LUBAWY & ASSOCIATES, INC South Durango Drive, Suite 100 Las Vegas, Nevada 89117

Transcription

1 A SUMMARY APPRAISAL REPORT OF Acres of Vacant Land OWNED BY Route 215 Investors LLC LOCATED AT The Northwest Corner of Centennial Parkway and Valley Drive, North Las Vegas, Clark County, Nevada FOR THE PURPOSE OF Forming an Opinion of the As Is Market Value As of May 19, 2009 DATE OF REPORT May 29, 2009 PREPARED FOR Mr. Mark Hawkins Fennemore Craig P.C. 300 S. Fourth Street Suite 1400 Las Vegas, NV APPRAISAL COMPLETED BY 3034 South Durango Drive, Suite 100 Las Vegas, Nevada 89117

2 May 29, 2009 Mr. Mark Hawkins Fennemore Craig P.C. 300 S. Fourth Street Suite 1400 Las Vegas, NV Re: The Northwest Corner of Centennial Parkway and Valley Drive, North Las Vegas, Clark County, Nevada Dear Mr. Hawkins: As requested, I have prepared a Summary Appraisal Report of the vacant parcel of land located at the northwest corner of Centennial Parkway and Valley Drive, North Las Vegas, Clark County, Nevada. As of the date of inspection the site exists as vacant unimproved land. The parcel can further be identified as Clark County Assessor s Parcel Numbers The subject parcels contain a total of gross acres per the Clark County Assessor. The subject property is zoned PUD (Planned Unit Development) with a land use plan of Multifamily Residential District which allows up to 25 units per gross acre. Based on the allowed density, the maximum number of dwelling units on the site would equate to 602. I have made an inspection of the property and have investigated and analyzed all the necessary data for the purpose of arriving at a supportable opinion of the current market value of the land. The supporting data, analyses and conclusions used to form an opinion of the market value of the property are contained in the accompanying report and addenda. This letter by itself should not be construed as a complete report. This is a Summary Report intended to comply with the reporting requirements set forth under Standards Rule 2-2 (b) of the Uniform Standards of Professional Appraisal Practice. It presents only summary discussions of the data, reasoning, and analyses that were used in the appraisal process to develop the appraisers opinion of value. Supporting documentation concerning the data, reasoning, and analyses is retained in the appraisers files. The depth of discussion contained in this report is specific to the needs of the client and for the intended use stated below. The appraisers are not responsible for unauthorized use of this report. The purpose of this appraisal report is to form an opinion of the as is market value of the subject property. The fee simple ownership rights have been appraised.

3 Mr. Mark Hawkins Page 2 The client and the intended user of this report is Key Bank Counsel. The intended use is for asset monitoring. Based upon an analysis of the market data and subject to the assumptions and limiting conditions contained within this report, I have formed an opinion of the as-is market value of the subject property as of May 19, 2009 at: TWELVE MILLION FORTY THOUSAND DOLLARS ($12,040,000) The opinion of market value has been predicated upon an exposure time of 12 to 18 months. The exposure time is based on the comparable sales used in this report and on discussions with real estate brokers active in the subject area. Like the exposure time, the marketing period has also been estimated at 12 to 18 months. The aforementioned market value opinion is contingent upon the general assumptions and limiting conditions contained on pages 1 and 2 of this appraisal. The acceptance of this appraisal assignment and the completion of the appraisal report submitted herewith are not contingent upon any extraordinary assumptions or hypothetical conditions. Thank you for giving me the opportunity of appraising this property. If I may be of further assistance, please do not hesitate to contact me. Sincerely, Matthew Lubawy, MAI Nevada License #A CG License Expires April 30, 2011

4 Table of Contents TABLE OF CONTENTS ASSUMPTIONS AND LIMITING CONDITIONS... 1 GENERAL ASSUMPTIONS AND LIMITING CONDITIONS... 1 EXTRAORDINARY ASSUMPTIONS... 3 CERTIFICATION OF VALUE... 4 SUMMARY OF IMPORTANT FACTS AND CONCLUSIONS... 6 INTRODUCTION... 8 IDENTIFICATION OF THE PROPERTY... 8 LEGAL DESCRIPTION... 8 CENSUS TRACT NUMBER... 9 PURPOSE OF APPRAISAL... 9 CLIENT OF APPRAISAL... 9 INTENDED USER OF APPRAISAL... 9 INTENDED USE OF APPRAISAL... 9 EFFECTIVE DATE OF VALUATION... 9 DATE OF APPRAISAL REPORT... 9 USPAP COMPETENCY PROVISION... 9 DEFINITION OF MARKET VALUE... 9 MARKET VALUE AS- IS ON APPRAISAL DATE PROPERTY RIGHTS APPRAISED EXPOSURE TIME MARKETING TIME CURRENT OWNERSHIP/ OWNERSHIP HISTORY SCOPE OF APPRAISAL AREA / CITY DESCRIPTION AND ANALYSIS SUMMARY OF CLARK COUNTY DATA NEIGHBORHOOD DESCRIPTION AND ANALYSIS NEIGHBORHOOD BOUNDARIES NEIGHBORHOOD DESCRIPTION NEIGHBORHOOD DEMOGRAPHICS TRANSPORTATION PROPERTY TAXES UTILITIES/SERVICES EXTERNAL INFLUENCES HOUSING MARKET SUMMARY MULTI-FAMILY RESIDENTIAL MARKET MARKET AREA SITE DESCRIPTION AND ANALYSIS AERIAL MAP CLARK COUNTY ASSESSOR S PARCEL MAP CONCLUSION ASSESSED VALUE AND PROPERTY TAXES CALCULATION OF TAXES TAX RATES CURRENT PROPERTY TAXES HIGHEST AND BEST USE HIGHEST AND BEST USE AS THOUGH VACANT METHOD OF VALUATION LAND VALUATION ANALYSIS OF ADJUSTMENTS EXPOSURE TIME AND MARKETING PERIOD ADDENDA SUBJECT PHOTOGRAPHS FLOOD MAP PUD ZONING (NORTH LAS VEGAS) QUALIFICATIONS OF APPRAISER

5 Assumptions and Limiting Conditions 1 ASSUMPTIONS AND LIMITING CONDITIONS GENERAL ASSUMPTIONS AND LIMITING CONDITIONS The acceptance of this appraisal assignment and the completion of the appraisal report submitted herewith are contingent upon the following general assumptions and limiting conditions: 1. This is a Summary Report which is intended to comply with reporting requirements set forth under Standard Rule 2-2(b) of the Uniform Standards of Professional Appraisal Practice for a Summary Appraisal Report. As such, it might not include full discussions of the data, reasoning, and analyses that were used in the appraisal process to develop the appraiser s opinion of value. Supporting documentation concerning the data, reasoning, and analyses is retained in the appraisers file. The information contained in this report is specific to the needs of the client and for the intended use stated in this report. The appraiser is not responsible for unauthorized use of this report. 2. No responsibility is assumed for legal or title considerations. Title to the property is assumed to be good and marketable unless otherwise stated. 3. The property is appraised free and clear of any or all liens or encumbrances unless otherwise stated in this report. 4. Responsible ownership and competent property management are assumed, unless otherwise stated. 5. The information furnished by others is believed to be reliable; however, no warranty is given for its accuracy. 6. All engineering is assumed to be correct. Any plot plans and illustrative material in this report are included only to assist the reader in visualizing the property. 7. It is assumed that there are no hidden or unapparent conditions of the property, subsoil, or structures that render it more or less valuable. No responsibility is assumed for such conditions or for arranging for engineering studies that may be required to discover them. 8. It is assumed that there is full compliance with all applicable federal, state, and local environmental regulations and laws unless otherwise stated. 9. It is assumed that all applicable zoning and use regulations and restrictions have been complied with, unless a nonconformity has been stated, defined, and considered. 10. It is assumed that all required licenses, certificates of occupancy or legislative or administrative authority from any local, state, or national governmental or private entity organization have been or can be obtained or renewed for any use on which the value opinion contained in this report is based. 11. Any sketch may show approximate dimensions and is included to assist the reader in visualizing the property. Maps and exhibits found are provided for reader reference

6 Assumptions and Limiting Conditions 2 purposes only. No guarantee as to accuracy is expressed or implied unless otherwise stated. No survey has been made for the purpose of this report. 12. It is assumed that the utilization of the land and improvements is within the boundaries or property lines of the property described and that there is no encroachment or trespasses unless otherwise stated. 13. The appraisers are not qualified to detect hazardous waste and/or toxic materials. Any comment by the appraisers that might suggest the possibility or presence of such substances should not be taken as confirmation of the presence of hazardous waste and/or toxic materials. Such determination would require investigation by a qualified expert in the field of environmental assessment. The presence of substances such as asbestos, ureaformaldehyde, foam insulation, or other potentially hazardous materials may affect the value of the property. The appraisers value opinion is predicated on the assumption that there is no such material on or in the property that would cause a loss in value unless otherwise stated in this report. No responsibility is assumed for any environmental conditions, or for any expertise or engineering knowledge required to discover them. The appraisers descriptions and resulting comments are the result of the routine observations made during the appraisal process. 13. The Americans with Disabilities Act (ADA) became effective January 26, We have not made a specific compliance survey and analysis of this property to determine whether or not it is in conformity with various detailed requirements of the ADA. It is possible that a compliance survey of the property, together with a detailed analysis of the requirements of the ADA, could reveal the property is not in compliance with one or more of the requirements of the act. If so, this fact could have a negative effect upon the value of the property. Therefore, it is assumed that the property complies with all ADA requirements. 14. Any proposed improvements are assumed to be completed in a good workmanlike manner in accordance with the submitted plans and specifications. 15. The distribution of any or the total valuation of this report between land and improvements applies under the stated program of utilization. The separate allocations for land and buildings must not be used in conjunction with any other appraisal and are invalid if so used. 16. Possession of this report or a copy thereof does not carry with it the right of publication. It may not be used for any purpose by any person other than the party to whom it is addressed without the written consent of the appraisers, and in any event, only with the properly written qualification and only in its entirety. 17. Neither all nor any part of the contents of this report (especially any conclusions as to value, the identity of the appraisers, or the firm with which the appraisers are connected) shall be disseminated to the public through advertising, public relations, news sales, or other media without prior written consent and approval of the appraisers. 18. Prospective values are predicated upon stable market conditions unless otherwise stated. The appraisers cannot be held responsible for unforeseeable events that may alter market conditions prior to the effective date of the appraisal.

