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BUSINESS VALUATION • PROFESSIONAL SERVICES VALUATIONS • ASSET APPRAISALS • REAL ESTATE • TRANSACTION ADVISORY • CONSULTING 

DALLAS • NASHVILLE

Fair Market Value and Fair Market Rent


of the Fee Simple Estate

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Real Estate Identified as
Real Estate Parcels Owned by Citrus County Hospital Board
Citrus County, Florida

RESTRICTED USE APPRAISAL REPORT

Appraisal Date: February 6, 2013


Distribution Date: March 19, 2013

Prepared for
Mr. Robert Priselac
Citrus County Hospital Board of Trustees
Citrus County Hospital Board
123 South Pine Avenue
Inverness, Florida 34452

2515 McKinney Avenue, Suite 1500 • Dallas, Texas 75201 • Telephone:  214.369.4888 • Fax: 214.369.0541
3100 West End Avenue, Suite 940 • Nashville, Tennessee 37203 • Telephone: 615.777.7300 • Fax: 615.777.7301
March 19, 2013

Mr. Robert Priselac


Citrus County Hospital Board of Trustees
Citrus County Hospital Board
123 South Pine Avenue
Inverness, Florida 34452

Re: Fair Market Value and Fair Market Rent of Various Parcels

Dear Mr. Priselac,

At your request, we have estimated the Fair Market Value and the Fair Market Rent of the Fee Simple Estate in the real
estate identified in the table located on the following page. Each of the properties is located in Citrus County, Florida.

The subject properties consist of approximately 108,531 square feet of gross building area in several buildings
(combined) which are identified in the chart located on the following page. The effective date of the valuation is
February 6, 2013. The following analysis is not to be used for any other purpose or distributed, in whole or in part, to
third parties, other than Citrus County Hospital Board and their duly authorized representatives, the Internal Revenue
Service, Office of Inspector General and other regulatory authorities without the express written consent of VMG
Health.

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The opinions presented are subject to the following extraordinary assumption. An extraordinary assumption is directly
related to a specific assignment, as of the effective date of the assignment results, which, if found to be false, could
alter the appraiser’s opinions or conclusion. Within this specific assignment, according to the Citrus County Property
Appraiser, the combined gross building area of the subject properties is 108,531 square feet. Should the actual
combined or individual gross building areas differ from the assumed areas, the appraiser reserves the right to amend
the contents of this Restricted Use Appraisal Report, including the conclusions. In addition, the opinions presented are
subject to the following hypothetical condition. A hypothetical condition is a condition, directly related to a specific
assignment, which is contrary to what is known by the appraiser to exist on the effective date of the assignment results,
but is used for the purpose of analysis. The property is subject to the Lease Agreement between Citrus County
Hospital Board and Citrus Memorial Health Foundation, Inc. For purpose of this analysis, the lease is not considered;
the property rights appraised are those of the Fee Simple Estate.

Chateau Plaza 3100 West End Avenue


2515 McKinney Avenue Suite 940
Suite 1500 Nashville, Tennessee 37203
Dallas, Texas 75201 P 615.777.7300
P 214.369.4888 F 615.777.7301
F 214.369.0541 www.vmghealth.com
Based on this analysis, the Fair Market Value and the estimated range of Fair Market Rent of the Fee Simple Estate as
of February 6, 2013 for the subject real estate are reasonably estimated to be:

Citrus County Hospital Board


Parcel No. Location City Land Area Building Area FMV FMR Low* FMR High*

2 10332 North Citrus Springs Boulevard Citrus Springs 276,976 3,200 $ 540,000 $ 8.00 $ 10.00
4 7646 South Florida Avenue Floral City 98,543 3,280 $ 350,000 $ 9.00 $ 11.00
6 204 and 206 South Pine Avenue Inverness 16,250 - $ 80,000
24 201 South Seminole Inverness 36,563 - 180,000
9 200 West Grace Street Inverness 14,950 - $ 70,000
10 208 West Grace Street Inverness 5,420 - $ 30,000
23 123 South Seminole Inverness 119,758 12,701 $ 1,300,000 $ 7.00 $ 9.00
11 112 South Seminole Avenue Inverness 5,541 - $ 25,000
17 111 South Osceola Avenue Inverness 52,623 - 305,000
19 302 West Grace Street Inverness 31,241 - 180,000
20 108 South Seminole Avenue Inverness 2,130 - 10,000
12 6254 West Corporate Oaks Drive Citrus County 39,578 2,874 $ 290,000 $ 10.00 $ 12.00
13 700 Southeast 5th Terrace, Units 7 and 8 Crystal River 2,784 2,784 $ 200,000 $ 8.00 $ 10.00
14 450 West Roosevelt Boulevard Beverly Hills 82,960 3,493 $ 450,000 $ 10.00 $ 12.00
15 810 Medical Court East Inverness 38,392 7,066 $ 880,000 $ 13.00 $ 15.00

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16 6043 West Nordling Loop Citrus County 40,628 6,690 $ 850,000 $ 13.00 $ 15.00
21 131 South Citrus Avenue Inverness 170,077 66,443 $ 9,000,000 $ 13.00 ** $ 15.00 **
22 108 South Seminole Avenue Inverness 20,692 - $ 100,000
25 206 South Seminole Avenue Inverness 81,250 - $ 420,000

Total 1,136,356 108,531 $ 15,260,000

* Per square foot of gross building area. Implicit in this rental rate estimate is a NNN basis, with the tenant being responsible for
all operating costs. The lease term would be three to five years, without concessions, on an “as is” basis. The rate does not include
an annual CPI increase in the base rate.
** Per square foot of gross building area. Implicit in this rental rate estimate is a NNN basis, with the tenant being responsible
for all operating costs. The lease term would be a minimum of five years, without concessions, on an “as is” basis. The rate also
includes an annual CPI increase in the base rate.

Respectfully submitted,

Charles B. Nolen, MAI


Manager
Florida Certified General Real Estate Appraiser RZ3509

Chateau Plaza 3100 West End Avenue


2515 McKinney Avenue Suite 940
Suite 1500 Nashville, Tennessee 37203
Dallas, Texas 75201 P 615.777.7300
P 214.369.4888 F 615.777.7301
F 214.369.0541 www.vmghealth.com
RESTRICTED USE APPRAISAL REPORT Page 3

TABLE OF CONTENTS
REPORT FORMAT 5
IDENTIFICATION OF PROPERTIES 5
PURPOSE OF THE APPRAISAL 9
PROPERTY RIGHTS 9
CLIENT AND INTENDED USE OF THE APPRAISAL 9
EFFECTIVE DATE OF VALUATION 9
DEFINITIONS 9
SCOPE OF ENGAGEMENT 11
COMPETENCY STATEMENT 14
PROPERTIES HISTORIES 14
SUMMARY OF SALIENT FACTS – PARCEL NO. 2 15
SUMMARY OF SALIENT FACTS – PARCEL NO. 4 26
SUMMARY OF SALIENT FACTS – PARCEL NOS. 6 AND 24 35

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SUMMARY OF SALIENT FACTS – PARCEL NOS. 9, 10 AND 23
SUMMARY OF SALIENT FACTS – PARCEL NOS. 11, 17, 19 AND 20
38
49
SUMMARY OF SALIENT FACTS – PARCEL NO. 12 52
SUMMARY OF SALIENT FACTS – PARCEL NO. 13 60
SUMMARY OF SALIENT FACTS – PARCEL NO. 14 64
SUMMARY OF SALIENT FACTS – PARCEL NO. 15 73
SUMMARY OF SALIENT FACTS – PARCEL NO. 16 82
SUMMARY OF SALIENT FACTS – PARCEL NO. 21 91
SUMMARY OF SALIENT FACTS – PARCEL NO. 22 103
SUMMARY OF SALIENT FACTS – PARCEL NO. 25 106
ASSUMPTIONS & LIMITING CONDITIONS 109

CITRUS COUNTY HOSPITAL BOARD


RESTRICTED USE APPRAISAL REPORT Page 4

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CITRUS COUNTY HOSPITAL BOARD


RESTRICTED USE APPRAISAL REPORT Page 5

OVERVIEW
REPORT FORMAT
This is a Restricted Use Appraisal Report which is intended to comply with the reporting
requirements set forth under Standard Rule 2-2 (c) of the Uniform Standards of
Professional Appraisal Practice for a Restricted Use Appraisal Report. As such, it does
not include discussions of the data, reasoning and analyses that were used in the
appraisal process to develop the appraiser’s opinion of the Fair Market Value and the
Fair Market Rent of the real estate identified in this report.

Supporting documentation concerning the data, reasoning and analyses is retained in


the appraiser’s file. The information contained in this report is specific to the needs of
the client and for the intended use stated in this report.

Please note that this Restricted Use Appraisal Report cannot be fully understood
without the additional information maintained in our work file. The appraiser is not
responsible for unauthorized use of this report.

Please note that the obligation of VMG is solely a corporate obligation, and no officer,
principal, director, employee, agent, shareholder, or controlling person shall be

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subjected to any personal liability whatsoever to any person or entity, nor will any such
claim be asserted by or on behalf of any other party to this agreement or any person
relying on the opinion.

IDENTIFICATION OF PROPERTIES
Parcel No. 2 – Professional Services Building – Citrus Springs Boulevard

The subject property consists of approximately 3,200 square feet of gross building area
located on a single land parcel totaling 276,976 square feet, or 6.358 acres. The real
estate is located at 10332 North Citrus Springs Boulevard, Citrus Springs, Citrus
County, Florida.

The effective date of the valuation is February 6, 2013, the date of inspection.

The property is legally defined in one tax account, ALT KEY 2093544, according to the
Citrus County Property Appraiser.

Parcel No. 4 – Professional Medical Building – S. Florida Avenue

The subject property consists of approximately 3,280 square feet of gross building area
located on a single land parcel totaling 98,543 square feet, or 2.262 acres. The real
estate is located at 7646 South Florida Avenue, Floral City, Citrus County, Florida.

The effective date of the valuation is February 6, 2013, the date of inspection.

CITRUS COUNTY HOSPITAL BOARD


RESTRICTED USE APPRAISAL REPORT Page 6

The property is legally defined in one tax account, ALT KEY 1856388, according to the
Citrus County Property Appraiser.

Parcel Nos. 6 and 24 – Vacant Governmental – Pine Avenue and CMHF (Parking /
Other Building)

The subject property is a single land parcel totaling 52,813 square feet, or 1.212 acres.
The real estate is located at 201 South Seminole Avenue, 204 South Pine Avenue and
206 South Pine Avenue, Inverness, Citrus County, Florida.

The effective date of the valuation is February 6, 2013, the date of inspection.

The property is legally defined in three tax accounts, ALT KEYs 2910551, 1758963 and
1758955, according to the Citrus County Property Appraiser.

Parcel Nos. – 9, 10 and 23– CMHF Grace Street and CMHF Public Assistance Center
and CMHF Offices

The subject property consists of four buildings containing approximately 33,818 square
feet of combined gross building area (2,040 square feet on Parcel No. 9, 1,002 square
feet on Parcel No. 10 and 30,776 square feet on Parcel No. 23) located on three

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adjacent land parcels totaling 140,128 square feet, or 3.217 acres. Only one structure
(12,701 square foot) provides contributory value to the property as a whole. The three
parcels are combined as the tracts are contiguous. The real estate is located at 200
West Grace Street (Parcel No. 9), 208 West Grace Street (Parcel No. 10) and 123
South Seminole (Parcel No. 23) in Inverness, Citrus County, Florida.

The effective date of the valuation is February 6, 2013, the date of inspection.

The property is legally defined in three tax accounts, ALT KEYs 1755921, 1755913 and
1755913, for Parcel Nos. 9, 10 and 23, respectively, according to the Citrus County
Property Appraiser.

Parcel Nos. 11, 17, 19 and 20 – CMHF Vacant Governmental

The subject property consists of four contiguous land parcels containing approximately
91,535 square feet, or 2.101 acres. The real estate is located at the following
addresses: Parcel No. 11 is at 112 South Seminole Avenue (ALT KEY 1755808); Parcel
No. 17, 111 South Osceola Avenue (ALT KEY 2906863); Parcel No. 19, 302 West
Grace Street (ALT KEY 2910542); and Parcel No. 20, 108 South Seminole Avenue
(ALT KEY 2911484). The tracts are located in Inverness, Citrus County, Florida.

The effective date of the valuation is February 6, 2013, the date of inspection.

CITRUS COUNTY HOSPITAL BOARD


RESTRICTED USE APPRAISAL REPORT Page 7

Parcel No. 12 – CMHF/RRA, LLC

The subject property consists of approximately 2,874 square feet of gross building area
located on a single land parcel totaling 39,578 square feet, or 0.909 acre. The real
estate is located at 6254 West Corporate Oaks Drive, Citrus County, Florida.

The effective date of the valuation is February 6, 2013, the date of inspection.

The property is legally defined in one tax account, ALT KEY 2425407, according to the
Citrus County Property Appraiser.

Parcel No. 13 – CMHF – Citrus Primary Crystal River / Dr. Irvine

The subject property consists of approximately 2,784 square feet of gross building area
in two condominium units located on two land parcels totaling 2,784 square feet, or
0.064 acre, according to the Citrus County Property
th
Appraiser. The real estate is located at 700 Southeast 5 Terrace, Units 7 and 8,
Crystal River, Citrus County, Florida.

The effective date of the valuation is February 6, 2013, the date of inspection.

The property is legally defined in two tax accounts, ALT KEYs 2619970 and 2619988,

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according to the Citrus County Property Appraiser.

Parcel No. 14 – CMHF – Citrus Primary Beverly Hills

The subject property consists of approximately 3,493 square feet of gross building area
located on a single land parcel totaling 82,960 square feet, or 1.904 acres. The real
estate is located at 450 West Roosevelt Boulevard, Beverly Hills, Citrus County, Florida.

The effective date of the valuation is February 6, 2013, the date of inspection.

The property is legally defined in one tax account, ALT KEY 2959312, according to the
Citrus County Property Appraiser.

Parcel No. 15 – CMHF Rehabilitation Center

The subject property consists of approximately 7,066 square feet of gross building area
located on a single land parcel totaling 38,392 square feet, or 0.881 acre. The real
estate is located at 810 Medical Court East, Inverness, Citrus County, Florida.

The effective date of the valuation is February 6, 2013, the date of inspection.

The property is legally defined in one tax account, ALT KEY 2640251, according to the
Citrus County Property Appraiser.

CITRUS COUNTY HOSPITAL BOARD


RESTRICTED USE APPRAISAL REPORT Page 8

Parcel No. 16 – CMHF Gulf Coast Aquatic and Rehabilitation Center

The subject property consists of approximately 6,690 square feet of gross building area
located on a single land parcel totaling 40,628 square feet, or 0.933 acre. The real
estate is located at 6043 West Nordling Loop, Citrus County, Florida.

The effective date of the valuation is February 6, 2013, the date of inspection.

The property is legally defined in one tax account, ALT KEY 34500353, according to the
Citrus County Property Appraiser.

Parcel No. 21 – CMHF – Annex / Wound Care & Hyperbaric Center

The subject property consists of approximately 77,654 square feet of gross building
area located on a single land parcel totaling 170,077 square feet, or 3.904 acres. The
real estate is located at 131 South Citrus Avenue, Inverness, Citrus County, Florida.

The effective date of the valuation is February 6, 2013.

The property is legally defined in one tax account, ALT KEY 2907908, according to the
Citrus County Property Appraiser.

DRAFT
Parcel No. 22 – CMHF – (Parking / Other Building)

The subject property consists of approximately 1,584 square feet of gross building area
located on a single land parcel totaling 20,692 square feet, or 0.475 acre. The small
commercial building provides no contributory value to the land as a whole. The real
estate is located at 108 South Seminole Avenue, Inverness, Citrus County, Florida.

The effective date of the valuation is February 6, 2013.

The property is legally defined in one tax account, ALT KEY 2910607, according to the
Citrus County Property Appraiser.

Parcel No. 25 – CMHF (Parking / Other Building)

The subject property consists of approximately 933 square feet of gross building area
located on a single land parcel totaling 81,250 square feet, or 1.865 acres. The
structure provides no contributory value to the land as a whole. The real estate is
located at 206 South Seminole Avenue, Inverness, Citrus County, Florida.

The effective date of the valuation is February 6, 2013, the date of inspection.

The property is legally defined in one tax account, ALT KEY 2907916, according to the
Citrus County Property Appraiser.

CITRUS COUNTY HOSPITAL BOARD


RESTRICTED USE APPRAISAL REPORT Page 9

PURPOSE OF THE APPRAISAL


The purpose of the appraisal is to provide our opinion of the Fair Market Value and a
reasonable range of the Fair Market Rent of the Fee Simple Estate for the properties
fully identified in this Restricted Use Appraisal Report.

PROPERTY RIGHTS
The Fair Market Value and Fair Market Rent are predicated on Fee Simple Estate,
which is defined in The Dictionary of Real Estate Appraisal, Fifth Edition, Page 78:

“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.”

CLIENT AND INTENDED USE OF THE APPRAISAL


The intended user (client) of this Restricted Use Appraisal Report is Citrus County
Hospital Board and their duly authorized third-party representatives. VMG Health is not
responsible for the unauthorized use of this Restricted Use Appraisal Report. The
intended use of this analysis is to assist Citrus County Hospital Board with an evaluation

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of the possible benefits to persons residing in Citrus County from the sale or lease of
the Hospital Facilities to a not-for-profit or for-profit entity.

EFFECTIVE DATE OF VALUATION


This report was prepared in February and March 2013. We conducted an on-site
inspection of the subject properties on February 5, 2013 and February 6, 2013. The
effective appraisal date of this assignment is February 6, 2013.

DEFINITIONS
The following is a list of definitions applicable to this assignment.

Fair Market Value – Fair Market Value is defined by the Internal Revenue Service as
"the price that property would sell for on the open market. It is the price that would be
agreed on between a willing buyer and a willing seller, with neither being required to act,
and both having reasonable knowledge of the relevant facts." The term herein, is also
used interchangeably in this analysis with the term Market Value. Market Value means
“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:

CITRUS COUNTY HOSPITAL BOARD


RESTRICTED USE APPRAISAL REPORT Page 10

1. Buyer and seller are typically motivated;

2. Both parties are well informed or well advised, and acting in what they consider
their own best interests;

3. A reasonable time is allowed for exposure in the open market;

4. Payment is made in terms of cash in U.S. dollars or in terms of financial


arrangements comparable thereto; and

5. The price represents the normal consideration for the property sold unaffected by
special or creative financing or sales concessions granted by anyone associated
with the sale.

Additionally, in accord with THE LAWS OF FLORIDA Ch. 2012-66, “Fair market value”
means the price that a seller or lessor is willing to accept and a buyer or lessee is willing
to pay on the open market and in an arms-length transaction, or what an independent
expert in hospital valuation determines the fair market value to be.

Furthermore, The Stark Law defines “fair market value” as “the value in arm’s length
transactions, consistent with the general market value.” “General market value” means

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“the compensation that would be included in a service agreement as the result of bona
fide bargaining between well-informed parties to an agreement who are not otherwise in
a position to generate business for the other party at the time of the agreement.”

Fair Market Rent is synonymous with Market Rent. The definition of Market Rent is
shown below.

Fair Market Rent – The most probable rent that a property should bring in a competitive
and open market reflecting all conditions and restrictions of the lease agreement
including permitted uses, use restrictions, expense obligations, term, concessions,
renewal and purchase options, and tenant improvements (TIs). 1 Implicit in this
definition are the following conditions:

 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 United States dollars, and is
expressed as an amount per time period consistent with the payment
schedule of the lease contract.

1
The Dictionary of Real Estate Appraisal, 5th Edition (Chicago: Appraisal Institute, 2010).

CITRUS COUNTY HOSPITAL BOARD


RESTRICTED USE APPRAISAL REPORT Page 11

 The rental amount represents the normal consideration for the property
leased unaffected by special fees or concessions granted by anyone
associated with the transaction.

This assignment includes the following identified property.

Real Property – The interests, benefits, and rights inherent in the ownership of real
estate.2
Improvements – Buildings or other relatively permanent structures or developments
located on, or attached to, land.3

Extraordinary Assumption – An assumption, directly related to a specific assignment,


which, if found to be false, could alter the appraiser’s opinions or conclusion.4

Within this specific assignment, according to the Citrus County Property Appraiser, the
building improvements contain a gross building area of 108,531 square feet. Should
the actual combined or individual gross building areas differ from the assumed areas,
the appraisers reserve the right to amend the contents of this Restricted Use Appraisal
Report, including the conclusions.

Hypothetical Condition – A condition, directly related to a specific assignment, which

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is contrary to what is known by the appraiser to exist on the effective date of the
assignment results, but is used for the purpose of analysis. 5

The subject property is subject to the Lease Agreement between Citrus County Hospital
Board and Citrus Memorial Health Foundation, Inc. According to the Fourth
Amendment to Lease Agreement, the commencement date is March 1, 1990 and the
expiration date is June 15, 2033, with an option to renew for an additional forty-five (45)
year term. For purpose of this analysis, the lease is not regarded; the property rights
appraised are those of the Fee Simple Estate.

