Cchb-restricted-use-appraisal-report.pdf

BUSINESS VALUATION • PROFESSIONAL SERVICES VALUATIONS • ASSET APPRAISALS • REAL ESTATE • TRANSACTION ADVISORY • CONSULTING 

DALLAS • NASHVILLE

Fair Market Value and Fair Market Rent of the Fee Simple Estate

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Real Estate Identified as Real Estate Parcels Owned by Citrus County Hospital Board Citrus County, Florida RESTRICTED USE APPRAISAL REPORT Appraisal Date: February 6, 2013 Distribution Date: March 19, 2013 Prepared for Mr. Robert Priselac Citrus County Hospital Board of Trustees Citrus County Hospital Board 123 South Pine Avenue Inverness, Florida 34452

2515 McKinney Avenue, Suite 1500 • Dallas, Texas 75201 • Telephone:  214.369.4888 • Fax: 214.369.0541 3100 West End Avenue, Suite 940 • Nashville, Tennessee 37203 • Telephone: 615.777.7300 • Fax: 615.777.7301

March 19, 2013 Mr. Robert Priselac Citrus County Hospital Board of Trustees Citrus County Hospital Board 123 South Pine Avenue Inverness, Florida 34452 Re: Fair Market Value and Fair Market Rent of Various Parcels Dear Mr. Priselac, At your request, we have estimated the Fair Market Value and the Fair Market Rent of the Fee Simple Estate in the real estate identified in the table located on the following page. Each of the properties is located in Citrus County, Florida. The subject properties consist of approximately 108,531 square feet of gross building area in several buildings (combined) which are identified in the chart located on the following page. The effective date of the valuation is February 6, 2013. The following analysis is not to be used for any other purpose or distributed, in whole or in part, to third parties, other than Citrus County Hospital Board and their duly authorized representatives, the Internal Revenue Service, Office of Inspector General and other regulatory authorities without the express written consent of VMG Health.

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The opinions presented are subject to the following extraordinary assumption. An extraordinary assumption is directly related to a specific assignment, as of the effective date of the assignment results, which, if found to be false, could alter the appraiser’s opinions or conclusion. Within this specific assignment, according to the Citrus County Property Appraiser, the combined gross building area of the subject properties is 108,531 square feet. Should the actual combined or individual gross building areas differ from the assumed areas, the appraiser reserves the right to amend the contents of this Restricted Use Appraisal Report, including the conclusions. In addition, the opinions presented are subject to the following hypothetical condition. A hypothetical condition is a condition, directly related to a specific assignment, which is contrary to what is known by the appraiser to exist on the effective date of the assignment results, but is used for the purpose of analysis. The property is subject to the Lease Agreement between Citrus County Hospital Board and Citrus Memorial Health Foundation, Inc. For purpose of this analysis, the lease is not considered; the property rights appraised are those of the Fee Simple Estate.

Chateau Plaza

3100 West End Avenue

2515 McKinney Avenue Suite 1500 Dallas, Texas 75201 P 214.369.4888 F 214.369.0541

Suite 940 Nashville, Tennessee 37203 P 615.777.7300 F 615.777.7301 www.vmghealth.com

Based on this analysis, the Fair Market Value and the estimated range of Fair Market Rent of the Fee Simple Estate as of February 6, 2013 for the subject real estate are reasonably estimated to be:

Citrus County Hospital Board Parcel No. 2 4 6 24 9 10 23 11 17 19 20 12 13 14 15 16 21 22 25

Location

City

10332 North Citrus Springs Boulevard 7646 South Florida Avenue 204 and 206 South Pine Avenue 201 South Seminole

200 West Grace Street 208 West Grace Street 123 South Seminole 112 South Seminole Avenue 111 South Osceola Avenue 302 West Grace Street 108 South Seminole Avenue 6254 West Corporate Oaks Drive 700 Southeast 5th Terrace, Units 7 and 8 450 West Roosevelt Boulevard 810 Medical Court East 6043 West Nordling Loop 131 South Citrus Avenue 108 South Seminole Avenue 206 South Seminole Avenue

Land Area

Citrus Springs Floral City Inverness Inverness Inverness Inverness Inverness Inverness Inverness Inverness Inverness Citrus County Crystal River Beverly Hills Inverness Citrus County Inverness Inverness Inverness

Building Area

FMV

276,976 98,543 16,250 36,563 14,950 5,420 119,758 5,541 52,623 31,241 2,130 39,578 2,784 82,960 38,392 40,628 170,077 20,692 81,250

3,200 3,280 12,701 2,874 2,784 3,493 7,066 6,690 66,443 -

DRAFT

$ $ $ $ $ $ $ $

540,000 350,000 80,000 180,000 70,000 30,000 1,300,000 25,000 305,000 180,000 10,000 290,000 200,000 450,000 880,000 850,000 9,000,000 100,000 420,000

1,136,356

108,531

$

15,260,000

Total

$ $ $ $ $ $ $

FMR Low*

FMR High*

$ $

8.00 9.00

$ $

10.00 11.00

$

7.00

$

9.00

$ $ $ $ $ $

10.00 8.00 10.00 13.00 13.00 13.00 **

$ $ $ $ $ $

12.00 10.00 12.00 15.00 15.00 15.00 **

* Per square foot of gross building area. Implicit in this rental rate estimate is a NNN basis, with the tenant being responsible for all operating costs. The lease term would be three to five years, without concessions, on an “as is” basis. The rate does not include an annual CPI increase in the base rate. ** Per square foot of gross building area. Implicit in this rental rate estimate is a NNN basis, with the tenant being responsible for all operating costs. The lease term would be a minimum of five years, without concessions, on an “as is” basis. The rate also includes an annual CPI increase in the base rate.

Respectfully submitted,

Charles B. Nolen, MAI Manager Florida Certified General Real Estate Appraiser RZ3509

Chateau Plaza

3100 West End Avenue

2515 McKinney Avenue Suite 1500 Dallas, Texas 75201 P 214.369.4888 F 214.369.0541

Suite 940 Nashville, Tennessee 37203 P 615.777.7300 F 615.777.7301 www.vmghealth.com

RESTRICTED USE APPRAISAL REPORT

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TABLE OF CONTENTS REPORT FORMAT

5

IDENTIFICATION OF PROPERTIES

5

PURPOSE OF THE APPRAISAL

9

PROPERTY RIGHTS

9

CLIENT AND INTENDED USE OF THE APPRAISAL

9

EFFECTIVE DATE OF VALUATION

9

DEFINITIONS

9

SCOPE OF ENGAGEMENT

11

COMPETENCY STATEMENT

14

PROPERTIES HISTORIES

14

SUMMARY OF SALIENT FACTS – PARCEL NO. 2

15

SUMMARY OF SALIENT FACTS – PARCEL NO. 4

26

SUMMARY OF SALIENT FACTS – PARCEL NOS. 6 AND 24

35

SUMMARY OF SALIENT FACTS – PARCEL NOS. 9, 10 AND 23

38

SUMMARY OF SALIENT FACTS – PARCEL NOS. 11, 17, 19 AND 20

49

SUMMARY OF SALIENT FACTS – PARCEL NO. 12

52

SUMMARY OF SALIENT FACTS – PARCEL NO. 13

60

SUMMARY OF SALIENT FACTS – PARCEL NO. 14

64

SUMMARY OF SALIENT FACTS – PARCEL NO. 15

73

SUMMARY OF SALIENT FACTS – PARCEL NO. 16

82

SUMMARY OF SALIENT FACTS – PARCEL NO. 21

91

SUMMARY OF SALIENT FACTS – PARCEL NO. 22

103

SUMMARY OF SALIENT FACTS – PARCEL NO. 25

106

ASSUMPTIONS & LIMITING CONDITIONS

109

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CITRUS COUNTY HOSPITAL BOARD

RESTRICTED USE APPRAISAL REPORT

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CITRUS COUNTY HOSPITAL BOARD

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RESTRICTED USE APPRAISAL REPORT

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OVERVIEW REPORT FORMAT This is a Restricted Use Appraisal Report which is intended to comply with the reporting requirements set forth under Standard Rule 2-2 (c) of the Uniform Standards of Professional Appraisal Practice for a Restricted Use Appraisal Report. As such, it does not include discussions of the data, reasoning and analyses that were used in the appraisal process to develop the appraiser’s opinion of the Fair Market Value and the Fair Market Rent of the real estate identified in this report. Supporting documentation concerning the data, reasoning and analyses is retained in the appraiser’s file. The information contained in this report is specific to the needs of the client and for the intended use stated in this report. Please note that this Restricted Use Appraisal Report cannot be fully understood without the additional information maintained in our work file. The appraiser is not responsible for unauthorized use of this report. Please note that the obligation of VMG is solely a corporate obligation, and no officer, principal, director, employee, agent, shareholder, or controlling person shall be subjected to any personal liability whatsoever to any person or entity, nor will any such claim be asserted by or on behalf of any other party to this agreement or any person relying on the opinion.

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IDENTIFICATION OF PROPERTIES Parcel No. 2 – Professional Services Building – Citrus Springs Boulevard The subject property consists of approximately 3,200 square feet of gross building area located on a single land parcel totaling 276,976 square feet, or 6.358 acres. The real estate is located at 10332 North Citrus Springs Boulevard, Citrus Springs, Citrus County, Florida. The effective date of the valuation is February 6, 2013, the date of inspection. The property is legally defined in one tax account, ALT KEY 2093544, according to the Citrus County Property Appraiser. Parcel No. 4 – Professional Medical Building – S. Florida Avenue The subject property consists of approximately 3,280 square feet of gross building area located on a single land parcel totaling 98,543 square feet, or 2.262 acres. The real estate is located at 7646 South Florida Avenue, Floral City, Citrus County, Florida. The effective date of the valuation is February 6, 2013, the date of inspection.

CITRUS COUNTY HOSPITAL BOARD

RESTRICTED USE APPRAISAL REPORT

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The property is legally defined in one tax account, ALT KEY 1856388, according to the Citrus County Property Appraiser. Parcel Nos. 6 and 24 – Vacant Governmental – Pine Avenue and CMHF (Parking / Other Building) The subject property is a single land parcel totaling 52,813 square feet, or 1.212 acres. The real estate is located at 201 South Seminole Avenue, 204 South Pine Avenue and 206 South Pine Avenue, Inverness, Citrus County, Florida. The effective date of the valuation is February 6, 2013, the date of inspection. The property is legally defined in three tax accounts, ALT KEYs 2910551, 1758963 and 1758955, according to the Citrus County Property Appraiser. Parcel Nos. – 9, 10 and 23– CMHF Grace Street and CMHF Public Assistance Center and CMHF Offices The subject property consists of four buildings containing approximately 33,818 square feet of combined gross building area (2,040 square feet on Parcel No. 9, 1,002 square feet on Parcel No. 10 and 30,776 square feet on Parcel No. 23) located on three adjacent land parcels totaling 140,128 square feet, or 3.217 acres. Only one structure (12,701 square foot) provides contributory value to the property as a whole. The three parcels are combined as the tracts are contiguous. The real estate is located at 200 West Grace Street (Parcel No. 9), 208 West Grace Street (Parcel No. 10) and 123 South Seminole (Parcel No. 23) in Inverness, Citrus County, Florida.

DRAFT

The effective date of the valuation is February 6, 2013, the date of inspection. The property is legally defined in three tax accounts, ALT KEYs 1755921, 1755913 and 1755913, for Parcel Nos. 9, 10 and 23, respectively, according to the Citrus County Property Appraiser. Parcel Nos. 11, 17, 19 and 20 – CMHF Vacant Governmental The subject property consists of four contiguous land parcels containing approximately 91,535 square feet, or 2.101 acres. The real estate is located at the following addresses: Parcel No. 11 is at 112 South Seminole Avenue (ALT KEY 1755808); Parcel No. 17, 111 South Osceola Avenue (ALT KEY 2906863); Parcel No. 19, 302 West Grace Street (ALT KEY 2910542); and Parcel No. 20, 108 South Seminole Avenue (ALT KEY 2911484). The tracts are located in Inverness, Citrus County, Florida. The effective date of the valuation is February 6, 2013, the date of inspection.

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Parcel No. 12 – CMHF/RRA, LLC The subject property consists of approximately 2,874 square feet of gross building area located on a single land parcel totaling 39,578 square feet, or 0.909 acre. The real estate is located at 6254 West Corporate Oaks Drive, Citrus County, Florida. The effective date of the valuation is February 6, 2013, the date of inspection. The property is legally defined in one tax account, ALT KEY 2425407, according to the Citrus County Property Appraiser. Parcel No. 13 – CMHF – Citrus Primary Crystal River / Dr. Irvine The subject property consists of approximately 2,784 square feet of gross building area in two condominium units located on two land parcels totaling 2,784 square feet, or 0.064 acre, according to the Citrus County Property th Appraiser. The real estate is located at 700 Southeast 5 Terrace, Units 7 and 8, Crystal River, Citrus County, Florida. The effective date of the valuation is February 6, 2013, the date of inspection. The property is legally defined in two tax accounts, ALT KEYs 2619970 and 2619988, according to the Citrus County Property Appraiser.

DRAFT

Parcel No. 14 – CMHF – Citrus Primary Beverly Hills

The subject property consists of approximately 3,493 square feet of gross building area located on a single land parcel totaling 82,960 square feet, or 1.904 acres. The real estate is located at 450 West Roosevelt Boulevard, Beverly Hills, Citrus County, Florida. The effective date of the valuation is February 6, 2013, the date of inspection. The property is legally defined in one tax account, ALT KEY 2959312, according to the Citrus County Property Appraiser. Parcel No. 15 – CMHF Rehabilitation Center The subject property consists of approximately 7,066 square feet of gross building area located on a single land parcel totaling 38,392 square feet, or 0.881 acre. The real estate is located at 810 Medical Court East, Inverness, Citrus County, Florida. The effective date of the valuation is February 6, 2013, the date of inspection. The property is legally defined in one tax account, ALT KEY 2640251, according to the Citrus County Property Appraiser.

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Parcel No. 16 – CMHF Gulf Coast Aquatic and Rehabilitation Center The subject property consists of approximately 6,690 square feet of gross building area located on a single land parcel totaling 40,628 square feet, or 0.933 acre. The real estate is located at 6043 West Nordling Loop, Citrus County, Florida. The effective date of the valuation is February 6, 2013, the date of inspection. The property is legally defined in one tax account, ALT KEY 34500353, according to the Citrus County Property Appraiser. Parcel No. 21 – CMHF – Annex / Wound Care & Hyperbaric Center The subject property consists of approximately 77,654 square feet of gross building area located on a single land parcel totaling 170,077 square feet, or 3.904 acres. The real estate is located at 131 South Citrus Avenue, Inverness, Citrus County, Florida. The effective date of the valuation is February 6, 2013. The property is legally defined in one tax account, ALT KEY 2907908, according to the Citrus County Property Appraiser.

DRAFT

Parcel No. 22 – CMHF – (Parking / Other Building)

The subject property consists of approximately 1,584 square feet of gross building area located on a single land parcel totaling 20,692 square feet, or 0.475 acre. The small commercial building provides no contributory value to the land as a whole. The real estate is located at 108 South Seminole Avenue, Inverness, Citrus County, Florida. The effective date of the valuation is February 6, 2013. The property is legally defined in one tax account, ALT KEY 2910607, according to the Citrus County Property Appraiser. Parcel No. 25 – CMHF (Parking / Other Building) The subject property consists of approximately 933 square feet of gross building area located on a single land parcel totaling 81,250 square feet, or 1.865 acres. The structure provides no contributory value to the land as a whole. The real estate is located at 206 South Seminole Avenue, Inverness, Citrus County, Florida. The effective date of the valuation is February 6, 2013, the date of inspection. The property is legally defined in one tax account, ALT KEY 2907916, according to the Citrus County Property Appraiser.

CITRUS COUNTY HOSPITAL BOARD

RESTRICTED USE APPRAISAL REPORT

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PURPOSE OF THE APPRAISAL The purpose of the appraisal is to provide our opinion of the Fair Market Value and a reasonable range of the Fair Market Rent of the Fee Simple Estate for the properties fully identified in this Restricted Use Appraisal Report.

PROPERTY RIGHTS The Fair Market Value and Fair Market Rent are predicated on Fee Simple Estate, which is defined in The Dictionary of Real Estate Appraisal, Fifth Edition, Page 78: “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.”

CLIENT AND INTENDED USE OF THE APPRAISAL The intended user (client) of this Restricted Use Appraisal Report is Citrus County Hospital Board and their duly authorized third-party representatives. VMG Health is not responsible for the unauthorized use of this Restricted Use Appraisal Report. The intended use of this analysis is to assist Citrus County Hospital Board with an evaluation of the possible benefits to persons residing in Citrus County from the sale or lease of the Hospital Facilities to a not-for-profit or for-profit entity.

DRAFT

EFFECTIVE DATE OF VALUATION This report was prepared in February and March 2013. We conducted an on-site inspection of the subject properties on February 5, 2013 and February 6, 2013. The effective appraisal date of this assignment is February 6, 2013.

DEFINITIONS The following is a list of definitions applicable to this assignment. Fair Market Value – Fair Market Value is defined by the Internal Revenue Service as "the price that property would sell for on the open market. It is the price that would be agreed on between a willing buyer and a willing seller, with neither being required to act, and both having reasonable knowledge of the relevant facts." The term herein, is also used interchangeably in this analysis with the term Market Value. Market Value means “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:

CITRUS COUNTY HOSPITAL BOARD

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1.

Buyer and seller are typically motivated;

2.

Both parties are well informed or well advised, and acting in what they consider their own best interests;

3.

A reasonable time is allowed for exposure in the open market;

4.

Payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and

5.

The price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale.

Additionally, in accord with THE LAWS OF FLORIDA Ch. 2012-66, “Fair market value” means the price that a seller or lessor is willing to accept and a buyer or lessee is willing to pay on the open market and in an arms-length transaction, or what an independent expert in hospital valuation determines the fair market value to be. Furthermore, The Stark Law defines “fair market value” as “the value in arm’s length transactions, consistent with the general market value.” “General market value” means “the compensation that would be included in a service agreement as the result of bona fide bargaining between well-informed parties to an agreement who are not otherwise in a position to generate business for the other party at the time of the agreement.”

DRAFT

Fair Market Rent is synonymous with Market Rent. The definition of Market Rent is shown below. Fair Market Rent – The most probable rent that a property should bring in a competitive and open market reflecting all conditions and restrictions of the lease agreement including permitted uses, use restrictions, expense obligations, term, concessions, renewal and purchase options, and tenant improvements (TIs). 1 Implicit in this definition are the following conditions:    

1

Lessee and lessor are typically motivated. Both parties are well informed or well advised, and acting in what they consider their best interests. A reasonable time is allowed for exposure in the open market. The rent payment is made in terms of cash in United States dollars, and is expressed as an amount per time period consistent with the payment schedule of the lease contract.

The Dictionary of Real Estate Appraisal, 5th Edition (Chicago: Appraisal Institute, 2010).

CITRUS COUNTY HOSPITAL BOARD

RESTRICTED USE APPRAISAL REPORT



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The rental amount represents the normal consideration for the property leased unaffected by special fees or concessions granted by anyone associated with the transaction.

This assignment includes the following identified property. Real Property – The interests, benefits, and rights inherent in the ownership of real estate.2 Improvements – Buildings or other relatively permanent structures or developments located on, or attached to, land.3 Extraordinary Assumption – An assumption, directly related to a specific assignment, which, if found to be false, could alter the appraiser’s opinions or conclusion.4 Within this specific assignment, according to the Citrus County Property Appraiser, the building improvements contain a gross building area of 108,531 square feet. Should the actual combined or individual gross building areas differ from the assumed areas, the appraisers reserve the right to amend the contents of this Restricted Use Appraisal Report, including the conclusions. Hypothetical Condition – A condition, directly related to a specific assignment, which is contrary to what is known by the appraiser to exist on the effective date of the assignment results, but is used for the purpose of analysis. 5

DRAFT

The subject property is subject to the Lease Agreement between Citrus County Hospital Board and Citrus Memorial Health Foundation, Inc. According to the Fourth Amendment to Lease Agreement, the commencement date is March 1, 1990 and the expiration date is June 15, 2033, with an option to renew for an additional forty-five (45) year term. For purpose of this analysis, the lease is not regarded; the property rights appraised are those of the Fee Simple Estate.

SCOPE OF ENGAGEMENT The results of this investigation are presented in a Restricted Use Appraisal Report. The following scope was completed by Value Management Group, LLC d/b/a VMG Health (“VMG”) for this assignment: 1. Analyzed regional, city, neighborhood and market area.

