EX-99.(C)(4) 6 d07256a1exv99wxcyx4y.txt APPRAISAL OF CHIMNEY HILLS CHIMNEY HILL APARTMENTS LAND VALUE 2000-2855 WINDY HILL ROAD MARIETTA, GEORGIA MARKET VALUE - FEE SIMPLE ESTATE AS OF JUNE 23, 2003 PREPARED FOR: APARTMENT INVESTMENT AND MANAGEMENT COMPANY (AIMCO) C/O LINER YANKELEVITZ SUNSHINE & REGENSTREIF LLP & LIEFF CABRASER HEIMANN & BERNSTEIN ON BEHALF OF NUANES, ET. AL. [AMERICAN APPRAISAL ASSOCIATES(R) LOGO] [AMERICAN APPRAISAL ASSOCIATES(R) LOGO] [AMERICAN APPRAISAL ASSOCIATES(R) LETTERHEAD] Apartment Investment and Management Company ("AIMCO") c/o Mr. Steven A. Velkei, Esq. Liner Yankelevitz Sunshine & Regenstreif LLP 1100 Glendon Avenue, 14th Floor Los Angeles, California 90024-3503 Nuanes, et al.( "Plaintiffs ") c/o Ms. Joy Kruse Lieff Cabraser Heimann & Bernstein Embarcadero Center West 275 Battery Street, 30th Floor San Francisco, California 94111 RE: CHIMNEY HILL APARTMENT LAND VALUE 2000-2855 WINDY HILL ROAD MARIETTA, COBB COUNTY, GEORGIA In accordance with your authorization, we have completed the appraisal of the above-referenced property. This complete appraisal is intended to report our analysis and conclusions in a summary format. The subject property consists of 26.301 acres of land, currently improved with a vacant apartment complex. It is our understanding that the property is contaminated with mold and scheduled to be razed. This appraisal assumes the land is vacant and available for development. It is our understanding the appraisal will be used by the clients to assist the San Mateo Superior Court in the settlement of litigation between the above mentioned clients. The appraisal is intended to conform to the Uniform Standards of Professional Appraisal Practice ("USPAP") as promulgated by the Appraisal Standards Board of the Appraisal Foundation and the Code of Professional Ethics and Standards of Professional Practice of the Appraisal Institute. The appraisal is presented in a summary report, and the Departure Provision of USPAP has not been invoked in this appraisal. It is entirely inappropriate to use this value conclusion or the report for any purpose other than the one stated. AMERICAN APPRAISAL ASSOCIATES, INC. LETTER OF TRANSMITTAL PAGE 2 CHIMNEY HILL APARTMENTS LAND VALUE, MARIETTA, GEORGIA The opinions expressed in this appraisal cover letter can only be completely understood by reading the narrative report, addenda, and other data, which is attached. The appraisal is subject to the attached general assumptions and limiting conditions and general service conditions. As a result of our investigation, it is our opinion that the fee simple market value of the subject, effective June 23, 2003 is: ($2,900,000 ) It is assumed the property's improvements have been razed and the land is vacant and available. Respectfully submitted, AMERICAN APPRAISAL ASSOCIATES, INC. /s/ Frank Fehribach July 18, 2003 Frank Fehribach, MAI #053272 Managing Principal, Real Estate Group State of Georgia Certified General Real Property Appraiser #218487 Investigation and Report By: Phillip McGinnis AMERICAN APPRAISAL ASSOCIATES, INC. TABLE OF CONTENTS PAGE 3 CHIMNEY HILL APARTMENTS LAND VALUE, MARIETTA, GEORGIA TABLE OF CONTENTS Cover Letter of Transmittal Table of Contents APPRAISAL DATA Executive Summary..................................................... 4 Introduction.......................................................... 8 Area Analysis......................................................... 10 Market Analysis....................................................... 13 Site Analysis......................................................... 14 Improvement Analysis.................................................. 14 Highest and Best Use.................................................. 14 VALUATION Valuation Procedure................................................... 15 Sales Comparison Approach............................................. 17 Reconciliation and Conclusion......................................... 20
