SOUTHERLAND PROPERTY 

Property Identification - The south portion of the site contains 233.6 acres-it consists of an entire cove of Pat Stable branch-and contains right of way through the property for benefit of Rainbow Falls development with gate off of US#64. Site topo extends from Black Creek at 3,360 feet to Fire scald Ridge at 4,000 feet to 4,400 feet.

Highest and Best Use Before - Property is an un-zoned not in any designated active watershed and the property lies wholly within Macon County North Carolina, which has no subdivision ordinance. Historically, few tracts ever sell in the Rainbow Springs area due to long standing family ownerships. Recreational access to Nantahala River in this Rainbow Springs area is held in private ownership and will likely remain so. Public access to the Nantahala River is limited to US Forest facilities at Standing Indian Mountain Recreation area and also at Nantahala Lake. Therefore, if subject were exposed to the open market, it would likely experience significant demand from a diverse but financially capable group of potential recreation, development and estate buyers.

The rural areas of the counties, Sylva, Jackson, Highlands, Franklin and Macon are increasing in population and, in Macon, in second home construction. Suffice it to say that development demand in Macon County continues at a favorable rate.

Summary - This reflects a local economy that over the last several years is experiencing steady economic growth with construction activity that has probably accelerated in recent years in Macon County. Annual population growth is more limited and is concentrated in the unincorporated areas near existing population centers of Franklin and Sylva as well as desirable second home areas of Cashiers and Highlands.

Legally Allowed - Subject property is not affected by county wide zoning or other restrictive land use regulations. In terms of financially feasible uses, subjects location away from established commercial centers precludes other than residentially oriented uses. County Commissioners are considering some basic subdivision regulations including road requirements, etc. However this may or may not happen and is not considered herein as a buyer would not reflect his potential yet.

Physically Possible - Subject has significant state maintained road frontages that would support a wide spectrum of property uses. Due to lack of municipal well and/or sewage systems, almost all developments include lots large enough to accommodate well and septic on the lot-which usually implies a minimal lot size of about an acre (due to necessity of separating well and septic drain fields by 200 feet). Obviously, less dense recreation/resort/high end residential uses could also be supported physically.

Financially Feasible - Types of generic residential developments that have been implemented in this area recently include: (1) two-ten acre lots using terrain and or views as physical amenity. (2) Small acreage tracts supporting recreation uses along the Nantahala River and (3) estate and/or investor purchase of pristine parcels and leaving them undeveloped either for recreation and/or for investment diversification.

Land Valuation Overview - Typically, vacant residential land is valued by direct market comparison with comparably desirable tracts. This was done in subject case with the best available comparable sales drawn from the previous survey. The market value of subject properties is estimated, based on direct market comparison using price paid per acres the adjustment basis. Appraiser has adjusted all these sales for differences in terms of financing, market condition (time and other general market factors), location, topography/physical features, access and size. After these sales are qualified and adjusted, appraiser correlates these market indications of price for subject property to arrive at a unit value per acre of the property. Each sale will be analyzed individually as regards to items of dissimilarity as mentioned previously.

Traffic counts are: 4700 at US64 south of Franklin, 4400 on Little Tennessee River Road north of Franklin, 14000 on US23 towards Sylva and 2600 cars per day at subject Rainbow Springs west of Franklin.

The neighborhood that most directly impacts subject are the private recreational grounds surrounding/comprising the Rainbow Springs area-centered at the intersection of Nantahala River and US64. This area has good access to the Appalachian Trail and Standing Indian Mountain Campground. This area has long been an attractive recreation area for several generations of North Carolina and Georgia families. There is little turnover of land-recreation rights to the Nantahala River in this area are generally private and not open to the public. Public access points to the river are only at Standing Indian Mountain on Nantahala Lake. This said, even though there is little supply of land available for sale in the area, demand would be significant if any tracts did become available based on one of the comparable sales.

The photo's are only representative photo's of the Nantahala National Forest adjacent to the property.

233.60 acre lot.