rates of $24,119 and
$11,997 per buildable unit, respectively. Index No. 1 is the only comparable that is considered similar in terms of
location – with the site being located within the Village of Fenelon Falls. However, the site is small in scale, at
1.20 acres, and received planning approval for a small 24 unit condominium project – a superior characteristic
based on the diminishing marginal utility principal. Consequently, this comparable sets the upper limit to value
based on its small scale and approvals in place– however, a lower rate per buildable unit is anticipated based on
the small scale of the comparable. Index No. 5 is able to provide a reasonable perspective of value for the t
residential component of the Subject property mixed-use development. This comparable is situated within a
superior area of Lindsay, where new residential development is evident. The comparable is similar to the Subject
property in terms of site utility, type of development and frontage / visibility. However, the site is considered
inferior in terms of achievable density, based on the lower developable units per acre. Consequently, after all
adjustments have been made, we can anticipate a similar rate per buildable unit for the residential component of
the Subject property’s mixed-use development.
Residential Component – 791 Units
The subject does not yet have approval for its proposal but feedback from the Town has been favorable. The
submission of 791 units is massive in scale in relation to the comparables and therefore a discount is expected to
take into account the risk associated with the approval process and the absorption period.
As indicated our sales indicated a range of $9,012 to $26,175 per buildable unit after time adjustments. After all
other adjustments our range was from $4,956 to $19,631 per buildable unit with an average of $11,409 per
buildable unit.
The subject is substantially larger in scale then all the comparables and not yet fully approved and therefore
would expect the unit rate to be 30% to 50% below the average adjusted indicated rate. The majority of the
PROPERTY VALUATION
46
adjustment would be attributed to the scale of the development say 25-35%. The subject is expected to receive
approval in less than six months and the conditions to such approval are considered minor in nature with an
adjustment of approximately 5 to 15%.
After analyzing all of the market data, we believe that the residential component of the residential lands within the
Resort Village mixed-use development area will reasonably command market values in the range of $6,000 per
buildable unit to $8,000 per buildable unit. We have chosen the mid-point of the range, or $7,000 per buildable
unit as our market value estimate for the 791 unit residential development. The three different unit mixes is likely
to change depending on demand and therefore a blended rate was concluded.
$7,000 per buildable unit x 791 buildable units = $ 5,537,000
This market value estimate equates to approximately $116,922 per acre of land – well below the average rate per
acre of the comparable transactions (approximately $$C362,435 per acre of land). However, this is above Index
No. 2 which is slightly smaller in size and lower density compared to the subject. In addition, the subject has not
been granted zoning approval.
M ARKET V A LUE C ONCLUSION - R ESIDENTIA L C OMPONENT
Total Value for the Residential Component of the Mixed-Use Development:
$5,500,000
-II- C OMMERCIA L C OMPONENT : 4.29 A CRES
The Subject property has applied for 46,758 square feet of retail development space. While we recognize that
18,083 square feet will be built in conjunction with the hotel component, we have valued the commercial
component as free standing space. Assuming 25% site coverage, a site area of 4.29 acres would be required.
-III- H IGHWAY C OMMERCIA L L AND A NA LYSIS : 21.25 A CRES
Since the Highest and Best Use of this area of the Subject property (21.25 acres) is for future highway
commercial development, we have analyzed sales purchased for a similar commercial use within the immediate
and surrounding areas. Since there were a limited number of transactions within the Huntsville area, we have
expanded our search area. We have focused our search on areas throughout the Kawartha Lakes Region and
Muskoka Region and similar small communities throughout Ontario.
METHODOLOGY
In estimating the market value of the Subject property we have utilized the Direct Comparison Approach to value.
We have undertaken the following approach:
-i- Using the Direct Comparison Approach, concluded at a current market value estimate for the 4.29 acre
Village Centre Commercial Component and the 21.25 acre highway commercial component of the Subject
property.
A summary of the relevant sales we have researched is presented in the tables on the following pages:
PROPERTY VALUATION
47
V ILLAGE C ENT RE R ETAIL L ANDS : 4.29 A CRES & H IGHW AY R ETA IL / C OMMERCIAL C OMPONENT : 21.25 A CRES
Comparable Retail / Commercial Land Transactions
Index
No.
Address
City
Date of
Sale
Sale Price
Site Area
(Net Acres)
Motivation
4.900
Retail Development Retail Plaza
$ / Acre
Purchaser
Comments
Comparable Retail / Commercial Land Transactions - Small Commercial Lands
1
449 Kent Street W
Lindsay
11-Jul-13
$1,456,000
$297,143
Vacant retail / commercial land at southern boundary of
Lindsay commercial node. Purchaser intends to
Lindbrook Developments Inc. develop the land with a 6 building, 50,036 square foot
retail plaza. Development time frame is deemed midterm.
2
50 Howland Drive
Huntsville
30-Apr-12
$325,000
1.160
Retail / Industrial
Development
$280,172
Valtech Inc.
Industrial commercial land located in Muskoka
Commerce Park. Site benefits by being adjacent to
Motel 6 and across the street from Walmart. The parcel
is zoned M2 which allows many retail uses including
restaurants, hotels, motor vehicle dealerships, home
improvement centres, or offices. Site allows a maximum
of 26,000 square feet of building.
3
1 Bickley County Drive
Huntsville
15-Jun-11
$1,300,000
3.950
Retail Development
$329,114
350634 Ontario Limited
3.95 acre parcel currently improved with an 11,500
square foot automobile dealership. Serviced at site
boundary.
Plazacorp Investments Ltd.
Located at the outskirts of Wasaga Beach and is
currently zoned for a continuation of the existing rural
uses. We understand that the purchaser intends to
develop the site with a 40,000 square foot retail plaza
and potentially town house units located at the rear of
the property.
Monteith Holdings Inc.
Vacant 9.46 acre site purchased for the development of
a retail plaza. The site is located in Collingwood within
a primarily industrial area. The site has the planning
designations in place to permit a variety of commercial
uses, including furniture stores, home improvement
centres, equipment sales and service uses. The site
comprises an irregular, triangular configuration and
contains frontage along Highway No. 26.
Comparable Retail / Commercial Land Transactions - Large Commercial Lands
4
5
River Road W
201 Macdonald Road
Wasaga Beach
Collingwood
17-Jan-13
31-Dec-11
$1,500,000
$1,500,000
9.25
9.46
Retail / Commercial
Development
Retail / Commercial
Development
$162,162
$158,562
Minimum
$325,000
1.160
$158,562
Maximum
$1,500,000
9.460
$329,114
Average
$1,216,200
5.744
$245,431
Resort Village Centre &
Subject:
Huntsville
Non-Waterfront Lands
21.25
Retail Development
PROPERTY VALUATION
COMPARABLE SALES MAP
5
2
4
48
ANALYSIS
OF
PROPERTY VALUATION
49
COMPARABLE SALES
Since no two properties are completely alike, adjustments must be made to compensate for differences between
the comparable sales and the Subject property. The major elements of comparison for an analysis of the Subject
type of property include:
•
Date of Sale - changes in market conditions since the sale
•
Property rights conveyed
•
Financial terms of the transaction
•
Conditions or motivations surrounding the sale
•
Location of the real estate
•
Size of site area (Acres)
•
Site utility
•
•
Development Potential / Land Use Policy
Downward adjustments will be made to those comparables considered superior to the Subject. Conversely,
upward adjustment will be made to those comparables considered to be inferior. In this regard a summary of the
relevant details is presented in the following table:
ANALYSIS
Sale Date
•
improved through 2010 until 2014. For the purpose of this appraisal report, our time
adjustment has been made as follows:
•
improved through 2010 until 2013. Since it is difficult to apply a time adjustment for vacant
commercial lands – primarily due to the significantly differing features of each property – we
have examined the inflation rate throughout the Greater Toronto Area as well as the Ottawa
Area. The CPI (Consumer Price Index) for the GTA has risen approximately 8.2% since
2009, resulting in an average growth rate of approximately 2.05% per year. While the CPI for
the Ottawa area has risen approximately 8% since 2009, resulting in a 2.00% growth rate per
year. Therefore, consistent with the Greater Toronto Area and Inflation Rate, we have
applied a 2.05% per year annual growth rate to each comparable for the purpose of this
report.
PROPERTY VALUATION
50
•
When real property rights are sold, they may be the sole subject of the contract or the
contract may include other rights. In the sales comparison analysis, it is pertinent that the
property rights of the comparable sale be similar to the property rights of the Subject
property. All the sales considered were fee simple transfers, therefore no adjustments were
deemed necessary.
