APPRAISAL OF REAL PROPERTY

Transcription

1 APPRAISAL OF REAL PROPERTY LOCATED AT, NY Block: XXX Lot: 11 FOR XXX OPINION OF VALUE 5,000,000 AS OF 12/30/2013 BY Alexander M. Yampolsky Form GA1V - "TOTAL" appraisal software by a la mode, inc ALAMODE Page # 1

2 Page # 2 LAVAL, LLC. ( 917) APPRAISAL REPORT-RESIDENTIAL INCOME PROPERTY This form may be used for appraisal of income producing properties provided the loan requested does not exceed 750,000. NEIGHBORHOOD TO BE COMPLETED BY LENDER Borrower/Client XXX City Legal Description Block: XXX Lot: 11 File No. R Map Reference 2 DD 15 Census Tract Current Sale Price (if applicable) Date of Sale N/A N/A Terms of Sale Conventional - property rights appraised are Leased Fee Property Rights Appraised Fee Leasehold (attach completed Lease Analysis FHLMC Form 461) Lender XXX Lender's Address N/A Loan Requested N/A Instructions to Appraiser: The purpose of this appraisal is to estimate the current Market Value of the Subject Property. The Definition of Market Value is as set forth in Certification And Statement Of Limiting Conditions (FHLMC 439). Note: FHLMC/FNMA do not consider the racial composition of the neighborhood to be a relevant factor and it must not be considered in the appraisal. Other Information Appraisal requested from Date 06/26/2015 By XXXXX X Items 1, 2, 4, 5, & 6 are required. Attach additional items and check box if items are considered appropriate for this appraisal or are requested by Lender. 1. Descriptive photographs of subject property 7. Map(s) Comparable Sales 2. Descriptive photographs of street scene 8. Plot plan or survey 3. Photographs of 9. Qualifications of Appraiser Interior 4. Sketch or floor plan of typical units 10. Lease Analysis FHLMC 461 (required if leasehold interest appraised) 5. Owner's current certified rent roll if existing, or 11. Summary of reciprocal agreements with other owners for use of parking, pro forma if proposed or incomplete driveways, recreational facilities, private streets, (required if applicable) 6. Owner's income and expense statement, or 12. Scope of work pro forma income and expense statement 13. Limiting Conditions and Assumptions Location Urban Suburban Rural OVERALL RATING Good Avg. Fair Poor Built-up Over to 75 Under 25 Employment Stability Present land use Adequacy of Utilities 5 Condominiums 1 1-Family 84 Apartments Convenience of Schools 10 Commercial Change in present land use Not Likely Likely (*) Taking Place (*) Police and Fire Protection (*) From To Recreational Facilities Property values Increasing Stable Declining Property Compatibility Housing demand/supply In balance Shortage Oversupply Protection from Detrimental Conditions Predominant occupancy Owner Tenant General Appearance of Properties 0-2 Vacant Condominium: Price range 50,000 to 10,000,000 Predominant 1,000,000 Appeal to Market Age yrs. to 130 yrs. Predominant 5 yrs. Distance Access or Convenience new Single Family: Price range 3,000,000 to 15,000,000 Predominant 5,000,000 Public Transportation on block Age yrs. to 150 yrs. Predominant 80 yrs. Employment Centers 70 NYC Typical apartment: Type Walk-up/Elevator No. Stories 4-40 Shopping Facilities on block No. Units 60 Age 70+/- yrs. Condition Average Grammar Schools.5 M Rent Levels: Increasing Stable Declining Freeway Access 1M 0-5 Estimated neighborhood apartment vacancy rate Decreasing Stable Increasing Rent Controls No Yes (comments on page 4 if Yes) Describe any incompatible land uses and overall property appeal and maintenance level No incompatible land uses noted during our inspection. Overall property appeal and maintenance is average. Describe any oversupply of units in area by type and rental retail/office space. N/A -The rental market is active in the subject area, with good demand for residential rental units and Describe any shortage of units in area by type and rental N/A -The rental market is active in the subject area, with good demand for residential rental units and retail space. Describe potential for additional units in area considering land availability, zoning, utilities, etc. Potential exists for adding units in the area with spot new construction ongoing. Is population of relevant market area of insufficient size, diversity and financial ability to support subject property and its amenities? No If yes, specify. Describe any probable changes in the economic base of neighborhood which would favorably or adversely affect apartment rentals(e.g. employment centers, zoning) No known probable changes in the economic base of the area. Economic conditions stabile at present time. General comments including either favorable or unfavorable elements not mentioned (e.g. public parks, view, noise, parking congestion) Chelsea section of Manhattan. Good residential and commercial location. See addenda for further details. Dimensions 25' X 98.75' subject to survey Zoning (classification, uses and densities permitted) SITE Highest and best use Present use The subject is located in the Area 2,452 C6-3X Residential and commercial use permitted. Present Improvements Other (specify) do Sq. ft. or Acres do not conform to zoning regulations Public Comm. Individual Street Public Private Ingress and Egress (Adequacy) Adequate Electricity Surface Macadam Topography Level as grade Gas Storm Sewer View Amenity Average/Typical Water Curb & Gutter Drainage and Flood Conditions Appear adequate Sanitary Sewer Sep.Tnk. Sidewalk Alley Is the property located in a HUD Identified Special Flood Hazard Area? Underground Electricity & Telephone Street Lights COMMENTS (including any easements or encroachments or any nonconforming use(s) of present improvements) No other known adverse easements or encroachments. Typical utility easements and common walls FHLMC Form 71B-Rev. 8/77 [Y2K] Page 1 Form 71B1 - "TOTAL" appraisal software by a la mode, inc ALAMODE

