HENDRY REAL ESTATE SUMMARY APPRAISAL REPORT. Winter Garden Business Park Winter Garden Vineland Road Winter Garden, Orange County, FL 34787

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1 SUMMARY APPRAISAL REPORT Winter Garden Business Park Winter Garden Vineland Road Winter Garden, Orange County, FL KRETS File #: KEYW For Jackson Walker LLP

2 SUMMARY APPRAISAL REPORT Winter Garden Business Park Winter Garden Vineland Road Winter Garden, Orange County, FL KRETS File #: KEYW For Jackson Walker LLP 901 Main Street Suite 6000 Dallas, TX Attention Mr. Randy A. Racine Effective Date of Appraisal: December 16, 2009 Date of Inspection: December 16, 2009 Date of Report: December 31, 2009 Copyright 2009 by Hendry Real Estate All rights reserved. HENDRY REAL ESTATE ADVISORS, INC W. Cass Street Tampa, Florida (813) i

3 APPRAISERS BROKERAGE CONSULTANTS PROPERTY MANAGEMENT Haynes T. Hendry, MAI, President 1102 W. Cass Street State-Certified General Appraiser #RZ839 Tampa, Florida (813) , Ext. 229 (813) Fax (813) Cell December 31, 2009 Jackson Walker LLP 901 Main Street Suite 6000 Dallas, TX Attention: Mr. Randy A. Racine Re: Winter Garden Business Park Winter Garden Vineland Road Winter Garden, Orange County, FL KRETS File #: KEYW File No.: Dear Mr. Racine: We have performed a summary appraisal report on the above-captioned property for the purpose of developing a prospective market value Upon Stabilization opinion and a market value As Is opinion of the leased fee interest. The property contains approximately 91,851 net rentable square feet contained in eight, industrial flex buildings. Of the 91,851 square feet, approximately 9,699 square feet is first generation shell space, 11,862 square feet is built out as retail space, and the remaining 70,290 square feet is industrial flex space with office build out ranging from approximately 40% to 90%. The subject is located on the west side of Winter Garden Vineland Road, just south of W. Colonial Drive (S.R. 50) in Winter Garden, Orange County, Florida. A complete legal description, further identification of the subject property, and a discussion of pertinent valuation influences may be found in the body of the following report. After considering the various factors and forces that influence the property under appraisement, we have concluded to the following market value opinion(s). The effective date of appraisal was December 16, ii

4 Market Value As Is Opinion HENDRY REAL ESTATE The Market Value As Is opinion reflects the current occupancy and condition of the subject property, as of December 16, 2009 (effective date of the appraisal), and represents the leased fee interest. The market data indicates exposure time of 12 to 18 months. Based on current conditions, we have estimated a marketing time for the subject of 12 to 18 months. SEVEN MILLION FIVE HUNDRED FIFTY THOUSAND DOLLARS ($7,550,000) Prospective Market Value Upon Stabilization Opinion (12/10-11/11) The Prospective Market Value Upon Stabilization Opinion represents the future leased fee value of the property upon economic stabilization or full occupancy. Stabilization is expected by December The market indicates an exposure time of 12 to 18 months and we have estimated a marketing time of 12 to 18 months. EIGHT MILLION SIX HUNDRED FORTY THOUSAND DOLLARS ($8,640,000) The attached appraisal is subject to and contingent upon certain extraordinary assumption(s)/hypothetical condition(s) that are outlined in the Assumptions and Limiting Conditions section of the following report. The attached appraisal was prepared in conformance with the Uniform Standards of Professional Appraisal Practice (USPAP) as promulgated by the Appraisal Standards Board of the Appraisal Foundation. It also complies with the reporting requirements of KeyBank National Association. Our analyses, opinions, and conclusions were developed, and this report has been prepared in conformity with (and the use of this report is subject to) the requirements of the Code of Professional Ethics of the Appraisal Institute. The use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representatives. This report and analyses comply with all the regulations issued by the appropriate regulatory entities, regarding the enactment of Title XI of the Financial Institution Reform, Recovery and Enforcement Act of 1989 (FIRREA) iii

5 The following report sets forth our reasoning, methodology, assumptions and limiting conditions, and conclusions. Should you have any questions regarding the following document, please contact Mr. Hendry. Respectfully submitted, HENDRY REAL ESTATE ADVISORS, INC. HTH/JRS Haynes T. Hendry, MAI President State-Certified General Appraiser #RZ iv

6 SUMMARY OF SALIENT FACTS HENDRY REAL ESTATE IDENTIFICATION Name of Property: Street Address: Location: Winter Garden Business Park Winter Garden Vineland Road W/s of Winter Garden Vineland Road, just S of Colonial Drive (SR 50) City/County/State/Zip Code: Winter Garden, Orange County, Florida Property Tax Identification No.: Census Tract #: Section/Township/Range: 26/22/27 (Orange County) PROJECT DATA Project Type: Multi-tenant Industrial Flex Business Park Year Built: Overall Occupancy: Net Rentable Area: Load Factor: Land Area: 83% - Based on December 16, 2009 Rent Roll Building 1 11,862 S.F. Building 2 14,652 S.F. Building 3 12,000 S.F. Building 4-12,613 S.F. Building 5 10,000 S.F. Building 6 10,000 S.F. Building 7 10,000 S.F. Building 8 10,724 S.F. Total 91,851 S.F. N/A 305,860 S.F. ( Acres) Net v

7 Zoning/Land Use: Density: Parking: PCD, Planned Commercial Development, by City of Winter Garden/ Commercial, by the City of Winter Garden.30 FAR 274 total spaces / 2.98 spaces per 1000 S.F. Flood Information: Zone X & A/ Map No C0215F / Dated September 25, 2009 Zone A: An area inundated by 100 year flooding, for which no base flood elevations have been established. Zone X: An area that is determined to be outside the 100- and 500-year flood plains. Interest Appraised: Leased Fee Highest and Best Use: As Vacant : As Improved : Hold until demand dictates development of industrial use Continue to market the vacant space and continued use as an industrial flex business park VALUATION DATA Effective Date of Appraisal: December 16, 2009 Date of Inspection: December 16, 2009 Date of Report: December 31, 2009 Date of Stabilization: December 2010 Exposure Time: Marketing Period: 12 to 18 months 12 to 18 months vi

8 VALUE CONCLUSIONS Prospective Market Value Stabilized Value Opinion: $8,640,000 Prospective Market Value Stabilized Value Opinion per S.F.: $94.07 Market Value As Is Opinion: $7,550,000 Market Value As Is Opinion per S.F.: $82.20 INCOME APPROACH DATA - (December 2010 November 2011) Projected Effective Gross Income: $1,089,373 Projected Expenses: $290,164 Projected NOI: $799,209 Projected Occupancy: 90% Capitalization Rate: 9.25% Discount Rate: 11.00% vii

9 T A B L E O F C O N T E N T S HENDRY REAL ESTATE Title Page i Letter of Transmittal ii Summary of Salient Facts v Certificate of Appraisal 1 Assumptions and Limiting Conditions 4 Extraordinary Assumptions 6 Hypothetical Assumptions 8 Introduction 9 Identification of Subject Property 9 Personal Property Statement 9 Client 9 Intended Use of Appraisal 9 Intended User of Appraisal 9 Purpose and Date of Appraisal 9 Interest Appraised 10 Scope of Appraisal 10 Competency Statement 11 Definition of Market Value 11 Definition of Value As Is 12 Definition of Leased Fee Estate (Interest) 12 Definition of Reasonable Exposure Time 12 Definition of Reasonable Marketing Period 13 Legal Description 13 History of Subject Property 13 Assessment and Taxes 14 Exposure Time/Marketing Period 14 Most Likely Buyer/Most Likely User 15 Area Description 16 Orlando Industrial Marketbeat Report 19 Area Map 21 Neighborhood Description 22 Overview 22 Access 22 Land Uses and Trends 22 Demographics 24 Existing Competition 25 Future Competition 25 Concurrency 25 Location Map 27 Property Description viii

10 Site Overview 28 Improvements Overview 30 Highest and Best Use 32 Subject Property Exhibits 33 Valuation Procedure 53 Valuation Methodology 54 Sales Comparison Approach 55 Improved Comparables 56 Improved Comparables Summary and Adjustment Grid 64 Improved Comparables Map 65 Analysis of Improved Comparables 66 Explanation of Adjustments 66 Conclusion 68 Income Capitalization Approach 69 Rent Comparables 70 Rent Comparables Summary 81 Rent Comparables Map 84 Analysis of Rent Comparables 85 Analysis of Rent Roll 87 Absorption 87 Expense Reimbursement Revenue 88 Vacancy and Collection Loss 89 Explanation of Expenses 89 Fixed Expenses 89 Variable Expenses 90 Industrial Expense Comparables Summary 92 Discounted Cash Flow Analysis 93 Terminal Capitalization Rates 95 Band of Investment 96 As Is Cash Flow Excluding Entrepreneurial Incentive 99 As Is Present Value Table Excluding Entrepreneurial Incentive 101 Summary 103 Prospective Market Value Upon Stabilization Opinion Analysis 104 Prospective Stabilized Cash Flow 105 Prospective Stabilized Present Value Table 107 Reconciliation and Final Value Opinions ix

11 Individual Tenant Cash Flows Rent Roll Engagement Letter/Appraisal Guidelines Qualifications of Haynes T. Hendry, MAI Qualifications of Jason R. Schultz A D D E N D A HENDRY REAL ESTATE x

12 CERTIFICATE OF APPRAISAL HENDRY REAL ESTATE We (I) certify that, to the best of our (my) knowledge and belief: 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 are (is) our (my) personal, impartial, unbiased professional analyses, opinions, and conclusions. We (I) have no present or prospective interest in the property that is the subject of this report, and we (I) have no personal interest or bias with respect to the parties involved. We have no bias with respect to the property that is the subject of this report or to the parties involved with this assignment. Our (my) engagement in this assignment was not contingent upon developing or reporting predetermined results. Our (my) 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. Our (my) analyses, opinions, and conclusions were developed, and this report has been prepared in conformity with (and the use of this report is subject to) the requirements of the Code of Professional Ethics of the Appraisal Institute and the Uniform Standards of Professional Appraisal Practice (USPAP) as promulgated by the Appraisal Standards Board of the Appraisal Foundation. The use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representatives. This report and analyses comply with all the regulations issued by the appropriate regulatory entities, regarding the enactment of Title XI of the Financial Institution Reform, Recovery and Enforcement Act of 1989 (FIRREA). Except as noted herein, no one has provided significant professional assistance to the person(s) signing this report. No individuals other than the undersigned prepared the analyses, conclusions, and opinions concerning real estate that are set forth in this appraisal report

13 The value opinion(s) in this report were not based on a requested minimum valuation, a specific valuation, or for the approval of any loan. The value opinion(s) contained in this report in no way represent a guarantee of the values and are merely opinions based on market data collected at the time of this appraisal. Our (my) analyses, opinions, and conclusions were developed and this report has been prepared in conformance with the standards and reporting requirements of Key Bank National Association. Haynes T. Hendry, MAI and Jason R. Schultz have made a personal inspection of the property that is the subject of this report and have considered all known or discoverable factors considered to affect the value thereof. Based on the effective date of appraisal, December 16, 2009 we have concluded to the following market value opinion(s). Market Value As Is Opinion The Market Value As Is opinion reflects the current occupancy and condition of the subject property, as of December 16, 2009 (effective date of the appraisal), and represents the leased fee interest. The market data indicates exposure time of 12 to 18 months. Based on current conditions, we have estimated a marketing time for the subject of 12 to 18 months. SEVEN MILLION FIVE HUNDRED FIFTY THOUSAND DOLLARS ($7,550,000) Prospective Market Value Upon Stabilization Opinion (12/10-11/11) The Prospective Market Value Upon Stabilization Opinion represents the future leased fee value of the property upon economic stabilization or full occupancy. Stabilization is expected by December The market indicates an exposure time of 12 to 18 months and we have estimated a marketing time of 12 to 18 months. EIGHT MILLION SIX HUNDRED FORTY THOUSAND DOLLARS ($8,640,000)

14 As of the date of this report, Haynes T. Hendry, MAI, has completed the requirements of the continuing education program of the Appraisal Institute and is currently certified under the Florida State Certification Program for appraisers. Mr. Hendry is also certified under the Georgia State Certification Program. Certified by, HENDRY REAL ESTATE ADVISORS, INC. Haynes T. Hendry, MAI President Certificate No State-Certified General Appraiser #RZ839 Jason R. Schultz Associate Appraiser Florida State Certified General Appraiser #RZ

15 ASSUMPTIONS AND LIMITING CONDITIONS HENDRY REAL ESTATE This appraisal report has been made with the following general assumptions: 1. No responsibility is assumed for the legal description or for matters including legal or title considerations. Title to the property is assumed to be good and marketable unless otherwise stated. 2. The property is appraised free and clear of any or all liens or encumbrances unless otherwise stated. 3. Responsible ownership and competent property management are assumed. 4. The information furnished by others is believed to be reliable. However, no warranty is given for its accuracy. 5. All engineering is assumed to be correct. The plot plans and illustrative materials in this report are included only to assist the reader in visualizing the property. 6. It is assumed that there are no hidden or unapparent conditions of the property, subsoil, or structures that render it more or less valuable. No responsibility is assumed for such conditions or for arranging for engineering studies that may be required to discover them. 7. It is assumed that there is full compliance with all applicable federal, state, and local environmental regulations and laws unless noncompliance is stated, defined, and considered in the appraisal report. 8. The date of value to which the opinions in this report apply is set forth in the letter of transmittal. The appraiser assumes no responsibility for economic or physical factors occurring at some later date, which may affect the opinions, stated herein. 9. It is assumed that all applicable zoning and use regulations and restrictions have been complied with, unless nonconformity has been stated, defined, and considered in the appraisal report. 10. It is assumed that all required licenses, certificates of occupancy, consents, or other legislative or administrative authority from any local, state, or national government or private entity or organization have been or can be obtained or reviewed for any use on which the value opinion contained in this report is based