7 Assumptions and Limiting Conditions It is assumed that hazardous or toxic materials do not adversely affect the properties. The appraisers were not provided with a copy of an environmental/hazardous material study regarding the subject. As a result, the appraisers do not know the environmental condition of the property. The value opinion is therefore predicated upon the assumption that there are no such environmental conditions on or in the property that would cause a loss in value. Further, we reserve the right to amend the value within the report, if such items adversely affect the property. No responsibility is assumed for any such environmental conditions or for any expertise or engineering knowledge required to discover them. EXTRAORDINARY ASSUMPTIONS The acceptance of this appraisal assignment and the completion of the appraisal report submitted herewith are not contingent upon any extraordinary assumptions.

8 Certification of Value 4 CERTIFICATION OF VALUE We certify that to the best of our knowledge and belief: 1. The statements of fact contained in this appraisal report are true and correct. 2. The reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions, and is our personal, impartial, and unbiased professional analyses, opinions, and conclusions. 3. We have no present or prospective interest in the property that is the subject of this report, and no personal interest with respect to the parties involved. 4. We have no bias with respect to the property that is the subject of this report or to the parties involved with this assignment. 5. Our engagement in this assignment was not contingent upon developing or reporting predetermined results. 6. Our compensation for completing this assignment is not contingent upon the development or reporting of a predetermined value or direction in value that favors the cause of the client, the amount of the value opinion, the attainment of a stipulated result, or the occurrence of a subsequent event directly related to the intended use of this appraisal. 7. Our analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the Uniform Standards of Professional Appraisal Practice. 8. Matthew May 19, 2009 made a personal inspection of the property that is the subject of this report. Matthew Lubawy, MAI did not inspect the property. 9. No one provided significant real property appraisal assistance to the persons signing this certification. 10. The reported analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the requirements of the Code of Professional Ethics and Standards of Professional Appraisal Practice of the Appraisal Institute, which include the Uniform Standards of Professional Appraisal Practice. 11. The use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representatives. 12. As of the date of this report, Matthew Lubawy, MAI has completed the continuing education program of the Appraisal Institute. 13. The appraisers state registration/certification has not been revoked, suspended, canceled or restricted.

9 Certification of Value The Appraiser did not base, either partially or completely, his or her analysis and/or the estimate of value on the race, color, religion, sex, handicap, familial status, health or national origin of the present or prospective owners, occupants or users of the subject property or of the present or prospective owners, occupants or users of the properties in the vicinity of the subject property. Matthew Lubawy, MAI Nevada License #A CG License Expires April 30, 2011

10 Summary of Important Facts and Conclusions 6 SUMMARY OF IMPORTANT FACTS AND CONCLUSIONS PROPERTY LOCATION: ASSESSOR S PARCEL NUMBERS: The subject property is located at the northwest corner of Centennial Parkway and Valley Drive, North Las Vegas, Clark County, Nevada The property is identified as Clark County Assessor s Parcel Numbers CENSUS TRACT NUMBER: The property is located in Census Tract Number PURPOSE OF APPRAISAL: CLIENT OF APPRAISAL: INTENDED USER OF APPRAISAL: INTENDED USE OF APPRAISAL: DATES OF VALUATION: PROPERTY INSPECTION DATE: DATE OF REPORT: The purpose of this appraisal report is to form an opinion of the as is market value of the subject property. The client of this appraisal report is Key Bank Counsel. The intended user of the report is Key Bank Counsel. The intended use of this report is to assist Key Bank Counsel is asset monitoring. The date of valuation for the opinion of the as is market value of the subject is May 19, 2009 coinciding with the date the property was inspected and the photographs were taken. The property was inspected and photographs were taken on May 19, This report was prepared on May 29, The comparable sales, comparable rental data, and market data were collected and verified prior to this date. LAND SIZE: The subject property contains a gross land area of acres according to information provided by the Clark County Assessor. PROPERTY RIGHTS APPRAISED: ZONING: The subject property s as-is market value has been appraised in fee simple ownership. The subject property is currently zoned PUD with a land use of Multi-family Residential under the City of North Las Vegas. The zoning allows for a density of up to 25 units per gross acre. Based on the subject s land size, a maximum of 602 units would be allowed.

11 Summary of Important Facts and Conclusions 7 HIGHEST AND BEST USE: As Vacant Land: The highest and best use of the site as though vacant is for future development with a multi-family use. APN PROPERTY RIGHTS APPRAISED EFFECTIVE DATE OF VALUE OPINION OF MARKET VALUE Fee Simple May 19, 2009 $12,040,000 EXPOSURE TIME: MARKETING PERIOD: The aforementioned market value opinion has been predicated on an exposure time of 12 to 18 months. If the subject were marketed for sale as of the date of the value opinions, the marketing period would be 12 to 18 months assuming competent marketing with pricing commensurate with the market value opinion. The aforementioned market value opinion is contingent upon the general assumptions and limiting conditions contained on pages 1 and 2 of this report and is not contingent upon any hypothetical conditions or extraordinary assumptions.

12 Introduction 8 INTRODUCTION IDENTIFICATION OF THE PROPERTY The subject property currently consists of vacant land located at the future alignment of Centennial Parkway and Valley Drive, in North Las Vegas, Clark County, Nevada. The subject parcel contains a total of gross acres or approximately 1,048,925 square feet of land. The subject site is more thoroughly described in the Site Description and Analysis section contained later in this report. LEGAL DESCRIPTION A title report was not provided. The following legal description was taken from Clark County Records. A more complete legal description is located in the addendum of this report.

13 Introduction 9 CENSUS TRACT NUMBER The subject property is located in Census Tract Number PURPOSE OF APPRAISAL The purpose of this appraisal report is to form an opinion of the as is market value of the subject property. CLIENT OF APPRAISAL The client of this appraisal report is Key Bank Counsel. INTENDED USER OF APPRAISAL The intended user of this report is Key Bank Counsel. INTENDED USE OF APPRAISAL The intended use of this report is to assist Key Bank Counsel in evaluating the market value of the subject property for loan underwriting. EFFECTIVE DATE OF VALUATION The effective date of value is May 19, 2009, which is the date the property was inspected and photographs were taken. DATE OF APPRAISAL REPORT The date of the preparation of this appraisal report is May 29, The comparable sales and market data were verified prior to the date of this report. USPAP COMPETENCY PROVISION This appraisal report is being prepared with the intention of complying with the requirements of the Uniform Standards of Professional Appraisal Practice (USPAP) as provided by the Appraisal Foundation. I have appraised other similar properties in the Las Vegas metropolitan area, and we are qualified to appraise the subject property. Please see our qualifications contained in the addenda of this report for additional information. DEFINITION OF MARKET VALUE Market value is defined as: The most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue

14 Introduction 10 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 acting in what they consider their own best interests; 3. a reasonable time is allowed for exposure in the open market; 4. payment is made in terms of cash in United States 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. Source: 12 C.F.R. Part 34.42(g); 55 Federal Register 34696, August 24, 1990, as amended at 57 Federal Register 12202, April 9, 1992; 59 Federal Register 29499, June 7, 1994). MARKET VALUE AS- IS ON APPRAISAL DATE Market value as is on appraisal date may be defined as: An opinion of the market value of a property and the condition observed upon inspection and as it physically and legally exists without hypothetical conditions, assumptions, or qualifications as of the date the appraisal is prepared. Source: Federal Register, Vol. 53, No. 3, January 6, 1988, Rules and Regulations, 12CFR 571.1b(3), PROPERTY RIGHTS APPRAISED We have formed the opinion of value of the subject property in fee simple estate. Fee simple estate is defined as follows: Absolute ownership unencumbered by any other interest or estate, subject only to the limitations imposed by the governmental powers of taxation, eminent-domain, police power, and escheat. Source: The Dictionary of Real Estate Appraisal, Fourth Edition, (Chicago: Appraisal Institute, 2002, Page 113. EXPOSURE TIME One of the implicit conditions of market value is that a reasonable time is allowed for exposure in the open market. This is always assumed to precede the effective date of the appraisal. Specifically, exposure time is defined as: The estimated length of time the property interest being appraised would have been offered on the market prior to the hypothetical consummation of a sale at market value on the effective date of the appraisal; a retrospective opinion based on an analysis of past events assuming a competitive and open market. Source: Statement 6, Uniform Standards of Professional Appraisal Practice, 2008 Edition, Appraisal Standards Board.

15 Introduction 11 MARKETING TIME The reasonable marketing time is an opinion of the amount of time it might take to sell a real or personal property interest at the concluded market value level during the period immediately after the effective date of an appraisal. Marketing time differs from exposure time, which is always presumed to precede the effective date of an appraisal. Source: The Uniform Standards of Professional Appraisal Practice 2008, Advisory Opinion 7. CURRENT OWNERSHIP/ OWNERSHIP HISTORY The subject property is currently vested under the ownership of Route 215 Investors LLC. The property has been under this ownership since October 12, According to Clark County Records, the purchase price was $16,000,000. No other known transfers or transactions have occurred within the last three years. The subject parcel is not known to be currently marketed or for sale. SCOPE OF APPRAISAL This is a Summary Report which is intended to comply with the reporting requirements set forth under standards rule 2-2 (b) of the Uniform Standards of Professional Appraisal Practice (USPAP). It presents only summary discussions of the data, reasoning, and analyses that were used in the appraisal process to develop the appraisers opinion of value. Supporting documentation concerning the data, reasoning, and analyses is retained in the appraisers files. The depth of discussion contained in this report is specific to the needs of the client and for the intended use stated. As part of this appraisal, the appraisers have made a number of independent investigations and analyses. The investigations undertaken and the major data sources used are listed as follows: Area/City and Neighborhood Analysis Data pertaining to the Las Vegas metropolitan area and the subject neighborhood was provided by publications such as the Las Vegas Perspective, the Las Vegas Review Journal, and information from the local Chamber of Commerce and the Nevada Development Authority. The Clark County Comprehensive Planning Department supplied information pertaining to population. The Las Vegas Convention and Visitors Authority supplied information pertaining to visitor volume, convention attendance, gaming revenue and total visitor revenue. Data pertaining to the labor force and employment was supplied by the State of Nevada Employment Security Department; information pertaining to taxable sales was provided by the Nevada Department of Taxation; and data pertaining to residential construction building permits was collected from the governing jurisdictions. Additional neighborhood data was based upon a physical inspection of the area. Site Description and Analysis On May 19, 2009, Matthew Lubawy, MAI physically inspect the subject site and the surrounding area. Photographs of the property were also taken as of this date. Information concerning utilities was collected by a physical inspection as well as by contacting the individual utility companies, when necessary. The Clark County Planning Department was contacted to obtain zoning

16 Introduction 12 information on the property. Information pertaining to dimensions, shape, and area was taken from the Clark County Assessor s Map. The description and analysis of topography, drainage, soils conditions, and surrounding land uses was based upon a physical inspection. Environmental information was also based on a physical inspection. It is imperative to note that the appraisers are not experts in the analysis of soils conditions or environmental hazards; therefore, any comment by the appraisers that might suggest the presence of detrimental soils conditions or hazardous substances should not be taken as confirmation of the presence of hazardous waste or poor soils conditions. Such determination requires investigation by qualified professionals in the field of environmental assessment or soils testing. No responsibility is assumed for any environmental conditions or for any expertise or engineering knowledge required to discover them. The appraisers descriptions and resulting comments are the result of the routine observations made during the appraisal process. Applied Methods of Valuation To form an opinion of the as-is market value of the subject, we have utilized the sales comparison approach of vacant land. For a further description of this analysis and reasoning, please see the section entitled Method of Valuation section within this report. Market Data Collection and Verification Data pertaining to land sales was collected from sources including Clark County Public Records, COMPS Inc., Multiple Listings Service and discussions with brokers, owners and developers. Information on land sales, listings or offers was verified with the parties involved in the transactions including the grantor, grantee, broker or other knowledgeable parties, when possible. Verification of each sale is listed separately on each land sale abstract.

17 Area/City Description and Analysis 13 AREA / CITY DESCRIPTION AND ANALYSIS SUBJECT

18 Area/City Description and Analysis 14 SUMMARY OF CLARK COUNTY DATA The Las Vegas MSA (consisting of Clark and Nye counties in Nevada and Mohave County in Arizona) is rated in the top 10 for annual population growth and near the top in terms of employment increase. According to Valuation International Limited, a market research company, the growth has been primarily attributable to the area s favorable climate. Inc. magazine named Las Vegas the #1 city in America for starting or growing a business in Despite an economic slowdown in 2001, and the negative effects of the events of September 11, 2001 on tourism, Southern Nevada s economy has shown resilience. In the immediate aftermath of the September 11 attacks, hotels and gaming establishments laid off an estimated 12,000 to 15,000 workers, and other tourism-related businesses such as airlines, curbside baggage handlers, taxicab companies, and Grand Canyon tour operators suffered layoffs. Hotel occupancy rates fell dramatically, and many conventions were cancelled. However, by mid-october 2001, weekend occupancy rates rose to their normal level of approximately 95%, and midweek business improved to the point that one-fourth of the laid-off workers were recalled. Even so, it was not business as usual, and hotels were offering discounted room rates. Show attendance, restaurant business, and retail activity remained slow along the Las Vegas Strip, and delays were announced in tourism-related construction projects, including new hotel rooms, a convention center, timeshare units, and airport facilities. Because of Southern Nevada s dependence on tourism and travel, many economic analysts were predicting a softness in the local economy for an extended period of time. After several years of renewed vigor and rapid growth in the local economy, problems with the national economy have begun to impact Las Vegas. McCarran passenger traffic decreased from August, 2007 to August, 2008 by 424,000 passengers, down 9.9%. For the year to date, passenger traffic is down 4.8%. There are many factors that are likely causes of this, however, higher ticket prices needed to offset increased fuel prices has significant influence in passengers choice of vacation/convention destination. Despite the local news regarding visitor traffic through McCarran International Airport, Las Vegas and the surrounding metropolitan area seems to be a perennial favorite for individuals wishing to start a business. A list of Top Entrepreneurial Cities in 2007 published by Inc. Magazine has Las Vegas at #7. A complete list of the rankings is included below: 1. St. George, Utah 2. Yuma, Arizona 3. Prescott, Arizona 4. Fort Myers, Florida 5. McAllen, Texas 6. Naples, Florida 7. Las Vegas, Nevada

19 Area/City Description and Analysis Sarasota, Florida 9. Morgantown, W. Virginia 10. Bend, Oregon As of September 2008, the total labor force for the Las Vegas MSA was 1,006,400, with the unemployment rate at 7.4%. The largest contributor to the labor force is the leisure and hospitality industry (hotels and service) accounting for nearly 75% of the job force. The median income for the Las Vegas Valley is $53,704, and with the improving gaming industry, the labor market is expected to grow at a steady pace. Data on single family housing is mixed and neighborhood specific, however it appears safe to say that the peak of the prices for single family homes in Las Vegas seems to be in the fall of Prior to that time, the developers often had to hold lotteries to give buyers/investors (who out-numbered available properties significantly) a fair opportunity to purchase properties. Overall there appears to have been little relief from the downward trend in prices. In 2008, the residential market continued to soften, with the median price for a single family residence falling below $200,000 in November. The median price of a home is down 36.2% from November The condition of the housing market in in Las Vegas has been well documented. A study conducted by the Center for Business and Economic Research, University of Nevada, Las Vegas concludes that further adjustments are needed before we see a broad based recovery.. Their analysis of housing-market conditions within the Las Vegas Metropolitan area is thorough and well respected. Their report cites the number of vacant single family units at 28,826. While a certain number of vacant units are healthy in order to allow for families to change neighborhoods, upgrade to a higher quality home, etc., the current number is excessive. Historical data suggests that for a population the size of the Las Vegas, 18,924 is an estimated normal vacancy for single family homes. The apartment vacancy rate in the Las Vegas Valley was in the 8.35% range by the Third Quarter of 2008, and rents moved up to an overall monthly average of $876 per unit by November Those figures for the Second Quarter 2008 have both gone up slightly to where the average apartment vacancy is now at 8% and the average rent is up to $877. It is counter-intuitive that rental rates would go up while vacancies climb. This is not easily explained however, one possible reason is that there may be less vacancy in the higher-end apartments. The Third Quarter 2008 vacancy rates for the different categories of real estate are as follows: industrial 8.7%, up from 6.0% in the Fourth Quarter of 2007, retail 6.3%, up from 3.2% in the Fourth Quarter of 2007, and office 17% up from 12.4% in the Fourth Quarter of It is important to note that economic conditions across the Las Vegas metropolitan area are not all similar. The averages quoted above are the product of widely varying area summaries. It is occasionally the case that one neighborhood will have economic indicators that suggest it is thriving while an adjoining neighborhood seems to be struggling. An analysis that looks at only overall averages can be misleading. Another common theme among home purchasers has been the difficulty in securing financing for purchasing homes/land. Loan guidelines have tightened and become more restrictive. In some cases, individuals which not long ago would have had little trouble securing financing for

20 Area/City Description and Analysis 16 purchasing real estate are encountered difficulty. At one time it appeared that Las Vegas and the surrounding area was immune from the downturn which affected other areas of the country. While some of the news appears concerning, there is still construction taking place in certain market areas and in certain property types. Overall in the Las Vegas Valley there is slightly over 8,000,000 square feet of office space either under construction or in the planning stage. There is also roughly 16,000,000 square feet of retail space either planned or under construction. The industrial market is in similar condition to office in that there is approximately 9,500,000 square feet of industrial space either under construction or planned.

21 Market Area/Neighborhood Description and Analysis 17 NEIGHBORHOOD DESCRIPTION AND ANALYSIS

22 Market Area/Neighborhood Description and Analysis 18 NEIGHBORHOOD BOUNDARIES The subject neighborhood is defined as Commerce Street on the east, Grand Teton Drive on the north, Cheyenne Avenue on the south and Rancho Drive and Tenaya Way on the west. A map delineating the neighborhood is on the previous page. NEIGHBORHOOD DESCRIPTION The subject property is located in the northern section of the Las Vegas Valley within the North Las Vegas City Limits. Specifically, located approximately 3 ½ miles north of the Downtown Las Vegas central business district, and approximately 6 miles north of the world famous Las Vegas Strip and resort corridor. The subject Zip Code is generally bounded by Centennial Parkway to the north, North 5 th Street to the east, Craig Road to the south, and Decatur Boulevard to the west. Although the southern portion of the subject neighborhood is located in the jurisdiction of the City of Las Vegas, it is considered to have a significant impact on the subject and its surroundings and is included in the subject neighborhood boundaries. The reader is referred to the neighborhood map on the preceding page for a graphic illustration of the neighborhood boundaries. The market area is predominately comprised of single family and multi-family use. However, a significant number of commercial uses are located within the neighborhood primarily along major arterials or at major intersections. Many of the residential developments within the neighborhood have been in existence for more than 10 years with many having been constructed as long as 30 to 40 years ago. The vast majority of single-family development within the neighborhood consists of smaller residential developments rather than large master-planned communities. Commercial developments are located along major arterial thoroughfares throughout the neighborhood. The larger commercial development is centered along Nellis Boulevard between Charleston Boulevard and Las Vegas Boulevard. Las Vegas Boulevard North and the other east/west arterials have small retail uses developed at major intersection and along the frontage within the neighborhood. Public utility services are available to all portions of the neighborhood. However, some of the more undeveloped areas require private well and septic systems. Electricity is supplied by Nevada Power; water is provided by the City of North Las Vegas and sanitation service is provided by Clark County; telephone service is provided by Embarq Telephone Company; natural gas is supplied by Southwest Gas Corporation; and solid waste disposal is handled by Republic Services. Utility services appear to be at adequate capacity for the existing developments in the neighborhood. However, as development continues in the area, large amounts of previously poorly served or nonservice areas for utilities are having public facilities extended to them for tract developments. The southern part of the neighborhood is mostly of older residential uses. Craig Ranch Golf Course is located to the southeast and is being converted into a regional park for the area. To the north of Craig Ranch is one of the first master-planned developments for the area located north of Ann Road at Camino Eldorado. This area is known as Eldorado and was developed by Pardee Homes in the late 80 s. The northern part of the neighborhood is newer and consists of the Aliante master-planned community. The land was purchased from the BLM at an auction. Additional land was purchased

23 Market Area/Neighborhood Description and Analysis 19 for the extension of the master plan, and more land will be available to the east of Aliante for future development as this land is released by the BLM. NEIGHBORHOOD DEMOGRAPHICS The Las Vegas Perspective is an informational publication with survey data and demographics on the Las Vegas metropolitan area, sponsored by the Las Vegas Review Journal, Nevada Development Authority, Nevada Power Company and Wells Fargo Company. This publication identifies 45 survey areas (by ZIP Code). The subject property is located in Survey Area The area is bounded by Centennial Parkway to the north, Decatur Boulevard to the west, Craig Road to the south, and the I-15 freeway to the east. The following table details the demographic information for the noted survey area.

24 Market Area/Neighborhood Description and Analysis 20 MARKET AREA DEMOGRAPHICS Survey Area Las Vegas Survey Area Las Vegas Total Total No. of Households: 730,549 21,234 Type of Dwelling Single-Family: 59% 93% Population: 1,986,146 61,032 Apt./Duplex: 22% 3% Condo/Townhome: 15% 4% Age of Adults: Mobile Home: 4% 0% Under 18 27% 31% 18-24: 8% 8% 25-34: 15% 16% Household Income: 35-44: 15% 18% Under $15,000: 9% 3% 45-54: 14% 13% $15,000-$24,999: 9% 4% 55-64: 11% 8% $25,000-$34,999: 11% 6% 65+: 11% 6% $35,000-$49,999: 15% 12% $50,000-$74,999: 22% 29% Education of Adults: $75,000-$99,999: 15% 25% Some High School: 26% 11% $100, % 21% High School Degree: 31% 33% Some College: 19% 31% College Degrees: 20% 26% Med. Household Inc.: $57,403 $72,042 Employed: 70% 67% Not in Labor Force 13% 28% Unemployed 17% 5% Percentages may not add up to 100% due to rounding. Source: Las Vegas Perspective 2009 In relation to the entire Las Vegas Valley, the population of the Zip Code Areas is comprised of a mixture of ages with a higher concentration of adults ages at 18% as compared to the entire Las Vegas Valley of only 15%. The educational backgrounds of the residents in this area are also higher in the percentage of residents with a college degree which comprises 26% of the population as opposed to only 20% for all of Las Vegas. There is a large number of single-family homes at 93% as compared to 59% for the valley. The median household income is $72,042, which is higher than the median household income for the entire Las Vegas area, at $57,403. The length of residency in this area is similar to that of the overall Las Vegas Valley. TRANSPORTATION The primary access routes to the neighborhood are the I-15 freeway, Craig Road, Ann Road, and Decatur Boulevard. The I-15 freeway extends through Southern Nevada from California to Utah. It

25 Market Area/Neighborhood Description and Analysis 21 passes through both Las Vegas and North Las Vegas, and has important resort, business, and industrial districts along its length. Craig Road is a major east/west community traffic arterial which crosses the entire north end of the valley and connects with I-15. Most of the shopping centers and business districts that service the subject neighborhood are located along Craig Road. Ann Road also runs east and west, and is becoming a key traffic arterial for the northern portion of the Las Vegas Valley. A freeway interchange recently constructed in the late 1990s at US 95 and Ann Road is concentrating even more traffic onto this street. Several sections of Ann Road are still not fully improved, but that is changing as development progresses. Decatur Boulevard is a key community traffic arterial that has interchange access with the US 95 freeway (in central Las Vegas), the Southern Beltway (in south Las Vegas), and the Northern Beltway (in the subject neighborhood). There are retail shopping districts all along Decatur and, near the center of the Las Vegas Valley, the Meadows Mall, large auto dealerships, and Arizona Charlie s neighborhood gaming resort are all located along Decatur. Decatur Boulevard also extends south of the southern leg of the Beltway system (I-215) to provide major arterial access to the 2,300+ acre Southern Highlands master-planned community, which has been recently developed. At the northern end of the valley, northeast of Decatur Boulevard and Ann Road extends into Aliante, a recently developed master planned community. Aliante has approximately 1,900+ acres and has traditional family communities and an age-restricted retirement village. The I-215 freeway services the neighborhood, and is part of the Las Vegas Beltway system, encircling three-quarters of the valley. The I-215 freeway has recently been completed across the southern and much of the western sides of the valley, and it interconnects with both the I-15 freeway (which extends across Southern Nevada from California to Utah) and the US Highway 95 freeway (which connects northwest Las Vegas to downtown Las Vegas and Henderson). The I-215 freeway is of major importance as it reduces traffic congestion and provides access to employment districts for the rapidly-growing suburban areas of the valley. Because of the major traffic arterials, the subject neighborhood is judged to have adequate accessibility to all sections of the Las Vegas metropolitan area. PROPERTY TAXES Taxes for this portion of the Las Vegas Valley are average compared to other parts of the valley. The subject is located within Tax District Number 250 (North Las Vegas City) which has a tax rate of $ per $ of assessed value. Tax rates throughout the Las Vegas Valley range from $ to $ per $ of assessed value. Tax rates for the neighborhood appear sufficient to provide adequate public services; therefore, they are anticipated to increase at similar rates throughout the Las Vegas Valley. UTILITIES/SERVICES Public utility services are available to developing portions of the neighborhood. Electricity is supplied by NV Energy, while solid waste disposal is handled by Republic Services. Telephone service is supplied by Embarq Telephone Company, and natural gas is provided by Southwest Gas

26 Market Area/Neighborhood Description and Analysis 22 Corporation. Water is supplied by the Las Vegas Valley Water District, and sewer service is provided by the Clark County Sanitation District. Utility services are considered to be at adequate capacity for the developed and developing portions of the neighborhood. EXTERNAL INFLUENCES There do not appear to be any significant adverse conditions within the neighborhood that could affect property values. Portions of the neighborhood may have poor soil conditions due to expansive or corrosive soils that can cause substantially higher development cost. Washes have also impacted some properties causing higher development cost associated with engineering storm drains or flood channels. HOUSING MARKET SUMMARY Prospects for the local housing market depend on ongoing population growth, which has continued at a phenomenal pace over the past decade. According to statistics from the Nevada State Demographer s Office, from 2001 to 2007, Clark County grew at an annual rate of between 4.3% to 5.8% and Las Vegas was among the fastest growing metropolitan cities in the country. However, between 2007 and 2008, the growth had a large downturn as Clark County s growth fell to 0.7%. Home Builders Research has reported new home sales activity as follows: Year # New Home Sales , , , , , , , , ,965 As can be seen, new home sales declined sharply in 2007 and 2008 from their previous highs in 2005 and Previously, the year 2005 was a record year for Southern Nevada new home sales, and sales started strong in early However, by the middle of the year, sales slowed with six consecutive months of decline. The housing market and general business trends in the Las Vegas Valley are in a state of decline. In the 1 st Quarter 2009, the UNLV Center for Business & Economic Research published a poll that was taken by the Bank of Nevada Survey of Business Confidence regarding the overall economic conditions of Southern Nevada. Of the respondents, 31% expected the housing decline to have an adverse impact on their business. One in five expected further declines in housing and respondents were evenly divided as to whether or not there would be a recovery in Housing/Real Estate was listed as the number one concern among respondents at 29.6%. Their findings suggest that housing prices will be a roadblock to economic recovery. UNLV also published historic price movements and historical trends as shown in the S & P/Case-Shiller Home

27 Market Area/Neighborhood Description and Analysis 23 Price Index for the Las Vegas Valley. This index indicates that prices peaked during July 2006 and have sharply adjusted downward until the present time. Keith Schwer of UNLV has also published data that shows the number of residential building permits being down 38.74%in December 2008 from the year previous. Residential building permit valuation is down 75.71% and commercial building permits are down 57.41%. These numbers have led experts to agree that growth and fewer housing units constructed are needed in order to bring the residential market back into balance. A more recent study has concluded that the prices for Las Vegas homes are undervalued. This report, published by IHS Global Insight and Ohio bank holder National City Corporation shows that the average prices of homes in Las Vegas are 18.8 percent below what market fundamentals would justify in the 3 rd Quarter This data is based on historical data going back to 2000 and takes into consideration normal values, median prices, household income, population density and interest rates. Experts suggest the undervaluation is based on factors such as overbuilding, speculative investments followed by a large supply of homes. This appears to have sparked a higher number of sales as of late. The number of home sales through December 2008 increased for the fourth consecutive month in Southern Nevada. According to the Greater Las Vegas Association or Realtors, 2,498 homes were sold in December of 2008, up from 879 homes sold one year ago and representing a 184% increase. In early 2009, the foreclosures in Clark County were reported to be among the highest in the nation at 4.99%. In 2008, lenders took back 31,416 homes compared to 11,509 in 2007, representing an increase of 173%. According to Mark Stark of Prudential Americana Group, more than threefourths of Las Vegas home sales in December 2008 were bank-owned properties, or foreclosures and another 3% were short sales. According to Applied Analysis research firm, of the 22,000+ homes for sale through the Multiple Listing Service, about 37% are bank-owned. According to the Greater Las Vegas Association of Realtors, as of February 2009, the median price for a new home fell to $219,900 a drop of 22.3% from the previous year and existing home prices falling to $145,000, a decline of 28%. Despite the downturn, low prices have led to an increase in new and existing home sales in early Resales have increased with 2,606 recorded escrow closings which is up 75% from the same month one year ago. The number of condominium and townhome sales increased by 166% in February to 442 sales, however, the median price dropped 50% from a year ago to $75,000. MULTI-FAMILY RESIDENTIAL MARKET The subject is located in the zip code area, but the market encompasses other zip codes nearby. The following page shows the market area for the subject property.

28 Market Area/Neighborhood Description and Analysis 24 MARKET AREA Subject The table on the following page illustrates historical growth of apartment units as a percentage of all types of dwellings. Apartment units make up anywhere from 2% to 47% of the dwellings in the various zip code areas within the submarket. The weighted average is 18%. We anticipate that the trend will be for more apartment dwellings constructed in the submarket and have increase this percentage slightly over the next five years.

29 Market Area/Neighborhood Description and Analysis 25 PERCENTAGE OF APARTMENTS TO OTHER DWELLINGS TOTALS UNITS % YEAR % 11% N/A 47% 23% 33% 6% 0% 19,310 22% % 18% N/A 48% 23% 31% 6% 4% 19,930 22% % 17% N/A 48% 23% 32% 6% 3% 20,202 21% % 17% N/A 47% 23% 32% 6% 3% 21,023 21% % 23% N/A 47% 22% 32% 6% 3% 21,004 20% % 19% 0% 50% 24% 33% 5% 2% 22,110 20% % 16% 0% 47% 22% 33% 5% 1% 21,135 17% % 16% 7% 47% 23% 33% 5% 2% 22,069 18% % 16% 7% 47% 23% 33% 5% 2% 21,773 18% Source: Las Vegas Perspective and Clark County Comprehensive Planning It can be inferred from the building data that demand for multi-family units is stable. Construction has declined in all product types over the last year. The subject should be able to capture a portion of the multi-family market. The table below illustrates the calculated units occupied in the subject submarket. APARTMENT UNIT OCCUPANCY OCCUPIED UNITS TOTAL CHANGE PERIOD , ,885 3,194 8, ,310 N/A , ,940 3,201 8, , % , ,968 3,186 8, , % ,067 2, ,014 3,174 8, , % ,044 2, ,215 2,997 8, , % , ,750 3,314 9, , % , ,225 3,039 8, , % , ,290 3,178 9, , % , ,297 3,143 8, , % Source: Las Vegas Perspective Demand Based on Historical Absorption Another indicator of demand is the current trend in occupancy levels. Based on conversations with local property managers and real estate agents, the occupancy level of apartment complexes in the subject s neighborhood has declined to roughly 90% or more over the last two years as the apartment market has adjusted to the new economic climate. Later in this market analysis we will

30 Market Area/Neighborhood Description and Analysis 26 present a summary of our in-house survey of competitive projects. Based on this survey, stabilized apartment complexes have a vacancy of approximately 10% or more. While occupancy rates have declined to around 90% over the last two years, inventory and population has remained stable. We expect that occupancy levels will continue at about 90% until the local economy rebounds. The following table illustrates vacancy rates for the subject s submarket compiled by the UNLV Center for Business and Economic Research: VACANCY RATES VACANCY PERIOD AVG * 1Q % 6.0% N/A 8.5% 7.2% 6.7% 6.0% N/A 6.8% 2Q % 6.9% N/A 7.0% 8.1% 7.1% 7.0% N/A 6.9% 3Q % 7.3% N/A 6.5% 6.9% 6.9% N/A N/A 6.4% 4Q % 7.5% N/A 6.9% 7.6% 7.6% 7.9% N/A 7.1% 1Q % 7.5% N/A 11.3% 8.3% 8.2% 8.1% N/A 8.5% 2Q % 7.6% N/A 9.7% 7.0% 8.0% 8.1% N/A 7.9% 3Q % 7.1% N/A 7.9% 8.4% 7.8% N/A N/A 7.3% 4Q % 11.0% N/A 9.3% 11.8% 9.3% 8.4% N/A 9.4% Source: Housing Market Conditions, UNLV * Weighted Average Demand Based on Rental Rates Actual rental rates can also be used to infer demand for multi-family units. Rents are typically related to occupancy levels. As the occupancy levels increase, rents are also expected to increase. Earlier in this report we have illustrated the dramatic increase in foreclosures in the Las Vegas valley. Along with high foreclosure rates there has emerged a shadow rental market. This market is primarily comprised of converted condo units which were unable to sell and have become rental units competing with the apartment rental market. This shadow rental market has affected the apartment market in that vacancy rates have edged upward. In the previous discussion on vacancy rates we show that the weighted average of vacancy in the submarket was 6.8% in early 2007 and increased to 9.4% by year end Rental rates, on the other hand, would be expected to decrease due to the influence of the shadow rental market, however rents have in fact increased. The average rental rate in the subject submarket was $776 per month in early 2007 and had increased to $800 per month by year end It is possible that without the influence of the shadow rental market, rental rates would have increased more. Also associated with the shadow rental market is single family homes which were intended for sale but due to difficulties in obtaining financing and other barriers of purchase, have become rental units. When we look at new home sales we note a dramatic decline over the last three years. The sale of resale homes has decreased for 2006 and 2007 however the sale of resale homes has actually increased over the last year. Total sales of both new and existing homes has actually increased in 2008 by 1.4% which may suggest that the resale market is reaching the bottom.

31 Market Area/Neighborhood Description and Analysis 27 Data on historical and current rent levels are represented in the table on the following page. While rents have fluctuated, overall the average rents have increased over the last two years. CONCLUSION In summary, the neighborhood is considered to be an established, stable area where growth and development has been steadily slowing in the past 2 years. The area is generally perceived to be an average location for commercial and residential development. Accessibility is considered good with numerous major arterials crossing the subject area. The neighborhood is considered to be in a stabilized cycle with values in the area expected to remain commensurate with other portions of the Las Vegas Valley.

32 Site Description and Analysis 28 SITE DESCRIPTION AND ANALYSIS The subject property is located at the northwest corner of Centennial Parkway and Valley Drive in North Las Vegas, Clark County, Nevada. The property can further be identified as Clark County Assessor s Parcel Number The assessor s parcel map and aerial map are shown on the following pages. The subject site is irregularly shaped and contains a land area of gross acres. Centennial Parkway will need to be dedicated on the south end of the subject property and will have two travel lanes in each direction. The subject will also have frontage along Valley Drive, but this street will also require dedication with offsites. The subject site slopes in a northwest to southeast direction. The south end of the parcel slopes considerably into an improved wash. The site is vacant raw land and is typical of other sites in the area. This land would need to be graded in order to further develop the site. The Flood Disaster Protection Act of 1973 and the National Flood Insurance Reform Act of 1994 have made the purchase of flood insurance mandatory for Federally-backed mortgages on structures located in special flood hazard areas. According to the Federal Emergency Management Agency (FEMA) flood insurance rate map, Community Panel #32003C1765 E with an effective date of September 27, 2002 the subject site is located within a Zone X flood hazard area. A copy of the FEMA flood insurance rate is included in the addenda of this report for reference. Neither a geotechnical report nor environmental assessment reports were made available, and no opinion as to soils or subsoils conditions is given in this report. It is assumed that the subject soils and subsoils conditions are typical for the area, and that based on visual observations and on nearby development, there does not appear to be overly adverse effects from existing soil conditions. We are also not aware of any hazardous waste and/or toxic materials on the site. However, the appraisers are not qualified to detect such materials, and any determination as to the presence of such substances would require investigation by a qualified expert in the field of environmental assessment. The presence of potentially hazardous materials could affect the value of the property. The appraisers value opinion is predicated on the assumption that there is no such material on or in the property that would cause a loss in value. If users of this report have reason to believe that there are hazardous water and/or toxic materials on or in the subject sites, the value conclusions presented in this report should not be relied upon and a professional in the environmental field should be retained for further analysis. No responsibility is assumed for any environmental conditions, or for any expertise or engineering knowledge required to discover them. The appraisers descriptions and resulting comments are the result of routine observations made during the appraisal process. Utility services are currently located in Centennial Parkway or Valley Drive. Utilities consist of the following agencies:

33 Site Description and Analysis 29 UTILITY Electricity Water Sanitation Telephone Natural Gas Solid Waste Disposal AGENCY NV Energy Las Vegas Valley Water District Clark County Water Reclamation District Embarq Telephone Company Southwest Gas Corporation Republic Services All necessary utilities are located along Centennial Parkway which fronts the subject property. In the immediate area of the subject property are rural residential homes immediately to the north and east of the subject property. To the south and across Centennial Parkway is I-215 which provided excellent exposure and visibility to the subject property. To the west is a retail shopping center. It should be clearly understood by the reader that the appraisers were not provided with a copy of any environmental/hazardous materials study regarding the subject property. As such, the environmental condition of the property is not known. The value opinions are predicated upon the assumption that there are no such environmental conditions on or in the property that would cause a loss in value. We reserve the right to amend the values within the report if such items adversely affect the property. No responsibility is assumed for any such environmental condition or for any expertise or engineering knowledge required discovering them. A preliminary title report was not made available. I assume that there are no significant easements or encroachments other than typical utility easements which would adversely affect the subject site. The subject parcel is zoned PUD (Planned Unit Development). The purpose of this zoning is to encourage innovations in residential, commercial and industrial development so that greater opportunities for better housing, recreation, shopping and employment may extend to all citizens and residents of North Las Vegas; to reflect changes in the technology of land development; to encourage a more creative approach in the utilization of land in order to accomplish a more efficient, aesthetic and desirable development which may be characterized by special features of the geography, topography, size or shape of a particular property; and to provide a compatible and stable, developed, environment in harmony with that of the surrounding area. The PUD may include any development having one or more principal use or structure on a single parcel of ground or contiguous parcels. The PUD shall consist of a harmonious selection of uses and groupings of buildings, parking areas, circulation and open spaces, and shall be designed as an integrated unit, in such manner as to constitute a safe, efficient and convenient urban area development. The subject property has a land use plan of Multi-family Residential District. The purpose of the R- 3 multifamily residential district is to provide for high density (approximately twenty-five (25) du/acre) housing in multifamily structures and directly related complementary uses. The R-3 district is designed to allow highly economical use of land while creating an attractive, functional and safe residential environment.

34 Site Description and Analysis 30 AERIAL MAP SUBJECT Photo Taken September 2008 Source: Clark County

35 Site Description and Analysis 31 CLARK COUNTY ASSESSOR S PARCEL MAP Subject

36 Site Description and Analysis 32 CONCLUSION The subject site consists of an irregular shaped parcel with future frontage along Centennial Parkway, and Valley Drive. The site is considered to be well located within the northwestern portion of the Las Vegas Valley near the intersection of I-215 and Decatur Boulevard. At the present time, the majority of the parcels in the immediate area consist of residential homes to the north and east and commercial influence to the south and west. The subject parcel is zoned PUD (Planned Unit Development) under the City of North Las Vegas, and it has a land use plan for multi-family residential use. This would allow for up to 25 units per gross acre or approximately 602 units based on the gross land area of acres. The subject is not in a flood zone, and the site has mostly level topography with soils that, based on surrounding improved properties, appear to be adequate for development. Public water and sewer lines are available along Centennial Parkway, and all things considered, the property is physically adequate to accommodate its highest and best use. In summary, the physical features of the subject site are suitable for a mixed use which is allowed under the current approved zoning and site plan.

37 Assessed Value and Property Taxes 33 ASSESSED VALUE AND PROPERTY TAXES CALCULATION OF TAXES Property taxes are based upon an appraisal of the property performed by the Clark County Assessor s Office. An appraisal is conducted every five years on properties located within Clark County and the values are updated each year by an index computed by the State of Nevada Department of Taxation. According to personnel at the Assessor s Office, properties are appraised for taxable value based upon the cost approach. This approach to value is performed by estimating the replacement cost new of a property, less depreciation of 1.5% per year of effective age, up to a maximum of 75%. State Statute indicates that the taxable value of the property must not exceed the current market value. Since the cost approach in some instances may provide an indication higher than current market value, the sales comparison approach and/or income capitalization approach may be used to establish the taxable value of the property. Property taxes are calculated by multiplying 35% of the taxable value by the tax rate. TAX RATES The subject is located within the Tax District Number 200, (Las Vegas City) which has a current tax rate of $ per $ of assessed value for the 2008/09 tax year. The fiscal year starts July 1st and ends on June 30th of every year. The following summarizes tax rates for the previous years. HISTORIC TAX RATES TAX YEAR TAX RATE 2008/09 $ /08 $ /07 $ The tax rates for the subject s tax district appear to have varied slightly over the last three years. Tax rates are expected to increase at a moderate pace or stay the same in the immediate future. It is noted that the Nevada State Legislature passed a law to provide property tax relief to all citizens. Assembly Bill 489, signed into law on April 6, 2005, provides a partial abatement of taxes by applying an 8% cap on the tax bill to land, commercial buildings, business personal property, aircraft, etc. New construction or property that has a change of use (zoning change) will not qualify for any cap for this fiscal year, but will receive the 8% cap starting in the 2008/09 tax year.

38 Assessed Value and Property Taxes 34 CURRENT PROPERTY TAXES The taxes for the 2008/09 tax year for the subject property using the current assessments and tax rates for the parcel, is as follows: ANNUAL PROPERTY TAXES PROPERTY TAXES 2008/2009 Tax Assessor's Parcel Number: Assessed Valuation Land ( SF) $5,899,600 Improvements $0 Total Assessed Value $5,899,600 Tax Rate (Per $100) Subject Estimated Taxes $197, Less Cap Reduction ($99,345.51) Net Taxes $98, According to the Clark County Treasurer s Office, the amount of taxes currently owed is $81, I have appraised the property as though free and clear of any liens or encumbrances, and have made any adjustments for outstanding taxes.

39 Highest and Best Use 35 HIGHEST AND BEST USE Highest and best use is defined as: The reasonably probable and legal use of vacant land or an improved property, which is physically possible, appropriately supported, financially feasible, and that results in the highest value. The four criteria highest and best use must meet are legal permissibility, physical possibility, financial feasibility, and maximum profitability. Source: The Dictionary of Real Estate Appraisal, Fourth Edition, (Chicago: Appraisal Institute, 2002) Page 135. The highest and best use of a property is an economic study focusing on the four criteria mentioned above. The determination of a property s highest and best use is the basis that provides the valuation framework upon which comparable market date is selected. Such data for improved properties may include cost, income and expense data, and improved sales pertaining to the property s concluded best use. Highest and best use of the property as though vacant is considered separately from the highest and best use of the property as improved. The site is valued as though vacant and available for development to its highest and best use even if the property s existing improvements do not represent the highest and best use of the site. Highest and best use of the land as though vacant indicates only how the land should be used if it were vacant. The following is an analysis of highest and best use of the land as though vacant. Each of the four criteria legally permissible, physically possible, financially feasible, and maximally productive, have been considered separately as they relate to the subject. Highest and best use of land or a site as though vacant is defined as: Among all reasonable, alternative uses, the use that yields the highest present land value, after payments are made for labor, capital, and coordination. The use of a property based on the assumption that the parcel of land is vacant or can be made vacant by demolishing any improvements. Source: The Dictionary of Real Estate Appraisal, Fourth Edition, (Chicago: Appraisal Institute, 2002) Page 135. HIGHEST AND BEST USE AS THOUGH VACANT The property is currently zoned PUD (Planned Unit Development) with a land use plan for multifamily residential use. The land use plan allows for multi-family use with a density of up to 25 units per gross acre. Based on a land area of gross acres, up to 602 units would be allowed. This would be physically possible; however, financially a multi-family use would not be feasible as it would be difficult to obtain financing, and due to market conditions that would prohibit this type of development for the short term. The highest and best use of the site as though vacant would be for multi-family residential use as market conditions improve.

40 Method of Valuation 36 METHOD OF VALUATION The valuation process is the method by which data used to form an opinion of value for the subject property is acquired, analyzed and presented. This data is typically applied within the three traditional approaches to value, which are the cost approach, the income capitalization approach, and the sales comparison approach. In appraisal practice, one or more approaches may not be appropriate to the property being appraised depending upon the quality, quantity, and reliability of the data. For purposes of this analysis, only the sales comparison approach has been used to value the subject property, as the subject's highest and best use is as vacant land. The cost and income capitalization approaches have not been used since the subject is vacant land. The Sales Comparison Approach- This approach involves verifying data of vacant land sales, listings, and offerings of properties comparable to the subject. The data has been separated into measurable units of comparison (i.e., price per acre). The price per acre method involves adjusting the price per acre of the comparable sales for differences between them and the subject. The final adjusted price per acre is then applied to the subject s land area to provide an indication of market value. This approach produces a good indication of value when sales of similar properties are available.

41 Land Valuation 37 LAND VALUATION The Sales Comparison Approach is the most common technique for valuing vacant land. It is used to estimate the market value of the subject site as though vacant. To apply this method, sales of vacant land comparable to the subject property are gathered and analyzed. The sale prices are adjusted for dissimilarities identified between each of the comparables and the subject. Elements considered include property rights, legal encumbrances, financing terms, conditions of sale (motivation), market conditions (sale date), location, physical characteristics, available utilities, zoning, and highest and best use. The adjusted prices are reduced to some common unit of comparison, such as price per square foot or price per acre. The appraiser analyzes this information and derives the unit value applicable to the subject property. When applied to the appropriate unit measure, this results in an opinion of the market value of the vacant land. The sales used in the valuation are considered to be the most comparable to the subject as of the date of valuation. Specifically, we have identified and analyzed four recent sales and one listing in the subject area and made adjustments on a price per acre basis. The following pages display the location, details, property characteristics, and a discussion of the comparability of each sale followed by an adjustment grid.

42 Land Valuation 38 LAND SALES SUMMARY PROPERTY DATA 1. Location: The south side of Centennial Pkwy, west of I-215 Grantor: Pulte Homes, Inc Grantee: Fairfield Centennial LLC Sale Date: July 23, 2007 Sale Price: $13,500,000 Area (Gr.): Acres $/Acre: $900,000 Verification: Verified with Christopher Davis, buyer s acquisition officer ( ). APNs: , 002, and 005 Doc. No.: Comments: This site is just south of the Providence master planned community in an area of mostly Federallyowned lands. The site was approved in August 2008 for development of a 414 unit multifamily project. This site has as much, if not more, circuity of access as the subject property, and Christopher Davis with the buyer s office said the circuity did affect the price a little. He indicated the effect was in the range of 15%. 2. Location: The east side of Maryland Parkway, south of Wigwam Avenue. Grantor: Encore 2007 LLC; Dean Lazarkis; and PHD Properties, Philip Davis Grantee: Picerne Maryland at Wigwam LLC and David Picernce Sale Date: August 14, 2007 Sale Price: $14,170,000 Area (Gr.): Acres $/Acre: $913,604 APNs: ; , 012, and 026 Doc. No.: Verification: Verified with Phil Davis, managing partner of the selling LLC ( ), Costar and Clark County Records. Comments: This parcel was rezoned from R-E to R-3. The buyer intends to build a 365-unit apartment complex that was part of the purchase agreement and the seller stated that they approached the buyer. The development equates to a density of units per acre. 3. Location: The north side of Cactus Avenue, west of Maryland Parkway Grantor: VTS Investments, LLP Grantee: Cactus Villas Sale Date: February 15, 2008 Sale Price: $25,278,000 Area (Gr.): Acres $/Acre: $660,144 APN: Doc. No.: Verification: Verified with Christopher Paskvan, listing real estate agent at Hutchinson Commercial ( ). Comments: This site is approved for 90 multifamily units with 45 being 3-bedroom and 45 being 2-bedroom units. The property had C-1 commercial zoning that was changed to R-3 multifamily zoning. 4. Location: Surrounding the southwest corner of Craig Road and Lamb Boulevard. Grantor: R & S Investment Group, LLC Grantee: Alliance Residential Corporation Sale Date: February 26, 2008 Sale Price: $8,400,000 Area (Gr.): 15.2 Acres $/Acre: $552,631 APNs: ; Doc. No.: Verification: Verified with Kevin McKinley, seller s representative, Comps, Inc and Clark County Records. Comments: This sale is the future site of a 312-unit apartment development. Mr. McKinley stated that this parcel was in escrow for approximately 11 months, during which the agreed contract price dropped from $11.2 million to $8.4 million, representing a decrease of 17.6% over 11 months, or 19.25% annually. Mr. McKinley stated the drop in price was due to the deteriorating market conditions in the local real estate market and nothing else.

43 Land Valuation 39 PROPERTY DATA (Continued) 5. Location: The southeast corner of US 95 and Lone Mountain Road. Grantor: SF Investments LLC Grantee: Inspirado Apartments LLC Sale Date: July 25, 2008 Sale Price: $8,301,000 Area (Gr.): Acres $/Acre: $750,542 Verification: Verified with Clifford Stratton at the buyer s office ( ). APNs: , 002, 003, 023, 024, 025, and 031 (now and 011) Doc. No.: Comments: This site was purchased to construct the Inspirado Apartments which is approved for 252 units. There had been vacant single-family lots on the site at the time of the sale, but the land was approved for multifamily development with R-3 zoning. The Inspirado Apartments are currently under construction. L1 Location: Southwest corner of Regena Ave and Donna Street. Grantor: Davric Corporation Grantee: N/A (Listing) Sale Date: N/A (Listing) Verification: Verified with Property Line. List Price: $3,000,000 Area (Gr): 5.0 Acres $/Acre.: $600,000/Acre. APN: and 004 Doc. No.: N/A (Listing) Comments: This listing is a 5.0 gross acre site which is zoned R-3 (multi-family residential use) under the City of North Las Vegas. The zoning allows for a density of up to 25 units per gross acre or 125 units. The price per unit equates to $24,000 per unit. L2 Location: NEC Grand Canyon and Tee Pee Grantor: ALM Corporation Grantee: N/A (Listing) Sale Date: N/A (Listing) List Price: $16,500,000 Area (Net): 32 Acres $/Acre: Verification: Verified with Property Line and public records. $515,625/Acre APN: Doc. No.: N/A (Listing) Comments: This parcel is zoned T-C Employment Districts and can be developed with a variety of uses including commercial, office, and multi-family use. The property has frontage along Oso Blanco and visibility from US 95. L3 Location: SEC of Centennial Parkway and Novak Grantor: Centennial Lamb Second Tr Grantee: N/A (Listing) Sale Date: N/A (Listing) List Price: $9,124,500 Area (Net): Acres $/Acre.: Verification: Verified with Property Line and public records. $525,000/Acre APN: and Doc. No.: N/A (Listing) Comments: This parcel is Zoned R-3 Multi-family use within the City of North Las Vegas. It is approved for 536 condo units along with other parcels that are for sale. The zoning allows for a density of 25 units per gross acre.

44 Land Valuation 40 LAND SALES LOCATION MAP

45 Land Valuation 41 ANALYSIS OF ADJUSTMENTS As a part of our analysis, we have made individual comparisons between each of the sales and the subject sites, giving consideration to financing, condition of sale, time/market conditions, and value characteristics such as size, corner influence, utilities/off-sites, zoning, and location. The comparable land sales have a similar highest and best use potential as the subjects. The following is an explanation of the adjustments that have been applied to the unit prices of the comparable sales. Each has been considered on a price per square foot basis. Real Property Rights Conveyed A transaction price is always predicated on the real property interest conveyed. Many types of real estate, particularly income producing property, are sold subject to existing leases. The revenue generating potential of a property is often fixed or limited by the terms of existing leases. In the valuation process, adjustments must be made to reflect the difference between properties leased at market rent and those leased at rent either below or above market levels. The length of the remaining lease term affects these adjustments. The subject has been analyzed based on fee simple rights given that the subject is vacant and owned in fee simple estate. With regard to the property rights conveyed relative to the comparables, all of the sales involved transfers of fee simple rights. Therefore, no adjustments are required for real property rights conveyed. Financing The transaction price of one property may differ from that of an identical property due to different financing arrangements. For example, the purchaser of a comparable property may have assumed an existing mortgage at a favorable interest rate. In another case a developer or seller may have arranged a buy down, paying cash to the lender so that a mortgage with a below market interest rate could be offered. In both cases, the buyer may have paid higher price for the properties to obtain below market financing. For this analysis, the property has been valued based upon cash equivalent terms. Each of the sale transactions were found to have been negotiated with financing that was either on an all cash basis or financing that did not influence the sales price. In conclusion, no adjustment for financing was considered appropriate to any of the land sales. Conditions of Sale When the conditions of sale are atypical the result may be a sales price that is higher or lower than a normal market transaction. Examples of atypical transactions are those that occur between related parties or distress sales. Each sale has been examined for atypical characteristics that have been confirmed by either the broker or a principal party to the transaction. All of the sales appeared to have sold with normal conditions. However, Listings 1, 2, and 3 need to be adjusted downward as the properties will most likely sell at a price lower than the current list price. I have adjusted all 3 listings downward 5%.

46 Land Valuation 42 Time/Market Conditions Comparable sales that occurred under different market conditions than those applicable to the subject on the effective date of the report require adjustment for any differences that affect their values. A common adjustment for market conditions is made for differences occurring since the date of sale. Since the time the comparable sales were transacted, general values may have increased or decreased and investor s perceptions of the market conditions may have changed. Although the adjustment for market conditions is often referred to as a time adjustment, time is not the cause of the adjustment. Market conditions which shift over time create the need for an adjustment, not time itself. If market conditions have not changed, no adjustment is required even though considerable time may have elapsed. Changes in market conditions are usually measured as a percentage of previous prices. There are two traditional methods of estimating this percentage change due to market conditions. The first method is paired analysis. If the physical and economic characteristics of a property remain unchanged, analyzing two or more sales of the same property over a period of time will indicate the rate of price change. Sales and re-sales of the same property provide the best indication of the change in market conditions over time. If data on re-sales are unavailable, then the second method typically utilized is to survey knowledgeable market participants to estimate the potential impact of changing market conditions as a percentage change in a previous price. The comparable sales used in this analysis closed escrow from July, 2007 to July, There has been growing weakness in the economy, along with very tight financing since 2007, and an adjustment for market conditions is needed. The decrease in price was first analyzed by comparing the sales used in this analysis as follows: Identification Es Maryland Pkwy, S of Wigwam , 012, 026; NWc Reno Ave. and Newport Cove and 002 Closing Date Price/ Unit Monthly Decrease 08/14/07 $38, mos. Annualized 08/29/08 $30,952 (1.62%) (19.46%) The above comparison indicates a downward trend of about 20% from August, 2007 to August 2008, and the decline in the economy and the real estate market since August 2008 has continued. Based on this data, I have adjusted the sales downward 1.67% per month (20% annually). Location An adjustment for location may be required when the locational characteristics of a comparable property are different from those of the subject property. Most comparable properties in the same neighborhood have similar locational characteristics, but variations may exist within a neighborhood. The specific location of a comparable property can influence its price. Further, the access and visibility from a major arterial or location within a specific area can have a positive impact upon the property price. Arterial exposure is primarily important for ease of locating and accessing the property by the public.

47 Land Valuation 43 The subject property is located south of the 215 beltway with visibility from this major arterial. Access is currently difficult as Centennial Parkway is not complete. With that said, the location of the property is considered to be similar to Sales 1 and 3 and Listings 1, 2, and 3. Sale 2 is located on the south end of the valley in an area that has better market conditions. I have adjusted this sale downward 10%. Sale 5 is also superior and has been adjusted downward 10%. Sale 4 is located in an industrial area, east of Interstate 15. This property is inferior to the subject and has been adjusted 20%. Size Typically, the price per square foot of a smaller parcel will be higher than the sales price per square foot of a larger parcel; conversely, the smaller the size of the site, the higher the price (per square foot). This assumption is based upon the principle of economy of scale which is predicated upon the inverted relationship between size and price. Adjustments for size are typically considered when there is a wide range between the comparable sales and the subject site. Although there is some disparity in size, and adjustment for size was not discernible. Therefore, no adjustment has been made to any of the comparables. Shape The analysis of shape takes into consideration a particular site s dimensions, street frontage, width, depth, and shape. It relates to the principle of functional utility. For example, an odd-shaped parcel may be appropriate for a dwelling; however, it is unacceptable for most types of commercial or industrial use. In addition, odd shaped parcels may require additional development cost, especially for single-family residential subdivisions. Furthermore, odd-shaped parcels generally have less utility. The subject property is irregular in shape. No detrimental effects were found for the development of the subject site. All land sales are considered similar to the subject property in terms of shape and therefore, no adjustments are necessary. Utilities/Off-sites The offsite adjustment takes into consideration certain infrastructure, such as utilities and services that are available to a particular site. Additionally, the quality, condition, and adequacy of the access to utility hookups can influence the sales price of a particular property. Typically, vacant land with offsite improvements already installed sell at a higher price per acre than those in need of offsite improvements. The subject requires road improvements and dedications. All utilities are nearby. The sales and listings all required some form of offsite improvements or extension of utilities with the exception of Sale 4 which had all offsites installed and utilities to the site. This sale has been adjusted downward 5% or $20,832 per acre. Economic Characteristics Economic characteristics include all the attributes of a property that affect its net operating income. This element of comparison is usually applied to income-producing properties. Characteristics that

48 Land Valuation 44 affect a property s net operating income include operating expenses, quality of management, tenant mix, rent concessions, lease terms, lease expiration dates, renewal options, and lease provisions such as expense recovery clauses. For vacant land parcels, this adjustment typically identifies other income items such as billboard leases, storage yard leases, and land leases. No adjustments were necessary for the land sales, they were considered to be similar to that of the subject. Use/Zoning In the valuation of vacant land, zoning is one of the primary factors in determining the best use of the property, given that zoning can serve as the test of legal permissibility. As a result, zoning is typically a primary element in the selection of market data. When comparable properties with the same zoning as the subject are lacking or scarce, parcels with slightly different zoning that have a similar highest and best use as the subject may be used as comparables. However, these comparables must be adjusted for the difference in utility if the market indicates that it is appropriate. All of the sales utilized in this analysis are zoned for mixed or commercial uses. Therefore, no adjustment was felt to be necessary for any of the sales utilized in our analysis for zoning. Non-Realty Components Non-realty components of value include personalty, business concerns, or other items that do not constitute real property but are included in the sale price of either the comparable or the subject property. These components should be analyzed separately from the realty. In most cases the economic lives, associated investment risks, rate of return criteria, and collateral security for such non-realty components differ from those of the realty. Furniture, fixtures, and equipment in a hotel or restaurant are typical examples of personalty. In the appraisal of properties in which the business operation is essential to the use of the realty, the use of the non-realty component must be recognized, estimated, and reported. The land sales were all vacant sites or purchased as if vacant and no non-realty components were reportedly included in the transactions. Therefore, no adjustments were considered appropriate for non-realty components to any of the land sale comparables. Conclusion of Land Valuation The preceding adjustments have been applied to the land sales. These adjustments are summarized as follows:

49 Land Valuation 45 LAND SALES ADJUSTMENT GRID Sale 1 Sale 2 Sale 3 Sale 4 Sale 5 Listing 1 Listing 2 Listing 3 Location SS Centennial ES Maryland Pky NS Cactus Ave Craig Road & SEC US 95/ SWC of Regena Grand Teton & Centennial, East W of I-215 S of Wigwam W of Maryland Lamb Blvd. Lone Mtn and Donna Fort Apache of Novak Date of Sale 7/23/2007 8/14/2007 2/15/2008 2/26/2008 7/25/2008 N/A N/A N/A Sale Price $13,500,000 $14,170,000 $2,800,000 $8,400,000 $8,301,000 $3,000,000 $16,500,000 $9,124,500 Land Area (Gross Acres) Density Multifamily Units Approved PRICE PER UNIT $32,609 $38,822 $31,111 $26,923 $32,940 $24,000 $20,625 $21,024 Price Per Gross Acre $900,000 $913,604 $660,377 $552,632 $750,542 $600,000 $515,625 $525,000 Real Property Rights Conveyed $0 $0 $0 $0 $0 $0 $0 $0 SUBTOTAL $900,000 $913,604 $660,377 $552,632 $750,542 $600,000 $515,625 $525,000 Financing Terms $0 $0 $0 $0 $0 $0 $0 $0 SUBTOTAL $900,000 $913,604 $660,377 $552,632 $750,542 $600,000 $515,625 $525,000 Condition of Sale $0 $0 $0 $0 $0 ($30,000) ($25,781) ($26,250) SUBTOTAL $900,000 $913,604 $660,377 $552,632 $750,542 $570,000 $489,844 $498,750 Time/Market Conditions ($329,300) ($323,200) ($166,500) ($136,000) ($122,900) $0 $0 $0 SUBTOTAL $570,700 $590,404 $493,877 $416,632 $627,642 $570,000 $489,844 $498,750 Location $0 ($59,040) $0 $83,326 ($62,764) $0 $0 $0 Physical Characteristics Size $0 $0 $0 $0 $0 $0 $0 $0 Shape/Encumberances $0 $0 $0 $0 $0 $0 $0 $0 Corner Influence $0 $0 $0 $0 $0 $0 $0 $0 Offsites/Utilities $0 $0 $0 ($20,832) $0 $0 $0 $0 Topography/Flood zone $0 $0 $0 $0 $0 $0 $0 $0 Economic Characteristics $0 $0 $0 $0 $0 $0 $0 $0 Use/Zoning $0 $0 $0 $0 $0 $0 $0 $0 Non-Realty Components $0 $0 $0 $0 $0 $0 $0 $0 Demolitiono of Improvements $0 $0 $0 $0 $0 $0 $0 $0 NET ADJUSTMENTS $0 ($59,040) $0 $62,495 ($62,764) $0 $0 $0 ADJ. PRICE / ACRE $570,700 $531,364 $493,877 $479,126 $564,878 $570,000 $489,844 $498,750 Reconciliation After adjustments have been made, the comparables provide an adjusted range from $479,126 to $564,878 per gross acre. The sales and listings all have densities similar to the subject property. However, Sale 3 and Listing 1 are smaller than the subject and were given less weight as a result. Since market conditions have changed significantly in the past couple of years, more weight has been afforded to the listings which would set the upper limit to value. Specifically, Listings 2 and 3 provided a range from $489,750 to $489,844 per acre. Excluding the two highest and two lowest sales and listings, the four remaining properties provided a range from adjusted prices of $498,750, $493,877, $531,364, and $564,878 per acre. Again, with more weight afforded to the listings which should provide the upper end to value, I have formed an opinion of the market value of the subject property at $500,000 per gross acre. It is important to note that this equates to $20,000 per unit which is under the range of the sales and listings. However, Listings 2 and 3 are listed at $20,625 and $21,024 per unit. Assuming that these listings sell for less than their list price, $20,000 per unit appears to be reasonable. In summary, I have formed an opinion the market value of the subject site in fee simple ownership, subject to the assumptions and limiting conditions and special assumptions contained herein as of May 19, 2009 as follows:

50 Land Valuation 46 SUMMARY OF LAND VALUE Estimated Land Land Acres Price Per Gross Acre $500,000 /Acre Indicated Market Value $12,040,000 Rounded $12,040,000

51 Exposure Time and Marketing Period 47 EXPOSURE TIME AND MARKETING PERIOD The aforementioned market value opinion is predicated upon an estimated exposure time of 12 to 18 months. This is the length of time that the property would need to have been exposed on the market to achieve the opinion of market value (i.e. a retrospective view). The exposure time is based upon comparable sales data compiled by Costar Comps, as well as on discussions with real estate brokers and developers active in the subject area. The marketing period of the subject property has also been estimated at 12 to 18 months. The marketing period is the length of time that the property would need to be exposed to the market to achieve a price commensurate with the opinion of market value (i.e. a future perspective beginning on the date of value). The marketing period is based upon comparable sales, and takes into consideration the future supply of similar property types in the subject s market area. It also assumes prudent marketing and an asking price (list price) similar to the concluded market value opinion.

52 Addenda ADDENDA

53 Addenda SUBJECT PHOTOGRAPHS

54 Addenda View of Centennial Parkway looking west with the subject to the right..view of Centennial Parkway looking northeast with the subject to the left.

55 Addenda View of Valley Drive looking north with the subject to the left. View of Valley Drive looking south with the subject to the right.

56 Addenda View of the subject looking westerly with I-215 to the right. View of the subject looking west from the east side of the parcel.

57 Addenda View of the subject looking northwest from Valley Drive. View of the subject looking west with the flood channel located to the left.

58 Addenda FLOOD MAP

59 Addenda

60 Addenda

61 Addenda PUD ZONING (NORTH LAS VEGAS)

62 Addenda

63 Addenda

64 Addenda

65 Addenda

66 Addenda

67 Addenda