ADDENDA Exhibit A - Photographs of Subject Property Exhibit B - Summary of Rent Comparables and Photograph of Comparables Exhibit C - Assumptions and Limiting Conditions Exhibit D - Certificate of Appraiser Exhibit E - Qualifications General Service Conditions AMERICAN APPRAISAL ASSOCIATES, INC. EXECUTIVE SUMMARY PAGE 4 CHIMNEY HILL APARTMENTS LAND VALUE, MARIETTA, GEORGIA EXECUTIVE SUMMARY PART ONE - PROPERTY DESCRIPTION PROPERTY NAME: Chimney Hill Apartments - Land Only LOCATION: 2000-2855 Windy Hill Road Marietta, Georgia PURPOSE OF ASSIGNMENT: Court Settlement PREMISE OF VALUE: "As Is" Market Value of the Fee Simple Estate INTEREST APPRAISED: Fee simple estate DATE OF VALUE: June 23, 2003 DATE OF REPORT: July 18, 2003 PHYSICAL DESCRIPTION - SITE & IMPROVEMENTS: SITE: Size: 26.301 acres, or 1,145,672 square feet Assessor Parcel No.: 17-0874-0-002-2 Floodplain: Community Panel No. 13005200075 F, (August 18, 1992) Flood Zone X, an area outside the floodplain. Zoning: RM-12 (Multi-family Residential District) SUBJECT PHOTOGRAPHS AND LOCATION MAP: SUBJECT PHOTOGRAPHS [PICTURE] [PICTURE] VIEW OF SUBJECT ACROSS WINDY HILL ROAD EXTERIOR LAND VIEW AMERICAN APPRAISAL ASSOCIATES, INC. EXECUTIVE SUMMARY PAGE 5 CHIMNEY HILL APARTMENTS LAND VALUE, MARIETTA, GEORGIA AREA MAP [MAP] NEIGHBORHOOD MAP [MAP] AMERICAN APPRAISAL ASSOCIATES, INC. EXECUTIVE SUMMARY PAGE 6 CHIMNEY HILL APARTMENTS LAND VALUE, MARIETTA, GEORGIA HIGHEST AND BEST USE: As Vacant: Multifamily development to the highest density possible, subject to feasibility As Improved: N/A METHOD OF VALUATION: In this instance, the Sales Comparison Approach to value was utilized. AMERICAN APPRAISAL ASSOCIATES, INC. EXECUTIVE SUMMARY PAGE 7 CHIMNEY HILL APARTMENTS LAND VALUE, MARIETTA, GEORGIA PART TWO - ECONOMIC INDICATORS SALES COMPARISON APPROACH PRICE PER ACRE: Range of Sales $/Acre (Unadjusted) $98,560 to $140,271 Range of Sales $/Acre (Adjusted) $84,268 to $119,932 VALUE INDICATION - PRICE PER ACRE $2,900,000 $110,000 / ACRE It is assumed the property's improvements have been razed and the land is vacant and available. AMERICAN APPRAISAL ASSOCIATES, INC. INTRODUCTION PAGE 8 CHIMNEY HILL APARTMENTS LAND VALUE, MARIETTA, GEORGIA INTRODUCTION IDENTIFICATION OF THE SUBJECT The subject property is located at 2000-2855 Windy Hill Road, Marietta, Cobb County, Georgia. Cobb County Tax Assessor identifies it as 17-0874-0-002-2. SCOPE OF THE ASSIGNMENT The property, neighborhood, and comparables were inspected by Phillip McGinnis on June 23, 2003. Frank Fehribach, MAI has not made a personal inspection of the subject property. Both, Frank Fehribach, MAI and Phillip McGinnis have extensive experience in appraising similar properties and meet the USPAP competency provision. The scope of this investigation comprises the inspection of the property and the collection, verification, and analysis of general and specific data pertinent to the subject property. We have researched land sales of similar properties, analyzing them as to their comparability, and adjusting them accordingly. We completed the Sales Comparison Approach to value. From this approach to value, a concluded overall value was made. DATE OF VALUE AND REPORT This appraisal was made to express the opinion of value as of June 23, 2003. The date of the report is July 18, 2003. PURPOSE AND USE OF APPRAISAL The purpose of the appraisal is to estimate the market value of the fee simple interest in the subject property. It is understood that the appraisal is intended to assist the clients in litigation settlement proceedings. The appraisal was not based on a request minimum valuation, a specific valuation, or the approval of a loan. PROPERTY RIGHTS APPRAISED We have appraised the Fee Simple Estate in the subject property (as applied in the Sales Comparison Approach). A Fee Simple Estate is defined in The Dictionary of Real Estate Appraisal, 4th ed. (Chicago: Appraisal Institute, 2002), as: "Absolute ownership unencumbered by any other interest or estate, subject only AMERICAN APPRAISAL ASSOCIATES, INC. INTRODUCTION PAGE 9 CHIMNEY HILL APARTMENTS LAND VALUE, MARIETTA, GEORGIA to the limitations imposed by the governmental powers of taxation, eminent domain, police power, and escheat." MARKETING/EXPOSURE PERIOD MARKETING PERIOD: 6 to 12 months EXPOSURE PERIOD: 6 to 12 months HISTORY OF THE PROPERTY Ownership in the subject property is currently vested in Capital Properties IV as indicated by Warranty Deed filed September 23, 1991 in Deed Book 6279 Page 8. To the best of our knowledge, no transfers of ownership or offers to purchase the subject are known to have occurred during the past three years. AMERICAN APPRAISAL ASSOCIATES, INC. AREA ANALYSIS PAGE 10 CHIMNEY HILL APARTMENTS LAND VALUE, MARIETTA, GEORGIA AREA / NEIGHBORHOOD ANALYSIS NEIGHBORHOOD ANALYSIS A neighborhood is a group of complementary land uses. The function of the neighborhood analysis is to describe the immediate surrounding environs. The subject is located in unincorporated Marietta, Cobb County, Georgia. Overall, the neighborhood is characterized as a suburban setting with the predominant land use being commercial in nature. The subject's neighborhood is generally defined by the following boundaries. NEIGHBORHOOD BOUNDARIES East - Powers Ferry Road West - Atlanta Road South - I-285 North - Delk Road MAJOR EMPLOYERS Major employers in the subject's area include Lockheed-Martin, Dobbins Air Reserve Base, IBM, Cobb County Government and the City of Marietta. The overall economic outlook for the area is considered favorable. AMERICAN APPRAISAL ASSOCIATES, INC. AREA ANALYSIS PAGE 11 CHIMNEY HILL APARTMENTS LAND VALUE, MARIETTA, GEORGIA DEMOGRAPHICS We have reviewed demographic data within the neighborhood. The following table summarizes the key data points. NEIGHBORHOOD DEMOGRAPHICS
