Alpha 250 Plat, Parcel E

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1 CURRENT APPRAISAL REPORT OF REAL PROPERTY Alpha 250 Plat, Parcel E West side of Blount Road, along the first curve south of Sample Road Pompano Beach, FL As of 05/23/14 Prepared For: Broward County Real Property Section 115 S. Andrews Avenue, Room 326 Fort Lauderdale, FL Broward County Real Property Section File ID: DO125FMC Prepared By: Roe Minor Realty Consultants, Inc SE Third Avenue Fort Lauderdale, FL RMRC File ID:

2 05/30/14 Broward County Real Property Section ATTN: C. Kevin Bokoske, MAI Real Estate Due Diligence Officer 115 S. Andrews Avenue, Room 326 Fort Lauderdale, FL Re: RMRC file ID # Broward County Real Property Section File ID #DO125FMC Alpha 250 Plat, Parcel E West side of Blount Road, along the first curve south of Sample Road Pompano Beach, FL Dear Mr. Bokoske: As requested, Roe Minor Realty Consultants is delivering a current real property appraisal report on the property referenced above. The purpose of this report is to form opinions of the Market Value As Is. The value opinions are formed on the basis of the Fee Simple interest subject to conditions prevailing as of 05/23/14. The analyses, opinions, and conclusions were developed in conformance with interpretation of the guidelines and recommendations set forth in the Uniform Standards of Professional Appraisal Practice (USPAP) and the Code of Professional Ethics of the Appraisal Institute. This report was prepared for and submitted to Broward County Real Property Section for the intended use of asset evaluation only. Unless we consent in writing this report cannot be used by any other person/entity for any purpose. If Broward County Real Property Section submits the appraisal or directs RMRC to submit the appraisal to a third party recipient with the prior approval of RMRC, such party should consider the appraisal as one factor and should utilize such within its own independent investment considerations and underwriting criteria as part of its overall investment decision. Such third party recipient is cautioned to understand all Extraordinary Assumptions and Hypothetical Conditions, General Assumptions and Limiting Conditions, and the agreed upon scope of work between RMRC and Broward County Real Property Section in the appraisal.

3 Mr. C. Kevin Bokoske, MAI Broward County Real Property Section 05/30/14 Page 2 The value opinions reported below are qualified by certain assumptions, limiting conditions, certifications, and definitions, which are set forth in the report. We particularly call your attention to the following extraordinary assumptions and hypothetical conditions: Extraordinary Assumptions: 1) This appraisal is not contingent on any extraordinary assumptions. Hypothetical Conditions: 1) This appraisal is not contingent on any hypothetical conditions. The essential data and analytical process used in estimating our final value estimate are included within the attached report. Please refer to the scope of work section of this report regarding reliability of information supplied to RMRC and its affect on value. This letter is invalid unless attached to the report in its entirety. Based on our analysis, the market value of the subject property, as set forth, documented and qualified in the attached report is: Value Conclusions Value Premise As Is Date of Value 5/23/2014 FINAL ESTIMATE $6,250,000 Per Sq.Ft. Net Land Area $6.50 Estimated Exposure Time 12 to 24 months Estimated Marketing Time 12 to 24 months

4 Mr. C. Kevin Bokoske, MAI Broward County Real Property Section 05/30/14 Page 3 Our intention in preparing the following report was to provide supporting detail as necessary for you to understand this appraisal per our agreement 1. Should you have any questions, comments, or require further assistance, please contact us. Respectfully Submitted, ROE MINOR REALTY CONSULTANTS, INC. Charles E. Minor, MAI State-Certified General Real Estate Appraiser RZ2252 cminor@roeminor.com Alta M. Martin State-Certified General Real Estate Appraiser RZ3506 amartin@roeminor.com CEM/AMM:jad 1 Formerly in USPAP there were three written report options for real and personal property appraisal reports: Self-Contained Appraisal Report, Summary Appraisal Report and Restricted Use Appraisal Report. Effective January 1, 2014 there are only two written report options: Appraisal Report and Restricted Appraisal Report. The minimum content requirements for an Appraisal Report are similar to those of the prior Summary Appraisal Report. The Restricted Appraisal Report is the same as the prior Restricted Use Appraisal Report; the only thing that has changed there is the name. The Self-Contained Appraisal Report option, which over the years was poorly understated, is gone. Appraisers are now required to state which report option is used, Appraisal Report or Restricted Appraisal Report. Roe Minor is compliant with 2014 USPAP reporting requirements and for those clients with specific requirements as agreed upon at or prior to the time of engagement, the attached report is intended to satisfy both USPAP and Client Supplemental Requirements.

5 TABLE OF CONTENTS Page # LOCATION MAPS... 1 EXECUTIVE SUMMARY... 3 Value and Economic Conclusions... 4 Comments:... 4 ASSIGNMENT... 5 PROPERTY IDENTIFICATION... 6 OWNER AND PROPERTY HISTORY... 6 SCOPE OF WORK... 7 SUBJECT PHOTOGRAPHS... 9 SURVEY SITE DESCRIPTION PLAT MAP ELEVATION MAP ZONING MAP ZONING PROPERTY TAXES AND ASSESSMENTS Current Assessment & Taxes LOCAL AREA MAP LOCAL AREA ANALYSIS Local Area Conclusion INDUSTRIAL MARKET ANALYSIS Regional Overview HIGHEST AND BEST USE As Though Vacant LAND VALUATION Discussion of Sales Adjustment of Sales CERTIFICATION ASSUMPTIONS AND LIMITING CONDITIONS ADDENDA SECTION - #

6 ADDENDUM A: ADDENDUM B: ADDENDUM C: ADDENDUM D: ADDENDUM E: ADDENDUM F: ADDENDUM G: Addenda Contents Tax Card(s) Demographics Comparable Land Sales Regional Analysis Definitions Client Information and Engagement Qualifications of Appraiser(s)

7 LOCATION MAPS County Level View 1 RMRC File

8 City Level View 2 RMRC File

9 EXECUTIVE SUMMARY Common Property Name: Location: Alpha 250 Plat, Parcel E The property is located on the west side of Blount Road, along the first curve south of Sample Road. Pompano Beach, Broward County, FL Census Tract: 306 Property Description: Pertinent Dates: Date of Inspection: Effective Date of Appraisal: Date of Report Transmittal: The property consists of a acre parcel of industrial land. The property is in average condition. 05/23/14 05/23/14 05/30/14 Zoning: Assessor's Parcel Number: Interest Appraised: Ownership: Current: Gross Land: Excess Land: Possible improvements based upon development restrictions in place: Gross Building Area: Potential Land to Building Ratio: Highest and Best Use: As Vacant: As Improved: I-1/PCI (General Industrial / Planned Industrial Overlay) Fee Simple Broward County Board of County Commissioners acres or 961,478 square feet 0.00 acres or 0,000 square feet Up to 342,000 square feet of industrial Up to 2.81:1 at the maximum Holding for further improvement in the local industrial market and completion of preleasing for industrial development as legally permissible and physically possible n/a 3 RMRC File

10 Value and Economic Conclusions Comments: Value Summary Value Premise As Is Date of Value 5/23/2014 LAND VALUE $6,250,000 Per Square Foot Land Area $6.50 FINAL ESTIMATE $6,250,000 Per Sq.Ft. Net Land Area $6.50 Estimated Exposure Time 12 to 24 months Estimated Marketing Time 12 to 24 months The subject, parcel E, is a acre parcel in the I-1/PCI (General Industrial / Planned Industrial Overlay) district. It has an irregular shape, narrow and deeper than most, which will most likely present a challenge for development. The subject is a part of a larger acre plat known as Alpha 250 North. There is a recorded document ( ) clarifying and limiting the use of the plat. It states that the subject is intended for industrial development and is limited to 342,000 square feet. Additionally, no more than 30% of any building or unit can be used for ancillary office. Although permitted by zoning, banks, commercial/retail and/or stand alone office uses are not permitted for the subject site, without the approval of Broward County Commissioners. Typical perimeter easements for utilities are noted on the survey, but none that appear adverse. There is a six foot wide concrete sidewalk and a drainage easement running along the eastern perimeter of the site, along Blount Road. Also, there is chain link perimeter fencing and signage around the site. According to our contact at the County, there are no high priority mitigation issues on the site such as federally protected species. The County s elevation map showed low-lying areas on the east and west sides of the site. The highest point on the site is in the center, possibly a couple of earth mounds, but this was not able to be ascertained for certain during inspection. None the less, tree removal and site work to make ready for development are necessary. Compared to other properties in the market with similar utility, the following characteristics are noted: Positive affects on value and/or marketability The Broward County industrial market is improving The Pompano Beach submarket is just beginning to see some recovery Negative affects on value and/or marketability The subject is raw land with trees to be cleared and earthwork necessary The subject has a very irregular shape that will most likely affect its utility for development 4 RMRC File

11 ASSIGNMENT Appraisal Purpose Intended Use Client Other Intended User Previous Clients/Users Report Option Interest Appraised Estimate Market Value As Is. This appraisal is intended for asset evaluation and is not intended for any other use. Broward County Real Property Section Unless we consent in writing this report cannot be used by any other person/entity for any purpose. RMRC or the appraisers have not previously conducted an appraisal or other related service in connection with the property being appraised within the three-year period immediately preceding acceptance of this assignment. The current client and/or users have been informed that the intended use of this assignment is not for a federally insured depository institution in a federally related transaction. Appraisal Report of Real Property Fee Simple 5 RMRC File

12 PROPERTY IDENTIFICATION Location: The property is located on the west side of Blount Road, along the first curve south of Sample Road, Pompano Beach, Broward County, FL Census Tract: 306 Assessor's Parcel Number: Legal Description: Alpha 250 North B Parcel E The source of the legal description is Broward County public record and RMRC believes this to be accurate for the purposes of appraising the property, however does not warrant its correctness for any other use. OWNER AND PROPERTY HISTORY Current Ownership: Sale History: Current Disposition: Broward County Board of County Commissioners We are not aware of any arm s length transfers within the past three years. We are not aware of any current listings, letters of intent, etc. 6 RMRC File

