1
22 Smull Avenue, Caldwell, NJ (2022)
AN APPRAISAL OF MARKET VALUE
FOR
MR. THOMAS A. BANKER
BOROUGH OF CALDWELL
1 PROVOST SQUARE
CALDWELL, NJ 07006
OF A PROPERTY
AT
22 SMULL AVENUE
BLOCK 22, LOT 11
BOROUGH OF CALDWELL
ESSEX COUNTY, NEW JERSEY
OWNER:
F. STEPHEN & LOU ANN BAUER
PREPARED
BY
PROFESSIONAL APPRAISAL ASSOCIATES®
RONALD D. CHIARELLO, MAI
PAA FILE #221769
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22 Smull Avenue, Caldwell, NJ (2022)
469 Morris Avenue
Professional P. O. Box 579
Appraisal Summit, NJ 07902-0579
Associates® 908-273-2412
Fax: 908-273-9189
July 21, 2022
Borough of Caldwell
Attn: Mr. Thomas A. Banker
1 Provost Square
Caldwell, NJ 07006
Re: Valuation of Property Located at
22 Smull Avenue
Caldwell, NJ 08006
Block 22, Lot 11
Dear Mr. Banker:
According to your request, we are pleased to submit the following appraisal report. The
report, including exhibits, describes the various approaches and contains all pertinent data
gathered in our investigation of the subject property. The appraisal was prepared in accordance
with the standards and reporting requirements of The Appraisal Institute and USPAP.
The subject property is identified in the Municipal Records as Block 22, Lot 11 at 22 Smull
Avenue in the ownership of F. Stephen & Lou Ann Bauer. According to the tax map, the parcel
contains 0.1738 acres. It is situated within the “OR/C” Office Residential Character Zoning
District.
After careful consideration, we have concluded the estimated Market Value of the subject
property in Fee Simple interest in accordance with its highest and best use, subject to all of the
assumptions and limiting conditions set forth in the accompanying narrative appraisal report, as of
July 11, 2022 to be:
FIVE HUNDRED SEVENTY FIVE THOUSAND DOLLARS
($575,000)
It should be noted that this valuation is for the realty only, and does not include
furniture, fixtures and/or equipment for the retrospective operation.
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22 Smull Avenue, Caldwell, NJ (2022)
Mr. Thomas A. Banker July 21, 2022
Borough of Caldwell Page 2
We, the undersigned, hereby certify that to the best of our knowledge and belief, the
statements contained in this appraisal and upon which the opinions herein are based are correct.
Employment in and compensation for making this report are in no way contingent upon the
value reported, and we hereby certify that we have no financial interest in the subject property.
This appraisal report has been prepared in accordance with the Uniform Standards of
Professional Appraisal Practice (USPAP).
We certify that we have no present or contemplated future interest in this property and that
my employment and compensation are in no way contingent upon the value reported.
Respectfully submitted,
PROFESSIONAL APPRAISAL ASSOCIATES®
Ronald D. Chiarello, MAI
Vice President/Appraiser-Consultant
SCGREA 42RG00135200
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22 Smull Avenue, Caldwell, NJ (2022)
TABLE OF CONTENTS
PAGE
Letter of Transmittal Forward
Summary of Salient Facts and Conclusions 6
Property Appraised 7
Summary of Findings 7
Market Value Definition 8
Property Rights Appraised/Competency Statement 9
Scope of Appraisal 10
Appraisal Development 14
History of Ownership 16
Assessments and Taxes 16
Market Value Definition 17
Competency Statement 17
Essex County Data 18
Borough of Caldwell Data 19
Location Map 24
Location and Surroundings 25
Photographs – Street Views 26
Description of the Land Parcel/Site Description 27
Tax Map 28
Aerial View 29
Environmental Clean-up Responsibility Act (ECRA) 30
Americans with Disabilities Act 30
Pictorial Summary 31
Zoning Map 36
Zoning 37
Zoning Summary 39
Highest and Best Use 40
Medical Office Market Overview 42
Costar Medical Office Rental Rate and Vacancy Chart 43
Market Analysis and Capitalization Rate 44
Realtyrates.com Investor Surveys 45
Pricewaterhousecoopers (PWC) Real Estate Investor Survey 47
Improved Sales Capitalization Rates 49
Valuation Procedure 50
Sales Comparison Approach 51
Comparable Improved Sales Location Map 51
Comparable Improved Sales 52
Sales Adjustment Grid 60
Reconciliation of Comparable Improved Sales 61
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22 Smull Avenue, Caldwell, NJ (2022)
Income Capitalization Approach 64
Current Leasing Information 66
Market Rent – Office 67
Market Rent – Residential 68
Potential Gross Income 69
Vacancy and Collection Loss 70
Subject Expenses 71
Expense Table 72
Income Approach Analysis 73
Conclusion 74
Reconciliation and Conclusion 75
Anticipated Exposure and Marketing Periods 76
Appraiser's Certification 77
Addenda 79
General Assumptions and Limiting Conditions 80
Additional Assumptions 82
Qualifications of Ronald D. Chiarello, MAI 83
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22 Smull Avenue, Caldwell, NJ (2022)
SUMMARY OF SALIENT FACTS AND CONCLUSIONS
Subject Location: Block 22, Lot 11
22 Smull Avenue
Caldwell, Essex County, NJ
Purpose of Appraisal: To estimate the "as is" market value of the Fee Simple
Interest as of July 11, 2022.
Date of Inspection: July 11, 2022
Date of Valuation: July 11, 2022
Highest and Best Use: As-Is - Office/Residential
Property Description: The subject property consists of a 0.1738± acres/7,573± sq.
ft. site with adequate road frontage and access.
Zoning: The subject is located in the “OR/C” Office Residential
Character Zoning District.
Indicated Values:
Cost Approach: N/A
Sales Comparison Approach: $575,000
Income Approach: $530,000
Final Value:
FIVE HUNDRED SEVENTY FIVE THOUSAND DOLLARS
($575,000)
It should be noted that this valuation is for the realty only, and does not include
furniture, fixtures and/or equipment for the retrospective operation.
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22 Smull Avenue, Caldwell, NJ (2022)
PROPERTY APPRAISED
This is an appraisal of the market value of the subject property, which is improved as a
mixed use office/residential property situated on land containing a total of 7,573± SF (0.1738±
acres) with 50’ of frontage on the east side of Smull Avenue. It is designated on the official tax
records of the municipality as Block 22, Lot 12, currently listed in the ownership of F. Stephen &
Lou Ann Bauer.
The “as is” appraisal made as of July 11, 2022 has been completed for the purpose of
estimating the market value of the Fee Simple Interest of the subject property for potential purchase
by the Borough. This appraisal report has been prepared in accordance with the Uniform
Standards of Professional Appraisal Practice (USPAP). The intended use of the report is to assist
the client for asset valuation of the subject property.
The date of valuation is July 11, 2022 which is the most recent date of the inspection of the
property.
SUMMARY OF FINDINGS
Based upon all factors as discussed herein and subject to the assumptions and limiting
conditions set forth in the accompanying narrative appraisal report, as of July 11, 2022, we
estimate the Fee Simple Interest current market value of the subject property “as is” to be:
FIVE HUNDRED SEVENTY FIVE THOUSAND DOLLARS
($575,000)
It should be noted that this valuation is for the realty only, and does not include
furniture, fixtures and/or equipment for the retrospective operation.
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22 Smull Avenue, Caldwell, NJ (2022)
MARKET VALUE
1
“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 are the consummation of a sale as of a specified date and the passing of title from
seller to buyer under conditions whereby:
Buyer and seller 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;
Payment is made in terms of cash in U.S. dollars or in terms of financial arrangements
comparable thereto; and
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.”
1
Source: Appraisal Institute, The Dictionary of Real Estate Appraisal, 6th ed. (Chicago: Appraisal Institute, 2015).
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22 Smull Avenue, Caldwell, NJ (2022)
PROPERTY RIGHTS APPRAISED
Real Estate is commonly defined as physical land and appurtenances affixed to the land,
e.g., structures. Real Property consists of all interests, benefits, and rights inherent in the
ownership of physical real estate.
Real property does not necessarily include the complete bundle of rights, i.e., “fee
simple” rights or interests. For example, when a property is subject to a lease, different interests
are created, the “leased fee” interest and the “leasehold” interest.
Appraisal Institute, The Dictionary of Real Estate Appraisal, 5th ed. (Chicago: Appraisal
Institute, 2010) provides the following definitions.
Fee Simple Estate - 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.
Leased Fee Interest - A freehold (ownership interest) where the possessory interest has been
granted to another party by creation of a contractual landlord-tenant relationship (i.e., lease).
Leasehold Interest - The tenant’s possessory interest created by a lease. (See also negative
leasehold; positive leasehold). Negative Leasehold – A lease situation in which the market rent
is less than the contract rent. Positive Leasehold – A lease situation in which the market rent is
greater than the contract rent.
Conclusion
Based on the information provided by the owner and our inspection, the office is owner
occupied and the residential unit is rented to a long term tenant on a month to month basis, and
therefore we will be concerned with the valuation of the ‘as is’ Fee Simple Interest of the
property.
COMPETENCY STATEMENT
The appraisers signing this report have recently appraised similar properties in the
competitive market area and have the data, capability and knowledge to complete an appraisal
assignment of this type.
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22 Smull Avenue, Caldwell, NJ (2022)
SCOPE OF THE APPRAISAL
Introduction
The Uniform Standards of Professional appraisal Practice (USPAP) defines scope of
work as “the type and extent of research and analysis in an assignment”. Scope of work includes,
but is not limited to:
the extent to which the property is identified:
the extent to which tangible property is observed;
the type and extent of data researched; and
the type and extent of analysis applied to arrive at opinions or conclusions.
The steps typically involved in the valuation process are as follows:
1. The subject property is physically inspected as of the date indicated in the transmittal
letter and the subsequent Summary and Conclusion section of this report.
2. Regional, county, municipal and neighborhood data is based on information gathered
from various sources including state agencies, newspaper publications and trade
publications supplied by commercial sources, multiple listing systems, market
participants (i.e., buyers/sellers/brokers) as well as the appraiser’s physical inspection and
analysis of the area.
3. Data relating to the subject property is based on the appraiser’s physical inspection of the
improvements, as well as building plans and/or site information supplied by municipal
agencies or the owner, measurements made at the inspection and information extracted
from the deed as well as other similar documentation. In cases where the improvements
are proposed, information is based on available blueprints or other similar
documentation.
4. In estimating The Highest and Best Use for the subject property, an analysis is made of
the data compiled in the previously noted steps, and a study of the subject market area is
conducted to determine which aspects of The Highest and Best Use are applicable to the
subject.
5. In developing applicable approaches to value the appraiser analyzes market data relevant
to the subject. Sales of land, improved properties and leases similar to the subject are
researched from a variety of sources which may include SR1A records, deed transactions
reported by commercial information services, multiple listing services, interviews with
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22 Smull Avenue, Caldwell, NJ (2022)
municipal officials, realtors and other appraisers and buyers and sellers. Whenever
possible, information is verified by more than one source in order to guarantee its
accuracy. The search for data begins in the subject community and is expanded into
surrounding communities until sufficient data is collected.
6. Only after assembling and analyzing the data defined in the Scope of the Appraisal can
the appraiser establish a final estimate of Market Value.