AREA ---------------------------------------------------- CATEGORY 1-MILE RADIUS 3-MILE RADIUS 5-MILE RADIUS -------- ------------- ------------- ------------- POPULATION TRENDS 1990 Census 12,725 66,251 165,066 2000 Census 16,751 77,249 194,896 2003 Estimate 17,978 81,435 205,144 2008 Projection 19,977 88,246 222,013 Growth 1990 - 2000 31.64% 16.60% 18.07% Growth 2000 - 2008 19.26% 14.24% 13.91% HOUSEHOLDS 1990 Census 6,373 31,475 72,321 2000 Census 7,653 34,507 82,432 2003 Estimate 8,147 36,132 86,459 2008 Projection 8,957 38,778 93,133 Growth 1990 - 2000 20.08% 9.63% 13.98% Growth 2000 - 2008 17.04% 12.38% 12.98% INCOME TRENDS 2000 Median Household Income $46,163 $47,419 $50,621 Per Capita Income $24,323 $28,117 $32,060 Average Household Income $52,669 $62,306 $74,888 Source: Claritas
The subject neighborhood's population is expected to show an approximate 15% increase in the next five years. The immediate market offers inferior income levels as compared to the broader market. AMERICAN APPRAISAL ASSOCIATES, INC. AREA ANALYSIS PAGE 12 CHIMNEY HILL APARTMENTS LAND VALUE, MARIETTA, GEORGIA The following table illustrates the housing statistics in the subject's immediate area, as well as the MSA region. HOUSING TRENDS
AREA -------------------------------------------------------- CATEGORY 1-MILE RADIUS 3-MILE RADIUS 5-MILE RADIUS -------- ------------- ------------- ------------- HOUSING TRENDS Owner Occupied 2,102(27.47%) 11,861 (34.37%) 28,770 (47.03%) Renter Occupied 5,551(72.53%) 22,646 (65.63%) 43,662 (52.97%) Source: Claritas
SURROUNDING IMPROVEMENTS The following uses surround the subject property: North - Commercial/Industrial South - Commercial (Restaurant) East - Commercial (Hotel/Office) West - Commercial (Hotel/Gas Station) CONCLUSIONS The subject is well located just southeast of the city of Marietta, and north of the city of Atlanta. The neighborhood is characterized as being mostly suburban in nature and is currently in the stable stage of development. The economic outlook for the neighborhood is judged to be favorable with a good economic base. AMERICAN APPRAISAL ASSOCIATES, INC. MARKET ANALYSIS PAGE 13 CHIMNEY HILL APARTMENTS LAND VALUE, MARIETTA, GEORGIA MARKET ANALYSIS The subject property is located in an unincorporated area near Marietta in Cobb County. The overall pace of development in the subject's market is more or less stable. New construction in the immediate area is limited. Development is categorized as highway commercial due to the close proximity of the interchange with Windy Hill Road and Interstate 75. None of the apartment complexes in the area appear to be newer than 15 years old. There appears to have been no recent multiple-family residential construction in the subject neighborhood. There is little vacant land available for development in the immediate area. The surrounding neighborhood is primarily commercial in nature with adjoining land uses being a convenience/gas station and hotel to the west, industrial to the north, office and hotel to the east and restaurants located across Windy Hill Road to the south. Developments range in age from 5 to 30 years old, with most being in fair to good condition. The primary east/west corridor is Windy Hill Road with four westbound lanes, three eastbound lanes and a center turn lane in front of the subject's entrance. On the west side of I-75, the road narrows to a four lane road with a center turn lane. Leland Drive is a two lane dead-end road on the north side of Windy Hill Road. The intersection of Windy Hill Road and Leland Drive is controlled by a traffic light. Dense development along Windy Hill Road and close proximity to the I-75 interchange combine to form heavy traffic volumes during rush hour. AMERICAN APPRAISAL ASSOCIATES, INC. PROPERTY DESCRIPTION PAGE 14 CHIMNEY HILL APARTMENTS LAND VALUE, MARIETTA, GEORGIA PROPERTY DESCRIPTION SITE ANALYSIS Site Area 26.301 acres, or 1,145,672 square feet Shape Irregular Topography Rolling Utilities All necessary utilities are available to the site Soil Conditions Stable Easements Affecting Site None other than typical utility easements Overall Site Appeal Fair Flood Zone: Community Panel 1300520075 F, dated August 18, 1992 Flood Zone Zone X Zoning RM-12, multi-family residential district REAL ESTATE TAXES