3 COST APPROACH DESCRIPTION OF IMPROVEMENTS Page # 3 Existing Approx. Year Built 1931 Proposed Under Construction Elevator Walk-up No. of Stories 5 Row or Townhouse No. of Bldgs. 1 No. of Units 7 No. of Rooms 18 No. of Baths 6 Parking Spaces: No. None Type N/A Basic Structural System Exterior Walls Brick Roof Covering Rubber membrane/good Masonry Interior Walls Floors Wood/tile/average Bath Floor and Walls Sheetrock/tile/average Sheet-rock/average Insulation Adequacy Adequate Adequacy and Soundproofing Adequate Unable to observe Heating: Central Individ. Type HVAC and steam Fuel gas Condition Unknown - no access Air Conditioning: Central Individ. Describe HVAC for retail. individual units for apartments Adequacy and Condition Adequate Elevator(s): Number Automatic N/A Adequacy and Condition None N/A Security Features Door locks, intercom Kitchen cabinets, drawers and counter space Adequate Inadequate OVERALL PROPERTY RATING Good Avg. Fair Range/Oven Fan/Hood Dishwasher Disposal General appearance of property Refrigerator Washer Dryer Quality of construction (materials and finish) Hot Water Heater(s) Condition of improvements Adequate gas water heaters Plumbing Fixtures Rooms size and layout Adequate Electrical Service Closets and storage Adequate Recreational Facilities Plumbing-adequacy and condition None Electrical-adequacy and condition Amenities and parking facilities Appeal to market Effective Age N/A Yrs. Estimated Remaining Economic Life N/A Yrs. COMMENTS: (Special features, functional or physical inadequacies, repairs needed, modernization, etc.) The subject is in overall average condition. No functional or external inadequacies. Typical mixed-use building (addenda) Poor LAND SALES (complete ONLY if appropriate for this appraisal) Zoning Area Sales Price Date Price per Sq. Ft. or per Unit / 1. Per / 2. Per / 3. Per Comments & Reconciliation The Cost Approach was not developed due to lack of applicability (see reconciliation of values in addenda). Estimated Land Value See addenda APARTMENT BUILDING(S)-ESTIMATED REPRODUCTION COST NEW X = Sq. ft. X (Stories) = Sq. ft. X X = Sq. ft. X (Stories) = Sq. ft. X X = Sq. ft. X (Stories) = Sq. ft. X OTHER IMPROVEMENTS TOTAL ESTIMATED COST NEW OF IMPROVEMENTS LESS DEPRECIATION DEPRECIATED VALUE OF IMPROVEMENTS ADD-ESTIMATED LAND VALUE INDICATED VALUE BY THE COST APPROACH (IN FEE SIMPLE) IF LEASEHOLD DEDUCT VALUE OF FEE INTEREST (ATTACH CALCULATIONS) INDICATED VALUE BY THE COST APPROACH (LEASEHOLD) ITEM COMPARABLE NO. 1 COMPARABLE NO. 2 COMPARABLE NO. 3 Address Proximity to subj. MONTHLY RENT SCHEDULE SUBJECT COMPARABLE RENTAL DATA Rntl. survey date Brief description of property improvements Individual unit breakdown No. Units See Addenda Rm. Count Tot BR b No. Vacant Size Sq. Ft. Age Yrs No. Units See Addenda Monthly Rent / Rm No. Vacant Rm. Count Tot BR b Size Sq. Ft. Age Yrs No. Units See Addenda Monthly Rent / Rm No. Vacant Rm. Count Tot BR b Size Sq. Ft. Age Yrs Monthly Rent / Rm Utilities, furniture and amenities included in rent Comparison to subject including rental concessions, if any Utilities included in actual rents: Utilities included in forecasted rents: Unit RM Count Sq Ft No.of Total Area Units Tot. BR b Rooms Per Unit Se e add TOTAL FHLMC FORM 71B - Rev. 8/77 Water Water Gas Gas Heat Heat No. ACTUAL RENTS Units Per Unit Vacant Unfurnished Furnished Electric Electric Total Rents Air Conditioning Air Conditioning FORECASTED RENTS Per Unit Total Unfurnished Furnished Rents Per Sq. Ft. or Room c Page 2 Form 71B1 - "TOTAL" appraisal software by a la mode, inc ALAMODE

