HomeMy WebLinkAbout2019-01-22 Select Board PacketJ.F. Ryan Associates, Inc.
Property Appraisal & Consulting Services
TELEPHONE 978-462-0036 EMAIL JFRYAN@COMCAST.NET
Properties of
Mary E. Zanni
Located off
Symonds Way, Range Road, a private road
Reading, Massachusetts
Parcel ID 041-59, 10 acres
Parcel ID 035-133, 15.2 acres
Prepared for:
Robert W. LeLacheur, Jr. CFA
Town Manager, Town of Reading
16 Lowell Street, Reading, MA 01867
Prepared by:
John Ryan
J.F. Ryan Associates, Inc.
3 Longview LN
Newbury, MA 01951
Date of Valuation
June 1, 2017
Date of Report
July 18, 2017
J.F. Ryan Associates, Inc.
Property Appraisal & Consulting Services
TELEPHONE 978-462-0036 EMAIL JFRYAN@COMCAST.NET
July 18, 2017
Robert W. LeLacheur, Jr. CFA
Town Manager, Town of Reading
16 Lowell ST
Reading, MA 01867
RE: Parcel ID 041-59, 10 acres; Parcel ID 035-133, 15.2 acres; located off Symonds Way, along
and off Range Road, a private road, Reading, MA
Dear Mr. LeLacheur:
I have developed market value estimates for the above referenced properties. The interests
appraised are fee simple and the effective date for each appraisal is June 1, 2017.
Additionally I developed a market value estimate of Parcel ID 035-133 (parcel with frontage on
the private road know as Range Road) subject to two extraordinary assumptions which detail the
circumstances under which the highest and best use is projected for single unit residential
development.
These appraisals are completed and reported in compliance with the Uniform Standards of
Professional Appraisal Practice 2016-2017 Edition, hereinafter referred to as USPAP. Each
valuation estimate is based upon information known and expectations as of the date of value.
These appraisal reports present an identification of the subject parcels, a certification of values
and pertinent facts about the subject and comparable data sales data. Additional supporting
documentation concerning the data, reasoning, and analyses is retained in my file. Pictures of the
subject properties taken during my on-site review of each parcel are also retained in my file.
The depth of discussion contained in this report is specific for the client and for the intended use
stated below. The reliability of the value conclusion is only appropriate for the intended use.
Your acceptance of this report constitutes acceptance of these conditions and assumptions.
J.F. Ryan Associates, Inc.
Property Appraisal & Consulting Services
TELEPHONE 978-462-0036 EMAIL JFRYAN@COMCAST.NET
Based on my experience, education and analyses summarized herein, the market value of the
subject property’s fee simple estate for each parcel are listed as follows:
Parcel ID 041-59, June 1, 2017 - $ 10,000
Parcel ID 035-133, June 1, 2017 - $ 76,000
Parcel ID 035-133, June 1, 2017 - $ 1,300,000 subject to Extraordinary Assumptions
Respectfully submitted,
John F. Ryan
Massachusetts Certified General Real Estate Appraiser #1234, Certified through 11/13/2017
Appraisal Report – Vacant land parcels off Symonds Way, Reading, MA Page i
2013 J.F. Ryan Associates, Inc.
Table of Contents
CERTIFICATION STATEMENT .............................................................................................................. 3
PARCEL 41-59 ............................................................................................................................................. 3
PARCEL 35-133 ........................................................................................................................................... 3
PARCEL 35-133 – SUBJECT TO EXTRAORDINARY ASSUMPTIONS ................................................................. 3
ASSUMPTIONS AND LIMITING CONDITIONS ................................................................................... 5
EXTRAORDINARY ASSUMPTIONS AND HYPOTHETICAL CONDITIONS .................................. 6
PURPOSE OF THE APPRAISAL ............................................................................................................... 6
INTENDED USE OF THE APPRAISAL .............................................................................................................. 7
INTENDED USERS OF THE APPRAISAL .......................................................................................................... 7
SCOPE OF WORK ....................................................................................................................................... 7
OWNERSHIP HISTORY ............................................................................................................................. 7
ECONOMIC CONDITIONS AS OF DATE OF VALUE.......................................................................... 8
AREA, CITY AND NEIGHBORHOOD DATA ......................................................................................... 8
READING REGIONAL AREA MAP ................................................................................................................. 8
READING LOCAL AREA MAP ....................................................................................................................... 8
NEIGHBORHOOD .......................................................................................................................................... 9
Neighborhood Map ................................................................................................................................ 9
Neighborhood Outlook ........................................................................................................................... 9
NEIGHBORHOOD ZONING MAP .................................................................................................................. 10
Map 35-133 – 15.2 acre parcel (landlocked) ....................................................................................... 10
Map - Portion of Range Road owned by Town of Reading .................................................................. 11
Map 41-59 – 10 acre parcel (landlocked) ............................................................................................ 12
PROPERTY IDENTIFICATION AND HISTORY ................................................................................. 13
ASSESSOR’S PARCEL ID: 035.0-0000-0133.0 ............................................................................................ 13
Parcel 35-133 – Floodplain Map ......................................................................................................... 14
ASSESSOR’S PARCEL ID: 41.0-0000-0059.0 .............................................................................................. 15
PROPERTY ASSESSMENTS AND TAXES ....................................................................................................... 15
SUBJECT MARKET AND MARKETABILITY ..................................................................................... 16
ABSORPTION PERIOD – EXPOSURE TIME ................................................................................................... 17
HIGHEST AND BEST USE DISCUSSION .............................................................................................. 17
HIGHEST AND BEST USE DISCUSSION – PARCEL 35-133, WITH EXTRAORDINARY
ASSUMPTIONS .......................................................................................................................................... 17
PROBABLE AND LEGALLY PERMISSIBLE .................................................................................................... 17
PHYSICALLY POSSIBLE .............................................................................................................................. 18
FINANCIALLY FEASIBLE ............................................................................................................................ 18
MAXIMALLY PRODUCTIVE ........................................................................................................................ 18
CONCLUSION ............................................................................................................................................. 18
VALUATION METHODOLOGY AND ANALYSIS .............................................................................. 18
SALES COMPARISON APPROACH ...................................................................................................... 19
SALES REVIEW .......................................................................................................................................... 19
COMPARABLE SALES GRID – PARCEL 41-59 ............................................................................................. 20