ASSESSED VALUE - 2003 -------------------------------------------- TAX RATE / PROPERTY PARCEL NUMBER LAND BUILDING TOTAL MILL RATE TAXES ------------- ---- -------- ----- --------- ----- 17-0874-0-002-2 $4,529,720 $13,993,150 $18,522,870 0.02987 $221,311
IMPROVEMENT ANALYSIS For the purposes of this valuation the site is assumed to be vacant and available for development. Therefore, the improvements have not been considered. HIGHEST AND BEST USE ANALYSIS In accordance with the definition of highest and best use, an analysis of the site relating to its legal uses, physical possibilities, and financial feasibility is appropriate. The highest and best use as vacant is for multifamily development to the highest density possible. The highest and best use as improved is for an apartment complex, subject to a feasibility analysis. AMERICAN APPRAISAL ASSOCIATES, INC. VALUATION PROCEDURE PAGE 15 CHIMNEY HILL APARTMENTS LAND VALUE, MARIETTA, GEORGIA THE VALUATION PROCEDURE There are three traditional approaches, which can be employed in establishing the market value of the subject property. These approaches and their applicability to the valuation of the subject are summarized as follows: THE COST APPROACH The application of the Cost Approach is based on the principle of substitution. This principle may be stated as follows: no one is justified in paying more for a property than that amount by which he or she can obtain, by purchase of a site and construction of a building, without undue delay, a property of equal desirability and utility. In the case of a new building, no deficiencies in the building should exist. In the case of income-producing real estate, the cost of construction plays a minor and relatively insignificant role in determining market value. The Cost Approach is typically only a reliable indicator of value for: (a) new properties; (b) special use properties; and (c) where the cost of reproducing the improvements is easily and accurately quantified and there is no economic obsolescence. In all instances, the issue of an appropriate entrepreneurial profit - the reward for undertaking the risk of construction, remains a highly subjective factor especially in a market lacking significant speculative development. THE SALES COMPARISON APPROACH The Sales Comparison Approach is an estimate of value based upon a process of comparing recent sales of similar properties in the surrounding or competing areas to the subject property. Inherent in this approach is the principle of substitution. The application of this approach consists of comparing the subject property with similar properties of the same general type which have been sold recently or currently are available for sale in competing areas. This comparative process involves judgment as to the similarity of the subject property and the comparable sale with respect to many value factors such as location, contract rent levels, quality of construction, reputation and prestige, age and condition, among others. The estimated value through this approach represents the probable price at which a willing seller would sell the subject property to a willing and knowledgeable buyer as of the date of value. AMERICAN APPRAISAL ASSOCIATES, INC. VALUATION PROCEDURE PAGE 16 CHIMNEY HILL APARTMENTS LAND VALUE, MARIETTA, GEORGIA THE INCOME CAPITALIZATION APPROACH The theory of the Income Capitalization Approach is based on the premise that present value is the value of the cash flow and reversionary value the property will produce over a reasonable holding (ownership) period. The Discounted Cash Flow Analysis will convert equity cash flows (including cash flows and equity reversion) into a present value utilizing an internal rate of return (or discount rate). The Internal Rate of Return (IRR) will be derived from a comparison of alternate investments, a comparative analysis of IRR's used by recent buyers of similar properties, and a review of published industry surveys. The Direct Capitalization Analysis converts one year of income into an overall value using overall capitalization rates from similar sales. The overall rates take into consideration buyers assumptions of the market over the long-term. The results of the Income