FY2018_FAR_Appraisal_Template_Final_-_Compressed.dotx

General Instructions for The FAR Appraisal Report 2018 Template This FAR Appraisal Report Template is provided for your convenience, to assure that all pertinent analyses are performed and that all necessary data and conclusions are provided. It is intended to be used in conjunction with the FAR Contractor Tools (Excel© workbook). Some portions of the report may not be pertinent to your assignment. Delete or add pages as necessary.

The use of this template is not required; you can use your own report, but the order of presentation must be substantially the same and the information must include at least the information outlined in this template. You can add pages or adapt the template as necessary, but the Regional Review Report is based on this format. To facilitate the review process, the order of your report should be consistent with this template and the Contractor Instructions. Call the GSA regional appraiser if you have questions.

This Report Template is only a guideline. The Regional Review Report is the core of the review (see the Contractor Instructions for a copy of the Regional Review Report). Brief instructions are included throughout the report; the Contractor Instructions provide more detail and prevail in the case of disagreement.

The template is not intended to limit your analysis or to stipulate values or rents, direction in values or rents, or the results of analyses. The analyses in this assignment rely on your professional appraisal judgment and on your knowledge of the market in which the subject property is located. GSA relies on your expertise to provide informed and well supported conclusions and projections. While this assignment does not require a comprehensive explanation of the market in the report, your analysis should reflect your expertise. Your report should lead the reader to the same conclusions you have made.

Some buildings or markets may not fit well in the parameters established by this template and the Contractor Tools. You are responsible for the results of your analysis and for the contents of your report. If you anticipate problems regarding the appraisal or reporting process, contact the GSA regional appraiser.

Mechanics of this Template A basic knowledge of both Microsoft Word© and Microsoft Excel© is required to use this template, which was created in Word© 2003 and updated for Word©2007.

The template should be saved in your templates folder, typically C:\Documents and Settings\user name\Application Data\Microsoft\Templates. Accessing the template will create a Word document without affecting the underlying template. To open a new document in Word, click the Office Icon, New, My Templates. This sequence should lead you to the template if you saved it as a template to your templates folder.

The instructions for the Bookmark page are on the next page. Using the bookmarks will allow you to insert the contents of that bookmark into the report at specific locations, eliminating the need to retype data. You will, however, need to update the fields at some point to make sure that the data has been transferred throughout the report. (Ctrl+A to Select All, then F9 to update links) You need to go into the header and footer view to update the header/footer data (same method). Update the table of contents when you have finished the report. Read your report to make sure the inserted bookmarks make sense.

Paste pertinent portions of the Contractor Tools spreadsheets where indicated by copying that portion from Excel, then in Word: Place cursor just below the instructions, click Home Menu, then Paste special, Paste Link, Paste as Microsoft Excel Worksheet (code) Object, OK. Then you will need to size the object to fit the page, usually 75% - 60% depending on the spreadsheet you are copying. To resize: right click in the object; format object; Size tab; Adjust either Height or Width; Enter.

Paste files or copy and paste information to insert comparable rental data and maps. Insert pictures in the photo boxes by clicking into the box, then inserting the photo. Your photo will replace the existing image. When printing the report for GSA, do not include this instruction page or the Bookmark page.

Bookmark Page Fill in all the fields below to populate corresponding references in the report. You should see brackets around the placeholder text in the right-hand column. If you do not see the brackets, Click the Office Icon on the top left of the Word window, Click Word Options, Click the Advanced tab, go to Show Document Content, and check Show Bookmarks.

Make sure to type between the brackets and do not delete the brackets. If you accidentally delete brackets, use your UNDO button to replace the bookmark.

FAIR ANNUAL RENT APPRAISAL for

U. S. GENERAL SERVICES ADMINISTRATION

Building Name Building Number

Building City, Building State Building Zip

As of Inspection Date For Fiscal Year Fiscal Year

For GSA REGION GSA Region GSA Person Ordering GSA Address GSA City, GSA State GSA Zip

Firm Name Appraiser1 Name Appraiser2 Name Firm Address Firm City, Firm State Firm Zip

Letter of Transmittal

Report Date

GSA Person Ordering GSA Region GSA Region

Re: Fair Annual Rent Appraisal of the Building Name (Building Number) Dear GSA Person Ordering :

In accordance with your request and authorization, I (we) have prepared this report providing estimates of Fair Annual Rent (FAR) and providing other analyses and conclusions regarding the Building Name in Building City, Building State. The conclusions of my (our) analyses and a summary of important data are reported on the following page.

I (we) inspected the subject property on Inspection Date, the date of the appraisal. The analyses provide projected rents to Fiscal Year, as required, therefore many of the values and opinions stated in the report are prospective. The analyses, conclusions, and values stated in the report are subject to the assumptions, hypothetical conditions, and limiting conditions described in the report.