In this instance the Assignment Elements are as follows:
The purpose of this assignment (the problem to be solved) is to form one or more
opinions about value.
The client Borough of Caldwell
the person who engaged the Mr. Thomas S. Banker
appraisal and an intended user)
1. Client’s Interest in Property Appraised Market Value
2. Other Intended Users None
3. Intended use of Report Estimate “As Is” Market Value for
Potential Purchase by the Borough
4. Standard/Definition of Value Used Market Value
to Form The Value Opinion
5. Key Dates
Effective Value Date July 11, 2022
(point in time the value applies)
Report Preparation Date July 2022
(Date the report was prepared)
Dates Property Appraised Was July 11, 2022
Observed By One or More
Appraisers Signing This Report
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22 Smull Avenue, Caldwell, NJ (2022)
6. Assignment Conditions
Extraordinary Assumptions: None
Hypothetical Conditions None
Jurisdiction Exceptions None Applicable
Supplemental Standards None Applicable
Other None Applicable
The 7
th
assignment element is relevant characteristics about the property appraised. The
subject land is a rectangular shaped parcel containing a total of 7,573± SF/0.1738± acres.
Category of Property Appraised Real Property
Estate Appraised Fee Simple Interest
Existing Property Use Mixed Use Office/Residential
Property Use Reflected In One Or
More Value Opinions
Effect of Lease(s) On Value Analyzed within the Income
Approach
Extent of Services Provided
Extent of Report Appraisal Report - Summarized
Report Preparation Complies With
Requirements Set Forth In USPAP
Standard Rule 2-2(a) Appraisal Report Option
Extent of Subject Property Observation Adequate Exterior Viewing
Extent of Data Research Information from Municipal Offices,
Appraisal Firm’s Work-files, Public
Records, Local MLS, Loopnet and
CoStar.
Documents Considered Public Records and Data provided by
Owner/Client.
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Extent of Subject Observation by One
Or More Appraisers Signing Report Site and interior Inspection
Highest and Best Use Process An Inferred Analysis
Data Verification Direct and Indirect methods
Other than Signatories, Name(s) of
Person(s) Providing Significant Real
Property Assistance To The
Development of the Value Opinion(s) None
Extent and Type of Real Property
Assistance N/A
Other Intended Use Considerations
Client’s Prior Engagement of
Appraisal Services N/A
Loan to Value Ratio N/A
Atypical Issues None
Scope of Work Agreement Written Agreement
Other Reporting Requirements N/A
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APPRAISAL DEVELOPMENT
Appraisal development is the extent of research and analyses that produce one or more
credible opinions of value for one or more specifically identified intended users and an explicitly
stated intended use. In this context, credible is defined as “worth of belief”.
Depending upon the intended users, intended use, and agreements between the appraiser
and the client, the appraisal development process may include several but not necessarily all of
the following tasks:
* Observation of the property appraised
* Research for appropriate market data
* Data verification
* Consideration of influential market area, physical, economic and governmental
factors
* Determination of the subject’s highest and best use(s), if appropriate
* Development of one or more applicable approaches to value
* Reconciliation of value indications
* Preparation of this report
According to USPAP, all valuation approaches that are applicable to the interest being
appraised and necessary to produce credible results must be developed. The relevance and
development of each major approach is listed below.
Cost Approach Not Developed
Sales Approach Developed
Income Approach Developed
Applicable and necessary approaches were selected for development after consideration
of available market data, intended user(s) and intended use. An approach considered not
applicable was omitted because this methodology is not appropriate for the property interest
being appraised or sufficient data to properly develop the approach was not available. Any
approach judged not applicable yet included in this report was developed solely at our client’s
request. Data used to develop an included approach that was deemed not applicable has a low to
nil degree of comparability to the subject. Hence, no emphasis was given an approach deemed
not applicable but included.
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Highest and Best Use analyses can be categorized into two groups – inferred and
fundamental. A fundamental analysis is quantified from broad demographic and economic data
such as population and income. Subject property specific characteristics are considered. Then,
the relationship between supply and demand is weighed to determine a specific highest and best
use for the subject. An inferred analysis uses local trends and patterns to infer a general highest
and best use for the subject property. For an inferred analysis, market dynamics that might be
considered include prices, market exposure times, rents, vacancy and listings of similar real
estate. The kind of highest and best use analysis utilized in this assignment is listed within the
Scope of the Report, above.
Use of this report by anyone other than the intended user (client) is not authorized and
done at their risk. No liability is assumed, expressed or implied by Professional Appraisal
Associates®, or the appraiser(s) for unauthorized use of this report.
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HISTORY OF OWNERSHIP
The subject is currently owned by F. Stephen & Lou Ann Bauer. There have been no sale
transactions for many, many years. The property is not currently offered for sale.
ASSESSMENTS AND TAXES
Block - 22 Lot - 11
Land $275,000
Improvement $162,500
Total $437,500
2021 Tax Rate per $100 - $2.878
Based on the tax rate per $100 of assessed valuation,
total taxes for 2021 are calculated as follows:
4,375 x 2.878 = $12,591.25
0.8183
Value Per Square Foot of
Building Size
Taxes Per Square Foot of
Building Size
$218.22
$5.14
2022 Equalization Ratio =
$534,645
The tax rate for 2022 is not yet promulgated.
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22 Smull Avenue, Caldwell, NJ (2022)
MARKET VALUE
2
“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 are the consummation of a sale as of a specified date and the passing of title from
seller to buyer under conditions whereby:
Buyer and seller 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;
Payment is made in terms of cash in U.S. dollars or in terms of financial arrangements
comparable thereto; and
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.”
COMPETENCY STATEMENT
The appraiser signing this report has recently appraised similar properties in the
competitive market area and has the data, capability and knowledge to complete an appraisal
assignment of this type.
2
Source: Appraisal Institute, The Dictionary of Real Estate Appraisal, 5th ed. (Chicago: Appraisal Institute, 2010).
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22 Smull Avenue, Caldwell, NJ (2022)
ESSEX COUNTY
The subject property is located in the Borough of Caldwell, Essex County, New Jersey.
Caldwell is situated in the western sector of Essex County. Essex County, located in the
northeastern portion of the State, is surrounded by Passaic and Bergen Counties to the north,
Hudson County to the east, Union County to the south and Morris County to the west.
Essex County is bisected north to south by the Garden State Parkway. Interstate highways
serving the County include Routes 78, 80, 95, 280 and U.S. Routes 1, 9, 22 and 46. Amtrak and
Conrail also have main lines which serve the area. Located within the economic infrastructure of
the New York metropolitan area, this location shares the economic and cultural diversity of one of
the strongest world markets.
Essex County has a large and diversified economic base. Some of the nation's largest
companies have facilities in the County. They are largely influenced by the excellent location, and
good infrastructure. Despite this, the Essex County area currently (12/12) experiences an
unemployment rate of 10.5% which is higher than the statewide average of 9.3% and the national
average of 7.8%. This is typical of other urban areas of New Jersey where unemployment figures
are higher than the statewide average, i.e.; Hudson County 10.5% and Passaic County with 10.8%.
Although higher than the state norm, it is considered to have a minimal impact on the ability of the
multi-family properties in the area to attract tenants.
The general demand for office space and retail space has declined over in recent history.
The local economy has a steady diversified employment base centered upon various unrelated
industries and services. This area also has good access via interstate highways and various modes
of public transportation to other markets.
Based on population and employment projections, the outlook for housing demand will
remain steady. How this demand is translated into effective demand is often a function of
affordability. Since the subject property offers a quality apartment product, future demand for the
subject's apartments should remain steady.
To summarize, the subject property is located in a typical location with easy access to
local economic centers and adequate access to interstate highways. The neighborhood poses no
unfavorable conditions that would adversely affect the marketability of the subject property. The
area is mixed use in nature with a mix of residential and commercial uses throughout. This is
typical of competing neighborhoods in West Orange and other suburban communities in the area.
Future demand for retail development in this area should remain satisfactory.
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BOROUGH OF CALDWELL
Caldwell is a borough located in northwestern Essex County, New Jersey, about 16 miles
(26 km) outside of New York City. As of the 2010 United States Census, the borough's
population was 7,822, reflecting an increase of 238 (+3.1%) from the 7,584 counted in the 2000
Census, which had in turn increased by 35 (+0.5%) from the 7,549 counted in the 1990 Census.
Caldwell was incorporated as a borough by an act of the New Jersey Legislature on
February 10, 1892, from portions of Caldwell Township (now Fairfield Township), based
on the results of a referendum held on the previous day. In 1981, the borough's name was
changed to the "Township of the Borough of Caldwell", as one of seven Essex County
municipalities to pass a referendum to become a township, joining four municipalities
that had already made the change, of what would ultimately be more than a dozen Essex
County municipalities to reclassify themselves as townships in order take advantage of
federal revenue sharing policies that allocated townships a greater share of government
aid to municipalities on a per capita basis.
Effective January 26, 1995, it again became a
borough.
Grover Cleveland, the 22nd and 24th President of the United States, and the only
president to serve two non-consecutive terms, was born in Caldwell on March 18, 1837.
His father, Rev. Richard Cleveland, was pastor of the First Presbyterian Church. The
Grover Cleveland birthplace—the church's former rectory—is now a museum and is open
to the public.
Though today the Caldwell area is considered to be a suburb of both Newark and New
York City, the area originally developed as its own individual, self-contained community
and economy rather than as urban sprawl from a larger city. When it was formed, a few
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22 Smull Avenue, Caldwell, NJ (2022)
miles of woods separated downtown Caldwell from Newark or any of its developing
suburbs.
New Jersey Monthly magazine ranked Caldwell as its third-best place to live in its 2010
rankings of the "Best Places to Live" in New Jersey.
History
In 1702, settlers purchased the 14,000 acres (57 km
2
) Horseneck Tract from the Lenni
Lenape Native Americans for goods equal to $325. This purchase encompassed much of
western Essex County, from the First Mountain to the Passaic River. Caldwell is located
in the center of the Horse Neck Tract. Settlement began about 1740 by Thomas Gould
and Saunders Sanders.
The Horseneck Tract consisted of modern day Caldwell, West Caldwell, North Caldwell,
Fairfield, Verona, Cedar Grove, Essex Fells, Roseland, and portions of Livingston and
West Orange. This land was part of the larger purchase and had been referred to as the
Horse Neck Tract until February 17, 1787, when the town congregation voted to change
the name to Caldwell, in honor of the Reverend James Caldwell who pushed for their
organization's creation.
Caldwell Township contained what are today the Towns of West Caldwell and Caldwell.
Soon after, the area of Caldwell Township just to the east of Caldwell Borough between
Caldwell Borough and Montclair (present-day Verona and Cedar Grove) decided to
follow Caldwell's lead and incorporated itself as its own borough, Verona. Some of the
already developed eastern neighborhoods of Caldwell Township chose to become part of
Montclair, as it was a rapidly developing suburb of Newark and Paterson. At around the
same time, the area north of Caldwell Borough became its own town, North Caldwell.
The wooded area directly to the south of downtown Caldwell Borough became Essex
Fells. Meanwhile, the farmland to the south of the western portion of Caldwell Township
attempted to become its own municipality known as South Caldwell. This failed, as much
of developed sections of that area lied on its southernmost and easternmost borders, along
the expanding Newark suburbs of Livingston and West Orange respectively. Those areas
were engulfed by those two towns once they became incorporated municipalities of
several small villages and developments.
