Appraisal - Midway Hotel Group - 5001 79th Street, Burbank PDF

Appraisal Report
American Midwest Hotel

5001 West 79 Street
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Burbank, Illinois
as of
February 20, 2013
by
Matthew R. Bulthuis, President
Certified General Real Estate Appraiser
Illinois License No. 553.001385 (exp. 9-30-13)
Bulthuis
Realty
Consultants Inc.
15 E. Madison Street
Lombard, Illinois 60148-3478
(630) 353-1700
Fax (630) 353-1711
www.brcnet.com
February 22, 2013
Ms. Maddie Meskovich
Title?
Devon Bank
6445 N. Western Avenue
Chicago, Illinois 60645-5494
Dear Ms. Meskovich:
In accordance with your request for an opinion of market value of the property known as:
American Midwest Hotel
5001 West 79 Street
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Burbank, Illinois
the undersigned submits the following report which describes our method of approach and contains
data gathered in our investigation.
The appraisal is made in accordance with the Code of Ethics of the Appraisal Institute. The report
conforms to the Uniform Standards of Professional Appraisal Practice (USPAP) as adopted by the
Appraisal Standards Board of the Appraisal Foundation. All applicable approaches were utilized
and the conclusions are presented in a summary format. The property rights appraised are fee simple
estate and financing is available in the metropolitan area for this property type.
It is our opinion that the as-is value of the above-captioned hotel property, as of February 20, 2013,
subject to the contingencies and limiting conditions noted on page 18 of this report, is $1,125,000.
Respectfully submitted,
Illinois License No. 553.001385 (exp. 9-13)
Subject Photographs
Front View
Front View
Bulthuis Realty Consultants Inc. American Midwest Hotel - 5001 W. 79 Street, Burbank, Illinois Page 2
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Subject Photographs
Rear View
West Elevation
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Subject Photographs
East Elevation
Central Pool Area
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Subject Photographs
Lobby Waiting Area
Nightclub
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Subject Photographs
Deluxe (Whirlpool) Suite Requiring Repair
Deluxe (Whirlpool) Suite
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Subject Photographs
Typical Renovated Room
Typical Renovated Bathroom
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Subject Photographs
Banquet Room
Front Desk Area
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Subject Photographs
First Floor Kitchen
Second Floor Kitchen
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Subject Photographs
Basement Boiler Room
Basement Electrical Room
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Subject Photographs
79 Street Looking West
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79 Street Looking East
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Subject Photographs
Aerial View, Looking South
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Area Map
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Table of Contents
Letter of Transmittal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Photographs of the Property. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Table of Contents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Executive Summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Premises of the Appraisal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
- Purpose
- Scope of Work
- Contingencies and Limiting Conditions
- Property Rights
- Market Value Definition
- Exposure Time
Property Information.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
- Legal Description
- Zoning
- Flood Information
- Real Estate Taxes
- Property History
- Property Renovation
- Environmental Factors
Property Location. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
- City Data/Trends
- Motel Industry Trends
Property Description. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
- Site
- Building Improvement
Highest and Best Use.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Land Value Analysis. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Sales Comparison Approach. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Final Reconciliation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Certification. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Assumptions and Limiting Conditions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Addenda
- Survey
- Hotel Assessment Report
- Engagement Letter
- Qualifications of Appraisers
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Executive Summary
Property Location 5001 W. 79 Street, Burbank, Cook County, Illinois
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Building Description This is a two-story, 92-room hotel (with an estimated 75
rooms in useable condition) with a full-service
restaurant/tavern, banquet facilities for about 645 people,
and an outdoor swimming pool. The construction design
resembles three connected buildings which have a total
gross building area of 59,820 square feet. The hotel
portion comprises 70% of the total building area and the
restaurant/banquet facilities comprise the remaining 30%.
The improvements were constructed circa 1965. The
building was partially lightly refurbished about five years
ago but has received minimal maintenance and no
renovations in the last five years. Currently the building
is unoccupied and maintained by a receiver.
The building design includes the 92 hotel rooms, a tavern
with seating for about 50 people, three to five banquet
rooms depending on the room divisions, entrance lobbies
for the hotel and tavern, and connecting corridors to each
building component including a covered walkway from
the lobby/restaurant to the hotel building(s). There are six
deluxe suites which feature whirlpool baths and some
special electronic equipment and 86 regular rooms. Most
of the rooms, including suites with whirlpools in the
bathrooms, approximate 285 square feet; about three
deluxe suites are larger with 430 square feet.
The largest banquet room can accommodate 300 guests
and the second largest 150 people. The remaining rooms
can seat 65 persons each and are used for small parties or
business meetings. Common areas shared by the hotel
and banquet/restaurant include the hotel lobby and
washroom facilities on both floors.
Site Description The site contains 161,000 square feet (3.7 acres) more or
less. It has asphalt paving throughout, with striped
spaces for about 180 vehicles. Some additional spaces
could be available on the southwest corner of the lot
which is currently fenced off for storage and a small
shed. The site is fenced on the rear and sides.
Occupancy The motel is currently closed for business. Prior to
closing in 2012 the front desk reported 32 rooms
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Executive Summary
occupied on a typical weekday night (35%). Occupancy
was reportedly higher on weekends. Based on the current
number of rooms available for occupancy, indicated by
the front desk in 2011 as 75, and confirmed by my
inspection, the maximum attainable occupancy is 82%.
Zoning The property is zoned C, Commercial District.
Utilities Municipal water, sanitary sewer, electricity, gas, and
telephone service are all available.
Land-to-Building Ratio 2.69:1.0. The lot coverage is approximately 19%, not
including the pool area.
Approaches to Value
Cost Approach N/A
Sales Comparison Approach $1,125,000
Income Capitalization Approach N/A
Final Value (including FF&E) $1,125,000*
Land Value (as-vacant) $885,000
Final Value with the Hypothetical
Condition that there are
no past-due taxes $1,575,000**
Furniture, Fixtures & Equipment $150,000
Date of Inspection and Valuation February 20, 2013
*Subject to the contingencies and limiting conditions noted on page 18.
**This is a hypothetical value since I am aware of the past due taxes and they must be paid, but this
value assumes that there are no past due taxes, or that they have been paid.
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Premises of the Appraisal
Purpose The purpose of this appraisal is to provide an opinion of the
market value of the fee simple estate of the hotel property
located at 5001 W. 79 Street, Burbank, Cook County,
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Illinois as of the date of inspection. The appraisal is to be
used by our client, Devon Bank, for loan monitoring and
internal planning. It was ordered by Ms. Maddie Meskovich,
Loan Operations Manager with the client.
Scope of Work The scope of work for this appraisal included a complete
appraisal of the property in a summary format. The interior
(including all of the 92 guest rooms) and exterior of the
property were inspected. We previously appraised the
property in J anuary of 2008, November of 2009, and
September of 2011, and reviewed our previous appraisals and
workfile. We also previously appraised this property in 2002
and we reviewed that prior appraisal and file contents. We
also reviewed a Hotel Assessment Report dated October
25, 2010 and prepared by Hotel Source, Inc. which was
provided by the client. This report is included in the
addendum.
The cost approach was not considered applicable because of
the lack of land sales, the deferred maintenance and limited
inspection of rooms, and the extent of estimation required for
obsolescence in this older building as it relates to its various
components in the current market. This approach would not
be used by the market participants in the valuation of this
property, the pricing of which primarily relies on its income
producing capabilities and sale prices of competing
properties.
A reasonably good selection of sales of similar motel/hotel
properties was reviewed and analyzed to determine the value