16 11. It is assumed that the utilization of the land and improvements is within the boundaries or property lines of the property described and that there is no encroachment or trespass unless noted in the report. 12. Subsurface rights (minerals and oil) were not considered in making this report unless otherwise stated. 13. The tracts according to survey, map or plat, indicate riparian rights and/or littoral rights are assumed to go with the property unless easements or deeds of record were found by the appraiser to the contrary. 14. Unless otherwise stated in this report, the existence of hazardous material, which may or may not be present on the property, was not observed by the appraiser. The appraiser has no knowledge of the existence of such materials on or in the property. The appraiser, however, is not qualified to detect such substances. The presence of substances such as asbestos, urea-formaldehyde foam insulation, or other potentially hazardous materials may affect the value of the property. The value opinion is predicated on the assumption that there is no such material on or in the property that would cause a loss in value. No responsibility is assumed for any such conditions or for any expertise or engineering knowledge required to discover them. The client is urged to retain an expert in this field, if desired. This appraisal report has been made with the following general limiting conditions: 1. The distribution, if any, of the total valuation in this report between land and improvements applies only under the stated program of utilization. The separate allocations for land and buildings must not be used in conjunction with any other appraisal and are invalid if so used. 2. Possession of this report, or a copy thereof, does not carry with it the right of publication. It may not be used or relied upon for any purpose by any person or party, other than the party or client to whom it is addressed and prepared for, without the written consent of the appraiser; and in any such event only with proper written qualification(s) and only in its entirety. The appraisal is not intended to influence any third party s investment decisions. 3. It should be noted that the appraiser has no ability to predict future events. Our estimates of market value as of future dates are based upon known supply and demand conditions existing in the current market. However, it is the nature of risk in the real estate industry that such highly volatile and unpredictable factors as supply (new construction) and demand (absorption rates) can fluctuate, exerting measurable upward/downward pressure on market value over the course of time. Other influences on value include changes in national economic conditions, tax or interest

17 rates. The appraisal opinions contained in this report in no way represent a guarantee of the values and are merely opinions based on market data collected at the time of this appraisal. 4. The appraiser herein by reason of this appraisal is not required to give further consultation, testimony, or be in attendance in court with reference to the property in question unless arrangements have been previously made. 5. Neither all nor any part of the contents of this report (especially any conclusions as to value, the identity of the appraiser, or the firm with which the appraiser is connected) shall be disseminated to the public through advertising, public relations, news, sales, or other media without the prior written consent and approval of the appraiser. 6. In the event of a claim against Hendry Real Estate, or their respective officers or employees or the Appraisers in connection with or in any way relating to this Report or this engagement, the maximum damages recoverable shall be the amount of the monies actually collected by Hendry Real Estate for this Report and under no circumstances shall any claim for consequential damages be made. Extraordinary Assumptions 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. Source: Dictionary of Real Estate Appraisal, Fourth Edition, Page 107. Information regarding the subject property as well as relevant market information was furnished by the following individual(s): Name/Phone Relation Information Supplied Rory Williams (407) Leasco Management Company Site inspection, Leases, Historical Operating Data, Survey, Site Plan, etc. Data furnished by the above source(s) is deemed reliable. Any inaccuracies in this information will void our market value opinion. 1. The roofs on the subject building(s) are approximately 2 to 4 years old. A property condition report was requested but not provided. Our roof inspection consisted of ground level observations and we observed the roofs to be in average condition. The appraisers observed no leaks or evidence of prior leaks and we assume the roofs are

18 in acceptable condition with useful life remaining. We are not roofing contractors and we recommend a reputable roofing contractor inspect the subject property. Should the roof condition be other that what we have observed, our value opinion is void. 2. A property condition was requested but not provided. Our physical inspection consisted of interior and exterior observations and we observed the HVAC system to be in working average condition. We are not HVAC contractors and we recommend a reputable HVAC contractor inspect the subject property. We assume that all HVAC systems are adequate and up to code. Should the HVAC system s condition be other that what we have observed, our value opinion is void. 3. We assume no responsibility for hidden or unapparent conditions beyond the area of our expertise as appraisers. No adverse conditions were noted at the time of inspection and we assume that the site is suitable for development. We suggest any party contemplating buying or lending money on the subject have an environmental study conducted due to the onerous impact of environmental problems. A soil study was not provided, but our visual inspection noted no suspicious elements. This appraisal assumes that the subject property is free of all contamination. If any contamination is found on the subject site, our value opinion is void. 4. The Americans with Disabilities Act ( ADA ) became effective January 26, We have not made a specific compliance survey and analysis of this property to determine whether or not it is in conformity with the various detailed requirements of the ADA. It is possible that a compliance survey of the property, together with a detailed analysis of the requirements of the ADA, could reveal that the property is not in compliance with one or more of the requirements of the Act. If so, this fact could have an adverse effect upon the value of the property. 5. The values assume that there are no sinkholes or settling problems on the property as there were none reported at the time of inspection. If this information is incorrect, our value opinion is void. 6. Our perceptions and value opinions assume current market conditions as of the effective date of the appraisal. If market conditions change materially over their time horizon our value would be void. 7. This appraisal assumes that there are no delinquencies in rent payments and/or CAM charges. If any tenants are discovered to be delinquent, our value opinion is void

19 Hypothetical Conditions HENDRY REAL ESTATE 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. 1. None. Source: Dictionary of Real Estate Appraisal, Fourth Edition, Page

20 INTRODUCTION Winter Garden Business Park Winter Garden Vineland Road Winter Garden, Orange County, FL Identification of the Subject Property HENDRY REAL ESTATE The subject property contains approximately 91,851 net rentable square feet contained in eight, industrial flex buildings. Of the 91,851 square feet, approximately 9,699 square feet is first generation shell space, 11,862 square feet is built out as retail space, and the remaining 70,290 square feet is industrial flex space with office build out ranging from approximately 40% to 90%. The subject is located on the west side of Winter Garden Vineland Road, just south of W. Colonial Drive (S.R. 50) in Winter Garden, Orange County, Florida. Overall, the improvements are of average to good quality and in average condition. Personal Property Statement No personal property is included in our value opinions. Client The client is Jackson Walker LLP. The client is the only entity that may rely on the opinions of value set forth in this appraisal. Intended Use of Appraisal Our appraisal analysis and the following report are intended only for asset monitoring and finance decisions. Our appraisal analysis and the report are not intended for any other use. Intended User of Appraisal Intended user is defined as the client, and any other party as identified, by name or type, as users of the appraisal, consulting, or review report, by the appraiser based on communication with the client at the time of the assignment. Purpose and Date of Appraisal The purpose of this appraisal is to develop a market value As Is opinion of the subject for the leased fee interest and a Prospective Market Value Upon Stabilization opinion for the leased fee interest. The effective date of the appraisal was December 16,

21 Interest Appraised HENDRY REAL ESTATE The leased fee interest in the subject property has been appraised. Other liens and encumbrances, if any, have been disregarded and the subject property has been analyzed as if free and clear. Scope of Appraisal An inspection of the property occurred on December 16, 2009 and included examining the improvements, land and topography of the site, as well as the roads providing access to the site. We have gathered both state and local government information that was analyzed and presented in various sections of this report. A study of the subject neighborhood was also conducted regarding access, land uses and trends, concurrency, demographics, and competition. Once all the data was gathered, we analyzed the subject property with regard to its highest and best use As Vacant and As Improved. This involved considering what is legally permissible, physically possible, financially feasible and maximally productive for the subject property. Both primary and secondary data sources to include conversations with property managers, property owners and developers, local realtors and appraisers were used in the analysis of the subject property. Secondary sources were employed in gathering general information regarding the regional and local economy, land uses and trends, demographics, as well as data concerning current market supply/demand conditions and trends. This information consisted of investment surveys, newspaper articles, Internet web sites, etc. Primary data was gathered from subject property surveys and plans, operating pro forma reports, floor plans, and other related documents, and by a physical on-site inspection in order to evaluate the current status of the subject property. Various primary sources to include property owners, sellers, buyers, brokers, property managers, agents, appraisers, and government officials provided information regarding comparable sales, rents, and general data employed in this analysis. Data was used from comparable sales and rental properties. Sale comparables were obtained from public records, published sources and the local brokerage community, and each was inspected by the appraiser. All data was confirmed with the buyers, sellers, brokers or knowledgeable parties, who were involved with, or had knowledge of, the transaction or leasing information. It is the nature of risk in the real estate industry that such highly volatile and unpredictable factors as supply (new construction) and demand (absorption rates) can fluctuate, exerting measurable upward/downward pressure on market value over the course

22 of time. Other influences on value include changes in national and international and local economic conditions, tax or interest rates, as well as acts of terrorism. This is a summary report, and the Sales Comparison and Income Capitalization Approaches were used to develop market value opinions for the subject. The Cost Approach is not applicable for the valuation of the subject as market participants do not employ this technique when valuing older properties similar to the subject, due to the subjectivity involved with estimating depreciation. The Argus software program, a lease-by-lease analysis, was used in preparing a discounted cash flow analysis (DCF). No limitations restricted our use of the applicable appraisal methodology. Competency Statement The appraisers have significant experience in appraising the type of property noted and meet the competency requirements of the Uniform Standards of Professional Appraisal Practice (USPAP). Definition of Market Value The most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: 1. Buyer and seller are typically motivated; 2. Both parties are well informed or well advised, and each 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 U.S. dollars or in terms of financial arrangements comparable thereto; and 5. The price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale. Source: OCC, FDIC, USPAP

23 Important factors affecting market value include the time element, neighborhood and economic changes as well as anticipation thereof. Market prices do not necessarily follow all of these concepts and are often affected by salesmanship and the urgency and need of the buyer and/or the seller. At a given moment in time, market value is the most probable selling price subject to the aforementioned conditions while market price is the amount for which the property actually sells. The market value opinion of the property appraised in this report was developed based on investigations as of the date shown in the Certificate of Appraisal. Constantly changing economic conditions have varying effects upon real property values. Even after the passage of a relatively short period of time, property values may change substantially and require a review of the appraisal and recertification. Definition of Value As Is The value of specific ownership rights to an identified parcel of real estate as of the effective date of the appraisal; relates to what physically exists and is legally permissible and excludes all assumptions concerning hypothetical market conditions or possible rezoning. Source: Dictionary of Real Estate Appraisal, 4 th Edition (Chicago, 2002), p Definition of Leased Fee Estate (Interest) An ownership interest held by a landlord with the rights 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. Source: Dictionary of Real Estate Appraisal, 4 th Edition (Chicago, 2002) p Definition of 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. Exposure Time is always presumed to precede the effective date of the appraisal. However, exposure time is not intended to be a prediction of a date of sale or a one-line statement. Instead, it is an integral part of the analysis conducted during the appraisal assignment. The opinion may be expressed as a range and can be based on one or more of the following:

24 * statistical information about days on the market and the appraisal assignment * information gathered through sales verification; and interviews of market participants The Reasonable Exposure Time is a function of price, time, and use, not an isolated estimate of time alone. Exposure Time is different for various types of real estate and under various market conditions. Exposure Time differs from Marketing Period, which is the period of time estimated to sell a property interest in real estate at the estimated market value during the period immediately after the effective date of the appraisal. Source: Statement on Appraisal Standard No. 6, Appraisal Standards Board of The Appraisal Foundation, Adopted September 16, 1992, and Revised September 16, Definition of Reasonable Marketing Period Reasonable Marketing Period is an opinion of the amount of time it might take to sell a property interest in real estate at the concluded market value level during the period immediately after the effective date of an appraisal. Source: Advisory Opinion AO-7 of the Appraisal Standards Board of The Appraisal Foundation Legal Description Lot 1, Winter Garden Business Park, as recorded in Plat Book 62, Page 84, Public Records of Orange County History of the Subject Property The current owner of record is Winter Garden Business Park LLC. There have been no recorded transactions within the last three years. The property contains approximately 91,851 net rentable square feet contained in eight, industrial flex buildings. The improvements were constructed in According to the December 16, 2009 rent roll, the property has a physical occupancy of 83% It is reported that an independent third party will receive the deed in lieu of foreclosure by December 31, The specifics were not disclosed to the appraiser

25 Assessment and Taxes HENDRY REAL ESTATE The property is currently assessed for ad valorem taxes by Orange County. The County Commission sets the millage rate to be used in calculating the tax bill in September or October of each year. The County Tax Collector (407) issues the tax bills providing for a 4% discount for payment in November, a 3% discount for payment in December, a 2% discount for payment in January and a 1% discount for payment in February. All tax bills are delinquent after March 31 of the following year. The subject property is identified by the following tax number. The property is currently assessed as unimproved property. The corresponding 2009 assessment and taxes are illustrated as follows. Tax ID No Assessment Gross Taxes Improvements $3,394,544 Land $1,068,463 Tax Exemption $0 Sub total $4,463,007 $74, Special District $0 Total Gross Taxes w/o early payment $74, The subject is not encumbered by any special tax districts. The millage rate for the subject neighborhood is mills. According to the County Tax Collector s Office, the 2009 taxes are unpaid as of the effective date of report. There are no delinquent taxes associated with the subject property. Further discussion on the assessment and taxes is found in the Income Capitalization Approach section. Exposure Time/Marketing Period Exposure Time is a commonly misunderstood term. Exposure Time measures the amount of time a property must be exposed to the market prior to the effective date of value to consummate a sale. In this case, the effective date of value is December 16, Thus, the Exposure Time estimates the amount of time in the immediate past that the property would need to be exposed to the marketplace (i.e. on the market) prior to being sold and closed at the value opinions derived in the report. It is noted that the Exposure Time estimate encompasses the time necessary to properly market the property for sale to the general public, putting together proper offering memoranda on the property (and circulating the information to appropriate parties), achieving a contract (written offer), allowing for a proper due diligence period (property inspections, appraisal, securing financing, etc.), and finally achieving the closing and transfer on the property. The sales comparables in the subject s market area indicated exposure times of up to 12 months or less. However, based on historical market data and discussions with real estate professionals in the subject s market