SCOPE OF ENGAGEMENT
The results of this investigation are presented in a Restricted Use Appraisal Report.
The following scope was completed by Value Management Group, LLC d/b/a VMG
Health (“VMG”) for this assignment:

1. Analyzed regional, city, neighborhood and market area.

2
The Dictionary of Real Estate Appraisal, Page 161, 5th Edition (Chicago: Appraisal Institute, 2010).
3
The Dictionary of Real Estate Appraisal, Page 98,5th Edition (Chicago: Appraisal Institute, 2010).
4
“Uniform Standards of Professional Practice” (The Appraisal Foundation, 2010-2011 Edition).
5
“Uniform Standards of Professional Practice” (The Appraisal Foundation, 2012-2013 Edition).

CITRUS COUNTY HOSPITAL BOARD


RESTRICTED USE APPRAISAL REPORT Page 12

 Gather current and relevant data related to demographic,


economic, governmental and environmental forces that have a
direct or indirect influence on the subject properties.
 Provide supporting comments and appropriate conclusions to
describe the influence of these factors on the subject properties.
 Market data was gathered from a variety of sources including local
and regional realtors, brokers and online sources.

2. Completed a visual on-site observation of the subject properties and the


market areas or neighborhoods relevant to the subject properties.
 The visual on-site observation of the subject properties involved
observing the exterior walls and fenestration, noting the quality and
condition. Photographs were taken of the interior and exterior of
the improvements.
 The visual on-site observation of the properties included the type
and condition of walkways, curbs, sidewalks, parking surfaces,
security lighting and fencing, the quality and abundance of
landscaping and the observed adequacy of water drainage and
runoff, as pertinent. Photographs were taken of notable site

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improvements and street views of all adjacent roadways.
 The visual on-site observation involved an inspection of each
property.
 The visual observation of the market areas or neighborhoods
included driving the adjacent roadways and the major
thoroughfares in the area, noting convenience to area shopping,
retail, entertainment, employment and major arterial roadways.
The adequacy and condition of area improvements (including
condition and appeal, occupancy and competitive properties, and
any adverse influences) was also observed. Observations were
also made regarding the approximate mix of residential, multi-
family, commercial and industrial property types within the subject
neighborhoods and market areas.
 Reviewed relevant supporting data. The inspecting appraiser’s
visual on-site observations were supported by the review of the
available building plans.
 Reviewed data regarding taxes, utilities, easements and city
services.
 The availability or existence of all utilities, easements and city
services was determined by on-site observation and data available

CITRUS COUNTY HOSPITAL BOARD


RESTRICTED USE APPRAISAL REPORT Page 13

from Citrus County Hospital Board and its representatives as well


as the City of Inverness, Florida.
3. Considered comparable improved building sales and rental information.
 Comparable rents, sales and listings were analyzed by date of
leases/sales, lease structure, similarity of space use/size, direct or
indirect competition and proximity to the subject properties.
Information was gleaned from appraiser’s internal proprietary files
as well as available market information.
 Photographs, as available, and write-ups are provided as
applicable to the assignment for the comparable sales and leases.
4. Analyzed the data and applied the applicable approaches to value.
 The value opinions presented in this Restricted Use Appraisal
Report are based on review and analysis of the market conditions
affecting real property value, including the attributes of competitive
properties and rental data for similar properties.
 The appraisal problem did not warrant an intensive Highest and
Best Use analysis. Given the nature of the subject real property,
VMG Health’s conclusions of Highest and Best Use are based on
logic and observed evidence.

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 Three traditional approaches are typically used to arrive at an
opinion of value of real property: the Sales Comparison Approach;
the Cost Approach; and the Income Capitalization Approach. All
three approaches to value were considered and those most
appropriate are relied on to address the appraisal problem and to
arrive at an opinion of the Fair Market Value and Fair Market Rent
of the Fee Simple Estate in the subject properties as of the date of
this appraisal.
 The subject site and improvement descriptions are based on a
personal inspection of the properties and a review of provided data.
 The inspection is not a substitute for thorough engineering studies.

Specific attention is drawn to the Proposal, Definitions, General Assumptions and


Limiting Conditions, and Significant Issues for further understanding of the scope of the
appraisal.

CITRUS COUNTY HOSPITAL BOARD


RESTRICTED USE APPRAISAL REPORT Page 14

COMPETENCY STATEMENT
Charles B. Nolen, MAI has valued numerous real estate projects throughout the United
States over the past 25 years. In addition, the appraiser has analyzed and appraised
numerous medical projects throughout the United States, including hospitals, surgery
centers and medical office buildings. The appraiser holds the MAI designation with the
Appraisal Institute. Mr. Nolen, MAI is a Certified General Real Estate Appraiser from
the State of Florida (State License Number RZ3509). Accordingly, the appraiser has
the professional competency required to appraise the subject property.

PROPERTIES HISTORIES
The Appraisal Foundation's Uniform Standards of Professional Appraisal Practice
Standard Rule 1-5 states:

In developing a real property appraisal, when the value opinion to be


developed is market value, an appraiser must, if such information is
available to the appraiser in the normal course of business:

(a) analyze all agreements of sale, options, or listings of the subject


property current as of the effective date of the appraisal; and

(b)
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analyze all sales of the subject property that occurred within the
three (3) years prior to the effective date of the appraisal.

According to public records, no transactions involving the subject properties have taken
place in the past three years, with exception of the properties described as Parcel Nos.
15 (CMHF Rehabilitation Center located at 810 Medical Court East in Inverness) and 16
(DMHF- Gulf Coast Aquatic and Rehabilitation Center located at 6043 West Nordling
Loop in Crystal River). These properties were purchased on May 15, 2012 together for
a reported price of $1,800,000, or $130.85 per square foot of gross building area.

CITRUS COUNTY HOSPITAL BOARD


RESTRICTED USE APPRAISAL REPORT Page 15

SUMMARY OF SALIENT FACTS – PARCEL NO. 2

Date of Appraisal: February 6, 2013

Property Name/Location: Professional Services Building – Citrus

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Springs Boulevard
10332 North Citrus Springs Boulevard
Citrus Springs, Citrus County, Florida

Client: Citrus County Hospital Board

Land Size: 276,976 square feet or 6.358 acres

Improvement Size: 3,200 gross square feet

Owner of Record: Citrus County Hospital Board

Subject Property Description:


Use: Medical Office Building

Fair Market Value: $540,000 (Includes Excess Land)

Range of Fair Market Rent: $8.00 to $10.00 per square foot of gross
building area.

Implicit in this rental rate estimate is a NNN basis, with the tenant being responsible for
all operating costs. The lease term would be three to five years, without concessions,
on an “as is” basis. The rate also does not include annual CPI increase in the base
rate.

CITRUS COUNTY HOSPITAL BOARD


RESTRICTED USE APPRAISAL REPORT Page 16

PROPERTY DESCRIPTION – PARCEL NO. 2


The subject property consists of an improved 6.358-acre (gross) land parcel that is
located at 10332 North Citrus Springs Boulevard, Citrus Springs, Citrus County, Florida.

Specifically, the subject site is located at the north corner of North Citrus Springs
Boulevard and North Florida Avenue. There is an estimated approximately 377 feet of
frontage along the northwest side of North Citrus Springs Boulevard and approximately
700 feet along the northeast side of North Florida Avenue. The site contains
approximately 276,976 square feet, or 6.358 acres, according to the Citrus County
Property Appraiser and is irregular in shape. There is a single curb cut into the tract
along the northwest side of North Citrus Springs Boulevard. The site is generally level
and at street grade. According to Flood Insurance Rate Map number 1200630065B,
dated August 15, 1984, the subject property is not within a designated flood zone. The
subject site is zoned PDR (Planned Residential Development District).

According to a representative of Citrus County, a development plan was submitted for


the site that included the five buildings (with a total of 16 spaces for lease), with parking,
drainage and an outparcel.

DRAFT
According to the Citrus County Property Appraiser, the assessment for 2012 is as
follows. The property is tax exempt.

Market/Just Assessed Taxable


Alt Key 2093544 $673,477 $673,477 $0

The subject property is improved with a one-story medical office building, associated
site improvements and surface parking. The improvements are equally divided as a
two-tenant medical office building. Half of the building is occupied by Citrus Primary
Care; the other space is not occupied. According to the Citrus County Property
Appraiser, the improvements comprise a gross building area of 3,200 square feet. In
addition, there is approximately 576 square feet of roof-covered porch area at the
primary entrance. The building is constructed with concrete block and stucco veneer
with glass windows along the exterior. The roof is pitched with composite shingles. The
interior finish-out includes: commercial-grade carpeting or 1’ by 1’ floor tiles; painted
drywall partitioning; 2’ by 4’ ceiling tiles; and recessed fluorescent lighting. Exam rooms
include sinks. The improvements are not sprinklered. In the occupied area, there are
exam rooms, a receptionist area, a filing area, a waiting room and storage. Land
improvements consist of landscaping and asphalt surface parking. The improvements
were built in 1991 and have a chronological age of 22 years. Given the maintenance of
the property, the effective age is estimated to be 22 years.

CITRUS COUNTY HOSPITAL BOARD


RESTRICTED USE APPRAISAL REPORT Page 17

The subject’s physical adaptability conforms to that of its competitors. Overall, the
subject premises are considered to be of average quality construction.

The subject improvements are in average condition, which is consistent with the
chronological age of the structure and the level of maintenance. The project amenities
are consistent with medical office uses in the local market. The design and layout
appear to be conducive to current operations.

Given the size and configuration of the subject land area, the property has excess land.
Using a land to building ratio of 8 to 1, the estimated site for the subject building is
25,600 square feet. The remaining excess land is 251,376 square feet.

HIGHEST AND BEST USE ANALYSIS


DEFINITION
Highest and Best Use may be defined as, “the reasonably probable and legal use of
vacant land or an improved property that is physically possible, appropriately supported,
and financially feasible, and that results in the highest value.”6

Because the use of land can be limited by the presence of improvements, Highest and
Best Use is determined separately for the site as though vacant and available to be put

DRAFT
to its Highest and Best Use, and for the property as improved.

Highest and Best Use must meet four criteria. It must be:

 Physically possible;
 Legally permissible;
 Financially feasible; and
 Maximally productive.

PROCEDURE
The Highest and Best Use analysis is performed in two parts:

 The Highest and Best Use of the land as though vacant; and
 The Highest and Best Use of the land as though improved

In the analysis of Highest and Best Use of the land as though vacant, it is assumed that
the land is vacant or can be made vacant by removal of existing improvements. The
Highest and Best Use of the land as though vacant addresses the questions of what
uses should be made of the land; and when and what type of improvement, if any,
should be built on the site. The analysis of Highest and Best Use of the land as
improved considers the alternative uses of an improved property.
6
The Dictionary of Real Estate Appraisal, Page 93, 5th Edition (Chicago; Appraisal Institute, 2010)

CITRUS COUNTY HOSPITAL BOARD


RESTRICTED USE APPRAISAL REPORT Page 18

Both parts of the Highest and Best Use are important to the appraisal process in several
ways. For instance, the Highest and Best Use analysis helps to establish what types of
properties are considered comparable, and often, the Highest and Best Use can reveal
problems of functional or external obsolescence.

It is VMG Health’s opinion that the Highest and Best Use of the subject site, as if
vacant, would be for future commercial development as permitted by zoning as demand
warrants.

In the case of the subject property, the existing improvements are functional and
constitute a substantial improvement to the subject site. The cost of demolishing the
existing improvements would far exceed any increase in revenue that could be
generated from an alternative use at this time.

The existing improvements suffer from no apparent form or physical, functional or


external obsolescence. In all respects, the improvements are assumed functional and
conform well to the neighborhood.

CONCLUSION
The subject site is improved with a structure that comprises a gross building area of
3,200 square feet. The building is used as a medical office building.

DRAFT
The improvements contribute significantly to the value of the subject site and provide for
both a return to the land and improvements. Therefore, it is our opinion that the Highest
and Best Use as Improved of the subject property is for the continued use as a medical
office building and ultimate disposal of the excess land.

VALUATION
In earlier sections of this Restricted Use Appraisal Report, the valuation problem and
property characteristics were defined. Information regarding the interaction of four basic
forces that motivate human activity (environmental conditions, governmental controls
and regulations, social forces and economic conditions) and how they affect the overall
commercial market as well as the subject property were analyzed. Additionally, the
Highest and Best Use of the subject property was established. In the following section
of this Restricted Use Appraisal Report, general and specific data gathered will be
analyzed to determine the Fair Market Value of the Fee Simple Estate by the
appropriate appraisal premises.

CITRUS COUNTY HOSPITAL BOARD


RESTRICTED USE APPRAISAL REPORT Page 19

The estimate of Fair Market Value of a property usually calls for employment of the
three basic approaches to value. These approaches to value are identified as follows:

THE COST APPROACH

THE SALES COMPARISON APPROACH

THE INCOME APPROACH

The Cost Approach is based upon the proposition that the informed purchaser would
pay no more than the cost of producing a substitute property with the same utility as the
subject property. The Cost Approach is particularly applicable when the property being
appraised involves relatively new improvements which represent the Highest and Best
Use of the land or when relatively unique or specialized improvements are located on
the site and for which there exists no comparable properties in the marketplace.

The Sales Comparison Approach is based upon the proposition that an informed
purchaser would pay no more for a property than the cost of acquiring an existing
property with the same utility. This approach is applicable when an active market
provides sufficient quantities of reliable data which can be verified from authoritative
sources. The Sales Comparison Approach is relatively unreliable in an inactive market

DRAFT
or in estimating the value of properties for which no real comparable sales data is
available.

The Income Approach is a procedure in appraisal analysis which converts the


anticipated benefits (dollar income or amenities) to be derived from the ownership of
property into a value estimate. The Income Approach is widely applied in appraising
income producing properties. In this approach, an estimate of potential income for the
subject property is first projected. From this amount, deductions are made for typically-
incurred costs involved with ownership of the property, resulting in a net operating
income estimate. An appropriate capitalization rate is then applied to the net operating
income to derive at an indication of value.

Income producing real estate is a capital good which is typically bought and sold
primarily on the basis of the net income produced from the property. In all economic
and investment analyses, of which real estate appraisal is an integral part, the value of
a capital good is established and measured by calculating, as of a particular date, the
present value of the anticipated future benefits (all sources of net revenue) to the owner
over a specified period.

The appraiser analyzed all market data and considered all three traditional approaches
to value.

CITRUS COUNTY HOSPITAL BOARD


RESTRICTED USE APPRAISAL REPORT Page 20

VALUE RECONCILIATION – Parcel No. 2

VMG Health reconciled the indicators analyzed to determine an estimate of the Fair
Market Value for the subject property. Based upon the analysis of data obtained, we
have formed the opinion that the Fair Market Value of the Fee Simple Estate in the
subject property, i.e, the 3,200 square foot building on an estimated site of 25,600
square feet, subject to the definitions, certifications, and limiting conditions set forth in
the attached Restricted Use Appraisal Report, as of February 6, 2013, is:

TWO HUNDRED NINETY THOUSAND DOLLARS

$290,000

Furthermore, based upon the analysis of data obtained, we have formed the opinion
that the Fair Market Value of the Fee Simple Estate in the excess land of the subject
property, i.e., 251,376 square feet, subject to the definitions, certifications, and limiting
conditions set forth in the attached Restricted Use Appraisal Report, as of February 6,
2013, is:

DRAFT
TWO HUNDRED FIFTY THOUSAND DOLLARS

$250,000

The estimated marketing period associated with these value estimates is twelve
months, while the estimated exposure period is also twelve months.

The range of the Fair Market Rent for the building and improved primary site (25,600
square feet) is $8.00 to $10.00 per square foot of gross building area. This rate
assumes a NNN basis, without concessions, on an “as is” basis. The lease term is
three to five years. The annual rental rate does not include an annual CPI increase.

Our report and analysis are subject to the attached statement of Assumptions and
Limiting Conditions. Pertinent valuation details are located on the following pages.
Additional market intelligence is maintained in our files.

CITRUS COUNTY HOSPITAL BOARD


RESTRICTED USE APPRAISAL REPORT Page 21

Parcel No. 2 ‐Professional Services Building – Citrus Springs Boulevard
Building Cost Development

PRELIMINARY DRAFT ‐ SUBJECT TO CHANGE
Citrus Springs, Citrus County, Florida
As of February 6, 2013

2 ‐  Miscellaneous and 
Building Number & Name 1 ‐ Citrus Memorial Healthcare Cente Land Improvements TOTAL

Medical Office 
Occupancy Number & Name 341 Building
Section Number & Page 15 22
Construction Class & Quality C Average
Gross Building Area (Square Feet) 3,200                     3,200
Gross Perimeter (Linear Feet) 228
Number of Floors & Height per Story (Feet) 1 12
   
Base Cost ‐ Square Foot $123.80

Refinements ‐ Square Foot
Heating, cooling, ventilating $0.00
Elevator ‐$2.10
Sprinkler System $0.00
Miscellaneous $0.00
$121.70
Refinements ‐ Multipliers
Number of Stories 1.000

DRAFT
Height per Story 1.000
Floor Area & Perimeter 1.032
Current Cost Multiplier 1.070
Local Cost Multiplier 1.000
Net Multiplier 1.104

Replacement Cost New (RCN)
Adjusted Cost ‐ Square Foot 134.36
Extended Base Cost $429,952   $429,952
Miscellaneous                           ‐ $                35,592                   35,592
Site Improvements                          ‐                 100,173                 100,173
Subtotal $429,952 $135,765 $565,717
Soft Costs & Entreprenurial Profit 5.0% $21,498 5.0%                     6,788                   28,287
RCN $451,450 $             142,553 $594,003
RCN Rounded $450,000 $140,000 $590,000
RCN per Square Foot $140.63 $184.38

Depreciation

Year Built 1991
Physical Age 22
Effective Age 22
Economic Life (Section 97, Page 13) 40
Remaining Useful Life 18  
Physical Depreciation (Age/Life) 55.0% $247,500 $75,554                 323,054
RCN less Physical Depreciation $202,500 $64,446 $266,946
Functional Obsolescence 0.0% $0 $0                          ‐
less Functional Obsolescence $202,500 $64,446 $266,946
Economic Obsolescence 0.0% $0 $0                          ‐
less Economic Obsolescence $202,500 $64,446 $266,946

Depreciated Cost $200,000 $60,000 $260,000


per Square Foot $62.50 $81.25

CITRUS COUNTY HOSPITAL BOARD


Parcel No. 2 ‐Professional Services Building – Citrus Springs Boulevard
Miscellaneous Items Pricing Support

PRELIMINARY DRAFT ‐ SUBJECT TO CHANGE

Current Cost Local Total 


Description Quantity Unit Unit Cost Source
Multiplier Multiplier Cost
Canopies 576 sf $57.75 1.07 1.00 $              35,592 MVS ‐ Section 15 Page 37
  35,592
5%
1,780
Replacement Cost New $        37,372

Depreciation %    55.0%

CITRUS COUNTY HOSPITAL BOARD


Depreciation   $              20,554
RESTRICTED USE APPRAISAL REPORT

DRAFT
Page 22
Parcel No. 2 ‐Professional Services Building – Citrus Springs Boulevard
Land Improvements Cost Development

Citrus Springs, Florida
As of February 6, 2013

PRELIMINARY DRAFT ‐ SUBJECT TO CHANGE
Multipliers

MVS  Unit Base  Unit Replacement  Replacement 


Type Description Page Quantity Unit Current Local
Section Cost Cost, New Cost New

Paving Good quality asphalt parking lot(est) 66 3 11,880 SF $3.50 1.04 1.00 $3.64 $43,243


Paving Good quality concrete parking lot(est) 66 3 780 SF $4.50 1.04 1.00 $4.68 $3,650
Landscaping Landscaping 66 3 16,000 SF $3.20 1.04 1.00 $3.33                 53,280

CITRUS COUNTY HOSPITAL BOARD


Total Replacement Cost New (CRN) $100,173
5%
RESTRICTED USE APPRAISAL REPORT

                  5,009
$105,182
CRN Rounded $110,000

Effective Age 4
Economic Life (Section 97, Page 19) 8
Remaining Useful Life 4
Physical Depreciation (Age/Life) 50.0% $55,000

DRAFT
RCN less Physical Depreciation $55,000
Functional Obsolescence 0.0% $0
less Functional Obsolescence $55,000
Economic Obsolescence 0.0% $0
less Economic Obsolescence $55,000
Depreciated Cost $60,000
Page 23
RESTRICTED USE APPRAISAL REPORT Page 24

Parcel No. 2 -Professional Services Building – Citrus Springs Boulevard


10332 North Citrus Springs Boulevard
Citrus Springs, Citrus County, Florida
 

 
COST APPROACH CONCLUSION

TOTAL REPLACEMENT COST NEW $590,000

Less Accrued Depreciation:


Physical Curable $0
Physical Incurable 323,054
Total Physical $323,054
Functional Curable Obsolescence $0
Functional Incurable Obsolescence 0
Total Functional Obsolescence 0

DRAFT
External Obsolescence 0

TOTAL ACCRUED DEPRECIATION $323,054

ROUNDED RCNLD $270,000

PLUS LAND VALUE $25,000

VALUE - FEE SIMPLE ESTATE $295,000

ADD EXCESS LAND 250,000

VALUE INDICATED BY THE COST APPROACH $545,000

ROUNDED $550,000

CITRUS COUNTY HOSPITAL BOARD


RESTRICTED USE APPRAISAL REPORT Page 25

Parcel No. 2 -Professional Services Building – Citrus Springs Boulevard


Direct Capitalization
Gross Building Area 3,200
Market Rent $ 9.00

Potential Gross Income $ 28,800


Less Vacancy 5% 1,440
Effective Gross Income $ 27,360
Less Management 3% $ 821
Total Operating Expenses $ 821
Less Structural Reserves $ 0.50 1,600
Net Operating Income $ 24,939
Indicated Cap. Rate 9.00%

Indicated Value $ 277,102


Less PV of Capital Expenditures -
Final Indicated Value 277,102
Rounded $ 280,000
PSF $ 87.50

DRAFT

CITRUS COUNTY HOSPITAL BOARD


RESTRICTED USE APPRAISAL REPORT Page 26

SUMMARY OF SALIENT FACTS – PARCEL NO. 4

Date of Appraisal: February 6, 2013

Property Name/Location: Professional Medical Building – South

DRAFT
Florida Avenue
7646 South Florida Avenue
Floral City, Citrus County, Florida

Client: Citrus County Hospital Board

Land Size: 98,543 square feet or 2.262 acres

Improvement Size: 3,280 gross square feet

Owner of Record: Citrus County Hospital Board

Subject Property Description:


Use: Medical Office Building

Fair Market Value: $350,000

Range of Fair Market Rent: $9.00 to $11.00 per square foot of gross
building area

Implicit in this rental rate estimate is on a NNN basis, with the tenant being responsible
for all operating costs. The lease term would be three to five years, without
concessions, on an “as is” basis. The rate does not include an annual CPI increase in
the base rate.

