Sheraton Hotel Redding At Sundial Bridge - Redding Record ...
Sheraton Hotel Redding At Sundial Bridge - Redding Record ... Sheraton Hotel Redding At Sundial Bridge - Redding Record ...
construction budget of $19,204,303. Note that this figure excludes the contribution of the existing visitors’ center. The market value conclusion via the income approach is well below the replacement cost estimate. It is our understanding that the developer of this project is willing to accept below market rates of return, expecting the hotel to serve as an amenity to the Turtle Bay Exploration part and enhance the destination. As the development costs exceed the market value of the project, it is our opinion that the “as is” market value of the leasehold interest, as of the February 9, 2011, is $0. February-2011 Cost Approach Sheraton Hotel Redding At Sundial Bridge – Redding, California 114
13. Reconciliation of Value Indications Income Capitalization Approach Sales Comparison Approach The reconciliation, which is the last step in the appraisal process, involves summarizing and correlating the data and procedures employed throughout the analysis. The final value conclusion is arrived at after reviewing the estimates indicated by the income capitalization, sales comparison, and cost approaches. The relative significance, applicability, and defensibility of each indicated value are considered, and the greatest weight is given to that approach deemed most appropriate for the property being appraised. The purpose of this report is to estimate the market value of the leasehold interest in the subject property; our appraisal involves a careful analysis of the property itself and the economic, demographic, political, physical, and environmental factors that influence real estate values. To estimate the subject property's value via the income capitalization approach, we have analyzed the local market for transient accommodations, examined the competitive environment, projected occupancy and average rate levels, and developed a forecast of income and expense that reflects anticipated income trends and cost components through a stabilized year of operation. The subject property's projected net income before debt service was allocated to the mortgage and equity components based on market rates of return and loan-to-value ratios. Through a discounted cash flow and income capitalization procedure, the value of each component was calculated; the total of the mortgage and equity components equates to the value of the property. Our nationwide experience indicates that the procedures used in estimating market value by the income capitalization approach are comparable to those employed by the hotel investors who constitute the marketplace. For this reason, we believe that the income capitalization approach produces the most supportable value estimate, and it is given the greatest weight in our final estimate of the subject property's market value. The sales comparison approach uses actual sales of similar properties to provide an indication of the subject property's value. Although we have investigated a number of sales in an attempt to develop a range of value indications, several adjustments are necessary to render these sales prices applicable to the subject property. The adjustments, which tend to be subjective, diminish the reliability of the sales comparison approach; furthermore, typical hotel investors employ a sales comparison procedure only to establish broad value parameters. February-2011 Reconciliation of Value Indications Sheraton Hotel Redding At Sundial Bridge – Redding, California 115
- Page 63 and 64: FIGURE 7-6 MARKET AND SUBJECT PROPE
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construction budget of $19,204,303. Note that this figure excludes the contribution<br />
of the existing visitors’ center.<br />
The market value conclusion via the income approach is well below the<br />
replacement cost estimate. It is our understanding that the developer of this<br />
project is willing to accept below market rates of return, expecting the hotel to<br />
serve as an amenity to the Turtle Bay Exploration part and enhance the<br />
destination. As the development costs exceed the market value of the project, it is<br />
our opinion that the “as is” market value of the leasehold interest, as of the<br />
February 9, 2011, is $0.<br />
February-2011 Cost Approach<br />
<strong>Sheraton</strong> <strong>Hotel</strong> <strong>Redding</strong> <strong>At</strong> <strong>Sundial</strong> <strong>Bridge</strong> – <strong>Redding</strong>, California 114
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