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PROPERTY RIGHTS APPRAISED <br /> Real property ownership consists of a group of distinct rights. There are two primary property <br /> rights, Fee Simple and Leased Fee (as defined by The Appraisal of Real Estate, 13th Edition, <br /> Appraisal Institute). <br /> Fee Simple Interest: Absolute ownership unencumbered by any other interest or estate, <br /> subject only to the limitations imposed by the governmental powers of taxation, eminent <br /> domain, police power, and escheat. <br /> Note: This would typically reflect an owner-occupied property. When the property rights <br /> appraised are the unencumbered fee simple interest of the real estate, the appraised value is <br /> subject to normal easements for drainage, public streets and utilities, if any. The effect of any <br /> existing mortgage or delinquent taxes on the subject property has not been considered in this <br /> appraisal. <br /> Leased Fee Interest: The ownership interest held by a lessor (landlord), which includes the <br /> right to the contract rent specified in the lease plus reversionary right when the lease expires. <br /> The lessor's interest in a property is considered a leased fee interest regardless of the <br /> duration of the lease, specified rent, the parties to the lease, or any of the terms in the lease <br /> contract. <br /> A leased property, even one with rent that is consistent with market rent, is appraised as a <br /> leased fee interest, not as a fee simple interest. Even if the rent of the lease terms are not <br /> consistent with market terms, the lease fee interest must be given special consideration and <br /> is appraised as a leased fee interest. (The Appraisal of Real Estate, 13th Edition, Page 114) <br /> The subject is vacant land. As such, the property rights appraised are the Fee Simple <br /> Interest of the real estate. <br /> PROPERTY COMPONENTS APPRAISED <br /> Real Estate: The appraised value includes the real estate value opinion. The methods <br /> utilized for the real estate valuation include: <br /> • Sales Comparison Approach <br /> FF&E: The appraised value does not include FF&E or personal property value. <br /> Business Value: The appraised value does not include business value. <br /> 4 Nagell Appraisal&Consulting 1 952-544-8966 1 www.callnagell.com <br />