BESEN EXCLUSIVE: 1124 UNION AVENUE, NEWBURGH, NY 12550

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1 34,136 SF Movie Theater on a 8.72-Acre Parcel Offering Memorandum Matthew Slonim Chief Operating Officer (212) Direct (212) Fax mslonim@besenassociates.com

2 Executive Summary Address: 1124 Union Avenue, Newburgh, NY (Orange County District) AKA 1420 Route 300 (Union Avenue) Between Route 52 (South Plank Road) and Meadow Avenue Description: The Property is a 1-story movie theater building located on an irregularly-shaped acre parcel of land zoned Interchange Business. The Property has a Gross Leasable Area of 34,136 SF and has 10 digitally upgraded theaters with 1,680 movie seats and 561 total outdoor parking spots. Built in 1986 and renovated in 2003, the building is NN leased to Showtime Cinemas through 12/31/2022. Investment Highlights Development Potential. Potential to redevelop land parcel and add usable square footage up to a total of 149,336± sf depending on use (additional 16,000 SF of retail / theater extension or additional 115,200 SF storage building. 7.0% Cap Rate In Place & 9.0% with Upside. The Property is offered at a 7.0% Asking Capitalization Rate applying the 2014 base rent of $480,000 per annum. The rent equates to $14.12/sf and is slightly below current comparable market retail rental rates. The pro-forma value-add capitalization rates increase to 9.0% (retail) or 9.1% (storage) if additional buildable square footage is developed. High Traffic & Centrally Located Retail Hub. The Property, less than 70 miles from NYC, is located at the intersection of highly trafficked Route 300 and Route 52 only ¼-mile east of Exit 17 of the NYS Thruway (I-87) and nearby accessibility to I- 84 and Stewart International Airport. The Hudson Valley area has over 100 Fortune 500 companies and is a thriving and growing business area. The immediate area features many national retailers and banks as well as the 388,000 SF Newburgh Mall. Minimal Management Required. Single tenant net leased the Property and is responsible for all utility and operating expenses (except RE taxes) and maintenance. Ask Price: Pricing $6,150,000 Price Break: $ 5,400,000 All Cash Ask Metrics: Initial Cap. Rate: 7.0% (2014) Price/ Building SF: $158/SF Pro forma Cap. Rate: 9.0% (Retail) [1] Price/ Acre: $619,270 Pro forma Cap. Rate: 9.1% (Storage) [1] Footnotes: [1] Incorporates construction/and lease up costs and marginal NOI from development of available air rights (SEE Development).

3 Location Overview Located at 1124 Union Avenue (Route 300), the Property is less than 0.25 miles east from NYS Thruway (Exit 17) and is less than 90 minutes drive to New York City. The City of Newburgh provides connections to the regional transportation system, including Interstate I-84 and the New York State Thruway (I-87), Hudson River access, and accessibility to Stewart International Airport. 60,000 + Annual Average Daily Traffic on Route I-84/NYS Thruway (data as of 2009). The Hudson Valley area has over 100 Fortune 500 companies, including IBM, MasterCard, PepsiCo, Siemens Medical, Novartis, United Healthcare, Morgan Stanley, Mitsubishi, Verizon Wireless, Toshiba, and Kraft. Location Map 70 miles from New York City (A=Newburgh, NY & B=New York City)

4 Area Map 1124 Union Avenue Aerial Photo

5 Rent Roll Movie Theater (Showtime Cinemas): Rent Schedule from 1/1/2013 to 12/31/ Union Avenue, Newburgh, NY PERIOD BASE RENT/MONTH BASE RENT /YEAR NET SF BASE RENT /SF/YEAR 1/1/ /31/2013 $35,000 $420,000 34,000 $12.35 RENT ESCALATION 1/1/ /31/2014 $40,000 $480,000 34,000 $ % 1/1/ /31/2015 $40,000 $480,000 34,000 $ /1/ /31/2016 $40,000 $480,000 34,000 $ /1/ /31/2017 [1] $40,000 $480,000 34,000 $ /1/ /31/2018 [1] $40,000 $480,000 34,000 $ /1/ /31/2019 [1] $40,000 $480,000 34,000 $ /1/ /31/2020 $42,500 $510,000 34,000 $ % 1/1/ /31/2021 $42,500 $510,000 34,000 $ /1/ /31/2022 $42,500 $510,000 34,000 $15.00 Footnotes: [1] As per a lease amendment dated June 1 st, 2012, if the Tenant s annual gross receipts for the operation of its business at the Premises is at least $3,000,000 (the Threshold ) in 2016, then the annual rent for the periods 1/1/ /31/2019 will be $510,000. If the Threshold is met in 2017, the increased rent of $510,000/year applies for 1/1/ /31/2018. If the Threshold is met in 2018, the increased rent of $510,000/year applies for 1/1/ /31/2019.