The extent of my (our) investigation and analyses are described in the Scope of the Appraisal. The analyses and report have been prepared for the sole use of U.S. General Services Administration (GSA), the client for this engagement. The accompanying summary report describes my (our) conclusions and analyses. In order to understand the analyses and conclusions, the report must be read in its entirety; no part of the report is valid without the support of the other sections of the report.

The appraisal, the analyses, and the report are intended to comply with the provisions of the Uniform Standards of Professional Appraisal Practice (USPAP) in force as of the appraisal date, applicable to the development and reporting of this rental analysis. The report itself is intended to be consistent with the requirements of USPAP Standards Rule 2-2. Additionally, the execution of the assignment is intended to comply with the supplemental standards imposed by GSA instructions pertinent to FAR reports and any additional instructions included in my engagement documents.

The following appraisal report describes the analyses and conclusions, and includes pertinent information. Supporting documentation is retained in the appraisal files. Please feel free to call if you have any questions.

Sincerely, Appraiser1 Name

Appraiser2 Name

Appraiser1 License # & State

Appraiser2 License # & State

Appraiser1 Expiration Date

Appraiser2 Expiration Date

Section 1: Data Summary Property and Appraisal Data Summary Paste “Contractor’s Data Summary and Conclusions” sheet from Contractor Tools Workbook. Then resize as needed to fit the page. The sample below was resized to 7.3” Height and 6.5” Width, after unchecking the “Lock Aspect Ratio” box, your results may vary. This provides the reader with a summary of the most important facts and conclusions.

Table of Contents Update table of contents before printing report. (Right click in table of contents, select Update Field and update entire table.)

Section 2: Introduction Assumptions and Limiting Conditions This section describes any assumptions and/or limiting conditions pertinent to this analysis.

Hypothetical Conditions and Extraordinary Assumptions In that this analysis is made to estimate market-equivalent rents to be used for the entire building, the following hypothetical condition applies. Its use may have affected the assignment results:

· The subject property is appraised in the "as is" condition, assuming it is held in private ownership and available for lease in the private sector.

· The appraisal will conclude a single rate (unless otherwise requested) that when applied to the appropriate GSA area (Tenanted Floors) will result in gross potential income for the building.

· The rate developed is a single, blended rate that accounts for differences in locations within the building (with respect to floor preferences, view, and space utility, etc.).

· The concluded rent will be based on the provided Tenanted Floor R/U. The mechanical and utility floors will be accounted for by a conversion from Tenanted Floor R/U to GSA’s Billing R/U on the “Contractor’s Data Summary and Conclusions” Sheet.

· The concluded rate reflects the average or typical, "as is", tenant build-out in the building, in its current condition.

· The rent is a levelized rent effectively averaged over a 10-yr fiscal cycle.

Extraordinary Assumptions

· None Assumptions and Limiting Conditions The appraiser has made the following assumptions and the analysis is subject to these limiting conditions:

· Although the appraisal and analysis are performed and presented, all or in part, on forms and tools provided by GSA, the content, analyses, conclusions, and opinions are those of the appraiser. Other than requiring certain data and analyses, GSA has not stipulated values or rents, direction in values or rents, or the results of analyses.

· To the extent that it might impact the rent analyses, the appraiser assumes the title is marketable and free and clear of all liens, encumbrances, encroachments, easements, and restrictions, except those specifically discussed in this report. In this analysis, the appraiser assumes conditions in which the property would be available for lease under prevailing market conditions.

· The appraiser assumes the property is under responsible ownership and competent management. The appraiser assumes there are no hidden or undisclosed conditions of the land or of the improvements which would affect the determination of market rent.

· The appraiser assumes that the subject property is not affected by any adverse environmental conditions that would have an impact on the market rent analysis. Adverse environmental conditions unknown to the appraiser could impact the final rent conclusion.

· The appraiser assumes the property is in compliance with all applicable building, environmental, zoning, and other Federal, state and local laws, regulations, and codes, unless otherwise noted in the appraisal.

· The conclusions stated in the appraisal apply only as of the date of valuation and no representation is made as to the effect of subsequent events. Because of GSA’s requirements, the appraiser has analyzed trends and has derived informed estimates of future trends. These estimates are speculative and the resulting values (rents) are prospective. These prospective rents are projections based on existing and past data, and cannot be guaranteed.

· Unless contractual arrangements have been made in advance, the appraiser is not required to give testimony, or be in attendance in court or other hearings regarding this appraisal or the property that is the subject of the appraisal.

· The appraiser has not made a survey of the property and assumes no responsibility in connection with such matters. The majority of the spatial data has been supplied by GSA and is assumed to be correct. Sketches or surveys included in this report are for illustrative purposes only.

