Near Goderich Sale Price: $910,000. Near Kincardine Sale Price: $590,000. Near St. Marys Sale Price: $850,000. Emily Township Sale Price: $2,000,000

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1 1 Date of Sale: April 2002 Near Goderich Sale Price: $910,000 The 35.0 acres site has 1,331 feet of river frontage and is improved with a 172 site campground that features a 1,768 square foot house, a store/recreational building of 1,446 square feet, a 640 square foot washroom and laundry building, a 150 square foot washroom facility, a 432 square foot office building, a 288 square foot fifth wheel trailer, a 640 square foot maintenance shed, a 20 x 40 in ground pool, a 144 square foot mobile home, a children s play area, a sports field and a ball diamond. This park is located adjacent to a river. Transfer of Shares. Site Size (Sq.Ft.): Gross Income Multiplier: 4.55 No. of Units: 172 Overall Capitalization Rate: 10.8% Sale Price Per Unit: $5, Date of Sale: April 2001 Near Kincardine Sale Price: $590,000 The acre site is improved with a 185 site campground that features a 653 square foot washroom building, a 782 square foot workshop, a 147 square foot laundry building, a 20 x 40 swimming pool, a 288 square foot washroom and pumphouse, a 453 square foot recreation hall, a mobile home of 1,083 square feet, a mobile home of 1,344 square feet, a shuffleboard court, a beach volley ball court, a basketball court and horseshoe pits. Sold on the MLS System as real estate. Site Size (Sq.Ft.): Gross Income Multiplier: 3.82 No. of Units: 185 Overall Capitalization Rate: 11.68% Sale Price Per Unit: $3, Date of Sale: February 2002 Near St. Marys Sale Price: $850,000 The 50 acre park contained a 194 site campground that included a combination living quarters/recreational hall, store and washroom building, a swimming pool, an open pavilion, maintenance shed, shuffleboard courts, horseshoe pits. Sold through the MLS system as real estate. Site Size (Sq.Ft.): Gross Income Multiplier: 4.10 No. of Units: 194 Overall Capitalization Rate: 12.9% Sale Price Per Unit: $4, Date of Sale: October 2000 Emily Township Sale Price: $2,000,000

2 The acre was improved with a 400 site campground that included a 1,380 square foot home, a shower/bathroom building, a cottage of 860 square feet, a 7,430 square foot recreational hall, a basketball court, an eighteen hold mini-golf course,, shore frontage along the Pigeon River, a pond with a beach area, recreational hall in poor repair, a swimming pool, hot tub, two washroom buildings and a 5.5 acre pond for swimming and fishing including a beach and docking and a boat launch. The park was on a septic/holding tank system.. This is a premium park. Sold through the transfer of shares. Site Size (Sq.Ft.): Gross Income Multiplier: 3.09 No. of Units: 400 Overall Capitalization Rate: 10.8% Sale Price Per Unit: $5, Date of Sale: October 2001 Wheatley Sale Price: $1,500,000 The 58.0 acre was improved with a 324 site campground that included 6 playgrounds, one baseball diamond, one soccer field, two basketball courts, two shuffle board courts, one volleyball court, two badminton areas, one croquet area, hiking trails, one horseshoe pit, 1200 feet of beach frontage, cabins, a store, a workshop, a laundry room, a picnic shelter building, a gate house, washroom buildings and a water treatment building. The park was on municipal water. The park was on a /holding tank and septic tank system.. Sold through a transfer of shares. Site Size (Sq.Ft.): Gross Income Multiplier: 3.66 No. of Units: 324 Overall Capitalization Rate: 11.7% Sale Price Per Unit: $4, Date of Sale: May 2002 Port Franks Sale Price: $900,000 The acre was improved with a 308 site campground that included a 6,840 square foot multi-function store, office, etc, two swimming pools, a playground, horseshoes, a volley ball court, and a shuffleboard court.. Sold through the transfer of shares. Some motivation was involved in this sale. The park was on septic tank and beds. There were only 202 sites deemed usable in the park. Site Size (Sq.Ft.): Gross Income Multiplier: 2.14 No. of Units: 202 Overall Capitalization Rate: 13.2% Sale Price Per Unit: $4,455.45