Capitalization Analysis are usually the primary value indicator for income producing properties. Investors expect a reasonable rate of return on their equity investment based on the ownership risks involved; this approach closely parallels the investment decision process. RECONCILIATION In this instance, we have completed only the Sales Comparison Approach to value. As a vacant parcel of land, the Cost Approach is not applicable and with no income producing property, the income approach is not applicable. Therefore, the Sales Comparison Approach is considered the only reliable approach as investors are buying similar vacant land parcels in the market. AMERICAN APPRAISAL ASSOCIATES, INC. SALES COMPARISON APPROACH PAGE 17 CHIMNEY HILL APARTMENTS LAND VALUE, MARIETTA, GEORGIA SALES COMPARISON APPROACH Use of market or comparable sales requires the collection and analysis of comparable sales data. Similar properties recently sold are compared to the subject and adjusted based on any perceived differences. This method is based on the premise that the costs of acquiring a substitute property would tend to establish a value for the subject property. The premise suggests that if a substitute is unavailable in the market, the reliability of the approach may be subordinate to the other approaches. The standard unit of comparison for vacant land is the sales price per acre or price per square foot for smaller parcels. In examining the comparable sales, we have applied a subjective adjustment analysis, which includes specific adjustments derived from our experience and consulting with the market participants. SALES COMPARISON ANALYSIS Detailed on the following pages are sales transactions involving properties located in the subject's competitive investment market. Following the summary of sales is an adjustment grid that is used to arrive at a value. LAND SALES SUMMARY
SALE NUMBER SALE AAA ID LOCATION DATE PRICE LAND AREA UNIT PRICE ------ -------- ---- ----- --------- ---------- L-1 N. COBB PKWY. 01-NOV-00 $2,600,000 26.38 ACRES $ 98,560 /ACRE COBB COUNTY 1,149,113 SQ.FT. $ 2.26 /SQ.FT. KENNESAW GA L-2 1599 N. COBB PKWY. 01-FEB-01 $2,381,472 19.85 ACRES $119,973 /ACRE COBB COUNTY 864,666 SQ.FT. $ 2.75 /SQ.FT. KENNESAW GA L-3 7671 COVINGTON HWY. 01-JUN-01 $2,170,000 15.47 ACRES $140,271 /ACRE DEKALB COUNTY 673,873 SQ.FT. $ 3.22 /SQ.FT. LITHONIA GA SUBJECT 2855 WINDY HILL ROAD 26.30 ACRES COBB COUNTY 1,145,672 SQ.FT. MARIETTA GA
AMERICAN APPRAISAL ASSOCIATES, INC. SALES COMPARISON APPROACH PAGE 18 CHIMNEY HILL APARTMENTS LAND VALUE, MARIETTA, GEORGIA VACANT LAND SALES MAP [MAP] LAND SALES ANALYSIS The land sales indicate a sales price range from $98,560 to $140,271 per acre. Adjustments have been made to the sales to reflect differences in overall location, access, visibility, topography, shape, size, zoning and availability of utilities. Generally speaking, larger properties typically have a lower price per acre when compared to smaller properties, all else being equal. After appropriate adjustments are made, the land sales demonstrate an adjusted range from for the subject between $84,268 to $119,932 per acre with a mean or average adjusted price of $102,259 per acre. Based on the preceding analysis, we have concluded to a value of $110,000 per acre, which results in an "as is" value of $2,900,000 (rounded). Sales Comparison Conclusion $2,900,000 It is assumed the property's improvements have been razed and the land is vacant and available. AMERICAN APPRAISAL ASSOCIATES, INC. SALES COMPARISON APPROACH PAGE 19 CHIMNEY HILL APARTMENTS LAND VALUE, MARIETTA, GEORGIA LAND SALES ADJUSTMENT GRID CLIENT: AIMCO CONTRACT #: 053272 PROPERTY: CHIMNEY HILLS APARTMENTS (CLOSED) APP. DATE: 23-JUN-03
COMPARABLE SALES -------------------------------------------------------------------------------------------------------------------------------- COMPARABLE NUMBER SUBJECT L-1 L-2 L-3 LOCATION 2855 Windy Hill Road N. Cobb Pkwy. 1599 N. Cobb Pkwy. 7671 Covington Hwy. Cobb County Cobb County Cobb County DeKalb County Marietta Kennesaw Kennesaw Lithonia GA GA GA GA SALE PRICE - $2,600,000 $2,381,472 $ 2,170,000 LAND AREA IN ACRES 26.30 26.38 19.85 15.47 SALE PRICE/ACRE - $ 98,560 $ 119,973 $ 140,271 PROPERTY RIGHTS CONVEYED $ 98,560 N/A $ 119,973 N/A $ 140,271 N/A Adjusted Price per Acre/Adjustment FINANCING TERMS Adjusted Price per Acre/Adjustment $ 98,560 N/A $ 119,973 N/A $ 140,271 N/A CONDITIONS OF SALE Adjusted Price per Acre/Adjustment $ 98,560 N/A $ 119,973 N/A $ 140,271 N/A MARKET CONDITIONS Nov-00 Feb-01 Jun-01 Adjustment -10.0% -10.0% -10.0% --------- -------- ---------- Adjusted Price per Acre $ 88,704 $ 107,976 $ 126,244 LOCATIONAL & PHYSICAL CHARACTERISTICS OVERALL LOCATION Good Comparable 0% Comparable 0% Inferior 5% ACCESS Good Superior -5% Superior -5% Superior -5% TOPOGRAPHY Rolling Comparable 0% Comparable 0% Comparable 0% SHAPE Irregular Comparable 0% Comparable 0% Comparable 0% SIZE (ACRES) 26.30 Comparable 0% Comparable 0% Superior -5% ZONING RM-12 Comparable 0% Comparable 0% Comparable 0% UTILITIES All Comparable 0% Comparable 0% Comparable 0% ADJ. SALES PRICE PER ACRE $ 84,268 $ 102,577 $ 119,932
