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<br />Nagell Appraisal Incorporated | 952.544.8966 Page 23 <br /> <br />MARKET CONDITIONS OVERVIEW <br /> <br />Market Conditions Overview is based on conversations with market participants, articles, publications and <br />data. Listed below are pertinent conditions of the subject market. <br /> <br />Current Market <br /> Location Site Size (SF) Development <br />Appeal <br />List <br />Date <br />Current <br />List Price $/SF <br /> <br />4560 Central Ave NE <br />Hilltop 104,544 Average Mar-18 $975,000 $9.33 <br />Comments: Current listing of a commercial property with a traffic location. The listing agent is marketing <br />the site as redevelopment. <br /> <br />6100 University Ave NE <br />Fridley 21,344 Average Dec-17 $295,000 $13.82 <br />Comments: Commercial property with highway frontage. <br /> <br />Note: No relevant land listings found for apartment development sites. This is not uncommon, as most <br />apartment development land is privately listed for sale or has a buyer approach a seller. <br /> <br />Commercial Land sales: $8 to $15+ per SF, depending on location, frontage, and visibility <br />Apartment Land sales: $8 to $20+ per SF or $8,000 to $20,000 per unit, depending on location and allowed <br />density <br />Typical Commercial <br />Rents: Ranges from $10 to $20+ per net, depending on space quality and buildouts <br />Typical Apartment Unit <br />Rents: <br />Typically $900+ for a 1BR (new construction) and $1,200+ for a 2BR (new <br />construction) <br />Typical concessions: <br />0 to 12 months for the buildout period is typical for commercial, none typical for <br />apartments, however, new construction properties will typically offer incentives to <br />move in <br />Expenses: <br />Tax $2.00 to $4.00+ per SF <br />Op. Ex. $3.00 to $8.00+ per SF <br />Total $5.00 to $12.00+ per SF <br /> <br />Vacancy: Historic: 8% - 20%, currently around 10% <br />Lease up period: Typically 6 to 12 months +/- to find a new tenant <br />Capitalization Rates: <br />Tier 1 6.5% - 8.0%, good credit tenants, recent construction, good location <br />Tier 2 8.0% - 9.5%, average credit tenants, older building, average location <br />Tier 3 9.5% - 10.5%+, below average credit tenants, older building, fair <br />location