CITRUS COUNTY HOSPITAL BOARD


RESTRICTED USE APPRAISAL REPORT Page 27

PROPERTY DESCRIPTION – PARCEL NO. 4


The subject property consists of an improved 2.262-acre (gross) land parcel that is
located at 7646 South Florida Avenue, Floral City, Citrus County, Florida. Specifically,
the subject site is located along the west side of South Florida Avenue, approximately
407 feet north of East Orange Avenue. There is an estimated approximately 312 feet of
frontage along the west side of South Florida Avenue. The site contains approximately
98,543 square feet, or 2.262 acres, according to the Citrus County Property Appraiser
and is irregular in shape. There is a single curb cut into the tract along the west side of
South Florida Avenue. The site is generally level and at street grade. According to
Flood Insurance Rate Map number 1200630270B, dated August 15, 1984, the subject
property is not within a designated flood zone. The subject site is zoned GNC (General
Commercial District). .

According to the Citrus County Property Appraiser, the assessment for 2012 is as
follows:

Market/Just Assessed Taxable


Alt Key 1856388 $508,200 $508,200 $0

DRAFT
The subject property is improved with a one-story medical office building, associated
site improvements and surface parking. The improvements are equally divided as a
two-tenant medical office building. The building is fully occupied by Citrus Primary
Care. According to the Citrus County Property Appraiser, the improvements comprise a
gross building area of 3,280 square feet. In addition, there is approximately 626 square
feet of roof-covered porch area at the primary entrance. The building is constructed
with concrete block and stucco veneer with glass windows along the exterior. The roof
is pitched with composite shingles. The interior finish-out includes: commercial-grade
carpeting or 1’ by 1’ floor tiles; painted drywall partitioning; 2’ by 4’ ceiling tiles; and
recessed fluorescent lighting. Exam rooms include sinks. The improvements are not
sprinklered. In the occupied area, there are exam rooms, a receptionist area, a filing
area, a waiting room and storage. Land improvements consist of landscaping and
asphalt surface parking.

The improvements were built in 1997 and have a chronological age of 16 years. Given
the maintenance of the property, the effective age is estimated to be 16 years. The
subject’s physical adaptability conforms to that of its competitors. Overall, the subject
premises are considered to be of average quality construction.

The subject improvements are in average condition, which is consistent with the
chronological age of the structure and the level of maintenance. The project amenities

CITRUS COUNTY HOSPITAL BOARD


RESTRICTED USE APPRAISAL REPORT Page 28

are consistent with medical office uses in the local market. The design and layout
appear to be conducive to current operations.

HIGHEST AND BEST USE ANALYSIS


As previously discussed, in the analysis of Highest and Best Use of the land as though
vacant, it is assumed that the land is vacant or can be made vacant by removal of
existing improvements. The analysis of Highest and Best Use of the land as improved
considers the alternative uses of an improved property.

It is VMG Health’s opinion that the Highest and Best Use of the subject site, as if
vacant, would be for future commercial development as permitted by zoning as demand
warrants.

In the case of the subject property, the existing improvements are functional and
constitute a substantial improvement to the subject site. The cost of demolishing the
existing improvements would far exceed any increase in revenue that could be
generated from an alternative use at this time.

The existing improvements suffer from no apparent form or physical, functional or


external obsolescence. In all respects, the improvements are assumed functional and
conform well to the neighborhood.

CONCLUSION
DRAFT
The subject site is improved with a structure that comprises a gross building area of
3,280 square feet. The building is used as a medical office building. The
improvements contribute significantly to the value of the subject site and provide for
both a return to the land and improvements. Therefore, it is our opinion that the Highest
and Best Use as Improved of the subject property is for the continued use as a medical
office building.

VALUATION
In earlier sections of this Summary Appraisal Report, the three basic approaches were
discussed: the Cost Approach; the Sales Comparison Approach; and the Income
Approach.

The appraiser analyzed all market data and considered all three traditional approaches
to value.

CITRUS COUNTY HOSPITAL BOARD


RESTRICTED USE APPRAISAL REPORT Page 29

VALUE RECONCILIATION

VMG Health reconciled the indicators analyzed to determine an estimate of the Fair
Market Value for the subject property. Based upon the analysis of data obtained, we
have formed the opinion that the Fair Market Value of the Fee Simple Estate in the
subject property, subject to the definitions, certifications, and limiting conditions set forth
in the attached Restricted Use Appraisal Report, as of February 6, 2013, is:

THREE HUNDRED FIFTY THOUSAND DOLLARS


$350,000

The estimated marketing period associated with this value estimate is twelve months,
while the estimated exposure period is also twelve months.

The range of the Fair Market Rent is $9.00 to $11.00 per square foot of gross building
area, on a NNN basis, without concessions, on an “as is” basis. The lease term is three
to five years. The annual rental rate does not include an annual CPI increase.

Our report and analysis are subject to the attached statement of Assumptions and
Limiting Conditions. Pertinent valuation details are located on the following pages.

DRAFT
Additional market intelligence is maintained in our files.

CITRUS COUNTY HOSPITAL BOARD


RESTRICTED USE APPRAISAL REPORT Page 30

Parcel No. 4 ‐ Professional Services Building – South Florida Avenue
Building Cost Development

PRELIMINARY DRAFT ‐ SUBJECT TO CHANGE
Floral City, Citrus County, Florida
As of February 6, 2013

2 ‐  Miscellaneous and 
Building Number & Name 1 ‐ Citrus Memorial Healthcare Cente Land Improvements TOTAL

Medical Office 
Occupancy Number & Name 341 Building
Section Number & Page 15 22
Construction Class & Quality C Average
Gross Building Area (Square Feet) 3,280                     3,280
Gross Perimeter (Linear Feet) 258
Number of Floors & Height per Story (Feet) 1 12
   
Base Cost ‐ Square Foot $123.80

Refinements ‐ Square Foot
Heating, cooling, ventilating $0.00
Elevator ‐$2.10
Sprinkler System $0.00
Miscellaneous $0.00
$121.70
Refinements ‐ Multipliers

DRAFT
Number of Stories 1.000
Height per Story 1.000
Floor Area & Perimeter 1.018
Current Cost Multiplier 1.070
Local Cost Multiplier 1.000
Net Multiplier 1.089

Replacement Cost New (RCN)
Adjusted Cost ‐ Square Foot 132.53
Extended Base Cost $434,698   $434,698
Miscellaneous                           ‐ $                38,682                   38,682
Site Improvements                          ‐                   82,526                   82,526
Subtotal $434,698 $121,208 $555,906
Soft Costs & Entreprenurial Profit 5.0% $21,735 5.0%                     6,060                   27,796
RCN $456,433 $             127,268 $583,701
RCN Rounded $460,000 $130,000 $590,000
RCN per Square Foot $140.24 $179.88

Depreciation

Year Built 1997
Physical Age 16
Effective Age 16
Economic Life (Section 97, Page 13) 40
Remaining Useful Life 24  
Physical Depreciation (Age/Life) 40.0% $184,000 $61,246                 245,246
RCN less Physical Depreciation $276,000 $68,754 $344,754
Functional Obsolescence 0.0% $0 $0                         ‐
less Functional Obsolescence $276,000 $68,754 $344,754
Economic Obsolescence 0.0% $0 $0                         ‐
less Economic Obsolescence $276,000 $68,754 $344,754

Depreciated Cost $280,000 $70,000 $350,000


per Square Foot $85.37 $106.71

CITRUS COUNTY HOSPITAL BOARD


Parcel No. 4 ‐ Professional Services Building – South Florida Avenue
Miscellaneous Items Pricing Support

PRELIMINARY DRAFT ‐ SUBJECT TO CHANGE

Current Cost Local Total 


Description Quantity Unit Unit Cost Source
Multiplier Multiplier Cost
Canopies 626 sf $57.75 1.07 1.00 $              38,682 MVS ‐ Section 15 Page 37
  38,682
5%
1,934
Replacement Cost New $        40,616

Depreciation %    40.0%

CITRUS COUNTY HOSPITAL BOARD


Depreciation   $              16,246
RESTRICTED USE APPRAISAL REPORT

DRAFT
Page 31
Parcel No. 4 ‐ Professional Services Building – South Florida Avenue
Land Improvements Cost Development

Floral City, Florida
As of February 6, 2013

PRELIMINARY DRAFT ‐ SUBJECT TO CHANGE
Multipliers

MVS  Unit Base  Unit Replacement  Replacement 


Type Description Page Quantity Unit Current Local
Section Cost Cost, New Cost New

Paving Good quality asphalt parking lot(est) 66 3 20,800 SF $3.50 1.04 1.00 $3.64 $75,712


Paving Good quality concrete parking lot(est) 66 3 720 SF $4.50 1.04 1.00 $4.68 $3,370
Landscaping Landscaping 66 3 11,310 SF $0.20 1.04 1.00 $0.21                   2,375

CITRUS COUNTY HOSPITAL BOARD


Total Replacement Cost New (CRN) $81,457
5%
RESTRICTED USE APPRAISAL REPORT

                  4,073
$85,530
CRN Rounded $90,000

Effective Age 4
Economic Life (Section 97, Page 19) 8
Remaining Useful Life 4
Physical Depreciation (Age/Life) 50.0% $45,000

DRAFT
RCN less Physical Depreciation $45,000
Functional Obsolescence 0.0% $0
less Functional Obsolescence $45,000
Economic Obsolescence 0.0% $0
less Economic Obsolescence $45,000
Depreciated Cost $50,000
Page 32
RESTRICTED USE APPRAISAL REPORT Page 33

Parcel No. 4 - Professional Services Building – South Florida Avenue


7646 South Florida Avenue
Floral City, Citrus County, Florida
 

 
COST APPROACH CONCLUSION

TOTAL REPLACEMENT COST NEW $590,000

Less Accrued Depreciation:


Physical Curable $0
Physical Incurable 245,246
Total Physical $245,246
Functional Curable Obsolescence $0
Functional Incurable Obsolescence 0
Total Functional Obsolescence 0

DRAFT
External Obsolescence 0

TOTAL ACCRUED DEPRECIATION $245,246

ROUNDED RCNLD $340,000

PLUS LAND VALUE $50,000

VALUE - FEE SIMPLE ESTATE $390,000

ROUNDED $390,000

CITRUS COUNTY HOSPITAL BOARD


RESTRICTED USE APPRAISAL REPORT Page 34

Parcel No. 4 - Professional Services Building – South Florida Avenue


Direct Capitalization
Gross Building Area 3,280
Market Rent $ 10.00

Potential Gross Income $ 32,800


Less Vacancy 5% 1,640
Effective Gross Income $ 31,160
Less Management 3% $ 935
Total Operating Expenses $ 935
Less Structural Reserves $ 0.50 1,640
Net Operating Income $ 28,585
Indicated Cap. Rate 9.00%

Indicated Value $ 317,613


Less PV of Capital Expenditures -

DRAFT
Final Indicated Value 317,613
Rounded $ 320,000
PSF $ 97.56

CITRUS COUNTY HOSPITAL BOARD


RESTRICTED USE APPRAISAL REPORT Page 35

SUMMARY OF SALIENT FACTS – PARCEL NOS. 6 AND 24

Date of Appraisal: February 6, 2013

Property Name/Location: CMHF (Parking / Other Building)


201 South Seminole Avenue, 204 South

DRAFT
Pine Avenue and 206 South Pine Avenue
Inverness, Citrus County, Florida

Client: Citrus County Hospital Board

Land Size: 52,813 square feet or 1.212 acres

Improvement Size: 1,460 gross square feet (no contributory


value)

Owner of Record: Citrus Memorial Health Foundation, Inc.

Subject Property Description:


Use: Future commercial development

Fair Market Value: $260,000

CITRUS COUNTY HOSPITAL BOARD


RESTRICTED USE APPRAISAL REPORT Page 36

PROPERTY DESCRIPTION – PARCEL NOS. 6 AND 24


The subject property consists of an improved 1.212 acre (gross) land parcel that is
located at 201 South Seminole Avenue, 204 South Pine Avenue and 206 South Pine
Avenue, Inverness, Citrus County, Florida.

Specifically, the subject site is the northern portion of the city block bounded by West
Grace Street on the north, South Pine Avenue on the east, South Seminole Avenue on
the west and West Highland Boulevard on the south. There is an estimated
approximately 325 feet of frontage along the south side of West Grace Street,
approximately 175 feet along the west side of South Pine Avenue and approximately
100 feet along the east side of South Seminole Avenue. The site contains
approximately 52,813 square feet, or 1.212 acres, according to the Citrus County
Property Appraiser and is irregular in shape. There are two curb cuts into the tract
along the south side of West Grace Street and two along the west side of South Pine
Avenue. The site is generally level and at street grade. According to Flood Insurance
Rate Map number 1203480002B, dated May 17, 1982, the subject property is not within
a designated flood zone. The subject site is zoned RO / RP (Residential Professional).

According to the Citrus County Property Appraiser, the assessment for 2012 is as

DRAFT
follows. The property is tax exempt.

Alt Key Market/Just Assessed Taxable


1758963 $38,157 $38,157 $0
1758955 38,157 38,157 0
2910551 215,092 215,092 0
$291,406 $291,406 $0

The subject property is improved with two one-story residential structures and surface
parking. The improvements contribute minimal value to the site, other than as an
interim use for residential occupancy for the short term.

HIGHEST AND BEST USE ANALYSIS


As previously discussed, in the analysis of Highest and Best Use of the land as though
vacant, it is assumed that the land is vacant or can be made vacant by removal of
existing improvements. The analysis of Highest and Best Use of the land as improved
considers the alternative uses of an improved property.

CITRUS COUNTY HOSPITAL BOARD


RESTRICTED USE APPRAISAL REPORT Page 37

CONCLUSION
It is VMG Health’s opinion that the Highest and Best Use of the subject site, as if
vacant, would be for future commercial development as permitted by zoning as demand
warrants.

VALUATION
In earlier sections of this Summary Appraisal Report, the three basic approaches were
discussed: the Cost Approach; the Sales Comparison Approach; and the Income
Approach.

The appraiser analyzed all market data and considered all three traditional approaches
to value. However, as the Fair Market Value of this property is essentially land value,
only the Sales Comparison Approach to value was applied.

VALUE RECONCILIATION

VMG Health reconciled the indicators analyzed to determine an estimate of the Fair
Market Value for the subject property. Based upon the analysis of data obtained, we
have formed the opinion that the Fair Market Value of the Fee Simple Estate in the
subject property, subject to the definitions, certifications, and limiting conditions set forth

DRAFT
in the attached Restricted Use Appraisal Report, as of February 6, 2013, is:

TWO HUNDRED SIXTY THOUSAND DOLLARS


$260,000

The estimated marketing period associated with this value estimate is twelve months,
while the estimated exposure period is also twelve months.

Our report and analysis are subject to the attached statement of Assumptions and
Limiting Conditions.

PARCEL ALLOCATION

Parcel No. Land Area (SF) Distribution Allocation


6 16,250 31% $80,000
24 36,563 69% 180,000
$260,000

CITRUS COUNTY HOSPITAL BOARD


RESTRICTED USE APPRAISAL REPORT Page 38

SUMMARY OF SALIENT FACTS – PARCEL NOS. 9, 10 AND 23

Date of Appraisal: February 6, 2013

Property Name/Location: CMHF Grace Street and CMHF Public


Assistance Center

DRAFT 123 South Seminole, 200 West Grace


Street and 208 West Grace Street
Inverness, Citrus County, Florida

Land Size: 140,128 square feet or 3.217 acres

Improvement Size: 12,701 gross square feet (excludes church


facility and office buildings)

Owner of Record: Citrus Memorial Health Foundation, Inc.

Subject Property Description:


Use: Medical Office Building

Fair Market Value: $1,300,000 (Parcel No. 23); $70,000


(Parcel No. 9); $30,000 (Parcel No. 10)

Range of Fair Market Rent: $7.00 to $9.00 per square foot of gross
building area (Parcel No. 23)

Implicit in this rental rate estimate is a NNN basis, with the tenant being responsible for
all operating costs. The lease term would be three to five years, without concessions,
on an “as is” basis. The rate also does not include annual CPI increase in the base
rate.

CITRUS COUNTY HOSPITAL BOARD


RESTRICTED USE APPRAISAL REPORT Page 39

PROPERTY DESCRIPTION – PARCEL NOS. 9, 10 AND 23


The subject property consists of three adjacent land parcels and related improvements.
Parcel No. 9 contains two buildings; Parcel No. 10 contains one building; Parcel No. 23
contains two buildings.

Parcel No. Land Area (SF) Building Area (SF)


9 14,950 2,040 (no contributory value)
10 5,420 1,002 (no contributory value)
23 119,758 30,776 (see discussion)
Total 140,128 33,818

Because the parcels are contiguous, the three are considered as one tract containing
3.217 acres (gross). Parcel Nos. 9 and 10 are located at 200 West Grace Street and
208 West Grace Street. Parcel No. 23 is located at 123 South Seminole Avenue. The
three parcels are located in Inverness, Citrus County, Florida.

Specifically, the site containing the three parcels consists of the city block bounded by
West Main Street on the north, South Pine Avenue on the east, West Grace Street on
the south and South Seminole Avenue on the west, excluding the 0.487-acre southeast

DRAFT
corner of West Main Street and South Seminole Avenue. There are an estimated 190
feet of frontage along the southwest side of West Main Street, 420 feet along the west
side of South Pine Avenue, 325 feet along the north side of West Grace Street and 400
feet along the east side of South Seminole Avenue. The site contains approximately
140,128 square feet, or 3.217 acres, according to the Citrus County Property Appraiser
and is irregular in shape. There are two curb cuts into the tract along the south side of
West Main Street, three curb cuts from South Pine Avenue, two curb cut from West
Grace Street and two along the east side of South Seminole Avenue. The site is slopes
gently from west to east and is at street grade. According to Flood Insurance Rate Map
number 1203480002B, dated May 17, 1982 the subject property is not within a
designated flood zone. The subject site is zoned CBD (Central Business District).

According to the Citrus County Property Appraiser, the assessment for 2012 is as
follows:

Parcel No. Alt Key Market/Just Assessed Taxable


9 1755921 $132,484 $132,484 $0
10 1755913 69,280 69,280 0
23 2910569 2,356,889 2,356,889 0
Total $2,558,653 $2,558,653 $0

CITRUS COUNTY HOSPITAL BOARD


RESTRICTED USE APPRAISAL REPORT Page 40

Parcel No. 23 is improved with a one-story office building and a former church facility
(currently used as offices and storage). Parcel Nos. 9 and 10 are improved with three
one-story former residential structures which are being used as office buildings and
associated site improvements.

On Parcel No. 23, it is noted the existing former-church building facility suffers from
advanced depreciation and is currently used for storage and interim office purposes.
On Parcel Nos. 9 and 10, the former residential buildings also suffer from advanced
depreciation. On this basis, the former church facility on Parcel No. 23 and the
residential structures on Parcel Nos. 9 and 10 are considered to be interim uses and do
not add contributory value to the property as a whole.

According to the Citrus County Property Appraiser, the one-story office building located
on Parcel No. 23 contains a gross building area of 12,701 square feet. The 12,701-
square-foot office building is constructed with concrete block and stucco and brick
veneer with glass windows along the exterior. The office building is sprinklered. The
roof of the office is a combination of pitched roof with composite shingles and flat
membrane-covered roof. The interior finish-out of the office includes: commercial-grade
carpeting or 1’ by 1’ floor tiles; painted drywall partitioning; 2’ by 4’ ceiling tiles; and
recessed fluorescent lighting. There are meeting, training and conference rooms as

DRAFT
well as individual offices. The remaining buildings are constructed with concrete block
and stucco veneer with pitched roofs, and, as previously described, are in poor
condition. Land improvements consist of landscaping and asphalt surface parking. The
building was constructed in 1968; the estimated chronological age for the property is 45
years.

For Parcel No. 23, given the size and configuration of the subject land area and the
consideration of the former-church building facility is an interim use and does not add
contributory value to the property as a whole, a portion of Parcel No. 23 is considered
excess land. For Parcel Nos. 9 and 10, given the three one-story former residential
structures are an interim use and also do not add contributory value to the property as a
whole, the property, Parcel Nos. 9 and 10, are regarded as vacant; because the parcels
are contiguous and considered as one tract with Parcel No. 23, Parcel Nos. 9 and 10
are regarded as excess land.