· The appraiser has reviewed the Building Space Classification Report as well as floor plans provided by GSA (if available). The appraiser accepts that information as accurate. A copy of the summary page of this report should be included in the addenda of your appraisal report.

· The appraiser has attended the web based training seminar “Understanding Fair Annual Rent Appraisal.”

· The appraiser is not responsible for considerations requiring expertise in other fields, including but not limited to, legal descriptions and other legal matters, geologic considerations such as soils and seismic stability, engineering, or environmental and toxic contaminants.

· The appraisal process inherently requires information from a wide variety of sources. The appraiser has relied on information provided by other individuals and in good faith believes that information to be reliable. The appraiser does not accept responsibility for erroneous information provided by others.

· The Americans with Disabilities Act (ADA) Accessibility Guidelines for Buildings and Facilities (ADAAG) require that newly constructed and altered buildings and facilities be readily accessible to and useable by individuals with disabilities, in terms of architecture, design, and communications. GSA has not made a specific compliance survey and analysis of the property to determine whether existing or proposed improvements conform to the technical requirements of the ADA. It is possible that a compliance survey of the subject property could reveal that it is not in compliance with one or more requirements of the ADA. If so, it is likely this fact could have a negative impact on the subject's rent. Since GSA has no such survey at its disposal, GSA has made a specific assumption that the subject is in compliance with the ADA and has rendered our rent estimates accordingly.

· The appraisal is subject to the requirements of professional organizations of which the appraiser is a member, with regard to peer review and various disciplinary actions. The appraiser will not disclose confidential information or assignment results prepared for GSA to anyone other than: the client and persons specifically authorized by the client; state enforcement agencies and such third parties as may be authorized by due process of law; and a duly authorized professional peer review committee except when such disclosure to a committee would violate applicable law or regulation.

Appraiser’s Certification I certify to the best of my knowledge and belief:

· The statements of fact contained in this report are true and correct.

· The reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions and are my personal, impartial, and unbiased professional analyses, opinions, and conclusions.

· I have no present or prospective interest in the property that is the subject of this report and no personal interest with respect to the parties involved.

· I have performed no (or the specified ) services, as an appraiser or in any other capacity, regarding the property that is the subject of this report within the three-year period immediately preceding acceptance of this assignment.

· I have no bias with respect to the property that is the subject of this report or to the parties involved with this assignment.

· My engagement in this assignment was not contingent upon developing or reporting predetermined results.

· My compensation for completing this assignment is not contingent upon the development or reporting of a predetermined value or direction in value that favors the cause of the client, the amount of the value opinion, the attainment of a stipulated result, or the occurrence of a subsequent event directly related to the intended use of this appraisal.

· My analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the Uniform Standards of Professional Appraisal Practice (USPAP) and with GSA’s Appraisal of Fair Annual Rent Contractor Instructions FY2018 pertaining to Fair Annual Rent analysis.

· I have made a personal inspection of the property that is the subject of this report. (If more than one person signs this certification, the certification must clearly specify which individuals did make a personal inspection of the appraisal property).

· I have attended the seminar “Understanding Fair Annual Rent Appraisal” and have reviewed Building Space Classification Reports and floor plans provided by GSA (if available) for the building being appraised.

· No one provided significant real property appraisal assistance to the person/s signing this certification. (If there are exceptions, the name of each individual providing significant real property appraisal assistance must be stated.)

Appraiser1 Name

Appraiser2 Name

Appraiser1 License # & State

Appraiser2 License # & State

Appraiser1 Expiration Date

Appraiser2 Expiration Date

Scope of Work The scope of work describes the type and extent of the research and analysis required and executed for this assignment. Describe extent of inspection, research, and data sources for the subject property and market data, and the verification process. Describe the analysis, the type of report provided, the standards, supplemental standards, and specifications pertinent to the assignment. Throughout the report provide framework for the analysis by identifying data sources and discussing the availability of relevant data. The scope provided in this template describes the minimum treatment necessary for a credible appraisal. Additional elements can be added as necessary, but the scope cannot be reduced.

This assignment involves analysis of pertinent market factors to determine the Fair Annual Rent (FAR) for the subject property (and for the subject parking, if included in the assignment). The appraiser has researched the competitive market to the extent necessary to understand the subject’s position in the market and has identified properties that allow for realistic comparison with the subject. The subject building data for this analysis were obtained from sources such as GSA, public records, and the appraiser’s actual inspection of the building, relying on measurements provided by GSA, unless indicated otherwise. Market, lease, and expense data were obtained from public records, multiple listing services and commercial data sources, brokers, owners, tenants, and participants in the market. Data was verified by parties to the transactions or by those having direct knowledge of the transactions, as indicated in the Rent Comparable Data Sheet for each property.