Appraisal Report – Vacant land parcels off Symonds Way, Reading, MA Page ii
2013 J.F. Ryan Associates, Inc.
VALUATION ANALYSIS – PARCEL 41-59 ................................................................................................... 20
COMPARABLE SALES GRID – PARCEL 35-133............................................................................................ 21
VALUATION ANALYSIS – PARCEL 35-133.................................................................................................. 21
SALES COMPARISON APPROACH – PARCEL 35-133 WITH EXTRAORDINARY
ASSUMPTIONS .......................................................................................................................................... 22
SITE VALUATION ANALYSIS – PARCEL 35-133.......................................................................................... 22
Adjustments .......................................................................................................................................... 22
FINAL VALUE RECONCILIATION ....................................................................................................... 24
PARCEL 41-59 ........................................................................................................................................... 24
PARCEL 35-133 ......................................................................................................................................... 24
PARCEL 35-133 – SUBJECT TO EXTRAORDINARY ASSUMPTIONS. .............................................................. 24
RESUME OF JOHN F. RYAN .................................................................................................................. 25
Appraisal Report – Two Vacant land parcels off Symonds Way, Reading, MA Page 3
2017 J.F. Ryan Associates, Inc.
Certification Statement
I certify to the best of my knowledge:
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 are my personal, impartial, unbiased professional analyses,
opinions and conclusions.
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.
I have performed no services, as an appraiser or in any other capacity regarding the property
that is the subject of this report within the three-year period immediately preceding
acceptance of this assignment.
I have no bias with respect to the property that is the subject of this report or to the parties
involved with this assignment.
My engagement in this assignment was not contingent upon developing or reporting
predetermined results.
My compensation is not contingent upon the reporting of a predetermined value or direction
in value that favors the cause of the client, the amount of the value estimate, the attainment of
a stipulated result, or the occurrence of a subsequent event directly related to the intended use
of this assignment.
My analyses, opinions, and conclusions were developed and this report has been prepared, in
conformity with the Uniform Standards of Professional Appraisal Practice (USPAP) issued
by the Appraisal Standards Board (ASB) of the Appraisal Foundation.
I have made a personal inspection of the subject parcels on May 25, 2017.
No one provided significant real property professional assistance to me in the development of
the conclusions contained in this report.
I have established sufficient competence to appraise this property through education and
experience, in addition to using the internal resources of the appraisal firm.
The property does not appear to have significant natural, cultural, recreational or scientific
value; however, I do not hold myself an expert in this field and my observations should not
be relied on in these matters.
Parcel 41-59
The market value estimate of the fee simple estate as of June 1, 2017 for parcel 41-59 is
$10,000 subject to the limiting conditions and assumptions set forth herein.
Parcel 35-133
The market value estimate of the fee simple estate as of June 1, 2017 for parcel 35-133 is
$76,000 subject to the limiting conditions and assumptions set forth herein.
Parcel 35-133 – Subject to Extraordinary Assumptions
The market value estimate of the fee simple estate as of June 1, 2017 for parcel 35-133
subject to two extraordinary assumptions as specified herein is $1,300,000 as well as subject
to the limiting conditions and assumptions set forth herein.
Appraisal Report – Two Vacant land parcels off Symonds Way, Reading, MA Page 4
2017 J.F. Ryan Associates, Inc.
Certified this eighteenth day of July 2017.
John F. Ryan
Massachusetts Certified General Real Estate Appraiser #1234, through 11/13/2017
Appraisal Report – Two Vacant land parcels off Symonds Way, Reading, MA Page 5
2017 J.F. Ryan Associates, Inc.
Assumptions and Limiting Conditions
This appraisal report and all of the appraiser’s work in connection with this appraisal assignment
are subject to the limiting conditions and other terms stated in this report. Any use of the
appraisal by any party, regardless of whether such use is authorized or intended by the appraiser,
constitutes acceptance of all such limiting conditions and terms.
This appraisal has been made with the following general assumptions:
No responsibility is assumed for the legal description or for matters including legal or title
considerations. Title to the property is assumed to be good and marketable unless otherwise
stated.
The property is appraised free and clear of any or all liens or encumbrances unless otherwise
stated.
Responsible ownership and competent property management are assumed.
The information furnished by others is believed to be reliable. However, no warranty is given
for its accuracy.
No opinion of a legal or engineering nature is intentionally expressed or implied and no
responsibility is assumed for matters of this nature.
No survey was made especially for this appraisal. Property lines and areas were taken from
public record and assumed to be correct.
It is assumed that there are no hidden conditions of the property, subsoil, or structures that
render it more or less valuable. No responsibility is assumed for such conditions without
engineering studies that may be required to discover them.
The existence of potentially hazardous material used in the construction or maintenance of
any building, such as the presence of urea formaldehyde foam insulation and/or existence of
toxic waste, which may or may not be present on the property, has not been considered. The
appraiser is not qualified to detect such substances. The client is urged to retain an expert in
this field, if desired.
It is assumed there is full compliance with all applicable federal, state, and local
environmental regulations and laws unless non-compliance has been stated, defined, and
considered in the appraisal report.