Range of Adjusted Sale Price $ 84,268 to $ 119,932 CONCLUDED VALUE PER ACRE $ 110,000 CONCLUDED VALUE Rounded $ 2,900,000
AMERICAN APPRAISAL ASSOCIATES, INC. RECONCILIATION AND CONCLUSION PAGE 20 CHIMNEY HILL APARTMENTS LAND VALUE, MARIETTA, GEORGIA RECONCILIATION AND CONCLUSION This appraisal was made to express an opinion as of the Market Value of the fee simple estate in the 26.301 acres of land, located at 2000-2855 Windy Hill, Marietta, Cobb County, Georgia. AS IS MARKET VALUE OF THE FEE SIMPLE ESTATE Cost Approach Not Utilized Sales Comparison Approach $2,900,000 Income Approach Not Utilized Reconciled Value $2,900,000
FINAL VALUE - FEE SIMPLE ESTATE Based on the investigation and premise outlined, it is our opinion that as of June 23, 2003 the market value of the fee simple estate in the property is: $2,900,000 It is assumed the property's improvements have been razed and the land is vacant and available. AMERICAN APPRAISAL ASSOCIATES, INC. ADDENDA CHIMNEY HILL APARTMENTS LAND VALUE, MARIETTA, GEORGIA ADDENDA AMERICAN APPRAISAL ASSOCIATES, INC. EXHIBIT A CHIMNEY HILL APARTMENTS LAND VALUE, MARIETTA, GEORGIA EXHIBIT A SUBJECT PHOTOGRAPHS AMERICAN APPRAISAL ASSOCIATES, INC. EXHIBIT A CHIMNEY HILL APARTMENTS LAND VALUE, MARIETTA, GEORGIA SUBJECT PHOTOGRAPHS [PICTURE] [PICTURE] VIEW OF SUBJECT ACROSS WINDY HILL ROAD EXTERIOR LAND VIEW [PICTURE] [PICTURE] EXTERIOR VIEW OF REAR ENTRANCE EXTERIOR VIEW OF CONDEMNED BUILDING AMERICAN APPRAISAL ASSOCIATES, INC. EXHIBIT B CHIMNEY HILL APARTMENTS LAND VALUE, MARIETTA, GEORGIA EXHIBIT B ASSUMPTIONS AND LIMITING CONDITIONS (3 PAGES) AMERICAN APPRAISAL ASSOCIATES, INC. EXHIBIT B CHIMNEY HILL APARTMENTS LAND VALUE, MARIETTA, GEORGIA No responsibility is assumed for matters legal in nature. No investigation has been made of the title to or any liabilities against the property appraised. In this appraisal, it is presumed that, unless otherwise noted, the owner's claim is valid, the property rights are good and marketable, and there are no encumbrances which cannot be cleared through normal processes. To the best of our knowledge, all data set forth in this report are true and accurate. Although gathered from reliable sources, no guarantee is made nor liability assumed for the accuracy of any data, opinions, or estimates identified as being furnished by others which have been used in formulating this analysis. Land areas and descriptions used in this appraisal were obtained from public records and have not been verified by legal counsel or a licensed surveyor. No soil analysis or geological studies were ordered or made in conjunction with this report, nor were any water, oil, gas, or other subsurface mineral and use rights or conditions investigated. Substances such as asbestos, urea-formaldehyde foam insulation, other chemicals, toxic wastes, or other potentially hazardous materials could, if present, adversely affect the value of the property. Unless otherwise stated in this report, the existence of hazardous substance, which may or may not be present on or in the property, was not considered by the appraiser in the development of the conclusion of value. The stated value estimate is predicated on the assumption that there is no material on or in the property that would cause such a loss in value. No responsibility is assumed for any such conditions, and the client has been advised that the appraiser is not qualified to detect such substances, quantify the impact on values, or develop the remedial cost. No environmental impact study has been ordered or made. Full compliance with applicable federal, state, and local environmental regulations and laws is assumed unless otherwise stated, defined, and considered in the report. It is also assumed that all required licenses, consents, or other legislative or administrative authority from any local, state, or national government or private entity organization either have been or can be obtained or renewed for any use which the report covers. AMERICAN APPRAISAL ASSOCIATES, INC. EXHIBIT B CHIMNEY HILL APARTMENTS LAND VALUE, MARIETTA, GEORGIA 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 the appraisal report. Further, it is assumed that the utilization of the land and improvements is within the boundaries of the property described and that no encroachment or trespass exists unless noted in the report. The Americans with Disabilities Act ("ADA") became effective January 26, 1992. We have not made a specific compliance survey and analysis of this property to determine whether or not 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 act. 