2

The Dictionary of Real Estate Appraisal, Page 161, 5th Edition (Chicago: Appraisal Institute, 2010). The Dictionary of Real Estate Appraisal, Page 98,5th Edition (Chicago: Appraisal Institute, 2010). 4 “Uniform Standards of Professional Practice” (The Appraisal Foundation, 2010-2011 Edition). 5 “Uniform Standards of Professional Practice” (The Appraisal Foundation, 2012-2013 Edition). 3

CITRUS COUNTY HOSPITAL BOARD

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 Gather current and relevant data related to demographic, economic, governmental and environmental forces that have a direct or indirect influence on the subject properties.  Provide supporting comments and appropriate conclusions to describe the influence of these factors on the subject properties.  Market data was gathered from a variety of sources including local and regional realtors, brokers and online sources. 2. Completed a visual on-site observation of the subject properties and the market areas or neighborhoods relevant to the subject properties.  The visual on-site observation of the subject properties involved observing the exterior walls and fenestration, noting the quality and condition. Photographs were taken of the interior and exterior of the improvements.  The visual on-site observation of the properties included the type and condition of walkways, curbs, sidewalks, parking surfaces, security lighting and fencing, the quality and abundance of landscaping and the observed adequacy of water drainage and runoff, as pertinent. Photographs were taken of notable site improvements and street views of all adjacent roadways.  The visual on-site observation involved an inspection of each property.  The visual observation of the market areas or neighborhoods included driving the adjacent roadways and the major thoroughfares in the area, noting convenience to area shopping, retail, entertainment, employment and major arterial roadways. The adequacy and condition of area improvements (including condition and appeal, occupancy and competitive properties, and any adverse influences) was also observed. Observations were also made regarding the approximate mix of residential, multifamily, commercial and industrial property types within the subject neighborhoods and market areas.  Reviewed relevant supporting data. The inspecting appraiser’s visual on-site observations were supported by the review of the available building plans.  Reviewed data regarding taxes, utilities, easements and city services.  The availability or existence of all utilities, easements and city services was determined by on-site observation and data available

DRAFT

CITRUS COUNTY HOSPITAL BOARD

RESTRICTED USE APPRAISAL REPORT

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from Citrus County Hospital Board and its representatives as well as the City of Inverness, Florida. 3. Considered comparable improved building sales and rental information.  Comparable rents, sales and listings were analyzed by date of leases/sales, lease structure, similarity of space use/size, direct or indirect competition and proximity to the subject properties. Information was gleaned from appraiser’s internal proprietary files as well as available market information.  Photographs, as available, and write-ups are provided as applicable to the assignment for the comparable sales and leases. 4. Analyzed the data and applied the applicable approaches to value.  The value opinions presented in this Restricted Use Appraisal Report are based on review and analysis of the market conditions affecting real property value, including the attributes of competitive properties and rental data for similar properties.  The appraisal problem did not warrant an intensive Highest and Best Use analysis. Given the nature of the subject real property, VMG Health’s conclusions of Highest and Best Use are based on logic and observed evidence.  Three traditional approaches are typically used to arrive at an opinion of value of real property: the Sales Comparison Approach; the Cost Approach; and the Income Capitalization Approach. All three approaches to value were considered and those most appropriate are relied on to address the appraisal problem and to arrive at an opinion of the Fair Market Value and Fair Market Rent of the Fee Simple Estate in the subject properties as of the date of this appraisal.  The subject site and improvement descriptions are based on a personal inspection of the properties and a review of provided data.  The inspection is not a substitute for thorough engineering studies.

DRAFT

Specific attention is drawn to the Proposal, Definitions, General Assumptions and Limiting Conditions, and Significant Issues for further understanding of the scope of the appraisal.

CITRUS COUNTY HOSPITAL BOARD

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COMPETENCY STATEMENT Charles B. Nolen, MAI has valued numerous real estate projects throughout the United States over the past 25 years. In addition, the appraiser has analyzed and appraised numerous medical projects throughout the United States, including hospitals, surgery centers and medical office buildings. The appraiser holds the MAI designation with the Appraisal Institute. Mr. Nolen, MAI is a Certified General Real Estate Appraiser from the State of Florida (State License Number RZ3509). Accordingly, the appraiser has the professional competency required to appraise the subject property.

PROPERTIES HISTORIES The Appraisal Foundation's Uniform Standards of Professional Appraisal Practice Standard Rule 1-5 states: In developing a real property appraisal, when the value opinion to be developed is market value, an appraiser must, if such information is available to the appraiser in the normal course of business: (a)

analyze all agreements of sale, options, or listings of the subject property current as of the effective date of the appraisal; and

(b)

analyze all sales of the subject property that occurred within the three (3) years prior to the effective date of the appraisal.

DRAFT

According to public records, no transactions involving the subject properties have taken place in the past three years, with exception of the properties described as Parcel Nos. 15 (CMHF Rehabilitation Center located at 810 Medical Court East in Inverness) and 16 (DMHF- Gulf Coast Aquatic and Rehabilitation Center located at 6043 West Nordling Loop in Crystal River). These properties were purchased on May 15, 2012 together for a reported price of $1,800,000, or $130.85 per square foot of gross building area.

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SUMMARY OF SALIENT FACTS – PARCEL NO. 2

Date of Appraisal:

February 6, 2013

Property Name/Location:

Professional Services Building – Citrus Springs Boulevard 10332 North Citrus Springs Boulevard Citrus Springs, Citrus County, Florida

DRAFT

Client:

Citrus County Hospital Board

Land Size:

276,976 square feet or 6.358 acres

Improvement Size:

3,200 gross square feet

Owner of Record:

Citrus County Hospital Board

Subject Property Description: Use:

Medical Office Building

Fair Market Value:

$540,000 (Includes Excess Land)

Range of Fair Market Rent:

$8.00 to $10.00 per square foot of gross building area.

Implicit in this rental rate estimate is a NNN basis, with the tenant being responsible for all operating costs. The lease term would be three to five years, without concessions, on an “as is” basis. The rate also does not include annual CPI increase in the base rate.

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PROPERTY DESCRIPTION – PARCEL NO. 2 The subject property consists of an improved 6.358-acre (gross) land parcel that is located at 10332 North Citrus Springs Boulevard, Citrus Springs, Citrus County, Florida. Specifically, the subject site is located at the north corner of North Citrus Springs Boulevard and North Florida Avenue. There is an estimated approximately 377 feet of frontage along the northwest side of North Citrus Springs Boulevard and approximately 700 feet along the northeast side of North Florida Avenue. The site contains approximately 276,976 square feet, or 6.358 acres, according to the Citrus County Property Appraiser and is irregular in shape. There is a single curb cut into the tract along the northwest side of North Citrus Springs Boulevard. The site is generally level and at street grade. According to Flood Insurance Rate Map number 1200630065B, dated August 15, 1984, the subject property is not within a designated flood zone. The subject site is zoned PDR (Planned Residential Development District). According to a representative of Citrus County, a development plan was submitted for the site that included the five buildings (with a total of 16 spaces for lease), with parking, drainage and an outparcel.

DRAFT

According to the Citrus County Property Appraiser, the assessment for 2012 is as follows. The property is tax exempt. Alt Key 2093544

Market/Just $673,477

Assessed $673,477

Taxable $0

The subject property is improved with a one-story medical office building, associated site improvements and surface parking. The improvements are equally divided as a two-tenant medical office building. Half of the building is occupied by Citrus Primary Care; the other space is not occupied. According to the Citrus County Property Appraiser, the improvements comprise a gross building area of 3,200 square feet. In addition, there is approximately 576 square feet of roof-covered porch area at the primary entrance. The building is constructed with concrete block and stucco veneer with glass windows along the exterior. The roof is pitched with composite shingles. The interior finish-out includes: commercial-grade carpeting or 1’ by 1’ floor tiles; painted drywall partitioning; 2’ by 4’ ceiling tiles; and recessed fluorescent lighting. Exam rooms include sinks. The improvements are not sprinklered. In the occupied area, there are exam rooms, a receptionist area, a filing area, a waiting room and storage. Land improvements consist of landscaping and asphalt surface parking. The improvements were built in 1991 and have a chronological age of 22 years. Given the maintenance of the property, the effective age is estimated to be 22 years.

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The subject’s physical adaptability conforms to that of its competitors. Overall, the subject premises are considered to be of average quality construction. The subject improvements are in average condition, which is consistent with the chronological age of the structure and the level of maintenance. The project amenities are consistent with medical office uses in the local market. The design and layout appear to be conducive to current operations. Given the size and configuration of the subject land area, the property has excess land. Using a land to building ratio of 8 to 1, the estimated site for the subject building is 25,600 square feet. The remaining excess land is 251,376 square feet.

HIGHEST AND BEST USE ANALYSIS DEFINITION Highest and Best Use may be defined as, “the reasonably probable and legal use of vacant land or an improved property that is physically possible, appropriately supported, and financially feasible, and that results in the highest value.”6 Because the use of land can be limited by the presence of improvements, Highest and Best Use is determined separately for the site as though vacant and available to be put to its Highest and Best Use, and for the property as improved.

DRAFT

Highest and Best Use must meet four criteria. It must be:    

Physically possible; Legally permissible; Financially feasible; and Maximally productive.

PROCEDURE The Highest and Best Use analysis is performed in two parts:  

The Highest and Best Use of the land as though vacant; and The Highest and Best Use of the land as though improved

In the analysis of Highest and Best Use of the land as though vacant, it is assumed that the land is vacant or can be made vacant by removal of existing improvements. The Highest and Best Use of the land as though vacant addresses the questions of what uses should be made of the land; and when and what type of improvement, if any, should be built on the site. The analysis of Highest and Best Use of the land as improved considers the alternative uses of an improved property. 6

The Dictionary of Real Estate Appraisal, Page 93, 5th Edition (Chicago; Appraisal Institute, 2010)

CITRUS COUNTY HOSPITAL BOARD

RESTRICTED USE APPRAISAL REPORT

Page 18

Both parts of the Highest and Best Use are important to the appraisal process in several ways. For instance, the Highest and Best Use analysis helps to establish what types of properties are considered comparable, and often, the Highest and Best Use can reveal problems of functional or external obsolescence. It is VMG Health’s opinion that the Highest and Best Use of the subject site, as if vacant, would be for future commercial development as permitted by zoning as demand warrants. In the case of the subject property, the existing improvements are functional and constitute a substantial improvement to the subject site. The cost of demolishing the existing improvements would far exceed any increase in revenue that could be generated from an alternative use at this time. The existing improvements suffer from no apparent form or physical, functional or external obsolescence. In all respects, the improvements are assumed functional and conform well to the neighborhood.

CONCLUSION The subject site is improved with a structure that comprises a gross building area of 3,200 square feet. The building is used as a medical office building.

DRAFT

The improvements contribute significantly to the value of the subject site and provide for both a return to the land and improvements. Therefore, it is our opinion that the Highest and Best Use as Improved of the subject property is for the continued use as a medical office building and ultimate disposal of the excess land.

VALUATION In earlier sections of this Restricted Use Appraisal Report, the valuation problem and property characteristics were defined. Information regarding the interaction of four basic forces that motivate human activity (environmental conditions, governmental controls and regulations, social forces and economic conditions) and how they affect the overall commercial market as well as the subject property were analyzed. Additionally, the Highest and Best Use of the subject property was established. In the following section of this Restricted Use Appraisal Report, general and specific data gathered will be analyzed to determine the Fair Market Value of the Fee Simple Estate by the appropriate appraisal premises.

CITRUS COUNTY HOSPITAL BOARD

RESTRICTED USE APPRAISAL REPORT

Page 19

The estimate of Fair Market Value of a property usually calls for employment of the three basic approaches to value. These approaches to value are identified as follows: THE COST APPROACH THE SALES COMPARISON APPROACH THE INCOME APPROACH The Cost Approach is based upon the proposition that the informed purchaser would pay no more than the cost of producing a substitute property with the same utility as the subject property. The Cost Approach is particularly applicable when the property being appraised involves relatively new improvements which represent the Highest and Best Use of the land or when relatively unique or specialized improvements are located on the site and for which there exists no comparable properties in the marketplace. The Sales Comparison Approach is based upon the proposition that an informed purchaser would pay no more for a property than the cost of acquiring an existing property with the same utility. This approach is applicable when an active market provides sufficient quantities of reliable data which can be verified from authoritative sources. The Sales Comparison Approach is relatively unreliable in an inactive market or in estimating the value of properties for which no real comparable sales data is available.

DRAFT

The Income Approach is a procedure in appraisal analysis which converts the anticipated benefits (dollar income or amenities) to be derived from the ownership of property into a value estimate. The Income Approach is widely applied in appraising income producing properties. In this approach, an estimate of potential income for the subject property is first projected. From this amount, deductions are made for typicallyincurred costs involved with ownership of the property, resulting in a net operating income estimate. An appropriate capitalization rate is then applied to the net operating income to derive at an indication of value. Income producing real estate is a capital good which is typically bought and sold primarily on the basis of the net income produced from the property. In all economic and investment analyses, of which real estate appraisal is an integral part, the value of a capital good is established and measured by calculating, as of a particular date, the present value of the anticipated future benefits (all sources of net revenue) to the owner over a specified period. The appraiser analyzed all market data and considered all three traditional approaches to value.

CITRUS COUNTY HOSPITAL BOARD

RESTRICTED USE APPRAISAL REPORT

Page 20

VALUE RECONCILIATION – Parcel No. 2 VMG Health reconciled the indicators analyzed to determine an estimate of the Fair Market Value for the subject property. Based upon the analysis of data obtained, we have formed the opinion that the Fair Market Value of the Fee Simple Estate in the subject property, i.e, the 3,200 square foot building on an estimated site of 25,600 square feet, subject to the definitions, certifications, and limiting conditions set forth in the attached Restricted Use Appraisal Report, as of February 6, 2013, is:

TWO HUNDRED NINETY THOUSAND DOLLARS $290,000 Furthermore, based upon the analysis of data obtained, we have formed the opinion that the Fair Market Value of the Fee Simple Estate in the excess land of the subject property, i.e., 251,376 square feet, subject to the definitions, certifications, and limiting conditions set forth in the attached Restricted Use Appraisal Report, as of February 6, 2013, is:

DRAFT

TWO HUNDRED FIFTY THOUSAND DOLLARS $250,000

The estimated marketing period associated with these value estimates is twelve months, while the estimated exposure period is also twelve months. The range of the Fair Market Rent for the building and improved primary site (25,600 square feet) is $8.00 to $10.00 per square foot of gross building area. This rate assumes a NNN basis, without concessions, on an “as is” basis. The lease term is three to five years. The annual rental rate does not include an annual CPI increase. Our report and analysis are subject to the attached statement of Assumptions and Limiting Conditions. Pertinent valuation details are located on the following pages. Additional market intelligence is maintained in our files.

CITRUS COUNTY HOSPITAL BOARD

RESTRICTED USE APPRAISAL REPORT

Page 21

Parcel No. 2 ‐Professional Services Building – Citrus Springs Boulevard Building Cost Development PRELIMINARY DRAFT ‐ SUBJECT TO CHANGE Citrus Springs, Citrus County, Florida As of February 6, 2013

Building Number & Name

1 ‐ Citrus Memorial Healthcare Cente

Occupancy Number & Name Section Number & Page Construction Class & Quality Gross Building Area (Square Feet) Gross Perimeter (Linear Feet) Number of Floors & Height per Story (Feet)

341 15

Average

1

3,200 228 12

                    3,200

  $123.80

Base Cost ‐ Square Foot Refinements ‐ Square Foot Heating, cooling, ventilating Elevator Sprinkler System Miscellaneous

Replacement Cost New (RCN) Adjusted Cost ‐ Square Foot Extended Base Cost Miscellaneous  Site Improvements Subtotal Soft Costs & Entreprenurial Profit

TOTAL

Medical Office  Building 22

C

 

Refinements ‐ Multipliers Number of Stories Height per Story Floor Area & Perimeter Current Cost Multiplier Local Cost Multiplier Net Multiplier

2 ‐  Miscellaneous and  Land Improvements

$0.00 ‐$2.10 $0.00 $0.00 $121.70 1.000 1.000 1.032 1.070 1.000 1.104

DRAFT 5.0%

RCN RCN Rounded RCN per Square Foot

134.36 $429,952                          ‐                          ‐ $429,952 $21,498

  $                35,592                 100,173 $135,765 5.0%                     6,788

$429,952                   35,592                 100,173 $565,717                   28,287

$             142,553 $140,000

$594,003 $590,000 $184.38

$451,450 $450,000 $140.63

Depreciation Year Built Physical Age Effective Age Economic Life (Section 97, Page 13) Remaining Useful Life Physical Depreciation (Age/Life)

55.0%

1991 22 22 40 18 $247,500

$75,554

                323,054

0.0%

$202,500 $0

$64,446 $0

$266,946                          ‐

0.0%

$202,500 $0

$64,446 $0

$266,946                          ‐

less Economic Obsolescence

$202,500

$64,446

$266,946

Depreciated Cost per Square Foot

$200,000 $62.50

$60,000

$260,000 $81.25

RCN less Physical Depreciation Functional Obsolescence less Functional Obsolescence Economic Obsolescence

CITRUS COUNTY HOSPITAL BOARD

 

Depreciation %  Depreciation

Canopies  

Description

PRELIMINARY DRAFT ‐ SUBJECT TO CHANGE

   

576 sf

Replacement Cost New

Quantity

Unit

55.0% $              20,554

$        37,372

Current Cost Local Total  Source Multiplier Multiplier Cost $57.75 1.07 1.00 $              35,592 MVS ‐ Section 15 Page 37 35,592 5% 1,780

Unit Cost

Miscellaneous Items Pricing Support

Parcel No. 2 ‐Professional Services Building – Citrus Springs Boulevard

RESTRICTED USE APPRAISAL REPORT

DRAFT

CITRUS COUNTY HOSPITAL BOARD

Page 22

Paving Paving Landscaping

Type

Description

CITRUS COUNTY HOSPITAL BOARD

CRN Rounded

Total Replacement Cost New (CRN)

Good quality asphalt parking lot(est) Good quality concrete parking lot(est) Landscaping

PRELIMINARY DRAFT ‐ SUBJECT TO CHANGE

Citrus Springs, Florida As of February 6, 2013

66 66 66

MVS  Section

3 3 3

Page

11,880 780 16,000

Quantity

SF SF SF

Unit

1.04 1.04 1.04

Current

1.00 1.00 1.00

Local

Multipliers

DRAFT Depreciated Cost

Effective Age Economic Life (Section 97, Page 19) Remaining Useful Life Physical Depreciation (Age/Life) RCN less Physical Depreciation Functional Obsolescence less Functional Obsolescence Economic Obsolescence less Economic Obsolescence

$3.50 $4.50 $3.20

Unit Base  Cost

Land Improvements Cost Development

Parcel No. 2 ‐Professional Services Building – Citrus Springs Boulevard

0.0%

0.0%

4 8 4 50.0%

Replacement  Cost New

$60,000

$55,000 $55,000 $0 $55,000 $0 $55,000

$105,182 $110,000

$100,173 5%                   5,009

$3.64 $43,243 $4.68 $3,650 $3.33                 53,280

Unit Replacement  Cost, New

RESTRICTED USE APPRAISAL REPORT Page 23

RESTRICTED USE APPRAISAL REPORT

Page 24

Parcel No. 2 -Professional Services Building – Citrus Springs Boulevard 10332 North Citrus Springs Boulevard Citrus Springs, Citrus County, Florida  

COST APPROACH CONCLUSION

 

$590,000

TOTAL REPLACEMENT COST NEW Less Accrued Depreciation: Physical Curable

$0

Physical Incurable

323,054

Total Physical

$323,054

Functional Curable Obsolescence

$0

Functional Incurable Obsolescence

0

Total Functional Obsolescence External Obsolescence

DRAFT

TOTAL ACCRUED DEPRECIATION

0 0 $323,054

ROUNDED RCNLD

$270,000

PLUS LAND VALUE

$25,000

VALUE - FEE SIMPLE ESTATE

$295,000

ADD EXCESS LAND

250,000

VALUE INDICATED BY THE COST APPROACH

$545,000

ROUNDED

$550,000

CITRUS COUNTY HOSPITAL BOARD

RESTRICTED USE APPRAISAL REPORT

Page 25

Parcel No. 2 -Professional Services Building – Citrus Springs Boulevard Direct Capitalization Gross Building Area Market Rent

3,200 $

Potential Gross Income Less Vacancy Effective Gross Income Less Management Total Operating Expenses Less Structural Reserves Net Operating Income Indicated Cap. Rate

9.00

$ 5% 3%

28,800 1,440

$

$

27,360

$

821 1,600

$

24,939

821

$ 0.50

9.00%

Indicated Value Less PV of Capital Expenditures Final Indicated Value Rounded PSF

DRAFT

CITRUS COUNTY HOSPITAL BOARD

$

$ $

277,102 -

277,102 280,000 87.50

RESTRICTED USE APPRAISAL REPORT

Page 26

SUMMARY OF SALIENT FACTS – PARCEL NO. 4

Date of Appraisal:

February 6, 2013

Property Name/Location:

Professional Medical Building – South Florida Avenue 7646 South Florida Avenue Floral City, Citrus County, Florida

DRAFT

Client:

Citrus County Hospital Board

Land Size:

98,543 square feet or 2.262 acres

Improvement Size:

3,280 gross square feet

Owner of Record:

Citrus County Hospital Board

Subject Property Description: Use:

Medical Office Building

Fair Market Value:

$350,000

Range of Fair Market Rent:

$9.00 to $11.00 per square foot of gross building area

Implicit in this rental rate estimate is on a NNN basis, with the tenant being responsible for all operating costs. The lease term would be three to five years, without concessions, on an “as is” basis. The rate does not include an annual CPI increase in the base rate.