3 Index Date of No. of Sale Price Cap. Address Sale Price G.I.M. No. Sale Units Per Unit Rate 1 April 2002 Goderich 172 $910,000 $5, % 2 April 2001 Kincardine 185 $590,000 $3, % 3 February 2002 St. Marys 194 $850,000 $4, % 4 October 2000 Emily 400 $2,000,000 $5, % 5 October 2001 Wheatley 324 $1,500,000 $4, % May Port Franks 202 $900,000 $4, % Description of Improvements The subject property is improved with a 187 site campground with 25 extended stay sites(10 months) with 30 ampere, water and sewer, 14 transient sites with 30 to 50 ampere, water and sewer, 86 seasonal sites with 30 ampere service, water and sewer, two cabins(1@583 square feet and square feet), 20 tenting sites, 7,539 square foot workshop/recreational hall/store/office/pool building, a 2247 s quare foot house with an attached 575 square foot garage and 60 illegal seasonal sites that have 15 to 50 ampere service with water and sewer but can be used for transient sites only. The campground offers swimming in a 27 acre lake that is 15 feet deep, a sports court, a 20 foot x 50 foot swimming pool with a hot tub, a soccer field, a badminton area, a playground, horseshoes, arcade games, hiking and fishing. Scoring of the Index Properties The following is the rationale for scoring the index properties. General Location This variable is referencing the general community or area in which the indexes are located. Index #1 was given a score of 5 because it is located near a good river and is close to some major communities. Index #2 was given a score of 3 for average. It was in an area that was somewhat isolated even though it was located south of Kincardine and near a golf course and not far from Lake Huron. Index #3 was given a score of 5 for good because it is location near St. Marys and Stratford. Index #4 was given a score of 4 which is slightly above average. This park is located in the

4 Kawarthas but far from major communities. Index #5 was given a score of 3 despite the fact that it is outside of Wheatley. The area is rather desolate. Index #6 was given a score of 4 for above average because it is located in the Port Franks/Grand Bend area which is a favourite resort area. Use Potential This variable is concerned with the uses of the comparables. Use Potential is a reflection of municipal land use policy in the form of a zoning by-law. All the indexes were given a score of 3 each. They all had the potential to be improved with a campground use. Gross Income This variable is referencing the amount of gross income being generated by the comparable sales. The average gross income was $339,824. Indexes #1 and #3 had gross incomes that were below the average and were given a score of 2 each. Index #2 had a gross income that was lower than Indexes #1 and #3 and was given a score of 1. Index #4 had the largest gross income and it was given a score of 6. Index #5 had a gross income that was slightly above the average and was given a score of 4. Index #6 was given a score of 5 because its gross income was above the average. Adjacent Water This variable is reflecting the close proximity to a natural water source other than a swimming pool. If the Index was located near a natural water source it was given a score of 5. If the Index was not located near a natural water source it was given a score of 3. Indexes #1, #4 and #5 are located near water and were given a score of 5. Every other index was given a score of 3 with the exception of Sales #2 and #6. These latter two sales were given scores of 4 each. House This variable is reflecting the differences between campground that have a house or some other type of accommodations for the owner. A house is a definite asset to a campground. If a campground had a house it was given a score of 5. If the campground had a trailer it was given a score of 3. If the campground had an apartment for the owners it was given a slightly higher score. Indexes #1 and #4 had houses and were given scores of 5 each. Index #2 had a trailer for the owners and was given a score of 3. This would be similar to Index #6. Index #3 had an apartment for the owners use and this sale was given a score of 4. Index #5 was given a score of 1 because the owners had a cottage to live in. This sale was given a score of 3.