Financing Terms
•
The transaction price of one property may differ from that of a similar property due to different
financing arrangements. For example, more favourable financing might include a VTB
(Vendor Take Back) mortgage at a lower than market interest rate, which tends to have a
positive influence on the price.
•
All of the comparable sales researched were acquired on either an “all cash” basis - without
market based financing or contained a VTB that was at market rates. Therefore, no
adjustments were required.
•
Adjustments for conditions of sale usually reflect the motivations of the purchaser and
vendor. In some cases the conditions of sale significantly affect transaction prices. Sales
that reflect unusual situations require an appropriate adjustment for motivation or sale
condition. For example, power-of-sale conditions involve a certain degree of urgency on part
of the lender - leading to a somewhat lower sale price than what would otherwise be
expected. On the other hand, transactions to create a land assembly may result in higher
motivation by the buyer which often leads to a higher sale price than would be expected.
•
All indicated sales are considered “arms length” and by typical motivated vendor(s) and
purchaser(s). As a result, no adjustments were necessary for the conditions of sale.
Location
•
An adjustment for location within a market area may be required when the locational
characteristics of a comparable property are different from those of the Subject property.
Excessive locational differences may disqualify a property from use as a comparable.
Although no location is inherently desirable or undesirable, the market recognizes that one
location is better than, similar to, or worse than another. Locational adjustments were based
on both geographic and neighbourhood location. Public transportation, proximity to amenities
and the surrounding area have all been factored into our final adjustment.
Site Area (Acres)
•
The price per acre of site area is expected to vary with the size of the site. Generally the
price per acre decreases as size increases where all other features are similar. This is
typically referred to as diminishing marginal utility.
Site Utility
•
A site’s utility is determined by its size, shape, accessibility and future development potential.
Larger and rectangular sites have higher site utility than smaller irregular sites; therefore
adjustments must be made to account for differences in site utility.
•
The Subject property is somewhat removed from the Town of Huntsville retail strip. . Index
No. 4 is considered to have superior frontage / visibility based on the superior retail location.
Development Potential
•
The Subject property has the potential to be developed with highway commercial uses.
Comparables that have a greater development potential are considered superior to the
Subject site.
Land Use Policy
•
The Subject site has applied for future retail / commercial development. All of the
comparables were designated and zoned for retail uses, therefore considered superior.
Conditions of Sale
PROPERTY VALUATION
The following table outlines the adjustments applied to each comparable commercial land sale:
SALES SUMMARY for:
Comparable Retail / Commercial Land Transactions
Small Land Parcels for Village Centre
Large Land Parcels for Highway Commercial
Subject
Land Sale No. 1
Land Sale No. 2
No.3 offer
Land Sale No. 4
Land Sale No. 5
Address
Resort
Village
Centre & Highway
Commercial Lands
449 Kent Street
W
50
Drive
HWY 60,
River Road W
201 Macdonald Road
City
Huntsville
Sale
Date
n/a
Lindsay
Huntsville
Huntsville
Wasaga Beach
Collingwood
Sale
Price
n/a
$1,456,000
$325,000
$11,050,000
$1,500,000
$1,500,000
Land Area (Acres)
4.29 / 21.25
4.900
1.160
3.000
9.250
9.460
$297,143
$280,172
$350,000
$162,162
$158,562
Fee Simple
Fee Simple
Fee Simple
Fee Simple
Fee Simple
Comparable
Retail
Land
Transactions
Unadjusted Price Per Acre of Land
11-Jul-13
Howland
30-Apr-12
Mar.2014
17-Jan-13
31-Dec-11
ADJUSTMENT GRID
Financing Terms
Market
Market
Market
Market
Market
51
Conditions of Sale
Time/Market Conditions
Appraisal Date:
Compound Annual Growth
Rate:
Percent Adjustment
Land Area (Acres)
Site Utility
Development Potential
Similar
Similar
Similar
Similar
Similar
Inferior
Inferior
$350,000
2.5%
Inferior
$291,379
0.0%
Inferior
$301,600
4.0%
Similar
$166,216
4.7%
$166,015
Similar
Similar
Similar
Similar
Similar
Similar
Similar
Similar
Similar
Similar
Mar-14
2.05%
Time/Market Adjusted Price/$ per Acre of
Land
Location
PROPERTY VALUATION
1.5%
Similar
Similar
Land Use Policy
Similar
Overall Comparability
Similar
Similar
Similar
Similar
Similar
10%
$320,517
Similar
Similar
Similar
-10%
$315,000
-10%
Similar
Similar
Similar
$149,594
-10%
Similar
Similar
Similar
149,413
52
PROPERTY VALUATION
53
C OMPARABLE S A LES A NA LYSIS – V ILLA GE C ENT RE R ETA IL C OMPONENT
We have researched five comparable transactions acquired for a future retail / commercial development use.
Three of the comparable transactions are small in scale (1 - 5 acres), while two of the comparables are larger in
scale (5+ acres). The small scale commercial land transactions range in time adjusted prices from $291,379 per
acre to $$350,000 per acre, with an average rate of approximately $314,000 per acre; while the larger scale
commercial land transactions range in time adjusted prices from $166,015 per acre to $166,216 per acre, with an
average rate of approximately $166,116 per acre
The smaller comparables are outlined by Index No.’s 1, 2 and 3 – priced at a time adjusted rate of $301,600,
$291,379 and $348,203 $350,000 per acre, respectively. These lands are able to provide a reasonable
perspective of value for small, unserviced commercial lands situated within rural areas. The lands located within
the Huntsville marketplace are considered to be superior from a locational perspective – primarily based on the
close proximity to the Highway No. 11. . Index No. 1 is able to provide a reasonable perspective of value for the
Subject lands – based primarily on the recent time of sale and the location. The site is considered similar in terms
of scale, site utility and frontage / visibility. Index No.3 is a current listing of a 4.0 acre parcel of which 3.0 acres is
useable on the north side of Highway 60, one kilometer east of the Town of Huntsville. The site is zoned C3-EX
and MU3 which allows a wide range of uses. There is a conditional offer (in March 2014) for $350,000 per
useable acre. The purchaser has secured one commercial tenant and the deal is believed to be conditional upon
securing additional tenants. This represents a good comparable to the subject, however since the transaction has
zoning approval, we can anticipate achieving a lower rate per acre.
M ARKET V A LUE C ONCLUSION - R ETA IL / C OMMERCIAL C OMPONENT
Consequently, after analyzing all of the market data and in discussions with numerous industry professionals, we
believe the Subject property will reasonably command market values in the range of $300,000 per acre of land to
$350,000 per acre of land. We have chosen the mid-point of the range, or $325,000 per acre of land as our
market value estimate for the 4.29 acre retail / commercial component of the mixed-use development on the
Subject property. Our indicated value falls outside our indicated range of sales which are historical. Greater
weight was placed on the current offer after discussions with the listing agent. No adjustment is required for scale
due to the size of the parcel which would be in demand. A slight downward adjustment is required for the subject
site not having zoning approval.
Therefore, our market value estimate for the 4.29 acre retail / commercial component of the Subject lands is as
follows:
4.29 Acres of Commercial Lands x $325,000 Per Acre = $ 1,400,000 (Rounded)
M ARKET V A LUE C ONCLUSION - R ESIDENTIA L C OMPONENT
Total Value for the Residential Component of the Mixed-Use Development:
Total $6,950,000
$5,550,000
PROPERTY VALUATION
54
C OMPARABLE S A LES A NA LYSIS – H IGHWA Y C OMMERCIA L R ETA IL C OMPONENT
The larger comparables are outlined by Index No.’s 4 and 5 – priced at a time adjusted rate of $166,015 and
$166,216 per acre, respectively. Index No. 4 is located at the outskirts of Wasaga Beach and is currently zoned
for a continuation of the existing rural uses. We understand that the purchaser intends to develop the site with a
40,000 square foot retail plaza and potentially town house units located at the rear of the property. Index No.4
was acquired by Plazacorp Investments who are proposing a mixed retail residential development with 40,000
square feet of retail and 75-80 townhouses - a superior future development characteristic. Index No. 5 - located
at 201 Macdonald Road, is a vacant 9.46 acre site purchased for the development of a retail plaza. The site is
located in Collingwood. The site has the planning designations in place to permit a variety of commercial uses,
including furniture stores, home improvement centres, equipment sales and service uses, similar to the Subject
lands. The site comprises an irregular, triangular configuration and contains frontage along Highway No. 26, also
a similar characteristic. This property is are able to provide a reasonable perspective of value for the larger
commercial lands on the Subject. However, based on the larger site size (21.25 acres), a lower rate per acre is
logically anticipated.