This left only the most rural farmland south of Caldwell Borough and Essex Fells to
become its own township, Roseland. At this point, all that remained of the original
Caldwell Township was a large piece of undeveloped land in the northwestern-most part
of Essex County. In 1963, Caldwell Township changed its name to Fairfield in order to
avoid being confused with Caldwell Borough.
Immediately following the separation of the original Caldwell, the western part of
Caldwell Borough generally remained less developed than downtown Caldwell Borough
and contained several farms and a large area of undeveloped swampland known as
Hatfield Swamp. However, two individual settlements, known as Franklin and Westville,
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22 Smull Avenue, Caldwell, NJ (2022)
soon formed in the western part of Caldwell Borough. As development increased and
population grew in the western part of Caldwell, the town's more rural western
population and more urban east often could not reconcile their differences. This led to the
areas of Franklin and Westville consolidating into their own township known as West
Caldwell in 1904, leaving only the one square mile of original downtown Horseneck
development as the borough of Caldwell. Lewis G. Lockward was elected the first mayor
of Caldwell. In 1929, a failed attempt to consolidate the three Caldwells was rejected by
voters.
This borough was one of the filming locations for the Columbia Pictures 1994 comedy
film North.
Historical facts
George Washington and his staff made their way through the community during the
Revolution. They stopped at the old stone house of Saunders Sanders, one of the two
people to settle the original area, for lunch.
Marquis de Lafayette visited in 1824, featuring a celebration party at the Crane Tavern.
During the 1928 Presidential campaign, Herbert Hoover visited the Grover Cleveland
Birthplace with his wife.
Grover Cleveland lived the first four years of his life in Caldwell.
In October 1897, a severe fire ripped through a large portion of Bloomfield Avenue,
destroying buildings in its wake. These buildings were replaced, in part, by the Hasler
Building, opposite the Presbyterian Church. This became Caldwell's first brick building.
In 1914, during a Fourth of July fireworks celebration, a bomb fell, injuring 20 people.
Local churches raised funds to defray the medical bills of the injured.
In 1968, Caldwell's historic cannon was stolen off the town green. The cannon had been
given to the borough by Colonel Peter Decatur in 1824. A replica was constructed and
was placed at the site.
On July 14, 1974, the landmark Park Theatre was destroyed in a
fire.
Geography
According to the United States Census Bureau, the borough had a total area of 1.167
square miles (3.023 km
2
), including 1.166 square miles (3.019 km
2
) of land and 0.001
square miles (0.004 km
2
) of water (0.12%).
Caldwell is part of "The Caldwells", the group of three Essex County municipalities
which all have the word Caldwell in their name. Together with North Caldwell and West
Caldwell, these communities are named after the Reverend James Caldwell, a Patriot who
played an active role supporting the Continental Army during the American
Revolutionary War, most notably his actions at the Battle of Springfield, where he gave
the soldiers pages from hymn books to use as wadding for their rifle bullets. While each
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22 Smull Avenue, Caldwell, NJ (2022)
community has its own independent government, and the three municipalities have no
shared governance (other than Essex County), the term is often used to refer to the area,
including on highway exit signs. Signage for Exit 47B and 52 on Interstate 80 refer to
"The Caldwells" as a destination. Fairfield Township was known as Caldwell Township
until it abandoned its original name in 1963 in an effort to avoid confusion of mail
distribution in the various Caldwells.
In a report performed by the United Way of Northern New Jersey based on 2012 data,
around 34% of Caldwell households were classified as "Asset Limited, Income
Constrained, Employed" households (below a threshold of $50,000 for households below
65, below $35,000 for those over 65), struggling with basic necessities, such as housing,
childcare, food, health care, and transportation, compared to 38% statewide and 47% in
Essex County.
Census 2010
At the 2010 United States Census, there were 7,822 people, 3,359 households, and 1,797
families residing in the borough. The population density was 6,710.3 per square mile
(2,590.9/km). There were 3,510 housing units at an average density of 3,011.1 per square
mile (1,162.6/km). The racial makeup of the borough was 86.78% (6,788) White, 3.32%
(260) Black or African American, 0.10% (8) Native American, 4.72% (369) Asian,
0.04% (3) Pacific Islander, 3.14% (246) from other races, and 1.89% (148) from two or
more races. Hispanics or Latinos of any race were 10.05% (786) of the population.
There were 3,359 households, of which 23.0% had children under the age of 18 living
with them, 40.3% were married couples living together, 9.8% had a female householder
with no husband present, and 46.5% were non-families. 39.7% of all households were
made up of individuals, and 14.8% had someone living alone who was 65 years of age or
older. The average household size was 2.19 and the average family size was 3.01.
In the borough, 18.5% of the population were under the age of 18, 11.1% from 18 to 24,
27.8% from 25 to 44, 26.5% from 45 to 64, and 16.1% who were 65 years of age or
older. The median age was 40.4 years. For every 100 females there were 87.9 males. For
every 100 females age 18 and over, there were 85.5 males.
The Census Bureau's 2006–2010 American Community Survey showed that (in 2010
inflation-adjusted dollars) median household income was $76,354 (with a margin of error
of +/− $7,683) and the median family income was $99,898 (+/− $10,668). Males had a
median income of $75,026 (+/− $12,328) versus $61,667 (+/− $20,342) for females. The
per capita income for the borough was $45,693 (+/− $4,350). About 1.1% of families and
2.1% of the population were below the poverty line, including 2.7% of those under age
18 and 5.7% of those aged 65 or over.
23
22 Smull Avenue, Caldwell, NJ (2022)
Education
The Caldwell-West Caldwell Public Schools system serves students from Caldwell and
West Caldwell and dates back to 1872, though formal consolidation of the districts was
established in 1904. As of the 2011–12 school year, the district's six schools had an
enrollment of 2,558 students and 203.3 classroom teachers (on an FTE basis), for a
student–teacher ratio of 12.58:1. Schools in the district (with 2011–12 enrollment data
from the National Center for Education Statistics) are Jefferson Elementary School (West
Caldwell; 308 students; grades K–5), Lincoln Elementary School(Caldwell; 232; K–5),
Washington Elementary School (West Caldwell; 360; K–5), Wilson Elementary School
(West Caldwell; 256; K–5), Grover Cleveland Middle School (Caldwell; 617; 6–8) and
James Caldwell High School (West Caldwell; 785; 9–12). Students are enrolled in an
elementary school based on their home location, and students attend one middle school
and one high school.
The Essex County Vocational Technical Schools offers magnet school and vocational
programs to students from Caldwell and all of Essex County.
Private schools in Caldwell include Trinity Academy for Kindergarten through eighth
grade and Mount Saint Dominic Academy for grades 9–12, which operates under the
auspices of the Roman Catholic Archdiocese of Newark.
The area is home to Caldwell University, a catholic liberal arts college with 2,300
students.
The West Essex Campus of Essex County College is located in West Caldwell.
Transportation
Roads and Highways
As of May 2010, the borough had a total of 18.41 miles (29.63 km) of roadways, of
which 14.77 miles (23.77 km) were maintained by the municipality and 3.64 miles
(5.86 km) by Essex County.
Public Transportation
New Jersey Transit offers bus service to and from Caldwell on the 29 and 71 routes.
24
22 Smull Avenue, Caldwell, NJ (2022)
LOCATION MAP
25
22 Smull Avenue, Caldwell, NJ (2022)
LOCATION AND SURROUNDINGS
The subject parcel, whose address is 22 Smull Avenue, is located on the east side of Smull
Avenue, approximately one block north of Bloomfield Avenue. The general area is populated with
various commercial/retail/residential properties along the main roadways and single family and
multi-family residential areas which surround the subject.
Caldwell is a suburban township in western Essex County, New Jersey, United States.
The Borough is set off by Grover Cleveland Park, with West Caldwell to the west, North
Caldwell to the north, Cedar Grove and Verona to the east, and Essex Fells to the south.
The subject property is located in a good area with connections to all parts of New Jersey
and New York City via the many roads which surround it including Interstate 280, the Garden State
Parkway, Interstate 78, Routes 10, 24, 124, and 510. Bus service is accessible for commuters
traveling to New York City and Newark-Liberty International Airport is nearby via the NJ
Turnpike.
The overall area is improved with mostly residential, commercial, and recreational uses.
Improvements in the general area include single and some multi-unit dwellings. Nearby uses
include houses of worship, retail and office stand alone and mixed use, as well as single-family
residences. And, of course, the Municipal offices are located nearby.
Our observation of the area indicates moderate vacancy levels for most types of property.
26
22 Smull Avenue, Caldwell, NJ (2022)
SUBJECT PHOTOGRAPHS – STREET VIEWS
Smull Avenue facing north at subject
Smull Avenue facing south at subject
27
22 Smull Avenue, Caldwell, NJ (2022)
DESCRIPTION OF THE LAND PARCEL/SITE DESCRIPTION
The subject site consists of one (1) tax line item and is known as 22 Smull Avenue,
Caldwell, NJ. The property is a rectangular lot with 50 feet of frontage on Smull Avenue and a
depth of 151.45 feet, totaling 7,573± SF/0.1738± acres.
Smull Avenue is a 2-lane north/south macadam surfaced road with a concrete curbing, street
lights and storm drains.
The included tax map shows no easements and/or encroachments. The interior site is
level with road grade with one (1) point of ingress and egress at Smull Avenue. The property is
served by customary public utilities including public water and sewer, electricity and telephone.
No soil report of the subject site has been reviewed; however, it is assumed the soil is of
sufficient load-bearing capacity to support improvements given their existence. No evidence to
the contrary was observed upon our physical inspection of the property. A review of available
websites did not indicate any known contamination of the site. A single, above-grade oil tank
was observed in the basement. The site reportedly has no in-ground tanks.
Based on our inspection and analysis of the subject’s land area, there are no issues noted that
are considered to impact marketability of the subject site. The subject site is suitable for its current
use in topography, size and shape.
28
22 Smull Avenue, Caldwell, NJ (2022)
TAX MAP
29
22 Smull Avenue, Caldwell, NJ (2022)
AERIAL VIEW
30
22 Smull Avenue, Caldwell, NJ (2022)
ENVIRONMENTAL CLEAN-UP RESPONSIBILITY ACT (ECRA)
This appraisal is based on the assumption that the New Jersey Department of Environmental
Protection has either "Approved a Negative Declaration" or issued a letter of non-applicability with
respect to the subject property pursuant to the New Jersey Environmental Clean-Up Responsibility
Act-N.J.S.A. 13:1K-6 et seq. (P.L. 1983 Chapter 330), approved September 2, 1983. It must be
stated, however, that the appraiser is not qualified to detect environmental problems.
AMERICANS WITH DISABILITIES ACT
On January 26, 1992, federal legislation entitled, "The Americans with Disabilities Act"
(ADA) became effective.
The appraisers have not been provided with a compliance survey nor has any analysis been
made to determine whether or not the subject is in conformity with the requirements of the ADA. It
is possible that compliance with the act will require expenditures for "barrier removal" construction.
Such expense, if required, could have a negative impact on the value of the subject.
This appraisal is expressly made under the assumption that the subject is in compliance with
ADA, or that there are no significant measurable required expenditures for compliance with ADA
that would have a negative impact on the value or marketability of the subject.