CITRUS COUNTY HOSPITAL BOARD

RESTRICTED USE APPRAISAL REPORT

Page 27

PROPERTY DESCRIPTION – PARCEL NO. 4 The subject property consists of an improved 2.262-acre (gross) land parcel that is located at 7646 South Florida Avenue, Floral City, Citrus County, Florida. Specifically, the subject site is located along the west side of South Florida Avenue, approximately 407 feet north of East Orange Avenue. There is an estimated approximately 312 feet of frontage along the west side of South Florida Avenue. The site contains approximately 98,543 square feet, or 2.262 acres, according to the Citrus County Property Appraiser and is irregular in shape. There is a single curb cut into the tract along the west side of South Florida Avenue. The site is generally level and at street grade. According to Flood Insurance Rate Map number 1200630270B, dated August 15, 1984, the subject property is not within a designated flood zone. The subject site is zoned GNC (General Commercial District). . According to the Citrus County Property Appraiser, the assessment for 2012 is as follows: Alt Key 1856388

Market/Just $508,200

Assessed $508,200

Taxable $0

DRAFT

The subject property is improved with a one-story medical office building, associated site improvements and surface parking. The improvements are equally divided as a two-tenant medical office building. The building is fully occupied by Citrus Primary Care. According to the Citrus County Property Appraiser, the improvements comprise a gross building area of 3,280 square feet. In addition, there is approximately 626 square feet of roof-covered porch area at the primary entrance. The building is constructed with concrete block and stucco veneer with glass windows along the exterior. The roof is pitched with composite shingles. The interior finish-out includes: commercial-grade carpeting or 1’ by 1’ floor tiles; painted drywall partitioning; 2’ by 4’ ceiling tiles; and recessed fluorescent lighting. Exam rooms include sinks. The improvements are not sprinklered. In the occupied area, there are exam rooms, a receptionist area, a filing area, a waiting room and storage. Land improvements consist of landscaping and asphalt surface parking. The improvements were built in 1997 and have a chronological age of 16 years. Given the maintenance of the property, the effective age is estimated to be 16 years. The subject’s physical adaptability conforms to that of its competitors. Overall, the subject premises are considered to be of average quality construction. The subject improvements are in average condition, which is consistent with the chronological age of the structure and the level of maintenance. The project amenities

CITRUS COUNTY HOSPITAL BOARD

RESTRICTED USE APPRAISAL REPORT

Page 28

are consistent with medical office uses in the local market. The design and layout appear to be conducive to current operations.

HIGHEST AND BEST USE ANALYSIS As previously discussed, in the analysis of Highest and Best Use of the land as though vacant, it is assumed that the land is vacant or can be made vacant by removal of existing improvements. The analysis of Highest and Best Use of the land as improved considers the alternative uses of an improved property. It is VMG Health’s opinion that the Highest and Best Use of the subject site, as if vacant, would be for future commercial development as permitted by zoning as demand warrants. In the case of the subject property, the existing improvements are functional and constitute a substantial improvement to the subject site. The cost of demolishing the existing improvements would far exceed any increase in revenue that could be generated from an alternative use at this time. The existing improvements suffer from no apparent form or physical, functional or external obsolescence. In all respects, the improvements are assumed functional and conform well to the neighborhood.

CONCLUSION

DRAFT

The subject site is improved with a structure that comprises a gross building area of 3,280 square feet. The building is used as a medical office building. The improvements contribute significantly to the value of the subject site and provide for both a return to the land and improvements. Therefore, it is our opinion that the Highest and Best Use as Improved of the subject property is for the continued use as a medical office building.

VALUATION In earlier sections of this Summary Appraisal Report, the three basic approaches were discussed: the Cost Approach; the Sales Comparison Approach; and the Income Approach. The appraiser analyzed all market data and considered all three traditional approaches to value.

CITRUS COUNTY HOSPITAL BOARD

RESTRICTED USE APPRAISAL REPORT

Page 29

VALUE RECONCILIATION VMG Health reconciled the indicators analyzed to determine an estimate of the Fair Market Value for the subject property. Based upon the analysis of data obtained, we have formed the opinion that the Fair Market Value of the Fee Simple Estate in the subject property, subject to the definitions, certifications, and limiting conditions set forth in the attached Restricted Use Appraisal Report, as of February 6, 2013, is: THREE HUNDRED FIFTY THOUSAND DOLLARS $350,000 The estimated marketing period associated with this value estimate is twelve months, while the estimated exposure period is also twelve months. The range of the Fair Market Rent is $9.00 to $11.00 per square foot of gross building area, on a NNN basis, without concessions, on an “as is” basis. The lease term is three to five years. The annual rental rate does not include an annual CPI increase. Our report and analysis are subject to the attached statement of Assumptions and Limiting Conditions. Pertinent valuation details are located on the following pages. Additional market intelligence is maintained in our files.

DRAFT

CITRUS COUNTY HOSPITAL BOARD

RESTRICTED USE APPRAISAL REPORT

Page 30

Parcel No. 4 ‐ Professional Services Building – South Florida Avenue Building Cost Development PRELIMINARY DRAFT ‐ SUBJECT TO CHANGE Floral City, Citrus County, Florida As of February 6, 2013

Building Number & Name

1 ‐ Citrus Memorial Healthcare Cente

Occupancy Number & Name Section Number & Page Construction Class & Quality Gross Building Area (Square Feet) Gross Perimeter (Linear Feet) Number of Floors & Height per Story (Feet)

341 15

Average

1

3,280 258 12

                    3,280

  $123.80

Base Cost ‐ Square Foot Refinements ‐ Square Foot Heating, cooling, ventilating Elevator Sprinkler System Miscellaneous

Replacement Cost New (RCN) Adjusted Cost ‐ Square Foot Extended Base Cost Miscellaneous  Site Improvements Subtotal Soft Costs & Entreprenurial Profit

TOTAL

Medical Office  Building 22

C

 

Refinements ‐ Multipliers Number of Stories Height per Story Floor Area & Perimeter Current Cost Multiplier Local Cost Multiplier Net Multiplier

2 ‐  Miscellaneous and  Land Improvements

$0.00 ‐$2.10 $0.00 $0.00 $121.70

DRAFT 1.000 1.000 1.018 1.070 1.000 1.089

5.0%

RCN RCN Rounded RCN per Square Foot

132.53 $434,698                          ‐                          ‐ $434,698 $21,735

  $                38,682                   82,526 $121,208 5.0%                     6,060

$434,698                   38,682                   82,526 $555,906                   27,796

$             127,268 $130,000

$583,701 $590,000 $179.88

$456,433 $460,000 $140.24

Depreciation Year Built Physical Age Effective Age Economic Life (Section 97, Page 13) Remaining Useful Life Physical Depreciation (Age/Life)

40.0%

1997 16 16 40 24 $184,000

$61,246

                245,246

0.0%

$276,000 $0

$68,754 $0

$344,754                         ‐

0.0%

$276,000 $0

$68,754 $0

$344,754                         ‐

less Economic Obsolescence

$276,000

$68,754

$344,754

Depreciated Cost per Square Foot

$280,000 $85.37

$70,000

$350,000 $106.71

RCN less Physical Depreciation Functional Obsolescence less Functional Obsolescence Economic Obsolescence

CITRUS COUNTY HOSPITAL BOARD

 

Depreciation %  Depreciation

Canopies  

Description

PRELIMINARY DRAFT ‐ SUBJECT TO CHANGE

   

626 sf

Replacement Cost New

Quantity

Unit

40.0% $              16,246

$        40,616

Current Cost Local Total  Source Multiplier Multiplier Cost $57.75 1.07 1.00 $              38,682 MVS ‐ Section 15 Page 37 38,682 5% 1,934

Unit Cost

Miscellaneous Items Pricing Support

Parcel No. 4 ‐ Professional Services Building – South Florida Avenue

RESTRICTED USE APPRAISAL REPORT

DRAFT

CITRUS COUNTY HOSPITAL BOARD

Page 31

Paving Paving Landscaping

Type

Description

CITRUS COUNTY HOSPITAL BOARD CRN Rounded

Total Replacement Cost New (CRN)

Good quality asphalt parking lot(est) Good quality concrete parking lot(est) Landscaping

PRELIMINARY DRAFT ‐ SUBJECT TO CHANGE

Floral City, Florida As of February 6, 2013

66 66 66

MVS  Section

3 3 3

Page

20,800 720 11,310

Quantity

SF SF SF

Unit

1.04 1.04 1.04

Current

1.00 1.00 1.00

Local

Multipliers

DRAFT Depreciated Cost

Effective Age Economic Life (Section 97, Page 19) Remaining Useful Life Physical Depreciation (Age/Life) RCN less Physical Depreciation Functional Obsolescence less Functional Obsolescence Economic Obsolescence less Economic Obsolescence

$3.50 $4.50 $0.20

Unit Base  Cost

Land Improvements Cost Development

Parcel No. 4 ‐ Professional Services Building – South Florida Avenue

0.0%

0.0%

4 8 4 50.0%

Replacement  Cost New

$50,000

$45,000 $45,000 $0 $45,000 $0 $45,000

$85,530 $90,000

$81,457 5%                   4,073

$3.64 $75,712 $4.68 $3,370 $0.21                   2,375

Unit Replacement  Cost, New

RESTRICTED USE APPRAISAL REPORT Page 32

RESTRICTED USE APPRAISAL REPORT

Page 33

Parcel No. 4 - Professional Services Building – South Florida Avenue 7646 South Florida Avenue Floral City, Citrus County, Florida  

COST APPROACH CONCLUSION

 

$590,000

TOTAL REPLACEMENT COST NEW Less Accrued Depreciation: Physical Curable

$0

Physical Incurable

245,246

Total Physical

$245,246

Functional Curable Obsolescence

$0

Functional Incurable Obsolescence

0

Total Functional Obsolescence External Obsolescence

DRAFT

TOTAL ACCRUED DEPRECIATION

0 0 $245,246

ROUNDED RCNLD

$340,000

PLUS LAND VALUE

$50,000

VALUE - FEE SIMPLE ESTATE

$390,000

ROUNDED

$390,000

CITRUS COUNTY HOSPITAL BOARD

RESTRICTED USE APPRAISAL REPORT

Page 34

Parcel No. 4 - Professional Services Building – South Florida Avenue

Direct Capitalization Gross Building Area Market Rent

3,280 $

Potential Gross Income Less Vacancy Effective Gross Income Less Management Total Operating Expenses Less Structural Reserves Net Operating Income Indicated Cap. Rate

10.00

$ 5% 3%

32,800 1,640

$

$

31,160

$

935 1,640

$

28,585

935

$ 0.50

9.00%

Indicated Value Less PV of Capital Expenditures Final Indicated Value Rounded PSF

DRAFT

CITRUS COUNTY HOSPITAL BOARD

$

$ $

317,613 -

317,613 320,000 97.56

RESTRICTED USE APPRAISAL REPORT

Page 35

SUMMARY OF SALIENT FACTS – PARCEL NOS. 6 AND 24

Date of Appraisal:

February 6, 2013

Property Name/Location:

CMHF (Parking / Other Building) 201 South Seminole Avenue, 204 South Pine Avenue and 206 South Pine Avenue Inverness, Citrus County, Florida

DRAFT Client:

Citrus County Hospital Board

Land Size:

52,813 square feet or 1.212 acres

Improvement Size:

1,460 gross square feet (no contributory value)

Owner of Record:

Citrus Memorial Health Foundation, Inc.

Subject Property Description: Use:

Future commercial development

Fair Market Value:

$260,000

CITRUS COUNTY HOSPITAL BOARD

RESTRICTED USE APPRAISAL REPORT

Page 36

PROPERTY DESCRIPTION – PARCEL NOS. 6 AND 24 The subject property consists of an improved 1.212 acre (gross) land parcel that is located at 201 South Seminole Avenue, 204 South Pine Avenue and 206 South Pine Avenue, Inverness, Citrus County, Florida. Specifically, the subject site is the northern portion of the city block bounded by West Grace Street on the north, South Pine Avenue on the east, South Seminole Avenue on the west and West Highland Boulevard on the south. There is an estimated approximately 325 feet of frontage along the south side of West Grace Street, approximately 175 feet along the west side of South Pine Avenue and approximately 100 feet along the east side of South Seminole Avenue. The site contains approximately 52,813 square feet, or 1.212 acres, according to the Citrus County Property Appraiser and is irregular in shape. There are two curb cuts into the tract along the south side of West Grace Street and two along the west side of South Pine Avenue. The site is generally level and at street grade. According to Flood Insurance Rate Map number 1203480002B, dated May 17, 1982, the subject property is not within a designated flood zone. The subject site is zoned RO / RP (Residential Professional). According to the Citrus County Property Appraiser, the assessment for 2012 is as follows. The property is tax exempt. Alt Key 1758963 1758955 2910551

DRAFT

Market/Just $38,157 38,157 215,092 $291,406

Assessed $38,157 38,157 215,092 $291,406

Taxable $0 0 0 $0

The subject property is improved with two one-story residential structures and surface parking. The improvements contribute minimal value to the site, other than as an interim use for residential occupancy for the short term.

HIGHEST AND BEST USE ANALYSIS As previously discussed, in the analysis of Highest and Best Use of the land as though vacant, it is assumed that the land is vacant or can be made vacant by removal of existing improvements. The analysis of Highest and Best Use of the land as improved considers the alternative uses of an improved property.

CITRUS COUNTY HOSPITAL BOARD

RESTRICTED USE APPRAISAL REPORT

Page 37

CONCLUSION It is VMG Health’s opinion that the Highest and Best Use of the subject site, as if vacant, would be for future commercial development as permitted by zoning as demand warrants.

VALUATION In earlier sections of this Summary Appraisal Report, the three basic approaches were discussed: the Cost Approach; the Sales Comparison Approach; and the Income Approach. The appraiser analyzed all market data and considered all three traditional approaches to value. However, as the Fair Market Value of this property is essentially land value, only the Sales Comparison Approach to value was applied. VALUE RECONCILIATION VMG Health reconciled the indicators analyzed to determine an estimate of the Fair Market Value for the subject property. Based upon the analysis of data obtained, we have formed the opinion that the Fair Market Value of the Fee Simple Estate in the subject property, subject to the definitions, certifications, and limiting conditions set forth in the attached Restricted Use Appraisal Report, as of February 6, 2013, is:

DRAFT

TWO HUNDRED SIXTY THOUSAND DOLLARS $260,000 The estimated marketing period associated with this value estimate is twelve months, while the estimated exposure period is also twelve months. Our report and analysis are subject to the attached statement of Assumptions and Limiting Conditions. PARCEL ALLOCATION Parcel No. 6 24

Land Area (SF) 16,250 36,563

CITRUS COUNTY HOSPITAL BOARD

Distribution 31% 69%

Allocation $80,000 180,000 $260,000

RESTRICTED USE APPRAISAL REPORT

Page 38

SUMMARY OF SALIENT FACTS – PARCEL NOS. 9, 10 AND 23

Date of Appraisal:

February 6, 2013

Property Name/Location:

CMHF Grace Street and CMHF Public Assistance Center 123 South Seminole, 200 West Grace Street and 208 West Grace Street Inverness, Citrus County, Florida

DRAFT Land Size:

140,128 square feet or 3.217 acres

Improvement Size:

12,701 gross square feet (excludes church facility and office buildings)

Owner of Record:

Citrus Memorial Health Foundation, Inc.

Subject Property Description: Use:

Medical Office Building

Fair Market Value:

$1,300,000 (Parcel No. 23); $70,000 (Parcel No. 9); $30,000 (Parcel No. 10)

Range of Fair Market Rent:

$7.00 to $9.00 per square foot of gross building area (Parcel No. 23)

Implicit in this rental rate estimate is a NNN basis, with the tenant being responsible for all operating costs. The lease term would be three to five years, without concessions, on an “as is” basis. The rate also does not include annual CPI increase in the base rate. CITRUS COUNTY HOSPITAL BOARD

RESTRICTED USE APPRAISAL REPORT

Page 39

PROPERTY DESCRIPTION – PARCEL NOS. 9, 10 AND 23 The subject property consists of three adjacent land parcels and related improvements. Parcel No. 9 contains two buildings; Parcel No. 10 contains one building; Parcel No. 23 contains two buildings. Parcel No. 9 10 23 Total

Land Area (SF) 14,950 5,420 119,758 140,128

Building Area (SF) 2,040 (no contributory value) 1,002 (no contributory value) 30,776 (see discussion) 33,818

Because the parcels are contiguous, the three are considered as one tract containing 3.217 acres (gross). Parcel Nos. 9 and 10 are located at 200 West Grace Street and 208 West Grace Street. Parcel No. 23 is located at 123 South Seminole Avenue. The three parcels are located in Inverness, Citrus County, Florida. Specifically, the site containing the three parcels consists of the city block bounded by West Main Street on the north, South Pine Avenue on the east, West Grace Street on the south and South Seminole Avenue on the west, excluding the 0.487-acre southeast corner of West Main Street and South Seminole Avenue. There are an estimated 190 feet of frontage along the southwest side of West Main Street, 420 feet along the west side of South Pine Avenue, 325 feet along the north side of West Grace Street and 400 feet along the east side of South Seminole Avenue. The site contains approximately 140,128 square feet, or 3.217 acres, according to the Citrus County Property Appraiser and is irregular in shape. There are two curb cuts into the tract along the south side of West Main Street, three curb cuts from South Pine Avenue, two curb cut from West Grace Street and two along the east side of South Seminole Avenue. The site is slopes gently from west to east and is at street grade. According to Flood Insurance Rate Map number 1203480002B, dated May 17, 1982 the subject property is not within a designated flood zone. The subject site is zoned CBD (Central Business District).

DRAFT

According to the Citrus County Property Appraiser, the assessment for 2012 is as follows: Parcel No. 9 10 23 Total

Alt Key 1755921 1755913 2910569

CITRUS COUNTY HOSPITAL BOARD

Market/Just $132,484 69,280 2,356,889 $2,558,653

Assessed $132,484 69,280 2,356,889 $2,558,653

Taxable $0 0 0 $0

RESTRICTED USE APPRAISAL REPORT

Page 40

Parcel No. 23 is improved with a one-story office building and a former church facility (currently used as offices and storage). Parcel Nos. 9 and 10 are improved with three one-story former residential structures which are being used as office buildings and associated site improvements. On Parcel No. 23, it is noted the existing former-church building facility suffers from advanced depreciation and is currently used for storage and interim office purposes. On Parcel Nos. 9 and 10, the former residential buildings also suffer from advanced depreciation. On this basis, the former church facility on Parcel No. 23 and the residential structures on Parcel Nos. 9 and 10 are considered to be interim uses and do not add contributory value to the property as a whole. According to the Citrus County Property Appraiser, the one-story office building located on Parcel No. 23 contains a gross building area of 12,701 square feet. The 12,701square-foot office building is constructed with concrete block and stucco and brick veneer with glass windows along the exterior. The office building is sprinklered. The roof of the office is a combination of pitched roof with composite shingles and flat membrane-covered roof. The interior finish-out of the office includes: commercial-grade carpeting or 1’ by 1’ floor tiles; painted drywall partitioning; 2’ by 4’ ceiling tiles; and recessed fluorescent lighting. There are meeting, training and conference rooms as well as individual offices. The remaining buildings are constructed with concrete block and stucco veneer with pitched roofs, and, as previously described, are in poor condition. Land improvements consist of landscaping and asphalt surface parking. The building was constructed in 1968; the estimated chronological age for the property is 45 years.

DRAFT

For Parcel No. 23, given the size and configuration of the subject land area and the consideration of the former-church building facility is an interim use and does not add contributory value to the property as a whole, a portion of Parcel No. 23 is considered excess land. For Parcel Nos. 9 and 10, given the three one-story former residential structures are an interim use and also do not add contributory value to the property as a whole, the property, Parcel Nos. 9 and 10, are regarded as vacant; because the parcels are contiguous and considered as one tract with Parcel No. 23, Parcel Nos. 9 and 10 are regarded as excess land. For Parcel No. 23, the amount of excess is estimated using a land to building ratio of 2 to 1 for the existing office building containing 12,701 square feet of gross building area. The estimated site for the subject building is therefore 25,402 square feet. The remaining area on Parcel No. 23 (94,356 square feet) is considered excess land.