Consequently, after analyzing all of the market data and in discussions with numerous industry professionals, we
believe the 21.25 acre commercial component of the Subject property will reasonably command market values in
the range of $125,000 per acre of land to $175,000 per acre of land. We have chosen the mid-point of the range,
or $150,000 per acre of land as our market value estimate for the 21.25 acre retail / commercial component of the
mixed-use development on the Subject property.
Therefore, our market value estimate for the 21.25 acre retail / commercial component of the Non-Waterfront
commercial component of the Subject lands is as follows:
21.25 Acres of Commercial Lands x $150,000 Per Acre = $ 3,190,000 (Rounded)
PROPERTY VALUATION
DIRECT COMPARISON APPROACH – NON-WATERFRONT
55
LANDS
I NTRODUCT ION
The Direct Comparison Approach is based on the Principle of Substitution which maintains that a prudent
similar to the subject, the sale price per acre is the most commonly used unit of comparison.
S UBJECT L ANDS
The non-waterfront lands include two distinct types of parcels. The first includes all the lands identified as the
Running Bear and Nissan Lands. This 215.24 gross acre parcel is located to the north of Highway 60 and is
currently improved with a barn, driving course, and airstrip runway. Portions of this land house marshes.
Approximately 21.25 acres of this parcel is zoned for future commercial uses, leaving the remaining 193.99 acres
as excess lands. The second component of the non-waterfront lands consists of approximately 100.01 acres of
the Deerhurst Highlands Lands and 38.02 acres of the Crozier and Contant Lands. Therefore, the total acreage of
the non-waterfront lands is 360.58 acres - 339.33 acres deemed excess lands and 21.25 acres envisioned for
future commercial uses. The 21.25 acres of commercial lands will be analyzed in the commercial land section of
the report - on Page 62.
As one sale is not necessarily indicative of market value, an appraiser examines a number of market
transactions. When properly reconciled, trends emerge, leading to the estimate of market value of the lands being
appraised. To that end, the sales selected are considered to be similar to the subject and deemed to provide the
most reliable evidence of value. A search of comparable sales yielded 5 sales and one current listing which were
considered to be similar to the subject lands. The sale prices ranged from $500,000 to $2,200,000, with an
average of $670,600. When converted to price per acre, the prices ranged from $2,791 per acre to $22,000 per
acre – an average of $8,631 per acre.
SUMMARY OF LAND SALES - NON-WATERFRONT LANDS
Property
Rights
Conveyed
Sale Date
Site Utility
Public
Utilities
S
Subject Lands
340.58
Fair/Excellent
All Available
1
848 CLEARWATER LAKE
ROAD, 1086 N DEER LAKE
ROAD, Huntsville, ON
225 MUSKOKA ROAD 10,
Huntsville, ON
112.81
Excellent
All Available
Fee Simple
Jul-08
$778,000
$6,897
88.21
Good
All Available
Fee Simple
Jul-08
$575,000
$6,519
SKYHILLS ROAD, CONC 5,
PART LOTS 4 & 5,
Huntsville, ON
10 HIBBERD LANE,
Huntsville, ON
179.17
Excellent
All Available
Fee Simple
Jan-09
$500,000
$2,791
66.83
Good
All Available
Fee Simple
Oct-09
$600,000
$8,978
5
200 YONGE STREET SOUTH
100.00
Good
All available
Fee Simple
Sep-11
$2,200,000
$22,000
6
3876 S Portage Road,
110.78
Good
none
Fee simple
Jul-13
$510,000
$4,604
No.
2
3
4
Location
Size
(Acres)
Sale Price
$/Acre
STATISTICS
Low
35.00
High
179.17
97.00
Average
Compiled by Cushman & Wak efield Ltd.
Jul-08
Sep-11
Jul-09
$500,000 $2,791
$2,200,000 $22,000
$670,600 $8,631
PROPERTY VALUATION
56
ADJUSTMENTS
No.
Address
Sale Date Sale Price Price per Acre
Time
%
Location
%
Size
%
Other
%
Total % Comparability Adjusted
Adjustment
Sale Price
S Subject Lands (340.58 ac)
1 848 Clearwater Lake Road, 1086 N Deer Lake Road, Huntsville
Jul-08 $ 778,000
$6,897
Upward
11.00%
Upward
5.00% Downward -15.00%
Nil
0.00%
1.00%
Similar
$6,966
2 225 Muskoka Road 10, Huntsville
Jul-08 $ 575,000
$6,519
Upward
11.00%
Upward
5.00% Downward -15.00%
Nil
0.00%
1.00%
Similar
$6,584
3 Skyhills Road, Conc 5, Parts Lots 4 & 5, Huntsville
Jan-09 $ 500,000
$2,791
Upward
10.00%
Upward
5.00% Downward -15.00%
Upward
15.00%
15.00%
Inferior
$3,210
4 10 Hibberd Lane, Huntsville
Oct-09 $ 600,000
$8,978
Upward
8.00%
Upward
5.00% Downward -15.00%
Nil
0.00%
-2.00%
Superior
$8,798
5 200 Yonge Street South, Huntsville
Sep-11 $ 2,200,000
$22,000
Upward
4.20%
Nil
-25.80%
Superior
$16,324
Jul-13 $ 510,000
$4,604
Upward
1.00%
Upward
6.00%
Inferior
$4,880
6 3876 S Portage Road, Huntsville
0.00% Downward -15.00% Downward -15.00%
5.00% Downward -15.00%
Upward
15.00%
A DJUSTMENT C RITERIA
In valuing the subject site, a comparison was made to each of the index sales. The bases for comparison
included consideration of the following items:
MARKET CONDITIONS
of the sale of a comparable land and the date of valuation. The sales included in this analysis occurred between
July 2008 and July 2013. We have adjusted 2% per annum to reflect general inflation.
PROPERTY RIGHTS CONVEYED
When real property rights are sold, they may be the sole subject of the contract or the contract may include other
rights. In the sales comparison analysis, it is pertinent that the property rights of the comparable sale be similar to
the property rights of the subject lands. All the sales considered were fee simple transfers, thus no adjustments
were necessary.
FINANCING TERMS
The transaction price of one property may differ from that of a similar property due to different financing
arrangements. Financing arrangements may include existing mortgages at favourable interest rates or paying
cash to a lender so that a mortgage with a below-market interest rate could be offered. To the best of our
knowledge, all of the sales used in this analysis were accomplished with cash or market-oriented financing.
Therefore, no adjustments were required.
CONDITIONS OF SALE
Adjustments for conditions of sale usually reflect the motivations of the purchaser and vendor. In some cases, the
conditions of sale significantly affect transaction prices. Sales that reflect unusual situations require an
appropriate adjustment for motivation or sale condition. For example, power-of-sale conditions involve a certain
degree of urgency on the part of the lender - leading to a somewhat lower sale price than what would otherwise
be expected. All the sales considered were normal market transactions with no undue motivation, thus no
adjustments were necessary.
LOCATION
An adjustment for location within a market area may be required when the locational characteristics of a
comparable land are different from those of the subject property. Excessive locational differences may disqualify
a land from being used as a comparable. Although no location is inherently desirable or undesirable, the market
recognizes that one location is better than, similar to, or worse than another. Any locational adjustments were
based on both regional and neighbourhood location.
PROPERTY VALUATION
57
ACCESS
Overall ease of access to the site was also considered. This included both regional and immediate area access
off local roads and such.
OTHER
In some cases, other variables will have an impact on the price of a land transaction. Examples include soil or
slope conditions, restrictive zoning, easements, wetlands and external influences.
Each of the comparables had similar development potential as the subject.
NOTE: The Appraisal Institute of Canada recommends the use of "paired sales analysis" in the derivation of
adjustments. This involves locating two very similar sales that sell in a similar time period. If the two sales differ in
only one key feature, then the difference in sale price can be used as the "market indicator" for the adjustment for
that feature. In practice, this concept usually only applies to newer homes in the subdivision. Rural, commercial
and industrial properties tend to be unique, and therefore in practice it is not usually possible to find paired sales
to derive adjustments. In the absence of paired sales, it is the appraisers' experience and judgment (based on
observation) which is used for adjustments.