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22 Smull Avenue, Caldwell, NJ (2022)
PICTORIAL SUMMARY
22 SMULL AVENUE, CALDWELL BOROUGH
ESSEX COUNTY, NEW JERSEY
Subject Front
Subject Rear
Subject Sides
32
22 Smull Avenue, Caldwell, NJ (2022)
Garage & Front Porch
33
22 Smull Avenue, Caldwell, NJ (2022)
INTERIOR PHOTOGRAPHS
Waiting room
Office & Reception
Exam Room & Rest Room
Apartment Living Room & Kitchen
34
22 Smull Avenue, Caldwell, NJ (2022)
Bathroom
Second & Third Floor Bedrooms
Heaters
Electrical & Above Grade Oil Tank
35
22 Smull Avenue, Caldwell, NJ (2022)
Basement & Toilet
36
22 Smull Avenue, Caldwell, NJ (2022)
ZONING MAP
“OR/C” – OFICE RESIDENTIAL CHARACTER ZONE
37
22 Smull Avenue, Caldwell, NJ (2022)
ZONING
The lot upon which the subject building is situated is in the “OR/C” – Office Residential
Character Zone. The uses are detailed in the excerpt from the zoning regulations, as follows:
§ 250-18Office Residential Character District.
[Added 7-7-1998 by Ord. No. 1062-98]
A.
Permitted principal uses. No building, structure or premises shall be used, and
no building or structure shall be erected or structurally altered, except for the
following uses:
(1)
Detached single-family dwellings.
(2)
Home professional offices.
(3)
Home professional occupations.
(4)
A combination of professional office and residential use within the same
structure.
(5)
Professional office.
B.
Permitted accessory uses and buildings. Permitted accessory uses and
buildings shall be as follows:
(1)
Same as prescribed in § 250-11B for the RAA Residential District.
(2)
Off-street parking area.
C.
Conditional uses. Conditional uses shall be as follows: none.
D.
Height, area and yard requirements. Height, area and yard requirements shall
be as specified in the schedule of regulations (§ 250-6), except as hereinafter
provided: Professional office use and combination professional office and
residential shall not exceed a floor area ratio (FAR) of 35%.
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22 Smull Avenue, Caldwell, NJ (2022)
E.
Off-street parking requirements. Off-street parking requirements shall be as
specified in § 250-20.
F.
Signs. Signs are subject to the sign regulations of § 250-21
Additional restrictions, which may apply, are listed in the full version of the zoning
ordinance.
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22 Smull Avenue, Caldwell, NJ (2022)
ZONING SUMMARY
The subject site is located within the “OR/C” Office residential character zone which
primarily permits office, single family residential and office/residential development. The subject
lot has insufficient size and F.A.R. to be in conformance with the current zoning requirements.
Therefore, the subject is considered a conforming parcel due to the lot size and setbacks. The
subject property is not within a flood zone, or wetlands area.
The subject was reportedly constructed in 1919.
We are not experts in the interpretation of complex zoning ordinances but the property
appears to be a conforming use based on our review of public information. The determination of
compliance is beyond the scope of a real estate appraisal.
We know of no deed restrictions, private or public, that further limit the subject
property's use. The research required to determine whether or not such restrictions exist,
however, is beyond the scope of this appraisal assignment. Deed restrictions are a legal matter
and only a title examination by an attorney or Title Company can usually uncover such
restrictive covenants. Thus, we recommend a title search to determine if any such restrictions do
exist.
The foregoing is only a brief summary of the provisions of the zoning ordinance and
related regulations. All applicable statutes should be read by an attorney to determine their entire
and exact content to properly interpret the regulations and to determine their effect upon the
subject property. A more complete copy of the zoning requirements is available at the
municipality, online or perhaps in the appraiser's work file.
40
22 Smull Avenue, Caldwell, NJ (2022)
HIGHEST AND BEST USE
Highest and Best Use is defined by the Appraisal Institute in The Appraisal of Real Estate, twelfth
edition, (Chicago: the Appraisal Institute, 2001), as:
"The reasonably probable and legal use of vacant land or an improved property,
which is physically possible, appropriately supported, financially feasible, and that
results in the highest value. The four criteria the highest and best use must meet are
legal permissibility, physical possibility, financial feasibility, and maximum
profitability."0F
3
The definition of highest and best use indicates that there are two types of highest and best use. The
first type is highest and best use of the land or site as though vacant. The second is highest and best
use of the property as improved. Each type requires a separate analysis. Moreover, in each case,
the existing use may or may not be different from the site's highest and best use. In this case the site
is currently vacant and therefore highest and best use as improved is not relevant. In estimating
highest and best use, either as vacant or as improved, appraisers typically considers the following:
Possible Use - What uses are physically possible considering the site's size, configuration,
topography, availability of utilities, etc. The area of the subject site, comprised of 0.1738± acres
or 7,573± SF, is sufficiently large enough, and the site has adequate shape, topography to allow
for several uses.
Legal (Permissible Use) - What uses are legally permitted by zoning regulations and not
prohibited by deed restrictions or private covenants. Unless stated elsewhere in this report, it is
assumed that there are no private covenants or deed restrictions of significance that would
preclude gainful development of the site. The zone a property is located within does limit use
by specifically permitting various uses under the zoning regulations.
Financially Feasible Use - Which uses, being both possible and legally permitted, will produce
any net return to the site. All uses that are expected to produce a positive return are regarded as
financially feasible.
Maximally Productive - Among the feasible uses, the use, which will produce the highest net
return?
3
Dictionary of Real Estate Appraisal, 2nd Edition – American Institute of Real Estate
Appraisers, Chicago, IL, 1993
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22 Smull Avenue, Caldwell, NJ (2022)
As Vacant - The site is 0.1738± acres or 7,573± SF. Its size, configuration and visibility suggest
that the site could accommodate office or residential use as detailed in the zoning section of this
report. The subject is situated within an area which is mixed in character and includes primarily
residential and office uses. It is our opinion that the highest and best use of the subject site, as
vacant, would be for its development with a permitted use that would adhere to and maximize
current zoning regulations. Further study, beyond the scope of this appraisal, would be required
to determine which use would actually make the most sense.
As Improved - The site is improved with a free-standing 2½-story professional
office/residential building with a basement, totaling 2,450± SF of gross finished building area (not
counting the basement area). The improvements are situated on a 0.1738± acre/7,573± square foot
site and are in good overall condition. It is our opinion that the current improvements represent
the highest and best use and that there is likely no other allowable use within the zoning
ordinance that would economically justify the demolition of the existing improvements.
Therefore, the highest and best use of the site occupied by the current building, as improved, is
for its continued use as an office/residential building.
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22 Smull Avenue, Caldwell, NJ (2022)
MEDICAL OFFICE MARKET OVERVIEW
The subject property is part of the West Essex Office submarket. The subject is located in
the central business section of the Borough of Caldwell which represents a relatively low
percentage of the total Central and North Jersey marketplaces. The office market overall
consists of free-standing buildings, multi-tenanted properties, office condominiums, and medical
offices. The traditional office market displays a rent range of $12/SF to $50/SF dependent upon
location, size and condition whereas medical office buildings and special purpose buildings can
sometimes command higher rents, again commonly based on their location, size and condition
etc.
The subject property is a 2½-story mixed use office/residential building which is 100%
occupied. The following information taken from CoStar reflects the Medical/Dental Offices
within a 5 Mile Radius, up to 10,000 sq. ft.
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22 Smull Avenue, Caldwell, NJ (2022)
COSTAR MEDICAL OFFICE RENTAL RATE AND VACANCY CHART
The preceding graph shows that the up to 10,000 SF medical office market, within 5
miles of the subject property, is performing somewhat erratically with both rent rates and
vacancies fluctuating over the past five years. The current quarter shows a gross average rent rate
at $23.28/SF and a vacancy rate of 3.2%.
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22 Smull Avenue, Caldwell, NJ (2022)
MARKET ANALYSIS AND CAPITALIZATION RATE
The Band of Investment analysis involves the blending of market rates of return for both
the mortgage and equity portions of the investment. The equity dividend rate is the cash flow
return to the equity investor before taxes. No direct market information could be derived on
equity dividend rates. Considering current yields on various alternative investments, tax
incentives on real estate ownership and the prospects for future appreciation, it is our opinion
that an equity dividend rate of 3%-18% is appropriate to attract capital to this type of investment.
The following graph published by the RealtyRates.com Investor Survey for commercial
capitalization rates for various markets including office uses which appear, nationally, to be in
the 4.0% to 8.00% capitalization rate range.
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22 Smull Avenue, Caldwell, NJ (2022)
REALTYRATES.COM INVESTOR SURVEY
The foregoing 4th quarter 2021 data from RealtyRates.com - Investors Survey, based on
3rd quarter 2021 data show capitalization rates for the Office – Suburban based on different
techniques. As shown above, capitalization rates range from 3.74% to 12.00%. Depending upon
the method or technique National averages indicate 6.61%, 7.59% and 8.35%.
Similarly the following 4th quarter 2021 data from RealtyRates.com - Investors Survey,
based on 3rd quarter 2021 data show capitalization rates for the Office – Medical based on
different techniques. As shown above, capitalization rates range from 4.71% to 12.97%.
Depending upon the method or technique National averages indicate 6.32%, 8.32% and 8.89%.
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22 Smull Avenue, Caldwell, NJ (2022)
47
22 Smull Avenue, Caldwell, NJ (2022)
PRICEWATERHOUSECOOPERS (PWC) REAL ESTATE INVESTOR SURVEY
The following PricewaterhouseCoopers (PwC) Real Estate Investor Survey obtained
from the Appraisal Institute shows capitalization rates for a variety of properties.
The preceding graph/table shows overall investment data, nationally, for four commonly
purchased investment property groups, Regional (Retail) Malls, Central Business District (CDB)
Office, Warehouse and Apartment. We are concerned solely with Office properties.
Fourth quarter 2021 data shows an overall rate range from 4.25% to 8.50% and an
average overall rate of 5.80% for CBD Office properties which is the same as the previous
quarter.
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22 Smull Avenue, Caldwell, NJ (2022)
The Band of Investment Method of calculating a current market capitalization rate based
on current mortgage and Equity rates is as follows:
Mortgage 65% X 0.0684 = 0.0445
Equity Yield Rate 35% X 0.0600 = 0.0210
Weighted Average 0.066
Less Allowance for:
Equity Build-Up 65% X 0.2670 X 0.0759 = -0.0132
Appreciation 0.0000 X 0.0759 = 0.0000
0.0523
Rounded: 5.20%
Loan to Value- 65% 6.0%
Equity- 35% 10 Yrs
Interest Rate- 4.75% 0.0%
Amortazation Period- 25 Yrs
BAND OF INVESTMENT
Indicated Capitalization Rate:
22 Smull Avenue
Boro of Caldwell, Essex County
Band of Investment Factors
Yield to Equity-
mortgage capitalization rate (Mortgage Constant)- The capitalization rate for debt; ratio of the annual debt service to the principal amount of the
mortgage loan. A mortgage capitalization rate may be calculated based on the initial mortgage amount or the outstanding mortgage amount; also called annual
constant or mortgage constant.
equity capitalization rate - An income rate that reflects the relationship between a single year's pre-tax cash flow expectancy and the equity investment;
used to convert pre-tax cash flow (equity dividend) into an equity value indication; also called the cash on cash rate, cash flow rate, or equity dividend rate.