13 SCOPE OF WORK In the process of completing this appraisal, we have completed the following: Inspected the subject property and surrounding market on 05/23/14, at which time we took notes and photographs as to occupancy and condition of the property. This was the date of our most thorough inspection. We inspected the exterior only of the vacant land without representatives to this assignment. Our inspection was of a visual nature without the use of special testing equipment and not equivalent to an inspection by a professional engineer or general contractor. Discussed with representatives of Broward County Board of County Commissioners and the City of Pompano Beach, the current and historical operation of the subject property. All data necessary to complete this assignment was provided. Gathered information on zoning, taxes, and other governmental regulations affecting the property. We investigated the general regional economy as well as the specifics of the local area and property type to the extent relevant for the appraisal assignment. Researched the market for comparable land sales, and economic data among other data relevant to the assignment and subject property. This involved gathering primary and secondary data from the public record and verifying it with various owners, agents, and property managers. The depth of analysis is intended to be relevant for the appraisal assignment. The data have been analyzed and confirmed with sources deemed reliable, whenever possible, leading to the value conclusions set forth in this appraisal. Primary market research for this appraisal was gathered from numerous sources including, but not limited to the following: CoStar Multiple Listing Service Economy.com Brokers, National/Local Brokerage Firms, Property Managers, etc. Broward County, FL Property Appraiser s Website and Clerk of Circuit Courts Website First American Real Estate Solutions (RealQuest) Newspaper Clippings from Daily Business Review, South Florida Business Journal, FREJ, Sun- Sentinels, and others RMRC files and data plant dating to Planning and Zoning Departments overseeing Pompano Beach and Broward County, FL. 7 RMRC File

14 Attempted to effectively bracket the value of the subject property, seeking comparables that would not only be direct substitutes but also properties that would reflect the upper and lower limits of value. Time Range: Geography: Size: Criteria: We prefer to have the most recent market comparables available and limited our research to those occurring closest to the effective date(s) of this appraisal. However, we also researched older sales that typical investors would consider relevant due to the subject s unique value parameters. Market activity within the local area was given first priority, expanding to comparable areas until we obtained a sufficient sample. The parameters of our search are consistent with the market in which the subject competes. Though we also considered other value attributes, we focused our research on properties within about 30 percent of the subject s square footage for this assignment. This size range would reflect substitute utility, function, and similar market participants and correlate best with the subject property value indicators. However, to obtain sufficient quantity of data we included vacant sites outside that range that still shared similar characteristics as described in this section and necessary for reliable comparison. Typically the most challenging research parameter is identifying close substitutions for the subject property. We considered land use in context of highest and best use, tenancy and design characteristics as the most important criteria, in relation to economic profile. Estimated the value for the property under its highest and best use. The income approach was considered and was not developed because it is rarely used in the valuation of vacant land, and is not common for land with a highest and best use as estimated herein. The sales comparison approach was considered and was developed because the property is vacant land and the market strongly relies on this method. The cost approach was considered and was not developed because it not relevant for vacant land. The unit sales approach was considered and was not developed because the approach is not applicable for this property type. We have appraised the market value as is of the fee simple interest in the real property identified herein. 8 RMRC File

15 SUBJECT PHOTOGRAPHS Aerial Photo View of the northern edge of the site looking southwest from Blount Road 9 RMRC File

16 View of the southern edge of the site looking northwest from Blount Road View of the site (on the right) along the southbound lane of Blount Road 10 RMRC File

17 SURVEY 11 RMRC File

18 SITE DESCRIPTION Location: The property is located on the west side of Blount Road, along the first curve south of Sample Road with a street address of N/A, Pompano Beach, FL Size: Gross Land Area: acres or 961,478 square feet Useable Land Area: acres or 961,478 square feet Excess Land Area: 0.00 acres or 0,000 square feet Source: Survey Frontage, Access, Shape: Soil Conditions: Topography, Drainage: Easements: Site Improvements: The site is irregular in shape and has approximate street frontage of feet along Blount Road. There are no curb cuts in place on this site. Access would be rated average because of the median running the length of Blount Road frontage prohibiting access from the north bound lane. We did not receive nor review a soil report. However, we assume that the soil's load-bearing capacity is sufficient to support structure(s). We were only able to inspect the site from the fenced perimeter. During the inspection of the property, no drainage problems were observed. It was reported that portions of the site have standing water during periods of heavy rain, but we were not able to confirm this. The site is not level which the elevation map on the following page shows. We are not aware of any adverse easements from our inspection, any available surveys, or the client, that would affect the value or marketability of this site. Typical perimeter easements for utilities are noted on the survey, and are assumed to have no adverse affect the buildable utility of the parcel. There is a six foot wide concrete sidewalk and a drainage easement running along the eastern perimeter of the site, along Blount Road. Also, there is chain link perimeter fencing and signage around the site. 12 RMRC File

19 Utilities: Flood Map: Wetlands: There is a 20 foot wide drainage and utility easement, as well as a water valve, on the eastern perimeter of the site, along Blount Road. This is evidence that water is available to the site. The survey is silent to the presence of FPL, gas and cable. We assume these utilities are in the area based on surrounding development, but that the subject would have to tap in with their own connections during site work. National Flood Insurance Rate Map Number 12011C0120F dated 07/21/95 indicates the property is within a Zone AH. We were not provided with a Wetlands survey. We spoke with Ryan St. George, PWS, CLI, Natural Resource Specialist II for Broward County about the possibility of wetlands on the subject site. The County s elevation map showed low-lying areas on the east and west sides of the site. The highest point on the site is in the center, possibly a couple of earth mounds, but this was not able to be ascertained for certain during inspection. According to St. George, there are no high priority mitigation issues on the site such as Federally protected species. If subsequent engineering data reveal the presence of regulated wetlands, it could materially affect property value. We recommend a wetlands survey by a competent engineering firm. Earthquake Zone: Environmental and Hazardous Substances: Surrounding Land Uses: Overall Functionality: According to the United States Geological Survey, Florida and particularly South Florida are generally not considered in an Earthquake Zone. The state is ranked a moderate risk, which is the safest ranking provided. We observed no evidence of toxic or hazardous substances during our inspection of the site. However, we are not trained to perform technical environmental inspections and recommend the services of a professional engineer for this purpose. The estimated value herein assumes that the property is unaffected by environmental issues. Please refer to the Assumptions and Limiting Conditions Section of this report. Surrounding land uses are mostly industrial both single and multi-tenant. There is one school and a few wetland preserves also in the immediate area. There is a Waste Management landfill o the north of the subject, that produces a nuisance odor when the wind is blowing out of the north. The subject site is functional for its proposed use. 13 RMRC File

20 PLAT MAP 14 RMRC File

21 ELEVATION MAP The map above is the County s elevation map. Low-lying or wet areas are shown in lime green on the east and west sides of the site. Areas with orange tint are of typical developable elevations. The highest points on the site are depicted in brown. Based on their much darker color, they appear to earth mounds, possibly fill from old projects on adjacent tracts. This was not able to be ascertained for certain during inspection. 15 RMRC File

22 ZONING MAP 16 RMRC File

23 Jurisdiction: Pompano Beach ZONING Classification: Permitted Uses: I-1/PCI (General Industrial / Planned Industrial Overlay) Permitted uses within this district include a wide range of light and moderate manufacturing, assembly, fabrication, processing, distribution, warehousing, research and development, and other industrial uses but not heavy or hazardous manufacturing processes. The district may also include some uses that are ancillary to industrial development (e.g., vocational schools, business support services) or provide convenience services to industrial employees (e.g., child care facilities, gasoline filling stations, banks), as well as some uses that may be inappropriate in residential or commercial districts (e.g., animal shelter, kennel, sport shooting range. All other uses are prohibited as a matter of rights under current zoning. Restrictions Setbacks: Front: 25, Interior side: 10, Rear: 30 Height: Lot Size: Maximum 45 feet Minimum of 10,000 square feet Lot Coverage: Maximum 65% Pervious Area: Minimum 20% Deed Restrictions: The subject, parcel E, is part of a larger acre plat known as Alpha 250 North. There is a recorded document ( ) clarifying and limiting the use of the plat. It states that industrial development on the subject parcel is limited to 342,000 square feet. Additionally, no more than 30% of any building or unit can be used for ancillary office. Banks, commercial/retail and/or stand alone office uses are not permitted for the subject site, without the approval of Broward County Commissioners. Land Use: Concurrency / Impact Fees: Comments: 82 (Forests, Parks, Recreational Areas) Concurrency and impact fees are determined at site plan approval. According to the City, there are no other development restrictions on the site, other than the recorded plat restrictions. They indicated that they would like to run a road through the site as an additional ingress/egress point for the parcel to the north which they own. Nothing else was uncovered during our discussions with the City or County. 17 RMRC File

24 PROPERTY TAXES AND ASSESSMENTS Properties are assessed as of January 1 st by the Broward County Property Appraiser s Office. Taxes are paid in arrears by November 1 st of the same year. Full payment is due by March 31 st of the subsequent year, with discounts given for early payment. The property is assessed under the following tax identification or folio numbers: Current Assessment & Taxes The subject is County owned and therefore exempt from real estate taxes. The assessment information on the subject property is shown below based on information from the Broward County Property appraiser. REAL ESTATE TAXES AND ASSESSMENT Year p Land Assessment $6,730,350 $6,730,350 $6,730,350 Building Assessment JUST or MARKET VALUE 6,730,350 6,730,350 6,730,350 Assessed/SOH Value 6,730,350 6,730,350 6,730,350 Millage n/a Ad Valorem Taxes 143, ,109 n/a Non-Ad Valorem/Special Assessments 0 0 n/a Gross Real Estate Taxes (EXEMPT) $0 $0 n/a With 0% Discount Early Payment $0 $0 n/a Source: w w w.bcpa.net 18 RMRC File