CITRUS COUNTY HOSPITAL BOARD

RESTRICTED USE APPRAISAL REPORT

Page 41

HIGHEST AND BEST USE ANALYSIS As previously discussed, in the analysis of Highest and Best Use of the land as though vacant, it is assumed that the land is vacant or can be made vacant by removal of existing improvements. The analysis of Highest and Best Use of the land as improved considers the alternative uses of an improved property. It is VMG Health’s opinion that the Highest and Best Use of the subject site, i.e., the contiguous Parcel Nos. 9, 19 and 23) as if vacant, would be for future commercial development as permitted by zoning as demand warrants. In the case of the subject property Parcel No. 23, the existing office improvements containing 12,701 square feet are functional and constitute a substantial improvement to the subject site. The cost of demolishing the existing improvements would far exceed any increase in revenue that could be generated from an alternative use at this time. The existing 12,701-square-foot office improvements suffer from no apparent form or physical, functional or external obsolescence. In all respects, the improvements are assumed functional and conform well to the neighborhood. However, the remaining improvements (church and residential structures) on Parcel Nos. 9, 10 and 23, exhibit advanced depreciation. Moreover, the indicated value of the land associated with the improvements indicates that the improvements provide minimal contributory vale to the site as a whole.

DRAFT

Considered as excess land, the highest and best use of the underlying land on Parcel Nos. 9, 10 and 23 would be for future commercial development as permitted by zoning as demand warrants.

CONCLUSION Parcel No. 23 is improved with one structure that comprises a gross building area of 12,701 square feet. The building is used as offices. The improvements contribute significantly to the value of the subject site and provide for both a return to the land and improvements. Therefore, it is our opinion that the Highest and Best Use as Improved of the subject property is for the continued use as an office building. As discussed, the church and residential structures located on Parcel Nos. 9 and 10 and the portion of Parcel No. 23 (excluding the office building and required parking) do not prove contributory value to the site as a whole. The Highest and Best Use of Parcel Nos. 9 and 10, as well as the excess land on Parcel No. 23, is for redevelopment upon economic justification.

CITRUS COUNTY HOSPITAL BOARD

RESTRICTED USE APPRAISAL REPORT

Page 42

VALUATION In earlier sections of this Summary Appraisal Report, the three basic approaches were discussed: the Cost Approach; the Sales Comparison Approach; and the Income Approach. The appraiser analyzed all market data and considered all three traditional approaches to value Parcel No. 23. As Parcel Nos. 9 and 10 essentially represent land value, only the Sales Comparison Approach to value was applied. VALUE RECONCILIATION VMG Health reconciled the indicators analyzed to determine an estimate of the Fair Market Value for the subject property. Based upon the analysis of data obtained, we have formed the opinion that the Fair Market Value of the Fee Simple Estate in the subject property (Parcel No. 23), i.e., the 12,701 square foot building on an estimated site of 25,402 square feet, subject to the definitions, certifications, and limiting conditions set forth in the attached Restricted Use Appraisal Report, as of February 6, 2013, is:

DRAFT

NINE HUNDRED THOUSAND DOLLARS $900,000

Furthermore, based upon the analysis of data obtained, we have formed the opinion that the Fair Market Value of the Fee Simple Estate in the excess land of the subject property, i.e., 94,356 square feet, subject to the definitions, certifications, and limiting conditions set forth in the attached Restricted Use Appraisal Report, as of February 6, 2013, is: FIVE HUNDRED THOUSAND DOLLARS $500,000

The estimated marketing period associated with this value estimate is twelve months, while the estimated exposure period is also twelve months. The range of the Fair Market Rent for the improved portion of Parcel No. 23 is $7.00 to $9.00 per square foot of gross building area, on a NNN basis, without concessions, on an “as is” basis. The lease term is three to five years. The annual rental rate does not include an annual CPI increase.

CITRUS COUNTY HOSPITAL BOARD

RESTRICTED USE APPRAISAL REPORT

Page 43

Our report and analysis are subject to the attached statement of Assumptions and Limiting Conditions. Pertinent valuation details are located on the following pages. Additional market intelligence is maintained in our files.

PARCEL ALLOCATION Parcel No. 9 10 23

Allocation $70,000 30,000 1,300,000 $1,400,000

DRAFT

CITRUS COUNTY HOSPITAL BOARD

RESTRICTED USE APPRAISAL REPORT

Page 44

Parcel No. 23 ‐ CMHF Offices Building Cost Development PRELIMINARY DRAFT ‐ SUBJECT TO CHANGE Inverness, Citrus County, Florida As of February 6, 2013

Building Number & Name

Occupancy Number & Name Section Number & Page Construction Class & Quality Gross Building Area (Square Feet) Gross Perimeter (Linear Feet) Number of Floors & Height per Story (Feet)

344 15

TOTAL

Office 17

C

Good 

1

12,701 516 12

 

           12,701

249.02*.1+162.26*.9

Base Cost ‐ Square Foot

$138.59

Refinements ‐ Square Foot Heating, cooling, ventilating Elevator Sprinkler System Miscellaneous Refinements ‐ Multipliers Number of Stories Height per Story Floor Area & Perimeter Current Cost Multiplier Local Cost Multiplier Net Multiplier

2‐ Miscellaneous and  Land Improvements

1 ‐ Annex Building

$0.00 ‐$2.00 $3.26 $0.00 $139.85

DRAFT

Replacement Cost New (RCN) Adjusted Cost ‐ Square Foot Extended Base Cost Miscellaneous  Site Improvements Subtotal Soft Costs & Entreprenurial Profit

1.000 1.000 0.950 1.070 1.000 1.017

5.0%

RCN RCN Rounded RCN per Square Foot

142.23 $1,806,463                   ‐                   ‐ $1,806,463 $90,323

  $         50,423          174,819 $225,242 5.0%            11,262

$1,806,463            50,423          174,819 $2,031,705          101,585

$1,896,786 $1,900,000

$      236,504 $240,000

$2,133,290 $2,140,000

$149.59

$168.49

Depreciation Year Built Physical Age Effective Age Economic Life (Section 97, Page 13) Remaining Useful Life Physical Depreciation (Age/Life)

63.6%

1968 45 35 55 20 $1,209,091

$123,692

     1,332,783

0.0%

$690,909 $0

$116,308 $0

$807,217                   ‐

0.0%

$690,909 $0

$116,308 $0

$807,217                   ‐

less Economic Obsolescence

$690,909

$116,308

$807,217

Depreciated Cost per Square Foot

$690,000 $54.33

$120,000

$810,000 $63.77

RCN less Physical Depreciation Functional Obsolescence less Functional Obsolescence Economic Obsolescence

CITRUS COUNTY HOSPITAL BOARD

 

Depreciation %  Depreciation

Canopies

Description

PRELIMINARY DRAFT ‐ SUBJECT TO CHANGE

   

816 sf

Replacement Cost New

Quantity

Unit

63.6% $              33,692

$        52,944

Current Cost Local Total  Source Multiplier Multiplier Cost $57.75 1.07 1.00 $              50,423 MVS ‐ Section 15 Page 37 5% 2,521

Unit Cost

Miscellaneous Items Pricing Support

Parcel No. 23 ‐ CMHF Offices

RESTRICTED USE APPRAISAL REPORT

DRAFT

CITRUS COUNTY HOSPITAL BOARD

Page 45

Paving Landscaping Lighting

Type

Description

CITRUS COUNTY HOSPITAL BOARD

CRN Rounded

Total Replacement Cost New (CRN)

Good quality asphalt parking lot(est) Landscaping Lighting

PRELIMINARY DRAFT ‐ SUBJECT TO CHANGE

Inverness, Florida As of February 6, 2013

Parcel No. 23 ‐ CMHF Offices

66 66 66

MVS  Section

3 8 1

Page

38,538 12,000 6

Quantity

SF SF Units

Unit

1.04 1.04 1.04

Current

1.00 1.00 1.00

Local

Multipliers

DRAFT Depreciated Cost

Effective Age Economic Life (Section 97, Page 19) Remaining Useful Life Physical Depreciation (Age/Life) RCN less Physical Depreciation Functional Obsolescence less Functional Obsolescence Economic Obsolescence less Economic Obsolescence

$3.50 $1.96 $1,613

Unit Base  Cost

Land Improvements Cost Development

Replacement  Cost New

0.0%

0.0%

4 8 4 50.0%

$90,000

$90,000 $90,000 $0 $90,000 $0 $90,000

$183,560 $180,000

$174,819 5%                   8,741

$3.64 $140,277 $2.04                 24,480 $1,677.00                 10,062

Unit Replacement  Cost, New

RESTRICTED USE APPRAISAL REPORT Page 46

RESTRICTED USE APPRAISAL REPORT

Page 47

Parcel No. 23 - CMHF Offices Inverness, Citrus County, Florida  

COST APPROACH CONCLUSION

 

TOTAL REPLACEMENT COST NEW

$2,140,000

Less Accrued Depreciation: Physical Curable

$0

Physical Incurable

1,332,783

Total Physical

$1,332,783

Functional Curable Obsolescence

$0

Functional Incurable Obsolescence

0

Total Functional Obsolescence

0

External Obsolescence

0

DRAFT

TOTAL ACCRUED DEPRECIATION

$1,332,783

ROUNDED RCNLD

$810,000

PLUS LAND VALUE (25,402 SQUARE FEET)

$110,000

VALUE - FEE SIMPLE ESTATE

$920,000

ADD EXCESS LAND (94,356 SQUARE FEET)

420,000

ROUNDED

CITRUS COUNTY HOSPITAL BOARD

$1,340,000

RESTRICTED USE APPRAISAL REPORT

Page 48

Parcel No. 23 - CMHF Offices Direct Capitalization Gross Building Area Market Rent

12,701 $8.00

Potential Gross Income Less Vacancy Effective Gross Income Less Management Total Operating Expenses Less Structural Reserves Net Operating Income Indicated Cap. Rate

$ 5% $ 3%

$

2,896 $

$ 0.50 $

Indicated Value Less PV of Capital Expenditures Indicated Value Before Excess Land Excess Land Final Indicated Value Rounded

DRAFT

CITRUS COUNTY HOSPITAL BOARD

101,608 5,080 96,528

$

$ $

2,896 6,351 87,281 10.50% 831,250 831,250 420,000 1,251,250 1,250,000

RESTRICTED USE APPRAISAL REPORT

Page 49

SUMMARY OF SALIENT FACTS – PARCEL NOS. 11, 17, 19 AND 20

Date of Appraisal:

DRAFT

February 6, 2013

Property Name/Location:

CMHF Vacant Governmental 108 and 112 South Seminole Avenue, 111 South Osceola Avenue and 302 West Grace Street, Inverness, Citrus County, Florida

Client:

Citrus County Hospital Board

Land Size:

91,535 square feet or 2.101 acres

Improvement Size:

None

Owner of Record:

Citrus Memorial Health Foundation, Inc.

Subject Property Description: Use:

Surface Parking

Fair Market Value:

$520,000

.

CITRUS COUNTY HOSPITAL BOARD

RESTRICTED USE APPRAISAL REPORT

Page 50

PROPERTY DESCRIPTION – PARCEL NOS. 11, 17, 19 AND 20 The subject property consists of an improved 2.101-acre (gross) land parcel that is located at 108 South Seminole Avenue and 112 South Seminole Avenue, 111 South Osceola Avenue and 302 West Grace Street, Inverness, Citrus County, Florida. Specifically, the subject site is located at the southern half of the city block bounded by West Grace Street on the south, South Seminole Avenue on the east and South Osceola Avenue on the west. There is an estimated approximately 330 feet of frontage along the west line of South Seminole Avenue, 325 feet along the north side of West Grace Street and 248 feet along the east side of South Osceola Avenue. The site contains approximately 91,535 square feet, or 2.101 acres, according to the Citrus County Property Appraiser and is irregular in shape. There is a single curb cut into the tract along each of the three frontage roads. The site is generally level and at street grade. According to Flood Insurance Rate Map number 1203480002B, dated May 17, 1982, the subject property is not within a designated flood zone. The subject site is zoned RO / RP (Residential Professional). The subject property is improved with surface parking (estimated 62,500 square feet by the appraiser). Land improvements consist of landscaping and asphalt surface parking, which contribute to the value of the site.

DRAFT

According to the Citrus County Property Appraiser, the assessment for 2012 is as follows. The properties are tax exempt. Alt Key 1755808 Alt Key 2906863 Alt Key 2910542 Alt Key 2911484 Total

Market/Just $45,206 327,870 188,637 20,726 $582,439

Assessed $45,206 327,870 188,637 20,726 $582,439

Taxable $0 0 0 0 $0

HIGHEST AND BEST USE ANALYSIS As previously discussed, in the analysis of Highest and Best Use of the land as though vacant, it is assumed that the land is vacant or can be made vacant by removal of existing improvements. The analysis of Highest and Best Use of the land as improved considers the alternative uses of an improved property. It is VMG Health’s opinion that the Highest and Best Use of the subject site, as if vacant, would be for future commercial development as permitted by zoning as demand warrants.

CITRUS COUNTY HOSPITAL BOARD

RESTRICTED USE APPRAISAL REPORT

Page 51

In the case of the subject property, the site is vacant save the existing surface parking which contributes to the site.

VALUATION In earlier sections of this Summary Appraisal Report, the three basic approaches were discussed: the Cost Approach; the Sales Comparison Approach; and the Income Approach. Only the Sales Comparison Approach was utilized in this instance and the contributory value of the paving was determined by application of the Cost Approach. The appraiser analyzed all market data and considered all three traditional approaches to value. VALUE RECONCILIATION VMG Health reconciled the indicators analyzed to determine an estimate of the Fair Market Value for the subject property. Based upon the analysis of data obtained, we have formed the opinion that the Fair Market Value of the Fee Simple Estate in the subject property, subject to the definitions, certifications, and limiting conditions set forth in the attached Restricted Use Appraisal Report, as of February 5, 2012, is:

DRAFT

FIVE HUNDRED TWENTY THOUSAND DOLLARS $520,000 The estimated marketing period associated with this value estimate is twelve months, while the estimated exposure period is also twelve months. Our report and analysis are subject to the attached statement of Assumptions and Limiting Conditions. PARCEL ALLOCATION Parcel No. 11 17 19 20

Land Area (SF) 5,541 52,623 31,241 2,130

*Includes land improvements

CITRUS COUNTY HOSPITAL BOARD

Distribution 6% 58% 34% 2%

Allocation $25,000 305,000* 180,000* 10,000 $520,000

RESTRICTED USE APPRAISAL REPORT

Page 52

SUMMARY OF SALIENT FACTS – PARCEL NUMBER 12

Date of Appraisal:

February 6, 2013

Property Name/Location:

CMHF/RRA, LLC 6254 West Corporate Oaks Drive Citrus County, Florida

Client:

DRAFT

Citrus County Hospital Board

Land Size:

39,578 square feet or 0.909 acre

Improvement Size:

2,874 gross square feet

Owner of Record:

Citrus Memorial Health Foundation, Inc. and RRA LLC

Subject Property Description: Use:

Medical Office Building

Fair Market Value:

$290,000

Range of Fair Market Rent:

$10.00 to $12.00 per square foot of gross building area

Implicit in this rental rate estimate is a NNN basis, with the tenant being responsible for all operating costs. The lease term would be three to five years, without concessions, on an “as is” basis. The rate also does not include an annual CPI increase in the base rate.

CITRUS COUNTY HOSPITAL BOARD

RESTRICTED USE APPRAISAL REPORT

Page 53

PROPERTY DESCRIPTION – PARCEL NO. 12 The subject property consists of an improved 0.909 acre (gross) land parcel that is located at 6254 West Corporate Oaks Drive, Crystal River, Citrus County, Florida. Specifically, the subject site is located on the northeast side of West Gulf to Lake Highway, approximately 186 feet southeast of North Meeting Tree Boulevard. The site also has approximately 158 feet of frontage and access along the southwest side of West Corporate Oaks Drive. The site is visible but not accessible from West Gulf to Lake Highway. The site contains approximately 39,578 square feet, or 0.909 acre, according to the Citrus County Property Appraiser and is irregular in shape. There is a single curb cut into the tract from West Corporate Oaks Drive. The site is slopes gently to the southwest and at street grade. According to Flood Insurance Rate Map number 1200630120B, dated August 15, 1984, the subject property is not within a designated flood zone. The subject site is zoned PDR (Planned Residential Development District).

According to the Citrus County Property Appraiser, the assessment for 2012 is as follows: Alt Key 2425407

DRAFT

Market/Just $427,278

Assessed $427,278

Taxable $427,278

The subject property is improved with an unoccupied one-story professional office building, associated site improvements and surface parking. According to the Citrus County Property Appraiser, the improvements comprise a gross building area of 2,874 square feet. The building is constructed with wood-frame and wood siding and stucco veneer with glass windows along the exterior. The roof is pitched with composite shingles. The interior was not inspected. It is reported the improvements are not sprinklered. Land improvements consist of landscaping and asphalt surface parking. The improvements were built in 1986 and have a chronological age of 27 years. Given the maintenance of the property, the effective age is estimated to be 18 years. The subject’s physical adaptability conforms to that of its competitors. Overall, the subject premises are considered to be of average quality construction. The subject improvements are in average condition, which is consistent with the chronological age of the structure and the level of maintenance. The project amenities are consistent with professional and medical office uses in the local market. The design and layout appear to be conducive to operations of tenants in the market.

CITRUS COUNTY HOSPITAL BOARD

RESTRICTED USE APPRAISAL REPORT

Page 54

HIGHEST AND BEST USE ANALYSIS As previously discussed, in the analysis of Highest and Best Use of the land as though vacant, it is assumed that the land is vacant or can be made vacant by removal of existing improvements. The analysis of Highest and Best Use of the land as improved considers the alternative uses of an improved property. It is VMG Health’s opinion that the Highest and Best Use of the subject site, as if vacant, would be for future commercial development as permitted by zoning as demand warrants. In the case of the subject property, the existing improvements are functional and constitute a substantial improvement to the subject site. The cost of demolishing the existing improvements would far exceed any increase in revenue that could be generated from an alternative use at this time. The existing improvements suffer from no apparent form or physical, functional or external obsolescence. In all respects, the improvements are assumed functional and conform well to the neighborhood.

CONCLUSION

DRAFT

The subject site is improved with a structure that comprises a gross building area of 2,874 square feet. The building is used as a medical office building. The improvements contribute significantly to the value of the subject site and provide for both a return to the land and improvements. Therefore, it is our opinion that the Highest and Best Use as Improved of the subject property is for the continued use as a medical office building.

VALUATION In earlier sections of this Summary Appraisal Report, the three basic approaches were discussed: the Cost Approach; the Sales Comparison Approach; and the Income Approach. The appraiser analyzed all market data and considered all three traditional approaches to value.

CITRUS COUNTY HOSPITAL BOARD

RESTRICTED USE APPRAISAL REPORT

Page 55

VALUE RECONCILIATION VMG Health reconciled the indicators analyzed to determine an estimate of the Fair Market Value for the subject property. Based upon the analysis of data obtained, we have formed the opinion that the Fair Market Value of the Fee Simple Estate in the subject property, subject to the definitions, certifications, and limiting conditions set forth in the attached Restricted Use Appraisal Report, as of February 6, 2013, is: TWO HUNDRED NINETY THOUSAND DOLLARS $290,000 The estimated marketing period associated with this value estimate is twelve months, while the estimated exposure period is also twelve months. The range of the Fair Market Rent, including both buildings, is $10.00 to $12.00 per square foot of gross building area, on a NNN basis, without concessions, on an “as is” basis. The lease term is three to five years. The annual rental rate does not include an annual CPI increase. Our report and analysis are subject to the attached statement of Assumptions and Limiting Conditions. Pertinent valuation details are located on the following pages. Additional market intelligence is maintained in our files.