26 area, we have estimated an Exposure Time for the subject of 12 to 18 months at the market value opinions provided in this report. On the other hand, the Marketing Period measures the amount of time it may take to sell a property during the period immediately after an effective date of value. Thus, the Marketing Period is usually more relevant to the intended user of the appraisal report as it measures the amount of time necessary to achieve a sale of a property moving forward, rather than estimating the past time necessary to achieve a sale in the present (i.e. Exposure Time). Based on historical exposure times, trends in the market, estimated market values derived in this report, and our analysis as well as conversations with real estate brokers and developers active in the area, we have estimated a marketing period for the subject property to be 12 to 18 months. Most Likely Buyer/Most Likely User The most likely buyer of the subject property ( As Is ) would be either an investor, or group of investors, purchasing the property with the experience and financial acumen to market the existing vacant space and continue the operation and management of the business park. The most likely user of the subject property would be national, regional and/or local industrial/flex tenants

27 AREA DESCRIPTION Orlando Metropolitan Area HENDRY REAL ESTATE Introduction The Orlando metropolitan area has been defined by the United States Bureau of the Budget as one of the top 264 Metropolitan Statistical Areas (MSA) in the nation. It is located in the east-central section of Florida and encompasses an area of some 3,985 square miles, including areas in Lake, Orange, Osceola, and Seminole Counties. Its central location in the state is demonstrated by the following highway distances: Jacksonville 148 Miles (north) Daytona Beach 63 Miles (northeast) Atlantic Ocean 50 Miles (east) Miami 244 Miles (southeast) Tampa/St. Petersburg 80 Miles (southwest) Gulf of Mexico 85 Miles (west) Tallahassee 249 Miles (northwest) Orlando, Winter Park, South Seminole County, and Sanford are the primary centers of population, with Orlando being the major city. Development emphasis is increasing in north Seminole County as well as east, northwest, and southwest Orange County. Population Population figures indicate that Orange County had an approximate population of 2,138,587 persons in The Orlando MSA (Lake, Orange, Osceola, and Seminole Counties) contains an estimated 2,138,587 people in 2009 according to Site to Do Business. POPULATION TOTALS est. County % Chg. Ann. % Chg. Lake 152, , , , % 3.31% Orange 677, ,344 1,129,029 1,126, % 1.87% Osceola 107, , , , % 4.03% Seminole 287, , , , % 1.15% Orlando-Kissimmee MSA 1,224,852 1,644,561 2,133,842 2,138, % 2.23% Florida 12,937,926 15,982,378 19,119,225 19,021, % 1.48% Source: STDB.com It is important to note that the above population totals are considered estimates. An August 18, 2009, article from the Orlando Business Journal titled Florida s Population Drops discusses the trends in overall negative growth in the State of Florida, and city and

28 county populations may also show this decline once numbers are released. The article states this is the first decline in Florida s population since It also reports that the University of Florida Bureau of Economic and Business Research estimated the state s population slipped by 58,294 people, to 18,748,925 on April 1 [2009] from 18,807,219 in April This is significant and the article indicates this trend is most likely caused by the recession and housing market bust. Income The 2009 estimated per capita personal income for Orange County is $26,553, which is a 2.49% decrease since 2008 and is below the state of Florida s estimate. Per capita income figures are useful in showing trends over time, but are not necessarily good indicators of the economic position of a typical household. Per capita income is based on total income, which in turn is comprised of three components: earnings, transfer incomes (money received by individuals from programs such as social security Medicare and welfare), and dividends, interest, and rent. The following table illustrates the changes in per capita income for the counties in the Orlando Area MSA, the MSA, and the State. PER CAPITA INCOME Per Capita Per Capita Growth Growth Growth County Income 2008 Income 2009 Projection % % Lake 25,664 25,273 26, % -1.52% Orange 27,231 26,553 27, % -2.49% Osceola 20,742 20,797 21, % 0.27% Seminole 33,396 33,114 35, % -0.84% Orlando-Kissimmee MSA 27,398 26,918 28, % -1.75% Florida 27,867 27,128 28, % -2.65% Source: STDB.com Seminole County has the highest per capita income of the four counties that total the Orlando MSA followed by Orange County. Lake, Orange, and Osceola Counties have per capita income lower than the average for the state of Florida. Labor Force The total labor force in the Orlando MSA has decreased from 1,008,231 in 2008 to 957,132 in All areas have shown between a 3.74% and 5.81% decrease in job totals over the past year

29 The current outlook for the Orlando MSA economy is still considered imbalanced along with the national and global economies. A labor force status summary is presented as follows. County JOB TOTALS Job Sectors Rate Change Services Retail Const. Public Admin. Finance, Ins., R.E. Lake 117, , % 48.1% 12.6% 11.3% 5.4% 6.3% Orange 550, , % 53.1% 11.3% 8.2% 3.5% 8.3% Osceola 115, , % 56.3% 12.2% 9.5% 3.2% 6.0% Seminole 224, , % 47.6% 13.0% 9.0% 4.0% 10.2% Orlando-Kissimmee MSA 1,008, , % 51.6% 11.9% 8.9% 3.8% 8.2% Florida 8,338,337 7,892, % 48.1% 12.8% 8.9% 5.4% 8.6% Source: STDB.com The U.S. Department of Labor provides unemployment statistics for the United States, Florida, and the subject property s market as follows, which shows Orlando having a higher unemployment rate than the nation as a whole, due to the tourist driven economy (i.e. less travelers) and the overall economic climate. UNEMPLOYMENT RATE Dec-07 Mar-08 Jun-08 Sep-08 Dec-08 Mar-09 Jun-09 Oct-09 United States 4.90% 5.10% 5.60% 6.20% 7.20% 8.50% 9.70% 9.50% Florida 4.70% 5.00% 6.10% 6.90% 7.80% 9.60% 10.90% 11.20% Orlando MSA 4.30% 4.70% 5.70% 6.50% 7.80% 10.10% 10.90% 11.40% Orange County 4.20% 4.50% 5.60% 6.50% 7.80% 10.10% 10.90% 11.20% Source: U.S. Department of Labor The Orlando MSA has seen the unemployment rate increase approximately 90% (from 5.70% to 10.90%) between June 2008 and June The economy is still feeling recessionary pressures and unemployment levels have risen to the highest levels in decades. It is noted that the U.S. October 2009 unemployment figure is estimated to be 9.5%, which may indicate the beginning of a leveling off regarding unemployment. Summary Overall, the Orlando MSA is similar to the State of Florida. This location in the State of Florida is not immune to the downturn in the economy. Based on the condition of the residential housing sector and the glimpse of forthcoming increases in sales velocity coupled with decreases in housing prices have started the bottoming out process. Although this may be considered an uneven bottoming out process, it is a glimpse that the trough is underway. All sectors of this area have been affected by the global, national, and local economic climate. Overall, as with any real estate cycle, it is anticipated that a recovery will occur over the long term at a very slow and steady pace

30 ORLANDO INDUSTRIAL MARKETBEAT REPORT 2nd QUARTER 2009 Data compiled by Cushman & Wakefiled HENDRY REAL ESTATE Economy Over the last twelve months, the Orlando MSA remained firmly in the grip of the economic slump which began at the end of From May 2008 through May 2009, employment declined by 5.9%, or 64,200 positions. The construction industry experienced the largest percentage decrease in employment, down by 18.6% over the last twelve months, as development activity in both residential and commercial real estate continued to stagnate. The significant decrease in employment nearly doubled the market s unemployment rate, up 5.0 percentage points to 10.2%. The sustained deterioration of the job market and decline in consumer spending weighed heavily on the industrial real estate market over the last year causing tenant demand to plummet, pushing vacancy up and depressing rental rates. Overview Overall vacancy increased 3.5 percentage points from mid-year 2008 through midyear 2009 to 12.2%, which is reflective of the decline in the employment market and retail sales. Retail sales are projected to slide 10.2% in 2009 in the Orlando MSA, causing retailers to shrink inventories, in turn using less industrial space. Vacancy in office service space increased the most significantly since this time last year, up 6.8 percentage points to 20.0%. Warehouse/distribution vacancy rose 3.1 percentage points to 10.8%, while manufacturing inclined 3.2 percentage points to 12.5%. This increase in vacancy pushed the market-wide direct average asking rental rate down for the fourth consecutive quarter, to the lowest level in nearly four years. Since mid-year 2008, the rental rate declined $1.22 per square foot to $6.40 per square foot for all property types combined. The rental rate for manufacturing space decreased the most, down $2.29 per square foot over the last twelve months to $4.70 per square foot. As companies continued to downsize and lay off employees, tenant demand declined significantly. Overall absorption posted negative 946,646 square feet through the first six months of 2009 in comparison to the negative 44,745 square feet recorded during the same time period in The NW/Silver Star/Apopka submarket, which is heavily reliant on the housing market, recorded more than one-third of this negative absorption total. Additionally, leasing activity is down 36.8% over the same six-month period in 2008, totaling just over 1.2 million square feet thus far in The drop in tenant demand has also caused a significant pull back in development. During the first six months of 2009, 434,350 square feet of speculative projects were completed, less than one-quarter the square footage completed in the first half of Additionally, 333,300 square feet of speculative space was under construction as of the end of June 2009, down nearly one-third from the mid-year 2008 total

31 Market/Submarket Statistics The subject is located in the W Orange/Winter Garden submarket which has an overall physical occupancy rate of 92.9% with a average rental rate of $6.01/S.F. fro warehouse/distribution. The subject is primarily industrial flex and not distribution. Forecast Although job losses are expected to ease in the second half of 2009, the unemployment rate is projected to continue to climb into Until employers feel that the economy is on a path to recovery, they will be reluctant to hire new employees and expand their businesses. This will cause overall absorption to remain negative or flatten out over the remainder of the year while overall vacancy will continue to increase. Due to increasing vacancy and lack of tenant demand, rental rates will continue to decline

32 AREA MAP

33 NEIGHBORHOOD DESCRIPTION HENDRY REAL ESTATE Overview The defined subject neighborhood is delineated by the following boundaries: North Plant Street South The Florida Turnpike East S.R. 429 West S.R. 545 The predominant property types within the defined neighborhood are residential with supporting commercial and industrial facilities. The property is located in Census Tract No Access The subject has road frontage along Winter Garden Vineland Road, which is a two land undivided roadway with center turn lane that serves traffic operating north and southbound directions. The most recent available traffic count (2008) along Winter Garden Vineland Road, south of W. Colonial Drive was 9,893 daily (average annual daily count). The subject is just south of W. Colonial Drive which is a major east/west arterial. The most recent available traffic count (2008) along W. Colonial Drive, east of Avalon Road was 33,555 daily (average annual daily count). Access to the neighborhood is average. Significant nearby roads that impact the neighborhood s access include the following: SIGNIFICANT NEIGHBORHOOD ACCESS ROADS Name No. Lanes Direction of Travel Proximity to Subject Winter Garden Vineland Rd. 2-4 North/South Adjacent W. Colonial Dr. (S.R. 50) 5 East/West 0.10 mile north The Florida Turnpike 4-6 East/West (locally) 0.10 mile south S.R North/South 1.55 miles east Land Uses and Trends The subject neighborhood consists primarily of residential development with supporting commercial facilities concentrated along major thoroughfares

34 Residential Development Residential development within the neighborhood consists of single family homes, and multifamily condominiums and apartment complexes. The median housing value is $124,589 within a one mile radius, although that value increases to $227,780 at the three mile radius. This number includes the lakefront homes of Lake Apopka. The subject is located in an older section of Winter Garden, where residential neighborhoods are characterized by non-uniform lot sizes and home styles, as well as few stand alone developments. New residential developments are primarily being developed on the outskirts of Winter Haven to the north and south as there is still ample land available for development. We expect this trend to continue as this area continues to be developed with new residential and commercial facilities. Retail Development Retail development proximate to the subject is primarily concentrated along W. Colonial Drive with supporting office and retail facilities along Dillard St., Winter Garden Vineland Road, and Plant Street. Commercial uses in the area include grocery supermarkets, drug stores, home improvement, bank branches, freestanding retail, strip and neighborhood shopping centers. Major shopping centers in the neighborhood include the West Orange Shopping Center and The Winter Garden Village. Most of the major anchors of the region are represented in the area. Outside the subject s immediate neighborhood but nearby is the West Oaks Mall, in Ocoee, with over 120 stores including JCPenney, Belk, Sears and Dillard s department stores. Only a few miles away is the Mall at Millennia, a distinctive shopping destination with more than 140 shops, services and eateries. The Sembler Company recently opened the Winter Garden Village at Fowler Groves approximately 3 miles south of Winter Garden with a 1.15 million square foot open air shopping center located at the northeast quadrant of CR535 and SR 429. Employment Centers Employment centers are located primarily outside neighborhood boundaries and include the downtown area of Orlando as well as the Orlando Airport and the Walt Disney World Resorts. These facilities include Epcot, Downtown Disney, and The Magic Kingdom. The Orlando area is regarded as one of Florida s and the United States top tourist destinations and related facilities such as hotels, motels, malls, golf courses etc. are located throughout the area. Other major employment centers in the area include the University of Central Florida and the tourist area along International Drive. Recreation Centers Recreational facilities in the neighborhood are abundant and include numerous golf course and country club developments, municipal parks, recreation-size lakes, etc. Nearby