For Parcel No. 23, the amount of excess is estimated using a land to building ratio of 2
to 1 for the existing office building containing 12,701 square feet of gross building area.
The estimated site for the subject building is therefore 25,402 square feet. The
remaining area on Parcel No. 23 (94,356 square feet) is considered excess land.

CITRUS COUNTY HOSPITAL BOARD


RESTRICTED USE APPRAISAL REPORT Page 41

HIGHEST AND BEST USE ANALYSIS


As previously discussed, in the analysis of Highest and Best Use of the land as though
vacant, it is assumed that the land is vacant or can be made vacant by removal of
existing improvements. The analysis of Highest and Best Use of the land as improved
considers the alternative uses of an improved property.

It is VMG Health’s opinion that the Highest and Best Use of the subject site, i.e., the
contiguous Parcel Nos. 9, 19 and 23) as if vacant, would be for future commercial
development as permitted by zoning as demand warrants.

In the case of the subject property Parcel No. 23, the existing office improvements
containing 12,701 square feet are functional and constitute a substantial improvement
to the subject site. The cost of demolishing the existing improvements would far exceed
any increase in revenue that could be generated from an alternative use at this time.
The existing 12,701-square-foot office improvements suffer from no apparent form or
physical, functional or external obsolescence. In all respects, the improvements are
assumed functional and conform well to the neighborhood.

However, the remaining improvements (church and residential structures) on Parcel

DRAFT
Nos. 9, 10 and 23, exhibit advanced depreciation. Moreover, the indicated value of the
land associated with the improvements indicates that the improvements provide minimal
contributory vale to the site as a whole.

Considered as excess land, the highest and best use of the underlying land on Parcel
Nos. 9, 10 and 23 would be for future commercial development as permitted by zoning
as demand warrants.

CONCLUSION
Parcel No. 23 is improved with one structure that comprises a gross building area of
12,701 square feet. The building is used as offices. The improvements contribute
significantly to the value of the subject site and provide for both a return to the land and
improvements. Therefore, it is our opinion that the Highest and Best Use as Improved
of the subject property is for the continued use as an office building.

As discussed, the church and residential structures located on Parcel Nos. 9 and 10
and the portion of Parcel No. 23 (excluding the office building and required parking) do
not prove contributory value to the site as a whole. The Highest and Best Use of Parcel
Nos. 9 and 10, as well as the excess land on Parcel No. 23, is for redevelopment upon
economic justification.

CITRUS COUNTY HOSPITAL BOARD


RESTRICTED USE APPRAISAL REPORT Page 42

VALUATION
In earlier sections of this Summary Appraisal Report, the three basic approaches were
discussed: the Cost Approach; the Sales Comparison Approach; and the Income
Approach.

The appraiser analyzed all market data and considered all three traditional approaches
to value Parcel No. 23. As Parcel Nos. 9 and 10 essentially represent land value, only
the Sales Comparison Approach to value was applied.

VALUE RECONCILIATION

VMG Health reconciled the indicators analyzed to determine an estimate of the Fair
Market Value for the subject property. Based upon the analysis of data obtained, we
have formed the opinion that the Fair Market Value of the Fee Simple Estate in the
subject property (Parcel No. 23), i.e., the 12,701 square foot building on an estimated
site of 25,402 square feet, subject to the definitions, certifications, and limiting
conditions set forth in the attached Restricted Use Appraisal Report, as of February 6,
2013, is:

DRAFT
NINE HUNDRED THOUSAND DOLLARS
$900,000

Furthermore, based upon the analysis of data obtained, we have formed the opinion
that the Fair Market Value of the Fee Simple Estate in the excess land of the subject
property, i.e., 94,356 square feet, subject to the definitions, certifications, and limiting
conditions set forth in the attached Restricted Use Appraisal Report, as of February 6,
2013, is:

FIVE HUNDRED THOUSAND DOLLARS


$500,000

The estimated marketing period associated with this value estimate is twelve months,
while the estimated exposure period is also twelve months.

The range of the Fair Market Rent for the improved portion of Parcel No. 23 is $7.00 to
$9.00 per square foot of gross building area, on a NNN basis, without concessions, on
an “as is” basis. The lease term is three to five years. The annual rental rate does not
include an annual CPI increase.

CITRUS COUNTY HOSPITAL BOARD


RESTRICTED USE APPRAISAL REPORT Page 43

Our report and analysis are subject to the attached statement of Assumptions and
Limiting Conditions. Pertinent valuation details are located on the following pages.
Additional market intelligence is maintained in our files.

PARCEL ALLOCATION
Parcel No. Allocation
9 $70,000
10 30,000
23 1,300,000
$1,400,000

DRAFT

CITRUS COUNTY HOSPITAL BOARD


RESTRICTED USE APPRAISAL REPORT Page 44

Parcel No. 23 ‐ CMHF Offices
Building Cost Development

PRELIMINARY DRAFT ‐ SUBJECT TO CHANGE
Inverness, Citrus County, Florida
As of February 6, 2013

2‐ Miscellaneous and 
Building Number & Name 1 ‐ Annex Building Land Improvements TOTAL

Occupancy Number & Name 344 Office


Section Number & Page 15 17
Construction Class & Quality C Good 
Gross Building Area (Square Feet) 12,701            12,701
Gross Perimeter (Linear Feet) 516
Number of Floors & Height per Story (Feet) 1 12
  249.02*.1+162.26*.9
Base Cost ‐ Square Foot $138.59

Refinements ‐ Square Foot
Heating, cooling, ventilating $0.00
Elevator ‐$2.00
Sprinkler System $3.26
Miscellaneous $0.00
$139.85
Refinements ‐ Multipliers

DRAFT
Number of Stories 1.000
Height per Story 1.000
Floor Area & Perimeter 0.950
Current Cost Multiplier 1.070
Local Cost Multiplier 1.000
Net Multiplier 1.017

Replacement Cost New (RCN)
Adjusted Cost ‐ Square Foot 142.23
Extended Base Cost $1,806,463   $1,806,463
Miscellaneous                    ‐ $         50,423            50,423
Site Improvements                   ‐          174,819          174,819
Subtotal $1,806,463 $225,242 $2,031,705
Soft Costs & Entreprenurial Profit 5.0% $90,323 5.0%            11,262          101,585
RCN $1,896,786 $      236,504 $2,133,290
RCN Rounded $1,900,000 $240,000 $2,140,000
RCN per Square Foot $149.59 $168.49

Depreciation

Year Built 1968
Physical Age 45
Effective Age 35
Economic Life (Section 97, Page 13) 55
Remaining Useful Life 20  
Physical Depreciation (Age/Life) 63.6% $1,209,091 $123,692      1,332,783
RCN less Physical Depreciation $690,909 $116,308 $807,217
Functional Obsolescence 0.0% $0 $0                   ‐
less Functional Obsolescence $690,909 $116,308 $807,217
Economic Obsolescence 0.0% $0 $0                   ‐
less Economic Obsolescence $690,909 $116,308 $807,217

Depreciated Cost $690,000 $120,000 $810,000


per Square Foot $54.33 $63.77

CITRUS COUNTY HOSPITAL BOARD


Parcel No. 23 ‐ CMHF Offices
Miscellaneous Items Pricing Support

PRELIMINARY DRAFT ‐ SUBJECT TO CHANGE

Current Cost Local Total 


Description Quantity Unit Unit Cost Source
Multiplier Multiplier Cost
Canopies 816 sf $57.75 1.07 1.00 $              50,423 MVS ‐ Section 15 Page 37
5%
2,521
Replacement Cost New $        52,944

Depreciation %    63.6%
Depreciation   $              33,692

CITRUS COUNTY HOSPITAL BOARD


RESTRICTED USE APPRAISAL REPORT

DRAFT
Page 45
Parcel No. 23 ‐ CMHF Offices
Land Improvements Cost Development

Inverness, Florida
As of February 6, 2013

PRELIMINARY DRAFT ‐ SUBJECT TO CHANGE
Multipliers

MVS  Unit Base  Unit Replacement  Replacement 


Type Description Page Quantity Unit Current Local
Section Cost Cost, New Cost New

Paving Good quality asphalt parking lot(est) 66 3 38,538 SF $3.50 1.04 1.00 $3.64 $140,277


Landscaping Landscaping 66 8 12,000 SF $1.96 1.04 1.00 $2.04                 24,480
Lighting Lighting 66 1 6 Units $1,613 1.04 1.00 $1,677.00                 10,062

CITRUS COUNTY HOSPITAL BOARD


Total Replacement Cost New (CRN) $174,819
5%
RESTRICTED USE APPRAISAL REPORT

                  8,741
$183,560
CRN Rounded $180,000

Effective Age 4
Economic Life (Section 97, Page 19) 8
Remaining Useful Life 4
Physical Depreciation (Age/Life) 50.0% $90,000

DRAFT
RCN less Physical Depreciation $90,000
Functional Obsolescence 0.0% $0
less Functional Obsolescence $90,000
Economic Obsolescence 0.0% $0
less Economic Obsolescence $90,000
Depreciated Cost $90,000
Page 46
RESTRICTED USE APPRAISAL REPORT Page 47

Parcel No. 23 - CMHF Offices


Inverness, Citrus County, Florida
 

 
COST APPROACH CONCLUSION

TOTAL REPLACEMENT COST NEW $2,140,000

Less Accrued Depreciation:


Physical Curable $0
Physical Incurable 1,332,783
Total Physical $1,332,783
Functional Curable Obsolescence $0
Functional Incurable Obsolescence 0
Total Functional Obsolescence 0
External Obsolescence 0

TOTAL ACCRUED DEPRECIATION


DRAFT $1,332,783

ROUNDED RCNLD $810,000

PLUS LAND VALUE (25,402 SQUARE FEET) $110,000

VALUE - FEE SIMPLE ESTATE $920,000

ADD EXCESS LAND (94,356 SQUARE FEET) 420,000

ROUNDED $1,340,000

CITRUS COUNTY HOSPITAL BOARD


RESTRICTED USE APPRAISAL REPORT Page 48

Parcel No. 23 - CMHF Offices


Direct Capitalization
Gross Building Area 12,701
Market Rent $8.00

Potential Gross Income $ 101,608


Less Vacancy 5% 5,080
Effective Gross Income $ 96,528
Less Management 3% $ 2,896
Total Operating Expenses $ 2,896
Less Structural Reserves $ 0.50 6,351
Net Operating Income $ 87,281
Indicated Cap. Rate 10.50%

Indicated Value $ 831,250


Less PV of Capital Expenditures -
Indicated Value Before Excess Land 831,250
Excess Land 420,000
Final Indicated Value $ 1,251,250
Rounded $ 1,250,000

DRAFT

CITRUS COUNTY HOSPITAL BOARD


RESTRICTED USE APPRAISAL REPORT Page 49

SUMMARY OF SALIENT FACTS – PARCEL NOS. 11, 17, 19 AND 20

Date of Appraisal:
DRAFT
February 6, 2013

Property Name/Location: CMHF Vacant Governmental


108 and 112 South Seminole Avenue, 111
South Osceola Avenue and 302 West
Grace Street,
Inverness, Citrus County, Florida

Client: Citrus County Hospital Board

Land Size: 91,535 square feet or 2.101 acres

Improvement Size: None

Owner of Record: Citrus Memorial Health Foundation, Inc.

Subject Property Description:


Use: Surface Parking

Fair Market Value: $520,000

CITRUS COUNTY HOSPITAL BOARD


RESTRICTED USE APPRAISAL REPORT Page 50

PROPERTY DESCRIPTION – PARCEL NOS. 11, 17, 19 AND 20


The subject property consists of an improved 2.101-acre (gross) land parcel that is
located at 108 South Seminole Avenue and 112 South Seminole Avenue, 111 South
Osceola Avenue and 302 West Grace Street, Inverness, Citrus County, Florida.
Specifically, the subject site is located at the southern half of the city block bounded by
West Grace Street on the south, South Seminole Avenue on the east and South
Osceola Avenue on the west.

There is an estimated approximately 330 feet of frontage along the west line of South
Seminole Avenue, 325 feet along the north side of West Grace Street and 248 feet
along the east side of South Osceola Avenue. The site contains approximately 91,535
square feet, or 2.101 acres, according to the Citrus County Property Appraiser and is
irregular in shape. There is a single curb cut into the tract along each of the three
frontage roads. The site is generally level and at street grade. According to Flood
Insurance Rate Map number 1203480002B, dated May 17, 1982, the subject property is
not within a designated flood zone. The subject site is zoned RO / RP (Residential
Professional). The subject property is improved with surface parking (estimated 62,500
square feet by the appraiser). Land improvements consist of landscaping and asphalt
surface parking, which contribute to the value of the site.

DRAFT
According to the Citrus County Property Appraiser, the assessment for 2012 is as
follows. The properties are tax exempt.

Market/Just Assessed Taxable


Alt Key 1755808 $45,206 $45,206 $0
Alt Key 2906863 327,870 327,870 0
Alt Key 2910542 188,637 188,637 0
Alt Key 2911484 20,726 20,726 0
Total $582,439 $582,439 $0

HIGHEST AND BEST USE ANALYSIS


As previously discussed, in the analysis of Highest and Best Use of the land as though
vacant, it is assumed that the land is vacant or can be made vacant by removal of
existing improvements. The analysis of Highest and Best Use of the land as improved
considers the alternative uses of an improved property.

It is VMG Health’s opinion that the Highest and Best Use of the subject site, as if
vacant, would be for future commercial development as permitted by zoning as demand
warrants.

CITRUS COUNTY HOSPITAL BOARD


RESTRICTED USE APPRAISAL REPORT Page 51

In the case of the subject property, the site is vacant save the existing surface parking
which contributes to the site.

VALUATION
In earlier sections of this Summary Appraisal Report, the three basic approaches were
discussed: the Cost Approach; the Sales Comparison Approach; and the Income
Approach. Only the Sales Comparison Approach was utilized in this instance and the
contributory value of the paving was determined by application of the Cost Approach.

The appraiser analyzed all market data and considered all three traditional approaches
to value.

VALUE RECONCILIATION

VMG Health reconciled the indicators analyzed to determine an estimate of the Fair
Market Value for the subject property. Based upon the analysis of data obtained, we
have formed the opinion that the Fair Market Value of the Fee Simple Estate in the
subject property, subject to the definitions, certifications, and limiting conditions set forth
in the attached Restricted Use Appraisal Report, as of February 5, 2012, is:

DRAFT
FIVE HUNDRED TWENTY THOUSAND DOLLARS
$520,000

The estimated marketing period associated with this value estimate is twelve months,
while the estimated exposure period is also twelve months.

Our report and analysis are subject to the attached statement of Assumptions and
Limiting Conditions.

PARCEL ALLOCATION

Parcel No. Land Area (SF) Distribution Allocation


11 5,541 6% $25,000
17 52,623 58% 305,000*
19 31,241 34% 180,000*
20 2,130 2% 10,000
$520,000

*Includes land improvements

CITRUS COUNTY HOSPITAL BOARD


RESTRICTED USE APPRAISAL REPORT Page 52

SUMMARY OF SALIENT FACTS – PARCEL NUMBER 12

Date of Appraisal: February 6, 2013

Property Name/Location: CMHF/RRA, LLC

DRAFT
6254 West Corporate Oaks Drive
Citrus County, Florida

Client: Citrus County Hospital Board

Land Size: 39,578 square feet or 0.909 acre

Improvement Size: 2,874 gross square feet

Owner of Record: Citrus Memorial Health Foundation, Inc.


and RRA LLC

Subject Property Description:


Use: Medical Office Building

Fair Market Value: $290,000

Range of Fair Market Rent: $10.00 to $12.00 per square foot of gross
building area

Implicit in this rental rate estimate is a NNN basis, with the tenant being responsible for
all operating costs. The lease term would be three to five years, without concessions,
on an “as is” basis. The rate also does not include an annual CPI increase in the base
rate.

CITRUS COUNTY HOSPITAL BOARD


RESTRICTED USE APPRAISAL REPORT Page 53

PROPERTY DESCRIPTION – PARCEL NO. 12


The subject property consists of an improved 0.909 acre (gross) land parcel that is
located at 6254 West Corporate Oaks Drive, Crystal River, Citrus County, Florida.

Specifically, the subject site is located on the northeast side of West Gulf to Lake
Highway, approximately 186 feet southeast of North Meeting Tree Boulevard. The site
also has approximately 158 feet of frontage and access along the southwest side of
West Corporate Oaks Drive. The site is visible but not accessible from West Gulf to
Lake Highway. The site contains approximately 39,578 square feet, or 0.909 acre,
according to the Citrus County Property Appraiser and is irregular in shape. There is a
single curb cut into the tract from West Corporate Oaks Drive. The site is slopes gently
to the southwest and at street grade. According to Flood Insurance Rate Map number
1200630120B, dated August 15, 1984, the subject property is not within a designated
flood zone. The subject site is zoned PDR (Planned Residential Development District).

According to the Citrus County Property Appraiser, the assessment for 2012 is as
follows:

Alt Key 2425407 DRAFT


Market/Just
$427,278
Assessed
$427,278
Taxable
$427,278

The subject property is improved with an unoccupied one-story professional office


building, associated site improvements and surface parking. According to the Citrus
County Property Appraiser, the improvements comprise a gross building area of 2,874
square feet. The building is constructed with wood-frame and wood siding and stucco
veneer with glass windows along the exterior. The roof is pitched with composite
shingles. The interior was not inspected. It is reported the improvements are not
sprinklered. Land improvements consist of landscaping and asphalt surface parking.

The improvements were built in 1986 and have a chronological age of 27 years. Given
the maintenance of the property, the effective age is estimated to be 18 years. The
subject’s physical adaptability conforms to that of its competitors. Overall, the subject
premises are considered to be of average quality construction. The subject
improvements are in average condition, which is consistent with the chronological age
of the structure and the level of maintenance. The project amenities are consistent with
professional and medical office uses in the local market. The design and layout appear
to be conducive to operations of tenants in the market.

CITRUS COUNTY HOSPITAL BOARD


RESTRICTED USE APPRAISAL REPORT Page 54

HIGHEST AND BEST USE ANALYSIS


As previously discussed, in the analysis of Highest and Best Use of the land as though
vacant, it is assumed that the land is vacant or can be made vacant by removal of
existing improvements. The analysis of Highest and Best Use of the land as improved
considers the alternative uses of an improved property.

It is VMG Health’s opinion that the Highest and Best Use of the subject site, as if
vacant, would be for future commercial development as permitted by zoning as demand
warrants.

In the case of the subject property, the existing improvements are functional and
constitute a substantial improvement to the subject site. The cost of demolishing the
existing improvements would far exceed any increase in revenue that could be
generated from an alternative use at this time.

The existing improvements suffer from no apparent form or physical, functional or


external obsolescence. In all respects, the improvements are assumed functional and
conform well to the neighborhood.

CONCLUSION

DRAFT
The subject site is improved with a structure that comprises a gross building area of
2,874 square feet. The building is used as a medical office building.

The improvements contribute significantly to the value of the subject site and provide for
both a return to the land and improvements. Therefore, it is our opinion that the Highest
and Best Use as Improved of the subject property is for the continued use as a medical
office building.

VALUATION
In earlier sections of this Summary Appraisal Report, the three basic approaches were
discussed: the Cost Approach; the Sales Comparison Approach; and the Income
Approach.

The appraiser analyzed all market data and considered all three traditional approaches
to value.

CITRUS COUNTY HOSPITAL BOARD


RESTRICTED USE APPRAISAL REPORT Page 55

VALUE RECONCILIATION

VMG Health reconciled the indicators analyzed to determine an estimate of the Fair
Market Value for the subject property. Based upon the analysis of data obtained, we
have formed the opinion that the Fair Market Value of the Fee Simple Estate in the
subject property, subject to the definitions, certifications, and limiting conditions set forth
in the attached Restricted Use Appraisal Report, as of February 6, 2013, is:

TWO HUNDRED NINETY THOUSAND DOLLARS


$290,000

The estimated marketing period associated with this value estimate is twelve months,
while the estimated exposure period is also twelve months.

The range of the Fair Market Rent, including both buildings, is $10.00 to $12.00 per
square foot of gross building area, on a NNN basis, without concessions, on an “as is”
basis. The lease term is three to five years. The annual rental rate does not include an
annual CPI increase.

Our report and analysis are subject to the attached statement of Assumptions and

DRAFT
Limiting Conditions. Pertinent valuation details are located on the following pages.
Additional market intelligence is maintained in our files.