Holding Period-
Appreciation-
projection period - A presumed period of ownership; a period of time over which expected net operating income is projected for purposes of analysis and
valuation.
appreciation - An increase in property value resulting from an excess of demand over supply.
sinking fund factor - The compound interest factor that indicates the amount per period that will grow, with compound interest, to $1. The sinking fund
factor is one of the six functions of a dollar found in standard financial tables.
equity yield rate - A rate of return on equity capital as distinguished from the rate of return on debt capital; the equity investor's internal rate of return. The
equity yield rate considers the effect of debt financing on the cash flow to the equity investor.
amortization - The process of retiring a debt or recovering a capital investment, typically through scheduled, systematic repayment of the principal; a
program of periodic contributions to a sinking fund or debt retirement fund.
holding period - The term of ownership of an investment. (projection period).
49
22 Smull Avenue, Caldwell, NJ (2022)
IMPROVED SALES CAPITALIZATION RATES
The following is a Capitalization Rate Survey obtained from CoStar Realty Information,
Inc. of mixed-use office/residential transactions of buildings from 2020 to current within 10
miles of the subject property.
Sale Date Address Town Type Sale Price Size (SF) Cap. Rate
1/15/2021 104 Ackerman Ave. Clifton Office/Residential $1,700,000 9,000 6.80%
1/14/2022 596 Franklin Ave. Nutley Office/Residential $875,000 2,347 6.35%
6/18/2021 458 Hamburg Tpke. Wayne Office/Residential $762,000 3,040 5.00%
12/1/2020 608 Newark Pompton Tpke.
Pompton Plains
Office/Residential $525,000 3,000 6.00%
8/3/2020 358 South Orange Ave. South Orange Office/Residential $769,000 5,331 8.00%
The data above shows overall capitalization rates ranging from 5.0% to 8.0% with a
median indicator of 6.42% and a mean (average) indicator of 6.35%. All of the sales were
office/residential properties. Some of these sales are larger in size; however, we would conclude
that an appropriate overall Capitalization (Cap.) Rate for the subject property, based on the
limited data above as well as the data previously cited should in the 5.0% - 6.0% range.
The Mortgage Equity method on the previous page indicates a current capitalization rate
of 5.2%.
In light of these statistics and interviews with local bankers/brokers and commercial
investors, an overall Capitalization (Cap.) Rate locally in the 5.0% to 8.00% range and the
Mortgage Equity method is at 5.2%. The subject is a desirable property in a good location that
generates cash flow. We have assigned a Cap. Rate of 5.5% to the subject property based on the
Mortgage Equity calculation (above) as well as these local comparables above.
50
22 Smull Avenue, Caldwell, NJ (2022)
VALUATION PROCEDURE
There are three traditional approaches that can be used to estimate the value of real property.
They are: the Reproduction Cost Approach, the Sales Comparison Approach, and the Income
Approach. The significance of each for any given property is influenced by the type of the
improvements including their age, design, use, location, and size; by those factors that are of
greatest concern to a potential purchaser; and by the relevancy of the recent market transactions
which have occurred. As noted earlier, the Cost Approach was not employed because the subject
property is vacant land.
Since the subject is owner occupied and leased on a month to month basis to a long term
residential tenant, the Income Approach is our secondary approach to value. The Sales Comparison
Approach is employed as the primary approach with the value estimated in the Income Approach as
a check on value. Generally, properties of this type are purchased by an owner/user and occasionally
an investor who intends to hold the property for future income or an office user. Therefore, the
Income Approach is also appropriate.
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22 Smull Avenue, Caldwell, NJ (2022)
SALES COMPARISON APPROACH
In the Sales Comparison Approach, an estimate of value is obtained for the subject property
by comparing it with the most recent sales of generally similar properties in the same market area.
After a diligent search of the market, the following sales were the most significant ones that were
found in the subject property's competitive area. The following comparable sales were considered
representative of somewhat similar properties in this submarket to reflect a range of unit values for
the subject property.
52
22 Smull Avenue, Caldwell, NJ (2022)
COMPARABLE SALES LOCATION MAP
53
22 Smull Avenue, Caldwell, NJ (2022)
IMPROVED COMPARABLE SALE 1
Address: 13 Forest Avenue
Caldwell Borough, Essex Co., NJ
Block 16, Lot 14
Land: .20 acres (8,760± sq. ft.) rectangular in shape with frontage on
Forest Avenue. The land is generally level with road grade.
Improvements: A 2-story office/residential building containing 2,288 sq. ft.
built in 1914. Overall condition was considered to be average.
Date Sold: February 20, 2022 Sales Price: $400,000
Recorded: Book 20220 - Page 5508
Grantor: Barbara J. Harkavy
Grantee: Dominick A. Lembo
Verification: Assessor, CoStar
Unit Price: $174.83 per sq. ft. of building area with a land to building ratio
of 0.26:1.
Comments: The site has 4 parking spaces.
54
22 Smull Avenue, Caldwell, NJ (2022)
IMPROVED COMPARABLE SALE 1 (Cont’d.)
13 Forest Avenue, Caldwell, NJ
55
22 Smull Avenue, Caldwell, NJ (2022)
IMPROVED COMPARABLE SALE 2
Address: 596 Franklin Avenue
Nutley Township, Essex Co., NJ
Block 3200, Lot 15 (Old Block 327-Lot 7)
Land: .16 acres (6,970± sq. ft.) rectangular in shape with frontage on
Franklin Avenue. The land is generally level with road grade.
Improvements: A 3-story office/residential building containing 2,347 sq. ft.
built in 1955 and renovated in 1988. Overall condition was
considered to be average.
Date Sold: January 14, 2022 Sales Price: $875,000
Recorded: Book 20220 - Page 6062
Grantor: Garry J. & Susan A. Furnari
Grantee: Scott Pollack
Verification: Assessor, CoStar
Unit Price: $372.82 per sq. ft. of building area with a land to building ratio
of 2.97:1.
Comments: 4 parking spaces, including 3 reserved spaces.
56
22 Smull Avenue, Caldwell, NJ (2022)
IMPROVED COMPARABLE SALE 2 (Cont’d.)
596 Franklin Avenue, Nutley, NJ
57
22 Smull Avenue, Caldwell, NJ (2022)
IMPROVED COMPARABLE SALE 3
Address: 109 Valley Road
Montclair Township, Essex Co., NJ
Block 1508, Lot 29
Land: .11 acres (4,792± sq. ft.) rectangular in shape with frontage on
Valley Road. The land is generally level with road grade.
Improvements: A 2-story office/residential building containing 2,862 sq. ft.
built in 1865. Overall condition was considered to be average.
Date Sold: June 29, 2021 Sales Price: $785,000
Recorded: Book 20210 - Page 92367
Grantor: Aristizabal Realty, LLC
Grantee: Hawthorne Montclair 220 Realty, LLC
Verification: Assessor, CoStar
Unit Price: $274.28 per sq. ft. of building area with a land to building ratio
of 1.67:1.
Comments: There are 9 parking spaces on this site.
58
22 Smull Avenue, Caldwell, NJ (2022)
IMPROVED COMPARABLE SALE 3 (Cont’d.)
109 Valley Road, Montclair, NJ
59
22 Smull Avenue, Caldwell, NJ (2022)
UNDER CONTRACT SALE 4
Address: 35 Park Avenue
West Orange Township, Essex Co., NJ
Block 65, Lot 35
Land: 0.1056 acres ( 4,600± sq. ft.) irregular in shape with frontages
on Park Avenue and Ashland Avenue. The land is generally
level with road grade.
Improvements: A 2-story office/residential building containing 2,872 sq. ft.
built in 1906. Overall condition was considered to be average.
Date Sold: Under Contract Sales Price: $525,000
Recorded: N/A
Grantor: 35 Park Avenue, LLC
Grantee: N/A
Verification: CoStar, Broker (Sales price above is confirmed with the broker.
Offering price was $545,000).
Unit Price: $182.80 per sq. ft. of building area with a land to building ratio
of 1.60:1.
Comments: The property has a two car parking garage and 4 spaces.
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22 Smull Avenue, Caldwell, NJ (2022)
UNDER CONTRACT SALE 4 (Cont’d.)
35 Park Avenue, West Orange, NJ
61
22 Smull Avenue, Caldwell, NJ (2022)
SALES ADJUSTMENT GRID
ITEM SUBJECT SALE #1 SALE #2 SALE #3 SALE #4
PROPERTY AND SALE
22 Smull Avenue 13 Forest Avenue 596 Franklin Avenue 109 Valley Road 35 Park Avenue
INFORMATION Boro of Caldwell Caldwell Nutley Montclair West Orange
Essex County Essex County Essex County Essex County Essex County
DATE OF VALUATION
7/10/2022
DATE OF SALE: 2/20/2022 1/14/2022 6/29/2021 U/C
CONSIDERATION: N/A $400,000 $875,000 $785,000 $525,000
BUIILDING SIZE: 2,450 SF 2,288 SF 2,347 SF 2,862 SF 2,872 SF
GRANTOR:
NOT APPLICABLE
Barbara Harkavy G.J. & s.A. Furnari Aristizabal Realty LLC 35 Park Avenue LLC
GRANTEE:
NOT APPLICABLE
Dominick A Lembo Scott Pollack
Hawthorne Montclair 220 Realty
LLC
N/A
DEED BOOK/PAGE: NOT APPLICABLE 20220/5508 20220/6062 20210/92367 20200/74230
AGE/YEAR BUILT 1905 1914 1955 1895 1906
BLOCK/LOT
22/11 16/14 3200/15 1508/29
65/35
LOT SIZE: 0.17+/- Acres 0.20+/- Acres 0.16+/- Acres 0.11+/- Acres 0.11+/- Acres
L/B RATIO: 3.09:1 3.81:1 2.97:1 1.67:1 1.60:1
PROPERTY RIGHTS: FEE SIMPLE FEE SIMPLE FEE SIMPLE FEE SIMPLE FEE SIMPLE
PRICE PER SQ FT:
BEFORE ADJUSTMENT $175 $373 $274 $183
ADJUSTMENTS
PROPERTY RIGHTS: 0% 0% 0% 0%
CONDITIONS OF SALE: N/A 0% 0% 0% 0%
FINANCING: CONV. 0% 0% 0% 0%
MARKET CONDITIONS: 0% 0% 0% 0%
NET ADJUSTMENTS 0% 0% 0% 0%
PRICE PER SQ FT: $175 $373 $274 $183
LOCATION: Average Average Average Average Average
0% 0% 0% 0%
AGE/CONDITION: Average Average Average + Average + Average
0% -20% -10% 0%
SIZE: 2,450 SF 2,288 SF 2,347 SF 2,862 SF 2,872 SF
0% 0% 0% 0%
L/B RATIO: 3.09:1 3.81:1 2.97:1 5.00:1 1.60:1
0% 0% 0% 10%
LOT LOCATION Interior Interior Interior Interior Corner
0% 0% 0% -5%
NUMBER OF STORIES Two & 1/2 Two Two Two Two
2.5% 2.5% 2.5% 2.5%
PARKING: 2 Car Garage + 4 Spaces 4 Spaces 4 spaces 9 Spaces 2 car garage & 4 spaces
10% 10% 0% 0%
USE/UTILITY: Average Average Average Average Average
0% 0% 0% 0%
QUALITY: Masonry/Frame/Avg Masonry/Avg Masonry/Avg Masonry/Avg Masonry/Avg
0% 0% 0% 0%
FLOOD ZONE: No No No No No
0% 0% 0% 0%
MISCELLANEOUS: Basement Basement Basement Basement Basement
0% 0% 0% 0%
NET ADJUSTMENT 12.5% -7.5% -7.5% 7.5%
ADJUSTED PRICE PER SQ FT $197 $345 $254 $197
22 Smull Avenue
Boro of Caldwell, Essex County
SALES COMPARISON APPROACH ANALYSIS FOR
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22 Smull Avenue, Caldwell, NJ (2022)
RECONCILIATION OF COMPARABLE IMPROVED SALES
The sales shown represent recent improved property sales similar to the subject property in
the nearby area of Borough of Caldwell, in Essex County, NJ. The sales shown are 2021 to 2022,
mixed-use improved property sales similar to the subject within the competitive area of the subject
property. We have selected these comparable properties which we believe are most like the subject
property.