as found within the sales comparison approach.
The hotel has been vacant and closed for over a year. No
operating information is, therefore, available for the property.
Additionally, significant expenditures will be required to
bring the hotel to a level where it could reasonably be
occupied. Many of the rooms are in a state of disrepair, the
exterior needs repairs, especially the west elevation, and the
condition of the mechanicals and kitchen equipment is not
known. Considering the lack of income and expense data,
coupled with the condition and somewhat unique nature of
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this property, the income approach was not considered
applicable.
Additionally, in order to determine a land value for highest
and best use purposes, we developed an opinion of land value
by researching the limited land sale data available and
utilizing the sales comparison approach.
Contingencies and
Limiting Conditions Though the entire building was available for inspection, the
condition of the mechanicals, roof, and other systems was not
ascertainable. I recommend an inspection by a qualified
engineer or building inspector to determine if repairs are
required. For the purposes of this report, I considered the
condition of the property, and assumed that the mechanical
and structural systems were in operable condition. Readily
observable damage and deferred maintenance (holes in walls,
missing fixtures, damaged finishes, etc.) are considered in my
value opinion.
Finally, it is noted that the 2008, 2009, and part of the 2011
real estate taxes have not been paid and that the 2009 taxes
appear to have been sold. Though requested, we were not
provided with further information regarding the redemption
cost for these taxes and have estimated them at $450,000.
The first installment of the taxes for 2012 (payable 2013) also
has not been paid but is not yet due (due March 1). We
reserve the right to modify this appraisal and the value
opinion upon receipt of actual redemption information.
Property Rights The property rights appraised are fee simple estate. This
interest is defined by the Appraisal Institute's The Dictionary
of Real Estate Appraisal, 5 Edition, 2010, as "absolute
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ownership unencumbered by any other interest or estate,
subject only to the limitations imposed by the governmental
powers of taxation, eminent domain, police power, and
escheat."
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Market Value Definition Market value, as used within this report, is defined as:
The most probable price which a property should bring in a competitive and
open market under all conditions requisite to a fair sale, the buyer and seller
each acting prudently and knowledgeably, and assuming the price is not
affected by undue stimulus. Implicit in this definition is the consummation
of a sale as of a specified date and the passing of title from seller to buyer
under conditions whereby:
(1) Buyer and seller are typically motivated;
(2) Both parties are well informed or well advised, and acting in what they
consider their own best interests;
(3) A reasonable time is allowed for exposure in the open market;
(4) Payment is made in terms of cash in United States dollars or in terms
of financial arrangements comparable thereto; and
(5) The price represents the normal consideration for the property sold
unaffected by special or creative financing or sales concessions granted
by anyone associated with the sale.
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Exposure Time The subject is situated along 79 Street which is a moderately
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traveled road. The location is mixed in land use and has a
significant residential presence. There are, however, several
banquet facilities within two miles west of the subject, as
well as numerous motels/hotels along Cicero Avenue
between Midway Airport and 95 Street, which establishes a
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supporting market for this property type. Primary roadway
exposure, such as that afforded properties fronting Cicero
Avenue, is lacking. Although some demand exists for both
hotel and banquet/restaurant facilities in the supporting
market, the subjects somewhat dated design, fair condition
and required repairs, and distance from Midway Airport will
increase its exposure time. Additionally, the difficulty in
obtaining financing has greatly reduced the pool of potential
investors, especially for larger (25 plus rooms) hotel and
motel properties. Given these factors, the time the property
would have to be on the market, prior to the date of appraisal,
to achieve the indicated market value is estimated at 12 to 18
months.
12 C.F.R. Part 34.42(g); 55 Federal Register 34696, August 24, 1990, as amended at 57 Federal Register
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12202, April 9, 1992; 59 Federal Register 29499, J une 7, 1994.
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Property Information
Legal Description LOT 2, LOT 3, LOT 4, LOT 5, LOT 6, LOT 9, LOT 10 AND LOT 11
IN BLOCK 1 IN GOLFMOOR, BEING A SUBDIVISION OF THE
NORTHEAST 1/4 OF SECTION 33, TOWNSHIP 38 NORTH,
RANGE 13, EAST OF THE THIRD PRINCIPAL MERIDIAN, IN
COOK COUNTY, ILLINOIS.
Zoning The property is situated in Zone C, Commercial District.
Permitted uses: Permitted uses include, but are not limited to, contract
services such as heating, plumbing, roofing, and showrooms,
as well as office supply stores, hardware stores, department
stores, variety stores, food stores, motor vehicle dealers,
home furnishing stores, restaurants including carry-out and
drive-thru windows excluding drive-in establishments, book
stores, florists, depository and nondepository credit
institutions, real estate offices, insurance offices, veterinary
clinics, medical offices, and other business and professional
offices.
Additionally, more than 50 uses are permitted as special uses
including that of the subject, hotels and motels, but also
bowling alleys, bingo parlors, planned developments, public
warehouse and storage, residential care facilities, and truck
rental and leasing.
Parking: Parking requirements vary with the use. Hotels and motels
require one space per guest room, and one for each employee,
plus specified requirements for restaurants, meeting rooms,
and related facilities. Eating and drinking establishments
require one space for every 65 square feet of gross floor area
but in no event less than 12 spaces. Meeting rooms and
banquets are not considered separately; however, meeting
rooms may be closely represented by office properties at one
space per each 350 square feet. Banquet facilities will be
closely represented by eating and drinking establishments at
one space per each 65 square feet at a maximum and will
most likely require less. At these specifications, required
parking will approximate 150 to 200 spaces.
The subject is a special use per its zoning classification and
otherwise appears to be in compliance with code.
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Flood Information The subject is not located in a flood zone area. There are no
panel maps printed for the community of Burbank.
Real Estate Taxes
Permanent
Index No.
2012 Assessed
Valuation
2008
Taxes
2009
Taxes
2010
Taxes
2011
Taxes
2012*
Taxes
19-33-208-003 $627,074 $145,875 $169,957 $61,154 $127,623 $93,806
19-33-208-007 $34,329 $11,026 $8,451 $6,106 $7,253 $4,439
19-33-208-009 $26,757 $8,747 $6,705 $6,521 $7,111 $4,003
19-33-208-010 $23,078 $7,535 $5,776 $5,454 $6,053 $3,452
19-33-208-011 $21,641 $7,087 $5,432 $5,508 $5,862 $3,237
19-33-208-015 $40,175 $13,071 $10,019 $8,616 $10,123 $6,010
19-33-208-016 $40,401 $13,143 $10,074 $8,627 $10,163 $6,044
$813,455 $206,484 $216,414 $101,986 $174,188 $120,991*
*First installment only, due March 1, 2013
The main parcel of the subject property was re-assessed in
2007, at which time the assessment nearly tripled from
$209,049 to $533,173, and it increased further in 2008 to
$696,750, where it remained until a 2010 appeal. The 2010
appeal resulted in an overall tax reduction to $101,986,
roughly half of the previous years taxes. This reduced
burden increased again in 2011, and it appears it will increase
further in 2012, based on the first installment which will be
do on March 1, 2013.
Current real estate taxes (2011, payable 2012) are $2.91 per
square foot based on the gross building area of 59,820 square
feet. Taxes for similar hotels in southwestern Cook County,
which were newer or in renovated condition, ranged from
$2.00 to $4.00 per square foot. Considering the current
condition of the subject, that is it closed for business, and its
secondary location, as well as market conditions, reasonable
taxes would be at the low end of the range at $2.00 per square
foot or $120,000, as rounded.
It is noted that the taxes for 2008, 2009, and part of 2011
have not been paid for any of these parcels. The taxes for
2009 were reportedly sold to a tax buyer. Though redemption
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details were not provided, the total taxes and penalties that
are past due, based on the Cook County Clerk data, are
$436,641. Assuming additional penalties and redemption
fees, the total cost to bring the taxes current (not including
any 2012 tax payable in 2013) is estimated at $450,000. We
are not experts in tax matters and strongly urge the client to
consult with a tax attorney or professional to determine the
exact costs, penalties, and risks involved with these unpaid
taxes. A typical buyer would reduce the price they would be
willing to pay by this amount, and it is subtracted from each
of the approaches to determine a final value indication.
Property History The subject was last purchased by Samuel Alexander, in
