Real Estate Appraisers and Consultants. Appraisal Of. 716 Colorado Avenue ( Lots 21, 22 and the South 5. 0' of 23, Block 43) Original Townsite

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1 pft: HUGH. COITINITR.Y AP PR.MsJA!LJ Real Estate Apprasers Csultants A socuw3.l.' E;S I Apprasal Of j J 20 8th WORRELL & DURRETT PROPERTIES Street ( West 50' Lots 7 & 8, Block 43) 720 Colorado Avenue ( Lots 9 & 20, Block 43) 76 Colorado Avenue ( Lots 2, 22 South 5. 0' 23, Block 43) Orgnal Townste Cty Glenwood Sprngs Garfeld County, Colorado Made For Garfeld County 08 8th Street Glenwood Sprngs, Colorado 860 As Of September 2, 20

2 Y".. 400P". HIGH CQUJ IZR.Y APPRAISAL AsS,OcuAT,S Real Estate Apprasers Csultants est. 979 October 0, 20 Garfeld County 08 8th Street, Sute 403 Glenwood Sprngs, Colorado 860 Attent: Mr. Jm Hackett, Senor Ctract Admnstrator Re: WORRELL & DURRETT PROPERTIES 20 8th Street (West 50' Lots 7 & 8, Block 43) 720 Colorado Avenue ( Lots 9 & 20, Block 43) 76 Colorado Avenue ( Lots 2, 22 South 5. 0' 23, Block 43) Orgnal Townste Cty Glenwood Sprngs Garfeld County, Colorado Dear Mr. Hackett: At your request I have nspected above referenced propertes for purpose estmatng market value leased fee estate nterest n each parcel as s. The 20 8th Street parcel, whch wll be dentfed heren as Parcel 5, s a 2, 500-square-foot ste located norast corner 8th Street Colorado Avenue n Glenwood Sprngs central busness dstrct; t s mproved wth a e-story partal basement fce buldng. The 720 Colorado Avenue parcel, dentfed heren as Parcel 6, s located adjacent to Parcel 5 north, s unmproved. The 76 Colorado Avenue parcel, dentfed as Parcel 7, s a 5, 500-square-foot ste located east sde Colorado Avenue between 7th 8th Streets; t s mproved wth a e-story sales servce/fce buldng. Only value real property s addressed n apprasal; value persal property, trade fxtures, ntangble assets, f any, s not ncluded. It s my understng that apprasal s requred as evdence value n cnect wth possble acqust subject propertes. The apprasal has been made n cformance wth Unform Stards Pressal Apprasal Practce ( USPAP) publshed by Apprasal Stards Board Apprasal Foundat, subject to your August 29, 20 Purchase Order No I have persally nspected subject propertes, collected analyzed all factual data, made ccluss r market value. The followng 70-page summary apprasal report sets forth dentfcat descrpt propertes, apprasal assumpts lmtng cdts, a descrpt scope work performed, pertnent facts about area subject 372 Man Street, P.O. Box 7 Carbdale, CO 8623 ( 970) FAX ( 970)

3 Garfeld County October 0, 20 Page propertes, comparable data, results my nvestgat analyses, reasng leadng to value ccluss. After a thorough analyss pertnent facts data subject to certfcat, assumpts lmtng cdts set forth n ths apprasal report, I have ccluded that market value leased fee estate nterest n Parcel 5 as September 2-, 20, s: FOUR HUNDRED FIFTY THOUSAND DOLLARS 450,000) After a thorough analyss pertnent facts data subject to certfcat, assumpts lmtng cdts set forth n ths apprasal report, I have ccluded that market value leased fee estate nterest n Parcel 6 as September 2, 20, s: THREE HUNDRED TWENTY THOUSAND DOLLARS 320, 000) After a thorough analyss pertnent facts data subject to certfcat, assumpts lmtng cdts set forth n ths apprasal report, I leased fee estate nterest n Parcel 7 as September 2, 20, s: have ccluded that market value THREE HUNDRED TWENTY- FIVE THOUSAND DOLLARS 325, 000) Csderng local real estate market cdts characterstcs subject propertes, I have ccluded that followng marketng perods are approprate to value estmates. These ccluss assume ferng at prces csstent wth apprased values: Parcel 5: Parcel 6: Parcel 7: Sx to twelve mths. Twelve to twenty-four mths Sx to twelve mths Respectfully submtted, Wllam K. Gray, MAI Certfed General Appraser Colorado Lcense No. CG Insttute pprasal

4 Table Ctents General Underlyng Assumpts Lmtng Cdts Summary Facts Ccluss 4 Subject Photographs Identfcat Property Purpose Apprasal Intended Use Apprasal Scope Apprasal Area Data Neghborhood Data Ste Descrpt Buldng Descrpt 25 Hstory 29 Assessment Taxes 29 Zng Hghest Best Use Apprasal Process Sales Compars Approach 36 Income Approach 48 Leased Fee Estate Value Adjustment 58 Recclat Fnal Value Estmate 58 Certfcat Addenda Appraser' s Lcense III Hgh Country Apprasal 789