The appraiser has inspected the subject property to the extent necessary to understand the property but has relied on GSA for certain building information, tenancy information, expenses, if available and other information pertinent to the occupancy, construction, and condition of the building. Assumptions regarding Federal tenancy and market-based rents are described in the section labeled Hypothetical Conditions, Extraordinary Assumptions and Limiting Conditions.

In this analysis, the appraiser has analyzed properties that compete with the subject property and has used lease and expense data from those buildings to arrive at an informed estimate of the subject’s Fair Annual Rent (FAR) expressed as a rate. The appraiser has analyzed market data related to services provided in the subject building and has provided a justified market-based estimate of expenses for the subject. The appraiser has analyzed the competitive market conditions and understands local market practices (such as measurement parameters, lease size, tenant improvements). The appraiser must provide informed estimates of anticipated market trends applicable to the leased space market and to the costs of services provided in the subject property.

Because the objective of this assignment is lease analysis, pertinent lease data has been analyzed. The development of the Sales Comparison, Replacement Cost, and other sections of the Income Capitalization Approaches to value is not pertinent. A formal Highest & Best Use Analysis was not necessary, but the appraiser has considered how the market would utilize space in the building. For purposes of this assignment governmental use is considered with its own distinct characteristics. Features such as wide corridors and ornate lobbies may be necessary, depending upon the specific use.

The results of the appraiser’s analyses are provided in this appraisal report, which summarizes the data and analysis in a format and to an extent specific to GSA’s needs. Additional supporting data and analysis are in the appraiser’s work files. The appraisal, the analysis, and the report are intended to comply with the provisions of the Uniform Standards of Professional Appraisal Practice (USPAP) in force as of the appraisal date, applicable to the development and reporting of this rental analysis. The report provides sufficient data to support the analysis and lead readers to the appraiser’s conclusions. The report is intended to comply with the requirements of USPAP Standards Rule 2-2 for an appraisal report, as well as any supplemental standards imposed by the GSA.

Property Inspection:

I have made a personal internal and external inspection of the property that is the subject of this report. (If more than one person signs this report, specify which additional individuals made a personal inspection of the appraisal property).

I have (or have not) made a personal external inspection of the comparable properties of this report. (If more than one person signs this report, specify which individuals did/did not make an external inspection of the comparable properties).

Photographs of the Subject Include photographs adequate to provide an understanding of the property. At a minimum, include major views of the exterior and representative photographs of the interior. Include photographs of any unusual characteristics pertinent to the analysis. Include brief descriptions; identify photographer, date and camera orientation. Click on the photo and paste your JPG photo (Insert; picture; from file) Description:

Photographer:

Date:

Date of Inspection Camera Orientation:

Subject Photo 1;

Description:

Photographer:

Date:

Date:

Date:

Date:

Date:

Definition of Value GSA Definition of Fair Annual Rent (FAR): Fair Annual Rent (FAR) is the annual amount that may reasonably be expected for the right to the agreed use of real property, as established by competition in the open market. The FAR is a fully serviced rental rate; the annual rate includes the cost of all services except Security. (Source of definition is the GSA Instructions.)

Purpose of the Fair Annual Rent Appraisal The purpose of the appraisal is to estimate the appropriate Fair Annual Rent (FAR) rates for the subject property based on the efficiency of the building as provided by the Tenanted Floor R/U ratio, and the average quality of tenanted areas throughout the building. The Tenanted Floor R/U ratio is provided as it more closely follows how the market would determine the load factor in our buildings. The appraised rate will be based on the largest tenant size within each building.

Intended Use and Users of the Report The analysis and report are prepared for the exclusive use of GSA for asset and occupancy management purposes. The intended users include GSA asset management personnel, GSA customers (including their Federal tenants), Federal regulatory agencies, and those directly involved in management of the GSA asset. This report is not intended for other users or other uses.

Identification of the Client The General Services Administration (GSA) is the client. The appraiser does not extend the appraiser/client relationship to any other parties. The report was completed for the following GSA regional appraiser in accordance with our contract.

GSA Person Ordering GSA Region GSA Region GSA Address GSA City, GSA State GSA Zip Real Property Interest Appraised:

This is an analysis to determine a Fair Annual Rent for the subject property only, subject to the previously outlined hypothetical conditions and extraordinary assumptions.

Summary of the Appraisal Problem To satisfy the requirements of the Fair Annual Rent Appraisal Program, this analysis provides GSA with market-derived rents that will be used to establish occupancy agreements (OA) for Federal tenants throughout the subject building. This requires a thorough examination and understanding of the leased-property market in which the subject property is located.