October of 2002 for $3,400,000 including a reported
$600,000 in personal property, after listing for $4,400,000.
The subject was previously purchased by Seong D. Lim in
1986, and had previously been a Best Western franchise. The
property was refurbished and updated in 1999. There are no
other transfers of the property reported.
Subsequent to the 2002 purchase, the property was operated
for a few years, then closed in 2005 for repairs and
renovation. It was vacant during that time as a drawn-out
renovation took place. This renovation was reportedly
completed in mid-2009, though there are items of deferred
maintenance that were never completed, and the hotel has
deteriorated since that time. The details are discussed in the
following section. Upon completion, the property was re-
branded as the Midway Airport Hotel, and then, later, an
Americas Best Value Inn. Currently, the hotel is branded as
an American Midwest Hotel (non-chain).
The lender foreclosed on the property in 2012, and it is now
bank-owned. At that time, the property was also closed for
business; it has been closed for at least one year and is
currently maintained by a receiver.
The property is currently listed for sale with Keith Lord of
Lord Financial Advisors LLC (312.944.6270,
keith@lordfinancial.com) for $1,500,000.
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Property Renovation According to Samuel Alexander, the total renovation costs
were approximately $1,200,000, though information included
in our files indicates that previous totals were closer to
$1,535,000. Renovations included new windows, roof, and
exterior stucco, remodeled guest rooms with new doors,
finishes, card locks, HVAC units, and furnishings, a new hot
water tank, new fire alarm system, some lobby upgrades, a
new fence, and a partially filled pool to eliminate the deep
end.
At the time of inspection, most of the rooms, the exterior, and
the common areas showed deferred maintenance and required
repairs. Items observed included holes in the walls, missing
ceiling tiles, unfinished wall and ceiling patching, damaged
or stained carpet, missing and broken tiles, an EIFS system
pulling away from the exterior walls (especially the west
elevation), and a general lack of maintenance. The condition
of the mechanicals is unknown, and the water and gas utilities
have been shut off. The cost to bring the property to a
habitable state is not known, but is considered to be
significant.
Environmental Factors An environmental audit was not available. However, we
note that an old construction inspection identified an
asbestos-insulated, old, water drum/tank and recommended
its removal. The report did not, however, indicate if the
asbestos material was considered friable such that removal
was necessary immediately. Typically, older disconnected
equipment with such insulation are left unattended until the
building undergoes major renovation or demolition.
Consequently, until an environmental audit becomes
available, for purposes of valuation, we consider the property
free and clear of all hazardous materials and related
substances. Should the audit show otherwise, a deduction for
the market value of an clean-up costs indicated as of the date
of appraisal would be required. We recommend careful
review of the environmental audit to be completed and
reserve the right to adjust the value herein based on its
findings and recommendations.
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Property Location
City Data/Trends The City of Burbank is located 15 miles southwest of the
Chicago Metropolitan Business District. It is bounded by the
communities of Oak Lawn, Bridgeview, Hickory Hills,
Bridgeview, and Chicago. The population according, to the
2010 census, was 28,925, a 4% increase over the 2000 figure
of 27,902, showing a relatively stable overall population for
this built-up community.
The community is largely residential in character and has a
resident composition mostly of homeowners. Housing styles
include ranches, brick bungalows, Cape Cods and split-levels.
Prices for single-family homes range from $25,000 to
$400,000. The average sale price in the last 12 months was
$130,247, showing continued annual declines since the 2007
height of the residential market when the average sale price
was $280,000. There are few attached housing alternatives,
with only eleven sales in the last 14 months averaging
$62,254, also down dramatically from the high 2007 figure of
$160,000. Apartments with one and two-bedroom units are
available at about $700 to $950 per month; three bedrooms
are less frequent and rent for about $1,100 plus. Rental of
houses is not uncommon with most typical ranch and split-
level styles renting for $1,200 to $2,000 per month.
The community is conveniently located to recreation, schools
and public transportation. It is situated between Interstate 55
and the Tri-State Tollway and is a 30-minute drive to the
Chicago Loop. Midway Airport is 10 minutes away and
OHare Airport is a 45-minute ride. The Metra train offers
about a 30- minute ride to the Loop with stations in nearby
Oak Lawn and Summit.
Most concentrated retail and shopping is at the intersection of
79 Street and Cicero Avenue where there is a J ewel/Osco
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and strip shopping center, Toy-R-Us, PetSmart, Sports
Authority, Sam Ash Music, OfficeMax, Kohls, Best Buy,
Circuit City, CostCo, Target, the Ford City Mall indoor
shopping center, and a large variety of local and smaller
retailers.
Burbank is an established community with stable community
values in all property sectors. Most development is old and
lacks modernization. That, in conjunction with the age and
overall average condition of the properties, will limit value
increases over time.
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Property Location
Motel Industry Trends Based on market reports reviewed, performance in the
hospitality industry bottomed out in 2009, and has seen
considerable positive trends in the last year.
National Trends Industry forecasts are positive for the hospitality industry
according to market reports reviewed. In the March 2012
edition of Hotel Horizons, PKF Hospitality Research
predicts that as a result of a long span of occupancy growth
(growth in lodging demand has greatly exceeded the supply
increase since early 2010) and a 4.1% gain in average daily
room rates (ADR), revenue per available room (RevPar) for
U.S. hotels will rise 5.8% in 2012. PKF also observed new
records in metropolitan area lodging demand, and forecasts
greater profitability for the next two years, which will likely
result in an increase in hotel investment.
According to the August 2012 Hospitality Directions - U.S.
Edition published by Pricewaterhouse Coopers, lodging
demand continues to expand, boosting occupancy. Moderate
economic growth is expected for 2012, firming in 2013.
They predict RevPAR growth of 7.2% in 2012, followed by
5.6% in 2013, building on the strong 8.2% increase in 2011.
According to the Hospitality Research Semiannual Report
(year end 2012) prepared by Marcus and Millichap, a
combination of steady room demand and limited construction
will generate a
120-basis point
rise in national
occupancy in
2012 to 61.2%,
the highest year-
end level in five
years. Property
operators will
continue to push
daily rates higher
during the year,
resulting in a
4.2% bump in the ADR, despite value-conscious travelers
tempering the increase. RevPAR is increased 6.5% in 2012
due to minimal additions to supply. 2013 is projected to be
another positive year, though with tempered increases
compared to 2012.
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Property Location
Local Trends In May 2012, the hospitality research firm STR Global
reported that RevPAR in Chicago rose 10.1% in 2012, one of
the leading markets nationwide. Occupancy rose in 2012 to
75.2%, from 72.2% in 2011. They anticipate continued ADR
growth into 2013. The data provided refers to the hospitality
market as a whole. The limited service/economy segment, of
which the subject is a part, is projected to experience similar
performance based on the reports and data we reviewed.
A similar positive outlook is expressed by Marcus and
Millichap in their Midwest regional report which shows
increases in occupancy, ADR and RevPAR, with overall
9.2% revenue growth in 2012.
Overall, the outlook for all motel and hotel properties is
positive with increases in room rates and occupancy expected
by major market analysts for the next few years.
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Property Location
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Property Description
Site
Location The site is located on the south side of 79 Street near
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LeClaire Avenue in Burbank, Illinois. It has frontage at
LeClaires intersection with 79 Place which runs along the
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southern site boundary.
Description The site has 161,000 square feet (3.7 acres) more or less.
With the exception of a roughly 120' x 167' extension on its
northeast corner, it is generally rectangular in shape. The
land to building ratio is 2.69 to 1 and the lot coverage is
approximately 19%, not including the pool area.
Site Improvements There are concrete service walks and asphalt paving
throughout with striped spaces for about 180 vehicles. Some
additional spaces could be available on the southeast corner
of the lot where currently there is a small shed and storage
area. The site has wood privacy fencing around the parking
areas. The site improvements are in average condition; the
parking lot is in fair condition requiring resurfacing and
restriping at the minimum.
Utilities All utilities, gas, water, sewer, are all connected.