5 General Underlyng Assumpts lmtng Cdts Ths apprasal report has been made subject to followng assumpts lmtng cdts:. It s assumed that legal descrpt as obtaned from publc records, or provded by ors, s correct. No respsblty s assumed for matters legal n nature, ttle to property s assumed to be good marketable unless orwse stated. 2. The nformat furnshed by ors s beleved to be relable, but author(s) assume no respsblty for ts accuracy. Respsble ownershp competent property management are assumed. 3. Unless orwse stated, property s assumed to be free clear any or all detrmental lens, encumbrances, easements, encroachments, or envrmental volats/ hazards. The author(s) make no representat as to cformance exstng or proposed mprovements to applcable zng or buldng codes. 4. The plot plans, sketches, exhbts n ths report are ncluded ly to assst reader n vsualzng property. The author(s) have made no engneerng survey property; all engneerng s assumed to be correct. 5. It s assumed that all applcable zng use regulats restrcts have been compled wth unless a ncformty has been stated, defned, csdered n ths apprasal report. 6. It s assumed that all requred lcenses, certfcates occupancy or or legslatve or admnstratve authorty from any local, state, or natal governmental, or prvate entty or organzat have been or can be obtaned or renewed for any use whch value estmates ctaned n ths report are based. j 7. The ntegrty ste s assumed to be adequate to support any descrbed mprovements. It s assumed that re are no toxc or orwse hazardous materals wthn ste or mprovements that would reduce utlty, development potental, marketablty, or value. All mprovements are assumed to be structurally sound unless orwse noted. 8. Possess ths report or a copy re does not carry wth t rght publcat. Ths report s ntended for sole exclusve use clent ntended users as dentfed heren. Ths report may not be used for any purpose by any thrd party wthout express wrtten csent appraser, n ly wth proper qualfcat. 9. Dsclosure ctents ths report s governed by By-Laws Regulats Apprasal Insttute. Ner all nor any part ctents ths report (especally any ccluss as to value, dentty author(s), or any reference to Apprasal Insttute or MAI desgnat) shall be dssemnated to publc through advertsng, publc relats, news, sales, or or meda wthout pror wrtten csent approval author(s). All apprasals are subject to revew by Apprasal Insttute up request. Hgh Country Apprasal 789

6 General Underlyng Assumpts Lmtng Cdts (ct' d) 0. The author(s) heren, by reas ths apprasal, are not requred to gve future csultat, testmy, or be n attendance n Court wth reference to property n quest unless arrangements have been made pror to preparat ths report.. The dstrbut, f any, total valuat n ths report between l mprovements apples ly under stated program utlzat. The separate valuats for l buldngs must not be used n cjunct wth any or apprasal, are nvald f so used. 2. Unless orwse stated, persal property / or ntangble assets are not ncluded n value estmate set forth n ths apprasal report. 3. Many types apprasal analyss requre formulat fnancal projects. The achevement any such projects wll be affected by fluctuatng ecomc cdts s dependent up occurrence or future events that cannot be assured. As a result, actual events may well vary from projects, such varats may be materal. 4. Except as dscussed n ths report, author(s) take no respsblty for, reach no fnal ccluss regardng, ndrect costs a project based poltcal processes, ncludng plannng or government functs, whereby changes n stards cstruct, densty, etc. can occur; ndrect charges for hghways, educat, or or tems that can be charged to a project; or varous moratora that can delay a project. Governmental processes can change suddenly substantally affect costs values, users ths report are cauted to make r own nqury apply r own judgement regardng se matters, as applcable. 5. The author(s) press no expertse n law, macroecomcs, or any feld specalzat or than real estate apprasal, base all csderats future (such as nflat rates, vacancy factors, absorpt rates, etc.) up reasable analyss data opns ors, to derve usable opns ly for purpose customary apprasal analyses. The author(s) assume no respsblty for predctng actual events. 6. Ths apprasal report value stated heren shall not be used or reled up n any matters pertanng to any syndcat nor any State or Federal Securtes Exchange Commss regstrats. 7. It s assumed that utlzat l mprovements s wthn boundares or property lnes subject property that re s no encroachment or trespass unless orwse stated n ths report. 8. Any proposed mprovements are assumed to be completed n a good workmanlke manner n accordance wth submtted plans specfcats. 2 Hgh Country Apprasal 789

7 General Underlyng Assumpts lmtng Cdts (ct' d) 9. The appraser s not qualfed to detect hazardous waste / or toxc materals, ncludng fung or mcrobes commly known as mold. Any comment by appraser that mght suggest possblty presence such substances should not be taken as cfrmat presence hazardous waste / or toxc materals. Such determnat would requre nvestgat by a qualfed expert n feld envrmental assessment. The presence substances such as asbestos, ureaformaldehyde foam nsulat, or or potentally hazardous materals may affect value property. The appraser' s value estmate s predcated assumpt that re s no such materal or n property that would cause a loss n value unless orwse stated n ths report. No respsblty s assumed for any envrmental cdts, or for any expertse or engneerng knowledge requred to dscover m. The appraser' s descrpts resultng comments are result routne observats made durng apprasal process. 20. Unless orwse stated n ths report, subject property s apprased wthout a specfc complance survey havng been cducted to determne f property comples wth requrements Amercans Wth Dsabltes Act (ADA). The presence archtectural communcats barrers that are structural n nature that would restrct access by dsabled ndvduals may adversely affect property' s value, marketablty, or utlty. 2. The value estmate set forth heren reles n part up data provded by clent, clent' s representatves, owner, owner' s representatves, pressal csultants, / or or avalable sources. It s respsblty clent to carefully read apprasal report, advse author(s) any errors or omsss whch clent s aware, pror to usng report or makng t avalable to any thrd party. S s 3 Hgh Country Apprasal 789

8 Summary Facts Ccluss Property Descrpt: Parcel 5: 20 8th Street (West 50' Lots 7 & 8, Block 43) Parcel 6: 720 Colorado Avenue ( Lots 9 & 20, Block 43) Parcel 7: 76 Colorado Avenue ( Lots 2, 22 South 5. 0' 23, Block 43) Cty Glenwood Sprngs Garfeld County, Colorado Parcel Number: Parcel 5: Parcel 6: Parcel 7: Property Interest: Leased fee estate Type Value: Market value Date InspectNalue: September 2, 20 L Area: Parcel 5: 2, 500 square feet Parcel 6: 5, 000 square feet Parcel 7: 5, 500 square feet Improvement Descrpt: Parcel 5: One- story partal basement masry- veneered wood-frame fce buldng ctanng 2, 500 square feet ground floor area approxmately 366 square feet basement area; bult 904 Parcel 6: Parcel 7: Ne One-story masry sales & servce/fce buldng ctanng 2, 90 square feet ground floor area; bult 964 Owner Record: Anthy J. Durrett & Stephen J. Worrell 200 Taxes: Parcel 5: $ 9, Parcel 6: $ 6, Parcel 7: $ 9, Zng: C/ 2 Core Commercal Hghest Best Use As If Vacant: Parcel 5: Hold for Offce/ Resdental Development Parcel 6: Hold for Offce/ Resdental Development Parcel 7: Hold for Offce/ Resdental Development As Improved: Parcel 5: Exstng Offce Use Parcel 7: Interm Sales & Servce Use/ future re- development 4 Hgh Country Apprasal 789