GSA is required to establish market-equivalent rents (Fair Annual Rent) for its Federal tenants. In that regard, this assignment includes several hypothetical conditions and extraordinary assumptions specific to the needs of GSA. In general, this analysis can be considered an analysis of market rent, but the FAR applies to all new and renewing occupancies in the building, rather than to a specific space. As such, unless otherwise specified, we are seeking a single rate to apply to all finished, assignable office space (or industrial space), GSA requires analysis based on the existing space in the building, and based on the typical tenant build-out.

In addition, the FAR Appraisal requires market-based estimates of building-related expenses (services) and market-based rates for parking. The results of the analysis provide GSA with market-based lease rates for fully serviced spaces (for Office or General Use space, but also for Warehouse space, if indicated) and for Parking. This analysis is either for shell space or for "as is" space, as indicated on the Contractor’s Data Summary and Conclusions page.

The analysis of FAR for government occupancy is a complex process, guided by legislative authority and program requirements. This assignment is intended to follow the guidelines included in the instructions provided to the appraiser, by GSA Public Buildings Service titled Appraisal of Fair Annual Rent Contractor Instructions FY 2018, (Contractor Instructions) which are incorporated here by reference.

Section 3: Factual Data Area, City, Neighborhood, and Office Market: Data and Analysis Provide a brief summary of pertinent market background and data, sufficient to lead the reader to an understanding of the market that affects the subject. Include an explanation of the subject property’s position in the market. Include analysis and conclusions regarding competition, supply and demand, and trends affecting rental rates. Include analysis and conclusions regarding current vacancy, vacancy trends, typical lease size, and the market method of measurement. This section should also contain the reasoning and support behind the selected annual escalation rates or factors used in the Rent Levelization Worksheet later in the report.

Warehouse Market: Data and Analysis Discuss the additional market factors that apply to the warehouse market, if applicable. Include availability, rates, and trends affecting the competitive market for the subject. This section should also contain the reasoning and support behind the selected annual escalation rates or factors used in the Rent Levelization Worksheet later in the report.

Parking Market: Data and Analysis Discuss the additional market factors that apply to the parking market, if applicable. Include availability, rates, and trends affecting the competitive market for the subject. Since the end result should reflect a rate for a bulk user, this section should contain discussion on differences between retail parking rates and bulk rates in the market.

Subject Property Data Summarize pertinent subject data, including history, major tenants, vacancy, and the existing use of the real estate as of the date of value, and the use of the real estate reflected in the appraisal.

Site Description Summarize pertinent site characteristics, including zoning (if any), size, parking, etc.

Improvements Description Describe the building improvements including construction, size, condition, age, typical (or various) tenant improvements, and measurement data (type and source). Identify and discuss Common areas, the Tenanted Floor R/U ratio and how this relates both to the efficient use of the building and to buildings it would compete with. In this section, include discussions of the Building Space Classification Report and floor plans.

Parking Description Summarize the subject’s parking improvements, if any. Describe the method of parking, the type and number of spaces provided, access, and location. Describe any other pertinent characteristics.

Section 4: General Use/Office Property Analysis Insert Rent Comparable Data Sheets for each of the properties/leases used in the General Use/Office rent comparison, followed by a map showing the locations of the comparable properties and the subject, and the “General Use/Office Rent” grid from the Contractor Tools Workbook. See the Instructions for data requirements.

Rent Comparable 1

Rent Comparable 2

Rent Comparable 3

Rent Comparable 4

Rent Comparable 5

Comparable Rents Location Map (General Use/Office) Insert a map showing the location of the subject and each property used in the rent comparison.

Rental Analysis (General Use/Office Space) Insert the “General Use/Office Rent” grid from the Contractor Tools Workbook. Then resize as needed to fit the page. The sample below was resized to 6.7” Height and 10.6” Width after unchecking the “Lock Aspect Ratio” box, your results may vary.

Fair Annual Rent Appraisal Building Name FYFiscal Year

Description and Analysis of Comparable Properties Summarize pertinent data for each of the comparable properties as compared to the subject. State rates in terms of rentable square feet. Describe each adjustment required and the relative magnitude of the adjustments. Quantitative adjustments are required.

Discuss the services for the subject property and the market-based rates applicable to the subject property (as indicated on the grid). Discuss the source of the rates and the applicable adjustments for services. Do not include Security expenses for the subject.

Discuss lease terms, special conditions, and any adjustments required.

Discuss differences in building efficiencies including but not limited to building R/U ratios, comparative Common areas, different measurement applications, and space classification.

Discuss each of the Other adjustments depicted in the grid; describe, in detail, the adjustments for tenant improvements. See Contractor Instructions for additional information.

Reconciliation Starting Rent (General Use/Office Space) Discuss the strengths and weaknesses of the data and weight afforded each of the comparable properties in the reconciliation process. Discuss any blending of rates that was necessary to produce an average single rate for the subject property. State the conclusion of Fair Annual Rent (current year), based on the tenanted floor area. Based on the market data described in earlier sections, provide your estimate of Annual Trend Factors for Services and either Fully Serviced or Unserviced Rent.