Easements There were no adverse easements or encroachments noted on
the survey.
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Building Improvement
General This is a two-story, 92-room hotel with a full-service
restaurant/lounge, banquet facilities for about 645 people, and
an outdoor swimming pool. Reportedly only 75 rooms are
currently fit for occupancy, though my inspection revealed
additional rooms that required at least some refreshing. The
construction design resembles three connected buildings
which have a total gross building area of 59,820 square feet.
The hotel portion comprises 70% of the total building area
and the restaurant/banquet facilities comprise the remaining
30%.
The improvements were constructed circa 1965. The
building was recently lightly renovated, though it appears that
the renovation was not completed and there has been nominal
maintenance and no renovation in the last two years, resulting
in an overall below average condition for the subject as
compared with similar properties.
The building design includes the hotel rooms, a tavern which
seats about 50 people including the bar, up to three to five
banquet halls depending on the room divisions, entrance
lobbies for the hotel and restaurant, and connecting corridors
to each building component including a covered walkway
from the lobby/restaurant to the hotel building(s). There are
six deluxe suites which feature whirlpool baths and some
special electronic equipment, and 86 regular rooms. Most of
the rooms, including suites with whirlpools in the bathrooms,
approximate 285 square feet; about three deluxe suites are
larger, containing 430 square feet.
The largest banquet room can accommodate 300 guests, and
the second largest 150 people. The remaining rooms can seat
65 persons each and are used for small parties or business
meetings. Common areas shared by the hotel and
banquet/restaurant include the hotel lobby and washroom
facilities on both floors.
Construction The building has concrete block support walls and stucco, or
other EIFS covering, with cedar trim frame exterior walls,
with partial brick veneer on the east side of the building. The
exterior of the building is partially renovated, though much of
it is in dilapidated condition. Windows are fixed and
casement combination with metal framing. The building has
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a poured concrete foundation with a partial unfinished
basement housing the laundry facilities, mechanicals, and
storage. A single heating and air-conditioning unit provides
climate control to the building, the individual guest rooms
have wall-mounted HVAC units, many of which were
replaced in the last seven years. Electrical capacity has been
updated to 2,000 amperes. There are four public restrooms,
one womens and one mens on each floor. The total number
of fixtures includes roughly 10 wash sinks, 13 water closets,
and three urinals and is adequate for moderate use of the
banquet facilities. The first floor bathrooms were remodeled,
though some of the tile has fallen off and their condition is
deteriorating, while the upper floor bathrooms have not been
remodeled.
Floor Access The second level and basement are accessed by staircases, the
lobby staircase having an open design with metal railings.
There is no elevator. A dumbwaiter lifts food and hotel
supplies to the second floor.
Finish The building has carpet and ceramic floor covering, with
marble in the lobby. Walls are wallpaper covered, stucco,
paneled, mirrored or painted. Door trim is average grade;
interior doors are recently replaced security doors with card
readers. Ceilings are acoustic tile, drywall with stucco finish,
or fire retardant sheeting.
Condition Below Average overall. About half of the individual guest
rooms have been lightly remodeled with new carpet, wall
covering or paint, and windows; the bathrooms have been
repaired, with modest remodeling where necessary. Some of
the finishes are still outdated. Some of the guest rooms
require refreshing or repairs, and 15 or so are gutted or in
poor condition. The banquet facilities and restaurant/lounge
have also been lightly remodeled but show wear. The
common hallways have been partially remodeled with new
carpet, repaired ceramic tile, paint and new light fixtures,
though some poor drywall repairs, holes, or missing tiles
were noted. The two kitchens have equipment, but are dirty
and in a state of disuse. The lobby has been lightly
remodeled, as has the exterior, though there are missing wall
panels and unpainted areas, and much of the finish system,
especially on the west wall, is bubbling and peeling. The roof
has been replaced and appeared to be in good condition when
inspected in 2009; according to the receiver, any leaks have
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been patched. Mechanical upgrades include many of the
individual room HVAC units and the updated electrical
service, but the condition of the mechanicals is not known.
The water heaters, common area heating/cooling, and pool
mechanicals are dated and their condition is unknown, but
assumed to be functional.
Quality Average construction quality, typical for similar vintage
limited service hotels and motels.
Utility The layout of the facilities is average. Room sizes are typical,
although the lobby is small for a facility of its size and there
is no elevator, the latter being a negative factor for use of the
second floor banquet facilities and guest rooms.
ADA/IAC Compliance The Americans With Disabilities Act (ADA) took effect in
J anuary 1992 and the Illinois Accessibility Code (IAC)
became effective in October 1997. Both of these laws are
subject to administrative and judicial interpretation. It is
noted that there is no elevator for access to the second floor;
however, there are rooms on the first floor and there is one
room specifically designed for handicap use.
A specific analysis of the property to determine its status in
relation to ADA/IAC is considered to be beyond the scope of
this assignment. No allowance for possible costs related to
ADA enforcement has, therefore, been included in this
valuation.
Furniture, Fixtures, and
Equipment No listing of furniture, fixtures, and equipment (FF&E) was
provided. FF&E includes a bed, dresser, night table,
television, lamp, and chair for each room, as well as roughly
750 chairs and 75 tables for the banquet facilities, and kitchen
equipment for two kitchens. The estimated depreciated value
for the room furnishings is $1,000 per room, or ($1,000 x 92)
$92,000. The estimated depreciated value of the banquet
chairs and tables is $20,000, and the depreciated value of the
kitchen equipment is estimated at $40,000 for a total FF&E
of $150,000 (as rounded). Since it appears that computer and
phone systems have been removed, and the office furnishings
are in fair condition, no additional value is added for office
equipment or operation-related items. The total estimated
value of the FF&E is $150,000.
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Highest and Best Use
Definition Highest and best use is described by the Appraisal Institute in
The Dictionary of Real Estate Appraisal, 5 Edition, 2010,
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as follows:
the reasonably probable and legal use of vacant land or an improved property
that is physically possible, legally permissible, appropriately supported,
financially feasible, and that results in the highest value.
The purpose of the appraisal is to estimate market value. The
highest and best use analysis identifies the most profitable,
competitive use to which the property can be put. Therefore,
highest and best use is a market driven concept.
Procedure In reaching an opinion as to the highest and best use, we have
taken into consideration the previously mentioned definition.
There are essentially four stages of analysis. The use must
be:
1. Legally Permissible
2. Physically Possible
3. Financially Feasible
4. Maximally Productive
As Vacant Physically Possible: The subject is a level site which is large
enough to support a variety of commercial uses. Its
surrounding district is a mix of commercial and residential
uses. Relative to its size, shape, and flat terrain, there would
be no reason to conclude that the site would not be similarly
able to support a building improvement.
Legally Permissible: The subjects zone permits a wide
variety of commercial uses. A purely residential development
would require a zoning change, which is not likely,
considering the adjacent commercial uses to the east and
west, and the desire of most municipalities to retain the tax
benefits of commercial development.
Financially Feasible: Commercial entities are supported in
the vicinity and have continued demand. A variety of service
business and/or commercial properties would have support,
particularly those which may require greater parking capacity
given the larger site size. Public transportation is available
nearby.
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Highest and Best Use
Maximally Productive: The highest and best use will be that
