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<br /> Page 10 Nagell Appraisal Incorporated | 952.544.8966 <br />PROPERTY RIGHTS APPRAISED <br /> <br /> <br />Real property ownership consists of a group of distinct rights. There are two primary property rights, Fee <br />Simple and Leased Fee (as defined by The Appraisal of Real Estate, 13th Edition, Appraisal Institute). <br /> <br /> <br />Fee Simple Interest: Absolute ownership unencumbered by any other interest or estate, subject only to <br />the limitations imposed by the governmental powers of taxation, eminent domain, police power, and <br />escheat. <br /> <br />Note: This would typically reflect an owner-occupied property. When the property rights appraised are the <br />unencumbered fee simple interest of the real estate, the appraised value is subject to normal easements <br />for drainage, public streets and utilities, if any. The effect of any existing mortgage or delinquent taxes on <br />the subject property has not been considered in this appraisal. <br /> <br /> <br />Leased Fee Interest: The ownership interest held by a lessor (landlord), which includes the right to the <br />contract rent specified in the lease plus reversionary right when the lease expires. The lessor’s interest in <br />a property is considered a leased fee interest regardless of the duration of the lease, specified rent, the <br />parties to the lease, or any of the terms in the lease contract. <br /> <br />A leased property, even one with rent that is consistent with market rent, is appraised as a leased fee <br />interest, not as a fee simple interest. Even if the rent of the lease terms are not consistent with market <br />terms, the lease fee interest must be given special consideration and is appraised as a leased fee <br />interest. (The Appraisal of Real Estate, 13th Edition, Page 114) <br /> <br /> <br />The subject is vacant land; therefore, the appraised value will reflect the Fee Simple interest. <br /> <br /> <br /> <br /> <br /> <br />PROPERTY COMPONENTS APPRAISED <br /> <br /> <br />Real Estate: The appraised value includes the real estate value opinion. The methods utilized for the real <br />estate valuation include: <br /> <br />• Sales Comparison Approach <br /> <br /> <br /> <br />FF&E: Furniture, Fixtures, & Equipment (FF&E): The appraised value does not include any values of <br />fixtures, furnishings and equipment. The appraised value reflects real estate only. <br /> <br /> <br />Business Value: There is no business value included in the appraised value. <br /> <br /> <br /> <br /> <br />