CITRUS COUNTY HOSPITAL BOARD


RESTRICTED USE APPRAISAL REPORT Page 56

Parcel No. 12 ‐ CMHF/RRA, LLC ‐ 
Building Cost Development

PRELIMINARY DRAFT ‐ SUBJECT TO CHANGE
Crystal River, Citrus County, Florida
As of February 6, 2013

2 ‐  Miscellaneous and 
Building Number & Name 1 ‐ Citrus Memorial Healthcare Cente Land Improvements TOTAL

Medical Office 
Occupancy Number & Name 341 Building
Section Number & Page 15 22
Construction Class & Quality D Average
Gross Building Area (Square Feet) 2,874                     2,874
Gross Perimeter (Linear Feet) 204
Number of Floors & Height per Story (Feet) 1 12
   
Base Cost ‐ Square Foot $117.45

Refinements ‐ Square Foot
Heating, cooling, ventilating $0.00
Elevator ‐$2.10
Sprinkler System $0.00
Miscellaneous $0.00
$115.35
Refinements ‐ Multipliers

DRAFT
Number of Stories 1.000
Height per Story 1.000
Floor Area & Perimeter 1.030
Current Cost Multiplier 1.060
Local Cost Multiplier 1.000
Net Multiplier 1.092

Replacement Cost New (RCN)
Adjusted Cost ‐ Square Foot 125.96
Extended Base Cost $362,009   $362,009
Miscellaneous                           ‐ $                      ‐                          ‐
Site Improvements                          ‐                   71,408                   71,408
Subtotal $362,009 $71,408 $433,417
Soft Costs & Entreprenurial Profit 5.0% $18,100 5.0%                     3,570                   21,671
RCN $380,109 $                74,978 $455,087
RCN Rounded $380,000 $70,000 $450,000
RCN per Square Foot $132.22 $156.58

Depreciation

Year Built 1986
Physical Age 27
Effective Age 18
Economic Life (Section 97, Page 13) 35
Remaining Useful Life 17  
Physical Depreciation (Age/Life) 51.4% $195,429 $35,000                 230,429
RCN less Physical Depreciation $184,571 $35,000 $219,571
Functional Obsolescence 0.0% $0 $0                         ‐
less Functional Obsolescence $184,571 $35,000 $219,571
Economic Obsolescence 0.0% $0 $0                         ‐
less Economic Obsolescence $184,571 $35,000 $219,571

Depreciated Cost $180,000 $40,000 $220,000


per Square Foot $62.63 $76.55

CITRUS COUNTY HOSPITAL BOARD


Parcel No. 12 ‐ CMHF/RRA, LLC ‐ 
Land Improvements Cost Development

Crystal River, Florida
As of February 6, 2013

PRELIMINARY DRAFT ‐ SUBJECT TO CHANGE
Multipliers

MVS  Unit Base  Unit Replacement  Replacement 


Type Description Page Quantity Unit Current Local
Section Cost Cost, New Cost New

Paving Good quality asphalt parking lot(est) 66 3 6,990 SF $3.50 1.06 1.00 $3.71 $25,933


Landscaping Landscaping 66 3 26,750 SF $1.60 1.06 1.00 $1.70                 45,475

CITRUS COUNTY HOSPITAL BOARD


Total Replacement Cost New (CRN) $71,408
RESTRICTED USE APPRAISAL REPORT

5%
                  3,570
$74,978
CRN Rounded $70,000

Effective Age 4
Economic Life (Section 97, Page 19) 8
Remaining Useful Life 4

DRAFT
Physical Depreciation (Age/Life) 50.0% $35,000
RCN less Physical Depreciation $35,000
Functional Obsolescence 0.0% $0
less Functional Obsolescence $35,000
Economic Obsolescence 0.0% $0
less Economic Obsolescence $35,000
Depreciated Cost $40,000
Page 57
RESTRICTED USE APPRAISAL REPORT Page 58

Parcel No. 12 - CMHF/RRA, LLC -


6254 West Corporate Oaks Drive
Crystal River, Citrus County, Florida
 

 
COST APPROACH CONCLUSION

TOTAL REPLACEMENT COST NEW $450,000

Less Accrued Depreciation:


Physical Curable $0
Physical Incurable 230,429
Total Physical $230,429
Functional Curable Obsolescence $0
Functional Incurable Obsolescence 0
Total Functional Obsolescence 0

DRAFT
External Obsolescence 0

TOTAL ACCRUED DEPRECIATION $230,429

ROUNDED RCNLD $220,000

PLUS LAND VALUE $60,000

VALUE - FEE SIMPLE ESTATE $280,000

ROUNDED $280,000

CITRUS COUNTY HOSPITAL BOARD


RESTRICTED USE APPRAISAL REPORT Page 59

Parcel No. 12 ‐ CMHF/RRA, LLC ‐ 
Direct Capitalization
Gross Building Area 2,874
Market Rent $ 11.00

Potential Gross Income $                   31,614
Less Vacancy 5% 1,581
Effective Gross Income $ 30,033
Less Management 3% $ 901
Total Operating Expenses $ 901
Less Structural Reserves $ 0.50 1,437
Net Operating Income $ 27,695
Indicated Cap. Rate 9.50%

Indicated Value $ 291,529
Less PV of Capital Expenditures -

DRAFT
Total $                291,529
Less Leaseup (9 months to lease)                   (23,711)
Total $                291,529
Rounded $                290,000
PSF $                   100.90

CITRUS COUNTY HOSPITAL BOARD


RESTRICTED USE APPRAISAL REPORT Page 60

SUMMARY OF SALIENT FACTS – PARCEL NO. 13

Date of Appraisal: February 6, 2013

Property Name/Location: CMHF-Citrus Primary Crystal River / Dr.

DRAFT
Irvine
700 Southeast 5th Terrace, Units 7 and 8
Crystal River, Citrus County, Florida

Client: Citrus County Hospital Board

Land Size: 2,784 square feet or 0.064 acre

Improvement Size: 2,784 gross square feet

Owner of Record: Citrus Memorial Health Foundation, Inc.

Subject Property Description:


Use: Medical Office Building

Fair Market Value: $200,000

Range of Fair Market Rent: $8.00 to $10.00 per square foot of gross
building area

Implicit in this rental rate estimate is a NNN basis, with the tenant being responsible for
all operating costs. The lease term would be three to five years, without concessions,
on an “as is” basis. The rate does not include an annual CPI increase in the base rate.

CITRUS COUNTY HOSPITAL BOARD


RESTRICTED USE APPRAISAL REPORT Page 61

PROPERTY DESCRIPTION – PARCEL NO. 13


The subject property consists of an improved 0.064 acre (gross) land parcel that is
located at 700 Southeast 5th Terrace, Crystal River, Citrus County, Florida.

Specifically, the subject site is located within the Crystal River Professional Park and
shares parking with the Professional Park of Crystal River Condominium Association.
The site is located approximately 240 feet south of Southeast 5th Terrace.

Access to the Crystal River Professional Park development is available along the south
line of Southeast 5th Terrace via a single curb cut and along the west line of the property
to the adjacent property. Because of the condominium ownership, the site area is the
area of the building footprint, or approximately 2,784 square feet, or 0.064 acre,
according to the Citrus County Property Appraiser and is irregular in shape. The site is
generally level and at street grade. Based on an estimate by the appraiser, according
to Flood Insurance Rate Map number 1230480002B, dated August 15, 1984, indicates
the majority of the site is located in Zone A11(E8). It is recommended that a definitive
survey be conducted by engineers to determine the final status of the subject property.
The subject site is zoned CG (General Commercial). The subject property is improved
with a one-story medical office building and associated site improvements. Surface

DRAFT
parking is available. The improvements are equally divided as a two-tenant medical
office building. The building is occupied by Citrus Primary Care, David Irvine, M.D.

According to the Citrus County Property Appraiser, the improvements comprise a gross
building area of 2,784 square feet.

Building Area (SF) Year Built


Unit 7 1,363 1984
Unit 8 1,421 1984
Total 2,784

According to the Citrus County Property Appraiser, the assessment for 2012 is as
follows:

Market/Just Assessed Taxable


Alt Key 2619970 $96,995 $96,995 $96,995
Alt Key 2619988 75,897 75,897 75,897
Total $172,892 $172,892 $172,892

The building is wood-frame constructed with vertical wood siding and faux-brick exterior
with glass windows along the exterior. The roof is pitched with composite shingles. The
interior finish-out includes: 1’ by 1’ floor tiles; painted drywall partitioning; 2’ by 2’ ceiling

CITRUS COUNTY HOSPITAL BOARD


RESTRICTED USE APPRAISAL REPORT Page 62

tiles; and recessed fluorescent lighting. The improvements are not sprinklered. There
are six exam rooms, a receptionist area, a filing area, a waiting room and storage areas.
Land improvements consist of landscaping and asphalt surface parking. The
improvements were built in 1984 and have a chronological age of 29 years.

Given the maintenance of the property, the effective age is estimated to be 20 years.

The subject’s physical adaptability conforms to that of its competitors. Overall, the
subject premises are considered to be of average quality construction.

The subject improvements are in average condition, which is consistent with the
chronological age of the structure and the level of maintenance. The project amenities
are consistent with medical office uses in the local market. The design and layout
appear to be conducive to current operations.

HIGHEST AND BEST USE ANALYSIS


As previously discussed, in the analysis of Highest and Best Use of the land as though
vacant, it is assumed that the land is vacant or can be made vacant by removal of
existing improvements. The analysis of Highest and Best Use of the land as improved
considers the alternative uses of an improved property.

DRAFT
It is VMG Health’s opinion that the Highest and Best Use of the subject site, as if
vacant, would be for future commercial development in conjunction with the
condominium development and as permitted by zoning as demand warrants.

In the case of the subject property, the existing improvements are functional and
constitute a substantial improvement to the subject site. The cost of demolishing the
existing improvements would far exceed any increase in revenue that could be
generated from an alternative use at this time.

The existing improvements suffer from no apparent form or physical, functional or


external obsolescence. In all respects, the improvements are assumed functional and
conform well to the neighborhood.

CONCLUSION
The subject site is improved with a structure that comprises a gross building area of
2,784 square feet. The building is used as a medical office condominium.

The improvements contribute significantly to the value of the subject site and provide for
both a return to the land and improvements. Therefore, it is our opinion that the Highest
and Best Use as Improved of the subject property is for the continued use as a medical
office condominium.

CITRUS COUNTY HOSPITAL BOARD


RESTRICTED USE APPRAISAL REPORT Page 63

VALUATION
In earlier sections of this Summary Appraisal Report, the three basic approaches were
discussed: the Cost Approach; the Sales Comparison Approach; and the Income
Approach. The appraiser analyzed all market data and considered the Income and the
Sales Comparison Approaches to value. Primarily reliance was placed on the Sales
Comparison Approach.

VALUE RECONCILIATION

VMG Health reconciled the indicators analyzed to determine an estimate of the Fair
Market Value for the subject condominium. Based upon the analysis of data obtained,
we have formed the opinion that the Fair Market Value of the Fee Simple Estate in the
subject property, subject to the definitions, certifications, and limiting conditions set forth
in the attached Restricted Use Appraisal Report, as of February 6, 2013, is:

TWO HUNDRED THOUSAND DOLLARS


$200,000

The estimated marketing period associated with this value estimate is twelve months,

DRAFT
while the estimated exposure period is also twelve months.

The range of the Fair Market Rent, including both buildings, is $8.00 to $10.00 per
square foot of gross building area, on a NNN basis, without concessions, on an “as is”
basis. The lease term is three to five years. The annual rental rate does not include an
annual CPI increase.

Our report and analysis are subject to the attached statement of Assumptions and
Limiting Conditions.

CITRUS COUNTY HOSPITAL BOARD


RESTRICTED USE APPRAISAL REPORT Page 64

SUMMARY OF SALIENT FACTS – PARCEL NO. 14

Date of Appraisal: February 6, 2013

Property Name/Location: CMHF-Citrus Primary Beverly Hills

DRAFT
450 West Roosevelt Boulevard
Beverly Hills, Citrus County, Florida

Client: Citrus County Hospital Board

Land Size: 82,960 square feet or 1.904 acres

Improvement Size: 3,493 gross square feet

Owner of Record: Citrus Memorial Health Foundation, Inc.

Subject Property Description:


Use: Medical Office Building

Fair Market Value: $450,000

Range of Fair Market Rent: $10.00 to $12.00 per square foot of gross
building area

Implicit in this rental rate estimate is a NNN basis, with the tenant being responsible for
all operating costs. The lease term would be three to five years, without concessions,
on an “as is” basis. The rate does not include an annual CPI increase in the base rate.

CITRUS COUNTY HOSPITAL BOARD


RESTRICTED USE APPRAISAL REPORT Page 65

PROPERTY DESCRIPTION – PARCEL NO. 14


The subject property consists of an improved 1.904 acre (gross) land parcel that is
located at 450 West Roosevelt Boulevard, Beverly Hills, Citrus County, Florida.

Specifically, the subject site is located at the southwest corner of West Roosevelt
Boulevard and North Forest Ridge Boulevard. There is an estimated approximately 360
feet of frontage along the southwest side of West Roosevelt Boulevard and
approximately 215 feet of frontage along the northwest side of North Forest Ridge
Boulevard. The site contains approximately 82,960 square feet, or 1.904 acres,
according to the Citrus County Property Appraiser and is irregular in shape. There is a
curb cut into the tract along the south side of West Roosevelt Boulevard and from the
south across the adjoining property. The site is generally level and at street grade.
According to Flood Insurance Rate Map number 1200630140B, dated August 15, 1984,
the subject property is not within a designated flood zone. The subject site is zoned
PDR (Planned Residential Development District).

According to the Citrus County Property Appraiser, the assessment for 2012 is as
follows:

DRAFT
Market/Just Assessed Taxable
Alt Key 2959312 $527,086 $527,086 $0

The subject property is improved with a one-story medical office building, associated
site improvements and surface parking. The improvements are equally divided as a
two-tenant medical office building. The building is occupied by Citrus Primary Care.
According to the Citrus County Property Appraiser, the improvements comprise a gross
building area of 3,493 square feet. In addition, there is approximately 692 square feet
of roof-covered porch area at the primary entrance. The building is constructed with
concrete block and stucco veneer with glass windows along the exterior. The roof is
pitched with composite shingles. The interior finish-out includes: 1’ by 1’ floor tiles;
painted drywall partitioning; 2’ by 2’ ceiling tiles; and recessed fluorescent lighting.
Exam rooms include sinks. The improvements are not sprinklered. Interior
improvements include exam rooms, receptionist areas, filing areas, waiting rooms and
storage areas. Land improvements consist of landscaping and asphalt surface parking.

The improvements were built in 2001 and have a chronological age of 12 years.

Given the maintenance of the property, the effective age is estimated to be 12 years.

CITRUS COUNTY HOSPITAL BOARD


RESTRICTED USE APPRAISAL REPORT Page 66

The subject’s physical adaptability conforms to that of its competitors. Overall, the
subject premises are considered to be of average quality construction. The subject
improvements are in average condition, which is consistent with the chronological age
of the structure and the level of maintenance. The project amenities are consistent with
medical office uses in the local market. The design and layout appear to be conducive
to current operations.

HIGHEST AND BEST USE ANALYSIS


As previously discussed, in the analysis of Highest and Best Use of the land as though
vacant, it is assumed that the land is vacant or can be made vacant by removal of
existing improvements. The analysis of Highest and Best Use of the land as improved
considers the alternative uses of an improved property.

It is VMG Health’s opinion that the Highest and Best Use of the subject site, as if
vacant, would be for future commercial development as permitted by zoning as demand
warrants.

In the case of the subject property, the existing improvements are functional and
constitute a substantial improvement to the subject site. The cost of demolishing the

DRAFT
existing improvements would far exceed any increase in revenue that could be
generated from an alternative use at this time.

The existing improvements suffer from no apparent form or physical, functional or


external obsolescence. In all respects, the improvements are assumed functional and
conform well to the neighborhood.

CONCLUSION
The subject site is improved with a structure that comprises a gross building area of
3,493 square feet. The building is used as a medical office building.

The improvements contribute significantly to the value of the subject site and provide for
both a return to the land and improvements. Therefore, it is our opinion that the Highest
and Best Use as Improved of the subject property is for the continued use as a medical
office building.

VALUATION
In earlier sections of this Summary Appraisal Report, the three basic approaches were
discussed: the Cost Approach; the Sales Comparison Approach; and the Income
Approach.

CITRUS COUNTY HOSPITAL BOARD


RESTRICTED USE APPRAISAL REPORT Page 67

The appraiser analyzed all market data and considered all three traditional approaches
to value.

VALUE RECONCILIATION

VMG Health reconciled the indicators analyzed to determine an estimate of the Fair
Market Value for the subject premises. The subject property has a high land-to-building
ratio, distorting the Cost Approach. Greater weight was place on the Income Approach.
Based upon the analysis of data obtained, we have formed the opinion that the Fair
Market Value of the Fee Simple Estate in the subject property, subject to the definitions,
certifications, and limiting conditions set forth in the attached Restricted Use Appraisal
Report, as of February 6, 2013, is:

FOUR HUNDRED FIFTY THOUSAND DOLLARS


$450,000

The estimated marketing period associated with this value estimate is twelve months,
while the estimated exposure period is also twelve months.

The range of the Fair Market Rent, including both buildings, is $10.00 to $12.00 per

DRAFT
square foot of gross building area, on a NNN basis, without concessions, on an “as is”
basis. The lease term is three to five years. The annual rental rate does not include an
annual CPI increase.

Our report and analysis are subject to the attached statement of Assumptions and
Limiting Conditions. Pertinent valuation details are located on the following pages.
Additional market intelligence is maintained in our files.

CITRUS COUNTY HOSPITAL BOARD


RESTRICTED USE APPRAISAL REPORT Page 68

Parcel No. 14 ‐ CMHF – Citrus Primary Beverly Hills 
Building Cost Development

PRELIMINARY DRAFT ‐ SUBJECT TO CHANGE
Beverly Hills, Citrus County, Florida
As of February 6, 2013

2 ‐  Miscellaneous and 
Building Number & Name 1 ‐ Citrus Memorial Healthcare Cente Land Improvements TOTAL

Medical Office 
Occupancy Number & Name 341 Building
Section Number & Page 15 22
Construction Class & Quality C Average
Gross Building Area (Square Feet) 3,493                     3,493
Gross Perimeter (Linear Feet) 248
Number of Floors & Height per Story (Feet) 1 12
   
Base Cost ‐ Square Foot $123.80

Refinements ‐ Square Foot
Heating, cooling, ventilating $0.00
Elevator ‐$2.10
Sprinkler System $0.00
Miscellaneous $0.00
$121.70
Refinements ‐ Multipliers
Number of Stories 1.000

DRAFT
Height per Story 1.000
Floor Area & Perimeter 1.033
Current Cost Multiplier 1.070
Local Cost Multiplier 1.000
Net Multiplier 1.105

Replacement Cost New (RCN)
Adjusted Cost ‐ Square Foot 134.48
Extended Base Cost $469,739   $469,739
Miscellaneous                           ‐ $                36,828                   36,828
Site Improvements                          ‐                 105,295                 105,295
Subtotal $469,739 $142,123 $611,862
Soft Costs & Entreprenurial Profit 5.0% $23,487 5.0%                     7,106                   30,594
RCN $493,226 $             149,229 $642,455
RCN Rounded $490,000 $150,000 $640,000
RCN per Square Foot $140.28 $183.22

Depreciation

Year Built 2001
Physical Age 12
Effective Age 12
Economic Life (Section 97, Page 13) 40
Remaining Useful Life 28  
Physical Depreciation (Age/Life) 30.0% $147,000 $66,601                 213,601
RCN less Physical Depreciation $343,000 $83,399 $426,399
Functional Obsolescence 0.0% $0 $0                          ‐
less Functional Obsolescence $343,000 $83,399 $426,399
Economic Obsolescence 0.0% $0 $0                          ‐
less Economic Obsolescence $343,000 $83,399 $426,399

Depreciated Cost $340,000 $80,000 $420,000


per Square Foot $97.34 $120.24

CITRUS COUNTY HOSPITAL BOARD


Parcel No. 14 ‐ CMHF – Citrus Primary Beverly Hills 
Miscellaneous Items Pricing Support

PRELIMINARY DRAFT ‐ SUBJECT TO CHANGE

Current Cost Local Total 


Description Quantity Unit Unit Cost Source
Multiplier Multiplier Cost
Canopies 596 sf $57.75 1.07 1.00 $              36,828 MVS ‐ Section 15 Page 37
  36,828
5%
1,841
Replacement Cost New $        38,669

Depreciation %    30.0%

CITRUS COUNTY HOSPITAL BOARD


Depreciation   $              11,601
RESTRICTED USE APPRAISAL REPORT

DRAFT
Page 69
Parcel No. 14 ‐ CMHF – Citrus Primary Beverly Hills 
Land Improvements Cost Development

Beverly Hills, Florida
As of February 6, 2013

PRELIMINARY DRAFT ‐ SUBJECT TO CHANGE
Multipliers

MVS  Unit Base  Unit Replacement  Replacement 


Type Description Page Quantity Unit Current Local
Section Cost Cost, New Cost New

Paving Good quality asphalt parking lot(est) 66 3 16,100 SF $3.50 1.04 1.00 $3.64 $58,604


Paving Good quality concrete parking lot(est) 66 3 660 SF $4.50 1.04 1.00 $4.68 $3,089
Landscaping Landscaping 66 3 55,900 SF $0.75 1.04 1.00 $0.78                 43,602

CITRUS COUNTY HOSPITAL BOARD


Total Replacement Cost New (CRN) $105,295
RESTRICTED USE APPRAISAL REPORT

5%
                  5,265
$110,560
CRN Rounded $110,000

Effective Age 4
Economic Life (Section 97, Page 19) 8
Remaining Useful Life 4

DRAFT
Physical Depreciation (Age/Life) 50.0% $55,000
RCN less Physical Depreciation $55,000
Functional Obsolescence 0.0% $0
less Functional Obsolescence $55,000
Economic Obsolescence 0.0% $0
less Economic Obsolescence $55,000
Depreciated Cost $60,000
Page 70
RESTRICTED USE APPRAISAL REPORT Page 71

Parcel No. 14 - CMHF – Citrus Primary Beverly Hills


450 West Roosevelt Boulevard
Beverly Hills, Citrus County, Florida
 

 
COST APPROACH CONCLUSION

TOTAL REPLACEMENT COST NEW $640,000

Less Accrued Depreciation:


Physical Curable $0
Physical Incurable 213,601
Total Physical $213,601
Functional Curable Obsolescence $0
Functional Incurable Obsolescence 0
Total Functional Obsolescence 0

DRAFT
External Obsolescence 0

TOTAL ACCRUED DEPRECIATION $213,601

LAND IMPROVEMENTS & BUILDINGS $426,399

PLUS LAND VALUE $80,000

ROUNDED RCNLD $510,000

CITRUS COUNTY HOSPITAL BOARD


RESTRICTED USE APPRAISAL REPORT Page 72

Parcel No. 14 ‐ CMHF – Citrus Primary Beverly Hills 
Direct Capitalization
Gross Building Area 3,493
Market Rent $ 11.00

Potential Gross Income $                   38,423
Less Vacancy 5% 1,921
Effective Gross Income $ 36,502
Less Management 3% $ 1,095
Total Operating Expenses $ 1,095
Less Structural Reserves $ 0.50 1,747
Net Operating Income $ 33,660
Indicated Cap. Rate 8.50%

Indicated Value $ 396,003
Less PV of Capital Expenditures -
Final Indicated Value                    396,003
Rounded $                400,000
PSF $                   114.51

DRAFT

CITRUS COUNTY HOSPITAL BOARD


RESTRICTED USE APPRAISAL REPORT Page 73

SUMMARY OF SALIENT FACTS – PARCEL NO. 15

Date of Appraisal: February 6, 2013

Property Name/Location: CMHF Rehabilitation Center

DRAFT
810 Medical Court East
Inverness, Citrus County, Florida

Client: Citrus County Hospital Board

Land Size: 38,392 square feet or 0.881 acre

Improvement Size: 7,066 gross square feet

Owner of Record: Citrus Memorial Health Foundation, Inc.