DRAFT

CITRUS COUNTY HOSPITAL BOARD

RESTRICTED USE APPRAISAL REPORT

Page 56

Parcel No. 12 ‐ CMHF/RRA, LLC ‐  Building Cost Development PRELIMINARY DRAFT ‐ SUBJECT TO CHANGE Crystal River, Citrus County, Florida As of February 6, 2013

Building Number & Name

1 ‐ Citrus Memorial Healthcare Cente

Occupancy Number & Name Section Number & Page Construction Class & Quality Gross Building Area (Square Feet) Gross Perimeter (Linear Feet) Number of Floors & Height per Story (Feet)

341 15

Average

1

2,874 204 12

                    2,874

  $117.45

Base Cost ‐ Square Foot Refinements ‐ Square Foot Heating, cooling, ventilating Elevator Sprinkler System Miscellaneous

Replacement Cost New (RCN) Adjusted Cost ‐ Square Foot Extended Base Cost Miscellaneous  Site Improvements Subtotal Soft Costs & Entreprenurial Profit

TOTAL

Medical Office  Building 22

D

 

Refinements ‐ Multipliers Number of Stories Height per Story Floor Area & Perimeter Current Cost Multiplier Local Cost Multiplier Net Multiplier

2 ‐  Miscellaneous and  Land Improvements

$0.00 ‐$2.10 $0.00 $0.00 $115.35

DRAFT 1.000 1.000 1.030 1.060 1.000 1.092

5.0%

RCN RCN Rounded RCN per Square Foot

125.96 $362,009                          ‐                          ‐ $362,009 $18,100

  $                      ‐                   71,408 $71,408 5.0%                     3,570

$362,009                          ‐                   71,408 $433,417                   21,671

$                74,978 $70,000

$455,087 $450,000 $156.58

$380,109 $380,000 $132.22

Depreciation Year Built Physical Age Effective Age Economic Life (Section 97, Page 13) Remaining Useful Life Physical Depreciation (Age/Life)

51.4%

1986 27 18 35 17 $195,429

$35,000

                230,429

0.0%

$184,571 $0

$35,000 $0

$219,571                         ‐

0.0%

$184,571 $0

$35,000 $0

$219,571                         ‐

less Economic Obsolescence

$184,571

$35,000

$219,571

Depreciated Cost per Square Foot

$180,000 $62.63

$40,000

$220,000 $76.55

RCN less Physical Depreciation Functional Obsolescence less Functional Obsolescence Economic Obsolescence

CITRUS COUNTY HOSPITAL BOARD

 

Paving Landscaping

Type

Description

CITRUS COUNTY HOSPITAL BOARD

CRN Rounded

Total Replacement Cost New (CRN)

Good quality asphalt parking lot(est) Landscaping

PRELIMINARY DRAFT ‐ SUBJECT TO CHANGE

Crystal River, Florida As of February 6, 2013

66 66

MVS  Section

3 3

Page

6,990 26,750

Quantity

SF SF

Unit

1.06 1.06

Current

1.00 1.00

Local

Multipliers

DRAFT Depreciated Cost

Effective Age Economic Life (Section 97, Page 19) Remaining Useful Life Physical Depreciation (Age/Life) RCN less Physical Depreciation Functional Obsolescence less Functional Obsolescence Economic Obsolescence less Economic Obsolescence

$3.50 $1.60

Unit Base  Cost

Land Improvements Cost Development

Parcel No. 12 ‐ CMHF/RRA, LLC ‐ 

0.0%

0.0%

4 8 4 50.0%

Replacement  Cost New

$40,000

$35,000 $35,000 $0 $35,000 $0 $35,000

$74,978 $70,000

$71,408 5%                   3,570

$3.71 $25,933 $1.70                 45,475

Unit Replacement  Cost, New

RESTRICTED USE APPRAISAL REPORT Page 57

RESTRICTED USE APPRAISAL REPORT

Page 58

Parcel No. 12 - CMHF/RRA, LLC 6254 West Corporate Oaks Drive Crystal River, Citrus County, Florida  

COST APPROACH CONCLUSION

 

$450,000

TOTAL REPLACEMENT COST NEW Less Accrued Depreciation: Physical Curable

$0

Physical Incurable

230,429

Total Physical

$230,429

Functional Curable Obsolescence

$0

Functional Incurable Obsolescence

0

Total Functional Obsolescence External Obsolescence

DRAFT

TOTAL ACCRUED DEPRECIATION

0 0 $230,429

ROUNDED RCNLD

$220,000

PLUS LAND VALUE

$60,000

VALUE - FEE SIMPLE ESTATE

$280,000

ROUNDED

$280,000

CITRUS COUNTY HOSPITAL BOARD

RESTRICTED USE APPRAISAL REPORT

Page 59

Parcel No. 12 ‐ CMHF/RRA, LLC ‐  Direct Capitalization Gross Building Area Market Rent

2,874 $ 11.00

Potential Gross Income Less Vacancy Effective Gross Income Less Management Total Operating Expenses Less Structural Reserves Net Operating Income Indicated Cap. Rate

$                   31,614 5% 3%

1,581 $

$

30,033

$

901 1,437

$

27,695

901

$ 0.50

9.50%

Indicated Value Less PV of Capital Expenditures Total Less Leaseup (9 months to lease)

$

Total Rounded PSF

$                291,529 $                290,000 $                   100.90

DRAFT

CITRUS COUNTY HOSPITAL BOARD

291,529 -

$                291,529                   (23,711)

RESTRICTED USE APPRAISAL REPORT

Page 60

SUMMARY OF SALIENT FACTS – PARCEL NO. 13

Date of Appraisal:

February 6, 2013

Property Name/Location:

CMHF-Citrus Primary Crystal River / Dr. Irvine 700 Southeast 5th Terrace, Units 7 and 8 Crystal River, Citrus County, Florida

DRAFT

Client:

Citrus County Hospital Board

Land Size:

2,784 square feet or 0.064 acre

Improvement Size:

2,784 gross square feet

Owner of Record:

Citrus Memorial Health Foundation, Inc.

Subject Property Description: Use:

Medical Office Building

Fair Market Value:

$200,000

Range of Fair Market Rent:

$8.00 to $10.00 per square foot of gross building area

Implicit in this rental rate estimate is a NNN basis, with the tenant being responsible for all operating costs. The lease term would be three to five years, without concessions, on an “as is” basis. The rate does not include an annual CPI increase in the base rate.

CITRUS COUNTY HOSPITAL BOARD

RESTRICTED USE APPRAISAL REPORT

Page 61

PROPERTY DESCRIPTION – PARCEL NO. 13 The subject property consists of an improved 0.064 acre (gross) land parcel that is located at 700 Southeast 5th Terrace, Crystal River, Citrus County, Florida. Specifically, the subject site is located within the Crystal River Professional Park and shares parking with the Professional Park of Crystal River Condominium Association. The site is located approximately 240 feet south of Southeast 5th Terrace. Access to the Crystal River Professional Park development is available along the south line of Southeast 5th Terrace via a single curb cut and along the west line of the property to the adjacent property. Because of the condominium ownership, the site area is the area of the building footprint, or approximately 2,784 square feet, or 0.064 acre, according to the Citrus County Property Appraiser and is irregular in shape. The site is generally level and at street grade. Based on an estimate by the appraiser, according to Flood Insurance Rate Map number 1230480002B, dated August 15, 1984, indicates the majority of the site is located in Zone A11(E8). It is recommended that a definitive survey be conducted by engineers to determine the final status of the subject property. The subject site is zoned CG (General Commercial). The subject property is improved with a one-story medical office building and associated site improvements. Surface parking is available. The improvements are equally divided as a two-tenant medical office building. The building is occupied by Citrus Primary Care, David Irvine, M.D.

DRAFT

According to the Citrus County Property Appraiser, the improvements comprise a gross building area of 2,784 square feet. Building Unit 7 Unit 8 Total

Area (SF) 1,363 1,421 2,784

Year Built 1984 1984

According to the Citrus County Property Appraiser, the assessment for 2012 is as follows: Alt Key 2619970 Alt Key 2619988 Total

Market/Just $96,995 75,897 $172,892

Assessed $96,995 75,897 $172,892

Taxable $96,995 75,897 $172,892

The building is wood-frame constructed with vertical wood siding and faux-brick exterior with glass windows along the exterior. The roof is pitched with composite shingles. The interior finish-out includes: 1’ by 1’ floor tiles; painted drywall partitioning; 2’ by 2’ ceiling

CITRUS COUNTY HOSPITAL BOARD

RESTRICTED USE APPRAISAL REPORT

Page 62

tiles; and recessed fluorescent lighting. The improvements are not sprinklered. There are six exam rooms, a receptionist area, a filing area, a waiting room and storage areas. Land improvements consist of landscaping and asphalt surface parking. The improvements were built in 1984 and have a chronological age of 29 years. Given the maintenance of the property, the effective age is estimated to be 20 years. The subject’s physical adaptability conforms to that of its competitors. Overall, the subject premises are considered to be of average quality construction. The subject improvements are in average condition, which is consistent with the chronological age of the structure and the level of maintenance. The project amenities are consistent with medical office uses in the local market. The design and layout appear to be conducive to current operations.

HIGHEST AND BEST USE ANALYSIS As previously discussed, in the analysis of Highest and Best Use of the land as though vacant, it is assumed that the land is vacant or can be made vacant by removal of existing improvements. The analysis of Highest and Best Use of the land as improved considers the alternative uses of an improved property.

DRAFT

It is VMG Health’s opinion that the Highest and Best Use of the subject site, as if vacant, would be for future commercial development in conjunction with the condominium development and as permitted by zoning as demand warrants. In the case of the subject property, the existing improvements are functional and constitute a substantial improvement to the subject site. The cost of demolishing the existing improvements would far exceed any increase in revenue that could be generated from an alternative use at this time. The existing improvements suffer from no apparent form or physical, functional or external obsolescence. In all respects, the improvements are assumed functional and conform well to the neighborhood.

CONCLUSION The subject site is improved with a structure that comprises a gross building area of 2,784 square feet. The building is used as a medical office condominium. The improvements contribute significantly to the value of the subject site and provide for both a return to the land and improvements. Therefore, it is our opinion that the Highest and Best Use as Improved of the subject property is for the continued use as a medical office condominium.

CITRUS COUNTY HOSPITAL BOARD

RESTRICTED USE APPRAISAL REPORT

Page 63

VALUATION In earlier sections of this Summary Appraisal Report, the three basic approaches were discussed: the Cost Approach; the Sales Comparison Approach; and the Income Approach. The appraiser analyzed all market data and considered the Income and the Sales Comparison Approaches to value. Primarily reliance was placed on the Sales Comparison Approach. VALUE RECONCILIATION VMG Health reconciled the indicators analyzed to determine an estimate of the Fair Market Value for the subject condominium. Based upon the analysis of data obtained, we have formed the opinion that the Fair Market Value of the Fee Simple Estate in the subject property, subject to the definitions, certifications, and limiting conditions set forth in the attached Restricted Use Appraisal Report, as of February 6, 2013, is: TWO HUNDRED THOUSAND DOLLARS $200,000 The estimated marketing period associated with this value estimate is twelve months, while the estimated exposure period is also twelve months.

DRAFT

The range of the Fair Market Rent, including both buildings, is $8.00 to $10.00 per square foot of gross building area, on a NNN basis, without concessions, on an “as is” basis. The lease term is three to five years. The annual rental rate does not include an annual CPI increase. Our report and analysis are subject to the attached statement of Assumptions and Limiting Conditions.

CITRUS COUNTY HOSPITAL BOARD

RESTRICTED USE APPRAISAL REPORT

Page 64

SUMMARY OF SALIENT FACTS – PARCEL NO. 14

Date of Appraisal:

February 6, 2013

Property Name/Location:

CMHF-Citrus Primary Beverly Hills 450 West Roosevelt Boulevard Beverly Hills, Citrus County, Florida

Client:

DRAFT

Citrus County Hospital Board

Land Size:

82,960 square feet or 1.904 acres

Improvement Size:

3,493 gross square feet

Owner of Record:

Citrus Memorial Health Foundation, Inc.

Subject Property Description: Use:

Medical Office Building

Fair Market Value:

$450,000

Range of Fair Market Rent:

$10.00 to $12.00 per square foot of gross building area

Implicit in this rental rate estimate is a NNN basis, with the tenant being responsible for all operating costs. The lease term would be three to five years, without concessions, on an “as is” basis. The rate does not include an annual CPI increase in the base rate.

CITRUS COUNTY HOSPITAL BOARD

RESTRICTED USE APPRAISAL REPORT

Page 65

PROPERTY DESCRIPTION – PARCEL NO. 14 The subject property consists of an improved 1.904 acre (gross) land parcel that is located at 450 West Roosevelt Boulevard, Beverly Hills, Citrus County, Florida. Specifically, the subject site is located at the southwest corner of West Roosevelt Boulevard and North Forest Ridge Boulevard. There is an estimated approximately 360 feet of frontage along the southwest side of West Roosevelt Boulevard and approximately 215 feet of frontage along the northwest side of North Forest Ridge Boulevard. The site contains approximately 82,960 square feet, or 1.904 acres, according to the Citrus County Property Appraiser and is irregular in shape. There is a curb cut into the tract along the south side of West Roosevelt Boulevard and from the south across the adjoining property. The site is generally level and at street grade. According to Flood Insurance Rate Map number 1200630140B, dated August 15, 1984, the subject property is not within a designated flood zone. The subject site is zoned PDR (Planned Residential Development District). According to the Citrus County Property Appraiser, the assessment for 2012 is as follows: Alt Key 2959312

DRAFT

Market/Just $527,086

Assessed $527,086

Taxable $0

The subject property is improved with a one-story medical office building, associated site improvements and surface parking. The improvements are equally divided as a two-tenant medical office building. The building is occupied by Citrus Primary Care. According to the Citrus County Property Appraiser, the improvements comprise a gross building area of 3,493 square feet. In addition, there is approximately 692 square feet of roof-covered porch area at the primary entrance. The building is constructed with concrete block and stucco veneer with glass windows along the exterior. The roof is pitched with composite shingles. The interior finish-out includes: 1’ by 1’ floor tiles; painted drywall partitioning; 2’ by 2’ ceiling tiles; and recessed fluorescent lighting. Exam rooms include sinks. The improvements are not sprinklered. Interior improvements include exam rooms, receptionist areas, filing areas, waiting rooms and storage areas. Land improvements consist of landscaping and asphalt surface parking. The improvements were built in 2001 and have a chronological age of 12 years. Given the maintenance of the property, the effective age is estimated to be 12 years.

CITRUS COUNTY HOSPITAL BOARD

RESTRICTED USE APPRAISAL REPORT

Page 66

The subject’s physical adaptability conforms to that of its competitors. Overall, the subject premises are considered to be of average quality construction. The subject improvements are in average condition, which is consistent with the chronological age of the structure and the level of maintenance. The project amenities are consistent with medical office uses in the local market. The design and layout appear to be conducive to current operations.

HIGHEST AND BEST USE ANALYSIS As previously discussed, in the analysis of Highest and Best Use of the land as though vacant, it is assumed that the land is vacant or can be made vacant by removal of existing improvements. The analysis of Highest and Best Use of the land as improved considers the alternative uses of an improved property. It is VMG Health’s opinion that the Highest and Best Use of the subject site, as if vacant, would be for future commercial development as permitted by zoning as demand warrants. In the case of the subject property, the existing improvements are functional and constitute a substantial improvement to the subject site. The cost of demolishing the existing improvements would far exceed any increase in revenue that could be generated from an alternative use at this time.

DRAFT

The existing improvements suffer from no apparent form or physical, functional or external obsolescence. In all respects, the improvements are assumed functional and conform well to the neighborhood.

CONCLUSION The subject site is improved with a structure that comprises a gross building area of 3,493 square feet. The building is used as a medical office building. The improvements contribute significantly to the value of the subject site and provide for both a return to the land and improvements. Therefore, it is our opinion that the Highest and Best Use as Improved of the subject property is for the continued use as a medical office building.

VALUATION In earlier sections of this Summary Appraisal Report, the three basic approaches were discussed: the Cost Approach; the Sales Comparison Approach; and the Income Approach.

CITRUS COUNTY HOSPITAL BOARD

RESTRICTED USE APPRAISAL REPORT

Page 67

The appraiser analyzed all market data and considered all three traditional approaches to value. VALUE RECONCILIATION VMG Health reconciled the indicators analyzed to determine an estimate of the Fair Market Value for the subject premises. The subject property has a high land-to-building ratio, distorting the Cost Approach. Greater weight was place on the Income Approach. Based upon the analysis of data obtained, we have formed the opinion that the Fair Market Value of the Fee Simple Estate in the subject property, subject to the definitions, certifications, and limiting conditions set forth in the attached Restricted Use Appraisal Report, as of February 6, 2013, is: FOUR HUNDRED FIFTY THOUSAND DOLLARS $450,000 The estimated marketing period associated with this value estimate is twelve months, while the estimated exposure period is also twelve months. The range of the Fair Market Rent, including both buildings, is $10.00 to $12.00 per square foot of gross building area, on a NNN basis, without concessions, on an “as is” basis. The lease term is three to five years. The annual rental rate does not include an annual CPI increase.

DRAFT

Our report and analysis are subject to the attached statement of Assumptions and Limiting Conditions. Pertinent valuation details are located on the following pages. Additional market intelligence is maintained in our files.

CITRUS COUNTY HOSPITAL BOARD

RESTRICTED USE APPRAISAL REPORT

Page 68

Parcel No. 14 ‐ CMHF – Citrus Primary Beverly Hills  Building Cost Development PRELIMINARY DRAFT ‐ SUBJECT TO CHANGE Beverly Hills, Citrus County, Florida As of February 6, 2013

Building Number & Name

1 ‐ Citrus Memorial Healthcare Cente

Occupancy Number & Name Section Number & Page Construction Class & Quality Gross Building Area (Square Feet) Gross Perimeter (Linear Feet) Number of Floors & Height per Story (Feet)

341 15

Average

1

3,493 248 12

                    3,493

  $123.80

Base Cost ‐ Square Foot Refinements ‐ Square Foot Heating, cooling, ventilating Elevator Sprinkler System Miscellaneous

Replacement Cost New (RCN) Adjusted Cost ‐ Square Foot Extended Base Cost Miscellaneous  Site Improvements Subtotal Soft Costs & Entreprenurial Profit

TOTAL

Medical Office  Building 22

C

 

Refinements ‐ Multipliers Number of Stories Height per Story Floor Area & Perimeter Current Cost Multiplier Local Cost Multiplier Net Multiplier

2 ‐  Miscellaneous and  Land Improvements

$0.00 ‐$2.10 $0.00 $0.00 $121.70 1.000 1.000 1.033 1.070 1.000 1.105

DRAFT 5.0%

RCN RCN Rounded RCN per Square Foot

134.48 $469,739                          ‐                          ‐ $469,739 $23,487

  $                36,828                 105,295 $142,123 5.0%                     7,106

$469,739                   36,828                 105,295 $611,862                   30,594

$             149,229 $150,000

$642,455 $640,000 $183.22

$493,226 $490,000 $140.28

Depreciation Year Built Physical Age Effective Age Economic Life (Section 97, Page 13) Remaining Useful Life Physical Depreciation (Age/Life)

30.0%

2001 12 12 40 28 $147,000

$66,601

                213,601

0.0%

$343,000 $0

$83,399 $0

$426,399                          ‐

0.0%

$343,000 $0

$83,399 $0

$426,399                          ‐

less Economic Obsolescence

$343,000

$83,399

$426,399

Depreciated Cost per Square Foot

$340,000 $97.34

$80,000

$420,000 $120.24

RCN less Physical Depreciation Functional Obsolescence less Functional Obsolescence Economic Obsolescence

CITRUS COUNTY HOSPITAL BOARD

 

Depreciation %  Depreciation

Canopies  

Description

PRELIMINARY DRAFT ‐ SUBJECT TO CHANGE

   

596 sf

Replacement Cost New

Quantity

Unit

30.0% $              11,601

$        38,669

Current Cost Local Total  Source Multiplier Multiplier Cost $57.75 1.07 1.00 $              36,828 MVS ‐ Section 15 Page 37 36,828 5% 1,841

Unit Cost

Miscellaneous Items Pricing Support

Parcel No. 14 ‐ CMHF – Citrus Primary Beverly Hills 

RESTRICTED USE APPRAISAL REPORT

DRAFT

CITRUS COUNTY HOSPITAL BOARD

Page 69

Paving Paving Landscaping

Type

Description

CITRUS COUNTY HOSPITAL BOARD CRN Rounded

Total Replacement Cost New (CRN)

Good quality asphalt parking lot(est) Good quality concrete parking lot(est) Landscaping

PRELIMINARY DRAFT ‐ SUBJECT TO CHANGE

Beverly Hills, Florida As of February 6, 2013

66 66 66

MVS  Section

3 3 3

Page

16,100 660 55,900

Quantity

SF SF SF

Unit

1.04 1.04 1.04

Current

1.00 1.00 1.00

Local

Multipliers

DRAFT Depreciated Cost

Effective Age Economic Life (Section 97, Page 19) Remaining Useful Life Physical Depreciation (Age/Life) RCN less Physical Depreciation Functional Obsolescence less Functional Obsolescence Economic Obsolescence less Economic Obsolescence

$3.50 $4.50 $0.75

Unit Base  Cost

Land Improvements Cost Development

Parcel No. 14 ‐ CMHF – Citrus Primary Beverly Hills 

0.0%

0.0%

4 8 4 50.0%

Replacement  Cost New

$60,000

$55,000 $55,000 $0 $55,000 $0 $55,000

$110,560 $110,000

$105,295 5%                   5,265

$3.64 $58,604 $4.68 $3,089 $0.78                 43,602

Unit Replacement  Cost, New

RESTRICTED USE APPRAISAL REPORT Page 70

RESTRICTED USE APPRAISAL REPORT

Page 71

Parcel No. 14 - CMHF – Citrus Primary Beverly Hills 450 West Roosevelt Boulevard Beverly Hills, Citrus County, Florida  

COST APPROACH CONCLUSION

 

$640,000

TOTAL REPLACEMENT COST NEW Less Accrued Depreciation: Physical Curable

$0

Physical Incurable

213,601

Total Physical

$213,601

Functional Curable Obsolescence

$0

Functional Incurable Obsolescence

0

Total Functional Obsolescence External Obsolescence

DRAFT

0 0

TOTAL ACCRUED DEPRECIATION

$213,601

LAND IMPROVEMENTS & BUILDINGS

$426,399

PLUS LAND VALUE

$80,000

ROUNDED RCNLD

$510,000

CITRUS COUNTY HOSPITAL BOARD

RESTRICTED USE APPRAISAL REPORT

Page 72

Parcel No. 14 ‐ CMHF – Citrus Primary Beverly Hills  Direct Capitalization Gross Building Area Market Rent

3,493 $ 11.00

Potential Gross Income Less Vacancy Effective Gross Income Less Management Total Operating Expenses Less Structural Reserves Net Operating Income Indicated Cap. Rate

$                   38,423 5% 3%

1,921 $

$

36,502

$

1,095 1,747

$

33,660

1,095

$ 0.50

8.50%

Indicated Value Less PV of Capital Expenditures Final Indicated Value Rounded PSF

DRAFT

CITRUS COUNTY HOSPITAL BOARD

$

396,003 -

                   396,003 $                400,000 $                   114.51

RESTRICTED USE APPRAISAL REPORT

Page 73

SUMMARY OF SALIENT FACTS – PARCEL NO. 15

Date of Appraisal:

February 6, 2013

Property Name/Location:

CMHF Rehabilitation Center 810 Medical Court East Inverness, Citrus County, Florida

Client:

DRAFT

Citrus County Hospital Board

Land Size:

38,392 square feet or 0.881 acre

Improvement Size:

7,066 gross square feet

Owner of Record:

Citrus Memorial Health Foundation, Inc.