use which generates the highest income to the supporting land
after all costs of development excluding land, i.e., labor,
capital, and entrepreneurship, are satisfied. The maximally
productive use will be one which will utilize the large site
such as a hotel/motel, medical office complex, senior
housing/assisted living complexes, storage facility, etc. A
variety of uses would provide a similar income to the
supporting land over a comparable period of time.
The highest and best use as vacant is for a commercial
development.
As Improved The subject property is improved with a hotel property which
continues to contribute to the total property value and is
expected to do so into the foreseeable future. To raze the
improvements and sell as vacant land is not financially
feasible considering the land value conclusion in this report
($885,000) and the demolition costs which would likely total
around $300,000 to $400,000, considering the size and
construction of the building, and the pool, which would need
to be removed and filled. To replace the structure with a new
building would not be likely given its less visible location off
79 Street which is a more moderately traveled road than
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Cicero Avenue. There have been at least three hotels
constructed in the last decade, however, on Cicero Avenue,
which supports the general demand for lodging in the area.
As noted in the market trends section of this report, the
hospitality market is doing quite well, and demand for rooms
continues to rise, while very little new hotel/motel
construction is planned. The highest and best use of the
improved property is to repair and renovate the building for
limited service hotel use.
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Land Value Analysis
Land Value Analysis In order to determine the value of the land for the
determination of a highest and best use, I utilized the
sales comparison approach and considered the following
land sales:
Comparable Land Sale Summary
Sale
No.
Location
Sale
Date
Sale Price Zoning
SqFt Site
Area
Price/
Sq. Ft.
1 7143 W 64 Place
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Chicago
11-11 $600,000 RT3.5
RM4.5
125,888 $4.77
2 6246 J oliet Road
Countryside
10-11 $600,000 B-1 113,282 $5.30
3 6125 East Avenue
Hodgkins
05-12 $400,000 C 62,600 $6.39
4 14230 Cicero Avenue
Crestwood
10-11 $450,000 C 57,000 $7.89
List 5 7511 S Harlem Avenue
Bridgeview
Listing $999,999 Comm. 191,664 $5.22
List 6 10604 S Southwest Highway
Chicago Ridge
Listing $319,000 C-2 72,250* $4.42
Subject 5001 W 79 Street
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Burbank
- - - - C 161,000 - -
*Net buildable area
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Land Value Analysis
Analysis Our search emphasized the most recent sales of reasonably
similar zoned land parcels within similar locations in
southwest Chicago and the near west and southwest suburbs.
Active listings are also considered. Sales are very limited in
these fully built-up locations, and the sales and listings
included above are considered the most similar of the limited
data available.
All sales have access to sewer and water utilities and have
similar accessibility. All four sales closed during the past 18
months. The market for development land appears to have
been stable over this time period and no adjustments were
required for market conditions. Adjustments are summarized
as follows.
Land Sale No. 1 Land Sale No. 1 is a highly similar property. It has a similar
location on a secondary street near the primary thoroughfare
of Harlem Avenue. This area is primarily residential and
industrial, with less commercial potential, and is adjusted
upward. Further upward adjustment is required for its more
restrictive zoning. The net adjustment is upward.
Land Sale No. 2 This property has a highly similar location on a secondary
arterial, a half mile from a primary arterial (Mannheim Road).
It also has a similar mixed area with commercial, service, and
residential properties. It is reasonably similar in size with a
similar zoning. No adjustment was necessary.
Land Sale No. 3 This is a parcel with a less-trafficked frontage, but more
commercial synergy, being located behind the Quarry
shopping center in Countryside, and across the street from a
Menards. A downward adjustment for location was required.
This sale is also adjusted downward for its smaller size. This
property was subject to foreclosure at the time of sale, but it
received significant market exposure (433 days) at higher
prices, and is considered indicative of the market. The net
adjustment for this sale is downward.
Land Sale No. 4 This property is located on a more heavily traveled
thoroughfare in a more dense retail location, and is adjusted
downward. It is also adjusted downward for its smaller size.
This was a short sale, but the property received adequate
market exposure (914 days) at higher prices, and is
considered indicative of the market. The net adjustment for
this sale is downward.
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Land Value Analysis
Land Listing No. 5 This property has a relatively similar and nearby location, but
is on a busier street and is part of a Bridgeview
redevelopment effort with access to TIF funds. A downward
adjustment for location is required. This is a larger parcel
with an irregular shape which significantly limits its frontage.
Upward adjustments are required for size and utility. The net
adjustment for this listing is upward, but as a listing, it will
represent the high end of the range.
Land Listing No. 6 This property has a similar location on a similarly-traveled
thoroughfare just east of Harlem Avenue. The rear of the site
backs the Cal-Sag Canal and is in a flood plain. Though the
analysis is based on price per net square foot, the Cal-Sag
frontage is considered a negative factor, requiring upward
adjustment. The net adjustment for this listing is upward, but
as a listing, it will represent the high end of the range.
Conclusion The greatest emphasis is afforded Land Sale Nos. 1 and 2,
considering their similar sizes and locations. The other sales
and listings also support the value indicated by these two
sales after adjustment. The indicated value of the subject site,
as-vacant, is $5.50 per square foot, or ($5.50/SqFt x 161,000
SqFt), as rounded . . . . . . . . . . . . . . . . . . . . . . . . . $885,000.
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Sales Comparison Approach
Definition The sales comparison approach is an appraisal technique by
which a market value indication is derived by comparing the
subject property to current, comparable sales and offerings
relative to their respective prices. Variations in comparable
properties are analyzed, quantified and adjusted to more
closely reflect the features of the subject property. The
adjusted values are then correlated to obtain a simulated value
of the subject property. The reliability of this technique is
dependent upon:
1. The availability of sales data.
2. The degree of comparability of each property with the
subject property.
3. Reliability of sales data.
4. Knowledge and adjustment of unusual conditions
effecting price or terms of sale.
The sales comparison approach is based upon the principle of
substitution. This implies that a prudent person will not pay
more to buy or rent a property than it will cost to buy or rent
a comparable property.
Procedure 1. Conduct research to obtain the most recent and
comparable property sales and listings in the subject
market area.
2. Analyze and make adjustments to comparable sales
considering all relevant differences including time of
sale, location, physical and functional features, financing
terms and other pertinent factors that affect value.
3. Analyze and interpret the data on the basis of a common
and relevant unit of comparison, such as price per square
foot of building area. Correlate the simulated values to
obtain a value indication for the subject property.
The following sales were utilized in the comparable sale
analysis. Aerial photographs are utilized to show the full
property of each comparable; actual photographs are retained
in our file.
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COMPARABLE SALE NO. 1
Location Days Inn Motel
1900 N. Mannheim Road, Melrose Park, Illinois
Description This is a 47-year-old, 99,034 square foot, two-story, three-
building, 121-room motel property which has a small
banquet/conference component. All rooms are standard sizes.
It was in average to below average condition at the time of
sale. Its site size is 110,124 square feet indicating a land-to-
building ratio of 1.11 to 1 and a lot coverage of 40%.
Sale Information This property was sold in October of 2010 by Alfloop LLC to
Annie Hospitality in October of 2010 for $2,100,000
($17,355 per room; $21.20 per square foot). Financing was
conventional. The sale information was obtained from
CoStar COMPS and confirmed with public records as
document 1034233064. The property was previously sold in