Property Rights/Financing
The subject property is being appraised Fee Simple. All Sales were sold Fee Simple and no
adjustment are taken.
Conditions of Sale
All Sales appear to have been open market transactions essentially free of any significant
encumbrances and required no adjustment. Sale 4 is under contract. Asking price was $545,000;
however, the broker confirmed that the contract price is $525,000 and closing is anticipated shortly.
No adjustment is necessary.
Financing
All sales are believed to be for cash or cash equivalent and no adjustments have been made.
Market Conditions
The overall real estate market has been in some turmoil with the COVID – 19 pandemic.
Market conditions have improved over time, especially in the multi-family and mixed use real estate
submarket. All Sales occurred within the past year and needed no adjustment.
Location
The subject property as a 2 unit mixed use office/residential building is considered to exhibit
an average location rating as it is located on a two-way street. All Sales are similar in location
within their communities, requiring no adjustment.
Condition
This adjustment recognizes several factors, such as age, condition, quality, mechanical
systems and interior finishes. The subject building appears to be structurally sound and overall it is
in average condition. Sales 2 and 3 are superior to the subject property and required downward
adjustment.
Land to Building Ratio
Typically, the rationale behind this adjustment is based on the potential of further
development considering the space the current buildings occupy. Comparable Sale 4 is inferior and
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22 Smull Avenue, Caldwell, NJ (2022)
is adjusted upward. All other Sales are similar.
Lot Location
This adjustment recognizes the potential premium of corner versus an interior site. The
subject is an interior site and is similar to Sales 1 -3 and no adjustments are required. Sale 4 is a
corner site and has been adjusted downward.
Parking
The subject has a 2-car garage and room for 4 additional open spaces at the rear. Sales 1
and 2 are inferior since they lack a garage and required upward adjustments for their inferiority.
Although Sale 3 has more parking spaces, it lacks a garage. No adjustment. Sale 4 is similar to the
subject and no adjustment was necessary.
Use/Utility
The subject property has an office unit and one residential unit above. All Sales are similar.
No adjustments are needed.
Quality
The subject property is of masonry, average frame quality. All Sales are similar and no
adjustments were taken.
Flood Zone
All Sales are similar non high-risk flood properties like the subject and hence no adjustment
was necessary.
Miscellaneous
This line item adjustment considers any other factors not considered in the previous
categories. All Sales are similar to the subject and no adjustments are applied.
Summary
The unadjusted value range of the comparable improved sales was $175 to $373 per sq.
ft. The adjusted value range of the comparable improved sales is $197 to $345 per sq. ft. with a
median indicator of $225 and a mean (average) indicator of $248 per sq. ft. All Sales are given
equal weight. The concluded value assigned to the subject property is $235 per sq. ft. The
following shows the concluded value of the subject property via the Sales Comparison
Approach.
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22 Smull Avenue, Caldwell, NJ (2022)
Before adjustment, the sales reflect a range of unit values from:
$175 to $373
After adjustment, the sales reflect a range of unit values from:
$197 to $345
$248
$225
$235 per sq. ft.
2,450 SF X $235 per sq. ft. = $575,750
$575,000
All Sales were considered in the final value conclusion. We have concluded the
unit value for the subject property to be:
Computation of Value
Rounded
22 Smull Avenue
The grid on the preceding page shows the individual adjustments and the net effect on the unit prices of each comparable
sale.
The average adjusted unit price per square foot is:
The median adjusted unit price per square foot is:
Boro of Caldwell, Essex County
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22 Smull Avenue, Caldwell, NJ (2022)
INCOME CAPITALIZATION APPROACH
The Income Capitalization Approach reflects the process of measuring or estimating the
future benefits of an investment or the cash flow and capitalizing these benefits into an indication of
value as of the valuation date. This approach is defined in the Dictionary of Real Estate Appraisal,
Sixth Edition, 2015 as:
Specific appraisal techniques applied to develop a value indication for a property
based on its earning capability and calculated by the capitalization of property
income.
It was formerly defined in the Third Edition of the Dictionary of Real Estate Appraisal, as:
a set of procedures through which an appraiser derives a value indication for an income-producing
property by converting its anticipated benefits (cash flows and reversion) into property value. This
conversion can be accomplished in two ways. One year's income expectancy can be capitalized at
a market-derived capitalization rate that reflects a specified income pattern, return on investment,
and change in the value of the investment. Alternatively, the annual cash flows for the holding
period and the reversion can be discounted at a specified yield rate.
Typically, income producing properties are purchased for investment purposes. The
investor's primary interest is in the earning capacity of the property and views this as the critical
element affecting value. Investors who purchase income producing properties are essentially
trading current funds for the right to receive future benefits. The potential benefits measured are the
net income or the cash flow that the property is capable of producing under existing market
conditions. Therefore, the Income Capitalization Approach requires the capitalization of the
expected future income stream by the appropriate method in order to derive a value indication. This
approach involves the following sequence of analytical steps:
1. Estimate the current market rent for the subject property and determine an estimate
of the potential gross income.
2. Analyze actual vacancy levels for the subject and competitive properties. The
appraiser projects an allowance for vacancy and collection loss based on this
analysis and in light of trends in supply and demand and deducts this amount from
the potential gross income to derive an effective gross income estimate.
3. Analyze current and historical operating and fixed expenses for the subject and
competitive properties to determine a projected estimate of expenses based on the
indicated trend.
4. Select a capitalization method and the appropriate rates necessary to attract
investment capital, in light of the quality, quantity and durability of the income
stream.
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22 Smull Avenue, Caldwell, NJ (2022)
5. Complete the necessary computation to derive at a value indication and
reconciliation between methods, if more than one is used.
In this instance, the appraisers selected the Direct Capitalization Method. The Direct
Capitalization Method uses one year's estimate of net income and converts it into a value indication.
This conversion is accomplished by taking the estimated gross income for a year, subtracting a
vacancy and credit loss, estimated owner expenses to arrive at a net operating income and then
applying an appropriate capitalization rate. This method is considered a reliable indicator of value
for a property which is similar in nature to the subject. The assumptions are discussed on the
following pages.
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22 Smull Avenue, Caldwell, NJ (2022)
CURRENT LEASING INFORMATION
The subject building, based on our inspection, was 100% occupied. The subject property is
occupied by one professional dental office (owner occupied and one (1) residential tenant who is
on a month-to-month rental arrangement.
According to the owner, the residential tenant is a gross lease and they currently pay only
their rent. However, the dental office, on a modified gross basis, pays their own electric and oil
charges, janitorial and cleaning, basic maintenance, and 50% of the snow plowing. The landlord
pays all other related operating expenses including taxes and structural repairs.
Since the dental office is owner occupied, there is no arm’s length lease to consider.
Therefore we will look to the office rental market in Caldwell and surrounding townships. See
the following page.
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22 Smull Avenue, Caldwell, NJ (2022)
MARKET RENT – OFFICE
A rent analysis of the general market area was conducted to determine the market rent for
the subject grade level office space. The details of our survey are as follows:
Address City
Start Date Floor Size SF Annual Rent Per Sq. Ft.
Use
Size
Location
Condition
Gen. v.
Med.
Level
Lease Type
Total
Adjustment
Adjusted
Price per
Sq. Ft.
Tenant Lease Type
80 Bloomfield Avenue Caldwell 6/1/2022 1st Floor 1,100 $20,400 $18.55 Gen. Office 0% 0% 0% 15% 0% -5% 10% $20.40 Gross
450 Bloomfield Avenue Verona 4/1/2022 2nd Floor 1,200 $24,000 $20.00 Gen. Office 0% 0% 0% 15% 5% 0% 20% $24.00 mod. Gross
13 Rockland Terrace Verona 4/1/2022 1st Floor 925 $16,800 $18.16 Gen. Office 0% 0% 0% 15% 0% 0% 15% $20.89 plus utilities
25 Pompton Avenue Verona 3/1/2022 3rd Floor 1,150 $25,296 $22.00 Gen. Office 0% 0% 0% 15% 10% 0% 25% $27.50 Mod. Gross
188 Eagle Roack Avenue Roseland 1/1/2022 1st Floor 850 $21,000 $24.71 Gen. Office -5% 0% 0% 15% 0% -5% 5% $25.94 gross
338-340 Bloomfield Avenue Verona 12/1/2021 1st Floor 2,000 $50,400 $25.20 Gen. Office 5% 0% 0% 15% 0% -5% 15% $28.98 gross
1120 Bloomfield Avenue West Caldwell 5/1/2021 1st Floor 800 $14,796 $18.50 Gen. Office -5% 0% 0% 15% 0% 0% 10% $20.34 mod. gross
80 Pompton Avenue Verona 6/1/2021
Lower Level
1,004 $20,076 $20.00 Gen. Office 0% 0% 0% 15% 10% 0% 25% $25.00 modified gross
555 Passaic Avenue West Caldwell 12/1/2020 2nd Floor 3,000 $60,000 $20.00 Gen. Office 10% 0% 0% 15% 5% 0% 30% $26.00 mod. gross
Miscellaneous adjustments are for any other factor that would likely have an effect on the lease price. This could include condition, visibility, loading facilities, ceiling heights, parking, medical or non-medical, etc.
Market Area Lease Survey
Office Rental
22 Smull Avenue
Boro of Caldwell, Essex County
The 'Total Adjustment' column shows the results of the various iindividual adjustments for size, gross vs. net lease and any other factors that would typically affect the lease price.
The 'Tenant Lease Type' column indicates the current lease for the comparable while the 'Adjusted Price per Sq. Ft.' column shows the adjusted value as a gross or net lease dependant upon how Potential Gross Income is being
calculated. The following paragraph will provide this information.
Our survey shows a rental range prior to any adjustments of $18.16/SF to $25.20/SF. After
adjustment for any differences, the gross plus utilities rent basis the survey shows a range from
$20.34/SF to $28.98/SF with an average of $24.34 per square foot and a median indicator of $25.00
per square foot. Our office is approximately 1,163 sq. ft. A market rent would be considered to be
$25.00 per sq. ft. which is toward the middle of the indicated range, on a modified gross basis which
is considered reasonable. As such, the subject’s estimated market rent will be used to calculate
potential gross income for the subject property.