The appraisers assume that all required licenses, certificates of occupancy, consents, or other
legislative or administrative authority from any local, state, or national government or private
entity or organization have been or can be obtained or renewed for any use on which the
value estimate contained in this report are based upon.
The appraiser is not required to give testimony or appear in court because of having made
this appraisal with reference to the property in question, unless arrangements have been
previously made. The fee charged for this appraisal does not include payment for court
testimony or for further consultation.
The appraiser makes no representation or warranties as to the adequacy or condition of
appliances, electrical systems, plumbing and heating, air conditioning, the presence of
insulation, adequacy or condition of structural systems or any other subsystem within the
property. The appraisers assume no responsibility for any cost incurred to discover or correct
any deficiencies present in the property.
Wells and septic systems, if any, are assumed to be in good working condition and of
sufficient capacity for the stated Highest and Best Use.
Appraisal Report – Two Vacant land parcels off Symonds Way, Reading, MA Page 6
2017 J.F. Ryan Associates, Inc.
This appraisal report has been prepared for the exclusive benefit of Robert W. LeLacheur,
Town Manager, the Town of Reading, Massachusetts, and may not be used by any other
party. Any party who uses or relies upon any information in this report, without the
preparer's written consent, does so at their own risk.
Acceptance of and/or uses of this report constitute acceptance of these conditions.
Extraordinary Assumptions and Hypothetical Conditions
For Parcel 035-133, a second appraisal is made subject to the Extraordinary Assumptions listed
below. USPAP defines an extraordinary assumption as follows: an assumption, directly related
to a specific assignment, which, if found to be false, could alter the appraiser’s opinions or
conclusions. The two extraordinary assumptions are:
Range Road is privately owned and provides unencumbered access to the northern boundary
of Parcel ID 35-133.
Range Road existed prior to the Town of Reading’s adoption of the State subdivision law;
most likely during the mid to late 1950’s.
Purpose of the Appraisal
The purpose of this appraisal is to provide an opinion of the market value of the real property
described in this report in fee simple ownership as of June 1, 2017. The use of the appraisal is for
potential acquisition of the parcels by the Town of Reading.
The date of value utilized in an appraisal represents a property’s value as of that specific date. In
this case, value is a reflection of the most recent economic trends prior to each respective
valuation date along with buyers/sellers anticipation of future trends for the market in general
and for the subject office facilities in particular.
The term "market value" 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 each acting in what he or she considers
his or her best interest;
3. a reasonable time is allowed for exposure in the open market;
4. payment is made in terms of cash in U.S. dollars or in terms of financial arrangements
comparable thereto; and;
5. the price represents a normal consideration for the property sold unaffected by special or
creative financing or sales concessions granted by anyone associated with the sale."1
1 The Appraisal of Real Estate, Appraisal Institute, 14th Edition, 2013, page 59.
Appraisal Report – Two Vacant land parcels off Symonds Way, Reading, MA Page 7
2017 J.F. Ryan Associates, Inc.
The term fee simple estate is defined as Absolute 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.2
Intended Use of the Appraisal
The appraisal is to estimate the market value for use in establishing the market value of the
property for use in potential acquisition deliberations.
Intended Users of the Appraisal
The intended user of this appraisal is the Town Manager for the Town of Reading.
Scope of Work
The scope of this appraisal involved researching and analyzing the context of the subject’s
area/neighborhood as well as the characteristics of the subject property. I observed the subject
via a walk-through of much of the non-wetland land area on May 25, 2017 accompanied by Mr.
Ray Gagnon and Mr. William Zanni representing themselves as caretakers of the subject
properties. Included in my scope of work are the details as follows:
Read the latest and previous property deeds and the latest recorded plan.
Reviewed for adverse conditions visible during the on-site visit.
Research the subject’s competitive environment and documentation of pertinent market data.
Confirmation of the market data used in this report with public records and public officials in
the Town of Reading’s Town Hall.
Reviewed the subject’s property assessment information.
Reviewed public record data for the subject properties.
Development of a Sales Comparison Approach to value and reconciliation of a value range.
Search for comparable sales throughout Middlesex and Essex County, with particular focus
on areas most comparable to the subject properties.
This Appraisal Report presents the results of my analyses and subsequent conclusions. More
detailed documentation is retained in our office files. A partial list of this data is as follows:
Documentation of subject property information.
Zoning documentation
Documentation of regional economic and real estate trends.
Additional market data considered in the analyses (sales and sales listings)
Photographs of subject parcels
Ownership History
A search of the Middlesex County, Southern District Registry of deeds did not provide clear
evidence of the parcel areas or associated ownership of the subject parcels. The Town’s property
assessment records list book and page references both of which do not provide clear indications
of conveyance. A search of the registry of all grantors/grantees named Mary E. Zanni did not
provide any additional information.
2The Dictionary of Real Estate Appraisal, Appraisal Institute 6th Edition, 2015, page 90.
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2017 J.F. Ryan Associates, Inc.
Economic Conditions as of Date of Value
The economy is strong in the metropolitan Boston area. The Massachusetts economy is fast
approaching full capacity. The Massachusetts unemployment rate has fallen to below 3 percent,
and is likely even lower in the metro Boston area. Based on anecdotal reports from selected
employers, wages appear to be rising rapidly for skilled manufacturing and construction workers,
indicating a scarcity of qualified workers. The Massachusetts economy is expected to continue to
experience moderate growth in 2017 and into 2018.
Area, City and Neighborhood Data
The property is located in the heart of the region’s high technology community in the Town of
Reading, 12 miles north of Boston within the metropolitan area surrounding the Boston’s urban
core.
Reading Regional Area Map
Reading Local Area Map
Appraisal Report – Two Vacant land parcels off Symonds Way, Reading, MA Page 9
2017 J.F. Ryan Associates, Inc.
Neighborhood
The subject’s immediate neighborhood is located off I95, locally known as Route 128, the Salem
Street exit.