March of 2005 for $3,700,000.
Comments The sale price included furniture, fixtures, and equipment
which was not broken out. Subsequent to sale the property
was renovated. The ADR for this motel was $50.00.
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Location Holiday Inn Matteson
500 Holiday Plaza Drive, Matteson, Illinois
Description This is a Holiday Inn hotel and conference center built in 1982. It
was in below-average condition at the time of sale. The property
includes 203 guest rooms on five floors, with 123 king beds, 72
doubles, and eight suites. It also includes 10,000 square feet of
meeting space (including a 1,200-seat theater style room), a
restaurant and lounge, indoor pool, sauna, and fitness room,
atrium, and adequate parking. Its total size is 149,995 square feet.
Its site size is 454,147 square feet, indicating a land-to-building
ratio of 3.03 to 1.0, with a lot coverage of 12%.

Sale Information This property was sold in April of 2011 by Illinois Lincoln
Hospitality Return LLC (Armed Forces Bank) as an REO property
to Matteson Hospitality Real Estate LLC for $2,625,000 ($12,931
per room; $17.50 per square foot). Financing was conventional
with a 43% down payment. This sale information was obtained
from CoStar COMPS , the Village of Matteson, and other public
resources. The document number is 1111818048.

Comments Furniture, fixtures, and equipment were included but not broken
out. The property required significant renovations.
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Location Baymont Inn & Suites
510 East End Avenue, Calumet City, Illinois
Description This is the sale of a 39,292 square foot, three-story with
elevators, 82-room hotel which has a fitness center, indoor
pool, business center, but one very small meeting space (12
person capacity). There are king and double rooms, and
suites. It was 10 years old and in good condition at the time
of sale. The irregular site contains 130,680 square feet which
indicates a land-to-building ratio of 3.33 to 1.0 with an
approximate lot coverage of 10%.
Sale Information This property was sold in May of 2011 by Calu Hospitality
LLC to Vishnu Hospitality LLC for $2,300,000 ($28,049 per
room; $58.54 per square foot). Financing was conventional
with a 50% down payment. The sale information was
provided by CoStar COMPS , the Cook County Assessor,
aerial photographs, Sidwell Maps and an exterior inspection.

The document number is 1115340038.
Comments Room rates at the time of sale were $75 to $85. The sale
price includes FF&E.
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Location Hampton Inn
205 W. North Avenue, Carol Stream, Illinois
Description This is a six-story with elevator, 11-year-old, 110-room hotel
property which has a fitness center, business center, indoor
pool, and seven small meeting rooms with capacities from 35
to 80 persons each. It contains 70,624 gross square feet. The
110 rooms are all either king or double rooms. The site size
is 144,184 square feet indicating a land-to-building ratio of
2.04 to 1 with a lot coverage of about 8%.
Sale Information This property was sold in April of 2011 by Chicago Title
Land Trust Company u/t/a 119984-08 to Blackhawk Lodging
Inc. for $3,000,000 ($27,273 per room; $42.48 per square
foot). Financing was conventional. The sale information was
provided by Hilton Inns, the Bloomingdale Township
Assessor and DuPage Recorder, and CoStar COMPS . The
document number is R2011-060651.

Comments The sale included a reported $1,000,000 in FF&E. Current
room rates are $120.00 to $150.00.
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Location Super 8 Bridgeview
7887 W. 79th Street, Bridgeview, Illinois
Description This is a 22-year-old, 24,327 square foot, three-story motel
property with 55 rooms in one building. All rooms are
standard sizes. It was in average condition at the time of sale.
The site size is 54,200 square feet indicating a land-to-
building ratio of 2.23 to 1 and a lot coverage of 15%.
Sale Information This property was sold in J anuary of 2011 by TJ C Prop
Holdings LLC to Chicago Title Land Trust Co. Tr.
#8002356272 for $2,800,000 ($50,909 per room; $115.10 per
square foot). Financing was provided by the seller in the form
of a two year $2,250,000 loan. Details of the rate are not
known. The sale information was provided by LoopNet and
the Cook Country Recorders office. The document number
is 1102104098.
Comments The sale included all FF&E (allocation not disclosed).
Current room rates are $50.00 to $69.00.
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COMPARABLE LISTING NO. 6
Location Super 8 Motel
3010 N. Mannheim Road, Franklin Park, Illinois
Description This is a two-story, three-building, 47-year-old, 93-room
motel property which contains 61,968 square feet. Rooms are
standard size. Much of the main hotel building is fire
damaged and requires significant renovation. The rear
buildings are fully intact. The site size is 53,250 square feet
indicating a land-to-building ratio of 0.86 to 1 and a lot
coverage of about 58%. There is apparently also
underground parking.
Sale Information This property was listed for sale at $1,500,000 ($16,129 per
room; $24.21 per square foot) with Koening and Strey Real
Living of Elmhurst.
Comments The asking price includes FF&E. Prior to sale, the motel was
in below-average condition. It was closed for business. After
listing for about a year, this property was destroyed by fire
and is currently a vacant lot.
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COMPARABLE LISTING NO. 7
Location Airport Inn
4419 S. 11 Street, Rockford, Illinois
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Description This is a two-story (with a one-story office and banquet
section), 53-year-old, 110-room motel property which
contains 51,233 square feet. Rooms are standard size.
Amenities include two banquet rooms, a bar, and an outdoor
pool. The site size is 177,282 square feet indicating a land-
to-building ratio of 3.46 to 1 and a lot coverage of about 17%.
This property is very distant, but was considered due to its
similar size, age, and very close proximity to Chicago
Rockford International Airport.
Sale Information This property is currently listed for sale at $1,250,000
($11,364 per room; $24.40 per square foot) with Baird &
Warner of Rockford.
Comments The asking price includes FF&E. This property previously
sold in fair condition in 2007 for $900,000. It is assumed that
this price did not include FF&E, since it is assessor-reported.
Based on August 2012 imagery, this property appears to be in
average condition.
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Comparable Sale Data Summary
Sale
No.
Size
Rooms
Sale
Date
SqFt/
Room
Age
Lot
coverage
Price/
Room
Price/
SqFt
Amenity
*
1 99,034 121 10-10 818 47 40% $17,355 $21.20
B
2 149,995 203 04-11 739 29 12% $12,931 $17.50
B,L,IP,F
3 39,292 82 05-11 479 10 10% $28,049 $58.54
S, B, IP, F
4 70,624 110 04-11 642 11 8% $27,273 $42.48
B,IP,F
5 24,327 55 01-11 442 22 15% $50,909 $115.10
N/A
List 6 61,968 93 2011 666 47 58% $16,129 $24.21
N/A
List 7 51,233 110 Curr. 466 53 17% $11,364 $24.40
B,P,L
Subj 59,820 92 650 47 19%
S,B,L,P
*Amenities Coding: S=Suites, B=Banquet/Meeting Rooms, L=Lounge/Restaurant, P=Pool, IP=Indoor Pool, F=Fitness Center.
Comparable Sales Map
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Analysis The subject is somewhat unique to the Chicagoland area,
being an older, partially renovated motel displaying many
features of a full service motel or conference center (large
banquet/meeting rooms, kitchens, pool) but with a
functionality, quality, and design more similar to an economy
or limited service motel (no elevator, no room service, dated
design, sprawling two-story layout). Very few truly similar
properties were found in our extensive search of the
Chicagoland area. As a result, we utilized sales of both motel
and hotel properties, limited and full service designs.
Our search extended throughout Chicagoland, but centered
primarily on areas surrounding Chicagos OHare
International and Midway Airports. Our search also
emphasized relatively recent sales (in the last three years) in
order to best reflect the current hospitality market. We also
searched for listings of available hotel and motel properties
and found very few listing in the entire Chicagoland area.
While this may indicate there is some pent up demand, it is
also an indication that in the current market almost all owners
are choosing to hold their investment until market conditions
improve. This is due to the very limited number of qualified
buyers that can provided 50% down payments for this