S ALES A NA LYSIS
A descriptive analysis of the sales is outlined below:
COMPARABLE SALE 1
This 112.81 acre parcel was transferred for a total consideration of $778,000 or $6,897 per acre in July 2008. The
property was sold to Clearwater Lake Holdings Inc by Wigmog Inn Ltd.
COMPARABLE SALE 2
This 88.21 acre parcel was sold in July 2008 for a total consideration of $575,000 or $6,519 per acre. It was
transferred to All Ontario Recycling Inc from 1454085 Ontario Inc.
COMPARABLE SALE 3
This 179.17 acre parcel was sold in January 2009 for a total consideration of $500,000 or $2,791 per acre. The
parcel is the largest within the sales analyzed and was sold for the lowest price per acre.
COMPARABLE SALE 4
Sold in October 2009, this parcel includes 66.83 acres and was sold for a total consideration of $600,000 or
$8,978 per acre. It was transferred to Huntsville Haven Inc.
COMPARABLE SALE 5
This 100 acre parcel is located five minutes from town adjacent to Rock Ridge Recreation Park. The site is
located within the Urban Boundary and is currently un-serviced. The developer must connect with Town services
at its own cost. The sale price reflected a rate of $22,000 per acre.
COMPARABLE SALE 6
This 110 acre parcel that sold for $510,000 or $4,604 per acre. The site was sold by a developer to another
developer but has no services available.
PROPERTY VALUATION
58
C ONCLUSION
After adjustments, the sales range in price from $3,210 to $16,324 per acre, with an average rate of $7,794 per
acre.
The best comparable transactions are Index No.’s 1 and 2, priced at adjusted rates of $6,966 and $6,584 per
acre, respectively. The subject is larger than all of the comparables and therefore, would expect a value near the
lower end of our average range.
It is our opinion that the current market value of the Excess Non-Waterfront Lands via the Direct Comparison
Approach, as at March 31, 2013 was:
339.33 acres @ $7,000 per acre = $2,375,310
TWO MILLION THREE HUNDRED AND EIGHTY THOUSAND DOLLARS
DIRECT COMPARISON APPROACH - UNSOLD RESIDENTIAL
DEVELOPMENT LOTS
We utilized the Sales Comparison Approach to develop an opinion of value for the 95 residential land lots located
at the resort. Discussions with the Client, indicate that 24 lots within the development have sold, therefore for the
purpose of this analysis, we have only analyzed the remaining 71 residential lots. The subject lots are all fully
serviced. We examined current offerings and analyzed prices buyers have recently paid for comparable lots. The
subject lots range in size from 0.31 acre to 0.94 acre, and range in frontage offered from approximately 22.01 feet
to 260.76 feet. All comparables utilized were sold between October 2011 and July 2012.
Of the total 95 lots, 43 are located within an internal private road with limited views of the golf course and are
considered less desirable than those offering direct golf course views, of which there are 52 lots. 17 of these 52
golf course view lots are considered large lots with over 0.50 acre per lot, while the remaining 35 lots are
considered standard golf view lots. Below is a breakdown of our classification of the remaining lot inventory:
REMAINING LOTS
LOT DESCRIPTION
Standard
Large (with Golf View)
Standard (with Golf View)
COUNT
39
8
24
The most widely used and market-oriented unit of comparison for properties with characteristics similar to those
of the subject is price per lot. All transactions used in this analysis are based on the most appropriate method
used in the local market.
The major elements of comparison used to value the subject site include the property rights conveyed, the
financial terms incorporated into the transaction, the conditions or motivations surrounding the sale, changes in
market conditions since the sale, the location of the real estate, its utility and the physical characteristics of the
property.
The subject lots and their dimensions are detailed on the following pages.
MAP OF LOTS
PROPERTY VALUATION
59
SUMMARY
OF
PROPERTY VALUATION
LOT SALES
Lot #
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
Lot
Dec. 2012
$179,900
$179,900
$179,900
$179,900
$179,900
$182,900
$186,900
$189,900
$189,900
$189,900
$189,900
$189,900
$189,900
$189,900
$189,900
$191,900
$194,900
$195,900
$191,900
$189,900
$186,900
$186,900
$179,900
$184,900
$199,900
$211,900
$204,900
$199,900
$189,900
$179,900
$179,900
$189,900
$189,900
$184,900
$179,900
$179,900
$184,900
$184,900
Dimensions Acres Sales Price Sales Date
86' x 133'
187' x 153'
194' x 83'
202' x 83'
201' x 84'
189' x 84'
169' x 91'
195' x 79'
219' x 79'
207' x 79'
216' x 83'
238' x 83'
239' x 85'
214' x 96'
174' x 92'
193' x 75'
232' x 71'
282' x 68'
315' x 68'
250' x 68'
189' x 68'
194' x 68'
192' x 71'
177 x 78'
224' x 64'
360' x 61'
355' x 67'
231' x 56'
180' x 58'
163' x 55'
192' x 58'
224' x 196'
0.336
0.498
0.345
0.362
0.359
0.338
0.323
0.399
0.456
0.428
0.456
0.411
0.449
0.499
0.321
0.351
0.42
0.588
0.683
0.503
0.363
0.373
0.341
0.316
0.458
0.942
0.934
0.642
0.445
0.485
0.504
0.69
117'
138'
307'
310'
0.368
0.358
0.621 $552,900.00 2012-07-07
0.563 $552,900.00 2011-12-06
x 138'
x 113'
x 117'
x 99'
$552,900.00
$190,000.00
$565,900.00
$179,900.00
2012-07-31
2013-08-22
2012-02-21
2013-06-02
$184,900.00
$189,900.00
$549,900.00
$189,900.00
$173,164.00
$189,900.00
$549,900.00
2011-11-10
2012-07-14
2012-06-14
2012-03-31
2011-11-06
2011-12-06
2012-12-13
$189,900.00
$194,900.00
$190,900.00
$581,900.00
$555,900.00
$673,740.00
2011-11-20
2013-05-18
2011-11-10
2012-08-05
2011-10-27
2012-12-10
$199,900.00
$211,900.00
$194,655.00
$179,900.00
2011-12-06
2011-11-09
2011-11-19
2011-11-17
$529,900.00 2011-12-07
60
PROPERTY VALUATION
61
C ONCLUSION
After a thorough analysis, the comparable lot sales within the subject development reflect unit values ranging
from $173,164 to $211,900 per lot. The average of the last six sales in 2012 and 2013 was $190,283. The
superior lot views are selling compared to the remaining lots.
In addition to the sales within the subject, we are aware of five listing on MLS that are premium golf course lots
(41, 55, 67, 71 and 78 Club House Drive on the Deerhurst Highlands course that are asking between $219,000 to
$245,000. These are listings and a downward adjustment is required to reflect the eventual sale price.
We are aware of an older sale (October 2010) at 71 Club House drive that sold for $165,000. The building site is
above the roadway with a view of the pond between the 9th and 18th fairway. Adjusting upwards for time, a value
of $180,000 for a large golf course view appears reasonable.
We have grouped lots according to their salient features to arrive at an applicable value point for each of the three
lot types. Further, we have taken into account the phased development and the time frame associated with each
phase of development. We concluded that the indicated value by the Sales Comparison Approach for the 71
remaining, un-sold residential subject lots is as follows:
LOT DESCRIPTION VALUE CONCLUSION PER LOT
COUNT
INDICATED VALUE
Standard
$135,000
39
$5,265,000
Large Golf View
$200,000
8
$1,600,000
Standard Golf view
$180,000
24
$4,320,000
71
$11,185,000
Average Per Lot
$157,535
Total
ELEVEN MILLION ONE HUNDRED EIGHTY-FIVE THOUSAND DOLLARS
$11,185,000 or $158,000 (rounded) per lot
PROPERTY VALUATION
62
DIRECT COMPARISON APPROACH – WATERFRONT LANDS FOR
CONDOMINIUM DEVELOPMENT
I NTRODUCT ION
The Direct Comparison Approach is based on the Principle of Substitution which maintains that a prudent
similar to the subject, the sale price per unit is the most commonly used unit of comparison.
S UBJECT L ANDS
The subject lands are 8.60 acres in size and have 663.45 feet of water frontage. Located along Peninsula Lake
Point Road on the southeast of Deerhurst Resort, they are currently improved with a lodge, terrace, and cottages.
We understand that management plans to demolish the current improvements and build 171 condominium units,
which are to be divided into two buildings with Building 1 at 54 units in 3 storeys and Building 2 at 117 units in 4
storeys. For the purpose of this approach, we have assumed that the lands are at a vacant and ready to be
developed state.