4 ITEM Address Proximity to subject Map code Lot size Brief description of building improvements 2 DD 15 2,452 SF No. Units: No. Vac. 0 7 Year Built: 5-story mixed-use building Quality Condition Recreational facilities Average Average None Parking Tenant appeal None Average GBA LOCATION APPEAL MARKET APPROACH SUBJECT Average Average No. of Units UNIT ROOM COUNT Total BR Bath COMPARABLE NO W 23rd St, NY miles SE 2 DD 15 N/A No. Units: No. Vac. Year Built: See addenda COMPARABLE NO W 27th St, NY miles E 2 DD 15 N/A No. Units: No. Vac. Year Built: See addenda COMPARABLE NO W 27th St, NY miles NE 2 DD 15 N/A No. Units: No. Vac. Year Built: See addenda See addenda See addenda See addenda No. of Units UNIT ROOM COUNT Total BR Bath No. of Units UNIT ROOM COUNT Total BR Bath No. of Units Page # 4 UNIT ROOM COUNT Total BR Bath Unit breakdown Util. paid by owner Data source Price Sale-Listing-Offer Date of sale Terms (Including conditions of sale and financing terms) Heat Water/Sewer Inspection/owner Unf. N/A F Geo Data Sale Unf. F Geo Data Sale Geo Data F Sale Unf. Unf. F N/A N/A Price Unit: Net Adjustments: Adjusted Price : Complete as many of the following items as possible using data effective at time of sale Gross Annual Income Gross Ann. Inc. Mult. (1) Net Annual Income Expense Percentage (2) Overall Cap. Rate (3) Price per unit Price per room Price gross bldg. area /sq. ft. bldg. area /sq. ft. bldg. area (1) Sale Price / Gross Annual Income (2) Total Annual Expenses / Total Gross Annual Income (3) Net Annual Income / Price RECONCILIATION: See addenda for comments on adjustments and reconciliation. INDICATED VALUE BY MARKET APPROACH INCOME INCOME APPROACH Total Gross Monthly Forecasted Income Total Gross Annual Forecasted Income Less Forecasted Vacancy and Collection Loss ( Effective Gross Annual Income Less Forecasted Expenses & Replacement Reserves Net Annual Income from Total Property Less Return on and Recapture of Depreciated Value of Furnishings ) Net Annual Income from Real Property Capitalized as follows: See addenda for more info. 5 ) Est. Tax Rate Per 100 ( ( ( ) ) ) /sq. ft. bldg. area /sq. ft. bldg. area 5,750,000 EXPENSES Total Monthly Apartment Forecasted Rents Other Monthly Income (Itemize) *Real Est. Taxes Actual Total Assessed Value Comments: See addendum Real Estate Taxes* Other taxes or licenses Insurance Unsubordinated ground rent Fuel Gas Electricity Water and sewer Trash removal Pest control Maintenance and repairs Interior and exterior decorating Cleaning expenses and supplies Management (Off-site) Res. Mgr. salary & apartment Janitor(s) salary & apartment Miscellaneous ACTUAL Addendum FORECASTED Addendum REPLACEMENT RESERVES Carpeting and drapes Ranges and refrigerators Dishwashers and disposals Individual heating & AC units 0.25/SF TOTAL EXPENSES & REPL. RES. INDICATED VALUE BY INCOME APPROACH FHLMC FORM 71B - Rev. 8/77 4,140,000 Page 3 Form 71B1 - "TOTAL" appraisal software by a la mode, inc ALAMODE

5 GENERAL COMMENTS (Including comments on any items rated poor or fair) Page # 5 The subject is in overall average condition. See addenda for comments. CONDITIONS AND REQUIREMENTS OF APPRAISAL (include required repairs, replacements, painting, termite inspections, etc.) Normal assumptions and limiting conditions apply. The intended use of this report is to assist the client in assets valuation. The intended user is the client. See addenda for comments. RECONCILIATION AND VALUE CONCLUSION FINAL RECONCILIATION Indicated Value by the Cost Approach Not used Indicated Value by the Market Approach 5,750,000 Indicated Value by the Income Approach 4,140,000 See addenda. I certify, that to the best of my knowledge and belief, the statements made in this report are true and I have not knowingly withheld any significant information; that I have personally inspected subject property, both inside and outside, and have made an exterior inspection of all comparable sales listed herein; that I have no interest, present or contemplated, in subject property or the participants in the sale; that neither the employment nor compensation to make said appraisal is contingent upon any value estimate; and, that all contingent and limiting conditions are stated herein. Certification and Statement of Limiting Conditions (FHLMC Form 439 Rev. 6/93) applies ( on file with Client Attached). As a result of my investigation and analysis, my estimate of Market Value of the subject property as of is 5,000,000 Date 09/01/2015 Appraiser If applicable, complete the following Date Alexander M. Yampolsky Appraiser Date Supervising or Review Appraiser Did Did Not Physically Inspect Property FOR LENDER'S USE ONLY (completion optional) Loan Recommended Subject Term yrs. Principal & Interest /mo. Borrower's Cost or Purchase Price Appraised Value Loan to Appraised Value Loan: Per Unit Per Room Per Sq. Ft. of Building Area Gross Annual Forecasted Income Gross Annual Income Multiplier Overall Capitalization Rate Forecasted Annual Expenses and Replacement Reserves ( of Gross Annual Forecasted Income) Break-even Point (this loan): (Annual Exp. & RR + Annual P & I pymts. ) / (Gross Annual Income (All financing) : (Annual Exp & RR + Annual P & I pymts. for all financing ) / (Gross Annual Inc. Borrower's Return on Appraised Equity (Net Annual Inc. (-) Annual P & I pymts )= (Appraised Value (-) Loan Amt. )= (1) / Comments or Committee Action FHLMC FORM 71B - Rev. 8/77 /annually )= )= (1) (2) (2) = Page 4 Form 71B1 - "TOTAL" appraisal software by a la mode, inc ALAMODE

