1st Reading - Jersey City

Portion of PJP Landñll Site, Jersey City New JerseyMethod of Valuation'In order to derive market value indications for the subject property, we haveconsidered the three traditional approaches to value: theCost Approach, the SalesComparison Approach, and the Income'Capitalization Approach.Cost ApproachI~ the Cost Approach, the cost to develop a property is compared with the valueof the existing developed property. The Cost Approach reflects market, thinking byrecognizing that market participants relate value to cost. Buyers tend to judge thevalue of an existing structure by considering the prices and rents of similar 'buildings as related to the cost to create a new building with optimal physical andfunctional utilty.Sales Comparison ApproachThe Sales Comparison Approach is a method of estimating market value bycomparing the subject property to similar properties that have beensold recently,orfor which offers to purchase have been made. A major premise of the SalesComparison Approach is that the market value of aproperty is directly related tothe prices of comparable, competitive properties. The,comparative analysis in thisapproach focuses on differences in the legal,physical; location and economiccharacteristics between similar properties and the subject, all of which can accountfor variations inprices. ' ,Income Capitalizatton ApproachThe Income Capitalization Approach to value consists of methods, techniques andmathematical procedures that an appraiser uses to analyze a propèrty's capacity togenerate benefits (usually monetary) and to convert those benefits into anindication of present value.4 'Selected ApproachesThe Sales Comparison Approach was used to estimate the market value of thesubject property as of November 1, 2008. The cost approach and incomecapitalization approach were not considered reliable indicators of market value forvacant land. '4TheApI1raisal of Real Estate. 12th ed. Chicago: Appraisal Insriture, 2001.VALUE RESEARCH GROUP, LLC 20