6 Financial Summary Profit & Loss Statement: Below is a table that summarizes the estimated profit and loss statement for 2014: 1124 Union Avenue, Newburgh, NY REVENUE: AMOUNT $/SF Rent (as of 1/1/2014) $480,000 $14.06 EXPENSES: (ESTIMATED) RE Taxes [1] $104,000 $3.05 Total Expenses: $104,000 $3.05 Net Operating Income: $376,000 $11.01 Footnote: [1] As per a lease amendment dated June 1 st, 2012, the Landlord is responsible for paying the Real Estate taxes. Real Estate taxes are pro forma for the recent settlement with the assessor s office to reducing real estate taxes from $165,676 to a fixed $104,000 per annum for the next three years. Property Entrance with Signage on Route 300 (100 Feet of Frontage)

7 Pro Forma Develop Lot: Financial Summary (Continued) On the next Page is a table that summarizes two potential redevelopments of the Property that keep the existing structure and tenant while adding additional square footage to the Property. Plans are available upon request. Plans meet bulk requirements except for the 300 foot minimum frontage requirement for which Property currently has variance approval. Add Storage SF Scenario maximizes total buildable square foot adding a second building to the Property totaling 115,200 SF +/- for storage use in addition to the existing movie theater. We estimate a market rent of $10.00 less 20% of that incremental rent in the form of higher real estate taxes. The Total Cost is estimated at $14.3 million and includes the current Asking Price to acquire the Property plus development costs of $75/sf or $8.6 million in construction costs plus 25% of the projected incremental annual rent for leasing fees. Add Movie/Retail SF Scenario allows for an extension of an additional16,000 SF of movie theater and/or retail use. The Gross Leasable area after the extension would total 50,000 SF +/-. We estimate a market rent of $18.00 less 20% of that incremental rent in the form of higher real estate taxes. The Total Cost is estimated at $6.8 million and includes the current Asking Price to acquire the Property plus development costs of $80/sf or $1.3 million in construction costs plus 25% of the projected incremental annual rent for leasing fees. Secondary Entrance on Route 52

8 Financial Summary (Continued) Additional Development Potential Value (By Use) Use: Movie/Storage Movie/Retail Size Existing SF 34,000 34,000 Additional BSF 115,200 16,000 Total SF 149,200 50,000 Cost $/SF Cost to Build Extension $ $ $ Cost to Build Extension $ 8,640,000 $ 1,280,000 Leasing Costs $ 288,000 $ 72,000 Land Acquisition Cost / Purchase Price $ 5,400,000 $ 5,400,000 Total Costs $ 14,328,000 $ 6,752,000 Pro Forma Rent & NOI Gross Market Rent For New SF/Use $ $ Proforma Additional Net Rent $ 1,152,000 $ 288,000 Proforma RE Tax Increase $ (230,400) $ (57,600) Pro forma Additional NOI $ 921,600 $ 230,400 Existing Actual NOI (2014) $376,000 $376,000 Total Actual & Projected NOI $ 1,297,600 $ 606,400 Pro Forma Cap. Rate w/additional NOI 9.1% 9.0% Note: [1] Acres of land excludes quarter acre easement and half acre of undeveloped land.

9 Site Details, Zoning & Requirements, & Development Potential Section Block-Lot: & Building Dimensions: 304 x (IRR) Building Height: Front 23 / Rear 28 Site Size: Existing Land Parcel (lot 22.22): 7.90 Acres± Easement Land Parcel: 0.32Acres± Undeveloped Land Parcel (lot 16.1): 0.50 Acres± 8.72 Acres± Zoning: IB (Interchange Business) Permitted Use: Theaters, Storage, Shopping Centers, Hotels, & Retail (Subject to Review by Planning Board). Block & Lot Map: Easement Site Additional Undeveloped Parcel Development Potential [1] : Existing Additional Pro Forma Permitted Use [1] SF [2] SF SF Total 1. Existing Theater Building Only: 34,136-34, Extension of Existing Theater Building: 34,000 16,000 50, Existing Theater & Storage Building: 34, , ,200

10 Bulk Requirements: BESEN EXCLUSIVE: Required / Allowable Site 1. As Is 2. Theater 3. Theater Bulk Requirements [1] Details Theater Extension + Storage Lot Area (Acres): 8.72 Acres 3 Acres NA 5 Acres Lot Width/Frontage:* 100 FT. 300 FT. Same as FT. Lot Depth: NA 300 FT. Same as 1. NA Front Yard Setback: 60 FT. 60 FT. Same as FT. Rear Yard Setback: 60 FT. 60 FT. Same as FT. Side Yard Setback: 60 FT. 50 FT. Same as FT. Side Yard Setback (Total): NA 100 FT. Same as 1. NA Bldg. Coverage: 41%+/- NA 25% Max. Building Height: <40 FT. 40 FT. 40 FT. 40 FT. # of Parking Spaces: # of Permanent Seats 1,650 1,650+/- 2,450+/- 1,650+/- Parking Ratio (Space to Seats): 1 to 3 1 to 3 1 to 3 Footnotes: [1] Information about the potential development is based on Concept Plan Models performed by McCarthy Kerekes Company that specializes in land planning, design and development projects. As of 2008, McCarthy Kerekes has developed a Concept Plan K-2 that shows a 15,100 square-foot potential extension for commercial use. [2] The existing square footage for this table is as provided from plans provided by Architect. All other references to total existing square footage are estimated at 34,136 SF.