9 I Summary Facts Ccluss (ct' d) Leased Fee Estate Market Value Estmates Parcel 5 Parcel 6 Parcel 7 Sales Compars Approach: 465, , , 000 Income Approach: 350, , 000 Value Cclus: 450, , , 000 Estmated Marketng Tme Parcel 5: Parcel 6: Parcel 7: Sx to twelve mths. Twelve to twenty-four mths Sx to twelve mths 5 Hgh Country Apprasal 789

10 Subject Photographs a N.s 4 t Lookng North at Parcel 5 ( 20 Eghth Street) g. OF 5ud4;«., f-., ' x k Lookng Southwest at Rear Parcel 5 6 Hgh Country Apprasal 789

11 Subject Photographs 7 F t Nor R Parcel 5 Interor Vew - Recept Area M k Parcel 5 Interor Vew - Offce Area 7 Hgh Country Apprasal 789

12 Subject Photographs mrt. akxc' J:, 3._" / a gpam, w. w.vv.-+r Lookng East across Colorado Avenue at Parcel 6 ( 720 Colorado Avenue) g It t", Lookng West at Parcel 6 from Alley 8 Hgh Country Apprasal 789

13 5 Subject Photographs 46' S vr2 yf ha y m k r Lookng East across Colorado Avenue at Parcel 7 ( 76 Colorado Avenue) S k r w Lookng West at Rear Parcel 7 from Alley 9 Hgh Country Apprasal 789

14 Subject Photographs Q4,..:, 4. f` c ry- su l t t f. Lookng West alg 8th Street past Parcel 5 4Ntlk + rf 25z+ 6 04,,,, a,,^ yam,, e.` t r, r 3 3''y a z >_ Va, Mr y. Lookng East alg 8th Street past Parcel 5 Hgh Country Apprasal 789

15 r Subject Photographs r" r o 4 I 4., 0 0 F M y a : 57A7'.,:.,.,,'''.",' F e F'u, W NA\ C l ac.\ xa UP' Lookng North alg Colorado Avenue past Parcels 5, 6 7 B. y fx, f. r 7 e: a s wc { I y t t P sw' 09/ 2/ 203 Lookng South alg Colorado Avenue past parcels 7, 6 5 Hgh Country Apprasal 789

16 Subject Photographs 4, l 4 a. tl p a a, ate: r ; ';;?,... t' 5, te': Lookng North across 8th Street at Alley servng Parcels 6 & 7 ll g,, A 7 t '. Lookng South alg Alley past Parcels Hgh Country Apprasal 789

17 Identfcat Property The subject propertes are three ctguous parcels located north sde Eghth Street east sde Colorado Avenue n central busness dstrct (CBD) cty Glenwood Sprngs n souastern Garfeld County, Colorado. The propertes are referred to n ths apprasal report by r tax map parcel numbers. Parcel 5, sournmost parcel, s located norast corner 8th Street Colorado Avenue. It ctans 2, 500 square feet s mproved wth a e-story partal basement fce buldng. The property' s street address s 20 Eghth Street, Glenwood Sprngs, Colorado 860. The parcel s descrbed by ts Garfeld County tax map parcel number ( ) ts Garfeld County Treasurer' s schedule number (R32026). The parcel s legally descrbed as west feet Lots 7 8, Block 43, Orgnal Townste, Cty Glenwood Sprngs, Garfeld County, Colorado. Parcel 6, central parcel, s located east sde Colorado Avenue 50 feet north ts ntersect wth Eghth Street. It ctans 5, 000 square feet s unmproved asde from pavng lscapng. The property' s street address s 720 Colorado Avenue, Glenwood Sprngs, Colorado 860. The parcel s descrbed by ts Garfeld County tax map parcel number ( ) ts Garfeld County Treasurer' s schedule number (R320042). The parcel s legally descrbed as Lots 9 20, Block 43, Orgnal Townste, Cty Glenwood Sprngs, Garfeld County, Colorado. Parcel 7, norrnmost parcel, s located east sde Colorado Avenue 00 feet north ts ntersect wth Eghth Street. It ctans 5, 500 square feet s mproved wth a e- story sales servce/fce buldng. The property' s street address s 76 Colorado Avenue, Glenwood Sprngs, Colorado 860. The parcel s descrbed by ts Garfeld County tax map parcel number ) ts Garfeld County Treasurer' s schedule number (R32027). The parcel s legally descrbed as Lots 2 22 south feet Lot 23, Block 43, Orgnal Townste, Cty Glenwood Sprngs, Garfeld County, Colorado. Purpose Apprasal The purpose ths apprasal s to estmate market value, as defned heren, leased fee estate nterest n subject propertes as y exst date apprasal. The leased fee estate nterest s defned by The Dctary Real Estate Apprasal, Fourth Edt, as " an ownershp nterest held by a llord wth rghts use occupancy cveyed by lease to ors. The rghts lessor ( leased fee owner) leased fee are specfed by ctract terms ctaned wthn lease." Market value s defned by Comptroller Currency ( 2CFR34. 42(g)) as " most probable prce whch a property should brng n a compettve open market under all cdts requste to a far sale, buyer seller each actng prudently knowledgeably, assumng prce s not affected by undue stmulus. Implct n ths defnt s csummat a sale as a specfed date passng ttle from seller to buyer under cdts whereby:. buyer seller are typcally motvated; 3 Hgh Country Apprasal 789