The primary land uses in the immediate neighborhood are recreation including a Town owned
sports field and ice skating rink and a private club, Reading Rifle and Revolver which offers trap,
skeet, indoor pistol, and outdoor rifle and pistol ranges including a 600 yard rifle range.
According to public records, Reading Rifle & Revolver Club, Inc. was incorporated in the State
of Massachusetts on February 1, 1935. The location of the club was listed as Haverhill ST,
Reading, MA.
Neighborhood Map
Neighborhood Outlook
The subject’s immediate neighborhood is a recreational land with well-established adjacent
residential improvements, primarily detached single-unit residential parcels. Given its history, it
is my opinion residential real estate values in the subject neighborhood will continue to exhibit
upward trend consistent with the Boston metropolitan area economy.
Appraisal Report – Two Vacant land parcels off Symonds Way, Reading, MA Page 10
2017 J.F. Ryan Associates, Inc.
Neighborhood Zoning Map
Both parcels are located in the S-40 zone of their respective map locations, map 41 and 35.
Map 35-133 – 15.2 acre parcel (landlocked)
Appraisal Report – Two Vacant land parcels off Symonds Way, Reading, MA Page 11
2017 J.F. Ryan Associates, Inc.
Map - Portion of Range Road owned by Town of Reading
Note on the map below access to parcel 035-133 (bounded by the yellow lines) is from the
private road, Range Road (mislabeled on the map as an extension of Symonds Way). The Town
of Reading owns approximately the first 95 feet of Range Road to the boundary of the subject
parcel as noted by the red line on the map below. Without legal access to the nearest public road,
Symonds Way, the subject parcel is landlocked and therefore precluded from residential single-
unit development.
The front portion of the subject parcel not in a wetland area also abuts two parcels with frontage
along Haverhill Street. Given the subject’s distance from Haverhill Street across these parcels is
over 500 feet and with optimal access a significant portion of this distance (approximate 50%)
would traverse wetlands, physical access via this option is unlikely. Furthermore, given the costs
to acquire the parcel as improved, removal of the improvements and finally road improvements
providing access to the subject parcel, financial feasibility is highly unlikely.
Appraisal Report – Two Vacant land parcels off Symonds Way, Reading, MA Page 12
2017 J.F. Ryan Associates, Inc.
Map 41-59 – 10 acre parcel (landlocked)
The subject parcels are located in the S40 Residence District. The allowable uses within the S40
District are listed below:
Appraisal Report – Two Vacant land parcels off Symonds Way, Reading, MA Page 13
2017 J.F. Ryan Associates, Inc.
The S-40 District dimensional requirements are listed in the Table below:
The S-40 District also provides for a variety of uses by right and additional uses by special
permit. The site is well in excess of the minimum bulk requirements for area and setbacks.
Property Identification and History
The subject parcels are landlocked and non-contiguous, with the Symonds Way the closest
public road.
Assessor’s Parcel ID: 035.0-0000-0133.0
Parcel Land Area: 15.2 acres
This property consists of an irregularly shaped, landlocked parcel of 15.2 acres on the southern
side of Range Road. As shown on the map, the site’s private road frontage is along Range Road
with excellent physical ingress and egress to Symonds Way, a public road. As noted above, there
is no legal access to a public road including Symonds Road, the closest public road.
Symonds Road is accessed via Haverhill Street which provides excellent access to the Town
central business district to the northwest and approximately one mile south is direct access to
Route 128 (I-95).
The parcel slopes downward from Range Road directly into designated wetland area. Symonds
Way is served with all public utilities from Haverhill Street and according to the Town Engineer,
with legal access, it appears highly feasible to extend these services along Range Road. The soils
not in the wetland appear stable with regard to supporting the improvements. There was no
evidence of hazardous material on the site. There are several concrete fixtures along the side of
the Range Road. Mr. Gagnon stated this material was used when he operated his construction
business. This material appears to have no detrimental effect on the property’s potential
development.
Overall, this is an attractive parcel for potential residential site development given the
neighborhood area consists of relatively homogeneous single-unit residential properties with
excellent access to the Town center and Route 128.
A significant portion of the property is in the floodplain, Zone X as shown below. Zone X is an
area of moderate flood hazard, usually the area between the limits of the 100 ‐ year and 500 ‐
year floods.
Appraisal Report – Two Vacant land parcels off Symonds Way, Reading, MA Page 14
2017 J.F. Ryan Associates, Inc.
Parcel 35-133 – Floodplain Map
The following map replicates the FEMA map above with an overlay (orange) of the FEMA
designated Zone X from the Town’s GIS maps.
Appraisal Report – Two Vacant land parcels off Symonds Way, Reading, MA Page 15
2017 J.F. Ryan Associates, Inc.
Assessor’s Parcel ID: 41.0-0000-0059.0
Parcel Land Area: 10 acres
This property consists of an approximately rectangular shaped, landlocked parcel of 10 acres
north of Symonds Way, the portion due north of Range Road. There is no roadway to the site. I
was able to travel by foot through a wooded are to review the approximate area of the property.
The area consisted of undulating woodland as well as some visible wet areas (see map below,
note FEMA designated wetland areas in orange). The minimum distance to the parcel from
Symonds Way is approximately 700’ crossing land owned by the Reading Rifle and Revolver
Club. Given the distance required to access the site, the costs to acquire a right-of-way, construct
a road and provide utilities to the parcels, it is unlikely that even if sufficient developable land is
available within the parcel boundaries, single-unit residential site development is likely not
financially feasible. Therefore, we consider this property as undevelopable woodlands at this
time for purposes of this appraisal.