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22 Smull Avenue, Caldwell, NJ (2022)
MARKET RENT – RESIDENTIAL
A rent analysis of the general market area was conducted to determine the market rent for
the subject 1 bedroom apartment spaces. The details of our survey are as follows:
Rent Date Term Address Town Description Tenant Pays
Room
Count
Bedroom
Count
Bath
Count
Monthly
Rent
Rent per
Room
Rent per
Bedroom
8/5/2021 1 Year 6 Hatfield Street Caldwell
Renovated Condition/3rd Floor Apt..Eat-in
Kitchen, Bsmt. Storage & 2 car park
Gas, heat & Electric 5 2 1 $1,750 $350.00 $875
1/1/2022 1 Year 35 Mountain Avenue Caldwell
Renovated Above Average Condition/3rd Floor
Apt. w/Bsmt. Storage, W/D in apt.
Gas, Electric & Hot Water 4 2 1 $1,800 $450.00 $900
5/29/2022 1 Year 1 Hanford Place Caldwell
Renovated Condition/2nd Floor Apt Muni.
Parking, storage space and laundry in Bsmt.
Gas, Electric, heat & Hot
Water
6 2 1 $1,800 $300.00 $900
5/13/2022 1 Year 12 Central Avenue Caldwell
Average Condition/1st Floor Apt with parking,
Storage and laundry basement
Gas & Electric & Heat 4 2 1 $1,875 $468.75 $938
11/20/2021 1 Year 325 Bloomfield Avenue Caldwell
Average Condition/3rd Floor Apt., on street
parking
Gas, Electric, Hot water 5 2 1 $1,875 $375.00 $938
3/8/2022 1 Year 27 Roseland Avenue Caldwell
Renovated Condition/1st floor Apt & 1-Car
driveway parking
Electric, & Hot Water 5 2 1 $1,800 $360.00 $900
Residential Rental Analysis
Our survey shows two (2) bedroom rental range prior to any adjustments of $1,750 to $1,875 per
month. Our apartment unit is in average condition and repair. Many of the comparable rentals have
been renovated. Without renovation and upgrade the subject unit would be expected to lease at the
lower end of the range. A market rent would be considered to be $1,800 for our five (5) room, 2-
bedroom 5) second and third floor unit - on a gross plus electric basis which is considered
reasonable. As such, the subject’s estimated market rent will be used to calculate potential gross
income for the subject property.
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22 Smull Avenue, Caldwell, NJ (2022)
POTENTIAL GROSS INCOME
The following is the potential gross income for the subject property inclusive of
reimbursed expenses:
22 Smull Avenue
Boro of Caldwell, Essex County
GROSS INCOME
1st Floor Dental Office 1,163 SF at Market $25.00/SF $29,075
2 Brm Residential Rental at $1,800/Month $21,600
Dental Office Reimbursements $6,000
POTENTIAL GROSS INCOME: $56,675
The subject’s potential gross income, as shown above, is based on a modified gross (mg)
rent where the office tenant pays their own utilities and reimburse the landlord for repairs, and 50%
of the snow plowing and landscaping. The residential lease is gross with the landlord paying all
expenses.
The landlord would pay for most of the operating expenses including but not limited to
utilities for the residential, insurance, real estate taxes, major repairs and maintenance, replacement
reserves, management and professional fees, vacancy and credit loss as well as any miscellaneous
expenses.
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22 Smull Avenue, Caldwell, NJ (2022)
VACANCY AND COLLECTION LOSS
“A deduction from potential gross income (PGI) made to reflect income reductions due to
vacancies, tenant turnover, and nonpayment of rent; also called vacancy and credit loss or
vacancy and contingency loss.”
4
Often vacancy and collection loss is expressed as a percentage of potential gross income
and should reflect the competitive market. Its treatment can differ according to the interest being
appraised, property type, capitalization method, and whether the property is at stabilized
occupancy.
We have reviewed various Market Analyses for the area and have observed, first hand,
the vacancy in the general area of the subject as well as the subject property. The subject’s
vacancy as of the inspection date was (0%) zero.
As previously noted medical office uses, within 5± mile of the subject property, exhibited
a current vacancy rate in excess of 30%, however the subject is both owner occupied and has a
long term lease with the existing tenant.
Based on the above, the subject as a mixed use dental office and residential building in
good condition and having an above average location with a history of 100% occupancy and
tenants with long term occupancies, the subject is estimated to have an overall vacancy and
collection loss at 3% of Potential Gross Income.
4
Appraisal Institute, The Dictionary of Real Estate Appraisal, 6th ed. (Chicago:
Appraisal Institute, 2015).
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22 Smull Avenue, Caldwell, NJ (2022)
SUBJECT EXPENSES
In the Income Approach, when any portion of the building is owner-occupied, rented on a
month-to-month basis (as is the subject’s case for both tenants), rented within a lease term that will
shortly expire, rented by a related party to the owner or is vacant, it is necessary to estimate market
rent. It is also necessary to select the appropriate method of capitalizing the income into value and
as noted, the appraisers selected the Direct Capitalization Method.
The subject building is typical of the type of space we surveyed. The subject is located on
Smull Avenue, a moderately-travelled street in the Borough of Caldwell. The subject’s area is
developed with a mixture of uses which are typical of those found along a main vehicular artery.
A partial one year history of Income and Expense was reported by the owners verbally. If
applicable, any information provided is shown in the accompanying expense. We have estimated
other operating expenses which were market derived. Expenses include any cost which would
normally be characteristic of such a cost required for the operation of the subject property. Business
expense is excluded.
Expense projections were derived from a review of available data for the subject as well as
an analysis from competing properties in the area. The Income and Expense calculations are shown
below and/or on the following pages.
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22 Smull Avenue, Caldwell, NJ (2022)
EXPENSE TABLE
Average Annual Cost
Provided by Owner *
Appraiser's Stabilized
Cost for Income and
Expense
Comments
Vacancy and Collection Loss Percent of PGI
This allowance considers the average vacancy and credit loss to be
incurred over a typical holding period.
na x $1,700 3.0%
Real Estate Taxes Current Taxes
Real Estate Tax expense as provided by the Assessor for the tax year.
$14,925 x $14,925 $12,591
Insurance per square foot
This reflects the annual expense to the subject property to provide fire
and extended coverage.
$860 x $860 $0.23
Repair and Maintenance Percent of EGI
These costs are those associated with the typical upkeep and general
maintenance of the subject property.
na x $2,199 4.0%
Management & Professional Fees
Percent of EGI
Typically these costs refer primarily to legal, accounting, off site
management services, and any new tenant or renewal commissions.
na x $1,649 3.0%
Replacement Reserves percent of EGI
Typically, owners do not allocate monies to this category; however,
prudent underwriting criteria would provide for this expense.
na x $550 1.0%
Utilities per square foot
Cost related to heat, air conditioning and electricity which are the tenant's
responsibility.
$7,840 x x $7,840 $2.14
Common Utilities per square foot
Cost related to common utilities (mostly electric) which are the
landlord's responsibility.
na x na $0.00
Snow Removal per square foot
Cost related to annual snow removal.
$600 x $600 $0.16
Water and Sewer per square foot
Cost related to municipal water and sewer charges which are the landlords
responsibility.
Included in Utilities x $0 $0.00
State, County and Town Inspections/Fees
per square foot
Miscellaneous per square foot
Any additional cost specific to the operation of the subject property.
na x $500 $0.14
Summary
* The Appraiser has requested a three year history of Income and Expense. Any information provided by the owner and/or representative for the subject
property has been noted here or is retained in the Appraiser's files.
Overall Operating Expense (excludes V&C loss) =
Expense per Square Foot =
Expense as a percent of Potential Gross Income =
$25,878
$3.43
45.7%
Expenses
Responsibility
Owner - Tenant
22 Smull Avenue
Boro of Caldwell, Essex County
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22 Smull Avenue, Caldwell, NJ (2022)
INCOME APPROACH ANALYSIS
22 Smull Avenue
Boro of Caldwell, Essex County
GROSS INCOME
1st Floor Dental Office 1,163 SF at Market $25.00/SF $29,075
2 Brm Residential Rental at $1,800/Month $21,600
Dental Office Reimbursements $6,000
POTENTIAL GROSS INCOME: $56,675
VACANCY AND COLLECTION LOSS - % OF EGI = 3.0% $1,700
EFFECTIVE GROSS INCOME $54,975
FIXED EXPENSES
REAL ESTATE TAX OBLIGATION:
$11,680
INSURANCE $860
VARIABLE EXPENSES
MAINTENANCE / REPAIR - % OF EGI = 4.0% $2,199
MANAGEMENT &
PROFESSIONAL FEES - % OF EGI = 3.0% $1,649
REPLACEMENT RESERVES - % OF EGI = 1.0% $550
UTILITIES (Oil, Gas, Water, Sewer) $7,840
SNOW PLOWING & LANDSCAPING $600
MISCELLANEOUS $500
TOTAL EXPENSES $25,878
NET OPERATING INCOME $29,097
CAPITALIZED AT - 5.5% $529,032
ROUNDED TO: $530,000
SUMMARY OF INCOME AND EXPENSE
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22 Smull Avenue, Caldwell, NJ (2022)
CONCLUSION
The Estimated Value by the IncomeApproach is as follows:
Net Operating Income = Value
Capitalization Rate
$29,097 = $529,032
5.50%
Rounded = $530,000
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22 Smull Avenue, Caldwell, NJ (2022)
RECONCILIATION AND CONCLUSION
Reconciliation is the final phase of the appraisal process in which the data obtained from the
three approaches to value is reviewed, and strengths and weaknesses of the respective approaches
are evaluated. The data from the value approaches are thus correlated into a Final Value Estimate.
After consideration of all pertinent data, the results of the approaches to value are as follows:
COST APPROACH: N/A
SALES COMPARISON APPROACH: $575,000
INCOME APPROACH: $530,000
As noted earlier, the Cost Approach was not employed.
The Sales Comparison Approach was employed and was provided support for our estimate
of value via the Income Capitalization Approach. Properties of this type are generally purchased by
an owner/user whose primary interest would be to occupy the commercial unit. Also, the Sales
Comparison Approach best reflects a fee simple value.
Based upon these considerations; it is our opinion that the market value of the subject
property, in the Fee Simple Interest, as of July 10, 2022, is:
FIVE HUNDRED SEVENTY FIVE THOUSAND DOLLARS
($575,000)
It should be noted that this valuation is for the realty only, and does not include
furniture, fixtures and/or equipment for the retrospective operation.
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22 Smull Avenue, Caldwell, NJ (2022)
ANTICIPATED EXPOSURE AND MARKETING PERIODS
A reasonable exposure period is the estimated length of time that the property interest being
appraised would have been offered on the market prior to the hypothetical consummation of a sale
at a market value on the effective date of valuation.
A marketing period is the estimated amount of time that it may take to sell a property
interest in real estate at the estimated market value during the period immediately following the
effective date of valuation.
Properties having unrealistic offering prices may be affected by lengthy marketing periods,
prior to a realization of more realistic market conditions on behalf of market participants.
Respondents of an Investor/Realtor Survey and CoStar data provides a range of anticipated
marketing periods from 3-18 months and an average of approximately 9 months. Therefore, it
appears that a reasonable marketing period commensurate with the estimated market value
concluded herein for the subject property is from approximately 6-12 months.
Market participants further conveyed an anticipated exposure time period of approximately
6-12 months as necessary for the sale of a property similar to the subject with an indicated current
average of 8 months as exposure time for this marketplace. Therefore, it appears that a reasonable
exposure period commensurate with the estimated market value concluded herein for the subject
property is from approximately 6-12 months.