Rent Levelization Analysis (General Use/Office Space) Insert the Rent Levelization Worksheet from the Contractor Tools Workbook. Then resize as needed to fit the page. The sample below was resized to 7.9” Height and 6.4” Width after unchecking the “Lock Aspect Ratio” box, your results may vary.

Rent Levelization Discussion (General Use/Office Space) Discuss the reasoning and support behind selecting annual escalation factor or increases to be used in the Rent Levelization Worksheet. Annual escalation factors could be based on any or combination of the following sources:

Section 5: Warehouse Rent Analysis Insert Rent Comparable Data Sheets for each of the properties/leases used in the Warehouse rent comparison, followed by a map showing the locations of the comparable properties and the subject, and the “Warehouse Rent” grid from the Contractor Tools Workbook. See the Instructions for data requirements.

Warehouse Rent Comparable 1

Warehouse Rent Comparable 2

Warehouse Rent Comparable 3

Warehouse Rent Comparable 4

Warehouse Rent Comparable 5

Comparable Rents Location Map (Warehouse)

Rental Analysis (Warehouse Space) Insert the “Warehouse Rent” grid from the Contractor Tools Workbook. Then resize as needed to fit the page. The sample below was resized to 6.6” Height and 10.6” Width after unchecking the “Lock Aspect Ratio” box, your results may vary.

Summarize pertinent data for each of the comparable properties as compared to the subject, including lease parameters, services included, relative building efficiency including R/U ratios (as applicable). Describe the adjustments required and the relative magnitude of the adjustments.

Discuss the services for the subject property and the market-based rates applicable to the subject property (as indicated on the grid). Discuss the source of the rates and the applicable adjustments for services. Do not include Security for the subject.

Discuss lease terms, special conditions, and any adjustments required.

Discuss each of the Other adjustments depicted in the grid. See the Contractor Instructions for additional information.

Reconciliation Starting Rent (Warehouse Space) Discuss the strengths and weaknesses of the data and weight afforded each of the comparable properties in the reconciliation process. State the conclusion of Fair Annual Rent (current year), on a Rentable/Gross basis. Based on the market data described in earlier sections, provide your estimate of Annual Trend Factors for Services and either Fully Serviced or Unserviced Rent.

Rent Levelization Analysis (Warehouse Space) Insert the Rent Levelization Worksheet from the Contractor Tools Workbook. Then resize as needed to fit the page. The sample below was resized to 7.4” Height and 6.4” Width after unchecking the “Lock Aspect Ratio” box, your results may vary.

Rent Levelization Discussion (Warehouse Space) Discuss the reasoning and support behind selecting annual escalation factor or increases to be used in the Rent Levelization Worksheet. Annual escalation factors could be based on any or combination of the following sources:

Section 6: Parking Rent Analysis If parking is included in the analysis, insert the Rent Comparable Data Sheets for all of the properties/leases used in the Parking rent comparison, followed by a map showing the locations of the comparable properties and the subject, and the “Parking Rents” grid from the Contractor Tools Workbook. Rent Comparable Data Sheets must include all pertinent data, including data source, rents, types of parking, terms, retail rate versus bulk rate, etc.

Parking Comparable 1 (Inside Parking)

Parking Comparable 2 (Inside Parking)

Parking Comparable 3 (Inside Parking)

Parking Comparable 4 (Outside Parking)

Parking Comparable 5 (Outside Parking)

Parking Comparable 6 (Outside Parking)

Comparable Rents Location Map

Rental Analysis (Parking) If Parking is included in the analysis, insert the “Parking Rents” grid from the Contractor Tools Workbook. If Parking in the market is included in the rent with no extra charge, describe that scenario. Paste the “Parking Rents” grid below, then resize as needed to fit the page. The sample below was resized to 6.8” Height and 6.5” Width, after unchecking the “Lock Aspect Ratio” box, your results may vary.

Summarize pertinent data for each of the Parking comparable properties as compared to the subject (differentiate between inside and outside analyses). If reserved spaces are included, determine any premiums. Describe the adjustments required and the relative magnitude of the adjustments. Quantitative adjustments are required. See the Contractor Instructions for additional information.

Reconciliation and Conclusions (Parking) Discuss the strengths and weaknesses of the data and weight afforded each of the comparable properties in the reconciliation process. Provide the rate that is typical in your market. Since the majority of GSA’s tenants are bulk users of our parking spaces, the Parking Rent valuation is oriented to the rates paid by users leasing multiple spaces, rather than toward retail single space daily, weekly or monthly rates. Rates should reflect the per-space market rate for the number of spaces generally required by users of space the size of your subject. Based on the market data described in earlier sections, provide your estimate of Annual Trend Factors for Inside and Outside Parking.