Parcel 41-59 – Map
Property Assessments and Taxes
The property assessments and taxes for the property are summarized below:
The Reading Assessor’s Department is subject to annual review by the Massachusetts
Department of Revenue to ensure that properties are assessed uniformly at market value. The
Town’s property assessments have met certification requirements and in particular, for the fiscal
year 2017 assessments. There are limited vacant land parcels in the Town however it appears
comparable undevelopable properties are assessed in a similar manner.
Parcel ID Acres
Valuation
Date
Fiscal
Year
Property
Assessment
Tax
Rate
Property
Taxes
35-133 15.2 Jan 1, 2016 2017 $38,000 $14.03 $533
41-59 10.0 Jan 1, 2016 2017 $10,000 $14.03 $140
Appraisal Report – Two Vacant land parcels off Symonds Way, Reading, MA Page 16
2017 J.F. Ryan Associates, Inc.
Subject Market and Marketability
As noted above, while parcel 35-133 has frontage on Range Road there is no legal access to
Symonds Way. Likewise, there is no legal access to parcel 41 -59 and due to the extensive
woodland and wetland area there is limited potential use for this parcel.
With legal access to Symonds Way, there is development potential for parcel 35-133 as Symonds
Way provides excellent access to the area amenities.
Strong demand continues for single-unit residential property in Reading. As the following chart
shows, prices since 2014 continue their strong upward trend with the current median sale price of
$522,000.
The median days on market has been consistent over the past three years with homes selling
typically in 20 days or less during the traditional selling periods during the year.
There were over 30 detached single-unit homes on the market as of June 1, 2017 with a range in
asking price from $405,000 to $1.3M. There is currently one residential site in Reading on the
market, 98 Sanborn Lane, 1 acre with an asking price of $549,000 and five homes within ½ mile
of the subject with asking prices between $550,000 and $1.1M.
Therefore, given the continued strong market demand for residential property in Reading and the
marketability of residential sites due their rarity in the region, a second valuation estimate is
made of parcel 35-133 based on two extraordinary assumptions as the parcel with legal access is
highly attractive for residential development.
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2017 J.F. Ryan Associates, Inc.
Absorption Period – Exposure Time
The absorption period is the period of time from when a property subdivision is first exposed to
the market until all sites are sold. Given the limited use for landlocked parcels, each parcel as is,
is most attractive to abutting parcel owners. Therefore, exposure time is likely as much as one
year.
For the second estimate of value for parcel 35-133, subject to the extraordinary assumptions,
absorption and exposure time estimates are significantly lower. Given the small number of sites
and strong demand as noted above, I estimate the absorption period as a similar, slightly longer
than the exposure time. Exposure time is defined as the estimated length of time that the property
interest being appraised would have been offered on the market prior to the hypothetical
consummation of a sale at market value on the effective date of the appraisal.3 Typical exposure
time for residential property in this market range from less than 30 days during most of the year.
Given the limited vacant land sale data, I estimate the exposure time for available vacant land
single-unit residential development sites between three and six months.
Highest and Best Use Discussion
Highest and best use is defined as:
The reasonably probable and legal use of vacant land or an improved property,
which is physically possible, appropriately supported, financially feasible, and that
results in the highest value.4
As noted above, both parcels are landlocked with parcel 41-59 likely will remaining in its
current, undevelopable status for the foreseeable future. Given the location of parcel 35-133
along the private Range Road a second estimate of value is developed based on the extraordinary
assumptions previously specified. The discussion in the next section therefore relates only to the
second value estimate for parcel 35-133.
Highest and Best Use Discussion – Parcel 35-133, with
Extraordinary Assumptions
Probable and Legally Permissible
The 15.2 acre site is located in the S-40 Residential. This zone allows for a single-unit residential
development and other residential uses by right and by special permit. There is limited vacant
land available in the region for residential site development, therefore subject to the
extraordinary assumptions stated herein (legal access) it is highly probable for this property to
attract strong interest for residential site development.
3 The Dictionary of Real Estate Appraisal, p 83.
4 The Appraisal of Real Estate, pages. 277-278.
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2017 J.F. Ryan Associates, Inc.
Assuming legal access, the parcel appears to legally qualify for development pursuant to the
APPROVAL NOT REQUIRED (ANR) which allows for request for subdivision plan not
requiring approval under the Subdivision Control Law, Massachusetts General Laws, Chapter
41, Section 81K-81GG
Physically Possible
The most restrictive dimensional control given the size, shape, location and soils is the minimum
frontage which is 200’ in the S40 District. Given there is approximately 920 linear feet along the
Range Road right of way, the maximum number of potential sites is four.
Financially Feasible
Given the pattern of local land use in the area, economic support and financial feasibility exists
for the allowed land use of single-unit residential development. This use is highly likely to
generate a positive value to the land and therefore is financially feasible.
Maximally Productive
The final test of highest and best use is whether the use is maximally productive in financial
terms. Change is one constant in the real estate market and in some instances the existing use of
land is no longer its highest and best use. If a site has a higher value under another use, then that
becomes the highest and best use. A review of market participants indicate a residential site
developer and/or residential builder are the most probable buyers.
Conclusion
Assuming legal access, it is my opinion, parcel 35-133 highest and best use as of June 1, 2017 is
for development of four single-unit residential sites. I reviewed the property on May 25, 2017
and based upon the strong demand for residential sites in the area and continued favorable
market conditions for the foreseeable future make such development highly likely.
Valuation Methodology and Analysis
Three basic approaches are available to develop and report an estimate of market value. They
are:
The Cost Approach
The Income Approach
The Sales Comparison Approach
The cost approach, in particular the replacement cost method, provides an estimate of value
based upon the cost of obtaining a site and the construction of improvements consistent with the
highest and best use. Given the parcels are unimproved, the cost approach is not developed in
this appraisal.