As one sale is not necessarily indicative of market value, an appraiser examines a number of market transactions.
When properly reconciled, trends emerge, leading to the estimate of market value of the lands being appraised.
To that end, the sales selected are considered to be similar to the subject and deemed to provide the most
reliable evidence of value.
Our research yielded 3 historical sales and 1 current listings within subject’s area and surrounding areas which
were considered to be similar to the subject lands. We note that listings of this type tend to be sold at 10% to 20%
lower than their listing prices. The listings have been on the market for over a year with very little interest in the
cottage market. There is a limited number of comparable sales for this type of asset within the marketplace.
The map on the next page depicts the subject lands, followed by a table listing comparable sales:
SURVEY - LAKESIDE LODGE LANDS (8.60 ACRES)
PROPERTY VALUATION
63
No.
Address
City & Province
PROPERTY VALUATION
Sale Date Sale Price Size (Acre)
8.60
Proposed
Density
Price per Unit Price per Acre
Comments
Units
(Units/Acre)
173
20.12
Zoned DC1-2 (hotel/residential). Improved with a lodge, terrace, and
cottages.
49
7.16
$18,367
$131,579 Zoned R4. Obtained exception R4-0454 (minimum elevation for
opening is 286m). Approved for 5 buildings.
Subject 1235 Deerhurst Drive
Huntsville, ON
S1
Huntsville, ON
Sep-11
$900,000
6.84
S2
Pt Lot 20 Con 2 Chaffey
Pts 1, 4, 6, 12-15, 35R11082
20498-50 Hwy 26
Blue Mountains, ON
May-11 $1,100,000
9.10
N/A
N/A
N/A
S3
111 Blue Mountain Drive
Blue Mountains, ON
Sep-08 $7,160,000
36.44
N/A
N/A
N/A
S4
500 Ontario Street
Collingwood, ON
Feb-14 $1,125,000
1.69
50
29.59
$22,500
S5
18 Logie Street
Lindsay, ON
Dec-11 $2,900,000
36.30
116
3.20
$25,000
S6
151 Marina Park Avenue;
650 Vindin Street; 586
Victoria Street
Midland, ON
Jun-12 $4,000,000
17.55
319
18.18
$12,539
1.69
36.44
17.99
49
319
134
3.20
29.59
14.53
$12,539
$25,000
$19,602
STATISTICS
Low
High
Average
Compiled by Cushman & Wak efield Ltd.
64
$120,879 Flat, level tablelands; not serviced; improved with 2 houses; for
development of detached single family homes.
$196,487 Gently sloping lands; not serviced; plan includes 16 waterfront lots,
residential condominium, seniors home, retail, restaurants and office;
waterfront quality is limited for recreation.
$665,680 Zoned DR-6 (development residential zone permitting townhouses and
apartments, among others - density to be determined during preconsultation meeting); 2010 taxes were $16,983.
$79,890 Large, vacant mixed-use site - not serviced. Site is approved for 116
unit residential building and has approximately 3.0 acres of retail
lands. Previously sold in Sept 2010 under Power of Sale for
$2,200,000.
$227,920 Power of sale conditions. Improved with 53 condominium units in a 4storey building (55% complete) on 2.24 acres. Additional land of
15.31 acres approved for 266 condominium units, or 158 condominium
units & 107 low rise townhomes.
$79,890
$665,680
$237,073
ADJUSTMENTS
No.
Address
Subject 1235 Deerhurst Drive, Huntsville(3.47 ac)
Pt Lot 20 Con 2 Chaffey Pts 1, 4, 6, 12-15,
S1
35R-11082, Huntsville
20498-50 Hwy 26, Blue Mountains
S2
Sale Date Sale Price Price Per
Unit
Price per
Acre
Time
%
Location
%
Size
%
Other
%
Total %
Comparability
Adjustment
Adjusted
Sale Price /
Unit
Sep-11
$900,000
$18,367
$131,579
Upward
4.10%
Upward
25.00%
Nil
0.00%
Upward
20.00%
49.10%
Inferior
$27,385
May-11
$1,100,000
n/a
$120,879
Upward
5.00%
Nil
0.00%
Upward
5.00%
Nil
0.00%
10.00%
Inferior
n/a
0.00%
upwards
5.00%
Nil
0.00%
15.00%
Inferior
n/a
S3
111 Blue Mountain Drive, Blue Mountains
Sep-08
$7,160,000
n/a
$196,487
Upward
10.00%
Nil
S4
500 Ontario Street, Collingwood
Feb-14
$1,125,000
$22,500
$665,680
Similar
0.00%
Upward
25.00% Downward
-5.00%
Upward
15.00%
35.00%
Inferior
$30,375
S5
18 Logie Street, Lindsay
151 Marina Park Avenue; 650 Vindin Street;
586 Victoria Street, Midland
Dec-11
$2,900,000
$25,000
$79,890
Upward
4.00%
Upward
25.00%
Upward
25.00%
Upward
15.00%
69.00%
Inferior
$42,250
Jun-12
$4,000,000
$12,539
$227,920
Upward
3.00%
Nil
0.00%
Upwards
5.00%
Upward
25.00%
33.00%
Inferior
$16,677
S6
PROPERTY VALUATION
65
S ALES A ND L ISTINGS A NALYSIS
A descriptive analysis of the sales and listings is outlined below.
COMPARABLE SALE 1
This 6.84 acre parcel with 49 proposed units, located in Huntsville, ON, was transferred for a total consideration
of $900,000 or $18,367 per unit in September 2011. It is zoned R4 and has been approved for the construction of
5 buildings.
COMPARABLE SALE 2
The 9.10 acre parcel in Blue Mountains, ON, was sold in May 2011 for $1,100,000. Improved with 2 houses and
without service, it is planned for the development of detached single family homes.
COMPARABLE SALE 3
This 36.44 acre parcel in Blue Mountains, ON, was sold for a total consideration of $7,160,000 in September
2008. The development plan for this non serviced parcel includes 16 waterfront lots, condominium, seniors home,
retail, restaurants, and/or office. It has a waterfront quality that is limited for recreational purposes.
COMPARABLE SALE 4
Listed since October 2010, this 1.69 acre parcel in Collingwood, ON, was priced at $1,750,000. It has a zoning of
DR-6 that allowed up to 50 condominium units. The site recently sold in February 2014 (after our effective date for
$1,125,000). The site is zoned for 50 condominium units. The site is currently an animal clinic and will temporary
converted to a medical office. According to the listing agent the site will be redeveloped in three to five years. The
sale price reflects a 36% per cent decrease from the listing price. The sale price reflects a rate of $22,500 per
unit. The property has a view of Georgian Bay but also near a major highway. The subject is superior to this
comparable given its proximity to the waterfront and noise from the highway.
COMPARABLE SALE 5
Large, vacant mixed-use site - not serviced. Site is approved for 116 unit residential building and has
approximately 3.0 acres of retail lands. Previously sold in Sept 2010 under Power of Sale for $2,200,000. Based
on the scale and type of development this comparable is able to provide a reasonable perspective of value for the
subject. However, based on the superior location within Deerhurst and along the waterfront and the significantly
smaller site size, a higher rate per buildable unit is anticipated.
COMPARABLE SALE 6
This 3-parcel 17.55 acre comparable with 319 proposed units in Midland, ON, has recently sold for $4,000,000 or
$12,539 per unit. It is improved with 53 condominium units in a 4-storey building (55% complete). There has an
approval for a potential addition of 266 units in the form of condominium units or 158 condominium units and 107
low rise townhomes.
PROPERTY VALUATION
66
C ONCLUSION
The comparable sales range between an adjusted price of $16,667 per unit and $42,250 per unit – an average of
$29,172 per unit. Our comparables also indicated a range of between $79,890 and $665,680 per acre – average
of approximately $238,000 per acre. The subject reflected a density of 20.12 units per acre, which is at the high
end of all of the comparables, a superior development attribute.