18 Purpose Apprasal ( ct' d) 2. both partes are well nformed or well advsed, actng n what y csder r own best nterests; 3. a reasable tme s allowed for exposure n open market; 4. payment s made n terms cash n Unted States dollars or n terms fnancal arrangements comparable reto; 5. prce represents normal csderat for property sold unaffected by specal or creatve fnancng or sales ccesss granted by anye assocated wth sale." Exposure tme, as referenced n " c" above, s defned as 6 to 2 mths for Parcels 5 7, 2 to 24 mths for Parcel 6. Intended Use Apprasal It s my understng that apprasal s to be used n cnect wth a potental acqust subject propertes by clent. Garfeld County s clent ntended user. Ths apprasal s not ntended to be used for any or purpose, or by any or party, wthout our wrtten csent. Scope Apprasal J Ths apprasal assgnment ncludes a physcal nspect photographng subject propertes an nspect all comparable sales rentals. The scope ths apprasal ncludes ascertanng characterstcs area neghborhood. The subject property was nspected for purposes ths apprasal September 2, 20, whch s valuat date. L area s based plat Orgnal Townste Cty Glenwood Sprngs. Buldng area s based publc records (Garfeld County Assessor) my persal nspect. The scope ths apprasal ncludes research natal, regal, local ecomc cdts, nvestgat applcable zng, development a hghest best use cclus. Based up my cclus hghest best use, each three tradtal approaches to value would be applcable to Parcels 5 7. Based dscuss agreement wth clent, I have omtted cost approach, typcally least relable ndcator value for property ths type. The sales compars ncome approaches, most relable ndcators value for such property, are both used. The omss cost approach does not materally affect credblty value estmate. Parcel 6 s vacant l, ly sales compars approach s applcable. Comparable sale rental data s collected from sources that nclude, but are not lmted to, Realtors, buyers, sellers, attorneys, applcable Multple Lstng Servce (MLS). All market data has been cfrmed wth a party to transact, a Realtor or attorney nvolved n sale or lease, Multple Lstng Servce publshed (or electrcally transmtted) data, / or an appraser who s beleved to csttute a relable source. The geographc area ncluded n my nvestgat comparable sale rental nformat s lower valley sect Roarng Fork Rver valley, whch ncludes town Carbdale cty Glenwood Sprngs; ths s csdered adequate based up qualty quantty avalable market data wthn ths area. 4 Hgh Country Apprasal 789

19 0, Whte Rver Aar# a Forest 04J0 Io ero Gypsum I 47 Castle S.,- k Gavald Creak Glen O' Slat'.te Afe E rng0. 8Z Garfeld Creel Ca dals late WOE Area s s Sk Sunlght I E Jebel e ff t, 33, a Snowmass Woo No Creek r or A tt mot, t"" waver gl to c st o asp 0 - ea snowmass A, ng- Redste Sk Area rl'a p{;. 8. 4, 5 Aspen. _ As' r: w. a,f a t e,5 Hghls mo IS F ft,. CO Sk Area c ; u, t t t vz l g f fr. Area Map 5 Hgh Country Apprasal 789

20 I Area Data Introduct. Glenwood Sprngs s located n west-central Colorado at junct Interstate Route 70 Colorado Hghway 82 cfluence Colorado Roarng Fork rvers. The cty serves as a prmary trade center for a sgnfcant port west-central Colorado. It s a noted tourst destnat, home world' s largest naturally heated outdoor swmmng pool centrally located wthn Whte Rver Natal Forest. It les at entry to Roarng Fork Rver valley, whch ctans noted Aspen/ Snowmass resort area. Transportat. Interstate 70 s prmary hghway artery servng cty, provdng access to Val Denver (40 mles) to east New Castle, Rfle, Gr Junct ( 88 mles) to I West. Hghway 82 s ly major north-south route, provdng access to Aspen Roarng Fork Valley to souast. Intercty bus servce s provded by Greyhound, ral passenger freght servce to Denver Gr Junct s provded by Amtrak Sourn Pacfc I Ralroad. Regularly scheduled arlne servce s avalable at Aspen/ Ptkn County Arport, 37 mles to souast, at Eagle County Arport, about 24 mles east Glenwood Sprngs. Regular bus servce lnks Glenwood Sprngs wth Aspen remer Roarng Fork Valley. Populat. Populat fgures for Roarng Fork valley are presented n followng table: Roarng Fork Valley Populat Fgures G 980_ y 990 4`% o Change 2000 % Change 200 % Change Aspen 3, 678 5, / 5, % 6, / Sn t owrnass Vllage 999', 449, 45 0/ 0, % 2, % u Ptkn County 0, 338 2, % 4, % 7, % Basalt g,,, 28, 3 2% n 2,68., 7%.. 85 A3..9% Garfeld County 22, 54 29, % 43, % 56, ! z. _{ caarbxo da e. l. '± t d e" y l- 2; , wz W; 44 % 4 96 s 73, 0/, _ 6,427 7/ Glenwood Sprngs 4, 637 6, % 7, % 9, % Source: U. S. Census Bureau Populat n Roarng Fork valley ncreased at steady to rapd rates over most past two decades. The hghest growth rates were experenced n mddle port valley between Carbdale Basalt, ths pattern s antcpated to ctnue. Glenwood Sprngs' growth potental s somewhat lmted by physcal cstrants. A substantal port populat ncrease n Glenwood Sprngs between was result major annexats n prevously unncorporated west Glenwood area. Garfeld County has also seen rapd populat growth over past 20 years. At ths tme re appears to be a lmted declne n populat throughout area. Ths declne probably began n late 2007 or early 2008, s lkely to have ctnued through date apprasal. Ecomy. The Glenwood Sprngs area s major trade center between Val Gr Junct has hstorcally accounted for nearly 70% all commercal ndustral trade volume n Garfeld County. It serves an area wth a radus 40 mles, havng an estmated populat 70,000 to 75, 000, s prmary trade center for locats wthn a 20 mle radus, whch 6 Hgh Country Apprasal 789