Subject Property Description: Use:

Rehabilitation Center

Fair Market Value:

$880,000

Range of Fair Market Rent:

$13.00 to $15.00 per square foot of gross building area

Implicit in this rental rate estimate is a NNN basis, with the tenant being responsible for all operating costs. The lease term would be three to five years, without concessions, on an “as is” basis. The rate does not include an annual CPI increase in the base rate.

CITRUS COUNTY HOSPITAL BOARD

RESTRICTED USE APPRAISAL REPORT

Page 74

PROPERTY DESCRIPTION – PARCEL NO. 15 The subject property consists of an improved 0.881-acre (gross) land parcel that is located at 810 Medical Court East, Inverness, Citrus County, Florida. Specifically, the subject site is located along the north side of Medical Court East, approximately 250 feet east of Espedeco Drive. There is an estimated approximately 146 feet of frontage along the north side of Medical Court East and approximately 146 feet of frontage along the south side of West Highland Boulevard. The site contains approximately 38,392 square feet, or 0.881 acre, according to the Citrus County Property Appraiser and is irregular in shape. There are two curb cuts into the tract along the north side of Medical Court East. The site is generally level and at street grade. According to Flood Insurance Rate Map number 1203480002B, dated May 17, 1982, the subject property is not within a designated flood zone. The subject site is zoned RO / RP (Residential Professional). According to the Citrus County Property Appraiser, the assessment for 2012 is as follows: Alt Key 2640251

Market/Just $704,424

Assessed $704,424

DRAFT

Taxable $704,424

The subject property is improved with a one-story medical office building with rehabilitation facilities and swimming pool, associated site improvements and surface parking. The improvements are occupied by the Citrus Memorial Health Systems Rehabilitation Services and Gulf Coast Aquatic Center. According to the Citrus County Property Appraiser, the improvements comprise a gross building area of 7,066 square feet. In addition, there is approximately 800 square feet porte-cochere at the primary entrance. The building is constructed with concrete block and stucco veneer with glass and glass block windows along the exterior. The roof is pitched with a metal roof. The interior finish-out includes: commercial-grade carpeting or 1’ by 1’ floor tiles; painted drywall partitioning; textured ceilings; recessed or ceiling-mounted fluorescent lighting; and skylights. The improvements are not sprinklered. Interior improvements include the rehabilitation/gym area, the swimming pool, three therapy rooms, a receptionist area, a filing area, a break room and storage areas. Land improvements consist of landscaping and asphalt surface parking. The improvements were built in 1996 and have a chronological age of 17 years. Given the maintenance of the property, the effective age is estimated to be 14 years. The subject’s physical adaptability conforms to that of its competitors. Overall, the subject premises are considered to be of good quality construction. The subject improvements are in good condition, which is consistent with the chronological age of CITRUS COUNTY HOSPITAL BOARD

RESTRICTED USE APPRAISAL REPORT

Page 75

the structure and the level of maintenance. The project amenities are consistent with rehabilitation facilities in the local market. The design and layout appear to be conducive to current operations. Parcel No. 15 was purchased with Parcel No.16 on May 15, 2012 for a reported price of $1,800,000, or $130.85 per square foot of gross building area. The allocated price was $910,266, or $128.82 per square foot.

HIGHEST AND BEST USE ANALYSIS As previously discussed, in the analysis of Highest and Best Use of the land as though vacant, it is assumed that the land is vacant or can be made vacant by removal of existing improvements. The analysis of Highest and Best Use of the land as improved considers the alternative uses of an improved property. It is VMG Health’s opinion that the Highest and Best Use of the subject site, as if vacant, would be for future commercial development as permitted by zoning as demand warrants.

DRAFT

In the case of the subject property, the existing improvements are functional and constitute a substantial improvement to the subject site. The cost of demolishing the existing improvements would far exceed any increase in revenue that could be generated from an alternative use at this time. The existing improvements suffer from no apparent form or physical, functional or external obsolescence. In all respects, the improvements are assumed functional and conform well to the neighborhood.

CONCLUSION The subject site is improved with a structure that comprises a gross building area of 7,066 square feet. The building is used as a rehabilitation medical office building. The improvements contribute significantly to the value of the subject site and provide for both a return to the land and improvements. Therefore, it is our opinion that the Highest and Best Use as Improved of the subject property is for the continued use as a rehabilitation medical office building.

CITRUS COUNTY HOSPITAL BOARD

RESTRICTED USE APPRAISAL REPORT

Page 76

VALUATION In earlier sections of this Summary Appraisal Report, the three basic approaches were discussed: the Cost Approach; the Sales Comparison Approach; and the Income Approach. The appraiser analyzed all market data and considered all three traditional approaches to value. VALUE RECONCILIATION VMG Health reconciled the indicators analyzed to determine an estimate of the Fair Market Value for the subject property. Based upon the analysis of data obtained, we have formed the opinion that the Fair Market Value of the Fee Simple Estate in the subject property, subject to the definitions, certifications, and limiting conditions set forth in the attached Restricted Use Appraisal Report, as of February 6, 2013, is: EIGHT HUNDED EIGHTY THOUSAND DOLLARS $880,000

DRAFT

The estimated marketing period associated with this value estimate is twelve months, while the estimated exposure period is also twelve months. The range of the Fair Market Rent is $13.00 to $15.00 per square foot of gross building area, on a NNN basis, without concessions, on an “as is” basis. The lease term is three to five years. The annual rental rate does not include an annual CPI increase. Our report and analysis are subject to the attached statement of Assumptions and Limiting Conditions. Pertinent valuation details are located on the following pages. Additional market intelligence is maintained in our files.

CITRUS COUNTY HOSPITAL BOARD

RESTRICTED USE APPRAISAL REPORT

Page 77

Parcel No. 15 ‐ CMHF Rehabilitation Center Building Cost Development PRELIMINARY DRAFT ‐ SUBJECT TO CHANGE Inverness, Citrus County, Florida As of February 6, 2013

Building Number & Name

1 ‐ Citrus Memorial Healthcare Cente

Occupancy Number & Name Section Number & Page Construction Class & Quality Gross Building Area (Square Feet) Gross Perimeter (Linear Feet) Number of Floors & Height per Story (Feet)

341 15

Average

1

7,066 368 12

                    7,066

 

 

$123.80

Refinements ‐ Square Foot Heating, cooling, ventilating Elevator Sprinkler System Miscellaneous

Replacement Cost New (RCN) Adjusted Cost ‐ Square Foot Extended Base Cost Miscellaneous  Site Improvements Subtotal Soft Costs & Entreprenurial Profit

TOTAL

Rehabilitation /  Aquatics Center 22

C

Base Cost ‐ Square Foot

Refinements ‐ Multipliers Number of Stories Height per Story Floor Area & Perimeter Current Cost Multiplier Local Cost Multiplier Net Multiplier

2 ‐  Miscellaneous and  Land Improvements

$0.00 ‐$3.45 $0.00 $0.00 $120.35

DRAFT 1.000 1.000 0.983 1.070 1.000 1.052

5.0%

RCN RCN Rounded RCN per Square Foot

126.61 $894,626                          ‐                          ‐ $894,626 $44,731

  $             135,192                 121,067 $256,259 5.0%                   12,813

$894,626                 135,192                 121,067 $1,150,885                   57,544

$             269,072 $270,000

$1,208,429 $1,210,000 $171.24

$939,357 $940,000 $133.03

Depreciation Year Built Physical Age Effective Age Economic Life (Section 97, Page 13) Remaining Useful Life Physical Depreciation (Age/Life)

35.0%

1996 17 14 40 26 $329,000

$114,683

                443,683

0.0%

$611,000 $0

$155,317 $0

$766,317                          ‐

0.0%

$611,000 $0

$155,317 $0

$766,317                          ‐

less Economic Obsolescence

$611,000

$155,317

$766,317

Depreciated Cost per Square Foot

$610,000 $86.33

$160,000

$770,000 $108.97

RCN less Physical Depreciation Functional Obsolescence less Functional Obsolescence Economic Obsolescence

CITRUS COUNTY HOSPITAL BOARD

 

Depreciation %  Depreciation

Canopies Pool

Description

PRELIMINARY DRAFT ‐ SUBJECT TO CHANGE

   

800 sf 600

Replacement Cost New

Quantity

Unit

35.0% $              49,683

$      141,952

135,192 5% 6,760

Current Cost Local Total  Source Multiplier Multiplier Cost $57.75 1.07 1.00 $              49,434 MVS ‐ Section 15 Page 37 $         133.58 1.07 1.00                 85,758 MVS ‐ Section 66 Page 7 Unit Cost

Miscellaneous Items Pricing Support

Parcel No. 15 ‐ CMHF Rehabilitation Center

RESTRICTED USE APPRAISAL REPORT

DRAFT

CITRUS COUNTY HOSPITAL BOARD

Page 78

Paving Paving Landscaping

Type

Description

CITRUS COUNTY HOSPITAL BOARD CRN Rounded

Total Replacement Cost New (CRN)

Good quality asphalt parking lot(est) Good quality concrete parking lot(est) Landscaping

PRELIMINARY DRAFT ‐ SUBJECT TO CHANGE

Inverness, Florida As of February 6, 2013

66 66 66

MVS  Section

3 3 8

Page

20,800 800 8,033

Quantity

SF SF SF

Unit

1.04 1.04 1.04

Current

1.00 1.00 1.00

Local

Multipliers

DRAFT Depreciated Cost

Effective Age Economic Life (Section 97, Page 19) Remaining Useful Life Physical Depreciation (Age/Life) RCN less Physical Depreciation Functional Obsolescence less Functional Obsolescence Economic Obsolescence less Economic Obsolescence

$3.50 $4.50 $4.98

Unit Base  Cost

Land Improvements Cost Development

Parcel No. 15 ‐ CMHF Rehabilitation Center

0.0%

0.0%

4 8 4 50.0%

Replacement  Cost New

$70,000

$65,000 $65,000 $0 $65,000 $0 $65,000

$127,120 $130,000

$121,067 5%                   6,053

$3.64 $75,712 $4.68 $3,744 $5.18                 41,611

Unit Replacement  Cost, New

RESTRICTED USE APPRAISAL REPORT Page 79

RESTRICTED USE APPRAISAL REPORT

Page 80

Parcel No. 15 - CMHF Rehabilitation Center 801 Medical Court East Inverness, Citrus County, Florida  

COST APPROACH CONCLUSION

 

$1,210,000

TOTAL REPLACEMENT COST NEW Less Accrued Depreciation: Physical Curable

$0

Physical Incurable

443,683

Total Physical

$443,683

Functional Curable Obsolescence

$0

Functional Incurable Obsolescence

0

Total Functional Obsolescence External Obsolescence

DRAFT

0 0

TOTAL ACCRUED DEPRECIATION

$443,683

LAND IMPROVEMENTS & BUILDINGS

$766,317

PLUS LAND VALUE

$90,000

ROUNDED RCNLD

$860,000

CITRUS COUNTY HOSPITAL BOARD

RESTRICTED USE APPRAISAL REPORT

Page 81

Parcel No. 15 ‐ CMHF Rehabilitation Center Direct Capitalization Gross Building Area Market Rent

7,066 $ 14.00

Potential Gross Income Less Vacancy Effective Gross Income Less Management Total Operating Expenses Less Structural Reserves Net Operating Income Indicated Cap. Rate

$                   98,924 5% 3%

4,946 $

$

93,978

$

2,819 3,533

$

87,625

2,819

$ 0.50

9.50%

Indicated Value Less PV of Capital Expenditures Final Indicated Value Rounded

DRAFT

CITRUS COUNTY HOSPITAL BOARD

$

922,373 -

                   922,373 $                900,000

RESTRICTED USE APPRAISAL REPORT

Page 82

SUMMARY OF SALIENT FACTS – PARCEL NO. 16

Date of Appraisal:

February 6, 2013

Property Name/Location:

CMHF Gulf Coast Aquatic and Rehabilitation Center 6043 West Nordling Loop Citrus County, Florida

DRAFT

Client:

Citrus County Hospital Board

Land Size:

40,628 square feet or 0.933 acre

Improvement Size:

6,690 gross square feet

Owner of Record:

Citrus Memorial Health Foundation, Inc.

Subject Property Description: Use:

Rehabilitation Center

Fair Market Value:

$850,000

Range of Fair Market Rent:

$13.00 to $15.00 per square foot of gross building

Implicit in this rental rate estimate is a NNN basis, with the tenant being responsible for all operating costs. The lease term would be three to five years, without concessions, on an “as is” basis. The rate does not include an annual CPI increase in the base rate.

CITRUS COUNTY HOSPITAL BOARD

RESTRICTED USE APPRAISAL REPORT

Page 83

PROPERTY DESCRIPTION – PARCEL NO. 16 The subject property consists of an improved 0.933 acre (gross) land parcel that is located at 6043 West Nordling Loop, Citrus County, Florida. Specifically, the subject site is located at the northeast corner of West Nordling Loop. There is an estimated approximately 80 feet of frontage along the northeast side of West Nordling Loop. The site contains approximately 40,628 square feet, or 0.933 acre, according to the Citrus County Property Appraiser and is irregular in shape. There is a single curb cut into the tract along the northeast side of West Nordling Loop. The site is generally level and at street grade. A retaining wall borders a segment of the northeast corner of the site. According to Flood Insurance Rate Map number 120630120B, dated August 15, 1984, the subject property is not within a designated flood zone. The subject site is zoned PSO (Professional Services / Office District). According to the Citrus County Property Appraiser, the assessment for 2012 is as follows: Alt Key 3450035

Market/Just $630,084

Assessed $630,084

Taxable $630,084

DRAFT

The subject property is improved with a one-story medical office building with rehabilitation facilities and swimming pool, associated site improvements and surface parking. The improvements are occupied by the Citrus Memorial Health Systems Rehabilitation Services and Gulf Coast Aquatic Center. According to the Citrus County Property Appraiser, the improvements comprise a gross building area of 6,690 square feet. In addition, there is approximately 900 square feet porte-cochere at the primary entrance. The roof is pitched with a metal roof. The interior finish-out includes: commercial-grade carpeting or 1’ by 1’ floor tiles; painted drywall partitioning; textured ceilings; recessed or ceiling-mounted fluorescent lighting; and skylights. The improvements are not sprinklered. Interior improvements include the rehabilitation/gym area, the swimming pool, a spa, exam rooms, receptionist areas, a filing area, a break room and storage areas. Land improvements consist of landscaping and asphalt surface parking. The improvements were built in 1993 and have a chronological age of 20 years. Given the maintenance of the property, the effective age is estimated to be 14 years. The subject’s physical adaptability conforms to that of its competitors. Overall, the subject premises are considered to be of good quality construction. The subject improvements are in good condition, which is consistent with the chronological age of the structure and the level of maintenance. The project amenities are consistent with

CITRUS COUNTY HOSPITAL BOARD

RESTRICTED USE APPRAISAL REPORT

rehabilitation facilities in the local market. conducive to current operations.

Page 84

The design and layout appear to be

Parcel No. 16 was purchased with Parcel No.15 on May 15, 2012 for a reported price of $1,800,000, or $130.85 per square foot of gross building area. The allocated price was $889,734, or $132.99 per square foot.

HIGHEST AND BEST USE ANALYSIS As previously discussed, in the analysis of Highest and Best Use of the land as though vacant, it is assumed that the land is vacant or can be made vacant by removal of existing improvements. The analysis of Highest and Best Use of the land as improved considers the alternative uses of an improved property. It is VMG Health’s opinion that the Highest and Best Use of the subject site, as if vacant, would be for future commercial development as permitted by zoning as demand warrants. In the case of the subject property, the existing improvements are functional and constitute a substantial improvement to the subject site. The cost of demolishing the existing improvements would far exceed any increase in revenue that could be generated from an alternative use at this time.

DRAFT

The existing improvements suffer from no apparent form or physical, functional or external obsolescence. In all respects, the improvements are assumed functional and conform well to the neighborhood.

CONCLUSION The subject site is improved with a structure that comprises a gross building area of 6,690 square feet. The building is used as a rehabilitation medical office building. The improvements contribute significantly to the value of the subject site and provide for both a return to the land and improvements. Therefore, it is our opinion that the Highest and Best Use as Improved of the subject property is for the continued use as a rehabilitation medical office building.

CITRUS COUNTY HOSPITAL BOARD

RESTRICTED USE APPRAISAL REPORT

Page 85

VALUATION In earlier sections of this Summary Appraisal Report, the three basic approaches were discussed: the Cost Approach; the Sales Comparison Approach; and the Income Approach. The appraiser analyzed all market data and considered all three traditional approaches to value. VALUE RECONCILIATION VMG Health reconciled the indicators analyzed to determine an estimate of the Fair Market Value for the subject property. Based upon the analysis of data obtained, we have formed the opinion that the Fair Market Value of the Fee Simple Estate in the subject property, subject to the definitions, certifications, and limiting conditions set forth in the attached Restricted Use Appraisal Report, as of February 6, 2013, is: EIGHT HUNDRED FIFTY THOUSAND DOLLARS $850,000

DRAFT

The estimated marketing period associated with this value estimate is twelve months, while the estimated exposure period is also twelve months. The range of the Fair Market Rent is $13.00 to $15.00 per square foot of gross building area, on a NNN basis, without concessions, on an “as is” basis. The lease term is three to five years. The annual rental rate does not include an annual CPI increase. Our report and analysis are subject to the attached statement of Assumptions and Limiting Conditions. Pertinent valuation details are located on the following pages. Additional market intelligence is maintained in our files.