The income capitalization approach is a method of analyzing the present worth of future benefits
of the ownership of property based on its ability to provide a net income stream. The income
approach is considered reliable when arms-length comparable leases are available and the
economic data is available to develop market oriented capitalization rates. Residential vacant
land is not typically leased in the region and there are no comparable vacant land parcels leased
in the subject area. Therefore the income approach is developed in this appraisal.
Appraisal Report – Two Vacant land parcels off Symonds Way, Reading, MA Page 19
2017 J.F. Ryan Associates, Inc.
The sales comparison approach uses recent sales of similar properties with a similar highest and
best use. These sales are investigated and analyzed in comparison to the subject to an indication
of value. The values derived from the adjusted comparable sales form a range of value for the
subject. Where there are insufficient vacant land sales, residual land value analysis of improved
property sales is employed using the market extraction technique. This approach is considered
reliable when there are sufficient recent sales and/or residuals that are comparable with the
subject site.
There is ample residential market activity in the region and particularly in Reading. There is little
available residential land for residential development in the area. Therefore, given the high
demand for residential property in the area, the sales comparison approach using the market
extraction technique is developed in this report.
The appraisal process concludes with the final reconciliation of the values derived and applied
for a single point estimate of market value.
Sales Comparison Approach
Sales Review
A search of all non-distress land sales considered classified as undevelopable in Middlesex and
Essex Counties was completed from July 1, 2014 through July 1, 2017. A similar search in both
counties for land classified as potentially developable did not generate any comparable sales.
The undevelopable sales were reviewed and analyzed with more weight given to communities in
geographic proximity to the Town of Reading and comparable access to Route 128 and to sales
closer to the June 1, 2017 valuation date. As expected, there are limited sales of larger size
parcels, (developable or not) which are comparable to the subject properties. From Middlesex
County, 25 sales and from Essex County, 2 sales, each classified as undevelopable, were
identified for further analysis. Recorded deeds from the respective Registries of Deeds were
reviewed as part of this analysis.
Appraisal Report – Two Vacant land parcels off Symonds Way, Reading, MA Page 20
2017 J.F. Ryan Associates, Inc.
Comparable Sales Grid – Parcel 41-59
Valuation Analysis – Parcel 41-59
There was only one sale of undevelopable land in Reading over the past three years. On October
14, 2016, off Norman Road, 0.69 acres sold for $7,600. Given the small size of the sale
compared with the subject, a size adjustment is required. There were also four additional sales of
undevelopable land from the surrounding area which provide market evidence for the value of
undevelopable land. The 3.7 acre parcel sale in North Reading, while still significantly smaller
compared with the subject, provides good evidence of the diminishing value on a per acre basis
as parcel size increases. The deed restriction on this parcel specifies the parcel cannot be used as
a separate building lot and the land area cannot be used in combination with adjourning parcels
for purposes of satisfying legal requirements for any adjourning parcels.
The remaining comparable sales are all significantly smaller compared with the subject so
therefore are given little weight. Given the distance the landlocked subject parcel is from the
nearest public way, a reasonable estimate of the per acre value for 10 acres of undevelopable rear
land consisting of woodland and wetland areas is $1,000 per acre. Therefore the estimated value
of the Parcel 41-59, 10 acre parcel as of June 1, 2017 is $10,000.
Subject Sale #1 Sale #2 Sale #3 Sale #4 Sale #5
Parcel
41-59
Norman
RD
8-12 Wood
ST
Salem ST
Rear
5 Alaska
Ave
Greene ST
Rear
Town Reading Reading
North
Reading Wilmington Bedford Beverly
Sale Price 6,900 $14,000 $18,000 $21,000 $20,000
Sale Date 10/14/16 4/10/15 11/18/14 12/5/14 3/9/17
Data Source Public Public Public Public Public
Book/Page 68209/191 65197/72 28629/68 64614/368 35726/205
Parcel - sq. feet 435,600 30,056 161,172 18,295 20,000 12,384
Sale Price/s.f.$0.23 $0.09 $0.98 $1.05 $1.61
Parcel - acres 10.0 0.69 3.70 0.42 0.46 0.28
Sale Price/acre $10,000 $3,784 $42,858 $45,738 $70,349
Notes
deed
restriction -
improve-
ments
deed
restriction
No Sub-
division for
10 years
includes
ROW
easement
Appraisal Report – Two Vacant land parcels off Symonds Way, Reading, MA Page 21
2017 J.F. Ryan Associates, Inc.
Comparable Sales Grid – Parcel 35-133
Valuation Analysis – Parcel 35-133
As noted above, there was only one sale of undevelopable land in Reading over the past three
years, off Norman Road, 0.69 acres sold for $7,600. There were also four additional sales of
undevelopable land from the surrounding area which provide market evidence for the value of
undevelopable land. As described in detail above, the undevelopable 3.7 acre parcel sale in North
Reading, is significantly smaller compared with the subject and provides good evidence of the
diminishing value on a per acre basis as parcel size increases. While the remaining comparable
sales are all significantly smaller compared with the subject sales three and four are given some
weight as they each have varying degrees of proximity to developed sites and therefore have
higher desirability compared with land locked parcels at more distant locations from public ways
similar to the subject parcel 41-59 included in this report. While comparable sale five is a
significantly higher value indicator it is considered in this analysis given it sold three months
prior to the date of value.
Given the frontage of the landlocked subject parcel to the private road known as Range Road and
relatively short distance (less than 100 feet) from the nearest public way, the subject property is
considered more valuable compared with other landlocked parcels further from the public way.