21 Area Data (ct' d) ctan about 40,000 resdents. Retal trade s currently ccentrated alg Gr Glen Avenues (Hghway 82), n new Glenwood Meadows development west central busness dstrct, at Glenwood Sprngs Mall n west Glenwood area, n Roarng Fork Marketplace, wth Wal-Mart store, located at south end cty Glen Avenue. The Cty' s locat Colorado' s major east-west hghway ly wnter access to Aspen greatly enhances ts retal lodgng ndustres. Although toursm retal actvty are major ecomc actvtes wthn Cty lmts, or major employment sources n area, ncludng energy development, agrculture cstruct, provde a farly dverse ecomc base. Wholesale retal trade, health care, government are also major employment sources n cty. The general commercal ecomy appears reasably good, although actvty s down sgnfcantly, as measured by sales tax recepts, from Wal-Mart exped r Glenwood Sprngs store approxmately 70% to over 00, 000 square feet n 992. Gart Brors opened a Glenwood Sprngs store n 993 ( moved to Glenwood Meadows n 2005), Amercan Furnture Warehouse opened a 45, 000- square-foot faclty n 995. Development commercal ports Glenwood Meadows project, whch may nclude up to 475 resdental unts 490,000 square feet or more commercal space, s largely complete. Ths development ncludes a Target a Lowe' s; se have quckly become foremost retal destnats n eastern Garfeld County. Ths project has more than fset negatve effect a new Wal- Mart Supercenter (2003) located n Rfle, 26 mles west, whch had been largely respsble for declnng sales tax revenues n Glenwood Sprngs n The openng a Beall' s department store n Glenwood Sprngs Mall n late 2007 furr strengned dentty West Glenwood area as domnant regal retal destnat n area, although ths store has snce closed. Retal sales actvty generally stablzed n 200 after two years steady substantal declne, 20 has seen csstent mnor ncreases n retal actvty. Although toursm- related revenues dropped early n ecomc downturn, re was a slght recovery n 200, expected to ctnue n 20. Declnng populat ecomc actvty result from heavy relance area ecomy cstruct/ development,, n Colorado Rver valley west Glenwood Sprngs, energy extract (prncpally natural gas). Both se sectors have declned substantally snce late Development cstruct s nearly at a ststll throughout area, natural gas explorat product have declned as well. Because antcpated lag n recovery development/cstruct sector, t s lkely that area' s ecomc recovery wll lag relatve to areas enjoyng a more dverse ecomc base. Real Estate Trends. Glenwood Sprngs real estate markets have been sgnfcantly mpacted by overflow commercal resdental dem from resort-orented Aspen/ Snowmass area Roarng Fork Valley to souast; re has also been some nfluence from Val/ Beaver Creek area n recent years. Energy development n New Castle to Debeque corrdor to west s a relatvely new nfluence that had a dsproportate mpact Glenwood real estate markets. Pror to latest energy boom, much growth n those areas was related to dem for relatvely affordable housng from Roarng Fork Valley employees; nfluence secd home owners, zng, topography, extensve publc ls cstrcted supply developable l between Glenwood Aspen establshed unusually hgh values relatve to ncome. Energy development s a powerful ecomc generator that ncreased local under-supply n most real estate markets, although a much smaller nfluence s evdent today as explorat has declned. 7 Hgh Country Apprasal 789

22 I Area Data (ct' d) Local real estate markets typcally perform cyclcally. Perods rapd or boom- level growth are commly followed by adjustment perods reflectng stable to slghtly declnng values lmted development. The begnnng decade saw relatvely strg market cdts followed by general stablty between Unprecedented growth value ncreases were experenced from 2005 through end 2007; ths perod saw record sale actvty exceptal marketablty. Increasngly adverse ecomc credt market cdts snce late 2007 have dramatcally slowed sales; accordng to local MLS, sales commercal property n around Glenwood Sprngs declned from 25 n 2007 to eght n 2008 sx n 2009 fve n 200; re have been three sales commercal real estate to date n 20. The Glenwood Sprngs area experenced moderate new commercal ndustral development durng 990' s early 2000' s. Ths ncluded new redeveloped lodgng facltes, whch s a major commercal use n cty. More lmted actvty occurred between n respse to natal regal ecomc cdts. Rapd growth occurred between , but has dsappeared snce md The ly cstruct nvolved complet projects already n progress; re have been no sgnfcant starts over two years. As depth ecomc dstress has become more apparent, most market partcpants antcpate that general weakness wll persst for at least e to two years. Ths wll delay major development n most market segments. Glenwood' s commercal market s susceptble to future compett from well- located El Jebel Carbdale areas n mddle Roarng Fork Valley. Whle development re has mostly provded communty neghborhood shoppng, t s lkely that md box possbly bg box retal facltes wll be developed wthn foreseeable future. Wllts Town Center n El Jebel s lkely to provde sgnfcant retal compett ce current ecomc downturn passes; re are plans to cstruct a Whole Foods store re, or local regal retalers would lkely follow. Bg box development n Carbdale s also possble, although ths wll lkely nvolve sgnfcant delay n current poltcal ecomc clmate. In spte ths compett, I antcpate that Glenwood Sprngs wll reman prncpal trade center for area; t wll also retan ts strg toursm ecomy. Communty Resources. Neghborhood regal shoppng facltes are avalable n Glenwood Sprngs, neghborhood shoppng facltes are avalable n Carbdale New Castle. Addtal regal shoppng resources are avalable 30 mles to souast n Aspen, 65 mles east n Val resort area, 90 mles southwest n Gr Junct area. Educatal facltes nclude a generally good publc school system Colorado Mountan College, a junor college located souast Glenwood Sprngs ferng both undergraduate adult educat programs. Health servces are provded by Valley Vew Hosptal, e western Colorado' s better medcal facltes. Polce protect s provded by muncpal county forces as applcable, fre protect by Glenwood Sprngs Carbdale Fre Departments. Clmate, envrment abundant recreatal opportuntes are major elements n area' s ecomy. Wnter sports facltes nclude four Aspen sk areas Sunlght Sk Area, excellent nordc skng opportuntes that nclude groomed tral systems n Aspen Carbdale areas. The Hot Sprngs Pool n Glenwood Sprngs s a unque resource a yearround tourst destnat. The area s surrounded by Whte Rver Natal Forest, whch fers exceptal scenc beauty, hkng, campng, huntng f-road bkng opportuntes. The area' s rvers, ncludng Colorado, Fryng Pan, Roarng Fork, Crystal, are noted for excellent 8 Hgh Country Apprasal 789