Subject Property Description:


Use: Rehabilitation Center

Fair Market Value: $880,000

Range of Fair Market Rent: $13.00 to $15.00 per square foot of gross
building area

Implicit in this rental rate estimate is a NNN basis, with the tenant being responsible for
all operating costs. The lease term would be three to five years, without concessions,
on an “as is” basis. The rate does not include an annual CPI increase in the base rate.

CITRUS COUNTY HOSPITAL BOARD


RESTRICTED USE APPRAISAL REPORT Page 74

PROPERTY DESCRIPTION – PARCEL NO. 15


The subject property consists of an improved 0.881-acre (gross) land parcel that is
located at 810 Medical Court East, Inverness, Citrus County, Florida.

Specifically, the subject site is located along the north side of Medical Court East,
approximately 250 feet east of Espedeco Drive. There is an estimated approximately
146 feet of frontage along the north side of Medical Court East and approximately 146
feet of frontage along the south side of West Highland Boulevard. The site contains
approximately 38,392 square feet, or 0.881 acre, according to the Citrus County
Property Appraiser and is irregular in shape. There are two curb cuts into the tract
along the north side of Medical Court East. The site is generally level and at street
grade. According to Flood Insurance Rate Map number 1203480002B, dated May 17,
1982, the subject property is not within a designated flood zone. The subject site is
zoned RO / RP (Residential Professional).

According to the Citrus County Property Appraiser, the assessment for 2012 is as
follows:

Market/Just Assessed Taxable


Alt Key 2640251 $704,424 $704,424 $704,424

DRAFT
The subject property is improved with a one-story medical office building with
rehabilitation facilities and swimming pool, associated site improvements and surface
parking. The improvements are occupied by the Citrus Memorial Health Systems
Rehabilitation Services and Gulf Coast Aquatic Center. According to the Citrus County
Property Appraiser, the improvements comprise a gross building area of 7,066 square
feet. In addition, there is approximately 800 square feet porte-cochere at the primary
entrance. The building is constructed with concrete block and stucco veneer with glass
and glass block windows along the exterior. The roof is pitched with a metal roof. The
interior finish-out includes: commercial-grade carpeting or 1’ by 1’ floor tiles; painted
drywall partitioning; textured ceilings; recessed or ceiling-mounted fluorescent lighting;
and skylights. The improvements are not sprinklered. Interior improvements include
the rehabilitation/gym area, the swimming pool, three therapy rooms, a receptionist
area, a filing area, a break room and storage areas. Land improvements consist of
landscaping and asphalt surface parking. The improvements were built in 1996 and
have a chronological age of 17 years. Given the maintenance of the property, the
effective age is estimated to be 14 years.

The subject’s physical adaptability conforms to that of its competitors. Overall, the
subject premises are considered to be of good quality construction. The subject
improvements are in good condition, which is consistent with the chronological age of

CITRUS COUNTY HOSPITAL BOARD


RESTRICTED USE APPRAISAL REPORT Page 75

the structure and the level of maintenance. The project amenities are consistent with
rehabilitation facilities in the local market. The design and layout appear to be
conducive to current operations.

Parcel No. 15 was purchased with Parcel No.16 on May 15, 2012 for a reported price of
$1,800,000, or $130.85 per square foot of gross building area. The allocated price was
$910,266, or $128.82 per square foot.

HIGHEST AND BEST USE ANALYSIS


As previously discussed, in the analysis of Highest and Best Use of the land as though
vacant, it is assumed that the land is vacant or can be made vacant by removal of
existing improvements. The analysis of Highest and Best Use of the land as improved
considers the alternative uses of an improved property.

It is VMG Health’s opinion that the Highest and Best Use of the subject site, as if
vacant, would be for future commercial development as permitted by zoning as demand
warrants.

DRAFT
In the case of the subject property, the existing improvements are functional and
constitute a substantial improvement to the subject site. The cost of demolishing the
existing improvements would far exceed any increase in revenue that could be
generated from an alternative use at this time.

The existing improvements suffer from no apparent form or physical, functional or


external obsolescence. In all respects, the improvements are assumed functional and
conform well to the neighborhood.

CONCLUSION
The subject site is improved with a structure that comprises a gross building area of
7,066 square feet. The building is used as a rehabilitation medical office building.

The improvements contribute significantly to the value of the subject site and provide for
both a return to the land and improvements. Therefore, it is our opinion that the Highest
and Best Use as Improved of the subject property is for the continued use as a
rehabilitation medical office building.

CITRUS COUNTY HOSPITAL BOARD


RESTRICTED USE APPRAISAL REPORT Page 76

VALUATION
In earlier sections of this Summary Appraisal Report, the three basic approaches were
discussed: the Cost Approach; the Sales Comparison Approach; and the Income
Approach.

The appraiser analyzed all market data and considered all three traditional approaches
to value.

VALUE RECONCILIATION

VMG Health reconciled the indicators analyzed to determine an estimate of the Fair
Market Value for the subject property. Based upon the analysis of data obtained, we
have formed the opinion that the Fair Market Value of the Fee Simple Estate in the
subject property, subject to the definitions, certifications, and limiting conditions set forth
in the attached Restricted Use Appraisal Report, as of February 6, 2013, is:

EIGHT HUNDED EIGHTY THOUSAND DOLLARS


$880,000

DRAFT
The estimated marketing period associated with this value estimate is twelve months,
while the estimated exposure period is also twelve months.

The range of the Fair Market Rent is $13.00 to $15.00 per square foot of gross building
area, on a NNN basis, without concessions, on an “as is” basis. The lease term is three
to five years. The annual rental rate does not include an annual CPI increase.

Our report and analysis are subject to the attached statement of Assumptions and
Limiting Conditions. Pertinent valuation details are located on the following pages.
Additional market intelligence is maintained in our files.

CITRUS COUNTY HOSPITAL BOARD


RESTRICTED USE APPRAISAL REPORT Page 77

Parcel No. 15 ‐ CMHF Rehabilitation Center
Building Cost Development

PRELIMINARY DRAFT ‐ SUBJECT TO CHANGE
Inverness, Citrus County, Florida
As of February 6, 2013

2 ‐  Miscellaneous and 
Building Number & Name 1 ‐ Citrus Memorial Healthcare Cente Land Improvements TOTAL

Rehabilitation / 
Occupancy Number & Name 341 Aquatics Center
Section Number & Page 15 22
Construction Class & Quality C Average
Gross Building Area (Square Feet) 7,066                     7,066
Gross Perimeter (Linear Feet) 368
Number of Floors & Height per Story (Feet) 1 12
   
Base Cost ‐ Square Foot $123.80

Refinements ‐ Square Foot
Heating, cooling, ventilating $0.00
Elevator ‐$3.45
Sprinkler System $0.00
Miscellaneous $0.00
$120.35
Refinements ‐ Multipliers

DRAFT
Number of Stories 1.000
Height per Story 1.000
Floor Area & Perimeter 0.983
Current Cost Multiplier 1.070
Local Cost Multiplier 1.000
Net Multiplier 1.052

Replacement Cost New (RCN)
Adjusted Cost ‐ Square Foot 126.61
Extended Base Cost $894,626   $894,626
Miscellaneous                           ‐ $             135,192                 135,192
Site Improvements                          ‐                 121,067                 121,067
Subtotal $894,626 $256,259 $1,150,885
Soft Costs & Entreprenurial Profit 5.0% $44,731 5.0%                   12,813                   57,544
RCN $939,357 $             269,072 $1,208,429
RCN Rounded $940,000 $270,000 $1,210,000
RCN per Square Foot $133.03 $171.24

Depreciation

Year Built 1996
Physical Age 17
Effective Age 14
Economic Life (Section 97, Page 13) 40
Remaining Useful Life 26  
Physical Depreciation (Age/Life) 35.0% $329,000 $114,683                 443,683
RCN less Physical Depreciation $611,000 $155,317 $766,317
Functional Obsolescence 0.0% $0 $0                          ‐
less Functional Obsolescence $611,000 $155,317 $766,317
Economic Obsolescence 0.0% $0 $0                          ‐
less Economic Obsolescence $611,000 $155,317 $766,317

Depreciated Cost $610,000 $160,000 $770,000


per Square Foot $86.33 $108.97

CITRUS COUNTY HOSPITAL BOARD


Parcel No. 15 ‐ CMHF Rehabilitation Center
Miscellaneous Items Pricing Support

PRELIMINARY DRAFT ‐ SUBJECT TO CHANGE

Current Cost Local Total 


Description Quantity Unit Unit Cost Source
Multiplier Multiplier Cost
Canopies 800 sf $57.75 1.07 1.00 $              49,434 MVS ‐ Section 15 Page 37
Pool 600 $         133.58 1.07 1.00                 85,758 MVS ‐ Section 66 Page 7
135,192
5%
6,760
Replacement Cost New $      141,952

CITRUS COUNTY HOSPITAL BOARD


Depreciation %    35.0%
RESTRICTED USE APPRAISAL REPORT

Depreciation   $              49,683

DRAFT
Page 78
Parcel No. 15 ‐ CMHF Rehabilitation Center
Land Improvements Cost Development

Inverness, Florida
As of February 6, 2013

PRELIMINARY DRAFT ‐ SUBJECT TO CHANGE
Multipliers

MVS  Unit Base  Unit Replacement  Replacement 


Type Description Page Quantity Unit Current Local
Section Cost Cost, New Cost New

Paving Good quality asphalt parking lot(est) 66 3 20,800 SF $3.50 1.04 1.00 $3.64 $75,712


Paving Good quality concrete parking lot(est) 66 3 800 SF $4.50 1.04 1.00 $4.68 $3,744
Landscaping Landscaping 66 8 8,033 SF $4.98 1.04 1.00 $5.18                 41,611

CITRUS COUNTY HOSPITAL BOARD


Total Replacement Cost New (CRN) $121,067
RESTRICTED USE APPRAISAL REPORT

5%
                  6,053
$127,120
CRN Rounded $130,000

Effective Age 4
Economic Life (Section 97, Page 19) 8
Remaining Useful Life 4

DRAFT
Physical Depreciation (Age/Life) 50.0% $65,000
RCN less Physical Depreciation $65,000
Functional Obsolescence 0.0% $0
less Functional Obsolescence $65,000
Economic Obsolescence 0.0% $0
less Economic Obsolescence $65,000
Depreciated Cost $70,000
Page 79
RESTRICTED USE APPRAISAL REPORT Page 80

Parcel No. 15 - CMHF Rehabilitation Center


801 Medical Court East
Inverness, Citrus County, Florida
 

 
COST APPROACH CONCLUSION

TOTAL REPLACEMENT COST NEW $1,210,000

Less Accrued Depreciation:


Physical Curable $0
Physical Incurable 443,683
Total Physical $443,683
Functional Curable Obsolescence $0
Functional Incurable Obsolescence 0
Total Functional Obsolescence 0

DRAFT
External Obsolescence 0

TOTAL ACCRUED DEPRECIATION $443,683

LAND IMPROVEMENTS & BUILDINGS $766,317

PLUS LAND VALUE $90,000

ROUNDED RCNLD $860,000

CITRUS COUNTY HOSPITAL BOARD


RESTRICTED USE APPRAISAL REPORT Page 81

Parcel No. 15 ‐ CMHF Rehabilitation Center
Direct Capitalization
Gross Building Area 7,066
Market Rent $ 14.00

Potential Gross Income $                   98,924
Less Vacancy 5% 4,946
Effective Gross Income $ 93,978
Less Management 3% $ 2,819
Total Operating Expenses $ 2,819
Less Structural Reserves $ 0.50 3,533
Net Operating Income $ 87,625
Indicated Cap. Rate 9.50%

Indicated Value $ 922,373
Less PV of Capital Expenditures -

DRAFT
Final Indicated Value                    922,373
Rounded $                900,000

CITRUS COUNTY HOSPITAL BOARD


RESTRICTED USE APPRAISAL REPORT Page 82

SUMMARY OF SALIENT FACTS – PARCEL NO. 16

Date of Appraisal: February 6, 2013

Property Name/Location: CMHF Gulf Coast Aquatic and

DRAFT
Rehabilitation Center
6043 West Nordling Loop
Citrus County, Florida

Client: Citrus County Hospital Board

Land Size: 40,628 square feet or 0.933 acre

Improvement Size: 6,690 gross square feet

Owner of Record: Citrus Memorial Health Foundation, Inc.

Subject Property Description:


Use: Rehabilitation Center

Fair Market Value: $850,000

Range of Fair Market Rent: $13.00 to $15.00 per square foot of gross
building

Implicit in this rental rate estimate is a NNN basis, with the tenant being responsible for
all operating costs. The lease term would be three to five years, without concessions,
on an “as is” basis. The rate does not include an annual CPI increase in the base rate.

CITRUS COUNTY HOSPITAL BOARD


RESTRICTED USE APPRAISAL REPORT Page 83

PROPERTY DESCRIPTION – PARCEL NO. 16


The subject property consists of an improved 0.933 acre (gross) land parcel that is
located at 6043 West Nordling Loop, Citrus County, Florida.

Specifically, the subject site is located at the northeast corner of West Nordling Loop.
There is an estimated approximately 80 feet of frontage along the northeast side of
West Nordling Loop. The site contains approximately 40,628 square feet, or 0.933
acre, according to the Citrus County Property Appraiser and is irregular in shape. There
is a single curb cut into the tract along the northeast side of West Nordling Loop. The
site is generally level and at street grade. A retaining wall borders a segment of the
northeast corner of the site. According to Flood Insurance Rate Map number
120630120B, dated August 15, 1984, the subject property is not within a designated
flood zone. The subject site is zoned PSO (Professional Services / Office District).

According to the Citrus County Property Appraiser, the assessment for 2012 is as
follows:

Market/Just Assessed Taxable


Alt Key 3450035 $630,084 $630,084 $630,084

DRAFT
The subject property is improved with a one-story medical office building with
rehabilitation facilities and swimming pool, associated site improvements and surface
parking. The improvements are occupied by the Citrus Memorial Health Systems
Rehabilitation Services and Gulf Coast Aquatic Center. According to the Citrus County
Property Appraiser, the improvements comprise a gross building area of 6,690 square
feet. In addition, there is approximately 900 square feet porte-cochere at the primary
entrance. The roof is pitched with a metal roof. The interior finish-out includes:
commercial-grade carpeting or 1’ by 1’ floor tiles; painted drywall partitioning; textured
ceilings; recessed or ceiling-mounted fluorescent lighting; and skylights. The
improvements are not sprinklered. Interior improvements include the rehabilitation/gym
area, the swimming pool, a spa, exam rooms, receptionist areas, a filing area, a break
room and storage areas. Land improvements consist of landscaping and asphalt
surface parking.

The improvements were built in 1993 and have a chronological age of 20 years. Given
the maintenance of the property, the effective age is estimated to be 14 years.

The subject’s physical adaptability conforms to that of its competitors. Overall, the
subject premises are considered to be of good quality construction. The subject
improvements are in good condition, which is consistent with the chronological age of
the structure and the level of maintenance. The project amenities are consistent with

CITRUS COUNTY HOSPITAL BOARD


RESTRICTED USE APPRAISAL REPORT Page 84

rehabilitation facilities in the local market. The design and layout appear to be
conducive to current operations.

Parcel No. 16 was purchased with Parcel No.15 on May 15, 2012 for a reported price of
$1,800,000, or $130.85 per square foot of gross building area. The allocated price was
$889,734, or $132.99 per square foot.

HIGHEST AND BEST USE ANALYSIS


As previously discussed, in the analysis of Highest and Best Use of the land as though
vacant, it is assumed that the land is vacant or can be made vacant by removal of
existing improvements. The analysis of Highest and Best Use of the land as improved
considers the alternative uses of an improved property.

It is VMG Health’s opinion that the Highest and Best Use of the subject site, as if
vacant, would be for future commercial development as permitted by zoning as demand
warrants.

In the case of the subject property, the existing improvements are functional and
constitute a substantial improvement to the subject site. The cost of demolishing the

DRAFT
existing improvements would far exceed any increase in revenue that could be
generated from an alternative use at this time.

The existing improvements suffer from no apparent form or physical, functional or


external obsolescence. In all respects, the improvements are assumed functional and
conform well to the neighborhood.

CONCLUSION
The subject site is improved with a structure that comprises a gross building area of
6,690 square feet. The building is used as a rehabilitation medical office building.

The improvements contribute significantly to the value of the subject site and provide for
both a return to the land and improvements. Therefore, it is our opinion that the Highest
and Best Use as Improved of the subject property is for the continued use as a
rehabilitation medical office building.

CITRUS COUNTY HOSPITAL BOARD


RESTRICTED USE APPRAISAL REPORT Page 85

VALUATION
In earlier sections of this Summary Appraisal Report, the three basic approaches were
discussed: the Cost Approach; the Sales Comparison Approach; and the Income
Approach.

The appraiser analyzed all market data and considered all three traditional approaches
to value.

VALUE RECONCILIATION

VMG Health reconciled the indicators analyzed to determine an estimate of the Fair
Market Value for the subject property. Based upon the analysis of data obtained, we
have formed the opinion that the Fair Market Value of the Fee Simple Estate in the
subject property, subject to the definitions, certifications, and limiting conditions set forth
in the attached Restricted Use Appraisal Report, as of February 6, 2013, is:

EIGHT HUNDRED FIFTY THOUSAND DOLLARS


$850,000

DRAFT
The estimated marketing period associated with this value estimate is twelve months,
while the estimated exposure period is also twelve months.

The range of the Fair Market Rent is $13.00 to $15.00 per square foot of gross building
area, on a NNN basis, without concessions, on an “as is” basis. The lease term is three
to five years. The annual rental rate does not include an annual CPI increase.

Our report and analysis are subject to the attached statement of Assumptions and
Limiting Conditions. Pertinent valuation details are located on the following pages.
Additional market intelligence is maintained in our files.