11 Additional Property Photos Facing Showtime Cinemas from Main Entrance Property Entranceway

12 Local Retail Market & Neighboring Retailers The Property is located on a highly trafficked road amid many national retailers, banks and strip centers including the Newburgh Mall. Below is a map of select neighboring retailers. Map of Select Retailers in the Immediate Area

13 Retail Neighbor at Union Avenue Retail Neighbor at Intersection of Route 52 & Union Avenue Retail Neighbor Across Union Avenue

14 Nearby Newburgh Mall The Newburgh Mall, a 388,000 square foot community shopping center is located ½ a mile north of the Property and is anchored by Sears, The Bon-Ton, Bed Bath and Beyond and Office Depot. The Mall and features over 65 specialty retail stores including Bath & Body Works, Champs, and The Children's Place.

15 Retail Rental Market The immediate Newburgh area has limited retail vacancies. Below are details for select retail stores and related asking rents for spaces currently available in the area. The asking rents range from $17.00/sf to $36.00/sf Route 300, Newburgh, NY Union Avenue, Newburgh, NY (Newburgh Commons) Retail Rental Rate ($/SF/Year) $36.00 Retail Rental Rates (Asking Rents) Retail Rental Rate ($/SF/Year) $18.00 Property Sub-Type: Restaurant t Property Sub-Type: Strip Center SF available for rent : 6,000 SF available for rent : 6, Park Place, Newburgh, NY Retail Rental Rate $34.50 ($/SF/Year) Retail Rental Rate ($/SF/Year) $18.00 Property Sub-Type: Retail/Bank Property Sub-Type: Strip Center SF available for rent : 4,000 SF available for rent : 5, South Plank Road, Newburgh, NY (Algonquin Plaza) 77 North Plank Road, Newburgh, NY Retail Rental Rate ($/SF/Year) $23.33 Retail Rental Rate ($/SF/Year) Property Sub-Type: Strip-Center Property Sub-Type: $17.00 Community Center SF available for rent : 3,600 SF available for rent: 5,800

16 Neighborhood Description Newburgh is a City located in Orange County, NY. Its close proximity to New York City and the Hudson River make Newburgh an ideal place to live, work, or visit. It is a densely established community totaling 3.8 square miles. The City of Newburgh is connected by the Town of Newburgh on the west and north, the Hudson River on the east and the Town of New Windsor on the south. The city and its immediate suburbs have a population of more than 100,000 people. Newburgh is a City with many distinctions and a noteworthy history. It abounds scenic views, cultural history, and beautifully designed neighborhoods like Washington Heights and Colonial Terraces. Historic architecture accents every block and 19th-century styles like Federal, Greek, Revival, High-Victorian, Gothic Revival and Picturesque are displayed throughout the City. In addition to being astatically pleasing Newburgh is unique in that it housed the first Edison power plant making it the first American city to be electrified.

17 Landmarks & Local Snapshot Downing Park was a farm owned by the Smith family before becoming a park in The Park was designed by Calvert Vaux and Frederick Law Olmsted, the designers of New York City's Central Park. It opened to the public in 1897 and featured an observatory overlooking the Hudson River and a bandshell, which would later be demolished. In 1964 an outdoor amphitheatre was added to the Park and today is used weekly for live band concerts. Its 35-acre picturesque landscape highlights long paths, hills and valleys, streams, a pond, and a variety of vegetation. Downing Park East End Historic District. The City of Newburgh has the second largest historic district in New York State preserving history tracing back to Washington s Headquarters, the nation s first publicly owned historic site, can be found in the City of Newburgh along with the Gothic Revival Dutch Reformed Church and David Crawford House Museum. The East End Historic District contains over 4,000 buildings of historic interest and has some of the most diverse neighborhoods in Newburgh. Delano-Hitch Recreational Park is 26-acres and includes a 2000-capacity baseball stadium, a soccer field, a softball diamond, and multiple little league baseball diamonds, tennis courts, and basketball courts. It also features an Aquatic Center, playgrounds, horseshoe pitches, a soccer/football field, the Fast Pitch Softball Hall of Fame, and the multipurpose Activity Center. Delano-Hitch Recreational Park

18 Appendix & Due Diligence Upon request, we can forward a secure web link with the below property and financial due diligence information for your review: - Concept Plans for Movie Theater/Retail Redevelopment - Concept Plans for Storage Redevelopment - Concept Plans for Various Other Redevelopment Options - Block & Lot Map (Survey) - Tenant Lease & Lease Amendment - Tenant Estoppel Certificate - Area Demographics - Video of Land Parcel. - Zoning Bulk & Other Regulations For More Information Contact Matthew Slonim Chief Operating Officer (212) Direct (212) Fax mslonim@besenassociates.com