RETAIL DEVELOPMENT. Page 67 PENN STATION JULY 2011

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1 RETAIL DEVELOPMENT AT Page 67 PENN STATION JULY 2011

2 The MTA LIRR retail spaces at Penn Station continue to be 100% leased (approximately 21,310 square feet). The focus continues to be on strengthening the merchandise mix and maintaining an appropriate occupancy mix (currently consisting of fifteen national and local tenants). I. PROPERTY PERFORMANCE Page 68

3 Tenant Revenue* 3,287,543 3,650,937 3,451, , ,425 (199,242) -5.5% 14, % *Includes storage rents but does not include rents from 1 Penn Plaza for storefronts, totaling $2.455M in The revenue decline from 09 to 10 is attributable to the build out of the new Jamba Juice space, which is now operating, and to lower percentage rent because Penn Wine & Spirits was closed for three months due to an elevator renovation. Financial Summary Tenant Revenue 1Q YTD 1Q YTD Variance YTD May 2011 Actual v Actual Actual Actual Budget Actual Actual 10 v Actual 09 Budget Amount % Amount % Page 69 II. LEASING ACTIVITY ( nd quarter) NEW LEASES SIGNED Connecting Corridor - Jamba Juice LEASES IN NEGOTIATION None. The retail is 100% leased and no new leases are expected until 2013.

4 Please note that the tenant sales performance is based on the three of fifteen leases with percentage rents where sales are reported. Promotional Events Seasonal events are held at Penn Station to promote LIRR ridership and spotlight vendors. These events were promoted with station announcements, press releases, TrainTalk articles, webpages, social media and some ads. Monster Mash (the LIRR October 2010 Halloween/Fall Festival Event): Jamba Juice, Auntie Anne s Pretzels and Tracks Raw Bar & Grill joined the event to provide samples to customers. III. TENANT SALES PERFORMANCE Average Sales per Square Foot by Retail Area Q Q Connecting Concourse $945 $965 $264 $243 Exit Corridor $1,393 $1,639 $434 $294 West End Concourse n/a n/a n/a n/a All Penn $1,098 $1,193 $322 $260 Page YEAR END SALES PERFORMANCE Total reported retail sales for 2010 equaled $5,483,270 among the three reporting tenants, a decrease of 9% from The entire reduction in sales is explained by the three-month closure of Penn Wine & Spirits, due to the replacement of an escalator by Amtrak. The other tenants reporting sales, Tracks at Penn Station and Auntie Anne s Pretzels, were essentially flat from 09 to 10. IV. MARKETING Events included:

5 Holiday Event (Nov 2010): Coupons for Penn Retail shops were provided at table, racks and through Mail&Ride inserts. Fashion Takes Manhattan (Feb 2011): name celebrities displayed their Spring fashion as part of Fashion Week, bringing additional customers and extra attention to Penn merchants. Summer Kickoff 2011: Tracks Raw Bar & Grill had a table at the event, and Penn Wine & Spirits raffled off a basket of LI Wines and offered LI Wine Tasting all day. Transit Transit Magazine: In Spring 2011 an edition spotlighted vendors in Penn Station. The segment covered eating, shopping and wine tasting, shot at Central Market, Penn Wine & Spirits and Tracks Raw Bar & Grill. Way Finding and Electronic Signage: Electronic Message Boards included messages for promotional events at Penn Station. Penn Station Waiting Room and Men s & Women s Bathrooms The men s and women s bathrooms in Penn Station as well as the customer waiting room were completely modernized and refurbished. In addition the women s bathroom was substantially increased in size. Penn Station Customer Service Office The customer service office was moved and rebuilt in a location on the Connecting Corridor. The move was made for two reasons, first to make room for the expansion of the Women s Bathroom and second to locate the Customer Service Office in a location where it was more accessible to customers. Penn Station Signage Additional Emergency signs and customer information signs were added in various areas of Penn Station, including the newly renovated customer waiting room. Page 71 Getaway Brochure Ads NYC Brochure ads were included for several participating vendors. IV. ON-GOING CAPITAL PROJECTS ( nd quarter)