23 w Pte- Yom. Glenwood Meadows t f l; A t,......).- 4 m,,,,... 4.,,. 0 \ Nov,- l lre e. 2. Subject X. _... ( rl,-- ',,, - R ljy 078 y*.., J-. hll 3 c l IP re: f J Ill; molt wr, Lolfcl,, e,, n L ' c. \ Neghborhood Map v,.. 664t.r... Z : Hgh Country Apprasal 789

24 Area Data (ct' d) fshng whte-water recreat. These envrmental recreatal attrbutes are prmary reas for strength area' s toursm-orented ecomy. Summary. Glenwood Sprngs lower Roarng Fork Rver valley have experenced steady to rapd growth n both populat trade over past few decades due to attractve clmate excellent locat wth respect to resort actvty, ecomc development, transportat systems, recreatal facltes. These factors should, subject to natal ecomc cdts, ctnue to attract ecomc actvty preserve Glenwood' s key role as a regal trade center. Glenwood surroundng areas weared poor natal ecomy between md- 200 md wthout major value or marketablty mpacts. Boom- level growth, fueled by low nterest rates nearby natural gas explorat product, occurred over followng three years. The current recess has had a substantal mpact local ecomc market cdts, wth drops n actvty, rents, values evdent snce early Slowng cstruct tourst actvty a declne n new natural gas explorat reduced local employment ecomc actvty over short term. The area s well posted to beneft from mprovng crcumstances, although full recovery may take several years. Furr ecomc market declne are lkely before cdts mprove. Neghborhood Data Introduct. The subject property s located n Glenwood Sprngs central busness dstrct CBD), whch s defned by boundares Cty' s C/ 2 Core Commercal zng dstrct. The CBD s located er sde Gr Avenue (Colorado Hghway 82) between Sourn Pacfc Ralroad rght--way north th Street to south. It extends / 2 block to three blocks east Y block to two blocks west Gr Avenue. It s fve blocks wde alg ts norrn boundary, e block wde at ts sourn edge. The neghborhood map facng page shows neghborhood hghlghted n yellow, subject locat. Access. Gr Avenue, prmary arteral servng neghborhood, cnects to Glenwood Sprngs nterchange (# 6) Interstate 70 just north Colorado Rver provdes ly four-seas hghway access to Roarng Fork Valley. It experences heavy traffc volumes through downtown; Colorado Department Transportat reported an average daly traffc count 23, 000 n 200 (down from 25, 00 n 2009). Or major north- south streets nclude Colorado Avenue, west Gr Avenue, Cooper Blake Avenues to east. 7th 8th Streets are prncpal east-west routes servng neghborhood. 7th Street currently cnects CBD to Mdl Avenue to west, provdng alternate access to Interstate 70 prmary access to Glenwood Meadows. The Cty ntends to extend 8th Street across a former ralroad rght-way to west, provdng more drect downtown access to Mdl Avenue. L Use. Retal, restaurants, fce, nsttutal uses domnate neghborhood' s central port; csderable resdental development exsts n norastern sect alg Blake Avenue. Retal uses are ccentrated alg Gr Avenue between 7th 9th streets. Secdary retal areas nclude Cooper Avenue between 7th 8th streets; 8th Street between Cooper Colorado avenues; 9th Street between Gr Cooper avenues. The 00% retal locat s ntersect Gr Avenue 8th Street. Offce uses are comm west Gr between 7th 0th Streets, alg Gr Avenue south 9th Street. Insttutal uses nclude Garfeld County Courthouse, Offce jal buldngs; Cty fces; Post Offce; 20 Hgh Country Apprasal 789