6 RESIDENTIAL INCOME PROPERTY MARKET DATA ANALYSIS ITEM Address Proximity to subject Map code Lot size MARKET DATA ANALYSIS Brief description of building improvements SUBJECT 2 DD 15 2,452 SF No. Units: 7 No. Vac. 0 Year Built: 5-story mixed-use building Quality Condition Recreational facilities Average Average None Parking Tenant appeal None Average GBA LOCATION APPEAL Average Average No. of Units Page # 6 COMPARABLE NO W 21st St, NY miles SE 2 DD 15 N/A No. Units: No. Vac. Year Built: See addenda COMPARABLE NO W 29th St, NY miles NE 2 DD 15 N/A No. Units: No. Vac. Year Built: See addenda COMPARABLE NO W 18th St, NY miles SW 2 DD 15 N/A No. Units: No. Vac. Year Built: See addenda See addenda See addenda See addenda UNIT ROOM COUNT Total BR Bath No. of Units UNIT ROOM COUNT Total BR Bath No. of Units UNIT ROOM COUNT Total BR Bath No. of Units UNIT ROOM COUNT Total BR Bath Unit breakdown Util. paid by owner Data source Price Sale-Listing-Offer Date of sale Terms (Including conditions of sale and financing terms) Heat Water/Sewer Inspection/owner N/A Unf. F Geo Data Sale Unf. F Geo Data Sale Unf. Geo Data F Sale Unf. F N/A N/A Price Unit: Net Adjustments: Adjusted Price : Complete as many of the following items as possible using data effective at time of sale /sq. ft. bldg. area /sq. ft. bldg. area COMMENTS Gross Annual Income Gross Ann. Inc. Mult. (1) Net Annual Income Expense Percentage (2) Overall Cap. Rate (3) Price per unit Price per room Price gross bldg. area Comments: LAVAL, LLC. ( 917) /sq. ft. bldg. area /sq. ft. bldg. area

7 Location Map Borrower City Lender/Client XXX XXX Form MAP.LOC - "TOTAL" appraisal software by a la mode, inc ALAMODE Page # 7

8 Sales Apprroach Form SCNLGL - "TOTAL" appraisal software by a la mode, inc ALAMODE Page # 8

9 Rent Roll Form SCNLGL - "TOTAL" appraisal software by a la mode, inc ALAMODE Page # 9

10 Income Approach Form SCNLGL - "TOTAL" appraisal software by a la mode, inc ALAMODE Page # 10

11 Supplemental Addendum Borrower City Lender/Client XXX XXX Page # 11 File No. R Comments regarding marketing/sale history There have been recorded sales of the subject in the past 5 years. The subject is not for sale. Typical marketing and exposure time is 6 to 12 months. Neighborhood analysis The subject is located in the Chelsea section of Manhattan. The area is a residential community comprised of a mix of, mixed-use, commercial and apartment buildings and few1-4 family homes. The subject is on West 23rd Street, a major commercial and automotive thoroughfare. Surrounding the subject are similar residential and mixed-use properties. The subject is considered to have good commercial and residential location. It is in close proximity to major thoroughfares, highways and public transportation. There were no known adverse factors affecting marketability. Description of improvements The subject consists of an attached 5-story walk-up mixed-use loft building. The basement, ground floor, and 2-nd floors used as the owner occupied restaurant. It was in overall average condition as of date of value. The 3, 4 and 5th are apartments. The units on the 3rd floor were inspected. The units reported to be in overall average condition and good renovated with economy grade fixtures. The common areas are clean in overall average condition with no major deferred maintenance or needed repairs. The mechanical and structural components are in average. There is a gas fired boiler and water heater provide heat and hot water for the buildings. They appear to be in adequate working condition. There was no access to the roof; it reported to be in average condition. No interior leaks noted.the electrical service is in average condition and appears to be adequate. The windows are double hung replacement units. The exterior is in overall average condition. There was no other noted deferred maintenance or repairs needed. The condition of the subject is a typical to the market. The attached photographs provide additional details regarding the subject's condition. Comments on Sales Comparison Approach The comparables are recent sales of walk-up mixed-use loft buildings. All sales within the subject's market area. All sales transferred since According to the most published reports, market stabilized for mixed-use buildings since No market condition adjustments are warranted. Location: The subject has good retail location on busy West 23rd Street. Sales 2 to 6 are located on the side streets. These are slightly inferior locations and adjusted 5 upward. Size: sales adjusted for size based on economies of scale concert, the larger buildings sell at lower price on per SF basis and vise-versa for the smaller buildings. Sales were adjusted for size where warranted. No other adjustments were considered necessary because the sales similar in other of the aspects. After adjustments, the sales indicate a range between 509/SF to 850/SF the median of 620/SF and average of 650/SF. In consideration of all factors affecting the subject, we reconcile a value toward above the average of the range and conclude 650/SF for the subject. Therefore: The As Is value: 8,845 SF x 650/SF = 5,749,250 The As Is Value via Sales Approach 5,750,000 (rounded) Form TADD - "TOTAL" appraisal software by a la mode, inc ALAMODE