Based on the time of sale, location and type of development envisioned, Comparables S4 and S5 are the best
comparables for the subject. These comparables, after adjustments, equate to approximately $30,375 per
buildable unit and $42,250 per buildable unit, respectively. In terms of the Subject development, the
condominium will be directly on the waterfront and contain excellent views of Peninsula Lake, an attractive feature
for a condominium development. Consequently, we believe the subject will command a rate within the range of
$40,000 per unit to $45,000 per unit for the waterfront condominium development. Consequently, we have
chosen the mid-point of the range, or a rate of $42,500 per unit. It is our opinion that the current market value of
the Waterfront Lands for Condominium Development via the Direct Comparison Approach, as at March 31,
2014 was:
173 @ $42,500 per unit = $7,352,500
SEVEN MILLION THREE HUNDRED AND FIFTY THOUSAND DOLLARS
$7,350,000 or $42,500 per developable condominium unit
*The zoning allows up to 173 units. The site plan application is based on 171 united. Our analysis is based on the
maximum allowed under the zoning bylaw.
The above value reflects a rate of approximately $855,000 per acre. This per acre rate is consistent with Index
No. S4. Although the comparable is small in scale, the development time frame is approximately 3 to 5 years
away from being developed. The adjusted per acre rate for this comparable is approximately $900,000 - based
on the similar adjustments previously undertaken. Logically, we can anticipate achieving a lower rate per acre
based on the larger scale of the subject site.
GENERAL DES CRIP TION (DEERHURS T S ANCTUARY) ( FORMERLY WOODLAND HEIGHTS )
Configuration:
Rectangular shaped Lots (32)
Frontage:
198’ to 325 feet frontage
Site Area:
72.8 acres ( aggregate total)
The subject property was acquired for $3,900,000 on August 16, 2012 for $3,900,000. The developer has under
duress at the time and represented an opportunity for the purchaser (Skyline). The challenge of the project was
its isolation. Local agents had difficulty attracting purchasers to its location away from Town amenities. The
acquisition by Skyline is expected to have a positive effect on values as lot purchasers will have access to the
Deerhurst amenities.
Enclosed are comparable lots sales and listings in the subdivision.
PROPERTY VALUATION
The following is a list of the price list of the Woodland Heights and comparable sales within the subdivision:
CHART OF SALES – WOODLAND HEIGHTS
INDEX NO.
DATE SOLD
ADDRESS/LOT & PLAN
CONSIDERATION
LOT SIZE
(ACRES)
1
08/28/09
52 Deerfoot Trail
Lot 12 Plan 683
$115,000
1.32
2
05/11/10
4 Deerfoot Trail
Lot 1 Plan M683
$357,500
2.80
3
06/02/10
115 Deerfoot Trail
Lot 7 Plan 699
$148,571
2.92
4
05/02/11
112 Deerfoot Trail
Lot 44 Plan M699
$135,000
1.37
5
09/30/11
72 Deerfoot Trail
Lot 4 Plan M692
$105,000
3.75
6
03/16/12
43 Deerfoot Trail
Lot 30 Plan 683
$123,543
1.33
7
04/23/12
156 Deerfoot Trail
Lot 22 Plan M699
$130,000
2.129
L1
Current listing
$163,229
1.50
L2
Current listing
$145,707
1.32
L3
Current listing
99 Deerfoot Trail
Lot 3
150 Deerfoot Trail
Lot 23, Phase 3
151 Deerfoot Trail
2.30
L4
Current listing
15 Old Hemlock Trail
L5
Current listing
18 Royal Oak Crescent
L6
Current listing
L7
Current listing
Lot 39 Plan 699
L8
Current listing
Lot 46
$129,000
$375,000
View over Fairy lake
$153,085
$349,000
Lake views
$279,000
Drilled well in place and wiring
288 days on mkt
$162,307
1.72
2.33
1.59
2.31
2.54
67
PROPERTY VALUATION
68
Our sales within the Woodland Heights subdivision ranged from $105,000 to $357,500 for lots ranging in size
from 1.32 to 3.75 acres. The lots with view of the Fairy Lake command a premium and sell near the upper part of
the range.
Below is the price list of the Lots in the Deerhurst Sanctuary since the August acquisition. Discussions with the
Client, indicate that two of the lots (Lot No.’s 13 and 25) have sold within 2013. The lots sold for $175,000 and
$250,000, respectively.
The following is a list of the price list of the Deerhurst Sanctuary:
PROPERTY VALUATION
69
Recognizing that the subject now falls under the Deerhurst banner, the value has increased within the
subdivision. The subdivision has a large upside but there will be significant marketing and commission costs to
achieve a sell out. The sell out period could be longer than three years.
Our most recent comparable sales range from $175,000 to $250,000 per lot. These sales are able to provide a
good indication of the market value for the Subject lands. However, based on the anticipated long-term sell out
period and the cost associated with holding the lots, a lower price per lot is anticipated.
Based on the recent comparable sales, a market rate of $200,000 per lot has been selected. Based on a 4 to 5
year sell out period and an assumed 10% discount rate, the resulting present market value of the remaining lots is
as follows:
Sanctuary Residential Lots
Known Information
Present Value ($) / Lot
Number of Remaining Residential Lots
Inflation Rate
Discount Rate
Development Time Frame
Year 1
Year 2
Year 3
Year 4
Year 5
$200,000
30
2.05%
10%
Discounted Value
$5,566,364
$5,164,067
$4,790,846
$4,444,599
$4,123,375
Low End
$137,446
High End
$148,153
Taking into account the sell-out period, the lots range in price from approximately $137,000 to $149,000 per lot.
Based on the location of the residential lots within the Deerhurst banner and taking into account the estimated
development time frame, the indicated value reflects a rate of approximately $143,000 per lot which appears
reasonable based on the comparable sales.
FOUR MILLION TWO HUNDRED AND NINETY THOUSAND DOLLARS
$4,290,000, or $143,000 per lot
RECONCILIATION AND FINAL VALUE OPINION
70
RECONCILIATION AND FINAL VALUE OPINION
Based on the analysis contained herein, the total value of the various lands associated with the Deerhurst Resort
as at March 31, 2014 was:
AREA
VALUE PER
(ACRE/LOT/UNIT)
ACRE/LOT/UNIT
Lakeside Golf Course Lands
48.23
$35,000
$1,690,000
Remaining Lands
28.81
$35,000
$1,010,000
LAND PARCEL
TOTAL VALUE
WATERFRONT LANDS
Total ( rounded)
$2,700,000
NON-WATERFRONT LANDS
Excess Lands
339.33
$7,000
$2,380,000
Commercial Component
21.25
$150,000
$3,190,000
Total
$5,570,000
UNSOLD RESIDENTIAL DEVELOPMENT LOTS
Various
71
$158,000
$11,185,000
WATERFRONT LANDS FOR RESIDENTIAL DEVELOPMENT
Various
173
$42,500
$7,350,000
30
$143,000
$4,290,000
$7,000
$5,550,000
$325,000
$1,400,000
DEERHURST SANCTUARY LANDS
Various Lots
RESORT VILLAGE LANDS
791
Resort Village Total
4.29 ac.
$6,950,000
ADDENDA CONTENTS
ADDENDA CONTENTS
ADDENDUM A:
ADDENDUM B:
CERTIFICATION OF APPRAISAL
ADDENDUM C:
GLOSSARY OF TERMS & DEFINITIONS
ADDENDUM D:
SUBJECT PROPERTY PHOTOGRAPHS
ADDENDUM E:
SUMMARY OF CHANGES COMPARED TO DECEMBER 31, 2013
71
Assumption
ns and Limiting Conditions
72
"Report" means the appraisal or consulting report and conclusions stated therein, to which these Assumptions
and Limiting Conditions are annexed.
"Property" means the subject of the Report.
"C&W" means Cushman & Wakefield, Inc. or its subsidiary that issued the Report.
"Appraiser(s)" means the employee(s) of C&W who prepared and signed the Report.
The Report has been made subject to the following assumptions and limiting conditions:
•
•
•
•
•
•
No opinion is intended to be expressed and no responsibility is assumed for the legal description or for any
matters that are legal in nature or require legal expertise or specialized knowledge beyond that of a real
estate appraiser. Title to the Property is assumed to be good and marketable and the Property is assumed to
be free and clear of all liens unless otherwise stated. No survey of the Property was undertaken.
The information contained in the Report or upon which the Report is based has been gathered from sources
the Appraiser assumes to be reliable and accurate. The owner of the Property may have provided some of
such information. Neither the Appraiser nor C&W shall be responsible for the accuracy or completeness of
such information, including the correctness of estimates, opinions, dimensions, sketches, exhibits and factual
matters. Any authorized user of the Report is obligated to bring to the attention of C&W any inaccuracies or
errors that it believes are contained in the Report.
The opinions are only as of the date stated in the Report. Changes since that date in external and market
factors or in the Property itself can significantly affect the conclusions.