25 Neghborhood Data (ct' d) lcmc's admnstratve buldng; a fre stat; headquarters Whte Rver Natal Forest. Development Trends. Downtown Glenwood s around 90% developed. Future l use changes wll mostly nvolve transt from exstng resdental uses around neghborhood permeter, wth fce hgher densty resdental development representng most lkely uses. There are several n-fll stes alg Gr, Cooper, Colorado avenues that provde surface parkng for adjacent fce propertes. Ths parkng s essental to those uses lmts potental for new development. There s lg-term potental for redevelopment expans undermproved propertes downtown. Downtown has been negatvely mpacted by outlyng retal projects over years, most recently by openng Glenwood Meadows. The CBD has a compettve dsadvantage due to severe traffc cgest lmted parkng. However, negatve mpacts are moderated by ts advantageous pedestran-accessble proxmty to major toursm destnats lodgng facltes, downtown retal actvty grew steadly between 2004 md The presence major nsttutal uses ensures steady dem for downtown fce space,. although ths has been weakest market segment over past few years. Local resdental markets, usually undersuppled, are also showng much reduced dem. Improvng nvestor cfdence fueled steady downtown development real estate sale actvty between Much ths optmsm dsspated over followng three years. There are few prospects for major prvate-sector changes over next three to fve years. However, a publc/prvate partnershp that ncludes CMC, Glenwood' s Downtown Development Authorty DDA), Garfeld County Lbrary Dstrct (Lbrary), Cty, s studyng a revtalzat 3 program nvolvng a publc parkng structure, a new lbrary, exped CMC facltes, possbly new commercal resdental space. On Aprl, 20, CMC Cty jtly purchased U. S. Bank Buldng at 802 Gr Avenue, a small buldng several vacant stes alg Cooper Avenue south 8th Street. These wll be core proposed redevelopment, although or nearby propertes may also be nvolved. Ths proposal, partcularly CMC' s plan to I fer classes n ths locat, has potental to substantally ncrease downtown actvty. Lmted dem for upper floor commercal space suggests that future prvate development wll nclude more mxed use projects featurng commercal space ground floor fce / or resdental unts above. Propertes wth secdary commercal exposure, such as those alg Blake Ptkn Avenues, wll lkely see mxed use or resdental development redevelopment. Summary. Downtown Glenwood Sprngs s an attractve commercal dstrct devoted prmarly to provdng communty tourst retal restaurant servces. Numerous nsttutal governmental uses also have sgnfcant mpact. There are few resdental uses, but recent development patterns suggest ths wll change, partcularly n buldng ste locats wth secdary commercal exposure f Gr Avenue. Downtown has been sgnfcantly nfluenced by recent ecomc dstress s now experencng hgher vacancy, declnng rents values, no development actvty. Prospects major publc/prvate nvestment could hasten downtown' s recovery, although we beleve that at least a two to three-year start-up tme wll be nvolved. Ths neghborhood s well posted to beneft from antcpated future growth has average to good lnkages for retal, fce, resdental uses. Lmted parkng heavy traffc alg Gr Avenue reduce neghborhood appeal, whch s judged above average overall. 2 Hgh Country Apprasal 789

26 ter,, r-,-- r.-=,a Colorado Rver Sl r pp M... r 7th Street I s 0.,., 5.- c, 0 Ata. IR -. # 9 ltt. - 4*. I,4,. :..,., a4,, M Sth Street aw r 4 s j r, t F F f y. p. I A esmsellalt MRT 44 t a.` xoo7 Q I m to Ut.; 002 :,... z90-3,,,,- 39` 32 ' N 7' P' 33 CMIllev ETa2, r Eta alt 6c53' t Aeral Image Subject Locat. 22 Hgh Country Apprasal 789

27 Ste Descrpt The subject propertes are located north sde Eghth Street east sde Colorado Avenue, occupyng southwestern port a block bounded by Gr Avenue east, Eghth Street south, Colorado Avenue west, Seventh Street north. The port CBD whch ncludes subject parcels s shown aeral mage facng page, whch also shows locat shape parcels. subject Parcel 5 s located norast corner Eghth Street Colorado Avenue. It square, s wth 50 feet frtage each street. The parcel ctans an area 2, 500 square feet, 0. or 057 acres. It les at grade Eghth. Street s level; generally Colorado Avenue slopes downward from south to north, ste' s frtage that street ranges from at to slghtly grade. above Both Eghth Street Colorado Avenue two- are asphalt- lane surfaced publc streets n average cdt. Eghth Street has parallel parkng lanes sdes, both whle Colorado Avenue has a parallel parkng lane ts east sde dagal parkng ts sde. west Both streets have ccrete curbs, ccrete paver brck sdewalks, antque- style street lghtng. Avalable publc utltes nclude sewer, water, gas, natural electrcty, telephe servce. The subject property s beleved to be cnected to each servces. se Parcel 5 s fully mproved wth a estory buldng. fce Parcel 6 s located east sde Colorado Avenue 50 feet north ts ntersect wth Eghth Street adjacent to Parcel 5 north. It rectangular, s wt h 50 feet frtage Colorado Avenue, a depth 00 feet, 50 feet frtage at alley alg ts eastern boundary. It ctans 5, 000 square feet, 0. or acres. 5 It les slghtly above grade Colorado Avenue, slopes gently downward from south to north from east to west. Colorado Avenue mprovements, publc as well as avalable publc utltes, are as descrbed for 5. Parcel The parcel s fully ccrete surfaced except for two lscaped planter areas n ts northwest southwest corners. It s used for parkng for 5, Parcel has access from both Colorado Avenue alley. Parcel 7 s located east sde Colorado Avenue 00 feet north ts ntersect wth Eghth Street adjacent to Parcel 6 north. It rectangular, s wth 55 feet frtage Colorado Avenue, a depth 00 feet, 55 feet frtage alley alg ts eastern boundary. It ctans 5, 500 square feet, 0. or acres. 26 It also les slghtly above grade Colorado Avenue. It s generally from level south to north, wth a low retanng wall separatng t from Parcel 6 to south an foot-3- approxmately hgh retanng wall subject buldng' s foundat separatng from t adjacent property to north ( an unmproved parcel owned by Cty Glenwood Sprngs). The parcel s also generally level from east west.to Colorado Avenue mprovements, publc as well as avalable publc utltes, are as descrbed for 5. Parcel The norrly 30 feet ste s mproved wth an exstng buldng, from apparently east property lne to a pt approxmately 27 from feet street frtage. The area n frt buldng ncludes an approxmately foot-8- wde ccrete drveway, a ccrete sdewalk, lscapng ncludng lawn, shrubs, trees ste. The sourly 25 feet ste s ccrete-a surfaced parkng area for ts entre depth; ths s accessble from both street alley. I have not been provded wth a survey ttle or commtment/ nsurance polcy for any subject propertes. Property dmenss are based legal descrpts plat Orgnal Townste. My descrpts are also based up or publc records my property nspects. I am unaware any specfc detrmental easements or encumbrances any parcels. The full or partal " zerolotlne" buldng stng Parcels 5 7 vrtually ensures that some form encroachment subject property or to adjacent propertes does exst, property 23 Hgh Country Apprasal 789