25 LOCAL AREA MAP 19 RMRC File

26 LOCAL AREA ANALYSIS Overview The local area is in the incorporated city of Pompano Beach within the greater Fort Lauderdale MSA which is within Broward County. The local area is in the stability stage of its life cycle and property values are generally stable. The area is approximately 9.85 miles north of the Fort Lauderdale Central Business District. Primary Boundaries The approximate local area boundaries are as follows based on the pattern of uses, linkages and property values noted during our analysis. North: Sample Road South: Hammondville Road East: I-95 West: Florida s Turnpike Access Access has historically been good and the area relies on the following transportation arteries: Local: The area is designed on an effective grid pattern sandwiched between the Florida Turnpike to the west and I-95 to the east. Sample and Copans Roads are the primary east/west roads and both interchange with I-95. Hammondville Road also runs east/west and it interchanges with the Turnpike to the west. NW 21 st Avenue and Powerline Road are the primary north/south routes and are heavily developed with commercial and industrial uses. Blount Road is a secondary roadway through the area and is primarily industrial in nature. Regional: The Florida Turnpike is at the western boundary of the neighborhood and I-95 is at the eastern boundary. Both link the area to other interstate and regional highways. The city is served by municipal bus service networked throughout the county and region. The Tri-Rail commuter line runs north/south through the local area along I-95. The SCL cargo rail runs north/south through the area, occasionally backing up traffic at major roads. Despite these modes of mass transit, the most popular form of transportation is private vehicle, and thus traffic is often high. We are not aware of any significant changes to local traffic patterns. 20 RMRC File

27 Local Area Characteristics The subject market area outlined above is largely industrial and vacant land with some commercial support and backup residential. Heavier industrial uses are concentrated near Hammondville Road while the uses off Blount are lighter industrial, and mostly multi-tenant. Along Sample, Copans, and Powerline Road are numerous showroom/warehouse buildings. There is a Waste Management landfill just north of the subject at the corner of Sample and Powerline Roads. It produces a nuisance odor when the wind is blowing out of the north. On the southwest corner of Sample and Blount Roads is the Festival Flea Market, a 384,000 square foot indoor shopping mall built in The North Broward Detention Center and North Broward Women s Detention Center are located south of the subject on NW 30 th Avenue. The area has not historically been popular for residential or office uses because of these heavy industrial and specialty land uses. During the last real estate cycle, there were a number of new industrial developments added. Duke Realty built Pompano Commerce Center in It consists of two large multi-tenant flex buildings just north of the subject at 2900 NW 27 th Avenue, currently 87% occupied. Contractor s Business Park is located along NW 31 st Avenue and offered a new concept in industrial business parks. Built in the last years, it was designed to maximize interaction and create synergy among contractors, suppliers, and service companies. The park is comprised of 8 buildings (A through H) with a central building designed to contain wholesale suppliers of construction material and supplies located west of NW 31 st Avenue. The Turnpike Distribution Center is a three building complex north of Hammondville Road on NW 27 th Avenue. They were built in the mid- 2000s and are currently 81% occupied. The 7.29-acres of vacant land remaining for TDC has been listed for sale for almost a year at $7.87/SF. In addition to the industrial and supportive commercial uses within the area, both negative and noteworthy influences on real estate values include the following nearby: Paul Rein Detention Facility NW 16 th Street North Broward Detention Centers, 1550 NW 30 th Avenue Joseph V. Conte Detention Facility, 1351 NW 27 th Avenue Pompano Park Harness Track Pompano Beach Air Park We have not observed any unusual or adverse land use changes in the vicinity of the subject property. Services The area is served by all municipal services including but not limited to fire, police, ambulatory, and utilities are available to the area. Hospitals are in close proximity and neighborhood services such as shopping, banking, gasoline, and restaurants are all present. 21 RMRC File

28 Local Area Conclusion The area was more severely affected by the general market than other industrial submarkets in South Florida. Pompano was considered less desirable as areas closer to the airport, seaport and I-95. Most businesses in the local area were heavily tied to the construction industry, and did not make it through the recession. Since the beginning of 2013 leasing has picked up and the local market is trying to recover. We expect slow growth and improvement in the local area as long as the greater industrial market and economy continue to improve. 22 RMRC File

29 INDUSTRIAL MARKET ANALYSIS The subject property is industrial land because of its zoning and development restrictions. As such we have provided an overview of the market for this property type using both primary and secondary research. This analysis sets the foundation for supply and demand, marketability and financial feasibility of the subject property type. Data for this market report was taken from CoStar s 1 st quarter 2014 report on Broward County Industrial Regional Overview The Broward County Industrial market ended the first quarter 2014 with a vacancy rate of 7.9%. The vacancy rate was unchanged over the previous quarter, with net absorption totaling positive 338,448 square feet in the first quarter. Vacant sublease space increased in the quarter, ending the quarter at 154,866 square feet. Rental rates ended the first quarter at $7.96, an increase over the previous quarter. A total of four buildings delivered to the market in the quarter totaling 428,810 square feet, with 356,600 square feet still under construction at the end of the quarter. Absorption Net absorption for the overall Broward County Industrial market was positive 338,448 square feet in the first quarter That compares to positive 570,938 square feet in the fourth quarter 2013, positive 599,957 square feet in the third quarter 2013, and positive 326,391 square feet in the second quarter Tenants moving out of large blocks of space in 2014 include: Prime Event Group moving out of (35,600) square feet at 1954 N 30th Rd, JD Closeouts moving out of (15,730) square feet at 4200 N 29th Ave, and LS Arts. moving out of (12,530) square feet at 5607 Hiatus Rd. Tenants moving into large blocks of space in 2014 include: Richline moving into 90,000 square feet at 6701 Nob Hill Rd, Group III International moving into 59,912 square feet at 2775 NW 63rd Ct, and FG Willson moving into 49,352 square feet at Business Way. The Flex building market recorded net absorption of positive 108,813 square feet in the first quarter 2014, compared to positive 43,280 square feet in the fourth quarter 2013, positive 76,141 in the third quarter 2013, and negative (67,229) in the second quarter The Warehouse building market recorded net absorption of positive 229,635 square feet in the first quarter 2014 compared to positive 527,658 square feet in the fourth quarter 2013, positive 523,816 in the third quarter 2013, and positive 393,620 in the second quarter RMRC File

30 Vacancy The Industrial vacancy rate in the Broward County market area remained at 7.9% at the end of the first quarter The vacancy rate was 7.9% at the end of the fourth quarter 2013, 8.2% at the end of the third quarter 2013, and 8.6% at the end of the second quarter Flex projects reported a vacancy rate of 8.5% at the end of the first quarter 2014, 9.0% at the end of the fourth quarter 2013, 9.2% at the end of the third quarter 2013, and 9.6% at the end of the second quarter Warehouse projects reported a vacancy rate of 7.8% at the end of the first quarter 2014, 7.7% at the end of fourth quarter 2013, 8.1% at the end of the third quarter 2013, and 8.4% at the end of the second quarter Largest Lease Signings The largest lease signings occurring in 2014 included: the 59,912-square-foot lease signed by Group III International at 2775 NW 63rd Ct in the Pompano Beach market; the 51,308- squarefoot deal signed by Whole Foods Market at 2700 NW 19th St in the Pompano Beach market; and the 34,703-square- foot lease signed by J.C. Ehrlich at 4140 SW 30th Ave in the Southeast Broward market. Rental Rates The average quoted asking rental rate for available Industrial space was $7.96 per square foot per year at the end of the first quarter 2014 in the Broward County market area. This represented a 2.2% increase in quoted rental rates from the end of the fourth quarter 2013, when rents were reported at $7.79 per square foot. The average quoted rate within the Flex sector was $11.42 per square foot at the end of the first quarter 2014, while Warehouse rates stood at $7.47. At the end of the fourth quarter 2013, Flex rates were $11.12 per square foot, and Warehouse rates were $7.34. New Construction During the first quarter 2014, four buildings totaling 428,810 square feet were completed in the Broward County market area. This compares to one building totaling 122,175 square feet that were completed in the fourth quarter 2013, one building totaling 202,226 square feet completed in the third quarter 2013, and nothing completed in the second quarter There were 356,600 square feet of Industrial space under construction at the end of the first quarter Some of the notable 2014 deliveries include: SW 29 th St, a 304,000-squarefoot facility that delivered in first quarter 2014 and is now 0% occupied, and 9600 Premier Pky, an 80,290- square-foot building that delivered in first quarter 2014 and is now 0% occupied. 24 RMRC File

31 The largest projects underway at the end of first quarter 2014 were 2650 SW 36th St - Building B, a 133,952-square-foot building with 0% of its space pre-leased, and 2650 SW 36th St - Building A, a 95,680-square-foot facility that is 0% pre-leased. Sales/Investment Activity Tallying industrial building sales of 15,000 square feet or larger, Broward County industrial sales figures rose during the fourth quarter 2013 in terms of dollar volume compared to the third quarter of In the fourth quarter, 15 industrial transactions closed with a total volume of $65,167,994. The 15 buildings totaled 1,349,250 square feet and the average price per square foot equated to $48.30 per square foot. That compares to 12 transactions totaling $31,414,500 in the third quarter. The total square footage was 348,927 for an average price per square foot of $ Total year-to-date industrial building sales activity in 2013 is up compared to the previous year. In the twelve months of 2013, the market saw 61 industrial sales transactions with a total volume of $252,160,794. The price per square foot has averaged $64.77 this year. In the twelve months of 2012, the market posted 49 transactions with a total volume of $130,375,517. The price per square foot averaged $ Cap rates have been lower in 2013, averaging 7.37%, compared to the twelve months of last year when they averaged 8.54%. Submarket Overview The subject is within the Pompano Beach industrial submarket. It ended the first quarter 2014 with a vacancy rate of 7.9%. The vacancy rate has been falling slowly since 1 st quarter 2010, with net absorption totaling positive 756,852 square feet for the year Rental rates ended the first quarter at $7.31, increasing after a brief dip in the beginning of It appears that rental rates had to decline to initiate leasing but are now back on the rise. This quarter there was nothing new delivered to the market. Weeks Robinson, an industrial institutional investor has begun building again in the Pompano Beach submarket, but only on sites they acquired with a low cost basis. They also have portions preleased before construction begins. Overall, the submarket is weaker than the overall Broward County industrial market but moving toward recovery. 25 RMRC File