5 General Amenities This variable is ascertaining if there is a relationship between the overall amenities that are within the parks such as a swimming pool and other recreational activities. Indexes #1, #3, #6 and #7 were given scores of 3 each. Index #2 had very little amenities and was given a score of 1. Index #4 had lots of amenities and was given a score of 5. Quality Score Weighing The scoring of the variables ( ) is based upon two factors: b. Judgement. b. The average of one of the variables (gross income). The different scores of the variables ( ) produce a weight for each of the variables. This weight is in effect the importance that each of the variables played in determining the adjusted selling price per site of the comparable indexes. These weights are expressed as a percentage. These weights are determined by using a Mathematical Solver program that is specifically designed to calculate the lowest difference between two numbers. The solver is calculating the optimum weight for each variable that represents the lowest difference between the selling prices of the indexes. An adjusted selling price per unit of comparison is known as the Adjusted Price Per Point Per Site because these weights are multiplied by each score ( ) of the variables, then added together, and divided into the selling price per site of each index. Commentary about the Weights Extracted from the Comparable Indexes The weights that are extracted from the sales indicate that the most important was General Location, Gros s Income, Adjacent to Water and General Amenities. This seems to make some sense considering the nature of campgrounds. All of the weights would add up to 100%. The weights can be viewed on the Quality Point spreadsheet located within the Income Approach Section of this report. Testing the Quality Point (QP) The valuer has scored ( ) the variables of each index and has used a Solver to aid in calculating an adjusted selling price per site per point. Even though the Solver program produces an adjusted selling price per point per site, the valuer does not know if this adjusted selling price per point per site is accurate since they were based upon judgement. The values does not know if the adjustments ( ) are correct. In order to determine whether or not the valuer made the correct choices in the scoring of the

6 variables, a test called a Residual Test will be performed. Residual means left over. The residual or left over will be the difference between the actual selling price of the comparable indexes and their predicted price. This Residential Test is shown on the spreadsheet as the Prediction Residual Analysis. If there is too much residual or left over between the selling prices of the indexes and their predicted selling prices than the scores ( ) and the adjusted selling price per point per site range are incorrect. However, this needs to be qualified and can reflect the type of property that is under appraisement as well as the differences between the units of comparison of the indexes. The testing process for the QP is extremely important because not all the scoring is based upon a mathematical average of the various attributes. Dr. Whipple who teaches out of Curtin University in Australia said it best about the residual analysis of the QP model. Finally, residual analysis is a most important component of the technique. The assumption underlying the sales comparison approach is that recent buyer behaviour toward comparable sold properties will be the same as for the subject property. Residual analysis shows how well the model replicates the prices fetched for the comparable. If the replication is good, then the expectation is that it will produce an acceptable prediction of price for the subject property if the analogy has been validly constructed. Few valuers test the logic they adopt on actual transactions-this method allows them to do so and is a most desirable feature. The ultimate test of any method is the extend to which it produces results consistent with reality : Property Valuation and Analysis, The Law Book Company Limited, Since the weights produced by the Solver are directly related to the predicted scores of the indexes it is important to review the weighted outcomes of the QP model. On the opposite page is the Quality Point Rating Analysis Grid. After the predicted index prices of the indexes were determined, the results were compared to their actual selling prices. The results are shown below: Index No. Selling Price Per Site(After Quantitative Adjustments) Predicted Selling Price Per Site Variance 1 $5, $5, % 2 $3, $ % 3 $4, $4, % 4 $5, $5, % 5 $4, $4, % 6 $4, $4, % The QP Model predicts the value of the six indexes within 0.75% to 4.03%. Considering the type

7 of indexes that was used in the report, the results are within acceptable valuation parameters and could not be obtained by the traditional Direct Comparison Approach to Value(paired-indexes, superior/ similar/inferior) methods of adjustments. Since the scoring of the indexes has predicted a value for each sale (2.79% on average), then the same scoring method can be applied to the subject property for a prediction of value.