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 the possible noncompliance with the requirements of ADA in estimating the value of the property. We have made a physical inspection of the property and noted visible physical defects, if any, in our report. This inspection was made by individuals generally familiar with real estate and building construction. However, these individuals are not architectural or structural engineers who would have detailed knowledge of building design and structural integrity. Accordingly, we do not opine on, nor are we responsible for, the structural integrity of the property including its conformity to specific governmental code requirements, such as fire, building and safety, earthquake, and occupancy, or any physical defects which were not readily apparent to the appraiser during the inspection. The value or values presented in this report are based upon the premises outlined herein and are valid only for the purpose or purposes stated. The date of value to which the conclusions and opinions expressed apply is set forth in this report. The value opinion herein rendered is based on the status of the national business economy and the purchasing power of the U.S. dollar as of that date. Testimony or attendance in court or at any other hearing is not required by reason of this appraisal unless arrangements are previously made within a reasonable time in advance for AMERICAN APPRAISAL ASSOCIATES, INC. EXHIBIT B CHIMNEY HILL APARTMENTS LAND VALUE, MARIETTA, GEORGIA such testimony, and then such testimony shall be at American Appraisal Associates, Inc.'s, prevailing per diem for the individuals involved. Possession of this report or any copy thereof does not carry with it the right of publication. No portion of this report (especially any conclusion to use, the identity of the appraiser or the firm with which the appraiser is connected, or any reference to the Appraisal Institute or the designations awarded by this organization) shall be disseminated to the public through prospectus, advertising, public relations, news, or any other means of communication without the written consent and approval of American Appraisal Associates, Inc. AMERICAN APPRAISAL ASSOCIATES, INC. EXHIBIT D CHIMNEY HILL APARTMENTS LAND VALUE, MARIETTA, GEORGIA EXHIBIT D CERTIFICATE OF APPRAISER (1 PAGE) AMERICAN APPRAISAL ASSOCIATES, INC. EXHIBIT D CHIMNEY HILL APARTMENTS LAND VALUE, MARIETTA, GEORGIA CERTIFICATE OF APPRAISER I certify that, to the best of my knowledge and belief: The statements of fact contained in this report are true and correct. The reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions, and represent the unbiased professional analyses, opinions, and conclusions of American Appraisal Associates, Inc. American Appraisal Associates, Inc. and I personally, have no present or prospective interest in the property that is the subject of this report and have no personal interest or bias with respect to the parties involved. Compensation for American Appraisal Associates, Inc. is not contingent on an action or event resulting from the analyses, opinions, or conclusions in, or the use of, this report. The analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the requirements of the Uniform Standards of Professional Appraisal Practice and the Code of Professional Ethics and the Standards of Professional Practice of the Appraisal Institute. The use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representatives. I personally did not inspect the subject property. Phillip McGinnis provided significant real property assistance in the preparation of this report. I am currently in compliance with the Appraisal Institute's continuing education requirements. -s- FRANK FEHRIBACH ---------------------------- FRANK FEHRIBACH, MAI MANAGING PRINCIPAL STATE OF GEORGIA CERTIFIED GENERAL REAL PROPERTY APPRAISER #218487 AMERICAN APPRAISAL ASSOCIATES, INC. EXHIBIT E CHIMNEY HILL APARTMENTS LAND VALUE, MARIETTA, GEORGIA