Section 7: Addenda Include any additional exhibits to foster an understanding of the appraisal process and conclusions. Include Qualifications of the Appraiser for each appraiser with appraisal certification numbers and expiration dates. Include a copy of the contract for this assignment. Include a copy of the summary page of the Space Classification Report and pertinent floor plan images.

Fair Annual Rent Consolidated Appraisal Statement of Work

FY 2018

Purpose The purpose of the appraisal is to estimate the Fair Annual Rent (FAR) for the subject property based on specific characteristics that define the Subject for purposes of this appraisal. GSA will use this rate as the basis for establishing rents for Federal tenants occupying space in the building.

The subject property:

The subject of the appraisal is a space: the size of the largest current tenant in the building; having the Tenanted Floor R/U ratio as its efficiency or load factor; that is of the average quality for tenanted areas throughout the building.

GSA Definition of Fair Annual Rent (FAR) Fair Annual Rent (FAR) is the annual amount that may reasonably be expected for the right to the agreed use of real property, as established by competition in the open market. The FAR is a fully serviced rental rate; the annual rate includes the cost of all services except Security.

Assignment Conditions

· The appraiser must comply with USPAP and GSA Contractor Instructions (current versions) in performance of this appraisal assignment.

· The contracting appraiser must inspect the subject property.

· Results and analyses must conform to the guidance provided in the most current versions of the GSA Contractor Instructions and Report Templates. The appraisal contractor must use the latest version of the Contractors Tools, v6.73.

· Training Requirements: Contractors are required to attend the on-line GSA seminar “Understanding Fair Annual Rent Appraisal” prior to developing FAR rent appraisal reports for FY2018.

Assignment Framework

· Consider Building Space Classification Reports to identify tenanted areas versus unique floors. The concluded rent will apply to the tenanted floors only.

· The appraised rate is the starting rent for a full-service ten-year term:

· Fully serviced (gross) excluding Security.

· Appraise the “as is” condition and use(s), unless otherwise requested, including consideration of existing tenant improvements.

· Concluded operating expenses for subject property must be supported by market-derived data. Cite expense comparables where possible. In concluding operating expenses, consider pertinent energy improvements to the subject.

· Allocate the concluded full service rent between operating rent (services) and unserviced rent as defined in the Contractor Instructions

· The appraised rate should reflect the market rate for average, finished, tenanted areas within the subject building (or the market rate for comparable warehouse space for warehouse buildings).

· Calculate a levelized (unserviced) rent for the entire term (GSA uses this for billing purposes), using the provided rent levelization worksheet, and applying your estimated annual escalation factors for the following nine years.

· In some cases, distinct uses or characteristics of the building may require separate comparable leases, analyses, and conclusions. However, we may still require a single, blended rate. Please consult the regional appraiser.

· In these cases, each rate must have sufficient support to be credible and must be reconciled into a single blended rate (unless otherwise stated).

· The completed appraisal includes conclusions of market rent at specific points in time:

· Date of Inspection.

· Prospective (effective Fiscal Year) dates: 10/1/2015, 10/1/2016, 10/1/2017.

· A separate parking analysis may be required, establishing a bulk-user (generally multiple-space) rate for the subject building.

The Appraisal Requires:

· You must provide no fewer than three executed and confirmed rent comparables; additional comps are frequently necessary to provide a credible analysis. You must provide a sufficient number of comparables to accurately reflect the market and support your conclusions. In urban or volatile markets, you may be asked for additional listings and/or confirmed lease comparables.

· Exclude all Federal government leases. If it is necessary to include state or local government leases, confirm that they are arms-length and are representative of the market.

· Follow the rent comparable data sheet format provided.

· The Rent Comparison Grid must be fully completed. All adjustments must be explained in the report and supported.

· A determination of levelized rent. Escalation factors require market support, which may include any of the following (which must be explained in the report):

· Information from rent comparables

· Local real estate surveys

· Market participants such as buyers, sellers and brokers

· The completed report must contain all exhibits, maps and photos, signed certification(s) by the appraisers, limiting conditions to which the value is subject, the appraiser’s qualifications, and a copy of the appraiser’s current Certified General license effective in the state where the subject is located.

· The report addenda should include a copy of the summary page of the Space Classification Report and representative floor plan images.

image2.emf

Microsoft_Excel_Worksheet1.xlsx Recent Changes

RECENT & PROPOSED CHANGES

RECENT CHANGES

Contractors Summary 10YR

Hidden starting for FY18

Office Rent 10YR

Hidden starting for FY18

Warehouse Rent 10YR

Hidden starting for FY18

Contractors Summary 5YR

This is now the only Contractors Summary tab, most of the data entry took place here and it was easier to modify this tab versus having to update all the data links throughout the workbook.