35 golf courses include Forest Lake Golf Club, Stoneybrook West Golf Course, and West Orange Country Club. These facilities are easily accessible due to the presence of major east/west arterials, including State Road 50, and the Florida Turnpike. The Walt Disney theme parks, SeaWorld, Universal Studios, MGM Grand and many tourist oriented shopping and resort facilities are located 9-14 miles south of the subject. Trends This area continues to show overall long term stability and growth, albeit at a much slower, measured pace; however, the current downturn in the economy will continue to have a negative impact in all sectors of real estate in the foreseeable future. Demographics Demographic information for the subject neighborhood was provided by Site to Do Business, (STDB). Pertinent details from this survey are summarized as follows. DEMOGRAPHIC SUMMARY Florida Orange County 1 Mile Radius (from subject) 3 Mile Radius (from subject) 5 Mile Radius (from subject) Population 2014 Projection 20,472,562 1,236,442 13,750 52,022 94, Estimate 19,021,613 1,126,939 11,630 43,211 81, Census 15,982, ,344 6,649 22,860 51,599 % Growth % Growth Households 2014 Projection 8,134, ,546 5,227 18,377 33, Estimate 7,543, ,574 4,423 15,229 28, Census 6,337, ,286 2,623 8,130 17,991 % Growth % Growth Income 2009 Est. Avg. HH Income $67,518 $70,131 $75,372 $97,482 $93, Est. Median HH Income $50,413 $53,862 $53,862 $66,318 $66, Est. Per Capita Income $27,128 $26,553 $28,808 $34,721 $32,801 Age 2009 Est. Median Age Est. Median Housing Value $144,752 $161,843 $124,589 $227,780 $216,409 Source: STDBOnline The foregoing table indicates an increasing population within a 3-mile radius 2009 and 2014 of 20.39%. Similarly, households within a 3-mile radius are expected to grow 20.67% within the same time frame. The projected population growth as a percentage is more than the expected population growth of both Orange County and the State of Florida. Median household income for the three mile radius is $66,318 which is above both Orange County and the State of Florida

36 Existing Competition HENDRY REAL ESTATE There are several competing facilities within the defined neighborhood and additional competition in tertiary areas. The following table summarizes pertinent characteristics of the surveyed facilities. SUMMARY OF RENT COMPARABLES Name Size Year Built Occupancy Quoted Rental Rates Winter Garden Business Park 91, % $5.00-$15.00/S.F., Triple Net Carter Commerce Center 49, % $6.00/S.F., Triple Net West Orange Business Center 90, % $12.00-$22.00/S.F., Triple Net West Oaks Commerce Park 12, % $10.00/S.F., Triple Net Apex Commerce Center 35, % $12.00/S.F., Triple Net Trailside Center 33, % $13.33-$21.00/S.F., Mod. Gross The comparable have rental rates range from $6.00 to $22.00 per square foot, triple net with occupancies ranging from 20% to 88%. The subject is located in the W Orange/Winter Garden submarket which has an overall physical occupancy rate of 92.9% with a average rental rate of $6.01/S.F. fro warehouse/distribution. The subject is primarily industrial flex and not distribution. The trend in rental rates is flat and the trend in occupancy is flat as well. Future Competition No other significant centers are planned in the subject s immediate area. Concurrency Concurrency is part of the Comprehensive Growth Management Act adopted in 1985 by the Florida Legislature under the title Local Government Comprehensive Planning and Land Development Regulation Act. The purpose of this law was to ensure that local government would implement planning programs to manage current and future growth. Although the Comprehensive Growth Management Plan and concurrency are statewide issues, each local government is required to implement its own concurrency management system (CMS). This CMS must provide for a systematic review of all development approvals including rezoning, site plan approval, subdivisions, building permits, and other land use requests to ensure the level of service for the specific public utilities and services will not be reduced by new development. In particular, these facilities and services include water, sewer, transportation, parks, schools, recreation, and fire capacity. The following table illustrates the status of local infrastructure

37 Service Status Verifying Source/Phone No. Water Adequate City of Winter Garden (407) Sewer Adequate City of Winter Garden (407) Traffic Adequate City of Winter Garden (407) Concurrency issues would not impact new development in this neighborhood

38 LOCATION MAP

39 PROPERTY DESCRIPTION HENDRY REAL ESTATE Site Overview The underlying site is located on the west side of Winter Garden Vineland Road, just south of W. Colonial Drive (S.R. 50) in Winter Garden, Orange County, Florida. Size and Dimensions Major Road Frontage: Secondary Road Frontage: Depth: Shape: Total Land Area: ± along Winter Garden Vineland Road None Varies Irregular 305,860 S.F. / Net Acres Topography and Drainage Proximity to road grade: Slope of site: Foliage: Drainage: Adequacy of drainage: Special features: Naturally level and at road grade Naturally Level Natural grasses Off-site Adequate None noted Soil and Subsoil We assume no responsibility for hidden or unapparent conditions beyond the area of our expertise as appraisers. No adverse conditions were noted at the time of inspection and we assume that the site is suitable for development. We were no provided with an environmental report for the subject property. This appraisal assumes that the subject property is free of all contamination. If it is discovered that any contamination is present on the subject site, our value opinion is void. Zoning Zoning District/Jurisdiction: PCD, Planned Commercial Development, by the City of Winter Garden Uses Permitted: Industrial, Commercial, Offices, Schools, Institutional, Cultural and allied uses Front Setback: 40 Side Setback: 20 Rear Setback:

40 Land Use HENDRY REAL ESTATE Minimum Lot Area: No minimum Maximum Density: Site Plan Specific Height Limit: 50 Parking Requirement: 3 parking spaces per 1000 S.F. of Gross Floor District: Uses Permitted: Are Zoning/Land Use Consistent: Commercial, by City of Winter Garden Various commercial uses including retail and office Yes HUD Flood Data Zone X & A/ Map No C0215F / Dated September 25, 2009 Zone A: An area inundated by 100 year flooding, for which no base flood elevations have been established. Zone X: An area that is determined to be outside the 100- and 500-year floodplains. Utilities Yes/No Provider Water: Yes City of Winter Garden Sewer: Yes City of Winter Garden Electric: Yes Florida Power Telephone: Yes Sprint/Embarq Police: Yes City of Winter Garden Fire: Yes City of Winter Garden Easements and Restrictions We were provided with a survey of the subject property. The usual utility, drainage and maintenance easements are in place. If any other unrecorded adverse easements are discovered on the subject site, our value opinion is void. EASEMENTS AND RESTRICTIONS Easement Location O.R. Book/Page No adverse easements identified

41 Surrounding Land Uses North: West Point Commons (Publix Anchored Shopping Center) South: The Promenade Apartments East: Resurrection Catholic Church West: Sure Save USA Self Storage Facility Concurrency Concurrency issues would not impact new development in this neighborhood. Improvements Overview General Details: Project Classification: Multi-tenant Industrial Flex Business Park Year Built: Net Rentable Area: Load Factor: Building 1 11,862 S.F. Building 2 14,652 S.F. Building 3 12,000 S.F. Building 4 12,613 S.F. Building 5 10,000 S.F. Building 6 10,000 S.F. Building 7 10,000 S.F. Building 8 10,724 S.F. Total 91,851 S.F. N/A No. of Stories: 1 Density: Parking Spaces: Quality: Condition: Chronological Age: 0.30 FAR 274 total spaces / 2.98 spaces per 1,000 S.F. Average to Good Average 2-4 years

42 Effective Age: Remaining Economic Life: Foundation/Floor System: Exterior Walls: Roof: Roof Inspection: Walkways: Windows and Doors: Interior Finish: Loading: Elevators: Electrical: HVAC: Site Improvements: Functionality: 2-4 years Years Reinforced concrete slab on grade. Concrete tilt-up walls. Flat roof. The roofs are original and approximately two to four years old. No Concrete Windows and entry doors are commercial grade impact resistant glass in aluminum frames. Interior finishes include metal and stud wall partitions with painted and papered drywall. Ceilings include suspended acoustical panels in a 4 x 2 grid with insulation above and recessed lighting. The spaces are customized depending on use. Grade level. No. Assumed adequate and in conformance with local codes. Individually metered tenant spaces. Individual HVAC per floor. Assumed to be adequate for each tenants use. Assumed adequate and in conformance with local codes. The site improvements include minimally landscaped areas and striped, lighted asphalt parking area. The improvements are functionally designed and accommodate a variety of industrial flex uses

43 Advantages/Disadvantages: Special Considerations: Highest and Best Use: The primary advantage for the subject is that the improvements are located proximate to major arterials, i.e. Colonial Drive, The Florida Turnpike, S.R. 429, which will allow for easy access to the subject neighborhood. A significant disadvantage associated with the subject property is the current road construction project underway which has Winter Garden Vineland Road closed just south of the subject. Numerous attempts were made to contact representatives of Orange County and FDOT for a status of the project, however, no information was provided. None. As Vacant : Hold for future development as demand dictates. As improved : Continued use as an industrial flex business park

44 SUBJECT PROPERTY EXHIBITS

45 AERIAL

46 SITE PLAN

47 SURVEY

48 FLOOD MAP

49 CENSUS TRACT MAP

50 Exterior Views of Subject

51 Exterior Views of Subject

52 Exterior Views of Subject

53 Exterior Views of Subject

54 View of Signage View of Parking Lot

55 Interior Views of Subject

56 Interior Views of Subject

57 Interior Views of Subject

58 Interior Views of Subject

59 Interior Views of Subject

60 Interior Views of Subject

61 Interior Views of Subject

62 Interior Views of Subject

63 North View on Winter Garden Vineland Road South View on Winter Garden Vineland Road

64 VALUATION PROCEDURE HENDRY REAL ESTATE The valuation of income producing real estate lends itself to application of the three traditional approaches to value; i.e., the Cost Approach, Sales Comparison Approach and Income Capitalization Approach. All of these techniques are market oriented, being premised upon actions and attitudes of typical market participants. The Cost Approach analyzes the relationship between value and cost as perceived by the investor. By applying this technique, the appraiser estimates the difference in worth to a buyer between the property under appraisement and a property with similar utility. The application of this approach involves estimating a number of individual components such as land value, reproduction or replacement cost, entrepreneurial profit, and the amount of accrued depreciation. This technique is most applicable when appraising relatively new or proposed construction with a limited amount of accrued depreciation; however, it is also useful (but less effective) when appraising older structures. The Sales Comparison Approach involves a detailed analysis and comparison of like properties, which were recently sold, contracted, or listed in the same or competitive market. When reduced to an appropriate unit of comparison, these transactions can be adjusted for pertinent differences such as, market conditions, financing, location and/or physical characteristics. If a sufficient number of sales are available, the resultant value indication is a reflection of the price the subject could command, recognizing the principle of substitution. The interpretation of a number of indications of market price should lead to a logical opinion of market value. The Income Capitalization Approach is typically the most reliable technique in valuing income-producing property because income considerations are the primary decision making parameter of market participants. In formulating a value opinion via this technique, consideration is given to potential income, expenses and the rate of return required by an investor in the prevailing market. Once the net income is established, it is then converted to value via the capitalization process. This technique analyzes the future benefits of ownership. The remaining step in the valuation process is to analyze the results of each approach by re-evaluating all pertinent data to arrive at a final conclusion of value. Although each of the techniques produces an independent indication of value, they are interrelated and integrated techniques, which are dependent upon the operation of market forces

65 Valuation Methodology HENDRY REAL ESTATE The Sales Comparison Approach and the Income Capitalization Approach were used to develop a market value opinion of the subject. With regard to the Cost Approach, industrial land sales are not available in the current market, thus the land value for the subject would be diluted. In addition, there is external obsolescence which further diminishes the validity of this technique. The subject property is relatively new construction; however, market conditions have deteriorated to the point that construction of a property type such as the subject would not be feasible at this time. No construction financing is available for industrial developments in this market, as the majority of comparables are operating at high historical vacancies. The comparison of the Income Capitalization Approach with only the construction costs (taken from Marshall and Swift, excluding the site) of a project such as the subject illustrates the inapplicability of this approach

66 SALES COMPARISON APPROACH HENDRY REAL ESTATE The Sales Comparison Approach involves a detailed comparison of the subject property to similar properties, which have recently sold in the same or competitive market. This approach is based primarily on the Principle of Substitution, which states that when several commodities or services with substantially the same utility are available, the lower price attracts the greatest demand and widest distribution. In other words, a prudent investor/purchaser would not pay more to acquire a given property in the market, considering that an alternative property may be purchased for less. The procedure used in the Sales Comparison Approach is as follows: 1. Research the market to obtain information relative to transactions (listings, sales, etc.) of properties similar to the subject. 2. Qualify the data as to terms, motivating forces, or bona fide nature. 3. Determine the relevant units of comparison, price per square foot, per unit, etc. 4. Compare the comparables to the subject and make adjustments to the comparable prices (or per unit prices) to account for differences such as location, physical characteristics, etc. 5. Reconcile between the value indications from the various comparables and analysis techniques to conclude a value indication for the subject. We have gathered comparables sales from the Orlando area. Those sales considered most pertinent to the valuation of the subject property are included on the following pages along with an identifying photograph. A summary and adjustment grid for the comparables follows the sales

67 IMPROVED COMPARABLE NO ADC XI 8420 Boggy Creek Road Orlando, Florida Date: 12/2009 Recording Data: Grantor: Grantee: Section/Township/Range: Listing DCT Orlando ADC LP N/A 31/23/30 (Orange County) Folio/Parcel # Sale Price: $5,558,598 Financing: N/A