28 Basement locat s approxmate Basement Dmenss estmated based nteror measurement 50. 0' 0 co 5.0' o One-Story & Basement Offce 9.0' One-Story Offce I 24.0' ' South 8th Street Frtage) Parcel 5 Buldng Sketch 24 Hgh Country Apprasal 789

29 I I Ste Descrpt (ct' d) owner advses me that re s a party wall agreement wth property adjng Parcel 5 east. The buldng has ccrete steps wth steel ralngs for access to a secdary access near ts northwest corner; se mprovements appear to be located n Colorado Avenue rght--way, I have assumed that some form lease or agreement exsts permttng ths encroachment. Exteror awnngs over buldng' s wndows also overhang both street rghts--way, I have assumed that se encroachments are also permtted. I have assumed that property s free clear any detrmental easements, encroachments, cdts or encumbrances. The subject propertes are not located wthn any desgnated flood hazard area, nor are y located wthn a specal mprovement dstrct. I have not been provded wth a sol engneerng report subject propertes. Sol dranage cdts n ths area have supported relatvely ntense development for 00+ years. The buldng Parcel 5 was reportedly cstructed n 904. The property has been used as an fce buldng for several decades. The buldng Parcel 7 was reportedly cstructed n 964. It has been used for varous purposes, s currently used by an auto glass busness. No known use property fers any unusual potental for envrmentally hazardous materals or cdts. My nspect dd not reveal any evdence such materals or cdts; I have no expertse n detect or dentfcat hazardous substances. The property' s known hstory use would ndcate lttle, f any, potental for hazardous materal ctamnat; a prudent buyer or nvestor mght csder obtanng a Level I Envrmental Assessment property. The estmate value set forth n ths apprasal report s based assumpt that re are no envrmentally hazardous materals, substances, or cdts or n subject propertes. The subject propertes are three adjacent parcels whch enjoy a good secdary CBD locat. They are bordered by Gr Avenue commercal propertes to east, fce commercal propertes to south, Garfeld County Courthouse complex to west, publc surface parkng lots to north. They are readly accessble cvenent to f-street publc parkng. Buldng Descrpt Two subject propertes, Parcel 5 Parcel 7, nclude buldng mprovements. Parcel 6 s unmproved used as a surface parkng lot for beneft Parcel 5. Parcel 5 s mproved wth a e- story partal basement fce buldng; ts cfgurat s shown n buldng sketch facng page. The followng s a summary descrpt mprovements: TYPE: One-story partal basement wood frame fce buldng YEAR BUILT: 904 ( per publc records); 989 major remodel; approx J exteror remodel FLOOR AREA: Ground Floor: 2, 500 square feet Basement: approxmately 366 square feet 3 FOUNDATION: Ste, poured ccrete 25 Hgh Country Apprasal 789

30 Buldng Descrpt (ct' d) EXTERIOR WALLS: ROOF: FLOOR COVERINGS: INTERIOR WALLS: Wood frame wth brck veneer south west walls, stucco north wall. East wall s a party wall wth adjacent buldng. Assumed average nsulat Flat, wood structure, membrane cover. R- 30 nsulat assumed Good qualty commercal- grade wall-to-wall carpet, ceramc tle. Basement area has commercal- grade wall-to-wall carpet Wood frame, panted drywall. Celngs are a mx suspended acoustc tle panted drywall. Cference room has boxed celng WINDOWS: ELECTRICAL: PLUMBING: HVAC: OTHER: Good qualty alumnum-frame sldng double-hung rmal wndows; steel framed corrugated steel exteror awnngs Modern crcut-breakered electrcal servce; predomnantly recessed celng fxtures, some flush surface-mount fluorescent fxtures. Basc fxtures n basement. Two two-fxture rest rooms. Double stanless steel snk n ktchen/work room. Approxmately 40-gall electrc water heater. Forced ar heatng refrgerated ar cdtng provded by sngle ro-mount natural gas/ electrc HVAC unt. Ktchen/ work room ncludes bult-n cabnets/ countertop. Bult-n bookshelves n cference room The Parcel 5 buldng has been used for fce purposes snce at least 989. It s currently fully occuped by a law frm whose three prncpals nclude two owners property. The 2, 500 square feet ground floor area s fully fnshed for fce use. The eastern port buldng, from frt (south) to back, ctans a well-fnshed recept area, two rest rooms, a cference room. The central port ncludes an open fce area for most ts depth, wth a sngle prvate fce at rear a hallway provdng access to basement star ktchen/ work room. The western port ncludes, frt to back, three prvate fces ktchen/ work room. The man entry s located near souast corner buldng n recept area. A secdary entrance/ ext s located n ktchen/ work room near northwest corner buldng. The subject buldng s csdered to be n above average cdt, wth an effectve age approxmately 5 to 20 years due to extensve remodelng, ncludng attractve exteror remodel whch occurred about fve years ago. There s lttle apparent deferred mantenance; noted a small hole n drywall celng n basement area. The ro cover s less than fve years old. The buldng has good utlty for ts current sngle-occupant fce use, wth small basement area ferng -ste storage space. It could potentally be dvded nto two tenant spaces, although ths would nvolve substantal expense could result n some loss rentable area. 26 Hgh Country Apprasal 789

31 East ( Alley) 30' WHS 73' 290 sr 73' 30' West ( Frt) Parcel 7 Buldng Sketch 27 Hgh Country Apprasal 789