12 Supplemental Addendum Borrower City Lender/Client XXX XXX Page # 12 File No. R Comments on Income Approach Income consists of the projected annual rental income for a stabilized year of occupancy. Market rents were analyzed. The subject s commercial space and apartments on the 3rd floor are owner occupied. We utilized the reported contract rent for the commercial space and estimated market rent for the 3rd floor apartments. The subject s commercial rent is slightly below market. However, the commercial tenant pays for the entire building heat, water and sewer and porter. Based on the above, the subject rent considered at market. The remaining apartments are rent stabilized and fall under DHCR rules and regulations. We utilized the reported rents for these units and assume these are within DHCR guidelines. We surveyed the leasing agents and or other principals involved with the transactions, other appraisers and this office files. The subject s rent level is considered in vacancy rate and cap rate development. Comments on Income & Expense Analysis A vacancy and collection loss of 7 for commercial space and 5 for the apartments is deemed appropriate for the subject. There is adequate demand for residential and commercial space in the area. Our estimate of expenses was based on the reported, public records and industry standards. We have utilized the 2013/14 real estate taxes that were reported. Insurance was estimated at 7,100 or 0.80 per square foot, a reasonable amount for this type of property and similar to the reported. Repairs and maintenance estimated at 6,200, or 0.70/SF, reasonable given overall average condition. We have also taken deductions for supplies, miscellaneous and reserves. Reserves were projected at 1.5 of the EGI within the typical 1 to 3 range. These buildings are typically self-managed; however, we have utilized a management/leasing fee figure of 3. We have also deducted for a miscellanies expenses and professional/legal/leasing fees. We developed overall capitalization rate is The rate falls within the comparable range. This rate is applied to the forecasted net operating income as follows: The As Is value: 176,035 /.0425 = 4,142,000 The As Is value via the Income Approach rounded to 4,140,000 In formulating a value conclusion, Sales and Income Approaches were considered. The building is an investment property and often purchased for the cash flow it produced. Many buildings like the subject are owner occupied, who tend to pay more than the investors. The subject is approximately 50 tenants occupied in this instance. Therefore equal weight is given to the Sales Approach and Income approaches. Should be noted, the subject has significant development rights. The subject is within C6-3X zoning with the maximum commercial FAR of 6.0 and the maximum residential FAR of 9.0. Its current FAR is 3.61 and therefore potential for development exists. As per scope of work the development rights were not estimated but considered in value. A thorough inspection of the site and neighborhood was conducted, and all available data affecting the property's value was analyzed. As a result of these investigations and subject to the enclosed limiting conditions, the "as is" market value of the Leased Fee interest of the subject, as of 12/30/2013, is: (5,000,000) Form TADD - "TOTAL" appraisal software by a la mode, inc ALAMODE

13 Supplemental Addendum Borrower City Lender/Client XXX XXX Page # 13 File No. R SCOPE OF WORK The data contained in this report was obtained from the public records and from knowledgeable leasing agents, real estate brokers and principals active in the subject's area. Geo Data and NYC records were utilized to identify the subject and comparables. Verification of the comparable sales was accomplished through Geo Data and other public records and principals. Comparable rents were obtained from owners, managing agents, leasing agents and other appraisers. Additional information about size, condition and other pertinent aspects of real estate was obtained from Geo Data and NYC public records. This appraisal is based on the extraordinary assumption that the interior and the exterior of the comparables are typical for the area, average for the market and in average condition. Area calculations and dimensions are as indicated in public records. If this extraordinary assumption is untrue, the value of the property may be affected. The client provided the appraisers with the rent roll and expenses. The appraisal is predicated on the fact that the rent is being collected and is legal. Per scope of work the development rights were not estimated but considered in value. The Income, Sales Comparison and Cost Approaches were all considered. The Sales Comparison Approach provides good and reliable indicator of value since it is a direct reflection of market activity. The appraiser analyzed the comparable market area for the past two years to uncover sales of similar buildings. The price per square foot, per unit and Gross Income Multiplier were considered. The price per square foot is considered to be the most reliable indicator of value in this case. The Income Approach provides a reliable indicator of value since these properties are typically purchased for the cash flow they produce. All the subject s units rented. The reported rent roll utilized to estimate the potential gross income and estimated market rent. Estimated market rents were used for the owner occupied 3rd floor units. Adjusted market rents were also utilized to determine potential future increases in rents as well as estimates for vacancy and risk factors in the development of the capitalization rate. Vacancy was determined from market analysis of the subject area. Expenses were determined from comparative analysis and the subject history. A capitalization rate was determined via the Mortgage-Equity technique, in addition to individual sales analysis and comparisons to competing rates of return. The Cost Approach, which analyzes land value, replacement cost and depreciation, was also considered. However, the subject building was constructed circa Depreciation estimates become very subjective and unreliable as the age of building increases. Land sales of small parcels in similar Zoning Districts are minimal which further inhibits the use of this approach. For these reasons, the Cost Approach was found to be unreliable, not applicable and not utilized in this analysis. USPAP Guidelines on Retrospective Valuation Dates The effective date of value of this report is 12/30/2013. Statement 3 of USPAP details the standards for retrospective value opinions. Date of inspection 06/28/2015. USPAP states the following with regard to the use of data in an appraisal with a retrospective effective date of valuation: Data subsequent to the effective date may be considered in developing a retrospective value as a confirmation of trends that would reasonably be considered by a buyer or seller as of that date. The appraiser should determine a logical cut-off because at some point distant from the effective date, the subsequent data will not reflect the relevant market. This is a difficult determination to make. Studying the market conditions as of the date of the appraisal assists the appraiser in judging where he or she should make this cut-off. In the absence of evidence in the market that data subsequent to the effective date were consistent with confirmed market expectations as of the effective date, the effective date should be used as the cut-off for data considered by the appraiser. Form TADD - "TOTAL" appraisal software by a la mode, inc ALAMODE