68 Improvement Data: The property consists of one, rear-load, 24 clear, 154 deep industrial distribution building. Construction is tilt-up concrete panels with aluminum storefront framed, tinted glass entrances. Completed in Loading is dock high and includes Class IV fire protection system. Building Size (S.F.): 70,362 Year Built: 2008 Occupancy: 0% Exposure Time: Site Data (Acres)/SF: Density: Parking Ratio: Financial Information: Gross Income: Vacancy: EGI: Expenses: NOI: N/A 4.96 Acres 0.33 FAR 1.00 space per 1,000 S.F. N/A N/A N/A N/A N/A Per S.F. Units of Comparison: Price/S.F.: $79.00 OAR: N/A EGIM: N/A EDR: N/A NIM: N/A Adjusted Comments: Airport Distribution Center XI is located on the west side of Boggy Creek Road within the Airport Distribution Center which is a 630,000± S.F. master planned business park located adjacent to Orlando International Airport

69 IMPROVED COMPARABLE NO CROWNPOINTE FIVE 7320 Kingspointe Parkway Orlando, Florida Date: 2/2009 Recording Data: Instrument #: Grantor: Grantee: Section/Township/Range: McDonald CrownPointe V LLC Crownpointe Building LLC 20/23/29 (Orange County) Folio/Parcel # Sale Price: $9,374,632 Financing: Cash to seller

70 Improvement Data: The property consists of one, rear-load, 24 clear, 180 deep industrial building in Orlando s premier CrownPointe Commerce Park. Construction is tilt-up concrete panels with aluminum storefront framed, tinted glass entrances. Completed in 2007, CrownPointe FIVE (156,003) is one of the newest of the eight institutionally owned buildings in the park. Building Size (S.F.): 156,003 Year Built: 2007 Occupancy: 71% Exposure Time: Site Data (Acres)/SF: Density: Parking Ratio: N/A 9.36 Acres 0.38 FAR 136 Total Spaces / 0.87 spaces per 1,000 S.F. Financial Information: Per S.F. Gross Income: N/A Vacancy: N/A EGI: N/A Expenses: N/A NOI: $749,971 $4.80 Units of Comparison: Price/S.F.: $60.09 OAR: 8.00% EGIM: N/A EDR: N/A NIM: Adjusted Comments: CrownPointe Five is located at the northern terminus of Kingspointe Parkway, north of W. Sand Lake Road within CrownPointe Commerce Park of Orlando, Orange County, Florida. The property has exposure to, but no access from Florida's Turnpike. Financial information was reported by the broker and represents actual income at time of sale

71 IMPROVED COMPARABLE NO FED EX EXPRESS BUILDING 950 Bennett Road Orlando, Florida Date: 9/2008 Recording Data: O.R. Book 9777; Page 1977 Grantor: Grantee: Section/Township/Range: FE Orlando Investment LP Monmouth Real Estate Investment Corporation 20/22/30 (Orange County) Folio/Parcel # Sale Price: $8,276,800 Financing: Cash to seller

72 Improvement Data: This property consists of one, single-story light manufacturing office/warehouse building constructed of concrete block with glass panel entry doors and fixed pane windows set in aluminum. Approximately 11,000 S.F. (10%) is air-conditioned office and 100,153 S.F. (90%) is non air conditioned warehouse space. Loading via grade level and dock high. The clear ceiling height is 20'. Building Size (S.F.): 111,153 Year Built: 1997 Occupancy: 100% Exposure Time: Site Data (Acres)/SF: Density: Parking Ratio: < 6 Months Acres 0.25 FAR 3.13 spaces per 1,000 S.F. Financial Information: Per S.F. Gross Income: N/A Vacancy: N/A EGI: $622,947 $5.60 Expenses: 22, NOI: $600,716 $5.40 Units of Comparison: Price/S.F.: $74.46 OAR: 7.26% EGIM: EDR: N/A NIM: Adjusted Comments: This property is located on the west side of Bennett Road, just north of Colonial Drive (SR 50) in Orlando. The improvements are leased to FedEx Express. The lease began in November 2007 with a 10-year term. The lease rate in years 1-5 is $5.63/S.F., triple net, and increase to $6.02/S.F. in years FedEx Express has 2, 5-year options at market rates

73 IMPROVED COMPARABLE NO RESERVE AT MAITLAND 70 Keller Road Eatonville, Florida Date: 1/2008 Recording Data: O.R. Book 9712, Page 6242 Grantor: Grantee: Section/Township/Range: NNN Reserve at Maitland, LLC FDC Reserve at Maitland, LLC 34/21/29 (Orange County) Folio/Parcel # Sale Price: $39,560,000 Financing: Cash to Seller

74 Improvement Data: The improvements consist of an existing single-story 196,835 S.F. multi-tenant office facility comprised of three separate adjacent buildings, constructed in 2001 in above average condition. Construction consists of pre-cast concrete panel exterior walls with drywall interior wall finishes. Building Size (S.F.): 196,835 Year Built: 2001 Occupancy: 92% Exposure Time: Site Data (Acres)/SF: Density: Parking Ratio: N/A Acres 0.40 FAR Adequate Financial Information: Per S.F. Gross Income: N/A Vacancy: N/A EGI: N/A Expenses: N/A NOI: $2,571,400 $13.06 Units of Comparison: Adjusted Price/S.F.: $ OAR: 6.50% EGIM: N/A EDR: N/A NIM: Comments: This sale represents an existing, story-story, 196,835 S.F. multi-tenant professional office facility built in The property is located in the northwest quadrant of West Kennedy Boulevard and South Keller Road in Maitland. The sale was based on the income as part of a 1031 exchange and equated to a 6.50% cap rate with 92% occupancy

75 IMPROVED COMPARABLES SUMMARY - "AS IS" ANALYSIS Property: Winter Garden Bus. Park ADC XI CrownPointe Five FedEx Express Bldg Reserve at Maitland County: Orange Orange Orange Orange Orange City: Winter Garden Orlando Orlando Orlando Eatonville Date of Sale: December-09 December-09 February-09 September-08 January-08 Construction: Tilt-up Concrete Tilt-up Concrete Tilt-up Concrete CB Concrete tilt wall Year Built: Effective Age at Sale: Occupancy at Time of Sale: 83% 0% 71% 100% 92% Rentable Area (S.F.): 91,851 70, , , ,835 Land Area, Ac.: Density (FAR): Traffic Counts: 9,893 14,972 N/A 10,441 7,744 Sale Price: N/A $5,558,598 $9,374,632 $8,276,800 $39,560,000 Price/S.F.: N/A $79.00 $60.09 $74.46 $ NOI/S.F.: N/A N/A $4.81 $5.40 $13.06 EGIM: N/A N/A N/A N/A NIM: N/A N/A OAR: N/A N/A 8.00% 7.26% 6.50% Adjustments: Property Right Conveyed: Fee Simple Leased Fee Leased Fee Leased Fee 0% 0% 0% 0% Financing: Market Market Market Market 0% 0% 0% 0% Conditions of Sale: Listing Arm's Length Arm's Length Arm's Length -15% 0% 0% 0% Total Adjustment: -15% 0% 0% 0% Time Elapsed (months): Annualized Adjustment: -10% 0.000% % % % Total Adjustment: % % % % Time Adj. Price/S.F.: $67.15 $55.08 $65.16 $ Location: Average Superior Superior Superior Superior -5% -5% -5% -5% Exposure/Traffic: Average Similar Superior Similar Superior 0% -5% 0% -5% Traffic Light: No No No No No 0% 0% 0% 0% Corner: No Similar Similar Similar Superior 0% 0% 0% -5% Site Access: Average Similar Similar Similar Similar 0% 0% 0% 0% Area Accessibility: Average Similar Similar Similar Similar 0% 0% 0% 0% Configuration: Irregular Similar Similar Similar Similar 0% 0% 0% 0% Net rentable (S.F.) 91,851 70, , , ,835-5% 15% 5% 15% Age/condition: Average Similar Similar Inferior Inferior 0% 0% 10% 5% Quality: Average Similar Similar Similar Superior 0% 0% 0% -15% Density(FAR): % 0% 0% 0% Parking Ratio: % 15% 0% -10% Occupancy/Tenancy: 83% 0% 71% 100% 92% 20% 5% -10% -5% % Office/Warehouse: 30%/70% Inferior Inferior Inferior Superior 15% 15% 15% -15% Clear Height: 10'-16' 24' 24' 20' Similar -5% -5% 0% 0% Gross Adjustment: 65% 65% 45% 80% Net Adjustment S.F: 35% 35% 15% -40% Adjusted Price/S.F.: $90.65 $74.36 $74.93 $

76 IMPROVED COMPARABLES MAP

77 Analysis of Improved Comparables HENDRY REAL ESTATE The foregoing sales were utilized to estimate the Market Value As Is Opinion of the subject property. The unadjusted prices ranged from $60.09 to $ per square foot. The comparables required adjustments in the preceding grid and an explanation of the adjustments is presented in the following text. Property Rights Conveyed Explanation of Adjustments All of the comparable sales conveyed the right of the fee simple interest, thus no property rights conveyed adjustment was required. Financing Financing adjustments are typically required only when the seller provides financing that is favorable, relative to that available from disinterested third party lenders such as banks, savings and loans, etc. In this instance, all comparables involved cash or market financing, which had no influence on the purchase price; hence, no adjustments were warranted under this category. Conditions of Sale All sales except Comparable No. 1 involved typically motivated buyers and sellers acting in self-interest who were relatively well informed. These sales were considered to be arm s length, and no adjustments were warranted. Comparable No. 1 is a listing. We have adjusted this comparable downward by (-15%) to account for negotiations for a sale to take place. Market Conditions (Time) According to the 3 rd Quarter Korpacz Real Estate Investor Survey, the national flex/r&d market forecast for the next 12 months ranges from 25% to 5.00% with an average of 7.08%. Based on the aforementioned, we have made an annual downward time adjustment of (-10%) to Comparable Nos. 2 through 4. Comparable No. 1 is a current listing and was not adjusted. Adjustments We have summarized the various differences for each comparable in the following paragraphs

78 Comparable No. 1 is on the west side of Boggy Creek Road within the Airport Distribution Center which is a 630,000± S.F. master planned business park located adjacent to Orlando International Airport. This location is superior to the subject. This property is smaller in size and a downward adjustment was warranted. This property has a lower parking ratio compared to the subject and an upward adjustment was warranted. This property is vacant which required an upward adjustment. This property is primarily built-out as warehouse/distribution space which is considered inferior to the subject, thus, an upward adjustment was applied. This property has a higher clear height than that of the subject, thus a downward adjustment was warranted. The comparable is considered similar to the subject with regard to all the remaining variables and no further adjustments were required. Comparable No. 2 located at the northern terminus of Kingspointe Parkway, north of W. Sand Lake Road within CrownPointe Commerce Park of Orlando, Orange County, Florida. The location and exposure/traffic of this property are considered superior to that of the subject and downward adjustments were warranted. This property is larger in size and an upward adjustment was warranted. This property has a lower parking ratio compared to the subject and an upward adjustment was warranted. This property had an occupancy of 71% at time of sale which required an upward adjustment. This property is primarily built-out as warehouse/distribution space which is considered inferior to the subject, thus, an upward adjustment was applied. This property has a higher clear height than that of the subject, thus a downward adjustment was warranted. The comparable is considered similar to the subject with regard to all the remaining variables and no further adjustments were required. Comparable No. 3 is located on the west side of Bennett Road, just north of Colonial Drive (SR 50) in Orlando. The location is considered superior to that of the subject and a downward adjustment was warranted. This property is larger in size and an upward adjustment was warranted. This property was built in 1997 and is considered inferior to the subject in age/condition; therefore an upward adjustment was applied. This property is primarily built-out as warehouse/distribution space which is considered inferior to the subject, thus, an upward adjustment was applied. The comparable is occupied by a national tenant with a longer term lease which is considered superior to the subject and a downward adjustment was applied for tenancy. The comparable is considered similar to the subject with regard to all the remaining variables and no further adjustments were required. Comparable No. 4 is located in the northwest quadrant of West Kennedy Boulevard and South Keller Road in Maitland. The location and exposure/traffic of this property is considered superior to that of the subject and downward adjustments were applied. This property has corner influence which is superior to the subject. This property is larger in size and an upward adjustment was warranted. This property was built in 2001 and is considered inferior to the subject in age/condition; therefore an upward adjustment was applied. This property is built-out as Class A office space; as a result the quality and % office/warehouse characteristics are superior to the subject and downward adjustments were applied. This

79 property has a higher parking ratio compared to the subject and a downward adjustment was warranted. This property had an occupancy of 92% at time of sale which required a downward adjustment. The comparable is considered similar to the subject with regard to all the remaining variables and no further adjustments were required. Conclusion After adjustments, the comparables ranged from $ to $97.48 per square foot with an average of $84.36 per square foot. We have placed minimal emphasis on Comparable No. 1 since it is a current listing. Without considering Comparable No. 1, the comparables averaged $82.26 per square foot. Based on the aforementioned, the market supports a price per square foot of $82.00 for the subject. The market value of the subject property is calculated as follows: $82.00/S.F. x 91,851 S.F. = $7,531,782 MARKET VALUE AS IS OPINION VIA SALES COMPARISON APPROACH (RD.) $7,530,

80 INCOME CAPITALIZATION APPROACH HENDRY REAL ESTATE The Income Capitalization Approach is typically the most heavily emphasized valuation technique for the appraisal of income producing real estate. This technique consists of five steps, which are listed below. 1. Estimate gross income for the subject through a market analysis of competitive properties. 2. Estimate vacancy loss and expenses. 3. Determine net operating income by subtracting the vacancy loss and expenses from gross income. 4. Determine the appropriate capitalization technique and gather market supported data for its application. 5. Capitalize net income to value. The first step in the Income Capitalization Approach is to estimate gross income. We have surveyed several projects that were sufficiently comparable to the subject to be used in our analysis of economic or market rents. Information on those projects, along with an identifying photograph, can be found on the following pages