CITRUS COUNTY HOSPITAL BOARD


RESTRICTED USE APPRAISAL REPORT Page 86

Parcel No. 16 ‐ CMHF Rehabilitation Center
Building Cost Development

PRELIMINARY DRAFT ‐ SUBJECT TO CHANGE
Crystal River, Citrus County, Florida
As of February 6, 2013

2 ‐  Miscellaneous and 
Building Number & Name 1 ‐ Citrus Memorial Healthcare Cente Land Improvements TOTAL

Rehabilitation / 
Occupancy Number & Name 341 Aquatics Center
Section Number & Page 15 22
Construction Class & Quality C Average
Gross Building Area (Square Feet) 6,690                     6,690
Gross Perimeter (Linear Feet) 344
Number of Floors & Height per Story (Feet) 1 12
   
Base Cost ‐ Square Foot $123.80

Refinements ‐ Square Foot
Heating, cooling, ventilating $0.00
Elevator ‐$3.45
Sprinkler System $0.00
Miscellaneous $0.00
$120.35
Refinements ‐ Multipliers

DRAFT
Number of Stories 1.000
Height per Story 1.000
Floor Area & Perimeter 0.981
Current Cost Multiplier 1.070
Local Cost Multiplier 1.000
Net Multiplier 1.050

Replacement Cost New (RCN)
Adjusted Cost ‐ Square Foot 126.37
Extended Base Cost $845,415   $845,415
Miscellaneous                           ‐ $             130,674                 130,674
Site Improvements                          ‐                 146,653                 146,653
Subtotal $845,415 $277,327 $1,122,742
Soft Costs & Entreprenurial Profit 5.0% $42,271 5.0%                   13,866                   56,138
RCN $887,686 $             291,193 $1,178,879
RCN Rounded $890,000 $290,000 $1,180,000
RCN per Square Foot $133.03 $176.38

Depreciation

Year Built 1993
Physical Age 20
Effective Age 14
Economic Life (Section 97, Page 13) 40
Remaining Useful Life 26  
Physical Depreciation (Age/Life) 35.0% $311,500 $125,023                 436,523
RCN less Physical Depreciation $578,500 $164,977 $743,477
Functional Obsolescence 0.0% $0 $0                          ‐
less Functional Obsolescence $578,500 $164,977 $743,477
Economic Obsolescence 0.0% $0 $0                          ‐
less Economic Obsolescence $578,500 $164,977 $743,477

Depreciated Cost $580,000 $160,000 $740,000


per Square Foot $86.70 $110.61

CITRUS COUNTY HOSPITAL BOARD


Parcel No. 16 ‐ CMHF Rehabilitation Center
Miscellaneous Items Pricing Support

PRELIMINARY DRAFT ‐ SUBJECT TO CHANGE

Current Cost Local Total 


Description Quantity Unit Unit Cost Source
Multiplier Multiplier Cost
Canopies 900 sf $57.75 1.07 1.00 $              55,613 MVS ‐ Section 15 Page 37
Pool 600 $         116.92 1.07 1.00                 75,061 MVS ‐ Section 66 Page 7
130,674
5%
6,534
Replacement Cost New $      137,208

CITRUS COUNTY HOSPITAL BOARD


Depreciation %    35.0%
Depreciation   $              48,023
RESTRICTED USE APPRAISAL REPORT

DRAFT
Page 87
Parcel No. 16 ‐ CMHF Rehabilitation Center
Land Improvements Cost Development

Crystal River, Florida
As of February 6, 2013

PRELIMINARY DRAFT ‐ SUBJECT TO CHANGE
Multipliers

MVS  Unit Base  Unit Replacement  Replacement 


Type Description Page Quantity Unit Current Local
Section Cost Cost, New Cost New

Paving Good quality asphalt parking lot(est) 66 3 13,800 SF $3.50 1.04 1.00 $3.64 $50,232


Paving Good quality concrete parking lot(est) 66 3 900 SF $4.50 1.04 1.00 $4.68 $4,212
Wall Retaining wall 51 3 600 $10.80 1.04 1.00 $11.23 $6,739

CITRUS COUNTY HOSPITAL BOARD


Landscaping Landscaping 66 8 16,500 SF $4.98 1.04 1.00 $5.18                 85,470
RESTRICTED USE APPRAISAL REPORT

Total Replacement Cost New (CRN) $146,653
5%
                  7,333
$153,986
CRN Rounded $154,000

Effective Age 4
Economic Life (Section 97, Page 19) 8

DRAFT
Remaining Useful Life 4
Physical Depreciation (Age/Life) 50.0% $77,000
RCN less Physical Depreciation $77,000
Functional Obsolescence 0.0% $0
less Functional Obsolescence $77,000
Economic Obsolescence 0.0% $0
less Economic Obsolescence $77,000
Depreciated Cost $80,000
Page 88
RESTRICTED USE APPRAISAL REPORT Page 89

Parcel No. 16 - CMHF Rehabilitation Center


6043 West Nordling Loop
Crystal River, Citrus County, Florida
 

 
COST APPROACH CONCLUSION

TOTAL REPLACEMENT COST NEW $1,180,000

Less Accrued Depreciation:


Physical Curable $0
Physical Incurable 436,523
Total Physical $436,523
Functional Curable Obsolescence $0
Functional Incurable Obsolescence 0
Total Functional Obsolescence 0

DRAFT
External Obsolescence 0

TOTAL ACCRUED DEPRECIATION $436,523

LAND IMPROVEMENTS & BUILDINGS $743,477

PLUS LAND VALUE $60,000

ROUNDED RCNLD $800,000

CITRUS COUNTY HOSPITAL BOARD


RESTRICTED USE APPRAISAL REPORT Page 90

Parcel No. 16 ‐ CMHF Rehabilitation Center
Direct Capitalization
Gross Building Area 6,690
Market Rent $ 14.00

Potential Gross Income $                   93,660
Less Vacancy 5% 4,683
Effective Gross Income $ 88,977
Less Management 3% $ 2,669
Total Operating Expenses $ 2,669
Less Structural Reserves $ 0.50 3,345
Net Operating Income $ 82,963
Indicated Cap. Rate 9.50%

Indicated Value $ 873,291
Less PV of Capital Expenditures -
Final Indicated Value
Rounded DRAFT                    873,291
$                900,000

CITRUS COUNTY HOSPITAL BOARD


RESTRICTED USE APPRAISAL REPORT Page 91

SUMMARY OF SALIENT FACTS – PARCEL NO. 21

Date of Appraisal: February 5, 2013

Property Name/Location: CMHF-Annex / Wound Care & Hyperbaric

DRAFT
Center
131 South Citrus Avenue
Inverness, Citrus County, Florida

Client: Citrus County Hospital Board

Land Size: 170,077 square feet or 3.904 acres

Improvement Size: 66,443 gross square feet in three buildings

Subject Property Description:


Use: Medical Office Building, Wound Care and
Hyperbaric Center

Fair Market Value: $9,000,000

Range of Fair Market Rent: $13.00 to $15.00 per square foot of gross
building area basis

Implicit in this rental rate estimate is a NNN basis, with the tenant being responsible for
all operating costs. The lease term would be a minimum of five years, without
concessions, on an “as is” basis. The rate also does not include an annual CPI
increase in the base rate.

CITRUS COUNTY HOSPITAL BOARD


RESTRICTED USE APPRAISAL REPORT Page 92

PROPERTY DESCRIPTION – PARCEL NO. 21


The subject property consists of an improved 3.904 acres (gross) land parcel that is
located at 131 South Citrus Avenue, Inverness, Citrus County, Florida. The property is
located at the southwest corner of West Main Street and South Osceola Avenue.

Specifically, the subject site consists of the city block bounded by West Main Street on
the north, West Grace Street on the south, South Citrus Avenue on the west and South
Osceola Avenue on the east, with exception of the 0.545 acre corner tract at the
southeast corner of West Main Street and South Citrus Avenue at the northwest
quadrant of the block. The site has the following frontages; approximately 160 feet of
frontage along the south side of West Main Street; approximately 597 feet of frontage
along the west side of South Osceola Avenue; approximately 325 feet of frontage along
the north side of West Grace Street; and approximately 450 feet of frontage along the
east side of South Citrus Avenue. The site contains approximately 170,077 square
feet, or 3.904 acres, according to the Citrus County Property Appraiser and is irregular
in shape. There are the following curb cuts to the site: two curb cuts along the west
side of South Osceola Avenue; one curb cut along the north side of West Grace Street;
and two curb cuts along the east side of South Citrus Avenue. The site is generally
level and at street grade. According to Flood Insurance Rate Map number

DRAFT
1203480002B, dated May 17, 1982, the subject property is not within a designated flood
zone. The subject site is zoned P/SP GU (Government Use) and RO / RP (Residential
Professional).

The subject property is improved with a three-story medical office building (Annex /
Wound Care and Hyperbaric Center) at the northeast corner of South Citrus Avenue
and West Grace Street, the Office / Auditorium at the northwest corner of West Grace
Street and South Osceola Avenue and the former church building (currently used as
storage) at the southwest corner of West Main Street and South Osceola Avenue, as
well as associated site improvements and surface parking. It is noted that the existing
church building is suffering from advanced depreciation and is currently used for
storage and maintenance purposes. Therefore, it is considered to be an interim use
and does not add contributory value to the property as a whole.

According to the Citrus County Property Appraiser, the improvements comprise a gross
building area of 66,443 square feet in the three buildings (excludes church and
maintenance facilities).

Building Area (SF)


Annex / Wound Care and Hyperbaric Center 55,512
Office / Auditorium – East half 5,739
Office / Auditorium – West half 5,192
Total 66,443

CITRUS COUNTY HOSPITAL BOARD


RESTRICTED USE APPRAISAL REPORT Page 93

The Annex / Wound Care and Hyperbaric Center building at the northwest corner of
South Citrus Avenue and West Grace Street has a steel-frame construction with stucco
veneer and flat roof with metal pitched roofs for accent; the remaining buildings are built
with concrete block and stucco veneer with pitched roofs and composite shingles.

The Annex / Wound Care and Hyperbaric Center is a three-story structure. On the first
floor are the conference room, diagnostic imaging center, laboratory services and
cardiopulmonary rehabilitation. On the second floor are medical offices; on the third
floor are medical and business offices as well as the wound care and hyperbaric center.

The interior finish-out includes: commercial-grade carpeting, faux-wood flooring or 1’ by


1’ floor tiles; painted drywall partitioning; 2’ by 2’ ceiling tiles; and recessed fluorescent
lighting.

The Office/Auditorium facility at the northwest corner of West Grace Street and South
Osceola Avenue is a former church facility which includes an auditorium that functions
as meeting space. The office portion includes a basement for additional space.

The former church building at the southwest corner of West Main Street and South
Osceola Avenue is currently utilized as storage space and for campus maintenance
operations.

DRAFT
The Annex / Wound Care and Hyperbaric Center is sprinklered; the remaining buildings
are not.

Land improvements consist of landscaping and asphalt surface parking.

According to the Citrus County Property Appraiser, the assessment for 2012 is as
follows. The property is tax exempt.

Market/Just Assessed Taxable


Alt Key 2907908 $9,444,686 $9,444,686 $0

The improvements chronological age and effective age are presented as follows. The
former church building is excluded from this analysis.

Chronological Effective
Building Year Built Age (Yrs.) Age (Yrs.)
Annex / Wound Care and
Hyperbaric Center 2001 12 12
Office / Auditorium – East half 1968 45 25
Office / Auditorium – West half 1970 43 25

CITRUS COUNTY HOSPITAL BOARD


RESTRICTED USE APPRAISAL REPORT Page 94

With regard to the Annex / Wound Care and Hyperbaric Center, the subject’s physical
adaptability conforms to that of its competitors. Overall, the Annex / Wound Care and
Hyperbaric Center is considered to be of average quality construction. The Annex /
Wound Care and Hyperbaric Center subject improvements are in good condition, which
is consistent with the chronological age of the structure and the level of maintenance.
The project amenities are consistent with similar uses in the local market. The design
and layout appear to be conducive to current operations.

With regard to the Office / Auditorium, the subject’s physical adaptability conforms to
that of its competitors. Overall, the subject premises are considered to be of average
quality construction. The subject improvements are in average condition, which is
consistent with the chronological age of the structure and the level of maintenance. The
project amenities are consistent with medical office and general meeting uses in the
local market. The design and layout appear to be conducive to current operations.

With regard to the former church facilities, the subject is used as storage. It is reported
the conversion from storage to office, meeting or religious space is cost prohibitive.
Overall, the subject premises are considered to be of average quality construction. The
subject improvements are in poor condition, which is consistent with the current use and
the level of maintenance.

HIGHEST AND BEST USE ANALYSIS DRAFT


As previously discussed, in the analysis of Highest and Best Use of the land as though
vacant, it is assumed that the land is vacant or can be made vacant by removal of
existing improvements. The analysis of Highest and Best Use of the land as improved
considers the alternative uses of an improved property.

It is VMG Health’s opinion that the Highest and Best Use of the subject site, as if
vacant, would be for future commercial development as permitted by zoning as demand
warrants.

In the case of the subject property, the existing improvements are functional and
constitute a substantial improvement to the subject site. The cost of demolishing the
existing improvements would far exceed any increase in revenue that could be
generated from an alternative use at this time.

The existing improvements suffer from no apparent form or physical, functional or


external obsolescence. In all respects, the improvements are assumed functional and
conform well to the neighborhood.

CITRUS COUNTY HOSPITAL BOARD


RESTRICTED USE APPRAISAL REPORT Page 95

CONCLUSION
The subject site is improved with structures that comprise a gross building area of
66,443 square feet. The building is used as a medical office building and as an office
and auditorium. There are also church buildings used as storage, which are not
included in gross building area.

It is reported the conversion from storage to office, meeting or religious space is cost
prohibitive. The subject improvements are in poor condition, which is consistent with
the current use and the level of maintenance. For purpose of this analysis, the former
church is considered an interim use, to be razed as demand warrants.
The interim use value offsets the demolition costs; therefore the buildings do not add
value to the site.

The adjusted gross building area is 66,443 square feet.

The improvements (medical office and office / auditorium) contribute significantly to the
value of the subject site and provide for both a return to the land and improvements.
Therefore, it is our opinion that the Highest and Best Use as Improved of the subject
property is for the continued use as a medical office building and office / auditorium
building.

VALUATION
DRAFT
In earlier sections of this Summary Appraisal Report, the three basic approaches were
discussed: the Cost Approach; the Sales Comparison Approach; and the Income
Approach.

The appraiser analyzed all market data and considered all three traditional approaches
to value.

CITRUS COUNTY HOSPITAL BOARD


RESTRICTED USE APPRAISAL REPORT Page 96

VALUE RECONCILIATION

VMG Health reconciled the indicators analyzed to determine an estimate of the Fair
Market Value for the subject premises. Based upon the analysis of data obtained, we
have formed the opinion that the Fair Market Value of the Fee Simple Estate in the
subject property, subject to the definitions, certifications, and limiting conditions set forth
in the attached Restricted Use Appraisal Report, as of February 6, 2013, is:

NINE MILLION DOLLARS


$9,000,000

The estimated marketing period associated with this value estimate is twelve months,
while the estimated exposure period is also twelve months.

The range of fair market rent is calculated as follows:

 The range of fair market rent for the medical office building on a per net rentable
area is $12.00 to $14.00.
 The gross to Net Rentable factor for building is estimated by the appraiser to be
92% with the atrium. The adjusted FMR per square foot of gross building area is

DRAFT
$11.00 to $13.00.
 The imaging/diagnostic area on the first floor is approximately 18% of the
building gross building area. The incremental cost is $86.76 per square foot for
that particular space ($249.02 less $162.26) or $17.35 allocated over a five-year
term. The additional cost for the building is $3.12 ($17.35 times 18%), or $3.00
per square foot on a gross basis, rounded. The adjusted range of fair market
rent is $14.00 to $16.00 per square foot on a gross building area basis.

The range of the Fair Market Rent, including both buildings is calculated as follows, on a
gross building area basis.

Building SF (Gross) % Range of FMR Adjusted $


Annex 55,512 83.5% $14.00 to $11.69 to $13.36
$16.00
Office / Auditorium 10,931 16.5% $7.00 to $9.00 $1.16 to $1.49
Total 66,443 100.0% $12.85 to $14.85
Rounded $13.00 to $15.00

CITRUS COUNTY HOSPITAL BOARD


RESTRICTED USE APPRAISAL REPORT Page 97

The range of the Fair Market Rent, including both buildings, is $13.00 to $15.00 per
square foot of gross building area, on a NNN basis, without concessions, on an “as is”
basis. The lease term is a minimum of five years. The annual rental rate does not
include an annual CPI increase.

Our report and analysis are subject to the attached statement of Assumptions and
Limiting Conditions. Pertinent valuation details are located on the following pages.
Additional market intelligence is maintained in our files.

DRAFT

CITRUS COUNTY HOSPITAL BOARD


RESTRICTED USE APPRAISAL REPORT Page 98

Parcel No. 21 ‐ Annex / Wound Care & Hyperbaric Center
Building Cost Development

PRELIMINARY DRAFT ‐ SUBJECT TO CHANGE
Inverness, Citrus County, Florida
As of February 6, 2013

4 ‐ Miscellaneous and 
Building Number & Name 1 ‐ Annex / Wound Care & Hyperb2 ‐ Office 3 ‐ Auditorium Land Improvements TOTAL

Annex / Wound 
Care & 
Hyperbaric 
Occupancy Number & Name 431/341 Center 341 Office 431 Auditorium
Section Number & Page 15/15 25/22 15 22 15 25
Construction Class & Quality A Average C Average A Good
Gross Building Area (Square Feet) 55,512 5,739 5,192                   66,443
Gross Perimeter (Linear Feet) 558 390 516
Number of Floors & Height per Story (Feet) 3 12 1 12 1 12
  249.02*.1+162.26*.9 123.8*0.61+109.96*0.39 123.8*0.6+0.4*69.93
Base Cost ‐ Square Foot $177.68 $84.15 $102.88

Refinements ‐ Square Foot
Heating, cooling, ventilating $0.00 $0.00 $0.00
Elevator $0.00 ‐$1.28 ‐$2.10
Sprinkler System $3.00 $0.00 $0.00
Miscellaneous $0.00 $0.00 $0.00
$180.68 $82.86 $100.78
Refinements ‐ Multipliers
Number of Stories 1.000 1.000 1.000
Height per Story 1.000 1.000 1.000
Floor Area & Perimeter 0.924 1.022 0.957
Current Cost Multiplier 1.050 1.070 1.070
Local Cost Multiplier 0.990 1.000 1.000
Net Multiplier 0.960 1.094 1.024

Replacement Cost New (RCN)

DRAFT
Adjusted Cost ‐ Square Foot 173.46 90.65 103.2
Extended Base Cost $9,629,112 $520,240 $535,814   $10,685,166
Miscellaneous                           ‐                          ‐                          ‐ $             146,356                 146,356
Site Improvements                          ‐                          ‐                          ‐                 455,935                 455,935
Subtotal $9,629,112 $520,240 $535,814 $602,291 $11,287,457
Soft Costs & Entreprenurial Profit 5.0% $481,456 5.0% $26,012 5.0% $26,791 5.0%                   30,115                 564,374
RCN $10,110,568 $546,252 $562,605 $             632,406 $11,851,831
RCN Rounded $10,110,000 $550,000 $560,000 $630,000 $11,850,000
RCN per Square Foot $182.12 $95.84 $107.86 $178.35

Depreciation

Year Built 2001 1968 1970


Physical Age 12 45 42
Effective Age 12 25 25
Economic Life (Section 97, Page 13) 45 40 40
Remaining Useful Life 33 15 15  
Physical Depreciation (Age/Life) 26.7% $2,696,000 62.5% $343,750 62.5% $350,000 $286,427             3,676,177
RCN less Physical Depreciation $7,414,000 $206,250 $210,000 $343,573 $8,173,823
Functional Obsolescence 0.0% $0 0.0% $0 0.0% $0 $0                        ‐
less Functional Obsolescence $7,414,000 $206,250 $210,000 $343,573 $8,173,823
Economic Obsolescence 0.0% $0 0.0% $0 0.0% $0 $0                        ‐
less Economic Obsolescence $7,414,000 $206,250 $210,000 $343,573 $8,173,823

Depreciated Cost $7,410,000 $210,000 $210,000 $340,000 $8,170,000


per Square Foot $133.48 $36.59 $40.45 $122.96

CITRUS COUNTY HOSPITAL BOARD


Parcel No. 21 ‐ Annex / Wound Care & Hyperbaric Center
Miscellaneous Items Pricing Support

PRELIMINARY DRAFT ‐ SUBJECT TO CHANGE

Current Cost Local Total 


Description Quantity Unit Unit Cost Source
Multiplier Multiplier Cost
Canopies 2,438 sf $57.75 1.05 0.99 $            146,356 MVS ‐ Section 15 Page 37
5%
7,318
Replacement Cost New $      153,674

Depreciation %    30.2%
Depreciation   $              46,427

CITRUS COUNTY HOSPITAL BOARD


RESTRICTED USE APPRAISAL REPORT

DRAFT
Page 99
Parcel No. 21 ‐ Annex / Wound Care & Hyperbaric Center
Land Improvements Cost Development

Inverness, Florida
As of February 6, 2013

PRELIMINARY DRAFT ‐ SUBJECT TO CHANGE
Multipliers

MVS  Unit Base  Unit Replacement  Replacement 


Type Description Page Quantity Unit Current Local
Section Cost Cost, New Cost New

Paving Good quality asphalt parking lot(est) 66 3 86,580 SF $3.50 1.04 1.00 $3.64 $315,151


Paving Good quality concrete parking lot(est) 66 3 2,550 SF $4.50 1.04 1.00 $4.68 $11,934
Landscaping Landscaping 66 8 38,500 SF $1.96 1.04 1.00 $2.04                 78,540
Lighting Lighting 66 1 15 Units $3,225 1.04 1.00 $3,354.00                 50,310

CITRUS COUNTY HOSPITAL BOARD


RESTRICTED USE APPRAISAL REPORT

Total Replacement Cost New (CRN) $455,935
5%
                22,797
$478,732
CRN Rounded $480,000

Effective Age 4
Economic Life (Section 97, Page 19) 8

DRAFT
Remaining Useful Life 4
Physical Depreciation (Age/Life) 50.0% $240,000
RCN less Physical Depreciation $240,000
Functional Obsolescence 0.0% $0
less Functional Obsolescence $240,000
Economic Obsolescence 0.0% $0
less Economic Obsolescence $240,000
Depreciated Cost $240,000
Page 100
RESTRICTED USE APPRAISAL REPORT Page 101

Parcel No. 21 - Annex / Wound Care & Hyperbaric Center


131 South Citrus Avenue
Inverness, Citrus County, Florida
 

 
COST APPROACH CONCLUSION

TOTAL REPLACEMENT COST NEW $11,850,000

Less Accrued Depreciation:


Physical Curable $0
Physical Incurable 3,676,177
Total Physical $3,676,177
Functional Curable Obsolescence $0
Functional Incurable Obsolescence 0
Total Functional Obsolescence 0

DRAFT
External Obsolescence 0

TOTAL ACCRUED DEPRECIATION $3,676,177

LAND IMPROVEMENTS & BUILDINGS $8,173,823

PLUS LAND VALUE $770,000

ROUNDED RCNLD $8,900,000

CITRUS COUNTY HOSPITAL BOARD


RESTRICTED USE APPRAISAL REPORT Page 102

Parcel No. 21 ‐ Annex / Wound Care & Hyperbaric Center
Direct Capitalization
Gross Building Area 66,443
Market Rent $14.00

Potential Gross Income $                930,202
Less Vacancy 5% 46,510
Effective Gross Income $ 883,692
Less Management 3% $ 26,511
Total Operating Expenses $ 26,511
Less Structural Reserves $ 0.50 33,222
Net Operating Income $ 823,960
Indicated Cap. Rate 9.00%

Indicated Value $ 9,155,107
Add Excess Land 120,000

DRAFT
Final Indicated Value                9,275,107
Rounded $             9,300,000
Rounded, PSF $                   139.97

CITRUS COUNTY HOSPITAL BOARD


RESTRICTED USE APPRAISAL REPORT Page 103

SUMMARY OF SALIENT FACTS – PARCEL NO. 22

Date of Appraisal: February 6, 2013

Property Name/Location: CMHF (Parking / Other Building)


108 South Seminole Avenue

Client:
DRAFT
Inverness, Citrus County, Florida

Citrus County Hospital Board

Land Size: 20,692 square feet or 0.475 acre

Improvement Size: 1,584 gross square feet (no contributory


value)

Owner of Record: Citrus Memorial Health Foundation, Inc.