14 Supplemental Addendum Borrower City Lender/Client XXX XXX Page # 14 File No. R The sales used in this report are all within a few months of the effective date and subject to the same market conditions, especially considering typical day contract periods prior to closings. EXTRAORDINARY ASSUMPTION: Our appraised value is under the Extraordinary Assumption that: The rents utilized in this report within DHCR requirements actually collected. An assumption, directly related to a specific assignment, which, if found to be false, could alter the appraiser's opinions or conclusions. Extraordinary assumptions presume as fact otherwise uncertain information about physical, legal, or economic characteristics of the subject property; or about conditions external to the property, such as market conditions or trends; or about the integrity of data used in an analysis. An extraordinary assumption may be used in an assignment only if: It is required to properly develop credible opinions and conclusions; The appraiser has a reasonable basis for the extraordinary assumption; Use of the extraordinary assumption results in a credible analysis; and The appraiser complies with the disclosure requirements set forth in USPAP for extraordinary assumptions. (USPAP, 2009) ASSUMPTIONS AND LIMITING CONDITIONS This appraisal is made subject to the following assumptions and limiting conditions: The submission of this report does not require future testimony or appearance in court or before any public agency without special arrangements for that eventuality. Neither all nor any part of this appraisal shall be disseminated to the general public by the use of advertising media, public relations media, news media, sales media or other media for public communication without prior written consent of the signatories of this appraisal report. As per prior agreement, the Client agrees that this appraisal shall not be quoted or referred to in any report or financial statement of the Client or in any document filed with any governmental agency without the written consent of the appraiser. No responsibility is assumed for matters legal in character or nature, nor matters of survey or of engineering. The property is appraised as if free and clear, with no adverse easement, encroachments, restriction, etc., unless otherwise stated. No opinion is rendered as to the title, which is presumed to be good and held in Fee Simple. No violations are assumed to exist. No liability is assumed regarding the existence, if any, for mineral deposits or their influence on value. Unless otherwise stated in this report, the existence of hazardous substances, including without limitation asbestos, polychlorinated biphenyls, petroleum leakage, or agricultural chemicals, which may or may not be present on the property, or other environmental conditions, were not called to the attention of nor did the appraiser become aware of such during the appraiser's inspection. The appraiser has no knowledge of the existence of such materials on or in the property unless otherwise stated. The appraiser, however, is not qualified to test such substances, such as asbestos, urea formaldehyde, foam insulation, or other hazardous substances or environmental conditions, which may affect the value of the property. The value estimated is predicated on the assumption that there is no such condition on or in the property or in such proximity thereto that it would cause a loss in value. No responsibility is assumed for any such conditions, or for any expertise or engineering knowledge required to discover them. The client is urged to retain an expert in the field of environmental impacts upon real estate if so desired. The conclusions and recommendations presented in this report were reached based on our analysis of the information available to us from public records, published data sources, subject ownership and principals Form TADD - "TOTAL" appraisal software by a la mode, inc ALAMODE

15 Supplemental Addendum Borrower City Lender/Client XXX XXX Page # 15 File No. R active in the market. Information, estimates and opinions furnished to the Appraiser, and contained in the report, were obtained from sources considered reliable and believed to be true and correct. However, the Appraiser can assume no responsibility for accuracy of such items furnished to the Appraiser. Our conclusions are based upon economic conditions as of the effective date of the appraisal. Any subsequent, unforeseen adverse economic condition that might occur could impact the subject value. We have performed no services, as an appraiser or in any other capacity, regarding the property that is the subject of this report within the three-year period immediately preceding acceptance of this assignment. Exposure time is always presumed to precede the effective date of appraisal. A normal exposure time for the subject property is estimated to be 6-12 months. This conclusion is predicated on interviews with brokers and other real estate industry sources and on information obtained in the verification process. The value reported herein presumes such an exposure time. Form TADD - "TOTAL" appraisal software by a la mode, inc ALAMODE

16 Subject Photo Page Borrower City Lender/Client XXX XXX Subject Front Subject Subject Street Form PICPIX.TR - "TOTAL" appraisal software by a la mode, inc ALAMODE Page # 16

17 Photograph Addendum Borrower City Lender/Client XXX XXX Subject street Entrance Entrance Interior- restaurant Interior- restaurant Interior- restaurant Form PICSIX2 - "TOTAL" appraisal software by a la mode, inc ALAMODE Page # 17