81 SUBJECT WINTER GARDEN BUSINESS PARK Winter Garden-Vineland Road Winter Garden, Florida

82 Section/Township/Range: 26/22/27 (Orange County) Folio/Parcel # Year Built: Size: Quoted Street Rents: Effective Rents: 91,851 S.F. $ /S.F., Triple Net $ /S.F., Triple Net Occupancy: 83% Escalators: Pro Rata Expenses: Concessions: Parking Ratio: Turnover/Renewal Ratio: Length of New Leases: Months Vacant Between Leases: Loading: Clear Height: CPI or Step $2.50 per S.F., Triple Net N/A N/A N/A 3-5 Years N/A Grade Level 10'-16' Percentage of Office Finish: Varies (40%-100%) Finish Allowance on Renewals: Finish Allowance on New Leases: Negotiable None Percent Brokerage on Renewals: 2% Percent Brokerage on New Leases: 4%

83 Comments: Winter Garden Business Park is located on the west side of Winter Garden Vineland Road, just south of W. Colonial Drive (S.R. 50) in Winter Garden, Orange County, Florida. There is approximately 15,235 S.F. available within 7 bays. Approximately 9,699 S.F. of the available total is within 4 bays that is "Shell" space. The balance of the vacant space is retail and flex space

84 RENT COMPARABLE NO CARTER COMMERCENTER 890 & 902 Carter Road Winter Garden, Florida Section/Township/Range: 24/22/27 (Orange County) Folio/Parcel #24/22/27/0000/00/018 Year Built: 2002 Size: Quoted Street Rents: Effective Rents: 49,125 S.F. $6.00/S.F., Triple Net $6.00/S.F., Triple Net Occupancy: 73% Escalators: 3% Pro Rata Expenses: $1.95/S.F. Triple Net(includes R.E. Taxes, insurance, management and CAM)

85 Concessions: Parking Ratio: Turnover/Renewal Ratio: Length of New Leases: Months Vacant Between Leases: Loading: Clear Height: Negotiable, free rent available in market 2.10 spaces per 1,000 S.F.; 103 total spaces N/A 3 Years N/A Grade Level 18'-22' Percentage of Office Finish: 10% Finish Allowance on Renewals: Finish Allowance on New Leases: Percent Brokerage on Renewals: N/A N/A N/A Percent Brokerage on New Leases: 6% Comments: This multi-tenant industrial facility is located on the west side of Carter Road, north of Colonial Drive in Winter Garden, Orange County, Florida. Bays are 75' deep, overhead doors are 10' x 14', and 3 phase electrical is available. There is outside storage available, rent is negotiable

86 RENT COMPARABLE NO WEST ORANGE BUSINESS CENTER 1273 Winter Garden Vineland Road Winter Garden, Florida Section/Township/Range: 26/22/27 (Orange County) Folio/Parcel # Year Built: 2008 Size: Quoted Street Rents: Effective Rents: 90,000 S.F. $12.00-$22.00/S.F., Triple Net $12.00-$22.00S.F., Triple Net Occupancy: 88% Escalators: Pro Rata Expenses: Step Triple Net Lease (includes R.E. Taxes, insurance, management)

87 Concessions: Parking Ratio: Turnover/Renewal Ratio: Length of New Leases: Months Vacant Between Leases: Loading: Clear Height: Percentage of Office Finish: Finish Allowance on Renewals: Finish Allowance on New Leases: Percent Brokerage on Renewals: Percent Brokerage on New Leases: Comments: Negotiable, free rent available in market 4.98 spaces per 1,000 S.F.; 157 total spaces N/A 3 Years N/A Grade Level 10 minimum Varies N/A N/A N/A N/A This multi-tenant office/warehouse facility is located on the southeast corner of the Florida Turnpike and Winter Garden Vineland Road, south of US Highway 50 in Winter Garden, Orange County, Florida. This center has office/warehouse buildings with overhead door access. There are currently two spaces available, one with 10,000 square feet at $12/SF and 1,000 square feet at $22/SF

88 RENT COMPARABLE NO WEST OAKS COMMERCE PARK West Colonial Dr Winter Garden, Florida Section/Township/Range: 26/22/27 (Orange County) Folio/Parcel # Year Built: 2007 Size: Quoted Street Rents: Effective Rents: 12,692 S.F. $10.00/S.F., Triple Net $10.00/S.F., Triple Net Occupancy: 20% Escalators: Pro Rata Expenses: Step Triple Net Lease(includes R.E. Taxes, insurance, management)

89 Concessions: Parking Ratio: Turnover/Renewal Ratio: Length of New Leases: Months Vacant Between Leases: Loading: Clear Height: Negotiable, free rent available in market 4.57 spaces per 1,000 S.F.; 116 total spaces N/A 3 Years N/A Grade Level N/A Percentage of Office Finish: 100% Finish Allowance on Renewals: Finish Allowance on New Leases: Percent Brokerage on Renewals: N/A N/A N/A Percent Brokerage on New Leases: 4.5% Comments: This multi-tenant office/warehouse facility is located on the southeast quadrant of West Colonial Drive and Winter Garden Vineland Road in Winter Garden, Orange County, Florida. This center has unit sizes starting at 1,257 square feet with a maximum contiguous space of 10,248 square feet

90 RENT COMPARABLE NO APEX COMMERCE CENTER 350 East Crown Point Road Winter Garden, Florida Section/Township/Range: 26/22/27 (Orange County) Folio/Parcel # Year Built: 2006 Size: Quoted Street Rents: Effective Rents: 35,444 S.F. $12.00/S.F., Triple Net $12.00/S.F., Triple Net Occupancy: 65% Escalators: Pro Rata Expenses: Step Triple Net Lease(includes R.E. Taxes, insurance, management)

91 Concessions: Parking Ratio: Turnover/Renewal Ratio: Length of New Leases: Months Vacant Between Leases: Loading: Negotiable, free rent available in market 2.48 spaces per 1,000 S.F.; 188 total spaces N/A 3 Years N/A Grade Level Clear Height: 20' Percentage of Office Finish: Finish Allowance on Renewals: Finish Allowance on New Leases: Percent Brokerage on Renewals: Percent Brokerage on New Leases: Comments: Varies N/A Negotiable N/A N/A This multi-tenant office/warehouse facility is located on the west side of East Crown Point Road, north of SR 438 in Winter Garden, Orange County, Florida. This is a condominium center with 20' clear height and overhead door access. Nine of the 14 units have been sold. Unit sizes range from 2,227 to 3,230 square feet. There is 12,356 contiguous square feet available separable into five bays

92 RENT COMPARABLE NO TRAILSIDE CENTER 855 E. Plant Avenue Winter Garden, Florida Section/Township/Range: 14/22/27 (Orange County) Folio/Parcel # Year Built: 2007 Size (S.F.): 33,400 Quoted Street Rents: Effective Rent: Load Factor: $13.33-$21.00/S.F., Modified Gross $13.33-$21.00/S.F., Modified Gross N/A Occupancy: 62% Escalators: CPI

93 Pro Rata Charges: Concessions: Parking Ratio: Turnover/Renewal Ratio: Length of New Leases: Months Vacant Between Leases: Alteration Costs on Renewals: Alteration Costs on New Leases: Percent Brokerage on Renewals: Modified Gross Negotiable, free rent available in market 3 per 1000 S.F. N/A 3 to 5 years N/A N/A Negotiable None Percent Brokerage on New Leases: 4% Comments: This property is located on the north side of East Plant Street, east of Dillard Street in Winter Garden, FL. There is approximately 12,763 S.F. available in 7 suites

94 INDUSTRIAL RENT COMPARABLES SUMMARY Name Year Built S.F. Occpy. Quoted Rental Rates Effective Rents % of Office Finish Escalators Length of New Leases Concessions Loading Clear Height Pro Rata Expenses Finish Allowance Per S.F. of Office Turnover/ Renewal Ratio % Brokerage Renewal % Brokerage New Leases Winter Garden Business Park ,851 83% $ /S.F., Triple Net $ /S.F., Triple Net Varies (40%-100%) CPI or Step 3-5 Years N/A Grade Level 10'-16' $2.50 per S.F., Triple Net Negotiable None N/A 2% 4% Carter CommerCenter ,125 73% $6.00/S.F., Triple Net $6.00/S.F., Triple Net 10% 3% 3 Years Negotiable, free rent available in market Grade Level 18'-22' $1.95/S.F. Triple Net (incl. R.E. Taxes, insur., mgmt. & CAM) N/A N/A N/A N/A 6% West Orange Business Center ,000 88% $12.00-$22.00/S.F., Triple Net $ $22.00/S.F., Triple Net 100% Step 3 Years Negotiable, free rent available in market Grade Level 10 Triple Net Lease (incl. R.E. Taxes, insur., mgmt.) N/A N/A N/A N/A N/A West Oaks Commerce Park ,692 20% $10.00/S.F., Triple Net $10.00/S.F., Triple Net Varies Step 3 Years Negotiable, free rent available in market Grade Level 10 Triple Net Lease (incl. R.E. Taxes, insur., mgmt) N/A N/A N/A N/A 4.5% Apex Commerce Center ,444 65% $12.00/S.F., Triple Net $12.00/S.F., Triple Net Varies Step 3 Years Negotiable, free rent available in market Grade Level 20' Triple Net Lease (includes R.E. Taxes, insur., mgmt.) N/A N/A N/A N/A N/A OFFICE RENT COMPARABLE SUMMARY Name Year Built Occupancy Leasable Area (S.F.) Quoted Rent Per S.F. Effective Rent S.F. Load Factor Concessions Alteration Costs Renew/New Pro Rata Charges Escalator % Brokerage Renewal % Brokerage New Leases Trailside Center % 33,400 $13.33-$21.00/S.F., Modified Gross $13.33-$21.00/S.F., Modified Gross N/A Negotiable, free rent available in market N/A Negotiable Modified Gross CPI None 4%

95 RENT COMPARABLES MAP

96 Analysis of Rent Comparables HENDRY REAL ESTATE The foregoing rent comparables were surveyed to determine a market or economic rent for the subject. The subject property is quoted on a triple net basis. Four of the facilities are quoted on a triple net basis whereby the tenant is responsible for real estate taxes, insurance, utilities, common area maintenance, management, and administrative. The remaining comparable is quoted on a modified gross basis whereby the tenant is responsible for only some of those expenses, specific to the particular property. Triple net leases are more beneficial to the landlord since the tenants pay a pro rata share of the buildings operating costs, increasing the landlord s net income. The per square foot rent is a function of the size of the tenant, creditworthiness and the amount of interior build-out provided. The subject is located on the west side of Winter Garden Vineland Road, south of W. Colonial Drive. The subject is an eight building, 91,851 square foot multi-tenant industrial flex complex. The buildings were constructed 2005 through The leases are structured on a triple net basis. The interior finishes are typical of similar vintage industrial flex properties. Comparable No. 1, the Carter CommerceCenter, is located on the west side of Carter Road, north of Colonial Drive in Winter Garden. The property is a 49,125 S.F. multi-tenant industrial facility. The rental rate is quoted on a triple net basis which is similar to the subject. The location of the comparable is inferior. The improvements were built in 2002 and are slightly inferior in terms of effective age. The size of the facility is smaller. The quality/appeal of the improvements is inferior. Overall, the subject should be above the $6.00 per square foot indication of the comparable. Comparable No. 2, West Orange Business Center, is located on the southeast corner of the Florida Turnpike and Winter Garden Vineland Road, south of US Highway 50 in Winter Garden. The property is a 90,000 S.F. multi-tenant industrial facility. The rental rate is quoted on a triple net basis which is similar to the subject. The location of the comparable is slightly inferior. The improvements were constructed in 2008 and are similar in terms of effective age. The size of the facility is similar. The quality/appeal of the improvements is superior. Overall, the subject should be above the square foot indication of the comparable. Comparable No. 3, West Oaks Commerce Park, is located on the southeast quadrant of West Colonial Drive and Winter Garden Vineland Road in Winter Garden. The property is a 12,692 S.F. multi-tenant office facility. The rental rate is quoted on a triple net basis which is similar to the subject. The location of the comparable is superior due to the frontage on Colonial Drive. The improvements were constructed in 2007 and are similar in terms of effective age. The size of the facility is smaller. The quality/appeal of the improvements is superior. Overall, the subject should in line with the square foot indication of the comparable