Removed 5YR from sheet name and workbook header

Section 4 header changed from "Rental Rate Conclusions (5 year level term)" to "Levelized Rate Conclusions"

Calculations for Fully Serviced Rent & Unserviced Rent were shuffled. Previous versions pulled the Full Serviced Rent and Total Services from the adjustment grid, then calculated Unserviced rent as the difference between the two. NOW the workbook pulls Unserviced Rent from the Levelization workbook, Total Services from the Adjustment Grid and then sums them for the Full Serviced Rent. This was carried out through the conversion to Billing R/U and the application of trending.

Office Rent 5YR

Renamed tab Office Rent

Removed "5 Year Term" from worksheet header

Lease Term changed from 5-Year term to 10-Year term

Lease Term comment changed to reflect 10 years

Rent Levelization (Row 48) Hidden

Removed VBA Macro that was causing issues in Office 2010

Warehouse Rent 5YR

Renamed tab Warehouse Rent

Removed "5 Year Term" from worksheet header

Lease Term changed from 5-Year term to 10-Year Term

Lease Term comment changed to reflect 10 years

Rent Levelization (Row 54) Hidden

Removed VBA Macro that was causing issues in Office 2010

Rent Levelization

New worksheet that automatically levels rent for Office & Warehouse space.

Section 1 - User selects "trend type" from drop down menu for Office and/or Warehouse. Four options are available; Constant $ per RSF, Variable $ per RSF, Constant % per Year, Variable % per Year

The sheet highlights (yellow) where the user can enter the required numbers. This allows them to either have one constant number applied to each year or they can customize it and enter a different number per year.

Section 2 - Automatically pulls the unserviced rent from the adjustment grid and calculates the trending based on the selection in Section 1.

Section 3 - Calculates the average rate over the 10 year period. This number is then sent to the Contractors Summary tab.

PROPOSED CHANGES

Warehouse Rent

Include comments for Market Conditions, Lease Concessions, Fixed Expenses from Office rent tab

Remove lease conditions adjustment

Unserviced Rate comment doesn't match Office Rent

Proposed Changes

REQUESTED FIXS

Office Rent Tab

Section 3

Implemented 6.45 Appalucio Lease Concessions Comment: "For NNN Leases". Rent concessions are for all leases and not just NNN leases. I think this was meant to be part of the comment for Fixed Expenses below. However, that comment would not be entirely correct for Fixed Expenses either because the lease could something other than NNN and still require either a real estate tax and/or insurance adjustment.

Contractors Summary Tab

Section 3

Implemented 6.56 Wochna 'Since we are requiring that the appraiser provide a rate per RSF, we need to break the link between the Market method of measurement cell and the labeling on rate conclusions statement.

Reed Provide ability to utilize various trend factors for years. Option to use X for all 3 or use X,Y,Z for each

Section 4

Flores New calculation for trending calculating change/day X days between dates - coupdays, coupdaysbs

New Tab

Reed create new tab with explanations on formulas and functionality of sheet

Warehouse Rent Tab

Section 3

Reed include comments for Market Conditions, Lease Concessions, Fixed Expenses from Office rent tab

Reed remove lease conditions adjustment

Reed Unserviced Rate comment doesn't match Office Rent

Workbook

Implemented 6.69 Reed Font - Times New Roman or Arial

Contractors Summary

CONTRACTOR'S DATA SUMMARY AND CONCLUSIONS

Enter data in the shaded cells

Nicholas S Hufford: Data from this sheet fills cells in the RENT grid sheets. The appraiser should provide the information on this sheet before moving to the RENT grids. (Trend factors are not required for the other sheets.)

Section 1 FOR FISCAL YEAR 2018

Nicholas S Hufford: Enter the fiscal year (FY) for which this rent analysis is intended. Data in this cell populates related Fiscal Year fields. 10/1/17

Building Number TS12345ZZ

Name of Building Federal Bldg Building Areas

Address 123 Main St. General Use/Office Space Warehouse Space

City Oldtowne GSA Usable SF 0.00

Nicholas S Hufford: As provided by GSA GSA Usable SF 0.00

Nicholas S Hufford: As provided by GSA

State and Zip TS 01234 GSA Rentable SF 0.00

Nicholas S Hufford: As provided by GSA GSA Rentable SF 0.00

Nicholas S Hufford: As provided by GSA

Effective Dates of the Appraisal

Date of Inspection

Nicholas S Hufford: Enter the date of the appraisal, typically the date of the actual building inspection. 10/01/2014 (Appraisal date) Parking Spaces

Projected FY 10/1/17 (Prospective date) Inside (Structured) Outside (Surface)

Other

ChristopherHReed: Please Describe 0 0.0

Section 2 APPRAISER AND REPORT…