CITRUS COUNTY HOSPITAL BOARD

RESTRICTED USE APPRAISAL REPORT

Page 86

Parcel No. 16 ‐ CMHF Rehabilitation Center Building Cost Development PRELIMINARY DRAFT ‐ SUBJECT TO CHANGE Crystal River, Citrus County, Florida As of February 6, 2013

Building Number & Name

1 ‐ Citrus Memorial Healthcare Cente

Occupancy Number & Name Section Number & Page Construction Class & Quality Gross Building Area (Square Feet) Gross Perimeter (Linear Feet) Number of Floors & Height per Story (Feet)

341 15

Average

1

6,690 344 12

                    6,690

 

 

$123.80

Refinements ‐ Square Foot Heating, cooling, ventilating Elevator Sprinkler System Miscellaneous

Replacement Cost New (RCN) Adjusted Cost ‐ Square Foot Extended Base Cost Miscellaneous  Site Improvements Subtotal Soft Costs & Entreprenurial Profit

TOTAL

Rehabilitation /  Aquatics Center 22

C

Base Cost ‐ Square Foot

Refinements ‐ Multipliers Number of Stories Height per Story Floor Area & Perimeter Current Cost Multiplier Local Cost Multiplier Net Multiplier

2 ‐  Miscellaneous and  Land Improvements

$0.00 ‐$3.45 $0.00 $0.00 $120.35

DRAFT 1.000 1.000 0.981 1.070 1.000 1.050

5.0%

RCN RCN Rounded RCN per Square Foot

126.37 $845,415                          ‐                          ‐ $845,415 $42,271

  $             130,674                 146,653 $277,327 5.0%                   13,866

$845,415                 130,674                 146,653 $1,122,742                   56,138

$             291,193 $290,000

$1,178,879 $1,180,000 $176.38

$887,686 $890,000 $133.03

Depreciation Year Built Physical Age Effective Age Economic Life (Section 97, Page 13) Remaining Useful Life Physical Depreciation (Age/Life)

35.0%

1993 20 14 40 26 $311,500

$125,023

                436,523

0.0%

$578,500 $0

$164,977 $0

$743,477                          ‐

0.0%

$578,500 $0

$164,977 $0

$743,477                          ‐

less Economic Obsolescence

$578,500

$164,977

$743,477

Depreciated Cost per Square Foot

$580,000 $86.70

$160,000

$740,000 $110.61

RCN less Physical Depreciation Functional Obsolescence less Functional Obsolescence Economic Obsolescence

CITRUS COUNTY HOSPITAL BOARD

 

Depreciation %  Depreciation

Canopies Pool

Description

PRELIMINARY DRAFT ‐ SUBJECT TO CHANGE

   

900 sf 600

Replacement Cost New

Quantity

Unit

35.0% $              48,023

$      137,208

130,674 5% 6,534

Current Cost Local Total  Source Multiplier Multiplier Cost $57.75 1.07 1.00 $              55,613 MVS ‐ Section 15 Page 37 $         116.92 1.07 1.00                 75,061 MVS ‐ Section 66 Page 7 Unit Cost

Miscellaneous Items Pricing Support

Parcel No. 16 ‐ CMHF Rehabilitation Center

RESTRICTED USE APPRAISAL REPORT

DRAFT

CITRUS COUNTY HOSPITAL BOARD

Page 87

Paving Paving Wall Landscaping

Type

Description

CITRUS COUNTY HOSPITAL BOARD CRN Rounded

Total Replacement Cost New (CRN)

Good quality asphalt parking lot(est) Good quality concrete parking lot(est) Retaining wall Landscaping

PRELIMINARY DRAFT ‐ SUBJECT TO CHANGE

Crystal River, Florida As of February 6, 2013

66 66 51 66

MVS  Section

3 3 3 8

Page

13,800 900 600 16,500

Quantity

SF

SF SF

Unit

1.04 1.04 1.04 1.04

Current

1.00 1.00 1.00 1.00

Local

Multipliers

DRAFT Depreciated Cost

Effective Age Economic Life (Section 97, Page 19) Remaining Useful Life Physical Depreciation (Age/Life) RCN less Physical Depreciation Functional Obsolescence less Functional Obsolescence Economic Obsolescence less Economic Obsolescence

$3.50 $4.50 $10.80 $4.98

Unit Base  Cost

Land Improvements Cost Development

Parcel No. 16 ‐ CMHF Rehabilitation Center

Replacement  Cost New

0.0%

0.0%

4 8 4 50.0%

$80,000

$77,000 $77,000 $0 $77,000 $0 $77,000

$153,986 $154,000

$146,653 5%                   7,333

$3.64 $50,232 $4.68 $4,212 $11.23 $6,739 $5.18                 85,470

Unit Replacement  Cost, New

RESTRICTED USE APPRAISAL REPORT Page 88

RESTRICTED USE APPRAISAL REPORT

Page 89

Parcel No. 16 - CMHF Rehabilitation Center 6043 West Nordling Loop Crystal River, Citrus County, Florida  

COST APPROACH CONCLUSION

 

$1,180,000

TOTAL REPLACEMENT COST NEW Less Accrued Depreciation: Physical Curable

$0

Physical Incurable

436,523

Total Physical

$436,523

Functional Curable Obsolescence

$0

Functional Incurable Obsolescence

0

Total Functional Obsolescence External Obsolescence

DRAFT

0 0

TOTAL ACCRUED DEPRECIATION

$436,523

LAND IMPROVEMENTS & BUILDINGS

$743,477

PLUS LAND VALUE

$60,000

ROUNDED RCNLD

$800,000

CITRUS COUNTY HOSPITAL BOARD

RESTRICTED USE APPRAISAL REPORT

Page 90

Parcel No. 16 ‐ CMHF Rehabilitation Center Direct Capitalization Gross Building Area Market Rent

6,690 $ 14.00

Potential Gross Income Less Vacancy Effective Gross Income Less Management Total Operating Expenses Less Structural Reserves Net Operating Income Indicated Cap. Rate

$                   93,660 5% 3%

4,683 $

$

88,977

$

2,669 3,345

$

82,963

2,669

$ 0.50

9.50%

Indicated Value Less PV of Capital Expenditures Final Indicated Value Rounded

DRAFT

CITRUS COUNTY HOSPITAL BOARD

$

873,291 -

                   873,291 $                900,000

RESTRICTED USE APPRAISAL REPORT

Page 91

SUMMARY OF SALIENT FACTS – PARCEL NO. 21

Date of Appraisal:

February 5, 2013

Property Name/Location:

CMHF-Annex / Wound Care & Hyperbaric Center 131 South Citrus Avenue Inverness, Citrus County, Florida

DRAFT

Client:

Citrus County Hospital Board

Land Size:

170,077 square feet or 3.904 acres

Improvement Size:

66,443 gross square feet in three buildings

Subject Property Description: Use:

Medical Office Building, Wound Care and Hyperbaric Center

Fair Market Value:

$9,000,000

Range of Fair Market Rent:

$13.00 to $15.00 per square foot of gross building area basis

Implicit in this rental rate estimate is a NNN basis, with the tenant being responsible for all operating costs. The lease term would be a minimum of five years, without concessions, on an “as is” basis. The rate also does not include an annual CPI increase in the base rate.

CITRUS COUNTY HOSPITAL BOARD

RESTRICTED USE APPRAISAL REPORT

Page 92

PROPERTY DESCRIPTION – PARCEL NO. 21 The subject property consists of an improved 3.904 acres (gross) land parcel that is located at 131 South Citrus Avenue, Inverness, Citrus County, Florida. The property is located at the southwest corner of West Main Street and South Osceola Avenue. Specifically, the subject site consists of the city block bounded by West Main Street on the north, West Grace Street on the south, South Citrus Avenue on the west and South Osceola Avenue on the east, with exception of the 0.545 acre corner tract at the southeast corner of West Main Street and South Citrus Avenue at the northwest quadrant of the block. The site has the following frontages; approximately 160 feet of frontage along the south side of West Main Street; approximately 597 feet of frontage along the west side of South Osceola Avenue; approximately 325 feet of frontage along the north side of West Grace Street; and approximately 450 feet of frontage along the east side of South Citrus Avenue. The site contains approximately 170,077 square feet, or 3.904 acres, according to the Citrus County Property Appraiser and is irregular in shape. There are the following curb cuts to the site: two curb cuts along the west side of South Osceola Avenue; one curb cut along the north side of West Grace Street; and two curb cuts along the east side of South Citrus Avenue. The site is generally level and at street grade. According to Flood Insurance Rate Map number 1203480002B, dated May 17, 1982, the subject property is not within a designated flood zone. The subject site is zoned P/SP GU (Government Use) and RO / RP (Residential Professional).

DRAFT

The subject property is improved with a three-story medical office building (Annex / Wound Care and Hyperbaric Center) at the northeast corner of South Citrus Avenue and West Grace Street, the Office / Auditorium at the northwest corner of West Grace Street and South Osceola Avenue and the former church building (currently used as storage) at the southwest corner of West Main Street and South Osceola Avenue, as well as associated site improvements and surface parking. It is noted that the existing church building is suffering from advanced depreciation and is currently used for storage and maintenance purposes. Therefore, it is considered to be an interim use and does not add contributory value to the property as a whole. According to the Citrus County Property Appraiser, the improvements comprise a gross building area of 66,443 square feet in the three buildings (excludes church and maintenance facilities). Building Annex / Wound Care and Hyperbaric Center Office / Auditorium – East half Office / Auditorium – West half Total CITRUS COUNTY HOSPITAL BOARD

Area (SF) 55,512 5,739 5,192 66,443

RESTRICTED USE APPRAISAL REPORT

Page 93

The Annex / Wound Care and Hyperbaric Center building at the northwest corner of South Citrus Avenue and West Grace Street has a steel-frame construction with stucco veneer and flat roof with metal pitched roofs for accent; the remaining buildings are built with concrete block and stucco veneer with pitched roofs and composite shingles. The Annex / Wound Care and Hyperbaric Center is a three-story structure. On the first floor are the conference room, diagnostic imaging center, laboratory services and cardiopulmonary rehabilitation. On the second floor are medical offices; on the third floor are medical and business offices as well as the wound care and hyperbaric center. The interior finish-out includes: commercial-grade carpeting, faux-wood flooring or 1’ by 1’ floor tiles; painted drywall partitioning; 2’ by 2’ ceiling tiles; and recessed fluorescent lighting. The Office/Auditorium facility at the northwest corner of West Grace Street and South Osceola Avenue is a former church facility which includes an auditorium that functions as meeting space. The office portion includes a basement for additional space. The former church building at the southwest corner of West Main Street and South Osceola Avenue is currently utilized as storage space and for campus maintenance operations.

DRAFT

The Annex / Wound Care and Hyperbaric Center is sprinklered; the remaining buildings are not. Land improvements consist of landscaping and asphalt surface parking. According to the Citrus County Property Appraiser, the assessment for 2012 is as follows. The property is tax exempt. Alt Key 2907908

Market/Just $9,444,686

Assessed $9,444,686

Taxable $0

The improvements chronological age and effective age are presented as follows. The former church building is excluded from this analysis. Building Annex / Wound Care and Hyperbaric Center Office / Auditorium – East half Office / Auditorium – West half

CITRUS COUNTY HOSPITAL BOARD

Year Built

Chronological Age (Yrs.)

Effective Age (Yrs.)

2001 1968 1970

12 45 43

12 25 25

RESTRICTED USE APPRAISAL REPORT

Page 94

With regard to the Annex / Wound Care and Hyperbaric Center, the subject’s physical adaptability conforms to that of its competitors. Overall, the Annex / Wound Care and Hyperbaric Center is considered to be of average quality construction. The Annex / Wound Care and Hyperbaric Center subject improvements are in good condition, which is consistent with the chronological age of the structure and the level of maintenance. The project amenities are consistent with similar uses in the local market. The design and layout appear to be conducive to current operations. With regard to the Office / Auditorium, the subject’s physical adaptability conforms to that of its competitors. Overall, the subject premises are considered to be of average quality construction. The subject improvements are in average condition, which is consistent with the chronological age of the structure and the level of maintenance. The project amenities are consistent with medical office and general meeting uses in the local market. The design and layout appear to be conducive to current operations. With regard to the former church facilities, the subject is used as storage. It is reported the conversion from storage to office, meeting or religious space is cost prohibitive. Overall, the subject premises are considered to be of average quality construction. The subject improvements are in poor condition, which is consistent with the current use and the level of maintenance.

DRAFT

HIGHEST AND BEST USE ANALYSIS

As previously discussed, in the analysis of Highest and Best Use of the land as though vacant, it is assumed that the land is vacant or can be made vacant by removal of existing improvements. The analysis of Highest and Best Use of the land as improved considers the alternative uses of an improved property. It is VMG Health’s opinion that the Highest and Best Use of the subject site, as if vacant, would be for future commercial development as permitted by zoning as demand warrants. In the case of the subject property, the existing improvements are functional and constitute a substantial improvement to the subject site. The cost of demolishing the existing improvements would far exceed any increase in revenue that could be generated from an alternative use at this time. The existing improvements suffer from no apparent form or physical, functional or external obsolescence. In all respects, the improvements are assumed functional and conform well to the neighborhood.

CITRUS COUNTY HOSPITAL BOARD

RESTRICTED USE APPRAISAL REPORT

Page 95

CONCLUSION The subject site is improved with structures that comprise a gross building area of 66,443 square feet. The building is used as a medical office building and as an office and auditorium. There are also church buildings used as storage, which are not included in gross building area. It is reported the conversion from storage to office, meeting or religious space is cost prohibitive. The subject improvements are in poor condition, which is consistent with the current use and the level of maintenance. For purpose of this analysis, the former church is considered an interim use, to be razed as demand warrants. The interim use value offsets the demolition costs; therefore the buildings do not add value to the site. The adjusted gross building area is 66,443 square feet. The improvements (medical office and office / auditorium) contribute significantly to the value of the subject site and provide for both a return to the land and improvements. Therefore, it is our opinion that the Highest and Best Use as Improved of the subject property is for the continued use as a medical office building and office / auditorium building.

VALUATION

DRAFT

In earlier sections of this Summary Appraisal Report, the three basic approaches were discussed: the Cost Approach; the Sales Comparison Approach; and the Income Approach. The appraiser analyzed all market data and considered all three traditional approaches to value.

CITRUS COUNTY HOSPITAL BOARD

RESTRICTED USE APPRAISAL REPORT

Page 96

VALUE RECONCILIATION VMG Health reconciled the indicators analyzed to determine an estimate of the Fair Market Value for the subject premises. Based upon the analysis of data obtained, we have formed the opinion that the Fair Market Value of the Fee Simple Estate in the subject property, subject to the definitions, certifications, and limiting conditions set forth in the attached Restricted Use Appraisal Report, as of February 6, 2013, is: NINE MILLION DOLLARS $9,000,000 The estimated marketing period associated with this value estimate is twelve months, while the estimated exposure period is also twelve months. The range of fair market rent is calculated as follows:  



The range of fair market rent for the medical office building on a per net rentable area is $12.00 to $14.00. The gross to Net Rentable factor for building is estimated by the appraiser to be 92% with the atrium. The adjusted FMR per square foot of gross building area is $11.00 to $13.00. The imaging/diagnostic area on the first floor is approximately 18% of the building gross building area. The incremental cost is $86.76 per square foot for that particular space ($249.02 less $162.26) or $17.35 allocated over a five-year term. The additional cost for the building is $3.12 ($17.35 times 18%), or $3.00 per square foot on a gross basis, rounded. The adjusted range of fair market rent is $14.00 to $16.00 per square foot on a gross building area basis.

DRAFT

The range of the Fair Market Rent, including both buildings is calculated as follows, on a gross building area basis. Building Annex Office / Auditorium Total Rounded

SF (Gross) 55,512

% 83.5%

10,931 66,443

16.5% 100.0%

CITRUS COUNTY HOSPITAL BOARD

Range of FMR $14.00 to $16.00 $7.00 to $9.00

Adjusted $ $11.69 to $13.36 $1.16 to $1.49 $12.85 to $14.85 $13.00 to $15.00

RESTRICTED USE APPRAISAL REPORT

Page 97

The range of the Fair Market Rent, including both buildings, is $13.00 to $15.00 per square foot of gross building area, on a NNN basis, without concessions, on an “as is” basis. The lease term is a minimum of five years. The annual rental rate does not include an annual CPI increase. Our report and analysis are subject to the attached statement of Assumptions and Limiting Conditions. Pertinent valuation details are located on the following pages. Additional market intelligence is maintained in our files.

DRAFT

CITRUS COUNTY HOSPITAL BOARD

RESTRICTED USE APPRAISAL REPORT

Page 98

Parcel No. 21 ‐ Annex / Wound Care & Hyperbaric Center Building Cost Development PRELIMINARY DRAFT ‐ SUBJECT TO CHANGE Inverness, Citrus County, Florida As of February 6, 2013

Building Number & Name

1 ‐ Annex / Wound Care & Hyperb2 ‐ Office

Occupancy Number & Name Section Number & Page Construction Class & Quality Gross Building Area (Square Feet) Gross Perimeter (Linear Feet) Number of Floors & Height per Story (Feet)

431/341 15/15

A

Average

3

55,512 558 12

 

341 15

Refinements ‐ Square Foot Heating, cooling, ventilating Elevator Sprinkler System Miscellaneous Refinements ‐ Multipliers Number of Stories Height per Story Floor Area & Perimeter Current Cost Multiplier Local Cost Multiplier Net Multiplier

5.0%

RCN RCN Rounded

Office 22

C

Average

1

5,739 390 12

249.02*.1+162.26*.9

Base Cost ‐ Square Foot

Replacement Cost New (RCN) Adjusted Cost ‐ Square Foot Extended Base Cost Miscellaneous  Site Improvements Subtotal Soft Costs & Entreprenurial Profit

Annex / Wound  Care &  Hyperbaric  Center 25/22

4 ‐ Miscellaneous and  Land Improvements

3 ‐ Auditorium

431 15

Auditorium 25

A

Good

1

123.8*0.61+109.96*0.39

5,192 516 12

$84.15

$102.88

$0.00 $0.00 $3.00 $0.00 $180.68

$0.00 ‐$1.28 $0.00 $0.00 $82.86

$0.00 ‐$2.10 $0.00 $0.00 $100.78

1.000 1.000 0.924 1.050 0.990 0.960

1.000 1.000 1.022 1.070 1.000 1.094

1.000 1.000 0.957 1.070 1.000 1.024

DRAFT 5.0%

90.65 $520,240                          ‐                          ‐ $520,240 $26,012

                  66,443

123.8*0.6+0.4*69.93

$177.68

173.46 $9,629,112                          ‐                          ‐ $9,629,112 $481,456

TOTAL

5.0%

103.2 $535,814                          ‐                          ‐ $535,814 $26,791

  $             146,356                 455,935 $602,291 5.0%                   30,115

$10,685,166                 146,356                 455,935 $11,287,457                 564,374

$             632,406 $630,000

$11,851,831 $11,850,000

$10,110,568 $10,110,000

$546,252 $550,000

$562,605 $560,000

$182.12

$95.84

$107.86

26.7%

2001 12 12 45 33 $2,696,000

62.5%

1968 45 25 40 15 $343,750

62.5%

1970 42 25 40 15 $350,000

$286,427

            3,676,177

0.0%

$7,414,000 $0

0.0%

$206,250 $0

0.0%

$210,000 $0

$343,573 $0

$8,173,823                        ‐

0.0%

$7,414,000 $0

0.0%

$206,250 $0

0.0%

$210,000 $0

$343,573 $0

$8,173,823                        ‐

RCN per Square Foot

$178.35

Depreciation Year Built Physical Age Effective Age Economic Life (Section 97, Page 13) Remaining Useful Life Physical Depreciation (Age/Life) RCN less Physical Depreciation Functional Obsolescence less Functional Obsolescence Economic Obsolescence

 

less Economic Obsolescence

$7,414,000

$206,250

$210,000

$343,573

$8,173,823

Depreciated Cost per Square Foot

$7,410,000 $133.48

$210,000 $36.59

$210,000 $40.45

$340,000

$8,170,000 $122.96

CITRUS COUNTY HOSPITAL BOARD

Depreciation %  Depreciation

Canopies

Description

PRELIMINARY DRAFT ‐ SUBJECT TO CHANGE

   

2,438 sf

Replacement Cost New

Quantity

Unit

30.2% $              46,427

$      153,674

Current Cost Local Total  Source Multiplier Multiplier Cost $57.75 1.05 0.99 $            146,356 MVS ‐ Section 15 Page 37 5% 7,318

Unit Cost

Miscellaneous Items Pricing Support

Parcel No. 21 ‐ Annex / Wound Care & Hyperbaric Center

RESTRICTED USE APPRAISAL REPORT

DRAFT

CITRUS COUNTY HOSPITAL BOARD

Page 99

Paving Paving Landscaping Lighting

Type

Description

CITRUS COUNTY HOSPITAL BOARD

CRN Rounded

Total Replacement Cost New (CRN)

Good quality asphalt parking lot(est) Good quality concrete parking lot(est) Landscaping Lighting

PRELIMINARY DRAFT ‐ SUBJECT TO CHANGE

Inverness, Florida As of February 6, 2013

66 66 66 66

MVS  Section

3 3 8 1

Page

86,580 2,550 38,500 15

Quantity

SF SF SF Units

Unit

1.04 1.04 1.04 1.04

Current

1.00 1.00 1.00 1.00

Local

Multipliers

DRAFT Depreciated Cost

Effective Age Economic Life (Section 97, Page 19) Remaining Useful Life Physical Depreciation (Age/Life) RCN less Physical Depreciation Functional Obsolescence less Functional Obsolescence Economic Obsolescence less Economic Obsolescence

$3.50 $4.50 $1.96 $3,225

Unit Base  Cost

Land Improvements Cost Development

Parcel No. 21 ‐ Annex / Wound Care & Hyperbaric Center

Replacement  Cost New

0.0%

0.0%

4 8 4 50.0%

$240,000

$240,000 $240,000 $0 $240,000 $0 $240,000

$478,732 $480,000

$455,935 5%                 22,797

$3.64 $315,151 $4.68 $11,934 $2.04                 78,540 $3,354.00                 50,310

Unit Replacement  Cost, New

RESTRICTED USE APPRAISAL REPORT Page 100

RESTRICTED USE APPRAISAL REPORT

Page 101

Parcel No. 21 - Annex / Wound Care & Hyperbaric Center 131 South Citrus Avenue Inverness, Citrus County, Florida  

COST APPROACH CONCLUSION

 

$11,850,000

TOTAL REPLACEMENT COST NEW Less Accrued Depreciation: Physical Curable

$0

Physical Incurable

3,676,177

Total Physical

$3,676,177

Functional Curable Obsolescence

$0

Functional Incurable Obsolescence

0

Total Functional Obsolescence External Obsolescence

DRAFT

0 0

TOTAL ACCRUED DEPRECIATION

$3,676,177

LAND IMPROVEMENTS & BUILDINGS

$8,173,823

PLUS LAND VALUE

$770,000

ROUNDED RCNLD

$8,900,000

CITRUS COUNTY HOSPITAL BOARD

RESTRICTED USE APPRAISAL REPORT

Page 102

Parcel No. 21 ‐ Annex / Wound Care & Hyperbaric Center Direct Capitalization Gross Building Area Market Rent

66,443 $14.00

Potential Gross Income Less Vacancy Effective Gross Income Less Management Total Operating Expenses Less Structural Reserves Net Operating Income Indicated Cap. Rate Indicated Value Add Excess Land Final Indicated Value Rounded Rounded, PSF

$                930,202 5% 3%

46,510 $

883,692

$

26,511 33,222

$

823,960

$ 26,511

$ 0.50

9.00% $

DRAFT

CITRUS COUNTY HOSPITAL BOARD

9,155,107 120,000

               9,275,107 $             9,300,000 $                   139.97

RESTRICTED USE APPRAISAL REPORT

Page 103

SUMMARY OF SALIENT FACTS – PARCEL NO. 22

Date of Appraisal:

February 6, 2013

Property Name/Location:

CMHF (Parking / Other Building) 108 South Seminole Avenue Inverness, Citrus County, Florida

Client:

DRAFT

Citrus County Hospital Board

Land Size:

20,692 square feet or 0.475 acre

Improvement Size:

1,584 gross square feet (no contributory value)

Owner of Record:

Citrus Memorial Health Foundation, Inc.