18 Photograph Addendum Borrower City Lender/Client XXX XXX Interior- restaurant Interior- restaurant Interior- restaurant Interior- restaurant Interior- restaurant basement kitchen Interior- restaurant basement kitchen Form PICSIX2 - "TOTAL" appraisal software by a la mode, inc ALAMODE Page # 18

19 Interior Photos Borrower City Lender/Client XXX XXX Boiler water heater electrical service electrical service Staircase Staircase Form PICINT6 - "TOTAL" appraisal software by a la mode, inc ALAMODE Page # 19

20 Interior Photos Borrower City Lender/Client XXX XXX Typical apartment interior Typical apartment interior Typical apartment interior Typical apartment interior Typical apartment interior Typical apartment interior Form PICINT6 - "TOTAL" appraisal software by a la mode, inc ALAMODE Page # 20

21 Comparable Photo Page Borrower City Lender/Client XXX XXX Comparable W 23rd St Comparable 2 43 W 27th St Comparable W 27th St Form PICPIX.BR - "TOTAL" appraisal software by a la mode, inc ALAMODE Page # 21

22 Comparable Photo Page Borrower City Lender/Client XXX XXX Comparable 4 52 W 21st St Comparable W 29th St Comparable W 18th St Form PICPIX.BR - "TOTAL" appraisal software by a la mode, inc ALAMODE Page # 22

23 Page # 23 The most probable price which a property should bring in a competitive and open market under all conditions DEFINITION OF MARKET VALUE: requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeably and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: (1) buyer and seller are typically motivated; (2) both parties are well informed or well advised, and each acting in what he considers his own best interest; (3) a reasonable time is allowed for exposure in the open market; (4) payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and (5) 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. * Adjustments to the comparables must be made for special or creative financing or sales concessions. No adjustments are necessary for those costs which are normally paid by sellers as a result of tradition or law in a market area; these costs are readily identifiable since the seller pays these costs in virtually all sales transactions. Special or creative financing adjustments can be made to the comparable property by comparisons to financing terms offered by a third party institutional lender that is not already involved in the property or transaction. Any adjustment should not be calculated on a mechanical dollar for dollar cost of the financing or concession but the dollar amount of any adjustment should approximate the market's reaction to the financing or concessions based on the appraiser's judgement. STATEMENT OF LIMITING CONDITIONS AND APPRAISER'S CERTIFICATION CONTINGENT AND LIMITING CONDITIONS: conditions: The appraiser's certification that appears in the appraisal report is subject to the following 1. The appraiser will not be responsible for matters of a legal nature that affect either the property being appraised or the title to it. The appraiser assumes that the title is good and marketable and, therefore, will not render any opinions about the title. The property is appraised on the basis of it being under responsible ownership. 2. The appraiser has provided a sketch in the appraisal report to show approximate dimensions of the improvements and the sketch is included only to assist the reader of the report in visualizing the property and understanding the appraiser's determination of its size. 3. The appraiser has examined the available flood maps that are provided by the Federal Emergency Management Agency (or other data sources) and has noted in the appraisal report whether the subject site is located in an identified Special Flood Hazard Area. Because the appraiser is not a surveyor, he or she makes no guarantees, express or implied, regarding this determination. 4. 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. 5. The appraiser has estimated the value of the land in the cost approach at its highest and best use and the improvements at their contributory value. These separate valuations of the land and improvements must not be used in conjunction with any other appraisal and are invalid if they are so used. 6. The appraiser has noted in the appraisal report any adverse conditions (such as, needed repairs, depreciation, the presence of hazardous wastes, toxic substances, etc.) observed during the inspection of the subject property or that he or she became aware of during the normal research involved in performing the appraisal. Unless otherwise stated in the appraisal report, the appraiser has no knowledge of any hidden or unapparent conditions of the property or adverse environmental conditions (including the presence of hazardous wastes, toxic substances, etc.) that would make the property more or less valuable, and has assumed that there are no such conditions and makes no guarantees or warranties, express or implied, regarding the condition of the property. The appraiser will not be responsible for any such conditions that do exist or for any engineering or testing that might be required to discover whether such conditions exist. Because the appraiser is not an expert in the field of environmental hazards, the appraisal report must not be considered as an environmental assessment of the property. 7. The appraiser obtained the information, estimates, and opinions that were expressed in the appraisal report from sources that he or she considers to be reliable and believes them to be true and correct. The appraiser does not assume responsibility for the accuracy of such items that were furnished by other parties. 8. The appraiser will not disclose the contents of the appraisal report except as provided for in the Uniform Standards of Professional Appraisal Practice. 9. The appraiser has based his or her appraisal report and valuation conclusion for an appraisal that is subject to satisfactory completion, repairs, or alterations on the assumption that completion of the improvements will be performed in a workmanlike manner. 10. The appraiser must provide his or her prior written consent before the lender/client specified in the appraisal report can distribute the appraisal report (including conclusions about the property value, the appraiser's identity and professional designations, and references to any professional appraisal organizations or the firm with which the appraiser is associated) to anyone other than the borrower; the mortgagee or its successors and assigns; the mortgage insurer; consultants; professional appraisal organizations; any state or federally approved financial institution; or any department, agency, or instrumentality of the United States or any state or the District of Columbia; except that the lender/client may distribute the property description section of the report only to data collection or reporting service(s) without having to obtain the appraiser's prior written consent. The appraiser's written consent and approval must also be obtained before the appraisal can be conveyed by anyone to the public through advertising, public relations, news, sales, or other media. Freddie Mac Form Page 1 of 2 LAVAL, LLC. ( 917) Form ACR - "TOTAL" appraisal software by a la mode, inc ALAMODE Fannie Mae Form 1004B 6-93

