2025_12_02 BOER Minutes - Laserfiche WebLink

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Docusign Envelope ID: B280D705-EADF-4415-899E-F125316E835B an income approach indicates a value of$2,531,491 ($60/square foot). I find the income approach as the most appropriate as hotels are income producing assets and their value is directly tied to their ability to generate income streams. • Sales Comparison Approach: There were no hotel sales within the past three years in Orange County. Economy and Midscale class hotel sales were reviewed in all of North Carolina utilizing peer sales data from Costar. Adjustments were made for time of sale, location, size of property, land size and building characteristics. This method indicates a value of$4,436,250 ($105/sq. ft.). Given the number of adjustments as no hotel sales occurred in Orange County within the past three years,preference was not given for this approach. • Cost Approach: Given the property's age, condition, land, and building characteristics this method indicates a value of$4,453,742($108/square foot.). Given the age and the amount of depreciation that must be estimated for this property,preference was not given for this approach. Considering market income and expenses,I believe a fair market value for the parcel should be $2,531,491 $60/s uare foot.). Evidence submitted by the county representative: • The agent presented some sales,but they were either Covid influenced(2022 sale dates on over half of them) or located in very small markets. The County has presented all the 2024 sales of similar, older hotels in the state(Charlotte was excluded) and arrayed them in the attached Sales Value Sheet. The agent's current request is listed in Spatialest at$4,479,158 but I think that is in error? The agent's analysis requests a value of$2,531,491 or$30,500,which is very, very low for a post-Covid hotel value. • The Income is hard to analyze because of the way expenses/type of expenses shown,but an 87% expense ratio is very, very high. A typical expense ratio would be below 75%on this product. Even at a high 75%ratio the Net Operating Income would be $541,059 (Gross Income at 2,156,006 x 75%). Capitalized at a 9%rate or a 10.47% loaded rate would indicate a value of $5,167,713. After subtracting 2025 Orange County business personal property value of$451, 814,the indicated value of the real estate would be $4,715,899. Applying the County's schedule of values and changing the E04 economic modifier to E22,the indicated property value of the subject would be $4,700,100 or approximately$56,628 per room. • It's worth noting that in 2022 a Deed of Trust was issued on the property(and no others are mentioned as collateral) for$3,400,000,which would indicate at that time a bank thought it was worth far more than $2.5 million. • GIS Map of Subject • Current Property Record Card • Proposed Property Record Card • Sales Value Sheet Motion of the Board Accept Coun 's Proposed Value: $4,700,100 Made the motion Richal Vanhook Seconded the motion Shannon Julian Voted For All BOER Members Voted Against Chair of the Board: