Exhibit IV. Property Appraisal Report by Intrgra Realty Resources dated 10/3/16

Transcription

1 Exhibit IV. Property Appraisal Report by Intrgra Realty Resources dated 10/3/16 RFP 2018C-01 COMMERCIAL REAL ESTATE SERVICES - FLAGLER CENTER PROPERTY Page 40 of 42

2 Integra Realty Resources Jacksonville Appraisal of Real Property Vacant Land Flagler Center Blvd. Jacksonville, Duval County, Florida Prepared For: Florida State College at Jacksonville Effective Date of the Appraisal: October 3, 2016 Report Format: Appraisal Report Standard Format IRR - Jacksonville File Number:

3 Flagler Center Blvd. Jacksonville, Florida

4 Integra Realty Resources 6278 Dupont Station Court T Jacksonville Unit 2 F Jacksonville, FL October 4, 2016 Ms. Linda DeLeo, LEED AP Florida State College at Jacksonville 501 W. State Street Jacksonville, FL SUBJECT: Market Value Appraisal Flagler Center Blvd. Jacksonville, Duval County, Florida IRR - Jacksonville File No Dear Ms. DeLeo: Integra Realty Resources Jacksonville is pleased to submit the accompanying appraisal of the referenced property. The purpose of the appraisal is to develop an opinion of the market value as is of the fee simple interest in the property. The client for the assignment is Florida State College at Jacksonville, and the intended use is for property disposition purposes. The subject is a parcel of vacant land containing an area of usable acres, or 435,609 usable square feet. The property is zoned PUD, Planned Unit Development, which permits development rights for up to 100,000 SF of office development and/or educational institutional/school use with a maximum student capacity of 535 students. The appraisal is intended to conform with the Uniform Standards of Professional Appraisal Practice (USPAP), the Code of Professional Ethics and Standards of Professional Appraisal Practice of the Appraisal Institute, applicable state appraisal regulations, and the appraisal guidelines of Florida State College at Jacksonville. The appraisal is also prepared in accordance with the appraisal regulations issued in connection with the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA). To report the assignment results, we use the Appraisal Report option of Standards Rule 2-2(a) of USPAP. As USPAP gives appraisers the flexibility to vary the level of information in an Appraisal Report depending on the intended use and intended users of the appraisal, we

5 Ms. Linda DeLeo, LEED AP Florida State College at Jacksonville October 4, 2016 Page 2 adhere to the Integra Realty Resources internal standards for an Appraisal Report Standard Format. This format summarizes the information analyzed, the appraisal methods employed, and the reasoning that supports the analyses, opinions, and conclusions. Based on the valuation analysis in the accompanying report, and subject to the definitions, assumptions, and limiting conditions expressed in the report, our opinion of value is as follows: Value Conclusion Appraisal Premise Interest Appraised Date of Value Value Conclusion Market Value As Is Fee Simple October 3, 2016 $4,140,000 Extraordinary Assumptions and Hypothetical Conditions The value conclusions are subject to the following extraordinary assumptions that may affect the assignment results. An extraordinary assumption is uncertain information accepted as fact. If the assumption is found to be false as of the effective date of the appraisal, we reserve the right to modify our value conclusions. 1. None The value conclusions are based on the following hypothetical conditions that may affect the assignment results. A hypothetical condition is a condition contrary to known fact on the effective date of the appraisal but is supposed for the purpose of analysis. 1. None If you have any questions or comments, please contact the undersigned. Thank you for the opportunity to be of service. Respectfully submitted, INTEGRA REALTY RESOURCES - JACKSONVILLE J. Mark Williams State-Certified General Real Estate Appraiser Florida Certificate # RZ 1501 Telephone: , ext mwilliams@irr.com Deborah L. Cervi, SRA State-Certified General Real Estate Appraiser Florida Certificate # RZ 1522 Telephone: , ext dcervi@irr.com

6 Table of Contents Summary of Salient Facts and Conclusions 1 General Information 2 Identification of Subject 2 Sale History 2 Pending Transactions 2 Purpose of the Appraisal 2 Definition of Market Value 3 Definition of As Is Market Value 3 Definition of Property Rights Appraised 3 Intended Use and User 3 Applicable Requirements 4 Report Format 4 Prior Services 4 Scope of Work 4 Economic Analysis 6 Duval County Area Analysis 6 Surrounding Area Analysis 11 Property Analysis 18 Land Description and Analysis 18 Real Estate Taxes 22 Flagler Center Owner Association 22 Highest and Best Use 23 Valuation 25 Valuation Methodology 25 Sales Comparison Approach 26 Analysis and Adjustment of Sales 29 Land Value Conclusion 31 Reconciliation and Conclusion of Value 32 Exposure Time 32 Marketing Period 32 Certification 33 Assumptions and Limiting Conditions 35 Addenda A. Appraiser Qualifications B. Property Information C. Comparable Data

7 Summary of Salient Facts and Conclusions 1 Summary of Salient Facts and Conclusions Property Name Address Property Type Owner of Record Tax ID Land Area Flagler Center Blvd. Jacksonville, Duval County, Florida Land - Commercial Florida State College at Jacksonville acres; 435,609 SF Zoning Designation Highest and Best Use Exposure Time; Marketing Period PUD, Planned Unit Development Office use 12 months; 12 months Effective Date of the Appraisal October 3, 2016 Date of the Report October 4, 2016 Property Interest Appraised Fee Simple Sales Comparison Approach Number of Sales 5 Range of Sale Dates Mar 11 to Aug 16 Range of Prices per Usable SF (Unadjusted) $ $10.01 Market Value Conclusion $4,140,000 ($9.50/Usable SF) The values reported above are subject to the definitions, assumptions, and limiting conditions set forth in the accompanying report of which this summary is a part. No party other than Florida State College at Jacksonville may use or rely on the information, opinions, and conclusions contained in the report. It is assumed that the users of the report have read the entire report, including all of the definitions, assumptions, and limiting conditions contained therein. Extraordinary Assumptions and Hypothetical Conditions The value conclusions are subject to the following extraordinary assumptions that may affect the assignment results. An extraordinary assumption is uncertain information accepted as fact. If the assumption is found to be false as of the effective date of the appraisal, we reserve the right to modify our value conclusions. 1. None The value conclusions are based on the following hypothetical conditions that may affect the assignment results. A hypothetical condition is a condition contrary to known fact on the effective date of the appraisal but is supposed for the purpose of analysis. 1. None

8 General Information 2 General Information Identification of Subject The subject is a parcel of vacant land containing an area of usable acres, or 435,609 usable square feet. The property is zoned PUD, Planned Unit Development, which permits development rights for up to 100,000 SF of office development and/or educational institutional/school use with a maximum student capacity of 535 students. A legal description of the property is in the addenda. Property Identification Property Name Address Flagler Center Blvd. Jacksonville, Florida Tax ID Owner of Record Florida State College at Jacksonville Census Tract Number Sale History The most recent closed sale of the subject is summarized as follows: Sale Date August 19, 2011 Seller FDG Flagler Center Land LLC Buyer Florida State College at Jacksonville Sale Price $3,659,040 Recording Instrument Number Book 15692, Page 1981 Expenditures Since Purchase None To the best of our knowledge, no sale or transfer of ownership has taken place within a three-year period prior to the effective appraisal date. Pending Transactions To the best of our knowledge, the property is not subject to an agreement of sale or an option to buy, nor is it listed for sale, as of the effective appraisal date. Purpose of the Appraisal The purpose of the appraisal is to develop an opinion of the market value as is of the fee simple interest in the property as of the effective date of the appraisal, October 3, The date of the report is October 4, The appraisal is valid only as of the stated effective date or dates.

9 General Information 3 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 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: Buyer and seller are typically motivated; Both parties are well informed or well advised, and acting in what they consider their own best interests; A reasonable time is allowed for exposure in the open market; Payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and 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: Code of Federal Regulations, Title 12, Chapter I, Part 34.42[g]; also Interagency Appraisal and Evaluation Guidelines, Federal Register, 75 FR 77449, December 10, 2010, page 77472) Definition of As Is Market Value As is market value is defined as, The estimate of the market value of real property in its current physical condition, use, and zoning as of the appraisal s effective date. (Source: Appraisal Institute, The Dictionary of Real Estate Appraisal, 6th ed. (Chicago: Appraisal Institute, 2015); also Interagency Appraisal and Evaluation Guidelines, Federal Register, 75 FR 77449, December 10, 2010, page 77471) Definition of Property Rights Appraised Fee simple estate is defined as, 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: Appraisal Institute, The Dictionary of Real Estate Appraisal, 6th ed. (Chicago: Appraisal Institute, 2015) Intended Use and User The intended use of the appraisal is for property disposition purposes. The client and intended user is Florida State College at Jacksonville. The appraisal is not intended for any other use or user. No party or parties other than Florida State College at Jacksonville may use or rely on the information, opinions, and conclusions contained in this report.

10 General Information 4 Applicable Requirements This appraisal is intended to conform to the requirements of the following: Uniform Standards of Professional Appraisal Practice (USPAP); Code of Professional Ethics and Standards of Professional Appraisal Practice of the Appraisal Institute; Applicable state appraisal regulations; Appraisal requirements of Title XI of the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA), revised June 7, 1994; Interagency Appraisal and Evaluation Guidelines issued December 10, 2010; Report Format This report is prepared under the Appraisal Report option of Standards Rule 2-2(a) of USPAP. As USPAP gives appraisers the flexibility to vary the level of information in an Appraisal Report depending on the intended use and intended users of the appraisal, we adhere to the Integra Realty Resources internal standards for an Appraisal Report Standard Format. This format summarizes the information analyzed, the appraisal methods employed, and the reasoning that supports the analyses, opinions, and conclusions. Prior Services USPAP requires appraisers to disclose to the client any other services they have provided in connection with the subject property in the prior three years, including valuation, consulting, property management, brokerage, or any other services. We have not performed any services, as an appraiser or in any other capacity, regarding the property that is the subject of this report within the three-year period immediately preceding acceptance of this assignment. Scope of Work To determine the appropriate scope of work for the assignment, we considered the intended use of the appraisal, the needs of the user, the complexity of the property, and other pertinent factors. Our concluded scope of work is described below. Valuation Methodology Appraisers usually consider the use of three approaches to value when developing a market value opinion for real property. These are the cost approach, sales comparison approach, and income capitalization approach. Use of the approaches in this assignment is summarized as follows: Approaches to Value Approach Applicability to Subject Use in Assignment Cost Approach Not Applicable Not Utilized Sales Comparison Approach Applicable Utilized Income Capitalization Approach Not Applicable Not Utilized

11 General Information 5 We use only the sales comparison approach in developing an opinion of value for the subject. This approach is applicable to the subject because there is an active market for similar properties, and sufficient sales data is available for analysis. The cost approach is not applicable because there are no improvements that contribute value to the property, and the income approach is not applicable because the subject is not likely to generate rental income in its current state. Research and Analysis The type and extent of our research and analysis is detailed in individual sections of the report. This includes the steps we took to verify comparable sales, which are disclosed in the comparable sale profile sheets in the addenda to the report. Although we make an effort to confirm the arms-length nature of each sale with a party to the transaction, it is sometimes necessary to rely on secondary verification from sources deemed reliable. Inspection J. Mark Williams inspected the property on October 4, Deborah L. Cervi, SRA, inspected the property on October 4, 2016.

12 Duval County Area Analysis 6 Economic Analysis Duval County Area Analysis Duval County is located in northeastern Florida. It is 762 square miles in size and has a population density of 1,201 persons per square mile. Duval County is part of the Jacksonville, FL Metropolitan Statistical Area, hereinafter called the Jacksonville MSA, as defined by the U.S. Office of Management and Budget. Population Duval County has an estimated 2016 population of 915,166, which represents an average annual 1.0% increase over the 2010 census of 864,263. Duval County added an average of 8,484 residents per year over the period, but its annual growth rate lagged the State of Florida rate of 1.3%. Looking forward, Duval County's population is projected to increase at a 1.0% annual rate from , equivalent to the addition of an average of 9,265 residents per year. Duval County's growth rate is expected to lag that of Florida, which is projected to be 1.2%. Population Trends Population Compound Ann. % Chng 2010 Census 2016 Est Est Duval County 864, , , % 1.0% Jacksonville MSA 1,345,596 1,450,789 1,536, % 1.2% Florida 18,801,310 20,299,288 21,515, % 1.2% Source: The Nielsen Company Employment Total employment in Duval County is currently estimated at 474,022 jobs. Between year-end 2005 and the present, employment rose by 12,071 jobs, equivalent to a 2.6% increase over the entire period. There were gains in employment in seven out of the past ten years despite the national economic downturn and slow recovery. Duval County's rate of employment growth over the last decade surpassed that of Florida, which experienced an increase in employment of 0.4% or 32,555 jobs over this period. A comparison of unemployment rates is another way of gauging an area s economic health. Over the past decade, the Duval County unemployment rate has been consistently higher than that of Florida, with an average unemployment rate of 7.2% in comparison to a 6.9% rate for Florida. A higher unemployment rate is a negative indicator. Recent data shows that the Duval County unemployment rate is 5.2% in comparison to a 4.9% rate for Florida, a negative sign that is consistent with the fact that Duval County has underperformed Florida in the rate of job growth over the past two years.

13 Duval County Area Analysis 7 Employment Trends Total Employment (Year End) Unemployment Rate (Ann. Avg.) Year Duval County % Change Florida % Change Duval County Florida ,951 7,990, % 3.7% , % 8,128, % 3.5% 3.2% , % 8,014, % 4.2% 4.0% , % 7,585, % 6.4% 6.3% , % 7,209, % 10.5% 10.4% , % 7,260, % 11.4% 11.0% , % 7,368, % 10.3% 10.0% , % 7,538, % 8.8% 8.5% , % 7,741, % 7.6% 7.3% , % 8,012, % 6.7% 6.3% 2015* 474, % 8,023, % 5.7% 5.4% Overall Change , % 32, % Avg Unemp. Rate % 6.9% Unemployment Rate - June % 4.9% *Total employment data is as of September 2015; unemployment rate data reflects the average of 12 months of Source: Bureau of Labor Statistics and Economy.com. Employment figures are from the Quarterly Census of Employment and Wages (QCEW). Unemployment rates are from the Current Population Survey (CPS). The figures are not seasonally adjusted. Major employers in Duval County are shown in the following table. Major Employers - Duval County Name Number of Employees 1 Naval Air Station Jacksonville 25,240 2 Duval County Public Schools 14,480 3 Naval Station Mayport 9,000 4 City of Jacksonville 8,820 5 Baptist Health 8,270 6 Bank of America Merrill Lynch 8,000 7 Blue Cross and Blue Shield of Florida 6,500 8 Mayo Clinic 4,970 9 Citi 4, JP Morgan Chase 4,200 Source: City of Jacksonville (11/2012) Gross Domestic Product Gross Domestic Product (GDP) is a measure of economic activity based on the total value of goods and services produced in a defined geographic area. Although GDP figures are not available at the county level, data reported for the Jacksonville MSA is considered meaningful when compared to the nation overall, as Duval County is part of the MSA and subject to its influence. Economic growth, as measured by annual changes in GDP, has been considerably lower in the Jacksonville MSA than the United States overall during the past eight years. The Jacksonville MSA has

14 Duval County Area Analysis 8 declined at a 0.7% average annual rate while the United States has grown at a 0.8% rate. As the national economy improves, the Jacksonville MSA has recently performed better than the United States. GDP for the Jacksonville MSA rose by 2.9% in 2014 while the United States GDP rose by 2.2%. The Jacksonville MSA has a per capita GDP of $42,022, which is 14% less than the United States GDP of $49,110. This means that Jacksonville MSA industries and employers are adding relatively less value to the economy than their counterparts in the United States overall. Gross Domestic Product Year ($ Mil) Jacksonville MSA % Change ($ Mil) United States % Change ,765 14,798, , % 14,718, % , % 14,320, % , % 14,628, % , % 14,833, % , % 15,127, % , % 15,317, % , % 15,659, % Compound % Chg ( ) -0.7% 0.8% GDP Per Capita 2014 $42,022 $49,110 Source: Bureau of Economic Analysis and Economy.com; data released September The release of state and local GDP data has a longer lag time than national data. The data represents inflation-adjusted "real" GDP stated in 2009 dollars. Income, Education and Age Duval County has a higher level of household income than Florida. Median household income for Duval County is $50,000, which is 4.4% greater than the corresponding figure for Florida. Median Household Income Median Duval County $50,000 Florida $47,912 Comparison of Duval County to Florida + 4.4% Source: The Nielsen Company Residents of Duval County have a similar level of educational attainment to those of Florida. An estimated 27% of Duval County residents are college graduates with four-year degrees, which is the same percentage as Florida residents. People in Duval County are younger than their Florida counterparts. The median age for Duval County is 37 years, while the median age for Florida is 42 years.

15 Duval County Area Analysis 9 Education & Age Percent College Graduate Median Age 80% 70% 60% 50% 40% 30% 20% 10% Duval County 27% 27% Florida Duval County Florida 42 Source: The Nielsen Company Conclusion The Duval County economy will benefit from a growing population base and a higher level of median household income. Duval County experienced growth in the number of jobs over the past decade, and it is reasonable to assume that employment growth will occur in the future. We anticipate that the Duval County economy will improve and employment will grow, strengthening the demand for real estate.

16 Duval County Area Analysis 10 Area Map

17 Surrounding Area Analysis 11 Surrounding Area Analysis Location The subject is located in the Butler/Baymeadows office submarket of the Southeast Planning District. Access and Linkages Primary access to the area is provided by Philips Highway (US Highway 1) and Interstate 95. Old St. Augustine Road is an east-west minor arterial that provides access to the subject from these major area roadways. Interstate 95 has interchange access at its intersection with Old St. Augustine Road. Flagler Center Boulevard and Gran Bay Parkway are the primary roads serving Flagler Center. The 9B Extension was recently completed with a full interchange at Philips Highway in proximity south of the subject. Overall, vehicular access is good. Public transportation is provided by JTA and provides access at the subject s location and throughout the MSA. The Jacksonville international Airport is located about 25 miles from the property; travel time is about 30 minutes, depending on traffic conditions. The Jacksonville CBD, the economic and cultural center of the region, is approximately 16 miles from the property. Demand Generators Retail demand generators include a significant employment base, a densely populated trade area with above average household income levels, and proximity of retail uses. Flagler Center DRI (Development of Regional Impact) comprises 878± gross acres and is proposed for 4,100,000 square feet of office uses (not including 600,000 SF from the Bartram Park DRI); 45 acres of light industrial uses; 200,000 SF of commercial uses; a 500-bed hospital; 250 hotel rooms; 650 multi-family units; and 79 single-family residential units. The uses are subject to a conversion table which will allow conversion of the land uses in the DRI. Baptist South Medical Center hospital is located at the southeast quadrant of I-95 and Old St. Augustine Road. The Lakeside mid-rise office complex comprises five buildings totaling 601,168 SF; and Flagler Center contains four mid-rise office buildings containing a total of 399,528 SF. There are three warehouse facilities in Flagler Center containing 357,800 SF and the GSA office building contains 51,600 SF. Citicorp is also located in Flagler Center. The Learning Center is located at the southwest corner of Old St. Augustine Road and Flagler Center Blvd., immediately west of the subject. Duval Charter School at Flagler Center and JaRu headquarters are located in proximity south of the subject. A retail center is under construction in Flagler Center located at the southeast quadrant of Old St. Augustine Rd and Kenan Drive. Three apartment complexes totaling 960 units are in various stages of construction in Flagler Center south of the subject along Gran Bay Parkway as follows; Alaqua Apartments, Gran Bay Apartments, and Palm Bay Club. Demographic Factors A demographic profile of the surrounding area, including population, households, and income data, is presented in the following table.

18 Surrounding Area Analysis 12 Surrounding Area Demographics 2016 Estimates 1-Mile Radius 3-Mile Radius 5-Mile Radius Duval County Jacksonville MSA Florida Population ,034 54, ,263 1,345,596 18,801,310 Population ,165 20,814 64, ,166 1,450,789 20,299,288 Population ,296 22,927 71, ,493 1,536,284 21,515,406 Compound % Change % 2.4% 2.8% 1.0% 1.3% 1.3% Compound % Change % 2.0% 2.0% 1.0% 1.2% 1.2% Households ,285 21, , ,146 7,420,802 Households ,503 24, , ,249 7,994,749 Households ,404 26, , ,445 8,476,361 Compound % Change % 2.6% 2.5% 1.1% 1.4% 1.2% Compound % Change % 2.0% 1.9% 1.1% 1.2% 1.2% Median Household Income 2016 $89,295 $83,773 $82,106 $50,000 $54,212 $47,912 Average Household Size College Graduate % 57% 46% 46% 27% 28% 27% Median Age Owner Occupied % 78% 75% 73% 61% 67% 67% Renter Occupied % 22% 25% 27% 39% 33% 33% Median Owner Occupied Housing Value $238,861 $205,958 $239,203 $154,971 $171,658 $172,146 Median Year Structure Built Avg. Travel Time to Work in Min Source: The Nielsen Company As shown above, the current population within a 3-mile radius of the subject is 20,814, and the average household size is 2.4. Population in the area has grown since the 2010 census, and this trend is projected to continue over the next five years. Compared to Duval County overall, the population within a 3-mile radius is projected to grow at a faster rate. Median household income is $83,773, which is higher than the household income for Duval County. Residents within a 3-mile radius have a considerably higher level of educational attainment than those of Duval County, while median owner occupied home values are considerably higher. Land Use The area is suburban in character and approximately 50% developed. Predominant land uses are commercial office and retail uses. During the last five years, development has been predominantly of retail, office and apartments uses. The pace of development has generally been intermittent over this time. Outlook and Conclusions The area is in the growth stage of its life cycle. We anticipate that property values will increase in the near future.

19 Surrounding Area Analysis 13 Surrounding Area Map

20 Surrounding Area Analysis 14 Flagler Center Site Plan

21 Surrounding Area Analysis 15 Office Market Analysis The following chart is a recap of the Mid-Year 2016 CoStar Office Report for the Jacksonville MSA office market. The subject is located in the Butler/Baymeadows office submarket. The Jacksonville office market contains an overall inventory of 62.5 million square feet, with the subject submarket containing 9.9 million square feet (15.9%). The office market weakened because of the 2008/2009 financial crisis, however has shown recovery and growth as vacancy has remained under 13% since 2 nd Quarter The overall vacancy rate is reported to be 9.4% as of Mid-Year 2016, which represents a decrease from a high mark of 15.6% reported in 2009.

22 Surrounding Area Analysis 16 The average quoted asking rental rate for available office space, all classes, is $18.41 per square foot per year as of Mid-Year 2016 in the overall Jacksonville area. Overall, rents have increased steadily since the low point in 2012 of $16.86 per square foot. Office rents are reported here on a gross or full service basis. As of Mid-Year 2016, the subject submarket reports a vacancy rate of 10.7% with an average rental rate of $18.82 per SF. Rental rates have steadily increased since the 2014 level of $16.99 per SF, with the current rental rate higher than experienced since A summary of the subject s submarket is shown on the following charts.

23 Surrounding Area Analysis 17 Conclusions Flagler Center has a total of acres available, ranging in size from 1.0 to 33.6 acres. Permitted uses for the vacant land available for sale include office, light industrial, retail, hotels, and schools. CBRE is marketing the sites however the asking prices are not disclosed. As indicated by the listing broker, the seller bases the asking price on the most recent sales level at Flagler Center. Overall, demand for office space is considered to be moderate at the current time as indicated by the positive absorption trend over the past year combined with declining vacancy rates and rising effective rental rates.

24 Land Description and Analysis 18 Property Analysis Land Description and Analysis Land Description Land Area Source of Land Area Primary Street Frontage Secondary Street Frontage Shape Corner Topography Drainage Environmental Hazards Ground Stability Flood Area Panel Number 12031C0569H Date June 3, 2013 Zone X Description Outside of 500-year floodplain Insurance Required? No acres; 435,609 SF Survey prepared by Robert M Angus Associates Inc., dated 2/17/2011, indicated land area; seller representative (Adam Firstein ) confirmed site is all usable land Flagler Center Blvd feet Old St Augustine Rd feet Rectangular Yes Generally level and at street grade No problems reported or observed None reported or observed No problems reported or observed Zoning; Other Regulations Zoning Jurisdiction City of Jacksonville Zoning Designation PUD Description Planned Unit Development Legally Conforming? Appears to be legally conforming Zoning Change Likely? No Permitted Uses Development rights allocated to site (OR Book 15692, Page 1985) for up to 100,000 SF of office development and/or educational institutional/school use with a maximum student capacity of 535 students Minimum Lot Area None Minimum Lot Width (Feet) None Minimum Setbacks (Feet) Front: 100-ft; Side: 100-ft; Rear: 100-ft Maximum Building Height 60 feet Maximum Site Coverage None Maximum Floor Area Ratio None Parking Requirement Office: 4.5 spaces per 1,000 rentable SF Other Subject part of Flagler Center PUD (Ordinance E); Flagler Center (f/k/a Gran Park of Jacksonville) DRI (Development of Regional Impact - Development Order ); Mixed Use (MU) land use Utilities Service Water Sewer Electricity Natural Gas Local Phone Provider JEA JEA JEA Various providers Various providers

25 Land Description and Analysis 19 The subject site is located at the main entry to Flagler Center, an intersection complete with traffic signalization and signage. The site is bordered on the east by an improved railroad right-of-way, with visual exposure to Philips Highway (US Hwy 1) on the east. The 2015 FDOT AADT (Annual Average Daily Traffic) on Old St. Augustine Rd. at the subject s location is 15,000; and on US Highway 1 just north of Old St. Augustine Rd is 25,000 AADT. We are not experts in the interpretation of zoning ordinances. An appropriately qualified land use attorney should be engaged if a determination of compliance with zoning is required. Easements, Encroachments and Restrictions We were not provided a current title report to review. We are not aware of any easements, encroachments, or restrictions that would adversely affect value. Our valuation assumes no adverse impacts from easements, encroachments, or restrictions, and further assumes that the subject has clear and marketable title. Conclusion of Land Analysis Overall, the physical characteristics of the site and the availability of utilities result in functional utility suitable for a variety of uses including those permitted by zoning. We are not aware of any other particular restrictions on development.

26 Land Description and Analysis 20 View of subject showing Old St Augustine Rd frontage (Photo Taken on October 3, 2016) View of subject showing Old St Augustine Rd frontage (Photo Taken on October 3, 2016) View of subject showing Flagler Center Blvd frontage (Photo Taken on October 3, 2016) View of subject showing Flagler Center Blvd frontage (Photo Taken on October 3, 2016) Street scene Old St Augustine Rd view east (Photo Taken on October 3, 2016) Street scene Flagler Center Blvd view north (Photo Taken on October 3, 2016)

27 Land Description and Analysis 21 Survey

28 Real Estate Taxes 22 Real Estate Taxes The subject is exempt from taxes. Real estate assessments for the current tax year are shown in the following table. Taxes and Assessments Assessed Value Taxes and Assessments Ad Valorem Tax ID Land Improvements Total Tax Rate Taxes Direct Assessments Total $2,613,864 $0 $2,613, % Exempt $0 Exempt There are no delinquent taxes from prior years. Based on the concluded market value of the subject, the assessed value appears reasonable. Flagler Center Owner Association The annual owner s association fee is reported to be $15, ($0.04 per SF of land area).

29 Highest and Best Use 23 Highest and Best Use Process Before a property can be valued, an opinion of highest and best use must be developed for the subject site, both as vacant, and as improved. By definition, the highest and best use must be: Physically possible. Legally permissible under the zoning regulations and other restrictions that apply to the site. Financially feasible. Maximally productive, i.e., capable of producing the highest value from among the permissible, possible, and financially feasible uses. As Vacant Physically Possible The physical characteristics of the site do not appear to impose any unusual restrictions on development. Overall, the physical characteristics of the site and the availability of utilities result in functional utility suitable for a variety of uses. Legally Permissible The site is zoned PUD, Planned Unit Development. Permitted uses include development rights allocated to site (OR Book 15692, Page 1985) for up to 100,000 SF of office development and/or educational institutional/school use with a maximum student capacity of 535 students. To our knowledge, there are no legal restrictions such as easements or deed restrictions that would effectively limit the use of the property. Given prevailing land use patterns in the area, only office use is given further consideration in determining highest and best use of the site, as though vacant. Financially Feasible Based on our analysis of the market, there is currently adequate demand for office use in the subject s area. It appears that a newly developed office use on the site would have a value commensurate with its cost. Therefore, office use is considered to be financially feasible. Maximally Productive There does not appear to be any reasonably probable use of the site that would generate a higher residual land value than office use. Accordingly, it is our opinion that office use, developed to the normal market density level permitted by zoning, is the maximally productive use of the property. Conclusion Development of the site for office use is the only use that meets the four tests of highest and best use. Therefore, it is concluded to be the highest and best use of the property as vacant.

30 Highest and Best Use 24 As Improved No improvements are situated on the subject. Therefore, a highest and best analysis as improved is not applicable. Most Probable Buyer Taking into account the functional utility of the site and area development trends, the probable buyer is a developer or owner user.

31 Valuation Methodology 25 Valuation Valuation Methodology Appraisers usually consider three approaches to estimating the market value of real property. These are the cost approach, sales comparison approach and the income capitalization approach. The cost approach assumes that the informed purchaser would pay no more than the cost of producing a substitute property with the same utility. This approach is particularly applicable when the improvements being appraised are relatively new and represent the highest and best use of the land or when the property has unique or specialized improvements for which there is little or no sales data from comparable properties. The sales comparison approach assumes that an informed purchaser would pay no more for a property than the cost of acquiring another existing property with the same utility. This approach is especially appropriate when an active market provides sufficient reliable data. The sales comparison approach is less reliable in an inactive market or when estimating the value of properties for which no directly comparable sales data is available. The sales comparison approach is often relied upon for owner-user properties. The income capitalization approach reflects the market s perception of a relationship between a property s potential income and its market value. This approach converts the anticipated net income from ownership of a property into a value indication through capitalization. The primary methods are direct capitalization and discounted cash flow analysis, with one or both methods applied, as appropriate. This approach is widely used in appraising income-producing properties. Reconciliation of the various indications into a conclusion of value is based on an evaluation of the quantity and quality of available data in each approach and the applicability of each approach to the property type. The methodology employed in this assignment is summarized as follows: Approaches to Value Approach Applicability to Subject Use in Assignment Cost Approach Not Applicable Not Utilized Sales Comparison Approach Applicable Utilized Income Capitalization Approach Not Applicable Not Utilized

32 Sales Comparison Approach 26 Sales Comparison Approach To develop an opinion of the subject s land value, as if vacant and available to be developed to its highest and best use, we utilize the sales comparison approach. This approach develops an indication of value by researching, verifying, and analyzing sales of similar properties. Our sales research focused on transactions most relevant to the subject with regard to location, size, use, and transaction date. For this analysis, we use price per usable square foot as the appropriate unit of comparison because market participants typically compare sale prices and property values on this basis. The most relevant sales are summarized in the following table. Summary of Comparable Land Sales No. Name/Address Sale Date; Status Effective Sale Price Usable SF; Usable Acres Zoning $/Usable SF $/Usable Acre 1 GSA Office Site Mar-11 $1,539, ,191 PUD $8.99 $391,692 Flagler Center Blvd. Closed 3.93 Jacksonville Duval County Comments: The property is 3.93 usable acres and was purchased for development of a 47,386 square foot office building to be leased to the GSA for use as a US Immigration and Customs Enforcement office. 2 Clarity Pointe Jacksonville Jul-14 $1,400, ,828 PUD $10.01 $436, RG Skinner Pky. Closed 3.21 Jacksonville Duval County Comments: This land was sold to develop a 43,876 SF medical office Alzheimer's facility. The land was vacant at the time of sale and includes on-site retention and a.22 acre conservation easement. 3 Proposed Red Apple Charter School Feb-15 $2,025, ,401 PUD $6.54 $285,095 Flagler Center Blvd. Closed 7.10 Jacksonville Duval County Comments: This is the sale of parcel 5 located in Flagler Center. The site is located between I-95 and US 1 and just south of the Baptist South Medical Center and has off-site master retention. The site was purchased to build a two-story Red Apple Charter School. 4 Parcel 9 Flagler Center Nov-15 $1,546, ,633 PUD $7.01 $305,232 Gran Bay Pky. Closed 5.07 Jacksonville Duval County Comments: This is the sale of parcel 9 located in Flagler Center. According to the contract, development rights of up to 51,000 gross SF of building area in the office and/or commercial category are allocated to the site. The property was purchased to build a mid-rise office. 5 Gate Parkway Office Site Aug-16 $4,578, ,816 CO $10.00 $435,600 Gate Pky. Closed Jacksonville Duval County Comments: The legal description on the Special Warranty Deed indicates the site contains acres, with development rights allocated to the site for up to 165,000 SF of office development. The deed indicated the grantee agreed to purchase certain peak hour trips from the grantor for traffic impacts. Subject Aug-11 $3,659, ,609 PUD $8.40 $365,904 Closed Jacksonville, FL

33 Sales Comparison Approach 27 Comparable Land Sales Map

34 Sales Comparison Approach 28 Sale 1 GSA Office Site Sale 2 Clarity Pointe Jacksonville Sale 3 Proposed Red Apple Charter School Sale 4 Parcel 9 Flagler Center Sale 5 Gate Parkway Office Site

35 Sales Comparison Approach 29 Analysis and Adjustment of Sales The sales are compared to the subject and adjusted to account for material differences that affect value. Adjustments are considered for the following factors, in the sequence shown below. Adjustment Factor Accounts For Comments Effective Sale Price Real Property Rights Financing Terms Conditions of Sale Market Conditions Location Access/Exposure Size Shape and Topography Atypical economics of a transaction, such as demolition cost or expenditures by buyer at time of purchase. Fee simple, leased fee, leasehold, partial interest, etc. Seller financing, or assumption of existing financing, at non-market terms. Extraordinary motivation of buyer or seller, assemblage, forced sale. Changes in the economic environment over time that affect the appreciation and depreciation of real estate. Market or submarket area influences on sale price; surrounding land use influences. Convenience to transportation facilities; ease of site access; visibility; traffic counts. Inverse relationship that often exists between parcel size and unit value. Primary physical factors that affect the utility of a site for its highest and best use. No adjustment was required. No adjustment was required. No adjustment was required. No adjustment was required. Market conditions have been improving since the time of sale 1 therefore an upward annual adjustment of 3% was considered. Sales 2 and 5 were adjusted downward for superior location within the market. The subject has a corner location at the main entry to Flagler Center at a traffic controlled intersection, with visibility to US Highway 1. Sales 1, 2, 3 and 4 are inferior and were adjusted upward. Sale 5 was not adjusted due to visibility along J. Turner Butler Blvd. The sales were adjusted 1% for each one acre of land area difference. Sales 1, 2, 3 and 4 are smaller in size and were adjusted downward to consider economies of scale. Sale 5 is larger and was adjusted upward. No adjustment was required.

36 Sales Comparison Approach 30 Adjustment Factor Accounts For Comments Zoning/ Entitlements Availability of Utilities Government regulations that affect the types and intensities of uses allowable on a site. The specific level of governmental approvals attained pertaining to development of a site. The availability of water, sewer and electric services; versus well and septic system. The subject is entitled with development rights for office and/or school uses. Sale 2 was zoned for office and limited retail uses and was adjusted downward for superior zoning. No adjustment was required. Retention On-site versus off-site retention. Sale 2 is inferior with on-site retention and was adjusted upward. The following table summarizes the adjustments we make to each sale.

37 Sales Comparison Approach 31 Land Sales Adjustment Grid Subject Comparable 1 Comparable 2 Comparable 3 Comparable 4 Comparable 5 Name Flagler Center Land GSA Office Site Clarity Pointe Proposed Red Parcel 9 Flagler Gate Parkway Parcel Jacksonville Apple Charter School Center Office Site Address Flagler Center Flagler Center 8929 RG Skinner Flagler Center Gran Bay Pky. Gate Pky. Blvd. Blvd. Pky. Blvd. City Jacksonville Jacksonville Jacksonville Jacksonville Jacksonville Jacksonville County Duval Duval Duval Duval Duval Duval Sale Date Mar-11 Jul-14 Feb-15 Nov-15 Aug-16 Sale Status Closed Closed Closed Closed Closed Sale Price $1,539,351 $1,400,000 $2,025,000 $1,546,000 $4,578,156 Price Adjustment Description of Adjustment Effective Sale Price $1,539,351 $1,400,000 $2,025,000 $1,546,000 $4,578,156 Usable Square Feet 435, , , , , ,816 Usable Acres Zoning Code PUD PUD PUD PUD PUD CO Price per Usable Square Foot $8.99 $10.01 $6.54 $7.01 $10.00 Property Rights Fee Simple Fee Simple Fee Simple Fee Simple Fee Simple % Adjustment Financing Terms Cash to seller Cash to seller - Cash to seller Cash to seller Cash to seller % Adjustment Conditions of Sale % Adjustment Market Conditions 10/3/2016 Mar-11 Jul-14 Feb-15 Nov-15 Aug-16 Annual % Adjustment 3% 17% 7% 5% 3% Cumulative Adjusted Price $10.52 $10.71 $6.87 $7.22 $10.00 Location -10% -10% Access/Exposure 10% 2% 10% 10% Size -6% -7% -3% -5% 1% Shape and Topography Zoning/Entitlements -10% 5% Availability of Utilites Retention 15% Net $ Adjustment $0.41 -$1.05 $0.49 $0.37 -$0.45 Net % Adjustment 4% -10% 7% 5% -4% Final Adjusted Price $10.93 $9.66 $7.36 $7.58 $9.55 Overall Adjustment 22% -3% 12% 8% -4% Range of Adjusted Prices Average Indicated Value $ $10.93 $9.02 $9.50 Land Value Conclusion Prior to adjustment, the sales reflect a range of $ $10.01 per usable square foot. After adjustment, the range is narrowed to $ $10.93 per usable square foot, with an average of $9.02 per usable square foot. We give greatest weight to sales 1 and 5, and arrive at a land value conclusion as follows: Land Value Conclusion Indicated Value per Usable Square Foot $9.50 Subject Usable Square Feet 435,609 Indicated Value $4,138,286 Rounded $4,140,000

38 Reconciliation and Conclusion of Value 32 Reconciliation and Conclusion of Value As discussed previously, we use only the sales comparison approach in developing an opinion of value for the subject. The cost and income approaches are not applicable, and are not used. Based on the preceding valuation analysis and subject to the definitions, assumptions, and limiting conditions expressed in the report, our value opinion follows: Value Conclusion Appraisal Premise Interest Appraised Date of Value Value Conclusion Market Value As Is Fee Simple October 3, 2016 $4,140,000 Extraordinary Assumptions and Hypothetical Conditions The value conclusions are subject to the following extraordinary assumptions that may affect the assignment results. An extraordinary assumption is uncertain information accepted as fact. If the assumption is found to be false as of the effective date of the appraisal, we reserve the right to modify our value conclusions. 1. None The value conclusions are based on the following hypothetical conditions that may affect the assignment results. A hypothetical condition is a condition contrary to known fact on the effective date of the appraisal but is supposed for the purpose of analysis. 1. None Exposure Time Exposure time is the length of time the subject property would have been exposed for sale in the market had it sold on the effective valuation date at the concluded market value. Based on the concluded market value stated previously, it is our opinion that the probable exposure time is 12 months. Marketing Period Marketing time is an estimate of the amount of time it might take to sell a property at the concluded market value immediately following the effective date of value. We estimate the subject s marketing period at 12 months.

39 Certification 33 Certification We certify that, to the best of our knowledge and belief: 1. The statements of fact contained in this report are true and correct. 2. The reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions, and are 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 not performed any services, as an appraiser or in any other capacity, regarding the property that is the subject of this report within the three-year period immediately preceding acceptance of this assignment. 5. We have no bias with respect to the property that is the subject of this report or to the parties involved with this assignment. 6. Our engagement in this assignment was not contingent upon developing or reporting predetermined results. 7. 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. 8. Our analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the Uniform Standards of Professional Appraisal Practice as well as applicable state appraisal regulations. 9. The reported analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the Code of Professional Ethics and Standards of Professional Appraisal Practice of the Appraisal Institute. 10. The use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representatives. 11. J. Mark Williams inspected the property that is the subject of this report. Deborah L. Cervi, SRA, has inspected the subject. 12. No one provided significant real property appraisal assistance to the person(s) signing this certification. 13. We have experience in appraising properties similar to the subject and are in compliance with the Competency Rule of USPAP. 14. As of the date of this report, Deborah L. Cervi, SRA has completed the continuing education program for Designated Members of the Appraisal Institute.

40 Certification As of the date of this report, J. Mark Williams has completed the Standards and Ethics Education Requirements for Candidates/Practicing Affiliates of the Appraisal Institute. J. Mark Williams State-Certified General Real Estate Appraiser Florida Certificate # RZ 1501 Deborah L. Cervi, SRA State-Certified General Real Estate Appraiser Florida Certificate # RZ 1522

41 Assumptions and Limiting Conditions 35 Assumptions and Limiting Conditions This appraisal and any other work product related to this engagement are limited by the following standard assumptions, except as otherwise noted in the report: 1. The title is marketable and free and clear of all liens, encumbrances, encroachments, easements and restrictions. The property is under responsible ownership and competent management and is available for its highest and best use. 2. There are no existing judgments or pending or threatened litigation that could affect the value of the property. 3. There are no hidden or undisclosed conditions of the land or of the improvements that would render the property more or less valuable. Furthermore, there is no asbestos in the property. 4. The revenue stamps placed on any deed referenced herein to indicate the sale price are in correct relation to the actual dollar amount of the transaction. 5. The property is in compliance with all applicable building, environmental, zoning, and other federal, state and local laws, regulations and codes. 6. The information furnished by others is believed to be reliable, but no warranty is given for its accuracy. This appraisal and any other work product related to this engagement are subject to the following limiting conditions, except as otherwise noted in the report: 1. An appraisal is inherently subjective and represents our opinion as to the value of the property appraised. 2. The conclusions stated in our appraisal apply only as of the effective date of the appraisal, and no representation is made as to the effect of subsequent events. 3. No changes in any federal, state or local laws, regulations or codes (including, without limitation, the Internal Revenue Code) are anticipated. 4. No environmental impact studies were either requested or made in conjunction with this appraisal, and we reserve the right to revise or rescind any of the value opinions based upon any subsequent environmental impact studies. If any environmental impact statement is required by law, the appraisal assumes that such statement will be favorable and will be approved by the appropriate regulatory bodies. 5. Unless otherwise agreed to in writing, we are not required to give testimony, respond to any subpoena or attend any court, governmental or other hearing with reference to the property without compensation relative to such additional employment. 6. We have made no survey of the property and assume no responsibility in connection with such matters. Any sketch or survey of the property included in this report is for illustrative purposes only and should not be considered to be scaled accurately for size. The appraisal

42 Assumptions and Limiting Conditions 36 covers the property as described in this report, and the areas and dimensions set forth are assumed to be correct. 7. No opinion is expressed as to the value of subsurface oil, gas or mineral rights, if any, and we have assumed that the property is not subject to surface entry for the exploration or removal of such materials, unless otherwise noted in our appraisal. 8. We accept no responsibility for considerations requiring expertise in other fields. Such considerations include, but are not limited to, legal descriptions and other legal matters such as legal title, geologic considerations such as soils and seismic stability; and civil, mechanical, electrical, structural and other engineering and environmental matters. Such considerations may also include determinations of compliance with zoning and other federal, state, and local laws, regulations and codes. 9. Neither all nor any part of the contents of this report (especially any conclusions as to value, the identity of the appraisers, or any reference to the Appraisal Institute) shall be disseminated through advertising media, public relations media, news media or any other means of communication (including without limitation prospectuses, private offering memoranda and other offering material provided to prospective investors) without the prior written consent of the persons signing the report. 10. Information, estimates and opinions contained in the report and obtained from third-party sources are assumed to be reliable and have not been independently verified. 11. Unless otherwise stated in the report, no consideration has been given to personal property located on the premises or to the cost of moving or relocating such personal property; only the real property has been considered. 12. The current purchasing power of the dollar is the basis for the values stated in the appraisal; we have assumed that no extreme fluctuations in economic cycles will occur. 13. The values found herein are subject to these and to any other assumptions or conditions set forth in the body of this report but which may have been omitted from this list of Assumptions and Limiting Conditions. 14. The analyses contained in the report necessarily incorporate numerous estimates and assumptions regarding property performance, general and local business and economic conditions, the absence of material changes in the competitive environment and other matters. Some estimates or assumptions, however, inevitably will not materialize, and unanticipated events and circumstances may occur; therefore, actual results achieved during the period covered by our analysis will vary from our estimates, and the variations may be material. 15. The appraisal report is prepared for the exclusive benefit of the Client, its subsidiaries and/or affiliates. It may not be used or relied upon by any other party. All parties who use or rely upon any information in the report without our written consent do so at their own risk. 16. No studies have been provided to us indicating the presence or absence of hazardous materials on the subject property or in the improvements, and our valuation is predicated upon the assumption that the subject property is free and clear of any environment hazards including, without limitation, hazardous wastes, toxic substances and mold. No

43 Assumptions and Limiting Conditions 37 representations or warranties are made regarding the environmental condition of the subject property. Integra Realty Resources Jacksonville, Integra Realty Resources, Inc., Integra Strategic Ventures, Inc. and/or any of their respective officers, owners, managers, directors, agents, subcontractors or employees (the Integra Parties ), shall not be responsible for any such environmental conditions that do exist or for any engineering or testing that might be required to discover whether such conditions exist. Because we are not experts in the field of environmental conditions, the appraisal report cannot be considered as an environmental assessment of the subject property. 17. The persons signing the report may have reviewed available flood maps and may have noted in the appraisal report whether the subject property is located in an identified Special Flood Hazard Area. We are not qualified to detect such areas and therefore do not guarantee such determinations. The presence of flood plain areas and/or wetlands may affect the value of the property, and the value conclusion is predicated on the assumption that wetlands are nonexistent or minimal. 18. Integra Realty Resources Jacksonville is not a building or environmental inspector. Integra Jacksonville does not guarantee that the subject property is free of defects or environmental problems. Mold may be present in the subject property and a professional inspection is recommended. 19. Integra Realty Resources Jacksonville, an independently owned and operated company, has prepared the appraisal for the specific intended use stated elsewhere in the report. The use of the appraisal report by anyone other than the Client is prohibited except as otherwise provided. Accordingly, the appraisal report is addressed to and shall be solely for the Client s use and benefit unless we provide our prior written consent. We expressly reserve the unrestricted right to withhold our consent to your disclosure of the appraisal report or any other work product related to the engagement (or any part thereof including, without limitation, conclusions of value and our identity), to any third parties. Stated again for clarification, unless our prior written consent is obtained, no third party may rely on the appraisal report (even if their reliance was foreseeable). 20. The conclusions of this report are estimates based on known current trends and reasonably foreseeable future occurrences. These estimates are based partly on property information, data obtained in public records, interviews, existing trends, buyer-seller decision criteria in the current market, and research conducted by third parties, and such data are not always completely reliable. The Integra Parties are not responsible for these and other future occurrences that could not have reasonably been foreseen on the effective date of this assignment. Furthermore, it is inevitable that some assumptions will not materialize and that unanticipated events may occur that will likely affect actual performance. While we are of the opinion that our findings are reasonable based on current market conditions, we do not represent that these estimates will actually be achieved, as they are subject to considerable risk and uncertainty. Moreover, we assume competent and effective management and marketing for the duration of the projected holding period of this property. 21. The appraisal is also subject to the following:

44 Assumptions and Limiting Conditions 38 Extraordinary Assumptions and Hypothetical Conditions The value conclusions are subject to the following extraordinary assumptions that may affect the assignment results. An extraordinary assumption is uncertain information accepted as fact. If the assumption is found to be false as of the effective date of the appraisal, we reserve the right to modify our value conclusions. 1. None The value conclusions are based on the following hypothetical conditions that may affect the assignment results. A hypothetical condition is a condition contrary to known fact on the effective date of the appraisal but is supposed for the purpose of analysis. 1. None

45 Addenda Addendum A Appraiser Qualifications

46 Addenda

47 Addenda

48 Addenda

49 Addenda

50 Addenda

51 Integra Realty Resources, Inc. Corporate Profile Integra Realty Resources, Inc. offers the most comprehensive property valuation and counseling coverage in North America with 58 independently owned and operated offices located throughout the United States and the Caribbean. Integra was created for the purpose of combining the intimate knowledge of well-established local firms with the powerful resources and capabilities of a national company. Integra offers integrated technology, national data and information systems, as well as standardized valuation models and report formats for ease of client review and analysis. Integra s local offices have an average of 25 years of service in the local market, and virtually all are headed by a Senior Managing Director who is an MAI member of the Appraisal Institute. A listing of IRR s local offices and their Senior Managing Directors follows: ATLANTA, GA - Sherry L. Watkins., MAI, FRICS AUSTIN, TX - Randy A. Williams, MAI, SR/WA, FRICS BALTIMORE, MD - G. Edward Kerr, MAI, MRICS BIRMINGHAM, AL - Rusty Rich, MAI, MRICS BOISE, ID - Bradford T. Knipe, MAI, ARA, CCIM, CRE, FRICS BOSTON, MA - David L. Cary, Jr., MAI, MRICS CHARLESTON, SC - Cleveland Bud Wright, Jr., MAI CHARLOTTE, NC - Fitzhugh L. Stout, MAI, CRE, FRICS CHICAGO, IL - Eric L. Enloe, MAI, FRICS CINCINNATI/DAYTON, OH - Gary S. Wright, MAI, FRICS, SRA CLEVELAND, OH - Douglas P. Sloan, MAI COLUMBIA, SC - Michael B. Dodds, MAI, CCIM COLUMBUS, OH - Bruce A. Daubner, MAI, FRICS DALLAS, TX - Mark R. Lamb, MAI, CPA, FRICS DENVER, CO - Brad A. Weiman, MAI, FRICS DETROIT, MI - Anthony Sanna, MAI, CRE, FRICS FORT WORTH, TX - Gregory B. Cook, MAI, SR/WA GREENSBORO, NC - Nancy Tritt, MAI, SRA, FRICS HARTFORD, CT - Mark F. Bates, MAI, CRE, FRICS HOUSTON, TX - David R. Dominy, MAI, CRE, FRICS INDIANAPOLIS, IN - Michael C. Lady, MAI, SRA, CCIM, FRICS JACKSON, MS - John R. Praytor, MAI JACKSONVILLE, FL - Robert Crenshaw, MAI, FRICS KANSAS CITY, MO/KS - Kenneth Jaggers, MAI, FRICS LAS VEGAS, NV - Charles E. Jack IV, MAI LOS ANGELES, CA - John G. Ellis, MAI, CRE, FRICS LOS ANGELES, CA - Matthew J. Swanson, MAI LOUISVILLE, KY - Stacey Nicholas, MAI, MRICS MEMPHIS, TN - J. Walter Allen, MAI, FRICS MIAMI/PALM BEACH, FL- Anthony M. Graziano, MAI, CRE, FRICS MINNEAPOLIS, MN - Michael F. Amundson, MAI, CCIM, FRICS NAPLES, FL - Carlton J. Lloyd, MAI, FRICS NASHVILLE, TN - R. Paul Perutelli, MAI, SRA, FRICS NEW JERSEY COASTAL - Halvor J. Egeland, MAI NEW JERSEY NORTHERN - Matthew S. Krauser, CRE, FRICS NEW YORK, NY - Raymond T. Cirz, MAI, CRE, FRICS ORANGE COUNTY, CA - Steve Calandra, MAI ORLANDO, FL - Christopher Starkey, MAI, MRICS PHILADELPHIA, PA - Joseph D. Pasquarella, MAI, CRE, FRICS PHOENIX, AZ - Walter Tres Winius III, MAI, FRICS PITTSBURGH, PA - Paul D. Griffith, MAI, CRE, FRICS PORTLAND, OR - Brian A. Glanville, MAI, CRE, FRICS PROVIDENCE, RI - Gerard H. McDonough, MAI, FRICS RALEIGH, NC - Chris R. Morris, MAI, FRICS RICHMOND, VA - Kenneth L. Brown, MAI, CCIM, FRICS SACRAMENTO, CA - Scott Beebe, MAI, FRICS ST. LOUIS, MO - P. Ryan McDonald, MAI, FRICS SALT LAKE CITY, UT - Darrin W. Liddell, MAI, FRICS, CCIM SAN DIEGO, CA - Jeff A. Greenwald, MAI, SRA, FRICS SAN FRANCISCO, CA - Jan Kleczewski, MAI, FRICS SARASOTA, FL - Carlton J. Lloyd, MAI, FRICS SEATTLE, WA - Allen N. Safer, MAI, MRICS SYRACUSE, NY - William J. Kimball, MAI, FRICS TAMPA, FL - Bradford L. Johnson, MAI, MRICS TULSA, OK - Owen S. Ard, MAI WASHINGTON, DC - Patrick C. Kerr, MAI, FRICS, SRA WILMINGTON, DE - Douglas L. Nickel, MAI, FRICS CARIBBEAN/CAYMAN ISLANDS - James Andrews, MAI, FRICS

52 Addenda Addendum B Property Information

53 Addenda

54 Addendum C Comparable Data

55 Land Sale Profile Sale No. 1 Location & Property Identification Property Name: Sub-Property Type: Address: City/State/Zip: County: Submarket: Market Orientation: Property Location: GSA Office Site Commercial, Office Flagler Center Blvd. Jacksonville, FL Duval Southeast Suburban Northeast corner Flagler Center Blvd and Veveras Dr IRR Event ID: Sale Information Sale Price: $1,539,351 Effective Sale Price: $1,539,351 Sale Date: 03/22/2011 Sale Status: Closed $/SF GBA: $32.49 $/Acre(Gross): $391,692 $/Land SF(Gross): $8.99 $/Acre(Usable): $391,692 $/Land SF(Usable): $8.99 $/Land SF(Potential): $32.49 Grantor/Seller: FDG Flagler Center Land, LLC Grantee/Buyer: GenCap Jacksonville, LLC Property Rights: Fee Simple % of Interest Conveyed: Financing: Cash to seller Document Type: Warranty Deed Recording No.: / 1123 Verified By: Jason P. Lovett, MAI Verification Date: 12/08/2010 Confirmation Source: Steve Sirkis Verification Type: Confirmed-Buyer Sale Analysis T.O.S.: Yes Improvement and Site Data MSA: Jacksonville, FL Metropolitan Statistical Area Legal/Tax/Parcel ID: Acres(Usable/Gross): 3.93/3.93 Land-SF(Usable/Gross): 171,190/171,190 Usable/Gross Ratio: 1.00 Shape: Irregular Corner Lot: Yes Zoning Code: PUD Zoning Desc.: Planned Unit Development Utilities: Electricity, Water Public, Sewer Utilities Desc.: Off-site retention Source of Land Info.: Past Appraisal Comments The property is 3.93 usable acres and was purchased for development of a 47,386 square foot office building to be leased to the GSA for use as a US Immigration and Customs Enforcement office. This property is located in the Gran Park at Bayard DRI within Flagler Center PUD in the southwest quadrant of US Highway 1 and Gran Bay Parkway. GSA Office Site

56

57 Land Sale Profile Sale No. 3 Location & Property Identification Property Name: Sub-Property Type: Address: City/State/Zip: County: Proposed Red Apple Charter School Commercial, Office Flagler Center Blvd. Jacksonville, FL Duval Market Orientation: Property Location: Suburban East side Flagler Center Blvd, in proximity south of Old St. Augustine Rd. IRR Event ID: Sale Information Sale Price: $2,025,000 Effective Sale Price: $2,025,000 Sale Date: 02/26/2015 Sale Status: Closed $/SF GBA: $29.94 $/SF NRA: $29.94 $/Acre(Gross): $285,095 $/Land SF(Gross): $6.54 $/Acre(Usable): $285,095 $/Land SF(Usable): $6.54 $/Land SF(Potential): $29.94 Grantor/Seller: FDG Flagler Center Land, LLC Grantee/Buyer: Red Apple at Flagler Center, LLC Property Rights: Fee Simple Financing: Cash to seller Terms of Sale: Arm's length transaction Document Type: Deed Recording No.: Book 17085, Page 1419 Verified By: Kelly L. Thomas Verification Date: 08/25/2015 Confirmation Source: Collis McGeachy, CBRE (904) Verification Type: Confirmed-Seller Broker Sale Analysis Proposed Use Desc.: Improvement and Site Data Charter School Legal/Tax/Parcel ID: GBA-SF: 67,644 NRA-SF: 67,644 Acres(Usable/Gross): 7.10/7.10 Land-SF(Usable/Gross): 309,401/309,401 Usable/Gross Ratio: 1.00 Shape: Irregular Topography: Level Bldg. to Land Ratio FAR: 0.22 Zoning Code: PUD Zoning Desc.: Planned Unit Development Environmental Issues: No Flood Zone Designation: X Comm. Panel No.: 12031C0569H Date: 06/03/2013 Utilities: Electricity, Water Public, Sewer Source of Land Info.: Comments Engineering Report Proposed Red Apple Charter School

58 Land Sale Profile Sale No. 3 Comments (Cont'd) This is the sale of parcel 5 located in Flagler Center. The site is located between I-95 and US 1 and just south of the Baptist South Medical Center and has off-site master retention. The site was purchased to build a two-story Red Apple Charter School. Proposed Red Apple Charter School

59 Land Sale Profile Sale No. 4 Location & Property Identification Property Name: Sub-Property Type: Address: City/State/Zip: County: Parcel 9 Flagler Center Commercial, Office Gran Bay Pky. Jacksonville, FL Duval Market Orientation: Property Location: Suburban Southeast corner of Gran Bay Pkwy and Flagler Center Blvd IRR Event ID: Sale Information Sale Price: $1,546,000 Effective Sale Price: $1,546,000 Sale Date: 11/04/2015 Contract Date: 05/05/2015 Sale Status: Closed $/Acre(Gross): $305,232 $/Land SF(Gross): $7.01 $/Acre(Usable): $305,232 $/Land SF(Usable): $7.01 Grantor/Seller: FDG Flagler Center Land, LLC Grantee/Buyer: Oakridge Realty, LLC Property Rights: Fee Simple % of Interest Conveyed: Exposure Time: 30 (months) Financing: Cash to seller Terms of Sale: Arm's length transaction Document Type: Warranty Deed Recording No.: / 1768 Verified By: Kelly L. Thomas Verification Date: 08/25/2015 Confirmation Source: Collis McGeachy, CBRE (904) Verification Type: Sale Analysis Confirmed-Seller Broker T.O.S.: Entitlement Status.: Improvement and Site Data Yes Fully entitled MSA: Jacksonville, FL Legal/Tax/Parcel ID: Part of Acres(Usable/Gross): 5.07/5.07 Land-SF(Usable/Gross): 220,633/220,633 Usable/Gross Ratio: 1.00 Shape: Irregular Topography: Level Corner Lot: Yes Zoning Code: PUD Zoning Desc.: Planned Unit Development Flood Zone Designation: X Comm. Panel No.: 12031C0569H Date: 06/03/2013 Utilities: Electricity, Water Public, Sewer, Telephone, Fiber Optics Source of Land Info.: Comments Public Records This is the sale of parcel 9 located in Flagler Center. The property is zoned PUD, Planned Unit Development in Ordinance E, by City of Jacksonville as part of a larger 656 acre tract Gran Park at Jacksonville Flagler Parcel 9 Flagler Center

60 Land Sale Profile Sale No. 4 Comments (Cont'd) Center. According to the contract, development rights of up to 51,000 gross square feet of building area in the office and/or commercial category are allocated to the site. The property was purchased to build a mid-rise office. Parcel 9 Flagler Center

61 Land Sale Profile Sale No. 5 Location & Property Identification Property Name: Sub-Property Type: Address: City/State/Zip: County: Submarket: Market Orientation: Property Location: Gate Parkway Office Site Commercial, Office Gate Pky. Jacksonville, FL Duval Southeast Planning District Suburban North side Gate Pky. south of J. Turner Butler Blvd. IRR Event ID: Sale Information Sale Price: $4,578,156 Effective Sale Price: $4,578,156 Sale Date: 08/31/2016 Sale Status: Closed $/Acre(Gross): $435,600 $/Land SF(Gross): $10.00 $/Acre(Usable): $435,600 $/Land SF(Usable): $10.00 Grantor/Seller: Arthur Chester Skinner III Trustee, et al Grantee/Buyer: JO Town Center 160 LLC Property Rights: Fee Simple Exposure Time: 0 (months) Financing: Cash to seller Document Type: Warranty Deed Recording No.: / 2060 Verified By: Ms. Deborah L. Cervi, SRA Verification Date: 10/03/2016 Verification Type: Secondary Verification Frontage Type: Zoning Code: Utilities: Utilities Desc.: Source of Land Info.: Comments 2 way, 2 lanes each way CO Electricity, Water Public, Sewer Off-site retention Engineering Report The legal description on the Special Warranty Deed indicates the site contains acres, with development rights allocated to the site for up to 165,000 SF of office development. The deed indicated the grantee agreed to purchase certain peak hour trips from the grantor for traffic impacts. The property is generally clear of tree cover and is bordered on the north by J. Turner Butler Blvd. Oxford Chase townhomes and Arelia apartments are located on the south; and the FBI office building is located on the east. Improvement and Site Data MSA: Jacksonville, FL Legal/Tax/Parcel ID: Pt of Acres(Usable/Gross): 10.51/10.51 Land-SF(Usable/Gross): Usable/Gross Ratio: 457,815/457, Gate Parkway Office Site