property type in the current lending climate.
Individual sale details and adjustments are as follows:
Sale No. 1 This is the most similar sale located in the Chicagoland area.
It is at the relatively busy corner of North Avenue and
Mannheim Road, about five miles south of OHare Airport.
This location was considered slightly superior due to
visibility and proximity to a busier airport. It is a larger
building with more rooms and is adjusted upward. At the
time of sale it was operating, but required significant
renovations and is considered slightly superior to the subject
in overall condition. It lacks the subjects amenities including
large banquet rooms and pool, and it has considerably less
parking. Overall this sale is adjusted upward 10% to $23.32
per square foot and $19,091 per room.
Sale No. 2 This hotel is located in an area further from airports in the far
south suburbs. It does have highway visibility from Interstate
57 and good access, but the location overall is distant from
airports and considered significantly inferior. This is a
former Holiday Inn which was underperforming. It was
foreclosed on and displayed significant deferred maintenance
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at the time of sale, similar to the subject. It is adjusted
upward for its considerably larger size. It has similar
amenities overall, commensurate with its size, though the
indoor pool is considered superior. Overall, this sale is
adjusted upward 25% to $21.88 per square foot and $16,164
per room.
Sale No. 3 This property is located in Calumet City with exposure to
Interstate 94, but no airport proximity. It is adjusted upward
for location. This is a smaller building and is much newer
and in significantly superior condition, requiring downward
adjustments. It is adjusted upward for its inferior banquet and
meeting space, and a lack of a restaurant, though its indoor
pool is superior. It requires upward adjustment on a per room
basis for the quite small average room size. The net
adjustment for this sale is downward 50% to $29.27 per
square foot and 25% to $21,037 per room.
Sale No. 4 This property is located in the western suburbs and is not
close to an airport or a major interchange. It caters more
toward residents and businesses in the area, but generates
much higher room rates than the subject. Location
adjustments are offset. It is a more modern facility with
superior condition and appeal and is adjusted downward
significantly. It has inferior amenities overall with no
banquet or restaurant, requiring an upward adjustment. The
net adjustment for this sale downward 40% for adjusted price
indications of $25.49 per square foot and $16,364 per room.
Sale No. 5 This property is a Super 8 branded hotel that was in good
condition at the time of sale. It is not truly comparable due to
its much smaller size and far superior condition. It is
included due to its close proximity and similar location as the
subject, and to display ongoing demand and prices paid for
well-managed operating hotels. This sale would require
downward adjustments in excess of 50%
Listing No. 6 This is the only listing found of a similar property in the
Chicagoland area. This listing expired without a sale and the
building has since been razed. Since it was fire damaged, it
would have required significant renovations and upward
adjustment. As a listing, it is not really indicative of market
value except to set a high end of the range, and is included for
informational purposes only.
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Listing No. 7 This listing is very distant, in Rockford. This listing was not
inspected, but a good selection of listing photos, and Google
imagery from August 2012 was reviewed. This listing was
included due to its very similar size, number of rooms, and
amenities, and its close proximity to a commercial airport.
Downward adjustment is required for condition, and upward
adjustments are required for location, partially offset by the
low taxes ($36,000 for 2011) and immediate proximity to the
airport. Overall, this listing requires upward adjustment.
Conclusion After adjustments, the four primary sales have the following
adjusted prices:
Sale 1 2 3 4
$/SqFt $23.32 $21.88 $29.27 $25.49
$/Room $19,091 $16,164 $21,037 $16,364
Price Per Room On a price per room basis, after adjustment, the sales are
roughly in the $16,000 to $21,000 range. Sales 1 and 2 are
most similar overall with prices at both ends of the range.
The subject has quite a bit of non-room income potential
which will support a value near the higher end of the range,
but it also has significant deferred maintenance and 17 of the
rooms are completely unuseable. All sales are recent and
relatively mutually supportive. The indicated value for this
unit of comparison, considering the deferred maintenance and
required renovations, is $18,000 per room or ($18,000 per
room x 92 rooms, as rounded).. . . . . . . . . . . . . $1,660,000.
Price Per Square Foot On a price per square foot basis, after adjustment, the sales
are roughly in the $21.00 to $29.00 range. No single sale is
emphasized, though Sales 1 and 2 are most similar in
condition, but much larger overall, and Sale 4 is most similar
in square footage per room. Considering this, the indicated
value for this unit of comparison is at the middle of the range,
at $25.00 per square foot or ($25.00 x 59,820 square feet, as
rounded).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,500,000.
Reconciling the two units of comparison, giving similar
emphasis to both units of comparison, the indicated value is
.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,575,000
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Deduction for Real Estate Taxes As discussed on pages 21-22 of this report, the past due real
estate taxes will require redemption before this property can
be sold and this cost is estimated at $450,000. Therefore, the
indicated value by the sales comparison approach as-adjusted
for the taxes is ($1,575,000 - $450,000). . . . . . $1,125,000.
The value indicated by the sales comparison approach is:
.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,125,000.
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Final Reconciliation
Summary The values attributed to the various approaches are as
follows:
Sales Comparison Approach $1,125,000
Income Capitalization Approach N/A
Approaches to Value
Cost The cost approach was not utilized considering the atypical
design of the subject and the difficulty in estimating a base
cost figure. Also, the subject suffers all three forms of
depreciation: physical, due to typical wear and tear, deferred
maintenance, and the age of the building, functional, due to
its sprawling design and lack of elevators, and its excess land
area, and external due to its location more distant than typical
from Midway Airport, and its limited commercial exposure
on a primarily residential street. The level of uncertainty will
reduce the validity of this approach to a point where it is no
longer applicable.
Sales Comparison The sales comparison approach involves the comparison of
the subject to recent sale transactions of properties with
similar utility. Due to the subjects atypical design, with full-
service amenities and economy-class quality and design,
finding truly comparable properties was difficult. However,
a reasonably comparable mix of recent sale transactions and
listings was researched and compared to the subject. This
data led to a reasonably supported conclusion. The sales
comparison approach is emphasized.
Income Capitalization The income capitalization approach is a good indicator of
value for investment-grade hospitality properties where a
strong income and expense and occupancy history is
available. This is certainly a property which would be
purchased for its income potential, but due to a complete lack
of any financial, occupancy, or historical data for the subject,
coupled with its atypical design and income structure, with
banquet, tavern, and hotel components, as well as the current
condition and required repairs, results in an income approach
with little validity. The income approach was not considered
applicable or reliable, and was not utilized in this appraisal.
th
Final Reconciliation
Value Conclusion The sales comparison approach is the only meaningful
approach for this property. It is our opinion that the market
value of the subject property, including FF&E, as of February
20, 2013, is. . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,125,000.
ONE MILLION ONE HUNDRED TWENTY-FIVE DOLLARS