While the comparable sales are significantly smaller than the subject, they provide some
evidence of market value recognizing the requirement for a substantial size adjustment. A
reasonable estimate of the per acre value for the subject’s 15.2 acres land consisting of woodland
and wetland areas is $5,000 per acre. Therefore the estimated value of parcel 35-133, 15.2 acres
as of June 1, 2017 is $5,000 X 15.2 = $76,000.
Subject Sale #1 Sale #2 Sale #3 Sale #4 Sale #5
Parcel
35-133
Norman
RD
8-12 Wood
ST
Salem ST
Rear
5 Alaska
Ave
Greene ST
Rear
Town Reading Reading
North
Reading Wilmington Bedford Beverly
Sale Price 6,900 $14,000 $18,000 $21,000 $20,000
Sale Date 10/14/16 4/10/15 11/18/14 12/5/14 3/9/17
Data Source Public Public Public Public Public
Book/Page 68209/191 65197/72 28629/68 64614/368 35726/205
Parcel - sq. feet 662,112 30,056 161,172 18,295 20,000 12,384
Sale Price/s.f.$0.23 $0.09 $0.98 $1.05 $1.61
Parcel - acres 15.2 0.69 3.70 0.42 0.46 0.28
Sale Price/acre $10,000 $3,784 $42,858 $45,738 $70,349
Notes
deed
restriction -
improve-
ments
deed
restriction
No Sub-
division for
10 years
includes
ROW
easement
Appraisal Report – Two Vacant land parcels off Symonds Way, Reading, MA Page 22
2017 J.F. Ryan Associates, Inc.
Sales Comparison Approach – Parcel 35-133 with
Extraordinary Assumptions
There was one sale of a building site in a subdivision on Strawberry Hill Lane, west of Main
Street, 2.5 miles from the subject in October 2016. The site sold for $525,000. Therefore, market
extraction is used to estimate the value of single site within the subject property. Market
extraction requires the sales of improved properties where the value of the improvements is
deducted from the total sale price resulting in an estimated sale price for the building site. This
technique is most applicable when the improvements contribute little to the total sale price of the
property. Therefore, we analyzed all sales, approximately 25, within one mile of the subject
property and focused on sales of older homes, with the size, housing design style and condition
considered less attractive to contemporary buyers. We selected sales as close to the June 1, 2017
valuation date to minimize the need to recognize changes in market conditions and most
important to most accurately reflect the knowledge of market participants as of the date of value.
Site Valuation Analysis – Parcel 35-133
Adjustments
The location of the comparable sales were all within one mile of the subject and therefore no
adjustments were made for location.
While a building site is a primary unit of comparison, a 10% adjustment is made to sites less than
near or less than 10,000 square feet and 5% for sites up to 15,000 square feet.
Subject Sale #1 Sale #2 Sale #3 Sale #4 Sale #5 Sale #6 Sale #7 Sale #8
379
Haverhill
ST
21
Juniper
Circle
288
Charles
ST
241 Pearl
ST
315 Pearl
ST
377 Pearl
ST
18 Wells
RD
415 Pearl
ST
Sale Price 539,000 $660,000 $650,000 $539,000 $665,000 $616,000 $616,000 $660,000
Sale Date 5/15/17 6/5/17 5/9/17 6/8/17 5/16/17 5/25/17 5/25/17 5/24/17
Location/Proximity to Subject
Similar/
1000 feet
Similar-
1/3 Mile
Similar-
1/3 Mile
Similar-
3/4 Mile
Similar-
3/4 Mile
Similar-
0.85 Mile
Similar-
0.85 Mile
Similar-
0.87 Mile
Data Source Public Public Public Public Public Public Public Public
Physical Characteristics
Site size in square feet 40,000 20,374 21,511 15,402 10,105 12,860 16,160 9,664 22,954
Year Built 1760 1958 1947 1953 1955 1950 1909 1964
Improvements - Living Area 2,400 2,665 2,066 1,400 2,328 1,795 1,722 1,964
Adjustments
Location $0 $0 $0 $0 $0 $0 $0 $0
Site size $0 $0 $0 $53,900 $33,250 $0 $61,600 $0
Improvements - Living Area -$120,000 -$133,250 -$103,300 -$70,000 -$116,400 -$89,750 -$86,100 -$98,200
Net Adjustment -$120,000 -$133,250 -$103,300 -$16,100 -$83,150 -$89,750 -$24,500 -$98,200
Gross Adjustment $120,000 $133,250 $103,300 $123,900 $149,650 $89,750 $147,700 $98,200
Gross Adjustment %22%20%16%23%23%15%24%15%
Adjusted Sale Price $419,000 $527,000 $547,000 $523,000 $581,850 $526,250 $591,500 $561,800
Average Adjusted Sale Price $534,675
Median Adjusted Sale Price $537,000
Coefficient of Variation 10%
Appraisal Report – Two Vacant land parcels off Symonds Way, Reading, MA Page 23
2017 J.F. Ryan Associates, Inc.
An adjustment for living area is made at the rate of $50/square foot. All the comparable sales
were constructed over 50 years ago and the existing improvements on each property are not
considered optimal among contemporary home buyers.
The average (mean) adjusted sale price is $535,000 with a median of $537,000 and a coefficient
of variation (COV) of 10%. The COV is a measure of relative variation and it indicates there is
good consistency among all the adjusted sale price estimates. Less weight is given to the
geographically closest sale as it is located directly on Haverhill ST a higher traffic location.
Additionally the property due to the age of the improvements (year built 1760) is unique and
maintaining any antique features is attractive to a limited market. While removal of this sale
from the analysis increases the average and median slightly, approximately $550,000, the COV
decreases by nearly 50% to 5.1%.
The remaining sales all occurred within one month of the date of value and therefore are given
equal weight. Therefore, the estimated retail value for an individual site ready for immediate
development with all utilities in place is $550,000. This estimate is the same as the asking price
for the one building site on the market now in the Town of Reading mentioned earlier in this
report.