Subject Property Description:


Use: Medical Office Building

Fair Market Value: $100,000

CITRUS COUNTY HOSPITAL BOARD


RESTRICTED USE APPRAISAL REPORT Page 104

PROPERTY DESCRIPTION – PARCEL NO. 22


The subject property consists of an improved 0.475 acre (gross) land parcel that is
located at 108 South Seminole Avenue, Inverness, Citrus County, Florida.

Specifically, the subject site is located along the west side of South Seminole Avenue,
approximately 105 feet south of West Main Street. There is an approximately 140 feet
of frontage along the west side of South Seminole Avenue. The site contains
approximately 20,692 square feet, or 0.475 acre, according to the Citrus County
Property Appraiser and is irregular in shape. The site has a single curb cut into the tract
along South Seminole Avenue. The site is generally level and at street grade.
According to Flood Insurance Rate Map number 1203480002B, dated May 17, 1982,
the subject property is not within a designated flood zone. The subject site is zoned
CBD (Central Business District) and RO / RP (Residential Professional). The subject
property is improved with a one-story concrete block structure that is currently vacant.
According to the Citrus County Property Appraiser, the improvements comprise a gross
building area of 1,584 square feet; however, visual inspection indicates the building is
smaller. The existing improvements do not contribute to the value of the site. Land
improvements consist of asphalt surface parking, which are minimal, and do not
contribute to the value of the site.

DRAFT
According to the Citrus County Property Appraiser, the assessment for 2012 is as
follows:

Market/Just Assessed Taxable


Alt Key 2910607 $164,073 $164,073 $0

HIGHEST AND BEST USE ANALYSIS


As previously discussed, in the analysis of Highest and Best Use of the land as though
vacant, it is assumed that the land is vacant or can be made vacant by removal of
existing improvements. The analysis of Highest and Best Use of the land as improved
considers the alternative uses of an improved property.

CONCLUSION
It is VMG Health’s opinion that the Highest and Best Use of the subject site, as if
vacant, would be for future commercial development as permitted by zoning as demand
warrants.

CITRUS COUNTY HOSPITAL BOARD


RESTRICTED USE APPRAISAL REPORT Page 105

VALUATION
In earlier sections of this Summary Appraisal Report, the three basic approaches were
discussed: the Cost Approach; the Sales Comparison Approach; and the Income
Approach.

The appraiser analyzed all market data and considered all three traditional approaches
to value. However, as the subject property essentially represents land value, only the
Sales Comparison Approach to value was utilized.

VALUE RECONCILIATION

VMG Health reconciled the indicators analyzed to determine an estimate of the Fair
Market Value for the subject property. Based upon the analysis of data obtained, we
have formed the opinion that the Fair Market Value of the Fee Simple Estate in the
subject property, subject to the definitions, certifications, and limiting conditions set forth
in the attached Restricted Use Appraisal Report, as of February 6, 2013, is:

ONE HUNDRED THOUSAND DOLLARS


$100,000

DRAFT
The estimated marketing period associated with this value estimate is twelve months,
while the estimated exposure period is also twelve months.

CITRUS COUNTY HOSPITAL BOARD


RESTRICTED USE APPRAISAL REPORT Page 106

SUMMARY OF SALIENT FACTS – PARCEL NO. 25

Date of Appraisal: February 6, 2013

Property Name/Location: CMHF (Parking / Other Building)


206 South Seminole Avenue

Client:
DRAFT
Inverness, Citrus County, Florida

Citrus County Hospital Board

Land Size: 81,250 square feet or 1.865 acres

Improvement Size: 933 gross square feet (no contributory


value)

Owner of Record: Citrus Memorial Health Foundation, Inc.

Subject Property Description:


Use: Medical Office Building

Fair Market Value: $420,000

CITRUS COUNTY HOSPITAL BOARD


RESTRICTED USE APPRAISAL REPORT Page 107

PROPERTY DESCRIPTION – PARCEL NO. 25


The subject property consists of an improved 1.865 acres (gross) land parcel that is
located at 206 South Seminole Avenue, Inverness, Citrus County, Florida.

Specifically, the subje/ct site is the northern portion of the city block bounded by West
Grace Street on the north, South Osceola Avenue on the west, South Seminole Avenue
on the east and West Highland Boulevard on the south.

There is an estimated approximately 325 feet of frontage along the south side of West
Grace Street, approximately 200 feet along the east side of South Osceola Avenue and
approximately 295 feet along the west side of South Seminole Avenue. The site
contains approximately 81,250 square feet, or 1.865 acres, according to the Citrus
County Property Appraiser and is irregular in shape. There are two curb cuts into the
tract along the south side of West Grace Street and one along the west side of South
Pine Avenue. The site is generally level and at street grade.

According to Flood Insurance Rate Map number 1203480002B, dated May 17, 1982,
the subject property is not within a designated flood zone.

The subject site is zoned RO / RP (Residential Professional).

DRAFT
According to the Citrus County Property Appraiser, the assessment for 2012 is as
follows:

Market/Just Assessed Taxable


Alt Key 2907916 $494,448 $494,448 $0

The subject property is improved with a one-story residential structure and surface
parking. The improvements contain a gross building area of 933 square feet according
to the Citrus County Property Appraiser, were constructed in 1968 and contribute
minimal value to the site, other than as an interim use for residential occupancy for the
short term.

Land improvements consist of landscaping and asphalt surface parking (approximately


30,000 square feet, based on an estimate by the appraiser). The land improvements
contribute value to the site.

HIGHEST AND BEST USE ANALYSIS


As previously discussed, in the analysis of Highest and Best Use of the land as though
vacant, it is assumed that the land is vacant or can be made vacant by removal of

CITRUS COUNTY HOSPITAL BOARD


RESTRICTED USE APPRAISAL REPORT Page 108

existing improvements. The analysis of Highest and Best Use of the land as improved
considers the alternative uses of an improved property.

CONCLUSION
It is VMG Health’s opinion that the Highest and Best Use of the subject site, as if
vacant, would be for future commercial development as permitted by zoning as demand
warrants

VALUATION
In earlier sections of this Summary Appraisal Report, the three basic approaches were
discussed: the Cost Approach; the Sales Comparison Approach; and the Income
Approach.

The appraiser analyzed all market data and considered all three traditional approaches
to value. As this property essentially represents land value, the Sales Comparison
Approach to value was utilized. The contributory value of the site improvements was
derived by application of the Cost Approach.

VALUE RECONCILIATION

DRAFT
VMG Health reconciled the indicators analyzed to determine an estimate of the Fair
Market Value for the subject premises. Based upon the analysis of data obtained, we
have formed the opinion that the Fair Market Value of the Fee Simple Estate in the
subject property, subject to the definitions, certifications, and limiting conditions set forth
in the attached Restricted Use Appraisal Report, as of February 6, 2013, is:

FOUR HUNDRED TWENTY THOUSAND DOLLARS


$420,000

The estimated marketing period associated with this value estimate is twelve months,
while the estimated exposure period is also twelve months.

Our report and analysis are subject to the attached statement of Assumptions and
Limiting Conditions. Pertinent valuation details are located on the following pages.
Additional market intelligence is maintained in our files.

CITRUS COUNTY HOSPITAL BOARD


RESTRICTED USE APPRAISAL REPORT Page 109

ASSUMPTIONS & LIMITING CONDITIONS


This valuation by Value Management Group, LLC d/b/a VMG Health (“VMG”) is subject to and
governed by the following Assumptions and Limiting Conditions:

1. Any legal description reported herein is assumed to be accurate. Any sketches, surveys,
plats, photographs, drawings or other exhibits are included only to assist the intended
user to better understand and visualize the subject property and assume no
responsibility in connection with such matters.
2. The appraiser(s) have not conducted any engineering or architectural surveys in
connection with this appraisal assignment. Information reported pertaining to
dimensions, sizes, and areas is either based on measurements taken by the
appraiser(s) or the staff or was obtained or taken from referenced sources and is
considered reliable. No responsibility is assumed for the costs or preparation or for
arranging geotechnical engineering, architectural, or other types of studies, surveys, or
inspections that require the expertise of a qualified professional.
3. No responsibility is assumed for matters legal in nature. Title is assumed to be good and
marketable and in fee simple unless discussed otherwise in the report. The property is
considered to be free and clear of existing liens, easements, restrictions, and
encumbrances, except as noted.
4. Unless otherwise noted herein, it is assumed there are no encroachments or violations

DRAFT
of any zoning or other regulations affecting the subject property and the utilization of the
land and improvements is within the boundaries or property lines of the property
described.
5. VMG assumes there are no private deed restrictions affecting the property which would
limit the use of the subject property in any way.
6. It is assumed the subject property is not adversely affected by the potential of floods.
7. It is assumed all water and sewer facilities (existing and proposed) are or will be in good
working order and are or will be of sufficient size to adequately serve the existing and/or
any proposed buildings.
8. Unless otherwise noted within the report, the depiction of the physical condition of the
improvements described herein is based on as on-site visual observation. No liability is
assumed for the soundness of structural members since no engineering tests were
conducted. No liability is assumed for the condition of mechanical equipment, plumbing
or electrical components, as complete tests were not made. No responsibility is
assumed for hidden, unapparent or masked property conditions or characteristics that
were not clearly apparent during our on-site observation.
9. If building improvements are present on the site, no significant evidence of termite
damage or infestation was observed during our on-site visual observation, unless so
noted on the report. No termite inspection report was available, unless so noted in the
report. No responsibility is assumed for hidden damages or infestation.
10. Any proposed or incomplete improvements included in this report are assumed to be
satisfactory completed in a workmanlike manner or will be thus completed within a
reasonable length of time according to plans and specifications.

CITRUS COUNTY HOSPITAL BOARD


RESTRICTED USE APPRAISAL REPORT Page 110

11. No responsibility is assumed for hidden defects of for conformity to specific


governmental requirements, such as fire, building, safety, earthquake, or occupancy
codes, except where specific professional or governmental inspections have been
completed and reported in the appraisal report.
12. The property is assumed to be under financially sound, competent and aggressive
ownership.
13. The appraiser(s) assume no responsibility for any changes in economic or physical
conditions which occur following the effective date of this report that would influence or
potentially affect the analyses, opinions, or conclusions in the report. Any subsequent
changes are beyond the scope of the report.
14. The value estimates reported herein apply to the entire property. Any proration or
division of the total into fractional interests will invalidate the value estimates, unless
such a proration or division of interests is set forth in the report.
15. Any division of the land and improvement values estimated herein is applicable only
under the program of utilization shown. These separate valuations are invalidated by any
other application.
16. Unless otherwise noted in the report, only the real property is considered, so no
consideration is given to the value of personal property or equipment located on the
premises or the costs or moving or relocating such personal property or equipment.
17. Unless otherwise stated, it is assumed ownership includes subsurface oil, gas, and other
mineral rights. No opinion is expressed as to whether the property is subject to surface

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entry for their exploration or removal. The contributing value, if any, of these rights has
not been separately identified.
18. Any projections of income and expenses, including the reversion at time of resale, are
not predictions of the future. Rather, they are our best estimate of current market
thinking of what future trends will be. No warranty or representation is made that these
projections will materialize. The real estate market is constantly fluctuating and
changing. It is not the task of the appraiser(s) to estimate the conditions of a future real
estate market, but rather to reflect what the investment community envisions for the
future in terms of expectations of growth in rental rates, expenses, and supply and
demand.
19. Unless subsoil opinions based upon engineering core borings were furnished, it is
assumed there are no subsoil defects present, which would impair development of the
land to its maximum permitted use or would render it more or less valuable. No
responsibility is assumed for such conditions or for engineering which may be required
to discover them.
20. VMG Health representatives are not experts in determining the presence or absence of
hazardous substances, defined as all hazardous or toxic materials, wastes, pollutants or
contaminants (including, but not limited to, asbestos, PCB, UFFI, or other raw materials
or chemicals) used in construction or otherwise present on the property. We assume no
responsibility for the studies or analyses which would be required to determine the
presence or absence of such substances or for loss as a result of the presence of such
substances. Appraiser(s) are not qualified to detect such substances. The client is urged
to retain an expert in this field.

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RESTRICTED USE APPRAISAL REPORT Page 111

21. VMG is not experts in determining the habitat for protected or endangered species that
may be present on the property. We assume no responsibility for the studies or analyses
which would be required to determine the presence or absence of such species or for
loss as a result of the presence of such species.
22. No environmental impact studies were either requested or made in conjunction with this
analysis. The appraiser(s) hereby reserve the right to alter, amend, revise, or rescind
any of the value opinions based upon any subsequent environmental impact studies,
research and investigation.
23. The appraisal is based on the premise that there is full compliance with all applicable
federal, state, and local environmental regulations and laws unless otherwise stated in
the report; further that all applicable zoning building, and use regulations and restrictions
of all types have been complied with unless otherwise stated in the report; further, it is
assumed that all required licenses, consents, permits, or other legislative or
administrative authority, local, state federal and/ or private entity or organization have
been or can be obtained or renewed for any use considered in the value estimate.
24. Neither all nor any part of the contents of this report or copy thereof shall be conveyed to
the public through advertising, public relations, news, sales, or any other media, without
the prior written consent and approval of the appraiser(s). This limitation pertains to any
valuation conclusions, the identity of the analyst or the firm and any reference to the
professional organization of which the appraiser(s) are affiliated or to the designations
thereof.

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25. Although the appraiser(s) have made, insofar as is practical, every effort to verify as
factual and true information and data set forth in this report, no responsibility is assumed
for the accuracy of any information furnished the appraiser(s) either by the client or
others. If for any reason, future investigations should prove any data to be in substantial
variance with that presented in this report, the appraiser(s) reserve the right to alter or
change any or all analyses, opinions, or conclusions and/or estimates of value.
26. If this report has been prepared in a so-called “public non-disclosure” state, real estate
sales prices and other data, such as rents, prices, and financing, are not a matter of
public record. If this is such a “non-disclosure” state, although extensive effort has been
expended to verify pertinent data with buyers, sellers, brokers, lenders, lessors, lessees
and other sources considered reliable, it has not always been possible to independently
verify all significant facts. In these instances, the appraiser(s) may have relied on
verification obtained and reported and on interviews with market participants. It is
suggested the client consider independent verification as a prerequisite to any
transaction involving sale, lease, or other significant commitment of funds to the subject
property.
27. This report is null and void if used in any connection with a real estate syndicate or
syndication, defined as a general or limited partnership, joint venture, unincorporated
association, or similar organization formed for or engaged in investment or gain from an
interest in real property, including but not limited to a sale, exchange, trade,
development, or lease or property on behalf of others or which is required to be
registered with the U.S. Securities and Exchange Commission or any Federal or State
Agency which regulates investments made as a public offering.

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RESTRICTED USE APPRAISAL REPORT Page 112

28. The American Disabilities Act of 1990 (ADA) sets strict and specific standards for
handicapped access to and within most commercial and industrial buildings.
Determination of compliance with these standards is beyond appraisal expertise and,
therefore, has not been attempted by the appraiser(s). For purposes of this appraisal, we
are assuming the building is in compliance; however, we recommend an architectural
inspection of the building to determine compliance or requirements for compliance. We
assume no responsibility for the cost of such determination and our appraisal is subject
to revision if the building is not in compliance.
29. This appraisal report has been prepared for the exclusive benefit of the client. It may not
be used or relied upon by any other party. Any party who uses or relies upon any
information in this report, without the preparer’s written consent, does so at their own
risk.
30. The client agrees to indemnify and hold harmless VMG and its affiliates, partners,
agents, and employees from and against any losses, claims, damages, or liabilities,
which may be asserted by any person or entity who may receive our report, except to
the extent of any losses, claims, damages or liabilities (or actions in respect thereof)
arising be reason of the gross negligence or willful misconduct of VMG in preparing the
report and will reimburse VMG for all expenses (including counsel fees) as they are
incurred by VMG in connection with investigating, preparing, or defending any such
action or claim.
31. In any circumstance in which the foregoing indemnification is held by a court to be

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unavailable to VMG, the client and VMG shall contribute to any aggregate losses,
claims, damages or liabilities (including the related fees and expenses) to which the
client and VMG may be subject in such proportion that VMG shall be responsible only for
that proportion represented by the percentage that the fees paid to VMG for the portion
of its services or work product giving rise to the liability bears to the value of the
transaction giving rise to such liability.
32. VMG has completed an on-site visual observation of the subject property which
consisted of less than inspecting 100% of the interior and exterior of the improvements.
Accordingly, VMG, reserves the right to amend the appraised value and appraisal
conclusions if engineering reports or other evidence is found, which would materially
impact the report conclusions.
33. The right is reserved by the appraiser(s) to make adjustments to the analysis, opinions,
and conclusions set forth in this report as may be required by consideration of additional
or more reliable data that may become available. No change of this report shall be made
by anyone other than the appraiser(s). The appraiser(s) shall have no responsibility for
any unauthorized change(s) to the report.
34. If the client instructions to the appraiser(s) were to inspect only the exterior of the
improvements in the appraisal process, the physical attributes of the property were from
the street(s) as of the observation date of the appraisal. Physical characteristics of the
property were obtained from tax assessment records, available plans, if any, descriptive
information, and interviewing the client and other knowledgeable persons. It is assumed
the interior of the subject property is consistent with the exterior conditions as observed
and that other information relied upon is accurate.

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RESTRICTED USE APPRAISAL REPORT Page 113

35. The submission of this report constitutes completion of the services authorized. It is
submitted on the condition the client will provide reasonable notice and customary
compensation, including expert witness fess, relating to any subsequent required
attendance at conferences, depositions, and judicial or administrative proceedings. In
the event the appraiser(s) are subpoenaed for either and appearance or a request to
produce documents, a best effort will be made to notify the client immediately. The client
has the sole responsibility for obtaining protective order, providing legal instruction not to
appear with the appraisal report and related work files and will answer all questions
pertaining to the assignment, the preparation for the report, and the reasoning used to
formulate the estimate of value. Unless paid in whole or in part by the party issuing the
subpoena or by another party of inters tint he matter, the client is responsible for all
unpaid fees resulting from the appearance of production of documents regardless of who
orders the work.
36. Acceptance or use of this report constitutes agreement by the client and any other users
that any liability for errors, omissions or judgment of the appraiser(s) is limited to the
amount of the fee charged for the appraisal.
37. Use of this appraisal constitutes acknowledgement and acceptance of the general
assumptions and limited conditions, special assumptions (if any), extraordinary
assumptions (if any), and hypothetical conditions (if any) on which this estimate of
market value is based.
38. If provided, the estimated insurable value is included at the request of the client and has

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not been performed by a qualified insurance agent or risk management underwriter. This
cost estimate should not be solely relied upon for insurable value purposes. The
appraiser(s) are not familiar with the definition of insurable value from the insurance
provider, the local government underwriting regulations, or the types of insurance
coverage available. These factors can impact cost estimates and are beyond the scope
of the intended use of this appraisal. The appraiser(s) are not cost experts in cost
estimating for insurance purposes.
39. Extraordinary Assumption - An assumption, directly related to a specific assignment,
which, if found to be false, could alter the appraiser’s opinions or conclusion. Within this
specific assignment, according to the Citrus County Property Appraiser, the building
improvements contain a gross building area of 108,531 square feet. Should the actual
combined or individual gross building areas differ from the assumed areas, the
appraisers reserve the right to amend the contents of this Restricted Use Appraisal
Report, including the conclusions.
40. Hypothetical Condition –The subject property is subject to the Lease Agreement
between Citrus County Hospital Board and Citrus Memorial Health Foundation, Inc.
According to the Fourth Amendment to Lease Agreement, the commencement date is
March 1, 1990 and the expiration date is June 15, 2033, with an option to renew for an
additional forty-five (45) year term. For purpose of this analysis, the lease is not
regarded; the property rights appraised are those of the Fee Simple Estate.

CITRUS COUNTY HOSPITAL BOARD

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