24 APPRAISER'S CERTIFICATION: Page # 24 The Appraiser certifies and agrees that: 1. I have researched the subject market area and have selected a minimum of three recent sales of properties most similar and proximate to the subject property for consideration in the sales comparison analysis and have made a dollar adjustment when appropriate to reflect the market reaction to those items of significant variation. If a significant item in a comparable property is superior to, or more favorable than, the subject property, I have made a negative adjustment to reduce the adjusted sales price of the comparable and, if a significant item in a comparable property is inferior to, or less favorable than the subject property, I have made a positive adjustment to increase the adjusted sales price of the comparable. 2. I have taken into consideration the factors that have an impact on value in my development of the estimate of market value in the appraisal report. I have not knowingly withheld any significant information from the appraisal report and I believe, to the best of my knowledge, that all statements and information in the appraisal report are true and correct. 3. I stated in the appraisal report only my own personal, unbiased, and professional analysis, opinions, and conclusions, which are subject only to the contingent and limiting conditions specified in this form. 4. I have no present or prospective interest in the property that is the subject to this report, and I have no present or prospective personal interest or bias with respect to the participants in the transaction. I did not base, either partially or completely, my analysis and/or the estimate of market value in the appraisal report on the race, color, religion, sex, handicap, familial status, or national origin of either the prospective owners or occupants of the subject property or of the present owners or occupants of the properties in the vicinity of the subject property. 5. I have no present or contemplated future interest in the subject property, and neither my current or future employment nor my compensation for performing this appraisal is contingent on the appraised value of the property. 6. I was not required to report a predetermined value or direction in value that favors the cause of the client or any related party, the amount of the value estimate, the attainment of a specific result, or the occurrence of a subsequent event in order to receive my compensation and/or employment for performing the appraisal. I did not base the appraisal report on a requested minimum valuation, a specific valuation, or the need to approve a specific mortgage loan. 7. I performed this appraisal in conformity with the Uniform Standards of Professional Appraisal Practice that were adopted and promulgated by the Appraisal Standards Board of The Appraisal Foundation and that were in place as of the effective date of this appraisal, with the exception of the departure provision of those Standards, which does not apply. I acknowledge that an estimate of a reasonable time for exposure in the open market is a condition in the definition of market value and the estimate I developed is consistent with the marketing time noted in the neighborhood section of this report, unless I have otherwise stated in the reconciliation section. 8. I have personally inspected the interior and exterior areas of the subject property and the exterior of all properties listed as comparables in the appraisal report. I further certify that I have noted any apparent or known adverse conditions in the subject improvements, on the subject site, or on any site within the immediate vicinity of the subject property of which I am aware and have made adjustments for these adverse conditions in my analysis of the property value to the extent that I had market evidence to support them. I have also commented about the effect of the adverse conditions on the marketability of the subject property. 9. I personally prepared all conclusions and opinions about the real estate that were set forth in the appraisal report. If I relied on significant professional assistance from any individual or individuals in the performance of the appraisal or the preparation of the appraisal report, I have named such individual(s) and disclosed the specific tasks performed by them in the reconciliation section of this appraisal report. I certify that any individual so named is qualified to perform the tasks. I have not authorized anyone to make a change to any item in the report; therefore, if an unauthorized change is made to the appraisal report, I will take no responsibility for it. 10. We have not performed any appraisal work or other assignments related to the subject property within the three years preceding to his assignment. 11. Alexander Yampolsky meets the current education requirements of the Appraisal Institute as of the date of this appraisal. If a supervisory appraiser signed the appraisal report, he or she certifies and agrees that: SUPERVISORY APPRAISER'S CERTIFICATION: I directly supervise the appraiser who prepared the appraisal report, have reviewed the appraisal report, agree with the statements and conclusions of the appraiser, agree to be bound by the appraiser's certifications numbered 4 through 7 above, and am taking full responsibility for the appraisal and the appraisal report. ADDRESS OF PROPERTY APPRAISED:,, NY APPRAISER: SUPERVISORY APPRAISER (only if required): Signature: Name: Alexander M. Yampolsky Date Signed: 09/01/2015 State Certification #: or State License #: State: NY Expiration Date of Certification or License: Signature: Name: Date Signed: State Certification #: or State License #: State: Expiration Date of Certification or License: 02/12/2016 Did Freddie Mac Form Did Not Inspect Property Page 2 of 2 Form ACR - "TOTAL" appraisal software by a la mode, inc ALAMODE Fannie Mae Form 1004B 6-93

25 C of O - Page 1 Form SCNLGL - "TOTAL" appraisal software by a la mode, inc ALAMODE Page # 25

26 C of O - Page 2 Form SCNLGL - "TOTAL" appraisal software by a la mode, inc ALAMODE Page # 26