Page 12 - The Addie

BROKER OPINION LETTER
October 11, 2018
Mr. Cass Brewer LEGACY Companies President
Dear Mr. Brewer-
KNIGHT REAL ESTATE COMPANY
307 EAST SECOND STREET
AUSTIN, TEXAS 78701
512/472-1800 www.knightrealestate.com
greater than $12MM. The high offer was from a senior living/office concept, which would have required rezoning and therefore was not even considered.
Like any other piece of unimproved land, the Marshall Tract has several notable attributes and several drawbacks. The site has incredible downtown and Hill Country views from virtually any location on the property. It also has access to Lost Creek Boulevard and of course feeds into the Eanes ISD school district. It does not have access to Loop 360.
Since zoning was already in place, the main obstacles that must be overcome have to do with utilities, environmental, and density issues. The site falls into 2 different watersheds, Barton and Eanes Creeks, with one being more restrictive than the other. We also had to contend with the 360 roadway overlays which all diminish the density.
A service extension request had to be filed, and either an easement needed to be obtained with the neighbors, or a lift station had to be worked into the calculus. If the site were developed as office, the city was going to require a water tower to boost storage and water pressures to the project. With residential, hopefully that issue (and cost) will be avoided.
I have not walked the subject property so I don’t have a really good feel of how it lays out and what views (if any) that is has. It appears by looking at the topo you provided that generally the site has +/- 40 feet of difference in elevation from 360 but I am assuming that views are not a factor in the price of this tract compared to Marshall. It does have attractive access off 360 and proximity to Rob Roy, as well as the same Eanes ISD value. The fact that it is already entitled certainly has a positive effect on value.
Given the entitlements already in place, I think you would reach the highest value offering the property as a residential site. I would put a conservative number of $10-12 Million on the price, based on 50 developable lots. Conversely, I would expect the property to sell for office use somewhere around $4 Million if 80,000 sf of rentable building is possible.
There are pros and cons, but on the Marshall offering as well as several others I’ve closed recently, we’ve had a lot of success with our RFP process. On any unique property, like the one you have, I would recommend that approach to achieving the highest price and best terms possible.
Sincerely,
James Knight, CCIM, CPM
Thank you for the opportunity to help with valuing your property in Austin.
The Texas Real Estate License Act prohibits Brokers from offering “appraisals” and TREC rules require that BPOs and CMAs contain the following statement: "This is a broker price opinion or comparative market analysis and should not be considered an appraisal or opinion of value. In making any decision that relies upon my work, you should know that I have not followed the guidelines for development of an appraisal or analysis contained in the Uniform Standards of Professional Appraisal Practice of the Appraisal Foundation."
In looking at generally comparable offerings in the area, asking prices for residential land can range from about $200K to around $1.3MM per acre for a lakefront property. Office asking prices seem to run from a low end of about $210K per acre to over $1.5MM per acre depending on density.
The values we saw on the Marshall Tract offering fell within this range. To elaborate, the first two times we went under contract to office users. For office, much of the site was un-useable, and the Eanes family cemetery also effected the layout. Office offers ran from $42.86 per buildable sf to $45 per buildable sf. I am hearing that the Loop 360 office market is the slowest in town right now due to traffic, and that $50 pbsf is probably the absolute top of the market.
The main reason neither of these contracts closed can be attributed to the need to rezone the property for office use. There was extreme opposition from the neighbors and the Lost Creek Neighborhood Association to rezone from single family to office use and the Seller, in both cases, finally wouldn’t allow any more time.
This year we took the Marshall Ranch back to market, this time, in a request for proposal format. We focused on the residential users since that what the property was zoned for, and allowing time for rezoning was an obstacle the sellers were no longer willing to permit.
When we put out the request to residential developers, we received 43 of what I will call qualified responses and 14 written offers. Prices ranged from $4MM (108,870 per acre) on the low end to $15MM ($403,226 per acre) on the high end and we had 5 offers
LEGACY COMMUNITIES
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