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-,~ CONSULTATION (continued) T'he office leases indicate a range of $1.16 to $1.41 per square foot for office space on an adj usted basis. Comparables 1 through 4, which indicate a range of $1.16 to $1.34, are existing CBD office buildings which are generally inferior in physical and locational influences with respect to the subject. ComparaUles 5 and 6($1.24 to $1.41/SF) are structures which are under renovation or new construction at the present time, and reflect new product in the CBD or extended CBD. However, these two comparables are considered inferior in overall locational influences to the subject. Overall, based upon the upper range of the comparable data as most applicable to the subject, the office rent conclusion per square foot on an overall basis for the subject is concluded at $1.40 per square foot per month. This reflects the market rent, assuming Marion County occupancy. Regarding the parking space conclusion, the market data indicates a range of rental rates for parldng per space per month of $35 to $50: Recognizing the subject's combination of subsurface and surface parking, a rental rate of $45 per month will be used in this analysis. TeChniq~e OnP -~se Vers~s Build--The first technique is the present value of the market rent for the offioe and parking inoome stream over the 26-year period using discounted cash flow analysis converted to dollars per square foot of the 114,557 square feet of County space. This cost will be compared to the total estimated building costs including all direct and indirect costs, as provided by Melvin Mark Development Company. A copy of the cost estimate is included in the Addenda of this report, which is reported at $30,670,149. The total cost estimate is reduced by the amount of the transit district grant ($9,844,000), resulting in a residual amount ariribut,ed to the Marion County interest or position in the project ($20,826,149). The time period for analysis begins in fiscal year July 1999. Therefore, the concluded February 1998 market rental rates will be trended to July 1999. Market data indicates current annual rental escalations rates of 3 to 5 percent. A conclusion of 3.5 percent or .29 percent per month will be applied to the concluded market rental summarized as follows: Office: $1.40/SF x.29%/mo. x 17 mos. +$1.40/SF =$1.47/SF/mo. parlcing: $45/Space x.29°lo/mo. x 17 mos. +$451SF =$47.22/Spacelmo. Regarding the discount rate, a discount rate range of 7 to 8 percent (which is considered a market derived rate), along with utilizaNon of the reported County project bond rate at 6.34 percent, will be used in this analysis. A discount rate of 7 to 8 percent is considered to be an appropriate discount rate, which excludes a growth rate for the projected income c9sos2 11 PALIV~R, GROTH & PIETKA, INC.