97 Comparable No. 4, Apex Commerce Center, is located on the west side of East Crown Point Road, north of SR 438 in Winter Garden. The property is a 35,444 S.F. multitenant industrial facility. The rental rate is quoted on a triple net basis which is similar to the subject. The location of the comparable is slightly inferior. The improvements were constructed in 2006 and are similar in terms of effective age. The size of the facility is smaller. The quality/appeal of the improvements is similar. Overall, the subject should in line with the square foot indication of the comparable. Comparable No. 5, Trailside Center, is located on the north side of East Plant Street, east of Dillard Street in Winter Garden. The property is a 33,400 S.F. multi-tenant office facility. The rental rate is quoted on a modified gross basis. The location of the comparable is slightly inferior. The improvements were constructed in 2007 and are similar in terms of effective age. The size of the facility is smaller. The quality/appeal of the improvements is superior. Overall, the subject should below the square foot indication of the comparable. Quoted vs. Effective Rental Rates While we have estimated a market asking rental rate, we must consider the effective rental rates in the subject s market. Free rent is present in the current market, which indicates a net effective rent lower than current asking rents. According to conversations with local brokers, free rent generally ranges from 1 to 4 months. Many leases are structured whereby a new tenant receives a free month of rent for each year of lease. For example, a landlord would give three months free rent for a signed three year lease. Based on the aforementioned and the current state of the subject s market, we have estimated that the subject will give 3 months of free rent on a three year lease. Based on the rent comparables and conversations with brokers active in the local market, the market supports an average quoted rental rate of $10.00 per square foot for the flex space and $12.00 per square foot for the subject s retail space. Allowing for a rent concession of 3 months free on a 3 year lease, which is supported by the market, the effective rental rates are $7.50 per square foot and $9.00 per square foot, respectively, in year 1. Based on the aforementioned, we have estimated an effective rental rate of $10.00 per square foot for the flex space and $12.00 per square foot for the subject s retail space with 3 months free rent. Months Vacant/Down Time We must also estimate down time between a vacancy and a new lease. Upon expiration of a lease, there is down time whereby a new tenant may require tenant alterations and /or the vacated space may sit on the market for a period of time. Tenant alterations on second generation space typically take 30 to 90 days depending on how long it takes to bid the job, approve the permits, and completion of the construction. In the current

98 environment, vacated space typically sits on the market for 1 to 12 months. Based on the aforementioned information, down time has been estimated at 6 months in year 1; 3 months in years 2 and 3; and 0 months for the remainder of the holding period. Rental Rate Growth Rates According to the national survey, growth rates for rental rates range from (-5.00%) to 3.00%. Historical market rent growth rates are summarized below: KORPACZ REAL ESTATE INVESTOR SURVEY - 3rd QTR 2009 NATIONAL FLEX / R & D MARKET Market Rent Change Rate Current Quarter Last Quarter Year Ago Range (5.00%) % (5.00%) % (2.00%) % Average -0.36% 0.82% 2.50% Change (Basis PTS) Local leasing agents indicated a negative rental change rate over the last year. All of the rent comparables experienced declining rental. Based on the aforementioned, we have estimated a rental growth rate of 0.00% for years 1 and 2; 1% for year 3; and 3% for the remainder of the holding period. Analysis of Rent Roll The subject has an overall occupancy of 83% with 15,235 S.F. available. The retail tenants indicate a range of $5.50 to $15.48 per square foot, triple net, with a $9.98 per square foot average. The tenants range in size from 1,260 to 10,000 square feet, with an average of 2,634 square feet. Leases signed since October 2009 are summarized below. RECENT LEASES Tenant S.F. Lease Term Rental Rate/S.F. Rental Rate Increases Renewal Options T.I.'s Concession West Orange Massage Therapy 1, months $9.00, Triple Net 3% 1, 3yr Minimal 2 mos. Free Technology Solution of America 5, months $5.00, Triple Net 3% None "As Is" 2 mos. Free Wired Technology 3, months $9.00, Triple Net 3% None Yes 2 mos. Free Ellipsis Engineering & Consulting 3, months $7.00, Triple Net To $9.40/S.F. in mo. 9 for remainder of term None Yes 2 mos. Free Absorption The subject has 91,851 square feet of rentable space. Based on the rent roll dated December 16, 2009 and our observations of the tenants actually occupying space at this time, there is approximately 15,235 S.F of vacant retail space, which equates to an occupancy of 83%

99 The comparables have retail occupancies ranging from 80% to 100%. Retail occupancies have been negatively impacted as a result of the current recession, and are expected to continue to rise in the short term. In fact, there is 9,688 square feet within 4 bays at the subject property which is 1 st generation shell space, never having been occupied since the property opened in 2005/07. Based on conversations with industrial investors and developers state that 70% to 80% local occupancies are the new norm and do not anticipate any substantial increases from these levels in the foreseeable future. Our cash flow analysis does not begin to absorb the subject s vacant space until June We project that the property will not reach occupancy of 90% until December ESTIMATED ABSORPTION SUMMARY Year 1 Year 2 For the Years Ending Nov-2010 Nov-2011 Percentage Occupancy December 83.48% 92.90% January 83.48% 92.90% February 83.48% 92.90% March 83.48% 97.09% April 83.48% 94.38% May 83.48% 94.38% June 86.19% 92.73% July 86.19% % August 86.19% % September 89.48% % October 89.48% % November 89.48% 97.40% Average Occupancy For The Year 85.65% 96.22% Expense Reimbursement Revenue The tenant leases are structured on a triple net basis. Under the triple net scenario, the majority of local tenants reimburse the landlord for real estate taxes, insurance, utilities CAM, and management/administrative fees

100 Vacancy and Collection Loss HENDRY REAL ESTATE The subject is located in the W Orange/Winter Garden submarket which has an overall physical occupancy rate of 92.9%. The rent comparables have occupancies ranging from 20% to 88%. Based on conversations with local brokers, the consensus is that vacancy rates will continue to rise until we see some sort of economic recovery. All of the brokers we interviewed indicated that there are very few deals being made and prospective tenants are few. Based on the foregoing the market supports a vacancy/collection loss of 10.00% when the property reaches stabilization in December Explanation of Expenses We were provided with the 2007, 2008, and 2009 January through November Operating Statements for the subject. The subject property is currently in lease-up and the operating statements provided do not reflect a stabilized property. Based on the aforementioned, we have placed minimal weight on the historical operating statements. We have analyzed expense information from numerous retail facilities throughout the state of Florida. The subject s leases are on a triple net basis with the tenant pays their pro rata share of all operating expenses, including real estate taxes, insurance, utilities, common area maintenance (CAM), and management/administrative fees. The following is a description of the fixed and variable (operating) expenses of the subject. Fixed Expenses Real estate taxes represent the ad-valorem real estate assessment and any special assessments levied by the local taxing authority. The tax comparables are summarized as follows:

101 2009 ASSESSMENT & GROSS TAXES Name Year Built Size Total Assessment $/S.F. Gross Taxes $/S.F. Winter Garden Business Park ,851 $4,463,007 $48.59 $74,301 $0.81 Carter CommerCenter - Industrial ,125 $1,619,435 $32.97 $26,961 $0.55 Trailside Center - Office ,400 $3,210,762 $96.13 $53,454 $1.60 Vine Village Retail Center - Office ,600 $1,582,852 $73.28 $26,352 $1.22 Mercantile Bank Building - Office ,297 $3,208,757 $ $53,420 $1.76 The assessment comparables range from $32.97 to $ per square foot, with an average of $77.07 per square foot. Gross taxes ranged from $0.55 to $1.76 per square foot, with an average of $1.28 per square foot. We have utilized the 2009 taxes of $75,000 (rounded) in year one of our analysis. The expense was escalated 3% per annum. Insurance covers property and causality insurance for the subject and includes coverage for fire, flood, etc. The expense comparables have insurance expenses from $0.19 to $0.79, with an average of $0.43 per square foot. Based on the aforementioned, we have utilized the subject s current insurance premium at $45,000 (rounded) which equates to $0.49 per square foot in year 1 of our analysis. The insurance expense has been escalated at 3% per annum throughout the 10 year cash flow. Variable Expenses In addition to real estate taxes and insurance, the subject has operating or variable expenses, including utilities, common area maintenance (CAM), management/administrative and reserves. Utilities typically include water, sewer and utility expenses. The expense comparables indicated utility expenses ranging from $0.13 to $0.29 per square foot with an average of $0.20 per square foot. Based on the aforementioned and the subject s annualized 2009 utilities expense of $0.30 per square foot, we have estimated the utilities expense at $0.30 per square foot. Common Area Maintenance (CAM) expenses include such items as utilities, building maintenance, grounds and parking lots maintenance, security, landscaping, sweeping, janitorial, exterminator, fire protection, trash removal, plumbing, damage claims, miscellaneous, etc. The expense comparables have CAM expenses ranging from $0.06 to $1.59 per square foot, with an average of $1.00 per square foot. Based on the aforementioned we have estimated CAM at $0.75 per square foot in the year 1 of our analysis. The expense was escalated 3% per annum. Management/Administrative Fee represents monies paid to a third party management company for the daily operation of the subject property and typically range from 3% to 5% of effective gross revenue. The expense comparables indicate management/administrative fees ranging from 3.00% to 5.07% of EGI, with a 4.00%

102 average. Based on the aforementioned, we have estimated a management fee expense of 4.00% of effective gross revenue. Structural reserves is a category where the landlord supposedly escrows a certain amount of operating income each year to defray non-recurring structural and mechanical repairs and/or replacements. These expenses are usually incurred on a pay as you go basis and they vary widely over the term of ownership. Reserves are typically budgeted at $0.20 to $0.30 per square foot. According to the 3 rd Quarter 2009 Korpacz Real Estate Investor Survey, reserves for institutional investors range $0.10 to $0.50 per square foot. We have estimated reserves at $0.25 per square foot. The expense was escalated 3% per annum. Expense Growth Rates According to the national survey, growth rates for operating expenses range from 2.00% to 4.00%. Historical expense change growth rates are summarized below: KORPACZ REAL ESTATE INVESTOR SURVEY - 3rd QTR 2009 NATIONAL FLEX / R & D MARKET Expense Change Rate Current Quarter Last Quarter Year Ago Range 2.00% % 2.00% % 2.00% % Average 3.00% 2.94% 2.95% Change (Basis PTS) Local leasing agents indicated an expense growth rate of approximately 3.00%. Based on the aforementioned, we have estimated an average annual growth rate of 3.00% for expenses for the 10-year holding period. Local management companies, investors, and historical operating expenses support the growth rate assumptions

103 Year of Expenses Comparable # Stab. Pro Forma INDUSTRIAL EXPENSE COMPARABLE SUMMARY Comparable # Comparable # Comparable # Comparable # (Aug. Ann.) County Pinellas Pasco Hillsborough Hillsborough Seminole Year Built Size (S.F.) Occupancy 94% 20% 63% 100% Base Rental Income Per S.F. Ten. Contributions Vac. & Collection Effective Gross Income Per S.F. Less Expenses Fixed R.E. Taxes Per S.F. Insurance Per S.F. Total Fixed Expenses Per S.F. Utilities Per S.F. Water Sewer Trash Removal Electric CAM Per S.F. General/Administrative Per S.F. Per Month Reserves Per S.F. Management Fee Per S.F. % Of EGI Total Variable Expenses Per S.F. Total Expenses Per S.F. % of EGI N.O.I. Per S.F. $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $

104 Discounted Cash Flow Analysis HENDRY REAL ESTATE In the discounted cash flow analysis (DCF), income and expenses are analyzed for each year of the projection period and the net income is discounted to a present value indication by applying an appropriate yield rate (discount factor). The value for the subject is estimated by summing the present values of the cash flows during the projection period and the present value of the reversion at the end of the holding period (less typical sales cost). We have utilized the Argus Analysis software to perform our discounted cash flow analysis. As in direct capitalization, the most difficult part of this analysis is selecting an appropriate discount rate (yield rate). The discount rate in this instance is the property discount (yield) rate as opposed to the equity yield rate, which is the return on and of equity to the equity investor. In other words, the equity yield rate is the annualized rate of return on equity capital, including the full effect of any gain or loss from resale at the termination of the investment; i.e., the internal rate of return (IRR) to the equity investment. The property discount rate is a function of the mortgage and equity components or essentially a weighted rate. In the case of unleveraged transactions, the property discount rate may be equivalent to the equity yield rate. However, they are not synonymous terms. It is more difficult to quantitatively establish a discount rate than the capitalization rate because the capitalization rate can be analyzed in the present time frame; i.e., it addresses a single stabilized operating income. The discount rate addresses future expectations; hence, it will not actually be known until the property is sold. Past trends can be observed, but due to changing conditions in the marketplace, future target rates by investors are the best measure of deriving discount rates. KORPACZ REAL ESTATE INVESTOR SURVEY - 3rd QTR 2009 NATIONAL FLEX / R & D MARKET Discount Rate Current Quarter Last Quarter Year Ago Range 7.75% % 7.75% % 6.75% % Average 9.84% 9.41% 8.69% Change (Basis PTS) RERC SURVEY - 3rd QTR 2009 FLEX MARKET Pre-Tax Yield 3rd QTR st QTR rd QTR 2008 Rate Range 9.00% % 8.90% % 7.50% % Average 10.50% 10.40% 9.00% Change (Basis PTS) The national surveys indicate average discount rates ranging from 7.75% to 13.00% with averages ranging from 9.84% to 10.50%. Discount rates can vary greatly primarily due to the quality and location of the improvements, as well as tenant composition. The national surveys primarily tract institutional grade properties held within large portfolios. Based on this information, it is our opinion that an applicable discount for the subject would be

105 approximately 11.00%. This also assumes that turnover costs such as brokerage commissions, retrofit, etc., are deducted from the cash flow. There are certain other assumptions that must be made in constructing a discounted cash flow analysis, such as vacancy rates, growth rates for income and expenses, turnover costs, as well as a terminal capitalization rate (capitalization rate of the reversion), and selling costs. Turnover Expenses Generally, turnover costs result when a tenant's lease expires. Expenses associated with lease expiration include tenant alterations (improvements) and leasing commissions. The following chart summarizes the turnover expenses for shopping centers located in similar surrounding areas. TURNOVER RATIOS Property Turnover/Renewal Ratio Winter Garden Business Park N/A Carter Commerce Center N/A West Orange Business Center N/A West Oaks Commerce Park N/A Apex Commerce Center N/A Trailside Center N/A The 3rd Quarter 2009 Korpacz Real Estate Investor Survey indicates tenant retention at 45% to 75% based on national surveys of strip shopping centers. Based on the rent comparables and due to the nature of the subject's sub market, we anticipate that 60% of the leases will renew; thus, 40% will not. Therefore, tenant alterations and leasing commissions must be deducted from the cash flow. Tenant alterations represent the cost of retrofitting the space upon lease expiration to accommodate changing needs or tenants. The following chart summarizes the tenant improvements for the rent comparables. TENANT ALTERATION COSTS Property Alteration Costs New Alteration Costs Renewals Winter Garden Business Park Negotiable None Carter Commerce Center None None West Orange Business Center Negotiable None West Oaks Commerce Park Negotiable None Apex Commerce Center Negotiable None Trailside Center Negotiable None The 3rd Quarter 2009 Korpacz Real Estate Investor Survey indicates tenant alterations for 2 nd generation space averaged $8.38/S.F. and $2.31/S.F. for renewals. Based on the rent comparables, with support from other similar properties we have appraised, the