The Report is to be used in whole and not in part. No part of the Report shall be used in conjunction with any
other analyses. Publication of the Report or any portion thereof without the prior written consent of C&W is
prohibited. Reference to the Appraisal Institute or to the MAI designation is prohibited. Except as may be
otherwise stated in the letter of engagement, the Report may not be used by any person(s) other than the
party(ies) to whom it is addressed or for purposes other than that for which it was prepared. No part of the
Report shall be conveyed to the public through advertising, or used in any sales, promotion, offering or SEC
material without C&W's prior written consent. Any authorized user(s) of this Report who provides a copy to, or
permits reliance thereon by, any person or entity not authorized by C&W in writing to use or rely thereon,
hereby agrees to indemnify and hold C&W, its affiliates and their respective shareholders, directors, officers
and employees, harmless from and against all damages, expenses, claims and costs, including attorneys'
fees, incurred in investigating and defending any claim arising from or in any way connected to the use of, or
reliance upon, the Report by any such unauthorized person(s) or entity(ies).
Except as may be otherwise stated in the letter of engagement, the Appraiser shall not be required to give
testimony in any court or administrative proceeding relating to the Property or the Appraisal.
The Report assumes (a) responsible ownership and competent management of the Property; (b) there are no
hidden or unapparent conditions of the Property, subsoil or structures that render the Property more or less
valuable (no responsibility is assumed for such conditions or for arranging for engineering studies that may be
required to discover them); (c) full compliance with all applicable federal, state and local zoning and
environmental regulations and laws, unless noncompliance is stated, defined and considered in the Report;
and (d) all required licenses, certificates of occupancy and other governmental consents have been or can be
obtained and renewed for any use on which the value opinion contained in the Report is based.
•
•
•
•
•
•
•
•
•
73
The physical condition of the improvements considered by the Report is based on visual inspection by the
Appraiser or other person identified in the Report. C&W assumes no responsibility for the soundness of
structural members or for the condition of mechanical equipment, plumbing or electrical components.
The forecasted potential gross income referred to in the Report may be based on lease summaries provided
by the owner or third parties. The Report assumes no responsibility for the authenticity or completeness of
lease information provided by others. C&W recommends that legal advice be obtained regarding the
interpretation of lease provisions and the contractual rights of parties.
The forecasts of income and expenses are not predictions of the future. Rather, they are the Appraiser's best
opinions of current market thinking on future income and expenses. The Appraiser and C&W make no
warranty or representation that these forecasts will materialize. The real estate market is constantly
fluctuating and changing. It is not the Appraiser's task to predict or in any way warrant the conditions of a
future real estate market; the Appraiser can only reflect what the investment community, as of the date of the
Report, envisages for the future in terms of rental rates, expenses, and supply and demand.
Unless otherwise stated in the Report, the existence of potentially hazardous or toxic materials that may have
been used in the construction or maintenance of the improvements or may be located at or about the
Property was not considered in arriving at the opinion of value. These materials (such as formaldehyde foam
insulation, asbestos insulation and other potentially hazardous materials) may adversely affect the value of
the Property. The Appraisers are not qualified to detect such substances. C&W recommends that an
environmental expert be employed to determine the impact of these matters on the opinion of value.
If the Report is submitted to a lender or investor with the prior approval of C&W, such party should consider
this Report as only one factor together with its independent investment considerations and underwriting
criteria, in its overall investment decision. Such lender or investor is specifically cautioned to understand all
Extraordinary Assumptions and Hypothetical Conditions and the Assumptions and Limiting Conditions
incorporated in this Report.
In the event of a claim against C&W or its affiliates or their respective officers or employees or the Appraisers
in connection with or in any way relating to this Report or this engagement, the maximum damages
recoverable shall be the amount of the monies actually collected by C&W or its affiliates for this Report and
under no circumstances shall any claim for consequential damages be made.
If the Report is referred to or included in any offering material or prospectus, the Report shall be deemed
referred to or included for informational purposes only and C&W, its employees and the Appraiser have no
liability to such recipients. C&W disclaims any and all liability to any party other than the party that retained
C&W to prepare the Report.
Any estimate of insurable value, if included within the agreed upon scope of work and presented within this
report, is based upon figures derived from a national cost estimating service and is developed consistent with
industry practices. However, actual local and regional construction costs may vary significantly from our
estimate and individual insurance policies and underwriters have varied specifications, exclusions, and noninsurable items. As such, we strongly recommend that the Client obtain estimates from professionals
experienced in establishing insurance coverage for replacing any structure. This analysis should not be relied
upon to determine insurance coverage. Furthermore, we make no warranties regarding the accuracy of this
estimate.
By use of this Report each party that uses this Report agrees to be bound by all of the Assumptions and
Limiting Conditions, Hypothetical Conditions and Extraordinary Assumptions stated herein.
•
74
Our financial analyses are based on estimates and assumptions which were developed in connection with
this appraisal engagement. It is, however, inevitable that some assumptions will not materialize and that
unanticipated events may occur which will cause actual achieved operating results to differ from the financial
analyses contained in this report, and these differences may be material. It should be further noted that we
are not responsible for the effectiveness of future management and marketing efforts upon which the
projected results contained in this report may depend.
Certification
n of Appraisal
75
We certify that, to the best of our knowledge and belief:
•
The statements of fact contained in this report are true and correct.
•
The reported analyses, opinions, and conclusions are limited only by the reported assumptions and
limiting conditions, and are our personal, impartial, and unbiased professional analyses, opinions, and
conclusions.
•
We have no present or prospective interest in the property that is the subject of this report, and no
personal interest with respect to the parties involved.
•
We have no bias with respect to the property that is the subject of this report or to the parties involved
with this assignment.
•
Our engagement in this assignment was not contingent upon developing or reporting predetermined
results.
•
Our compensation for completing this assignment is not contingent upon the development or reporting of
a predetermined value or direction in value that favors the cause of the client, the amount of the value
opinion, the attainment of a stipulated result, or the occurrence of a subsequent event directly related to
the intended use of this appraisal.
•
The reported analyses, opinions, and conclusions were developed, and this report has been prepared, in
conformity with the requirements of the Code of Professional Ethics & Standards of Professional
Appraisal Practice of the Appraisal Institute, which include the Uniform Standards of Professional
Appraisal Practice.
•
Michael Kaukonen provided significant professional assistance to the appraiser who authored the
appraisal.
•
The use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly
authorized representatives.
Chris Vardon made a personal inspection of the properties that are the subject of this report on March 29,
2014.
•
As of the date of this report, Chris Vardon, AACI, P.App has completed the continuing education program
of the Appraisal Institute of Canada.
•
The undersigned state certified appraiser has met the requirements of the board that allow this report to
be regarded as a certified appraisal.
76
Based on the analysis contained herein, the total value of the various lands associated with the Deerhurst Resort
as at March 31, 2013 was:
AREA
VALUE PER
(ACRE/LOT/UNIT)
ACRE/LOT/UNIT
Lakeside Golf Course Lands
48.23
$35,000
$1,690,000
Remaining Lands
28.81
$35,000
$1,010,000
LAND PARCEL
TOTAL VALUE
WATERFRONT LANDS
Total ( rounded)
$2,700,000
NON-WATERFRONT LANDS
Excess Lands
339.33
$7,000
$2,380,000
Commercial Component
21.25
$150,000
$3,190,000
Total
$5,570,000
UNSOLD RESIDENTIAL DEVELOPMENT LOTS
Various
71
$158,000
$11,185,000
WATERFRONT LANDS FOR RESIDENTIAL DEVELOPMENT
Various
173
$42,500
$7,350,000
30
$143,000
$4,290,000
DEERHURST SANCTUARY LANDS
Various Lots
RESORT VILLAGE LANDS
Resort Village Total
51.26 acres
$6,950,000
51.3 acres
April 16, 2014
Chris Vardon, AACI
Vice President
chris.vardon@ca.cushwake.com
Phone Office 416.359.2505
Fax 416.359.2602
Date
Glossary of Terms and Definitions
77
The following definitions of pertinent terms are taken from The Dictionary of Real Estate Appraisal, Fourth Edition
(2002), published by the Appraisal Institute, Chicago, IL, as well as other sources.
A CCRUED D EPRECIAT ION
1. In appraisal, a loss in property value from any cause; the difference between the reproduction or replacement
cost of an improvement on the effective date of the appraisal and the market value of the improvement on the
same date.