EXHIBIT E QUALIFICATIONS OF APPRAISER (2 PAGES) AMERICAN APPRAISAL ASSOCIATES, INC. EXHIBIT E CHIMNEY HILL APARTMENTS LAND VALUE, MARIETTA, GEORGIA FRANK A. FEHRIBACH, MAI MANAGING PRINCIPAL, REAL ESTATE GROUP POSITION Frank A. Fehribach is a Managing Principal for the Dallas Real Estate Group of American Appraisal Associates, Inc. ("AAA"). EXPERIENCE Valuation Mr. Fehribach has experience in valuations for resort hotels; Class A office buildings; Class A multifamily complexes; industrial buildings and distribution warehousing; multitract mixed-use vacant land; regional malls; residential subdivision development; and special-purpose properties such as athletic clubs, golf courses, manufacturing facilities, nursing homes, and medical buildings. Consulting assignments include development and feasibility studies, economic model creation and maintenance, and market studies. Mr. Fehribach also has been involved in overseeing appraisal and consulting assignments in Mexico and South America. Business Mr. Fehribach joined AAA as an engagement director in 1998. He was promoted to his current position in 1999. Prior to that, he was a manager at Arthur Andersen LLP. Mr. Fehribach has been in the business of real estate appraisal for over ten years. EDUCATION University of Texas - Arlington Master of Science - Real Estate University of Dallas Master of Business Administration - Industrial Management Bachelor of Arts - Economics STATE State of Arizona CERTIFICATIONS Certified General Real Estate Appraiser, #30828 State of Arkansas State Certified General Appraiser, #CG1387N State of Colorado Certified General Appraiser, #CG40000445 State of Georgia Certified General Real Property Appraiser, #218487 State of Michigan Certified General Appraiser, #1201008081 State of Texas Real Estate Salesman License, #407158 (Inactive) State of Texas State Certified General Real Estate Appraiser, #TX-1323954-G AMERICAN APPRAISAL ASSOCIATES, INC. EXHIBIT E CHIMNEY HILL APARTMENTS LAND VALUE, MARIETTA, GEORGIA PROFESSIONAL Appraisal Institute, MAI Designated Member AFFILIATIONS Candidate Member of the CCIM Institute pursuing Certified Commercial Investment Member (CCIM) designation PUBLICATIONS "An Analysis of the Determinants of Industrial Property -authored with Dr. Ronald C. Rutherford and Dr. Mark Eakin, The Journal of Real Estate Research, Vol. 8, No. 3, Summer 1993, p. 365. AMERICAN APPRAISAL ASSOCIATES, INC. CHIMNEY HILL APARTMENTS LAND VALUE, MARIETTA, GEORGIA GENERAL SERVICE CONDITIONS AMERICAN APPRAISAL ASSOCIATES, INC. CHIMNEY HILL APARTMENTS LAND VALUE, MARIETTA, GEORGIA GENERAL SERVICE CONDITIONS The services(s) provided by AAA will be performed in accordance with professional appraisal standards. Our compensation is not contingent in any way upon our conclusions of value. We assume, without independent verification, the accuracy of all data provided to us. We will act as an independent contractor and reserve the right to use subcontractors. All files, workpapers or documents developed by us during the course of the engagement will be our property. We will retain this data for at least five years. Our report is to be used only for the specific purpose stated herein; and any other use is invalid. No reliance may be made by any third party without our prior written consent. You may show our report in its entirety to those third parties who need to review the information contained herein. No one should rely on our report as a substitute for their own due diligence. We understand that our reports will be described in public tender offer documents distributed to limited partners. We reserve the right to review the public tender offer documents prior to their issuance to confirm that disclosures of facts from the current appraisals are accurate. No reference to our name or our report, in whole or in part, in any other SEC filing or private placement memorandum you prepare and/or distribute to third parties may be made without our prior written consent. The Tender Offer Partnerships, as that term is defined in the Settlement Agreement, agree to indemnify and hold us harmless against and from any and all losses, claims, actions, damages, expenses or liabilities, including reasonable attorneys' fees, to which we may become subject in connection with this engagement except where such losses, claims, actions, damages, expenses or liabilities, including reasonable attorney's fees, arise or result from AAA's misconduct, bad faith or negligence. Co-Clients will not be liable for any of our acts or omissions. AAA is an equal opportunity employer.