106 market supports a $8.00 per square foot alterations cost for new tenants and $2.00 per square foot for renewals. The subject s 9,699 square feet of shell space has been built-out at a cost of $15.00 per square foot upon execution of a lease. Leasing fees represent the commissions to staff and outside brokers for procuring new tenants and the renewal of existing tenants. The rent comparables are summarized below. LEASING FEES Property % Broker New % Brokerage New Renewal Winter Garden Business Park 4% 2% Carter Commerce Center 6% N/A West Orange Business Center N/A N/A West Oaks Commerce Park 4.5% N/A Apex Commerce Center N/A N/A Trailside Center 4% None Based on the aforementioned and considering the rent comparables, leasing fees are based on a 4% average commission for new leases and 2% commissions on renewals. Sales Expenses - includes a provision for brokerage commissions (at sale), title fees, and other expenses associated with the sale of the property at reversion. The 3rd Quarter 2009 Korpacz Real Estate Investor Survey indicates that sales expenses range from 1.0% to 4.0%. The estimated sales expense is 3%. Terminal Capitalization Rates In direct capitalization there are several ways to determine the capitalization rate. We have first employed market extraction, which involves deriving capitalization rates directly from properties, which were recently sold. In the Sales Comparison Approach section of this report, we have presented sales with overall rates that bracket the parameters applicable to the property under appraisement. Those capitalization rates are recapitulated as follows: MARKET EXTRACTED OVERALL RATES Property Sale Date Year Built Size % Occ. OAR Winter Garden Business Park Dec ,851 83% N/A ADC XI Dec ,362 0% N/A CrownPointe Five Feb ,003 71% 8.00% FedEx Express Bldg Sep , % 7.26% Reserve at Maitland Jan ,835 92% 6.50% Averages 7.25% The improved sale comparables indicate a range of 6.50% to 8.00% for overall capitalization rates, with a 7.25% average. Overall, the comparables illustrate the rise in capitalization rates. As such, we would expect a market overall rate for the subject to be

107 between 8.25% and 9.25% based on the comparables. Based on the aforementioned, the market supports a capitalization rate of 9.00%. Additional support is provided from the Korpacz Investor Survey and RERC survey and summarized as follows: KORPACZ REAL ESTATE INVESTOR SURVEY - 3rd QTR 2009 NATIONAL FLEX / R & D MARKET Overall Cap Rate (OAR) Current Quarter Last Quarter Year Ago Cap Rate Range 7.00% % 7.00% % 5.50% % Average 8.77% 8.36% 7.60% Change (Basis PTS) RERC SURVEY - 3rd QTR 2009 FLEX MARKET Going-in Cap Rate 3rd QTR st QTR rd QTR 2008 Cap Rate Range 8.00% % 7.90% % 6.30% % Average 8.80% 8.90% 7.20% Change (Basis PTS) Korpacz and RERC are national surveys and not location or property specific; however it does show a trend in capitalization rates, which indicate an increase of approximately 117 to 160 basis points since the 3 rd quarter Band of Investment An alternate method of calculating the capitalization rate for the income approach is the Band of Investment Technique. The Income Approach to value is based on the premise that a direct relationship exists between the value of a property and the amount of income it is capable of generating. Capitalization is the process of converting a stabilized income stream into an estimate of value and is obtained by dividing net operating income before debt service by an "overall rate." This overall rate is built-up after taking into consideration requirements of the mortgage as well as a return on the equity investment. The Band of Investment Technique is based on the premise that investments in income producing properties are typically financed with a mortgage, and that an equity investor will seek the best available loan terms in order to take advantage of the benefits of leverage. An overall rate must reflect the complete cash flow requirements of an investment. The derivation of this rate by the Band of Investment method develops a weighted average of the mortgage constant and a competitive equity dividend rate necessary to compensate for alternative investments. According to mortgage brokers, loan terms for retail buildings feature 5 to 10-year balloons, 25 to 30-year amortizations, 50% to 70% loan-to-values, and interest rates of 250 to 300 basis points over prime. Factors that influence the interest rate are the loan-to-value ratio, the credit worthiness of the borrower, and the potential for turnover within the

108 property. In our Band of Investment analysis, we are using the terms of 6.50% with a 65% loan-to-value ration and a 30-year amortization. Equity dividend rates (EDRs) for similar facilities generally range from 8.00% to 14.00% for industrial flex/r&d properties. It is our opinion the market supports an equity dividend rate, or cash-on-cash return, of 11.00% for the subject. The Band of Investment parameters are summarized as follows: BAND OF INVESTMENT PARAMETERS Interest Rate 6.50% Loan-to-Value Ratio 60% Amortization Period 30 Years Equity Dividend Rate 11.00% BAND OF INVESTMENT CALCULATIONS Loan-to-Value Ratio x Mortgage Constant = Mortgage Interest Equity-to-Value Ratio x Equity Dividend Rate = Equity Total Overall Rate 0.65 x = x = Total Overall Rate (Rounded) 8.80% The Band of Investment calculations indicate a capitalization rate of approximately 8.80%. Our selection of a capitalization rate considers the subject s location, prospective leases, annual escalations, and the current market conditions. Based on conversations with industrial brokers, industrial investors and industrial developers, the overall consensus is that capitalization rates are on the rise. This is a result of the current economic environment having a negative affect on the viability of the tenants to operating at current levels. NOI s are expected to continue to contract in the foreseeable future until the economy stabilizes. The market participants indicated an applicable capitalization for the subject would range from 8.50% to 9.50%. Terminal Capitalization Rates are typically 0 to 100 basis points above going in capitalization rate. We have referred to national surveys for estimating a terminal capitalization rate. KORPACZ REAL ESTATE INVESTOR SURVEY - 3rd QTR 2009 NATIONAL FLEX / R & D MARKET Residual Cap Rate Current Quarter Last Quarter Year Ago Cap Rate Range 7.50% % 7.00% % 7.00% % Average 9.11% 8.56% 8.20% Change (Basis PTS)

109 RERC SURVEY - 3rd QTR 2009 FLEX MARKET Terminal Cap Rate 3rd QTR st QTR rd QTR 2008 Cap Rate Range 8.00% % 8.30% % 6.80% % Average 9.00% 9.20% 8.00% Change (Basis PTS) The national surveys have average terminal capitalization rates approximately 20 to 34 basis points higher than the average going in rates. We have estimated a going in capitalization rate of 9.00%. Based on this analysis, a 9.50% terminal capitalization rate is applicable for the subject property. It should be noted that within our reversion calculations, we capitalized the net operating income and subtracted sales costs (3%) to arrive at a net reversion. The DCF parameters are summarized as follows: DCF PARAMETERS Discount Rate 11.00% $10.00/S.F.-Flex, Triple Net Effective Market Rental Rate $12.00/S.F.-Retail, Triple Net Growth Rates Income 0%-yrs 1 1% - yr 2 3% - yrs 3-10 Expense 3% Vacancy and Collection Loss 10% - Stabilized December 2010 Turnover Probability 40/60 $20.00/S.F. - 1st Generation Alterations (//Renewal) $8.00/S.F. - New Tenant (2 nd Generation) $2.00/S.F. - Renewal Tenant Alteration Escalation 3.00% Down Time 6 months Yr. 1 3 month Yrs months Yrs months Yrs. 1-2 Free Rent 1 month Yrs months Yrs Leasing Commissions New Leases 4% Renewals 2% Terminal Capitalization Rate 9.50% Sales Expense 3%

110 AS IS CASH FLOW EXCLUDING ENTREPRENEURIAL INCENTIVE

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112 AS IS PRESENT VALUE TABLE EXCLUDING ENTREPRENEURIAL INCENTIVE

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114 Summary HENDRY REAL ESTATE The indicated value for the Discounted Cash Flow Analysis is illustrated as follows: Yield Capitalization $7,904,000 It should be noted that this value excludes the entrepreneurial incentive that must be considered in taking the property from its current 83% occupancy level to Stabilized occupancy of 90%. MARKET VALUE OPINION EXCLUDING ENTREPRENEURIAL INCENTIVE (RD.) $7,905,000 Market Value As Is Opinion Analysis We were requested by the client to provide a Market Value As Is opinion for the subject. To determine the Market Value As Is Opinion, deductions from the market value excluding entrepreneurial incentive are required for the necessary incentive required by an investor to lease up the property for the current occupancy of 83% to a stabilized level of 90%. In a normal market, the total profit required by an investor to take a building this size through absorption to a stabilized occupancy would generally range from 15% to 20%. Given the current market, including a lack of liquidity, we have estimated the profit amount of $350,000. Including the allowance for entrepreneurial incentive, results in an IRR of 11.70%. Market Value As Is excluding Entrepreneurial Incentive $7,905,000 LESS: Profit ($350,000) Market Value As Is Opinion $7,555,000 INDICATED MARKET VALUE AS IS OPINION VIA INCOME CAPITALIZATION APPROACH $7,555,

115 Prospective Market Value Upon Stabilization Opinion Analysis Currently, the property is operating at 83% occupancy, according to the December 16, 2009 rent roll. Using the previously stated parameters in our Discounted Cash Flow Analysis, we anticipate the subject property will reach a stabilized occupancy of 90% by December We have utilized a stabilized year of December 2010 November The subject property s stabilized Net Operating Income for the stabilized year is $799,209. We have already estimated that an applicable capitalization rate for the subject property under current market conditions is 9.00% for the subject property. Due to the increased risk associated with bringing the subject property to stabilization and the belief that capitalization rates will continue to rise in the future, we would expect the capitalization rate to be above the As Is capitalization rate. According to several brokers, investors, and developers the Upon Stabilization capitalization rate should range from 25 to 100 basis points above the rate we used to estimate the As Is value. We have estimated an Upon Stabilization capitalization rate of 9.25% considering that the property will be stabilized within 12 months. Income can be capitalized to value by using the simplistic formula of: V = I / R Where V = Value, I = Income, and R = Rate $799,209 / = $8,640,097 INDICATED PROSPECTIVE MARKET VALUE UPON STABILIZATION OPINION VIA INCOME CAPITALIZATION APPROACH (RD.) $8,640,

116 PROSPECTIVE STABILIZED CASH FLOW

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118 PROSPECTIVE STABILIZED PRESENT VALUE TABLE

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120 RECONCILIATION AND FINAL VALUE OPINIONS We have used the applicable approaches to value the subject property. Market Value As Is Opinion Prospective Market Value Stabilized Opinion COST APPROACH N/A N/A SALES COMPARISON APPROACH $7,530,000 N/A INCOME CAPITALIZATION APPROACH $7,555,000 $8,640,000 The Cost Approach estimates value by analyzing comparable land sales and estimating the current cost of constructing the improvements, less any applicable depreciation. The Cost Approach is primarily used in the valuation of new construction and typically building up to seven years of age. In regard to the Cost Approach, current industrial; land sales are not available in the current market, thus the land value for the subject would be diluted. The subject property is relatively new construction; however, market conditions have deteriorated to the point that construction of a property such as the subject would not be feasible at this time. No construction financing is available for this property type in this market, as the majority of industrial flex properties are operating at high historical vacancies. The comparison of the Income Capitalization Approach with only the construction costs (taken from Marshall and Swift, excluding the site) of a project such as the subject illustrates the inapplicability of this approach. The Sales Comparison Approach is considered a reliable technique if a number of comparable generally comparable properties have recently sold. This approach involved comparing the subject property with the comparables and adjusting the comparables for varying physical and locational characteristics. The Sales Comparison approach was given secondary weight in the overall valuation of the subject property with the Income Capitalization Approach lending primary support. The Income Capitalization Approach is considered to be the most reliable indicator of value, as many investors look toward the Income Capitalization Approach in their purchasing decisions. The Income Capitalization Approach utilizes an analysis of the subject property s projected income and expenses relative to the market and converts cash flows to value via direct capitalization and discounted cash flow analysis. Good market information was available with respect to comparable rental projects, and income and expense comparables, as well as capitalization rates. This approach was given primary weight in the overall valuation of the subject with the Sales Comparison Approach lending secondary support

121 Considering the foregoing commentary, and assuming a 12 to 18 month marketing period, it is our opinion the indicated market values of the property under appraisement, as of December 16, 2009 are summarized as follows. Market Value As Is Opinion The Market Value As Is opinion reflects the current occupancy and condition of the subject property, as of December 16, 2009 (effective date of the appraisal), and represents the leased fee interest. The market data indicates exposure time of 12 to 18 months. Based on current conditions, we have estimated a marketing time for the subject of 12 to 18 months. SEVEN MILLION FIVE HUNDRED FIFTY THOUSAND DOLLARS ($7,550,000) Prospective Market Value Upon Stabilization Opinion (12/10-11/11) The Prospective Market Value Upon Stabilization Opinion represents the future leased fee value of the property upon economic stabilization or full occupancy. Stabilization is expected by December The market indicates an exposure time of 12 to 18 months and we have estimated a marketing time of 12 to 18 months. EIGHT MILLION SIX HUNDRED FORTY THOUSAND DOLLARS ($8,640,000)

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