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22 Smull Avenue, Caldwell, NJ (2022)
CERTIFICATION
I, Ronald D. Chiarello, MAI, certify that to the best of my knowledge and belief
The statements of fact contained in this report are true and correct.
The reported analyses, opinions and conclusions are limited only by the
reported assumptions and limiting conditions and they are my personal,
impartial and unbiased professional analyses, opinions and conclusions.
I have no present or prospective interest in the property that is the subject
of this report and no personal interest with respect to the parties involved.
I have no bias with respect to the property that is the subject of this report
or to the parties involved with this assignment.
My engagement in this assignment was not contingent upon developing
or reporting predetermined results.
My compensation for completing this assignment is not contingent upon
the development or reporting of a predetermined value or direction in
value that favors the cause of the client, the amount of the value opinion,
the attainment of a stipulated result, or the occurrence of a subsequent
event directly related to the intended use of this appraisal.
My analyses, opinions and conclusions were developed and this report
has been prepared, in conformity with the Uniform Standard of
Professional Appraisal Practice.
To the best of the appraiser’s knowledge and belief, all statements of fact
and information contained in this report are true and correct, and that the
appraiser has not knowingly withheld any significant information.
I have made a personal inspection of the property that is the subject of this
report.
The reported analyses, opinions and conclusions were developed and this
report has been prepared, in conformity with the requirements of the
Code of Professional Ethics and the Standards of Professional Appraisal
Practice of the Appraisal Institute.
The use of this report is subject to the requirements of the Appraisal
Institute relating to review by its duly authorized representatives
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22 Smull Avenue, Caldwell, NJ (2022)
The appraiser will not give testimony or appear in court because he or she
made an appraisal of the property in question, unless specific
arrangements to do so have been made beforehand.
Compliance with the Competency Provision in the USPAP as adopted in FIRREA
1989 and has sufficient education and experience to perform the appraisal of the
subject property.
July 21, 2022
Date Ronald D. Chiarello, MAI
Vice President
N. J. License #42RG00135200
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22 Smull Avenue, Caldwell, NJ (2022)
ADDENDA
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22 Smull Avenue, Caldwell, NJ (2022)
GENERAL ASSUMPTIONS AND LIMITING CONDITIONS
The Appraisal report has been made with the following general assumption:
1. No responsibility is assumed for the legal description provided or for matters pertaining
to legal or title considerations. Title to the property is assumed to be good and marketable unless
otherwise stated.
2. The property is appraised free and clear of any or all liens or encumbrances unless
otherwise stated.
3. Responsible ownership and competent property management are assumed.
4. The information furnished by others is believed to be reliable but no warranty is given for
its accuracy.
5. All engineering studies are assumed to be correct. The plot plans and illustrative material
in this report are included only to help the reader visualize the property.
6. It is assumed that there are no hidden or unapparent conditions of the property, subsoil or
structures that render it more or less valuable. No responsibility is assumed for such conditions
or for obtaining the engineering studies that may be required to discover.
7. It is assumed that the property is in full compliance with all applicable federal, state and
local environmental regulations and laws unless the lack of compliance is stated, described and
considered in the appraisal report.
8. It is assumed that the property conforms to all applicable zoning and use regulations and
restrictions unless a nonconformity has been identified, described and considered in the appraisal
report.
9. It is assumed that all required licenses, certificates of occupancy, consents and other
legislative or administrative authority from any local, state or national government or private
entity or organization have been or can be obtained or renewed for any use on which the opinion
of value contained in this report is based.
10. It is assumed that the use of the land and improvements is confined within the boundaries
or property lines of the property described and that there is no encroachment or trespass unless
noted in the report.
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22 Smull Avenue, Caldwell, NJ (2022)
11. Unless otherwise stated in this report, the existence of hazardous materials which may or
may not be present on the property was not observed by the appraiser. The appraiser has no
knowledge of the existence of such materials on or in the property. The appraiser, however, is
not qualified to detect such substances. The presence of substances such as asbestos, urea-
formaldehyde foam insulation, and other potentially hazardous material may affect the value of
the property. The value estimated is predicated on the assumption that there is no such material
on or in the property that would cause a loss in value. No responsibility is assumed for such
conditions or for any expertise or engineering knowledge required to discover them. The
intended user is urged to retain an expert in this field, if desired.
12. Any proposed improvements are assumed to have been completed unless otherwise
stipulated, so any construction is assumed to conform to the building plans referenced in the
report. The appraiser has based his or her appraisal report except as provided for in the Uniform
Standards of Professional Appraisal Practice.
13. Any opinions of value provided in the report apply to the entire property and any
proration or division of the total into fractional interests will invalidate the opinion of value
unless such proration or division of interests has been set forth in the report.
14. The forecasts, projections or operating estimates contained herein are based on current
market conditions, anticipated short-term supply and demand factors and a continued stable
economy. These forecasts are, therefore, subject to changes with future conditions.
15. The Americans with Disabilities Act (ADA) became effective January 26, 1992. The
appraiser has not made a specific compliance survey or analysis of the property to determine
whether or not it is in conformity with the various detailed requirements of the ADA would
reveal that the property is not in compliance with one or more of the requirements of the act. If
so, this fact could have a negative impact upon the value of the property. Since the appraiser has
no direct evidence relating to the issue, possible noncompliance with the requirements of ADA
was not considered in estimating the value of the property.
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ADDITIONAL ASSUMPTIONS
We assume no responsibility for site, soil or subsurface conditions that are not
readily evident upon a visual inspection of the property. It is further assumed that
the land is environmentally sound. Our analysis assumes the subject property is in
compliance with all federal, state and local codes regarding its operation as a
rental complex.
The subject property may contain wetlands. We have not been provided with a
wetlands study. Should a wetlands study be provided and it reveals the presence
of wetlands, we reserve the right to review/amend the report.
This analysis assumes that there are no onerous off-site development obligations
that could become part of the development process.
In the course of the investigation of the property, we did not discover any off-site
development obligations. Should off-site development obligations be a part of the
approval process, we reserve the right to amend/review the appraisal. We have
not been provided with any soil studies. We assume the soil is conducive to
development.
No hypothetical conditions and/or extraordinary assumptions are cited.
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QUALIFICATIONS OF
RONALD D. CHIARELLO, MAI, SCGREA
REAL ESTATE APPRAISER AND CONSULTANT
1993 - PRESENT:
Vice President – Real Estate Appraiser-Consultant with Professional Appraisal
Associates
, specializing in realty appraisals of all type properties, property tax consulting,
with respect to county and state tax boards, marketability and feasibility studies, extensive
experience in Easement and Condemnation for Utility and Transportation companies, as well as
other related real estate advisory services, with offices located in Summit, NJ.
EDUCATIONAL BACKGROUND:
St. Michaels College, Bachelor of Arts in Business Administration
Pace University, MBA Program-Finance and Management
Various Real Estate Appraisal Courses Sponsored by The Appraisal Institute:
Real Estate Appraisal Principles and Techniques
Real Estate Basic Valuation Procedures
Basic Income Capitalization – 310
Advanced Income Capitalization – 510
Advanced Applications – 550
Report Writing and Valuations Analysis – II540
Non-Residential Appraisal Report Writing Seminar
Standards of Professional Practice – October 2007
Standards of Professional Practice – October 2009
Standards of Professional Practice – December 2011
Standards of Professional Practice – December 2013
Standards of Professional Practice – November 2015
Standards of Professional Practice – October 2017
Uniform Standards for Federal Land Acquisition—Yellow Book, September 2018
Review Theory – General - June 2019
Standards of Professional Practice Update – November 2019
Standards of Professional Practice Update – November 2021
Seminars:
A.I. 86
th
Annual Princeton Conference – April 2022
A.I. 85
th
Annual Princeton Conference – April 2021
New Jersey 2-Hour Law Course – June 2021
A.I. 84th Annual Princeton Conference, April 2020
A.I. 83
rd
Annual Princeton Conference, April 2019
New Jersey 2-Hour Law Course – March 2019
Urban Development: The Rebirth of Perth Amboy – February 2019
85
22 Smull Avenue, Caldwell, NJ (2022)
QUALIFICATIONS OF
RONALD D. CHIARELLO, MAI, SCGREA
REAL ESTATE APPRAISER AND CONSULTANT
PAGE 2
EDUCATIONAL BACKGROUND: (Cont’d.)
Seminars:
Business Practices and Ethics, June 2018
A.I. 12
th
Annual Meadowlands Conference, May 2018
A.I. 15
th
Annual Fall Conference, October 2017
A.I. 81
st
Annual Princeton Conference, April 2017
A.I. 14
th
Annual Fall Conference, October 2016
A.I. 80
th
Annual Princeton Conference, April 2016
New Jersey Appraisal Law and Regulations, February 2016
A.I. 79
th
Annual Princeton Conference, April 2015
The Approval Process for Real Estate Development, March 2015
A.I. 12
th
Annual Fall Conference, October 2014
Right-of-Way – Three Case Studies with Two Approaches to Value, October 2014
Property Tax Appraisal of Complex Industrial Facilities, March 2014
A.I. 11
th
Annual Fall Conference, October 2013
A.I. 77
th
Annual Princeton Conference, April 2013
Port Authority R.E. Projects & Recent Economic Development
in Newark, September 2012
Business Practices and Ethics, September 2012
Litigation Cases and Alternatives to Court Resolutions, December 2011
A.I. 9
th
Annual Fall Conference, October 2011
Appraisal Curriculum Overview, July 2011
A.I. Annual Princeton Conference, April 2011
Real Estate Industry Perspectives on Lease Accounting, April 2011
Business Communications & Gadgets for Today’s Appraiser, February 2011
A.I. 8
th
Annual Fall Conference, October 2010
Mortgage Fraud, September 2010
Solar Energy: The Greening of Real Estate, June 2010
A.I., 74
th
Annual Princeton Conference, April 2010
Hotel Appraising—New Techniques for today’s Uncertain Times, January 2010
86
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QUALIFICATIONS OF
RONALD D. CHIARELLO, MAI, SCGREA
REAL ESTATE APPRAISER AND CONSULTANT
PAGE 3
PROFESSIONAL AFFILIATIONS:
MAI – Appraisal Institute
SCGREA – State Certified General Real Estate Appraiser
State of New Jersey License #42RG00135200
Past President – Metro New Jersey Chapter of the Appraisal Institute, 2011
GENERAL EXPERIENCE:
Since 1982 have been actively engaged in real estate with diversified experience in sales
and appraisal of commercial, industrial, apartment, residential and vacant land properties.
Appraiser-Consultant associated with McGowan Appraisal, Inc. 1991-1993; Real Estate
Brokerage-commercial, investment, and residential properties 1982-1991. N.A.S.D. Principal
(Series 39) Real Estate Investments 1985-1988 and member of Real Estate Securities and
Syndication Institute 1983-1987.
QUALIFIED BEFORE THE FOLLOWING COURTS:
Qualified as an expert witness before the Superior Court of New Jersey, New Jersey Tax
Court, Condemnation Commissioners, County Boards of Taxation and Municipal Planning and
Zoning Boards.
COMMERCIAL REVIEW APPRAISER:
Has performed Commercial Review Appraisals for the following clients; Boiling Springs
Savings Bank, Valley National Bank, Peapack-Gladstone Bank, 1
st
Republic Bank, ConnectOne
Bank, Millington Bank, First Bank, Provident Bank, Bank of America N.A., Chase Bank and
PSEG Services Corporation.