th
Certification
I certify that, to the best of my knowledge and belief:
1. The statements of fact contained in this report are true and correct.
2. The reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting
conditions, and are my personal, impartial, and unbiased professional analyses, opinions, and conclusions.
3. I have no present or prospective interest in the property that is the subject of this report, and no personal interest
with respect to the parties involved.
4. As stated in the Scope of Work, I have performed services, as an appraiser, regarding the property that is the
subject of this report within the three-year period immediately preceding acceptance of this assignment.
5. I have no bias with respect to the property that is the subject of this report or to the parties involved with the
assignment.
6. My engagement in this assignment was not contingent upon developing or reporting predetermined results.
7. My compensation for completing this assignment is not contingent upon the development or reporting of a
predetermined value or direction in value that favors the cause of the client, the amount of the value opinion,
the attainment of a stipulated result, or the occurrence of a subsequent event directly related to the intended use
of this appraisal.
8. My analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with
the Uniform Standards of Professional Appraisal Practice.
9. The use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly
authorized representatives.
10. I have made a personal inspection of the property that is the subject of this report.
11. No one provided significant real property appraisal assistance to the person signing this certification.
12. The reported analysis, opinions, and conclusions were developed, and this report has been prepared, in
conformity with the Code of Professional Ethics and Standards of Professional Appraisal Practice of the
Appraisal Institute.
13. The use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly
authorized representatives.
14. As of the date of this report, I have completed the continuing education program of the Appraisal Institute and
the Standards and Ethics Education Requirement of the Appraisal Institute for Associate Members.
Date: February 22, 2013
Illinois License No. 553.001385 (exp. 9-30-13)
th
Assumptions and Limiting Conditions
This appraisal is subject to the accuracy of the legal description furnished the appraiser; however, we can assume no
responsibility of matters legal in nature, nor can we render an opinion as to the title which is assumed to be marketable. All
existing liens and encumbrances have been disregarded and the property is appraised as though under responsible ownership
and competent management.
The information furnished by others is believed to be reliable. However, no warranty is given for its accuracy.
All engineering is assumed to be correct. Any plot plans and illustrative material in this report are included only to assist the
reader in visualizing the property.
It is assumed that there are no hidden or unapparent conditions of the property, subsoil, or structures that render it more or
less valuable. No responsibility is assumed for such conditions or for arranging for engineering studies that may be required
to discover them.
It is assumed that there is full compliance with all applicable federal, state, and local environmental regulations and laws
unless otherwise stated in this report.
It is assumed that all applicable zoning and use regulations and restrictions have been complied with, unless a nonconformity
has been stated, defined, and considered in this appraisal report.
It is assumed that all required licenses, certificates of occupancy or other legislative or administrative authority from any local,
state, or national governmental or private entity or organization have been or can be obtained or renewed for any use on which
the value estimates contained in this report are based.
Any sketch in this report may show approximate dimensions and is included to assist the reader in visualizing the property.
Maps and exhibits found in this report are provided for reader reference purposes only. No guarantee as to accuracy is
expressed or implied unless otherwise stated in this report. No survey has been made for the purpose of this report.
It is assumed that the utilization of the land and improvements is within the boundaries or property lines of the property
described and that there is no encroachment or trespass unless otherwise stated in this report.
Unless otherwise stated in this report, the existence of hazardous substances, including without limitation asbestos,
polychlorinated biphenyls, petroleum leakage, or agricultural chemicals, which may or may not be present on the property,
or other environmental conditions, were not called to the attention of nor did the appraiser become aware of such during the
appraiser's inspection. The appraiser has no knowledge of the existence of such materials on or in the property unless
otherwise stated. The appraiser, however, is not qualified to test such substances or conditions. If the presence of such
substances, such as asbestos, urea formaldehyde foam insulation, or other hazardous substances or environmental conditions,
may affect the value of the property, the value estimated is predicated on the assumption that there is no such condition on
or in the property or in such proximity thereto that it would cause a loss in value. No responsibility is assumed for any such
conditions, nor for any expertise or engineering knowledge required to discover them. The client is urged to retain an expert
in the field of environmental impacts upon real estate if so desired.
The Americans with Disabilities Act (ADA) became effective J anuary 26, 1992. We have not made a specific compliance
survey and analysis of this property to determine whether it is in conformity with the various detailed requirements of the
ADA. It is possible that a compliance survey of the property, together with a detailed analysis of the requirements of the
ADA, could reveal that the property is not in compliance with one or more of the requirements of the ADA. If so, this fact
could have a negative effect on the value of the property. Since we have no direct evidence relating to this issue, we did not
consider possible noncompliance with temporary easement requirements of the ADA in developing an opinion of value of
the property.
Any proposed improvements are assumed to be completed in a good workmanlike manner in accordance with the submitted
plans and specifications.
Any allocation of the total value opinion in this report between the land and the improvements applies only under the stated
program of use. The separate values allocated to the land and improvements must not be used in conjunction with any other
appraisal and are invalid if so used. Any value opinion provided in the report applies to the entire property, and any proration
or division of the total into fractional interests will invalidate the value opinion unless such proration or division of interests
has been stated in the report.
th
Assumptions and Limiting Conditions
Possession of an original or a copy of this report does not carry with it the right of publication or reproduction, nor may an
original or a copy of the report be used for any purpose whatsoever by anyone except the client without the previous written
consent of the appraiser and the client. Out-of-context quoting from and partial reprinting of this appraisal report are
expressly prohibited. The omission or change of any part of this appraisal report without written authorization invalidates
the entire appraisal. Neither all nor any part of the contents of this report shall be conveyed to the public through advertising,
public relations, news, sales or other media nor for any purpose by anyone but the client, without the written consent of the
author, particularly as to the valuation conclusions, the identity of the appraiser or firm with which it is connected or any
reference to the Appraisal Institute or to the designations conferred upon the appraiser. Please note that the report is
copyright 2013 by Bulthuis Realty Consultants Inc.
Neither all nor any part of the contents of this report (especially any conclusions as to value, the identity of the appraiser, or
the firm with which the appraiser is connected) shall be disseminated to the public through advertising, public relations, news
sales, or other media without prior written consent and approval of the appraiser.
I will appear or give testimony in court in connection with this appraisal on request if I receive advance notice in order to
make required preparations and scheduling arrangements. I will specify and make charges in connection with pretrial
hearings, conferences, and court testimony in accordance with my ususal practice.
Acceptance and/or use of this appraisal report by the client or any third party constitutes acceptance of the stated Assumptions
and Limiting Conditions. Our liability extends only to the stated client, not to subsequent parties or users of the report.
th
A D D E N D A
Matthew R. Bulthuis Qualifications
Employment Matthew R. Bulthuis is the President of Bulthuis Realty Consultants Inc., a real estate firm
specializing in appraisal and consulting work for all types of real property. Mr. Bulthuis has
been actively engaged in the real estate business since 1989.
Education Mr. Bulthuis received a Bachelor of Science Degree in Business Administration, (Marketing
minor) from LeTourneau University in Longview, Texas in 1991.
State Licenses Mr. Bulthuis currently holds:
Illinois Certified General Appraiser, License 553.001385
Professional Education Mr. Bulthuis maintains the certification through continuing education. A sample of the courses
and seminars successfully completed includes:
Appraisal Institute Courses
110 - Real Estate Principles
Residential Valuation
120 - Basic Valuation Procedures
310 - Basic Income Capitalization
510 - Advanced Income Capitalization
410 - USPAP, Part A
Non-Residential Report Writing
420 - USPAP, Part B
420n - Business Practices and Ethics
520 - Highest & Best Use and Market Analysis
530 - Advanced Sales & Cost Approaches
540 - Report Writing & Valuation Analysis
550 - Advanced Applications
Various continuing education seminars
Experience Mr. Bulthuis has prepared appraisal and consulting reports on real property in Illinois, Indiana,
Kentucky, and Alabama. His appraisal and consulting experience includes reports prepared for
financing, litigation, estate planning, eminent domain proceedings, permanent and temporary
easements, and tax matters on the following property types:
Commercial: Automotive, medical, office, restaurant, retail, Chicago CBD retail, mixed-use.
Industrial: Cold-storage, manufacturing, multi-tenant, truck terminal, and warehouse.
Residential: Apartment, single family, condominium, estate, mixed-use, and riparian.
Vacant: Farm, subdivision, raw acreage, industrial, commercial, and single site.
Special Use: Car wash, school, marina, church, animal hospital, limestone and aggregate
quarries, lakefront, riverfront, and wetland.
Condemnation Work Mr. Bulthuis has been conducting right of way appraisals for condemnation and other purposes
for over five years. These appraisals have included virtually all property types and partial and
total takings, consideration of damages to the remainder, and temporary and permanent
easements. Clients have included the Illinois Department of Transportation (District 1 and
District 8), Kane County, the Plainfield Park District, and various municipalities. Illinois
counties appraised in include primarily Cook, DuPage, Will, Kane, Lake, and McHenry. Mr.
Bulthuis has been qualified as an expert witness and testified in Cook, Will, Kane, and
McHenry Counties.
Expert Testimony Mr. Bulthuis has provided expert testimony at the municipal, board of review, and county
levels, and has been qualified as an expert witness in Cook, Kane, McHenry, and Will Counties.
Professional Affiliations Mr. Bulthuis is a General Associate Member of the Appraisal Institute, and is working toward
his MAI designation. He has successfully completed the educational requirements, experience
requirements, and comprehensive examination.
Mr. Bulthuis was granted the Certified Illinois Assessing OfficerAssociate designation by the
Illinois Property Assessment Institute in 1994 and is an active member of the DuPage County
expanded Board of Review.

Appraisal - Midway Hotel Group - 5001 79th Street, Burbank PDF

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Appraisal Report

American Midwest Hotel

document 1034233064. The property was previously sold in

resources. The document number is 1111818048.

aerial photographs, Sidwell Maps and an exterior inspection.

document number is R2011-060651.

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