Subject Property Description: Use:

Medical Office Building

Fair Market Value:

$100,000

CITRUS COUNTY HOSPITAL BOARD

RESTRICTED USE APPRAISAL REPORT

Page 104

PROPERTY DESCRIPTION – PARCEL NO. 22 The subject property consists of an improved 0.475 acre (gross) land parcel that is located at 108 South Seminole Avenue, Inverness, Citrus County, Florida. Specifically, the subject site is located along the west side of South Seminole Avenue, approximately 105 feet south of West Main Street. There is an approximately 140 feet of frontage along the west side of South Seminole Avenue. The site contains approximately 20,692 square feet, or 0.475 acre, according to the Citrus County Property Appraiser and is irregular in shape. The site has a single curb cut into the tract along South Seminole Avenue. The site is generally level and at street grade. According to Flood Insurance Rate Map number 1203480002B, dated May 17, 1982, the subject property is not within a designated flood zone. The subject site is zoned CBD (Central Business District) and RO / RP (Residential Professional). The subject property is improved with a one-story concrete block structure that is currently vacant. According to the Citrus County Property Appraiser, the improvements comprise a gross building area of 1,584 square feet; however, visual inspection indicates the building is smaller. The existing improvements do not contribute to the value of the site. Land improvements consist of asphalt surface parking, which are minimal, and do not contribute to the value of the site.

DRAFT

According to the Citrus County Property Appraiser, the assessment for 2012 is as follows: Alt Key 2910607

Market/Just $164,073

Assessed $164,073

Taxable $0

HIGHEST AND BEST USE ANALYSIS As previously discussed, in the analysis of Highest and Best Use of the land as though vacant, it is assumed that the land is vacant or can be made vacant by removal of existing improvements. The analysis of Highest and Best Use of the land as improved considers the alternative uses of an improved property.

CONCLUSION It is VMG Health’s opinion that the Highest and Best Use of the subject site, as if vacant, would be for future commercial development as permitted by zoning as demand warrants.

CITRUS COUNTY HOSPITAL BOARD

RESTRICTED USE APPRAISAL REPORT

Page 105

VALUATION In earlier sections of this Summary Appraisal Report, the three basic approaches were discussed: the Cost Approach; the Sales Comparison Approach; and the Income Approach. The appraiser analyzed all market data and considered all three traditional approaches to value. However, as the subject property essentially represents land value, only the Sales Comparison Approach to value was utilized. VALUE RECONCILIATION VMG Health reconciled the indicators analyzed to determine an estimate of the Fair Market Value for the subject property. Based upon the analysis of data obtained, we have formed the opinion that the Fair Market Value of the Fee Simple Estate in the subject property, subject to the definitions, certifications, and limiting conditions set forth in the attached Restricted Use Appraisal Report, as of February 6, 2013, is: ONE HUNDRED THOUSAND DOLLARS $100,000

DRAFT

The estimated marketing period associated with this value estimate is twelve months, while the estimated exposure period is also twelve months.

CITRUS COUNTY HOSPITAL BOARD

RESTRICTED USE APPRAISAL REPORT

Page 106

SUMMARY OF SALIENT FACTS – PARCEL NO. 25

Date of Appraisal:

February 6, 2013

Property Name/Location:

CMHF (Parking / Other Building) 206 South Seminole Avenue Inverness, Citrus County, Florida

Client:

DRAFT

Citrus County Hospital Board

Land Size:

81,250 square feet or 1.865 acres

Improvement Size:

933 gross square feet (no contributory value)

Owner of Record:

Citrus Memorial Health Foundation, Inc.

Subject Property Description: Use:

Medical Office Building

Fair Market Value:

$420,000

CITRUS COUNTY HOSPITAL BOARD

RESTRICTED USE APPRAISAL REPORT

Page 107

PROPERTY DESCRIPTION – PARCEL NO. 25 The subject property consists of an improved 1.865 acres (gross) land parcel that is located at 206 South Seminole Avenue, Inverness, Citrus County, Florida. Specifically, the subje/ct site is the northern portion of the city block bounded by West Grace Street on the north, South Osceola Avenue on the west, South Seminole Avenue on the east and West Highland Boulevard on the south. There is an estimated approximately 325 feet of frontage along the south side of West Grace Street, approximately 200 feet along the east side of South Osceola Avenue and approximately 295 feet along the west side of South Seminole Avenue. The site contains approximately 81,250 square feet, or 1.865 acres, according to the Citrus County Property Appraiser and is irregular in shape. There are two curb cuts into the tract along the south side of West Grace Street and one along the west side of South Pine Avenue. The site is generally level and at street grade. According to Flood Insurance Rate Map number 1203480002B, dated May 17, 1982, the subject property is not within a designated flood zone. The subject site is zoned RO / RP (Residential Professional).

DRAFT

According to the Citrus County Property Appraiser, the assessment for 2012 is as follows: Alt Key 2907916

Market/Just $494,448

Assessed $494,448

Taxable $0

The subject property is improved with a one-story residential structure and surface parking. The improvements contain a gross building area of 933 square feet according to the Citrus County Property Appraiser, were constructed in 1968 and contribute minimal value to the site, other than as an interim use for residential occupancy for the short term. Land improvements consist of landscaping and asphalt surface parking (approximately 30,000 square feet, based on an estimate by the appraiser). The land improvements contribute value to the site.

HIGHEST AND BEST USE ANALYSIS As previously discussed, in the analysis of Highest and Best Use of the land as though vacant, it is assumed that the land is vacant or can be made vacant by removal of

CITRUS COUNTY HOSPITAL BOARD

RESTRICTED USE APPRAISAL REPORT

Page 108

existing improvements. The analysis of Highest and Best Use of the land as improved considers the alternative uses of an improved property.

CONCLUSION It is VMG Health’s opinion that the Highest and Best Use of the subject site, as if vacant, would be for future commercial development as permitted by zoning as demand warrants

VALUATION In earlier sections of this Summary Appraisal Report, the three basic approaches were discussed: the Cost Approach; the Sales Comparison Approach; and the Income Approach. The appraiser analyzed all market data and considered all three traditional approaches to value. As this property essentially represents land value, the Sales Comparison Approach to value was utilized. The contributory value of the site improvements was derived by application of the Cost Approach. VALUE RECONCILIATION

DRAFT

VMG Health reconciled the indicators analyzed to determine an estimate of the Fair Market Value for the subject premises. Based upon the analysis of data obtained, we have formed the opinion that the Fair Market Value of the Fee Simple Estate in the subject property, subject to the definitions, certifications, and limiting conditions set forth in the attached Restricted Use Appraisal Report, as of February 6, 2013, is: FOUR HUNDRED TWENTY THOUSAND DOLLARS $420,000 The estimated marketing period associated with this value estimate is twelve months, while the estimated exposure period is also twelve months. Our report and analysis are subject to the attached statement of Assumptions and Limiting Conditions. Pertinent valuation details are located on the following pages. Additional market intelligence is maintained in our files.

CITRUS COUNTY HOSPITAL BOARD

RESTRICTED USE APPRAISAL REPORT

Page 109

ASSUMPTIONS & LIMITING CONDITIONS This valuation by Value Management Group, LLC d/b/a VMG Health (“VMG”) is subject to and governed by the following Assumptions and Limiting Conditions: 1. Any legal description reported herein is assumed to be accurate. Any sketches, surveys, plats, photographs, drawings or other exhibits are included only to assist the intended user to better understand and visualize the subject property and assume no responsibility in connection with such matters. 2. The appraiser(s) have not conducted any engineering or architectural surveys in connection with this appraisal assignment. Information reported pertaining to dimensions, sizes, and areas is either based on measurements taken by the appraiser(s) or the staff or was obtained or taken from referenced sources and is considered reliable. No responsibility is assumed for the costs or preparation or for arranging geotechnical engineering, architectural, or other types of studies, surveys, or inspections that require the expertise of a qualified professional. 3. No responsibility is assumed for matters legal in nature. Title is assumed to be good and marketable and in fee simple unless discussed otherwise in the report. The property is considered to be free and clear of existing liens, easements, restrictions, and encumbrances, except as noted. 4. Unless otherwise noted herein, it is assumed there are no encroachments or violations of any zoning or other regulations affecting the subject property and the utilization of the land and improvements is within the boundaries or property lines of the property described. 5. VMG assumes there are no private deed restrictions affecting the property which would limit the use of the subject property in any way. 6. It is assumed the subject property is not adversely affected by the potential of floods. 7. It is assumed all water and sewer facilities (existing and proposed) are or will be in good working order and are or will be of sufficient size to adequately serve the existing and/or any proposed buildings. 8. Unless otherwise noted within the report, the depiction of the physical condition of the improvements described herein is based on as on-site visual observation. No liability is assumed for the soundness of structural members since no engineering tests were conducted. No liability is assumed for the condition of mechanical equipment, plumbing or electrical components, as complete tests were not made. No responsibility is assumed for hidden, unapparent or masked property conditions or characteristics that were not clearly apparent during our on-site observation. 9. If building improvements are present on the site, no significant evidence of termite damage or infestation was observed during our on-site visual observation, unless so noted on the report. No termite inspection report was available, unless so noted in the report. No responsibility is assumed for hidden damages or infestation. 10. Any proposed or incomplete improvements included in this report are assumed to be satisfactory completed in a workmanlike manner or will be thus completed within a reasonable length of time according to plans and specifications.

DRAFT

CITRUS COUNTY HOSPITAL BOARD

RESTRICTED USE APPRAISAL REPORT

Page 110

11. No responsibility is assumed for hidden defects of for conformity to specific governmental requirements, such as fire, building, safety, earthquake, or occupancy codes, except where specific professional or governmental inspections have been completed and reported in the appraisal report. 12. The property is assumed to be under financially sound, competent and aggressive ownership. 13. The appraiser(s) assume no responsibility for any changes in economic or physical conditions which occur following the effective date of this report that would influence or potentially affect the analyses, opinions, or conclusions in the report. Any subsequent changes are beyond the scope of the report. 14. The value estimates reported herein apply to the entire property. Any proration or division of the total into fractional interests will invalidate the value estimates, unless such a proration or division of interests is set forth in the report. 15. Any division of the land and improvement values estimated herein is applicable only under the program of utilization shown. These separate valuations are invalidated by any other application. 16. Unless otherwise noted in the report, only the real property is considered, so no consideration is given to the value of personal property or equipment located on the premises or the costs or moving or relocating such personal property or equipment. 17. Unless otherwise stated, it is assumed ownership includes subsurface oil, gas, and other mineral rights. No opinion is expressed as to whether the property is subject to surface entry for their exploration or removal. The contributing value, if any, of these rights has not been separately identified. 18. Any projections of income and expenses, including the reversion at time of resale, are not predictions of the future. Rather, they are our best estimate of current market thinking of what future trends will be. No warranty or representation is made that these projections will materialize. The real estate market is constantly fluctuating and changing. It is not the task of the appraiser(s) to estimate the conditions of a future real estate market, but rather to reflect what the investment community envisions for the future in terms of expectations of growth in rental rates, expenses, and supply and demand. 19. Unless subsoil opinions based upon engineering core borings were furnished, it is assumed there are no subsoil defects present, which would impair development of the land to its maximum permitted use or would render it more or less valuable. No responsibility is assumed for such conditions or for engineering which may be required to discover them. 20. VMG Health representatives are not experts in determining the presence or absence of hazardous substances, defined as all hazardous or toxic materials, wastes, pollutants or contaminants (including, but not limited to, asbestos, PCB, UFFI, or other raw materials or chemicals) used in construction or otherwise present on the property. We assume no responsibility for the studies or analyses which would be required to determine the presence or absence of such substances or for loss as a result of the presence of such substances. Appraiser(s) are not qualified to detect such substances. The client is urged to retain an expert in this field.

DRAFT

CITRUS COUNTY HOSPITAL BOARD

RESTRICTED USE APPRAISAL REPORT

Page 111

21. VMG is not experts in determining the habitat for protected or endangered species that may be present on the property. We assume no responsibility for the studies or analyses which would be required to determine the presence or absence of such species or for loss as a result of the presence of such species. 22. No environmental impact studies were either requested or made in conjunction with this analysis. The appraiser(s) hereby reserve the right to alter, amend, revise, or rescind any of the value opinions based upon any subsequent environmental impact studies, research and investigation. 23. The appraisal is based on the premise that there is full compliance with all applicable federal, state, and local environmental regulations and laws unless otherwise stated in the report; further that all applicable zoning building, and use regulations and restrictions of all types have been complied with unless otherwise stated in the report; further, it is assumed that all required licenses, consents, permits, or other legislative or administrative authority, local, state federal and/ or private entity or organization have been or can be obtained or renewed for any use considered in the value estimate. 24. Neither all nor any part of the contents of this report or copy thereof shall be conveyed to the public through advertising, public relations, news, sales, or any other media, without the prior written consent and approval of the appraiser(s). This limitation pertains to any valuation conclusions, the identity of the analyst or the firm and any reference to the professional organization of which the appraiser(s) are affiliated or to the designations thereof. 25. Although the appraiser(s) have made, insofar as is practical, every effort to verify as factual and true information and data set forth in this report, no responsibility is assumed for the accuracy of any information furnished the appraiser(s) either by the client or others. If for any reason, future investigations should prove any data to be in substantial variance with that presented in this report, the appraiser(s) reserve the right to alter or change any or all analyses, opinions, or conclusions and/or estimates of value. 26. If this report has been prepared in a so-called “public non-disclosure” state, real estate sales prices and other data, such as rents, prices, and financing, are not a matter of public record. If this is such a “non-disclosure” state, although extensive effort has been expended to verify pertinent data with buyers, sellers, brokers, lenders, lessors, lessees and other sources considered reliable, it has not always been possible to independently verify all significant facts. In these instances, the appraiser(s) may have relied on verification obtained and reported and on interviews with market participants. It is suggested the client consider independent verification as a prerequisite to any transaction involving sale, lease, or other significant commitment of funds to the subject property. 27. This report is null and void if used in any connection with a real estate syndicate or syndication, defined as a general or limited partnership, joint venture, unincorporated association, or similar organization formed for or engaged in investment or gain from an interest in real property, including but not limited to a sale, exchange, trade, development, or lease or property on behalf of others or which is required to be registered with the U.S. Securities and Exchange Commission or any Federal or State Agency which regulates investments made as a public offering.

DRAFT

CITRUS COUNTY HOSPITAL BOARD

RESTRICTED USE APPRAISAL REPORT

Page 112

28. The American Disabilities Act of 1990 (ADA) sets strict and specific standards for handicapped access to and within most commercial and industrial buildings. Determination of compliance with these standards is beyond appraisal expertise and, therefore, has not been attempted by the appraiser(s). For purposes of this appraisal, we are assuming the building is in compliance; however, we recommend an architectural inspection of the building to determine compliance or requirements for compliance. We assume no responsibility for the cost of such determination and our appraisal is subject to revision if the building is not in compliance. 29. This appraisal report has been prepared for the exclusive benefit of the client. It may not be used or relied upon 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. 30. The client agrees to indemnify and hold harmless VMG and its affiliates, partners, agents, and employees from and against any losses, claims, damages, or liabilities, which may be asserted by any person or entity who may receive our report, except to the extent of any losses, claims, damages or liabilities (or actions in respect thereof) arising be reason of the gross negligence or willful misconduct of VMG in preparing the report and will reimburse VMG for all expenses (including counsel fees) as they are incurred by VMG in connection with investigating, preparing, or defending any such action or claim. 31. In any circumstance in which the foregoing indemnification is held by a court to be unavailable to VMG, the client and VMG shall contribute to any aggregate losses, claims, damages or liabilities (including the related fees and expenses) to which the client and VMG may be subject in such proportion that VMG shall be responsible only for that proportion represented by the percentage that the fees paid to VMG for the portion of its services or work product giving rise to the liability bears to the value of the transaction giving rise to such liability. 32. VMG has completed an on-site visual observation of the subject property which consisted of less than inspecting 100% of the interior and exterior of the improvements. Accordingly, VMG, reserves the right to amend the appraised value and appraisal conclusions if engineering reports or other evidence is found, which would materially impact the report conclusions. 33. The right is reserved by the appraiser(s) to make adjustments to the analysis, opinions, and conclusions set forth in this report as may be required by consideration of additional or more reliable data that may become available. No change of this report shall be made by anyone other than the appraiser(s). The appraiser(s) shall have no responsibility for any unauthorized change(s) to the report. 34. If the client instructions to the appraiser(s) were to inspect only the exterior of the improvements in the appraisal process, the physical attributes of the property were from the street(s) as of the observation date of the appraisal. Physical characteristics of the property were obtained from tax assessment records, available plans, if any, descriptive information, and interviewing the client and other knowledgeable persons. It is assumed the interior of the subject property is consistent with the exterior conditions as observed and that other information relied upon is accurate.

DRAFT

CITRUS COUNTY HOSPITAL BOARD

RESTRICTED USE APPRAISAL REPORT

Page 113

35. The submission of this report constitutes completion of the services authorized. It is submitted on the condition the client will provide reasonable notice and customary compensation, including expert witness fess, relating to any subsequent required attendance at conferences, depositions, and judicial or administrative proceedings. In the event the appraiser(s) are subpoenaed for either and appearance or a request to produce documents, a best effort will be made to notify the client immediately. The client has the sole responsibility for obtaining protective order, providing legal instruction not to appear with the appraisal report and related work files and will answer all questions pertaining to the assignment, the preparation for the report, and the reasoning used to formulate the estimate of value. Unless paid in whole or in part by the party issuing the subpoena or by another party of inters tint he matter, the client is responsible for all unpaid fees resulting from the appearance of production of documents regardless of who orders the work. 36. Acceptance or use of this report constitutes agreement by the client and any other users that any liability for errors, omissions or judgment of the appraiser(s) is limited to the amount of the fee charged for the appraisal. 37. Use of this appraisal constitutes acknowledgement and acceptance of the general assumptions and limited conditions, special assumptions (if any), extraordinary assumptions (if any), and hypothetical conditions (if any) on which this estimate of market value is based. 38. If provided, the estimated insurable value is included at the request of the client and has not been performed by a qualified insurance agent or risk management underwriter. This cost estimate should not be solely relied upon for insurable value purposes. The appraiser(s) are not familiar with the definition of insurable value from the insurance provider, the local government underwriting regulations, or the types of insurance coverage available. These factors can impact cost estimates and are beyond the scope of the intended use of this appraisal. The appraiser(s) are not cost experts in cost estimating for insurance purposes. 39. Extraordinary Assumption - An assumption, directly related to a specific assignment, which, if found to be false, could alter the appraiser’s opinions or conclusion. Within this specific assignment, according to the Citrus County Property Appraiser, the building improvements contain a gross building area of 108,531 square feet. Should the actual combined or individual gross building areas differ from the assumed areas, the appraisers reserve the right to amend the contents of this Restricted Use Appraisal Report, including the conclusions. 40. Hypothetical Condition –The subject property is subject to the Lease Agreement between Citrus County Hospital Board and Citrus Memorial Health Foundation, Inc. According to the Fourth Amendment to Lease Agreement, the commencement date is March 1, 1990 and the expiration date is June 15, 2033, with an option to renew for an additional forty-five (45) year term. For purpose of this analysis, the lease is not regarded; the property rights appraised are those of the Fee Simple Estate.

DRAFT

CITRUS COUNTY HOSPITAL BOARD