32 Outlook The Broward County industrial market continued to see modest growth in The majority of transactions were a result of existing tenants expanding their existing space or relocating within the submarket. The demand for warehouse space remained strong in the southern submarkets in both sales and leasing activity. As the housing market strengthens and consumer confidence grows, retail, wholesale and e-commerce will continue to drive the industrial market. As a result, industrial rents are anticipated to rise in the year ahead. They forecast continued positive absorption with accompanying lower vacancy rates, possibly to pre-recession levels. Developers are starting to eye certain submarkets in Broward County. With the county as a whole continuing to stabilize and vacancy declining in the Southwest Broward, Southeast Broward, and Pompano Beach submarkets, several projects are planned while others have already begun. Pompano Beach has a few proposed plans that could break ground in the coming months as vacancy continues to fall; however, the greatest interest from developers has been in the Southwest Broward and Southeast Broward submarkets, due to their proximity to Miami-Dade County and several of the county s major thoroughfares. Active Listings We searched the Pompano Beach market for industrial land sites over 10-acres, actively marketed for sale. This yielded three sites. Comparables 1 and 3 are near the subject in western Pompano with irregular shapes like the subject. They are listed at just over $7.00 per square foot and have been on the market more or less one year already. Comparable 2 is in eastern Pompano on a better roadway, with a better shape and portions already paved, thus the higher asking price. Despite its superior characteristics, the price is above market support, evidence being its listing period of 4 years already. ACTIVE LISTINGS No. Address Asking Price Acreage Price/SF Zoning Shape Topography Days on Market Green & Powerline Roads, Long 1 Pompano Beach $4,000, $7.65 S-1 Rectangle Level, Clear S Andrews Avenue, 2 Pompano Beach $3,900, $12.79 I-1 Rectangular Level, Paved 1, Hammondville Road, 3 Pompano Beach $2,400, $7.87 B-4 Irregular Level, Clear 307 Most Probable Purchaser / Market Participants The subject is an irregular shaped parcel of raw land zoned for industrial use. National REITs and other institutional investors are in the market again for well located industrial sites with good utility, but we do not feel the subject fits this criteria. A market buyer would require significant discounts to that level of pricing for dealing with the subject s utility and topography issues. Another possibility would be an owner-user planning their own building where they could work around the utility issues. 26 RMRC File

33 Exposure Time/Marketing Time Exposure Time is always presumed to precede the effective date of the appraisal. It is the estimated time that the property would have been offered on the market prior to the hypothetical consummation of a sale on at market value on the effective appraisal date at market value. The estimated exposure time is a function of price/value, time, and use and is not an independent estimate of each variable but rather an aggregate. Exposure time can vary with type of property and market location. Therefore our exposure time estimate is correlated with the estimate of market value(s) in this report. Based on the following sources, we estimated an exposure time as follows: EXPOSURE TIME Exposure Time (Months) Source Low High Average Comparable Sales Data Local Brokers and Professionals RMRC Estimated Exposure Time 12 to 24 Going forward market conditions should stabilize RMRC Estimated Marketing Time 12 to 24 Marketing Time is that period immediately following the effective date of appraisal during which the subject property could sell at our appraised value(s). This assumes professional and competent marketing. A reasonable estimate of marketing time therefore involves some prediction into the foreseeable future and if conditions in the markets for the subject property warrant any deviation from normal periods of exposure in the market. It involves a forward looking opinion of the same variables discussed above as well as consideration for all in an estimated marketing time. Value and marketing time are interrelated and a change in one will likely result in a change in the other. Based on our research, we do not expect significant changes in supply/demand for the subject property and have therefore estimated a marketing time similar to the exposure time estimate above. Note that this is not intended to be a prediction of a date of sale. 27 RMRC File

34 HIGHEST AND BEST USE Highest and Best Use is the reasonably probable and legal use of either vacant land or an improved property that must meet the four following criteria: legal permissibility; physical possibility; financial feasibility; and maximum productivity. Highest and Best Use is the foundation on which value is based. Analysis of a property s highest and best use involves three steps. First, the highest and best use of the site as though vacant is determined. A decision as to leaving the site vacant or improving it must be made. If the conclusion is to improve the site, the second step would be to determine the ideal improvement, as measured by the market. A comparison of the ideal improvement and the proposed improvement (if any) constitutes the final step in this analysis. A decision is made to maintain the property in its current form or to modify the improvements to more closely conform with the ideal. As Though Vacant Legally Permissible The first test concerns permitted uses. According to our understanding of the zoning ordinance, noted earlier in this report, the site may legally be improved with structures that accommodate a wide range of light and moderate manufacturing, assembly, fabrication, processing, distribution, warehousing, research and development, and other industrial uses but not heavy or hazardous manufacturing processes. The district may also include some uses that are ancillary to industrial development (e.g., vocational schools, business support services) or provide convenience services to industrial employees (e.g., child care facilities, gasoline filling stations, banks), as well as some uses that may be inappropriate in residential or commercial districts (e.g., animal shelter, kennel, sport shooting range. Aside from the site's zoning regulations, which were previously discussed, we are not aware of any legal restrictions that limit the potential uses of the subject. Physically Possible The second test is what is physically possible. As discussed in the "Site Description," section of the report, the site's physical characteristics do physically limit its use. The subject, while large, has an irregular shape, narrow and deep, which would make developing all 342,000 square feet allowable a challenge. Financially Feasible and Maximally Productive The third and fourth tests are what is financially feasible and what will produce the highest net return. After analyzing the physically possible and legally permissible uses of the property, the 28 RMRC File

35 highest and best use must be considered in light of financial feasibility and maximum productivity. For a potential use to be seriously considered, it must have the potential to provide a sufficient return to attract investment capital over alternative forms of investment. A positive net income or acceptable rate of return would indicate that a use is financially feasible. We do feel the subject s development restrictions for industrial use are well suited to the real estate market at present and the surrounding area land uses. However, the industrial market would not currently support 342,000 square feet of new space. A number of the other class A projects in the area still have significant vacancy such as Prologis Pompano (66% occupancy) and Pompano Commerce Center (87% occupancy). Pompano s sale prices and rental rates suffered during the market correction and significant recovery has been held back by economics of the local area. A few new large scale industrial projects have broken ground in the County over the past 12 months, but new development in the subject area is not justified without significant preleasing. Conclusion-As Though Vacant Considering the subject site s physical characteristics and location, as well as the state of the local market, it is our opinion that the Highest and Best Use of the subject site as though vacant is holding for further improvement in the local industrial market and completion of preleasing for industrial development as legally permissible and physically possible and conforming to the market ideal. 29 RMRC File

36 LAND VALUATION We have analyzed recent sales that are similar to the subject site in terms of location and buildable utility. The unit of comparison was price per square foot, which is typical with this type of property. Individual data sheets for the sales considered most similar to the subject appear at the addenda section of this report. Discussion of Sales We searched the Broward County market for industrial land sales since January 2012 over 6- acres. This yielded five sales. There does not appear to be a significant difference in the price per unit based upon site size. Two of the sales are also located in Pompano Beach, and their prices are significantly lower than the other sales. This is because the Pompano Beach submarket is not as strong as the southern submarkets. Overall, the prices per square foot range from $5.31 to $11.57 before adjustment for property specific criteria. After adjustment, the range narrows significantly. Adjustment of Sales The sales presented herein are all industrial land properties. Although the sales are comparable in many respects, the dissimilarities that exist between the sales and the subject property must be considered. Property Rights, Conditions of Sale, and Financing The sales warrant no adjustments for property rights as all involved fee simple or comparable interests. When the conditions of a sale are atypical, the result may be a price that is higher or lower than that or a normal transaction. When non-market conditions are noted, the sale should be analyzed with great care. Market based adjustments are difficult to apply and the only reliable adjustments come from inside knowledge or above average verification of the deal terms. These sales are arm s length transactions and provided a reasonable range of value for this type property, with buyers and sellers acting in their own self-interest. No adjustments for unusual financing are warranted, as these sales are all cash, or involved financing at market terms. Buyer Expenditures Every sale is adjusted up for the costs, as necessary, to demolish and make vacant. Such costs are verified with parties to the transaction or via comparable costs at other facilities in the instances where parties did not divulge or know of such costs. Sale 4 has existing improvements that had to be razed upon purchase. The buyer spent approximately $212,000 on demolition, so this sale was adjusted up under buyer expenditures by that amount. Although sale 1 had a building on site for demolition, our verification source informed us it was included in the price so no adjustment was made. 30 RMRC File

37 LAND SALES MAP 31 RMRC File

38 LAND SALES SUMMARY Subject Sale 1 Sale 2 Sale 3 Sale 4 Sale 5 Property Alpha 250 Plat, Parcel Pompano Distribution Center Bridge Point Marina Mile Bridge Port 95 Weeks Robinson Project Davie Business Center E II Site N/A 4000 Dixie Highway 33XX SW 30th Avenue 2650 SW 36 Street 3901 NE 12th Avenue 3300 Davie Road West side of Blount Road, along the first curve south of Sample Road Between I-595 and Collins Road Collins Road just east of SW 30th Avenue SWQ NE 12th Avenue & NE 10th Way East side of Davie Rd north side of Oakes Rd Pompano Beach Pompano Beach Dania Beach Dania Beach Pompano Beach Davie Broward Broward Broward Broward Broward Broward Transaction Date 5/23/2014 2/27/2014 8/28/2013 6/5/2013 7/23/2012 5/30/2012 Useable Acres Useable Land SF 961, , , , ,409 1,842,426 Planned Bldg SF 342, , , , , ,000 Prospective LTB Zoning I-1/PCI I-1 IROM-AA IROM-AA I-1 RAC-RTE Approvals No Yes Yes Yes No Yes Platted No No No No No Yes Shape Irregular Mostly Rectangular Irregular /non-contiguous Mostly Rectangular Mostly Rectangular Mostly Rectangular Utilities All Available All Available All Available All Available All Available All Available Access/Exposure Interior Direct Interior Interior Interior Interior Topography Raw Land Level, Improved Level, partially wooded Generally Level, Cleared Level, Improved Level, Cleared Sales Price $2,260,000 $6,750,000 $7,550,000 $3,000,000 $20,689,800 Price/Land SF $8.36 $11.18 $11.57 $5.31 $11.23 Comments This 6+ acre site was sold by an owner-user to Weeks Robinson, an institutional investor/developer of industrial properties. There was a 2,400 sf office building on site they will demolish but it did not affect the price paid. WR proposes a 128,400 square foot warehouse with 32' clear and dock-high, to be called Pompano Distribution Center II. The closing was contingent upon site plan approval which the buyer paid for. Bank sale of a highly contested industrial acreage in the immediate vicinity of Port 95. At the time of sale there was a clouded title regarding some eastern portions along SW 26th Terrace that eventually was transferred to a third party. The land areas reported here are the result of replatting and clearing of title. The buyer secured approvals for 189,620 sf of state-of-the-art distribution warehouse known as Bridge Point Marina Mile. Slated for completion in Dec Seller Sam Jazyri sold this industrial acreage to Bridge Development for a new twobuilding, 230,000 sf distribution warehouse project. This is the first of two such projects the buyer is undertaking, almost simultaneously, in Port 95. The other is a smaller 190,000sf building within walking distance of this property. Expected delivery for this project is 3Q14 and the other is expected in 4Q14. This site was purchased by an industrial institutional investor for a 202,103 sf distribution warehouse. There were improvements on site which cost the buyer $212,000 to demolish. The buyer took the site through approvals and broke ground January Delivery is expected by August The building was expected to be leased to a singletenant of National credit type. A portion of the former Palma Nova MHP. The seller handled some of the platting and mitigation issues and delivered the land ready for construction. The buyer, IDI, proposes 705,000 sf of warehouse space over 4 buildings in two phases with 30' ceilings. Neighboring parcels are being used for apartments and retail. This location is in the heart of Davie with convenient access to air and sea ports. 32 RMRC File

39 LAND SALES ANALYSIS Sale 1 Sale 2 Sale 3 Sale 4 Sale 5 Pompano Distribution Center II Bridge Point Marina Mile Bridge Port 95 Weeks Robinson Project Site Davie Business Center Sale Price $2,260,000 $6,750,000 $7,550,000 $3,000,000 $20,689,800 Property Rights Fee Simple Fee Simple Fee Simple Fee Simple Fee Simple Adjusted Price $2,260,000 $6,750,000 $7,550,000 $3,000,000 $20,689,800 Financing None None None None None Adjusted Price $2,260,000 $6,750,000 $7,550,000 $3,000,000 $20,689,800 Conditions of Sale Arms-Length Arms-Length Arms-Length Arms-Length Arms-Length Buyer Expenditures ,000 0 None None None Inferior None Adjusted Price $2,260,000 $6,750,000 $7,550,000 $3,212,000 $20,689,800 Market Conditions 2.5% 1% 2% 2% 5% 5% Adjusted forw ard to 5/23/2014 Inferior Inferior Inferior Inferior Inferior Adjusted Price $2,273,158 $6,873,904 $7,732,027 $3,359,180 $21,714,370 Price per Land SF $8.41 $11.38 $11.85 $5.94 $11.79 Location 0% -15% -15% 0% -15% Similar Superior Superior Similar Superior Site Size 0% 0% 0% 0% 0% Similar Similar Similar Similar Similar Zoning/Approvals/Platting -5% -10% -10% 0% -10% Superior Superior Superior Similar Superior Shape -5% -5% -5% -5% -5% Superior Superior Superior Superior Superior Access/Exposure -5% 0% 0% 20% 0% Superior Similar Similar Inferior Similar Topography -10% -5% -10% -10% -10% Superior Superior Superior Superior Superior Other Adjustment 0% 0% 0% 0% 0% Similar Similar Similar Similar Similar Net Adjustment -25% -35% -40% 5% -40% Overall Comparison Superior Superior Superior Inferior Superior Final Price/Land SF $6.31 $7.40 $7.11 $6.24 $ RMRC File

40 Market Conditions (Time) Market conditions may change between a date of sale for comparables and the effective date of appraisal. In such cases, the price of the comparable would be different and requires adjustment to the current market. Time itself does not necessitate an adjustment, but rather a shift in market conditions over time. If market conditions are similar, no adjustment is necessary even over longer periods. Conversely, rapid run up in pricing can be seen in short periods. We discussed the need to go back in time to obtain sufficient quantity of representative data, and our prior market analysis and general understanding of the markets clearly indicates that prices have generally improved between the oldest sale and the effective date of this assignment. As stated in the market analysis, we have seen some improvement in the industrial market and Pompano Beach submarket. Paired sales were not found, but we applied a 2.5% per year adjustment to reflect this steady improvement in the industrial market. Location An adjustment for location is required when the location characteristics of a comparable property are different from those of the subject property. Each comparable was adjusted accordingly based on factors such as overall supply/demand characteristics, real estate values in general, and anticipated growth or decline relative to the subject. The subject property is considered an average location in western Pompano Beach. Sales 2, 3 and 5 are located in superior submarkets near the airport and seaport. We adjusted then down for their superior location. Sales 1 and 4 are located in Pompano and did not require adjustment. Physical We adjusted for property size, access/exposure, land and parking ratios, as well as topography to the subject property as shown on the adjustment grid. As previously mentioned, size does not appear to significantly impact the per square foot pricing of these sites, so no adjustments were made. All of the sales had normal shapes for efficient development, so downward adjustments were made to these sales for the superior utility of the sites. Sale 1 is located directly on Dixie Highway, an eastern industrial thoroughfare. Exposure to this road is considered superior so we adjusted the sale downward. Alternatively, Sale 4 is located off a residential feeder road, surrounded by residential development, which is not ideal for industrial use. We adjusted this sale upward for inferior access/exposure. The other sales access and exposure was considered similar to the subject and required no adjustment. Finally, all of the sales were adjusted down for superior topography, as they were closer to being ready for development, most were level and clear. 34 RMRC File

41 Approvals All of the sales have industrial zoning, although Sales 2, 3 and 5 have higher densities permitted which adds value. These sales, as well as sale 1, also sold with approvals in place which adds value. Therefore, we adjusted these sales upward for having superior zoning and approvals. Other No other adjustments to the sales were required. Land Value Conclusion The sales indicate an adjusted value range as shown below. They are all superior sales to the subject based upon their shape and topography at sale. Sales 2 and 3 are also superior in location. We realize that the adjustments are significant, but the sales represent the very best data available. Sales 1 and 4 are the most proximate to the subject, located in Pompano, and sale 1 occurred only three months ago. We gave consideration to all of the sales, with most weight applied to sales 1 and 4. Therefore, our estimate of value for the subject land, as vacant, is: PRICE RANGE Unadjusted Adjusted Low $5.31 $6.24 Median $11.20 $7.09 Average $9.82 $6.95 High $11.57 $7.40 Most Proximate (1 & 4) $6.83 $6.27 LAND VALUE CONCLUSION Indicated Value PSF $6.50 Land Area (SF) 961,478 Indicated Value $6,249,607 Less Demolition to make vacant $0 Add Value of Excess Land $0 Reconciled Value $6,249,607 Rounded to nearest $25,000 $6,250,000 PSF of Land Area $ RMRC File

42 Although we found five recent sales of industrial land in the section above, instead of relying entirely on direct comparison, we have also used residual analysis. This method was developed as a check of our value conclusion. The approach considers stable operation of the highest and best use of the subject site. For simplicity, we used the 342,000 square feet allowable for the subject site. Based on rents in the Pompano Commerce Center and Prologis Pompano, just north of the subject, we estimated a market rent of $9.25 per square foot per year gross with 8.0% vacancy. Expenses were estimated at $3.00 per square foot per year, based upon similar buildings. After surveying sales of similar product we concluded to an overall rate of 7.50% for a new stable industrial property at market rent. Applying this rate yields a market value for 342,000 square feet of industrial of $25,125,600. Construction comparables from our proprietary database indicate construction costs including direct, indirect, contingency and profit of around $55 per square foot. Deducting the cost to construct from market value upon completion yields the maximum price that can be paid for the site. It appears from residual analysis that the subject site cannot be worth much more than $6.57 per square foot. This is consistent with our value conclusion for the subject by direct sales comparison. RESIDUAL TECHNIQUE Per SF Total Market Rent $9.25 $3,163,500 Less Vacancy 8.00% -$253,080 Less Industrial Expenses -$3.00 -$1,026,000 Net Operating Income $5.51 $1,884,420 OAR 7.50% Market Value $73.47 $25,125,600 Construction Costs including profit $55.00 $18,810,000 Land Value Residual n/a $6,315,600 Land Value/SF $ RMRC File

43 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. 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. 2. We have no present or prospective interest in the property that is the subject of this report and no personal interest or bias with respect to the parties involved. 3. We have no bias with respect to the property that is the subject of this report or to the parties involved with this assignment. 4. Our engagement in this assignment was not contingent upon developing or reporting predetermined results. 5. 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. 6. Our analyses, opinions, and conclusions are developed, and this report has been prepared in conformity with the Uniform Standards of Professional Appraisal Practice, the Code of Professional Ethics of the Appraisal Institute and the requirements of the State of Florida Certified Appraisers. 7. The use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representatives and the State of Florida relating to review by the Real Estate appraisal Subcommittee of the Florida Real Estate Commission. 8. As of the date of this report, Charles E. Minor, MAI has completed the requirements of the continuing education program of the Appraisal Institute. As of the date of this report, Alta M. Martin has completed the Standards and Ethics Education Requirement of the Appraisal Institute as a Candidate for Appraisal Institute Designation. 9. No one other than the undersigned provided significant professional assistance to the appraiser, unless otherwise noted in this report. The analyses, conclusions, and opinions are the effort of the undersigned. However, other professionals, companies, or members of our staff may have completed certain functions, such as data collection and verification. 10. Charles E. Minor, MAI made a personal on-site inspection of the property. Alta M. Martin made a personal on-site inspection of the property. 11. We have complied with the Competency Rule of the USPAP. 12. RMRC or the appraisers have not previously conducted an appraisal or other related service in connection with the property being appraised within the three-year period immediately preceding acceptance of this assignment. The current client and/or users have been informed that the intended use of this assignment is not for a federally insured depository institution in a federally related transaction. Charles E. Minor, MAI State-Certified General Real Estate Appraiser RZ2252 cminor@roeminor.com Alta M. Martin State-Certified General Real Estate Appraiser RZ3506 amartin@roeminor.com 37 RMRC File

44 ASSUMPTIONS AND LIMITING CONDITIONS "Report" means the appraisal or consulting report and conclusions stated therein, or a letter opinion, to which these Assumptions and Limiting Conditions are annexed. "Property" means the subject of the Report. "RMRC" means Roe Minor Realty Consultants. "Appraiser(s)" means the employee(s) of RMRC who prepared and signed the Report. The Report has been made subject to the following assumptions and limiting conditions: General Assumptions and Limiting Conditions 1. The information identified in this report as being furnished by others is believed to be reliable, but no responsibility for its accuracy is assumed. Information from personal inspection and investigation is believed to be correct by us. The file relating to this report is in our office, 1131 S.E. Third Avenue, Ft. Lauderdale, Florida, and is available to person or persons to whom this certificate is issued. 2. Responsible and competent ownership, management and marketing are assumed. 3. It is assumed that title to said premises is good, and that there are no restrictions as to its use, and that the description of the premises correctly designates the boundary lines. No survey of said property has been inspected by the appraiser(s) unless mentioned in the report, or a copy of same is presented in the report, and the appraiser(s) have made no survey of the property and assume no responsibility in connection with such matter. 4. The appraisal is of the date specified and covers the premises described only. 5. Neither all nor any part of the contents of this report shall be conveyed to the public through advertising, public relations, news, sales, or other media, without the written consent and approval of the author, particularly as to the valuation conclusions, the identity of the appraiser(s) or firm with which they are connected, or any reference to the Appraisal Institute, or to the MAI designation. 6. The values for the land and improvements contained in this report are constituent parts of the total value reported, and neither is to be used in making a summation appraisal by combination of value created by another appraiser. Either is invalidated if so used. The current purchasing power of the dollar is the basis for the value reported. 7. The appraiser(s) herein, by reason of this appraisal, shall not be required to give testimony or attendance in court or at any governmental hearing with reference to the property in question, except as agreed upon at least 30 days prior to such date. We reserve the right to consider and evaluate additional data that becomes available between the date of this report and the date of trial, if applicable, and make any adjustments to value that may be warranted. No testimony will be rendered unless the entire appraisal fee has been paid. Further, all testimony will be subject to expert witness fee previously approved by the appraiser(s). 8. This appraisal is presented as a complete, bound report, and may be considered valid only so long as it is presented in its entirety and all pages listed in the Table of Contents are present, and the appraiser(s) signature is/are present. 38 RMRC File

45 9. This valuation assumes that the property is unaffected by environmental issues. The existence of potentially hazardous materials used in construction of maintenance of the improvements, such as the presence of urea formaldehyde foam insulation, asbestos, and/or existence of toxic waste or radon, which may or may not be present on the property, was not observed by us, nor do we have any knowledge of the existence of such materials on or in the property. The appraiser, however, is not qualified to detect such substances. The existence of same may have an effect on the value of the property, which we may or may not be able to estimate. We urge the client to retain an expert in this field, if desired. 10. The appraiser(s) has not been furnished with soil or subsoil tests. In the absence of soil boring tests, it is assumed that there are no unusual subsoil conditions, or, if any do exist, they can be or have been corrected through the use of modern construction techniques at a reasonable cost. 11. The legal description used in this report was furnished to us by our client and is assumed to be correct. Legal counsel has not verified it, nor have we commissioned a survey of the parcel. Therefore, we suggest that this legal description be verified before being used in a legal document or conveyance. 12. We have not performed or reviewed a title search of the subject property. We assume that there are no liens against the property that would impact its value, unless otherwise noted in this report. 13. The appraiser shall retain ownership of all reports and all original documentation, field notes, memoranda, data and the like made, or assembled in and about the preparation of the report. No one other than the client may rely on or utilize the report without the appraiser s expressed written consent. 14. Any and all findings, predictions, assumptions, conclusions and the like contained in the report are the appraiser s professional opinion and are not assurances that future events or circumstances set forth herein will necessarily occur. 15. In this appraisal, we relied upon public information and staff interviews regarding zoning, land use and concurrency with growth management laws. However, we freely admit we are not zoning or concurrency experts and that final determinations can only be made by appropriate government authorities. Our valuation is subject to such determination. 16. The comparable sales data, if any, relied upon in this report is believed to be from reliable sources, however thorough inspection and firsthand knowledge are not available for all sales, and it was necessary to rely on information furnished by others as to physical and economic data. Should any of this information be misrepresented to our firm, or be in error, it may have an effect on value. Extraordinary Assumptions & Special Limiting Conditions Extraordinary Assumptions An extraordinary assumption is defined by the Uniform Standards of Professional Appraisal Practice as an assumption, directly related to a specific assignment, which, if found to be false, could alter the appraiser s opinions or conclusions. Extraordinary assumptions presume as fact otherwise uncertain information about physical, legal or economic characteristics of the subject property; or about conditions external to the property, such as market conditions or trends; or about the integrity of data used in an analysis. Extraordinary Assumptions: 1) This appraisal is not contingent on any extraordinary assumptions. 39 RMRC File

46 Hypothetical Conditions A hypothetical condition is defined by the Uniform Standards of Professional Appraisal Practice as that which is contrary to what exists but is supposed for the purpose of analysis. Hypothetical conditions assume conditions contrary to known facts about physical, legal, or economic characteristics of the subject property; or about conditions external to the property, such as market conditions or trends; or about the integrity of data used in an analysis. Hypothetical Conditions: 1) This appraisal is not contingent on any hypothetical conditions. Report Conditions and Acceptance of Assignment: The acceptance of this report and its use by the client in any manner whatsoever or for any purpose is acknowledgement by the client that this report is satisfactory professional product and that the client has personally read the report and specifically agrees that the data herein is accurate to the best of the appraiser and firm s ability. As a part of the appraiser-client employment agreement, the client agrees to notify the appraisers of any error, omission, or invalid data herein within 15 days of receipt and to return the original report(s) along with all copies to the appraiser for correction prior to any use or reliance whatsoever. Under no circumstances, shall the company s or appraiser s liability exceed the fee actually collected for this assignment, and then only in the case of gross error which would have materially affected the appraiser s value opinion as of the date of value. Roe Minor Realty Consultants warrants only that that the value conclusion is the appraiser s best opinion as of the effective date of this report. Roe Minor Realty Consultants is not responsible for any events, which may occur subsequent to the effective date including their impact on the estimate of value herein. Should Roe Minor Realty Consultants, Inc. and/or the appraiser(s) above be required to enforce the above assumptions, contingent and limiting conditions against any entity, person or persons claiming damages because of reliance upon or use of the appraisal report, that entity, person or persons shall be liable to the Roe Minor Realty Consultants or the appraiser(s) for all reasonable attorney s fees, costs, and expenses incurred by the appraiser(s) in enforcing this contract or defending the contingent conditions set forth in the appraisal report, including that incurred without suit, with suit, including all trials and appeals thereof. Acceptance of delivery or the payment for services rendered constitutes acceptance of this condition and all other contingent conditions set forth herein. 40 RMRC File

47 ADDENDA SECTION - # Alpha 250 Plat, Parcel E ADDENDUM A: ADDENDUM B: ADDENDUM C: ADDENDUM D: ADDENDUM E: ADDENDUM F: ADDENDUM G: Addenda Contents Tax Card(s) Demographics Comparable Land Sales Regional Analysis Definitions Client Information and Engagement Qualifications of Appraiser(s) RMRC File

48 ADDENDUM A Tax Card(s) RMRC File

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50 ADDENDUM B Demographics RMRC File

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58 ADDENDUM C Comparable Land Sales RMRC File

59 Land Sale No. 1 Property Identification Record ID 3420 Property Type Industrial, Vacant Land Property Name Pompano Distribution Center II Address 4000 Dixie Highway, Pompano Beach, Broward County, Florida Location East side of Dixie Highway, just north NE 40th Way Tax ID Sale Data Grantor American Cast Iron Pump Co Grantee WR Pompano, LLC Sale Date February 27, 2014 Deed Book/Page 50591/1242 Property Rights Fee Simple Financing None - All Cash Verification Confirmed by Ali Martin Sale Price $2,260,000 Cash Equivalent $2,260,000 RMRC File

60 Adjusted Price $2,260,000 Land Sale No. 1 (Cont.) Land Data Zoning Topography Utilities Shape Fencing Flood Info Exposure Impact Fees Platted I-1, Industrial Level, Improved All Available Generally Rectangular Perimeter 12011C0117F Zone X Direct/Dixie Highway Buyer Buyer Land Size Information Gross Land Size Acres or 270,255 SF Actual/Planned Building SF 128,400 Indicators Sale Price/Gross Acre $364,269 Sale Price/Gross SF $8.36 Sale Price/Planned Bldg. SF $17.60 Remarks This 6+ acre site was sold by an owner-user to Weeks Robinson, an institutional investor/developer of industrial properties. There was a 2,400 sf office building on site they will demolish but it did not affect the price paid. WR proposes a 128,400 square foot warehouse with 32' clear and dock-high, to be called Pompano Distribution Center II. The closing was contingent upon site plan approval which the buyer paid for. RMRC File

61 Land Sale No. 2 Property Identification Record ID 3383 Property Type Industrial, Industrial/Gen. Whse Property Name Bridge Point Marina Mile Address 33XX SW 30th Avenue, Dania Beach, Broward County, Florida Location Between I-595 and Collins Road Tax ID ; Lot/Block Lengthy; See Deed Sale Data Grantor First-Citizens Bank & Trust Company Grantee Bridge Marina Mile, LLC Sale Date August 28, 2013 Deed Book/Page 50125/700 Property Rights Fee Simple Conditions of Sale REO Sale Verification Confirmed by Hector Diaz RMRC File

62 Sale Price $6,750,000 Cash Equivalent $6,750,000 Land Sale No. 2 (Cont.) Land Data Zoning Topography Utilities Shape Exposure Impact Fees Platted Land Size Information Gross Land Size Useable Land Size Excess/Unusable Land Size Front Footage Indicators Sale Price/Gross Acre Sale Price/Gross SF Sale Price/Useable Acre Sale Price/Useable SF IROM-AA, Industrial Level All to site Irregular; Non-contiguous Interior lot Buyer Buyer Acres or 720,255 SF Acres or 603,959 SF, L-shaped Acres or 116,305 SF, Retention 615 ft SW 30th Ave $408,230 Actual $9.37 Actual $486,837 Actual $11.18 Actual Remarks This is the bank sale of a highly contested industrial acreage in the immediate vicinity of Port 95. At the time of sale there was a clouded title regarding some eastern portions along SW 26th Terrace that eventually was transferred to a third party. The land areas reported here are the result of replatting and clearing of title. The buyer also secured approvals for 189,620 sf of stateof-the-art distribution warehouse known as Bridge Point Marina Mile. Slated for completion in Dec-2014 and will feature 32' CCH, ESFR fire suppression, and dock ht loading. This is the second of two such projects undertaken the Bridge Development in this immediate area at the same time. The other is Bridge Port 95, a two-building 230,000 sf project of essentially the same product. RMRC File

63 Land Sale No. 3 Property Identification Record ID 3384 Property Type Industrial, Industrial/Gen. Whse Property Name Bridge Port 95 Address 2650 SW 36 Street, Dania Beach, Broward County, Florida Location Collins Road just east of SW 30th Avenue Tax ID Lot/Block Lengthy; See Deed Sale Data Grantor 36th Street Acquisitions Grantee Bridge Port 95, LLC Sale Date June 05, 2013 Deed Book/Page 49864/1481 Property Rights Fee Simple Conditions of Sale Arm's Length Verification Confirmed by Hector Diaz RMRC File

64 Sale Price $7,550,000 Cash Equivalent $7,550,000 Land Sale No. 3 (Cont.) Land Data Zoning Topography Utilities Shape Exposure Impact Fees Platted Land Size Information Gross Land Size Indicators Sale Price/Gross Acre Sale Price/Gross SF IROM-AA, Industrial Level All to site Mostly Rectangular; contiguous Interior lot Buyer Buyer Acres or 652,675 SF $503,892 Actual $11.57 Actual Remarks Seller Sam Jazyri sold this industrial acreage to Bridge Development for a new two-building, 230,000 sf distribution warehouse project. This is the first of two such projects the buyer is undertaking, almost simultaneously, in Port 95. The other is a smaller 190,000sf building within walking distance of this property. Expected delivery for this project is 3Q14 and the other is expected in 4Q14. The buyer is very bullish about this market for 32' CCH warehouses. RMRC File

65 Land Sale No. 4 Property Identification Record ID 3169 Property Type Industrial, Vacant Land Property Name Weeks Robinson Project Site Address 3901 NE 12th Avenue, Pompano Beach, Broward County, Florida Location SWQ NE 12th Avenue & NE 10th Way Tax ID Sale Data Grantor Unaflex Holdings, Inc Grantee WR Pompano Industrial, LLC Sale Date July 23, 2012 Deed Book/Page Property Rights Fee Simple Verification Confirmed by Ali Martin Sale Price $3,000,000 Cash Equivalent $3,000,000 RMRC File

66 Land Sale No. 4 (Cont.) Upward Adjustment $212,000 Demolition Adjusted Price $3,212,000 Land Data Zoning Topography Utilities Shape Fencing Exposure Impact Fees Platted I-1, General Industrial, Industrial Level, Clear All Available Generally Rectangular Perimeter Interior, Average No Buyer Land Size Information Gross Land Size Acres or 565,409 SF Actual/Planned Building SF 202,103 Indicators Sale Price/Gross Acre Sale Price/Gross SF Sale Price/Planned Bldg. SF $231,125 Actual or $247,458 Adjusted $5.31 Actual or $5.68 Adjusted $14.84 Actual or $15.89 Adjusted Remarks This site was purchased by an industrial institutional investor for a 202,103 sf distribution warehouse. There were improvements on site which cost the buyer $212,000 to demolish. The buyer took the site through approvals and broke ground January Delivery is expected by August The building will be leased to a single-tenant of National credit type. RMRC File

67 Land Sale No. 5 Property Identification Record ID 3150 Property Type Industrial, Flex Office/Warehouse Property Name Davie Business Center Address 3300 Davie Road aka 3000 SW 60th Ave, Davie, Broward County, Florida Location East side of Davie Rd north side of Oakes Rd Tax ID Lot/Block Lengthy; See Deed Sale Data Grantor Silver Oaks Landowner, LLC and She Station, LLC Grantee Davie Business Center, LLC Sale Date May 30, 2012 Deed Book/Page 48790/265 Property Rights Fee Simple Verification Confirmed by Hector Diaz Sale Price $20,689,800 RMRC File

68 Cash Equivalent $20,689,800 Land Sale No. 5 (Cont.) Land Data Zoning Topography Utilities Shape Exposure Impact Fees Platted RAC-RTE, Heavy Industrial Level/Ready All to site Irregular Industrial Park Yes Buyer Land Size Information Gross Land Size Acres or 1,842,426 SF Actual/Planned Building SF 705,000 Indicators Sale Price/Gross Acre $489,164 Sale Price/Gross SF $11.23 Sale Price/Planned Bldg. SF $29.35 Remarks A portion of the former Palma Nova MHP. The seller handled some of the platting and mitigation issues and delivered the land ready for construction. The buyer, IDI, proposes 705,000 sf of warehouse space over 4 buildings in two phases with 30' ceilings. Neighboring parcels are being used for apartments and retail. This location is in the heart of Davie with convenient access to air and sea ports. RMRC File

69 ADDENDUM D Regional Analysis RMRC File

70 ADDENDUM E Definitions RMRC File

71 Value market value Market value is one of the central concepts of the appraisal practice. Market value is differentiated from other types of value in that it is created by the collective patterns of the market. A current economic definition agreed upon by agencies that regulate federal financial institutions in the United States of America follows, as defined in the Agencies appraisal regulations: 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 are 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 US 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. market value as if complete on the appraisal date Market value as if complete on the appraisal date is an estimate of the market value of a property with all construction, conversion, or rehabilitation hypothetically completed, or under other specified hypothetical conditions as of the date of the appraisal. With regard to properties wherein anticipated market conditions indicate that stabilized occupancy is not likely as of the date of completion, this estimate of value should reflect the market value of the property as if complete and prepared for occupancy by tenants. market value as is on the appraisal date Market value as is on the appraisal date is an estimate of the market value of a property in the condition observed upon inspection and as it physically and legally exists without hypothetical conditions, assumptions, or qualifications as of the date of appraisal. prospective future value upon completion of construction Prospective future value upon completion of construction is the prospective value of a property on the future date that construction is completed, based upon market conditions forecast to exist, as of that completion date. prospective future value upon reaching stabilized occupancy Prospective future value upon reaching stabilized occupancy is the prospective value of a property at a future point in time when all improvements have been physically constructed and the property has been leased to its optimum level of long-term occupancy. assessed value Assessed value applies in ad valorem taxation and refers to the value of a property according to the tax rolls. Assessed value may not conform to market value, but it is usually calculated in relation to a market value base. going concern value Going concern value is the value of a proven property operation. It includes the incremental value associated with the business concern, which is distinct from the value of the real estate only. Going concern value includes an intangible enhancement of the value of an operating business enterprise which is produced by the assemblage of the land, building, labor, equipment, and marketing operation. This process creates an economically viable business that is expected to continue. Going concern value refers to the total value of a property, including both real property and intangible personal property attributed to the business value. insurable value Insurable Value is based on the replacement and/or reproduction cost of physical items that are subject to loss from hazards. Insurable value is that portion of the value of an asset or asset group that is acknowledged or recognized under the provisions of an applicable loss insurance policy. This value is often controlled by state law and varies from state to state. investment value Investment value is the value of an investment to a particular investor based on his or her investment requirements. In contrast to market value, investment value is value to an individual, not value in the marketplace. Investment value reflects the subjective relationship between a particular investor and a given investment. When measured in dollars, investment value is the price an investor would pay for an investment in light of its perceived capacity to satisfy his or her desires, needs, or investment goals. To estimate investment value, specific investment criteria must be known. Criteria to evaluate a real estate investment are not necessarily set down by the individual investor; they may be established by an expert on real estate and its value, that is, an appraiser. use value Use value is a concept based on the productivity of an economic good. Use value is the value a specific property has for a specific use. Use value focuses on the value the real estate contributes to the enterprise of which it is a part, without regard to the property s highest and best use or the monetary amount that might be realized upon its sale. value appraised During the real estate development process, a property typically progresses from a state of unimproved land to construction of improvements to stabilized occupancy. In general, the market value associated with the property increases during these stages of development. After reaching stabilized occupancy, ongoing forces affect the property during its life, including a physical wear and tear, changing market conditions, etc. These factors continually influence the property s market value at any given point in time. See also market value as is on the appraisal date market value as if complete on the appraisal date prospective future value upon completion of construction prospective future value upon reaching stabilized occupancy Methodology cost approach "A set of procedures through which a value indication is derived for the fee simple interest in a property by estimating the current cost to construct a reproduction of, or replacement for, the existing structure; deducting accrued depreciation from the reproduction or replacement cost; and adding the estimated land value plus an entrepreneurial profit. Adjustments may then be made to the indicated fee simple value of the subject property to reflect the value of the property interest being appraised." income capitalization approach "A set of procedures through which an appraiser derives a value indication for an income-producing property by converting its anticipated benefits (cash flows and reversions) into property value. This conversion can be accomplished in two ways. One year s income expectancy can be capitalized RMRC File

72 at a market-derived capitalization rate or at a capitalization rate that reflects a specified income pattern, return on investment, and change in the value of the investment. Alternatively, the annual cash flows for the holding period and the reversion can be discounted at a specified yield rate." sales comparison approach "A set of procedures in which a value indication is derived by comparing the property being appraised to similar properties that have been sold recently, applying appropriate units of comparison, and making adjustments to the sale prices of the comparables based on the elements of comparison. The sales comparison approach may be used to value improved properties, vacant land, or land being considered as though vacant; it is the most common and preferred method of land valuation when comparable sales data are available." subdivision analysis aka subdivision development method A method of estimating land value when subdivision and development are the highest and best use of the parcel of land being appraised. When all direct and indirect costs and entrepreneurial incentive are deducted from an estimate of the anticipated gross sales price of the finished lots, the resultant net sales proceeds are then discounted to present value at a market-derived rate over the development and absorption period to indicate the value of the raw land. sellout method See subdivision analysis General 1031 exchange A provision of the tax code that allows the seller of an investment property to defer capital gains taxes by exchanging the sale proceeds for an investment in a similar property or properties within 180 days of the original closing. cash equivalency The procedure in which the sale prices of comparable properties sold with atypical financing are adjusted to reflect typical market terms. contract, coupon, face, or nominal rent The nominal rent payment specified in the lease contract. It does not reflect any offsets for free rent, unusual tenant improvement conditions, or other factors that may modify the effective rent payment. coupon rent See Contract, Coupon, Face, or Nominal Rent discount rate An interest rate used to convert future payments or receipts into present value. The discount rate may or may not be the same as the internal rate of return (IRR) or yield rate depending on how it is extracted from the market and/or used in the analysis. See also yield rate. effective rent 1) The rental rate net of financial concessions such as periods of no rent during a lease term; may be calculated on a discounted basis, reflecting the time value of money, or on a simple, straightline basis. 2) The economic rent paid by the lessee when normalized to account for financial concessions, such as escalation clauses, and other factors. Contract, or normal, rents must be converted to effective rents to form a consistent basis of comparison between comparables. extraordinary assumptions An extraordinary assumption is defined by the Uniform Standards of Professional Appraisal Practice as an assumption, directly related to a specific assignment, which, if found to be false, could alter the appraiser s opinions or conclusions. Extraordinary assumptions presume as fact otherwise uncertain information about physical, legal or economic characteristics of the subject property; or about conditions external to the property, such as market conditions or trends; or about the integrity of data used in an analysis. face rent See Contract, Coupon, Face, or Nominal Rent floor area ratio (FAR) The relationship between the aboveground floor area of a building, as described by the building code, and the area of the plot on which it stands; in planning and zoning, often expressed as a decimal, e.g., a ratio of 2.0 indicates that the permissible floor area of a building is twice the total land area; also called building-to-land ratio. fee simple estate 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. full service lease A lease in which rent covers all operating expenses. Typically, full service leases are combined with an expense stop, the expense level covered by the contract lease payment. Increases in expenses above the expense stop level are passed through to the tenant and are known as expense pass-throughs. gross building area (GBA) The sum of all areas at each floor as measured to the exterior walls. hypothetical conditions A hypothetical condition is defined by the Uniform Standards of Professional Appraisal Practice as that which is contrary to what exists but is supposed for the purpose of analysis. Hypothetical conditions assume conditions contrary to known facts about physical, legal, or economic characteristics of the subject property; or about conditions external to the property, such as market conditions or trends; or about the integrity of data used in an analysis. institutional grade real estate Real property investments that are sought out by institutional buyers and have the capacity to meet generally prevalent institutional investment criteria. land to building ratio The proportion of land area to gross building area; typical land to building ratios for properties combine land and building components into a functional economic unit. leased fee See leased fee estate leased fee estate An ownership interest held by a landlord with the right of use and occupancy conveyed by lease to others. The rights of the lessor (the leased fee owner) and the leased fee are specified by contract terms contained within the lease. leasehold See leasehold estate leasehold estate The interest held by the lessee (the tenant or renter) through a lease conveying the rights of use and occupancy for a stated term under certain conditions. load factor The amount added to usable area to calculate the rentable area. It is also referred to as a rentable add-on factor which, according to BOMA, is computed by dividing the difference between the usable square footage and rentable square footage by the amount of the usable area. Convert the figure into a percentage by multiplying by 100. marketing period The time it takes an interest in real property to sell on the market subsequent to the date of an appraisal. net lease Lease in which all or some of the operating expenses are paid directly by the tenant. The landlord never takes possession of the expense payment. In a Triple Net Lease all operating expenses are the responsibility of the RMRC File

73 tenant, including property taxes, insurance, interior maintenance, and other miscellaneous expenses. However, management fees and exterior maintenance may or may not be the responsibility of the lessor in a triple net lease. A modified net lease is one in which some expenses are paid separately by the tenant and some are included in the rent. net rentable area (NRA) 1) The area on which rent is computed. 2) The Rentable Area of a floor shall be computed by measuring to the inside finished surface of the dominant portion of the permanent outer building walls, excluding any major vertical penetrations of the floor. No deductions shall be made for columns and projections necessary to the building. Include space such as mechanical room, janitorial room, restrooms, and lobby of the floor. nominal rent See Contract, Coupon, Face, or Nominal Rent overall capitalization rate (OAR) An income rate for a total real property interest that reflects the relationship between a single year's net operating income expectancy and the total property price or value; used to convert net operating income into an indication of overall property value. reasonable exposure time 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 estimate based upon an analysis of past events assuming a competitive and open market. rent See full service lease net lease contract, coupon, face, or nominal rent, effective rent reserve for replacement An allowance that provides for the periodic replacement of building components, and furniture, fixtures, and equipment, which deteriorate and must be replaced during the building s economic life. rent spike An increase in market rent that is markedly higher than the general rate of inflation. residual Estimated total price at conclusion of forecast period. sale-leaseback A transaction in which an owner sells a property that it fully occupies to a third party then leases the space back from the new owner. shell space Space which has not had any interior finishing installed, including even basic improvements such as ceilings and interior walls, as well as partitions, floor coverings, wall coverings, etc. usable area 1.) The area actually used by individual tenants. 2) The Usable Area of an office building is computed by measuring to the finished surface of the office side of corridor and other permanent walls, to the center of partitions that separate the office from adjoining usable areas, and to the inside finished surface of the dominant portion of the permanent outer building walls. Excludes areas such as mechanical rooms, janitorial room, restrooms, lobby, and any major vertical penetrations of a multi-tenant floor. yield rate A rate of return on capital, usually expressed as a compound annual percentage rate. A yield rate considers all expected property benefits, including the proceeds from sale at the termination of the investment. See also discount rate. Space Use/Availability available space The total amount of space that is currently being marketed as available for lease in a given time period. It includes space that is available, regardless of whether the space is vacant, occupied, available for sublease, or available at a future date. Available Space excludes shadow space. If sub-tenant space is excluded from the calculation, the term direct leased space is recommended. leased space Leased space includes all space under contract, regardless of whether the space is currently occupied by a tenant. Leased space need not be physically occupied; it also includes space being offered for sublease. If sub-tenant space is excluded from the calculation, the term direct leased space is recommended. occupied space Space that is occupied by a tenant, subtenant or owner. The total amount of occupied space is calculated by subtracting the amount of vacant space from the amount of inventory. If subtenant space is excluded from the calculation the term direct occupied space is recommended. pre-leased space The total amount of space in a building that has been leased prior to its construction completion date, or certificate of occupancy (COO or CO) date. shadow space That portion of the leased space which is vacant but not available space, i.e., space that is not currently utilized by a tenant and is also not being marketed for subleasing. Shadow space is difficult to measure and is also known as phantom space. vacant space Inventory that is not currently occupied. If sub-tenant space is excluded from the calculation, the term direct vacant space is recommended. vacancy rate A measurement expressed as a percentage of the total amount of vacant space divided by the total amount of inventory. If sub-tenant space is excluded from the calculation, the term direct vacancy rate is recommended. Office office building types Low Rise: fewer than seven stories above ground level. Mid Rise: Between seven and 25 stories above ground level High Rise: Higher than 25 stories above ground level. Class A: asking gross rents in the top 30-40% of the market; excellent location; building systems meet current and future needs; high quality design competitive with new construction; efficient layout, above average maintenance and management. Class B: asking gross rents between Class A and Class C; average to good location; building systems have adequate capacity to serve current tenant needs; average quality design and materials; good to fair interior trim; average to good maintenance and management. Class C: asking gross rents between the bottom 10-20% of the market; less desirable location; lower price is main attraction for tenants; building systems may not meet current tenant needs; dated appearance; functional but no frills tenant improvements; below average maintenance and management. government office building A building which is owned and/or at least 90% leased by public sector agencies. medical office building A building which consists of 90% or greater medical tenancy. multi-tenant office building RMRC File

74 A building for which there are multiple lease obligations and less than 90% of which may be owner occupied. owner occupied office building A building which is at least 90% occupied by its owner. single tenant office building A building for which there is a single lease obligation or is 100% owner occupied. Retail strip shopping center An open row of stores either with or without anchor stores that offer convenience (neighborhood centers) and general merchandise (community centers). neighborhood shopping center The smallest type of shopping center, generally with a gross leasable area of less than 100,000 square feet. Typical anchors include supermarkets and pharmacies. Neighborhood shopping centers offer convenience goods and personal services and usually depend on the market support of more than 1,000 households. community shopping center A shopping center of 100,000 to 300,000 square feet that usually contains one junior department store, a variety store or discount department store, a supermarket, and specialty stores. A community shopping center generally has between 20 and 70 retail tenants and the market support of more than 5,000 households. power center 1.) An open center dominated by at least 75% large big-box anchors, including discount stores, warehouse clubs, and value-oriented category stores; a minimal amount of inline store space. 2.) A large community shopping center with more than 250,000 square feet of space anchored by three or more tenants that occupy 60% to 90% of the space; the number of specialty stores is kept to a minimum. See also shopping center. regional mall 1.) An enclosed shopping center that contains at least two department stores and has climate-controlled walkways that are lined with smaller retail shops. 2.) A shopping center that offers a variety of general merchandise, apparel, furniture, home furnishings, services, and recreational facilities and is built around one or more full department stores of at least 100,000 square feet each. Regional shopping centers generally have between 400,000 and 750,000 square feet of gross leasable area. Industrial flex space Industrial space designed to allow flexible conversion of warehouse or manufacturing space to a higher percentage of office space. Alternatively known as a service center or tech space. See also research and development (R&D) space. warehouse A structure that is designed and used for the storage and distribution of wares, goods, and merchandise; usually classified as industrial. research and development (R&D) Space that is designed and equipped to meet the specific research and development needs of a high technology industry. See also flex space. Various sources for these definitions include: The Appraisal of Real Estate, Twelfth Edition, Appraisal Institute, The Dictionary of Real Estate Appraisal, Fourth Edition, Department of the Treasury, Office of the Comptroller of the Currency, Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation, Office of Thrift Supervision and National Credit Union Administration under 12 CFR Part 34, Real Estate Appraisals and Title XI of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 ( FIRREA ); and the Interagency Appraisal and Evaluation Guidelines, Federal Register, Volume 75, No. 237, December 10, NAIOP, Terms and Definitions for the US Office Market, July 2004 Price Waterhouse Coopers Investor Survey, PriceWaterhouse Coopers. RMRC File

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79 ADDENDUM G Qualifications of Appraiser(s) RMRC File

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