The subject property requires significant costs related to services necessary to subdivide the
property including legal, surveying, engineering design, utility construction costs and
entrepreneurial profit for the developer. I estimate legal, surveying, engineering design and
utility construction costs at 10% of the total projected sale price. I estimate sales commissions at
5% for the sale of the individual sites. Typical property developers seek at least a 25% profit
margin. The developer must absorb all acquisition costs, secure all necessary planning and
subdivision approvals and permits, arrange financing (debt and equity), retain a general
contractor to oversee construction of the subdivision and all infrastructure improvements,
negotiate and execute infrastructure construction contracts, and cause finished lots (inventory) to
be successfully marketed. Profit on land and infrastructure costs (total project cost) compensate
the developer for the coordination and entrepreneurial skill required to take raw land and
transform it into a subdivision (legally and physically) of permit-ready finished lots that must be
marketed and sold in a timely manner.
Therefore our estimate of the subject property is calculated as follows;
$550,000 x 4 vacant land sites = $2,200,000
Less:
10% development costs = $ 220,000
5% sales commissions = $ 110,000
25% entrepreneurial profit = $ 550,000
Total development costs = $880,000
Property Value = $1,320,000
Rounded $1,300,000
Appraisal Report – Two Vacant land parcels off Symonds Way, Reading, MA Page 24
2017 J.F. Ryan Associates, Inc.
Final Value Reconciliation
Parcel 41-59
There are limited available sales of landlocked, undevelopable land. Given the single
undevelopable land sale in the Town and review of other undeveloped land sales in the area, the
final estimate of the property value as of June 1, 2017 is $10,000.
Parcel 35-133
This is a somewhat unique landlocked parcel given it has physical access with frontage on a
private road. However, there is no legal access the absence of which precludes any single-unit
residential development compliant with municipal zoning requirements. A review of available
undevelopable sales indicate there is a market for such land particularly if it has reasonable
proximity to a public way. The comparable sales are all significantly smaller than the subject but
they provide a reasonable basis and support to generate an estimate of value. Given the
comparable sales and based on my 38 years of experience appraising undevelopable land in the
region, a reasonable estimate of the value per acre is $5,000. Therefore, final estimate of the
property value as of June 1, 2017 is $76,000.
Parcel 35-133 – Subject to Extraordinary Assumptions.
The process of reconciliation involves the analysis of each indication of value. The quality of
data employed the significance of each approach as it relates to market behavior, and the
defensibility of each approach is considered. As detailed in the report, the Sales Comparison
Approach to value using market extraction is the most appropriate method to estimate the value
of the subject property due to the age of the improvements and the limited availability of
comparable sales data. There are few actual sale prices of building sites in the Town with one
sale 9 months ago in an otherwise fully improved single-unit residential subdivision of $525,000
and a current asking price of a building site of $549,900. Therefore the final estimate of the
property value after recognizing the costs to subdivide, develop and sell the resulting building
sites as of June 1, 2017 is $1,300,000.
Appraisal Report – Two Vacant land parcels off Symonds Way, Reading, MA Page 25
2017 J.F. Ryan Associates, Inc.
Resume of John F. Ryan
John F. Ryan, CAE, is the Managing Partner of J.F. Ryan Associates, Inc. a consulting group
that provides real property appraisal and ad valorem mass appraisal, management and litigation
support to a variety of clients primarily in the New England area but also throughout the US and
Canada.
Mr. Ryan appraises all types of real estate including office buildings, industrial plants, public
utilities, warehouses, shopping centers, apartments, restaurants, hotel/motels, nursing homes,
recreation properties, residential properties and vacant land. While Mr. Ryan’s firm specializes
in mass appraisal for ad valorem taxation, they also provide appraisal services for other purposes
including negotiating and determining market value, estate taxation, and eminent
domain/condemnation including partial takings and temporary easements.
Mr. Ryan has published numerous articles and lectured at a variety of professional conferences
and research symposiums over the past 35 years. He has participated in the development of
numerous appraisal standards setting groups over this period. As an instructor, seminar
participants have continually remarked on his ability to talk to novices as well as experts and
consistently rate his ability to explain complex technical issues as excellent.
Mr. Ryan is currently serving as a member of The Appraisal Foundation’s Appraiser
Qualifications Board which sets the qualification requirements addressing education and
experience for over 90,000 appraisers in the United States. Mr. Ryan was appointed to a three-
year term in commencing in 2016.
Mr. Ryan completed six years’ service in 2006 on the Board of Trustees of the Appraisal
Foundation where he has held several key positions including service on the Executive
Committee of the Board of Trustees as well as Chair of the Finance and Audit Committees. He
also worked for the Appraiser Qualification Board as a Subject Matter Expert in the development
of national qualifying exams for real estate appraiser certifications from 2007 through 2015.
Mr. Ryan also has served as an expert for several State Boards of Registration for Real Estate
Appraisers in providing detailed in-depth desk reviews of work product appraisals provided to
the Board for license violation purposes.
Prior Work History
Chief Appraiser, Assessors Department, City of Woburn, Massachusetts, 1985-87
Manager, Massachusetts Department of Revenue, Boston, 1979-1985
Analyst, New York State Office of Real Property Services, Albany, 1978-79.
Degrees and Professional Designations/Affiliations
Pennsylvania State University, University Park, PA, Master’s Degree. 1978
BA Merrimack College, North Andover, Massachusetts, Bachelor’s Degree, 1977 with a
concentration in economics/political science
Certified General Real Estate Appraiser in Massachusetts, Connecticut and New York.
CAE, Certified Assessment Evaluator, International Association of Assessing Officers