2. In regard to improvements, depreciation encompasses both deterioration and obsolescence. 3. In accounting,
an allowance made against the loss in value of an asset for a defined purpose and computed using a specific
method.
B AND OF I NVESTMENT A NALYSIS
A technique in which the capitalization rates attributable to components of capital investment are weighted and
computed to derive a weighted average rate attributable to the total investment.
C ASH E QUIVALENCE
A price expressed in terms of cash, as distinguished from a price expressed totally or partly in terms of the face
amounts of notes or other securities that cannot be sold at their face amounts. Calculating the cash-equivalent
price requires an appraiser to compare transactions involving atypical financing to transactions involving
comparable properties financed at typical market terms.
E LLWOOD F ORMULA
Yield capitalization method that provides a formulaic solution for developing a capitalization rate for various
combinations of equity yields and mortgage terms. The formula is applicable only to properties with stable or
stabilized income streams and properties with income streams expected to change according to the J- or K-factor
pattern.
E XPOSURE T IME
The length of time the property being appraised would have been offered on the market prior to the hypothetical
consummation of a sale at the market value on the effective date of the appraisal. Exposure time is presumed to
precede the effective date of the appraisal.
The reasonable exposure period is a function of price, time and use. It is not an isolated opinion of time alone.
Exposure time is different for various types of property and under various market conditions. It is a retrospective
opinion based on an analysis of past events, assuming a competitive and open market. It assumes not only
adequate, sufficient and reasonable time but adequate, sufficient and a reasonable marketing effort. Exposure
time and conclusion of value are therefore interrelated.
E XTRAORDINA RY A SSUMPTIONS
An extraordinary assumption is “an assumption, directly related to a specific assignment, which, if found to be
false, could alter the appraiser’s opinions or conclusions. Extraordinary assumptions presume as fact otherwise
78
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.”
F EE S IMPLE E ST AT E
Absolute ownership unencumbered by any other interest or estate, subject only to the limitations imposed by the
governmental powers of taxation, eminent domain, police power, and escheat.
G OING C ONCERN
An operating business enterprise that is expected to continue.
H YPOTHETICAL C ONDITIONS
A hypothetical condition is “that which is contrary to what exists but is supposed for the purpose of 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 property, such as market conditions or
trends; or about the integrity of data used in an analysis.”
I NSURABLE V ALUE
•
The value of an asset or asset group that is covered by an insurance policy; can be estimated by
deducting costs of noninsurable items (e.g., land value) from market value.
•
Value used by insurance companies as the basis for insurance. Often considered to be replacement or
reproduction cost plus allowances for debris removal or demolition less deterioration and noninsurable
items. Sometimes cash value or market value, but often entirely a cost concept. (Marshall & Swift LP)
L EASED F EE I NTEREST
An ownership interest held by a landlord with the rights of use and occupancy conveyed by lease to others. The
rights of the lessor (the leased fee owner) and the lessee are specified by contract terms contained within the
lease.
L EASEHOLD I NT EREST
The interest held by the lessee (the tenant or renter) through a lease transferring the rights of use and occupancy
for a stated term under certain conditions.
LIQUIDATION VALUE
Liquidation value is the likely price of an asset when it is allowed insufficient time to sell on the open market,
thereby reducing its exposure to potential buyers. Liquidation value is typically lower than fair market value.
Unlike cash or securities, certain illiquid assets, like real estate, often require a period of several months in order
to obtain their fair market value in a sale, and will generally sell for a significantly lower price if a sale is forced to
occur in a shorter time period. Liquidation value may be either the result of a forced liquidation or an orderly
liquidation. Either value assumes that the sale is consummated by a seller who is compelled to sell and assumes
an exposure period which is less than normal for the market.
79
Liquidation value is likely to bring under all of the following conditions:
•
Consummation of a sale will occur within a severely limited future marketing period specified by the client.
•
The actual market conditions currently prevailing are those to which the appraised property interest is
subject.
•
The buyer is acting prudently and knowledgeably.
•
The seller is under extreme compulsion to sell.
•
The buyer is typically motivated.
•
The buyer is acting in what he or she considers his or her best interest.
•
A limited marketing effort and time will be allowed for the completion of a sale.
•
Payment will be made in cash in Canadian dollars or in terms of financial arrangements comparable
thereto.
•
The price represents the normal consideration for the property sold, unaffected by special or creative
financing or sales concessions granted by anyone associated with the sale
M ARKET R ENT
The most probable rent that a property should bring in a competitive and open market reflecting all conditions and
restrictions of the specified lease agreement including term, rental adjustment and revaluation, permitted uses,
use restrictions, and expense obligations; the lessee and lessor each acting prudently and knowledgeably, and
assuming consummation of a lease contract as of a specified date and the passing of the leasehold from lessor to
lessee under conditions whereby:
Lessee and lessor are typically motivated.
Both parties are well informed or well advised, and acting in what they consider their best interests.
A reasonable time is allowed for exposure in the open market.
The rent payment is made in terms of cash in Canadian dollars, and is expressed as an amount per time period
consistent with the payment schedule of the lease contract.
The rental amount represents the normal consideration for the property lease unaffected by special fees or
concessions granted by anyone associated with the transaction.
M ARKET V A LUE
The most probable price which a property should bring in a competitive and open market under all conditions
requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is
not affected by undue stimulus. 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:
Buyer and seller are typically motivated;
Both parties are well informed or well advised, and acting in what they consider their best interests;
80
A reasonable time is allowed for exposure in the open market;
Payment is made in terms of cash in Canadian dollars or in terms of financial arrangements comparable thereto;
and
The price represents the normal consideration for the property sold unaffected by special or creative financing or
sales concessions granted by anyone associated with the sale. (12 C.F.R. Part 34.42(g) Federal Register 34696,
August 24, 1990, as amended at 57 Federal Register 12202, April 9, 1992; 59 Federal Register 29499, June 7,
1994)
M ORTGAGE -E QUITY A NA LYSIS
Capitalization and investment analysis procedures that recognize how mortgage terms and equity requirements
affect the value of income-producing property.
P ROSPECTIVE V A LUE O PINION
A forecast of the value expected at a specified future date. A prospective value opinion is most frequently sought
in connection with real estate projects that are proposed, under construction, or under conversion to a new use,
or that have not achieved sellout or a stabilized level of long-term occupancy at the time the appraisal report is
written.
P ROSPECTIVE V A LUE U PON R EACHING S TABILIZED O CCUPANCY
The value of a property as of a point in time when all improvements have been physically constructed and the
property has been leased to its optimum level of long-term occupancy. At such point, all capital outlays for tenant
improvements, leasing commissions, marketing costs and other carrying charges are assumed to have been
incurred.
V ALUE A S I S
The value of specific ownership rights to an identified parcel of real estate as of the effective date of the appraisal.
It relates to what physically exists and is legally permissible and excludes all assumptions concerning hypothetical
market conditions or possible rezoning.
Subject Property Photographs
SUMMARY OF CHANGES
SUBJECT PROPERTY PHOTOGRAPHS
Deerhurst Golf Course
Waterfront lands and view
Waterfront lands
Peninsula Lake
Lakeside Lodge
Lakeside Lodge Waterfront
81
Summary of
o Changes Compared to
December 31,
3 2013
SUMMARY OF CHANGES
82
SUMMARY OF CHANGES IN APPRAISAL FROM
DECEMBER 2013 TO MARCH 2014
On January 30, 2014, Skyline representatives met with staff at the Town of Huntsville and the District of Muskoka
to review the “incomplete planning application”. Based on that feedback a number of subsequent reports were
submitted on March 6, 2014 and including a functional servicing and storm water management report, a
geotechnical investigation, Stage 1-2 Archeological assessment, preliminary traffic impact study, a water quality
study and environmental impact assessment. In addition, a public open house was held at Deerhurst on January
30, 2014.
On March 5, 2014, Skyline submitted a revised Official Plan Amendment. In addition, Skyline responded to
questions from the Peninsula Lakes Association. One week later, the Town of Huntsville’s planning committee
approved the Road allowance closing near Canal Road.
On March 20, 2014, The Town’s Director of Planning and Sustainability declared the Skyline submission a
“Complete Application” subject to some minor issues. In addition, the Town and Region have reacted favorably to
the submission. While, the application has not granted final approval and not yet considered a legal and permitted
use, such approval is expected to be less than six months away.
Any investor or purchaser would recognize that final approval is forth coming and as a result has resulted in
significant increase in land values.

APPRAISAL OF REAL PROPERTY

Transcription

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